Posts tagged with: USD

Blog author: johnteevan
posted by on Thursday, April 17, 2014

There are several ways to understand that poverty is expensive.

First poor people pay more for the things they buy or they find that cheap stuff is not good. The poor find it hard to pay for housing which leads to having a harder time saving money even by cooking. The poor have a hard time using a bank or even cashing a check without high fees.

Then there are the lower wage part-time jobs that some bosses make worse by urging people to work a few minutes or more or even over lunch for free.

A second way to look at the expense of poverty was highlighted by the 50th anniversary of the War on Poverty. The amount spent on poverty reduction, $1t annually, is terrifically expensive. Most of that comes from 80 means-tested federal programs according to Heritage’s Steven Moore.

A trillion dollars is equal to each of 45m people having $22,222. Of course, money is not given to people, there is a vast government and private web of helpers who work hard to improve conditions for those in poverty.  And they are paid well.

The third way, a way I think is better than the first two, is to count the cost of poverty in terms of wasted lives, wasted opportunity, and loss to our society.

If even 15m people went to work and earned $22,222 our GDP would thrive, tax revenues would rise and programs to help the poor would require dramatically less money.

There is dignity to work, satisfaction in working with others to meet a goal, and the pleasure of doing your job well and being paid for it. Millions are missing that opportunity and are living lives that tend toward mere passivity.

The high cost of poverty is essentially a human cost that is not limited to economic deprivation. The upside is that many who have little tend to be more spiritually rich than others though this idea is treated as a phony sop to keep people down.

Blog author: jcarter
posted by on Tuesday, April 15, 2014

7figures[Note: '7 Figures' is a new, occasional series highlighting data and information from a variety of surveys and reports.]

1. The average federal tax rate for all households (tax liabilities divided by income, including government transfer payments) before taxes is 18.1 percent.

2. Households in the top quintile (including the top percentile) paid 68.8 percent of all federal taxes, households in the middle quintile paid 9.1 percent, and those in the bottom quintile paid 0.4 percent of federal taxes. (Quintiles — fifths — contain equal numbers of people.)

3. Social insurance taxes (e.g., Social Security, Medicare) account for the largest share of taxes paid by households in all but the top quintile.

4. The U.S. tax code is approximately 2,600 pages long (about 1.5 times longer than Tolstoy’s War and Peace and 2.5 times longer than Ayn Rand’s Atlas Shrugged).
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bitcoin“For federal tax purposes, virtual currency is treated as property.”

With those ten words, the IRS has made it more difficult — if not impossible — for bitcoin and other virtual currencies from gaining widespread, mainstream acceptance as a currency for commercial transactions. Because they are now treated as property, virtual currencies are considered, like stocks, bonds, and other investment property, as capital assets and will be subject to capital gains tax.

But why does this hinder bitcoins use a currency? The answer is fungibility: Bitcoins are no longer completely fungible.
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College-Fund-by-Tax-CreditsSenator Elizabeth Warren (D-MA), a potential 2016 presidential candidate, recently argued that Congress should hike taxes on families and small businesses making more than $1 million, then use the tax revenue to let debt-ridden students refinance their college loans.

As a progressive redistribution scheme it’s rather ingenious: It allows the government to take money from private individuals and businesses and give it to other businesses (i.e., college and universities), all while giving the impression of helping another group of private individuals (i.e., students who take indebt themselves by taking out college loans). Warren’s proposal is an brilliant blend of cronyism, special interest pandering, and “soak the rich” class envy – which is why it has a high likelihood of becoming law.

But if we look past the proposal we discovers something else that is fueling the student loan debt “crisis.” Whenever a nanny state solution like this is proposed, we should ask why the government is needed to serve as a governess. In this case, it appears the government is being asked to be a surrogate parent because of the failings of actual parents.

According to a study by sociologists at Rice University, college students whose parents are not married to each other face significantly heavier financial burdens for the simple reason that married parents, relative to other parents, contribute significantly more to their children’s college education:
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Blog author: jcarter
posted by on Wednesday, March 5, 2014

bitcoin-deadLast year I wrote a series of blog posts about what Christians should know about Bitcoin. In response, one astute reader pointed out an odd juxtaposition: my conclusion seemed to imply that Christians should avoid Bitcoin “at all cost” and yet the Acton Institute accepts donations in Bitcoin. “I really want to know the rationale behind this,” he said.

Well, the rationale is easy enough to explain: Not everyone at Acton agrees with me. Like other nerds who have an interest in the intersection of economics, liberty, and technology, many of us at Acton disagree about the merits of Bitcoin. (I’d offer to place a gentleman’s wager on the future of the crypto-currency, but they’d want to bet using Bitcoin. Either way – whether it increased in value or went defunct – I’d end up the loser.)

Opinions are still divided, but the evidence that Bitcoin is doomed to failure piles up almost every day. Over the 8 month span from October 2010 to June 2011, the market value of Bitcoins skyrocketed 9667-fold from a value of $0.06 to $29. Later, when I wrote my series last April, a single Bitcoin was worth less than $100. Today, it is worth $660, and that’s after falling from a high of $1,100 in November 2013. A currency that can fluctuate from $0.06 to $1,110 in a three-year period is not a currency – it’s a speculative bubble.

Of course, we Bitcoin doomsayers have been waiting for the bubble to pop for some time now. We also tend to think that every new drop is a sign of it’s impending doom. Fellow naysayer Jonathan Last is sure, this time, that the end of Bitcoin is near:
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cpr uncle samThe Gateway Pundit gives us a list of “fun” facts about the economy. Of course, “fun” is used in an ironic way, which become clear when you look at just how dreary these facts are:

  • $1.8 Trillion: Cost Of ObamaCare’s Coverage Provisions From 2014 To 2023 (CBO, 7/30/13)
  • $1 Trillion: The Total Student Debt Held By Americans. (Josh Mitchell, “Student-Loan Debt Slows Recovery,” The Wall Street Journal’s Real Time Economics, 12/30/13)

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Detroit Institute of Arts - IMG 8923

Christians often talk a big game about “redeeming” the culture.

I think the current dilemma facing the Detroit Institute of Arts (DIA) amid the city of Detroit’s bankruptcy provides a great opportunity to back up that talk with something concrete. And there’s perhaps no more concrete way of redeeming something, buying it back, than from the threat of bankruptcy.

That’s why I’ve started a crowdfunding campaign to redeem the DIA. The federal judge overseeing the proceedings wants to raise $500 million to privatize the DIA and keep it in Detroit. He’s gathered together a number of charitable foundations. But individuals have a role to play, too. A former Wayne State University professor has donated $5 million. That leaves $495 million to go by my count. And that’s the goal for the “Redeem the DIA” campaign at Razoo.

For more on the need to privatize the DIA, read my Acton Commentary from last July.

Blog author: jballor
posted by on Tuesday, December 10, 2013

Most commentators, apart from Virginia Postrel and the like, seem to think that it would be tragic for the city of Detroit to lose the art collection at the Detroit Institute of Arts (DIA) in the city’s bankruptcy proceedings. I agree that liquidating or “monetizing” the collection and shipping the works off to parts unknown like the spare pieces on a totaled car would be tragic.

Diego Rivera - Detroit Industry MuralsBut at the same time, there’s something about the relationship between the DIA collection and the city government (not to be confused with the people of the city itself) that would seem to warrant the city government’s loss of this asset. When you are a bad steward, even what little you have will be taken from you.

Now one could argue about the details of the DIA’s day-to-day operations, the compensation package for its director, and so on. But apart from these details of stewardship of the DIA itself, the real object lesson in bad stewardship has to do with the city government. Rife with structural corruption, cronyism, and incompetence, the city has been unable to provide the basic services and protection that it is responsible for, despite the best efforts of so many individuals working within the city government. So when the city cannot do the primary things it needs to do, it should lose the privilege of overseeing the secondary things, at the very least until it proves itself to be a responsible steward.
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DetroitInstituteoftheArts2010AEarlier this year I argued for a plan that would privatize the DIA, allowing for the City of Detroit to cash in on a measure of the collection’s worth to satisfy creditors and simultaneously protect the DIA’s artwork from being parceled out in bankruptcy proceedings. At the time, I had doubts about the practicability of the idea. I figured that even if such a path were to be pursued that the DIA would likely end up torn apart like a chew toy. Once the city’s creditors realize that they might be able to extract something of value from the DIA, they have all the incentive in the world to demand an exorbitant price for privatizing the DIA. Likewise the city officials would have a massive bargaining chip they could use to extract as much as possible from potential donors.

I still have doubts about the privatization plan’s practicability, but the prospects do seem a bit brighter now that Judge Gerald Rosen has determined that the City of Detroit is eligible to file for bankruptcy. This is because Judge Rosen is one of the leading advocates for a privatization plan. Rumors like this have been simmering in the media for weeks, but according to the Detroit Free Press, now “some of the city’s most powerful leaders are working furiously to fashion a grand bargain in which nonprofit foundations would put up $500 million to spin off the Detroit Institute of Arts from the city, and that money would be used to reduce pension cuts and help rebuild city services.” Apparently Judge Rosen is using his influence to encourage “some of the country’s largest charitable foundations and their smaller local cousins to pony up the money.”
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The educational cronyism of textbook publisher cartels is coming to an end as digital alternatives are on the rise, or so says AEI’s Mark Perry in a recent article. “Hear that hissing sound?” he writes, “It’s the sound of the college textbook bubble starting to deflate. . . . The era of the college textbook cartel and $300 college textbooks is ending.”

I have written on this subject in the past for the PowerBlog (here and here), mentioning Perry’s coverage of the subject at that time, among others.

In particular, I would maintain my position today that if more affordable, quality alternatives exist, educators ought to take the time to research them and find ones that fit their curricula if they can. Students are already overburdened by student loan debt in order to get degrees of decreasing quality and utility. If a professor can do a little to lessen the financial burden of higher education, it is one small victory for the common good. And Christian educators ought to lead the way.

Perry summarizes the problem as follows:

Between January 1998 and September 2013, the CPI for college textbooks has increased by more than 144%, compared to an increase of only 44.4% for the CPI for all items, and an increase of only 0.6% for the CPI for recreational books. In real terms, the cost of college textbooks has increased by more than 69% over the last 15 years, while at the same time the real cost of recreational books has fallen by more than 30%.

The reason that the college textbook bubble is on an unsustainable price trajectory and is already starting to show some initial signs of deflating is because of the increasing amount of competition for the college textbook market.

Read more . . . .