Articles are available for reprint as long as the author is acknowledged: Domenick J. Maglio Ph.D.

Sunday, July 17, 2011


By Domenick J. Maglio PhD. Traditional Realist

We are living in a new age where everything we once believed in is being replaced by modern thinking. Our culture has been turned upside down. Good is bad, credit debt is fashionable while saving is nothing more than hoarding and attempting to balance the budget is a radical political agenda.

Americans were very frugal, always saving a portion of their money no matter how little their income. A substantial savings account meant the person was stable. Things have changed.

Four decades ago we were taught that we needed to establish a good credit line. We had to buy things on time. It was like credit without a credit card. The modern businessman maximizes the using of other people’s money in order to expand more quickly. The greater the assets acquired, even with large debt, the more impressed the modern financial official is and the more likely the borrower will get the loan.

Our federal government under both political parties has accepted and resorted to this new way of thinking to enlarge the presence of the federal government. They have gone a step further in adopting a new age math to justify spending without financial assets to cover it. President George W. Bush passed a large prescription drug benefit program and got involved in two wars without funding them. President Obama has increased the federal deficit in the first two years by $3 trillion under the guise of stimulus. The double talking new age math is once again on tour with President Obama speaking with local television media across the nation to sell a budget that does not add up numerically in basic math.

The basic math number crunching has reared its head. Standard and Poore, the premier credit agency in the nation, has applied old math concepts to lower the long-term economic outlook from “stable” to “negative” in the U.S.A. People who believe math is black and white applaud the S&P’s caution while fuzzy math proponents downplayed or just disregarded it. The administration’s answer to the pending economic catastrophe is to increase taxes and manipulate numbers to arrive at a politically advantageous bottom line.

Both political parties use this deceptive math. We have learned we cannot believe either one. The Republican speaker of the house, John Boehner, said he was going to decrease federal spending by $100 billion, then it was $62.3 billion, then dropped to $38.7 billion. This supposed “cut” actually turned out to be only $352 million, not billion. Under Bush and Obama inflation was calculated by not factoring in two of the most important variables: food and gas. This means we are now at 2.7% inflation using this formula but when you add in these two items it is more realistically at 9.7%

President Obama accepted the supposed $38.7 billion compromise with the Republican, Boehner saying that it is a cut in his budget over the next 12 years and would account for $750 billion in savings. However, the old math of multiplying the two numbers $38.7 times 12 would give you $464.4 billion. The difference between the two figures is $285.6 billion, a significant sum even today.

The new age math is most conspicuous in its confusion when assessing the unemployment numbers in the United States. People not actively seeking a job are not considered unemployed under the present system of calculating the rate. Added to these convenient assumptions are two different surveys.

The CES, Current Employment Statistical, survey is based on 400,000 businesses and the much smaller sample of the CPS, Current Population Survey, uses a sample of 60,000 households. The CPS counts as employed unpaid family workers, self employed, private household workers and workers absent without pay. It is ridiculous to include the last two categories as employed.

These two different services have computer models with different assumptions and arrive at different rates. This mish mash of numbers leads to the unbelievable rate drop to 8.8% unemployment while the growth of new jobs remains below the level necessary to decrease the unemployment rate.

Aware Americans that can do basic math have had it. We know every time we go to the grocery store or pump gas that the inflation rate is rapidly rising. We know from our local communities that the unemployment rate is roughly twice the stated rate. We know that our national debt is $14.3 TRILLION and rising because of government expansion, inefficiency and corruption. Most importantly we know increasing the already outrageous high level of taxes will cause job losses and increase the size of government and our debt.

The answer to this insane spending is employing basic math concepts and by doing the following.
Congress needs to demand a balanced budget.
Employ zero budgeting to develop internal accountability and justification of all programs.
Streamline and eliminate programs that duplicate services and encourage “lazy people programs”- like food stamps for college students.
Cut out corporate welfare and their tax loopholes.
Fire people without hesitation for incompetence, corruption or not performing their duties like sleeping on the job.
Tax the 40% of citizens not paying any federal income tax no matter how anemic the amount. Everyone has to have skin in the game.

No matter how much finagling of numbers is attempted, 2 + 2 = 4. New age, fuzzy, deceptive math has to be exposed by educated people in this country or we will wake up with an economic catastrophe and a Chinese dictator calling the shots.

Dr. Maglio is the author of Invasion Within and Essential Parenting. He is a psychotherapist and the owner/director of Wider Horizons School.


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