Let Them Eat Cake.. Just Not MY Cake!

I got suckered into a fascinating exchange today on Facebook when one of my friends posted the following status: "who informed this moron President that $250K a year is wealthy... idiot."

Normally, I try to stay away from such nonsense, but since I know this friend personally--or at least I used to--I just had to respond.

My contention with that particular statement was that the poster lacked some perspective. Thus, I posted the following: "$250k is more than 6 times the average U.S. income.. you try to tell someone making less than $40k a year that people earning $250k aren't rich.. and they would probably call you a moron or idiot.."

I see this all the time in sports. People making uninformed statements which show an utter lack of perspective. Not sure why so many of us feel as if we know more about a particular subject than those who get paid to know about that particular subject.

Compared to the average fan, I have a more informed knowledge of the teams and sports I cover because I get paid to. I talk to the players, coaches and executives to obtain the information I need to give the viewers an accurate depiction of what they have seen or are about to see.

However, I would never suggest I know more about basketball than Phil Jackson, more about football than Pete Carroll or more about baseball than Joe Torre. It's their job to know more than me. And they get paid handsomely for it.

So with that same mindset, how can someone who's never worked in economics or even studied the subject think they know more about it than someone who has? I know, I don't get it either, but check out some of these responses.

"Is income the new form of prejudice in our country? Punish success? That's great! I will tell my children to dream BIG but please don't dream bigger than $250 or your government will vilify you! What happens when everyone stops at $250? Who will pay the way then?"

"It's like people are being punished for working hard and being successful!! and who the heck is Obama to just pick a number and decide that it's rich or poor?? I don't know if I can take 4 years of this idiot ruining our country. And don't even get me started on universal health care.....God help us."

I have always felt people are entitled to their opinion, I just like for those opinions to be informed opinions. Your opinions are only as strong as your arguments. If you don't have any facts to support your arguments, your opinions will be fairly hollow.

I am not trying to say I am any expert on economics--far from it actually. However, I have done my share of research. Couple that acquired knowledge with my own personal experiences with money and you get the following response:

"..their has always been a price to pay for success.. in our economy, there is only so much money.. so in order for you to make more.. someone else has to make less.. just like eating a cake.. if you are eating more of that cake than other people.. shouldn't you be expected to pay for more of the ingredients for the making of the next cake? I, for one, like cake.. and I don't mind paying more for a bigger piece!"

I realize this argument could go on forever with neither side relenting, but I think this entire situation was summed up best by the following Facebook post:

"Basically its safe to say that Americans, and i use that loosely, want their cake and eat it too. They want all of the benefits of highly taxed countries ( like the ones in the EU) for things like socialized health care, paid education, etc, without having to actually pay for it. If someone could figure out how to do that, they'd be a VERRRRRRY smart person."

And a very rich one, at that!

NBA To Cut 80 Jobs

As the economy continues to struggle, moves like this one by the NBA may become somewhat of a norm. It will also be interesting to see how individual teams are affected as well.

LONDON -- The NBA is laying off 9 percent of its work force over worries about the U.S. economy, commissioner David Stern said.

"We made a decision some months ago that the economy was going to be a bit wobbly, so we began a belt-tightening that will result in a work-force reduction of about 9 percent domestically," Stern said Sunday, speaking before an NBA preseason game at London's O2 arena.

This translates into about 80 jobs, he later told Reuters.

"There is a season-ticket renewal rate decline, and new sales are also being hit," he said. "My guess is when [the regular season] kicks off, we will be down modestly in season ticket sales."

Obama Directly Addresses America In Two-Minute Ad: Plan for Change

Visit BarackObama.com/plan to read Obama's plan for the economy now.

Tax Plans: Obaba vs. McCain

There seems to be quite a bit of confusion about the differences in the proposed tax plans of Barack Obama of John McCain. A recent article in The Washington Post broke down the numbers according to annual salaries.

I will be honest and tell you that my tax burden will go up under Obama's plan. However, losing a few additional thousand dollars a year will not hurt me financially. I am much more concerned about the larger population of tax payers. Plus, if the economy grows under Obama has it has historically done under Democratic presidents, I will recoup that money down the road. (see earlier post)

So, check out the numbers below and decide for yourself which plan makes the most sense for not only you, but for the country.

Obama and McCain Tax Proposals
According to a new analysis by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, Democrat Barack Obama and Republican John McCain are both proposing tax plans that would result in cuts for most American families. Obama's plan gives the biggest cuts to those who make the least, while McCain would give the largest cuts to the very wealthy. For the approximately 147,000 families that make up the top 0.1 percent of the income scale, the difference between the two plans is stark. While McCain offers a $269,364 tax cut, Obama would raise their taxes, on average, by $701,885 - a difference of nearly $1 million.

(Courtesy: The Washington Post)

Is History Siding With Obama’s Economic Plan?

A friend sent me this New York Times article, which examined the effect Democratic and Republican presidents have had on the national economy.

The article includes some really pertinent information, especially as it relates to the upcoming election.

"Simply put, the United States economy has grown faster, on average, under Democratic presidents than under Republicans.

The stark contrast between the whiz-bang Clinton years and the dreary Bush years is familiar because it is so recent. But while it is extreme, it is not atypical. Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats.

That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut."

So regardless of your views on the upcoming presidential election or your opinions on the differences between Barack Obama and John McCain's respective economic plans, the article definitely makes for an interesting read.

Is History Siding With Obama’s Economic Plan?

US Deficit Zooming To Half-trillion As Bush Leaves

What if you gave me $236 only to find out later that I now owed several people in excess of $482? So, not only did I blow through the money you gave me, but then I turned around and spent another $482 that I didn't have.

Well, that's exactly what the George W. Bush administration has done since taking office, except we aren't talking dollars, but rather BILLIONS of them.

That's right, President Bush will leave office with the United States facing a record deficit of nearly $500 billion. How's that for a welcome gift for Barack Obama or John McCain?

As bad as that number is, I fear it will only get worse if the Republicans run the White House for the next four years. Senator McCain has publicly admitted several times that the economy is not his strong suit, thus one could conclude that he will be more likely to be swayed by Republican economic strategists, and that would mean more of the same from the White House.

What? You're saying just because President Bush subscribed to a certain economic plan that it doesn't mean Senator McCain would do the same thing if he became president? Really?

Well, I've always believed the reason we study history is to prevent us from repeating mistakes from the past, but evidently the Republicans do not believe in such a philosophy.

Check out this excerpt from an article written by Robert Freeman on CommonDreams.org in October of 2004:

When Reagan took office in 1981, the national debt stood at $995 billion. Twelve years later, by the end of George H.W. Bush’s presidency, it had exploded to $4 trillion. Reagan was a “B” grade movie actor and a doddering, probably clinically senile president, but he was a sheer genius at rewarding his friends by saddling other people with debts.

Bill Clinton reversed Reagan’s course, raising taxes on the wealthy, and lowering them for the working and middle classes. This produced the longest sustained economic expansion in American history. Importantly, it also produced budgetary surpluses allowing the government to begin paying down the crippling debt begun under Reagan. In 2000, Clinton’s last year, the surplus amounted to $236 billion. The forecast ten year surplus stood at $5.6 trillion. It was the last black ink America would see for decades, perhaps forever.

George W. Bush immediately reversed Clinton’s policy in order to revive Reagan’s, once again showering an embarrassment of riches on the already most embarrassingly rich, his “base” as he calls them. He ladled out some $630 billion in tax cuts to the top 1% of income earners. In true Republican fashion, they returned the favor by investing over $200 million to ensure Bush’s re-election. Do the math. A $630 billion return on a $200 million investment: $3,160 for $1. I’ll give you $3,160. All I ask is that you give me $1 back so I can keep the goodness flowing. Do we have a deal? Republicans know return on investment.

But the cost to the public has been a return to the exploding deficits of the Reagan years. Bush blew through Clinton’s surplus in his first year. The 2004 deficit reached $415 billion, a record.

And it's only gotten worse sense.

Look, I am not saying I am some sort of economic genius. Heck, I didn't even take one money-related class in college. However, I do have sense enough to know when something isn't working that I should try something else. And the republican economic strategies simply do not work for the entire population.

Giving the wealthiest people tax breaks with hopes of them investing that money on Wall Street is not a proven means of boosting the economy. It never has been. What really moves the stock market is when companies show positive gains in their annual projections, and that money does not come from investments, but rather people and companies actually buying their goods and services. And we all know that goods and services are mostly purchased by working and middle-class families.

If Ronald Reagan taught us anything, it was that the economy does not trickle down, but rather up!

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/29/AR2008072900539.html