Tag: National Debt

So You Want To Save The Nation’s Money?

By now even a deaf homeless guy in Peoria knows the debate on the deficit and all the worthless plans to save some cash…..most of the savings will come on the backs of the poor and middle class……now there is a good idea if you truly want a two class system…….but I got to looking around for some savings that would not add to the woes of the working people in this country…..the very people that the government says they are protecting, at least the next generation……and if you believe that…..I have a bridge in Brooklyn that is for sale….any takers?

My short search on-line came up with two possible savings programs…..

(Newser) – The Abrams tank sounded pretty remarkable in reports chronicling its arrival in Afghanistan more than two years ago: The 68-ton machine is propelled by jet engines and has a main gun that can destroy a house from more than a mile away. But since its debut, lawmakers from both sides of the aisle have been pushing to upgrade the tank, devoting $436 million to the cause. Except as the AP explains, senior Army officials keep telling Congress they’re not interested. “If we had our choice, we would use that money in a different way,” says the Army’s chief of staff.

The Army says it doesn’t need to buy more tanks until 2017; Congress wants the Army to buy earlier models that have been upgraded with things like better microprocessors and color flat panel displays, at a cost of about $7.5 million each. “The Army is on record saying we do not require any additional M1A2s,” said the deputy director of the Army budget office this month. And while tank-proponents Rep. Jim Jordan and Sen. Rob Portman of Ohio insist our safety is at the root of it all—”we are supposed to spend taxpayer money in defense of the country,” says Jordan—the AP notes the country’s only tank plant happens to be located in Lima, Ohio. Such a pet project is nothing new, but the Abrams example is notable due to the certainty of the Army’s position. “When an institution as risk-averse as the Defense Department says they have enough tanks, we can probably believe them,” says a director with Citizens Against Government Waste.

And the next possible savings is in the international realm……..

Source: All Gov.

U.S. officials have long complained about corruption in Afghanistan’s government—and now it’s come out that one of the biggest contributors to said corruption was the United States itself.

In one of the most disturbing tales yet of payoffs, the Central Intelligence Agency (CIA) spent more than a decade delivering tens of millions of dollars in cash to the office of President Hamid Karzai, according to an investigation led by Matthew Rosenberg of The New York Times.

The newspaper learned that American dollars—what one former Afghan official called “ghost money”—were put into suitcases, backpacks and even plastic shopping bags and dropped off in secret in the hopes it would buy influence with Karzai and warlords.

Instead, the payments undermined U.S. efforts to help Afghanistan develop a legitimate, democratic government.

“The biggest source of corruption in Afghanistan,” one American official told the Times, “was the United States.”

Mohammed Zia Salehi, the administrative chief of the Afghan National Security Office in charge of distributing the CIA cash, was arrested in July 2010, accused, among other transgressions, of smuggling cash out of the country. He made a call to Hamid Karzai and was instantly released.

According to Matthew Rosenberg, Salehi, referring to the contradiction of the U.S. government trying to fight corruption in Afghanistan, while at the same time forking over millions of dollars of cash, said, called himself, “an enemy of the FBI and a hero to the CIA.”

In a follow-up story, Karzai acknowledged the CIA payments, claiming the money was used for “various purposes.” Those close to Karzai said the cash went to pay off warlords, lawmakers and others whom the president courted for support. Karzai shrugged off the controversy, noting that his Office of National Security still receives monthly cash payments from the CIA. Later, his office issued a statement that some of the money was used to treat wounded soldiers, but others suggested that it wasn’t wounded soldiers who were receiving “treats.”

Granted these two programs will not solve our deficit problem, but any savings will help and these two we can live without….now ask yourself why these types of expenditures are seldom mentioned when looking for solutions……

Here’s a flash for you deficit hawks…….food stamps is NOT wasteful spending……buying tanks nobody wants IS!

How about my readers….any ideas on how to lessen the deficit?

Debt Debacle

Okay ladies grab your bloomers…..the debt theater is set to begin…we will hear all about spending, debt ceiling and anything else they care to throw at the cameras…….we will hear person after person on the Tube tell us all about how crappy the other side’s position is……and we will pick our sides by what our fav commentator has to say on the subject…….

But before we do that…..do you know what the debt ceiling is?

Once a little-known aspect of the U.S. government’s fiscal management process, the debt ceiling exploded into the public consciousness following the intense debate that took place in the summer of 2011. As its name would suggest, the debt limit is simply the maximum amount that the U.S. government can borrow at any given time. Currently, the limit is set at $16.394 trillion. Each year, the government spends more than it takes in, and this gap must be funded with debt, or more specifically, bonds issued by the Treasury. By law, however, the Treasury can’t issue new debt once the country is at its borrowing limit – and this limit, or ceiling, needs to be agreed to by Congress.

The debt limit doesn’t authorize new spending; instead, it provides the funding to pay for spending commitments that Congress has already made. Since the Treasury can’t issue new debt once the limit has been reached, the government would be forced to slash spending if it exceeds the borrowing limit. The result would be a partial government “shutdown” and a debt default (or the failure to make interest and/or principal payments on time).

Let me emphasize one point…….

The debt limit doesn’t authorize new spending; instead, it provides the funding to pay for spending commitments that Congress has already made….have you got this?

Just thought I would help you understand the debt ceiling issue before it becomes an endless stream of one liners, and sound bites…….

Personally, I do not see the need for the debt ceiling…..I mean since it has been around it has NOT done anything to curb spending….and that is a whole other post……but to tie debt ceiling to spending talks is just a political game…….and all it will do is give the media something to fixate over for a couple of months and in the end…….after all the drama they will kick it down the road (damn…I hate that term….but in this case sums up the antics really well)……and we will await the next round of total lack of seriousness by our politicians…….makes me proud.

Flaws In Simpson-Bowles

A debt plan to the Right……a debt plan to the Left…..and then there is Simpson-Bowles…..I have signed on to the plan that was come up with by the Simpson-Bowles Commission….we need answers and we definitely need solutions…..I liked the plan a lot….beat the holy Hell out of the alternatives that have come from the mouths of our elected officials.  Recently reading some papers and such from the Economic Policy Institute, I found a critique of Simpson-Bowles written by Ethan Pollock and I thought I would give you his concerns on the plan….after all I want to be fair……..

1) It would weaken the economy by cutting way too fast

The proposal admits that Congress should not cut too soon “in order to avoid shocking the fragile economy,” but addresses this by “waiting until 2012 to begin enacting programmatic spending cuts, and waiting until fiscal year 2013 before making large nominal cuts.” Given the current weak state of the economy, it’s clear that this timetable was way off. But it’s not like this was unexpected: In Aug. 2010 (three months before the Bowles-Simpson proposal was released) the Congressional Budget Office projected that the unemployment rate would be still be 8.4 percent in fiscal year 2012. Of course, it was possible that the economy would outperform this projection, but it was also possible it would underperform. Given this uncertainty, the proposal should have included an economic trigger and not just a simple-minded timeline—for example, the cuts would only take effect if the economy was experiencing healthy growth and well on its way to full recovery. At the time, EPI had recommended this trigger be set at 6 percent unemployment for six months, which in retrospect looks quite prescient.

2) It had an unbalanced ratio of spending cuts to revenue increases

The advertised ratio of spending cuts to revenue increases was 3-to-1. This isn’t totally accurate: Excluding interest savings (which are a function of both spending and revenue decisions) and including the additional revenue assumed in the baseline (i.e., the assumed conditions against which the proposal is measured) from the expiration of the high-income Bush tax cuts, the ratio was closer to 55-to-45.

But that’s still too heavily weighted towards spending cuts. Over the last two decades, budget deals have skimped on tax increases in favor of heavy spending cuts, and the most recent deal—the Budget Control Act—was 100 percent spending cuts. Furthermore, the Bush tax cuts themselves account for nearly half of the total debt accrued during this period. Finally, spending cuts exacerbate the massive and growing income inequality in this country by generally falling on middle- and low-income households (Paul Ryan’s budget, for example) while federal tax increases can be designed to ensure that high-income individuals pay their fair share.

3) A completely counterproductive and politically-driven revenue cap

As a policy matter, the revenue cap that Bowles-Simpson proposes—21 percent of GDP—makes no economic sense. Remember, deficit reduction packages are supposed to reduce the deficit. Yet this provision would “prevent” future Congresses from reducing the deficit through tax increases above 21 percent, which would effectively rule out the federal revenue levels that nearly every single other developed country already achieves—and that rising costs of health care provision all but guarantee the United States will need in coming decades. The best thing to say about this provision is that there isn’t an enforcement mechanism, which also suggests that even its authors didn’t think it was good policy.

4) Inexorable cuts to public investments

The proposal doesn’t explicitly cut items like education, infrastructure, and research and development, but it does prescribe funding levels for the broader non-security discretionary (NSD) portion of the budget that houses nearly all non-defense public investments. As my report last year shows, it is pretty much impossible to make drastic cuts to NSD without cutting public investments.

So why do public investments matter? Because the whole economic point of deficit reduction is to improve the living standards of future generations by ensuring that we do not pass onto them high levels of debt. But financial debt isn’t the only kind of debt that we can pass on to them. For example, failing to maintain our infrastructure and bequeathing crumbling roads and bridges is also a form of debt. So is providing poor prospects for obtaining a decent education. Reducing the debt load on future generations by cutting an investment in those same future generations doesn’t make them any better off, and thus negates the entire point of deficit reduction in the first place. Given the high returns of public investment, it is likely the net effect on these generations will be strongly negative.

5) It would undermine retirement security by cutting Social Security

The Bowles-Simpson proposal wouldn’t only cut Social Security benefits, it would do so in a way that harms the middle class. According to the Social Security Actuary, medium-income retirees would see their benefits drop by 4 percent for those who retire in 2030 to nearly 20 percent for those who retire in 2080. This is largely a function of two separate cuts, both of which fall on the low- and middle-class: raising the retirement age and using an alternate method to calculate cost of living adjustments, the so-called “chained CPI.”

Proposed cuts to Social Security need to be put in the context of broader retirement security. Social Security represents one of three sources of retirement security, the other two being defined benefit pensions and household savings (IRAs, 401(k)s, real estate, etc.). But private savings do a poor job of providing actual security—just ask a near-retiree how their nest egg fared after the financial collapse—and it’s unclear how much savings the average household can accrue in the first place when median wages continue to stagnate. Further, defined benefit pensions are becoming less and less common as more and more companies choose to drop them in favor of defined contribution plans (401(k)s or similar plans) which, again, provide little actual security against economic volatility. Social Security is the last reliable source of true retirement security for the middle class, and that means it’s more important than ever to protect it against cuts like these.

So yes there are draw backs or flaws, if you will, in the plan…..but to be honest….it is far superior to anything that I have heard or read coming from Washington….solutions need to be found and instead of working on that….our elected “people” and I use the term loosely…..play games and point fingers one to another and all the while the economy goes down the drain….and each one of them will blame the other……sorry but like the tango it takes two parties to dance.

Who Really Owns The US Debt?

it is election time and we hear from the Right about the evils of China….first, they are stealing American jobs…that is an oversimplification….the jobs are given away…not stolen….second, those Chinese devils own massive amounts of American debt….so in essence they are our creditors…….let us look at the debt thing before you go out and start believing the Mitt tale on China….

The recently released Federal Reserve Flow of Funds report for all of 2011 reveals that Federal Reserve purchases of Treasury debt mask reduced demand for U.S. sovereign obligations. Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis. This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.

It is true that the U.S. government has never been more dependent on financial markets to pay its bills. The net issuance of Treasury securities is now a whopping 8.6% of gross domestic product (GDP) on average per annum—more than double its pre-crisis historical peak. The net issuance of Treasury securities to cover budget deficits has typically been a mere 0.6% to 3.9% of GDP on average for each decade dating back to the 1950s.

But in recent years foreigners and the U.S. private sector have grown less willing to fund the U.S. government. As the nearby chart shows, foreign purchases of U.S. Treasury debt plunged to 1.9% of GDP in 2011 from nearly 6% of GDP in 2009. Similarly, the U.S. private sector—namely banks, mutual funds, corporations and individuals—have reduced their purchases of U.S. government debt to a scant 0.9% of GDP in 2011 from a peak of more than 6% in 2009.

The Fed is in effect subsidizing U.S. government spending and borrowing via expansion of its balance sheet and massive purchases of Treasury bonds. This keeps Treasury interest rates abnormally low, camouflaging the true size of the budget deficit. Similarly, the Fed is providing preferential credit to the U.S. government and covering a rapidly widening gap between Treasury’s need to borrow and a more limited willingness among market participants to supply Treasury with credit.

Read More…

Looks like all the chest thumping in the GOP ranks, at least at this election time, may be just another blowjob handed to the voter……please spend a little time checking the issues that will decide this election…please become an informed voter……..please help save this country from itself!

While You Were Sleeping

The little dicks in Washington ruined my couple of days of Zen…..and the best they could do is the deal we have now……….

The Grand Deal has been done!  (Coming to Reality TV near you)…….

“Now, is this the deal I would have preferred? No,” Obama said. “But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year.”

The still-unreleased legislation would slice more than $2 trillion from federal spending over a decade and permit the nation’s $14.3 trillion borrowing cap to rise by up to $2.4 trillion, enough to keep the government afloat through the 2012 elections — a key objective for Obama, whose poll numbers have sagged as the summertime crisis dragged on.

Both parties in Washington have joined hands and come up with a deal that will save America from itself……funny how that worked, huh?  And just in time for the Asian markets to open….go figure!  It took months upon months to come up with this deal……and the rest of the deal needs to be worked out……..and this is the best they could do…….they caved!

It sounds like a deal that was offered up back in April (I believe)……..basically it is the cut, cap and balance that I wrote about for the last couple of days…..and guess what?  They will have a committee to study what and where to cut in the future……(what a blowjob)………that is what they do….they have committees to study things and while they study the middle class disappears……and the super committee for the study has already been done!  It is called the Simpson-Bowles.  Why do we need another one?

What do you want me to say?  This whole deal making process is a fraud….that is right….I said FRAUD!

…..the debate surrounding the debt ceiling, spending cuts and the like is nothing more than smoke and mirrors.  There is no real debate going on as it is just staged theatre between two factions of a one party system.  There is zero difference between both the Republican and Democrat parties as for decades they have continued supporting this phony monetary system that has bankrupted the nation and made the American people debt slaves.  As a sovereign entity the United States Treasury could simply issue its own currency free from the burden of debt or interest payments and use that to pay off its debts.  Abraham Lincoln did this by financing the Civil War through the issuance of Greenbacks.  To reiterate, a sovereign entity does not need to borrow from the Federal Reserve or any other lending institution when it can issue its own currency.  The fact that not one politican or one media pundit has brought up this fact shows that nobody is interested in truly resolving this crisis and are only interested in continuing the status quo.

This was a manufactured crisis…..and it takes a sick mind to do so…..and slip it to the middle class….yet again!

Remember priorities have been protected!   And YOU are NOT one of those priorities!

Addendum:  On word of the deal stocks jumped and gold fell……see priorities protected!  That is what this charade was all about the whole time……happy now?

The “Gang Of 6” Proposal

There seems to be some good news coming from Washington…..first of all, it is NOT that the people are happy with their Reps…..

When asked how they felt about the federal government, 80 percent of poll respondents said that they felt dissatisfied or even angry about the work the government is doing. The last time such a peak of ill will was felt was during 1992′s economic slump, under President George Bush’s leadership.

This is something that could impact the 2012 election…watch and learn…..

The happy is coming from the negotiations of the “Gang of 6″….they 3 Repubs and 3 Dems, that have come up with  a plan that the Prez seems to like and the media seems to like and the Reps are torn…..but there are other views of this plan and I have read one that I will agree with after hearing all the proposals within the Gang of 6 deal…..

This was written by jcase for a Google discussion board……..

The plan is said to be “balanced,” meaning there will be big cuts in
spending plus some revenue increases from closed loopholes and
abandoned deductions like mortgage interest. That’s alongside, of
course, an agreement to raise the debt ceiling and not revisit it until
after the 2012 elections.But the deal is also a big step in the direction of Austerity Economics
– the lunacy of fighting recessions with more layoffs.

Cuts in basic entitlements – Social Security, Medicare, Medicaid – will
not drive more customers into the empty parking lots in stores across
America, nor fill up the order books of manufacturers. Those empty
parking lots and order books are the number one and two reasons why
economic recovery is sputtering.

The framework that says debt is more important than jobs is
fundamentally backwards. The president’s deficit reduction plans – and
those of the “Gang of Six” – rest on a series of predictions and
assumptions about employment, none of which has proved accurate. And
based on the past quarter’s private sector hiring of only 18,000
workers (far less than the swell of the workforce), these predictions
and assumptions will be flat out wrong for the future. The lesson: if
employment does not increase no deficit reduction plan will work.

I have said from the beginning of all this …..that cuts will NOT do it alone; it must be coupled with revenue and jobs creation…..without those 3 there is NO debt reduction….unless that is what is intended….and in this political climate I would not put it past some of the amateurs in Congress to work for a default……basically we have turned away from fighting for prosperity to embracing austerity ONLY!  The concept of prosperity is NO longer relevant….that only austerity will make the economy strong again…….a pile of steaming bovine fecal matter (to use a fav analogy)……..