Tag: debt

“The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true.”

9:27 pm

From the man whose job it was to police the $700 billion TARP bailout:

The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true.

The regulatory culture of the banking industry that this book describes possibiy explains why Jon Corzine has not yet been prosecuted. Regulators and prosecutors are afraid to proceed out of fear of hurting their careers.

Worse, Barofsky describes a banking regulatory system that is still in place, and is therefore ripe for another collapse. No wonder the tea party movement was born out of outrage over TARP and the bank bailout, and is still growing.

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A proposal by three Republican senators to avoid a “lame-duck looting session” after the November election.

3:46 pm

A proposal by three Republican senators to avoid a “lame-duck looting session” after the November election.

DeMint, Graham and Johnson want their House GOP counterparts to act before the August recess to fund the government through early next year. That would avoid the threat of a government shutdown before Sept. 30 and leave it in the hands of a new Congress and, perhaps, a new president.

What a concept! A proposal that the present Congress do its job now, rather than wait.

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At least 80 House Republicans have signed a letter demanding that Speaker John Boehner (R-Ohio) block any further funding of Obamacare.

7:24 pm

At least 80 House Republicans have signed a letter demanding that Speaker John Boehner (R-Ohio) block any further funding of Obamacare.

This story illustrates two things. First, the House Republican leadership has been timid about using its power to block the implementation of Obamacare, even though the public clearly wants it blocked. Second, that about a third of the House Republican membership has already signed the letter, with more signatures expected, suggests that the bulk of the Republican Party is not as timid as their leadership. Moreover, I expect the November election to significantly strengthen this fiscally conservative trend.

Thus, it will not surprise me if we see some very radical budget cuts in the next Congress.

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Vice President Paul Ryan?

2:20 pm

Vice President Paul Ryan?

I say “Please!” and I say it loudly. Picking Ryan for number two would reverse Ronald Reagan’s biggest mistake, picking moderate George Bush Sr. as his VP. The result of that bad choice was 12 years of Bush rule in the late 1980s and in the 2000s, during which there was little effort to rein in the power or size of government. In fact, the Bushes did a lot to increase government’s power and size.

Picking Ryan as VP would place a competent fiscal conservative into the limelight and make such a person a leading contender for the Presidency in future years. It would also help demonstrate again that the 2010 election was a trend, not a fluke.

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Another dismal jobs report.

9:47 am

Another dismal jobs report.

Job growth amounted to a disappointing 80,000, below analyst expectations of 90-100K, while the jobless rate remained the same at 8.2%:

Read the whole article. There’s a lot more, all of its depressing and trending downward.

While no President should be blamed entirely for the unemployment numbers, the policies of any President do have a direct influence on those numbers, and should bear some responsibility, especially in this era where we have ceded so much power to the federal government. Consider this graph (below the fold), which shows the “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” The steep upward swing, beginning in 2008, sadly corresponds too closely with the beginnings of the Obama administration. And it is with this administration that we have seen the worst deficits, the most regulation, and the biggest increase in the power of government in our lifetimes. It is thus no surprise the economy has crumbled.
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A Tea Party event today in Tucson

10:28 pm

Last week I received an email from the local Tucson tea party, asking if I would be willing to attend a demonstration today in response to last week’s Supreme Court decision on Obamacare. To quote the email,

We would like to stage two simultaneous protests against the train wreck they call ObamaCare, at two separate locations Monday July 2nd, 4:00pm-5:45pm. 75 people at both locations are needed to make the necessary impact. They say the Tea Party is dead. What say ye? We need your commitment.

Today those protests took place at two different prominent street corners in the Tucson area. At each location there were about fifty people lining the sidewalk and holding signs and American flags out to passing motorists. My wife Diane and I went to one of those protests. Here are my impressions:
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NASA today unveiled for the press the Orion capsule scheduled for the program’s first test flight in 2014.

9:35 pm

NASA today unveiled for the press the Orion capsule scheduled for the program’s first test flight in 2014.

Today’s unveiling was essentially a PR event designed to boost political support for the Space Launch System (SLS) and the Orion capsule program. And though we should definitely give kudos to Lockheed Martin for its progress on Orion, it is also important to note that the building of this capsule took 8 years and about $6.5 billion. And it won’t go into space for still another two years at best. Compare that to SpaceX’s Dragon, which took about four years from concept to launch, with a cost of about $1 billion.

It is this contrast that is worrying the political supporters of SLS and Orion. Consider for example this quote from the above article:

But the Orion schedule assumes steady funding by Congress, which is an open question given the current debate over federal budget deficits, taxes and a general push to reduce federal spending. “We have to be concerned about that because we are in an era of government spending where you have to do more with a limited amount,” Nelson said. “That, of course, is going to be one of the main things we’re going to have to look at in the future.” [emphasis mine]

Nelson has been a big backer of SLS from the moment Congress decided to force it down NASA’s throat. It is very clear from his comments above however that he recognizes the political difficulties that this very expensive program faces.

As I’ve said before, I expect SLS to die sometime in the next three years. Faced with a ungodly federal deficit, the next Congress is going to look for ways to save money and — assuming the commercial space companies like SpaceX continue to have success — Congress will see this program as one of those ways.

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The Dodd-Frank downgrade.

10:11 am

The Dodd-Frank downgrade.

What comes through in the Moody’s assessment [the credit-rating downgrade of 15 banks] and in any review of their returns on equity is that banks have lost significant ability to generate earnings to offset the inevitable losses. The lost earnings power is surely due in part to reduced leverage, which helps protects taxpayers.

But 2,300 pages of Dodd-Frank and countless other federal efforts to put sand in the financial gears are also taking their toll. The Obama tax and regulatory frenzy, of which Dodd-Frank is a part, weighs on economic growth. Those are our words, not Moody’s, but the rating agency does note that the abysmal economic environment is a drag on ratings for everyone.

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The Social Security Trust Fund will start losing value in 2013.

3:19 pm

The day of reckoning looms: The Social Security Trust Fund will start losing value in 2013, not 2020 as claimed.

In 2010, Social Security’s Office of the Chief Actuary projected that this interest income would keep the trust fund growing in real value through 2020. The 2011 projections moved this date to 2018, and the recently released 2012 projections pushed the date to 2012, meaning that the trust fund will start declining in real value next year. After 2013, the trust fund is projected to decline by greater amounts each year until becoming exhausted in 2033.

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The empty bench of the Democratic Party.

4:03 pm

The empty bench of the Democratic Party.

In comparing the potential Presidential candidates from both the Democrat and Republican parties, this article leaves one with the impression that the future is definitely not with the Democratic Party. As admitted by its own membership, its leadership is old, it has very few candidates with national stature, and the depth of the party is shallower than a pond in Tucson in summer. Meanwhile, the Republicans have many young new faces that already have national standing.

Though the article likes to blame this situation on internal forces within the parties, I see it as the result of actual elections and the circumstances of the time. The Democrats have increasingly appeared bankrupt when it comes to dealing with today’s fundamental problems, especially the out-of-control spending of government at all levels. Meanwhile, Republican candidates, especially those associated with the tea party movement, have come forward with some fresh, reasonable, and thoughtful ideas for dealing with these problems.

Faced with such a choice, it is not surprising that the Republicans have a deep bench compared to the Democrats.

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The House yesterday proposed a spending bill that would cut the EPA’s budget to $7 billion, 17% less than what it received in 2012.

3:09 pm

Progress: The House yesterday proposed a spending bill that would cut the EPA’s budget to $7 billion, 17% less than what it received in 2012.

Considering the federal debt, this is a reasonable cut, as a $7 billion budget would be comparable to the EPA’s budget numbers in the early 2000s, and would hardly cripple that agency.

On a more depressing note, the Senate is moving forward on a bi-partisan deal to pass a massive farm bill, loaded with pork that would spend almost a trillion dollars over the next decade.

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Spending money on silliness at the NSF and NIH

9:43 am

Your tax dollars at work: Spending money on silliness at the NSF and NIH.

Coburn’s report identified a number of projects that will make most Americans—scientists and nonscientists alike—shake their heads. They include studies of: how to ride a bike; when dogs became man’s best friend; whether political views are genetically predetermined; whether parents choose trendy baby names; and when the best time is to buy a ticket to a sold-out sporting event. And it noted that “only politicians appear to benefit from other NSF studies, such as research on what motivates individuals to make political donations, how politicians can benefit from Internet town halls…and how politicians use the Internet.”

Read the whole thing, as it gives a scientist’s perspective of this waste, which is sometimes not as obvious as the examples above.

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The debt of the federal government is projected to be nearly twice the size of the U.S. economy by 2037, the Congressional Budget Office (CBO) announced Tuesday.

10:26 am

The day of reckoning looms: The debt of the federal government is projected to be nearly twice the size of the U.S. economy by 2037, the Congressional Budget Office announced Tuesday.

This CBO report actually supposed to be encouraging, as it indicates that the day of doom has been pushed back a whopping two years! Yowza! Let’s pop the corks on the champagne bottles and start celebrating!

Sadly, the article also has this ridiculous quote:

CBO’s latest prediction is similar to its 2011 report despite the $2.1 trillion in budget cuts enacted in last August’s debt-ceiling deal between the White House and Congress.

Nothing was cut by that deal. All they did was trim the rate of growth. For any journalist to continue to participate in this fraud is sickening.

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Ninety-five federal workers have racked up $750,000 in travel expenses, while working at home.

6:28 pm

The wolves guarding the chicken house: Ninety-five federal workers have racked up $750,000 in travel expenses, while working at home.

Of 95 work-at-home employees, 12 are supervisors who received reimbursements of more than $200,000 for travel-related expenses in 2010 and 2011, the documents provided to congressional committees show. A majority of the 95 are listed at the GS-14 and GS-15-level.

By the way, this happened in the General Services Administration, the same agency that ran a four day conference in Las Vegas costing almost a million dollars.

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Not good: The Labor Department announced today that the U.S. economy only added 69 thousand jobs in May, the fewest in a year.

10:39 am

Not good: The Labor Department announced today that the U.S. economy only added 69,000 jobs in May, the fewest in a year.

The unemployment rate went up slightly as well, Labor also adjusted downward the number of jobs created in the past two months to terribly comparable numbers.

While no president is ever entirely responsible for the state of the economy, Barack Obama’s policies have certainly done significant harm. High regulation, Obamacare, and a clear hostility to private enterprise in all fields except space exploration has helped produce what appears to be the longest period with a floundering economy in my lifetime.

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Two Democrats joined Republicans yesterday on a Senate committee to block the U.S. military from increasing its use of alternatives fossil fuels.

2:52 pm

Two Democrats joined Republicans yesterday on a Senate committee to block the U.S. military from increasing its use of alternatives fossil fuels.

What stood out to me in this article was the following quote:

As part of this support, in December the Navy agreed to spend $12 million for 450,000 gallons of “advanced biofuels,” which can be blended with petroleum in a 50:50 mixture and burned in conventional engines. The Navy and Air Force have both set a goal of using advanced biofuels for 50% of their fuel use by the end of this decade. But the current $26-a-gallon price tag angered congressional Republicans, who accuse the Obama Administration of using the military to support its green agenda. [emphasis mine]

$26 per gallon for biofuels? I find it astonishing that anyone voted for this program.

Of course the military wants options. And of course we want to reduce our dependence on fossil fuels, if only to reduce the money pouring into the hands of the radical Islamists of the Middle East. But at that price, these alternative fuels are simply not competitive or affordable.

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Using the budget balancing rules Congress imposed on private companies, the federal deficit turns out to be five times greater than the official but fake numbers Congress normally publishes.

10:11 am

The day of reckoning looms: Using the budget balancing rules Congress imposed on private companies, the annual federal deficit turns out to be five times greater than the official but fake numbers Congress normally publishes.

The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.

The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.

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