Hiatus Break: Audit The Federal Reserve

Have you ever gone shopping like at the grocery store or for clothes? Any time you go shopping at a place on multiple occasions you probably notice prices change over time. This could be due to any number of factors. I feel like at the grocery store most people have a certain amount of money they like to spend. I know that I do and even with clothes shopping, my wife and I usually set a limit. If you’ve ever felt like every year you go with that set budget you buy less stuff, then you have felt the effects of the federal reserve. So you have to ask yourself did prices go up or did the buying power of my money go down? The answer is probably a combination of both.

If you haven’t read the title or guessed yet this post is about auditing the federal reserve. Now many people have absolutely no clue what this is or what it does. The federal reserve is a private, central bank that regulates our monetary policy here in the US. It is not controlled by the US government. Although the President is able to appoint the Chairperson of the Fed and the other heads in 11 cities around the United States. All of the appointments have to be approved by Congress. This is the only role that the government plays.

The current Fed Chairperson is Janet Yellen whose term is up. This means Donald Trump has to appoint a new chairperson. His selection matters greatly for us. I don’t care who Trump picks but whoever it is, has a big responsibility.  The Federal Reserve controls interests rates, money circulation, debt, bonds,..etc. They tell the US mint how much money to print. They set the circulation levels of the denominations. Keep in mind they have a lot of power without much supervision.

So why Audit the Fed? Well, one of favorite Senators Rand Paul has been saying this for years. The problem with the federal reserve that Rand Paul and others see is that an institution with unlimited power that has no accountability to anyone is a dangerous institution. Do your own research but here something that I learned by reading up on this. Before the 2008 financial crisis the federal reserve not only SAW but actively IGNORED the housing market bubble. They literally just WROTE IT OFF like nothing. The Chairperson of the Federal Reserve at time, Ben Bernanke just flat out denied that it was nothing but aberration!

Then during the crisis they did nothing.  Just a quick reminder that everyone employed by the Federal Reserve is very smart most of them with Ph.Ds in economics. These so called “economic geniuses” failed to act in the face of major crisis that saw trillion of dollars lost and millions of families affected. People lost their houses, lost their retirement and their jobs. Did the Fed suffer any consequences? Nope. Somehow they are still allowed to function!

Auditing the federal reserve would mean accountability. We can’t let them devalue our money and ignore possible crises that could affect millions any longer! We need to hold these professional bank robbers accountable for their crimes against the USA. Auditing the Federal reserve is just the beginning. After we find that they have been fucking us over, we have to get rid of them. Ever since 1913, when the fed was established, we have been getting screwed over by their monetary policies.

Trust me, every day people like me and you are screwed by these pompous assholes. They devalue the dollar on purpose. They decrease your buying power. Why do you think that 30 years everything was cheaper? I can remember growing up and my parents both had steady jobs. Luckily they never got laid off or fired until this year. So we always had a steady income. The financial crisis hit. We went from shopping at Hannafords which isn’t super expensive but its pricey. We started shopping at Audi’s which is much cheaper in comparison. I didn’t realize it til later but the financial crisis drastically decrease my parents buying power. Thankfully we never starved.  But imagine the price paid by poorer families who could barely get by in the first place?

The federal reserve is an evil institution. It cannot be trust. We need to end the Federal Reserve. I hope whoever is picked as Chairperson agrees to an audit which will inevitably lead to ending the federal reserve. Thanks for reading. Please tell your friends and share this post. #EndtheFed #AudittheFed Let’s spread the word.

 

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Hiatus Break: Minimum Wage doing Maximum Damage

I’m baaaaaack.

I came upon some very interesting news on minimum wage. If you have ever read a post or scroll through this blog you can see that I love to talk about minimum wage. The reason why I discuss it so much is because its the best example of flawed economics and government policy. I know there is a lot juicy political controversies that I could write about but I actually wanted to talk about something important.

A few years ago in Seattle, Washington they decided it was a good idea to raise the minimum wage to 15 dollars an hour. Now personal sidebar note: I will be visiting Seattle this summer and I may even want to move there. I hear its a great city and place to live despite the government’s stupid economic policies. Anyway so its been a few years since Seattle raise its minimum wage to 15. What happened?

In an unsurprising twist of events to anyone knowledgeable in economics this study came out to find that the minimum wage ACTUALLY HURT LOW INCOME WORKERS!!!! WHAT A SHOCK! Here is the link to the study: https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.4ea73b51a9f7

Workers lost an average of 125 dollars a month! If you don’t think its big deal then you probably don’t understand how economics works. The explanation of this is pretty simple. In laymen terms: The government artificially increased the wages of the lowest income workers to 15 dollars. Therefore this decreased the value of money. For example if you had 100 workers, and you split them into 5 payment scales.

Scale of salary per 20 workers:

20 Workers make 10 dollars

20 Workers make 20 dollars

20 Workers make 30 dollars

20 Workers make 40 dollars

20 Workers make 50 dollars

Let’s imagine that the government raises minimum wage from 10 dollars to 30 dollars. This would decrease the value of all the workers buying power.  Now 60 workers would make 30 dollars. Because everyone makes at 30 dollars the buying power would decrease for everyone since employers would pass off the costs of raise to its consumers. Any time you raise the costs of doing business you raise the prices and that effectively eliminates any benefit of minimum wage.

You have to understand that buying power is more important than how much money you actually make. This is the point I’m trying to get across. People think that minimum wage lifts you out of poverty. But the reality is that because it sets the floor higher, it just decreases the value people who aren’t low wage workers. It also doesn’t help those low wage earners because the price of goods increase and so do taxes.

I believe the workers should make what they deserve. But I think that businesses and potentially employees are better fit to decide what their compensation is. For example, look at Starbucks. A few months ago they gave their employees a raise in wages by 5 percent. No government urging or anything. That is great. But then a few months later they raise their prices to off-set the cost of higher wages. That’s how it works with minimum wage too.

Honestly I could sit here and give a million examples of minimum wage failures. But to end this post I want talk about the Federal Reserve Bank. I recently read part of a book about the Fed (nickname for the Federal Reserve Bank; look it up).  The Fed controls and maintains the currency of the US. Its not well known how the Fed works or what exactly they do. However, because of their negligence in lowering the cost of money aka interest rates on borrowing money, they essentially caused the house crisis. They also devalued money over the past 20 or so years. The Fed is a purely evil organization, not created to be evil. But with great power comes great responsibility and corruption. The problem is that the Fed is not under the control of the government itself. However, it does work for the government (by printing money).

I really want go in a deep expose of the Federal Reserve Bank. I need to do some more research. I believe that if I can help educate people on this topic maybe we can end the fed and fix the damn money. Inflation and de-valuation of money is causing a ton of our problems today especially for normal everyday people. I’m sick of it.

Thanks for reading! Like and Subscribe if you love it!

 

 

Mixed Bag: Wrong on Tariffs, Got Hacked?, Garrett for President 2028?

My last post on tariffs was very good if you haven’t read it yet. I just want to make one clarification about that post. Throughout the post, I mention the possibility of plan to make tariffs a bigger source of national revenue. The problem is that I wrote it just trying to educate people about tariffs and thinking after research I could present a plan to help relieve the tax burden. After some research, I’ve come to the conclusion that I was totally misguided. I know that free trade is a great economic benefit for every country. I never proposed doing away with it. I’ve come to the realization that I was wrong about tariffs. I don’t think there’s way to make tariffs viable without starting multiple trade wars or killing off American businesses. The explanation is simple. Its basically a tariff on imports would make many products that aren’t produce here in America very expensive to the consumer. A tariff on exports would create tension between the US and other countries whom export to us. The bottom line is that tariffs in this free trade world just won’t work either politically or economically.

This particular post is a mixed bag of goodies such as the tariff plan which is not happening. I’m going to try to keep short, not sure that is possible for me. (See any other post) I think that first I want to address the Russia hacking. I don’t usually like to give these ridiculous stories that people call “news” any sort of attention. However, its been bothering me. The problem I have with the story is not that Russia tried to hack, or that Trump wanted to them to hack, or even the debate over whether or not its true. There are conflicting reports that the hacking was made up. Whatever the case is, I find it completely ridiculous. The best I came up with to describe it was this unusual status I made on my facebook:

The Russians interfered with my whole life, hacked my SATs scores, college transcripts, my facebook, my old myspace account, and all four of my email addresses. (I lost count actually) Apparently its totally a valid excuse for why I’m such a failure. You want to see proof just look at how big of a loser I am. This my friends is what the federal government and Democratic party are doing. How pathetic and sad can you honestly get? Trump won because people are tired of Obama and his socialist policies that really haven’t worked. They don’t like the increased terrorism and racial strife. I don’t believe that Trump is the solution but blaming your problems on Russia is ridiculous. Trying to start World War 3 is dumb. If I could run for President in 2020 I would, because the only people who seem to be politicians are idiots.

I think that I make a valid point of how this Russia hacking is playing out in the media. I’ve never actually believed anything the media tells me. I would recommend you don’t listen either. As they say: Don’t drink the kool-aid.  I thought I would just share that.

In an unrelated matter, I want point out that I made a half hearted declaration for President in 2020 even though I’m only going to be 30. If you didn’t know you need to be 35 to run for President. In the event that I turn 35 and I decide to run, I promise that my readers will be the first to know. If you are curious, I will be 35 in 2025, and eligible to run in the 2028 election. So uh, mark your calendars. If Trump doesn’t ruin us then I hope I can count on my educated readers for your support. I will be on running on the libertarian platform with a little bit of my own ideas mixed in. Just for fun, lets review my positions:

  • Against Minimum Wage
  • Pro-Adoption (Pro-Choice because 14th amendment and Against Abortion because its killing)
  • Audit the Fed (Reserve) (Hold them accountable)
  • Pro-free trade
  • Cut spending and actually lower taxes (Against raising taxes on anyone)
  • Hold the Department of Defense accountable (military industrial complex)
  • Make Healthcare a free market system (fix regulations)
  • Repeal the Patriot Act
  • Make gay marriage legal everywhere (states rights be damned, gov’t shouldn’t control marriage
  • Make marijuana legal everywhere (kills the black market and raises revenue)
  • Basic Income, see my post, Which also leads to cuts in all of the welfare portions of the budget plus a savings of about 200 billion dollars
  • Invest in infrastructure like high speed rails and roads
  • Pay down the national debt (again extra money from cuts over a course of 10 to 20 years)
  • Pull all troops station abroad and put them on the Mexican Border (Simultaneously, I would institute a streamlined immigration for legal and illegal immigrants basically just giving them citizenship after a background check and psychological evaluation plus for illegals a higher tax rate to ensure they really want to come here. No handouts here. All countries citizens welcome.
  • Slowly end all unnecessary government functions or phase them out because a big bureaucracy isn’t necessarily great in terms of cost and effectiveness. Including but not limited to my own power once I get what I see fit to be done.
  • Eliminate all Federal government regulation regarding education such as common core because teachers know their own students better.

Granted my plan is ambitious but I don’t just win the presidency not to make a major impact. I made this list off the top of my head. I made some vague positions and perhaps in the future I will get to expand on them. If I had to describe my presidential ambitions in a sentence or two I would describe it as:

I want America to be a fiscally smart, diplomatic savvy and self aware as a nation and as a people. Americans have always thrived on their freedom and their ability to govern themselves and that is exactly what I aim to do, is put the control in hands of the people.

I think my plans are simply for freedom and not much else. America has become extreme and its painfully obvious with the election of a person like Trump. I think we need to go back to our roots. People need to read the Declaration of Independence and the Constitution. These are the documents that built the country. I think the words have significant meaning that puts being American in great honor. I also think that we shouldn’t forget our past mistakes whether its invading Iraq or the whole cold war, we should not let history repeat itself. I really don’t fancy getting elected or being President easy. However, I think i would really enjoy working to make a country that I’ve been living in and studying since I was a child.

That’s will do it for this post. I had to address a few things and next post will be more coherent, I promise. Thanks for reading!

 

 

Beating A Dead Horse: Fallacy of Minimum Wage and Rise of Welfare

The topic of minimum wage seems to really boil my blood. I write about it constantly. I don’t know if I can link all the posts its in without making a paragraph of it. In this post, I want to reiterate some of my usual arguments about minimum wage. However, I want to connect two things that are eerily related. Many people who think that McDonald’s and other workers of low skill level jobs need a living wage are the same people who say welfare is necessary because of the low wages. The liberal mission of a living wage is a misguided pipe-dream. The conservative theory that cutting all welfare at once is a solution that also will not work. Ever since the mid 1960s, the United States has been nothing short of obsessed with welfare and minimum wage. We depend it, like a cigarette addict who depends on cigarettes for nicotine. You can try to quit cold turkey or you can say fuck it and smoke more cigarettes because why quit when you’ve already damaged your lungs. I want to present something similar to what the e-cigarette has done for smokers. A new innovative way for the United States to free itself from this trap of living wages and welfare.

Recently, I came across these articles claiming that Minnesota had fix their state economy while Kansas had wrecked it. Minnesota elected a new democratic governor who raised taxes and increased minimum wage and saw a positive effect on the economy. Meanwhile in Kansas, they elected a tea party candidate. The governor of Kansas proceeded to cut four government departments and Medicaid. He cut the department of education and others. He lowered taxes for the rich. Kansas nearly went bankrupt.  It’s interesting that the total population of Kansas and Minnesota is about 7 or 8 million people. Kings County or otherwise known as Brooklyn has 2.6 million people, about same number of people as Kansas. New York City has a total of 8.6 million people as much both of those states combined. Just for some scale. I think when you look at tax plans and government philosophies, you can’t just look at results like “Oh the democratic way is definitely better because of Minnesota and the conservative technique sucks because look at Kansas!”

I believe that you have to take into account how many people are in the state and the unique-ness of that state. Kansas and Minnesota have completely different populations. They have different income per capita. They are in different geographic locations. Now I think that there are flaws with both GOP and Liberal ways of taxation and spending. As a libertarian, I can appreciate what the Kansas governor was trying to do. But he was too hasty, and didn’t have clear alternative that actually worked. I think the flaws with liberal system really tell you all about why minimum wage doesn’t work. The first flaw is that minimum wage can’t possibly help the worker as they claim it will. You have to realize that a minimum or base wage means it’s the least any worker can make. When you raise the base wage that means you raise the production costs of every company in the country, state or county. It affects all businesses. Businesses don’t just pay out wages. They have to pay taxes, regulatory fees, stock, transportation, supplies, retirement. Its bad enough that workers wages already take up to 50 or 60 percent of the profits in most businesses.

The worst effect of rasing minimum wage is felt by small business or franchised businesses. I have worked in franchised businesses for about 6 years now. A franchised is a separately owned business that pays to have the corporations name on it. The corporation sets the rules and standards and the franchisee is responsible for turning a profit. When you raise minimum wage you really hurt any small business or franchisee. I can personally tell you that at some McDonald’s they don’t even make a million dollars in a year. The one I worked at, only made about 500,000 in profit. Minimum wage is a small business killer, it’s not fair. Big corporations don’t care if you raise the minimum wage because they can take it. They are multinational corporations that make millions worldwide. You may say ok but low wages means we need more welfare right?  What we need is to keep the government out of the price setting business. Minimum wage increases the costs of everything. A lower wage would go further because production cost are lower. That is why other countries take our businesses, you can pay their workers less.

I’ll admit that we need some type of welfare. We cannot just cut medicare and Medicaid. We can’t just collapse social security. We need to help anyone who can’t work because of a mental or physical condition. We need to help people save for retirement. We need to support to the unemployed. The question is how to do all that without raising our debt even more. Currently, the welfare system in the United States cost about 700 billion dollars each year. This 700 billion on the taxpayer’s dime, aka you and me. It’s a complex and complicated system with multiple government agencies. The bureaucracy is ridiculous. I have written about basic income before and I strongly recommending read it. In that post about Basic Income, I propose a simple solution to the problem of welfare. Although it may not be as simple as I explain it. My central argument is that if 700 billion is spent on welfare each year then we install a basic income of about 2000 dollars to each resident over 18. The cost is about 500 billion for a basic income. We then replace our current welfare system with this basic income. Obviously there are kinks and certain regulations that would necessary especially when it comes to the unemployed and taxation. In my estimation, I believe that we could save 200 billion a year.

Here is my original post:

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.

My point is that minimum wage doesn’t pull anybody out of poverty and neither does welfare. However, it is necessary to have both because we are a first world country. I believe that our government just doesn’t run anything that efficiently. I think that a ton of money is wasted on government programs that could be done by the private sector. I also believe that basic income is the solution between tea party economics and a full-fledged socialist economy. In beginning I used the analogy of a smoker trying to quit. I believe if keep minimum wage reasonably low, and we install basic income to replace our current welfare system, the United States could start to fix the other problems that plague our nation. I think that both parties and libertarians can get behind this idea. For liberals, it maintains the idea that people should be helped by the government and it would be taxpayer money paying for basic income.  For conservatives and libertarians, it keeps the government reach out of people’s lives. It eliminates a large of chunk of government-run services. It also could help bring our national debt down or pay for other projects.

I hope that this was an informative and though provoking piece. Feel free to research anything I have said. I won’t say that I was right about everything and I left out exact details. However, I think my argument is a viable one that should be considered by everyone.

Thank you for reading!

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!

Economic Intelligence: Politicans Lack it

Its occurred to me on multiple occasions that politicians seem to lack any sort of intelligence in regards to economics. My last post was a heated detest of Trump’s printing money comments. I scathingly scold him for being so stupid about messing with our currency and debt. Trump’s comment literally make me think that candidates running for President think that money grows on trees. In some magical way their tax plans and spending outlays will work out in some kind of utopian dream. Let’s be honest though, its not just Trump, its Bernie Sanders, Hillary Clinton, even recently dropped out Ted Cruz and John Kaisch. I think for me, the biggest weight of decision on who to vote for is through economic policy.

As I usually do, I want to pose a question then slowly answer using historical and modern references. This time instead of posing any real question I just want to review a little historical background on who made our economy because its the subject this great biography on Alexander Hamilton. Then I want to review why the policies of both democrats and republicans alike are misguided. I may also dive into the problems with our economic system. The best starting point on a such a broad topic is to actually narrow it. More specifically, I want to discuss the taxation throughout American history. Then I want to get into the federal budget and debt.

On the subject of taxation, there is famous saying from the Revolutionary War that was a common rallying cry for independence from Great Britain. You may even remember this saying from middle school history: No Taxation without Representation!  The British heavily taxed the colonies to pay for their ever-growing debt. The monarch, King George III had many foreign wars and colonies to protect. As a result, high taxes were levied on the American colonies. The problem was that colonists had no representation in the British constitutional monarchy. When the colonist tried to gain influence and resisted the taxes, the British responded with even harsher taxes. In a simplified version, this lead to the Revolution and ended with the American colonist winning the war.

After the war, the issues of taxes came up again. The main proponent of America’s future financial stability was Alexander Hamilton, first secretary of Treasury. Hamilton wrote and pushed through many of today’s financial laws in government. Hamilton was able to establish excellent credit through the payment of debts. He was able to consolidate state debt and federal debt because each state held its own debt before the constitution was created. In order to make sure that the federal power came before the state’s power, Hamilton pushed for the consolidation. Hamilton also created bonds to help pay for the war debt. The main form of income in the early 1790s was import duties. Hamilton revamped the customs, invented the coast guard and cut down on the smuggling. (Smuggling was popular during the Revolution against the British.)

As the United States grew bigger its need for government revenue increased. Obviously this meant an tax on actual citizens. While Hamilton was still alive there was no such support for an income or land tax. Part of the reason that many rich landowners were against it, the same ones that were also in government. It was not until the Civil War that an actual income tax was passed.  The government also tried varies taxes on goods like alcohols. This only resulted in rebellions. These measures were never popular. Of course as we progress to the early 20th century we can see that taxes increase by each decade. One of main sources of income by the federal government was through bonds especially during the World Wars. If you don’t know how bonds work then its basically a government backed loan. You pay 100 dollars for a bond slip. In a certain period of time your able to cash it in with an interest rate.

In modern times, by this I mean post WW2, taxes are generally considered to be fairly certain like death. Taxes have always fluctuated, such as during the 1950s into the late 1960s with the Vietnam War saw taxes go high. Then in the 1980s, Ronald Reagan cut taxes and the trend of lower taxes continue up until about the early 2000s. Of course, our tax code is very complicated due to politicians messing with it. Many former presidential  candidates wanted to scrap this tax code. I feel like I’m beating a dead horse because I have talked about tax plans numerous times. To save my word count, I will just generally say that all three current candidates tax plans are either very wrong or very misguided or both. (scroll through my blog to find their tax plans)

Alexander Hamilton did a ton of good for America’s financial system. He also held the opinion that being in debt was a good thing. I honestly think that if he knew that we have accumulated 20 trillion dollars in debt, he would roll in his grave. America has always been in and out of debt through our history. You can typically identify times of debt with wars. I have also noticed that following a war, the debt will vanish due to economic dominance. The best example is probably World War 2. The post-war period saw America as the world’s number one creditor and business leader. This is mainly due to the fact that most of Europe and Asia had been destroyed. I believe that and many economists believe that our debt is way too big. It will nearly impossible to pay it off. Not to mention that people like Donald Trump and Bernie Sanders want to wreck havoc with insane policies like printing money and spending as much as 10 trillion!

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So your probably wondering where exactly I’m going with all this history and modern references. (to the bank, of course!) First, I think that Economic Intelligence is more than just an understanding of economics. Economic Intelligence is knowing when your policy is working or not working. Its knowing that printing money will surly ruin us, DONALD TRUMP! Economic Intelligence is being smart about money, its being similar to Alexander Hamilton. I’m not saying that Hamilton is the end all–be all, but his wisdom on economics has endured over 200 years. The fact is that I could take any of the three clowns running for president and poke holes in their economic and tax plans. The problem is that really don’t understand how economics works. Repentantly, they haven’t been paying attention because the last 75 years have shown that their methods won’t work.

For example, Hillary and Bernie plans to raise minimum wage and use a democratic socialism platform has been tried before by countries of similar or larger size. Let’s take Russia for example under the Bolsheviks, Lenin, Stalin. All these communism leaders installed a socialist economic system or state run economy. The Russians faced problems of shortages, starvation and to add insult to injury, genocide. In a similar fashion to what Sanders wants to do, Stalin also wanted to take down the rich people. Guess what happened, he certain took them out by killing them. State run economies just don’t work. You need capitalism because the market should decide. I think economically speaking, I would rather have some poor and disadvantaged over having many poor and disadvantaged.

Unfortunately, economics dictates that re-distribution through unnatural means leads to more distress and poor. In addition, the biggest and most irritating issue that of spending and debt. I would love to understand how printing money won’t lead to disaster. Also how will spending MONEY decrease our debt that was created by SPENDING money? In conclusion, I want to underline the point that economic intelligence is necessary in a good presidential candidate. History has shown us both good and bad ways to make an nation economically viable. We need to choose carefully otherwise face consequences not unlike economic unintelligent nations before us.

Thanks for reading! Sorry it was so long!