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Monday, December 15, 2014

650,000 Strawdogs Bark at the Moon. The Obama ‘Recovery’ is an Hallucination

Previously published  10.30.2009 Most links here are broken. 



 In a previous blog, just a few hours ago, I summarized the woeful mumblings and hokum that posed as ‘predictions’ from those lackeys who stooge for Obama.[1]

Stimulus Act of Jan 2009
An Act: Making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for the fiscal year ending September 30, 2009, and for other purposes.”[2] [Emphasis is mine in all quotes.]


The Christine Romer Prophecy:

“…, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.”

 Crystal Ball Follies

"None of us had a crystal ball back in December and January. I think almost every private forecaster realized that there were other things going on in the economy. It was worse than we anticipated. " [3]

Biden[4] also acknowledged the discrepancies in a July 5 interview with ABC's George Stephanopoulos.

"The truth is, we and everyone else misread the economy," Biden said. "The figures we worked off of in January were the consensus figures in most of the blue chip indexes out there. ... And so the truth is, there was a misreading of just how bad an economy we inherited. Now, that doesn't — I'm not laying — it's now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in? And we believe it is the right package given the circumstances we're in."

Romer sandbags the Biden follies:

Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009,” Romer said. “By mid-2010, fiscal stimulus will likely be contributing little to growth.”[5] Christine Romer Oct. 22

A few hours ago:

WASHINGTON — About 650,000 jobs have been saved or created under President Barack Obama's economic stimulus plan, the White House said Friday, saying it is on track to reach the president's goal of 3.5 million jobs by the end of next year[6]-- Gov't says stimulus saved or created 650,000 jobs By Matt Apuzzo And Brett J. Blackledge

Now, we learn all about how the administration calculates these 650,000.  We must put forth a few caveats on our beliefs and acceptance of the new ‘proofs’ that are bestowed upon us by Obama and his number doodlers. But, they have an ‘independent’ group to filter out the hooey or so they say:

The Recovery Accountability and Transparency Board is the independent group which oversees the tracking of all of the data in regard to spending from The American Recover and Reinvestment Act, aka the stimulus package. Their mission statement according to Recovery.gov is “To promote accountability by coordinating and conducting oversight of Recovery funds to prevent fraud, waste, and abuse and to foster transparency on Recovery spending by providing the public with accurate, user-friendly information.”[7]-- White House releases data on stimulus jobs; 1 million jobs created or saved

Here is their pitch:

“JOBS CREATED/SAVED AS REPORTED BY RECIPIENTS
640,329 10/30/2009”[8]

Then crap like this:

Z--PROJECT NUMBER 23679, Repair Building 4 Barrac...
This contract action was accomplished using other than competitive procedures because this is an or...
Z--PROJECT NUMBER JCT-08040, Upgrade to Lighting ...
This contract action was accomplished using other than competitive procedures because this is a tas...
R--PROJECT NUMBER P9302, ENERGY MODELING
This contract action was accomplished using other than competitive procedures because there is only...
C--RECOVERY--PROJECT 18660, Tuttle Creek Lake, KS...
RECOVERY--PER FAR 5.7 THIS NOTICE IS PROVIDED FOR INFORMATION PURPOSES ONLY; THEREFORE FAR 5.203 DO...
Y--Recovery Act - Renovate Emergency Department
RECOVERY ACT - THIS NOTICE IS PROVIDED FOR INFORMATION PURPOSES ONLY. The Philadelphia VA Medical ...
FFS Project #: R4GY; TAS::14 1610::TAS; TITLE: ...
No Description Provided
CONSTRUCTION MANAGEMENT OVERSIGHT AND SUPPORT SER...
No Description Found
Remove/Replace Asphalt Shingles at the Visitor Ce...
No Description Provided
Remove and Install Boundary Fence Scotts Bluff N...
No Description Provided
Low Energy Mobile Imaging System
No Description Found
Z--PROJECT NUMBER 39040, Upgrade Known Distance R...
This contract action was accomplished using other than competitive procedures because this is an or...
: The Department of Energy Savannah River Operat...
The purpose of this work activity is to provide support to the DOE-SR with expertise in the areas o...

Where is the count?

Look at this:
Here is what you should know:
Governors, mayors, county executives, private businesses and community organizations across the country submit reports to Recovery.gov so that you can get an unprecedented look at how your taxpayer dollars are being spent creating jobs and boosting the economy through the Recovery Act. These reports are not from the federal government – but from the very people putting Recovery funds to work.”

 “The government has overstated by thousands the number of jobs it has created or saved with federal contracts under the president’s $787 billion recovery program, according to an Associated Press review of data released in the program’s first progress report.”[9]-- http://thegovmonitor.com/world_news/united_states/white-house-reports-ap-misleads-on-recovery-act-job-reporting-13025.html

All lies? Looks like that. Where is the meat??

rycK



[1] Imaginary Numbers in the Starry Skies and the Quest for a Crystal Ball: Our Government Announces Job Creation Success with their Stimulus Program!


[3] Cantor and other Republicans say Obama promised stimulus would keep unemployment rates below 8 percent “Biden also acknowledged the discrepancies in a July 5 interview with ABC's George Stephanopoulos.
"The truth is, we and everyone else misread the economy," Biden said. "The figures we worked off of in January were the consensus figures in most of the blue chip indexes out there. ... And so the truth is, there was a misreading of just how bad an economy we inherited. Now, that doesn't — I'm not laying — it's now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in? And we believe it is the right package given the circumstances we're in."
Biden also acknowledged the discrepancies in a July 5 interview with ABC's George Stephanopoulos.
"The truth is, we and everyone else misread the economy," Biden said. "The figures we worked off of in January were the consensus figures in most of the blue chip indexes out there. ... And so the truth is, there was a misreading of just how bad an economy we inherited. Now, that doesn't — I'm not laying — it's now our responsibility. So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in? And we believe it is the right package given the circumstances we're in."

[4] You got it.  It’s time to be patriotic, Kate.  Time to jump in, time to be part of the deal, time to help America out of the rut, and the way to do that is they’re still gonna pay less taxes than they did under Reagan."—Joe Biden, plagiarist and a person who cheated his way through Law School at Syracuse.  This link has Joe talking away on TV: http://www.youtube.com/watch?v=cX5nlKcTzvU&eurl=http://americansforprosperity.org/index.php?id=6409

Joe Biden is a loathsome character and permanent politico who has several emotional disorders, a person who got a neat home from some sweetheart deal with MBNA officials, a person who cheated his way through Syracuse Law School, a braggart and a blow hard.  “I am smarter than you” Joe Biden mangles history, explodes in a shower of anger and hatred at the mention of his political opposition and grows on the state of Delaware like some form of tumor. Biden’s son also has some kind of cushy job at about a million dollars at some MBNA affiliate or what not.

You got it.  It’s time to be patriotic, Kate.  Time to jump in, time to be part of the deal, time to help America out of the rut, and the way to do that is they’re still gonna pay less taxes than they did under Reagan."—Joe Biden, plagiarist and a person who cheated his way through Law School at Syracuse.  This link has Joe talking away on TV: http://www.youtube.com/watch?v=cX5nlKcTzvU&eurl=http://americansforprosperity.org/index.php?id=6409

Sunday, December 14, 2014

Krugman Calls for More Stimulus. What Else is New?? More Debt and Bigger Government and a Bigger Depression!



Originally written 1.05.2010

Abstract: Paul Krugman gives new meaning and depth to the word tautological as he calls on our inept government to spend more money while ignoring the consequences of inflation and currency debasement. Our currency may collapse as did Iceland. The Fed is about to attempt to claw back some of the stimulus money as our debt dangerously approaches 100% of our G.D.P. and Krugman moans.  As usual, spending is the only known way to restore the economy according to the left and Krugman grinds on this policy over and over and over.

The word tautological[1] would be quite obscure if not for political propaganda machines like the New York Times and some of their sorrier sisters. Their writers[2][3][4][5][6][7][8][9] and staff[10] thrash about in an ideological competition to see if any are noble enough to match the elegant essays of their honored Pulitzer Prize winner Walter Duranty.[11]He bequeathed to them a certain literary mantle of invincibility and indelible fame when the Times published his leftist-authorized political lies and received uncultivated acclaim from the depression-era masses who could now openly celebrate the leadership of Josef Stalin while he happily murdered millions. Duranty taught the NYT how to be pure propagandists rising well above the stature of Eugene Debs as busy workers who must pound upon their rusty anvils and hammer out narrow ideological snippets of propaganda from a narrow agenda and thus turn or twist any news event into some new and pressing validation for bugger government, retreat from wars against Marxist monsters or Islamo-Fascists[12] and prattle on endlessly about the undying splendor of higher taxes. Most pedestrian keyboard plunkers on the Times’ staff cannot give us the inkling they can synthesize even a modicum of the political magic of the Duranty essence because of their manifold ineptitudes and transparent sophistry of their contributions, but they try.  Paul Krugman may be an exception as he has been given a special warrant from the Peace Loving Swedes [dirty gun peddlers and mass murderers in cahoots with their inbred lackeys the Norwegians--now EcoQuislings.] in the form of the phony Nobel Prize[13] to continue to turn the old Marxist crank.

As an exercise, a search upon the op-ed piece today produces a telling set of words that appear and another set that do not appear although they should to address the consequences of some governmental act:

Words and phrases missing from this opinion: tax, responsibility, excessive taxation, inflation, debasement, tax cuts, government blunders, mistakes, corporate hiring, etc.

Words and phrases found in this piece: stimulus, G.D.P., growth, spending, monetary tightening.

We can see from the lists that the point of the current tome is to avoid objectivity or even the appearance of a comprehensive or responsible analysis of the economic picture and to push spending. This piece is stogy advocacy and not related to economics as we might presume.  We find, as always, that the only important factors to be discussed by this near-bankrupt paper are: enlarging government by spending and taxation or by taxation and spending whichever case is the most feasible at the moment.

Some examples of the current truncated logic:

Here’s what’s coming in economic news: The next employment report could show the economy adding jobs for the first time in two years. The next G.D.P. report is likely to show solid growth in late 2009. There will be lots of bullish commentary — and the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.”[14]--That 1937 Feeling By Paul Krugman Op-Ed Columnist Published: January 3, 2010  [Emphasis is mine in all quotes.]

There is no useful information offered here—only the setup for the warning that the stimulus will be retracted and that the Fed will be contracting the money supply probably with higher interest rates. This is a serious threat to the growth of big government and as such is the basis of this article.

But if those calls are heeded, we’ll be repeating the great mistake of 1937, when the Fed and the Roosevelt administration decided that the Great Depression was over, that it was time for the economy to throw away its crutches. Spending was cut back, monetary policy was tightened — and the economy promptly plunged back into the depths.” --That 1937 Feeling By Paul Krugman

I haven’t taken the time to research all the krugmanical whines and blather about other administrations making errors, or the same errors that Krugman is advising [FDR, LBJ, Jimmy Carter, Clintons before Newt Gingrich cut off their money] but one thing is clear: when nations take on massive debt that approaches 100% of our G.D.P. as the Obama admin and Congress are doing then this is apparently not a mistake.  The world historical facts about sovereign defaults and financial crises dating back 800 years show otherwise.[15]We are forced to think in 1937 terms where debt crushed several economies, but in this instance, with the threat of not bloating government at hand, we can selectively pluck out reasons to spend and spend and ignore the increase in the money supply M2 that will surely lead to massive inflation.  Ignoring the fundamentals of economics, as is the Krugman custom, we can just spend and spend and spend our way to prosperity as California[16][17][18] has shown us the way. They are headed for default, period. So are we if we continue to spend like this and even Bernanke, a fellow Neo-Keynesian must think about this.

Continuing right on with the fairy tales:

Which brings us to the still grim fundamentals of the economic situation.

During the good years of the last decade, such as they were, growth was driven by a housing boom and a consumer spending surge. Neither is coming back. There can’t be a new housing boom while the nation is still strewn with vacant houses and apartments left behind by the previous boom, and consumers — who are $11 trillion poorer than they were before the housing bust — are in no position to return to the buy-now-save-never habits of yore.” --That 1937 Feeling By Paul Krugman

Krugman deftly slides past the very fact that this depression was caused by debt[19] and we are in a debt-driven deflationary spiral[20] that might be ending and also might have been temporarily postponed a depression by doubling our money supply by the Fed. We might just be rewarded with the second half of this depression this year or next that was due to the abuse of credit and a mere 3-5 trillion dollars lost from ‘affordable housing.”[21] We have two more bubbles to get around: commercial credit and consumer credit cards. [22]

The point here must be that a recovery must depend solely upon the consumer, which is true in a full employment sense [95% employed], and also upon a restoration of the housing prices to 2007 levels  where, we must presume, the equity credit was generated for such consumer spending. Credit = money. The comment that we are “are $11 trillion poorer” is only partially true because the Fed may well have spent this much already in their rescue attempts. That more than doubles the money supply and has done nothing for the housing market or the jobs market as we are still at 10% official and 17% actual unemployment. Obama’s stooges promised a turnaround and unemployment below 8% if we used their plan:

The Christine Romer Prophecy:

“…, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.”[23][24]--CNSNews.com Monday, July 06, 2009

Only 7 months ago?? The several Obama stimuli have failed to do much and are jokes in the international economic community and include cash for clunkers[25], shovel-ready bridge projects with no shovels and other follies such as green jobs. The obvious and historical solution here is tax cuts for small businesses but that is an obscene topic for the left and way beyond the boundaries of discussions with leftist advocates who pretend at economics theory.

The tautological pitch:

The Obama fiscal stimulus plan is expected to have its peak effect on G.D.P. and jobs around the middle of this year, then start fading out. That’s far too early: why withdraw support in the face of continuing mass unemployment? Congress should have enacted a second round of stimulus months ago, when it became clear that the slump was going to be deeper and longer than originally expected. But nothing was done — and the illusory good numbers we’re about to see will probably head off any further possibility of action.” --That 1937 Feeling By Paul Krugman

Will the Fed realize, before it’s too late, that the job of fighting the slump isn’t finished? Will Congress do the same? If they don’t, 2010 will be a year that began in false economic hope and ended in grief.” --That 1937 Feeling By Paul Krugman

Isn’t this clever! Krugman ignores the Romer Promises and fails to even mention tax relief for small business and fails to advise us on the massive costs of the cancerous health care monster that Congress is working on.

With Krugman it is always tax and spend or, to be novel, spend and then tax.

rycK

Comments to: ryckki@gmail.com




[8] The Old Brown Lady of the New York Times [Old Gray Lady] Mumbles Dootifully about the Criminal Good Time Charlie Rangel
http://rycksrationalizations.blogtownhall.com/2009/10/08/the_old_brown_lady_of_the_new_york_times_[old_gray_lady]_mumbles_dootifully_about_the_criminal_good_time_charlie_rangel.thtml

[11] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death."Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

[12] Islamo-Fascists: The new ally of the liberals?? http://tabletalk.salon.com/webx/.773b56cd/3625?14@877.TvX2akZqf5y@

[14] That 1937 Feeling By Paul Krugman Op-Ed Columnist Published: January 3, 2010 http://www.nytimes.com/2010/01/04/opinion/04krugman.html?em
[15] Read the new book This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff for a discussion about sovereign. It is not amusing.

[25] Imaginary Numbers in the Starry Skies and the Quest for a Crystal Ball: Our Government Announces Job Creation Success with their Stimulus Program!

Monday, September 8, 2014

The Danger of our High Debt



Many think our US debt level is too high and a threat to our future and yet others believe this debt can be managed. The division of opinion appears to be drawn along ideological lines. So, how serious is our debt and is it a threat to our economy and future?

The current national debt as of Sep 5, 2014 is $17.718 trillion dollars. This works out to $55,577 dollars per citizen and $152,009 to the average taxpayer. [numbers come from usdebtclock.org] But who is liable for this debt? Tax liabilities of the Federal sort are bared by taxpayers and most of the debt must be pushed off on the top ½ of our wage earners and so-called ‘rich.’ The rich are famous for avoiding taxes so there is probably no way that this debt will be paid off by them. The middle class will take the hit as usual if history guides us.
Since 2008, we have been told that we can ‘grow out of debt’ with a strong economy and that assumes a GDP growth greater than 3.5% per year. The problem here is that the CBO, this week, downgraded the US GDP growth to a paltry 1.5% of that metric. That is only $252 billion dollars. But, we spend in deficit and the current deficit is $559 [I shorten this to billions from now on unless otherwise specified] and the interest on the debt is $234. With our growth of $252 billion what fraction of this can we tax and use to pay down some debt? Almost nothing. We could barely cover the $232 of debt service if we taxed nearly all of our apparent and questionable growth increase. Clearly, this is not working and we are going broke. The net debt-to-GDP ratio is now 105.5% and Greece went down at 140% and so did Ireland and Cyprus and soon we may see Italy going down too. We are creeping up slowly to debt ratios that will debase our currency or undermine our credit or both. We face catastrophic inflation or defaults or both.

What is going on? Why are we not addressing this problem? Part of the problem is the liberal political notion that we must ‘redistribute the wealth’ and that means taxing or confiscating the wealth of the rich and giving it to the poor. We are told we need to double the minimum wage. Large corporations own trillions in assets. Corporate assets are $19 trillion and that is larger than the debt, but how much of this can we take and still have employment? Note that there is plenty of money to take from the capitalists if we get too deep into debt. But private debt is $16.483—larger than the total national debt—and we should include Social Security [$15.835] and Prescription Drug [$20.989] and Medicare [$81.233] for a total unfunded liability of $118.047. That puts the unit taxpayer liability of $1.02 million dollars per taxpayer! Nobody can fund this debt since our economy would collapse.

It is a tragedy that GDP [gross domestic product]  is calculated as C + I +G where G is government spending, C is consumption and I is investment. As such, we can tag a certain fraction of government spending as a contribution to GDP but we must realize that this is actually debt funded. This is an outrage. Real growth can only be derived from the taxed salaries and fees upon new jobs and new businesses. We have no real growth so the current 1.5% growth rate for GDP is swamped by our massive deficits. It is only more debt and not real. Our Civilian labor force participation rate has fallen from 66% in 2004 to below 63% now. We are employing a lower fraction of our population that we did even a decade ago.

Why the lax nature of the political left liberals on this issue? Is it that they really believe there is some way to grow out of this mess even though the most optimist mathematical calculations show this is impossible? Is it because they think that if the system crashed like something that happened in 2008, or even worse, they can shout: “Capitalism has Failed” and they will win in the ballots, polls or streets?

The debt is now intractable and there is no way to pay it off or even stop or slow down is cancerous progress. We are letting the progressive left undermine our wealth and certainly that of our children and later offspring. If this is a war then the progressive liberals have already won the final battle.