Monthly Deficit Tops $220 BILLION in February

Unbelievable, when you consider that the pre-Obama record ANNUAL deficit was $455 billion in 2008.....This administration will blow past that in about 2 months!!

The government racked up a record-high monthly budget deficit of $220.9 billion in February, the Treasury Department announced today.

The latest flood of red ink brings the total deficit for the first five months of the current fiscal year to $651 billion, far exceeding the $589 billion shortfall for the same timeframe in the last fiscal year.

The government ended the 2009 fiscal year with a record $1.4 trillion shortfall. The Obama administration has forecast a $1.56 trillion deficit for this year.

RIchest Counties are Near Washington DC

What's wrong with this picture....

6 of the 10 richest counties in U.S. are in DC area

By: David Sherfinski

Read more at the Washington Examiner: http://www.washingtonexaminer.com/local/In-the-money_-Local-counties-top-Forbes_-annual-_richest_-list-87172787.html#ixzz0hp4hRaHK

Excellent Analysis of Democrat Health Care Reform

This is Rep. Paul Ryan of Wisconsin explaining the cost problems with the Democrat's Health Care Reform - it's an excellent analysis showing that the bill will increase costs and increase deficits. Watch the whole thing (six minutes long)...

Or, if you prefer reading, here is a transcript (via PowerLine):

RYAN: Thank you. Look, we agree on the problem here. And the problem is health inflation is driving us off of a fiscal cliff.

Mr. President, you said health care reform is budget reform. You're right. We agree with that. Medicare, right now, has a $38 trillion unfunded liability. That's $38 trillion in empty promises to my parents' generation, our generation, our kids' generation. Medicaid's growing at 21 percent each year. It's suffocating states' budgets. It's adding trillions in obligations that we have no means to pay for it.

Now, you're right to frame the debate on cost and health inflation. And in September, when you spoke to us in the well of the House, you basically said -- and I totally agree with this -- I will not sign a plan that adds one dime to our deficits either now or in the future.

Since the Congressional Budget Office can't score your bill, because it doesn't have sufficient detail, but it tracks very similar to the Senate bill, I want to unpack the Senate score a little bit.

And if you take a look at the CBO analysis, analysis from your chief actuary, I think it's very revealing. This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health care entitlement at a time when we have no idea how to pay for the entitlements we already have.

Now, let me go through why I say that. The majority leader said the bill scores as reducing the deficit $131 billion over the next 10 years. First, a little bit about CBO. I work with them every single day -- very good people, great professionals. They do their jobs well. But their job is to score what is placed in front of them. And what has been placed in front of them is a bill that is full of gimmicks and smoke-and-mirrors. Now, what do I mean when I say that?

Well, first off, the bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending.
Now, what's the true 10-year cost of this bill in 10 years? That's $2.3 trillion.

It does couple of other things. It takes $52 billion in higher Social Security tax revenues and counts them as offsets. But that's really reserved for Social Security. So either we're double-counting them or we don't intend on paying those Social Security benefits.

It takes $72 billion and claims money from the CLASS Act. That's the long-term care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets.

The Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud.

Now, when you take a look at the Medicare cuts, what this bill essentially does -- it treats Medicare like a piggy bank. It raids a half a trillion dollars out of Medicare, not to shore up Medicare solvency, but to spend on this new government program.

Now, when you take a look at what this does, is, according to the chief actuary of Medicare, he's saying as much as 20 percent of Medicare's providers will either go out of business or will have to stop seeing Medicare beneficiaries. Millions of seniors who are on -- who have chosen Medicare Advantage will lose the coverage that they now enjoy.

You can't say that you're using this money to either extend Medicare solvency and also offset the cost of this new program. That's double counting.

And so when you take a look at all of this; when you strip out the double-counting and what I would call these gimmicks, the full 10- year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit.

And I think, probably, the most cynical gimmick in this bill is something that we all probably agree on. We don't think we should cut doctors 21 percent next year. We've stopped those cuts from occurring every year for the last seven years. We all call this, here in Washington, the doc fix. Well, the doc fix, according to your numbers, costs $371 billion. It was in the first iteration of all of these bills, but because it was a big price tag and it made the score look bad, made it look like a deficit, that bill was -- that provision was taken out, and it's been going on in stand-alone legislation. But ignoring these costs does not remove them from the backs of taxpayers. Hiding spending does not reduce spending. And so when you take a look at all of this, it just doesn't add up.

And so let's just -- I'll finish with the cost curve. Are we bending the cost curve down or are we bending the cost curve up?

Well, if you look at your own chief actuary at Medicare, we're bending it up. He's claiming that we're going up $222 billion, adding more to the unsustainable fiscal situation we have.

And so, when you take a look at this, it's really deeper than the deficits or the budget gimmicks or the actuarial analysis. There really is a difference between us.

And we've been talking about how much we agree on different issues, but there really is a difference between us. And it's basically this. We don't think the government should be in control of all of this. We want people to be in control. And that, at the end of the day, is the big difference.

Now, we've offered lots of ideas all last year, all this year. Because we agree the status quo is unsustainable. It's got to get fixed. It's bankrupting families. It's bankrupting our government. It's hurting families with pre-existing conditions. We all want to fix this.
But we don't think that this is the answer to the solution. And all of the analysis we get proves that point.

Now, I'll just simply say this. And I respectfully disagree with the vice president about what the American people are or are not saying or whether we're qualified to speak on their behalf. So...
(LAUGHTER)
... we are all representatives of the American people. We all do town hall meetings. We all talk to our constituents. And I've got to tell you, the American people are engaged. And if you think they want a government takeover of health care, I would respectfully submit you're not listening to them.

So what we simply want to do is start over, work on a clean-sheeted paper, move through these issues, step by step, and fix them, and bring down health care costs and not raise them. And that's basically the point.

UN Environmental Group Holds Meeting in Bali (again)

Wonder what the carbon footprint for this boondoggle will be?

The UN Environment Program, which is based in Nairobi, is convening a set of meetings this week – not in Nairobi, or New York, but at the same Bali beach resort (and convention center) where they sacrificed all that time for the greater good in 2007. Never mind the UN’s continuing campaign — in the face of its crumbling “climate science” — to restrict and control carbon emissions. Yet again, we are asked to believe the UN deserves special exemptions from its own preachings. Its conferees are jetting to Bali for the greater good of all the little folk, whose job is merely to pay the bills for such pleasures, and live with any resulting rationing and regulation. According to the Jakarta Post, some 1,500 people from 192 countries are expected to attend this shindig — where UNEP claims that envoys of some 140 governments will be present. The pre-session events (the UN goes in for a lot of those on Bali) have already begun.

Sicentists Say World May Not be Warming

See previous post on Climategate. More and more evidence is being unearthed that scientists and politicians have not been completely truthful with us on this issue.

"World may not be warming, say scientists" from the London Times, which has been doing a lot of research into this story. Read the whole thing.

Graph of Recent Federal Deficits

This is why I don't believe the White House when they claim they will fix the deficit "later."

Government Union Jobs Growing

While private industry continues to lose jobs, the number of government jobs continues to increase. This is a problem for several reasons:
1) you can't easily fire people from government jobs (even if they are incompetent or unnecessary),
2) government jobs are now paying more and giving more in benefits on average than the private sector (all of which are paid for by us), and
3) once you have a critical mass of people employed by the government, there is no incentive to reform or improve the efficiency of government.

While the private sector has lost 7 million jobs, the number of public-sector jobs has risen. The number of federal government jobs has been increasing by 10,000 a month, and the percentage of federal employees earning over $100,000 has jumped to 19 percent during the recession. (emphasis added)

Read more at the Washington Examiner: http://www.washingtonexaminer.com/politics/Public-sector-unions-bleed-taxpayers-to-help-Dems-83652517.html#ixzz0eyACifIL

Climategate

You may or may not have heard of "Climategate" -- a series of revelations about how scientific publications and government agencies have been trying to shore up claims of global warming by hiding or misrepresenting data, by not publishing scientific research that doesn't support global warming claims, and by "losing" data so that numbers can't be verified.

Two items that I remember hearing about when the original claims were made have been shown to be untrue:

• The Himalayan glaciers will not disappear by 2035. These claims were made by the IPCC (Intergovernmental Panel on Climate Change) in 2005 but the IPCC now admits they were not backed up by sufficient data.
  

• The IPCC falsely claimed that 40% of the Amazon rainforests would be wiped out if global warming continues - these claims were actually based on a study of logging and burning in forests, and had nothing to do with rainfall amounts or rising global temperatures*.

*Mean global surface temperatures have not risen since 1998, and, by some measures, have dropped since 2001.

If you would like to get up to speed on this issue, here is a good opinion piece that has lots of sources listed at the end.

Deficit Worse Than We Thought

A few days ago I posted on the record-breaking deficits for 2009 and 2010. Now the Obama Administration admits that the budget it is proposing will incur closer to a $1.6 Trillion deficit for 2010. This means that in two years of President Obama and Democrats in charge, our overall national debt will have gone up something like 30%. Here is some detail on action that Congress is likely to take this week.

The debt measure set for a House vote Thursday would raise the cap on federal borrowing to $14.3 trillion. That's enough to keep Congress from having to vote again before the November elections on an issue that is feeding a sense among voters that the government is spending too much and putting future generations under a mountain of debt to do it.

Already, the accumulated debt amounts to $40,000 per person. And the debt is increasingly held by foreign nations such as China.

Passage of the bill would send it to President Barack Obama, who will sign it to avoid a first-ever, market-rattling default on U.S. obligations. Democrats barely passed it through the Senate last week over a unanimous "no" vote from GOP members present.

To ease its passage, Democrats attached tougher budget rules designed to curb a spiraling upward annual deficit - projected by Obama to hit a record $1.56 trillion for the budget year ending Sept. 30. The new rules would require future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.

If the rules are broken, the White House budget office would force automatic cuts to programs like Medicare, farm subsidies and veterans' pensions. Current rules lack such teeth and have commonly been waived over the past few years at a cost of almost $1 trillion.

Skeptics say lawmakers also will find ways around the new rules fairly easily. Congress, for example, can declare some spending an "emergency" - a likely scenario for votes later this month to extend jobless benefits for the long-term unemployed.

Health Care Reform Still Lives

Even though most Americans don't want either version of the Health Care Reform bills passed by the House and Senate last year, they are still trying to figure out a way to pass it. But, they don't want to take out the "backroom deals" that were used to get certain Senators and Representatives to vote for the bill!! Here is a short list of some of the deals that are still in play (and remember, when they give money to one group or state, the rest of us have to make up the difference):A $300 million dollar deal for Louisiana to pay for their Medicaid costs

• Exempting Blue Cross Blue Shield of Michigan from a 40 percent tax on insurers that provide expensive health plans (other insurance companies are not exempt, and any insurance company in any state except Michigan is not exempt)
  
• An extra $500 million for Medicaid funding in Massachusetts
• An extra $600 million for Medicaid funding in Vermont
• Exempting labor unions from paying the tax on "Cadillac" (very high benefit) health plans

These are just the most egregious ones....there are many other provisions that are in the 2000+ page bills. One of my favorites is "an item that allows people who have been exposed to asbestos from a vermiculite mine in Libby, Mont., to receive Medicare assistance." Glad we have Federal laws to handle Libby, Montana!!

Options

I am not fond of Republicans or Democrats - both have had their chances to get our government under control, and both have instead chosen to increase the size and scope of our government.
However, I am tired of hearing Democrats paint Republicans as the "party of no" and say that Republicans have not offered alternatives. This is simply not true.

For a look at some Republican alternatives and ideas, check out their "Better Solutions" package and also Paul Ryan's op-ed piece in last week's Wall Street Journal.

There are lots of options for dealing with the issues that face this country - not just one.

Deficits and More Deficits

The Congressional Budget Office predicts the 2010 budget deficit will be $1.35 TRILLION, after a budget deficit in 2009 of $1.4 TRILLION. Yes, that is PER YEAR.

Compare that to the $455 Billion deficit the last year of the Bush Administration, which at that point was the largest deficit in history. That was a horrible deficit - it just looks tiny now in the face of annual deficits that are more than 3 Times the magnitude.

Since 2006, when Democrats took control of Congress (which is where money is spent), the deficit has increased 38%. It took us 60 years to get to a $10 Trillion deficit - we will be at $20 Trillion before you know it!!.

What is sad but funny about the new "spending freeze" proposed by President Obama is that the tiny part of the budget that it will affect (roughly 13%) will be "frozen" at the inflated spending levels of the last year!!

Health Care Reform - Common Sense

I really hope that Congress abandons both of the mammoth versions of Health Care Reform and starts over. Health care is an important issue that needs to be addressed but we need to use common sense when changing the system. An iterative approach makes more sense because the system is complex, most people are happy with their current coverage, and we need to be careful of the “law of unintended consequences.” There are two main problems that need to be fixed: high costs and lack of access.

Rather than have increased government supervision and control of our health care system, there are several things that could be done quickly that would begin to reduce costs. After implementing them, we can then see what further measures would be helpful.

1. Tort reform – health care costs are inflated by the high cost of malpractice insurance plus the need for doctors to practice “defensive medicine” by ordering tests and procedures solely to avoid lawsuits.
2. Increased competition among insurance companies – if we allowed insurance companies to compete across state lines, there would be more options for consumers to choose from and prices would go down. In order to foster this, a role for the federal government might be to profile 10 or 12 standard plans (with a variety of benefit levels and deductible options) that insurance companies would underwrite to, so that consumers could be better able to compare plans and see what they are really getting.
3. Allow smaller companies to band together to get cheaper and better insurance for their employees. Right now, they and their employees are at a huge disadvantage.
4. Continue to encourage people to use Health Savings Accounts to pay for their insurance and medical costs. For people who don’t have employer-provided insurance, this is one way to make buying insurance more feasible.
5. Deal with the issue of preexisting conditions. This can be tricky for a few reasons:
a. Insurance by its very nature is a way of managing risk. Companies in all kind of insurance (auto, life, etc.) charge different rates for those who pose different levels of risk. Without being able to do this, everyone pays a higher price for insurance.
b. If you just say that insurance companies can no longer rate for preexisting conditions or refuse coverage, then people will wait to buy insurance until they are sick (and why wouldn’t they?). This also will increase costs for those who are insured. And I don’t that forcing people to buy insurance just for being a citizen of the U.S. is constitutional.
c. The current system is unfair to those who have kept insurance coverage all their lives, done the right things, but lost their coverage due to loss of employment or other reasons. These people need to be able to get continuation of coverage without being subjected to preexisting conditions carve-outs. Likewise, children should be able to get health insurance (if their parents have it) without being subjected to preexisting conditions.

You could make a law that says if you have had insurance but lost coverage (due to unemployment or early retirement or whatever) then you cannot be refused or penalized for preexisting conditions. I’m sure there are other ideas and options on dealing with this critical issue.

I encourage everyone to contact your Representative and Senators and urge them to take a common sense, iterative approach to Health Care Reform.

Bank Tax - Beware

The new word from Washington is that we need to tax big banks to pay for TARP. While this may feel good from an anger standpoint, we should consider this carefully.

1. This tax would go on banks who did not participate in TARP at all. It would also go on banks who have repaid their TARP money (with interest). And remember that the government forced healthy banks to participate in TARP so that we wouldn't have a "run" on the unhealthy banks.
   
2. The tax would do nothing to get AIG and GM and Chrysler (along with GMAC) to repay the hundreds of billions of dollars we taxpayers loaned them through TARP.
3. The tax would do nothing to get back the hundreds of billions of dollars we taxpayers gave Fannie Mae and Freddie Mac in the past year, nor will it fix the problems in Fannie Mae & Freddie Mac that keep them coming back to us for more bailouts.
4. While it sounds good to tax big banks, guess who ends up paying? When entities have increased costs (like taxes) they pass them along to their customers (you and me).
5. Not only that, but if you want banks to lend more, then why are you taking away from the amount of money that they have to lend?
6. There are no restrictions on what is done with the money raised by this proposed tax – it will just go in the big pot of money that Congress likes to spend.
   

What is really sad about this is that the politicians are trying to make us feel they are doing something by blaming the big banks….all the while their friends at Goldman Sachs and AIG and Fannie Mae continue to rake in the money.

Don’t be fooled by this misdirection.

Openness and Transparency.....

This is unbelievable....makes you wonder what they are hiding. By the way, the reason they are talking about putting a new tax on banks is to help subsidize the bailouts they gave to AIG and the auto companies. (I'm sure you can figure out that any new tax on banks will be passed on to banking customers - we paid the first time in the bailouts and we will get to pay again!).

It could take until November 2018 to get the full story behind the U.S. bailout of insurance giant American International Group (AIG.N) because of an action taken last year by the Securities and Exchange Commission....

....The SEC's decision to approve AIG's request for confidential treatment got scant attention at the time. But it could spark controversy now following the release last week of 14-month-old emails that reveal that some at the New York Fed had discussions with AIG officials about how much information should be disclosed to the public about the Maiden Lane III transaction.

The New York Fed, then led by Treasury Secretary Timothy Geithner, plays a critical role in the world of finance given its close dealings with all the major Wall Street banks, many of which were counterparties of AIG.

SEC spokesman John Nestor declined to comment on the reasons for granting AIG's request to treat the exhibit as confidential.

Bad News for All of Us

There are now more government workers than "goods producing" workers (e.g. manufacturing). In the past year, the only area of job growth in the country has been government jobs.

Big Picture Perspective

I think this piece from the Wall Street Journal provides a nice frame of reference (click here).

U.S. Official Resigns in Protest of Afghan Strategy

Foreign Service Officer Matthew Hoh, a former Marine officer in Iraq, has resigned in protest over our planned escalation in Afghanistan. His background is impressive and his reasons are troubling.

But many Afghans, he wrote in his resignation letter, are fighting the United States largely because its troops are there -- a growing military presence in villages and valleys where outsiders, including other Afghans, are not welcome and where the corrupt, U.S.-backed national government is rejected. While the Taliban is a malign presence, and Pakistan-based al-Qaeda needs to be confronted, he said, the United States is asking its troops to die in Afghanistan for what is essentially a far-off civil war.

Hat tip to Polipundit.com

U.S. Dollar in Decline

As the world begins to to talk about pricing oil in a currency other than the dollar, the dollar has also lost its status as the reserve currency of the world.

Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital. The dollar's share of new cash in the central banks was down to 37 percent -- compared with two-thirds a decade ago...

...Economists believe the market rebellion against the dollar will spread until Bernanke starts raising interest rates from around zero to the high single digits, and pulls back the flood of currency spewed from US printing presses.

"That's a cure, but it's also going to stifle any US economic growth," said Schiff. "The economy is addicted to the cheap interest and liquidity."

Economists warn that a jump in rates will clobber stocks and cripple the already stalled housing market.

"Bernanke's other choice is to keep rates at zero, print even more money and sell more debt, but we'll see triple-digit inflation that could collapse the economy as we know it.

"The stimulus is what's toxic -- we're poisoning ourselves and the global economy with it."

Our rapidly increasing national debt along with expansionary spending policies (causing the U.S. government to print more money while keeping interest rates near zero) is leading the world to believe that we are no longer a reliable source of investment.

Global Warming

Are you feeling the global warming effects? Here in in Illinois we are not....Doesn't seem like the world is experiencing it either...

For the last 11 years we have not observed any increase in global temperatures.

And our climate models did not forecast it, even though man-made carbon dioxide, the gas thought to be responsible for warming our planet, has continued to rise.