A google search shows that most responsible governments and economists recommend maintaining a 3% or less deficit - largely to reduce the risk of a situation similar to what large parts of Europe are presently enduring - a situation in which a nation effectively loses it's sovereign status by having others dictate public policy to them.
The national deficits of nations like Spain, Portugal and Greece have effectively created a larger national security threat to these nations than any realistic threat that exists today.
In 2011, Federal Revenue was approximately $2.3 Trillion and as we noted last week, spending was about $3.6 Trillion - thus creating a $1.3 Trillion deficit against a GDP of about $15 Trillion. This represents over 8% of GDP - nearly triple of what the target should be.
Last week we budgeted for about $2.95 Trillion in Federal spending; in order to keep the deficit at 3% of GDP, this means we need to take in about $2.5 Trillion in Tax Revenue. Let's get started.
The goals of our tax policy are fairly straight forward:
-Reduce tax burdens on those who directly create jobs (small businesses, corporations, investors).
-Create a progressive tax system.
-Simplify the tax code.
-Generate sufficient revenue to protect national security - and no more.
Personal Taxes
Currently this is the largest source of Federal Revenue.
We will have two types of taxes and all will be tied to the median personal wage (currently just over $26,000) - see Social Security Data.
One is the wage tax and it will have a structure has follows:
Up to 50% of the median wage has a 12% tax rate.
Up to 150% of the median wage will have a 20% incremental tax rate.
Up to 500% of the median wage will have a 25% incremental tax rate.
Up to 1000% of the median wage will have a 35% incremental tax rate.
> 1000% of the median wage will have a 42% incremental tax rate.
This will apply to all workers - no deductions or credits will be offered (applies to all taxes).
The next is the non-wage tax. It applies to all non-wage income (dividends, capital gains, rents, small business income, etc).
It has two rates and can apply to married couples:
Rate 1: Up to 500% of the median wage will have a 12% tax rate.
Rate 2: Above that will have a 20% incremental tax rate.
Non-wage income starts at zero. Example: A worker makes $70,000 and his spouse makes $30,000. They have dividends/capital gains of $1,500.
The worker would be taxed at the 25% incremental tax rate while his spouse would be taxed at the 20% incremental rate. They would pay 12% of their dividends and capital gains in taxes - and would do so if they each earned $1 million; unless their non-working income exceeded 500% of the median wage.
If the worker earned $70,000 at his own business instead of working at Corporation X, he would pay 12%.
The goal of this is to encourage investment and entreprenurship - this raises personal income taxes considerably.
Payroll Taxes
This is fairly simple; it reduces the payroll tax to 2.5% for both worker and employer; a substantial reduction compared to now, even with the payroll tax holiday that reduces the social security wage to 4.2%.
This is the largest reduction we will give to any revenue source - and it's goal is to reduce obstacles to hiring.
Estate Taxes
This will revert to Clinton era Estate Taxes (would increase taxes to approximately $100 billion per year from about 20).
Excise Taxes
As mentioned in part 2, we will legalize marijuana and prostitution - regulate both - and tax them at rates comparable to liquor and alcohol. We will raise excise taxes by about 20% across the board.
Customs, Duties, Etc.
This will remain where it is.
Corporate Taxes
This will be a flat 12%; this will allow corporations to focus on profit maximization, as opposed to tax evasion.
Divorce Tax
This will be 17.5% of the median wage. If adultery, physical abuse or monetary deception can be proven, the offender will pay the entire tax; otherwise the burden shall be split equally, unless there is a provision in a prenuptial agreement specifying otherwise. Divorce is a destructive force upon society; this will create a disincentive for non-committed couples to marry.
Combined, the following taxes should raise about $2.5 Trillion based on current macroeconomic trends.
Part 5 (and the final chapter) will list all revenue sources.
Conclusion
On net, taxes would rise - but would become more simplistic, easy to understand. Everyone would pay something - but individuals could not point to large profit generating companies paying less taxes then they do.
Individuals who fund or create jobs would be rewarded via the tax structure.
And America's future would be secured (I hope).
Wednesday, May 23, 2012
Sunday, May 13, 2012
Lakers vs Thunder: Hero Ball - Kobe Bryant and Russell Westbrook
This is going to be a strange post because it will be a reversal of the format of the other posts.
First, while I like the Thunder to win the series, I think that the nearly 3:1 line that Vegas has is a little bit too high of a price to pay for the Thunder. By all metrics, the Thunder are clearly better, but if you played this series 100 times, I think the Lakers would win somewhere in the high 30's to low 40's, as opposed to the 27 % chance Vegas gives them. While my tool isn't the biggest fan in the world of Metta World Peace, it likes him better than the replacements who played in his stead while he served a suspension for giving James Harden an elbow to the back of the head. The simulator tool actually predicted a Laker loss to Denver; but it gave them a 48% win probability, so Los Angeles defeating Denver in 7 wasn't that great of a shock. In retrospect, I wish I would've written about this series before hand, as opposed to doing my analysis after the fact because it would've made for a more interesting piece, but hindsight is 20/20.
Hero Ball and Kobe Bryant
Kobe Bryant is in a serious state of decline. Below are his per minute gross output numbers that my tool generates (higher numbers are better) from 2000 on.
| Kobe Bryant | 2000 | $294,604.51 |
| Kobe Bryant | 2001 | $327,565.70 |
| Kobe Bryant | 2002 | $325,989.59 |
| Kobe Bryant | 2003 | $368,781.61 |
| Kobe Bryant | 2004 | $331,419.80 |
| Kobe Bryant | 2005 | $324,929.19 |
| Kobe Bryant | 2006 | $388,886.23 |
| Kobe Bryant | 2007 | $369,019.34 |
| Kobe Bryant | 2008 | $365,010.04 |
| Kobe Bryant | 2009 | $364,060.61 |
| Kobe Bryant | 2010 | $331,553.92 |
| Kobe Bryant | 2011 | $332,981.94 |
| Kobe Bryant | 2012 | $312,857.91 |
His per minute gross output is still the highest on the Lakers this year, and his overall gross output (not adjusted by minutes) was still 5th amongst all players in the playoffs, but his productivity is nowhere near it's peak. Unfortunately for the Lakers, Bryant hasn't yet come to the realization that he isn't as good as he once was. His shots per minute are higher than at any other point in his career except for 2006. Compounding the problem, his true shooting percentage has declined to the lowest of his illustrious career.
In the simulation, we obviously used the 2012 version of Kobe Bryant. But what if he adjusted his game a bit? As a hypothetical exercise, I used Kobe Bryant circa 2008 - one that shot 12% less, maintained the same assist rate as present, but was a superior rebounder, defender and more efficient shooter?
In the scenario where I used the 2008 Kobe Bryant, the tool projects a Laker win; and that is the recipe for success for Los Angeles. For the Lakers to win, Bryant must expend less of his energies on scoring the ball and act as an offensive facilitator - allowing the Lakers to pound it inside to Gasol/Bynum, let Sessions run the point (which he did very well in the regular season) - pick his spots offensively, help Los Angeles control the boards and help corral Durant. I don't necessarily expect that Bryant would be able to replicate his 2008 self in terms of rebounding, defense or shooting percentage, but if he focused on those things rather than shooting at his present rate, that would substantially improve the Lakers' chances.
Hero Ball and Russell Westbrook
Cue Hubie Brown impersonation.
Now, you're Russell Westbrook, point guard for the Oklahoma City Thunder. You're playing alongside Kevin Durant, the top scorer in this league. He makes 54% of his 2 point field goal attempts, 39% of his 3 point field goal attempts and gets to the foul line 37% of the time on his 2 point attempts, where he shoots 86%. All of these are outstanding figures. You need to get him the basketball every time down the court where he wants the basketball. *Impersonation ended.*
Simple, right? Not really. Durant shoots 15% less per minute than Bryant, which you could partially blame on the fact that Bryant shoots at such an astonishing clip, except for the fact that Russell Westbrook has a HIGHER shot rate than Durant. Westbrook has .54 shots per minute as opposed to .51 for Durant.
In all fairness to Westbrook, he IS the point guard of this team and he does other things to help the team win like distribute the ball, rebound and defend well but in the playoffs, the Thunder would be better served if Westbrook looked to distribute to Harden and Durant - selectively pick his spots against the Lakers and get his teammates more involved.
Saturday, May 12, 2012
Mission: Protect the Future of the US (Part 3) - what will we spend on?
In the 3rd post of this series, we're going to construct a detailed level of what the U.S. will spend on. Any department that is not explicitly mentioned has been intentionally omitted.
For starters, let's evaluate where we're coming from.
In FY 2011, the United States spent 3.6 Trillion Dollars, or about 23% of GDP. The budget I've outlined projects spending levels just over 2.95 Trillion Dollars; about 19% of GDP.
Let's start breaking the budget down by department.
National Health Administration
As I've hinted at in prior posts, the United States' health outcomes are sub-optimal. The United States spends about 50% more per capita on health care than any other nation. Even with poor US personal health habits (discussed in the preceding link), one would think that the high spending levels would put the United States amongst the world leaders in life expectancy. According to the CIA 2011 fact book, the United States presently ranks 50th in life expectancy for newborns.
The National Health Administration would be a single payer health system that would operate similar to Canada or Great Britain's; largely composed of current doctors/health care professionals. We won't focus as much on the details as we will the concept - but based on current health care outcomes and satisfaction rates of members of the citizens of the US, Canada and Great Britain, a change is clearly in order.
Spending and budget levels would be equivalent to 1/6 of the median wage multiplied by the current population and would come in at about 1.36 Trillion dollars. The NHA would house the Center for Disease Control and Food/Drug Administration. Under this proposal, no American would receive a health care bill ever again (though I'd be misleading if I omitted the fact that taxes will be paying for it). Non-citizens would not be eligible for treatment from the NHA unless they were paying the bill out of pocket, or had proof of international insurance, or there was an agreement with a foreign government to pay the bill.
Social Security
As discussed at length in parts 1 and 2, the biggest financial risk to middle class Americans who have saved at reasonable levels is health care - the top link in the NHA discussion exposed why - the U.S. spends significantly more than any nation on health care per capita and has a higher proportion of that spending financed by the private sector than any OECD country. Given that the U.S. Government presently foots the bill for lower income citizens, this leaves the middle class at risk. The NHA eliminates that risk but has a heavy price; that price must be compensated for by reducing spending in other areas; the Social Security system is one of those systems.
The new Social Security System will work as follows:
Upon birth or admission to the U.S. as an immigrant, each U.S. Citizen will receive a credit equal to 1/6th of their remaining life expectancy - expressed in months. With present life expectancy rates, this comes out to about 13 years. If a citizen is enrolled full time in a trade school, college or university, at age 18 they will be eligible to draw on their Social Security credits. If not, they will be eligible to draw on their credits at age 21.
The credits would be tradeable in the open market - individuals could theoretically sell their social security credits in order to purchase a house, or buy social security credits to establish a long term pension for themselves if they were more risk averse. Social Security recipients would NOT be taxed on their Social Security receipts. Citizens would have to draw on the credit at the 1st of each month, and would receive a check for 40% of the median monthly wage immediately. Once a person's credits were gone, they would be gone however - and survivor's benefits would not exist; the credits would be tied to a specific person.
The 800 pound elephant in the room is what about those currently on Social Security? Each existing U.S. Citizen would instantly get about 13 years worth of credits; meaning that everyone presently on Social Security would have the option (this protects senior citizens) to draw on their Social Security credits.
Social Security spending would average out to about $550 billion in present spending.
Defense
The Department of Defense budget would be set at $425 billion. This represents a reduction of nearly $300 billion. However, exploring the above link, one can observe that in real spending relative to the last 50 years, that the $425 billion figure is more typical than the amount spent on defense by the present administration. This spending figure is higher than all but one year in the 1970's and is higher than defense spending levels in 1982 - when Ronald Reagan was President. All figures above are adjusted for inflation.
Congress would not appropriate specific spending funds; the DOD would set the budget for the various departments of the Armed Forces and then the Departments themselves would appropriate budgets as they saw fit. The only caveat is that U.S. Military bases in OECD nations would be shut down immediately - or the host country could volunteer to make payments to the soldiers manning them and pay for upkeep of the base and operations of the base. NASA would be transferred to the Air Force which would be renamed Air/Space Force.
This would effectively end United States subsidies to other nations' defense forces.
Discretionary Spending
Each Department will be touched on briefly with a quick explanation of it's mission. If you're interested in how the levels compare to present levels this link has a very detailed outline.
Child Care Program: The legal guardian of each child will receive a payment equal to 4% of the median wage. This would represent a current spending level of about $75 billion.
Veterans Affairs: The NHA eliminates most of the need for this department. This department's new mission would be to establish cooperative ventures with universities and businesses to help our soldiers successfully transition from the military workforce to the civilian workforce after their service to our country has ended. It would also include helping soldiers cope psychologically with the shift from military to civilian life, provide counseling for family members who had lost loved ones and provide a help center if veterans had questions or issues regarding benefits due.
Spending level: $10 billion.
Office of Personnel Management
This would have a budget of $20 billion and it's responsibilities would include administering pension payments and serve as a global human resources organization for non-defense oriented administrations.
Economic Analysis
This would have an operating budget of $3 billion and an effective budget of $30 billion.
It would serve a dual role. The first role would be regarding statistical/projections. It would replace the CBO.
The second role would be regarding economic development. State and local agencies would submit proposals for development that the Federal Government would share 1/3 of the cost in. It would be evaluated by the economic analysis department and projects with the highest projected ROI would be approved. This opens up holes for corruption and any suspicion of corruption would be dealt with very harshly - penalties along the lines of 25 years in prison.
Energy and Environment
These two administrations would be combined and given an operating budget of $3 billion with a total $30 billion budget. The remainder would be used to invest in renewable energy sources.
Department of State
A budget of $30 billion would be allotted and would absorb the Department of the Interior. It would re-orient it's self to create and re-invent a smooth immigration process; this would be it's top mission. This is a slight increase to it's budget - because it's primary responsibility would now be a large one.
Department of Treasury (includes national debt - about $200 Billion)
The budget would be $300 Billion. In part 4, we'll discuss why the size of the IRS would shrink.
Department of Transportation
This budget would be $100 Billion. 12.5% of it's budget would be similar to the Economic Analysis Department; the Federal Government would chip in on state and local transportation projects - those projects would be evaluated on ROI, with preference given to projects that do not utilize petroleum consuming vehicles. This is one of the few departments to receive an increase to it's budget.
Justice Department
The Justice Department would be the watchdog for the Energy & Environment, the DOT and the Economic Analysis departments.
With marijuana legalized (see part 2), the Justice Department would focus less on drugs and more on federal crime - specifically fraud prevention.
Budget level: $15 Billion.
Legislative + Executive Office of the President:
A budget of $4 Billion would be allotted.
Part 4 will discuss Federal Revenues.
For starters, let's evaluate where we're coming from.
In FY 2011, the United States spent 3.6 Trillion Dollars, or about 23% of GDP. The budget I've outlined projects spending levels just over 2.95 Trillion Dollars; about 19% of GDP.
Let's start breaking the budget down by department.
National Health Administration
As I've hinted at in prior posts, the United States' health outcomes are sub-optimal. The United States spends about 50% more per capita on health care than any other nation. Even with poor US personal health habits (discussed in the preceding link), one would think that the high spending levels would put the United States amongst the world leaders in life expectancy. According to the CIA 2011 fact book, the United States presently ranks 50th in life expectancy for newborns.
The National Health Administration would be a single payer health system that would operate similar to Canada or Great Britain's; largely composed of current doctors/health care professionals. We won't focus as much on the details as we will the concept - but based on current health care outcomes and satisfaction rates of members of the citizens of the US, Canada and Great Britain, a change is clearly in order.
Spending and budget levels would be equivalent to 1/6 of the median wage multiplied by the current population and would come in at about 1.36 Trillion dollars. The NHA would house the Center for Disease Control and Food/Drug Administration. Under this proposal, no American would receive a health care bill ever again (though I'd be misleading if I omitted the fact that taxes will be paying for it). Non-citizens would not be eligible for treatment from the NHA unless they were paying the bill out of pocket, or had proof of international insurance, or there was an agreement with a foreign government to pay the bill.
Social Security
As discussed at length in parts 1 and 2, the biggest financial risk to middle class Americans who have saved at reasonable levels is health care - the top link in the NHA discussion exposed why - the U.S. spends significantly more than any nation on health care per capita and has a higher proportion of that spending financed by the private sector than any OECD country. Given that the U.S. Government presently foots the bill for lower income citizens, this leaves the middle class at risk. The NHA eliminates that risk but has a heavy price; that price must be compensated for by reducing spending in other areas; the Social Security system is one of those systems.
The new Social Security System will work as follows:
Upon birth or admission to the U.S. as an immigrant, each U.S. Citizen will receive a credit equal to 1/6th of their remaining life expectancy - expressed in months. With present life expectancy rates, this comes out to about 13 years. If a citizen is enrolled full time in a trade school, college or university, at age 18 they will be eligible to draw on their Social Security credits. If not, they will be eligible to draw on their credits at age 21.
The credits would be tradeable in the open market - individuals could theoretically sell their social security credits in order to purchase a house, or buy social security credits to establish a long term pension for themselves if they were more risk averse. Social Security recipients would NOT be taxed on their Social Security receipts. Citizens would have to draw on the credit at the 1st of each month, and would receive a check for 40% of the median monthly wage immediately. Once a person's credits were gone, they would be gone however - and survivor's benefits would not exist; the credits would be tied to a specific person.
The 800 pound elephant in the room is what about those currently on Social Security? Each existing U.S. Citizen would instantly get about 13 years worth of credits; meaning that everyone presently on Social Security would have the option (this protects senior citizens) to draw on their Social Security credits.
Social Security spending would average out to about $550 billion in present spending.
Defense
The Department of Defense budget would be set at $425 billion. This represents a reduction of nearly $300 billion. However, exploring the above link, one can observe that in real spending relative to the last 50 years, that the $425 billion figure is more typical than the amount spent on defense by the present administration. This spending figure is higher than all but one year in the 1970's and is higher than defense spending levels in 1982 - when Ronald Reagan was President. All figures above are adjusted for inflation.
Congress would not appropriate specific spending funds; the DOD would set the budget for the various departments of the Armed Forces and then the Departments themselves would appropriate budgets as they saw fit. The only caveat is that U.S. Military bases in OECD nations would be shut down immediately - or the host country could volunteer to make payments to the soldiers manning them and pay for upkeep of the base and operations of the base. NASA would be transferred to the Air Force which would be renamed Air/Space Force.
This would effectively end United States subsidies to other nations' defense forces.
Discretionary Spending
Each Department will be touched on briefly with a quick explanation of it's mission. If you're interested in how the levels compare to present levels this link has a very detailed outline.
Child Care Program: The legal guardian of each child will receive a payment equal to 4% of the median wage. This would represent a current spending level of about $75 billion.
Veterans Affairs: The NHA eliminates most of the need for this department. This department's new mission would be to establish cooperative ventures with universities and businesses to help our soldiers successfully transition from the military workforce to the civilian workforce after their service to our country has ended. It would also include helping soldiers cope psychologically with the shift from military to civilian life, provide counseling for family members who had lost loved ones and provide a help center if veterans had questions or issues regarding benefits due.
Spending level: $10 billion.
Office of Personnel Management
This would have a budget of $20 billion and it's responsibilities would include administering pension payments and serve as a global human resources organization for non-defense oriented administrations.
Economic Analysis
This would have an operating budget of $3 billion and an effective budget of $30 billion.
It would serve a dual role. The first role would be regarding statistical/projections. It would replace the CBO.
The second role would be regarding economic development. State and local agencies would submit proposals for development that the Federal Government would share 1/3 of the cost in. It would be evaluated by the economic analysis department and projects with the highest projected ROI would be approved. This opens up holes for corruption and any suspicion of corruption would be dealt with very harshly - penalties along the lines of 25 years in prison.
Energy and Environment
These two administrations would be combined and given an operating budget of $3 billion with a total $30 billion budget. The remainder would be used to invest in renewable energy sources.
Department of State
A budget of $30 billion would be allotted and would absorb the Department of the Interior. It would re-orient it's self to create and re-invent a smooth immigration process; this would be it's top mission. This is a slight increase to it's budget - because it's primary responsibility would now be a large one.
Department of Treasury (includes national debt - about $200 Billion)
The budget would be $300 Billion. In part 4, we'll discuss why the size of the IRS would shrink.
Department of Transportation
This budget would be $100 Billion. 12.5% of it's budget would be similar to the Economic Analysis Department; the Federal Government would chip in on state and local transportation projects - those projects would be evaluated on ROI, with preference given to projects that do not utilize petroleum consuming vehicles. This is one of the few departments to receive an increase to it's budget.
Justice Department
The Justice Department would be the watchdog for the Energy & Environment, the DOT and the Economic Analysis departments.
With marijuana legalized (see part 2), the Justice Department would focus less on drugs and more on federal crime - specifically fraud prevention.
Budget level: $15 Billion.
Legislative + Executive Office of the President:
A budget of $4 Billion would be allotted.
Part 4 will discuss Federal Revenues.
Thursday, May 10, 2012
NBA Playoffs: Is there value in the Pacers?
This version of the Indiana Pacers are a pretty likeable team. They play as a team, have heart, are well coached and are deep. This 'likeability' makes them similar to one of those mid-major college teams that gets under-seeded and makes a run to the elite 8.
The only problem is that this formula doesn't work out that well in the NBA. For proof, let's look at the best player of the prior 25 NBA Champions:
Magic Johnson (twice)
Isiah Thomas (twice)
Michael Jordan (6 times)
Hakeem Olajuwon (twice)
Tim Duncan (4 times)
Shaquille O'Neal (3 times)
Ben Wallace (once - we'll get there)
Dwayne Wade (once)
Kevin Garnett (once)
Kobe Bryant (twice)
Dirk Nowitzki (once)
With the exception of Ben Wallace, all those guys are first ballot, no doubt about it Hall of Famers and the majority have won an MVP award.
In the upcoming Pacers-Heat series, the Heat have one of the guys on that list PLUS the guy who is going to win the MVP this year (Lebron James). Every analytic piece should and will have Miami as heavy favorites; Indy is currently +725 at the only sportsbook I could find a line for (if you bet 100, you will receive an $825 payout should Indy win the series). We're not going to analyze who should be favored, but if Indy makes a good value - looking at arguments of why Indy COULD win.
The Ben Wallace argument
By my measures, Ben Wallace was the most overall productive player on the '04 Pistons championship team (although the difference between him and Chauncey Billups is negligible). Why couldn't the Pacers replicate that?
I have a system that measures the total gross production a player brings to the team - both offensively AND defensively.
Like that Pistons team, this Pacers team doesn't have a true superstar. Unfortunately, that's about where the Ben Wallace argument ends. That Pistons team had 3 players (Ben and Rasheed Wallace, Chauncey Billups) that grade out higher than the top Pacer (Danny Granger). On a per minute basis, those 3 Pistons were all more productive than the two most equally productive Pacers (Granger and Hibbert).
Danny Granger grades out as the player who had the 31st most productive regular season; every team that made the playoffs had at least one player who was more productive than Granger while TEN teams had two or more players grade out with a more productive regular season than Granger.
Bottom line: Detroit's best players had a sizeable advantage over this current Pacer squad, and the Pacers have a severe lack of elite talent.
The depth argument
Ok, so what if Miami definitely has the two best players in this series? The Pacers have more quality basketball players (6 that rate out as starter quality by my measures and 5 top 100 players).
Let's do 3 quick player comparisons: Wade vs Granger, Bosh vs David West and Darren Collison vs Mario Chalmers.
Wade vs Granger:
Wade has a True Shooting Percentage of 56 to Granger's 54, has a pace adjusted assist rate that is over 2.5 times Granger's, is a slightly superior rebounder and a far superior defender based on known statistical measures (although Granger is not a slouch defensively). The only advantage Granger has over Wade is that he has a slightly lower turnover rate (9.3 vs 11.8). Because of the fact that Wade is not only a superior scoring threat, but creates opportunities for his teammates (Granger does not) and makes a much bigger impact defensively, a large edge goes to Wade.
Bosh vs West:
Bosh has a TS % of 55 to West's 53, but West has other offensive advantages like a slightly higher pace adjusted assist rate (80 vs 56 per 100 minutes) and a slightly lower turnover rate (10.6 vs 11.2). Bosh has a slightly higher rebounding % (13.4 vs 12.6), along with slightly better defensive metrics (overall defensive rating of 59 to 56). You could certainly argue that Bosh and West are equals offensively, although Bosh's superior defensive and rebounding numbers give him a slight edge.
Chalmers vs Collison:
Chalmers has a large TS% edge - 58 to Collison's 53. In all fairness, this is driven by the fact that James and Wade create so many open shots for their teammates, but there is no reason to believe this advantage would not exist against the Pacers. Collison is the far superior ball handler - with a better adjusted assist rate (168 to Chalmer's 133) AND a better turnover rate (16.1 to 20.7). However, much of this advantage is dissipated by defensive metrics, where Collison grades out as a below average defender while Chalmers grades out as a strong defender. On gross production, Collison grades out slightly higher but on a per minute basis, the two are virtually equal. You could certainly make the case that Collison is superior player but the gap is less than the small edge Bosh has vs West.
All this and we haven't even discussed the 800 pound elephant in the room - Lebron James - whose gross production this year dwarfed Wade's. To be fair, we did not discuss the benches or Roy Hibbert - but the edge that Lebron gives overwhelms and blankets out the edge from Hibbert - Lebron's gross output is more than double that of Hibbert's. In the playoffs, bench rotations have a tendency to shrink, which also dissipates Indiana's edge and heightens the importance of having elite, hall of fame caliber players.
Conclusion
My system has analyzed 9 years of playoff data; if the Pacers win this series, it would be the largest upset that my system has measured to date. If anything, Miami represents the value play in this series. The Pacers are a nice team and a nice story, but until they acquire an elite talent, they will be an also-ran. On the flip side, if Dwight Howard wants a 'real' supporting cast, where he can clearly be 'the man', Indiana would be an excellent choice and give Howard a legit chance to win a championship.
The only problem is that this formula doesn't work out that well in the NBA. For proof, let's look at the best player of the prior 25 NBA Champions:
Magic Johnson (twice)
Isiah Thomas (twice)
Michael Jordan (6 times)
Hakeem Olajuwon (twice)
Tim Duncan (4 times)
Shaquille O'Neal (3 times)
Ben Wallace (once - we'll get there)
Dwayne Wade (once)
Kevin Garnett (once)
Kobe Bryant (twice)
Dirk Nowitzki (once)
With the exception of Ben Wallace, all those guys are first ballot, no doubt about it Hall of Famers and the majority have won an MVP award.
In the upcoming Pacers-Heat series, the Heat have one of the guys on that list PLUS the guy who is going to win the MVP this year (Lebron James). Every analytic piece should and will have Miami as heavy favorites; Indy is currently +725 at the only sportsbook I could find a line for (if you bet 100, you will receive an $825 payout should Indy win the series). We're not going to analyze who should be favored, but if Indy makes a good value - looking at arguments of why Indy COULD win.
The Ben Wallace argument
By my measures, Ben Wallace was the most overall productive player on the '04 Pistons championship team (although the difference between him and Chauncey Billups is negligible). Why couldn't the Pacers replicate that?
I have a system that measures the total gross production a player brings to the team - both offensively AND defensively.
Like that Pistons team, this Pacers team doesn't have a true superstar. Unfortunately, that's about where the Ben Wallace argument ends. That Pistons team had 3 players (Ben and Rasheed Wallace, Chauncey Billups) that grade out higher than the top Pacer (Danny Granger). On a per minute basis, those 3 Pistons were all more productive than the two most equally productive Pacers (Granger and Hibbert).
Danny Granger grades out as the player who had the 31st most productive regular season; every team that made the playoffs had at least one player who was more productive than Granger while TEN teams had two or more players grade out with a more productive regular season than Granger.
Bottom line: Detroit's best players had a sizeable advantage over this current Pacer squad, and the Pacers have a severe lack of elite talent.
The depth argument
Ok, so what if Miami definitely has the two best players in this series? The Pacers have more quality basketball players (6 that rate out as starter quality by my measures and 5 top 100 players).
Let's do 3 quick player comparisons: Wade vs Granger, Bosh vs David West and Darren Collison vs Mario Chalmers.
Wade vs Granger:
Wade has a True Shooting Percentage of 56 to Granger's 54, has a pace adjusted assist rate that is over 2.5 times Granger's, is a slightly superior rebounder and a far superior defender based on known statistical measures (although Granger is not a slouch defensively). The only advantage Granger has over Wade is that he has a slightly lower turnover rate (9.3 vs 11.8). Because of the fact that Wade is not only a superior scoring threat, but creates opportunities for his teammates (Granger does not) and makes a much bigger impact defensively, a large edge goes to Wade.
Bosh vs West:
Bosh has a TS % of 55 to West's 53, but West has other offensive advantages like a slightly higher pace adjusted assist rate (80 vs 56 per 100 minutes) and a slightly lower turnover rate (10.6 vs 11.2). Bosh has a slightly higher rebounding % (13.4 vs 12.6), along with slightly better defensive metrics (overall defensive rating of 59 to 56). You could certainly argue that Bosh and West are equals offensively, although Bosh's superior defensive and rebounding numbers give him a slight edge.
Chalmers vs Collison:
Chalmers has a large TS% edge - 58 to Collison's 53. In all fairness, this is driven by the fact that James and Wade create so many open shots for their teammates, but there is no reason to believe this advantage would not exist against the Pacers. Collison is the far superior ball handler - with a better adjusted assist rate (168 to Chalmer's 133) AND a better turnover rate (16.1 to 20.7). However, much of this advantage is dissipated by defensive metrics, where Collison grades out as a below average defender while Chalmers grades out as a strong defender. On gross production, Collison grades out slightly higher but on a per minute basis, the two are virtually equal. You could certainly make the case that Collison is superior player but the gap is less than the small edge Bosh has vs West.
All this and we haven't even discussed the 800 pound elephant in the room - Lebron James - whose gross production this year dwarfed Wade's. To be fair, we did not discuss the benches or Roy Hibbert - but the edge that Lebron gives overwhelms and blankets out the edge from Hibbert - Lebron's gross output is more than double that of Hibbert's. In the playoffs, bench rotations have a tendency to shrink, which also dissipates Indiana's edge and heightens the importance of having elite, hall of fame caliber players.
Conclusion
My system has analyzed 9 years of playoff data; if the Pacers win this series, it would be the largest upset that my system has measured to date. If anything, Miami represents the value play in this series. The Pacers are a nice team and a nice story, but until they acquire an elite talent, they will be an also-ran. On the flip side, if Dwight Howard wants a 'real' supporting cast, where he can clearly be 'the man', Indiana would be an excellent choice and give Howard a legit chance to win a championship.
Wednesday, May 2, 2012
Mission: Protect the Future of the US (Part 2)
In part 1 of this 5 part series, we outlined the principles behind a new fiscal/economic plan for the United States.
In part 2, we're going to start to lay the groundwork that will help strengthen the fiscal policy coming in parts 3 and 4. That groundwork consists of legislation that should be passed to help grow the economy.
1. Marijuana, Same sex marriage, prostitution are all legalized effective immediately.
Why: Despite unpopularity with social conservatives, these are 3 major industries which are being needlessly removed from the above-ground economy - thus needlessly removing jobs and needlessly increasing crime. It is known that Americans have a taste for marijuana, being able to purchase sex and being able to marry persons of their choosing. Why not enhance the pharmaecuitical industry, sex industry and wedding planning industry at the same time AND help to fund the government at the same time? On tax revenue alone, there is a forfeiture of at least $10 billion annually that is being ignored from these activities.
2. The Affordable Care Act, Medicare and Medicaid are immediately repealed.
Why: Principle 3 from part 1 hinted at a health care system overhaul - all these things will be uneccessary.
3. In order to receive health care at a hospital, federal citizenship must be proved.
See above. If we're going to take steps to reduce the financial risks to the middle class of health care, we cannot afford to provide health care to non-citizens.
4. Universities and colleges that receive federal funding may not raise tuition by a greater percentage than the increase of the median wage.
Why: Over the past several decades, college tuition has rapidly outpaced income growth - thus lowering the ROI on education. By making education less attractive, this reduces the skill-set of the American worker - thus creating a less competitive workforce.
5. Social Security may be used at any time for any purpose, but it will be timebound.
As you may have suspected, a single payer health system will be put in place in part 3 - this effectively eliminates the largest expenditure that most Americans face in retirement. Most other spending will be significantly cut, particularly social programs. As a result, the new social security formula will be: Every American is entitled to Social Security for 1/6 of their remaining life expectancy upon becoming a citizen. The payout will be 40% of the median wage. Social Security may be used at any time, for any reason upon turning age 18. Given that a popular use of Social Security would be to pay for college, this means that despite other cuts, virtually every institution of higher learning will be receiving Social Security funding. Without spoiling part 3, virtually every type of welfare program will be cut under principle 4 (we can't afford them) and thus Social Security needs to act as a safety net. With healthcare taken care of in one's older age, this reduces the amount of retirement savings needed by a substantial amount.
6. Term limits will be imposed on Congress
Congress can no longer be self-serving in it's desire to remain elected - it's own interests often conflict with that of the public.
Part 3 will be coming next week and will outline what spending levels are proposed.
1. Marijuana, Same sex marriage, prostitution are all legalized effective immediately.
Why: Despite unpopularity with social conservatives, these are 3 major industries which are being needlessly removed from the above-ground economy - thus needlessly removing jobs and needlessly increasing crime. It is known that Americans have a taste for marijuana, being able to purchase sex and being able to marry persons of their choosing. Why not enhance the pharmaecuitical industry, sex industry and wedding planning industry at the same time AND help to fund the government at the same time? On tax revenue alone, there is a forfeiture of at least $10 billion annually that is being ignored from these activities.
2. The Affordable Care Act, Medicare and Medicaid are immediately repealed.
Why: Principle 3 from part 1 hinted at a health care system overhaul - all these things will be uneccessary.
3. In order to receive health care at a hospital, federal citizenship must be proved.
See above. If we're going to take steps to reduce the financial risks to the middle class of health care, we cannot afford to provide health care to non-citizens.
4. Universities and colleges that receive federal funding may not raise tuition by a greater percentage than the increase of the median wage.
Why: Over the past several decades, college tuition has rapidly outpaced income growth - thus lowering the ROI on education. By making education less attractive, this reduces the skill-set of the American worker - thus creating a less competitive workforce.
5. Social Security may be used at any time for any purpose, but it will be timebound.
As you may have suspected, a single payer health system will be put in place in part 3 - this effectively eliminates the largest expenditure that most Americans face in retirement. Most other spending will be significantly cut, particularly social programs. As a result, the new social security formula will be: Every American is entitled to Social Security for 1/6 of their remaining life expectancy upon becoming a citizen. The payout will be 40% of the median wage. Social Security may be used at any time, for any reason upon turning age 18. Given that a popular use of Social Security would be to pay for college, this means that despite other cuts, virtually every institution of higher learning will be receiving Social Security funding. Without spoiling part 3, virtually every type of welfare program will be cut under principle 4 (we can't afford them) and thus Social Security needs to act as a safety net. With healthcare taken care of in one's older age, this reduces the amount of retirement savings needed by a substantial amount.
6. Term limits will be imposed on Congress
Congress can no longer be self-serving in it's desire to remain elected - it's own interests often conflict with that of the public.
Part 3 will be coming next week and will outline what spending levels are proposed.
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