Tag: deficit

Federal payments required by Obamacare understate the cost by as much as $50 billion

12:07 am

Finding out what’s in it: Federal payments required by Obamacare actually understate the cost by as much as $50 billion, according to a new study.

In May a congressional committee set the accounting rules that determine who will qualify for federal health care subsidies under the 2010 Patient Protection and Affordable Care Act. When the committee handed down the rules to the Congressional Budget Office, its formula excluded the health care costs of millions of workers’ spouses and children. The result was a final estimate for 2010 that hides those costs.

Leave a comment

Treasury Adds Another $20 Billion In Debt Overnight, Just $160 Billion Below Revised Ceiling

9:41 pm

Get ready for another battle in Congress: The U.S. Treasury added another $20 billion in debt last night, putting it just $160 billion below the newly passed debt ceiling.

The total US treasury balance (subject to the ceiling) is $14.54 trillion (and $14.58 trillion for total), an increase of $20 billion overnight, the Treasury will hit its latest ceiling no later than the end of September. . . . The debt ceiling now is $14.694 trillion: a number which Tim Geithner will hit in about a month.

According to the bill that raised the debt ceiling, the ceiling is only raised in stages. The next stage of $500 billion requires Obama to request it and Congress to okay it.

One comment

Life after the downgrade

10:30 am

Life after the downgrade.

An excellent summary of the consequences of a lower credit rating for the U.S. government.

There is a lot of anger at the moment in the US over the embarrassment of the downgrade, as well as shock. I’m most amused by the shock, to tell the truth. S&P didn’t say anything yesterday that was not common knowledge and common sense. If you had to rate a potential investment that had an income of, say, $22,000 a year but had costs of $37,000 per year, a standing debt of $143,000, and contracted future debt that exceeded $1 million, would you give that investment a gold-plated AAA rating and buy their bonds at the lowest interest rate possible, or at all? Of course not, but that’s exactly the fiscal situation of the US, at a 100,000,000:1 scale.

Leave a comment

Dow dives below 12,000

3:54 pm

The Dow today dived below 12,000, a nine-month low.

The report above tries to look past the just signed debt agreement, but I wonder if maybe it was the debt deal itself that worried investors, since the deal really did little to gain control of the federal government’s out-of-control spending.

Update: “The joint committee process is yet another promise by Congress that it will get spending under control — just not now, but rather some time in the future, always in the future.”

Leave a comment

Tea Partiers like “terrorists.”

6:09 pm

Leftwing civility: Joe Biden accused the tea party Republicans today of “acting like terrorists” in the negotiations over the debt limit.

And why? Because they simply refused to back down to those who want to spend us into oblivion.

Then there’s this quote from Mike Doyle (D-Pennsylvania): “We have negotiated with terrorists. This small group of terrorists have made it impossible to spend any money.”

Impossible to spend any money? What kind of fantasy world does this idiot live in? The federal budget has doubled in the past ten years. Meanwhile, this debt ceiling bill does nothing to reduce the size of government. On the contrary, the so-called reductions in the deficit merely slow the growth of government. Under the agreed plan, in each of the next ten years the federal government’s budget will still grow, and it will do so at a rate far exceeding inflation in an dying economy choked by regulation and government interference.

How is it even possible to deal with this problem if you have to deal with people like this, who are so divorced from reality and consider anyone who disagrees with them the worst sort of monster? Sadly, it is impossible. Until we see a wholesale change in government, with most of these idiots thrown from office, we will see no change in how our government is operated.

5 comments

Outlines of debt ceiling deal leaked to press

9:59 am

The outlines of a possible debt ceiling deal have been leaked to the press. No tax increases, and a lot of promised cuts, some real but many that are probably likely not to happen.

If true, this deal will represent a victory for the Republicans, despite what appear to be the weak nature of the cuts. And John Podhoretz explains why in a very cogent column today, using the Cold War as an analogy.

Everyone on the Right agrees that the U.S. is on an unsustainable fiscal path that must be altered. The difference comes down to the acceptance of political realities. Just as the United States could not effect rollback in the late 1940s (or any time thereafter), so too the Right and the Republican Party cannot effect a revolutionary change of course on July 31, 2011 with the Senate and the White House in liberal Democratic hands. The strategy, like containment, must have a longer time horizon, though it has the same goal: Ending the entitlement state before it swallows up the rest of the country.

Leave a comment

Senate kills Boehner debt ceiling plan

8:49 pm

That didn’t take long: The Senate has killed the Boehner debt ceiling plan that passed the House.

What the Democrats are missing in all this is that if no debt limit extension is passed, it is their beloved programs that will be hurt the most. The Republicans have more or less always preferred limiting government, so imposing the debt ceiling will only serve their purposes.

Thus, it is the Democrats who need the debt ceiling extended more than anyone. That they seem unwilling to agree to any deal or even propose one of their own seems the height of stupidity. Talk about cutting off one’s nose to spite one’s face!

3 comments

How High Would Taxes Have to Be to Close the Budget Gap This Year?

5:41 pm

How high would taxes have to be to close the budget gap this year? One blogger took a look:

I decided to look at the IRS data and calculate exactly how high would the tax rates have to be close this year’s budget gap of around $1.6 trillion (it’s $1.65 trillion according to the White House and $1.55 trillion according to the CBO). What I found was certainly not surprising but still quite disturbing.

Take a look yourself. It is very clear that increased taxes cannot solve the debt problem. It can’t even make a dent in it.

In other words, those advocating a “balanced approach” are really only avoiding the problem. In order to get the federal budget under control we have to cut spending. Nor should that be hard, considering that the federal budget has literally doubled since 1999. If we simply went back to 2000 numbers we’d almost certainly have a surplus, and no one would die nor would the world end.

Leave a comment

Tea Party Members ‘Bloody and Beaten,’ But Still in ‘No’ Column

9:40 am

Tea party members still in the no column.

The debt ceiling situation is really very simple. The Democrats won’t propose anything, nor will they vote for anything that cuts anything. And a large percentage of the new Republicans elected to office in November won’t vote for anything that doesn’t include real and significant cuts. The result is there simply aren’t enough votes to pass a bill. This might change, but based on what I’m reading I suspect that come next week, the federal government will have to find a way to live within its means. And I think that will be a good thing, despite the short term pain it will certainly cause to us all.

3 comments

A problem like Pelosi

9:18 am

A problem like Pelosi.

Nancy Pelosi said the following about Republicans: “They don’t just want to make cuts. They want to destroy. They want to destroy food safety, clean air, clean water, the Department of Education. They want to destroy your rights.”

I want to ask you: How do you do business with someone like that? How do you do business with a party like that? “They want to destroy”? (I’ll grant that we think the Department of Education a total boondoggle.) “They want to destroy your rights”? I’m reminded of why I revolted against the Democratic party long ago: They all talked like this. They all regarded their opponents as monstrous or subhuman. And I knew it was bunk.

And in a related note: Democrats — with no bill of their own — point accusing finger at Republicans.

Leave a comment

Why the Republicans revolted against their own leader’s proposed debt ceiling plan

8:01 am

Why the Republicans revolted against their own leader’s proposed debt ceiling plan:

The $7 billion that [was described as] “a real, enforceable cut for FY2012″ represents what the Government of the United States currently borrows every 37 hours. If the CBO’s scoring is correct – that it reduces the 2012 deficit by just $1 billion – then the ”cut” represents what the United States borrows every five hours and 20 minutes. In other words, in the time it takes to photocopy and distribute Boehner’s “plan”, the savings have all been borrowed back. [emphasis mine]

Leave a comment

What Democrats did wrong on the debt ceiling in 2010

10:44 pm

Analysis from a liberal at the Washington Post: What Democrats did wrong on the debt ceiling in 2010.

Raising the debt ceiling is really, really unpopular. The idea that Congress should vote itself more authority to run deficits is really, really unintuitive. Even now, after many months of coverage and the most aggressive communications campaign this White House has attempted, Americans are closely split on whether we need to raise the debt ceiling by Aug. 2. Whenever I try to run out the logic of Obama simply refusing to allow Republicans to take the debt ceiling hostage, I end up with us approximately where we are now, but Obama’s numbers are lower, the GOP’s numbers are higher, a number of congressional Democrats have broken ranks, and Washington elites are firmly arrayed against the White House.

Leave a comment

Downgrade could come as soon as Friday

9:58 am

The day of reckoning looms even closer: Credit rating downgrade for the U.S. government could come as soon as Friday. Key quote:

It’s not the debt ceiling that’s triggering a potential ratings change — it’s the trajectory of debt generated by the federal government.

And this:

The problem, as [the ratings agencies] see it, is not that America can’t pay its debts next month, but that America has grown its debt to such a degree that we can’t pay them in the long run without serious restructuring of the federal government — and this administration refuses to consider it:

One comment

Conservatives bridle at trillions in ‘phony’ cuts

9:13 am

Trillions in “phony” cuts?

The devil is in the details,” says a Republican strategist closely involved in the debt fight. “When you’re talking about $1 trillion [over ten years], you’re talking about $100 billion a year, but it doesn’t necessarily have to be evenly distributed among the years.” Does that mean it might be loaded mostly at the end of the decade, when it might not even happen? “That’s where you get into the details,” the strategist says.

Leave a comment

Over-optimism in Forecasts by Official Budget Agencies and Its Implications

10:50 am

Science discovers the obvious: Government agencies are routinely over-optimistic in their budget forecasts. From the abstract:

The paper studies forecasts of real growth rates and budget balances made by official government agencies among 33 countries. In general, the forecasts are found:

  • to have a positive average bias
  • to be more biased in booms
  • to be even more biased at the 3-year horizon than at shorter horizons.

This over-optimism in official forecasts can help explain excessive budget deficits, especially the failure to run surpluses during periods of high output: if a boom is forecasted to last indefinitely, retrenchment is treated as unnecessary. Many believe that better fiscal policy can be obtained by means of rules such as ceilings for the deficit or, better yet, the structural deficit. But we also find [that] countries subject to a budget rule, in the form of euroland’s Stability and Growth Path, make official forecasts of growth and budget deficits that are even more biased and more correlated with booms than do other countries. [emphasis mine]

In related news, it is now more than 800 days since the Democratically-controlled Senate has passed or even proposed a budget, as they are required to do by law.

One comment

The emptiness of the Democratic debt ceiling “plans”

12:30 am

The emptiness of the Democratic debt ceiling “plans”.

On Wednesday evening, I noted the absurdity of Associated Press coverage characterizing the 5-page document with 3-1/2 whole pages of text issued by the “Gang of Six” as a “plan” — 12 times, plus in the item’s headline. Though I didn’t bring it up then, an obvious point to make about any of these items floating around Washington is that if the Congressional Budget Office can’t score it, it can’t be a plan. A month ago, CBO Director Doug Elmendorf told a congressional committee, in response to a question about President Obama’s April proposal, that “we can’t score speeches.”

And then there’s this:

Obama … claimed to have a $4 trillion deficit-reduction plan. The court eunuchs of the press corps were impressed, and went off to file pieces hailing the president as “the grown-up in the room.” There is, in fact, no plan. No plan at all. No plan whatsoever, either for a deficit reduction of $4 trillion or $4.73. As is the way in Washington, merely announcing that he had a plan absolved him of the need to have one. So the president’s staff got out the extra-wide teleprompter and wrote a really large number on it, and simply by reading out the really large number the president was deemed to have produced a serious blueprint for trillions of dollars in savings. For his next trick, he’ll walk out on to the stage of Carnegie Hall, announce that he’s going to play Haydn’s Cello Concerto No 2, and, even though there’s no cello in sight, and Obama immediately climbs back in his golf cart to head for the links, music critics will hail it as one of the most moving performances they’ve ever heard.

The only “plan” Barack Obama has put on paper is his February budget. Were there trillions and trillions of savings in that? Er, no. It increased spending and doubled the federal debt.

Leave a comment
1 … 19 20 21 22 23 … 33