Government borrows 46 cents for every dollar we spend
It should be big news, but in a world turned upside down it is not. On Friday, the Washington Times reported that "the federal government borrowed 46 cents of every dollar it has spent so far in fiscal year 2013, which began Oct. 1."According to data from the Congressional Budget Office, during the first two months of the fiscal year the federal government spent $638 billion. That's a whopping 14% increase over the first two months of last fiscal year, which itself was one of budgetary bloat. The U.S. government is now spending an average of $10.45 billion per day or a staggering and stomach-turning $435.8 million per hour.
Focusing on the borrowed portion alone, at that current burn rate the national debt is growing by $4.8 billion every day. Put another way, the federal government is spending $200 million per hour "that is doesn't have - 24 hours a day, seven days a week, including Thanksgiving, Christmas and Ramadan."
As a point of reference, federal outlays in the most recent two months alone exceeded the combined annual profits of the top 100 largest companies in the Fortune 500.
According to the Times, the "higher spending on mandatory items such as Social Security, Medicare and interest on the debt led the way in boosting spending compared with the previous year." As Mark Steyn has pointed out, at the rate this government is amassing debt within a decade we will be paying more for interest payments (not debt service, rather interest only) than we spend on our military.
Mitch McConnell and John Boehner, are you listening?
For all the hubbub about an impending "fiscal cliff," at the current federal spending and borrowing levels we have already gone over the cliff and are free-falling. The only questions are when and how hard we will land. Some will say it doesn't feel that way. Maybe so, but as the old saying goes it's not the fall that kills you, it's the sudden stop. We are in what Peter Schiff and others have correctly described as a "government bubble." And bubbles pop.
No household, business, or other entity can sustain such profligacy for long. While governments can paper over and defer the inevitable a little longer, they too are not immune to the laws of economics. Those who claim otherwise are either dependent on the continuation of such excess for their own gain or, for whatever reason, want to see this country, as founded, collapse.
Liberals who claim we have a revenue problem are wrong. Federal revenues currently are near record levels and revenues so far this fiscal year are "up by $30 billion compared with last year, or about 10 percent." But wait, liberals will counter, there are more people than ever before too, so talk of high federal revenues is misleading. Not so. Since 1992 the U.S. population has increased by 23%. During the same 20-year period, federal receipts (as adjusted for Uncle Sam's debasement of our currency via the printing of money, aka inflation) have increased by more than twice that amount or 48%.
It is on the spending side of the ledger where the problem lies. Federal outlays have surged by 71% since 1992 (adjusted for inflation) or three times the rate of population growth. And besides, even in 1992 - and more so today - the federal government's annual budget included much that was arguably, if not outright, extra-constitutional.
The current budget-related debates and proposals emanating from Washington, D.C. lack seriousness, even sanity, and the parties involved know it. They are betting most people won't catch on or, for that matter, care. The fact of the matter is federal spending must be cut significantly and soon if our country is to survive. This means real/actual across-the-board cuts and eliminations, not merely decreases in the rate of spending growth.
As for so-called "revenue enhancements," not a single additional dollar in taxes should be extracted from current taxpayers unless it is derived from real economic growth: from higher profits, more people working (not for government), and an increase in economic activity. Within the prevailing wealth-looting racket, if anyone believes that an additional dollar sent to Uncle Sam will reduce the deficit or pay down the debt rather than result in even higher spending and more debt heaped on the backs of current and future generations of Americans, I have some Solyndra stock to sell them.
The looming crisis of student loan debt
A college degree was once synonymous with academic excellence and workforce readiness. Today, it seems synonymous with debt and underemployment.
Last week, the Federal Reserve Bank of New York reported that student loan debt increased to $956 billion,
more than auto loan debt or credit card debt. More worrisome, the
student loan 90-day delinquency rate increased to 11% this past quarter
and for the first time exceeds the "serious delinquency" rate for credit
card debt.
Student loan debt is
reaching bubble-bursting levels. By comparison, in October 2007, the
start of the subprime mortgage crisis, 16% of subprime mortgages were 90
days delinquent, according to Federal Reserve Chairman Ben Bernanke. By
January 2008 it accelerated to 21%. If the economy heads off the
fast-approaching fiscal cliff and tax rates spike for lower- and
middle-class Americans, it may accelerate student loan defaults to
crisis levels. The big banks got their taxpayer bailout; taxpayers may
soon be on the hook for another.
Even if the markets
manage to avoid another debt crisis, the mountain of student loan debt
is already taking its toll on a weak economy.
In September, Pew Research Center reported that a record one-in-five households owe student loan debt. The average student loan debt in 2011 was $23,300.
Unlike credit card debt
or automobile loans, student loans are virtually impossible to
liquidate, even after declaring bankruptcy. So 20- and 30-year-olds
buried under student loan debt are forced to put off other purchases
crucial to the health of the economy, like buying a car or home or
investing in the markets. Many are moving back in with their parents and
delaying marriage and starting a family, two of the most vital building
blocks to a healthy and prosperous economy. Valuable human capital is
withering before it can even set its roots.
The problem now rests in
the hands, and wallets, of taxpayers. In 2010, the federal government
consolidated its power in the student loan industry so it could
eliminate private middlemen and directly issue and guarantee loans. By
2011-12, the federal government issued 93% of all student loans.
By nature, student loans
are inherently risky. Students have hardly any credit worthiness. But
the government is making a bad situation even worse. Federal lenders are
notoriously lax. For example, they don't distinguish between loans
to students pursuing highly employable fields such as health and
education, and students pursuing majors that have a high unemployment
rate, like architecture and arts.
And yet, the federal
government continues to flood the higher education market with more
loans. In 2010, the Department of Education distributed $133 billion in student aid. In 2011, it was nearly $157 billion, a 17% increase. As I've said before, these increased subsidies have not curtailed student loan debt or tuition costs.
What's driving this debt
crisis is a vicious cycle of bad lending policies eerily similar to the
causes of the subprime mortgage crisis. Over the past 50 years, it has
become conventional wisdom that everyone should go to college. High
school guidance counselors and college admissions offices preach it,
parents believe it and politicians cater to it. With near-universal
demand and parents willing to pay or borrow almost anything to get their
son or daughter through college, colleges and universities can drive up
their prices.
When tuition prices
rise, the government subsidizes the difference by increasing federal
loans. But these easy loans, many of which are increasingly going to
middle-class students, only increase the price ceiling that colleges can
charge, thus completing, or starting, the cycle.
Of course, these aren't
the only problems in today's higher education financial crisis. Many
colleges and universities are failing at their most basic
responsibility: education. Students are graduating ill-equipped for the
needs of the modern workforce. More than half of all college graduates
in 2010-11 were unemployed or dramatically underemployed. Many employers rate college graduates today as unprepared or only somewhat prepared for the job.
Reform is needed at many
levels. Money-hungry institutions should be subject to more
accountability and transparency; uninformed consumers should be aware of
the alternatives to four-year colleges like trade and technical
schools; and irresponsible federal lending needs to be reined in.
But above all, American
society at large must stop pushing the notion that everyone should, or
deserves, to go to a four-year college. It took a recession and massive
taxpayer bailout for Americans to realize that not everyone should, or
deserves, to own a home. We can't afford to learn this lesson the hard
way again.
http://www.cnn.com/2012/12/06/opinion/bennett-student-debt/index.html?hpt=op_t1
Understanding $16,000,000,000,000 in Debt
I don't understand how much $16 trillion ($16T) of debt is. So, to help myself, I break it down to terms I can understand.- There are about 254,000,000 registered vehicles in this country (2009 data). Big number this is. But dividing the number into $16T would give a valuation of about $69,000 for each of them. This is somewhat higher than the average cost of automobiles on the road. Another way to put it is to say the U.S. national debt could replace the entire U.S. fleet of automobiles with, for example, brand-new, fully equipped Lexus ES460s. Nice cars.
- The total of state budgets in 2010 was about $666B. Dividing into $16T gives about 24. This means the $16T national debt could completely cover all state budgets for about 24 years.
- The total annual foreign aid budget of the U.S. is reckoned to be about $54B. Dividing this into $16T gives about 296, meaning that the national debt of the U.S. could cover all foreign aid for almost three centuries.
- The population of the United States is currently estimated at 312,780,968. Dividing this into $16T gives the current encumbrance to each citizen of about $51,000.
- In 2008, 64.3 billion gallons of gasoline were consumed in this country. It is surely higher now. At $3.50 per gallon, this implies a total cost to the U.S. consumer of about $225B. Dividing into the $16T yields about 71, implying that the U.S. national debt could pay for all gasoline consumed in the USA for the next 71 years -- assuming, of course, that annual consumption remains constant.
- In the month of October 2012, the monthly cost of home food for a family of four (liberal plan from the USDA) was about $1,100, making the annual cost about $13,200. Multiplying this by the possible numbers of families of four (total population divided by four), the total annual home food costs to all citizens are roughly $1T. Dividing this into $16T implies, in round terms, that the U.S. national debt could pay all home food costs for the next 15-plus years. If we all ate with the USDA thrifty plan, the $16T U.S. national debt could pay all home food costs in the United States for the next 29 years.
That was fun. So $16T is a really huge amount. I still don't understand it much beyond that.
There is a foundational lesson in all this. The number 16T in dollars or any other measure is fundamentally beyond the comprehension of most of us. And I work with big numbers all the time. What is not taught in the schools these days, what is not anywhere the formal curriculum, and what is fully unknown to almost everyone is just what these big numbers mean, and how huge they really are. Sure, it is easy to say that the speed of light (180K mps) translates into 180(mps) x 60(s/m) x (60[m/h] x 24[h/d] x 365[h/y] = 5,865,696,000,000 miles per year (~6 trillion miles). But who really knows what this means -- in a visceral sense?
Getting back to the $16T above, we caution two principal groups: Republicans and Democrats. Neither side really understands anything about the true magnitude of $16T.
1. The Republicans: The public does not understand how much money this is. Do you? Don't compare with the GDP. This is making a comparison of a quantity people don't understand with a quantity people don't understand. It you wish to make a point, explain to folks how much money this is. Do it in terms they understand. My goodness, don't explain in analogy to Greece. Most people don't know where Greece is, much less care about the Greeks' circumstances.
2. The Democrats: Be cautious about borrowing more money. Understand the magnitude of what is already encumbered. Think about this amount in terms you understand. Understand the profound and massive effort required for the pay-back.
3. To both parties: Even if the economy came roaring back with whatever policy for job growth is promoted and enacted, the $16T debt is virtually beyond the capacity for repayment. This country seems to be faced with default, or ultra-severe tax penalties on the next couple of generations. For those aged over 50, the consequence is not that great. The younger groups will be hit especially hard.
Obama Slams Right-to-Work at Fiscal Cliff Event
President Barack Obama sharply criticized efforts in Michigan to make the state the second right-to-work state in the Midwest in speech Monday in Redford, Mich.
“What we shouldn’t do–I just gotta say this–what we shouldn’t be doing is trying to take away your rights to bargain for better wages and working conditions,” Obama said in the speech, which was meant to be on fiscal cliff issues. “We shouldn’t be doing that.”
“You know, these so-called right-to-work laws don’t have to do with economics, they have to do with politics,” Obama continued. “What they’re really talking about is giving you the right to work for less money.”
Employees in Michigan are required to join unions and pay dues in unionized shops or pay an agency fee. The Washington Free Beacon reported on Michigan Republican efforts last week:
(The membership requirement) system has helped make Michigan one of the most heavily unionized states in the country. More than 17 percent of workers belong to unions, 50 percent higher than the national average. [...]
Republican Gov. Rick Snyder has passed a number of labor reforms since taking office in 2011 but had previously ruled out right-to-work legislation. He reversed himself on Tuesday, announcing that the reform would be part of his agenda.
http://freebeacon.com/obama-slams-right-to-work-at-fiscal-cliff-event/Ending mandatory union dues has taken a large toll on unions in other states. Wisconsin’s largest teacher unions have seen membership drop 30 percent since Gov. Scott Walker made dues voluntary for state workers. They are considering a merger to reverse the loss and preserve their political clout.
Jamie Foxx Jokes About Killing 'All The White People' In His New Movie
http://newsbusters.org/blogs/noel-sheppard/2012/12/10/jamie-foxx-jokes-about-killing-all-white-people-his-new-movie
Farrakhan Channels the Grinch: Santa Claus Is a Damaging Lie That Teaches Kids ‘to Look to White People’ (& Christmas Trees Are ‘Wicked’)
On Tuesday morning, the Minister Louis Farrakhan delivered a sermon in front of the U.S. Virgin Islands Legislature in St. Thomas.Farrakhan, who is currently on a tour throughout the Caribbean, had a plethora of messages for his audience. The Nation of Islam leader, who fluctuated between speaking in his own voice and mimicking an Island accent, warned those in attendance about the dangers of lying to their children about Santa Claus, while also taking aim at the supposed “evils” of the traditional Christmas tree.
In addition to claiming that kids end up loving Christmas’ most revered character more than they do their own parents, he also proclaimed that teaching belief in Santa causes children “to look to white people for what mommy couldn’t give them.”
“It’s Christmas now. Oh Christmas is coming, you know,” Farrakhan said. “He’s comin’ down the chimney with his big fat self and he gonna leave…Santa comin’ and he’s gonna leave under a tree gifts for your child and your child wake up the next morning ‘Oh! Santa was here last night?!’”
Farrakhan made these comments after deriding the lies that teachers and parents often tell children, going on to say that his own mother taught him to believe in Santa. Farrakhan recalled being young and finding himself looking for signs of the gift-giver in his bathroom and throughout his home, but to no avail (a negative experience that has apparently stuck out in his memory).
“A lie has a negative effect on anyone who is made to believe what is false. There’s no such thing as Santa Claus,” he continued, urging the audience to embrace the purportedly damaging story about the jolly Christmas staple. “Why don’t you tell your children daddy and mommy bought these, cause’ what you’re doing is — you are literally educating your children to look to white people for what mommy couldn’t give them.”
Farrakhan says that the result of this notion is that kids end up loving Santa Claus more than they revere their own parents. But Santa wasn’t his only target. The Christmas tree, too, was on the minister’s list of evil Christmas traditions.
“Now you got a big tree. How does a tree figure in the life of Jesus…go home and open your Bible to the tenth chapter of Jeremiah — you look and see how the scripture says that the wicked cuts a tree down out of the forest and deck it with silver and gold,” he explained. “What you’re following is a pagan ritual that was started in Rome and Babylon.”
Here, Farrakhan is speaking about Jeremiah 10:1-5, which reads:
“Do not learn the ways of the nationsWhile some have claimed that this verse is speaking about Christmas trees, others reject such a notion. Americans do not worship the trees they bring into their homes — something that is clearly being done by those mentioned in these verses.
or be terrified by signs in the heavens,
though the nations are terrified by them. 3 For the practices of the peoples are worthless;
they cut a tree out of the forest,
and a craftsman shapes it with his chisel. 4 They adorn it with silver and gold;
they fasten it with hammer and nails
so it will not totter. 5 Like a scarecrow in a cucumber field,
their idols cannot speak;
they must be carried
because they cannot walk.
Do not fear them;
they can do no harm
nor can they do any good.”
Also, what is being discussed in Jeremiah is an idol and not a decorated tree (there’s no indication at all that the people being spoken about in the Bible were worshiping Christmas trees).
http://www.theblaze.com/stories/farrakhan-channels-the-grinch-santa-claus-is-a-damaging-lie-that-teaches-kids-to-look-to-white-people-christmas-tress-are-wicked/
From The Heritage Foundation:
Stop Meeting with the U.N. on Climate Change
Two days ago, the 18th United Nations conference on climate change wrapped up. As they did at the previous 17 conferences, developing nations demanded that the United States and other developed countries pay them for the climate’s effects.
In short, the joke’s on us. And these U.N. conferences are becoming increasingly irrelevant.
Poor nations, including small islands, are seeking a new “international mechanism” to have developed nations pay for storm damage to their countries. This is based on the assumption that global warming is causing stronger hurricanes, typhoons, and the like, which is still unproven.
Heritage’s Brett D. Schaefer, Jay Kingham Fellow in International Regulatory Affairs, and Nicolas Loris, the Herbert and Joyce Morgan Fellow, have a simple message for America’s leaders: “the U.S. is wasting millions of taxpayer dollars attending and financing these conferences.”
The main result of this year’s conference was extending the Kyoto Protocol, the international climate change agreement that has been in force since 1997, through 2020. The United States has never signed on to this agreement, which restricted greenhouse gas emissions in 37 industrialized countries.
But the Kyoto agreement has never put restrictions on China and India—two densely populated countries with growing economies—and other nations with emerging economies. Schaefer and Loris note that “even with perfect compliance and U.S. participation, Kyoto would not significantly arrest projected global warming.”
Canada, Japan, New Zealand, and Russia opted out of the new extension last week. The Associated Press reports that this means the treaty now “covers only about 15 percent of global emissions.” As Schaefer and Loris explain:
[T]he basic approach is unworkable. The Kyoto Protocol essentially placed the entire economic burden of addressing climate change on a few dozen countries while asking nothing from more than 150 countries. Perhaps this makes sense if the industrialized countries alone could address the issue by reducing emissions, but that is impossible.
…For a number of reasons—including sluggish economies and a shift toward energy sources (such as natural gas, nuclear, or renewable energy) that emit fewer greenhouse gas emissions—most industrialized countries have seen their emissions stabilize or fall. In fact, U.S. emissions are at their lowest level since 1996, according to the U.N.
While the U.S. has reduced its emissions, other countries are busy increasing theirs—and demanding that the U.S. pay for storm damage around the world. China passed the U.S. as the largest source of emissions in 2006, and by 2009, its emissions were already 45 percent higher than America’s.
Instead of continuing this futile exercise, the U.S. should pursue more serious steps on its own, Schaefer and Loris write. America should:
- Undertake independent efforts to more accurately determine the severity of climate change and verify U.N. claims.
- Work with a smaller group of nations through informal arrangements such as the Major Economies Forum to undertake appropriate steps that are both cost effective and effective in reducing warming.
- Refrain from attending future U.N. climate change conferences and call for a moratorium on conferences that emphasize financial transfers and reinforce the flawed, ineffective Kyoto methodology.
- Resist and cease attempts to address climate change unilaterally. This includes removing onerous and unnecessary regulations on fossil fuels that are driving up the cost of energy, stopping wasteful and ineffective attempts to subsidize carbon-free energy sources, and preventing an implementation of a carbon tax. Attempting to address greenhouse gases unilaterally comes at great cost to the taxpayer and energy consumer for no meaningful environmental impact.
Also reads:
Obama and Slavery
This is an excellent but long article. Too long to post here but worth the read.
http://www.americanthinker.com/2012/12/obama_and_slavery.html
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