Newbrew

World Cities - Atlanta Has an Enviable Rank

I was just poking around on the internet and found an interesting ranking of world cities.  Here are the top 20 ranked first by GDP and then next population (2010 rankings).  Best is to be high on the GDP list with a low population ranking.  Atlanta does VERY well in this regard.  Eight of the top 20 cities (in GDP) are located in the US.  Atlanta and Houston not only are wealthy and have relatively low populations and also provide a low cost of living and lots of space for growth.

City	GDP Rank	Population Rank
Tokyo	1	1
New York	2	6
Los Angeles	3	12
Chicago	4	25
London	5	28
Paris	6	20
Osaka	7	17
Mexico City	8	5
Sao Paulo	9	3
Washington	10	42
Boston	11	41
Buenos Aires	12	11
Moscow	13	19
Hong Kong	14	31
Atlanta	15	39
San Francisco	16	46
Houston	17	40
Munich	18	35
Seoul	19	22
Frankfurt	20	64

Source:  Foreign Policy Global Cities Index 2010.  http://www.foreignpolicy.com/node/373401.

Go Ahead, Raise the Cost to Hire the Average Person

With the healthcare "deform" bill now ready to be signed by Obama, the Democrats are cheering.  Their communist/socialist dreams are here.  Freedom has been defeated.  Statism is here.  Another entitlement program that can't be easily repealed.  But, for those bright enough, life will go on OK.  We know how to still envision, design, make and sell goods.  The people who will suffer are those good, loving Americans who have been our backbone.  They work at our restaurants, gas stations and retail stores. They work (or worked) at our factories.  They drive trucks.  You get the picture.  These are our friends, moms, fathers and kids.  They are or were necessary.

BUT, leftist politicians told them they should make what doctors make.  They deserved to get the same benefits that executives have.  Blacks and Hispanics were told they weren't smart enough to make it on their own.  They had to get into college with everything paid for and with lower scores.  Factory workers were told they didn't and couldn't save for retirement.  The fat cats had to do that for them.  And the government will now take money from those that have lots of money, assets and benefits and give it to those that don't have as much money, assets and benefits.  So, no need to bust it anymore.  No need to be self-sufficient.  You'll get it no matter what you do.  Do I think teachers are awesome?  Sure.  BUT, education is already socialized.  They get a socialist wage.  And they're unionized.  They get a union wage.  Only the union bosses make the big bucks.  Not exactly the best example though.  Say you're a car plant worker.  You assemble cars.  A very noble and honorable job.  But, you aren't building product strategy.  Those are the guys making the bucks.  Want those bucks?  Go get more eduction and move to that world.  Don't sit in your plant wanting champagne when the job only pays or should pay beer.  But, that's what has been promised.  Or so it seems.

I personally think that while we don't all have equal money, we all have equal freedom under our constitution.  Race and ethnicity are not barriers.  And in our capitalist society (for now), they are just old definitions that don't really play into peoples' value to society.  Your current place in society, wealth wise, isn't a restriction either.  We all have the chance, in our free society, to move up, out and over.  But, the changes made in this healthcare bill (which contains non-healthcare provisions) are telling people otherwise,  They aren't smart enough, savvy enough or capable enough.  The government won't just ensure the rules are fair.  They'll grab other people's money and give it to you.  What does that tell the people who invest and nurture businesses?  What does that tell those of other ethnicities about their family background and their ability to have a fair playing field?  Is our government driving class envy?  Are they building a wedge between races and ethnicities?  

So, as the costs of hiring workers and our taxes go up, we business owners will find ways to ensure we still make it.  How?  We'll automate and outsource, causing the need for workers to be diminished (and as well our costs.)  Who suffers?  Those disintermediated workers.  Maybe they can just become slugs.  Wards of the state. Making less than they would if they were producers but not burdened by, OMG, work! Business owners will also look to move their point of taxation to lower cost, lower tax countries.  Just because the Federal government has cracked down on secret Swiss bank accounts doesn't mean there aren't other ways to minimize tax burdens for business owners or high wealth individuals.  That's what we'll have when we have high taxation.  Slugs, unproductive "workers" and the wealthy, who will not lose out just because of the socialist plans by the government.  The middle class and the lower class may get free healthcare.  But, they'll lose their wealth and with it, their self-sufficiency, freedom and economic-liberty. And America will rapidly decline.  The wealthy and business owners will carefully switch nationalities.  Maybe not on the surface, but definitely under it based on where their investments go.

If our focus were on limited government and with it, lower taxation, business owners would begin to not feel the sting of doing business in the US and thus move their operations closer to home.  People like doing business with their neighbors.  But, nobody likes to be screwed.  Nobody likes seeing their plans for charity hijacked by the government who is a pretty sorry charity organization.  Charities bring both money and rehabilitation.  Governments bring money but they also bring dependence and despair (as well as inefficiency.)

Here's an interesting quote from Thomas Friedman in the NY Times:  

"If I just have the spark of an idea now, I can get a designer in Taiwan to design it. I can get a factory in China to produce a prototype. I can get a factory in Vietnam to mass manufacture it. I can use Amazon.com to handle fulfillment. I can use freelancer.com to find someone to do my logo and manage my backroom. And I can do all this at incredibly low prices. The one thing that is not a commodity and never will be is that spark of an idea. And this Intel dinner was all about our best sparklers."

So, let's hope we can throw out the bums in office soon, repeal not only this entitlement plan but others as well.  Let's hope that there are republicans who are truly fiscally conservative ready to run our federal government.  Let's hope we remain the world's best economy and it's brightest beacon of freedom.

Deficits We Can't Afford To Run

I pulled this data from the US Census site.  I cannot figure out why foreign trade data is found there.  But, it's there.  http://www.census.gov/foreign-trade/balance/.  It seems that December of 2009 data isn't available yet.  Thus these are only 11 month numbers.

As you can see, we have a number of trading partners where trade is very out of balance. With Australia, Brazil and Switzerland, we export more than we import.

With the rest on this list, we have a large deficit.  Some of these are just too large.  Our trade with China, Mexico and Japan need addressing.  No doubt that at times we can see surpluses and deficits.  But, with these countries we always see them importing less of our goods than we import of theirs.  Something to think about given the US's current financial situation.

Country	Exports from US First 11 Months of 2009 (US Dollars in Millions)	Imports to US First 11 Months of 2009 (US Dollars in Millions)	US Trade Deficit (US Dollars in Millions)
Australia	$17,690.2	$7,233.1	$10,457.1
Brazil	$23,670.8	$18,228.9	$5,441.9
Canada	$186,481.1	$203,589.7	$-17,108.5
China	$61,213.1	$269,901.1	$-208,688.0
France	$24,270.1	$31,097.8	$-6,827.7
Germany	$39,278.1	$64,313.9	$-25,035.8
India	$15,043.8	$19,390.4	$-4,346.6
Italy	$11,174.9	$24,072.8	$-12,897.9
Japan	$46,249.3	$86,409.8	$-40,160.5
South Korea	$25,826.1	$35,844.5	$-10,018.5
Mexico	$117,200.7	$159,510.9	$-42,310.2
Russia	$4,945.3	$16,797.0	$-11,851.7
Switzerland	$15,925.9	$14,389.8	$1,536.2
Thailand	$6,230.2	$17,187.4	$-10,957.2
United Kingdom	$41,990.1	$43,524.2	$-1,534.0

Our Leaders are Clueless on the Economy

Read this Reuters article:

http://bit.ly/8GvWTx.

It seems that the White House spent so much time on a health care plan that nobody wanted that they ended up putting the economy into a deep freeze. Now, they are faced with a real problem.  They are spending so fast, they have to raise taxes.  But taxes will kill any growth.  Pushing growth though too much can mean inflation, which will kill growth.  Damn, they are nuts.  They spent a year on a ridiculous health care plan.  They focused on a stimulus plan that was all pork and no stimulus.  They focused on praising our enemies.  They spent like drunken sailors.  Now, here we are.  We can't vote them out fast enough.  If they had any sense, they'd get really radical, in a positive, conservative, constitutional way. NO, I'm not talking about conservative in a social way.  I'm talking about conservative in a fiscal way. 

Here goes:

• Replace the tax system with the FairTax.  I just re-read the book by John Linder and Neal Boortz. http://bit.ly/4qH36b.  This plan, started in 1994 and introduced into the House in 1999 isn't Republican or Democrat.  It doesn't change our spending habits.  It moves us to an indirect tax system.  The Federal government would add a 23% tax at the retail level eliminating all payroll taxes, all income taxes, all death taxes and all corporate income taxes.  Read the book.  This tax system has had more research than any other.  Millions have been spent to analyze it.  Both liberal and conservative economists back it.  Universities have given it a "thumbs up".  A change to this system would make America the best place to do business in the world.  We'd make more, spend more and prosper more.
• Cut spending.  Cut Debt.  Only spend what is really needed by our government to operate.  Don't cut defense.  Nothing else is sacred.  Not Medicare, not Medicaid, not bridges to nowhere.  Spend less than taken in.  Business will love it.  So will those that are unemployed when business starts moving.
• If we're to reform healthcare, we have to first realize it's not a right.  However, there are things the government does to make healthcare harder and more expensive than it has to be.  John Mackey of Whole Foods had a good list of actions the government (or governments, state and federal) could take to make things better.  Here they are:
• • Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).
  • Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.
  • Repeal all state laws which prevent insurance companies from competing across state lines.
  • Repeal government mandates regarding what insurance companies must cover. 
  • Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.
  • Make costs transparent so that consumers understand what health-care treatments cost.
  • Enact Medicare reform.
  • Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.
  • Not from Mr. Mackey, all laws the keep membership organizations from creating and offering health insurance.  Wouldn't it be great to sign up for healthcare at Sams Club without any worry about pre-existing conditions
• While I like a free market and as well like to see free trade with other countries, the balance of trade currently is not in the USA's favor.  We just can't keep buying all the worlds stuff and not have them use our dollars to buy back our stuff.  We must do whatever is favorable for the US.  Sure, we want prosperity for other countries too.  But, we have to take care of America first.

If the federal government could focus on these, economically, I think prosperity would return quickly and in a big way.  And when we do well, so does the world.

 

Less Can Be More - An Easier Tax System

I'm not sure how many people have heard of the Fairtax.  Here is how it is described at www.fairtax.org:

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

The FairTax Act (HR 25, S 296) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax  administered primarily by existing state sales tax authorities.

The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.

Why else is it needed, compliance will be easier to manage.  More than 80% of all tax returns are eliminated under the FairTax--every individual filing. What remains are retail outlets collecting the FairTax. Of these, 80 percent of all retail sales now occur at large retail chains like Wal-Mart. The point is oversight will still reside under the Treasury Department but the government's responsibility will be over a far smaller "universe" of tax collection points making compliance oversight far less costly and far more effective than the current system which costs $265 billion a year in compliance costs and still comes up $350 billion a year short of what is owed.

Also, The FairTax rate of 23% (when calculated inclusively like income tax rates) has been thoroughly researched to provide all the revenues now collected under both the income tax system and through FICA payroll taxes.

The FairTax actually eliminates and reimburses all federal taxes for those below the poverty line. This is accomplished through the universal prebate and by eliminating the highly regressive FICA payroll tax. Today, low and moderate income Americans pay far more in FICA taxes than income taxes. Those spending at twice the poverty level pay a FairTax of only 11.5 percent -- a rate much lower than the income and payroll tax burden they bear today. Meanwhile, the wealthy pay the 23 percent retail sales tax on their retail purchases.

Imagine not having the "threat" of the IRS.  No tax returns.  Individual control of the money you earn. A system that has $22 million of dollars invested in research.  A system that ensures that ill gotten gains are taxed (as people who make money want to buy things and thus will cause tax to be paid.) Where would companies based outside the US want to base their operation when the corporate income tax rate in the U.S. was 0%?  The U.S. of course.

And there are so many economists (many at universities) who have vetted and support the plan.  

The downside?  Simplified taxation means less need for tax attorneys.  Less need for tax accountants. Further, there aren't any "tax breaks" any more that politicians can use to earn votes.  Further, people have total independence.  They "own" their earnings.  Government folks don't like losing control over people.  Maybe that's a way to keep them "honest"!