S and P 500 Downsy Daisy Upsy Daisy: Now 14 Percent Off April Highs

Another Jim Cramer machine-caused flash rally?

Watch For The Sucker Rally Starting From S and P 500 1100, She Says

“The sucker rally is what’s going to get people. Because then we’re going to implode from there.”

-- Kathy Boyle, president of Chapin Hill Advisors in New York, quoted here

People have been able to bank their gains comfortably in this cyclical bull for quite some time, but haven't because the alternative places to park profits all seem so unattractively high priced, and cash so unthinkable. Who wants to go from spectacular gains in equities to the somnolence of a money market account?

Trust me. Sleep is worth its weight in gold. And you're going to need it for what's coming.

S and P 500 Down 17.8 Percent Since April Highs

AP Reports Householders Converted to Renters Total 3 Million

With 3 million more expected by 2015:

Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press.

Read the rest of the story here, which says that the GSEs presently own 250,000 foreclosures.

Meredith Whitney's Caricature of Tea Party is Sexist and Liberal: Video and Transcript

She expressed her opinion on CNBC this morning (here is the video), saying the Tea Party is at bottom a phenomenon of unemployment, but composed mostly of freaked-out white men who've lost their jobs and their identities. She's obviously worried about it enough to offer advice to Machiavellian Democrats to defuse this supposed bomb before it's too late.

I guess she never examined the Gallup poll on the subject (here), which found that 45 percent of the Tea Party is female, is barely 5 percent more non-Hispanic white than the general population, and that the unemployment rate in the movement was lower than in the general population. Gallup concluded the Tea Party is fairly representative of the general population, unlike Whitney.

Sexist remarks start at 5:55 into the interview.

Translation: I'm a Machiavellian Democrat

Cost-Cutting and Job Creation Helped Republicans in Wisconsin

So says David Freddoso for The Washington Examiner here:

How did Republicans hold out? It hasn't hurt that Walker's reforms have dramatically helped school districts within the state save millions of dollars by abolishing the main Wisconsin teachers' union's insurance racket. Nor does it hurt that Wisconsin, under the business-friendly leadership of Walker and a Republican state legislature, created more than half of the jobs created in the United States during the month of June.

Republicans Keep Senate in Wisconsin Recalls Despite Millions Spent by Unions

The Republicans retained 4 of 6 seats in the unusual recall elections yesterday, narrowing their hold on the Wisconsin Senate to a 1 seat majority.

But two Democrats still face recalls next week. If they lose that would return the situation to the margins of the status quo ante and suggest that all the sound, fury and expense since March signified nothing, except folly.

Upwards of $35 million is being spent on the recalls, launched by angry unions and Democrats against Republicans under Governor Scott Walker who successfully pushed through legislation to curtail public union power over salaries and benefits in Wisconsin.

Read all about it at The Milwaukee Journal Sentinel Online, here:

By keeping a majority in the Senate, Republicans retained their monopoly on state government because they also hold the Assembly and governor's office. Tuesday's elections narrowed their majority - at least for now - from 19-14 to a razor-thin 17-16.

Republicans may be able to gain back some of the losses next week, when two Democrats face recall elections.

Jim Cramer's 'Machines' Cause Flash Rally, Reversing Some of Yesterday's Losses

Now 14 percent off the April highs.

S and P 500 is Almost 18 Percent Off the Recent Highs

And it's a long way back down to 683, another 39 percent.

Food Stamps in Michigan: 30K College Students Removed From Program

Who knew? Apparently that number on the program was huge, 10 times more than in other states.

New rules for eligibility are coming, requiring assets to be counted. Like lotto winnings.

The Detroit News has the story here:

Even after the recent removal of 30,000 college students from the food stamp program, close to 2 million Michigan residents — one in five — are on the program, [Brian] Rooney [Deputy Director, Department of Human Services] said.

Jim Cramer Blames The Machines

Here:

"You have to believe that it's related to the machines . . .."

Obama Talks Again of 'Balanced Approach' Meaning New Taxes, Market Tanks

CBS News reported here at 2:36 pm on the president's remarks made today after the lunch hour:

Mr. Obama noted that S and P attributed its downgrade in part to doubts about the U.S. political system's ability to act to reign in the nation's ballooning deficit and debt, and called for a "balanced approach" to deficit reduction - one that includes both tax increases on high earners and "modest adjustments" to Medicare and other health care programs.

At 1:47 pm the S and P 500 was down 56 points. At 2:18 pm it was down 67 points. By the close it stood at nearly 80 points down for the day:

Democrats Still Play The Dictator, Commit Crime Against Democracy: Attack Tea Party Over Credit Downgrade

Pat Caddell last September, referring to ramming ObamaCare down our throats:

"The Democrats had a chance to do this right — most people supported aspects of reform — but because of the way it was passed, as a crime against democracy, the country has simply not accepted it. The lies, the browbeating, the ‘deem and pass’ — all of it was a suicide mission. ...

“Democrats used to be the voice of the common man in America, not his dictator.”

The whole interview, here, is as applicable now as it was then.

China Lectures America While Failing To Comply With The Rules

From Ambrose Evans-Pritchard, here, who points out there is a dwindling supply of growth to steal from the future:

China has already pushed credit to 200pc of GDP. It cannot repeat the trick. ...

As for China's bluster, it is chutzpah and self-delusion. We all agree that the US needs to "cure its addiction to debts", but so will China soon.

China buys US debt in order to recycle $200bn a quarter in foreign reserves, hold down the yuan, and continue its mercantilist export strategy. If China had not distorted world trade in this fashion, the US would not be in such a mess.

Obama is Engineering the Decline of the American Republic

Rush Limbaugh said it, right?

No, Pete Wehner, here.

Real Clear Politics' Image of Obama Doesn't Match The Video

Are they having just a little too much fun?

We do that, but should they?

Seen here:

'And the glory of the Lord shone round about him.'

The Permabulls' Latest Ploy

You know your leg is being pulled when steep market declines are just flash crashes to be blamed on high frequency trading, but buying on the dips couldn't possibly be pre-programmed to cause flash rallies.

Have fun at the casino!  

Recent Sell-Off Was Another Flash Crash? Why isn't the Opposite a Flash Rally?

A couple of people here are blaming the market meltdown last week on high frequency trading.

Gee whiz, what isn't to be blamed on high frequency trading when 75 percent of the trading, and climbing, is high frequency?

These explanations have become a distinction without a difference.

So movements are amplified, so what? People just aren't used to the increased volatility, which is just like turning up the volume on the stereo. The music is the same, just louder.

Obama's Defeated 2012 Budget Would Have Taken Public Debt to $24 Trillion in 10 Years

TheHill.com reported the CBO projection in March here:

CBO estimates Obama's plan would produce 10 years of deficits totaling $9.5 trillion. By 2021, it would increase the debt held by the public to 87 percent of gross domestic product.

On March 18, 2011 public debt stood at $14.225 trillion, to which add $9.5 trillion over ten years, and you get nearly $24 trillion, nearly 122 percent higher than the debt at the end of 2008.

Was that "a balanced approach"?

Was Standard and Poor's wrong at $22.1 trillion? It would be more accurate to call it generous, in Obama's favor. Brow-beaten by criticism from the regime, S and P dropped the number to $20.1 trillion.

I predict that if Obama is still in office in 2015, we'll have already hit that $20.1 trillion mark by then and won't have to wait for 2021. 

EU Growth Rate 2000-2010 at 1.56 Percent

Yeah! Let's be more like Europe!

Wait. We already are.

Data here and here.

Let's Play 'Who's The Bigger Liberal: Clinton, Bush or Obama?'

In January of 1993, the total public debt stood at $4.2 trillion. By the end of the year 2000, it stood at $5.7 trillion. So Bill Clinton increased the debt by 35 percent, about 4.4 points per year.

At the end of December in 2008, the debt stood at $10.7 trillion. So George Bush increased the debt by 88 percent, about 11 points per year, a rate 2.5 times higher than Bill Clinton's.

As of August 4, 2011, the debt stands at $14.6 trillion. So Barack Obama has increased the debt by 36 percent . . . in just over one half of one term in office, not two full terms like his predecessors, or 14.4 points per year.

George Bush is clearly a bigger liberal than Bill Clinton, but Obama is already topping him by a rate of 1.3 times.  

Standard and Poor's Estimate of GDP is Way Too Optimistic

From their downgrade report:

Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3 percent and consumer price inflation near 2 percent annually over the decade. ... our downside case scenario assumes relatively modest real trend GDP growth of 2.5 percent and inflation of near 1.5 percent annually going forward.

Real GDP in the first decade of the 21st century was a pathetic, anemic 1.67 percent.

If that continues (we're at 1.3 percent right now), the gap between spending and revenues will continue to widen, increasing the size of annual deficits and adding to the total debt.

Not Triple A

Thanks, Harvard.

Story here.

Israel Is Doomed: by a Mental Disorder Better Known as Liberalism

Because even its leading newspaper can't bring itself to condemn the virulent liberal-anti-Semitism of Norway which the Utoya shooter attacked, personified in the Labor Party's AUF and one Gro Harlem Brundtland, his real target.

The obsequious apology is noted here.

Why Did Californians Have Herpes While Coloradans Had Texans?

Because Californians had first choice.

(You had to be in Colorado in the summers in the 1970s before AIDS to really appreciate this).

Senator John Kerry: Enemy of a Free Press and Free Speech

Story here, about media reporting on the Tea Party:

"The media has got to begin to not give equal time or equal balance to an absolutely absurd notion just because somebody asserts it or simply because somebody says something which everybody knows is not factual."

In other words, free speech and a free press are only for some people.

Kind of like how stop signs are only for some people, right Senator? 

Unemployment to 9.1 Percent: 25 of 27 Months At Or Above 9.0

Story here.

The broader measure called U-6 which adds the marginally attached and the part-time for economic reasons has been above 12 percent for 33 consecutive months going back to November 2008.

Fannie Mae Follows First Quarter $8.7 Billion Loss With $5.2 Billion in Second

Bailouts to date: $104 billion.

Story here.

Time Magazine's Marxists Agree: Inequality Caused The Financial Crisis

Why, even Wall Street hates inequality so much it, too, dived in obeisance.

Read it here, if you must.

Debt and leverage are so bourgeois.

Today's DOW Drop Ranks 9th For Daily Point Losses. It's Not a 'Crash'.

Wikipedia has this nice chart, among others, here:

The percentage loss was big, but won't be truly significant unless it becomes part of a larger pattern of losses like we had in the fall of 2008, which dominates this chart.

For all we know, the decline today and Tuesday was the market's verdict on President Obama's and Senator Harry Reid's expressed resolve to raise taxes in the very near future in the wake of the debt ceiling deal.

Notice, however, that the historic market lows of February and March 2003, and March 2009 are absent from this chart. Those were incredible buying opportunities which did not reveal themselves precipitously. Those lows were achieved by grinding down to them.

Cash is King: US Banks Now Hold Nearly $2 Trillion

From a fascinating story at The Wall Street Journal:

The fastest-growing asset on bank balance sheets this year is cash. Since the beginning of the year, U.S. bank holdings of cash are up 83%, or $890 billion, to $1.98 trillion. ...

BNY Mellon said that customers that have deposited more than $50 million into their accounts since the end of July will face an annual fee of at least 0.13% of the excess deposits. ...

Holding cash comes at a cost to banks. Bank of New York and others pay fees of about 0.10% to the FDIC to insure their deposits, said people familiar with the matter. ...

One place banks have turned to put their cash is the Federal Reserve. Since late 2008 it has been paying 0.25% interest on funds banks hold ... in reserve with the Fed.

Learn all about it, here.

Market Panics Just After The Nick Of Time. Have A Nice Day.

Why is Gold Climbing?

"[T]here should be no doubt that gold is reacting to competitive currency devaluation schemes of central banks."

-- Mish, here

Obama's Laser-Like Focus Vaporizes Full-Time Jobs

Get mort-ified, here.

Post-War Doubling Times For Federal Spending: Every 9 Years at 8 Percent per Year

US government spending on World War Two reached a crescendo in 1945 at $107 billion, after which spending reset to a post-war low of $36 billion in 1948.

Within 4 years, spending had doubled to $72 billion, in 1952.

It took more than 14 years for federal spending to double again, sometime between 1966 and 1967, when spending shot up on the Vietnam War and the Great Society programs under President Johnson. Spending in 1966 was $135 billion.

By 1974, just 8 years later, spending had nearly doubled again to $269 billion.

Under Jimmy Carter it took just over 5 years for spending to double again, sometime between 1979 and 1980. Federal spending reached $504 billion in 1979.

By 1987, 8 years later, federal spending had doubled again to $1 trillion under Ronald Reagan.

Federal spending did not double again until sometime between 2001 and 2002. It took more than 14 years to do so going through the Bush 41 and Bill Clinton presidencies to the presidency of Bush 43. Federal outlays reached $1.9 trillion in 2001.

Which brings us down the pike to today, when spending is projected to finish the fiscal year at $3.8 trillion, doubling in the 10 years since 2001.

That's 7 doublings in 63 years, or a doubling of US government spending every 9 years since World War Two.

According to the Rule of 72, a doubling every 9 years implies an interest rate of 8 percent per year.

In other words, federal spending has an effective rate of built-in spending increases at 8 percent per year every year since 1948.

When you consider that real GDP growth from 1930-2000 has been 3.5 percent and only slightly better than half that in the decade just past, our spending is completely out of step with reality.

(data from usgovernmentspending.com)

Jonah Goldberg Tells 'Them' Where To Go

"And yet you know the next time there’s the slightest, remotely exploitable tragedy or hint of violence, the same reporters, editors, producers, and politicians are going to insist that blood was spilled because of the right wing’s rhetoric.

Well, go to Hell. All of you."

Here.

Standards are Inimical to the Left, That's Why Ratings Agencies are the Enemy

As here at Slate.com:

"If everyone hates the credit rating agencies, why won't anyone enforce the Dodd-Frank provision to dethrone them?"

Even Ken Rogoff Knows It's A Depression But Can't Bring Himself To Say So

We're still co-dependents in the disaster when even our truth-tellers continue to insist on the euphemism which is its rhetorical basis.

Ideas have consequences, and ideas require words.

Story here.

On the knees of the gods our fates are spun.

What Baseline Budgeting Does to Spending in Ten Years

If you listen to Larry Kudlow, you know that he believes that baseline budgeting contributes only as much as 4 percent to the annual increase in spending built-in to the process.

Many others assert the number is more like 7 percent.

Let's see what 7 percent does to a budget over ten years.

Obama submitted a budget for fiscal year 2012, which was defeated in the Democrat-controlled Senate 97-0 in the spring. It called for $3.729 trillion in spending for the fiscal year 2012, set to begin in October 2011.

Let's assume his spending proposal had passed both houses of Congress without objection, and then add 7 percent to the total spending to get the next year's budget, also passed without objection, and so on for ten years.

Here are the ten annual increases, in billions of dollars: 261, 279, 299, 320, 342, 366, 392, 419, 448, and 480. The built-in new spending after ten years totals $3.606 trillion. (Coincidentally, to keep the AAA bond rating from Standard and Poor's, its Sovereign Ratings Committee was looking for $4 trillion in spending cuts today as a first step. It didn't get them.)

That gives you a total budget in 2022, ten years later, of $7.335 trillion, just $123 billion shy of a doubled budget in 10 years, and just what you should expect under the rule of 72.

This kind of doubling is fairly typical for actual spending for any ten year period you pick in the last forty or fifty years, and explains how we got into the pickle in which we presently find ourselves.

So spending increases are built-in at about 7 percent, and Kudlow is underestimating.

Growth to pay for these increases, however, is not built-in, and can never be. It's highly unpredictable and for that reason alone baseline budgeting should be abandoned.

But there's another reason. There hasn't been a single decade since the 1930s where average real growth has come even close to 7 percent, as Louis Woodhill has shown here. Our best decade was way back in the 1940s, when real growth measured 5.57 percent. We haven't done as well since.

There's only one word for what passes for America's spending policy: insanity.

We haven't ever been able to afford what we've been doing.

Radiation of 10 Sieverts Per Hour Detected Between Reactors 1 and 2 at Fukushima

The measurements were made yesterday and reported here and here.

Just 2 sieverts in an hour can be fatal.

Republicans Should Have Demanded Far More Than Reid's Cuts Because They're the Last

(Have you noticed that just like with ObamaCare, it's the Senate calling the shots on everything?)

Senator Reid's cuts are the last spending cuts anyone's going to be seeing for the foreseeable future.

From TheHill.com here:

“The numbers relative to the problem are minimal, but the directional change is huge,” said Rep. Jeb Hensarling (Texas), the chairman of the House Republican Conference.

Yeah, right.

The opposite is more like it. The next fight will be over the 2012 fiscal year budget, and Republicans will die on that hill, after which it's a long way to the election.

Democrats will dig in, having compromised on the Bush tax rates extension, new revenues in the debt ceiling debate, and spending cuts. Their attitude will be that it's time for Republicans to give in on something.

More spending cuts before the election aren't going to happen.

Let's Index the Federal Budget to Existing Housing Prices

Existing housing prices are down roughly 32 percent from the highs (see here). Many are underwater on their mortgages, but people are making do, muddling through, because they have no other choice.

Why can't government do the same?

A 32 percent cut to federal spending currently at $3.819 trillion dollars would be $1.22 trillion. That would reset the budget to $2.6 trillion.

Freeze the federal budget there and index it to the Case-Shiller housing price index. When housing recovers in value, the feds can have a similar raise. If housing values continue to decline, the feds get a similar cut.

Linking the federal budget to the health of the American dream?

Sounds fair to me.

Maybe those SOBs might do their jobs for a change.

Stabilizing Debt to GDP Ratio Requires $1 Trillion in Cuts Per Year, Not $400 Billion

So says John Chambers of Standard and Poor's Sovereign Ratings Committee here. The ratio stabilized at the current level of 75 percent would remain consistent with a AAA debt rating going forward.

The $1 trillion per year represents about 7.5 percent of GDP. With the latest report of current dollar GDP running at $15 trillion, 7.5 percent is $1.13 trillion.

Viewed another way, if we simply threw out baseline budgeting, which builds in increases to the budget each year at a rate near 7 percent, we'd be nearly home free without having to do anything.

And another way to put that is, just freeze the damn budget at current levels for a decade.

Sort of like what the average working Joe has experienced since 2000: no real wage progress. If he can do it, government certainly should.

Obama Caused the Panic, Not the Media

So says Jim Cramer. And he voted for the guy.

Video here:

"He came out and panicked the heck out of us.

"He talked about the higher interest rates for mortgages, he talked to spiking credit cards, he talked about how hard it's going to be to get a student loan. It took us all aback because we felt that he'd be a compromise leader.

"Instead, he created tremendous fear. Tremendous fear means uncertainty. Uncertainty means no spending. Uncertainty means no spending by businesses. It means no hiring. It was a setback.

"He caused the panic, not the media."


Obama went outside the experience of his enemy, Jim Cramer.

George Will Defends the Font of Serial Marriage and Other Destructive Behaviors

Here:

[T]he libertarians' argument. ... The essence of which is the commonsensical principle that before government interferes with the freedom of the individual, and of individuals making consensual transactions in markets, it ought to have a defensible reason for doing so. It usually does not.

Obama Plays 'You Choose' at The Washington Post: How Obama Can Default on Treasuries to Hurt His Enemies and Help His Friends, and Get Re-elected

I'm drinking gin on a hot Saturday afternoon, putting on my 'Evil Obama' hat and playing 'You Choose' here at The Washington Post.

Imagine you are Obama.

You want to transform America into a European socialist welfare state. The Republicans are standing in your way. They want to freeze the debt ceiling where it is to deprive you of the opportunity to follow through with your dramatic spending increases, which have tripled the annual budget deficits.

The monthly revenue stream will leave you short by something around $125 billion on average without the freedom to sell new debt.

The people who will vote for you need to get their money in a government shutdown.

The people who will not vote for you anyway must not get theirs.

You'll make your choices, and when your enemies complain they're not getting their dough, you can plausibly blame the Republicans for tying your hands.

In the process you can destroy the full faith and credit of the United States and cut her down to size, and finish the (crony) capitalists once and for all.

You can end the wars and bring home the troops (saving tons of money and improving your popularity at the same time).

You can tank the economy and get sweeping powers to spend the trillions of dollars Paul Krugman wanted you to spend in the first place (on people who will vote for you).

Does he have the guts? Or does he just want to play golf for the rest of his life?

The Tea Party Has Already Made The Democrats Blink on Tax Increases

"They’ve moved in other words, the Senate Majority Leader, far in their direction."

-- George Will, here

An excellent point, the premise of which is that politics is the art of the possible.

In point of fact not just once, either. The extension of the Bush tax rates from this crowd of left wing fanatics was no mean achievement.

The Tea Party speaks for many in wanting the deficit spending to stop. In view of the fact that deficit spending and enthusiasm for taxation are the cornerstones of the opposition, getting Democrats to relent on taxes late last year and again now is pretty good for just 20 or 30 fiscal extremists in the US House.

It should remind us all that imagination is important to political success. Michael Steele didn't have any in early 2010 when he opined that Republicans probably couldn't take back the House. Boy was he mistaken.

It would be a mistake to stop imagining that we can reduce spending. The only caveat is whether Obama  possesses enough character to refrain from defaulting on the debt. If he doesn't and does default, it could be blamed on overreaching by the Tea Party.

At a minimum, Obama's persistent extreme rhetoric threatening such a default should trouble more people. Even left of center types here and there are upset by his behavior, which is a good sign. It is nothing short of disgraceful that a president should talk this way, and it gives everyone over the age of forty pause.

I say that's a tactic, not a promise. Obama is going outside the experience of the enemy, one of Alinsky's rules.

The Tea Party should keep pressing the issue. And Republicans need to buck up and go on the rhetorical offensive. The farthest they should go is a clean debt ceiling increase of $1 trillion, which buys more time but doesn't give the president the space he wants, and needs.

The next crisis date is October 1, by which time we must have a budget agreed to by the Democrats to fund the next fiscal year. 

GDP Revisions Beg The Question: Did Obama Really Avert a Depression?

I don't see how anyone can believe that nonsense.

GDP 2008: - 0.3 percent

GDP 2009: - 3.5 percent

GDP 2010: +3.0 percent

There's a nice summary here.

Despite the unprecedented way in which George Bush and then Barack Obama jettisoned capitalism, unleashing torrents of bailouts, credit and federal manipulation during the market meltdown in 2008 and 2009, GDP ended up posting back to back years of negative growth anyway.

When you have back to back quarters of negative growth, they call it a recession.

When you have back to back years of negative growth, they call it a depression.

We had a depression.

One can plausibly argue that 2010's + 3.0 percent GDP imprint is evidence that the federal deluge got us out of the depression, but it didn't avert it. We had a depression. We spent gobs to get out of it. And now for the first half of 2011 GDP is stalled at 0.4 and now 1.3, jobs aren't coming back, housing continues to sink, prices of essentials are rising, kai ta loipa.

Krugman and company thought we didn't spend anywhere near enough to get out. Well, we did, just not enough to get Obama out to 2012, that's all!

A quick, dirty depression arguably would have been better. Instead, we've got this, including a nasty argument about paying for all the borrowing to finance it.

'Things Always Look Darkest Before They Go Completely Black'

Yves Smith at Naked Capitalism here has a fairly low opinion of the regime's default scare tactics:

[U]tter failure of the Treasury or Fed to make any reassuring noises or discuss contingency plans is making rattled nerves much worse than they need to be.

Come Over to the Debt Side

Q2 2011 GDP at 1.3 Percent, Q1 Revised Down Into the Tank to 0.4 Percent

Just how does Q1 go from 1.8, to 1.9, to 0.4? That's an error of only 79 percent.

Q4 2010 also was revised down, to 2.3 percent from 3.1 percent. That's an error of 26 percent.

And revisions going back to 2007 when the Dems took over the Congress under George Bush are even worse, saved for the end of July while everyone's on vacation and not paying attention. And of course it's Friday.

Which reminds me. I neglected to do Bank Failure Friday last week. There were some, but sometimes reporting on it feels like writing an obituary, and last Friday was filled with too much death already.

The GDP story is here.

Obama Regime's Default Alarmism is Straight out of Saul Alinsky

Caroline Baum notices that the Obama regime is acting strangely:

Instead of dangling the default threat every chance they get, Obama and Geithner should be telling the world that the U.S. has every intention, and the resources, to meet its debt obligations. They should shout it from the rooftops, put a banner on the Treasury Direct website, and use the Sunday talk shows to reassure investors, not frighten them.

Rule 3 for Radicals: Whenever possible, go outside the experience of the enemy.

And make no mistake about it, you are the enemy.

Another Voice Wrongly Claiming 'The Money is in the Middle'

Brian Wesbury at The DC, here:

What most people don’t realize is that the U.S. has gorged so much (boosting spending from roughly 18% of GDP in 2000 to 24% of GDP today), that the only way to pay for it is to tax the middle class. ...

The money is in the middle. And the only way our politicians can get it is to follow Europe’s lead and institute a national sales tax or Value-Added Tax (VAT). This is the elephant in the room that is never talked about. Those who are using the debt ceiling in an attempt to cut spending are actually saving the middle class from tax hikes — not the millionaires and billionaires.


It's a frequently repeated claim that the money is in the middle, but it's just not true, no matter how often  it is said.

If all the (reported) income in America were poured into a giant hour glass, you'd have to start it and wait about twenty minutes to begin to visualize how all the money is actually distributed.

A snapshot taken at that moment would show $5.7 trillion in adjusted gross income still in the top, and $2.8 trillion in AGI in the bottom. The kicker is that 35 million tax returns split what's on top, while the remaining 105 million tax returns, 75 percent of the total, divvy up what's on the bottom.

The money's definitely not "in the middle."

It's hard to get agreement on what's middle class in America, especially since it is a conceit of our society that everyone is middle class. The rich aspire down to it to escape notice, the poor up to it to escape the indignities of dependence.

But no matter what smoke anyone tries to blow up your bottom, the biggest single pile of money remains with the top 25 percent:

Top 10 percent = 14 million tax returns (10 percent of the total) = $3.9 trillion in AGI
The next 25-10 percent = 21 million tax returns (15 percent of the total) = $1.8 trillion in AGI

The next 50-25 percent = 35 million tax returns (25 percent of the total) = $1.7 trillion in AGI
The bottom 50 percent = 70 million tax returns (50 percent of the total) = $1.1 trillion in AGI.

It's ridiculous to think that a VAT tax will somehow generate huge piles of new tax revenue on the backs of the middle class.  The VAT will hurt them just like Social Security and Medicare taxes hurt them because it's regressive, not because they have a lot of untapped money they're going to be parting with.

Considering how much tax evasion there already is in America of the unreported income variety, variously estimated (here at $2 trillion, resulting in a tax gap of $500 billion), a VAT will fail simply because it will drive more and more of the economy underground where cash is king and credit cards, checks, invoices and receipts are anathema. Think of it as the inverse of how the rich escape high rates of taxation, for example by shifting to capital gains away from ordinary income. A quicker way to become Greece I cannot think of.

Setting money free to move around openly is the key to an effective tax policy. But bringing it out into the open where it can be captured and taxed depends on perceptions of fairness.

As long as too many people think some people should pay taxes at a higher rate just because they have more, we're not going to get there. 

Gro Harlem Brundtland, Left Wing Anti-Semitic Fanatic, Was Breivik's Target

The following was reported here:

"Anders Behring Breivik had plans to come to Utoeya (island) while Gro Harlem Brundtland was visiting on Friday, but claims under interrogation that he was delayed," Aftenposten reported on Monday, citing unnamed sources.

The newspaper said the 32-year-old right-wing fanatic wanted to "hit Gro".

Breivik's Target at Utoya, Gro Harlem Brundtland, A Long-Time Norwegian Anti-Semite

From Preachers of Hate: Islam and the War on America by Kenneth R. Timmerman (2004):

"The Nazi references emerge frequently and easily in today's Norway, and they are directed mainly at Israel, but also at the United States. At a huge demonstration in central Oslo to protest Israel's independence on April 20, 2002, former Labor Party prime minister Jens Stoltenberg addressed pro-Palestinian groups waving Nazi flags. Without blinking, he endorsed their cause. 'There is one occupant, and one occupier,' he told them. (It was his party, under the leadership of Gro Harlem Brundtland and Foreign Minister Johan Holst, that oversaw the Oslo Declaration of Principles in September 1993.) The former leader of the center-left Center Party, Gunnar Stalsett, now the state-appointed Lutheran bishop of Oslo, addressed a crowd of anti-Israeli demonstrators waving Nazi flags on April 6, 2002. 'He asked that they pull down the swastikas before he spoke,' an Israeli diplomat in Oslo told me. When the crowd kept on waving them, he spoke anyway. ...

"Anti-Israel demonstrations and Israeli 'misdeeds' in the West Bank and Gaza get extensive coverage in a Norwegian press whose brazen anti-Semitism goes way beyond any tolerable expresssion of a political disagreement with Israel. For years, Norwegian reporters and cartoonists have compared Israel to Hitler's Third Reich and have used classical anti-Semitic themes that arguably should be outlawed under Norway's 1975 hate crimes legislation." (pp. 239f)

"Labor Party heavyweights began traveling to Lebanon to pay homage to Arafat. Among them were Thorvald Stoltenberg, the future foreign minister, and Gro Harlem Brundtland. Although she was older than the 1968 generation radicals, Brundtland took them under her wing. Under her leadership, many of the former Socialist Left Party activists joined the Labor Party. She promoted them to the party leadership, while adopting their anti-Israel agenda. In April 1983, when Brundtland headed the Association of Scandinavian Labor Parties, she invited Arafat to visit Stockholm. It was a major diplomatic coup that broadened his support in Europe. After an eight-month initial stint as prime minister in 1981, Brundtland twice returned to power, from May 1986 to October 1989 and, again, from September 1990 to October 1996, when Oslo was negotiated and implemented.

"One of the former Socialist Left Party activists promoted by Brundtland was Einar Foerde, who eventually became head of the Norwegian National Broadcasting Company. Until his retirement in 2001, "Foerde continued the tradition of picking key persons who shared his political views and placing them throughout the NRK," says Jan Gregersen. Another hard-leftist Brundtland brought into the Labor Party fold was Terje Roed-Larsen, the anti-Israel Communist from the Palestinian Front." (p. 245)

Why Isn't Sen. Reid's Bill DEAD ON ARRIVAL IN THE HOUSE?

Well, why isn't it?

The Republicans haven't been doing this right at all. They continue to act like earnest young men who believe if they keep acting, keep trying, keep changing, keep talking, they'll somehow convince the upper chamber to move.

Instead all they've proven is that they don't mean business.

They pass a budget which gets tabled in the Senate, A BUDGET WHICH ISN'T BALANCED, and assumes a revenue shortfall of $1 trillion in fiscal 2012.

Then they suddenly feel compelled to pass a debt-ceiling measure to cut spending, which gets tabled in the Senate. The time to cut spending and balance the budget was in the budget phase, not the debt-ceiling phase. Had they passed a balanced budget, they could have legitimately claimed to have no need even to address the debt-ceiling issue. 

Now they're going to pass an alternative to the debt-ceiling measure, which is going to get tabled in the Senate, after which the Senate will finally pass something of its own.

The House should declare it dead on arrival, pass a simple debt-ceiling increase of, say, $1 trillion in response, adjourn and call it a day.

Let the Senate table that. Or Obama veto it. Either way, the LACK OF SERIOUSNESS of the Dems and this regime would finally be exposed.

That's how you play chicken, and win. 

Employment Deterioration Under Obama More Than 2 Times Worse Than Under Bush

Louis Woodhill has the numbers here:

Over Bush 43′s two terms in office (96 months), America lost ground with respect to full employment by an average of 94,000 jobs per month, for a total of 9.1 million positions. During Obama’s first 29 months in office, the U.S. moved an additional 6.0 million jobs away from full employment, equivalent to an average rate of 206,000 per month.

So, in terms of the rate of employment deterioration, Obama’s presidency has been more than twice as bad as George W. Bush’s. ...

In June 2011, America had 2.9 million fewer people working than when Obama was inaugurated.

The Home Appraisal Business Has Been Screwed Up Since the 1930s

For all the gory details of yet one more long, failed experiment in fascism, American style, see the story by Steven Malanga, here.

Some Money Market Funds Increase Liquidity By Over 40 Percent, Lighten Up On Treasuries

As reported here:

Money market funds are avoiding the one-month Treasury notes which mature on August 4 and August 11. “Those are the securities most vulnerable to some sort of change,” said Joseph Abate, strategist at Barclays Capital. ...

Money market funds, which hold $338 billion of US government debt, according to Citigroup, are also reducing the amount of time they are willing to lend. This could raise funding concerns for banks, as they are reliant on short-term borrowing in the repurchase or repo market.

Crimes Against Humanity Conviction Would Net Breivik An Extra 9 Years in Jail!

The maximum of 21 years behind bars would go all the way up . . . to 30.

As reported here.

Those Norwegians really know how to hurt a guy.

In a country that wasn't itself completely insane, the preparations for the execution of the self-confessed murderer would already be underway.

John Sununu: Protecting 3 Million From Obamacare With Waivers Proves It's a Clinker

Here.

Shadow Inventory has Grown Over 67 Percent Since 2009 to 3.35 Million Units

Daniel Indiviglio has a nice chart and data from Laurie Goodman showing this, here.

So What if We Become Japan!

"What matters is whether investors really believe that they will be stiffed. In Japan they did not, and still do not."

-- Ambrose Evans-Pritchard, here

The thing is, ZIRP has been stiffing us for quite some time now. And the dollar is down nearly 25 times since 1971 alone.

The phrase "Federal Reserve policy" has been a synonym for screwing the American taxpayer . . . since 1913.

Obama Admits It Again: He's Tempted By Tyranny, and Disrespects Limits

"The idea of doing things on my own is very tempting, I promise you, not just on immigration reform." (quoted here yesterday)

Here's The New York Times in March: Mr. Obama has told people that it would be so much easier to be the president of China.

And, of course, at the age of nine being prime minister of Indonesia already looked pretty good, according to this in April: His mother's ambition was clearly not lost on the future US president. When his Indonesian stepfather asked him once what he wanted to be when he grew up, he was probably expecting him to say an airline pilot or an athlete. "'Oh, prime minister', Barry answered,'" wrote Ms Scott.

The hunger for power evidently began early. But its possession now apparently does not satisfy. What's especially disturbing is the frustration Obama keeps expressing with the limits we place on presidential power in America. He's frequently seen bowing to foreign leaders. Why not to the constitution?

Nothing in it prevented FDR from seeking a third term, and then a fourth, except respect for the long tradition of the unwritten rule of laying down power voluntarily after two terms, going back to the example of George Washington. The 22nd Amendment to the Constitution, ratified in 1951, was the people's response to the lack of self-control FDR showed by his actions.

Obama would do well to consider that more seriously, and these words from our Declaration of Independence:

A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

The Red Army Faction Mass Violence Thought For The Day

While everyone jumps on the bandwagon to vilify what happened in Oslo as somehow inherently right-wing, let's all think back to 1968 for a moment:


"If one sets a car on fire, that is a criminal offence. If one sets hundreds of cars on fire, that is political action."

-- Ulrike Meinhof

"Norway, Israel and the jews"

For everything anti-Semitic and anti-Israel in Norway, I highly recommend "Norway, Israel and the jews," here.

The AUF of Utoya Fame is Completely Radicalised Against Israel

Seen here:

Labor Youth not only subscribes to a Manichean perspective on the Israel-Palestine conflict – they are baying for the conflict to increase. Christian People’s Party does not approve.

Vårt Land offers the article “Labor Youth is playing at war” by journalist Johannes Morken. Excerpt:

Labor Youth leader Eskil Pedersen demands that Norway positions itself “even more clearly on the side of the Palestinians”. This makes CPP-youth leader Elisabeth Løland to mobilize against Labor Youth.

- The conflict has been going on for decades and has destroyed the lives of many humans, both Israelis and Palestinians. This is not a football match where one selects a side to support, and then to cheer every time they score a goal, says Løland.

Run sister, run, you’re doing good. As for Eskil Pedersen of Labor Youth, you know full well how your brethren are faring under the loving rule of Hamas and PA alike, and yet, in order to be sufficiently radical and tough, you choose to look the other way. That’s the kind of creature you are, you and Anette Trettebergstuen alike.

Jewish Children In Oslo Schools Report The Most Harassment

Gee, I wonder why. Just maybe because anti-Semitism, the preferred pose of Norway's Labour Party and its youth arm, the AUF, is pandemic in Norway, thanks to Gro Harlem Brundtland. Imagine that. A doctor spreading a disease.

Excerpted from a news report in June:

Students with ethnic Norwegian background were the least harassed, but the rate of harassment rose in line with the number of non-Norwegian students at their schools.

Most worrisome for school and city officials was the high level of Jewish students, 33 percent, who reported harassment at least two to three times a month. That compares to 5.3 percent of Muslim students who said they’d been harassed. Fully 9 percent of the students responding said they’d been harassed at school because of their religion or faith, while Christians experienced the least harassment. ...

More than half of the students, 52 percent, said they’d experienced that the word jøde (Jew) was used to describe something negative. Fully 41 percent confirmed having heard jokes about Jews at school and 35 percent had noticed generally negative commentaries on Jews. As many as 5 percent had heard other students deny that the Holocaust occurred during World War II.

“Respect, tolerance, equality and inclusion must be made crystal clear in the schools’ educational program,” said director Astrid Søgnen of the city’s department of education.

What a joke. Whether it's under fascists like Quisling or communists like Labour, anti-Semitism finds fertile ground to flourish and grow in Norway, no matter what.

Oslo/Utoya: The overall toll in the attack now stands at 76 instead of 93.

The latest here.

What's The Difference Between The Utoya Shooter and Bill Clinton?

One besieged and killed 76 people, including more than 20 children, and the other is a Norwegian.

The Utoya Shooter Also Lifted Broadly From The Unabomber

It won't get much attention, since the liberal effort already is to smear Fjordman, Gates of Vienna, Jihad Watch, Pam Geller, Brussels Journal, et alia, but the shooter's manifesto also lifted broadly from the Unabomber, according to Scott Shane for The New York Times, here:

Mr. Breivik’s declaration did not name Mr. Kaczynski or acknowledge the numerous passages copied from the Unabomber’s 1995 manifesto, in which the Norwegian substituted “multiculturalists” or “cultural Marxists” for Mr. Kaczynski’s “leftists” and made other small wording changes.

Don't study mathematics, kiddies. You wouldn't want to grow up to be a terrorist now would you?

And while we are at it, the post-war right in America has never drawn any inspiration from utilitarianism and John Stuart Mill either, unless, of course, you include libertarians on the right. Many of us never have, don't now, and won't in future. One reason being that some of them have a nasty habit of being anti-Semitic, just like the Norwegian Labour Party and its youth wing, the AUF. Another being, for example, Mike Gravel.

Utoya Shooting Survivors So Brainwashed By AUF Anti-Semitism They Mistook The Atrocity For A Staged Object Lesson

"Several young survivors of the massacre reported that they initially took the shooting by the killer who was dressed as a cop for a simulation of Israeli crimes against Palestinians in the occupied territories."

As reported here:

Mehrere jugendliche Überlebende des Massakers berichteten, dass sie die Schießerei des als Polizist verkleideten Mörders zunächst für eine Simulierung israelischer Verbrechen an Palästinensern in den besetzten Gebieten hielten.

But you can bet no one will call what Norwegians have let happen to the minds of these young people a crime.

A Credible Republican Candidate For President in 2012. . .

. . . will be first and foremost the one who forthrightly repudiates the legacy of George W. Bush.

Democrat Intransigence: To Go On Spending As If There Were No Problem

Jack Kelly notes here that revenues have never been enough to match spending, going all the way back to WWII:

The problem is spending. Outlays rose from $1.863 trillion in FY 2001 to an estimated $3.819 trillion in this fiscal year, 105 percent in 10 years. The federal government now consumes 24 percent of the gross domestic product. (Since 1903, federal spending has averaged a hair over 20 percent of GDP). ...

Since World War II, federal tax revenues have averaged 18 percent of GDP. Income tax rates varied widely during this period, and there were both booms and busts. But tax revenues never exceeded 20.6 percent of GDP. That seems to be a ceiling -- no matter what economic conditions are or how high rates are raised -- and it suggests the budget cannot be balanced unless spending is held below 20 percent of GDP.

So tax hikes can't close the budget gap. But they could clobber the moribund recovery, making the deficit worse.

Democrats want Republicans to accept real tax hikes in exchange for mostly phantom spending cuts. Because they are unwilling to do so, many journalists describe Republicans as "intransigent." But the truly intransigent, it seems to me, are those who want to go on spending as if there were no problem.

None Dare Called it Learned

Except for "Aaron," a non-religious Jewish Democrat who thinks George Bush is a war criminal.

Aaron "also didn't know that his same-sex attraction, far from being inborn and inescapable, was a thirst for the love that he had not received from his father, a cold and distant man prone to angry outbursts, coupled with a fear of women kindled by his intrusive and overbearing mother, all of which added up to a man who wanted to have sex with other men just so he could get some male attention. He didn't understand any of this, he tells me, until he found a reparative therapist whom he consulted by phone for nearly 10 years, attended weekend workshops, and learned how to 'be a man.'"

Gary Greenberg for Mother Jones tries to remain sympathetic, here.

Author Admits Norway is Racist, Never Mentions It Is Official Labour Policy Towards Israel

Everyone is ignoring the anti-Semitic elephant in the world's living room.

"Casual racism is rife. Only in Norway have I heard someone order a taxi and request that the driver is white. News reports can display an unwitting racism that is shocking to British ears."

-- Anthony Browne, Mayor of London's Re-election Campaign, here

Camp Utoya Day Before The Shootings: A Seething Cauldron of Anti-Israelism

As seen here and here and translated by Google (italics added for emphasis):

Jonas Gahr Store: - The occupation must end, the wall must be demolished and it must happen now

21. July 2011, at. 5:42 p.m. | | By: Eivind Funds

The Foreign Minister was met with claims that Norway must recognize a Palestinian state when he visited the Labour Youth League summer camp Thursday.

AUF WANT BOYCOTT: Foreign Minister Jonas Gahr Store was met by demands that Norway must recognize a Palestinian state when he visited the Labour Youth League summer camp at Utøya Thursday.

During the second day of Labour Youth League summer camp at Utøya got the Labour Party's young hopefuls visit by Foreign Minister Jonas Gahr Store.

Together with the Norwegian Broadcasting Corporation correspondent Sidsel Wold and Norwegian People's Aid Kirsten Belck-Olsen, discussed the Foreign Minister of the deadlock between Israel and the Palestinian Authority.

As foreign minister arrived Utøya he was met with a demand from the AUF that Norway must recognize a Palestinian state.

- The Palestinians must have their own state, the occupation must end, the wall must be demolished and it must happen now, said the Foreign Minister to cheers from the audience.

Earlier this week, when Palestinian President Mahmoud Abbas visited Norway, the Minister said to TV 2 news channel that Norway stands ready to recognize a Palestinian state . This he repeated during the debate on Utøya.

- We are ready to recognize a Palestinian state. I await the actual resolution text Palestinians will promote the UN General Assembly in September, said the Minister.

In autumn it is expected that Palestinian President Mahmoud Abbas will bring the matter to the UN. Where will he ask for UN membership and recognition of a Palestinian state within the borders before the 1967 war, with East Jerusalem as its capital.

Wednesday said AUF leader Eskil Pedersen that the AUF want a unilateral economic embargo of Israel from the Norwegian side.

- Labour Youth will have a more activist Middle East policy and we have to recognize Palestine. NOK NOK's, now we have to get the peace process into a new track, said Pedersen.

The foreign minister admitted that the situation is untenable, but believes that the boycott is the wrong tool.

- Boycott will be to move from dialogue to monologue. It is difficult to open the door the day we will talk with Israel, said the Minister.

The Vikings Live On . . . in the Anti-Semitic 'Ship To Gaza Norway'

Some things never change:

Note their platform: "resistance against the Israeli occupation".







(source)

The Gang of Six Types Attack Savers

They want to cap "combined employee/employer pre-tax contributions to 401(k)s at $20,000 or 20 percent of income, whichever is lower. That would be a substantial cut in deductibility, since the employee deduction alone currently is capped at $16,500 (savers over age 50 can make additional $5,500 “catch-up” contributions)."

Just one of the ways the greedy feds want to extract more revenue from people as they age.

You'll find more of this discussed, here.

"Norway's toughest sentence is 21 years in jail"

Seen here.

Larry Kudlow is No Conservative: Another Voice Impeding the Tea Party

So-called conservatives like Lawrence Kudlow insist, INSIST!, that Barack Obama is a liberal, not a socialist.

Wake up, Kudlow: The deficit is triple what it was under a real liberal, George W. Bush, and you call that more liberalism!

Which is why Kudlow, even today, keeps defending plans like the one from the Gang of Six. That plan's baseline assumes the expiration of the Bush tax rates, which means a reset UP of the tax rates. A cut from that is a cut, except relative to the rates from which it represents a tax increase.

GET ON THE RIGHT, KUDLOW!

Cut taxes, you moron.

And slash, SLASH!, spending.

Build submarines and satellites to project American power, and drill here. We don't need boots on the ground in what, 170 countries?!

This is so easy my fifth grader could beat you.

TSA = Thousands Standing Around

According to the pilots! So says The Barrister, here.

I still like Tough Shit America, though.

The Fed Still Refuses to Document for the GAO the Exigent Circumstances Justifying Loans to Non-Primary Dealers

See the story here.

We're talkin' affiliates of Merrill Lynch, Goldman Sachs, Morgan Stanley and Citigroup.

None dare call it fascism.

The True Born Sons of Liberty want The Fed to end.

Mayor Daley's Legacy: A Total Breakdown of Law and Order in Chicago

Firemen need police escorts to turn off nearly 2,000 opened fire hydrants.

Story here.

Just think what would happen in this country if we had a really serious problem. The natives are restless.

Right Wing White Racist Militia From Missouri Sets Off Car Bomb In Oslo

Oops, sorry. Wrong headline.

Story here.

Everybody's Doin' A Brand New Dance Now: The Mussolini

Carole King - Locomotion


LOCOMOTION
by Gerry Goffin and Carole King

Everybody's doin' a brand new dance now

Come on baby do the locomotion Mussolini
I know you'll get to like it if you give it a chance now
Come on baby do the locomotion Mussolini

My little baby sister can do it with ease
It's easier than learning your ABC's

So come on, come on do the locomotion Mussolini with me

You gotta swing your hips now
Come on baby jump up jump back
Oh well, I think you've got the knack

Now that you can do it let's make a chain some pain now
Come on baby do the locomotion Mussolini
Chug-a-chug a motion like a railroad train now nuke plant meltdown
Come on baby do the locomotion Mussolini

Do it nice and easy now and don't lose control
A little bit of rhythm and a lot of soul

Come on, come on do the locomotion Mussolini with me

Move around the floor in a locomotion like a king-sized Weenie
Come on baby do the locomotion Mussolini
Do it holdin' hands if you get the notion you big fascist Meanie
Come on baby do the locomotion Mussolini

There's never been a dance that's so easy to do
It even makes you happy wealthy when you're feeling blue
Come on, come on do the locomotion Mussolini with me

(original lyrics here)

Senator Saxby Chambliss Doesn't Tell The Whole Truth About Tax Loss Expenditures

On the Sean Hannity program today Senator Chambliss claimed that under Ronald Reagan tax loss expenditures were eliminated as part of a lowering and broadening of the tax base in 1986.

The top income tax bracket eventually fell to 28 percent for a very brief time as a result of the Tax Reform Act of 1986 under Reagan's successor, George Herbert Walker Bush, who subsequently went on to break his no new taxes pledge, paving the way for tax increases under his successor, Bill Clinton, proving that broad low tax rates can be as ephemeral as any other part of the tax code.

The senator from Georgia today claimed that the current plan of his Gang of Six was proposing the scaling-back of similar tax loss expenditures enjoyed by taxpayers in the same spirit of Reagan. For example, the Gang wants to reduce the deductibility of home mortgage interest and charitable contributions in exchange for a lower income tax rate.

But the senator is pulling a fast one with the facts. Reagan didn't just eliminate some tax loss expenditures and reduce income tax rates in exchange. He in fact broadened at the same time the mortgage interest deduction in order to encourage home ownership, something entirely missing from the Gang of Six plan:

Prior to the Tax Reform Act of 1986 (TRA86), the interest on all personal loans (including credit card debt) was deductible. TRA86 eliminated that broad deduction, but created the narrower home mortgage interest deduction under the theory that it would encourage home ownership.

I remember at the time how unfair I thought it was to lose the deductibility of credit card interest until I realized how an equity line of credit based on home ownership could and in fact did replace the role credit cards and other lines of credit had played in the tax equation before 1986. The change was also noteworthy because it encouraged the acquisition and use of secured equity instead of the use of mere credit secured only by income and creditworthiness.

Senator Chambliss' plan will eliminate tax deductibility of home mortgage interest without replacing it with anything to encourage home ownership.

And if there's anything America needs more right now, it's jobs and family formation to soak up the excess housing inventory. All Chambliss' plan will do is worsen the economic circumstances of current homeowners, who are already struggling with upside down loans and declining real estate values.

It's time conservatives recaptured the importance of home ownership as a social good. Unfortunately, the ideas of the Gang of Six do anything but. And whatever else they are, they aren't Reaganite.