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