Mitt didn’t know how Ann’s manslaughter affected their family

Ann Romney tells of miscarriage – Tim Mak – POLITICO.com 

Mitt Romney, sitting alongside his wife, appeared taken aback by the story, leading CBS interviewer Scott Pelley to ask if he’d heard that story before.

“I hadn’t heard the story about Craig coming home from school that day and being so devastated,” said the presumptive GOP nominee. “I’m not surprised. He’s a very tender heart and a wonderful father today himself.”

As to the title…if abortion is murder…miscarriage is manslaughter. If this was a real person that died, as the Republicans want to change the law to say it was, there should be an investigation.

Was it irresponsible actions that led to the death? An absent father? My guess is that conservatives will whine more about the tone of this post than the obvious and impssible legal situations their own policies would create (of which the post title is one).

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The Silly Season of Political Paranoia (and a dose of something else)

It seems as if a certain political sentiment has fully metastasized into the form it will take for the next 7 months.  It goes something like this…as Krugman notes on point..

And it’s not just gas prices, of course. In fact, the conspiracy theories are proliferating so fast it’s hard to keep up. Thus, large numbers of Republicans — and we’re talking about important political figures, not random supporters — firmly believe that global warming is a gigantic hoax perpetrated by a global conspiracy involving thousands of scientists, not one of whom has broken the code of omertà. Meanwhile, others are attributing the recent improvement in economic news to a dastardly plot to withhold stimulus funds, releasing them just before the 2012 election. And let’s not even get into health reform.

Why is this happening? At least part of the answer must lie in the way right-wing media create an alternate reality. For example, did you hear about how the cost of Obamacare just doubled? It didn’t, but millions of Fox-viewers and Rush-listeners believe that it did. Naturally, people who constantly hear about the evil that liberals do are ready and willing to believe that everything bad is the result of a dastardly liberal plot. And these are the people who vote in Republican primaries.

But what about the broader electorate?

Now before you think any of this (or the many, many other examples) are hyperbolic statements about what is passing for “policy discussion” among the dedicated Republican primary voters…here’s an update on what they think is going on…

Seriously…that’s an official Santorum ad.  Wild stuff….BTW…DID YOU NOTICE HOW CRAZY THIS IS?

About :40 seconds in…with the Iranian Boogeyman on the screen…they cut in a shot of the President of the United Stated.

Headshot of Obama interspersed into video of Iranian President

That’s how craaaazy these folks are.  Don’t believe me yet?  Here’s another one, of a thousand, of other examples.

And one that more directly affects real people…

On Monday, the Republican dominated Tennessee Senate passed an anti-evolution bill by a vote of 24-8. The bill, known as HB 368, is sponsored by Republican Senator Bo Watson and “provides guidelines for teachers answering students’ questions about evolution, global warming and other scientific subjects,” according to Knox News,  ”The measure also guarantees that teachers will not be subject to discipline for engaging students in discussion of questions they raise, though Watson said the idea is to provide guidelines so that teachers will bring the discussion back to the subjects authorized for teaching in the curriculum approved by the state Board of Education.” The bill basically encourages teachers to present scientific weaknesses of “controversial” topics.

[full story]

It’s come to the point of people just flat out not believing what is happening….which while not completely abnormal in political season…has gotten so bad that basic math has become partisan politics.

Thus making rational cost benefit analysis of said policies (while factually true) completely irrelevant.

Beginning in January 2011, the payroll tax withheld from employee paychecks was temporarily reduced to 4.2 percentage points from 6.2 percentage points. The cut was scheduled to expire at the end of 2011, but Congress has continued it through the end of 2012.

My calculationslast year, based on the proposed cut of 3.1 percentage points, suggested that the payroll tax cut “could raise employment by at least a million, albeit the duration of job creation is related to how long the tax cut lasts.”

On a seasonally adjusted basis, payroll employment was 130.2 million at the end of 2010, just before the payroll tax cuts took effect. As of last month, payroll employment was up 2 percent, or 2.5 million, to 132.7 million.

[full story]

And dealing with a growing and more well understood problem that much more difficult…

One of the main changes is the inclusion of more data from the Arctic region, which has experienced one of the greatest levels of warming.

The amendments do not change the long-term trend, but the data now lists 2010, rather than 1998, as the warmest year on record.

The update is reported in the published in the Journal of Geophysical Research.

[full story]

And leading to some absolutely tragic decision making abilities…

It seems that this old lady believed many of the deliberate lies which were being put forward by the Fox News anchor, lies directed at President Obama and at his health care policy. She appears to have thought that if she had accepted medical care, following her fall, her medical information and her money would have been sent to Islamic extremists. This is of course completely false, but a reasonable deduction from the lies told by Fox News.

[full story]

Which happens while the system keeps chuggin’ along…

National income gained overall in 2010, but all of the gains were among the top 10 percent. Even within those 15.6 million households, the gains were extraordinarily concentrated among the super-rich, the top one percent of the top one percent.

[full story]

And paying the low inegrity-bright smile types to say whatever it takes to keep it coming…

In February, Common Cause wrote to House Majority Leader Eric Cantor, asking for an explanation about an apparently unreported $1,350 gift from the American Legislative Exchange Council (ALEC) in 2009. Cantor’s office immediately responded, claiming our inquiry was without foundation, but last week his office quietly amended his financial disclosures to include the gift from ALEC.

At that time, I wrote about Cantor’s failure to disclose:

‘ALEC, the so-called “free market, small government” lobby group underwritten by some of the nation’s largest corporations, reported in its tax filings for 2008 and 2009, making “cash grants” to the recipients of several annual awards. Common Cause has identified 22 legislators who received ALEC awards in those two years, including Rep. Cantor, who ALEC records indicate received $1,350 in 2009 as part of their Thomas Jefferson Freedom Award.’

Cantor responded within hours, saying no cash changed hands, but that he received a bust of Thomas Jefferson from ALEC, pictured above. But, under House Ethics Rules this type of award can only be received by a Member of Congress if it is disclosed, which Cantor did not do. This appears to be a clear ethics violation, and we have asked the Office of Congressional Ethics to investigate. Prompted by Common Cause, Cantor has now very quietly amended his 2009 Financial Disclosure Report to include the ALEC gift. He also amended his 2010 report to include another bust given to him by the Associated Builders and Contractors trade group. We had no idea about this second award, but now we do.

[full story]

Even as another does the math, and realizes that we simply cannot go on like this…

However, Dodd–Frank does not eradi- cate TBTF. Indeed, it is our view at the Dallas Fed that it may actually perpetuate an already dangerous trend of increasing banking industry concentration. More than half of banking industry assets are on the books of just five institutions. The top 10 banks now account for 61 percent of commercial banking assets, substantially more than the 26 percent of only 20 years ago; their combined assets equate to half of our nation’s GDP. Further, as Rosenblum argues in his essay, there are signs that Dodd– Frank’s complexity and opaqueness may evenbe working against the economic recovery. In addition to remaining a lingering threat to financial stability, these megabanks signifi- cantly hamper the Federal Reserve’s ability to properly conduct monetary policy.

They were a primary culprit in magnifying the financial crisis, and their presence continues to play an impor- tant role in prolonging our economic malaise.There are good reasons why this recovery has remained frustratingly slow compared with periods following previous recessions, and I believe it has very little to do with the Federal Reserve. Since the onset of the Great Recession, we have undertaken a number of initiatives— some orthodox, some not—to revive and kick-start the economy. As I like to say, we’ve filled the tank with plenty of cheap, high-octane gasoline. But as any mechanic can tell you, it takes more than just gas to propel a car.

It is imperative that we end TBTF. In my view, downsizing the behemoths over time into institutions that can be prudently managed and regulated across borders is the appropriate policy response. Only thencantheprocessof “creativedestruction”— which America has perfected and practiced with such effectiveness that it led our country to unprecedented economic achievement— work its wonders in the financial sector, just as it does elsewhere in our economy. Only then will we have a financial system fit and proper for serving as the lubricant for an economy as dynamic as that of the United States.

Read more: http://www.businessinsider.com/dallas-fed-calls-for-breakup-of-big-banks-2012-3#ixzz1qF2hXi7T

And so the desktop is clear…to watch the world for another couple weeks.

Bill Gates Mug Shot Silhouette in all Office Software

This one is pretty fun.  Ran into this blog post yesterday about the picture being in Sharepoint.

I said…hrrm…that looks familiar…just like that placeholder in Outlook…

And yep…it’s him…

Bill Gates Mug Shot in Outlook

Bill Gates Mug Shot in Outlook

For those that wonder how this whole thing started…

Bill Gates was arrested for speeding in Albuquerque. He frequently was caught speeding in his Porsche 911. That day he was driving along with Paul Allen. The bail was set at a thousand dollars. Bill Gates, although only 21, was very successful in his early years at Microsoft, and was immediately able to post bail from his wallet full of cash.

..hence the smile.

I’m sure we’ll find out if this got official approval at any point soon…but either way…I find it hilarious.   If anyone ever digs up a mugshot of RPN, you’ll find a nice big smile on that face as well.

7,000,000,000th Person Joins Earth, RPN gets older (link dump)

37 times around the Sun, now with 7,000,000,000 of my closest friends.   Thus we mark the year.

October 31, 2011

The U.N. estimates that the world’s population will pass the 7 billion mark on Monday.

Much of that growth has happened in Asia — in India and China. Those two countries have been among the world’s most populous for centuries. But a demographic shift is taking place as the countries have modernized and lowered their fertility rates. Now, the biggest growth is taking place in sub-Saharan Africa.

For all the actual problems the world faces, this is one that I think will largely moderate itself as more and more of humanity catches up to the present (in the 21st century, unless your political climate is noxious towards women, there are ample methods for taking control of one’s reproductive life).

Wage stats for 2010.  No surprise here…

Based on data in the table below, about 66.2 percent of wage earners had net compensation less than or equal to the $39,959.30 raw average wage. By definition, 50 percent of wage earners had net compensation less than or equal to the median wage, which is estimated to be $26,363.55 for 2010.

[full stats]

When the average is 50% higher than the  median it’s probably a situation where people are taking to the streets to protest and….oh.  And yes you read that right, half of wage earners earned less than $27K last year.  These are the folks every Republican candidate wants to *raise taxes* on (i.e. “expand the base”), while cutting them further for the wealthy.

Palestine goes for country-hood, U.S. promptly pulls funding (I hate this crap, the UN created Israel, but somehow it horrible to use the same mechanism to create Palestine).

PARIS (Reuters) – The United Nations’ cultural agency decided Monday to give the Palestinians full membership of the body, a vote that will boost their bid for recognition as a state at the United Nations.

UNESCO is the first U.N. agency the Palestinians have joined as a full member since President Mahmoud Abbas applied for full membership of the United Nations on September 23.

[full story]

–followed by–

The United States has announced it will stop its financial contributions to the United Nations Educational, Scientific and Cultural Organization (UNESCO) after the body admitted Palestine as a member on Monday.

“We were to have made a $60 million payment to UNESCO in November and we will not be making that payment,” said the US State Department’s spokeswoman, Victoria Nuland.

[full story]

This is another one of those things where the Obama administration is doing exactly what conservatives want them to do, but will get absolutely no credit whatsoever for doing it.   Indeed, this will likely be interpreted as “throwing Israel under the bus” when in reality what we are doing, once again, is “going to the mat for an unthankful ally who ignores our requests they stop violating the law“.

Just to get an idea of what crap goes on and gets called justice over there…

An Israeli court on Thursday threw out a lawsuit filed by a Palestinian family that lost two relatives after their home in the Gaza Strip was bombed during an Israel Defense Forces operation.

The Jerusalem District Court refused the family’s request for damages, ruling that the fatal 2006 bombing was a legitimate act of war.

Fatma Wahabe and her son Khaled were killed after a missile fire by an IDF assault helicopter hit their home in Khan Yunis, instead of the targeted vehicle carrying wanted Palestinian militants.

The court’s decision was based in part on an affidavit filed by the head of the Shin Bet security service’s department on Gaza, who defended the IDF operation as necessary “to prevent a clear, immediate, and present danger to public safety.”

“It was an initiated attack meant to strike a top terror operative based on solid intelligence, according to which he was about to attack Israeli citizens,” the judge said.

The plaintiffs were also ordered to pay NIS 25,000 in legal fees.

[full story]

I can’t imagine how someone occupying your city, killing your family, and charging you for the service could do anything but build strong bonds of fellowship.

Right Wing Pundit realizing GOP primacy choices are largely  a joke.

Great questions for anyone who wants to claim that Big Poverty caused the financial crisis of 2008.  One of the more disturbing aspects of the collapse of 2008 is that the people responsible have done a bang-up job of blaming everyone else for the collapse.   I’m guessing this is because they control most of the money and media, and therefore just get to propagate loads of self-affirming bullshit.   However, when you run into someone that claims it was the CRA (from ’94) that caused the crisis (in ’08), there’s a few good questions on that link to ask them.  (note: these are more technical economics questions, so it’s important to first ascertain if the person you are talking to has a basic understanding of how economics works.  If they are a Ron Paul supporter….just nod and back away).

Read this and then you’ll understand that cutting corporate tax rates won’t do a dang thing unless we cut them to negative numbers.   (and that’s  one of the “good” guys).  We need a corporate AMT, based on yearly reporting earnings, firm-wide.

Marco Rubio has been a’lyin about his origin story.  Whenever I see this guy, I always think it’s this guy.   Maybe it’s because when Rubio talks, it’s like he’s living in an imaginary Never Never Land

Canadians seems to have taking a liking to Canadians.  I can see why…who doesn’t like Canadians?

Smashing the Laffer Curve

This might very well be a long post (if not a series of posts turned into a quick book).

The target of this post is something called the “Laffer Curve”.   There’s a few different things this might refer to.  Let me lay out a basic level of understanding of this concept now, straight from the source…

If the existing tax rate is too high–in the “prohibitive range” shown above–then a tax-rate cut would result in increased tax revenues. The economic effect of the tax cut would outweigh the arithmetic effect of the tax cut.

Because tax cuts create an incentive to increase output, employment, and production, they also help balance the budget by reducing means-tested government expenditures. A faster-growing economy means lower unemployment and higher incomes, resulting in reduced unemployment benefits and other social welfare programs [hence lower spending -RPN].

[source…which will be referred to again]

If you would like, wikipedia is a good source of info on this as well as further reading.  The analysis you are about to read is not concerned so much with the theory, but the application and the results.

Over time, the idea of the Laffer Curve has evolved into a notion that “tax cuts pay for the themselves” and “raising taxes will only decrease revenue”.   There are a number of other popular myths and misconceptions dealing with taxes in the 21st Century United States, far too many to deal with today in this post.    One we will deal with in part two of this series is who is paying those taxes and how the application of the Laffer Curve has changed that dynamic.  However, that is beyond the scope of this initial piece.

Section I : The Perfect Lab

In the year 2000 (que Conan…)…the United States of America had a balanced budget.  I know, I know…this is hard to believe.   Hard to even conceive of at this point.  However, it was true.

Q: During the Clinton administration was the federal budget balanced? Was the federal deficit erased?

A: Yes to both questions, whether you count Social Security or not.

[source]

A couple terms to deal with real quick, “deficit” which is a yearly negative difference between revenue and spending, and “debt” which is  accumulated, usually counted on a per year basis as we’ll do below.  While it doesn’t seem particularly relevant as this point, such a thing as a “surplus” also exists.  A surplus is when revenue exceeds spending.  Surpluses are the only thing that can be used to pay down “debt”.

So in the United States, circa 2000, there existed the perfect “test case” for an economic theory dealing with the direct and raw stimulative power of tax cuts directed mainly at top earners.  We would be able to see, very clearly, whether or not “the economic effect of the tax cut would outweigh the arithmetic effect of the tax cut.”

IMPORTANT NOTE: For simplification purposes, the charts below DO NOT INCLUDE debt accumulated prior to 2000.  Back in the 20th Century (mostly the 80’s) the U.S. racked up $10,000,000,000,000 in debt.  We’re going to ignore that for the next little while (it became a custom in the 90’s, and for not horrible reasons).   In part 3 of this series we’ll tie the whole thing  together with unemployment [here’s a taste].

As math tends to do, the “arithmetic effect” on revenues was immediate.   Our next section will deal with the math that goes into the “arithmetic effect” (which BTW, is a euphemism for saying, “Duh, it’s obvious if you cut taxes you get less revenue.”)

So let’s start small and build from there.

Section II : The Little Equation

To be honest, there are many “equations” which figure into public accounting.  In this case the equations we’re talking about are the ones that governs the graphs below.  The first can be described simply as this…

A deficit (and it’s alter ego the “surplus”) is simply the difference (negative for deficits, positive for surplus) between the amount of revenue the government takes in and the amount of spending it puts out.

Part of the disconnect that is happening right now is we are seeing huge deficits, focusing solely on the “spending” side of the equation, and don’t seem to be largely aware how badly *revenues* have dropped off during the recession.

To simplify:  Revenues [R] – Spending [S]= Deficit(-)/Surplus(+) [I]

Those are the only numbers driving this first graph, spending, revenue and deficits.  In addition to the straight spending, revenue and deficit surplus numbers, we’ve also added to lines for change over time (in this case % per year), and one section for accumulated gross debt.

Here’s how the numbers came out.   In a moment we’ll looks a few choice events in the timeline, and the corresponding (general) effects in the graph.

Graph of Revenues, Spending, and Debt 2000-2010

Revenues, Spending, and Debt 2000-2010

What we see here is a *very* basic look at the economic situation in the United States in the 21st Century.   As indicated in the legend, we’ve set up Revenue as positive income, Spending as negative, and graphed the *cumulative* difference, in the this case “debt” in the black-fading-to-bright-red.

One thing which is on this chart you will not see quite so often on other charts are the wavy lines.   The blue wavy line is the Year 0ver Year (YoY) percent change in revenue.  That is…compared to the previous year, how much did it change?  Understanding the reason this line is so important brings us back to the definition of the Laffer Curve.  Recall:

If the existing tax rate is too high–in the “prohibitive range” shown above–then a tax-rate cut would result in increased tax revenues. The economic effect of the tax cut would outweigh the arithmetic effect of the tax cut.

The reason this stands as such a perfect lab example for testing this theory is that we had both a balanced budget (with a surplus, no less) in 2000, and then has massive tax cuts in both 2001 and and in 2003 (note: both these included specifically in their titles that they would create jobs and economic growth.  Their titles, however, have little to do with their effects).

What this graph indicates, and we’ll do a close-up below, is that tax cuts decimated revenue in 2001, 2002, and 2003.

Bush Tax Cuts Immediately Reduced Government Revenue

Bush Tax Cuts Immediately Reduced Government Revenue

As we’ll indicate in a moment, there is no larger contextual reason for this reduction outside of tax rate.  During each of these years, GDP went up.   The above chart indicates the “arithmetic effect” of tax cuts.  This is the basic idea that if you tax a smaller percentage of something, you get a smaller amount of that something (i.e. it’s “duh” math).

When many* point to as the “economic effect”  of tax cuts, they use the following cut out.

Coming up from the Bottom

Coming up from the Bottom

* who are trying to selectively use data to prove a point that doesn’t exist in the larger data set.

The problem with the above data is that it is *very* selective about what data it is representing.  We can’t even count the number of times we at RPN have seen opinion columns that claims “the Bush Cuts worked” and then selectively use the period 2003/4-2007.   When you pick the year with the *lowest revenue* and then start going from there, even if it’s a number of years *after* the tax cuts took revenue to that lowest point, there’s some honesty issues with those numbers.

Luckily we have another way to look at these numbers (as Ratios of GDP), and we get to measure the “arithmetic effect” of the tax cuts vs the “economic effect”.

 Section III : The Big Equation

Now that we have a base set of data, we are going to expand it back into the big equation.   In order to give it context, and not just freak everyone out with big numbers, we are going to show both revenue and spending as a % of GPD.   Here’s how that looks.

The Full Equation

Here we see both Spending and Revenue as a % of GDP

What this shows is a slow and somewhat steady growth in the overall U.S. economy over the last decade.  However, as the tax cuts are implemented, not even that level of steady economic growth is enough to slow the quick decline in revenue.

Revenue plummets due to tax cuts

Revenue plummets due to tax cuts.

Those next years, from 2003/4 through 2007/8 are the ones cited by supporters of this method of spurring economic growth.  Indeed, we do see a return to revenue growth (purple line), and it begins to catch up to steady spending (orange line).

Revenue begins to recover at a faster rate than spending

Revenue begins to recover at a faster rate than spending

The problem with this is that even with the favorable economic growth, steady spending patterns, and the “favorable tax rates” revenue still never quite manages to catch up.  And we still see that quickly reddening debt line.

So for the third time we look at the question, the data, and reach the conclusion.

The question:   Does the economic effect of the tax cut would outweigh the arithmetic effect of the tax cut?

The data: See graphs that should both have opened in new windows. 

The conclusion: As alluded to in the title and the next subject heading.

Section IV: Smashing the Laffer Curve

So now we bring the whole thing together, and point out what our analysis just indicated.

The revenues never catch up after falling so far behind, it didn't work

The revenues never catch up after falling so far behind, the Laffer Curve didn't work

The revenues never catch up after falling so far behind, even in our perfect laboratory, the Laffer Curve didn’t work.

Previous analysis has shown that taking into consideration *even more* favorable, longer term, economic conditions, the revenue will never catch up.

What we have here is a situation where the reality has match up to the basic math quite nicely.  Except for one thing…what happens when long term public policy is based on an economic fallacy?

Section V: The Second Great Economic Collapse.

We are going to try and wrap this up shortly.  Examining the reactions to, and the results of, the economic collapse that happened in September/October of 2008 are going to take another decade at least.   Hindsight, such as we’ve employed throughout this analysis, is incredibly accurate…one is simply looking at what happened and doing the math.

Foresight, on the other hand, and even shall we say “current sight” are much more fickle beasts.  One thing that can be very easily said, when looking at either graph, is that spending is less than half our problem.   Revenue, both in real terms and as a % of GPD, has hallen through the floor.

You’ll noticed that the only year, in all of those posted, where we had a real and actual reduction in spending was from 2009 to 2010, our current President’s first full fiscal year in office.  An office taken amidst a literal plethora of crises.  To claim this is indicative of anything beyond that simple fact is a tough argument to make.

We’ll see how that works out when more data is available.  There is more hindsight to consider at the moment.

Section VI: What the Laffer Curve Really Does

This part, for now, we’ll let Art Laffer answer himself.

From the original Heritage Foundation link.

The most controversial portion of Reagan’s tax revolution was reducing the highest marginal income tax rate from 70 percent (when he took office in 1981) to 28 percent in 1988. However, Internal Revenue Service data reveal that tax collections from the wealthy, as measured by personal income taxes paid by top percentile earners, increased between 1980 and 1988–despite significantly lower tax rates (See Table 8).

Table 8

Table 8 Which shows how the rich got richer

Table 8 Which shows how the rich got richer by paying a higher percentage of total income taxes

Here’s the thing that has misguided nearly 30 years of public policy.  Table 8.   What Art Laffer neglects to mention in that description of this chart are the following words, “as a percentage of total income.”

That is, what the data indicates (and has for nearly 30 years of this policy) is that “tax collections from the wealthy, when measured as a ratio of all income taxes paid, by top percentile earners, increased between 1980 and 1988–despite significantly lower tax rates (See Table 8).”

So despite having lower tax rates, the highest income earners still took in a higher percentage of all income, hence paying a higher percentage of total taxes.  The above graph is doubly misleading, as it consistently recounts the same people, over and over again, to give the impression that more actual money is being paid, not a higher ratio.   Indeed, in many of these years, much like after the Bush tax cuts, overall revenue went down.

What went up was how much, as a ratio, was earned by the top X %.

Final note on Art Laffer’s Table 8….it doesn’t include, anywhere, the bottom 50% of AGI.  Each one of those columns recounts the top 1%, with the final column recounting every single one to the left of it.  Were I to grade the chart on intellectual honesty, it would fail.   It is not saying what he is saying it says.  [NOTE: Illustrating this graphically is going to be the focus of Part II]

Quick note on where the Laffer Curve came from…

As recounted by Wanniski (associate editor of The Wall Street Journal at the time), in December 1974, he had dinner with me [Arthur Laffer] (then professor at the University of Chicago), Donald Rumsfeld (Chief of Staff to President Gerald Ford), and Dick Cheney (Rumsfeld’s deputy and my former classmate at Yale) at the Two Continents Restaurant at the Washington Hotel in Washington, D.C. While discussing President Ford’s “WIN” (Whip Inflation Now) proposal for tax increases, I supposedly grabbed my napkin and a pen and sketched a curve on the napkin illustrating the trade-off between tax rates and tax revenues. Wanniski named the trade-off “The Laffer Curve.”

At the time this happened, RPN was one month old.  This concept, sketched on a napkin, has been driving public policy in my country MY ENTIRE LIFE.

We guarantee you, we swear on it, Excel is faaaaaaaaar better at graphing numbers and doing economic analysis than any bar napkin.   Especially in hindsight.

CONCLUSION:

TL:DR, Applying “the Laffer Curve” cannot increase revenue unless current tax rates are north of 70-80%.  Oh, and it’s why we’ve run up 13 of the 15 trillion $ we owe.

—-


And that’s the question all of you will constantly ask, but never answer…

Bachmann, Perry seek advantage as Pawlenty exits GOP race – latimes.com http://www.latimes.com/news/politics/la-pn-gop-pawlenty-20110814,0,4998075.story?track=rss

Reprising a line that Pawlenty had often used on the campaign trail, Bachmann noted that she is from Minnesota: “It’s not a conservative state; it’s more of a liberal state—”

“But a conservative district,” Crowley interrupted.

“It’s a swing district and it’s a district that elected Gov. Jesse Ventura, and so I’ve been able to attract a lot of people to vote for me who are Democrats and independents,” Bachmann said.

“That’s what we have to do. This won’t be just a conservative election, this is really going to be an economics election.

People will want to know who can turn the country around; that will be the big question.”

Here’s the thing, ‘Stop Obama’ might work, and people might see that as a coherent policy position, at Tea Party Rallies…but everyone else thinks you are quite crazy.

Take a loooong look in the mirror Republicans, this is the face of your party.

heeeeeeeres-Bachmann

I’m going to keep looking for some sort of concrete policy suggestions from these folks, but I do consider it something of a  fool’s errand.  Interesting times, indeed.

UPDATE: Here’s the results of the Iowa Straw Poll….

Bachmann took first place Saturday in the straw poll, with 28 percent of the nearly 17,000 votes cast. That was enough to beat close challenger Rep. Ron Paul, R-Texas, who finished with 27 percent of the vote.

Former Minnesota Gov. Tim Pawlenty finished a distant third at 13 percent, more than 2,500 votes behind Bachmann, leading him to drop out of the race. Bachmann wished Pawlenty well, saying he had been a “very good competitor.”

[full post]

I’m pretty sure Rick Perry can outcrazy that.  Let’s get it on!!!

HARLESTON, S.C. — Gov. Rick Perry of Texas announced Saturday that he was running for president, declaring it was “time to get America working again” as he sought to offer the Republican Party a candidate who appeals to both fiscal and social conservatives.

[full story]

I’m totally cool with this, AS LONG AS HE RESIGNS AS MY GOVERNOR FIRST!   I really don’t want to be governed by a guy that lost to Michelle Bachmann in any type of poll, straw or otherwise.

BTW, I would like to see a compare and contrast on the hair-styling prowess of Rick Perry, Mitt Romney, and Jon Huntsman.  *That* is a tough one to call.

Basic Economic Math for U.S. Americans (re: Taxes, Revenues, Debts, Deficits, and Defaults)

Remember when you were in the seventh, or maybe eight grade, and your teacher came in and said you were going to learn something called “Algebra”?   Remember how you were all like, “What could I possibly ever need to know this for?!  I’m never going to need to know this stuff!”.

Guess what?  This week is that week.  This is why you need to know this stuff.

We have some fairly important decisions to make in the near future as U.S. Americans on the direction our country needs to take.  I’m sure many of you have divergent opinions on what that direction is, or what we need to do to get there.  So do I.  This post isn’t about that.  This post is about math.  Basic economic math.

Without having this foundation in verifiable, repeatable reality (1+1 always equals 2 in basic math), it is difficult to build a framework of understanding for large and complex systems.  If you don’t know how much of something something else is, or if it’s becoming smaller or larger relative to that thing, it’s hard to make important decisions regarding how you would like things to change (and how to functionally make that happen).

I’ve touched on this subject before.  I think it is fundamental to the disconnect we are now experiencing in this country.  We suck at math.    So without further ado…let’s define terms.

WHAT DO YOU MEAN BY THAT WORD?!

The two most important numbers in the debt equation are the Debt [D] and GPD [GDP].   Debt is *numerator*.  GPD is the *denominator*.   This gives us a debt-to-GDP ratio.   D/GDP = Debt Ratio.

The largely agreed upon goal for the U.S. economy, that is considered “stable” by pretty much everyone, is a 50-60% Debt to GPD ratio.  What this means is that at any given time, we are carrying a debt load that is slightly larger than one-half (.6 or 60%) of our yearly earning power.    Countries in such a balanced situation to do a few things easily…one, they can borrow quickly and cheaply to deal with crises; two, they can quickly pay down debt if need be to smooth out boom/bush business cycles and three, they aren’t as exposed to downturns in others markets (as opposed to a country with no debt that instead uses a “sovereign wealth fund“).

So…now we have the main component of this this quation…the D/GPD ratio.

You have probably heard a LOT a about “spending” over the past few months, and how it is “out of control”.   You may have even seen some folks cite *yearly deficits* as evidence that “spending is out of control.”

A deficit (and it’s alter ego the “surplus”) is simply the difference (negative for deficits, positive for surplus) between the amount of revenue the government takes in and the amount of spending it puts out.

Part of the disconnect that is happening right now is we are seeing huge deficits, focusing solely on the “spending” side of the equation, and don’t seem to be largely aware how badly *revenues* have dropped off during the recession.

To simplify:  Revenues [R] – Spending [S]= Deficit(-)/Surplus(+) [I]

HOW DO ALL THESE THINGS WORK TOGETHER?!

Remember how I mentioned how there would be Algebra?   Here’s where it all comes together…..(and perhaps, can all fall apart).

There are two final factors that need to be addressed before we can get a final equation that captures the situation.  The are interest rate (i) and growth (G).   Interest, in this case, is interest on our debt.   Growth, in this case, is the change in GDP.

This gives us a Debt-to-GPD ratio that looks like this:

(D+I)*i/GPD*G = Debt-to-GPD Ratio

Which read as  “Debt (D) plus income (I) times interest rate (i) divided by GPD times Growth.

Notice that last equation.  We’ve been hammered by folks that this whole problem is caused by a single thing *spending*.   However, when we look at the whole forest instead of that one tree, we see that spending is a part of the annual deficit/surplus which changes the debt which is the divided by GPD that has been multiplied by the amount of growth (both positive or negative).

When someone says spending “is the whole problem”, they are lying to you through omission.    The deficit/surplus isn’t solely created by spending, it is the *difference between spending and revenues*.     As I’ll illustrate in the next segment of this piece, a good portion of recent huge deficits have been created by corresponding huge drops in revenue.

When you understand that “spending” is one of that largest factors in GROWTH, you should start to wonder about what the point of cutting spending, and hampering growth, is going to do to *help* our overall fiscal situation (the GDP-to-Debt Ratio).

Cutting spending during a recession is like taking the foot off the gas and declaring, “We’ll coast up this hill!”

Coming in the next Part…

FREQUENTLY ASKED QUESTIONS ABOUT RECENT U.S. AMERICAN HISTORY BY U.S. AMERICANS?! (these are actual responses to actual questions I’ve answered over the past few days…hopefully this covers yours as well)

What Happens When I Get Really Angry

This is probably just a coincidence, but I realized my frustration with the current debt ceiling debate, which had been building for months and finally bubbled over the past week or so, has had some severe consequences.  Sorry about that.

The National Oceanic and Atmospheric Administration, has put together this animation of the phenomenon with their quickly dwindling funds.   There will come a time where we remember, as Americans, when our government was capable of doing such things (and back when we had, I shit you not, “space shuttles”.  This was all back before the Tea Party bankrupted the country…my…those were the days) routinely.

Here’s the gist of what’s going on in response to my annoyance. (and check out the animation, it’s integral to my argument presented below). 

 

Heat Wave Sweeps Across the U.S.
A shroud of high pressure has taken a foot-hold over the U.S. from the Plains to the Northeast, and with it has brought temperatures well into the 90’s and 100’s for half of the country. This animation shows the predicted daily high temperatures from NOAA’s high resolution North American Model (NAM) from July 13-21, 2011.

As evidence that it’s me causing this, well, I offer to you the same amount of evidence as is currently required for a “solid, fact-based argument” in an Idiocracy like mine…coincidence.

I am angry.  I live in Dallas, TX.  It looks like, if you watch the animation….the heat is centered on, and perhaps even emanating from, Dallas.

‘Course, could be all the bullshit around here…which the proximate cause of my anger….and the heat ain’t helpin’ neither…

I dunno…it’s hot…not stopping…cool animation.  Figured I’d link it both figuratively and literally to my personal interpretation of reality, that’s what blogs are for, after all.

Stay frosty, my friends.

And pass the damn debt ceiling.   I’ll cool it off if you do.  Promise.

UPDATE: Videoe evidence…

* and on a 100 point scale no less.

Stephen Colbert Effectively Kills Any Limits (or need to disclose) Direct Campaign Contributions by Corporations to PACs

Well, didn’t this turn out funny…

The Federal Election Commission has officially approved Stephen Colbert’s SuperPAC, allowing him to create independent advertisements and raise unlimited campaign donations in the 2012 election cycle.

Colbert’s quest to form a political action committee began in March, after lampooning an ad for Tim Pawlenty’s Freedom First PAC, with the satirical slogan “Making a better tomorrow, tomorrow.” Every time he covered the latest on his PAC, Colbert brought Trevor Potter, former FEC chairman, on the program to explain campaign finance law to him and his audience. When Viacom initially expressed concern that Colbert could cause unnecessary financial scrutiny, they sent him a letter asking him to stop. Luckily for Colbert, he discovered a loophole that allowed him to set up a Super PAC (groups that have existed since the Citizens United ruling), and filed a formal request with the FEC for a media exemption in May.

Essentially what this allows is what is already happening…huge media companies can contribute millions in free air time and ads and publicity to candidates without ever having to account for that in any way shape or form.

Granting the exemption would produce what the reformers called “a sweeping and damaging impact on disclosure laws,” which would allow media companies to fund employees’ political activities anonymously. Politicians who are employed by media companies could use their television shows as platforms to raise unlimited funds for their PACs, without having to disclose it, the reform groups said.

Additionally, those media companies would be allowed to anonymously pay for independent expenditure ads for those PACs, which could then be played on other networks and shows, as well as online. Media companies (Including Fox News, which employs several political figures associated with super PACs) could fund the administrative costs of their employees’ PACs, without having to disclose that donation.

“Mr. Colbert’s ultimate goals here may be comedic,” the reformers wrote. “But the commission should not be the straight man at the expense of the law.”

Which is to say, it makes what News Corp does every day officially all cool.

Did a short video about this the other day…we need to just cut to the chase  officially give corporations the full rights of “citizens”, in particular voting rights.

BTW, the FEC also made it pretty obvious they already belonged in joke territory with their other ruling this week…

Federal Election Commission attorneys sought a full-scale investigation of former Republican Senate candidate Christine O’Donnell, but the three GOP commissioners on the bipartisan commission blocked the probe, newly released FEC documents show.

FEC attorneys “found reason to believe” that O’Donnell, Tea Party Express and Our Country Deserves Better PAC improperly coordinated contributions and expenditures prior to the 2010 Senate GOP primary, where O’Donnell pulled a surprising upset on longtime Rep. Mike Castle. The FEC attorneys wanted to move ahead with an investigation into the case, including subpoenas.

The complaint against O’Donnell was filed by the Delaware Republican Party, which backed Castle in the GOP primary.

But the three GOP commissioners on the FEC —- Don McGahn, Caroline Hunter and Matthew Petersen — refused to support any O’Donnell investigation, thereby blocking it. There must be at least four votes on the six-member, bipartisan panel to approve any FEC action.The three Democrats on the FEC voted to move ahead with the O’Donnell probe.

O’Donnell is still under investigation by the FBI over allegations that she used campaign funds for personal expenses, including using donated funds to pay her rent. O’Donnell strongly denies the allegations.

UPDATE: The FEC is a super-joke, it turns out….peep this.

[Raising unlimited funds] was the declared approach of the Republican Super PAC, a committee formed by Indiana attorney James Bopp, a strenuous opponent of campaign finance restrictions. Bopp’s PAC, created in May, planned to invite elected officials and candidates to raise unlimited money for the group, with the understanding those funds could then be earmarked to campaigns on behalf of those who solicited the funds.

So the FEC said no, you can’t do that…but take a look at what it is you can’t do…

In its opinion Thursday, approved by a 6-0 vote, the FEC said candidates, elected officials and national party committees can only solicit an individual maximum of $5,000 for a super PAC, the same limit an individual can make to any single political action committee.

Key word bolded.   The guy fighting for this knows exactly what *that* means…

As for Republican Super PAC’s plans, Bopp is undeterred. He pronounced the ruling as “exactly what we wanted.”

“There’s approval for candidates and political party officials to solicit for super PACs,” Bopp said. “They are going to praise and endorse the super PAC they are soliciting for. “

Bopp said any promotion of the PAC by a candidate or officeholder would have a disclaimer that the request was only for up to $5,000 for individuals.

“But donors are free to contribute all they want,” he said. “This disclaimer is completely meaningless.”

Proposed 28th Amendment: Privacy

Proposed 28th Amendment: The Government of the United States shall make no law that infringes upon the right of human citizens of this country to privacy.  If information about a citizen is exchanged, that citizen should be informed and have the right to consent or veto, such exchange.  If monies are exchanged for information regarding a citizen, that citizen is entitled to all proceeds exchanged without informed consent.

I think it’s time we add something like to the Constitution.  Short, sweet, and done is the right way.  The Constitution isn’t about the Government granting rights to citizens, it’s about forbidding the Government from taking them away. 

Currently we have something called the “Patriot Act”.   One of the (many, many, many, many, many) things that it does is allow our Government to purchase private information regarding the habits, activities, relationships, etc. about a citizen.  Pretty much everything.  All attached to one number.   The Government *buys* that information, about you, with your money. 

This, to me, is all sorts of wrong.    It needs to be cut off at the knees.   We need to update the Constitution.

Here’s how we do it….[note: this is a part of the Constitution itself.  It was made to be updated to reflect a changing reality, that’s how cool it is.]

The Congress, whenever two thirds of both Houses shall deem it necessary [1], shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States [2], shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress.

Steps:

1. Contact your Federal Congressmen.  Both your House representative and your Senator.  You need both of them.  Tell them the exact text above.  Tell ’em you want it, now!

2. Contact your State Congressmen.  Both your State House representative and your State Senator (you probably have both) tell them to call a “Constitutional Convention” (use those words) to vote on the 28th Amendment. 

3. ??*

4.  Profit/Privacy/Freedom.

——-

* Hey, I’ll be honest, never done this before.  But we need to do it, stat.  I think it can be done.  If we keep it simple, focused (laser-like), and understand that, yes, this will disrupt quite a few industries and sketchy laws, and yes, THAT’S THE DANG POINT!

Ron Paul figures fifth time is the charm…

image

…he’s still wrong.

The news:

Ron Paul, the patriarch of the libertarian stream in GOP politics, will announce on Tuesday that he is forming a presidential exploratory committee, taking a step to join the Republican nomination sweepstakes.

Paul, who will be 76 in August, has served about 20 years in the House representing districts in Texas, most recently the 14th, which includes Galveston. He is a doctor by training, having served as a flight surgeon in the Air Force and in private practice as a gynecologist.

Ronald Reagan, BTW, was old as heck in office, had Alzheimer’s and was still much younger than Paul when running.

I’m thinking being well beyond mandatory retirement age is probably a detriment to have the new, fresh ideas we need to deal with the 21st century.    Ron Paul’s devotees are some of the funniest, most passionate, and least informed (with actual facts…they’ve got TONS of other data) people you meet.  The majority is his strongest supporters are truthers, birthers, and anti-gubmint nuts, all of which seem to love Paul’s only solution to every single societal problem: less government.

The sad thing about this ideology is that a) it’s utterly inflexible and b) reality has no bearing on it (which are kinda the same thing).   Paul is one those people who actively campaign on how government can’t do anything right, and then does his best to make that come true once elected.

He’s not a serious candidate, at least if you consider some hope of winning a necessity for “seriousness” but given our media’s ability to monetize stupidity (see: Trump, Donald), he’ll stick around for a while and his supporters will lament that his lack of support is because  no one really knows what is going on and they are all just sheeple.

The rest of us know that’s exactly why  he gets so little popular support and such huge passionate support.

CEOs tell Arizona; “Your constant derp is hurting business”

Dozens of major Arizona employers are urging state lawmakers to not pass additional legislation targeting illegal immigration, saying it would damage the economy and tourism industry.

document The CEOs’ letter to Russell Pearce

A letter signed by CEOs of major employers and several business and civic groups says Arizona should be pushing for federal action on immigration and border issues.

via CEOs urge Arizona to forgo immigration measures.

This is pretty much exactly what I predicted would happen. When you have a bunch of old white people (the Tea Party) pushing for harsher and harsher legislation against young brown people, folks who actually run the numbers realize something….old people don’t contribute much to the economy (although they do take quite a bit) …

Federal spending on the average person 65 or older will rise from nearly $17,700 in 2000 to more than $21,100 in 2010 (in constant dollars, which exclude the effects of inflation).

Federal spending per child will increase from about $2,100 in 2000 to about $2,500 in 2010 (or $2,500 and $3,000, respectively, if spending on parents that is solely attributable to having children is included).

[s0urce pdf]

The sad thing about this (for those who thought it was nice to see more pushback against the idiocy) is that the Chamber of Commerce is only asking Arizona to step back because the race-based wing of the Republican party is already stepping up to the plate and, literally, re-defining what makes a human an American.

We agree with you that our borders must be protected first, and now. We also believe that market-driven immigration policies can and should be developed by the federal government that will sustain America’s status as a magnet for the world’s most talented and hard-working people and preserve our ability to compete in the global economy.

If the Legislature believes it is worthwhile to debate the question of citizenship, we believe that debate is best held in the U.S. Congress. Already, Senators David Vitter of Louisiana and Rand Paul of Kentucky have introduced legislation aimed at amending the 14th Amendment to deny “birthright citizenship” to those born to individuals living in the U.S. illegally. Iowa Rep. Steve King has introduced similar legislation in the U.S. House.

[full letter from the CEOs]

Ultimately though, young brown people are cute, cuddly, the future, and people don’t like to see them tread upon (especially old rich brown people).  I see this ending pretty much one way, it’s just a matter of how much kicking and screaming goes along with it.