No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for March, 2010

March 16, 2010

It’s tourney time, baby!

by @ 15:46. Filed under Sports.

I still have to finish off my bracket, but there’s a couple of housekeeping items:

– First off, we got the play-in game tonight between Winthrop and Arkansas-Pine Bluff. The winner gets to be sacrificed on Friday by Duke. Take Arkansas-Pine Bluff to be the first team out.

– Second, it’s time to start the annual “Which #1 seed will be knocked out first?” poll. Since we’ve never had a #16 knock off a #1, you’ll most-likely have until Saturday to actually get your choice in. While I may or may not remember to pause the poll while a #1 is playing, I will throw out any guesses entered while a #1 team is playing.

Which #1 seed will be the first out of the NCAA tourney?

Up to 1 answer(s) was/were allowed

  • Syracuse (47%, 9 Vote(s))
  • Duke (26%, 5 Vote(s))
  • Kansas (21%, 4 Vote(s))
  • Kentucky (5%, 1 Vote(s))

Total Voters: 19

Loading ... Loading ...

I’ll be back with the Bouncing Mozzarella bracket Thursday morning – I don’t want you thieves to steal my bracket and go the other way.

Roll bloat – Cuban influence

by @ 14:29. Filed under The Blog.

I’m at a bit of a loss for words, so you’ll just have to take my word for it that Cubachi is a great addition to the roll and feed reader, and that you should do the same.

Give them an inch, they’ll take you a mile

Mark Tapscott has this morning’s episode of Rank Hypocrisy. Paraphrasing Mark:

  • In 2005, due to a transcription error by the Senate secretary on a single item, the House passed a debt-ceiling-raising bill that was slightly different than the version that passed the Senate. The Senate clerk, realizing the error after the House passed it, changed the item, presented it to the presiding officers, who both signed it and sent it to President Bush, who proceeded to sign it.
  • Public Citizen filed suit in an attempt to annul the law (ultimately unsuccessful), saying that it violated the requirement that identitcal version of a bill be passed by both Houses of Congress before it becomes law.
  • Joining Public Citizen with amicus briefs – Nancy Pelosi, Louise Slaughter and Henry Waxman.

Nothing more needs to be said.

March 15, 2010

Would the “lockbox” have worked?

by @ 18:57. Filed under Social Security crater.

The Associated Press praised the AlGore “lockbox” in its story discussed earlier, and Glenn Reynolds and Andy McCarthy asked where the “lockbox” was, so I figure it’s time to explore what creating said “lockbox” would do for the current cash-negative situation. The very-short version is that while there would be actual money in the “Trust Funds” to pay for the cash shortfall, which still would exist at the same level with or without the “lockbox”, that same money would have already needed to be borrowed on the open Treasury securities market. The longer version is a bit lengthier.

First, let’s take a look at Social Security as it was at the end of January 2001. The Old-Age and Survivors Insurance (OASI) Fund was “worth” $945 billion, with the weighted average interest of the securities held at 6.640% and the average time to maturity at 6.914 years (note; while most of those securities have since matured and been rolled over into new securities, some of those securities don’t mature until 2015). The Disability Insurance (DI) Fund was “worth” $121 billion, with the weighted average interest of the securities held (which included some since-retired public-issue debt) of 6.426% and average time to maturity at 6.828 years.

Since then, the OASI Fund has taken in $630 billion more in cash than it has paid out (i.e. primary surplus) with $776 billion in interest credited to it, giving it a “value” of $2,350 billion. Meanwhile, the DI Fund has had a primary deficit of $10 billion with $93 billion in interest credited to it, giving it a “value” of $203 billion. Between February 2009 and January 2010, the OASI Fund has had a primary surplus of $23,504 billion (down from a $71,637 billion primary deficit between 2/2008 and 1/2009) with $107.901 billion in interest credited to it, while the DI Fund has had a primary deficit of $23.611 billion (up from $10,687 billion primary deficit between 2/2008 and 1/2009) with $10.467 billion in interest credited to it. Signifcantly, that’s an overall 12-month deficit of $13.144 billion for the DI fund.

Now, let’s try to define the “lockbox”. There’s actually several different flavors possible, involving what gets put into the “lockbox” (just the taxes received after creation, the “new” taxes and interest, the entirety of the “Trust Funds” immediately upon creation, the values of the various securities as they mature), and on what interest gets paid (just those items in the “legacy Trust Fund”, everything). Some of those scenarios are beyond my ability to model, so I’ll just take four of the relatively-easy-to-model scenarios, while noting that while economically it makes no sense to credit interest to funds in the “lockbox”, it would also be political suicide even as it would require cash that the Treasury doesn’t have.

First, I’ll take just “future revenues” locked away, with no interest credited to them, and the current “legacy Trust Funds” along with interest credited to them rolled over into fresh Treasury securities as they are now. I’m likely overestimating the interest that would have been credited to the “legacy Trust Funds”, which would get put right back into the Treasury as it is now, but it’s close enough for government work. The “lockbox” amounts would have been the 9-year amounts listed above (+$630 billion for OASI, -$10 billion for DI). That’s right – that DI “lockbox” would have been emptied by this point. Meanwhile, the “legacy funds” would have been about $1,520 billion for OASI and $179 billion for DI, bringing the total nominal OASI fund amount to about $2,150 billion. That would have moved up the fund-exhaustion dates by a couple years. Assuming nothing in the budget would have been cut, the 9-year deficit spending would have increased by $640 billion, or an average of about $71 billion per year.

Next, I’ll add the interest earned by the “legacy funds” to the lockbox as cash. Since it no longer would have compounded, that interest would have been a bit less than in the first option, or about $470 billion for OASI and about $57 billion for DI. However, since it would have been added to the “lockbox”, both OASI and DI “lockboxes” would have been in positive territory (+$1,100 billion for OASI, +$47 billion for DI). However, since the “legacy funds” would have remained at the January 2001 levels, that would have left the total nominal funds at $2,050 billion for OASI and $177 billion for DI. Again, that would have meant the funds would be a bit closer to exhaustion, and it would have increased the 9-year deficit spending by $1,157 billion (or roughly $129 billion per year).

Third, I’ll look at the full-on “lockbox”, immediately liquidating the entirety of the “Trust Funds”, putting everything in the “lockbox”, and foregoing all future interest payments. Because interest earned in January 2001 would have been paid out, the total amount going into the “lockbox”, would have been about $956 billion for OASI and $122 billion for DI. That would have created a rather massive deficit for 2001, as to create that “lockbox”, the federal government would have needed to come up with $1,078 billion. With only primary surpluses and deficits affecting the “lockbox”, that would have left the balances at $1,586 billion for OASI and $112 billion for DI. That would have really cut into the lifetime of the funds, but they would at least have been fully-funded until exhaustion. Further, the 9-year deficit spending would have further increased by the same $640 billion as the first scenario.

Finally, I’ll take that full-out “lockbox” in scenario three, but still credit the interest. As I noted above, while it would fly politically, it would make no sense economically, as the Treasury, and by extension, we the taxpayers, would be paying for the use of money that we wouldn’t be able to use. The only difference between that scenario and the current scenario is that instead of $2,554 billion in unfunded IOUs, there would be $2,554 billion in cash. Of course, that would also mean the 9-year deficit spending increase would have been that same $2,554 billion.

The Associated Press starts to catch up on the Social Security Crater

by @ 13:04. Filed under Social Security crater.

(H/Ts – Ed Morrissey and Owen)

The Associated Press finally noticed that the cash Social Security is taking in won’t cover its current obligations:

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg’s municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn’t be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

I give the writer, Stephen Ohlemacher, credit for remembering that even the net interest paid on the bonds is, if it needs to be paid out in cash, something the Treasury Department doesn’t have so much as a penny to pay out. A few points of order:

  • Those 12-month primary (or cash, if you prefer) deficits actually began in the February 2009-January 2010 period, when Social Security ran a $114 million primary deficit. An estimation using numbers from the Febraury 2010 Monthly Treasury Statement, which shows a $7.59 billion “gross” deficit (including the interest paid out on securities cashed in February) and a $7.71 billion primary deficit, bumps that 12-month primary deficit to $6.47 billion (between March 2009 and February 2010).
  • That nearly-$29 billion cash deficit for FY2010, or $34 billion if one prefers to go with the Office of Budget and Management numbers, tells only half the story. The FY2010 budget counted on $21 billion in primary surpluses from the Social Security “Trust Funds” to spend on other items in the budget, which makes the total amount of unplanned borrowing on the open Treasury market $50 billion-$55 billion.
  • Also from the OMB, for at least FY2010, the Old-Age and Survivors Insurance Fund is expected to run a primary deficit. It would join the Disability Fund, which began running primary deficits in 2005 and running gross deficits (i.e. shrinking its “Trust Fund” and entering the final stage of collapse) in 2009.

A quick note about the February 2010 numbers – while they are not the final numbers from Social Security’s Office of the Chief Actuary, they are rather reliable. They also represent, outside of the anomalous month of August 1990, when almost all of September 1990’s benefits were shown as paid out in August, the second-largest primary deficit (behind December 2009’s $11.307 billion primary deficit) and the largest gross deficit since monthly records have been kept in January 1987.

Even if we had taken Al Gore’s suggestion and put it the “Trust Funds” into a “lockbox”, it would, at best, only delay the inevitable. Between March 2001 and February 2010, the funds accumulated $869 billion in interest, and the primary growth was $607 billion, which together masked $1,475 billion in deficit spending over the last 9 years. Given the current problem is converting the “Trust Funds” to cash, and the problems both parties have had in saying no to spending, I don’t see how that “lockbox” would have helped any.

Revisions/extensions (3:19 pm 3/15/2010) – I really need to pay more attention to my feed reader over the weekend – Owen had it up yesterday.

R&E part 2 (7:00 pm 3/15/2010) – First, thanks to Ed for linking to me. Sorry about the problems that you may have experienced in loading this site; StatCounter had some issues.

Since Glenn Reynolds wanted to know what happened to the “lockbox”, I decided to take a somewhat-quick back-of-the-spreadsheet look at what would have happened had a “lockbox” been in existence the last 9 years. Do note that it would not have affected the primary deficits in the least, but it would have put at least some actual money into the “Trust Funds” for the future.

Monday Good Read – John Hawkins interviews Karl Rove

by @ 6:46. Filed under Politics - National.

The reason why I say “good” instead of “hot” is the Wreckonciliation version of PlaceboCare (which I believe is now up to 5.0) is out, and it left me white-hot with anger. John Hawkins got some interview time with Karl Rove, who has a new book, Courage and Consequence: My Life as a Conservative in the Fight, on Friday. Here’s one of the shorter question-answer exchanges:

One of the things that has puzzled conservatives about the Bush presidency, particularly in the second term — and I’ve heard this again and again and again — is they don’t feel like there was an effective communication strategy. The general feeling was that the Left turned George Bush into a punching bag and just beat him into the ground, while the White House really didn’t do much to stop it. Can you talk about that a little bit?

Well, I do think that there are instances, particularly on the issue of Iraq’s WMDs, where the administration didn’t punch back hard enough. I talk about that at length in the book.

It’s principally my responsibility because I should have seen it for what it was, which was a corrosive dagger aimed at the heart of the Bush Administration. But I would say this: in the last two years of the term, Bush was on the receiving end of daily blows from every Democratic presidential candidate and it was impossible for me to respond to those. The Republicans were disorganized, distressed, and didn’t come to his aid while others said the President can defend himself.

But when you’re receiving daily blows like that, you can either do your job or defend yourself, but you can’t do both every single day. It’s just the way life works.

March 14, 2010

If it’s the second Sunday in March…

by @ 19:02. Filed under Miscellaneous.

This is the Emergency Blogging System. It has been activated just because it felt like self-activating.

That’s right, kids. You lost an hour this morning. If you still haven’t moved your clocks ahead an hour (and most-likely, if you have a WordPress-based blog, you haven’t), move them ahead one hour.

If you have a WordPress blog (whether it is on WordPress.com, a WordPress stand-alone, or WordPress MU – this includes Blogivists and Conservablogs), and you aren’t using UTC, you need to change it to Daylight Saving Time (Central UTC -5, Mountain UTC -6, Eastern UTC -4, Pacific UTC -7, and check your clock for other locales). To do so, go into your wp-admin panel, select “Settings”, and under the “General Settings” page that pops up, select the right time zone. Don’t forget to hit “save” when you’re done.

This concludes this activation of the Emergency Blogging System.

March 13, 2010

Quick conversation – Ed Thompson

Most of my material from the Wisconsin Defending the American Dream Summit will have to wait until I get home tomorrow (or possibly Monday), but I had the chance to briefly speak with Tomah mayor Ed Thomspon, who is running for the 31st Senate seat currently held by Democrat Kathleen Vinehout.

Thompson stressed that he is a conservative. In fact, he signed the Americans for Tax Reform no-tax-increase pledge just yesterday. He also touts his business credentials as a supper club owner.

He knows he has a hard road against him. The 31st has produced one Republican in the last 100 years, Ron Brown, and it was Vinehout that beat him after only one term. While that election was in the Democratic wipeout of 2006. In fact, he outspent Vinehout by roughly a 2-1 margin.

Of interest to everybody, especially to those not in the 31st, Thompson answered that he thinks his brother Tommy will run for Senate against Russ Feingold. He further said that Tommy does need to give an answer, one way or the other, soon.

Live from the Wisconsin Defending the American Dream

by @ 9:38. Filed under Defending the American Dream.

There are a lot of people here in the Dells on a rainy Saturday for Americans for Prosperity’s Defending the American Dream Summit. We’re still a half-hour from the start, and already the place is filling up. All the major candidates for the Republican nominations for governor, lieutenant governor and US Senate have presences, mostly with the candidates in attendance, on the way in, and along the north wall, various other groups have booths.

While we wait for the conference to begin, I may as well upload a few photos (not necessarily in order) I took on my way in.

March 12, 2010

Eggs on the road – all weekend

by @ 15:32. Filed under Miscellaneous.

I really should’ve been on the road an hour ago; I would’ve avoided unleashing my inner Rottweiler. However, what’s done is done.

In any case, I’m all over the place this weekend:

– Tonight and tomorrow – Defending the American Dream Summit, Chula Vista Resort and Wisconsin Dells Center, Wisconsin Dells.

– Sunday, 1 pm – Taxpayers’ Rally with Scott Walker and Rebecca Kleefisch, Rosebud Cinema (6823 W. North Ave.), Wauwatosa.

Just. Fucking. Sick.

by @ 15:05. Filed under Health Care Reform.

No, I’m not going to fucking apologize for the language, not after reading this shit-for-brains “reasoning” to fund and mandate abortion coverage in PlaceboCare 4.0 given to Rep. Bart Stupak (D-MI) and relayed to the National Review (emphasis in the National Review’s post):

What are Democratic leaders saying? “If you pass the Stupak amendment, more children will be born, and therefore it will cost us millions more. That’s one of the arguments I’ve been hearing,” Stupak says. “Money is their hang-up. Is this how we now value life in America? If money is the issue — come on, we can find room in the budget. This is life we’re talking about.”

Those dildo-sucking genocidal asshats have no fucking shame, or brains for that matter. Not only do they admit that PlaceboCare is now all about killing the unborn, this at a time when they’re losing the generational battle on abortion, but they also admit that this fucked-up repugnant piece of shit bill is nowhere near fucking “revenue-neutral”.

March 11, 2010

Open Thread Thursday – Slaughtering the votes

Let’s try again, this time with feeling. I’ll be away from the bunker most of the day, and it’s Thursday, so it’s the perfect time for Open Thread Thursday. Today’s band choice is inspired by Louise Slaughter’s plan to pass PlaceboCare 4.0 without having the House actually vote on Version 3.0.

[youtube]http://www.youtube.com/watch?v=rDB1QB7rlPg[/youtube]

For those of you who missed the lowlights of that plan, they’re going to take a pass on voting on the Senate version (partly because it is so toxic, SanFranNan can’t get to 216 with that bill as-is, partly because they can’t trust the Senate or Teh Won to hold up their ends of the bargain), instead working on Wreconcilation and stating that, if that gets 216, the leadership will stipulate that vote also applies to the Senate bill, even though that bill will never have been voted upon.

Bold prediction – if that gambit is used, the Supreme Court will strike down the entire thing before the end of 2011, and it won’t be a 5-4 vote.

Now that I’ve given you some material, it’s your turn to feed the beast.

Jim Geraghty applies bracketology to PlaceboCare

by @ 7:56. Filed under Health Care Reform.

There are certain benefits of having the PlaceboCare vote drag on into March Madness. Jim Geraghty breaking down 32 potential yes-to-no flippers into 4 brackets of the don’t-include-us-in-next-year’s-NIT is one of them…

[youtube]http://www.youtube.com/watch?v=vD8pqWMispw[/youtube]

The best part was Jim working “Badger” into the preview of Steve Kagen (D-Green Bay). Somehow, I don’t think he’ll rise up like a Phoenix.

March 9, 2010

Jobsapalooza – Wisconsin gubernatorial edition

by @ 17:59. Filed under Miscellaneous.

I think it’s safe to say that what Vice President Joe Biden calls a three-letter word, J-O-B-S, is the number one issue in the gubernatorial campaign. In fact, it is the only issue that Milwaukee mayor, and presumptive Democratic nominee, Tom Barrett wants to talk about, at least if one goes to his campaign website.

The first salvo in the current numbers war came from Milwaukee County Executive, and candidate for the Republican nomination, Scott Walker, who wants to create the conditions to allow the private sector to create a minimum of 250,000 jobs by the end of his first term. That would roughly duplicate the feat achieved in former Governor Tommy Thompson’s first term.

The second salvo came from Barrett, who wants to, in his first three years, merely replace the 180,000 jobs lost since the “start” of the recession at the end of 2007, by spending somewhere north of $900 million up-front in taxes, both state and federal. At the same time, he scoffed at Walker’s notion that it is possible to do that and add an additional 70,000 jobs in a fourth year, much less without spending something in the neighborhood of $1 billion in taxes.

Salvo three came in from former Congressman, and Republican candidate for governor, Mark Neumann, who while refusing to play the numbers game, also says that it is the private sector that actually creates jobs.

Fishing soon to be banned?

by @ 9:04. Filed under Envirowhackos, Politics - National.

(H/T – Marcus Wilder)

ESPN reports on what is likely coming down the pike for anglers on virtually every body of water in the United States:

The Obama administration will accept no more public input for a federal strategy that could prohibit U.S. citizens from fishing the nation’s oceans, coastal areas, Great Lakes, and even inland waters.

This announcement comes at the time when the situation supposedly still is “fluid” and the Interagency Ocean Policy Task Force still hasn’t issued its final report on zoning uses of these waters.

That’s a disappointment, but not really a surprise for fishing industry insiders who have negotiated for months with officials at the Council on Environmental Quality and bureaucrats on the task force. These angling advocates have come to suspect that public input into the process was a charade from the beginning….

Consequently, unless anglers speak up and convince their Congressional representatives to stop this bureaucratic freight train, it appears that the task force will issue a final report for “marine spatial planning” by late March, with President Barack Obama then issuing an Executive Order to implement its recommendations — whatever they may be.

Led by NOAA’s Jane Lubchenco, the task force has shown no overt dislike of recreational angling, but its indifference to the economic, social and biological value of the sport has been deafening.

Additionally, Lubchenco and others in the administration have close ties to environmental groups who would like nothing better than to ban recreational angling. And evidence suggests that these organizations have been the engine behind the task force since before Obama issued a memo creating it last June.

As ESPN previously reported, WWF, Greenpeace, Defenders of Wildlife, Pew Environment Group and others produced a document entitled “Transition Green” shortly after Obama was elected in 2008. What has happened since suggests that the task force has been in lockstep with that position paper.

Then in late summer, just after he created the task force, these groups produced “Recommendations for the Adoption and Implementation of an Oceans, Coasts, and Great Lakes National Policy.” This document makes repeated references to “overfishing,” but doesn’t once reference recreational angling, its importance, and its benefits, both to participants and the resource.

As a reminder, fishermen and hunters have done more to protect the environment than the EPA, the environment-enforcement part of the DNR, Greenpeace, the WWF, et al. We have a unique stake in a clean environment. In fact, when I go canoeing, I drink right out of the lake.

Revisions/extensions (6:20 pm 3/9/2010) – Allahpundit tracked down an old campaign promise Obama made to Sport Fishing (emphasis in AP’s post):

My administration would place the emphasis in fishery management where it belongs: in ensuring the long-term health and sustainability of stocks through the use of effective and appropriate conservation measures. Such an approach would not provide a preference for one management tool, such as a marine reserve, over another. Given sufficient management controls and data, a fishery can meet conservation objectives through a variety of catch controls and habitat-protection measures, including gear restrictions, bag limits or closures. In some cases, additional conservation measures may need to be taken to ensure a positive recreational marine-fishing experience for future generations of Americans. Recreational fishermen have not shirked from embracing such measures when needed to achieve long-term stock sustainability, as long as measures are matched to the problem. While marine reserves may be an effective means of achieving important goals, their use and design must be based on an assessment of impacts and balanced by a strong respect for the ability of recreational anglers to practice their sport. In my view, we need to be open to the use of a variety of innovative conservation tools and be prepared to use them if the science justifies their establishment, and if it has been determined that less-restrictive options will not achieve critical goals like rebuilding fish stocks. The decision to establish marine reserves should be made as a result of a transparent, science-based process and be the least intrusive possible to get the job done. Such a process should include outreach to the sport-fishing community to explain both the scientific basis for the action and the expected conservation benefits to future fishing generations if it is to gain the community’s active support.

As AP notes, it is an “official Barack Obama campaign promise”, which means that under the Jim Geraghty Principle, sooner or later, it will reach its expiration date.

It likely won’t happen all at once, but it will happen in bits and pieces, with the ultimate goal of no legal fishing happening if Obama stays in office the full two terms.

Open Thread Tuesday

by @ 8:31. Filed under Miscellaneous.

I know, I know – it’s not Thursday. I’m just plain wiped out, and I need to get some steam back in time for Drinking Right, I’m going to have to open the floodgates.

Fortunately, there is no shortage of drinking songs…

[youtube]http://www.youtube.com/watch?v=ayF1T_CdGro[/youtube]

Have at it.

March 8, 2010

March Drinking Right – 24-hour warning

by @ 19:00. Filed under Miscellaneous.

This is the Emergency Blogging System. It has been activated to provide official news, instructions and information.

The March 2010 Drinking Right will commence in 24 hours over at the usual place (Papa’s Social Club, 7718 W. Burleigh in Milwaukee). You are hereby instructed to be there. Failure is not an option.

Now, repeat after the EBS – “I will be at Drinking Right Tuesday, March 9, 2010 at 7 pm.”

This has been the Emergency Blogging System.

Social Security now running 12-month cash deficits – UPDATE – Worse than expected

by @ 10:16. Filed under Social Security crater.

Revisions/extensions part 2 (10:16 am 3/8/2010) – I originally posted this on February 22 using estimates from the January 2010 Monthly Treasury Report to fill in the numbers for January 2010. The Social Security Office of the Chief Actuary has now released the final numbers for that month, and the news is worse. The original post is below the fold (unless you’re reading just this post, in which case it’s below the update). I decided to append to this and bump it up to today’s date.

Between February 2009 and January 2010, the combined OASDI Social Security “Trust Funds” spent $112 million more than it took in in taxes. As noted in the original post (below), the 12-month primary (or cash) deficit is the first since monthly records were kept in 1987, and likely the first since the “forever” fix of 1983.

The estimate using the Treasury’s numbers was a $91 million primary deficit, which instead of proving too pessimistic based on recent analysis of the difference between the Treasury Monthly Statements and the OACT final numbers, proved to be too optimistic.

To contrast, just last year, the Obama administration expected the FY2010 primary surplus in the combined “Trust Funds” to be $21,028 million (or $21.028 billion – I will use a single base to make sure the numbers hit home) as part of its FY2010 budget. Now, it’s estimated to be a $33,754 million deficit, a shift of $54,782 million to the red. That’s $54,782 million that, thanks to the well-over $1,000,000 million (or $1 trillion) deficit that was already planned for this year, needs to be borrowed by the Treasury on the open market.

The situation is not yet as dire as it was between 1975 and 1981, when the combined funds ran overall yearly deficits, or 1982, when the Old-Age and Survivors Insurance fund borrowed from the Hospital Insurance (Medicare Part A) fund to stay fully-capitalized. However, raising the withholding tax 14% and the self-employment tax 64% isn’t exactly going to play well, and like the previous time, it will only slow the inevitable.

(more…)

Legislative Democrats trying to freeze Insurance Commissioner for the next 3 years

by @ 6:00. Filed under Politics - Wisconsin.

Rep. Bill Kramer (R-Waukesha) tipped me to this little power freeze, known as AB 787 introduced into the Assembly to keep control of the Office of the Commissioner of Insurance for another three years after losing the governor’s office. To wit, it changes the appointment from an “at the pleasure of the governor” appointment to a fixed 4-year appointment ending in the third year of the governor’s term.

Why is this so noxious? The OCI pretty much has free hand in regulating the entire insurance industry. Given every driver in the state has to have auto insurance, and if PlaceboCare gets put into law, every person would have to have health insurance, the philosophy of the operation of that power is something that should not be divorced by three years from the expression of will by the public.

Oh, and before you Democrats scream that it was a partisan Tommy Thompson that got the term changed from a fixed term to one of the governor’s discretion, it was done by a Democratic Legislature.

March 6, 2010

Sean Duffy endorsed by the 7th District Republican caucus

by @ 19:36. Filed under Politics - Wisconsin.

This came in today from the Sean Duffy campaign:

Wisconsin’s 7th Congressional District Republican Party today voted in overwhelming numbers to officially endorse Ashland County District Attorney Sean Duffy as their choice to defeat Chairman David Obey in November.

Of those who voted to endorse, Sean Duffy received 406 delegate votes, or 84 percent of the vote to Dan Mielke’s 78 delegate votes, or 16 percent of the vote.

“I’m humbled and extremely grateful to Republicans in the 7th District for their official endorsement. I’ve never seen the Party more unified or more energized. Our positive message of job creation and fiscal responsibility has clearly resonated,” said District Attorney Duffy. “Dave Obey’s big government spending spree has mortgaged our children’s future, slowed our economic recovery and driven American into record debt. The contrast between us is clear and simple – Obey puts his faith in government bureaucrats, and I put my faith in the American people.”

The Duffy for Congress Campaign has raised a record $400,000 – twice as much as any previous Obey challenger raised in an entire election cycle – while being highlighted by the Wall Street Journal and National Review Online, and named by the Washington Independent as the #3 conservative in America to watch in 2010.

Sean Duffy was first elected as Ashland County District Attorney in 2002 and has served in that role for seven years. As District Attorney, Duffy has aggressively compiled a 90 percent conviction rate. He is three-time World Champion Lumberjack athlete, ESPN Outdoor Games analyst, and former MTV Real World cast member.

Good luck Sean.

Weekend Hot Read – Tom Blumer’s “Should the ‘Smarties’ Really Be Put in Charge of Health Care?”

Tom Blumer’s latest column at Pajamas Media uses the history of Social Security, Medicare, and Fannie Mae/Freddie Mac to knock down the continuing myth that liberals are smarter than everybody else, as well as explode the idea that the federal government be awarded the remainder of the health care system. Since my acquired “specialty” is Social Security, I’ll give you the meat of that portion of the beatdown:

Yet the reported $7.677 trillion liability shows that it’s still nowhere near enough to meet future promises, primarily because:

  • FDR and his smarties didn’t build the improved life expectancy of future generations into the program. If they had, today’s normal retirement age would be somewhere between 70 and 75, instead of its current 66-67, depending on one’s year of birth.
  • The method of indexing chosen in the mid-1970s has caused benefits to go up faster than the real living standards of everyone else, and has subtly changed the program’s perceived purpose from preventing destitution to providing the means to ensure a lower middle-class lifestyle.
  • The smarties also didn’t anticipate lower birth rates that were already occurring, and which were then dampened even further almost 40 years later by legalized abortion. As a result, at the end of 2008 there were less than 2.6 employed workers for each Social Security beneficiary (143.3 million divided by 55.8 million).
  • Additionally, as shown in several previous columns (one is here), the so-called Social Security “trust fund” has been wantonly raided for the past 40 years and used to pay for the government’s everyday operations. The “trust fund” contains virtually nothing except $2-plus trillion in IOUs from the rest of the government, which is itself trillions of dollars in debt.

Because of all of this, even the astronomical taxes noted earlier have been less than benefits paid for most of the past year — and it’s going to get worse. The crisis that supposedly didn’t exist in 2005 is here. Thanks, smarties.

The bad news is that is the good news, and that was based mostly on the Trustees’ look at the long-term health of Social Security from last year. Medicare’s unfunded liabilities are much worse – $38.1 trillion (again, as of last year), while Fannie Mae/Freddie Mac, which aren’t even accounted for in the Treasury Department’s 2009 Financial Report, lost $100 billion last year and may end up costing the government between $1 trillion and $5 trillion in losses.

A bonus item from Tom’s tease back at BizzyBlog – that employed/beneficiary ratio dropped from 2.56 (rounded up to 2.6 in the column) at the end of 2008 to 2.39 at the end of January 2010, and is likely to worsen through the end of the year.

March 5, 2010

CBO estimate of the FY2011-FY2020 deficits – $9.761 trillion

by @ 22:59. Filed under Politics - National.

I guess we could call this part 2 to the prior post on the long-term situation of the government. The Congressional Budget Office scored Obama’s FY2011 budget, and the picture is not pretty. The summary of deficits:

  • FY2010 – $1,500 billion (which The Hill notes is $56 billion less than the White House Office of Management and Budget estimate due to the CBO estimating less spending – H/T Zip)
  • FY2011 – $1,341 billion (versus OMB’s $1,267 billion)
  • FY2012 – $915 billion (versus OMB’s $828 billion)
  • FY2013 – $747 billion (versus OMB’s $727 billion)
  • FY2014 – $724 billion (versus OMB’s $706 billion)
  • FY2015 – $793 billion (versus OMB’s $752 billion)
  • FY2016 – $894 billion (versus OMB’s $778 billion)
  • FY2017 – $940 billion (versus OMB’s $778 billion)
  • FY2018 – $1,001 billion (versus OMB’s $785 billion)
  • FY2019 – $1,152 billion (versus OMB’s $908 billion)
  • FY2020 – $1,253 billion (versus OMB’s $1,003 billion)

The total sum of the deficits as estimated by the CBO is $9,761 billion (or $9.761 trillion), versus the OMB’s $8,532 billion estimate. That is attributable to a higher estimate of tax revenue by the OMB; both the OMB and CBO estimate that there will be about $45 trillion in government spending over the next 10 years.

Further, I note that, while the bulk of the Bush tax cuts would be allowed to expire (something the Government Accountability Office does not assume in its “alternate” scenario touched on in the prior post), and discretionary spending is lower than in the baseline (due entirely to lowered spending in defense), the increased costs of PlaceboCare make the overall picture in FY2020 look quite a bit like the free-spending “alternate”, which assumes discretionary spending remains at the bloated 8.7% GDP. Indeed, the cost of “mandatory” spending and net interest would be roughly 94.7% of the entire tax take of the federal government, higher than said GAO “alternate” (approximately 93%) or the pre-budget “baseline” (81.7%).

GAO – Unfunded liabilities over the next 75 years – $41.1-$76.4 trillion

by @ 15:03. Filed under Politics - National.

Rep. Paul Ryan (R-WI) and the Republicans on the House Budget Committee point to a pair of publications from the Treasury Department and the Government Accountability Office that both show that the amount of unfunded liabilities going completely off the charts. I’ll focus on the GAO report, mostly because it is less than a tenth the size of the Treasury Department one, but also because the GAO can’t render an opinion on the bulk of the Treasury Department one because of “widespread material internal control weaknesses”.

Before I really delve into the GAO’s January 2010 update on “The Federal Government’s Long-Term Fiscal Outlook”, I have to briefly explain the two major scenarios they use; the “Baseline Extended” and the “Alternate”. Both are based on the Congressional Budget Office’s January 2010 10-year baseline. The major difference on the revenue side is the Baseline Adjusted assumes that the expiring tax cuts (both Bush’s and Obama’s) expire on schedule and the Alternate Minimum Tax does not get indexed for inflation (the indexing currently must be done by Congress yearly), then continue to be at 20.2% of GDP (the 2020 level) after 2020, while the Alternate assumes that the tax cuts continue through 2020 and the AMT continues to be indexed through 2020, then adjust to the 40-year historical average of 18.1% of GDP. On the spending side, unlike the Baseline Extended, the Medicare “Doc Fix” (again, done by Congress yearly) continues to be done, the refundable portion of tax credits due to expire don’t through 2020, and discretionary spending goes up at the rate of economic growth (or a constant 8.7% of GDP, versus the Baseline Extended assumption of going up by the rate of inflation through 2020 then remaining at 6.7% of GDP).

Under the Baseline Extended scenario, which the GAO notes has revenues higher than historical average and discretionary spending below historical average, the unfunded liability over the next 75 years is $41.1 trillion. That compares very unfavorably to the fall 2009 estimate of $36.1 trillion in unfunded liability. Of note, the GAO says that either taxes would immediately need to go up 24.2% and remain that much higher than their projections throughout the next 75 years, which would leave taxes at 25.3% of GDP by 2020, or discretionary spending be immediately reduced by 20.0% and remain down at that level throughout the next 75 years, to close that gap.

However, we know that government will not allow spending to grow by only the rate of inflation; hence the Alternate scenario is operative. The GAO notes that both revenues and discretionary spending under that scenario are roughly the same as their historical averages. Under that scenario, the unfunded liability over the next 75 years is $76.4 trillion. That’s right – a $1 trillion deficit every year for the next 75 years. That is also a $14.3 trillion increase in unfunded liabilities since last fall, when it was $62.1 trillion.

Some items of note from Ryan and the House Republicans on the Budget Committee:

  • By 2020, roughly 93 cents of every dollar of Federal revenue will be spent on major
    entitlement programs and net interest costs.
  • By 2030, net interest payments on the Federal Government’s accumulating debt will
    exceed 8 percent of gross domestic product [GDP] – making them the largest single
    expenditure in the Federal budget.
  • To close the fiscal gap today, the government would have to immediately raise taxes by
    50.5 percent (note, that would raise the tax take beyond 2020 to 27.2% of GDP), or cut non-interest spending by 34.2 percent.
  • If no action is taken in the next 10 years, in 2020 the government would have to raise
    taxes by 60.7 percent (or to 29.1% of GDP), or cut noninterest spending by 40.2 percent

Figures 3 and 4 in the GAO report, which outline revenues and composition of spending under the Baseline Extended and Alternate scenarios respectively, are must-sees. Even under the Baseline Extended model, spending on interest, Social Security, Medicare and Medicaid will exceed total revenues by 2040. It’s worse under the Alternate scenario – the major entitlements and interest will exceed total revenues long before 2030, and Social Security alone plus interest will exceed total revenues in 2040.

For those of you who think that the problem is low revenues, I decided to mash the Baseline Extended revenue projection into the Alternate spending chart, which is the most-likely scenario given that the majority of “Republican” Senators refused to find $10 billion in a $3,600 billion budget to cut to pay for a month’s worth of additional unemployment benefits.

Jobs seasoning

by @ 11:26. Filed under Economy.

Tom Blumer took a look beyond the “seasonally-adjusted” job loss of 36,000 in February, and it just doesn’t add up:

The red-boxed 473,000 jobs added in February was a really poor result. It trailed the 2004-2008 average of 714,000 by about 240,000. January’s actual result was only 72,000 worse than the 2004-2008 average. That’s 168,000-job swing in the wrong direction.

Even though February 2010’s +473,000 is less than 2008’s +516,000, the seasonally adjusted job loss for February of -36,0000 — the one number the press and everyone else will singularly focus on — is less than 2008’s -50,000. Why? Because the 2009 disaster is mucking up the seasonal adjustment calculations, making the +473K look better than +516K, when it obviously isn’t.

As Tom asked, “If, according to you guys, we were in a recession in February 2008 (an assertion I have disagreed with since NBER made the call that it began in December 2007), when the economy added a lackluster (by traditional February standards) 516,000 jobs, what do you call it when February 2010 sees 43,000 fewer jobs added?”

Lest one says that it’s because there were fewer jobs in 2010 than in 2008, let’s first take a look at the actual number of jobs in January 2008 (135,840,000) versus the number of jobs in January 2010 (127,606,000), and see what the percentage increases between January and February in both years were. The rate of job-number change between 1/2008-2/2008 was +0.380%. The rate of job-number change between 1/2010-2/2010 was +0.371%.

Next, let’s compare that to the “seasonally-adjusted” job-number change for the same time frames. In January 2008, there were 137,941,000 “seasonally-adjusted” jobs, with a drop of 50,000 “seasonally-adjusted” jobs in February 2008, for a rate of job-number change between 1/2008-2/2008 of -0.0362%. In January 2010, there were 129,562,000 “seasonally-adjusted” jobs, with a drop of 36,000 “seasonally-adjusted” jobs in February 2010, for a rate of job-number change between 1/2010-2/2010 of -0.0278%.

In short, despite what the chattering class says, the jobs market is not even at the point where it was near the “start” of the recession, much less its average between 2004 and 2008. Indeed, there were fewer jobs in February 2010 than there were in any other February since at least 2000 (note; the BLS statistics I’m relying on only go back to 1/2000).

To be fair, I do have to note that the February low in the 2000’s happened in 2003, when there were 128,660,000 actual (non-adjusted) jobs, and that month’s 412,000 improvement from January 2003 was weaker. However, unlike 2003, the immediate-future tax and regulatory climate is much worse now.

Revisions/extensions (3:00 pm 3/5/2010) – Corrected part of the quoted post from Tom since he corrected it on BizzyBlog.

Friday Hot Read – Charles Krauthammer’s “Why the Health Care Bill is a Failure”

I don’t believe I can do a better job than Charles Krauthammer explaining the failure of PlaceboCare. I’ll “borrow” the part where Krauthammer explains why the sum is worse than the parts:

Allow me to demystify. Imagine a bill granting every American a free federally delivered ice cream every Sunday morning. Provision 2: steak on Monday, also home delivered. Provision 3: A dozen red roses every Tuesday. You get the idea. Would each individual provision be popular in the polls? Of course.

However (life is a vale of howevers) suppose these provisions were bundled into a bill that also spelled out how the goodies are to be paid for and managed — say, half a trillion dollars in new taxes, half a trillion in Medicare cuts (cuts not to keep Medicare solvent but to pay for the ice cream, steak and flowers), 118 new boards and commissions to administer the bounty-giving, and government regulation dictating, for example, how your steak was to be cooked. How do you think this would poll?

Perhaps something like 3-1 against, which is what the latest CNN poll shows is the citizenry’s feeling about the current Democratic health care bills.

However, I do disagree that the body blow was how to pay for it. The Senate had before it, at a point when they needed absolutely no Republican support and no need for what Michelle Malkin has aptly called “Wreconciliation”, a bill that did everything the Left has ever wanted out of PlaceboCare but one “minor” detail – full federal funding for and a mandate on private insurance to provide abortion-on-demand. In order to get that into PlaceboCare, they sacrificed the official public “option” (with no real change in the cost), shifted a big part of the payment of the costs from “the rich” to businesses deemed to be too generous with their health-care plans, and threw in so much bribery that the House initially blanched at taking it up.

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