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Comments
The OBAMA SHAFT. And, everyone will get it... one way or another.
Obama's $250,00 number is very misleading.
He has used it for so long now, that many American's now believe him, and they believe it is an "official" definition for "rich". It is not.
Obama's goal is to mislead Americans into thinking that anyone making more than $250,000 isn't in the middle class.
The poorer Americans become, the lower the number becomes that defines "rich".
The concept of everyone being created equal was never intended to mean that everyone has to have the same amount of money. It meant the same opportunities.
Obama's fundamental beliefs are not American democracy or capitalism in the true sense. They are closer to socialism and communism. Sorry, but it's true.
TM
Let's picture a business that nets 5mln and has a 12mln loan. It needs to apportion about 2mln for taxes and 2.4mln for bank debt each of the next 5 years. Raise taxes and where do these businesses get cash from to hire personnel? Why invest and risk in a rising tax environment anyway. People get taxed on their income, not their cash flow, but they live on the latter. A business with debt gets lost in the tax code because it's income (which is passed down to ownership) is so much higher than its cash flow. This is what folks were talking about in the meetings we were at and this is exactly why they w'ont spend on hiring until the picture becomes a lot clearer. In some cases these businesses can't spend even if they wanted to and raising taxes chokes that off all the longer. Bank ratios have to be met (they've all been tightened too in this economy) and if you cut your excess too close to the required ratio you've blown your loan covenants. This means your interest rate will rise. Bernanke should be much smarter about this than Obama and I doubt the latter knows what a covenant ratio is. Bernanke most certainly has to know that a tax increase makes reduction of unemployment damm near impossible.
Now I'll make it even worse. Several owners I know are thinking of selling out to larger corps or strategic buyers in this environment of uncertainty. They will make their $30-35mln and be rich after they repay existing debt and LT tax gains, but guess what happens to their employees. They will get squeezed out of their jobs in any consolidation.
As for the salaried $250k-300K employee, after all taxes (Fed, state, local, real estate and sales tax) plus mortgage payments, school payments etc there isn't much left. Whatever extra dollar is taxed is removed from the economy. Obama makes this small sliver rule of his sound like nothing but it will kill the economy.
My rule is I set aside how much I intend to save every year and the rest I'm pretty free spending with unless I'm investing. Whatever extra dollar gets taxed on me is ultimately taken out of the economy.
The measurement of success isn't that we are doing better than we were during the financial crisis... as Obama and some say... heck, we should hope so!
But, our economy would be a lot better off than it is, if we just had a good predictable situation that included tax cuts for business and all Americans across the board... not tax increases.
Obama's policies are counter-productive and punitive. Stupid.
TM
How long before the Stock Market catches up? I'm watching TM to see when I should bail out. :shades:
Still getting familiar with it.
The ride in comfort is great but you sacrifice handling. I prefer sport and the handling there is a lot better and the ride is serene and wonderful. As long as you go AWD you get the adjustable air suspension.
The only bump I hit the car handled very well. I'll keep you posted on this as i drive it more.
I'm not noticing any of the hold hesitation in acceleration of the car.
Each phone has itr's own phone book and speed dials. In my old car the speed dials were shared.
All the technical settings that you used to need your dealer to make can now be set by you electronically on the nav screen.
The car now has auto high beams so you can ride with them on all the time at night and they auto go off and back on based on cars on the road, and even homes you approach that have lights on.
Everything is easier to do and there are many more things on the nav screen now that are adjustable.
They've also separated sat radio from AM. So now you are back to the old AM/FM and the sat radio is separate.
They did something with the seats. They seem larger and more comfortable than ever.
Your argument as well some others here seems to be that if the 3% of the population does not see a tax increase and preferably see a tax cut, then it will trickle down to the middle class and poor, more jobs will be created, and we are on the way to a robust economy. On the contrary, if this 3% of the population sees a tax hike, then the opposite will happen....probable double dip or worse. I guess I am skeptical about either scenario. If it were that easy of a decision, why would Obama and his economic advisers be contemplating raising taxes for those making more than $250K? Are they that stupid? You, Len, and a few others here say the answer to this question is YES. I respectfully disagree.
I wrote the above thoughts and then I decided to ask the opinion of a CPA. He just informed me that this administration is not raising taxes, but all they are considering is to allow the TEMPORARY Bush tax cuts to expire. Obviously, some of you see this as raising taxes. In any case, that throws a little different twist to all this as well. Additionally, it would not be Obama that has the authority to raise taxes, but it's in the hands of Congress. The Republicans can block any tax hike if comes to that. He also told me that it has been proven statistically that the wealthy can be taxed at 100% and it will make little or no difference on the revenues raised since this is such an insignificant small sample of the population. The same logic applies to the overall economy. This jives with my thoughts above that I find it hard to believe that if less than 3% of the population is taxed at a higher rate that it would have such a devastating effect on the economy.
Here are some exact quotes the CPA just emailed me:
If the rates are allowed to go back to the old rate (prior to the Bush temporary cuts) there are some very minor adjustments at the lower level, but at the upper levels (married/filing jointly) for taxable income over $232,000 to $375,000 the rate would increase 3% on income in this bracket. All income before this level is taxed the same as now. Taxable income above $375,000 is increased 4.6% to 39.6%. However, most high income taxpayers are already paying the 39.6% rate as they are subject to AMT (Alt. Min. Tax) so they are not getting any tax increase since they are already paying 39.6%.
As to the statement you made above, He is even considering doing away with the homeowner's mortgage interest deduction!!
This is fiction.
Well, to all of you that replied (Houdini, gagrice, TM, Len), I don't think this is going to get us anywhere. I appreciate all of your opinions, but I don't think it will be doom and gloom if some of us have to pay some additional taxes starting in 2011. Let's all hope that we are all healthy and we have a robust economy down the road.
I have been and continue to be optimistic about the future of this nation. My optimism began win the spring of 2009. We will all be looking back a year from now and saying "why were we worried?"
Happy investing everybody!!
No, it is not fiction. This idea has definitely been floated, along with a value added tax or nat'l sales tax.
We all have to make our decisions based on how we assess what is going on in the world around us. Some get it right, some get it wrong. So some win and some lose. I guess that is just the way it is.
As your CPA friend noted, the revenue generated by taxing the wealthy at 100% is insignificant to everyone....except those being taxed.
2013 LX 570 2016 LS 460
The only bump I hit the car handled very well. I'll keep you posted on this as i drive it more.
I'm not noticing any of the hold hesitation in acceleration of the car.
Each phone has itr's own phone book and speed dials. In my old car the speed dials were shared.
All the technical settings that you used to need your dealer to make can now be set by you electronically on the nav screen.
The car now has auto high beams so you can ride with them on all the time at night and they auto go off and back on based on cars on the road, and even homes you approach that have lights on.
Everything is easier to do and there are many more things on the nav screen now that are adjustable.
They've also separated sat radio from AM. So now you are back to the old AM/FM and the sat radio is separate.
They did something with the seats. They seem larger and more comfortable than ever.
Man, the car sounds awesome. I have to go to the dealer and take it for a test drive. BTW, the RX450H that my wife drives has the auto high beam feature. It is really neat.
Tag, You and I are so much on the same page. From day one I have disliked everything about Obama's policies and with him going so socialist I have to wonder if any of those business people who supported him, chief among them Mr. Buffett, are happy about this outcome. What I am trying to figure out is whether the democratic party has become this socialist in nature (Pelosi's even worse than Obama) and is leading Obama or vice-versa. I've also seen no competence from this man in anything. He is handling foreign affairs horrendously, he is doing everything he can to minimize US leadership in the world, he apologizes for the leadership others see in us (which has a lot of our allies totally bewildered), he c'ant even make a decision on the terrorist trials, we are in and out of Afghanistan in the same sentence, we can't even call terrorists what they are anymore, etc etc.
Charlie - I love you man - but what do see in this guy that we are all missing. The only thing he does well is speak. But this isn't a broadway play or a movie. It's real life with a follow through to the closing of a movie. If this were a movie it should have ended with the election.
Charlie,
I'd love to see the math on this. Everything I ever read says that the top 1% pays 30-35% of all taxes, the top 10% pays 50-55% of all taxes and the top 20% pays 80% of all taxes. So if you in effect nearly tripled the top 1% tax rate to 100% they would pay just about the entire tax burden and everything else would be gravy. Also if his point is that alt/min already has this whole problem solved then why is Obama even wasting his time on talk about a tax increase?
Also see my point on income vs cash flow. The incomes reported by sub chapter S corps (or LLC's) often are far greater than cash flow. I think many Americans think that owners of small business have equal cash flow and reported incomes. They don't. Expansion of business either thru acquisition or intrinsic strategic moves is often financed at an additional risk. You get nothing for failure and are heavily taxed for success and have to repay your debt on whichever outcome you get. So adding higher taxes to income that is used to repay debt slows expansion all the more and makes one wonder why they should even try to grow thru new product lines.
Truth is Obama has created such a need for tax revenues because of his free spending that he is considering every option on how to close that deficit. So forget eliminating the mortgage deduction, He may well look to elimate all but state taxes which he is prevented from eliminating because of the constitution. His problem in a nutshell is do I take a chance and hold or cut taxes which will promote more money thru growth or do I take the lesser guaranteed money thru a tax increase and hope for the best with the economy. As Tag said, his ideology heavily favors the latter and he is to stubbiorn to even try and learn the former.
BTW - I have never understood why we haven't considered a flat consumption tax. Couple that with a flat income tax and you get it all. It's the only way to capture alll the underground money spent.
edit: consumption tax sounds good on the surface, but could be a bad idea... as it can negatively impact consumer spending, which is an important component to the health of the economy. Also, once the government gets the power to tax the purchasing behavior of consumers, it is my belief that the government would ultimately use that power inappropriately... it would only be a matter of time. Probably better to leave consumption tax alone and just adopt a flat income tax policy... IMHO.
TM
Just want you to know your posts are right on target... keep 'em coming.
TM
Len, my CPA friend now says that you are pretty much correct. He looked at the wrong data (something about adjusted gross income). But in any case, the well to do would pay 3% more if the Bush tax cuts are allowed to expire.
Also if his point is that alt/min already has this whole problem solved then why is Obama even wasting his time on talk about a tax increase?
He is not talking about a tax increase. He is talking about letting the TEMPORARY Bush tax cuts expire. That would result in the well to do paying 3% more as mentioned above.
Look. This entire debate hinges on whether or not business and the economy in general would be adversely affected if the Bush temporary (I continue to include this word since those tax cuts were indeed suppose to be temporary) are discontinued. Where we differ on this topic is that you guys (most all of you I think) are of the opinion that Obama is an idiot and if the well to do have to pay more taxes, doom and gloom will follow. I do not believe that Obama would support such a move if he thought the economy will go back in the tank. I am sure they are weighing all possibilities right now. I sincerely hope that the Bush tax cuts are allowed to continue and we will all live happily ever after.
If he keeps the rates for people below $250,000 as they are NOW and lets the rates rise for the rich making more than $250,000, then that will be keeping his promise to _lower_ income taxes for those below $250,000.
2014 Malibu 2LT, 2015 Cruze 2LT,
I don't think "doom and gloom" would follow if the top 1% of the taxpayers had a 10% increase and the next top 2% were all shipped to China.
That's the whole point of Obama's policy to sacrifice those top tax payers. He can bleed them without mercy, and only lose a small percentage of the vote, and then use them to try to fill his treasure chest that has been emptied by spendaholics in the government.
The whole concept of "doom and gloom" is irrelevant. Policies should be geared to promote prosperity!... and tax increases at this point in time are certainly not a mechanism for economic stimulation by any stretch of the imagination.
What would be the purpose of tax increases? To allow the government to spend more, of course. Are you suggesting that tax increases will stimulate the economy? Give me a break! :sick:
TM
Here's why...
My holdings in Citi had reached well over a quarter million $, and Citi has made serious gains day after day after day recently, and is up considerably for the month.
I have to consider that Citi might need to cool off for a little while soon. I am not attempting to hit any kind of target here... but I do need to catch my breath for now.
I will get right back in the market very soon with a more diversified portfolio, as in the past, although I will once again include the purchase of a significant number of Citi shares as part of that more diversified portfolio.
I'll keep you posted.
TM
Of course not! But I just don't think it will necessarily hurt the economy either. Hey, I hope we don't have to find out and the tax structure stays as is.
Thank you! Yes, that is exactly what he was promising. But the big argument is about those well to do folks that may have to pay more and if so, that would spell trouble for the economy.
TM
TM
Look. This entire debate hinges on whether or not business and the economy in general would be adversely affected if the Bush temporary (I continue to include this word since those tax cuts were indeed suppose to be temporary) are discontinued. Where we differ on this topic is that you guys (most all of you I think) are of the opinion that Obama is an idiot and if the well to do have to pay more taxes, doom and gloom will follow. I do not believe that Obama would support such a move if he thought the economy will go back in the tank. I am sure they are weighing all possibilities right now. I sincerely hope that the Bush tax cuts are allowed to continue and we will all live happily ever after.
But Charlie, the entire situation has changed. We have near record unemloyment and bank coverage ratios have risen. They used to be 1.05-1.10. They now are largely 1.20-1.50. You need multi-year renewable revenue to get near or beat the bottom of the ratio spectrum. I am very fortunate as I have that and "must have" data, but most businesses d'ont. Banks almost d'ont want to lend to businesses that have too high of one-off revenue sources as any downturn in the economy can kill those businesses and threaten the loan. In those cases a 1.40-1.50 or even higher coverage ratio is needed. Now take into account that a high majority of $250k+ incomes are derived from small business ownership and you have a serious problem because while those owners may repot $250K-1mln a year in taxable income (most are close to $250K), the actual cash flow they derive from that income on a pre-tax basis is half to 2/3rds of that. The other half to 1/3rd services loan payments. So any increase in tax or tightening of bank ratios kills off business expansion. I think the mistake you are making is looking at $250K as a W-2 wage. But in business ownership a $250k repoted income is more like a $150-160K W-2.
For anyone that doesn't know - coverage ratio in an LLC or Sub-chapter S is EBITDA divided by interest, fixed asset purchases, distributions for tax liability or direct tax liability payments (these are always equivalent to individual rates, not business tax rates), and either scheduled 12 month debt prepayments going forward or trailing twelve month debt payments or annualized debt repayments based on the last payment. So if you have $100K of capital expenditures, 2mln debt payments and 2mln tax payments and $900K of interest your fixed charges to cover are 5mln. You need an EBITDA of $6-7.5mln. Even though you have $1-2.5mln cash to spare you c'ant hire with it because it endangers your forward ratio. You either split that excess cash flow with the bank and distributions to yourself (usually a range of 65-35 to 80-20 in the banks favor) or you roll the cash you can distribute to yourself into the business as a safety net for the bank. The only way you can hire is growth in income so that you far exceed the ratios the bank requires Remember even though your debt goes way down the principal payments are high and sometimes they rise as an offset to the lowering interest expense on the loan. The bank pretty much freezes your fixed charges as much as they can for the life of the loan. You can't hire till you grow and now you have to grow beyond the new higher taxes Obama wants to install.
Bottom line is the economy is in much worse shape than when Bush put in the lower taxes and bank demands for the sector that not only hires most of America, but also keeps the jobs here are the highest I've ever seen. So even considering to eliminate the Bush cuts (which we all know were intended to stay permanent unless inflation reared its ugly head) is suicidal at this point. It's not as simple as Obama's math tries to make it. That is a BS political sell point. Just look at it from businesses ownerships viewpoint. Higher taxes is a futher tightening of a bank ratio that prevents business expansion. That is why it is a killer for the economy. The ordinary W-2 earner takes that money from spending it in the economy and pays taxes with it. The business owner pays the tax too and c'ant expand his buisiness. That is a lose-lose scenario for the economy and that is what the rest of us see.
Instead of all the silly stimulus spending that Obama made, a better solution would have been to stimulate bank lending and insure the loans given to small business. That would have stimulated job growth. All the stimulus spending is a failure if it's next step is increasing taxes to pay for it. It's like the farmer that throws good seed onto bad land. It w'ont grow.
I warned you Charlie, d'ont get me started on Obama. Is he stupid or smart? He's both IMO. He's book smart and street stupid.
Tag, I was just commenting what he was promising and that's all. Look, I don't want taxes to be raised for anyone either, but I will be upset if taxes are raised for everyone. That would mean he did not keep his promise. And by the way, I have nothing against being wealthy either.
I will keep it simple since I have spent too much time on this forum today and not enough time at my job. We are trying to improve the bottom line before the tax hikes
You make great points. I sincerely mean this. It is not at all meant as a joke. I wish that Obama had appointed you as the Secretary of the Treasury. As I stated before, I hope that things (taxes) are kept at a status quo.
BTW your call for a slow moving winter system for late February in this area was phenomenal. I only got a foot of snow but NYC and north got 2-4' as they were in the trajectory of the on shore moisture flow while being cold enough. That was a very strange storm as it rained and was warmer the more north you went. It's almost unheard of and a very rare set-up for NYC to get 2' of snow while Albany, 130 miles due north, gets all heavy rain and 10-15 degree warmer temperatures from the same storm.
TM
I remember that weird system like it was yesterday. What happened is that the surface low got captured underneath the upper air low and it was basically trying to circulate around the upper air low Very similar to a storm here in IA in January). It racked over toward southeast MA and then tracked to the west towards CT. NY City never got into the warmer air as the winds around the low were ostly from the west and northwest. However, north of the low pressure center track the winds were from the east and northeast transporting mild oceanic/maritime air from the north Atlantic westward towards central and northern New England. Even a place like Burlington, VT was well above freezing with periodic rain. At the same time heavy snow was falling in NY City. Incredible storm.
We had a similar situation here in IA sometime in January when an intense surface low tracked northeast towards far southeast IA. It then tracked west northwest toward northwest IA, then south and east again toward southeast IA. In other words, it made a complete loop. With that situation a place like Des Moines, where I live had heavy snow with temperatures in the teens and west to northwest winds. in northern IA and much of MN, it was raining with temperatures in the upper 30s to near 40 with east winds that were transporting mild air westward from the Great Lakes.
Well as long as you are going back to work how does Myrtle Beach weather look to you from 8/14-2?. Do you see the SE opening up to potential tropical activity.
That is obviously a long ways down the road for me to give much detail. However, I do have some ideas. My thinking at this point is that it will be rather typical weather for that time of year in Myrtle Beach. That means highs will be in the low 90s and dew points in the 70s. I am of the opinion that this hurricane season will be surprisingly quiet. The easterly winds aloft over the Tropical Atlantic seem to be strong (and staying that way) to induce major hurricanes. But remind me again when we get within a week or so of August 14.
TM, I thought I informed everybody at the car forum a couple years ago that I got my Master's in Meteorology from Iowa State University. I started a private weather consulting company here in central IA with a fellow Meteorologist in the early to mid 1970s. When I first came to IA, I thought I would be here for 2 years and then bolt back toward MA and probably work for the National Weather Service. But life takes on strange twists and turns. I also met my wife at ISU. She has an MS in Math and a minor in Computer Science. We raised two great kids (both graduated from ISU (our son in zoology and daughter in Botany). They are now happily married and have children of their own. Our son and his wife were blessed with twin girls about 3 months ago. Our daughter gave birth to our first granddaughter on Dec. 30, 2007. Our daughter is expecting her second child on Dec. 21 (Winter Solstice).
The unfortunate thing is that both our kids and their spouses live far away from us. (Seattle and the Detroit area). Our son-in-law will likely accept a new job in Chattanooga, TN (Volkswagon plant) and they will be moving in the near future. There! I told you more than you needed to know.
There were so many slow moving storms or unusual storms this winter. Amazing to me was the Feb 5th storm. In Colts Neck I got 18". NYC (just 30-35 air miles away) got nothing. Northern Staten Island and lower Brooklyn got 1-3" and southern Staten Island got 3-6". Below that you had a wide swath of 6-8" snows and then you jumped to 18"+ in a hurry. I buy bagels 10 minutes from my house and they literally had half the snow I had. I never saw a cut-off like that before. The Feb 10th storm dropped another 2' on me and it stalled off Atlantic City and rapidly intensified.
Charlie - I know you're from Mass. Would you say the Boston weather is among the toughest in the US to forecast. It's always been my thought that it was.
BTW here's one of the best photos I have from the great blizzard of 1996. All the snow on the ground in this shot was from that storm. I just found the photos that I took in that storm. It took me 3 days to clear this driveway and I had a 7' dense wall at the foot of it from the snow plow. In fact this photo was 24 hours after the last snow flake fell so this is compacted down from how high it was a day earlier.
http://tinypic.com/view.php?pic=v3fxja&s=3
It is good to know things about each other. Makes it more like a family. Similar interests etc. I find that interesting that VW is already hiring for their new plant. I hope they do well here. I am a big fan of their diesel engines. I would buy a VW/Audi CUV 4 cylinder TDI in a minute. So far only V6 TDI.
Not to go into any off topic discussion. Are you for or against Cap n Trade as being proposed? In your expert opinion is CC mostly MM? I personally believe CnT will be another job killer as businesses pull back in fear of another tax.
I have no doubt that you did... but either I missed that, or I forgot. Probably the latter, because my memory really isn't any good any more. My apologies. I do remember the recent addition of the twins however, so I guess my memory isn't a total wreck quite yet... just close.
Anyway, sounds like a great life adventure to me. You are blessed indeed, but the distance between you and the kids (and grandkids) is a tough one.
TM
Now that you've made it in the private sector, perhaps it's time to put your talented skills to work in the public sector and benefit all Americans. Maybe run for Congress?
You've no doubt got the ability and the credentials, and certainly enough connections. Unless you've got skeletons in the closet, I think it's worthy of consideration. You could really make a genuine difference.
No kidding here... I'm serious. Serious enough that I'll be glad to make the first campaign contribution. I'm not just making an idle post or casual compliment. Give it some thought.
TM
BTW - just saw a story on Fox that the average family earning $100K will see a 30% tax increase of $3,200 if they are childless and $4K if they have 2 kids once the Bush tax cuts expire. I hadn't done the math but that is much worse than I realized so take all my posts from yesterday and square them.
Yes I am in favor of Cap n Trade. I'm sure I had expressed my views on Global Warming about a year or two ago on the car forum. I DON'T want this to go into a long political discussion about Global Warming. I definitely agree there is such a thing as Anthropogenic Global Warming. To me the evidence is overwhelming. Let's just leave it at that. BTW, June was the warmest June on record globally and this year (2010) is in line to be the warmest on record. I will not respond to anything else about this (Global Warming) because it will become a pissing match. Some of you disagree and that is fine for right now. Hopefully, there will be even more conclusive evidence in the next couple years so that even the strongest skeptics will become believers.
Here is the statement that expresses my feelings about Cap and Trade:
Cap and trade commits us to responsible limits on global warming emissions and gradually steps down those limits over time. Setting commonsense rules, cap and trade sparks the competitiveness and ingenuity of the marketplace to reduce emissions as smoothly, efficiently, and cost-effectively as possible.
In your expert opinion is CC mostly MM?
I don't know what you mean by this.
07/28 18:23 CDT Obama pushes business bill as an all-American goal
Obama pushes business bill as an all-American goal
By JULIE PACE
Associated Press Writer
EDISON, N.J. (AP) -- President Barack Obama on Wednesday cast his latest
economic pitch as a matter of patriotism, urging the Senate to ditch its
partisan mode at least long enough to pass a package of tax cuts and loan
relief for small businesses. "This is as American as apple pie," the president
said.
On his way to his own political activity _ two high-dollar fundraisers for
Democrats _ Obama sought his own classic American setting. He ate a
meat-stacked sandwich and then spoke at the Tastee Sub Shop, a tiny one-story
building meant to serve as the essence of the American small business.
In Washington, Senate Majority Leader Harry Reid was hoping to schedule a
Senate vote on the small business bill for Wednesday evening, though he would
need Republican support for a vote that soon. Republican leaders said they
would like the opportunity to offer amendments to the measure.
"Surely, Democrats and Republicans ought to be able to agree on this bill,"
Obama said despite the consistent lack of any such consensus on Capitol Hill.
Obama said he told Republican leaders at the White House a day earlier that key
elements of the bill are ones that the GOP has supported for years.
"Helping small businesses, cutting taxes, making credit available," Obama said
from a presidential lectern that had been brought into the restaurant. "This is
as American as apple pie. Small businesses are the backbone of our economy.
They are central to our identity as a nation. They are going to lead this
recovery."
The bill in question is designed to help small businesses get the capital they
need to buy equipment, hire workers and expand their operations. Obama took the
opportunity to recite the stories of local business owners and tout his efforts
to help them before acknowledging that more government help is needed.
Associated Press writers Ben Feller, Charles Babington and Stephen Ohlemacher
contributed to this report.
I don't know what you mean by this.
I think you stated your opinion in the first part of the post. Climate Change is mostly Man Made. You are right we have a thread for that. Just wanted your opinion based on your background. Thank you
As many of you out there are painfully aware, congressional Democrats have been been struggling for weeks to pass an extension of unemployment insurance payments for the millions of people who have lost their jobs in the economic crisis. Republicans have blocked the UI bills repeatedly in the Senate over the past month and did so again today in the House. But between their failing votes on extending the UI lifeline, the Democrats have been having more success with a bill that is designed to actually stimulate the jobs market. The “State Small Business and Credit Initiative Act of 2010” (H.R. 5297) passed the House on June 17 by a vote of 413-0. Today, the Senate voted to break a Republican filibuster of the bill by a vote of 66-33.
The bill would limit lending to banks with less than $10 billion in assets, which means it would restrict the biggest 75 or so U.S. banks from accessing the fund. To give you an idea the bank sizes were talking about here, Bank of America holds about $2.3 trillion in assets, Fifth Third Bank holds about $112 billion, and City National Bank of Los Angeles holds about $20 billion. Easthampton Savings Bank, my community bank that has about 10 branches in my region of Wetsern Massachusetts, holds a little over $800 million. In addition to the $10 billion cap, the bill specifies that banks with less than $1 billion in assets are eligible to borrow more from the fund (factored relatively as a % of assets) than banks falling within the $1-$10 billion category.
According to the bill text, in order to get loans from the fund, banks would have to provide the Secretary of the Small Business Lending Fund “a small business lending plan describing how the applicant’s business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate.” The bill also spells out 9 items that the Secretary of the fund must consider when deciding whether or not to lend to a bank, including increasing small business opportunities in areas with exceptionally high unemployment rates, protecting American jobs, and providing funds to minority-owned business.
http://www.opencongress.org/articles/view/1951-Congress-Moves-Forward-With-a-Bil- l-to-Increase-Small-Business-Lending
In plain English it is a smoke and mirrors bill designed to get votes. Borrowing money for a small business will be the same as it is now. Unless you find a small local bank willing to go through the hoops to get the backing from the Feds to lend the money. Not much coming out of this Congress is good for America, that is just the way it is.
Helping small businesses? Oh sure, with an avalanche of newly required 1099's, and the increased accounting fees to go with it.. just for starters.
Cutting taxes? Baloney... He's full of it.
Making credit available? Jump through hoops and swallow fire and swords, and maybe, just maybe qualify for essentially nothing.
Obama took the opportunity to recite the stories of local business owners and tout his efforts to help them before acknowledging that more government help is needed.
I think LESS of Obama's help might actually be better.
TM
It's a stick covered with nice sweet sugar and no ice cream bar under it and when you're quickly done eating the little sugar it has - well you know the rest about what you can do with the stick.
This guy could sugar coat an end of the world asteroid. Great speaker, no substance. He's on the View tomorrow (11am here in NY area) , taped it today. He thinks he's still campaigning as a rock star. That's really his problem. He's all about the anticipation of the Presidency in his campaign, and not about the reality of what he has to do. You campaign on what you think you can do, you act on the realities that you never knew about in the anticipation process. If I did a business acquisition tomorrow and found a changed economy or situation for the worse six months later I can't stick to the plans I had pre deal. Obama can't get past that. So he's either a pure socialist in nature or he's stubborn, or worst of all cases - he's both.
Good excuse to go out and buy some Basque stocks (aerospace?).
Speaking of off-topic matters, we do have forums for GW and Obama.
I'm not going to Boise Jaialdi, I´m afraid.
I'm getting physically stronger and more agile but anyhow this is taking more-a-while than I'd thought a month ago. Still not running or jumping, but I drive and I had flown overseas. Most of my time I do physical rehab. and then relax with swimming, soft walking, reading and writing for the job. Not a bad summer.
Regards
Jose
PS: For the most curious in the thread
boisebasques
Boise Jaialdi
Even though progress has been slower than you would have liked, I am happy to hear that you are indeed making progress Jose.
You have not chimed in on the discussion about the effects on small business if the Bush tax cuts are allowed to expire. I think I am all by my lonesome on this topic at least here on this forum. I would be interested to hear your opinion on this if you have one from your perspective in Spain.
President George W. Bush left behind a ticking time bomb that is set for Dec. 31, 2010. If Congress does nothing, taxes on wages, capital gains and dividends will leap, the estate tax will be resurrected at a 55% rate and the pesky alternative minimum tax will hit an additional 21 million taxpayers on 2010 returns.
Neither Democrats nor Republicans have an interest in letting that happen. Doing nothing would, Goldman Sachs economists estimate, amount to a tax increase equal to 2.5% of gross domestic product, the value of goods and services produced each year. But what Congress will do and when well, as one official puts it, this has become a gigantic Rubik's cube that everyone is twisting at the same time.
This is Washington, so take the politics first.
House Democrats are torn between taking a vote before the elections (so members can boast of having stopped a middle-class tax increase) and waiting for the Senate (so Democrats from rich suburban districts don't get stuck voting to raise taxes on over-$250,000 voters only to find the Senate will extend them for everyone.) Senate Democratic leaders promise a September vote, but it's far from clear they have the needed 60 votes.
The smart money in Washington says nothing gets done before a postelection lame-duck session.
Given the distressingly sluggish economy recovery, few see this as a propitious moment to increase taxes on anyone. But given the pressure to do something to reduce the budget deficit and the political appeal to Democrats of socking it to the rich, the argument is over how much damage raising upper-bracket taxes would do.
http://online.wsj.com/article/SB20001424052748704895004575395221598124794.html
The Gulf of Mexico only represents a very small percentage of the planet's water, even less than 3%, of course. So, there is really no reason to be concerned about it's "bleeding" oil. How could it possibly effect any of us? Why not just suck as much oil out of it as possible without regard for its vitality? It can easily be sacrificed... right? Of course, let's not pay any attention to the REAL problem... our government's energy policy itself.
In the same manner, let's suck more money out of the top 3% of taxpayers (that ALREADY pay the most!). Why should we be concerned for their economic vitality? Afterall, it won't harm the vast majority, so they can easily be sacrificed... right? Of course, let's not pay attention to the REAL problem... our govenrnment's wasteful spending policy itself
Forget about the REAL problems, and let the politicians divert our attention to the 3% of taxpayers that they call rich. Afterall, this group already pays MORE taxes than everyone else... and does so at a higher rate... a MUCH higher rate. Why not just bleed them even more?
But, here's the catch... the REAL government policy is to tax EVERYONE, and make us think it is only the top 3%. And the REAL government policy is to make us think that the top 3% can afford to be "drilled" even more, bleeding them without mercy, and trying to convince us that it will cause no negative affect on the rest of the economy.
The REAL problem is horrific wasteful government spending, and an administration that wants to reach into American small businesses and American indiviiduals pockets to pay for it.
Dear President Obama and United States Congress:
You want to find the REAL problem with the economy?... and where the REAL solution SHOULD be? Take a good look in the mirror!
TM