As the Magic Unicorn and Snake Oil Show moves on to the full Senate after passing out of the Senate Finance Committee on a majority vote, Massachusetts gives us a peek at what we can really expect, should this all pass, at a national level:
The state passed a prototype for ObamaCare in 2006 on the same cost-control theory as Senate Finance, only to see spending explode. So now Beacon Hill is contemplating far more drastic spending-control measures, such as a plan to “require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want,” as the Boston Globe reported on Sunday. Paul Levy, the CEO of Beth Israel Deaconess Medical Center, told the Globe that “You can’t reap these savings without limiting patients’ choices in some way.”
Of course you can’t – savings come from what? Spending less money. That means those that are claiming you can have something for nothing are – surprise, surprise – lying to you. And you’d think adults of voting age would have realized that by now. But if not, then I suggest two words to you – see Massachusetts.
The government solution – they’ll decide for you because they believe their decision will cost less. And since you’ve put them in charge, what ‘choice’ have you (remember this national plan is all prefaced on the lie that you’ll benefit from “choice and competition”):
A 10-member commission is trying to impose a new “global payment” system on the top-notch Massachusetts health system. Doctors and hospitals would be forced to join large networks and be paid a set rate for each patient. The idea is to make providers live within a fixed budget and cut down on expensive treatments.
Now you can add four more words to your analysis which best reflect the above. See Canada. See UK.
Any guess where “top-notch” doctors will go if this plan is enacted? Two more words – somewhere else.
And the lie about “choice”? Well there’ll be a choice, but it won’t have anything to do with you:
But if patients are allowed to receive care outside of whatever network they end up in, this new jerryrigged cost-control would break down, or not produce the desired “savings.” You know who wins when the interests of government conflict with those of patients to choose a doctor or treatment.
So in addition to taxes on “Cadillac” plans, taxes on medical device industry (which will stunt innovation if not kill it outright) and taxes and jail time for those who “choose” not to buy insurance, the bulk of the so-called “savings” will be imposed by limiting choices for patients (both in who they see and what those they see can prescribe for treatment) and payments.
Does it really take a rocket-scientist to understand where that will all end up? The only place you’re ever going to see unicorns and magic rainbows is on Saturday morning kid’s shows. What is being cobbled together by our political leaders comes under the title of” Dr.” Obama’s Snake Oil Show and Magic Act, where smoke and mirrors are used to sell the rubes something that isn’t at all what he claims.
Certainly, and I’ll say this for the umpteenth time, there are “reforms” to the health care industry which would be both beneficial and cut costs. But almost none of them are included in this package being touted as “the answer”. It’s not the answer, it is a concoction that promises all of the worst of existing government run health care systems with very little of whatever benefits they might offer.
This needs to be stopped, scrapped and revisited. If it isn’t, we and our economic well-being as well as our health will suffer as a result.
For anyone who has been paying attention to how the media treats conservatives, the current smearing of Rush Limbaugh should comes as no surprise. The radio personality expresses an interest in being a part owner of the St. Louis Rams and, because the players in the NFL are something like 75% black (which, of course, nobody has a problem with), the racial knives come out in an instant. Unsourced and ill-founded claims that Limbaugh is a racist immediately flood the media airwaves. The problem is, quotes alleged to have been uttered by Limbaugh are entirely made up. Not that the media made any effort to find that out.
So where are these racist soundbites? Where’s the audio? Where’s the transcript? Name the year. Heigh-ho, say CNN’s Rick Sanchez and the rest of the basement-ratings crowd. Not our problem: It’s for Limbaugh to prove beyond a reasonable doubt that he’s never said it.
We’re too busy fact-checking anti-Obama jokes to fact-check our own reporting . . .
The conservative commentator is now threatening to sue for defamation (via Gateway Pundit). I carry no water for Limbaugh, and have only heard snippets of his show a few times in the past 15 years or so. When he called out the media for lauding Donovan McNabb just because he was a black quarterback, I thought he was being ridiculously divisive and adding politics where it wasn’t needed, even as I agreed that the Eagle QB was overrated. What I have never seen is any actual evidence that Limbaugh is a racist or that he supports racism in any way. For that reason, and because I think the media needs to be held accountable for its unmitigated torturing of the truth on a daily basis, I hope that Limbaugh follows through with his threat.
Now, despite being an attorney, I’m actually pretty non-litigious. Most people don’t understand how expensive, invasive and stressful being involved in a court case can be, even when they have ironclad circumstances in their favor. In Limbaugh’s case, he would have it even tougher because, thanks to Times v. Sullivan, he would have to prove actual malice (i.e. that the libelous statements were made with knowledge that they were false or with reckless disregard of whether they were false or not), which is harder than it seems. Even so, he has an excellent case to punish the MSM for its routine malpractice, and if he’s willing to spend the money I think he should go for it.
Not that some of us are at all surprised (for the umpteenth time, “Russia is not our friend”):
“At the current stage, all forces should be thrown at supporting the negotiating process,” he said. “Threats, sanctions and threats of pressure in the current situation, we are convinced, would be counterproductive.”
With that, Russian Foreign Minister Sergey V. Lavrov effectively killed any US hopes found in Russian President Dmitri A. Medvedev statement that “in some cases, sanctions are inevitable” of three weeks ago. As was predicted by many, the unilateral withdrawal of plans to base a missile defense in eastern Europe, an obvious attempt to better relations with Russia, yielded nothing.
Russia’s support is key to getting U.N. Security Council approval of any sanctions, but the country has traditionally been cautious on confronting Iran, a key trading partner and neighbor. In recent years, however, Russia has grown increasingly concerned about indications that Iran could be developing nuclear weapons, analysts say. Iran insists that its program is aimed only at producing energy.
Lavrov told reporters that Russia wants to focus on negotiations for now — particularly the concessions made by Iran this month, after the revelation that it had built a secret nuclear facility near Qom. Under heavy international pressure, the Islamic republic agreed to admit inspectors and send much of its uranium to Russia for enrichment.
Also key to any UNSC approval of sanctions is China – and they’re not at all sold on sanctions either.
However, as noted in the paragraph above, it is Iran which is in the driver’s seat here, not the US. Iran has again outmaneuvered everyone by officially revealing its “secret” nuclear facility near Qom and agreeing to allow it to be inspected. That move has effectively given the Russians the wiggle room they need to back away from imposing sanctions. Iran has years of experience manipulating this process and has once again had its way.
Meanwhile, as Marty Peretz says, Hillary Clinton’s team was engaged in trying to make a “cupcake out of a turd”:
Senior administration officials said that the differences are tactical rather than substantive. Both sides agreed that Iran would face sanctions if it failed to carry out its obligations, a State Department official said, speaking on the condition of anonymity.
Which, of course means that nothing of substance came out of the talks. Such an agreement is the same agreement they had going into the talks. In essence, Russia turned the clock back on this process. And again, a reminder that China, a country whose support would be critical if sanctions are to be imposed, is nowhere on the playing field at the moment.
Anyway, to claim that differences are “tactical rather than substantive” is to try to hand wave away the fact that Russia is not presently on board to increase sanctions anytime soon when everyone was led to believe, just three weeks ago, that it was. I think that truly does represent a “reset”, but not in the way the Obama administration had hoped.
I‘m not sure the word “chutzpa” is appropriate when used in conjunction with Saudi Arabia, but it certainly best describes this particular idea:
Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.
The oil-rich kingdom has pushed this position for years in earlier climate-treaty negotiations. While it has not succeeded, its efforts have sometimes delayed or disrupted discussions. The kingdom is once again gearing up to take a hard line on the issue at international negotiations scheduled for Copenhagen in December.
The chief Saudi negotiator, Mohammad al-Sabban, described the position as a “make or break” provision for the Saudis, as nations stake out their stance before the global climate summit scheduled for the end of the year.
“Assisting us as oil-exporting countries in achieving economic diversification is very crucial for us through foreign direct investments, technology transfer, insurance and funding,” Mr. Sabban said in an e-mail message.
Got that? The Saudis, who’ve been very happy over the past decades to be a part of a cartel that has cut off shipments of oil at times and limited oil production to drive up prices now are sniveling about the possibility that their revenue may be reduced as countries develop alternate energy sources? I’m laughing over here. Gee maybe if they hadn’t spent billions on spreading their radical brand of Islam they’d be in better financial shape.
What’s happened, however, is they have become accustomed to a particular style of life. They like having Filipinos and Indonesians waiting on them hand and foot and living in virtual slavery. They want to continue to spread their poisonous religion and have you pay for it. They enjoy the profligate life-style and by gosh, they expect you to continue to subsidize it.
“Make or break” provision? Be clear here – what they’re talking about is a subsidy paid out of taxes to pay for something they could have already done – “economic diversity”. The answer should be not only “no” but “hell no” followed by a good round of laughter at their expense.
Copenhagen is shaping up as a “loot the rich countries” forum and the number one target will be the US. Unfortunately we are represented by a political leadership that may capitulate on a lot of things which may potentially cost us trillions in the upcoming decades and help kill any nascent recovery or long-term economic growth before it can develop.
I must have missed it – when has Al Sharpton ever been a major player in NFL circles?
Yeah, that’s what I thought. So why is Al Sharpton calling on the NFL to reject a bid by Rush Limbaugh to buy the St. Louis Rams? What possible business is it of his?
In a letter sent to NFL Commissioner Roger Goodell on Monday, Sharpton wrote that he was “disturbed” to hear about Limbaugh’s interest in the Rams and asked for a meeting with Goodell “to discuss the myriad of reasons as to why [Limbaugh] should not be given an opportunity” to purchase the team.
Sharpton argued that Limbaugh has been “anti-NFL” in his comments about several of the league’s players, specifically naming Philadelphia Eagles quarterbacks Michael Vick and Donovan McNabb. Limbaugh sparked controversy several years ago by contending that the media want McNabb to succeed simply because he is black.
In addition, Sharpton wrote that Limbaugh’s “recent statement — that the NFL was beginning to look like a fight between the Crips and the Bloods without the weapons — was disturbing.”
Hmmm … as I recall, the remark Limbaugh made about McNabb was he got more media coverage than he deserved, probably because he was black. Limbaugh believed McNabb is/was an average quarterback not deserving of such coverage. I happen to disagree with his assessment of McNabb, but felt his comment was more about the media and our culture than about race. And former Miami running back Mercury Morris finds Limbaugh’s remarks about gangs and the NFL to make “some relative sense.”
But back to Sharpton. I love the “anti-NFL comments” line used by Sharpton who is now, apparently, the arbiter of all things which are “pro-NFL” I guess. Sharpton’s smarter than he acts at times though – he’s picked up on the fact that playing the race card is becoming detrimental to those who play it. So he’s shifted a bit and now features himself as the savior of the NFL, substituting “NFL” for “black”. Essentially Sharpton is asking the NFL to discriminate against Limbaugh because Al Sharpton (whose only real connection to the league is most likely watching football on Sunday) finds Limbaugh to be unacceptable to him as an owner in the NFL.
Yeah, that’s a good reason to turn him down. I’m sure the other owners will weigh that heavily in their decision making process – right after “is it a good bid” and “do they have the money”?
Tell you what Al, the best way to make sure Limbaugh doesn’t get the team is make a better offer. In a capitalist system, that’s how it works. And, truth be told, that’s what worries Sharpton, isn’t it?
The title is a quote from Eugene Robinson’s latest effort in which he indulges himself in another leftist “history began January, 20th, 2009” moment. His ire and the reason for his rhetorical question comes on the heels of the announcement that Barack Obama has been awarded the Nobel Peace prize and the derision by which that was met on the right.
Robinson then spends the rest of his article taking pot shots at those who find the award to be a travesty. But in the entire 700 to 800 word spread, he never once even attempts to justify the award. The best he can do is this:
Obama has shifted U.S. foreign policy away from George W. Bush’s cowboy ethos toward a multilateral approach. He envisions, and has begun to implement, a different kind of U.S. leadership that I believe is more likely to succeed in an interconnected, multipolar world. That this shift is being noticed and recognized is to Obama’s credit — and to our country’s.
Of course, as any student of foreign affairs will tell you, that all remains to be seen. But again, one has to pretend that there was no multilateralism in existence prior to Obama to make this sort of a claim. And, of course, that’s simply not the case. So if Robinson’s reason for the prize is to be taken seriously, then the detractors are correct – it’s a travesty.
In the short term at least, it has become what most thinking people realized when it was awarded to Jimmy Carter – the “You’re Not George Bush” award. In reality, the Nobel Peace prize has degenerated into a political award given to those who best reflect the politics of the decidedly leftist award committee. It has little to do with peace. It has nothing to do with objectivity. It has everything to do with partisan leftist politics.
There are certainly many more worthy candidates who’ve worked very hard to bring peace to troubled areas. But they simply don’t provide the committee with the political visibility it craves. And they certainly don’t provide the committee the platform from which to make some sort of statement about what it finds acceptable in US politics and, frankly, what it doesn’t.
Anyone who brings as weak an argument to the table as has Eugene Robinson must in the back of his mind realize how undeserving Obama is of this award. To say he’s really accomplished nothing of substance in his first 9 months as president is an understatement. But it is also a fact.
One of the reasons the Medal of Honor is so difficult to earn is because the standards of courage, sacrifice and bravery required are set at an almost unachievable level. And those standards are never compromised for politics or any other reason. That’s why when you see a man wearing the MOH, you know without having to wonder that he met those standards. And when he meets another MOH recipient, there’s no doubt in his mind that recipient also met the very same high standards of courage under fire that he did.
That’s why the MOH is revered so highly.
The Nobel Peace Prize has, as critics are now claiming, has become a travesty driven by partisan politics. It isn’t “highly revered” anymore. The fact that Robinson wants to keep up the charade that this “honor” is something worth having (much less deserved) because it is politically useful for his side to do so speaks volumes about his integrity. He claims the right thing to say is “congratulations”. But I have little doubt that had the committee awarded George Bush the peace prize for ousting Saddam, defeating al-Qaeda in Iraq, and returning the country to the people, Robinson would have been among the first on the “travesty” bandwagon. The last thing he’d have said is “congratulations”. He’d also have been among the first to wonder why he was being accused of “hating America so”.
Those who remember the period before January, 20th 2009, remember when the Eugene Robinson’s of the world thought dissent was the highest form of patriotism. Now, with history beginning on that date for those like Robinson, dissent is just plain old hate.
Funny how that works, isn’t it?
Stuffed in the National Defense Authorization Act is something which has absolutely nothing to do with defense, but is a law that “progressives” have desired to have on the books for a long time. Named the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, its purpose is to make crimes against certain groups punishable by harsher sentencing if it is determined the crime was driven by “hate”.
Since the votes weren’t present in the Senate on a stand-alone basis, Senate Democrats have attached it to the defense authorization bill as an amendment.
The crime bill — which would broaden the protected classes for hate crimes to include sexual orientation and “gender identity,” which the bill defines as a victim’s “actual or perceived gender-related characteristics” — passed the House earlier this year as a stand-alone measure.
Republicans object to the law on First Amendment grounds:
Beyond that, GOP lawmakers feared the new bill could infringe on First Amendment rights in the name of preventing broadly defined hate crimes. The bill’s critics, including many civil libertarians, argued that the hate crimes provision could chill freedom of speech by empowering federal authorities to accuse people of inciting hate crimes, even if the speech in question was not specifically related to a crime.
My objection, as usual, is that the GOP has accepted the premise of “hate crime laws” as being legitmate and are only arguing about the final form. The crime of murder, in terms of a result for the victim, isn’t any worse if it was driven by hate or not. In fact, it could be argued that murder, for any reason, is essentially a hate crime.
The reason for the crime is hardly the most relevant point. The result is what we can concretely and objectively judge and punish. The job of law enforcement is to ensure that a murderer is brought to justice by connecting him or her irrefutably to the crime. Other than that, I see little relevance in whether it was done because the person didn’t like gays or because the person wanted to get rid of their spouse. Murder is murder.
Another thing that bothers me is the title – The Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. This isn’t about just punishing what is deemed a hate crime, by whatever arbitrary definition they choose to define a hate crime, but instead “preventing” those crimes.
That means, as the GOP points out, monitoring and doing something about what is deemed “hate speech” because the only way to “prevent” a “hate crime” is to prevent (or stop) the speech which government decides might incite people to take action. No speech, no incitement. No incitement, no crime.
Now, it is important to note that we already have an exception to the 1st Amendment’s ban on punishing speech and that’s the “fighting words” exception. It essentially says words can incite undesirable and even criminal action and those words aren’t protected speech. What is being proposed here is an expansion of the meaning of “fighting words” to include words that Congress decides incites “hate” and then criminal behavior (thus the term “hate crime”).
Unfortunately the bill looks like it will be signed into law. The question, of course, is how broad the final bill will be and how badly it attacks our First Amendment rights.
Republican Sam Brownback offered an amendment to the Senate version which said the bill could not “construed or applied in a manner that infringes on any rights under the First Amendment” and could not place any burden on the exercise of First Amendment rights “if such exercise of religion, speech, expression, or association was not intended to plan or prepare for an act of physical violence or incite an imminent act of physical violence against another.”
With that amendment, GOP Senators supported the final bill. However when the bill went to the conference committee, key changes were made to the Brownback amendment by the Democrat controlled committee:
Where Brownback had insisted, and the full Senate had agreed, that the bill could not burden the exercise of First Amendment rights, the conference changed the wording to read that the bill could not burden the exercise of First Amendment rights “unless the government demonstrates … a compelling governmental interest” to do otherwise.
That means your First Amendment rights are protected — unless they’re not.
“A compelling governmental interest” leaves the door wide open for your free speech rights to be trampled on the government’s whim. Where the First Amendment was designed as a limit on government power (as was the entire Constitution), this law is a blatant attack on those limits and an attempt to expand government power. Additionally, instead of an objective standard by which to judge a crime, this attempts to identify and punish thought.
In terms of our civil liberties it is an incredibly dangerous and precedent setting move that will enable government – as long as it can “demonstrate a “compelling … interest” (which it will define) – to restrict or punish speech it chooses to categorize as “hate speech”.
Obama has said he’ll sign the bill when ready. With Obama’s recent LBGT troubles, this is a bone he can throw their way.
“I will sign it into law,” the president told a cheering crowd at the gay activist group Human Rights Campaign on Saturday. “Together we will have moved closer to that day when no one has to be afraid to be gay in America.”
The GOP finds itself in a no-win position. They can vote against the hate crimes part of the bill and be accused by Democrats of not supporting the troops, or they can vote for the Defense Authorization Act and the hate crimes portion becomes law.
I think we all know they’ll vote to authorize the defense spending. And with that vote, America will become a little less free as Democrats continue on pace to erode our liberties while they have the chance.
California Gov. Arnold Schwartzenegger did not sign, but did not veto, AB962, the Mail Order Ammo Ban. Since California has no pocket veto, that means the bill becomes law without his signature.
This means that, as of 1 Feb 2011, all handgun ammunition sales in California will require a face-to-face transaction between buyer and seller, and sellers will have to obtain a thumbprint and other data from the buyer.
It is all fine and good to have a discussion and even a debate about future strategy in Afghanistan. But probably not 6 months after you’ve announced your former strategy. For some reason, dithering has a tendency to be interpreted as a weakness, not a strength. In war, weaknesses are attacked and exploited. And that may be exactly what we’re beginning to see:
Several thousand foreign fighters have poured into Afghanistan to bolster the Taliban insurgency, the country’s defense minister said yesterday as he called for more international troops.
The remarks come as the United States debates whether to substantially increase its forces in Afghanistan or to conduct a more limited campaign focused on targeting al-Qaeda figures – most of whom are believed to be in neighboring Pakistan.
The minister’s comments hit on a key worry of the United States – that not sending enough troops to Afghanistan will open the door again to al-Qaeda. They also suggest that the Afghan government is nervous about the U.S. commitment amid talk of changing the strategy and a surge in violence in recent months.
This isn’t a Senate debate where you can take whatever time you need and if it’s not finished by the nearest recess, you put it off until you come back. Wars can’t be tabled. A war continues with or without a decision made by either side. And, in many cases in history, wars have been lost because decisions were delayed or not made in a timely manner.
The fact that foreign fighters are pouring in now has to be viewed in a particular context. You can’t snap your finger and produce “foreign fighters” in Afghanistan. They have to be recruited, transported, trained and then gotten to A’stan. So for the enemy to have these fighters showing up now would indicate, at least to me, that they have sensed some form of weakness in the American committment (and make no mistake – there is no NATO Afghanistan mission without the US) and they have been able to sell recruits on the idea that they’re about to turn everything around there and win. And note this: the Taliban won’t have any esoteric conversations about whether or not running us off is a “victory” or just “success”. They’ll trumpet to the world that they kicked our butt while they then barbarically subdue, punish and seek revenge on anyone who worked with us. They don’t care how it happens – force of arms or us just pulling out – it is still a victory. And everyone likes to be on the winning side:
“The enemy has changed. Their number has increased,” the defense minister, Gen. Abdul Rahim Wardak, told lawmakers in a speech. He said that about 4,000 fighters, mostly from Chechnya, North Africa, and Pakistan, “have joined with them and they are involved in the fighting in Afghanistan.”
The longer the administration continues to dither, the easier it is for the radicals to sell their cause and claim the indecision by the administration indicates that, as they’ve always said, the US hasn’t the political will to finish much of anything that extends over a year or two. Bush would actually be seen as the exception.
Unless and until a decision is made and made rather quickly, recruiting should be good for the radicals.
And of course, good recruiting for them means more losses among our troops. Sure we usually have a high ratio of Taliban kills to every soldier we lose, but that’s not the point. The point is indecision emboldens the enemy and that ends up killing our soldiers.
There is absolutely no reason that a decision could not be reached within a week or two. One of President Obama’s primary jobs is that Commander in Chief. It’s time he started acting like one.
For the most part, both the Fed and the Obama Administration have been publicly confident of a number of things. They’ve assured us that the bailouts and stimulus spending, along with the great monetary expansion we’ve had since last October, were necessary to stave off economic collapse. They’ve also assured us that they have an end game for unwinding these policies when necessary.
But, Federal Reserve Bank of St. Louis President James Bullard is now warning that the negative results of the monetary expansion imposes more risk of inflation than generally believed.
I am concerned about a popular narrative in use today … that the output gap must be large since the recession is so severe … [and] any medium-term inflation threat is negligible, even in the face of extraordinarily accommodative monetary policy. I think this narrative overplays the output-gap story.
Take away Pres. Bullard’s Fed-speak, and what you have is a Federal Reserve bank president warning that the Fed’s accomodative policy runs a very real risk inflation when the economy picks up. Naturally, to fight this ionflation, the Fed will need to raise interest rates. With a doubling of the monetary base in the past year, that implies the possibility for raising rates quite substantially, which could strangle any nascent economic recovery in the cradle.
So, while Pres. Bullard also says that moderate economic growth for the end of the year is possible, we probably shouldn’t get our hopes up for a while.
Meanwhile, all of the extra dollars floating out there, combined with extremely large federal budget deficits for the next several years, is having an effect on the dollar. Not only has the number of dollars vastly expanded, the deficits require greatly increased bond sales, which encumber the federal government with a long-term debt obligation that will be harder and harder to meet. This is making the dollar…unattractive to heathen foreigners. Not only in terms of dollar-denominated investments, but also in making the dollar fundamentally unattractive as the world’s reserve currency. The rumblings about dumping dollar continue.
[T]he United Nations itself last week called for a new global reserve currency to end dollar supremacy, which had allowed the United States the “privilege” of building up a huge trade deficit.
UN undersecretary-general for economic and social affairs, Sha Zukang, said “important progress in managing imbalances can be made by reducing the (dollar) reserve currency country’s ‘privilege’ to run external deficits in order to provide international liquidity.”
Zukang was speaking at the annual meetings of the International Monetary Fund and World Bank, whose President Robert Zoellick recently warned that the United States should not “take for granted” the dollar’s role as preeminent global reserve currency.
You cannot simultaneously have your currency act as the global reserve currency while deflating the currency to uselessness by using foreign investment in dollars to maintain huge current account deficits. The foreigners may talk funny, and have quaint ways, but they’re not big enough hayseeds to recognize who ultimately gets the short end of that deal if it continues.
Still, our government’s response has been heartening.
Following the summit, US Treasury Secretary Timothy Geithner repeated Washington’s commitment to a strong dollar.
At this point, I suspect that the international financial community takes this commitment as seriously as the attendees of the local junior college take my commitment to have sex with barely legal teen girls. Actually, my commitment probably has a better chance of coming to fruition, since the international financial community doesn’t have “daddy issues”.
Meanwhile, all of the teachers, cops, firemen, DMV workers, etc., who thought taking a relatively low-paying government job now in return for really good retirement benefits, may need to rethink that strategy.
The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.
Within 15 years, public systems on average will have less half the money they need to pay pension benefits, according to an analysis by Pricewaterhouse Coopers. Other analysts say funding levels could hit that low within a decade.
After losing about $1 trillion in the markets, state and local governments are facing a devil’s choice: Either slash retirement benefits or pursue high-return investments that come with high risk.
In other words, start stocking up on Alpo for those hearty retirement meals, or hope that the pension fund’s investment in fur-bearing trout farms come through big-time.
But it’s not just government workers who may be looking at a bleak future. The government’s actions since last October are also having unintended consequences on the domestic economy that affects all of us–although I should point out that these unintended consequences were entirely predictable.
The Fed’s policy of essentially free money means that household savers get no return at all on CD’s, T-bills, Money Markets, etc., while speculators can borrow money at no cost, and toss them at any speculative investment that promises any return at all. So traditional savings are being gutted.
Excessive government borrowing is sucking the air out of the private credit markets. While goverment borrowing is proceeding at a $1.9 trillion annual rate, private credit is collapsing.
Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, on a net basis, they’re not providing any credit whatsoever. In fact, they’re actually liquidating loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second.
Ditto for mortgages. Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, they’ve been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second.
This lack of credit means that businesses have been unable to expand or hire–or even maintain their workforce. As a result, 7.2 million jobs have been lost in the last 21 months, compared to the 2.7 million jobs lost in the 30 months of the last recession. The official unemployment rate of 9.8% hides the effect of discouraged job seekers, or the under-employed, which means the actual unemployment rate, as it was calculated prior to 1973 is 17%. Shadow Government Statistics places the actual unemployment rate at an even worse 21%.
And now, after all the unintended consequences of our past actions, some in Congress are now calling for Stimulus II. Apparently, Stimulus I did such a bang-up job, that they want to double down on two sixes.
Hop. Hop. Hop.