Category Archives: Debt

Update III: Obama’s Route To Economic Revival (A Stake Through The Heart Of The Economy)

Barack Obama, Debt, Democrats, Economy, Healthcare, Media, Socialism

A straitjacket is where this man and his followers belong. And where Bush before him should have been placed. For as much as the beaus and bimbos of FoxNews and their loyalists wish to forget, Bush paved the way for Barack’s Bacchanalia—“The unconstitutional campaign finance-reform bill and ‘Sarbanes-Oxley Act’ (a preemptive assault on CEOs and CFOs, prior to the fact of a crime); the various trade tariffs and barriers; the Clintonian triumph of triangulation on affirmative-action; the collusion with Kennedy on education; the welfare wantonness that began with a prescription-drug benefit that would add trillions to the Medicare shortfall, and culminated in the Kennedy-countenanced ‘New New Deal’ for New Orleans, for which there was no constitutional authority; the gold-embossed invitation to illegals to invade, and the ‘camouflaged amnesty'”—Barack wishes he’d done all this, but these were Bush’s babies.

Back to the bastard du jour : The New York Times editorializes approvingly on what Obama’s health care “reform” will accomplish:

It will “require virtually all Americans to carry health insurance or pay a penalty. And it would require all but the smallest businesses to provide health insurance for their workers or pay a substantial fee. It would also expand Medicaid to cover many more poor people, and it would create new exchanges through which millions of middle-class Americans could buy health insurance with the help of government subsidies. The result would be near-universal coverage at a surprisingly manageable cost to the federal government.

The nonpartisan Congressional Budget Office estimates that by 2015, 97 percent of all residents, excluding illegal immigrants, would have health insurance. The price tag for this near-universal coverage was pegged by the budget office at just more than $1 trillion over 10 years — at the low-end of the estimates we’ve heard in recent weeks.

The legislation would pay for half that cost by reducing spending on Medicare, a staple of all reform plans. It would pay for the other half by raising $544 billion over the next decade with a graduated income surtax on the wealthiest Americans: families with adjusted gross incomes exceeding $350,000 and individuals making more than $280,000.” …

Update I: Republicans on the Joint Economic Committee (led by Rep. Kevin Brady (R-TX), who, as far as I know, did less than nothing to highlight the evils of their Boy Bush’s prescription drug program, have developed the following organizational chart to illustrate the efficiencies built into to the Democrats’ healthscare politburo. Since the image, never the program, is quite small, check it out here.

Update II (July 17): “In total, CBO estimates that enacting [Obama’s healthscare) provisions would raise deficits by $1,042 billion over the 2010-2019 period.” But the CBO and the JCT hope that the net increase in the federal budget deficit of enacting H.R. 3200 will be only a meager $239 billion over the 2010-2019 period. That’s because of some “savings” the Act affords.

“That estimate reflects a projected 10-year cost of the bill’s insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those
10 years.”

Douglas W. Elmendorf, Director of the CONGRESSIONAL BUDGET OFFICE, who conducted the analysis of “H.R. 3200, America’s Affordable Health Choices Act of 2009,” summarizes the Act’s mandates:

The legislation would establish a mandate to have health insurance, expand eligibility for Medicaid, and establish new health insurance exchanges through which some people could purchase subsidized coverage. The options available in the insurance exchange would include private health insurance plans as well as a public plan that would be administered by the Secretary of Health and Human
Services. The specifications would also require payments of penalties by uninsured individuals, firms that did not provide qualified health insurance, and other firms whose employees would receive subsidized coverage through the exchanges. The plan would also provide tax credits to small employers that contribute toward the cost of health insurance for their workers.

I must say, I’m quite impressed with the CBO. Just the facts, ma’am.

Update III (July 18): Warns economist Peter Schiff: “the economy is walking dead anyway, and this measure is the equivalent of a stake through the heart.” From “Prescription for Disaster”:

“[T]taxing the rich to pay for health care for the uninsured is the wrong way to think about tax policy and is an unconstitutional redistribution of wealth. While the government has the constitutional power to tax to “promote the general welfare,” it does not have the right to tax one group for the sole and specific benefit of another. If the government wishes to finance national health insurance, the burden of paying for it should fall on every American. If that were the case, perhaps Congress would think twice before passing such a monstrosity.

In the second place, the bill is just plain bad economics. For an administration that claims to want to create jobs, this bill is one of the biggest job-killers yet devised. By increasing the marginal income tax rate on high earners (an extra 5.4% on incomes above 1 million), it reduces the incentives for small business owners to expand their companies. When you combine this tax hike with the higher taxes that will kick in once the Bush tax-cuts expire, and add in the higher income taxes being imposed by several states, many business owners might simply choose not to put in the extra effort necessary to expand their businesses. Or, given the diminishing returns on their labor, they may choose to enjoy more leisure. More leisure for employers means fewer jobs for employees.

More directly, mandating insurance coverage for employees increases the cost of hiring workers. Under the terms of the bill, small businesses that do not provide insurance will be required to pay a tax as high as 8% of their payroll. Since most small businesses currently could not afford to grant 8% across-the-board pay hikes, they will have to offset these costs by reducing wages. However, for employees working at the minimum wage, the only way for employers to offset the costs would be through layoffs.”

Read the complete column on Taki’s.

Seeking Honorable Hondurans For Hire

Barack Obama, Debt, Economy, Federal Reserve Bank, Inflation, Political Economy, Ron Paul

In my latest column, now on Taki’s Magazine, I look high-and-low for “Honorable Hondurans for Hire,” to depose of the D.C. bloodsuckers before they do more harm:

“Vice President Joe Biden has been slightly more candid than his boss, confessing of late that he ‘and everyone else misread the economy.’ For his ‘everyone else’ refrain, or plain fib, Joe can be forgiven. Drawing comfort from ‘the warm smell of the herd’ he surrounds himself with is slightly better than Obama’s way out. Beloved of the herd, Obama opts for sophistic statements—the kind that cannot be proved or disproved. To wit: sans stimulus, more jobs would have been lost.

Yes, jobs. Although Obama’s chief economic advisers promised that their ‘stim’ would hold the unemployment rate below 8 percent, it has risen to 9.5 percent and is expected to exceed ten. This is the highest unemployment has been in almost 26 years, with employers cutting 467,000 jobs in June alone.

A few months back, when Obama passed his $787 billion of stimulus—consisting of politically directed projects that ballooned government at all levels—there was not a scintilla of uncertainly in the minds of his gurus and the patsy pundits who service them. This infusion of borrowed and counterfeited funds, they asserted, would pick up the slack in the languishing economy, to use one crazy Keynesian concept. (Keynes was to economics as Katrina was to New Orleans.) …

… Laura Tyson, eminent adviser to the president … managed to make front-page news—vying with Jackson and the carrion beetles consuming his remains—by asserting that the February stimulus was ‘a bit too small.’

Not a great deal too small, mind you, just a wee bit small.

When issued, the lion’s share of this oh-so carefully calibrated loot ought to go toward hiring a few honorable Hondurans to depose of the bloodsuckers before they do more harm. …”

The complete column, “Seeking Honorable Hondurans For Hire,” is now on Taki’s.

Miss the weekly column on WND.COM? Catch it on Taki’s Magazine every Saturday.

The Debt Keeps Obamby Up At Night

Debt, Economy, Federal Reserve Bank, Inflation

The same economists who’ve insisted on billions in bailout and stimulus monies now say the country’s debt is unsustainable.

The same president who ballooned Bush’s bailouts, authorized astronomical outlays, deepened the socialization of the economy, and now carps about the need for more of the same—trillions in healthcare expenditure and crippling cap-and-trade costs—the same sod complains that the debt “keeps me awake at night.”

The same Counterfeiter-in-Chief, Ben Bernanke, who turned his snout up when Rep. Ron Paul questioned his sanity and the source of his authority, is now lecturing the numskulls in Congress that “Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth.”

Only a few weeks back all these government gurus, and the pundits in their peanut gallery, insisted that digging America out of the financial grave is a long-term goal. For the short term, it’s stimulus time, baby. “Show me the fake money, shower me with cheap credit; and send me sailing on a ship of fools.”
(See “I.O.U.S.A.”)

Amidst reports that, at $11.5 trillion, “the overall debt is now slightly over 80% of the annual output of the entire U.S. economy, as measured by the gross domestic product,” that “this year’s deficit is now estimated at about $1.85 trillion,” that the nation’s full (unfunded) obligations stand at around $60 trillion, and that each one of us has been saddled with roughly $184,000 of state debt—Paul Krugmanites and their acolytes now tell us that, “We are on an utterly unsustainable fiscal course.”

Of course, we on BAB, and all fellow adherents of the Austrian school of economics, have been sounding the alarm for years and with the following caveat: we have only ever advocated allowing the economy to contract and purge the malinvestment poisons.

Do I need to remind you that the aforementioned criminals have refused to concede that a contraction was a good and necessary thing; that the same creeps are in the habit of pathologizing an economic downturn by using terms such as “deflation,” and calling for government to step in and pick up the slack by spending—measures that have resulted in what is a depression by any other name.

That’s called Voodoo economics (also Keynesianism.)

Throw these bums out, and that includes the “Republikeynesians”.

…Like A Housewarming For The Homeless

Debt, Economy, Government, Inflation, Labor, The State

A JOBLESS RECOVERY is the equivalent of a housewarming for the homeless. You have got to know that this sophistic term is a political construct, not an economic one. The term is meant to coat the entrenched, systemic effects of endemic, employment-killing government policies with a patina of scholarly respectability.

Typically, establishment economists will waffle about “structural changes—permanent shifts in the distribution of workers throughout the economy”—causing job losses, but will gleefully tout GDP growth, or some or other highly manipulable indicator, as evidence that the the jobless are fussing needlessly.

And here we return to square one: I am not sure that a vigorous recovery is even possible given government funded and unfunded debt amounting to upwards of $60 trillion, and counting. I don’t know that a country can surface from under all that. At the very least, a natural shift must take place—and be evident—from a credit-fueled, consumption-based economy, to one founded on savings, investment and production.

But, what do you know, the GDP statistic is consumption-driven: it measures the kind of economic Brownian motion of which less is required. “This statistic is constructed in accordance with the view that what drives an economy is not the production of wealth but rather its consumption,” confirms (Austrian) economist Frank Shostak. “What matters here is demand for final goods and services. Since consumer outlays are the largest part of overall demand, it is commonly held that consumer demand sets in motion economic growth.”

The prevailing “theory” of John Maynard Keynes “is not economics, but a statist political theory. Keynes’s political creed guaranteed a hand-in-glove relationship between the state and its stooge economists. Most of what Keynes advocated entails giving the state enormous … powers.”

Essential in this scheme of things is semantic obscurantism. “A Jobless Recovery” is exactly that.

So when you hear that “employers cut 467,000 jobs in June, far more than expected, and the jobless rate hit a 26-year high of 9.5 percent”; and that “wages shrank to their lowest in nearly a year,” consider these vital indicators of a moribund economy.