Steve Forbes joins Dennis McCuistion to discuss his support of the flat tax, issues surrounding the global economy, his views on Washington policy and his perspective on where the government should be focusing. Steve Forbes is the Editor-in-Chief for Forbes Magazine and the author of Flat Tax Revolution.
As a forerunner in the proposal of the flat tax, Forbes is adamant that the flat tax issue should be on the forefront of the Presidential agenda. He states that it not only needs reformed, but health care and social security for young Americans must also be addressed. He goes on to discuss public opinion and his belief that although the flat tax will make the most sense long term, public opinion will be something that will need to be monitored and addressed as well and his suggestions on how to do that.
It’s the complexity of the current code that creates the problem. He sited a study where one average family’s tax information was given to 45 of the best preparers in the country and they came out with 45 different results on the amount of money the family owed.
Forbes continues the discussion by candidly addressing what he would have done differently if had been elected and the different place that would have put the country. He offered suggestions and support of off-shore drilling and nuclear power plants, saying it would offer 1 million new jobs, manufacturing and construction jobs, highly skilled and highly paid jobs, thus increasing jobs, energy and national security.
He finishes off the discussion by referencing some fundamental moral problems that have left America in the spot it is in today, demographics, social security, medicare and medicaid and his suggestions as how to fix the issues.
09.21.08 – 1718
The numbers on the growing homeless issue are staggering. Today’s recession may force over 1.5 million into homelessness over the next year, according to estimates by The National Alliance to End Homelessness. Although homelessness is a difficult number to measure definitively, it appears that more people – especially families – are sleeping in shelters, living in their cars, and taking up residence in tent communities.
Many cities around the country have taken major strides in working with the homeless in new ways with great success. New Ways of Transitioning the Homeless focuses not so much on the root causes of homelessness such as mental health and addictions, but instead ways to successfully transition them into permanent housing in the community.
Joining the discussion are panelists:
- Mike Rawlings - Appointed by the Mayor of Dallas as Dallas’ Homeless Czar
- Mike Faenza – President and CEO of the Metro Dallas Homeless Alliance
- Bill Thompson - Executive Director of the Union Gospel Mission
- Lynne Sipiora – Executive Director of the Samaritan Inn in Collin County, TX
Thank you for joining us as we talk about things that matter… with people who care.
All McCuistion TV episodes can be found in the program directory, where you can both watch the videos and interact with the McCuistion team and other viewers. You can also follow McCuistion TV on Twitter.
U.S. stocks rose on speculation takeovers will continue to accelerate and after two straight weekly losses left the Standard & Poor’s 500 Index trading at its cheapest compared with earnings prospects in six weeks.
Crude oil for October delivery added 15 cents, or 0.2%, to $73.97 a barrel on the New York Mercantile Exchange.
A losing dollar was also doing its part to support oil prices, which have closed lower for eight of the past nine sessions. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 82.97, -0.09, -0.11%) , which compares the U.S. unit to a basket of six currencies, traded 0.1% lower at 82.99.
Copper fluctuated in New York and London as the dollar swung between gains and losses and investors looked ahead to figures due this week that may signal a weakening U.S. economic rebound.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, erased a drop of as much as 0.3 percent before slipping again. Reports this week may show that sales dropped for existing homes in the U.S. and were unchanged for new dwellings. The country is the world’s second-largest consumer of copper after China.
China surpassed Japan as the world’s second-largest economy last quarter, capping the nation’s three- decade rise from Communist isolation to emerging superpower.
Japan’s nominal gross domestic product for the second quarter totaled $1.288 trillion, less than China’s $1.337 trillion, the Japanese Cabinet Office said today. Japan remained bigger in the first half of 2010, the government agency said. Japan’s annual GDP is $5.07 trillion, while China’s is more than $4.9 trillion.
The provision, which is an interim rule that would take effect on Jan. 30, 2011, seeks to make sure borrowers are alerted to the risks of payment increases before they take out mortgage loans with variable rates or payments, such as adjustable rate mortgages.
Defense Secretary Robert Gates announced Monday he will retire by the end of 2011, Fox News confirmed.
Gates, the only Bush holdover in President Obama’s Cabinet, made the announcement in an interview conducted at the Pentagon with Foreign Policy magazine on July 12 that was published Monday.
Gates has been expected to leave the administration before the 2012 election.
The nation’s unemployment rate fell in June, though hiring by the private sector remained soft, according to a government report Friday. The figures suggest the economic recovery is moving forward this summer, but with weak momentum in the job market.
The jobless rate was 9.5 percent last month, down from 9.7 percent in May, a surprising decrease that came as hundreds of thousands of workers dropped out of the labor force. Private employers added 83,000 jobs in June, more than double the rate in May but still below the six-figure job creation numbers that would suggest a strong recovery in employment.
One number in the health-care overhaul law could dramatically alter the health-insurance landscape.
How federal regulators interpret a metric known as a medical-loss ratio could affect players from industry giant UnitedHealth Group Inc. down to specialized companies such as American National Insurance Co. Plans could be forced to pay out millions in rebates, while others may be driven out of the market.
The medical-loss ratio measures how much of premiums insurers pay out for medical care versus administrative costs. The new law requires that insurers use at least 80% of the premiums from individuals and small businesses to pay for medical care and profit-taking, and 85% of premiums from larger employers.
July 1, 2010 — Foods and beverages with high amounts of fructose from added sugar may increase your risk of developing high blood pressure, according to a new study in the Journal of the American Society of Nephrology. High blood pressure is a major risk factor for heart attack and stroke.
A type of sugar, fructose is a key ingredient in table sugar and high-fructose corn syrup. Added sugars are found in processed foods such as candy, cookies, and cakes, as well as soda.
For the study, data on 4,528 U.S. adults were collected from the National Health and Nutrition Examination Survey in 2003-2006. Fructose intake was calculated based on self-reported diet information. Those participants who reported eating or drinking 74 grams of fructose or more per day (which the study equates to 2.5 sugary soft drinks per day) had a higher risk of high blood pressure than their counterparts who got less fructose. The findings took into account factors such as age, smoking history, physical activity level, and salt and alcohol intake.
Regarding the current fiscal crisis, economists on the left and right are expressing concern — in some cases alarm — over the fiscal health of the U.S. government. Currently, we are running a deficit equal to about 10% of GDP; but the government is still able to borrow at 3%. No other country in the world could do that. And we may not be able to do it much longer. We may be living in the calm before the storm. As in the case of Greece — and possibly all of southern Europe — international investors may decide that we have neither the will nor the ability to pay back our debtors. In that case, the government’s borrowing costs will soar.
How bad are things? How much of the problem is health care? Can we tax our way out of this fiscal crisis?
Another day older
And deeper in debt
My own view is that the fiscal crisis is going to begin at the bottom and rise to the top. Already we have seen some local governments declare bankruptcy. Expect more of that. In the next several years, I believe some very large cities are going to announce that they cannot pay their bills. State governments will be next. Whereas local governments can declare bankruptcy, state governments can only default. A default by the state of California seems almost inevitable.
But is it conceivable that the U.S. government could default? Actually, yes. Every projection shows the gap between spending and tax revenues rising through time. And the problem at the federal level is basically the same as it is at the state and local levels: We made promises, mainly promises of benefits for retirees, that we were unwilling to fund.
Two years ago the first of the baby boomers started claiming early retirement under Social Security. Next year, they will start signing up for Medicare. Before they are through, 78 million people will quit working, quit paying taxes, quit contributing to our retirement system and start drawing benefits instead. And we are not ready for them. Not in Social Security. Or Medicare. Or Medicaid. By not ready, I mean we have put no money aside to pay for the benefits the baby boomers think they have been promised.
In terms of short-term cash flow, the Obama administration is forecasting that federal spending will be at 25% of GDP by 2020, while revenues will be less than 20%. To keep the deficit at no more than 3% of GDP (not zero, but 3%), an Urban Institute/Brookings tax analysis suggests that tax rates must rise by 40% beginning in 2015. That means the bottom 10% rate would have to climb to 14% and the top 35% rate would go from 35% to 48%.
The fiscal crisis problem is not just a federal problem. State and local governments have unfunded retiree obligations of $2 trillion or more. Private companies have made (defined benefit) promises that are underfunded. And one-third of the baby boomers have an employer promise of post-retirement health care — almost none of which has been funded!
What I am describing is a huge gap between what the baby boomers think they have been promised and the resources available to meet those promises. What I am describing is oncoming generational warfare.
So let’s think about solutions to the fiscal crisis. As described previously at this blog, President Obama has appointed a commission on the federal debt, the National Commission on Fiscal Responsibility and Reform. Although nothing is for certain, many believe a value-added tax (VAT) will figure prominently in the proposed solutions.
But is a VAT tax, or any other tax, really an answer to our problems? Professor Laurence Kotlikoff and his colleagues have modeled the U.S. economy in the middle of a world economy to project the consequences of various policy proposals. For example, suppose we continue on the current path and fund the growth of entitlement spending with a VAT tax or a payroll tax or a consumption tax. What will the future look like for the United States as well as Europe?
Tax rates of this magnitude would be enormously harmful to the economy and are probably uncollectable. (Note that these are average tax rates; marginal tax rates would be much higher.)
Is there a better solution? Yes. We must move immediately from a pay-as-you-go (unfunded) entitlement system to one which is funded and in which each generation pays its own way. For Social Security and Medicare we have described how to do that elsewhere.
This article can also be found on John Goodman‘s personal blog.
In today’s news update we cover retail sales and overall effects on the US dollar.
In a setback for the U.S. economic recovery, retail sales unexpectedly fell hard in May as consumers pulled back their spending on things from cars to clothing.
Retail sales tumbled 1.2%, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires were expecting a 0.2% increase. The decline was the biggest — and the first — since September 2009, when sales fell 2.2%.
NEW YORK — The dollar resumed its rise Friday against the euo and other major currecnies after weak U.S. retail sales data sent investors in search of safety.
The euro dropped to $1.2084 from $1.2095 late Thursday. Before the government released the retail report, it rose as high as $1.2152, its highest level in a week.
The British pound fell to $1.4569 from $1.4702, while the dollar rose to 91.45 Japanese yen from 91.20 yen.
The dollar is the most actively traded currency in the world. It is easy for anxious investors to buy and sell the currency when they worry about volatile financial markets and risks to the recovery from the recession. Perceived as a safe bet, it has rallied this year because of worries about Europe’s economic problems and a possible slowdown in China.
June 11 (Bloomberg) — Sales at U.S. retailers unexpectedly dropped in May, signaling consumers boosted savings as employment slowed and stocks fell.
Purchases decreased 1.2 percent, the biggest drop since September 2009, following a 0.6 percent April gain that was larger than previously estimated, Commerce Department figures showed today in Washington. Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain.
June 11 (Bloomberg) — The dollar rose against the euro for the first time in four days after an unexpected drop in U.S. retail sales raised concern the global economic recovery may be slowing, spurring demand for the currency as a haven.
The Australian dollar fell against the greenback after data today showed China’s inflation quickened to the fastest pace in 19 months, fanning concern the nation may take steps to cool its economy. The dollar rose against most of its major counterparts as stocks and oil fell, reducing demand for growth-linked currencies.
Today’s news update covers the economy, world events and childhood obesity.
WASHINGTON (MarketWatch) — U.S. retail sales rose a seasonally adjusted 0.4% to $366.4 billion in April, the seventh straight increase and the 12th gain in the past 13 months, led by strong sales at hardware stores and garden centers, the Commerce Department estimated Friday.
Excluding a 0.5% increase in auto sales, sales rose 0.4% to $303.5 billion.
April’s figures came in stronger than expected, as economists surveyed by MarketWatch had been looking for a 0.2% decline in overall sales and a 0.2% gain excluding autos. See our complete economic calendar and consensus forecast.
BUFFALO — President Obama delivered an upbeat economic forecast and a defense of his economic policies on Thursday, telling a crowd at a manufacturing plant here that job growth would continue and that “next year is going to be better than this year.”
BANGKOK — Thai troops fired bullets at anti-government protesters and explosions thundered in the heart of Bangkok on Friday as an army push to clear the streets and end a two-month political standoff sparked clashes that have killed two and wounded 45.
As night fell, booming explosions and the sound of gunfire rattled around major intersection in the central business district. Local TV reported that several grenades hit a nearby shopping center and elevated-rail station. Plumes of black smoke hung over the neighborhood as tires burned in eerily empty streets while onlookers ducked for cover.
WASHINGTON (AP) — Women could help reduce childhood obesity by maintaining a healthy weight when they become pregnant and by breast-feeding their babies, a U.S. government panel has found.
The suggestions were among 70 recommendations in the panel’s report. First Lady Michelle Obama released the findings Tuesday as part of her campaign against childhood obesity.
One in 3 American children is overweight or obese, putting them at higher risk of diabetes, high blood pressure, high cholesterol and other illnesses. Obesity is even more prevalent among black and Hispanic children. Some public health experts say today’s children are on track to live shorter lives than their parents.
In today’s news updates we provide links on China’s economic clout, Senate deal on Swaps and South Africa’s massive HIV Prevention and Treatment Campaign.
Johannesburg — President Zuma today launched an ambitious campaign that could alter the face of the AIDS epidemic, in South Africa and globally. The campaign aims to test 15 million people for HIV by the year 2011, up from 2.5 million in 2009 – a six-fold increase in just two years. Through the campaign, 1.5 million people will receive antiretroviral treatment by June 2011, up from about 1 million in 2009.
Beijing – China has earned a new degree of recognition for its growing influence on the global economy, after members of the World Bank decided Sunday to increase Beijing’s voting power behind only the United States and Japan in the international lending body.
NEW YORK (Dow Jones)–Financial shares were showing little reaction in premarket trading Monday to news that key Senate Democrats have reached a tentative deal on sweeping new rules for the derivatives market that is expected to force major Wall Street banks to spin off their swaps desks.
Under the deal, between Senate Banking Chairman Christopher Dodd, (D., Conn.) and Agriculture Chairwoman Blanche Lincoln (D., Ark.), the derivatives portion of the bill will include a controversial provision that would force banks to spin off their swaps desks to be eligible for federal financial assistance from the Federal Reserve and Federal Deposit Insurance Corp.
In today’s News Update, we have links referencing the American economy, nuclear security and another health care update.
The American economy appears to be in a cyclical recovery that is gaining strength. Firms have begun to hire and consumer spending seems to be accelerating.
That is what usually happens after particularly sharp recessions, so it is surprising that many commentators, whether economists or politicians, seem to doubt that such a thing could possibly be happening.
After months of frosty dealings between the U.S. and Chinese governments, the two countries’ presidents plan to meet in Washington, D.C., on the sidelines of a nuclear security summit. There are signs that both sides may make concessions on the Iranian nuclear issue and trade and currency policies.
China’s explanation for the chill in recent relations is that by meeting with Tibetan religious leader the Dalai Lama and selling arms to Taiwan, President Obama and his administration have trampled on China’s core national interests, a term Chinese officials have been using a lot these days to denote issues they see as nonnegotiable.
The May issue of Health Care News leads with President Barack Obama’s signing of the federal health care overhaul legislation … and a report on Virginia’s passage of a “health freedom law” that aims to protect the state’s citizens from government-imposed individual mandates.
Also in this issue:
* The treasurer of Massachusetts warns the national equivalent of Commonwealth Care could bankrupt the country.
* Business, unions, and pharmaceutical interests pour cash into advertising.
* Reform in the name of more-efficient data collection could force patients to disclose more than they wish.
* The rationale may be public health, but data indicate it’s just a new revenue stream.
* Language in the federal health care overhaul keeps committee and leadership staff who drafted the bill from being forced to purchase insurance in new exchanges.
* The future of health care reform could be altered dramatically by lawsuits over whether the individual mandate is constitutional.