The Trump Card: VETO

As Trump moves forward to become President of the United States(POTUS), you’d think that things were chaotic in DC.  Nothing could be further fro the truth.  Yes there are some that are getting their feathers ruffled(and that is a good thing).

If you want to see if Trump is actually draining the swamp in DC, watch just how many times he uses his Veto Power.  Because if Congress is not getting vetoed legislation sent back to them, then you will know that the Swamp is not being drained.

Yes, the Veto can be overridden.  But that takes compromise among those under the Capital Dome.  And we have not seen that sort of cooperation for decades.  Instead we have had the majority run over the minority not based on solid ideas and concepts, but on sheer force.

Trump can change that quickly and effectively.  Trump, hopefully, will not have favorite stooges under the Capital Dome.  Hopefully, he will spread out who he goes to to push forward valuable legislation.

Most importantly, Trump can Veto the thousands of Executive Orders put forth by Obama and Company, and do so quickly.  Trump, who feels precedent has no value whatsoever, will do more the first week by reversing the bad choices of Obama, than any other POTUS in modern history.

And that is a good thing.

The Federal Reserve Bank: Pumping Fuel onto the Bonfire of Inflation

We are in very uncertain times.  And they are becoming more uncertain.  The Federal Reserve Bank(FRB) just raised interest rates .25% and has stated it is their objective to raise rates perhaps 3 times in 2017, in an effort to effectively curb inflation.

And while that may seem to make sense based on the way both the FRB has worked in the past, and what we have been told about inflation and how it works, these actions, perversely, are going to have the opposite effect this time around.  Should I be correct, then the raising rates will actually fuel inflation, which will force more rate hikes, and then even more inflation. Continue reading

The Great Billboard Controversy of Johns Creek

For several years now the interests of the Johns Creek residents have been growing in their desire to  both understand and participate in how their closest level of government-their city government- functions.

And, what many of have seen has not been exactly what we had hoped for.  Voter apathy has been mentioned often in City Council Meetings.  Lack of citizens showing up at City Hall for Council Meetings was evident.  City Council members tired of the same citizens making public comments.

Yet over the last three years there have been several events that have awakened the public, and coupled with more ways to have conversations (such as the Johns Creek Post and NextDoor) the genie is out of the bottle.  Public scrutiny is going to only grow. Continue reading

US Economic Engine Continues Its Steady Decline

It’s been a long time since we had robust economic growth.  Most of those alive today cannot really recall a boom time.

Compounded Annual rate of job growth since:

1960:  1.75%

1970:  1.53%

1980:  1.28%

1990:  1.05%

2000:  0.56%

Anyone see a “long term” trend here besides me?

Slowly but surely this economy creates lower and lower job growth.  There are those, like me, who have relentlessly stated that taxes, regulations, and other restrictions are having a negative effect on the US economy.

And I have on more than one occasion demonstrated that profit growth in the US has also been on a steady decline.

With less profits and lower job growth, should we really be surprised that the overall health of the US consumer has been on a steady decline?

Were it not for liberal monetary lending, where American consumers are borrowing to sustain their standard of living, the evidence would be quite clear.

So, how long can this last and how much more debt can the American consumer get their hands on before we see some serious repercussions?

In The End, It Was About The Economy Again

Once again, we faced a National Election for President of The United States, and once again the outcome was never really in question, was it?

What if you could find one indicator that pointed the way to what would happen in the election for POTUS that could very well sum up how the United States was doing, and therefore indicate what the outcome would be during election years? Continue reading

Johns Creek: It’s In Your Best Interest to Stop TSPLOST

The vote Johns Creek residents will take on the TSPLOST 0.75% tax is critical to understand.

Voters are being presented with the opportunity to raise the taxes on themselves, which will effectively increase the spending and size of the Johns Creek City government by 29.7%.  That is not insignificant. Continue reading

Are Our High Quality Schools Sustainable With High Density Housing?

There is another problem with High Density housing that you will not hear any politicians speak about in public.  I am not a politicians, and so I will.

The health of your schools is threatened with higher density housing.  Why?  Because a townhouse that sells for $300,000 will pay 1/2 the school taxes that a house that sells for $600,000 will.  If  both homes have two kids in school, the impact is significant. Throw an apartment complex into the equations and the fiscal impact on schools becomes even  more significant.

It costs $13,433 per student per year to educate children in Fulton County.  No small amount.  Property taxes are essential to school funding(especially those property taxes coming from people with no children in school).

Assuming 12 years of education per student, that totals  $161,196, quite a large sum.

For our example, we will consider an apartment, a townhome, and a single family home.

Based on my calculations from the number of units at some of our most valuable apartment complexes here in Johns Creek, an apartment unit is valued round 110,000 for tax purposes.

Apartment Townhome House
Value $110,000.00 $325,000.00 $500,000.00
School Taxes $1,284.05 $2,918.30 $4,961.11
Cost per Student 13433 13433 13433
% Covered 9.56% 21.72% 36.93%

(The above taxes are from the 2016 tax rates, and assume homestead exemptions have been applied for on the Townhome and house.)

As you can see, apartment dwellers and Townhome dwellers pay far less towards the education of a student than does a homeowner who lives in a more expensive property.

The math makes it clear.  If you continue to add more and more students who are in households contributing less to the cost of education, either property taxes will need to rise significantly or the cost of the education will need to drop sharply, reducing the quality of that education.

And none of this would even be possible today at these tax rates were it not for households with no children contributing to the system even though they have no children in school

Which leads us to this question:  How smart is it for communities to continue adding high density housing, which puts the same strain on school financing economics when you know that they are going to contribute substantially less to those very same schools?

 

What’s Undermining Residential Real Estate Values in the City of Johns Creek?

Johns Creek receives many accolades throughout the year, and 2016 has not been an exception to that trend.

For many residents, concern over ever higher densities of residential real estate developments such as apartments and town homes has been a major concern.  But the City of Johns Creek pushes ahead with ever more high density development with seemingly arbitrary lines drawn as to where the higher densities are permissible and where they are not.

Residents did not directly vote on these issues.  They only have cast votes for those that decide on these issues.  And as history has shown, there are not a plethora of voters that even bother to make their voices heard.  That, however is changing.

There is a cost to current residents as more and more of these high density developments are approved and put into place.

Let’s ask the residents of Johns Creek who were here in 2007.  Taking the data from the 2015 CAFR report (you can find it here:  http://www.johnscreekga.gov/JCGA/Media/PDF-Finance/2015-cafr.pdf ) on page 61 shows Johns Creek had a population of 70,050 and a residential tax digest (page 79) of $3,215,735,140.

A simple calculation reveals that in 2007 we had $48,727 of residential real estate per resident.

How have the residents of 2007 fared over the course of the last 8 years?  Well, not so well.  Using the population counts and the residential tax digest from the same pages mentioned above, we can see that residents of Johns Creek  have seen that number drop to $40,117 per resident, a decline of 17.67%.

Residential Property Value Per Capita
Year Residential Property Population
2007 $3,215,735,140.00 65994 $48,727.69
2015 $3,333,836,970.00 83102 $40,117.41
-17.67%
Source: Johns Creek CAFR 2015

Why are residents from years past seeing such a drop in values for their community at large over time? The drop in housing prices from the recession is behind most communities in our area and should certainly be behind us in Johns Creek.

I’ll blame that in large part to the additional higher density housing which has been added over the years and continues to be added even as we speak.

Those that move into higher density developments are those that are not buying the current real estate stock we have in Johns Creek.  Fewer buyers for that real estate naturally lowers the selling prices of the real estate.  Yes indeed, the supply and demand curve you had to learn about in high school and college is actually meaningful.

Additionally, all of this “new” higher density living is coming in at average price points below what the average homes in Johns Creek are worth.

So we have less demand lowering selling points and lower prices units pulling down the averages as well.

Also interestingly enough the amount of commercial real estate per resident is rising.

Commercial Property Value Per Capita
Year Commercial Property Value Population
2007 $691,897,960.00 65994 $10,484.26
2015 $879,818,130.00 83102 $10,587.21
0.98%
Source: Johns Creek CAFR 2015

So as residential property values fall per resident, commercial property values are rising per resident.

I doubt that has been the objective of many of the residents within our community.  Those that reside on Findley Road at City Hall are undoubtedly happy about this outcome, however.

After all, they are the ones who continue to vote and push us along this path of more commercial development and higher density housing.

 

 

 

 

 

Did You Really Think It Was Going To Be Easy?

Misplaced outrage is all around us.  I don’t even have to give you the examples, but it’s likely even you have been guilty of having misplaced outrage.

“Did you hear what So and So said? What are we going to do?”

Establishment politicians have a major advantage over un-elected challengers.  They are reelected at rates that boggle the mind when you consider how unhappy we are with their performances.  In November, the majority of you will vote to keep your Representatives and your Senators despite the fact that they have been in office as the debt of this nation has gone from $7 trillion to $20 trillion, wars around the planet we participate in are multiplying and the US economy dies a slow and steady death. Continue reading

Dismal Jobs Report Yet Again

 

 

Once again we have gotten the Non-Farm Payroll number and once again we have evidence that the economy continues to weaken.  Below you will see a chart of the rate of growth of jobs over the last twelve months.

With the September 2016 number, we can see that growth for the 12 months ending September 2016 is the lowest of the last four years, and the trend for the year overall has been decidedly downward.

Meanwhile the Federal Reserve Bank continues to pepper us with upbeat reports of the strength of the Jobs Market in the United States.

When you look at where we are and where we have been the last four years, what conclusion do you draw?

Exactly.

And the October 2016 is gonna have to be a doozy to even keep us at our current level of YOY growth.  What will that number need to be at a minimum?

295 thousand jobs added will need to be the number.  Unless some serious magic occurs, do not expect that to be a possibility.

The economy continues to weaken.  Job growth supports that conclusion. So does Corporate Profits.

At some point the Stock Market Indexes will also have to come to terms with the realization that we are not in the economic reality they continue to believe we are in.

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