Category Archives: Debt

BHO’s Never-Never Debt-Payment Plan (Comments Section Restored)

Barack Obama, Debt, Democrats, Economy, Government, Individual Rights, Military, Political Economy, Taxation, Welfare

When President Obama mouths off about a “free society,” you know that the tokenism will be followed by a list of “liberties” that takes the “vision thing” away from private individuals, and leaves it to souped-up civil servants and voracious bureaucrats. After BHO took great care to tether his “vision” of America to the size of state social programs, here is what the president’s vague, debt-reduction plans entail. A “more balanced approach,” he called it, of “$4 trillion in deficit reduction over twelve years.” Or, the Never-Never scheme. [Transcript]

It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year, and builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget. It’s an approach that puts every kind of spending on the table, but one that protects the middle-class, our promise to seniors, and our investments in the future.
The first step in our approach is to keep annual domestic spending low by building on the savings that both parties agreed to last week – a step that will save us about $750 billion over twelve years. We will make the tough cuts necessary to achieve these savings, including in programs I care about, but I will not sacrifice the core investments we need to grow and create jobs. We’ll invest in medical research and clean energy technology. We’ll invest in new roads and airports and broadband access. We will invest in education and job training. We will do what we need to compete and we will win the future.

Meaningless so far.

Next in BHO’s noncommittal outline is a mention of the giant defense budget. No specifics are offered. And a centerpiece of the promise to get serious about such cuts is this cunning catch: cuts are in future spending.

As Commander-in-Chief, I have no greater responsibility than protecting our national security, and I will never accept cuts that compromise our ability to defend our homeland or America’s interests around the world. But as the Chairman of the Joint Chiefs, Admiral Mullen, has said, the greatest long-term threat to America’s national security is America’s debt.
Just as we must find more savings in domestic programs, we must do the same in defense. Over the last two years, Secretary Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again. We need to not only eliminate waste and improve efficiency and effectiveness, but conduct a fundamental review of America’s missions, capabilities, and our role in a changing world. I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it’s complete.

[SNIP]

Nothing ventured, a lot gained is the (mangled) maxim Obama follows.

You’ll buy BOH’s “third step,” which “is to further reduce health care spending in our budget,” if you were one of those people who bought the novel idea that an enormous entitlement program, as Obamacare is, will drastically reduce the deficit and debt. The poster person for this mathematical improbability was House Speaker Nancy Pelosi.

Finally, “the fourth step in our approach is to reduce spending in the tax code,” preached the president. By which he and his menagerie of morons mean not to shorten the tax code to one page, and both reduce and flatten individual and corporate rates—but to sock it to the rich.

Reduction of government debt, in Obama’s perverse moral universe, translates into an increase in state-sanctioned theft.

[My appreciation goes to the New York Times, one of the few outlets that provides transcripts of anything, these days.]

UPDATED: I’m sorry comment section was disabled. it was unintentional. It is restored. Thanks, IronGalt, for the alert.

UPDATED: When The Pleasure Principle Rules (Graft Vs. Genius)

America, Debt, Economy, Education, Pop-Culture, Psychology & Pop-Psychology

Our society runs on the pleasure principle: unless something is fun, it is discouraged as unworthy of pursuing. This is one reason why the many youngsters now entering the job market are so dumb, difficult ( and “dispensable”). They’ve been taught, falsely, that learning must be fun at all time: Unless you find a field of endeavor fun, don’t pursue it. (So you follow that advice and end up a surfer, a struggling “actor,” etc.)

Anyone who has studied seriously, or worked to master a craft, knows that nothing worth learning or mastering is easy or “fun,” unless you’re a genius (most of us are not), gifted at it, etc. With mastery comes fun. And mastery means hard work.

The principle extends to saving for future financial security. That’s not fun, because it means postponing immediate pleasure for the sake of solvency, or more ambitious future gains.

A survey by the National Foundation for Credit Counseling reveals that “more than half of all Americans say they don’t use a budget. Also, 26% of adults in the U.S. admit that they’re spending more than they did a year ago. And 40% of consumers are still battling unpaid credit card debt month to month.”

(“The rich,” after all, will be forced to take care of them.]

This “frugal fatigue” [sic: shouldn’t it be “frugality fatigue”?] has financial planner Lynnette Khalfani-Cox tailoring her advice to the pleasure principle: “The real problem is that relatively few of us can live happily — for any sustained period of time — on an overly restrictive financial diet.”

Ms. Khalfani-Cox’s advice is fit for infants: “Make the process of saving fun.”

UPDATE: GRAFT VS. GENIUS. Myron, didn’t I say that my recommendation did not include those who do not need to work hard b/c geniuses? On BAB, everyone knows Myron Pauli is a genius, and comes from a line of similar folks. Someone who is able to work smartly already forms a sub-section, which is a cut above the rest. Not everyone can reach a solution through abstract, creative thinking. Most have to master a method. If you discover your kid can do the former, lucky for you. But for the rest, it’s safe to assume you need to hard work.

UPDATE III: Austerity à la America (US Vs. UK)

Britain, Debt, Economy, Europe, Government, Healthcare, Inflation, Military

In their agreement to fiddle with future spending, our politicians are like bank robbers who’ve planned a string of heists, but then decided, charitably, to spare one bank.

The reckless high rollers in DC are congratulating themselves for agreeing to cut about $38 billion from federal spending this year (Bloomberg.com). This minuscule “cut” claws back some parts of an enormous entitlement program that has not yet kicked in: Obamacare.

“According to the Treasury Department, the federal government spent more than eight times what it brought in in the month of March. Eight times.” (CNN)

And the more money you stuff down the feds’ greedy maw, the more it’ll spend.

“Heads between knees, arms over heads, hold that position. Pray if you’re inclined to. Brace for impact!” That’s John Derbyshire’s advice about the coming economic collapse in the US. (If you’ve escaped the debased dollar, all the better.)

UPDATE I (April 10): “Friday’s 348-70 vote to fund the government through the week”: Only “twenty-eight of the ‘no’ votes were cast by Republicans. Sixteen of those are members of the 87-member freshman class. Also voting no: Tea Party star and possible presidential candidate Michele Bachmann, R-Minn.”

That’s an abysmal showing for Republicans and Tea Partiers. Can someone please send a link with an exact breakdown, plus names?

UPDATE II: Two hundred and eight House Republicans voted “yes.” And that’s not a disgrace?

UPDATE III (April 12): Little mentioned in American media is that the non- Micky-mouse countries in Europe and the English have gotten religion on austerity. In his first 100 days in office, David Cameron had gone further than Thatcher did in cutting government. Yes, yes, that’s nothing very impressive, but it’s more than anything that has been done to tackle the debt in the land of the free and home of the brave. The Merkel (Angela) told “financier- philanthropist” George Soros—also an all-round radical and BHO surrogate—to jump when he tried to muscle her into printing and inflating her country’s currency to Weimar-Republic levels.

If our media made these contrasts, perhaps Americans would begin to think beyond the “rah-rah we’re the best” mantra.

UPDATE II: A Capsizing Debt

Debt, Economy, Federal Reserve Bank, Inflation, libertarianism, Republicans

“The United States is facing a crushing burden of debt – a debt that will soon surpass the size of the entire U.S. economy and ultimately capsize it if left on its present course. This is not the future of a proud and prosperous nation. It is the future of a nation in decline.” Republikeynesians have come a long way; this is their description of the debt crisis in “Path to Prosperity: Restoring America’s Promise” (PDF)—the House Republicans’ 2012 budget proposal, authored by the House budget committee’s chair, Paul Ryan (R-WI). And although the role of the Federal Reserve Bank in monetizing the debt is finessed—this is still more than we’ve come to expect from the GOP:

“The lenders who buy much of the federal government’s debt have noticed the disconnect between the government’s perilous fiscal situation and the low rates of interest it is paying on the bonds that constitute the government’s debts. Some have even decided to purge their portfolios of U.S. debt, and others are advising their clients to do the same.

“Through its interventions into the economy, the Federal Reserve has recently become the largest buyer of government debt in the country, and these purchases have helped keep interest rates low. But the Fed is scheduled to stop making these purchases this summer. Congress must show the market that it has a credible plan for getting the national debt under control, in order to ease concerns over the government’s creditworthiness and stave off an interest-rate spike.

… nearly every fiscal expert and advisor in Washington has warned that a major debt crisis is inevitable if the U.S. government remains on its current unsustainable path. The government’s failure to prevent this completely preventable crisis would rank among history’s most infamous episodes of political malpractice. …”

Of course, the actual steps proposed to ward off stagflation and hyperinflation are not nearly as drastic as they ought to be.

MORE.

UPDATE I (April 6): Vox Day, on Sean Hannity’s radio show, warns of “The Return Of The Great Depression.” A good reality check is my interview with Day, my WND colleague, “Great Depression 2.0’: An Interview with Vox Day.”

Mr. Hannity seemed eager to pick Vox’s brain about prudent investments during a depression. Asset protection, says Vox, is essential, over and above a focus on returns: metal and companies with a real business model; companies that also provide real services.

Listen to the interview. Notice the alarm in Sean Hannity’s voice. Austrian economists such as Vox Day have not wavered in the “apocalyptic” predictions they’ve been making. This column was warning in 2003, if not earlier, of the consequences of endless debt, credit expansion, and the dangers of hyperinflation. As did I explain to those who bothered to listen that production, not credit-fueled consumption, was whence came wealth.

UPDATE II: To Myron, below: Your cynicism alert and my point are not mutually exclusive. The GOP has come a long way, thanks to the Tea Party, in accurately describing the coming, and calamitous, effects of the debt. We both agree that it’s too little too late.