Decisions that the Unemployed Should Quickly Make

Whether the unemployed are earnestly looking for work or enjoying a government paid vacation, extending unemployment benefits is a bad idea. For the roughly 25% enjoying a government paid vacation, taxpayers don't need to pay for that. For the rest earnestly looking/wanting employment, it postpones the inevitable and makes it even worse. Essentially for many unemployed people, from day one, there's a major decision to be made - Do I preserve my standard of living or do I preserve my wealth?

To preserve your standard of living, you normally need to deplete your wealth even while collecting unemployment benefits. Stay unemployed long enough and you will lose both your standard of living and all of your wealth. Odds are good, especially if you are 40 or over, that you will never recover them. The unemployed person who quickly decides to substantially reduce their lifestyle and standard of living (move to cheaper housing, sell expensive cars, etc.), has a good shot of preserving their wealth. If they do get a good job again, they will be able to go back to their former standard of living if they wish, plus have all or most of their wealth intact. If they never get that good job, by having quickly reduced their standard of living, they can at least keep all or most of their wealth. That's a lot better place to be at then the person who tried to the bitter end to preserve their standard of living and lost everything.

How to Fix Government Pensions

Many government public pensions are way more generous than private pensions. They are designed in a manner that truly rips off the taxpayer. The situation is so bad, that the unfunded pension liabilities are going to bankrupt cities and states. This is not only bad for those cities and states, but bad for the government employees who may collect much less pension than they were expecting. There is a need to correct these problems in a manner that is fair to both the government employees and the taxpayers.

How did this happen in the first place? There is a very serious, obvious conflict of interest between public unions ( a legal labor monopoly that should not exist at all because it has all the adverse impacts of banned business monopolies) and the politicians, who get elected with union support (time, money, and votes), that negotiate wages, pensions, and benefits with the people who got them their jobs.

Here are my recommendations:

Fund all public pension liabilities that exist and new ones that are created. You can't use government bonds to fund them; you must use taxes that are invested by qualified, non-interested commissions subject to rules and review. However, if that funding requires a tax increase greater than inflation or a tax increase two contracts in a row, then publicly state how much in total and by average taxpayer, and hold an election in which voters can accept or reject the contract.

Eliminate the conflict of interest between public unions and politicians. The simplest, most effective way would be to ban public unions. Other less effective solutions may work such as point 1. Arbitration of union contracts by non-politicians who are not interested parties could be another solution.

3. Overtime pay may not be utilized to calculate income in pension determinations. Furthermore, management and professions, just as in private industry, can not be paid overtime, but are expected to work overtime as required to fulfill the duties of their jobs.

4. To avoid the spiking of pensions through either massive overtime or phony promotions in the years just before retirement, annual income for pension calculations will be the highest consecutive 5 year average of the last ten years and again can not use overtime pay. No pension amount can exceed 55% of this five year average annual pay. You get 1.5% credit for each full time year worked, not to exceed 55% in total. Part time years get partial credits in proportion to a 40 hour week.

5. Full pensions cannot begin until age 65 and partial pensions until age 55. For each year of retirement before age 65, the pension amount will be reduced 4% from the full pension amount.

6. Government workers must also contribute to and receive Social Security. Calculated pension amounts will be further reduced by half the projected Social Security benefit.

7. Government workers who are married at the time of retirement may choose to allow their spouses to collect their pension after they die. However, the amount of pension collected will be further reduced based on life expectancy tables of the husband and wife.

8. No cost of living raises will be allowed on government pensions.

9. Should there ever be a default of a government pension so that only partial benefits can be paid, those collecting pensions that were calculated utilizing overtime pay, would have their pensions reduced first to what their pensions would have been without overtime pay. Then all pensions, if still needing to be reduced, will be reduced by the same percentage.

10. In the future, eliminate government pensions and just contribute to 401K plans (no more than 5% a year). 80% of taxpayers have no pensions and should not be on the hook to fund extravagant government pensions.

What I have proposed is essentially the way private pensions work. Federal pensions should not exceed the private pensions of those taxpayers who get them.

School and other Bond Referendums - Information Black Hole

Voters just approved a 312 million dollar bond referendum for schools in my county. No information other than how much it would cost was given on the ballot. How is someone supposed to make an intelligent decision to approve or disapprove? Prior to the elections, there was precious little information in local papers other than how many schools were to be built and what they each would cost. One school is estimated at 145 million dollars plus land costs. You could build a palace for that price! There should be a law forcing government to give pertinent facts on all bond votes such as:

Cost per square foot and cost per classroom. (for roads, cost per mile, etc.)

Cost of the school building and cost of the athletic fields/stadiums separately.

Average cost per household of the bond total.

Costs in total and costs per household of all other outstanding bonds.

Projected repayment costs of principal plus interest as an annual dollar total and percentage of tax revenues.

Is this an interest only bond with a principal balloon payment at the end (probably necessitating a refinancing to pay off the principal)?

It seems that if you just put the word "school" in front of a bond referendum that it is likely to pass without any serious review by voters. That is fiscal insanity!

A State with No Republicans

Very interesting...Note this. A US State with zero Republicans in office -
The State of Illinois. Think about this.
Some interesting data on the 'state' of Illinois... There are more people on welfare in Illinois than there are people working. Chicago pays the highest wages to teachers than anywhere else in the U.S. averaging $110,000/year. Their pensions average 80-90% of their income. Wow, are Illinois and Chicago great or what? Be sure to read till the end. I've never heard it explained better. Perhaps the U.S.should pull out of Chicago? Body count: In the last six months, 292 killed (murdered) in Chicago. 221 killed in Iraq; AND Chicago has one of the strictest gun laws in the entire US.
Here's the Chicago chain of command: President: Barack Obama .
Senator: Dick Durbin . House Representative: Jesse Jackson Jr. .
Governor: Pat Quinn . House leader: Mike Madigan . Atty. Gen.: Lisa Madigan (daughter of Mike) . Mayor: Rohm Emanuel . The leadership in Illinois - all Democrats. . Thank you for the combat zone in Chicago.
Of course, they're all blaming each other. Can't blame Republicans; there aren't any! .
Chicago school system rated one of the worst in the country. Can't blame Republicans; there aren't any!
State pension fund $78 Billion in debt, worst in country. Can't blame Republicans; there aren't any!
Cook County (Chicago) sales tax 10.25% highest in country. Can't blame Republicans; there aren't any!
This is the political culture that Obama comes from in Illinois. And he is going to 'fix' Washington politics for us?
George Ryan is no longer Governor, he is in the prison.
He was replaced by Rob Blajegovitch who is that's right, also in the prison.
And Representative Jesse Jackson Jr. resigned a couple of weeks ago, because he is fighting to not be sent to...that's right, prison.
The Land of Lincoln, where our governors make our license plates.
But you know what?
As long as they keep providing entitlements to the population of Chicago, nothing is going to change, except the state will go broke before the country does.
"Anybody who thinks he can be happy and prosperous by letting the Government take care of him; better take a closer look at the American Indian."
Don't forget Detroit another good example.
Some of you might find these data interesting. ALL SHOULD. There are actually two messages here. The first is very interesting, but the second is absolutely astounding -- and explains a lot!
A recent "Investor's Business Daily" article provided very interesting statistics from a survey by the United Nations International Health Organization.
Percentage of men and women who survived a cancer five years after diagnosis:
U.S. 65%
England 46%
Canada 42%
Percentage of patients diagnosed with diabetes who received treatment within six months:
U.S. 93%
England 15%
Canada 43%
Percentage of seniors needing hip replacement who received it within six months:
U.S. 90%
England 15%
Canada 43%
Percentage referred to a medical specialist who see one within one month:
U.S. 77%
England 40%
Canada 43%
Number of MRI and CT scanners (a prime diagnostic tool) per million:
U.S. 71
England 14
Canada 18
Percentage of seniors (65+), with low income, who say they are in "excellent health:
U.S. 12%
England 2%
Canada 6%
And now for the last health statistic:
National Health Insurance:
U.S. NO
England YES
Canada YES
And check this last set of statistics!!
The percentage of each past president's cabinet who had worked in the private business sector prior to their appointment to the cabinet....
You know what the private business sector is. A real-life business, not a Government job. Here are the percentages.
T.Roosevelt................... 38%
Taft...........................40%
Wilson ....................... 52%
Harding....................... 49%
Coolidge.......................48%
Hoover ........................42%
F. Roosevelt...................50%
Truman.........................50%
Eisenhower.................... 57%
Kennedy........................30%
Johnson........................47%
Nixon..........................53%
Ford...........................42%
Carter.........................32%
Reagan.........................56%
GH Bush........................55%
Clinton .................. ...39%
GW Bush........................55%
Obama.......................... 8%
This helps to explain the incompetence of this administration: only 8% of them have ever worked in private business!
That's right! Only eight percent -- the least, by far, of the last 19 presidents! And these people are trying to tell our big Corporations how to run their business?
How can the president of a major nation and society, the one with the most successful economic system in world history, stand and talk about business when he's never worked for one? Or about jobs when he has never really had one? And when it's the same for 92% of his senior staff and closest advisers?
They've spent most of their time in academia, Government and/or non-profit jobs or as "community organizers." They should have been in an employment line.
Pass this on because we'll NEVER see these facts in the mainstream media.
"One of the penalties of not participating in politics is that you will be governed by your inferiors." - Plato

Why Raising the Minimum Wage Never Works

Economic lesson - why raising the minimum wage never works as intended. There are calls today to more than double the minimum wage to a "livable wage" of $15 an hour. First, based on history, raising the minimum wage prices many of our inexperienced, unskilled youth out of the job market, raising their already sky high unemployment rates. Not a good thing. Those inexperienced youth who get a first job usually join the middle class within 15 years. Those that don't get that first job when they are young, stay government dependent for the rest of their lives. Most importantly, the experienced and skilled workers logically expect to earn more money than inexperienced, unskilled workers. Many were once inexperienced and unskilled. They worked hard for years to achieve their current skills and income level. They will demand and receive substantially more than inexperienced workers. So if $15 an hour became the minimum wage, the experienced workers will receive proportionally more money than they receive today and therefore continue to receive more money than inexperienced and unskilled workers. If that didn't happen, experienced workers would actually suffer a reduction in their standard of living because in all of this, the volume of goods and services (GDP or Gross Domestic Product) is unchanged. Now we have more income chasing the same amount of goods and services. The result is inflation (goods and services cost more) and the people making the minimum wage still have proportionally less money than others to buy the same amount of goods and services available. Nobody can buy any more goods and services than they could before the minimum wage was increased because nationally there are no more total goods and services available to be bought. minimum wage increases only increase paper money, not goods and services produced. In order to increase your buying power, you must increase your contribution to the production of goods and services so that the total of these rises. In other words, you must increase your skill and/or education levels so that the value of your work makes a greater contribution to the total goods and services produced. That will get you paid more than the minimum wage. The silver lining for those people crying out for a "livable wage" is that 98% of the workers earning a minimum wage are students or youth still being supported by parents or the second member of a household with someone else earning a living wage or combined earning a living wage. Only 2% of minimum wage earners are truly head of household and the only worker in a family. They often get additional help from government. So the 'living wage' issue is really a false, minor issue. Bottom line, raising the minimum wage hurts the inexperienced, first time job seeker and also hurts savers (as their accumulated lifetime savings loses significant purchasing power due to inflation.

Better Social Security Benefits at No Expense to Government

Give upfront options to married couples on the lower SS check for collecting SS in the future when a spouse dies. Currently, the spousal survivor loses the second check. That represents a 33-50% loss of SS income. Too many people can't survive financially with such a loss because their bills (rent, mortgage, car payments, property taxes, home insurance, etc.) do not go down 33-50% when a spouse dies (they don't go down at all!).

At the time that the second spouse applies for SS, based on life expectancy tables so that there is no extra cost to SS, offer 4 options on the lower check. Collect at 100% and forfeit that check on the death of the first spouse (that is the same as today), or collect the second check at 50% or 75% or 100% when the second spouse dies by taking correspondingly less money on the second check from the time both people are on SS. How much less depends on their ages and life expectancy tables.

That's the option I had with my corporate pension. The company did not care what option was chosen because, based on life expectancy tables and factored over thousands of retirees, the overall total cost to the company is the same. If the government adopts these extra options, there would be no increase in costs to the government, but a substantial increase in security for married couples on Social Security. That's a win-win solution.

Fixing Medicare Fraud

Depending on what article you read, Medicare fraud varies from 10% to 25%. Compare that result with private insurance companies. Private Insurance companies experience less than 1% fraud.

Therefore, the best approach would be to maintain the government program as is, but hire insurance companies, not federal government workers, to manage the program as "third party providers". The US military forces already do this for many job activities. Just as with military combat operations, this is not "privatizing" Medicare. It will still be government insurance run by government overseers. Just the administrative workers will be different.

Secondly, roughly half of all Medicare expenses go to people in their last year of life. Many of these recipients are too sick to make medical decisions. So other family members, or government, or medical providers make these decisions for them. The result is often extending the dying process, not the living process, for the benefit of the medical providers.

For example, "have cancer and only have 6 months to live, we need to do quadruple bypass surgery now so you can make it to six months." That benefits the medical providers financially in a very substantial way, but what does it do for the patient except extend his/her suffering?

The solution is for the Medicare recipients at the time they sign up for Medicare, to fill out a medical will that all medical providers have access to and must follow unless the patient changes his/her mind when the time comes. That takes it out of government's hand, out of medical provider's hands, and out of family members hands who may not know the patient's wishes in such a situation and the patient is unable to respond to questions clearly and/or intelligently.

For people already on Medicare, each year they must make new choices for part D prescription programs. At that time, for any who have not submitted a medical will, have them do so. Either fill out a government form or if they have a medical will already, give government a copy.

False Claims that Blacks are Trapped in Poverty

With the 50th anniversary of the 1963 MLK March and "I have a dream" speech, numerous articles are appearing that the job isn't finished, blacks are trapped in poverty, and more help is needed to raise the standard of living for black people. What utter nonsense! Blacks are NOT trapped into poverty! Blacks have every opportunity to succeed today and for the last 20-30 years but too many blacks throw those opportunities away. It starts with the disintegration of black families (3 out of 4 black children are born to single parent households). That's a choice, not a trap! Too many blacks fail to get a good free public education by either dropping out or not trying to learn much if they stay in school despite the fact that we pay up to $20,000 per year per student in black urban areas on education or double the national average. Again that's a choice, and also a failure of family parenting, not a trap. Black crime rates are up to 8 times higher than the national average. Again that is a choice, plus a result of the first two points I made, not a trap. Blacks live in a free nation where they are free to make bad decisions. Way too many blacks make bad decisions. The ones that don't, that is the ones that actually try, who study hard, get an education, and work hard, generally succeed. The blacks (and whites) who don't try to earn their way out of poverty generally live in poverty. Again, that was their choice. Don't falsely blame anyone else, nor unfounded 'universal' racial discrimination claims, nor history for that outcome. Take personal responsibility, study and work hard, and change your life for the better! Otherwise, stop complaining because no one will nor should listen!

Conducting Fair Presidential Primaries

Iowa, a small farm state, and New Hampshire, a tiny, liberal state have deliberately positioned their Presidential primaries to be the first in the nation for the sole purpose of having an enormous influence on who is nominated. Conservatives and anti-subsidy candidates are at a distinct disadvantage. Major Presidential candidates have been knocked out of contention by these first primary states as their failure to conform to liberal policies resulted in a poor showing and unfair drop in polls which seems to have a huge impact on voters. This forces all serious candidates to cater to the political wishes of two tiny states, not representative of the rest of America, and handicaps candidates who are for the real changes needed to fix our government spending problems. Other states and their political interests are consequently at a distinct disadvantage as Presidential candidates spend enormous amounts of time and money campaigning in these two tiny states, and have much less time to spend in other States. The winners in these tiny states have enormous advantages in ultimately winning their party's nomination for President.
This is totally, unfair, un-American, not in our best interests as a nation, and contributes to the out of control spending policies of the United States. I am sure that if our Founding Fathers, noted for their wisdom in setting up our Democracy, were alive and asked to design Presidential primaries today, it would be much different than what we have now. I believe there should be 5 primary election dates, one a month, from February through June, in which 10 states vote in each. These 10 states should be taken geographically from North, South, East, West, and middle. There should be a balance of red-blue states, conservative-liberal states. Then every four years, the order of voting of these same 10 states should be moved with the first group of 10 states becoming the second group of 10, the second becoming the third, etc. with the last group of 10 from the last primary becoming the first group of 10 states in the current primary. No individual state should have a significant advantage in shaping the candidates or US policy.

Ending the Welfare Mess

The current welfare and food stamp programs are set up in a manner that incents people to have as many babies as you can, without supporting fathers, in order to gain more government benefits and "retire" without ever having worked. It is an axiom that whatever you incent people to do, that's what they likely will do. So in the future, let's incent them to work. End or at least substantially reduce welfare and food stamps and replace that program with a child care services program so that the mother is free to work and must work to earn the money necessary to support her family housing and food needs. At the same time require that fathers of all children be identified (with severe criminal penalties for lying, plus free DNA tests) so that they can be forced to support their children. If the fathers don't work, subtract child support payments from any government benefits that they receive to incent them to work. By incenting people to work, more people will work. Less babies will be created for the sole purpose of increasing government benefits of the parents. The disintegration of families (3 out of every 4 black children are born to single parent homes) will begin to reverse which will lead to less crime, less government costs, more children staying in school and actually learning, and most importantly better lives for more Americans.

Social Security Inequity toward Working Spouses

This is best illustrated by example. Two couples A and B are the same age. The husbands make the same salaries during their work life, started working on the same day and retired on the same day 45 years later. Couple A has a working wife who made half the income as her husband and also worked for 45 years. Couple B has a wife the same age a couple A's wife who never worked.

Therefore Couple A has paid 50% more into Social Security through SS taxes over a lifetime (and so have their employers who must match their employees' SS contributions) than Couple B. So, when retired, which couple collects the higher Social Security income? Answer – neither couple – they both collect exactly the same amount of SS income even though Couple A contributed 50% more in SS taxes! That's because couple B's wife who never put anything into SS still collects half the amount that her husband gets which is exactly the same amount that Couple A's wife will collect. Now is that fair?

How to Cut Government Spending

How to Cut Government Spending

We need a real and huge spending cut program. Start with the government subsidies (there are over 2200 of them) - eliminate all of them (that equates to about one trillion dollars a year). Subsidies, which always interfere with the free marketplace, are essentially a "slice" of Communism - the most failed Economic system ever. Next reduce government workers' salaries to be more comparable to the private sector for the same type of work, eliminate pensions and instead put them on Social Security plus contribute 5% of income monthly to a 401K to get in line with voters' retirement benefits in the private sector. No overtime pay for management employees. Go to automatic federal income tax deductions similar to Social Security – no tax forms to fill out - enabling us to eliminate most of the IRS. Abolish the ridiculously expensive, debt ridden and job killing Obamacare. Government regulators get a new job - instead of endlessly creating more job killing regulations, they start of with a clean piece of paper, make a minimum of needed regulations and eliminate the millions of regulations on the books now. Consolidate government agencies as has been recommended in the past. For instance, we don't need separate departments for Medicare, Medicaid, and Senior prescription drugs - one organization should be able to handle all of it. 535 Congressman and senators don't need their individual huge staffs repeating the work of each member 535 times. They get small staffs and a small pool of workers for each political party to share their work results with all their party members. We sell the 14,000 government buildings not being used. We don't give income tax refunds to those who don't work. We don't give government housing to anyone but limited military. Fathers whether wed or unwed must support their children. Unwed, welfare mothers get no government support unless they truthfully identify the fathers (who then must provide child support). Illegal aliens get no government assistance, no jobs, no free education, no place to live and we have a tough, mandatory system with employers, schools, and apartment/housing rentals, and the IRS to ensure that all gets done. If caught, then before immediate deportation, we take all their assets - houses, furniture, cash including bank and brokerage accounts, from them and send them home with just the clothes on their backs. We toughen Social Security Disability requirements, especially for reasons of “stress”. Children must legitimately pass their school subjects to be promoted. If they get left back twice, a social worker investigates the family to see if it is in the best interests of the child to be taken away from their family. All public unions are outlawed as they should be as a corrupt conflict of interest (supporting the election of politicians, then negotiating with these same politicians for wages and benefits). Government agencies that are responsible for social security or any form of welfare/subsidy must operate within administrative costs of no more than 5% of their total budget (same as a good charity). Since Medicare fraud is estimated to range from 10-25% (or hundreds of billions of dollars per year), while private insurance fraud is less than 1%, fire the government workers and instead hire insurance companies as third party providers to administer Medicare and Medicaid.

Climate Change Facts

First, carbon dioxide is not a pollutant. Life could not exist without carbon dioxide. Second, the last 15 years have not warmed at all. That's a scientific fact. Third, the recent tiny increase in carbon dioxide levels in the atmosphere is attributed to deforestation (farmers burning down forests to plant crops). Fourth, China is putting two new, large electrical coal plants on line every week. Nothing we do can change that. Plus China has less controls on coal emissions than we do. India is also building coal plants and their population will soon exceed China's. Fifth, the number of hurricanes per year is nowhere near record levels. Sixth, the mandatory ethanol blends for gasoline add to pollution and don't save any oil imports, but they do increase the price of food and have killed thousands through starvation. Seventh, climate change models, the basis of climate change policies, have failed to accurately predict the weather of the past 30 years when put to the test. Conclusion - we don't have a climate change problem, nor a carbon problem. So why the fuss - liberals want to use climate change as a basis for taxing rich nations and sending the money to poor nations. It's always about the money!

Income Tax Reform

Let's adopt a flat income tax that is simple and also "progressive" (to get liberals to pass it) so that the higher your income the greater the percentage of tax that you pay. Contradiction? No. Either exempt the first $20,000 of income from income taxes or better yet, tax it at a nominal rate like 5%. After $20,000, then tax at a reasonable flat rate with no deductions nor exemptions. The net tax rate is very progressive. For example, if the flat tax was 15% and the first $20,000 of income was exempted,, a person earning $30,000 would pay $1,500 in income taxes which is a 5% 'effective' tax rate. Another person earning $100,000 would pay $12,000 in income taxes which is a 12% 'effective' tax rate or more than double the tax rate the $30,000 income person paid. In both cases, no income tax forms are needed. For interest, dividends and capital gains, either no tax (probably not passable) or the flat tax rate taken out and paid automatically by the financial institutions holding your money. Do the same for companies and corporations, but based on profits (again with no deductions or exemptions).