This ain't Hell, but you can see it from here

Category: Economy

  • A Few ‘Fiscal Follies’ Updates

    Food Stamps and the Current Economic Recovery

    Yeah, the current administration has the economy just humming along.  Just look at the money spent on food stamps during the last 4 years.  It’s increased each year the current administration has been in power – from a bit over $56 billion in 2009 to over $80 billion in 2012.  And other various Federal food assistance programs have raised the total Federal tab for “nutrition assistance” to nearly $106 billion in 2012.

    Two things about this bother the hell out of me.  First, an improving economy should show a declining need for food assistance – not a continuing rise.  And as our liberal brethren keep telling us:  the current POTUS has made the economy “way better” – right?

    Second: as I’ve previously written, the Obama administration quietly gutted Clinton-era legal limitations on the receipt of food stamps by able-bodied singles back in 2009.  Those restrictions have never been restored.  I have a REAL problem with paying for people’s groceries so they can to sit on their ass when there’s no reason whatsoever they can’t work and use what they earn to pay for their own.

    Isn’t It Nice to See Their Eyes Finally Opening?

    You probably noticed a jump in your taxes already this year.  Specifically, your Social Security deduction went up by close to 50% (from 4.2% of taxable income to 6.2% of taxable income, an increase of 2% of your taxable income; [ 2 / 4.2 ] = 0.476, which is an increase in social security taxes of 47.6%).

    Predictably, many liberals are outraged; some of the comments from DU quoted here are priceless.  I guess they missed the “temporary reduction” part.

    You can thank the current POTUS and his administration for that particular increase.  After all, it was the Obama administration that engineered that temporary Social Security tax reduction during 2011 and 2012 in order to help the economy when it was clear that the 2009 stimulus boondoggle was a failure.  But apparently the economy has now recovered, and that reduction is no longer necessary. (Yes, I’m being sarcastic.)

    Hey, DUmmies: for once, the POTUS delivered on a promise.  You’re getting exactly what you voted for.

    Support Your Local Strip Club – with Taxpayer Dollars!

    Well, that’s the case if you live in NY – and probably anywhere else that pays cash welfare benefits.  But it seems that’s particularly easy these days in NY.  Apparently NY gives both SNAP (formerly food stamps) and cash benefits via EBT card.  And there aren’t any restrictions on where folks can get that cash.  Rather, it’s ATM owners that make the call whether or not they’ll dispense cash from EBT cards that show a cash benefit available.

    As a result, there are plenty of EBT-card cash transactions at ATMs in NY these days. Many of those transactions are at ATMs near liquor stores, strip clubs, hookah bars, and porn shops.  Your tax dollars at play.

    Now, Where ARE Those Pesky Welfare Recipients?

    But at least NY can tell where some of their welfare payments are being spent.  Apparently MA can’t find a rather large number of their welfare recipients.  That could make one wonder just which are real – and which are Memorex.

    But of course, the MA Governor says “don’t worry about it”.  Or was that “pay no attention to the man behind the screen”? (smile)

  • More “Wonderful” Economic News

    Well, new US financial figures are out.  And they show that Uncle Sam is in a world of hurt, financially speaking.

    And if you thought things were improving:  think again.  It’s looking worse compared to the same period last year.

    Since the beginning of the new fiscal year on 1 October, the Federal government has taken in $346 billion in revenue.  That’s actually up roughly $30 billion from last year, or nearly 10%.  So revenue is rising.

    However, during that same period the Federal government has spent roughly $638 billion – an increase of $87 billion, or about 14% more than the same period last year.

    Short version:  income – $346 billion (+10%); spending – $638 billion (+14%).

    Somehow, I just don’t think we’ve had the kind of population growth in a year to warrant that kind of spending increase.  Or that much inflation, either.

    I’ll save you the trouble of doing the math.  Since 1 October 2012, the Federal government has borrowed 46 cents of each dollar it has spent.

    Why?  That’s primarily due to higher spending on “mandatory” spending – like Social Security, Medicare, and debt interest payments. In other words: the problem is largely due to entitlement programs for the general population and debt interest. Seems these programs are growing faster than expected.  Go figure.

    News flash, DC:  at some point, “mandatory” becomes impossible if you can’t come up with the cash.  And it looks like we’re approaching that point PDQ.

    But there’s no need to worry.  According to the CBO, the picture is “distorted” by “unbalanced payments”.  The situation’s really better this year than last says the CBO.

    Well, here’s my response to the CBO:

    When same period last year shows 10% less income but 14% less spending, that doesn’t mean things are getting better – no matter how you try to spin it.  It means things are moving in the absolutely wrong direction and are getting worse.

    It also looks like we almost certainly had another $1,000 billion ($1 trillion) Federal deficit for Fiscal 2012, which ended on 30 September.  At the current pace, it looks like that’s almost certainly a lock for Fiscal 2013 as well.  And unemployment is back above 8% again – if it ever really went below 8% in the first place.

    At least the current Administration is being consistent.  I’m just not sure that’s exactly the kind of consistency the US wants.

    Or needs.

  • Obamaville

    The Washington Post writes about a new trend happening in the alleyways of DC. Tiny 200 square foot homes are springing up in Northeast DC.

    “This is the dream,” says Rin Westcott, 28, who lives in Columbia and came out on a wintry Saturday afternoon bundled in a flower hat to help her friend Lee Pera with a tiny-house raising.

    Pera, 35, wore safety goggles as she treated the cedar boards of her “little house in the alleyway,” one of three under construction in what is thought to be one of the country’s first tiny-house model communities.

    If these affordable homes — which maximize every inch of interior space and look a little like well-constructed playhouses — are the dream, they represent a radically fresh version of what it takes to make Americans happy.

    Yeah, you can imagine what the Post would be saying about these people building tiny houses if there was a Republican President. But, not a peep about the White House being unable to resurrect the economy, just this;

    Although the diminutive homes are made of high-quality materials, they are priced for a flagging economy. They sell for $20,000 to $50,000, less than the down payment on a two-bedroom condo in a trendy D.C. neighborhood.

    A “flagging economy” is all they squeeze out of their Thesaurus. By the way, that $50k price tag is more than half of what I paid for this three bedroom house on 5 acres, so enjoy yourselves down there with your doll-house sized home in the city that I recently abandoned.

  • It’s the uncertainty, stupid

    I’m not an economic genius, I’m just a middle class guy who has a knack for saving and investing for myself with a few hundred thousand bucks in my 401k, a house that I bought for cash and remodeled for about half-again as much as the purchase price with two reasonably new cars in the driveway. The extent of my economics education was one semester of Econ 101 and 57 years of living mostly in this country.

    The President called together some economics experts from academia and asked them how he could fix the economy. According to the Washington Post, they told him to forgive mortgage debt. Geitner, the tax cheat, responded; “How do we get this done through Congress?”

    Yeah, that’s the problem – getting it through Congress. Not like it adds to the uncertainty that’s already already driving this economy into the ground. Who would take any US debt instrument seriously ever again if the government forgave mortgages?

    The solution to the economic problem in this country, aside from drilling our oil and gas natural resources, is to add certainty to the economy. Employers are not hiring because there is too much guess work going forward in regards to impending tax hikes, this administration’s plan to penalize energy consumption, and their generally anti-business attitude.

    The easiest and cheapest way to fix the economy is to make the current marginal tax rates permanent – permanently, trash plans to pass the “Cap and Trade Bill”, extend the Obamacare effective date, if you won’t end it and quit trashing clean coal. Stop talking about mortgage relief. All of that might give employers a little confidence in the future of the economy so they’ll start hiring again.

    Then after you do all of that, put the Energy Department to work slicing it’s way through the red tape to get refineries and pipelines built, start drilling for our own energy resources and cut our umbilical cord to the Middle East’s oil. Let the Arabs wither on their vine and put Americans to work building the new infrastructure we’ll need to get our own energy to market with the money we’re not sending to OPEC.

    I’m no economist, but all of that is glaringly apparent to one little guy sitting on a mountain top in West Virginia, so why don’t those morons in Washington see it from their catbird seats?

  • Even More Obamacare Fallout

    Another predictable outcome of government-run healthcare is that of shortages.

    The reason is simple.  Excessive regulation, pressure to keep prices artificially low, and reimbursement limitations all drive manufacturers and providers towards other businesses.

    That’s simply due to human nature.  If a given craft or business doesn’t provide a decent profit for the level-of-effort required, sooner or later people involved will simply become fed-up and will do something else.

    What’s that you say?  It won’t happen here with US healthcare?

    Think again.  It’s already happening.

    Remember that prescription drug shortage that began a couple of year ago?  Well, now it’s looking to be a persistent if not permanent part of US healthcare.

    Yes, the issue has many causes.  But among those causes is manufacturers leaving the market.

    Temporary shortages are a reaction to a temporary market imbalance.  They’re generally controlled by temporary price rises, followed by increased production.

    But chronic shortages show a structural problem.  And I’m willing to bet that here it’s largely a self-inflicted issue due to excessive regulation and/or government control.

    Get used to such things.  Under AHCA, I’m guessing you’ll be seeing shortages like this in all healthcare fields in a few years, not just prescription drugs.

    ‘Cause when there’s only so much money to go around and an unlimited demand for free stuff, well . . . .

  • Bye, Hostess

    I remember I was in Kindergarten when my mom sent me to the store up the block to buy a loaf of bread. The first time I was ever on my own with money in my pocket. I was all grown up when I picked out a loaf of Hostess bread with the little balloons on it and proudly held out my little handful of change and let the checkout lady count out whatever it cost. Then there was the time I thought I could win the Twinkie eating contest at our school’s Winter Fest and I ate so many Twinkies that I quit eating them for years.

    But now they’re gone.

    [Hostess] had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn’t return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

    Thanks, unions. That’s what happens when you try to get blood from a stone.

    Tman sent us the bad news.

  • Speaking of Depressing Economic News . . .

    . . . it appears that now approximately 22% of the US population is enrolled in Medicaid.  Not Medicare – Medicaid.  That’s the joint Federal-state program for the indigent.

    Yes, you read that right.  More than 1 out of 5 people living in the US are getting their healthcare paid for courtesy of the US taxpayer because they’re considered “indigent”.

    That comes to roughly 70.4 million individuals.  Oh,  and did I mention that the definition of “indigent” for Medicaid purposes gets significantly easier to meet in 2014 – when the earning threshold for qualification goes from poverty level to 133% of poverty level?

    Sadly, that’s not the whole story.  Add Medicare recipients who are not indigent, and I’d guess the total today is over 100 million people who are getting their healthcare paid for courtesy of Uncle Sam as an unearned entitlement.  (In 2010 approximately 27.5 million of the 47+ million Medicare enrollees were above poverty level and thus did not qualify for Medicaid.)

    Why is this bad? Just remember economics in 9 words – TANSTAAFL.  And I don’t think I have to tell you who’s picking up the bill for all of this.

    If you’ve got any doubts, remember the above when the next round of Federal and state tax hikes hits.  Because mark my words – another round of tax hikes is coming.

    And when those tax hikes hit, there’s a good chance it won’t only be psychologically depressing.

  • And In the “ObamaCare” Fallout Department . . .

    . . . well, it looks like it’s already started.  Here they are – job cuts announced or planned to date by businesses specifically due to AHCA mandates.  Numbers are full-time positions to be cut:

    • Welch Allyn – 275 (approx 10% of their workforce)
    • Dana Holding Corp – estimated to be approx $24 million over 6 years, or $4M per year (no firm number given besides the 6 or so in management who’ve gotten the ax so far)
    • Stryker  – 5% of global workforce (aprox 1,170)
    • Boston Scientific – between 1,200 and 1,400 US jobs (investment focus and hiring will shift to China)
    • Medtronic – 1,000
    • Smith & Nephew – 770
    • Abbott Labs – 700
    • Covidien – 595
    • Kinetic Concepts – 427
    • St. Jude Medical – 300
    • Hill Rom – 200

    That’s over 6,700 full-time jobs getting the axe so far – plus however many jobs $24 million in payroll equates to at Dana Holding.  Assuming an average salary of $90k and allowing +1/3 for benefits, that comes to another 200.

    Above and beyond those reductions, many other companies are actively looking for ways to reduce current or future workers’ hours.  Seems as if the AHCA penalty calculation formula doesn’t count part-time workers – so replacing a full-time worker with two part-timers is now really a net plus for the company.  Companies that are looking at doing exactly this (e.g., reducing many workers to 28 hours weekly or less) include the following:

    • Darden Restaurants (Red Lobster/Olive Garden/Longhorn)
    • JANCOA Janitorial Services
    • Kroger

    The reductions identified above are, of course, only the beginning.  So if you’re hoping to find a full-time job some time in the foreseeable future – well, your search likely just got a whole lot harder.

    Each of these reductions will also have a ripple effect due to forced reductions in spending by those who lose jobs or who saw their hours reduced.  The overall net effect will be to reduce business activity overall – leading to more cutbacks and layoffs in other industries affected by that reduced spending.

    And this doesn’t include pending cuts due to sequestration, targeted Federal budget cuts, and the like.

    Yeah, looks  it looks like we’re in for really good times.  Laissez les bon temps rouler!

    (For the perception-challenged, yes – the last two sentences were indeed sarcasm.)