Saturday, August 31, 2019

Tariffs, the Impact on the USA

Listen to the radio and TV, the average family will spend $1,400 on tariffs from China this year. Kind of hard to figure their math, if you buy “Made in USA.” These are real news sources spouting this crap. The announcer seems to be satisfied with continuing to buy from China; Trump is the problem. The whole purpose of a tariff is overlooked, to make you buy from some other source.

The real problem is that we buy everything from China and are dependent upon them for what we need. This needs to stop. We don’t need to pay China 500 billion a year to produce what we should be producing here. “Buy products made in the USA” is what President Trump is saying with the tariffs on China.

These news announcers that claim tariffs will be paid by us, don’t consider that fact that people price shop. Do the math, the Chinese put tariffs on our cars. They do it, to keep their consumers from buying them. We don’t sell many cars in China. Rewrite the headline on their side and it would read “Chinese paying $3000 extra on Chinese tariffs of American Goods.” Point of fact, they are not buying them, they are more expensive than cars made in China. The real question, why do we have a 500 billion dollar deficit with them? What did they buy from us? The answer could be “nothing.”

The whole world has been sucking us dry by producing what ever we wanted. Congress made the legislation and tax laws that forced business overseas. If we can bring them back, we might just have a second chance to turn our economy around. In the past, when we taxed the hell out of manufacturers, they voted with their feet and moved to other countries.

The real problem is the mentality of the legislators in Congress. They think if they double the tax rate, they double taxes coming in. This concept failed miserably during the Great Depression; taxes collected, dropped off of a cliff.

The people in Congress have good intensions, but they have so little business acumen that the real solution are not the most obvious ones. A $15 dollar an hour minimum wage when the rest of the world gets $15 dollars a week, shows how brain-dead Congress has gotten. By god, a family can’t live on a 15 dollar an hour job in the US. Raising the minimum wage moves our jobs to people in other countries. Where you could have had an $8 dollar an hour job, now you have nothing.

So far, the tariffs have been attacked politically as a tax on the American consumer. And raising the minimum wage forces our jobs overseas. Business pass the cost of labor onto the price of the product for sale. It is the consumer that determines whose product they buy. The Tariffs level the playing field; it gives American businesses a better chance to compete with foreign imports.

What we need to realize, is that China, a communist country, does not support any investment in research, there is no incentive for doing so. As a people, they can profit by stealing what we create, and selling it back to us. A lot of the prescription pills in our system like Viagra are counterfeited in their county for sale in our country. The going joke is that they use drywall to make the pills.

We can avoid the tariff issue if we buy “Made in USA.” And that is probably too simple for the democrats running for reelection. Go figure.

China is laughing at us; Trump may set them straight. They are like a bad car mechanic that needs to make a fast dollar, and the US is the patsy. The reality, the next medical cures will not come from China, they have no money for that sort of thing.

Saturday, August 24, 2019

Trump, China and Tariffs

There is a tariff war going on and a lot of people have it all wrong. If China stops buying soybeans from the U.S., that does not put the American farmer out of work. Grains are an international crop. If there is a shortage from one country you buy from another. The price is determined by whether there is a shortage or overabundance worldwide. China can buy soybeans from a country that doesn’t even grow soybeans. All that country has to do is go on the international market and purchase soybean contracts for delivery and then turn around and sell it to China. The soy beans delivered to China do not have a “made in Country” label. You cannot change the prices on the commodity exchange by buying or not buying from a selected country; soybeans don’t have a country.

Most American farmers select what crops to plant in the spring. Usually it reflects what had high prices last year. So, this year is not a soybean year, but you never know, especially if everyone decides to plant wheat. China could face a real soybean shortage next year because of their cute little tantrum.

China right now is selling us 500 billion more than they purchase from us. This has to stop. It is like a tax we have to pay to China. If they cannot buy as much as they sell to us, we are being ripped off. It has to be one for one on trade. Plus, they copy everything we have them produce for us and then they flood our market with knock offs of the original product.

The major thing about a tariff, is the fact that it raises the price of the item being imported. Common sense suggests that the consumer will not buy the higher priced item. Democrat politicians suggest that this is a tax on the consumer. The tariff makes the Chinese goods more expensive than those offered from other sources. The consumer doesn’t really pay the tariff, the foreign producer suffers from the lack of consumer consumption. You don’t order more of a product that just sits on the shelf.

Our country, in its first 100 years, depended on tariffs to foot the bills. There was no income tax. In modern times, after World War II ended, most of the world’s productions capacity had been destroyed. We became the main supplier of product and prospered.

Most of our production has moved out of country in the last 20 years. If production moves back to this country, it will be a second boom similar to the WWII scenario. The return of production here will stimulate our economy. The one thing we need to understand is why it moved out of country? And that has to do with the bottom line. The Entrepreneur asks one question, where can I maximize profits? We need to make it a better deal, to make it in the USA, rather than in China.

Off shore production has benefits. The entrepreneur who makes his product in a foreign country takes advantage of very cheap labor. It might have cost him $1.00 to produce, and he can show a fictitious cost of $12.00 and pay very little income tax in the country of import. There are no social security wages to pay or unemployment or retirement or health care. You kind of have to wonder, passing all of these laws to protect workers, only forces producers to move their production out of country.

A legislative body can pass a law setting the minimum wage at $15 dollars an hour, it sounds great. The jobs that paid $7 to 14.99 are now gone. Intelligence is not a prerequisite to run for public office. New business are so plagued with bureaucratic red tape that the only ones that are successful are those that start out of a garage.

We need to realizes that the real problem is our legislative laws and government restrictions. The people elected mean well, but they do not have the business experience necessary to solve the issues. Plus, a lot of the yes or no votes have lobbyist money behind them.

I think that President Trump can solve the China and Europe import/export problem. We are not going to like if for a while, but the jobs will come back. A “Made in USA” tag has always been a quality product. Sadly, everything in my house says “Made in China.” And that is the real problem we need to address.

Saturday, June 29, 2019

The Unwritten California Homestead Program for the Homeless (Hopeless)

California has been indirectly pursuing a new Homestead program for the homeless including the illegal immigrants. Rumor has it that the State of California is going to license good locations for begging and panhandling on street corners. Any fees will be waived if you are on food stamps or are an illegal alien. The average panhandler makes about 24 dollars an hour. Well above the minimum state wage of $15 for flipping hamburgers, and it is not taxable. Someone is usually suppling free hypodermic needles and food locally.

Camping permits have been waived for most cities in California. The weather is great, and a good tent costs about $35. Plus, California has been declared a Sanctuary state. So, most crimes are a misdemeanor (if you keep it under $1,000). So, breaking into a car to steal a laptop computer is a two-man job. One guy breaks the window --cost $600 and the other steals the laptop $800—no one goes to jail. A concealed handgun is a misdemeanor; you will not get deported.

In college I can remember the guy down the hall with a poster that said “Ski Kansas” (the state is flat as a pancake). I think there is an invisible employment poster in the other 49 states that says “Panhandle California.” You won’t see the poster displayed on a wall, but you might just see the bus fare to get you there, in the palm of your hand. Colorado winters on the sidewalk are a bitch!

Rumor has it that the state is currently looking for “Panhandler Facilitators” that can help educate the massive influx of new residents, to fit into their new retirement vacation environment. Applicants need to have taken the following courses: “Advanced Cardboard Sign Painting 102, “Aggressive Begging 103” and “Shopping Cart Selection 101.”

The state is warning the homeless not to eat the rats, they may have been poisoned. If you have body lice, the state considers YOU the problem, NOT the lice. From my point of view, poisoning the homeless, is a one-step approach to getting rid of the Rats, lice, excrement and dirty IV needles. My solution works for all of the wrong reasons, the trouble is, the solution in place does not work.

Question: I am a homeowner and if I don’t pay my property taxes, they will take my home away from me. But a guy camping in down town LA that is in the country illegally, has more rights than I do and pays no taxes.

Looks like we either get used to the abuse or try to change it, when the next election rolls around.

Sunday, May 26, 2019

Congress: The Short Bus to Nowhere

A lot is going on in the economy, that is winding up like a clock spring.

We have our elected officials who spend our taxes and have absolutely no training in basic economics. Deficit spending is considered Ok because there are no consequences. If we can’t pay for it, push the bill into the future (i.e. to when they are out of office). Plus, it’s not their money so they can be generous and buy a few votes for reelection.

There are two types of people, those who responsibly save for their future or those that are irresponsible and live on the fringe; enjoy now, the Hell with tomorrow. The government has a real problem with the second group, that’s why they take your taxes out of your paycheck before you get it. FDR proposed Social Security to keep retirees from dumpster diving (they had just had the worst financial bank failure that wiped out millions of peoples savings).

The basics of finance haven’t changed over the ages. If you borrow money, you pay it back to redeem the debt. There is a problem with governments, borrowing money. The saver has no say-so on who borrows his savings. The full faith and credit of the government is usually good enough for government to access and acquire the funds needed.

Notice how banks are needed to keep the operation of loans going. This is why the banks were not allowed to fail in the 2008 debacle, this was the government’s piggy bank. Right now, the government owes 22 trillion dollars to “parties unknown.” If the current treasury rate went to 8 ½ % the US government could not pay the interest on the national debt from the taxes collected. The 22 trillion dollars is probably a lot more than the total savings of everyone in the United States.

Now we have Democrats that want to have Single Payer health insurance and a living wage for all. Where will the money come from to pay for all of this? The reply heard from some Congressmen is “Tax the Rich.” How do you get rich? Save your hard earned (already tax paid) dollars for 40 years. Now the government wants to go after your bank account not your wages.

I remember back 50 years ago when cigarettes were 24 cents a pack and today, they are $6 dollars a pack. Government inflation has eaten into long term savings. With the coming election, some of our elected officials (democrats) want to give us more in return for our vote to get them reelected.

Our problems are real, our elected representatives are out of some fairy tale book. Their solutions to our problems are way out of touch. It reminds me of the Obama “Cure for Hemorrhoids,” a gasoline enema, with the warning “Don’t fart when you light the match, you’ll burn the hair off of your ass.” The warning gives the user the false sense of security that the caregiver knows what they are talking about.

Saturday, April 20, 2019

Future Government Taxes

Government Think Speak:
“If you are rich, we need to redistribute your wealth”
“If you are poor, we need to give you more to make you whole”
“America the country where you can rise from poverty to wealth”

What is wrong with this vison?

The real vision: poor people have no money; they spend everything they earn. They hate “Rich People.” The only difference between poor people and rich people is that if you can save $100 dollars a month for your whole life you will get rich.

Through out history people always got old by accident. They didn’t start saving for retirement until it was too late. Getting old is a very slow gradual process.

A basic fact of life is that most people want to enjoy life now, whatever the cost, and pay for it later. This will leave the worker with zero savings. It is no surprise that the Federal Government employs the same philosophy. And we have a 22 trillion-dollar deficit to prove it.

As we approach retirement, not everyone ends up poor. Some people decided early to save money and over time and became rich. Many people reach retirement with savings. Now back in the 1960’s the government needed more money to borrow and they created the 401K retirement program. This program was not for the average citizen to save more for retirement as everyone assumed, rather it was a plan to make more money available for the government to borrow.

Government Social security is a false hope for many. Why save for retirement when you have Social Security? I think many who retire now realize that Social Security is not enough to pay the bills.

So, the rant “Tax the Rich,” makes sense. The government needs more money to fund all of its programs. It used to only tax earnings and investment income. The government has pushed that to its limit. The big reason the government reduced the top income tax rate from 90% was because it generated no income. As a taxpayer, when you get to the 90% tax rate, why work an hour at say $100 and only get to keep $10 of it? Tell me that the people passing the laws understand economics.

Now to tie this all together, Big government needs more income in some form of Tax. They need real money not printed dollars. The only place that can provide the money is from people who have saved up over time; the retirees. These are the rich people, and notice that you can only tax their income as they earn it. Once the tax is paid, they owe no more. So, at that point, how do you tax the rich? The government already taxes their toys.

I really have no answer as to how government will get its hands on the money. The democrats have murmured about a wealth tax of 12%. The government could link your private pension in some way with Social Security—i.e. no social security if your pension is over 50K a year. Government mandated health insurance could bring in $5,000 a year per person (people age 18 to 65). A retirement tax of say 30 percent on your pension (I really see this one working) (people would be too old to complain) (government is in line before the rest home costs). A non-citizen tax of say $10,000 per year per family could be a real good one (pay or face deportation).

The thing we need to be very aware of is that the country is going broke. And it cannot be blamed on the Rich. They pay most of the taxes. What we as a people need to realize is that any money raised by the government has to come from people who haven’t spent it yet. We are just about there. Visible assets are taxable. If you have money, the government wants it, you do not have to be rich to have it taken away by them.

Gold, Silver and Platinum appear to be three ways to hide your wealth right now. Interest rates are so low, that they are meaningless. Holding precious metals is not much of a risk considering that inflation has not truly reflected the ridiculous amount of printed money in circulation. I am not really trying to plug precious metals, but there are ways to transfer your wealth when you die to avoid probate and taxes. Precious metals in a safety deposit box is one of them. Forming a living trust for your home is another. You need to be aware of how the government wants to claim a tax on what you have worked your whole life for.

Remember one thing “Tax the Rich,” can be rewritten “Tax the wage earner.” The real rich don’t work so they don’t have any income taxes to pay. Anybody can get rich if they save their dollars, the trouble is, it takes planning for the future and many don't think that far ahead.

Saturday, March 09, 2019

Surviving in Congress

Sadly, surviving to get reelected in Congress means you do nothing. If you successfully get a bill passed, you have alienated half of the electorate who didn’t care for it. Get two bills passed and you alienate a different 50 percent. From that point you will not get reelected. Sit on the fencepost and do nothing, everyone is happy.

The big thing you need to realize is the issues the voters want fixed are a great item to run on at election time. Get elected and forget about them and dig them up to run on next election. That is probably why Congress is in such a tizzy over Trump. He treats his political platform as a “Bucket List” of things to accomplish.

The odd thing about President Trump is that he is a Democrat. The Republicans know he is not one of them and the Democrats kind of recognize that he represents the party they once pretended to be. He is a true businessman and his first question on most things is “How much will it cost.” Most people in government don’t care about costs, “It’s not their money.”

Right now, there is a tremendous amount of political fervor in the country. Alex de Tocqueville toured this country in the 1850’s (170 years ago) and notice some shortcomings in the US. Here are a few quotes from “Democracy in America.”

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.

I know of no country in which there is so little independence of mind and real freedom of discussion as in America.

In the United States, the majority undertakes to supply a multitude of ready-made opinions for the use of individuals, who are thus relieved from the necessity of forming opinions of their own.

In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.

Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.

The real problem that Congress fails to address is the National Debt. It is too big to ever pay off. The common man will never understand the implications of that. As a child, you understood the concept, when you came home from school, and the refrigerator was empty and you were hungry.

Congress can perpetuate their reelection by doing nothing, they did the impossible when they printed us out of the latest “Great Depression.” This allows both political parties to blame each other for the current mess and the voter is none the wiser.

Congress is seriously entertaining the Ocasio-Cortez ideas on cow farts and radical socialism which boggles my mind. The thing that bothers me, is that most in Congress must think that “Bovine Flatulence” is some sort of carbonated health drink. The new Left's credo, “Save a tree and kill a cow.” Of course I have always maintained that there is way too much lead in the drinking water in Washington DC.

Thursday, January 31, 2019

The Possible Trump “En passant”

Let’s see, no wall for Trump after he opens the government for three weeks. Pelosi said the government had to be open for any discussion of the border wall. It doesn’t look like she is open to any sort of border wall negotiations after the government was reopened.

What if Trump decides to build the wall by using his emergency powers? And then tells Congress to pass the budget with two thirds vote, because his signature is not forthcoming. He can claim that what ever they pass will have the blessing of the American people. And it will be up to Congress to accept the guilt for any foot dragging in coming to an agreement. If Congress truly represents the people, this will come to be, at some point in time. Its about time for them to pass a budget that has a firm support from both sides.

Congress needs to be shown that the real world, looks at what you have accomplished, not what you stand for. Many of these Congressman have dreams that elude reality. Practicality and pragmatism are what we need.

Compromise will build unity.

Tuesday, January 15, 2019

The Power of Presidential Executive Directives

Most people think that the laws of this country are passed by the Congress and State legislatures. That is not the case. In most cases, a Government department is created and funded by Congress. The head of that department is responsible for writing the code of laws. If the traffic department wants to write a law that has a fine of $300 for sneezing at a stop sign, you pay the fine or hire a lawyer for $1,000. Mind you, if you don’t pay the fine or obey the restriction, the bureaucrats activate the next line of enforcement which is the police. And as you saw in the BLM cattle feed charges of a few years ago, they had the FBI out there trying to enforce their edicts. The laws had been changed by bureaucratic proclamation.

So, what is happening? We have a President that is starting to eliminate a lot of these directives that gave these agencies regulatory authority over us. The EPA has lost about 770 employees and they are not being replaced. It was those people claiming that the car companies were getting better gas mileage due to their regulations. The truth was, the increased mileage was due to the forced production of more fuel-efficient economy cars than high performance models. By averaging the overall mileage as a group, you got the desired result. You could still buy both, but you paid more for the gas guzzler. Get rid of ethanol additive to your gas, and you might even see an extra 4 miles a gallon.

Basically, the President enforces the laws. He can help validate a future law if it has less than a 2/3 majority vote for it and at least a 50 % approval. As chief enforcer, he can write Executive directives to define how a department functions and can issue directives on how to execute the law, like forget it. Obama did this with the border guards.

Obama’s presidency was fraught with executive directives for everything. These were bureaucrats deciding what was right for you to do or not do. If you didn’t march to their drummer, you were fined or jailed.

We are slowly emerging from this Obama fiasco of government regulations for everything, to one of less government regulation. The Trump administration brings anticipation of less supervision and more economic freedom.

Let’s ring in the new year and forget that we are Democrats or Republicans. Of course, with Congress it is very hard to forget what Obama did with health care. He taught the Republicans that he didn’t need them for anything. Attitudes matter and I think the Democrat's party is going to get pay back in the coming new year. Hopefully less government regulation will turn the economy loose.