Economic Series Part 2: Government Budget: Taxation and Spending

The most dreaded time of year is when everyone must file their taxes. Taxes are certain like death. Taxes are a necessary evil. To many people it seems that our taxes do very little for our own interests. Taxes are supposed to help the people who pay them but rather they seem to help special interests or people who don’t pay them. The responsible party of handing our taxes is the government. The IRS is the collector, Congress is the spender. I believe that this Economic Series Part 2 is probably one of the more important topics. This part will be a sort of contextual background for the last part of this series on GDP. (Gross Domestic Product) I think its very important to understand how the government balances or fails to balance the budget. The topic I choose is quite broad. However, I want to focus on why taxes are collected and how they are spent. I also want to point out how the national debt is growing and what we might do to stop it.

My own view on government taxation and spending is very much libertarian. I believe the government should spend as little as possible. This way our taxes are not the burden they have become. Government spending tends to go to ineffective programs and usually becomes wasteful. I think the best way to understand the federal government budget is by understanding some of the history behind. The creation of our federal budget and tax system was mostly implemented by one man. Alexander Hamilton is the responsible person for most our budget system.  If you remember from history class there was a lot of rebellion and distrust among the citizens of our new country. Many of Hamilton’s critics thought he wanted to become a pawn of the British or king of America through a tight relationship with England. Luckily for us, Hamilton’s set up turned out to be brilliant, and was kept in place until now.

One of the first ways that Hamilton helped set up the federal budget was by creating an import and customs service. It was necessary because when Hamilton became the secretary of treasury, the US had a war debt due to the revolution. In order to pay this war debt off, Hamilton created what is now the Coast Guard. He also set up customs and import agents along the ports. These agents were to collect the duties on the imports to America. The duties or tariffs were basically a tax on imported goods. This was the main source of income for the federal government after the Revolution. Another piece of the system that Hamilton created was the banking system. Hamilton realized that the US need a national bank. In part because of the debt and in part because of the wide range of currencies that existed among the former colonies. The Bank of America (similar to the one we have now) was created. Congress wrote a charter for it and it opened up by selling shares. These shares is how the bank made its money. The controversy came when it lead a lot money speculating among men who wanted to risk an investment in the bank.

The Bank of America also set up a line of credit for the federal government. This is was necessary because in order to pay back the war debt the US would need to take out a loan. Hence this created what we call credit. Hamilton’s system was much criticized by Republicans like Thomas Jefferson and Aaron Burr. One of Hamilton’s primary supporters was actually George Washington. With increasing responsibility due to the growing population and turmoil in France, the US needed to increase its revenue. Hamilton proposed and got a whiskey tax passed. This whiskey tax would put a small tax on whiskey and liquor. This lead to the Whiskey Rebellion in western Pennsylvania. Hamilton himself lead a rather big militia to help quell this protest.

Hamilton’s role in the banking, budget and tax collection in the US is monumental. It is often forgotten that he nearly created the whole system by himself. An impressive feat. It wasn’t until the 16th amendment that make income tax a thing in the US. This was passed in 1913 long after Hamilton’s death. Woodrow Wilson brought us into the modern era of taxes with the 16th amendment and the Federal Reserve Act. The Federal Reverse Act created the Fed as its usually called. The Federal Reserve Act basically moderates the US dollar according to the economic conditions. It also prints and controls the US dollar. Unfortunately, the Federal Reserve is mostly privatized. You may have heard the phrase “Audit the Fed” from politicians like Rand and Ron Paul. The problem is essentially, the Fed is undermining the US dollar and devaluing it. The Fed has its own agenda and nobody except the Fed knows what that agenda is. (Another post, another day)

Now in 2016, after over 200 years running our government, we find ourselves in 19 trillion-dollar debt. What could have gone wrong since Hamilton? The answer is hard to pinpoint. However, my working theory is that after War World 2, during the cold war, we started to spend more and more on defense. Defense spending became out of control and the Department of Defense was not held accountable. The DoD was allowed to “cook the books” on their budget numbers. Some estimates that I’ve seen put our spending during the Cold War at 16 trillion dollars. I would encourage you to check the national debt clock that shows our debt in real-time. It breaks down the debt into categories. The national debt being so high is due to overzealous spending and lack of accountability in the government.

As for a breakdown in spending and what we spend our tax money on. I found a nice infographic that shows how we spend our federal budget. It focuses on how the debt is effected by certain factors like raising and lowering taxes. You should definitely check it out right now. It’s from the Congressional Budget Office, a government agency. I think that paying taxes is obviously important however, I believe that some of our tax dollars are wasted. One of things that needs to happen is for the federal government to cut spending. Unfortunately, we don’t hold our government accountable for the money that it spends. A good analogy is like when you take your parents credit card and go on shopping spree. Your parents may give you the credit card with a reasonable expectation of what you will be spending it on.  Instead though, you spend it without any kind regard for how much or on what. Imagine if your parents never held you accountable for spending all their money. They would probably go bankrupt in most cases because without restrictions, then what’s the point of spending less?

This is how the federal government and taxpayer relationship basically works. The federal government is you as teenager with a parent’s credit card. The taxpayers are the parents. As taxpayers we are pretty irresponsible parents. We don’t hold our government accountable for their actions in spending money. The tragedy is that the US is in big trouble because of reckless government spending. The 19 trillion-dollar deficit is almost an insurmountable sum of money. Rather than discussing who is to blame for the problem, I think its more productive to discuss how to remedy it. The blame can be distributed to many people and government agencies. The blame can be put on US foreign policy too. However, there is a relatively easy and pain-free way to help cut the deficit and still keep our standard of living intact without raising taxes sky-high.

There are two primary solutions that I feel would work to greatly reduce our debt. One of those is a simple cut in unecesary government programs and spending. One of our biggest expenses is the military budget as you can see below:2016-budget-chart-total-spending2

So just imagine if we pulled back most of military troops from abroad and cut most of the unecessary research and development budet. I would only cut about half of the military budget. At nearly 634 billion dollars, let’s cut it down to 300 billion. The 300 billion left for the military would go towards the salaries of personnel mostly and all the war material necessary. In the case of an attack on us or our allies, then obviously the money could be restored. So where would that 334 billion that I cut off go to?

Take a look at the pie chart again. 60 precent of our budget is spend on healthcare and social security. Social Security, by the way is going bankrupt. So let’s put 334 billion into both of those. Approximately 150 billion to each service. In addtion, lets cut off the foreign aid to other countries and add another 30 billion to the pot. So imagine over eight years during just one president for two terms, with approximately 165 billion dollars going to sinking welfare programs. So in 8 years, the US would put nearly 2.6 trillion dollars into those welfare programs. You could even take a step further, take about 2 billion or 3 billion out of the 364 billion and put that into higher education. You could pay off the loans of all students each year. Just think about all this, this is just cutting the military budget by half. Which by the way, is nearly 10 times as big as the next country’s military budget.

My other option, which I have written about before and have over time, really have come to like is Basic Income. You should definitely read my post on Basic Income. I will explain in short, that Basic Income is basically a replacement for welfare. You cut all social programs including medicare and medicaid. Cut minimum wage. Cut everything related to social security.  Instead you give everyone over the age of 18 a check from the government for a certain amount each month. Now just imagine if we did as I describe in my basic income post and we cut the military budget. I truly believe that the effect of both of these actions could lower taxes and help eliminate the deficit.

The taxation and government budget problems are ones of responsibility and accountability. This in part comes from the lack of education how the taxes and spending work within the government. I hope that my brief explanation can help clear up some of the confusion and misunderstanding about how taxes and government budgets work. I mentioned that this series post prefaces my next topic of Gross Domestic Product. Its important to note that GDP is calculated without the input and outputs of the government. The government spending money on military war material and other research does not count towards GDP. This is a very significant fact in that it strongly affects the GDP numbers. As you will find out in my next post that GDP only measures the input of labor and the output of production by the private sector.

I would encourage you to research more outside of my post. Its a very interesting topic. Thank you for reading! Have a great day!

 

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Economic Series Part 1: To Raise or not to Raise the Minimum Wage?

Welcome to the first part of my three topic series on Economics. If you haven’t read this blog before then you should check out my last two posts that explain exactly what this series will be about. One post is here, and the introduction to this series is here. I would also suggest reading some of my previous posts, many of which cover this very topic of Minimum Wage. In particular, this post and this post among others. I have already prefaced this topic on multiple occasions so in this post, I will dive straight into the question that I want to present both arguments for and against. I will briefly explain what the minimum wage is, first. Then I will give you brief history of it. The bulk of this post will be my arguments, however, it will be up to you to decide what side you are on.

The title of post implies that my question is about raising the minimum wage. This has been in recent years, a hotly debated and controversial question. My question is: Should the government raise the minimum wage? Now it’s not a simple yes or no question. If you say yes, then you have to explain why you think that raising it is such a good idea. Or If you say no then why not raise it?  The principle of minimum wage is fairly simple to understand. Minimum wage is the base wage of all workers in the United States. Typically, the federal government sets a standard wage. However, the states also have the ability to set their own wage higher than the federal government if they choose. Right now, the federal wage is 7.25 an hour. There are 29 states that have minimum wages above the federal level.

The history of the minimum wage starts in the beginning of 20th century. The progressive movement that help develop labor laws and other regulations on business helped bring about the minimum wage. Before the minimum wage existed, workers were paid based on how much skill their job involved. They were also paid according to market value. Just like today, typically the less skilled your work, the less pay you received. According to the Department of Labor website, the minimum was officially brought into law on June 26, 1940. The name of the act bringing it to life was called Minimum Wage and Maximum Hours Standards Under the Fair Labor Standards Act. It originally started out at 1 dollar then worked its up. In January 1980 it was $3.10 and by 2007 it had increased to $5.85. Now in 2016, we see movements to increase it even further from 7.25. This is where the controversy and debate starts.

There are two distinct sides, I want to present arguments for and against raising the minimum wage. I want to present it fairly. So I feel obligated to tell you that I am against raising the minimum wage. However, I’m not against raising a reasonable amount that is in accordance with the market value of labor. In other words, if the economy can handle a raise in the minimum wage then so be it. Let me first present the supposed arguments for raising it. This is even hotly debated among economists. So you can expect to be baffled by the contradictory arguments for each side.

For Raising the Minimum Wage:

The line of reasoning for raising the minimum wage is that it will help the poor and single parents. The various other reasons for raising it are that big corporations can afford it, CEO’s make too much and workers deserve it. Typically the Democrats champion these raises in Minimum wage. In recent years, there has been push to raise to 15 dollars an hour. You might hear about the rationale to raise it as a living wage. A living wage really means an increase that is adjusted for inflation. These are just some of the arguments made for the minimum wage to be raised. I want to quote some interesting pro-minimum wage Mythbusters facts from the Labor Department website. (I seriously couldn’t believe this government website sounds like a liberal Facebook page. Talk about propaganda) Without further or ado:

Myth: The federal minimum wage is higher today than it was when President Reagan took office.

Not true: While the federal minimum wage was only $3.35 per hour in 1981 and is currently $7.25 per hour in real dollars, when adjusted for inflation, the current federal minimum wage would need to be more than $8 per hour to equal its buying power of the early 1980s and more nearly $11 per hour to equal its buying power of the late 1960s. That’s why President Obama is urging Congress to increase the federal minimum wage and give low-wage workers a much-needed boost.

Myth: Increasing the minimum wage lacks public support.

Not true: Raising the federal minimum wage is an issue with broad popular support. Polls conducted since February 2013 when President Obama first called on Congress to increase the minimum wage have consistently shown that an overwhelming majority of Americans support an increase.

Myth: Increasing the minimum wage will result in job losses for newly hired and unskilled workers in what some call a “last-one-hired-equals-first-one-fired” scenario.

Not true: Minimum wage increases have little to no negative effect on employment as shown in independent studies from economists across the country. Academic research also has shown that higher wages sharply reduce employee turnover which can reduce employment and training costs.

Once again these are straight from the Department of Labor website. They tried to make the argument that the minimum wage being higher is actually good for the economy. I want to show just a few more for the sake argument. You might read all of this and say looks the minimum wage being 15 dollars an hour isn’t so bad?  If you believe the Department of Labor’s website then yes. Here those other myths before I move onto to the against argument:

Myth: Increasing the minimum wage will cause people to lose their jobs.

Not true: In a letter to President Obama and congressional leaders urging a minimum wage increase, more than 600 economists, including 7 Nobel Prize winners wrote, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”

Myth: Small business owners can’t afford to pay their workers more, and therefore don’t support an increase in the minimum wage.

Not true: A July 2015 survey found that 3 out of 5 small business owners with employees support a gradual increase in the minimum wage to $12. The survey reports that small business owners say an increase “would immediately put more money in the pocket of low-wage workers who will then spend the money on things like housing, food, and gas. This boost in demand for goods and services will help stimulate the economy and help create opportunities.”

Let’s move onto why one might be against raising the minimum wage. The against argument will consist of a series of rebuttals. In my personal experience, I can rebuke quite a few of the arguments to raise minimum wage. Let’s start with the things I can agree with. I do agree that the public supports raising the minimum wage. More people are for it than against it. Its obvious why too, being paid more money is not something that most would have objections. However, I believe the Department of Labor website completely contradicts a different government agency report on raising minimum wage and the effects it would have on the economy. In order to keep this post from becoming a book, I will just list my rebuttals to the common Pro-minimum wage arguments:

  1. It’s true that minimum wage has not been adjusted for inflation, however, it’s not advisable to raise too quickly since businesses are used to the current level.
  2. It’s a false notion to say that minimum wage WILL NOT cause job losses because according to a Congressional Budget Office study done in 2014, a raise of the minimum wage to just 9 dollars an hour would lead to a short-term decrease in both employment and hiring of low skilled workers. In the long-term it would see the hiring of  higher-skilled workers. The effect would be a little more pronounced at 10.10 an hour and potentially more so at 15. However, the study only takes increases to 9 or 10.10 into account.
  3. The notion that people will won’t lose jobs once again is rebutted by the CBO study on minimum wage. (I will make sure to link the study to this post)  Also just based on a basic knowledge of economics you can make an argument. The way that businesses work and the economy works with the minimum wage is complicated but its a simple concept. Workers who make minimum wage are usually low skilled. Low skilled workers are needed in any capitalist market economy. They are typically the majority and typically short-term. Raising the minimum actually hurts them. Businesses are in business for profits. If they have to pay workers more than that hurts their bottom line. They either have to raise prices or cut workers. Which is different from a business raising their wages on their own.
  4. Small Business owners are for a minimum wage increase. This has to be bullshit because I work for a small business. I’ve worked in companies with low skilled workers. In fact, I am one of those such workers. Let me tell you that most employers in my experience would rather cut the hours or cut the workers than raise prices. A minimum wage increase would only cut employment for the majority of workers in low skilled positions.
  5. My last rebuttal, is that minimum wage will help the poor or single parents. This is the biggest lie ever told. Since the conception of minimum wage it has not helped anybody. Even if it was adjusted for inflation, money is always fluctuating in value according to the markets. Also if the minimum wage is let’s say 15 dollars an hour. That is the base wage for everybody in the country. If the base wage is higher than companies won’t keep their prices lower, they will increase their prices. Not only because they have to pay workers more, but also because people will have more money. So in the end, the rich get richer, the poor stay poor. Minimum wage can’t help poor people because when the government arbitrarily raises the price of labor it only hurts the workers and consumers.

There are my arugments for and against the minimum wage being raised. I know I said I am against it. However, I would be ok with a small increase because of inflation. According to the CBO study it would help a little bit at 9 dollars an hour. But I think there will adverse effects if we raise it to 15 dollars too soon. I also think that theres other options like Baisc Income. I would suggest you read my post on that. So consider my arguments and my sources. Look into some articles about minimum wage yourself. The problem is truly not that raising minimum wage is a bad thing, its only bad if the government is trying to force it on an economy that isn’t ready for it. Like I said if a business raises its own wages thats ok but because the business made that decision on its own. For example, Starbucks recently give all its workers a 5 to 10 percent raise. They also raised their prices. The cause and effect of minimum wage is more important than the amount of the wage itself.

Thank you for reading! Have a great day! My sources are linked below:

CBO Minimum Wage Study: 2014

Department of Labor Website Mythbusters

History of Minimum Wage; also DOL Website

Basic Income–A replacement to Socalism?


I was browsing around fivethirtyeight.com, one my favorite websites right now. I came across an article discussing the idea of basic income. The article itself details the journey of a man who devoted his career to studying such a measure. I would definitely recommend that you read the original article, right NOW. Now before I explain what basic income is and why it may be a viable replacement to socialism, I want to say that there is no replacement for free market capitalism. No matter how you look at it, free market capitalism is the most successful type of economy. Also if you read this blog on any sort of regular basis you will often find me ripping and shooting holes through socialists ideas and policies. The only thing I have against socialism is that it just does NOT work. You may think after I explain that I’m proposing an socialist policy, but I’m not. I am merely suggesting a completely re-thought social welfare policy that could actually eliminate some of the problems that socialism presents.

Basic Income as explain by this article on fivethirtyeight is an no-strings attached, government funded check to each citizen of certain amount per month or annually. Now in the article they don’t get into many specifics on who actually receives this basic income check. They only say that whether your rich or poor, you get a check. Sounds really crazy right? Why the hell do people like Donald Trump need a free check from our government? Won’t it deter people from working? At first, I had come up with many questions like these. But then I started to think about it in a more realistic way. Now, if the government was cut a check each month for each citizen then we would obviously have to cut some other sources of spending. Naturally, when you think of a free check from the government you think: Welfare. So what counts as welfare?

So as defined by the article, welfare includes old age, health, family, disability, housing and a few random others like food stamps, government funded services. Let’s say the US government would cut all welfare which according to this chart made with data from OECD (To read more click on it). The chart is shown below:

flowers-ubi-21

So as you can see the US spends about 700 billion dollars on welfare related expenses per month per capita. This is all taxpayer funded money. So now the questions that I need to answer are who receives this check and how much should it be? The article does offer some light on how much. A proposed Swiss Basic Income law had the amount set around 1700 dollars a month. As you can see that the Swiss spend a similar 650 billion or so on welfare also. So let’s say the US will set it at 2000 dollars per month. And based on US census data from 2014, I have estimated that there 244 million people above the age of 18. I feel like once your 18 you should entitled to basic income. If your under then you’re probably not responsible enough, it should reasonably match with the voting age.

So here is my estimation by somewhat rough numbers:

Basic Income: $2000

Population over 18: 244 million

Monthly cost of Basic Income: $488,000,000,000 billion

Monthly cost of welfare: 700 Billion

Savings by Government:$212,000,000,000 Billion dollars.

I believe that my numbers although rough can easily justify a basic income as a cost cutting and effective way to reduce welfare costs. Now I could be wrong about any number of things in my calculations. However, let’s just take with a grain of salt and say that this is how it would be. Let’s be honest that the government has too much power over us through welfare. The government programs are usually poorly managed and very costly. Also who knows the best way to help you if your in poverty? The government? Or YOU! I think that people honestly know what they need to survive. Now many skeptics including myself will still call bullshit on this whole thing. This: Won’t this just deter people from working?

Honestly, I can say that it might deter some. But those same people are the ones who don’t work now and are on welfare. So in reality that problem can’t be fixed by an basic income. However, I think the war on poverty thus far has failed. Lyndon B. Johnson started it in the mid 1960s and we have been trying to fight it ever since. Unfortunately, the government is pretty ineffective at providing the poor help. So what makes me think that this measure could work? I think that this measure could work because it provides people the freedom to do what they will do. Let me give you two different situations that would probably occur across the country.

First situation: John Doe is a mid-level manager of a fortune 500 company. He makes a decent salary of about 90,000 dollars a year. When a basic income proposal is passed, his income increases to 114,000. John decides that instead of buying a fancy new car or going on a shopping spree with his wife, that he will invest the money and save some for retirement.

Second Situation: Paul Smith is a construction worker who has been in and out of work. He makes enough to get by, about 45,000 dollars a year. When a basic income proposal is passed his income increases to 69,000 dollars a year. Paul decides that instead of saving that extra he would rather go to the bar and party. He also decides that a fancy new car is in order.

Obviously, people of all incomes will do different things with their basic income. I don’t think its necessary wrong to go out and spend all your basic income on cars and drinks at the bar. I think its fiscally irresponsible and maybe immature. However, it still stimulating the economy. I believe the greatest asset of a basic income is that it allows people the freedom to do whatever they want. It allows you the freedom to quit a job you don’t like without losing all your income. Let’s face it 24,000 dollars isn’t a lot but its better than nothing. It may increase productivity because people would spend time searching or improving themselves for the jobs they want to do. Just imagine as a parent, if you that extra 24 thousand you can afford to pay for your kids college education. Of course, many will argue “it doesn’t close the wealth gap”. You are right, but the point is not to close that gap. The closure of the wealth gap is not really possible, sorry to break it to you.

My conclusion is that basic income may be a better alternative to socialism. Basic income is almost definitely better than our current welfare system. If you think our current system is unfair, then here you go, there is nothing more fair then everybody getting a piece. Now is basic income a realistic political idea in America? That I can’t tell you. However, I can tell you that basic income is a form of a welfare that could replace the costly and expensive welfare system currently in place without restraining our economy. I am also sure that if income is weighed right by inflation and standard of living, then it could save us billions in welfare each month, trillions a year. Our national debt isn’t getting any smaller.

I know I didn’t talk about how taxes would be effected. I would assume it would come with a small flat tax or more likely be added to your income tax. I think because of freeloaders you would have to tax it, otherwise you have many taxpayers disappearing off the tax roll.

Thank you for reading! Let me know what you think!

2016 New Year, Same old politics.

It is now 2016 and it is the election year. Donald Trump is still leading the polls for the Republican party. Hillary Clinton still leads the Democratic Party for the nomination. Interestingly, the political race has not changed much. With the Iowa causcas coming up in a month or so the stakes for the race to the nomination are heating up. The purpose of this particular post is to recap some ideas about the political race and some insights on what is going on with certain issues. Instead of speculating who may win or who has a better chance, I want to focus on the issues. Statistics and precedents can predict the winners. The winner will obviously become the leader of the free world with the power to influence and create policy. People tend to forget the President is merely a policy creator and influencer. His actual job description is to enforce the law that Congress writes. The executive branch must execute the laws. This seems simple on the surface but in reality, the complexity of issues and the lack of bipartisanship on the part of congress makes a President’s job much harder.  Conservative critics of President

Obama accuse him of using too many executive orders to avoid going through Congress. On the one hand, they have a point because Congress is supposed to pass the laws not the President. On the other hand, President Obama cannot work with Congress because of various extreme views within both parties. The executive order most recently used by Obama was for gun control. A controversial subject and order. I thought it was neccessary and the correct path until Congress decides to act. Let’s face it, background checks don’t obscure the individual right to own a gun. This is especially true if said individual is a law-abiding citizen with no criminal record or psychological affects. 

One hot topic that usually decides elections is the economy. The economy usually includes job creation, minimum wage and corporate taxes. The clear divide between a conservative and liberal policy is simple as lower corporate taxes and minimum wage to encourage job growth versus higher minimum wage and corproate taxes, respectively. There is nothing wrong with minimum wage in principle is a good regulation to keep wages from bottoming out. However, if raised artifically the minimum wage can adversely effect the economy and job market. The democratic party believes in a 15 dollar an hour minimum wage.  I believe that this is a misguided raise. Raising wages without using the market value as a guide is just stupid. I have said this numerous times in numerous ways that the it will end up increasing poverty and decreasing jobs. Common sense will dictate that a person who works at a fast food establishment should not be paid as much as some who works in bachelors degree position. Its not fair to that college graduate who paid at least 30 to 100 grand to attend an university. Another effect of artifcally raising minimum wage is that prices and cost of living will also rise with it. I really wish I could tell the Democratic candidates how dumb they sound.

Another hot button topic is healthcare. Obamacare is just an expensive mess that happens to insure people at an unaffordable and unsustainable rate. The simple fix for Obamacare is get it out of the government’s hands. Allow free competition among health insurance companies. The free competition will help lower prices because the best companies will have the MOST business. Obamacare is primarily a government run organization that picks the winners and losers rather than the market. For those who cannot afford insurance, cut some other useless government programs that cost money and use that money to subidize a strict bracket of uninsured. Once again, this is where conservatives want to repeal but I haven’t heard of a good plan to actually replace it. I think that my recommendation takes a part of the idea of obamacare but makes it better.

My last topic is college education debt. I recently recieved a call from Sallie Mae to repay my loans. (Its a struggle to pay for anything with no job) Fortunately all presidential candidates are putting forward plans to help reduce student debt. One program that New York State has just come out with is Get on Your Feet. I am in the process of signing up. It pays for your loans for two years. Its pretty good. However, what worries me is that these programs are costing taxpayer money. So what I would like to see is where is the money coming from? I feel like some tweaking to certain sections of budget could easily pay for college debt. For example, the military budget could be cut a little bit. The largest military spending budget in the world. I’ve heard college debt is approximately 1-2 billion. Consider that our military budget is about 600 billion to 800 billion. So just imagine if the government would hold the military accountable and cut about 5 percent that could fund healthcare, social security and college debt. Also we could still crust ISIS or anyone else. I actually go against conservatives because they would love to increase military but its not necessary anymore. We need to protect our borders and not worry too much about everyone else.

I hope you enjoyed my two cents. I am waiting in earnest for the nomination winners and looking forward to the debates that will come betweeen them. Those debates are usually the most interesting. Right now, I think Rubio will end up with the nomination for the Republicans. Despite Trump’s strong poll, he is not backed by establishment. Right now in the liberal camp, I think that Hillary Clinton will win. Clinton is the establishment democrat.  Should be interesting to see what happens. Stay tuned as I will update periodically.

The Retirement Bubble and Young voters: Why they matter!

I have written numerous articles about the political candidates and the hot button issues at hand in this coming election. I have written articles urging young people to vote. My pleading and urging seems to have fallen on deaf ears. No matter how many times I write about the subject it feels like nothing ever changes. I only know a few people that actually care to participate in politics. Its pretty sad that I’m 25 years old and I don’t know many other people who like me, vote. The topic has once again crept into my life. I attended an seminar for a job opportunity. The whole seminar was based on financial security. (Selling insurance is complicated)  Anyway, the presenters talked about how people don’t know how to manage their money. People don’t know shit about retirement. Especially the younger generation. Its pretty common knowledge that retirement for people born after 1980 is going to be nonexistent.

There are numerous reasons for this. Most of which are political in nature. However, the biological fact is that after world war 2 there was a boom in babies born. These group of people could include grandparents and parents. Mine or yours. This generation of baby boomers is hitting retirement age. (65, a center of controversy in itself) The amount of retirees will soon exceed the amount of money and workers in the current social security system. So you say: ok so thats why us 20 somethings have no retirement?

True. However, in addition to the surging amount of retirements there have been other developments. For example, with the advancements of modern medicine, people are living longer. This creates problems because the money needed for retirement increases with age. Combine this with the fact that US government has taken somewhere in the neighborhood of 2 trillion dollars out of social security since the 1980s. The rational is that they are borrowing the money. More like stealing because it has never been paid back. Social security is still solvent for a couple more years, last I heard it was maybe 25 years. So you say: Ok so Reagan and Bush Sr screwed us over and social security is toast.

The blame could be placed equally on any US president who “borrowed” from social security. But I think that the biggest problem isn’t that the government steals from the social security fund or even that the retirement bubble that I explained will eventually cripple all retirement. I feel that the deeper problem is something that no candidate can fix. Candidates only focus on the cosmetic issues. Issues that may be not as important as the deeper more complex ones. I’ve said this before and I will keep repeating it. Cosmetic fixes won’t work. Real change and real action is needed.

Whats the problem you ask? Why does retirement even matter to us 20 somethings? Well, my friends it is the future. Surely everyone thinks about the future. The future is something many look forward to. It also something that many try to predict. Unfortunately, the future is looking pretty bleak. One reason for this is the same big problem that I see with retirement issue. The problem is: YOUNG VOTERS DO NOT VOTE IN ELECTIONS. How much clearer can I make this? The facts are that young people don’t seem to give two shits about the outcome of their futures.

Call me crazy. Call me old. I believe that I’m actually wise. I’m not blinded by the usual things like social media, tv or drugs. Sure, I go on facebook as much as anyone. Sure, I watch tv all the time. (being unemployed sucks) Sure, I get drunk every once awhile. But despite that, I don’t drink the kool aid.  I am a firm believer that young people should vote because it could matter. If all the 18 year olds to 29 year olds were to vote, we would have the biggest majority in the US. Us 20 somethings have an advantage similar to what the baby boomers have now. Except the fun part is that were young and the old farts are dying! Meaning that our group is growing quicker. We have the majority.

However, unfortunately most young people neglect to see this. Typically responding to why they don’t vote because “it doesn’t count” or “I’m not interested in politics”. Excuse me. Ok first of all, your vote alone may not mean nothing. But if a million votes could change the outcome of an election and your one vote helps make that million. I think that counts big time. Second of all, how the FUCK can you be NOT interested in politics? Ok I get it, you don’t wanna watch or listen to the bullshit on tv. Me neither. But you should most definitely be interested in your future. So when your 65 or more likely 70, and you want to retire to travel the world or spend time with grandkids but you can’t because you have no retirement money due to the government’s inability to fix social security. Especially if you only manage to make the average income which is now about 53,000 dollars a year per person. How much money do you think you can save while you have a family? You will have too much stuff to pay for. Saving money is nearly impossible now. We live in a spend first society.

So when your 70 and you have no retirement, you will be working a shitty job because you can’t afford to retire. At least, you can think about how in your 20s, your ignorant bliss let you have a blast! I think that working when I’m 70 or older would be terrible. I honestly don’t wanna do that. I started working when I was 16. So to avoid this miserable future, you should vote. Vote for politicians that will help young people get retirement. Vote for someone that will fight the issues that matter to you. For example, you may have college debt. I know that I do, about 60k deep. I don’t understand how or why young voters refuse to participate in democracy.

We don’t want to end up like the current generation of retirees. When social security first started in the 1940s there was 14 workers for every retiree. Now there is 3.  Meaning only 3 people pay into social security for each retiree. America can turn around but it will young voters to do that. We can’t let the old farts ruin our future. We will inherit their huge mess. Many of us are already feeling the effects. There is reason why I’m unemployed with a college degree. There is a reason why millions of other people with college degrees are also unemployed or under-employed. The older generation is working longer, staying in the jobs that people like me or possibly one should be working.

My conclusion is that young people need to wake up. Get on social media and encourage others to vote. Voting is just one of the many ways we can shape the future. If you are 18 you should vote. If you are 29 then start voting. We have the numbers but we don’t use them. Vote Vote Vote!!!!

Democratic Debate Battle Royale

I hope you got a chance to watch the democratic debate on CNN tonight. It was quite the debate. It was even better than the republican debate! (I’m a conservative libertarian) The candidates gave it their all and really battle over the issues. Despite the fact that they agreed on the goals of the policy, the fight become over the means. Each candidate got fairly decent air time with exception of Jim Webb who seem to struggle to get any talk time. Of course, the focus was mostly on Sanders and Clinton. The other candidates Webb, O’Malley and Chaffe gave some good cannon fodder but in the end all trail Sanders and Clinton significantly. So I want to breakdown my reaction to each candidates performance. I will quickly go over the three 1 percenters (In the polls). Then I will go into some more detail with Clinton and Sanders who both seem to give strong performances.

The worst performance goes to Jim Webb. Mr. Webb just couldn’t seem to jump into the conservation. He couldn’t seem to defend his moderate positions. Webb just was out-democrat by both Sanders and Clinton. I will give him props for being a Vietnam Veteran. Unfortunately like his campaign, his lackluster debate performance will probably end his run sooner rather than later.

Lincoln Chaffe was another candidate who participated in the debate. Came out strong attacking Clinton and her scandals. Chaffe was a bit a flip flopper have changing parties from Republican to Independent to Democratic. Chaffe is the former governor of Rhode Island and Senator. His voting record is a bit shaky. However, like Webb he just couldn’t get much air time. When he did get time, he certainly made it count. Unfortunately for him, I don’t think it was enough to boost his polls too much.

Martin O’Malley is the former governor of Maryland. He gave the strongest performance of these three candidates. He was able to use both Sanders, Clinton and others arguments to jump into the conversation. There are two issues that O’Malley pushed hard that I took issues with.  First, his strict gun control policy has some questionable results given the unrest in Baltimore.  Clearly, with the death of innocent black African Americans his gun control didn’t stop it. One has to wonder if a national strict gun policy would have the same results. The second issue was on immigration. He seem to take it a step further than any candidate. I’m not sure offering free college to illegal immigrants is a smart idea. Considering that American students have massive student loan debt. However, I wouldn’t be against the eventual naturalization of illegals and their receiving benefits. I think that O’Malley is definitely more similar to Hillary Clinton than Sanders. Not sure how this will affect his polling. But he may be a little too radically progressive for American voters. In addition, his low poll numbers suggest that he isn’t going to be catching up any time soon. I think his lack of national political experience will hurt him because in democratic field it seems that this is a requirement.  (The GOP seems to be more on political outsider candidate road, think Donald Trump and Ben Carson)

Onto the top two candidates leading the democratic polls:

Bernie Sanders is a senator from Vermont. Sanders had a very strong showing despite being attacked early and often. One of the questions that kept him on the defensive was his record on guns. I have mentioned this in previous posts that Sanders hails from Vermont a gun loving state. Sanders was able to say that he is changing his position after all the mass shooting. He also tried to frame it in the sense of “Urban vs. Rural” states. Noting that rural areas tend to have lax gun laws. O’Malley smartly shot him down on this narrative because of his record in Maryland. (Pun not Intended/ Notwithstanding the failures in Baltimore) Sanders was also successful pushing for the usual minimum wage hike and paid family leave. I think that the question in my mind, and many others is how will you pay for all these expensive actions. He did mention that he would put a tax on the rich hedge managers or something like that. The thing about Sanders is that his plans all sound great. The problem is where is all this money coming from? All the rich people are moving out already so I don’t think taxing them more will make them stay. Overall though, I thought that Bernie stuck to his platform pretty closely and was able to separate himself from Clinton. I have to believe that Sanders will keep building up his support.

Hillary Clinton is a former senator of New York and Secretary of State. Mrs. Clinton was able to stick it to everybody in this debate. She flatly denied the email scandal anymore attention than it had. Mr. Chaffe did throw a few jabs with his mention of no scandal. Clinton really stuck to her guns on foreign policy. Surprisingly she did make some sense by saying that a coalition to help in Syria was necessary. She was unapologetic about her decisions in the past. I could see that she was really trying to keep the focus on the issues and not her past. Unfortunately her past is so well known I think it played well for her. Clinton really pushed strong for rights and equality for women. However, Sanders also pushed hard. They both seem to think that smaller countries like Denmark and Norway were good models. The only problem is America is much larger in population. Once again, just like Sanders, Hillary could not answer how she might pay for anything. All I heard was increase taxes on rich.

Speaking of that, Republican bashing was Hillary’s leading role. Every opportunity that she got, she took to bash the republicans. Comparing the democratic debate as one that focused on issues instead of racism and women hating.  She was right about that. However, I feel like Clinton failed to really convince people that she won’t do the shady things of the past again. The mistrust of politicians is at an all time high. She is the poster child for bad politicians. This was brought out by the constant attack on her political flip flopping on issues. Anderson Cooper went directly for her saying any to get votes. I was not convince by her answers. Clinton seem to have strong performance by using other candidates positions to back her own. She was able to articulate many of her own positions because of the huge amount air time given to her. (Much to the dismay of Mr. Webb) I think that Clinton probably improved her polls by a few points. She’s a savvy politician.

Overall, I found the debate to be very interesting and more focused on the issues. This is also due to the smaller number of candidates. The stark contrast between republicans and democrats is that democrats are actually in agreement on what needs to be done. Where republicans can’t agree on where to even start. The democrats bashed each other much less than the republicans bashed each other. I knew from the get-go that republican bashing would happen. Not surprisingly it came from Clinton and Sanders the most.

Just before the debate started, I was watching the analyst on CNN talk about VP Joe Biden. Biden is considering a presidential run. The conversation was very interesting because it seem that some in the media were tired of waiting for him to decide. I found this to be very interesting. I was thinking about how the debate dynamics might have changed if Joe Biden did decide to run. I do believe that Biden would have significant impact in the democratic primary. Biden would almost certainly give Bernie Sanders a run for his money. He may even knock Sanders out of contention. The biggest challenger to Biden would be none other than Hillary Clinton. Biden is on par with Clinton in political experience and political clout. Not only that but he is a sitting Vice President. Clinton identifies closely with Obama. However, I think that Biden would be able to more effectively use Obama in his election run. Obama might even endorse him. (A running mate for 7 years in a row probably means they are great friends) Granted President Obama may not be the most popular president but he does have an influence unlike any other endorser. So will Joe Biden throw a wrench into the race?

Thanks for reading! More coming on this debate and future debates!

The Importance of Voting and the Election Process

The election has begun with two debates already in the books and quite a few more scheduled; its time to vote. One of my reasons for starting this blog is to help educate and encourage people to take action on issues that matter. The election process is a controversial and important role in democracy. The democracy has changed over the years. It is true now is different from when the founding fathers started this great country. Despite the changes, voting does still matter. To some degree the voting process has been corrupted by the influence of money. However, that can be easily changed if we elect the right politician. The right politician is a topic of debate.

The problem that I can see especially among people ages 18-29 is that they do not vote. In college, many of the excuses I commonly hear would be “Politics don’t matter to me”, “I’m not interested in politics”, “I don’t have time”, “I would pay attention but just don’t”. Young people of voting age make a large part of the population. Just look at the 2010 census data for New York. You can browse every state too. Overwhelmingly the age group of 18 and over is the highest. Given that this data is 5 years old, most of those 18 year olds are like me now, are 24 or 25 year olds. From a personal standpoint, when I turned 18, I registered to vote. I then voted in two presidential elections, first for John McCain in 2008 and then for Gary Johnson in 2012. It’s unfortunate to say that I am probably a minority of 18 and 22 years olds respectively to vote.

I hope that my generation will wake up and start voting. The only people voting are older people who want medicare and social security benefits. These are baby-boomers who really have 20 to 30 years left and beyond that is not their concern. I will say that despite voting patterns, Barack Obama was able to attract more young votes than any recent election. My point is that young people 18-29 need to start vote and voicing their concerns to our government. Its our future at stake.  We need to press the issues that will be affecting us. For example, our social security and our retirement is being threatened by insolvency. The college debt that many of us hold will burden us for years to come. These are just a few of the issues that young people should be concerned about.

If you live in New York you can learn how to register to vote here, it can be done online through the DMV. If you live anywhere else in the US you can go to your state DMV or State website to find more information. Please register and vote in this election.

Now that I have lectured young people to vote and given some links of knowledge its time to explore some history. The history of the electoral process is very basic. The system was set up during the constitutional convention in 1787. You have to remember that only legal voters were land owning, white, men. Since the founding fathers were some of the most educated men in the new nation, they had to consider those who were not as educated. They came up with the electoral college. The electoral college is a system surrogate voters in each state. Each state is assigned a number of voters on population. The more population the more votes.  The largest number of electoral votes belongs to California.  You read more specifically from this government website.

I believe that the electoral college is outdated. With so many people graduating college now-a-days the system has no real use. I think that citizens are educated enough to be able to vote. I believe that the electoral college should be repealed and we should just on pure vote counts. This is not the only reform that I would make. I mentioned above that a reason why elections seem to be rigged was money. Money in politics is one of hot topics. Taking money out of politics is complicated though.

I think that the first step would be to eliminate salaries for all elected positions. Civic duty should be volunteer and not for profit. I do realize that Rome had paid senators and politicians. However, in the end Rome could not keep the empire together. Corruption can be credited with tearing down many democracies and tyrannies alike. A volunteer system would help bring out the good-natured candidates. The candidates who truly have a passion for serving the public good. The second step would be to eliminate the use of personal money in any election race. An election campaign should be done purely on fundraising. I see nothing wrong with people donating to a person who wants to run. There should also be strict regulation on fundraising money and what it can be used for. The third step would be to disallow corporations to contribute to any campaign. Corporations could still have their powerful lobbies. I think its wrong that business is in bed with government. It only leads to corruption.

In addition, speaking of corruption there should stricter regulations on the revolving door effect. I have given an example of this in a post involving Dick Cheney. In order to stop greedy politicians from stealing taxpayer into their pockets, every candidate should be forced to stop their connections with whatever business or former employers. The NSA has shown a knack for spying so it should not be hard to spy on candidates interactions with their former employers. Its reasonable spying because the candidates need to held accountable.

With my reforms I feel that government could run smoother and with less corruption. I would even take a step further by eliminating personal income for congress. This could potentially cut costs and save taxpayer money. Considering that al 538 delegates of congress make upwards of 174,000 and it will increase each year. If you do the math, that is a nice chunk of change. Cut their benefits and retirement, we are talking millions of dollars. I don’t think we should feel bad for them either, they are wealthy on their own plus they work less than teachers do. You can almost count on every single delegate stepping up their game or quitting all together. If we want congress to get stuff done, we have to make them work for it. Just like the millions that volunteer for campaigns across the country. Congress has a bad approval rating and they need motivation.

This may all sound great. However, we need to vote and young people need to vote in the masses! Thank you for reading!