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

Tuesday, July 23, 2013

NO TAXATION WITHOUT REPRESENTATION: Americans Say "Hell No" to a Federal Bailout of Detroit

Guest post by Investors Business Daily

Other People's Money: Having dug itself into an $18 billion hole, bankrupt Detroit now has allies in Washington calling for a federal bailout. This isn't going to help the city recover.

Bankruptcy, invented by the Renaissance Dutch to halt a debtor's spiral of debt and the behavior that led to it, is in fact a positive first step to any sort of recovery.

"There's some good things that come out of bankruptcy," Sen. Rand Paul, R-Ky., told Breitbart News. "One is you get to start over. Bankruptcy lets you be forgiven of your debt. And you do so by getting new management, better management, and by getting rid of unwieldy contracts ... and things come back more to normal."

In the case of Detroit, that's what's needed, because nothing has been fiscally normal about that city since its long decline began in the 1960s.

The city's failure to confront its fiscal reality is precisely what led to its dire straits in the first place.

A bailout may bandage over the derelict city's $18 billion in debts, but it won't change the fact that it's still run by an emergency manager, has nonexistent city services, and contains abandoned houses and fallow land that make parts of the city literally look like a war zone.

Bailouts can't help because these wounds were self-inflicted, not external.

The city's top taxpayer, the auto industry, for starters failed to adapt to the global economy. Out-competed by the Japanese, it opted for protectionism instead of sharpening its competitive game.

As a result, jobs dried up, and the city lost 60% of its population, going from 1.8 million in 1950 to 702,000 in 2010. But instead of attracting new investment as more survival-oriented places do, Detroit maintained the fourth-highest rate of corporate taxation in the country, ensuring that investment stayed out.

In denial, it kept 10,000 city government workers on the payroll, boomtown strength. The Detroit News found the city had more employees per resident — 55 — than any city in the U.S. except San Francisco.

Its failure to downsize left it with unfunded pension debt of somewhere between $3.5 billion and $9 billion.
Layoffs, though hard for workers, would have freed them to find jobs in cities that could keep their promises, and would have helped Detroit. But politicians had absolutely no connection with reality to do it.

They seemed to believe money was in infinite supply. The federal bailout of the Detroit-based auto industry in 2008 went a long way toward making the city think it too would get a bailout if it wanted one.

The problem here is that there have been nearly 40 municipal bankruptcies since President Obama took office, with more to come. If Detroit gets a bailout, they'll all line up for one. Yet bankruptcy's chief virtue is that it forces cities, and the voters, to reconsider bad decisions, to change their behavior and focus on recovery.

This happened in New York in 1975, when President Ford shocked the city out of its complacency by telling it to "drop dead." It got some aid eventually, but the net result was the 1977 election of Ed Koch, who governed as a fiscal conservative. That's the kind of tough love Detroit needs right now — not another bailout.


Source: Investors Business Daily

How Hard Will China's Crash Be?

Guest post by George Friedman


Major shifts underway in the Chinese economy that Stratfor has forecast and discussed for years have now drawn the attention of the mainstream media. Many have asked when China would find itself in an economic crisis, to which we have answered that China has been there for awhile -- something not widely recognized outside China, and particularly not in the United States. A crisis can exist before it is recognized. The admission that a crisis exists is a critical moment, because this is when most others start to change their behavior in reaction to the crisis. The question we had been asking was when the Chinese economic crisis would finally become an accepted fact, thus changing the global dynamic.

Last week, the crisis was announced with a flourish. First, The New York Times columnist and Nobel Prize-recipient Paul Krugman penned a piece titled "Hitting China's Wall." He wrote, "The signs are now unmistakable: China is in big trouble. We're not talking about some minor setback along the way, but something more fundamental. The country's whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be."

Later in the week, Ben Levisohn authored a column in Barron's called "Smoke Signals from China." He wrote, "In the classic disaster flick 'The Towering Inferno' partygoers ignored a fire in a storage room because they assumed it has been contained. Are investors making the same mistake with China?" He goes on to answer his question, saying, "Unlike three months ago, when investors were placing big bets that China's policymakers would pump cash into the economy to spur growth, the markets seem to have accepted the fact that sluggish growth for the world's second largest economy is its new normal."

Meanwhile, Goldman Sachs -- where in November 2001 Jim O'Neil coined the term BRICs and forecast that China might surpass the United States economically by 2028 -- cut its forecast of Chinese growth to 7.4 percent.

The New York Times, Barron's and Goldman Sachs are all both a seismograph of the conventional wisdom and the creators of the conventional wisdom. Therefore, when all three announce within a few weeks that China's economic condition ranges from disappointing to verging on a crash, it transforms the way people think of China. Now the conversation is moving from forecasts of how quickly China will overtake the United States to considerations of what the consequences of a Chinese crash would be.

Monday, July 22, 2013

25 Terrifying Factoids Regarding the Democrat Utopia of Detroit

Guest post by Michael Snyder

It is so sad to watch one of America's greatest cities die a horrible death.  Once upon a time, the city of Detroit was a teeming metropolis of 1.8 million people and it had the highest per capita income in the United States.  Now it is a rotting, decaying hellhole of about 700,000 people that the rest of the world makes jokes about.  On Thursday, we learned that the decision had been made for the city of Detroit to formally file for Chapter 9 bankruptcy.  It was going to be the largest municipal bankruptcy in the history of the United States by far, but on Friday it was stopped at least temporarily by an Ingham County judge. 

She ruled that Detroit's bankruptcy filing violates the Michigan Constitution because it would result in reduced pension payments for retired workers.  She also stated that Detroit's bankruptcy filing was "also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy", and she ordered that a copy of her judgment be sent to Barack Obama.  How "honoring the president" has anything to do with the bankruptcy of Detroit is a bit of a mystery, but what that judge has done is ensured that there will be months of legal wrangling ahead over Detroit's money woes. 

It will be very interesting to see how all of this plays out.  But one thing is for sure - the city of Detroit is flat broke.  One of the greatest cities in the history of the world is just a shell of its former self.  The following are 25 facts about the fall of Detroit that will leave you shaking your head...

1) At this point, the city of Detroit owes money to more than 100,000 creditors.

2) Detroit is facing $20 billion in debt and unfunded liabilities.  That breaks down to more than $25,000 per resident.

3) Back in 1960, the city of Detroit actually had the highest per-capita income in the entire nation.

4) In 1950, there were about 296,000 manufacturing jobs in Detroit.  Today, there are less than 27,000.

5) Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.

6) There are lots of houses available for sale in Detroit right now for $500 or less.

7) At this point, there are approximately 78,000 abandoned homes in the city.

8) About one-third of Detroit's 140 square miles is either vacant or derelict.

9) An astounding 47 percent of the residents of the city of Detroit are functionally illiterate.

10) Less than half of the residents of Detroit over the age of 16 are working at this point.

11) If you can believe it, 60 percent of all children in the city of Detroit are living in poverty.

12) Detroit was once the fourth-largest city in the United States, but over the past 60 years the population of Detroit has fallen by 63 percent.

13) The city of Detroit is now very heavily dependent on the tax revenue it pulls in from the casinos in the city.  Right now, Detroit is bringing in about 11 million dollars a month in tax revenue from the casinos.

14) There are 70 "Superfund" hazardous waste sites in Detroit.

15) 40 percent of the street lights do not work.

16) Only about a third of the ambulances are running.

17) Some ambulances in the city of Detroit have been used for so long that they have more than 250,000 miles on them.

18) Two-thirds of the parks in the city of Detroit have been permanently closed down since 2008.

19) The size of the police force in Detroit has been cut by about 40 percent over the past decade.

20) When you call the police in Detroit, it takes them an average of 58 minutes to respond.

21) Due to budget cutbacks, most police stations in Detroit are now closed to the public for 16 hours a day.

22) The violent crime rate in Detroit is five times higher than the national average.

23) The murder rate in Detroit is 11 times higher than it is in New York City.

24) Today, police solve less than 10 percent of the crimes that are committed in Detroit.

25) Crime has gotten so bad in Detroit that even the police are telling people to "enter Detroit at your own risk".

It is easy to point fingers and mock Detroit, but the truth is that the rest of America is going down the exact same path that Detroit has gone down.

Detroit just got there first.

All over this country, there are hundreds of state and local governments that are also on the verge of financial ruin...

"Everyone will say, 'Oh well, it's Detroit. I thought it was already in bankruptcy,' " said Michigan State University economist Eric Scorsone. "But Detroit is not unique. It's the same in Chicago and New York and San Diego and San Jose. It's a lot of major cities in this country. They may not be as extreme as Detroit, but a lot of them face the same problems."

A while back, Meredith Whitney was highly criticized for predicting that there would be a huge wave of municipal defaults in this country.  When it didn't happen, the critics let her have it mercilessly.

But Meredith Whitney was not wrong.

She was just early.

Detroit is only just the beginning.  When the next major financial crisis strikes, we are going to see a wave of municipal bankruptcies unlike anything we have ever seen before.

And of course the biggest debt problem of all in this country is the U.S. government.  We are going to pay a great price for piling up nearly 17 trillion dollars of debt and over 200 trillion dollars of unfunded liabilities.

All over the nation, our economic infrastructure is being gutted, debt levels are exploding and poverty is spreading.  We are consuming far more wealth than we are producing, and our share of global GDP has been declining dramatically.

We have been living way above our means for so long that we think it is "normal", but an extremely painful "adjustment" is coming and most Americans are not going to know how to handle it.

So don't laugh at Detroit.  The economic pain that Detroit is experiencing will be coming to your area of the country soon enough.



Sunday, July 21, 2013

40 Economic Factoids Ya Ain't Ever Gonna See in Legacy Media

Guest post by Michael Snyder

#1 According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001. That number dropped to 21.6 percent in 2011.

#2 The United States was once ranked #1 in the world in GDP per capita. Today we have slipped to #14.

#3 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.

#4 Since the year 2000, the size of the U.S. national debt has grown by more than 11 trillion dollars.

#5 Back in the year 2000, our trade deficit with China was 83 billion dollars. Last year, it was 315 billion dollars.

#6 In the year 2000, about 17 million Americans were employed in manufacturing. Today, only about 12 million Americans are employed in manufacturing.

#7 The United States has lost more than 56,000 manufacturing facilities since 2001.

#8 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#9 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.

#10 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.

Bin Laden's Dead and So Is Detroit

Guest post by Investors Business Daily


Bankruptcy: The fundamental transformation of Detroit is complete, as socialism's theme park succumbs to government run amok, a reminder that government isn't the solution to our problems but their cause.

The wisdom of President Reagan's words have been lost under an administration that believes government is the entity from which all blessings flow. So has Margaret Thatcher's observation that the problem with socialism is that eventually you run out of other people's money.

Last Oct. 13, President Obama boasted in a weekly address about the bailed-out auto industry that, "We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. I bet on American workers and American ingenuity, and three years later that bet is paying off in a big way."

Less than a year later, the American auto industry is indeed surviving, bolstered largely by a Ford that refused government assistance and foreign transplants located in right-to-work states. Even General Motors has been forced to pay the free market some lip service, lest its customers go elsewhere, even as it accepts Chevy Volt subsidies.

Detroit, however, is dead, and unions and government killed it. Michigan recently became a right-to-work state, but it was too late to save a city that had become beholden to unions. As the United Auto Workers helped destroy the auto industry in and around Detroit, it's no accident that Mercedes-Benz decided to build its flagship SUV in a shiny new facility in Vance, Ala.

Labor overhead was an albatross around Detroit's neck. Until recently, total pay and benefits for a full-time worker at the Big Three averaged $140,000 a year vs. $80,000 for their foreign competitors. Add an estimated $2,000-plus per car for retiree health care and pensions for the Big Three, and you wonder not why Detroit failed, but why it didn't fail sooner.

Saturday, July 20, 2013

Detroit and those evil Republican S.O.B.s

Second City Cop is an excellent police blog centered around the creaking, failed Democrat political machine in Chicago and its ramifications for police work. The Chicago scene is its primary -- but not exclusive -- focus. SCC also features previews of Chicago's coming attractions, like Detroit's economic collapse:
We were just reminiscing about the past. A little over a year ago, Mitt Romney said to let Detroit go bankrupt, that a complete financial overhaul of the city, its corrupt practices and restructuring of debt was probably the best route for the beleaguered city. He was speaking as a businessman would with a company that was bleeding money. Remember all the democrats and media making fun of him for actually considering a city the size of Detroit could (or should) fail?  Silly Mormon businessman.

In a completely unrelated story, we just heard that following an eleventh hour appeal to the Obama administration, Detroit filed for bankruptcy on Thursday, placing the city residents, its employees, its retirees and its creditors in financial limbo:
  • Detroit filed the largest municipal bankruptcy in U.S. history on Thursday, setting the stage for a costly court battle with creditors and opening a new chapter in the long struggle to revive the city that was the cradle of the American auto industry.

    The bankruptcy, if approved by a federal judge, would force Detroit's thousands of creditors into negotiations with the city's Emergency Manager Kevyn Orr to resolve an estimated $18.5 billion in debt that has crippled Michigan's largest city.

    Michigan Governor Rick Snyder said he saw no other options for Detroit and approved Orr's request to file for Chapter 9 bankruptcy protection.

    "Detroit simply cannot raise enough revenue to meet its current obligations, and that is a situation that is only projected to get worse absent a bankruptcy filing," wrote Snyder, a Republican, in a letter accompanying the filing.

    Detroit's creditors are expected to face huge losses, and the future of retiree pension and health benefits for thousands of city workers hangs in the balance.
  • Buried in the middle of the report is a telling climax to this sorry tragedy:
    Any hope of a federal bailout to avert bankruptcy fizzled last week after Mr. Orr spoke with the White House, including Obama confidante Valerie Jarrett, according to city and White House officials.
    This is where blue governance has brought Detroit in the end: not even a liberal Democratic administration will step in to save the pensions of thousands of public workers and African Americans, condemning countless innocents to having their pensions and health benefits gutted in bankruptcy court.

    Blue model defenders will point to the cruel exodus of General Motors, the unjust outsourcing of American manufacturing, and the general unfairness of life in the big city as the culprits in the slaying of Detroit. But these champions of the marginalized should keep a few facts in mind.

    Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.

    And now Detroit’s desperate request for a bailout has been turned down by the Obama White House.

    Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate.
But hey, those Republicans are evil sons-of-bitches, aren't they?


Hat tip: BadBlue Gun News.

Thursday, July 18, 2013

Chicago and Detroit: Examplars of Unbridled Democrat Rule

Democrats: if they weren't in power, they'd be useful only as comic relief.

Exhibit A - Chicago: Chicago’s 2012 pension shortfall jumps nearly 90%, to $36 billion

Pension costs are already unraveling the state’s finances. Now it’s the city of Chicago’s turn... The city’s out-of-control pension liabilities and “accelerating budget pressures associated with those liabilities” has resulted in another credit downgrade by Moody’s Investors Service... The national credit rating agency downgraded the city’s nearly $8 billion in general obligation bonds to A3 from Aa3. This is a triple-notch downgrade...


The rating agency has long critiqued pension funds’ use of overly ambitious investment return targets that allow funds to understate their true pension shortfalls... Based on the new Moody’s methodology, which uses more conservative assumptions, Chicago’s 2012 pension shortfall jumps nearly 90%, to $36 billion...


However, Chicago’s burgeoning liability is not the city’s only problem. The yearly bill to pay for those pensions is set to spike 2.5 times to $1.2 billion in 2015 from $467 million in 2014...

Pensions are threatening to do to Chicago what has happened to Detroit. Which reminds me.

Exhibit B - Detroit: The largest municipal bankruptcy in US history

The Motor City faces $20 billion of long-term liabilities. The Wall Street Journal's Matt Dillon says those holding onto $11 billion in unsecured debt are basically staring into the abyss, facing the prospect of getting next to nothing from the city's obligations... The pension funds want to block Orr's attempt to drastically reduce the amount of benefits owed to current and former city workers.


Apropos of nothing, the last time Detroit had a Republican Mayor was 51 years ago.

In short, letting Democrats run a government is like giving a 17-year old boy a fifth of Jim Beam and the keys to the Camaro.


Hat tip: BadBlue News.

Tuesday, July 16, 2013

What President Obama Meant When He Described His "Fundamental Transformation of America" [Allen West]

Guest post by Allen West


Well, if there was ever any doubt what President Obama meant by "fundamentally transforming" our nation, this should put it to rest. Now 101 million -- one third of our population -- is on federal food aid of some sort. And it's not like Americans would go hungry either as 35.9% of adults age 20 and over are obese. We now have more people on food aid than are working in the private sector, and only 47% of working-age Americans have full-time jobs.

The number of Americans receiving subsidized food assistance from the federal government has risen to 101 million, representing roughly a third of the U.S. population.

The U.S. Department of Agriculture estimates that a total of 101,000,000 people currently participate in at least one of the 15 food programs offered by the agency, at a cost of $114 billion in fiscal year 2012.

That means the number of Americans receiving food assistance has surpassed the number of full-time private sector workers in the U.S...

...A “potential for overlap” exists with the many food programs offered by the USDA, allowing participants to have more than their daily food needs subsidized completely by the federal government.

According to a July 3 audit by the Inspector General, the USDA’s Food Nutrition Service (FNS) “may be duplicating its efforts by providing participants total benefits in excess of 100 percent of daily nutritional needs when households and/or individuals participate in more than one FNS program simultaneously.”

Food assistance programs are designed to be a “safety net,” the IG said.

“With the growing rate of food insecurity among U.S. households and significant pressures on the Federal budget, it is important to understand how food assistance programs complement one another as a safety net, and how services from these 15 individual programs may be inefficient, due to overlap and duplication,” the audit said.

Where are the leaders who will step forward to reverse this trend?


In Obama's Chicago, a Trayvon Tragedy Occurs Every Day of the Week

Guest post by Investors Business Daily


Urban Decay: When more Americans are killed in the president's hometown than in Afghanistan, even the media take notice. When will the president notice the carnage in the city run by his former chief of staff?

People are dying fast and furiously in Chicago, so much so that it caught the CBS eye and prompted "Evening News" anchor Scott Pelley to sit down Monday night with Rahm Emanuel, President Obama's former chief of staff and mayor of this monument to progressive decay, and ask a very pertinent question.

"I got a letter from a viewer the other day who asked us why we were spending so much time at 'The Evening News' covering Afghanistan when more people were dying in Chicago," Pelley said. "Why is the murder rate up 30%?"

Pelley put the number of murders in Chicago at 275 so far this year. On Monday alone, nine young people were shot in suspected gang-related violence, the Chicago Sun-Times reported.

Emanuel responded that crimes such as burglary, armed robbery and theft are down 10%. This is true, but it's small comfort to the parents of Heaven Sutton, 7, who was killed as she tried to dodge bullets fired from the guns of gangbangers. She was selling snow cones at the time.

Heaven didn't get quite the attention of Trayvon Martin, the Florida teenager killed by neighborhood watch member George Zimmerman. When perceived racism can be invoked as a cause of death, headlines blare. When it happens in a city beset by liberalism's failures, crickets chirp.

Mayor Emanuel announced Monday that he's devoting another $4 million to tear down vacant buildings where gang members live and store guns and drugs. Structurally sound buildings will be boarded up. But why are they vacant and boarded up? Why did 200,000 people flee Chicago in the past decade?

Chicago, like Illinois, is overtaxed and overregulated, a climate that attracts neither businesses nor people. It was the ideological incubator for a community organizer who would become president and blame all of America's problems on those who worked hard and succeeded.

Emanuel told Pelley that in addition to being a law enforcement issue, "it's about values. As I said then (when a 7-year-old Heaven was shot and killed last month), who raised you? How were you raised?" And by whom, we might add. Decades of progressive liberalism that started with LBJ's Great Society did much to destroy the black family in America.

Progressive liberalism does not teach the values of hard work and reaping the fruits of one's labor. It gives men fish instead of teaching them how to fish. It demeans the value of marriage by saying, "Don't worry, the government will be your parent," as generations of inner-city youth grow up without a father or male role model in the home.

The fact that African-Americans, with 12.6% of the nation's population, account for 50% of the murder victims just might have something to do with the fact that among blacks, 72% of births are to unmarried women. Yet President Obama focuses on gay marriages.

Mayor Emanuel and his former boss are all about redistributing wealth rather than creating it and fail to realize that no one ever got a job from a poor person. They embrace a cradle-to-grave, paternalistic liberalism that encourages dependence and discourages ambition, that puts food stamps above paychecks.

The black unemployment rate nationally jumped from 13.6% in May to 14.4% in June, with the jobless rate for black youths aged 16 to 19 increasing from 35.2% to 44.2%; yet President Obama says we are on the "right path."

Hope and change? In Barack Obama's liberal citadel of Chicago, there's little hope that anything will change anytime soon.



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Monday, July 15, 2013

15 Photos From the #MarchForJobs Rally (Bringing Together Blacks, Hispanics and Whites) You'll Never See In Legacy Media

Stunning that I haven't seen these photos from the DC March for Jobs on Al Sharpton's MSNBC comedy show.



Hat tips: U.S.News, Breitbart, and WWNC.

NEW STUDY: Obamacare to destroy up to 1 million low-wage jobs and completely bankrupt Medicaid

The invaluable James Pethokoukis with the score:

A new study suggests President Obama’s Affordable Care Act might have yet another huge and negative unintended consequence: if low-income adults can get health insurance through Obamacare’s Medicaid expansion, they are less likely to try and get a job — or keep a job. As Public Health Insurance, Labor Supply, and Employment Lock by Craig Garthwaite, Tal Gross, and Matthew J. Notowidigdo puts it:
Our results suggest a significant degree of “employment lock” – workers employed primarily in order to secure private health insurance coverage. The results also suggest that the Affordable Care Act – which similarly affects adults not traditionally eligible for public health insurance – may cause large reductions in the labor supply of low-income adults. … One must exercise considerable caution when directly applying our results to the ACA, but our results appear to indicate that the soon-to-be-enacted health care reform may cause substantial declines in aggregate employment.
How substantial might the shift from work to welfare be?
...Applying our labor supply estimates directly to this population, we predict a decline in employment of between 530,000 and 940,000 in response to this group of individuals being made newly eligible for free or heavily subsidized health insurance. This would represent a decline in the aggregate employment rate of between 0.3 and 0.6 percentage points from this single component of the ACA.
And the other big finding here is Obamacare could cause an even bigger and costlier move into Medicaid than current forecasts:
Our results suggest a far larger increase in Medicaid enrollments from the ACA than is currently estimated. In 2011, approximately 8.9 million Americans with incomes below 139 percent of the poverty line were covered by employer-provided health insurance. If all states implement the Medicaid expansion, our estimates suggest that approximately 4.2 million of these privately insured individuals will move into public coverage...
...And Obamacare would cause the reverse effect, pushing those getting subsidized coverage to leave the labor force. The result is especially worrisome for the health of working America if you combine it with Obamacare’s possible nudge toward more part-time workers in place of full-time workers.

In other words, the Cloward-Piven destruction of the American economy continues apace.

But, hey: right about now seems like a good time for the Republican-Corporatist Old Boy Network to pass Amnesty for illegal immigrants and destroy even more entry level jobs.


Saturday, July 13, 2013

SURPRISE! Kathleen Sebelius and HHS are the Top Violators of Federal Anti-Paperwork Law

In a perfect world, Kathleen Sebelius and her apparatchiks would be on the hook for a dozen years in solitary. In reality, they'll probably get a Presidential Alinsky Medal.

ObamaCare implementation has led to a surge in violations of a federal law designed to minimize paperwork burdens, according to a new analysis... The American Action Forum (AAF) found that the Health and Human Services Department has violated the anti-paperwork statute more than any other department in the past three years.

HHS had 154 violations of the Paperwork Reduction Act over the past three years, earning a "poor" grade from the White House budget office.

The Paperwork Reduction Act requires federal agencies to justify information collections that put a paperwork burden on individuals and businesses.

HHS has violated the statute "either by collecting information without proper approval or allowing collections to lapse without following the renewal process," according to the American Action Forum.

Many of HHS's violations come from regulations that implement parts of the Affordable Care Act. All told, HHS has violated the Paperwork Reduction Act on regulations that add up to more than 700,000 hours of regulatory burdens and cost more than $13.6 million, according to the AAF analysis.

"HHS lacked the legal authority to compel the collection of information, but still imposed the paperwork," the conservative think tank's analysis said.

But don't worry: paperwork violations are the least of our problems with respect to Obamacare.


Hat tip: BadBlue News.

Ted Cruz Introduces a 2-Page Bill to Completely Obliterate the Obamacare Train Wreck

Ted Cruz, as a freshman Senator from Texas, is doing more to fight for liberty than John Boehner and Eric Cantor (who happen to be in the majority) combined.

On Thursday, Senator Ted Cruz (R-TX) introduced legislation in the Senate that would completely defund the Affordable Care Act, aka Obamacare. He wasn’t alone in proposing the legislation either. The bill has 19 co-sponsors, all Republicans, including RINOs.

Amazingly simple, the Defund Obamacare Act of 2013 is only 2 pages.


...All 45 Republican Senators called for a permanent delay of Obamacare earlier this week in a letter to Barack Obama.

Cruz added, “The Administration’s selective enforcement of Obamacare’s implementation is no indication that the law is going away. To the contrary, it demonstrates the President’s unyielding determination to force the unworkable law on the American people.”

...Senator Cruz then put in perspective just how the IRS can no longer be trusted not only in the job they have been assigned with, but also the implementation of Obamacare. “Moreover, in light of the admitted misconduct of the IRS – targeting those whose political views differed from the President’s – we cannot trust the IRS to implement Obamacare. The American people cannot trust the IRS to create and enforce the largest federal database in history, containing the intimate details of our personal healthcare matters. And we cannot just wait for this law to implode under its own weight. The clock is ticking, and the time to act is now – Obamacare full implementation is set for January 1, 2014, but the enrollment for new entitlements starts on October 1, 2013.”

Democrat or Republican, call your Senators now and demand that they support the Defund Obamacare Act of 2013.


Friday, July 12, 2013

CBO shocked to discover that Obamacare has turned out to be a financial train-wreck, too

Guest post by Investors Business Daily.


In September 2009, President Obama promised the country that "I will not sign a plan that adds one dime to our deficits — either now or in the future."

But it turns out Obama did sign such a plan — in fact, ObamaCare could add upwards of 180 billion dimes to the deficit in its first 10 years, an IBD analysis of various official budget reports found.

According to the Congressional Budget Office's initial forecast made in March 2010, ObamaCare was supposed to cut the deficit a total of $124 billion in its first decade. Democrats seized on this to show Obama had lived up to his promise.

Almost as soon as Obama signed the law, however, his administration started making changes that added costs and cut revenues. The most recent was the one-year delay in the employer mandate.

The result is instead of a $124 billion deficit cut from 2010 to 2019, ObamaCare will likely add about $18 billion in red ink over those same years. And that assumes nothing else changes in the years ahead.

Costly Delays

When the administration announced the employer mandate delay, it said its decision resulted from business complaints about complex reporting requirements.

What it didn't say is it would cost as much as $10 billion in lost revenues, which is how much the CBO expected in fines from companies that didn't provide health benefits to workers that first year.

In addition, experts believe the delay will push more people into the subsidized exchanges, which could add as much as $5.3 billion in taxpayer costs, according to an analysis by the Committee for a Responsible Federal Budget.

Meanwhile, the Obama administration has also been putting off steep cuts to the Medicare Advantage program, which were supposed to help cover ObamaCare costs.

Medicare Advantage lets seniors choose from an array of private health plans, with premiums largely paid by Medicare. About 28% have enrolled in one of these plans.

Obama has been critical of Medicare Advantage, saying it provided "unwarranted subsidies" that "pad their profits but don't improve the care of seniors." And ObamaCare planned to squeeze $136 billion out of it between 2010 and 2019.
But just as these cuts were set to bite, the administration started handing out $8.35 billion in "quality improvement" bonuses to Advantage companies, under the guise of a "demonstration project."

The bonuses eliminated most of the scheduled cuts in 2012, according to the Government Accountability Office, which also challenged the claim that it was a legitimate demonstration project. That led to charges that Obama was just postponing the cuts to avoid upsetting seniors in an election year.

Earlier this year, his administration again reversed course on Medicare Advantage cuts, turning a planned 2.3% reduction in payments for 2014 into a 3.3% increase. Regulators claimed the payment boost resulted from a new methodology, but the change came after a flurry of protests from industry and lawmakers.

CLASS Dismissed

And in October 2011, Obama jettisoned an ObamaCare program, called CLASS, that was supposed to provide subsidized long-term care insurance for seniors.

Because CLASS collected premiums for years before paying any benefits, it appeared to cut ObamaCare's costs by $72 billion in the first 10 years.

But the program was so badly designed it would have gone bankrupt soon after that, and so the administration dumped it.
That decision, however, vaporized more than half of ObamaCare's promised deficit cuts.

After accounting for all these changes, along with overall changes in the CBO's cost projections, the law is now on track to add to the federal deficit in the first 10 years, albeit by a relatively small amount.

Supporters argue that even with these changes ObamaCare is still cutting deficits because it's lowering health spending and improving efficiency, and these savings will grow over time as deeper Medicare cuts and bigger tax bills kick in.

But a January report from the Government Accountability Office found that claims of long-term ObamaCare deficit cuts are based on dubious cost-saving assumptions that several independent agencies "expressed concerns about."

After factoring those out, the GAO found ObamaCare will add $6.2 trillion to deficits over the next 75 years.


Via: Investors Business Daily.

Massive Billboard Rips Lindsey Graham

Lindsey Graham, along with John McCain and Marco Rubio, were the primary co-conspirators with malevolent Statists like Chuck Schumer and Robert ("Hey, little girl!") Menendez in crafting the latest Amnesty bill. And some of his constituents are more than a little peeved.

A brand-new Georgia billboard proclaiming South Carolina’s alleged affinity for illegal aliens is raising eyebrows this week.

The sign, posted in Canton, Ga., declares: “South Carolina welcomes the undocumented. Sen. Lindsey Graham says his state has a labor shortage and wants more immigrants. For job tips, call his office at (864) 646-4090. Located in Pendleton, S.C. Only 2 hours from Atlanta!”


Sen. Graham, R-S.C., sits on a bipartisan committee that just passed a sweeping immigration-reform bill.

“These people must have been off the planet for the last five years,” said D.A. King, an immigration activist... “We don’t need more workers. We need more jobs.”

Isn't it amazing that 20 million people who stole into this country illegally are honored and catered to while the hundreds of millions citizens who pay the bills are ignored and tormented?


Hat tips: BadBlue News and BB.

Wednesday, July 10, 2013

3 CHARTS: The astonishing collapse of employment in America

At Real Clear Politics, Nicholas Eberstadt cuts through the media nonsense and politicians' fables and describes an economy that is still reeling from the mortgage meltdown.

...There is no way to sugarcoat it: the [employment] situation here is basically a disaster, a crisis far worse than most commentators and policymakers seem to recognize, and with no clear prospects for appreciable improvement over the near-term horizon. Simply put, work in America has in large measure collapsed-and a recovery worthy of the name is nowhere in sight.

...The official yardstick almost always used in assessing joblessness in America is the civilian unemployment rate, which tracks the overall percentage of workers and job-seekers without work. This may sound like a reasonable way to gauge joblessness, and the official unemployment rate does indeed have its uses. But as a practical matter this statistical tool seriously disguises and understates the magnitude of the ongoing jobs crisis.

According to the conventional unemployment rate, 7.6 percent of the country's civilian labor force was out of work last month (June 2013). While this is hardly a ‘good' number, these official figures suggest the jobs market is on a slow but steady rebound, gradually improving since early 2010, when the national rate was nearly 10%. According to those same numbers, current levels of joblessness are bad but by no means unprecedented: the official unemployment rate, after all, was above 7.6 percent at times in the 1970s, the 1980s, and (briefly) even in the 1990s...


...[But a] more basic and intuitively meaningful sense of how the jobs market is performing in this respect comes from the employment-to-population ratio (or simply the "employment ratio") for adult men and women.

When we look at these numbers, we get a very different picture of labor market conditions in America. By these numbers, there has been no "recovery" whatever in the jobs market since the Great Recession. Quite the contrary: the employment ratio today appears to be stuck at the same awful level recorded in early 2010-the worst level for more than a generation...


...And bad as all of this sounds, the true situation is if possible even worse-for the civilian employment ratio conflate trends for men and women. Broadly speaking, paid employment has been on the rise for women ever since Washington started keeping detailed numbers on the phenomenon back in the late 1940s-a reflection, and in turn a driver, of the big changes in the status of women underway in the postwar era...

...[But] the male employment ratio reached its peak in the early 1950s-and then commenced an almost relentless descent... How is this collapse of work to be explained? ... Over the past 60 years, the labor force participation rate for adult men has fallen by about 16 percentage points. In 1953, about 14 percent of adult men were out of the labor force-around one in seven. Today 30 percent are neither working nor seeking work-nearly one in three.

...The plain fact is that men in what are generally regarded as conventional working ages have been increasingly opting out of the workforce altogether. This arresting fact is brought home in Figure 4, which tracks employment ratios and labor force participation ratios for men 25 to 54-prime years of working life...


...it is apparent that there has been a major behavioral change in America, wherein a growing proportion of working-age Americans are checking out of paid labor altogether. Suffice it to say that not working at all is neither unthinkable nor unaffordable these days, even for adults in the prime of life. This too is a problem-a huge problem, one that has been gathering for decades, and one must unlikely to be undone by recourse to standard-issue Keynesian tools.

More than three years ago, then-House Speaker Nancy Pelosi claimed Obamacare was a "jobs bill" and that it would create four million new jobs.

Just like every other pledge related to Obamacare, Pelosi's statement was a blatant lie.

Under the current administration, the entire federal government appears devoted to encouraging dependence on government. Reversing course on the Democrats' failed "War on Poverty" will happen, one way or another, once the money runs out.


Sunday, July 07, 2013

White House: we can't enforce Obamacare's income eligibility requirements and never mind that the IRS is in charge

The rolling train wreck you may know as Obamacare suffered two spasmodic shocks this week as Yuval Levin explains.

When the Obama administration announced last Tuesday that they would be delaying Obamacare’s employer mandate and its associated reporting requirements by a year, many observers... noted that this could create problems for verifying eligibility for subsidies in the Obamacare exchanges.

[...California and many other] states clearly shared this worry about how they were supposed to confirm eligibility for subsidies. But on Friday, the Obama administration answered their question with what is becoming the familiar refrain of Obamacare implementation: “never mind.” Buried in a massive 600-page rule released without fanfare the day after July 4, the administration announced that it would effectively delay the requirement to verify eligibility in the state exchanges...
The delay of the individual mandate announced on Tuesday and the delay of the verification requirements for eligibility announced on Friday both suggest the same two kinds of problems: logistical difficulties with getting complex systems into place, and the fear of ending up with too few people in the exchanges.

...If not enough people sign up for the exchanges, the system could end up with an insufficient and unsustainable insurance pool—too few healthy people to balance the sick ones and fund the cost of their care... This concern is very high on the agenda of those implementing the law. It is why they are investing in a huge PR effort to drive enrollment. It is surely part of the reason for delaying the employer mandate—allowing some large employers to dump their workers into the exchanges without a penalty. And it seems very likely also to be a key factor behind the decision to allow people access to the exchange subsidies without proving they actually qualify for them.

Opening the door wide open to fraud could well increase the number of people in the exchanges, but it will also make that number far less meaningful—casting a shadow over whatever is achieved by the enrollment effort set to launch in the fall. It will also, needless to say, increase the cost of the exchange subsidies. The administration is clearly worried enough about enrollment to take that risk and bear that cost. It seems to be operating under the assumption that the way to secure Obamacare’s future is to get as many people as possible into the system and receiving subsidies...

So in short, ObamaCare is impossible to implement, its costs are spiraling out of control and now it turns out there will be no effort whatsoever to fight fraud. And the income eligibility requirements of Obamacare will be too difficult to verify, even though the IRS is supposed to be the law's enforcement arm.

But what I don't understand is how these problems didn't come to light during the months of hearings held on this legislation.

Isn't that the purpose of legislative hearings? To bring in experts who are familiar with the subject and will help explore all of the potential pitfalls of the proposed legislation? To debate the strengths and weaknesses of a proposed law so that the American people and their representatives could render an informed judgment before voting?

Oh, that's right. Forgot. The hearings never happened, because it was vitally important to pass the Obamacare monstrosity quickly before more people died or something. You see, we needed to pass the legislation in order to find out what was in it.


Hat tips: WarEagle1 and BadBlue News.

EXCLUSIVE: House Speaker Unveils Official Portrait

Biff Spackle scoops the world, snapping an exclusive look at the Speaker's official portrait.


Obamacare is melting down, no one knows what the president did for 8 hours after learning American diplomats were being murdered in Benghazi, the IRS was caught targeting Obama's political opposition, journalists are being monitored and harassed by the White House, and the Attorney General of the United States has been exposed as a serial perjurer.

And what is John Boehner's top priority? Not defunding the IRS. Not defunding Obamacare. Not naming a special investigative committee for these scandals. No. Boehner's top priority is granting amnesty to tens of millions of illegals, the vast majority of whom are net drains on the national treasury and who will vote Democrat.

It will take all of us -- each and every one of us -- making our voices heard to stop this madness. Call Boehner now at (202) 225-0600 and tell him it's not border security first. It's border security period.


Friday, July 05, 2013

10 Devastating Facts About Today's Unemployment Numbers (That Will Be Curiously Ignored by the Media)

While America's Pravda media and Wall Street heralded today's 7.6 official unemployment number, the real situation on Main Street is ugly -- and getting uglier.

10. True unemployment -- which includes part-timers seeking full-time work (also known as "U-6") -- jumped to 14.3 percent, a six-month high.

9. While the economy supposedly created an anemic 195,000 jobs this month, the quality of those jobs is decidedly poor:

In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 – an all time record high. Full time jobs? Down 240,000.

8. The Labor Force Participation Rate -- the percentage of eligible workers who actually have a job -- has stubbornly remained under 64 percent since 2011.


7. The unemployment rate for African-Americans is a devastating 23.7 percent.

6. The unemployment rate for Hispanics is 13.2 percent.

5. The unemployment rate for women is an unbelievable 11.6 percent.

4. The unemployment rate for youth is 16.1 percent.

3. The Labor Force Participation Rate has never been lower since the seventies, when the rise of the two-income household began. This, truly, represents a War on Women.


2. For the entire first half of 2013, only 130,000 full-time jobs have been created.

1. On January 10, 2009, Christina Romer, Obama’s top economic adviser, and Jared Bernstein, Joe Biden’s top economic adviser, predicted that if Obama’s stimulus plan passed the unemployment rate would not top 8 percent.

In fact, we are in the midst of a 54-month stretch of 7.5%+ unemployment, the longest such run ever. Prior to Obama’s presidency, the longest stretch of national unemployment at 7.5 percent or higher was a measly 32 months.

The Democrats' miserable predictions have helped run up trillions of dollars in debt while helping to destroy employment opportunities for every race, gender, creed, color, religion and age group.

The Obama White House is an Equal Opportunity Job Destroyer.


Hat tip: BadBlue News.