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 5th, 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.

Third Annual Wisconsin Defending the American Dream Summit – 3/12-3/13

by @ 6:59. Filed under Defending the American Dream.

If it’s March, it’s time for the Wisconsin Defending the American Dream Summit. The third edition will be held at the Chula Vista Resort, primarily the 90,000-square-foot Wisconsin Dells Center, on Friday, March 12, and Saturday, March 13. Tickets are $39.99, and are available at this link.

While most of the activities will happen on Saturday, there is an opening reception Friday night. The list of confirmed speakers is rather impressive:

Vicki McKenna – WISN Radio, WIBA Radio
Lord Christopher Monckton – Columnist, inventor, and Advisor to Margaret Thatcher
Honorable James Sensenbrenner – Wisconsin 8th District
Herman Cain – Author, Radio Talk Show Host
Steve Moore – Wall Street Journal
Grover Norquist – Americans for Tax Reform
John Fund – Wall Street Journal
Tim Phillips – President Americans for Prosperity
Mark Block – AFP Wisconsin State Director
J.B. Van Hollen – Wisconsin Attorney General
Joe Wurzelbacher – “Joe The Plumber”
Eric O’Keefe – CEO, Sam Adams Alliance
Linda Hansen – Wisconsin Prosperity Network
Tim Nerenz – The Oldenburg Group
Niger Innis – Congress of Racial Equality
Dr. David Gratzer – Author, The Cure
Debra Waller – Chairman & CEO, Jockey International
Phil Kerpen – Nat.l Policy Director, AFP
Paul Driessen – APR, Esq.
Pat Synder – WSAU Radio
Fred Kelly Grant – Author, Justice My Ass
Michael Reagan – National Talk Show Host and son of President Ronald Reagan

Be there.

Hope, change, return to military commissions

(H/T – Ed Morrissey)

The Washingotn Post is reporting that key advisers in the Obama administration are set to recommend that Attorney General Eric Holder be overridden and the trials of Khalid Sheik Mohammed and several others be conducted in the military tribunal system instead of civilian courts.

It remains to be seen whether the expiration of this particular promise to the Islamokazi-appeasing Left is due more to the incredible amount of bipartisan (original meaning) backlash it has caused or a cynical deal to unexpire the promise to close Club Gitmo.

American Jihadists

If you hear the word “jihad,” what comes to mind?  Outside of an immediate thought of “Islam,” how about one of this: 

A crusade or struggle characterized by the participants willingness to sacrifice their own lives for the benefit of said crusade or struggle.

It’s now apparent that the Democrat leadership of President Obama, Nancy Pelosi and Harry, dancing on another 36,000 job deaths, Reid, have decided to do anything and everything they can to pass Placebocare.  Which version or what is actually contained in Placebocare doesn’t even matter to them anymore.  They will enact any version or combination of the government takeover of health care that they can find enough votes or contrivance of procedures to get it passed. 

The vehicle that is getting the most focus for enacting Placebocare is via reconciliation.  For the life of me I can’t figure out how they use reconciliation as there isn’t a bill that both Houses are working on.  In my mind, the only way to get Placebocare passed, as things stand today, is to convince the House to pass the Senate bill just as it stands.

Whether the Democrats attempt reconciliation, pass the Senate bill or use some other mechanism, the implications on their November prospects are the same; Horrible!  Note the following quotes and polls:

“What the President is really asking House Democrats to do is hold hands, jump off a cliff and hope Harry Reid catches them,” Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Republican Conference said.  “And, Harry Reid will have no incentive to catch them because by the time he gets to the reconciliation bill, the President will have already signed the health care bill into law.”

“It was another emphatic denunciation by [Democratic Rep. Stephanie] Herseth Sandlin of the reconciliation process, a controversial technique allowing Democratic leadership in the Senate to bypass an otherwise required 60-vote super majority. And it also was a clear rejection of the Senate version of health-care reform, approved when Democrats still had the 60 votes needed for a super majority.” (Kevin Woster, “Herseth Sandlin says no to Senate health bill, reconciliation,” Rapid City Journal, 03/04/10)

House Democrats have said they don’t trust the Senate to actto make changes to the Senate bill, which the House would likely have to pass before they’re able to take up a new bill to make changes to that original legislation.” (Michael O’Brien, “Stabenow: House and Dems hammering out final health bill details,” The Hill, 03/04/10)

 “… 48 percent saying lawmakers should work on an entirely new bill and a quarter saying Congress should stop all work on health care reform.” (Paul Steinhauser, “CNN Poll: Health care provisions popular but overall bills unpopular,” CNN, 02/24/10)

Even Howard Dean, no shrinking violet when it comes to larger government and bureaucratic controls, recognizes that budget gimmickry of Placebocare will cause the Democrats pain not only in 2010 but also in the 2012 election:

“The plan, as it comes from the Senate, hangs out every Democrat who’s running for office to dry — including the president, in 2012, because it makes him defend a plan that isn’t in effect essentially yet,” Dean said during an appearance on the liberal Bill Press Radio Show.

With the heated, negative perception of Placebocare, even amongst the Democrats themselves, a reasonable question would be, “Why, if the results are surely political death, would Obama, Pelosi and Reid push for the passage of Placebocare?”  The answer is very straight forward; the Democrat leadership is perfectly willing to commit political suicide for themselves and all those around them, if they are able to move their crusade forward.  Obama, Pelosi and Reid are American jihadists.

If you believe that my use of the term “jihadist” is nothing but hyperbole, you haven’t been paying attention.  Look at the words of Nancy Pelosi.  Numerous publications including the WSJ, have reported Pelosi telling members of her caucus that she is willing to lose seats if they can pass Placebocare.  More to the point, were the Democrats to lose the number of seats that they are now estimated to lose, Pelosi herself would certainly lose the Speaker position.

One of the confounding challenges of combating Islamic jihadists is that they don’t fear their own death.  In fact, Islamic jihadists are told that they will garner a great reward in the afterlife if they sacrifice their physical bodies.  In like manner, the Democrats are willing to sacrifice their political lives to ensure the securing a key victory in their crusade.  President Obama and Nancy Pelosi have been working hard to ensure the House jihadists that they too will receive great rewards should they lose their political life.

In the end, whether Placebocare succeeds or fails in the House will depend on one thing; will the House members choose the life they know or will they choose the rewards promised them in their political afterlife?

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