As you know Delta Airlines is close to bankruptcy. Their income is less than their outgo. They are running out of money. In order to stay in business they must either take in a lot more cash or cut expenses. In today's economy they cannot raise their fares as they will sell even fewer tickets because competition is fierce.
If you can't take in more money the only alternative is to cut internal expenses. The first to go are the non-operating employees - the little guys on the ground have the smallest paychecks and are now doing the jobs of those who were laid off. That leaves us with the aircraft mechanics and pilots.
Of course the plane is not going to go anywhere without them, but these are the highest paid people in the company beside the executives. The bosses have said to the pilot's union either take a pay cut or we go out of business and you have no job at all. The unions know you can't get blood out of a turnip.
What has all this got to do with investing? I won't buy Delta stock now as I don't know if they will be in business next year. No, but I want you to keep this in mind as we look at the budget of the United States. Uncle Sugar is now spending way more than he is taking in in taxes. The politicians want to increase the payout for Medicare and protect (?) Social Security. These are both threatened even though they tell us they won't touch them. Doesn't this sound something like Delta Airlines?
There is not too much difference except Uncle can keep printing money out of thin air. (That's what the Fed does.) As this goes on and on it means that every dollar we have is becoming watered down. We call it inflation. It is really a hidden tax.
Some time out there in the not too distant future those guys in Washington are going to tell us that YOU are going to have to take less benefits in Social Security and Medicare among many other things. "They can't do that!" Oh yes they can! It either that or you will see your savings disappear right before your eyes called inflation.
Politicians keep promising more "entitlement" programs and these are slowly strangling the country. Many of the European countries are trying to cut back on their give-away programs, but the people vote out the politicians who want to balance budgets until some day the economy will vanish just as the Weimar Republic did in Germany. Everyone goes equally broke.
About 50% of voters don't pay any income tax at all and they don't care. All they know is that some smooth-talking politician is promising them more.
As a voter you have to begin to understand that you cannot have your cake and eat it too or like the Delta pilots you won't have any airplane to fly.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
http://www.mutualfundmagic.com; 1-888-345-7870
home cleaning services Deerfield ..Fearful that terrorists will next target Australia, Prime Minister John... Read More
In the event of that a threatening nation to the... Read More
The United States is losing its industrial capacity quite rapidly.... Read More
In every national budget, there is a part called "Public... Read More
You know now that North Korea is backing down on... Read More
Utah introduced a bill designed to limit the use of... Read More
Blessed with Chinese GDP growth rates (7-8% annually in each... Read More
The expertise and advancement of the evolution of man and... Read More
Is Ohio Manufacturing Sector really unable to compete in the... Read More
All the indicators show an improving economy and, finally, the... Read More
Leave it to the Columbia City Police Officers Association in... Read More
When Boris Yeltsin spoke about an experiment that 'they' wrought... Read More
United Liberation Front of Assam (ULFA), one of the most... Read More
Each day the present geo-political reality confirms what The Tribulation... Read More
I always have to remember to take a deep breath... Read More
The news media will regularly present views from Democratic (liberal),... Read More
Submiting the Criminals to The ICC!Everybody concerns about justice in... Read More
We are slowing the transportation flows of our civilization by... Read More
Death may not be dignified in any light but the... Read More
1) IS HAVING A DEMOCRACY MORE EFFECTIVE IN ADDRESSING POLITICAL... Read More
The price at the gas pump is certainly on everyone's... Read More
Thomas Jefferson wrote a letter to Lafayette in 1823 that... Read More
The civil war in Iraq seems to be much more... Read More
Journalism, as it is often said, is the 'fourth branch... Read More
"Rugged individualism" is actually a euphemism for Thomas Hobbes' baseless... Read More
recurring housekeeping Highland Park ..All to often law makers and regulators create rules and... Read More
After the dance the piper must be paid. To help... Read More
I read an interesting article in foreign Affairs magazine last... Read More
You know now that North Korea is backing down on... Read More
How can any human being today, anywhere in this world,... Read More
Revitalization Downtown projects are all the rage in fact the... Read More
Despite their signature on the Biological Weapons Convention of 1975,... Read More
Where are all the high-speed trains we were promised? Where... Read More
For a short time I worked as a union officer... Read More
To be justified, taxes should satisfy a few conditions:Above all,... Read More
Ever wonder why labor unions consistently endorse democrats over republicans... Read More
How many legs does a dog have if you call... Read More
I've been thinking again. I know some of my readers... Read More
UNAUTHORIZED HACKINGThe term "computer hacking" traditionally describes the penetration into... Read More
The FTC franchising division purports their law enforcement experience in... Read More
For years we've suffered under recession, prompting us to ask,... Read More
Britain has a proud tradition of valiant armed forces and... Read More
I have to be honest. It is time to come... Read More
The US Dollar has been falling continuously in last year.... Read More
As baby boomers, we have been spoiled all of our... Read More
30 years ago, California, later followed by other states, decided... Read More
In the event of that a threatening nation to the... Read More
Originally published in 1958, "The Ugly American" (Lederer & Burdick)... Read More
The People's Liberation Army of China invaded Tibet in 1949.... Read More
Today we wish to examine a fallacy, or error in... Read More
Political |