Incentives and the Fiscal Cliff

Now that we are just few days from the New Year...  Why would any Republican politician vote for a TAX INCREASE?  When they can wait until Wednesday and vote for a huge TAX CUT !!!

So I can understand why they are waiting, however I am not sure what is going to change for the Democrats after the first of the year. I don't think their desire to keep spending is going to be any more acceptable to the GOP on Wednesday.

I can see the tax/revenue side being addressed quickly next week, but the spending side solution seems more elusive.

CNN Fish or Cut Bait?
FOX News Law Makers Huddle

FOX News Tax vs Spend Discussion

Merry Christmas

Fiscal Cliff Bummer...

The GOP could not even agree...  And it was something the Democrats didn't like.

CNN Plan B Pulled

MN Double Taxation

I love blogging because I often learn something I should have known.  Speed posted the following and it was pretty interesting.  Thoughts?

Speed Gibson Double Taxation

Also, what do you think the next MN Budget will be?  (>$40 million?)  As I noted on Speed's post, I keep reading that the Left leaning Democrats are going to make things right after all these terrible Republican years. Yet no one wants to answer what the budget will be or where the money will come from.

Speed Gibson New Priorities
MPP MN Budget Gimmicks
MPP Rebrand MN DFL
G2A Gov't will Grow
G2A MN Budget Baseline
MN Budget History

On top of this, I am assuming the DFL will be pushing a HUGE bonding bill.  That us and our kids will be paying for, for a long time.  Even if the interest was cheap.

Michigan Right to Work Update

These timing of these 2 FOX articles seemed too good to pass up.

Thoughts?

FOX News Michigan House approve RTW bill
FOX News Chrysler Workers Re-instated
G2A MN RTW Update

Back to The Debt / Fiscal Cliff

The CNN Money folks wrote what I think is a very fair and balanced article today.  It seems to challenge both the Left and Right's perception of reality.
CNN The Real Debt Problem


And more on the details are scarce on both sides.
FOX News Details on Cuts

Thoughts?

Reformers Hate Teachers?

 Alec posted this over at MPP.  MPP Reform Dismisses Crucial Lynchpin  I interpretted it that Alec feels that ALL American Modern Education Reformers hate Teachers for some irrational reason.

Of course I disagree with both of these beliefs:

1. I think that the vast majority of people like and respect most teachers.  I certainly do. The challenge they face is huge and I think most do an admirable job.
2. I think that Teacher's via their Union have brought Public frustration upon themselves.  Their insistence on compensation and job security policies that reward seniority and degrees instead of performance and taking on more responsibility are very bad for the system, it's effectiveness and the students.

 I have attached a few of the comments below.  You will have to read all of them at MPP for the other part of the talk.  In summary, Bill P and myself discuss who is in this evil Modern Reformers group that hates Teachers.  I reminded him that apparently Obama is one of the ring leaders since he supports Race to the Top.  And I suppose those evil politicians in Chicago are part of the movement since they wanted to add accountability to the contract.  Thoughts?

"Root Cause: Teachers used to be respected in America. What do you think changed this? Remember one of my favorite sayings.. If a company has union problems, they probably deserve them... (ie poor behavior let union get in)" John (G2A)

 

"It is always awesome to know, that when I post about the neurotic hatred of teachers, or the irrational hatred of unions, I will almost immediately get a great local illustration of the reactionary and factless stance on working people. And make no mistake, it is both irrational and hatred.

Kudos!" Alec

 

"So I assume you believe it is a Conservative conspiracy like Eric. It has nothing to do with Unions demanding that Teachers be rewarded based on seniority and degrees instead of performance.
 

It is hard to look in the mirror. My favorite books on the topic are "Leadership and Self Deception" and "The Anatomy of Peace". Both by the Arbinger institute. "John (G2A)  

G2A EPS Teacher Penalty
G2A Teachers over Students
G2A Class Evaluation
G2A Perf & Comp (1, 2 & 3)
G2A Strikes: Free Speech or Extortion

Hero, Villain or Just Luck?

So for a change of pace, the guys at MPP and myself have been discussing causality and correlation.

MPP Dems Learn to Negotiate
MPP A Natural Experiment
G2A Correlation does not imply Causation

In particular, Bill P and I don't necessarily agree regarding who is responsible for the good times we experienced in the 1990's or why Bill Clinton was disapproved of by some folks. Here is Bill P's version of reality.  What do you think?

"No, their problem with Clinton was not with his infidelity and the "cover up." That was a GOP pretense. They didn't have any grounds to object on the basis of "morality" or "covering up:" Gingrich and dozens of other conservative Republicans had done the same or worse as Clinton. 

Gingrich's GOP found they couldn't stop Clinton through regular political channels. They were confronted with the spectacle of a popular liberal president--presiding over a longer period of US economic growth than under Reagan--and the GOP congress wasn't going to get any credit for the success of that economy, because they'd fought Clinton policy every step of the way... 

...so Gingrich and the conservatives rolled the dice one more time, betting on a big fat juicy scandal easy-for-the-media-to-understand sex scandal that just guaranteed to bring down a popular Dem White House and secure a conservative future.

But the voters were smarter than they thought; the voters saw that the whole thing was hypocritical and politically (not morally or legally) motivated--and instead of Clinton, it was Gingrich booted out on his a**. 

And Clinton stuck around to balance that damn budget, to leave office with a high approval rating, and only the Constitution stopping him from being voted in for a third term.

And then that guy all the conservatives promoted and voted for got in. And with the help of the conservative Republican Congress, he ran the country, the economy, and that balanced budget you want so much: right into the s***ter." Bill P.
 _______________________________________

"I think I remember the Republican Congress giving him a hand. And quite a few fits...  

 Entitlement spending has to be brought in line with payroll tax revenues. I just don't think the Democrats are even dealing with that reality.  

Or it becomes another welfare program. Which should have means testing and work requirements."  John (G2A)

Wiki Govt Shutdown
Wiki Clinton Impeachment
Wiki Welfare Reform

I like Bill Clinton, but I think he had a lot of help and good luck.  The Soviet Union was reeling, Saddam was in his No Fly Zone prison, Al-Qaeda hadn't flown jets into US national treasures and killed thousands, etc. The internet, other technologies, and the Y2K scare was driving lots of work. The GOP helped minimize spending increases.

I won't bother defending Bush other than to say that he had lot more problems to deal with.  The tax cut probably should have never happened, especially if he knew the war was coming.  But of course he didn't because the towers had not been blown up yet...  Bummer.

Wiki No Fly Zones
Wiki Terrorist Attacks
Wiki Bush Tax Cut (1st)

Fiscal Cliff Avoidance Options

This is better than a soap opera... 

1. Will citizens expect to keep retirement ages low even though they are living longer and aren't paying a bigger premium? (ie payroll tax) (G2A Living Longer)
2. Will they expect those who saved and invested to pay for their retirement benefits like some welfare queen?
3. Or will they only ask for what they put in plus some reasonable interest rate minus some insurance premium? (ie disability  and survivor's benefit coverage)

Well at least we have 2 proposals on the table, now we will see what happens...  Will we tip towards even more gov't forced wealth transfer, or will personal property rights be honored?

Thoughts?

Reuters Fiscal Cliff Offers Compared
Republican Offer

RAS: The Wheels on The Bus

Well the Board agreed to increase transportation expense again, go figure...  Hopefully this STEM investment is paying back enough marginal revenues to cover the marginal expenses.  If you are unaware, RSI & SEA require unique bus routes to cover the whole district.  This also continues into Middle School.

The odd thing about it is that only the Spanish Immersion kids are supposed to use the whole district busing to get to Plymouth Middle School.  Meaning that citizens who intra-district transfer and are not in the Immersion program need to drive their kids.  I assume it will be the same for the Robbinsdale Middle School STEM program.

Also, has anyone heard if they were able to improve Demographics of RSI and SEA to better represent the District?  They have been mysteriously quiet on this topic so I assume the poverty level is still likely far below the neighborhood schools.  Please reply if I am wrong. (or correct)

SUN Post District Approves Middle School STEM program
RAS STEM Middle School To Open
RAS STEM Middle Proposal Presn
RAS 20Nov12 Meeting Agenda Packet

Also, here is what they are saying about academic progress.  It looks positive, though I didn't take much time to analyze it.  Thoughts?
RAS Measure of Academic Progress Presn
RAS Press Release

Taxes Important, Spending Not?

Hiram's interpretation of reality triggered this post...

"Another good question is how much does government spending contribute to the Gross Domestic Product. In our current mode with the fiscal cliff all the rage in the media and in Washington, we are told by just about everyone that drastic measures designed to reduce the debt would wreck the economy, with presumably a negative impact on the GDP.

It seems we are all Keynesians now."  Hiram

I replied back...

"That's kind of funny, I have heard almost nothing about avoiding the spending cuts. "Everyone" seems to be focusing on the tax cuts. The President, Congress, etc.

Maybe the Keynsians are losing popularity." G2A

So what do you think, has Obama given up his Keynesian ways?  He sure is focused on trying to make the GOP the bad guys on taxes, and make himself look like the tax cut advocate.  Thoughts?

CNN Obama Push Over Cliff?
FOX News Going Nowhere
CFR Fiscal Cliff Details & History
Wiki Fiscal Cliff
US Budget Alert Summary

Life Expectancy and Social Security

So 4 things aligned perfectly to motivate me to write this post.  Big E at MPP posted that deficits and SS were not related.  My Father noted that the SS age needs to be raised.  Minnesota Liberal commented at MPP that "The discussion over Social Security (an earned annuity) is on the disbursement side, so the so-called payroll tax holiday is irrelevant". (see MPP link/comments for more detail) And I helped my daughter solve a math problem to determine how many percent the avg life expectancy has increased since 1940. 

This was my summary at MPP regarding the annuity comment.

"Now I agree that Social Security should be a self funded pension plan. However we know that it's balance + ongoing contributions are not adequate to pay its forecasted disbursements. Therefore we either need to raise it's contributions (higher payroll tax), make transfers from the general fund (wealth transfer) or cut it's disbursements. (lower payments or raise age)"

This seems pretty simple and straight forward to me.  And then after looking at links 2 - 4 below it becomes pretty self evident that what we payed for and what we are expecting to receive are out of whack and Father's correct.  The eligible age has to be increased greatly or we need to raise the payroll tax significantly.  Thoughts?

MPP Reagan's Advice on Social Security
Intellectual Takeout Life Expectency Change and SS Benefits
Carpe Diem Retirement Age vs Life Expectancy
Life Expectancy History chart

Government the Charity?

Give2Attain is conflicted !!! 

For years I have been striving to increase my charitable giving level.  I sucked at giving when I was in college.  Then I got better at it when I started working, I got up to the 3% level.  Then my income increased and I became a "responsible adult". ( though some may disagree) The giving kept increasing significantly with my dream of sometime getting to that elusive 10%.

However after learning more about how many of my tax dollars are being transferred to the "needy" and "not so needy" via my taxes, I am seriously considering cutting back significantly on my charitable giving.  I am happy giving unto Caesar what is Caesars, but giving to Bill, Tina, Dan, etc, etc, etc???

I mean if we the more successful will be forced to pay higher rates in the name of the "needy" and "not so needy", why should we keep giving to private charities?   Thoughts?

US Govt Spend Pie Chart
G2A Welfare is Not Charity
G2A God Works in Mysterious Ways
G2A Protector of the Small
G2A Romney / Obama Charity
G2A Entitlement or Gratitude
G2A Can Politicians be Efficacious
G2A Needs vs Wants
G2A Tax the Rich, Then What?

Can Unions Help the USA Compete?

As we have been discussing, there are different views regarding the Pros and Cons of Employee Unions in America.

G2A Power to the People?

For the most part, I see them as entities that promote waste and inefficiency, however I am willing to try and determine if they in some ways can help the USA to be more competitve.  Or if they can improve the standard of living for all Americans, not just the employees that are in the Union.

Here are some potential benefits:

• A wage premium is additional money that can be spent in the community.  Poor folk don't buy many consumer goods and services.
• Some Managers/Owners can be excessively short sighted and greedy, contracts may ensure they stop and think before acting.
• Smart companies ensure profits are shared with their employees, however some encouragement may be helpful with those that are not too smart.
• Others?

Veracity Stew Graphic
WP If America Loses Unions

Remember my favorite saying about Unions.  "If you have a Union, you or your predecessor probably did something to deserve it."

Thoughts?

Happy Thanksgiving !!!

Due to a family member becoming ill, we are staying home for the first Thanksgiving ever !!!  (ie not driving to SW MN & SD)  The turkey is in the oven and we are just being big couch potatoes.  I'll miss seeing the extended family and taking part in the normal traditions, however this is kind of nice too.

Wishing you and yours a very Happy and Safe Thanksgiving !!!

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