AND THE BEST ANSWER IS …

 

But before I get to that I want to say a few words about the killing of the US Ambassador in Libya and the storming of their Embassy in Egypt.

You will know that I never bought into Barack Obama’s Arab Spring crap – labelling it instead – the Arab Winter and this week’s terrorist activity by the Islamists confirms that.  I am saddened by it but to expect anything else was mere wishful thinking.

That said, I hope to do one or two blogs revisiting this, beginning with how we have ended up where we are now.  So…stay tuned.

Now for the Answer to yesterday’s Multiple Choice Question:

To spare you the suspense, the answer of course is e) slash government spending and dramatically increase income taxes.

If you gave this as your answer – give yourself 100%.

So why is this the preferred answer?

Because the USA is in such a bad financial state, slash and burn is simply not enough.  Taxes will need to be raised as well. One reader wrote in to say, “with less than 1% of all Americans paying 60% of all income taxes they should not be expected to pay even more” and I fully agree with that.  The other 99+ % must start contributing – as much as they possibly can – for two reasons; first the money is desperately needed to pay down the debt and second, more citizens need to have ‘their skin in the game’ so to speak since it is so easy to demand the spending of other people’s money.

So let’s now look at the other possible choices:

If you chose a) do nothing be happy - you of course failed miserably, but you are entitled from here-on-in to call yourself an Honourary Member of the Democratic Party.  For what that is worth.

If you chose b) spend more in a bid to enrich the have-nots - you get the worst mark possible – an F minus – but you are now entitled to call yourself an Honourary ‘Barack Obama’.  As consolation for this, your new name sake has a good chance of being re-elected.

If you chose c) try to reduce government spending – you get a C and the right to call yourself an Honourary Republican.

If you chose d) slash government spending – you get a B and the right to call yourself an Honourary Tea Partyer.

And finally, if you picked e) slash plus tax  - as noted above, you receive full marks – 100% plus the right to call yourself a realist as well as a realconservative.

In regard to the comments section some very good ones were made and there are extra points for the following:

• “Galagher you did not mention the farm income numbers in your employment”. numbers. Comment:  You are correct – there are 30 million listed as working in the Farm Sector but good stats on income / taxes were difficult for me to find but this does mitigate a little the stark numbers I provided to you in yesterday’s Blog.  If you identified this as being missing – add 20 points to your total.
• “You did not mention Corporate Taxes in your list of Stats”.  Comment: You too are correct and again this omission does mitigate things a little bit further.  Add 15 points to your total.
• “The USA needs to impose a Value Added Tax and it needs to be substantial (i.e. similar to Canada’s HST)  Comment:  You are bang on and when I say more income tax is needed – HST could be imposed instead.  This would get all Americans paying some tax – the income is needed to help pay down the debt and this would insure all have some ‘skin in the game’.  Give yourself an additional 25 points.

As I see it ..

‘K. D. Galagher’

 

THERE WILL BE A TEST ...

 

At the end of this Blog…

Well at least there will be a Multiple Choice Question.

But first, to assist you in your upcoming deliberation, some more interesting statistics:

• America’s Population is 330 million;
• America’s Debt now equals the total sum of all of its Annual Domestic Production (GDP) some $16 Trillion Dollars, while its annual deficit runs over $1 Trillion (move over Greece);
• Over 100 million Americans are in receipt of Government Assistance, that’s about 1 in 3;
• Over 50 million receive food stamps. that’s 1 in 6;
• Over 30 million receive welfare, that’s close to 10% of all Americans;
• 155 million American workers make-up its civilian workforce i.e. private and public workers, that’s about 50% of America’s total population;
• Of that number, 43 million work only part-time, that’s totals about 30% of all workers;
•  
• That leaves a full time civilian workforce of 112m or about 70% of all workers;
•  
• 19 million full timers work work for government, about 17%;
• That leaves 93 million full time workers in the private sector, less than 1 in 3 Americans;
• Of that number, 46 million (49%) of the private sector pay no federal income taxes;
• That leaves 48 million (51%) of the private sector paying federal income tax - (so every 1 taxpayer is supporting 6 fellow Americans);
• Of this number, the top 1% (480,000) pay nearly two fifths of all income taxes, while the top 5% (2.4 million) pay three fifths.  That leaves 95% (45.6 million) paying the remaining two fifths).
• Another way of saying this is that less than 1% of Taxpayers (2.4 million) out of 330 million Americans, pay nearly 60% of all income taxes collected.

  Now For Your Multiple Test Question:

After carefully considering the above-noted statistics, should you be Elected President this coming November 6, 2012, what would you be inclined to do during your 4 year term?

a)  Do nothing…be happy;  or,

b)  Spend more in a bid to enrich the have-nots at the expense of the rich;  or,

c)  Try to reduce government spending in a bid to balance the budget;  or,

d)  Slash government spending in order to balance government budgets;  or,

e)  Slash government spending and dramatically increase income taxes to ensure balanced government budgets.

For Your Comment:  this space is to allow each of you to write 2 – 3 sentences on any comments you may have in regard to the above assumptions. Remember to keep your comments clean.

----------------------------------------------------

----------------------------------------------------

-----------------------------------------------------

Your mark will be available in tomorrow’s Blog.

As I see it …

‘K.D. Galagher’

Mea Culpa…

 

I goofed in my Blog earlier today when I stated that 100 million Americans are on Food Stamps – or 1 out of every 3 Americans.

The figure is actually 50 million or 1 out of 5.  Still pathetic, but only half as bad as my initial number suggested.

I found this out this evening when watching Sun News at 6 p.m. – by happenstance, they had an article on the 8.1% interest rate and said much of what I had pointed out in my earlier Blog.  Great Minds Think Alike?

Who knows, but they another figure for me as well – the official Participation Rate – aka – the Employment Rate.  The Sun News’ number was 63% which is even lower than the number I worked out in my Blog.  This 63% they said, is “the lowest participation rate” in decades. 

Moreover, Sun pointed out that the number currently working is the same as it was in year 2000 – despite today’s larger population some 12 years later.

So on balance, everything is as serious as I intimated in my morning’s Blog.

Sorry about that % error though and just so you know, I plan to follow-up with some related Blogs, which I think will continue to shock.

As I see it…

‘K.D. Galagher’

 

8.1% Isn’t What It Seems To Be…

 

As In America’s Official Unemployment Rate.

This past Friday, the US announced its official Unemployment Rate to be 8.1%, down .02% from 8.3%. On its face, the rate is not all that bad since Canada’s is only slightly better at 7.3% and we are seen as having the best economy amongst all of the G-8 Nations.

But I have to tell you, both numbers are wrong since they grossly understate the true number of unemployed. If you do not believe that, I have the proverbial Florida Swamp to sell you; but I must warn you, swamp land there is quickly being bought up by those who still take comfort in the Official Consumer Price Indices.  But that is a story for another time.

But today, I would like to focus on the US number since it is engaged in a critical Election with the main issue being its perceived high unemployment rate – or at least, this should be their Main Election Issue.

America has 240 million Persons of Working Age and of that number some 100 million are not working.  Indeed, many of whom have no interest whatsoever in the concept of work.

So in reality, their Unemployment Rate stands at some 41.7% (100 divided by 240 x 100).  The 8.1 number is correct only as it pertains to those few who are actively looking for work (i.e. want work).

“Okay Galagher, we get your drift but what about those millions of disabled who are in the workers’ age category but for reasons of mental and physical disability, cannot work.  It is not fair to cast them as being employable. And what about Homemakers – they perform a most valuable role, they should be excluded from those deemed unemployed”.

You are absolutely correct, so I looked up the number of disabled Americans and it totals 10% of those of working age or 24 million persons.  Moreover, Stats show that 90 million Americans, of working age, can be classified as ‘homemakers’.  Of that number 71% are working, leaving 29% in the “homemaker” category – or some 26.1 million people.

So let’s add the two groups up:  24 million disabled + 26.1 million homemakers = 50.1 million whom, although of working age, are not part of the outside workforce for hopefully legitimate reasons.  (I must confess to you that I harbour some suspicion in regard to this high number but for the purposes of this Blog, let’s say it is accurate).  

That still leaves nearly half – some 49.9 million people of working age but not working.  So by deleting the 50.1 million homemakers and disabled from the 240 million of working age, the available workforce is reduced down to 189.9 million.

So let’s do the math one more time.

49.9 million non working Americans represents an Unemployment Rate of 26.30%. Or a better way of saying it, the USA has an Employment Rate of  73.70% (i.e. 140.1 Americans are currently working out of an available working age population of 189.9 million). There a term for this – the participation rate.

I personally would like to see the employment / participation rate used rather than the unemployment rate if for no other reason than it is fully understandable – everyone knows what is included in the number – that is to say – that at the point of time the survey was conducted x% of working age folks were in fact working.  With the unemployment rate one is never sure if it includes those actively looking for work, those who have given up looking because there are no jobs or those who look at ‘work’ as an activity beneath them.

There is another important benefit I believe would come out of employment rate, it would force governments to examine more closely why some 49.9 million folks are not participating and would cause them to explore more closely why not.  They would be prodded to do so by those 73.70% who are working and would naturally wonder ‘why should I be working to support such a high number of able bodied slackers’.

So to sum up; currently, the USA has nearly 1 out of every 4 its workers not working and with that, I will leave you with one more very interesting statistic – some 100 million Americans are in receipt of food stamps.  That means 1 in 3 Americans are on the dole or in receipt of welfare. How can a society retain its economic health in the face of these numbers with so many of its able bodied workers – not working; many intentionally.

It can’t; if you get my drift.

As I see it…

‘K.D. Galagher’