Friday, June 15, 2012

Breaking up is hard to do

I find it both amusing and interesting that the accepted premise is that Greece will pull out of the euro first.  Frankly, I can't imagine they'll be the ones to bail on the only real source of financing they currently have.  No, I expect they'll do the honorable Greek (okay, Spartan) thing and leave on their shields.  In other words, only once they realize there will be no more bail outs coming their way.  Then again, maybe it will be with a German boot up their ass.

There is an article in the online BBC News Magazine titled 'Five ways the eurozone could break up.'  Apparently, a Lord Wolfson says "..there is a serious need for a solution to any euro break-up" and is offering a monetary prize to the economist who comes up with the best plan (is that an oxymoron?).  Personally, I'm going with the current number three: All return to national currencies.

Of course, this brings us back to the question of who will leave the eurozone first.  My best guess?  Germany.  I mean, really, who wants to pay for their neighbor's debts forever.  More importantly, how on earth could Chancellor Merkel justify it to her constituencies?

"Yes, my people, we are now supporting Frenchmen who are retiring two years earlier - at 60.  You, however, shall work until 78, or until you drop.  It is your duty to both your country and the rest of the eurozone!"

Riiiight.  I can see that going over really well, kind of like asking Texas to support the land of fruits and nuts as they go bust.

The alternative is even more amusing: Germany negotiating its way to the top.  In other words, conquering Europe economically.  Somehow, I just can't see the other eurozone members acquiescing.

Sunday, October 23, 2011

Looking for America

Years ago I had the opportunity to spend the day in New York City. I was young and, to be blunt, had absolutely no desire to waste my time gawking at a bunch of high-rise buildings. (The group I was with wasn't exactly planning on visiting the Museum of Natural History.) Still don't. (Though I am interested in seeing the aforementioned museum.)

Earlier this month I had the opportunity to spend a couple days sightseeing in our nation's capitol and didn't. When asked (with a certain amount of incredulity) why, I came up with the lame excuse of traffic (which was awful but not insurmountable). The truth is, I had no desire to be part of the spectacle.

Yes, I would thoroughly enjoy standing in front of the Lincoln Memorial reflecting on the magnitude of that man's life on mine and then strolling down the mall towards the Washington Monument. I can imagine my awe at standing before the actual documents that are the foundation of our great nation (the blood, sweat and lives that went into them are, on the other hand, unimaginable).

To me these are actions that require time and solitude. I have no interest in being rushed or crowded. My image of the perfect way to see these sights is devoid of other people.

Yet, it is We The People who make all these sights worth seeing. America is nothing without her people.

I drove almost 1900 miles to get to where I was near Washington - not to sightsee, but to work. Still, the trip itself was a reminder (just in case I had forgotten) of who Americans are and what America is because of them.

No, I have no intention of boring you with my perceptions and opinions on the matter. In truth, they are irrelevant. What I do want to impress upon you, however, is that you need to look - actually see - the people around you. Each individual is a part of what we call America. Together, We are The People.

Bother yourself to learn the name of your waiter or waitress, if only for the few minutes you are seated in their section. Smile at everyone - not just with your mouth, but with your eyes and tone of voice. Use the magic words 'please' and 'thank you'.

Remember a couple little details about each person whose life intersects your own on a daily basis. They will remember you.

John, the cashier at the grocery store, is a veteran who wears vet related pins on his apron. Have you ever asked him about them?

Participate in the lives around you. Find your America.

Sunday, August 21, 2011

Proof that limiting collective-bargaining rights for workers’ unions IS the right approach.'s editors seem to think that the recent "give backs" by unions in Conneticut and New York prove that Wisconsin and Ohio were wrong to take the steps that they took. I believe they have it exactly backwards.

Bloomberg's Editors say "On the part of organized labor, the deals showed a welcome recognition of the depth of voter concern over budgets and, perhaps, a new appreciation that it is going to take shared sacrifice to get the U.S. out of this economic mess." The truth is, that perspective is nothing but spin.

The only reason organized labor gave an inch is because of the "wins" in Wisconsin and Ohio. Yes, it is a "welcome recognition of the depth of voter concern over budgets" but the "new appreciation" is that voters are paying attention to exactly what their elected representatives are doing at the barganing table. The results of the negotiations in Conneticut and New York would never have been what they were had Wisconsin and Ohio gone the other way.

In the long run, Wisconsin and Ohio will be better off for having done away with collective bargaining. On the other hand, you can bet your bottom dollar that the moment the unions and their 'bought' government representatives who sit across from them at the bargaining table believe the electorate is no longer paying attention they will reinstate whatever the unions "gave up."

Mobile Blogging

The whole point of this blog was/is to speak out and I have to admit I have been less than voluble. I could blame it on the fact that I don't carry my laptop around with me, but...

So now I'm trying mobile blogging. Ugh! I touch type and the keyboard on my new (relatively speaking) iPhone 3GS just isn't set up for that. Nonetheless... Will be using this post to test various apps so don't be surprised if it looks weird!

Using BlogSpace app. Hmmm... Tried saving to my GS but that didn't work; good thing I also saved a draft online!
  • doesn't save to my GS reliably

  • can't see any of my drafts

Wednesday, June 29, 2011

Cut, Cap and Balance

The Pledge
I pledge to urge my Senators and Member of the House of Representatives to oppose any debt limit increase unless all three of the following conditions have been met:
  1. Cut - Substantial cuts in spending that will reduce the deficit next year and thereafter.
  2. Cap - Enforceable spending caps that will put federal spending on a path to a balanced budget.
  3. Balance - Congressional passage of a Balanced Budget Amendment to the U.S. Constitution -- but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.
Well, it sounds good.

Unfortunately, it is not an acceptable basis for negotiating the raising of the debt ceiling.  I mean, just imagine going to Visa or MasterCard and telling them you wanted them to raise your credit limit and that you would "cut, cap and balance" your budget in return.  I'm not sure which would hurt more; the deafening sound of them slamming their phone down or the peals of laughter you heard just before that happened.

How about we eliminate the deficit?  What happened to zero-based budgeting?  No, I do not mean zero-sum budgeting.  Zero-sum is how we-the-people deal with an increase in our expenses when we don't have a commensurate increase in our income.  I'm talking about zero-based budgeting for every aspect of government.  I'm talking about our elected representatives actually doing some work and making the hard choices on a regular basis.  No more 'budget' votes that only reference the amount of the increase.  No more calling an increase less than projected a budget 'cut'.

Tuesday, June 28, 2011

The Deficit Is Worse Than We Think

Once again I must credit the following to someone much smarter than myself. Therefore, I would like to acknowledge the author, Lawrence Lindsey, and The Wall Street Journal where the column was originally published. All I did was cut and paste.

The Deficit Is Worse Than We Think

Normal interest rates would raise debt-service costs by $4.9 trillion over 10 years, dwarfing the savings from any currently contemplated budget deal.

Washington is struggling to make a deal that will couple an increase in the debt ceiling with a long-term reduction in spending. There is no reason for the players to make their task seem even more Herculean than it already is. But we should be prepared for upward revisions in official deficit projections in the years ahead—even if a deal is struck. There are at least three major reasons for concern.

First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.

The 10-year rise in interest expense would be $4.9 trillion higher under "normalized" rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.

To some extent this is a controllable risk. The Federal Reserve could act aggressively by purchasing even more bonds, or targeting rates further out on the yield curve, to slow any rise in the cost of Treasury borrowing. Of course, this carries its own set of risks, not the least among them an adverse reaction by our lenders. Suffice it to say, though, that given all that is at stake, Fed interest-rate policy will increasingly have to factor in the effects of any rate hike on the fiscal position of the Treasury.

The second reason for concern is that official growth forecasts are much higher than what the academic consensus believes we should expect after a financial crisis. That consensus holds that economies tend to return to trend growth of about 2.5%, without ever recapturing what was lost in the downturn.

But the president's budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president's forecast by a cumulative 5.2 percentage points and—using the numbers provided in his budget—incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan's budget, passed by the House in April, or in the Bowles-Simpson budget plan.

Third, it is increasingly clear that the long-run cost estimates of ObamaCare were well short of the mark because of the incentive that employers will have under that plan to end private coverage and put employees on the public system. Health and Human Services Secretary Kathleen Sebelius has already issued 1,400 waivers from the act's regulations for employers as large as McDonald's to stop them from dumping their employees' coverage.

But a recent McKinsey survey, for example, found that 30% of employers with plans will likely take advantage of the system, with half of the more knowledgeable ones planning to do so. If this survey proves correct, the extra bill for taxpayers would be roughly $74 billion in 2014 rising to $85 billion in 2019, thanks to the subsidies provided to individuals and families purchasing coverage in the government's insurance exchanges.

Underestimating the long-term budget situation is an old game in Washington. But never have the numbers been this large.

There is no way to raise taxes enough to cover these problems. The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years.

Only serious long-term spending reduction in the entitlement area can begin to address the nation's deficit and debt problems. It should no longer be credible for our elected officials to hide the need for entitlement reforms behind rosy economic and budgetary assumptions. And while we should all hope for a deal that cuts spending and raises the debt ceiling to avoid a possible default, bondholders should be under no illusions.

Under current government policies and economic projections, they should be far more concerned about a return of their principal in 10 years than about any short-term delay in a coupon payment in August.

Mr. Lindsey, a former Federal Reserve governor and assistant to President George W. Bush for economic policy, is president and CEO of the Lindsey Group.

Monday, June 27, 2011

No more Mr. Nice Guy...

".. this is war!"  (Mark Levin on his radio broadcast, Monday, June 27, 2001)

Mark is right.  To hell with all the 'play nice' rhetoric.  We - the conservative voters - need to pull the stops out and crush the opposition.  That pretty much covers the definition of war.

There are enough conservative Representatives in the House to keep the debt ceiling where it is.  It is time to play hardball - no compromises.  I live on a specific amount of income with which I am 'forced' to pay off my debts (mortgage, credit cards, car payment) first .. even before I get to go shopping for groceries.  It is time for the federal government to learn the meaning of the word budget.

from Econterms:  budget:  A budget is a description of a financial plan. It is a list of estimates of revenues to and expenditures by an agent for a stated period of time. Normally a budget describes a period in the future not the past.

Since we cannot pass a balanced budget amendment in time, the option of 'cutting up the credit card' will have to do.  It is time the government lived within its means.