New Jersey schools to teach Finance 101 classes for high school seniors.

A bill has passed the state legislator in New Jersey that will require high school seniors be taught how to write a check, manage credit card debt, and obtain a mortgage.

It’s amazing they were not already being taught this stuff. I remember learning this stuff when I was in 8th grade and a freshman.

Of course leave it to a Democrat to express concerns about the added requirement.

Sen. Jim Whelan, D-Absecon, is worried about adding requirements to the curriculum without extending the length of the school day.

Of course what Whelan is really worried about is the idea of people actually being able to take care of themselves without the help of government. See that would be a loss of power.

Our Tax System Explained: Bar Stool Economics

This has been around for a while, but still holds true. Everyone says our tax system and economics is complex. Well this professor of economics does a great job breaking it down into laymen terms. Everyone should be able to understand this. Hopefully you will understand the tenth man has left the table in many places. You can only rob someone for so much and so long before they find somewhere else to do business.

Suppose that every day, ten men go out for beer and the bill for all tencomes to $100. If they paid their bill the way we pay our taxes, it would gosomething like this:

The first four men (The poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with thearrangement, until one day, the owner threw them a curve. “Since you are allsuch good customers,” he said, “I’m going to reduce the cost of your dailybeer by $20.” Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so thefirst four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers? How could theydivide the $20 windfall so that everyone would get his ‘fair share?’

They realized that $20 divided by six is $3.33. But if they subtracted that fromeverybody’s share, then the fifth man and the sixth man would each end upbeing paid to drink his beer. So, the bar owner suggested that it would befair to reduce each man’s bill by roughly the same amount, and he proceededto work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued todrink for free. But once outside the restaurant, the men began to comparetheir savings.

“I only got a dollar out of the $20,”declared the sixth man. He pointed tothe tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10 backwhen I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. Thesystem exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat downand had beers without him. But when it came time to pay the bill, theydiscovered something important. They didn’t have enough money between all ofthem for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, this is how our tax system works. The people who pay the highest taxes get the mostbenefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

By David R. Kamerschen, Ph.D.Professor of Economics University of Georgia

For those of you who understand this concept no explanation needed. For those of you who don’t understand this there is no explanation possible.

Big T's Suggested Reading and Viewing from around the Web

I always like to turn to an expert during a crisis. Here is what economist Thomas Sowell has to say about the bailout. He says politicians that caused the problem thinks they can fix it…hmmm where have I heard that before? Excellent reading as always.

Here is another economist from Harvard. He says bankruptcy, not bailout, is the right answer.

The IEA says that supply and demand is responsible for oil prices, not speculation. Wow…genius!

Here is a letter to the editor from a man who was no doubt educated in a government school, or perhaps he just slept through the part of economics were they explained the difference between profits and profit margins. Do they even teach that in government ran schools?

American Workers Suffer as US becomes home to highest corporate taxes in World

According to a new study from the Tax Foundation the U.S. ranks second in the World, trailing Japan for having the highest corporate taxes. On a more disturbing note 24 states ranked higher than Japan on the list. Iowa having the highest corporate tax rates in the World at 41.6%

States known for their fairly low state-level corporate tax rates such as Nevada , South Dakota , and Wyoming was still higher than France and 25 other countries at 35%

32 states have a combined corporate tax rate higher than third-ranked Germany , 46 states higher than fourth-ranked Canada and all 50 states were higher than fifth ranked France .

This could be one of the reasons for a failing economy. It is definitely a reason for jobs leaving the US .

“This is startling news for America ’s business and workers,” said Tax Foundation president Scott Hodge. “Tax competition for jobs and investments is fierce, and the US continues to fall further and further behind. Our states should be the world’s leaders in many things, but high taxation should not be one of them. The high federal corporate tax rate is literally crushing states’ competitive abilities. That means fewer jobs for American workers.”

Don’t expect this new study to get much play in the mainstream media. Why? Well because taxes are boring, and stories like Obama and his pastor, or a real good sex scandal will always get better ratings than taxes. Plus the media really just doesn’t want you to know or understand these things. It goes directly against the liberal agenda that we need higher taxes on evil corporations.

This study rejects that idea and shows that a lot of US states are taxing the providers of jobs higher than any other developed country in the world. Anyone who knows the slightest thing about economics will immediately see this could be a problem.

Those who have read my writing for a while know I have always made the claim workers suffer the most when their employers are forced to pay high corporate taxes, but don’t take my word for it. In a related study the Tax Foundation found workers bear 70% of the burden of corporate income taxes.

You want to bring jobs back to America ? You want to revive the economy? Here is a crazy idea, how about the FairTax? It would make the US corporate tax system the most competitive in the world by eliminating it. Imagine how many jobs would flock to America if there were no corporate taxes.

Who says we're in a recession and what exactly is it?

In just the last few months, the economy has become the topic of many conversations. The word recession has been used 141 times in the Congressional Record this year and it is only May. Even presidential hopeful John McCain said Monday he believes the country is in recession, adding “these are very, very tough times in America.”

So what exactly constitutes tough times in America, and what exactly is a recession? Are we really in a recession?

If you were to take an economics class you would learn that a recession is a decline in a country's real gross domestic product or negative real economic growth, for two or more successive quarters of a year. That is the text book definition.

So if you go by the text book definition, we are not in a recession. We have come close to the text book definition, but not quite there.

Of course the text book definition isn't good enough to determine if we are in a recession or not. In the US we have something called the Business Cycle Dating Committee of the National Bureau of Economic Research. This seven person panel is who decides whether the US is in a recession or not. I guess the text book definition was not good enough.

Anyways, it turns out that three members of this committee are also contributors and advisors to either John McCain and Barack Obama.

So why is this such a big deal? Well, because right now the economy is the number one issue on the campaign trail, and America goes into “economical shock” when they here the word recession. Knowing that, do you suppose there might be some political motivation for and against labeling the economy in a recession? I think so. No political party has ever retained the presidency when the country was in recession. It would be safe to say John McCain has a lot riding on this panel.

Of course the members of the panel promise us their political considerations do not enter into their calculations. Uh....sure...advisors to political campaigns would never have political considerations.

Big T's Suggestested Reading and Viewing from around the web.

According to a newspaper in Britain the US is now in a Great Depression…It isn’t that bad yet…hard times are a coming though.