Archive for category National Debt
Obama Budget Is Unsustainable
Posted by Tom in Budgets, Centrally Managed Economy, Congress, Deficit, National Debt on March 30, 2011
Senator Jeff Sessions from Alabama brings his cross examination skills to the fore with Secretary Tim Geithner who is forced to concede that the federal debt is unsustainable.
In Serious Need of a Scapegoat
As Charles Hurt points out in his Washington Times opinion piece, Tea Party Not the Cause of the Budget Stalemate, Harry Reid is desperate for excuses. He and his PR mouth piece Chuck Schumer are sounding off on the Tea Party. Talk about desperate!
Hurt points out that since Obama took office the Democrats have been AWOL on budgeting:
“Over the past year and a half, the vast majority of which Democrats held total control over Congress, Democrats failed to produce a single spending bill or even a simple budget.
“When Democrats in the House managed to get a spending proposal through the lower chamber, those bills only went on to the Senate to die under Mr. Reid’s failed leadership.
“Not a single spending bill actually made it to the desk of the president, who would have gladly signed whatever his party sent him.”
He recounts the historic Republican landslide in November changing control of the House and weakening control in the Senate.
So, they haven’t passed a budget, but their failure to cut fat has made Obama famous for deficits and debt! Obama’s deficits in this and last year have been in the $1.5 Trillion range. We borrow 42 cents of every dollar these spendthrifts waste. Since taking office Obama, Pelosi, Reid and their fellow statists have increased the national debt by $3.445 Trillion, that’s $5 Billion a day! The pain will get worse as interest rates inevitably increase.
The worst part is they are stealing our children’s', grandchildren’s', and great-grandchildren’s’ money, indeed stealing their future! This sick excuse for a leader in the Senate is desperate. He’s so beholden to the unions, trial lawyers, Hollywood libs, and hands-out dole takers, that he’s frozen.
Harry, you are one poor excuse looking for another poor excuse. Get a spine, man and quit stealing from my grandchildren!
DOE…Carter’s Creation Provides Obama’s Cover
Posted by Tom in Deficit, Energy Facts & Policies, Environment, Government Regulation, National Debt, Stimulus/Bailout, Subsidies on March 7, 2011
Shika Daimia’s Reason.com post today, Global Warming By Another Name, points out that Obama’s bow to the environmental religion is coded in his promotion of “clean energy.” That global warming has suffered since Climategate, the East Anglica University disclosures, is obvious even to Obama. Ever the politician, he still must curry favor with the well ensconced global warming conspirators. After all, he gets them money, grant money, and they get him votes. To cement that support and yet stay away from that “global warming” fraud, Obama promotes “clean energy.”
Daimia argues that “clean” equals” cool” by virtue of the EPA’s mission to limit greenhouse gasses. Those, in addition to the air you exhale are mainly caused by hydrocarbon energy, coal, oil, gas. So what does our president propose in this year of a $1.6 Trillion deficit and $14 Trillion in debt? He proposes to increase the budget for the Department of Energy by 12%, $8 Billion in addition to the $30 Billion in the 2010 “stimulated” budget!
So our president doesn’t think seriously about the morality of stealing from our future generations. He neglects to treat the budget seriously. He won’t look at the unsustainable entitlements which he has just added to with Obamacare. No, he wants more votes, greater deficits, and more debt for our grandchildren to pay! SICK!
What’s he want to do with that largess? Something smart like nuclear power? No, sorry. He wants things your tax dollars and the tax dollars of your great grandchildren must go to subsidize. Things like, solar with a budget increase of 88% and wind with a budget increase of 61%. Something my grandchildren recognize in their youth is that the sun doesn’t always shine and the wind doesn’t always blow. Apparently Obama hasn’t gotten that message. He hasn’t driven through the Coachella Valley to Palm Desert to see the thousands of acres of still, silent wind mills bilking the US taxpayers. He hasn’t been to Victorville on an overcast day to see all those wonderful mirrors tilted toward the grey sky, reflecting only a testimony to taxpayer ignorance.
Here’s an idea. Let’s abolish the Department of Energy. What does it do that isn’t already being done by or could be done by the myriad of other real departments? It employs 1600 bureaucrats who could contribute the economy significantly better in the private sector, if for no other reason than that taxpayers would not be paying for them. It is not exactly what one thinks of as one of the essential functions of government. And, look who created it, Jimmy Carter, Obama’s alter ego! What better argument to undue it, than that Carter did it?
If we abolish the DOE, Obama will no longer have a code with which to appease the global warming alarmists! Then he must choose, make a decision! What a frightening thought!
Time For A Little Humor…….Aw WTF!
Posted by Tom in Budgets, Deficit, Fiscal Policy, Humor, National Debt, Politics, Presidency on February 23, 2011
Sorry but I couldn’t resist!
Immorality At Its Highest
Posted by Tom in Deficit, Justice, Law, Morality & Religion in the Public Square, National Character, National Debt on January 27, 2011
Consider the $14 Trillion in national debt. Now consider the $1.5 Trillion U.S. budget deficit that will increase it this year and the like sized deficits in future years. Now consider the $140 Billion plus in state budget deficits and hundreds of billions in state and municipal debt. Finally, consider the $3.1 Trillion in the unfunded liabilities of the several states and the $53 Trillion in unfunded liabilities of the federal government.
Now who is benefiting from all that money? Who has benefited from all that money?
OK, now who will repay all that deficit generated debt and all those over-promised unfunded liabilities?
That’s right, future generations will pay. Your children, grandchildren and great-grandchildren will pay. They will pay for what you have used! For what you have become entitled to! For your welfare! For your retirement and medical care!
DOES THIS STRIKE YOU AS IMMORAL?
In short, this generation is stealing from the next generations. And it is reaping benefits that the next generations will not enjoy. And it is obligating those generations to pay for our benefits.
This is absolutely wrong, immorality at the highest level. And, does our president attack this or suggest reform? No he merely wants to freeze this immorality in place at the high levels he had promoted!
Uncle Milty’s Wisdom and the Hidden Cost of Government
Posted by Tom in Deficit, Entitlements, Fiscal Policy, Government Regulation, National Debt, Taxation, Welfare on January 23, 2011
As sure as we have unintended consequences of legislation and regulation we have hidden cost thereof and indeed of basic government. This was brought home last week in a WSJ op-ed by Dick Armey and Matt Kibbe, What Congress Should Cut. They lead with Milton Friedman’s wise observation:
“Milton Friedman correctly argued in 1999 that the “real cost of government—the total tax burden—equals what government spends plus the cost to the public of complying with government mandates and regulations and of calculating, paying, and taking measures to avoid taxes.” He added, “Anything that reduces that real cost—lower government spending, elimination of costly regulations on individuals or businesses, simplification of explicit taxes—is a tax reform.”
Just think of that simple observation and put it alongside with the runaway regulatory environment wrought by Obama. The EPA plans to regulate the breath you exhale from one end or the other! The FCC likewise with your freedom of email and web based speech. HHS with Obamacare favors and penalties for both unions and states, not to mention individuals. Financial services regulators do overburdened with Dodd-Frank that they can’t get new rules out quickly enough.
Top these administrative dictates off with Obamacare, Financial Regulation, Cap and Trade proposals, and the ongoing Fannie-Freddie mess and its aftermath, and you have the perfect storm for explosive government costs. Obama’s feint at regulatory restraint a couple of days ago, was just that, nice sounding words with little substance when it comes to the important issues restraining growth.
So Friedman’s maxim bears analysis. Think of the man hours, expensive man hours, spent, no wasted, in compliance, or workarounds to obviate compliance. How much better could the time be spent. How much better could the dollars thus spent be invested in potentially productive endeavors! The same is true for paying or not paying taxes under our complex tax structure. What a needless waste of time and money, both of which could be put to better use.
The article goes on to suggest candidates for elimination and they are numerous: The discretionary spending binge since 2007. Obamacare. Fannie/Freddie subsidies. Farm subsidies like Ethanol. And eventually, no soon, a serious reform of Medicare, Medicaid, and Social Security. All of these are a cancer some slowly, some rapidly bankrupting the nation.
The call is to wake up; time is rapidly running out.
Merry Christmas…but for how long?
Posted by Tom in Bankruptcy, Centrally Managed Economy, Congress, Deficit, Fiscal Policy, National Debt, Statism on December 25, 2010
Check out OweNo.com, a project of the Peter J. Peterson foundation. Here’s a sample:
Foreign Debt from Hugh Jidette on Vimeo.
Animal Instincts on Hold
Posted by Tom in Academics, Business, Centrally Managed Economy, Deficit, Economics, Employment, Energy Facts & Policies, Liberalism, National Debt, Taxation on December 5, 2010
Christina Romer, who headed the Obama economic team but has jumped ship for the coddling confines of that bastion of leftist thought, the University of California Berkeley, penned an op-ed yesterday in that bastion of leftist propaganda, the New York Times, It’s the Big Questions That Slow Growth. In fairness, she gets the slow growth, non-investment, high unemployment correct: uncertainty is the culprit, it’s holding back the recovery.
Now she dismissed uncertainty over the future of the Bush tax cuts because the difference between the current 35% top rate and Obama’s 39.6% top rate is simply too small to put hiring and spending decisions on hold. Then she throws up an uncertainty monster saying that the future tax increases to deal with the “grossly unsustainable” budget deficits could be modest or “enormous.” OK, let’s say you’re a corporation that could build a factory and employ 1500 workers in Nevada or in South Korea; each option is close, but the prospect of enormous U.S. tax increases scares you. Uncertainty? You bet!
She posits “climate change” and dependence on foreign oil as problems that will not go away by “tabling plans to deal with them” which makes it harder for companies to plan and invest. Yeah, right! How about banning offshore drilling, or regulating the CO2 we exhale from both ends! Or what about the FCC discussing expropriation of investments in bandwidth all for so-called “net-neutrality?” Uncertainty that you didn’t mention Christina!
In a real knee-slapper she pans the uncertainty caused by the volatility of the economic forecasts. Let’s see, if you’re an economist forecasting the future of this or that, don’t you have the same access to the follies of leftist Washington as the businessman does?
Solutions, you bet, she has ‘em: “How do we resolve uncertainty about future growth? The Federal Reserve, Congress and the president need to reaffirm that they will do whatever it takes to restore the economy to full health. They could take a lesson from President Franklin D. Roosevelt, who declared in his 1933 inaugural address that he would treat the task of putting people back to work “as we would treat the emergency of a war.”
“They should follow up with powerful fiscal and monetary actions to create jobs — coupled with a concrete plan for tackling our long-run budget problems. We are at a critical moment. With many in Congress opposed to further jobs measures and tax increases of any kind, the chances of prolonged gridlock are high.”
Christiana Romer is typical of the political and academic hacks our leftist president has surrounded himself with, all puff with no concrete proposals to cut the big, behemoth intrusive, overreaching government. Uncertainty is indeed the problem, taxes, Obamacare, financial regulation, EPA, FCC, Fannie/Freddie, you name it. What it gets down to is that these academic “elites” think that they know what’s best for us, for the economy. They think they know more than Adam Smith’s invisible hand or Friedrich Hayek’s animal spirits! That hubris is their fatal flaw!
Christiana Romer is in a safer place now happily ensconced in academia. Safer, that is, for the nation. There she will only poison young liberal minds pretending to educate them in economics.
Debt Problem? Solution: More Debt! And You’re A Lender!
Posted by Tom in Bankruptcy, Banks, Business, Deficit, Europe, Financial Policy, Foreign Policy, Monetary Policy, National Debt, State Finances on December 3, 2010
Makes absolutely no sense at all. Greece has a debt problem, can’t pay its debts when due; so the EU together with the IMF bail it out. How by lending it more money! Ireland has a problem, can’t pay its obligations when due, so the EU together with the IMF lend Ireland more money. Spain and Portugal see this and demand a larger bailout pool while the financial markets worry about “contagion.”
John Cochrane, a finance professor at the University of Chicago Booth School of Business, calls a spade a spade in yesterday’s WSJ op-ed, ‘Contagion’ and Other Euro Myths. The EU/IMF bail out facility promises that no sovereign bond holder will lose a cent at least for now. Basically what that says is that those lenders holding EU country debt now have a super guarantee. This is a guarantee to which they are not entitled. They did not bargain for this when they made the loans by buying the bonds. Their credit underwriting said that Spain, Greece, Ireland, and Portugal (the PIGS) were creditworthy at the interest rates charged. In short those lenders made underwriting mistakes.
So what happens when borrowers can’t pay? Normally, they restructure their obligations, sometimes extending maturities, and other times by having the principal balance reduced. In other words the lenders take a haircut. Why can’t this be done in Europe?
Now who are those dumb lenders, the sovereign bond holders, that the EU is so anxious to bail out? Well, they are the European and UK banks, principally those in France and Germany. To bail out dumb lenders or to guarantee them is bad policy. It denies the market discipline necessary for a functioning economy. It promotes moral hazard which simply means that those same lenders will not change their sloppy underwriting, will make more bad loans, and will expect future bailouts. Failure is just as essential to the marketplace as success.
As Cochrane points out the “contagion” boogyman is a myth: “The bailout is being justified on grounds of containing “contagion.” This is nonsense. The notion is that news of an Irish restructuring would scare investors in Spanish bonds, who would start looking at Spain’s ability to repay its debts and then demand higher interest rates.”
“But haven’t investors in Spanish bonds already noticed that there’s a bit of a problem? And wouldn’t news of a giant bailout make these investors question Spanish finances as much as would news of debt restructuring?”
“Any contagion is entirely self-inflicted. The only way Ireland’s fate affects Spanish investors is by changing the odds that the European Union (EU) will bail out Spain. And Spanish interest rates are rising, suggesting investors now think a Spanish bailout is less, not more, likely.”
On top of that all, U.S. taxpayers are putting money in to the unnecessary bailout facility. Yep, that’s right, the U.S. is the largest national contributor to the International Monetary Fund. So with our current weak economy, continuing deficits, and generation choking debt, we via the IMF are digging our hole deeper. The sad thing is that we have the ability to block the IMF action. But we don’t.
Question, will the United States face the same issues with our spendthrift sovereign states like CA, IL, and NY? Or will we get smart and (1) enact a state bankruptcy provision and (2) pass a constitutional amendment precluding bailouts? Something to ponder!
Deficit Reduction-Competing Plans
Posted by Tom in Business, Centrally Managed Economy, Congress, Deficit, Democrats, Entitlements, Environment, Financial Policy, Foreign Trade, Government Regulation, National Character, National Debt, National Endowments and GSEs, Social Security, Taxation, Unions on November 17, 2010
Now we have another deficit reduction plan to compare the the Obama Deficit Reduction Commission plan, this the “Bipartisan Policy Center Debt Reduction Task Force” announced by Alice Rivlin and Pete Domenici. Here’s the WSJ high level comparison:
We won’t reduce deficits and their concomitant generation burdening debt until we reform congressional spending. Listening to another commission or task-force will not do the trick. Congress must get serious and tell the truth to the America people–there is no free lunch, THERE IS NO FREE LUNCH!
In addition to reducing the deficit, we must promote an environment for growth: certainty of taxation well into the future, certainty of limited regulation of business, and elimination of rent-seeking-giving subsidies and regulations.
All the principles of freedom and growth are anathema to the current state of Obamaism: Instead of reforming Medicare, Medicaid and Social Security Obama’s Democrats added Obamacare as an additional unsustainable entitlement with concomitant business and personal uncertainty. Instead of cleaning up the Fannie-Freddie generated financial mess Obama’s Democrats continued the charade of propping them up to do more future damage. Instead of cutting unnecessary spending, Obama’s Democrats passes such folly as cash for clunkers and bought GM for the UAW. So, bottom line, oppose Obama’s Democrats while they’re in office and turn them out of office ASAP.
A few basic economic growth imperatives;
- Repeal Obamacare while eliminating employer tax benefit subsidies, while eliminating interstate insurance competition barriers and while enacting stringent malpractice tort reform; reform Medicare over time as a high-deductible insurance policy with means testing; and reform Social Security with later retirement, means-testing and private accounts as an option for the means tested high-earners.
- Go for a flat, low-rate income tax both personal and corporate, eliminating extraterritorial corporate taxation, and all personal deductions, including home mortgage deductions.
- Eliminate all federal agency rule-making. If Congress can’t define it specifically as a law, then it should not govern, period! Now, there will obviously be extremely well defined and narrow exceptions to this like the difference in typeface, boldness or color of signs and warnings!
- Abolish all subsidies and mandates, farm subsidies/mandates, green subsidies/mandates, ethanol subsidies/mandates. If a product or service is not in and of itself economic enough or green enough to make it in the free market, then it should fail. In no case should it be subsidized.
- Eliminate all trade barriers that protect unions or their work rules. The Mexican trucking proscription under NAFTA is an example.
- Negotiate, sign and ratify as many free trade deals as are reasonable. As the world’s largest consumer, we hav the leverage, if we would only use it intelligently.
- Preclude all public service unions. Repeal Taft-Hartley and minimum wage laws.
- Eliminate all unnecessary government spending like, NPR, NEH, Department of Education, etc.
- Eliminate and forego all unfunded mandates to the states. Federalism must be re-energized and government pushed down to lower levels.
We need to get the point across to the American people that we are broke. We can’t afford the free lunches anymore. We need individual responsibility. We are not a socialistic nation.
In short, if we got government out of the way, this country would once again blossom!