Category Archives: Politics: National

Question On Taxes And Revenues

Posted on August 4, 2012 | 1 comment

If an individual is a net Federal Income Tax receiver, is a reduction in the amount of money he receives from the Federal Government a tax hike for him?

I suspect that the answer is “yes.”  Exemptions that are removed seem to be treated as tax hikes.

For illustration, I own a home.  If the mortgage interest deduction would go away I would pay more taxes.  I can see me arguing that would be equal to a tax increase.   And since there is no income level that carries a negative tax bracket, any change in tax policy that would diminish a payment or reduce a deduction would be seen as a tax hike.

I’m only thinking this through right now.  I’m reading the report from the Tax Policy Center on how the plan offered by Romney would impact the tax picture for all of us.

I have two thoughts besides the one above:

  1. Why do we need to be revenue neutral?  Why can’t we cut taxes and just quit spending so much money?
  2. This sentence from the same organization bothers me: “An estimated 42 percent of the 76 million nontaxable tax units will have negative liability in 2011.”

A tax is an amount of money that an individual PAYS to the government.  Reducing the amount of money that someone GETS from the government might not be labelled a tax INCREASE.  In fact, I happen to think that labeling government entitlement programs as “tax cuts” has been a method to get those programs passed.  And this is long before Obama stepped into the White House [DUBYA!]

Serious.  42% of 76 million is a lot of people who are takers.  And 76 million out of 300 million is a  lot of non-payers!

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Posted in Government, Politics: National

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Basic High School Math Fail

Posted on August 1, 2012 | 11 comments

Again, I’m reading a bunch of stuff for an upcoming post and I see this:

Lucia Harkenreader’s check landed in her mailbox last week: a rebate of $456.15 from her health insurance company, with a letter dryly explaining that the money came courtesy of the federal health care law.

…

For Ms. Harkenreader, 53, who is putting a son through college, the rebate helps soothe the frustration she feels toward her insurer, Golden Rule, which is owned by UnitedHealthcare.

“It seems like the health insurance companies really just don’t have any consideration for the cost out here,” said Ms. Harkenreader, who pays about $480 a month for a high-deductible plan, up from $400 last year. “What costs have gone up to justify that rise in premium? I’d love to know. Did you give your people a raise? I guess your light bill went up?”

How is it possible that she can ask “What costs have gone up?” as she clutches a $456.00 check?  How can she ask “What costs have gone up?” as insurance companies are required to “insure” people who knock on the door with a broken arm?

People wonder why this country is in trouble.

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Posted in Health Care, Idiots on Parade, Politics: National

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Poverty: Socioeconomics vs IQ – The Bell Curve

Posted on August 1, 2012 | Leave a comment

About 6 weeks ago I started posting data from the book, “The Bell Curve.”  The first portion of the book deals with various conditions, poverty, education, crime and so on that take place in our society.  And more than just look and detail those conditions, the authors try and look at what might cause some of those conditions.  The point being that a vast majority of today’s commentators on such matters blame the socioeconomic conditions of families for the unfortunate plight many of our citizens find themselves in today.

Having problems graduating high school?  Check and see if the kid is from a poor family.

Mothers raising children in poverty?  Check and see of that mother herself came form a poor family.

Individuals in jail?  Check and see if those folks came from a poor family.

And the evidence is there that such an impact exists.  But is there another, stronger variable that impacts these conditions?  The author’s answer is, “Yes.  And that variable is IQ.”

Let’s review the first set of data I showed back then.  The first set of data shows the probability that an individual will be living below the poverty line in 1989, the data the study used:

The next set of data shows the probability that a child will be living below the poverty line in 1989 when her mother is married:

And the third set of data shows that same probability for that same child if her mother is single.

The data has an uncomfortable, but not surprising trend, to be born wealthy is better than being born in poverty.  However, here the authors, as I mentioned, looked for additional variables.  Specifically IQ.  Look at the data with the socioeconomic status AND the IQ included in the same graph.

Let’s go down the line starting with the probability of living in poverty:

The difference is dramatic.  Not only does having a very low IQ put you at significant risk of living in poverty compared to having a very low SES background, but being very intelligent is more important than being very wealthy.

Next we look at children of married mothers living in poverty and the impact that her SES and IQ have:

While the dramatic difference in the values isn’t the same, the pattern is.  A mother having everything else considered who is less intelligent has a higher probability of raising her children in poverty than an equally neutral mother of higher intelligence.

Finally, the probability of children of single mothers living in poverty and the impact that her SES and IQ have:

Right back to the dramatic difference.  What looked like an impacting variable before, SES clearly now has the appearance of having a minimal effect on raising children in poverty.  Rather IQ dominates this condition for children of single mothers.  Those children lucky enough to be born to the brightest of mothers have a 1/7th the chance of living in poverty compared to those children whose mothers score on the very lowest on IQ tests.

Clearly, as it relates to poverty and child poverty, IQ is the runaway variable when compared to SES.

 

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Posted in Middle Class, Politics: National, The Bell Curve

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The Art Of Politics

Posted on July 31, 2012 | 4 comments

One of the reason I’ve never been high on Obama is that I don’t think he’s capable.  He’s certainly never demonstrated excellence at running an organization.  And by organization, I mean an organization of directors.  That is, a team of managers who themselves manage managers who AGAIN, have a team of people.

Obama has never been held responsible for meeting organizational milestones.  Of urging teams of people with competing priorities and views of success.  Obama hasn’t managed money, a bottom line or deadlines.

I manage people.  And I can’t imagine Barack Obama being  hired as a 2nd or 3rd level manager.  He simply doesn’t bring any experience to the table.

Romney, of course, has this in spades.

But THIS is frustrating:

Mitt Romney on Tuesday accused the media of looking to protect President Obama by focusing on the GOP candidate’s high-profile gaffes during his week-long foreign tour rather than more substantive policy issues he discussed.

“I realize that there will be some in the fourth estate or in whichever estate who are far more interested in finding something to write about that is unrelated to the economy, to geo-politics, to the threat of war, to the reality of conflict in Afghanistan today, to a nuclearization of Iran,” Romney told Fox News. “They’ll instead try to find anything else to divert from the fact that these last four years have been tough years for our country.”

Even if true, and I’m sympathetic to the claim, complaining about it is nonsensical.  It’s a tactic that doesn’t get anything done, weakens the candidate and takes away from the real message.

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Posted in Elections 2012, Politics: National

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Cost Of Raising A Child

Posted on July 30, 2012 | 4 comments

For some reason as I was driving home yesterday, a thought occurred to me:

If one group of people paid $5.00 for a beer and another group of people paid $2.00 for a beer, would one group of people drink more beer than the other?

Or

If one group of people paid ~$200,000 to have a child and another group of people paid ~$0.00 to have a child, which group of people would have more children?

So, here I am looking at the data:

A middle-income family may spend $234,900 to raise a child born in 2011 to the age of 18, a 3.5 percent increase in a year, according to a government report.

That is a lot of money.  But the costs are not fixed:

The typical two-parent middle-income family spent $12,290 to $14,320 in 2011 on each child, the study found. Households that make less spend less, USDA researchers said. A family earning less than $59,410 a year will probably spend $169,080 in 2011 dollars to rear a child, while parents earning more than $102,870 may pay $389,670, according to the study.

And it can get worse than that.  According to this calculator the cost of raising a child can be as high as $434,180 if you earn more than $100k.

Earn less than $57,800 and you pay $133,710.  That’s $7,300 this year alone.

With government assistance to those poorest among us, that $7,300 can be completely covered reducing the real cost to near zero.

So, given the differences in the cost of raising children, I came to the conclusion that wealthy individuals have fewer children than do those less wealthy.

Was I right?  According to the Census I was:

The births per 1,000 women below 100% of the poverty line in 2008 was 96.3.  Births per 1,000 women above 200% of the poverty line that same year was almost exactly half : 47.7.

If income levels are pulled out, there is a steady climb in births per 1,000 from the wealthiest to the least wealthy.  A notable exception are the very poorest mothers:

Income Births Per 1,000
Less than $10,000. 33.7
$10,000 to $14,999. 103.8
$15,000 to $24,999. 86
$25,000 to $34,999. 80.3
$35,000 to $49,999. 72.3
$50,000 to $74,999. 64.4
$75,000 to $99,999. 57.4
$100,000 to $149,999. 51.8
$150,000 to $199,999. 49.3
$200,000 and over. 49.8

Certainly much more than the cost of raising a child goes into the decision of whether or not to have a baby.  Perhaps something as simple as the cost of contraception goes into the amount of pregnancies among the wealthy and the poor.  But it would be foolish to wave away the fact that the cost of raising a child is much higher for those who have more money and thus acts as a drag on the birthrate among that population.

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Posted in Economics, Life, Politics: National, Welfare

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Economists Ignore Laws Of Economics

Posted on July 30, 2012 | 5 comments

It would appear that a set of economists are willing to ignore reality:

As the three-year mark since the federal minimum wage was last raised approaches, we urge you to once again raise the federal minimum wage. A three-step raise of 85 cents a year for three years—which would mean a minimum wage of $9.80 by 2014—and then indexing to protect against inflation (corresponding to the legislation proposed by Senator Tom Harkin and Representative George Miller) would be a reasonable approach. The increase to $9.80 would mean that minimum wage workers who work full-time, full-year would see a raise from their current salary of roughly $15,000 to roughly $20,000. These proposals also usefully raise the tipped minimum wage to 70% of the regular minimum.

This policy would directly provide higher wages for close to 20 million workers by 2014. Furthermore, another nearly 9 million workers whose wages are just above the new minimum would likely see a wage increase through “spillover” effects, as employers adjust their internal wage ladders. The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet. At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum wage increase would provide a much-needed boost to the earnings of low-wage workers.

These esteemed economists must have forgotten the negative repercussions of raising the minimum wage:

  1. Reduced employment for marginal workers
  2. Reduced hours for minimum wage earners
  3. Restriction of new job market entrants reducing valuable work place skills

The laws of economics are incontrovertible.  You may no more pass legislation that says gravity is discretionary.

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Posted in Economics, Middle Class, Politics: National

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Crime: SES Impact – The Bell Curve

Posted on July 30, 2012 | Leave a comment

This post speaks to the eleventh chapter in the book, “The Bell Curve.”  It is here that the authors take a look at the impact of SES on crime and criminality in the NLSY study.  Again, in the early chapters of the book, the authors only look at white members of the NLSY.  Data pulled for the criminality is further restricted to men.  The data is presented below.

Data on crime can be hard to obtain.  Many times an individual can be “successful” at crime and not be caught.  This would reduce the instance of crime and present a challenge in reporting group patterns.  In an attempt to overcome this shortcoming, the book uses two classifications:

  1. Self reported crime
  2. Being interviewed in a correctional facility

The impact of SES on the first, self-reported crime is shown here:

While the impact of the socioeconomic status of the parents of the men interviewed is low, less than 4 points, it’s interesting to note that the trend is reversed from what we might expect.  The lack of significant SES impact follows as demonstrated below.

Here it shows that SES plays an even smaller role in determining criminality.

As I mentioned, this is the 11th chapter in the book.  Chapter 12 deals with civility and citizenship.  After reading the chapter, I was left with the feeling that I was reading a filler, one more chapter to fill a book.  As with crime before it, the data presented was sparse and, in my opinion, unfulfilling compared to the earlier chapters and data.

Then comes Chapter 13.

When I picked up the book I was looking for books on “How to Raise Chickens” as a result of a post of mine some time back.  I saw the book on the shelves and was taken by the title.  I bought it and it was immediately relegated to my stack.  Some time later, Boortz was speaking about the author and I decided I better begin the book.  At this time I was still unaware of the controversy of the book.  Then I posted on it.  I was then made aware of the controversy.

It’s chapter 13 where that controversy begins.  It’s here that the authors go into the subject of racial disparities, if they exist, between races.  In the book, the  authors explicitly put pen to  paper and ask, rhetorically for us, why should we explore this topic, one so painful and emotional?  They gave an answer, however, I was struck by the question.

As a result, I won’t go there.

Much of the talk I talk here at TarHeel is, or may be, emotional.  But it’s easy political kinda stuff.  Shit we can all agree is fun or enjoyable to debate.  But race is different.  I have neither the expertise, the knowledge or the education to be able to talk about this subject with anything resembling expertise.  And while I think it’s important to talk about the painful experiences of race, I feel it’s CRITICAL to bring an expert’s touch to the subject of race and IQ.

I don’t have that expertise.

With that said, I understand the controversy surrounding the book.  It IS controversial.  However, I need to point out that the first 13 chapters didn’t discuss race even one time.  And as a I read those first 12 chapters, I was struck by the straight forward and powerful arguments presented.

The next series of posts on this book will go back to Chapter 1 and revisit each until we get to the 11th chapter again.  At that point, I’ll stop.

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Posted in Crime, Middle Class, Politics: National, The Bell Curve

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Obamacare’s Taxes And The Impact On Jobs

Posted on July 29, 2012 | Leave a comment

Romney says that he knows why jobs come and why jobs go.  Obama doesn’t.

Barack Obama feels a sense of charity.  And he thinks that government should act on that charity.

Are there people who get sick or hurt and can’t afford their care?  Well, by golly, the government should step in and perform that charity.

But when he realizes that people respond in rational ways, he becomes confused and then angry.  “Why won’t people just DO the right thing?  Why won’t they accept the added burden of Barack’s charity and continue to hire?”

An Indiana-based medical equipment manufacturer says it’s scrapping plans to open five new plants in the coming years because of a looming tax tied to President Obama’s health care overhaul law.

Cook Medical claims the tax on medical devices, set to take effect next year, will cost the company roughly $20 million a year, cutting into money that would otherwise go toward expanding into new facilities over the next five years.

“This is the equivalent of about a plant a year that we’re not going to be able to build,” a company spokesman told FoxNews.com.

He said the original plan was to build factories in “hard-pressed” Midwestern communities, each employing up to 300 people. But those factories cost roughly the same amount as the projected cost of the new tax.

“In reality, we’re not looking at the U.S. to build factories anymore as long as this tax is in place. We can’t, to be competitive,” he said.

This is why companies move jobs overseas.  The government forces the price of labor to the point that such labor isn’t competitive.

By the way, to answer the question above, “Why won’t they accept the added burden of Barack’s charity and continue to hire?”  I suspect that he would say that they are greedy.

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Posted in Economics, Government, Health Care, Politics: National

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Obstructionist Congress – Only They And Never Me

Posted on July 25, 2012 | 13 comments

Obama has been lashing out at congress.  In fact, democrats in general blame congress for failing to pass his legislation referring to them as a “Do-Nothing Congress.”

President Obama and his supporters are well aware that Friday’s jobs report is an ugly mess. But they’re trying to gain the high ground by shifting attention to Congress, highlighting a number of White House jobs proposals that have languished under the GOP-controlled House of Representatives.

In a trip to a Honeywell factory in Minnesota Friday, Obama responded to the dismal news with a speech demanding Congress take action on a variety of measures, including infrastructure investments and aid to state and local governments to prevent teachers, firefighters and police from being laid off, that Republicans have thus far opposed. He also announced a new initiative to encourage private employers to hire returning veterans.

“We’ve got responsibilities that are bigger than an election,” Obama said. “We’ve got responsibilities to you. So my message to Congress is: Now is not the time to play politics, now is not the time to sit on your hands, the American people expect their leaders to work hard no matter what year it is.”

I wonder what the President would say regarding the latest shenanigans taking place in the lower chamber:

Republicans and Democrats got snippy on the House floor Wednesday over a typo in a GOP deregulation bill, which Democrats have so far refused to let Republicans fix quickly on the floor by unanimous consent.

The bill, H.R. 4078, is meant to prohibit major federal regulations until the unemployment rate falls to 6 percent, but instead says no new regulations can be issued until the employment rate falls to 6 percent.

Earlier in the day, Minority Whip Steny Hoyer (D-Md.) said he would not grant unanimous consent to add “un” to the word “employment” and thus fix the bill on the floor. And Wednesday afternoon, Rep. Gerry Connolly (D-Va.) indicated that Democrats were not willing yet to allow the quick fix.

House Oversight and Government Affairs Committee Chairman Darrell Issa (R-Calif.) asked Connolly if he would object to a unanimous consent request to make the correction. Issa cast the error as a mistake made by professional staff.

But in reply, Connolly said, “This member will reserve the right to object at the appropriate time.”

“Nothing could be more insincere than to pick on professional staff on a typographical error,” Issa shot back. “If we have to… go to the Rules Committee, I guess we will, but I’m really sorry to see that kind of an attitude on what the gentleman and all of us know was simply a typographical error.”

Connolly then took umbrage with Issa’s remark, and asked the presiding officer, “Did this member hear… the distinguished chairman of the Oversight and Government Reform Committee characterize a member as insincere?”

Truly doing the people’s will.

Now, to be fair, the more we can restrain Washington from passing laws, the better off we are, so, I must find myself congratulating the Do-Nothing Democrats of the House!!

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Posted in Government, Liberty, Politics: National

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Barack Obama: Giving Something Back

Posted on July 25, 2012 | 10 comments

At that small little firehouse in Virginia, Mr. Obama gave us a very real look into his philosophy.  Key among that is how success is built.  Let’s look at his words more carefully:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.  They know they didn’t — look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.  (Applause.)

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business — you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.

So, from his words we see that Obama feels that our success is not ours alone:

They know they didn’t — look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.

So, why are we successful?

If you were successful, somebody along the line gave you some help.

And that help was?

There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.

And because of all this help, what are we expecting the successful among us to do?

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.

But I’m struck….how did all that help get there in the first place?  I’ll leave that to Thomas Sowell via Mark Perry:

All the high-flown talk about how people who are successful in business should “give back” to the community that created the things that facilitated their success is, again, something that sounds plausible to people who do not stop and think through what is being said. After years of dumbed-down education, that apparently includes a lot of people.

Take Obama’s example of the business that benefits from being able to ship their products on roads that the government built. How does that create a need to “give back”? Did the taxpayers, including business taxpayers, not pay for that road when it was built? Why should they have to pay for it twice?

What about the workers that businesses hire, whose education is usually created in government-financed schools? The government doesn’t have any wealth of its own, except what it takes from taxpayers, whether individuals or businesses. They have already paid for that education. It is not a gift that they have to “give back” by letting politicians take more of their money and freedom.

When businesses hire highly educated people, such as chemists or engineers, competition in the labor market forces them to pay higher salaries for people with longer years of valuable education. That education is not a government gift to the employers. It is paid for while it is being created in schools and universities, and it is paid for in higher salaries when highly educated people are hired.

One of the tricks of professional magicians is to distract the audience’s attention from what they are doing while they are creating an illusion of magic. Pious talk about “giving back” distracts our attention from the cold fact that politicians are taking away more and more of our money and our freedom.

Why should they have to pay for it twice?  Indeed.

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Posted in Elections 2012, Politics: National

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