The Good in the Gray

We Continue to Let Them Lye....

Our Leaders are Lying... The sad thing is that our leaders in Washington are not really leading - rather they are lying to us - and amazing that we are letting them get away with it! This week no doubt we will hear that the wealthy need to pay their fair share, the rich oil companies and special interests need to be reined in. Ahem, it is Sen. Chuck Schumer who is protecting the "Carried Interest Tax Benefit" - a 20% rate on earnings rather than the 39.6% that the rest of us pay.... It is diplorable that we as voters let this continue. You know, we are the ones that own the government, not them. You can not tell by the media or the apathy. What we will hear is more partisan talk from Obama in his "State of the Union". When are they going to stop lying to us and start some solutions?

Article from the NYPost on the Doubt of the Benefit....

Doubt of the Benefit - From the NY Post - Affirms my primary points... Why increasing unemployment aid is prolonging the recession By CASEY B. MULLIGAN Last Updated: 2:00 AM, November 25, 2012 Posted: 10:24 PM, November 24, 2012 More families used food stamps this past Thanksgiving than ever in history, while Congress is pushing to extend benefits — again — for the longterm unemployed. But what if such aid isn’t helping us weather the recession, but instead prolonging it? The White House, and other believers in Keynesian policy refer to subsidies to the unemployed, poor and financially distressed as “automatic stabilizers” and insist that subsidies have a large positive effect on national income. Yet when the subsidy spigots were opened wide in 2008 and 2009, labor market activity contracted sharply, and stubbornly refuses to rebound. Getty ImagesIt is time to reconsider the old-school economic idea that paying people to be unemployed reduces employment. The more we pay poor people, the more poor people we will have. The more we help people and institutions in financial distress, the more financial distress there will be. It is easy to look at a particular instance of redistribution — say, unemployment benefits — and conclude that its aggregate effects are minimal, or approximately zero. But policymakers did not expand just one provision of one program. Food-stamp recipients were given a big raise in October 2008, and then another raise six months later. Thanks to the elimination of asset-testing by the majority of states, just about anyone who is the sole earner in their household now find themselves eligible for food stamps during periods of unemployment. The American Recovery and Reinvestment Act, popularly known as the stimulus, gave unemployment insurance recipients a weekly bonus, and offered to pay for the majority of their health insurance expenses. FDIC and Treasury reduced some “unaffordable” mortgage payments, which means that successful people need not apply. The list goes on and on. The essential consequence for all of these is the same: a reduction in the reward to activities and efforts that raise incomes. I’ve studied how redistribution affects the “reward” for working. We start with a monthly index of government benefits. Before the recession began, an unemployed person typically received about $10,000 a year in government benefits. By the end of 2009, program rule changes alone had increased the typical benefit to almost $16,000. Plot that against the hours an average American adult spends away from work in a year (the difference between total hours in a year and hours at work). Largely because of the increase in the number of people without jobs, the average work hours were about 120 fewer at the end of 2009 than they were at the end of 2007 — a 10% decline. But things start to change at the beginning of 2010. Slowly, the number of hours of work by the average American begins to climb. Not coincidentally, the average annual government benefit for the unemployed dropped to $14,000. The increase in benefits provides a disincentive to work. From 2007 until 2009, I found a startling 13% decline in the “reward” for working — that is, how much better the average job would be over collecting benefits. Considering that, why is the labor market still so far from a full recovery? Because government benefits are still far from returning to pre-recession levels. But wait, a Keynesian would say. Unemployment benefits are good for the economy overall, since it is money spent and not saved. It’s true that the poor and unemployed tend to quickly spend what they have on basic needs. Yet Keynesians have gone further to claim that spending patterns of the poor are why redistribution raises total spending and thereby employment. Redistribution changes the composition of spending and employment in the direction of industries like discount groceries and low-cost retail that disproportionately serve poor customers and away from industries like, say, airlines. The stimulating effects of benefit spending for the overall economy is limited. Redistribution is not free. Redistribution depresses employment, aggregate spending and GDP, by implicitly punishing the successful and implicitly rewarding the unsuccessful. We don’t like to see people suffer, and it’s a natural instinct to want to increase redistribution in a time of recession. But the better economic solution reduces the implicit penalties of government aid, and gets more people working, so they don’t need the help. Casey B. Mulligan is a professor of economics at the University of Chicago and author of the new book “The Redistribution Recession” (Oxford University Press); redistributionrecession.com

Insightful Article on Staying Engaged as you Age....

From The Denver Post 11.20.2011

As workforce ages, many employers trying to adapt
Posted: 11/20/2011 01:00:00 AM MST
Updated: 11/20/2011 01:22:29 AM MST By Greg Griffin
The Denver Post

Robert Mager says he intends to keep developing fraud-awareness seminars for AARP as long as he is able. "More and more people are not ready to throw in the towel and sit in a rocking chair." (Andy Cross, The Denver Post )Bob Mager retired two years ago after a four-decade career in the oil industry and then as a business owner.

But that didn't last long. After a few months, he grew restless, and having taken a few hits from the economy, he needed income. So Mager returned to work full time. The 68-year-old hosts fraud-awareness seminars for AARP ElderWatch, where he had been a volunteer.

"I've got no desire to leave at this point. I'll stay as long as they'll have me and I'm capable of doing it," he said. "Sixty-eight to me is not old. Things have changed. More and more people are not ready to throw in the towel and sit in a rocking chair."

Whether because they want to or they have to, more people who have reached traditional retirement age are continuing to work, either part or full time. That, combined with a steadily aging labor force that's ushering millions of baby boomers toward retirement age, is changing the workplace in ways subtle and profound.

Employers face the dual challenge of preparing for mass retirements while accommodating and getting the most productivity from those who keep working. They also have to ensure that younger workers don't feel their career opportunities are being delayed. Older workers also pose challenges for companies, such as how young bosses and older employees should best interact.

In the workplace, a grayer employee base means that some policies on promotions, pay, benefits and wellness may need to be rethought. Programs such as flex time, for workers of all ages but particularly seniors, and phased retirement are on the rise.

"It's not something companies are paying enough attention to. They tend to have a very short-term focus," said Peter Cappelli, director of the Wharton Center for Human Resources at the University of Pennsylvania.

Making proper adjustments

One of the biggest shortcomings in corporations is that younger managers aren't well-trained in managing older employees, he said. A frequent result is that they won't hire an older applicant because they're nervous about managing them, Cappelli said.

Corporate America should look to the military, which has studied the issue and implemented programs to facilitate these boss-report relationships, he said.

Though perceptions are changing, negative stereotypes of older workers persist in the workplace. As a group, they're actually more productive, flexible and skilled, he said.

Nicki Aggers, 61, former manager of compensation consulting for the Mountain States Employers Council in Denver, wanted to retire this year without leaving her employer in the lurch. She stayed on for several months to train her replacement, and then began consulting for the group.

"It keeps my brain active," she said. "My husband retired in January. We wanted more flexibility and to be able to spend more time together. But I didn't want to put them in a bind or leave clients hanging."

The wave of baby boomers reaching retirement age over the next 15 to 18 years has been dubbed the "silver tsunami." The number of workers 65 or older in the U.S. labor force grew 62 percent from 1998 to 2008, according to the Bureau of Labor Statistics. The fastest-growing group was those 75 or older, who nearly doubled their relatively small numbers to just under 1.3 million workers.

Seniors made up about 4 percent of the total workforce in 2008, a number expected to climb to 6.6 percent

(The Denver Post)by 2018. Workers 55 and older, nearly 28 million strong, are expected to climb from less than a fifth of the 2008 workforce to nearly a quarter by 2018.

Concentrations of older workers are higher in some industries. In agriculture, real estate, manufacturing, utilities and public administration, at least 35 percent of workers are over 50, according to a study by the Sloan Center on Aging & Work at Boston College based on 2007 census data. In these industries, brain drain through mass retirements is a concern.

Driving these changes are long- term trends. Life expectancies have stretched such that many people worry they could outlive their retirement savings. Attitudes about retirement also have changed. The economic downturn has kept many people in their 60s from retiring.

Corporate diversity programs traditionally have focused on race, ethnicity and gender, but age is only now coming to employers' attention. The issue isn't just about seniors. Managers today must contend with four generations — "traditionalists" such as Mager who have led the way into 65-plus employment, baby boomers from about 48 to 65, Generation X'ers from roughly 28 to 47, and Millennials, who are relatively new to the workforce.

Bridging the generations

Wells Fargo has launched several initiatives to improve the workplace for multiple generations, including a series of networking and support groups for various age groups.

The program includes seminars on retirement planning, career development and other topics. It was launched for baby boomers but was so popular that younger workers asked for their own groups. The company set those up too, said Philomena Satre, Wells Fargo's vice president of diversity and inclusion for the Mountain/Midwest region. The program started in the Midwest and is slated to expand nationwide.

"The customer base is all generations, and we want to provide each generation with the best service," Satre said. "From the (employee) perspective, we want people to say, 'I want to work at Wells Fargo and have a career here regardless of my age.' . . . People want to feel like they're valued through their whole career."

In 2007, German auto giant BMW, realizing that its employee base would age significantly during the ensuing decade, set up a production line with demographics matching 2017 projections. The company made 70 adjustments — including adding cushioned flooring, rolling stools and magnifying readers — and was able to match the productivity of other, younger lines.

Not everyone is thrilled that colleagues are working into their senior years. The issue frustrates some younger people.

"I try hard to compete for special projects with people who have been sticking around a long time, but they usually have priority for those positions," said Gino Siller, 29, of Longmont, an air traffic controller with the Federal Aviation Administration. "I'm hitting this dead end while the senior people are getting all the good assignments."

For their part, many boomers say competing with younger workers, particularly in the job search, has only gotten more difficult.



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How to Grow Our Economy - Two Tax Change Ideas...

See and pass along: http://www.youtube.com/user/capitalconsultingus

Excellent Interview with David Walker - Comeback Amercica

See: http://www.aspeninstitute.org/video/book-talk-featuring-david-walker

Consider the Math: Social Security + Medicare = Millionaires Next Door Neighbors - WSJ

The Millionaire Retirees Next Door

05.12.2011

Typical retired couples will collect $1 million or more in Social Security and Medicare. This is more than they paid in, and the cost will fall on today's workers..Article Video Comments (667) more in Opinion ».

By JOHN COGAN
Readers may recall the 1950s TV show, "The Millionaire," which portrayed stories of individuals who were given a "no strings attached" gift of money by an anonymous benefactor. Each week in one of the show's opening scenes, a man representing the wealthy benefactor, John Beresford Tipton Jr., knocked on an unsuspecting recipient's door and announced: "My name is Michael Anthony and I have a cashier's check for you for one million dollars."

That TV program is scheduled to return next year as a reality show, and the new recipients will be the typical husband and wife who reach age 66 and qualify for Social Security. Starting next year, this typical couple, receiving the average benefit, will begin collecting a combination of cash and health-care entitlement benefits that will total $1 million over their remaining expected lifetime.

According to my calculations based on government data, such married couples will begin receiving monthly Social Security checks that will, on average, total about $550,000 after inflation. They will receive health-care services paid for by Medicare that, on average, will total another $450,000 after inflation. The benefactors will be a generation of younger workers who are trying to support themselves and their families while paying taxes to finance the rest of government spending.

We cannot even remotely afford to make good on these promised benefits. Although our system of personal liberty, free enterprise and limited government has made us an affluent and upwardly mobile people, we are not yet a nation of John Beresford Tiptons.

The existence of so many million-dollar couples is not the result of elected officials carefully weighing the needs of senior citizens against the financial ability of younger workers to meet these needs. Rather, it is the result of decades of separate legislative actions by both political parties to liberalize retirement and health-care benefits, the sum total of which no one has bothered to calculate.

Social Security and Medicare were the result of natural human impulses to create safety-net programs to prevent poverty in old age and to help needy senior citizens with their medical bills. But the programs are flawed.

In 1978, Congress instituted automatic cost-of-living adjustments for Social Security. That's reasonable. But Social Security's method of automatically increasing benefits to successive cohorts of retirees by more than inflation makes less sense. It means that the average worker who retires this year receives a monthly benefit that is about 23% higher after adjusting for inflation than the monthly benefit received by the average worker who retired 20 years ago. The average worker who retires 10 years from now is, in turn, promised an initial benefit at retirement that is 14% higher after adjusting for inflation than the average worker who retires today.

Under the federal government's fee-for-service Medicare program, every time a senior citizen meets with his physician or health-care provider for a check-up, lab tests or surgery, somebody other than the patient foots most of the bill. That such a program should produce runaway costs is hardly surprising. Over the years, the government has expanded the type of services covered, such as prescription drugs, and it has assumed a greater portion of the program's finances. Medicare premiums paid by senior citizens once covered half of the cost of physician and related services. They now cover one-fourth. Copayments once covered nearly 40% of these services' costs. They now cover only 20%.

To fix Social Security, Congress should start by limiting the increase in benefits of future retirees to the rate of inflation. Congress should then gradually raise Social Security's normal retirement age. Congress should also allow younger workers to invest a portion of their payroll taxes—and create more incentives for them to invest their earnings—in safe, broadly-diversified, stock and bond funds. This would allow younger workers to become millionaires through their own hard work and thrift.

To fix Medicare, we must move away from the current system of fee-for-services and low copayments. First and foremost, copayments should be increased significantly. Medicare recipients need to have more skin in the game if they are to become cost-conscious medical consumers.

The higher copayments can be offset by reducing Medicare premiums and offering more Medicare health plan choices. Rep. Paul Ryan's proposal—to provide fixed annual grants to enable Medicare recipients to buy an affordable private insurance plan—is a fiscally sound way to achieve this outcome. Competition among providers, not government-administered prices and government boards of experts to determine coverage, is the best way to ensure high quality and reasonably priced health care.

Many of the million-dollar couples believe they rightfully deserve the benefits they have been promised. They have, after all, spent all of their working years paying into Social Security and Medicare. And true enough, the typical 66-year old couple and their employers, on their behalf, have contributed nearly $500,000 in payroll taxes (in today's dollars) toward these benefits during their working careers.

But regardless of how much they have contributed, the hard reality is that the federal government has already spent it. No matter how deserving they are, it is younger generations of workers who have to come up with the money.

So today's seniors need to consider how they want the script for "The Millionaire" sequel to be written: There's a knock at the door. We now know that on the other side there's a check for a million dollars. When the door opens, do we really want to see our children, under the commanding gaze of Uncle Sam, presenting us with that check?

Mr. Cogan is a senior fellow at the Hoover Institution and a professor of public policy at Stanford University. He served as deputy director of the Office of Management and Budget during the Reagan administration.