Unsecured debt leads to recession

A year or more ago, I began subscribing to The Week. There's a one-page article in the current edition describing how recessions as far back as the 1600's in Holland have resulted from massive amounts of unsecured debt (couldn't find it online, so probably only available via print edition).

In the case of Holland 600 years ago, it was a bubble in the Tulip market. One gent traded his house for a tulip bulb -- a single tulip bulb. Another individual traded 12 acres of land for one bulb. The value

Redistribution of Wealth? Welfare? Taxes? Give Me a Break...(by guest author Aaron)

Redistribution of Wealth

I've been pummeled recently by people's attacks on the "redistribution of wealth" comment that was made by Senator Obama to (the now famous) Joe the Plumber, and I'd like to take this time to defend my position and support for the Senator.

Let me start be outlining a few analogies and arguments that people have been giving me.

Today on my way to lunch I passed a homeless guy with a sign that read "Vote Obama, I need the money." I laughed.

Once in the restaurant my server had on a "Obama 08" tie, again I laughed as he had given away his political preference--just imagine the coincidence.

When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need--the homeless guy outside. The server angrily stormed from my sight.

I went outside, gave the homeless guy $10 and told him to thank the server inside as I've decided he could use the money more. The homeless guy was grateful.

At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application...

First off, the analogy is somewhat flawed. The character who undertook this experiment doesn't seem to comprehend that by purchasing food, tipping, or giving money away (to the homeless man) is redistributing wealth. The waiter had no real wealth of which to speak, nor did the homeless man. The only wealth in consideration is that of the patron, who was already in the act of redistribution. You can't deny someone wealth based on the fact that one simply surmises that they are "wealthier" than someone else. I dare say that the homeless may make more per hour than the waiter anyway.

Wealth is rather an obscure consideration in all regards. Woodrow T. Wilson was quoted as saying "America was established not to create wealth but to realize a vision, to realize an ideal - to discover and maintain liberty among men.” I believe the outright desire to accrue and maintain wealth for one's self is one of the primary downfalls of this country. Greed is the most powerful form of corruption.

An overwhelming number of young voters are Obama supporters and defend his theory of wealth redistribution. However, how would these same college age voters feel if this type of redistribution concept were applied to their GPA?

For example, would a 4.0 student be willing to share their GPA with someone who is flunking out with a 1.5 GPA? Or would a 4.0 GPA honors student in Molecular Biology be willing to share his/her GPA with someone with a 2.0 GPA in an easier field of study?

Students who work hard in college are rewarded with a high GPA. Most students would be flatly opposed to sharing their hard earned GPA with someone who has failed to produce quality work.

In addition, a higher GPA often transfers into higher paying jobs. Under Obama, people with higher paying jobs and increased income should willingly share their compensation with those who have shown less commitment and not worked as hard to achieve success.

Let us be clear that GPA and finances are not remotely related. One does not pay taxes on a GPA. You can't use GPA to accrue goods or services. Therefore, I call it intellectual wealth. However, for purposes of illustration, I'll consider them to be the same. GPA does not necessarily transfer into higher paying jobs. Those with lack of GPA aren't necessarily lazy. What extenuating circumstances caused the problem originally? The fact of the matter is that you have no idea how those less fortunate ended up that way.

Welfare

Another point is the welfare issue. An acquaintance of mine recently stated "I don't think I should have to pay because people are lazy. I don't believe in welfare." Child Protection Services is considered part of the welfare system, as is aid to those with low incomes or inability to meet basic living costs, especially those who are raising children, elderly, unemployed, injured, sick or disabled.

For example, my father is a college educated engineer, who worked hard and was studious, received a degree, and was gainfully employed for a number of years. However, in the late nineties, he was laid-off through no fault of his own. They company for whom he worked decided that they could pay a less educated person less money to do the same job. So what we have here is a case of being unemployable by reason of over-education, and was forced for a short time to be on unemployment.

He happily paid his taxes, unemployment being one of them, and was happy to reap the benefit of it when, due to circumstances beyond his control, he became unemployed. Does this make my father lazy or unmotivated? I think not. I think it illustrates the basis of the system to which so many seem to have adverse reactions. My father worked hard, and when times became tough for him, he used the system as it is intended.

I'm not saying that some people don't abuse the system. I'm saying that the system should be available for those that actually need it, when they need it. Maybe the system needs to be rethought and reimplemented to prevent abuse, but the system can work. That, too, is a redistribution of wealth, and I don't think that's at all unfair.

Taxes

One of my primary positions on taxes is that living in America is NOT free. We are a free country, with rights to thought, speech, religion, et cetera. America is not a cost-free country. We enjoy major advantages over other societies and countries and we too often take it for granted. The general populace fails to realize that the deficit is our problem. It's partially what's caused the economy to plummet. We can't live for free and expect things to right themselves.

Furthermore, the entire concept of the tax change is to help promote the economic impact of the middle class. Joe posted a chart that outlines the realized savings, but there are some opponents. Let me dispell some rumors.The small business that makes more than $250,000 isn't really small business in terms of economic impact. You must realize that the taxable profit is calculated after payroll, operating expense, et cetera. As a small business owner, I know that sheer profit in excess of that figure is highly unlikely. An arresting fact is that I could make more money working for someone else than working for myself, but I enjoy the hours.

Beyond that point is people who wish to preserve their wealth, above and beyond a comfortable living wage. If something were to happen to them and they were forced onto the welfare system, they'd have a drastically different view of it. One has to fully consider the ramifications of the system before trying to change it or discount it completely.

A point that is frequently made is that the wealthiest 1% of the American population pay 40% of American taxes. That statement alone may seem unfair, but one has to consider that they control 70% of the disposable (liquid) assets in the United States. Such being the case, should they not pay 70% of the taxes as well?

There's another relation between the current tax system and its inefficiencies, versus the concept of a flat tax, but that's best saved for another post.

Downticket Still Important

I apologize for my recent absence. I've been having mechanical troubles. Bad timing to be sure, but life happens.

As election day comes closer, it's important to consider the ramifications of all the downticket races that are going on. General elections are important for a number of reasons, and oddly enough, the most heavily publicized aspect of them is most likely the least important. That's right folks, the presidential election is the LEAST important race we have going on for us right now.

A quick glance at my sample ballot presents me with a myriad of messed

My vote is cast!

I voted today! Happily, the total time from getting in line to walking back to my car was about 50 minutes. We have 13 early voting locations here in Hillsborough County Florida. This morning I drove to the Bloomingdale Library, arriving about 10 minutes before voting would start at 10am. But the line was already out to the street and cars were parked everywhere. So I decided to get back to work and try later in the day.

The wait wasn't as bad as I had expected, and the line was a little shorter than this morning. One of the neat things was getting to chat with other folks in line. There was an older woman behind me with whom I did most of the chatting. She and I are basically offsetting each other's votes :) ...She 'fessed up that she gets all of her "news" from Fox. Wow. I told her that I discount everything that Fox puts out there. She was telling me that Obama is a Muslim, borderline terrorist, Arab background, etc. She'd learned that "everything" that Obama says is a lie (this statement was repeated multiple times).

So I tried to dispel some of the falsehoods. She was unaware that ACORN (and any organization gathering voter registration forms) is required by law to turn in all forms, regardless of how phony the form's contents might appear.

It's not all her fault. Many people get their information from a single source, and that is never a good idea. Just as with a food diet, a news diet is healthiest when it includes variety.

We did, however, agree that it is wonderful to see so many people coming out to vote and participating in this most basic of our rights. Now it's YOUR turn!

Why I am voting for Barack Obama

My main criterion when deciding on a candidate is deciding which one will bring more compassion to the world. There are, of course, myriad issues that come into play. I trust Obama; I do not trust McCain. But taking what they've each said and done at face value, here is a chart I've published earlier showing clear differences in the stances of Obama and McCain (chart is based on information at ProCon.org):

I honestly cannot fathom how anyone can be undecided at this time. The 2 candidates are very different in their positions, so one need only look at a chart like this to have a pretty good idea of which candidate more closely matches one's own views.

It's an added - and very wonderful - plus that Obama has energized so many new voters. I would never want to see a law that forced everyone to vote, but I would love to see much higher voter participation. Obama's candidacy has resulted in many minority voters and many young voters registering and participating -- voters who otherwise might have stayed away from the polls.

And I am extremely impressed with how Obama conducts himself during the debates, during rallies, and during these most recent economic struggles.

It's looking like a very close election, so we can't yet know who will become our next President. But I have not been this enthused about a candidate in a very, very long time!