Op-Ed by Congressman Ryan (updated)

One thing I noticed as I skimmed Ryan's budget/tax proposal was that it bordered on "hyperlogic," i.e. his suggestions sounded reasonable...but strangely too reasonable to be practical.
A good example of hyperlogic is this: the easiest way to cure AIDS would be to test everyone on earth and round up all the people who test positive and kill them. You'd eliminate the HIV virus from the human population forever. And it'd be cheaper than developing a cure. But it's not practical, nor humane. Nor legal.

Ryan's tax/budget proposal seems to follow the same route. It's incredibly simple, with cute tax brackets and an "opt out" option for people who don't like the standard taxation method. But it's really not practical, or realistic. I don't really think he intends it to be, however.
What he wants is to propose something that people say "yeah, that makes sense" because it does, but they don't analyze it enough to realize the impracticality of expecting decreased revenue to somehow magically increase revenue. Then the Republicans hope people will say "why don't the Democrats do what Ryan proposed? It makes sense..." and they have then undermined the Democrats larger, more realistic budget proposal.

If all goes well, the Republicans hope, in 4 years the economy won't be doing much better, and they can parade around the op-ed piece, saying "le sigh, if only you people had done it our way, things would be so much better..."

See Ezra Klein's comments here, I basically agree.
_

Read More

Oil as an economic thermostat

Okay, this and one more post about politics, then I promise to get back to science and engineering.

Back in October 2008, when the price of oil was falling faster than a bowling ball thrown from an airplane, various oil producing nations barked what their ideal price of a barrel of oil was, i.e. their "sustainable price." Venezuela and Iran led the charge with estimates around $100/barrel. The low-ball number came from Saudi Arabia, whose Oil Minister claimed $45-55/barrel was the lowest profitable number.

Basic economics states that all things being equal, consumers will buy the cheapest available product, and so the guy who is selling cheapest sets the market price for the product. So it makes sense that after the initial mega-dip to ~$30 oil, it has stabilized and now is oscillating between $45 and $55/barrel.

Although the ideal case would be that the U.S. economy would start growing, and grow as fast as possible, if I have learned anything in the last year is that unabated, explosive growth is usually fake, or at least unsustainable. Slow, steady growth, like a Burr oak tree, seems to be the best way to produce the longest, strongest economic growth period possible.

What I am suggesting is that we use the price of oil as a thermostat for U.S. economic growth. If the price of oil escapes two standard deviations above $55, then we need to increase interest rates and take other actions to slow U.S. economic growth. If the price of oil drops two standard deviations below $45, then we need to decrease the nominal interest rate and provide economic incentives to push the economy forward. This price, $55, could gradually increase at the rate of dollar inflation, in order to keep things on track.


_

Read More

Tax Protests, Cont'd (2)

Here, you can find a map of upcoming tax protests around the country. Visit one, they're fun!


_

Read More

Hush, don't tell anyone...

Bailout working; banks are paying back their TARP bailout money, with interest.


_

Read More

The TAE Tax Plan

I heard the Republicans came out with their budget plan, including radical changes to income tax.

The TAE income tax plan:
For the first $100,000 of adjusted gross income, the citizen pays 10% Federal income tax.
For dollars $100,001-350,000, the citizen pays 25% tax.
For dollars $350,000-1 million, the citizen pays 35% tax.
For the dollars $1 million - infinity, the citizen pays 75% Federal income tax.

If you make less than $15,000 a year, you must pay the full 10%, because you drive on highways and visit parks just like the rest of us.

If you make $750,000 and don't like paying 75% tax on $400,000 of it and 25% tax on $250,000 of it, you can deposit as much as you want to reduce your income to your preferred level into 25-year government EE notes, or some similar long-term note, and not claim it as gross income on your 1040. If you want to withdraw that money before the 25 or 30 year note has maturated, then you must claim that money at that time on your 1040 as part of your gross income. If you let the money maturate for the full term of the government note, then you do not have to claim the money in your adjusted gross income.

Under my plan, everyone wins. People are not limited in their income potential by cruel taxation...they just have to responsibly save it or pay the higher tax rate. The rich don't get to complain about free loaders at the bottom of the income pool because they too are obligated to pay taxes...but at a lower rate than the current lowest rate for tax-qualified individuals.
The government wins because it keeps its fiscal strength through strong tax measures...plus gains the bonus of incentivizing investment in government bonds, increasing government's capital and liquidity.

Like all my plans, this one seems pretty fool-proof...


_

Read More

FORESKINS! Am I really posting about this?

TAE has a cute little daughter, so has not come face to face with the decision whether or not to circumcise my child. However, Mrs. TAE and I plan on more kids in the future, so the subject is worth considering. But is it worth posting?

This article summarizes all of my best points, and thereby saves me the trouble. In short, circumcision is like driving...as long as done by someone qualified, then there are nothing but benefits.

Now, I certainly respect the rights of individuals to choose to opt their newborn sons out of any non-compulsory procedure, whether because of their doctor's advice or because of their own feelings. But as I have stated before, I feel those individuals that so choose are being selfish and unethical to increase the population's disease risk because of their own personal feelings (and unsubstantiated claims) about vaccines and their belief that personal risks outweighs the need for the larger community to be protected. The same goes for circumcision. By not circumcising your son, you are protecting him from rare, but possible nerve damage and deformity. Meanwhile, your putting him at much (read: MUCH) greater risk for many diseases. And you also add your son to the chain of "infectables" that act as tentpoles for a disease to travel through a population.


_

Read More

Who will watch the watchmen?

Kathleen Sebelius, replacement for Tom "income tax is for wimps" Daschle, also owed back taxes. The extra taxes were from "unintentional errors" that her accountant found during the vetting process. Of course, her accountant didn't find those errors when her taxes were actually paid and the 1040 was actually submitted...you know, back when she actually owed the U.S. government the money...don't we all wish we could skimp 8 grand in taxes for a few years, and not pay it until the time is convenient (or never pay it at all)? Does anyone really think that these people were all completely unaware of their tax mistakes?

What was it I said the other day?

Is there anyone in the world that isn't a damnable liar?!

Here, you can sign a petition calling for an immediate IRS audit of all 557 Congresspersons, and the President. This will never happen, IMHO, because chances are 80%+ of Congress has errors in their tax returns, just like the rest of us.


_

Read More