Rewrite economics 101

I think, maybe I was not simple enough explaining America's economic system. 

So let's try again!!

WE  have a new product (ficticous) spirkos, Everybody wants spirkos, they are a new fad and do something that everybody likes and are somewhat expesive but not out of reach for everyone. Let's say they cost $50 each and last 6 months. 

You own spirkos creations INC.  Your only purpose as owner of this corporation is to make a profit as you sold 100 shares to 100 people to get starting capital to open your business. These 100 people get a share of the profits you make. You start out with 4 divisions in your new corporation. Sales, Manufacturing, Delivery, Office staff. So you are now ready to make, sell, project, and manage your corporation.

Your cost to make a spirko is based on how much the raw materials, worker salary, rent, bills, insurance, tax, and other monetary costs are. Let us say it ends up costig you $37 to make 1 spirko. This means every spirko you make that is sold makes $13 for your corporation and its shareholders. Since everyone wants spirkos it would seem to be a no brainer that you will likely expand and there fore need more people employed to make spirkos, and sell spirkos faster, however this where Americas current crisis lies. Spirkos cost $50 each and although that is not that expensive it is extravagant when most households currently have at least 1 person unemployed or underemployed. 

You have but 1 goal, MAKE A PROFIT!!! So you look around and find that in other countries spirkos are just as popular as here. In fact in let's say India they love them! so you find out that to make spirkos in India would only cost you $7 each and you can charge $20 a spirko and still make the same profits but to a larger population and in doing so, you also find that it is MUCH easier to run your company in India as there is MUCH less regulation and insurance needed. You scale back your American operation to as few employees as you can and start making most of your SPIRKOS in India. Your profits soar and your shareholders are VERY happy. YOu are a success and you hire a good accounting team to make sure that you pay as little in taxes here in America as possible and you find that the current tax code rewards you for your current situation by allowing you to file your corporate taxes and even though your corporation is making 13 billion dollars in profit you will get a REFUND from out tax system of 70 Million dollars. You do not have to employ any new Americans which would bring your cost to make each spirko up. As  CEO os this corporation you earn a salary of say 10 million a year. This means you are making about $1,900 an hour, you pay your American employees who actually do the work $12 an hour and you make sure that no employee ever works more than 35 hours in a week as to not have to provide any benefits to them. 

This describes almost every successful corporation in America today!  The problem with this is that while these corporations make these enormous profits they are not using them to make America stronger. If all of these corporations would bring there manufacturing and sales jobs back to America employment would jump and then Americans would have the money to buy spirkos and keep the corporation in the same profit margin it has now, furthermore if the CEO would learn to live on a measly 5 million a year all of the employees would have better wages and better benefits and still maintain the same profitability.  WE desperately need a change to the tax code that would force these corporation to bring that work back to America and make them responsible for paying a penalty if they choose to keep the practice of destroying our economy by moving overseas while receiving refunds from American taxpayers who they are not helping. By making it more expensive to operate overseas with penalty taxes we could not only reduce our huge deficits but also bring unemployment down and a stronger middle class would thrive. 

I wrote this because today it was revealed that 25 Major corporations such as VERIZON, FORD, EBAY, GE and others actually have CEO's that made more money last year than there corporation paid in taxes. This is absolutely LUDICROUS.

I HOPE WE ALL WAKE UP BEFORE IT GETS MUCH WORSE AND STOP THE DIVISIVENESS THAT IS CURRENTLY RUINING OUR ONCE GREAT NATION.

Watch for my next blog explaining socialism. What it actually is and why America has it and fears it at the same time.

Dispelling MYTHS

I keep reading of how Obama's policies have destroyed our nation and how Obama is spending us into oblivion.... I also keep hearing about how Jimmy Carter was the worst president ever. I hear how republicans are the fiscally responsible party, So, I decided to do some research.

1. Obama's fiscal policies are destroying America?  Well the only fiscal policy that Obama has made since taking office was the stimulus that saved and/or created 3.2 million jobs according the CBO. Every other Obama fiscal policy has either died in the house or been filibustered to death in the senate so we are essentially still following the failed Bush fiscal path.  MYTH ADD ON  Obama has not submitted a budget since taking office. Actually the president is REQUIRED by law to submit an annual budget request every year and Obama has. Alas those budgets also killed in the house or filibustered in the senate.

2. Obama is spending us into oblivion. Well actually the opposite appears to be true, Discretionary spending under Obama is actually less than under Bush, This may because Republicans are fearful of asking for federal funding of programs that would create jobs. MYTH ADD ON when research is done to see the effects of lipstick on sperm whales many call it pork spending however the 150-300 people doing the study earn a salary and pay taxes and spend money on everyday products and services which all help our economy.

3. Jimmy Carter was the worst president ever.  I am not sure how people come up with this maybe they remember the long lines at the gas pumps or the gas shortages, maybe it was the Iran hostage crisis. Either way the truth is that Carter took office when Inflation was already rising out of control under Ford. Yet Carter managed to have a total of over 10 million new jobs created under him. He also cut our debt in half. Brokered peace between Isreal and Egypt, which was thought to be impossible. I can certainly think of worse presidents, Like George W. Bush or Herbert Hoover or Grover Cleveland.....

4. Republicans are the fiscally sane party.  Let me undo this myth from it's base. Democrats are known as the tax & spend party, Republicans are the Borrow and spend party. The records show that government spending is usually higher under Republicans than democrats but is spent on different things. Democrats tend to increase social programs and fund studies into how to better our air, drinking water, workplace safety... Republicans usually double the military budget and spend on helping BIG business expand. The main difference here is that Republican spending is usually financed by borrowed money as they do not like to increase taxes when necessary to pay for their fiscal policies. Democrats raise taxes and keep the bills from going up because tax money from Americans are invested in America.

5. There are more jobs under Republicans than Democrats. Again this is untrue when looking at the Bureau of Labor Statistics job creation by President. The chart below shows that we actually tend to have greater job growth under Democrats than Republicans. Oh well another myth busted.