Category Archives: Politics

Gun Sales Surge

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The tragic massacre of children and teachers in Newtown, Connecticut, created understandable outrage and many legislators decided they must do something. Legislators in my state of Colorado rushed to pass new legislation to “control guns.” Some or all of the legislation will undoubtedly be found unconstitutional, but the legislators and their anti-gun constituents have been repeated portrayed by the media celebrating that they “have taken action.” They were unfazed by the fact the laws they passed would not have stopped the tragic massacres in the Colorado theatre or the Connecticut school.

Gun-Salesman-Obama-Sign

Photo: www.myfoxboston.com

Colorado residents responded to the highly publicized actions by overloading the background check system to buy guns. At one point there was a week or more delay in obtaining approval to make a purchase. The effort to “control guns” resulted in a surge in gun sales.

Colorado wasn’t the only place where guns sales increased. I recently heard a short report on CNBC that retail sales in the U.S. were up by a bit under 2 percent for the fourth quarter of 2012. The primary reason for the increase was attributed to the 20 percent increase in gun sales. Continue reading →

Benghazi–What Difference Does It Make

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I have been astonished at the lack of attention given by several major media outlets to the attack in Benghazi, Libya that killed four Americans, including our ambassador to that country. I understand that many in the media did not want anything to distract the voting public from re-electing Mr. Obama. They apparently now do not want anything to get in the way if Hillary Clinton chooses to run in 2016. Perhaps that’s why there was little media criticism when Clinton responded to a question whether the attack was a spontaneous protest or an organized terrorist attack. “Was it a protest or is it because of guys out on a walk one night and they decide they would go kill some Americans?”What difference, at this point, does it make?” The media celebrated the “brilliance” and emotion of her response. I was appalled at her response. Continue reading →

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 →

Presidential Election and Aftermath

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It is 9:14 P.M. Mountain Standard Time on election day November 6, 2012 as I begin typing, and the announcement just came that Ohio will cast its electoral votes for President Obama. That virtually guarantees that President Obama has won reelection. What next?

I expect that Republicans will be quite critical of themselves and Mitt Romney’s campaign strategy. They will ask why he did not mention Libya in the foreign policy debate when there was ample evidence that the Obama administration bungled the security for the consulate by responding to requests for additional security by reducing the number of security agents. They then covered up the terrorist attack that resulted in the death of the ambassador and three other Americans by repeatedly claiming the attack resulted from a spontaneous demonstration. The only reason to cover up the truth was that the facts would be embarrassing to the administration. The focus was protecting President Obama’s chances for reelection, and the facts of what resulted in the four dead Americans might have been “problematic.”  The cover story succeeded because Mr. Romney did not make it an issue.

On a societal note, I find it distressing that we have reelected a president whose campaign was almost exclusively based on advocating that people who earn more should be taxed at higher rates. His campaign worked despite the flaw that it won’t work. Wealthy people already pay most of the taxes, and even if you take all of their money it won’t solve the budget deficit. The only way to control the deficit is to staunch the government thirst for more and more spending while getting out of the way of economic development. Economic development is the key. Romney’s approach would have encouraged entrepreneurs to develop businesses, the business would pay taxes, the employees would pay taxes, and the government would have more income. The majority of voters went with the guy who promised to raise taxes on people other than themselves. Continue reading →

Dueling Presidential Candidate Gaffes

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With less than a week until we learn who will be elected president it seems the time is right for a mention of gaffes by the two candidates. It wouldn’t be a duel if the subject referred to Joe Biden and Paul Ryan, since Mr. Biden would win on the numbers of gaffes by an overwhelming margin.

Mitt Romney stirred understandable criticism when he foolishly mentioned that he need not campaign to the 47 percent of Americans who are “dependent on government” and consider themselves “victims.” He later said that he understood that he wasn’t going to get the vote of people who expected that the government’s job is to redistribute wealth, and that “I’m not going to get them.” He added “I do believe we should have enough jobs and take-home pay to allow people to pay taxes. I think people would like to be paying taxes.”

Mr. Obama presented a different opinion in an appearance at Loyola University in 1998 when he was an Illinois state senator. The admittedly 14 year-old video has Mr. Obama saying, “The trick is figuring out how do we structure government systems that pool resources and hence facilitate some [wealth] redistribution — because I actually believe in redistribution, at least at a certain level to make sure that everybody’s got a shot.” Continue reading →

Joe Biden, Territorial Tax, and Social Security

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I often refer to Vice President Joseph Robinette “Joe” Biden, Jr. as the accidental comedian because of the strange things he says. He says them with such force and vigor that people often are swayed by the emotion conveyed and perhaps don’t notice the absurdity of what was said. During his convention speech he said (with great vigor) that “Governor Romney believes in this global economy it doesn’t matter where American companies invest and put their money or where they create jobs. He then went on to say that Romney was proposing “…a territorial tax, which the experts have looked at, and they acknowledge that it will create 800,000 new jobs—all of them overseas, all of them.” Joe, or his speech writers, apparently did not know that the business leaders on President Obama’s Export Council and his Council on Jobs and Competitiveness have said that the tax system Joe accused as originating with Mr. Romney would be a good idea for the U.S economy.

Those comments by Joe during his speech created a flurry of astonished articles, but it isn’t even my favorite recent “Joeism.” During the Vice Presidential debate he accused Paul Ryan and Mitt Romney of wanting to privatize Social Security and inquired where people’s retirement programs be if that idea had been accepted when George W. Bush proposed it. I did a posting in February in which I analyzed what would have happened to a worker who voluntarily put the suggested one third of their Social Security “contributions” into a S & P 500 index (which was called “privatization by Joe and others) on a dollar averaging basis. It would have been really worrisome to watch the value of the account plummet with the stock market in 2008, but the money being invested during that time would have bought more shares.

The calculations I made were based on a person earning $50,000 a year with $3100 being withheld for Social Security and matched by the employer. One third of the monthly total would have resulted in about $170 dollars a month going into the private account. There would have been about $8300 invested since the beginning of 2005, and the value would have dropped to  $5700 at the worst of the market collapse. However, the investors that took advantage of the lower market value and continued to invest would be pleased with the results. They would have invested about $15,700 by now, and, with the improved stock market, the account would be worth about $17,600.

No one knows what the stock market is going to do in the future, but history has shown it to be a good place to create value for investments. The individual with the private account would have the advantage of being able to use the money however they wished upon retirement instead of having the government calculate how much money they would receive each month. They also could designate the person or persons of their own choice to be beneficiaries who would receive the full remaining value. Social Security payments stop immediately after the death of the person.

All of that may or may not be of interest, but let’s get back to Joe. When he asked where we would be if Social Security had been “privatized,” he apparently didn’t know that the individuals who had voluntarily began the investment process would have more money. What is even more astonishing is that he apparently hasn’t noticed that the stock market has improved since Mr. Obama and he took office. Wouldn’t that be something to brag about?