Covers of Time

An interesting comparison of the various covers of Time magazine over at FAIR, and I suspect you could make such a comparison just about any week.

NYT on taxation levels

As if to prove what I was saying a few days ago – that low taxation is in fact the main cause of US debt and that raising the peak tax rate is the quickest and easiest way to solve the problem – the New York Times has produced a chart showing how the debt has come about over the past two presidents.

I was not aware that Obama's stimulus package does not even make up half the value of Bush's tax cuts for the rich, and that Bush's tax cuts actually even exceed what was spent on the wars in Iraq and Afghanistan.

Plagiarism update -- German sense of humor

Quite a bit has been happening in the past few weeks in Germany's ongoing plagiarism saga. First, CDU politician Bernd Althusmann will apparently soon face official plagiarism charges from his university. Second, FDP politician Chatzimarkakis has definitely lost his doctorate – and says he will be writing his dissertation again. Third, FDP politician Margarita Mathiopoulos is once again having her dissertation reviewed. Fourth, SPD politician Uwe Brinkmann has lost his doctorate on charges of plagiarism.

And finally, FDP politician Koch-Mehrin, whose doctorate was also revoked because of plagiarism, is taking her university to court because, as she sees it, they should've caught her back then and it's too late now.

And you thought Germans didn't have a sense of humor...

Balancing the budget

If you haven't seen the Budget Hero yet, it is a sort of online game that you can use to make decisions about how to balance the US budget. 

Personally, I find it hard to use (if I want to replay it to change some things, I have a hard time getting it started again, and it seems hard to get the thing to play right away without instructions), but my main problem is the lack of options. It seems that the programmers merely put in a few options that are on the table without allowing you to change things that neither the Democrats nor the Republicans currently propose.

For instance, the first thing I would do is start gradually raising peak tax rates for the rich back up to the levels we had during the baby boom years, for instance under Republican President Eisenhower. As Robert Reich has pointed out, the peak tax rate was 91 percent back then. Note that this would not affect the middle class much – only the people who are able to pay more in taxes would pay more.

The problem with our budget deficit is that we have reduced tax revenue over the past three decades even as we increased spending.

Budget Hero does not allow me to change the peak tax rate, though it would be informative to see how that would affect the budget deficit. In my attempt, I managed to postpone US bankruptcy until 2032 – but we still went bust. In other words, there is no plan on the table for the US to get out of the red.

Here it is if you want to give it a go.

Related articles

• You can be a federal budget hero! (dontmesswithtaxes.typepad.com)
• Budget Hero: (Educational) Game Battle (buzzfeed.com)
• 'Budget Hero' game lets you try to balance the budget (usatoday.com)
• Budget Hero 2.0: Fun with debt ceilings! (news.cnet.com)
• "Budget Hero" video game gives players shot at managing national debt (cbsnews.com)
• THE TRUTH ABOUT TAXES: Here's How High Today's Rates Really Are (businessinsider.com)

German rating agency

I recently talked about rating agencies, and it turns out that there is one in Germany, though it is hardly known – and lo and behold, the German one has a different rating for the US. If you can read German, this press release (PDF) from June 8 announces that Feri has changed its assessment of the US from AAA to AA.

I can't really assess this, but as I stated in my previous post, I also cannot understand why the big three US-based rating agencies give countries like Greece and Portugal (much less Ireland, which has actually turned things around) such a bad rating while the US remains AAA.

If anyone knows of any other rating agencies in the EU, I'd be interested in hearing about them.

Desk chair

Over at her blog, my colleague Jill Sommer talks about the importance of a good desk chair, and I couldn't agree more.

I believe I bought this chair to the left around six years ago. It cost a fortune (easily four figures in euros, but I'm not quite sure anymore, and it doesn't exist on the web), but it is worth it.

My previous chair looked very much the same but broke after about five years, and the leather was already looking worn down. It was from Ikea and cost around 300 euros, if I remember correctly. Ikea no longer offers it.

This one is going strong, and as you can see the leather is not worn down anywhere; there are only a few creases.

I should admit, however, that I practically stopped using the chair a year ago, when I started sitting on the sofa with my laptop. The sofa is not good for everything (such as using two screens), but for 90 percent of the work that I do, it's just me hammering out sentences, so the sofa is great.

All of this is terrible for your muscles, so there's no substitute for yoga twice a week.

Japan rocks, part II

Japanese defender Aya Sameshima, a real sweety-pie

Today is Ocean Day in Japan, and my Japanese friend I watched the game with last night says that everyone goes out to the beach today.

I expected the final of the women's World Cup to be exciting, but it exceeded my expectations. I saw Japan shut down undefeated Sweden, and I saw the US rally back against Brazil and France. Lots of commentators over here compared Japan to Barca, confirming my impression that they controlled the ball with short passes a bit like the Spanish national team. So I expected Japan to dominate the game, but if any team could pull victory from the jaws of defeat, the US could.

In fact, Japan was lucky to still be in the game after the first 15 minutes, and it was them who rallied back, though they never managed to control the ball the way I expected.

My Japanese friend says that two of the players on the national team are actually from the Fukushima area. One of them is left defender Aya Sameshima, who is a joy to watch – and look at. Since her team's facilities were destroyed, she apparently moved to the US and now plays for Boston.

So congratulations to the Japanese, and I hope you enjoy your day off at the beach.

Rating agencies

Maybe someone can help me out here. I have been looking for a chart that provides a quick comparison of countries like the US, Ireland, Portugal, Greece, Italy, etc. to get a better understanding of why a particular country gets in trouble (pretty much every EU country listed) with rating agencies and another (the US) doesn't.

There is some material out there, such as the chart to the left from here, showing that the US is one of the worst performers according to a single parameter (national governmental debt per capita in euros – the figure reportedly rises to around 250,000 euros per capita if we include debt at all levels of government and include private debt [see the second chart below from here]), but part of the problem is that the criteria on which the three major rating agencies, all of which are based in New York City incidentally, are not actually known, so it would be hard to come up with an exhaustive chart.

I can tell you that the general sentiment over here in Europe is that these rating agencies are run mainly by a number of large US investors with a preference for their interests in the US – hence the double standard. It is hard to come up with financial figures demonstrating that the United States is currently in a much better financial position than the European countries currently under attack. But if you know of any such articles, feel free to drop me a link in the comments below.

It is worth keeping in mind an article from the Washington Post from 2004, which essentially describes these rating agencies as a kind of mafia. They go door to door to companies offering to give them a free rating along with a request that the company should pay for these ratings at some point in the future. If the company repeatedly refuses to pay, the rating agency goes into full-attack mode and severely downgrades the company's stock. Such attacks are especially egregious when the rating agency that the company actually pays continues to give the firm a good rating.