Sunday, November 3, 2013
Liberty Is My Middle Name: All Taxation Violates the Thirteenth Amendment
Liberty Is My Middle Name: All Taxation Violates the Thirteenth Amendment: Before I make my case, let me present a disclaimer: I don't believe anyone in the United States of America, official or otherwise, woul...
All Taxation Violates the Thirteenth Amendment
Before I make my case, let me present a disclaimer: I don't believe anyone in the United States of America, official or otherwise, would take this seriously enough for its revelatory value to be acted upon. That doesn't change the fact that it is unequivocally true, and here's why.
I've heard the argument recently from people in the Zeitgeist Movement that evading your income taxes, for example, doesn't violate any actual laws. This is just plain not true. If you don't believe me, do some research on Al Capone. Or better yet, send in next year's federal tax return with the words "FUCK YOU" scrawled across the page in magic marker to see what happens. Make sure to include your name, address and Social Security number to make sure they know who you are and where to find you. Even better yet, and more reasonably so, read the following quote from Title 26 Chapter 1 of the U.S. Code (2):
You are compelled, by force of imprisonment, to work for the government for a certain percentage of the year. At the low point, it's 15%, which works out to roughly 2 months of your life each year that you're forced to work for the man. No crime need be committed. They just take it, and for no reason other than that they want it. That is, literally, slavery.
And as you do better, they take more of your time. If you're not married, it jumps to 28% of your time when you make more than $22K per year, or 3.6 months. It jumps to 31%, 36% and 39.6% as your yearly salary increases to $53K, $115K and $250K respectively. If you make more than $250K, you spend 5 months of the year working, just to pay your income taxes. There is no obligation for them to provide any service or good in return for your labor. That part of your life is just gone, and poof! Into a cloud of bureaucracy and interest payments on the national debt (another tax, but somewhat hidden).
Nobody really cares about the plight of a guy making $250K though, because they know that he's still got $151K left to buy yachts, houses and sports cars with. But what about the guy making $22K? After income taxes he's only got $18700 left to feed, clothe and provide shelter for himself. In most places in major U.S. cities, that means that he's either starving or homeless (unless he lives with his parents), even before the government taxes him. They're literally taking food out of the mouths of the poor. Which means that you, if you support the authority of the federal and state governments to tax income, are doing the same. It's a statistical inevitability that this practice has directly resulted in some of their deaths.
And even if we forget about the fact that people who have a lot of money don't really need $250K a year to live off of, it's still their stuff and their life. Nobody has the right to take it, just because somebody's got a little extra lying around. That's like saying it's okay for people to borrow my car when I'm not using it because I wouldn't need to use it in the interim. I could have them arrested for doing so, because that's called grand larceny in our legal system. But when the government does it with an equivalent amount of money (or many multiples of that in the case of the rich $250K earner), and calls it taxation, it's perfectly fine with most people.
Well, it's not fine with me. It's immoral. It's inefficient. It's theft. It's slavery.
AMENDMENT XIIIThat was copied directly from the National Archives website, so it is the Thirteenth Amendment, verbatim, as it is understood in legal terms. Any tax is a violation of Section 1 of said amendment, where it states clearly that you can't involuntarily obligate a person to do anything unless it's in answer for a crime that the same person has committed. Since there isn't any clause in the U.S. Code of taxation stating that any person being taxed must first commit a crime, all taxation is a violation of the Thirteenth Amendment, which abolished slavery.
Passed by Congress January 31, 1865. Ratified December 6, 1865.
Note: A portion of Article IV, section 2, of the Constitution was superseded by the 13th amendment.
Section 1.
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2.
Congress shall have power to enforce this article by appropriate legislation.(1)
I've heard the argument recently from people in the Zeitgeist Movement that evading your income taxes, for example, doesn't violate any actual laws. This is just plain not true. If you don't believe me, do some research on Al Capone. Or better yet, send in next year's federal tax return with the words "FUCK YOU" scrawled across the page in magic marker to see what happens. Make sure to include your name, address and Social Security number to make sure they know who you are and where to find you. Even better yet, and more reasonably so, read the following quote from Title 26 Chapter 1 of the U.S. Code (2):
And these ones as well:There is hereby imposed on the taxable income of—(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and(2) every surviving spouse (as defined in section 2(a)),
There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table:
There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table:You get the point I think. Taxes are written into law, and if you violate them, you will be fined. If you refuse to pay the fine, you will be imprisoned. In the case of Al Capone that I mentioned above, he was placed in prison for the rest of his life because he didn't pay his income taxes. Not because he bribed police officers. Not because he killed his opposing gangsters. Because he evaded his taxes.
You are compelled, by force of imprisonment, to work for the government for a certain percentage of the year. At the low point, it's 15%, which works out to roughly 2 months of your life each year that you're forced to work for the man. No crime need be committed. They just take it, and for no reason other than that they want it. That is, literally, slavery.
And as you do better, they take more of your time. If you're not married, it jumps to 28% of your time when you make more than $22K per year, or 3.6 months. It jumps to 31%, 36% and 39.6% as your yearly salary increases to $53K, $115K and $250K respectively. If you make more than $250K, you spend 5 months of the year working, just to pay your income taxes. There is no obligation for them to provide any service or good in return for your labor. That part of your life is just gone, and poof! Into a cloud of bureaucracy and interest payments on the national debt (another tax, but somewhat hidden).
Nobody really cares about the plight of a guy making $250K though, because they know that he's still got $151K left to buy yachts, houses and sports cars with. But what about the guy making $22K? After income taxes he's only got $18700 left to feed, clothe and provide shelter for himself. In most places in major U.S. cities, that means that he's either starving or homeless (unless he lives with his parents), even before the government taxes him. They're literally taking food out of the mouths of the poor. Which means that you, if you support the authority of the federal and state governments to tax income, are doing the same. It's a statistical inevitability that this practice has directly resulted in some of their deaths.
And even if we forget about the fact that people who have a lot of money don't really need $250K a year to live off of, it's still their stuff and their life. Nobody has the right to take it, just because somebody's got a little extra lying around. That's like saying it's okay for people to borrow my car when I'm not using it because I wouldn't need to use it in the interim. I could have them arrested for doing so, because that's called grand larceny in our legal system. But when the government does it with an equivalent amount of money (or many multiples of that in the case of the rich $250K earner), and calls it taxation, it's perfectly fine with most people.
Well, it's not fine with me. It's immoral. It's inefficient. It's theft. It's slavery.
Friday, June 7, 2013
San Onofre is Closing Down for Good: What does this mean for us?
The San Onofre Nuclear Power Plant has been shut down for good after it has been beleaguered with problems over the last 17 months. In spite of recent upgrades, it has been determined that it will be cheaper for the company that operates the plant, Southern California Edison, to take the $400 million loss of shutting the plant down and start from scratch trying to make power somewhere else. The plant is like that old car you just got rid of because it would cost more to fix it than it's worth.
Where Does That Leave Us?
In spite of what many might believe, the danger from the presence of the San Onofre Nuclear Power Plant won't be abated now that it's being shut down. The Plant, along with every other nuclear power plant in the United States, has generated thousands of tons of nuclear waste from its spent fuel over its years of operation. The major problem with that is that there was never any coherent plan in place to dispose of that waste, or at least not one that was ever adopted. You see, all of the spent nuclear fuel waste generated in this country for decades has been sitting in on-site storage pools at the plants themselves. In addition, since there never was any place that the nuclear plants could ship their waste to, overflow went into dry casks, or large dumpster looking devices that sit outside the plants. This applies to both operating and retired plants.
On-site storage of possibly the most toxic waste known to man, in above-ground pools of water and dry casks in close proximity to population centers is obviously not the ideal situation. It's been postulated that the safest way to dispose of nuclear waste is to put it deep underground where there is no chance of the waste contaminating wildlife, groundwater and most importantly, humans. Wouldn't it be nice if we had some place like that in our country where we could transport and store all of this highly dangerous stuff that is a figurative time bomb waiting to explode?
Yucca Mountain
Oh wait, we do have a place like that. It's called Yucca Mountain Nuclear Waste Repository. It's a place that the Federal Government has spent $12 billion of the $32 billion fund, that the plants themselves have paid into, to build and operate the repository. It's agreed on by both environmentalists and the nuclear power industry that the best solution for spent nuclear fuel is in a deep geologic storage site like the one at Yucca Mountain.
NIMBA
The main reason for the failure to implement storage in the Yucca site is because of a mindset commonly referred to as NIMBA, or Not In My Back Yard. Currently led by Senator Harry Reid of Nevada, several groups have lobbied and taken legal action against the federal government regarding the repository since it was designated in 1987. The reasoning behind these attacks that threaten our entire nation, and the world, is that these people essentially don't want the nuclear waste being transported and stored near their homes (The closest community to the site is Las Vegas, which is about 80 miles away). This closed minded behavior has been the force slowing down and even halting progress on coming up with an adequate site for nuclear waste disposal.
Why It's Not Moving Forward Now
In 2010, the Obama Administration, folding to pressure from these ill-educated NIMBA folks, decided to withdraw the federal government's application with the Nuclear Regulatory Commission for approval of the Yucca Mountain site "with prejudice," essentially halting all progress on the repository. Several law suits and even legislation from Congress has been enacted to counteract this maneuver, but for now, the project is essentially dead in the water.
What a Shut-Down San Onofre Means to Southern California
A shut down of the plant then means that the region now has to continue dealing with all of the costs, and none of the benefits, of having a nuclear power plant that eerily resembles the Fukushima plant that nearly set all of Japan aglow with radiation, in its back yard. The way things have been going, for decades to come, the plant will be the site of thousands of tons of highly toxic radioactive waste. Oh yeah, and anyone for more rolling blackouts?
Sources:
http://www.latimes.com/local/lanow/la-me-ln-edison-closing-san-onofre-nuclear-plant-20130607,0,7920425.story
http://www.atg.wa.gov/page.aspx?id=27624#.UbIOhNj4LPY
http://www.slate.com/articles/health_and_science/nuclear_power/2013/01/nuclear_waste_storage_why_did_yucca_mountain_fail_and_what_next.html
http://en.wikipedia.org/wiki/Yucca_Mountain_nuclear_waste_repository
http://en.wikipedia.org/wiki/San_Onofre_Nuclear_Generating_Station
http://www.lasvegasnevada.gov/information/3286.htm
Where Does That Leave Us?
In spite of what many might believe, the danger from the presence of the San Onofre Nuclear Power Plant won't be abated now that it's being shut down. The Plant, along with every other nuclear power plant in the United States, has generated thousands of tons of nuclear waste from its spent fuel over its years of operation. The major problem with that is that there was never any coherent plan in place to dispose of that waste, or at least not one that was ever adopted. You see, all of the spent nuclear fuel waste generated in this country for decades has been sitting in on-site storage pools at the plants themselves. In addition, since there never was any place that the nuclear plants could ship their waste to, overflow went into dry casks, or large dumpster looking devices that sit outside the plants. This applies to both operating and retired plants.
On-site storage of possibly the most toxic waste known to man, in above-ground pools of water and dry casks in close proximity to population centers is obviously not the ideal situation. It's been postulated that the safest way to dispose of nuclear waste is to put it deep underground where there is no chance of the waste contaminating wildlife, groundwater and most importantly, humans. Wouldn't it be nice if we had some place like that in our country where we could transport and store all of this highly dangerous stuff that is a figurative time bomb waiting to explode?
Yucca Mountain
Oh wait, we do have a place like that. It's called Yucca Mountain Nuclear Waste Repository. It's a place that the Federal Government has spent $12 billion of the $32 billion fund, that the plants themselves have paid into, to build and operate the repository. It's agreed on by both environmentalists and the nuclear power industry that the best solution for spent nuclear fuel is in a deep geologic storage site like the one at Yucca Mountain.
NIMBA
The main reason for the failure to implement storage in the Yucca site is because of a mindset commonly referred to as NIMBA, or Not In My Back Yard. Currently led by Senator Harry Reid of Nevada, several groups have lobbied and taken legal action against the federal government regarding the repository since it was designated in 1987. The reasoning behind these attacks that threaten our entire nation, and the world, is that these people essentially don't want the nuclear waste being transported and stored near their homes (The closest community to the site is Las Vegas, which is about 80 miles away). This closed minded behavior has been the force slowing down and even halting progress on coming up with an adequate site for nuclear waste disposal.
Why It's Not Moving Forward Now
In 2010, the Obama Administration, folding to pressure from these ill-educated NIMBA folks, decided to withdraw the federal government's application with the Nuclear Regulatory Commission for approval of the Yucca Mountain site "with prejudice," essentially halting all progress on the repository. Several law suits and even legislation from Congress has been enacted to counteract this maneuver, but for now, the project is essentially dead in the water.
What a Shut-Down San Onofre Means to Southern California
A shut down of the plant then means that the region now has to continue dealing with all of the costs, and none of the benefits, of having a nuclear power plant that eerily resembles the Fukushima plant that nearly set all of Japan aglow with radiation, in its back yard. The way things have been going, for decades to come, the plant will be the site of thousands of tons of highly toxic radioactive waste. Oh yeah, and anyone for more rolling blackouts?
Sources:
http://www.latimes.com/local/lanow/la-me-ln-edison-closing-san-onofre-nuclear-plant-20130607,0,7920425.story
http://www.atg.wa.gov/page.aspx?id=27624#.UbIOhNj4LPY
http://www.slate.com/articles/health_and_science/nuclear_power/2013/01/nuclear_waste_storage_why_did_yucca_mountain_fail_and_what_next.html
http://en.wikipedia.org/wiki/Yucca_Mountain_nuclear_waste_repository
http://en.wikipedia.org/wiki/San_Onofre_Nuclear_Generating_Station
http://www.lasvegasnevada.gov/information/3286.htm
Tuesday, April 23, 2013
Wealth Inequality is Increasing
The Pew Research Center has just published the results of a study indicating that the rich have gotten richer since 2007 and the poor have gotten poorer (Pew Research Study). The lowest 93% of individuals by net worth are worse off now than they were when the recession started, while the richest 7% increased their wealth by about 21%. In the comments sections of articles that I've read on the subject, most of the rhetoric was aimed at the Republican party and their scheme to lower taxes only for the rich. As a matter of fact, the problem is with the relationship between the rich and the government, but taxes aren't the main issue here.
Taxes hurt everyone, especially the poor. Raising taxes will not help poor people any more than it would help the rich. Yes, the rich would get less rich, but what guarantee do disenfranchised Americans get from the government that this tax money will be returned to them? The answer is that they don't, and history is a testament to the fact that governments generally squander most of the tax money they receive due to corruption and incompetence.
If the rich have money, they will spend it on things, just like everyone else. They will typically give the money to someone who is productive in return for some product or service, who will in turn do the same with the money, and so on. In this way you're rewarded if you are productive in some way. In the taxation way, you are punished for being productive, and the money disappears into the government black hole with a one way sucking sound, never to be seen again. The poorest never saw any of that money that was promised to them by the politicians who raised the taxes for that purpose. Taxes have increased for the rich and social welfare programs have seen increased funding for several decades now, but somehow it hasn't resulted in a reduction in poverty or wealth equality.
The really big problem, however, is in the relationship that rich people have with the Federal Reserve and other centralized economic meddling by the U.S. Government. The Federal Reserve's inflationary policies were what caused the housing bubble in the first place, giving essentially free loans to investors who bought extremely risky assets (real estate, stocks, bonds,credit default swaps and other derivative financial instruments) with the money. When people realized what was going on and stopped buying these now-overpriced houses, stocks, bonds and derivatives, the market crashed and many investors lost a lot of what they had borrowed to buy those assets. But the Federal Government decided that larger entities, like the banks that made the risky home loans, should be bailed out and reimbursed for their losses that they caused , while smaller investors were told to take a long walk off a short pier. In addition, the government decided that not only was their inflationary policy not the cause of the problem, but that we needed more of it.
So since the Fed was handing out free dollars this whole time, and all the time giving more, why didn't everyone get richer? There's more dollars, so they should be easier to come by, right? Well, the theory was that if you gave the banks money to make loans with, they would in turn give cheap loans to companies and individuals, who could then use the money to do something productive with, thus stimulating the economy as a whole. The problem with this is that the banks didn't loan the money out, because they now realized that it would be moronic to again give loans to people who couldn't afford them for things they wouldn't use to be productive with (and therefore would have no means to pay the loans back, because their salaries wouldn't cover it). Instead, they took the money and invested it back into the stock market and pumped up stock prices. Not only that, but they did the same thing to commodities, houses, and more. Because the markets went up, those investments made the banks and other investors money, and these rich guys all got richer.
Where did that leave the rest of us then? It left us with higher prices for things like gasoline, home heat, electricity, food, housing prices and rents, college tuition, medical bills and more. The biggest part of the problem with all of this is that the Federal Reserve's liquidity never reached its intended destination, and wages never went up, and in the most recent recession, have actually gone down. People have less money and have to pay more to live.
This doesn't sound like a great formula for stimulating the economy to me, and it perfectly explains why we've seen a period of increased income inequality over the 70 years or so since our peak in the 50s and early 60s. Inflationary monetary policy, social welfare programs, increased (unnecessary) regulation and higher taxes are what is driving this death spiral that the U.S. economy has found itself in.
Taxes hurt everyone, especially the poor. Raising taxes will not help poor people any more than it would help the rich. Yes, the rich would get less rich, but what guarantee do disenfranchised Americans get from the government that this tax money will be returned to them? The answer is that they don't, and history is a testament to the fact that governments generally squander most of the tax money they receive due to corruption and incompetence.
If the rich have money, they will spend it on things, just like everyone else. They will typically give the money to someone who is productive in return for some product or service, who will in turn do the same with the money, and so on. In this way you're rewarded if you are productive in some way. In the taxation way, you are punished for being productive, and the money disappears into the government black hole with a one way sucking sound, never to be seen again. The poorest never saw any of that money that was promised to them by the politicians who raised the taxes for that purpose. Taxes have increased for the rich and social welfare programs have seen increased funding for several decades now, but somehow it hasn't resulted in a reduction in poverty or wealth equality.
The really big problem, however, is in the relationship that rich people have with the Federal Reserve and other centralized economic meddling by the U.S. Government. The Federal Reserve's inflationary policies were what caused the housing bubble in the first place, giving essentially free loans to investors who bought extremely risky assets (real estate, stocks, bonds,credit default swaps and other derivative financial instruments) with the money. When people realized what was going on and stopped buying these now-overpriced houses, stocks, bonds and derivatives, the market crashed and many investors lost a lot of what they had borrowed to buy those assets. But the Federal Government decided that larger entities, like the banks that made the risky home loans, should be bailed out and reimbursed for their losses that they caused , while smaller investors were told to take a long walk off a short pier. In addition, the government decided that not only was their inflationary policy not the cause of the problem, but that we needed more of it.
So since the Fed was handing out free dollars this whole time, and all the time giving more, why didn't everyone get richer? There's more dollars, so they should be easier to come by, right? Well, the theory was that if you gave the banks money to make loans with, they would in turn give cheap loans to companies and individuals, who could then use the money to do something productive with, thus stimulating the economy as a whole. The problem with this is that the banks didn't loan the money out, because they now realized that it would be moronic to again give loans to people who couldn't afford them for things they wouldn't use to be productive with (and therefore would have no means to pay the loans back, because their salaries wouldn't cover it). Instead, they took the money and invested it back into the stock market and pumped up stock prices. Not only that, but they did the same thing to commodities, houses, and more. Because the markets went up, those investments made the banks and other investors money, and these rich guys all got richer.
Where did that leave the rest of us then? It left us with higher prices for things like gasoline, home heat, electricity, food, housing prices and rents, college tuition, medical bills and more. The biggest part of the problem with all of this is that the Federal Reserve's liquidity never reached its intended destination, and wages never went up, and in the most recent recession, have actually gone down. People have less money and have to pay more to live.
This doesn't sound like a great formula for stimulating the economy to me, and it perfectly explains why we've seen a period of increased income inequality over the 70 years or so since our peak in the 50s and early 60s. Inflationary monetary policy, social welfare programs, increased (unnecessary) regulation and higher taxes are what is driving this death spiral that the U.S. economy has found itself in.
Are the FAA Air Traffic Control Furloughs a Political Stunt?
Politics or Necessity?
Recent FAA furloughs have begun to take effect due to budget "cuts" (they're not actually cuts, they're smaller increases in spending than was asked for) in Washington. Stories have started to emerge about delays in air traffic due to the shortage of necessary air traffic control personnel. Many people believe that this is just a political stunt handed down by the Obama administration to get the American public to reconsider its stance on the new budget restrictions. Let's see if that's true.
The 2013 fiscal year budget estimates for the Federal Aviation Administration is freely available on the Department of Transportation's web page here: http://www.dot.gov/sites/dot.dev/files/docs/faa_%20fy_%202013_budget_estimate.pdf and will be referred to in the sections below.
Facilities and Equipment
The first section of the FAA budget proposal is Facilities and Equipment. Most of the mentions in this section are for critical operational types of items. No problems as far as I can see, except that much of the allocated spending will be on implementation of Automatic Dependent Surveillance that is of no immediate concern. It's a part of what the FAA is calling NextGen Air Transportation System, slated to go live in 2020. While it sounds like a great idea to invest money in this type of infrastructure to achieve future efficiencies in air traffic control, there is nothing about delaying the implementation of this type of technology that would immediately result in increased delays or safety concerns regarding current air traffic control. Some or all of the money allocated toward implementation of NextGen technologies could be partially or wholly suspended without disrupting current services. Since the FAA needs to cut only $600 million (http://www.faa.gov/news/updates/?newsid=71078) from its proposed budget in 2013, cutting the $955 million of expenditures slated for NextGen facilities and equipment would solve the FAA's budget problems and would even allow them to expand their workforce if necessary.
It's not necessary to look further into this budget to solve the furlough problem to see that the whole thing is a bunch of smoke and mirrors and is, in fact, a political stunt. Certain items in the NextGen budget, like those related to ramping up capabilities to inspect and certify equipment, would be totally unnecessary anyway. The airlines and manufacturers themselves should be responsible for covering their own quality control processes and costs, and that's all inspection and certification is essentialy. These companies are privately owned businesses, and therefore shouldn't expect taxpayers to foot the bill for some of their expenses. But since I'm not a big fan of the idea of cutting the implementation of technologies that are intended to increase the efficiency of the FAA in the long run, let's look elsewhere to see if there are more items that could be cut without disrupting service.
Research, Engineering and Development
Next on the budget is Research, Engineering and Development. R&D is always good right? Well looking a little further, it can be seen that the FAA is planning on doing research into "...propulsion and fuel systems, advanced materials research, and continued air worthiness." Again, this type of research is the responsibility of the aircraft manufacturers to handle. If they want R&D, they should pay for it themselves. This is not to mention that adding the $180 million R&D budget cut to the tally, which would not disrupt current services, would put us at $1.135 billion in savings, almost double what the FAA needs to cut from their proposed budget increases. But again, for reasons that I listed above regarding potentially increased efficiency, I'm not a big fan of cutting R&D to fix budget problems, so let's move on.
Grants-In-Aid for Airports
What's this all about? Aren't the airports owned by the cities in which they are located?
Why is it that the Federal Government has taken it upon itself to fund the airports themselves? Shouldn't that be the responsibility of the owners? This $2.4 billion that could easily be cut would put us up to $3.535 billion in budget cuts that would not affect immediate services, which is nearly six times what would be needed to keep all of the workers at their posts. Yet they still claim that they don't have enough leeway in cuts to keep the most critical aspect of their operations, air traffic control, running at all times.
Conclusion
I could go on, as I've only hit the tip of the iceberg on areas that could be cut without doing furloughs, but it's not necessary. The answer is now unequivocally yes, that the furloughs, and their relationship to the reduction in budget increases at the Federal Aviation Administration, are indeed a political stunt, or at the very least, gross incompetence. Either way, I don't feel that the executive branch of the government, with the President at its helm, has represented its constituents very well here.
Recent FAA furloughs have begun to take effect due to budget "cuts" (they're not actually cuts, they're smaller increases in spending than was asked for) in Washington. Stories have started to emerge about delays in air traffic due to the shortage of necessary air traffic control personnel. Many people believe that this is just a political stunt handed down by the Obama administration to get the American public to reconsider its stance on the new budget restrictions. Let's see if that's true.
The 2013 fiscal year budget estimates for the Federal Aviation Administration is freely available on the Department of Transportation's web page here: http://www.dot.gov/sites/dot.dev/files/docs/faa_%20fy_%202013_budget_estimate.pdf and will be referred to in the sections below.
Facilities and Equipment
The first section of the FAA budget proposal is Facilities and Equipment. Most of the mentions in this section are for critical operational types of items. No problems as far as I can see, except that much of the allocated spending will be on implementation of Automatic Dependent Surveillance that is of no immediate concern. It's a part of what the FAA is calling NextGen Air Transportation System, slated to go live in 2020. While it sounds like a great idea to invest money in this type of infrastructure to achieve future efficiencies in air traffic control, there is nothing about delaying the implementation of this type of technology that would immediately result in increased delays or safety concerns regarding current air traffic control. Some or all of the money allocated toward implementation of NextGen technologies could be partially or wholly suspended without disrupting current services. Since the FAA needs to cut only $600 million (http://www.faa.gov/news/updates/?newsid=71078) from its proposed budget in 2013, cutting the $955 million of expenditures slated for NextGen facilities and equipment would solve the FAA's budget problems and would even allow them to expand their workforce if necessary.
It's not necessary to look further into this budget to solve the furlough problem to see that the whole thing is a bunch of smoke and mirrors and is, in fact, a political stunt. Certain items in the NextGen budget, like those related to ramping up capabilities to inspect and certify equipment, would be totally unnecessary anyway. The airlines and manufacturers themselves should be responsible for covering their own quality control processes and costs, and that's all inspection and certification is essentialy. These companies are privately owned businesses, and therefore shouldn't expect taxpayers to foot the bill for some of their expenses. But since I'm not a big fan of the idea of cutting the implementation of technologies that are intended to increase the efficiency of the FAA in the long run, let's look elsewhere to see if there are more items that could be cut without disrupting service.
Research, Engineering and Development
Next on the budget is Research, Engineering and Development. R&D is always good right? Well looking a little further, it can be seen that the FAA is planning on doing research into "...propulsion and fuel systems, advanced materials research, and continued air worthiness." Again, this type of research is the responsibility of the aircraft manufacturers to handle. If they want R&D, they should pay for it themselves. This is not to mention that adding the $180 million R&D budget cut to the tally, which would not disrupt current services, would put us at $1.135 billion in savings, almost double what the FAA needs to cut from their proposed budget increases. But again, for reasons that I listed above regarding potentially increased efficiency, I'm not a big fan of cutting R&D to fix budget problems, so let's move on.
Grants-In-Aid for Airports
What's this all about? Aren't the airports owned by the cities in which they are located?
Why is it that the Federal Government has taken it upon itself to fund the airports themselves? Shouldn't that be the responsibility of the owners? This $2.4 billion that could easily be cut would put us up to $3.535 billion in budget cuts that would not affect immediate services, which is nearly six times what would be needed to keep all of the workers at their posts. Yet they still claim that they don't have enough leeway in cuts to keep the most critical aspect of their operations, air traffic control, running at all times.
Conclusion
I could go on, as I've only hit the tip of the iceberg on areas that could be cut without doing furloughs, but it's not necessary. The answer is now unequivocally yes, that the furloughs, and their relationship to the reduction in budget increases at the Federal Aviation Administration, are indeed a political stunt, or at the very least, gross incompetence. Either way, I don't feel that the executive branch of the government, with the President at its helm, has represented its constituents very well here.
Wednesday, April 17, 2013
San Diego Real Estate is Not Up-and-Coming
I've been hearing a lot of buzz lately around the idea that the San Diego real estate market is up-and-coming, but I must say that I disagree. The prices here are inflated as compared to what people can afford. The median household income in San Diego is $59,477
(http://www.deptofnumbers.com/income/california/san-diego/)
which would put an average San Diego family in a position to afford a home that costs
$178,431 at the high end (3x income). The median sale price for housing in San
Diego is currently almost $400,000 (http://www.trulia.com/real_estate/San_Diego-California/market-trends/),
which is more than twice what your typical San Diego family can fork over for their living situation, and this is totally
unsustainable.
This is not to mention the shambles that the majority of
these properties are in. Owners who can't afford the houses in the
first place certainly can't afford upkeep, so they've all been slowly decaying
for at least a decade now. Most of the places that I've rented over the
years since coming to San Diego in 2006 would need something in the neighborhood
of $50k invested just to bring them back to 100% again. They need wiring and
plumbing work, some have termite damage, the foundations are sagging,
the roofs, siding and windows need to be replaced, and more.
In that case, these fixer-uppers shouldn't be selling for more than about $130K. The San Diego
real estate market is so out of sync with reality, it's a wonder that
the previous crash didn't happen sooner. The only thing driving this
uptick is speculation by "investors". Until housing prices go down
by about half, or salaries double, this should not be looked upon as a recovery.
If the real-estate market isn't being pumped up from within (by people that live here and can afford to buy), then there are several sources that could cause these inflated prices to persist. First, many of the people who got into these houses at 2007 prices haven't completed their final death throes into foreclosure or short sale. It's a lot harder to kick someone out of their house if they stop making payments than just sending a foreclosure notice. There are lots of rules that either prevent or delay foreclosure in San Diego. Also, it's in the banks' best interest to take their sweet time on these foreclosures, because when they do finally foreclose, and sell them for what they're worth (not what they sold for during the housing boom), they have to claim those losses on their income statements. These publicly traded banks, which must report quarterly, and whose quarterly numbers drive stock prices, will see those prices drop at the end of a quarter that they would execute mass foreclosure in. Since many of the bank executives salaries are dependent upon high stock prices, they won't be in any hurry to do such a thing. They're hoping that they can hold on to those properties until the market swings back the other way, foreclose on them then, and sell them at their formerly inflated prices. When these properties finally hit the market, it's not likely that they'll sell at 2007 prices, but at something more in line with what your average family can afford now.
Next in line is the inflationary policies of the Federal Reserve. When the federal government is paying investment bankers (with negative real interest rates) to borrow money, that money needs to go somewhere so that the bankers can get a return before they need to pay it back. If they happen to put that money into a REIT (Real Estate Investment Trusts, which pool investor money to buy properties) or directly into properties, the prices artificially rise, creating a bubble.
Exacerbating this problem is the fact that newly rich foreign investors from places like Southeast Asia and South America are enticed by the increases in U.S. real-estate prices, especially in touristy places like San Diego, so they come in and buy up properties with cash in the hopes of unloading them later at a hefty profit. These people aren't buying property to live here, they just want to make a quick buck, and can't be counted on to keep prices high.
What this all means in the long run is that supply and demand will eventually win out. If prices stay up or continue to climb, and the people who live here don't have salaries in line with what it costs to live here, they will just start to leave. Since the pool of wealthy people in the U.S. is shrinking, it's not likely that people will move in from elsewhere to occupy these vacant spaces. And without people to rent or buy these properties, the prices will have to come down. We may not see a catastrophic crash like we did last time property prices started to climb into the stratosphere (or we might), but there will be another correction, and it won't be pretty.
Wednesday, January 23, 2013
Collapse of the American Empire?
If you're the kind of person who likes to watch videos and read articles
about finance or global politics, and you've searched the internet for it at
all recently, you’ll inevitably stumble across sites where people warn of the
imminent collapse of western civilization due to the mounting debt problems of
individuals and governments across the world. The argument goes something
like:
The same rules apply for the finances of governments as they do for individuals. And a good rule of thumb is, once a person’s debts exceed their income by more than 3 times, that person is in danger of defaulting from one day to the next. The government has knocked that number out of the park. The very fact that they haven’t gone bankrupt already is miraculous. In my estimation, this part of the doomsayers’ story will happen, and in the near future.
So that begs the question: Why won’t this mean the end of civilization as we know it? The answer is: Because there are precedents for this type of thing in modern times. Governments have gone bankrupt and their paper money was rendered worthless before. And guess what? The show went on. Civilization continued, and the rest of the world went on with their lives.
The times when this happened were due to similar scenarios in which the respective governments didn’t have enough revenue to cover their expenditures, so they just printed more money. This devalued those currencies to the point that nobody would accept them anymore, and those governments were forced to restructure their debts, issue new currencies with new valuations and get their fiscal houses in order. Now this was not a good situation for those nations, but the world did not end.
Now an argument can be made that a nation as large as the United States, with global reserve currency status, has never done this before. And some would say that either the U.S. is immune from such a thing, or the results would be so catastrophic that the world would be plunged into darkness. Both would be wrong. The U.S. couldn’t possibly honor all of those financial obligations if tax revenue increases remain on par with today. They will have to either print money, or restructure their debt (default, bankruptcy, cutting of programs, etc.), because they certainly won't be able to increase taxes to the levels they would need to be without severe political backlash (or without causing the revenues to actually shrink). This problem will work itself out, one way or another.
But even in a financially catastrophic event, nothing real necessarily gets destroyed in the process. All of the infrastructure, the roads and bridges, farm land, power plants and transmission lines, refineries, hospitals, firehouses, police stations and on and on, will all still be here. And that goes along with the people that populate that infrastructure. All of the engineers, farmers, plant workers, doctors, firemen and police will all still exist. And so will the military for that matter.
As long as we don’t see massive ethnic or political genocide by the government, the military and police will continue to defend our borders and infrastructure. No essentials need to disappear for any period of time. The revolutionaries during the American Revolution often didn’t get paid for several years, so it’s not unprecedented for people to work without pay to serve the greater good within this country3. I’m still optimistic about the American people. I believe that we will come together in a time of crisis, like we always have, to fix these problems.
There won’t be any revolution because there’s no legitimate reason to revolt. Everything that we’re dealing with is a product of our own making. We, the people, have demanded everything that our government has provided us, good or bad. We still have the Constitution. We still have the three branches of government, with all of their glorious checks and balances. We still have our votes.
Like Lincoln and his constituents did, I vote to preserve the Union. I’m not willing to scrap and part out 237 years of what has become the greatest idea for a nation in the history of man. Yeah, we’ve got our problems. And they’re big mind you. But the system was built with the kind of flexibility that will allow us to restore it to its former glory. We can still use the Supreme Court to nullify unconstitutional laws. We can still form new political parties and vote these ‘bums’ out of office. We can still fix our revenue and tax structure. We can still peaceably assemble. We can still vote.
1http://www.usdebtclock.org/
2http://www.theburningplatform.com/?p=38718
3http://www.archives.nysed.gov/a/research/res_topics_mi_revwar_claims.shtml
If the government defaults on its debt obligations, it will no longer
be able to purchase anything, including oil and items used for national
defense, nor will it be able to fund all of the social programs like welfare,
social security, Medicare and the like, because its currency will be
worthless. If people suddenly stopped getting their government handouts,
they'd revolt, and with no money to spend on defending itself, the government
would collapse overnight. We’d go back to a barter system or a gold
standard because no governments will be left to back a paper or electronic
currency.
All international trade would stop,
and therefore importantly oil would be unavailable to most
people in western nations. All commerce, which drives everybody's
livelihood, would grind to a halt. Since most people live in cities, and
wouldn't be able to fend for themselves in the wilderness should they escape
from population centers, they would surely die within a short time. We
would instantly be plunged back into the Stone Age, or at least another dark
ages. In essence, the world, as we know it, would come to an end.
Now I do agree that at some point the governments of most western nations,
including the United States, will eventually default on their debt. As of
this writing, the U.S. has in the neighborhood of $16.5 Trillion of debt on the
books and climbing1.
The GDP of the entire nation, which amounts to all of the wealth produced
within the United States in a given year, is $15.1 Trillion per year.
Looking at it that way, it doesn't seem that ridiculous to have a debt to
income ratio that’s a little less than 1:1. But when you include all
of the future obligations (the real debt) of the U.S., like those that have
been promised for social security, Medicare and defense spending, the number
jumps to $222 Trillion2. No, that is not a typo, the real debt is
actually about 15 times that of GDP.The same rules apply for the finances of governments as they do for individuals. And a good rule of thumb is, once a person’s debts exceed their income by more than 3 times, that person is in danger of defaulting from one day to the next. The government has knocked that number out of the park. The very fact that they haven’t gone bankrupt already is miraculous. In my estimation, this part of the doomsayers’ story will happen, and in the near future.
So that begs the question: Why won’t this mean the end of civilization as we know it? The answer is: Because there are precedents for this type of thing in modern times. Governments have gone bankrupt and their paper money was rendered worthless before. And guess what? The show went on. Civilization continued, and the rest of the world went on with their lives.
The times when this happened were due to similar scenarios in which the respective governments didn’t have enough revenue to cover their expenditures, so they just printed more money. This devalued those currencies to the point that nobody would accept them anymore, and those governments were forced to restructure their debts, issue new currencies with new valuations and get their fiscal houses in order. Now this was not a good situation for those nations, but the world did not end.
Now an argument can be made that a nation as large as the United States, with global reserve currency status, has never done this before. And some would say that either the U.S. is immune from such a thing, or the results would be so catastrophic that the world would be plunged into darkness. Both would be wrong. The U.S. couldn’t possibly honor all of those financial obligations if tax revenue increases remain on par with today. They will have to either print money, or restructure their debt (default, bankruptcy, cutting of programs, etc.), because they certainly won't be able to increase taxes to the levels they would need to be without severe political backlash (or without causing the revenues to actually shrink). This problem will work itself out, one way or another.
But even in a financially catastrophic event, nothing real necessarily gets destroyed in the process. All of the infrastructure, the roads and bridges, farm land, power plants and transmission lines, refineries, hospitals, firehouses, police stations and on and on, will all still be here. And that goes along with the people that populate that infrastructure. All of the engineers, farmers, plant workers, doctors, firemen and police will all still exist. And so will the military for that matter.
As long as we don’t see massive ethnic or political genocide by the government, the military and police will continue to defend our borders and infrastructure. No essentials need to disappear for any period of time. The revolutionaries during the American Revolution often didn’t get paid for several years, so it’s not unprecedented for people to work without pay to serve the greater good within this country3. I’m still optimistic about the American people. I believe that we will come together in a time of crisis, like we always have, to fix these problems.
There won’t be any revolution because there’s no legitimate reason to revolt. Everything that we’re dealing with is a product of our own making. We, the people, have demanded everything that our government has provided us, good or bad. We still have the Constitution. We still have the three branches of government, with all of their glorious checks and balances. We still have our votes.
Like Lincoln and his constituents did, I vote to preserve the Union. I’m not willing to scrap and part out 237 years of what has become the greatest idea for a nation in the history of man. Yeah, we’ve got our problems. And they’re big mind you. But the system was built with the kind of flexibility that will allow us to restore it to its former glory. We can still use the Supreme Court to nullify unconstitutional laws. We can still form new political parties and vote these ‘bums’ out of office. We can still fix our revenue and tax structure. We can still peaceably assemble. We can still vote.
1http://www.usdebtclock.org/
2http://www.theburningplatform.com/?p=38718
3http://www.archives.nysed.gov/a/research/res_topics_mi_revwar_claims.shtml
Tuesday, January 15, 2013
Newtown Inspired Gun Control
Since the Newtown shootings that took place in December, we’ve all been constantly inundated by uneducated and reactionary commentary from the media about gun control. People say we need to do something about all of these guns and the crazy people who have them. They like to cite countries like Great Britain, where successful gun control legislation campaigns have significantly reduced gun crime in their respective countries. They argue that we need similar actions here in the United States. Just like the events following the September 11 terrorist attacks, safety and security have been used as reasons to challenge our constitutional freedoms.
The data showing the decrease in gun crimes by tough gun legislation may be correct, but when you look at violent crime overall in Britain compared to the US, a different picture appears altogether. The following article cites data, collected by sources within Britain, showing how that country ranks in violent crime rates compared to other nations: http://www.dailymail.co.uk/news/article-1196941/The-violent-country-Europe-Britain-worse-South-Africa-U-S.html
When you read this article, you see that the violent crime rate in Britain is nearly 4 times the rate in the US. Now I've seen data showing just the opposite for homicide rates specifically, as seen in this Wikipedia entry: http://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide_rate, but even that data shows that only about 1% of violent crimes in the US are homicides, and that there is an approximately 0.0042% chance of being the victim of homicide in the US within a given year, making you almost 4 times as likely to die in a car accident, which is still incredibly unlikely to happen. So in spite of all our guns, we're less violent than other less-armed nations, but we're markedly more successful when we commit to violence.
But as with others who advocate a libertarian stance on the possession of firearms in the US, my main reason has little to do with an attempt to reduce violent crime, which continues to drop as the population ages and people generally become more educated with each passing year. The real reason to maintain the free possession of firearms is the same reason that Martin Luther King Jr. fought and died in the civil rights movement, and the same reason our founding fathers fought for independence from Britain, which is to maintain an assertion of our civil liberties against those who would unjustly attempt to revoke them.
During the 20th century alone, there are many examples of genocide which have been enabled by strict gun control legislation. In fact, more people were killed by their own governments in these countries than all other homicides and domestic and international wars combined, as shown here: http://jpfo.org/filegen-a-m/deathgc.htm#chart. Free gun possession is the one last fail safe against such tyranny.
I'm not suggesting that our current Presidential administration is filled with the kinds of people that would launch into a genocidal mania the moment that they see an unarmed populace, but there's no telling what they would do with their new-found absolute power if it were suddenly granted to them. And there's no telling what the next group of elected officials would do, or who would be enticed to run for office if it meant free reign to ride roughshod over political opposition once in power.
It's been scientifically shown that people who are drawn to positions of power are disproportionately narcissistic when compared to the rest of the population (http://researchnews.osu.edu/archive/narcissism.htm). These are people with an incredibly self-serving and sociopathic view of the world, and will do whatever it takes to get and keep power. Not all of them would murder, but without the threat of retaliation, one of them will eventually, and no one will be able to stop that person.
We’ve already seen two laws over the last 12 years that have essentially nullified different parts of the Bill of Rights. The National Defense Authorization Act or NDAA, signed into law in 2012, destroys our right to due process as outlined in the 5th Amendment. NDAA basically makes it possible for the government to arrest you without charging you with a crime, and holding you indefinitely, for no good reason other than that they say it’s in the interest of national security. The Patriot Act, in its Orwellian glory (see 1984), destroys our right to be left alone by the authorities unless there's reasonable cause to believe that we have or are planning to commit crimes. We were formerly protected against this type of behavior by the 4th Amendment, but now they can spy on you any time they like, and all they have to say is that it’s a matter of national security, citing the Patriot Act, and they get a free pass.
If the 2nd Amendment, which protects our right to keep and bear arms, is nullified without resistance as well, we’re in big trouble. If the trouble doesn’t come now, it will in the very near future. The founding fathers added these amendments to the Constitution for the reasons I have described above. They knew that just because people happened to be in power didn’t mean that they were infallible. They actually believed the exact opposite. That people in power were prone to corruption. And it just so happens that they were right.
Our whole system was set up as one of checks and balances. The idea behind the whole system was that no individual or group of people would be able to gain absolute power, and that all groups would be represented and have a say. Not only that, but individuals would be protected against mob rule, which is the most exceptional part of the system of government that we have enjoyed for over 200 years. Ignoring these mechanisms like we are with the Patriot Act and the NDAA is a slippery slope that can only lead us to fall off of a cliff into tyranny. Going this one step further and killing the 2nd Amendment will be a tragic, and an irreversibly fatal, mistake. Don’t be a victim.
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