On Wed, 2 Jan 2008 18:34:17 -0800 (PST), Chuck Gould
wrote:

On Jan 2, 8:39?am, John H. wrote:
On Tue, 1 Jan 2008 22:59:52 -0800 (PST), Chuck Gould





wrote:
On Jan 1, 4:31?am, "Eisboch" wrote:
Having a small company that is involved in large, capital equipment type
contracts has certain advantages. ?One of them, that I noticed years ago, is
that the level of new orders almost always reflects an accurate prediction
of which way the general economy was heading, usually about 6 months before
it became a current topic of discussion in the media.

Last year my former company (now my oldest son's) had a tough year with a
major slowdown in new order activity and, in some cases, cancellation or
postponement of planned orders by several customers. ?The situation was not
unique to the company as many others involved in similar, high cost capital
equipment businesses experienced the same slowdown.

This has all changed. ?In the past 30 days the company has received over $6M
in new contracts and the quoting activity for more has picked up
substantially. ?If this continues, and past history says it will, 2008 will
be a very busy year. ?I'll betcha that by May or June all the talk will be
about how robust the US economy is.

Eisboch

Well let's hope so.

Boat sales in the Pacific NW, measured in units, were off 17% 3Q07 vs.
3Q06. The Marine Trade association tired to put a bright spin on the
numbers, noting that the dollar volume of the sales was actually 1%
higher than last year. The dollar volume is less meaningful, as boats
that sell for more money also cost more money, and a 17% dip in volume
is going to wipe out a lot more gross profit than a 1% increase in
total sales dollars will restore.

The higher total dollar volume coupled with the 17% dip in unit sales
reflects the fact that Wally Lunchbucket is a lot more woried about
his job, his budget, the cost of fuel, and so forth than is Daddy
Warbucks.
I sense very little slowdown in the $500k and up market (not that it's
ever a beehive of activity).......but a lot of the small, trailer boat
guys selling new boats for under $100k are singing the blues.

Let's see what happens this spring. The economy is cyclical,
regardless of which political party is in power. Every so often it
slows down, and all the marginal operators who are so inefficient that
they are barely making it when things are booming get weeded out by
reality.
That's probably a good thing in the long run.

I do pity the poor FED. What a quandry. So much of the stuff we buy to
day is imported that low interest rates *really* fuel inflation. Not
only do people borrow for more consumer spending, but the low rates
depress the US dollar on the exchanges and as a result the prices for
almost everything go up. Raise the rates to shore up the dollar, and
while prices will not be driven up as quickly by a weak foreign
exchange our less-than-robust economy can hardly afford a slow down in
consumer spending due to higher monthly payments.

What do you think increasing taxes will do to our 'less than robust'
economy, Chuck?
--

? JohnH

"Opa of 6"- Hide quoted text -

- Show quoted text -

The key isn't necessarily increasing taxes, it's striking a balance
between the government income (taxation) and government spending.

This could be done by decreasing government spending. No tax increase
needed. Unfortunately, however, there is *no* political party willing
to decrease spending. Exhibit A: In all the years since Andrew Jackson
was president (the last time there was no national debt) up through
January of 2001, the US managed to run up a debt of $5.7trillion. For
the first six of the almost seven years elapsed under the current
administration, a single party controlled the white house and the
congress. There was nothing to prevent that party from instituting
some fiscal discipline if it desired. Instead, we watched a debt that
took over 150 years to go from zero to $5.7 trillion escalate to well
over $9 trillion in the last seven years. (and no, it didn't go up $3
trillion when the D's took over in congress)

Making the US a beggar nation on the international street corner,
turning our currency into toilet paper and our IOU's into "junk bonds"
will tube the economy more surely and more permanently than taking
Warren Buffet, Bill Gates, and anybody else who lives almost
exclusively on capital gains and dividends back out of the 15% tax
bracket.

But please understand, I'm *not* strictly in favor of a tax increase.
I'm in favor of fiscal sanity in the federal budget. Cut the level of
Federal expenditures to a point where they are no higher than tax
receipts, (maybe a little lower so we can pay off some of this debt),
and it would look to me like no tax increase needed.

Since the special interest groups will stop funding the current
thieves on both sides of the aisle if $lop stops pouring into the
trough; I'm not optimistic that any spending will be decreased. We
know that the R's didn't, wouldn't, couldn't, do it in the six years
they had a free hand- and I don't expect anything different if the D's
get the WH and hold onto congress next year.

Chuck, to keep a group of people, primarily undereducated, beholding to the
D's will require a *lot* of money for handouts, whatever form they take.

Let's not be coy.


--
Quote of the day: "I did get to use that condom when I was 13, and several more that
summer, thanks to a "fast" 14 year old young lady..." (Harry Krause, bragging again!)

John H

On Jan 3, 5:05�am, John H. wrote:


Chuck, to keep a group of people, primarily undereducated, beholding to the
D's will require a *lot* of money for handouts, whatever form they take.

Let's not be coy.


That's a pretty frightening concept, especially if you are speculating
that
the D's will be handing out more money than the R's recently have
done. Of course it will go to different folks. The D's steal for one
group of special interests and the R's steal for another.....but both
steal as much as they can as fast as they can.

Huge culprit:

Enrollment in federal social programs grew 17% between 2000 and 2005-
the biggest 5-year increase since the days of Lyndon Johnson's Great
Society. I guess it's a good thing the R's were in charge for most of
that time, who knows where we'd be if the D's were at the helm.

Biggest culprits, by the way, are guys like you and in another 9 years
guys like me. We are the largest recipients of federal handouts, and
regardless of which party is in power the wheels are definitely coming
off shortly after 2011, sad to say. Far too many Boomers will be
standing at the pension window, no matter which party prevails in
2008.
Both parties have squandered the SS Trust Fund over the decades, and
*still* we are running these huge deficits and piling on the debt.

Fed Entitlements:

(some of these are worthy programs, IMO)

Medicaid: Handout to 53.4mm people in 2005 cost $198 billion.
Social Security: Handout to 48mm people in 2005 cost $519 billion.
Medica Handout to 42.3mm people in 2005 cost $294 billion.
Child Nutrition: Handout to 32.3mm people in 2005 cost $12 billion
Veterans Benefits: Handout to 3.5mm people in 2005 cost $40 billlion

You also need to add over $50 billion per year to the Medicare number
above to pay for the Prescription Drug program that began in 2006. How
did the R's let the D's slip this one through? A $50-billion transfer
of public funds to prescription drug companies and a condition that
the government is *prohibited* from negotiating for volume pricing?
You gotta watch those devious D's, they can raid the treasury even
when in the minority, can't they?

With the exception of welfare ("temporary assistance for needy
families"), the number of people qualifying for benefits intended for
low income people soared between 2000 and 2005.

The number of people receiving earned income tax credits for
impoverished, low wage workers was 21.2 million, up 13.3% between 2000
and 2005. Cost of the program, $35 billion in direct payouts plus
another $5 billion in effective tax reduction. This huge increase in
the number of people in this category during a time of general
prosperity can be somewhat explained by welfare reform enacted in the
1990s. Enrollment in welfare programs was down to only 5mm people,
down 18.2% between 2000 and 2005. Many of the former welfare
recipients "moved up" to minimum wage service jobs and thereby swelled
the ranks of people qualifying for the earned income tax credit.

Unemployment compensation cost $33 billion in 2005. 8.1mm Americans
received unemployment compensation during that year- a 16.8% increase
from the year 2000. (See the effects of welfare reform, paragraph
above).

Pell grants to low income undergraduate students cost $13 billion in
2005, and 5.1mm Americans benefitted from the program.

********

And that's the problem with trying to balance the budget through
spending decreases. We could have saved $21 bb a year by cutting off
welfare entirely after 2005, but isn't $21 bb just enough to pay for a
few weeks' expenditures in Iraq? Based on the above list, I'm not
convinced that "Democrat handouts to undereducated people" represents
a significant portion of our social expense.

Looks like we need to take away Grannie's arthritis prescription,
slash payments to Social Security retirees, turn our backs on our
veterans,
stop feeding poor kids free lunch at school, kick the poor people out
of college, and allow those who can't afford to pay privately for
medical care or insurance (due either to age or financial
circumstance) to sufffer and die untreated. Seems about the right
approach- that would preserve the very same tax cuts that have allowed
more Americans to step up to the V8 and leather seats instead of the
V6 and cloth upholstery in their new SUV's. Gotta have priorities,
right?

General point: There are some remedies available that would be far
more painful than adjusting income (taxes) to a level sufficient to
cover expenses.

If you know of a way to restore fiscal sanity to the federal budget
without increasing taxes or cutting expenses, (or a combo thereof),
I'm all ears. I try to learn something new every day. :-)


Statistical cite: http://www.usatoday.com/news/washing...itle-chart.htm,
based on reports form the Office of Management and Budget, the
Internal Revenue Service, and Medicare and Social Security annual
reports.