Goofy News Review

What's Up With The Whig -- Part Ummm...?

I don't blame people for misinformed views. There are precious few sources of honest information out there these days. So, what can one expect from the average working stiff?

Today's Herald-Whig has a letter-to-the-editor that suggests Republicans should give in to Democrats regarding the Debt Ceiling debate so as to tie the 'higher taxes' label around President Obama's neck. Interesting and a bit different from the usual Rightist militancy. Let's examine the writer's points:

1. the rich, whose taxes Obama and the Democrats wish to raise, are the job creators.

Except that these 'job creators' were paying the rate Democrat's now suggest during the Clinton years--and even more before that--and yet that decade under Clinton is considered, wistfully, as a 'boom' period.

2. "the massive increase in the national debt during the president's watch...would seem to lend credence to the (view that) ... the problem is spending..."

Except that the deficit under the Bush whitehouse was massaged to look smaller than it was. It was only when Obama began including the costs of our wars that the total went over a trillion a year. The only spending that Obama has added involved Stimulus to get the economy out of recession. The approximate share of responsibility for our annual deficits is 75% / 25%, Bush / Obama. This is because of the wars, the tax cuts (which were supposed to 'goose' the economy, but didn't) and the expansion of Medicare, all under Bush, compared to the Stimulus and automatically triggered recession-related spending (unemployment benefits, etc.) under Obama. In other words, Bush's decisions bore fruit.

3. "the country has one of the highest corporate tax rates in the world."

Except that many corporations pay no taxes. How can this be? Because our tax code is riddled with loopholes and credits. So, the rate may be high, but US corporations actually pay much less than many of their counterparts in say, Europe.

4. "the rich already pay most of the income taxes in this country..."

Except that the rich are the only ones who have increased their income recently. Everyone else is just keeping up or has lost earning power. So, no wonder they're paying so much, it's because they're the ones raking in the money. For example, the difference between a corporate executive's salary and that of an employee's has changed dramatically over the past few decades. It used to be something like 10-to-1. It's now something like 80-to-1.

5. "about half the population in the lower income brackets pays little or no income tax..."

Except they pay all kinds of other taxes (sales, state, property, social security, etc.) The total tax burden is actually favorable to the rich. Plus, who wants to tax a retiree's Social Security benefits or a young family with kids and their minimum wage jobs?

6. "...and yet (the lower income brackets) as a group receive massive government entitlements."

Except the rich receive even more. A rich Senior enjoying Medicare coverage or deducting his employer-provided health care coverage is getting the better deal. And if you compare the tax breaks for things like mortgage deductions on second homes, etc., to a family on Food Stamps, for example....

So, I do hope the Republicans in Congress take the writer's advice and give Obama what he wants. The worm will turn and the Republican party can begin finding its way again.

What's Up With The Whig

Whiggin' It?

Today's Herald-Whig (Oct. 3, '10) contained an attempt at an overview of the electric car phenomenon from a local perspective.

The news that most likely precipitated the article was that the Chevy Volt would be sold on the coasts prior to being offered mid-country. This seems to have caused the writer to call a local dealership to get the scoop... and that was about it for his sources. I know it's been said many times before, but there is 'the google'.

Unfortunately for the reader, we learned that what is holding up the spread of the electric vehicle is the lack of re-fueling stations.

Most overviews I've read identify the commuter who can drive to and from work on an over-night charge as being the target demographic. Not the cross-country driver, although the vehicle does contain a 300-mile tank of gas in addition to the electric battery that will last for 40 miles (which is about right for a majority of commuters, I believe).

Significantly, the price of electricity is so much cheaper than the price of gas that the oft-quoted $41,000 price for a Volt, lowered into the low- $30,000 range by federal encouragement, is actually not that unlikely for someone who will do a vast majority of their driving to and from work.

Have to wonder whether a chart comparing the costs of buying a Volt, as opposed to an all-gas vehicle, might have piqued the general reader's interest. Instead, we get the "...nothing going on here, folks..." approach.

Hah, we are under no time constraints, and therefore, the urge to 'Whig it' can be resisted. So, let's look into the cost comparison:

*** Let's take a $20,000 vehicle that gets 25 mpg and add the price of gas

over a three year period.

Let's say $3.50 a gallon, average, over the next three years. And we'll say that

the owner averages 30 miles a day (shopping, entertainment, plus work).

So, that's 365 x 30 = 10,950 x 3 years = 32,850 divided by 25 = 1,314 gallons

meaning that gas costs 1,314 x $3.50 = $4,599.

That means the price of about $33,500 can be brought down to about $29,000.

Update: the next generation of Volts will qualify for California's

$5,000 tax credit rebate, as the battery will be guaranteed for either

10 years or 150,000 miles. So, if you live in CA, you're down to $24,000 !

*** But we're not finished. That's because GM is expected to lease the Volt for

a competitive price, thus being able to recycle the car's battery--the big ticket

item in an electric vehicle. Suddenly, the Volt becomes relatively competitive.

And is that government subsidy justified? Here's why it is:

** The eventual price of a mass-produced car like the Volt will drop as the price

of the all-important battery falls. But first there must be mass-production.

** The electric grid tends to be flush with extra electricity during the night, just

when people will be charging their electric cars (this is because power plants

are kept running 24/7). So, not only will we reap the environmental and

security risks of eliminating the need for more and more foreign oil, but we

won't necessarily need to build more power plants in the bargain.