Friday, July 29, 2011

Obama's Lowlights (7/29/11)

Poverty - The federal government says that 14% of Americans live in poverty. So here's a list of luxuries that these households retain: 99.6% own a refrigerator; 81.4% own a microwave; 78.3% own an air conditioner; 73% own a car or a truck; 63.7% own cable or satellite television; 54.5% own a cell phone; 53.9% own an Xbox or PlayStation; 48.6% own a coffee maker; 38.2% own a computer; 32.3% own two or more televisions; 31% own two or more cars; and 25% own a dishwasher.

Arizona – Since the government won’t help them Arizona is now accepting donations to build a border fence.

Chuck Schumer – The man behind the Democrat strategy of no budget plan and class warfare exploitation is New York Senator Chuck Schumer.

Jorge Louis Dieppa – He was a U.S. court interpreter in Mexico who was executed by drug cartels when his family could not pay a 10 thousand dollar ransom.
Norway - Terrorists detonated a bomb in downtown Norway last week while an individual linked to the bombing also shot several people at a youth camp outside Oslo. "Last week," the AP reports, "a Norwegian prosecutor filed terror charges against an Iraqi-born cleric for threatening Norwegian politicians with death if he is deported from the Scandinavian country."
Taxes - President Obama has reiterated his call for tax increases as part of a debt limit deal. The liberal-controlled Senate, meanwhile, blocked the Cut, Cup and Balance plan passed by the House. And what’s worse during a town hall meeting Obama complained about his job and made it sound like being President of the U.S. was beneath him and he would prefer being President of the world.
DADT - The AP says "don't ask, don't tell" may officially end soon: "Pentagon chief Leon Panetta has decided to end the ban on gays serving openly in the armed services and certify that repealing the 17-year-old prohibition will not hurt the military's ability to fight, officials said this past week."
Britain - Britain is auctioning off several of its aircraft carriers--and Chinese bidders are taking a keen interest.

School Choice – Advocates for school choice received a major victory when a Manhattan judge ruled that failing schools must close and charter schools must be allowed to share space in public schools. The NAACP and Teachers Union have been trapping kids in failing schools for decades and courts are trying to end that practice.

The Debt Debate – It has been so convoluted I have not been able to keep track of the entire storyline. First, Obama proposed a budget that was nixed 97-0 in the Senate. Now he has nixed a bipartisan bill because he wants tax increases. Obama then went on TV to once again blame Bush for his predicament, push tax increases, and to belittle Republicans. The Republicans have publically proposed 4 plans and the Democrats have still not presented a single plan to the public.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

The Vicious Cycle of Progressive Politics

How have liberals used the federal government to gain control of our daily lives? They create a vicious cycle of one bad policy after another that enables them to unlawfully use their power to control and intrude into our daily lives. Here are a few examples:

This is a recent example. The Journal of the American Medical Association wrote an article stating that obese children should be moved into child protective services (in other words, they classify ANY obese child as abuse, even if there are medical reasons why they are obese). This is a great example of how the vicious cycle of the progressive nanny state works: First, state, local, and federal governments write poor legislation that reduces physical education, recess time, games kids can play at recess, and have even written the school food menus. And let’s not forget that liberals are the ones who allowed frivolous lawsuits that have ended physical education, recess, and children games. But now it is the parents’ fault their kids are overweight when the government has taken parental guidance out of their control. Yes, parents should be responsible for their kids’ appearance, but the government has intruded into all aspects of their lives including banning them from bringing their own lunches to school in some districts. This is why “progressive” is a great way to describe liberal politics since they progressively pass one piece of bad legislation after another until finally they can achieve the ultimate goal: To control our families and children. It is no mistake that the obesity epidemic has gotten worse at the same time the government has passed more intrusive laws. For instance, ObamaCare does nothing to curb obesity and does nothing to reward healthy individuals. ObamaCare punishes the responsible and rewards the irresponsible. Let’s face facts; the ultimate goal of any liberal law is to make individuals as dependent as possible on the federal government. And if you do not conform to the liberal power grab, the government will continually (progressively) pass laws until you are ultimately forced to conform and the government has complete control over your life.

The classic example of the vicious cycle of liberal politics is the progression of welfare. What is the result of initial welfare policies? More welfare! Just look at the progression of the vicious cycle of Obama welfare policies. Even though we are going bankrupt as a nation Obama and liberals passed ObamaCare. Obama and liberals have also redefined the definition of poverty and now the number of people requiring government assistance has ballooned from 42% to 55%. They want to provide amnesty to illegal aliens, who are over 20% more likely to require government welfare assistance than native-born Americans. To see the true effects of welfare, we need to look no further than the inner city slums of Newark, New Jersey and Detroit, Michigan to see how liberal policies have progressively made the poor and minorities more dependent on the federal government. This is not only the result of welfare but quota systems such as diversity and affirmative action. These policies have failed miserably to provide equality, but instead enforce the fallacy that women and minorities are inferior to white males. The result of these policies, and welfare, has resulted in not only the decline of inner cities, but the decline of the family unit and corporate innovation to name a few.

My Book: Is American Dying? (Amazon.com, Barnes and Noble)

Change Tolerance (Part I)

With Obama and his cronies passing policies and legislation at the speed of light, it would be a good time for me to give my personal observations about individual’s tolerance for change and why it is not tolerated. People are creatures of habit and routine and do not like anything that will ruin their daily structure. People are so set in their ways they will for example sit in the same seat at church every week. Now Congress and the President have passed several bills in a short period of time that will adversely affect every Americans daily routine. The bills include the stimulus, SCIP, Cap and Trade (EPA), and now health care.

Granted, Americans need to be more open minded about change and not use it as an excuse to polarize. As the times change, Americans need to adjust. However, I would be the first person to admit that too much change in a short period of time is counter-productive. Unfortunately, that appeared to be the policy that my former employer followed on a regular basis. During the last seven years of my employment, my position was reorganized fifteen times. New bosses would have different priorities. Therefore, they would cancel some projects and create new ones. We went from a group that was introducing eighteen new products a year, to an organization that was only averaging one new product. The company would get frustrated with the lack of progress and make changes, not realizing it was the constant change that was paralyzing the organization. Ironically, shortly after I left the company, they had yet another reorganization, and the new group created was the same as the original organization seven years ago. In other words, after seven years trying to properly align my former organization with customer markets, it had gone in a complete circle. This is what can be referred to as “paralysis by over analysis”. Production is paralyzed because of the constant change. Managers felt they were aligning organizations better to support customers based on marketing data. However, data would vary and change dramatically in a short period of time, and it fluctuated depending on the source of the data. In effect, the seven years of reorganization could have negated over one hundred new products being introduced into the market place. The end result could have been millions in sales and profits. These bureaucratic policies support the “theory of mediocrity” because they prevent companies from maximizing their production output. Instead it forces companies to settle for lower production goals.

Another example of detrimental change is when companies paralyze productivity by adding layers of bureaucracy. My personal experience was that there was a group of employees working hard to get a product released to production, but there were ten other groups within the company putting up barriers to prevent them from completing the job. This sounds moronic, but departments such as manufacturing, human resources, project management, yield improvement, security, quality assurance, etc., created barriers that made it difficult to complete the job. Many of these organizations did not talk with each other and created redundant requirements. The bottom line was that over a twenty-one year period, the time required to finish a project job doubled. It is true that projects got more complicated, but at the same time, our experience, tools, and resources to do the job vastly improved. Some of the tasks that prolonged our job included more meetings, more paper work, more training, and more reviews. A lot of these checks and balances were put in place to deal with inefficient workers who were procrastinators. When I started my employment, there were no checklists to fill out. By the time I left, there were over fifteen checklists that had to be completed and reviewed with the corresponding department.

Do these problems sound familiar? They should. Inefficiency and bureaucracy can be seen in every piece of critical legislation the Obama administration has passed to date. Thus, the public will not tolerate these changes.

My Book: Is America Dying? (Barnes and Noble, Amazon.com)

Tuesday, July 26, 2011

Obama's Weekly Lowlights (7/26/11)

Bill Clinton – He compared the latest voting proposal by Republicans to the Jim Crowe laws, which discriminated against minorities.

Illegal Aliens – One illegal immigrant was found working in an Arizona nuclear power plant.

Budget – Obama says “Americans are sold on his plan but Congress is dug in ideology”. I am still waiting to see any plan proposed by Democrats made public. In the same speech Obama also proclaimed “raising taxes on the wealthy is not about raising tax revenue, but it is about fairness”.

Europe – Eight banks failed a stress test, Italy has made deep cuts in its budget, and Greece is still looking for a second bailout.

Indiana and Virginia – They finished the 2011 fiscal year with a budget surplus. Thank you governors Mitch Daniels and Bob McDonnell. Indiana and Virginia are two of 12 states that are no longer in the red.

Libya – The U.S. and 29 other nations have recognized the rebels (opposition to Kaddafi) as the official government of Libya.

Sheila Jackson-Lee – The Texas Congresswomen suggests that “Congress is challenging Obama on the debt ceiling because he is black”.

Balanced Budget Amendment – House Republicans brought forth and passed a bill “Cut, Cap and Balance” that would amend the Constitution to force Congress to have a balanced budget. President Obama said he will veto the bill, but Harry Reid killed the bill in the Senate.

Economy – Gold continues to hit record highs as economic indicators continue to be very weak.

Georgia – Police shutdown the lemonade stand of few 14 year old girls because they did not have a permit.

Fast and Furious – Investigations into the failed plan by the DOJ reveals they are protecting government appointees from the White House.

Afghanistan - The Associate Press reports: "Gen. David Petraeus handed over command of the Afghan war to Marine Gen. John Allen last week as the U.S. and its international partners prepare to withdraw over the next few years."
Gas Prices - Gas prices have topped four dollars per gallon in eight states.

Chicago – Newly elected mayor, Rahm Emanuel has laid off 625 city workers to close a massive budget shortfall.

Nevada DMV – They denied a request for a GOPALIN license plate.

Education – A recent study indicated that only 21% of fourth graders, 27% of eighth graders, and 20% of twelfth graders were proficient in both history and geography.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

A Federal Government Social Benefits Model

Below are the results of running a linear regression model on various economic data (obtained from the Bureau of Economic Analysis [BEA] government site) from 1947 to the present solving for the federal government social benefit economic parameter:

n 64

R2 1.00
Adjusted R2 1.00
SE 10.97

Term Coefficient 95% CI SE t statistic DF p
Intercept -55.01 -105.49 to -4.53 25.133 -2.19 50 0.0333
Population 0.09296 -0.18166 to 0.36757 0.136724 0.68 50 0.4997
Unemployment 5.535 2.082 to 8.987 1.7190 3.22 50 0.0023
Inflation 1.905 0.842 to 2.969 0.5296 3.60 50 0.0007
GDP -0.0464 -0.1096 to 0.0168 0.03149 -1.47 50 0.1469
Debt 0.04623 0.02420 to 0.06826 0.010967 4.22 50 0.0001
Tax Receipts -0.1289 -0.2387 to -0.0191 0.05468 -2.36 50 0.0224
Gov Spending 0.03361 -0.09428 to 0.16151 0.063674 0.53 50 0.5999
Budget 0.1459 0.0045 to 0.2873 0.07039 2.07 50 0.0434
Trade Deficit -0.1554 -0.2358 to -0.0749 0.04006 -3.88 50 0.0003
Consumer Spending -0.2064 -0.3426 to -0.0703 0.06778 -3.05 50 0.0037
State Deficit 0.2576 -0.0902 to 0.6053 0.17314 1.49 50 0.1431
State Social Payment 2.005 1.435 to 2.575 0.2839 7.06 50 <0.0001
Personal Income 0.2481 0.1713 to 0.3248 0.03820 6.49 50 <0.0001


The economic parameters used to model federal government social benefit payments over the past 64 (n) years are: the U.S. population, the unemployment rate, the inflation rate, the U.S. Gross Domestic Product (GDP), federal government debt, federal government tax receipts, federal government spending, the federal government budget levels, the federal trade deficit, consumer spending, state government budget levels, state government spending on social benefits, and personal income. The intercept value in the above table is not a parameter – it is the value of federal government social benefit payments (in billions of dollars) if all other parameters equal zero. These economic parameters are denoted in the above table.

The R² statistic illustrates how closely the linear regression model resembles a straight line (the ideal condition). If R² equals one then the model is 100% linear and the parameters correlate 100%. On the other hand, if R² is equal to zero then there is no correlation and the data in the linear regression model is completely random. T statistics reveal which of the economic parameters has the best correlation to the parameter being tested (Federal Social Benefits in this case). The higher the absolute value of the t statistic, the better the correlation the corresponding economic parameter has to the tested variable (Federal Social Benefits in this case). If a coefficient value of an economic parameter is positive then it trends in the same direction of the tested variable (Federal Social Benefits in this case). If a coefficient value is negative then the corresponding variable trends in the opposite direction of the tested variable (Federal Social Benefits in this case). It is time to do some math to prove higher taxes and government spending cripple economies. What economic parameters have the biggest effect on federal government social benefit expenditures?

It should come as no surprise that as unemployment, inflation, federal debt, the federal budget, state deficits, and state social benefit payments all increase then federal social benefit payments also increase. As economic times improve and GDP, federal tax receipts, the trade deficit, and consumer spending increase then federal social benefit payments decrease.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Thursday, July 21, 2011

Obama's Weekly Lowlights (7/21/11)

Allan Grayson – He’s back. Grayson is running again for the Florida House seat he lost in 2010. This is good news for Republicans because Grayson is the most repulsive politician in U.S. history (and that is saying a lot).

Move On – Michelle Obama displayed her hypocrisy over the fitness program she is pushing on American kids when she ordered a 1700 calorie dinner at a new DC diner.

Independent Payment Advisory Board (IPAB) – IPAB is the Obama administration’s idea to implement rationing of healthcare. When ObamaCare goes into law in 2014, IPAB will decide what medical procedures are necessary and what medical procedures are not.

Christian Lopez – Lopez is an amazing story, he caught the home run that New York Yankee Derek Jeter hit for his 3000 career hit. Lopez did not hold the ball ransom and gave it back to Jeter. The Yankees rewarded Lopez with season tickets and memorabilia. Now the IRS wants to tax Lopez for the gifts he received. This is just another story of how good behavior is penalized and where bad behavior is continually rewarded.

Campaign Contributions – The Democrats continue to receive more campaign finance contributions than the GOP. Obama raised 47 million in the second quarter while all GOP candidate combined raised 39 million (over 18 million was garnered by Romney). The DNC also outdistanced RNC contributions 2 to 1.

Ground Zero Mosque – Imam Faisal Rauf has gotten the okay from the New York legal system to build his New York City mosque at a location a bit further away from ground zero, but he is still seeking federal assistance to fund the building.

Wisconsin – Six Republicans and 3 Democrats face recall elections. The Democrats will need to pick up 3 seats to take over control of the upper house.

Journal of the American Medical Association – They wrote an article stating that obese children should be moved into child protective services (in other words, it is abuse). It is amazing how the vicious cycle of the progressive nanny state works: First, governments have stepped in and reduced physical education, recess time, games kids can play at recess, and have even written the school food menus. But now it is the parents’ fault that their kids are overweight.

Fox News - Congressmen including Sen. Jay Rockefeller (D-WV) are calling for an investigation into Rupert Murdoch’s News Corp., which owns Fox News and the Wall Street Journal. Another News Corp. newspaper, Britain’s News of the World, closed over the weekend after its reporters were accused of hacking into phones of politicians, crime victims and others.

Polls - President Obama’s popularity in Arab countries has declined—and is now lower than President George W. Bush’s.

Moody’s and S&P – The rating companies have publicly stated if the U.S. defaults on its loans they will downgrade the rating of U.S. Treasury bonds. This could be significant because it would cost the U.S. more in interest payments to borrow money.

Healthcare – According to the NY Times, during the 2008 campaign, Obama lied to the American public by stating insurance companies would not cover his mother because she had a preexisting condition. Obama’s mother died shortly after that statement. This was obviously done to gain political points for his healthcare reform agenda.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Welfare (Part V)

The growing homeless population in this country is another example that demonstrates that welfare and social programs are failing. In the Dallas metropolitan area, there has been a drastic spike in homeless people living on the streets and pan-handling for money on every street corner. The United States spends nearly twenty percent of its budget to address the poor, but for some reason a large population of poor people are being ignored. Therefore, welfare is not only failing people because it promotes laziness, but it is also ignoring thousands of people. There also seems to be correlation between the homeless and those affected by mental illness. Some may have become homeless because of a mental disorder, while others may have developed a mental disorder by being homeless. In either scenario, it is making our neighborhoods more dangerous, and our government is failing to address the problem. Homeless people should be offered work through a social program that pays them to fix city infrastructure problems. If they refuse to work and continue to remain homeless, they should be imprisoned and taken off the streets. Those with mental illnesses should be treated at a mental institution and remain there until they can work and support themselves. It makes more sense to spend money on prison space and mental institutions than give individuals that refuse to work any money. People who give money to homeless people are only enabling that behavior. Worse yet, they are probably using the money they earn to support a drug or alcohol addiction. A homeless person will continue to beg for money in a certain location as long as people continue to give them money. It is sad, but the homeless situation is becoming a serious epidemic in this country, and it needs to be addressed. Homeless people who are not getting money can resort to crime to survive and/or to support their addictions.

Entitlement and social programs such as welfare have become a right to those that collect these funds. It is not one of our rights in the Constitution, but it has become an unwritten right of the poor. Our government will support the poor from birth to death. This is not necessarily the fault of the poor, but the fault of our government who has taught them that they will take care of them with entitlement programs. This is wrong and ought to stop because this policy is leading us into debt and bankruptcy, and it is not correcting the problem of the growing poor population in our nation.

President Barack Obama has already proposed increasing those receiving welfare to include middle class Americans who do not pay income taxes (That means over fifty percent of all Americans will be on welfare). This is Keynesian Economics and most Democrats adhere to this policy. They believe a strong economy is build from the bottom up. Under an Obama administration it seems as if welfare is growing to astronomical levels. On the surface, this is alarming. Today, nearly fifty percent of our national budget is used to fund welfare, social security, and Medicare. Hence, growing welfare will certainly strain our already fragile national budget and debt. That being said, welfare is one area that I am remotely hopeful that Obama can reform it at some point in his administration (he may be forced by Republicans during debt debates). A white President cannot reform welfare without being called a bigot or racist, however this is an area a black President may be able to make progress. Obama has already asked black males to be more responsible and that is a step in the right directions. If he is able to reform welfare (Republicans force him to reform welfare), it is possible that diversity programs, affirmative action, and quota systems could be the next racial issues to be reformed. This would be refreshing. However, Obama would have to stand up and fight civil rights leaders to get these changes implemented, and it remains to be seen if he is willing to take up this fight. It seems Obama is not up to the task since ObamaCare has expanded welfare in our country. Thus, we are heading in the wrong direction under Obama.

My Book: Is America Dying? (Barnes and Noble, Amazon.com)

Sunday, July 17, 2011

Obama's Weekly Lowlights (7/17/11)

Bill Lynn – The Deputy Defense Secretary has decided to step down from his Pentagon post.

Inflation - Bloomberg News reports "President Barack Obama and lawmakers are considering cutting Social Security and increasing revenue by changing the way the government measures inflation."

CNN - In a press release issued this past week, the NAACP blasts CNN for its lack of diversity in its recently announced prime time news lineup. They’re right, in a sense: there are still no conservatives in the lineup.

EPA – They are implementing a new law called the Cross State Air Pollution Rule that will charge coal power plants fees for emissions that cross state lines. I wonder how much it cost to implement a method to measure this absurd policy?

Louisiana – They passed a new law to discourage the hiring of illegal aliens.

David Ploufee – Obama’s senior campaign advisor said that people will not vote in 2012 based on the unemployment rate. I think 9.2% of Americans beg to differ as well as the 5 million folks that fled the workforce and have completely given up on finding a job. Even White House Press Secretary Carney has said Americans do not care about GDP and unemployment statistics.

Gun Control – The Obama administration, once again, will bypass Congress and have the DOJ implement new gun “safety” laws. They are particularly targeting gun shops near the border. What gives the Obama administration any right to regulate gun shops; especially given their record on the “Fast and Furious” project?

NASA – The U.S. space program is now officially dead with the last space shuttle mission in progress.

Light Bulbs – The House is trying to repeal the 2007 Energy Independence and Security Act that will ban incandescent light bulbs next year.

Civility – Republicans are routinely being called terrorists and compared to Nazis by liberal media personalities (i.e. Chris Matthews and Tina Brown) for not raising the debt ceiling.

Nancy Pelosi – Several sources including Time and Politico have written articles about how marginalized Pelosi has been in the debt debate.

TalkingPointsMemo – They actually wrote an article demonizing Paul Ryan for having the gall to drink an expensive wine – you know the guy that wants to destroy entitlements and push granny off a cliff. Maybe liberals can write a law regulating or making expensive wines illegal.

Pakistan – The U.S. suspended 800 million in aid to Pakistan after they denounced the Bin Laden killing.

Debt Ceiling – Obama calls the 76% of Americans who don’t want to raise the debt ceiling as “uninformed”.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

State and Social Benefits Model

Below are the results of running a linear regression model on various economic data (obtained from the Bureau of Economic Analysis [BEA] government site) from 1947 to the present solving for the individual state social benefit economic parameter:

n 64

R2 1.00
Adjusted R2 1.00
SE 3.87

Term Coefficient 95% CI SE t statistic DF p
Intercept -0.05944 -18.68551 to 18.56664 9.273352 -0.01 50 0.9949
Population -0.006422 -0.103646 to 0.090803 0.0484051 -0.13 50 0.8950
Unemployment -0.2451 -1.5805 to 1.0903 0.66485 -0.37 50 0.7139
Inflation -0.1318 -0.5508 to 0.2872 0.20860 -0.63 50 0.5303
GDP 0.006232 -0.016470 to 0.028933 0.0113023 0.55 50 0.5838
Debt -0.0006797 -0.0097169 to 0.0083575 0.00449934 -0.15 50 0.8805
Tax Receipts 0.005785 -0.034988 to 0.046557 0.0202994 0.28 50 0.7768
Gov Spending -0.003856 -0.049047 to 0.041334 0.0224990 -0.17 50 0.8646
Budget -0.08189 -0.12832 to -0.03546 0.023116 -3.54 50 0.0009
Trade Deficit 0.05975 0.03221 to 0.08729 0.013711 4.36 50 <0.0001
Consumer Spending 0.129 0.092 to 0.166 0.0185 6.96 50 <0.0001
State Deficit -0.06561 -0.18947 to 0.05826 0.061669 -1.06 50 0.2925
Gov Social Benefits 0.2491 0.1782 to 0.3199 0.03527 7.06 50 <0.0001
Personal Income -0.08997 -0.11633 to -0.06360 0.013125 -6.85 50 <0.0001


The economic parameters used to model state government social benefit payments over the past 64 (n) years are: the U.S. population, the unemployment rate, the inflation rate, the U.S. Gross Domestic Product (GDP), federal government debt, federal government tax receipts, federal government spending, the federal government budget levels, the federal trade deficit, consumer spending, state government budget levels, federal government spending on social benefits, and personal income. The intercept value in the above table is not a parameter – it is the value of state government social benefit payments (in billions of dollars) if all other parameters equal zero. These economic parameters are denoted in the above table.

The R² statistic illustrates how closely the linear regression model resembles a straight line (the ideal condition). If R² equals one then the model is 100% linear and the parameters correlate 100%. On the other hand, if R² is equal to zero then there is no correlation and the data in the linear regression model is completely random. T statistics reveal which of the economic parameters has the best correlation to the parameter being tested (State Social Benefits in this case). The higher the absolute value of the t statistic, the better the correlation the corresponding economic parameter has to the tested variable (State Social Benefits in this case). If a coefficient value of an economic parameter is positive then it trends in the same direction of the tested variable (State Social Benefits in this case). If a coefficient value is negative then the corresponding variable trends in the opposite direction of the tested variable (State Social Benefits in this case). It is time to do some math to prove higher taxes and government spending cripple economies. What economic parameters have the biggest effect on state government social benefit expenditures?

As the federal government increases social benefit payments so do the states. Also, as consumers increase spending and the trade deficit increases so do state social benefit payments. As personal incomes and state deficits increase then state social benefit payments decrease. It is strange how state government budget deficits and social benefit payments are inversely related in this model.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Welfare (Part IV)

A good solution for welfare would be if it were run similar to the Franklin Delano Roosevelt (FDR) social program: the Civilian Conservation Corps (CCC). The CCC was an example of “one of the few” social programs introduced by FDR that had a “minute” level of success (I know I will catch the wrath of conservatives for this statement – and probably rightfully so. Just for the record – I will say it - FDR’s New Deal was an overall failure – the CCC was a small part of the New Deal. I am merely using this example to compare American work ethic and propose Workfare over Welfare – not to promote government sponsored jobs. I realize the CCC would have been more successful if it was run by the private sector and not by the government.) The CCC provided government money to employ thousands of workers affected by the Great Depression. The CCC built a lot of the U.S. transportation and energy infrastructure that is still used today. They constructed damns, roads, bridges, and other structures. In return, they received a government subsidy. The people that worked on the CCC had amazing character. Many of these individuals had high paying white-collar jobs, but would do anything to support their families. They not only took the hard labor jobs offered by the CCC; they excelled at it. They took pride in their job, and today, the symbol CCC marks many of their achievements and accomplishments. They built thousands of miles of roads and hundreds of bridges. Today, the American people have less character and pride, and most think this type of work is beneath them. Even if they needed a job, they would not do this type of work. Individuals today are more inclined to collect welfare or unemployment, and expect the government to bail them out. Americans are too spoiled, lazy, and selfish to do what is best for themselves, families, or their country. It is unfortunate, but the only way these types of social programs, such as the CCC, will function today if it is mandatory enrollment for prisoners and high school dropouts. It is highly unlikely there will be any volunteers such as back in the thirties when Americans had more honor. Conversely, welfare would be a good program if it were paid to individuals for cleaning up their neighborhoods and inner cities. Once the infrastructure is restored to decaying inner cities, it would invite small businesses to move in and consequently generate jobs. Other types of innovative jobs that people on welfare can perform are projects to help promote “green” technology (instead of taxing Americans more to pay for energy independence projects supported by most liberal ideologies). They can help to build renewable energy source power plants such as wind farms. This policy has been proposed in the past and is called “Workfare”. It was last proposed by the Clinton Administration. Workfare is a much better policy than welfare. Unfortunately, those liberal pundits that are against Workfare are very powerful and call the policy fascism or slave labor. This is obviously not true, but what politician wants every civil rights leader in the country calling them a racist. It would be political suicide to try to enact Workfare instead of Welfare. Hence, welfare reform may never happen.

In summary, I am not in favor of welfare, period. However, in my opinion, welfare is here to stay if it is not reformed. One reform is to have welfare recipients’ work for their benefits. This is one way to reduce the dependence of individuals on welfare since this generation of Americans is lazy and will not work hard labor jobs as the “Great Generation” did. After all, Obama’s stimulus saw the unemployment rate go up over 1% - “Shovel ready jobs was not really shovel ready”.

My Book: Is America Dying? (Barnes and Noble, Amazon.com)

Friday, July 15, 2011

10 Worst Tax-Friendly States

This is a good article by Kiplinger.com. Interestingly, 9 of the 10 states are for the most part liberal states, which voted for Obama in 2008. These states work to not only drive away retirees, but the working class and industry. A few states on this list, such as Wisconsin and New Jersey, are trying to change for the better. Kiplinger.com did a similar article rating the top 5 tax friendly states to retire. They were Wyoming, Mississippi, Pennsylvania, Kentucky, and Alabama. It comes as no surprise that 4 of these states are conservative strongholds.

Some states offer attractive tax benefits for retirees. Then there are these ten tax hells, which have earned a place on our "do not live here for your second act" list either because of higher-than-average taxes across the board or because of policies that don't exempt much retirement income from state taxation.
For retirees living on a fixed income, high income taxes, burdensome real estate taxes and hefty sales taxes on daily purchases can really eat into a nest egg. Choosing to relocate to — or stay put in — a state with a low overall tax burden can help stretch your retirement income.
#1 VERMONT
State Income Tax: 3.55%-8.95%
State Sales Tax: 6% (localities can add another 1%)
Estate Tax/Inheritance Tax: Yes/No
There are no exemptions for retirement income in the Green Mountain State, except for Railroad Retirement benefits (which are exempt in every state). Out-of-state pensions are fully taxed. Vermont exempts medical devices and prescription and nonprescription drugs from its 6% sales tax. But it imposes a 9% tax on prepared foods, restaurant meals and lodging, and a levies a 10% sales tax on alcoholic beverages served in restaurants. Real estate taxes have two components: school property tax and municipal property tax collected by towns and cities where the property is located. The Tax Foundation, a nonprofit tax-research group in Washington, D.C., lists Vermont's property tax among the ten highest in the nation.
#2 MINNESOTA
State Income Tax: 5.35%-7.85%
State Sales Tax: 6.875% (cities and counties can add another 2.65%)
Estate Tax/Inheritance Tax: No/No
Minnesota offers retirees cold comfort on the tax front. Social Security income is taxed to the same extent it is taxed on your federal return. Pensions are taxable regardless of where your pension was earned. Income-tax rates are high, and sales taxes can reach 9.53% in some cities. Food, clothing, and prescription and nonprescription drugs are exempt from sales taxes. The North Star State does offer some residents 65 and older who have income of $60,000 or less the option of deferring a portion of their property tax. But this is a low-interest loan, not a tax-forgiveness program.
#3 NEBRASKA
State Income Tax: 2.56%-6.84%
State Sales Tax: 5.5% (localities can add another 1.5%)
Estate Tax/Inheritance Tax: No/Yes
There are no tax breaks for Social Security benefits and military pensions in the Cornhusker State. Real estate is assessed at 100% of fair market value. Residents 65 and older qualify for a homestead exemption on property taxes. Food and prescription drugs are exempt from state sales taxes. But Nebraska imposes an inheritance tax on all transfers of property and annuities.
#4 OREGON
State Income Tax: 5%-11%
State Sales Tax: None
Estate Tax/Inheritance Tax: No/Yes
First, the upside: There's no state sales tax in the Beaver State. But it shares the distinction with Hawaii of imposing the highest tax rate on personal income in the nation on taxable income of $250,000 or more. Although Oregon does not tax Social Security benefits, that's the extent of its income-tax breaks for retirees. And Oregon has an inheritance tax that applies even to intangible personal property, such as investments and bank accounts, no matter where it is located.
#5 CALIFORNIA
State Income Tax: 1.25%-9.55%
State Sales Tax: 7.25% (effective July 1, 2011)
Estate Tax/Inheritance Tax: No/No
The Golden State has lost its luster for many retirees. Although Social Security benefits are exempt from state income taxes, all other forms of retirement income are fully taxed. Californians pay some of the highest income taxes in the U.S., with the top rate of 9.55% kicking in at $46,767 of taxable income. State and local sales taxes can reach 9.25% in some cities, although food and prescription drugs are exempt. Real estate is assessed at 100% of cash value, but taxes are capped at 1% of value.
#6 MAINE
State Income Tax: 2%-8.5%
State Sales Tax: 5% (counties can add another 0.5%)
Estate Tax/Inheritance Tax: Yes/No
Like the majority of states, Maine exempts Social Security benefits from state income taxes. And residents can deduct up to $6,000 per person of eligible pension income. But remaining income in excess of $20,150 per year is taxed at a steep 8.5% rate. Residents of the Pine Tree State pay a 5% sales tax statewide on everything except food and prescription drugs. All real estate and personal property is subject to local property taxes (and, in some cases, state property taxes, too), but permanent residents can receive an exemption of $10,000 on the assessed value of their home. Maine is also one of only three states that do not allow cities and towns to impose their own local sales taxes.
#7 IOWA
State Income Tax: 0.36%-8.98%
State Sales Tax: 6% (localities can add another 1%)
Estate Tax/Inheritance Tax: No/Yes
The Hawkeye State offers no feathered nest for retirees. Although it allows single retirees to exclude up to $6,000 of retirement-plan distributions from state income taxes, and married couples can exclude up to $12,000, the rest is taxed at rates as high as 8.98%. Iowa taxes a portion of residents' Social Security benefits, too, although it is in the process of phasing out the Social Security tax, which is scheduled to disappear in 2014. Food and prescription drugs are exempt from the statewide 6% sales tax. Real estate is assessed at 100% of market value, and most property is taxed by more than one taxing authority, such as cities, counties and school districts. There is a small homestead tax credit for residents who live in-state at least six months of the year.
#8 WISCONSIN
State Income Tax: 4.6%-7.75%
State Sales Tax: 5% (counties can add another 0.5%)
Estate Tax/Inheritance Tax: No/No
The Dairy State exempts Social Security benefits and military-related pensions from its state income taxes, but it taxes most other pension and annuity income the same way the federal government does. Retirees 65 and older can subtract $5,000 of qualified retirement income, including IRA distributions, from their Wisconsin taxable income, subject to income restrictions. Some Wisconsin state- and local-government retirees qualify for a tax exemption. But out-of-state government pensions are fully taxed. Food and prescription drugs are exempt from state sales taxes. Some homeowners may qualify for a school property-tax credit against their state income tax.
#9 NEW JERSEY
State Income Tax: 1.4%-8.97%
State Sales Tax: 7%
Estate Tax/Inheritance Tax: Yes/Yes
Its nickname may be the Garden State, but New Jersey is no Eden for retirees. The Tax Foundation says New Jersey's combined state and local tax burden is the highest in the nation, thanks in part to sky-high property taxes. But there are a few bright spots: New Jersey does not tax Social Security benefits and military pensions. It also allows residents 62 or older with incomes of $100,000 or less to exclude up to $15,000 ($20,000 for married couples filing jointly) of retirement income, including pensions, annuities and IRA withdrawals. Groceries, medicine and clothing are exempt from the 7% statewide sales tax. The state imposes an inheritance tax on the transfer of real and personal property worth $500 or more, but bequests to family members are exempt. Even with the bright spots, it's an expensive place to live for retirees.
#10 CONNECTICUT
State Income Tax: 3%-6.7%
State Sales Tax: 6.35%-7%
Estate Tax/Inheritance Tax: Yes/No
Connecticut can be inhospitable to retirees, depending on their income and where they earned their retirement benefits. Although some residents of the Constitution State can exclude their Social Security benefits from state income taxes, the exclusion applies only if their adjusted gross income is $50,000 or less ($60,000 or less for married couples). All out-of-state government and civil-service retirement pensions are fully taxed. Effective July 1, 2011, the sales tax rate statewide is 6.35%, with luxury items taxed at 7%. Connecticut residents pay some of the highest property taxes in the U.S., according to the Tax Foundation, but residents 65 and older qualify for an annual property tax credit or rent rebate.

Thursday, July 14, 2011

Obama's Weekly Lowlights (7/14/11)

Affirmative Action – The U.S. 6th Circuit Court of Appeals has issued a ruling stating Michigan’s ban on Affirmative Action is illegal.

Iran – The Wall Street Journal did a piece on how Iran is providing both Iraq and Afghanistan rebels weapons to fight U.S. troops.

Humberto Leal Garcia – Garcia, a Mexican national, was convicted and sentenced to death for the 1995 kidnapping, rape, and murder of a 16 year old Texas girl. The Obama Justice Department pleaded with SCOTUS to get a stay in the execution saying it is a violation of the Vienna Convention and could open the U.S. to retaliation attacks. The execution was carried out as planned this past week.

Fox News – There is an investigation into who hacked their twitter account and posted unconscionable statements such as “Obama is dead”.

U.K. Embassy – England unveiled a statue of Ronald Regan outside the U.S. Embassy in the U.K. Unfortunately, Obama’s ambassador to England was too busy to attend.

Andrew Cuomo – There have been rumors and the NY Post published an article predicting that Obama will drop Joe Biden from the 2012 ticket and replace him with New York governor – Andrew Cuomo.

Fast and Furious – The scandal is spreading to include not only the ATF, but it has been revealed that both the FBI and DEA were also involved in the failed operation.

Fort Hood Shooter – Good news, Major Malik Hassan, the shooter that killed 13 people will face the death penalty when he is put on trial.

Elliot Spitzer – CNN has cancelled his show because the ratings were abysmal.

Debt Ceiling – Republicans are proposing that the Fed burn 1.6 trillion dollars of debt it incurred during its two quantitative easing programs. After all, this is money the government owes to itself. The catch however, will be how the default will affect the global economy.

National Security – U.S. intelligence says that militants are exploring the use of surgically implanted suicide bombs.

California – They are writing legislation that would make it mandatory for social studies classes to teach gay history.

Terrorists – A Somalia terrorist has been extradited to the U.S. and will face trial in a civilian court. He is currently being held on a Navy ship, not Guantanamo.

Tea Party – Gallup and other polling groups have placed the number of Tea Partiers, who are registered Democrats, between 10 to 15%.

Taxis – The District of Columbia is trying to regulate the taxi industry by eliminating the number of cabs on city roads.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Wednesday, July 13, 2011

Welfare (Part III)

If the welfare program is not reformed to only pay those that are helping themselves or their community, it should still be changed to be incentive-based. The first incentive in order to receive a welfare check should include passing a urine analysis test. This is aimed at stopping welfare checks from supporting a person’s drug or alcohol addiction. Other incentive based ideas are to only provide a welfare check to those families that have both parents raising their children. Statistics indicate children raised with two parents are more likely to succeed than those being raised by single parents. Today, mothers or grandmothers are raising many African-American children. The chance of an African-American child to succeed is much less likely today than back in the sixties or seventies, when black family values were enforced. The same thing can be said about Caucasian and Hispanic families. This policy is to provide an incentive to keep families together. Welfare should not be provided to children born out of wedlock. This policy is intended to provide incentive to slow teen and other unwanted pregnancies. However, the latter policy may force teens to have an abortion, and that would not be an ideal situation either. The goal is to provide incentives to force minorities and the poor to be more responsible to help themselves, their families, and communities to succeed. Statistics indicate that part of the reason for the increase in the fertility rate to two point one in 2006 was because teen and single mother pregnancies have increased as has babies born in poverty. This only illustrates this is still a problem in our country, and it needs to be addressed. These statistics also showed the birth rate to be much higher for minorities. Hispanics had fertility rates of three while African-Americans had fertility rates of two point one, which is ten percent higher than whites. Fertility rates are considerably lower for educated females and females with career opportunities. When removing white females with Evangelical or Mormon ties out of the fertility rate statistics, minority women have considerably higher birth rates than whites. These statistics only reinforce the theory of mediocrity at work. More children are being born in poverty, which means the growing division between the rich and poor will only get larger. It also means that the trend of entitlement and social program funding will continue to grow to be a larger portion of our government’s fiscal budget.

My aunt is a principal in an entirely black grade school in the Baton Rouge, Louisiana area. She has been trying for years to change the mindset of young minority women who do poorly in school. They do not think they need to be able to read or write, or do simple math because when they grow up, they are going to collect welfare and raise kids, just like their mothers. This is no fault to these children because they do not know any better. This is what their environment teaches them on how to live their life. This is what they think is a normal life. It is sad, but we have ourselves to blame for it because our government is enabling not only minorities, but also any poverty-stricken person to think this way. Teenagers who have babies are eligible for welfare. How is this policy incentive to not have children? Welfare is probably the major cause of why we have so many illegal immigrants in this country. Welfare teaches people to become lazy. Why take a low paying, hard labor job if the poor can get money for doing nothing? The poor are becoming lazy, and it opens up many jobs for illegal immigrants to fill.

My Book: Is America Dying? (Barnes and Noble, Amazon.com)

Tuesday, July 12, 2011

Ten Incentive Ideas to Help America

1. Education - Make it a requirement for citizens to obtain a high school or trade school diploma in order to obtain the right to vote or drive. Those that drop out should be automatically enrolled in the Armed Forces. The goal of this idea is to diminish the high school drop out rate since these individuals are at the most risk of living lives dependent on government entitlements.

2. HealthCare – Healthier people should pay lower insurance premiums while unhealthy people should pay higher insurance premiums and fees for self inflicted problems. The goal is to lower healthcare costs by reducing the demand for medications and doctors by providing incentives for individuals to be healthier.

3. Politics – It would be advantageous to institute term limits and move back to the old method of having state legislators selecting senators. The goal of this proposal is to mitigate the effects of present day Washington politicians who are out of touch with Main Street because they answer to special interests and not the people. Also, the government should make the following transparent to the public: the fiscal consequences of each politicians voting record. In other words, show how much of a budget surplus or deficit is the result of how politicians voted on legislation.

4. Frivolous Lawsuits – The losing party in any lawsuit should be liable for all court expenses including the litigation fees from the winning party. The goal is to reduce frivolous lawsuit claims, which will help keep prices for goods and services lower.

5. Entitlement Reform – Nothing should come for free, entitlement recipients should be required to do at least 30 hours of weekly volunteer service that makes a positive impact towards society. Also, it would be wise to institute a lifetime cap on entitlement payments per person. For instance, a maximum of 4 years of unemployment or 15 years of welfare benefits may be a good compromise. The goal is to redefine and rename social programs from entitlement benefits to responsibility benefits.

6. Judicial Reform – Increase jail sentences for any violent criminal offenses. Jail space can be increased two fold by doing the following: When one shift is working in the field on local infrastructure projects the second shift is housed in prison cells and vice versa. The goal is to decrease the incentive for individuals to commit crimes.

7. Energy – Reward individuals and corporations (per capita) that use less energy (top 33% should receive a 33% discount) with lower rates meanwhile high energy users (bottom 33% should pay a 33% premium) should be penalized with higher rates. The goal is to lower energy consumption and make America less dependent on foreign oil.

8. Economy – Institute a fair tax and repeal the sixteenth amendment which would do away with the income tax. This will first eliminate the need for the IRS. Secondly, the fair tax will result in more monies in both the pockets of corporations and individuals while at the same time increasing the tax revenue base for the United States Treasury. A fair tax will provide fewer incentives for illegal immigrants to come to the United States and will dramatically cut into the profits of black market crime activities including drug, prostitution, human trafficking, and so forth.

9. Immigration Reform – Institute a national identification card that all citizens must carry and use for employment. Companies that hire illegal aliens must be prosecuted with harsh penalties including mandatory fines and imprisonment.

10. Special Interests – Institute right to work laws to mitigate the influence and power of unions on both politics and industry. The goal is to eliminate government restrictions, mandates, and regulations on corporations. This, in turn, will make it easier for U.S. corporations to compete globally.

The purpose of these provisions is to help motivate individuals, corporations, and politicians with incentives that will enable them to become more responsible and accountable for their actions.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Monday, July 11, 2011

State Budget Model

Below are the results of running a linear regression model on various economic data (obtained from the Bureau of Economic Analysis [BEA] government site) from 1947 to the present solving for the individual state budget economic parameter:


n 64

R2 0.96
Adjusted R2 0.95
SE 8.77

Term Coefficient 95% CI SE t statistic DF p
Intercept -23.78 -65.48 to 17.91 20.759 -1.15 50 0.2573
Population 0.08521 -0.13397 to 0.30439 0.109125 0.78 50 0.4386
Unemployment 1.997 -0.982 to 4.975 1.4831 1.35 50 0.1843
Inflation 0.1056 -0.8478 to 1.0591 0.47469 0.22 50 0.8249
GDP 0.0491 -0.0006 to 0.0988 0.02475 1.98 50 0.0528
Debt 0.01429 -0.00580 to 0.03439 0.010003 1.43 50 0.1593
Tax Receipts 0.2714 0.2202 to 0.3226 0.02549 10.65 50 <0.0001
Gov Spending -0.2278 -0.3073 to -0.1483 0.03958 -5.76 50 <0.0001
Budget 0.2375 0.1410 to 0.3341 0.04805 4.94 50 <0.0001
Trade Deficit -0.05445 -0.12616 to 0.01725 0.035701 -1.53 50 0.1335
Consumer Spending -0.03384 -0.15193 to 0.08425 0.058793 -0.58 50 0.5675
Gov Social Benefits 0.1646 -0.0576 to 0.3867 0.11062 1.49 50 0.1431
State Social Payment -0.3374 -0.9744 to 0.2996 0.31713 -1.06 50 0.2925
Personal Income -0.1285 -0.2034 to -0.0537 0.03726 -3.45 50 0.0011



The economic parameters used to model state government deficit levels over the past 64 (n) years are: the U.S. population, the unemployment rate, the inflation rate, the U.S. Gross Domestic Product (GDP), federal government debt, federal government tax receipts, federal government spending, the federal government budget levels, the federal trade deficit, consumer spending, state government spending on social benefits, federal government spending on social benefits, and personal income. The intercept value in the above table is not a parameter – it is the value of state government budget levels (in billions of dollars) if all other parameters equal zero. These economic parameters are denoted in the above table.

The R² statistic illustrates how closely the linear regression model resembles a straight line (the ideal condition). If R² equals one then the model is 100% linear and the parameters correlate 100%. On the other hand, if R² is equal to zero then there is no correlation and the data in the linear regression model is completely random. T statistics reveal which of the economic parameters has the best correlation to the parameter being tested (State Budgets in this case). The higher the absolute value of the t statistic, the better the correlation the corresponding economic parameter has to the tested variable (State Budgets in this case). If a coefficient value of an economic parameter is positive then it trends in the same direction of the tested variable (State Budgets in this case). If a coefficient value is negative then the corresponding variable trends in the opposite direction of the tested variable (State Budgets in this case). It is time to do some math to prove higher taxes and government spending cripple economies. What economic parameters have the biggest effect on state budgets?

It should come as no surprise as the federal government raises more tax revenues, spends more on entitlements, and increase their budget and deficit levels – so do the individual states. On the other hand, increased levels in personal income, consumer spending, and federal government spending can lead to lower budget deficits (states can collect more in sales taxes).

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Saturday, July 9, 2011

Obama's Weekly Lowlights 7/9/11

Economy – The private sector added mere 18 thousand jobs while the unemployment rate increased to 9.2%. And what’s worse the labor force continues to shrink and updated labor numbers for April and May have dropped by 44 thousand jobs.

Planned Parenthood – State and federal cuts in funding to Planned Parenthood will save the taxpayers over 60 million dollars thus far this year.

UN – The United Nations named North Korea as the head chair of the Disarmament Conference.

Businesses – According to CNBC, the best states to start a business are Virginia and Texas. Not surprisingly, the worst states are California and Illinois.

John Conyers – The Michigan Representative had this to say about his new Republican colleagues: “This is the first time that I can remember being confronted by members of the Congress, my colleagues, who say, ‘I don’t care if I get reelected or not, I want to cut the budget by $100 billion or whatever,’” said a bewildered Rep. John Conyers (D-Mich.), who was first elected to Congress in 1964. “I’ve never seen that kind of a member before. … It’s a dangerous point of view from my perspective.”

Muslim Brotherhood – The Obama administrations has agreed to establish contact with the Egyptian terrorist organization.

TSA – A Nigerian man slipped passed screeners using an old boarding pass at a California airport.

Polar Bears - U.S. District Judge Emmet Sullivan ruled that a May 2008 decision by the U.S. Fish and Wildlife Service to place the bear on the endangered species list as threatened because of melting sea ice was rational given the facts and best available science.

Mark Halperin – MSNBC rightfully suspended Halperin for using a derogatory comment to describe Obama. However, MSNBCs suspension policy is not equally applied to those analysts on their network that have used crass language when describing Bush, Palin, or other conservatives.

Republicans - A new Harvard University study finds that July 4th parades energize only Republicans, turn kids into Republicans, and help to boost the GOP turnout of adults on Election Day.

Rolling Stone – Matt Taibbi of Rolling Stone Magazine wrote this about Michelle Bachmann: “Bachmann is a religious zealot whose brain is a raging electrical storm of divine visions and paranoid delusions… Bachmann's entire political career has followed this exact same pattern of God-speaks-directly-to-me fundamentalism mixed with pathological, relentless, conscienceless lying.”

Minnesota – The government is shutting down after talks failed to reach a budget agreement.

Russia - The AP reports, "Russia's defense minister says the military will deploy two army brigades to help protect the nation's interests in the Arctic."
Hugo Chavez - Venezuela's leftist leader Hugo Chavez has been stricken with cancer. He underwent surgery in Cuba this past week.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Welfare Part II

Here is an analogy to a similar set of circumstances in my life as to why I disagree with government sponsored welfare programs. My brother is an alcoholic, and if I give him money, it only enables him to buy booze. He has no job and is over fifty thousand dollars in debt, and I cannot give him any money. It pains me, and he may ultimately die young. But, if he does not help himself, he will never recover. This sounds cruel, but anyone that goes to Alcoholics Anonymous (AA) will tell you the same thing. A relationship with addicted family members can only be classified as “tough love”, or they will never get better. My dad who was a recovered alcoholic gave the same advice because he went through the process himself. In the past, my older brother and I have given my brother large sums of money, free room and board, and supported him during his disease. It never helped him get better. Our behavior was not making him better. It was only enabling him to continue on his destructive path. Shortly after my brother became homeless, he started to fight again to survive. He has gotten a job and hopefully has turned the corner. Welfare is a larger problem, but it too needs to be incentive based to get any type of improvement. Without incentives, the welfare population increases in oppressed areas, and things are only going to get worse. And the division between the rich and poor will continue to grow.

My brother’s alcohol addiction has led to his ever increasing deteriorating health. Over the past five years, he has been unable to keep a job longer than three months because of his health and addiction. His health problems are much more complicated than just alcoholism. He is also addicted to cigarettes, caffeine, and unhealthy foods. To make issues worse, he gets absolutely no exercise. His health issues coupled with his inability to keep a job has put him drastically in debt. His problems and issues are his own fault and he has no one to blame but himself. He deserves absolutely no assistance from the government or anyone else because it is not going to solve his problems. In fact, it will only encourage him to continue with his bad habits until he dies from his ailments. Our family exhausted all our means to help him, but he refuses to get any assistance for his addictions. It is sad, but it is amazing how much a family member with an addiction can affect the attitudes and emotions of the rest of the family. It brings everyone down. The federal government should not be helping or encouraging “deadbeats” like my brother to continue with his bad habits. As I stated above, my older brother and I are hopeful that my younger brother has turned a corner and is getting better. If we did not turn our backs on him, he certainly would not have gotten better. And thankfully he did not turn to the federal government for more handouts to encourage him to continue with his addiction.

My Book: Is America Dying? (Barnes and Noble, Amazon.com)

Wednesday, July 6, 2011

Obama's Weekly Lowlights

New York – They are the latest state to allow gay marriage.

Sonny Le – The former Census Bureau Spokesman wants to revoke Micelle Malkin’s citizenship.

Dream Act – It seems the White House is circumventing Congress and is implementing the law through an executive memo to ICE.

Diabetes – The percentage of adults with the disease has doubled in the past 30 years.

TSA – They detained a 95 year old woman, who is confined to a wheelchair, for nearly one hour during a search.

Egypt – Egypt’s leader, Shaykh Sa‘id ’Abd-al-’Azim, said in a recent interview that democracy is a "bad, backwards and a retarded idea."

Wisconsin – Passed the right to carry a concealed weapon (Illinois in now the only state that does not have this gun law) and they cut 1 million in funding from Planned Parenthood.

Supreme Court – They struck down a lawsuit that was trying to regulate violent video games. They also rejected to hear an Abu Ghraib lawsuit.
Obama Knows Best – Barack says he will lead more on instinct than on consensus (which he claimed he did the first two years of his administration).

Blagojevich – He was convicted on 17 corruption criminal counts including trying to sell / barter Obama’s Senate seat, wire fraud, and extortion. He will be the second straight Illinois governor to spend time in prison.
Electric Cars – The Norwegian car company, Think, has filed for bankruptcy for a third time.

Vince Cefalu – He is now a former ATF agent after cooperating with the House Oversight Committee about the failed Fast and Furious operation.

Spending – Fifty years ago defense spending was over 3 times larger than entitlement spending. Today, entitlement spending is 2 times larger than our defense budget.

Nuclear Power - Shareholders for the Japanese power utility which failed following the March earthquake and tsunami have voted to maintain the nuclear portion of their operations.

Iran - An Iranian general says that Israeli and top American military bases are now within reach of Iranian rockets.

IMF - French Finance Minister, Christine Lagarde, clinched the top job at the IMF replacing the former head who was charged with sexual assault in New York this past month.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)

Tuesday, July 5, 2011

Federal Trade Deficit Model (Updated)

Just for CW, I recalculated the Federal Trade Deficit Model with the inclusion of two more parameters: the Dollar Value and Manufacturing Jobs. Manufacturing jobs is really already partly included in the unemployment figures parameter, and like the unemployment variable, the decline of manufacturing jobs over the past 60 years does not have much effect on the federal trade deficit (low t statistic). On the other hand, the value of the dollar has a very strong correlation with the trade deficit, as one would suspect (thanks CW for pointing out this omission). As the value of the dollar increases in value the trade deficit will decrease. By adding these two parameters into the model, it does increase both the accuracy and predictability of the model. Also, by adding these parameters to other economic models I have created such as the GDP Model, Inflation Model, Unemployment Model, and so on, it also improves those models (although it only improves them, on average, by about 1 to 2 percent). Interestingly, in this model, Personal Income and Dollar Value are complete opposites (equal magnitude but opposite polarity).

R2 0.99
Adjusted R2 0.98
SE 28.72

Term Coefficient 95% CI SE t statistic DF p
Intercept 859.9 187.2 to 1532.6 334.56 2.57 48 0.0133
Population -2.474 -4.242 to -0.706 0.8791 -2.81 48 0.0071
Unemployment 6.821 -9.481 to 23.123 8.1079 0.84 48 0.4044
Inflation 0.05206 -3.24278 to 3.34690 1.638705 0.03 48 0.9748
GDP 0.1196 -0.0472 to 0.2864 0.08297 1.44 48 0.1560
Debt 0.2018 0.1419 to 0.2617 0.02980 6.77 48 <0.0001
Tax Receipts 0.2149 -0.0898 to 0.5197 0.15156 1.42 48 0.1626
Gov Spending -0.4649 -0.8331 to -0.0967 0.18314 -2.54 48 0.0144
Budget 0.3966 0.0233 to 0.7699 0.18566 2.14 48 0.0378
Consumer Spending -0.9805 -1.2533 to -0.7078 0.13567 -7.23 48 <0.0001
State Deficit -1.594 -2.576 to -0.612 0.4882 -3.27 48 0.0020
State Social Payment 3.317 1.430 to 5.205 0.9389 3.53 48 0.0009
Gov Social Benefits -0.9611 -1.6984 to -0.2239 0.36670 -2.62 48 0.0117
Personal Income 0.4515 0.2116 to 0.6914 0.11931 3.78 48 0.0004
Dollar Value -412.1 -631.6 to -192.6 109.15 -3.78 48 0.0004
Manufacturing Jobs 0.002455 -0.020017 to 0.024927 0.0111767 0.22 48 0.8271

Monday, July 4, 2011

Consumer Spending Model

Below are the results of a running linear regression model on various economic data (obtained from the Bureau of Economic Analysis [BEA] government site) from 1947 to the present solving for the consumer spending economic variable:

n 64

R2 1.00
Adjusted R2 1.00
SE 21.02

Term Coefficient 95% CI SE t statistic DF p
Intercept -39.02 -139.68 to 61.64 50.115 -0.78 50 0.4398
Population 0.2086 -0.3167 to 0.7340 0.26156 0.80 50 0.4288
Unemployment 2.502 -4.734 to 9.737 3.6022 0.69 50 0.4906
Inflation 0.4412 -1.8424 to 2.7248 1.13692 0.39 50 0.6996
GDP 0.1883 0.0766 to 0.2999 0.05559 3.39 50 0.0014
Debt 0.05213 0.00527 to 0.09899 0.023331 2.23 50 0.0300
Tax Receipts 0.005178 -0.216671 to 0.227026 0.1104516 0.05 50 0.9628
Gov Spending -0.08237 -0.32702 to 0.16228 0.121803 -0.68 50 0.5020
Budget 0.2829 0.0122 to 0.5536 0.13476 2.10 50 0.0408
Trade Deficit -0.5131 -0.6115 to -0.4147 0.04901 -10.47 50 <0.0001
State Deficit -0.1945 -0.8733 to 0.4843 0.33794 -0.58 50 0.5675
State Social Payment 3.814 2.714 to 4.915 0.5479 6.96 50 <0.0001
Gov Social Benefits -0.7581 -1.2581 to -0.2582 0.24890 -3.05 50 0.0037
Personal Income 0.4576 0.3061 to 0.6091 0.07543 6.07 50 <0.0001


The economic parameters used to model consumer spending over the past 64 (n) years are: the U.S. population, the unemployment rate, the inflation rate, the U.S. Gross Domestic Product (GDP), federal government debt, federal government tax receipts, federal government spending, the federal government budget levels, the federal trade deficit, state government deficits, state government spending on social benefits, federal government spending on social benefits, and personal income. The intercept value in the above table is not a parameter – it is the value of consumer spending (in billions of dollars) if all other parameters equal zero. These economic parameters are denoted in the above table.

The R² statistic illustrates how closely the linear regression model resembles a straight line (the ideal condition). If R² equals one then the model is 100% linear and the parameters correlate 100%. On the other hand, if R² is equal to zero then there is no correlation and the data in the linear regression model is completely random. T statistics reveal which of the economic parameters has the best correlation to the parameter being tested (Consumer Spending in this case). The higher the absolute value of the t statistic, the better the correlation the corresponding economic parameter has to the tested variable (Consumer Spending in this case). If a coefficient value of an economic parameter is positive then it trends in the same direction of the tested variable (Consumer Spending in this case). If a coefficient value is negative then the corresponding variable trends in the opposite direction of the tested variable (Consumer Spending in this case). It is time to do some math to prove higher taxes and government spending cripple economies. What economic parameters have the biggest effect on consumer spending?

Increased personal income, GDP, the federal deficit, and federal budget levels lead to more consumer spending. When times are good not only do individuals spend more money the federal government also spends more. Increased federal government payments in social benefits and increased trade deficit levels lead to lower consumer spending (in other words bad economic times).

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Friday, July 1, 2011

Obama's Weekly Lowlights (7/1/11)

ObamaCare - A "new twist" in the Obamacare bill has the Medicare chief actuary up at night worrying, the AP Reports. Social Security income would no longer be counted as income, and up to three million Americans could be added to the already strained Medicare rolls.

Immigration - The Obama Administration has decided to loosen immigration laws within the US Immigration and Customs Enforcement (ICE) agency.
Jobs - In a speech at a fundraising event, President Obama claimed that his administration "created 2.1 million private sector jobs."
Abortion - A new book released this week has estimated that 163 million female babies have been aborted by parents looking to have a son.
Pakistan - The AP reports that in a new Pew Center poll, "Pakistanis largely disapprove of the U.S. raid that killed Osama bin Laden, with a majority believing the al-Qaida chief's death is a bad thing."

Chicago – Residents of the city owe approximately 63 thousand dollars while those living in the suburbs owe 31 thousand dollars in taxes to bridge unfunded liabilities the city owes to government workers.

Medicare – A trustee for the program states without significant action the program will be dead by 2024.

HHS and FDA – They have turned their focus on regulating “unhealthy” foods.

Illinois – They are the latest state to consider new laws to restrict collective bargaining rights for unions.

Stimulus II – Many Democrats are still pushing for a second stimulus to revive the struggling economy. I suppose some will never learn from the error of their ways.

Oil Reserves – The White House has decided to tap about 60 million barrels from our oil reserves with the hope it will alleviate gas prices. However, the amount is too small to make any significant impact on gas prices.

Marijuana – Ron Paul and Barney Frank are introducing a bill to legalize marijuana.

Budget Talks – Republicans have walked out of the bipartisan budget talks, at least for the time being. The reason, as Joe Biden puts it, the main objective for Democrats is to increase taxes on the wealthiest Americans.

Tim Geithner – Claims we need to tax small businesses more so the federal government does not shrink.

High Tech – A week after slamming technology (in particular ATMs) for costing Americans jobs, Obama started a 500 million dollar project initiative to spur high tech manufacturing.

Jared Monti – He was a Medal of Honor recipient after bravely giving his life in Afghanistan. But while giving a speech to the 10th Mountain Division at Fort Drum, Obama misspoke by saying Monti came home alive.

Libya – The House rejected two separate resolutions to authorize military action in Libya.

Obama Press Conference – Obama, as usual, blamed Republicans, Oil Companies, and the wealthy for all of America’s problems. I think I heard these talking points before.

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Why Have a Constitution?

Why did the founding fathers of our great nation write a Constitution? Seriously, other than the Bill of Rights it seems the Constitution is null and void! If the purpose of the Constitution was to prevent government from getting too big, it has failed. If the Constitution is inclusive to all federal government power grabs, then why write a Constitution? In other words, if the Constitution fails to prevent the federal government from passing laws and legislation that are not included in the initial writings, then why have a Constitution? The document seems to be meaningless. Alexander Hamilton stated the Constitution gives the federal government all powers that are not specifically stated in the document. This is how the document has been interpreted over the past 220 years.

Article I, Section 8 of the Constitution specifically states those enumerated powers granted to Congress. There is nothing written in this section allowing the government to create a Department of Education, Department of Energy, Department of Agriculture, Department of Health and Human Services, Environmental Protection Agency, and dozens of other organizations. So, it begs to reason, why write a document if the federal government can create any agency, department, or organization it sees fit? After all, there is no need for a document if the federal government can do what it pleases.

The federal government has expanded the Necessary Clause of the Constitution to include just about everything they want. Today, the President has used the Necessary Clause to expand the power of the executive branch. Think about it; the President has appointed over 40 czars including a faith, Asian Carp, and car czars. If the federal government can use the Necessary Clause to control Asian Carp in the Great Lakes, then there is nothing the federal government cannot use as an excuse, via the Necessary Clause, to meddle and interfere into our daily lives. So, once again, why have a Constitution?

The federal government has expanded the Commerce Clause of the Constitution to include everything, there are no exceptions. At first the Commerce Clause was needed to protect interstate commerce, but today it includes intrastate commerce including how much each American can farm on their personal property. Today, the federal government is using the Commerce Clause to mandate American citizens to buy a product they may not necessarily want – health insurance. If the federal government can force Americans to buy something they do not want, then what exactly does the Commerce Clause exclude them from doing? Nothing! So, why did the founding fathers write a Constitution in the first place?

The only thing that seems necessary in the Constitution is the Bill of Rights, with exception of the tenth amendment. The tenth amendment gives state government’s all powers not vested by the Constitution to the federal government. Since the Constitution apparently has no constraint for the federal government – then why would the founding fathers include the tenth amendment in the Constitution?

What’s worse, it is not just the legislative and executive branches exploiting the Constitution for political gains, the Supreme Court has ruled on subjects that should be decided by the individual states such as abortion. And the courts have expanded the Contracts Clause of the Constitution far beyond its original scope to protect lenders. So, the question remains, why did our founders write a Constitution if there are no exceptions to the powers of the judicial branch?

The bottom line is that it makes no sense to write the Constitution if it has no intrinsic value. If the Constitution allows the federal government to do everything it wants, then why doesn’t the Constitution say that or better yet, why write a document to define the scope of the powers allowed by each of the three branches of government at all? It simply makes no sense to write a document to define limitless powers. It only makes sense to write a document to restrict and specifically define powers.

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The Two Faces of Obama

I have to admit it; I can no longer listen to or watch Obama speeches or press conferences. It is like the commercial where the audience is watching an egg fry with the narrator saying “this is your brain on drugs”. Well, I think my brain gets fried listening to the multitude of contradictions, hypocrisies, explanations, and excuses of the Obama White House. I run speech transcripts through a word / phrase counting program I created. I use this tool to analyze books, speeches, and movies. In Obama’s latest press conference, here is a breakdown of the insanity.

Obama wants Congress to work through recess to hash out a budget deal, but Obama himself has been too busy playing golf and attending fund raisers (31 in the past 3 months) to not only get involved in the budget talks, but to meet with his own economic advisors. What’s worse, the President snubbed a Mitch McConnell invite to work on the budget; Obama said “It is not a discussion worth having”. It simply appears Obama does not have the time to do his job properly.

In the press conference, Obama claims he only wants to raise taxes on millionaires and billionaires. This is not true; Obama’s proposed plan will raise taxes on families that earn more than 250,000 dollars per year (or individuals that make over 200,000 dollars per year) by eliminating their itemized deductions.

Obama blamed Republicans, oil companies, and the wealthy for all American problems. In fact, he stated multiple times how he wants to eliminate private jet tax breaks as well as oil company tax breaks. These two examples equate to a mere 0.1% of our budget deficit this year alone. Thus, the Obama solution to the budget deficit is lacking significant substance. And let’s remember that the Republican plan proposed by Paul Ryan would eliminate these tax breaks and secondly, it was the Obama stimulus which created the jet tax breaks in the first place. In fact, Obama is talking about two separate issues because, as a nation, we need both comprehensive budget and tax reform legislation. Finally, Obama compared the jet tax breaks to food safety and student financial aid cuts proposed by Republicans. These budget items are not even comparable; the jet tax break equate to 3 billion dollars over 10 years whereas student financial aid and food safety programs amount to nearly 60 billion dollars this year alone.

Obama made this dumb statement, during the press conference, about the consequences if the U.S. hits its debt ceiling limit: “So are we really going to start paying interest to Chinese who hold Treasury Securities and we're not going to pay folks their Social Security checks?”. As President, Obama should clearly understand that Social Security payments are always appropriated, even in a government shutdown. And as President he should also understand there is a big difference between a government shutdown and hitting the debt ceiling. Obama continually talks as if they are one in the same.

Obama continues to push Republicans to raise the debt ceiling and says in failing to do so it would be an economic calamity. He called Congress “selfish” and said they should “do their job” and raise the debt ceiling, and finally, he warned “this is urgent”. Remember, this is the same Obama who voted against raising the debt ceiling when he was in the Senate. He insisted Bush’s spending was an irresponsible burden being placed on future generations.

In the same speech Obama claimed it would be up to a judge to decide the case between the National Labor Relations Board (NLRB) and Boeing. Hence, he sat on the fence on this issue. The NLRB is blocking Boeing from expanding its operations and opening a plant in the non-union state of South Carolina. But when Obama was asked about Gay Marriage and the Defense of Marriage Act (DOMA), Obama acted as if he was a Supreme Court Justice by claiming DOMA was unconstitutional. Let’s face it; Obama has routinely played judge (when it is convenient to him) and has used demagoguery when discussing Supreme Court decisions such as Citizens United.

On Libya, Obama used words such as “fuss” and “politics” to naysayers about his policies. Remember, this is the same Obama that used Iraq war to get elected into office. But the facts are clear; Libya was removed off the “states that sponsor terrorism list” four years ago. In 2009, Secretary of State, Hillary Clinton, met with Gaddafi’s son and said “we are looking forward to doing business with you”. What changed? Gaddafi was “threatening to massacre his own people”. How is this any different than Saddam Husain, who routinely massacred his own people? And let’s not forget that Obama went to war without Congressional approval, a clear violation of the Constitution.

My Book: Is America Dying? (Amazon.com, Barnes and Noble)