Thursday, February 18, 2010

Barker's Newsbites: Thursday, February 18, 2010


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19 comments:

William R. Barker said...

http://www.washingtonpost.com/wp-dyn/content/article/2010/02/18/AR2010021801331_pf.html

U.N. climate chief Yvo de Boer will step down to join a consultancy group as an adviser...De Boer will leave on July 1 to join KPMG...

* WELL, WELL, WELL... AN "ENVIRONMENTALIST" JOINING KPMG AS A "RAINMAKER."

February 18, 2010 at 8:36 AM
William R. Barker said...

http://abcnews.go.com/WN/Politics/stimulus-weatherization-jobs-president-obama-congress-recovery-act/story?id=9780935

A $5 billion federal weatherization program intended to save energy and create jobs has done little of either, according to a new report obtained by ABC News on the one-year anniversary of President Obama's American Reinvestment and Recovery Act.

The problem is red tape, according to the GAO. Local governments and contractors have to jump through several hoops before getting full funding. For example, the Recovery Act included so-called Davis-Bacon requirements for all weatherization grants. Davis-Bacon is a Depression-era law meant to ensure equitable pay for workers on federally funded projects. Under that law, the grants may only go to projects that pay a "prevailing wage" on par with private-sector employers. The Department of Labor spent most of the past year trying to determine the prevailing wage for weatherization work, a determination that had to be made for each of the more than 3,000 counties in the United States, according to the GAO report.

Secondly, many homes have to go through a National Historic Preservation Trust review before work can begin. The report quoted Michigan state officials as saying that 90 percent of the homes to be weatherized must go through that review process, but the state only has two employees in its historic preservation office.

In his jobs proposal late last year, the president proposed giving an additional $10 billion for weatherization projects...

(*HEADACHE*)

February 18, 2010 at 8:37 AM
William R. Barker said...

* And in related news...

http://latimesblogs.latimes.com/washington/2010/02/obama-stimulus-weatherization.html

Who could forget the $5 billion in Obama administration stimulus money that was going to rapidly create nearly 90,000 green jobs across the country in these tough economic times and make so many thousands of homes all snuggy and warm and energy-efficient these very snowy days?

Well, a new report due out this morning will show the $5-billion program is so riddled with drafts that so far it's weatherized only about 9,000 homes.

the General Accountability Office will declare today that the Energy Department has fallen woefully behind -- about 98.5% behind -- the 593,000 homes it initially predicted would be weatherized in the Recovery Act's very first, very chilly year.

The Energy Department is run by Steven Chu, like President Obama a Nobel Prize winner.

The Energy folks did tell ABC they've so far spent $522 million Recovery Act dollars on the program. Which works out to, let's see, about $57,362 worth of very expensive weatherstripping for each home fixed up so far.

Seems about right for a federal program.

February 18, 2010 at 8:37 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704398804575071591602878062.html?mod=WSJ_hps_sections_news

Just days after becoming controller of financially strapped Harrisburg, Pa., in January, Daniel Miller began uttering an obscure term that baffled most people who had never heard it and chilled those who had: Chapter 9.

The seldom-used part of U.S. bankruptcy law gives municipalities protection from creditors while developing a plan to pay off debts. Created in the wake of the Great Depression, Chapter 9 is widely considered a last resort and filings under it are more taboo than other parts of bankruptcy code because of the resulting uncertainty for everyone from municipal employees to bondholders.

As their revenue declines faster than expenses, some public entities are scrambling to keep making payments on municipal bonds. And that is causing experts to worry about the safety of securities traditionally considered low risk.

"People believe that municipal debt is safe based on assumptions that are no longer true," says Kenneth Buckfire, managing director and chief executive of Miller Buckfire & Co., an investment bank that has worked with corporations on restructurings and now is advising municipalities. For example, it isn't safe to assume that governments can raise taxes to cover shortfalls, he says.

In Harrisburg, which is Pennsylvania's capital and has a population of about 47,000, a March 1 deadline is looming on a payment of $2 million out of the $68 million due this year for the financing of an incinerator plant. The facility has about $288 million in overall debt.

"Bankruptcy is inevitable," Mr. Miller says. "We are in a terrible bind." A budget passed Saturday by Harrisburg's city council didn't include any funds to cover the debt payments, according to the city clerk's office.

Vallejo, Calif., a city of about 116,000 people near San Francisco, has been trying to rejigger worker contracts in bankruptcy court since it filed for Chapter 9 in 2008, after buckling under declining real-estate values. Some union contracts expire later this year, and Vallejo is attempting to scrap them and start over.

In San Diego, political leaders have faced outside pressure to file for Chapter 9 bankruptcy protection as a way to get around benefits packages for public workers.

Mr. Miller, Harrisburg's controller, also sees no way out of the financial squeeze. The city's per-capita debt of $9,500 is the highest in Pennsylvania and triple the debt load of Philadelphia, he says. And selling parking facilities or other properties in a fire sale would cost Harrisburg future revenue. A spokesman for Pennsylvania Gov. Edward Rendell says Harrisburg hasn't sought help from state officials.

"We can't raise taxes; they're already very high," Mr. Miller says.

February 18, 2010 at 9:58 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704398804575071873547372514.html?mod=WSJ_hps_LEFTWhatsNews

State governments face a trillion-dollar gap between the pension, health-care and other retirement benefits promised to public employees and the money set aside to pay for them, according to a new report from the Pew Center on the States. (In addition, states generally have little set aside to cover retiree health-care and other nonpension benefits. The Pew report found states, on average, have funded only 7.1% of these expected costs, and 20 states have no money in reserve for the bills.)

States promised current and retired workers a total of $3.35 trillion in benefits through June 30, 2008, said the report from the nonprofit research group, a division of Pew Charitable Trusts. But state governments had contributed only $2.35 trillion to their benefit plans to pay current and future bills, the report said.

The Pew report said its estimate of the funding gap would likely prove conservative, because it didn't account for the massive investment losses pension funds suffered during the second half of 2008.

The pension problems started well before the recession. Even in good times, states were skipping pension payments, leaving larger holes to fill in future years. State legislatures also increased benefit levels without setting aside extra money to pay for them.

Illinois has the largest pension-funding gap, with only 54% of the necessary contributions made to pay promised benefits to current and future retirees, the Pew report said.

State budgets are so troubled that most don't have extra money to make up for missed pension contributions. With revenue consistently lagging behind forecasts, state governments are cutting spending, increasing taxes and imposing new fees...

February 18, 2010 at 9:58 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703525704575061801246612906.html?mod=WSJ_Opinion_RIGHTBelowPepperandSalt

President Barack Obama's $787 billion stimulus plan was the most expensive bill in history. Still, it received strong media support - blazing the way for the controversial bill to pass. Network journalists didn't just back the bill during that debate. Once it had passed, ABC, NBC and CBS spent nearly a year promoting "President Obama's stimulus cavalry," as NBC's Lisa Myers put it.

The Business & Media Institute analyzed 172 stories about the stimulus from Feb. 17, 2009, when the bill was signed, to Jan. 31, 2010. In those stories, the three evening news shows turned to proponents nearly three times as often as opponents of the plan (269 to just 111). Reporters called the Obama program or its many offshoots "good news," or turned to others whose positive views on the stimulus went further, with one calling the program a "lifesaver."

"It's the government that`s going to have to pull us out of this recession," Anthony Mason of CBS "Evening News" said on March 6. That was a consistent theme for the journalists involved. With the economy beaten down by the Great Recession, Americans needed Obama and the government to fix things and boost employment.

Anchor Katie Couric added to that theme when she introduced the story. "In a moment, we'll be telling you about all the jobs the stimulus plan is creating, but first why those jobs are so desperately needed."

That pro-stimulus approach impacted the reporting. All three broadcast networks promoted the stimulus prior to the vote. The same news media that backed Barack Obama during the election then turned to his "bold" push for a stimulus plan. Two broadcast networks - ABC and NBC - showed particularly strong support for the president by relying on pro-stimulus voices by a more-than 2-to-1 ratio (139 to 56). As reporter Scott Cohn told the NBC "Nightly News" audience about a struggling Indiana community. "Economic stimulus isn't just a political debate around here. It could be a matter of survival." In the year following the passage of the stimulus package, network journalists embraced both the spending and the programs that went along with it. That was what viewers of ABC's "World News with Charles Gibson," CBS "Evening News" and NBC "Nightly News" heard for almost a year. Those three favored pro-stimulus speakers 71 percent to 29 percent (269 to just 111). NBC was the worst of the three networks. It relied on stimulus supporters in its stories by more than a factor of 3-to-1 (110 supporters to just 31 critics). At the same time, NBC only included any sort of criticism of the $787 billion plan in 43 percent of its stories.

February 18, 2010 at 9:59 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704431404575068010189130910.html?mod=WSJ_Opinion_LEFTTopOpinion

Hobbes's "Leviathan" is perhaps the greatest work of political theory in modern times. Scores of books have attempted to explain its meaning, but the latest to appear commands particular attention. "Hobbes and the Law of Nature" is the final work of Perez Zagorin, who died last April at the age of 88. For nearly six decades Mr. Zagorin was a leading historian of early modern Europe. He wrote accessibly and well, a public intellectual of the old school. This book, a slender and stylish introduction to Hobbes, caps his long career.

Hobbes was a supporter of kings but not of their spurious claim to divine right. "Leviathan" asserted, in its place, a secularized and abstract "sovereignty." Sovereignty was not divine or natural. It was an artificial construct, devised by subjects themselves.

The medieval world had organized itself into estates, town corporations, guilds and churches, as well as kingdoms. Hobbes swept these bodies aside and made self-interested individuals the atoms of politics. But in the state of nature—"the war of all against all"—individuals were vulnerable and fearful. Craving protection, they surrendered by contract their natural rights to a sovereign, who embodied the power of all.

Moderns have always viewed Hobbes with morbid fascination. His absolutism seems vicious now, but his rationalized account of sovereignty has influenced us profoundly. What is more, he built his absolutism with concepts dear to liberals, such as individual equality, "natural rights" and the social contract. We prefer to trace our political lineage to John Locke, who was a mere schoolboy when King Charles was beheaded and "Leviathan" composed. But Locke was in many respects Hobbes's student and adopted his language of rights and contract. Locke tempered Hobbism, granting us inalienable rights and the power to resist tyranny, but he did so because he believed humans to be free moral reasoners, created in the image of God. Hobbes was an atheistic materialist for whom humans were appetite-driven animals. For good or ill, that is exactly how modern man is trained to understand himself.

February 18, 2010 at 9:59 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704804204575069833643345608.html?mod=WSJ_Opinion_AboveLEFTTop

WellPoint's California unit, Anthem Blue Cross, recently informed nearly 700,000 individual insurance customers of premium increases of up to 39%.

Wellpoint's rate hikes are the direct result of the Golden State's insurance regulations - the kind that Democrats want to impose on all 50 states.

Under federal Cobra rules, the unemployed are allowed to keep their job-related health benefits for 18 to 36 months. California then goes further and bars Anthem from dropping these customers even after they have exhausted Cobra.

California also caps what Anthem can charge these post-Cobra customers.

Most other states direct these customers to high-risk pools that are partly subsidized, but California requires the individual market to absorb the customers and their costs. Even as California insurers have had to keep insuring these typically older and sicker patients, the recession has driven many younger, healthier policy holders to drop their insurance - leaving fewer customers to fund a more expensive insurance pool. This explains why Anthem lost $58 million in California on its post-Cobra customers in 2009.

This episode is a preview of the adverse selection that would happen nationwide if ObamaCare passes. The Democratic bills would control what insurers could charge and force them to take all comers, regardless of health status. These burdens were supposed to be made tolerable by requiring all Americans to buy insurance or face a penalty. Yet when this "individual mandate" proved to be unpopular, Congress watered it down so that younger customers would be able to pay the penalty knowing they can wait until they're sick to pay the more expensive premiums. The only way an insurer can make up for these higher costs is to raise premiums.

Anthem last year hired an independent actuarial firm that found its rates sound and necessary. The company presented its findings to California insurance commissioner Steve Poizner last November, who had a month to review the proposed increases and never objected. But recently amid the White House campaign, Mr. Poizner has joined the chorus claiming to be "skeptical" of the increases and demanding that Anthem postpone them while he conducts a review.

Anthem has done so.

Mr. Poizner is a Republican running for governor, which proves that health-care political opportunism can be bipartisan.

February 18, 2010 at 9:59 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748703444804575071323360304024.html

Anyone who isn't welded to the Obama-Pelosi-Reid ball and chain has their campaign issue for November's election and 2012: spending.

Finally, after a nonstop, nearly 80-year upward climb, government spending has hit a wall. It didn't seem possible but this is a big wall. It's the American voter.

It began with an eye-popping $800 billion stimulus bill that came from nowhere and went to nowhere. Done with that, the Washington Democrats turned to President Obama's health-care reform, which looked big at first, but turned out to be bigger. A well-publicized June estimate of the Senate bill's cost by the Congressional Budget Office put the 10-year price tag at $1.6 trillion. So $800 billion, then a trillion.

Dollar signs rocketed into the sky all year: hundreds of billions on various TARP salvage projects, much drawn from some magic stash held by the Federal Reserve. The Obama cap-and-trade bill was going to use an auction to siphon $3.3 trillion from various states to Washington over 40 years. Oh, almost forgot - an FY 2011 $3.8 trillion budget.

Some of this was spending, some taxes, some fees. It's all spending. A tax or fee is just a sluice gate that separates private income from the public-spending lake.

[I]n 2009 it was beginning to look as if the politicians were going to blow the dam. California and New York, the nation's first and third most populous states, were in fiscal collapse, with the whole nation watching as once-mighty California (which looks like Greece cubed) actually issued IOUs. All the anxiety coursing through the country now is over the scale, size and scope of government, in Washington or where people live, in the states. The issue that Barack Obama's presidency has put squarely before the American people is how big is too big? How much is too much?

[I]n hopelessly profligate New Jersey [newly-elected Republican] Gov. Chris Christie just announced a freeze on unspent monies. Finding precisely the right metaphor, Gov. Christie said, "The days of Alice in Wonder Land budgeting in Trenton end."

Look at what the just-discovered nest of White House "deficit hawks" is doing. It will hold a "bipartisan" health-care summit next week, and today it announces the oxymoronic National Commission on Fiscal Responsibility and Reform. The goal of both is to find new sources of revenue oxygen for the blob.

You need one big club to beat the blob into a size appropriate for what we still call the United States. Barack Obama's first year, with California and New York, have handed that club to the voters and their candidates: It's the spending, America.

February 18, 2010 at 10:00 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704804204575069132514354588.html

Less than three years after Sen. Harry Reid (D., Nev.) declared the [Iraq] war lost, less than three years after then-Sen. Barack Obama - with the usual fierce moral urgency - opposed the Bush administration's [Iraq] military surge, and within three years of Mr. Biden's own recommendation that Iraq be divided into three parts, these Democrats are laying claim to Iraq's extraordinary victory.

The vice president wisely made his victory assertion in the television studio of a left-leaning network experienced in fudging Iraqi history. CNN, by its own admission, muted coverage of Saddam Hussein for over a decade.

In the past, American liberals have relied on a sympatico press and leftist academics to obscure or whitewash their grievous historical errors. President George W. Bush, pursuing the global war on terror, encountered the same personal slander Ronald Reagan faced as he fought and won the last major political battles of the Cold War. Both were branded "cowboys" and "warmongers." Now, Reagan's victorious Cold War legacy is claimed by all Americans.

The defeatists in the media damned any such success. When President Bush said the surge was working, his critics labeled him out of touch. They charged that front-line observations like those made by the Al-Nidawi brothers were paid propaganda. Three years later, these same individuals are weaving victory laurels for politicians who promoted defeat for their own short-term political advantage.

Mr. Biden, here are the facts. The Status of Forces Agreement (SOFA), which former President Bush and Prime Minister Maliki signed, orchestrated the homecoming of U.S. troops. Mr. Obama didn't do it.

The Bush plan called for a phased transition from "more" coalition security operations to "fewer," based on the demonstrated improvement in the capabilities of Iraq's military and police forces. "Rheostat" warfare is the term Gen. David Petraeus used in 2007, after the device that varies the strength of electrical currents. Securing and extending the authority of Iraq's national government was an integral part of the process. Mr. Biden pushed his partition plan and relentlessly opposed the tough decisions and heroic efforts that created the conditions for SOFA.

Victory has a thousand fathers and Mr. Biden is but one of the many phonies.

February 18, 2010 at 10:00 AM
William R. Barker said...

http://www.ft.com/cms/s/0/20ed5672-1aec-11df-88fa-00144feab49a.html

The debate about the current recovery centres on whether a secular change is taking place in the United States economy. ... But the consensus view is that growth will be sluggish (2-3 per cent) and few jobs will be created.

[O]perating rates for American manufacturers are at 70 per cent, so there isn’t much of an incentive for capital spending beyond technology.

[T]he working week is staying around 33 hours, so even those who are working aren’t getting their pre-recession paychecks.

To get the goods out the door and provide the services demanded by customers, companies are hiring temporary workers in record numbers to maintain maximum flexibility. They are worried that a health care bill, if one passes, will add onerously to the cost of full-time employees and they don’t want to be hit with more termination pay if the economy suffers a double-dip.

[M]ature industrial economies are losing about a percentage point a year in share of world GDP to the emerging markets and they are losing a similar amount in share of world stock market capitalisation.

The biggest problem the United States is facing is the productivity of capital. After the end of the second world war it took less than two dollars of investment by government, corporations and individuals to produce one dollar of GDP growth. The productivity of capital continued to be impressive until 1980, when Europe had recovered and Japan was producing automobiles and consumer electronics products that found wide acceptance in world markets. In the single decade of the 1980s, the productivity of capital declined from less than two dollars of investment to produce a dollar of growth to about three. If you assign a 30 per cent gross margin to that revenue growth, the return on investment declined from 15 per cent to 10 per cent. That level of return proved to be satisfactory, but in the first decade of this century capital productivity declined seriously in the United States.

Because of profligate spending on over-priced housing and other assets that declined seriously and deficit spending by the government, by the end of the decade it took six dollars of capital to produce a dollar of growth. The return on that would only be 5 per cent and few would put money at risk for that reward.

When you look abroad to assess our competitive position, the results are not encouraging. It is hard to put together comparable information, but, based on the data I could gather, Europe was still getting a dollar of growth for two dollars of investment and China was getting at least a dollar of growth for each dollar of investment.

If the US is to stop losing ground against other mature and developing economies, it is going to have to put money to work more effectively. We are still the leaders in technology and scientific research and we must continue to take advantage of the commercial possibilities of innovation. If we don’t reverse the current trends, growth in America beyond this year will be disappointing and our standard of living will decline.

February 18, 2010 at 11:19 AM
William R. Barker said...

http://www.ft.com/cms/s/0/68e871c0-1c98-11df-8456-00144feab49a.html

The producer price index rose by 1.4 per cent last month, according to labour department figures. That was more than economists predicted and marked the fourth month running that prices increased. Compared with a year ago, wholesale prices are up by 4.6 per cent.

Separately, labour department figures showed a bigger-than-projected rise in new claims for jobless benefits, as the sputtering labour market continues to lag behind the rest of the US economy...[T]he labour market remains a greater concern. Initial jobless claims jumped by 31,000 in the US to 473,000 last week. That was more than analysts had predicted...The number of US workers continuing to claim jobless benefits was unchanged at 4.56m.

“Claims have now exceeded expectations in four of the past five weeks...," said Ian Shepherdson, chief US economist at High Frequency Economics.

http://www.ft.com/cms/s/0/fdab6124-fbae-11de-9c29-00144feab49a.html

US states, saddled with recurring budget deficits, are turning to the bond market to offset their funding gaps, providing near-term relief but raising concerns about more fiscal pain in the long run.

Analysts point to this week’s sale by Illinois of $3.5bn of bonds to pay its annual contribution to the state pension as the start of a trend of states tapping markets to plug deficits.

“Illinois is a harbinger of things to come elsewhere; this is going to be a hard budget year for the states,” said Matt Fabian, managing director at Municipal Market Advisors. “Most of them still won’t raise taxes and we can’t take their plans to dramatically cut spending seriously, so one-time gimmicks are likely going to be common.”

Some 36 states have shortfalls that have emerged since fiscal year 2010 began, which for most states was July 1, according to the National Conference of State Legislatures.

To the criticism of observers, credit rating agencies and some lawmakers, states are also resorting to one-off measures to close budget gaps.

Arizona aims to raise $735m with a sale and leaseback transaction on buildings it owns. “Selling and renting back the state buildings is a terrible idea,” said Dean Martin, state treasurer. “Who wants to make a long-term investment in a state that has to rent its own capitol building?”

Elsewhere, Ohio raised [via borrowing, via bond issuance] $278m this week as part of a plan to defer $733m in debt coming due in the next two fiscal years to 2013 through 2022.

Many expect there will be consequences for states. In December, Moody’s Investors Service downgraded Illinois to A2 from A1. Standard & Poor’s also lowered its ratings to single A plus from double A minus.

“This time around the rating agencies will be more critical, and we’ll see many more state downgrades in the spring,” said Mr Fabian.

* TO ANYONE BOTHING TO READ MY NEWSBITES - DOES THIS SOUND LIKE AN IMPROVING ECONOMY TO YOU...???

* TO THOSE READING MY NEWSBITES - DO YOU SEE THE DISCONNECT BETWEEN WHAT YOU LEARN FROM THE INFORMATION I POST AS OPPOSED TO WHAT YOU WOULD OTHERWISE EXPECT TO BE EXPOSED TO?

* WHEN YOU HEAR THAT "THE ECONOMY IS TURNING AROUND" JUST REMEMBER THAT TRUTH IS THE FIRST CASUALTY OF POLITICS.

February 18, 2010 at 11:20 AM
William R. Barker said...

* One of my "multi-parters" but well worth reading.

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521420

In his State of the Union address, President Barack Obama said that "families across the country are tightening their belts and making tough decisions," so the "federal government should do the same."

The following week, the president presented his new budget, which contains $1.267 trillion in new deficit spending. So much for cinching up the belt.

It is not fair to attribute the 2009 budget deficit solely to President Obama - or solely to President George W. Bush.

Bush signed into law that year's congressional budget. [A Democratic budget.] [Recall, Democrats controlled BOTH Houses of Congress in 2007. Democrats controlled BOTH Houses of Congress in 2008. Democrats controlled BOTH Houses of Congress in 2009.] [Oh... and Democrats control BOTH Houses of Congress today.)

Subsequently, Obama signed into law $675 billion in additional deficit spending passed by Congress: $410 billion through an omnibus spending bill and $265 billion for the portion of the economic-stimulus bill that was spent in fiscal 2009. [An economic "stimulus" bill that was supported by then-SENATOR Barak Hussein Obama btw.]

So, in a fair division of accountability, based on who signed for what, Obama is responsible for $675 billion of the $1.413 trillion in deficit spending for 2009. Bush is responsible for the remainder, or $738 billion.

* BUT AGAIN, LET US NOT FORGET... THIS SPENDING WAS PASSED BY A DEMOCRAT-CONTROLLED CONGRESS WITH THE FULL SUPPORT OF THEN-SENATOR BARAK HUSSEIN OBAMA!

* To be continued...

February 18, 2010 at 12:12 PM
William R. Barker said...

* CONTINUING...

Let's put these somewhat intimidating numbers into historical perspective. (The source for all figures is Obama's own White House Office of Management and Budget.)

Before Bush took office, there were only 15 years in which the U.S. federal budget deficit had reached $100 billion. Our deficit had never topped $300 billion - not once.

In the eight years that Bush signed the congressional budget into law, our deficits broke the $300 billion barrier five times. In two of those five years, they also broke $400 billion. And in one (2009), his share of the deficit topped $700 billion.

* ONE MORE TIME... JUST FOR THE RECORD... BUSH WAS PRESIDENT IN 2007 - WHO CONTROLLED BOTH HOUSES OF CONGRESS THAT YEAR? BUSH WAS PRESIDENT IN 2008 - WHO CONTROLLED BOTH HOUSES OF CONGRESS THAT YEAR. DURING THE PORTION OF THE 2009 BUDGET SPENDING WHERE BUSH WAS STILL PRESIDENT... WHO CONTROLLED BOTH HOUSES OF CONGRESS...??? HEY... JUST SAYING...

[But in any case...] Bush thus became the first president to eclipse the $300-, $400-, $500-, $600- and $700-billion deficit-spending marks.

So, in the realm of deficit spending, President Bush seems to have left his successor quite a lot of room for improvement. How has President Obama done?

In his first two years of proposing the budget, President Obama has broken the $1.2 trillion barrier both times. In one of those years, he broke the $1.5 trillion barrier.

So, Obama has now become the first president to eclipse the $800 billion, $900 billion and $1-, $1.1-, $1.2-, $1.3-, $1.4- and $1.5-trillion deficit-spending marks. And that's not counting his spending in 2009, which took place outside the normal budget cycle.

In all, if Congress approves his current budget, Obama's deficit spending will total $3.5 trillion for the first half of his first term.

President Bush's deficit spending totaled $2.9 trillion.

In other words, Obama's deficit spending for his first two years in office will exceed Bush's deficit spending for his entire eight-year presidency.

Obama likes to talk about how he inherited a bad economy and was put in a tough spot. But the Great Depression — now that was a tough spot. And yet, by any measure, Obama's deficits dwarf those of the 1930s.

In fact, whether measured in constant dollars, real dollars or even as a percentage of the gross domestic product, Obama's average deficit in his first two years will more than triple the average deficit during the Great Depression.

Liberals like to point to deficit spending in the Reagan era. Of the eight congressional budgets that President Ronald Reagan signed, all of which were passed by a heavily Democratic House and nearly half by a Democratic Senate, the average deficit was $177 billion, or 4.1% of GDP.

The average projected deficit for the two budgets that President Obama has proposed, also to a heavily Democratic Congress, is $1.412 trillion, or 9.3% of GDP.

Despite not having had to fund Cold War-level expenditures on defense (the defense budget was 64% higher under Reagan than under Obama, even as a percentage of GDP), Obama's annual deficits are, by any measure, easily doubling Reagan's — and that's not even counting his 2009 deficit spending.

In truth, we've never amassed deficits remotely approaching those that President Obama and this Congress are amassing when we were not fighting in the World Wars or the Civil War. We've never run up deficits that were even close.

The historical record yields an inescapable conclusion: This White House and this Congress have been the most fiscally irresponsible in American history. And that's setting the record straight.

February 18, 2010 at 12:12 PM
William R. Barker said...

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521429

Is the president right when he says the stimulus kept the U.S. from falling into a depression?

No.

In fact, too much government tinkering and spending, not too little, has given us the jobless recovery we have now.

The claim that stimulus has "created or saved" 2 million jobs is complete fiction. Sadly, when we count actual jobs, the reality is a bit starker: 8.4 million jobs lost since December 2007, the start of the recession. And more than 4 million lost since the start of 2009.

Worse is the administration's claim that stimulus is responsible for the fourth quarter's 5.7% spurt in GDP. This, too, is utterly false.

Two-thirds of that number was made up of inventories. Businesses had liquidated so much in inventories as Obama came into office, helping to make GDP declines last year deeper than expected, that when they finally stopped the economy appeared to be growing strongly. It wasn't.

Real final sales, a measure that excludes short-term inventory swings, rose just 2.2% in the fourth quarter - hardly a boom.

What bothered us most, however, was Obama's reference to a "lost decade" under President Bush. So, let's review the Bush record one more time:

Bush's presidency began after the largest stock market crash in history, which destroyed nearly $8 trillion in national wealth. Business investment had collapsed, in part due to the Y2K debacle. The economy in early 2001 was already in recession. And within nine months we were hit by the 9/11 attacks.

Thanks to Bush's tax cuts in 2001 and 2003, the U.S. economy came back. From the end of 2000 to Bush's exit from office, 4.6 million jobs were created, industrial output rose 5%, productivity soared 25%, real after-tax income jumped 21% and net wealth grew by $8.6 trillion. And that includes last year's financial meltdown. Calling this a "lost decade" is simply wrong.

Curiously, the economy was far healthier before Democrats took over Congress in 2006. Is it just coincidence that the unraveling of our financial system took place just as they regained control?

Today, stimulus, TARP and other programs intended to boost the economy are instead adding trillions of dollars in debt and spending that our kids and grandkids will have to pay off in coming decades. And let the record show: They're not creating jobs.

Recent polls show Americans overwhelmingly believe the stimulus is a failure. They're right. And no amount of snake oil sold by slick White House salesmen from the back of a government truck is likely to convince them otherwise.

February 18, 2010 at 12:13 PM
William R. Barker said...

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521423

[By Newt Gingrich and Peter Ferrara]

You did the responsible thing. You saved in your IRA or 401(k) to support your retirement, when you could have spent that money on another vacation, or an upscale car, or fancier clothes and jewelry. But now Washington is developing plans for your retirement savings.

BusinessWeek reports that the Treasury and Labor departments are asking for public comment on "the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams."

In plain English, the idea is for the government to take your retirement savings in return for a promise to pay you some monthly benefit in your retirement years.

This "conversion" may start out as an optional choice, though you are already free to buy Treasury bonds whenever you want. But as Karl Denninger of the Market Ticker Web site reports: "'Choices' have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market — so they will effectively tax you by forcing your 'retirement' money to buy them."

Argentina provided a precedent in 2008, taking over that country's private retirement accounts for forced investment in government bonds to cover spiraling deficits. Ambrose Evans-Pritchard editorialized at the time in Britain's Daily Telegraph that this may be "a foretaste of what may happen across the world as governments discover .. . that the bond markets are unwilling to plug the (deficit) gap. . .. My fear is that governments in the U.S., Britain and Europe will display similar reflexes."

As former British Prime Minister Margaret Thatcher said, "The trouble with socialism is you run out of other people's money to spend." And now they want to spend our retirement savings.

February 18, 2010 at 12:13 PM
William R. Barker said...

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521421

The scientific "consensus" that man is warming the planet is cracking, and so is a group that was going to push for cap-and-trade. Some business members no longer feel threatened by the government.

Oil giants ConocoPhillips and BP and heavy equipment maker Caterpillar said Tuesday they'd be leaving the U.S. Climate Action Partnership...They see the agenda of the global warming alarmists crumbling and have determined they don't have as much to fear from government regulation as they once did.

Because onerous government policy distorts markets and cuts into profits, it's rational for companies to try to protect themselves from regulatory damage. One way to avoid or limit damage from a regulatory regime is to be part of the regulation-writing exercise by joining a coalition involved in the process. [Private sector] executives are starting to feel they can return to their primary function - running their companies - and put the cap-and-trade distraction behind them.

Less than a year ago, with Democratic majorities in both chambers of Congress and a Democrat finally in the White House, it looked like the country was going to be steamrolled by global warming legislation. The propaganda mill churned out one scare story after another about the effects of man's carbon dioxide emissions. Democrats were set to enact the restrictions on the economy they'd been talking about for years.

Now the alarmists' agenda is spiraling downward after a series of events embarrassing to anyone affiliated with the environmentalist lobby or sympathetic with its goals.

They began with the November release of e-mails from the Climate Research Unit at England's University of East Anglia. The back-and-forth between global warming researchers at the CRU and scientists elsewhere revealed an effort to twist the numbers as well as an intention to cover up any data that didn't support the global warming narrative.

Since those e-mails surfaced, the international Copenhagen climate summit faded weakly into the winter evening; Michael Mann, creator of the hockey stick temperature chart that has been found to be in error, is being investigated by his university; the United Nations used a hunch, not science, to back its claim that the Himalayan glaciers would be melted away by 2035; and weather station measurements used to support the global warming assumption have been shown to be flawed.

We've also learned in the last year that scientists cherry-picked tree ring data from Russia to make the case for man-made warming, and more recently Phil Jones, the man who has for now stepped down as chief of the CRU, confirmed there hasn't been "statistically significant" warming since 1995.

February 18, 2010 at 12:13 PM
William R. Barker said...

http://healthcare.nationalreview.com/post/?q=NjI1ODE0ZTE5YjI5YTRlZDM2NGQzNGNiZTg5MjgxYzA=

* I STRONGLY URGE READERS TO FOLLOW THE LINK AND READ THE PIECE IN ITS ENTIRETY. THERE ARE MANY LINKS WITHIN THE PIECE ITSELF THAT POINT TO THE ACTUAL DATA BEARING OUT THE POINTS MADE.

A parade of independent studies shows that the legislation [re: Healthcare/Health Insurance] before Congress fails to achieve its most basic goals and would create an avalanche of unintended consequences throughout the rest of the health sector and economy. The American people simply do not want this legislation, as evidenced in the latest Rasmussen poll showing that 61 percent of those surveyed say Congress should start all over on health reform.

Here is a reminder of what would happen if the Democratic leadership’s health-care legislation passed:

Health costs would continue to rise. The Congressional Budget Office says health-insurance premiums would continue their steady upward climb under the Reid bill. Families purchasing insurance in the individual market would see an increase of $2,100 in the year 2016, over and above increases they already would be facing as health-insurance premiums continued to rise at about twice the rate of general inflation.

Federal health spending would increase. Chief Medicare actuary Rick Foster estimates that under the Senate bill, “Federal expenditures would increase by a net total of $279 billion” between 2010 and 2019.

People would lose the coverage they have today. Steep cuts in Medicare Advantage would mean that at least one-third of seniors likely would lose their comprehensive Medicare Advantage coverage as their plans withdrew from the program, cut their benefits, or raised their premiums. As for people with employer-sponsored insurance, the CBO says that 10 million of them could lose their current coverage. Independent studies by the Lewin Group found that a full “public plan” option would mean 83 million Americans could lose private coverage.

Taxes would increase . . . on the middle class. The bills call for nearly $500 billion in new taxes, including taxes on insurance companies, Cadillac health plans, medical devices, and “the rich” — taxes that would hit the middle class and increase prices and health-insurance costs for consumers.

* TO BE CONTINUED...

February 18, 2010 at 3:11 PM
William R. Barker said...

* CONTINUING...

The bills just wouldn’t work. The American Academy of Actuaries (AAA), in a 21-page letter to Congress, critiqued the House and Senate bills and said major changes must be made to avoid a series of damaging consequences. For example, the AAA found significant problems with the new long-term-care entitlement program (the CLASS program) that the legislation would create. The AAA said that “given the way the program is structured, severe adverse selection would result in very high premiums that are likely to be unaffordable for much of the intended population, threatening the viability of the program.” Medicare actuary Rick Foster also concludes that “there is a very serious risk that the problem of adverse selection would make the CLASS program unsustainable.”

The deficit would increase. Former CBO director Doug Holtz-Eakin concludes that the legislation “can claim to be deficit-neutral only because during its first decade it offers 10 years of taxes compared with six years of subsidies, making it look far cheaper initially than it really is (while still costing more than $800 billion). The Republican staff of the Senate Budget Committee estimates that, fully implemented, Democratic legislation would cost $2.4 trillion over 10 years, nearly three times the cost projected by the Congressional Budget Office.” Further, the Congressional Budget Office shows that the Senate bill double-counts Medicare savings. Savings to the Medicare program “would be received by the government only once . . . they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.” Rick Foster makes the same point: A series of accounting maneuvers makes it appear that Medicare’s Part A trust fund would be in better shape under the Reid bill, but that’s not so. “In practice, the improved Part A financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansion under [the Reid bill]) and to extend the trust fund,” Foster writes. Foster also says that making the cuts to Medicare that Reid’s bill requires would “represent an exceedingly difficult challenge.”

Doctors and hospitals would become insolvent. Achieving deficit neutrality depends on Congress’s making massive cuts to physician and hospital payments under Medicare — cuts that Congress has virtually no will to implement. But if the cuts were implemented, Foster says that in a decade, one out of five hospitals and nursing homes would become unprofitable, threatening patient access to Medicare services. The 21 percent cut in Medicare payments on March 1 is the next death-defying cliff Congress must figure out how to avoid.

Job creation would suffer: The new taxes on businesses and individuals would further retard job creation and the economic recovery, and the higher health costs would discourage small businesses — the engine of job creation — from hiring. U.S. Chamber of Commerce president Tom Donohue said: “Congress, the administration and the states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for double-dip recession, or worse.”

WellPoint mined its own actuarial data to model the basics of the plan incorporated in the House bill, using data from 14 states where it runs Blue Cross plans. In all 14, it found that the legislation would drive up premiums for small businesses and individuals — the very people who get economies moving.

This is just a reminder of the damage that the Democratic bills would do.

February 18, 2010 at 3:11 PM

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