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I have an honest question for you, a question that I don't have the answer to.  I'm hoping you do.

Thankfully our economy is flying high.  Our official unemployment rate is around 4%, which I've always heard was considered "full employment".  Those final 4% who weren't employed (and perhaps that many more who weren't even looking) were often said to prefer welfare to a minimum wage job, couldn't pass a drug test, had a violent criminal history, etc, which made them "unemployable".

In my area (Dallas) there are "help wanted" signs everywhere you turn, especially in food service and retail.  In the construction field additional plumbers, electricians, carpenters, etc, are desperately needed.  The same goes for the health care industry, too.

Now Congress has passed and the President has signed a tax cut bill hoping that many companies will plan major expansions and create millions of new jobs.  So far there have already been announcements by Intel, Apple, Amazon, and many more that they are now hiring.  Right now Amazon is looking for a location to build a second headquarters (what exactly is a second headquarters?) promising 50,000 jobs to the winning city....on and on.

The Trump administration is threatening to deport the "dreamers", kids who were brought here by their parents who entered the US illegally.  They say there are 800,000 dreamers who are here now in school, in the military, and working.  If those who are now employed are deported, that will mean even more job vacancies.

My question is now obvious.  Where are we going to find quality candidates to fill all the positions we already have, plus the new jobs being created, plus the vacancies created by dreamers (and others) leaving, plus normal job attrition?  

It sounds like we're already scraping the bottom of the employment pool barrel right now.  Isn't this likely to mean a wild bidding spree by employers, driving up wages and salaries for those willing to change jobs?  Good for employees, sure, but won't that also create serious inflationary pressures?

This reminds me of the old saying, "Be careful what you wish for."  It's truly a blessing to have this "problem", but please tell me, where are all these new workers going to come from?

S

Is it just me or are we being suckered?

Can somebody PLEASE explain to me how giving a tax cut to (primarily) businesses and the wealthy will create new jobs? 

The argument the GOP seems to be putting forward is that businesses would LOVE to expand and hire more, but they just can't afford to.  But if they had a few hundred billion dollars more thanks to a tax cut, they'd hang out their "now hiring" shingle.

Consider this:  Southwest Airlines, headquartered right here in my back yard (Dallas), has bought back FOUR BILLION DOLLARS worth of their own stock in just the past two years, even after doubling their dividends.  They're swimming in cash, but can't find anywhere better to invest it than in their own company. Lucky them!

They could have taken that four billion dollars and bought another 30 Boeing 737's, and hired a corresponding number of pilots and flight attendants and mechanics, etc, AND PAID CASH FOR IT ALL, but they didn't.  Why?  Because they knew there wasn't enough demand to fill all those new seats without cutting prices to the point where there was no profit in it.  

I doubt many people making more than $500K a year, the ones who would benefit the most from a tax cut, are holding back taking a trip to Florida because they can't afford it.  But among those making $50K a year, a tax cut might indeed tempt them to jump on a Southwest jet and travel. 

The tax cut now being presented to us would only benefit the middle class for a couple of years, then they'd see their taxes go UP.  It seems to me that would dampen demand.  The "middle class" reference is just a tease, hoping it will pacify us until their bill is passed and signed, then they'll drop us like a hot potato.

Just increasing capacity will not create long term jobs. Once businesses realize they can't sell all they can produce, they'll start laying off all those new workers they just hired.  If the gubment truly wants to create jobs, why don't they take a few hundred billion dollars and start building new and repairing our older interstate highways, bridges, airports, etc?  That would create sustainable DEMAND for new heavy equipment, concrete, steel and more for years to come.  All those middle class people doing the work would then be able to buy more, thus creating a snowball effect.

Am I missing something?  I swear I was paying attention during my college Economics classes.  If someone can explain to me where I'm wrong, I'll certainly consider their argument.

S

Follow the money

The Senate is currently on their third....or is it their fourth or fifth....iteration of a "Repeal and Replace ObamaCare" attempt, and this one is no better than the ones that came before it.  As bad as ObamaCare supposedly is, all their attempts to date have been giant steps BACKWARD.  The highlight of the current Republican bill is to give each state a "block grant", essentially a pot of cash, and then tell them to figure out what to do with health care.  "Not my circus, not my monkey" the Feds can then say.

Polls show less than 20% of Americans like this giant step backwards.  Neither does AARP, or the American Medical Association, or the various hospital associations, or the insurers, or the drug makers, or the American Cancer Society, The American Heart Association, the Diabetes Foundation, or any other group advocating on behalf of people with health issues.  So why are Republicans so hellbent on ramming this "reform" down our throats?  Who wins in this deal?

FOLLOW THE MONEY

The only logical explanation I can come up with is that, to Republicans, "Repeal and Replace ObamaCare" is simply a means to a greater goal.  They have told their ultra-wealthy mega-donors that they will deliver to them a giant tax cut, but before they can do that, they first have to come up with a pile of cash from somewhere.  That "somewhere", they have decreed, will be from the Federal healthcare kitty....cut a few hundred billion here, transfer it on to there.  But if they can't realize big savings via a repeal/replace bill, their promised wealth transfer, their REAL goal, is dead in the water.  

If you can think of another reason why congressional Republicans are pushing so hard to pass such a supremely unpopular bill, please let me know.

If they should ever succeed in achieving this goal, hold on!  Their next target will be Medicare and Social Security.  Speaker of the House Paul Ryan has already (correctly) labeled them as the two most expensive Federal programs that can be looted...er..."reformed" in order to realize great savings.  He just never tells us where those savings will go.

So, as is always the case, FOLLOW THE MONEY.  That will show you who is pulling the strings, and who the big winner will always be.

S

Beware the new snake oil salesmen....

Snake oil salesmen....you can find them walking around the halls of Congress hawking their Republican agenda.

Now don't get upset Republican friends.  I'm not saying YOU are a snake oil salesman.  I'm saying you're being SOLD snake oil by the Republican congressmen and Senators who you trusted.  You're being played.  Consider this:

Their #1 agenda item (they say) is to repeal and replace ObamaCare.  They say to you that by stripping out $800,000,000,000 it will bring down the cost of your health insurance, which is now sky-high and has deductibles so steep many of you can't even afford to use it.  Their version will be better they say.  What it will do that they conveniently play down is push up the price of insurance for those over about 55 years old who are now beginning to have some health issues.  Their premiums will go up dramatically after any new Republican plan now being considered is adapted.  

And if you or a family member have a disease or are otherwise handicapped and have effectively been pushed down into the Medicaid-eligible category, you're screwed.  Kids already living in poverty will see their healthcare cut back too, as will the 45% of all seniors (maybe one of your parents, or you one day?) living in nursing homes who depend on Medicaid to survive (and that's no exaggeration).

It isn't just liberal Democrats who believe this.  Read THIS to see why the American Medical Association, hardly a bunch of wild-eyed Bernie supporters, opposes The Republican plan(s).  The American Hospital Association, and not surprisingly the American Association of Retired Persons (AARP), feels the same.  

My Republican friends, you're being sold snake oil.  If your guys in Congress prevail, what you will actually get is NOT what they're selling you.  Reform, definitely, but this isn't it.  This is just the first step towards what they really want, which is a tax cut overwhelmingly benefiting the wealthy.  And if they can't save $800 BILLION on healthcare, they can't get their tax cut.  "Healthcare" is just a pawn in their bigger game.

Tax reform....that's what the Republican leadership calls it.  They want you to believe tax rates will be simplified, loopholes will be closed, and when the dust settles your tax system will be more equitable.  It will still be progressive (the more you make, the more you pay), but the middle class will be better off.  That's all a smoke screen.  What the middle class might save will be negligible if anything.  A tax cut for the rich, the benefactors who fund their political careers, is what it really is.

The Republican leadership will tell you that, yes, their tax reform windfall will go primarily to the rich, but the rich will in turn invest it back into the economy and create jobs.  They'll say it over and over again...JOBS, JOBS, JOBS!  That's straight out of Economics 101.  It's a valid economic theory, but doesn't fit the economic reality we have today.

This is important to understand: 

As of July 24th (yesterday) the 10 year Treasury yield was a very low 2.30%.  A low yield means there is already lots of money out there chasing very little demand.

WE'RE SWIMMING IN MONEY RIGHT NOW, LOOKING FOR A PLACE TO INVEST IT!

American corporations alone (not including individuals) already have $1.9 TRILLION dollars just sitting around.  (Check THIS for more interesting info.)  Giving the wealthy another few hundred BILLION dollars, when they can't even find a place to invest what they already have, WON'T CREATE JOBS!  We'll still see monthly job increases due to the fact that our population/economy is slowly growing and maturing.  But a massive transfer of wealth to the already wealthy won't result in a massive explosion of new jobs.

My Republican friends, you're being sold snake oil.  Your leaders have an agenda they aren't being truthful with you about.  Please stop them, and think this through.

S

The BIG LIE II

Remember the Big Whopper President Obama told us back in '09?  Of course you do....it's been part of the Republican's talking points ever since.  It's what the Democrats promised us if we would only approve the Affordable Care Act, aka ObamaCare.  As it turned out many of us couldn't keep our doctors, or the old insurance plans we had, either.  BAD DEMOCRATS!

Well, get ready for The BIG LIE II, courtesy of the Republicans this time.  It goes like this:  If we'll just approve the ObamaCare replacement bill now before the Senate, or the one passed by the House of Representatives, our insurance premiums will come DOWN!  DOWN they say! 

Can I get an AMEN?

OK....exhale, engage your brain, and think about that.  Here is the reality:  Your health care insurance premiums are NOT going to come down.  Our population is growing.  More people will need more healthcare, and a smaller percentage of them will have insurance.  The percentage of workers covered by employer-provided insurance is declining.  That's an undeniable fact.  And we are living longer, due largely to better medical technology and better, more effective pharmaceuticals.  Another fact.

This technology and these medicines are expensive to develop and use.  Many Baby Boomers who benefit from this miraculous 21st Century healthcare are also in a precarious financial position.  After 30 years of receiving merit and cost of living raises, they're prime for being pink slipped, their jobs being taken over by younger employees who will happily work for much less.  And to plug any talent shortfall, companies often just call back the very workers they separated and offer them work on a contract basis....for less money and without benefits, of course.  Do I even need to mention the number of jobs that have gone overseas?  More people previously insured are no longer covered.  Fact!

For those still enjoying employer-provided health insurance, it's being watered down.  My personal experience was that in the last few years I had such insurance my deductible went from $500 a year to $1,000, then claims were paid at 70% vs the previous 80% of the balance.  After that my yearly out-of-pocket expense was capped at $6,600, up from the previous $3,000 per person, and if I used doctors outside their "network", it could be as high as $39,000.  Copays per visit went from $10 to $20 ($50 for specialists).  Many people may have insurance, yet they can't afford to use it.  Still, our premiums went up modestly.  Can you imagine how much they would have gone up without this watering down?

With a tightening cap on Medicaid, fewer people in need will be able to get regular health care.  Understand, most Medicaid recipients are children, those with handicaps, and the elderly.  They will still be able to visit hospital emergency rooms for treatment, but the hospitals and doctors will just have to write off any payment for their services as unrecoverable.  This will require them to RAISE the fees they charge those who DO have insurance, putting further upward pressure on premiums.  Again, an undeniable fact.

And without Medicaid, and for those simply without any insurance at all, there will be fewer preventive screenings.  Currently, future chronic conditions can be identified early through regular checkups and treated.  With more people receiving fewer preventive screenings, their conditions will fester and become much more expensive to treat later, costs that will once again be dumped back on society and eventually show up as higher premiums.

It's unlikely IMO that insurance companies will open themselves up to nationwide competition.  The state Boards of Insurance, and the insurance companies, have too much power and $$$ to lose if that happens.  That will be negotiated out in exchange for their acceptance of a repeal/replace bill.

Likewise it will still likely be mandated that American consumers buy their prescriptions from American pharmacies, and not be allowed to legally shop overseas.  Big Pharma is now allowed to charge whatever they want here, which is just about the only place in the world they still can.  We're their cash cow!  They're not going to give that up without a huge fight!

I'll stop there....you get my point.  While ObamaCare has not proven to be the cure-all many had hoped for, the Republican's BIG LIE II will be a giant step BACKWARDS.  The only thing it will do is remove $800,000,000,000 from the Treasury's debt obligation that they can then give (mostly) to the wealthy in the form of a tax cut.  (That's really what this is all about.)

Wise up friends.  Say NO to this slight of hand.

S

Credit where credit is due

In the three weeks since President Donald (Donnie John) Trump was inaugurated it seems his administration has been plagued with the "Ready, Fire, Aim" syndrome.  His Executive Orders have almost become comical in how half-baked they come out.  Not surprisingly, all Democrats, many Independents, and even a growing number of Republicans are shaking in their boots, wondering what's going to hit the fan next.  

The good news in all this is that Saturday Night Live has no shortage of material to run with.  There's no such thing as "bad" publicity, right?  Right?

But to be fair, I can think of one thing that Prez Donnie John has done that he should be commended for.  On a regular basis (so far) he has held meetings with business leaders as diverse as Intel, Ford, GM, and all the airlines, small business groups, labor groups, and even special interest groups, supposedly to find out what's on their minds and what he can do to get them to ramp up hiring.  

Some of it has been for show no doubt, as when the CEO of Intel announced that they were spending $7Billion on a new facility in Arizona that will all total add 10,000 new jobs.  Donnie John of course took credit, even though it later turned out that Intel had been planning this for several years.  Still, momentum being what it is, expect others to jump on the bandwagon, too. From his perspective it might be an "ugly win", but it's still a win.  Kudos.

~~~~~~~~~~~~~~~

Yesterday all the stock markets shot through the roof on the news from the Oval Office that we could expect a major announcement in a couple of weeks on tax reform.  "It's tremendous, just incredible.  You'll love it!  Really, you will."

This could be trickier to get through than you might think.  A big tax cut sounds great, until you realize that it will swell the Federal deficit even more, something the hard-core GOP deficit hawks are going to balk at.  The sales pitch will be that the deficit will be offset by more tax revenue due to increased business activity / lower unemployment.  

The Democrats will throw right back Kansas Governor Sam Brownback's failed attempt to do this very thing, leaving his state with a terrible budget mess.   

What do I think?  I think it will be interesting.  *wink*

S

"Now you see it....now you don't."

I recently read that the Greek government, which we all know is an economic basket case, is about to finalize a treaty with Switzerland that will allow them access to the records and the money, estimated to be up to 20 billion Euros, that wealthy Greeks have parked in Swiss banks as a tax dodge.  This follows on similar treaties that Germany, Austria, the UK, and I believe the US, too (?) have negotiated, all to catch tax cheats and bring in more dollars, pounds, and Euros to the respective government coffers.

The problem is, however, that there is a lag time of many months after signing a treaty before it goes into effect.  The wealthy, some say with the help of their Swiss bankers, are using this interlude to move their money to new tax shelters being set up in wealth-friendly Hong Kong and Singapore.  In other words, it's still out of reach of the tax revenooers.

Here's my question:  In this country at least, the wealthy argue that their taxes should be cut dramatically because it is they and their money that create jobs.  If billions of dollars (some say TRILLIONS of dollars) are constantly on the move in this giant shell game of tax dodge, how is that creating jobs?

Somebody please 'splain it to me.  What little business acumen I have doesn't understand how this ultra-high-roller game is played.  Seems to me this is just making the case for those who argue "the rich get richer".  What am I missing?

S