My neighbors are a teacher and a fireman and they are up in arms because the state of Wisconsin passed a law that forced them (actually the teacher, not the fireman) to start contributing to their pensions and toward the cost of their health insurance policies.
One day their younger daughter asked me to explain what was going on and so I gave her this explanation.
"Let's pretend that your father hires me to cut his lawn every week for $20 and that for the next 10 years I perform this service for him at a rate that is in line with inflation. Now at the end of those 10 years I inform him that I am going to retire, but that my nephew will be taking over the business and continue to perform that duty. Now at the time I retire, I'm charging him $25 per week.
The first time my nephew cuts his lawn, he gives your father the bill and it is for $45. When your father asks why he is charging so much, my nephew explains that according to my agreement with him, I am to receive 80% of what I was charging as a pension for the rest of my life and 80% of $25 is $20. Plus, my nephew has to make a living and there is a cost to providing this service so he still needs $25 per week, so the cost is now $45.
This is exactly what is going on in the private sector, a teacher or fireman or whoever is retiring (early) and getting a high % of their highest earning years as a pension, plus getting their health insurance paid for as well. But the municipality has to still provide the service and under their contract, the replacement will come in with a just slightly lower cost (initially). So the municipality must cover the cost of the retired public worker plus the cost of the replacement. Since municipalities derive their revenue from taxes and fees, they naturally must raise them to stay solvent.
So the private citizens have to pay an ever-expanding pool of current and retired public workers, while they themselves are trying to put away money for their own retirement which won't be covered by public money. The math simply does not work (I must add here that I believe this is why schools focus more on teaching "fairness" and "need" instead of basic math)."
She asked me why her parents didn't understand this and I told her that I could not answer that question, but given the voting patterns of the country, they were not the only ones who didn't understand....
Wednesday, April 25, 2012
The Student Loan Crisis
Yesterday the President was out on the campaign trail drumming up support for congress to extend a lower interest rate for current student loans as of July of this year. The action is required because the Democrat-controlled congress of which Obama was part of, passed the bill lowering the interest rate in 2007 with a sunset clause that was coincidentally smack dab in the middle of a Presidential campaign.
This is now ramping up rumors that if the President is still in trouble nearing the election, he will propose that we "forgive" all outstanding student loans outright, which would end up being the highest price for buying votes in the history of this country.
The problem we then face is that, these loans, along with the principle and interest we expect to receive are on the books and are part of the federal budget. Forgiving them would put another huge hole in our projected deficit and I'm sure would elicit an unpleasurable response from those who either worked their way through college, or in fact paid off their student loans already. So how to we cover the cash drain from forgiving this debt?
If the Republicans were smart (and every day it is more obvious that they're not), they would focus on the true cause of the student debt bubble, which is the un-justified rise in the cost of college education. Most of these top universities that have been wilfully charging these bloated rates have huge endowment funds just "sitting there" (as the left likes to say about rich peoples savings). My advice would be to ramp up support for a special tax on "big education", targeting those endowment funds (which are made up of donations from wealthy alumni) to pay off those loans that were racked up because their ridiculously high tuition rates in the first place.
Since "big education" is almost entirely in support of democrats, there is little risk of loss of votes or campaign monies in pitting big education against the middle class who would end up getting stuck with the bill if the loans were simply forgiven without some sort of off-setting revenue....
This is now ramping up rumors that if the President is still in trouble nearing the election, he will propose that we "forgive" all outstanding student loans outright, which would end up being the highest price for buying votes in the history of this country.
The problem we then face is that, these loans, along with the principle and interest we expect to receive are on the books and are part of the federal budget. Forgiving them would put another huge hole in our projected deficit and I'm sure would elicit an unpleasurable response from those who either worked their way through college, or in fact paid off their student loans already. So how to we cover the cash drain from forgiving this debt?
If the Republicans were smart (and every day it is more obvious that they're not), they would focus on the true cause of the student debt bubble, which is the un-justified rise in the cost of college education. Most of these top universities that have been wilfully charging these bloated rates have huge endowment funds just "sitting there" (as the left likes to say about rich peoples savings). My advice would be to ramp up support for a special tax on "big education", targeting those endowment funds (which are made up of donations from wealthy alumni) to pay off those loans that were racked up because their ridiculously high tuition rates in the first place.
Since "big education" is almost entirely in support of democrats, there is little risk of loss of votes or campaign monies in pitting big education against the middle class who would end up getting stuck with the bill if the loans were simply forgiven without some sort of off-setting revenue....
Open Letter to the Chief Confidence Officer of the United States of America
This posting is a great contrast between the choices we make individually with our private resources and the "moral" decisions being made in Washington with other peoples money...
Open Letter to the Chief Confidence Officer of the United States of America
Open Letter to the Chief Confidence Officer of the United States of America
Tuesday, April 17, 2012
Sociopathy Is Running the US - Part Two - Casey Research
If you only read one thing this year from beginning to end, this should be it. Doug Casey does a brilliant job of defining the current path we are on and the economic and psychological pathway that got us here.
It is frightening, however if you are intellectually honest with your own political bias, you'll se that he is more correct in his historical assessment than most pundits on either the left or the right...
Sociopathy Is Running the US - Part Two - Casey Research
It is frightening, however if you are intellectually honest with your own political bias, you'll se that he is more correct in his historical assessment than most pundits on either the left or the right...
Sociopathy Is Running the US - Part Two - Casey Research
Sunday, April 01, 2012
Sebelius: Decrease in Human Beings Will Cover Cost of Contraception Mandate | CNSNews.com
Sebelius: Decrease in Human Beings Will Cover Cost of Contraception Mandate | CNSNews.com
This is a great illustration of not only the level of idiocy we have in our government but also the way the idiots on the left think about things. They never consider doing anything better, faster, cheaper, different; but instead the focus on doing with less and "shared sacrifice" (except for them and their cronies, you can't expect them to live in the puke they have in store for the rest of us).
Let's pretend that Sebelius could actually get a real job in the private sector and that somehow she became the new CEO of Apple following the death of Steve Jobs (remember, I said pretend!). Her testimony above would be the equivalent of announcing that her #1 initiative was going to be to lower the cost of iPhones and that she was going to accomplish this by simply making fewer of them (why didn't that ever occur to Jobs?).
What she would be doing is not actually lowering the cost per phone manufactured, but simply lowering the total cash outlay required to make iPhones by buying fewer parts and laying off any extra workers that wouldn't be needed at the lower volume of production. Taken to this logical conclusion, she would save a ton of money by simply stopping the production of iPhones and eventually save the company by ceasing production of all products all together! (This should be troubling for anyone working at GM because the same type of idiots are running that company)
The birthrate needed to sustain a population is 2.1 children per couple. Below that rate, the US would be required to continue to allow increasing immigration in order to sustain our social network (entitlement society) and so we would have a process of a dying US population being replaced by people who are not necessarily pro-America the way we know it and they way we hoped to preserve it for our children. Anybody think he mis-speaks when Obama announces that he is a citizen of the world? A sovereign United States is the biggest obstacle to Soro's "open society" and the American ideal must be destroyed by any means possible in order for these lunatics to fulfill their dreams.......
This is a great illustration of not only the level of idiocy we have in our government but also the way the idiots on the left think about things. They never consider doing anything better, faster, cheaper, different; but instead the focus on doing with less and "shared sacrifice" (except for them and their cronies, you can't expect them to live in the puke they have in store for the rest of us).
Let's pretend that Sebelius could actually get a real job in the private sector and that somehow she became the new CEO of Apple following the death of Steve Jobs (remember, I said pretend!). Her testimony above would be the equivalent of announcing that her #1 initiative was going to be to lower the cost of iPhones and that she was going to accomplish this by simply making fewer of them (why didn't that ever occur to Jobs?).
What she would be doing is not actually lowering the cost per phone manufactured, but simply lowering the total cash outlay required to make iPhones by buying fewer parts and laying off any extra workers that wouldn't be needed at the lower volume of production. Taken to this logical conclusion, she would save a ton of money by simply stopping the production of iPhones and eventually save the company by ceasing production of all products all together! (This should be troubling for anyone working at GM because the same type of idiots are running that company)
The birthrate needed to sustain a population is 2.1 children per couple. Below that rate, the US would be required to continue to allow increasing immigration in order to sustain our social network (entitlement society) and so we would have a process of a dying US population being replaced by people who are not necessarily pro-America the way we know it and they way we hoped to preserve it for our children. Anybody think he mis-speaks when Obama announces that he is a citizen of the world? A sovereign United States is the biggest obstacle to Soro's "open society" and the American ideal must be destroyed by any means possible in order for these lunatics to fulfill their dreams.......
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