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May 5, 2015

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Letter to the editor:

An understanding of economics

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I don’t agree with Mitt Romney’s assessment that our debt and deficit problems can be solved without raising taxes. However, this Romney quote, not responded to by President Barack Obama, is part of what concerns me about the president:

“Mr. President, you’re absolutely right, which is that, with regards to 97 percent of the businesses are not — not — taxed at the 35 percent tax rate, they’re taxed at a lower rate. But those businesses that are in the last 3 percent of businesses happen to employ half — half — of all the people who work in small business. Those are the businesses that employ one-quarter of all the workers in America. And your plan is to take their tax rate from 35 percent to 40 percent.”

Higher taxes will be required going forward and President Obama is right about that, but an incomplete understanding of who employs 25 percent of all American workers and the possible effect of higher taxes on those companies is very worrisome.

Both spending cuts and tax increases will be necessary going forward, but they must be instituted carefully and with a complete understanding of our economy or we risk making matters worse instead of better.

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  1. Future,

    I have little doubt that lowering some taxes can help stimulate the economy. However, in my opinion, due to the fact that members of Congress are dependent on private money to be elected and retain office and are lobbied to death by powerful interests, cuts in spending will always be minimal.

    Tax cuts without major spending cuts will not be able to stop deficit spending and cut our debt to the degree we need.

    We are going to have to move closer to the place where taxes match spending. Until we do that, the public has 'zero' incentive to support spending cuts and if the public doesn't support them, Congress will not enact them... and you can take that to the bank.

    Romney's got part of the solution, but tax cuts alone, are not going to be enough.


  2. To those who believe Mitt Romney is an economic genius, I offer this quote from a victory speech last February after some primary wins:

    "I will cut your taxes. That starts with an across the board 20% rate cut for every American. I will repeal the Alternative Minimum Tax and abolish the Death (Inheritance) Tax."

    He repeated this in several other speeches. Some economists took Romney at his word and calculated that would amount to a $5 trillion tax cut and add that much to the Deficit over 10 years....something he denied ever advocating in the debate last Wednesday.

  3. Mr. Casler et al:

    The biggest challenge for economic theories is to work as written when they are applied. They usually don't. Why? Economics and government policies, and their interaction, are dynamic, not static. They don't operate in a vacuum. Everything is in a constant state of change. Often, important factors, not expected or anticipated, change the dynamics. Sometimes for the good. Sometimes for the bad.


  4. So, now New Mitt tells us last Wednesday night that he will reduce our tax rates by 20% across the board but remove enough deductions so that we would still pay the SAME amount of taxes but enjoy lower tax rates. So, according to Mitt, if I paid $3,000 in income taxes this year, I would still pay $3,000 on the same amount of income next year but my tax rate would be 20% lower and that will make me feel sooooo much better and we'll all live happily ever after. Really?

    But, here's the kicker. If my income increases next year, the amount of that increase will tax at a lower rate. And who does that help the most? In 2010, 93 percent of the additional income created in this country went to the wealthiest 1%.

    And now you know the rest of the story!

  5. Michael:

    More power to you for your constant enedeavor to find the middle ground, and find some fiscal balance in the overall equation.

    Altenatively, I would prefer to focus on policies designed to stimulate the microeconomic side of the economy. What does this mean exactly? What it means is to recognize that individual businesses and firms all calculate their investment and job creatiuon plans on the notion that they will have assurance that over the long term that policies will allow them to recover the marginal cost of their new investment( capital investment,added employees) and return a profit. Let me give an example.No new refineries have been constructed in the U.S, for many years. What will it take for refiners to enter and make investments in new capacity. Policies that would create a long term increase in local crude oil input to the refineries would be what is required. For example authorizing the Canadian pipeline, and increasing oil production from federal lands would assure this long term spike in crude oil feedstock for expanded refining capacity. This would in turn generate job creation, and profits which would in turn generate more tax revenues. This is what I call the microeconomic solution to the fisal crisis.Instead of incresing taxes on everyone, we instead focus on growing revenues through giving businesses the higher volumes they require to invest, create jobs, and expand. Obama does not understand this, or he does not like what he must do to achieve it in the end.

  6. Bradley,

    I vote R for a variety of reasons and I can vote R because I realize something you don't. I know and have seen that lobbying of Congress by powerful interests, including the wealthy and businesses continues to be highly effective no matter the make up of Congress.

    Congress members depend on the money these powerful interests provide to be elected and retain office. One of the things these interests want is favorable tax treatment, which Congress always provides, no matter who is in control.

    If either party had any interest in really seeing 'fair' tax treatment for all, the very first thing they would do is institute public financing of Congressional elections and enact major lobbying reform. If that were done, Congress members would know that they could enact legislation that benefited 'all' of us, instead of just powerful interests... and the only thing these interests could do... would be to try to 'convince' members of Congress to do as they wish...instead of simply 'purchasing' their votes as they do now.

    You, like most Americans still believe that one party actually, somehow, miraculously, just shrugs off the money and influence these interests wield and does the right thing... and the other party is in full partnership with them. I was once that naive, but not anymore.

    I vote R, because their 'spoken' philosophy is closer to what I believe than that of the D's. I know only too well, however, that both are completely ensnared by and cooperative with the system in Congress where powerful interests call the shots. Every member of Congress knows that you 'play ball' if you want your job.


  7. "I would still pay $3,000 on the same amount of income next year but my tax rate would be 20% lower and that will make me feel sooooo much better and we'll all live happily ever after. Really?"

    Weber hits the nail on the head. I posted this last night, but it bears repeating.

    Mitt has promised a few things.

    1) He will cut everyone's tax rate by 20%.

    2) His plan is revenue neutral.

    3) Taxes kill jobs.

    4) His plan will create jobs.

    5) More people should pay income tax.

    If Mitt's plan is revenue neutral, the government will be taking in as much in taxes as the government takes in today. The amount of money taken out of the economy will not change.

    How does that plan create jobs?

    And, by cutting everyone's tax rate by 20%, won't that INCREASE the number of people who do not pay income taxes on the lower end, even with a reduction in deductions?

  8. Future,

    I understand and am willing to see Romney's proposal for what it is. It is incomplete in my view but I do understand and agree that if rates are lowered and deductions and loopholes eliminated, smaller businesses should benefit more and larger businesses should benefit less. That's part of why I support Romney. However, you'll not get that agreement from Bradley.


  9. RefNv 3:19: Yes to many but concisely "we need" to put people back to work. Invest / any and all government programs must focus on those with proven work records. Those who can must get back into the employed category--to reduce the drains on expenditures and to prop up the economy. We need to rethink ALL social welfare programs that do not limit benefits to citizens and to those with a TEMPORARY problem. SS now covers those born with disabilities even if they never paid in. SS covers those who need kidneys..... We don't need TANF and such except for TEMPORARY EMERGENCIES.

  10. Diversification? I tested out of a college major in Economics. I have other degrees so don't go off the deep end about class-room education. Anyhow, some of my money is in funds managed by professionals. Even these monies shrank dramatically with the 2006-7 financial fiasco. You think real estate is a safe investment now? Maybe less risky than it was. But what you gonna do when the Fed backs out and inflation reflects the shrunken value of the dollar? So emerging markets look good...

  11. Let's what if this: What if it is Americans, like Greeks, rioting in the street because AUSTERITY IS NECESSARY? We gonna keep talking about spending cuts or are we going to chop chop chop? Taxes are immaterial in that sooner or later we run out of other people's money to spend and WE'VE RUN OUT. Reducing taxes will tap the economy into the right direction but Politicians are soooooo slow. Even Nevada keeps taking and adding to tax levels and spending incessantly despite the last 6 years. Tune in, Governor, Congress, public.

  12. Don't forget another of Romney tax gems, the Territorial Tax System, which will further corporations stashing the cash in tax havens.

    A good explanation and warning is provided by Clyde Prestowitz. He formerly served as counselor to the Secretary of Commerce in the Reagan Administration.

    More lost revenue that may put more pressure on small business for needed taxes. It is just like the food chain that effects workers. Small business is joining the food chain.

  13. Bradley,

    I don't intend to call you names or make you mad. I know you think my views are naive and I think yours are. The future will prove one of us mostly wrong and one of us mostly right.

    I never really work to change the vote of another. We all have to pick and I am fine with you voting for Obama. Obviously, you trust him and like his policies. I try to explain how I see things and why.

    My business is struggling precisely because too few people are employed and those that are employed make too little money. The President has been working this problem for 4 years. He did what had to be done to keep us from falling off a fiscal cliff and deserves credit for that. After that, in my opinion, he's made a series of poor decisions, which have impacted me and my business negatively.

    I'll say to you what I said to letter writer Nancy Augustin: An obvious boost for employment would be to start an 'all in' energy development initiative, with appropriate environmental safeguards and invest in green energy 'research'. Instead this President has roadblocked, energy development (not all but a good deal of it) and invested too much in 'retail' green energy that cannot compete in the marketplace. That's the wrong policy in my view and it's one this President will follow for the next four years. I'm sorry, but my business and I don't like that policy and cannot afford it. There are many other policies I could name but this one is enough to keep me from supporting President Obama.

    Most of what the people who hate Obama think about him and accuse him of is nonsense in my view. The same holds true of the views of people like you who hate Romney and the R's.

    I don't hate Obama and think he is evil. I just disagree with him. Can you say the same of your views of Romney?


  14. Bob,

    You make the argument very well, as usual. Although I hate to say it, there are fewer Americans every day that are able to understand that argument and even more that allow themselves to be convinced that your whole explanation is just another lie to enable an evil cabal to rape and pillage the rest of us.

    I get very discouraged every day because I read the comments by most of the writers to the Sun. I know it is a small sample but when I see how close this race is, my depression returns.


  15. Future seems to know very little about Romney's actual plan. That's not surprising... many low-information voters who rely on TV advertisements for their political information are misinformed.

    Future states: "Big business we[sic] be the ones that pay in to make it revenue neutral."

    Romney's plan identifies reducing deductions for individual income taxes, not corporate income taxes. In fact, as part of his "Day One" plan, he submits a bill to Congress to reduce the corporate income tax rate to 25%. He does not call for any bills to reduce deductions for corporations that I have found.

    Secondly, by reducing the deductions for individuals, he will - in effect - be keeping the Obama tax rate on small businesses who file taxes as individuals, a group which Romney says accounts for the largest portion of employment for small businesses. If his plan is revenue neutral and small businesses pay the same "job killing" rate as they are now, how does that create jobs?

  16. Well since my name has been brought into the fray I guess I should respond:

    Most of you know that I lived in Europe from 2000 until 2007. In Jan. '07 my wife and I had decided to end our marriage, sell our "stuff" and move back home. We put out house on the market for 475k Euros. We owed 375k Euros. The realtor said the 475k price was right in line with other sales. I was not aware of the housing boom that had occurred while I was away. There was no such boom in Holland. In addition, I had about 60k Euros in a mutual fund account with the same bank that held my mortgage and another 45k Euros in mutual funds with a brokerage in the UK.

    There was plenty of shoppers for our house in the first few months. We had a few offers but our realtor said they were to low. I returned here in Sept. '07 to set up my life and bought a house with my oldest son. My wife had the job of packing up our belongings, selling our car and moving to Washington state with her sister.

    I realize that I needed some income to continue my mortgage payment in the Netherlands so I contacted the UK brokerage to redeem my money. They suggested that I leave the money because the value had plummeted but I had no choice. I was left with 14k Euros that was transferred to my Dutch bank. That was sufficient to make my mortgage payment for 7 months. We all know what happened then.

    Of course my house did not sell. I continued to make the mortgage payments but ran out of money. The bank short sold the house for 320k Euros. A great deal to whomever bought it. They also confiscated (legally) the mutual funds I had with their bank to make up a portion of the difference.

    As a final insult, my company had taken out an insurance policy for me when I stopped working. When we decided to move back to the states they payed up all of the premiums so I could have a small income. They had always been very good to me. My mortgage bank took me to court (in absentia) and took that monthly stipend as well. I really could use it now.

    So, my mutual funds were in medium to low risk because I was not greedy I thought I was doing well. I had plenty of equity in my home so I thought I was doing well. Instead I am not.

    And interesting final thought. Had my wife decided 6 to 8 months earlier that she wanted to dump me I probably would not be writing this. I light of all of this I am not angry. Things are what they are. I will shout from the rooftops, thought, that I was very angry when they bailed out the banks. The banks that showed no fiduciary responsibility. The banks that did not excercise due dilligence.

    But it is what it is. there is more good news. My son was fired from his job in June. It is his fault but he cannot draw unemployment because of it.

    Mr. Chapline I know that you were showing empathy and I appreciate that. I just thought it was important for people to know what actually happened.

  17. John,

    That is quite a sad set of circumstances. I really feel bad that you have suffered all of that.

    Thank you for sharing your story. It is important to have examples of reality and the personal effects.

    While this occurred in the Europe, it has been repeated here as well.

    We know the global causes, and that is why many people are working for changes to our system that will protect people from these happenings and give them hope for the future.

    I respect you for your honesty and willingness to share your experience and opinions.

  18. If people are even remotely serious about balancing the budget and paying down the debt we need to bring tax rates at least back to where they were. We need a national sales tax to raise much more revenue than the tax increases would bring in. As I've stated many times you have 10,000 people a day retiring. You have millions signing up for Medicaid because they can't afford medical bills. The unfunded liabilities in Medicaid and Medicare alone are in the tens of trillions of dollars.

    Either the rest of the world is going to pull itself out of the recession that it is sliding into and the world economy will recover. Or the rest of the world will drag the United States back into recession. If this happens shortfalls will get worse and deficits will balloon even further.

    A strong economic recovery would make things a little bit better but we are in a protracted period of below trend growth and above trend unemployment. The great recession has caused so much carnage that it will take people decades to get back what they have lost. We have a consumption driven economy. People going to the shopping mall and spending money are what drives the US economy. With nearly half the country broke we will be lucky to see above trend economic growth in our lifetimes. By that I mean the people who were 60 and over.

  19. Future still isn't even in the ballpark.

    Not only did I read Romney's plan, I even cited the name. Go back and read Romney's "Day One" plan, Future. On day one of his administration, he pledges to demand a bill from Congress that will reduce the corporate income tax rate from 35% to 25%. He does not call for any reduction in deductions for the corporate income tax rate.

    Future claims that Romney thinks the oil subsidies and private plane deduction are "on the table," yet Romney's plan doesn't call for either to be eliminated, that I can find. Furthermore, these two subsidies cannot begin to cover the loss in tax revenue from a drop in the corporate tax rate by 33%. Again, the math doesn't add up.

    Future, please quote or link to Romney's written plan to reduce deductions for corporations.

    Future also fails to explain Romney's tax plan as it relates to small businesses filing as individuals. By reducing the deductions for individuals, Romney will - in effect - be keeping the Obama tax rate on small businesses who file taxes as individuals, a group which Romney says accounts for the largest portion of employment for small businesses. If his plan is revenue neutral and small businesses pay the same "job killing" rate as they are now, how does that create jobs?

  20. An incredibly corrupt US financial system which has created one quadrillion in financial assets and derivatives blew up the world financial system in 1987, cause severe financial dislocations when the NASDAQ blew up in the 90s and brought the entire world to its knees several years ago.

    The baby boomers around the world need to die off. We need to reduce the $700 trillion worth of derivatives that are floating around. They're going up every year. United States needs an economic model that is not based on asset inflation and rampant speculation. Wall Street commission based and makes trillions selling poison all over the world. Had it not been for the derivatives based financial crisis and rampant speculation in housing the above contributor would've had no problem selling his house in the Netherlands and millions wouldn't have lost their life savings. All of these things need to be addressed before the economy benefits the masses and not just a few millionaires.
    Whether you raise or lower tax rates a few points doesn't address the core issues that the world is faced with.

  21. peacelilly feces occurs. I do not need sympathy. That is not the person that my parents raised. My sons friends have helped him set up an auto shop. He is a brilliant diagnosticion and can root out problems where others have failed. He does everything from minor repairs to custom auto work. He is excellent and cheap.

    Mr. Hageman you mentioned unfunded liabilities and I could not agree more. One of the bothersome points is the dramatic increase in disability recipients. I read some time ago that the number of people receiving disability has increased some 40% over the past 4 years. I jokingly tell my boys "Where is OSHA and the EPA on this? Why are they not finding what is disabling our workforce in record numbers?"

  22. Michael, you are right it will take both tax increases and expenditure cuts to get the budget back into balance. It will also take a lot of careful choosing of where, when, and how much to do both taxing and spending to help get the economy growing.

    In January, Price Waterhouse Coopers put out "Decision Points for Tax Policy, 2012 Legislative Outlook" which is worth reading carefully. It is a good starting point for thinking about the challenges we face. It has detailed Appendices, including detailed lists of Tax Expenditures for corporations and individuals, with dollar values. We ought to be talking about this in detail because it seems clear from the PWC data that: (1) it is not mathematically possible to match a substantial cut in tax rates with "closing loopholes" without major negative impacts on key sectors of our Economy, and (2) each "loophole" is someone's essential, which supports jobs and promotes economic activity, so we need to decide whether the benefits of closing that particular "loophole" outweigh its' costs. There is no way to broad-brush this without doing potentially catastrophic damage. If we make the wrong choices, we could easily turn from slow growth into raging Great Depression.

  23. When you have difficult times enrollment in these types of programs always goes up because people have a hard time finding decent paying jobs. After the Civil War massive numbers of veterans, widows and orphans signed up for various programs that were put into place. The country paid out huge amounts of money over the next 70 years to pay for the mess that was made. This is nothing new.
    Eventually things get back to normal. Welfare pays out a few hundred dollars a month. SSDI probably pays people about $900 a month plus and Medicare card after 18 months. The average foodstamp payout is about $136 a month. People can't live on this crap. It's just a Band-Aid until things pick up. No one can afford medical care so fighting it out in court to get a Medicare card is worth it especially if you're over 50.

  24. Everyone talks about cutting spending but no one can agree on what to cut. One man's waist is another man's lifeline. The entire defense industry is tax based. In places like Nevada the defense industry provides a huge boost to the state. The bloated medical industry employs millions. Soon half the medical bills will be paid by the government. Millions watch PBS but how many actually send money. Not that many. There is a huge freeloader issue in many segments of the economy including medical. If Romney does manage to cut a few things you're not even going to feel it. The government needs an additional trillion dollars a year just to break even.

    Show me anyone in the political arena that's laid out $1 trillion in cuts. Any serious discussion of major cuts has to include massive cuts to medical and defense. Goodbye hospitals and goodbye Nevada.

  25. Leric,

    I agree that it is highly unlikely that Romney can cut taxes, close loopholes and increase military spending while balancing the budget and reducing our debt. Tax increases, at some point, will be necessary and they will need to be on everybody.

    Romney has changed what he has said in the past and there is no denying that. However, those that constantly point that out and use it as a reason not to trust the guy and not vote for him need to either apply those standards to President Obama or cut the guy some slack.

    Candidates and those in office very often change what they say and also don't do what they promised. President Obama has a record now and many of us don't think it is a great one. He made many promises in his campaign. He kept some of them and did not keep others. I don't disqualify him for that. I just look at what he has done and decide if I agree with it or not. I don't so he doesn't get my vote. Do I think Romney can do what he says? No, I don't, but I think his plan is better than Obama's, so he gets my vote.


  26. John Thompson,

    I see many people in my office everyday filing Chapter 7 bankruptcies. Some wounds they have suffered are self inflicted but many others are just due to circumstance, the bad acts of others or foolish government actions. That's the tragedy of all this... peoples financial lives are being completely re-written... and it isn't going to stop no matter who wins the election.


  27. after the financial crisis of 1929 it took until 1954 for asset prices to completely recover. These things take longer than people would like to admit or except.

  28. Mr. Hageman I think you know that I respect and value your opinion. I understand why the SSDI roles have increased. I understand very well. My point is that our government is not being a good steward of our money. Your family is from Germany. I have lived in the Netherlands. Both can be said to be successes from a socialistic standpoint. They have great standards of living, they have great social safety nets but they also have a tremendously high tax rate to accommodate this. At least in Holland I can speak for two very important items that keep this going. 1) Oversight (almost sever) of the social safety net systems. It is very difficult to get money from the government for nothing in return. 2) Strict immigration control. They realize that to perpetuate they good thing they have they must control who they allow into the country. This protects their jobs and their financial help for its citizens.

    Our government has been shown time after time that they are not very good at oversight. Even Warren Buffet, when asked why he did not pay more than his tax liability, stated that he and not the government could better decide what to do with that money. I don't have to say anything about immigration.

  29. Romney's making a lot of claims so he can get the votes he needs to move into the big house. His healthcare plan in Massachusetts is very similar to the national plan and Massachusetts is also one of the highest tax states in the country. I believe they rank number 7. Romney knows he's going to need money to pay the bills. He just won't admit it because it will cost him votes.

  30. It was stated here that many watch PBS but do not contribute and I will agree with that. I listen to NPR exclusively in my car when I am not listening to CD's. Our NPR station now comes with a talk only format or a classical format. I listen to both. I do contribute. Not much but I do. I am sure that there are many here that never listen to NPR yet their tax dollars are contributing and I do not think that is fair.

  31. People talk about government inefficiency but fail to mention that millions in the private sector go bankrupt. Corruption is rampant in the financial services business, the healthcare industry, plus many others. Vast numbers of businesses go broke every year, both big and small. Our prison parole and probation systems are jampacked with millions.

    The economy as a whole isn't efficient. You have vast numbers of losers and a handful of winners. It's been widely reported that the Bush tax cuts resulted in over $600 billion in savings to taxpayers. It's also been reported that the vast majority of the money went to fewer than 120,000 people. How many people have THEY employed over the last several years. I haven't seen a report that shows they employed anyone. Giving $600 billion to 120,000 people when vast numbers of people in this country have nothing is hardly the way to sustained economic growth.
    I agree with you on some things but completely disagree on immigration. The reason we have had the strongest GDP growth in in the post-World War II era is the fact that the population in this country has doubled. You need more people if you're going to increase the output of the nation. Check the populations of Germany, the Netherlands, Italy and other European countries. They are roughly the same as they were during the World War II era. That's why their growth has been a fraction of what our growth has been. People create their own jobs. The more people, the more jobs, the more economic growth. We need millions of more people under the age of 35 to get things rolling again. The country can't grow with a bunch of old geezers like us sitting around our computers all day long. Plus we need a lot more people paying taxes to close the deficits and to firm up programs like Medicare and Social Security.

  32. Mr. Chapline I believe yesterday you said that you had spent some time investigating Romney's campaign personnel and decided that you would not vote for him because of this. First I must congratulate you on at least taking the time to attempt to make an informed decision. I truly admire that. After this investigation you stated that you thought it would be another Bush repeat. I would point out that Bush was a business incompetent. Every attempt he made at running a company ended in abject failure.

    Romney has been demonized for his work at Bain Capital. There are some things that should be highlighted about Bain Capital.

    1. 80% of the companies that Bain has invested in are still operating, still profitable and still employing people.

    2. Bain refused to invest in companies that sold alcohol, firearms or tobacco products. I am sure his Mormonism has something to do with that.

    3.Government worker retirement and pension funds have invested around $1.5 billion in Bain.

    4.University and left-leaning foundations have invested in Bain. Including the Oprah Winfrey foundation, the Charles Stewart Mott foundation, the Doris Duke Foundation, etc.

    5.Private equity capital funds like Bain remain the best-performing investment of the largest state employee fund in the country.

    At least with Romney you are getting someone who understands business and finance. I believe this is what our country needs at this moment. I agree that we do not need another Bush however. Nor do we need Obama for another four years.

  33. By the way FefNV I did not post that to embarrass Mr. Chapline. Not at all. Perhaps I could have done things differently. If I had perhaps I would still be married, perhaps I would not be broke. Perhaps...

  34. Michael, the problem with Mr. Romney's complaint about the impact of an expiration of the Bush Tax Cuts on employment by small business is that IT DOES NOT MATCH THE DATA.

    In the real U.S., about 1/2 of all employees are employed by firms with 500 or more workers on payroll. Of the remaining half, a little less than 1/3rd are employed in firms of 100 to 499 workers, about 1/3rd are employed in firms of 20 to 99 workers, about 15% are employed in firms with 10 to 19 workers, and the remaining in firms with 1-9 workers on payroll.

    I suggest that Mr. Romney's use of the term "small business" is flexible enough to encompass businesses that are quite large but are "pass through" entities for tax purposes (LLCs, SubChapter S corporations, or partnerships).

  35. Casler,

    If you want "An understanding of economics," give me a call. Until then, keep doing whatever it is your doing.


  36. OHHHHHH, I HATE're, not total apology...

  37. John Thompson,

    Please go easy on yourself, as you, unlike most, can look at yourself in the mirror.

    Warm regards

  38. Purgatory apparently went to heaven this afternoon.

  39. MKC: Princeton professor says Romney's math works. Said others are misquoting him.

  40. jrtsr 9 am: I appreciate your candor. Your info may help many who have faced an abyss or those who will soon face an abyss. I think I've recovered from being defrauded out of six figures, physical age-related limitations, unemployment for 6 years while not yet 60. For now I have the financial means to live on current income although not in the style I had expected. And then there is my pesky work ethic that says if I can still move some, I should be employed at something productive. My greatest economics-related concern for this nation and our children is the devaluing dollar and how we continue to do things that will further devalue it.

  41. I thought I heard Mitt talk about closing "loopholes" in the tax system as well as changing the reparations taxes so companies can bring money they make in other parts of the world into the US. Right now they can not without tax consequence. They make a big profit in Japan but to bring that money to the US costs them taxes. So many companies leave their profits made outside the USA outside the USA and will invest them outside the USA. This can't seem fair even to the liberal folks here..Actually many companies are waiting for some sort of tax amnesty to bring their money in, kind of like the Illegal aliens are waiting for their amnesty programs, yet it appears Obama is more willing to give slots at american schools to illegal children than help companies bring in the cash they made overseas for investment here..

  42. Purgatory,

    When someone addresses me as 'Casler' it usually means they disagree with or misunderstood what I said or wrote. So, I am all 'eyes'. Please explain your view of the economy. I'm always keen to get new information.


  43. Ms. Anderson when all one has left is candor flaunt it right? LOL.

  44. FYI: Today's Economic News:

    Harvey Rosen, the Princeton economist who President Obama and his campaign has used as the source for the $5 Trillion cost figure of Romney's tax plan came out today and pushed back. Rosen unequivocally states that the Romney Tax Plan can/may be revenue neutral.


  45. Ms. Anderson: My apologies. I didn't realize you posted already. Nice work. Kudos to you for being first.


    The above is in response to the 11:19 post by Mr. Freeman. I said that the bulk of the Bush tax cuts went to 120,000 people. Yeah, the poor and working class got a few bucks.

  47. Mr. Michael Casler,

    I will offer you the following to assist you in your understanding.

    The Federal Government spent $3.7 trillion in 2010 (the last year of cooked books, I mean record). If one were to confiscate every penny of income above $500,000 (i.e., a marginal tax rate of 100%), one would generate $293 billion dollars, or enough to fund the government for about one month.

    Please tell us what plan you would use for the second month.


  48. Fellow Commenters,

    There is a major error in my calculation. I shall blame it on a long weekend. Mr. Casler, please disregard.


  49. Hope you had fun!!!

  50. Kepi,

    Thanks for the comment on my supposed debating skills. You probably give me credit that is not earned. I do start in the middle and I am socially moderate but economically conservative, so you have me pegged pretty well.

    I don't berate people who will vote for President Obama. I just disagree with many of his policies. At least in this forum, people seem to want to say why they'd not vote for someone rather than why they will vote for someone. Perhaps that speaks to the dissatisfaction most of us feel and the quality of the two guys running for office.

    I find it very surprising that so many people make such a deal out of Romney's changes in position. Personally, I don't know anyone who is known as a politician where I could have any faith in what comes out of their mouth. It's the nature of the political beast to say what is necessary to make your audience happy. I think it takes backward logic to skewer Romney but not Obama. It goes like this.... one decides he doesn't like Romney or his positions or both and then uses his changes in position to disqualify Romney. The same calculus is not used on the opponent.

    That's fine if people want to do it, but it seems to me to be screwed up logic.

    Romney is inconsistent and no fair minded person can dispute that. But let's take the Libya attack as just one example. I am quite sure that the President and his administration knew in short order that the attack was a pre-planned terrorist attack. Still they appeared for days claiming it was something they knew it wasn't. Take any fancy veneer away and the President and his administration lied to the American people. Not to protect national security or any other quasi legitimate reason, but instead because the truth interfered with the narrative that Al queada is defeated and the war on terror is won.

    Personally, this isn't a big deal to me because I know politicians, elected and seeking office, lie and change their positions. I don't want to see President Obama skewered over this but I think Romney should not be skewered either.


  51. It never ceases to amaze me but voting against one's own interest does not seem to faze people that have directly suffered major, major setback at the hands of these crooks, yet they keep coming back for more.
    I read Mr Thompson's post with great interest. Although his prob took place mostly in Europe-I ask him to look around and realize the same thing happen to millions of American at the same time.
    Sir, I do not understand what it would take for you to wake up.

  52. Mr. Warrick what would you like me to "wake up" to. Please.

  53. Purgatory,

    I think you misunderstand what I believe. I've said this before but at the risk of sounding conceited, I'll note that it usually seems to fly right over everyone's head, but I'll say it again.

    Romney and Obama offer half a loaf and here is why. Somewhere along our journey, government (Congress mostly) discovered that they could spend without raising taxes and that Americans would be OK with that.

    Romney wants to rev up the economy with tax cuts; Obama with stimulus spending. If either method works and the economy picks up, Congress will not reduce spending and deficits and debt will continue. Nothing that needs to change will change until taxes (on all Americans) are brought into much closer alignment with spending. Once that happened and everyone's taxes were raised substantially , Americans would then participate in a discussion about what they really would be willing to pay for.

    Romney argues for no tax increases and Obama argues for tax increases that cannot make a difference. This is why they offer half a loaf.


  54. Gerry, thank you for the source for your 120,000 people comment. By reading the source we can see where your error was.

    You said "It's been widely reported that the Bush tax cuts resulted in over $600 billion in savings to taxpayers. It's also been reported that the vast majority of the money went to fewer than 120,000 people."

    Notice that you said "the Bush tax cuts resulted in" while your source said "the Bush tax cuts for the wealthy"

    The key difference here is the addition of "for the wealthy". Your source material defines that as "the top 2%".

    So while you stated that "the vast majority of the money went to fewer than 120,000 people" the reality is that they are saying that of the Bush Tax Cuts FOR THE TOP 2% OF EARNERS ONLY, 55% of that went to the top 0.1% or about 120,000 people.

    Your source, and Biden's quote, only involved the portion of the Bust Tax Cuts that affected the top 2% of earners, not the population of earners as a whole.

    While I don't often agree with your positions, I think this was a simple case of misunderstanding and/or misquote.

  55. I echo kepi's encouragement to everyone to research the candidates and make an INFORMED choice when voting.

    I do, however, caution that it's blatantly disingenuous to say "Take in ALL of the information and then begin your research for the truth based on the areas that are important to you. Know the facts." while providing links only to information directly produced by one of the candidate's campaigns.

    Make sure your research includes BOTH sides of the coin and take anything directly on any candidate's web site or produced by any candidate's campaign with a big grain of salt. Look for less partisan sources when possible and treat partisan sources with healthy skepticism.

  56. Carmine 3:23 and 3:26, that's OK. You added some info. Kind of supports my veracity although I tend to expect people to take me at my word despite my failure to track minutia. I naively expect people to reason....

  57. Mr. Thompson, I apologize for being sympathetic. I was out of order.

  58. peacelily I am sorry I did not mean that exactly like it came across and I thought about it after I had posted it. I do appreciate your empathy but that was not why I posted that information is what I meant.

  59. Mr. Gladu... Reading through the data more thoroughly I believe your analysis of the tax cuts is dead on. My point in bringing it up is that I haven't seen a single study that shows the tax cuts created large numbers of jobs. The argument for tax cuts is that they lead to business creation which results in increased employment.

    If anyone has a study that shows the Bush tax cuts resulted in dramatically increased employment I would love to see it.

    A wonderful evening to all!!!!

  60. Comment removed by moderator. - -

  61. John, thank you. I understood your intentions. I just felt very sad for your experience, not that you were trying to get sympathy.

  62. John sorry to come on so strong-I really felt bad that you had such a bad experience losing everything you had to greedy system/folks. But my understanding was that you still felt empathy for Romney and people of his ilk that had done the same to many Americans. He has no core values.

  63. "I tend to expect people to take me at my word "

    I always believe your posts Ms. Anderson. I wish I could say the same for some others here. But sadly I can't.


  64. "He [Romney] has no core values."

    Really? Husband, father, grandfather. Married for over 40 years to the same person. Great provider. Life long Christain. Rose to high spiritual and leadership roles in his Church: Bishop and stake president. Former employees, friends, and acquaintences who he assisted over the years speak glowingly of him and his character. Are these core values by your defintion? Or do you have a definition different from Webster and us?


  65. Sandoval,

    The answer is about $1.2 trillion...please change my comment of "what plan you would use for the second month" to what plan would you use for the sixth month?

    Now, Sandoval, please use your brilliance, as you are on the clock.


    p.s. when a libertarian makes a mistake, he or she acknowledges it and takes ownership - some even apologize...when a liberal makes a mistake, he or she blames someone else, and then reaches back into someone else's wallet...

  66. Mr. Casler,

    Respectfully, can we stipulate that Benjamin Franklin was correct when he said "When the people find that they can vote themselves money, that will herald the end of the republic." ?? Please.

    OK, Casler?

    Now, can you please move past your compromising "both sides are the problem" mantra and propose a course of action. We get it! We have lived it! We KNOW it!! We ARE living it!!


  67. Carmine: 4:25 a.m. Formality not necessary. Roslenda or even RA will do. Now I'm formulating verbiage regarding some posters' fascination with studies, asking for studies to support claims. How many jobs were created is impossible to decipher particularly when each faction will claim infinite success due to what would have or could have happened without stimulus.... Let it be understood that our economy is hampered and precluded from functioning, let alone functioning as a free market. We need to PROMPTLY remove many things that are hampering.

    I saw Steve Wynn insisting that 12 million illegals will not be sent packing. But we must. Obama has sent about a million in 3 years or so. If we prioritize the young-adult men, hopefully their families will follow them south. When we take the economic benefits away from illegals and return same to Americans, more illegals will leave on their own steam. First priority, BEFORE DISCUSSION of letting anyone stay, is to SECURE THE BORDER. Last time we let them stay, millions more kept and keep coming. We cannot do that again. Further, we must expel a vast portion of those here, even those here for years and years. For any one we "let stay" we must pick up the costs of their social welfare, health care, retirement, cost of crimes for cash when they face hardship.... NV has 12%, and climbing, of our employees who are illegal invaders. 40% of K-12 is Hispanic but only 11% or so of the electorate. Go figure. Half (20% of students) of the 40% Hispanic K-12 or more are therefore illegals. We are paying $150,000 plus PER STUDENT for k-12. When will our economy recover enough to do something good for our kids?

  68. Tune in to the Haiti / Dominican illegal situation. Despite GENERATIONS in the Dominican Republic, illegals and their DESCENDANTS are NOT citizens and cannot legally work there, cannot receive benefits.

  69. carmine:ref core values.

    I am talking about the ever flip flopping of Mr Romney. Today he says this and a few hours later you will get a completely different story. Then the next day or two you get the original story and then a few days later a complete denial of having said anything. To most pepole this would clearly identify as an individual that really believes in nothing. His sole mission is to get elected, thus different stories for different audiences.

  70. I didn't realize that an evolving position is a lack of core values. Senator Obama for gay marriage. Candidate for president Obama against gay marriage. President Obama for gay marriage. Lack of core values. Got you!


  71. RefNV: We are looking at the same data. The differences seem to be you are pointing out that a relatively few firms employ half of all workers. I am pointing out that the problem is defining what is "small" business for the purpose of trying to evaluate Mr. Romney's claim about the impact of expiration of the Bush tax cuts on jobs.

    If we assume that each job is minimum wage, (about 15,000/yr at the federal minimum) and tack on payroll taxes and assume some overhead that must be absorbed by the business, the extra employee cost would be about $20,000 for quick and dirty calculation. Since the individual tax rate on the top bracket will increase 4.6% on January 1st, 2013, what is the taxable income which would equal 1 job? The formula for calculating that is $20,000 = .046 x. That yields an taxable income of $434,782.60. Remember that that is Taxable Income which is after all income exclusions, deductions, and allowances, so the actual adjusted gross income equivalent to one job would be very much larger, and gross income would be larger still. Using historical IRS data, we would expect about $105,000 in personal exemptions and deductions at that income group, putting Adjusted Gross Income about $540K. Gross Income would depend on the profitability of the business. S&P500 companies average about 7% net profit before taxes, but they are definitely too large to be considered "small business". NASDAQ listed companies average 3.1% net profit, and, would also seem to be too large to be considered "small business." At 3% net profit on sales, the gross income for a taxable income of $540K would be $18 Million. It would seem to take about that size -- or larger -- of a company to have a choice not to hire a worker to pay the pre-Bush tax rate.

  72. Headlines today:

    "Wall St. profits soar, but jobs, N.Y. taxes drop"

    ALBANY, New York (AP) -- Although profits continue to grow on Wall Street, jobs are declining along with tax revenue that's vital to the state and New York City, according to an annual earnings and employment report released Tuesday by New York state Comptroller Thomas DiNapoli.

    Profits do not create jobs if jobs are not required to make or increase profits.

  73. And these days, it takes fewer workers to do the same amount of business as before. Non-farm productivity averaged about 4% increase year to year, from 1990 to 2007 (and then we had the Great Recession). For the most part, if we can't increase Demand, we won't increase employment.

  74. "Profits do not create jobs if jobs are not required to make or increase profits."

    I have one word for you: Uncertainty. When the future is uncertain, consumers and businesses sit on the sidelines, hoard cash and spectate. They don't participate. They wait and see.

    We don't have a liquidity problem in the USA we have a confidence problem.


  75. Ah but profits DO create jobs. When an employer / investor profits, s/he does it again and again. Jobs are required to make profits, up to a point. Sure, no one need hire additional employees beyond the point of diminishing returns--that would be counter productive and could be considered welfare.

  76. "Carmine....

    A good number of people out there DON"T consider the Mormons to be Christians. They feel that the Mormon religion is nothing more than a cult!"

    Define good number, please.


  77. FYI: LDS/Mormonism is fastest growing religion in half the states in the USA according to a 2012 Study: