Category Archives: economy

Austria Economics 101

By Andy Myers

H.R. 156 or “Stop the Congressional Pay Raise Act” was introduced January 6th of this year by Rep. Harry Mitchell (D) Arizona. There are 72 co-sponsor’s of this bill including 3 from Ohio. Mary Jo Kilroy (D) OH-15, Robert Latta (R) OH-5 and Zachary Space (D) OH-18.

Where’s Representative Steve Austria (R) OH-7? Would this not be a show of solidarity with those struggling in District 7. For Mr. Austria to co-sponsor this bill, which is sensible when so many in his district are struggling to make ends meet, is a no-brainer?

Last year 2.6 million fellow citizens lost their jobs raising unemployment to it’s highest level in 15 years. Countless others have had their pay reduced or frozen.

What did Mr. Austria and Congress do in these dire economic conditions? They gave themselves a $4,700 dollar cost of living increase raising the average salary to $174,000. Elected officials “giving themselves” pay raises is hardly popular.

In addition to our federal representatives, some state legislatures also like to “stealthily” increase their pay in late night sessions so as not to allow their constituents a voice in the matter. Just ask the Pennsylvania state legislators that got voted out of office in 2005 after they increased their pay in one such session. The legislature had a “change in heart” a few months later, but more than 20 lawmakers lost their jobs over it, according to Taxpayers for Common Sense.

We have a “fresh slate” in Congressional District 7 with 1st term Rep. Austria. Not only should Mr. Austria develop strategies to assist with sustaining and developing job growth in our area, he should also show “commons sense ethics reform” by co-sponsoring H.R. 156.

Call Rep. Austria’s office at (937) 325-0474 or send him an email at https://forms.house.gov/austria/contact-form.shtml asking him to show some solidarity with the people struggling in the 7 counties he represents by co-sponsoring Stop The Congressional Pay Raise Act.

Comparing the City and Schools Revenues and Their Respective Tax Issues

By Daniel Downs

If you haven’t read the News-Current lately, you missed an important announcement. Xenia Community School officials are putting their huge bond issue back on the ballot in May. As the News-Current noted, 59% of the voters rejected another large long-term tax increase to fund the building of new schools.

The big push by school administrators and our elected school board is for the building of large complex for the high school and other community organizations. Rebuilding schools that have been around since the time I was born, which was around the time God created the earth, are of secondary importance. Among those schools are Shawnee Elementary, my first school, Cox Elementary, my second, and Spring Hill Elementary. Oh, my, I forgot the administrators want out of that ancient administrative building on the East side like yesterday. What is not needed is the current plan for less than the best type of schools.

To top it all off, voters will be voting on the city’s 5.0 mill operating tax levy in February. Having talked to my council member, read the council minutes, and reviewed the latest annual financial report, it is obvious that the city needs more money to compensate for the rising cost of doing business. Inflation continually reduces what a dollar buys. I just don’t see the need for an annual increase from $417,000 to about $1.9 million. I would certainly vote for a renewal and possibly for an addition 1.5 mills. But, in a deep recession, any new tax increases don’t seem like a good idea.

Nevertheless, let’s look at the two tax issues.

A renewal of the city’s 3.5 mill operating tax levy would continue generating the same amount it has since 1959, which is $417,000. As mentioned above, the proposed replacement levy of 3.5 mills with an additional 1.5 mills means property owners who used to pay around $26 a year for property valued at $100,000 will now pay an additional $153, which breaks down to about $12 more a month. However, those figures only cover the 3.5 mills plus a 1.5 mills addition. They do not reveal the overall amount of property tax paid to the city. The same owner of a $100,000 home currently pays about $135 in property tax to the city. If the levy is passed, the same homeowner will be giving the city $288 a year.

As everyone who is making a buck knows, the city taxes every dollar earned at the rate of 1.75%. The income tax generates about $9 million a year. That is over and above the $9 plus million residents pay for like water, sewer, and sanitation services. So the current levy is a relatively small but necessary part of the city’s operating budget. Because of inflating costs, the 3.5 mill levy now is worth only .92 mills. In other words, the city needs more revenue in addition to the inflationary rise of income tax revenue, which this year may decline along with their earnings on investments.

During the 2006-2007 school year, Xenia Community Schools received almost $3 million from its 0.5% income tax levy. The school district’s combined property tax levies is 43.9 mills, which brought in about $20 million. A family whose home is appraised at $100,000 pays the school district about $960 a year in property taxes. The bond issue would increase that amount to $1,092.

To see the whole picture on taxes, it must be realized that the total property tax burden of the above homeowner is currently $1,504 dollars a year. The tax proposed by the city will increase it to $1,657. The school bond issue would increase it to $1,769. The same property owner also pays the Greene County Career Center a little over $75 per year, and the County around $316. To repave our deteriorating side streets, voters will have to pass a bond issue to cover the estimated $30 million in costs. Moreover, every working resident currently pays 2.25% of their income to the city and the school district. Without any deductions, a family with annual income of $60,000 pays out $1,500 in income tax. If state and federal income taxes as well as sales and gasoline taxes are accounted for, the tax burden of voting tax payer is getting little too heavy for this deep recessionary period. We can all give thanks to the federal government for it too.

Commodities Market Marketing by Federal Government

This is interesting…

The government subsidized American sugar and applies a tariff to imported sugar, thus the food and beverage industry switched to corn syrup because it became cheaper than using sugarcane.

Now, they are conveniently coming up with a way to scare the public away from corn syrup and back to the higher priced sugar cane…interesting.

Now, don’t get me wrong, I understand that corn syrup is killing Americans and that sugar cane is much better from a health perspective — but since when did the government care about that?

www.washingtonpost.com, 1/6/09.

What does Obama’s stimulus plan, outdated infrastructure, and gas taxes have in common

In a January 10 editorial, the New York Times approved Obama’s big spending stimulus plan but complained about his plans to continue the past era of tax cuts. One of part of the approved plan is $500 billion to bolster unemployment benefits, aid to states, and for investment in the nation’s crumbling and outdated infrastructure.

In an article critical of the Times editorial, Don Feder of Accuracy in Media rightly observed that “no matter how much the states get for highway repairs (from the gas tax, general revenue, tolls and federal aid), the infrastructure is still crumbling and outdated.”

The question taxpayers and gasoline consumers should be asking is why that is. The national average tax on gasoline is 47 cents per gallon. That means the amount of gas taxes collected by federal, state and local governments to maintain our roadways is a meager $66.5 billion a year. And the federal government returns to the states 90.5% of its portion of the national gas tax, which is 18.4 percent.

Are states using their part of the tax pie for projects other than maintaining our roadways?

We could probably define Obama’s plan as a pork-barrel bailout stimulating welfare program–what do you think?

Xenia is Growing–New People & New Businesses

Jim Percival submitted a census challenge on October 1, 2008 after assessing that the Bureau’s annual updated estimate of 23,656, which represents a two percent decrease from the 2000 population of 24,164, appeared to be inaccurate.

Nimfa Simpson, City Planner, compiled statistics utilizing worksheets and population formulas provided by the Population Division of the Bureau of Census. From these formulas, she was able to determine that the 2007 population of Xenia should be 27,291 rather than the Bureau’s 23,656 estimate. This growth projection is attributable to the following factors: major annexations, subdivision developments that have produced a total of 1,499 housing units during the census projection period, in-fill development of vacant land, and a stable housing stock.

Positive population growth is an important measure of the vitality of a city because it indicates that the community is an attractive place to live, work and play. Positive population growth is also an economic development stimulus because where there are people, business will follow and this means more jobs for the City and its residents.

And new business are springing up like daisies. At least 25 new business started operations in Xenia during 2008. New retailers and restaurants include Discount Smoke For Less, Vacs & Videos, Pass It On Antiques, The Sweets Boutique, S&W Auto Brokers, Walgreens, BP Station, Sonic Boutique, and one more to come is Biscuit World. New services cover a wide range of industries including legal, business, medical, entertainment, and consumer. Several new consumer services are Kirk Vincent Plumbing, Snap Fitness, Great Clips, Out Of the Box Creations and Designs, and Spectacular Eyewear Repair.

Another business on its way is called Eden World. I do not know what type of business it is supposed to be, but my guess is its either sells a little slice of paradise natural or possibly bass amplifiers. Who knows; the new business might be even be a school or just a seller of Eden World war games. We’ll see….

A look at foreclosures in Greene County and beyond

The bubble bursting housing market set off a rapid decline resulting in our current economic depression. Bursting of the housing market bubble was exacerbated by sharp rises of oil, food, and everything else. The fix envisioned by bureaucrats at all levels is more government intervention and monetary policies resembling New Deal socialism. The ownership of capital markets is the end of economic freedom.

The problem with our government’s corporate banking and business bailouts relates to a general rule of thumb that goes something like this: Government programs tend to last nearly forever. Historically, the promise of a temporary alleviation is most a government ploy to increase power. Welfare was supposed to be a temporary solution to economic crisis before and after WWII. Welfare statism is the norm on both sides of the Atlantic. Federal tax reimbursements to local communities with federal facilities were to compensate local schools, thus making taxation fair and equal. That an excuse for Congress to initiate the Elementary and Secondary Education Act. ESEA and its newest version NCLB was supposed to help the poor obtain a quality education. The old song and dance is still sung by bureaucrats, but ESEA has never just helped the poor or poor school districts. ESEA has always benefit non-poor. The same is the case with State Children Health Insurance Program. These are programs like all other socialist program to rob American of their freedom supposedly with their consent.

Once government gets the control over money, markets, jobs, and the rest of our lives it will not like end without the same struggles that George Washington, Abraham Lincoln, Polish, or the many other peoples across the globe. The consolation is that our written national compact still gives Americans a peaceful means to right wrongs of government.

Anyway, foreclosures (and property ownership) serves as an indicator of the state of American economic independence. According to reports by RealtyTrac, foreclosures in the U.S. rose 80% in 2008. Foreclosures in Ohio soared 26 percent. Of 113,570 filing in Ohio, the Miami Valley accounted for only about 14% or 16,318. It seems property ownership that is supposedly the realization of the American dream is more illusion than reality. The reality is no one owns any property, at least for 20-30 years, except the federal money market.

The good news is foreclosures in Greene County were relatively low by comparison to the rest of Ohio. Only 940 foreclosures were recorded in 2008, which is less than 1% of all Ohio filings and only 5.8% of all foreclosures in the Miami Valley. Greene County is thus blessed compared to other surrounding countries.

Greene County residents also adhered more to principles of our founding during the past election than many other regions. Could there be a correlation?

Dollar & $ense

Every man woman and child in these United States of America owes $31,641 to the national debt. The interest alone is over $430 BILLION ( $1400 a piece ) with the national debt approx. 9.6 TRILLION and rising. No nation in the history of mankind is in as much debt as ours. Our children and grand children and possibly their children will have us to thank for that.

Famous economist Murray Rothbard, Henry Hazlitt and more recently, President of The von Mises Institue of Austrian Economics Lew Rockwell, understand inflating the nations currency (the dollar) makes our money worth less and less. Many don’t understand the Federal Reserve, or even realize their is nothing “federal” about it. The FED along with Congress, seem to be in love with famous British socialist John Maynard Keynes, who wrote a book in 1920 explaining whats happening to our wealth. Keynes said “by a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” You can do something about it though.

Come and watch the documentary “Dollars and $ense” with other liberty minded people Thursday, January 29th @ 7pm in the downstairs meeting room at the Xenia Library. The meeting will last approximately 1hr.

Sherrod Brown goes missing in action

By John Mitchel

RE: “Hobson always put jobs first during 18-year tenure,” by Sherrod Brown, Dayton Daily News, December 27, 2008. U.S. Senator Sherrod Brown for as long as I can remember was a voice from the wilderness that spoke the truth on the North American Free Trade Agreement. He even had the courage of conviction to disagree on the issue with fellow Democrat Bill Clinton. But now that Brown and other NAFTA opponents are proven right by the “giant sucking sound” of jobs gone offshore, I’m disappointed he would try to rehabilitate the tarnished image of lame-duck Congressman, Dave Hobson. For Senator Brown to deal in glowing absolutes on Hobson’s pitiful record on job growth in the 7th Congressional District is unbecoming to the junior Senator from Ohio.

However Hobson has improved the job prospects for one sector of our economy, namely his special interest campaign contributors. Take for example his advocacy in steering $1.9 million in un-bid, taxpayer funded contracts toward the Dayton Development Coalition (DDC) which in turn noncompetitively awarded much of the work to The Greentree Group, a Beavercreek support contractor and Paul Magliochetti and Associates (PMA Group), a Washington lobbyist. Federal Election Commission records show that Greentree, PMA and DDC employees donated tens of thousands of dollars to “Hobson for Congress” before, during and after the 2003 sweetheart deal between Greene County Republicans and the DDC. It’s tragic that Senator Brown would offer a parting platitude to a politician who was part of the problem instead of one who recognized a failed policy and acted to correct it.

Ohio Manufacturer Reponds to Automakers Bail-Out Pleas

The following is an excerpt of a letter sent by General Motor’s CEO to employers and parts suppliers, which is followed by a response from an Ohio manufacturer.

Dear Employees & Suppliers,

Congress and the current Administration will soon determine whether to provide immediate support to the domestic auto industry to help it through one of the most difficult economic times in our nation’s history. Your elected officials must hear from all of us now on why this support is critical to our continuing the progress we began prior to the global financial crisis. As an employee or supplier, you have a lot at stake and continue to be one of our most effective and passionate voices. I know GM can count on you to have your voice heard.

Thank you for your urgent action and ongoing support.

Troy Clarke

President General Motors North America

The following response is from Gregory Knox, President of Knox Machinery Company located in Franklin, Ohio.

Gentlemen:

In response to your request to contact legislators and ask for a bailout for the Big Three automakers please consider the following, and please pass my thoughts on to Troy Clark, President of General Motors North America.

Politicians and Management of the Big 3 are both infected with the same entitlement mentality that has spread like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping this nation, awaiting our new “messiah”, Pres-elect Obama, to wave his magic wand and make all our problems go away, while at the same time allowing our once great nation to keep “living the dream”… Believe me folks, The dream is over!

This dream where we can ignore the consumer for years while management myopically focuses on its personal rewards packages at the same time that our factories have been filled with the worlds most overpaid, arrogant, ignorant and laziest entitlement minded “laborers” without paying the price for these atrocities…this dream where you still think the masses will line up to buy our products for ever and ever.

Don’t even think about telling me I’m wrong. Don’t accuse me of not knowing of what I speak. I have called on Ford, GM, Chrysler, TRW, Delphi, Kelsey Hayes, American Axle and countless other automotive OEM’s throughout the Midwest during the past 30 years and what I’ve seen over those years in these union shops can only be described as disgusting.

Troy Clarke, President of General Motors North America, states: “There is widespread sentiment throughout this country, and our government, and especially via the news media, that the current crisis is completely the result of bad management which it certainly is not.”

You’re right Mr. Clarke, it’s not JUST management…how about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass…so they can come in on the weekend and make double and triple time…for a job they easily could have done within their normal 40 hour work week. How about the line workers who threaten newbies with all kinds of scare tactics…for putting out too many parts on a shift…and for being too productive.

(We certainly must not expose those lazy bums who have been getting overpaid for decades for their horrific underproduction, must we?!?)

Do you folks really not know about this stuff?!? How about this great sentiment abridged from Mr. Clarke’s sad plea: “over the last few years …we have closed the quality and efficiency gaps with our competitors.” What the hell has Detroit been doing for the last 40 years?!? Did we really JUST wake up to the gaps in quality and efficiency between us and them? The K car vs. the Accord? The Pinto vs. the Civic?!? Do I need to go on? What a joke!

We are living through the inevitable outcome of the actions of the United States auto industry for decades. It’s time to pay for your sins, Detroit.

I attended an economic summit last week where brilliant economist, Alan Beaulieu, from the Institute of Trend Research, surprised the crowd when he said he would not have given the banks a penny of “bailout money”. “Yes, he said, this would cause short term problems,” but despite what people like politicians and corporate magnates would have us believe, the sun would in fact rise the next day… and the following very important thing would happen…where there had been greedy and sloppy banks, new efficient ones would pop up…that is how a free market system works…it does work…if we would only let it work…”

But for some nondescript reason we are now deciding that the rest of the world is rig ht and that capitalism doesn’t work – that we need the government to step in and “save us”…Save us my ass, Hell – we’re nationalizing…and unfortunately too many of our once fine nation’s citizens don’t even have a clue that this is what is really happening…But, they sure can tell you the stats on their favorite sports teams…yeah – THAT’S really important, isn’t it…

Does it ever occur to ANYONE that the “competition” has been producing vehicles, EXTREMELY PROFITABLY, for decades in this country?… How can that be??? Let ‘s see… Fuel efficient… Listening to customers… Investing in the proper tooling and automation for the long haul…

Not being too complacent or arrogant to listen to Dr. W. Edwards Deming four decades ago when he taught that by adopting appropriate principles of management, organizations could increase quality and simultaneously reduce costs. Ever increased productivity through quality and intelligent planning… Treating vendors like strategic partners, rather than like “the enemy”… Efficient front and back offices… Non union environment…

Again, I could go on and on, but I really wouldn’t be telling anyone anything they really don’t already know down deep in their hearts.

I have six children, so I am not unfamiliar with the concept of wanting someone to bail you out of a mess that you have gotten yourself into – my children do this on a weekly, if not daily basis, as I did when I was their age. I do for them what my parents did for me (one of their greatest gifts, by the way) – I make them stand on their own two feet and accept the consequences of their actions and work through it. Radical concept, huh… Am I there for them in the wings? Of course – but only until such time as they need to be fully on their own as adults.

I don’t want to oversimplify a complex situation, but there certainly are unmistakable parallels here between the proper role of parenting and government. Detroit and the United States need to pay for their sins. Bad news people – it’s coming whether we like it or not. The newly elected Messiah really doesn’t have a magic wand big enough to “make it all go away.” I laughed as I heard Obama “reeling it back in” almost immediately after the final vote count was tallied…”we really might not do it in a year…or in four…” Where the Hell was that kind of talk when he was RUNNING for office.

Stop trying to put off the inevitable folks … That house in Florida really isn’t worth $750,000… People who jump across a border really don’t deserve free health care benefits… That job driving that forklift for the Big 3 really isn’t worth $85,000 a year… We really shouldn’t allow Wal-Mart to stock their shelves with products acquired from a country that unfairly manipulates their currency and has the most atrocious human rights infractions on the face of the globe…

That couple whose combined income is less than $50,000 really shouldn’t be living in that $485,000 home… Let the market correct itself folks – it will. Yes it will be painful, but it’s gonna’ be painful either way, and the bright side of my proposal is that on the other side of it all, is a nation that appreciates what it has…and doesn’t live beyond its means…and gets back to basics…and redevelops the patriotic work ethic that made it the greatest nation in the history of the world…and probably turns back to God.

Sorry – don’t cut my head off, I’m just the messenger sharing with you the “bad news”. I hope you take it to heart.

Gregory J. Knox, President

Knox Machinery, Inc.

Franklin, Ohio 45005

Thanks Gregory Knox for your zealous and honest love for America and the ideals that worked until bureaucrats and narcissistic special interest agendas screwed it up.

Rep. Austria’s Year End Legislative Summary

By Rep. Steve Austria

Recently, the U.S. House of Representatives concluded its legislative business for the year with the passage of several measures, including a funding bill for the Department of Defense and short-term extensions for the Patriot Act, as well as two major spending bills, increasing our nation’s debt limit by $290 billion to $12.39 trillion and a second stimulus bill, with new spending of over $150 billion. As I have commented on in the past, I continue to have serious concerns about the outrageous amount of government spending and will continue to oppose those irresponsible policies, which have a negative impact on our economy.

Please see below for a summary of the major policy issues considered by Congress this year.

Economy

As we began 2009 with a new administration and a new Democratic Congress, a number of spending bills were brought forward including the second half of a $700 billion “bailout” bill, a $787 billion “stimulus” or government spending bill, $410 billion omnibus bill that included over 9,000 earmarks and a $3.5 trillion fiscal year 2010 budget resolution. These massive spending bills have created historical amounts of debt and have only expanded the size and scope of government. This borrow and spend approach has hurt our economy this year and will burden future generations with an insurmountable amount of debt.

With unemployment at the highest levels in recent decades and during these difficult economic times, it is important that we devote our efforts to strategies that promote new investment opportunities, stimulate job growth and strengthen economic development. Congress must be better focused on helping small businesses create and sustain jobs to strengthen our economy. I recently appointed a new Blue Ribbon Commission to review and better understand the contracting process at Wright Patterson Air Force Base (WPAFB). This commission will work on ways for our region to support WPAFB and set up a “best business model” to help companies in our region secure and create more private sector jobs that can be sustained for years to come. I look forward to the opportunities that lie ahead in the new year to strengthen economic growth and make our area more competitive nationally.

New Energy/ Climate Change Policies

Last summer, the House passed a climate change bill, establishing a national cap and trade system, which essentially amounts to a new energy tax. I have expressed serious concerns with the house-passed bill that amounts to a new $629 billion tax, negatively impacting Ohio businesses, including manufacturing and farming, resulting in more job losses. The mandates under the bill will essentially pick winners and losers among the states. States, like Ohio, that produce and use more carbon-based energy, such as coal, will be hit hardest with cap and trade, while states such as California and New Jersey will receive more favorable treatment under this bill.

Nearly 90 percent of Ohio’s energy comes from coal. Every Ohio household and business that uses electricity, heats their home with natural gas or fills their automobiles with gasoline will have an increase in energy costs and gas prices to pay for this climate change legislation. That is too much to ask of our families during these difficult economic times with unemployment at its highest level in years.

We all want clean air and increased use of renewable energy; however, we need to accomplish this goal in a responsible manner. There is a better way to achieve this goal than the bill that was passed by the House. I support an alternative plan that would promote new, clean and reliable sources of energy by having less reliance on foreign oil and begin using domestic alternative energy such as solar, wind and nuclear energy and continuing to expand new technologies such as clean coal. The alternative plan moves our nation forward using more clean energy without costing Ohio jobs and imposing a new energy tax on families and small businesses.

With the health care debate dominating the Senate’s schedule, they were unable to consider climate change legislation this year; however, they may address the issue in the new year.

Health Care Reform

In November, the House of Representatives passed H.R. 3962, often referred to as Speaker Pelosi’s 2000 page health care reform bill, by a vote of 220 to 215. I voted “no” on this legislation because of its $1 trillion price tag with major cuts to the Medicare and Medicare Advantage program. Also, the likelihood that many Americans who are satisfied with their current health insurance could face significantly higher premiums as a result of the federal mandates included in this bill. This bill also imposes over $720 billion of taxes on families and small businesses.

We must enact policies that improve our health care by lowering costs, making health care coverage more affordable and accessible and protecting the doctor-patient relationship. I have consistently advocated for a common-sense approach that includes medical malpractice reform, allowing individuals to purchase health care coverage across state lines, allowing businesses and communities to pool insurance nationally, and expanding the use of health savings accounts (HSAs). This year, I introduced a bill, the Health Savings and Affordability (HSA) Act, which would empower more Americans to take ownership over their health care by expanding tax free Health Savings Accounts and making health insurance tax deductible for everyone.

We must work in a bipartisan manner to reduce costs, improve the quality of care and expand access. That is why this year I also formed a district-wide health care advisory committee made up of doctors, nurses, hospitals, small businesses, insurers and other leaders from our local community. My father was a doctor and my mother was a nurse. We must protect our doctor-patient relationship and allow you and your doctor to choose what treatment is best for you and your family, not the government.

On December 24, 2009, the Senate passed its health care reform bill, H.R. 3590, by a vote of 60 to 39. The House and Senate must now reach a compromise on the many differences between the two bills, and vote again on the new version. As the health care debate continues, I encourage you to contact your elected officials and express your views regarding this important issue.