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Tuesday, October 15, 2013

Theoretical Economics: Why Economic Failure is Never a Reality


                    There has been a lot of economic theory going around that I think needs cleared up. Recently, the scared IMF director Christan LeGarde and the World Bank asked, nay demanded that the United States government play by the rules of the game of modern economics. Just who does Ms. LeGarde think her employer is? The UN? No, her ultimate employer is the US Federal Reserve who in this game of modern economics that I'll call Nashopoly in honor of the Nobel Prize winner for his game theory, and mind you, economics is a game, the late Honorable John Nash.
                   The THEORY that is am going to discuss is based on Mr. Nash's Game Theories, but mostly it will discuss his ultimate game changer, "the Theory of Equilibrium."  Now, if you are a Keynesian economist, you do not believe in paying your debts on time, you just borrow more money from the bank, which is worth (7 cents)  for any size denomination of currency that is currently being printed.
                   Why only (7 cents) you ask? Well, our modern day currency truly has no inherent value, its value is fabricated and is dependent upon a set of agreed upon rules that work to maintain an economic stability. I buy your goods, you buy my goods, they buy your goods, and so on as long as every player plays fair.
                    The ongoing game of Nashopoly is based upon an equal respect, tolerance of risk, fair play, and the psychological rules of etiquette that cheaters working on behalf of the players will be killed- not pardoned.You might find that a harsh punishment, but those are the rules of the game. If you are caught cheating, someone will be blamed and someone must be punished by imprisonment or death (depending upon your owner player handbook translation).
                      In John Nash's Theory of Equilibrium, the easiest way to succeed was to cooperate with your competitor in order that both of you would survive any calamity. You could then increase your market share over those that fought among themselves and died from their battle wounds.
                      Considering the fact that the banker in the current version of Nashopoly that is being played throughout the world at the present time is the United States Federal Reserve System, a more crooked bunch of greedy bankers if you have never seen in your life, and the main player in the game could kill off any of the banker's team at any point in time, and has in the past done just that. Imagine the level of cooperation between the main player and the banker of the game in fabricating, at least on paper, payments for the main player's debts to the bank who would then pay the other players out of a long term self-survival loan, issued to the main player by the game's bankers.
                        Default on our debt? HA!Ha!Ha! You obviously don't know the rules to the game of shells do you? Is the debt under Shell "A," "B," "C," or an imaginary fabricated shell "D"?

Pick a shell! What? You don't See shell "D"? Imagine that!
                  






In the game of Nashopoly, the debts paid or not paid to yourself or borrowed from an "imaginary account" with the banker (the US Federal Reserve), who has the authority and the digital means to make debt mysteriously disappear (see the Fed's latest fabrication, their own balance sheet)!

Consider this also, more than 70% of the Treasury Bond and other asset debt owed to the US Treasury is owed by other US government agencies. What, I can't pay myself? Oh! My God! The Sky is falling for sure this time!

Unless the US Government bridles in its wasteful spending habits and puts people back to work (to generate cash flow and tax revenue), or kills off around 50 million people in the next five years, or just nukes itself and starts over in Kansas City, Missouri for instance, a new economic game will be started at the demand of the other 185 players (countries) of the world.





Still believe that shutting down the United States government is a bad thing for the economy?

Do you want to know why the US Government is going broke?
Take a look here and below:  As of October 2013-approximately 22,000,000 federal, state, and local government employees (including our useless military) making on average $80,000 plus $40,000 in benefits per year. (See charts below). 

http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/


1 out of 7 workers, if Forbes is to be believed is a federal, state, or local government employee who is sucking the life out of this country with regulations and enforcement!
In this article, we’ll examine the total number of government employees (GE) as a percentage of the population (P). We’ll call this the GE/P Ratio. A higher ratio indicates a higher percentage of government employees relative to the total population. We’ll examine this ratio at the end of the last five presidential terms, including Obama’s first. I should note that the numbers are in millions and the number of government employees includes federal, state, local, etc. Although I am using the end of presidential terms as the periods measured, this is not meant to imply that any president is solely responsible for this growth.
Introducing the GE/P Ratio
The following table shows the number of government employees, total population and the GE/P Ratio. It essentially takes a snapshot at the end of each presidents term and compares it to the point when they took office.
End of Term
Date
# Government Employees (GE)
Population (P)
GE/P Ratio
Obama
Dec. 2012
21,925
315,255
6.9%
GW Bush
Dec. 2008
22,555
306,004
7.4%
Clinton
Dec. 2000
20,804
283,696
7.3%
GHW Bush
Dec. 1992
18,878
258,413
7.3%
Reagan
Dec. 1988
17,736
246,056
7.2%
Notice how the GE/P Ratio held steady for Obama’s predecessors, hovering around 7.3%. However, by the end of Obama’s first term, the ratio fell to 6.9%, a decrease of 7% from the end of the Bush era. To glean the full picture, we’ll need to look at the percentage increase for the population and for the number of government employees. If the population increases by a rate similar to the increase in government employment, that would be expected. From 1980 to 2008, the percentage increase in total government employees at the end of each of their terms (compared to when they took office), was between 6.4% and 10.2%. This is relatively close to the percentage increase in the population over the same period (5.0% to 9.8%). However, during Obama’s first term, the population increased by 3.0% while the number of government employees fell by 7%. This is the reason for the decline in the GE/P Ratio shown above.
End of Term
Date
% Increase in GE
% Increase in P
GE/P Ratio
Obama
Dec. 2012
-2.8%
3.0%
6.9%
GW Bush
Dec. 2008
8.4%
7.9%
7.4%
Clinton
Dec. 2000
10.2%
9.8%
7.3%
GHW Bush
Dec. 1992
6.4%
5.0%
7.3%
Reagan
Dec. 1988
8.3%
7.6%
7.2%
This decline is largely a result of the financial crisis. With revenue in shorter supply, state governments which have a mandate to balance their budgets, cut staff.




Conclusion
Although we may have a temporary reprieve from overall government growth, on the road to a larger government lies many perils. Although the size of government has declined slightly in the past four years, the debt has exploded and higher taxes are likely on the horizon. It is during periods of government expansion that freedoms are commonly surrendered. When Paul Revere took his midnight ride shouting, “The British are coming,” the colonists were facing a mortal threat from an army intent on taking their land and freedom. Today, the threat is no less real, but is not of the type which threatens our life, just our liberty and the pursuit of happiness. Think about it.








 

 





Pay & Benefits

Government Jobs / Federal Jobs / Civil Service Jobs / Post Office Jobs
Job security, good pay, and an excellent retirement system are just a few of the top reasons most people seek federal employment. Others consider government careers because of desirable travel opportunities, training availability, diverse occupations, and the ability to locate jobs nationwide and overseas.
There are eight predominant pay systems. Approximately half of the workforce is under the General Schedule (GS) pay scale, 20 percent are paid under the Postal Service rates, and about 10 percent are paid under the Prevailing Rate Schedule (WG) Wage Grade classification. The remaining pay systems are for the Executive Schedule, Foreign Service, Special Salary Rates, and non appropriated Fund Instrumentalities (NAFI) pay scales, and Vet

Pay


Average annual salary for full-time federal government jobs now exceeds $81,258 and The average annual federal workers compensation, including pay plus benefits, now exceeds $123,049 compared to just $61,051 for the private sector according to the United States Bureau of Economic Analysis.
The majority of professional and administrative federal workers are paid under the General Schedule (GS). The General Schedule has 15 grades of pay for civilian white-collar and service workers, and smaller within-grade step increases that occur based on length of service and quality of performance. New employees usually start at the first step of a grade; however, if the position in question is difficult to fill, entrants may receive somewhat higher pay or special rates. Almost all physician and engineer positions, for example, fall into this category. In an effort to make federal pay more responsive to local labor market conditions, federal employees working in the continental U.S. receive locality pay. The specific amount of locality pay is deter-mined by survey comparisons of private sector wage rates and federal wage rates in the relevant geographic area. At its highest level, locality pay can lead to an increase of as much as 26 percent above the base salary. Every January a pay adjustment tied to changes in private sector pay levels is divided between an across-the-board pay increase in the General Schedule and locality pay increases.

Vacation and Sick Leave


All employees receive 10 paid holidays, 13 days of vacation for the first three years service, 20 days of vacation with three to 15 years of service, and 26 days after 15 years. Additionally, 13 sick days are accrued each year regardless of length of service and employees can carry over any sick leave accumulation to the next year. Many federal employees accrue sick leave balances of a year or more during their career. The author had 2100 hours of sick leave, just over one year, accumulated when he retired in 2005. He was able to exchange his sick leave balance for an increase in his annuity payment. Military time counts toward benefits. If you have three years of military service you begin with four weeks of paid vacation. Military service time counts toward civil service retirement.

Paid Holidays:
  • New Years Day (January)
  • Martin Luther King, Jr. Birthday (Mid January)
  • Washington's Birthday (February)
  • Memorial Day (May)
  • Independence Day (July 4th)
  • Labor Day (September)
  • Columbus Day (October)
  • Veterans Day (November)
  • Thanksgiving Day ( November)
  • Christmas Day (December 25th)

Health & Life Insurance


Medical health plans and the Federal Employees’ Group Life Insurance (FEGLI) programs are available to all employees. The Federal Employees Health Benefits (FEHB) plan is an employee-employer contribution system and includes fee-for-service, consumer-driven, point-of-service, and HMO options. The costs are reasonable and the coverage excellent.
The federal government also offers comprehensive dental and vision care under the Federal Employees Dental & Vision Insurance Program (FEDVIP). Coverage is available from a number of health care providers and is competitively priced with standard and high options. The FEGLI program offers low-cost term life insurance for the employee and basic coverage for the family. FEGLI offers up to five times the employee’s salary in death benefits.
One of the primary benefits of federal employment is the satisfaction you experience from working in a challenging and rewarding job. Positions are available with the level of responsibility and authority that you desire.

Retirement System


The federal retirement system is currently based on the following: Social Security contributions, an annuity based on 1 percent for each year of service times your three highest earning years, Social Security offset if you meet certain conditions, and an employee contribution system fashioned after a 401k defined contribution plan. You can elect to contribute up to 15 percent of your salary into a THRIFT savings 401k plan. The government matches your contributions. Employees receive 1 percent automatically and they match the next 3 percent contributed by the employee and 50 cents per dollar for the next 2 percent contributed. Therefore, if you contribute a minimum of 5 percent Uncle Sam matches 5 percent. New hires should consider contributing a minimum of 5 percent to receive a 5 percent match from the government.
Contributions are tax-deferred and reduce taxable income by the amount contributed. The retirement benefit is determined by the amount accumulated during the employee’s career. This includes the interest earned and capital gains realized from the retirement fund. Visit http://federal retirement.net, our retirement planning Web site, for complete information and details about the federal retirement system.
There are many withdrawal options, including lump sum and various fixed term annuities. The THRIFT plan contribution payout is in addition to your federal retirement annuity and Social Security benefits that you will be eligible for at retirement.

 


 




                      

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