Thursday, September 20, 2012

Is Social Security Income Taxable?

It all depends. If the individual or jointly-filing couple received no additional income, taxable or tax-exempt, the social security income is not taxed. If, however, the combination of (1) half of social security income, (2) tax exempt income, and (3) wages, interest, dividends, alimony, etc. exceed total social security income without being offset by adjustments, the individual or couple will pay taxes on a portion of the social security earnings.

The form for calculating what portion, if any, of the social security income is taxable is on Page 26 of the 2011 Form 1040. I’ve automated the calculations involved on a spreadsheet. It turns out that if the filer’s total income from other sources is at or below 75 percent of SS income, net of any adjustments or deductions, SS is exempted. Thereafter, a portion of the SS income is taxed, up to a maximum of 85 percent of it.

The instruction booklet is available from (link).

Saturday, September 15, 2012

Hayek Redux?

An interesting article in The American Conservative (July 2012) suggests that the Austrian economist, Friedrich Hayek, is rising in the world’s estimate. The article, by Mark Skousen, is titled “Austerity's Prophet.” Why just look around. Everyone is trying to solve the economic stall of the world by Austerity. Using that word, redux, may be a little inaccurate, however. Hayek never enjoyed the rank of prophet like John Maynard Keynes; Keynes’ solution to economic sags has been to spend public money. Stimulus! Hayek Brought Back? No. Perhaps we should say instead: Hayek Discovered.

Curious this. But there is, of course, a way of blending these two extremes. We might call that the Josephian economics. Never heard of it? But you have. The theory is laid out Genesis 41:37-57.  Joseph, son of Jacob, becomes the ruler of Egypt. In times of plenty he adopts Hayek’s teachings and stores the surplus; in times of downturn he adopts the Keynesian approach and distributes what he’d stored. Austerity in good times, generosity in bad. There was no Nobel Prize for economics then or Joseph would have got it.

Now to practice austerity in bad times and limitless spending in good sounds a little crazy, doesn’t it. But, as the pagan saying has it, Whom the gods would destroy they first make mad.

Friday, September 14, 2012

StatAb Redux

To tell you the truth, I hate that word, redux, but anything for a snappy title. Still, while I’m at it, the word has its origins in the Latin ducere, to “bring or to lead” which, prefaced by re-, meaning back, means “to bring back”; hence redux means “brought back.”

The collective “we” around here mourned the passing of the Statistical Abstract severally and acrimoniously, and to find those laments we recommend using the Categories on your left. Now comes word that the StatAb will, after all, appear again in 2013, thus the silver cord will not have been broken, but a transmogrification of some kind will have taken place. The next edition will be produced by the private sector, specifically by ProQuest. Now ProQuest is a neighbor around here, headquartered in Ann Arbor, MI; that pleases others of us who function as publishers in this state. Our collective “we” have already bought our first copy in advance, although the pain was rather sharp as the price, ouch, was $179. Librarians all over will be happy—although they, too, will wince at the price in these days of diminishing budgets.

Whether or not our joy will be mixed or expansive all depends on whether the new StatAb will be like the old one, permitting full use of its tabular materials—or whether it will be surrounded by a thick veil of copyright protection. We hope for the former, not the latter. The new StatAb, like the old, will, no doubt, be filled with government-collected data. We pay for that collecion with our taxes—and would hate to pay for them, again. In any case, good luck, ProQuest. Get it right and you will have heaps of praise piled on you by us and others—and we won’t again murmur about the price.

Tuesday, September 11, 2012

Top Ten in Military Spending

With hat tip to Market Size Blog today (link), I am bringing here the top ten in military expenditures across the world for the year 2011. The source of these data is SIPRI (Stockholm International Peace Research Institute), from the SIPRI Yearbook 2012 (link).

Total spending in 2011 was $1,738 billion, of which the leading ten represent 89.8 percent.

Saturday, September 8, 2012

Job Gain/Loss by Sector, August 2012

Let’s review the employment changes in August by sector. Haven’t done that for a while. For the latest tabulation on this blog, shown for May, follow this link.

The pattern here is quite interesting. In the basic industries producing physical products (Mining/Logging, Construction, and Manufacturing) losses outweigh gains. Manufacturing, which showed a 12,000 job gain in July, gave it all back; Mining gave up jobs; Construction showed some life.

The distribution sectors (Wholesale, Retail, Transportation/ Warehousing) made modest additions to employment. The big gains have come in the services sectors. Not surprisingly, perhaps, Leisure and Hospitality lead the gains—suggesting that people are still going on vacation. The only services sector showing a loss of 4,000 jobs was Other Services. I got curious about that and looked at the details behind that loss. Here is a tabulation. It turns out that the 4,000 loss was actually rounded up from a loss of 3,500:

Other Services Defined (values in 1,000s)
Repair & Maintenance
Personal & Laundry
Membership Organizations
  Total Other Services

The big loss again came in the physical category, Repair and Maintenance. Too bad. That’s an industry that should always be growing.

Government has been loosing jobs as far back as we can see. Once more it lost jobs. But since the loss June to July was 21,000, this month’s loss is a little less alarming.

Friday, September 7, 2012

Employment Update: August 2012

The dogs bark, but the caravan keeps moving on. Yes. The caravan is the economy, and it has a mind of its own. The Bureau of Labor Statistics revised last month’s employment gains of 163,000 jobs down to 122,000. For August it reported a gain of 96,000. But what with that downward revision, the net change for this month was 55,000 in the upward direction. Still no trend. The Democrats will claim that jobs are growing, the Republicans that the job report is a disaster. Sure, sure. Fact is, the dogs don’t move the caravan. It is the camels that do it.

The full detail on the employment change is accessible from the BLS press release (link). The updated chart, reflecting the July down-ward revision, follows. As of August, we had recovered 3.98 million of the 8.66 million jobs lost in 2008 and 2009, 45.9 percent of total. A very slow-moving caravan, this one.

Monday, September 3, 2012

Why Not May First?

The International Workers’ Day is celebrated the world over on the first of May; 80 countries across the world do so—many others do so unofficially. By contrast, we celebrate the day on the first Monday of September. And yet! And yet the May Day event had its roots in—Chicago. When that history is understood, the different ways of dating this celebrations also emerge.

On May 4, 1886, people were massing in a rally in Haymarket Square in Chicago in support of a workers’ strike attempting to limit work to eight hours a day. Police were attempting to disperse the mob; someone threw a bomb; shooting ensued. In the melee seven police officers and four (perhaps more) civilians were killed. This event is called the Haymarket Affair, massacre, or riot.

Okay. That was May 4. But back two years earlier, the Federation of Organized Trades and Labor Unions (started in 1881, dissolved in December 1886) had set May 1, 1886 as the target date on which the eight-hour day would be officially instituted. So what happened is that the Haymarket Massacre was already, on May 4, associated with the first of May. Indeed, on May 1, 1886, somewhere between 300,000 to half a million laborers held rallies in the United States. We started what later has come to be associated with an annual even of socialist coloration.

Our Labor Day was first proposed by the Central Labor Union (CLU) in 1882. It was first celebrated in New York City that year on September 5. It spread from there and became a national holiday in 1894—in the wake of the Pullman (Railroad) Strike that summer; 30 people lost their lives in that event in the course of which thousands of U.S. marshals and 12,000 Army troops participated in putting it down. CLU deliberately chose a September date because, by that time multiple movements of an anarchist, communist, and syndicalist nature had already sprung up.

We were there, we were the first—but not May 1st. The first Monday in September. Got it? Good.
Illustration from Wikipedia (link); the image first appeared on May 15, 1886, in Harper’s Weekly.