INTEREST COSTS ON THE NATIONAL DEBT SET TO REACH HISTORIC HIGHS

From the Peterson Foundation -

"CBO projects that annual interest costs will rise from $399 billion in 2022 to $1.2 trillion in 2032. As a percentage of gross domestic product (GDP), those costs would double from 1.6 percent of GDP in 2022 to 3.3 percent in 2032, which would be the highest level ever recorded."

Click on this link for full article.

Post Office Facts - What’s The Hoopla All About?

So Trump is Closing the Post Office to Prevent Voters from Voting. NOT.

SIMPLE FACTS

• The US Post office moves 450 million pieces of mail every day. That is over 13 billion pieces of mail each month.
• The total votes cast in a presidential election are 125 million. If every vote in the United States was cast by that would be less than 2% of monthly mail volume. (Ballots are mailed mostly on same day, even though each state may be different, but are returned through several weeks prior to the election.
• Under NO circumstances, will every vote case be sent through the mail. A generous estimate would be 1/2 of all votes cast.
• The US Postal service has run substantial deficits every year for more than ten years and lost over $8 billion in last fiscal year.
• 1st class mail volumes have decreased over 25% in last nine years. Trump appointed an executive to right size the Post Office expenses.
• 14,000 mail boxes were removed since 2009 for reasons explained by President Obama in 2009. 
• Current financial shortfalls are not expected to impact operations until next year (after election.)
• Congress has repeatedly blocked efforts to address financial challenges (see below.)
• Democrats lie about everything. 

More facts from Liberty Laura:

https://www.facebook.com/1610844859198173/posts/2731647897117858/

The Post Office is an independent agency, managed by a board of directors, but subject to congressional control. There is a long history of attempted cost-savings measures, by Post Office executives, which eventually get blocked by lawmakers in Congress. Classic. 

Example 1: Whenever the Post Office tries to close rural office locations (an effort with potential cost-savings of $500 million/year), congressmen object. "If you want to watch a Congressman flip out, suggest closing a rural post office in his district," they say.

Example 2: In 2013, the agency tried to save $2 billion by adjusting its delivery schedule, yet Congress continued to mandate six-day service. 

Example 3: The Post Office cannot increase prices on letters and junk mail more than the rate of inflation, because of a law passed by Congress. Even the Post Office has complained about this one, saying, "Most of the Postal Service’s business is subject to a rigid price cap unlike anything faced by private companies."

Example 4: In 2006, Congress passed the Postal Accountability and Enhancement Act, which requires the Post Office to pay billions every year for future retiree health benefits (not pensions), something no other agency does.

Sources: 
1. https://bit.ly/2Q2YRZ3
2. https://bit.ly/2Q2Z1j7
3. https://bit.ly/2Q6OVxr
4. https://bit.ly/2Y9OxD8
5. https://bit.ly/3kOUleZ

Tax Policy Under Biden and Democrats

One of my preferred economists, Brian Wesbury of First Trust Advisors, published an analysis of proposed tax policy and its implications to the economy if enacted. Most of these policies cannot be enacted without Democrats taking control of the House, Senate and White House. The analysis implies that some proposals may not have a significant adverse affect while others will. Without question, these proposals, or other versions, will usher in another round of job killing economic policies of Democrats. Keep in mind that all of this would be on the heals of one of the worst economic calamity ever forced on the economy by Democrats. Here is the analysis.

"What many investors are focused on is a scenario where Biden wins and the Democrats also take the Senate. In that scenario, the Democrats could use the special budget process on Capitol Hill to raise taxes permanently (meaning no natural sunset) with a simple majority, like President Clinton did in 1993.

Biden's team has made plenty of tax proposals, but we're going to focus on what we call the Big Five:

1. Raising the top income tax rate on regular income back to 39.6% from 37% 
2. Raising the corporate tax rate to 28% from 21%
3. Ending the step-up basis at death
4. Treating long-term capital gains and qualified dividends as regular income for those earning over $1 million
5. Applying the Social Security payroll tax on incomes over $400,000+

Will Trump or Any President Cancel Social Security? No!

Political divisiveness is rampant in the media and internet websites. Some stories are promoted by political parties/groups and some may be supported by foreign interests.

Here is what you should be sure of. Trump will never support “getting rid of Social Security.” No one in Congress will vote for that even if any President wanted to.

Recently, Trump DID SAY he wanted to get rid of the “payroll tax” which primarily partially funds Social Security. That reflects his view (shared by many over the years) that the payroll tax (15% of wages) is very unfair and regressive. That applies to the first $137,700 of wages irrespective of income. Therefore, someone making $25,000 pays the same 15% as someone making $250,000. In fact, higher incomes stop paying above the threshold. Many economists feel it has become unfair.

Currently, those taxes are earmarked for Social Security. In the Federal Budget, all the funds are commingled. Future planned benefits cannot be paid out of funds set aside. There are not enough funds and those funds are not segregated. It has been a long standing fraud on Americans to suggest SS benefits were safely set aside. They simply are not.

What Trump wants to do (and has always said so) is to fix an unfair tax, and, find a way to honor the commitment to beneficiaries.

Any reasoned analysis of Social Security shows there are long standing problems with paying these benefits. It has to be fixed. Like many issues, Trump wants to fix it even though it will be hard and want to be avoided by the politicians that created the mess.

For my friends who are in Illinois, the pension crises for state and local employees in Illinois is much much worse due to chronic bad policies regarding excessive pension benefits, state budgets and funding. While Illinois is only one state, the lack of funding to pay pensions to state employees is almost as large as the unfunded benefits in Social Security.

Details:
15% payroll tax for Social Security and Medicare is jointly paid by both employee and employer.

The max income threshold of $137,700 applies to SS tax (called FICA) and there is no cap on Medicare tax.)

COVID 19 Stimulus - Round 4; Horse Trading is Good for America

Attached below is an article the reviews the attempted horse trading going on with trillions of your tax dollars. The US Budget for the fiscal year ended Sept 30 2019 was just over $4 trillion (that is $4,000 billion.) Even in fiscal 2019, the Federal government borrowed additional debt of nearly $3 trillion. So with the stimulus payments this year, Federal spending could easily approach $6 trillion and what is being proposed or "negotiated" is an additional $1 to $3 Trillion. 

The concerns with previous stimulus is that some payments were clumsily provided and the substantial unemployment benefits incentivized some not to return to work. Readers should know that the average unemployment benefits per week were about $330. The CARES Act increased that to $930 per week with an addition $600 per week. That combination of state unemployment benefits and CARES act provided such large benefits that some workers preferred to stay home rather than return to work. Many receiving those benefits were being paid more than "many essential workers" that were showing up to serve Americans during the Pandemic. 

This is a typical ideological conflict that is common place. Dems always want more hand outs, even when excessive, to curry favor with voters. Repubs are willing to help the needy but do not want to create incentives that are counter productive. 

Like most policy disputes in Washington there are easy pragmatic solutions if elected leaders did what is best for Americans. But they don't. 

A Simple Truth solution is to taper benefits down to zero in a few months to encourage everyone to return to work. Say continue for two months at $500 per week.. then two months at 300 per week and then drop to $100 per week after four months for another 6-12 months.

There are other issues in dispute but the Simple Truth is there are pragmatic solutions. Another key dispute is over Federal bail outs for states that have wrought havoc on financial position due to long standing unsound financial practices and flawed lockdown decisions. These are democrat run states like California, Illinois, New York and New Jersey. 

But "we" elect too many to Congress that care more about their political future than doing what is best for America. Let them know how you feel. No more horse trading.

Here is the Article that provides a recap the breakdown in "negotiations."

Here is a link to the Federal Budget with actual data about spending.

Captive Mind And Resegregation; Wall Street Journal; August 3, 2020

Editor Comment - this is one of the more effective discussions about what is happening in America and why we need to stand up in opposition. I have excerpted much of the article below:

"Idol smashing and cancel culture are part of a broad ideological project to dominate society."

"Czesław Miłosz, a future Nobel Prize-winning poet who had just defected from Poland, began work in 1951 on a book called “The Captive Mind.” Even as Stalinist totalitarianism tightened its grip on Eastern Europe, many Western European intellectuals lauded the brave new world of Soviet communism as a model for overcoming “bourgeois forces,” which in their view had caused World War II. Living in Paris, Miłosz wrote his book, which was published in 1953, to warn the West of what happens to the human mind and soul in a totalitarian system.

Defunding, Dismantling, & Destroying America - Dan Crenshaw

This is a podcast from Dan Crenshaw, a Houston Congressman and ex Navy Seal. He is one of the more thoughtful and articulate leaders on the right. This podcast is an excellent recap of what is going on in America with lots of facts and not opinion or vitriol. In his words, he is not creating a straw-man. It is worth 38 minutes to listen to - link below. In his words the podcast is about Democrat intentions:

"Abolish the police. Take over free markets. End the Electoral College. Destroy our health care system. It's been a long time since Democrat leaders were this far apart from their Republican colleagues in either political or cultural perspectives. On this solo episode, Dan expands on his recent thoughts about the differences between the two parties policies, and what it all means for the future of America."

Click on this link to listen to podcast

"So What" to Naysayers of Tax Policy on Corporations; Tim Spinner

I was invited me to contribute over a year ago and I graciously accepted.  Hope you enjoy!

My main bone of contention with all the contentious rhetoric around the GOP tax bill is that it has turned everyone who opposes it, opposes the GOP or opposes Trump into Miss Cleo. If I had a nickel for every time I've heard someone say that they know, beyond a shadow of a doubt, that [a tax cut on business] will absolutely, positively, unequivocally do nothing to help the economy, I'd put Jeff Bezos to shame with his paltry personal wealth.

Dignity in Political Debate - Why it is Important and Becoming Rare

“We are becoming a society incapable of having debates,”

Below is a link to a video link of an eloquent speech on the need for dignity in political debates. Something for all US Citizens and government officials to consider. Please watch and Share.

Storing Nuclear Waste In America

In the Wall Street Journal November 15, 2016, an article discussed the political stonewalling of a number of issues including how do we store nuclear waste. The following article describes the issue over the years and the need to make policy decisions. This is one of many issues that languished in an era that doing nothing was preferable to making important decisions.

Wired.Com - Storing Nuclear Waste

Was Bernie Right? And the Need for Campaign Finance Reform

Typically, Simple Facts and Simple Truths avoids advocating for or against any one politician or party. The purpose here is to inform the reader about issues. And where we occasionally agree with a candidate, does not mean we endorse them.

But, there are issues that are being flushed into the open in the current political process. One common campaign theme is that "there is too much money in politics"... and.... "our political system should work for everyone and not just Wall Street.." Bernie Sanders is someone that talks often about these issues. In fact, one candidate's stump speech resonates with many Americans when he says "I am not taking money from anyone."

US Senate Calls Out Iran and US about Agreement

Secretary of State Kerry has expressed outrage over the recent open letter from 47 US Senators to Iran regarding the lack of standing of an "executive agreement" that Kerry and President Obama are trying to negotiate with Iran. 

A few Simple Facts:

• The stated purpose of the agreement is to contain and limit Iran's capacity to construct a nuclear weapon.
• Iran has been a major antagonist to the US and its allies in the Middle East and throughout the world. (Leaders of Iran have called for "death to America". Iran recently has been known as a source of many American deaths in Iraq and also discovered to be in direct support of Osama Bin Laden.)
• Iran has been processing nuclear fuel for years. Iraq has amassed significant nuclear processing equipment. Many believe that the only purpose of this capacity is to create many nuclear weapons. Iran has rejected proposals for being supplied nuclear fuel by other countries for domestic energy production (i.e. power plants)
• President Obama has not disclosed many details about the agreement. He has stated that he does not intend to ask the Senate to ratify a possible agreement. The constitution is clear that "a treaty" must be ratified by the Senate to be binding on the US beyond the term of the current President (less that two years).

Here is the Simple Truth

Iran has a long record of attempts to undermine US interests in the world. Many report Iran as a major supporter of terrorist activities throughout the world. They have proven over and over to be untruthful and unreliable as a foreign state. These negotiations have went on for years and been extended several times.

As with most major treaties, the Senate is called on to ratify treaties. If is not a treaty, then a negotiated agreement has little lasting effect as defined in the US Constitution.

If Iran is not restrained in constructing nuclear weapons, it is an "existential threat" to the US and its allies. The President has acknowledged as much. Yet, an "executive agreement" is meaningless without Senate ratification. The "Simple Truth" is that if "advice and consent" and ratification of the Senate was sought, the effect would be:

i.) build political support for negotiated agreements,
ii.) improve the terms of the agreement,
iii.) increase negotiating leverage with Iran, and,
iv.) the result being a meaningful and long standing agreement.

Otherwise the executive agreement is meaningless and the protests from supporters of the President are SPECIOUS!

Fiscal Cliff = Fiscal Fiction

There is so much misinformation being given to the American People. Listening to the political leaders and talking heads has obscured many important facts about the "fiscal cliff". Here are several of the important ones.

1. We have to raises taxes on the top two percent because we can't afford those tax rates - according to White House.

Our ANNUAL federal deficit is nearly $1,000 billion ($1 trillion). The tax increases on the top two percent earners (> $250,000) will at most yield $80 billion annually. That leaves annual deficits of $920 billion.

2. Social Security does not affect the deficit.

It actually does. While the accounting records for many federal expenditures are segregated, Congress has long ago treated spending as a unified budget. Social Security does have a separate tax to fund, but, those tax dollars will be inadequate in a few years. Then, the rest of the Federal budget will have to source these payments. There is a lot of confusion on this issue to obscure how big the problem is. In effect, the federal government for years has used/spent surplus revenues collected into the Social Security fund accounts.

3. The President campaigned on raising taxes on the top 2%. He should get his way and Congress should pass legislation to raise taxes as he campaigned on.

It is true that he campaigned on increasing taxes. He also campaigned on many other things. It is also true that he likely believes that Congress should concede to his wishes.

However, the President did not run on amending the constitution to eliminate Congress' role in passing tax laws. The one truth about election results in 2012 is that the balance of power remained the same after the election and most of the same people and influences are still in place. That means that Congress and the White House both have a significant say in the outcome of tax policy. Our constitution was not changed by the election.

Most Important Election Ever

From this point forward, this blog will be focused on giving friends and followers information that leads to the conclusion that voters should "Vote Em All Out". My orientation comes from living in Central Illinois and seeing the negative turn of events in our country. From where I sit, Obama was a "bait and switch" candidate. He lead the country to believe that he would be post-politics, consensus builder, post racial and new age world leader. In fact, he is simply a socialist.

And, he has too many enablers in Congress. Not all members of Congress are socialists. Some are. But the democratic leadership and majority support too many of his policies. These policies are either socialistic, or are designed to reduce freedoms, or to nationalize the US economy. Enough is enough. The worst of these are:

• ObamaCare
• Tax and Trade (tax)
• FinReg

And Illinois is not better. Illinois is behind 5-6 months in paying its bills. Its pension obligations can never be met without taxing the state into oblivion. And if a state could be bankrupt, Illinois would be.

It is time to Vote Em All Out ("VEAO"). We would be better of with a whole new group of elected leaders in the Federal government and in Illinois. While these posts, won't duck local issues, the focus will be on national and state issues.

Critics might point out that we would be giving up either experienced leaders or effective leaders. That may be. But, the benefits of reminding all elected leaders that they can be held accountable is worth the cost. In general, a whole new group, can't be worse. In calling for VEAO, this blog does not suggest that every voter should vote out every leader. It does mean hold them all accountable.

In future posts, this blog will be a depository of what is wrong with the federal government and Illinois government and issues that voters should consider when deciding who to vote for. In many cases, the blog will link readers to articles and analysis from around the country. The focus will also be on races where readers of this blog can influence with their vote. That will mean the IL Congressional 17th District. The IL governor, the IL US Senate race, and, IL legislative races for central Illinois.

This blog will also suggest the most important issues to consider in the upcoming election and policies on those issues to measure candidates against.

ObamaCare will Fail

As I write this, many in Washington are predicting a successful vote this week in the House of Representatives. And while this may occur, nearly all democrats know that no legislation can get passed by either house without a "fix-it" bill that no one has seen and no one knows the costs of.

Am I making an amazing, and possibly wrong, prediction on the votes in Congress on health care reform? No. I am saying that even if legislation passes called "health care reform" ("ObamaCare"), it will in fact fail.

1. First, the "ObamaCare" legislation could not get passed in any conventional way. So far, we have a bill passed in by the Senate and one passed by the House that are significantly different. Neither House of Congress is willing to pass the other's bill. Even the President said he want's fixes to both. The only way "ObamaCare" gets through Congress is with political bribes, chicanery and trampling of rules that have existed for decades. Everyone agrees that this bill will have substantial affects on the health care sector of the economy. Everyone also agrees the financial impact of the proposed legislation is far reaching. The Simple Truth is that any bill that has such pervasive impacts on Americans and the US economy should not pass as a result of such trickery. And it could not pass without it.
2. Even if the legislation passes, it will result in years of litigation on multiple fronts. From issues of basic constitutionality (forced coverage) to inequal treatment of groups and states. We will never know the impact of this "ObamaCare reform" as it will be in flux for years if not decades in the courts. This too is failure.
3. Third, even if this legislation passes, it will not accomplish the goals that have been stated by its strongest advocates. It is equally likely to leave us with the same or more uninsured Americans. It is more likely to result in increased health insurance premiums and costs. And, it is likely to blow a huge hole in the side of the financial ship of America.

The Simple Truth is that this is the worst legislation ever. It deserves to fail. And if it passes... it will still fail.

The Simple Truth is that America WANTS health care reform. This legislation is not it.

CBO - "Show Me the Money"?

The new Democrat device to obscure the abysmal ObamaCare from Americans is a false premise about concerns with CBO analysis. They are insisting that Republicans are rejecting CBO analysis because they just don't like the result.

The largest problem with CBO numbers are inherent in any CBO analysis and the context of that analysis. Even the CBO would acknowledge these limitations. This problem is related to the untested assumptions and the long-term nature of the projections. They are particularly important here because the huge size of the health care sector (1/7th of the US economy) and the very long term nature of the alleged impacts.

As one commenter said about the CBO analysis of Obamacare:

"They don't pass the smell test."

Key business decision analysis rarely places reliance on projections that extend more than 5-10 years. The analytical problems include:

• The projected deficit reductions are over long periods of times and rely on many unreliable assumptions on impacts.
• The CBO estimates do not include all the provisions because the "fix bill" has not been described or analyzed. In fact, no one has even seen the fix bill or know the interaction of its provisions against the Senate Bill whatever may be included in it.
• The projected impacts presume a few years of costs in the 10 year horizon, and full 10 year taxes. Therefore analytical apples and oranges.
• The projections simply mush together service cuts (Medicare - HMO programs), tax increases (different in each bill) and alleged cost curve impacts.
• The stated deficit reduction in the first 10 years presume cuts, taxes and savings, while not comparing those to the entire health care bill for the full 10 years or the increased costs over the 10 years, both to the economy, and to the federal government.
• Many of the alleged cost curve savings make many presumptions about the impact while ignoring the small effect and limited basis for the assumption. Many of the cost curve changes are quite modest changes.
• Not discussed in the CBO savings are the full impact of the costs in insurance premiums. There is reasonable concern that insurance costs could increase substantially due to the incentive for adverse selection due to the modest penalty for choosing to be uninsured versus the benefit of "must carry".
• A very important limitation of the CBO analysis is that it seems to hide a new entitlement program that is all cost. Rarely do we discuss the specific and likely underestimated costs of the federal government subsidies of health insurance for those "in need". This cost is likely to be higher for many reasons and will not be offset by hopeful assumptions.
• The CBO analysis does not compare the costs/savings against other alternatives that might be more effective with much less analystical risk and much less cost. Any analysis has uncertainty.

The snuck out the $200 billion medicare doctor fix of the health bill and are running it through the jobs bill... so much for CBO integrity.

Dear Congressman/Senator: Not THIS Health Care Reform

If passed, the various health care reform bills in Congress may be the worst legislative events in the history of the United States. This legislation may single-handedly undermine the financial integrity of our government and country.

While there are numerous legitimate goals for health care and health-finance reform, the legislative efforts so far indicate that the real purpose of the Democrats is to initiate the take over the entire US health care system. Of the many short-comings of proposed legislation, the more significant criticisms include:

1 - The high cost (which Congress has obscured), increased premiums and taxes,
2 - The lack of interstate competition
3 - The failure to rein in malpractive lawsuits and related costs
4 - The failure to provide effective incentives to draw more people into the system (current proposals leave more than 15-20 million uninsured.)
5 - The failure to equalize tax effects of buying insurance between individuals and corporations.

The current proposals will greatly increase the cost of private health insurance, discourage people from having health insurance, and increase the incentives for people to depend on the Federal/State government for the costs of health care. Your continued support of the this legislation is a significant mistake for the citizens of your state and the entire country.

Ten Best Reasons to Oppose Health Care Reform

Most of us are not opposed to health care reform (See this Washington Post link for an excellent primer on health insurnace in the US.) and most of us agree on objectives. My concern is that the leaders driving the reform bus (President Obama and Congressional Democrats) are not genuine in their real purpose. Accordingly, their legislative prosposals seem inconsistent with their goals.

For example, there is little in the bills to reduce or control costs. The current Senate Finance plan does not have any limitations on medical malpractice lawsuits. Too many Americans will remain uncovered (25 million). And, two essential elements of reform i.) tax equalization, and ii.) interstate competition of insurance companies are nowhere in sight. For those that prefer shorthand, here are the ten best reasons to oppose the current health care reform proposals:

1. Key and critical provisions are missing. a) Malpractice reform, b) tax equalization and c) interstate competition of health care insurance companies.
2. Costs are excessive. CBO estimates are based on many flawed assumptions. If medicare savings could be easily realized, why hasn't Washington done it before now.
3. Massive implicit tax increases. The Finance Committee proposal has $400 billion in tax increases. While proposed to be levied on insurance companies, if enacted at all as described, they will be pass throughs to beneficiaries.
   

Health Care Reform on One Page

With all the debate about health care reform, it really can be quite simple. Here is my one page plan. Tell me your thoughts and don't hesitate to share it with your favorite Congressperson or President.

The Secretary of Health and Human Services shall develop regulations to enact the intentions of Congress to reform the United States health care industry as described below:

1 - Interstate marketing of health insurance plans. Insurance companies shall be permitted to offer and sell health insurance plans across state lines so long as they otherwise conform to insurance regulatory requirements of the individual states.

2 - Requirement for Medical Doctor Counseling. All insurance plans and programs marketed and offered in the United States shall provide for once per year for each person covered by such plan one hour of medical doctor counseling as to health risks, treatment plans and health practices to reduce risks and treatment costs.

At Last - Health Care

If there has ever been an issue crying our for national debate it is health care. But, first we need to see that there are multiple issues involved. While they may be inter-dependant, they are not all the same issue. Lets first take up the distinct issues:

1. Cost - Is the cost of health care to high in the US? Is it affordable and is it a good value?
2. Access - Do all citizens and residents have access to health care? And, do they have access in a way to encourages a reasonable or high quality of life?
3. Who pays - Does the current financing method for health care provide for the appropriate balance between access to health care, affordability and excess use?
4. Quality - Are Americans receiving reasonable quality health care?

Over the next few weeks many will be commenting on proposed changes to our health care system. Clearly, the US system as it exists is not optimal but it is not terrible. Changes in policy are long over due. In general terms, we must consider "fixes." Answers to all of the above issues are "we an do better."