Wednesday, February 17, 2010
Distention in the Ranks?
"..Germany’s harsh experience with runaway inflation after World War I should be remembered.
"When named president of the Kansas City Fed in 1991, (Thomas) Hoenig said his 85-year old neighbor gave him a 500,000 German mark note. The neighbor told him that, in 1921, the note would have bought a house. In 1923, it wouldn’t even buy a loaf of bread. The neighbor said, “I want you to have this note as a reminder. Your duty is to protect the value of the currency."
"That note is framed and hanging in my office," Thomas Hoenig CEO the the Kansas City Federal Reserve Bank as quoted by the Wall Street Journal.
Hoenig was the lone dissenter in the Jan 26-37 FOMC report that called for maintaining the Feds policy of artificially low interest rates for an undetermined period. Hoenig and many others believe this can lead to runaway inflation, destroying our currency, and our economy.
"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson
Labels: economy, Federal Reserve, FOMC, Germany, inflation, Thomas Hoenig
Wednesday, December 23, 2009
The Reid Plan, or a Better Way?
I had barely posted my previous submission and headed out the door for my 5 mile run/walk when the thought occurred to me, “I had failed to fully analyze and develop my thoughts regarding the cost of Reid’s plan.”
So, in an effort to correct that failure, I offer this update.
In my original post I discussed the addition of $518 billion in taxes associated with the Reid bill. I my rush, I didn’t consider that that $518 billion is over 10 years, not per year as stated. With that, the cost of “insurance” averaged per family of the “uninsured” is reduced to about $5,412 per year. On its face that’s a reduction, for those “families,” in the cost of their “health care insurance” at least as it relates to the American taxpayer when compared to the “average” cost of private insurance.
Score one for Reid.
But the Reid plan is not going to cost merely the $518 billion in new taxes. Democrats talk about a $1 Trillion cost over 10 years. Reid claims to pay for about half the cost of his plan through “found savings” in Medicare and other areas of health care.
That $1 Trillion expense, amortized over the “30 million uninsured” results in a cost per family of $10,477 per year, back above the cost of private insurance by 66%. So Reid’s plan will cost far more than it would to simply have the taxpayer foot the bill for private insurance for the targeted group.
But there’s one more step. While Reid’s plan calls for taxes starting in 2010, the “benefits don’t actually begin until 3 years later in 2014. So the cost of the Reid plan is actually amortized over 7 years, not 10 years. That means the cost of insuring the “uninsured” rises to $14,952 for each of our hypothetical families in the so called “30 million uninsured.” That’s an overrun of $8,624 per year, or 136%, above the average cost of private health insurance.
(Disclaimer, I do not advocate forcing taxpayers buy insurance for 30 million people, many who don’t have insurance by choice. I merely make the statement for the sake of the argument.)
No one who has observed Washington politics for any length of time believes the costing of Congressional legislation. There has never been a bill come out of Congress that cost what the legislation originally stated and never has it cost less. But let's give them the benefit of the doubt and say their cost projections are spot on.
Here’s where it get’s interesting. If, for the sake of argument, the taxpayer footed the private insurance bill for the 30 million “uninsured” to the tune of $60.46 billion, and Reid achieved his claim of $500 billion is savings from Medicare, et al, there would be no need for heaping $518 billion in new taxes on the American people.
In addition to letting Americans keep that $518 billion in their pockets to invest and spend in this economy, with the savings realized from his plan, Reid could cut taxes by $439 billion. That would be a huge shot in the arm for the economy and would serve to fuel economic growth and investment, creating jobs and reviving growth in all areas, including the struggling housing market.
On the other hand, if Reid followed true to his nature and didn’t trust the taxpayers with their own money, he could use the surplus to pay down the national debt. Now the following assumes that Congress will grab its collective self by the “neck” and make hard decisions, do away with waste, pork, gratuitous entitlements and unconstitutional programs that are better run by local and state governments. I know, that’s a huge assumption but let’s enjoy the fantasy for a moment.
For the sake of argument, let’s say they do it. They balance the federal budget, then take the $439 billion saved after buying private insurance for the “uninsured” and begin paying down the national debt, you know, that $12 Trillion behemoth that hangs over the head of every American like a guillotine and threatens our national security.
If they could bring themselves to do it, that is, pay down debt instead of creating more, after 13 years it would be cut nearly in half. By the time my young nephews and nieces were getting close to retirement 28 years from now the national debt would be history and they could enjoy a retirement free of the worry of a government that would tax away their savings and compete for the investment and interest earnings they should be receiving on their hard earned money.
As a further benefit, my family, along with the progeny of all Americans would be able to live in a world where their country and by extension themselves, could not be held hostage by the political aspirations of a foreign nation, i.e. China, Japan, OPEC, that is bent on threatening to collapse the US economy by demanding immediate repayment of debt held, or simply refuse to buy more.
That alternative reality, paying down the national debt, the US becoming a creditor rather than a debtor nation, would allow them to enjoy a prosperous and peaceful retirement in their “golden years.”
In either case, the “savings” that Reid claims to find would filter through to the rest of the health care system, resulting in decreased costs which in turn would mean insurance companies, with decreased exposure could lower the cost of health care premiums. That in turn would decrease the cost to taxpayer for both their own insurance plans and those of the formerly “uninsured.”
Taking those newly found dollars, individual Americans would begin investing them in the economy through direct investment or through spending for goods and service. That in turn would add even more fuel to the engine of economic growth.
So I stand by my original conclusion, there is a better way to accomplish providing health care insurance for Harry Reid’s target group. Again, I don’t agree with his premise, but using his premise and tools, there is a better way that would strengthen and grow the economy. Not become an anchor around our necks and drag us into a deep, dark abyss.
"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson
Labels: economy, Harry Reid, health care, insurance, interest rates, uninsured
Saturday, October 31, 2009
Extra Ordinary Times
I came across the following written by a member of a financial forum I'm part of. The passion and sentiment of the writer are matched by the strength and accuracy of his reasoning. Ponder the following...
"We need extra ordinary men and women who are not afraid to step forward to call out the criminal justice system as it implies "Criminal Justice System, Justice for the Criminal". We need an advocate for the forgotten the Innocent it should be noted that it should be the "Innocence Justice System", as it implies "Justice for the Innocent".
Will you be the one who is not afraid of its citizens to have guns and to use them when criminals violate their family or property? Who will not hold them responsible for not protecting their neighbor when a crime is committed against their neighbor who does not feel one should own a gun. Will you be that extra ordinary individual who will call out the unelected cynical judges who have re-defined our constitution and have re-interpreted the laws to suit their own philosophies?
Will you be the monumental one who not only demands but expects the oversight of the federal reserve and demands accountability? A federal reserve that has burden the taxpayer by allowing over two trillion dollars to disappear and has no intention of telling the citizens of this great Nation who got the money or the discloser of the terms regarding our money. Will you be the one who champions changes and has a solution not rhetoric.
Extra ordinary times calls for those who have real solutions going into office not devising and trying to galvanize the solution after entering the office. We need extra ordinary men and woman who will put the UN in its place by telling them the UN will no longer be in the United States, were we are responsible for the upkeep and security at the expense of the taxpayer. We will continue to be a part of the UN but it will have to be another country that will have to be financially responsible for the world and not the piggy bank of the American taxpayer.
No more free aid in the billions of dollars that we have been sending for more than fifty years or so to governments just like our own old government who can not manage the money and just hoard up the cash for its political cash cows while its people starve and are in need of medical attention. We will however be glad just one more time to show them one more time what and how to do; then they can get it right or deal with the chaos that follows.
Yes we need someone who is not afraid to bring our jobs back home; because of NAFTA we have lost jobs in all fifty states roughly around 800,000 since inception in 1993 till around 2000. We have spent the last two decades de-industrializing our economy. Add to that our unemployment figures given at 9.8 which in reality is really 11.8. It is almost more than one can comprehend. Try a disappointing roughly three million jobs maybe more lost since 2008 due to the recession. Now we have an inefficient government trying to rush a health care plan through how come they just can't get it right. Will you be the one to speak out are you the extra ordinary individual we so desperately need?
We need the highly educated professionals the professors the Harvard graduate, but we also need the hard working everyday Americans. The one who sweats in the heat and shivers in the cold with callous hands and a weathered brow. We need the truck driver, the waitress, the carpenter, the stay at home mom, the iron worker and yes we need the plumber. The ones who discuss their disdain of an out of touch with reality government while on their working break or when talking with family and friends. You have a voice but our present government fails to acknowledge you. Will you please step forward; will you be what we know you can be that extra ordinary person who has and opinion and even has some solutions?
Will you be that extra ordinary individual that demands a responsible government to the citizens of America? Someone who is not afraid to use the word illegal and enforce all the laws pertaining to that word; illegal is just as it implies illegal whether it is a crime or immigration. We need those who understand we are living in extra ordinary and perilous times in America and will use whatever means at our disposal to secure our borders.
Are you that extra ordinary man or woman who will step forward and speak proudly of America and its contributions to the world rather than making apologies about the arrogance of America? We understand America has made mistakes but every other country has made them as well. Yes we need some extra ordinary individuals who believe in the greatness of America and its hardworking people and make no apologies Someone who has the resolve to stand up to the world and remind them once again just how much we have sacrificed on their behalf.
We need extra ordinary men and woman who can and will balance and operate on a balanced budget. Are you the one who is not afraid to demand term limits minimum of eight but no more than twelve? Hard working Americans who understand that it is a privilege to serve this great Nation and its citizens; it is not a right bestowed on them.
Once again where are the George Washington's and the Patrick Henry's who will stand up against tyranny as they did when this country fought and died for liberty.
Our leaders of today call us out on the tea parties one of the things that led us to fight for our freedom now they say we are trying to start sedition. Is that not what our founders did when they wanted freedom from the mother country yet we are somehow called unAmerican for the cause. America is tired of the insanity, of the minority (I'm talking numbers not race) shouting down the majority. Will you be the one to champion the cause and shout with the rest of us we are tired of paying for that DAMNED TEA!
Can we cross party lines and stop affiliating ourselves as republicans or democrats? We need someone who is not afraid of what politicians think about third party's; their only concern is the party and getting re-elected. Will you be that voice in the wilderness who is warning our great Nation? Let the government think what they will. Patrick Henry said it best "If it be treason then let us make the most of it". Will you step forward to lead us? Once again will you shout we are tired of paying for that DAMNED TEA! We need extra ordinary men and woman in these extra ordinary times if you do not come forward you may miss your true calling. If you will not stand tall and stand proud and lead this great Nation, then Suffer America you ain't had enough yet"
Blogged on the TSPTalk forum under the pseudonym ezmoney who lives in Greenville, NC.
"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson
Labels: economy, patriotism, political philosophy
Thursday, January 08, 2009
Ending thoughts of 2008 at our house....
It's been close to a month since my last post and much has happened, most mundane, ordinary stuff, but a few important items.
Christmas at the Post Office has changed dramatically since I started in 1988. At that time an employee's life during December was consumed by the demands of work. Seven day weeks, 12 hour days were the norm. It didn't end with Christmas. January brought sale catalogs and a boost in advertising that ran through May when volume would tail off until the back-to-school sales began, then the process started again with the first Christmas sale mailings in September.
With automation of the mail stream much of that work is now performed by machines and what took 10 employees 10 hours to do, now 1 employee can complete in two and a half. The only part of the mail stream not impacted by machines at the delivery office level is parcels.
They still must be sorted individually by hand, but this year with the weakening economy, even that is suffering reduced volume. I don't have any hard numbers to substantiate it, but past experience and just the "feel" of the mail flow tells me times have changed.
Even as little as a couple years ago in our office I worked straight through, 7 days a week, from Thanksgiving to Christmas. This year the change is so dramatic, my manager was entertaining approval of leave during that time, something never before considered during December.
Overtime was needed only in the case of personnel shortages, i.e. sick leave, out of the office for other duties, etc. There were only a few instances of OT required due to mail volume, and that only in the case of processing parcels.
To those who think of the Postal Service in terms of a stodgy old government bureaucracy, over populated with excess employees, outdated practices and costly inefficiencies, you are out of touch with today's business.
While there are certainly areas needing improvement, as in every business on the planet, cost cutting and service improvement is the name of today's game. Employment is down some 100,000 from it's peak according to 2007 figures and 2008 has seen even deeper cuts with 50 million fewer work hours used compared to 2007.
There are several early retirement offerings currently in process and depending on the results other measures are being considered to cut costs and employee levels. From what I'm hearing, everything is on the table.
Mail volume is down overall with a total of 202.7 billion pieces delivered in 2008, or an average of 675 pieces of mail for every man, woman and child in America. Still that's a decline of 9.5 billion pieces, or 4.5 percent, compared to the previous fiscal year. That is substantial and these numbers are for the FY ending September 30, before the worst of the economic decline began to settle on business and individuals.
In the midst of this the service is deploying a new Flat Sorting System that will automate even more of the mail stream, further reducing the need for clerk craft employees (that's my area) and heavily impacting delivery employees who will receive a substantial amount of their mail ready to go to the street.
While I'm trying to secure a transfer to South Carolina in the midst of this changing business environment, I really have no idea what all this could mean for my future. Even with a 20 year work history, transferring into a new plant could put me in a precarious position if that plant is required to reduce it's "complement" (that's "employee levels" to the rest of you).
Finding out where I would stand as a transferee has been pretty tough to ascertain. Still, the fact that I need to be in South Carolina has not changed simply because the economy or my employers business model is changing.
So you can see there are some challenges ahead for those of us at the Postal Service just like the rest of the nation. We are not exempt. Even while we move the mail (40% of the world volume), bringing people together via their written communications and packages we are constantly looking for ways to reduce costs.
Unlike other delivery services we don't add surcharges for fuel or economic hard times. It cost the same to send a letter across town or across the nation. From the US Virgin Islands to Guam, from Chicago to a soldier serving in Iraq or Afghanistan, it still costs only 42¢ to mail a letter.
"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson
Labels: change, economy, mail, Postal Service, South Carolina