This is interesting in that millionaires are the source of all our problems according to Obama and his minions - all we have to do is tax these people out of existence and all will be well. Who knew it would be so easy to solve our collective financial problems?
Who Are America's Millionaires?
Source: Scott Hodge, "Who Are America's Millionaires?" Tax Foundation, June 15, 2012.
There is a serious ongoing political debate over the tax rates paid by millionaires. Some say the tax rates paid by wealthy Americans are not progressive enough, while others argue that the top rate should be lowered while overhauling the tax code. Neither side of this debate, however, has made any attempt to provide a basic profile of who these taxpayers are, says Scott A. Hodge, president of the Tax Foundation.
In response to this dearth of investigation, the Tax Foundation has used past tax returns to create a profile of America's millionaires: marital status, education, forms of income and other factors.
•While just 40 percent of the 140 million tax returns filed in 2009 represented married couples, the vast majority of millionaire tax returns (86 percent) were filed by married couples.
•Given that income tends to rise with age, it is not surprising that in 2009, 80 percent of millionaires were older than age 45, and 46 percent of all millionaires were older than age 55.
High-income earners are typically well-educated: among those making $200,000 or more in 2010, 78 percent had a bachelor's degree or more while only 9 percent had a high school degree or less.
Among the most interesting findings, however, are first, that millionaire status is fleeting, and second, that millionaires pay far more than a proportional share of the nation's taxes.
•During the nine-year period between 1997 and 2007, about 675,000 taxpayers earned over a $1 million for at least one year.
•Of these taxpayers, 50 percent (about 338,000 taxpayers) were millionaires for only one year, while another 15 percent were millionaires for only two years.
•By contrast, just 6 percent (38,000 taxpayers) remained a millionaire in all nine years.
As a group, millionaires have seen a considerable amount of volatility in their incomes over the past decade but have consistently borne a substantial share of the overall income tax burden relative to their incomes.
•Millionaires' share of total adjusted gross income (AGI) in 2001 was approximately 9 percent of total AGI, which grew to 16 percent in 2007 and fell to 10 percent by 2010.
•During that same period, the share of income taxes paid by millionaires was roughly twice their share of total AGI.
Monday, July 09, 2012
Saturday, July 07, 2012
Environmentalists Treathened by Genetic Engineering
Interesting detail here is why the environmentalist and antiglobalizationist want to stop these new plant varieties? Maybe they see this as a threat to their ability to control populations that are no longer starving.
The Use and Abuse of Science in Policymaking
Source: Henry Miller, "The Use and Abuse of Science in Policymaking," Regulation Magazine, Summer 2012.
The modern techniques of genetic engineering offer plant breeders the tools to make old crop plants do spectacular new things. In the United States and two dozen other countries, farmers are using genetically engineered crop varieties to produce higher yields with lower inputs and reduced environmental impact, says Henry I. Miller, the Robert Wesson Fellow in Scientific Philosophy and Public Policy at the Hoover Institution.
However, environmental and anti-globalization organizations around the world are rallying to ensure that genetically modified crops remain mired in regulations that will prevent their public consumption. This campaign persists despite the protests of the entire scientific community, which has banded together to trumpet the lack of danger posed by genetically engineers organisms.
•Central to the argument of the scientific community is that genetic engineering is not a new process: classic methods have existed for hundreds of years.
•Even the more modern modes of gene splicing have existed for decades, and no persistent malevolent outcomes have been measured that are inherent to the process.
•Moving forward, then, various research arms of the scientific community have urged detractors to judge crops based on their characteristics and not based on their methods of creation.
In 1989, the National Research Council, the research arm of the National Academy of Sciences, commissioned academic experts to perform an extensive analysis of potential harms of the crops. They arrived at the following conclusions:
•No conceptual distinction exists between genetic modification of plants and microorganisms by classical methods or by molecular techniques that modify DNA and transfer genes.
•Crops modified by molecular and cellular methods should pose risks no different from those modified by classical genetic methods for similar traits.
•If anything, because the molecular methods are more specific, users of these methods will be more certain about the traits they introduce into the plants.
Further, this lack of harm is accompanied by the potential to do enormous good for the world's malnourished population. Golden Rice, so named because of its comparatively yellowish color, is among those crops that would offer incredible health benefits: it has been genetically engineered to bring large amounts of vitamin A to the millions who die every year for lack of it.
The Use and Abuse of Science in Policymaking
Source: Henry Miller, "The Use and Abuse of Science in Policymaking," Regulation Magazine, Summer 2012.
The modern techniques of genetic engineering offer plant breeders the tools to make old crop plants do spectacular new things. In the United States and two dozen other countries, farmers are using genetically engineered crop varieties to produce higher yields with lower inputs and reduced environmental impact, says Henry I. Miller, the Robert Wesson Fellow in Scientific Philosophy and Public Policy at the Hoover Institution.
However, environmental and anti-globalization organizations around the world are rallying to ensure that genetically modified crops remain mired in regulations that will prevent their public consumption. This campaign persists despite the protests of the entire scientific community, which has banded together to trumpet the lack of danger posed by genetically engineers organisms.
•Central to the argument of the scientific community is that genetic engineering is not a new process: classic methods have existed for hundreds of years.
•Even the more modern modes of gene splicing have existed for decades, and no persistent malevolent outcomes have been measured that are inherent to the process.
•Moving forward, then, various research arms of the scientific community have urged detractors to judge crops based on their characteristics and not based on their methods of creation.
In 1989, the National Research Council, the research arm of the National Academy of Sciences, commissioned academic experts to perform an extensive analysis of potential harms of the crops. They arrived at the following conclusions:
•No conceptual distinction exists between genetic modification of plants and microorganisms by classical methods or by molecular techniques that modify DNA and transfer genes.
•Crops modified by molecular and cellular methods should pose risks no different from those modified by classical genetic methods for similar traits.
•If anything, because the molecular methods are more specific, users of these methods will be more certain about the traits they introduce into the plants.
Further, this lack of harm is accompanied by the potential to do enormous good for the world's malnourished population. Golden Rice, so named because of its comparatively yellowish color, is among those crops that would offer incredible health benefits: it has been genetically engineered to bring large amounts of vitamin A to the millions who die every year for lack of it.
Regulation On Nonresident Aliens Very Costly
And you thought this president was standing tall for the small guy, guess again. This is just one more screw up by the Obama team and believe there are many more that are already in place ready to bring down the country.
Hey Barack, your plan to "fundamentally" change the country is working. This is what we need more of so our future will be same as it is for the Sudanese.
The Costliest Regulation You've Never Heard Of
Source: Ike Brannon and Sam Batkins, "The Costliest Regulation You've Never Heard Of," The American, June 21, 2012.
One of the costliest regulations to come down the pike of late has nearly managed to escape detection. Earlier this year, the Treasury Department published its "Guidance on Reporting Interest Paid to Nonresident Aliens," which would require banks to report to the Internal Revenue Service the amount of interest they pay to nonresident aliens (NRAs) with a U.S. bank account, say Ike Brannon, director of economic policy, and Sam Batkins, director of regulatory policy, at the American Action Forum.
In assessing the economic consequences of such a regulation, department officials suggested that they would be negligible, pointing out that the regulation requires only minutes of work per NRA.
However, Jay Cochran, an economist at George Mason University, found in 2002 that NRAs respond to such reporting requirements by withdrawing deposits from American banks. Regulators failed to account for this phenomenon, and consequently underestimated the cost of their regulation.
•According to a 2011 Bureau of Economic Analysis report, over $3.7 trillion of the money invested in American banks is deposited by NRAs.
•When Cochran arrived at his conclusion, the bill under consideration would have imposed additional reporting requirements much less stringent than those being considered today.
•Nevertheless, he estimated that the new rules would result in capital flight of $100 billion.
•Given that the new requirements are significantly more pervasive than those in the original study, estimates of $200 billion to $300 billion in capital flight are realistic.
That NRAs would withdraw these enormous sums from American banks would eat directly into their profits by reducing the total loanable funds that they have at their disposal.
•Our fractional-reserve banking system means that one dollar of deposits supports multiple loans throughout the economy.
•So the withdrawal of $200 billion to $300 billion in deposits would result in a diminution of total loans in the economy of somewhere in the ballpark of $1.5 trillion to $2 trillion.
•This loss in loan activity would result in bank losses between $10 billion and $15 billion.
•Furthermore, these losses would be concentrated among a relatively small number of banks, particularly those in states with large populations of immigrants.
Hey Barack, your plan to "fundamentally" change the country is working. This is what we need more of so our future will be same as it is for the Sudanese.
The Costliest Regulation You've Never Heard Of
Source: Ike Brannon and Sam Batkins, "The Costliest Regulation You've Never Heard Of," The American, June 21, 2012.
One of the costliest regulations to come down the pike of late has nearly managed to escape detection. Earlier this year, the Treasury Department published its "Guidance on Reporting Interest Paid to Nonresident Aliens," which would require banks to report to the Internal Revenue Service the amount of interest they pay to nonresident aliens (NRAs) with a U.S. bank account, say Ike Brannon, director of economic policy, and Sam Batkins, director of regulatory policy, at the American Action Forum.
In assessing the economic consequences of such a regulation, department officials suggested that they would be negligible, pointing out that the regulation requires only minutes of work per NRA.
However, Jay Cochran, an economist at George Mason University, found in 2002 that NRAs respond to such reporting requirements by withdrawing deposits from American banks. Regulators failed to account for this phenomenon, and consequently underestimated the cost of their regulation.
•According to a 2011 Bureau of Economic Analysis report, over $3.7 trillion of the money invested in American banks is deposited by NRAs.
•When Cochran arrived at his conclusion, the bill under consideration would have imposed additional reporting requirements much less stringent than those being considered today.
•Nevertheless, he estimated that the new rules would result in capital flight of $100 billion.
•Given that the new requirements are significantly more pervasive than those in the original study, estimates of $200 billion to $300 billion in capital flight are realistic.
That NRAs would withdraw these enormous sums from American banks would eat directly into their profits by reducing the total loanable funds that they have at their disposal.
•Our fractional-reserve banking system means that one dollar of deposits supports multiple loans throughout the economy.
•So the withdrawal of $200 billion to $300 billion in deposits would result in a diminution of total loans in the economy of somewhere in the ballpark of $1.5 trillion to $2 trillion.
•This loss in loan activity would result in bank losses between $10 billion and $15 billion.
•Furthermore, these losses would be concentrated among a relatively small number of banks, particularly those in states with large populations of immigrants.
Friday, July 06, 2012
California's Green Mandates Are Financial Suicide
This is just one more environmental demand on the state of California that will pound one the last nails in it's coffin. This state is so far in debt in so many ways and to demand this mandate be the law of the land is insane. Is it just ignorance or something far worse?
I have no idea who these people are and what they are using for common sense. They are headed over the financial cliff and what do they do, increase the speed. suicide
California's Electric Vehicle Fetish
Source: Kenneth P. Green, "California's EV Fetish," Environmental Trends, June 2012.
Despite a long history of failure for electric cars, regulators with dreams of an electric car future have never lost enthusiasm. Particularly in California, supporters of the technology oversaw the enactment of a mandated adoption of all-electric cars back in 1990. Named the "Zero-Emission Vehicle" (ZEV) mandate, the law essentially set benchmarks for auto manufacturers to mass produce electric vehicles, says Kenneth P. Green, a senior fellow at the Pacific Research Institute.
•Technically, ZEV merely set a performance standard for vehicles operating in the state by capping emissions at a specific level (zero).
•Thus, though the bill was sold as an environmental regulation limiting emissions, it was essentially a legal mandate for the creation of vehicles with no emissions (that is, electric vehicles).
•The mandate required that by 1998, 2 percent of the vehicles sold in the state by large automakers had to be zero-emission vehicles.
•That mandate was set to increase to 5 percent of vehicle sales by 2001, and 10 percent by 2003.
Notably, because the technology that would allow automakers to fulfill this requirement repeatedly failed to surface, standards were routinely relaxed and timetables extended. The final mandate looked far different from the original: at least 15.4 percent of all cars sold must be either fully electric, a plug-in hybrid or powered by a hydrogen fuel cell by 2025.
One of the reasons that electric car production has lagged is because the models are more expensive than their combustion-engine counterparts. Further, market demand has lagged behind state mandates, in large part because of the hefty price tag for the cars.
•Though originally billed at $30,000, the eventual cost of the Chevy Volt rose to nearly $40,000.
•The Nissan Leaf, with a limited range of about 73 miles per charge, sells for about $35,000.
•Furthermore, because they require more expensive parts and necessitate specialized repair work, electric vehicles typically demand a higher insurance premium.
•These additional charges dampen market demand, regardless of government interventions.
Finally, and perhaps most importantly, it remains up for debate whether electric vehicles offer any environmental benefit. Because the electricity necessary to power them comes from a variety of emissions-producing sources, including coal-fired power plants, electric vehicles may on the whole offer no advantage in terms of emissions.
I have no idea who these people are and what they are using for common sense. They are headed over the financial cliff and what do they do, increase the speed. suicide
California's Electric Vehicle Fetish
Source: Kenneth P. Green, "California's EV Fetish," Environmental Trends, June 2012.
Despite a long history of failure for electric cars, regulators with dreams of an electric car future have never lost enthusiasm. Particularly in California, supporters of the technology oversaw the enactment of a mandated adoption of all-electric cars back in 1990. Named the "Zero-Emission Vehicle" (ZEV) mandate, the law essentially set benchmarks for auto manufacturers to mass produce electric vehicles, says Kenneth P. Green, a senior fellow at the Pacific Research Institute.
•Technically, ZEV merely set a performance standard for vehicles operating in the state by capping emissions at a specific level (zero).
•Thus, though the bill was sold as an environmental regulation limiting emissions, it was essentially a legal mandate for the creation of vehicles with no emissions (that is, electric vehicles).
•The mandate required that by 1998, 2 percent of the vehicles sold in the state by large automakers had to be zero-emission vehicles.
•That mandate was set to increase to 5 percent of vehicle sales by 2001, and 10 percent by 2003.
Notably, because the technology that would allow automakers to fulfill this requirement repeatedly failed to surface, standards were routinely relaxed and timetables extended. The final mandate looked far different from the original: at least 15.4 percent of all cars sold must be either fully electric, a plug-in hybrid or powered by a hydrogen fuel cell by 2025.
One of the reasons that electric car production has lagged is because the models are more expensive than their combustion-engine counterparts. Further, market demand has lagged behind state mandates, in large part because of the hefty price tag for the cars.
•Though originally billed at $30,000, the eventual cost of the Chevy Volt rose to nearly $40,000.
•The Nissan Leaf, with a limited range of about 73 miles per charge, sells for about $35,000.
•Furthermore, because they require more expensive parts and necessitate specialized repair work, electric vehicles typically demand a higher insurance premium.
•These additional charges dampen market demand, regardless of government interventions.
Finally, and perhaps most importantly, it remains up for debate whether electric vehicles offer any environmental benefit. Because the electricity necessary to power them comes from a variety of emissions-producing sources, including coal-fired power plants, electric vehicles may on the whole offer no advantage in terms of emissions.
Progressives Demand Higher Taxes to Slow Growth
Welcome to the real world of the progressive - take from the productive and give to the unproductive. Worse, more then 40% of the population will never here this information about these tax increases and how it will destroy their way of life.
The majority media outlets will ignore this information as it reflects poorly on all liberal Democrats who support policy's that demand dependence.
When the reality sets in for so many seniors that will be forced live in poverty, and small businesses having to lay off workers as they close their collective doors, one has to wonder what excuse these millions of people will use to justify their new living or dieing conditions? Who will they blame?
There's a Triple Tax Increase in Your Future
Source: Merrill Matthews, "There's a Triple Tax Increase in Your Future," Investor's Business Daily, June 19, 2012.
The so-called Bush tax cuts are set to expire at the end of the year. That means that all of the current income tax rates will rise to pre-2001 levels overnight: the lowest rate will jump from 10 percent to 15 percent and the highest from 35 percent to 39.6 percent. Moreover, rhetoric from Congress suggests that Democrats will settle for nothing less than an expiration of those provisions benefitting the rich, says Merrill Matthews, a resident scholar with the Institute for Policy Innovation.
One of the implications of this policy change that receives less attention than it should is the effect of these taxes on capital gains and dividend payouts. Effectively, the expiration of the Bush tax cuts will triple the taxes on these forms of income overnight.
•As a result of the Bush tax cuts, capital gains and dividends are taxed at a flat rate of 15 percent.
•When the cuts expire, however, these forms of income will be taxed as if they are regular income, meaning that gains for the wealthy will be taxed at a rate of 39.6 percent.
•Also, the health care law imposes a new 3.8 percent tax on passive income, including dividends and interest.
•So the effective dividend tax rate for those at the upper end of the income scale would nearly triple, to 43.4 percent.
Democrats and the president justify this change in tax policy by arguing that it will only affect the wealthy, who are capable of giving more to government coffers. However, basic economic analysis allows us to see that many more parties than the wealthy will be harmed by this tax hike.
•A study by the accounting firm Ernst & Young found that the United States currently has the fourth-highest integrated dividend tax rate among the 34 Organization for Economic Cooperation and Development nations.
•Higher dividend taxes will make stocks that pay dividends less attractive to investors.
•So those who currently hold dividend-paying stocks -- everyone from middle-class folks with 401(k)s to union pension funds to non-profit foundations -- would see the value of their investments decline substantially.
•Hiking taxes on dividends would also be disastrous for retirees: according to the IRS, more than half of dividend payments go to Americans over age 65.
The majority media outlets will ignore this information as it reflects poorly on all liberal Democrats who support policy's that demand dependence.
When the reality sets in for so many seniors that will be forced live in poverty, and small businesses having to lay off workers as they close their collective doors, one has to wonder what excuse these millions of people will use to justify their new living or dieing conditions? Who will they blame?
There's a Triple Tax Increase in Your Future
Source: Merrill Matthews, "There's a Triple Tax Increase in Your Future," Investor's Business Daily, June 19, 2012.
The so-called Bush tax cuts are set to expire at the end of the year. That means that all of the current income tax rates will rise to pre-2001 levels overnight: the lowest rate will jump from 10 percent to 15 percent and the highest from 35 percent to 39.6 percent. Moreover, rhetoric from Congress suggests that Democrats will settle for nothing less than an expiration of those provisions benefitting the rich, says Merrill Matthews, a resident scholar with the Institute for Policy Innovation.
One of the implications of this policy change that receives less attention than it should is the effect of these taxes on capital gains and dividend payouts. Effectively, the expiration of the Bush tax cuts will triple the taxes on these forms of income overnight.
•As a result of the Bush tax cuts, capital gains and dividends are taxed at a flat rate of 15 percent.
•When the cuts expire, however, these forms of income will be taxed as if they are regular income, meaning that gains for the wealthy will be taxed at a rate of 39.6 percent.
•Also, the health care law imposes a new 3.8 percent tax on passive income, including dividends and interest.
•So the effective dividend tax rate for those at the upper end of the income scale would nearly triple, to 43.4 percent.
Democrats and the president justify this change in tax policy by arguing that it will only affect the wealthy, who are capable of giving more to government coffers. However, basic economic analysis allows us to see that many more parties than the wealthy will be harmed by this tax hike.
•A study by the accounting firm Ernst & Young found that the United States currently has the fourth-highest integrated dividend tax rate among the 34 Organization for Economic Cooperation and Development nations.
•Higher dividend taxes will make stocks that pay dividends less attractive to investors.
•So those who currently hold dividend-paying stocks -- everyone from middle-class folks with 401(k)s to union pension funds to non-profit foundations -- would see the value of their investments decline substantially.
•Hiking taxes on dividends would also be disastrous for retirees: according to the IRS, more than half of dividend payments go to Americans over age 65.
Thursday, July 05, 2012
Green Transportation : 100's Millions in Waste
Still more insanity from the 'green' eco fascists - it's really all about a few in power that will get rich and the rest of us pay the bill for decades to come. This is no different than the trains that will save millions and the planet - right - what will actually happen is no different that the street cars only 100's of times more expensive.
Check out what happened in Wisconsin with the trains for the state and trolleys in Milwaukee - 800 million from the feds but the ridership and maintenance cost were untenable. The trolleys, street cars, would cost millions in infrastructure changes and maintenance, again, millions more. Millions in design has already been wasted.
The Great Streetcar Conspiracy
Source: Randal O'Toole, "The Great Streetcar Conspiracy," Cato Institute, June 14, 2012.
Streetcars are the latest urban planning fad, stimulated partly by the Obama administration's preference for funding transportation projects that promote "livability" (meaning living without automobiles), rather than mobility or cost-effective transportation, says Randal O'Toole, a senior fellow with the Cato Institute.
In anticipation of this change, numerous cities are preparing to apply for federal funds to build streetcar lines. However, the push for these expensive investments is more based on private interests and misleading arguments than sound public policy.
The real push for streetcars comes from engineering firms that stand to earn millions of dollars planning, designing and building streetcar lines. These companies and other streetcar advocates make two major arguments in favor of streetcar construction. The first argument is that streetcars promote economic development.
•In support of this claim, streetcar advocates cite the experience of Portland, Oregon, where installation of a $103 million, four mile streetcar line supposedly resulted in $3.5 billion worth of new construction.
•What they rarely mention, however, is that the city also gave developers hundreds of millions of dollars of infrastructure subsidies, tax breaks and other incentives to build in the streetcar corridor.
•Almost no new development took place on portions of the streetcar route where developers received no additional subsidies.
The second argument is that streetcars are "quality transit," superior to buses in terms of capacities, potential to attract riders, operating costs and environmental quality.
•In fact, a typical bus has more seats than a streetcar, and a bus route can move up to five times as many people per hour, in greater comfort, than a streetcar line.
•Numerous private bus operators provide successful upscale bus service in both urban and intercity settings.
•Streetcars cost roughly twice as much to operate, per vehicle mile, as buses, and also cost far more to build and maintain.
•Streetcars are no more energy efficient than buses and, at least in regions that get most electricity from burning fossil fuels, the electricity powering streetcars produces as much or more greenhouse gases and other air emissions as buses.
Check out what happened in Wisconsin with the trains for the state and trolleys in Milwaukee - 800 million from the feds but the ridership and maintenance cost were untenable. The trolleys, street cars, would cost millions in infrastructure changes and maintenance, again, millions more. Millions in design has already been wasted.
The Great Streetcar Conspiracy
Source: Randal O'Toole, "The Great Streetcar Conspiracy," Cato Institute, June 14, 2012.
Streetcars are the latest urban planning fad, stimulated partly by the Obama administration's preference for funding transportation projects that promote "livability" (meaning living without automobiles), rather than mobility or cost-effective transportation, says Randal O'Toole, a senior fellow with the Cato Institute.
In anticipation of this change, numerous cities are preparing to apply for federal funds to build streetcar lines. However, the push for these expensive investments is more based on private interests and misleading arguments than sound public policy.
The real push for streetcars comes from engineering firms that stand to earn millions of dollars planning, designing and building streetcar lines. These companies and other streetcar advocates make two major arguments in favor of streetcar construction. The first argument is that streetcars promote economic development.
•In support of this claim, streetcar advocates cite the experience of Portland, Oregon, where installation of a $103 million, four mile streetcar line supposedly resulted in $3.5 billion worth of new construction.
•What they rarely mention, however, is that the city also gave developers hundreds of millions of dollars of infrastructure subsidies, tax breaks and other incentives to build in the streetcar corridor.
•Almost no new development took place on portions of the streetcar route where developers received no additional subsidies.
The second argument is that streetcars are "quality transit," superior to buses in terms of capacities, potential to attract riders, operating costs and environmental quality.
•In fact, a typical bus has more seats than a streetcar, and a bus route can move up to five times as many people per hour, in greater comfort, than a streetcar line.
•Numerous private bus operators provide successful upscale bus service in both urban and intercity settings.
•Streetcars cost roughly twice as much to operate, per vehicle mile, as buses, and also cost far more to build and maintain.
•Streetcars are no more energy efficient than buses and, at least in regions that get most electricity from burning fossil fuels, the electricity powering streetcars produces as much or more greenhouse gases and other air emissions as buses.
Wednesday, July 04, 2012
Stockton Calfornia Crushed by Liberalism
Is anyone surprised that this happened in California? The entire state is a basket case due to decades of Democrat liberalism, progressivism driving the state over the cliff.
Is there a fix for this problem in California, not a chance!
What Happened in Stockton?
Source: Harris Kenny, "What Happened in Stockton?" Reason Foundation, June 27, 2012.
On June 26, the Stockton, California, City Council voted 6-1 to adopt a spending plan for operating under bankruptcy protection, and to file a motion with the courts to share information from the confidential mediation. With almost 300,000 residents, Stockton is the largest city to file for bankruptcy in U.S. history, which begs inquiry as to how the municipality reached this point, says Harris Kenny, a policy analyst at the Reason Foundation.
First, only modest investigation finds that the housing bust was particularly harmful in Stockton.
•Housing prices plunged from nearly $400,000 in median home prices in 2006, down to $110,000 in 2009 (where median prices were in 2000 before the bubble.)
•Meanwhile the city has the second highest rate of foreclosures in the country.
•As a consequence, property tax revenues plunged rapidly, and the subsequent recession caused sales taxes, utility user's taxes and housing permit fees to fall as well.
•The city quickly burned through emergency cash reserves in order to cover its deficits, along with implementing a hiring freeze in 2008 and various spending cuts, but to no avail.
Second, the city's policymakers appear to have mistaken the real estate bubble for real growth, which gave them excessive optimism about future finances.
•This reported optimism led to breakneck pace spending on various redevelopment initiatives.
•The city sold $129 million in bonds to fund rehabilitating the Philmathean building, the downtown marina and waterfront's development, and the Hotel Stockton.
•The city also renegotiated generous compensation for city employees, when employee services compose approximately three-fourths of the city's almost $200 million budget.
•This generosity resulted in lavish annual raises and excessive post-employment benefits; the latter has resulted in $800 million in unfunded liabilities.
Third, the city was unfortunate in initiating a bond offering that went sour.
•In 2007 the city sought to lower its pension costs, so policymakers undertook a bond offering to lower interest payments on roughly $125 million of its pension obligation.
•The proceeds of these pension obligation bonds were given to the California Public Employees' Retirement System (CalPERS) to manage.
•Crucially, CalPERS was overexposed to the real estate and stock markets: the bond money is now worth under $100 million while the city owes $248 million.
•Increased debt payments, combined with multiple years of negative net annual activity, ultimately pushed Stockton over the edge.
Is there a fix for this problem in California, not a chance!
What Happened in Stockton?
Source: Harris Kenny, "What Happened in Stockton?" Reason Foundation, June 27, 2012.
On June 26, the Stockton, California, City Council voted 6-1 to adopt a spending plan for operating under bankruptcy protection, and to file a motion with the courts to share information from the confidential mediation. With almost 300,000 residents, Stockton is the largest city to file for bankruptcy in U.S. history, which begs inquiry as to how the municipality reached this point, says Harris Kenny, a policy analyst at the Reason Foundation.
First, only modest investigation finds that the housing bust was particularly harmful in Stockton.
•Housing prices plunged from nearly $400,000 in median home prices in 2006, down to $110,000 in 2009 (where median prices were in 2000 before the bubble.)
•Meanwhile the city has the second highest rate of foreclosures in the country.
•As a consequence, property tax revenues plunged rapidly, and the subsequent recession caused sales taxes, utility user's taxes and housing permit fees to fall as well.
•The city quickly burned through emergency cash reserves in order to cover its deficits, along with implementing a hiring freeze in 2008 and various spending cuts, but to no avail.
Second, the city's policymakers appear to have mistaken the real estate bubble for real growth, which gave them excessive optimism about future finances.
•This reported optimism led to breakneck pace spending on various redevelopment initiatives.
•The city sold $129 million in bonds to fund rehabilitating the Philmathean building, the downtown marina and waterfront's development, and the Hotel Stockton.
•The city also renegotiated generous compensation for city employees, when employee services compose approximately three-fourths of the city's almost $200 million budget.
•This generosity resulted in lavish annual raises and excessive post-employment benefits; the latter has resulted in $800 million in unfunded liabilities.
Third, the city was unfortunate in initiating a bond offering that went sour.
•In 2007 the city sought to lower its pension costs, so policymakers undertook a bond offering to lower interest payments on roughly $125 million of its pension obligation.
•The proceeds of these pension obligation bonds were given to the California Public Employees' Retirement System (CalPERS) to manage.
•Crucially, CalPERS was overexposed to the real estate and stock markets: the bond money is now worth under $100 million while the city owes $248 million.
•Increased debt payments, combined with multiple years of negative net annual activity, ultimately pushed Stockton over the edge.
Disability Regulations Out of Control
How can this happen? If you have no other reason to vote Obama out in November, these new ADA regulations are insane. Even most people with disabilities admit the ADA has lost their collective marbles. This is the face of progressive socialism.
New Disability Regulations
Source: Elizabeth Harrington, "New Disability Regs Limit Slope of Mini Golf Holes, Require Businesses to Admit Mini Horses as Guide Animals," CNS News, June 26, 201
Although the Justice Department has extended the deadline for America's hotels to comply with regulations regarding handicap access to swimming pools, new Americans with Disabilities Act (ADA) guidelines are already being applied at miniature golf courses, driving ranges, amusement parks, shooting ranges and saunas, says CNS News.
Many of these commercial establishments must simply make slight alterations or business decisions that will allow those in wheelchairs full use of their facility. This may mean wheelchair-accessible benches in saunas or disability-friendly machines in gyms. However, two of the newest regulations on behalf of the ADA are receiving increasing levels of attention.
The first is the incredible amount of regulation that is being thrown at golf establishments, which will find their course-constructing creativity severely hampered.
•The standards now require that at least 50 percent of golf holes on miniature golf courses be "accessible" -- with a ground space that is "48 inches minimum by 60 inches minimum with slopes not steeper than 1:48 at the start of play."
•Full golf courses, furthermore, must maintain "an accessible route to connect all accessible elements within the boundary."
•Additionally, that accessible route must also "connect golf car rental areas, bag drop areas, teeing grounds, putting greens and weather shelters."
Stranger than these strict rules for mini golf, however, are the new provisions for miniature service ponies, which are being increasingly employed by members of the disabled community.
•According to the new ruling, miniature horses "were suggested by some commenter's as viable alternatives to dogs for individuals with allergies, or for those whose religious beliefs preclude the use of dogs."
•A business owner can deny admission to a miniature horse that is not housebroken, whose handler does not have sufficient control of the animal, or if the horse's presence compromises "legitimate safety requirements."
•All public accommodations will be required to accommodate service ponies.
New Disability Regulations
Source: Elizabeth Harrington, "New Disability Regs Limit Slope of Mini Golf Holes, Require Businesses to Admit Mini Horses as Guide Animals," CNS News, June 26, 201
Although the Justice Department has extended the deadline for America's hotels to comply with regulations regarding handicap access to swimming pools, new Americans with Disabilities Act (ADA) guidelines are already being applied at miniature golf courses, driving ranges, amusement parks, shooting ranges and saunas, says CNS News.
Many of these commercial establishments must simply make slight alterations or business decisions that will allow those in wheelchairs full use of their facility. This may mean wheelchair-accessible benches in saunas or disability-friendly machines in gyms. However, two of the newest regulations on behalf of the ADA are receiving increasing levels of attention.
The first is the incredible amount of regulation that is being thrown at golf establishments, which will find their course-constructing creativity severely hampered.
•The standards now require that at least 50 percent of golf holes on miniature golf courses be "accessible" -- with a ground space that is "48 inches minimum by 60 inches minimum with slopes not steeper than 1:48 at the start of play."
•Full golf courses, furthermore, must maintain "an accessible route to connect all accessible elements within the boundary."
•Additionally, that accessible route must also "connect golf car rental areas, bag drop areas, teeing grounds, putting greens and weather shelters."
Stranger than these strict rules for mini golf, however, are the new provisions for miniature service ponies, which are being increasingly employed by members of the disabled community.
•According to the new ruling, miniature horses "were suggested by some commenter's as viable alternatives to dogs for individuals with allergies, or for those whose religious beliefs preclude the use of dogs."
•A business owner can deny admission to a miniature horse that is not housebroken, whose handler does not have sufficient control of the animal, or if the horse's presence compromises "legitimate safety requirements."
•All public accommodations will be required to accommodate service ponies.
Tuesday, July 03, 2012
Free Markets Need Room to Expand : Over Regulation Kills Markets
Good stuff - free markets allow people to survive on their own merit while those that don't under stand the market find they can work for others to survive. If someone can not do either, they parish or take the hand outs from the productive.
Allow the majority to except the hand outs will doom the entire system.
Free Markets Equal Sustainable Development
Source: Ronald Bailey, "Free Markets = Sustainable Development," Reason Magazine, June 12, 2012.
"The current global development model is unsustainable." That is the conclusion of the High-Level Panel on Global Sustainability, appointed earlier this year to outline the economic and social changes needed to achieve global sustainability. The panel urged the attendees of the U.N. Conference on Sustainable Development to embrace "a new approach to the political economy of sustainable development," says Ronald Baily, Reason Magazine's science correspondent.
This plea for change would advocate the introduction of a stronger global bureaucracy to enforce policies that are deemed "sustainable." However, history tells us that the only form of society that is sustainable and encouraging of development is democratic free market capitalism. This is first true in regard to capitalism's ability to allow for unprecedented prosperity for all economic classes.
•Economic historian Angus Maddison calculated that, per capita, Western European incomes in year 1 A.D. averaged $600 and rose to $800 by 1500, reaching $1,200 by 1820.
•In China average per capita income was $450 in 1 A.D. rising to $600 by 1500, and reaching $700 by 1820.
•By 2008, average per capita income in Western Europe was $22,200 and in China $6,800.
•The most significant changes that took place in both spheres during the centuries in question were the implementation and harnessing of markets.
In regard to sustainability, the fact that free market capitalistic societies are currently thriving across the world is a testament to their robustness. A slew of civilizations have risen and fallen in past centuries (which speaks to their unsustainability), and political scientist Gregory Brunk has proposed the "self-organized criticality cascade" model to explain why.
•The usual example of self-organizing criticality is a sand pile in which grains of sand are constantly being added.
•Many land and simply find a place in the pile; some grains land and cause small local avalanches that soon come to rest; and eventually a grain lands that causes a huge avalanche that changes the shape of the whole pile.
•So a small, seemingly innocuous event (Franz Ferdinand's driver taking one route over another) can have incredible consequences (World War I).
Brunk emphasizes free markets protect societies from these avalanches. Profits and losses discipline people to learn quickly from and fix their mistakes, and consequently, markets are superb at using trial-and-error to find solutions to problems.
Allow the majority to except the hand outs will doom the entire system.
Free Markets Equal Sustainable Development
Source: Ronald Bailey, "Free Markets = Sustainable Development," Reason Magazine, June 12, 2012.
"The current global development model is unsustainable." That is the conclusion of the High-Level Panel on Global Sustainability, appointed earlier this year to outline the economic and social changes needed to achieve global sustainability. The panel urged the attendees of the U.N. Conference on Sustainable Development to embrace "a new approach to the political economy of sustainable development," says Ronald Baily, Reason Magazine's science correspondent.
This plea for change would advocate the introduction of a stronger global bureaucracy to enforce policies that are deemed "sustainable." However, history tells us that the only form of society that is sustainable and encouraging of development is democratic free market capitalism. This is first true in regard to capitalism's ability to allow for unprecedented prosperity for all economic classes.
•Economic historian Angus Maddison calculated that, per capita, Western European incomes in year 1 A.D. averaged $600 and rose to $800 by 1500, reaching $1,200 by 1820.
•In China average per capita income was $450 in 1 A.D. rising to $600 by 1500, and reaching $700 by 1820.
•By 2008, average per capita income in Western Europe was $22,200 and in China $6,800.
•The most significant changes that took place in both spheres during the centuries in question were the implementation and harnessing of markets.
In regard to sustainability, the fact that free market capitalistic societies are currently thriving across the world is a testament to their robustness. A slew of civilizations have risen and fallen in past centuries (which speaks to their unsustainability), and political scientist Gregory Brunk has proposed the "self-organized criticality cascade" model to explain why.
•The usual example of self-organizing criticality is a sand pile in which grains of sand are constantly being added.
•Many land and simply find a place in the pile; some grains land and cause small local avalanches that soon come to rest; and eventually a grain lands that causes a huge avalanche that changes the shape of the whole pile.
•So a small, seemingly innocuous event (Franz Ferdinand's driver taking one route over another) can have incredible consequences (World War I).
Brunk emphasizes free markets protect societies from these avalanches. Profits and losses discipline people to learn quickly from and fix their mistakes, and consequently, markets are superb at using trial-and-error to find solutions to problems.
Monday, July 02, 2012
Education Bubble to Burst : Trillions More Gone
Ask any liberal about why the economy is in the dumps and they will respond by saying we aren't spending enough to prime the pump. Ask your self, after reading this article, whether or not the spending is enough or is the interference of government working in the best interest of the nation?
Why the Education Bubble Will Be Worse Than the Housing Bubble
Source: Antony Davies and James R. Harrigan, "Why the Education Bubble Will Be Worse Than the Housing Bubble," U.S. News & World Report, June 12, 2012.
The problem with student loans is not the interest rate but that the federal government subsidizes student loans at all, say Antony Davies of the Mercatus Center and James R. Harrigan of the Institute for Humane Studies.
The potential harm of government intervention in the student loan market is not unlike the damage caused by similar intervention in the home mortgage market.
•The government, in a fit of social engineering spanning decades, established Fannie Mae and Freddie Mac to make real the dream of home ownership for working class Americans.
•Beginning in 1996, the Department of Housing and Urban Development told Fannie and Freddie that more than 40 percent of their loans had to go to low-income borrowers.
•Further, starting in the early 1990s, the Federal Reserve pushed interest rates to historically low levels, making mortgages cheaper.
•The net result of this was very predictable: people took out more mortgages and an increasing number of mortgages went to low-income people.
•Between 2001 and 2006, the fraction of new mortgages that were subprime (and consequently unlikely to be paid back) tripled, and the rest, as they say, is history.
This is the exact result we can expect from continued government intervention in student loan markets.
•The Affordable Care Act of 2010 allowed the government to loan money directly to students.
•The following year the Taxpayer Relief Act extended tax breaks to student loan borrowers.
•Predictably, the Federal Reserve kept interest rates at historically low levels, making college loans cheaper.
•And the price of a college education soared -- just as one would expect from a market flooded with cheap money.
•By law, lenders cannot even deny Stafford and Perkins loans (types of federal student loans) based on the borrower's credit or employment status.
The result: from 1976 to 2010, the prices of all commodities rose 280 percent, the price of homes rose 400 percent, and the price of private education rose 1,000 percent.
Why the Education Bubble Will Be Worse Than the Housing Bubble
Source: Antony Davies and James R. Harrigan, "Why the Education Bubble Will Be Worse Than the Housing Bubble," U.S. News & World Report, June 12, 2012.
The problem with student loans is not the interest rate but that the federal government subsidizes student loans at all, say Antony Davies of the Mercatus Center and James R. Harrigan of the Institute for Humane Studies.
The potential harm of government intervention in the student loan market is not unlike the damage caused by similar intervention in the home mortgage market.
•The government, in a fit of social engineering spanning decades, established Fannie Mae and Freddie Mac to make real the dream of home ownership for working class Americans.
•Beginning in 1996, the Department of Housing and Urban Development told Fannie and Freddie that more than 40 percent of their loans had to go to low-income borrowers.
•Further, starting in the early 1990s, the Federal Reserve pushed interest rates to historically low levels, making mortgages cheaper.
•The net result of this was very predictable: people took out more mortgages and an increasing number of mortgages went to low-income people.
•Between 2001 and 2006, the fraction of new mortgages that were subprime (and consequently unlikely to be paid back) tripled, and the rest, as they say, is history.
This is the exact result we can expect from continued government intervention in student loan markets.
•The Affordable Care Act of 2010 allowed the government to loan money directly to students.
•The following year the Taxpayer Relief Act extended tax breaks to student loan borrowers.
•Predictably, the Federal Reserve kept interest rates at historically low levels, making college loans cheaper.
•And the price of a college education soared -- just as one would expect from a market flooded with cheap money.
•By law, lenders cannot even deny Stafford and Perkins loans (types of federal student loans) based on the borrower's credit or employment status.
The result: from 1976 to 2010, the prices of all commodities rose 280 percent, the price of homes rose 400 percent, and the price of private education rose 1,000 percent.
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