Tuesday, September 29, 2009

2016 Olympics in Chicago

Good Luck to the Chicago 2016 Olympic Committee!!!



As a former middle-long distance runner in high school and college I am extremely supportive of Chicago's effort to land the 2016 Olympic Games.



I wish the entire bid team the best success towards landing the Olympic Games in 2016 in Chicago. The entire metropolitan area would greatly benefit by having the Olympics here and the principles of the Olympic movement shared by all those that compete and attend. To those critics who feel the games might be a financial boondoggle, I say bull pockey. Chicagoans know how to turn a buck!! And my feeling is that the 2016 games, if hosted by Chicago, will be one of the most successful ever.



Good luck to President Obama and the lovely First Lady, Michelle Obama, in their presentations. And to Mayor Daley and his presentation team in their tremendous efforts to put Chicago on the international stage in a most positive way.









Monday, September 28, 2009

Social Security: Our Sovereign Wealth Fund

As addressed in an earlier post, I felt that the Social Security is one of the main issues that would need to be given priority by the new administration. Now Social Security is percolating to the top of the issue docket. The recent news by the Associated Press that the system will see a $10 million dollar deficit in 2010 due to a number of older Americans seeking benefits as a result of layoffs and business closures in this troubled economy, will surely bring the issue to a boil. Add to that a recent discussion on MSN--money which stated that seniors will not see a cost of living increase in their monthly checks. Plus the mention of it in Steve Forbes Fact and Comment column in Forbes magazine. Social Security will soon be the lead issue in Americans minds.

Forbes in his excellent column states that things would be different now, had FDR accepted the Clark Amendment to the Social Security legislation enacted in 1935. The amendment would have given Americans a choice between the public option (Social Security) or a private insurance plan.

While Social Security has become the third rail in American politics, it merits robust discussion which will move it toward beneficial reforms. I once thought it should be a voluntary, private system. It seems to me that Social Security should be a requirement as part of our social safety net. With the recent Madoff scandal and greedy Wall Street bankers robbing and pillaging funds and their subsequent theft of taxpayer dollars in the form of bailouts, Americans are a little fearful of where they put their retirement funds. The financial mess we find ourselves in is one giant burr in the American saddle.

Social Security should be reformed and transformed into Our Sovereign Wealth Fund. Yes, it is a supplemental retirement fund. That was the original legislative intent behind it. Further steps need to be taken to strengthen the system.

Social Security is for all American citizens. All should be included without regard to income level. The following reforms should be implemented for a solid Sovereign Wealth Fund to be created benefiting us all:
  1. Lower the payroll taxes to 5% for the employee and the employer. Self-employed Americans should pay no more than 10%.
  2. Limit the payout (remember it is a supplemental retirement fund).
  3. Similar to a 401K program, the system should allow people to select different investment programs to beef up their monies placed into the fund.
  4. The Social Security Administration should not just invest in US Treasuries, but also invest in other debt, equities and real estate to provide growth and income in the fund. Congress should place strict risk restraints on the fund's investment officers.
  5. Move the entire system out of the orbit of the Congressional cookie monsters. Put it in a "lock box" and keep the Potomac Pirates' mitts out of the cookie jar.
  6. Everyone working in America should pay in. American citizens would receive benefits based on the funds they invested into the system. There should be no income level cut-off (currently at $106,000). Call this the Buffet tax, if you get my drift.
  7. The payout from social security to retires should not be subject to federal income taxation. Retirees receiving social security payments should also be allowed to earn as much income outside of Social Security without penalty.

All of these reforms will strengthen Our Sovereign Wealth Fund: Social Security. Feds nailed Bernie Madoff on his Ponzi scheme, it is now our turn to nail the Feds on their Ponzi scheme. Lets takeover Social Security and create Our Sovereign Wealth Fund.

Sunday, September 20, 2009

Obama's False Recovery

Despite the early signs of a mild recovery as in the stock market run up and one good month of rebounding indicators, the economy has a long forward stroll before reaching full recovery. There are too many hurdles in the way. The small signs are creating a false recovery.

First, a SIDEBAR: Contrary to #39 Jimmy "the Cracker" Carter's view, as an American I am free to criticize our President without being viewed as a hater. I happen to like President Obama and when feeling a touch of spirituality, I pray for him and that of his wonderful family's good health and prosperity. I do not like his policies. The problem with old #39 is that he not only has lust in his heart, he suffers from an embarrassing malady known as athlete's tongue.

Now back to #44's false recovery. While the economic prognosticators are singing to the tune of "Happy days are here again", there are a number of things churning underneath the economic surface which tell us that all is not well. Consider the following economic items:
  1. With most banks paying only 1.5% on savings there is a big shortage of income.
  2. From all news accounts the job outlook is still dismal.
  3. While inventories have dwindled down, thereby increasing industrial production, factories are only operating at 60% capacity.
  4. The huge run up in spending by both the borrow and spend Republicans and the tax and spend Obamacrats is unsustainable without an increase of growth and income, including from point one above.
  5. Commercial real estate is a problem with many construction and mortgage loans coming up for re-finance in 2010 and 2011. With vacancies up and very little absorption in the near future, this poses a severe economic problem.
  6. More Bank failures are on the horizon due to non-preforming loans across all asset classes.
  7. Credit markets have not thoroughly thawed.
  8. In a number of states home values are still declining, including Illinois which has seen an 11.8% decline.
  9. There is still a large number of homeowners seeking to downsize and that number will continue to rise as the baby boomers age towards retirement.
  10. The current government stats indicate that the economy grew at a modest 3% last month, but we need more than twice that to pay for all the bailouts, stimuli and earmarks that have been rolled-out over the last nine months.

Without the removal of all of these hurdles, we will have a terrible false recovery. There are a five things that President Obama can do to enable the economy to move towards a full recovery. The first two will have, dare I say it, a stimulative effect.

  1. Make permanent the Bush tax cuts. Take a step further, widen the income level for lower tax bracket and lower the rate of the top bracket to 30%. More funds in Americans pockets will trigger savings and investment as well as consumer spending.
  2. Reduce the capital gains tax to 10%. This will create greater velocity in the investment markets.

The last three items are a little outside the box.

3. Recalibrate our immigration process. Despite what the America haters suggest, people from every corner of the earth still desire to come to the United States. Let them. Especially if they are hard working and seek to assimilate to the richly American way of life.

4. Remember the Reagan policy of constructive engagement? Engage Cuba to move towards democratic capitalism. Soon the Castro brothers will be taking a dirt bath and there will be a leadership vacuum which will create an opportunity for our country to export products to that island nation 90 miles from Miami.

5. Create an Allianza de Progresso with Mexico, Central and South America. Generate strong economic growth in our Western Hemisphere. These countries are our neighbors, we should be doing more unfettered trade with them.

Obama's false recovery could be turned into a robust recovery following the ideas above.

Sunday, September 6, 2009

NO Progressive Income Tax for Illinois

Recently Illinois Comptroller, Dan Hynes, announced his candidacy for Illinois Governor. As part of his announcement he released a twenty page document entitled Leading Illinois Forward: The Hynes Plan for Tax Fairness & Fiscal Prosperity. This is an excellent read for policy wonks. It contains a number of great ideas to bring Illinois back to fiscal sanity. One idea that is NOT good, is his proposed progressive income tax for Illinois Taxpayers.

Currently, Illinoisans pay a flat 3.5% on their income. I believe this is too much. It should be lowered back down to 2% as it was before the Edgar administration raised it to its current level. Under Hynes' plan there would be a top rate of 7.5%. Luckily, the voters in Illinois would have to approve an amendment to put a progressive state income tax system in place. A progressive tax system would be another spike in Illinois already troublesome business and employment environment.

According to a CNBC report, Illinois ranked 25 out of 50 states in "America's Top States for Business 2009". In a state with Illinois' population, resources, talent, and amenities, that is shameful. Adding insult to injury Illinois ranks 43rd in Business friendliness and 38th in Cost of Business. Illinois does not need to continue its business and manufacturing decline by instituting a progressive income tax system. One does not need to be an Nobel Laureate in Economics to understand that capital (derived by income) is key to business development and growth.

To Hynes' credit, in his budget blueprint he offers a number of cuts that make incredible sense. How often do we here politicians bellow about cutting government spending, but do not hear a peep about what cuts they would make. Hynes' puts his ideas to paper. In addition he proposes a number of revenue enhancing ideas that are intriguing. Now, I like Dan Hynes. And in the interest of full disclosure, I did vote for him for Illinois Comptroller in 2006, wandering off the (R) reservation. It was a political chit I felt I owed to his family for their help in my Eagle Scout service project (a voter registration drive) three decades ago.

Dan Hynes is dreadfully wrong in his desire to bring Illinois a progressive Income Tax system. Such a system would only hurt Illinois's already feeble business and employment outlook. What is needed, is lower taxes on businesses and individuals. This would create a stronger environment for business retention as well as business creation and growth. Consequently, employment growth would follow beating down Illinois' already high 11% unemployment rate.

Please. NO Progressive Income Tax system for Illinois!!!!

Tuesday, September 1, 2009

Illinois Gaming Law needs a Re-set

Recently, the DuPage County Board acted judiciously and correctly in outlawing (forbidding) video poker terminals within the unincorporated areas in DuPage county.

Under the new "Capital Bill" signed by Governor Quinn, the new Video Gaming Act allows for 5 video poker machines per liquor establishment, truck stop, and Veterans / Fraternal club. The Illinois Gaming Board (IBG) has yet to promulgate rules and regulations for this new gaming activity. The Governor was foolish for accepting this amendment to the Capital bill.

The door has just been opened for organized crime to strengthen its position in Illinois. It remains to be seen whether we will be seeing dead bodies in car trunks out at O'Hare as turf wars develop as a result of this new gambling. Oh, I'm sure the IBG will put together strict rules about who can be involved in the poker terminals, but lets face it unless their enforcement offices are funded properly, it won't be little mice jumping through the loopholes, it will be Illinois bison lumbering through any loopholes. The Illinois legislature should have the stones to dump this insidious legislation. Granted, any municipality or county can opt out of the law,but too many will be salivating over the projected revenues that video poker supposedly will bring in.

There is only so many gambling dollars available for people to spend on this entertainment. The legislature would be wise to strengthen its current gaming venues instead of creating additional ones to take dollars away from these. Currently Illinois has nine Riverboats with a tenth one to birth in the Des Plaines river in Des Plaines. Why not enhance the current law and regulations to allow them to expand a little. Increase the number of table games allowed, including the phenomenally popular Texas Hold 'Em. Additionally, allow the casinos to put in more slots. The casinos should also be allowed to put in separate (in every way, ventilation, etc.) smoking facilities. Such small improvements may very well enhance the states take of gambling revenues without resorting to video poker which will increase the cost of the IBG's enforcement budget.

Another area that current gaming law needs to be re-set is allowing some of the race tracks to have slots. In other states they are called racinos. Now that the tenth casino license has been granted, Illinois should amend the law to allow thirteen casinos, three additional ones should be granted to Arlington Park, Hawthorne and Fairmount Park race tracks. Though, they should be smaller in size than the riverboats it would help enormously in making Illinois a great thoroughbred racing state rivaling neighboring Kentucky. Such a law change would also render the ridiculous "Impact Fee" legislation currently tied up in the courts as moot.

There should be strong competition for the public gaming entertainment dollars among the current gaming venues. It is apparent that any increase in gaming will hurt current operations. It is imperative to build upon what Illinois has, not create more problems across a multitude of venues. The Illinois legislature needs to re-set the Illinois Gaming Law in its next legislative session.