The Price of Compromise…

Once you take away the veil of deceit, you are faced with what was behind that veil… not always is the picture as pretty as it may have been before you chose that curtail.

The Democrats were played like a fine fiddle.  Compromise cost the American public a total of seventy-nine billion dollars over the past two years in job creation, jobs lost, and the brakes are on to cause a double-dip recession.  I have made predictions previous to this one – my record is intact to date – I am five for five!

Here is how it was done…

Over the next few days, I will bring you more information that proves beyond a shadow of doubt that we have been used!  I told you that there were not WMDs – 1 for 1.  I told you that we were headed to a housing crisis – 2 for 2.  I told you that de-regulation of Wall Street would create a crisis for investors – 3 for 3.  I told you of the revolution that would occur when ninety-seven percent of the wealth is controlled by three percent of the people – 4 for 4.  I told you that your rights would be rescinded, and they are – 5 for 5.

You don’t have to believe me… but you do have to pay attention to the trends and think of the consequences of failing to response in a self-saving manner.  Revolt with your Vote!

The Republicans came into control of the house predicting jobs – instead, they have focused on your rights.  Where is the legislation to create jobs… I am predicting that jobs creation legislation will never be a factor as long as Republicans are in control of anything in Congress – 6 for 6 is in sight!

In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control – Rodney A. Davis

Pat Toomey: How to Freeze the Debt Ceiling Without Risking Default - WSJ.com

The insanity of prophesying that the debt ceiling can be maintained by committing the United States to a path that may or may not work properly is beyond ludicrous - massive layoffs and cutbacks in government workers and programs.  You would think... but that theory may just work!

Senator Pat Toomey will very shortly introduce legislation that will, in effect, cut our decades long dependency of borrowing to cover the overspending that has been a integral part of the American economy for the last five decades - the Korean war veterans returning from the Korean conflict created a need to borrow and it has been the accepted thing to do every since.

Only a few months ago Britain embarked on this same surgical procedure with less than disastrous results!  The predictions by some that the British economy would collapse has not occurred, but the jury is still out, since the majority of the cuts won't occur until this time next year.

The Economist posted this article: So Far, so Good in which statistical data shows every indication that the policy is working, but as I said before, they have not gotten to the core of the new policy - massive layoffs and severe cuts in government spending.  The British plan is to make cuts equaling ten percent of the GDP over a four year period.  That is a significant reduction that would theoretically be the equivalent of cardiac arrest to an economy the size of Britain's, but contrary to 'the doom and gloom' that was predicted, the opposite is occurring.

Growth has been steadily improving for the last three quarters in direct contrast to predictions for Britain.  In summary, maybe the good Senator has it right and adopting  Britain's policy may be the right course for America as well.


In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control – Rodney A. Davis

The Republican Referendum as heard on Meet The Press

The number one priority of the GOP as stated by the Senate Minority leader is to make President Obama a one-term president - no jobs, no the addressing of the recession!



In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control – Rodney A. Davis

Give Big Business a Tax Break – Not

It seems that the only thing that will save the economy is a tax cut… so says the majority of conservatives. Conservatives want to give Big Businesses tax cuts; they want to give tax cuts to small businesses; and they want to give tax cuts to taxpayers.

Here is the real deal… Debt is bad for the economy and tax cuts are good. We know this because a lot of very serious people in ties keep saying it on the teevee machine. Never mind that these two positions are somewhat contradictory -- tax cuts make it difficult to reduce debt -- that's just the way things are. If we give tax cuts to the "job creators," we're told they'll go all crazy with the job creating and everything will be perfect forever.

My mathematics teacher long ago told me that any problem can be solved using basic mathematics and this ‘tax cut’ thing is a prime example. President George W. Bush 43's tax cut is a prime example of what tax cuts can do to an economy. Remember that the Bush tax cut was across the board and designed to eventually be a permanent fixture; meaning that everyone got the same percentage tax cut and would get it forever. A person making two hundred thousand dollars naturally would receive a larger tax cut than a person making fifty thousand dollars.

The Middle-Class of the United States has traditional paid the majority of the taxes received by the IRS (Internal Revenue Service). The average person that received Bush’s tax cuts got six hundred dollars. Consider that the average person during the Bush Administration was making fifty thousand dollars and now you know why tax cuts are of no value to the majority of taxpayers – the Upper-Class and Big Business were greatly rewarded by the Bush Administration. What really happened is that we lost the main group that pays taxes, the Middle-Class, and now the only people receiving tax cuts are the rich and Big Business. That the Middle-Class is almost non-existent is evident.

The Oil Industry under that Bush administration got tax breakers that led to astronomical profits for the giants within the Oil Industry. The records show that the Oil Industry benefited greatly from Republican influence. Big Business was predicted to ‘flame-on’ and the United States’ economy is going to chug along at an easy clip… not.

Tax cuts are never the end-all answer to the problems within the American economy – they never have and never will. The IRS sees any tax cut as a cut in pay. The IRS sees a tax cut as a less money to pay the country’s bills. Keeping that in mind, there is never an instance where a prolonged tax cut will benefit the country as a whole. Tax cuts increase the national debt, put money in the coffers of those who may or may not invest that tax cut and in general are of no lasting value. On the other hand, targeted tax cuts of a short duration do make a difference.

The Bush Administration has stood in favor of tax cuts through thick and thin. In the midst of a booming economy and large projected budget surpluses, President Bush’s top economic policy initiative — both as a candidate in 2000 and upon taking office — was to cut taxes. When the economy slowed, the Bush Administration’s response also was dominated by tax cuts. Now, in the face of yawning deficits and its own pledge to reduce them, the Administration has again put forward large, permanent tax cuts as part of its most recent budget.

In summary, balanced tax cuts that target a particular element of the economy for a short duration appears to be the best route to take when attempting to stimulate the economy without creating a nightmare for the entities that have to pay the bills on the Federal, State, and Municipal levels.

In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control – Rodney A. Davis

My Plan for Economic Recovery, and why it would Work

My Plan for Economic Recovery, and why it would Work

As of 1995, there were fifty-one million, two hundred forty-nine thousand people in the United States over fifty years of age. Of this group, 81.6% are homeowners – forty-one million three hundred thousand homeowners. This group showed a tendency to own a similar percentage of the one hundred thirty-five million three hundred ninety-nine thousand nine hundred forty-five cars on the streets of America, or roughly one hundred nine million six hundred seventy-three thousand cars. We can estimate that it will be a minimum of forty-one million people eligible for the Targeted Stimulus Package.

There are considerable correlations between income, homeownership rate and housing characteristics. As income is closely linked to social status, sociologist Leonard Beeghley has made the hypothesis that "the lower the social class, then the fewer amenities built into housing." According to 2002, US Census Bureau data housing characteristics vary considerably with income. For homeowners with middle-range household incomes, ranging from $40,000 to $60,000, the median home value was $112,000, while the median size was 1,700 square feet (160 m²) and the median year of construction was 1970.

These factual estimates are essential to calculating the cost of an economic recovery package that would stimulate the sectors that are failing. With a few contractual demands, one is able to target the areas of the economy that are suffering because of Wall Street practices by accomplishing the following prior to implementing the Targeted Stimulus Package:

Locate and unbundle all derivatives that encompass mortgages and re-bundle those derivatives minus the mortgages that are toxic.

Re-finance all mortgages whose homeowners are forty-nine years or younger.

Return the remaining (toxic) mortgages to the initial mortgager for resolvement.

The Targeted Stimulus Package, as applied to homeowners over fifty years of age and under sixty-nine years of age, would pay no more than one million dollars to every household with at least one person on the deed/mortgage being over fifty years of age. Each recipient would be obligated do the following:

Immediately quit his/her job and accept any pension or 401k owed to them.

Liquidate their mortgage and/or buy a new median range home (260,000) within one year of accepting the Targeted Stimulus Package.

Purchase a new automobile manufactured in the United States from parts made in the United States.

Reduce their debt balance to less than twenty percent of its total value.

Agree to place the remainder of the Targeted Stimulus Package in an approved Money Market Fund under SEC jurisdiction wherein the recipient would receive a maximum of forty thousand dollars a year.

The ramifications of this Targeted Stimulus Package would do the following:

Free up an estimated forty-one million jobs for those individuals out of work in the first month.

Liquidate an estimated eight hundred billion dollars in mortgage liabilities within the banking industry.

Create an instant demand for fourteen million new automobile purchases of vehicles manufactured in the United States.

Reduce consumer debt by fifty percent or better.

This package would cost the taxpayers forty-one billion three hundred million dollars. It would generate over ten billion dollars in State and local tax revenues in the form of sales taxes immediately, which would then re-enter the economy as job creations for road repair and construction, new house construction, and an increased demand for disposable goods. Individuals out of work would have the opportunity to re-skill to take the thirty to thirty-eight million jobs that would become immediately available to the American workforce. The overall outcome is the generation of Federal, State, and local Municipality tax revenues capable of making the aforementioned entities solvent within one year.

The government would receive compensation over the next fifteen to twenty years with a robust economy fueling every industry in the United States. This Stimulus package would not fall to our grandchildren to repay! Of course, the final parameters of this stimulus package would be up to Congress, but it would cost less than the 1.4 trillion that we have already spent – considering that, we are still not out of the woods economically as of yet.

If you believe that this stimulus package will work, send a copy, in the form of a letter, to your Congressmen!

In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control. – Rodney A. Davis

World Bank Releases Forecast for Global Economy, and it's Not Pretty
By: Andrew Hughes December 11, 2008

The World Bank today released its long awaited forecast for the World economic future. "The financial crisis is likely to result in the most serious recession since the Great Depression," said Justin Lin, its Chief economist. The global economy is captured in a downward spiral as never witnessed before. Whereas before, economies were more localized and had more immunity to outside forces, now Globalization has ensured that one big failure in the machine can create a systemic event that brings down all the component parts. The inevitable failure of a few major banks has demonstrated just how much havoc can be wreaked from Alaska to Beijing.

Emerging markets, dependent on mature market consumption, are teetering on the edge of Bankruptcy as Private capital inflow has been drying up and is forecast to reduce by half next year. The volume of world trade is set to decrease by 2.1%, the biggest drop for 33 years. Oil exporting countries from Venezuela to Russia are seeing revenue crash as demand across the world decreases. Poor countries, on the other hand, have experienced a decrease in the cost of living as food and oil prices drop. In an unforeseen twist of fate, Globalization has enriched poorer countries and impoverished richer ones.

Greece is in the throes of a revolution as their people mount a massive protest against the country's history of corruption and economic mismanagement. Originally born of the alleged murder of a 15 year old boy by Greek police, the momentum was maintained by deeply rooted history. Is this a sign of things to come? As economic conditions deteriorate across every continent, blame will be apportioned and it won't be hard to find easy targets. Shortage of food, homelessness, and unemployment are now realities for an ever increasing number of people who have never known a life like this before.

We are watching our own Governments waste the money we could be using constructively to prepare and mitigate for harder times. Attempts to restore the economic activity of nations through liquidity injections into failing banks will achieve nothing when the basics of this same economy rely on a volume of activity that was sustained by inflated wealth through credit. The only reason we bought so much stuff was because we could always pay the bill off later.

So it's no big surprise that "We're almost in an air pocket, where we don't have a new global driver of growth." as said by Thomas Mayer, the chief European economist for Deutsche Bank. Sorry Thomas, we're all tapped out. Unrealistic growth was the problem in the first place. Growth of an economy through a regulated monetary system, consumer saving, profits ploughed back in to production, balanced budgets is one thing, but unhinged consumption and imaginary accounting by the Financial "Industry" to inflate wealth was always destined to arrive at cardiac arrest.

Financial companies are supposed to provide credit to individuals and real industries to grow the economy. When they discovered that there was money to be made giving loans to anyone who could hold a pen, they officially became usurers. When they opened the casino and took bets on anything that could go one way or another, from the economic health of a country to whether interest rates would go up or down, they opened the gates to their own destruction and consequently that of their victims. Even ordinary citizens got caught up in the act as stocks were bought and sold like candy. We have a Stock market that may as well take its cue from the atmospheric conditions on Pluto. It certainly has nothing to do with economic realities on the ground.

Lack of regulation and the quest for short term profit at the expense of long term sustainability has brought the world to its knees. A new paradigm is desperately needed to restore sanity to a world gone mad. As we travel the downside we cannot expect the same failed mechanisms to save us. The actions of Governments the world over so far is to try and blow air into a burst balloon; no matter how hard they blow it will never be able hold its form. It's time to admit that we have overextended the system to the inevitable breaking point and now the remaining pieces must be reassembled into something that does not need wizardry to keep it upright. Pundits the world over are espousing many different analyses and solutions, but in most cases, economic fundamentals play a minor part in the dialogue.

Fortunately there are people like the FDIC chairman, Sheila Bair, who seem to have a grasp on what is actually needed:

We will dig out of this. And when we do, I hope for a back-to-basics society - where banks and other lending institutions promote real growth and long-term value for the economy, and where American families have rediscovered the peace of mind of financial security achieved through saving and investing wisely. We need to return to the culture of thrift that my mother and her generation learned the hard way through years of hardship and deprivation. Those are lessons learned that the current crisis is teaching us again.

The G20 Meets To Solve Global Financial Problems

Over this autumn weekend in Washington DC the leaders of a group of nations are meeting to plot the recovery of the global economy. I am impressed that they are taking ‘a’ weekend to solve a problem that appears to be bigger than all of us and continues to grow at an alarming rate. I want to remind you that the Earth turns ever so slowly in the grand scheme for things – 24 little hours to be exact, and I don’t see how so much can be accomplished over the weekend. What, does everybody have to be back behind their presidential desk on Monday?

Why is it with things that have been discovered to be terribly wrong do we feel that this gives us the expectation that it can be righted in a period of time that is shorter than the time that it took for the problem to get screwed up enough that we recognize it as a problem? It is as if no one was paying any attention to the situation until it became impossible to do business as usual, after which; everyone became cognizant of a problem and now we have to rush and fix it. The problem that prevails now is how are we going to fix a problem that we never knew was a problem.

Am I confusing you? Good, because that is the problem. Everyone is confused as to how to fix it! As a boy, my Grandmother would send me into the garden that my grandparents had on the back forty with instructions to pick all of the ripe fruits and vegetables that we were going to use for the rest of the week. Being a city boy, I picked everything that resembled a ripe fruit or vegetable and returned to the house in five seconds flat. Of course, some of them were terribly green and my Grandmother took me to task regarding the picking of fruits and vegetables. She said that you must only pick what you need keeping in mind that there is a tomorrow.

The economies of all of the nations, both rich and poor are enlaced. Somebody drops a vase in Djibouti and an attendant is sent to clean it up in Kansas City, or Cartagena. What one country does regarding its trade policy effects all of the others trading around the globe eventually. Protectionism, a practice that helps one, is done at the expense of all others who would trade goods with that country. Transactions between countries afford one an advantage over the other if a trade imbalance can be sustained based upon the value of each country's currency. Countries that do not allow their currency to float on the market can be suspected of manipulating the market if they continue to support large trade deficits with trading partners China is a good example of this practice.

Since the dollar is the standard by which all other countries set the value of their currencies, it stands to reason that the best way to hedge the market to your advantage is devalue your currency in relationship to the standard. Another method of taking advantage of the market is to extract a profit at the expense of those with whom a country trades – OPEC has done just that. The down-side of these tactics is what the global market is experiencing today. The monopolization of the market by individuals interested in dominating the supply and demand equation is apparent. Greed is the other name that would fit well in explaining the current global situation.

As each entity squeezes the market to gain market share at the expense of all others, the flow of cash slows and credit expands. The exchange rate for the payment of debts due cannot keep pace with the amount of money owed. The trade deficit rises to the point that the country suffering from the trade imbalance can no longer make substantial payments against the deficit. The balloon eventually will burst; creating a financial situation that we are currently experiencing.

Many methods and remedies will be applied to this global economic situation with little success. The devaluation of the dollar is inevitable. The continued loss of jobs world-wide will indicate the lost of battlefront after battlefront. Without exception, the onset of recession will touch each country in turn as the Earth slowly turns. Just like day turns to night, so will the progression advance.

Prepare yourself as best you can…