Fantasticus

“How Does Government Evaluate The Cost of Government?” The Intro

Peter Blane — Thu, 07 Jan 2010 05:29:17 +0000

Hello everyone. I hope you have had a good holiday season, and that you aren’t too bitter about the stock market going down on Black Friday since Dubia renounced it’s debt obligations. Haha.

I’ve been curious for quite some time now about how cost estimates are made in our Government. They come out with these “$60 Billion” this and “$750 Billion” that, but where are they going to in order to find out what a bill will cost? Neither the House of Representatives nor the Senate are capable of doing the research, developing those statistics, getting estimates from contractors, building cost models, etc. on their own. So, where do they go?

As far as I can tell, there are 5 major sources by which our government obtains information and decides what to do with our money based on those findings. In no particular order: The Office of Management and Budget, The Senate Finance Committee, Committee on Ways and Means, Office of Tax Policy (U.S. Treasury), Statistics of Income (IRS), and the Joint Committee on Taxation. You can wikipedia all of these entities, and you will find many branches and ties into other offices and committees from there.

Well, since I have named the Joint Committee on Taxation as one of my “big 5″ government entities, I need to mention the Congressional Budget Office – or the CBO (created in 1974). This being an introduction, and since I’m going to talk about the JCT, and since the CBO is much more popular, I feel as though I should mention why I do not feel the CBO is as important as the JCT for this study for the following reason:

“CBO is required to develop a cost estimate for virtually every bill reported by Congressional committees to show how it would affect spending or revenues over the next five years or more. For most tax legislation, CBO uses estimates provided by the Joint Committee on Taxation, a separate Congressional analytic group that works closely with the two tax-writing committees.”

So, where does the CBO look for all it’s numbers? The Join Committee on Taxation. This is why I will be using the JCT :-)

Well, happy intro to you all in 2010! Bring on the scrutiny of our debt-addicted government.

New Year…New Parties?

David Blane — Fri, 25 Dec 2009 11:45:21 +0000

It’s too hard to define political parties… and why do we care?

I did some searching for some popular articles today trying to figure out what the major feeling was in America before the new year when it comes to politics and the media. I found some articles that are trying to categorize political parties in America. It seems as though they were generally either trying to defend their parties ideals by assuming that their party hasn’t become lost in the medias propaganda or they were simply finding too many similarities within the major parties. the articles can be found here:

http://www.theintellectualdevotional.com/blog/2009/12/11/milton-friedman-alan-greenspan-and-the-end-of-the-draft/
(In this Article the author on “The Devoted Intellect” found conservative economist Milton Friedman’s words about the Vietnam war to sound somewhat leftest. Saying the forced services were like “slavery”)
http://weeklysift.blogspot.com/2009/12/sifting-sifts-of-2009.html
(The author of this post seems to be very strict about how he sees political parties. Saying Democrats represent people and Republican’s represent corporations.)

For the new year, I think it would be wonderful if America started thinking less about party-ties all together. Trying to define your own party and defending its principles, in this current age, will limit your ability to protect your own ideals. Maybe that’s the goal of our giant news organizations; keywords, phrases and misconstrued understanding of policies that inhibit American’s from actually knowing what they believe.

Well, I know for me personally, that I have to consistently ask myself what my core beliefs are. Here’s how I usually start my deduction. Are these current events important to me? Usually the answer is NO. Why are these stories considered important? Probably because they are entertaining and/or make us feel sympathetic. If, for example, the current event is health care, then yes, it affects me. But what the point in spending 4 months trying to understand MY stance on it? Basically, for me, I have found it confusing to base my ideals off a parties beliefs. For the new year, I have defined my core principle. It is that all humans want their right to life and the only way to strive for that core principle in our world is through a strict interpretation of the constitution.

Happy New Year from Fantasticus!

Intro to Inflation/Deflation: Part 1

michael2l — Fri, 30 Oct 2009 18:58:21 +0000

This article is the first in a series of articles that is going to try to break down a concept you have probably heard a lot about in the recent financial crisis, inflation and deflation. There are many methods people use to measure inflation/deflation, but for reasons I’ll explain shortly, I believe it is best measured by the total supply of a currency, in our case dollars.

It’s pretty easy to understand that the more of something you have the less valuable it becomes, and when you have less of something it becomes more valuable. If your house has one bathroom, that one bathroom is pretty valuable to your family. If you have 10 bathrooms, the value of any one of those bathrooms goes down a bunch compared to the value represented to the family with only one.

Economists often describe the situation caused by inflation as too many dollars chasing too few goods. In this situation prices of goods go up to help return the system to balance. So when the amount of dollars in circulation is going up, the value of any one dollar is going to go down. Our federal government, however, instead of focusing on the money supply, focuses on core CPI (Consumer Price Index) for measuring inflation. This index measures the change in price of a basket of goods and services regularly purchased by consumers, but very importantly excludes both food and energy (they are included in the overall index, but stripped from core CPI).

The deceptive thing about focusing on CPI rather than the total supply of money is that goods and services can reflect deflationary forces that mask the true inflationary effects of an increasing money supply. The biggest deflationary forces we currently see are Globalization and Technology. Globalization refers to the ability for goods and services to be produced in areas where wages are lower, and therefore companies can lower their prices while keeping similar profits.

Also, technology as it gets better allows us to produce all sorts of things cheaper. The effect of this has been most pronounced in digital technology which allows for cheaper laptops, ipods, and cellphones that outperform their predecessors. But you also see technology used to bring productivity gains in other ways. For instance, Wal-Mart’s uses a high-tech supply chain that significantly lowers the cost of managing their inventory compared with their competitors allowing them to lower prices.

Globalization and Technology represent huge productivity gains for the global economy and as such are great for economic growth. But the point for our topic at hand is that they are playing a significant role in hiding the true levels of inflation from the numbers reported by our government. Now lets look at some things not included in CPI, and which are not significantly benefitting from Globalization and Technology. Let’s look at the following list: Healthcare, Real Estate, Education, Food, Energy, and Taxes. Hmm, aren’t these pretty important items to consider when trying to figure out how much a dollar is worth these days?

The fact that the cost of these are growing exponentially every year, shows a decline of the dollar that is not reflected in the core CPI numbers. Is it more important that I can get a laptop cheaply or get a higher education at a reasonable price? Also, remember that not all that long ago, most American families were able to get by financially with only one primary breadwinner. Now it is considered a luxury to be able to afford to stay at home rather than have both parents work full-time.

What does that say about the value of a dollar relative to goods and services we need to get by. Perhaps some of this can be explained by us being a good bit more greedy in our idea of what the American dream should be, and our ideas of what an acceptable standard of living is. But some of that difference is certainly reflective of the effects of inflation, effects not accurately reported to us by the CPI.

Ok, hopefully it’s clear to you why I at least believe we should focus on total money supply rather than core CPI when we try to measure inflation. So to review, when you have more dollars, a dollar is worth less and we call this inflation, and when you have less dollars a dollar is worth more (deflation). This is a pretty basic look at the concept and should be easily understood and remembered. In our next article, I’ll add a few wrinkles that complicate the picture slightly, but given us a more complete view.

The Deathly Death Tax

Kris — Thu, 29 Oct 2009 19:23:35 +0000

One of my goals in writing blogs for your viewing pleasure is to bring up issues that may not be often talked about. We all know about healthcare, the current state of the economy, the ongoing War on Terror, and the other various stories that dominate the headlines. One thing you may not know about is that when you die, the government will cease nearly half of your assets that you plan to give away. This includes investments in the market, houses, cars, cash, or any type of personal or business asset that you plan to pass on.

In practical terms, if you plan on leaving $200,000 to someone when you die, that person will only get about $100,000. The government takes the rest. So, a hundred thousand dollars that you have spent your life accumulating is gone. This is money that you have saved/invested that has already been taxed by the government. This, ladies and gentlemen, is what we call double taxation.

The IRS defines the “Federal Estate Tax” (aka death tax) as “a tax on your right to transfer property at your death.” Basically, the government believes that they have an equal right to your assets after your death as your next of kin even though you have put in the hard work to accumulate the wealth and pass it along.

The reason this is an issue that is beginning to get attention is 2010 is a year that will be free of the death tax. Beginning 12:00 AM January 1, 2010 and ending 11:59 PM December 31, 2010 there will be zero estate tax. Beginning January 1, 2011 the death tax will be reinstated at 55%.

Economic Growth Tax Reduction and Reconciliation Act

Calendar Year	Estate Tax Exemption	Rate
2002	$1,000,000	50%
2003	$1,000,000	49%
2004	$1,500,000	48%
2005	$1,500,000	47%
2006	$2,000,000	46%
2007	$2,000,000	45%
2008	$2,000,000	45%
2009	$3,500,000	45%
2010	Tax Repealed	0%
2011	$1,000,000	55%

*source http://www.nodeathtax.org/deathtax/currentfight

Depending on what you know about the death tax, you may know that former President George W. Bush signed legislation that decreased the death tax from 55% to 45% as a part of his “Bush Tax Cuts.” Speaker of the House Nancy Pelosi and Senator Harry Reid wish to keep the death tax permanent at 55% once it is reinstated in 2011. 55% tax! On money that has already been taxed!

David and I wrote recently about the fairness of the FairTax as well as the immorality of the income tax. The death tax is an issue that I believe is both immoral and unfair. I believe that taxing income a second time that has been saved with the intent to benefit a loved one is wrong. Passing on assets to loved ones is a right that hard-working individuals have more than earned.

If you don’t know about the death tax and how it could affect you and your family, check out nodeathtax.org. There you can learn about the tax itself, the history, and how you can help further the cause to repeal the death tax permanently. Oh, and just in case you were wondering, the death tax would be permanently repealed through the passing of specific legislation or through implementation of the FairTax.

Matt Costa

Peter Blane — Wed, 28 Oct 2009 05:09:54 +0000

That title is funny to me because Matt Costa wrote a song called “Sunshine“. The reason that I think it’s funny is because Senate bill 604 is referred to as the Sunshine Act (or the Transparency Act in the House of Reps – 1207).

If you’re not familiar with Ron Paul, you may not be aware there is actually a representative in Washington D.C. not acting like a child with our money. Ron Paul presented H.R. 1207 to Congress proposing to audit the Federal Reserve:

The crucial issue of Federal Reserve transparency requires an analysis of 31 USC 714, the section of US Code which establishes that the Federal Reserve may be audited by the Government Accountability Office (GAO), but which simultaneously severely restricts what the GAO may in fact audit.

Currently the Government Accountability Office (GAO) is supposed to do the auditing of the Federal Reserve. The GAO has some limitations, and, thus, cannot report or keep track of any of the following:

transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations

transactions made under the direction of the Federal Open Market Committee; or

a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection of US Code.

So, if this Sunshine Act were to be passed, the Federal Reserve would be audited on the above 4 points for THE FIRST TIME EVER. Check out the below video. The Federal Reserve can’t seem to keep track of any of our money. If you listen, Elizabeth Coleman essentially denies her job description. Try and make it through this 5 minute clip without getting mad.

Alan Grayson (D-FA) questions Federal Reserve Inspector General

Obama’s Fox Hunt

Laura Ashley — Tue, 27 Oct 2009 03:43:50 +0000

Obama’s Fox Hunt

By: Laura-Ashley

10/27/09

The Obama administration officially launched its own “War on Terror,” against Fox News On Friday, October 23 for “not rendering its coverage and the fairness of that coverage fair,” stated Robert Gibbs, White House Press Secretary in an interview conducted by ABC’s, Jake Tapper. Source

The New York Times reported that Anita Dunn, White House Communications Director said that Fox news is “undertaking a war against Barrack Obama… we don’t need to pretend that this is the way that legitimate news organizations behave.” - NY Times

The White House’s plans to “treat [Fox] the way we would treat an opponent” by excluding them from the opportunity to conduct interviews with officials as a member of the press pool. Source (The press pool is made of the following networks: ABC, CBS, CNN and NBC.)

Fox news’ response? The highly controversial Bill O’Rielly responded, “There is something very disturbing about the Obama administration fighting harder against Fox News than against the Taliban.” Fox news executives further commented, “The administration is failing to distinguish between their commentators and news programs.” – LA Times

Since becoming Obama’s public enemy #1, the network has flourished. Not only do they have a wealth of new and very personal material, but higher ratings as well. “Taking on a 8% audience increase than previous two weeks.” – LA Times

Sources:

“Fox’s Volley With Obama Intensifying” NY Times

“Battle Between the White House and Fox News” NY Times

“Unprecedented: White House Tries to Ban Fox From Press Pool” Propeller

“Fox News Relishes Obama Administration Scorn” LA Times

White House Blog

The Immorality of the Income Tax

David Blane — Mon, 26 Oct 2009 19:41:29 +0000

“The Immorality of the Income Tax”

This is a follow up article to Kris’ “Is the Fair Tax really fair?”

Why do we bother to justify the income tax? Who proved it to us to be a necessity? Everyone pretty much hates April 15^th, but not everyone is willing to invest in a way to balance a national budget. When you owe a debt for a service or product, do you wait for yourself to get paid before you pay back those whom you owe for that service or product? Maybe you just can’t afford to pay it back right now. Or maybe it would be more convenient to pay it back at a later time. Basically, this is our federal governments (The I.R.S., congress, current administration, federal reserve, etc…) version of a healthy and sustained economically country; where the basis of spending for such things as national security, is that of debt and (ironically and arguably) a sacrifice of our freedoms as a country.

Now, lets not get carried away. Do we know and accept that governments, like any human based entity, will try to sustain itself at all costs? It is unfortunate we don’t take this as seriously as it is. Without getting into the specifics of exactly how and why federal government has developed in to this monster, for time’s sake. Suffice it to say, it takes the correct knowledge, perspective and courage as a people to correct a republics mistakes through democratic means.

Why is this current system immoral? Because the government has lost its accountability to its people and the people let it fool them. Instead of addressing issues that look out for the interest of the people, our government threatens its people until surrender. In one instance it could be that homeland security needs to access to everyone’s personal record so they can spy on one person, then threatening, “You don’t want to be blown up in a terrorist attack, do you?” After 9-11, I personally thought about what I am scared of and what it means to be “safe.” Basically government’s solution to our anxieties about being scared is equivalent to suicidal person being chained to their bed. The so-called “solution” doesn’t solve the problem; it just keeps ANYTHING from happening at all.

Lets back up. At one point, it was found necessary to go into debt. As a result three was the “necessity” for an income tax to repay our debt so we could have a financially stable economy. After seeing how easily the public went along with the income tax the more government could come up with “problems” to solve. In current times examples of this would be the bailout, the h1n1 scare, the war in iraq, and so on. This is a never-ending cycle. To clarify, spending to fix problem, taxing to resolve debt, and distracting us from repaying the debt by finding new problems and so on.

If you were to borrow money from your friend to buy a car so you could work, then took the money from work and decided that for your own good you need to invest in a place to live, do you think your friend would be happy with this? You might argue, well this is too simple to compare to government’s practices. Well I say, NO it is not. A system in which immoral acts are permitted does not exempt from anything from acting morally just because it is too complex to address morality easily. In fact, if you can’t understand something why would you instinctively trust that it is moral? You shouldn’t.

A cyclical immoral system like the one we have is an addiction to easiness. There is only one way to cure an addiction and that is to STOP.

The Mafia is Alive

Kris — Thu, 22 Oct 2009 13:26:07 +0000

If you are like me, you spend your news-seeking time looking for stories outside of the norm. There are too many stories now-a-days that center around the same media driven topics that we lose sight of some of the more interesting stories. I think the best stories are the ones that most people have never heard of.

Take Se mion Yudkovich Mogilevich, otherwise known as the head of the Russian Mafia, for example. I am sure many of you have heard of this man before, but I had not. I came across an interesting story while scouring CNN.com that I found incredibly intriguing. The Wikipedia bio on this guy is unreal. This self-made billionaire literally has his hands in every type of crime activity you can think of.

Now, I found myself asking… myself… “Self, why has there always been an obsession with the Mafia?” One of my favorite genres of movies is gangster movies. I love watching Johnny Depp and Al Pacino in Donnie Brasco or De Niro and Pesci in Casino. No matter how many times I see Goodfellas come on TV I still watch a snippet. The answer to the aforementioned question from above is simple. The answer is power. When people have power we take notice.When people have power that no man should have we tend to admire.

Mogilevich’s status as a mobster can be summized in a quote by FBI Special Agent Mike Dixon.

“He’s a big man. He’s a very powerful man. I think more powerful than a John Gotti would be, because he has the ability to influence nations. Gotti never reached that stature.”

You may know John Gotti as the head of the Gambino Crime family. He passed in 2002 and is perhaps the most recent in a long line of famous Mobsters.

Hollywood has helped mold us to admire the mobsters that are portrayed in movies. But I think Mogilevich deserves more than admiration. He deserves fear. This is a man who, according to FBI Agent Peter Kowenhoven “can, with a telephone call and order, affect the global economy.”A man who can affect the global economy deserves a little more news coverage than Balloon Boy, don’t ya think? Read up about this guy if you haven’t already and ask yourself why we admire gangsters who do the types of things this man does.

In Lieu of Economic Recovery

Peter Blane — Wed, 21 Oct 2009 13:59:57 +0000

I thought it would be timely to post a blog entry I wrote on October 8th (2009) in light of the last article I wrote asking how the markets are “recovering” with rising unemployment and record setting mortgage deliquiencies.

Peter Schiff continues to put to words what I cannot.

“For those market boosters who are prattling on about the possibility of a “jobless recovery,” I offer an invitation to join me for a breakfast of “fat-free bacon,” “eggless omelets,” and “no-carb bread.” As unappetizing as such a meal may sound, it would nevertheless offer more substance than the oxymoronic concept of an economic resurgence without job creation.”

Are we going to recover soon? This guy doesn’t think so

“The U.S. economy is starting on its second dive into a deflationary spiral, towards what could be labeled as a new great (global) depression.”

Peter Schiff mentions that a recovery without new jobs is a false recovery. Here’s what the WallStreet Journal reports:

“Unemployment in the U.S. threatens to slow — and some fear derail — the economy’s recovery from recession.”

Highly Offensive

Laura Ashley — Tue, 20 Oct 2009 04:00:33 +0000

I am not amused!

“Highly Offensive.”

Oct. 20, 2009

By: Laura Ashley

Our country is founded upon freedoms, but those freedoms are only boundless until a certain measure. And that measure is based upon the well being of others and… someone else’s feelings?

We’ve heard it all before: “that material is just offensive,” “I found it highly offensive,” and “that’s offensive.” It seems that there is always someone, somewhere, who is somehow offended by something.

How did America get to this point? The point where we can say whatever we want, do whatever we want and display whatever we want, unless it’s offensive to someone else. I don’t remember reading that clause in the bill of rights.

Now granted, ethically speaking, our children must be protected from elements that may be deemed harmful to their well-being or to the rate of a healthy and “appropriate maturation.” As well as, any other propaganda that promotes hate, racism or seeks to harm the mental and physical well being of others. I believe these two conditions may be the only two conditions all Americans can agree upon.

However, symbols are just symbols until we give them meaning. Bad words are only bad words, because we’ve told ourselves these are bad words. What constituent makes sh** more inappropriate than poop? How could it be proven that one was more offensive than the other?

My point is this: individually, we all have the choice to chose whether or not we find something offensive, not the objects themselves.

Removing or limiting the amplitude of an individual’s liberties, because they don’t fit in agreement with ours doesn’t seem like such an accomplishment. Shouldn’t humanity be working toward accommodating individuality not conventionality?