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One Man's View » Budget Deficit http://onemansview.us Have you had enough of the insanity in Government? Sat, 01 Sep 2012 21:28:06 +0000 en-US hourly 1 http://wordpress.org/?v=3.4.2 Mr. Scam Man http://onemansview.us/government/mr-scam-man/ http://onemansview.us/government/mr-scam-man/#comments Sat, 01 Sep 2012 19:38:29 +0000 Chuck http://onemansview.us/?p=1291

A friend sent me the link to the following video.  It would be funny if it weren’t so true.

 

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The Civil Service Union Travesty http://onemansview.us/humor/satire/the-civil-service-union-travesty/ http://onemansview.us/humor/satire/the-civil-service-union-travesty/#comments Fri, 08 Apr 2011 21:52:44 +0000 Chuck http://onemansview.us/?p=1027

First, I can’t take credit for this, and it came out awhile ago.  Also, due to some rough language, it’s not safe for work or kids, so be forewarned.  This will definitely piss you off, but it will make you laugh, too.  I especially like the subtle image of the tennis racket on the bench.

 

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New Class Warfare? http://onemansview.us/government/economy/new-class-warfare/ http://onemansview.us/government/economy/new-class-warfare/#comments Thu, 17 Jun 2010 14:02:16 +0000 Chuck http://onemansview.us/?p=853

There is a new storm brewing on the horizon you all should be aware of: That of the approximately 10 million private pensioners lobbying for a government bailout. None of us have forgotten the trillions of our tax dollars spent on the private financial sector bailouts of 2008 and 2009. Well, that’s just the tip of the iceberg.

We have police and firemen retiring in their early 40s on full pensions, teachers (and school administrators) receiving guaranteed annual raises (not based on merit) despite the recession, and our politicians continually agreeing to unsustainable (and unfundable) public sector compensation programs.  The Tea Party movement has seen this coming, and you should be aware of it, too.

We are a Capitalist Society – There are NO Guarantees

To quote Damien Hoffman of the Wall St. Cheat Sheet, “There are no guarantees in Capitalism.  If the U.S. is to recreate one of the greatest economies in the world, we must end the practice of aiding businesses and programs which would otherwise go bankrupt without government subsidy.  Once guarantees are offered to a privileged group of people, a society ends up in the current tit-for-tat gameplay currently reaching elevated heights in the U.S.”

Granted, there are programs providing significant value to a small percentage of people that really need the assistance.  However, guaranteeing survival in the private market or permitting outlandish retirement benefits in the public sector are a direct path to the same fate as ancient Rome.

It used to be that a person contemplating going to work in the public sector would work for less wages than his private sector counterpart, but had a nicer retirement and benefit package to offset the wage disparity.  This has changed, in that public sector wages have caught up with (and in many cases, surpassed) those in the private sector, while the public sector fringe benefits have gotten even fatter.

The tit-for-tat mentality works this way:

The public sector employees aren’t blind, and see the bailout money flowing to the public sector for a lot of stupid reasons… much of which lines the pockets of upper management in the form of bonuses.

Then, the private sector sees public employees retiring after 15+ years with full pensions at ridiculous rates (much of which is based on trumped up timekeeping methodology), fully paid medical benefits with little or no worker contribution, and other completely outrageous benefits dreamed up by the labor unions.  This is on top of the wage rate, which in most cases matches that of the private sector.

The private sector then pushes back because they see the waste of tax dollars used to prop up the public sector’s ever increasing standard of living.  The tit-for-tat continues until rational people intervene and stop the BS.

The Insane Public Sector Fringe Benefits Must Cease

The public sector needs to learn basic math.  More importantly, so do the legislators that cave in to the public sector labor unions’ demands.  Organized Labor must be forced out of the public sector, or else there will never be a balanced budget or sustainable tax burden to pay for the continued increases in public sector benefit packages.  This applies at the Federal, State and Local levels.  Government must set the pay scales (similar to the old Federal “GS” system), where promotion and raises are based on time and merit.  Public sector employees must start contributing to their own retirement plans, and the employee contributions must constitute the bulk of the funding.  The High-3* system needs to be retired, being replaced with something similar to the private sector’s 401(k) system, where the pension amount is determined by employee/taxpayer contributions, without regard to how much the employee earned in his/her highest 3 years of compensation.  A change to this type of system would give the public sector employee total control of their retirement fund, thus preventing the Government and Unions from using retirement fund money to fund their pet projects.

Labor Unions Need To Wise Up

Yo… Organized Labor… do you hear me?  My name is John Q. Taxpayer, and I’m mad as Hell and am not gonna take it any more.  Wanna know why?  I’ll tell you:

LABOR UNIONS ARE A MAJOR CAUSE OF THE CURRENT ECONOMIC MESS

That’s right… it’s YOUR FAULT.

When $1,600 of the current cost of a GM vehicle goes toward paying legacy costs (i.e., mostly retiree health and pension benefits), that’s a sign of a major problem.  Assuming the average price of a GM vehicle is $25,000, the cost of retiree health and pension benefits comprises 6.4% of that vehicle’s price and is paying benefits for people that no longer work for GM.  That’s a problem, don’t you think?

39.5% of California’s General Fund expenditures goes toward K-12 education, and 82.9% of that pays teacher and staff salaries and benefits.  In 2006-2007 salaries for classroom teachers accounted for 39.5 percent of school expenditures; salaries for other school staff, including counselors, principals, and secretaries, accounted for 24.4 percent; and employee benefits, including retirement and health benefits, accounted for 19.0 percent.  That’s right… 19% of California’s education budget pays for retirement benefits.  When added to administrative costs, 43.4% of the budget goes toward what we in the private sector call G&A (General and Administrative Expenses).  If a private sector company had G&A expenses of 43.4%, it would be bankrupt because it couldn’t compete in the market.  Oh gee…. look at GM and Chrysler.

For the record, I believe Organized Labor once had its place in this nation.  But those days are over.  We have Federal Labor and Minimum Wage laws that protect the Worker.  The American worker doesn’t need a union to look out for his or her best interests.  What the American worker needs to do is get a better education so they’re better equipped to negotiate their own best deal with their potential employers.

In 2009, just over 16 million Americans are union members, accounting for approximately 12.4% of the workforce.  Organized labor believes that new legislation such as the Employee Free Choice Act (EFCA aka Card Check) will give workers a better opportunity to join the union movement. Opponents feel it’s nothing more than pressure tactics on non-unionized employees.  If you take out the public sector, unions are practically irrelevant, representing just 7.8% of the private sector workforce.

More concerning is the influence unions have through their pension funds. A study done by New York University professor Ashwini Agarwal found that AFL-CIO (the central federation of labor unions in the U.S.) affiliated pension fund assets total $100 billion, with 46% invested in domestic equities (as of September 30, 2006). In 2006, union-related funds were responsible for 295 out of 699 shareholder proposals. It also found that AFL-CIO funds became much less combative when the union no longer represented a company’s employees.

If you have a union pension, take a very close look at the investments. You can bet they’re playing retired workers against the current workers in a sophisticated game of chicken. Don’t let it happen. Unions increasingly find themselves in a conflict of interest today, in that they claim to represent the worker, when in reality they only represent themselves using their (unearned) influence to buy political favors by contributing to political campaigns.  It’s a cat and mouse game that politicians would do well to beware of (and this includes you, Mr. Obama, with your cozy relationship with SEIU).  Conflict of interest works both ways.

Of course, this is just One Man’s View.  Your comments are, as always, most welcome.

]]> http://onemansview.us/government/economy/new-class-warfare/feed/ 0 Health Care Law Details You Need To Know http://onemansview.us/government/health-care/health-care-law-details-you-need-to-know/ http://onemansview.us/government/health-care/health-care-law-details-you-need-to-know/#comments Thu, 08 Apr 2010 13:14:58 +0000 Chuck http://onemansview.us/?p=558

Here are 13 changes in the massive overhaul that could impact your tax bill, for better or worse. You may have heard it all before, but I thought it would be nice to see it all in one place.

The new health care reform law is chock-full of new taxes and tax increases that will affect many individuals and businesses, but it will be a couple of years before most of these hikes take a bite out of your – or your company’s – wallet. The law also has tax breaks to help both individuals and small businesses pay for insurance.

1. A new 10% excise tax on indoor tanning services on services provided after June 30, 2010.

2. The new law gives small firms tax credits as incentives to provide coverage, starting this tax year. Employers with 10 or fewer workers and average annual wages of less than $25,000 can receive a credit of up to 35% of their health premium costs each year through 2013. The credit is phased out for larger firms larger and disappears completely if a company has more than 25 employees or average annual wages of $50,000 or more. Beginning in 2014, small firms that sign up with one of the health exchanges to be created can receive a credit of up to 50% of their costs.

3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011.

4. Elimination of a deduction employers now take for providing Medicare Part D prescription drug coverage to their retirees to the extent that the federal government subsidizes the coverage. This will not take effect until 2013.

5. Doubling the penalty for non-qualified distributions from health savings accounts, to 20%, beginning in 2011.

6. A limit on the amount that employees can contribute to health care flexible spending accounts to $2,500 a year, but the cap won’t take effect until 2013.

7. A ban on using funds from flexible spending accounts, health reimbursement arrangements or health savings accounts for the cost of over-the-counter medications, starting in 2011.

8. Starting in 2013, a 0.9% Medicare surtax will apply to wages in excess of $200,000 for single taxpayers and over $250,000 for married couples. Also, for the first time ever, a Medicare tax will apply to investment income of high earners. The 3.8% levy will hit the lesser of (1) their unearned income or (2) the amount by which their adjusted gross income exceeds the $200,000 or $250,000 threshold amounts. The new law defines unearned income as interest, dividends, capital gains, annuities, royalties, and rents. Tax-exempt interest won’t be included, nor will income from retirement accounts.

9. A hike in the 7.5% floor on itemized deductions for medical expenses to 10%, beginning in 2013. Taxpayers age 65 and over are exempt from the cutback through 2016.

10. A new 40% excise tax, beginning in 2018, on high-cost health plans, levied on the portion that exceeds $10,200 for individuals and $27,500 for families.

11. A new tax on individuals who don’t obtain adequate health coverage by 2014. The tax is be phased in over three years, starting at the greater of $95, or 1% of income, in 2014, and rising to the greater of $695, or 2.5% of income, in 2016.

12. Providing a refundable tax credit, once the individual mandate takes effect in 2014, to help low-income folks purchase coverage. To be eligible, a person’s household income must be between 100% and 400% of the federal poverty level, generally around $11,000 to $44,000 for singles and $22,000 to $88,000 for families.

13. A nondeductible fee charged to businesses with 50 or more employees if the firms fail to offer adequate coverage. The fee will equal $2,000 times the number of employees, though it won’t count the first 30 workers in that calculation.

Don’t you just love getting your pocket picked?  Take this debacle, add the failed stimulus, bailouts and the new VAT they’re kicking around, and it’s clear we need to get the perpetrators of these fiascos out of office.

This is just One Man’s View.  As always, your comments are welcome.

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The State of Our Government – Part 4 http://onemansview.us/government/economy/the-state-of-our-government-part-4/ http://onemansview.us/government/economy/the-state-of-our-government-part-4/#comments Fri, 26 Mar 2010 21:10:52 +0000 Blogger http://onemansview.us/?p=397

In the first article of this series I made mention of the need for Government to be run more like a business.  I’m going to expand that discussion here.  I meant to get to this sooner, but I kind of went out in the weeds over the Health Care debacle.

In order for what I’m about to say to make sense to those without financial backgrounds, a brief lesson in financial accounting is necessary.  This is the stuff you’d learn in Basic Financial Accounting 101 in college.  If you already have this background, you can skip down to the more detailed discussion.

There are two (2) basic financial statements:  The Balance Sheet and the Income Statement, also known as the Profit & Loss or P&L.  We’ll discuss the Balance Sheet first.

Balance Sheet

In creating a balance sheet, there is one simple equation:  Assets = Liabilities + Equity.

Assets are typically broken down into Cash, Receivables (short and long term), physical items such as inventory and property, and investments.  These aren’t all, but they’ll work for this discussion.

Liabilities can generally be considered as Debt (short and long term) in one form or another.

Equity is what’s left over when you subtract Liabilities from Assets.

Using your home as an example, is it’s worth $200,000 (Asset Value) and you owe $100,000 (Liability), you have $100,000 in Equity.

Income Statement

The Income Statement’s equation is simply Revenue – Expenses = Profit.

The Balance Sheet and Income Statements are generally used to determine a company’s or individual’s financial health.  Almost every time you complete a credit application, you’re required to provide this information in terms of your monthly income and expenses, plus list what your assets are, and how much, if anything, you owe on them.  Some of this information is used to determine your FICO Score, but that’s another topic.

There are a number of ratios used to determine a firm’s performance and financial situation.  The ones we’re most concerned with are:

  • Current Ratio:  Current Assets divided by Current Liabilities (provides information about a firm’s ability to meet its short-term financial obligations. They are of particular interest to those extending short-term credit to the firm)
  • Debt Ratio:  Total Debt divided by Total Assets (provides an indication of the long-term solvency of the firm)
  • Debt-to-Equity Ratio:  Total Debt divided by Total Equity (provides an indication of the long-term solvency of the firm)
  • Return on Equity:  Net Income divided by Shareholder Equity (i.e.,  the bottom line measure for the shareholders, measuring the profits earned for each dollar invested in the firm’s stock)

We’ll apply these to our nation’s current financial statements later, so you can see how we’re doing.  When interpreting the Financials, remember, YOU are the shareholder… the investor in the business.  You buy company stock every time you pay a tax on anything to the Federal Government.  Congress is the Board of Directors.  The Cabinet and President are the Corporate Officers.  The Board makes policy and the Officers carry out the policy (ignoring for the moment the President’s Veto power).

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