This is a continuation of the conversation at the table on Thanksgiving Day between Linda, Mark and others I recently wrote in an email…

In that email I promised to explain overhead. Before I begin my explanation, allow me to explain why I am qualified to speak on such things.

Between the years of 1983 and 1992, I was employed in the aerospace industry, first as an engineer. My claim to fame was I designed the tools used to maintain the B-1B bomber. However, day the Challenger blew up; I observed hundreds of engineers frantically re-designing the space shuttle with one question, “Was it MY design that failed?”

My response to that observation was “I’m not sure I want that responsibility. I’m happy to support those who have that responsibility but I really don’t want to be the culprit who made a poor engineering decision like that.”

So I transferred to Advanced Research Sourcing, which means I purchased outsourced engineering services used to advanced aerospace technology.

When I would get ready to buy research for those proverbial $300 hammers and $600 toilet seats (that’s another story for another day), the subcontractor would provide details of why they were charging the money they were. (This is the law, which states over a certain amount of money, the subcontractor is required to provide details of their cost estimates on what the money is being used for).

Let’s break down the overall cost.

Direct Costs

In finance, direct costs are those costs that are associated with a specific project, department, or activity. Sometimes referred to as hard costs, expenses of this type are found with just about every type of business activity, beginning with research and development, moving through sales and marketing campaigns, and into the production of different types of goods and services. A direct cost is often some type of fixed expense, but there are some situations where a variable expense may also fall into this category.

Indirect Costs

Indirect costs are business expenses that are not directly related to a particular product or function within the general operation. Costs of this type tend to have an impact on the overall operation of the business, making it very difficult to charge the costs to a specific department or associate them with one function. Costs of this type are sometimes referred to as overhead, a term that helps to describe the broad application of these costs.

Overhead Costs

A business may take in one sum of money, but it is not likely that all of it can be considered profit. This is because a business is generally required to pay expenses. Those expenses are commonly referred to as overhead costs. Examples of an overhead cost include salaries, maintenance, and production expenses.

The above explanation on Direct, Indirect and Overhead was taken from mbaknol.com should you desire to understand this in greater detail.

ANYWHO, let’s put this in understandable terms.

Let’s say you want a sports car.

You could have an engineering team design and build a sports car for you.

You could pay time and material (unlikely) which means you would cover ALL the labor and materials it costs to design and build your sports car and since you covered ALL of the expenses, the engineering team wouldn’t have to charge much profit (possibly as low as zero profit).

You could tell the engineering team I will only pay you $150,000 for this sports car and you’ll have a fully functioning sports car delivered to me by December 25, 2022. Since the engineering team is now stuck with building the car within a specific budget, it’s a risk, so they charge a larger percent profit to cover that risk.

Getting back to Direct, Indirect and Overhead costs, typical overhead costs for a business are 5-15%.

Now we’re ready to continue the conversation at the Thanksgiving table…

I told Mark, if you recall, that gov’ment’s overhead costs is 78%. This means if the gov’ment passes a $1.2 trillion infrastructure bill, 78% of that $1.2 trillion, or $936 billion will be overhead, leaving $264 billion for costs attributable to the actual project.

“Here’s the question, Mark, if a business discloses an overhead rate of 5-15% to government when bidding a large contract, why is government allowed a 78% overhead when doing projects it is running. A business doesn’t have a second set of books where it charges the government 5-15% overhead while you are charged a 78-100 or 200% overhead if you buy something from that same company.

“Why is gov’ment allowed to be so inefficient they have a slush fund of 520% called overhead?”

“Additionally, although government does not charge a profit on the work they do, they do borrow 43% of every dollar they spend.

“As I noted before, the $1.2 trillion infrastructure bill which was recently signed has a $936 billion overhead within those funds and the government will borrow $516 billion to administrate which will end up being $264 billion of work completed, IF the work comes within budget.”

Still many believe businesses are bad and government is their savior from business. THIS is the illogical reasoning a person must have to believe free-enterprise and Capitalism is bad while gov’ment running society through a socialist regime is the pinnacle of virtue.

Should you like to understand HOW to yet flourish as an individual, a family or a company in a socialist regime, I can tell you.

It’s easy and simple. And it’s outlined entirely in my book found at TedLeithart.com

BTW, should you sign up for my emails, you’ll be on my priority list to give you first-dibs at the book.

AND, if you want your extended family and SOCIETY to do well in a socialist or tyrannical society, its imperative your friends, family and society has their own reference tool so these lessons can be easily referred to on a consistent basis.

That’s https://TedLeithart.com

It’s always wonderful to get together with friends and family to learn what’s going on in their lives, relax over a little football on the television and relish how blessed we are in the United States. Those who took the day to be angry rather than count their blessings no matter how the day evolved from 1620 when the Pilgrims landed at Plymouth to November 25, 2021 I personally have little use for. But I digress…

Somehow, somewhere Tesla and electric cars and renewable energy came up during dinner around the people I was enjoying lunch with. One person, Linda, claimed the reason renewables are not as advanced in the United States as they are in some other nations, such as Germany or Norway, was the United States was too greedy to let go of some of their ill-earned dollars to develop renewables in this country.

I asked whether the infrastructure was there for renewables and the reply came from Mark that no infrastructure is needed with renewable energy as everything will be self-contained. “As in”, I asked. His reply was “I don’t understand what you mean.”

“As in tell me how everything needed for renewables will be self-contained,” I explained.

“Well, with renewables solar and electric panels on individual homes would charge the electric cars and other things needed to live on a day –to-day basis,” Mark replied.

“That’s not true. A house which has solar panels is not independent of the grid as many suppose. Actually, a house with solar panels is feeding the grid, which is little different than the coal or diesel power plant feeding the grid. The difference is the coal plant provides roughly 70% of the power needed whereas, even in Germany, solar panels provide only 2% of the power needed” I stated.

I continued, “Furthermore, having government develop a renewable power grid is not cost effective as government has a 78% overhead cost. As a result, any power grid developed by the government will cost multiple times what it costs the private sector to develop.”

Mark replied he found it impossible government spent 78% of the money takes in on salaries.

My reply was “I didn’t say that”

How overhead and costs work will be explained in my next email but suffice to say I find a nation which has spent over $4 trillion on Covid, just signed a $1.2 trillion package on infrastructure and is considering another spending bill of $1.7 trillion.

That’s $6.9 trillion in less than 2 years. I recently read where the government is borrowing at a rate of $7 billion per day since March 2020.

With spending and borrowing like this, it won’t be long before $6.9 trillion in Federal Reserve notes will be worth less than the $20 Morgan gold piece I’ve owned for several years.

Time flies. As recently as two years ago, the USA was experiencing what was considered the best economic situation of the last 5000 years.

Today we are short oil and gasoline, short food, short memory (at least our President has one), supply chain shortages, and very short on the freedom we have taken for granted for over 200 years.

In fact, this week, with gasoline prices at record highs, the #Bidenadministration determined to release 50 million barrels of oil from our #strategicenergyreserves. Of course there are arguments for and against using our strategic oil reserves to manipulate a small portion of our economy for a short period of time, but that’s not my concern.

I did a little research on the internet (yeah, I know, I know, about the credibility of weighing what I believe based on the Internet) but I digress.

Actually, digression in today’s world may be the pinnacle of yours and my day, given the comments In the third sentence of this thought.

OK – I’m almost back on track (and just in time before my pediatrician niece suggests I have ADD again…

My research panned out. In 2020, the USA was using 18 million barrels of oil PER DAY.

Which means, since I have an engineering degree, I can calculate in my head that in less than three days we’ll have used up all 50 million barrels from the energy reserve (with little in fuel pricing as economics is a SCIENCE as well, and not a whim).

So good ol’ Joe and his posse are trotting out a PR campaign to show how the govment (government) is concerned about the high fuel prices.

I wonder whether Joe’s posse has taken the time to research how Keystone and keeping other oil pipelines online as well as keeping the energy policies from the Trump Administration intact (when we were an energy exporting machine, way, way back in 2020) compares to dumping a paltry 50 million barrels on the market.

NA.

Some may argue there too little gold and silver for all the transactions in today’s society. While gold and silver is physically rare, the desire is to have a currency that is worth the same today as it was 50 years ago as it was 150 years ago. As a result, a Ford would continue to sell for a few hundred dollars, $5 per day wage would still be considered a good worker’s wage and houses could still be purchased for $5,000.

Conversely, under our current monetary policy, the money you save to purchase a collectible car when you retire loses 50% of its value every 10 years. For which, if you are as lucky as I am, you receive a 3% interest rate.

SECONDLY, asking government to pass a Saver’s Protection Act is like asking the fox to protect the proverbial hen house. Government is the ONLY entity that can create inflation .

From inflationdata.com  “Monetary inflation is commonly referred to as the government “printing money” although the actual process is a bit more complex than just cranking up the printing presses but the effects are essentially the same.”

In essence, asking government to protect savings without cutting off their ability to print money is meaningless.

Additionally, asking the government to insure our savings receive a minimum interest rate which reflects the inflation rate of the past year can simply be ignored by government redefining the base of the CPI (which is does regularly) . Government redefines data to manipulate the statistics to reflect what it desires.

The Bottom line is Power corrupts and absolute power corrupts absolutely. THIS is another reason why you MUST understand how to take care of yourself as well as your family in these times – in tyrannical times – and in socialist regimes.

I’ll show you how – specifically – no song and dance – no PR campaign other than telling you why you need my book – to do this.

Sign up to my email list to keep ahead of the information on the book and get first dibs on getting this vital information into your hands (and minds) at TedLeithart.com

Last weekend I took my sons and my oldest grandson to Penn Station for lunch. It was our second choice as our favorite pizza joint was working on their pizza ovens.

We each ordered a sandwich (a total of 4 sandwiches), three small fries and 4 small drinks.

When I got to the cashier, she said, ‘that’ll be $51.”

My reply was “$51? For what?”

“For what you ordered” came the reply.

Still astonished, I asked to see a detailed copy of my receipt, which she was glad to print out for me.

After perusing the detailed receipt, the restaurant was correct. $51.

The next day, my wife commented she was not going to cook so we ordered in for the three of us, and $41 was the total.

This is not news. Everyone is experiencing it as this time. We’re told on the news this is due to a food shortage, which was a subset of the supply chain problems the country is experiencing.

It isn’t. That’s fake news.

I googled the following headlines while writing this want. These are from April 2020.

“USDA let millions of pounds of food rot while food-bank…” – Politico

“A disastrous situation: Mountains of food wasted.” – The Guardian

“Food rotting in the fields but shortages in the stores” – Mishtalk

“American farmers ordered to kill livestock and destroy crops” – Easton Spectator

“Who is telling our farmers to kill their … cattle and spill their milk?” – Investment Watchdog

What I’m attempting to demonstrate is the food shortage has been created by the same entity that created our current inflationary times.

Government.

As Ronald Reagan used to say – Government is the problem, not the solution.

When government spends more money than it takes in, they make up the difference by printing more paper money than the tangible, limited supply of rare commodities of gold and silver.

You may argue the USA has not had a gold standard since 1971 and you’d be correct. The inflation rate, since we’ve gotten off the gold standard is 582%.

Let’s look at it this way.

I own a 1988 Toyota Supra. Hagerty Insurance values it at $8,000.

So I want to borrow $8,000 to buy another affordable classic – an old Corvette. I give the bank the title to the Supra in order to get the Corvette.

Without the bank’s knowledge, I copied the title 9 times and borrowed money from you, my friend Randal, another friend John, and a few other acquaintances.  Now I have $80,000 and the bank has the Supra title and 9 other individuals BELIEVE they have a Supra title as collateral for loaning me money.

When you all catch up to me, I may go to prison for fraud. At the very least, I must make restitution to those I intended to defraud and I haven’t done any favors for myself, financially or ethically.

But when it comes to the government and they do the same thing daily, to the point of borrowing $7 billion A DAY since the beginning of the pandemic, we shrug it off and say, “Well, we owe it to ourselves” or “I’m glad I won’t be alive when the bill for all this debt comes due…”

Inflation is a wonderful tool used to take strong, free societies and turn them into a socialist society, much like the Weimar Republic evolved into Nazi Germany over a period of 15 years. America is marching to the same tune, almost to the same lock-step tempo.

Can we stop this march? SURE.

How do you thrive and provide for yourself and your family in such circumstances? SIMPLE.

My upcoming book, available through TedLeithart.com will reveal all. Sign up to my email list and you’ll be the first ones to know when the book is available.

Market Manipulations that makes you poor, them rich and your children slaves

Economics that stand the test of time (and multiple civilizations) isn’t difficult to understand. Nor is knowing how to make a living in a business or in a job difficult. But throw manipulation and greed into the equation, and you have something altogether different.

To illustrate my point, I will call on a few historical references.

Did you know there was a recession at the end of World War One? There was. It was short lived as government did nothing to interfere with the economy. As a result, the markets and the economy had a market correction and shortly thereafter, within months, the economy was booming again.

Conversely, a local bank President in Cincinnati was investing heavily in Florida real estate from 2001-2006. A personal friend who was working for this President said he was making $50,000 a day on the Florida market during these six years. That’s $18 million a year for six years. This banker recognized the Florida real estate market was overheating in 2006 and withdrew from the market that year, having made over $100 million during that time.

Other savvy investors did similar investing to this bank President. But the economic principles which were played during these six years were made lawful in Washington. As a result, millions and billions were made by the wealthy that then left the market on a high note to less-savvy investors who took a financial bath in 2008-2009.

You see similar things today. For example, the coal industry has been laid to waste due to environmental concerns and climate change. This is allowing savvy investors with the money to play the market long-term to buy the industry at pennies on the dollar, only to reap millions and billions when coal becomes favorable to political entities.

This is similar to investing in the egg producing industry while spending quite a large bundle on marketing how bad cholesterol is. When these investors achieve a near-monopoly on the industry, new research comes out about how healthy eggs are and the problem isn’t cholesterol at all, it’s triglycerides. Now that eggs are good, especially the organic scratch eggs, you can sell eggs for 500 or more percent higher than what they sold for a short time ago.

These are symptoms and as any good scientist knows, you have to get to the core problem to find a solution.

What’s the core problem? Yes, it’s unethical and immoral individuals in politics as well as banking as well as elsewhere, but the core problem is these individuals can create money at will.

Once we got rid of the gold standard, where the US dollar was fixed to a monetary standard that has lasted for several millennia, it was easy to manipulate banking and markets. After all, you have an unlimited supply of money.

And today it’s even more so as, with digital ‘money’, you don’t even print it (although not printing it does lead to a cash shortage (sound familiar??)).

What does all this high phaluting talk mean?

Let’s say I want to borrow $100,000 from you and I use my house as collateral. That’s a reasonable deal, depending on what my house is worth.

But I want much, much more than $100,000. So I sign a similar agreement with 9 other people.

As a result, I got $1,000,000, not one hundred thousand.  You and the other nine people have papers that say you have collateral (my house) when in actuality you have 10% of my house as your collateral, or $10,000.

I disappear and change my identity and you and 9 others argue over who gets the house.

How immoral? You’re right.

What a scoundrel? Absolutely.

I should be tarred and feathered and turned over to debtor’s prison until I pay off all 10 of you? That’s reasonable.

Then why do you let your politicians do this to you EVERY SINGLE day to the tune of adding $3.2 trillion to the national debt on an annual basis? That’s $3.2 trillion in new debt every year which your children and grand-children will be paying off, with interest.

Are your elected representatives immoral? I’d say so as they’re spending 78% of the new debt on themselves while only spending 22% on the people they say they are helping…

Is it time to tar and feather the whole of Washington, DC? I think so.

Just make sure you invest in tar and feathers before marching on Washington. You might as well make some money while getting some satisfaction…

I ran into Chip last Thursday. Chip and I worked together YEARS ago when aerospace was much more diverse than it is today.

We caught up on family and what we are doing in our lives. This took a while as Chip didn’t know I was married (I got married right before Y2K didn’t hit).

Chip also has had different life experiences so it’s interesting and insightful to hear his perspective on things. We talked about current events, political events and the massive changes over the past couple of years due to the pandemic.

Although we disagreed on how the US Government is spending (or should be spending) our children’s wealth, we did agree that the government has grown tremendously large compared to where it was in the 1980s and 1990s when we worked together.

I asked him “How are your plans for retirement coming along?” to which he replied, “It’s difficult these days.” I had to agree. I told him I planned to retire on February 1, 2049 (this is a factual date, even though I am 63 when I write this).

“Can you imagine what the country will look like in 2049 considering the changes we’ve witnessed since the 1990s and extrapolating this trajectory another 28 years?” Chip asked. I wondered how many czars, departments and overall, the size of the US bureaucracy in 2049. “I don’t want to think about it,” was Chip’s reply.

“There is a simple way to fix all this,” I replied.

“Really? How?” Chip responded.

“Easy. You may laugh at the term I use but it describes the entire situation. I call it ‘DEFUND DC.’”

“What do you mean by that? Are you some kind of anarchist?” came the reply.

“Not at all,” I replied. Continuing, I asked, “Aren’t you a Pastor these days?”

“Yes” Chip answered.

“Have you ever heard of Dave Ramsey and Financial Peace University?”

“Yes, I have. In fact, our church hosts those classes from time to time.”

“That’s great as it’s a simple way to educate the average person or couple on how to become financially savvy as well as wealthy.”

“So what does financial peace have to do with Washington? As well as your DEFUND DC suggestion?”

“One of the first tenets of financial peace is to get control of your money by setting a budget and sticking with it. A lot of people have to stop or turn off or possibly sell things in order to get to living within their means.”

“And?”

“So Defund DC is simply putting the country on a budget to live within its means. For example, Washington borrows 43 cents for every dollar spends. It also has a 78% overhead, meaning Washington spends 78 cents of every dollar they spend on themselves and ‘feeding the beast.’ Only 22 cents of every dollar actually goes to the intended recipient.

“Now if you call your Congressional Representative and ask them how much they spent on this program or that, they can tell you what the government officially claims they spent, but they have no idea where the money actually went, how much was used, where it was used, where any kick-backs or payoffs occurred, and so forth.

“In the recently passed infrastructure bill, of the $1.2 trillion within the bill, the government will BORROW $516 Billion and spend $936 billion on itself, leaving $264 billion to assist the intended industries, recipients, and so on.

“Now Chip, do you mind telling me (in ballpark terms) how much the church paid you last year?”

Chip was hesitant but I offered to share what I made and where I made it just to even the field. He replied he was paid $52,500 in 2020.

“OK. So, Chip, of the $52,500 you took in, did you borrow another $22,575 on your credit cards in order to live a $75k lifestyle?”

“Of course not. That’s a quick way to seriously hurt the family as well as be a poor example to my ‘flock.’”

“I understand. Did you use $58,500 on yourself, such as your car, your vacations, your clothes and other things leaving $16,575 for your wife and family to live on?”

“The word has some harsh things to say about people who live like that… To paraphrase, I would be worse than an unbeliever.”

“But, that’s exactly the type of figures your Congressional Representative is doing to the entire country. And, like I said, they have no clue where the money is going, how much is going there, and so forth. They simply borrow more when they run out.”

“Wow, Ted, when you put it in those terms, our Congressional representatives and Senators should be put in prison for fraud and deceit.”

“Chip, do you ever see that happening?”

“I don’t see how…”

“That’s why we have to DEFUND DC – it’s the only way I can think of to get a handle on this. Turn everything off and turn back on ONLY the essentials the Constitution says are within the Federal government’s authority. And return everything else to the States or to private companies.”

“But, Ted that would be chaos?”

“WHY?”

“Well, if you don’t have the government running these things, think of the amount of abuse that’s possible…”

“Abuse, as it more than now? After all, if a private company or a person mismanages their money, they go out of business (as they should). I’m simply saying why not have the Federal government act like we expect our friends, our neighbors and the businesses we frequent to act.

“Also, England did this during the late 1970s. It was called Privatisation under Margaret Thatcher.

“Isn’t it interesting that England THRIVED when it “DEFUNDED the GOVERNMENT through Privatization.”

“Hmmm, Ted. You’ve given me something to think about. DEFUND DC. It does have a familiar ring to it.”

“That ring, Chip, is all the extra coinage in your pockets after we DEFUND DC…”

Vice President Kamala Harris visited the Goddard Space Flight Center in Greenbelt, Maryland, on Friday, November 5, “to see vital climate science work.”

During a presentation on how NASA uses technology to map out climate and changes in the climate, the VP asked,

“Can you measure trees — part of that data that you are referring to, [and it’s an issue of] EJ, environmental justice — that you can also track by race their averages in terms of the number of trees in the neighborhoods where people live?”

This resulted in many on social media ridiculing the vice president online and even referring to this incident as #BlackTreesMatter .

When my brother heard of Ms. Harris’ question, he asked whether she was speaking of black neighborhoods. He lives on four acres and is surrounded by trees, which he noted as evidence that his property has a surplus of trees.

His response got my fractal mind to wonder whether, if black trees matter, do green trees matter as well?

Do green trees possess green privilege?

Do green trees know they obviously are green privileged?

Which political party recognized green trees were green privileged and demanded other colored trees be equally represented?

Should tree huggers protest the obvious discrimination against trees of color (other than green)?

Should green trees be ashamed of their green-ness?

Since green trees have more chlorophyll than trees which are not green, shouldn’t green trees provide reparations to non-green trees so that all trees have the same amount of chlorophyll. Without this happening, would equity ever be achieved?

And do black trees tend to become green with envy?

All this talk of climate change, #BlackTreesMatter and green privileged trees is making me see red.