Category Archives: Debt

UPDATE II: News You Missed (Taxpayers Vs. Tax Consumers)

America, China, Debt, Media, Uncategorized

The ostrich press, “Bloomberg, CNN, New York Times or anywhere in the US print or TV media,” did not report it. VDARE did:

“On Thanksgiving eve the English language China Daily and People’s Daily Online reported that Russia and China have concluded an agreement to abandon the use of the US dollar in their bilateral trade and to use their own currencies in its place. The Russians and Chinese said that they had taken this step in order to insulate their economies from the risks that have undermined their confidence in the US dollar as world reserve currency.” …

“The American financial press finds solace in the episodes when sovereign debt scares in the EU send the dollar up against the euro and UK pound. But these currency movements are just measures of financial players shorting troubled EU-denominated debt. They are not a measure of dollar strength.”

MORE.

UPDATE I: The custodians of the Irish state are still better than the filth that gathers to rule us from DC. The American governing class has been unique in working against the economic interests of its countrymen and their country. (Treason?)

News comes that, “Ireland [will] endure the toughest cuts and tax hikes in its history as an unavoidable price for saving the debt-burdened nation from bankruptcy, Finance Minister Brian Lenihan told lawmakers as they prepared to vote on a brutal 2011 budget.”

“Lenihan’s plan — the harshest yet of four emergency budgets unveiled since 2008 to combat a runaway deficit — contains euro4.5 billion ($6 billion) in spending cuts and euro1.5 billion ($2 billion) in tax rises.”

Lenihan said income taxes would be broadened to bring tens of thousands of low-salaried workers into the tax net for the first time, while welfare payments would be cut across the board. Spending on capital projects — chiefly jobs-intensive building of roads and public transportation networks — would be cut by euro1.8 billion ($2.4 billion).

“Lenihan said Ireland had no choice but to slash spending and raise taxes immediately because the country this year is spending more than euro50 billion on regular government and at least euro45 billion to bail out its banks — yet collecting just euro19 billion this year in taxes. The staggering imbalance means an underlying deficit this year of 11.6 percent that, when bank-bailout costs are included, balloons to a modern European record of 32 percent of GDP.”

[SNIP]

I like the Irish idea of tax hikes on the poor a lot. Really. The cost of the welfare state must be felt by those who demand its spoils. Making the rich bleed for creating wealth will not ween the poor off welfare.

UPDATE II: The state has bifurcated the population into taxpayers and tax consumers. The so-called poor don’t really pay taxes as they receive in the form of assorted transfer payments from the government more than they contribute. They are net tax consumers.

The so-called rich pay all the taxes. Making the poor pay might just turn them against all the stuff they believe they are owed.

Dead-In-The-Water Debt Commission

Britain, Debt, Economy, Government, Inflation

My maxim,“Government commissions are where accountability goes to die,” played out today when, as the Washington Examiner reports, “President Barack Obama’s deficit commission failed to forge consensus on what to do about an increasingly urgent debt problem …”

“The 11-7 vote in favor of the panel co-chairmen’s recommendations for a painful mix of spending cuts and tax increases foretells a bitterly partisan and possibly unproductive debate in the House. If there’s a deal to be had, it will likely be reached in the Senate. Fourteen votes were needed to officially send the plan to Congress now for quick action on it.”

“The Details” of the thwarted plan, have been distilled by The Huffington Post’s Sam Stein:

“The draft put out by the commission chairs has been released, coming in at 50 pages. The overarching goal, Simpson and Bowles write, is to achieve ‘nearly $4 trillion in deficit reduction through 2020’ while reducing ‘the deficit to 2.2% of GDP by 2015.'”

“How they get there is going to be a matter of contention as other commission members have already stressed their displeasure with the suggestions. But here are a few of the more noteworthy suggestions.”

* Roll discretionary spending back to FY2010 levels for FY2012, requires 1% cut in discretionary budget authority every year from FY2013 though 2015;

* Fully offset the cost of the ‘Doc Fix’ by asking doctors and other health providers, lawyers, and individuals to take responsibility for slowing health care cost growth;

* Reduce farm subsidies by3 billion per year by reducing direct payments and other subsidies;

* Achieve100 billion in Illustrative Defense Cuts;

* Index retirement age for Social security to increases in longevity. ‘This option is projected to increase the age by one month every two years after it reaches 67 under current law, meaning the normal retirement age would reach 68 in about 2050 and 69 in about 2075.’ There will be a ‘hardship exemption’ for those unable to work beyond 62;

* Give retirees the choice of collecting half their benefits early and the other half at a later age to minimize impact of actuarial reduction and support phased retirement options;

* Reduce corporate tax rate to 26% and permanently extend the research credit;

* Gradually increase gas tax to fund transportation spending.”

[SNIP]

Think about it: The American president appoints a select group of like-minded officials tasked with coming up with a plan to tackle the deficit, the debt and the government’s long-term, looming liabilities. The commission completes its task by agreeing not to tackle the task. Meanwhile, the British PM has fired hundreds of thousands of state worker and slashed departmental budgets.

UPDATED: 'THE Ben Bernanke' For Babies

Debt, Fascism, Federal Reserve Bank, Inflation, Political Economy

“The printing money is the last refuge of failed economic empires and banana republics and the Fed doesn’t want to admit that this is their only idea. … The plumber is clearly smarter than The Ben Bernank. … The Fed thinks prices are going down [deflation] when in fact they are going up [inflation]. And they think that during a recession with The High Unemployment that it is better if the things people need to buy cost more money. …”

Out of the mouths of babes engaged in a Socratic debate about the Federal Reserve Bank and “The Bernank” comes this delightfully simple, but cerebral, YouTube explanation of the workings of the Fed.

But, change “The Fed has been wrong about every major economic development for the past 20 years” to almost 100 years. For that is the duration of the error that is the Fed. 1913 is when The Fed was founded.

Especially adorable is the “THE”: The Bernanke, The printing of The money, The Deflation, The Inflation, The Goldman Sachs (“they make their living ripping-off The American People”). The Quantitative Easing. The Change.

UPDATE: The creative genius behind the above is also author of the “iPhone4 vs HTC Evo” wonderful clip:

“Victims” Of Greed … Their Own

Business, Criminal Injustice, Debt, Economy, Regulation, Socialism

Now here’s a victims’ fund we can all get behind: delinquent borrowers being foreclosed upon by wicked bank executives. The WSJ:

‘Fund in works for victims of foreclosure mess,” announced the Washington Post’s front page yesterday. Sorry to report that the Post was not referring to taxpayers who have already spent hundreds of billions of dollars cleaning up this mess.

So who exactly are the victims in this story? The Post describes “homeowners who were wronged,” but the writers are also not referring to the roughly 90% of mortgage borrowers who are paying on time. As for the proposed compensation fund, the Post compares it to those set up for victims of the Gulf oil spill, the shootings at Virginia Tech and the terrorist attacks of September 11, 2001.

Readers may begin to suspect that one of these funds is not like the others. For starters, we’re not aware of any delinquent borrowers being killed by bank executives. In fact it’s not easy to find any injury at all. The Post doesn’t name anyone who’s been harmed, and neither did Connecticut Senator Christopher Dodd as he opened Tuesday’s Banking Committee hearing on the problems in the mortgage servicing industry. Don’t expect any further clarification at Thursday’s House Financial Services headline hunt.

Readers will recall that the foreclosure mini-scandal began in September with revelations that “robo-signers” at mortgage firms were signing foreclosure documents that they had not personally reviewed. Instead, they had improperly relied on the work of colleagues.

“[I]f a settlement transfers more wealth from investors and taxpayers (who now stand behind most mortgages) to delinquent borrowers, the least the attorneys general could do is stop calling them victims.”

MORE.

Oh, come on: is that the best you can do? How about Moochers? Looters? You’re right; that’s too mild too.