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Here are some interesting statistics on the housing prices in San Diego:

• “San Diego County’s high housing prices, coupled with its relatively low wages, make it the second least affordable area in the country, the National Association of Home Builders reported.” (San Diego Union-Tribune, 1/7/05)
• The average new detached home in San Diego County sells for $781,000, the average new condominium for $490,000 and the average condo conversion unit for $303,000. (2/28/05, San Diego Business Journal/MarketPointe Realty Advisors.)
• San Diego County’s resale single family homes are at a record high median price of $530,000; the median resale price for condos is $380,000. (SDUT/DataQuick Information Systems, 2-11-05)
• The median price of housing in San Diego doubled between 2000 and 2004, but the median household income only increased 10.4 percent. (SDUT, 10/31/04)
• Just 11 percent of households are able to purchase the median-priced home, according to the California Association of Realtors. (North County Times, 2/11/05)
• According to the National Association of Realtors, “The median price of a single-family house [in San Diego] has increased $152,700 in the last year, or $418 per day.” (SDUT, 8/31/04)
• “’San Diego’s Housing Market is one of the most inflated in the country – a detrimental factor in terms of recruiting and retaining employees,’ said Kristine Norquist, Communications Manager for the San Diego Regional Chamber of Commerce.” (The Daily Transcript, 2/18/05.)
• “’Housing prices are too high for middle-income people,’ said Larry Fitch – the president of San Diego Workforce Partnership. ‘People are now living in Tijuana and Riverside and putting stress on our roads commuting to their jobs because they can’t afford homes in San Diego, and some people are leaving the area.’” (SDBJ, 1/17/05)
• Families have to make nearly $135,000 to afford median priced homes in San Diego. In other words, the median income of San Diego households is less than half what is needed to buy a median priced home. “The monthly income needed to buy a median-priced home in San Diego County rose to $134,420, from $109,130” from December 2003 to December 2004. (NCT, 2/11/05)
• In San Diego, 29 percent of residents are considering moving out of the state because of high housing prices, according to the Public Policy Institute of California. (SDUT, 11/18/04)

Los Angeles housing prices are very similar.

This goes to show the basic rule of supply and demand. Many people argue that house prices are too high and that the government should step in and do something about it. Yes it is expensive and no the government should not step in and intervene. Let the economy work itself out or move to where it is more affordable. Evidently, it is affordable if people are buying property like hot cakes at their current high prices.

People also mention about a housing bubble out here in San Diego, something similar to the San Jose’s (Silicon Valley) housing bubble. I think San Diego is different. Unlike Silicon Valley, San Diego is very diverse on income where as Silicon Valley’s primary income was the technology market. I am not saying that the housing in San Diego will not go down, I am saying it will not go down by much.

Here are some good facts on unemployment during both the Clinton and Bush administration:

February 1997 Under Bill Cinton:

11.3 = Unemployment rate among African-Americans.
8.1 = Unemployment rate among Latinos.
4.5 = Unemployment rate among Whites.

February 2005, Under George W. Bush:

10.9 = African-Americans.
6.4 = Latinos.
4.6 = Whites.

Percentage says it all…

HatTip to PoliPundit and Hispanic Pundit.

Within 48 hours of taking office, Romania’s new prime minister issued an emergency edict and now companies and private citizens pay a single tax rate of 16 percent. Before, paying a flat tax rate was uncommon. But now, countries like Latvia, Lithuania, Ukraine, Russia and Serbia are not paying a flat tax rate. Here are some excerpts taking from this article:

Fair question. A flat-tax system is easy to set up and simple to administer—powerful attractions for any country with a weak tradition of tax collection. It also encourages the tax-paying habit. Why risk the penalties of working in the black economy when, as in Russia, the taxman wants just 13 percent of your earnings? “Set the rate low enough and it just isn’t worth going criminal,” says Madsen Pirie, of the Adam Smith Institute in London. The Belgian entrepreneur paying 50 percent on the top slice of his income might be tempted to hide his cash offshore; not so his Slovakian equivalent.

I am pretty sure there are some pros and cons to this flat taxation, which is unknown to me at this time. But evidently, it is working for some countries. If all goes well with paying a flat tax rate, I am pretty sure the U.S. will consider and maybe even implement one day. Like flat taxes, privatizing social security was once a concept that is now being supported by the U.S.

(Link found from the Adam Smith Institue)

There are many people yelling about the high prices of drug cost which leads some Americans to do illegal things like purchase prescription drugs at Canadian prices over the Internet. Being that this transaction is illegal, many Canadian drug manufacturers start restricting supplies to online pharmacies that export drugs to the U.S. These drug manufacturers are threatened by having their license pulled away if they continue to do this. Also, the Canadian drug market is so small that if all Americans go and purchase drugs in Canada, Canadian supply would run out in about a month. That would lead to higher prices close to U.S levels.

There is some data that goes to show that generic drugs or over the counter (OTC) drugs in the U.S. are actually cheaper than Canadian and other countries drugs.

For example, a study by the consulting firm Palmer D’Angelo found that Canadians pay more than twice as much as Americans for Canada’s 27 top-selling generic drugs. This is consistent with research conducted by the federal Food and Drug Administration (FDA). For five of seven generic drugs studied, the FDA found that Canadians pay more than Americans do; in some cases two to three times more. [See the figure.] Considering that half of all drugs sold in the United States are generic, it is surprising how little attention has been paid to them in the reimportation debate.

Wharton economists Patricia Danzon and Michael Turukana have found a similar pattern for OTC drug prices overseas. In France and Italy, OTC drugs sell for more than four times the U.S. price. Prices in Japan are three times higher, and in Germany, twice as high.

Here are some reasons why Canadian generic drug prices are so expensive:

Since brand-name drugs are principally produced by foreign manufacturers, the Canadian government willingly imposes strict price controls that benefit Canadian consumers. In the generic market, however, Canadian producers dominate. In fact, two companies (Apotex and Novopharm) account for more than half of the total Canadian generic market.

Through regulation, therefore, the Canadian government protects its generic producers from lower-priced American competitors — at the expense of its own citizens. Where it has no domestic producers (for example, brand-name drugs), it flexes its muscle to push prices down.

This is why it is good to let medicine R&D companies and manufactures to develop new medicines and get their profits before their patent expires. This way, there is an incentive for these companies to produce good medicine and once their patent expires, other companies can make generics of that brand, which will lead to cheaper prices for the public.

On February 1, Laurie Kellman reported Medicare’s decision to cover “sexual performance drugs such as Viagra” in their new prescription drug program. Therefore, one can use taxpayers’ hard earned money just to enhance their sex life. Is this fair for taxpayers? I think not. There is no reason why Medicare should fund sexual performance drugs at taxpayers’ expense. If they fund sex performance drugs, then why not finance cosmetic surgery or any other non-health related treatment or drug? Where would it stop? Next, they will be funding penis enhancers! I am pretty sure there are many other more important health programs or even non-health programs that needs funding. Funding sex performance drugs is more of a luxury and not a necessity. And when it comes to taxpayers’ dollars, funding should only be for necessities.

President Bush proposed a $2.57 trillion budget over the next five years which will try to reduce the deficit. Some of these cuts include cutting non-security domestic spending (excluding automatically paid benefits like Medicare) by nearly 1 percent, forty-eight education programs, oil and gas research, and grants to communities hiring police officers.

Bush would slow the growth of benefit programs by $137 billion over the next decade, nearly quadruple the savings he proposed a year ago with little success. Chief among the targets would be Medicaid, the federal-state health insurance program for the poor and disabled, but farmers’ payments, student loans and veterans medical services were also on the chopping block.

“It’s a budget that focuses on results,” Bush told reporters after meeting with his Cabinet. “The taxpayers of America don’t want us spending our money into something that’s not achieving results.”

Well, if the programs that are being cut because they are not producing results, then it need to be done.

If you wonder how the government get so much taxes out of tax payers, Ronald Trowbridge, Ph.D and a fellow at the Texas Public Policy Foundation, will give you a couple of reasons:

• Reduce consciousness of pain. It was a brilliant tax collector, indeed, who thought of the scheme to withhold taxes automatically from our paychecks, thereby reducing the consciousness of payments. Were we instead given the gross amount of our paychecks with the requirement that we pay taxes after the fact, we would be made painfully aware on a regular droning basis of how much tax we pay. But when the government withholds our taxes in advance we don’t miss what we never had.
• Reduce consciousness of pain. It was a brilliant tax collector, indeed, who thought of the scheme to withhold taxes automatically from our paychecks, thereby reducing the consciousness of payments. Were we instead given the gross amount of our paychecks with the requirement that we pay taxes after the fact, we would be made painfully aware on a regular droning basis of how much tax we pay. But when the government withholds our taxes in advance we don’t miss what we never had.
• Use the shell game shift. Political leaders tend to tax us to the highest threshold of acceptable pain. Property taxes have reached that threshold in Texas. To reduce our pain, they try to shift some taxes to a new tax (income tax) or to an existing tax (sales tax). This is called “fair tax reform,” but there are two fatal flaws here: one, there is no aggregate reduction in taxes; two, the alternative avenues of taxation eventually rise to the highest thresholds of pain.
• Change the terminology. Government leaders will reduce or eliminate, for example, homestead exemptions, calling such a “tax shift” rather than “tax increase.” Your taxes increase, but this they argue with a straight face is not a tax increase. I kid you not, this is precisely what happened recently when I lived in the state of Maine.
• Change the terminology. Government leaders will reduce or eliminate, for example, homestead exemptions, calling such a “tax shift” rather than “tax increase.” Your taxes increase, but this they argue with a straight face is not a tax increase. I kid you not, this is precisely what happened recently when I lived in the state of Maine.
• Change the terminology. Government leaders will reduce or eliminate, for example, homestead exemptions, calling such a “tax shift” rather than “tax increase.” Your taxes increase, but this they argue with a straight face is not a tax increase. I kid you not, this is precisely what happened recently when I lived in the state of Maine.
• Make it a wash. Now that Texans can deduct sales tax in itemizing for Federal taxes, many Texan officials, always wanting more money, are asking for a percentage increase in the state’s sales tax. Such, they argue, would only be a painless wash.

I completely agree with Ronald Trowbridge about the scheme of withholding taxes automatically from our paychecks. I think the better approach is to go exempt and pay taxes quarterly (or something to that extent). That way, people really can see how much they pay in taxes. Also, you could make a couple of dollars from interest on your set aside tax dollars.

Here is a perfect example that tampering (hiking) with minimum wage is not always the best idea. Every company optimal goal is to reduce business cost. Hiking minimum wage increases business cost. So, what is a company to do to replace their lost revenue? Well, a McDonalds in Oregon has the solution. When a customer drives up to the drive-thru window, the customer is not speaking to someone that works at that McDonalds, but to someone in North Dakota that makes more than $2 less than the minimum wage in Oregon.

HERMISTON, Ore. —
The McDonald’s restaurant in Hermiston, Oregon appears to be “outsaucing” customers drive-thru meals.

The restaurant on Highway 395 has outsourced one of the most important jobs at the drive-through window — order taking.

When a customer drives through, they’ll be patched through to Grand Forks, North Dakota to place the order. Why? Because the minimum wage in North Dakota is $5.15, compared to Oregon’s $7.25.

Tim Nesbit is head of Oregon AFLCIO. He says this undercuts Oregon’s minimum wage by more than $2 an hour.

A McDonald’s media relations person in Illinois, where the corporate headquarters is based, never returned a phone call to the AP.

When you hike up minimum wages, employers feel you should have a higher skill set. And evidently, the McDonalds in Oregon do not feel that the work it takes to operate a drive-thru is worth $7.25, but rather worth $5.15.

The Congressional Budget Office (CBO) shows that runway spending is causing today’s budget, not President Bush’s tax cut. CBO estimates that federal tax revenues will total $2.057 trillion for fiscal year 2005, which is $177 billion more than collected last year (a 9.4 percent increase) and $66 billion more than collected in fiscal year 2001 (a 3.3 percent increase), which was former President Bill Clinton’s last fiscal year.

Looking at the revenue and spending patterns over the past four years clearly shows that President Bush’s tax cut is not the reason for today’s deficit.

By contrast, the total federal spending has increased $562 billion since fiscal year 2001.

According to John Goodman, president of the National Center for Policy Analysis, socialized medicine makes promises it cannot keep:

• Health care as a right: Not only do patients have to wait for care, but if they are the hundredth person waiting for an operation they are not entitled to the hundredth surgery.
• Better quality of care: Due to better access to technology, Americans enjoy two or more times as many procedures per capita — such as renal dialysis, coronary bypass, and coronary angioplasty — than their counterparts in Canada and Britain.
• Better efficiency: Among women diagnosed with breast cancer, only one-fifth die in the United States compared to one-third in France and Germany and almost one-half in Britain; similarly, Americans enjoy significantly better outcomes for prostate cancer.
• Equal access to health care: While minorities in the United States are underserved, this is also true for native populations in Canada; elderly patients are frequently discriminated against in socialized systems, which prefer to serve younger patients.

Goodman also says the American system is far from perfect.

Economic Efficiency Score, developed as a Ph.D. dissertation by University of Delaware student Martin Kennedy, is used to measure how economically efficient congressmen are by measuring a score number between 0 and 100, 100 being the most economically efficient. The efficiency was done by the number of votes on economic legislation that would yield nationwide benefits greater than costs and those that would have nationwide costs greater than benefits.

Results:

The economic efficiency scores don’t paint a pretty picture about our elected representatives. The highest score held by a Democratic House member (48) was jointly held by Barney Frank of Massachusetts, Earl Blumenauer of Oregon, Ron Kind of Wisconsin, and Ralph Hall and Charlie Stenholm of Texas, who all voted for efficiency-enhancing legislation 48 percent of the time. The highest score for a Republican House member (87) was jointly held by John Shadegg of Arizona, John Sununu of New Hampshire, and Tom Petri and James Sensenbrenner, both of Wisconsin. In the Senate, the highest score (64) held by a Democrat was held by Blanche Lincoln of Arkansas, and for a Republican, it was Richard Lugar of Indiana (91). The average Econ-E Score was 20 for Democratic House members and was 54 for Republicans. The average for Senate Democrats was 40, and for Senate Republicans, it was 69.

Walter E. Williams goes to say:

When you vote for a member of the House of Representatives or the Senate, what should be your selection criteria? I’m all too afraid that most Americans, were they to be honest, would answer that they’d vote for the person who has pushed or will push for legislation that benefits them, their community, their city or their state. They couldn’t care less about or completely disregard the harm that the legislation does to other Americans in other communities, cities or states.

Once again, I found another article showing that the Kerry family paying way below their tax bracket. Last year, Kerry and his wife made $5.5 million for the year and only paid 13.4 percent in taxes. According to the new Bush tax cut, Kerry should only be making between $6,000 to $27,050 a year. Do you see the irony in Kerry? Kerry is promoting all this taxing the rich (those who make over $200K a year) when he is not even paying his fair share of taxes. To make matters worse, his dynamic dual, Mr. John Edwards and his wife only paid 5.1 percent in taxes of their reported $434,000 income. And the liberals of this country want these two men as president and vice president. President Bush and his wife only make 15% of Kerry’s Family income and they paid more than double in taxes than Mr./Mrs. Kerry at 27.7 percent. This article goes to ask a good question on how does John Kerry justify proposing a tax rate for himself that is less than half of what he expects many young professionals and small business people pay?

It seems like Senator John Kerry has been misinforming people about the job loses under the Bush administration. Studies show that household surveys of employment have actually increased by 1.69 million jobs from January 2001 to September 2004.

In their final debate on October 13, Senator John Kerry claimed that the U.S. had lost 1.6 million jobs while President George W. Bush has been in the White House.

Let’s first look at the payroll survey. This is the favorite of those seeking to criticize the President on the economy. In January 2001, the payroll survey registered 132.388 million employed. As of September 2004, the latest data available, the number stood at 131.567 million. That is a drop of 821,000. That would be half of what Kerry claimed.

Whether it’s a decline of 800,000 or 1.6 million, this isn’t great news. However, the payroll survey only paints part of the jobs picture, specifically, employment by larger and/or established firms. What’s missed are the start-ups and the self-employed. In an increasingly entrepreneurial economy, that means a lot is being missed.

So, let’s turn to the household survey of employment, which does capture this entrepreneurial activity. By the way, this also is the survey from which we get unemployment numbers. In January 2001, the household survey pointed to 137.790 million employed. As of September 2004, the employment number was at 139.840 million. That shows an increase in employment of 1.69 million. This is a far different jobs story than the one being peddled by Senator Kerry.

I came across an article that coincides with my opinion about John Edwards’ and Senator John Kerry’s tax hike for those who make over $200,000 a year. This article also mentions that John Kerry was dishonest about their campaign’s tax platform.

Perhaps Edwards should check with his economic team, because the Kerry-Edwards budget proposal, the actual fiscal policy the Democrats plan to implement if they are elected, calls for hikes on the top two income tax brackets. The top income tax bracket targets Americans who earn over $200,000 per year, but the second highest income bracket includes individuals, married couples and small businesses earning as little as $146,500.

“In their own budget proposal, Kerry and Edwards state that they intend to implement tax hikes beginning at a threshold income of $146,500 per year,” said ATR President Grover Norquist. “John Kerry and John Edwards have falsely promised that they only want to raise taxes on those making over $200,000 per year.”

Lets dissect the phrase, “but the second highest income bracket includes individuals, married couples and small businesses earning as little as $146,500.” It is very easy for a marriage couple to make $146,500 per year. That is $73,250 per spouse. Kerry’s administration tax hike is very misleading. It make it seems like ONLY people who makes over $200,000 per year are affected, where as a single person who makes $73,250 per year is affected. Also, many lower skilled people will be affected because many small businesses that makes over $200,000 per year will be taxed at a higher rate.

Repealing President Bush’s tax cuts on the top two income tax brackets would raise taxes on 900,000 small business owners and entrepreneurs. Many small businesses, which are responsible for creating 7 out of every 10 jobs in America, could be forced to either lay off employees of go out of business.

In the 21 years of trading, a barrel of oil have reached a record high of $50 a barrel. The Bush administration is closely watching the crude prices but will not use reserves to ease prices. Also, investment bank Morgan Stanley said it believes that prices can rise up to $61 a barrel.

Here is an article comparing Bush’s and Kerry’s tax plan.

Presidential candidate John Kerry claims the he would cut the deficit in half by 2008 if he was elected president. The current deficit is about $422 billion, which means he will cut $211 billion. It seems to me that he will increase the budget deficit just by leaving the Social Security left unreformed and not going towards privatizing it.

Third party estimates shows that John Kerry tax proposals would raise the deficit to about $525 billion by 2008.

Here are some of Senator John Kerry’s tax proposals:

Taxes. Senator Kerry has proposed repealing the Bush tax cuts for households earning over $200,000 annually while making permanent the recent middle-class tax cuts. In addition, Senator Kerry has called for new tax credits for health insurance and higher education, a series of business tax changes, and a fix to prevent the alternative minimum tax (AMT) from steeply raising taxes for millions of middle-class families.

Spending. Senator Kerry has proposed a new comprehensive health care plan that aims for 95 percent overall health coverage and 100 percent coverage for children. He has also called for sharp spending increases in areas such as education, aid to states, homeland security, defense, Head Start, veterans’ benefits and health care, and combating global AIDS.

Budget Deficit. Senator Kerry recently pledged to halve the budget deficit by 2008. Given the current Congressional Budget Office (CBO) estimate of a 2004 budget deficit of $422 billion, his pledge translates into a $211 billion budget deficit in 2008.

The American Enterprise Institute summed up all of Kerry’s spending proposals and concluded that he would spend $1.116 trillion over the next decade. Also, in order to fulfill Kerry’s deficit reduction plan, he has to raise taxes by $232 billion, which equates to $2,090 per household.

Since raising taxes reduces incentive to work and invest, this leaves an economic slow down. Therefore, leaving John Kerry with less revenue then projected.

California Governor Arnold Schwarzenegger vetoed two bills on Saturday. The first bill he vetoed was raising the California minimum wage to $7.75. I notice on a state average that the average minimum wage is about $5.00 to $6.00 per hour. There are many studies that show how hiking up minimum wages can have a negative effect on the economy. Here are a couple of reasons on how it has a negative effect:

• Higher wages requires a higher skill set. That leaves the lower skill set workers out of a job, which then reduces employment
• Higher wages creates higher cost for business. That gives them incentives to move to other states which have cheaper minimum wages
• Minimum wage hikes decreases the gap between lower skilled workers vs. workers that require higher education, which reduces the productivity, and incentive to work harder for those of the higher educated workforce.

Currently, many businesses are moving out of California because it cost so much to run a business. Raising California minimum wage will further decrease businesses in California.

The second bill Arnold vetoed was the bill that would have made it more difficult for retailers to construct superstores. Having superstores somewhat goes hand-to-hand with minimum wage. Many people argue that superstores pay low wages to their employees. Also, superstores create a lot of competition to other smaller stores. There was a lot of controversy some months back about building a Wal-Mart in Inglewood California. Many people were arguing about low wages and the competition Wal-Mart was going to give to small buisness owners. The unemployment rate in Inglewood is about 9 to 10 percent and there are many low skilled workers who lives in Inglewood. Building a Wal-Mart in Inglewood would help out the city.

I think Arnold has potential to help California get out of the hole it was digging and maybe more business would stay and maybe even come back to California.

Arnold’s words about California:

“In recent years, the high cost of doing business in California has driven away jobs, businesses, and opportunity. Now is not the time to create barriers to our economic recovery or reverse the momentum we have generated.”

To add to my “Canada Increase Health Care Spending” post. Check out this article on how Canada health care is now in crisis.

Canadian officials agreed to pay $14 billion in federal money over the next six years to provinces and territories that gives health care. There will be a guaranteed 6% increase in spending per year until 2015. This increase spending will cut funds to help the homeless and to fulfill promises to improve education and rebuild their armed forces. The purpose of this spending is to improve the access of health care professionals so Canadians can see a doctor when and where they need too. I recently did a post on socialism and I stated that since Canada health care is socialized, many patients have to wait many weeks from the time of appointments to treatment because the demand for doctors does not meet the demand for treatment.

My post:

Health care in Canada is socialized. Because it is socialized, patients have to wait 16 to 17 weeks from the time of appointment to treatment because the supply for doctors does not meet the demand. In the 1990s many doctors fled to the US, leaving nurses responsible for doctor’s practices. Waiting list for Canada also occurred for CT and MRI with a range waiting time of two to twenty-four weeks. Also, in 2003 the government of British of Columbia enacted Bill 82, which prohibits anyone paying clinical fees for surgery. For some medical services, Canadians commute to the US just to get better and faster medical services.

I guess Canadian officials believe that spending $14 billion more would get them out of the hole that they dug. I believe that they are just digging it deeper. Eventually they are going to have to spend more and more money.

The agreement reached Thursday should go a long way toward fulfilling those pledges, but critics say that it is only a stopgap solution and that leaders are likely to have to return to the bargaining table in a few years to pump even more money into the system.

“What it does is put the patient - the health care system - on life support, but it does not put it on the road to full recovery,” said Senator Michael J. L. Kirby, an influential Liberal who led a commission that studied health care two years ago. He said he regretted that the officials did not consider restructuring how health care was delivered, even if this entailed allowing private clinics to provide services to those willing and able to pay.

“The way health care is structured is unsustainable,” Senator Kirby concluded, adding that the country should also consider a national health care insurance premium.

The cost of the public health system is growing at a rate of 7 percent a year, while all government revenues are only growing by 5 percent.

There have been many studies that show free health care does more harm than good. So, why do countries like Canada continue to give free health care? They already see that they have to spend more and more money on free health care, which takes away from other socialized programs.