Saturday, August 20, 2016

How Much Of Your Tax-Paid Federal Tax Dollar Goes To Each Federal Program?

One thing that is pretty scary is how very little the average, or any American taxpayer and voter really knows about where their tax dollar goes in the first place.

We are having a Presidential contest right now where the most 'important' things seem to be what one candidate says or what the other candidate has done wrong with emails and contributions.

Both are 'important'. However, they pale in comparison when you think about what they and the next Congress are going to do with YOUR tax dollar each and every day for the next 4-to-8 years while in the White House.

That is what we are doing, aren't we? Electing someone to lead this entire nation of 322 million people and lead the process to make decisions over how we fund everything in the country which not only has domestic ramifications but international as well.

And if you ask your spouse, partner, friend, family or colleague nearby right now, dollars-to-doughnuts they have no idea of where their taxpayer dollar is being spent right now, aside from the fact that they don't have that dollar in their pocket to spend on their families and what they want to do with it.

We grabbed the chart above from President Barack Obama's White House website where this simple calculation was posted up until 2014 but for some reason, has not been updated for 2015 and 2016 figures yet.

Go ahead and put in the amount of money you paid to Washington last year in total from your income, capital gains, payroll and any other federal tax you may have paid and see what the chart spits back out to you.

If you are an average American, you paid about $9000 in combined federal tax last year which is the figure we used for the example above.

Once you calculate your percentages and raw tax amount paid, stare at it a little while and ask yourself:

'Is that what I really want my federal tax dollar being spent on? And in that magnitude and amount?'

For example, $816.30 of that $9000 paid went to pay interest on the national debt. The national debt is the accumulated debt rung up by President Bush and Obama and Congresses over the past 16 years when neither have decided to be the fiscally prudent leaders we need and help facilitate making the decisions on the large public policy decisions that we elected them to do.

It has been the most damning indictment of our current leaders simply because the number has gone from about $5.8 trillion in overall gross national debt in 2001 when President Bill Clinton left office to $20 trillion today. 

Neither President Bush nor President Obama nor any of the Congresses since 2000 get any accolades for doing anything right when it comes to balancing federal revenues with federal expenditures. They are all culpable and blameworthy regardless of political party or good or bad intentions.

$20 trillion in national debt accumulation in relative peacetime compared to out-and-out war such as we experienced in World War II is $20 trillion in national debt accumulation no matter how you slice it.

And just wait until interest rates rise back to a more 'normal' level on T-bills and longer term US bonds. The next generation of taxpayers might see $2000 of their yearly $9000 tax payment go solely to pay off the interest on even more debt unless the next President and Congress puts a halt to this fiscal spiral of insanity and/or figures out how to stimulate or at least allow the economy to grow robustly again, unlike under President Obama who still has not figured out the fallacy of his economic philosophy and policies.

Take a look at Health Care. It is now the largest combined expenditure out of Washington when you add Medicare and Medicaid together. It exceeds our national defense spending by 3.5 percentage points.

An average taxpayer paid $2474 to pay for the health care of millions of other Americans last year when many of those same average American taxpayers were being hammered with rapidly escalating premiums, deductibles and co-payments on their own health insurance plans.

That same taxpayer paid $2152 for our collective national defense.

Go to the White House website and see what you paid in actual dollars for each program above. If you are a very high income taxpayer, your amounts are understandably going to be much higher than the average of $9000 noted above.

The rest of us should thank you and shake your hand every time we see you then. Mainly because you are paying for the vast preponderance of ALL of these programs above, not the rest of us. 50% of American taxpayers don't pay any income tax at all and only pay payroll taxes that ostensibly pay for SS and Medicare (but they really don't cover the entire cost of either, contrary to public perception)

The top 1% of all American taxpayers now pay approximately 1/2 of all income tax in America according to a CNBC report

Good Grief! Talk about a top-heavy tax system. Why would we ever want to dissuade wealthy people from making more money? They need to keep making it so they can pay the taxes everyone wants paid to fund the programs they like!

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today

Sunday, August 14, 2016

The Lost Obama Years: Want 8 More Years Of This?

We generally prefer to talk about public policy issues with facts and references to original data sources since we believe that is truly the only way to be honest with each other and then try to find the best solutions for us all as a nation.

There has been a lot of pirouetting, back-flipping and spinning coming out of the Obama White House and his economic advisors lately about just 'how great!' the American economy is today.

Hillary Clinton and her team, many of whom are from the Obama worldview of how to run government and the economy, are parroting the same lines as always:
  1. 'Things are just great!'
  2. 'Times under Reagan and Bush 41 and 43 were just terrible!'
  3. 'Trust in us and we will set you free!'
Well, things just are not all that great economically. It hasn't for the last 8 years.

We just got back from a trip through eastern North Carolina. In small town after small town, all we saw was boarded-up businesses, deteriorating homes and empty streets.

One town was so depressing and dusty that one could have sworn it was a ghost town from the Old West.

The question we will put to you, the jury representing the American people today, is this: 

'Do you really want 8 more years of the 'Lost Obama Years' as we can now honestly call it?'

Take a look at this chart above (all in billions of dollars) All we have done is taken the CBO 10-year projections from January 2008 and compared them to the CBO 10-year projections issued this summer.

Remember, at the beginning of 2009, the financial crash had already started and the economic and financial analysts were busy downgrading their forecasts for the American economy. Much of that was baked into their forecasts in January, 2009 so the slamming impact of the Crash of 2008 was already available to them.

What has basically happened since President Obama took office in 2009 is threefold:
  1. The American economy has under-performed CBO projections by at least $1.045 trillion. Some estimates put it at $2 trillion in lost economic potential.
  2. The debt held by the public is over $4 trillion higher than otherwise projected in 2009.
  3. The annual deficits are up over $200 billion more than projected and heading back up in an escalating manner to over $475 billion in 2019, not downward towards zero as it should be.
There was a lot of euphoria when the Bureau of Labor Statistics released data recently that pronounced '255,000 new jobs were created in July, 2016!'


What most media analysts failed to tell you was that anywhere between 100,000 to 150,000 of those 'new' jobs were just part-time jobs, a disturbing trend that started in 2009 as a result of the recession and as a response to mandatory compliance with Obamacare that has failed to dissipate even 8 years later.


Here's our take on all the economic numbers put out by the Obama Administration and the news media:

'If these sorry economic numbers had been produced under President George Bush 43 or any other Republican President, you would have thought there was blood in the water and sharks were splashing all about'

Just to repeat an old refrain:
  • There has been an average of under 1.76% per year GDP growth over all 8 years of President Barack Obama.
  • First time any modern US President has not presided over at least 1 year of 3%+ GDP growth
  • 2Q economic growth was a truly dismal 1.2%.
  • Economic growth begets job creation and general wealth creation for all Americans.
  • No economic growth hurts people at the middle and lowest economic levels in our society the most since they depend so much more on income from wages versus income from investments.
  • President Obama's policies of more taxes and far more regulation on the American economy have put the brakes on the economy, not helped return it to the normal 3%+ annual growth that has been the norm for decades in America
We can't think of one economic boom in modern American history that was preceded by a massive increase in the Big 3 of economic disincentives imposed upon the economy by the President or Congress in charge at the time: 

Taxes. Regulation. Federal spending.

There was hardly any economic recovery during the entire 11-year period of massive federal spending after the Great Depression started . When it did look like the economy was about to break out of its long slump in 1936, another major recession occurred that drove unemployment back up to 19.2% up from what the FDR Administration officials were then touting as 'major progress', 14.3%.

The economic malaise under FDR lasted 9 years from 1933 until the US entered World War II in 1942. The massive onslaught of federal spending did not solve the economic problems faced by our parents, grandparents and great-grandparents; many economic historians say his policies prolonged it.

Unemployment averaged 18% during Roosevelt’s first two terms in the White House. Over the course of those two terms, U.S. industrial production and national income fell by 1/3, not expanded. Despite billions of taxpayer dollars being spent to do the opposite.

We are about to end our 8th year of sub-par, near about negligible economic growth under President Obama.  His top-down-from-Washington heavy-handed, high tax and non-effective federal stimulus government spending approach is now proven not to work. At all.

If you look closely at every economic boom, including the ones started under Democratic Presidents John Kennedy and Bill Clinton, they were triggered by the passage of a series of taxes cuts coupled with pledges and promises to reduce federal regulation and hamstringing of American business and hold the line on federal spending and be fiscally mature adults about everything during their terms.

In other words, the successful Presidents gave American business, both big and small, the most important things they can have when it comes to expanding their business and hiring more people:

More Freedom and Confidence In the Future. President Obama did not succeed at doing either and Hillary Clinton is promising to continue his economic and fiscal policies and in many ways, expand them considerably.

JFK defended his tax cuts by saying something to the effect of business being a friend of people who like to spend more money on federal programs because 'without their taxes, we won't be able to spend it on programs we want to spend it on'

At least he was pragmatically honest about it.

If you think that everything is going great, and you think the grow-government-first approach is the way to create tens of millions of new full-time jobs over the next 8 years, then Hillary Clinton definitely is the person you should vote for as President in November.

There is almost a 100% chance she will follow the FDR/Obama 'Heavy Hand of Government Model'.

Not the 'Allow The American Economy Freedom To Grow Model' that Ronald Reagan employed as did President Bill Clinton once Congress came under Republican control in 1995 and he worked with them to balance the only 4 budgets we have seen in our lifetimes.

charts from CBO long-term projections, the first from Jan 2009 and the second from summer 2016

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today

Saturday, August 6, 2016

Was $400 Million in Unmarked Bills 'Ransom' Or Not?

Things just keep getting
curiouser and curiouser
the more we look at the
Iran Nuclear Deal, yes?
Believe it or not, aside from the whole question about whether the Iran Nuclear Deal was a 'good idea' to begin with, and the second question about whether $400 million paid in cash was 'ransom' in conflict with centuries of standard American policy to never negotiate with terrorists who take American hostages, there is a fundamental federal budget question to ask:

'Out of which federal fund was this whole deal consummated?'

We worked for a fine gentleman who was CEO of Harris-Teeter before he ran for Congress in 1984, Alex McMillan who knew more about budgeting, accounting and fiscal management than perhaps any Congressman before or since he served from 1985-95.

He used to always say this: 'If you want to see what someone's policy is in any field, business, government or personal account, follow their spending decisions and how they allocate their money. That will tell you what their priorities are.'

Let's take a look at how the Obama White House handled the financial transaction to complete this Iran Nuclear Deal so you can determine for yourself what you think the Obama priorities were.

First: On January 21, 2016, the White House told the WSJ the entire $1.7 billion was 'wired' to the Iranians as part of the completion of this past arms deal that Iran says they were owed $400 million.
'The U.S. Treasury Department wired the money to Iran around the same time its theocratic government allowed three American prisoners to fly out of Tehran on Sunday aboard a Dassault Falcon jet owned by the Swiss air force'
Hold it right there: If the money was reported as having been 'wired' in January, why then the need for $400 million in cash on pallets in small denominations in Dutch guilders, French francs, euros and American dollars, unmarked and untraceable, of course?

That begs the question: 'If $400 million was sent in cash on pallets to Tehran in an unmarked jet in the middle of the dark of night prior to the release of the 4 hostages, as we now know happened for sure, where the heck did the other $1.3 billion go? And was it ever sent by wire transfer to a central bank in Tehran from anywhere as is the case with normal transactions government-to-government?

Second: The White House is trying to spin the $400 million as Iran's money from the canceled arms deal in 1979 that took place before the overthrow of the Shah of Iran but before American arms were shipped to Tehran. Perhaps, but if it was just that, the $400 million in cash received in 1979 was supposed to have been held in an escrow account since 1979.

Escrow accounts typically do not pay interest unless agreed to during the negotiations prior to the agreement being executed. Escrow accounts are typically established to insure the pure safekeeping of the cash until the deal is consummated or reconciled later.

However, it appears as if the Obama Administration and State Department acquiesced once again in negotiating with our adversaries and gave them the imputed accrued interest on that amount as if it had been earning interest for 37 years.  Which it hadn't.

$1.4 billion in past accrued interest they came up with. Somehow.

The Obama Administration is implying that this $1.3 billion in 'accrued interest' is coming from some financial investment such as a bond in which that $400 million originally received from the Shah of Iran in 1979 was deposited and has been just earning and compounding interest since then.

Nothing could be further from the truth.

This $1.3 billion did not come from any earned interest in such a manner.

Care to guess where that $1.3 billion came from?

Your federal taxpayer dollars.

Right out of a line item in the Treasury Department which is a permanent Treasury Department fund established to cover court judgments and settlements which is annually appropriated funds during the normal appropriations process on Capitol Hill.

Again to reiterate and re-emphasize: This $1.3 billion in imputed accrued interest is not from 'actual' paid accrued interest from the $400 million originally received in 1979. It came from your hard-earned taxpayer dollars. US federal tax paid for through and through.

Here's the link to the Judgment Fund at the Bureau of the Fiscal Service at the US Department of Treasury out of which this $1.3 billion was paid. Check it out for yourself.

So, to summarize:

  1. Was this a 'ransom' paid or not?
  2. If it was, then what is Congress going to do about it in terms of punishing President Obama and Secretary of State John Kerry for engaging in such surreptitious activity?
  3. If it was not 'ransom', then why all the secrecy what with the unmarked plane arriving in the dead of the night like it was  in the movie 'Casablanca' or something and all the pallets of $400 million in cash in unmarked bills from a bunch of different currencies?
  4. What happened to the rest of the $1.3 billion in accrued interest that was supposedly 'wired' along with the $400 million (that arrived in cash on the plane in the dead of night)?
  5. Why does it look like the Obama Administration is lying about this and trying to cover it all up?
To be honest, the only time we have ever heard of cash being used in government circles is to bribe a politician or a dictator of a foreign government or to cover up a secret arms deal that no one wanted to be in the public's eye in the first place.

Do the names Oliver North, Fawn Hall, Elliott Abrams or John Poindexter mean anything to you?

They were involved in the Iran-Contra Affair in the 1980s where lots and lots of cash was exchanged for arms and hostages and Iran and Israel and the Contras in Nicaragua were involved as was the terrorist group, Hezbollah, supported by Iran and should read the whole story sometime because back in 1986, the Democrats went bonkers on Capitol Hill once they found out about it being surreptitious and illegal and all that.
'In 1985, the Reagan Administration sought the release of American hostages held in Lebanon by Hezbollah, and Iranian-backed terrorist organization. The U.S., without Congress’s knowledge, clandestinely sent American-made weapons to Iran through Israel in exchange for the release of the hostages.
The cash generated from the exchange was then used to purchase weapons that were funneled to the Contras, a guerrilla organization fighting the Sandinistas in Nicaragua. The Americans held in Lebanon were released, but Hezbollah took more American hostages afterwards'
If you don't think the current Iran Nuclear/Hostage/Arms Deal Settlement episode raises the same sort of eyebrows on the Republican side of the aisle as Iran-Contra, you haven't been paying a lot of attention over the past 8 years.

Things just keep getting 'curiouser and curiouser' as Alice said in her 'Wonderland'.

Maybe the truth will come out in the House hearings soon. Maybe there is an aspiring young honest and fair and balanced reporter out there who really wants to do some serious investigative journalism like Woodward and Bernstein did long ago.

Then again, maybe pigs will fly one day as well. One of the very real dangers to our American democratic republic is when the free press decides to choose one side or the other and become a mouthpiece or spokesman for either party instead of presenting the truth to the American people.

Maybe one day, we will see a return to a truly free press as well, one free from the constraints of being political first  so they can become newsworthy and trustworthy once again.

Do You Want Better People to Run for Public Office?
Support the Institute for the Public Trust Today

Visit The Institute for the Public Trust to contribute today