Tuesday Evening Reads

Posted: August 27, 2013 | Author: | Filed under: open thread | Tags: , , , | 8 Comments

Higher-and-HigherWell, only a few days and I already really miss JJ  Here are a few headlines to get us through the evening.

There’s no money for these kinds of things:

Before becoming speaker in 2011, Boehner said, he’d watched leaders of both parties delay a long-term solution to a baby-boom-fueled benefit crisis.

“I made up my mind that we weren’t going to kick the can down the road any more,” Boehner, R-Ohio, told a Boise lunch crowd at a fundraiser for Idaho’s 2nd District Congressman Mike Simpson. “We’re not going to inflict all of this pain and suffering on our kids and our grandkids.”

The government will reach its $16.7 trillion borrowing limit this fall. Boehner rejected calls from some quarters to let the government shut down rather than agree to a compromise with President Obama and the Democratic Senate.

“There is no reason for the government to run out of money,” Boehner said. “Our goal here is to stop Obamacare. Our goal here is to cut spending.”

Boehner said GOP control of the House has forced Democrats to agree to three straight years of lower discretionary spending, which accounts for about one-third of the federal budget, savings that will reach $2.5 trillion over 10 years.

“Now, it’s time to deal with the mandatory side,” Boehner said, winning applause from a crowd of 430 at the Boise Centre on The Grove. “I’ve made it clear that we’re not going to increase the debt limit without cuts and reforms that are greater than the increase in the debt limit.

“The president doesn’t think this is fair, thinks I’m being difficult to deal with. But I’ll say this: It may be unfair but what I’m trying to do here is to leverage the political process to produce more change than what it would produce if left to its own devices. We’re going to have a whale of a fight.”

Recalling the 2011 battle over raising the federal debt ceiling, Boehner recalled negotiations that spooked financial markets, prompted Standard & Poor’s to downgrade the U.S. credit rating and angered ordinary Americans. He warned the audience to expect more of the same.

But there’s always money for war.

Military strikes on Syria ‘as early as Thursday,’ US officials say

The U.S. could hit Syria with three days of missile strikes, perhaps beginning Thursday, in an attack meant more to send a message to Syrian Dog-DaysPresident Bashar al-Assad than to topple him or cripple his military, senior U.S. officials told NBC News on Tuesday.

The State Department fed the growing drumbeat around the world for a military response to Syria’s suspected use of chemical weapons against rebels Aug. 21 near Damascus, saying that while the U.S. intelligence community would release a formal assessment within the week, it was already “crystal clear” that Assad’s government was responsible.

Vice President Joe Biden went even further, bluntly telling an American Legion audience in Houston: “Chemical weapons have been used.”

“No one doubts that innocent men, women and children have been the victims of chemical weapons attacks in Syria, and there’s no doubt who’s responsible for this heinous use of chemical weapons in Syria: the Syrian regime,” Biden said.

Fox Expert says that since women have breasts they should pay more for health care. Where do they get these guys?

A Fox News medical expert on Tuesday argued that President Barack Obama’s administration was wrong to force gender equality for health insurance rates because men “only have the prostate,” while women “have the breasts, they have the ovaries.”

“Look, it’s not bias, I’m not saying this as a man,” Fox News Medical A-Team contributor Dr. David Samadi told the hosts of Fox & Friends. “They go through a lot of preventive screenings, they give birth, they have the whole mammogram, the Pap smear. Guys, we don’t like to go to doctors, right? Seventy percent of health care decisions are made by women. In my own practice, I see it’s the women who bring the guys, who say, go get screened.”

“Yeah, but shouldn’t that earn us a discount?” Fox News host Gretchen Carlson interrupted. “Basic fact that we are responsible for getting our men to come to the doctor? And what about the fact that women, because they do all this preventative care, maybe their health issues end up costing less than men’s, who don’t go to the doctor until it’s a crisis and a big deal.”

“Yes, that’s a good point, except that, you know, women live longer,” Samadi asserted. “Women live until age 81 and men live only until 76. So, we’re using the health care system much less.”

“In this case, it’s not equal,” co-host Brian Kilmeade agreed. “You have a better time on Earth than we do, you’re here a lot more. You have six years of heaven, where you just have no men around.”

Carlson pointed out that women were blamed for maternity costs, “but men and women have babies together.”

“I agree with you that it’s a shared responsibility,” Samadi said. “But just the way the system are — in my field, we only have the prostate. Women have the breasts, they have the ovaries, they have the uterus. They get checked in every part.”

Defunding-ObamacareOH, Please say this isn’t so!!!  Oh the Humanity!!   Obama source predicts Summers will be named Fed chief soon. Looter Larry as Fed Chair!!!

A source from Team Obama told CNBC that Larry Summers will likely be named chairman of the Federal Reserve in a few weeks though he is “still being vetted” so it might take a little longer.

It’s largely come down to a two-horse race between Summers, a former Treasury secretary, and Fed Vice Chairman Janet Yellen for the next Fed chief.

It is widely expected that the current Fed Chairman Ben Bernanke will resign by the end of the year as his term ends in January. President Obama has already said that Bernanke has “already stayed a lot longer” in the role than he expected. Those remarks came in an interview with Charlie Rose on PBS in June.

Monday Reads: Bachmann’s Federal Subsidies, Nebraska Nuke Plants, and Cuomo vs. Obama on Marriage Equality

Posted: June 27, 2011 | Author: | Filed under: Crime, Marriage Equality, morning reads, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , , , , , , | 8 Comments

Good morning!! This is going to be a quickie morning post, because I kind of wore myself out yesterday obsessing on the Casey Anthony trial and another “tabloid” story I’ve been following about woman–Lauren Spierer, an IU student–who disappeared in Bloomington, Indiana three weeks ago. I grew up in Indiana and my sister lives in Bloomington, so I’ve been reading a lot about the case.

Here’s some background on the Spierer case: Vanished: Following the last-known steps of Lauren Spierer

I promise I’ll get back to obsessing on politics as soon as some real news starts happening again.

The LA Times had a couple of stories about Michele Bachmann and her husband getting federal money for his clinic and his parents’ farm.

Bachmann’s had her share of government aid

Rep. Michele Bachmann has been propelled into the 2012 presidential contest in part by her insistent calls to reduce federal spending, a pitch in tune with the big-government antipathy gripping many conservatives.

But the Minnesota Republican and her family have benefited personally from government aid, an examination of her record and finances shows. A counseling clinic run by her husband has received nearly $30,000 from the state of Minnesota in the last five years, money that in part came from the federal government. A family farm in Wisconsin, in which the congresswoman is a partner, received nearly $260,000 in federal farm subsidies.

And she has sought to keep federal money flowing to her constituents. After publicly criticizing the Obama administration’s stimulus program, Bachmann requested stimulus funds to support projects in her district. Although she has been a fierce critic of earmarks — calling them “part of the root problem with Washington’s spending addiction” — the congresswoman nonetheless argued recently that transportation projects should not be considered congressional pork.

Michele Bachmann denies benefiting from government aid

Rep. Michele Bachmann deflected allegations Sunday that she and her immediate family had benefited from government assistance despite her demands to cut the federal budget, saying hundreds of thousands of dollars for her family farm and a counseling clinic went to employees and her in-laws.

“My husband and I did not get the money,” the Minnesota Republican said on Sunday news shows one day before officially opening her presidential campaign in Waterloo, Iowa — her birthplace.

Except she did get the money, as shown by her disclosure forms. See the previous story. Bachmann claimed that the money for the clinic went for employee training. Wouldn’t training of employees also help the business?

The New York Times has a pretty good article about the two Nebraska nuclear plants that are endangered by flooding from the Missouri River–the Ft. Calhoun and Cooper reactors. If you haven’t read Dakinikat’s post on this scary situation, please do. From the NYT piece:

Like inhabitants of a city preparing for a siege, operators of the nuclear reactor here have spent days working to defend it against the swollen Missouri River at its doorstep. On Sunday, eight days after the river rose high enough to require the operators to declare a low-level emergency, a swarm of plant officials got to show off their preparations to the chairman of the Nuclear Regulatory Commission.

The reactor, Cooper Station, is one of two nuclear plants on the Missouri River that are threatened by flooding. The second reactor, Fort Calhoun, 85 miles north, came under increased pressure for a brief period on Sunday. Before dawn, a piece of heavy equipment nicked an eight-foot-high, 2,000-foot-long temporary rubber berm, and it deflated. Water also began to approach electrical equipment, which prompted operators to cut themselves off from the grid and start up diesel generators. (It returned to grid power later Sunday.) Both nuclear plants appeared prepared to weather the flooding, their operators and federal government regulators said.

Fort Calhoun was shut down in April for refueling and stayed closed because of predictions of flooding. Plant officials say the facility is designed to remain secure at a river level of up to 1,014 feet above sea level. The water level stabilized at 1,006.5 feet on Sunday, according to the Omaha Public Power District, the operator of the Fort Calhoun plant.

Unfortunately the Times doesn’t mention that large amounts of nuclear tritium are leaking from these plants into the groundwater or say whether any testing of drinking water is being done. What happens if the Missouri becomes contaminated by nuclear material?

CNN reports that a huge water-filled berm that was being used to protect the Ft. Calhoun plant burst yesterday.

Some sort of machinery came in contact with the berm, puncturing it and causing the berm to deflate, said Mike Jones, a spokesman for the Omaha Public Power District (OPPD), which owns the Fort Calhoun plant.

Authorities say this was just a back-up measure and the plant is still safe.

Parts of the grounds are already under water as the swollen Missouri River overflows its banks, including areas around some auxiliary buildings, Jones said.

The 8-foot-tall, water-filled berm, 16 feet wide at its base, surrounded the reactor containment structure and auxiliary buildings, according to the Nuclear Regulatory Commission.

“We built the plant up high enough based on history, based on the flooding in the past. If the flood would rise for some reason above that level we have taken precautions, again, per our procedures to sandbag the important equipment for the reactors,” said Dave Van Der Kamp, with the Nebraska Public Power District.

He said the chances of floodwater getting into the building where the core is kept are almost zero.

I sure hope that’s true.

The NYT has an interesting article on how Andrew Cuomo helped shepherd the gay marriage bill through the New York legislature.

In the 35th-floor conference room of a Manhattan high-rise, two of Gov. Andrew M. Cuomo’s most trusted advisers held a secret meeting a few weeks ago with a group of super-rich Republican donors.

Over tuna and turkey sandwiches, the advisers explained that New York’s Democratic governor was determined to legalize same-sex marriage and would deliver every possible Senate vote from his own party.

[….]

…the donors in the room — the billionaire Paul Singer, whose son is gay, joined by the hedge fund managers Cliff Asness and Daniel Loeb — had the influence and the money to insulate nervous senators from conservative backlash if they supported the marriage measure. And they were inclined to see the issue as one of personal freedom, consistent with their more libertarian views.

Basically, Cuomo acted more presidential than Obama did. I wonder if Cuomo would like to primary Obama? Just kidding….

Here’s an interesting piece at the WaPo: Votes that pushed us into the red. There is a chart that shows how various politicians rationalized supporting big spending projects–although some of them might have actually provided some economic stimulus.

Finally, there’s going to be some kind of cost-cutting change to the electric power grid that will make our electric clocks run fast.

A yearlong experiment with the nation’s electric grid could mess up traffic lights, security systems and some computers — and make plug-in clocks and appliances like programmable coffeemakers run up to 20 minutes fast.

“A lot of people are going to have things break and they’re not going to know why,” said Demetrios Matsakis, head of the time service department at the U.S. Naval Observatory, one of two official timekeeping agencies in the federal government.

Since 1930, electric clocks have kept time based on the rate of the electrical current that powers them. If the current slips off its usual rate, clocks run a little fast or slow. Power companies now take steps to correct it and keep the frequency of the current — and the time — as precise as possible.

The effect will be greater in some areas than others.

The North American Electric Reliability Corp. runs the nation’s interlocking web of transmission lines and power plants. A June 14 company presentation spelled out the potential effects of the change: East Coast clocks may run as much as 20 minutes fast over a year, but West Coast clocks are only likely to be off by 8 minutes. In Texas, it’s only an expected speedup of 2 minutes.

Some parts of the grid, like in the East, tend to run faster than others. Errors add up. If the grid averages just over 60 cycles a second, clocks that rely on the grid will gain 14 seconds per day, according to the company’s presentation.

That’s it for me. I’ve gotta go see what Judge Belvin Perry has to say this morning. What are you reading and blogging about today?

Friday Reads

Posted: May 20, 2011 | Author: | Filed under: abortion rights, Economy, Foreign Affairs, Israel, morning reads, Reproductive Rights, U.S. Economy, U.S. Politics | Tags: , , , , , , | 46 Comments

Good Morning!

It is definitely the silly season!  You can tell that an election count down is nearing in the District.  A judge of Chinese descent was successfully blocked by Republican Senators  and Ben NelSOB for sounding like a communist.  Did we go back to the McCarthy era and I missed it?

Six years ago, Ninth Circuit judicial nominee Goodwin Liu published an op-ed in which he made the utterly banal point that a conservative interest group used the terms “free enterprise,”‘ “private ownership of property,” and “limited government”  as “code words for an ideological agenda hostile to environmental, workplace, and consumer protections.” In a speech on the Senate floor yesterday, however, Sen. Chuck Grassley (R-IA) somehow managed to interpret this op-ed as proof that Liu wants to turn America into “Communist-run China”:

GRASSLEY: Does [Liu] think we’re the communist-run China? That the government runs everything? That it’s a better place when they put online every week a coal-fired plant to pollute the air, put more carbon dioxide into the air then we do in the United States, and where children are dying because food is poisoned, and consumers aren’t protected, and where every miner in the China coal mines is in jeopardy of losing their lives? That’s how out of place this guy is when he talks about “free enterprise,” “private ownership of property,” and “limited government” being something somehow bad, but if you get government more involved, like they do in China, it’s somehow a better place.

Republicans appear to be pulling out all the bells and dogwhistles for this one. This is the first time a judicial nominee has been blocked since 2005.

Liu also drew Republican ire over his criticism of Supreme Court Justice Samuel Alito in testimony when the conservative judge was nominated to the court.

“His outrageous attack on Judge Alito convinced me that Goodwin Liu is an ideologue,” South Carolina Sen. Lindsey Graham said before Thursday’s vote. “His statement showed he has nothing but disdain for those who disagree with him. Goodwin Liu should run for elected office, not serve as a judge.”

Imagine that!  Some one with an opinion!  Does that mean a person isn’t capable of honest judgement?

Obama gave a speech yesterday at the State Department indicating support for the Arab Spring and suggesting that a dialogue between Israel and Palestine is possible but must meet certain ground rules.  One of these is controversial because it breaks with a speech given by President Bush that more or less accepted the reality of some Israel colonies in the occupied territories.  That is that the negotiations be based on the 1967  agreement which would reverse Israeli colonization of territories that occurred after the agreement.  Israel has already rejected the idea.

So while the core issues of the conflict must be negotiated, the basis of those negotiations is clear:  a viable Palestine, a secure Israel.  The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine.  We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states.  The Palestinian people must have the right to govern themselves, and reach their full potential, in a sovereign and contiguous state.

As for security, every state has the right to self-defense, and Israel must be able to defend itself -– by itself -– against any threat.  Provisions must also be robust enough to prevent a resurgence of terrorism, to stop the infiltration of weapons, and to provide effective border security.  The full and phased withdrawal of Israeli military forces should be coordinated with the assumption of Palestinian security responsibility in a sovereign, non-militarized state.  And the duration of this transition period must be agreed, and the effectiveness of security arrangements must be demonstrated.

These principles provide a foundation for negotiations.  Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met.  I’m aware that these steps alone will not resolve the conflict, because two wrenching and emotional issues will remain:  the future of Jerusalem, and the fate of Palestinian refugees.  But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair, and that respects the rights and aspirations of both Israelis and Palestinians.

Obama also made it clear that Hamas’ failure to recognize the state of Israel was a huge problem.

Now, let me say this:  Recognizing that negotiations need to begin with the issues of territory and security does not mean that it will be easy to come back to the table.  In particular, the recent announcement of an agreement between Fatah and Hamas raises profound and legitimate questions for Israel:  How can one negotiate with a party that has shown itself unwilling to recognize your right to exist?  And in the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.  Meanwhile, the United States, our Quartet partners, and the Arab states will need to continue every effort to get beyond the current impasse.

The President said that US commitment to Israel is unshakeable but the status quo is unsustainable.  The Israeli/Palestinian situation continues to the most vexing problem on the planet.  If you’re going to venture an opinion, be aware that the topic creates such tension that its discussion is actually banned on many blogs.  I’d prefer not to relive past experience myself but I thought it needed mentioning.

Lawrence Mishel of the Economic Policy Institute says “We’re not broke nor will we be”.  It seems more and more economists are fighting back on the weird suggestion that a country with a huge economy, rich people, and tons of assets can’t invest in its own future because it’s broke.  Here’s the link to the briefing paper.  This is good explanation of why we are not Greece and will not go down the Greek Road.  There are tons of nifty graphs so go check it out!!

Despite the rhetoric, it is clear that “we” as a nation are not broke. While the recession has led to job loss and shrinking incomes in recent years, the economy has produced substantial gains in average incomes and wealth over the last three decades, and economists agree that we can expect comparable growth over the next three decades as well. Between 1980 and 2010, income per capita grew 66.4%, and wealth per capita grew 73.2%. Over the next 30 years, per capita income is projected to grow by a comparable 60.6%. In other words, “we” are much richer as a nation than we used to be and can expect those riches to rise substantially in the future. So who is the we in the “we’re broke” mantra? The recession has certainly been a rough patch of road for many families, but the output produced by corporations in the private sector has already recovered to pre-recession levels, and these firms’ profi ts were 21.7% higher overall, driven largely by the 60% jump in pre-tax profi ts enjoyed by fi rms in the fi nancial sector.

Here’s why we can actually afford to invest in America and Americans!

Despite the fact that average incomes have increased substantially over the past 30 years, the federal government is currently running a projected defi cit of 9.8% of gross domestic product. As noted above, many use the deficit to support the “we’re broke” theme. But how can that be the case? How can the country have much more income, collectively, onwhich to draw, yet all levels of government are “broke” and unable to aff ord anything?

The answer is that revenue has declined substantially due to the recession and due to the Bush-era tax cuts. The Congressional Budget Offi ce projects federal revenues will be just 14.8% of GDP in the fi scal year ending September 30, 2011—by far the lowest revenue intake relative to GDP since 1951. In contrast, federal revenues totaled over 18% of GDP at the end of the last recovery (fi scal year 2007) and were roughly 20% at the end of the 1990s recovery. A largepart of the revenue shortfall can be attributed to legislated changes in taxes under George W. Bush, which lowered the revenue share by 2.1%.

As the economy recovers, the defi cit will fall as unemployment declines, as incomes and associated revenues increase, and as recession-sensitive expenditures automatically decline (expenditures for food stamps, unemployment benefits, Medicaid and other programs rise with the economic distress in a recession and fade as unemployment declines). This expected decrease in the defi cit is refl ected in CBO projections showing the defi cit declining from 9.8% of GDP in 2011 to just 3.0% in fi scal year 2015. Some of this decline can be attributed to the assumed expiration of the Bush tax cuts extended in 2010 and the inheritance tax change in 2010 (plus the R&D, ethanol, and fi rst-year depreciation tax breaks), which would total 2.9 percentage points of GDP that year. Even so, that still leaves the defi cit falling by 4.0 percentage points due to the recovery.

Texas officially joins the war on women by mandating sonograms before terminations.  This is just more harassment and costs to women seeking to exercise their constitutional rights to privacy and self-determination.  Ridiculous!

Texas Governor Rick Perry Thursday signed into law a measure requiring women seeking an abortion in the state to first get a sonogram.

Texas is one of several U.S. states with strong Republican legislative majorities proposing new restrictions on abortion this year. The Republican governor had designated the bill as an emergency legislative priority, putting it on a fast track.

Under the law, women will have to wait 24 hours after the sonogram before having an abortion, though the waiting time is two hours for those who live more than 100 miles from an abortion provider.

So, like I said, it’s the silly season which means there’s plenty of news out there that’s bound to upset people!  What’s on your reading and blogging list today?

The Latest Stupid Republican Tricks: The “Default Deniers”

Posted: May 19, 2011 | Author: | Filed under: China, Economy, Federal Budget, Foreign Affairs, Global Financial Crisis, Psychopaths in charge, Republican politics, Social Security, Surreality, U.S. Economy, U.S. Military, U.S. Politics, We are so F'd | Tags: , , , , , , | 9 Comments

GOP Leadership

{Sigh….} Is there any way to be rid of these crazies? The latest Republican nutty meme is that it will be much much better for all concerned if Congress doesn’t raise the debt ceiling and the U.S. has to either cut trillions in spending or default on its debts. From Politico:

They are the newest breed of government skeptics, the swelling ranks of Republicans who don’t believe the Obama administration when it says a failure to raise the debt limit will prove catastrophic.

And they stand ready to make negotiations over raising the cap on debt as grueling as possible, making Treasury officials and Wall Street more nervous than ever that the country could suffer an unprecedented default with consequences no one can predict.

The suspicion, which once flourished on only the conservative outskirts of economic circles, has seeped into the mainstream in recent weeks, gaining broader acceptance among establishment Republicans, even as the administration issues increasingly dire warnings.

House Speaker John Boehner (R-Ohio) validated the default deniers Sunday, saying, “I understand the doubts.” Jim Nussle, a budget director under former President George W. Bush, argued last week that “no one’s going to default” if Congress misses the Aug. 2 deadline. And Alabama Sen. Jeff Sessions, the top Republican on the Budget Committee, accused the White House of scare tactics similar to those used by the previous administration to win quick approval of the 2008 bank bailout after the markets crashed.

Via Think Progress, Rush Limbaugh yesterday responded to the Politico article by leaping aboard the GOP elephant just as it began to topple off the cliff. Limbaugh announced on his radio program that refusing to raise the debt ceiling will help the country’s credit rating.

LIMBAUGH: Today I claim the mantle. I proudly and honestly come to you today as the Mr. Big of the default deniers. We will not default on anything. And moreover, it is more likely that the country’s creditworthiness would go up around the world since we would finally be doing something to address our out-of-control spending and indebtedness if we were not to raise the debt limit. We would be perceived around the world as serious for a change, and responsible for a change. Otherwise we are headed for junk bond status.

I’m no economist, but according to Dakinikat Alan S. Blinder is a really good one, and he wrote an op-ed for the Wall Street Journal today. Here is his analysis of what could happen if the Republicans get their way on the debt ceiling.

What happens if we crash into the debt ceiling? Nobody really knows, but it’s not likely to be pretty. Inflows and outflows of cash to and from the Treasury jump around from day to day as bills are paid and revenues arrive. But at average fiscal 2011 rates, receipts cover only about 60% of expenditures. So if we hit the borrowing wall traveling at full speed, the U.S. government’s total outlays—a complex amalgam that includes everything from Social Security benefits to soldiers’ pay to interest on the national debt—will have to drop by about 40% immediately.

The bottom line is that Timmy Geithner will have to decide whether to pay soldiers and old folks or pay China other foreign creditors. I guess that’s what the Republicans are hoping for–that it will spell the end of the entire social safety net. But they don’t seem to be thinking very long-term. Do they really believe Americans will passively allow that to happen? Back to Blinder:

If and when the time comes, Mr. Geithner and his boss will have to decide. But here’s one prediction: Defaulting on the national debt will not be their first choice. After all, the statue of Alexander Hamilton at the Treasury entrance reminds Mr. Geithner every day of the importance of maintaining the nation’s creditworthiness. Even if we hit the debt ceiling, maturing obligations still can be rolled over. And I’ll bet he will bend every effort to make the interest payments, too. Unfortunately, however, when you’re 40% short, not much can be ruled out.

Exactly. Geithner is going to choose to pay China, not the elderly and disabled–that’s what the Republicans are counting on. But that will be a choice between chaos in the world economy and mass uprisings on the domestic front–or we might get both. According to Blinder a contraction in the U.S. economy like the one the Republicans are pushing us toward could lead to world-wide financial panic. According to Blinder:

…suppose the federal government actually does reduce its expenditures by 40% overnight. That translates to roughly $1.5 trillion at annual rates, or about 10% of GDP. That’s an enormous fiscal contraction for any economy to withstand, never mind one in a sluggish recovery with 9% unemployment. Even contemplating such a possibility is evidence of a dark, self-destructive impulse.

Second, markets now assign essentially zero probability to the U.S. losing its fiscal mind. They’d be caught flat-footed if the threat of default suddenly started to look real, possibly triggering a world-wide financial panic. Remember how markets reacted to the Lehman Brothers surprise? As Mr. Geithner pointed out in New York on Tuesday, “As we saw in the fall of 2008, when confidence turns, it can turn with brutal force and with a momentum that is very difficult and costly to arrest.”

And Blinder isn’t even considering what the reaction would be among ordinary Americans here at home when the economy completely tanks and there is no social safety net whatsoever.

Just Don’t Take Mine

Posted: January 15, 2011 | Author: | Filed under: Federal Budget, U.S. Economy | Tags: , , , | 13 Comments

I wrote a little on the disturbing level of economic illiteracy I see throughout the country yesterday.  A CBS Poll came out on what Americans want done with Federal Spending and it just screams stupidity.  The overwhelming majority of people want spending cuts in the Federal Budget, but they can’t name many things that they want cut.  It seems like there’s this resounding chorus out there of give me my taxes back and do cuts on imaginary spending. Then, it’s just don’t cut anything I use or think is important. I’m going to cite this last paragraph in the article .  It’s probably the most relevant.  (There’s more discussion links on this at Memeorandum.)

Most Americans do not know exactly how the government spends its money. For example, when asked what percent of the budget goes to earmarks, 41 percent said they make up less than 20 percent of the budget, 13 percent said 20-50 percent, 4 percent said more than 50 percent and 42 percent didn’t know. Earmarks actually make up less than one percent of the budget.

I always hear students say they want to quit giving money away to other countries too.  We give less than one half percent of our budget to other countries.  The best place to look for budget information is the Congressional Budget Office website.  That’s where I got the graph you see in the upper right hand corner.  That’s a comparison of Federal Spending (green) and Federal Incomes (blue) since 1980.  The gap between the two at any one point in time is the federal deficit for that year.You can distinctly see the period during the Clinton Budget Surpluses because that’s where the blue lines is above the green line.  All other periods show more spending than revenues.   The Reagan and Bush years were years of explosive spending growth.  You can also see the huge gap that started around 2008 when the Great Recession took hold.  Nearly each of the down turns recently has been due to huge tax breaks combined with bad economies.

A pie chart shown on a Examiner.com breaks down the expenditures by the funded Department.  It also adds Social Security into the mix which is the number one federal outlay. (Ryan Witt’s chart analysis here. Read the comments and embrace the number of people that need to go back to school.)  Social Security–however–is sustained at the moment by more revenues than outlays.  The Department of Defense comes after that.  It gets about 19% of the overall budget.  Right now, because of the ‘cyclical’, mandatory spending that occurs due to our bad economy and our high unemployment, you can see that unemployment/welfare payments mandated by law come after that (16%), followed by Medicare which is also offset by payroll taxes at the moment (13%) then Medicaid/SCHIP funding (8%). The Department of Health and Human Services gets about 8%.

The next biggest expenditure is paying the interest on the National Debt.  Thankfully, interest rates are low so that amounts to around 5% currently.  You can compare this pie chart to the one below and see how lower interest rates combined with higher outlays really helped to push that percentage down.. The next most noticeable part is the Transportation department that gets about 2% of the budget. Most of the remaining major Departments like Homeland Security, Energy, Education, etc. get some where around 1-1 and 1/2%.  Veteran’s Affairs gets a fairly noticeable slice too albeit not huge.

I’ve also put a pie chart of Federal Outlays  for 2009 to  the left that is some what more general. Notice how huge the Treasury budget was because of TARP (now mostly paid back) and the other bailouts.  There are several reasons that the budget deficit has been so bad the last few years.  The primary reason is the bad economy because that forces revenues down and outlays up.  The second reason is the Bush taxes cuts that were just extended and expanded for the next two years.  We’re basically spending at relative levels right now that we’ve not seen since World War 2.  We are of course funding two occupations/wars and a ‘war’ on Terror. Some people want to conveniently forget that.   When the economy finally improves and we do actually shut down Iraq and Afghanistan, a lot of our budget headaches will go away.

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