Liberals Hate Middle Class: Bruce Bartlett Attacks The Mortgage Interest Deduction

Eliminating the mortgage interest deduction has become something of a fetish for liberals and libertarians in America. The enthusiasm for eliminating the deduction suggests a hatred for bourgeois values.

Liberals use it like a shield to obscure the hidden privileges they enjoy under the tax code, privileges which the vast lumpen proletariat is too dumb to understand. Extracting more revenue from their lessers so that they have more money to play with is the goal of liberals, whose constant refrain is "the money is in the middle." Actually, the money escaping taxation in America is at the top, where nearly $2 trillion of net compensation escapes Social Security taxation, amounting to a tax loss to the feds of about $300 billion annually.

Libertarians use elimination of the mortgage interest deduction more actively. To them it is like a club which they can use as a weapon to drive people from their homes in their effort to turn workers into interchangeable parts, which they can then move around wherever they need them and thus drive down the cost of their labor. If you are unemployed for a very long time because you won't move from your home, to a libertarian like a John Tamny or a Megan McArdle at The Atlantic, you are nothing but a depreciating asset, as she has put it.

Just look how Bruce Bartlett attacks the mortgage interest deduction here, misrepresenting its place not simply by singling it out but also by failing to place it within the spectrum of tax loss expenditures generally:

"The problem, insofar as tax reform is concerned, is that the mortgage interest deduction and that for property taxes reduce federal revenues by $100 billion per year."

If only that were an impressive number compared to the usual categories of tax loss expenditures.

The Joint Committee on Taxation, for example, puts the combined tax loss from deductions for health-related and cafeteria plans at $140 billion.

Tax loss from exclusion of retirement-related benefits comes to $160 billion when you include Social Security and Railroad retirement benefits, capital gains excluded at death, and pension and 401k plan contributions.

The last two together alone come to $91 billion.

Coincidently, reduced rates of tax on capital gains and dividends as a category by itself means a tax loss of nearly $91 billion, more than the mortgage interest deduction at $78 billion. 

The rich may benefit a lot from the tax perspective from the mortgage interest deduction, but they benefit more than anyone from reduced rates of tax on capital gains, and Bruce Bartlett knows it:

For most people, income is simple: it means wages or perhaps a pension or Social Security benefits. Income from capital – dividends, interest, rent and capital gains – seldom enters into the calculation. The vast bulk of such income is earned by the ultrawealthy, like Mr. Romney.

Bruce Bartlett has made it a regular habit to sniff at the proposals of Republicans, who recently restored the mortgage interest deduction plank in their platform, the real inspiration for his screed.

In this he reminds me of no one so much as Katie Couric when she went nosing around the "unwashed middle" before her ilk got hosed off in the November 2010 elections. But liberals still have a certain air about them.

I think they need another bath.

Mish Complains About "Useless" College Degrees, And Lousy Google Translate

"You're umbday in any language"

In ye good olde days, a college degree came with a foreign language requirement in addition to demonstrated facility with the finer points of English.

Holders of college degrees could reliably be counted on to read something in Italian, German or French and put it in a presentable form in their own language. In addition to knowing how to type, the skill supplements the work, say, of a financial blogger, unless your name is Mish, who has a degree in civil engineering.

On August 21 he's trying to plumb the depths of stories about the European Central Bank, noting here:

Every day I get links from Spain, Italy, Germany, and Australia. The first three frequently cause problems. Translation from German is particularly difficult.

For example, a Google-translated headline on Welt Online reads ECB chief demonstrates German banker. ...

With the help of Bran from Spain, Andrea from Italy, and "EM" from Germany I can frequently provide much better translations of foreign articles than I could otherwise.

Then three days later he complains here in a lengthy diatribe that colleges today turn out too many useless degrees:

Yet colleges churn out thousands of graduates, year after year, with perfectly useless degrees.

Clearly his own degree has failed him, not in the least because, even after all that, he still doesn't recognize it.

Education And Health: Inflation Is Highest Where Government Interferes The Most

Mish has the chart and discussion here.

Rasmussen Polling Also Shows Florida As A Must-Win For Romney

Based on Rasmussen's electoral college map tonight, Gov. Mitt Romney must win Florida to prevail against Obama.

Rasmussen shows Obama presently with 247 and Romney with 206 electoral college votes, and just six states in toss-up status (unlike RCP's ten in toss-up status): Colorado (9), Iowa (6), Wisconsin (10), Ohio (18), Virginia (13) and Florida (29).

My hunch is Obama figures Iowa is key to himself because he's counting on heavily union-dominated Ohio going his way, but Obama is so far making an effort not to telegraph this fact. Together those two toss-ups put him at 271, just enough to win. That's why he's spending so much time in Iowa after the pick of the 42 year old Rep. Paul Ryan by Romney, and why Byron York is fixated on Iowa in a recent column, but for the wrong reason. Iowa is more winnable for Obama than it is for Romney. In other words, Obama is theoretically right now conceding in a worst case scenario Florida, Virginia, Wisconsin and Colorado to Romney, which together give Romney only 267, not enough to win, because he believes he can win in Iowa and Ohio.

A Romney loss in Florida and an unlikely sweep of all the rest of these Rasmussen toss-ups means Romney still loses with 262.

Romney must prevail in Florida to win, if Rasmussen's map is correct. That's why Romney has focused on Florida right out of the box in sending Rep. Paul Ryan to Florida to appear there with his mother, reassuring the seniors on Medicare.

This election is going to be about the economy in general, but spending for Medicare is the tip of the Republican spear, while the president parries with appeals to the youth vote, which in Iowa turns out second only to Minnesota. For a state Romney at one time early decided not to contest in the primaries, Sen. Rick Santorum's narrow victory there identified Iowa to Obama as a state vulnerable for a candidate Romney.

The Des Moines Register reports here on five visits to Iowa by Obama in recent days:

The sitting president of the United States is coming back to Iowa next week to do some more campaigning, on the heels of a super-sized three-day visit to the state last week.

Obama is spending so much time in such an insignificant place because of the electoral math somewhere else, combined with the probability of winning Iowa's youth vote.

Female Domestic Violence Lawyer Used "Legitimate Rape" Phrase In '09 Newsday Article

But when Rep. Todd Akin uses it it's wrong?

Well obviously! He's a man, a Protestant, and holds an MDiv degree from a theologically conservative seminary, making him once, twice, three times a . . . baddy.

Here:

Lois Schwaeber, director of legal services for the Nassau County Coalition Against Domestic Violence, said cases where people make false reports of rape hurt all legitimate rape victims seeking justice. But she said prosecuting someone who has made a false report will discourage real rape victims from coming forward as well.

10tv In Ohio Uses "Legitimate Rape" In April 2012 Headline

But in August 2012 Rep. Todd Akin can't use the phrase "legitimate rape" and remain the Republican nominee for the US Senate from Missouri?

The story is here.

Here is the screenshot:

Female Reporter Speaks Of "Legitimate Rape" For Long Island Newsday In 2009

But for some reason Rep. Akin made a mistake using the words "legitimate" and "rape" together.

The story is here by Ann Givens:

On the one hand, they will want to discourage people from lying to law enforcement, and show that there will be consequences for doing so, experts said. On the other, they don't want to discourage legitimate rape victims from coming forward, or discourage people who lied at first from telling the truth later on, experts said.

Here's the screenshot:

Orlando Sentinel Quotes Orange County Official Saying "Legitimate Rape" In 2010

Rep. Todd Akin can't use the words together, but she can?

The story is here:

"There is potential that the recent cases involving false allegations of sexual violence will negatively influence legitimate rape victims from coming forward to receive recovery services, report the crime to law enforcement and ultimately hold their offenders accountable," she says.

Here's the screenshot:

George Neumayr: Romney And His Republicans Are Not Authentic Conservatives

So says George Neumayr for The American Spectator, here, and so do I:

An authentically conservative party would find Romney's unprincipled position far more chilling than Akin's gaffe. If unborn children gain or lose their right to life depending upon the circumstances of their conception, then the party has already conceded that that right doesn't exist. Ronald Reagan understood the implications of that concession and never wavered in his defense of the right to life of all unborn children, not just some of them. ... For all the talk about "pragmatism" and "diplomacy" this week from country club Republicans, they didn't display any towards a candidate who won a primary fair and square.

How One Conservative Voted Against Materialism And The Imperial Presidency In 1976

From Bill Kauffman, here:

[T]he Port Huron Statement, and SDS, emphasized the core principle of decentralization, of breaking overly large institutions and even cities down to a more human scale, “based on the vision of man as master of his machines and his society.”

“We oppose the depersonalization that reduces human beings to the status of things,” declared the authors. The line might have been written by another Michigan lad, Russell Kirk of Mecosta. Kirk was no New Leftist, though he did later befriend—and in 1976 voted for—Eugene McCarthy, the peace candidate of the 1968 Democratic primaries, the distributist-inclined Catholic intellectual who befuddled his conventional liberal supporters with talk of a salutary “depersonalizing” of the presidency, of reducing that office to its constitutional dimensions, shorn of the accreted cult of personality.

Mitt Romney: Today's Symbol Of The Fatal Impoverishment Of Conservatism

"[T]he conservative movement is enfeebled, intellectually and in backing, at the very hour of its popular ascendancy. (By the way, America’s bigger men of business, with very few exceptions, never have been of any help to really conservative causes; if they think of politics at all, it is much as they think of professional sports teams: 'Winning is the name of the game.') This may become a fatal impoverishment. ... 

I am not implying that conservative folk should set to forming a conservative ideology; for conservatism is the negation of ideology. The conservative public man turns to constitution, custom, convention, ancient consensus, prescription, precedent, as guides—not to the narrow and fanatical abstractions of ideology. I am saying, rather, that unless we show the rising generation what deserves to be conserved, and how to go about the work of preservation with intelligence and imagination—why, the present wave of conservative opinion will cast us on a stern and rockbound coast, perhaps with a savage behind every tree. Conservative leaders ought to declare, with Demosthenes, 'Citizens, I beg of you to think!' ...

So it is that thinking folk of conservative views ought to reject the embraces of the following categories of political zealots:

Those who urge us to sell the National Parks to private developers.

Those who believe that by starving South Africans we can dish Jesse Jackson and win over the black vote en masse.

Those who would woo the declining feminists by abolishing academic freedom through a new piece of 'Civil Rights' legislation.

Those who instruct us that 'the test of the market' is the whole of political economy and of morals.

Those who fancy that foreign policy can be conducted with religious zeal, on a basis of absolute right and absolute wrong.

Those who, imagining that all mistakes and malicious acts are the work of a malign or deluded 'elite,' cry with Carl Sandburg, 'The people, yes!'

Those who assure us that great corporations can do no wrong.

Those who discourse mainly of the Trilateral Commission, the Bilderburgers, and the Council on Foreign Relations.

And various other gentry who abjure liberalism but are capable of conserving nothing worth keeping."

-- Russell Kirk, 1986 (here)

Catholic Republicans Gang Up On Protestant Todd Akin

Laura Ingraham calls him a liar, Sean Hannity gives a prominent forum to Ann Coulter, who likens Akin to Eliot Spitzer and elsewhere calls him a swine, and Hugh Hewitt encourages him to drop out. Oh yeah, and throw in the VP nominee, well after the deadline.

Old Republican Fools For Romney

"The hoary fool, who many days

Has struggled with continued sorrow,

Renews his hope, and blindly lays

The desp'rate bet upon tomorrow."

-- Matthew Prior

Ann Coulter Champions Exception For Abortion In Cases Of Rape On Hannity

Why is it we hear the loudest shrieks for mortal sin from the mouths of Republican Roman Catholics?

The Voting-Third-Party Line of the Day from Forbes.com

“ Always vote for a principle, though you vote alone, and you may cherish the sweet reflection that your vote is never lost. ”

-- John Quincy Adams

What Do Arguments For TARP And Arguments For Romney Have In Common?

Fear.

The Growth In Income Inequality Wasn't A Bug, It Was A Feature Invented By Liberalism

If you generally tax some income at one rate and other income at a lower one, what do you think would happen over a long period of time?

Obviously you would see income shift to the category taxed at the lower rate, to the extent that this is possible for those earning it.

This is what has happened with income from capital gains, the tax rate on which has been much lower by law than the tax rates paid on ordinary income.

That's the long-term lesson from the data, the salience of which seems to elude Bruce Bartlett writing for The New York Times:

For most people, income is simple: it means wages or perhaps a pension or Social Security benefits. Income from capital – dividends, interest, rent and capital gains – seldom enters into the calculation. The vast bulk of such income is earned by the ultrawealthy, like Mr. Romney.

According to the Tax Policy Center, in 2011 those in the middle of income distribution got about 70 percent of their income from labor and only about 3 percent from capital. By contrast, those in the top 1 percent of income distribution got 30 percent of their income from labor and 35 percent from capital.

The disparity is even more pronounced when one looks at the distribution of aggregate capital income. The total came to $1.1 trillion last year. Of this, 86 percent was earned by those in the top 20 percent of households, ranked by income. But this figure is misleading, because within the top quintile, the vast bulk of capital income went only to those at the very top. ...

[T]he tax code makes a sharp distinction between income from labor and income from capital. Wages are fully taxed at rates as high as 35 percent by the income tax, plus taxes for Social Security and Medicare. In contrast, realized capital gains and dividends on corporate stock are taxed at a maximum rate of 15 percent and do not bear any taxes for Social Security or Medicare.

Income inequality in America has grown precisely for this reason, and it is an artifact of progressivism, and of liberalism generally.

The contemporary distinction between capital gains and ordinary gains got much of its impetus under FDR, when the modern tax code differentiated for the first time between capital gains held for 1, 2, 5 and 10 years, exempting from taxation 20 percent of gains, 40 percent, 60 percent and 70 percent, for the respective holding periods. Considering how steep and confiscatory marginal tax rates became after 1916, the provisions under FDR look like a bone thrown to the rich. What these reforms did, however, was cement the trend toward tax avoidance for the rich which had been introduced earlier.

Originally capital gains had been taxed as ordinary income up to a rate of 7 percent, which was the top marginal income tax rate for the first three years of the modern income tax. But as marginal tax rates on ordinary income skyrocketed after 1916, the low 7 percent capital gains rate continued to apply until 1921, after which the rate was 12.5 percent, regardless of holding period and despite the fact that marginal income tax rates soared to 63 percent and higher as the years marched on.

So from the very beginning the rich were given their privileges in tax avoidance by making distinctions between income while the broad mass of the people got soaked with income taxes on their ordinary income. The steeply progressive rates made it appear that the rich were paying their fair share when in effect they had recourse to a back door to ameliorate their condition through the capital gains code provisions. Liberalism was nothing if not hypocritical. 

If our tax policy goal today is to reduce income inequality, as seems to be the prevailing notion among liberal and liberal-leaning commentators, we ought to reconsider that history and appreciate better how tax policy is often just pushing on a string. To a conservative what leaps to mind is making taxes on ordinary income look more like taxes on capital gains income by flattening rates, not the other way around, raising capital gains rates to look more like progressive income tax rates, and broadening the base up the scale by capturing all income of all kinds for Social Security and Medicare before considering broadening the base down the scale by abolishing tax loss expenditures like the mortgage interest deduction. 

Income inequality begins with treating some forms of income differently than others for tax purposes. There may be important social and economic reasons for doing so, such as promoting family formation or capital investment, but it should never be forgotten that you will immediately be introducing inequality into the equation when you do. How you compensate for that is what matters in approximating a just society. 

Paladins of Economics Eschew the Mob and Excuse the Fed

So says Brian Domitrovic for Forbes, who thinks the Fed's bad habits are congenital.

Domitrovic calls attention to the glaring omission of monetary reform in Mitt Romney's economic proposals, about which his hundreds of recent endorsers from the economics profession have likewise said not a word:

This is a worrisome tendency in economics, on two counts. The first is that the vox populi is probably onto something. Why should the profession risk being wrong on such an important issue?

There is perhaps no institution in our government that has been so cornered by economists as the Fed. The Fed is the place most dominated by the credentialed Ph.D.’s of the profession. It would rankle economists to concede that despite this capture of the Fed by their ranks, the Fed was at fault for causing the worst economic crisis in eons. It would implicate the profession in the whole mess.

Gee, just maybe it's because the capture has gone precisely in the other direction: economics professionals profit from the status quo which puts them in the center of the system which puts them and their friends first in line for the funny money. Why do you think people so desperately worship the presidency in this society, and so desperately want to possess it?

Read the whole thing here.

Byron York Doesn't Get It: EVERY Toss Up State Matters If Romney Loses Florida

Mitt Romney can take a loss in a New Hampshire or an Iowa, give or take, but if he loses in Florida he cannot. Romney absolutely must win in every single other toss up state if he loses Florida, from Iowa to New Hampshire to Nevada to Ohio to Wisconsin to Virginia to Colorado to North Carolina, in order to win.

Iowa doesn't have a special meaning, especially now if it's really true that Michigan moves into the toss-up column as Real Clear Politics says today. Rick Santorum did especially well here in Michigan with pro-life Democrats, who also helped pick Todd Akin in Missouri, and Romney's throat cut to Todd Akin today isn't going to play well with Santorum's supporters, an incident which post-dates the poll taking Michigan out of the leaning-Obama category. The broader point is that 56 percent of Republican primary voters in Michigan picked someone other than Romney: either Santorum, Gingrich or Ron Paul. Romney might have capitalized on the new poll had he not flubbed on Todd Akin. It just shows Romney is still not a skilled politician.

Mitt Romney has emphasized protecting Medicare in Florida as a matter of first importance because he knows Florida is the key to his victory in November. If he can convince seniors there, he can convince them anywhere. Florida makes it easier to win in this bad environment, but without it, it's going to be very much more difficult.

Misguided story here.

Mitt Romney Just Lost My Vote

If anyone should quit the 2012 race it's Gov. Mitt Romney, not Rep. Todd Akin. Even with the clothespin on my nose I won't be able to do it.

Romney should quit not just for the good of the Republican Party, but for the good of the nation. Surely the Republican convention can come up with someone better than this man Romney, whose political convictions are as uncertain as Barack Obama's biography.

Otherwise Romney is certainly going to lead the Republican Party to defeat in November, just like John McCain did in 2008, and a bunch of us who haven't gone broke already will promptly do so while the likes of David Frum tell us it's no debacle. Only in the Republican Party can conservatism be transformed from opposition to the welfare state in 1965 into support for Medicare as a matter of principle in 2012. And you feared Barack Obama would transform America.

The only thing Romney is proving in the case of Rep. Akin is that Republicans once again don't know how to fight, and don't understand how politics works.

Winning parties like the Democrat Party rally around their own when they are in trouble, and at the minimum do not make things worse for themselves by joining in on the criticism of individuals who make mistakes. A good recent example is Rep. Charlie Rangel who has been censured by the US House but is still standing, and quite happily so. Republicans, by contrast, have a habit of rushing at the first sign of trouble to distance themselves from members who come under fire, and end up isolated and alone, resorting to their own devices to survive.

No one but a fool wants such for friends. The voters can smell that smell for what it is: lack of self-confidence. And then they vote accordingly.

My hunch is Missouri will have a new senator named Todd Akin come November, and America will have another four years of Barack Obama.

We deserve it.

Not Only Is Rep. Paul Ryan A Hypocritical Catholic, So Is Radio Talker Sean Hannity

Just now he said he's fairly libertarian on the issue of contraceptives and doesn't object to their use by Americans.

That's not the position of the Roman Catholic Church, to which he belongs and readily and publicly subscribes.

What we're witnessing in America isn't just the shallowness of the beliefs of rank and file Catholics, but also of their most public representatives.

Obama must be thrilled.

Water Is Nineteen Times Rarer Than Gold

"Bodies are much more rare and porous than is commonly believed: water is nineteen times lighter, and by consequence nineteen times rarer than gold . . .."

-- Sir Isaac Newton

Even On The Most Generous Interpretation Of The Data, Rep. Akin Of Missouri Is Right

There are about 6 million pregnancies in the US every year.

The wildest estimates of pregnancy resulting from rape range from as few as 200 to as many as 83,000, the latter representing many self-reported cases.

As a percentage of all pregnancies, 83,000 pregnancies represents almost 1.4 percent of the total.

Calling that rare evidently is impermissible among liberals, and frightened conservatives like Rush Limbaugh. But if 1.4 percent isn't rare, I don't know what is.

The sorriest spectacle today is how conservative talk radio is throwing Todd Akin under the bus.

Romney/Ryan Response To Akin On Abortion Contradicts Roman Catholic Teaching

Will Rep. Paul Ryan, a Roman Catholic, get a pass from the Roman Catholic Church for opposing its teaching on abortion?

In response to the inelegant remarks of Republican Senate hopeful Rep. Todd Akin from Missouri, the Romney/Ryan campaign says it does not oppose abortion in the case of rape, which is not the position of the Roman Catholic Church.

The New York Times reports, here:

The Republican presidential ticket of Mitt Romney and Paul Ryan was quick to distance itself from Mr. Akin’s remarks.

“Governor Romney and Congressman Ryan disagree with Mr. Akin’s statement,” the campaign said. “A Romney-Ryan administration would not oppose abortion in instances of rape.”

Rep. Ryan's position permitting abortion in instances of rape constitutes formal cooperation in a crime and self-excommunication according to the Roman Catholic catechism, here:

Formal cooperation in an abortion constitutes a grave offense. The Church attaches the canonical penalty of excommunication to this crime against human life. "A person who procures a completed abortion incurs excommunication latae sententiae,"77 "by the very commission of the offense,"78 and subject to the conditions provided by Canon Law.79 The Church does not thereby intend to restrict the scope of mercy. Rather, she makes clear the gravity of the crime committed, the irreparable harm done to the innocent who is put to death, as well as to the parents and the whole of society.

Rep. Akin's position against abortion in all circumstances is identical to Catholicism's whereas Rep. Ryan's position explicitly contradicts his own religion.

That's the Republican Party: where conservatives like Rep. Akin are not welcome, but open hypocrites, and fudgepackers from the Log Cabin crowd, most certainly are.

"Valuations Remain Unusually Rich"

So says John Hussman, here:

Valuations remain unusually rich on our measures . . . it should be of some concern (though it is clearly not) that the price/revenue multiple of the S&P 500 is now above any level seen prior to the late-1990’s market bubble. Prior to that time, the highest post-war peaks were in 1965 (which was not followed by a deep or immediate decline, but marked the onset of what would ultimately become a 17-year secular bear market), and 1972, just before the S&P 500 lost nearly half of its value.

The Shiller p/e bears him out (esp. the post-war peak on January 1, 1966 at 24.06 vs. nearly 23 today, and the post-war nadir of 6.64 in July/August 1982, a 72 percent decline in valuation over the course of the secular bear and the mother of all buying opportunities since the war):

The price for performance remains steep.

With "You Didn't Build That" Obama Revealed We're No Free Market Economy

Barack The Builder-Thief

Consider Sheldon Richman, here, emphasis added:

"What we have—and have had for a long time—is corporatism, an interventionist system shot through with government-granted privileges mostly for the well-connected–who tend to be rich businesspeople. This system is maintained in a variety of ways: through taxes, subsidies, cartelizing regulations, intellectual “property” protections, trade restrictions, government-bank collusion, the military-industrial complex, land close-offs, zoning, building codes, restrictions on workers, and more. As a result, people can get rich at the expense of the government’s victims. Even some who have prospered apparently by market means have actually done so through government intervention, such as transportation subsidies and eminent domain. Wealth can be transferred in many ways besides welfare and Medicaid, some of them quite subtle. Most transfers are upward."

Obama's flub in "you didn't build that" wasn't some supposed expression of disdain for free-market capitalism, but rather a too-open affirmation of the collusion which exists in America between government and business, a collusion redolent of the fascism of an earlier era.

The line was supposed to be, before it blew up in his face, a gentle reminder to his peeps that they owe their continued success to his stewardship of this system of corporatist largesse. 

In stating the obvious Obama has let the cat out of the bag and proven himself an unreliable leader for the game of charades we call the free market economy. He let his guard down and opened a window on this uncomfortable truth about America, that in economics we consider our advocates of free market capitalism analogous to the preachers of fundamentalist Christianity. It's a free country and that's all well and good, as long as you're not really serious.

Obama's mistake is that he said all that out loud. He can be replaced.

(image source)

Government Payments Like Social Security/Medicare Consume 89 Percent Of Tax Revenues

The government collects only $2.66 trillion in taxes but spends $2.36 trillion just on Social Security, Medicare, Medicaid, food stamps and the like, summed up as Personal Current Transfer Payments.

If we ran a balanced budget, that would leave just $300 billion for everything else, such as defending the country from our enemies, for which we actually spend about $700 billion currently.

Total current expenditures are running at $3.8 trillion, nearly 41 percent more than we presently take in.

On 1/1/2011 Social Security/Medicare Payments Exceeded Revenues By $329 Billion

Social insurance revenues were $906 billion on 1/1/11, but outlays for Social Security were $703 billion and for Medicare $532 billion on that date, meaning the programs were not self-sustaining, running a deficit of $329 billion.

Romney Has Ryan Reassuring On Medicare Because He Really Needs Florida To Win

The projection (here) back in the second week of April was that 124 electoral college votes were up for grabs in 9 states, with Obama at 233 and the Republicans at 181, who needed at the time 70 percent of the remaining electoral college votes to win.

Today the picture (here) shows the toss-ups reduced to 110 (still in 9 states, though a different mix), Obama up slightly to 237, and Romney up from 181 to 191, who now needs to win almost 72 percent of the remaining toss-up electoral college votes to win, according to the analysis.

In 2008 John McCain lost to Barack Obama because McCain lost in George Bush's red states of Colorado, Florida, Indiana, Iowa, Nevada, New Mexico, North Carolina, Ohio and Virginia (112 electoral college votes) by 1.4 million votes.

A Southern/Western strategy concentrating on Florida, North Carolina, Virginia, Colorado and Nevada would still leave Romney 7 electoral college votes short of 270 if he wins the currently projected 191 in addition.

Romney losing Florida would necessitate winning the 191 plus every one of the states in the toss-up category today, including New Hampshire, hence the recent Medicare emphasis in Florida where many seniors live.

An Eastern Time Zone strategy winning Florida, North Carolina, Virginia, New Hampshire and Ohio in addition to the 191 would give Romney exactly 270.

Rep. Paul Ryan Rejects Conservatism For The Government Dependency Culture

Quoted here:

"When I think of Medicare, it's not just a program, it's not just a bunch of numbers, it's what my mom relies on, it's what my grandma had."

"Medicare was there for our family, for my grandma when we needed it then. And Medicare is there for my mom, when she needs it now. And we have to keep that guarantee."

"But in order to make sure that we can guarantee that promise for my mom's generation, for those baby boomers who are retiring every day, we must reform it for my generation."

Rep. Paul Ryan And His Mother: This Is Not Conservatism

This is Republicanism defending the welfare state. This is not conservatism.

Peter Schiff Warns About Rising Interest Rates But Avoids The Sorry Truth

Peter Schiff, here:

The current national debt is about $16 trillion (this is just the funded portion...the unfunded liabilities of the Treasury are much, much larger). The only reason the United States is able to service this staggering level of debt is that the currently low interest rate on government debt (now below 2 per cent) keeps debt service payments to a relatively manageable $300 billion per year.

First of all, interest payments on the debt haven't been close to $300 billion a year since 1994. They've been above that level ever since 1994, and frequently way above that level.

In fact, interest payments on the debt have been above $400 billion each year from 2006 inclusive, except for 2009. This is important in the context of a Republican House which congratulates itself endlessly for a one-time spending cut of $38 billion.

Secondly, if we were really paying an effective 2 percent interest rate to service the debt, say in 2011, our interest payment that year would have been closer to $296 billion.

But the total US public debt at the end of the 2011 fiscal year reached almost $14.8 trillion, and interest payments on that debt were actually $454 billion, implying an interest rate in excess of 3 percent, half again as high.

That's the real lesson of rising interest rates. A 50 percent rise in interest rates from 2 percent to 3 on a pile of debt that size means an increased interest expense of $158 billion. People who think rates can't rise that much very quickly haven't been paying attention to the recent experiences of Greece, Spain and Italy. For example in Spain interest rates paid on 10yr paper lept 50 percent in six months' time this year.

In Italy they lept over 35 percent in five months' time.

Third, while Peter Schiff is surely right when he warns that rising interest rates threaten to consume government revenues, leaving nothing for essential services, the sorry truth is that our interest payments on the public debt are really more like the interest-only payments on loans people took out during the housing bubble. Those loans were DESIGNED never to require principal payments, and so the buyers of those homes never built any real equity and never were on a path to retiring those debts. That's our federal government. We NEVER make principal payments on the money we borrow, and we effectively borrow the money we need to make the interest payments, and then some.

Instead of paying $454 billion a year in interest-only payments on the national debt, we should be on a path to retiring that debt. At 3.5 percent interest for 30 years, that would mean interest AND principal payments together totaling $864 billion a year, not $454 billion. And it would also mean: NO MORE BORROWING.

Can you imagine such an America? Of $2.8 trillion in current revenues, that would leave just $1.9 trillion for the feds to spend, 50 percent less than the $3.8 trillion and climbing which they spend now.

If there were any real conservatives in America, let alone in the Republican Party, that's what they'd be telling the American people. Anyone who tells you otherwise is just a pretender.

Another Voice Saying Rep. Paul Ryan Isn't Serious About Cutting Spending

Peter Schiff:

So what was the Ryan Budget's radical departure from the status quo that has caused such uproar? If enacted today, the Ryan budget would so drastically upend the fiscal picture that the U.S. federal budget would come into balance in just... wait for it.... 27 years! This is because the Ryan budget doesn't actually cut anything. At no point in Ryan's decades long budget timeline does he ever suggest that the government spend less than it had the year before. He doesn't touch a penny in current Social Security or Medicare outlays, nor in the bloated defense budget. His apocalypse inducing departure comes from trying to limit the rate of increase in federal spending to "just" 3.1% annually. This is below the 4.3% rate of increase that is currently baked into the budget, and farther below what we would likely see if Obama's priorities were adopted.

Read the whole thing here.

Who Needs A Bullet-Proof Vest When You've Got This?

"VP Joe Biden Is A Stock Looking For A Bottom"

As just stated by Larry Kudlow on WABC Radio.

Central Bank/Institutional Gold Demand Is Running at 630 Tonnes Annualized

The pace of gold acquisition by central bankers and institutions looks to have picked up over 50 percent in Q2 2012 over the 400 tonne-pace set between March 2011 and March 2012, according to this story:

Demand for gold from central banks and official sector institutions more than doubled in the second quarter of this year to 157.5 metric tons from the same quarter a year ago, according to a World Gold Council (WGC) report released Thursday.

That marked a record quarter for central bank buying since the sector began recording net purchases in the second quarter of 2009, according to the WGC report. Central banks in Kazakhstan, Russia, Ukraine and South Korea were among the big buyers.

If You Can't Spell 'Commodities' Don't Listen To Jim Rogers

So says Jim Rogers himself, here:

"But people – if they can’t spell commodities, they shouldn’t be listening to me. They should be doing what they know about."

How To Tell Who Is Winning

If the debate we're having is about taxes, the liberals are winning. If it's about spending, the conservatives are. Just never forget that winning isn't the same thing as success.

Oil Is Still "On Sale"

Oil is still "on sale", but the discount relative to gold has declined a little bit.

The gold to oil ratio stands at 16.8, which represents a mark-down of roughly only 12 percent for oil. Gold has firmed up in the neighborhood of 1615 of late, presumably on central bank acquisitions replacing coin demand. And saber rattling and unrest in the Middle East continue to put pressure on oil prices, moving the ratio closer to the theoretical norm of 15.

We've had gold to oil ratios much higher than 15 in recent months, including hits of 19.5 and the like.  But I don't like oil and gold at any of these prices. I'm not acquiring these and I'm holding what I've got because I bought them low.

Assets remain inflated overall.

I Built This Blog, And Obama Can Kiss My Sweet German-American Ass

And I approve this message, too.

Praetorian Guard Openly Turns On Obama

The owner of a Virginia business said 'No' to a visit by VP Joe Biden because of Obama's 'You didn't build that' remark, so the Secret Service detail for Biden went in and bought a bunch of stuff to thank him, according to this local story:

Here's the back story, we’re told that shortly after Crumb and Get It told Biden’s advance people 'no' -- the secret service walked in and told Chris McMurray ''Thanks for standing up and saying 'no' -- then they bought a whole bunch of cookies and cupcakes.

McMurray said he's hoping folks will understand he just didn't want to be part of a photo op for an administration whose policies he doesn’t agree with.

GIVE US YOUR COLLEGE TRANSCRIPTS!

The New York Times Uncorks The Wildest Slur Yet Against The Tea Party

Suddenly the Tea Party is the most selfish, arrogant and yet servile lot on the planet, according to one Jennifer Burns, an assistant professor at Stanford, for The New York Times, here:

". . . the Tea Party, whose members believe they are the only ones who deserve government aid."

Wow. Haven't heard that one yet. Is that what it takes to get tenure at Stanford these days? The intimate connection she divines between the Randians and the Tea Party is, quite simply, the sort of fantasy one might expect of someone trying to find something new to say. Not that the Shruggers wouldn't like to co-opt the Tea Party. They would, and they are trying, as is the Republican Party's Dick Armey, which is enough to give anyone who has watched them from the beginning the staggers. The spontaneous revulsion of common, everyday folk in America to the designs of their elected leaders provoked the reaction which is the Tea Party, most of which is as non-ideological as a hamburger. 

I dunno, maybe she's confusing the Tea Party with Occupy Wall Street, some of whose members are infamous for demanding student loan forgiveness, and the right to poop on your stoop.

Just two years ago in Slate Mark Gimein could reasonably characterize the Tea Party as "the responsibles" who rose up against "the deadbeats", homeowners who had stopped paying on their mortgages and wanted bailouts from the Obama regime even as millions of underwater homeowners continued to pay on theirs.

I guess Jennifer is fairly new to the planet.

Russian Attack Sub Punks Obama's Navy In Gulf Of Mexico For A MONTH

Spending hundreds of billions of dollars abroad on nation building and protecting US interests in Europe, East Asia and the Persian Gulf, Obama's US Navy continues to go to hell in a handbasket, and along with it the very security of the US mainland.

A Russian attack sub operated undetected in the Gulf of Mexico for weeks in June and July, armed with nuclear-warhead-equipped cruise missiles in easy range of Kings Bay, Georgia:

The U.S. Navy operates a strategic nuclear submarine base at Kings Bay, Georgia. The base is homeport to eight missile-firing submarines, six of them equipped with nuclear-tipped missiles, and two armed with conventional warhead missiles. ...

The Navy is facing sharp cuts in forces needed to detect and counter such submarine activity.

The Obama administration’s defense budget proposal in February cut $1.3 billion from Navy shipbuilding projects, which will result in scrapping plans to build 16 new warships through 2017.

The budget also called for cutting plans to buy 10 advanced P-8 anti-submarine warfare jets needed for submarine detection.

Bill Gertz has the story here, detailing the growing threat being orchestrated by our Russian enemy Vladimir Putin in our own backyard in the Gulf of Mexico, and in the arctic. 

Romney May Well Tax Interest Earned On Life Insurance And Municipal Bonds

So says The Wall Street Journal, here, which approves as a way of helping pay for Romney's proposed across the board 20 percent tax cuts.

Without saying, of course, that this will shift costs from the rich who buy most of these bonds onto the broad base of taxpayers, in the form of higher taxes raised through property taxation. Property taxes will necessarily have to be increased because municipalities will have to pay more to borrow for spending on infrastructure, schools and the like without a ready pool of incentivized investors, i.e. the wealthy.

Municipal bonds are tax exempt for a reason: it makes borrowing cheaper and therefore taxes lower on the people who directly benefit from the spending. So what if the wealthy also benefit thereby? They should, and they do. For every bit of tax-free income the wealthy enjoy, someone somewhere has decent roads, schools and fire protection. It's not like the voters don't get to say No to such local spending. Property tax referenda are the meat and potatoes of local politics. 

This kind of cost-shifting was pretty much Romney's m/o in Massachusetts, where he made it almost an art form, increasing fees on businesses under the rubric of equalization, and on property tax payers of all kinds. Americans can probably expect the same from a President Romney, except on a much larger scale. It won't be spreading the wealth around to make people equal, it'll be spreading the taxation around, eliminating "loopholes".

Taxing interest gains from life insurance plans is a case in point. It will hurt any beneficiary of such plans, not just the rich. Think of a wife left with young children to raise, who will have just a little less left from her dead husband because she had to pay her fair share. And imagine having to pay tax on that life insurance when the buyer was counting on it to pay the taxes due on his estate so that his heirs wouldn't have to sell assets to do so. Talk about throwing a monkey wrench into the estate plans of countless millions.

Push here, and it comes out there.

Are Americans really going to vote for someone who is already getting bogged down in the weeds of tax loss expenditures? All Obama has to do in response to this is say Republicans are going to take away your tax deductions. This is not the way to sell the Republican brand.

As tax loss expenditures go, the two together add up to $90 billion annually in lost government revenue and benefit mostly the wealthy, according to an AEI source quoted in the editorial. Nevermind the $3.8 trillion we're already spending in this fiscal year is itself "lost government revenue".

Republicans ought to be saying every dollar spent by government is lost.

Don't hold your breath. 

David Stockman Misses An Opportunity: The Warfare State IS The Welfare State

The New York Times is only happy enough to run an op-ed from David Stockman, here, attacking the phony conservatism of the Republican Party since Ronald Reagan, in which he rather relishes pointing out, among other things, that when push came to shove Rep. Paul Ryan "folded like a lawn chair" and voted for TARP:

Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt. Mr. Ryan’s sonorous campaign rhetoric about shrinking Big Government and giving tax cuts to “job creators” (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.

Mr. Ryan professes to be a defense hawk, though the true conservatives of modern times — Calvin Coolidge, Herbert C. Hoover, Robert A. Taft, Dwight D. Eisenhower, even Gerald R. Ford — would have had no use for the neoconconservative imperialism that the G.O.P. cobbled from policy salons run by Irving Kristol’s ex-Trotskyites three decades ago. These doctrines now saddle our bankrupt nation with a roughly $775 billion “defense” budget in a world where we have no advanced industrial state enemies and have been fired (appropriately) as the global policeman.

Mr. Stockman never once calls this Republicanism what it is. I suppose if he had the Times wouldn't have printed it. And I don't know how he really could since his family is allied with liberal social positions anyway. Paul Ryan isn't the only phony conservative liberal around.

But the truth is (someone's got to say it) the warfare state since Reagan is another consequence of liberalism, expressed as a failure of nerve with respect to conscription. Good wars are wars for which Americans more or less readily submit to the draft, fight successfully and end relatively quickly. They have the consent of the governed and are representative wars, conducted as they are by a cross-section of the population. Bad wars don't have the consent of the governed. And so these must emphasize among other things protecting warriors and civilians, not destroying the enemy's ability to make war, and are all too often fought to draws after protracted efforts. These cannot be conducted except with compliant volunteers, who come from more or less distinct sectors of American society: the South, and poor minorities. And these volunteers require enducements in addition to a commitment from government to their safety, such as citizenship, a college education, or a pension. As in the private sector, the military's single biggest cost is personnel, which explains perhaps more than anything the drive to mechanized war in a new form, the vanguard of which is drone technology. Can The Terminator be far behind?

The war in Afghanistan would be long over if we had destroyed its infrastructure, annihilated its people, and salted its poppy fields. But we couldn't do that. That would have been a war crime. And besides, where we would get our drugs then?

Liberalism, you see.


"Yet Reason frowns on war's unequal game,
Where wasted nations raise a single name,
And mortgaged states their grandsires' wreaths regret,
From age to age in everlasting debt;
Wreaths which at last the dear-bought right convey
To rust on medals, or on stones decay."

-- Samuel Johnson

Monetarist Ambrose Evans-Pritchard Eats Keynes For Dinner, Austrians For Dessert

Frustratingly inconclusive and full of explanatory power at the same time, here:

Monetarists blame the ECB and the Fed for keeping money too tight in early to mid 2008, pushing a fragile credit system over the edge. They blame “pro-cyclical” regulators for aborting recovery ever since by forcing banks to raise asset ratios too fast. They are right on both counts.

Yet the `Austrian School’ is surely right as well to argue that a rise in debt ratios across the rich world from 167pc of GDP to 314pc in just thirty years was bound to end badly. There comes a point when extra debt draws down prosperity from the future. The future arrived in 2008.

How Would You Like A Monthly Mortgage Payment Of $72 Billion?

That's what it would take to pay off the total public debt of $16 trillion, financed at 3.5 percent, in 30 years: $25.920 trillion in total payments ($16 trillion principal/$9.92 trillion interest).

Got any collateral?