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.




While we were distracted, look what oozed in through the keyhole

On December 5, 2017, the Department of Labor under the guidance of the self-proclaimed populist President offered proposed regulations that would affect tipped employees. The 60 day comment period just expired, so unless the push back was convincing this proposal may become regulation. The proposal unwinds an Obama regulation which prohibits an employer from garnishing tips from workers who make at least the $7.25 minimum wage.

It should be noted that restaurant workers have a lesser minimum wage of only $2.13 which has been in place for twenty plus years. They can be paid an hourly wage this low, provided their tip income brings their total hourly pay to $7.25. As of May, 2017, the average combined wage and tip income for restaurant workers was $11.82 per hour.

In essence, the proposed regulation would allow an employer to garnish the extra tips above a total wage rate of $7.25. Now, the employer could be altruistic and reallocate this tip income to all workers, such as the cooks and buspeople (those that clean off the tables). This could also include the tipped worker who would receive a reallocated portion, but less than the direct tips garnished.

Yet, a very troubling part of the proposal is the employer could keep the tips and not reallocate them to workers. It is noted therein that the tips could be made for structural improvements or to reduce menu prices. Note, this is a low margin business, so it would not be a leap to see more than a few employers not reallocate all or any of the money. This is especially concerning within an industry where some managers exploit all and harass female workers (note read “Nickeled and Dimed in America” by Barbara Ehrenreich on working in minimum wage jobs that perpetuate poverty).

Per an article in The Washington Post (see link below), “‘There is no way to do a good face estimate and maintain the fiction that this rule isn’t terrible for workers,’ said Heidi Shierholz, who previously served as chief economist for the Labor Department, in a conference call on Thursday arranged by EPI.”

Many things concern me about this. If the employer were made to reallocate the garnished tips to other workers including the affected worker, then it would be more understandable as an employment term. A worker could then decide to work elsewhere if they felt they could make more there. It should be noted that in some cities that are phasing up to a $15.00 per hour minimum, some restaurants are going without any tipping, but that is understood beforehand and communicated to patrons.

The troubling part is the employer being able to choose to keep some or all of the money, provided the below market minimum wage is used. Help me understand how this helps those masses of people who voted for a man to make their lot in life better. Coming on the heels of other changes that have been made to favor Wall Street, such as the Tax Bill, this President does not look very much like a Main Street man.

What are your thoughts? Have you ever worked in a restaurant?


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.


Letter Number 39

I have tried my hardest to reach out to various Senators, Congresspeople and even the President to share my concerns and thank them for certain efforts. Yet, what I have noticed is the use of a standard response letter created by subject. Sometimes, I have received the same letter more than once.

Over the weekend, I was speaking with a neighbor who is an attorney. Since I know he is of a similar mindset, our conversations usually turn to our political frustrations and concerns.

I shared my effort to contact legislators and he said that is nice, but usually is unsuccessful. He told me he used to work with a Congressman and would write those letters. He laughed that he once created “Letter Number 39,” which they would use to respond to a constituent.

We still have to try and contact these legislators. I usually don’t ask for a response anymore, because of the form letter responses. But, I do call and leave voicemails and occasionally speak with staffers. And, I continue with emails.

My friend’s comment is a little disheartening, but we cannot let it stop the reach out. I encourage you to write letters to the editor and share factual information with folks. It is a way to combat the fake news purveyed in large part by the US President and his sycophants.

New Year’s Resolution for the President

Dear Mr. President, please do all Americans a service and tell the truth more in 2018. With 103 measured lies in your first 10 months vs. only 18 in eight years by Obama per the New York Times, you have been the biggest purveyor of “fake news” in the country. Moreover, Politifacts has measured you as making “mostly false” and worse statements 69% of the time. Our global reputation and trustworthiness have declined under your tutelage and it is harder to solve problems as a result. Please begin the new year with a resolution to be more truthful. Quite frankly, you owe it to us. All politicians do.

Note to Readers: Please feel free to use this language in letters to the editor or others.

Note to young folks – Republicans are leaving you holding the bag

As a former Republican, now Independent voter, it is very hard to defend what my former party stands for. What used to be a party that boasted fiscal stewardship with a little heart, now is fiscally narrow-minded and mean-spirited. There are three major themes that have emerged during the Trump version of this party, all of which are leaving young people holding the bag.To summarize, they are:

  1. ignoring a huge debt problem, making it worse with the Tax Bill,
  2. ignoring the impact climate change is having and will have on our planet, and
  3. ignoring the wishes of young adults eliminating net-neutrality, demeaning civil rights of those who are not white heterosexuals, and denigrating free press.

Note, I placed three separate, but related issues into the third basket, as I see each in a composite context to restrict the rights of information to the masses.

On the debt problem, we are currently at $20.6 trillion US debt. But, that is only part of the problem. In the fiscal year ended September 30, 2017, we had a $666 billion deficit with $3.3 trillion revenue falling short of the almost $4 trillion in expenses. The Congressional Budget Office projects the debt to grow by $10 trillion over the next ten years without the impact of the Tax Bill. That would put us at over $30 trillion in 2027. When the Tax Bill impact is thrown in, the debt could be as high as $32 trillion. Note, with a $3.3 trillion annual budget, it would take us ten years to pay the debt if we spent no other money and there was no interest cost on the debt. What this means is there will be a reckoning that will come in major tax increases and major spending cuts which will hit young adults,

Ignoring climate change is a fossil fuel industry funded requirement placed on Republicans. In the book, “Rancher, Farmer, Fisherman” by Miriam Horn, these hard-working folks see what climate change is doing everyday, yet they have to tiptoe around Republican politicians in their states to explain what is happening to water, crops, topsoil, fisheries, bayou, etc. without using the word climate change. Even though we have many great things going on to combat climate change in the US, our country was not invited to the most recent climate change planning event with other major leaders. Fortunately, our business, city and state leaders don’t necessarily need Washington to make a difference, but it would be great to see what we could do when DC is not putting up roadblocks.

The net neutrality issue is frustrating, as with the Tax Bill, it favors those with money and not those folks the President promised to help. What will backfire on the GOP, is young folks are passionate about this issue and know Ajit Pai’s name as the demonized head of the FCC. Yet, it goes part in parcel with the restriction of flow of information. The media are demonized because they dare criticize the President. Civil rights are being squashed unless you look like the President – what he said about Charlottesville is insulting and distasteful. And, communication companies like Sinclair are being greenlighted to buy even more local stations and influencing their content.

None of us can sit on the sidelines and let this happen, but especially our younger voters. If we do not demonstrably deal with the debt and climate change, these failures will come home to roost. But, the attack on the free flow of information by this President and his party is also dear. It is a way to combat the changing demographics in America that do not support the GOP. Instead of wooing new voters, the strategy is to step on others. This observation comes from a former Republican who left the party ten years ago.

Please lend your voice to fight for better stewardship. These leaders are not even talking about issues that are of import, such as our infrastructure, water and healthcare needs, in addition to the three problems noted above.




Saturday solutions for stewing

Get out your crock pots and Dutch ovens! It is time to stew a few ideas throughout the day to see if they have merit. This is not intended to solve world problems, but are some changes that might help. We can only try.

I love Pope Francis. He is entertaining the idea to slightly alter the end of the Lord’s Prayer. It sounds reasonable, but here is a more provocative change that will help many Catholics – allow Priests to be married again. What you might say, again? Yes, Priest were married until the 1100s, when it was banned, with some continuing to be married into the 1500s, as they did not get the memo. This would reduce pedophilia in the Priesthood and attract a more community-minded type of minister, who knows about the trials and tribulations of relationships.

Money and the influence it buys is a huge problem in the US. Here are a few changes. Pass a 28th amendment that says money does not equate to free speech and overturns Citizens United and McCutcheon decisions by the Supreme Court. The former greases the skids for dark money and the latter lets big donors influence local races they have nothing to do with. If you are not a voter in that location, you should not be able to fund the race. The other amendment is to shorten the election process and offer term limits as we do for the President. This will be cheered by many. Twelve years is enough for a Senator and Congressperson.

The Washington Post did an in-depth piece that counted the number of out-and-out, provable lies made by the last two Presidents. Our friend Gronda did an excellent piece on this last week*. The verdict, Obama in eight years had 18 lies, averaging to two per year. In ten months, Trump had 103. To add to this, a study was done by Politifacts that concluded Trump lies 69% of the time as President and 70% of the time as a candidate. But, this is not new, as his five biographers and ghost writer for “The Art of the Deal” said Trump has a problem with the truth. Stew on this comment – if you see Trump talking or read his tweeting, the odds are that he is lying. He said the FBI is in tatters, which is directly contradicted by two people he appointed – Jeff Sessions and Chris Wray, the head of Justice and FBI. He also keeps saying there is no collusion….

Finally, the best line I heard by a pundit was quite simple. People considering running for office – if you have sexually assaulted or harassed someone in the past – please save us the time and you the embarrassment and do not run for office. It will come out. I personally do not know why supporters of Roy Moore and Donald Trump cannot fathom that they each sexually assaulted and harassed women. The sad truth is one got elected and one almost did. But, neither should have won as both are men of little character. We have not heard the last of Trump’s travails, although he will deny it.

* https://grondamorin.com/2017/12/15/the-truth-about-president-trump-versus-president-obama/