Warm Southern Breeze

"… there is no such thing as nothing."

Posts Tagged ‘Economic Infrastucture’

Cheating On Taxes, Bumming A Ride, And Economic Growth

Posted by Warm Southern Breeze on Wednesday, June 30, 2021

Renown U.S. economist John Kenneth Galbraith (1908-2006) identified an economic theory – the “horse and sparrow” – which he described thusly:

“If you feed the horse enough oats,
some will pass through to the road for the sparrows.”

Today, we call that “trickle down” economics – the theory popularized and promoted by POTUS Ronald Reagan. Never mind that the word “trickle down” just sounds so very wrong – the picture of urine being foremost – but the renown London School of Economics has recently put the kibosh on that idea, after studying history of 38 nations over 50 years which did the same thing – cut taxes on the wealthy in the hopes that it would provide economic stimulus of various and sundry types.

It did not.

For anyone who’s been paying even the slightest amount of attention, they would know that the world’s wealthiest man – Jeff Bezos – paid practically no income taxes on his vast personal fortune, neither did his corporation, Amazon. He was by no means the only one who shirked their patriotic duty by cheating the government, there were many more – billionaire pal Elon Musk is among them.

Dr. John Kenneth Galbraith, PhD, was a noted economist and author, the Paul M. Warburg Professor of Economics, Emeritus, at Harvard University, former Ambassador to India, and former Presidential Advisor. Internationally renown for development of Keynesian and post-Keynesian economics, he was equally well-known for his wit and candor, evidenced in his prolific writings, which included over 30 books. His last book was a 1999 memoir “Name-Dropping,” in which he wrote about the historical individuals whom he’d known in his long, colorful life as an economist, professor, ambassador, and lifelong liberal.
Harvard University News Office image handout

As well, PayPal founder Peter Thiel, another billionaire, took unfair and unjust advantage of a Roth IRA – a savings vehicle created and designed to benefit the working families of America – and using tricks and maneuvers not available to the average person, turned a retirement account worth under $2000 in 1999, into a $5 billion tax-free windfall by the end of 2019. That same year, Forbes estimated his net worth at $2.3 billion – less than half of his Roth IRA’s value.

In stark contrast, the average Roth IRA was valued at $39,108 at the end of 2018.

So, we have one perspective, but let’s put things in even more clear focus, shall we?

How much is $5 billion?

If every single one of the 2.3 million people in Houston, Texas were to deposit $2,000 into a bank today, the total of all their accounts would still not equal what Peter Thiel has in his Roth IRA.

Of course, since a Roth IRA is a retirement income savings vehicle, taxation of deposited funds is not just significantly deferred until after the 60th birthday of the depositor, it is 100% TAX FREE FOREVER. So in essence, he cheated the system.

While you, I, and other patriotic Americans are dutifully paying our income taxes like the loyal citizens we are – paying for all of our nation’s governmental services, military service members salaries, defense budget, and more – most all wealthy Americans are very happy to continue shirking their responsibilities to pay their fair share, and are even more happy that you, I, and every other red-blooded patriotic American are picking up the tab for them.

This article details exactly how PayPal billionaire Peter Thiel truly cheated a system which was NOT designed for wealthy individuals.
https://www.propublica.org/article/lord-of-the-roths-how-tech-mogul-peter-thiel-turned-a-retirement-account-for-the-middle-class-into-a-5-billion-dollar-tax-free-piggy-bank

This article cites prospective Congressional action which will likely be taken following publication, and discovery of the abuses of the Roth IRA by Peter Thiel, and other ultra-wealthy individuals.
The Ultrawealthy Have Hijacked Roth IRAs. The Senate Finance Chair Is Eyeing a Crackdown.
https://www.propublica.org/article/the-ultrawealthy-have-hijacked-roth-iras-the-senate-finance-chair-is-eyeing-a-crackdown

Now, as for the Horse And Sparrow Theory, a research paper by the London School of Economics found that, contrary to the assertions of those who promoted them, tax cuts upon the wealthy DO NOT improve the economy in any way whatsoever.

The study examined Read the rest of this entry »

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The United States is Penny Wise and Pound Foolish

Posted by Warm Southern Breeze on Friday, November 8, 2019

I considered naming this entry “It’s All Bad: Bridges, Schools, Roads, Dams, Aviation, Drinking Water, Energy, Inland Waterways, Ports, Schools, Wastewater, Solid Waste, Transit, Public Parks, Hazardous Waste, etc.,” but decided to change it.

Perhaps the initial title was some help to guide the reader in the direction the entry would go.

Eventually, it’ll cost you money… but it’s already doing that.

Read on to see how.

Bluntly, America’s Economic Infrastructure sucks, and blows gnarly chunks.

What’s “Economic Infrastructure”?

Glad you asked.

Broadly, “Economic Infrastructure” refers to several categories of physical improvements which facilitate civil society, providing it an opportunity to grow.

Sometimes also simply called “infrastructure,” the U.S. Department of Homeland Security defines 16 categories, or Critical Infrastructure Sectors, including (in alphabetical order):

1.) Chemical – converts various raw materials into over 70,000 different products essential to modern life, including Basic, Specialty, and Agricultural chemicals, Pharmaceuticals, Consumer products

2.) Commercial Facilities – diverse sites that draw large crowds of people for shopping, business, entertainment, or lodging.

3.) Communications – provides a critical, enabling function and integral component of the U.S. economy, underlying the operations of all businesses, public safety organizations, and government via terrestrial, satellite, wireline and wireless transmission systems

4.) Critical Manufacturing – metals, machinery, transportation equipment, electrical, appliance, components

5.) Dams – dam projects, navigation locks, levees, hurricane barriers, mine tailings impoundments, and other similar water retention and/or control facilities.

6.) Defense Industrial Base – enables research, development, design, production, delivery, and maintenance of military weapons systems, subsystems, and components or parts to meet U.S. military requirements.

7.) Emergency Services – paid and volunteer at the federal, state, local, tribal, and territorial levels of government, including city police departments and fire stations, county sheriff’s offices, Department of Defense police and fire departments, and town public works departments, including private sector resources, such as industrial fire departments, private security organizations, and private emergency medical services providers

8.) Energy – provides an “enabling function” across all critical infrastructure sectors. More than 80% of the country’s energy infrastructure is owned by the private sector, supplying fuels to the transportation industry, electricity to households and businesses, and other sources of energy integral to growth and production across the nation.

9.) Financial Services – depository institutions, investment products providers, insurance companies, other credit and financing organizations, and providers of the critical financial utilities and services that support these functions, and allow customers to: Deposit funds and make payments to other parties, Provide credit and liquidity to customers, Invest funds for long and short periods, Transfer financial risks between customers

10.) Food and Agriculture – composed of an estimated 2.1 million farms, 935,000 restaurants, and more than 200,000 registered food manufacturing, processing, and storage facilities. This sector accounts for roughly one-fifth of the nation’s economic activity.

11.) Government Facilities – a wide variety of buildings, located in the United States and overseas, owned or leased by federal, state, local, and tribal governments. Many government facilities are open to the public for business activities, commercial transactions, or recreational activities while others not open to the public contain highly sensitive information, materials, processes, and equipment. These facilities include general-use office buildings and special-use military installations, embassies, courthouses, national laboratories, and structures that may house critical equipment, systems, networks, and functions. In addition to physical structures, the sector includes cyber elements that contribute to the protection of sector assets (e.g., access control systems and closed-circuit television systems) as well as individuals who perform essential functions or possess tactical, operational, or strategic knowledge.

12.) Healthcare and Public Health – protects all sectors of the economy from hazards such as terrorism, infectious disease outbreaks, and natural disasters. While healthcare tends to be delivered and managed locally, the public health component of the sector, focused primarily on population health, is managed across all levels of government: national, state, regional, local, tribal, and territorial.

13.) Information Technology – operated by a combination of entities — often owners and operators and their respective associations — that maintain and reconstitute the network, including the Internet, central to the nation’s security, economy, and public health and safety as businesses, governments, academia, and private citizens

14.) Nuclear Reactors Materials and Waste – provide electricity to millions of Americans, to the medical isotopes used to treat cancer patients.

15.) Transportation Systems – moves people and goods quickly, safely, and securely through the country and overseas. Includes Aviation, Highway and Motor Carrier, Maritime Transportation System, Mass Transit and Passenger Rail, Pipeline Systems, Freight Rail, Postal and Shipping.

16.) Water and Wastewater – Safe drinking water is a prerequisite for protecting public health and all human activity. Properly treated wastewater is vital for preventing disease and protecting the environment. Thus, ensuring the supply of drinking water and wastewater treatment and service is essential to modern life and the Nation’s economy.

Altogether, every item in those categories all facilitate commerce, private enterprise, are component parts of a local, and state economy, and as a whole, comprise the national economy. Some of the sectors, such as Food and Agriculture, and Communications, are almost wholly owned by private enterprise. In fact, the only publicly owned, i.e., governmentally-owned, are Government Facilities. There are perhaps a few others, but there are very few, and very far in-between.

Each sector is interconnected; there is not one sector which stands alone, self-sufficient and isolated. Some sectors are more interconnected than others, such as the Communications sector, while others, such as Dams, may not have as many connections. But each one is interdependent upon the others. What affects one, affects all others. It is like a line from the John Donne poem Devotions Upon Emergent Occasions, Meditation XVII, most often called “For Whom The Bell Tolls,” which states in pertinent part that, “No man is an island, entire of itself; every man is a piece of the continent, a part of the main.”

All of that brings us to our next point.

As it pertains to common use by all, Economic Infrastructure is considered by Engineers, Architects, Urban Planners, Politicians, and even Entrepreneurs and Business Leaders as being – at the most fundamental level – those faculties and facilities which enable and promote commerce, and improve the lives of residents.

Before going further, let me interrupt that train of thought to say this about socialism.

Properly defined, socialism is a condition in which the government controls the means and the method of production – such as with a government-owned factory. The former Soviet Union (now known as “Russia”) had many such government-owned factories.
The United States has NEVER had any such thing.
And, if one considered the coinage and currency in their pockets
– minted and printed by the United States Treasury Department on government-owned machines –
it is STILL not considered an example of socialism.

Why not?

The raw materials – the paper, ink, metals, and machines to make it – all came from the Private Sector via publicly bid contracts.

Continuing…

The American Society of Civil Engineers (ASCE) rates America’s Infrastructure a “D+.” https://www.InfrastructureReportCard.org/

The ASCE identifies some 16 very similar categories of capital improvements as being (in alphabetical order):
1.) Aviation
2.) Bridges
3.) Dams
4.) Drinking Water
5.) Energy
6.) Hazardous Waste
7.) Inland Waterways
8.) Levees
9.) Ports
10.) Public Parks
11.) Rail
12.) Roads
13.) Schools
14.) Solid Waste
15.) Transit
16.) Wastewater

About the report, they wrote in part that “Every four years, the American Society of Civil Engineers (ASCE) publishes The Infrastructure Report Card, which grades the current state of national infrastructure categories on a scale of A through F. Since 1998, America’s infrastructure has earned persistent D averages, and the failure to close the investment gap with needed maintenance and improvements has continued. But the larger question at stake is the implication of D+ infrastructure on America’s economic future. The 2017 Infrastructure Report Card found the national grade for infrastructure remains at a “D+” — the same grade the United States received in 2013 — suggesting only incremental progress was made over the last four years toward restoring America’s infrastructure. ASCE evaluated 16 categories of infrastructure in the 2017 Report Card, with grades ranging from a “B” for Rail to a “D-” for Transit.

Consider also this: “The need for wastewater infrastructure exceeds $271 Billion.”

So… how does this affect you, and your family?

Check this out.

In 2016, the ASCE published a document titled “Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future,” which stated in part the following:

“The cost of deteriorating infrastructure takes a toll on families’ disposable household income and impacts the quality and quantity of jobs in the U.S. economy. With deteriorating infrastructure, higher business costs will be incurred in terms of charges for services and efficiency, which will lead to higher costs incurred by households for goods and services due to the rising prices passed on by businesses.

“As a consequence, U.S. businesses will be more inefficient. As costs rise, business productivity falls, causing GDP to drop, cutting employment, and ultimately reducing personal income.

“From 2016 to 2025, each household will lose $3,400 each year in disposable income due to infrastructure deficiencies; and if not addressed, the loss will grow to an average of $5,100 annually from 2026 to 2040, resulting in cumulative losses up to almost $34,000 per household from 2016 to 2025 and almost $111,000 from 2016 to 2040 (all dollars in 2015 value).

“Over time, these impacts will also affect businesses’ ability to provide well-paying jobs, further reducing incomes. If this investment gap is not addressed throughout the nation’s infrastructure sectors by 2025, the economy is expected to lose almost $4 trillion in GDP, resulting in a loss of 2.5 million jobs in 2025.

“Moreover, workers who are employed will earn lower wages, and in the long term, many higher paying jobs in technology and other leading sectors will be replaced by jobs that fulfill needs brought on by the inefficiencies of deteriorating infrastructure.

“Closing each infrastructure investment gap is possible, and the economic consequences caused by these gaps are avoidable with investment.”

Does that hit home hard enough?

And yet, we’re almost there.

What about the roads in your town, city, state, and nationwide? Are they in pristine condition? I sincerely doubt it. Pothole-filled roads tear up your car, don’t they? That costs you money, and time, because you gotta’ find another way around the rotten roads so your car won’t be destroyed by traveling upon them. But, what if you can’t?

Business Insider magazine recently published a story headlined about America’s most dangerous bridges in all 50 states.
https://www.businessinsider.com/most-dangerous-bridges-america-2017-5

Reckon what it’d cost to fix ’em ALL? Not just to fill every pothole, or fix every cracked roadway, but to (if necessary) rebuild EVERY SINGLE SOLITARY road in the United States? And while you’re at it, expand and build more – and add to it coast-to-coast high-speed, mag-lev monorail trains. China, Germany, England, France, Japan, and other nations already have high-speed trains, and monorail trains are even in Disneyland.

WHY CAN’T WE BUILD A BETTER SYSTEM FOR EVERYONE TO USE?

Imagine what it’d be like to be able to Read the rest of this entry »

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Green New Deal? How about Economic Infrastructure New Deal, instead?

Posted by Warm Southern Breeze on Thursday, November 7, 2019

Whether one “believes” Climate Change is “real,” or not, is totally a specious argument.

Specious means “superficially plausible, but actually wrong.”

Why is it specious?

Arguing about what causes rain while your roof is leaking is pretty stupid, don’t you think?

And yet, that’s exactly what’s happening.

This map shows federal flood damage claims from 2008 to 2018. Flood risk in many parts of the U.S. is on the rise, in part because climate change is driving more frequent and intense storms, higher seas and extreme rain. Extreme rain in 2013 caused catastrophic flooding in Boulder County, CO, including dangerous flash floods. Similar storms in 2011, 2014 and 2019 flooded much of Holt County, MO. –– Flood Insurance Claims Per 1,000 People, 2010-2018

Some people (Climate Change Science deniers) are arguing about the causes, while the devastation it wreaks continues UNABATED.

Instead, what we NEED TO DO is REBUILD -and- EXPAND our crumbling national Economic Infrastructure to – as much as possible – reduce the influence these events have upon us.

Even BIG INSURANCE companies all agree that the economic losses our nation is suffering CANNOT be sustained without serious lasting damage to our national economy.

The Geneva Association (properly, The “International Association for the Study of Insurance Economics”) is a leading international think tank of the insurance industry, which detects early ideas and emerging debates on political, economic and societal issues concerning the insurance industry.

In November 2018, they published a research paper titled “Global Weather Catastrophes, Trends, Losses, Insurance Costs Source: Managing Physical Climate Risk—Leveraging Innovations in Catastrophe Risk Modelling,” and in it, wrote in part that,

“Over the last three and a half decades, we have observed a trend of rising economic losses from extreme events globally. Between 1980 and 2017, Munich Re’s NatCatSERVICE reported 17,320 disaster loss events. Of those, 91.2% were caused by weather-related extremes (meteorological, hydrological and climatological events), accounting for 49.2% of the total of 1,723,738 lives lost, 79.8% of the total USD 4,615 billion in reported economic losses and 90.1% of total insured losses of USD 1,269 bn.

“In 2017, weather-related extremes accounted for 97% of total reported economic losses and 98.2% of Read the rest of this entry »

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