obama

Obama on Jobs: Created 0, Lost 2.5 Million

/ L. M. Walker / Leave a comment

Jobs Created, Saved, Recovered or Just Lost?

~ By: Larry Walker, Jr. ~

Hours after the White House received a disappointing jobs report, Barack Obama told autoworkers at a Chrysler Fiat Plant in Ohio that, “Even though the economy is growing, even though it’s created more than 2 million jobs over the past 15 months, we still face some tough times. We still face some challenges. There are still some headwinds that are coming at us. Lately, it’s been high gas prices that have caused a lot of hardship for a lot of working families. And then you have the economic disruptions following the tragedy in Japan.”

So his latest excuses are high gas prices, and the tragedy in Japan, neither of which were a problem for Obama when the March and April jobs reports were more favorable. First of all, Japan was hit with a tsunami on March 11, 2011, and the crisis over there has nothing to do with job creation or economic growth in the United States. Secondly, gasoline prices have been on the rise since February of 2009, primarily due to a decline in the value of the dollar. And the decline in the value of the dollar is primarily due to the federal government’s padding of the money supply to cover its out-of-control spending.

On the same day, the Italian automaker Fiat SpA agreed to purchase the U.S. Treasury’s remaining 6 percent interest in Chrysler for $500 million. This gives Fiat a 52 percent stake, otherwise known as the controlling interest, in Chrysler. Although Obama has spoken negatively of US companies that open plants overseas, he just sold the taxpayer bailed-out automaker to Italy. Nice going chief.

Even more troubling is Obama’s statement regarding jobs. He said that the economy has “created more than 2 million jobs over the past 15 months”. Which economy was that, the global economy, or the U.S. economy? According to data provided by the U.S. Bureau of Labor Statistics, the economy has lost nearly 7 million jobs since the recession began in December of 2007, and 2.5 million of those jobs have been lost since February of 2009. Did I miss some sort of fundamental transformation of the definition of words, or something?

A more appropriate statement by Obama would have been to say to autoworkers at the old Chrysler Plant that, “I’m sorry I sold you guys out to an Italian automaker, but what can I say, we needed the money. The economy has shrunk further under my presidency. Even though the recession officially ended in June of 2009, the economy has lost around 2.5 million jobs since I became president, which brings the total number of jobs lost since the recession began, in December of 2007, to around 7 million. I now understand that I have been leading this nation in the wrong direction, so my plan is to bring in a new group of advisors who have a better understanding of how the American economy works.” But instead, what we heard was more of the same.

Perhaps Obama would do well to heed the words of Abraham Lincoln who once stated, “I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.” Obama has yet to bring us the real facts. Everything he says is biased in a way to make it appear as though he has accomplished something great, when in reality his policies are not even capable of fostering economic growth.

Created, Saved, or Recovered?

The word ‘created’ means to originate. Jobs are created when new jobs are added on top of existing ones. After a jobs market goes into recession (a period of sustained job losses), it enters into a state of recovery in which jobs that were lost are recovered. Once the jobs that were lost have been recovered then any additional jobs added are considered to have been created.

The word ‘saved’ means to preserve or guard from injury, destruction, or loss. Jobs are saved when they are prevented from being lost such as through the automotive industry bailouts. If one can prove that (x) number of jobs would have been lost but for some kind of intervention, then one can make the case that those jobs were indeed saved.

Then we come to that elusive word ‘recovered’. The word recovered means to get back, regain, or to return to a normal condition. Since the Great Recession began in December of 2007, the U.S. economy has lost nearly 7 million jobs. Once those 7 million jobs have been recovered, and only then, can Obama, or any other politician, start talking to us about the number of jobs created.

The Real Facts

To be precise, since the recession began, we have lost 6,493,000 according to the Bureau of Labor Statistics (BLS) Household Data, or 6,940,000 according to BLS Establishment Data. And that’s including Obama’s alleged creation of “more than 2 million jobs in the last 15 months”. In reality, the economy has merely recovered 1,081,000 jobs in the last 15 months according to BLS Household Data, or 1,797,000 according to BLS Establishment Data, neither of which exceeds 2 million. And further, since February of 2009, the month after Obama’s inauguration, the economy has lost a total of 2,422,000 per BLS Household Data, or 2,520,000 per BLS Establishment Data. In other words, we are a long way from a jobs recovery, and a lot further away from job creation.

From Employment Statistics May 2011
From Employment Statistics May 2011

As indicated in the chart below, per BLS Table A-1, when the recession began in December of 2007, there were 4,659,000 American workers not counted as part of the labor force who wanted jobs, and another 7,664,000 who were counted as part of the labor force and unemployed, bringing total number of unemployed persons to 12,323,000. As of May of 2011, there were 6,227,000 American workers not counted as part of the labor force who wanted jobs, and another 13,914,000 who were counted as part of the labor force and unemployed, bringing total number of unemployed persons to 20,141,000. That means there are 20,141,000 Americans, or 7,818,000 more than the pre-recession level, literally sitting on the sidelines waiting for “change you can believe in”.

From Employment Statistics May 2011

As indicated in the chart below, per BLS Table B-1, at the beginning of the recession 137,963,000 Americans were employed. By February of 2009, the number had fallen to 132,837,000. When the recession ended, in June of 2009, the number had fallen further to 130,493,000. As of May of 2011, the preliminary number of employed Americans stands at 131,043,000. No matter how you slice it, not one job has been created during the Obama presidency. Although it’s true that some jobs have been recovered since the trough, the number of jobs has declined by 2,520,000 since Obama’s inauguration.

From Employment Statistics May 2011

References:

Images, Data 2, Data 3

Point of No Return | National Debt Tops Personal Income

/ L. M. Walker / 2 Comments

Warning - No Return

~ By: Larry Walker, Jr. ~

For the first time since World War II, the National Debt of the United States has exceeded personal income, on a per capita basis. The point of no return was breached in 2010, during Barack Obama’s second year in office, and the derangement continues to spin hopelessly out of control. This means that every dollar earned by an American citizen is now owned by the federal government, and then some. That’s right, the average annual income of most working-class Americans now belongs to the federal government. The warning of Thomas Jefferson has come to pass, “A government big enough to give you everything you want, is big enough to take away everything you have.”

Meanwhile, no senators voted for Barack Obama’s 2012 budget when it came up for a vote in the Senate on Wednesday. A procedural vote to move forward on the president’s plan failed 0 – 97, proving that Obama is basically a lame duck president, with no viable plan for resolving the government-manufactured fiscal crisis.

Historical Per Capita National Debt, Personal Income and GDP

In the year 1929, per capita personal income was $697, while each citizen’s portion of the national debt was $139. The federal government’s debt represented just 16.3% of gross domestic product, and 19.9% of personal income. Although not incurring any national debt at all would have been ideal, the percentage of debt to personal income was at least somewhat bearable back in the day; but this was about to change for the worse.

From Point of No Return

The point where a citizen’s per capita share of the national debt exceeded personal income first occurred at the height of World War II. In 1944, per capita personal income was $1,199, while each citizen’s share of the national debt reached $1,452. At the time, the national debt represented 91.5% of gross domestic product and 121.1% of personal income, on a per capita basis. Per capita national debt would continue to exceed personal income through the end of 1950, five years after the end of the war.

From Point of No Return

The point of no return was decisively breached in the year 2010 (see chart above). Although per capita personal income had grown to $40,441, each citizen’s portion of the national debt soared to $43,732. The national debt represented 92.5% of gross domestic product and 108.1% of personal income, on a per capita basis. The situation has worsened through the end of the first quarter of 2011 with per capita personal income of $41,486, versus per capita national debt of $45,782. Through March of 2011, the national debt now represents 95.1% of gross domestic product and 110.4% of personal income, on a per capita basis.

[In contrast, at the end of 2008 per capita personal income stood at $40,469, while each citizen’s share of the national debt was $32,886. In 2008, the national debt represented 69.8% of GDP and 80.9% of personal income, on a per capita basis. Although the United States government was dangerously close in 2008, it had not yet surpassed the point of no return.]

This might not be as big of a deal if the United States ever paid down its debt, but I can only find six years since 1929 where this actually occurred – 1930, 1947, 1948, 1951, 1956, and 1957. There is no chance of fiscal recovery with a president who, in the face of financial disaster, dares to submit a budget containing multi-trillion dollar per year deficits into the future. Until the right leadership is in place, you, I, our children and our grandchildren can look forward to living in a nation which basically owns us. Is this the same Republic that we inherited from our forefathers? I think, not.

Barack Obama has taken this nation in precisely the wrong direction; he has taken us beyond the point of no return. Yet there is still hope, but such hope, of necessity, lies beyond the realm of partisan politicians. Faith without works is dead. This isn’t World War II. It’s time to dramatically reduce the federal government’s footprint. It’s time to cut government spending. It’s time to lower (not raise) the debt ceiling. Tomorrow will be too late.

References:

Rejected! Senate Votes Unanimously To Ignore Obama’s Budget

Treasury Direct: Historical Debt Outstanding – Annual

Treasury Direct: Debt to the Penny through 3/31/11

Bureau of Economic Analysis: Table 7.1. Selected Per Capita Product and Income Series in Current Dollars (A)

Data Tables:

From Point of No Return

Link to All Data Tables and Charts

Link to Original Excel Spreadsheet

Real Per Capita GDP Declines on Obama’s Watch

/ L. M. Walker / Leave a comment

slacker

~ By: Larry Walker, Jr. ~

According to the latest report from the Bureau of Economic Analysis, real gross domestic product increased at an annual rate of 1.8% in the first quarter of 2011. But by now most of us understand that this is merely calculated by measuring an increase of roughly 0.45 percent from the fourth quarter of 2010 to the first quarter of 2011, and then multiplying the result by four (.045 * 4 = 1.8). That’s all well and good, but it doesn’t necessarily tell us the truth. What most of us really want to know is the annual rate of GDP growth since Obama’s policies were implemented, and how that compares to the previous administration. To arrive at the answer, one must first measure the annual rate of GDP growth from the time Obama took ownership of the economy, and then compare this to the previous rate. In terms of real (i.e. inflation-adjusted) per capita (i.e. population-adjusted) GDP, the U.S. economy has declined at an annual rate of -0.29% since 2008, as compared to an annual growth rate of 1.15% during the eight-years prior. That’s a decline of 396.5% for the mathematically inclined.

Real Gross Domestic Product: 2009 through 2011-1

The table below shows that real GDP grew at an annual rate of 0.71% from the end of 2008 through the first quarter of 2011. During the same period, personal consumption increased at an annual rate of 1.06%, private investment declined at an annual rate of -3.63%, net exports increased at an annual rate 9.2%, and government consumption increased at an annual rate of 0.74%.

Real Gross Domestic Product: 2001 through 2008

As the next table reveals, real GDP grew at an annual rate of 2.23% from the end of 2000 through 2008. During the same period, personal consumption increased at an annual rate of 2.72%, private investment declined at an annual rate of -0.08%, net exports declined at an annual rate -1.45%, and government consumption increased at an annual rate of 2.41%.

Definitions and Comparisons

Real Gross Domestic Product (GDP)

Gross Domestic Product is comprised of four components, personal consumption, gross private investment, government expenditures, and net exports [GDP = C + I + G + (X – M)]. Under Obama’s policies, real GDP has grown at an annual rate of 0.71% as compared to an annual rate of 2.23% during the previous eight-year period. In other words, GDP grew 214.1% faster in the eight-years before Obama. During the previous administration, an annual growth rate of 2.23% wasn’t bad considering the economy went through one of the worst recessions since the Great One. So exactly how can an annual growth rate of 0.71% be called a recovery? Now let’s compare all four components of GDP.

Personal Consumption (C)

Personal consumption is the largest component of GDP. Personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services. For example, expenditures on rent, food, clothing, tobacco, alcohol, jewelry, gasoline, computers, cellular phones, and medical expenses are included, while the purchase of a new home is not. Real personal consumption is currently slumping along at an annual growth rate of 1.06% versus 2.72% before Obama. In other words, personal consumption was growing 156.6% faster before Obama’s fundamental transformation. All of the federal governments deficit-financed spending on unemployment benefits and food stamps doesn’t appear to be doing the trick after all.

Gross Private Investment (I)

Gross private investment includes business investments such as construction of new facilities, purchases of software, and purchases of machinery and equipment. Personal spending on new homes is also included. Real gross private investment has declined at an annual rate of -3.63% under Obama’s leadership, versus a marginal decline of -0.08% previously. In other words, real gross private investment has slowed by -4,437.5% since Obama implemented his vision for America. What does that tell you? It tells me that the business community lacks confidence in the direction our nation is heading. For example, Obama’s policies of hindering new oil drilling, and seeking to end tax deductions which encourage expansion of the U.S. oil and gas industry won’t exactly translate into any improvement in private investment for the near future.

Government Consumption Expenditures and Gross Investment (G)

Government spending is the sum of government expenditures on final goods and services such as salaries of public servants, purchases of weapons for the military, and any investment expenditure by the federal, and state or local governments. It does not include transfer payments, such as social security, welfare, food stamps or unemployment benefits. Real government consumption is presently growing at an annual rate of 0.74% as compared to an annual rate of 2.41% before Obama. In other words, although the Obama administration has added almost as much to the national debt in the last two-and-a-quarter years as was added in the previous eight, government spending under the previous administration actually added 225.7% more towards economic growth. Perhaps it’s not how much government spends, but rather what it buys. The numbers don’t lie. It’s clear that Obama’s idea of government investment is not the kind that adds anything to our economy.

Net Exports (X – M)

Net exports are the difference between gross exports (what our nation produces in goods and services for other nations’ consumption), and gross imports (what our nation purchases in goods and services from other nations). Imports are subtracted from exports since imported goods are already included in C, I, and G. The only component of GDP with a more favorable result under Obama’s policies is real net exports, which is growing at an annual rate of 9.2% versus a decline of -1.45% in the previous eight years. However, this grand improvement has only added $104.4 billion to real GDP, representing just 0.78% of the total.

Real Per Capita GDP

Of course the best measurement of GDP is found in real per capita results, after all the economy is not static. The effects of population growth combined with inflation can weigh heavily on the economy. The U.S. population has continued to grow at an annual rate of 1.0% since 2000; meanwhile inflation has grown from nearly 0.00% to 3.16% since January of 2009. So let’s see how this combination has affected GDP, disposable personal income, and personal consumption.

As you can see in the tables below, real per capita GDP has declined at an annual rate of -0.29% under Obama’s policies, compared to an annual growth rate of 1.15% in the 8-years prior. Secondly, real per capita disposable personal income has grown at an annual rate of 0.55% versus 1.75% under the previous administration. Finally, real per capita personal consumption has grown at an annual rate of 0.06% versus an annual rate of 1.60% previously. Yet they call this a recovery.

To summarize, real per capita GDP is presently declining at an annual rate of -0.29% versus a positive growth rate of 1.15% under the previous administration. Would you call this an economic expansion? Not hardly. So what’s wrong with the present administration? It acts like it has accomplished something by putting more Americans on unemployment, welfare, and food stamps than ever. It acts like it won’t be satisfied until the last U.S. oil company is run out of business, or until every last local bank, Wal-Mart or McDonald’s franchise is shut down. What will real per capita GDP look like if Obama’s policies are allowed to continue? It’s time to get serious about the matter of peaceful domestic regime change. It’s time for this slacker and his court jesters to go.

Note: Chained-dollar estimates can be used to compute “real” (i.e. inflation-adjusted) rates of growth. However, comparisons of two or more different chained-dollar series must be made with caution, because the prices used as weights in the chained-dollar calculations usually differ from the prices in the reference period, and the resulting chained-dollar values for detailed GDP components usually do not sum to the chained-dollar estimate of GDP or to any intermediate aggregate. In other words, the columns in chained-dollar GDP component columns do not necessarily add up to total GDP, due to rounding differences.

References:

Gross Domestic Product, 1st quarter 2011 (advance estimate)

Bureau of Economic Analysis, Table 1.1.6, Real Gross Domestic Product, Chained Dollars

Bureau of Economic Analysis, Table 7.1, Selected Per Capita Product and Income Series

Inflation reaches 3.16% in April

Obama on Oil | Living a Lie

/ L. M. Walker / Leave a comment

Trust The Lies

“We’re actually producing more oil here than ever.” ~ Barack Obama (05/06/2011) ~

The truth: We are producing fewer barrels of oil here than we did in 1951. ~

Obama would be correct, if our nation was founded in the year 2003. But of course anyone born before 2003 knows that Obama’s statement is – in fact – not true. For those more interested in truth, than in the shallow words of lying politicians, we are actually producing fewer barrels of oil today than we produced in the year 1951, and 42.3% fewer than we produced in 1970.

It’s time to start drilling, and time to stop lying. If Obama won’t do it, then let’s find someone who will.

References (Check the facts):

http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A

http://www.eia.doe.gov/totalenergy/data/monthly/pdf/sec3_3.pdf

We Are All Billionaires Now

/ L. M. Walker / 1 Comment

Big Words Small Mind

Tax Breaks for Millionaires and Billionaires ~

“But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society.” ~ Barack Obama

~ By: Larry Walker, Jr. ~

The Class Warfare Instigator in Chief (CWIC) has been railing against wealth. People who have saved up for retirement, or who were fortunate enough to acquire assets which have appreciated substantially are not impressed. Anyone with half a brain knows that a millionaire (or billionaire) is an individual whose net worth is equal to or exceeds one million (or one billion) units of currency. Net worth refers to an individual’s net economic position. It is calculated by adding the value of all of ones assets minus the value of all of their liabilities. Being a millionaire or billionaire has nothing to do with an individual’s annual taxable income. So when politicians, such as Obama, speak of tax breaks for millionaires and billionaires, do they even know what they’re talking about?

In the United States of America, we don’t pay income taxes based on the value of our net worth. We pay income taxes based on the amount of income earned or produced annually. So where exactly are these so called tax breaks for millionaires and billionaires? I contend that they don’t exist, namely because as I just stated; individuals are not taxed based on their net worth.

At the last count, there were just 412 billionaires in the United States. So the next time Obama refers to “billionaires”, it would be more appropriate for him to refer to them as “the 412 billionaires”. When one studies the IRS’ Statistics of Income reports, the top 400 annual incomes reported on tax returns in 2007 averaged just under $138 million, far short of a billion. Word twisting politicians, namely Obama, would have us believe that there are people making billions of dollars per year, but that’s simply not true. In reality, only 400 households were fortunate enough to report average annual incomes of around $138 million. And as stated, only 412 Americans have a net worth of over a billion dollars. According to the Spectrum Group there were 7.8 million millionaires in the United States in 2009. However, according to a Taylor Nelson Sofres report, half of all millionaire households in the US are headed by retirees.

Good luck to Democrats in first identifying tax breaks that benefit people with net worth’s of over $1 million (or $1 billion). They don’t exist. And secondly, since more than half of millionaire households are headed by retirees, most likely the only taxable income they receive is from pensions and investment income (a healthy chunk of that being tax-exempt). So does Obama want to raise taxes on grandpa? You mean to say that when people work hard all their lives and save up more than a million dollars for retirement, now that they have become millionaires they are evil and deserve to pay higher taxes? Get out of town, literally.

So is Obama talking about increasing taxes on investment income? Is he talking about doing away with tax-exempt interest? Does he want to get rid of the favorable capital gains rates? Does he intend to impose a tax based on unearned income (the amount of equity a citizen has in assets on a given date)? Or is he talking about re-imposing confiscatory death taxes? Say what you mean, and mean what you say, otherwise shut the hell up. It’s time to stop inciting envy, strife and class-warfare. On the other hand, if all Obama is trying to say, and rather poorly, is that he wants to lower the top tax bracket down to $250,000 and raise marginal tax rates to 39.6% above that amount (i.e. return to the 1993 tax rate schedules), then he should just continue to say that like a broken record until his demise.

I think I understand what Obama is really saying. What he’s saying to me is that since $250,000 is to $1 billion as $25,000 is to $100 million, if you make $25,000 per year, you’re a billionaire. Got it? That seems to be how Obama, sleepy Joe, and the 143 Democrats in Congress see it. With 535 members of Congress, and only 143 of them Democrats, how are they controlling this conversation anyway? After all, there are 311,174,158 citizens, only 412 billionaires, 7.8 million millionaires, and a mere 145 delusional Democrats in DC. Perhaps one of these 145 simpletons can list for the public all of the alleged tax breaks for millionaires and billionaires. I will attempt to identify a few of them presently.

Alternative Minimum Tax (reference)

The Alternative Minimum Tax attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. The AMT provides an alternative set of rules for calculating your income tax. In general, these rules should determine the minimum amount of tax that someone with your income should be required to pay. If your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax.

Tax laws provide tax benefits for certain kinds of income and allow special deductions and credits for certain expenses. These benefits can drastically reduce some taxpayers’ tax obligations. Congress created the AMT in 1969, targeting higher-income taxpayers who could claim so many deductions they owed little or no income tax. Because the AMT is not indexed for inflation, a growing number of middle-income taxpayers are discovering they are subject to the AMT.

You may have to pay the AMT if your taxable income for regular tax purposes plus any adjustments and preference items that apply to you are more than the AMT exemption amount.

The AMT exemption amounts are set by law for each filing status. For tax year 2010, Congress raised the AMT exemption amounts to the following levels:

  • $72,450 for a married couple filing a joint return and qualifying widows and widowers;

  • $47,450 for singles and heads of household;

  • $36,225 for a married person filing separately.

  • The minimum AMT exemption amount for a child whose unearned income is taxed at the parents’ tax rate has increased to $6,700 for 2010.

Do the AMT exemption amounts (above) look like they’re targeting millionaires and billionaires to you? It doesn’t look that way to me. Not unless, like I said from the beginning, “we are all billionaires”. So just what kind of items can trigger the AMT? Here are a few.

Personal Exemptions – What? Believe it or not, personal exemptions contribute to AMT liability. The exemptions you claim for yourself, your spouse and your dependents are not allowed when calculating alternative minimum tax. It’s pretty rare (though not impossible) to see a tax return where someone had to pay AMT solely because of their exemptions, but the more exemptions you claim, the more likely it is that you’ll have AMT liability.

Standard Deduction – What? Some 70% of American taxpayers claim the standard deduction (rather than itemizing). The standard deduction isn’t allowed under the AMT. Usually this isn’t a problem because the AMT generally hits people with higher incomes, and these people are more likely to claim itemized deductions. Yet it’s worth noting that a deduction that’s so widely used can contribute to AMT liability.

State and Local Taxes – What? If you itemize, there’s a good chance you claim a deduction for state and local tax, including property tax, income tax and sales tax. These deductions are not allowed under the AMT. If you live in a place where state and local taxes are high, you’re more likely to be subject to the alternative minimum tax.

Interest on Second Mortgages – The AMT allows a deduction for interest on mortgage borrowings used to buy, build or improve your home. If you borrowed against your home for some other purpose, the interest deduction isn’t allowed under the alternative minimum tax.

Medical Expenses – The AMT allows a medical expense deduction, but it’s more limited than the deduction under the regular income tax. If you claim an itemized deduction for medical expenses, part or all of it will be disallowed when you calculate your alternative minimum tax.

Miscellaneous Itemized Deductions – Certain itemized deductions are available if your total deductions in this general category add up to more than 2% of your adjusted gross income. Among the items here are unreimbursed employee expenses, tax preparation fees and many investment expenses. You can’t deduct these items under the AMT, though. A large deduction in this category could lead you to pay alternative minimum tax.

Various Credits – Some of the credits that are allowed when you calculate your regular income tax aren’t allowed when you calculate your AMT. The more credits you claim, the more likely it is that you’ll end up paying alternative minimum tax. Fortunately, Congress has extended relief for the “personal credits” in recent years.

Well, the AMT certainly doesn’t constitute a tax break for millionaires and billionaires. Heck, we’ve barely breached the $75,000 mark if married ($50,000 if single) and most of the main tax breaks have already dissipated. Next!

Retirement Contributions Credit Limitation (reference)

You may be eligible for a tax credit if you make contributions to an employer-sponsored retirement plan or to an individual retirement arrangement. If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a credit of up to $1,000 or up to $2,000 if filing jointly. The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income. However, income limits apply to individuals with a filing status and income of the following amounts:

  • Single, married filing separately, or qualifying widow(er), with income up to $27,750

  • Head of Household with income up to $41,625

  • Married Filing Jointly, with incomes up to $55,500

So if you’re single and make more than $27,750 you can forget about this tax credit. It doesn’t appear that we’ve tapped into those elusive tax breaks for millionaires and billionaires yet. So let’s try again.

Earned Income Tax Credit Limitation (reference)

The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

Tax Year 2010 maximum credit:

  • $5,666 with three or more qualifying children

  • $5,036 with two qualifying children

  • $3,050 with one qualifying child

  • $457 with no qualifying children

Earned Income and adjusted gross income (AGI) must each be less than:

  • $43,352 ($48,362 married filing jointly) with three or more qualifying children

  • $40,363 ($45,373 married filing jointly) with two qualifying children

  • $35,535 ($40,545 married filing jointly) with one qualifying child

  • $13,460 ($18,470 married filing jointly) with no qualifying children

  • Investment income must be $3,100 or less for the year.

So much for tax breaks for millionaires and billionaires. There don’t appear to be many real breaks for folks making even $50,000 per year. Shall we try again?

Mortgage Interest Limitation (reference)

Interest deductions on home mortgages are limited. The law allows taxpayers to deduct interest on two categories of indebtedness secured by their residences. Acquisition indebtedness is used to acquire, construct, or substantially improve a residence, and cannot exceed $1,000,000. Home equity indebtedness is any debt other than acquisition indebtedness and cannot exceed $100,000.

So if you are lucky enough to be able to borrow more than $1 million on a mortgage, you cannot deduct any mortgage interest for the amount above $1 million. And if you have a home equity loan of more than $100,000, the amount of interest you can deduct is not allowed for the amount above $100,000. This doesn’t look like a tax break for millionaires and billionaires either. Surely there must be a humongous tax break for rich folks with children.

Child Tax Credit Limitation (reference)

The Child Tax Credit is for people who have a qualifying child under the age of 17. It is in addition to the earned income credit, if you even qualify for that. The maximum amount you can claim for the credit is $1,000 for each qualifying child. However, you must reduce your child tax credit if your modified adjusted gross income (AGI) is above the amount shown below for your filing status.

  • Married filing jointly – $110,000.

  • Single, head of household, or qualifying widow(er) – $75,000.

  • Married filing separately – $55,000.

So if you’re married with children and have income of more than $110,000, you don’t get the full $1,000 child tax credit. Oh well, this isn’t a tax break for so called millionaires and billionaires. Maybe if you borrow a ton of money to invest in a graduate degree you’ll get a huge tax break.

Student Loan Interest Limitation (reference)

You can claim up to $2,500 of student loan interest you paid as an above-the-line tax deduction on Form 1040. What? Does the government even have any idea that some people are paying upwards of $4,000 – $10,000 in student loan interest per year? And do they understand that an above-the-line tax deduction on $2,500 can at the most save an individual or couple 25-28% of the maximum amount? So if you’re married and pay $7,000 in student loan interest, you’ll receive a tax break amounting to between $250 and $700 depending on your tax bracket.

But if your income is too high, you won’t get any break at all. You can take this deduction only if your modified adjusted gross income (AGI) is less than: $75,000 if single, head of household, or qualifying widow(er); or $150,000 if married filing jointly. Oh well, we could go on and on, but so much for that theory.

Conclusion

No one pays income tax based on their net worth. We pay income taxes based on the amount of income we earn or produce each year. The simplistic act of raising the top marginal tax rate from 35% to 39.6%, and lowering the top tax bracket down to $250,000 won’t bring in an extra dime from millionaires and billionaires. Although it will take some money out of the pockets of small businesses, families and other hard working Americans, it will leave true millionaires and billionaires unscathed. There’s a dearth of tax breaks for anyone making more than $75,000 per year, and marginal tax rates are already way too high across the board, so Obama’s comments are simply absurd. Perhaps one of the other 144 Democrat Party simpletons in DC can list for us all of the alleged tax breaks for millionaires and billionaires. But until then, I’m going to have to ask you to muzzle it. Otherwise, prepare to give up your remaining 145 seats.

It’s not the 412 billionaires that worry me; it’s the federal government, $14 trillion in debt, with its hand in my pocket. That makes me queasy.

Libya 2011 | Beyond La Belle, and Lockerbie

/ L. M. Walker / 1 Comment

~ By: Larry Walker, Jr. ~

“Repent, for the kingdom of heaven is near.” ~ Matthew 3:2 ~

The long spell of bitterness between Libya and the United States seems to be related to a territorial dispute going back to the 1970’s. Shortly after Gaddafi came to power in 1969, he declared that the Gulf of Sidra belonged to Libya, and that anyone crossing beyond what he termed, “The Line of Death”, without permission, would invite a military response. That seemed to be a reasonable position to me; after all, there is a certain line that you don’t cross on my property without a problem. But to the leaders of the United States, at the time, it presented a challenge, a sort of double-dog-dare. The U.S. would eventually cross that line for no other reason than to see what Gaddafi would do. This fatal flaw in past American foreign policy has led to a countless loss of human life and property.

So just where is the Gulf of Sidra? It’s right smack between Benghazi and Misrata in Northern Libya (see Map below). Does this look like a part of Libyan territory to you? It sure looks like it to me. It’s definitely not United States territory. How many lives have been lost due to the United States insistence on policing Libya, and the rest of the planet for that matter, over trivial matters like this? I would bet that I’m not the only one that could have given a flip about the Gulf of Sidra, then as now. Yet, if Libya were to send a fleet of armed vessels into the Gulf of Mexico, just off of our Southern coastline, I would venture to say, “there would be hell to pay”. Perhaps it’s time we put ourselves in Gaddafi’s shoes for a moment.

The Gulf of Sidra is a body of water in the Mediterranean Sea on the northern coast of Libya; it is also known as Gulf of Sirte. The Gulf of Sidra has been a major centre for tuna fishing in the Mediterranean for centuries. It gives its name to the city of Sirte situated on its western side. The gulf measures 273 miles (439 km) from east to west, and occupies an area of 22,000 square miles.

After the coup d’etat which brought Muammar Gaddafi to power in 1969, there have been a number of international incidents concerning territorial claims of the Gaddafi regime over the waters of the Gulf of Sidra.

1973 – Gaddafi’s Line of Death

In 1973, Gaddafi claimed much of the Gulf of Sidra to be within Libyan territorial waters by drawing a straight line at 32 degrees, 30 minutes north between a point near Benghazi and the western headland of the gulf at Misrata with an exclusive 62 nautical miles (115 km) fishing zone. Gaddafi declared it The Line of Death, the crossing of which would invite a military response. The United States [in accepting the invitation] claimed its rights to conduct naval operations on international waters, a standard of 12-mile (19 km) territorial limit from a country’s shore. Gaddafi claimed it to be a territorial sea, not just a coastal area. In response the United States authorized naval exercises in the Gulf of Sidra to conduct Freedom of Navigation (FON) operations. On several occasions Libyan fighter planes harassed United States military planes maneuvering in the area.

On March 21, 1973, Libyan fighter planes intercepted and fired on a U.S. Air Force C-130 conducting signals intelligence off the Libyan coast. During the encounter, two Libyan Mirage fighters signaled the C-130 to follow them toward Libya and land, prompting the American plane to take evasive action. The C-130 received cannon fire from the Libyan fighters as it fled but was able to escape by using cloud cover. According to U.S. officials, the American plane was never closer than 75 miles from the Libyan coast.

So the U.S. provoked an incident, just to see how Gaddafi would respond, and then when he responded, we backed down. Didn’t we have better things to do in 1973, like perhaps tackling the looming energy crisis, or overcoming some great humanitarian need? Were human lives really worth the price of conducting Freedom of Navigation Operations in Libya?

Freedom of Navigation Operations (source)

Freedom of Navigation is a principle of customary International Law that, apart from the exceptions provided for in international law, ships flying the flag of any state shall not suffer interference from other states. This right is now also codified as article 87(1)a of the 1982 United Nations Convention on the Law of the Sea. However, not all UN members (notably the United States of America) have ratified this convention.

The United States’ Freedom of Navigation program challenges territorial claims on the world’s oceans and airspace that are considered excessive by the United States, using diplomatic protests and/or by interference. The United States position is an insistence that all nations must obey the international law of the sea as stated by the UN Law of the Sea Convention, though the United States has yet to ratify the treaty. Some coastal states make claims that the United States sees as inconsistent with international law, which, if unchallenged, would limit navigational freedoms of the vessels and aircraft of the U.S. and other countries.

On several occasions, U.S. armed forces have conducted operations in areas claimed by other countries, such as naval operations in the Gulf of Sidra in the 1980s. Throughout the years U.S. forces have been performing “Freedom of Navigation” operations in the Straits of Gibraltar, Strait of Hormuz, Straits of Malacca, the Indonesian Archipelago, the Black Sea, and occasionally the Canadian Arctic.

One of the notable operations conducted as part of Freedom of Navigation program was performed by USS Yorktown, during which, on February 12, 1988 she was “nudged” by Soviet frigate Bezzavetny in an attempt to divert the vessel out of Soviet-claimed territorial waters; some observers have called the event “the last incident of the Cold War.”

So let me get this straight, while I was in junior high and high school, the U.S. government was busy establishing a policy to unilaterally enforce UN laws which the Congress has yet to ratify unto this day. This all looks pretty foolish in retrospect; although I’m sure it was serious business at the time, at least for anyone who actually cared. Apparently for those who did care it was worth putting countless lives in harm’s way. One has to wonder if anyone was really hurt by being prohibited from entering the Gulf of Sidra in the first place. If so, who?

1981 – First Gulf of Sidra Incident

In August 1981, during the United States Sixth Fleet FON exercises, Libyan fighter planes were assembled from elsewhere in the country to fly patrols near the American ships. On August 19 two Libyan Su-22 Fitter fighter-bombers were intercepted by two F-14 Tomcat fighters from the aircraft carrier Nimitz. During the engagement, one of the American planes was targeted by an air-to-air Atoll missile. After evading the missile, both Libyan planes were shot down with Sidewinder missiles launched by the Tomcats. According to some reports, the two Libyan pilots managed to eject and were rescued from the sea. According to other reports, one of the Libyan pilot’s parachutes failed to open.

So after a near miss in the 70s, the U.S. decided to send in more ships for another Freedom of Navigation exercise. It would appear that we had no other reason to be in the Gulf of Sidra other than to provoke some kind of response from Libya. When the response came, a Libyan soldier had to die. But even that wasn’t enough. Somebody needed to be taught the lesson of, “do as I say, or else”.

1986 – 3rd American Provocation (source)

In the spring of 1986, the U.S. Navy deployed three aircraft carrier task force groups, USS America, USS Coral Sea and USS Saratoga from the Sixth Fleet with 225 aircraft and some 30 warships across the “Line of Death” and into the disputed Gulf of Sidra. After a day of armed conflict, the operation was terminated after an unknown number of human and materiel losses to the Libyan side and no losses to the American side.

Two weeks later on April 5, 1986, a bomb exploded in a West Berlin disco, La Belle, killing two American servicemen, a Turkish woman and wounding more than 200 others. The United States claimed to have obtained cable transcripts from Libyan agents in East Germany involved in the attack. After several days of diplomatic talks with European and Arab partners, President Ronald Reagan ordered eighteen F-111F strike aircraft of the 48th Tactical Fighter Wing, flying from RAF Lakenheath supported by four EF-111A Ravens of the 20th Tactical Fighter Wing, from RAF Upper Heyford in England to strike targets in Libya in conjunction with fifteen A-6, A-7, F/A-18 attack aircraft and EA-6B Prowler Electronic Warfare Aircraft from the aircraft carriers USS Saratoga, USS America and USS Coral Sea on station in the Gulf of Sidra. The attack lasted about ten minutes, hitting several targets at 0200 on April 15th. Two American airmen were killed when their plane was shot down over the Gulf of Sidra. Forty-five Libyan soldiers and government officials and fifteen civilians were also killed.

Now there was a brilliant idea, “let’s cross Mad Dog’s Line of Death and see what happens. Then if he fights back, we’ll exact an unknown number of human and material losses upon Libyans, and then withdraw.” And later on, “if he so much as lifts a finger, we’ll take him out.” Great plan! You see, just like today, for some it matters whether the lives lost were military or civilian, but not for me. A human life is a human life. Just because one wears a uniform or a badge doesn’t make their life any less valuable. After all, don’t most soldiers have civilian wives, children, parents and siblings? Why do some then discount the loss of military personnel? That one that you killed was somebody’s son, brother, daughter, sister, father, or mother.

Motive behind the 1988 Lockerbie Bombing (source)

The motive that is generally attributed to Libya’s alleged attack on Pan Am Flight 103 can be traced back to the series of military confrontations with the U.S. Navy that took place in the 1980s in the Gulf of Sidra, which Libya claimed as its territorial waters. First, there was the Gulf of Sidra incident (1981) when two Libyan fighter aircraft were shot down. Then, two Libyan radio ships were sunk in the Gulf of Sidra. Later, on 23 March 1986 a Libyan Navy patrol boat was sunk in the Gulf of Sidra, followed by the sinking of another Libyan vessel on 25 March 1986. The Libyan leader, Muammar al-Gaddafi, was accused of retaliating to these sinkings by ordering the April 1986 bombing of West Berlin nightclub, La Belle, that was frequented by U.S. soldiers and which killed three and injured 230. [Then came the bombing of Pan Am Flight 103.]

Conclusion

The damage that America has inflicted on Libya has been for no good reason. By force, America challenged Libya’s rights to its own territory. The losses suffered by Libya far outweigh any damage done to Americans in retaliation. Yet, some Americans will never be satisfied, because they are unable to see beyond La Belle, and Lockerbie. I mean it’s as if Libya, for no reason whatsoever, allegedly engaged in both of these seeming terrorist acts. Yet there is another view. On the other side of the spectrum, there are those who believe that when America plays the role of an aggressive police state, and in so doing provokes, threatens or damages smaller nations, any retaliation is justified. I’m sorry, but you can’t convince me that the U.S. is without guilt in this matter. The U.S. has engaged in numerous attacks on Libya which have resulted in an unknown number of casualties. Instead of offering Gaddafi a noose, perhaps we should be offering him an apology.

Bringing it up to the conflict of the day, what would the United States government do if a large group of armed protestors suddenly rose up and stormed the U.S. Capitol? Does a government have the right to defend itself? Would the U.S. government use force against some of its own citizens, or would its leaders instead step down? If the U.S. government acted in self-defense against even a handful of its own citizens, would it be right for a 3rd party to intervene by launching a type of Odyssey Dawn upon Washington, DC and U.S. military targets?

Get over it. Some of us really do want to work, live and worship in peace. It’s high time that America mind its own business. It’s time to stop playing God. Let Libya resolve its own conflicts. When Libyans break Libyan laws they must pay the price, just as when Americans breach American laws. If there is a way for America to assist Libya diplomatically, then that should be our goal. However a policy of taking lives in the name of saving others is as reckless as attempting to enforce the unratified United Nations position on freedom of navigation.

Shhhhh! They’re watching. Judgment day is coming.

Addendum : The United States doesn’t recognize the 12 mile limit from its own shores, but believes everyone else must. Meanwhile, the U.S. claims up to 200 miles of the continental shelf as its territory. See – What Goes Around Comes Around: How UNCLOS Ratification Will Herald Europe’s Precautionary Principle as U.S. Law. In other words, unratified means unjustified.

Obama’s Unauthorized War in Libya

/ L. M. Walker / 1 Comment

No Casualties?

How many casualties so far?

~ By: Larry Walker, Jr. ~

So just how many 18-20 year old Libyan soldiers has Obama killed? Or were those tanks, trucks and command centers just empty? Dropping bombs on 18-20 year old Libyan solders, killing them without warning and without a declaration of war is a crime. When our soldiers die in combat, we cringe. Yet when we see young Libyan soldiers die, at our hand, some cheer. CNN even cheered when a rebel suicide bomber drove a truck loaded with explosives into a Libyan army barracks and detonated it, killing hundreds. Libyan soldiers were under the impression that they were protecting their homeland against an internal assault by government protesters in conjunction with foreign terrorists. Libya never declared war on the United States, and no U.S. interests were at risk, so how can this action be justified?

Firing missiles, from miles away, at young Libyan soldiers, who were defending themselves against an internal uprising, killing untold thousands, without authorization, and without a formal declaration of war, is not only cowardly, but in my mind constitutes a war crime punishable by impeachment, if not death.

WAR POWERS RESOLUTION

United States Code: Title 50, CHAPTER 33—(Reference)

§ 1541. Purpose and policy

(a) Congressional declaration

It is the purpose of this chapter to fulfill the intent of the framers of the Constitution of the United States and insure that the collective judgment of both the Congress and the President will apply to the introduction of United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, and to the continued use of such forces in hostilities or in such situations.

(b) Congressional legislative power under necessary and proper clause

Under article I, section 8, of the Constitution, it is specifically provided that the Congress shall have the power to make all laws necessary and proper for carrying into execution, not only its own powers but also all other powers vested by the Constitution in the Government of the United States, or in any department or officer hereof.

(c) Presidential executive power as Commander-in-Chief; limitation

The constitutional powers of the President as Commander-in-Chief to introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, are exercised only pursuant to

(1) a declaration of war,

(2) specific statutory authorization, or

(3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.

Operation Odyssey Dawn is an unauthorized use of military force. There was no formal declaration of war. There is no specific statutory authorization. There was not a national emergency created by an attack upon the United States, its territories or possessions, or its armed forces. Whether you agree with the war in Iraq or not, the use of military force was authorized by Congress – AUTHORIZATION FOR USE OF MILITARY FORCE AGAINST IRAQ RESOLUTION OF 2002.

No matter what justification you may wish to apply to this action, taken solely by the order of Barack Obama, it is a blatant abuse of power for which he should pay the ultimate price. How dare you even mention the words, “the American people”. Neither the American people, nor their representatives have authorized any such involvement in Libya. Obama has murdered thousands of Libyan soldiers on the ground, without authorization from the American people, thus setting us all up for retaliation, by God knows who, at some future date. When it’s all over, and the number of Libyan casualties have been tallied, somebody needs to be held to account by the International Criminal Court (ICC).

Next Libya, then Kenya

/ L. M. Walker / 1 Comment

Obama Cons Gaddafi

~ By: Larry Walker, Jr. ~

For God’s sake, what are we doing in Libya? In the broadest sense, we are helping a group of armed militia (i.e. unlawful combatants) in the overthrow of a sovereign government. More narrowly, we are destroying the defenses of the legitimate leader of Libya, instructing him that he is not allowed to defend himself, cutting off all of his escape routes, blocking all of his communications, and assisting a mob of criminals in his demise. When these violent protesters catch Gaddafi, they will surely decapitate him, and many Americans will cheer, but not me.

News networks like CNN are now praising the martyrdom of a rebel suicide bomber who drove a truck loaded with explosives into a Libyan army barracks and detonated it. But I ask you, “What’s heroic about that?” When a similar group of rebels drove two truck bombs into buildings housing United States and French military forces (October 23, 1983 in Beirut, Lebanon), were you cheering then? If you weren’t cheering then, why are you so giddy now? For the last three decades, terrorist acts were deemed to be the epitome of evil, but now terrorism seems to be in vogue, at least according to today’s hypocrites.

Madder Dogs

Obama has in essence sided with terrorists against an ally in the war on terror. When these terrorists take over and murder their former leader, with Obama’s help, what will become of the two million people who support Gaddafi until the end? Will they suddenly have a change of heart and conform to the will of Obama and his rebels? And if they don’t, will they be thrown into gulags, beheaded, or lined up before firing squads? And if this happens, will America come to their defense, thus starting the vicious cycle over again? Will America ever get it?

What we should have done.

We should have exhausted every means of diplomacy. Going to war should have been the last resort. We should not have responded to Gaddafi’s rhetoric. Just because someone says they’re going to do something, doesn’t mean they will. Surely if anyone understands this, it should be the mis-leader of the not so free world, Barack Gbagbo, oops, I mean Obama. After all, by now he’s made hundreds of statements which have turned out to be nothing more than blatant lies.

And speaking of Laurent Gbagbo, the incumbent president of the Ivory Coast was voted out of office in November of 2010, yet remains in power unto this day. Alassane Ouattara is widely recognized as the winner of the election, yet since his victory, the UN says that 462 people have been violently murdered, and about 500,000 forced from their homes in a post-election dispute. In the Ivory Coast you have a democracy which has been violently usurped by a despot whose original mandate expired on October 30, 2005. It’s ironic that when Gbagbo won his election in October of 2000, he faced the same situation, an incumbent who had to be forcibly removed from power. It seems there will be no end to this ongoing scenario in most of Africa, yet in Libya there was relative stability, until Obama.

If Obama, who has foolishly committed us into the disorder of his homeland, succeeds in ousting Gaddafi, he had better make sure that he kills all 2 million of Gaddafi’s supporters as well. Are you prepared to do that? Otherwise Libya will face the same future as the Ivory Coast, coup after coup, revolution after revolution, and murder after murder. The only thing Obama has accomplished by involving the USA in his God-forsaken homeland is to expose why he was unqualified to be president of the United States in the first place. Don’t talk to me about impeachment unless you fully intend to follow through. The sooner we get rid of Obama, the sooner the World will return to relative stability. The problem is Obama, not Gaddafi. Free Gaddafi! And as for Obama, “go back to Kenya”.

References:

Thousands flee Cote d’Ivoire violence (Video)

Ivorian women protesters killed (Video)

http://www.bbc.co.uk/news/world-africa-12853554

http://en.wikipedia.org/wiki/Laurent_Gbagbo

http://www.latimes.com/news/nationworld/world/la-fg-ivory-coast-chaos-20110325,0,1646566.story?page=1

Future of Libya’s investments in Kenya in “doubt” following political unrest

Libyan rebel commander admits his fighters have al-Qaeda links

Payroll Tax Cut Forsakes the Poor

/ L. M. Walker / Leave a comment

None and Done

Obama’s Phantom Tax Cut

– By: Larry Walker, Jr. –

When Barack Obama signed what was touted by the mainstream media as the middle-class cut bill on December 17, 2010, it was praised as a historic measure which would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.

But first of all, extending last year’s tax rates actually didn’t do anything for anybody (i.e. nothing gained, nothing lost). Secondly, renewing jobless benefits for the long-term unemployed was simply the price we had to pay for a failed $887 billion economic stimulus program. Thirdly, and to the point of this blog post, as far as the one-year cut in Social Security taxes, exactly what does the term “nearly every worker” mean?

Well, just two months after its enactment, tens of thousands of American’s are beginning to find out. Many are noticing that their paychecks are actually smaller than they were last year, while others are seeing just an extra dollar or two per month. In fact, the only ones actually receiving the full 2% payroll tax cut are those making over $70,000 per year. Those making under $20,000 per year are actually ingesting a tax hike.

In an effort to determine why so many folks are complaining, we compared Internal Revenue Service Publication 15, (Circular E) Employer’s Tax Guide, for tax year 2010 to the 2011 publication. Then we created a spreadsheet to compare the differences. What we discovered is that in 2010 the amount of federal income tax withheld from paychecks was lowered, to compensate for the $400 Make Work Pay Credit. But with the expiration of the credit at the end of 2010, income tax withholding tables have been readjusted back to pre-stimulus levels. This adjustment in income tax withholding rates has completely negated the Social Security tax cut for the poor, and greatly reduced its effect on those with moderate incomes.

On its face, the new law lowers the amount of Social Security tax withheld from all paychecks from 6.2% to 4.2%, however not all paychecks are affected equally. Had this tax cut been implemented on its own, it would have been a good thing for all wage earners; however due to the corresponding expiration of the Make Work Pay Credit, the end result favors those making over $70,000 per year, and discriminates against those who earn less. The word on the street is that Obama’s 2% Social Security tax cut is just one more in a series of lies emanating from the White House. If we could impeach a POTUS for lying (or ignorance), Obama would have been impeached 10 times over.

The following calculations are based on the IRS’s monthly percentage method tables for single taxpayers (Table 4). If you’re not convinced, you may always visit www.irs.gov, search for Publication 15, and make your own assessment. But if you don’t want to go through all of that trouble, you can simply compare your latest payroll tax report, or pay stub, to one from last year.

As the table above displays, rather than receiving a tax cut, those making $15,000 per year, or less, are actually receiving at least a 0.68% payroll tax hike. Although this may not have been the Democrat’s intent, this is what he delivered.

According to the table above, those making exactly $20,000 per year are receiving a mere 0.08% tax cut. Wow, that’s a whole $1.13 in tax savings each and every month, leaving many on Main Street in shock and awe. Since those making under $20,000 all got a tax hike, those whose lives have been improved by a buck a month must be so proud of their Democrat saviors.

The next table (above) reveals that although those making $30,000 per year received a bona fide tax cut, it is effectively only 0.88%, or $17.80 per month. I suppose $17.80 per month, which equals $213.60 per year, will have some impact on the economy, but not likely much.

The table above shows that those making $40,000 per year are receiving a 1.48% tax cut. Although it’s not a full 2.0%, the extra $39.07 per month can at least be banked, or perhaps donated to the poor and needy.

As the table above exhibits, those making $50,000 per year are receiving a 1.74% tax cut. Now we’re talking real money, a whole $55.73 per month, although perhaps this would have been more appropriately directed toward those making less than $20,000.

The table above affirms that those making $60,000 per year are now taking home a 1.92% tax cut. It’s getting there, although it’s not quite 2%, an extra $72.40 per month can at least buy some extra food, or pay a bill. Then again, if you’re lucky enough to still have a job paying $60,000 per year under the present regime, how important is an extra $72.40 per month?

Finally as exposed in the last table (above), those making $70,000 per year are picking up the full 2% tax cut and then some (actually 2.15%), a savings of $92.89 per month. The percentage of taxes saved tops out at about the 2% level with the monthly dollar amount continuing to advance up to the $106,800 cap on Social Security wages.

In conclusion, those who needed a diminutive tax cut the least are receiving it the most. It all goes to show that in spite of a far left-wing progressive like Obama, “The rich keep on getting richer while the poor get poorer.” While other countries like China directed payroll tax cuts toward employers, you know, the ones who can actually provide jobs and a real boost to an economy, Obama has blown his 3rd and final chance to get it right. Three strikes and you’re out! Perhaps our next POTUS will be one who not only takes the time to read the bills presented for signature, but one who is actually capable of understanding cause and effect. Obviously, the present White House occupant is a wash. Obama is ‘one and done’, but in terms of American jobs, this could be more effectively expressed as ‘none and done’.

References:

Blindsided | White House Fiscal Lunacy

/ L. M. Walker / 1 Comment

Back in the Ditch

2016 GDP vs. National Debt

– By: Larry Walker, Jr. –

“We will not be adding more to the national debt.” ~ Barack Obama ~

Say what? You must mean that you will not be adding more to your national debt, because I know that I certainly won’t be adding to the national debt, so you need to take the we out of that statement buddy. The real question is how are you going to pay back the trillions of dollars that you have already squandered? And here’s another riddle – What will the U.S.A.’s gross domestic product (GDP) need grow to by the year 2016 in order to keep pace with the present White House occupant’s irrationally exuberant spending spree? And based on the answer to that question, at what annual rate must our economy grow?

If we add the inexperienced CEO’s 2011 to 2016 projected annual budget deficits to fiscal year 2010’s ending national debt balance of $13.6 trillion, then the national debt will equal $19.0 trillion by the year 2016. And you call that “not adding more to the national debt”? So is this guy a pathological liar, or what?

At the end of 2010, the Bureau of Economic Analysis (BEA) reported that gross domestic product (GDP) for the year was $14.6 trillion. So depending on the rate of economic growth over the next 6 years, the national debt may sooner or later exceed GDP. Although even the present White House occupant once stated that the national debt is unsustainable, the question is – as juxtaposed to what? If we take a look back to the days when our debt was sustainable, when the economy was growing at roughly 5% per year with low unemployment, such as in 2003, we will discover that the debt-to-GDP ratio back then was 60.9%. So the question is what do we need to do in order to reduce our debt-to-GDP ratio from its present level of 92.8% back down to 60.9%?

In Scenario #1 (below) we will determine the rate of economic growth necessary in order for GDP to equal our projected debt by the year 2016. In Scenario #2 we will discover the rate of economic growth needed to return to a more healthy debt-to-GDP ratio of 60.9%. Finally, in Scenario #3 we reveal what the debt-to-GDP ratio will be by 2016 if GDP maintains its present growth rate of 3.2% per annum.

Scenario #1 – The budget to nowhere

Gross domestic product must grow from $14.6 to $19.0 trillion in order to equal the National Debt by 2016. In other words, GDP must maintain an average sustained growth rate of 4.5% per year, over the next 6 years, in order to achieve a debt-to-GDP ratio of 100%. This represents ‘the budget to nowhere’. Although, the Bureau of Economic Analysis reports that GDP grew at the rate of 3.2% in the 4th quarter of 2010, as you can deduce, this will not be sufficient to reach the current White House occupant’s pitiful goal of a 100% debt-to-GDP ratio.

Scenario #2 – Back to sanity

In order to return to the more prosperous 2003 debt-to-GDP ratio of 60.9%, GDP must grow at a sustained annual rate of 13.5% over the next 6 years. How likely is this? In order to achieve such a rate of growth, our economy would need to expand at the pace of an emerging market economy, a feat which is hardly doable. This is precisely why the Debt Commission recently stated that we will never grow our way out of this fiscal disaster.

Scenario #3 – Your new reality

Finally, if GDP maintains the present annual growth rate of 3.2%, then our debt-to-GDP ratio will have reached 107.4% by 2016. Welcome to reality, and to a future of bonded labor. This doesn’t look like winning the future to me, it looks more like a donkey in a quagmire.

Conclusion

The present White House occupant’s budget plan leads to disaster. What most of us wanted to hear was a plan for paying off the debt which he alone has run up over the last two years, not more debt evasion. Face it, there is only one way out of this mess. The first thing we need to do is to derail all of this administration’s reckless spending initiatives. Secondly, government spending must be cut, slashed, and cut again. And finally, we must get this fiscally bankrupt pathological liar out of the White House, by any means necessary. By any means necessary. And as far as who will be the next POTUS; throw a dart. While I am not certain about who it will be, I definitely know who will be packing up at the end of 2012, if not sooner.

Sources:

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist01z1.xls

http://www.bea.gov/newsreleases/national/gdp/2011/xls/gdp4q10_adv.xls

http://www.treasurydirect.gov/NP/NPGateway