Joe the Plumber

October 17, 2008

Joe the Plumber should stop his purchase of his future plumbing business.  Whether Joe the Plumber owes money to someone else is irrelevant.  That is his business and no one else needs to know about it nor invest their time as a concern of theirs. 

But as a general business principle I would advise Joe the Plumber to stop the purchase of the business until a more stable tax knowledge time has be seen.  If Joe the Plumber buys a business and taxes increase that would be the same as him being required to pay a higher price for the business but much worse.  If you buy a business for $2MM and the government comes along and raises taxes say 20% due to an increase in general income taxes and other health care and social security taxes you have just increased you cost of business.  If the profit on $2MM is $250,000 and the additional taxes are 10% of gross revenue for wages, etc. then this would be an additional $200,000.  This would leave $50,000 in income.  Then the extra 10% in income taxes.  Well now in essence your interest payings on investment debt wipe out any profit potential.  But at a 10% interest rate on $2Mm you would of had $50,000 per year in net profit but now you are in the hole.  

Others might say well his income is lower.  No.  That is not the way it might work.  Just because you have a gross revenue of $2MM you may be forced to pay the extra amounts in payroll taxes anyways.  Do you really think the extra taxes are going to be born by the one man show.  No way.  So after your purchase you might have to downscale your operations and you are the only one working.  The new law may not be in affect for employees under 20 but the purchase of the company has 25 employees.  Now if you downsize to 20 employees you can just barely afford an income for yourself of $30,000.  The interest expense is eating you alive.  Government changed the rules and you were caught in the middle. 

Good luck Joe the Plumber but my advise is to wait until the November 4, 2008 elections are over and then sign the contract or let the contract go and work for yourself. 

One rule of thumb is in the construction trades you will be making more money if you are working for yourself and have no employees until somewhere after you have over five employees.  And having five employees or more only guarantees headaches and in no way does it ever guarantee a profit. 

Beware if the final word.  If you think employees are expensive wait until the government shows you their bill.  They also want to get paid before or at the same time you will be paying your employees.  Beware.

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Financial Crisis Short lived.

October 17, 2008

The banking system was put into an upheaval.  Fannie Mae and Freddie Mac virtually disappeared overnight.  Major banks went under.  One day they were vibrant and the next day a bigger bank purchased the remaining assets for small amounts.  An insurance company linked with mortgage securities also went under. 

In the meantime the securities industry or should I say the stock markets in the United States and also abroad collapsed and then the next day they had an all time high for a day.  Joy and sadness, up and down.  Can anything come to the rescue.

Yes, our rescue is coming in November around the Thanksgiving time.  Stories of the turnaround will resonate for milleniums on how quickly the turnaround happened.  Innovations.  Innovations.  Innovations.  Alternative Fuel sources which were being worked on have finally claimed the headlines.  The price of oil thus is plummenting.  Happy are all in the world because the United States is happy.  Well, some in the world who are depending upon oil are not happy.  Is this temporary or this is permanent.   They are speculating.  Some airlines are worried.  They speculated on the price of oil remaining high.  They lost when the price of oil came down.  Their only hope now may be bankruptcy.  Will it work.  Can someone else in the airline industry buy them.  No, the contract is too ironclad.  No one will try.  Can the assets be purchased.  Can the landing rights be purchased.  Can the jets be purchased.  What is the new going rate. 

Detroit is working on advancing production of the GM Volt but production is scheduled for the 2010 model year.  Ford has other ideas which they are ready to put into production for the current model year.  Will this date put the Volt out-of-date.   Are the innovations from Ford going to bankrupt GM.  Will Ford buy GM.  Does GM have other innovations to apply to its list of new car development.  Will the new innovations eliminate the need for tires completely.   

Other innovations are encouraging speculators to invest in new technologies.  Will the alternative fuel industry remain alive if the price of oil goes to “rock-bottom”. 

Funneling of cash to terroist organizations seems to have stopped while individuals attempt to recover personally from years of oil production of which now has a low value.  Terrorist organizations have made advances toward a peace truce.  Can this be real.  The price of oil.  Will it hit $20 or $30 per barrel again. 

The government has started a huge project in solar to build a 20 by 20 miles solar panel in a desert.  Bids are out to the states for cooperation.  Will the final coverage be 10 by 10.  A 20 square mile coverage is supposed to be able to supply all of the electrical needs of the United States.  If 10 by 10 then other sources of electricity will be able to be encouraged for production.  Internal security I believe dictates scattered placement of electrical venues.  Electical cars will demand more and more electrical needs.  Innovative homeowners have now been allowed to pull money out of their IRAs or Roth/IRAs for home solar cell electricity sources. 

A national disaster has turned into cooperation between the political parties.  Everyone is now on board.  The unity was strengthen when two countries tried to rattle their sabers.  The unity was deafening.  They backed off.  The strength of a United United States was too much for them to overcome.

It only took a short time for years of struggling innovations to come in the forefront of completion. 

Medical innovations or alternative medical innovations have also been developed and abundant amount of cures to once struggling medical science will soon be common place cures.  Who needs to worry about health insurance.  It is almost like you just need to eat an apple.  The solutions are readily available. 

The greatest times of the United States are yet to come.  Keep innovation compounding.  And if you don’t believe this then pray God will quickly answer your prayers.  When a nation prays, God listens.   Or better yet look at www.kimclement.com for a more precise knowledge of what “will” happen.


Unconstitutional Bailout!!

October 3, 2008

The Constitution of the United States specifically mentioned that all bills concerning taxes and revenues shall initiative first out of the House of Representatives.  From what I have heard from the radio there are tax and revenue provisions and the Senate has passed and sent a copy of their bill for the Mortgage Interest meltdown to the House of Representatives.  This is Unconstitutional and all members of the House should vote NO-NO-NO!!! on this bill. 

If they do not then this could be considered as a precedence for the Senate writing tax and revenue law in an emergency session because the House does not run fast enough.  It takes less effort for 100 to agree than a massive 400 + to agree.

Beware of the precedence.

Section 7. All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.

Every bill which shall have passed the House of Representatives and the Senate, shall, before it become a law, be presented to the President of the United States; if he approve he shall sign it, but if not he shall return it, with his objections to that House in which it shall have originated, who shall enter the objections at large on their journal, and proceed to reconsider it. If after such reconsideration two thirds of that House shall agree to pass the bill, it shall be sent, together with the objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a law. But in all such cases the votes of both Houses shall be determined by yeas and nays, and the names of the persons voting for and against the bill shall be entered on the journal of each House respectively. If any bill shall not be returned by the President within ten days (Sundays excepted) after it shall have been presented to him, the same shall be a law, in like manner as if he had signed it, unless the Congress by their adjournment prevent its return, in which case it shall not be a law.

Every order, resolution, or vote to which the concurrence of the Senate and House of Representatives may be necessary (except on a question of adjournment) shall be presented to the President of the United States; and before the same shall take effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the rules and limitations prescribed in the case of a bill.


Financial Crisis II

October 1, 2008

When the Pilgrims landed at Plymouth Rock they set up a system whereby the strong and the weak shared equally in the bounty produced during the prior year.  After many deaths the next year the families which produced the most kept the most. 

Communism was tried in America.  It has been proven to fail.  This bailout plan is a direct repeat of the first year experiment at Plymouth Rock.  If a set-up from a free market system is set-up this will make America stronger and the individual stronger.  The strong produce and if they want to help the weak then that is up to the individual or private organizations which get contributions by the individual.  At Plymouth Rock the strong produced more and all collectively produced more.       

No bailout for the weak.  They really won’t die but actually they will become stronger and not weaker.

The free enterprise system worked at Plymouth Rock and the weak were stronger and produced a minimum for themselves.  The strong produced more than what they individually needed for their family.  Abundance succeeded from the free market system and abundance failed from the communistic system of sharing equally.