Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Wednesday, November 28, 2012
WELFARE'S FAILURE AND THE SOLUTION: A Phenomenal Presentation from the State of Pennsylvania
Tyler Durden -- via "When Work Is Punished: The Tragedy Of America's Welfare State" -- points us to an exceptional presentation by Gary Alexander, the Secretary of Public Welfare for the State of Pennsylvania. Read the whole thing.
READ THE REST
I HOPE YOU'RE SITTING DOWN: Why Gold Is Insurance
Writing at Safe Haven, Przemyslaw Radomski offers the historical perspective on U.S. deficit spending and the price of gold.
I repeat: you should be sitting down before viewing the following graph.
If you believe that government can continue to increase its debt -- which already amounts to 550 percent of GDP (all the goods and services produced in a year) -- then by all means, ignore the advice.
Because if you believe that, you're obviously a Democrat and an Obama supporter, in which you can fend for yourself after the inevitable reboot.
Hat tip: BadBlue.com/Money.
I repeat: you should be sitting down before viewing the following graph.
While the general idea of dividing your portfolio between long-term and speculative capital (the latter is only the money you can afford to lose) is not a particularly new one, the inclusion of the insurance part in the portfolio may make it more robust to financial blow-ups. We will now focus on that - gold and silver as insurance against severe financial turmoil.
Gold may be perceived as insurance if you believe that, because of psychological reasons, it appeals to investors as a wealth-preservation vehicle. In case of financial turmoil they turn to precious metals, the increased demand causes an increase in the price and gold and silver deliver on their promise to provide an alternative to government bonds.
There is also another dimension to it: in the past gold and silver were used as money. As a matter of fact, gold had been indirectly used as money up to 1971 when U.S. president Richard Nixon officially announced that the U.S. government would cease to adhere to its promise to redeem the greenback in gold. Since that moment money has been only paper and a promise of the government to accept payments in it...
Some investors fear that excessive deficits as seen in the U.S. will result in money being printed on a large scale (which actually is already the case: open-ended QE) or even in the implosion of the dollar. The bigger the deficits, the more likely such a scenario seems. This is shown on the chart below.
...since 2000 increases in the U.S. debt have been accompanied by increases in the price of gold. This might reflect investors' fear that the U.S. government will eventually default and their belief that gold may be a safe haven in case of such a development.
The abovementioned points may lead to the conclusion that gold may in fact skyrocket if things get out of hand in the U.S. or in the European Union. The main problem here is that nobody knows when (if at all) the paper currencies will begin to visibly deteriorate or disappear completely. Precisely because of that, we suggest holding on to gold and silver at all times with a part of your portfolio.
We call this part of your portfolio "Insurance," because by holding on to gold and silver even during corrections you accept small losses in hope of enormous gains should serious economic turmoil materialize. Economic crises have the inherent quality of catching most investors off-guard. We don't want you to be among them.
If you believe that government can continue to increase its debt -- which already amounts to 550 percent of GDP (all the goods and services produced in a year) -- then by all means, ignore the advice.
Because if you believe that, you're obviously a Democrat and an Obama supporter, in which you can fend for yourself after the inevitable reboot.
Hat tip: BadBlue.com/Money.
KEWL: Google introduces hiring and entrepreneurship courseware for veterans and military spouses
Well, this is a worthy cause made all the more timely because of the devastating cuts to defense spending orchestrated by President Obama.
Pass it on to any active-duty and vets you know.
Hat tip: BadBlue.com/Tech.
...we’ve put the powers of Google+ behind a single hub called VetNet. Today, VetNet launches as a partnership with three founding organizations: the U.S. Chamber of Commerce’s Hiring Our Heroes program, the Institute for Veterans and Military Families (IVMF) and Hire Heroes USA. In the long run, other organizations will be able to offer their services to the veteran community, all in the same easy-to-use place.
Through VetNet, these founding partners offer a full spectrum of employment resources for members of the community. Whether starting a job search from scratch, looking for mentors in a specific industry or starting a business, transitioning service members, veterans and military spouses will be able to connect with career services, job opportunities and each other.
All of the content and resources are organized into three tracks by objective, each hosted on its own Google+ page.
- Basic Training Track (google.com/+VetNetBasic): The place to start. From resumes to interviewing tips to advice from buddies. Dial into our first Resume Workshop today at 3pm EST.
- Career Connections Track (google.com/+VetNetCareer): Walmart, GE and Capital One are just a few of the companies that are participating in VetNet to help veterans and military spouses find civilian careers. Check out today’s Vets In Finance panel at 2pm EST.
- Entrepreneur Track (google.com/+VetNetEntrepreneur): An 8-week college-level course on the fundamentals of starting a business, starting next week, on Tuesdays and Thursdays.
Pass it on to any active-duty and vets you know.
Hat tip: BadBlue.com/Tech.
DEAL! Let's take that "$10 in cuts for every $1 in tax increases" the Democrats have been talking about for years
I just wish a single Republican leader could speak coherently about the fiscal cliff. To wit:
• Since 2002, Democrats have opposed all -- every single one -- of the Bush tax cuts. Every year. Until this year. What changed their minds?
• And if some tax cuts are good, why aren't more cuts better?
• Lastly, for years -- years! -- Democrats have been screeching about the supposed intransigence of Republicans in refusing a deal that offered $10 in spending cuts for one dollar in tax hikes.
Well, Democrats say they want a tax hike on "the rich" (actually, the "rich" include any sole proprietor or small business that grosses -- not nets -- as little as $200,000 a year).

That "10-for-one" deal would trade an $85 billion tax hike on America's top two percent for $850 billion in spending cuts. Coincidentally, that's the size of the so-called "one-time, emergency Stimulus" that gets spent each and every year as part of the baseline budget.
Hey, Republicans: could you ask the Democrats where the list of spending cuts are that meet their vaunted 10-for-one deal? That would take the $850 billion Stimulus out of each year's insane levels of borrowing and deficit spending?
Hey, Republicans: can you ask President Obama and the Democrats where their list of spending cuts is? Because I haven't seen one.
Can't anyone here play this game?
• Since 2002, Democrats have opposed all -- every single one -- of the Bush tax cuts. Every year. Until this year. What changed their minds?
• And if some tax cuts are good, why aren't more cuts better?
• Lastly, for years -- years! -- Democrats have been screeching about the supposed intransigence of Republicans in refusing a deal that offered $10 in spending cuts for one dollar in tax hikes.
Well, Democrats say they want a tax hike on "the rich" (actually, the "rich" include any sole proprietor or small business that grosses -- not nets -- as little as $200,000 a year).

That "10-for-one" deal would trade an $85 billion tax hike on America's top two percent for $850 billion in spending cuts. Coincidentally, that's the size of the so-called "one-time, emergency Stimulus" that gets spent each and every year as part of the baseline budget.
Hey, Republicans: could you ask the Democrats where the list of spending cuts are that meet their vaunted 10-for-one deal? That would take the $850 billion Stimulus out of each year's insane levels of borrowing and deficit spending?
Hey, Republicans: can you ask President Obama and the Democrats where their list of spending cuts is? Because I haven't seen one.
Can't anyone here play this game?
Tuesday, November 27, 2012
EXPOSED: The Real Tea Party Platform
Yes, the fabric of our society has unraveled to the point where the following principles are reviled as "extreme" and "right wing" by antique media and the punditry class:
Thousands of years of civilization have taught us the paramount importance and wisdom of individual sovereignty, private property, self-reliance and limited government. These are the precious gifts our country's founders bequeathed to us.
Now, in Washington, we have corrupt and craven politicians who stress the sovereignty of government, collectivism, reliance on handouts and the need for an unconstrained government.
But we Constitutional Conservatives are the extreme ones, right?
Hat tip: MOTUS.
Thousands of years of civilization have taught us the paramount importance and wisdom of individual sovereignty, private property, self-reliance and limited government. These are the precious gifts our country's founders bequeathed to us.
Now, in Washington, we have corrupt and craven politicians who stress the sovereignty of government, collectivism, reliance on handouts and the need for an unconstrained government.
But we Constitutional Conservatives are the extreme ones, right?
Hat tip: MOTUS.
THE REAL CRASH: Surviving America's Bankruptcy
Author and business analyst Peter Shiff was one of the few pundits to predict the 2008 financial crisis. His latest book, "The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country", describes the nature of the crisis yet to come.
As Chris Cox and Bill Archer -- former members of President Clinton's Commission on Entitlement and Tax Reform -- explain in today's Wall Street Journal, the official national debt figure of $16 trillion is woefully understated.
The real figure is in excess of $87 trillion -- or roughly 550 percent of GDP.
And what do we hear from Democrats and Repubicans in Washington? Nonsense about taxing the top two percent, which wouldn't amount to one-tenth of one percent of the real debt.
The main problem--and where most of the other problems begin--according to Schiff, is the Fed's manipulation of interest rates. By interfering with the free market value of money, and making it cheaper than the market would dictate, the Fed encourages financial bubbles that then necessarily pop. When a bubble pops, the market needs to correct itself; however, over the past 20 years, the Fed has not really allowed this correction to take place, as every time a bubble pops the Fed has lowered the interest rate even further, causing more money to enter the system and a new bubble to form. First it was dot-com stocks, then it was housing, and now it is government spending.
As a matter of fact, while government spending has reached new and mind-boggling heights in the recent past, it has actually been ballooning in this direction for years, spurred on largely by the low-interest rates that the Fed has provided. The government has used this borrowed money to maintain and extend social programs (such as Social Security and Medicare), and, more recently, bailout packages for failing businesses and entire industries. All the while, the government has been going deeper and deeper into debt. A big part of what has allowed the American government to borrow as much as it has (and to keep on borrowing now) is the fact that the American dollar is the world's reserve currency, which means it is always in demand, and hence people and organizations have been willing to act as creditors in order to get it. For Schiff, though, the sheer size of the debt, and the fact that it is running away faster and faster everyday (and has no realistic chance of ever being repaid) will sooner or later turn investors away from considering the American dollar a valuable reserve--at which point it will lose its status as the world's reserve, and investors will stop investing in it.
At this point, the American government will have but two options. It can either declare bankruptcy, or it can print the money it needs to pay its debt. In either case, an enormous crash will result, for in the first case, an astronomical sum of money that the economy had assumed existed will suddenly be wiped away, and in the latter case hyperinflation will set in, and the American dollar will be whittled down to worthless.
...the country will be forced to start over. For Schiff, this may not be such a bad thing, for, according to him, the nation has simply put itself in an unsustainable position, and the sooner it starts over the better. At that time, Schiff argues, America can finally get back to the small government and free-market forces that the country's founding fathers designed the nation around. While much of the book is focused on how the country can do this now, before the crash hits (in such areas as banking & finance, taxation, healthcare, education, the military, et. al.), Schiff very much believes that nothing can actually prevent the crash from coming, and that therefore, most of the rebuilding will have to be done after The Real Crash.
As Chris Cox and Bill Archer -- former members of President Clinton's Commission on Entitlement and Tax Reform -- explain in today's Wall Street Journal, the official national debt figure of $16 trillion is woefully understated.
The real figure is in excess of $87 trillion -- or roughly 550 percent of GDP.
And what do we hear from Democrats and Repubicans in Washington? Nonsense about taxing the top two percent, which wouldn't amount to one-tenth of one percent of the real debt.
Monday, November 26, 2012
BUT IT'S ALL ABOUT FAIRNESS: 144,000 households, 1 percent of taxpayers, pay half of California's income taxes
Fairness. That's the word I associate with massive, bloated, Democrat-controlled failed states like California.
California is destroying itself -- the U.S. is next.
...One of the more egregious aspects of Brown’s [Proposition 30] is the retroactivity of the income tax increase, which would apply to all income earned after January 1, 2012. [Imposition of] this retroactive tax hike makes it clear to businesses that if they want some semblance of certainty in tax planning, they must leave California. Campbell’s Soup, Comcast, and Samsung have been the latest to come to this realization; either shutting down facilities in-state or moving operations outside of California.
California residents already contend with one of the most progressive tax codes in the country. Not only does California have high marginal rates, those high rates kick in at relatively modest income levels. California’s middle class residents earning $48,000 a year, for example, pay a state tax rate of 9.3%. Millionaires in 47 other states don’t even pay that high of a marginal rate. However, one of the state tax code’s greatest flaws is it’s over-reliance on upper income households and the revenue volatility it creates, and that is a problem that Prop. 30 would further exacerbate.
As of 2010, the state relied upon 144,000 households, 1 percent of taxpayers, for 50 percent of total state income tax... [With Proposition 30's passage,] the top 10 percent of earners would be responsible for over 80% of the projected income generated - a fact that Gov. Brown and other advocates of the bill readily acknowledge.
California is destroying itself -- the U.S. is next.
POOR RICHARD'S PROGRESSIVE ALMANAC: The Bizarro Ben Franklin's Most Infamous Quotes
What if Benjamin Franklin had been a progressive? Well, for one thing, no one would have ever heard of him, but -- more importantly -- some of his quotes in Poor Richard's Almanac would be dramatically different:
• A penny saved is a penny best confiscated by the government and redistributed to the rulers' green energy scams
• The early bird shouldn't get the worm, in the interest of fairness
• Honesty is the best policy, except when serving in public office
• Energy and persistence are overrated
• Never do today what you can leave till tomorrow
• God helps those who help themselves to others' labors
• Rather go to bed with dinner and rise in debt
• The Constitution grants people the right to happiness, whether they pursue it or not
• Early to bed and early to rise, makes no difference, because in the interest of fairness, those who rise late should be treated equally
Each of these quotes represents the antithesis of their original intent. Yet each represents a platform of the modern Democrat Party.
• A penny saved is a penny best confiscated by the government and redistributed to the rulers' green energy scams
• The early bird shouldn't get the worm, in the interest of fairness
• Honesty is the best policy, except when serving in public office
• Energy and persistence are overrated
• Never do today what you can leave till tomorrow
• God helps those who help themselves to others' labors
• Rather go to bed with dinner and rise in debt
• The Constitution grants people the right to happiness, whether they pursue it or not
• Early to bed and early to rise, makes no difference, because in the interest of fairness, those who rise late should be treated equally
Each of these quotes represents the antithesis of their original intent. Yet each represents a platform of the modern Democrat Party.
Sunday, November 25, 2012
HELPFUL CHART: The idiocy of raising taxes on "the rich" (and by that, they mean small business owners)
Considering the Democrat establishment and the media (but I repeat myself) are engaged in an annoying, fact-free debate over tax rates and government receipts, I figured 'hey, why not do the job antique media should be doing?'
In this case, use actual "data" and "history" to come to some conclusions. Yes, out of the box thinking, I know.
Using data culled from the Tax Policy Center and the National Taxpayer's Union, I've plotted out a historical picture of individual tax rates on the highest wage-earners vs. individual tax receipts received by the federal government.
So what do facts, logic and reason tell us?
Here are some observations:
• The Reagan tax cuts ignited the greatest explosion in receipts from individuals to the government in history. Even Bill Clinton was the beneficiary.
• And Clinton also benefited from the the invention of the World-Wide Web, which touched off the tech boom during the nineties. The Clinton tax rate would have certainly suppressed growth had it not been for the coincidental occurrence of the tech boom and the massive spending on the Y2K (Year 2000) remediations that required investments of nearly a trillion dollars before the turn of the millenium.
• After the 9/11 attacks had sucked half a trillion dollars out of the economy, the Bush tax cuts helped revive the economy. That is, until the Democrats' grand experiment with Fannie Mae, Freddie Mac and subprime borrowers touched off the mortage meltdown.
The government has a spending problem, not a revenue problem. And raising taxes on the most productive Americans -- including the small businesses who employ 54 percent of the private sector -- will have a debilitating effect on the economy.
Of course, facts, logic, history and reason are all anathema to Democrats and the media, which is why you'll never see any of these issues discussed.
In this case, use actual "data" and "history" to come to some conclusions. Yes, out of the box thinking, I know.
Using data culled from the Tax Policy Center and the National Taxpayer's Union, I've plotted out a historical picture of individual tax rates on the highest wage-earners vs. individual tax receipts received by the federal government.
So what do facts, logic and reason tell us?
Here are some observations:
• The Reagan tax cuts ignited the greatest explosion in receipts from individuals to the government in history. Even Bill Clinton was the beneficiary.
• And Clinton also benefited from the the invention of the World-Wide Web, which touched off the tech boom during the nineties. The Clinton tax rate would have certainly suppressed growth had it not been for the coincidental occurrence of the tech boom and the massive spending on the Y2K (Year 2000) remediations that required investments of nearly a trillion dollars before the turn of the millenium.
• After the 9/11 attacks had sucked half a trillion dollars out of the economy, the Bush tax cuts helped revive the economy. That is, until the Democrats' grand experiment with Fannie Mae, Freddie Mac and subprime borrowers touched off the mortage meltdown.
The government has a spending problem, not a revenue problem. And raising taxes on the most productive Americans -- including the small businesses who employ 54 percent of the private sector -- will have a debilitating effect on the economy.
Of course, facts, logic, history and reason are all anathema to Democrats and the media, which is why you'll never see any of these issues discussed.
THE COMING U.S. DEFAULT: Top 10 Fun Facts
A big thing that's lurking beneath our politics -- which most people don't see yet -- is that there is going to be a mad scramble between "investor classes" in the coming US managed bankruptcy, with Obama insisting his coalition be paid off first and Republicans demanding their constituents be first in line to collect the very limited of dollars salvageable from the concern. Four or five dollars have been promised for every dollar actually available. --Ace
Holman Jenkins says that a nicer term for the inevitable U.S. default is 'entitlement reform'. Here are the top 10 inconvenient truths of the coming soft bankruptcy of the United States:
10. A few years ago, when the economy was humming, a common estimate held that federal taxes would have to rise 50% immediately to fully fund entitlement programs.
9. Today, a 50% tax increase would be needed just to meet the government's current spending, never mind its future obligations.
8. State and local taxes would have to increase by $1,385 per household immediately to make good the pension promises to state and local workers, including firefighters and cops.
7. Under Paul Ryan's Medicare plan, the affluent would pay more.
6. Under President Obama's plan, the affluent would flee Medicare to escape the waiting lists, shortages and deteriorating quality as Washington economizes by ratcheting down reimbursements to doctors and hospitals.
5. You don't have a legally enforceable right to the free care you imagined you were promised.
4. If cutting subsidies for Big Bird is unthinkable, a joke, how much more so cutting benefits for middle-class voters?
3. President Obama knows cuts are necessary but seeks to position Democrats politically as the defender of all spending. Notice that, with ObamaCare, he is deliberately creating a constituency of the young to set against the old in future fights over the allocation of federal health care dollars.
2. America's fiscal cliff is an artificial crisis. We have no trouble borrowing in the short term. But at some point the market will demand evidence that long-term balance is being restored.
1. President Obama said in his first post-election press conference that he doesn't want any proposals that "sock it to the middle class." He knows better. A long-term socking is exactly what's coming to the middle class, which must pay for the benefits it consumes.
To paraphrase the Stark clan, Winter is coming.
Saturday, November 24, 2012
"THE SCARIEST PRESENTATION EVER": The Economic Endgame Hits Within 12 Months
Tyler Durden introduces what he calls "The Scariest Presentation Ever" with a single paragraph:
I'm no economist, but you don't have to be an expert at much of anything to recognize that unchecked borrowing is unsustainable. This principle applies equally to individuals, corporations and governments. And the debts thus far incurred by corrupt officials around the world have passed the tipping point: they will never be repaid.
What happens when sovereign defaults occur? History teaches us that economic crises usually result in war and despotism. It will be up to Americans -- all of us -- to preserve the civil society and re-institute a Constitutional Republic.
If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn't. The founder of Global Macro Investor "previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe... Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes." It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen... And we see a lot of those.
###
The world has no engine of growth with most of the G-20 countries approaching stall speed at the same time. Now, what is that? G-20, that’s the 20 biggest countries in the world. Approaching stall speed. We have no engine of growth. Ask yourself this question: What is the engine of growth in the United States? Currently it is being set up that the engine of growth is the stimulus package, is the United States government. Is that real growth? I contend - and you know the answer - no.
The western world is about to enter a second recession in an ongoing depression. For the first time since the 1930′s, we’re entering a recession. Before industrial production, durable goods orders, employment, and private sector GDP have made back their previous highs. Hear that again. For the first time since the 1930′s before we’ve made if back up on our feet. Usually we have a recession, it starts to grow again, and then we come back down. This is – this is a new trend.
Fact: This will to be the lowest cyclical peak in GDP growth in G-7 history. These are the weakest ever foundations on which to enter a recession.
The problem is down to one thing: Debt.
This is significant. The 10 largest debtor nations on earth have total debts of over 300% of world GDP. History tells us that when sovereign defaults occur, what does that mean? Sovereign defaults? Sovereign default, if a sovereign default occurs, that means Greece goes out of business, Spain goes out of business, Portugal goes out of business. The Euro is a bubble. It will crash."
History tells us when sovereign defaults occur, they come in a series of defaults. We need to understand history in order to grasp the present. The domino effect. In history when you have a default, one falls into the other and the other and the other...
...What is coming? EU sovereign debt defaults. UK sovereign default. Japan sovereign default. South Korea, sovereign default. China, sovereign default.
We are here. We don’t know exactly what is to come, but we can all join the very few dots from where we are now to the collapse of the first major bank, with very limited room for government bailouts... We can easily join the next dots from the first bank closure to the collapse of the whole European banking system and then to bankruptcy of the governments themselves. There are almost no breaks in the system to stop this and almost no one realizes the seriousness of this situation.
The problem is not government debt, per se... The real problem is The 70 trillion in G-10 debt, the top 10 governments around the world, The 70 trillion is the collateral for $700 trillion in derivatives. That number equates to 1200% of global GDP and rests on very, very weak foundations.
Imagine the UK defaulting. What do you think would happen to Japan and China? Would they not be next? And do you think that the U.S. would survive unscathed? This is the end of the fractional reserve banking system and of fiat money. It is the big reset. This is what we’ve been talking about for quite some time. The big reset. This is what George Soros has wanted, the big reset.
When the system has to be rebooted, who are the players that are designing that? This is why when people say to you, George Soros, why would anybody want this to happen? Because if you know the reset is coming, anyway, if you know it’s unsustainable, then you want to be the one to design what the future looks like.
From a timing perspective, I think 2012 and 2013 will usher in the end. You have to understand that the global banking collapse and massive defaults would bring about the biggest economic shock the world has ever seen. There would be no trade finance, no shipping finance, no finance for farmers, no leasing, no bond market, no nothing. The markets are, frankly, at a terrifying point of realizing that there is nothing they can do including quantitative easing to prevent this collapse.
The next phase, as Spain and Italy go, will be to see nationalization of banks – the nationalization of banks and the assumption of bank debts on government balance sheets...
We have Tim Geithner coming out and saying, The governments have to take this debt on. Then expect to be shut out of financial markets. Bonds will be stuck at 1% in the U.S., Germany, and UK, and Japan for this phase.
The whole bond market will be dead.
That means nobody wants to invest in companies. Short selling on bonds will be banned. Short selling stocks will be banned. CBS, banned. Short futures, banned. Put options, banned. All that will be left will be the dollar and gold. As defaults in governments and banks come to fruition, we risk a closure of the stock market entirely and a closure of the banking system as occurred in Argentina in 2001, Russia in 1998, and Brazil in 1999.
We have around six months of trading in western markets to protect ourselves or make enough money to offset future losses. Spend your time looking at the risks of custody safekeeping, counterparty, et cetera. Assume that no one and nothing is safe. After that put your tin helmet on and hide until the new system emerges. I wish I could see another option with an equally high probability, but I can’t find one. All we can do is hope that I’m wrong, but either way, a new system will emerge and it will open up a whole new set of opportunities, but we are going back 40 years in time and 1500 to 3000 years in trading.
I'm no economist, but you don't have to be an expert at much of anything to recognize that unchecked borrowing is unsustainable. This principle applies equally to individuals, corporations and governments. And the debts thus far incurred by corrupt officials around the world have passed the tipping point: they will never be repaid.
What happens when sovereign defaults occur? History teaches us that economic crises usually result in war and despotism. It will be up to Americans -- all of us -- to preserve the civil society and re-institute a Constitutional Republic.
Wednesday, November 21, 2012
EVEN IN MASSACHUSETTS: Lawmakers Slam Obama Administration's Hard-Sell of Welfare Benefits for Aliens
The U.S. government is running trillion-dollar deficits every year. And the Obama administration is trying its level best to spend more on food stamps and health care benefits for illegal aliens:
Are there no Democrats with virtue who will decry this madness?
Hat tip: Olli.
‘Outrage’ over fed EBT push for aliens
Local lawmakers are fuming over an Obama administration policy promoting welfare and EBT benefits for immigrants, with a “welcome” package and promotional website that encourage new arrivals to take advantage of the nation’s generous government largesse.
...The fight over welfare for recent immigrants is unfolding in Washington, where a group of GOP senators has sent a letter to U.S. Department of Agriculture Secretary Thomas Vilsack demanding answers as to why food stamps and other welfare benefits are being promoted to new immigrants. The agency’s Welcome toUSA.gov website includes a comprehensive handbook directing immigrants on how to obtain food stamps, Medicare, disability and other taxpayer-funded aid...
“The federal government now is giving packets to people when they come to the United States ... that promote welfare benefits,” said U.S. Sen. Jeff Sessions, an Alabama Republican and ranking member of the Senate budget committee. “That is contrary to law and sound policy.”
...Sessions and three other GOP senators sent a letter to top Obama cabinet members in August asking how many people were given visas who are now on public assistance. A follow-up letter sent last month seeks to determine how much federal money is spent annually on food stamps for noncitizens, as well as explanations on why the USDA is actively promoting welfare expansion...
• The USDA signed a pact in 2004 with Mexico requiring 50 U.S.-based consulates to hand out information to Mexican nationals on how to obtain welfare and other benefits.
• The agency created a Spanish-language ad in which an individual is “pressured” into accepting food stamps, even though she says her family is self-sufficient.
• The USDA’s Supplemental Nutrition Assistance Program — commonly known as food stamps — has a website that includes a “community outreach partner toolkit” that says local communities “lose out” when eligible people don’t apply for benefits. The site claims that boosting participation will generate billions in “new economic activity.”
A SNAP pamphlet says Electronic Benefits Cards, which allow welfare recipients to withdraw cash and pay for food and other items, “make it more difficult to commit SNAP fraud.” The ad also states: “Everyone wins when eligible people take advantage of benefits to which they are entitled.”
Another site gives SNAP recruiters tips on how to “overcome the word ‘no’” when seeking to sign up new recipients...
Are there no Democrats with virtue who will decry this madness?
Hat tip: Olli.
Tuesday, November 20, 2012
DEAR LEADER: His Philosophy on Creating Prosperity
The President explains his philosophy on creating jobs:
Yes, I know that zero-sum economics runs counter to all of human history. But these are Democrats we're talking about.
Yes, I know that zero-sum economics runs counter to all of human history. But these are Democrats we're talking about.
KYLE BASS ON THE COMING GLOBAL COLLAPSE: "Potemkin villages on a Jurassic scale"
Investor Kyle Bass made his first billion shorting the housing market just before the 2008 collapse. And his warnings about the current sovereign debt crisis appear just as prescient. The mathematics -- and his logic -- are unassailable.
In a nutshell: we are very close to the endgame of Keynesian can-kicking. Which means: the real crisis has yet to begin`.
Read the whole damn thing. Bass could be wrong, but I wouldn't bank on it.
In a nutshell: we are very close to the endgame of Keynesian can-kicking. Which means: the real crisis has yet to begin`.
...Converting all balances to USD, central bankers around the world have expanded their balance sheets beyond$13 trillion, from only $3 trillion ten years ago. Global central banks’ assets now comprise at least a quarter of all global GDP – up from only 10% in 2002...
...As investors, what do we think about the quadrupling of central bank balance sheets to over $13 trillionin the last ten years? It certainly doesn't make me feel any better to say it fast or forget that we moved ever so quickly from million to billion to trillion dollar problems. It has become increasingly clear over the last four years that the common denominator in policy response to financial crises is, and will continue to be, more central bank easing (printing money) to finance fiscal deficits. Let us recap the actions of three of the four most prominent, powerful and influential central banks in the world over the course of the last several weeks...
...Central bankers are feverishly attempting to create their own new world: a utopia in which debts are never restructured, and there are no consequences for fiscal profligacy, i.e. no atonement for prior sins.They have created Potemkin villages on a Jurassic scale. The sum total of the volatility they are attempting to suppress will be less than the eventual volatility encountered when their schemes stop working. Most refer to comments like this as heresy against the orthodoxy of economic thought. We have a hard time understanding how the current situation ends any way other than a massive loss of wealth and purchasing power through default, inflation or both...
...As each 100 basis points in cost of capital costs the US federal government over $150 billion, the US simply cannot afford for another Paul Volcker to raise rates and contain inflation once it begins...
...It took the United States 193 years (1789-1981) to aggregate $1 trillion of government debt. It then took 20 years (1981-2001) to add an additional $4.8 trillion and, in the last 10 years (2001-2011), a whopping $9.8 trillion has been added to the federal debt. Since 1981, the US increased its sovereign debt by 1,560% while its population increased by only 35%...
...Our belief is that markets will eventually take these matters out of the hands of the central bankers. These events will happen with such rapidity that policy makers won’t be able to react fast enough.
The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years. Those that treat this belief as axiomatic will most likely bethe biggest losers. A handful of investors and asset managers have recently discussed an emerging school of thought, which postulates that countries, as the sole manufacturer of their currency, can never become insolvent, and in this sense, governments are not dependent on credit markets to remain fiscally operational. It is precisely this line of thinking which will ultimately lead the sheep to slaughter...
...How many Japanese have questioned how (if ever) a quadrillion yen of debt will ever be repaid when it represents over 20X central government revenues? (Answer: it can't be)
Very few participants are aware of the enormity and severity of the problems the developed world faces. Those that are aware are frantically trying to come up with the next “solution” to the debt problems. In our opinion (which hasn't changed since 2008), the only long-term solution is to continue to expand program after program until the only path left is a full restructuring (read: default) of most sovereign debts of the developed nations of the world (a la late 1930s and early 1940s when 48% of the world’s countries restructured their debts)...
Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation...
Read the whole damn thing. Bass could be wrong, but I wouldn't bank on it.
Monday, November 19, 2012
A Brief, Illustrated History of the Public Sector Unions That, Together With The Democrat Party, Are Waging War on the Taxpayer
Throughout American history -- and as recently as the 1950s -- there were no unions for government workers. Public-sector employees were expected to earn a bit less than their private-sector equivalents. The reasons they did so included an interest in public service, job security and reasonable benefits.
But that changed in the late fifties with New York City Mayor Robert Wagner's cynical appeal to the votes of city workers. He signed an executive order authorizing them to unionize, and soon other local and state Democrat legislators around the country followed his lead.
These efforts culminated in 1962, when President John F. Kennedy granted federal employees the right to collectively bargain. Since then, public sector union membership has skyrocketed while, in the private sector, unions have fallen out of favor.
In 2009, private sector union members were outnumbered for the first time by their public sector counterparts.
The historical basis of unions revolved around workers receiving a reasonable share of a company's profits. But that tenet is nonsensical when applied to public service. Governments don't make profits; they simply assess taxes.
The aims of public sector unions conflict directly with the interests of taxpayers.
And because it has been exceedingly hard to fight public sector unions, the salaries and benefits of public employees have skyrocketed in recent years. Since the election of Barack Obama, the number of federal employees making over $150,000 a year has more than doubled to over 10,000.
In 2009 government salaries jumped 2.4%, approximately twice the increase earned by private sector employees. In fact, the average salary of a federal worker is now $71,000, about $22,000 more than the average private sector employee.
Worst of all, public sector unions have negotiated pension plans that are proving financially untenable. Many allow workers to retire at age 55 at around their full salary in their final years of employment. These pensions often include inflation adjustments as well as lifetime free health care.
These plans are so outrageous that state retirement systems, for example, are currently underfunded by about a trillion dollars.
So how have public sector unions achieved these amazing results? The answer is the hundreds of millions of dollars that unions have donated to federal campaigns since 1990. Almost every single dollar went to Democrats or Democrat causes. In the 2008 election alone, some estimates put public sector union contributions to Democrats at $60 million.
These unions are also astroturfing for Democrats, providing slush funds to help liberal causes. An example is ThePartyIsOver.org, a faux populist website designed to discredit TEA Party activists.
The Democrats' health care bill, the 'Employee Free Choice Act' and the $800+ billion stimulus bill all contained payoffs to public sector unions. In fact, while the private sector has shed 8,000,000 jobs since the recession began, the number of public sector jobs has risen nearly every month -- led by President Obama's various spending programs at the federal level.
Public sector unions are killing our economic system and the American taxpayer. The debt unleashed by their outrageous benefits plans simply cannot be paid. The union bosses have lied to their members about lifetime benefits and they have betrayed the American people. Public sector unions must be disbanded and outlawed before more of our country begins to resemble Greece, Spain and other European countries.
Those countries are teetering on the brink of economic calamity, thanks to unions just like ours. And please observe that the union bosses and the Democrat Party could give a rat's behind about American taxpayers -- 20 percent of whom are currently unemployed or underemployed. They still want theirs.Based upon: Amy H. Laff, StateBrief. Linked by: Mark Levin, The Washington Examiner, Ace o' Spades and TigerHawk. Thanks!
CHART: America's Road to Collapse
Suffice it to say that no country in history has ever survived a 195% debt-to-GDP ratio without devastating economic repercussions.
Yet that is the course Barack Obama, Harry Reid and Nancy Pelosi -- and the entire Democrat Party -- have charted for America.
Suffice it to say that these cries for sanity and reform will go unanswered by Obama, Pelosi and Reid.
On this road lies ruin. And the Democrat Party has no concern for the children who will be sentenced to an economic catastrophe.
Is there no Democrat with virtue who will decry this madness?
Yet that is the course Barack Obama, Harry Reid and Nancy Pelosi -- and the entire Democrat Party -- have charted for America.
A letter from 232 multi-industry organizations, in conjunction with the U.S. Chamber of Commerce, is calling on President Obama and Congress to restructure the nation’s entitlement programs and put them on a path toward financial sustainability...
...This year,federal government spending outlays totaled $3.6 trillion, while total revenue fell short at about $2.5 trillion. Mandatory spending—on Medicare, Medicaid, Social Security, and other social programs—accounted for 62 percent of total spending in 2012, and it is expected to rise to 67 percent of spending over the next 10 years. The letter links the rising costs of entitlement programs tochanging demographics, noting that “unlike other aspects of the entitlement debates, demographics are facts.”
...As the letter states, these indisputable demographics make it quite clear that Congress and the President have a job to do: fundamentally restructure the entitlement programs to ensure they are a true safety net for Americans today, as well as for future generations of Americans.
Suffice it to say that these cries for sanity and reform will go unanswered by Obama, Pelosi and Reid.
On this road lies ruin. And the Democrat Party has no concern for the children who will be sentenced to an economic catastrophe.
Is there no Democrat with virtue who will decry this madness?
IT'S 1937 ALL OVER AGAIN: The Ongoing Obama Depression Will Continue Until Further Notice
When George Santayana said, "Those who cannot learn from history are doomed to repeat it," he was describing ideologues like Barack Obama.
How else can one explain his desire to replay the Great Depression? Based upon Obama's policies, we're replaying the year 1937, just months after FDR's reelection to a second term. In short, FDR's incessant interference with the private sector and his commitment to the socialist-progressive principles of Stuart Chase turned out to be abject failures.
But Obama is replaying FDR's failed strategies to a tee.
If Obama truly cared about "the middle class", he'd abandon his destructive policies that are literally crushing American families.
Individual taxes must be lowered, especially in the highest brackets, because business owners need the funds to hire more workers. Corporate taxes must be slashed and "double jeopardy" foreign profits taxes eliminated to attract money to our shores. The vast regulatory bureaucracy must be scaled back. And the out-of-control labor unions need to be brought to heel.
And government must spend less. Much, much less.
But the president won't change his disastrous progressive course and will instead continue on the road to economic misery. He is an ideologue who believes he has a "mandate" (51-49, mind you) to continue the Depression that will forever bear his name.
Update: Historian Amity Shlaes agrees: "2013 Looks a Lot Like 1937 in Four Fearsome Ways."
How else can one explain his desire to replay the Great Depression? Based upon Obama's policies, we're replaying the year 1937, just months after FDR's reelection to a second term. In short, FDR's incessant interference with the private sector and his commitment to the socialist-progressive principles of Stuart Chase turned out to be abject failures.
But Obama is replaying FDR's failed strategies to a tee.
...According to the BLS, real weekly earnings adjusted for inflation for Q3 2012 are the same as Q4 2007. Even worse, seasonally adjusted real weekly earnings for full time workers, all occupations, are at similar levels to the mid 1980's.
Overall, weekly earnings dropped -0.2% in October and since October 2010 have fallen by -1.8%. The above graph means 50% of workers are earning less than $332 per week in real purchasing power, accounting for inflation since 1982-194. Not adjusted for inflation, the median weekly earnings for all occupations was $765 in Q3 2012. Now think about rents of $1500+ a month in many cities and how 50% of all earners are making less than $765 per week, before taxes...
...[Above] is the real hourly wage, or adjusted for inflation since 1980. Again we see in terms of real dollars, workers aren't really getting ahead...
If Obama truly cared about "the middle class", he'd abandon his destructive policies that are literally crushing American families.
Individual taxes must be lowered, especially in the highest brackets, because business owners need the funds to hire more workers. Corporate taxes must be slashed and "double jeopardy" foreign profits taxes eliminated to attract money to our shores. The vast regulatory bureaucracy must be scaled back. And the out-of-control labor unions need to be brought to heel.
And government must spend less. Much, much less.
But the president won't change his disastrous progressive course and will instead continue on the road to economic misery. He is an ideologue who believes he has a "mandate" (51-49, mind you) to continue the Depression that will forever bear his name.
Update: Historian Amity Shlaes agrees: "2013 Looks a Lot Like 1937 in Four Fearsome Ways."
Sunday, November 18, 2012
Rep. Adam Kinzinger tries to teach Bill Kristol about conservatism, fails
Kinzinger makes a valiant effort, but explaining conservatism to a Beltway hack like Kristol is akin to teaching calculus to a cow:
Kristol's shrill cry to raise taxes on the businesses that employ more than half of the private sector proves that he is both an economic illiterate and an intellectual lightweight.
Kristol isn't a conservative: he's an entertainer -- and a piss-poor one at that.
Bill,
All this haggling over a tax rate made me realize one thing... We have failed to explain what conservatism really means.
Immigrants who have come here since Reagan have never had a strong spokesman for conservatism, and in a world where the prevailing worldview is through a spectrum of government, this concept is insanely foreign.
I don't care what tax rates are, they are all random number[s] derived from haggling and negotiations. What I want is a small government with a strong and fierce military that can kill our enemies and break their toys, legitimate safety nets that provide food and not a way of life, and some roads and bridges. Put that vision into action and set the tax rates at a percent that covers those costs. And once you have our payment, leave us the hell alone. That my friend, is conservatism.
The musings of a soon to be sophomore congressman.
Adam Kinzinger
Sent from my iPhone
Kristol's shrill cry to raise taxes on the businesses that employ more than half of the private sector proves that he is both an economic illiterate and an intellectual lightweight.
Kristol isn't a conservative: he's an entertainer -- and a piss-poor one at that.
CHART: The Top 10 Union Fat-Cats Who Destroyed 18,500 Jobs
No Twinkies for you:
Or, in this case, Hostess.
Hat tip: BadBlue News.
These union boss salaries explain how the AFL-CIO–affiliated Bakery, Confectionery, Tobacco Workers and Grain Millers International got so carried away as to bleed Hostess Brands literally to death, throwing 18,500 people out of work and putting an end to the iconic Twinkie:
You can make a nice living as a parasite. On the down side, it only lasts until you have killed off your hosts.
Or, in this case, Hostess.
Hat tip: BadBlue News.
DELUSIONAL: California Predicts Budget Surplus in 2014 Thanks to Tax Hikes, Anti-Business Regulations
There's crazy -- and then there's West Coast Crazy:
Let me be the first to predict that California will not have a budget surplus in 2014. Nor will it run "only" a $2 billion deficit.
By my estimation, California's budget deficit will run at least an order of magnitude higher -- at $20 billion plus. You can stick a fork in the Golden State.
When is a prediction of a $1.9 billion shortfall actually considered good news?
In deficit-battered, recession-weary California, that's the case.
It sounds strange, until you consider that it sounds a whole lot better than the staggering $41 billion deficit projected at the end of 2008 -- and much better than the $25 billion hole that the state's Legislative Analyst was forecasting in 2010. And much more rosy than the $16 billion shortfall Gov. Jerry Brown was projecting just last spring.
On Wednesday, the Analyst's office -- respected for its nonpartisanship -- said its $1.9 billion deficit estimate covers the next year-and-a-half. The report cast the state's recovering finances in a favorable light, thanks to earlier budget cuts and the voter approval of Proposition 30.
"The additional, temporary taxes provided by Proposition 30 have combined to bring California a promising moment: the possible end of a decade of acute state budget challenges," the LAO report said.
In fact, the report floated the possibility of the state actually running a surplus of up to a billion dollars by 2014.
Let me be the first to predict that California will not have a budget surplus in 2014. Nor will it run "only" a $2 billion deficit.
By my estimation, California's budget deficit will run at least an order of magnitude higher -- at $20 billion plus. You can stick a fork in the Golden State.
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