http://www.tobytoons.com/td/cartoon/20110420/bringing-back-a-classic-from-2009-barackside.html
Thursday, August 25, 2011
Barackside
http://www.tobytoons.com/td/cartoon/20110420/bringing-back-a-classic-from-2009-barackside.html
CBO’s Latest Budget and Economic Outlook is Unrealistic
If Obama's policies are the baseline, this outlook is way off line.
The latest CBO budget and economic outlook is using baseline assumptions that are as realistic as flying unicorns. Although they project a decade of mediocre growth and moderate deficits, even such a dismal projection is a pretentious view of reality.On the budget side, CBO’s baseline outlook portends a $1.284 trillion deficit this year, and $3.487 worth of deficits over the ten-year budget frame, from 2012-2021. The ten-year deficit predictions assume that the annual deficit will dramatically drop to $265 billion in just two years, and remain below $300 billion for the rest of the decade! The previous baseline outlook in March foresaw a $1.4 trillion deficit in 2011 and $6.7 trillion in deficits for the subsequent ten years. Even the March outlook was a lowball figure because the report presumed an unrealistic improvement in economic output, dramatic spikes in revenue, long-term record low interest rates, while obfuscating the costs of Obamacare all along. The updated baseline outlook makes those assumptions on steroids.
The CBO gets their unrealistic budget estimates from predictions of economic growth that run counter to all of the current economic reports. In turn, the robust unicorn economy will rapidly increase revenue, while decreasing spending on anti-poverty and unemployment programs. CBO is predicting GDP growth of 2.3% this year, even though it has only grown by 0.8% for the first half of the year. We would need to enjoy a 3.8% rate of growth for the rest of the year, in order to achieve the 2.3% target.
Additionally, CBO is predicting 8.5% unemployment by 2012. Then, from 2013-2016, CBO is predicting an average of 3.6% GDP growth and 5.3% unemployment! No wonder they predict revenues to rise to 20.2% of GDP – near historic records – by 2014.
For some perspective, compare those numbers to the estimates by other economists. JP Morgan is predicting 1.3% GDP growth and 9.5% unemployment by the end of next year, while Goldman Sachs is predicting 2.1% GDP growth and 9.25% unemployment.
While most of the unicorn predictions by the CBO are derived from an impracticable economic outlook and unrealistic revenues, the rest of the savings come from spending reductions and tax increases. They are already budgeting in the impending $1.2 trillion in cuts that will supposedly pass the super duper committee. They are also assuming that the Bush tax cuts expire, an AMT fix is discontinued, and most Medicare provider payments under ‘doc fix’ are discontinued. Remember that CBO only uses static scoring, and as such, fails to envision the economic devastation of such tax hikes.
The only real cuts that should be factored in are the $756 billion in savings from discretionary caps. Imagine what the CBO baseline would show, even with rosy economic outlooks, had Republicans not taken back the House?
Oh, and for good measure, CBO assumes that inflation will remain low, interest rates will be next to nothing, and housing prices will soar – to almost pre-crash levels. This, despite the fact that home prices continue to tank.
In order to uncover the truth, you must read the conclusion at the end of the budget-outlook section of the report. They make it clear that the “alternative scenarios” are more accurate than the baseline outlook:
Moreover, the projections of federal debt that CBO highlighted in June for the alternative fiscal scenario do not include the harmful effects of rising debt on economic growth and interest rates. If those effects were taken into account, projected debt would increase even more rapidly. Large budget deficits and growing debt would reduce national saving, thus leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower real GDP and income in the United States relative to what would otherwise occur. Furthermore, paying for the rising costs of interest through higher marginal tax rates could discourage work and saving and reduce output even more, while making room in the budget for those interest costs by reducing spending on government programs would have other economic and social consequences.It’s also important to highlight the disclaimer from the CBO at the beginning of their report:
An increasing federal debt relative to the size of the economy also would boost the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget, and the government would lose its ability to borrow at affordable rates. At the same time, burgeoning debt would increasingly restrict policymakers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or financial crises.
The explosive path of federal debt under the alternative fiscal scenario shows that the combination of policies that underlie that scenario cannot be continued for the next several decades.
CBO initially completed its economic forecast in early July, but it updated the forecast in early August to reflect the policy changes enacted in the Budget Control Act of 2011. However, the forecast described in this report does not reflect any other developments since early July, including the recent swings in financial markets and the annual revision to the national income and product accounts (compiled by the Bureau of Economic Analysis). Incorporating that recent news and economic data would have led CBO to temper its near-term forecast for economic growth.In other words, the only way we will achieve those economic and budget estimations is by electing a conservative president and Senate – and ending over-taxation, regulation, litigation and subsidization. And, most importantly, Obamacare.
East coast earthquake humor.
Washington D.C.
August 20, 2011
President Obama has just confirmed that the DC earthquake occurred on an
obscure fault-line, identified as "Bush's Fault". In an emergency press
conference, the President announced that the Secret Service and Maxine
Waters will investigate the quake's suspicious ties to the Tea Party and
other right wing extremist organizations. In a follow on question, the
President stated that the quake did not interrupt his golf vacation.
In a related press release, Al Gore has called for national news
coverage of his speech to be given at 7 PM EST. It is rumored that Mr.
Gore will offer proof that the quake is a result of global warming
caused by conservatives.
Conservatives challenged the White House investigation and disputed Mr.
Gore's claims, issuing a joint press release contending the quake was
caused by the founding fathers rolling over in their graves.
In a surprise announcement, the Tea Party claimed credit for the quake
and threatened that the residence of DC should expect more quakes as
they continue shifting the Country to the RIGHT.
August 20, 2011
President Obama has just confirmed that the DC earthquake occurred on an
obscure fault-line, identified as "Bush's Fault". In an emergency press
conference, the President announced that the Secret Service and Maxine
Waters will investigate the quake's suspicious ties to the Tea Party and
other right wing extremist organizations. In a follow on question, the
President stated that the quake did not interrupt his golf vacation.
In a related press release, Al Gore has called for national news
coverage of his speech to be given at 7 PM EST. It is rumored that Mr.
Gore will offer proof that the quake is a result of global warming
caused by conservatives.
Conservatives challenged the White House investigation and disputed Mr.
Gore's claims, issuing a joint press release contending the quake was
caused by the founding fathers rolling over in their graves.
In a surprise announcement, the Tea Party claimed credit for the quake
and threatened that the residence of DC should expect more quakes as
they continue shifting the Country to the RIGHT.
Business bests government yet again, or I'll see your high speed rail and raise you a bus.
Not long ago, I wrote about how the private sector outraces and laps government. While governments dither and dispute, the private sector discovers.
The example I mentioned then was energy. For years, governments, national and local, have been promoting wind and solar power, to little practical effect. Curiously, the biggest wind power producer is Rick Perry's Texas. But wind power isn't reliable, and both wind and solar cause serious damage to the environment.
In the meantime, the oil and gas industries -- the favorite target of Barack Obama and congressional Democrats -- have developed new techniques of horizontal drilling and hydraulic fracturing (fracking) that have vastly expanded recoverable American energy supplies.
Now across my laptop comes news of another area in which private sector actors have overtaken government. Again an older technology has been improved and adapted to fill a need, while government dithers.
The old technology in this case is buses.
While the Obama administration has been desperately seeking to spend $53 billion on so-called high-speed rail lines, private businessmen have developed Chinatown and Megabus lines that provide inter-city service that has attracted legions of price-conscious travelers.
Chinatown bus service started in 1998 to provide a cheap way for Asian immigrants to get from New York to Boston. You lined up at the curb, paid your $20 fare to the driver and settled into a comfortable bus for four hours or so.
Now there's service to multiple destinations (including gambling casinos) from New York and on the West Coast, too. And competitors have arisen. Megabus routes exist between Maine and Memphis and Minneapolis, notably including many college towns.
The buses have bathrooms, AC power outlets and free wi-fi. They're not as fast as the much more expensive Acela train, but they tend to run on schedule.
Bus travel used to be decidedly downscale, with a clientele that scared off middle-class travelers. That's because, back in the days of heavily regulated transportation, bus lines followed the passenger railroad model, with stations in central cities, routes with multiple stops, fares propped up by monopolies and operators with no economic incentive to provide comfortable or pleasant service.
Chinatown and Megabus operators ditched this model for one that works for travelers for whom money is scarce and time plentiful. Who needs a station? Intercity buses can occupy curb space briefly just as city buses do. Who needs multiple stops? You can make money on people who want to go from one specific location to another.
Needless to say, the cost to the taxpaying public is minimal. City streets and interstate highways already exist, and maintenance gets financing from gas taxes. And the system has enormous flexibility. If fewer passengers want to line up in Chinatown and more on the Upper West Side, the bus can change stops.
Private bus operators have effectively taken a 100-year-old technology, the bus, and adapted it seamlessly to the 21st century.
Compare high-speed rail. It is tethered to enormous stations that must be built or refurbished and limited to particular routes that, once the rails are laid down, cannot be changed except at prohibitive expense.
And it is enormously costly. In just two years, the estimated cost of the Obama administration's pet project, California high-speed rail, in the "flatter than Kansas" Central Valley has risen from $7.1 billion to $13.9 billion. Oxford economist Bent Flyvbjerg has found that high-speed rail projects always end up costing more, usually far more, than estimates.
In addition, operating costs almost always end up higher than fares. And fares always turn out to be expensive, comparable to airfare if you book a popular flight the day before your trip.
So high-speed rail is a form of transportation on which government subsidizes business travelers. You don't see backpackers anymore on the Acela or Amtrak trains from Washington to New York. They're taking the Chinatown bus or one of its competitors.
Finally, most of the high-speed rail lines the Obama administration is touting are a whole lot slower than France's TGV or Japan's bullet train. You can beat the proposed Minneapolis-Duluth line by going just slightly over the speed limit on I-35. The proposed line from the college town of Iowa City to Chicago would take longer than the currently operating bus service.
So the private sector provides cheap intercity transportation while government struggles to waste $53 billion. Please remind me which is the wave of the future.
The example I mentioned then was energy. For years, governments, national and local, have been promoting wind and solar power, to little practical effect. Curiously, the biggest wind power producer is Rick Perry's Texas. But wind power isn't reliable, and both wind and solar cause serious damage to the environment.
In the meantime, the oil and gas industries -- the favorite target of Barack Obama and congressional Democrats -- have developed new techniques of horizontal drilling and hydraulic fracturing (fracking) that have vastly expanded recoverable American energy supplies.
Now across my laptop comes news of another area in which private sector actors have overtaken government. Again an older technology has been improved and adapted to fill a need, while government dithers.
The old technology in this case is buses.
While the Obama administration has been desperately seeking to spend $53 billion on so-called high-speed rail lines, private businessmen have developed Chinatown and Megabus lines that provide inter-city service that has attracted legions of price-conscious travelers.
Chinatown bus service started in 1998 to provide a cheap way for Asian immigrants to get from New York to Boston. You lined up at the curb, paid your $20 fare to the driver and settled into a comfortable bus for four hours or so.
Now there's service to multiple destinations (including gambling casinos) from New York and on the West Coast, too. And competitors have arisen. Megabus routes exist between Maine and Memphis and Minneapolis, notably including many college towns.
The buses have bathrooms, AC power outlets and free wi-fi. They're not as fast as the much more expensive Acela train, but they tend to run on schedule.
Bus travel used to be decidedly downscale, with a clientele that scared off middle-class travelers. That's because, back in the days of heavily regulated transportation, bus lines followed the passenger railroad model, with stations in central cities, routes with multiple stops, fares propped up by monopolies and operators with no economic incentive to provide comfortable or pleasant service.
Chinatown and Megabus operators ditched this model for one that works for travelers for whom money is scarce and time plentiful. Who needs a station? Intercity buses can occupy curb space briefly just as city buses do. Who needs multiple stops? You can make money on people who want to go from one specific location to another.
Needless to say, the cost to the taxpaying public is minimal. City streets and interstate highways already exist, and maintenance gets financing from gas taxes. And the system has enormous flexibility. If fewer passengers want to line up in Chinatown and more on the Upper West Side, the bus can change stops.
Private bus operators have effectively taken a 100-year-old technology, the bus, and adapted it seamlessly to the 21st century.
Compare high-speed rail. It is tethered to enormous stations that must be built or refurbished and limited to particular routes that, once the rails are laid down, cannot be changed except at prohibitive expense.
And it is enormously costly. In just two years, the estimated cost of the Obama administration's pet project, California high-speed rail, in the "flatter than Kansas" Central Valley has risen from $7.1 billion to $13.9 billion. Oxford economist Bent Flyvbjerg has found that high-speed rail projects always end up costing more, usually far more, than estimates.
In addition, operating costs almost always end up higher than fares. And fares always turn out to be expensive, comparable to airfare if you book a popular flight the day before your trip.
So high-speed rail is a form of transportation on which government subsidizes business travelers. You don't see backpackers anymore on the Acela or Amtrak trains from Washington to New York. They're taking the Chinatown bus or one of its competitors.
Finally, most of the high-speed rail lines the Obama administration is touting are a whole lot slower than France's TGV or Japan's bullet train. You can beat the proposed Minneapolis-Duluth line by going just slightly over the speed limit on I-35. The proposed line from the college town of Iowa City to Chicago would take longer than the currently operating bus service.
So the private sector provides cheap intercity transportation while government struggles to waste $53 billion. Please remind me which is the wave of the future.
Obama declares deficit spending unpatriotic, enless he is the one spending.
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| Thursdays with John Hayward | 08.25.11 |  |
Sustained deficit spending is certainly irresponsible. Trillion-dollar deficits are an accepted fact of life in Washington, even after a big "deficit reduction deal." This means the government is willing to spend more money than it collects, in perpetuity.
Deficit spending is tyrannical. It's the ultimate form of taxation without representation, presenting children not yet born with bills they never had a chance to vote against. It establishes programs that become permanent financial obligations for future Congresses. It's a lie, because it offers the people subsidies and benefits, paid for with money that doesn't exist. When politicians speak of trillion-dollar "stimulus" programs, they're distorting the free market with false information, and wielding economic influence they don't really have.
Our massive national debt, built through decades of deficit spending, makes America weak. Increasing individual and corporate dependency on a rapidly growing government drains the vitality of the free market. Unfriendly creditor nations like China gain unhealthy amounts of economic leverage over us. Credit agencies like Standard & Poor's become major players in public policy debates. In the end, social chaos caused by the collapse of unsustainable entitlements will destroy civic order.
Does all of that add up to make deficit spending "unpatriotic?" Barack Obama claimed to think so, four trillion dollars ago. — John Hayward
Gaza's economy and West Bank buses
- guardian.co.uk, Thursday 25 August 2011 21.00 BST
Then Israel set up industrial zones around Gaza, in which Israelis and Palestinians worked together. Terror attacks, including Palestinians attacking their fellow Israeli workers, forced the zone to be deserted. Next, Israel withdrew from Gaza, leaving behind extensive agricultural infrastructure. Thousands of rockets were fired on to the homes of Israeli citizens from the exact same greenhouses that could have offered the Gazans amazing economic opportunities. Mr Abdel-Shafi should be asking his fellow Palestinians, Hamas and others, to comply with the international community's demand to renounce terror. After which, there should be plenty of new economic opportunities for Gaza.
Amir Ofek
The deparment of energy, isnt!
http://www.cnsnews.com/news/article/energy-dep-t-spends-60-million-economic
'(CNSNews.com) – The U.S. Department of Energy (DOE) announced last week that it has used $60 million of the $1.2 billion given to the agency in economic stimulus funds for purchasing “advanced-technology research instruments” to study climate change.'
Why isn't the "department of energy" researching ways to make more and cheaper energy? Wouldn't climate research come under the EPA's domain? Apparently the DOE is a redundant department and as such should be disbanded.
'(CNSNews.com) – The U.S. Department of Energy (DOE) announced last week that it has used $60 million of the $1.2 billion given to the agency in economic stimulus funds for purchasing “advanced-technology research instruments” to study climate change.'
Why isn't the "department of energy" researching ways to make more and cheaper energy? Wouldn't climate research come under the EPA's domain? Apparently the DOE is a redundant department and as such should be disbanded.
Prepare for all sorts of fake number from Washington.
Prepare to see all sorts of fake numbers coming from the white house as the election nears. They’ll be revised down later.
How Do We Really Create Jobs?
So How Do We Really Create Jobs?
By Ralph Benko
Published August 24, 2011
· Print
· Email
How to create tens of millions of jobs, good jobs? Much hinges on the answer to this question.
Long gone are the golden Reagan-Clinton years that saw almost 40 million new positions created. In the decade since Clinton left office America created a paltry 3 million under George W. Bush, and Barack Obama recently was scored as having the worst job creation for a first period in office of any president since 1890, excepting Hoover.
The Permanent Government seems confused about what to say, much less do, to turn this around. The Insipid Recovery’s threat to turn into a Double Dip is starting to concentrate the mind of the political class wonderfully. D.C., where our tax dollars go to die, finally is beginning to focus on the right question: How to create jobs?
There are two theories. Progressives believe that the answer lies in government job creation (stimulus, bailouts, “shovel-ready” public works). Supply-siders believe that the answer lies exclusively in human action, entrepreneurs and businesspeople, and that the government needs to get its boot off our necks. Watch Fight of the Century for a wonderful rap version of the debate — between Keynes and Hayek — produced by John Papola and Russ Roberts.
President Obama, cheered on by the elites, relied on the power of government to create jobs … and failed. Reagan and Clinton relied on the free market. They were attacked as tools of the plutocrats for doing so yet delivered the goods: massive job growth.
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