Thursday, February 28, 2013

Taxes do not solve Washington's spending problem

Think Washington can tax its way out of its spending problem? Never mind the draconian effect of more taxes on the middle class and the economy, more taxes are not the answer:

Jenkins: None Dare Call It Default - "A few years ago, when the economy was humming, a common estimate held that federal taxes would have to rise 50% immediately to fully fund entitlement programs. Today, a 50% tax increase would be needed just to meet the government's current spending, never mind its future obligations."


Tuesday, February 26, 2013

Public Pension Problem - Call It Default

Sooner or later, it all comes down to "default"--

Jenkins: None Dare Call It Default - "According to economists Robert Novy-Marx and Josh Rauh, state and local taxes would have to increase by $1,385 per household immediately to make good the pension promises to state and local workers, including firefighters and cops. That's not going to happen given all the other demands on taxpayers. Default, in this case, is the proper word for cities and states using bankruptcy to repudiate their pension obligations."


Saturday, February 23, 2013

Korean lawmaker who exposed Samsung corruption forced from office

In Korea, they punish the whistle-blowers:

Korean lawmaker who exposed Samsung corruption forced from office | The Verge: " . . . The conversations in question are part of what is known as the Samsung X-File, a trove of tapes illegally recorded by the government's intelligence service during the 1990s. The files include conversations between Samsung chairman Lee Kun-hee and his brother in law, and reveal bribes allegedly paid by the conglomerate to prosecutors, politicians, and presidential candidates. . . . Roh — leader of the Progressive Justice Party until today — first brought up the X-File back in 2005, citing the need to expose Samsung's relationships with powerful prosecutors. Roh described today's court ruling as "anachronistic," reports the AP, given the ease with which any South Korean citizen can publish material online. "If I go back to eight years ago, I would still do the same thing.""


Thursday, February 21, 2013

Millions Improperly Claimed US Phone Subsidies

Millions Improperly Claimed U.S. Phone Subsidies - " . . . The FCC until last year allowed consumers to self-certify, without requiring documentation, that they met federal poverty guidelines. Subscribers didn't have to recertify once they were enrolled in the program, and there were few checks on whether households signed up for more than one cellphone. "The program rules we inherited were designed for the age of the rotary phone and failed to protect the program from abuse," FCC Chairman Julius Genachowski said. The agency pushed through new rules last year, requiring documentation when a Lifeline customer signs up. Consumers also must certify that no one else in their households is using the program. Carriers now have to check a state or federal social-service database to confirm eligibility and must reverify eligibility every year. Carriers were required by Jan. 31 to report the number of subscribers they had removed from Lifeline as of the end of last year. The data reviewed by The Wall Street Journal came from those reports. The FCC said new verification procedures saved nearly $214 million last year, and projected total savings over the next three years would reach $2 billion. Disbursements under the program began to drop in the third quarter after 12 consecutive quarters of increases."

Self-certify? Sounds like a real give-away!


Tuesday, February 19, 2013

The Real Reason Why Fannie and Freddie Are Not Going Away

What follows is an excerpt from the article at the following link, followed by an excerpted comment at the same link which tells the "real" story of why Fannie and Freddie will probably survive as the corrupt GSE organizations they became in the years leading up to the "crash"--

Why Fannie and Freddie Aren't Going Away Anytime Soon - The Home Front ( "Fannie Mae and Freddie Mac, the two formerly private mortgage giants, have been in limbo since 2008 when the federal government took them into conservatorship. Since then, Congress and President Barack Obama have proposed sweeping reforms of Fannie and Freddie—conservatives demand the government-sponsored enterprises (GSEs) be privatized if not abolished altogether, while progressives favor a more gradual phasing out of the two mortgage giants, which have become critical to the housing market recovery during the past several years. . . . comment --'Just say it. The two Government Sponsored Enterprises (GSE) are enormous "cash cows" for  . . . politicians (mostly Democrats, but also quite a few opportunistic establishment Republicans as well). CEO Jim Johnson and later, Franklin Raines both made sure that guys like Barney Frank and Chris Dodd always got their "grease" on a regular basis.'"


Saturday, February 16, 2013

Welfare Farming

80 percent of subsidies go to the richest 20 percent of farm businesses. As always, government handouts primarily benefit those with the largest and most insistent hands.

Chrysler, and The Most Acclaimed Super Bowl Ad Of All Time? Here's the Rest of the Story - Forbes: "Thanks to the 2006 Agricultural Risk Protection Act, taxpayers are paying for most of the farmer’s crop insurance, kicking in roughly $11 billion a year to cover those bills over the next half decade, up from about $1.6 billion a year from 1996 to 2000. You’re also on the hook for about $4.5 billion in price-support subsidies. That makes about as much sense as Walmart persuading the government that it is entitled to a guaranteed minimum price for sneakers, and if the market won’t bear it taxpayers should pick up the difference. Except farm subsidies help the little guy, right? Wrong. About 80 percent of subsidies go to the richest 20 percent of farm businesses. As always, government handouts primarily benefit those with the largest and most insistent hands."

Next rich farmer you meet, ask him how much welfare he gets from the Feds.


Thursday, February 14, 2013

More Top Brass Join the White House Exodus

You can't make this stuff up--

More Top Brass Join the White House Exodus -- Daily Intelligencer: "While Chu is officially, as of today, the longest-serving Energy Secretary in U.S. history, he will be remembered for overseeing massive green-energy spending included in the Obama stimulus package. Oh, and that whole Solyndra debacle. Joining Chu in the outgoing White House conga line is Secret Service Director Mark Sullivan, who leaves with a cloud over his own head, in the shape of a Colombian prostitute scandal and the Salahi party crashers. Just a few more job openings to keep D.C.'s cocktail circuit buzzing. . . . "


Tuesday, February 12, 2013

CalPERS Pension Fund destroying California

What happened to California? Once the land of promise, now in decline with a dreadful fiscal condition. It will be a long time before California digs out--if ever. Ultimately the politicians (mostly Democrats), union leaders, and "insiders" are to blame--read the full article at the following link (excerpt below) for the sad, sad story:

The Pension Fund That Ate California by Steven Malanga, City Journal WInter 2013: " . . . .California taxpayers help fund CalPERS’s pensions and ultimately guarantee them, so they might wonder: How could a financially troubled former union leader occupy such a powerful position at the giant retirement system, which manages roughly $230 billion in assets? The answer lies in CalPERS’s three-decade-long transformation from a prudently managed steward of workers’ pensions into a highly politicized advocate for special interests. Unlike most government pension funds, CalPERS has become an outright lobbyist for higher member benefits, including a huge pension increase that is now consuming California state and local budgets. CalPERS’s members, who elect representatives to the fund’s board of directors, ignored concerns over Valdes’s suitability because they liked how he fought for those plusher benefits. . . . The pensions were funded by three sources: contributions from employers (that is, state and local governments); contributions from employees (though some governments opted to cover that expense); and money that the pension fund would gain by investing those contributions. With the 1929 stock-market crash in mind, California opted for a cautious investment approach, allowing the fund to buy only safe federal Treasury bonds and state municipal bonds. “An unsound system,” the 1929 commission warned, would be “worse than none.” The employees’ contributions were fixed, so if investment returns weren’t sufficient to fund the promised pensions, the employers’ contributions would have to increase to make up the difference. . . . "


Saturday, February 9, 2013

PIMCO to Pensions: Get Real on Liabilities

Pension liabilities? Understated to unknown--

aiCIO - PIMCO to Pensions: Get Real on Liabilities: " . . . PIMCO's report follows follows a study from the Edhec-Risk Institute, which said that while investors were aware of pressures on public and private pension systems in Europe, a closer look into how each nation measured their liabilities uncovered some surprising results. "Due to the variety of national systems, obtaining a clear view of pension liabilities is not straightforward," the study said. To demonstrate, the institute used a uniform discount rate to measure each member state in the European Union's public pension obligations as a percentage of 2010 GDP. "Ultimately, the values for public pension liabilities that Edhec-Risk Institute has calculated can lead to solvability analyses that are substantially different from those habitually taken into account by rating agencies or investors, " the study noted. Click here to read PIMCO's full paper."


Thursday, February 7, 2013

A Nation of Takers

Spend on--it's not your money right?

Nicholas Eberstadt: Yes, Mr. President, We Are a Nation of Takers - " . . . the country's social-welfare spending is generating severe and mounting hazards for the nation. These hazards are not only fiscal but moral. A growing body of empirical evidence points to increasing dependency on state largess. The evidence documents as well a number of perverse and disturbing changes that this entitlement state is imposing on society. Consider: • Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income. Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960 . . . "


Tuesday, February 5, 2013

Murder Capital Chicago Releases Convicted Murderer

Chicago, murder capital, now has done it "one better"-- Ind. murder convict mistakenly released in Chicago - CBS News: "Police were hunting for a convicted murderer on Thursday after he was mistakenly released from custody in Chicago, where he was sent to face a drug charge while serving a 60-year prison sentence in Indiana. Indiana Department of Corrections officials said Steven L. Robbins, 44, was sent to Cook County Circuit Court on Tuesday to face a drug charge. The charge was dropped, "but for reasons yet unknown, the offender was released by Illinois authorities without being held for return," the department said in a news release. The Cook County Sheriff's Office said it was investigating how Robbins was released. . . ."

Kind of like adding fuel to the fire.


Saturday, February 2, 2013

The Wages of Unemployment

Employment to population ratio terrible--

Richard Vedder: The Wages of Unemployment - "In recent decades there was a steady rise in the employment-to-population ratio: For every 100 working-age Americans, there were eight more workers in 2000 than in 1960. The increase entirely reflects higher female participation in the labor force. Yet in the years since 2000, more than two-thirds of that increase in working-age population employed was erased. The decline matters more than you may suppose. If today the country had the same proportion of persons of working age employed as it did in 2000, the U.S. would have almost 14 million more people contributing to the economy."