Global Economy Bursting?

[Randolph Kinney]

Californians Beware: Massive Federal and State Taxes increases for January 1, 2013

http://capoliticalnews.com/2012/07/...and-state-taxes-increases-for-january-1-2013/

Ready to get a second job?

“Next year, Californians may be in for a taxing time. In 2013, Californians will face two potentially devastating sets of tax increases; the first is an economy-busting $500 billion federal tax increase that will affect every U.S. taxpayer. In addition, Californians may also see a seven-year $47 billion state tax increase.

The threat of higher taxes comes at a time when family income has fallen by 7.7 percent between 2007 and 2010 and median net worth has fallen 38.9% from 2007-2010 – due in large part to the collapse of housing prices.[1] The 2010 median net worth figures were “close to levels not seen since the 1992 survey,” according to the Fed.”

The worse news is if the Munger tax increase goes into affect, instead of the Brown effort, your increase will not be $47 billion in seven years, it will be $120 billion over twelve years. Can you afford it?

By the time the Obama and Brown/Munger tax increases go into affect, along with the $1.76 trillion ObamaCare taxes, the nation will be deep in Recession. Pass the Munger or Brown taxes, add ObamaCare and the $500 billion in new taxes, January 1, 2013 will see us in a Depression, with massive job cuts.

That is the good news.

 

[Couch Potato]

[URL]http://www.foxnews.com/politics/2012/07/06/employers-add-just-80000-jobs-in-june-unemployment-rate-stays-at-82-percent/[/URL]

80 K... most predicted from 100 - 140 8.2% rate holds. 120,000 additional added to work force...mostly between 16 - 18 year olds. Hours worked increased incrementally. Might suggest that no one is going to hire until the fiscal cliff at the end of the year. They'd rather pay overtime to current employees than to add on.

did you know that when you sell your house for a "profit" now you will have to pay medicare on the capital gains??? 3.8%...for a farmer selling a $500,000 inherited farm when he / she turns 65 it means $19,000. And if you owe $250,000 doesn't matter, you pay on the half mil. PLUS if you are subject to inheritance taxes..ie.- you sell the old farm after dad died and he inheritied it.... his estate could end up with zero.

Remember that number, 80K, is plus or minus 90,900 so the actual number was somewhere between a loss of just over 10K and a gain of just over 170K. With a margin of error like that just how is it a big deal to miss the estimates by 20-60K?

 

[Couch Potato]

Disability Ranks Outpace New Jobs In Obama Recovery

http://news.investors.com/article/6...ility-climbs-faster-than-jobs-under-obama.htm

http://www.investors.com/image/Web2cJobs0709-(2).gif.cms

More workers joined the federal government's disability program in June than got new jobs, according to two new government reports, a clear indicator of how bleak the nation's jobs picture is after three full years of economic recovery.

The economy created just 80,000 jobs in June, the Bureau of Labor Statistics reported Friday. But that same month, 85,000 workers left the workforce entirely to enroll in the Social Security Disability Insurance program, according to the Social Security Administration.

The disability ranks have outpaced job growth throughout President Obama's recovery. While the economy has created 2.6 million jobs since June 2009, fully 3.1 million workers signed up for disability benefits.

In other words, the number of new disability enrollees has climbed 19% faster than the number of jobs created during the sluggish recovery. (Even after accounting for people who left the disability program because they died or aged into retirement, disability ranks have climbed more than 1.1 million in the past three years.)

And the disability ranks will continue to swell. In just the last month, almost 275,000 put in applications for disability benefits. Experts say that more people try to get on disability when jobs are scarce, and changes to eligibility rules enacted back in 1984 have made it far easier to qualify.

In addition, while hiring has been very weak during the recovery, the number of people who have dropped out of the labor force entirely has exploded by 7.3 million since June 2009, an IBD analysis of BLS data show. Some aged into retirement, but most either signed up for disability, stayed in school, moved back in with parents, or just quit looking for a job.

Strange how we have a virtual "boom" of people going on disability and leaving the workforce 67 years after the end of WWII. :new_all_coholic:

 

[Restrain]

If a person is over 50, you have two choices if unemployed. Either start a "entrepreneurial" single person business or go on disability (if possible). You are essentially frozen out of the workforce.

 

[Randolph Kinney]

Strange how we have a virtual "boom" of people going on disability and leaving the workforce 67 years after the end of WWII. :new_all_coholic:

You would have never guessed that so many workers under 62 were disabled.

Those over 62 with and with out jobs are signing up for regular Social Security.

In either case, you get to pay for it.

 

[Couch Potato]

The baby boomers are now age 48-66 so a distinct rise in the demands placed on all aspects of our social security system should be no surprise to anyone. Our current economic condition is mostly about demographics and short-sighted government policy. The time for effect government action has passed and now all we can do is try to ride out the storm. It is simply too late to do anything positive. All we can hope for is to avoid some dim wit plunging a knife into the life raft hoping to propel it to land with the escaping air.

 

[Randolph Kinney]

There Will Never Be Enough Jobs In America Again

http://theeconomiccollapseblog.com/archives/there-will-never-be-enough-jobs-in-america-again

Well, the sad truth is that it is very hard to make a profit on an employee in the United States today.

These days a lot of small business owners have decided that it is simply not worth the hassle to hire more employees. If you can't make a profit on them, what is the point?

The United States has been losing millions of jobs to lower wage countries, and the fierce competition for the jobs that remain is driving down wages in this country.

As a result, many of our greatest cities that were once the envy of the entire world have become cesspools of filth, decay and wretchedness.

At the moment, our failing economy is being propped up by unprecedented amounts of debt.

When our debt-fueled false prosperity ends, the true horror of the decay of our economic system will be revealed.

If you think it is hard to find a job now, you just wait. What is coming is going to be a total nightmare.

 

[Couch Potato]

Much like the past when subsistence farming was the norm we are entering a time when people need to create their own job rather than waiting around for someone else to do it for them. It is not a decay of our system, but a transition as the economy matures. Creative, motivated, educated people will thrive, but the rest will struggle to survive (or work for the government.)

 

[Randolph Kinney]

The baby boomers are now age 48-66 so a distinct rise in the demands placed on all aspects of our social security system should be no surprise to anyone. Our current economic condition is mostly about demographics and short-sighted government policy. The time for effect government action has passed and now all we can do is try to ride out the storm. It is simply too late to do anything positive. All we can hope for is to avoid some dim wit plunging a knife into the life raft hoping to propel it to land with the escaping air.

Persons under 5 years, percent, 2011 - 6.5%
Persons under 18 years, percent, 2011 - 23.7%
Persons 65 years and over, percent, 2011 - 13.3%

http://quickfacts.census.gov/qfd/states/00000.html

The worst is yet to come. The problem is, Social Security Disability growth is not being driven by population that is 48-66 of age.

The share of the U.S. population receiving Social Security Disability Insurance (DI) benefits has risen rapidly over the past two decades, from 2.2 percent of adults age 25 to 64 in 1985 to 4.1 percent in 2005.

The question is why have the disability rolls have grown. The most important factor is the liberalization of the DI screening process that occurred due to a 1984 law. This law directed the Social Security Administration to place more weight on applicants' reported pain and discomfort, relax its screening of mental illness, consider applicants with multiple non-severe ailments, and give more credence to medical evidence provided by the applicant's doctor.

A second factor is the rising value of DI benefits relative to potential labor market earnings. As the authors explain, this increase is not due to any legislative intent. Rather, the interaction of increasing income inequality and the DI benefit formula means that low-income workers now have a larger share of their pre-disability income replaced at the 90 percent rate and less at the 32 or 15 percent rate. Similarly, there has been a substantial rise in the real value of Medicare received by DI beneficiaries. The authors estimate that the DI replacement rate (including the value of Medicare) for a low-income older male worker rose from 68 percent in 1984 to 86 per-cent in 2004.

http://www.nber.org/bah/fall06/w12436.html

See table at: http://www.ssa.gov/policy/docs/chartbooks/disability_trends/sect06-text.html#chart63

As more low wage jobs displace higher wage jobs, demand for Social Security Disability will limit the labor pool and participation rate of the working age population.

Why work when you can get free medical and 90% of what your job paid? woohoo

 

[Randolph Kinney]

Much like the past when subsistence farming was the norm we are entering a time when people need to create their own job rather than waiting around for someone else to do it for them. It is not a decay of our system, but a transition as the economy matures. Creative, motivated, educated people will thrive, but the rest will struggle to survive (or work for the government.)

Yes, you are right. People who can make more working for themselves (on the book or off the book) will replace those workers subject to payroll taxes and now the new Obamacare mandates.

My projection is that the underground economy will grow much faster than the visible-taxable economy as more people choose to go underground.

1099 employees will eventually be declared as regular employees.