Category — Deficit

 I posted in the past that this is not over. Here is more. I’m saying again, this is not over. Bush’s profligate prescription plan started it. Congress took the bit in it’s mouth and it got worse. After the 2006 election all was lost on fiscal sanity, we are reaping what has been sown.I believe the Bible said something about bitter herbs…

The government has socialized Freddie Mac and Fannie Mae. All loans in arrears but solvent sold off to institutions, foreign investors and private bankers protected from serious losses and the American taxpayer given the pipe. If one is smart, one will buy a half M house quickly and default so that you can get a great rate of interest and a write down on principal.

For the rest, who paid your mortgage on time, tough, you should have been a deadbeat. Or a liberal. Or a Democrat. That’s redundant, sorry.

Meanwhile, a 45% drop in share value pummeled Lehman Brothers over additional worries about the global financial system. If Lehman cannot raise capital, it joins Bear Sterns. Hey, maybe some taxpayers can bail it out! Isn’t that what we’re for, to save the fat kitties?

Monday the markets went up like a teenage boy looking at porn; yesterday down like his mother caught him. Many investors are buying US Treasuries seeking safety, while the list of clowns below are doing their best to destroy any value in bonds by out of control spending and onerous porking up legislation for pet projects in their districts and states.

We have serious inflation in progress from the idiotic ethanol program and oil jolt. Add to that job losses, the housing deflation, illegals taking available jobs from idled workers and the government is cooking a bad tasting soup.

To move the housing market, the Fed must lower interest rates. To head off rampant inflation, the Fed must raise interest rates. For those who think inflation isn’t bad, you haven’t been food or clothing shopping. Look at the COLA numbers the government uses to set next year’s increases. They have manipulated the items used to calculate the inflation rate for SS, Medicare, SSDI, Veterans Benefits and Government Pensions to avoid paying the real rise in cost of living. The government doesn’t have the money to pay the entitlement programs without borrowing more, which means printing more. (Inflationary) Something will give, likely to be the dollar on the world market.

All the while telling the gullible seniors vote us back in office, we’ll keep the cost of Mixed Grill down for you.

Want to blame some people, start with this list of suspects. Most are Dems, but there are some RINO’s in there too.

Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008

1. Dodd, Christopher J (S) D-CT $133,900

2. Kerry, John D-MA (S) $111,000

3. Obama, Barack (S) D-IL $105,849

4. Clinton, Hillary (S) D-NY $75,550

5. Kanjorski, Paul E (H) D-PA $65,500

6. Bennett, Robert F (S) R-UT $61,499

7. Johnson, Tim (S) D-SD $61,000

8. Conrad, Kent (S) D-ND $58,991

9. Davis, Tom (H) R-VA $55,499

10. Bond, Christopher S ‘Kit’ (S) R-MO $55,400

11. Bachus, Spencer (H) R-AL $55,300

12. Shelby, Richard C (S) R-AL $55,000

13. Emanuel, Rahm (H) D-IL $51,750

14. Reed, Jack (S) D-RI $50,750

15. Carper, Tom (S) D-DE $44,389

16. Frank, Barney (H) D-MA $40,100

17. Maloney, Carolyn B (H) D-NY $38,750

18. Bean, Melissa (H) D-IL $37,249

19. Blunt, Roy (H) R-MO $36,500

20. Pryce, Deborah (H) R-OH $34,750

21. Miller, Gary (H) R-CA $33,000

22. Pelosi, Nancy (H) D-CA $32,750

23. Reynolds, Tom (H) R-NY $32,700

24. Hoyer, Steny H (H) D-MD $30,500

25. Hooley, Darlene (H) D-OR $28,750

I wonder how they voted on the parachutes for the heads of Freddie and Fannie?

If this doesn’t sound familiar your name’s been in the obits.

Markdown of dong, the Vietnamese currency, seen as act of desperation

Vietnam lurched closer to a currency crisis yesterday as the Government cut the official exchange rate to a record low. UBS analysts said that the country’s economic profile was more extreme than that of Thailand on the eve of the 1997 Asian financial crisis.

As well as severe concerns over prospects for the dong, some observers see signs that Vietnam faces the growing risk of a banking crisis. They say that investors should be aware of a potentially drastic blow to sentiment when views on the entire region are fragile.

Edward Teather, UBS economist, said that if Vietnam were to unravel, investor sentiment and financial markets in Malaysia, Singapore, Thailand, the Philippines and Indonesia could all take a knock. [snip]

Analysts said that the rising risk of a sudden and crippling depreciation comes as the cracks in Vietnam’s vaunted “economic miracle” have grown too large to ignore. Only 18 months since Vietnam entered the World Trade Organisation, inflation is running above 26 per cent and the country is facing a swollen trade deficit that dwarfs those of its SouthEast Asian neighbours. [snip]

Investors have deserted Vietnamese shares, sending the benchmark index down more than 60 per cent since January and giving it the status of the world’s worst performer in the past year. Soaring commodity inflation, particularly in food and fuel prices, has hit Vietnam many times more fiercely than it has the rest of Asia. Now, Vietnamese lured from villages by the promise of work in booming new factories are finding the pay inadequate and are striking for better salaries.

In the above para, change Vietnam to the United States. Sometime, from August to next April the food and fuel inflation will hit hard. If the GOP keeps control of the Senate it’s going to be bad, if the Democrats win it will be ruinous.

Mandated Change

“The way most goods and services become excellent — I mean really excellent — is through competition…How do you think we got from subsistence agriculture to super-cheap food? By mandates?”–Tyler Cowen

In November, the United States may take its strongest lurch to the left since 1933. The Republicans easily could lose 10 seats in the Senate.

The ramifications of this on the free market will be stultifying. The Democrats will not be able to raise taxes to produce more income; the AMT stands in the way of that. All tax increases on the richest 2% will go to covering the losses on the AMT.

They start with a deficit THEY say they can clean up. That means no new spending programs. Compounding their problem is Social Security, which they postulated was in great condition. When those increased obligations start cutting into their other favorite programs, the only choices are spending cuts or add regulations. You‘re aware which way that goes. Unless they chose Pigovian taxes, which must not be called taxes, call them encouragement for the masses.

A type of a Pigovian tax is a “sin tax”, which is a special tax on tobacco products and alcohol.
Such taxes have historically triggered rampant smuggling and flourishing black markets, especially if they create large differences in the price of popular products in neighboring jurisdictions. Critics of sin taxes argue they are regressive in nature and discriminate against the lower classes, since in many jurisdictions they are more likely to be consumers of alcohol and tobacco, more likely to consume a greater quantity of it, and thus are taxed a much greater proportion of their lower income.

Prepare for “instructions” on what light bulbs you may buy; how much health insurance to purchase and from which non-competitive companies with prix fixe premiums. Here is the auto fuel you will like at a price selected by the government.

[snip]
The business sector is going to be increasingly told what to sell and how to sell it. Particularly in health care and energy, firms are going to be accountable to bureaucrats, not to customers. Products and services will be designed in Washington, not by competition.
Regulations and mandates are an alternative to budgetary spending. For example, if politicians do not want to spend money on recruiting a volunteer army, they can institute a draft. Similarly if politicians do not have the resources on budget to pay for universal health insurance, they can pass a law making the purchase of health insurance mandatory. If such a law is effective, then the uninsured will be “drafted” into the army of the insured.

The Massachusetts Model

Consider the Massachusetts health insurance plan. Under the plan, individuals are required by law to purchase health insurance. The type of health insurance that they must by is defined by government regulations. As reported by the Massachusetts Medical Society,

“On March 8, the Commonwealth Connector Board approved seven insurance products for the Commonwealth Choice program, designed to cover uninsured residents who do not qualify for the Connector’s subsidized plans or Commonwealth Care. Below are links to spreadsheets containing the details about premiums, co-pays, and deductibles.”

If you live in Massachusetts and meet the eligibility parameters, you must purchase one of these seven policies. It is illegal for a health insurance company to compete for your business by offering a different policy, such as a policy with a higher deductible or a policy that excludes coverage for some medical procedures.

Private insurance companies still are allowed to conduct business and earn profits in Massachusetts. They are just not allowed to innovate or compete in terms of product offerings.

Regulatory Cost Control

Health care is going to be a tar-baby for government. The more that government grabs, the more it is going to find itself stuck with problems.[snip]

Energy Regulation

Businesses that affect the consumption of energy will also be managed by regulators. We can expect utility de-regulation to be halted and reversed. Alternative fuel mandates and emission controls will be gleefully enacted. [snip]

Labor Regulation

Another objective of the Left is to reduce income inequality. [snip]
…, we can expect to see a raft of new requirements placed on businesses requiring them to offer employees subsidized day care, longer vacations, higher minimum wages, and so forth. [snip]

Read about Germany’s unemployment debacle and the EU situation in general.

Backlash?

Many Americans will welcome the regulatory state. Many others will accomodate it. Only a minority of us will oppose it. Somewhere down the road, as people see the indignity of the many intrusions and the adversity of the consequences, I hope that there will be a backlash. Otherwise, if the era of mandates emerges as I fear it will, then the engine of capitalism in America may run out of the fuel of competition.

All these solutions when applied worked so well. See: Sweden, Soviet Union, Germany, France, Denmark et alia for such successful models.

Zimbabwe won’t have anything over us.
Ever hold a $10,000,000 dollar bill? One of those will get you a dollar meal, if you hurry up and buy it.

Zimbabwe bank issues $10million bill - but it won’t even buy you a hamburger in Harare

[snip] The central bank of the southern African country has a issued a 10million Zimbabwe dollar note. The move increases the denomination of the nation’s highest bank note more than tenfold. [snip]

U.S. stock futures point to major decline on re-open

LONDON (MarketWatch) — If futures contracts traded on a day when U.S. stocks weren’t even due to open are anything near accurate, then markets will be in for a major decline on Tuesday, with concerns about bond insurers and the health of financial institutions dragging markets lower.

[snip] The rescue plan presented by President Bush last week in a bid to help the U.S. avoid recession also wasn’t well-received by markets.

“Ambivalence over Bush’s rescue plan for the U.S. economy was the trigger of this rout,” said Martin Slaney, head of derivatives at GFT Global Markets. [snip]

Black Monday as biggest FTSE crash since 9/11 wipes off nearly £60bn in shares

[snip] It is also the worst start to the year for the stock market since records began in 1936. “I smell the acrid stench of fear and uncertainty,” said markets commentator David Buik of BGC Partners. European markets also tumbled.

The fall in the Footsie came after figures revealed a record government borrowing deficit for December of £7.8billion. [snip]

FTSE fall wipes £77bn off shares

THE London stockmarket was in freefall today plumetting 5.5 per cent - the biggest fall since 9/11 terror attacks. [snip]

[snip]The fall came as Asian markets tumbled overnight following losses for the Dow Jones Industrial Average on Friday, when investors were left unimpressed by the US Government’s tax-relief plans to spur on the economy.

Investors dumped shares because they were skeptical that an economic stimulus plan President Bush announced Friday would shore up the economy that has been battered by problems in its housing and credit markets. The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.

They get to do this again tomorrow

Pessimism Over US Stimulus Plan

“People are certainly nervous about a potential recession in the U.S. spilling over to the rest of the world,” said David Cohen, Director of Asian Economic Forecasting at Action Economics in Singapore.

“Maybe there’s still some wariness about politicians are able to come up with a compromise and act sufficiently quickly” on a stimulus package, Cohen said. “I think the impact would be marginal anyway.”

Spurting through this economic cadaver is the fear of overextended sponging by regimes of the various countries. Every dime spent is for personal edifices, social engineering and/or for vote buying.

Liberals/communists/Fascists/Progressives see this as a way to destroy this and other anti-socialist countries. Debase the currency and you have old Rome. Why the so-called conservatives do this, I cannot explain.

The stock markets are telling us they are drowning and a drowning person will grab a turd to stay afloat. What does the White House, complicit with Congress do? Of course, they tossed in the entire sewage treatment plant.

We cannot meet the expense of our extravagances now. Bush et al endorse a bailout using $145 billion more. ($145,000,000,000.00) Matters only get worse with this fiscal help.

You want to blame someone. Don’t look around the country for a target; look at YOUR Rep. and two Senators. Don’t you dare look somewhere else. Democrats voted for the porking of the budget. Republicans voted the same excessively large sums for themselves. Congress sets the banking laws, which tell the banks how much is kept in reserves for write-offs. Banks were racist if loans were not made to sub-prime borrowers (financial redlining). The borrowers could barely pay back the loans before the rates went up. Toss in speculators, sprinkle liberally with greed and prices went up beyond reasonable value.

Learn a new word:Deflation.

This is a McNasty since years go by before values rise up to where they once were.

Another Keating Five Show

I can understand Prog/Donk moonbats keeping this insanity going; they do not like our system. Why do the rest of you keep putting these same criminals back in their seats.Yes, criminals, this behavior rises to the level of malfeasance of office. They are stealing from the future to buy votes now.

It is coming close to the time to put a spark in the flashpan. Before they strip away the 2^nd Amendment and make all chattels to Washington.

Every new day brings a fresh spending proposal by the Moonbat-in-chief.  Today he’s going to eliminate homelessness over the next 5 years and is prosing $10 million in additional spending.  Apparently, the way Deval Patrick is spending money, the Federal Reserve gave Beacon Hill permission to start printing its own money.

But Patrick’s lack of focus is far more disturbing than his profligate spending habits.  The governor has no idea what direction he wants to take the state or what his real goals are.  He’s for education, and homelessness, and beach cleaning machines, and biotechnology, and bridges, and casinos, and anything else that strikes his fancy. 

I’m thankful he’s not disciplined; he’ll do less damage that way.

This bit of information posted after I put up the House of credit cards post reinforces the previous data.

Crisis may make 1929 look a ‘walk in the park’

As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiraling out of their control. [snip]

“It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue,” she adds. [snip]

York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster. [snip]

When a credit system implodes, it can feed on itself with lightning speed. Current rates in America (4.25 per cent), Britain (5.5 per cent), and the eurozone (4 per cent) have scope to fall a long way, but this may prove less of a panacea than often assumed. The risk is a Japanese denouement across the Anglo-Saxon world and half Europe.

Bernard Connolly, global strategist at Banque AIG, said the Fed and allies had scripted a Greek tragedy by under-pricing credit long ago and seem paralysed as post-bubble chickens now come home to roost. “The central banks are trying to dissociate financial problems from the real economy. They are pushing the world nearer and nearer to the edge of depression. We hope they will eventually be dragged kicking and screaming to do enough, but time is running out,” he said. [snip]

“The kind of upheaval observed in the international money markets over the past few months has never been witnessed in history,” says Thomas Jordan, a Swiss central bank governor.

“The sub-prime mortgage crisis hit a vital nerve of the international financial system,” he says.

The market for asset-backed commercial paper - where Europe’s lenders from IKB to the German Doctors and Dentists borrowed through Irish-based “conduits” to play US housing debt - has shrunk for 18 weeks in a row. It has shed $404bn or 36pc. As lenders refuse to roll over credit, banks must take these wrecks back on their books. There lies the rub.

Professor Spencer says capital ratios have fallen far below the 8 per cent minimum under Basel rules. “If they can’t raise capital, they will have to shrink balance sheets,” he said. [snip]

Maastricht rules may force the Government to raise taxes or slash spending into a recession. This way lies crucifixion. The UK current account deficit was 5.7 per cent of GDP in the second quarter, the highest in half a century. Gordon Brown has disarmed us on every front. [snip]

The ECB’s little secret is that it must never allow a Northern Rock failure in the eurozone because this would expose the reality that there is no EU treasury and no EU lender of last resort behind the system. [snip]

Goldman Sachs caused shock last month when it predicted that total crunch losses would reach $500bn, leading to a $2 trillion contraction in lending as bank multiples kick into reverse. This already seems humdrum.

“Our counterparties are telling us that losses may reach $700bn,” says Rob McAdie, head of credit at Barclays Capital. Where will it end? The big banks face a further $200bn of defaults in commercial property. On it goes.

Think positive, this ’slow motion train wreck’ is good for the U.S.

Yes, America needs a recession. Bernanke and Paulson won’t admit it. And investors hate them. We’re all trapped in outdated 1990s wishful thinking about a “new economy” and “perpetual growth.” [snip]

Let’s focus on 17 benefits from this recession. [snip]

1. Purge the excesses of the housing boom
No, it’s not heartless. Not like wartime calculations of “acceptable collateral damage.” Yes, The Economist admits “the economic and social costs of recession are painful: unemployment, lower wages and profits, and bankruptcy.” [snip]

2. U.S. dollar wake-up call
Reverse the dollar’s free fall and revive our global credibility. [snip]

3. Write-offs
Expose Wall Street’s shadow-banking system. [snip]
A lack of transparency is killing our international credibility. Write it all off, now!

4. Budgeting
Force fiscal restraint back into government. [snip]

5. Overconfidence
A recession will wake up short-term investors playing the market. [snip]

6. Ratings
Rating agencies have massive conflicts of interest; they aren’t doing their job. They’re supposed to represent the investors, but favor Corporate America, which pays for the reports. Shake them up.

7. China
Trigger an internal recession in China. [snip]

8. Oil
Force the energy and auto industries to get serious about emission standards and reducing oil dependency.

9. Inflation
Expose the “core inflation” farce Washington uses to sugarcoat reality.

10. Moral hazard
Slow the Fed from cutting interest rates to bail out speculators.

11. War costs
Force Washington to get honest about how it’s going to pay for our wars, other than supplemental bills that are worse than Enron-style debt financing.

12. CEO pay
Further expose CEO compensation that’s now about five hundred times the salaries of workers, compared with about 40 times a generation ago.

13. Privatization
Stop the privatization of our federal government to no-bid contractors and high-priced mercenary armies fighting our wars.

14. Entitlements
Force Congress to get serious about the coming Social Security/Medicare disaster. [snip]

15. Consumers
Yes, we’re all living way beyond our means, piling up excessive credit-card debt, encouraged by government leaders who tell us “deficits don’t matter.” Recessions will pressure individuals to reduce spending and increase savings.

16. Regulation
Lobbyists have replaced regulation. Extreme theories of unrestrained free trade plus zero regulation just don’t work; [snip]
Get real, folks.

17. Sacrifice
“We have not seen a nationwide decline in housing like this since the Great Depression, says Wells Fargo CEO John Stumpf. As individuals and as a nation Americans have always performed best in crises, like the Depression or WWII, times when we’re all asked to make sacrifices. Pampering us with interest-rate cuts and tax cuts… setting the stage for this new subprime/credit crisis.
Wake up, the train wrecked. Time to think positive, find solutions, demand sacrifices.

The only difference between the hard times of yesteryear is the surfeit of liberal thought eg. “Let the government save me while I idle away my time.” Perhaps an economic wedgie of hard conditions might change their aversion to self-sufficiency. Then again, they may just starve.

Regular readers of the blog won’t be shocked by the state’s impending budget crisis. MA faces a $1.3 billion budget deficit next year according to budget honcho Leslie Kirwan. She says that’s a conservative starting point because mandatory increases and inflation will mostly likely push the total higher.

How does Governor Patrick respond? He wants to spend $250 million more on affordable housing. And don’t forget about the billion for biotech, billions for transportation, and the rest of his Christmas wish list. There isn’t a spending initiative out there this guy won’t get behind.

But are the governor and budget chief on speaking terms? How else to explain the plethora of new spending in the midst of another budget crisis? And strangely enough, I haven’t seen any of the governor’s promised property tax relief. I’m sure the check’s in the mail though.

It’s too bad Patrick backed Obama. The only real hope we had in a Hillary win was Patrick heading to Washington. Now we’re stuck as he spends and taxes all of us into bankruptcy, but don’t blame me because I voted for Muffy.

It just makes me HATE Adam Smith!

No sooner had the bit configurations cooled in my post about Nationalized Health Care,  than estimable thinker “sean” appeared, with a certain UNABomber savoir faire, in The Comments Section.  He had little to say about health care, but a lot to say about capitalism.  He hates it; he dragged its body through the broken glass of Iraq and Haliburton to the bonfire of Blackwater killers.   It was impossible to argue with him, because he had no proposition, only a pronouncement.

A Nov. 2008 win for Hillary and Dems will produce just that result. Rangel is planning how to start.

I posted about this on 10/14 this year. Rangel fleshed out his proposal using your flesh and blood. You can bet your SSI (a modest amount) that the illegals and the boys in the ‘hood will not pay more.

Rangel on the Fringe

For the entire year House Ways and Means Committee Chairman Charles Rangel has promised a bill to repeal the Alternative Minimum Tax by raising $850 billion in other taxes. Now it appears we will finally see his handiwork this week. Mr. Rangel has enjoyed keeping the public guessing about the details, but what he intends is no surprise. He wants to raise taxes instead of simply repealing a tax that Congress never intended to levy on 23 million middle class taxpayers. Mr. Rangel would like to raise the tax on capital gains and dividends, perhaps by taxing all income at the high “ordinary income” rate…[snip]…will call for a 4% surcharge on individual adjusted gross income over $150,000 a year, tax private equity fees at ordinary income rates, and assume expiration of the Bush tax cuts…[snip]

Chairman Rangel insists it is not about the money. He wants a system with fewer tax rates, which is fine with him as long as most of them are higher. [snip]

If Mr. Rangel truly worried about the economic vitality of New York City and the country, he might take steps to shore up Wall Street’s status as the world financial center. Instead, the one thing he has promised to do is raise taxes on private equity to drive that business elsewhere.

Could this be too much even for Mr. Rangel’s fellow Democrats? Speaker Pelosi is pressuring Mr. Rangel to introduce a bill that does exactly what he says he would not do, which is to continue the annual charade in which Congress offers AMT relief one year at time. [snip]

When the tax rates rise on capital gains and dividends, investment slows. Every time these rates are changed, the economy has gone into a mild to severe recession.

Of course Rangel will tell you not everyone partakes, therefore the system is unfair. Some people invest, others buy flat screen TV’s; open an IRA or buy that new car. The constituency Rangel preaches to wish to spend money not earn it. If the government gives them the money, so much the better; “Don’t Worry, Be Happy!” Vote for Me!

That kind of increase in money won’t go to reducing the deficit or the debt. Instead you will see more pork spending. These wastrels honor themselves since we’re not so inclined.

[snip] Take for example the roll call vote on Sen. Jim DeMint’s amendment to kill a provision in the Senate Commerce, Justice and Science appropriations bill directing $2 million to three construction projects for a college in Harlem. The South Carolina Republican’s amendment would have struck the provision first inserted in the legislation by Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee. All three projects are named for Rangel. [snip]

But when it came time to vote on this crude effort by Rangel to use tax dollars to promote himself, it was preserved on a 61-34 vote.

The 2008 election will make a huge difference; unfortunately the opposition party in DC is not really an opposition party. They are just dividing the spoils. We need primaries for every race the in which the GOP is running.

Bush says economy is in good shape despite recession fears.

more below from him

Fears of dollar collapse as Saudis take fright

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

China threatens ‘nuclear option’ of dollar sales

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

· Blog - Dollar to collapse?

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Canada’s Dollar At Parity on U.S. Weakness, Commodity Surge

Canada’s dollar rose, trading equal to the U.S. dollar for the first time in 31 years, as climbing commodity prices boosted the outlook for the world’s eighth-biggest economy.

Oil prices jump above $82 a barrel

Commodities prices on Wednesday rose with crude oil hitting its sixth consecutive record high above $82 a barrel and spot gold approaching a near 28-year high of $730 an ounce troy. Base metals registered rises of between 2 and 10 per cent.

Agricultural commodities were down on profit-taking and signals that some food importing countries, such as India, had bought enough cereals for their inventories.

Crude oil jumped to a $82.51 after a larger-than-expected fall in US crude oil inventories last week.

China Freezes Some Prices in Move to Contain Inflation

BEIJING (AP) — China’s government has ordered some prices frozen and told officials to closely monitor others in its most drastic step yet to contain a surge in inflation.

The order, issued late Wednesday, came after inflation rose to 6.5 percent in August — its highest monthly rate in 11 years — propelled by a double-digit rise in politically sensitive food prices.

The order stressed the importance of maintaining “market stability” ahead of a key Communist Party meeting next month. It said controlling inflation would affect China’s development, reform and stability.

Oil Up Again As Low Dollar Spurs Buying

Crude Futures Surpass $83 a Barrel, Driven Largely by Weakening Dollar

NEW YORK (AP) — Crude oil prices surged further into record terrain Thursday, breaching $83 a barrel as the weak dollar and some worrisome weather in the Gulf of Mexico spurred buying.

Gasoline futures jumped as well. {snip]

A weak dollar supports oil prices by making futures cheaper for foreign investors, noted Antoine Halff, head of energy research at Fimat USA LLC.

It also prompts buying by domestic investors, who sense that demand for Nymex oil is rising overseas, said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

Bush Optimistic About Economy

WASHINGTON (AP) - President Bush on Thursday cited “some unsettling times” in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy basically is in good shape despite worries about a recession.

…and the question is, what’s this all about?”

For starters, it’s about our failure to save for the future. With childish glee we buy anything we see in a hedonistic frenzy: plasma screen TV, cars with a 60 month loan package, 5000 sq ft houses with ARMs, lavish vacations, spa treatments, plastic surgery, every electronic gewgaw, and oversized waistlines. If not borrowed through a bank, then on plastic it goes.

Given that we ceased manufacturing most of these items through offshore means and outsourced many more jobs, our capital (dollars) followed the production and jobs. This is one reason.

Here’s another. We will not fix the drain on the tax base by Medicare, Medicaid, Prescription drug plan, and Social Security. Instead, we financed this huge burden by selling Treasury bonds and T-bills. Worse, the government uses abnormal accounting methods to cover the gaps. When they amalgamated the Social Security fund with the general fund, it permitted the Great Society programs to survive until they enrolled too many voters to scrap it. When one robs Peter to pay Paul, Paul never complains.

So what happens?

The entire outflow of capital (dollars) goes somewhere; they convert to treasury notes with a guaranteed rate of return of principal and interest (future taxes). Countries are investors like everyone else; they go where the return rate is best.

The pop of the housing bubble forced banks and mortgage companies, by banking law, to initiate foreclosure proceedings. By law, at 120 days, bad loans are collected or written off against profit, which really electrifies the stockholders. The market saw them bail out of lending institutions, resulting in the drop in stock prices: Countrywide, Citi, Stanley Morgan, and Merrill Lynch to name some.

The Fed jumped in to improve liquidity by reducing interest rate by 50 basis points. The stock market went up, the banks took happy pills, and there was joy in Mudville.

Except

Other countries didn’t like the rate change (they lend money from overnight to 30 year investment bonds) and cashed in dollars for something other than greenbacks. Anything worked fine. The US is required to redeem these notes, which we pay for with Pounds, Euros, Swiss Francs, Ryials, clamshells, or worse gold. The US just became poorer.

To correct this, we will have to reduce the National Debt, (not just the deficit) by either cutting spending, raising taxes plus manufacturing goods here once more. Putting Americans to work in jobs we offshored starts the program. Getting the illegals out and cutting welfare programs forces the non-workers to change or get hungry.

We will find foreign imports more expensive; buying them will be inflationary (Remember Carter’s stagflation). To cut off the outflow of money, interest rates go up on short term borrowing which cuts into corporate growth, further damaging the economy. What say you Yogi. Something about Deja?

We can correct all this. We will have to put the socialist/liberals/Marxists on Thorzine to quiet them down

Now read the above links again to see just how serious this will be.

One more item needs addressing. China is threatening to utilize the “nuclear option” of dumping dollars onto the open market ($1.33 trillion), which would require our redeeming them, or suffer bankruptcy.

In past times, this construed an act of war.

Learn from the fall of Rome, US warned

The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon, the country’s top government inspector has warned.

David Walker, comptroller general of the US, issued the unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”.

These include “dramatic” tax rises, slashed government services and the large-scale dumping by foreign governments of holdings of US debt. [snip]

Mr Walker’s views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress. [snip]

The fiscal imbalance meant the US was “on a path toward an explosion of debt”.

“With the looming retirement of baby boomers, spiraling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks,” said Mr Walker, a former senior executive at PwC auditing firm.

Current US policy on education, energy, the environment, immigration and Iraq also was on an “unsustainable path”. [snip]

This is one time we don’t want to do what the Romans did. But then again, Geiseric and the Vandals did solve Rome’s liberal social problems.

Two days ago I had my consciousness raised, again, by a radio Public Service Announcement by The Ad Council.  A Public Service Announcement is in the family of communications known as consciousness-raisers, or awareness-raisers.  For my purposes, they’re all CRs, or consciousness-raisers.  The Ad Council made me conscious of the fact that 900 children a year drown in swimming pools.  Not an average of 900 children.  Just 900 children every year.

It would be useful if The Ad Council computed the probability of drowning as the number of drowned kids advanced toward the 900 figure, but what’s the point of knowledge when you have information?  The Ad Council’s information was followed by Governor Jodi Rell’s information that Connecticut provides free swimming lessons for anyone who wants them.

Whatever The Ad Council is, it’s constantly providing these government-linked CRs over the airwaves.  Seat belts save lives.  Asthma kills.  Radon kills.  Dust mites eat babies.  A million kids a year develop painful knee carbuncles from playing Candyland.  Okay, I made up the last two, but The Ad Council is always announcing another scourge, without consideration of the true extent, probability or relative meaning of it.  They just want you to know what they want you to know.

Do we really care about the uncomprehending homo sapiens who don’t already know about water safety?  Common sense suggests that they’ve already been pushed nearly to extinction by water carelessness, and need neither The Ad Council nor The State of Connecticut to preserve the last numbers of their type.  Let them go.  Good ideas about water safety seem self-propagating to me anyway, like bad ideas about Richard Nixon.  The occasional tragic deviation from water knowledge, a drowned child, is unpredictable and has little or nothing to do with free swimming lessons or parental ignorance.

Still, CRs are like piranha nibbling at our brains.  They’re everywhere.  Somewhere in New Guinea, I’m sure, there’s an Oakley-wearing couple from Vermont, raising the consciousness of a mellow neolithic tribe about flatulence-free cooking.   One hopes that the couple will end as appetizers, entrees and desserts.  The postprandial air will be filled with the aroma of maple syrup, and the glass-flat consciousness of the tribe will be undisturbed.  That’s progress. 

Live Earth was a spectacular CR, with the current Consciousness-Raiser-in-Chief Albert Gore, offending the facts of light and sound by his presence and pledge demands.  Be honest, liberals.  CRs aren’t processes, they’re mobile assumptions.  Practitioners of CR assume that they possess the truth, and that falsehood is an information deficit and not a knowledge deficit.  The two are very different.

CRs don’t impart knowledge because they’re not meant to.  They impart information disguised as knowledge.  CR events happen at the nexus of vanity, dogma and convenient fact, where the liberal simply can’t contain himself any longer.   Everyone has to hear what he believes, or hear what many of them earn their livings by believing. 

The value or non-value of a topic subjected to CRs is that the imbedded information is not quite wrong, and not quite right.  It’s un-wrong and un-false, but not right and not true.  It’s like those cheap tools that don’t last.  You get a lot of them for very little.  Their hardness and engineering isn’t completely useless, but they’re still not up to the job.   They look good with their chrome strike and cushioned handles, and they appeal to the philistine who likes to see them on the pegboard.

But the news for conservatives about CRs isn’t very good.  They probably work very well, if you take the evidence gathered by Dan Gilbert in his 1991 article “How Mental Systems Work”.  It’s available in Adobe on Google, for anyone interested.  Once you hammer through the cement of academic jargon, you learn something useful about yourself (the doubter), and about those other people (the credulous).

Shave off the vaguely useful information about Des Cartes, Spinoza, Bertrand Russell and Henry James, and lots of others who’ve ruminated on “the mind” and you find studies which indicate that belief precedes doubt, and of the two, belief is the default state.   Belief, or acceptance, of a proposition or idea, is passive.  It occurs with comprehension and understanding.  Even a negation  statement like  ”the sky is not yellow” requres the mind to affirm the yellowness of the sky and then evaluate the validity of the proposition.  

Rejection or disbelief, if it comes at all, comes later when the idea is evaluated and tested against other mental representations and information.  This requires effort.  Consider the advancement from credulous childhood to skeptical adulthood.  Skepticism arrives late in the human mind, but under pressure it’s also the first thing to go.  Distraction, stress, psychological manipulation, all of them disable the evaluative process of the human mind, and allow the default position, belief,  to prevail.  

CR’s, in my opinion, exploit the pressures of induced fear, shock or tension to confirm their information in the minds of the listeners.  There’s much more to Gilbert’s article.  Thoughts on visual perception, the evolutionary value of immediate belief over doubt and more.  It will raise your consciousness about what skeptics are up against in this world.  It isn’t reassuring either.  The Ad Council knows much more than we do.

Trillions in debt, household liability, $516,348 each.

The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows. [snip]

The federal government does not follow the rule, so promises for Social Security and Medicare don’t show up when the government reports its financial condition.

Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined. [snip]

The change would move Social Security and Medicare onto the government’s income statement and balance sheet, instead of keeping them separate.

The White House and the Congressional Budget Office oppose the change, arguing that the programs are not true liabilities because government can cancel or cut them.

Chad Stone, chief economist at the liberal Center on Budget and Policy Priorities, says it can be misleading to focus on the government’s unfunded liabilities because Medicare’s financial problems overwhelm the analysis.

“There is a shortfall in Medicare and Medicaid that is potentially explosive, but that is related to overall trends in health care spending,” he says.

Where should we focus our attention, Chad Stone?

There is the complicity of the congress and AARP members, the boomers and retirees, who will not allow for a change in course. AARP, the largest liberal horde of greedy individuals keeps the threat of seat loss in front of the rubber spine politicians who bow to more spending. Bush’s prescription drug plan is just one example.

We keep voting for the same collection of clowns in congress, who buy votes with our money. The Supreme Court didn’t miss a chance either. They are the ones who found all these extra benefits for the various victim assemblages.

By putting off sensible spending restrictions, by refusing to curb the entitlement programs, we, in fact are putting the cost on plastic. When the President files for bankruptcy, will it come out of his pocket?

“The White House and the Congressional Budget Office…because government can cancel or cut them.” Surely, they do this with regularity, so the debt isn’t part of the entitlement programs. Feel better now that they said this?

The worst of the lot is the pile of pigs in office now, they figure to be out of office with theirs when the bankruptcy materializes.

We’re lucky, Kennedy and McCain have figured out to reverse the problem. The inauguration of the Mexicans for Welfare Reform should be a boon to the solution to this accounting irregularity.

The Star Spangled Banner will no longer be our anthem, but the country’s threnody.

Speaking of Democrats spending more than Republicans, enter this year’s fiscal budget:

Congress’s budget resolution relies on massive tax increases while ignoring the coming explosion in Social Security, Medicare, and Medicaid spending. It pushes up discretionary spending and sets a clear path for more of the same on the mandatory side. This classic tax-and-spend budget assumes the expiration of the tax cuts that have helped to create jobs and promote economic growth. It would lead to higher tax rates for families and businesses, slower economic growth, and a nation woefully unprepared to face the coming retirement of 77 million baby boomers.

Which of course is exactly what Nancy Pelosi promised wouldn’t happen:

“After years of historic deficits, this new Congress will commit itself to a higher standard: pay as you go, no new deficit spending. Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt.”

Once you are elected though, “mountains of debt” quickly turns into investments in our future, right Nancy? Did anybody really buy the idea that Democrats would be fiscally conservative if entrusted with Congress? If you did, I’d like to sell you a bridge.