Thursday, August 4, 2011

Here come More Layoffs

With the new legislation to cut spending rest assured that the government will be laying more people off. Many in the media (NPR) are saying that this most recent bill does not go far enough to pay off debt and reduce the future deficit. In fact, I read on NPR's iPhone app that one of China's major credit rating agency recently down graded the US to A from A+. That sounds good but it is a number of steps down from the AAA rating that all of the US rating agencies are giving the US. What is significant is that China owns something like 1.2 trillion of the US debt, so we might care what their rating agencies think if we care what our rating agencies think. Also, remember that US rating agencies gave subprime CDOs Investment grade ratings (A or higher) even after the bottom fell out. In other words, they screwed up in 2008, they could be doing it again.

Being unemployed was terrible. I felt as though no one would give me a chance. With the government set to cut more spending more people will be out of jobs. This means the government will not collect as much income tax or sales tax because unemployed people do not spend as much money.

It is so sad for me to read about this and listen to it. I don't understand why we cannot raise taxes. It seems to me that with 100 millions workers at an average salary of $50,000 a 1% tax increase across the board could fund 1 million jobs. I will take a 10% tax increase if it means 10 million people will be gainfully employed by the government clearing beetle kill or repairing roads or getting kids involved in positive programs.

I still think we need to cut spending but I don't think congress should be the ones to determine how it gets done. They don't know how any of the money gets spent. Perhaps we should ask the various departments to cut spending by a target amount without layoffs and see what they come up with. It worked in one medium size California city that was featured on NPR.

There are tens of millions of households with larger incomes than me, and I understand they have kids and other expenses I do not have, but they are getting so much money it makes sense to tax them (and me) more. I am in favor of some sort of equality among people because inequality breeds violence, and the thought of that terrifies me. I have been reading about the Rwanda genocide. What makes Rwanda so different than the United States? Sure there was a decades long process that led to those weeks of violence and there is a slew of cultural differences specifically relating to growing up in poverty, but they are humans just like us.

I learned last week that 1 million high school students drop out every year. They will surely be the first to be unemployed. It is all so sad. I am not sure why I read the news or study history. I feel like we (congress included) are just going to make similar mistakes to those made by others in the past and we expect different results. Perhaps there is a dumb.

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