Posts Tagged ‘economics’

National Debt

September 12, 2017

I am concerned about our national debt.  We continue to spend more money than we take in.  Every month we create a bigger problem for our nation.  If our government were a family or a business, it would clearly be heading towards bankruptcy.

Can a government go bankrupt?

For a family or business, this problem is pretty straight  forward.  You must reduce your spending, increase your revenue or a combination of both.  I imagine that it is the same for a country.

Our leaders need to be taking this more seriously.  It is not enough to reduce the annual deficit.  We must eliminate the annual deficit and begin paying off our debts.  Cutbacks in spending is the first step.  Of course, people will be unhappy when something that they care about is reduced or dropped, but tough decisions need to be made.  Families do it all the time.  Businesses do it all the time.  Our country and our leadership need to distinguish between those things that we truly need to have in our budget and what things we can do without.   If you do not want to eliminate programs then you must reduce the amount spent on each.    The total expenditures should not exceed the total income.

Revenue could be increased by reducing or eliminating some of the many tax credits that are offered both to businesses and to individuals.  Tax rates also could be raised.  Taxes were higher back in the 90’s, but I seem to remember it as being a fairly prosperous time as a nation.   At the end of the Clinton presidency, we actually had a surplus.  Unfortunately, the first thing that President Bush did was to give that money back to the people and lower tax rates.  The tax rates should have been left alone.  The surplus should have been used to start paying down our debt.

We have a problem and it is getting bigger.  Our politicians need to make the tough decisions.

We can encourage them to act by creating awareness and calling for action.

We can contact our senators and representatives and tell them that this is important to us all.

 

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Minimum Wage

February 19, 2015

People like to suggest that raising the minimum wage is in response to inflation.  I would suggest that raising the minimum wage causes inflation.

If a gallon of milk cost one dollar ten years ago, and today a gallon of milk costs four dollars we recognize that the gallon of milk has not changed.  Rather, we look at it as inflation and consider it to be a bad thing.

When minimum wage changes, the product itself, a basic hour of low-skill work hasn’t changed.  The cost has been inflated.

Another way of looking at it is to say that what two dollars used to purchase, now requires seven dollars to purchase.  The thing being purchased hasn’t changed.  The value of the dollar, what the dollar will buy, has changed.

When we increase the minimum wage, we devalue the dollar.

I am not an economist and I am not going to go back over the last fifty years and see the precise changes in minimum wage and the effect on the economy.  I have, however, been living through the last fifty years, and in my observation, raising the minimum wage causes economic turmoil.

The minimum wage is meant to be a starting point for employment.  As workers develop skills and demonstrate a solid work ethic, they may be rewarded with higher paying jobs.  New workers entering the job market take their place and the process moves onward.

When the minimum wage is raised it has an affect on what other employees are paid as well.  People often view their pay in relationship to the minimum wage so to keep employees, wages across the board need to go up.  Higher wages means higher operating costs.  These costs are passed on to the consumer, resulting in inflation.

Currently, people who make minimum wage may be eligible for a variety of assistance programs from the government.  These include food stamps, rent assistance, utilities assistance and other programs.  These programs help people to live a better life while making minimum wage. Perhaps we could add an option of financial training.  We should help to teach people how to live on their income, rather than beyond their income.

People should look to better themselves by finding better jobs, not by trying to force employers to pay more for an hour of basic labor.

Raising the minimum wage is a bad idea.

Raising Revenue, but not Taxes

February 28, 2013

I have entered late into the political arena.  Last year, for the very first time,  I attended the local and district  caucuses.  It was an educational experience, and I think that I will continue to be involved at least to some degree.

Just this week, I had another first.

I emailed our state senators and our representative.

I have often thought that I should contact those who serve us, but until now, I have not ever taken the time.

I should have started these activities earlier in my life.  It was not difficult.  Democracy works better when people take the time to be involved.

Here is the email that I sent.

Message: Dear Senator, 

I, along with many others, am concerned about the budget deficit.  I would like 
to make a suggestion about how to raise income without raising taxes. 

Limit tax returns. 

As it is right now, individuals can utilize a whole variety of tax credits that 
can enable them to get enormous refunds that far exceed the tax money that they 
actually paid in to the system. 

It could be set that no one receives a tax return that exceeds the amount that 
was actually withheld from their checks.  They would still get their money back, 
but nothing extra.  

It would be necessary to adjust the W2s so that their was a distinction between 
money paid by the individual and money paid by their employer, or better yet, 
just don't show the amount paid by the employer.  The individual should only 
receive the money back that they paid.  

This would accomplish two things: 1. less excess money would be paid out for 
credits that exceed money received, and 2. the taxes paid by the employer could 
be kept. 

Technically, no taxes are raised, but the net benefit to the government would be 
substantial. 

Thank you to whoever actually reads this email, I hope that it will at least be 
considered.  

Sincerely, 

Curtis Girod
At this time, I have received basic form letters back from two of three that I contacted.  I also, noticed my misspelling of “there” with “their”  but I did not correct it for this post, since it was not correct in my original email.  I will need to be more careful.

At any rate, I would encourage you to be more involved in the political process.  Keep an open mind, be willing to listen, not just speak, avoid harsh rhetoric, and let us see if our political climate can improve with our participation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A Better Plan?

September 8, 2011

Who, in their right mind, would spend a dollar, that they need to borrow,  to make a dime?

I ask this question in advance of the president’s speech tonight because I am hoping that he is not going to propose spending billions of dollars on a job stimulus project.

We would  have to borrow the money.

We would get back only a small portion in taxes.

It would provide only a temporary improvement.  When the federal money runs out, those people would again be out of work.  It is not a permanent solution.

I sincerely hope that he has a better plan, than spending money we would have to borrow.  The increased debt would last longer any benefit.

Budget Compromise

April 9, 2011

The threatened government shutdown has been averted.  The politicians in Washington realized that no one would appreciate the idea of our military being in combat, and their families not receiving financial support.  That would cost them votes next election.

I have not seen the details of the compromise.  If it is a good compromise then everyone should be equally unhappy.  Yes, I said unhappy.  A compromise means that you have had to give up something that you wanted originally.  It means that you hoped for more than you are receiving in the deal.  It is a fair compromise, when both sides give up equal shares.  Of course, each side also should receive things that are important to them., but they should come at the cost of other things of lesser importance.

Hopefully, our political leaders will figure out what is truly important.

The Search Continues

July 20, 2010

“Think carefully, you only get to spend your money once.”

This is advice that I gave to my children when they were young.  To begin with they got an allowance and they were allowed to spend it however they wanted to spend it.  Then when they were sixteen they got part-time jobs.  Again they were allowed to spend their money however they wanted to spend it, but we no longer gave them money.  We provided a place to live, food to eat and some basic clothes.  They had their own money for gas, entertainment and stuff.

You only get to spend it once.

We are currently in the market for a black leather studio couch.  It has been hard to find.  We are also looking for a travel trailer.  We have specific ideas about what we are looking for and it has not been easy.  At times it has been discouraging but we hold off on our purchase because we too, can only spend our money once.

Do you wait for what you want, or settle for what you can find easily?

There are many things in life that we have to choose.  How we spend our money and our time, are important decisions.  Sometimes we have to choose quickly.  Sometimes we can afford to wait.

Choose wisely.

Something’s Not Right

April 12, 2010

According to the Quad City Times, April 8th edition, nearly half of U.S.  households will not have to pay any federal income tax.

That just doesn’t seem right. 

Why should one half of the country pay the cost for the other half?  I understand that the people who make more money should pay more in taxes, and I fully support that concept, but that doesn’t mean that 47% should pay nothing!

Politicians get elected by lowering taxes.  Politicians think that rebates and credits will stimulate the economy.  So politicians reduce national income and increase spending.  This is a problem.

It has gotten out of hand.  We have an enormous national debt.  We need to reduce spending and increase tax income.  We need to be financially responsible as a country.

Everybody who has an income can pay something.  We should be sharing the load, not getting a free ride.

Reduced Freedom

March 31, 2010

The passage of the new health care bill will result in many more people having coverage.

Whether they want it or not.

The bill will require companies to provide health care coverage, or pay a fine.  Either way it will increase the cost of doing business in the United States.  That cost will be passed on to customers.  It will also be one more reason to send jobs out-of-country, where the cost of doing business is cheaper in many ways.

The bill also requires individuals to purchase health care coverage, if they do not have it provided, or pay a fine.  Yes,  there will be a subsidy, but for many people, the subsidy will not cover the cost.  It will be one more added expense for people who already are having a difficult time.

Comply or be fined.  Those are the options, and it is a reduction in our freedom to direct our own lives, and our own businesses.

Find a Way

March 22, 2010

The  health care bill has passed.  History will judge whether or not this is a good thing.  Our country is divided on yet another issue.  That is not good.  We have debated, argued, campaigned, and struck deals.  Now it is time to move forward.  It is time to let the dust settle and seek to obtain some measure of stability and unity.  It is time to reassert a basic sense of commonality.  We want our country to be united in a quest for the common good.  Many of us do not like the decision, but that doesn’t mean that we want it to fail.  Now that the bill has passed, let’s find a way to make it work.

Cut Back!

March 11, 2010

If an individual is spending more money than they make, they must either make more money or spend less.  If they decide to spend less, they will maintain the essentials and trim back on the non-essentials.

The same is true in the business world.  If you are not making a profit, then you need to remove non-essentials from your operating costs.  This can sometimes involve painful decisions.  It is important to make the right cuts.

The same is true with our government.  It is time to recognize  what is necessary, and what is non-essential.  It is high time to reduce spending in non-essential areas. It is not a time to be spending more money.  It is time to be spending less.