Monday, June 7, 2010
Barker's Newsbites: Monday, June 7, 2010
Well folks... hate to do it - but it's gotta be done; back to the old "newsbites" grindstone!
(I glanced over a newspaper exactly once during our vacation; no talk radio or TV talking heads either - just country music...!)
Well... I'm back now... and this ain't no country music!
...or maybe it is... in the greater sense that is...
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http://preview.bloomberg.com/news/2010-06-04/u-s-s-13-trillion-debt-poised-to-overtake-weigh-down-gdp-chart-of-day.html
President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output...
* LET'S BE FAIR, NOW... MAKE THAT PRESIDENT OBAMA... SPEAKER OF THE HOUSE PELOSI... SENATE MAJORITY LEADER REID... AND THE REST OF THE DEMOCRATS WHO CONTROL BOTH THE EXECUTIVE AND LEGISLATIVE BRANCHES OF THE FEDERAL GOVERNMENT.
...the government’s total debt, which rose past $13 trillion for the first time this month.
* BY "THE GOVERNMENT'S DEBT" THE AUTHOR MEANS OUR DEBT - DEBT THRUST UPON US BY IRRESPONSIBLE POLITICIANS.
http://www.businessweek.com/news/2010-06-03/connecticut-rating-cut-by-fitch-ahead-of-debt-sale-update1-.html
Connecticut, the state with the highest tax-supported debt, had its bond rating lowered one level to AA by Fitch Ratings as it prepares to borrow money to cover a budget deficit for a second straight year.
The state, whose residents are the wealthiest in the U.S., relies “on borrowing to address its ongoing fiscal challenges in the context of already high liabilities and large projected structural gaps,” Fitch analysts Doug Offerman and Laura Porter wrote in a press release today.
Connecticut is preparing to borrow $956 million to close a budget gap in the fiscal year beginning July 1, after borrowing money last year to cover a deficit of $947.6 million, the analysts said. Lawmakers also chose to draw down the state’s rainy-day fund and raise the top income tax for residents after tax collections fell almost 15% in the year ending June 30, 2009, according to Fitch.
* YEP... THE GREAT OBAMA RECOVERY CONTINUES...
(*SMIRK*)
http://www.nytimes.com/2010/06/07/us/politics/07townhall.html?hp
If the time-honored tradition of the political meeting is not quite dead, it seems to be teetering closer to extinction. Of the 255 Democrats who make up the majority in the House, only a handful held town-hall-style forums as legislators spent last week at home in their districts.
It was no scheduling accident.
With images of overheated, finger-waving crowds still seared into their minds from the discontent of last August, many Democrats heeded the advice of party leaders and tried to avoid unscripted question-and-answer sessions. The recommendations were clear: hold events in controlled settings...
* THE AGE OF OBAMA, FOLKS... THE AGE OF OBAMA...
In New Hampshire, where open political meetings are deeply ingrained in the state’s traditions, [Democratic] Representative Carol Shea-Porter’s campaign Web site had this message for visitors: “No upcoming events scheduled. Please visit us again soon!”
An examination of public schedules for dozens of members of Congress last week showed that more House Republicans held open meetings...
* FIFTEENTH PARAGRAPH, BUT GIVE CREDIT WHERE IT'S DUE - THE NYT SUCKED IT UP AND REPORTED THIS. (*SHRUG*)
http://online.wsj.com/article/SB10001424052748704113504575264513748386610.html
It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates.
Likewise, who is gobsmacked when they are told that the two wealthiest Americans - Bill Gates and Warren Buffett - hold the bulk of their wealth in the nontaxed form of unrealized capital gains?
On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.
Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there's always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.
When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe "double dip" recession.
* BTW... THIS OP-ED WAS PENNED BY ART LAFFER.
In 1981, Ronald Reagan—with bipartisan support - began the first phase in a series of tax cuts passed under the Economic Recovery Tax Act (ERTA), whereby the bulk of the tax cuts didn't take effect until Jan. 1, 1983. Reagan's delayed tax cuts were the mirror image of President Barack Obama's delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10%.
But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.
* REPEATING LAFFER'S PREDICTION: "THE ECONOMY WILL COLLAPSE IN 2011."
Consider corporate profits as a share of GDP. Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy. These high profits reflect the shift in income into 2010 from 2011. These profits will tumble in 2011, preceded most likely by the stock market.
In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what's going to happen to tax rates, this conversion seems like a no-brainer. The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain't seen nothing yet.
* WHO DO YOU TRUST... OBAMA, PELOSI, AND REID OR ART LAFFER? OBAMA AND THE DEMS ARE DESTROYING OUR COUNTRY, FOLKS.
http://online.wsj.com/article/SB10001424052748704875604575280462094012870.html?mod=WSJ_Opinion_LEFTTopOpinion
What do the following have in common: the piling on Israel after the botched interception of the Hamas relief flotilla, the Chinese military telling the U.S. secretary of defense that he was not welcome in Beijing, and the declaration by Nick Clegg - now deputy prime minister of Great Britain - that his country's special relationship with America is over?
Answer: The Obama administration has managed to convince most countries around the world that we are worth little as friends and even less as enemies.
The Obama administration has been peculiarly inept at handling allies, to the point that it has jeopardized some of our most important relationships. That a senior British politician would dismiss the pillar of British foreign policy since 1940 is astounding. But Nick Clegg said during the recent British election that the special relationship is over and that the American government understands this even if the British government does not. When asked about relations with the U.S. under President Barack Obama, 17% of Britons in a recent poll thought they had improved; 25% thought they had deteriorated.
The administration refuses out of timidity to advance a free trade agreement with any ally, including Colombia, a success story if only we would claim it. And its quixotic quest for total nuclear disarmament unnerves, among others, our French allies, who want to keep a robust deterrent. These are part of a broader rejection of a world in which the U.S. has real allies that need cultivating and reinforcing.
No less dismaying is Mr. Obama's attitude to U.S. rivals. Its most recent National Security Strategy, issued a month ago, barely acknowledges that such a category exists. The need for the U.S. to balance China in Asia is evident to any moderately alert clerk in the foreign ministry of most Asian countries. Yet such notions are missing from a document that talks a great deal about education policy, economic development and the limits on American power, but very little about geopolitics.
China's snub to U.S. Defense Secretary Robert Gates - its rejection last week of an American request for a visit as he travels to a conference in Singapore - is part of a larger picture. The studied unwillingness of the Chinese even to acknowledge that the North Koreans launched an unprovoked attack on a South Korean naval vessel tells us that they do not think they have to take American anger about anything seriously.
There is no penalty for a foreign government crossing this U.S. president - unless you are the hapless prime minister of Israel visiting the White House, in which case, to paraphrase the deli bully in "Seinfeld," "No dinner for you!" The most that a leader like President Lula da Silva of Brazil can expect from doing his best to derail the painfully slow effort to contain Iran is pursed lips.
As for North Korea and Iran...
(*HEADACHE*)
The administration is making a dangerous world even more so.
* I CONCUR.
http://online.wsj.com/article/SB10001424052748704764404575286911196081790.html?mod=WSJ_Opinion_AboveLEFTTop
The House and Senate are preparing to reconcile their financial-reform plans, and Democrats in both chambers claim they are ending taxpayer bailouts of giant banks.
But Standard and Poor's and Moody's aren't buying it.
Both raters have previously said that if the government's implied support for banks considered too big to fail was ended, then the ratings on the debt of the largest banks would probably fall. But as they've watched the reform bills evolve, the big agencies have so far refused to downgrade their ratings on the biggest banks.
Moody's went further in a report last week and said that it doesn't see any changes in the near term. "Consequently, we expect that the senior debt and deposit ratings of systemically important banks in the U.S. will continue to benefit from unusual levels of support...
* IN OTHER WORDS, MOODY'S BELIEVES THE DEMOCRATS ARE LYING THROUGH THEIR TEETH. (AND WITH GOOD REASON - THE DEMS ARE AND HAVE BEEN LYING THROUGH THEIR TEETH ALL ALONG... AS NEWSBITE READERS ARE AWARE.)
Moody's is warning that, apart from the federal safety net that is destined to remain, new regulations in the reform plans could hurt bank profitability. That could well trigger ratings downgrades, especially at smaller banks that aren't lucky enough to be too big to fail.
In other words, Washington is on track to add costly new rules that could make bank failures more likely, while ensuring that taxpayers continue to shoulder the costs of such failures.
* HOPE... CHANGE... HOPE... CHANGE... THE AGE OF OBAMA ROLLS ON...
http://online.wsj.com/article/SB10001424052748704025304575284534183463428.html?mod=WSJ_Opinion_AboveLEFTTop
Cap and trade will do little or nothing to end U.S. oil dependence. It will merely make a globally traded commodity more expensive domestically.
Oil consumption will naturally decline somewhat...
* BECAUSE YOU WON'T BE ABLE TO AFFORD THE ENERGY TO RETAIN YOUR PRESENT LIFESTYLE!
...but the reality is that there isn't a viable oil substitute - especially for the transportation that accounts for about 70% of U.S. consumption. Electric cars are years if not decades away from commercial viability, while ethanol isn't energy-dense enough to get a jet off the tarmac.
* BEYOND THAT, ETHANOL IS AN ENVIRONMENTAL AS WELL AS ECONOMIC DISASTER FOR AMERICA AND THE WORLD.
As for the idea that cap and tax is the best way to punish BP and Big Oil, it'd be more convincing if Kerry-Lieberman hadn't been written in concert with ConocoPhillips, Royal Dutch Shell and - bad-timing department - BP. "Ironically, we've been working very closely with some of these oil companies in the last months," Mr. Kerry said in early May.
(*SMIRK*)
Lobbyists for the three oil majors were regular visitors to Mr. Kerry's closed-door negotiations.
(*JUST SHAKING MY HEAD*)
Democrats know this is their last opportunity to control another huge chunk of the economy. Facing diminished majorities next year if not an outright loss of power on Capitol Hill, liberals are going to make one more bloody-minded charge to do for energy what they've already done for health care.
http://online.wsj.com/article/SB10001424052748703559004575256703021984396.html
* BEATING A DEAD HORSE HERE, BUT IT'S WHAT I DO! (*GRIN*)
Several generations of Americans have seen homeownership as a birthright and a necessity.
* MORONS.
We take it for granted that owning your home is a good thing.
* MORONS.
* SERIOUSLY, FOLKS... YEAH, I'M BEING A BIT FLIP HERE, BUT THAT'S BECAUSE IT'S FRUSTRATING TO KNOW THAT WHAT'S SO OBVIOUS TO ME IS SO BEYOND COMPREHENSION FOR MOST PEOPLE. AND NO... THIS ISN'T ME BEING EGOTISTICAL... THIS IS ME BEING DEPRESSED!
* READ THE PIECE. THE AUTHOR HAS A MACRO FOCUS. BEYOND THE AUTHOR'S POINTS I'D REITERATE MY REASONING THAT WHEN YOU FACTOR IN ALL THE COSTS, WHILE HOME OWNERSHIP IS NOT NECESSARILY A BAD THING, ONE THING IT RARELY IS IS A GOOD INVESTMENT IN TERMS OF CONTRAST TO OTHER INVESTMENT OPPORTUNITIES.
http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%20found,ID=100601_3706,TEMPLATE=postingdetail.shtml
[Congressman Ron Paul of Texas recently] introduced the Private Option Health Care Act [designed to place] individuals back in control of health care by replacing the recently passed tax-spend-and-regulate health care law with reforms [i.e. Obamacare.]
[T]he bill would provide all Americans with a tax credit for 100% of health care expenses. This tax credit is fully refundable against both income and payroll taxes. It would also allow individuals to roll over unused amounts in cafeteria plans and Flexible Savings Accounts (FSAs), provide a tax credit for premiums for high-deductible insurance policies connected with a Health Savings Account (HSAs) and allow seniors to use funds in HSAs to pay for medigap policies. In addition, it would repeal the 7.5% threshold for the deduction of medical expenses, and thus would make all medical expenses tax deductible.
This bill would also create a competitive market in health insurance by exercising Congress’s Constitutional authority under the Commerce Clause to allow individuals to purchase health insurance across state lines. Ending these state-imposed bans would create a competitive national marketplace in health insurance.
The Private Option Health Care Act would also ensure that people harmed during medical treatment receive fair compensation while simultaneously reducing the burden of costly malpractice litigation on the health care system. The bill achieves this by providing a tax credit for negative outcomes insurance purchased before medical treatment. This type of insurance would provide compensation for any negative outcomes without having to go through lengthy litigation or giving huge sums to trial lawyers.
Finally, the Private Option Health Care Act would lower the prices of prescription drugs by reducing barriers to the importation of Food and Drug Administration (FDA)-approved pharmaceuticals. Under my bill, anyone wishing to import a drug simply submits an application to the FDA, which then must approve it unless it is either not approved for use in the United States or is adulterated or misbranded.
* WELL... JUST MAKE SURE WE'RE TALKING "IMPORTATION" AND NOT RE-IMPORTATION. MY PRIMARY CONCERN IS PROTECTING AMERICAN OWNED INTELLECTUAL PROPERTY.
The Private Option Health Care Act allows Congress to correct the mistake it made last month by replacing the new health care law with health care measures that give control to individuals, instead of the federal government and corporations. Our health is too vital to allow for the typical results of government interference and “fixes.”
* I AGREE.
http://blog.heritage.org/2010/06/07/morning-bell-why-obamas-stimulus-failed/?utm_source=Newsletter&utm_medium=Email&utm_campaign=Morning%2BBell
Last Friday’s Department of Labor jobs report, which showed private sector job creation fell by 190,000 between April and May of this year, jolted markets worldwide including the Dow Jones Industrial Average, which fell 3.2% Friday to its lowest level since early February.
In total the U.S. economy has now lost a net of 2.2 million jobs since President Barack Obama signed his stimulus bill, and his administration is now 7.2 million jobs short of what he promised his $862 billion stimulus would help create by 2010.
For objective observers the failure of President Obama’s $862 billion stimulus has become increasingly difficult to deny. But not for the White House. Last week, Vice President Joe Biden told Charlie Rose on PBS that the stimulus was “an absolute success.”
Our nation’s unemployment rate is hovering near 10% not because of record job losses...but because of record job non-creation. Private sector employers have gone on strike. Contrary to what the President’s economic wizards and New York Times columnists believe, massive government deficit spending does not stimulate job creation. President Obama does not have a secret vault of money he can just throw at the American people. The resources the government spends come from the economy. When the government increases spending, it crowds out the resources that business owners could have invested in their enterprises. Private investment falls sharply when government spending rises. [Indeed,] annual private fixed nonresidential investment has fallen by $327 billion since the recession started - a 19% drop. Less private investment means less hiring.
* YOU BASICALLY HAVE TWO CHOICES, FOLKS: 1) OBAMA DOESN'T HAVE A CLUE; OR, 2) TURNING AMERICA INTO A HIGH UNEMPLOYMENT, LOW GROWTH EUROPEAN-LIKE WELFARE STATE IS HIS ACTUAL GOAL.
(*SHRUG*)
http://www.ft.com/cms/s/0/63ad35e6-726b-11df-9f82-00144feabdc0.html
Ten Nato troops, including seven Americans, were killed in gun and bomb attacks in Afghanistan on Monday in one of the worst single-day losses for international forces since the start of the nine-year war.
Separately, a US civilian contractor working for Dyncorp, the security company, was killed when a team of suicide bombers attacked a police training base in Kandahar, Afghanistan’s second biggest city.
* ATTEMPING TO "NATION BUILD" AFGHANISTAN WAS A BAD IDEA WHEN BUSH WAS PRESIDENT AND IT'S A BAD IDEA NOW. THESE LIVES LOST ARE ON OBAMA'S HEAD.
* TO THOSE OF YOU WHO OPPOSED "BUSH'S WARS" YOUR SILENCE IS DEAFENING NOW. DEMOCRATS HAVE CONTROLLED BOTH HOUSES OF CONGRESS SINCE JANUARY 2007. THEY'VE HAD THE POWER TO CUT OFF FUNDING SINCE JANUARY 2007. OBAMA TOOK OFFICE IN JANUARY OF 2009. HE WAS COMMANDER-IN-CHIEF FROM DAY ONE AND HE'S COMMANDER-IN-CHIEF NOW.
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