Commerce Department releases statistics
The Commerce Department released statistics about durable goods orders fell 7.3% in the month of July. (Durable goods are everything from toasters to automobiles, and even defense equipment.) That was the biggest drop in over a year, and was only expected to drop by 4%. Durable goods orders are a leading indicator of manufacturing activity, production, and employment.
The GDP for the second quarter of this year was only 1.7%. We need more like 3% to really start putting people back to work.
During the first half of 2013, about 1 million people were hired. The only problem is that about 75% of those jobs were low paying, and part time jobs. (Recall that Obamacare incents businesses to hire part time instead of full time employees).
People, these are very poor numbers. The solution that I layout in my book is too lengthy to print here, but suffice it to say that our Government could help by:
1. Demonstrating fiscal responsibility by developing a plan to balance the nation’s budget by 2018, thus restoring confidence and faith, and reduce the fear of the unknown (taxes and regulations) to small business owners.
2. Cut Government expenses, cut taxes, and thereby turn Federal Fat into Private Sector muscle. (Currently, U.S. Government spending constitutes 24% of our nation’s GDP. That’s way too much Government)
3. Completely overhaul the tax code and, among other things, incent corporations to bring back to the U.S. over $1.7 trillion residing in foreign banks, so that it can be used for investment in our economy.
4. Get rid of unnecessary laws and restrictions on businesses that don’t make sense and deter investment in employees and plant and equipment.
This is not Rocket Science or Voodoo Economics. It’s just plain common sense and numbers.
Labor Unions say Obamacare will ‘Shatter’ our Health Benefits, Cause ‘Nightmare Scenarios’
Labor unions are among the key institutions responsible for the passage of Obamacare. They spent tons of money electing Democrats to Congress in 2006 and 2008, and fought hard to push the health law through the legislature. But now, unions are waking up to the fact that Obamacare is heavily disruptive to the health benefits of their members.
James Hoffa, General President of the International Brotherhood of Teamsters, and several other labor bosses, wrote a letter to Harry Reid and Nancy Pelosi warning that Obamacare would “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.” The letter goes on to say, “In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks, and raised money to secure this vision. Now this vision has come back to haunt us.”
The labor bosses point out Obamacare’s “perverse incentives are causing nightmare scenarios. First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week.” And, union workers will no longer be eligible for subsidies because workers with employer sponsored coverage do not qualify.
In a final statement, the leaders concluded that, “on behalf of the millions of working men and women we represent and families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and well-being of our members along with millions of other hardworking Americans.”
(source: Forbes, 7/15/2013)
MY TAKE: As we peel back the Obamacare onion, we continue to confirm that this legislation is bad for our country. With all the taxes, the incentives for employers to reduce work week hours, the millions of dollars needed for administration and compliance, and its sheer complexity; this is legislation that needs to be repealed.
Detroit is Broke
Once the fourth largest city in the country, Detroit is now bankrupt. Companies and people have moved out, and there are over 100,000 vacant lots and buildings which have drained revenue from property and income taxes.
The big three auto manufacturers have relocated elsewhere in order to reduce production costs, and today auto manufacturing within the city limits is negligible. As each of the manufacturers pulled more and more facilities out of Detroit, the city had the chance to lower its budget. Detroit had to borrow more and more money to pay its bills, and it now has a crushing $15 billion debt.
Pension obligations are also to blame. Retirees outnumber current employment by more than 2 to 1, and retiree benefits are one of Detroit’s biggest bills. Last year, more than 8,000 former police officers and firefighters collected an average of $30,000 each. Nearly 12,000 retired city workers or their spouses collect about $19,600 each year. Combined, this represents over $470 million a year in pension payments.
MY TAKE: Detroit’s financial problem is an example of how unreasonable demands for employee benefits and entitlements can cause an entire industry to pick up and move to where it is treated best. Contrast Detroit with business friendly cities such as Dallas, Austin, and San Antonio which are ranked high for ease of starting a business, and government support of entrepreneurs. In Silicon Valley, employers and employees work together as partners in company ownership through employee stock option and purchase plans.
“It is astounding what can happen with unleashed capitalism, and frightening how rapidly a society can collapse under the debilitating influence of socialism”…..page xvii, Our Government is Broke.
Image Credit: Rob Jacob/Flickr