Truth does matter

“We pay more taxes than anybody else in the world,” said President Trump on August 10, 2017 having said similar statements on more than a few occasions.

“You know this Russia thing with Trump and Russia is a made-up story,” said the President to Lester Holt on May 11, 2017 which he has said on multiple occasions.

The cut in the subsidies will only affect the “gift” to the insurance companies, said the President to his cabinet in October, 2017 when he defunded some ACA subsidies to the companies to repay them for subsidizing co-pays and deductibles for people making less than 2 1/2 times the poverty limit. He used variations of this theme on several occasions to defend his cuts to financial help to those in need.

The two common threads of these statements are they are all lies and were uttered consistently by Donald Trump. Yet, this should not be a shock to anyone as the man has a hard time telling the truth.

Per Politifacts, on 483 measured statements by the President, 69% of the time they were either mostly false, false or pants-on-fire false. In other words, more than 2 out of 3 statements he makes or tweets should not be considered as true.

In a fairly recent interview with The New York Times, the reporters measured the President averaged lying every 75 seconds. The Washington Post counted 1,950 false or misstated claims in his first 347 days. This is consistent with statements made by his five biographers who note Trump has a hard time with the truth.

But this is not news to most Americans per a Quinnipiac Survey. The survey said 62% of Americans do not think Trump is honest. And, in a University of Missouri Journalism survey, the President was listed in the bottom ten of trustworthy news sources, meaning the ten least trusted sources.

The truth matters. The Russia thing is real, whether it links directly to Trump or not, as intelligence officials say he is at minimum an unwitting participant in the meddling. In fact, General Barry McCaffrey, the most decorated retired four star general said this weekend that the President is a “serious threat to national security,” based on his adoring view of Putin.

On the taxes comment, we just reduced taxes with this lie laying groundwork. We are increasing our debt by $1.5 trillion to try to make a pretty good economy even better. On the health care subsidies, this lie covered for a change that will increase our debt by $10 billion meaning it impacts taxpayers as well as non-subsidized premium payers, not insurers.

Our problems are complex and they are hard enough to solve when we deal with the truth. When our leader lies and others support his lies, solving problems become even harder. The truth matters. And, with respect to his many alleged affairs and sexual misconduct, I would bet on the women’s stories as being more true than his defense.

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Sustainability

Sustainability is an underappreciated word. It is essential to most aspects of life, such as exercise, relationships, saving, or business or governmental decisions.

Beginning with exercise as an example, you need to start out like you can put out. Think what you are trying to accomplish and do sustainable exercises. I used to jog often, but my efforts would wane and I would need to start again.

Now, I exercise daily after I shower for about fifteen minutes altering the routines each day. They are a series of Yoga, Pilates, isometrics and light weightlifting. I balance that with 2 to 3 mile walks or hikes and yard work. My goal at age 59 is to be flexible and toned able to get around on my own for the rest of my life.

The same holds true with financial decisions. A word of advice is pay over time what your budget can support. Save with each paycheck to create a dollar averaging effect that is not hinged on stock market rises and falls. Be wary of buying on ego – buy on sustainability (master bedroom downstairs will become a must at some point and most cars and SUVs look similar no matter the price).

Our government could learn this as well. We are borrowing from our future to make a long running pretty good economy a better one. We are on an unsustainable path toward debt and we have exhausted a few measures that would let us recover from the inevitable fall.

We are reversing a trend of treating our environment better by removing some needed regulations and allowing polluters to pollute more. We are peeing in our own swimming pool. At some point, there is a financial and health reckoning with these environmental degradations.

Sustainability is the key. It may be a boring word, but it is an essential one. Start out like you can put out.

Tick, tick, tick – young folks please raise some holy hell on this

Tick, tick tick…the US debt of $20.7 trillion is expected to increase by $10 trillion by 2027 even before the December Tax Bill and last night’s Budget Bill were passed.

Tick, tick, tick…per the nonpartisan Congressional Budget Office and Committee for a Responsible Federal Budget, the Tax Bill is projected to increase the US debt by $1.5 trillion or so by 2027.

Tick, tick, tick…last night’s Budget Bill which has now been signed into law is expected to increase the debt by $400 billion over the next two years.

Tick, tick, tick…unless something is done about it, the debt will be close to $33 trillion in 2027. The scarier thought is that might be low.

Tick, tick, tick…the added dilemma we are facing is the interest rates are increasing, since we may have overheated a good economy. That will add further to the annual interest cost on the debt.

If I were in my twenties, I would be raising holy hell about this. I just called several members of the Freedom Caucus, telling them I am an Independent and former Republican voter. While they were right to raise issue with the $400 billion, I said it was hypocritical to vote for a Tax Bill that increases the debt by $1.5 trillion.

Invariably when I called I spoke with a nice young staffer in their twenties, because I asked them if they were. During our conversations I asked them “you do realize we are leaving this problem for you?”

In December, 2010, the US debt was over $13 trillion. The reason this date is important is the bipartisan Simpson-Bowles Deficit Reduction Committee presented their findings and recommendations in that month. In essence, they recommended a series of changes that followed a ratio of $2 of spending cuts to every $1 of revenue increases. Since Democrats did not like the former and Republicans the latter, the Committee’s good work was shelved.

Fast forward to today and not only have we not done much about it, we have made the problem worse with these two bills. In Congress, it is both parties’ fault. It is President Obama’s fault for shelving the Simpson-Bowles study and it is President Trump’s fault for not making this an issue and promoting tax cuts. It is President Bush’s fault for passing tax cuts against the advice of his Secretary of the Treasury after being handed the baton on a balanced budget.

Our deficit was $666 billion in the last fiscal year. It will be over $1 trillion at the end of this one. This is not good. Please let your Congressional representatives, Senators and the President know we need to do something about this. We need revenue increases and spending cuts. The math will not work otherwise. Please check out the websites for the nonpartisan Committee for a Responsible Federal Budget, Fix the Debt and The Concord Coalition for more information.

 

 

Headwinds and Tailwinds to the Economy

Presidents get too much credit and blame for the economy. They can provide headwinds and tailwinds, but global market forces tend to control what happens. By headwinds, I mean the wind is against the economic growth, with tailwinds aiding economic growth.

In the US, we are under the third longest economic growth period in our measured history with 103 consecutive months of growth. We have also had seven consecutive years of 2 million plus jobs created. And, the stock market more than doubled under Obama and continues its rise under Trump. These are great numbers. But, before we pat ourselves on the back too much, not everyone has benefitted and wealth disparity among economic classes has been widening for the past thirty-five years.

Economists I have watched project the good news to continue for the year, but several have cautioned about the future and if we don’t address the inequity, we will have major problems on top of other concerns.

On the tailwinds ledger, the global economy continues to grow and the World Economic Forum projects a 3.9% increase for the year. In the US, the cut back on regulations, plus the reduction in new ones over the rates of the past, have given more confidence to businesses (more on this later). Plus, the reduction in corporate tax rates will help fuel some growth, provided these companies who are sitting on cash, choose to invest it in their people and business. And, with more money in many people’s pockets, this will add some fuel.

On the headwinds ledger, several economists have noted we are robbing Peter to pay Paul, leveraging our future with even more debt. Not only did we not address the expected increase in debt taking it from $20 trillion to $30 trillion in 2027, the tax law will increase it by $1.5 trillion. The interest cost thereon will take a greater bite out of our budget. But, other headwinds are of concern. Retrenching from global markets and trade agreements replacing them with binary ones, will be dilutive to growth. Not investing as much in science and innovation is a major concern to Joseph Stiglitz, a Nobel laureate in economics.

This will be heightened if we restrict immigration. What seems to get lost in the argument where some have become too cold-hearted in my view, is immigration is accretive to the US economy. Plus, the people immigrating tend to be more entrepreneurial and better educated, in many cases. These sh**hole countries that someone demeaned are sending us more educated people than reside here in the states, on average.

We should not fail to remember that “innovation is portable” so says David Smick, an economic advisor to Ronald Reagan, Bill Clinton and Jack Kemp, one of the smartest Congresspersons who considered a run for President. If we do not provide an inviting place, innovation may be hindered. I should note that Steve Jobs was born to Syrian immigrants to the US. What if they had been denied entry? Apple might not have ever come to fruition.

Finally, not all regulations are bad, so restricting regulations may cause headwinds down the road especially with more freedoms given to pollute the environment and take advantage of customers. This is a developers mindset. Remove obstacles to build, but leave the clean up for others. Unfortunately, we taxpayers are the others. We citizens, that must drink and breathe more polluted waters and air and realize the impact of climate change, are the others. As coal ash deposits have taught us, there is a cost to environmental degradation.

So, we need to be mindful of what we are facing. I have communicated with numerous Congresspersons, Senators and the President, that we are avoiding some elephants in the room – debt, climate change, water crisis and income inequity. In my view as an Independent voter, passing a tax law that increases the debt was extremely poor stewardship, as we cannot cut our way out of this problem. The math won’t work.

 

Wednesday wonderings

Happy Hump Day to all! Please permit me some alliterative license to wonder this Wednesday about a few events in the US and around the world.

I wonder what folks in Russia are thinking when their leader sanctions state sponsored cheating to win the medal count in the Olympics? To be kicked out of the Olympics was a surprise, but necessary result.

I wonder what folks in America, who do not believe the Russians influenced and are still influencing our elections and civil discourse, think after seeing the Russians banned from the Olympics. Let me say it plainly, if Putin is willing to cheat over Olympic competition, don’t you think he would cheat in influencing elections that would be in his favor in other countries?

I wonder what Senator Chuck Grassley of Iowa was thinking when he was quoted in the Des Moines Register to support the Tax Bill favoring wealthy Americans, “I think not having the estate tax recognizes the people that are investing. As opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.” This quote is highly offensive and betrays a line of thinking that is too often felt by those who “have.” No, Mr. Grassley, most Americans are living paycheck to paycheck to buy groceries, medicines, day care services and to pay rent (or mortgages),utilities and bills. I called his office to share my concern over the Tax Bill and to register that this quote is in extremely poor form.

I wonder what the US President is attempting to accomplish with citing Jerusalem as the capitol city in Israel? This move is being condemned by almost every nation as unnecessary and inflammatory. Is it to appease an evangelical base in the US or is it part of some master peace plan? If the latter, many experts I have listened to note that this will likely derail any peace process. Even the ones who have not been totally against it, say if it is to be helpful, then there are very subtle and delicate words that must be used. I am not confident that this President is up to that task, as it is not in his nature. Even beyond his prepared words he will use today, he has shown a bent to unwind progress with his inability to leave it alone.

I wonder why some people are having a hard time believing that Senate candidate Roy Moore sexual assaulted and harassed teen girls. It was not a secret that the man trolled malls looking for pretty teens to exploit. And, he cannot defend himself as his words get in the way. Mr. Moore, did you know these girls or not? When you have trouble answering the question, it means two things to me. Either you are lying or there are so many you cannot possibly remember them. One thing is for certain, they remember you.

I wonder why GOP Congressional leadership are using robocalls and commercials to sell me on their Tax Bills. Only 29% of Americans support the bills and 64% of Americans think the bills favor the wealthy. As a I said in emails, voicemails and conversations with staff of these politicians, we cannot increase the debt as these tax bills do (and should be reducing it) and please do not tell me how much they favor the middle class, when it is obvious who greatly benefits from them. Our friend Gronda refers to them as the “Donor Relief Fund.” Please let them know of your concerns.

I wonder.

 

Congress – Please listen to the nonpartisan economic groups

Early this morning the Senate passed their Tax Bill, complete with hand written amendments and no public hearings. Senator McConnell declared it a victory for the American people. But, which people? From my reading the people doing a touchdown dance already have an awful lot of money. 52% of Americans disapprove of this bill, but only the opinion of the privileged few matters.

On NPR yesterday, I heard Congressman Kevin Brady, the Chair of the House Ways and Means Committee, smugly say we do not believe the projections of Congress nonpartisan Joint Committee on Taxation who measured the Senate bill as increasing the debt by $1 trillion and saying this bill is not as kind as portrayed to people in poverty and middle class. But, Congressman, why do the nonpartisan Committee for a Responsible Federal Budget, Fix the Debt and The Concord Coalition say pretty much the same thing?

Without public hearings, Republicans did not take the time to know this. What should be surprising is the two Senators from Kansas voted for this bill after a similar state bill had to be unwound last year after it decimated Kansas’ economy and budget.

Outside of Senator Corker, my former party seems to have forgotten what fiscal stewardship means. We are projected to have a debt of $31.5 trillion in 2027. I want to hear what Congress plans to do about that.

As a former Republican, this continues to support why I left the party. Passing a bill to get a win is no way to pass good legislation.

Please feel free to use a variation of this to let your Senators and Congressperson know of your concern. I added that they call me with a response to my concern and not send me a form letter.

A few financial retorts

In an effort to pass a Tax Bill in the US that heavily favors the wealthy and increases the US debt, I have heard several platitudes that are no truer today than when they were first uttered years ago. Here are just a few odds and ends to sink your teeth into.

When a politician tells you a tax cut will pay for itself, the follow-up question is  why don’t we do away with all taxes then? The current tax bill has been projected to fuel only 1/3 of the cost of the tax reduction, which is a little higher than average tax cuts yields.

Most CEOs have said they will use the tax break to buy back shares, pay higher dividends and retain key executives with better incentives. The answer we were promised by legislators is they would spend it on their business investments. These folks are sitting on cash already, so if they are not investing now, when?

By the way, when a company says it is going to buy back shares, more often than not, that is a sign of weakness. In essence, management cannot figure out how to grow the numerator (earnings), so they lessen the denominator (outstanding shares). This is a less risky way to prop up EPS growth and gain a greater incentive payment.

I have talked ad nauseum about the US debt which is being ignored. As we see it grow by more than $10 trillion over the next ten years, at some point there will be a huge day of reckoning and all previous politicians will and should be held accountable. We will see some deck chair moving on our Titanic, but we are well past ignoring this problem. If a Republican tells you they are a deficit hawk, tell them that does not appear to be true.

Finally, the last major Tax Reform was in the mid-1980s. It was a bipartisan effort that took about four years to do, led by some of the smartest tax folks in the Senate and House. These Tax Bills are not bipartisan, have been rushed through without hearings, are not popular and are not authored by folks of the same caliber as before. This speaks volumes.

But, no one is listening to the push back. Talk is cheap. We are about to pass an unpopular Tax Bill that largely benefits corporations and the wealthy and adds to our building debt problem. And, the folks who will bear the brunt of this are the people in poverty and middle class. Please speak with your Senators and Congresspeople. Ask them not to pass any Tax Bill that will increase the debt. And, remember it is easy to pass a tax cut; the opposite is where it gets hard.