Category Archives: Debt

Obama Deflects The Opposition

Barack Obama, Debt, Democrats, Economy, Republicans

President Obama visited House Republicans at their annual retreat and took “public questions from members of the opposition party.” While the session was a rare gesture from a sitting president, it is nevertheless consistent with the Obama modus operandi, which entails showy displays designed to accentuate his ostensible historic uniqueness.

I completely agree with the president when he points out that “the component parts of the Recovery Act are consistent” with what many Republicans say are important.” [Although, I believe, “is important” would have been more grammatical.]

After all, “Nothing much distinguishes Republican from Democratic vulgar Keynesianism. Republicans have offered no change in paradigm. Guru Gingrich, a ‘hard core’ fiscal conservative, advised fellow Republikeynsians to offer Americans a more efficient, targeted stimulus, when no stimulus is the conservative way; when allowing markets to contract is the conservative way.” [I.O.U.S.A]

Didn’t Republicans vote for the Bush administration’s bailout bonanza, and before that for the Bush stimulus? (Someone please hunt down the relevant Republican voting record.) Did not the Republikeynsians agree with Barack’s Bill’s alleged job-creation thrust?

“How much to hand out; who to hand it to; which handout makes the best use of taxpayer money … —that’s the depth of the ‘philosophical’ to-be-or-not-to-be among Republikeynsians.”

Pelosi Against The Military-Media-Congressional-Industrial Complex

Debt, Democrats, Foreign Policy, Military, War

I thanked Nancy Pelosi once in the past for going up against The Decider and his ditto heads. This time she’s owed some gratitude for confronting the Democrats’ deity.

Obama’s proposed Big spending Freeze is a big farce. In 2009, he increased overall spending by 22%. Nancy is insisting that “pork-laden Pentagon programs shouldn’t be protected from President Obama’s proposed three-year spending freeze.”

“While we all want to support our men and women in uniform… and our national defense and our veterans, I don’t think that we should protect military contractors, and I want to make that distinction very clear,” Pelosi said at her weekly press conference Thursday.

The government can’t minimize wasteful spending without auditing the Pentagon, Pelosi said, citing a 2009 report indicating that top U.S. weapons programs went over budget by some $296 billion.

“I don’t support exempting them from the freeze,” she said.

“… the Warfare State is every bit as corrupt, corrupting, and bankrupting as the Welfare State. Over $1 trillion is spent yearly on imperial expeditions that are awash in American blood, but offer few benefits to the sacrificed. Besides, what kind of a nation neglects its own borders while defending to the death borders not its own? [From “Addicted To That Rush”]

Updated: What? Government Debt Strangles The Economy? (& The Big Freeze Fallacy)

Debt, Economy, Government

You don’t say! Since when? The bundling by the Congressional Budget Office of government debt and economic stagnation is a newish thing. The so-called partisan patsies of the president’s office usually keep the two intertwined categories discrete and separate, leading the country to think that the one has nothing to do with the other, and that the economy is subject to the voodoo of “animal spirits.”

“The nonpartisan CBO said the deficit for the current fiscal year will come in at $1.35 trillion, a slight improvement over the $1.38 trillion it predicted last August. But it warned that rapidly rising federal debt could strangle the economy.” [My emphasis]

Reuters writers, on the other hand, are keeping it real with this subtle subterfuge:

“The U.S. budget deficit will remain at levels not seen since World War Two, congressional forecasters said on Tuesday in a report that lays out the stark challenge facing President Barack Obama as he seeks to boost the economy and cut spending at the same time.”

Did you spot the propaganda in the Reuters item? In order to amount to a half-honest lede, “Boost the economy” ought to have been followed with “by spending,” or replaced by those two words.

Update (Jan. 27): THE BIG (SPENDING) FREEZE; MY EYE!

WSJ: “In 2007, before the recession, federal expenditures reached $2.73 trillion. By 2009 expenditures had climbed to $3.52 trillion. In 2009 alone, overall federal spending rose 18%, or $536 billion. Throw in a $65 billion reduction in debt service costs due to low interest rates, and the overall spending increase was 22%.

In one year.”

CBO confirms that Democrats have taken federal spending to a new and higher plateau: 24.7% of GDP in 2009, 24.1% this year, and back to an estimated 24.3% in 2011. The modern historical average is about 20.5%, and less than that if you exclude the Reagan defense buildup of the 1980s that helped to win the Cold War and let Bill Clinton reduce defense spending to 3% of GDP in the 1990s. …
This means that one of every four dollars produced by the sweat of American private labor is now taxed and redistributed by 535 men and women in Congress. …
Compared to this gusher, Mr. Obama’s touted spending freeze for some domestic agencies is the politics of gesture. It would apply to only 17% of the budget, and these programs have already had a 22% increase in their annual appropriations in the past two years, and another 25% increase including stimulus.

A Tale Of Two Countries

Business, China, Debt, Economy, Federal Reserve Bank

CHINA AND THE US: Two countries whose respective central banks are pursuing distinctly different policies.

Federal Reserve Chairman Ben Bernanke’s reason for living is to lower interest rates and inject liquidity into an overinflated economy. When Ben announced, a few days back, that he remains “open to using the blunt tool of higher interest rates to avert or pop future asset bubbles … particularly if other approaches aren’t working”—people were floored. (Yes, Ben considers raising interest rates a “blunt tool,” but keeping them artificially low quite okay.) For now, Our Ben is keeping rates near zero.

The People’s Bank of China, on the other hand, has moved to restrain lending by raising “the proportion of deposits that banks must set aside as reserves by 50 basis points starting Jan. 18.” This, anticipates Bloomberg.com, “may foreshadow higher interest rates.”

China is cooling its economy; Ben is heating ours’ up, as he tries to pump stale air into deflating balloons.