Two Views on the Economy

Two interesting views on the economy and whether the recession is over:

1. Schwab's Liz Ann Sonders says it might be over.

2. Dennis Gartman says it's over.

Now read this and this:

For years, governments have been promising generous medical benefits to millions of schoolteachers, firefighters and other employees when they retire, yet experts say that virtually none of these governments have kept track of the mounting price tag...

Actuaries say that about 5.5 million retired public employees have health benefits of some kind - and accountants joke that there are not enough actuaries in the country to do all the calculations necessary to estimate how much all these retirees have been promised...[In contrast,] Today, only one in 20 companies still offers retiree benefits, according to Don Rueckert Jr., an Aon actuary.

Rosy economic projections belie the public sector's debt bomb. At some point, taxes must be raised to cover public sector pensions and lifetime medical benefits. Once taxes increase, non-government workers will have less disposable income. The less disposable income, the less people can spend. The less spending, the lower our economic growth--as long as our economy is driven by consumer spending.

The only solution to the death/debt spiral is to cut spending, which includes cutting public sector benefits. Does this mean that teachers and other government workers must get paid less? No. What it means is that government benefits must be brought in line with a regular American's benefits. Instead of a pension, police officers, teachers, lawyers, judges, and other government workers should get a 401k or 403b plan. Instead of guaranteed lifetime medical benefits, government workers should get the same medical plan everyone else gets--employer-subsidized health care while employed, COBRA if terminated, and then Medicare when the time comes. Economists who praise the so-called economy recovery are not taking into account long-term debt liabilities. We need to cut spending, and all we've done so far is use accounting tricks to hide the massive debt we're giving to our children and grandchildren. That's not just irresponsible--that's immoral.

Kudos to the NY Times' Milt Freudenheim and Mary Williams Walsh for being ahead of the curve. Their article on GASB 45 was published in December 2005.

My Favorite Comic Strips

In case you're interested, there are only three comic strips I read regularly: Pearls Before Swine, Get Fuzzy, and Tom Toles. Check them out, especially Tom Toles.

Dancing Cheek to Cheek

Money Quotes

Two interesting links (Link1 and Link2) to quotes about money--here's one that caught my eye:

"If you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit.” — Sir Josiah Stamp, Director, Bank of England, 1940

More here.

Quote of the Day

I can't cite a source for this one (I just woke up and haven't had my tea), but I love it:

"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficial. Men born to freedom are naturally alert to repel invasions of their liberty--by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well meaning. but without understanding."

-- Justice Louis Brandeis, U.S. Supreme Court Justice

Military-Industrial Complex

Did someone say something about a military-industrial complex?

http://www.boingboing.net/2009/08/01/america-makes-nothin.html

"Military [expenditures are] now...8% of all durable goods, up from 3% in 2000."

Shhh...you might wake up Eisenhower.

San Francisco Chronicle: U.S. Citizens Wrongly Deported

The SF Chronicle is doing a great job writing hard-hitting pieces. Here is one particularly good article on our convoluted immigration laws and procedures.

I've said before, and I'll say it again: America's immigration laws give too much power and discretion to unelected government workers. With such power, you'd think there would be better checks and balances in place, or at least incentives to expeditiously process applications.

For example, immigration authorities delayed processing my application for a citizenship certificate, even though they cashed my check and there was no dispute as to my citizenship. I was already a citizen, I had a passport, and I just wanted the actual certificate. Sounds simple enough, doesn't it? Yet, it took me several emails to Senator Diane Feinstein's office to get a copy of my citizenship certificate--years after I'd paid the fee and received citizenship. Did anyone at the BCIS get punished for improperly sitting on my application for years? Probably not. There's no way for me to tell who handled my application or whose responsibility it was to process it. Even when I buy underwear, there's a sticker that tells me who inspected it. Isn't it sad that underwear sales have better safeguards in place than immigration laws?

In fact, immigration lawyers have one of the least expensive costs for malpractice insurance policies. Why? Because if the lawyer loses the case, the client--often someone who doesn't speak perfect English--leaves the country, making it difficult, if not impossible, to file a malpractice lawsuit. The entire system is obviously screwed up when it takes multiple contacts to a U.S. Senator to get a certificate confirming a citizen's existing status.

I'd like to thank Senator Feinstein's office for helping me when I had this issue. I don't know which individual in her office helped me, but I'd like to thank her, too. Without their help, I probably would have never gotten my citizenship certificate.