As I write this, it is starting to seem like most of the things that have been making so much of our economy here in the US, especially as it pertains to banking and Wall Street, figured out over in Europe. I will agree it seems like we have been close a couple of times before and there is certainly not an absolute, but we have gotten new technocratic governments in both Italy and Greece the seem largely on board with the changes that need to be made and we have an EU that seems largely on board with the support that it needs to offer to keep anything of a major collapse from occurring anytime in the real near future. With the strong earnings, combined with a very modest growth in the economy and very slight dip in the unemployment rates, some forecasters are starting to shoot for a positive 2011 after all. Not so fast I say…
I have not done one of my short lists of observations in a while and I was thinking about it yesterday – what could I do as a theme for something around the middle of April. And then it occurred to me that it is that most dreaded day of tax deadlines. It is also, close to the day when the typical middle class American stops working for the government for the year and instead starts working for themselves, having usually paid the rough percentage due to the IRS by sometime close to mid to late April as well. Since those things are going are both current happenings, I thought it would be appropriate to express a few scattered thoughts about some things I have observed in that direction of late.
Anyone not heard about what is going on with Egypt right now? A short recap, there are some major protests going on against the current government that is in power there. The person largely in power there at the current time is a fellow by the name of Hosni Mubarak and though there have been some shame elections, he is largely a dictator who has been in charge for about thirty years. The primary aim the loosely organized, largely peaceful protests? The ousting of Mubarak and the corrupt government and policies that are currently holding on to Egypt despite itself. Of course, what does this have to do with the United States and democracy I am sure a few of you are wondering?
First, Mubarak has to a large extent maintained his position through support the of the US government. This support has taken on a couple of forms. That includes arms deals that allow Egypt to be supplied with fairly decent US manufactures arms. It also includes a huge subsidy that has probably been largely responsible for keeping Egypt’s economy moving at several points in the last thirty years. And of course a big hands off policy because of their recognition and peaceful outlook toward Israel.
It should come as little surprise to anyone that I found the 700 billion dollar bail out that was first rejected, and then later, with additions made, passed last week to bail out private entities distasteful to say the least. My personal believe was strongly that they made the poor choices and that they needed to ride them out. Fundamentally we have interfered with capitalism at the fundamental level. The fundamentals say that capitalistic based market economies will correct themselves. It is kind of Darwin for financing when you get down to it, but those that screw up will be eliminated. Basically the strong that make the right choices will survive. And yes, there will be sometimes when things get worse before they get better but that is the chance we take when we live in a market driven economic system. The more the government interjects into this process the more they are going to have to that in the future. Continue reading
Being the fiscal conservative that I am when it comes to government I have to wonder what the heck the powers that be have been thinking on some of their recent choices. There are just to many wrong choices being made, but let me see if I can work trough them.
From my perspective I really can’t see how the government can justify the major bailout that it has recently made available to Fannie Mae and Freddie Mac. Yeah, I get it, at one point they were government programs. However, they had long since moved toward the private sector, having private investors and paying those private investors dividends as well as rewards on the stock market. They assumed private risk in order to potentially (and did for some time) a private reward and the private sector backed them, putting their faith Continue reading
For those that do not know it yet, I work at a newspaper. Actually a group of news papers, located in the Central Kentucky area. No, I am not a reporter or anything so glamorous. I am in the back room working the computer infrastructure that helps both the web and print versions get out there to you all, the public. As one of the perks, I get the current edition of the days local paper laid on my desk shortly after it comes off the presses.
Today, I was very dismayed to see on the front page to different articles with headlines that read “Danville may be forced to repay thousands” & “Danville pays $21,000 in IRS penalties.” Some of you may already have guessed or known, the chief location of where I work is the Advocate Messenger. Why do I care some of you may be wondering, as I live in Wilmore currently and most recently in Burgin, neither of which are in Boyle county, much less the city of Danville.
Simply put I pay taxes to the fine city of Danville. Or rather, the fine city of Danville deducts a payroll tax from my check every pay-day before I ever even see the money myself. Granted, the near $200 at just shy of the mid year point for the yearly to date amount doesn’t seem like that big of a deal. However, the mismanagement of tax payers funds really makes me feel like I am being jerked around.
In the first instance, the city passed an ordinance shortly after the Public Service Commission (PSC – the folks who regulate public services such as water, gas, sewer, electric at the state level) allowed increases on water to end consumers without oversight. The ordinance did just that, building in a cost of living increase automatically. The city took it one step to far though, and passed the additional fees on to other water districts that it serves. Note other water districts are not end consumers, but rather wholesale customers that are also regulated by the PSC. When one of the districts tried for a rate increase the PSC said “No,” siting lack of evidence of a rate increase to them from the Danville City supplier.
The city is now arguing that they don’t feel they are wrong and the over $36,000 that may be refunded to just one of the other companies is not correct based on gray areas in the rules. The city has two other locations the at the PSC added to the complaint (for once being a watchdog for the downstream consumer, even if wholesale) like it should be. Additionally Danville could face fines for the incidents in excess of $20,000. Sorry city of Danville, but the rules are very clear and you can’t pass your own ordinance that flies against state law. Just ask California how that works with drugs and federal laws. The city’s response, “We have to understand what the PSC wants us to do…” Sorry, every judge I have seen clearly states failure to understand the law, of even total ignorance of a law not existing, does not excuse one from being responsible for adhering to said law.
The second instance is in regards to payroll taxes from the City of Danville not being filed correctly/timely with the IRS, again as mandated by law. This has occurred not once, but at least four times, possibly five if I follow the article correctly. The amounts were small and penalties in question according to city officials again so insignificant that no one bothered to include the previous instances in public audit documents. I personally think that if the city feels like a total of $21,000 is so small an amount as to not need to be reported in the audit then they can just give me my even smaller amount of over $400 that they will collect by years end back. That would make a dent in my increases on fuel and food to almost the same effect as the stimulus check I am still waiting. Add to that it goes back to 2005 and I am up by a total of $1200, but still nothing compared to $21,000.
What really irks me about this is that I don’t feel like I have any real recourse against the officials of are railroading over such things and mishandling the funds in such a bad way. While I work in Danville, I live elsewhere, and hence I have not voting right in regards to the folks who are literally throwing this money away. Worse yet, in the first case, they are seemingly going to spend man hours (translate to more tax dollars at work) fighting the case instead of just accepting they are wrong.
With officials like this representing this fair city who needs worse characters that are on the wrong side of the law around?