Category / Government

by Hoosier Econ

U.S. Military Veteran Tells of How Bad Communism Is

The other day I was engaged in some conversation with a man about the social affects of what Communism brought to countries. We started discussing the old Soviet Union. In short, Soviet Union historically engaged in disinformation. One example was the government told Russian’s that America would stage “traffic jams” or “large gatherings” if saw the events on tv. He decided to share this story with me of what he experienced in dealing with people from the old Soviet Union. I am paraphrasing the story.

I was stationed in North Carolina in 1975. The U.S. decided to bring over some Russian troops to train with us for a short time. One weekend we had some down time so my Colonel decided we should take the Russian guys out to party. We took them to a dance hall and partied for a little bit. The Russians came up to us and stated we had staged the scene and it was all propaganda. My Colonel took the guys outside to his car, reached into his glove box and slammed a map of North Carolina on his car hood. He demanded that the Russians point to any city on the map and he will take them there and show that many other bars exist with people gathering. The Russians chose a city hundreds of miles away. So we started that way and stopping at several bars along the way. The Russians were completely blown away in what they saw and they also got pretty drunk.

by Hoosier Econ

Graph of the Day: Next Market Crash

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John Maxfield  from theThe Motley Fool penned an article in the USA Today that shows an enticing graph of potentially the next big crash in the markets.

Austrians economic disciples have been screaming the last decade about the Federal Reserve’s printing or now digitizing of money to the banks through borrowing. On top of that, the federal government has needed massive amounts of money to fund welfare/social programs that are by law “mandatory”.

Maxfield and Austrians part ways with his explanation in the article. There really is no more denying inflation is happening. Pricing is exploding across many sectors.

Personally, I have followed the Feds printing and done well. But the money supply is drying up and a downturn is very real down the road

by Hoosier Econ

United States Government YTD Interest on Debt Payments

The U.S Federal Government makes monthly payments on “interest on debt” to its lenders that they borrowed money from. The payments do not include paying down the principle.

For the month of June 2014, $97,565,768,696 was paid out with YTD total now at $354,863,250,628. There are still 3 fiscal months left for 2014 of the U.S. government.

Source – United States Treasury Department

by Hoosier Econ

Indiana’s Neighbor Illinois Needs To Mow Their Lawn

Standard & Poor’s Ratings Services again has threatened the state of Illinois to get their financial mess in order or else it will downgrade their bond ratings. Once you are downgraded, your borrowing rates go up making it more expensive to borrow. That means more of their yearly budget will be diverted to paying off interest and debt.

The credit rating agency affirmed the state’s worst-in-the-nation A- bond rating, but its outlook, which had been raised to “developing” earlier this year after enactment of pension reforms, went back to negative.
That means that the state’s credit rating could be downgraded within the next two years unless its finances improve, S&P said. A lower credit rating translates into higher borrowing costs.

Illinois biggest issue is their health pension system which is not sound financially. The Illinois Supreme Court recently had this to say:

“The Illinois Supreme Court was clear in its opinion that the health insurance subsidies paid by the state for retiree health care are a benefit derived from membership in a state pension plan and therefore subject to the Illinois Constitution,” S&P said.

S&P has stated that if the state comes to together for serious reform, then it would most likely revisit upgrading their status. Illinois has a big backlog of bills that already need paid and their most recent budget enacted will produce more deficits. They have used many gimmicks to reassure vendors/creditors in collecting tax revenue while doing bad borrowing schemes in the form of borrowing against future sales tax revenue.

I do not see Illinois changing its bad habits anytime soon.

by Hoosier Econ

Indiana 2012 IRS Data by Zip Code/County

IRS released data tax filings for 2012 from across the United States and showed the breakdown by both zipcode and county for states. The IRS does produce good data reports throughout the years that shows how people move and in out of income brackets. In reality, this usually debunks a lot of political talking points like “the poor” and “income inequality”. Many data numbers the IRS have garnished from people filing taxes is the movement of incomes and tax brackets that are achieved.

I looked at the tax filings by zip code only so far. Found some interesting stats for the state of Indiana. Here is what I found for the year 2012:

– 2,992,840 returns filed

– The top 3 returns filed by zip code were 1) 46143(Greenwood) 24,340   2) 46227(Marion County/Perry Township) 26,280   3)46307(Crown Point) 30,070

– State wide returns filed by salary:

58k returns were $200k or more

261k returns were $100-$200K

240k returns were $75-$100K

373k returns were $50-$75k

1.59 million returns were $50k or less

– 49,000 farms were filed on tax returns

– Just over 1 Million of the returns showed payments from either Social Security benefits or Annuities/Pensions.

 

Like I said, many more numbers were in the data and the county breakdown I didn’t even research…..yet. But enjoy the digging in.

by Hoosier Econ

State of Indiana Reports Budget Surplus, Reserve Goes Over $2 Billion

Economic news rolled out of Indianapolis today showing the State of Indiana continuing stable policies from years past. Many states have taken to spending quite a bit more in the last decade whether it be good or bad times. Indiana has taken a more valued approach to fiscal spending and cutting. CNHI Statehouse Bureau had more on this:

As of June 30, the state had a $106 million operating surplus and reserves of $2 billion, Auditor Suzanne Crouch reported Monday. Crouch, a Republican and former state lawmaker, praised Pence for Indiana’s strong financial state, saying his wise management decisions kept the state in the black.  The state finished fiscal 2014 with a surplus after agencies cut spending by about $150 million from what the legislature allocated in the biennial budget crafted last year. Pence ordered those cuts last December, when tax collections were less than expected.

Governor Pence has continued on former Governor Daniel’s department cuts. Colleges had $34 Million cut. I really think colleges need drastically cut more as many of them are becoming wastelands of ideology that do not prepare teenagers coming out of highschool. How they are set up are very archaic and inefficient. The state has started pouring money into vocational training which will pay off in the coming decade. Five year trend that has popped up with dwindling tax revenue has been casinos. Ohio opening up casinos has taken a bite out of Indiana’s revenue in that area.

Democrats of course are not happy with the surplus. Here is what Senate Democratic Leader Tim Lanane, D-Anderson, said in a statement:

“Let’s not congratulate ourselves for hoarding tax dollars while so many of those taxpayers continue to struggle.”

 

by Hoosier Econ

U.S. House Votes to Cut IRS Budget

While I personally would like to see Lois Lerner criminally arrested for lying to Congress and pulling her “my e-mails” disappeared, I will take this small victory being reported by the AP:

The GOP-controlled House has voted to slash the budget for the Internal Revenue Service’s tax enforcement division by $1.2 billion, a 25 percent cut that would mean fewer audits of taxpayers and make it more likely that people who cheat on their taxes will get away with it. The House approved the cuts by voice vote after little debate Monday night as it took up a $21 billion spending bill that sets the IRS budget.

The IRS doesn’t need reform, it needs to be gutted. The pipe dreams of little fixes hear and there is over. Replace the IRS with a new tax code like the Fairtax.

Unfortunately the Senate led by Harry Reid will not act on this and just table it. More bad news, in a few years the IRS will be full tilt Obamacare enforcement so I would expect more scandals of bigger proportion then Lois Lerner.

by Hoosier Econ

U.S. “Student-to-Teacher” Ratio in Public Schools

If you ever debate public education with people you will sometimes hear the phrase “student-to-teacher” ratio as a source of need for more funding or for better teaching. JustFactsDaily.com released an e-mail with this question and the result may surprise you.

In 2010, according to the U.S. Department of Education, the average student-to-teacher ratio in public schools during 2010 was 16:1.

The National Center for Education Statistics also has information on student to teacher ratio in education.

During the 1970s and early 1980s, public school enrollment decreased, while the number of teachers generally increased. For public schools, the number of pupils per teacher—that is, the pupil/teacher ratio—declined from 22.3 in 1970 to 17.9 in 1985. After enrollment started increasing in 1985, the public school pupil/teacher ratio continued to decline, reaching 17.2 in 1989. After a period of relative stability during the late 1980s through the mid-1990s, the ratio declined from 17.3 in 1995 to 15.4 in 2009. The public school pupil/teacher ratio increased to 16.0 in 2010. By comparison, the pupil/teacher ratio for private schools was estimated at 12.2 in 2010. The average class size in 2007–08 was 20.0 pupils for public elementary schools and 23.4 pupils for public secondary schools.