Daily Archives: August 21, 2013
Here are today’s statistics on the state of the economy:
The MBA reports that Mortgage applications fell -4.6% last week, as re-fis fell -8.0%. Purchases rose 1.0%, though. Rising interest rates are what is killing the re-fi market.
Speaking of rising rates, the NAR says panic over them drove existing home sales up 6.5% to a 5.390 million annual rate in July. House prices are steady, but rising rates are forcing buyers to purchase before the interest payments get too high.
One might, if one was inclined, parenthetically remark that rising mortgage rates may signal the inevitability of rising interest rates for Treasury bonds. Or, perhaps, vice versa. Whatever.
Either way, you should keep in mind that a rise of 1% in Treasury yields works out to an additional $160 billion or so in debt service payments per year. Right now we’re paying about $350 billion a year on debt service, with a low net interest rate a bit above 2%.
If the net interest rate goes back to the historical rate of 6%, we’re looking at interest payments of $950 billion or so per year. Keep in mind that the Federal government already isn’t taking in enough revenue to cover payments for Social Security, Medicare, and Debt Service. That means that we’re borrowing money to cover part of our debt service, and everything else the federal government does. There’s no way we can afford to pay $950 billion a year in interest payments.
And we certainly can’t borrow an additional $600 billion per year to pay for the additional interest payments. That would quickly result in a debt death spiral. But we could eliminate every single executive department–including Defense– and we’d still have a $1 trillion deficit.
You should be happy the economy is moribund, because that’s keeping interest rates low, and low interest rates are preventing the aforementioned fiscal death spiral right now.
Camille Paglia is someone I disagree with at times but have always found to be, for the most part, refreshingly honest. I like to read her thoughts on current affairs (don’t really care much about the cultural side of it all) and this week, in an interview in Salon, she answered a couple of questions that I think are worth discussing.
Two words: Anthony Weiner. Your thoughts?
Two words: pathetic dork. How sickeningly debased our politics have become that this jabbering cartoon weasel could be taken seriously for a second as a candidate for mayor of New York. But beyond that, I have been amazed by the almost total absence of psychological critique in news analyses of the silly Weiner saga. For heaven’s sake, Weiner is no randy stud with a sophisticated sex life that we need to respect. The compulsion to exhibit and boast about one’s penis is embarrassingly infantile — the obvious residue of some squalid family psychodrama in childhood that is now being replayed in public.
I assumed at first that Huma Abedin stayed married to Weiner out of noble concern for her unborn child, who deserved a father. But her subsequent behavior as Weiner’s defender and enabler has made me lose respect for her. The Weiners should be permanently bundled off to the luxe Elba of Oscar de la Renta’s villa in the Dominican Republic. I’m sure that Hillary (Huma’s capo) can arrange that.
Her first point is the most important – how debased have our politics have become? Look at the circus we deal with on a seeming daily basis. Look at the people we attract. And consider the fact that Anthony Weiner actually figured he had a legitimate shot at being elected.
Look at this idiot mayor in San Diego. He just can’t imagine why he should shuffle off the stage. There are any number of others that need to take the hint as well.
It’s not just a problem on the left. It is a problem on both sides of the isle. As we have said many times here, we are extraordinarily ill served by our political class today… at all levels and from both parties. And it is we who we have to blame for that problem. The fact that Weiner was indeed taken seriously until his latest nonsense was revealed is the point. Elliot Spitzer is another example. The fact that neither demonstrated any character or integrity previously should tell us we don’t need them anywhere near public office. Yet somehow they get signals that they have a chance at a second try. What those signals are I haven’t a clue, but whatever they are, we need to quit sending them pronto.
Any hopes, fears or predictions for the presidential elections in 2016?
As a registered Democrat, I am praying for a credible presidential candidate to emerge from the younger tier of politicians in their late 40s. A governor with executive experience would be ideal. It’s time to put my baby-boom generation out to pasture! We’ve had our day and managed to muck up a hell of a lot. It remains baffling how anyone would think that Hillary Clinton (born the same year as me) is our party’s best chance. She has more sooty baggage than a 90-car freight train. And what exactly has she ever accomplished — beyond bullishly covering for her philandering husband? She’s certainly busy, busy and ever on the move — with the tunnel-vision workaholism of someone trying to blot out uncomfortable private thoughts.
I for one think it was a very big deal that our ambassador was murdered in Benghazi. In saying “I take responsibility” for it as secretary of state, Hillary should have resigned immediately. The weak response by the Obama administration to that tragedy has given a huge opening to Republicans in the next presidential election. The impression has been amply given that Benghazi was treated as a public relations matter to massage rather than as the major and outrageous attack on the U.S. that it was.
Throughout history, ambassadors have always been symbolic incarnations of the sovereignty of their nations and the dignity of their leaders. It’s even a key motif in “King Lear.” As far as I’m concerned, Hillary disqualified herself for the presidency in that fist-pounding moment at a congressional hearing when she said, “What difference does it make what we knew and when we knew it, Senator?” Democrats have got to shake off the Clinton albatross and find new blood. The escalating instability not just in Egypt but throughout the Mideast is very ominous. There is a clash of cultures brewing in the world that may take a century or more to resolve — and there is no guarantee that the secular West will win.
She nails Hillary and Benghazi on the head. I couldn’t agree any more with her assessment of that particular situation and the response from Clinton and the administration.
Note too that Paglia’s candidate isn’t another senator. She too has had enough of that brand of clueless fools that have no executive experience (although Clinton can claim exec experience with the Dept. of State, as far as I’m concerned she made a dog’s breakfast of her time there). Hopefully the rest of the country is just as tired of it as Paglia is.