Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Sunday, March 27, 2011

Illinois fiscal death watch: 97% of state workers likely to be required to join public sector unions by 2012

John Ruberry, writing at MarathonPundit, highlights Illinois' suicidal fiscal stewardship. In short, Democrats are prepared to literally destroy the state thanks to their malevolent alliance with public sector union bosses.

...if the pending requests to the Illinois Labor Relations Board are approved, almost 97 percent of all state workers--including many managers--will be represented by Big Labor. Of the 50,000 state workers, only 1,700 will be non-union.

This should not be a surprise. Democratic Governor Pat Quinn has been bathing in public-sector union cash. As I exclusively reported last week, Quinn, the self-described reformer, has received over $5 million in campaign contributions from public-sector unions. And this "goo-goo" continues his attempt to unionize home-based health care workers--many of them are mothers who are taking care of their own developmentally-disabled children. The unions, and I guess Quinn, simply want their dues money to go to the labor bosses--they don't care about these people. And of course some of that dues cash will end up in the campaign coffers of Democratic politicians. Quinn, for instance.

Income taxes, with the blessing of the public-sector unions, are way up in Illinois. So is spending. Illinois has a $15 billion deficit... [and u]nionization is way up.

Meanwhile, former Republican Illinois state Senator Roger Keats, a real good-government person, is leaving the state for Texas, declaring "I am tired of subsidizing crooks."

I don't blame him. The incessant drive for public sector unions is provably destructive.

Chicago Tribune: "Illinois teacher pension system nearly $40 billion in the hole"

CNN: "Illinois lawmakers pass massive tax hikes"

Wall Street Journal: "Illinois Pension Crisis Eludes Easy Solutions"

WGN: "Caterpillar May Leave Illinois"

Illinois taxpayers are already suffering mightily and, based upon these developments, should prepare to bleed more. More companies will leave, fewer people will be able to pay the oppressive tax rates, the budget deficit will swell, and the entire state will follow Michigan into fiscal purgatory.

Well done, Democrats!


Saturday, March 26, 2011

Radicalization of Democrat Lawmakers Surprises Even Communists

The invaluable MacIver Institute has done yeoman's work all year tracking the Republicans' efforts to politically neuter Wisconsin's powerful public sector union bosses. Their latest video is a doozy.

The heated rhetoric and aggressive attitude of some Democratic lawmakers in Wisconsin has surprised many, even revolutionaries, says a leader of the Communist Party USA.

Rep. Peter Barca (D-Kenosha): "We will carry on this battle to the streets of Wisconsin... every turn they take, all of your faces will appear... and we will not quit fighting until this is reversed, this assault on the working people of Wisconsin!"

Even the Communist Party is surprised by the violent rhetoric coming from Democrats...

Scott Marshall, CPUSA Vice Chair: "there is a radicalization going on among Democratic legislators that I've never seen in my lifetime..."

The Communist Party was actively involved in the Madison protests... in fact, one of the most recognizable symbols used in the protests was also used by International Socialist Tendency, Austria's Community Party, and Malaysia's Socialist Party.

It can also be found on the office doors of some Democrat lawmakers, like Senator Chris Larson.

Wisconsin Democrat Senator: "This has always been about 'workers' rights', so we want to unite, we want to fight, we want to get back 'workers' rights'!"

That kind of rhetoric has led the Communist Party to consider collaborating [more openly] with Democrat Party lawmakers.

Consider the import of these statements.

The Democrat Party is so poisoned, so laced with the traitorous and defective ideology of Marxism, that it must be flushed into the toilet bowl of history. In 2012, you must vote -- and you must make sure your family, friends and colleagues vote: every Democrat must go. That, combined with the rejection of RINO candidates in GOP primaries, will -- God willing -- allow us to expand the beachhead we established in 2010. Our mission is simple to explain: to reestablish our Constitutional Republic.


Thursday, March 24, 2011

Photo Album: The $1 Home and Other Phenomena of Democrat Governance

Yesterday's news that Detroit lost 25% of its population in the last decade should come as no surprise to those familiar with the unholy alliance of corrupt Democrat politicians and union bosses. Besides Michigan, the states of California, Illinois and New York are next on the chopping block. Decades of unchecked Democrat rule have left cities and states wastelands akin to a Mad Max movie.

Go to Zillow and look at a aerial photo of Detroit... You can buy homes all over Detroit for less than $10,000. For less than $500,000 you could buy 4 or 5 city blocks, build a mansion, surrounded by razor wire of course... Property taxes on a Detroit $400k house of $15,000 / yr. as compared to West Palm's $6,800. If they would cut those taxes they might still have some people wanting to live there.

Let's do a fly-over, shall we?







When President Obama talks about affordable homes for all, I have a feeling this is what he has in mind.


Update: For those refugees still nostalgic about Detroit, there's always the burned-out Detroit Lego home.

Wednesday, March 23, 2011

Escape From Detroit

The incomparable Mark Levin often likens Democrats to locusts. Their policies destroy their own cities and towns, at which point many up and move to new places. Like red states. And they begin their destruction anew. And never once do they contemplate the rationale for their move -- that it is their collectivist ideology that eviscerates societies, as it has for centuries.

And nowhere is evidence of that phenomenon more apparent than Detroit, where Democrats have controlled every apparatus of city and county government for eons.

The population of Detroit has fallen back 100 years.

The flight of middle-class African-Americans to the suburbs fueled an exodus that cut Detroit's population 25% in the past decade to 713,777, according to Census Bureau data released Tuesday. That's the city's lowest population level since the 1910 census, when automobile mass production was making Detroit Detroit.

The decline, the fastest in city history, shocked local officials, who had expected a number closer to 800,000. Mayor Dave Bing said the city would seek a recount.

"If we could go out and identify another 40,000 people that were missed, and it brings us over the threshold of 750,000, that would make a difference from what we can get from the federal and state government," Mr. Bing said at a news conference Tuesday.

So Mayor Bing wants more money from the state and federal governments.

Here's a news flash, genius: both are broke.

Be proud of your wondrous city! Be proud of what the Democrat Party has done for Detroit... for Michigan... for New York, California and Illinois! Take some credit, Mayor Bing! Rejoice, for you are the Party of Locusts!


Hat tip: D&S.

But don't worry, the Fed says there's no inflation risk: Experts predict collapse of dollar as commodity prices skyrocket

Runner-up headline: Mission Cloward-Piven nears completion

Jeff Clark of Casey Research, writing at Zero Hedge, offers us the transcript of a roundtable featuring some of the world's best macroeconomic minds, Peter Schiff and billionaire Jim Rogers among them.

The "highlights":

Q: A lot of economists, including the government, believe the worst is behind us economically. Do you agree? If not, what should we be on the lookout for in 2011?

Jim Rogers: It is better for those getting all the government largesse, but the overall situation is worse. More currency turmoil. State and local problems, plus pension problems.

Bill Bonner: None of the problems that caused the crises in Europe and America have been resolved...

Peter Schiff: ...We are [like] an indebted family going out for an expensive meal to celebrate getting approved for a new credit card. It might feel good (at the time), but we're still simply delaying the inevitable...

John Williams: An intensifying economic downturn – what formally will be viewed as the second dip of a double-dip depression – already has started to unfold. The problem with the economy remains structural, where household income is not growing fast enough to beat inflation...

Steve Henningsen: ...What I will be watching for this year is sovereign and U.S. municipal debt corpses floating to the surface sometime in the months ahead...

Krassimir Petrov: ...No, the worst is yet to come. No structural changes have been made, no problems have been fixed. Printing money, a.k.a. Quantitative Easing, is a quick fix that has postponed the problem, yet also made it a lot worse. I would say that we are still in the early stages of the crisis and have another 4-8 years to go.

Bob Hoye: The worst of the post-bubble economic adversity is not behind us.

...Q: The U.S. dollar ended 2010 about where it started; does it resume its downtrend in 2011, or are fears about its demise overblown?

Jim Rogers: No, but further down the road...

Peter Schiff: It's hard to pinpoint exactly when the dollar will collapse, but it will take a miracle to avoid that outcome in the near term. It really depends on when the creditors of the United States realize that they are not going to get their principal returned to them in real terms, but rather in grossly devalued dollars. We have already seen the average duration of U.S. Treasury debt drop below that of Greece. No one wants to buy a 30-year bond with negative real interest rates as far as the eye can see...

John Williams: There remains high risk of a dollar selling panic unfolding in the year ahead, as the U.S. economy tanks anew, as the Fed continuously expands its easing, and as dollar holders dump the U.S. currency and dollar-denominated paper assets. Such would be a precursor to the inflation problem.

Thanks to reckless borrowing and spending programs like the "Stimulus" program, which failed to stimulate anything but government hiring, the U.S. dollar is tanking. The charts above represent the day's spot price of gold, oil and silver, respectively.

They continue to shoot to new highs, seemingly on a daily basis.

But Ben Bernanke, who completely failed to predict the housing crisis, now insists that long-term inflation risks are "unlikely."

In other news, Dallas Federal Reserve Bank President just stated that the U.S. is at a "tipping point" and that it is "on a fiscal path to insolvency."

And America's current entitlement programs -- Social Security, Medicare and Medicaid -- are all headed for collapse if left untended. And rather than fix those problems, Democrats rammed a new entitlement program, Obamacare, down our throats last year; it will be the largest such program in world history.

As James Simpson aptly put it, "It is time to cast aside all remaining doubt. President Obama is not trying to lead America forward to recovery, prosperity and strength. Quite the opposite, in fact."

And now we have proof: the Left is trying to collapse our society.

Our only choice in 2012 is to politically eradicate the traitorous Democrat Party; to vote for the most conservative candidates possible; and to try and restore the rule of law in this country.

Anything less condemns our country to an ugly fate: the exact kind of collapse advocated by Cloward and Piven.

2012 is right around the corner. What are you doing to help reestablish Constitutional conservatism?


Tuesday, March 22, 2011

Crony Capitalism Today: Ma Bell 2.0 Invested $15.5M to Lobby Federal Government Just Prior to Its Planned Takeover of T-Mobile

AT&T's recent announcement that it will buy wireless provider T-Mobile is yet another potentially crippling blow to the free market. In the exploding world of wireless, crony capitalism is helping to destroy competition.

And it's all been facilitated by horrific policies set down by the FCC and Congress, who have benefited mightily over the decades by thoroughly abusing their power to regulate.

AT&T is rallying its already massive lobbying efforts in Washington D.C., to get regulatory approval of its plan to buy Bellevue-based T-Mobile USA for $39 billion.

The WSJ reports that AT&T has a sizable lobbying army in D.C., with 93 lobbyists working its behalf. AT&T spent $15.5 million to lobby the federal government last year...

Gee, but I'm sure that's all coincidental.

And it looks like money will win out over the interests of the consumer as even the left-leaning FCC chairman appears to be open to the deal.

Executive Summary: the FCC is going to help reconstitute Ma Bell all over again. Let's call it Ma Bell 2.0.

The damage to the economy will be significant as it results in less competition, less risk-taking, less entrepreneurship, and less innovation. Higher prices for consumers and a step backwards for the U.S.

I can prove it.

Think of the most unregulated marketplace in the U.S. One with the least government intervention. If you answered software and Internet applications, you're a winner.

Over the last 25 years, the largely unregulated world of software has created untold trillions in value creation: Amazon, Microsoft, Google, eBay, Oracle, Facebook... the list goes on and on. Anyone with a good idea and some hacking skills can create a business worth tens or hundreds of millions of dollars.

No regulation. Unfettered competition.

But our disastrous telecom policy-makers can't stop regulating. If the federal government wants to spend money, it should subsidize fiber optic and wireless infrastructure to every home and every business to help give consumers more choice of pipe. Nowadays Internet connectivity is as basic a service as water or sewer lines.

The government should be there to promote commerce, not inhibit it.

The country that invented the Internet is quickly turning into a technological backwater thanks to the crony capitalism of the FCC, Congress and the telco/cable duoply.

They are invested in the past -- and no possible good can come from this deal. I'll put it this way: do you trust America's entrepeneurs or a Ma Bell reconstituted by a bunch of hacks in Washington?


Related: Beltway Comix: the FCC watchin' out for the little guy

Monday, March 21, 2011

Perfect: California Democrats Want to Eliminate Secret Ballot in Union Elections To, Uhm, Make the State's Horrific Deficit Even Worse

On the same day that The Sacramento Bee writes that California's "unfunded liability for state retiree health costs over the next 30 years [are] nearly $60 billion", the Democrat kooks in the state capitol are trying to further increase the incredible power of public sector unions.

I've heard of fiscal suicide before, but never quite so egregious a case as this.

If state Dems get their way, it might be bye-bye secret ballot


State Democrats are again trying to eliminate the secret-ballot vote for union certification. Senate President Pro Tem Darrell Steinberg describes his latest measure as “the alternative electoral method for choosing collective bargaining representatives.” It is that, and a lot more.

Under “card check,” instead of voting for or against union representation by secret ballot, workers would be asked to sign union cards in front of organizers and colleagues, potentially subjecting them to harassment or intimidation. [Ed: Gee, after their performance in Wisconsin, who'd have thunk it?] Once a majority of employees has signed cards, the union is recognized.

Opponents charge that SB -104, Steinberg’s new bill, not only drops the right to a secret ballot but unfairly penalizes employers for potential violations during union organizing. And opponents are critical that unions are not penalized under this bill for the same type of potential violations during organizing.

The Steinberg bill has the support of more than 20 unions and labor organizations, including the California Labor Federation, the Teamsters, the United Nurses Association and the AFL-CIO...

...Barry Bedwell, president of the California Grape and Tree Fruit League said ... the bill unfairly imposes hefty penalties against employers for potential intimidation, “but has no mention in it about intimidation from the unions.” Bedwell described passage of the bill as “a wholesale license for union intimidation.”

Another disturbing aspect of the bill is that an employee’s card can be signed up to one year before actually being used in a union election, nor is proof of employment required — a decision upheld by the ALRB... Card-check promoters have good reason to be confident that Gov. Brown would not veto Steinberg’s bill.

The genius of Democrat governance is this: it's like a game of political musical chairs. Who ever is left standing when the whole system collapses is the loser.


RED ALERT: Son of Wisconsin Activist Judge Has Anti-Governor Walker Propaganda Littered Throughout His Facebook Page

And I do mean "RED".

Last Friday Wisconsin Judge Maryann Sumi, breaking all court precedent, overruled the electorate, the Wisconsin state legislature and Governor Scott Walker by issuing a temporary restraining order that prevented implementation of the state's new public sector employment law.

Earlier today the invaluable RedState reported:

Judge Maryann Sumi should have recused herself entirely from the Wisconsin battle due to her inability to be neutral in this case. You see, Maryann Sumi has a clear conflict of interest. Her son is a political operative who also happens to be a former lead field manager with the AFL-CIO and data manager for the SEIU State Council. Both the SEIU and the AFL-CIO have members who are public-sector employees in Wisconsin. In fact, as a federation, the AFL-CIO can boast of several member-unions that represent public-sector employees. Maryann Sumi is hardly an unbiased judge in the matter.

Not only that, but Jacob 'Jake' Sinderbrand is a virulent anti-Walker campaigner. Consider, for example, his Facebook page.

Sinderbrand's Marxist crew is linked throughout.

The material is so offensive that it wouldn't surprise me to find out that members of Sinderbrand's posse are among those issuing threats to Wisconsin's legislators and Governor.

Long story short: Judge Sumi has a dog in the hunt.

She's a disgrace for not recusing herself and should be recalled or removed from office if the law permits.


Linked by: Michelle Malkin and AllAmerican Blogger. Thanks!

Hush, little media children... more death threats in Wisconsin

More Republican lawmakers in Wisconsin are receiving death threats for casting votes, though to read state-run media you'd never have an inkling.

For this kind of news, we turn to a local TV outlet, WQOW in Eau Claire, WI.

State lawmakers receive threats after budget repair bill passes


Lawmakers across the state have been under attack following the passage of Governor Walker's budget repair bill.

State senator Dan Kapanke's car was vandalized, and he says he's received several death threats, forcing him to cancel meetings. The Wisconsin Department of Justice has also investigated death threats sent to other state republican lawmakers, identifying a suspect who was responsible for sending several threatening e-mails.

"I know I have received death threats in my office, and that's very disturbing, and we don't need that kind of activity in Wisconsin, and I think most of us are above that, and hopefully those kinds of things will stop," says Senator Terry Moulton (R-23rd Senate District).

Senator Moulton is hoping the state can be healed, and both republicans and democrats can come together to work on the state's upcoming budget. Sunday night, hear more from local lawmakers about how they think both parties can work together once again.

Last week Noel Sheppard at NewsBusters observed that ABC, CBS, MSNBC, NBC and NPR had all censored news of these death threats.

To give credit where credit is due, it appears only CNN has had the temerity to report the outrageous behavior of the Democrat Party, President Obama's community organizers and the public sector union bosses.

Which means there's probably an IRS investigation or three in their future.

Isn't it lovely to see the collapse of a civilization right in front of our eyes?


Sunday, March 20, 2011

Crony Capitalism Digest: General Electric to Purchase Immense Fleet of Chevy Volts That Aren't Marketable in the Real World

Every once in a while we get a glimpse into GM's Chevy Volt sales and they always remind me of Chris Farley in Tommy Boy.

'How many Volts did we sell, Tommy?' 'Uhm... ni... niner.' 'I can't hear you, you're trailing off and did I catch a niner in there?'

...General Motors lobbied for a $7,500 tax refund for all buyers, under the shaky (if not false) promise that it was producing the first all-electric mass-production vehicle... At least that's what we were once told... GM has continually revised downward its estimates of how far the machine would go before the gas engine fired, and now says 25 to 50 miles.

It turns out that the premium-fuel fired engine does drive the wheels... It's doubtful that GM would have gotten such a subsidy if it had been revealed that the car would do much of its freeway cruising with a gas engine powering the wheels. [After all, a] hybrid is a hybrid, and the Prius no longer qualifies for a tax credit.

...[The Volt Consumer Reports] tested cost [a] whopping $48,700 minus the credit... [one] reason that Volt sales are anemic: 326 in December, 321 in January, and 281 in February. GM announced a production run of 100,000 in the first two years. Who is going to buy all these cars?

...Recently, President Obama selected General Electric CEO Jeffrey Immelt to chair his Economic Advisory Board. GE is awash in windmills waiting to be subsidized so they can provide unreliable, expensive power.

Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced. Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375,000,000 to a company to buy cars that no one else wants so that GM will not tank and produce even more cars that no one wants...

Don't bother waiting for Statist kooks like Anthony Weiner to decry these tax breaks for 'millionaires and billionaires'.

And a related thought: don't liberals read history books? Obviously not, because the last command-and-control economy this size was in a land called the Soviet Union.

And we all know how that turned out.


Hat tip: Moonbattery.

An Open Letter to Union Members Only (Not Bosses)

Dear Union Member,

Did you know that your very own union bosses are working against you? Did you know that almost all union officials are out to make themselves wealthier and more powerful -- while impoverishing you in the process? And did you know that this is easy to prove, if you can just assemble the puzzle pieces? Please consider:

Mining Workers - According to a study by the United Mine Workers of America, a new EPA rule cracking down on 'airborne toxins' could cost 250,000 workers their jobs.

Steel Workers - The United Steelworkers wrote last August that the EPA's new environmental regulations would cost "tens of thousands" of union members their jobs.

Farm Workers - Legendary unions like the UFW are threatened by oppressive EPA regulations ranging from oversight of spilled milk to dust kicked up by farm equipment. By making farming more expensive with onerous regulations, fewer dollars can be spent on workers' salaries and benefits. Layoffs of union members will be the inevitable result.

Labor - For at least a dozen years, certain powerful union bosses have advocated open borders policies. In 2000, the AFL-CIO's bosses "called for blanket amnesty for illegal immigrants." And today, despite high unemployment, leaders of big unions like the SEIU still pursue the same policy of "comprehensive immigration legislation (i.e., amnesty)." This could cost union members hundreds of thousands of jobs as lower-wage workers displace American citizens throughout the economy.

When you get your next paycheck, take a minute to calculate how much money is going to union dues (for example, $90). Multiply that by the number of pay periods per year (say, 26). The total (in this example, nearly $2,500) is going to line the pockets of the union bosses and donate exclusively to one political party: the Democrats.

Your money -- the product of your labor, your finite time on Earth spent working -- is being stolen and funneled to the same political party bent on destroying you. The EPA is destroying jobs. The Department of the Interior is destroying jobs. The Department of Labor's open borders advocacy is destroying jobs. All of these immense bureaucracies, which you pay for with your taxes (more money stolen from you) are targeting you, America's backbone.

And they do so with the full knowledge and help from the union bosses who support Democrats.

If you want to save this country for yourself and your children -- to save this country from rampant deficit spending, insane immigration policies, nightmarish environmental regulations -- you need to ignore the bosses whose mansions and boats you're funding with your hard work. You must throw out the Democrats bent on destroying you and your family.

America hangs in the balance.

Sincerely,

Doug Ross


Linked by: Protein Wisdom. Thanks!

Saturday, March 19, 2011

A Rudderless World: Three Graphs

An excellent Wall Street Journal interactive graphic depicts the tidal wave of unrest sweeping the Middle East.

Far from any sort of organized 'democracy movement', it is worth remembering that the region's civil unrest began for primarily one reason, which is honestly described by Ghana's major online news magazine.

The ongoing popular uprisings in North Africa and the Middle East poses the question if other developing countries, including Ghana, may experience similar or other forms of uprisings in the light of the imminent global food crisis of 2011... ...In 2008 riots from Haiti to Bangladesh to Egypt over the soaring costs of basic foods have brought the issue to a boiling point and catapulted it to the forefront of the world's attention...

...A major IFPRI Report launched in February 2011 stated that the causes of the 2008 global food crisis were similar to that of the 1972-74 food crisis, in that the oil price and energy price was the major driver, as well as the shock to cereal demand (from biofuels this time), low interest rates, devaluation of the dollar, declining stocks, and some adverse weather conditions....

As the dollar has drifted lower (illustrated in the above chart), thanks to a strategy of printing dollars (i.e., "Quantitative Easing") on the part of the Federal Reserve, the price of energy has skyrocketed as it is bought and sold using dollars.

Food prices, dependent upon fuel to farm and transport, have likewise leaped.

Notice a correlation?

The short version of the story is this: the policies of the hard-left Democrats have led directly to hunger, starvation and civil unrest around the world:

• Using food as fuel in bizarre efforts to reduce carbon dioxide, which is a plant food and beneficial to the environment

• And catastrophic deficit spending, adding nearly 60% to the national debt in three short years, which has resulted in the need to print trillions of dollars and enslave our children to debt

Everything the Democrats touch turns to crap, from their utterly reckless and criminal actions in the housing market to their global warming scam; from their country-bankrupting spending policies to their 'War on Poverty' that spreads more poverty and misery than any social program in history.

Everything they do is a failure -- and Barack Obama is their perfect poster-child.


Friday, March 18, 2011

Thank a union boss: city workers 'shell-shocked' after half of Costa Mesa employees are laid off and one then apparently commits suicide

The Los Angeles Times reports the tragic, but not unexpected, news of another union "negotiation" gone south.

Costa Mesa has sent layoff notices to nearly half of its employees in a dramatic austerity program being closely watched by other cities struggling with ballooning pension obligations.

The move was sharply criticized by union leaders, and it stunned city employees, one of whom apparently committed suicide by jumping off Costa Mesa City Hall hours after layoff notices went out Thursday.

...Costa Mesa is among hundreds of local governments around the country facing massive future shortfalls in what they owe retirees. This year's tab — $15 million out of the city's $93-million budget — is estimated to grow to more than $25 million within five years... Faced with an unprecedented pension and retiree healthcare crisis, "cities are being forced to look at things that would've been unthinkable before," he said.

It's not just the mid-sized cities: San Francisco is facing a truly dire situation that almost defies explanation.

San Francisco's public pension crisis is way worse than many thought... The San Francisco Employees Retirement System (SFERS), which covers most of the city's municipal workers,faces an unfunded liability of $4.4 billion on a market value basis. That's nearly $35,000 per every San Francisco household.

...SFERS' reported liability is based on an optimistic 7.75% annual rate of return. If the 1990-1999 historical average rate of return - 6.2% - is used, the city's unfunded pension liability grows to $6.8 billion.

...The city also reports more than $4.364 billion in unfunded retiree health care costs. That figure will likely grow to $9.5 billion by 2028. Without major policy changes, "the probability of San Francisco meeting its unfunded health care obligation is zero."

Thank the Democrats... and the unions. But I repeat myself.

In only five years' time, San Francisco's pension and health care costs are projected to hit $1 billion annually, more than the police, fire, sheriff, district attorney and probation departments -- combined.

There is only one way for the city to dig out of this hole: to reform the pension programs. But the city's labor unions "have made it clear that any changes will meet stiff resistance."

And that's just one reason the Democrats are called "the party of fiscal destruction."

Which is, I've heard, the term they prefer.


CBO has good news and bad news on the Obama budget. The good: deficit is much worse than predicted. The bad: the U.S. will collapse long before 2020.

Douglas Holtz-Eakin offers us a sobering snapshot of the latest Congressional Budget Office (CBO) report on President Obama's budget. I won't bore you with the details. Only a few low-lights are necessary.

• The national debt-to-GDP ratio rises above 87 percent - close to that of Greece.

• Their numbers are rosy because the CBO's deficit projections include $500 billion in Obamacare Medicare cuts without a so-called "doc fix". Obamacare also places immense obligations on state Medicaid systems when states can least afford them.

• The CBO predicts a downgrade of the U.S. as a sovereign borrower in only seven years. Put simply, the full faith and credit of our country is critically wounded as the federal government loses its coveted AAA credit rating. In short, it's like an individual having a crappy credit score: everything costs more.

The executive summary according to the Associated Press? "CBO: Obama understates deficits by $2.3 trillion."

In this case, the word "understates" means "lies about".

But, as you might expect, the real story is far worse than the CBO is letting on. After all, their analysts can only review scenarios as they are presented.

But over at MacroMon, a recent article explains why the world's largest bond investor shed his trillion-dollar-plus portfolio of U.S. Treasury debt. Hint: he thinks it's a really, really bad investment.

Background: the U.S. Treasury is prohibited from selling bonds directly to the Federal Reserve. Instead it sells them through so-called "primary dealers" (PDs) via auctions. But, as the graph depicts, the Federal Reserve is the one buying almost all new debt from the PDs, while paying hefty -- think hundreds of millions of dollars in markups -- for the privilege.

In short, the only folks willing to buy 10-year Treasuries that pay less than 3.5 percent would be your Federal Reserve. Which could explain why Bill Gross sold his U.S. debt when he did.

I don't mean to be Johnny Buzzkill, but I've got one more snippet for you.

In "Slouching to Fiscal Armageddon", Chris Banescu offers several ominous portents.

• The 2011 budget deficit is forecast to hit $1.5 trillion, the largest in history and 10% of America's total economic output (GDP)

• This follows a 2010 deficit of $1.3 trillion and a $1.65 deficit forecast for 2012. The three years under Democrat leadership have led to the most catastrophic deficits not just in U.S. history, but in world history.

• In those three years, the Obama Democrats have rung up $4.5 trillion in debt, double the entire $2.1 trillion incurred under eight years of the Bush 43 administration. This is an increase in deficit spending of roughly 570%.

• 40 cents of every dollar we now spend is borrowed.

• Within the next year, the country's debt will surpass our GDP.

• This year alone, we will spend $200 billion in interest payments -- and as we saw above -- those interest payments are being held extraordinarily low through a glut of short-term, low-interest financing; but as interest rates increase, as they must, we could hit $1 trillion a year in interest payments alone.

• And I haven't even touched upon the unfunded liabilities of Obamacare, Social Security, Medicare and Medicaid, which are projected to hit $144 trillion in unfunded obligations by 2015.

Now, consider the fact that the Democrats proposed a cut of $4.7 billion -- or about 25 hours of spending for the fiscal year 2012. As Banescu aptly puts it, "Clearly Democrats are not interested in helping this country avoid fiscal calamity."

A devastating debt crisis is coming; simple mathematics predict it. It is no longer a matter of if, but when. The time for hysterics, hyperbole, and finger-pointing is over. The time for political games, grand-standing, and partisan shenanigans is long past. This is no longer about Democrat, Republican, liberal, conservative, or progressive issues. This affects all of us. The looming danger crosses all party and ideological lines and jeopardizes all Americans, present and future generations. We're staring down a massive debt tsunami that threatens the US with a fiscal Armageddon the likes of which we've never seen.

Since Democrats and the White House are obviously unwilling to face reality and completely AWOL on this crisis, here's a call to action to the conservatives and the Tea Party lawmakers in Washington, our only remaining hope... [Republicans,] you're going to be demonized and vilified anyway, regardless of what you do, [so] make a stand and demand meaningful reductions in government spending... Didn't the ObamaCare battles and the last few decades of disastrous compromises with liberals and progressives teach you anything?

...Demand real action and sweeping reforms. Do not back down and compromise just to get along. It doesn't work! Be ready to shut down the government if you have to... Make the hard choices and stand behind your principles. That is real leadership!

Thus far, our feckless, RINO leadership in the House can't muster either the eloquence or the courage to explain the dire situation in which we find ourselves. They also can't seem to craft a Continuous Resolution to fund only those parts of the government -- i.e., not Obamacare -- that the American people want.

I urge you to call the offices of Speaker Boehner and Leader Cantor and explain to them -- politely but firmly -- that there is no flipping time to spare. None.

The fuse on the time-bomb, which was lit by the 111th Congress and a radical Statist President, has but a nub remaining.


Linked by: Michelle Malkin, Protein Wisdom and The Tatler. Thanks!

Thursday, March 17, 2011

Sen. Jeff Sessions Pins Obama Nominee to Mat, Gets Tap-Out

Earlier today the Senate Budget Committee held a hearing to consider the nomination of Ms. Heather Higginbottom, named as a prospective deputy budget director by President Obama.

As Ms. Higginbottom -- true to form for this White House -- has zero budget experience, the results were as you might have expected.

...Sen. Sessions [R-AL] confronted the nominee over false assertions from the White House regarding the president's budget.

Both President Obama and his budget director haverepeatedly said that the president's budget allows us to “live within our means,” “spend money that we have each year,” and “begin paying down our debt.”

Numerous fact-check organizations have found these statements to be false, and Sessions has argued that these inaccurate claims undermine efforts to confront our growing fiscal crisis.

In reality, the budget that President Obama submitted adds $13 trillion to the national debt, never has a deficit less than $600 billion, and spends more than it takes in every single year.

Ms. Higginbottoms' testimony is an uncomfortable reminder of just how twisted and bizarre the Democrats' arguments for their unparalleled deficit spending have become.


Update: Heather Higginbottom's Socialist Connection

Wednesday, March 16, 2011

Senate's Cowboy Poet Suddenly Concerned With Bipartisanship and Compromise

The Senate Majority Leader is a bizarre, left-wing spendaholic named Harry Reid. While busy borrowing money from the Chinese to fund "Cowboy Poetry", Reid today decried the short-term budget fixes known as "Continuing Resolutions" or CRs.

Senate Majority Leader Harry Reid (D, Nev.) blamed “tea party extremists” on Tuesday for blocking a compromise that would allow Congress to keep the government running through September, the latest move by Senate Democrats to deflect responsibility for a partial government shutdown.

“Some Tea Party extremists seem to think ‘compromise’ is a dirty word, and have said that they would rather shut down the government than work with Democrats to find a common-sense, bipartisan solution,” Mr. Reid said in a statement Tuesday...

And why are these CRs even necessary?

Because for the first time in modern history, the last Democrat Congress and Democrat President failed to pass a budget for fiscal year 2011.

That's not the Republicans' fault.

Furthermore, the last Democrat Congress and the Democrat President rang up more debt in three years ($4.6 trillion) than the country incurred during its first 220 years of existence. During Obama's presidency, the debt has increased 55%.

That's not the Republicans' fault.

Just last month, the federal government registered a $223 billion budget deficit for one month, which was more than the total deficit for the entire year of 2007 ($161 billion).

As for bipartisanship, it was the Democrats' malevolent strategy to exclude Republicans from every major decision over the last two years.

• ABC News: GOP Shut Out of Stimulus Negotiations

• CNN Situation Room: Secret Healthcare Negotiations Meant to Shut Out GOP and the American People

• Rep. Paul Ryan: Republicans Shut Out of the Financial Reform Process

Sick: the protector of cowboy poets, the man who is bankrupting our children and grandchildren, is complaining about a lack of partisanship.

These Democrats have truly lost their minds. They need to be crushed in 2012 and rendered no more a political force than the Whigs. They are that malevolent, that nefarious and that dangerous to the American people.


Voters Recall Republican Mayor of Miami-Dade, But Not For the Reasons You Might Think

Somehow I don't think the union bosses will be celebrating the political demise of this particular Florida Republican.

Miami-Dade County voters recalled their top elected official Tuesday, culminating an effort financed by a billionaire car dealer and fueled by frustrations over a poor economy and unpopular policy decisions...

...Some 88% of 200,347 voters elected to oust Republican Carlos Alvarez, with 707 of 829 precincts reporting, along with early and absentee ballots...

...Last fall, Mr. Alvarez agreed to increase pay and unfreeze some benefits for unionized public employees. At the same time, he raised property taxes for two-fifths of the county's homeowners, by an average of 13%...

The drones don't seem to understand that the laws of economics can't be flaunted any more than can the law of gravity. The taxpayers certainly understand it, because they have to live within their budgets every day of the week.

It's a lesson that the union bosses will, inevitably, be forced to learn, but hopefully not as a result of a complete collapse, Argentina-style, of the economy. Which is apparently what some Democrats secretly desire.


We Now Join the Nuclear (and Economic) Meltdown Already in Progress

Chris Martenson is a scientist and financial analyst by trade who used his unique combination of skills to predict the 2008 economic meltdown. His latest message is a bit more chilling than usual -- and certainly worth a moment's consideration.

...For decades, the world has been running its own nuclear-style reaction, only in the currency and debt markets, where exponentially-accelerating piles of debt and money have spun about faster and faster in a gigantic, complex, coordinated reaction, the core of which is, and always has been, the United States.

At the very center of this ungainly money reactor is the main fuel pile itself, the US Treasury market. With any interruption to smooth flow of money through this pile, it will immediately become unstable.

The threat I see goes like this:

Stage 1: The world watches, riveted, as Japan suffers a tragic and horrible earthquake and tsunami, but as horrifying as these are, they are localized phenomenon affecting a relatively small percentage of the country. The real trouble lurks within damaged nuclear plants, which are now ruined and will never again produce electricity for Japan, creating instant shortages that will take years to remedy. Worse, a dangerous plume of radioactivity is carried south by winds. Tokyo partially empties and shuts down for all practical purposes.

Stage 2: The abrupt slow down of the world's third largest economy alters the smooth flow of cash around the globe, and even causes reversals of some other long-standing flows. Chaotic eddies emerge in a decades-old pattern of ever-increasing flows of money into and out of the money centers, and various carry-trade and other interest-rate-sensitive strategies blow up. Manufacturing in Japan screeches to a halt, disrupting just-in-time manufacturing strategies both internally and across the globe.

Stage 3: In order to fund the rebuilding effort, Japan has to buy a lot of items from foreign suppliers at the same time that its exports plunge precipitously. At first Japan simply does not participate in US Treasury auctions, leading to a shortage of buyers. But eventually Japan has to sell some of its vast hoard of US bonds in order to pay for external items needed for its reconstruction. Further, insurance companies, huge holders of US bonds, face stiff liability claims in the wake of the worst natural disaster to hit a heavily industrialized center and are forced to redeem enormous amounts of Treasury paper. US Treasury yields begin to climb.

Stage 4: Continuing unrest in the MENA region serves to keep oil elevated and local funding needs high, while Europe's weaker players (the PIIGS) continue to slip under the waves. Money continues to ebb away from the US Treasury market. Forced by circumstance, the Federal Reserve reverses its linguistic course and opens the monetary floodgates once again. There's nothing like a crisis to justify more money printing, especially to a one-trick pony (the Fed) that only knows how to stamp its hoof on the 'print' button.

Stage 5: An increasingly chaotic monetary and fiscal situation spills over into the derivatives arena, creating a number of financial accidents. Stressed governments find themselves in more of an arguing mood than a pull-together-and-sing-Kumbaya mood, and agreements are hard to come by. Banks begin to fail again, global trade falls off, unrest continues to build, and then it happens - a currency crisis.

Stage 6: Everything changes. Faster than you think.

...Okay, folks, this is not a drill... Events have now sped up to the point that we cannot predict what will happen next. At this point a systemic banking crisis, complete political upheaval in one or more countries, a currency crisis, or a debt crisis are all within the realm of the possible.

This is the most difficult Alert I've ever had to write, because I know I have not yet processed all the necessary information to truly assess the risks. I am operating on gut instinct here, and several of you have already reminded me to trust myself. Thank you. That's what I am doing now.

...As always, I have no idea if anything is going to transpire or not, or when. How's that for indecisive? But I can tell you that the pressures are larger than they’ve ever been throughout this long emergency and that conditions are ripe for an avalanche. My sincerest hope is that this will all blow over. But hope alone is a terrible strategy, and so we prepare.

Martenson has a plethora (yes, I said it!) of free information available on his website, including a crash course on the economic crisis and a What Should I Do? guide.


And the Hits Just Keep On Coming

Turning our attention away momentarily from the unfolding catastrophe in Japan, please consider the following, er, historic milestones.

Biggest Jump in Food Costs in More Than 36 Years: "Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years... Food prices soared 3.9 percent last month, the biggest gain since November 1974."

Building permits fall to all-time low: "The number of permits for future housing construction fell 8.2%, to an annual rate of 517,000 permits last month, down from a revised 563,000 in January, the Commerce Department said... That was the lowest level seen since the government started tracking the figures in 1959, and much worse than the 565,000 permits economists had expected."

Total US Debt Hits $14.237 Trillion, Debt Ceiling At $14.294 Trillion: "Following the settlement of $67.6 billion in debt from last week's auctions, the Treasury managed to raise its dangerously low cash to a level that will give Tim Geithner pocket change for another week, or $99.5 billion. Alas, the cash buffer came at a price: total debt increased from $14.166 trillion to $14.238 trillion. As a reminder, the debt ceiling is $14.294 trillion, so on a pure basis there is a $56 billion buffer or less than one's week's worth of auctions."

Obama picks Kansas to win NCAA men's tourney: "President Obama picked the Jayhawks to beat Ohio State in the finals of the men's NCAA basketball tournament... Obama picked Kansas last year -- and watched them lose in the second round, as Duke went on to capture the men's hoops title."

Obama bucks up donors for 2012 fight: "Working to invigorate one of his most important constituencies, President Barack Obama urged major Democratic donors Wednesday to hang on to the enthusiasm they felt during his first run for the White House as his 2012 re-election campaign approaches... Obama made his remarks to about 500 members of the Democratic National Committee's national finance committee and national advisory board at a Washington hotel. These major donors will play a crucial role in the money race [for 2012]."

Are we having fun yet?


Tuesday, March 15, 2011

Legacy Media Wakes Up, Notices That President Obama is Far More Energized by Motown and Wisconsin's Unions Than Global Calamities

Politico headlines its latest "President Obama staying in background on deficits."

Which is a polite way of saying that he's busy arranging his next Remembering Motown party. Or jetting to Rio.

But it was Ruth Marcus, the liberal Washington Post columnist, who got the ball rolling with her op-end entitled "Obama's 'Where's Waldo?' presidency" and asked, "Where's Obama? No matter how hard you look, sometimes he's impossible to find."

Except when there's a party or a pick-up golf game.

The left-leaning Ottawa Citizen titled its missive "Obama's foreign policy is in tatters" and observes, "It used to be said by critics that Canada offered all aid short of help in global crises; now regrettably the same might be suggested of the Obama administration as it loses its position and influence in a critical part of the world."

CBS News highlighted the tenuous policy positions of Senator Joe Manchin (D-WV), who called out the president in harsh terms: "Dem Sen. Joe Manchin: Obama has 'failed to lead' on spending."

The New Republic, which once championed Obama's candidacy, now appears to have come to the same conclusion the rest of us did, oh, around 2007: "The clock is ticking on action in Libya—and on the president’s foreign policy legacy" and notes that France and the Arab League are both more hawkish on Gaddafi than the U.S. -- for the first time in history.

As it turns out, the only person yet to notice the president's detachment is the brilliant economist Paul Olberkrugmann.