The Politics of Today

This cartoon from the New Yorker is great.  It's just what I have been talking about, but does a much better job with just a picture and a caption.  


Enjoy, beware of "candidate speak", and take care.

Buffett and the Congress

This has been going around the Internet lately.  What do you think? The following idea from Warren Buffett perhaps explains his great success.  He puts forward a truly simple idea to solve the U.S. fiscal crisis.  He gets right to the root of the problem, and his suggestions might indeed push things in the right direction.   In a recent interview with CNBC, Warren Buffett offered the following about the debt ceiling: “I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election." The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months and 8 days to be ratified!  Why?  Simple!  The people demanded it. That was in 1971, before computers, e-mail, cell phones, etc.  Of the 27 amendments to the Constitution, seven took 1 year or less to become the law of the land, all because of public pressure. And what about the following proposal, perhaps also from Buffet? Congressional Reform Act of 2011 1) No Tenure / No Pension.  A Congressman collects a salary while in office and receives no pay when out of office.  2) Congress (past, present & future) participates in Social Security.  All funds in the Congressional retirement fund move to the Social Security system immediately.  All future funds flow into the Social Security system, and Congress participates with the American people.  It may not be used for any other purpose. 3) Congressmen can purchase their own retirement plan, just as all Americans do.  4) Congress will no longer vote itself a pay raise.  Congressional pay will rise by the lower of CPI or 3%. 5) Congress loses its current health care system and participates in the same health care system as the American people.  6) Congress must equally abide by all laws they impose on the American people.  7) All contracts with past and present Congressmen are void effective 1/1/12.  The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their terms, then go home and back to work. To me, these are not bad ideas.  If our elected officials had to experience what the average American does, and not get to set themselves up as the elite with better treatment, perhaps we would get some problems solved. In regards to my post of yesterday, I do not think that the above is a simple solution to all of our ills, but it does get one thinking about the cause and effect of action, or non-action.  I do not think that many of the points above are feasible, but it does give the impetus to look for how we can have reasonable change that is good for the country, and not just a small segment of it. Take care.

The Economy and the Budget

So what are our leaders going to come up with now?  Can they agree on anything?  

It seems like there may be some agreement on letting about one million homeowners refinance their mortgages so the amount they owe is in line with the worth of the home.  An argument against this is that the investors will get a lower rate of return than they had expected.  Well, if these mortgages sink, then they will probably just get pennies on the dollar.  We should be doing this for many more who are under water.  This million and the million that have already been refinanced are just a drop in the bucket out of the twelve million homeowners in similar circumstances.

I think this is a program that will help and should be implemented.

President Obama is crafting a similar program for those with outstanding educational loans and that program should be implemented also.

The economic figures have not been good, and that is not even looking at our friends in Europe and elsewhere.  The figures for 2010 show our poverty rate has risen to 15.1%, its highest rate since 1993.  Now about 46.2 million Americans are considered to be in poverty.

The poverty line is defined by the government as being $22,314 for a family of four and $11,139 for an individual,  adjusted for inflation.  The income to calculate poverty status includes earnings, workers’ compensation, unemployment insurance, Social Security, veteran’s payments, interest, and dividends.  

Can you believe that a family of four making $23,000 per year is not considered to be in poverty?  How could you and your family of four live on that amount?

The income of the middle class has fallen.  It is now down to $49,445.  The median income has changed very little over time - it is only up 11% since 1980.  Of course the richest 5% of Americans have seen their incomes increase 42% over that same time frame.  Sixty percent of households saw their income fall last year, while those making over $100,000 enjoyed a rise in income.

More children in America are in poverty - that figure is up to 22% of those under 18.  Another interesting figure is that last year 5.9 million young adults (25-34) stilled lived with their parents compared to 4.7 million for 2009.   

Also more people are uninsured as that number is 49.9 million, up from 49 million in 2009.

The Congressional Budget Office recently reported that from 1979 to 2007 the average household income for the nation’s top 1% nearly went up 275%, while middle class incomes grew less than 40% over the same period of time.  The poorest fifth of the population saw their incomes grow by 18% in that timeframe.  All this figures were adjusted for inflation.

These numbers can’t be ignored or swept away by campaign rhetoric.  

One thing for sure is that there are no simple answers - a 9-9-9 scheme will not work nor will a 20% flat tax, as some Republican candidates have proposed.  There must be tax increases along with program cuts.

There must be tax increases along with program cuts.  The very rich are getting richer and everyone else is losing ground.  The Congress must work together towards a combination of program cuts, which must include the Defense Department, and tax increases for those who can easily afford them.  If they do not, everyone should be voted out of office.

We have serious problems facing us in terms of the economy, unemployment, poverty, lack of health care, poor education, the poverty of the elderly, the loss of manufacturing jobs, and so forth.  

Anyone who says that these problems can be solved simply, with a slogan, or in a short time frame, is playing you for a fool.  We need to work together, as we have in this country’s history, and fashion solutions that will help.  These will take time and will mean sacrifice.  Let’s face up to it.

Take care.

A Thought for the Day

Kindness in words creates confidence.  Kindness in thinking creates profoundness.  Kindness in giving creates love....  Perfect kindness acts without thinking of kindness.   Laozi


Take care.