Posted on 11/06/2002 1:39:57 PM PST by Tree of Liberty
Neil Cavuto just interviewed Mitchell E. Daniels, Jr., the director of the OMB, and Neil let it be known that he's hearing rumblings that Pres. Bush is considering a total re-write of the tax code and that SecTreas O'Neill is strongly pushing a national retail sales tax!
Defunding the IRS will eliminate billions of dollars from our budget.
But I'd also like to marry a young blond girl.
Hey I found one of those! Bout 20years ago, a great gal, who puts up with my minor foibles and occasionally slaps me upside the head as needed :O).
| http://www.census.gov/population/www/cps/cpsdef.html Poverty definition. Following the Office of Management and Budget's (OMB's) Directive 14, the Census Bureau uses a set of money income thresholds that vary by family size and composition to detect who is poor. If a family's total income is less than that family's threshold, then that family, and every individual in it, is considered poor. The poverty thresholds do not vary geographically, but they are updated annually for inflation with the Consumer Price Index (CPI-U). The official poverty definition counts money income before taxes and excludes capital gains and noncash benefits (such as public housing, medicaid, and food stamps). Poverty statistics are based on a definition developed by Mollie Orshansky of the Social Security Administration (SSA)in 19641 and revised in 1969 and 1981 by interagency committees. This definition was established as the official definition of poverty for statistical use in all Executive departments by the Bureau of the Budget (BoB) in 1969 (in Circular No. A-46); after BoB became The Office of Management and Budget, this was reconfirmed in Statistical Policy Directive No. 14. The original poverty definition provided a range of income cutoffs or thresholds adjusted by such factors as family size, sex of the family head, number of children under 18 years old, and farm-nonfarm residence. At the core of this definition of poverty was the economy food plan, the least costly of four nutritionally adequate food plans designed by the Department of Agriculture. It was determined from the Department of Agriculture's 1955 Household Food Consumption Survey that families of three or more people spent approximately one-third of their after-tax money income on food; accordingly, poverty thresholds for families of three or more people were set at three times the cost of the economy food plan. Different procedures were used to calculate poverty thresholds for two-person families and people living alone in order to compensate for the relatively larger fixed expenses of these smaller units. For two-person families, the cost of the economy food plan was multiplied by a factor of 3.7 (also derived from the 1955 survey). For unrelated individuals (one-person units), no multiplier was used; poverty thresholds were instead calculated as a fixed proportion of the corresponding thresholds for two-person units. Annual updates of these SSA poverty thresholds were based on price changes of the items in the economy food plan. As a result of deliberations of a Federal interagency committee in 1969, the following two modifications to the original SSA definition of poverty were adopted2:
In 1981, three additional modifications in the poverty definition recommended by another interagency committee were adopted for implementation in the March 1982 CPS as well as the 1980 census:
For further details, see the section, "Changes in the Definition of Poverty," in Current Population Reports, Series P- 60, No. 133. The poverty thresholds are increased each year by the same percentage as the annual average Consumer Price Index (CPI). The poverty thresholds are currently adjusted using the annual average CPI-U (1982-84 = 100). This base year has been used since 1988. From 1980 through 1987, the thresholds were adjusted using the CPI-U (1967 = 100). The CPI (1963 = 100) was used to adjust thresholds prior to 1980. For further information on how the poverty thresholds were developed and subsequent changes in them, see Gordon M. Fisher, "The Development and History of the Poverty Thresholds," Social Security Bulletin, vol.55, no.4, Winter 1992, pp. 3-14.
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I see your point of view, but there is the small possibility of an individual or family being rebated more than they spend on new necessities, a self sufficent hunter/fisherman/farmer living basically offf the land and being thifty by buying as much used articles as possible....
The sportsman is sending X amount of hours each month in the streams or hunting woods or the home vegetable garden. They do their work in those locations rather than at a job that gives them a paycheck for their labor.
Here's the long version:
Suppose forty hours of work each month at a desk job pays the monthly food bill and that the food bill is $738 dollars a month plus the 23% retail sales tax ($170) for a total $908 "out of pocket" monthly food bill.. Thus his forty hours at a desk job pays him $908. Then he applies his $170 prebate check by subtracting it from the $908 total and his out of pocket cost for his monthly food bill is $738. In effect, he spent $908 dollars he got from forty hours of work and ends up with a month's worth of food plus $170 dollars in his pocket.
Let's do similar for the vegetable gardener and assume he buys no food. It takes the vegetarian forty hours of work in his garden to harvest a month's worth of food. The vegetable gardener's forty hours of garden work is the equivalent of $908 if he was getting a paycheck to work in his garden. But instead of getting a paycheck, the fruits of his forty-hours labor is his monthly supply of food, not $908. The garden then applies his prebate check to his forty hours labor and he in effect ends up with a month's worth of food plus $170 dollars in his pocket.
Both men's labor has value. One trades his desk-job labor for money from his employer which he then trades the money for food with the grocer. The other person/gardener works directly creating/producing his food and trades with no other party, neither an employer or grocer. At the end of the month they each have one month's worth of food and $170 dollars in their pocket.
The problem with using CPI (presumably CPI-U? There are several different values of "CPI" that are produced by the bureau of labor statistics)
CPI-U is specified as the standard measure.
The CPI itself is subject to manipulation, such as substitution of the price of generic drugs for name-brand prescriptions, something the BLS did in January of 1995 along with other changes to the CPI calculation.
Hmmm!, an automatic downward adjustment, to the FCA and costs of government. The political tendency is to understate inflation, just the opposite of what you have been claiming must happen.
No administration wants a glaring admission of inflation raising interest rates, inhibiting stock & bond markets, and depressing economic numbers, for folks to get stirred up about.
Understate the inflation rate too far and you get economic numbers that look like recessions or deflation with the Feds pounding interest rates into the ground, getting constituents sore because their hard earned dollars don't buy as many diapers and milk as it used to for not having kept up with the true value of inflation, getting banks and venture capital folks angry for loosing value on loans to the real inflation in the economy. Guess who gets blamed?
Either condition tends to loose elections for encumbants. Once again your $150,000 wild bureaucrat's arbitrary adjustment show's itself for the vaporware it is.
You mean like what is happening in the economy right now.
The CPI number is understated as a holdover from changes to the measure introduced by the Clinton administration. The impact of actual inflation at the individual's necessity level is being felt by folks on fixed income even more than those on nominally CPI adjusted incomes. I guarantee I see it in the grocery stores, fuel, and medical expenses which are the bane of retirees.
So yes we are seeing a marginally recessed economy made worse by overly conservative inflation measures. Though that may not be a bad thing in the long term as the effect tends to be counter inflationary by causing folks to tighten their consumer's belts resisting price changes. It plays hell on fixed to falling investment retirement incomes though. Things tend to look gloomy when the choice at the margins is between eating and meds.
Note the rate of increase in the National debt figure. That is a primary indicator of future inflation(just subtract the rates of population growth and productivity increase from it and you have a rough measure of near term potential for monetary inflation). The national debt is underwriting the money supply,for that is where banking dollars ultimately derive from in the fractional reserve system we opperate with.
Unfortunately not all thing inflate in the same way, fuel then necessity consumer goods usually lead the the inflation parade, with the financial and equity sectors trailing behind.
Hmmm!, an automatic downward adjustment, to the FCA and costs of government. The political tendency is to understate inflation
True, but that's because the political benefit is currently for understating it.
When there is a significant advantage for doing otherwise, it isn't difficult to imagine the bureaucracy manipulating the numbers in the other direction instead.
Perhaps you will explain for us the political advantage of overstating the inflation rate. Lets see, high rising interest rates, falling liquidity and availability of loans. Most of the investment money starts churning hard assets instead of being applied towards long term capital expansion with a commensurate loss in business growth. We end up pushing the velocity of cash flow but lose commercial profitability.
Monkeying with the numbers outside of nominal error limits is disasterous with no political advantages to be found. Unless of course you are out to destroy a nation and foul your own nest right along with it.
It would only take an administration with "nothing to lose" (for example, the second, lame-duck term of a Gore administration, Deity forbid) who might consider the implementation of a national socialist system to be preferable to the damage to the economy
Ah political suicide for the party of said lameduck office holder. Remember a grossly erroneous change can and would be stopped through injunction actions entered into the Courts by those who would be adversely effected. Financial Markets, Corporations, and the power folks all up and down the line will be out with blood in their eyes for the party at fault and minimal pennies and support to the candidates of the political party in their sight.
Numbers that are grossly in error, which is the only thing that could conceivable cause the effects that you envision, whould not stand long enough to be implemented. Everything number, every regulation, impacting enacted programs are put through a very strict process involving committe reviews, public input and review, 90 delay of implementation to allow congressional action(only takes one Congress Critter to bring implementation to a complete halt for challenge and Congressional tabling of the the proposal to kill it outright.) Even when implemented evidence material error, malfeasence or misfeasance brought through civil court action, would be sufficient for administrative relief of injuction until the controversy is resolved.
Your belief that substantive change of that magnitude is mere excessive imagination and paranoia on your part. The mechanics of process & political opposition simply does not allow for the exercise of the kind of individual arbitariness you imagine.
If the system were that fragile and lacked the capacity to prevent such changes from implementaton, we would already be in your full communist dictatorial h'll hole right now, and this discussion would not even be taking place.
Leftists have often demonstrated a refusal to believe the rules of the marketplace apply to them.
Doesn't really matter, one court case seeking administrative remedy in the nature of an injuction, and removal of obvious erroneous number and it replacement with proper statistical value is all it takes to put the crunch on your concocted scenario.
It only takes preponderance of the evidence in a civil case to achieve said relief, and since monetary damages are not requested only administrative relief the case would have everything going for it with the government on the hook to prove its numbers valid. Violation of expected Statistical varience from trend is more than enough to seek relief, and with evidence of arbitrary change of methodology from accepted practice will slam a grossly erroneous published value right into the bit bucket long before it could ever be implemented.
Your scenarios are merely speculative and have little to recomend them or even suggest a rational basis in view of historical processes and modes in the publication and implementation of statute sensitive statistics. Nor do they take into account of the very real and useful authority of the court to set bureau regulation right when such exceed the boundries of legislative scope.
Now if Congress were to enact such a gross change in methodology to specifcally implement such shenannigans that would be another matter another matter, but we are subject to that right now so your imaginative worries mean nothing through extension onto a new statute. The statutes are subject to legislative change now an can modify the current law to achieve severe magnitude changes in tax law now without risking the least in challenges before the courts.
But mere official error, malfeasance, misfeasance or outright fraud will not fly on adequate challenge in the courts. And challenge in the courts on the part of Corporations, businesses, and class actions of individuals potentially effected would arise overnight on the first view of substantive changes wrought by bureaucratic fiat changing the effect of statute outside of the legislative intent of Congress. Statute severley contols the scope of implementation via bureaucracy to the intent of Congress as expressed by statute and constitutional limits on official authorities.
Granted, the party would lose the votes of "peter" (those paying the price in the marketplace), but it would gain the votes of "paul" (those getting the now massively inflated government handout).
No one getting a massively inflated handout as implementation would be halted via injuction and administative remedy of the Courts on challenge.
Without an act of Congress, whatever the bureaucracy publishes becomes defacto law.
Only if it passes through statutorily prescribed process for the proposal, board review, public review process, and publication of regulations, and then survive the 90 day Congressional review period after publication. No act of Congress is necescary during the review process, a mere challenge is sufficient to bring things to a screeching halt. Even after all that, the regulation is still challengable in the Courts under tort law, or plea for administrative relief where error, malfeasance, or misfeasance can be shown to the standard of preponderance of the evidence. An injuction to halt implementation until after the contoversy is resolved in the court take less than that.
It is clear you have a very limited understanding of the processes involved in proposing, implementing, and challenge of regulations. Things do not happen by mere fiat of individual bureaucrats in government, it takes concurrent complicity of the President, Congress, department heads, regulatory review boards, and the Courts to make a bad regulation or material error stick.
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