Obama: Corruption, Deception, Dishonesty, Deceit and Promises Broken

[Soul Crusher]

Obama Delivers Catastrophic New Budget, Then Declares That Government Must “Live Within It’s Means”
The Patriot Statesman ^ | 2-14-2011 | Aaron Mattews

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On the most critical issue of his presidency – the long-term fiscal sustainability of the United States, Barack Obama just voted “present”.

Today Obama delivered a mind numbing budget that includes $26.3 trillion in NEW debt over the next decade. 2011 will see the biggest one-year debt jump in history, or nearly $2 trillion, to reach $15.476 trillion by Sept. 30, the end of the fiscal year. That would be 102.6 percent of GDP – the first time since World War II that dubious figure has been reached. On top of this, Obama plans on strapping our families with a ten-year, $1.5 trillion tax hike.

Jake Tapper of ABC stated today that “At no point in the president’s 10-year projection would the U.S. government spend less than it’s taking in….The plan shows that Obama will not take the lead on any aggressive measure to eliminate the nation’s $14 trillion debt.”


(Excerpt) Read more at patriotstatesman.com ...


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What a frigging asshole this maddoff POTUS is.   

[Soul Crusher]

Shahien Nasiripour
HuffPost Reporting
shahien@huffingtonpost.com
Obama's Small Business Plan To Come Up Short, White House Concedes
 
Centerpiece Of Obama's Small Business Plan Likely To Fall Short, Administration Concedes
First Posted: 02/14/11 09:46 PM Updated: 02/15/11 09:06 AM

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 NEW YORK -- After spending much of last year relentlessly touting the benefits of a proposed $30 billion fund that would jumpstart bank lending to small businesses, the Obama administration forecasts the initiative will fall far short, spending just a little over half of the intended allotment, according to the White House's spending plan for 2012.

The proposal, known as the Small Business Lending Fund, originally would have taken $30 billion from the Troubled Asset Relief Program and diverted it to smaller banks. The move was supposed to stimulate lending by lowering the cost of funds as loan totals rise. The more a bank lends, the cheaper the funds become.

The program has faced an uphill climb. Banks are wary of taking government funds for fear of after-the-fact program changes; demand for loans remains tepid; and there's no guarantee banks would lend the money once they receive it.

The White House spending plan for next year reflects those challenges.

The administration projects it will allocate just $17.4 billion of the funds, or just 58 percent of its original goal. All of the money will be disbursed by Sept. 30, according to Treasury Department projections released Monday.

The proposal was a centerpiece of the administration's pre-election plans to boost small businesses, which have been among the hardest-hit sectors since the onset of the financial crisis.

Unlike large corporations, small businesses don't have access to the capital markets. They don't issue debt to investors nor do they raise capital on stock exchanges. Instead, they rely on banks for their funding. Small community lenders and regional banks are their primary source of credit.

Story continues below
AdvertisementBut bank lending froze as consumer spending fell, business investment slowed and banks faced growing losses on bad loans.

Inside the Treasury Department, a small team worked to counter the slowdown. By January of last year, Obama was able to pitch the plan that would help smaller firms get credit and help stabilize small lenders.

The plan was to inject taxpayer funds into community banks in hopes they'd lend it to small businesses. It worked like TARP: Banks borrow cash from Treasury, and pay a small fee for the privilege. The program, though, was limited to banks with less than $10 billion in assets.

Republican critics derided it as "TARP 2.0," or a reincarnation of the deeply unpopular bank bailout. In fact, banks in TARP can refinance out of the program and into this new one, escaping the restrictions that accompanied TARP like limits on executive compensation.

Administration officials and Democrats in Congress, though, pitched it as much-needed help for small businesses.

The administration spent nine months pounding Republicans for their objections to the proposal. Last September, a little over a month to the election, Obama signed it into law.

During a speech last March to economists in Washington, Christina D. Romer, the then-chairman of the White House Council of Economic Advisers, said the $30 billion fund "will translate into several times that amount of additional lending and could help create hundreds of thousands of new jobs."

Based on administration projections released Monday, it's unclear whether the fund will achieve its original objectives.

The White House declined to comment.

Officials insist they have $30 billion to lend. The Treasury Department is in the midst of trying to sign up banks for the fund, but bankers have said they're reluctant to accept any more taxpayer money.

Meanwhile, the government watchdog overseeing the bailout, the Special Inspector General for the Troubled Asset Relief Program, said earlier this month it would immediately audit the program.

*************************
Shahien Nasiripour is a business reporter for The Huffington Post. You can send him an e-mail; bookmark his page; subscribe to his RSS feed; follow him on Twitter; friend him on Facebook; become a fan; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

[Soul Crusher]

January Retail Sales: The "Real" Consumer Economy Remains In Depression
DShort ^ | 2-15-2011 | Doug Short



January Retail Sales: The "Real" Consumer Economy Remains In Depression

February 15, 2011
Doug Short - monthly update

The February 2011 Advance Monthly Sales for Retail Trade and Food Services Report for January was released this morning. Here is the opening paragraph of the report

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $381.6 billion, an increase of 0.3 percent (±0.5%)* from the previous month, and 7.8 percent (±0.7%) above January 2010. Total sales for the November 2010 through January 2011 period were up 7.6 percent (±0.5%) from the same period a year ago. The November to December 2010 percent change was revised from +0.6 percent (±0.5%) to +0.5 percent (±0.3%). * The 90 percent confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different than zero.

The 0.3% number is disappointing. The Briefing.com consensus estimate was 0.5% and its own estimate was 0.7%.

The chart below shows the complete data series from 1992, when the U.S. Census Bureau began tracking the data. I've highlighted recessions and the approximate range of two major economic episodes that have impacted consumer attitudes. The Tech Crash that began in the spring of 2000 had little impact on consumption. The Financial Crisis of 2008 has had a major impact. The January retail sales take us in nominal terms a mere 0.4% above the previous high of November 2007.

[snip]


(Excerpt) Read more at dshort.com ...

[Soul Crusher]

Where is Obama Leading Us? (How to define Obama in the upcoming budget showdown)
NRO ^ | 2/15/2011 | Stanley Kurtz

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Obama’s clever budget proposal has won him the advantage in the coming political showdown. Democratic grousing over limited cuts to discretionary spending will be used to paint the president as a fiscally responsible moderate. The Republican plan will be demonized as a heartless assault on the poor and elderly. Obama will do everything short of sending out an engraved invitation to provoke a GOP-led government shutdown. Whether or not the confrontation goes nuclear, Obama will enjoy the sort of upper hand Clinton had over Gingrich fifteen years ago.

Granted, the coming entitlement meltdown is a far greater threat than anything America faced in 1995. And despite Gingrich’s 1994 victory, there was nothing comparable to the Tea Party in those days. Even so, as the battle is shaping up, Obama is slated to win. The country as a whole fails to grasp the magnitude of the coming fiscal crisis. Advantage, Obama. What to do?

The answer, I think, is to tell a (true) story about Obama’s long-term aims and intentions. If the word socialism makes you uncomfortable, try “unaffordable Euro-style welfare state.” Obama is not Bill Clinton, and highlighting that fact is the best way to prevent Obama from assuming the mantle of triangulation. Obama wants to win a shut-down battle, but without “ending welfare as we know it.” In fact, Obama has already gone a far piece down the road of resuscitating and expanding the pre-Clinton welfare state. His budget largely preserves (“freezes”) that achievement. Without filling in the ideological commitments and long-term plans Obama so prudently declines to avow, the GOP will lose this battle.

Tea Party moxie and the shellacking notwithstanding, the GOP establishment remains reluctant to highlight Obama’s radicalism. I understand the reasons for this, and they are by no means trivial. While Obama’s policies are opposed by many, he remains personally popular. It seems disrespectful to attribute an ideology to the president that he himself won’t own up to. Words like “radical,” much less “socialist,” sound impolite. Yet, without defining the president in a way that happens to be not only politically advantageous, but true, I doubt Obama can be stopped. Telling the truth about this president is how we shellacked him to begin with.

Silly theories like birtherism and the notion that Obama is a committed Muslim have been amplified by a mainstream media eager to discredit legitimate assessments of the president’s transformative ambitions. Nonsensical arguments offered up by the left in the aftermath of Tucson have been used to shut down perfectly fair criticisms of the president.

Obama gains immensely by fudging or simply keeping silent about his ideological commitments and long-term plans. (The imaginary ten-year out projections in the current budget, of course, are a cover for next year’s expansion of government and do not represent the president’s actual long-term plans.) Obama’s every tactical feint to the center frightens a left which will not desert him, but whose criticism makes him seem moderate. Meanwhile, conservatives look disrespectful for filling in the blanks. Even so, that is the way to win. The real disrespect, of course, is Obama’s failure to own up to his own ideology. Yet Republicans have retreated of late from attempts to (accurately) define the president. That is a recipe for failure.

It will not do to chastise Obama’s budget proposal as a simple “refusal to lead,” a “punt,” or a “cynical political maneuver.” Obama isn’t failing to lead. He is very cleverly leading us toward an irreversible expansion of the welfare state. If Obama is reelected and in control when the entitlement crisis finally does hit, he will manage the country toward Euro-style taxes and Euro-style socialism. After all, in the midst of its current fiscal crisis, Obama is pushing Europe to expand spending, not contract it.

I like this post by Lexington Green (h/t Glenn Reynolds), although his vision of permanent Republican meltdown is overdrawn. Lexington rightly rejects the “failure to lead” framing, highlighting Obama’s strategic moves and long-term intentions instead. The notion that Obama plans to use Republican proposals for cuts to kick off a movement of “angry and mobilized” beneficiaries is exactly right. Obama’s 2010 attacks on the Chamber of Commerce and his infamous “punish your enemies” exhortation were efforts to do the same thing. I lay out the rationale behind this intentionally polarizing strategy in the final chapter of Radical-in-Chief. It’s a program deeply rooted in Obama’s past. And in the absence of an honest avowal of his plans and motives in the present, only the past reveals the truth about this president’s vision of the future.

Perhaps I’m wrong and “the president’s abdication of leadership” sound bite will be enough to defeat “the GOP’s heartless cuts.” Even so, as an alternative, I suggest: “Obama’s radical plans are leading us off a cliff.”

[Soul Crusher]

Obama's Revenue Estimates Are Either Fantasy Or Comedy
Chris Martenson, Chrismartenson.com | Feb. 15, 2011, 12:44 PM | 445 |  11

Daily Digest 2/15 - NYSE/Deutsche Börse Merger Finalized, Crony Capitalism And Modern Banking, Russia To Begin Arctic Drilling
Obama's Budget is a Fantastic Comedy

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Fantasy or comedy?  I couldn't decide which way to label the Obama budget, so I went with both.

The bottom line is that the Obama administration has brought forth the most unbelievable revenue increase that I have ever seen proposed in a budget, a whopping 65% increase in revenues in just four years, which will - miracle of miracles - drop the deficit as a percent of GDP from nearly 11% to just 3.2% over those same four years.

The only problem with this scenario is that it stands virtually no chance of actually happening. Revenue will be far lower than projected and the deficit correspondingly higher.

One of my abilities is spotting bogus numbers quickly, and another is to make reasonably accurate projections without a staff of hundreds. For example, in 2009 I called for the Social Security fund to soon begin dipping into negative territory when the CBO was clinging to the illusion that 2017 was the 'below zero' date. Turns out I was right, and it wasn't a terribly difficult call to make. A little trend projection here, some assumptions about early retirement there, a higher and more realistic assessment of peak unemployment, and - voila! - a reasonably accurate projection was made.

Let's look at the recently released Obama budget, which is so far off the mark that no special abilities are required beyond the ability to suppress the urge to chuckle:



The green circles show the rosy deficit-reduction estimates, while the red arrows indicate the incredible 65% increase in federal revenues over a single four year period.  65%! How likely is that? Is it realistic?

Perhaps a little history is in order here. Let's start by asking a question: In any other four-year period, have federal revenues increased by 65% or more?

The answer is yes, but it’s a very qualified yes.

In the first chart below, the red bars show the proposed revenue increases on a rolling four-year basis. That is, each year is compared to the revenue period four years prior. The blue bars are the same, only they represent actual history, not projections while the red bars are the Obama team projections.

The second chart is a comparison to CPI to make a point.



Over the past 60 years, there have only been three other years with a similar or higher rate of revenue growth to the one estimated to occur in 2015: 1979, 1980, and 1981.

There are two things we might note about those prior three years ('79-'81) of rapid federal revenue growth. The first is that those same years represent the second, first, and fourth highest rates of yearly inflation in 50+ years of data, coming in at 11.3%, 13.5%, and 10.4%, respectively.

Does the Obama budget assume similar enormous rates of inflation? Nope. It assumes 2% or less inflation in every year of its projections out through 2015.  So it's not inflation that will be driving the enormous revenue growth.

Another reason we might anticipate extremely strong revenue growth is because of a rapid expansion of GDP.

Here again in 1979, 1980, and 1981, we saw something very unusual in the data: Those years clocked exceptionally robust GDP growth at 11.7%, 8.8%, and 12.1%, respectively.  Out of 65 years of data, those were the 4th, 5th and 17th fastest years of economic expansion.

Could that be the driver behind Obama's optimism? Is his team calling for double-digit GDP growth over the next few years?  Do they envision 'top ten' like performance for a couple of those years?

Not according to their published data.



So we can't really defend the projected increase in revenues on the assumption of massive economic expansion either. The Obama team does predict a pretty decent expansion - but on a relative basis, it's nothing spectacular and is less than half that which drove the revenue expansion in the 1979-81 period.

So the 65% revenue increase will not be driven by either inflation or GDP expansion.

What if we compare the projected increases historically on an inflation-adjusted basis - would that put them in a better and more believable light?

In this next chart, we simply chart each year's federal revenues after correcting for CPI (we used the Obama budget CPI assumptions for the years 2011 - 2015 to discount the future so everything is in 2010 dollars).



Are these numbers any less fuzzy? Nope. Even on this basis the proposed revenue increases are the largest on record, bar none.

Conclusion

There is almost no chance of the Obama revenue projections coming to pass, unless massive tax increases are part of the deal, and as far as we know, they aren't.

The only other alternative is that the United States might enjoy some pleasurable combination of quite rapid growth, a fall off in unemployment to match, tidy increases in wages, and a low CPI.  But the probability of all of these coming to pass is very, very low (although I will admit that they must be very appealing to an incumbent. Appealing? Yes. Likely? No.)

Here's my prediction; we'll have sub-par growth in 2011 and relatively weak growth in 2012, with a 50% chance of a double-dip appearing in one of those years. As such, revenue growth will be slightly below average between here and 2015.

Using these assumptions, and generously assuming that things more or less carry on as normal and even more generously that the economy magically grows to $19 trillion as the Obama team has assumed, the actual budget deficit will be no less than 8% of GDP each year between here and 2015.



My estimates translate into a roughly $1.5 trillion cash deficit each and every year -- give or take a little -- digging our national debt hole deeper by another $7.5 trillion by 2015. 

This, however, is merely my starting bid. I can easily envision deficits that are far higher in both aggregate and percent-of-GDP terms, due to some combination of rising energy prices and debt overhang dragging the GDP figure downwards, and rising interest rates driving federal costs higher.

The bottom line is that either this budget is a fantasy, or I am completely wrong and we somehow set historical records for revenue growth during a time of low inflation and below average GDP growth.

It is against this backdrop that you should be especially dismissive of any and all partisan rhetoric that proposes to reduce the deficit by trimming this or that program by a few billion here and there. Until and unless you hear about cuts to the big four - Defense, Medicare, Medicaid, and Social Security - you can be certain you are merely listening to partisan talking points aimed at posturing for the next election, not credible plans for attacking the root of the problem.

The US is facing a deficit pattern (deficits higher than nominal GDP growth) that has ruined many a country before. A failure to legitimately address this condition before being forced to do so by global or market circumstances will lead to a far rougher period of adjustment than necessary.  Such a failure even risks it all: a sudden loss of reserve currency status for the US that leads to a sudden repatriation of some $7 trillion in US-dollar-denominated assets currently held off-shore.

Said simply: The risk is a massive inflationary event that forces the Fed to choose between defending the dollar (by raising interest rates) or defending the US economy. It can't do both at the same time.

Those interested in learning more about how events will likely play out from here can read our Guide to Navigating the Coming Crisis (free executive summary; enrollment required for full access).

Tags: Budget, Obama | Get Alerts for these topics »

Read more: http://www.businessinsider.com/obamas-budget-is-a-fantastic-comedy-2011-2#ixzz1E3K63JMF

[Soul Crusher]

High-speed rail is a fast track to government waste
The Washington Post ^ | February 14, 2011 | Robert J. Samuelson

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Vice President Biden, an avowed friend of good government, is giving it a bad name. With great fanfare, he went to Philadelphia last week to announce that the Obama administration proposes spending $53 billion over six years to construct a "national high-speed rail system." Translation: The administration would pay states $53 billion to build rail networks that would then lose money - lots - thereby aggravating the budget squeezes of the states or federal government, depending on which covered the deficits.

There's something wildly irresponsible about the national government undermining states' already poor long-term budget prospects by plying them with grants that provide short-term jobs. Worse, the rail proposal casts doubt on the administration's commitment to reducing huge budget deficits. The president's 2012 budget is due Monday. How can it subdue deficits if it keeps proposing big spending programs?

~~ snip ~~

It's a triumph of fancy over fact. Even if ridership increased fifteenfold over Amtrak levels, the effects on congestion, national fuel consumption and emissions would still be trivial. Land-use patterns would change modestly, if at all; cutting 20 minutes off travel times between New York and Philadelphia wouldn't much alter real estate development in either. Nor is high-speed rail a technology where the United States would likely lead; European and Asian firms already dominate the market.

Governing ought to be about making wise choices. What's disheartening about the Obama administration's embrace of high-speed rail is that it ignores history, evidence and logic. The case against it is overwhelming. The case in favor rests on fashionable platitudes. High-speed rail is not an "investment in the future"; it's mostly a waste of money. Good government can't solve all our problems, but it can at least not make them worse.


(Excerpt) Read more at washingtonpost.com ...

[Soul Crusher]

Obama threatens to veto House GOP spending measure
By Sam Youngman and Michael O'Brien - 02/15/11 04:08 PM ET
 
The Obama administration on Tuesday threatened to veto the House GOP's measure funding the federal government.

In a statement of administration policy, the Office of Management and Budget said cuts included in the Republican continuing resolution would hamstring the U.S. economy and compromise national security.

"If the president is presented with a bill that undermines critical priorities or national security through funding levels or restrictions, contains earmarks or curtails the drivers of long-term economic growth and job creation while continuing to burden future generations with deficits, the president will veto the bill," the statement said.


The White House said the cuts in the GOP plan "will undermine our ability to out-educate, out-build, and out-innovate the rest of the world."

The statement said the GOP proposal goes too far and "proposes cuts that would sharply undermine core government functions and investments key to economic growth and job creation, and would reduce funding for the Department of Defense to a level that would leave the department without the resources and flexibility needed to meet vital military requirements."

The House GOP measure would cut this year's spending by $61 billion, though conservative Republicans want to make further cuts.

Obama, at a press conference Tuesday, said lawmakers should refrain from threatening a government shutdown, and the statement hinted that Obama is still hopeful that can be avoided.

"The administration looks forward to working with the Congress to refine the legislation to allow critical government functions to operate without interruption for the remainder of the fiscal year underway," the statement said.

The administration's veto threat comes as the Republican House begins debate on the continuing resolution this afternoon. Speaker John Boehner (R-Ohio) has pledged an "open" debate, meaning that lawmakers could add any range of amendment to the legislation, cutting spending even further.

The statement sets up the possibility for a showdown between the administration and Democrats in the Senate with the GOP-held House over the measure. Funding for the government's day-to-day operations runs out on March 4, and without some sort of short-term fix, the federal government would risk shutting down. The chairman of the House Budget Committee said Tuesday morning the government would pass a short-term CR rather than risking a shutdown.


http://thehill.com/blogs/blog-briefing-room/news/144285-obama-waves-veto-threat-at-continuing-resolution

[Soul Crusher]

[Soul Crusher]

THE DAMAGE OBAMA HAS DONE
By Dick Morris And Eileen McGann
02.15.2011

http://www.dickmorris.com/blog/the-damage-obama-has-done




 
The mainstream media does not cover the full extent of the damage the Obama Administration has inflicted on this country. Even FoxNews often doesn’t have the time to go into sufficient depth to explain what is happening.

From our friend Ruth S. King comes a chart which all of us should read and absorb, sobering though it may be:


 January 2009 Today % chg Source
Avg. retail price/gallon gas in U.S. $1.83 $3.104 69.6% 1
Crude oil, European Brent (barrel) $43.48 $99.02 127.7% 2
Crude oil, West TX Inter. (barrel) $38.74 $91.38 135.9% 2
Gold: London (per troy oz.) $853.25 $1,369.50 60.5% 2
Corn, No.2 yellow, Central IL $3.56 $6.33 78.1% 2
Soybeans, No. 1 yellow, IL $9.66 $13.75 42.3% 2
Sugar, cane, raw, world, lb. fob $13.37 $35.39 164.7% 2
Unemployment rate, non-farm, overall 7.6% 9.4% 23.7% 3
Unemployment rate, blacks 12.6% 15.8% 25.4% 3
Number of unemployed 11,616,000 14,485,000 24.7% 3
Number of fed. employees, ex. military (curr = 12/10 prelim) 2,779,000 2,840,000 2.2% 3
Real median household income (2008 v 2009) $50,112 $49,777 -0.7% 4
Number of food stamp recipients (curr = 10/10) 31,983,716 43,200,878 35.1% 5
Number of unemployment benefit recipients (curr = 12/10) 7,526,598 9,193,838 22.2% 6
Number of long-term unemployed 2,600,000 6,400,000 146.2% 3
Poverty rate, individuals (2008 v 2009) 13.2% 14.3% 8.3% 4
People in poverty in U.S. (2008 v 2009) 39,800,000 43,600,000 9.5% 4
U.S. rank in Economic Freedom World Rankings 5 9 n/a 10
Present Situation Index (curr = 12/10) 29.9 23.5 -21.4% 11
Failed banks (curr = 2010 + 2011 to date) 140 164 17.1% 12
U.S. dollar versus Japanese yen exchange rate 89.76 82.03 -8.6% 2
U.S. money supply, M1, in billions (curr = 12/10 prelim) 1,575.1 1,865.7 18.4% 13
U.S. money supply, M2, in billions (curr = 12/10 prelim) 8,310.9 8,852.3 6.5% 13
National debt, in trillions $10.627 $14.052 32.2% 14

Just take this last item: In the last two years we have accumulated national debt at a rate more than 27 times as fast as during the rest of our entire nation’s history. Over 27 times as fast! Metaphorically, speaking, if you are driving in the right lane doing 65 MPH and a car rockets past you in the left lane 27 times faster . . . it would be doing 1,755 MPH!

(1) U.S. Energy Information Administration; (2) Wall Street Journal; (3) Bureau of Labor Statistics; (4) Census Bureau; (5) USDA; (6) U.S. Dept. of Labor; (7) FHFA; ( Standard & Poor’s/Case-Shiller; (9) RealtyTrac; (10) Heritage Foundation and WSJ; (11) The Conference Board; (12) FDIC; (13) Federal Reserve; (14) U.S. Treasury

In our new book, Revolt! (Due out March 1 – you can pre-order autographed copies now at DickMorris.com) we explain how Obama has wrecked our economy and chart a path to reverse the damage and defeat him in 2012.

These numbers make it crystal clear how crucial these two tasks really are!

[whork25]

Dick Morris i hate that fat prick

[Soul Crusher]

Morris is a sleeze no doubt, but I posted it because of the chart he listed.  Its viewed better on his site.

[Soul Crusher]

HHS Will Become Nation's First Trillion-Dollar-Per-Year Cabinet Department When Obamacare's Fully Implemented in 2014, Says Obama's Budget
Tuesday, February 15, 2011
By Terence P. Jeffrey
 http://www.cnsnews.com/news/article/hhs-will-become-nation-s-first-trillion

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President Barack Obama is applauded by Vice President Joe Biden and House Speaker John Boehner on Capitol Hill while delivering his State of the Union address on Tuesday, Jan. 25, 2011. (AP Photo/Pablo Martinez Monsivais, Pool)

(CNSNews.com) - The Department of Health and Human Services will become the nation's first-ever $1-trillion-per-year Cabinet department in 2014, which is also the first year President Barack Obama's health-care law is scheduled to be fully implemented by that department, according to the budget projections President Obama released yesterday.

In fact, HHS already is costing American taxpayers more per year in inflation-adjusted dollars than the entire federal government cost back in 1965, the year President Lyndon Baines Johnson signed Medicare into law.

Medicare is the single most costly program in HHS.

This year, according to the Obama budget, HHS will spend $909.7 billion. That makes it the most expensive Cabinet department in the U.S. government, exceeding the Defense Department—which will spend $739.7 billion this year--by $170 billion.

In 1965, according to the historical tables published yesterday with President Obama’s budget, the entire federal government spent $118.228 billion. Using the Bureau of Labor Statistics inflation calculator, that adjusts to $822.6 billion in 2010 dollars—or about $87 billion less than HHS alone will spend this year.

HHS spending will increase to $1.049 trillion in fiscal 2014, according to the Obama budget. That would be the first time in history that any U.S. Cabinet department spent more than $1 trillion in a single year.

According to HHS’s budget plan, Medicare will account for 54 percent of the department’s budget in fiscal 2012 and Medicaid will account for 30 percent.

Medicare spending will  rise from $488.4 billion in fiscal 2011 (the current year) to $557 billion in fiscal 2014, when President Obama’s health-care law would be in full force, according to budget tables published with the president's budget. Medicaid will rise from $276.2 billion this year to $352.1 billion in 2014.

[Soul Crusher]

President Obama's budget kicks the hard choices further down the road
http://www.washingtonpost.com/wp-dyn/content/article/2011/02/15/AR2011021500055_pf.html
Tuesday, February 15, 2011; 12:00 AM



THE PRESIDENT PUNTED. Having been given the chance, the cover and the push by the fiscal commission he created to take bold steps to raise revenue and curb entitlement spending, President Obama, in his fiscal 2012 budget proposal, chose instead to duck. To duck, and to mask some of the ducking with the sort of budgetary gimmicks he once derided. "The fiscal realities we face require hard choices," the president said in his budget message. "A decade of deficits, compounded by the effects of the recession and the steps we had to take to break it, as well as the chronic failure to confront difficult decisions, has put us on an unsustainable course." His budget would keep the country on that course.

Granted, the budget outlines cuts in discretionary spending, ranging from military procurement to heating assistance for the poor. A five-year freeze in nonsecurity discretionary spending - two years longer than the three-year freeze proposed in last year's budget - would save $400 billion during that period compared to what would have been spent otherwise to keep up with inflation.

But as Mr. Obama noted in his State of the Union address, discretionary spending represents a small slice of government outlays, so cuts in discretionary spending are simultaneously onerous and insufficient to reach fiscal balance. The administration proclaimed that its budget would save $1.1 trillion, two-thirds of it from spending cuts. It neglected to point out that, even if all those savings were implemented, the debt would increase by another $7.2 trillion over the decade. And that's accepting the administration's optimistic projections. From 2013 to 2016, the administration estimates the economy will grow at an average rate of nearly 3.9 percent per year, while the Congressional Budget Office projects a growth rate of just 3.4 percent. That could make an enormous difference in the amount of revenue generated and, consequently, the size of deficits. By 2021, the national debt will equal 77 percent of the total economy, even given the administration's rosy forecast - and, as the administration's chart reprinted here shows, the debt will then really explode.

Administration officials applauded themselves for having the discipline to offset the cost of two expensive items: avoiding punishing cuts in Medicare reimbursement rates for physicians and making sure the alternative minimum tax (AMT) does not hit a growing share of middle-class taxpayers. Not so fast. The patches are temporary - two years in the case of the so-called "doc fix," three years for the AMT. Meantime, the administration uses up a decade's worth of financing to pay for them - with no whisper of how to address the problems in the long term.

And that's not the only gimmickry. The budget assumes that the full cost of the doc fix will be paid for, and therefore not add to the deficit, but fails to explain how. It includes a $328 billion magic asterisk for transportation funding, identified only as "bipartisan financing for Transportation Trust Fund." Higher gasoline taxes? Don't ask. Meanwhile, the administration recommends paying for the AMT fix by reducing the value of charitable tax deductions for those in the two highest tax brackets. A smart idea, and one that the administration also proposed in its two previous budgets, originally as a way to pay for health-care reform. If it was a nonstarter then, what's the basis for thinking its prospects are better now?

The larger problem with the budget is the administration's refusal to confront the hard choices that Mr. Obama is so fond of saying must be faced. The president's debt commission concluded that more tax revenue will be needed in coming years to finance the costs of an aging society. Mr. Obama repeated his call to do away with the Bush tax cuts for upper-income taxpayers in two years - but maintained his tired and irrational insistence that the rest of the tax cuts, enacted in far different fiscal circumstances, be preserved.

If Oklahoma Republican Sen. Tom Coburn could sign on to a deficit-reduction plan that included raising tax revenue, is it too much to ask for such bravery from Mr. Obama? And if Illinois Democratic Sen. Richard Durbin could sign on to a plan that included raising the Social Security retirement age, is it too much to ask for more from Mr. Obama than an airy set of "principles for reform"? Sadly, the answer appears to be yes.


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Once again - watch what he does, not what he says.   

[Soul Crusher]

Obama To The Next Generation: Screw You, Suckers
14 Feb 2011 02:49 pm
http://andrewsullivan.theatlantic.com/the_daily_dish/2011/02/obama-to-the-obama-generation-youre-on-your-own.html

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The logic behind president Obama's budget has one extremely sensible feature: it distinguishes between spending that simply adds to consumption, and spending that really does mean investment. His analogy over the weekend - that a family cutting a budget would rather not cut money for the kids' education - is a sound one. We do need more infrastructure, roads and broadband, non-carbon energy and basic science research, and some of that is something only government can do. In that sense, discretionary spending could be among the most important things government could do to help Americans create wealth themselves. And yet this is the only spending Obama wants to cut.

But the core challenge of this time is not the cost of discretionary spending. Obama knows this; everyone knows this. The crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there's some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I'd feel duped. And they were duped. All of us who took Obama's pitch as fiscally responsible were duped.

The cynical political calculation is obvious and it is well put by Yglesias and Sprung. If Obama backs Bowles-Simpson, the GOP will savage him for the tax hikes, while also scaring the wits out of the elderly on Medicare. The Democratic left - just look at HuffPo today - will have a cow. Indeed, if Obama backs anything, the GOP will automatically oppose him. He has to wait for a bipartisan agreement which he can then gently push ahead. But that's exactly why we are in this situation today. Because no president has had the balls to deal with it, and George W. Bush made it all insanely worse. Sprung says the proposal on corporate taxes is a trial balloon. He argues that:

Corporate income taxes account for about 12% of the Federal government's revenue.  Obama's core premise for reforming them is structurally similar to the Bowles-Simpson commission's approach to personal tax reform: reduce targeted tax breaks while lowering the overall rate, currently at 35%.

And that's fine if you think we have plenty of time. But in a mere nine years, entitlements will account for 64 percent of all federal spending. And Obama just punted on his promise to cut Medicare payments to doctors, as pledged under Obamacare as a core part of the case that health insurance reform would cut the deficit. So congrats, Megan. We can chalk that up as a cynical diversion (even though Obama pledges to find savings elsewhere in the Medicare budget to make up for this lie - a promise we now have no reason to trust or believe).

There is some hope, as David Brooks has noted. Those who want to save the useful things that government alone can do, while pulling back from the fiscal brink, have to

get behind an effort now being hatched by a group of courageous senators: Saxby Chambliss, Mark Warner, Tom Coburn, Dick Durbin, Mike Crapo and Kent Conrad. These public heroes have been leading an effort to write up the Simpson-Bowles deficit commission report as legislation to serve as the beginning for a serious effort to get our house in order. They’ve been meeting with 20 to 40 of their colleagues to push this along.

They have to lead, because this president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bullshit it makes it perfectly clear that Obama is kicking this vital issue down the road.

To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you're fools. Either the US will go into default because of Obama's cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America's fiscal crisis, he represents no hope and no change. Just the same old Washington politics he once promised to end.

(Photo: US President Barack Obama talks to 8th grade students in the school cafateria after a tour of a science class during a visit to Parkville Middle School and Center of Technology on Feburary 14, 2011 in Baltimore, Maryland. By Tim Sloan/AFP/Getty.)

[Soul Crusher]

Interior Department to revisit Bush-era oil shale plans

Posted on February 15, 2011 at 3:55 pm by Jennifer Dlouhy in E&P, Interior Department, Politics and Policy, regulation

http://fuelfix.com/blog/2011/02/15/interior-department-to-revisit-bush-era-oil-shale-plans

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Interior plans new wilderness protections, scrapping Bush-era policy.Interior plans new wilderness protections, scrapping Bush-era policy.Interior plans new wilderness protections, scrapping Bush-era policy.Interior Department launches royalty rate review.Fed official says oil shale not ready..In response to a legal challenge by conservation groups, the Obama administration today launched a process to reconsider — and probably rewrite — a Bush-era plan for developing oil shale in the West.

At issue are decisions by former President George W. Bush’s Interior Department to open roughly 2 million acres of land in Colorado, Utah and Wyoming to commercial oil shale leasing, while also approving regulations setting royalty rates for eventual production that critics blasted as too low.

Under a court settlement filed today, more than a dozen groups, including the National Wildlife Federation and the Natural Resources Defense Council, will abandon their legal challenge to the Bush-era plans while the Obama administration reviews and revises those oil shale leasing policies.

“The Bureau of Land Management is taking a fresh look at commercial oil shale rules and plans that were issued in 2008,” BLM Director Bob Abbey told reporters on a conference call. After input from the public, those November 2008 policies may be revised “to take account for expected water demands . . . and make sure they provide a fair return to taxpayers.”

Under the Bush-era regulations, companies that successfully produced oil-like substances from shale rock initially would be forced to pay royalty rates of 5 percent to the federal government — far lower than the 12.5 percent charged for conventional oil and gas production on federal lands.

Interior Secretary Ken Salazar said the move didn’t mean the administration was turning its back on the potential for energy companies to extract the crude-like substance known as kerogen from sedimentary shale rock found primarily on federal land in Colorado, Utah and Wyoming.

“We in the West have been trying to unlock oil shale for the past century because it is so abundant,” Salazar said. “Oil shale is an important resource for the United States, and it is my view that we need to move forward and explore the possibility of developing oil shale.”

But, he stressed, it was important to proceed cautiously and ensure that the potentially high water demands of evolving techniques for extracting the petroleum-like liquids don’t hurt agriculture and wildlife in the arid West.

“The question of the impact on the water in the Colorado River basin and the agricultural economy is one that looms large,” Salazar said.

Salazar added that the 2008 policies effectively put the cart before the horse by paving the way for vast oil shale development at low royalty rates before fully studying all of the potential repercussions.

Abbey noted that commercial oil shale development is years down the road, providing a window of time to better study the issue.

“There is much yet to be learned about oil shale development,” Salazar said. “We are interested in learning as quickly as possible.”

The government estimates there are 2 trillion barrels of oil equivalent locked in shale rock, with federal land making up 72 percent of that oil shale acreage.

American Petroleum Institute upstream policy adviser Holly Hopkins said the trade group was encouraged by the administration’s interest in developing oil shale resources.

“Oil shale is an important part of our domestic energy portfolio, and API is committed to environmentally responsible oil shale development,” Hopkins said. “Our companies have made technological advancements in oil shale production and are committed to continued research and development in this area.”

But Rep. Doc Hastings, R-Wash., the head of the House Natural Resources Committee, said the decision to review rules for commercial oil shale development was “redundant” and would “delay the development of at least a trillion barrels of U.S. oil resources and prevent the creation of thousands of new U.S. jobs.”

“The current commercial rules for oil shale leasing were adopted under a rigorous and open public rule making process,” Hastings said in a statement. “There is no need to review the rules unless their intention is to halt progress on the development of our oil shale resources and create more uncertainty for companies interested in investing in new technology.”

This isn’t the first time Salazar has zeroed in on oil shale decisions made by the Bush administration.

In February 2009, Salazar suspended a Bush-era lease solicitation for companies to conduct oil shale research, development and demonstration projects on public lands. Seven months later, Salazar invited energy companies to apply for new research, development and demonstration projects on 160-acre tracts — a fraction of the 5,120 acres that would have been allowed for commercial production under the Bush plan.

Three companies have submitted nominations under that second round of oil shale leasing in October 2009, including two in Colorado from Exxon Mobil and Natural Soda Holdings, Inc., and another in Utah from AuraSource Inc.

Five other oil shale leases in Colorado issued in 2007 are held by Chevron Shale Oil Co., EGL Resources, Inc., and Shell Frontier Oil & Gas. A lease of federal land in Utah, also issued in 2007, is held by the Oil Shale Exploration Co.

Abbey said that BLM’s review of its commercial oil shale regulations and programs should have no effect on those existing research and development leases.

[Soul Crusher]

Healthcare Reform Law Requires New IRS Army Of 1,054
By Paul Bedard
http://www.usnews.com/news/blogs/washington-whispers/2011/02/15/healthcare-reform-law-requires-new-irs-army-of-1054_print.html

Posted: February 15, 2011

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The Internal Revenue Service says it will need an battalion of 1,054 new auditors and staffers and new facilities at a cost to taxpayers of more than $359 million in fiscal 2012 just to watch over the initial implementation of President Obama's healthcare reforms. Among the new corps will be 81 workers assigned to make sure tanning salons pay a new 10 percent excise tax. Their cost: $11.5 million.

[See a slide show of 10 ways the GOP can take down Obamacare.]

"The ACA [Affordable Care Act] will require additional resources to build new IT systems; modify existing tax processing systems; provide taxpayer outreach and assistance services; make enhancements to notices, collections, and case management systems to address and resolve taxpayer issues timely and accurately; and conduct focused examinations to encourage compliance," said the newly released IRS budget.

[See a slide show of 10 things that are, and aren't, in the healthcare law.]

In its request, the IRS explained that the tax changes associated with health reform are huge. "Implementation of the Affordable Care Act of 2010 presents a major challenge to the IRS. ACA represents the largest set of tax law changes in more than 20 years, with more than 40 provisions that amend the tax laws."

Unsaid: The requests are just the beginning, since the new healthcare program is evolving and won't be fully implemented until about 2014.

The detailed IRS budget documents spell out exactly what most of the new workforce will be doing. For example, some 81 will be tasked just to handle the tax reporting of 25,000 tanning salons. They face a new 10 percent excise tax on indoor tanning services. Another 76 will be assigned to make sure businesses engaged in making and imported drugs pay their new fee which is expected to deliver $2.8 billion to the Treasury in 2012 and 2013. The new healthcare corps will also require new facilities and computers.

[See editorial cartoons about the healthcare law.]

The document gives the GOP a bright target to hit if they plan to make good on promises to defund the president's healthcare plan.

Wyoming Sen. John Barrasso, who's become a point man in the budget battle, told Whispers, "The president's irresponsible budget empowers the IRS to begin to audit Americans' healthcare. As the IRS says, Obamacare represents the largest set of tax changes in more than 20 years. Adding hundreds of new jobs and millions of dollars to the IRS isn't going to make care better or more available for anyone. I will continue to fight to repeal and replace Obamacare with patient centered reforms that help the private sector—not the IRS—create more jobs."


The Treasury Department, which oversees the IRS said: "The Affordable Care Act includes important tax credits that help small businesses provide health insurance for their employees and partially cover the cost of health insurance for Americans who do not have access to affordable coverage, and Treasury's Budget includes funding for the IRS to administer these tax provisions. The vast majority of this funding will be used to develop information technology systems and other support to implement the law and help taxpayers claim these important credits."

The IRS document also noted that other tax law changes related to the stimulus require more workers, estimated at about 215 new employees.

[See photos of healthcare reform protests.]

It's not all tough news for taxpayers. The IRS regularly pays for its enforcement team and more when they collect taxes that companies and individuals try to skip out on. According to the budget documents, the IRS plans to get a big return on investment worth about $279 million by fiscal 2014.

•Check out our editorial cartoons on healthcare.
•See a slide show of 10 ways the GOP can take down Obamacare.
•See the 10 best cities in which to look for a job.
Updated on 2/15/11


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Hope & change bitches!   

[Soul Crusher]

Jeffrey on Socialism's Trajectory: Obama's HHS Is Bigger Than LBJ's Government
Wednesday, February 16, 2011
By Terence P. Jeffrey

http://www.cnsnews.com/commentary/article/jeffrey-socialisms-trajectory-obamas-hhs


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Anyone who doubts that the trend toward socialism is pushing America toward ruin should examine the historical tables President Obama published Monday along with his $3.7 trillion budget.

In fiscal 2011, according to these tables, the Department of Health and Human Services will spend $909.7 billion. In fiscal 1965, the entire federal government spent $118.228 billion.

What about inflation? According to the Bureau of Labor Statistics' inflation calculator, $118.228 billion in 1965 dollars equals $822.6 billion in 2010 dollars. In real terms, the $909.7 billion HHS is spending this year is about $87.1 billion more than the entire federal government spent in 1965.

1965 was a key year in the advancement of socialism in the United States.

From 1776 until 1965, Americans generally did not rely on the federal government for health care unless they served in the military or worked in some other capacity for the federal government.

But in 1965, President Lyndon B. Johnson and a Democratic Congress enacted two massive federal entitlement programs -- Medicare and Medicaid -- that fundamentally altered the relationship between Americans and the federal government by making tens of millions dependent on the government for health care.

Prior to 1937, the Supreme Court correctly understood the Constitution to deny the federal government any power to create and operate social-welfare programs. The Constitution held no such enumerated power, and the 10th Amendment left powers not enumerated to the states and the people.

From George Washington's administration to Franklin Roosevelt's, Americans took care of themselves and their own communities without resorting to federal handouts.

FDR sought to change what he believed was an unrealistic reliance on families in American life.

He used the crisis of the Great Depression to pass the Social Security Act of 1935, compelling Americans to pay a payroll tax in return for the promise of a federal old-age pension. This was blatantly unconstitutional. That same year, in Railroad Retirement Board v. Alton, the Supreme Court had justly slapped down a law mandating what amounted to a Social Security program for the railroad industry alone.

FDR attempted to defend the railroad pension law as a legitimate regulation of interstate commerce, justifiable under the Commerce Clause -- the same argument the Obama administration has used to defend the individual mandate in Obamacare.

The Court scoffed, suggesting that if the federal government could mandate a federal pension for railroad workers, the next thing it would do would be to mandate health care.

"The question at once presents itself whether the fostering of a contented mind on the part of an employee by legislation of this type is, in any just sense, a regulation of interstate transportation," the Court said answering FDR's argument. "If that question be answered in the affirmative, obviously there is no limit to the field of so-called regulation. The catalogue of means and actions which might be imposed upon an employer in any business, tending to the satisfaction and comfort of his employees, seems endless. Provision for free medical attention and nursing, for clothing, for food, for housing, for the education of children, and a hundred other matters, might with equal propriety be proposed as tending to relieve the employee of mental strain and worry."

When Social Security went to the Court in 1937, FDR used a different strategy. He argued that Article 1, Section 8, Clause 1 of the Constitution, which gave Congress the power to levy taxes to "provide for the common Defence and general Welfare of the United States," meant the federal government could do virtually anything it deemed in the "general welfare" of Americans even if it was otherwise outside the scope of the Constitution's other enumerated powers.

FDR's interpretation of the General Welfare Clause effectively rendered the rest of the Constitution meaningless.

To persuade the same court that ruled against him in the railroad case to rule for him in the Social Security case, FDR proposed the Judicial Reorganization Act. This would allow him to pack the court by appointing an additional justice for each sitting justice who had reached age 70 and six months and not retired.

Faced with a potential Democratic takeover of the court, and thus a federal government controlled entirely by FDR's allies, Republican Chief Justice Charles Evans Hughes and Associate Justice Owen J. Roberts flip-flopped from their position in the railroad case. They quietly voted in favor of Social Security and took the steam off FDR's court-packing plan.

That year, federal spending was 8.6 percent of gross domestic product, according to President Obama's historical tables.

When LBJ enacted Medicare and Medicaid -- and began fulfilling the court's prophecy in the 1935 railroad-pension case -- federal spending was 17.2 percent of GDP.

When George W. Bush expanded Medicare with a prescription drug benefit in 2003, federal spending was 19.7 percent of GDP. This year, federal spending will be 25.3 percent of GDP.

In 2014, when Obamacare is scheduled to be fully implemented, HHS will become the first $1-trillion-per year federal agency. That year, Medicare and Medicaid will cost $557 billion and $352.1 billion respectively, or a combined $909.1 billion -- about what all of HHS costs this year.

In other words, when Obamacare is just getting started, Medicare and Medicaid will cost more than the $822.6 billion in 2010 dollars than the entire federal government cost in 1965 when LBJ signed Medicare and Medicaid into law.

[Soul Crusher]

Is the Wealth Gap Widening Under Obama, Bernanke?
Published: Tuesday, 15 Feb 2011 | 3:36 PM ET Text Size By: John Melloy
Executive Producer, Fast Money

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President Obama said at his inauguration two years ago that, “a nation cannot prosper long when it favors only the prosperous.” Ironically, the President’s own actions, along with those of Federal Reserve Chairman Ben Bernanke, are testing that theory.


Consumer sentiment among families with income above $75,000 jumped to 88.2 in early February, the highest since under President Bush in 2007, according to the Reuters/University of Michigan’s latest survey.

But sentiment among lower-income households dropped to 67.7 from 72.1 in January, trapped in a range it’s been stuck in since just after Obama's 2009 inauguration.

The president helped widen this gap by compromising on the Bush tax cuts with the Republicans in Congress, agreeing at the end of last year to extend them on all incomes for two years, investors said.

Meanwhile, Fed Chairman Ben Bernanke has set upon a large quantitative easing program that has boosted the stock market by increasing liquidity, but also raised the costs of basic goods that hit the poor the very hardest.

“Low-income families are not likely to be benefiting from the rally in stocks,” said Ed Yardeni, president and chief investment strategist of Yardeni Research. “They probably remain more vulnerable to long-term unemployment and wage cuts. To add insult to injury, Mr. Bernanke’s focus on core inflation is irrelevant to most of them. Rising food and fuel costs matter to them.”

The Fed, with interest rates already at zero, is in the middle of a $600 billion Treasury buying program to fight off deflation and encourage investment.

But as prices for corn [CCV1  684.75    -5.75  (-0.83%)], wheat [WCV1  832.25    -8.00  (-0.95%)] and rice have surged, the Fed chairman has drawn the ire of many, including other countries’ central bankers, for sparking out-of-control inflation. This is the second such buying program Bernanke has done since the financial crisis.

 

“Maybe the most unintended consequence of ‘QE2’ is the great wealth disparity it is creating,” said Steve Cortes of Veracruz Research and a ‘Fast Money’ trader. “We are literally doing it on the backs of the poorest people in this country and the world.”

You can see the effects of this wealth gap unfold in the struggles of Walmart [WMT  54.79    -0.16  (-0.29%)   ], which is trying to upgrade its image to appeal to higher income shoppers as the economy recovers, but also not lose what it identifies as its core customer (those making between $40,000 and $70,000 a year). Now its stuck right in the middle of this wealth gap.

Pro Traders: 4 Stock Inflation Mini-Basket
Jon Najarian: Unusual Options Activity In This Stock
Walmart is “seeing fewer trips from these core customers who seem to prefer the convenience of dollar and drug stores over supercenters, even choosing to continue shopping those channels during Walmart’s Summer of deep discount last year,” said JPMorgan’s Charles Grom, who downgraded the stock Monday. “Also, an overall gradual improvement in the macro backdrop lends itself to trade-up risk.”

To be fair, while President Obama reappointed Bernanke in 2009, the Fed Chairman is supposed to operate independently. Plus, Obama has pledged to keep the Bush tax cut extensions at just 2 years.

It’s been said that presidents generally want interest rates kept low to keep the economy going, at least through the next election. See George H.W. Bush’s reported criticism of former Fed Chairman Alan Greenspan for not cutting rates fast enough in the early ‘90s and costing him the election. In this case, we may have a president that pressures the Fed chairman to raise interest rates.

 

For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.


http://www.cnbc.com/id/41605145

[Soul Crusher]

How Inflation Could Be 66% Higher Than the Fed Reports
Daily Finance ^ | 2/16/2011 | DAN BURROWS




Global food prices are at an all-time high, U.S. gasoline prices are at the costliest level ever for this time of the year and yet inflation, in the words of Federal Reserve Chairman Ben Bernanke, remains "quite low."

By official reckoning, that's certainly the case. On Thursday we'll get the latest monthly inflation figures in the form of the consumer price index, which, to the Fed chief's chagrin, is running too close to disinflationary levels. Economists, on average, expect January prices to increase at just a 0.3% rate. So-called core inflation, which excludes volatile food and energy prices, is forecast to rise just 0.1%.

As Bernanke testified before Congress last week, economists exclude food and energy prices because that core inflation rate "can be a better predictor of where overall inflation is headed." By that measure, inflation was only 0.7% in 2010, compared with around 2.5% in 2007, the year before the recession began, the Fed chief explained.

Too bad those numbers don't jibe with with most folks' experience at the gas pump or checkout counter. As economist Ed Yardeni, president of Yardeni Research, told clients Tuesday: "I share the growing concern among the Fed's critics that the official measures of consumer price inflation may be understating actual inflation and that excluding food and energy from these measures is OK as long as you don't eat or drive."




(Excerpt) Read more at dailyfinance.com ...

[Soul Crusher]

White House Ignores Interest Payments in Claiming to Control Debt
By Judson Berger
Published February 16, 2011 | FoxNews.com



The Obama administration's statement that the government will not be adding to the debt by the middle of the decade clashes hard against the facts, Republicans say, leaving officials straining to justify the budget claim they've pushed repeatedly over the past few days.

As it turns out, the administration is not counting interest payments. That means the budget team plans to have enough money to pay for ordinary spending programs by the middle of the decade. But it won't have the money to pay off those pesky -- rather, gargantuan -- interest payments. So it will have to borrow some more, in turn increasing the debt and increasing the size of future interest payments year after year.

So how then, visibly agitated Republicans asked, can the administration claim that its 2012 spending plan sets the country on a course to "pay for what we spend" in just a few years?

"We're still going further into debt, massively," Sen. John Ensign, R-Nev., told White House Budget Director Jack Lew at a budget hearing Tuesday, accusing the administration of "double-talk."

Anyone who gives the budget chart a cursory glance can see the debt will continue to skyrocket under the White House proposal. In fact, the long-term outlook shows the public debt -- which isn't even the entire debt -- soaring from about $11 trillion this year to nearly $19 trillion in 2021. Driving that increase is the fact that annual deficits will never fall below $600 billion.

To justify the administration claim, Lew said the administration was merely referring to "primary balance" -- or federal spending minus interest payments. Lew sought to forgive the public for their confusion.

"The terminology that we use in Washington of primary balance is a little confusing," Lew said.

"It's because I believe it's dishonest," Ensign shot back.

Republicans were understandably befuddled. To put the scenario in everyday terms, it's like a family claiming that they've balanced the family finances, but neglecting to mention that they're taking out a new loan every month to pay off credit-card interest. As a result, the family keeps going deeper into debt.

For an $80 interest payment, that might be manageable. But this is the United States budget. If the government does what the Obama administration is recommending, net interest payments will go from about $200 billion this year to $844 billion in a decade. That's more than the country spends now on Social Security.

White House Press Secretary Jay Carney, at his first official press briefing on the job, used the credit card analogy Wednesday and acknowledged interest rates "have to be contended with."

"But the first important step in dealing with this issue is getting your regular spending and income in balance so that you're no longer adding to the problem," he said. "And interest payments are a major portion of our long term debt problem that we need to address. But it is not an inconsequential deal."

Yet President Obama and Lew neglected to explain this point in their initial statements. Lew, in an interview Sunday on CNN's "State of the Union," said: "Our budget will get us, over the next several years, to the point where we can look the American people in the eye and say we're not adding to the debt anymore. We're spending money that we have each year, and then we can work on bringing down our national debt."

Obama, discussing his budget in Baltimore Monday, said the proposal "puts us on a path to pay for what we spend by the middle of the decade."

In his press conference the next day, Obama went further.

"What my budget does is to put forward some tough choices, some significant spending cuts, so that by the middle of this decade our annual spending will match our annual revenues. We will not be adding more to the national debt," he said.

Pressed to explain this claim, the president hinted at the rationale.

"We've racked up a whole bunch of debt. And there's a lot of interest on that debt," he said. "So in the same way that if you've got a credit card and you've got a big balance, you may not be adding to principal. You've still got all that interest that you've got to pay. Well, we've got a big problem in terms of accumulated interest that we're paying and that's why we're going to have to whittle down further the debt that's already been accumulated."

Under questioning from Senate Republicans Tuesday, Lew acknowledged the government would be adding to the debt by borrowing to pay interest, but still stood by his statements.

"We're getting further in debt ... because of our interest rate," Ensign said.

"Yeah," Lew responded.

Sen. Jeff Sessions, R-Ala., ranking Republican on the Senate Budget Committee, grilled Lew over this disconnect.

"We are adding to the balance, and we're not cutting up the credit card. That's just the fact," Sessions said, calling the administration's claims "misleading."

Lew stood by his claim. "What I said was we're going to stop adding to the debt. Our spending will not add to the debt," he said. "It's an accurate statement."

Sessions disagreed, calling the assessment "not a legitimate way to analyze it."

The website PolitiFact, which tries to sort out politicians' policy claims, analyzed the administration's argument in an article Tuesday and gave it a rating of "false."

The White House later claimed that the debt would not increase as a share of the economy -- that's technically true, given that the public debt would level out at about 76 percent of GDP by mid-decade. But that assumes a certain level of growth in the economy and also assumes the debt, as a figure, will continue to rise year after year. PolitiFact ruled that its "false" rating would remain unchanged, given that Obama did not make that distinction in his press conference.

 Print     Close URL

http://www.foxnews.com/politics/2011/02/16/white-house-stretches-truth-national-debt-claim

[Soul Crusher]

February 15, 2011, 6:22 PM ET.
White House Economists Won’t Testify on Stimulus.

http://blogs.wsj.com/washwire/2011/02/15/white-house-economists-wont-testify-on-stimulus/tab/print

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The Obama White House won’t be sending a witness to defend the economic-stimulus package before a House Oversight Committee panel Wednesday.

The committee is holding a hearing on the impact of the stimulus package, which President Barack Obama signed almost two years ago. Testimony will come from a lineup of conservative economists, plus Josh Bivens of the left-leaning Economic Policy Institute, who was picked by committee Democrats.

Rep. Jim Jordan (R., Ohio), who is running the hearing, had asked Jared Bernstein and Christina Romer, who played major roles in preparing the package to testify or suggest another witness to represent the White House. Both declined.

Officials volunteered to send witnesses from the Transportation and Commerce departments but the offers were turned down.

Ms. Romer, formerly the head of the White House Council of Economic Advisers, returned to her teaching job at the University of California, Berkeley, last year. Mr. Bernstein remains the chief economic adviser to Vice President Joe Biden.

Republicans say that they plan to use the hearing to examine the effects of the stimulus plan on the economy “and how its results compare to projections made by administration officials.” GOP staff said that they didn’t think that witnesses from individual federal departments would be able to answer these questions.

The plan, which has a current estimated price tag of $814 billion, is considered by Democrats to be one of their signature achievements during Barack Obama’s first two years in office. Mr. Bernstein and Ms. Romer have credited it with preserving up to 3.7 million jobs, compared with what would have happened otherwise.

But Republicans have questioned how the White House reached those figures, and have argued that the stubbornly high unemployment rate shows that the plan was a costly failure.

Public perceptions of the package have been dismal and during the November midterm elections, many GOP candidates ran on a platform of criticizing the stimulus effort, while Democrats barely mentioned it.

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

[Soul Crusher]

Empty seats: Obama snubs Issa on witnesses for stimulus hearing
The Daily Caller ^ | 2/16/11 | Jonathan Strong


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In the latest sign of an increasingly antagonistic stand by Democrats against top GOP oversight official Rep. Darrell Issa, President Obama declined a request for a top economic adviser to testify before an oversight panel about the president’s economic stimulus law. Obama spokesman Reid Cherlin indicated the move will be part of a general policy against top White House aides testifying before Congress, potentially setting the stage for a showdown on later, more important hearings.


(Excerpt) Read more at dailycaller.com ...

[Soul Crusher]

PRIEBUS: Happy stimulus day
How’s that working out for you?
By Reince Priebus
The Washington Times
6:06 p.m., Wednesday, February 16, 2011

http://www.washingtontimes.com/news/2011/feb/16/happy-stimulus-day/print
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Bloomberg News With Vice President Joseph R. Biden Jr. looking on, President Obama tells an Eisenhower Executive Office Building audience Wednesday that the economic-stimulus legislation he signed a year ago helped avert an economic catastrophe.PrintEmailVi ew

Two years ago today, President Obama signed into law a "stimulus package" that his administration promised would keep unemployment under 8 percent. What has been the result of nearly $1 trillion spent on the so-called "stimulus?" Twenty-one months of unemployment at or above 9 percent, 2.6 million jobs lost, unsustainable budget deficits and an ever-growing national debt.

Americans rejected the Democrats' reckless tax and spend policies last November. Despite this "shellacking," Mr. Obama's proposed budget ignores the will of the American people and reflects a complete lack of seriousness for our fiscal crisis.

In my capacity as the new chairman of the Republican National Committee, it is my job to help hold President Obama accountable for his lack of leadership.

Looking at the president's fiscal 2012 budget, my job may have just gotten a little easier. As the reviews come in, it's clear the president didn't live up to his own standards.

Under the president's spending plan, 2012 will be the fourth consecutive year of running deficits in excess of $1 trillion. As a result of Mr. Obama's spending spree, the federal debt will soon be equal to the entire U.S. economy.

Instead of showing the leadership this country wants and deserves, the president continues to punt on real fiscal responsibility, making none of the tough decisions to cut spending - at no point in his budget would we spend less than we are taking in, raising taxes by $1.6 trillion and adding $13 trillion in new debt.

We've seen this movie before. Spending $814 billion on the stimulus and $2.5 trillion on government-run health care, America tried the Democrats' model of spending hand-over-fist to jump-start the economy - to no avail.

Last week, the Congressional Budget Office director confirmed that the president's massive health care spending law will eliminate 800,000 jobs from our economy. In fact, the only jobs that appear to be created by the president's budget are located at the Internal Revenue Service with 5,000 new agents prepared to enforce the president's tax hikes.

It is this lack of leadership that encouraged voters to give Republicans a seat at the table as we work to get our country's fiscal house in order.

The status quo is simply unsustainable. As Federal Reserve Chairman Ben S. Bernanke put it, limiting the expansion of government is critical to growing our economy. Getting our deficit in check will instill much-needed confidence for job creators our country depends on to jump-start our economy.

The American people are demanding a change in course. To achieve economic prosperity for future generations, they know that the government must start living within its means - just like millions of families across the country do every day.

We've run out of time for warnings; the time to act is now. We have to unite behind leaders who will tax less, spend less and borrow less to get our economy back on track.

As House Speaker John A. Boehner said this weekend, we are broke. It is time for the Democrats to understand that Washington has an addiction to spending. And like all addictions, it will not be cured without dramatic action.

With all due respect, Mr. President, our fiscal situation doesn't need a scalpel - we need a machete.

Already, House Republicans have set a new tone in Washington by committing to $100 billion in spending cuts - the largest cut in congressional history. Returning spending to pre-stimulus levels for the rest of the current fiscal year is the first step of many to restore fiscal sanity.

And while the president punts on entitlement reform, we are ready to stand with Americans who are serious about tackling real fiscal reform.

We are truly in a fight for freedom in this country, and I am proud of our Republican leaders for stepping up to the plate. Now it is my job to help elect more principled Republicans to join the conversation and help make our country as prosperous as we can be.

Barack Obama sought the presidency seemingly to make the difficult choices and put our nation on solid footing. If he continues to avoid making the tough decisions and instead insists on an agenda of more spending, higher taxes and more debt, the choice facing voters in 2012 won't be very difficult.

[Soul Crusher]

Obama's Budget Increases 2012 Deficit by a Third
Townhall.com ^ | February 17, 2011 | Jackie Gingrich Cushman

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Obama's budget increases 2012 deficit by a third. Yes, that's correct. President Obama submitted his proposed 2012 budget this past Monday. This budget produces a $1.1 trillion deficit for 2012. This deficit is 33 percent higher than his 2011 budget projection, which targeted the 2012 deficit at $828 billion. This higher 2012 deficit is equivalent to $3,217 per person in the United States (based on the U.S. Census Bureau's population clock).

This year's forecast of the 2011 deficit is $1.6 trillion, 30 percent higher than Obama's 2011-budgeted deficit of $1.3 trillion.

Let's step back and take another look at what has happened: The government spent $265 billion less in 2010 than had been forecast for 2010 at the time of the 2011 budget.

The receipts (read, taxes on companies and individuals, i.e., their expenses) for 2010 were about on target, actual $2,163 billion versus a forecast of $2,165 billion. This change in spending produced a 2011 deficit $378 billion, or 30 percent higher than originally budgeted.

The one thing we can determine so far is that the administration does not have a stellar record for budgeting. Before beginning my writing career, I worked in corporate finance. In my last few years in corporate planning, I was in charge of budgeting and planning for companies worth $3 billion. My background includes an MBA in finance, and I am a holder of the Chartered Financial Analyst designation. This lets you know that I know how to scrutinize the details of budgets and sub schedules to see if the logic and the math hold up.

During the 2011 budget process, revenues (taxes on individuals and corporations) were originally forecast to rise $402 billion (19 percent) from 2010 to 2011, but are now forecast to rise by just $11 billion. Outlays (government expenses) were projected to rise by $113 billion, or 3 percent. In the 2012 budget submission, the 2011 outlays increased by $363 billion, or 11 percent.

So, while we spent less in 2010 than had been forecast in 2010, we are still planning on spending more in 2011.

Hmm. The first rule in budgeting is to make sure your year-end forecast reflects what is going to happen, because that is how the next year is compared.

Clearly, in the last year's round of forecasting year-end results, the outlays were overstated. Maybe there should be a bit of scrubbing on the 2011 year-end government-spending forecast. Outlays (government sending) decreased by $62 billion in 2010; the 2011 year-end forecast is for an increase of $363 billion.

This clever bit of forecasting allows the administration to claim a decrease in government spending in 2012 (granted that it's only $90 billion, or 2 percent, less than the 2011 forecast).

However, when you compare 2010 to 2012, there is a $273 billion increase in government spending. So, while Obama might talk about a decline in government spending in 2012, it's only because his 2011 forecast includes a government spending increase of $363 billion, or 11 percent.

In this year's budget submission, revenues are forecast to rise $453 billion, or 21 percent, in 2012. Much of the forecast is based on a 65 percent increase in corporate taxes. This is a substantial increase in taxes.

In selling his budget this week, Obama mentioned a letter he had recently received "from a woman named Brenda Breece. ... She's looking, as we speak, for a second job to help put Rachel (her daughter) through college and ensure, as she told me, that 'the money is there to help Rachel with her future.'"

Obama continued with, "What's true for Brenda's family is true for the larger American family. ... We're going to have to get serious about cutting back on those things that would be nice to have but we can do without."

The difference is that Brenda Breece is willing to take on a second job to secure her daughter's future, and Obama's budget never lives within our means. Every year in his budget there is a deficit, with the lowest deficit at $607 billion in 2015.

Obama's budget does not live up to his rhetoric -- we never live within our means, and he only reaches his target of cutting the deficit in half by first increasing it by 27 percent. His pitch is for us to live with a high deficit in 2012 (he labels it an investment) so that the out-years (2013 -- 2021) will get better.

We need to quit listening to the sales pitch and focus on this year and next because, in budgeting, the out-years never come.

[Soul Crusher]

Geither:   "Our budget is unsustainable"


Ha ha ha ha - HOPE & CHANGE! ! ! ! !  ! ! !