US Government Shutdown 2013

US Government Shutdown

The biggest question I have regarding the 2013 US Government shutdown is, who cares? Now I know there is a small segment of the population that is directly affected but I don't know anyone who is. It seems to me the news is spending an inordinate amount of time on this subject. In the end we will have a deal, one that does little of anything I would bet. We also will have an increase of the debt limit. The extent that the media sees to be going to look for people and places that the effects are felt is quite staggering. It almost reminds me of the blind allegiance they have to push patriotism whenever talk of war. There can be little doubt that government and media are in bed very deep. Or else why would stations be spending so much time petitioning for the horrors of the shutdown to be told. Every where I go, there is an article or social media post asking me to tell them of how the federal government shutdown has affected me. 

I completely understand why government wants us to believe they are the center of the universe, though I am skeptical enough Americans understand this as. The extend they have been closing or blocking off places and services that have no business being shutdown screams of a person desperate for attention. They do understand that having people go out and police places where there are usually no government employees costs more money don't they? As I mentioned to a friend the other day, the US government is the only institution I know of that costs more when it's closed than when it's open. Though I would say they cause more damage when open. My true hope in all this is that enough citizens of our great country learn that even when many services and not available, the country still goes on. Maybe we will come to the realization that some of these programs really aren't needed. If we cut the budget, really cut it not just cut the rate of growth, the US economy will not be that bad off. Actually in the longer run we will most certainly be better off, as we decrease the debt burden. 

Just as in the 1996 US government shut down things will get resolved and government will go back to normal. I actually fear the normal more than I do these fights. The US is not better off when politician agree to pass a litany of new law. We are not better off when together they find more ways to waste taxpayer money. Our economy is hurt when they come together to find bogey men in business that give reason to pass more regulations. If in 1996 they could go 26 days, I say in 2013 we should strive for longer. The federal government shutdown may just teach us the basic truth, that most of the economy and greatness of our dear republic have nothing to do with Washington, DC.

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Is This The End Of Japan?

Prime Minister Shinzo Abe

This week we got further news that despite the hype of successes of the Japanese newly embarked policy of inflation infinity plus, things are getting worse. The Japanese have decided to out do every other central bank in the world in the race to create inflation to eliminate government debt. Headlines read that Japanese exports have risen once again, which is expected as they continue to devalue the currency. This is not a difficult task, there is no secret or special knowledge needed to devalue your currency and achieve competitive advantage in the world market because of a lower relative price. So to claim this as being some sort of success, is rather foolish. The key is to at the same time produce wealth, that is where the difficult part lies. If you read any of the articles stashed toward the end is the admission that imports also rose, and rose faster than exports. They actually rose 50% faster than exports, which is further exacerbating their trade deficit. What is even worse in that the amount of goods didn't really change at all, which is an admission that inflation is taking hold and hurting the average Japanese citizen. What is happening is that Japanese citizens are having to pay way more for the same goods as they did previously because the Yen can't buy what it did before. This is continued bad news for the Japanese people and government.  

I have been saying that Japan will be the canary in the coal mine for another worldwide recession. They are insolvent by any measure, and cannot pay for their current debt burden. Interest on the debt is the second largest government expenditure, with only social security being larger. They are paying debt with more debt, but even worse since they are still spending more, they are ensuring that interest payments with consume even more of the budget in the future. Add in that the interest rates there are even lower than the US, and one can quickly see that rising interest rates there will end up destroying the government finaces and take the country back to a depression. Other countries around the world are not in as bad a shape but also heading down the same path. As the US has accumulated almost a third of our total debt in just the last 5 years. What will be the result to the world economy when the Japanese collapse worsens? As the 3rd largest economy becomes more poor the buying of goods from other countries will drop and drop significantly. I am sad to say that Japans decades long problem is far from over because they continue the same ridiculous policies without ever addressing the real problem which is their indebtedness. The is not and never really was an easy way out, and just as the US is doing, they are simply making the inevitable pain even worse than it should be. The Japanese citizens are being kept in the dark about the inevitable end to all of this, since the dealer never wants to tell you the longer you stay at the table the more you'll end up losing.

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Reports Blur The Employment Picture In US Economy

Economic Pictured Blurred

Another jobs report and yet another bit of data in which to put a positive spin on. Whether the number is higher or lower than estimates reporters by the droves like to point out how positive the data. At least they make sure to add a positive spin in the title of their articles. But even they are forced in the body or end of the articles to point out the obvious, the data isn't as good as it seems.

Regardless of how many times predictions have been made that the sustained 200K per month job creation is right around the corner, five years in we still do not have it. While the criticisms of the supposed "doomsayers" are dismissed by saying that even a broken clock is right once a day, they can't see themselves in the same light. Even the latest report was only greater than expectations because the expectation had been revised down from 220,000. So when the data comes out at 195,000 and that exceeds the lowered 156,00 data did it really beat the forecast? I would say not, but very few pointed out that the original expectation was the 220,000. The revisions down from previous months are rarely reported but the revisions up are used to support their notion that things are getting better. 

Deep in the data is where the real gloom of the reports lie. There are two reoccurring points in the data that are usually glossed over that symbolize this recovery. They also underpin the argument that this recovery if far from over and the longer this goes on, the worse we fall behind. The first is that 1.6 million of the 3 million of the jobs created since the recession ended (2009) have been in part time workers. We are also creating temporary workers at a rate that exceeds more permanent jobs at many multiples. Not exactly the sign of a jobs resurgence. The vast majority of all these jobs are being created in the service sector, which as many know doesn't even meet the medium household income of the US.

The second and equally important part that is overlooked is that the biggest attributable portion in the drop of the unemployment rate. Millions of people have left the workforce completely, either through retirement or disability causing other financial stresses on the system. Leaving the total workforce participation rate at its lowest levels since the 1970's. The consequences of this should not be overlooked, we have many less people working and paying taxes to pay for the ever growing number of people receiving benefits. The burden that falls to the remaining people to make up the deficit is astounding. Which is why we should expect large budget deficits into the 2020's if not as far as the eye can see.

The endless parade of people willing to overlook these very important pieces will go one for a while. My guess will be at least till a republican becomes president. Then we will be treated to a negative spin on all the data like when the younger George Bush was in the white house and the early 2000's recovery was called a jobless recovery. Wouldn't we like to get those jobless results today, where total employment went up and full time workers made up the greatest part of the work found.

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China Bashing Continues, Mirrors Missing In the West

Is China A Threat?

I have been listening to podcast almost everyday for six to seven years, much of it on Bloomberg since they put out a huge volume. Like others who are interested in world affairs i follow blogs and read news articles on major site. Over the years this trumpet keeps sounding "China is a threat in...." There have been many different fill in the blank topics to be sure and just about all are hypocritical  from a geopolitical stand point. Now I will agree that if you want to create fear, anger, and embed a stereotype of the Chinese government than it serves this purpose very well. Though I believe it is a horrible message to send to the average American let alone the Chinese whom we work with on many levels and need to cooperate with to bring stability in the world.

When talking about the military I understand the angst but we still spend more than double the percentage of our GDP than they do 4.4% to 2%. In all these years of talk of the threat of China they haven't waged war on anyone, but yet we have. What leads us to believe they will? Is the mere fact that they are spending more mean they will? Than we too are guilty of that in spades, and have more of a history of entering into wars with little justification other than it's in our national interest to do so. The better answer, and one we espouse ourselves is self defense. Not just from invaders coming in but also from a self reliance standpoint. Each country would like to maintain a certain level of their military needs being provided by domestic suppliers. To use a crazy example, if we relied on the North Korean's for one of most used missiles what would happen when we entered a war they didn't agree with? They could simply cut us off, that is the primary driving factor of the Chinese build up of their defense infrastructure. As a developing economy they have relied on the technology and manufacturing of others to provide for their defense. Many countries operate in this way and we are the exact same.

In the economic sphere China has become a frequent topic of discussion. Almost never does a day go by that at least one guest is brought on to discuss the threat of china in A,B, or C. realm. I have been hearing this for years. It seems to me that if a country does to well we want to bash them, as if we are the royalty of old deemed by god to be the leader of everything. A funny criticism I heard today on Bloomberg to a guest was that the government was in everything and it doesn't seem like there is a level playing field. Are you kidding me? What government in the world interferes more than the US? Answer is none. The sheer size and position we have dictates that we can more than anyone, and by god we do. The industries the government and the federal reserve subsidize is too numerous to mention. It is done directly and indirectly. They use influence and law to shape a large percentage of the economy as well. How can that be a negative against China but not ourselves? A large portion of our economic recovery is based simply on the federal reserve money printing, but if Chinese central bank does the same it somehow interferes with world commerce?

I remember a number of years ago during the Clinton era for a period of time a much used term to describe how we could maintain our influence was to be "An Honest Broker". To have our actions align with our talk. That in order to have some standing in negotiations you should be speaking on principles you actually follow to be credible. It seems to me we have abandoned that principle and taken the stance do as I say not as I do. The funny thing is in some cases I agree with the talking points. The Chinese should be doing some of the things we urge them to do, they would be better off for it. But then again so should we. We may have shipped off the production of mirrors to China but no one in the government seems to see the flaws that would be glaring back at them if they did.

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Will we go into Recession in 2013?

Federal Reserve Chairman

After the last couple of weeks watching the stock market, bond market, and the fed I have a prediction. Bernanke will create a recession in advance of his term ending. Probably better said would be that the Federal Reserve will allow the US to go into recession, to prevent an even worse result in the future. A currency crisis that we seemed to be hell bent on causing. As surprising as this is to me that they have the guts to do this, it is actually the right thing to do. 

Despite what most idiots on TV have been saying, this economy is almost 100% dependent on Fed stimulus. How do I know this? Aside from common sense which would tell you that printing more than 500 billion in 2013 to by assets is enormous. The math says so. If the economy grew at 2% for the first six month than that equals about 180 billion dollars. Far less than the money printing. Further more once they said they would reduce the stimulus, the bond and stock market acted negatively. So no matter what the talking head wish were true, this economy cannot survive without unprecedented stimulus. Let me say that again to be clear, the government and federal reserve have never provided as much support to the economy as they have during this ongoing crisis. 

Now the way of it. Ben Bernanke knows that this cannot go on forever and he is stepping down at the end of the year. In order to somewhat preserve the stature of the fed, he doesn't want the next chairman to walk right into a recession, which they would if the game kept being played. He, and the rest of the fed believe that he has built up enough credibility that when it does happen and he is blamed. People will forgive him and run to support his "Great leadership during the crisis". This will provide cover to the new chairman who would have their term compromised if it would be thought that they didn't do enough, as the great Ben did to prevent the recession. The last thing the federal reserve needs right now is a crisis of confidence, and this will provide a way of doing so. Hang onto your hats, it's going to be a rough ride for the rest of 2013.

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How Obamacare Steals From The Youth

I read a great article today about the coming effects of Obamacare on the country. The information came directly from the people who will be the ones imposing it on us, the insurance companies. With millions of people expected to see increase of 20-100%. That is a large number and probably more than some people will be able to with stand. Now the plan is supposed to increase the amount of people insured by 30 million. Let's see if that actually ends up being the case, but I am wondering if they imaged that in many situations people would be forced to drop their insurance because of the increased costs. The Obamacare law or The Healthcare for America Plan, is just another of many command and control pieces of legislation wrapped in a combination of altruism and free market principles. Make no mistake though it has many dictates, guidelines  and rules that inevitably distort market principles withe the added layer of subjective fairness. 

The parts of the article that stuck out to me had to do with health care coverage for seniors. One such part had to do with Medicare Advantage, a private insurance plan for seniors, with imposed a tax on these plans. I am not sure how taxing people with insurance already, helps get more people insured. The only way I can interpret why this exists is to seniors out of the private plan and into a government run plan in order to get more payers into it. Though the real nugget and purpose of the article was an aspect of the plan I hadn't yet heard about. Which shifts the burden of the system more toward young people. That is right the people with the least likelihood of actually getting sick or needing health care services. Also those who are most likely not to have insurance, because why would you want to pay a couple thousand a year for a check up? Currently people over 60 can expect to pay about 5 times as much as a 24 year old. And I think anyone with a common understanding of how health insurance works, would agree that it would make a ton of sense. According to the article that gap will be reduced to 3 to 1 as more young people are forced to either pay a tax or get that $2000 a year check up. When the AARP stated a while back that Obamacare would reduce the cost of health care for senior, this is how they saw it happening. More premiums coming into the system from younger people and stricter rules on what you can charge older people. It is just that simple. I am sure many thought it was going to come at the expense of profits from the large corporations, nope not going to happen. Since they are an incredibly powerful lobby, who's members vote in the highest percentage you can image the amount of pressure they put on congress to twist this in their favor to get support. 

I would suggest that the people who can most afford healthcare coverage are those baby boomers just retiring. According to a study commissioned by Metlife in 2010, those baby-boomers stand to inherit 11.6 trillion in assets. The average inheritance even for the poor is said to be $27,000. The wealthiest bracket of boomers are set to inherit an average of 1.5 million. It seems to me that the people who most easily afford to pay for increased insurance premiums are the baby boomers. Why should those just starting out in life who have no assets be asked to pay for those who have been accumulating wealth and stand to inherit more. To complicate it on a more personal level, a study done by US Trust shows that baby boomers don't share, to the same degree, the same value of leaving inheritances to their children as their parents did. By a margin of 18%. There are in my opinion many things wrong with this piece of legislation and it is shocking that even years after it was signed into law there are many things in the bill unknown by the public. I guess Nancy Pelosi was right to prevent people from seeing the bill till it was passed. 

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How Much Does Productivity Matter?

Today I had a discussion with +David Correia and the topic of "jobs moving overseas" came up. It was a simple discussion about how sending jobs overseas is killing America. While this will not be anywhere near an exhaustive article on the subject, that is a topic frequently discussed and not as ominous as might seem. This is also one that is pervasive in the minds of the public, I believe primarily because politicians believe it to be a winning notion to put forth.  While I am not an economist I will tackle an aspect of this that is generally not discussed and has great bearing to what extent it happens and will go on into the future. 

First some jobs are moving over seas, to build things we used to produce here. That is true but we ourselves are also producing things and exporting them as well. As a matter of fact US exports have doubled in 10 years. So we are still producing stuff the rest of the world wants, and one has to believe that we get more by exporting it than consuming it locally. The reverse also must be true, it is cheaper to let others produce it and import it rather than produce them domestically. This is just common sense. On the other hand imports have also risen over the last 10 years, though at a slower rate. The gap according to the numbers from January 2003 till January 2013 shows are narrowing over time. The problem is that both the staring point and end point for imports are much higher, so the absolute difference has still risen from 400 billion to 600 billion. 

While the number don't lie, there is still another story to be told. Low labor prices are not the only cost that matter to a company, usually the stated cause. But what is often over looked is the productivity of that labor. One real world example of this I ran across while researching another topic I also enjoy, gardening. Here is a great example of how much productivity can matter. Spain produces 8 million tons of Olives per year but only a little over 38 tons per HA. In the US we produce only 172,000 tons but produce 129 tons per HA

If the economics continue to hold for a period of time, I would imagine US production to continue to grow in market share over time. Or at least grow faster than the overall demand for olives. Exports should drop if consumption were to stay the same. US production would supplant the previous imports. The only thing probably holding back this trend from accelerating is finding the good land and the large initial cost of set up. But you can bet the existing US producers are looking far and wide to find land suitable for olive growing to exploit the productivity advantage they currently enjoy. Spain & Italy, the largest producers, already been growing olives for a very long time and have probably had the land paid off generations ago and can afford to be much less productive because the cost of capital is next to zero for them.

While the amount of acreage dedicated to olive growing in the US has held firm for almost 40 years, the amount produced per acre has skyrocketed from five thousand tons to seventy one thousand tons. The value has also risen by more than ten times, with the 2011 crop being worth over fifty one million dollars.  Anecdotal evidence here in Florida tells of a growing group of farmers starting olive groves, with many already in production.

This can and does work for all industries. The productivity of the labor can matter more than the cost of the labor. So the US can be the largest export nation again, and more importantly, significantly decrease our trade deficit over time. The biggest driver of that should be focused on productivity growth and not inflating the currency to drive down the relative cost of labor. That in the long run will make us poorer not richer.

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What Is The Real Inflation Rate?

Gold Currency

I’ll tell you what I think about the way
This city treats her soundest men today;
By a coincidence more sad than funny,
It’s very like the way we treat our money.
The noble silver drachma that of old we were
So proud of, and the recent gold coins that
Rang true, clean-stamped and worth their weight
Throughout the world, have ceased to circulate.
Instead the purses of Athenian shoppers
Are full of shoddy silver-plated coppers
Just so, when men are needed by the nation,
The best have been withdrawn from circulation.
—Aristophanes, The Frogs, 400 BC

I fail to see how the Federal Reserve and the Federal Government can still get away with saying that the is "No" or little inflation. There is certainly good reasons for why they would want to hide this fact from the people of America, but why so many fall for it is beyond me. Many are completely unaware of the real rate of inflation and no doubt fooled by the government when they tell us the reasons lie elsewhere. The latest inflation report that came out on 2/20/2013 reported that January 2013 core inflation was .2%. Even according to that number, that would equate to 2.4% for 12 months and above the 2% target set by the Federal Reserve. That is not zero inflation as some have gone as far to say. As a matter of fact, that is a 20% miss of their target. While only one month, we have had many months above 2%, and year over year inflation in December 2012 was 4.2%. The number they continue to target actually sets an anchor in many people's mind for what to expect. Which stands in sharp contrast to what we actually see. If you earned $50,000 in 2003, you would need to be earning $62,389.67 today to buy the same goods as you did in 2003. Does that sound like "no" inflation to you?

If we instead looked at what we pay for or what the inflation rate might look like if they have changed the way they calculated it, then a different picture would emerge. Each time they have changed the way they calculate inflation, the number seem to mysteriously drop. Funny how they never seem to find anywhere when they have understated inflation. They have actually changed they way inflation is calculated 20 times since 1978. In 1983 they introduced owners equivalent rent, which immediately dropped what was 10.3% inflation for the previous 4 years to 3.3% for the next 4 years. Seems like a magic trick right? Do you think the people earning wages at that time actually saw the increase in prices of the goods and services drop by almost a third during that time? I don't think so. This is a fairly complicated change and if your interested, you should look up "Owners Equivalent Rent" to find out exactly what it is and why they made this change.

The next two big changes also had dubious value, and many people have never heard of nor understand they they are in use. Hedonics was introduced in 1998 and is a means by which the government actually DECREASES the price of items, even if the price you paid was higher or the same. The reasoning is that if the items is of better quality, than the value you receive is greater and should be accounted for with a lower net price. Even if the item of lower quality isn't even available to buy anymore. Here is an example: if you bought a base model computer with 20 GB of hard drive space with 1 MB of ram at a cost of $999 in 1998 and the next year that same base model computer had 30 GB of hard drive space with 2 MB or ram for $999 in 1999 the government might use $500 as your price for the computer when calculating CPI. One article i read actually made that claim of Apple computers in the calculation. Isn't it normal for things to get better over time? What does that have to do with the actual price you pay? Remember this goes for all items in the CPI that they can imagine increased in value. Car purchases factor huge in this as the average price of a car is much more than a computer. In 1999 the process of substitution was introduced. This scheme allowed the government to substitute your actual purchase with another like item that cost less. Again even it it wasn't available at the stores in your immediate area. As long as it was available in say Chicago, your purchase anywhere in the city could be substituted. Another example to cement the idea: if you went grocery shopping and while you were there you bought a gallon of ice cream for $4.35 because it was the lowest priced ice cream in the store but 7 miles away there was a brand that you could have bought was $4.05. They would say you bought the cheaper item. Were you expected to drive the 7 miles to get the 30 cent discount? This is all madness, and meant to distort and under report inflation.

If your head is spinning after reading that, than I apologize. By now if you have understood that these measures do nothing but drive down the real inflation numbers, we need to consider; what would they look like if we didn't use these tricks?  Luckily two organization i found actually do just that. The American Institute of Economic Research and Shadow stats. Both use data with the old calculation, and in the case with AIER, they have another formula using the goods and services people buy everyday. The EPI put out by AIER shows that inflation the last three years averaged 5.2%, the CPI was 2.5%. That is double the amount of inflation. If we look at Shadow stats, it shows inflation has been near 10% for the previous three years. They use the methodology in place prior to 1980. Which can only mean one of two things; either the 1970's really didn't have high inflation or the inflation today is really much higher than reported.  I would say it is the latter. Don't believe the CPI data, believe the prices you pay, and place the blame on where it truly lies, the Government and the Federal Reserve.

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The Trillion Dollar Coin

Trillion Dollar Coin

To most the #mintthecoin idea just sounds really stupid. If we could just mint trillion dollar platinum coins any time we wanted then why not mint 16 of them and be done with the debt? Wouldn't it just make sense? The solution to our problems are right there. No need to ever worry about budget deficits. Seems almost criminal that our government has been holding out on us for so long. We for all these years have we been made to suffer and pay higher taxes? Most rational people however realize that this isn't a solution. There are so many problems with this, they are almost too numerous to name. I will name a few: I am pretty sure it doesn't align with the Constitution. Talking with my cousin +David Correia we concluded that even if the coin would be used to pay down debt, it would still be an appropriation of government funds. Only congress has that right under the Constitution. Speaking with +Tony Elam we concluded that the long term debt problem would still exist, that is if we only printed one coin to pay down debt. We are expected to run another trillion dollar deficit this year, so we would be back to a 16 trillion by the end of the year. +Peter Schiff said on his radio show that the federal reserve could not sell this coin to anyone, except back to the US government. Which is correct, no one would buy a coin worth $2000 in platinum for 1 trillion dollars. That is assuming the Federal Reserve would want to take a coin worth 1% of the value. No there is another reason the call for this call is happening.

The real reason for the call for #mintthecoin is to try and take away any leverage the republican have to try and force some fiscal sanity back into the budget. As I previously mentioned, the 99% of the public really doesn't want to pay for the current government they are receiving. How can I say that? Well I would liken it to buying any other consumer goods. People have been for a number of years clamoring for more portable computing, iPhone  iPad  and other such devices. They are happy in general to pay for them, even though they cost more. The service that comes with them cost more on a monthly basis. Where are the calls from the general public to have their taxes raised to pay the deficit spending? It doesn't exist, most of the talk revolves around figuring out how to get other people  the rich, to pay for the government everyone else wants for free. If the general populous doesn't want to pay for the government we have, and we have already taxed the rich more to "assist" in paying for the deficit. Then the last bit of the equation that hasn't been addressed is reducing spending to a more sustainable level. Even the republicans are not pushing for a balanced budget. There proposal would still run large deficits. It is not like we have had large deficits for a long time. The national debt has doubled in 8 years. So we have already tried large stimulus to prime the economy. We need to address the root causes of the deficit, even if that means as the republican want to do, which is in the long term. The #mintthecoin idea is simply to take away the leverage they have to push this forward, denial of raising the debt ceiling. Thank goodness that it is just talk and serious people will not put forth this silly idea or it would take an legitimacy that the US government has to our debtors that we will not simply return their investment into nothing by inflating it away.

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The Fiscal Cliff Deal

The congress has patched together a deal on the "Fiscal Cliff" evidently. Most people are still left scratching their heads as to what the deal actually does or doesn't do to solve the problem. I still contend that this was labeled incorrectly from the start. The real debate should have been why Washington can't live up to it's own promises. The supposed spending cuts while real, are really offset mostly by budgetary increases in spending. In other words a good portion of the so called cuts actually come from non-increases. Only in the world of politics does something like this actually make any sense. If last year i spent $1000 to maintain my car and this year I plan on spending $950, that is a $50 cut. In Washington, if i had previously anticipated spending $1050, going back to $950 is a $100 cut. A difference between a 5% and a 9.5% cut.

The spending cuts were part of a previous deal when the president asked for more spending. So he got the extra money at the time for more spending in exchange for less spending later. So now they come back and say nah never mind we want even more spending. I saw a chart that shows even adjusted for inflation that federal outlays during the Obama administration are over $10k per person. The chart only went back to 1977, but it is the highest it has been in the period from 1977 till today. It is dishonest to say that the Federal Government is not fully funded, according to any measure, the government is spending more than it ever has. The problem is they never spend money wisely, that will not change even if taxes on the rich go to 100% and 50% for the rest of us. They will always say that there is more to spend on. That is a fact that will not change. And by the way if the problem is government doesn't receive enough money to support all the wonderfully successful programs, why bother with lowering any tax rates? They need to be paid for. If we value them, we need to pay for them, all of us to one degree or another.

Another item that has been latched onto to make this sound more ominous than it really is, using a 10 year number. I have tried look up how much revenue this actually raises. The number, if when mentioned, is in 10 year terms. The real number is 36 billion per year (averaged so even less in the early years), while not anything to sneeze at is a pittance considering 2013 is projected to have a 1.1 trillion deficit. So if almost all the "extra" money the Federal Government is spending comes from borrowing who cares about a paltry 36 billion? Other than to score points in the eyes of those who are envious and hateful toward those who have been (by hard work or luck) more successful financially than them. It is easier to either knock down others or blame them for why we are not as wealthy as we would like to be rather than looking at what we can be doing to make our situation better. What you choose to do or not do with your talents, time, and energy have far greater to do with where you will be. Media and politicians thrive off emphasising that someone else has more than you do.It would be far more fruitful to consider where YOU were, what your plan is going forward, and what you can do to impact that. Rather than look for others to blame. 32 billion is a measly 3.2% of the deficit.

One part of the revenue raising is to restore the temporary decrease in SS taxes collected. Which are part of "payroll taxes" as apposed to income taxes. It is all a tax on my income, i don't care what they call it. But they do, it allows them to say stupid things like "This bill does not raise income taxes on 99% of workers in the country". The fiscal cliff deal does however raise taxes on all workers. For those worried about the budget and what we actually spend money on consider this. The 3 largest areas of growth have been defense, medicare, and medicaid. All of which have growth better than 75% over the last ten years. This is where the money is going, over 600 billion increase over 10 years in these 3 programs alone. If averaging, than the 60 billion these programs will grow already dwarfs the amount of the new revenue. I will end this post by saying I don't know how any reasonable person can conclude that the issue is with revenue. Almost no one whats to pay more, the standard of living has not moved in 10 years, and we can't extract enough from even the top 2% to get enough money to pay for the government we have. The real issue is, we can't pay for the government we have, it needs to be cut. The deficits we are running will make the eventual interest payments even higher, leaving even less money for the programs the american people need.

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