Candy maker, Kirk Vashaw, of Spangler Candy Company, the maker of Dum Dums lollipops states that he could pay no taxes (zero tax rate!) and have no regulations and would still not be able to compete with foreign producers of candy because of the Farm Bill’s price supports for sugar. This price support costs the company $15,000 per day. Hear Zoe Chace’s report for Planet Money. Read the Farm Bill.
Category: Economics
Wal-Mart Pushes to Open Smaller Stores
If Wal-Mart includes fresh produce and deli/food to go sections like Tesco in the UK, they will have a winning model. The area around the University of Texas could use a shop like this. The only grocery store available by foot in the area is a small, expensive shop opened by The Co-op. Even Wheatsville is too far to go if you live in the apartments west of Guadalupe. HEB is at Hancock Center, a couple of miles away.
Walgreens should convert their stores into Wal-Greens, add fresh fruit and vegetables and healthy take out options. That company already has great real estate in many neighborhoods. Here’s an article about the food oasis stores that Walgreens has opened.
The Accountant Who Changed The World
We’ve been using T-accounts for a long time!
Should you care about the European debt crisis?
Continental Breakup | This American Life.
This American Life presents a great in depth report about Greece and the Euro crisis.
And, yes, you should.
Super committee: Let Bush tax cuts expire and your work will be done – CSMonitor.com
Super committee: Let Bush tax cuts expire and your work will be done – CSMonitor.com.
President Obama extended the Bush tax cuts through December 2012. These tax cuts are costing the Treasury $11.6 million dollars PER HOUR. The alternative view is that tax dollars are taxpayer dollars, not government dollars, and we need to cut spending.
However:
A record number of Americans — 49.1 million — are poor, based on a new census measure that for the first time takes into account rising medical costs and other expenses.
The numbers released Monday are part of a first-ever supplemental poverty measure aimed at providing a fuller picture of poverty. Although considered experimental, they promise to stir fresh debate over Social Security, Medicare and programs to help the poor as a congressional supercommittee nears a Nov. 23 deadline to make more than $1 trillion in cuts to the federal budget. (Washington Post)
Bombs, Bridges and Jobs – NYTimes.com
Bombs, Bridges and Jobs – NYTimes.com.- Paul Krugman
First things first: Military spending does create jobs when the economy is depressed. Indeed, much of the evidence that Keynesian economics works comes from tracking the effects of past military buildups. Some liberals dislike this conclusion, but economics isn’t a morality play: spending on things you don’t like is still spending, and more spending would create more jobs.
But why would anyone prefer spending on destruction to spending on construction, prefer building weapons to building bridges?
John Maynard Keynes himself offered a partial answer 75 years ago, when he noted a curious “preference for wholly ‘wasteful’ forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles.” Indeed. Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, “Solyndra! Waste!” Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition.
To deal with this preference, Keynes whimsically suggested burying bottles full of cash in disused mines and letting the private sector dig them back up. In the same vein, I recently suggested that a fake threat of alien invasion, requiring vast anti-alien spending, might be just the thing to get the economy moving again.
Budget Hero
On my way home from Houston, I heard about an online game on KUHF, Houston Public Radio. On my first try, I failed miserably at improving our budget deficit. The badges that I chose were Safety Net, Efficient Government, and Competitive Advantage. See what you can do!
States’ Busted Budgets Not Caused by Union Pay
This is what David Lenohardt wrote in the NYT on March 1. His major points:
Government workers receive compensation that is similar–with somewhat lower salaries and somewhat better benefits on average–to that of private sector workers with similar qualifications.
Government pay is skewed too heavily toward pensions and health insurance.
Health plans for union workers and retirees are much more likely to require little or no co-payment, which leads to lots of medical treatments that don’t make people any healthier, and to huge costs.
Many government workers receive pensions that start at age 55 and still let retirees draw a full salary elsewhere.
Only recently have teachers’ unions started to cooperate with serious efforts at teacher evaluation, and they are still not giving their full cooperation.
The cause of our looming federal and state deficits . . .is Americans’ collective desire for low taxes and generous government benefits. . . Eventually we will have to pay for the government we want.
I have a friend that retired from the state, receives his pension, and was rehired as a contract employee by the same agency: working full time and receiving his pension from the same agency. Texas has a defined benefit retirement plan so that retired employees receive a guaranteed benefit rather than a value based account as in a typical 401K account. Steven Greenhouse discusses the differences between retirement plans.
In Texas, the Margin Tax and a cigarette tax were supposed to make up income deficits created from reducing the property tax , and to date, the Margin Tax has increased revenues modestly but not at the levels expected at enactment. (David Gilliland, Texas Margin Tax).
One result for Austin has been the expected layoff of 1000 teachers and the expected closure of exemplary inner city, low income schools. ( AISD News Release)
Social Enterprise
NPR’s Karen Grigsby Bates interviewed Blake Mycoskie of the shoe company, Tom’s. As Tony Sheldon of the Program on Social Enterprise at Yale School of Management says, Mycoskie’s vision is a harbinger of the way many future entrepreneurs want to structure their own businesses.
Their careers can’t be only about financial returns, that the social return and the social impact is also integrated into that and they don’t want to just make a lot of money and then give a lot to charity, they want what they do with their lives to be in service of a broader vision.
Here’s the radio spot Soul Mates: Shoe Entrepreneur and here’s the article: Soul Mates.
My opinion is that social enterprises such as Tom’s will eventually out number non profit organizations. And, fyi, there is no Tom. It’s short for tomorrow’s shoes.
Paying for Health Care
On December 31, 2010, many of the products currently eligible for reimbursement through Flexible Spending Accounts will no longer be covered unless your physician provides you with a prescription. That’s important to note since you can get your physician to write a prescription for the expensive OTC drugs that you use, and you will be eligible for reimbursement. You will need to send in your prescription with your receipts for reimbursement, and you will not be able to use an FSA debit card. That may be a good thing since many of the those debit cards are a nightmare to use.
Here’s a handy list of qualified and nonqualified expenditures post 12/31
The Joint Committee on Taxation estimates that this will generate revenue in excess of $5 billion in the first ten years.
Here’s a website that you can use to calculate your share of the $5 billion: Save Flexible Spending Plans.