2020 – It’s a New Year – Actually it’s a New Decade

Wow where has the last year gone? Actually where has the last decade gone? Anyone remember Y2K?

One year, 10 years, 20 years….wow did they go as fast for you as they did for me? And how many of us have made a New Year’s Resolution each year to make next year better than the last? Especially when it comes to finances.

According to an article in Forbes Magazine published in January 2019 just one year ago and one year later than the 2018 PEW Research article mentioned below, as well as a 2017 CareerBuilder study found that 78% of U.S. workers are living paycheck to paycheck. See a pattern? Year after year different studies and research find the same results. What do they say the definition of insanity is? Isn’t it; keep doing the same thing and expecting different results.
Who are these people? Are they people living below the poverty level. No, in fact many are earning by many standards a good income. CareerBuilder reported nearly one in 10 workers making $100,000+ live paycheck to paycheck.

Here are some other crazy statistics reported in Forbes;
• Nearly 3 in 4 workers say they are in debt – and more than half think they always will be
• More than half of minimum wage workers say they have to work more than one job to make ends meet
• 28% of workers making $50,000 – $99,999 usually or always live paycheck to paycheck, and 70% are in debt

Clearly the Financial Matrix is alive and well as many people have fallen victim to the fact that Financial Literacy is not being taught in our schools. I believe a certain level of financial literacy should be a requirement to graduate from Middle School and a greater level of literacy at the High School level. You may ask how and why should we expect a certain level of financial literacy even at the Middle School level? I live in Central Pennsylvania where a significant number of my friends come from an Amish and Mennonite background and many of them attend school until the 8th grade (Middle School). For many of these families this age group enters the work force and many even become entrepreneurs, if not immediately soon after. This takes an understanding of handling money, investing in their business, understanding cash flow, operating budgets, and concepts such as credits and debits. You are never too young to learn about money, something that affects our lives forever, even after we die, think inheritance and legacy.

What are some changes we can make right here and right now? Let’s see what the most financially successful investor of our time Warren Buffet says…

In two CNBC make it Articles published; May 10 2018 on Money, and Apr 30 2019 about Power Players, Warren Buffett says avoid debt at all costs. If legendary investor Warren Buffett could give one piece of advice to young people, “it would be just to don’t get in debt,”. He told this to a 14-year-old shareholder at the 2004 Berkshire Hathaway annual meeting.
“It’s very tempting to spend more than you earn, it’s very understandable,” he said. “But it’s not a good idea.” And if you’re deep in the red, it may be a good idea to “never look at a credit card the rest of [your] life,” Buffett added.
Warren Buffett, who is worth nearly $89 billion according to Forbes, is famous for spending only $3 a day on breakfast. Buffett said he uses cash “98% of the time. Buffett’s tendency to use cash puts him in the minority among Americans. Using cash, however, can actually be a good way to save money. And researchers have found that physically handing over money feels painful, making you less likely to do it.
In 2018, only 18% made “all or almost all of their purchases” with cash, according to the PEW Research Center. About half (52%) of Americans made “some” of their purchases with cash and 29% made none of their purchases with cash.

That is over 80% which is very similar to the percentage of people who are 90 days from bankruptcy. In other words if they did not have a check come in for 90 days they would have to start selling items to pay their debt obligations.

So….What changes are you going to make in 2020 that you promised yourself you were going to do in 2019, and maybe also in 2018, 2017, 2016, and 2015?

Now is the time! Let’s make 2020 a New Beginning.

Get Financially Fit.

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Want a Fair Tax System?

Why do Major Corporations and the Super Rich have the ability to pay less taxes?

Because they can!!

The government has become a special interest government and those who have the money to get deals and breaks can do so because they are big enough to afford lobbyists and lawyers who get them favors with politicians.

Why would politicians give favors to big companies?  I’ll let you decide.

For now let’s look at a solution, not only a solution to limit the favoritism but a solution that would make every Americans life easier and more fair.

Watch and comment;

What could be more fair than EVERYONE without exception paying the same percentage?

Do We Need a New Definition of Austerity? Or a New Definition of Leader?

Austerity to Blame? But Where’s the Austerity? an article I first read in Forbes by Paul Roderick Gregory is a fabulous essay written that challenges the concept that governments of this world are really cutting their spending.

In economics, austerity describes policies used by governments to reduce budget deficits during adverse economic conditions according to the definition provided in Wikipedia.

Paul Gregory is a research fellow at the Hoover Institution. He holds an endowed professorship in the Department of Economics at the University of Houston, Texas. Mr. Gregory is a research professor at the German Institute for Economic Research in Berlin, and is chair of the International Advisory Board of the Kiev School of Economics.

Here is Mr Gregory’s article:

Keynesian Economic thinkers complain that the world’s economies are drowning in austerity. They argue we need more government spending and stimulus, not spending cuts. Northern Europe should bail out its less-fortunate neighbors to the South so they can pay their teachers, public employees and continue generous transfers to the poor and unemployed. If not, Europe’s South will remain mired in recession. In America, Keynesians entreat the skinflint Republicans to loosen the purse strings so we can escape sub par growth. They advise Japan to spend itself out of permanent stagnation and welcome recent steps in this direction.

The stimulationists complain that they have been overwhelmed by the defeatist austerity crowd, lead by the un-neighborly Germans and the obstructionist Republicans.  If only Germany would shift its economy into high gear while transferring its tax revenues to ailing Southern Europe, and the rascally Republicans drop the sequester cuts, we would be sailing along to a healthy worldwide recovery. We don’t need spending restraint. Instead, we need stimulus, stimulus, and more stimulus to revive economic growth. We’ll deal with the growing deficits later, the stimulation crowd tells us, but we must first get our economies growing again.

The Keynesian stimulus crowd blames austerity for the world’s economic woes without bothering to examine facts.

Take the PIIGS of Europe (Portugal, Italy, Ireland, Greece and Spain) have supposedly been devastated by cutbacks in public spending.  The official figures show that PIIGS governments embarked on massive spending sprees between 2000 and 2008. During this period, their combined general government expenditures rose from 775 billion Euros to 1.3 trillion – a 75 percent increase. Ireland had the largest percentage increase (130 percent), and Italy the smallest (40 percent). These spending binges gave public sector workers generous salaries and benefits, paid for bridges to nowhere, and financed a gold-plated transfer state. What the state gave has proven hard to take away as the riots in Southern Europe show.

Then in 2008, the financial crisis hit. No one wanted to lend to the insolvent PIIGS, and, according to the Keynesian narrative, the PIIGS were forced into extreme austerity by their miserly neighbors to the north. Instead of the stimulus they desperately needed, the PIIGS economies were wrecked by austerity.

Not so according to the official European statistics. Between the onset of the crisis in 2008 and 2011, PIIGS government spending increased by six percent from an already high plateau.  Eurostat’s projections (which make the unlikely assumption that the PIIGS will honor the fiscal discipline promised their creditors) still show the PIIGS spending more in 2014 than at the end of their spending binge in 2008.

As  Erber wryly notes: “Austerity is everywhere but in the statistics.”

The PIIGS remind me of the patient whose doctor orders him to lose weight by eating less. The patient responds by doubling his calorie intake. He later cuts back by ten percent and wonders why he is not losing weight. The PIIGS went on a spending binge from which they do not want to retreat. They then blame their problems on austerity and the lack of charity of others.

There is another message in these figures: the insolvent PIIGS cannot finance their deficits on their own in credit markets. They can keep on spending only with loans from international organizations and the European Central Bank. That PIIGS have continued to spend unabated means that their “miserly” neighbors have continued to bail them out, largely out of public sight.

So much for the scourge of austerity in Southern Europe. The facts show it simply does not exist.

Which leads us to the austerity that is supposedly underway in the United States (Remember that radical sequester that was supposed to ruin the economy?) Our figures tell exactly the same story as the PIIGS  – a binge of public spending that has not been reversed. Between 2000 and 2008, both federal and state and local spending increased by almost two thirds. Despite budget cliff hangers, sequestration, and Republican intransience (so claim the Democrats), the federal government today is spending 16 percent more than at the peak of its binge spending in 2008.  State and local governments, which cannot borrow as freely as the Feds, are spending a modest 11 percent more.

Instead of “where’s the beef?” we should ask “where’s the austerity?”

Perhaps you can show me in the chart below where the spending has been cut, because I just don’t see it.

If those who control the spending of our tax dollars are going to make an effective change in the long term stability of our nation(s) they are going to need a new definition of austerity. Perhaps WE need a New Definition of Leader, because the current “leaders” of the nations of this world are doing a very poor job of leading, not just here in the United States but around the globe. When we compare ourselves to other nations and say we are doing comparatively well, reminds me of the phrase “pigs don’t know pigs stink” (not to be confused with the PIIGS Mr. Gregory speaks of in his article).

The Power of 7 Billion

In an article posted by LIFE founder Orrin Woodward on the power of Social Capital where he discusses the potential of human interaction and its relative ability to affect change is staggering. Given the fact that the world population is growing and the power of that social capital is multiplying demonstrates that possibilities are endless, IF we come together and utilize that power.

Noted economist Paul Zane Pilzer in his book Unlimited Wealth brings his discussion on the Theory of Economic Alchemy to light. Mr Pilzer has long professed that the ingenuity of the human mind creates a never ending supply of new inventions and innovation of resources that can replace those that either have been depleted due to limited supply or societal demand. This thought process of endless versus limited resources coupled with an ever expanding population gives us more possibilities to solve problems and meet the needs of growth than most can imagine. How do you view our ability to solve the myriad of challenges we face, with optimism and belief, or with doubt and concern? GOD has created us with the unique ability to imagine and then decide. Einstein said “Imagination is more important than knowledge. For knowledge is limited to all we now know and understand while imagination embraces the entire world” If we can embrace the power of Social Capital by expanding our Networks, and Norms and sharing our Values as described by Jon Tyson in Renewing Cities Through Missional Tribes perhaps change is closer than we think.

In our communities there is concern, a concern noted in every country and on every side of the political spectrum of the direction of our world cultures. Europe is financial chaos, the Middle East is in constant armed unrest, and America is facing both financial debt and class division. People destroying the very people and societies they live in and love. There is a cry for truth. We have become a world population of educated children screaming for our rights and for sane direction.

Never before has there been such a need for leadership, and truth in LIFE principles. Can we come together and harness this Social Capital for the good of all mankind? What could happen if we were to embrace the Social Capital of 7 billion people for the good of all mankind sharing truth and principle based leadership? If there was a plan to go to 1 million people in 5 years could we eventually change the world? ………..why not try?