Category Archives: Economy

UPDATED: GOV.CON Is Working As Intended

Communism, Economy, Government, Healthcare, Socialism, The State

Delay it, fix it, tweak it, get Amazon’s computer programers to redesign it; and, boohoo, the poor president—a pox on Obama!—is so poorly served by it!

Republicans and Democrats alike have made these specious, irrelevant, mealy-mouthed points about the “Patient Protection and Affordable Care Act.” That includes those “pig-ignorant panelists” who turn the Sean Hannity Show into such a zoo. (My apologies to all animals, who are far and away superior in intelligence and manners to Sean’s panelists.)

You can no more mend Government.Con than you could have tweaked Stalin’s Gulag.

Read “Why Government ‘Care’ Will Never, Ever Work” at the preeminent libertarian site, Economic Policy Journal:

…In the bureaucracy, incentives will forever be inverted. Failure results in success: in more funds, more training, more time off. “We don’t have profits and losses in the civil service. Success in the civil service is measured by the size of our staff and budget. A bigger department is more successful than a smaller one,” smiled the marvelously sardonic Sir Humphrey Appleby, superstar of the satire “Yes, Prime Minister.”
Since it “manages” money not its own, government has no real incentive to conserve resources, ensure a job is properly done, or deliver on its promises. Entrusted with the administration of assets you don’t own, have no stake in; on behalf of people you don’t know and who have no real recourse against your mismanagement—how long before your on-the-job performance mirrors that of the government? …

MORE.

UPDATE: “Some health insurance gets pricier as Obamacare rolls,” concedes the LA Times. But what would an LA Times article be without floating a foolish theory, blaming business for a law that has mandated extended coverage?

Guaranteed, exhaustive coverage is driving up rates:

Individual policies must also cover a higher percentage of overall medical costs and include 10 “essential health benefits,” such as prescription drugs and mental health services. The aim is to fill gaps in coverage and provide consumers more peace of mind. But those expanded benefits have to be paid for with higher premiums.

Justice demands that people who scoffed at the right analysis (see “Destroying Healthcare For The Few Uninsured,” August 7, 2009) of this law and cheered it on should suffer. They deserve to suffer. But I fear the future for all. Be afraid.

Debt-Addled America

Debt, Democrats, Economy, Government, Republicans

“Like father, like son” goes a saying about the similarities between the behavior of a child and his parents. In the case of the nation, infantile America mirrors its squandering government with respect to debt carried.

Is there any wonder the American people, happliy gulled by the moron media, disapprove of Republicans for entertaining the idea of not raising the debt ceiling?

“American companies and consumers are embracing [debt], running up record amounts in 2013,” reports CNBC.

Total household debt, according to the Fed’s flow of funds report, is at $13 trillion, nearly back to its pre-crisis level in 2007 and a shade below government debt of $15 trillion. … The debt deluge doesn’t end there, either, with lots of loans being taken out as well by companies. U.S. loan volume alone totaled $1.53 trillion through the first three quarters, a gaudy 25 percent higher than the same period in 2012. …
…Consumer credit, for instance, surged past the $3 trillion mark in the second quarter of 2013 and continues on an upward trajectory, according to the most recent numbers from the Federal Reserve.
At $3.04 trillion, the total is up 22 percent over the past three years. Student loans are up a whopping 61 percent.

Warns financier Peter Schiff:

The belief that deficits add to the economy, and that debt can be dealt with in an imaginary future (that never seems to arrive) is the foundation upon which the President can chastise the Republicans as irresponsible suicide bombers. Using this logic, he can argue (with a straight face) that borrowing is the equivalent of paying. That the President can make this delusional argument is not so surprising (no lie too great for the typical politician to attempt). What is alarming is that the media and the public have swallowed it so willingly. As they call for limitless increases in borrowing, Democrats have offered no plan to reduce the current debt and they are unwilling to negotiate with Republicans on that topic. Yet somehow they have been perceived as the party of fiscal responsibility. …
… According to modern economists, an elimination of deficit spending will immediately cause a dollar for dollar decrease in GDP. For example, if the government stopped sending food stamp payments to poor people, then grocery stores would lose business, employees would be laid off, and the economy would contract. But this one dimensional view fails to appreciate that the purchasing power of the food stamps had to come from somewhere. The government can’t create something from nothing. Taxation transfers purchasing power from people living in the present to other people living in the present. In contrast, borrowing transfers purchasing power from people living in the future to people living in the present. The good news for politicians is that future people don’t vote in current elections (and current voters don’t seem to appreciate the cost to their future selves of current policy).

It’s Do Or Die: How Important Is NOT Raising The Debt Ceiling?

Debt, Economy, Government, Republicans

One of the most important stands the near-irrelevant Republicans can take is to NOT raise the debt ceiling. As was pointed out in “Debt-Ceiling Hike Denier And Proud,” on EPJ (the preeminent libertarian site on the World Wide Web), if the Republicans stand firm just this once and “refuse to raise the debt ceiling,” they would force the government to balance its budget. Also explained in the column: The government’s receipts are more than sufficient to cover its debt payments by a factor of approximately ten.

More via Professor Jeffrey Dorfman, at Forbes:

Reaching the debt ceiling does not mean that the government will default on the outstanding government debt. In fact, the U.S. Constitution forbids defaulting on the debt (14th Amendment, Section 4), so the government is not allowed to default even if it wanted to.

In reality, if the debt ceiling is not raised in the next two weeks, the government will actually have to prioritize its expenses and keep its monthly, weekly, and daily spending under the revenue the government collects. In simple terms, the government would have to spend an amount less than or equal to what it earns. Just like ordinary Americans have to do in their everyday lives. …

… An increase in the debt ceiling allows the government to continue to run a budget deficit, which by simple accounting means that the national debt will increase. Not raising the debt ceiling does not mean defaulting on the current debt, but rather that no new debt can be incurred.

As a libertarian, it hurts me to “plot” all the state’s immoral and wastrel appropriations. As an economics professor, Dorfman has done the necessary work. He has worked out a balanced budget for the plundering class.

Read it.

It really is do or die.

UPDATED: The Debt Default Ruse (Obama Banana)

Barack Obama, Debt, Economy, Government, Media

The threat of a default on the debt is a political ploy and an extension of a crook’s book keeping. (The crook is the government.)

Failure to raise the debt limit would not necessarily precipitate a default by the United States–not unless the politicians orchestrate such a default, which they invariably do.

The U.S. government has debt obligations and other expenditures. It raises sufficient revenue from We The suckers to discharge its obligations.

The federal government raises trillions of dollars in tax revenue each year, though there are many different kinds of taxes. Some taxes fund specific government programs, while other taxes fund the government in general. … Total federal tax revenues in fiscal year 2014 are projected to be $3 trillion.

(National Priorities Project)

As PAT TOOMEY pointed out 2 years back, when the same “debate” was being rehashed, “If Congress refuses to raise the debt ceiling, the federal government will still have more than enough money to fully service our debt.”

UPDATE (9/30): OBAMA BANANA. There once was an African “leader” by the name of Canaan Banana. Truly. He was far and away a better man than Obama. Just free associating.

Here is Mark Steyn on Obama Banana’s attitude to debt:

This is the United States of America,” declared President Obama to the burghers of Liberty, Mo., on Friday. “We’re not some banana republic.”

He was talking about the Annual Raising of the Debt Ceiling, which glorious American tradition seems to come round earlier every year. “This is not a deadbeat nation,” President Obama continued. “We don’t run out on our tab.” True. But we don’t pay it off either. We just keep running it up, ever higher. And every time the bartender says, “Mebbe you’ve had enough, pal,” we protest, “Jush another couple trillion for the road. Set ’em up, Joe.” And he gives you that look that kinda says he wishes you’d run out on your tab back when it was $23.68.

Still, Obama is right. We’re not a banana republic, if only because the debt of banana republics is denominated in a currency other than their own — i.e., the U.S. dollar. When you’re the guys who print the global currency, you can run up debts undreamt of by your average generalissimo. As Obama explained in another of his recent speeches, “Raising the debt ceiling, which has been done over a hundred times, does not increase our debt.” I won’t even pretend to know what he and his speechwriters meant by that one, but the fact that raising the debt ceiling “has been done over a hundred times” does suggest that spending more than it takes in is now a permanent feature of American government. And no one has plans to do anything about it. Which is certainly banana republic-esque.