Feeling down about economy?

This picture shows how we stand in the 3rd quarter of 2008 compared to the past 28 years on key economic indicators. The original article explains these figures in more detail.

I.O.U.S.A. & W.

Recently I went to see W. at a theater. It is a well shot film, and I walked out the theater not feeling much about the movie or the charcters portrayed in it. It does give a perspective on George W. Bush and the path he has walked so far. The film has a neutral flavor to it such that it is not trying to cast a judgement on Bush being a good or a bad guy, but only to show as a matter of fact, what shaped him into the president he is today.

Yesterday I caught a chance to see I.O.U.S.A. at a local college screening. There was only about 10 people in the auditorium; I thought it would be full. The film is a documentary, but it painted a picture for the US financial future that is so bleak that made me cringe. It was a powerful message, purposely made to act like a wake up call to Americans. Some parts of it are exaggerated, but it is overall informative and gets the message through. It tells us about our federal budge deficit and how today's situation compares to all other times in the history of the United States. It gives some projection for the future and claims that if we don't do anything to change the course, the government will be paying social security, medicare, military, and the interest on the federal debt and have no money for anything else by 2030. Most likely income tax will have to double and a lot of the government programs will have to shut down. By that time, the fed won't be able to fulfill its social security promises and thus bankrupt.

I recommend you see both of these movies. If you care about your future, get your voice out there and vote. Some people have doubts about whether their votes will matter or not. Think about it, if enough people think this way and end up not voting, then it will surely matter. So everyone should vote unless they don't care about their own future.

Obama the Wealthy?

You can find out how much money each political candidate has raised in their campaign by going to the Federal Election Commission website. The Obama campaign has raised more than $450 million vs. McCain's $210 million. There is some debate about the public financing for the presidential election because Obama decided to not take the taxpayer public fund that comes from the $3 you and I check on the income tax return form. He instead raises funds separately, asking individual contributors to give small amounts each. McCain decided to take the public financing fund, which limits his direct spending to around $84 million. McCain needs to rely on the $66 million raised by the Republican National Committee for his campaign agenda. Obama does not need to rely on the Democratic party, which I think makes him more independent and free to choose his campaign style.

The individual donations you can make to the candidates is limited to $2300 for each election. Obama said that the public financing system is broken and he opted for a more democratic way of financing the elections. Although the intent of the public financing system is to ensure each candidate gets to spend the same amount of money for fairness, we know that there are ways to circumvent it so that someone other than the candidate can spend money for campagining on the candidates behalf. Some argue that this leads to nastier and dirtier campagin styles with negative ads toward opponents. I don't agree with the $3 donation on the income tax form because I think we should choose specifically who we want to support and when and how much we want to donate. If it is just $3 and goes equally to every candidate before I even know who the candidates are, then I don't feel justified to check that box. The Obama model is better because nowadays a lot of people in the US have connections to the Internet and have credit cards, which makes it a lot easier for everyone to donate.

If someone donated to support a candidate, that person is likely to vote, so this is also a good way to get people involved. I checked the list of donations for my zip code, and I see only a handful of names. Only a very small percentage of people care enough to actually donate.

Obama has enough cash on hand so he bought some half-hour blocks of primetime TV for his campaign for later this month. I am curious what they will do with that time.

Raising Public Awareness

Recently a few movies caught my attention. W. is coming to theaters on Oct. 17. It is about the life of our current president, George W. Bush, and how he came to where he is now. I think it is interesting because despite all the negative things said about him, he still served as the president of the US for 8 years, and I really don't know much about him. I wish the movie can give the viewer a honest look at Bush's life and his time in the White House.

W. reminded me of another recent movie, I.O.U.S.A., also a movie with a title that ends with a period. This movie is a documentary made by the Peter G. Peterson Foundation (PGPF), and it talks about our national debt and how it is a huge problem for our future if we don't do something about it quickly. I wanted to watch it when it came out in August 2008, but it was only shown in major cities like New York and Philadelphia, not close to where I live. Fortunately it will be shown at Union College on Oct. 23rd so maybe I can get a seat at that showing.

The gist of it is that Americans and the US government have been living on borrowed money for decades, savings rate has gone down the drain, and as the Baby Boomer generation starts to retire, we will not be able to continue to fund our government programs and health care benefits and everything else by borrowing more from other countries. Just recently on Sep. 30, the National Debt Clock in New York City ran out of digits to display the $10 trillion figure. When they made the display in 1989, they didn't anticipate that the debt will go over 13 digits. Actually, if you include outstanding Social Security and Medicare benefits that are due in the future, the debt is close to $53 trillion. Currently we don't know how we are going to fund these benefits.

Something I learned today is that David Walker is now PGPF's CEO and he is trying to raise public awareness on issues that will affect the future generations of Americans. David Walker was the US Comptroller General from 1998 to March 2008, and he must have seen and understood the problem in the federal government when it comes to budgets and spending.

There are also some related books on this topic: Empire of Debt and I.O.U.S.A.

Recent Highlights

China successfully completed its first space walk 340km above the Earth surface. China plans to continue space technology development, put a space station in 2010-2020 time frame, and eventually a mission to the moon.

US space programs will get $17.6 billion for 2009. They continue to explore the origin and future of the universe and looking for Earth-like planets. There are plans to put a base on the moon to facilitate missions to Mars and other destinations. Well, the US budget is $2,700 billion, so we really aren't trying very hard in the space programs. The NASA budget grows on par or less than the inflation.

Warren Buffett, a wealthy investor, recently went shopping. He got good deals with $5 billion of Goldman Sachs and $3 billion of GE in preferred stocks. Response to this is two-sided. Some people think that if Warren Buffett is investing in these firms, they must be doing well. Some think that if these firms so desperately need cash, they must be in trouble. I think Warren Buffett is not stupid, and he is looking at the long-term prospects of these companies, so that just means he thinks the current price is cheap. Warren Buffett also said the congress needs to pass the bail-out plan.

Today the House of Representatives passed the revised bail-out plan 263-171. It was quickly signed into law by Bush. The bill authorizes $1.8 trillion from the government to help the economy. Reuters has a detailed coverage on this: http://www.reuters.com/news/globalcoverage/creditcrisis

The senate bill is 451 pages long and I wonder if each House Representative actually gone over it all in detail before voting yes. There are items in there that doesn't help the economy, like tax cuts for wooden arrow companies, rum industry, and renewable energy tax credits. They call these small items sweeteners, or "pork". Nonetheless, these items are valued at hundreds of million dollars each. The $700 billion of buying power that is granted to Secretary of Treasury is just scary, because Henry Paulson can now appoint whoever he wants to be the asset managers and buy anything he thinks would help the economy. We don't really know if this new law is going to help the US economy, and the potential for fraud is great.