Archive for September, 2007

National Sales Tax is Double Taxation For Some

First of all, I like the idea of a national sales tax.  It will be fantastic for people to go to the stores and realize how much the government consumes.  When money is taken out of the paycheck in chunks, it isn’t to bad.  Lets see, a few percent for social security (that’s a nice program), a few for medicare (on great financial footing), some comes out as income tax.  When all is said and done, the average tax rate for your average  American is about 25% from the paycheck.  This doesn’t include 5 kazillion other little taxes that build up before you can spend your money.  That’s just for the feds.

Fair tax proposals suggest we generate all the revenue from a sales tax to avoid evasion and to avoid having to file our taxes.  The system really sounds pretty slick.  The fact is, to duplicate a 25% tax on a paycheck, you could have to charge closer to 30% sales tax, assuming all of the paycheck was spent.    This is based on 25% of a slightly larger number (total paycheck, which includes taxes) is the same as 30% of a smaller ( cost of an item, which doesn’t include taxes).

Now here is where I really like the plan.  People are going to be paying 30% federal taxes and 10-15% local taxes (state income tax will most probably be rolled into sales tax also.  That will suck.  People will be ticked.  They will be reminded every day that they are paying for inefficient ethanol production, illegal immigrant education, a DMV that treats us like crap.  All the sudden, people will be demanding the government watch where they spend dollars.  We will only need enough nukes to kill everyone in the world 2 times instead of  10.  Maybe we don’t need fifty overlapping bureaucracies.   Maybe the CIA, FBI, and military intel can all work together to streamline information distribution.  Maybe the military can suck it up and make the marines an special type of army unit.  There are two reasons we don’t do that.  The marines interface with the Navy for transport (hey-  Just like the army.  Hmm) and they have so much “We are so much tougher and um Stuff” mentality.  When the taxpayer realizes that maybe we could drop sales tax a percent, they won’t care.    People will look at social security as a menace to financial freedom, and will demand that we reform the system.  Poeple will look at their neighbor on welfare, thinking, “That guy is why I have to pay 40-45% overall sales tax.”  There will be significant peer pressure for people to get their hands out of other’s pockets.  People think these tax rates look high, but they are reality.  The government consumes a huge amount of resources-  An amount they would like to keep hidden.  I’d like everyone to know

So much for why I like it.

When the government comes out with a new program  to help you save money, you always have to look on it warily.  The Roth IRA is great, in my humble opinion.  But I have a question.  What will be the status of the money in a Roth account if the Fair Tax gets passed?   I have been taxed on the money that I put into my Roth account once.  If the fair tax law is passed, I will be taxed on that money again.  The overall rate will be around 90%, if you look at it like a sales tax, or about 48% if you look at it like an income tax.  Either way, it sucks.  Does anyone know of any alternatives?  Anyway, just throwing in my 2% about making the savers pay 90% tax

Maybe a slightly different direction

It seems that my blogs have fixed themselves in one direction, and I find myself wishing to talk about a different subject. Bloggers say that the optimum length for a blog is around 3oo words. It seems that any article longer then a certain length gets castigated. I guess people think so little of the public that they think anything longer than this is a waste and will not be read.

What in the heck has happened to our attention span? I have been reading in books about history in the 1800’s and even in the early 1900’s about speakers speaking for hours on end, bringing listeners with them through their trail of logic. The length was proscribed because of the complexity of the subject. I recognize that some things are better spoken in few words. The Constitution, Declaration of Independence, and Gettysburg address were all exercises in brevity. The catch is people don’t really wan to acquire any other information from longer more detailed sources. If it is non-fiction printed material, it needs to be resolved within a few sentences.

The discovery channel has destroyed education. Nowadays, people think that a 60 minute discovery channel special makes them an expert. No one even thinks of reading about something to learn a large amount of useful information.

I guess that instant gratification idea exists in me also.  I wish I was good at so many things but have troubel focusing on one thing long enough to become as proficient as I desire.  I want to be good at too many things, and I only have the time to be good at a couple.  I can’t figure out what I would like to be good at.  I am above average at quite a few things, but that is based on the fact that average usually sucks.  Oh well.  Sorry about this random off topic rant.  Just thinking.

Hate Crimes of the Jena 6

This Jena 6 line of bull has been driving me nuts. The fact is that a guy was down on the ground getting kicked in the face. Let’s see if I know what the problem is here. A defenseless white guy is on the ground while 6 black guys assault him. Hmm, sounds bad. What would we do if a defenseless black guy was on the ground getting beat by 6 white guys. I seem to remember riots that required calling in the national guard.

The things that bothers me is equivocating saying extremely hateful things (with a teaching aid of a noose) with wailing on an unconscious person’s head. Hanging thoseJustin Barker Injuries Sustained nooses is hurtful, and people should exert social pressures to stop it, but the DA has a good point in asking, “How should I prosecute this?” Who was hurt, or was there any specific threat made? Was a law on the books broken? If there wasn’t a law on the books, it is for the legislature to make the law. Don’t ask me how it would read- It is hard to prosecute people for their ignorance or to legislate laws against social ignorance.

One defense that I hear is that he was at a school function later. If I understand correctly, if permanent debilitating damage wasn’t done, there isn’t a crime. Apparently DUI is not a crime unless an accident occurs. Shooting at people is not a major crime unless you hit a vital organ (if you get a flesh wound in the leg, he could be out and about later that afternoon after some time in a hospital. This boy’s life was threatened and the punishment should indicate that this was taken into consideration.

If we wish to describe actions as hate crimes, wouldn’t this be a classic example? They beat an unconscious high school student because of his race.

I invite any recommendations on what to do with those who hung the nooses. I just can’t think of how you punish people who hang nooses, have KKK stickers, or get Nazi tattoos. You can attack them in this case for defacing school grounds, I guess.

I guess I am just sick of people crying racism when they are guilty of their crimes. Pitching a fit any time you lose in a gamble against the law is very irritating to those watching from the sidelines.

My Computer is back!!

I had another pleasant experience with Dell.  I would like to thank all those people out there who treat Indians on the customer service lines like total crap.  Through constant beat downs we have made the Indians realize that they are, in fact, unworthy of a please or thank you.  We should treat our pit bulls with more compassion.

The reason I thank you is that by treating the customer service guys with the slightest degree of respect, I get the royal treatment.  We had a lightning storm here and after the lightning struck, the Internet ceased working.  After a couple of days the sound quit working, and then we lost total computer function.  I was pretty depressed.  It was a ton worse than when my wife left to visit her mom.  I guess that the sadness was greatly mitigated by the fact that I wasn’t there.  Now that was happiness.

Anyway, this Indian guy set up the repair for free.  They ended up replacing the motherboard withing 3 days of me calling.  I am still a huge fan of Dell.  Based on the customer service, we would definitely buy another Dell.  Anyway, it finally works.

I hope  everyone is doing fine, and God bless us every one and all of that other crap.

Paulson, “Congress, Can I Please Get My Credit Limit Increased?”

The secretary of treasury wants to increase his spending again.  I think the debt professionals at Saturday Night Live have some advice for them.

 Now I know this is complicated, so maybe the Secretary of the Treasury should watch this once again. 

I thought these people were supposed to be smart.  There is a threat of a recession on the horizon, and we are spending more and more now.  If we can’t manage our budget during the better years what will we do when things actually get bad?  What are they thinking? 

The worst part is that we continue to have faith in them.  Social security is going to be a complete disaster, medicare and medicaid will be worse, and who knows who will finance the retirement of military vets.  It’s going to be great.  A bunch of cranky old sick people who know how to kill other people wandering around town in a bad mood.  If we already have massive liabilities that we don’t know how we are going to cover, why are we increasing spending right now?  We should be cutting expenses and getting ready for the perfect storm that is coming, both as a country and personally.  That means, “Don’t buy stuff you cannot afford”. 

Savings rates were once positive in this country.  The fact that they are already negative is very scary, especially seeing that baby boomers are still supposed to be socking away money.  If, as a country, we have a negative savings rate now, where will we be in 15 years when all of the baby boomers retire.  With those extremely negative savings rates, our credit rating around the world will be dropping like a rock.  We will be the country that is paying high interest rates because there is so much doubt in our ability to repay our debts. 

It looks like they may just use infaltion to debase the debts, slaughtering the accounts of those who were responsible and saved.  The catch is actions like this promote irresponsible behavior in the citizens.  Savers are what allows growth of industry through financing new equipment, factories, and research.  Why do we punish them?  I guess the government will end up getting the citizens it deserves in this case. 

It will be interesting to see how things shake out, but it would be a lot more pleasant waiting if both our government and our citizens tried to be a little responsible in the meantime.

Foreclosures Up, 1/3 Chance of Recession, Realtors say now is the time to buy!!

The National Association of Realtors is reassuring customers that now is the time to buy.  We are entering a new economy, and this temporary bump in the market is the perfect time to buy with greater selection. 

 According to Yahoo, foreclosures have doubled from last year and are up 36% from last month.  This will give you even more opportunities to buy.  These are fantastic houses that are selling at significant discounts.  Your local Realtor will explain everything to you and take care of this incredibly complex transaction.  These are specialized skills that no one else has, so make sure you pay a realtor 6% to look up something on the internet and drive you from place to place.   They will also contact the lawyer, whom you also have to pay,  for this small commision.  Now there are many naysayers on the news now, but they don’t have the same information we do. 

The market is in a temporary downturn and will come back.  Although Greenspan says there is a one in three chance of recession, you should remember that this is just a temporary downturn. 

The money in your house is just sitting there idly.  You can extract that money through a home equity loan, and you can purchase a rental home.  The selection has never been better.  Your realtor and mortgage broker can work together as an unholy alliance a team to make sure that you buy as much house as you can. 
Faithless naysayers will say that you would be stupid not to learn from what has happened in the last year.  The claim that being mortgaged up to the hilt fully leveraged puts you in a precarious financial situation is untrue.  The truth is that if you get in over your head, the goverment will bail you out.  Trust us.  We are the National Association of Realtors, our source for unbiased information.

Better Kind of Black on Black Violence

A George Mason professor of economics, Walter E. Williams, has offered a better kind of black on black violence.  After quoting the statistics for crime (blacks are extremely overrepresented in crime) he recommends people do something about it. 

Should black people accept government’s dereliction of its first basic function, that of providing protection? My answer is no. One of our basic rights is the right to defend oneself against predators. If the government can’t or won’t protect people, people have a right to protect themselves.

Its time for people to take back control of their lives.  We have a government that is very good at paying lip service to the idea of protection, but is too busy having sex in the men’s bathroom to do anything substantial.  In the interest of keeping everyone happy, we are not willing ot do what is effective.  Drug dealers operate with the effective permission of the neighborhood.  Illegal immigrants are here with the permission of the population in the regions where they live.  In the view of the government people do not run awry by supporting those who break the law.  Instead, if they try to enforce the law, we call them vigilantes.  Again, Walter E Williams-

You say, “Hey, Williams, you’re not talking about vigilantism, are you?” Yes, I am. Webster’s Dictionary defines vigilantism as: a volunteer committee organized to suppress and punish crime summarily as when the processes of law are viewed as inadequate.

Why has vigilantism been painted as massive evil with government apathy painted as just the way things are? Isn’t the government really a very large vigilante committee? A group of people voluntarily bonded together to make sure that everyone gets a fair shake?  I recognize that now it is fast becoming  a group of people who try to suck the resources from a few and line the pockets of those in high places.  The need for free and honest discourse is very clear.  Without that, what would point out the inadequacies of the government.  The local groups in trouble communities would operate with the support of the community.  They would be formed from members of the community.  Instead of the “us versus them” argument perpetuated by rappers and other thugs, you would have “thugs versus responsible citizens”, which would serve the community at large.   Some racial demagogues are against anything that would undermine their ability to play the race card, even if it helps their community.   You’ll not find Jackson or Sharpton supporting this idea.

I guess that everything comes down to people doing what they think is right.  Those in power now say that we have to do everything right within the law.  Lucky for us, a group from over two hundred years ago believed that what was right was the law.

If you vote or improve ratings or readership, nothing is your fault!

Today, in the CBS news column FDR Solves the Mortgage Crisis, Andrew Jakabovics pandered to the public with the classic line.  It’s not your fault, it is the fault of big business.

Basically, the theme is that the government should jump in and give mortgages to the people if they can’t get mortgages elsewhere.  The government is encouraging risky behavior by allowing people to reap the benefits of risky moves, while protecting them from the downside. 

I think the government should extent the relief that they have given to those in Vegas.  If we are protecting those who took risky mortgages, we might as well protect those who didn’t do so well in the stock market.  If the stocks drop, the government should give them a tax credit for fifty percent of their losses.  After all, isn’t the security of our retirees of just as much concern as having others live in a home instead of an apartment?  After all, it’s for the children. (Don’t ask me how.) 

It seems that others are very confident of our abilities to repay all of our mortgages based on the exchange rates.  Euro hit an all time high, and the pound went over $2.  Inflation is starting to rear it’s ugly head, as shown by the rapidly falling dollar.  It stinks, but we’ve been bringing this on for a long time.  The US has a bit of a hangover from the mortgage binge, and we have to pay the piper at some point. 

People are also trying to paint the picture of a mortgage market in which people just can’t get a loan, even with great credit.  According to the Wall Steet Journal,banks are tripping over themselves to give conventional mortgages to credit worthy borrowers.  This is just what should be happening.  Bankers should cut risky loans.  They are obligated to do this by their depositors, who depend on them to remain liquid.  Credit Unions, who are very conscious of the fact that they are lending out depositor (basically owner) money have had a fraction of the default rate.

On the radio a couple of days ago I heard a demagogue spouting out bull about how the bankers and evil mortage industy were responsible for this mess.  I assume grocery store owners are responsible for obesity, baseball bat owners are responsible for thuggery, and dell is one the line for carpel tunnel syndrome. 

We have dug ourselves into this hole and it is time for us to get out through thrift, hardwork, and saving.  The plan proposed by Jakabovics is based on spending taxpayer money to subsidize foolishness.  Let’s move in the other direction.

Science and Politics should not mix; This Fire From Saltwater idea is wack (and wacky).

Yesterday I did a blog on why politicians should not pretend they understand science and have the public vote based on that. Today on the front page of yahoo was a story that explains the reason. I am surprised that someone at yahoo was not smart enough to check out on this.

“Scientist Burns Water” is a title to an article on the front page of Yahoo. I teach chemistry and am not dumb (at chemistry, anyway). This article shows why science in American schools has failed. I saw the youtube presentation from a local news channel, where they treated it as the new great energy breakthrough. Apparently, it does not take much intelligence to be a journalist. When you are clueless in a field that you are doing a story about, ask someone. Professors at colleges long from the depths of their souls to clear up massive misconceptions such as this. It hurts them when they see gross conceptual errors splayed out as truth, because they know that they will have to repair the damage to their students as they come through their classes. Also, this is based on a principle that any engineering professor (or 2nd year engineering student, for that matter) should know. You can’t violate the laws of thermodynamics.

Here is a summary.

  1. Water Doesn’t burn. What he is doing is taking the the oxygen and hydrogen out of H20 and then burning them.  According to what he says, the radio waves ignite the oxygen and hydrogen on the spot, eliminating chances of saving the energy for future (portable) use.
  2. The amount of energy it takes to pull apart a water molecule (through electrolysis, radio waves, very high temperatures) is exactly the amount of energy released when the hydrogen and oxygen recombine to form water (through burning or a fuel cell). This deals with the conservation of energy.
  3. When we try to pull apart a water molecule, we aren’t 100% efficient – There is always at least a little bit of energy wasted, usually as heat. The fact that some energy always has to be wasted is known as the second law of thermodynamics. (Wikipedia has a more extensive article).
  4. When we put the hydrogen and oxygen back together, we can’t extract all of the energy out of the reaction. This is also because of the 2nd law of thermodynamics. (We lose energy as heat).

After having read these four statements, you know more about energy than the majority of Americans. This is why we can’t use hydrogen as endless fuel. It takes just as much energy to get the hydrogen out of water as we get when we use it, and we have losses all along the way. Fuel cell cars theoretically have fewer losses along the way and that is why many people want to use them, but all technology has losses.  That radio wave generator is sucking more power than the Stirling engine puts out by a long shot. We use the power production methods we use, not because businessmen hate trees and furry animals, but because they work inexpensively and reliably. If you want to be a good environmentalist, don’t try to stop proven power methods, turn off the darn lights. Reuse. Any time you are being an honest decent cheapskate, you are probably saving the environment.

Politicians will grab onto this in an election year, becuase then they can feed the public the idea that with enough research, the laws of thermodynamics will be rendered obsolete.

I want to clearly state, scientists did not make up these laws. If you don’t like them talk to God. If he is willing to change the laws of thermodynamics for you I could use a favor. My class insinuates that I am not cool, and if you have God’s ear, see if you can do something about that.  And while we are wishing, I want a pony.

More Budget Insanity- We can’t repair Bridges, we are too busy financing risky mortgages

The senate is currently debating a transportation and housing bill. This bill includes only $1 billion to speed up bridge repair. For crying out loud, Amtrak asked for and got $1.2 billion to subsidize them. (They have got the plan to turn their business around, by dang, and if it doesn’t work . . . they will come to us for another billion next year).

I wonder how much money was lost because of the Minnesota bridge collapse. There were 140,000 drivers that used the bridge each day. If you assume each driver takes an economic loss of $5 each due to time, gas, and wear and tear on the car, you end up with $700,000. A day. And that is a low estimate. Why are bridges so low on our priority list?

Housing and urban development is getting over $30 billion this year. Are we sure we should be insuring HUD loans when people who have trouble getting traditional loans seem to be defaulting left and right? I guess the one thing that it does do is make sure that politicians will get votes from that crowd. Meanwhile, programs that the tax paying citizens of the country would really want, like say, the “No bridge left behind” program crash down in ruins.

The backlog on bridge repairs is $65 billion. It is also growing, as wear and tear keeps taking its toll. In a situation like this, $1 billion is so small it is almost laughable. It’s like having a $65,000 credit card bill, and throwing in an extra thousand a year. Laudy frickin’ daw. You’ll have fun eating government cheese as your van plunges down into the river.

If the government can’t do its job at this either, it is time to hand it over to private enterprise. Set up tolls across the bridges. The most efficient and important repairs will be done by a company that wants to keep costs down. Those citizens of Minnesota would be happy to pay a few bucks to cross the bridge if they could have it actually hold up. Let’s either have the government get some common sense into transportation, or let’s get someone in transportation who has some common sense.