Observations on life

Before you occupy Wall Street get the facts and try to understand what is really going on and who is doing what. I DARE YOU TO READ THIS!

What is the current state of America, how did we get this way, who is to blame? Look at the following random list, arrange it anyway you like, determine which item directly impacts other items. Do this carefully, think of the consequences of each item interacting with others and you have the answer to the current state of America. You may not like the answer and it may not agree with your preconceived ideas, but there it is for you to see.

Caution: some of these points are quite obvious, others more abstract requiring more thought and consideration. Have fun!

On the back of my iPhone is says “Designed in Cupertino California. Assembled in China”

The average unemployment rate between 1990 through 2008 was 5.2% so our current gap from the norm is about 4% unemployment.

Apple Inc. received more than one million pre-orders for the iPhone 4S in a single day, 67 percent more than for the previous version of the device.

Populist rhetoric mostly from our President has caused many people to believe that the cause of high health insurance premiums is outrageous CEO pay. The pay may be outrageous and not deserved in some cases, but is has virtually nothing to do with premiums, do the math.

Millionaires and billionaires don’t pay their fair share … or at least that sounds good except the top 1% of earners pay about 40% of all income taxes. “Hey, I can do better on the price if you pay in cash.”

Many people are convinced business can be given incentives to hire more workers, needed or not.

If you buy something made in China it costs less; conversely if the same product is made in the US it costs considerably more. Where do you want your TVs, iPhones, DVD players and clothes made?

Why aren’t you spending more? Consumer spending equals nearly 70% of our economy.

If you borrow from the future to live above your means today, what happens when the future is today?

How did Wall Street and the banks screw up the economy without the eager participation, greed, ignorance and complacency of the people taking unaffordable and risky mortgages?

Who set policy, cajoled and strong armed banks and other institutions to underwrite subprime mortgages? Members of Congress of both parties and Republican and Democratic administrations.

More than two-thirds of Americans, including a majority of Republicans, say wealthier people should pay more in taxes to bring down the budget deficit, and even larger numbers think Medicare and Social Security benefits should be left alone.

More than 8 out of 10 Americans say the middle class will have to make financial sacrifices to cut the federal deficit even as the public just as strongly opposes higher taxes on middle-income families, according to a Bloomberg-Washington Post national poll conducted Oct. 6-9.

“While Americans see sacrifice as inevitable for the middle-class, the only sacrifice to win majority support is a tax on those too wealthy to be considered middle-class,” says J. Ann Selzer, president of Des Moines, Iowa-based Selzer & Co., which consults with Bloomberg News on polls – Dont touch my marbles

According to a June 2010 report in the Christian Science Monitor, the high school graduation rate is 68.8% (2007 latest available). Racial and ethnic gaps persist, the report notes. Forty-six percent of black students, 44 percent of Latinos, and 49 percent of native Americans did not earn a diploma in four years.

36 percent: the percentage of women 15 to 50 with a birth in the past year (2009) who were not currently married.

Among Tea Party members many believe that foreign aid composes 20% of the federal budget – it’s actually less than 1%.

Do people understand where the money goes?  Mandatory Spending within the federal budget (sometimes called entitlements), is at $2.109 trillion in FY 2012.

The largest mandatory spending programs were Social Security and Medicare, as follows:

Social Security – $761 billion
Medicare – $468 billion
Medicaid – $269 billion
TARP – $13 billion

All other mandatory programs – $598 billion.

These programs include Food Stamps, Unemployment Compensation, Child Nutrition and Tax Credits, Supplemental Security for the Disabled and Student Loans.
(Source: OMB, Table S-3)

The vast majority of Americans receiving these mandatory benefits do not pay income taxes.

More than Half of the Federal Budget Goes Towards Mandatory Spending:

Mandatory spending is 57% of total Federal spending. It is almost three times as much as the military budget, and 1 1/2 times all discretionary spending. The mandatory budget is, as its name implies, mandated by Congress to be spent outside of the annual budgetary process. It cannot be changed without a change in the laws that set up the programs.(Source: OMB, Table S-4)

Section 162(m) of the Internal Revenue Code limits the tax deduction that a publicly held corporation may take with respect to annual compensation paid to its chief executive officer and the three other most highly compensated executive officers, other than the chief financial officer. If such employees fiscal year annual compensation (excluding “qualified performance-based” compensation) exceeds $1 million, then the employer may not take an income tax deduction with respect to any such compensation amounts that exceed $1 million.  Section 162(m) regulations provide certain exemptions from this annual $1 million deduction limit. “Qualified performance-based” compensation paid pursuant to a stockholder-approved compensation plan that sets forth certain maximum payment limits can be excluded from counting towards the $1 million limit. – Congress has the power and has limited the taxpayer supported compensation of executives.  Many CEOs are overpaid, that’s true.  However, most of their pay is in the form of stock in their companies and subject to the risks of the stock market.  It is also true that many of the performance-based compensation programs are a farce, but that is the problem of a company’s board of directors and shareholders who get to approve or reject such compensation.

The all time top contributors to political campaigns are unions, not corporations and among the top fifteen contributing organizations, virtually all the money has gone to democratic campaigns. Here is the list of contributions since 1989.   Here is the President’s reaction to the Supreme Court decision on political contributions:

President Obama said the high court had “given a green light to a new stampede of special interest money in our politics.” He called it a “major victory” for Wall Street, health insurance companies and other interests which would diminish the influence of Americans who give small donations. Obama pledged to “work immediately” with Congress to develop a “forceful response.” 
 

It would appear the President forgot to mention the largest group of influence peddlers, no doubt an oversight.

 

So, if you are frustrated and you want change and even a little hope, and you want to sleep in a tent for a few weeks, the Washington Mall (or your front lawn) is nice this time of the year.

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