Josh McDaniels needs to Address Congress

For those in Denver who remember the football game on NFL Network a few years back McDaniels was caught live screaming at his offensive lineman.  His exact quote was "Just Do Your Fu..ing Job!!"

Since neither the President or Congress seem to be much interested in solving much of anything with regards to the so called Fiscal Cliff maybe McDaniels should go to Congress and scream out loud "JUST DO YOUR FU..ING JOB!!!".

401K Tax Deductions being Targeted

Yep let's screw those who save for retirement by getting rid of the deductions now and taxing it all right up front.  If Congress starts messing around with retirement savings say goodbye to 401K's and ROTH's as well.  See story below.

http://business.time.com/2012/11/28/fiscal-cliff-why-congress-might-have-to-mess-with-the-401k/

How much Government can we Afford?

I agree with Denninger in his latest post at http://market-ticker.org/akcs-www?post=214407 with his comments posted below in quotations.

"The truth is quite simple -- we all agree, other than hard-core anarchists, that some amount of government is appropriate.  Since that's the case we are now arguing for (1) how much government we want, (2) what we want it to do, and (3) what we're all willing to pay for it."

This folks is what Congress has to figure out because deficit spending can't go on forever despite what they may think.  Greece has already found this out the hard way and more European countries (France, Italy, Spain and etc) are going to experience it as well.    

Four Words for Congress

STFU and quit pandering to the media.  Lock yourselves in a room and stay there until you get a deal done which includes both taxes increases and substantial spending cuts as well. 

Is Powerball Fair?

Okay let's look at the winners by state since 1998.  Notice in the chart below some states have had a lot more winners than others since 1998.  Those states with a disproportionate amount of winners (10 or more) include Indiana, Louisiana, Minnesota, Missouri and Pennsylvania.   Meanwhile several states have had 1 or no winners since 1998 which include Arkansas, Colorado, Illinois, Massachusetts, Maine, North Dakota, Tennessee, Texas, Virginia, Vermont and Washington.  (California, Nevada, Utah, Wyoming, Alabama and Mississippi do not have Powerball at this time)  Thus the question is why do Indiana and Pennsylvania have considerably more winners than other states?

Is the Middle Class Doomed?

If we look at a chart of Real Medium Income Adjusted for Inflation going back to 1967, as reported by the Census Bureau in 2011, you can clearly see Real Income has been declining since the peak in the late 1990's.  In fact most Americans have seen at least a 10% Drop in Real Income based on Inflation.  If this trend continues the Middle Class is doomed and there will be an extremely large divergence between the Poor and the Rich which will spell big trouble in the future. 

December 22nd

December 22nd is really the last day the so called "Fiscal Cliff" can be avoided.  Keep in mind starting on December 23rd any income earned by Federal Employees will be taxed based on 2013 rates.  Thus if nothing is agreed to by 12/22 then the Bush Tax Cuts go away and the Social Security Tax will go back to 6.2%.  So all Federal Employees will their take home pay drop substantially with the first paycheck in 2013. 

Total Amount of Student Loans

Right now Student Loan Debt has surged to over 950 Billion Dollars.  Keep in mind back in 2003 it was around 250 Billion so in 9 years Student Debt has increased by 280%.  Remember folks Student Loans aren't dismissed in Bankruptcy and really you can't get out of them unless you have a significant disability.  Since a majority of Student Loans involve Government Money you can see where this is heading.  I expect a significant amount of this Student Debt will never be paid off and the Government will be on the hook for over 1 Trillion Dollars before this is all said and done.

Delinquent Student Loans

The next bailout crisis is rearing it's ugly head which are Student Loans.  This past quarter those students who are 90 Days or more Delinquent on paying there loans jumped over 2%.  Overall nearly 11% of Student Loans are now 90 Days or more Delinquent and look for that number to skyrocket during the next few years.  Meanwhile the total dollar value of current Student Loan Debt is a staggering 956 billion dollars.  By the end of 2013 it will easily surpass 1 Trillion Dollars.

   

How to Balance the Budget in "3" Easy Steps

According to the Brookings Tax Policy center in 2011 the Top 20% Wage Group paid 76% of all Individual Income Tax.  In 2011 the Government collected 1.1 Trillion in Individual Income Tax so 836 Billion of that number came from the Top 20% Wage Group.

Let's say we raise taxes on the Top 20% Wage Group by 5% in 2013.  Based on 2011 numbers that would increase Government Revenue by roughly 55 Billion.

As I mentioned in a previous post the CBO Projects Government Spending in 2013 at 3.5 Trillion with a forecast Deficit of 640 Billion.  Now if we reduce Government Spending by 10% that leaves a savings of 350 Billion.  Meanwhile if we add in the extra 55 Billion from Taxing the Top 20% Wage Group we have now decreased the Deficit by 405 Billion so we still have another 235 Billion to go.  Based on Consumer Spending in 2011 which was 11 Trillion for Goods and Services, if we implement a 2.1% National Sales Tax, that would generate an additional 231 Billion in Government Revenue which would basically bring the forecast Deficit to Zero and lead to a Balanced Budget.

So there you have a balanced approach in "3" Easy Steps which allows every single American to have a part in reducing the Deficit for 2013.

1.  Decrease Government Spending by 10%
2.  Increase Taxes on the Top 20% Wage Group by 5%.
3.  Implement a National Sales Tax of 2.1%

Once again I have presented another rather easy approach Congress could implement to Balance the Budget in 2013.   

Get ready America to get Screwed by Congress

Most Americans pay little attention to Congress but these people literally control your life in one way or another.  Pay close attention to those who want to rewrite the tax code because all they are doing is trying to get more hard earned dollars from Americans without raising taxes.  What most Americans don't realize is that by reducing many deductions that will increase the amount of money you pay to the government substantially without having to raise taxes.       

Nearing Debt Ceiling

Based on November 20th data US Debt is closing in on 16.3 Trillion which is just $100 billion below the Debt Ceiling of 16.394 Trillion.  Keep in mind the Federal Reserve will probably add at least 50 Billion by the end of the month so in reality we are probably less than 50 Billion away from reaching the ceiling.

Turbo Timmy Part 2

I'm sorry but this guy has lost his mind.  Geithner says there should be no Debt Ceiling.  So let me ask you something Turbo Timmy?  I can't run up my debts to infinity but the US Government should be allowed to do it.

Fiscal Cliff...Look for the Fiscal Fluff Compromise

There will be a deal right before the deadline as Congress is great at last minute deals.  Look for a bunch of fluff with a little give and take but nothing substantial.  If Fitch and Moody's have any balls then they will downgrade the US shortly thereafter in the early part of 2013..

Excellent Show on History Channel

For those who haven't seen "The Men Who Built America" on the history channel it's an excellent show.  It follows the lives of  John Rockefeller, Cornelius Vanderbilt, Andrew Carnegie, Henry Ford and J.P. Morgan.  Granted these men helped build America into a world leader, however, the ways they did it were not admirable in most cases and led to many of the work laws we have today. Based on the way the show was done the only person that seemed to care about the common people was Ford.  However as they got older eventually Carnegie and Rockefeller gave away considerable sums of their wealth to charity so in my view that helped balance out some of their actions when they were younger.   What is amazing is that Rockefeller's wealth at one point was over 600 Billion Dollars based on today's dollar.   

Bailouts Galore

Well here we go the Federal Housing Authority needs another bailout and the United State Postal Service is Bankrupt as well.  This is just the start folks as there will be more coming.

A Warning to Unions

For those that like Ding Dongs , Ho Ho's and etc, Hostess Brands has filed for bankruptcy after their Union wouldn't take a pay cut.  As a result 18,000 workers are now out of work.  Unions this is a clear sign what is coming. 

Let's Tax the Rich

According to the Brookings Tax Policy center in 2011 the Top 20% Wage Group paid 76% of all Individual Income Tax.  In 2011 the Government collected 1.1 Trillion in Individual Income Tax so 836 Billion of that number came from the Top 20% Wage Group.

Let's say we raise taxes on the Top 20% Wage Group by 5% in 2013.  Based on 2011 numbers that would increase Government Revenue by roughly 55 Billion.

As I mentioned in a previous post the CBO Projects Government Spending in 2013 at 3.5 Trillion with a forecast Deficit of 640 Billion.  Now if we reduce Government Spending by 10% that leaves a savings of 350 Billion.  Meanwhile if we add in the extra 55 Billion from Taxing the Top 20% Wage Group we have now decreased the Deficit by 405 Billion so we still have another 235 Billion to go.  Based on Consumer Spending in 2011 which was 11 Trillion for Goods and Services, if we implement just a 2.1% National Sales Tax, that would generate an additional 231 Billion in Government Revenue which would basically bring the forecast Deficit to Zero and lead to a Balanced Budget.

So there you have a balanced approach in "3" Easy Steps which allows every single American to have a part in reducing the Deficit for 2013.

1.  Decrease Government Spending by 10%
2.  Increase Taxes on the Top 20% Wage Group by 5%.
3.  Implement a National Sales Tax of 2.1%

Once again I have presented another rather easy approach Congress could implement to Balance the Budget in 2013. 

How to Balance the Budget in "2" Easy Steps

The CBO is projecting a deficit of 640 billion dollars for 2013.  The Government is supposed to spend 3.5 Trillion in 2013.  If the Government spends 10% less that saves 350 Billion.  Meanwhile US Consumers spent 11 Trillion Dollars on Goods and Services in 2011.  If a National Sales Tax of 3% was enacted and Consumer Spending was the same in 2013 that would generate 330 Billion in Revenue for the Government.

Thus add 350 Billion (10% Reduction in Federal Spending) + 330 Billion (National Sales Tax) equals 680 Billion so that gives you a balanced budget for 2013 with a 40 Billion Dollar Surplus.  Yep it's that simple.  Reduce Government Spending in 2013 by 10% and implement a National Sales Tax of 3% would Balance the Budget for 2013 if the CBO Numbers are correct.  Thus all Federal and Social Security Taxes could remain as they were in 2012.

For all of the Congressman who read this blog it's really that simple.  You are making things much harder than they really have to be.

Does Obama have a Mandate?

I will preface this by saying I didn't vote for either Obama or Romney and voted for a third party.  Obama won 50% to 48% which means 48% voted for Romney while the other 2% voted for a third party like me.  That means 50% of the country didn't vote for Obama so he has no mandate. 

Everything was Coordinated before the Election

Isn't it amazing how everything has erupted after the election.

1.  Fitch Warns the day after the election it will downgrade the US if it's deficit spending isn't dealt with.
2.  The Petraeus Scandal occurs a few days later.
3.  Israel begins the first step towards another War in the Middle East on Wednesday.

Keep in mind all of these could have easily occurred before the election.

Obama: 1.6 Trillion Tax Increase over 10 Years

Let's see he wants to raise Taxes by 1.5 Trillion over 10 Years but no mention of decreasing Government Spending by the same amount.  You can't have it both ways.

Turbo Timmy Strikes Again

Geithner says Middle Class should pay higher taxes.  Remember he is the same guy who got caught cheating on his taxes but was still appointed Treasury Secretary.  That pretty much sums up how screwed up the government is.   

See article at http://www.reuters.com/article/2012/11/13/us-usa-fiscal-geithner-idUSBRE8AC17120121113

Military Retirement Trust Fund

The Military Retirement System is protected by law while Social Security and FERS is not.  Currently the Military Trust Fund has an unfunded liability of 650 Billion Dollars and by 2026 its projected to be over 1 Trillion Dollars.  However since this Trust Fund is protected by law the government has to make up the difference.  So by 2026 the government will have to come up with at least 1 Trillion Dollars just to get it back to even.  However thus assumes a projected return of 5.75% each year which isn't going to happen unless Interest Rates rise substantially in the coming years.  Thus by the time 2026 arrives this could
easily end up costing the government nearly 2 Trillion Dollars to bailout the Military Trust Fund. 

Finally for those of us under FERS it's not protected by law so keep that in mind for the future.  FERS can be changed at any time and there is nothing we can do about it since it's not protected by law.

Federal Government Starts 2013 with a Bang in Spending

The 2013 Spending Spree has started in the Federal Government as they spent 120 Billion more than they collected in October.  This is the 4th largest October deficit going back to 1990 and was up over 20 Billion from October of 2011.  Remember the budget year for the Feds starts in October and runs through September.

Final Election Map by County

The majority of the country by county vote supported Romney however the largest cities favored Obama which won the election for him in the end.   As we can clearly see the country is extremely divided.   In 2008 Obama carried many more counties than he did in 2012.  Here is some advice for the next group of Presidential Candidates...focus on the biggest cities and you will win the next election no matter what the rest of the country thinks of you.

  

Ball is in your Court Rating Agencies

Based on the latest CBO Report which says no spending cuts are needed the next few years it's now up to Fitch, Moody's and S&P to downgrade the US.

CBO gives Obama greenlight to Kick the Can for Another 2 Years

The CBO just gave Obama the all clear to kick the can for another two years with no spending cuts and no tax increases as within two years the economy will be just humming right along.  Once again we have a government that is totally clueless. Read the latest CBO post at http://www.cbo.gov/publication/43694

Ron Paul is right we have already gone over the fiscal cliff.

Ron Paul is 100% Correct

Mr Paul is right on the money why Obama got reelected and that the US has already fallen off the Fiscal Cliff.  You can read more of his comments at the link below.

http://www.washingtontimes.com/blog/inside-politics/2012/nov/8/ron-paul-election-shows-us-far-gone/

Extend and Pretend Will be the Solution

The media is all over a Fiscal Cliff scenario.  Looks folks your Congress is great at last minute deals so I expect one right at crunch time which will be an Extend and Pretend scenario.  Watch for a slight increase in taxes for the wealthy making above 250,000, no extension of the Social Security Tax Cut, an extension of the Bush Tax Cuts for those making under 250,000 and a barely noticeable drop in Government Spending (my guess less than 5%).

Debt Ceiling shouldn't be Raised

If the President and Congress are serious about a balanced budget then the Debt Ceiling which could be reached by the end of the month shouldn't be raised.  Think about it everyone do the banks let you keep on borrowing money (credit cards, loans and etc) until you are a million dollars in debt?  No they will cut you off well before you ever get to that number.  So here we have the Federal Government who over the past four years have run up Trillion Dollar deficits each year but there is nobody that can cut off the Government from spending more than it takes in.  The problem is nobody in Congress or the President has the backbone to say enough is enough and do what is right.   When the time comes, which will be much sooner than most think, the US will undergo a similar process that is now occurring in Greece and Spain in which other countries will dictate how the US will be bailed out.   

Downgrades Coming

Fitch finally gets some balls and warns US to get it's deficits under control or it will downgrade the US.  Funny how this comes out the day after the election isn't it.  It's not a coincidence folks.

Please Vote

Even if you don't like either candidate at least vote for someone.  My belief is if you don't vote then you shouldn't bitch about who is president.

Why the US Stock Market is a ticking Time Bomb!!!

For those that follow the stock market a trader that worked for Rochdale Securities bought 750 million to 1 Billion Dollars in shares of Apple last month.  Keep in mind Rochdale only had 3.44 Million of capital at the end of 2011.  So one trader bought 750 million to 1 billion dollars of  Apple on margin leveraged over 200:1
    
Meanwhile Apple has dropped considerably the past month so now Rochdale is in big trouble because they have a large loss on the books and are asking for a bailout.  One has to wonder how many other trading firms out there are leveraged big time to the upside in the market.  This market is a ticking time bomb and when it explodes look out below.       

Romney and Obama Tied going into the Election

Latest Rasmussen Poll on Sunday shows both Romney and Obama with 49% each heading into the election on Tuesday.  Should be an interesting day based on the Electoral College which could go either way at this point.  It's certainly possible we could see a repeat of the 2000 election.

Rapidly nearing Debt Ceiling

Here it is based on numbers for the end of October.  Right now we are only 133 billion away from reaching the Debt Ceiling of 16.394 Trillion.  This could easily be reached by the end of the month.

5 Days to Election Day

Right now Rasmussen has an extremely tight race as 8 states could go either way.

Slightly Romney:  Colorado, Florida, Iowa, New Hampshire, Ohio and Virginia
Slightly Obama:  Nevada
Tie:  Wisconsin

Naturally if Romney were to take all of the slight leans he would take the Electoral College.