Pledge to America

[haha]

If I had children, I would definitely encourage them to take a look at the trades. Yes, it's a bit depressed now but the bottom line is that it's hard to outsource the fixing of leaky pipes to India, to send your car to China to have its transmission overhauled or build a local bridge in Singapore.

Not to mention that you won't enter "the real world" with $100,000 in student loan debt.

My Dad tried to encourage me in this direction, and short of becoming a hedge fund manager it would have been a pretty good idea. Even better idea today, as you point out because of the much more expensive education and loans, coupled with a more difficult post graduation job market.

I have a niece who graduated from an acclaimed journalism program, near the top of her class. Four years later her most high paying job opportuity has been managing a dry cleaning store and struggling to keep up with her loans. I wouldn't doubt that this might be her destination career, though she is very clever and hard working and she will undoubtedly get better positions as she goes along.

Ha

 

[RonBoyd]

Looks like the Senior Citizen League is a little math challenged. Using the link:

SS retirees got a 75% increase (exactly equal to CPI-W)
House members got 80%
Senators got 77%

I don't know about math-challenged but they, certainly, did use a nonsensical argument. The House increase ($77,000) is 1,458% greater than the difference ($72,433) between it and what SS Recipients got ($4,967).

But you are correct it is a silly statistic. They would have been better served not trying to "spin" it and simply said that Congress gave themselves $72,433 more per year than went to those old farts.

 

[Independent]

If I had children, I would definitely encourage them to take a look at the trades. Yes, it's a bit depressed now but the bottom line is that it's hard to outsource the fixing of leaky pipes to India, to send your car to China to have its transmission overhauled or build a local bridge in Singapore.

Not to mention that you won't enter "the real world" with $100,000 in student loan debt.

Depends, of course, on the kids. I think the top 20% academically can still do fine with college, if they want quantitative (math related) jobs. But IMO we're already sending too many kids to college.

 

[ziggy29]

But IMO we're already sending too many kids to college.

Agreed, and the result is "education creep" -- jobs that didn't used to require a degree for entry now do. So more and more people have to jump through the hoops and go into debt. My dad left the Air Force in 1966 and joined an aerospace company as a programmer -- with no degree. Try that today.

 

[HFWR]

Another good idea is to make H1-B visas easier to get and keep while closing the border to illegal immigration, reform public pensions, reform the entire medical system, not just squeeze Medicare, reform our over-active war-making system, and reform education from K through undergraduate university.

Ha, you been in the medical marijuana again?

I don't see anything but bidness as usual in the "Pledge". Granted, it's a return to bidness as usual circa 2001-2008, as opposed to 2009-2010, but we were running, what, $300-500B dollar deficits then; yeah, I suppose that's better...

 

[Gumby]

If I had children, I would definitely encourage them to take a look at the trades.

If I had children, I would recommend that they become electricians. Decent pay, no outsourcing, and cleaner working conditions than plumbers. I would discourage them from becoming lawyers.

 

[REWahoo]

If I had children, I would recommend that they become electricians. Decent pay, no outsourcing, and cleaner working conditions than plumbers.

I made this very recommendation to my CPA daughter regarding my three young grandsons. From her reaction you would have thought I told her I'd spent our entire nest egg buying an Equity Indexed Annuity from a Nigerian insurance company...

 

[Emeritus]

Ok lets try affect on retirees
for this discussion the elderly are 60+

1) The country is absolutely awash in capital. Interest rates are incredibly low.
2) with interest rates already low cutting taxes will do nothing for the economy without purchasing. I.e. focusing new money on investment is a waste of stimulation
3)The drag on the economy is low consumption. The problem with all stimulation is getting people to spend the money. The rich don't spend windfalls, they save them
4) the elderly are terrific consumers from a stimulation point of view. They don.t save windfalls. They also buy lots of personal services delivered by lower income people. Those people spend money on food and shelter and other necessities.
5) the elderly buy disproportionately fewer imported goods.

So the trick is to get stimulation money to the lower income elderly and get them to spend the money in the most productive way possible.

 

[Emeritus]

Agreed, and the result is "education creep" -- jobs that didn't used to require a degree for entry now do. So more and more people have to jump through the hoops and go into debt. My dad left the Air Force in 1966 and joined an aerospace company as a programmer -- with no degree. Try that today.

What a programmer did in 1966 and what a "programmer" does today have little in common. basically the brain job in 1966 was the systems analyst. One busy SA could keep 10 programmers going. Remember coding sheets?

Over time the jobs merged and machines and systems do more and more of what used to be programming. Current joke that programming is what you can outsource overseas.

 

[M Paquette]

So the trick is to get stimulation money to the lower income elderly and get them to spend the money in the most productive way possible.

I made an interesting proposal to our Congresscritter back in late 2008. If we need an economic stimulus, distribute it as a bunch of 'gift cards', those prepaid credit/debit cards similar to what FEMA has passed out the last couple of disasters. Add in the tweak that like the old gift cards, there is a 'maintenance fee' deducted from the card's value every month, so the value goes to zero after a year or so.

This was greeted with the expected "What an interesting idea. Now go away, kid, ya bother me."

 

[Emeritus]

I made an interesting proposal to our Congresscritter back in late 2008. If we need an economic stimulus, distribute it as a bunch of 'gift cards', those prepaid credit/debit cards similar to what FEMA has passed out the last couple of disasters. Add in the tweak that like the old gift cards, there is a 'maintenance fee' deducted from the card's value every month, so the value goes to zero after a year or so.

This was greeted with the expected "What an interesting idea. Now go away, kid, ya bother me."

Could work, if there are people who take the cards

Expanding food stamps (which are of course also cards) is one of the easiest was to stimulate)

 

[ERD50]

Ok lets try affect on retirees
for this discussion the elderly are 60+

1) The country is absolutely awash in capital. Interest rates are incredibly low.
2) with interest rates already low cutting taxes will do nothing for the economy without purchasing. I.e. focusing new money on investment is a waste of stimulation
3)The drag on the economy is low consumption. The problem with all stimulation is getting people to spend the money. The rich don't spend windfalls, they save them
4) the elderly are terrific consumers from a stimulation point of view. They don.t save windfalls. They also buy lots of personal services delivered by lower income people. Those people spend money on food and shelter and other necessities.
5) the elderly buy disproportionately fewer imported goods.

So the trick is to get stimulation money to the lower income elderly and get them to spend the money in the most productive way possible.

I follow you, a reasonable progression, but I guess I just don't agree that we can 'spend our way' to prosperity. I think we need to 'earn our way' to prosperity. Create value - people will spend on things of value, and the value creation pumps money into the economy. Rinse, repeat.

It seems we tried the 'spend our way' to prosperity by pushing easy credit and easy mortgages. It just isn't sustainable. If you are talking about a short term bump, than I agree to get it into the hands that will spend it. But then what?

Similar to some comments in this thread, and some exchanges I had with ziggy recently - I don't think we can 'protect' our way into high paying jobs that can be done overseas for less. We have to provide the value to make our hours worth more $ than theirs. I just don't see anything else as sustainable.

While I'm at it, I'll add to those who mentioned trades as an option. I know some smart people who took that route and are doing very well. And they are fully aware that doing 'unglamorous' work can be financially rewarding. It's still challenging, you are providing a needed service for people, and you take the money and enjoy some glamor in your off-time. Don't discount it.

-ERD50

 

[ERD50]

This was greeted with the expected "What an interesting idea. Now go away, kid, ya bother me."

That's better than what I get - an auto-response litany of all the great things my representative is doing for me.

-ERD50

 

[Emeritus]

I follow you, a reasonable progression, but I guess I just don't agree that we can 'spend our way' to prosperity. I think we need to 'earn our way' to prosperity. Create value - people will spend on things of value, and the value creation pumps money into the economy. Rinse, repeat.

It seems we tried the 'spend our way' to prosperity by pushing easy credit and easy mortgages. It just isn't sustainable. If you are talking about a short term bump, than I agree to get it into the hands that will spend it. But then what?

Similar to some comments in this thread, and some exchanges I had with ziggy recently - I don't think we can 'protect' our way into high paying jobs that can be done overseas for less. We have to provide the value to make our hours worth more $ than theirs. I just don't see anything else as sustainable.

While I'm at it, I'll add to those who mentioned trades as an option. I know some smart people who took that route and are doing very well. And they are fully aware that doing 'unglamorous' work can be financially rewarding. It's still challenging, you are providing a needed service for people, and you take the money and enjoy some glamor in your off-time. Don't discount it.

-ERD50

You are conflating long term and short term issues. The USA is a very wealthy country by any measure. We are prosperous. However the income flows to a very small portion of the population. This has produced a consumption trap. You can create any product you want, but unless people have the money to buy it IT HAS NO VALUE. You can't create value if buyers have no money.

We have a vast number of unemployed people who, if properly employed would create products. Similarly if those people had money they would buy other peoples products. You can't start a car without a battery.

The horrible mistake of the Bush tax cuts was to reward flight capital.
By concentrating cuts at the upper income level the money moves out of the country.
There is a gigantic difference between tax cuts for the rich and tax subsidies for domestic investment.

I am totally anti protectionist, but a rational society taxes and spends in such away as to encourage its economy.

As to trades, most of the high income trades rely on licensing laws or union work rules that are demonstrably anti competitive and rarely can be shown to improve safety

free market trades e.g. Watchmakers, tree cutters etc reap benefits in accordance with their education skill and the value they add.

 

[obgyn65]

Sorry I am not sure I understand here. Are you saying too much education for future generations is a bad thing ?

But IMO we're already sending too many kids to college.

 

[obgyn65]

Hello Emeritus - please could you kindly provide references to your assertion below which seems to contradict the "trickle down effect" theory ? Thank you.

3)The drag on the economy is low consumption. The problem with all stimulation is getting people to spend the money. The rich don't spend windfalls, they save them

 

[donheff]

I follow you, a reasonable progression, but I guess I just don't agree that we can 'spend our way' to prosperity. I think we need to 'earn our way' to prosperity. Create value - people will spend on things of value, and the value creation pumps money into the economy. Rinse, repeat.

It seems we tried the 'spend our way' to prosperity by pushing easy credit and easy mortgages. It just isn't sustainable. If you are talking about a short term bump, than I agree to get it into the hands that will spend it. But then what?

This is what bothers me the most about both the Dem and GOP extension proposals -- they are permanent. I buy the stimulus argument in the face of a stagnant economy and high unemployment and agree with Emeritus that we don't need more capital invested today (the tax breaks for the rich). That is why I prefer extending only the lower income tax cuts. But we have to structurally orient ourselves to pay the piper when things get better and permanent tax cuts don't do it. As for the promises to cut spending someday soon, implement those cuts in law and then cut taxes!

 

[Emeritus]

Hello Emeritus - please could you kindly provide references to your assertion below which seems to contradict the "trickle down effect" theory ? Thank you.

Im not sure what level of this debate you are coming from but here is a starter piece
Economic Stimulus Act: Hard to Kill Two Birds with One Stone - Brookings Institution

 

[Emeritus]

This is what bothers me the most about both the Dem and GOP extension proposals -- they are permanent. I buy the stimulus argument in the face of a stagnant economy and high unemployment and agree with Emeritus that we don't need more capital invested today (the tax breaks for the rich). That is why I prefer extending only the lower income tax cuts. But we have to structurally orient ourselves to pay the piper when things get better and permanent tax cuts don't do it. As for the promises to cut spending someday soon, implement those cuts in law and then cut taxes!

The argument for stable tax policy is well founded. But clearly the Bush tax cuts were made with borrowed money and are thus unsustainable. As stimulation they were inefficient. As a reward to powerful political interests they were wonderful. The rich are pouring tons of "stealth money " into the tea party and 501 c 6 organizations to keep the tax cuts for the wealthy.

The rhetoric is endless. In fact we have the smallest government sector and the highest percentage of taxes spent on the military of any fully developed OECD country.

Unless you cut military spending, you are not cutting the size of the government

 

[ziggy29]

Sorry I am not sure I understand here. Are you saying too much education for future generations is a bad thing ?

I think the point was that to the extent most people look at college as little more than a way to get a "better" job, there aren't nearly enough of these "better" jobs compared to the increasing number of students pursuing that magical piece of paper. We are producing way more college grads than we are producing job openings for college grads.

More education is not a bad thing, but the days of expecting it being a punched ticket to the good life economically (and in their chosen field of study) are coming to a close.

What it really means is that more people need to really consider their motivations for college. If it's just to make more money or find a more secure career, it's entirely possible (depending on their aptitudes) that college might not be the best choice, especially if it's not heavily subsidized by scholarships and/or parents who can afford it.

 

[RonBoyd]

Sorry I am not sure I understand here. Are you saying too much education for future generations is a bad thing ?

(Scarecrow)
I could wile away the hours
Conferrin' with the flowers
Consultin' with the rain
And my head I'd be scratchin'
While my thoughts were busy hatchin'
If I only had a brain

I'd unravel any riddle
For any individ'le
In trouble or in pain

(Dorothy)
With the thoughts you'd be thinkin'
You could be another Lincoln
If you only had a brain

(Scarecrow)
Oh, I would tell you why
The ocean's near the shore
I could think of things I never thunk before
And then I'd sit and think some more

I would not be just a nuffin'
My head all full of stuffin'
My heart all full of pain
I would dance and be merry
Life would be a ding-a-derry
If I only had a brain

 

[obgyn65]

Thank you for clarifying Ziggy.

I think the point was that to the extent most people look at college as little more than a way to get a "better" job, there aren't nearly enough of these "better" jobs compared to the increasing number of students pursuing that magical piece of paper. We are producing way more college grads than we are producing job openings for college grads.

More education is not a bad thing, but the days of expecting it being a punched ticket to the good life economically (and in their chosen field of study) are coming to a close.

What it really means is that more people need to really consider their motivations for college. If it's just to make more money or find a more secure career, it's entirely possible (depending on their aptitudes) that college might not be the best choice, especially if it's not heavily subsidized by scholarships and/or parents who can afford it.

 

[obgyn65]

Thank you Emeritus. I am neither a lawyer nor an economist. Quite new to this site but willing and happy to learn as I am considering early retirement. I appreciate your answer.

Im not sure what level of this debate you are coming from but here is a starter piece
Economic Stimulus Act: Hard to Kill Two Birds with One Stone - Brookings Institution

 

[BTravlin]

The rhetoric is endless. In fact we have the smallest government sector and the highest percentage of taxes spent on the military of any fully developed OECD country.

Unless you cut military spending, you are not cutting the size of the government

Yes, military spending needs to be cut drastically. We have hundreds of military bases around the world and many of them just aren't needed anymore. And many have expensive golf courses, tennis courts, gyms, etc.

But spending really needs to be cut pretty much across the board in order for us to back away from the brink of bankruptcy. The Energy Dept was started in the 70's to reduce our dependence on foreign oil and has been a total failure. The Dept of Education is basically just a bunch fact gatherers and checkers. Dept of Agriculture seems to specialize in securing handouts for big agribusiness.

We all need to be pushing our Congresscritters to truly cut spending and start reducing our national debt otherwise we'll all be trying to figure out which dry dog food tastes best. The canned stuff will be too pricey for our budgets!

 

[Independent]

Sorry I am not sure I understand here. Are you saying too much education for future generations is a bad thing ?

I can always argue that learning art history, if that's something you enjoy, isn't a bad thing. So, if I'm the type of person who enjoys education for personal enjoyment, I can't get too much.

I was viewing this from an economic perspective. There is no economic value in sending lots of kids to college to get degrees in art history if the number of grads vastly outnumbers the number of jobs that really require the specialized knowledge in art history.

Unfortunately, I believe that it isn't only art history degrees that are in oversupply.

Some people will say that college grads, even with non-attractive majors, still do better economically. I'd say much of that is just college as a signalling mechanism. A degree shows you've got some minimum level of brains and self discipline, but you had them before you started college.

Some people will say that kids grow up a lot in college. I'd say 18-22 year olds will grow up a lot in the military or in unskilled jobs at a much lower cost.

From a pure economic perspective, I'm pretty sure we could develop a better system.