Fausta's Blog

American and Latin American Politics, Society, and Culture

January 5, 2011 By Fausta

Nancy Pelosi’s biggest lie yet

The former Speaker of the House speaks lies,

Speaker Pelosi Leaves With a Whopper

At her final press conference as House Speaker, Nancy Pelosi (D-CA) said, “Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go.”

The numbers tell a different story.

When the Pelosi Democrats took control of Congress on January 4, 2007, the national debt stood at $8,670,596,242,973.04. The last day of the 111th Congress and Pelosi’s Speakership on December 22, 2010 the national debt was $13,858,529,371,601.09 – a roughly $5.2 trillion increase in just four years. Furthermore, the year over year federal deficit has roughly quadrupled during Pelosi’s four years as speaker, from $342 billion in fiscal year 2007 to an estimated $1.6 trillion at the end of fiscal year 2010.

Meanwhile, the Republicans are backtracking: Republicans Lower Goal for Cuts to Budget,

because the current fiscal year, which began Oct. 1, will be nearly half over before spending cuts could become law

Patterico asks, Do We Need a Third Party?

I’m starting to think we do. Because I don’t think the Republicans have the slightest idea what we’re all so pissed off about.

As evidence, let me cite a recent Allahpundit post about the GOP’s dithering about whether they can cut a whole fucking $100 billion from the budget:

Their excuse will be that the fiscal year, which began on October 1, will already be almost half over by the time the budgetary resolution that was passed during the lame duck runs out in March. That means they’ll only have seven months to work with this fiscal year; when they said they’d cut $100 billion, they meant the first full fiscal year that they’re in charge. But wait, you say! Shouldn’t it be fairly easy to find $100 billion to cut in an annual budget that exceeds $3.5 trillion? Well, yes — except that the GOP’s limiting itself to cutting discretionary spending (Social Security and Medicare are, as ever, completely off-limits) and even within discretionary spending they refuse to touch “security” budgets, i.e. Defense and Homeland Security. That leaves just $500 billion or so for this year to play with, and since, as Rich Lowry noted earlier at the Corner, a good chunk of that will already have been spent by the time the continuing resolution expires in the spring, they’d have to make huge cuts to what’s left in order to get to $100 billion in savings overall.

The point to ponder here, I think, is that even the highly touted $100 billion figure is just a small fraction of last year’s deficit. Even with a tea-party Congress, even with a gigantic pool of expenditures to cut from, political reality is such that not only can’t they reach that modest, largely symbolic target in seven months, they’ll actually have to move heaven and earth during the next full fiscal year to get Obama and the Senate Democrats to agree to it. This is what we’ve been reduced to — the suspense of wondering whether the new Republican majority can achieve cuts that will barely make a dent in our annual budget shortfall. Hugely depressing.

“Depressing” doesn’t begin to cover it. There really aren’t words for how absolutely infuriating this is. More and more, the temptation to leave the keyboard one is calmly typing on, and simply pound the fucking wall in frustration and dream of an armed insurrection . . . becomes something understandable rather than something we all know we should calmly denounce.

Say what you will about President Bush — whose memoir I am about 2/3 of the way through and enjoying immensely — but at least he tried to do something about Social Security. This ridiculous notion that everything that actually contributes to spending must be considered off the table — well, we have to take that notion off the table. We have to. No matter what it takes. We have to do it.

Patterico asks,

What does it take to wake these people up? Honestly?!

Does it take a third party?

It may take a third party. However, government spending, in most people’s minds, is an abstraction.

But before there is a viable third party, here’s a fact: More than half of income earners in the US do not pay federal income taxes. This means that a lot of people do not have their earnings directly decreased and seized by the government the way the earnings of the tax-paying minority are. Abstractions like federal deficits don’t hit you in the gut directly; having half (or more) of your yearly earnings taken away does. Until and unless each and every wage earner is taxed, nothing, and I mean absolutely nothing, is going to change.

24612
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Filed Under: Congress, Democrats, government, Republicans Tagged With: budget, Fausta's blog, Federal budget, federal deficit

October 17, 2009 By Fausta

Record-High Deficit May Dash Big Plans

PH2009101602971

At the WaPo, a small bit of good news from the ruinous budget deficit:
Record-High Deficit May Dash Big Plans
$1.4 Trillion in Red Ink Means Less to Spend On Obama’s Ambitious Jobs, Stimulus Policies

The federal budget deficit soared to a record $1.4 trillion in the fiscal year that ended in September, a chasm of red ink unequaled in the postwar era that threatens to complicate the most ambitious goals of the Obama administration, including plans for fresh spending to create jobs and spur economic recovery.

Not that the Democrats will stop their plans for an additional trilliion dollars’ worth of healthcare ruin, but at least there will be less spending – or so one would hope.

deficit

And more on the bright side,

In a report released Friday, Treasury Department officials said the government had spent $132 billion less than expected in August, due primarily to a drop in anticipated spending on the banking bailout.

Just the thing that puts a smile on your face, doesn’t it?

William Jacobson says, Clean Up Your Own Mess First, Mr. President, and stop blaming Bush.

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Filed Under: economics, economy Tagged With: budget, Fausta's blog, Federal budget, federal deficit

August 21, 2009 By Fausta

Friday afternoon bad news: Obama to raise 10-year deficit to $9 trillion

090821-o-logo-debtObama to raise 10-year deficit to $9 trillion

The Obama administration will raise its 10-year budget deficit projection to approximately $9 trillion from $7.108 trillion in a report next week, a senior administration official told Reuters on Friday.

The CBO was right after all,

The White House took heat for sticking with its $7.108 trillion forecast earlier this year after the Congressional Budget Office forecast that deficits between 2010 and 2019 would total $9.1 trillion.

And then,

Treasury markets have been worried all year about the mounting deficit. The United States relies on large foreign buyers such as China and Japan to cheaply finance its debt, and they may demand higher interest rates if they begin to doubt that the government can control its deficits.

Right before dumping the bad news, it was time to head out of town.

And

And but me no buts about how he inherited part of this mess from President Bush. He’s the President now, the decider. If he wanted, he could put the brakes on TARP (which is run out of the Treasury Department), which is the only recent Bush spending program he’s dealing with. All the rest — Cash for Clunkers, the GM and Chrysler bailouts, the bank bailouts, the Stimulus Bill, the Omnibus Spending Bill, and Obamacare (assuming it passes) — belong to him. He signed and/or authorized them. They’re his babies.

(Thanks to Nice Deb for the graphic)

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Filed Under: Barack Obama, business, economy Tagged With: deficit, Fausta's blog, Federal budget, federal deficit

May 26, 2009 By Fausta

US having trouble trying to sell new bonds


US bonds sale faces market resistance
The US Treasury is facing an ordeal by fire this week as it tries to sell $100bn (£62bn) of bonds to a deeply sceptical market amid growing fears of a sovereign bond crisis in the Anglo-Saxon world.

Never mind the “Anglo-Saxon world”; the problem the US has in trying to sell these new issues is that the US is spending more money than at any point in its history, and the buyers aren’t willing to chance it.

The Obama administration needs to raise $2 trillion this year to cover the fiscal stimulus plan and the bank bail-outs. It has to fund $900bn by September.

“The dynamic is just getting overwhelming,” said RBC Capital Markets.

The US Treasury is selling $40bn of two-year notes on Tuesday, $35bn of five-year bonds on Wednesday, and $25bn of seven-year debt on Thursday. While the US has not yet suffered the indignity of a failed auction – unlike Britain and Germany – traders are watching closely to see what share is being purchased by US government itself in pure “monetisation” of the deficit.

“There just isn’t enough money out there:”

“There isn’t enough capital in the world to buy the new sovereign issuance required to finance the giant fiscal deficits that countries are so intent on running. There is simply not enough money out there,” he said. “If the US loses control of long rates, they will not be able to arrest asset price declines. If they print too much money, they will debase the dollar and cause stagflation.

“The bottom line is that there is no global ‘get out of jail free’ card for anyone”, he said.

The US is acutely vulnerable because it relies heavily on foreign goodwill. China and Japan alone hold 23pc of America’s $6,369bn federal debt. Suspicions that Washington is trying to engineer a stealth default by letting the dollar slide could cause patience to snap, even if Asian exporters would themselves suffer if they harmed their chief market.

The dollar has fallen 11pc against a basket of currencies since early March. Mutterings of a “dollar crisis” may now constrain the Fed as it tries to shore up the bond market. It has so far bought $116bn of Treasuries as part of its “credit easing” blitz, out of a $300bn pool.

When the Fed first said it was going to buy Treasuries in March the 10-year yield to dropped instantly from 3pc to near 2.5pc, but shock effect has since worn off. Any effort to step up purchases might backfire in the current jittery mood.

Via Instapundit, who comments,

“I’ve bankrupted the nation, so now your only hope is to pass my healthcare plan.” That goes beyond chutzpah to the edge of pathological dishonesty. Except, I guess, that it’s not pathological if you get away with it. And so far, he has.

Prior post here.

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Filed Under: Barack Obama, business, economics, economy Tagged With: bailout, budget, Fausta's blog, Federal budget, stimulus bill

May 24, 2009 By Fausta

“We are out of money.”

Via Drudge:

In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: “We are out of money.”

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA: Well, we are out of money now.

The good news is that the President is finally realizing what millions of others had already noticed. As Naked Capitalism explains,

Obama openly says what anyone with common sense has known for quite some time: the US is broke, and will not be able to honor in full its financial and fiduciary obligations.

The question remains how the US restructures that debt and how big a haircut the debt holders will take as a part of it.

20%? 30%? More like upwards of 50% at least in real terms.

And who are these debt holders?

Anyone who has Treasury debt obligations and financial assets, from the Long Bond to the US Dollar, and financial assets guaranteed by the Federal Reserve and the Treasury.

Technically the debt will be serviced and the interest paid according to the terms of the agreements, with devalued US dollars.

The process will continue until the debt is restructured and the dollar is replaced with a new dollar. This may take some years.

Oh, don’t worry too much. There will be spin and qualifications piled upon this admission, most likely before the markets open in Asia on Monday. But this trial balloon of admission is how you start breaking the bad news to people unwilling and ill prepared to receive it.

But regardless of what is said, we are now in the endgame for a credit bubble of historic proportion.

The really bad news is that the President thinks we’re out of money due to

our failure to make some good decisions on health care over the last several decades.

Health care?

Helloooo??

What the hell healthcare? What about the bailout? The spendulus? The budget? The $12.8 trillion that the U.S. government and the Federal Reserve have spent, lent or guaranteed in the past 10 months?

Take a look at that $12.8 trillion: It’s equal to

  • 14 times the $899.8 billion of currency in circulation
  • $42,105 for every man, woman and child in the U.S.
  • an amount that approaches the value of everything produced in the country last year.
  • It is debt equal to 90% of GDP

How about some visuals, here?

wapoobamabudget1

Obama quadruples the national deficit in one year and now he realizes we’re out of money?

No. Deep down he doesn’t realize we’re out of money. Here’s the video:

OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we’ve made on health care so far. This is a consequence of the crisis that we’ve seen and in fact our failure to make some good decisions on health care over the last several decades.

So we’ve got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it’s putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don’t reduce long-term health care inflation substantially, we can’t get control of the deficit.

I fully agree with Michael Laprarie

There you have it. We have to save money on health care or else we’ll be financially ruined by the cost of Medicare and Medicaid. And only the government — presumably by forcing helping doctors to make “cost efficient” health care choices — can turn our rising health care costs around and eventually make health care less expensive (presumably while also making it equally available to everyone and miraculously innovative, via stem cells, etc).
…
The way Obama and the Democrats see things, none of the trillions and trillions of dollars they have committed to bailouts, buyouts, and pork during the last four months have contributed one bit to our current credit and debt crisis.

Prepare to have “free healthcare” shoved down our throats in the name of “saving Medicare and Medicaid.” Expect medical care rationing, and a quadrupling of current federal spending on it at the same time.

Yes, we’re out of money: But we’re not out of money because Medicaid and Medicare (their proposed budget is $737 billion, a mere 5% of the $13 trillion); we’re out of money because of exhorbitant, out-of-control government spending.

That the President doesn’t recognize that fact is the worst news of all.

UPDATE
Jennifer Rubin

We’re not in this fix because of any healthcare decisions he’s made — “so far,” mind you. But what is remarkable is the lack of personal responsibility for our current sea of red ink. No mention of the trillion dollar stimulus or the $3.5 trillion budget. And in the same breath in which he denies running up the deficit he mentions the car bailouts which he “had” to deal with. Actually, it wasn’t necessary; it was a policy choice which now has the ailing car companies permanently affixed to the public dole.

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Filed Under: Barack Obama, business, economics, economy Tagged With: bailout, budget, Fausta's blog, Federal budget, stimulus bill

April 21, 2009 By Fausta

One hundred MEEEEELLION dollars!

Perfunction has it (h/t Instapundit):

Via Ace, The New Ledger illustrates the amount.

UPDATE
Red State

obamabudgetcuts

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Filed Under: Barack Obama, economics, economy Tagged With: budget, Fausta's blog, Federal budget

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