As you must know, I have never seen a problem that was complicated and our national budget debate is no different. If that is the case, then why do all the politicians try to make it so complicated? It can only be because they are more concerned about keeping their jobs and power than they are serving the American people. If we are going to understand the problem that we are in, we will need a few simple ground rules and from them you will see that the solution is simple.
If you are spending more than you are taking in, there are only two ways to get things in balance. Reduce spending or increase revenue. Of these two, only one is totally under your control and that one is "spending". Revenue is like pie in the sky some where in the future. You don't have total control over future revenue and can not predict just when and how much you will be able to get in the future. There is another thing about revenue and that is "when" it will start coming in. Revenue that you can get today or tomorrow is more certain and valuable than revenue far in the future.
Another thing is that the sooner your changes can take place, the sooner the affects will start to accumulate. Remember "accumulate" because the cure to our problem does not just happen with the stroke of a pen. It is like filling a bucket from the faucet, the sooner you start the water flowing, the sooner the bucket will be filled. We would all like to see the water flow in faster, but that one is out of our control or more risky. We need to think about getting the flow started into the bucket or if we have a leak, to stop or reduce the flow out of the leak. Simple isn't it.
Now exactly what have you heard from Obama or anyone else about the "first" thing that they will cut? There has to be a "first thing", but what is it? It is like going on a long trip, you have to take the "first" step. I think you have to agree that cutting expenditures is the thing that has to be done "first". In every case that I have been involved in, cutting payroll has been the "first" thing we did. You can do this by laying off people or cutting their hourly pay or hours worked. It goes without saying that the total elimination of over time is first on the list. Who have you heard so far talking about any of this?
Another principle is to first consider "eliminating" things totally rather than trying to reduce them. Rather than cut the number of people who work in the Department of Education, why not just eliminate the total department? Nothing works better than eliminating the item totally. How about the Department of Energy? We could eliminate it too. I challenge you to come up with exactly what they do and how it helps the country. We have an economic system based on the free enterprise system and it seems to work just fine for computers, shoes and bacon. Why do we need most of the government agencies? I would demand a 10% cut in payroll for every department that is not totally eliminated.
The next principle is that we stop funding items that will not break even in the near future. It is like being in a boat that is about to sink, you don't spend time giving it a new coat of paint. If the boat sinks, there will be no need for paint. If we make it out alive, we can then think about painting the boat. I have blogged on Pell grants for college students and student loans. We all know that at least 75% of this money is a total waste and will never pay back. I would eliminate all government involvement in student loans of any kind. If it is worth it, let the kids go to the regular banks like everyone has to do for a car loan. If they can't convince the bank to make them a loan, my guess is that the bank does not feel that they will be able to pay it back. Sounds logical to me.
Research grants are another area where we spend a lot of money and most of it does not produce anything. I read thru the titles of the Doctoral Thesis of one of our major universities for one year and concluded that 90% were totally worthless. Rather than eliminating the bad ones, us taxpayers should eliminate all of them an let the free Enterprise system fund them. Do you think that the taxpayers funded the Wright Brothers or Thomas Edison? They did it with their own money to make a profit.
How about a little belt tightening. This will not be painless and it shouldn't. We did something bad by getting into this situation and a little punishment is in order. If you feel that you were a victim and not responsible for our situation, it is because you are sniffing something. We are all responsible and will have to take our medicine. Have you heard anyone telling you that this will be painful or that we will "all" have to suffer. Obama has the union's "back" so it appears that they will not have to suffer. Look at GMC, why do those union workers get 100% of their retirement pay while the stock holders got nothing? Why when AIG went under did us taxpayers pay off 100% to people who insured worthless bonds for cents on the dollar? They knew that the deal they were getting from AIG was too good to be true and it was.
If the boat does not sink after we dump all the worthless programs over board, we can in the future debate how to build a better boat and how we are going to pay for that better boat. That is all in the future. That is the revenue side. That is a bridge we can cross if we are around to even cross that bridge. Right now we have to keep our boat from sinking.
Did you ever hear of the "horse latitudes"? This is the place out in the Atlantic far from Spain where it became clear that their ships may not make it to America with all the supplies they had on board. This was here they had to make the decision on whether to keep the horses or dump them over board, thus "horse latitudes". They often dumped the horses over board in order to save the ship and crew. Do you think we just might be at the "horse latitudes" again?
Wednesday, July 20, 2011
Monday, July 18, 2011
What Was Wrong With Us?
I just had a chance to drive out to Virginia Beach and check out a couple of our new destroyers. All I can say after wondering around inside and under them is that, "they are really big". They also account for a lot of our tax money. According to what I was told, they have a working life of about 35 years. This means we can expect them to have to be replaced before some of you kids are out of college. How is that? Once they have been built and manned by about 300 of our kids, our money has already been spent. This logic leads to the cost of blowing something up with one of them. What does it cost to use one of these destroyers to blow something up if it has already been paid for with our tax money and it is going to be sent to the scrap heap in just 35 years? The ones that I was on were a few years old, so they don't have 35 more years. Starting to see why we wonder into so many wars around the world? It does not cost us anything since the ships and bombs are paid for and are going to have to scrapped anyway. Crystal clear.
Just for the record, my plane was built in 1960 and is now 51 years old and still doing its job. Why don't our expensive ship last longer and thus save us taxpayers money? I guess I will have to leave this to the experts in Washington DC.
It was not the destroyers that interested my the most on the trip, it was the size of family homes. Once I got closed to Washington DC and the state of Virginia, it seemed that homes kept getting bigger and bigger. I am sure that anyone could have housed three or four families just fine. I don't have any problem with people who would like a nicer home, but we have gone way too far on this one. I know that people in the Washington DC are make a lot of money, but the homes look like they must average almost a million dollars each. I have always figured that the cost of a home is 1% per month of its selling price. If that is a million dollars, then the cost for whoever is living in it is about $10,000 per month. That is $120,000 per year. Just who are the people who can afford that much? If you look a little deeper, the problem is "not" who can afford it. The question is how can our country expect to survive if people who can afford $10,000 per month for a home are investing in a home that will be an anchor around the neck of the rest of the country. Don't follow me? Look at the energy that these "too" big homes will eat up over their life? It will be a lot more than 35 years. Further, how could we have had a tax or political policy that encouraged "us" t buy these big homes and thus mortgage our countries future? It is one thing to buy a car or a fur coat, but a home is another thing. I used to live in San Jose California and there were orchards every where. Streets were named after the types of fruit trees, yet today, San Jose is wall to wall homes and I mean big homes. There used to be 10 or 12 big canneries in San Jose, now there are none. The main reason is these big homes we sunk much of our national wealth into.
How does a big house help you put gas into your car or food on the table? It does not. Much of your labor is to pay the thing off and most of us will never pay off the homes we live in. Is that sick or what? How much different do you think the country would be today if you lived in the same home as your parents? What if the money that you spent on that big house had been spent on productive equipment or tools that made a product? Look at Home Depot. They saw us all dumping our savings and future earnings into our homes and tried to get a piece of the action. We should not have needed a Home Depot in the first place. Our parents got by just fine without Home Depot.
I have blogged on this before, but you can see backwards that we made a very big mistake when we bought into this idea of a big home for everyone. We sold our future and that of our kids for what? A big house that they will not be able to afford to heat? I was reading that in Detroit 25% of homes are abandoned and the only solution is to tear or burn them down. Isn't it interesting to look across the river to Toronto and see a much different picture. They did not fall for the big home craze like we did and they are doing fine. It is easy for me to call attention to all this, but how to dig out of it is not so easy. It is a deep hole and it took a long time for us to dig this deep. My point is that it is going to take a very long time for "our kids" to dig out of this one. Those of us who dug this hole are all going to be dead by the time our kids dig out. That is a fact. As long as Obama and his union friends keep on digging, it will be just that much longer before we really start to fill in the hole.
Just for the record, my plane was built in 1960 and is now 51 years old and still doing its job. Why don't our expensive ship last longer and thus save us taxpayers money? I guess I will have to leave this to the experts in Washington DC.
It was not the destroyers that interested my the most on the trip, it was the size of family homes. Once I got closed to Washington DC and the state of Virginia, it seemed that homes kept getting bigger and bigger. I am sure that anyone could have housed three or four families just fine. I don't have any problem with people who would like a nicer home, but we have gone way too far on this one. I know that people in the Washington DC are make a lot of money, but the homes look like they must average almost a million dollars each. I have always figured that the cost of a home is 1% per month of its selling price. If that is a million dollars, then the cost for whoever is living in it is about $10,000 per month. That is $120,000 per year. Just who are the people who can afford that much? If you look a little deeper, the problem is "not" who can afford it. The question is how can our country expect to survive if people who can afford $10,000 per month for a home are investing in a home that will be an anchor around the neck of the rest of the country. Don't follow me? Look at the energy that these "too" big homes will eat up over their life? It will be a lot more than 35 years. Further, how could we have had a tax or political policy that encouraged "us" t buy these big homes and thus mortgage our countries future? It is one thing to buy a car or a fur coat, but a home is another thing. I used to live in San Jose California and there were orchards every where. Streets were named after the types of fruit trees, yet today, San Jose is wall to wall homes and I mean big homes. There used to be 10 or 12 big canneries in San Jose, now there are none. The main reason is these big homes we sunk much of our national wealth into.
How does a big house help you put gas into your car or food on the table? It does not. Much of your labor is to pay the thing off and most of us will never pay off the homes we live in. Is that sick or what? How much different do you think the country would be today if you lived in the same home as your parents? What if the money that you spent on that big house had been spent on productive equipment or tools that made a product? Look at Home Depot. They saw us all dumping our savings and future earnings into our homes and tried to get a piece of the action. We should not have needed a Home Depot in the first place. Our parents got by just fine without Home Depot.
I have blogged on this before, but you can see backwards that we made a very big mistake when we bought into this idea of a big home for everyone. We sold our future and that of our kids for what? A big house that they will not be able to afford to heat? I was reading that in Detroit 25% of homes are abandoned and the only solution is to tear or burn them down. Isn't it interesting to look across the river to Toronto and see a much different picture. They did not fall for the big home craze like we did and they are doing fine. It is easy for me to call attention to all this, but how to dig out of it is not so easy. It is a deep hole and it took a long time for us to dig this deep. My point is that it is going to take a very long time for "our kids" to dig out of this one. Those of us who dug this hole are all going to be dead by the time our kids dig out. That is a fact. As long as Obama and his union friends keep on digging, it will be just that much longer before we really start to fill in the hole.
Thursday, July 7, 2011
National Defense Magazine, Energy
I just ran across an issue of the National Defense Magazine and it had some very interesting articles. One of the most interesting was the "Opinion" by editor Lawrence P. Farrell, jr on sustainable energy. I'll take out some quotes and then review them from a honest taxpayer's perspective.
How about this one by Dorthy Robyn? "Congress is now asking for the data that proves that these programs are worthwhile." This in reference to "Green Energy". It is clear from every taxpayer who has passed 4th grade math that none of these "Green Energy" programs are worthwhile. The problem is how did all this tax money get spent without an analysis in the first place? Every form of "so called" Green Energy costs more than energy from oil, coal, natural gas or nuclear and it always will. Notice how this is stated in the positive expecting that if they can just get the right data, it will prove and Green Energy is a good idea. If the data comes back showing that Green Energy is a rip off, they will only challenge the data and keep on spending our tax money.
How about this one? Kevin Geiss of the Air Force stated that, "...99% of its fleet is certified to operate with a 50-50 blend of synthetic and petroleum based fuels." This is one of the stupidest wastes of tax payer money that I have ever seen. If we have a real war, why don't they just shut down a few gas stations? It would be a lot cheaper. We are not talking about a war that goes on for years where we would need even a drop of synthetic fuels. Who is putting this kind of thinking into the military? I remember in WWII when we could not buy butter. How about burning butter? I guess they want to be ready for some kind of painless war where no one gets killed or has to go without their Twinkies.
Karen Harbert seems to have her head on straight with her comments. "Harbert showed a chart of all the energy development projects--coal-fired power plants, natural gas, geothermal and wind--that have recently been denied in the United States." Now why does anyone need some "chart" showing this? It is on the news every day that Obama is trying to kill the economy using all the governmental agencies that report to the President. It is just like what Salvadore Allende did in Chile before he shot himself.
Farrel goes out on his own and states, "The good news is that the Defense Department is making progress, but there is much more to do." Is this some kind of kiss up so that he can keep selling the magazine? Is anyone related to our government honest and can stand up and lay out the facts. I contend that most are gutless little people who are afraid to rock the boat for fear that they may loose their soft job. Most of us would do well to read more of the Editor's Opinion pages in our magazines. You may be very surprised by what you find.
PS------
"James Leatherwood, a NASA official, also made a pitch for "green energy" development. He said that sustainability is the key driver of innovation." If this is not some kind of light weight statement and a kiss up for more tax money for NASA, I don't know what is. As a tax payer, I have to ask, "how did all these strange thinking people get into such high positions within our government?" I know that they are all some one's baby, but where did we go wrong as parents? I think that we only have to look at our savings that we waisted sending them to our worthless colleges. Look what those colleges gave back to us? Who is now going to save our country? Most of us are too old to make the impact that is now needed and we know that our own kids and grand kids are not upto the task. I am depressed and am think about drinking a cold home brew and punching out.
How about this one by Dorthy Robyn? "Congress is now asking for the data that proves that these programs are worthwhile." This in reference to "Green Energy". It is clear from every taxpayer who has passed 4th grade math that none of these "Green Energy" programs are worthwhile. The problem is how did all this tax money get spent without an analysis in the first place? Every form of "so called" Green Energy costs more than energy from oil, coal, natural gas or nuclear and it always will. Notice how this is stated in the positive expecting that if they can just get the right data, it will prove and Green Energy is a good idea. If the data comes back showing that Green Energy is a rip off, they will only challenge the data and keep on spending our tax money.
How about this one? Kevin Geiss of the Air Force stated that, "...99% of its fleet is certified to operate with a 50-50 blend of synthetic and petroleum based fuels." This is one of the stupidest wastes of tax payer money that I have ever seen. If we have a real war, why don't they just shut down a few gas stations? It would be a lot cheaper. We are not talking about a war that goes on for years where we would need even a drop of synthetic fuels. Who is putting this kind of thinking into the military? I remember in WWII when we could not buy butter. How about burning butter? I guess they want to be ready for some kind of painless war where no one gets killed or has to go without their Twinkies.
Karen Harbert seems to have her head on straight with her comments. "Harbert showed a chart of all the energy development projects--coal-fired power plants, natural gas, geothermal and wind--that have recently been denied in the United States." Now why does anyone need some "chart" showing this? It is on the news every day that Obama is trying to kill the economy using all the governmental agencies that report to the President. It is just like what Salvadore Allende did in Chile before he shot himself.
Farrel goes out on his own and states, "The good news is that the Defense Department is making progress, but there is much more to do." Is this some kind of kiss up so that he can keep selling the magazine? Is anyone related to our government honest and can stand up and lay out the facts. I contend that most are gutless little people who are afraid to rock the boat for fear that they may loose their soft job. Most of us would do well to read more of the Editor's Opinion pages in our magazines. You may be very surprised by what you find.
PS------
"James Leatherwood, a NASA official, also made a pitch for "green energy" development. He said that sustainability is the key driver of innovation." If this is not some kind of light weight statement and a kiss up for more tax money for NASA, I don't know what is. As a tax payer, I have to ask, "how did all these strange thinking people get into such high positions within our government?" I know that they are all some one's baby, but where did we go wrong as parents? I think that we only have to look at our savings that we waisted sending them to our worthless colleges. Look what those colleges gave back to us? Who is now going to save our country? Most of us are too old to make the impact that is now needed and we know that our own kids and grand kids are not upto the task. I am depressed and am think about drinking a cold home brew and punching out.
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