Archive for February, 2011

February 27, 2011

United States Income and Expense for Fiscal Year 2010

It’s good to be right – but I really wish I weren’t! The chart speaks for itself:

image

(Just in case it is too small to read – click to read the source article).

Turns out – it’s not Social Security that is breaking the budget, or earmarks, or spending on crazy things. It’s the fact that we spend a LOT more than we earn. Defense spending, Medicare and Unemployment Insurance are the primary drivers of our spending.

And our income comes mostly from individuals – and the Social Security income funds our current Social Security obligations – so – call it a wash.

 

Income:

ITEM AMOUNT Percentage
Individual income tax $899B 41%
Social insurance tax $865B 40%
Corporate income tax $191B 9%
Other $208B 10%

Expense:

ITEM AMOUNT Percentage
Social Security $707B 20%
Medicare and Federal Medicaid $742B 22%
Unemployment insurance and other entitlements $553B 16%
Defense $694B 20%
More defense $431B 12%
Discretionary one time items $152B 4%
Interest payments $196B 6%

You can see that Social Security gets lumped in with the rest of the “entitlement” programs –and that isn’t accurate. Social Security is funding itself, and while if we don’t’ adjust a bit – we’ll run out of money in oh, 25 years or so – it is very solvent.

I’ll also note that if you consider that individual income tax and at least half of the social insurance tax comes from individuals (about 61%) – it just isn’t true that corporations are footing the United States tax bill. Individuals are.

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February 20, 2011

Unions, Rich People, Civil Discourse and the Budget

How’s THAT for a totally boring title? Here’s the deal:

A couple of years ago, I subscribed to The Economist, a weekly newspaper. They have an admittedly free market slant – that is – they are strong advocates for letting private enterprise function with as little regulation required. At the same time – they like data and they also cover most of the world. So –even though I don’t always agree – I learn a lot.

The first few times they wrote about public sector workers getting getting an unfair or too big slice of the pie – I was annoyed – I didn’t want it to be true. But their data is good – so – it’s hard to argue against that – the cost of public sector wages, benefits and retirement plans have grown at an astonishing rate.

Note: This doesn’t mean that public sector workers aren’t hard workers. And maybe they deserve all of those things – but the question that The Economist poses is “can we afford it?” And the answer is no, we can’t.

I’ve been having an interesting conversation on Facebook – pretty civil, too. I wondered if thinking that the public sector workers in the Wisconsin hoopla should start negotiating (and if wondering if they were getting too good a deal made me a bad human).

Friends who are teachers wrote to talk about how hard they work (and I agree that they work hard). Folks who are in unions wrote to tell me that we have the 40 hour week and other good things because of strong unions (and I agree with that, too).

And other folks wrote about budgets, corporations, taxes and the like. Pretty interesting.

I think (but can’t prove) that there are 4 things that have contributed to the problem – and no one wants to talk about all of them as a piece. Far easier to talk about just one, but not the rest – and I think that leads us to polarization.

1. Huge tax shifts and cuts. I know it seems like we’re paying more in taxes, but we aren’t, at least not to the Federal Government. Tax rates are at an all time low for both individuals and corporations. On top of that – corporations are paying far less than ever. They used to contribute close to 70% of the federal budget, while individuals contributed the rest. That number has been inverted – individuals now supply most of the income to the federal government.

2. Huge wealth transfer. The Economist wrote about this lately – and pretty measured, although I think they also missed the boat. Although they noted that the very wealthiest 1% have far more wealth – they opine that they earned it by being smart and hard working. I agree – but I also know that most of the people they mention had a huge head start. I’m not one of those 1% – but – I went to great public schools, my parents found a way to afford great private high schools and colleges, and I grew up in a place with great roads, transportation, and public services. Those sorts of head starts matter. (I could go on here, too, about executive compensation. There isn’t ANY data to support a correlation between paying a CEO more money and the company performing better. But you can look to those CEO’s when exploring that huge wealth transfer. (Learn more about wealth transfer)

3. Corporations no longer fund pension programs. Oh –there might be a match of 2 or 3 percent. But buy and large –the private sector has shed their pension plans over the last 20 years, because they are expensive. (My gut check says that the funds went to already rich shareholders and those CEO’s – but I don’t have any data to support that. But a look at the gap between the lowest and highest paid worker, over time, tells some of the story. Up until 1960 or so – that gap was generally a factor of 40%. Today, it is well over 500%.

4. We misunderstand Social Security, Medicare, Discretionary and Defense Spending. Social Security (unlike Medicare) is largely solvent. It does need adjusting (up the retirement age a bit and so on) but it is working as intended. Medicare (which I support in theory) is not. It’s an enormous burden on our budget. And defense spending (we spend more in total that the other top 20 spending countries). So when you look at our federal budget – we can only afford 2 or 3 of those large  buckets with the amount of money we have. So – pick your favorite two – we don’t have the cash for the rest.

So – now what? Are teachers, cops, fire fighters, prison guards and City employees overpaid? Getting too much or too little of the pie? Are the top 1% to blame? Military spending? Medicare? Turns out – I think the answer is that ALL of those things are part of the equation. And it would be great if we could all work until we were 55 or so and then retire with a full salary from somewhere. But – doesn’t look like that is possible without adjusting, well – all of these things!

February 12, 2011

Patrick is Getting Particular (about some things)

The hell you say! Hasn’t he been particular for a long time? Like – maybe since birth? You know:

  • Coffee snob: Roasts his own coffee, buys green coffee beans, won’t drink coffee at most public places  because it doesn’t meet his standards.
  • Beer snob: Makes his own beer. Makes jokes about the popular brands, using words like “water”, “lite”, and “better off lighting a couple of dollars on fire”.
  • Scotch snob: Is in a scotch club. ‘Nuff said.
  • Music snob: Out of tune and off pitch is certainly not acceptable.

(okay – on over to first person, singular)

And that’s not all – there’s more. If we’ve worked together, you’ve probably noticed that I’m particular about the how – how things are written, how things are accomplished, how steps are followed.  How a scope of work is created, and what is included. What to tell a customer, a co-worker, a boss.

And if we’ve travelled together, shared a house, or been in a band, you’ll remember that I like things tidy, organized, neat. I have low tolerance for messy (even though I can certainly be a mess, don’t get me wrong). I like to show up early for important things that really have a fixed start time (like weddings, gigs, baseball games).

And if we’ve played music together, you’ll know that pitch matters. Knowing your gear matters. Memorizing your lyrics matter. Understanding how the freaking sound system works matters. Understanding how the lights work matters. Tempo matters. And helping load and unload the gear really matters.

(That all sounds terribly rigid, and in many circumstances  – it is. Pick up after yourself, okay? Don’t show up without the tools you need for the job. Don’t over-promise. Practice. That doesn’t mean that there isn’t room for mistakes, mind you. God knows – I’m a champ at mistake making – if they gave out medals for that, I’d have gold. But you get what I mean here, right? Making a mistake is different than not caring, than showing up un-prepared, than not caring to learn).

And yet – I’m also starting to become LESS particular about a lot of things, too. It’s almost like I’ve spent the first half of my life becoming particular, and in the 2nd half – shedding some of those things. (If the actuaries are right – I’m just past the middle – they think I’ll make it to 77.4, but I think I’ll beat that. Please don’t tell my life insurance company – I plan on them having to pay out in spades!)

For instance – my sense of faith and spirituality was quite particular. I grew up Catholic, and in an era and area largely devoid of some of the crappy things the Catholic church had to offer.

But in the last bunch of years – I’ve become much less particular about faith, religion, spirituality – (even if I discount the exceptionally bad behavior of the Catholic church in the last decade).

You may know what I mean – I used to love to play music at church, to understand the various theological jumping off points for this and that – and now – not so much. My metric has changed to a pretty simple one: Whatever your sense of spirituality, or your faith community – as long as it includes rather than excludes – live and be well. The rest no longer matters to me.

And I’m feeling less particular about people, too. Want to put ice in your single malt scotch? Water down your coffee? Guzzle a PBR? Get right to it – I may choose other things – but you certainly don’t have to.

And ditto for politics (at least in general). Provided you’re willing to start with details, are willing to look at more than a single data source – I don’t give a flip if you are conservative, liberal, or something else. I do care that we can have a conversation, that we can learn from each other, that we can disagree politely (but only after we’ve agreed to the facts, mind you. And we CAN agree to the facts. It might take some research and we might have to change our minds – but that’s a good thing).

S0 – we’ll see. Will I become more particular, or less? I can’t say for sure, but it will be fun finding out!