Zero Hedge has a very pointed article about Detroit’s decline. In it are listed 25 reasons it’s bankrupt (that, as ZH claims, will leave you shaking your head when you finish). Here are the first 12:
1) At this point, the city of Detroit owes money to more than 100,000 creditors.
2) Detroit is facing $20 billion in debt and unfunded liabilities. That breaks down to more than $25,000 per resident.
3) Back in 1960, the city of Detroit actually had the highest per-capita income in the entire nation.
5) Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.
6) There are lots of houses available for sale in Detroit right now for $500 or less.
7) At this point, there are approximately 78,000 abandoned homes in the city.
8 ) About one-third of Detroit’s 140 square miles is either vacant or derelict.
I know, you look at that and say, "these have me shaking my head already … there’s more"? Oh, yeah. Read ’em all. But here’s the important part. It’s not just Detroit:
9) An astounding 47 percent of the residents of the city of Detroit are functionally illiterate.
10) Less than half of the residents of Detroit over the age of 16 are working at this point.
11) If you can believe it, 60 percent of all children in the city of Detroit are living in poverty.
12) Detroit was once the fourth-largest city in the United States, but over the past 60 years the population of Detroit has fallen by 63 percent.
“Oh my”, you’re saying, “I’m already shaking my head. There’s more”? Oh, yeah, much more.
But here’s the important part – a part we’ve been talking about for quite some time”
A while back, Meredith Whitney was highly criticized for predicting that there would be a huge wave of municipal defaults in this country. When it didn’t happen, the critics let her have it mercilessly.
But Meredith Whitney was not wrong.
She was just early.
Detroit is only just the beginning. When the next major financial crisis strikes, we are going to see a wave of municipal bankruptcies unlike anything we have ever seen before.
And of course the biggest debt problem of all in this country is the U.S. government. We are going to pay a great price for piling up nearly 17 trillion dollars of debt and over 200 trillion dollars of unfunded liabilities.
All over the nation, our economic infrastructure is being gutted, debt levels are exploding and poverty is spreading. We are consuming far more wealth than we are producing, and our share of global GDP has been declining dramatically.
We have been living way above our means for so long that we think it is "normal", but an extremely painful "adjustment" is coming and most Americans are not going to know how to handle it.
I agree completely. As I said in my first post about Detroit it is just the dead canary in the debt mine. It was simply the worst off of the bunch. But, remember, we were told this sort of stuff couldn’t happen and to quit worrying about. That debt wasn’t really that important. Well, in a microcosm, Detroit is the end state we can expect for any number of governmental units in this country (and others). It is where everyone is headed, it’s just a matter of the speed in which they get there.
You cannot live as we’ve been living and expect there to be no consequences. Let me modify that. You can “expect” whatever you wish, what’s delivered will be delivered by reality, not your expectations.
Apparently President Obama is sure his newest budget proposal is so good there’s no room or need for negotiation. Or so a senior White House official says:
“We don’t view this budget as a starting point in the negotiations. This is an offer where the president came more than halfway toward the Republicans,” a senior administration official told reporters Tuesday, speaking on condition of anonymity to detail the forthcoming document.
“So this is our sticking point,” the official said. “And the question is: are Republicans going to be willing to come to us to do serious things to reduce our deficits?”
Obama is proposing a $3.78 trillion dollar budget. Estimated tax revenues for 2014 are $3.22 trillion. Yet, this is being touted as a “budget cutting” budget and the White House claims it is exactly what the Republicans have wanted.
What … another deficit?
By the way, I don’t want “reduced deficits”. I want NO deficit. I.e. any budget that begins with an amount higher than the estimated tax revenues for the year is Dead On Arrival.
And that’s precisely the declaration this budget (like all the other budgets Obama has submitted) deserves.
Because of their false agenda, that’s why. They’re still convinced that, despite 17 years of no warming (as recently admitted by the head of the IPCC), oil is bad and “green” is good and that they’re doing something to save the world. Disregard the fact that green is still unviable. Disregard the fact that everywhere it has or is being pushed, energy costs are skyrocketing. Nevermind the fact that we are sitting on a sea of fossile fuel products that we only need to access. Screw the fact that science can find no discernable warming. Their minds are made up.
That said, there’s also the fiscal side of the house. The debt. The deficit. And the demand by Democrats to raise more revenue.
Unfortunately, because of their agenda, they’re likely to completely screw up a golden opportunity to bring in much more revenue and drive energy prices down, because their agenda is against fossile fuel. And we all know the party agenda comes before what is best for the country.
Enter the administration with a renewed plan to tax oil companies instead of opening access to the vast natural riches we enjoy. The result? Well this chart will help you comprehend the vast differences in the two policy choices (full size here):
So the either/or is “tax ’em or open access”. The difference:
According to a 2011 study by Wood Mackenzie, increased oil and natural gas activity underpro-access policies would generate an additional $800 billion in cumulative revenue for government by 2030. The chart puts into perspective the size of these accumulating revenues – enough to fund entire federal departments at various points along the timeline. By contrast, Wood Mackenize also found that hiking taxes on oil and natural gas companies would, by 2030, result in $223 billion in cumulative lost revenue to government.
It only proves the old saw -“If you want more of it, reward it and if you want less, tax it”. Think about it – money to help run government and pay down the debt (not to mention the thousands, if not millions of jobs created) being passed up in the name of false science and agenda politics.
Meanwhile, we’ll be left in the cold and the dark, thanks to agenda driven policies with no foundation in reality.
The more I see politics of today the more I think George Orwell simply listed by about 30 years. Imagine a politician a few decades ago trying to make this argument and then calling the other guy’s argument “absurd”.
“While I’m willing to compromise and find common ground over how to reduce our deficit, America cannot afford another debate with this Congress over how to pay the bills they’ve already racked up,” Obama said in the East Room of the White House at what aides have billed as the final news conference of his first term. “To even entertain the idea of this happening, of America not paying its bills, is irresponsible. It’s absurd.”
But the problem is, thanks to both Congress and this administration, we are not paying our bills. We’re borrowing money that we don’t have and have been spending it. I find it ironic, that the president who has run up the largest deficit in history is talking about being irresponsible.
And then, there’s this:
“They will not collect a ransom in exchange for not crashing the American economy,” Obama said. “The full faith and credit of the United States of America is not a bargaining chip.”
But that is precisely what Obama is doing, using the credit rating of America as a bargaining chip – to justify more spending on credit. No irony there. Interesting that Obama is suddenly concerned about “not crashing the American economy” when his profligacy has put us in a position we are in today.
“The issue here is whether America pays its bills,” Obama said. “We are not a deadbeat nation.”
Yes we are. He just doesn’t know it yet, or at least won’t admit it. And much of the cause rests with him as signified by his absurd argument.
OK, look, I’m done with the election. It’s over. Romney lost. Time to move on.
Most of us who follow politics understand the reasons and have a pretty good idea of why he’s going home and the Obama’s are staying in the White House. Short version: They let the left define the election issues. It was a masterful job of distraction aided and abetted by a complicit media (hey, “60 Minutes”, you have NO credibility anymore). Period.
Guess what those issues weren’t? The winning issues: Jobs. Economy. Debt. Deficit. ObamaCare. Benghazi. Fast and Furious.
Lesson: Don’t let your opposition define the issues. A lesson as old as politics. Romney’s campaign blew it. It allowed the left to make it about “lady parts”, abortion, contraception, Bain Capital, class warfare and racism. They made being successful something of which to be ashamed. And, of course, a couple of idiot GOP candidates at state level who came off like jackasses talking about “legitimate rape”, etc. who made it even worse (because the complicit media made their stupidity national stories — unlike jobs, the economy, debt, ObamaCare, Benghazi and Fast and Furious.).
And that scared the usual suspects enough to turn out and vote (ye olde and reliable low information voters in swing states who scare easily) and dampened GOP turnout (didn’t even get the number out that McCain got for heaven sake).
That’s the election in a nutshell.
So, now we put that behind us and deal with the inevitable aftermath.
It’s worse than you thought and, of course, worse than they projected. Here’s the updated deficit spending chart:
Check out the gray “actual” numbers for the last two years. There is nothing trending down. Reminds one of the promises about unemployment and the “stimulus”, doesn’t it?
As for your part, well, nothing unexpected there – you’re and your kids and their kids are on the hook for a lot more than projected as well:
Yup, let’s give him 4 more years, shall we? I’m sure his administration could change the direction of this chart as well. We could “unexpectedly” owe $40,000 each by the time that term finished up.
Obviously it must be me, because I cannot figure out why anyone would contemplate giving such an abject failure another 4 yearshot at making their lives even worse. It’s time for a little accountability.
Seriously – I believe in second chances, however I don’t believe everyone deserves one. Barack Obama is one of those who doesn’t deserve a second chance.
Another indicator poll. Again, these polls, at this point, are much more valuable than the horse race polls at this point.
They indicate the mood of the public. They tell you what is bothering them (or what is pleasing them). They allow you then to consult electoral history to get an idea of what these sorts of indicators usually mean.
The one issue that Obama gets a majority approval on is really not even on the radar screen for most Americans. Terrorism is there but unless there’s a big event involving America, it’s not a major issue for this campaign.
Next comes education. What Obama gets there is a passing grade – barely. But again, that’s not a top issue in this campaign. Nor are foreign affairs.
Immigration is important in certain regions of the country and he’s doing poorly there.
But his worst job approval comes in the three top issues for 2012. Jobs, the economy and the budget deficit.
In all three categories Obama’s is dismal. His disapproval rating is very high.
While most of the issues above pertain to the country, the jobs and economy categories are much more personal in nature. They have a great impact on individuals. And it is individuals who vote. Right now, only 37% of voters think he’s doing a good job creating jobs (and 58% think he’s doing a poor job), 36% approve (60% disapprove) of his handling of the economy and only 30% (64% disapprove) of his handling of the budget deficit.
That means he now “owns” the economy. And note the percentages of approval he gets are just about the same percentage of those who self-identify as Democrats.
So, what must Obama do? Well here’s Gallup’s advice:
Nearly six in 10 Americans approve of Obama’s handling of terrorism; however, that is where majority approval of the president ends in the current poll. He earns his lowest issue ratings on the economic issue areas tested in the survey, with approval on the federal budget deficit the lowest at 30%, and his approval on the economy not much higher, at 36%.
While Obama’s issue ratings are largely unchanged from where they have been over the past year, that stability may be a problem given his overall job approval rating is 45%. Historically, presidents who won a second term had near-50% job approval ratings or better prior to the election. To move closer to that range, Obama may want to focus singularly on raising his approval rating on the economy, as with previous presidents it seems to have been the issue approval most closely linked to overall job approval.
However, Team Obama wants to do anything but focus on the economy since doing so would also focus on how poorly it has performed and provide an opportunity to the GOP to point out why (policy, etc.). He wants nothing to do with that sort of focus. Thus the alternate campaign of distraction characterized by “small ball” where Obama et al try to divert attention from these issues to irrelevant issues that have no real bearing on these issues but capture the media’s attention and are exploitable by the Obama campaign.
Result? Well, we’ll see. I don’t believe he can hide from this forever. And as the election nears, it will become more and more difficult to avoid these issues (and more obvious if he attempts it). He’s eventually going to have to explain the 8.3% unemployment rate, the failure of the stimulus, the dramatic increase of the deficit (to no avail) and the planned trillion dollar deficits for the future.
And when that happens, and since its obvious the public now charge him with responsibility for the economy, it’s unlikely his ratings are going to improve.
How will this be spun?
By the end of the third quarter of fiscal 2012, the new debt accumulated in this fiscal year by the federal government had already exceeded $1 trillion, making this fiscal year the fifth straight in which the federal government has increased its debt by more than a trillion dollars, according to official debt numbers published by the U.S. Treasury.
Prior to fiscal 2008, the federal government had never increased its debt by as much as $1 trillion in a single fiscal year. From fiscal 2008 onward, however, the federal government has increased its debt by at least $1 trillion each and every fiscal year.
Bu … bu … but he has spent less money and created less debt than any president since Eisenhower.
My how things change over the course of 200+ years.
Back at the beginning of this experiment, people rejected a large and intrusive government. They’d been the victims of one and threw off that yoke. They acclaimed freedom as their goal and chose liberty as their battle cry.
When they finally got around to forming their own government, they carefully wrote a document which I’m sure they figured was an iron-clad guarantee that this country’s future would never see the same sort of tyranny they’d suffered under.
I just wonder what they’d think of this sprawling, debt ridden and intrusive mess we have now? I wonder what they’d think of over half the population getting some sort of compensation from government.
I wonder what they’d think of a Supreme Court Chief Justice more worried about what they’ll say about him and the court on the cocktail circuit and in the media than he is about upholding the Constitution, his sworn duty. I think I know.
And I’m pretty sure I know what they’d think of this:
Our nation’s current debt, nearing $16 trillion, and our annual budget deficit of $1.2 trillion, indicate that our government’s addiction to spending is nowhere near its limit.
Of that $16 trillion debt, the U.S. owes more than $5 trillion to foreign nations, an all-time high. So much for independence. We’re now a debtor nation, and unless we get our fiscal house in order, that debt will endanger our nation’s prospects for long-term growth.
If that sounds alarmist, consider this: In August 2011, Vice President Joe Biden visited China. This wasn’t just any diplomatic visit — it was the supplication of a debtor, in which Biden undertook to reassure our Chinese debtors that their investment is sound.
Biden assured his hosts that they had "nothing to worry about" when it comes to the U.S. honoring its obligations. It wasn’t the first time a high-ranking U.S. official has had to offer soothing words to our creditors, and at this rate it won’t be the last.
Let’s be clear. This administration isn’t the cause of all that debt. It’s just the latest (and the worst) to add to it, to the point that our debt now stands at more than our GDP. We are indeed a debtor nation.
That’s not at all how this began is it? Nor was that ever the plan.
I’m also pretty sure I know how they’d feel about the level of intrusion government now routinely practices (and increases) in this country. For example:
IRS officials on background tell FOX Business the U.S. Supreme Court ruling on health reform gives the IRS even more powers than previously understood.
The IRS now gets to know about a small business’s entire payroll, the level of their insurance coverage — and it gets to know the income of not just the primary breadwinner in your house, but your entire family’s income, in order to assess/collect the mandated tax.
Plus, it gets to share your personal info with all sorts of government agencies, insurance companies and employers.
And that’s just the tip of the iceberg. "We expect even more lien and levy powers," an IRS official says. Even the Taxpayer Advocate is deeply concerned.
As government takes more and more control of your lives, it intrudes deeper and deeper into them:
The TAO [Taxpayer Advocate Office] says that the “IRS will need to determine a taxpayer’s compliance with the individual [insurance] mandate and assess a penalty if coverage is inadequate.”
However, the penalty isn’t based on just your personal net income. The penalty will be based on an entirely different number that is more than just your paycheck earnings — your ‘household income.’
“This determination is based on a concept of ‘household income,’” TAO has said, adding, “this may differ from the income reported on the taxpayer’s return, because it is a composite of all of the income reported by members of a taxpayer’s household — information that may not be readily accessible to the IRS."
If the IRS finds you have fallen short of the law, it would hit you with a penalty tied to your household income (which may be that of an individual or several family members).
Under the new health law, the IRS penalty would be based on “modified adjusted gross income,” not adjusted gross income that you normally report at the bottom of the first page of your tax form 1040, before you take deductions or personal exemptions.
The modifications add back in things like non-taxable interest and excluded foreign income to this number.
Health reform’s insurance mandate says if you do not have “adequate” insurance, you’ll have to pay a fine as part of your tax return. If your business doesn’t provide “affordable” coverage, that business may have to pay a fine to the IRS, too, as part of its tax return filings.
The TAO has noted Americans must now tell the IRS under the new law:
*Insurance plan information, including who is covered under the plan and the dates of coverage;
*The costs of your family’s health insurance plans;
*Whether a taxpayer had an offer of employer-sponsored health insurance;
*The cost of employer-sponsored insurance;
*Whether a taxpayer received a premium tax credit; and
*Whether a taxpayer has an exemption from the individual responsibility requirement.
The TAO has warned: “This is different from the type of information the IRS typically deals with, and some taxpayers may feel uncomfortable about sharing it with the IRS.”
In fact, it is incumbent upon you to prove to the IRS that you have “adequate coverage”, whatever that ends up meaning. And:
The TAO has also reported that “obtaining this new information will require the IRS to communicate with entities and government agencies that it may not deal with now,” including:
*New state-run insurance exchanges;
*Insurance companies; and
*Government insurance programs.
But remember the sales pitch – government will make health care simpler, more cost effective and better.
Congratulations to all the simpletons out there who bought into this scam and ended up foisting this intrusive monstrosity on the rest of us. In fact, thanks to all, who through out the 200 years it has taken us to to get to this point, worked so hard to achieve it “for the common good”. </sarc> Nice mess you’ve given us.
As for the rest of you, happy Dependence day!
I’m in a series of meetings today so I’m unlikely to get any serious blogging done.
You guys talk among yourselves.
Suggestions: “flip-flop” is now “evolution”? Really?
And, dealing with just the politics of Obama’s gay marriage announcement, guess what we won’t be talking about again today?