ARE WE BETTER NOW OR WORST THAN 2009 ?

Published by El Nuevo Herald on July 30, 2015

According to the nonpartisan Congressional Budget Office (CBO), 2017 there are no funds to pay disability benefits, known as disability insurance. However, according to the law Deficit Control Act of 1985, it is presumed that the Social Security Administration will pay benefits to the disabled, even though the reserves to undertake such payment are exhausted.

The major source of income for Social Security are the payroll taxes. Indeed, although employment has increased recently, it is not enough to collect the money needed in order to be able to pay retirement benefits, survivors or disabled.

The increasing productivity is an important factor in this respect. It happens that productivity is the worst enemy of employment. To the extent that continuing technological advances, productivity increases, but employment decreases. So, they are inversely proportional.

For example, now the online negotiations on the Stock Exchange are faster and more numerous, but have left without jobs all manual operators. Likewise, we see more letters but less postmen, more news but fewer reporters, etc., etc.

Realistically, the most effective way to create jobs is to invest in America, not in other countries.

After the crisis of 2007-2009 and until 2012, there was a significant decline in economic activity, which resulted in the tax expense grew disproportionately while revenue decreased dangerously.

Because of that respectable deficit, the US public debt reached 74% of gross domestic product (GDP), becoming in the second largest step after World War II. Although the average of that debt in the last 50 years has been 38% of GDP, it is estimated for 2025 will reach 78%.

Many even believe that something similar happened in Greece, by having high taxes, massive debt and welfare system too generous. Of course, there are important differences between Greece and the United States.

Greece had contracted its debt in drachmas, but now owe money in euros, which means that control of the Central Bank lies with Europe. In contrast, the US Federal Reserve knows that necessarily they are going to buy US government bonds.

In fact, Greece can not even ensure that the European Central Bank (ECB) will purchase all Greek bonds that European banks have acquired. However, the ECB has been buying Greek bonds, but conditioning the country: in fact, has "suggested" to Greece hotel taxes increased from 13% to 23% and in the case of restaurants, from 6.5% to 13% .

So, it seems that Greece would jump to some sort of fiscal cliff, where they increase taxes and must cut spending.

Fortunately, the situation in America is different. According to the projections of the Congressional Budget Office, if we want the debt for 2040  maintained at least at 74% of GDP, we should increase revenues by 6% or decrease expenses by 5.5%.

That additional contribution of $ 210 billion would be income or expenditure of approximately $ 650 per person per year, something not too hard  to achieve. For example, betting less lottery really means more than $ 650 annually.

There are sectors who believe that rejecting Obamacare will solved the problem. It is quite the opposite.

Repel the Obamacare will increase the deficit by $ 137 billion over 10 years, mainly because the net savings that serves as provision for current health coverage would decrease considerably, in addition that 23 million young people would remain uninsured by 2017 .

Actually, the US economy is strong, despite comments and partisan interests.

For example, the Dow Jones hit a record high of 18,000 points this year, when in 2009 it was 7,900. The S & P 500 index managed a score of 2,100 while in 2009 it was only 805.

And the fiscal deficit is now only 2.7% of GDP, very different from 2009, when it was 9.8%.

If this is not economic improvement, how could we call it ?

Economist and journalist.

BenSales@att.net

TRUMP AND HISPANICS

Published by El Nuevo Herald on August 29, 2015

It seems very venerable the fact of wanting to defend the country in which one is born and lives.

It seems that more and more foreign travelers come to stay. It seems we'll have to keep them all forever, those who already live here and those who have yet to arrive. These and other comments are woven on immigrants. But what is not discussed at length are the benefits that immigrants bring to the US economy; on the contrary, what is now at the top of the news is precisely the anti-immigrant stance taken by Donald Trump.

In last debate between the candidates for the Republican primary, Trump was the shining star and since then continues to lead the polls for these elections. Among his brilliant ideas, he proposed the expulsion of illegal immigrants and the non-recognition of US citizenship to children born in the US of these.

Trump also accepted the fact that he declared bankruptcy four times and unashamedly states that "everybody does the same because you have to know how to exploit the weaknesses of the system" and also "I always have money."

Incredibly, this savvy is what makes it attractive to voters, along with other statements not considered politically correct.

It happens that Trump is exploiting a reef than any previous candidate had ventured to touch; awaken the hidden and suppressed for decades in American purer strain, apparently it is paying off, for now nationalism.

Of course, there are many objections to counteract Trump. For example, we imagine what would have happened if the descendants of the 17 founding fathers of this great American nation (all immigrants) had refused them citizenship.

From 1990 to 2000, immigrants had twice patents registered than those born here. If we had deported them, would the US was the world's leading technology?

The DREAM ACT (which represented a path to citizenship for those who arrived on American soil before age 16 years), had it been approved federally, would have reduced the fiscal deficit by $ 1.4 trillion and increased government revenues by $ 2.3 billion, according to a study University of California. The same study found that DREAM Act students during their careers had generated a gross income of between $ 1.4 and $ 3.6 trillion. Does it seem logical to deport these students after forming in the US?

Trump proposals are not only foolish but also are an outburst. The best way to prosecute eleven million immigrants it is integrating them into the production process.

For years I have suggested that these immigrants could collaborate with US companies that have relocated its factories  in the country. To compensate them for their cooperation and to respect the laws, they would receive a monthly bonus redeemable (no salary). It would allow them to survive for five years when they could apply for permanent residence. In this way we would kill two birds with one stone: illegal immigration and unemployment. You just need true patriotism  to achieve it; not only of business man lives .

Regarding immigrants are continuously coming, obviously we need a comprehensive immigration reform that includes a kind of free immigration treaty.

When they treated immigration, several studies have shown that free movement of people among related countries generally contributes to greater prosperity, when that movement is controlled.

It is estimated that Trans Pacific Partnership (TPP) from 12 countries, strongly backed by the Democratic administration and the Republican majority, will consider these conditions when it is finally approved.

Finally, it is important to tell candidate Trump something that he knows very well.  In US it is estimated that there are 16 million immigrants with vote, many of them with family, friends, neighbors or co-working Americans. That has a significant multiplier effect, which ultimately has a major influence in any election. Consequently, we do not believe any candidate opposed to them has the slightest chance of being elected.

And among Hispanics who have been accommodated in this great country, we believe there is an enormous contempt for Trump; he feels the same for us.

BENJAMIN F. DeYURRE

Economist and journalist.

LATIN AMERICAN SUMMIT IN MIAMI

               Published by El Nuevo Herald on March 02, 2016

Recently and for the first time in Miami, the XIII Latin American Summit was held in the area. Attended by important personalities, the summit  (an event of a private nature), meet 500 people from all over Latin America where they had the opportunity to witness for three days to extraordinary political exhibitors. 

The Miami Summit was initiated by political personalities like Luigi Boria and Sandra Ruiz, mayor and deputy mayor of Doral respectively; Jose "Pepe" Diaz and Daniella Levine Cava, Miami Dade commissioners; Raul Martinez and Maurice Ferre, former mayor of Hialeah and Miami respectively.

Among the numerous and formidable representation of political strategists Fernand Amandi from Miami,  Yago de Marta from Spain and the acclaimed winner of 29 presidential campaigns,  JJ Rendón from Venezuela stood out.

Among the large attendance of foreign politicians were Federico Gutiérrez, mayor of Medellin, Colombia; Dalo Bucaram, a candidate for the presidency of Ecuador, and Vicente Fox, former president of Mexico.

The main feature of all exhibitors was to highlight the importance of Hispanic and Spanish language in the United States and the world, as well as the weight of the Latino vote in the great American nation.

The candidate for the presidency of Ecuador, Abdala Bucaram (Dalo), deepened the importance of the last name in political activities and referred to the family Kennedy, Bush and Fujimori. He coined the phrase "If your name is noisy, do it louder." He recommended "differentiated but not distanced"

At this point we said to him that although Jeb Bush loves his family but differed from his brother President George W. Bush, yet he chose to retire with dignity from the race. Dalo Bucaram said then that Jeb did not handle in its favor the great weight of his last name.

To Former President of Mexico Vicente Fox, we asked a public interest question for the US and countries members of the newly formed Transpacific Partnership (TPP), to whom Mexico also belongs.

We asked: In the light of recent Transpacific Agreement, Mexico needs to reformulate many of its trade agreements previously agreed in the North American Free Trade Agreement (NAFTA). How do you see this process? The President's reply was: "One thing has nothing to do with the other, it is something positive for the US but does not commit to NAFTA."

Last year we had the opportunity to participate in a conference call with David Simas, Economic White House Counsel. Indeed, the focal point of this conference was the urgent need to redesign the NAFTA agreements in order to reconcile them with the covenants of TPP, of which Mexico is a signatory. As we see, it is opposing positions.

Former President Fox was the most effusive of foreign politicians. He berated Donald Trump stressing that such an illustrious chair, where have sat figures like George Washington and Abraham Lincoln, now it was too big for him.

He also expressed agreement with the US relations - Cuba and said that these relations should never be truncated, such as Mexico and Canada, who always maintained diplomatic exchanges with Cuba.

Notably, President Fox, apparently never was interested about the hardships and persecution endured by the Cuban people through many years of harsh dictatorship. The vast majority of democratically elected nations by then, cut ties with the communist regime of Cuba in protest at human rights violations on the island and the absence of all kinds of freedoms.

Today, after three generations that have survived the regime under conditions of hardship, strategies for democratic change in Cuba have changed, without this meaning that crimes against humanity are forgotten. Countries with which the US has restored trade relations have seen a marked improvement in its gross domestic product (GDP). Cuba is no an exception.

A private trade incipient growing on the island will eventually flood the business registers, causing the massive circulation of the dollar and encouraging the export of Cuban goods and services.

Everything will be under the commercial genius who have always shown the Cubans, and that made the island the most developed country in Latin America and the largest and most efficient US trading Latin partner, before 1960.

Benjamin F. DeYurre

Economist and journalist.

THE EFFECT TRUMP IN FLORIDA

Published by El Nuevo Herald on February 15, 2016

The "wise" Donald Trump suggestions are already having its effect in Florida; It was recently approved by the state legislature a law that relentlessly pursue illegal immigrants.

The HB675 law, approved by state representatives by an overwhelming majority of 80 to 36, requires that local governments, through the police officers detain immigrants suspected of being undocumented.

It also requires that school districts take appropriate action. This is, teachers should expose children who do not submit the legal documents of stay in the US. And of course, children and their illegal parents would be subject to deportation.

The immediate consequences of these "noble and intelligent" measures would include:

▪ The crime rate will increase because many are afraid to report illegal criminal activities in progress, such as murder, rape, armed assaults and robberies.

▪ Trials in court will not have fair results as criminal sentences for serious crimes and others like fraud, embezzlement, money laundering, forgery, etc., will be much milder as many undocumented workers will refuse to serve as witnesses.

▪ The agricultural business will decline and shortages in some vegetables will be evident.

Many illegal survive in the US planting and harvesting vegetables and fruits, such as tomatoes, onions and oranges. It is estimated that workers in these matters are 80% immigrants.

Given that the law must be fulfilled, these agricultural fields will be subject to state supervision, which will make immigrants be absent due to frequent raids.

With the decline of agricultural supply, product shortages will cause price increases. The export of some items disappear and thus affect the growth we had in 2015 when the export of goods and services increased by 35%.

▪ The sale of books and school supplies will decrease. The profitability of school transport will decrease for having fewer children-customers.

▪ The cost of Police will increase and thereby will increase taxes to taxpayers. To carry out massive raids, more agents and more technically advanced procedures are necessary.

As we see, the "bright" Donald Trump divisive ideas begin to spread. The anti - immigrant pionner law passed in Arizona and known as the HB1070, which was endorsed by Sheriff Joe Arpaio in 2010, was partially dissolved by the Supreme Court due to violations of the Constitution.

Logically , the sheriff Arpaio recently publicly expressed support for the candidacy of Donald Trump.

Both want to deeply divide the great American nation, mainly by legal status and race.

In Florida, the urgent intervention of the state Senate may actually have a vital importance, before the end of this legislative session, in order to repeal this absurd law HB675.

In addition to be human, this would be a smart move because this catastrophic law may suffer the same fate as the Arizona HB1070: partially or completely dissolved by the Supreme Court. Why we have to absorb the cost that means this painful litigation?

Benjamin F. DeYurre

Economist and journalist.

CUBAN REFUGEES AND THE CHESSBOARD

Published by El Nuevo Herald on January 18, 2016

Humanitarian crises in Latin America have been a lot and for various reasons; however, only one has been originated in 57 years of a harsh dictatorship.

We refer to the Cuban immigration crisis that keeps some 8,000 citizens of that country in Costa Rica, 10,000 in Ecuador, 1,000 in Panama, 700 in Colombia and an unknown number in Mexico (estimated at 1,000), formed by a group of people that have not yet achieved their entry into the United States.

Indeed, the suffering of these migrants has been enormous.

They began with the purchase of air ticket Cuba-Ecuador at about $ 440, but not before having sold their few belongings in Cuba and have borrowed money from family and friends, inside and outside the country. Also, they have renounced to their jobs and schools. Everything was in order to make some temporary accommodation in Quito and having some food to start their long and arduous land and sea crossing to Tapachula-Mexico, from where they could legally enter US territory.

The journey through Colombia was particularly dangerous, dodging wild animals and poisonous snakes, highwaymen and con artists by trade, who were charged twice by crossing them in rivers.

Most who managed to arrive in Costa Rica were trapped there by the refusal of Nicaragua to continue its path. Thanks to the noble management of Costa Rica, an airlift was achieved to El Salvador, which costs $ 555 for each Cuban, exorbitant figure for them in view of the above expenses.

El Salvador and Guatemala provide military security to Cubans during passage through its territory, but not Mexico, who also gives them only 20 days leave to abandon their land. Meanwhile, they are subject to attacks by criminal gangs and drug traffickers, and many of them have not yet managed to enter US territory, being in legal limbo and therefore subject to deportation by the Mexican government.

Throughout this long and dangerous journey was chosen by these thousands of Cubans who chose to risk that way before facing the uncertainty of the Caribbean Sea, which we know serves as a grave to thousands of Cuban rafters who perished trying to reach land of freedom, invoking an interpretation of the law known as "dry feet, wet feet".

It's very curious the fact that Ecuador has allowed free arrival of Cubans without visas before December 1, 2015. It seems that it was a preconceived stampede.

What purpose will seek the Castro regime with this manipulation?

Obviously, it seems that the regime wants to force a settlement to the Cuban Adjustment Act of 1966, which granted immigration benefits and financial support for Cubans who arrive on US territory.

And why the Castro regime wants to eliminate the Cuban Adjustment Act?

In light of the renewed US-Cuba relations, massive cash remittances by Cuban US to their relatives on the island it would be hindered if thousands of citizens continue their exodus.That is, the reconstruction of the impoverished and poor Cuban economy requires not only money capital, but also requires human capital able to pay taxes.

The issuance of sovereign bonds, the return of a commercial register and the reprinting of land registers, together with the mass circulation of the dollar on the island and the increasing involvement of banks, could lead to a kind of economic model Chinese Cuban style .

The end of communism would be very close then. Something that has not yet happened in China. However, the Asian idiosyncrasy is different from the Spanish. There tend to revere their rulers as gods.

From 1960 to 1962, 14,000 Cuban children emigrated to the US under the project known as Peter Pan. In 49 years, more than a million Cubans have benefited from the Cuban Adjustment Act of 1966.

However, many politicians in the US that, somehow, they or their parents have benefited from these laws, are now against giving shelter to 20,000 Cubans who are in transit. In other words, "I am Cuban, I benefited, but I do not want others to be benefited also." What kind of moral is this ?

And what is more important: the current Cuban migrants are not guilty. They are just chips on a chessboard.

Benjamin F. DeYurre

Economist and journalist.

CLOSING 2015: NO CASH IN MIAMI

                    Published by El Nuevo Herald on December 29, 2015

Domestic US economy has performed well in 2015; however, locally, they have received some disturbing factors, including the lack of cash.

Indeed, in the last five months it comes to appreciate a considerable increase in the use of so-called "plastic money". In most businesses where we conducted an informal survey, not methodological, only 15% of customers paid in cash.

Particularly in the area of ​​Greater Miami, three factors have influenced this behavior:

▪ More than 7,000 regular taxi drivers who previously paid their services in cash, now have virtually become unemployed by competition from UBER, which does business in credit card.

The market for customers who take taxis is the same, only have moved to UBER. Consequently this clientele now has a larger universe to choose their services as more than 50,000 people are available as taxi drivers.

Of course, it is not the same a market for 7,000 suppliers, than for 50,000. More people can work and provide a cheaper service, but its gain is minuscule now. Since UBER customers use credit and previous 7,000 taxi drivers no longer receive the same cash than before, consumption with cash has decreased, that is, is now lower volume of cash circulating daily in the business of Great Miami.

▪ The furor to lottery play has increased, mainly among people over 54 years old. Games known as "Scratch Off" have become very popular, especially those whose value exceeds $ 20 per unit.

It turns out that the emergence of numerous winners of millionaires in that price level awards, has significantly increased the hope of the population in a sudden fortune. However, what has happened in reality is a decrease of cash held by the public.

The rise of casinos is another factor restricting cash in circulation. Generally, retirees and those receiving federal aid, are mostly regulars casino gambling.

Of course, this is a  restrictive factor to business prosperity since those who lose their retirement in the game does not have access to credit and therefore stop consuming in commercial establishments.

For that reason, it is common in the Great Miami a kind of economic boom in subsequent days of collecting monthly federal check aid.  And as a contrast, we look at the rest of the month, a very slow economic activity.

Lack of cash is generally costly to employers because it forces them to pay higher financing costs; that is, each time they have to pay more to banks for processing  credit cards.

In turn, the unbridled use of cards  creates a false sense of well-being in the consumer, it reduces their income level, limiting their ability to commit new debt and endangering his or her economic future.

And what is more serious; the exaggerated use of cards generally leads to increases in individual credit limit bank. The roof of this debt will it grow until it becomes unsustainable and consequently, sooner or later results in loss for the already battered banks, who simply with its poor loan portfolio do not generate enough to undertake the expense involved by thousands of branches and employees.

2015 has been a prodigal year in good economic news. We started the year with a record high of 18,000 points in the Dow Jones index, we increased to more than 2,100 points, the S & P 500 index, we  reduced the fiscal deficit to 2.8% and unemployment to 5.1% only. This has allowed corporate profits to have increased by 175% and exports of goods and services by 33%.

In turn, all this economic activity has generated the resources to compensate retired 49 million of retired, 21 million of veterans  and 11 million of disabled.

All these figures are promising, but still, we have to be aware of the excessive use of plastic money, that if it were to become a national epidemic, it could finish in another sort of housing bubble, as the previous crisis in 2008.

What would help? Maybe, just doing only one weekly draw in the lottery and controlling the proliferation of casinos. Let's do it.

Benjamin F. DeYurre

Economist and journalist.