From ObamaCare to ObamaCar

1) When there is massive unemployment there are no jobs for those with higher skill-sets as they are all filled already.

Anedoctally in 2007 I was involved in a contract engineering project with 18 other people working on the F-35 program. All of the 18 people were highly skilled and highly paid for those skills. Due to the 2008 Recession and resulting unemployment about 1/2 of those individuals have joined the "long-term unemployment" ranks because there are so few job openings. Most lasted until about 2011 (only a few of us were retained after 2011) but many have been unemployed since then because there aren't enough jobs out there for them. Highly skilled but unable to work because of massive unemployment in aerospace today. Fortunately many of these co-workers were also retirees so they're getting by but they'd rather be working as it is high paying work if you can get it. Their "skill-set" didn't diminish but their income dropped by 75% in most cases.

2) The Libertarian Party itself recognizes that allowing people to go hungry, to be forced into homelessness, or to go without other basic necessities (e.g. health care) is not acceptable. It makes several proposals in this regard but many of which simply don't work. For example they propose that the local community, possibly through a church or other local organization, provide assistance but if the entire community is in poverty there are no resources to draw from. They propose that other family members help but if the entire family is living in poverty the family can't help.

When all other forms of assistance fail then we only have government left to depend upon. The Libertarian Party seeks to find alternatives to government welfare but they only work when the financial resources exist to fund those other sources.

Let me provide an example, We have numerous food banks across America and I'm a financial supporter of NW Harvest here in WA. Many people support food banks but we know that these private charities are falling about $80 billion a year short of meeting the needs of the American People based upon the expenditures for SNAP. The charities help but they simply don't receive enough in voluntary contributions to meet the need.

Once again I don't advocate government welfare because I believe the employers should be responsible so that government welfare is unnecessary. If all employers ensured that their employees received enough in compensation so that they didn't require financial assistance from others then there would never be a need for government welfare assistance.

3) The "law of supply and demand" works very well related to commodities. It doesn't matter if a pound of sugar is equal to a dozen eggs or not as neither the eggs or the sugar suffer if the exchange rate changes. It does matter when applied to labor if the employee suffers because the exchange rate isn't enough to fund the necessary expenditures of the employee. Commodities don't suffer but people do and therein lies the difference.

4) The sales tax is a consumption tax and, as FairTax.org supported in it's arguments it is highly regressive which imposes a greater tax burden on low income individuals than on high income individuals. FairTax.org addressed the regressive nature of a consumption tax with a "prebate" that can eliminate the regressive nature of the tax. The State sales tax is not the only regressive tax though when it comes to the tax burden relative to income of the person. 

Our federal tax codes are also regressive as they don't treat all income identically under the law. A dollar is a dollar is a dollar and all should be treated identically under the tax codes of the United States. I addressed this in my federal tax proposal as there would be an exemption for everyone to ensure that the taxation is based upon those that could afford the taxation and then there was only a single tax rate above the exemption level.

Of course I also addressed the fact that some income is subjected to a 15.3% Social Security/Medicare tax while other income is not and to be fair if any income is subject to this tax then all income should be subject to this tax.

Of note I support a "State Consumption tax with a prebate" and no state income taxes. I also support a "Federal Income tax with an exemption" and no federal consumption taxes. That splits the source of taxes between the state and federal government so that the same source is not used for both.

Jan 7, 2014 16:44:32 GMT pjohns1873 said:

From what I heard on the news just today, a very large portion of the many unfilled jobs out there are probably the result of there not being enough people available with the necessary skillsets.  This argues for the wisdom of these individuals' upgrading their skills.

The "regressive" nature of the sales tax is a shopworn argument that the center-left and the hard left used in Tennessee, about a decade ago, as they tried to impose a state income tax upon Tennesseans.  Fortunately, it did not work then.  But they are still trying.  (Note:  I simply do not trust the government.  The claim that such a switch would be "revenue neutral" would be unlikely to be true for long.  An old tax that was abolished--or even attenuated--would likely return in full, before long; and then we would be stuck with both types of taxes.  I favor low taxation for all socio-economic classes, without exception; and corresponding spending.  In fact, I strongly support a Balanced Budget Amendment, to be enforced rigorously.) 

Yes, there are some cases where retraining and education allow for a career changes and then there are cases where it doesn't work. For example we had the housing crisis in 2008 where new home construction came to a virtual standstill. Millions of American construction workers had to find new jobs outside of the construction industry and millions of immigrant Mexicans employed in this trade went back to Mexico and found jobs. Today there is a huge shortage as new home construction is back up and about 10% of new home constructions are delayed due to a lack of manpower. This is not an easy profession as it is physicaly arduous and not something an older office worker would be able change to. Perhaps millions of jobs but few to fill those jobs based upon making a career change and the employers are demanding "experience" and have yet to be willing to train. It's also a job that can't be learned "in school" but instead has to basically be learned on the job. I found the same thing related to heavy equipment repair technicians. There are jobs but the only way to get the jobs is to have on the job experience and the employers don't want people without experience.

Career changes also result in "entry level" wages where older workers take a severe loss in income. An accountant earning $80,000/yr could probably expect $30,000 a year if they went into inventory management for example. They'd be starting at the bottom of the economic ladder in their new profession. Of course many are doing that today and many upper middle income middle-aged Americans are now low income Americans but they're working.   

Career changes really only work for the young and don't work for the old is really the bottom line in most cases.

You're correct when you point out that center-left and hard-left are trying to ultimately increase taxation when the propose the addition of an income tax on top of a sales tax. Sure, it will be "revenue neutral" the first year but down the road it's all about more tax revenue. We've had the same BS going on here in WA for the last 20 years and the taxpayers have repeatedly rejected a state constitutional amendment to allow it. That is not an argument against the fact that consumption (sales) taxes are regressive though. Living in WA where property and sales taxes are the primary source of state revenue it was found that low income households had 14-times the tax burden relative to income (the worst in the nation) because of the regressive nature of these taxes. I oppose state income taxes but also understand that we need a "prebate" similar to what FairTax.org proposed for a national consumption (sales) tax to mitigate the regressive nature of consumption (sales) taxes at the state level.

Anyone that's ever read the different poposals for a "Balanced Budget Amendment" knows that they are a political hoax. They don't prevent deficit spending at all and never would. They're so full of "holes" that they're like a legal seive as they attempt to stop deficits exclusively by limiting spending authorizations and impose no taxation requirements when the spending authorizations "legally" exceed the revenues. At best all they would do is create government shutdowns every year as Congress fought of how to circumvent the Amendment. As I said the proposals for a Balanced Budget Amendment are a political hoax that will not stop deficit spending and will adversely affect the American People in the long run.

I also want lower taxation and spending so there we agree but there are two things we must do if we want to actually accomplish it and a "Balanced Budget Amendment" isn't one of them.

First we need to establish "equitable" taxation for all Americans based upon tax burden relative to income. This is more than just a federal tax issue as the person is subjected to more than just federal taxes. The tax burden of the person is based upon all of the taxation they're subjected to. Of course this has to be addressed at two different legislative levels (state and federal) but the first issue before us is to expose the inequities in our tax codes and agree that they exist. The examples are endless so that shouldn't be hard to do for intelligent Americans but they need to pay attention to the facts as opposed to listening to the same old political BS coming from the politicians. It's time to take off our "Party" hats, read and understand the facts, and then put pressure on the politicians to change the state and federal tax laws.

Second is we that need to actually require the American People to fund the authorized expenditures. If we don't do that, and we haven't been doing that, then we don't have a valid argument for telling our government to spend less money. This is a huge problem for "Tea Party" movement members because they're complaining about spending that they're not even paying for. Only if the American taxpayer is actually paying the full costs of government do the taxpayers have a legitimate complaint related to the tax burden they shoulder. We have to change the argument from "spending" to "taxation" but we can only do that if we're paying the taxes and not if that tax burden is being placed upon future generations.  

With those two pieces of the puzzle in place (equitable taxation based upon tax burden relative to income and actually paying for the costs of government) then the Congress can be forced by the American People to address what is necessary and what is unnecessary spending. It is the job of the Congress to address the differences between necessary and unnecessary spending and what we really want to cut is the unnecessary spending and not the necessary spending.

We can agree, for example, that the US military has to defend the United States against a foreign attack or invasion but then we can ask whether we need 13 carrier groups spread all over the world when no other nation even has a single carrier group to match one of ours. Are 13 carrier groups really a necessity when it comes to defending the United States from attacks and invasions by foreign countries is a question that Congress must answer but it is a legitimate question for their consideration.   

Jan 8, 2014 20:09:01 GMT pjohns1873 said:

(1) I am privy to no information that might suggest that the current high levels of unemployment are due, primarily, to older workers being unemployed (and less amenable to retraining) than younger workers are.  Do you have any information that might suggest this?   

(2) There are actually three sources of taxation--not just two: i.e. federal, state, and local. (For instance, as regarding the sales tax in Tennessee--where I reside--the state and local sales tax, combined, comes to 9.75 percent in the county in which I reside--albeit slightly less on food items that are not pre-prepared.)

(3) A Fair Tax, with its attendant prebates, is probably a good idea. 

(4) One good way to roll back "authorized spending" would be to change the law so that there were not automatic increases in some domestic-spending programs; any attenuation of which is called a "cut," in Washington's parlance. 

(5) You appear to align yourself with the left in its desire to cut military spending--just not domestic spending.  My own priorities are precisely the reverse of that.   

In response:

1) The issue I addressed was retraining for a career change for the long term unemployed. I have no evidence that unemployment overall is more heavily weighted towards the old as opposed to the young but anecdotally I believe that long term unemployment is more associated with older workers that are beyond a reasonable point of making a career change. Long term unemployment also harms older workers more than younger workers as even if they can change careers it's normally for substantially less income than they previously had. Additionally their living expenses are unusually higher and they time to retirement is substantially less.

2) Yes, technically we have federal, state and local taxes but normally local taxes are based upon a state tax. In WA, for example, I believe the State collects about a 6% sales tax with many local communities adding another 2% to it for roughly an 8% sales tax. The same is true with property taxes where local tax levies add to the state property tax.

3) Yes, a "prebate" does reduce the regressive nature of taxes like consumption (sales) taxes. As we've both noted the proposals to add an income tax are just a means of ulitmately imposing more taxation by the politicans. I don't want more taxes but instead seek equitable taxation at all levels of government.

4) Actually my position on military spending is based upon being a combat veteran. I've seen far too many of my brothers-in-arms dying and their lives being destroyed in wars that had nothing to do with protecting the United States of America. I find the disrespect of Congress to the members of the US military appauling as they don't even have the balls to issue a joint declaration of war before sending US troops of to die in some godforesaken land. The "costs" paid by the veterans of war is far greater than any spending by Congress. If war doesn't directly take their lives then it often destroys them. I've never met a single combat veteran at my local VFW that doesn't suffer the effects of PTSD. It may not be totally dibilitating as that is more rare but they still suffer from PTSD. The high suicide rates of former combat veterans in their 50's attest to the fact that PTSD has been slowly destroying even their will to survive. Millions of American families have been destroyed because of the PTSD suffered by American combat veterans. It is a price too high to pay for political gamemanship using military interventionism that normally fails anyway. We lost in Vietnam, we lost in Iraq, we've lost in Afghanistan as there was no "winning" of those wars even possible. I even question whether we really won in WW I or WW II as many of todays international problems are based upon the military outcome of those wars.

But there is a more important question for you to ask yourself. Should we be spending as much money as we are on our military when we know we can't really afford it? Simply remember that as of today about 1/3rd of the DOD spending is based upon borrowing. If we support a balanced budget then how do we support borrowing to fund the military except in times of a declared war against another country that has attacked us? I can understand the deficit spending during WW II because Japan and Germany both attacked the United States. The United States has not been attacked by any nation since WW II nor is any nation even inclined to do so today.

A person cannot support a balance budget and also support deficit spending to fund the military.

Jan 16, 2014 3:41:13 GMT pjohns1873 said:

I have been unable to respond for the past week or so.

I will now reply to just a couple of the points made, above:

One should probably not rely very heavily upon anecdotal evidence, as that is about the least reliable form of evidence that may exist. 

And I do not support "deficit spending to fund the military."  Rather, I support our leveling sufficient taxes to make it possible for the American military to be capable of defeating all comers single-handedly.  In other words, if China, Russia, Iran, Venezuela, and North Korea were to combine as an axis, the US alone should be able to militarily defeat this combined adversary.

And our spending upon social programs should be trimmed accordingly, in my opinion, so as to make this possible without any increase in federal taxation.

I agree that anecdotal evidence is not the most reliable but we can't ignore statistical facts such as the high rate of suicides for former combat veterans or the fact that the US Congress has failed to pass a formal declaration of war since WW II.

Exluding the fact that the US already has the largest military in the world. that China, Russia, Iran, Venezuela, and North Korea are incapable of even launching an aggressive war against the United States (and have no desire to do so), if we just look at the fact that it is less expensive to be prepared defensively as opposed to funding offensive operations the US could match the entire military budgets of those nations for less than 1/2 of what we spend today. The combined military spending of China, Russia, Iran, Venezuela, and North Korea is less than $400 billion/yr and merely matching that spending is more than adequate to defend against any potential attack by even an allience of these nations. Remember that combined these five nations can't even muster a naval force capable of attacking a single existing US carrier fleet and we have 13 carrier fleets.  

There is a simply solution to reducing spending on welfare assistance to mitigate the effects of poverty. Reduce the poverty and it reduces the necessity to mitigate the effects of the poverty. 

To a large degree that is doable by simply readdressing our tax codes (federal, state and local) that impose the highest tax burden relative to income on low income workers. We should also look at the possible necessity of requiring enterprises to pay at least the minimum costs of the labor they use to earn profits. Working for a loss, which is what many low income workers that can't afford basic necessities are doing, is an irrational proposition as it is economically unsustainable. I would much rather see people earning a liveable income instead of my having to pay taxes to subsidize them because enterprise doesn't pay them enough to live on.

One fact that the "anti-tax" movements such as the Tea Party ignore is that we actually do need to increase federal tax revenues if for no other reason that to pay down the national debt. Our current national debt is virtually $17 trillion and all we have to do is look at the impact of that debt based upon the additional tax revenues required to carry that much debt.

At 2% interest the cost is over $340 billion/yr. (less than 1/2 the historical 'cost' of money)

At 3% interest the cost is over $510 billion/yr. (more than we spend on general welfare expenditures today)

At 4% interest the cost is over $680 billion/yr. (slightly below 'average" cost of the national debt historically)

At 5% interest the cost is over $850 billion/yr. (about the cost of the current US military budget excluding war spending)

At 10% interest it is over $1.7 trillion/yr. (or slightly less than all of the general tax revenues of the United States)

If we address just reducing the national debt at approximately the same rate that we increased it that would require about $1 trillion/yr in additional generally tax revenue above and beyond balancing the US budget. So not only must we balance the budget we need to increase federal general tax revenues by about 50% on top of our current general tax revenues. That is a huge tax increase just to pay for past spending where we didn't collect nearly enough to fund authorized expenditures.