Ask a D.C. insider what’s the best way to solve the debt crisis. Nine times out of ten, they’ll recommend taking on more debt. That’s how things operate in the Potomac swamp. Up is down, right is left, digging yourself into more debt is the best way to get out of it. But it wasn’t always like this. In fact, there used to be common sense when it came to the economy. So where did it all go wrong?
Politicians talk about the uninsured. Special interests argue on behalf of those with pre-existing conditions. But why is no one wondering how doctors are affected by the new law? They’re the ones on the frontlines dealing directly with new patients, as well as the red tape that makes bureaucracies go round.
Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.
What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Gas in Vegas is a dollar cheaper a gallon than in the Golden State, or so a friend and recent LA transplant tells me. He went on to say the top tax rate in California is over 13%, while, of course, Nevada has no state income tax.
Over dinner at Del Frisco’s, he explained how industries are being ruined by runaway government in his old home state. Nevada would surely benefit from businesses making their escape. Plenty of people are leaving California — nearly 700,000, I read somewhere — however, my friend says these 700,000 have been replaced by an equal amount of uncounted “illegals,” as he put it.
The California legislature has democratic supermajorities in both chambers, and of course, California voters have determined that what ails their great state can be fixed with the return of Jerry Brown to the governor’s mansion.
But what really ails California, like many other states, is mathematics. The state’s inflow doesn’t cover its outflow. Like Greece, California can’t print its own currency (although it does resort to IOUs occasionally). Gov. Brown was stunned to find a $28 billion “wall of debt” when he took office.
How’s this happen in a state with so much going for it?
California is one of many despotic states that are losing residents in favor of those that are less despotic.
People are leaving the red for the green, and none is redder than the one-time golden state. Here is a picture of what freedom does (it attracts people) and what tyranny does (it drives people away). Fear not: pick up and move! It’s more effective than political action.
In general, state governments don’t seem to be the best negotiators when putting together pay and retirement packages. There’s something about spending someone else’s money that makes one less careful than if spending his own.
“It starts with the governor and the legislature and wanders down the line. These people are playing with the taxpayers’ money,” said Steven Frates, research director of Pepperdine University’s Davenport Institute.
States paid out more than $711 million to 111,000 people who left jobs as employees of the 12 most populous U.S. states last year for unused vacation and other paid time off, according to payroll data on 1.4 million public workers compiled by Bloomberg.
Employees from California accounted for 39% of that total. Since 2005 the Golden State has shelled out $1.4 billion for unused vacation and other paid time off. That kind of money would put a lot of cops on the beat and teachers in classrooms. Instead, this taxpayer dough is ensuring cushy retirements for government workers who are no longer on the job.
For instance, the state of California cut a $608,821 check to psychiatrist Gertrudis Agcaoili, who retired last year from a state mental hospital in Napa, Calif. Ms. Agcaoili kept her nose to the Freudian grindstone for 30 years, not taking vacation, and now she’s cashing in. She makes no apologies, telling Bloomberg, “It was my prerogative, I did not go on vacation.” End of interview.
But in the private sector, vacation is a use-it-or-lose-it proposition. Or maybe a few weeks can be banked, but not 72 weeks like Ms. Agcaoili had, who pulled down $2.4 million in pay from the state since 2005. And there should be no fear that Ms. Agcaoili will be dining on cat food in her retirement: The California Public Employees’ Retirement System (CalPERS) will be paying her $199,000 a year in pension payments.
Since the state is so short on money, employees have actually been encouraged not to take their vacations. In fact, the state is happy to accommodate them, because filling in for vacationers is costly.
“Requiring employees to take all of their leave would have increased overtime costs at state prisons and hospitals, lowered reimbursements in tax collection and other fee-generating programs, and reduced services in other settings,” state of California HR man David Gay told Bloomberg.
Prison guards in California can now accrue unlimited vacation time courtesy of Gov. Brown. According to California’s nonpartisan Legislative Analyst’s Office, the average prison guard has accumulated 19 weeks of unused vacation, a liability estimated at $600 million. These are the same prison guards that received a 34% raise in pay from Gov. Gray Davis when he was in office.
“Of the 100 biggest payments in 2011 in the dozen [most populous] states, all but 10 went to California state workers. The average payout for the top 100 was $178,267, in addition to regular wages,” says Bloomberg.
There’s a rule limiting the accrual of unused leave to 640 hours, but everyone ignores it. Well, evidently, as Bloomberg reports, unused leave grew from $1.4 billion in 2003 to $3.9 billion in 2011.
Paying out for the accrual of unused leave would bankrupt a private company. While government workers are always believed to be underworked, many assumed they’re underpaid as well. Not hardly, as Michael B. Marois & Rodney Yap explain:
“The lump-sum retirement payments, seldom granted in private industry, mirror a broader trend in which California’s public employees receive far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base salary to overtime. California, the world’s ninth- biggest economy, has set a pattern for lax management, inefficient operations, and out-of-control costs, the Bloomberg data show.”
In addition to Ms. Agcaoili, other state employees are cashing in big. A highway patrol officer collected $484,000 in pay and pension benefits while 17 employees received checks of more than $200,000 for unused vacation and leave. According to Bloomberg’s data, the best-paid staff in other states earned far less for the same work.
But California is hardly alone with inflated government salaries. Firemen in Clark County, Nev. (Las Vegas), routinely make well into six-figure salaries and overtime pay. The first several pages of these salaries compiled in 2009 by Las Vegas Channel 8 are firefighters making well over $100,000.
Ms. Agcaoili is 79, but many cops and firefighters retire in their 50s, collect nearly 100% of their salary as a pension, and then start new careers.This leaves cities and states to pay for two or three cops to have only one on the beat.
The math just does not work. The clock is ticking on California. People are fleeing. Soon it will not be so golden.