Social Security Tax Cut For 2011 Adds To Stress In A Government Shutdown

The revenue lost to Social Security, about $120 billion in 2011 due to the temporary tax cut, will be reimbursed to the Trust Fund from income tax withholding, over two years, not one. That means that with annual deficit spending already at $1.5 trillion, in a shut down there's even less cash flow to count on if $5 billion in funds are being siphoned off for this purpose monthly.

TheHill.com explains here:

The tax cut will put roughly $120 billion into workers’ pockets. Perhaps $90 billion of this, or three quarters, will be spent. This could provide enough of a boost to GDP to create more than 300,000 jobs. 

Also, the Social Security trust fund will be reimbursed for the lost revenue. Under the deal that President Obama worked out with the Republican leadership, funds from general revenue will replace the lost tax revenue for the next two years. This means that the tax break will have no effect on the long-term solvency of Social Security.

Doh!

Treasury's Own Figures Show It Has Plenty of Cash Flow To Pay Seniors

[A]ccording to the Daily Treasury Statements published by the U.S. Treasury Department, the ongoing flow of federal tax revenue since the Treasury declared that it had hit the debt limit on May 16 has been more than sufficient to cover the combined costs of federal spending on interest payments, Medicare, Medicaid, Social Security, the Veterans Affairs department and federal workers wages and insurance benefits (including wages and insurance benefits for military personnel).

All the figures follow at the link here.

In 2009 Only 10.5 Million Americans Still Got Paper Checks From Social Security

Tens of millions use direct deposit instead:

[A]bout 10.5 million Americans still receive their Social Security and Supplemental Security Income (SSI) payments by paper check each month.

Read the full story here.

Obama Would Be Breaking The Law If He Stopped Social Security Checks

Obama must issue Social Security checks. They're mandatory, not discretionary.

The authority to issue Social Security checks is outside the scope of the president's decision-making authority.

He would be in violation of the law if he ordered them stopped. So would The Treasury Department. 

The Social Security trust fund receives regular infusions from income specially withheld from paychecks for the purpose. Its income is presently in equilibrium with its outflow.

Neither the president nor the Congress can lawfully interfere with this process.

The president is a scoundrel for terrorizing Social Security recipients with his idle threats.

Don't believe it? 

Read it. 

'Uncle Sam Would Not Qualify For A Home Mortgage'

So says Bill Wilson of Americans for Limited Government here:

Currently, the U.S. is paying about 3 percent interest on the $14.3 trillion debt, or $430 billion of gross interest payments every year. If we had to repay everything over the next 30 years, principal and interest owed would amount to $908 billion out of revenue every year. That’s 41.7 percent of this year’s $2.174 trillion projected tax collections.

Is that affordable? Would repayment even be possible today? Perhaps just barely. The benchmark total debt service ratio for mortgage lenders is 40 percent. Anything above that, and a prospective borrower would not qualify for a loan. So even today, Uncle Sam would not qualify for a home mortgage.

I think the situation is much worse than that.

I remember that way back in 1990 the debt service ratio for a residential mortgage loan was much lower than 40 percent. Your mortgage payment had to be no more than 28 percent of income, and all your debt payments combined, adding in automobile and credit card debt, could not exceed 36 percent of income. Higher than that and you didn't get the loan.

By that standard, the US government today isn't even close at 41.7 percent, and would be laughed out of the bank.

The over-spending must stop.

Even Bruce Bartlett Admits We're in a Depression

Here, where the 1930s is the interpretive lens through which he seems to see everything, including the prospect of fiscal and monetary tightening. Evidently he prefers a looser sphincter.

Is this former Republican sleeping with Paul Krugman?

Fascist Obama's Fascist General Electric Shill Lectures Business on Jobs

GE's Jeff Immelt lectures business on taking the lead on jobs here while cutting his own workforce 11 percent between 2009 and 2011 (here), from 323,000 to 287,000.

"Our motto shall be: Moronica for Morons!"

New Book Contradicts Obama's Story That His Mother Was Denied Health Coverage

Byron York summarizes here:

"'Though [Barack Obama] often suggested that she was denied health coverage because of a pre-existing condition,' Scott writes, 'it appears from her correspondence that she was only denied disability coverage.'"

She had health coverage, and it paid her medical bills, contrary to Barack Obama's repeated claims.

Read the complete story at the link above.

Chris Farrell Speaks Up For Cash, Glorious Cash, and Shakespeare

Here:

That’s why the time-honored tactic of diversification remains one of the more powerful ways to protect finances from the downside. Shakespeare powerfully captured the idea when, in The Merchant of Venice, Antonio tells friends that his investments cause him no worry. "Believe me, no. I thank my fortune for it, my ventures are not in one bottom trusted, nor to one place; nor is my whole estate upon the fortune of this present year. Therefore my merchandise makes me not sad."

In times of trouble, Chris likes T-bills as an inflation hedge, and investment grade corporates for return. And diversification, of course.

Another Voice Searching for the Word

Fascism:

The nexus of big government, big business and the Federal Reserve has brought us to financial ruin. The US has the ability and the resources to create a better economy for all but it won’t happen as long as we continue to look to this troika of elites for economic salvation. They cannot and will not repair the damage they have done. I don’t know how to end this triumvirate of tyranny ...

Americans generally prefer the euphemism State Capitalism, for the obvious historical reasons.

For more from Joseph Y. Calhoun, III, go here.

The Tea Party Began With Moral Outrage Over Mortgage Bailouts

Ron Klain provides a needed reminder of the forgotten origins of the Tea Party movement, here:

Although we now associate the Tea Party with a general opposition to government spending, it was mortgage-relief policies that were the target of the seminal rant by the CNBC commentator Rick Santelli in February 2009 that is credited with getting that movement off the ground: “How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?”

A striking aspect of the conservative backlash against the administration’s mainstream economic policies -- from using federal money to keep teachers on the job, to saving the domestic auto industry, to investing in job-creating public works projects -- is how much the opposition’s arguments have been based on morality and values, not economic considerations. Sure, critics offer facts and figures to challenge these policies, but the most potent weapons have been values-laden attacks about borrowing from the future, being irresponsible about spending, and failing to hold the profligate responsible for the consequences of their ways. Even direct beneficiaries of the president’s policies have pressed these moral critiques.

Klain fancies, however, that there was an equivalent moral reaction on the left to Obama's failure to prosecute wrongdoers. As genuine as it may have been, and still is, it did not translate itself into political action on a scale which did anything. It was the Tea Party which gave the Republicans a stunning and sweeping national victory in November 2010 screaming No! to Obama's policies. It entirely co-opted the left's moral pretensions.

And I rather doubt there are many leftists who would concede the right's claim to such moral equivalence with them. They still think of themselves as far superior, both intellectually and morally, to everyone else in America.

Nevertheless, while malefactors continue to go unpunished, the bailouts are a fact and have not been reversed. To that extent, the Tea Party has not been victorious at all.

It may just be my imagination, but in a better time in America left and right could have come together at a time like this to reverse these injustices. Until they do, we will live uncomfortably in a house divided.

Who Will Buy Your Crappy Ass-et: Megan McArdle, or Jesus?

Have you lost your soul? Were you just your job? Are you fit for nothing now, a drag on society, a problem that can't be solved?

Megan McArdle thinks so, and her barren, soulless assumptions lead straight to war, to the gulag, and to the ovens where the unproductive assets of humanity can be "soaked up." In the language of the dismal economist, liquidated:

"Human capital is like almost any other form of capital: it is a depreciating asset. The longer you stay out of the workforce, the less valuable you are to potential employers. You lose market intelligence and industry connections. Your technical knowledge and skills atrophy.

"I was unemployed for basically two years between . . . 2001 . . . and . . . 2003. ... I felt the isolation and the desperate fear of everyone who doesn't have a 'real job', the people who don't know how they're going to earn enough over the next forty years to keep body and soul together.  I experienced real despair for the first time in my life. And it changed me, permanently.

"... What really matters is how it changed my outlook on the world. I became afraid then in a way that has never really left me. I obsess about economic security.  I catastrophize small setbacks. ...

"There was also the crushing sense of isolation, and failure. ...

"[M]illions of people, staring into the abyss of an empty future.  We don't know how to re-employ them. The last time this happened, in the Great Depression, World War II eventually came along and soaked up everyone in the labor force who could breathe and carry a toolbag.  I hope to God we're not going to do that again, so what are we going to do with all these people?

-- Megan McArdle, here

Such is the way of death. Many are they who walk in it. But there is a way where there is no fear, where everyone is valued, not for what they do, but for who they are, for whom the future is full because God inhabits it: 

Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?

Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?

Which of you by taking thought can add one cubit unto his stature?

And why take ye thought for raiment? Consider the lilies of the field, how they grow; they toil not, neither do they spin:

And yet I say unto you, That even Solomon in all his glory was not arrayed like one of these.

Wherefore, if God so clothe the grass of the field, which to day is, and to morrow is cast into the oven, [shall he] not much more [clothe] you, O ye of little faith?

Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed?

(For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things.

But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.

Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day [is] the evil thereof.

-- Matthew 6:25-34

For whosoever will save his life shall lose it; but whosoever shall lose his life for my sake and the gospel's, the same shall save it. For what shall it profit a man, if he shall gain the whole world, and lose his own soul?

-- Mark 8:35-36

Come unto me, all [ye] that labour and are heavy laden, and I will give you rest.

-- Matthew 11:28

'The US Remains Trapped in Depression'

Ambrose Evans-Pritchard is back at it, here:

The calamitous US jobs data released last Friday leave no doubt that the US remains trapped in depression. Broad U6 unemployment rose from 15.8 to 16.2pc in June; the numbers in work fell by a quarter million to 153.4m; the average time without a job reached a fresh record of 39.8 weeks; hourly pay fell; hours worked fell; the employment/population ratio crashed to new lows of 58.2pc.

Spending Trendlines: Obama Goes Vertical

Let's play "Find the Conservative Spending Trendline."

Is it the postwar trendline of the 1940s? Can you imagine such a small government today, spending just barely $400 billion by 2015?

Or how about The Great Society trendline of the 1960s, spending $800 billion by 2015? Unfortunately its little Vietnam-guns and Medicare-butter time bombs had time delay detonators.

They went off and set the trendline established in the wake of the mid-1970s recession, oil embargoes and Iranian hostage crisis which took us all the way through Carter, Reagan, Bush 41, and Clinton. Does $2.5 trillion by 2015 sound conservative to you? All assisted by a dollar finally unglued from gold in 1971.

It certainly couldn't be George W. Bush's trendline, could it? It was an even more radical departure from the past because of added spending on drugs for seniors and two more wars. And don't even think of calling that policy "tax and spend." It was all spend. 

For an encore to that sorry enterprise, Obama has taken it practically vertical, but it can't reach escape velocity and looks doomed to crash. Which is why the man who eight months ago signed the extension of the Bush tax rate regime now suddenly wants to raise taxes as part of a debt ceiling deal this summer.

Some people define conservatism as maintaining the status quo. Some as measured, gradual change. Cutting current spending back toward the 1970s trendline, which is where Rep. Paul Ryan is trying to go, is viewed as radical by the likes of Newt Gingrich and the left. In reality, though, it's just a return to a status quo ante which for its time was anything but conservative. What this means is that so-called conservatives today find themselves reduced to defending the liberalism of the still recent past.  

  

Federal Spending and Federal Receipts 1901-2010

Tax receipts have fallen dramatically during the Panic of 2008, but spending has not. It should.

If you don't have the dough, you don't go to the show.

Unemployed? To Megan McArdle You're Just A Depreciating Asset

Here:

"Human capital is like almost any other form of capital: it is a depreciating asset."

In other words, your worth as a human being is purely economic.

Megan may have a job, but it masks a poverty of soul which lies at the heart of America's problems, where everything is fungible, including your house, and now you.

Want a vacation? Write a check on your HELOC account. Pregnancy inconvenient for your career? End it. Old people cost too much to take care of? Withhold food and water. 14 million unemployed?

"[W]hat are we going to do with all these people?"

Why, liquidate them, of course, like any other asset.

Anyone who will do anything for a job will do . . . anything.

Save your self. 

Repatriating Overseas Corporate Cash Primarily Benefits Shareholders

Claims it will boost the dollar, job growth, new investment and the stock market are exaggerated, according to Marc Chandler, here.

He points out that overseas cash may be as high as $2 trillion but that perhaps 40 percent of it is already parked in low tax havens abroad. Why move it?

Based on the last repatriation in 2004 and 2005, when about $300 billion came home, only on the most generous reading about 250,000 new jobs were created compared to a predicted 500,000, if 2003's anemic 100,000 new private sector jobs per month is the baseline. And dollar gains could just as easily be attributed to incremental 25 basis point upticks in interest rates by the Federal Reserve.

For the full argument, follow the link above.

To Hell With Clive Crook and The Financial Times

For phrases, here, such as:

"if there were any such thing as a moderate Republican;"

and

"a pathologically intransigent Republican party."

Why don't you bugger off to The Guardian or something, Clive? You'd be more happy there, fantasizing about how immune from the dark side of human nature you think you are, and how inferior you imagine the Colonies remain.

We beat you, and we'll beat you again, and again and again and again.

Landslide Vote For Israel in Congress, Except for Rep. Justin Amash and 5 Others

The vote was a non-binding resolution, a shot across the bow of the Palestinian Authority, which Justin Amash, among others, could not bring himself to support:

The U.S. House of Representatives threatened to cut off funding to the Palestinian Authority if it pursues recognition of statehood outside of negotiations with Israel.

A resolution passed Thursday night by a vote of  406 to 6 "affirms that Palestinian efforts to circumvent direct negotiations and pursue recognition of statehood prior to agreement with Israel will harm United States-Palestinian relations and will have serious implications for the United States assistance programs for the Palestinians and the Palestinian Authority."

The non-binding resolution is similar to one passed last month by the Senate. ...

Among those voting against was a freshman, Rep. Justin Amash (R-MI), who is aligned with the Tea Party and who is of Palestinian descent.

Tea Party candidates were an unknown quan[t]ity to pro-Israel groups last year and since then, the Republican leadership has endeavored to secure assurances of support for Israel from lawmakers aligned with the Tea Party.

Most have done so, although there are holdouts like Amash. The five other members who voted against the resolution were Reps. Ron Paul (R-TX), Walter Jones (R-NC), Dennis Kucinich (D-OH), Nick Rahall (D-WV) and Earl Blumenauer (D-OR).

Read more here.

Krauthammer Attempts to Define the Political Spectrum

He says, here, that a person open to both liberal and conservative views is a moderate, which would be David Brooks of The New York Times, in his opinion.

Gee, we didn't know David Brooks was open to conservative views.