Salisbury News

Monday, October 08, 2012

CBO On SS - It's A Terrible Deal For Most People

Both Mitt and Barack spoke about Social Security (SS) in their debate. For political reasons, they took the same approach. They indicated their continuing support for this busted program. They agreed that some “tweeks” might be necessary, but there would be no fundamental changes to America’s largest entitlement program.

I wish that one or the other of the candidates had spoken the truth about SS. The fact is it is a terrible program for the vast majority of workers who are forced to contribute to it in order to keep this dog alive.

Fortunately, the Congressional Budget Office has provided the information necessary to look at SS and evaluate how various income groups will fare over their lifetimes. The bottom line is as ugly as it can get. The fact is that SS is stiffing 80% of American workers.

The key statement from the CBO report (link) [4]:

For people born in the 1940s or later who have household earnings in the second quintile or above, the present value of taxes will be, on average, more than the present value of scheduled benefits.

Got that lovers of SS? 80% of the people who contribute to SS get less than what they paid in. Only the bottom 20% of income earners have a chance of breaking even.

The CBO provided a chart that describes the consequences to various income groups. I found the CBO presentation a bit confusing and also misleading. The following is the original chart from the CBO, after that is my stripped down version.

My favorite time of year is _____.

How To Cultivate Resilience

It’s the utter resolve I’ve seen in a training client who lost his legs in an accident and now runs marathons with the use of prosthetics. It’s the friend who lives with a medical condition that imposes debilitating pain and continues to run a successful business, raises a tight-knit family, and volunteers in his community. It’s any of us who pick ourselves up after a profound loss or life transition, who decide exceptionally challenging circumstances aren’t going to keep us from leading fulfilling, grateful lives. I’m also mindful of those who may have struggled through the recent 21-Day Challenge, but don’t want to give up just days after it has ended. If that’s you, listen up.

Resilience can encompass the emotional and physical stamina to get through a patch of rough weeks or bounce back from illness or injury. Even more dramatically, however, resilience can mean the fortitude to deal – and even grow – with life-changing setbacks.

Big Bird's A One-Percenter: Inside Sesame Street's Tax Return

Critics have pounced on Gov. Mitt Romney's debate statement that he will cut funding toPBS, even though he says he likes Big Bird. Democrats have tried to characterize his anti-Muppet statement as cold and heartless, but a 2011 tax return reveals Big Bird made enough money last year to put himself in the one percent earnings bracket.

The 2011 IRS 990 form for Sesame Workshop (formerly the Children's Television Workshop), the producers of Sesame Street, revealed that they received $7,968,918 in government grants last year. That sounds like a hefty amount, but the 990 also revealed that Sesame Workshop received $44,984,003 in royalties last year, which includes sales of Sesame Street brand merchandise like "Tickle Me Elmo" dolls. That means Big Bird made five times in merchandise sales than what he received in government grants.

An even closer look at Sesame Workshop's finances shows the government funding Romney wants to cut is only a small part of their budget and may not be necessary at all. In 2011, Sesame Workshop received $31,555,192 in grants and donations last year apart from the U.S. government. They also raised over $2 million in additional funds from various fundraising events. In all, Sesame Workshop raised almost $34 million in private funds for Sesame Street, aside from government grants.

In addition, Sesame Workshop brought in almost $30 million in revenue from content distribution and media production. In total, Sesame Workshop brought in over $122 million in revenue, not including government grants. On their website, Sesame Workshop claims corporate, foundation, and government support make up 35% of their budget. Realistically, however, government funding only accounts for just over 6% of their budget.

'Another One Bites The Dust'

Noel Polanco, Unarmed Man Killed By NYPD, Was National Guardsman ... An unarmed 22-year-old man shot and killed by a New York City police officer during a traffic stop in Queens Thursday morning was a member of the New York Army National Guard, authorities said. Police said Noel Polanco was speeding and driving erratically near LaGuardia Airport just after 5 a.m. when he was pulled over by officers. New York Police Department sources initially told news outlets that as two officers approached the car, Polanco reached under his seat, prompting Detective Hassam Handy to shoot him once in the stomach. Polanco died shortly after being taken to a nearby hospital. – Huffington Post

Dominant Social Theme: Police officers are serious people and crime is a serious occurrence. In America, you can die even if you just go a little bit over the speed limit, or if law enforcement believes you might have been doing so.

Free-Market Analysis: This is a sad article posted at the Huffington Post but we have given this article a foolish and insensitive title to show how easy it is to get inured to this kind of police brutality.

There is no other description for it but "brutality." Over and over – almost every day now, it seems – there comes some report of an officer of the law shooting someone who has been stopped for a potential infraction as minor as a traffic ticket.

In too many cases, the individual is proven to have not actually done anything confrontational. The gun the individual was reaching for, or knife, or whatever, turns out not to exist. Yet these people bleed to death, or go into shock and die, or have heart attacks from tasers.

California Gas Prices Continue To Spike

Many California drivers are now paying upwards of $5 a gallon for gas, the result of refinery outages and a unseasonably warm weather, the AP reports.

Temperatures are expected to head up to at least 79 degrees in L.A., while production

disruptions linger at local Chevron and Mobil refineries, according to USA Today.

GasBuddy is registering an average price

of $4.53 this morning for the state, near the record of $4.61 from June 2008.

Surprise Military Homecoming

Warning: You might need a few tissues for this one.

Obama - The College Years

WARNING: Some foul language.

Folks, We Have A Brand New Ballgame

Mitt Romney on Wednesday night turned in the finest debate performance of any candidate of either party in the 52 years since Richard Nixon faced John F. Kennedy, with the possible exception of Ronald Reagan's demolition of Jimmy Carter in 1980.

But where Reagan won with style and quips – "There you go again" – and his closing line, "Are you better off now than you were four years ago?" Romney crushed Obama on both substance and style.

Mitt was like a contender so keyed up by his title shot that, between rounds, he could not sit on his stool, but stood in his corner to rush out and re-engage the champ the instant the bell sounded for the next round.

Obama was mauled, with facts, figures, anecdotes, arguments, jokes, quips. A smiling Romney was on offense all night. And the president's performance seems inexplicable.

With the split screen showing his response to Romney's swarm attacks, he appeared diffident, sullen, pouting, flustered, petulant.

Are you a good singer?

The September Jobs Report Was Bad

Is this the Obama October Surprise?

Only in an era of depressingly diminished expectations could the September jobs report be called a good one. It really isn’t. Not at all.

1. Yes, the U-3 unemployment rate

fell to 7.8%, the first time it has been below 8% since January 2009. But that’s only due to a flood of 582,000 part-time jobs. As the Labor Department noted:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

2. And take-home pay? Over the past 12 months, average hourly earnings have risen by just 1.8 percent. When you take inflation into account

, wages are flat to down.

3. The broader U-6 rate — which takes into account part-time workers who want full-time work and lots of discouraged workers who’ve given up looking — stayed unchanged at 14.7%. That’s a better gauge of the true unemployment rate and state of the American labor market.

Obama's Recovery Versus His Promises

Coast Guard Searches For 2 Missing Md. Boaters

PORTSMOUTH, Va. - The Coast Guard is searching for two Maryland boaters who went missing while traveling to Virginia.

The Coast Guard said Sunday that 51-year-old Mike Bramlett and his brother, 54-year-old Donald Bramlett, left Ocean City, Md., Saturday morning. They were expected to arrive in Chincoteague on Saturday evening.

A Freaked Out Obama Administration Urges Defense Firms To Risk Breaking The Law

The law

states simply that if private defense firms are going to lay off their employees, they must give those employees at least 60 days notice.

But the automatic defense cuts associated with the fiscal cliff, and the notifications that would be required if defense firms plan to lay off employees, has created an election concern for the Obama administration.

So, the administration has decided to offer to bankroll the legal fees that these companies may incur if they opt not to notify employees 60 days prior to the layoffs, as the law stipulates.

Megan McArdle of The Daily Beast reports:

The government's guarantee to foot the bill for legal problems, as long as contractors heed OMB's advice to refrain from warning about lob losses, is unusual. "I don't know of any situation where the government has done this in the past," said William Gould, a labor professor at Stanford Law School

The War Between Credit And Resources

The Federal Reserve is probably not ready to take the aggressive plunge into Nominal GDP Targeting, but it likely will.

Such a policy, which received wider attention during Ben Bernanke's Congressional questioning last year and was also highlighted this year in a paper delivered at the Jackson Hole conference (Woodford, opens to PDF [26]), has not caught any visible traction with Washington policy makers possibly because it’s seen as either too radical, or simply too new.

However, after four years of broad reflationary policy (and another year to come) failing to meaningfully spur U.S. employment growth, the Fed may be willing to try such measures by late next year, 2013.

Indeed, given the Fed’s recent announcement of open-ended quantitative easing (QE), one can already anticipate the incremental move towards Nominal Gross Domestic Product (NGDP) Targeting, which has as its central belief that an aggressive and open-ended promise to pursue growth at the expense of inflation is the booster required to push a structurally broken economy back to normal trend. Moreover, in contrast to Bernanke’s swift rejection last year of NGDP on a conceptual basis, Bernanke discussed the idea in friendlier terms during his post-Federal Open Market Committee (FOMC) news conference.

What’s 'exciting' about the emergence of NGDP Targeting into mainstream economic thinking is that, once implemented, it will provide a real-world test of reflationary policy’s final effort to combat the forces that have led to the end of strong, economic growth. The appearance of the Woodford paper (link above) further highlights the reality that endless amounts of cheap capital will be provided to restart economies, now that we are in energy transition, with the world having lost its cheap oil. The battle between credit and natural resources will be renewed.

What will be the effect on global natural resource extraction in an era of NGDP Targeting?

Maryland Incumbents In Congress Dodge Debates

A funny thing happened last Tuesday in Ellicott City. Two incumbent congressmen actually sat down with their opponents and talked about issues. Otherwise, incumbents across Maryland – mostly Democrats – are avoiding engaging their challengers in any kind of discussion that goes beyond trading charges in mailers, ads and press releases.

Eight-term Congressman Elijah Cummings was one of those congressmen Tuesday night, but it appears his appearance in front of the Howard County League of Women Voters will be his first and last with Republican challenger Frank Mirabile, whom he defeated with 75% of the vote in 2010.

“We have other priorities,” said Mike Christianson, campaign spokesman for Cummings for Congress. “Congressman Cummings is extensively involved in the presidential reelection efforts for President Obama and for Senator [Ben] Cardin.”

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Troopers Investigate Serious Crash Involving A Pedestrian, Rehoboth

Location: Coastal Highway (SR1) northbound, entrance to Seaside Outlets, .1 mile north of Holland Glade Road, Rehoboth Beach, DE

Date of Occurrence: Sunday October 7, 2012 at approximately 5:35 p.m.

Operator and Vehicle Information:

Operator #1: Bernice J. Wastler, 73, Rehoboth Beach, DE

Vehicle #1: 2007 Mercury Grand Marquis

Pedestrian: Kelley R. Oram, 34, Rehoboth Beach, DE

Resume:

Rehoboth Beach, DE- The Delaware State Police Collision Reconstruction Unit is investigating a serious crash involving a pedestrian late yesterday afternoon.

The incident occurred around 5:35 p.m. Sunday afternoon as Bernice J. Wastler was operating a 2007 Mercury Grand Marquis northbound on Coastal Highway (SR1) in the center lane approaching the traffic light at Seaside Outlet entrance. Kelley R. Oram, who was just north of the intersection, was attempting to walk across the highway from the east side of the road to the west. As the Marquis went through the intersection, Oram was struck in the center lane of SR1.

Kelley Oram was removed from the scene by EMS and initially transported to Beebe Hospital before being transferred to Christiana Hospital where she is listed in critical condition.

Bernice Wastler, who was properly restrained, was removed from the scene by EMS and transported to Beebe Hospital with non-life-threatening injuries.

The Collision Reconstruction Unit is continuing their investigation into this incident. SR1 northbound in the area of the crash was impacted for approximately three hours as it was investigated and cleared.

“Troopers remind pedestrians to use caution and safety when walking on or near roadways. If you must cross a roadway utilize appropriate cross walks and make sure to look left, then right, then left again before proceeding. When walking near a roadway always make yourself visible to drivers by wearing bright/light colored clothing and reflective materials. Pedestrians that are walking at night must carry a flashlight for added safety.”

Unlimited Democracy

The Magna Carta was an early attempt to rein in government, reduce the scope of monarchical rule. Constitutional monarchy was the result in many countries.

When democracies replaced monarchies, the urgency to limit their scope of power waned even though there are many political theorists who warned that democracies can turn out to be quite tyrannical. The tyrannies of majorities are well known. Most recently there was plenty of talk about that in connection with developments in Egypt and elsewhere in the Middle East. The election of Hamas, for example, bode ill for limited democracy!

Even in countries such as the United States of America, the form of government that emerged was labeled "illiberal democracy." Fareed Zakaria's book The Future of Freedom: Illiberal Democracy at Home and Abroad discussed the difference between liberal and illiberal democracies in the context of geopolitics but the idea had been the focus of Alexis de Tocqueville's Democracy in America over a century ago.

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