National Debt

[jamiebk]

I believe that all the author is saying is that there is no indication the stimulus bill has had any effect. You can't tell that from the chartPresident Obama has been quoted several times reporting that his stimulus has already "saved or added" several thousands of jobs, but the actual numbers compared with his 'no action' scenario does not support this claim. It is impossible to tell from the data presented if the stimulus had effect or not.

Based on actual dataThere is no actual data other than the unemployment rate itself...the line graphs are just projections...no one know what they were based on, or when they were composed vs. his 'no action' scenario, no action would have been the better course of action. oNce again...there is no way to tell from this data to It is entirely possible that his 'no action' assumptions were as wrong as his 'post action' assumptions. The only thing we can accurately gather from this, however, is that is 'post action' assumptions are clearly wrong, and his claims of positive results from the stimulus are without factual basis. you can't tell that from the graph either. All you know form the graph is the actual unemployment rate and the fact that the assumptions were (apparently) incorrect. They may be overstated or understated.

If President Bush had said it, it would have been called a 'lie'.

[Shapley]

You can't tell that from the chart

You can, too. If the president says: Pass this bill and unemployment will be less than "x", and they pass it and unemployment is greater than "X", then there clearly is no indication that bill had the desired effect.

it is impossible to tell from the data presented if the stimulus had effect or not.

Which is exactly what I was saying. There is no indication to back up the President's claim of jobs 'saved or added' due to the bill.

The only thing we can accurately gather from this, however, is that is 'post action' assumptions are clearly wrong, and his claims of positive results from the stimulus are without factual basis.

you can't tell that from the graph either. All you know form the graph is the actual unemployment rate and the fact that the assumptions were (apparently) incorrect. They may be overstated or understated.

You can, in fact, gather from the chart that that assumptions of unemployment post action are wrong. The action was taken, and the actual data is not only greater than the 'post-action' assumption, but it is greater than the 'no action' assumption. Therefore, it is clear that the assumptions were wrong, which was my point. We do no know, nor did I claim we know, what the results would have been with no action, since we did not proceed without action.

My only claim is that the actual numbers, after action, are worse than the predicted numbers sans action. If we assume the numbers sans action were reasonably accurate, then the best course of action would have been no course of action. But we don't know if they were reasonably accurate. The chart does, however, dispute the President's claim of success.

[piqaboo]

If the best fear mongerers in the White House can't exaggerate better than reality, then they need to hire better fear mongers.

[Haggis@wk]

If the best fear mongerers in the White House can't exaggerate better than reality, then they need to hire better fear mongers.

Thank you, kind lady. I have to admit I thought it was a nice turn of phrase

[Haggis@wk]

Profligate borrowing and spending puts America’s AAA credit rating at risk.

“That warning from Moody’s focused on the exploding healthcare and Social Security costs that threaten to engulf the federal government in debt over coming decades. The facts show we’re in even worse shape now, and there are signs that confidence in America’s ability to control its finances is eroding. Prices have risen on credit default insurance on US government bonds, meaning it costs investors more to protect their investment in Treasury bonds against default than before the crisis hit. It even, briefly, cost more to buy protection on US government debt than on debt issued by McDonald’s. Another warning sign has come from across the Pacific, where the Chinese premier and the head of the People’s Bank of China have expressed concern about America’s longer-term credit worthiness and the value of the dollar.”

p.s. once again, we have to go to foreign newpapers to find out what's going on in our own country; shameful

Meanwhile, here’s a flashback to Democrats in Congress cheering their success in blocking Social Security reform.

[Shapley]

Pelosi Blames Bush For Social Security Woes

Just a footnote to the clip of Democrats cheering their successful efforts at blocking efforts to address the problem, which Ms. Pelosi said was 'not a problem'.

I suppose, just as she claims she was not told of the waterboarding, she'll now claim she wasn't told that Social Security might have a problem. What did Pelosi know, and when did she know it?

[Haggis@wk]

Martin Feldstein doesn’t exactly sugar-coat this peek into a bleak future of high unemployment, loss of American competitiveness, and essentially all the worst parts of the 1970s and 1930s in American economics. The former Reagan advisor and now Harvard professor says that Barack Obama has learned all the wrong lessons from history. While Obama’s tax cuts are mainly illusory, the tax hikes are very real, and will kill any hope of a recovery this year, and perhaps ever:

Mr. Obama’s biggest proposed tax increase is the cap-and-trade system of requiring businesses to buy carbon dioxide emission permits. The nonpartisan Congressional Budget Office (CBO) estimates that the proposed permit auctions would raise about $80 billion a year and that these extra taxes would be passed along in higher prices to consumers. Anyone who drives a car, uses public transportation, consumes electricity or buys any product that involves creating CO2 in its production would face higher prices.

CBO Director Douglas Elmendorf testified before the Senate Finance Committee on May 7 that the cap-and-trade price increases resulting from a 15% cut in CO2 emissions would cost the average household roughly $1,600 a year, ranging from $700 in the lowest-income quintile to $2,200 in the highest-income quintile. Since the amount of cap-and-trade tax rises with income, the cap-and-trade tax has the same kind of adverse work incentives as the income tax. And since the purpose of the cap-and-trade plan is to discourage the consumption of CO2-intensive products, energy or means of transportation by raising their cost to consumers, the consumer-price increases would be the same for a 15% reduction in C02 even if the government decides to give away some of the CO2 emissions permits. …

The next-largest tax increase — with a projected rise in revenue of more than $300 billion between 2011 and 2019 — comes from increasing the tax rates on the very small number of taxpayers with incomes over $250,000. Because this revenue estimate doesn’t take into account the extent to which the higher marginal tax rates would cause those taxpayers to reduce their taxable incomes — by changing the way they are compensated, increasing deductible expenditures, or simply earning less — it overstates the resulting increase in revenue.

The third major tax increase is the plan to raise $220 billion over the next nine years by changing the taxation of foreign-source income. While some extra revenue could no doubt come from ending the tax avoidance gimmicks that use dummy corporations in the Caribbean, most of the projected revenue comes from disallowing corporations to pay lower tax rates on their earnings in countries like Germany, Britain and Ireland. The purpose of the tax change is not just to raise revenue but also to shift overseas production by American firms back to the U.S. by reducing the tax advantage of earning profits abroad.

The administration is likely to be disappointed about its ability to achieve both goals. Bringing production back to be taxed at the higher U.S. tax rate would raise the cost of capital and make the products less competitive in global markets. American corporations would therefore have an incentive to sell their overseas subsidiaries to foreign firms. That would leave future profits overseas, denying the Treasury Department any claim on the resulting tax revenue. And new foreign owners would be more likely to use overseas suppliers than to rely on inputs from the U.S.

The net result would be less revenue to the Treasury and fewer jobs in America.

Obamanomics is a disaster, and it couldn’t come at a worse time. With our economy already reeling, his taxes will kill any chance at recovery. We will spend years running up massive deficits — which will prompt Obama to impose higher and broader taxes. Get ready for one of the most vicious of all vicious cycles.

And unless the Republican party can get their act together we are looking at 8 years of this misery.

[Shapley]

Stimulus Checques Being Sent To Dead People

The Democrats are obviously paying off the people that helped elect them...

[analog]

The third major tax increase is the plan to raise $220 billion over the next nine years by changing the taxation of foreign-source income.

our troops who go overseas get a tax break on that pay.
To grab that away from them is a kick in the teeth; it's beyond a cheap shot; i'm about to break into embarassing adjectives.

a.

[Shapley]

Ford Can't Compete With Government Motors (GM)

Under the current deal set out by the Obama administration, the government would control 50% of the company, 39% would be controlled by the UAW, 10% by the bondholders and the remaining 1% would go to existing shareholders. Current shareholders and bondholders are not exactly ecstatic about this current deal and are working to structure another negotiation outside of bankruptcy court...

...From here on in, Ford could literally be up against a giant if the government takes control of GM. We foresee this as a major problem for Ford,as the other two major domestic automakers (GM, Chrysler) will more than likely have a clean debt slate after bankruptcy, plus the benefit of government backing. Demand will need to increase dramatically for domestic cars in the near future in order for Ford to stay viable, all things considered.

Think about this: If the government owns a majority stake in GM, which company will get the most favorable treatment when it comes to government contracts, loans and exports?

I made this point much earlier, as did others arguing against the investment of Social Security funds into the market. As the government becomes shareholder, it may suddenly find a new attitude towards monopolies, having always enjoyed them in the areas it traditionally operates.

[Selma in Sandy Eggo]

On the other hand, if Ford can't operate more efficiently than the government...

Seriously, think about it.

[Shapley]

On the other hand, if Ford can't operate more efficiently than the government...

Seriously, think about it.

It's not a matter of effeciency of operation. The government has always shown a willingness to pump millions into losing propositions to keep them operational (think Amtrak). They also have the ability to 'stack the deck' to ensure the opposition has a tough row to hoe.

[Haggis@wk]

Brazil and China eye plan to axe dollar.

“Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.”

Quite an accomplishment — Obama has been president for just four months, and his legacy already seems secure. . . .

[jamiebk]

Brazil and China eye plan to axe dollar.

“Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.”

Quite an accomplishment — Obama has been president for just four months, and his legacy already seems secure. . . .

Uhhhh....Right....All of this damage was inflicted in just 4 months. Of course none of this was precipitated by the 8 years that preceeded it. Get real

[Shapley]

Uhhhh....Right....All of this damage was inflicted in just 4 months. Of course none of this was precipitated by the 8 years that preceeded it. Get real

The action is a direct result of President Obama's "spend our way out of trouble" philosophy. The Chinese have already scolded him over it, and he has had to kowtow to them to keep them interested in buying our debt.

[jamiebk]

As you so eloquently state from time to time, Mr Obama has no ability to "spend" anything. The congress does.

[Shapley]

As you so eloquently state from time to time, Mr Obama has no ability to "spend" anything. The congress does.

That doesn't change the fact that it is his philosophy. The Congress has the responsibility to act or not to act on that philosophy. Thus far, they have shown little willingness to act against him.

[jamiebk]

As you so eloquently state from time to time, Mr Obama has no ability to "spend" anything. The congress does.

That doesn't change the fact that it is his philosophy. The Congress has the responsibility to act or not to act on that philosophy. Thus far, they have shown little willingness to act against him.

Then it is indeed the responsibility of the congress.

[Shapley]

Then it is indeed the responsibility of the congress.

I've always said that. However, the Chinese spoke to President Obama, not the Congress regarding the recklessness of our spending, and I believe it is based on his philosophy, mirrored by congressional action, on which they are acting. In foreign affairs, the President sets the tone, even if his financial hands are ties. If the President preaches fiscal restraint, foreign governments expect to see fiscal restraint. If the President preaches recklessness, the foreign governments expect recklessness.

The Chinese have been laying the groundwork to have the Yuan replace the Dollar as the world's reserve currency for years. However, other governments would not shift to the Yuan unless there was a perception of flawed monetary policy in the U.S. coupled with the promise of sound policy in China. The actions of Brazil indicate that this may now be the case.

[jamiebk]

Then it is indeed the responsibility of the congress.

I've always said that. However, the Chinese spoke to President Obama, not the Congress regarding the recklessness of our spending, and I believe it is based on his philosophy, mirrored by congressional action, on which they are acting. In foreign affairs, the President sets the tone, even if his financial hands are ties. If the President preaches fiscal restraint, foreign governments expect to see fiscal restraint. If the President preaches recklessness, the foreign governments expect recklessness.

The Chinese have been laying the groundwork to have the Yuan replace the Dollar as the world's reserve currency for years. However, other governments would not shift to the Yuan unless there was a perception of flawed monetary policy in the U.S. coupled with the promise of sound policy in China. The actions of Brazil indicate that this may now be the case.

Yeah...I guess you are right...just like in the same sense George Bush's foreign policy, set the stage for the Iraq war. If the President preaches war, foreign governments expect to see war. If the President preaches recklessness, the foreign governments expect recklessness. Our international reputation was ruined and fell from one of deep sympathy and support for the US by other countries, to outright hatred.