Archive for March, 2013

Captain Rick: The object of this game is to try and save American capitalism before the government takes over everything. To date, there is no known player who has won. The government wins every time. 

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The game board looks interesting. It reminds me of the fun times I had as a kid playing Monopoly for hours and even days before finally taking over everything…or loosing everything.

I don’t think Bamopoly would be very much fun to play…because no one likes to loose all of the time. It also reminds me very much of real life in America. Its people play this game every day to try and get ahead and promote capitalism… but it seems like big government is always there to take over everything.

I have a strong feeling that one of these days, the government is going to loose this game…because of the way it has been cheating its players…the citizens of America. Unfortunately when it looses the game, there will be no winners.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

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Captain Rick: The U.S. managed to crawl out of the GDP recession zone in its ‘final’ report for Q4 2012 to post a dismal 0.4% GDP, second worst since the end of the Great Recession in 2009. The first estimate in January reported –0.1% GDP, in the recession zone. 

GDP (Gross National Product) is the broadest means of quantifying the health of an economy.

In my previous GDP report, I stated: “If Congress gets tough and addresses the debt crisis head on, I suspect it will present a deeper, temporary plunge into negative growth territory. If Congress continues to ‘kick the can down the road’, I suspect we will see less of a dive in GDP early on…but will set the stage for a much deeper dive in a year or two…possibly as deep or deeper than the ‘Great Recession’ of 2008-2009”.

The U.S. Congress passed and President Obama signed legislation to “kick the debt can down the road” AGAIN as reported in my previous post. While these actions have no effect on GDP for Q4 2012, they will effect GDP for Q1 2013 and beyond.

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The red line in the chart above indicates the 3% level that the U.S. GDP must maintain to keep up with population growth. GDP has been far short of that for many years. In spite of the positive hype we are hearing in the mainstream news media, America is traversing extremely dangerous economic waters. Hype does not fix problems… credible action does. Unfortunately the world is seeing ‘zero’ credible action out of the politicians who represent the citizens of the United States of America.

Prognosis for the future…where are we headed?

I see several troubling economic factors that parallel the times leading up to the ‘Great Recession’. The world stock markets have reached a new high, passing those reached just prior to the stock market crash of 2008. Like then, I see no justifiable reason for the market rise. Today’s market reminds me of a bunch of gamblers in Vegas looking for a place to throw all of their dollars to bet it all. The market is again inflating into a balloon ripe for explosion. Real estate prices have been climbing at a fast pace, as is real estate speculation…similar to that witnessed prior to the bursting of the real estate bubble, prior to the Great Recession. I can not predict how much farther things can go before a repeat of 2008 occurs…or perhaps worse, but I feel that a down slide is coming soon. Much will have to do with congress’s handling of the debt crisis (very dismal at this point). It will be further complicated by the multi-trillion dollar cost of Obamacare (the worlds greatest socialized, welfare medical program). In addition, we must remember that multi millions of baby boomers are beginning to collect Social Security from a trust fund that has been totally robbed of funds to finance the U.S. Government and its politician’s thirst for deficit spending. It will all play out in a very ugly scene before the world’s eyes during the next few years.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/

Captain Rick: The March 27 deadline for the U.S. government shutdown has been averted by yet another stunt by U.S. lawmakers to kick the U.S ‘debt can’ down the road AGAIN until the end of the fiscal year in September … when it will all come back to haunt us AGAIN.

U.S lawmakers finally brought the 2013 budget fight to an end on March 21 by approving a bill that ended the threat of a U.S. government shutdown on March 27. It funds the government through the end of the current fiscal year in September. The measure now set to become law reduces the impact of the $85 billion in forced cuts — called sequestration — to only $59 billion.

It establishes stop-gap budgets for targeted departments and programs. It resets priorities and helps better manage the draconian formula as set forth by the sequestration spending cuts. Overall, the legislation locks in $984 billion in non-entitlement program spending — a tiny drop from the $1.043 trillion initially approved before the forced sequestration cuts took effect.

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I believe I speak for most Americans and many people around the world when I say … we have had enough of the “U.S. Capital Circus”. Its time for America’s president and lawmakers to unite and figure out a real solution to get America off of the deficit spending binge and balance the budget, followed by a way to pay back America’s monumental national debt of $1.7 trillion, which now exceeds America’s GDP. This is an extremely serious world economic issue … the world’s largest! Nothing else comes close in magnitude. Time is running short. Without real, credible action soon, America will fall over the real ‘Fiscal Cliff’ … a point of ‘no return’. It will take much of the world along for the fall.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Captain Rick: Gilbert, Arizona: 5 of 7 council members voted on March 7, 2013 to increase employee compensation by $12 million during the coming year…a cost of $60 for each of Gilbert’s 220,000 citizens. A recent market study conducted by a consulting firm stated that Gilbert employees are paid 2% below the private sector and 13% below the public sector in the Phoenix area. 5 council members voted to use an average of these percentages to raise employee salary mid-points to be 6.5% above the private sector. 2 council members voted to scale back the mid-point from 50% to 45%, effectively promoting a 1.5% increase above the private sector.

I found the employee compensation study remarkable, but not surprising, that it shows that Gilbert lags the public sector by 13% and the private sector by 2%, an 11 percentage point difference. It leads me to draw one of two conclusions. Either the public sector is overpaid by 11 percentage points or the public sector is 11 percentage points less productive. Based on my perception of the public sector over many decades, I suspect the reason is a combination of both. A 2% increase in Gilbert job scales to bring them equal to the 50th percentile of the private sector is justifiable. 2 council members offered a 1.5% premium on top of that. It was rejected by the other 5 members who voted for a 6.5% premium. In my opinion, they do not understand math or economics.

This legislation contained great improvements to the way Gilbert currently manages employee compensation. It is such a shame that 5 members of our council had to bastardize it by NOT listening to the common sense presented by the other 2. Gilbert should be a leader of efficiency, not a follower of inefficiency, which this vote provides. I hope that this post will help draw these 5 members back to reality to find a way to correct this gross travesty they have cast upon the citizens of my town of Gilbert, the place I have loved to call home for over 15 years.

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Captain Rick presents the first Gilbert Council PROPER VOTE award of 2013 to Victor Petersen and Jared Taylor for voting NO on this issue.

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Your PROPER VOTE has been registered on Captain Rick’s Gilbert Council Scorecard: https://atridim.wordpress.com/gilbert-council-scorecard/

How much increase in pay can Gilbert employees expect?

Based on data from Gilbert’s 2012-2013 Budget (link below), if we divide the $11,900,000 expenditure approved by this vote, by 1201 Gilbert employees, the resultant is an average of 12.3% pay increase or $9,909 annually. The average Gilbert salary will be $90,748. That is one heck of a salary. I am wondering how many private sector employees make a salary as lucitive as this and if Gilbert has too many high paid ‘Chiefs’ and well paid ‘Indians’?

Gilbert’s 2012-2013 Budget: http://www.gilbertaz.gov/budget/pdf/2012-13%20BUDGET%20DOC%20-%20WEBfinal.pdf

Supporting data details:

General fund:

869.32 employees (page 66) at a cost of $74,059,895 (page 68).

$8,000,000 in pay increases, approved by this vote, results in an average 10.8% pay increase of $9203 annually.

Non general fund:

Enterprise: 238.93 positions (page 66) at a cost of $15,908,094 (page 150)

Streets: 51.3 positions (page 66) at a cost of $3,445,856 (page 200)

Internal service funds: 26 positions (page 66) at a cost of $1,685,730 (page 212)

Capital Projects: 5.75 positions (page 66) at a cost of $555,040 (page 240)

Special Revenue: 9.6 positions (page 66) at a cost of $1,434,000 (page 226)

Total Non-Gen: 331.58 positions (sum) at a cost of $23,028,720 personnel costs (sum)

$3,900,000 in pay increases, approved by this vote, results in an average 16.9% pay increase of $11,762 annually

Total costs: $74,059,895 (General fund) + $23,028,720 (Non-General funds) =  $97,088,615

Average salary with approved increase

$97,088,615 (Total costs) + $11,900,000 (approved increase) = $108,988,615  / 1201 employees = $90,748

Note: All financial figures include employer contributions to Social Security, retirement and healthcare.

Captain Rick: Much of America and other places need to fiddle with their clocks tonight to switch to ‘Daylight Savings Time’…except for the few places that have found one time that works great all year…like Arizona, where people do not  waste time fiddling with their clocks. They have much better ways to enjoy their time.

Daylight Savings Time…what is that? It’s a joke. There is no such thing as saving daylight. A day has 24 hours and the thus the world has 24 geological time zones. During each hour the world rotates 1/24th of its daily spin. That’s about 1000 miles per hour for most areas in America and other countries within 45 degrees latitude of the equator. I bet most people do not realize they are constantly moving that fast.image

Where a person lives east/west in each time zone governs when the sun appears to rise and set. People living in the eastern area of a time zone see the sun rise and set earlier than those living in the western area of a time zone. Unfortunately, time zones do not follow earth’s longitudinal lines, because they were set by politicians a long time ago. Because of this, many areas of the world are improperly placed into the wrong geological time zone. Daylight Savings Time effectively transfers many of these problem areas back into the time zone they should have originally been placed in. However, for some it makes the problem much worse.

Arizona is fortunate that it lies on the split between the geological Mountain and Pacific Time zones, thus the rise and set of the sun works perfect all year. I hope to report on more of this interesting subject in a subsequent report.

Captain Rick: The Dow Jones closed today at 14253.77, a new record…topping the previous high close of 14164.53 on October 9, 2007…just prior to the market crash, followed by the Great Recession.

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Captain Rick’s Investment 101

As a successful investor, I can not stress enough the importance of the old investment cliché: “buy low, sell high”. It has worked with excellence for me. Intelligent investors bought during the steep dive you see at the left of the chart, while most sold out of fear (it was scary, but smart)…and then began to sell and reap excellent rewards during the uphill recovery on the right (it was a ‘chicken move’, but smart).

If you have a significant amount of money invested in a 401K, other program or directly in stocks and bonds, I highly recommend you begin to transfer some of those funds to a safe prime money market fund. Your investment won’t make money, but it will be safe from loss when the market crashes again…and it will. Its just a matter of time. With the U.S. economy stalled with zero real job growth and the U.S. GDP approaching negative “recession” territory, this is time to sell…not buy!

I extend this word of investment caution to everyone around the world. We all live in a global economy. I hope all of my friends around the world are paying attention to my blog posts which keep all aware of the very serious elements unfolding upon our world.

Captain Rick: That “debt can” that President Obama kicked down the road on January 1 by signing of the American Taxpayer Relief Act of 2012, in an effort to avoid the Fiscal Cliff, revisits on March 27, 2013 when the federal government again faces a shutdown because it has again reached the debt ceiling, now set at $16.4 trillion.

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Funding for the U.S. government expires on March 27, 2013 unless Congress acts. If they fail, the federal government will shut down on March 28. All government operations would cease, except for essential services.

Since lawmakers will not agree to a real budget by this date, they will have to agree on temporarily funding the government for a few weeks or a few months … again. The Republicans are presenting a plan on Thursday to extending funding to the end of the fiscal years which ends is September, but it includes a $7 billion restoration of defense funds in exchange for cuts elsewhere. A big question remains…will Democrats go along with this? It will all unfold in coming days.

Boehner’s comments on NBC’s “Meet the Press”

It is evident that the Republicans will allow no more tax increases…made very clear by House Speaker John A. Boehner (R-Ohio) who said on NBC’s “Meet the Press” that he discussed the need to avoid a shutdown with President Obama at a meeting Friday between the president and congressional leaders.

Boehner said the House will vote this week to keep the federal government operating through September, when the fiscal year ends, and avoid a potentially politically damaging shutdown.

The move would be the second time since the election that Boehner has avoided a fight, desired by some House conservatives, in order to keep the GOP from possible blame. He led House Republicans to raise the debt ceiling in January to fend off a repeat of the 2011 conflict that led to the sequester.

“The president this morning agreed that we should not have any talk of a government shutdown,” Boehner said. “So I’m hopeful that the House and Senate will be able to work through this.”

“I’m going to say it one more time,” Boehner said. “The president got his tax hikes on January the first. The issue here is spending. Spending is out of control. There are smarter ways to cut spending than this silly sequester that the president demanded. And so, we need to address the long-term spending problem. But we can’t cut our way to prosperity.”

“We had a very pleasant meeting, but it was also a very frank meeting,” Boehner said. “I made it clear to the president that again, a trillion dollars worth of tax hikes in Obamacare. And you have another $650 billion worth of tax hikes on January the first. You can’t tax our way out of this problem. We’ve got to deal with the spending side, just like every American family has to.”

Listen, every American knows Washington has a spending problem. Every American, in these tough economic times, has to find a way to balance their budget.”

Boehner said Republicans were done raising taxes after agreeing to the “fiscal cliff” deal in January that raised more than $600 billion in revenue. Any new revenue gained from closing tax loopholes, he said, should be put into lowering tax rates.

“The president got $650 billion of higher taxes on the American people on January the 1st,” Boehner said. “How much more does he want? When is the president going to address the spending side of this?”

Captain Rick’s closing thoughts …  will Washington avert shutdown again”?

I think most Americans are with me in expecting that Washington will pull off a circus act just prior to the closing curtain as it always manages to do. However, this showdown is not a done deal…especially concerning the defense appropriations. I think the Defense Department should endure the same cuts as as all others. I don’t think it needs special treatment. I believe many Americans believe the U.S. Defense Department could easily be cut without sacrificing America’s safety. I think many will agree that it is time for America to stop playing “Police of the World” …at American taxpayer expense.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/