Author Archives: rff_blog_admin

Social Security Projections

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The U.S. deficit continues to grow out of control, and there should have been actions taken to address the problem long before now. However, President Obama’s comments that the deficit is not a short term problem indicates to me we won’t do anything about the deficit for the next four years. Much of the problem is caused by “entitlement” commitments, and President Obama said in his inaugural address that he has no intention of doing anything about those either.

I’m baffled how the American people and the media are going along with the “don’t worry, be happy” approach. Looking at Social Security alone is frightening. A recent article by Chuck Saletta on the Motley Fool points out that each new analysis finds that the program will reach “financial unsustainability” sooner than the previous analyses. The Social Security Trustees reported in 2008 that problems would not be encountered until 2041. The date has now changed to 2033, and that is going to continue to move closer.

Money taken from employees and employers is invested in bonds, and bonds that mature must be replaced with new ones. The older bonds were yielding much more in interest than the ones currently available. The program is projected to earn $5.4 billion less in bond interest in 2012. The fact the Federal Reserve has recently said they are going to artificially keep interest rates low until the unemployment rate begins to drop means the revenue is not going to improve. Continue reading →

Looming Demographic Disaster

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The first paragraph in an article authored by Bill Frezza is disconcerting, to understate the level of concern it should cause. “If demography is destiny, democracy is toast-at least those democracies where citizens can vote themselves a living at someone else’s expense. It doesn’t take a mathematical genius to see that governments’ addiction to intergenerational income redistribution is not sustainable unless someone keeps supplying babies at an accelerating pace.”  The last sentence of the article is, “The problem with entitlement democracy is that you eventually run out of other people’s babies.” (I’m guessing this is a slight theft of Margret Thatcher’s famous quote that, “The problem with Socialism is that you eventually run out of other people’s money.)

The gist of the article is that we are facing a self-imposed financial disaster. “The root cause of the economic disaster that lies ahead is the kamikaze drive of democratic governments to displace the functions of the family, including the care of relatives in their old age.” Continue reading →

Fiscal Cliff Shenanigans

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President Obama has repeatedly talked about imposing a “Warren Buffet Rule” for income taxes, which refers to the outrage he is said to feel that his wealthy supporter pays a lower income tax percentage than his secretary. Drilling down into the recently passed “Fiscal Cliff” bill that Mr. Obama signed into law reveals some curious aspects that don’t seem to be consistent with that position.

An article by Brad Plumer of the Washington Post gives a good start to understanding how much our elected leaders care about fair taxation. Section 322 provides a $9 billion tax break to manufacturers such as General Electric and big banks for what is called “active financing.” That section allows deferring U.S. taxes on overseas income. I’m not against helping U.S. companies be competitive in the global market. However, I recall Mitt Romney was chastised by the media for not pledging to end the provision which President Obama has now quietly signed it into law.

There are other aspects of the law that are even more curious. “Carried interest,” which is the share of profits paid to private equity and hedge fund investment managers are not taxed at the same rates as salaries. The new law will allow those payments to be taxed at a top rate of 20% for individuals earning over $400,000 or $450,000 for joint returns. If that one doesn’t bother you, how about a100 % exclusion on gains from qualified small business (QSB) stock held for at least five years. How many middle class Americans will benefit from that or have even ever heard of it? Continue reading →

Actions on Parkway Next to Rocky Flats

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I haven’t posted an article that directly relates to the former Rocky Flats plant for quite some time, but there is recent news about the area where the plant was located .There have been plans to transfer a parcel of the Rocky Flats National Wildlife Refuge for a right of way to construct part of the Jefferson County Parkway near where the plant operated.  The court recently threw out law suits to stop the transfer ownership of the strip of land. The suits were based in part on “…the lack of a comprehensive environmental assessment of its impacts.”

The parkway has been vigorously opposed by people who object to the development and resulting congestion that would result. A focus many who opposed the project was plutonium contamination in the area. One article explained, “Opponents say building the road along the route currently proposed, which skirts the eastern edge of the Rocky Flats National Wildlife Refuge, could turn up soil laced with dangerous levels of plutonium in the area, which was the longtime site of the Rocky Flats nuclear weapons plant.

The $10 million dollar land swap for the right of way officially went through on New Year’s Eve Day. The court action to reverse a last-minute injunction was undoubtedly celebrated by the cities and governmental agencies that see the positives of completing a high-speed highway around the metropolitan area. A spokesperson for one of the environmental groups that had sued to block the transfer, “…called the closing a setback, but said his group will continue to look into ways to fight the building of the tollway.” Continue reading →

Russian Adoption Politics

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The posting last week was about Russian politicians retaliating against a U.S. law imposing human rights requirements on Russia. The Russian law, which would include banning adoptions of Russian children by Americans, is moving closer to reality. The law has been passed and Vladimir Putin has indicated he will approve it. A Reuters article by Nastassia Astrasheuskaya and Alissa de Carbonnel reports the law would cancel the placement of 46 Russian orphans in U.S. homes. There were 956 Russian Children adopted by Americans last year. An Associated Press article by Nataliya Vasilyeva and Mansur Mirovalev  on Yahoo reports that more than 60,000 Russian children were adopted by Americans in the past 20 years. 　

The Russian law has sparked outrage in both Russia and the U.S. because the children “…aren’t offered to foreigners until they get a certain number of (adoption) refusals from Russians…” Many of them have difficulty being adopted because they have severe health problems or disabilities. There are “…about 740,000 children without parental care in Russia…” and many live in severely overcrowded orphanages.

It would seem the willingness of Americans to adopt Russian children, especially those with disabilities, would be welcomed. However, it is more complicated than just a political spat. The new Russian law is named Dima Ykolevlaw  “…after a Russian-born toddler who died of heat stroke after his American adoptive father left him locked in a sweltering car.” There was another disturbing case of a Russian-born child being raped by the American pedophile adoptive father. Continue reading →

Russian Bill Retaliates Against New U.S. Law

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The “reset button” Secretary of State Hillary Clinton gave to the Russians early in President Obama’s presidency with the hopes of improving relations between the U.S. and Russia is still failing. Business Week reports that Russian legislators have given initial overwhelming approval to a bill that would impose sanctions on Americans accused of human rights violations.

The U.S. bill that caused the newest dust-up was intended to open new export opportunities for Americans wanting to do business in Russia. However, there is one section named after Sergei Magnitsky. He was an activist lawyer who was jailed and refused medical treatment until his death. He was arrested after he accused that police officials had engaged in multi-million dollar tax fraud. Russian rights organizations point out that no one has been prosecuted and that some officials he had accused have been promoted.

A Russian Foreign Ministry spokesman issued a statement after President Obama signed the U.S. bill into law saying it was “odious” and “blatant interference in our internal affairs.” The most troubling part of the story is the uncertainty about “what criteria would be used to assess human rights violations. The spokesman said “…targets could include people who abuse adopted Russian children and people responsible for creation of secret prisons.” I’m guessing that people in the U.S. considering adopting Russian children might want to know more about the law and the intent.