Archive for the ‘budget’ Category

Endless Obama deficits threaten dollar’s power

May 24, 2009

The bad news is that President Barack Obama is keeping his campaign promises to raise taxes on upper-income families, borrow and spend, bail out car firms and take control of healthcare.

The good news is that President Obama is not keeping all his campaign promises. There has been no precipitous withdrawal from Iraq, Guantanamo is likely to remain the home of terrorists for some time, the promised “trans- parency” is not so all-encompassing as to include pictures of the treatment accorded the bad guys we captured, and we have not lurched into protectionism.

By Irwin Stelzer
The Times, London

Recall that during his run for the White House, Obama opposed the trade agreements with South Korea and Colombia, accused the Bush administration of failing to deal with China’s “manipulation” of its currency and threatened to use “the hammer of a potential opt-out” to force Mexico and Canada to renegotiate the North American Free Trade Agreement (Nafta).

Campaigning is one thing; governing is another. “Obama is subject to the same geopolitical imperatives as was President Bush,” said Rod Hunter, who served as Bush’s senior director of the National Security Council and is now a colleague of mine at the Hudson Institute, a Washington think tank. It is one thing to throw raw meat to the trade-union lions during a campaign but quite another to antagonise Canada, which has troops in Afghanistan alongside our own; Mexico, an ally in the war on drugs and potential source of oil; South Korea, important to our efforts to contain its northern neighbour; and other countries.

So we have the new Obama. Nafta stays as it is; Treasury secretary Tim Geithner has retreated from his charge that China manipulates its currency; and the president has announced “a plan of action” to obtain congressional approval for pending free-trade agreements with Panama and South Korea, and is in discussions with Colombia’s Alvaro Uribe about getting the agreement with his country through a reluctant Congress. Obama has found he also favours “a strong market-opening agreement for agriculture, industrial goods and services through the Doha round \ and through other negotiations”.

Add to that the repeated statements by the president’s US trade representative Ron Kirk, who has been telling relieved business audiences that trade plays “an important role . . . in creating and sustaining better-paying jobs here at home”. Specifically, Kirk wants to expand trade with the Asia-Pacific region because “there is an extraordinary upside to us” in doing so.

“It is reassuring that Obama’s trade agenda appears to be aligning with those of presidents Bush and Clinton — and to their nine predecessors — rather than to the protectionist positions he took on the campaign trail,” commented Theodore Kassinger, former deputy commerce secretary and now a lawyer with O’Melveny & Myers in Washington.

But before awarding the president the Adam Smith Award For Combating Protectionism, consider this. Obama’s first priority is his domestic agenda: “reform” healthcare, restructure the energy industries, involve the federal government more deeply in education, fight the recession, save the carmakers, control bankers’ bonuses, revise the rules that govern the financial sector, and win what is now his war in Afghanistan. Trade is lower down on the list.

Worse still, there are signs that the president is willing to allow the state politicians in charge of disbursing stimulus funds to adopt “buy American” practices, even though his stimulus bill restricts such practices to those that do not violate our trade agreements or World Trade Organisation (WTO) rules. Local politicians know that WTO bureaucrats don’t vote in their states.

There are also subtle indications that the president will not fight to prevent protectionist measures from creeping into unrelated legislation. Banks receiving bailout money are chafing under rules that prevent them from hiring talented foreign workers. Jamie Dimon, chief executive of JP Morgan Chase, used the company’s annual meeting to denounce these restrictions as a “complete and utter disgrace” that will inevitably invite retaliation against Americans hoping to work abroad.

And Toyota and other foreign firms that make cars here — American jobs for American workers — are in effect discriminated against by the government’s decision to keep GM and Chrysler from meeting the fate to which a free market would consign them.

Nothing Obama will do on trade, either to free up the flow of goods and services, or to tip the scales in favour of American firms, will in the end matter as much as his reckless fiscal policy.

His budgets project deficits close to $10 trillion by 2019 — and that assumes his healthcare plan will cost only the $635 billion “down-payment” he has put in his budget, rather than the $1.2 trillion experts predict, and that he will succeed in almost freezing defence spending.

That means the US Treasury will be peddling billions of IOUs to investors such as China that already have trillions of this paper in their vaults. So far, so good: the recession-induced flight from risk has led overseas investors to seek a haven in dollar assets. But as the printing presses keep running, and the recession eases, investors will find the risk of being paid in dollars that have shrivelled in value too much to bear.

Which is why the dollar hit its lowest level of the year last week and why for a while it cost less to buy insurance against a default by hamburger-seller McDonald’s than against a default by the world’s only superpower. More important, it is why China and Brazil are trying to cobble together a trade deal that will allow them to bypass the dollar completely and pay in their own currencies. This might well be the first step in China’s announced intention to develop a currency to compete with the dollar as the world’s reserve currency.

So, only two cheers for Obama, less of a protectionist than expected, but nevertheless a serious threat to the dominance of the dollar in world trade.

Statism the only thing being stimulated

May 23, 2009

We’re spending trillions we don’t have to create government programs to spend even more trillions we don’t have.

By Mark Steyn
OC Register

was in Vermont the other day and made the mistake of picking up the local paper. Impressively, it contained a quarter-page ad, a rare sight these days. The rest of the page was made up by in-house promotions for the advertising department’s special offer on yard-sale announcements, etc. But the one real advertisement was from something called SEVCA. SEVCA is a “nonprofit agency,” just like The New York Times, General Motors and the state of California. And it stands for “South-Eastern Vermont Community Action.”

Why, they’re “community organizers,” just like the president! The designated “anti-poverty agency” is taking out quarter-page ads in every local paper because they’re “seeking applicants for several positions funded in full or part by the American Recovery & Reinvestment Act (ARRA)” – that’s the “stimulus” to you and me. Isn’t it great to see those bazillions of stimulus dollars already out there stimulating the economy? Creating lots of new jobs at SEVCA, in order to fulfill the president’s promise to “create or keep” 2.5 million jobs. At SEVCA, he’s not just keeping all the existing ones, but creating new ones, too. Of the eight new positions advertised, the first is:

“ARRA Projects Coordinator.”

Gotcha. So the first new job created by the stimulus is a job “coordinating” other programs funded by the stimulus. What’s next?


That’s how they spell it. Like in “Star Wars” – Luke Grantwriter waving his hope saber as instructed by his mentor Obi-Bam Baracki (“May the Funds be with you!”). The Grantwriter will be responsible for writing grant applications “to augment ARRA funds.” So the second new job created by stimulus funding funds someone to petition for additional funding for projects funded by the stimulus.

The third job is a “Marketing Specialist” to increase “public awareness of ARRA-funded services.” Rural Vermont’s economy is set for a serious big-time boom: The critical stimulus-promotion industry, stimulus-coordination industry and stimulus-supplementary-funding industry are growing at an unprecedented rate. The way things are going we’ll soon need a Stimulus-Coordination Industry Task Force and Impact Study Group. By the way, these jobs aren’t for everyone. “Knowledge of ARRA” is required. So if, say, you’re the average United States senator who voted for ARRA without bothering to read it you’re not qualified for a job as an ARRA Grantwriter.

I don’t want to give the impression that every job funded by the stimulus is a job coordinating the public awareness of programs for grant applications to coordinate the funding of public awareness coordination programs funded by the stimulus. SEVCA is also advertising for a “Job Readiness Program Coordinator.” This is a job coordinating the program that gets people ready to get a job. For example, it occurred to me, after reading the ad, that I might like to be a “Job Readiness Program Coordinator.” But am I ready for it? Increasing numbers of us are hopelessly unready for jobs. Ever since last November, many Americans have been ready for free health care, free day care, free college, free mortgages – and, once you get a taste for that, it’s hardly surprising you’re not ready for gainful employment. I only hope there are enough qualified “Job Readiness Program Coordinators” out there, and that they don’t have to initiate a Job Readiness Program Coordinator Readiness Program. As the old novelty song once wondered, “Who Takes Care Of The Caretaker’s Daughter While The Caretaker’s Busy Taking Care?” Who coordinates programs for the Job Readiness Program Coordinator while the Job Readiness Program Coordinator’s busy readying for his job? If you hum it, I’ll put in for the stimulus funding.

Read the rest:

Dollar hits new multimonth low vs euro, pound, yen; U.S., Brit long-term credit rating cuts loom?

May 22, 2009

The dollar kept falling Friday, notching fresh multimonth lows against the euro, pound and yen as a warning that Britain’s debt level may result in its credit rating being cut ricocheted into worries about the massive U.S. deficit.

The 16-nation euro rose to $1.4015 in morning trading from $1.3889 in New York late Thursday—its first time above $1.40 since Jan. 2.

The British pound rose to $1.5916 from $1.5890, peaking at $1.5945 earlier in the session, its highest point since Nov. 6.

Read the rest from the Associated Press:

U.S., Britain Both face Lower Debt Credit Ratings

What California, Pelosi, Waxman, Feinstein and Schwarzenegger Can’t Ignore: Except They’ve Already Proven Stupidity

May 22, 2009

How could California’s politicians turn the land of milk and honey into a candidate for bankruptcy or bailout?

By ignoring industry and wealth creation — just like Barack Obama is now doing on the national level.

So bad decision making jumps to mind.

The only growing “industry” in California is government; followed by health care.  And maybe health care is numero uno, to use the Californian language.

Since he became Governor, Arnold Schwarzenegger’s California has added 50,000 new state employees.  These are highly paid people with full medical care.  It’s kind of a welfare for the white collar.  And what wealth do they add to the state?  You do the math: no products produced, no industry of reality.  But they do tax, collect fees and make laws which contributes to a hemorrhage of wealth producing businesses to Nevada and other locales.
Sen. Dianne Feinstein said development of solar and wind facilities in California’s Mojave Desert would violate the spirit of what conservationists had intended when they donated much of the land to the public.

My Vietnamese born wife and I drove through the Mojave not long ago and she said, “Worthless burnt rock.”

And that is what it will reamain if Feinstein gets her way.

California’s Congressman Henry Waxman, primary sponsor of the radical cap&trade/national eco-tax bill in the House, like Feinsten and a lot of other Californians, is willing to destroy real wealth producing industry with cap and trade while ignoring something literally beneath California’s feet: oil.

Wind, Solar Produce only 1% of Electric Needs; Need “Comprehensive Energy Plan”

Last September the San Franciso Chronicle reported this gem:

“Pelosi is holding firm to her view that more drilling won’t have any short-term impact on gas prices and would only lower prices by pennies a gallon 10 years from now, citing government figures. She’s plotting a vote on a bill to rein in speculators in energy markets when Congress returns next month.  Pelosi and other top Democrats see little reason to compromise. They expect to pick up seats in the House and Senate in November – and perhaps the White House, too – which would allow them to craft a more environmentally friendly energy policy next year. In the meantime, they plan to use their fundraising advantage to bash GOP candidates with ads linking them to oil companies.”

So for the short term, gas prices are fine so why drill — that’s what Pelosi said.  And besides, according the Pelosi’s logic, she could get more Democrats elected and obtain a more environmentally friendly energy policy.The problem now is short term and it may become long term (certainly it has already on the national level).  The problem is debt, borrowing, and no creating of wealth.

So screw wealth producing.

You can’t pay health care workers and government workers without someone creating wealth.

California has a shortage of people who create wealth: Hollywood just can’t keep up.

Yesterday, Nancy Pelosi, who has never said anything rediculously stupid, called climate change “the greatest challenge of our day.”  She said climate change is a national security, economic, environmental health and moral issue.

Here’s a national security challenge: China owns most of the American debt and will just watch us spend ourselves out of the superpower seat.  But we’ll be greener than China!  Congratulations.

China says rich nations must cut emissions by 40%; offers no Chinese cuts

California  has a pack of politicians that are thinking green and thinking us into more debt.  They had better think green like green money soon or they’ll be out of both.

They are currently working on how to slash expenses and con the Federal Government out of a bailout.  Nowhere have we heard about planning to create more wealth.

Green, gay and gutless.  We could pray for more wealth producing businesses but the state has chased them off — and prayer is frowned upon.


Obama Hasn’t Noticed People Leaving California and New York?

Obama, Pelosi, Waxman, Feinstein and Schwarzenegger: demonize wealth, oil, big business and prayer.  But love green, big government, government health care and debt spending.  Can this work?


Brilliant Michael Moore Attacks Those that Produce Wealth

LOS ANGELES (Reuters) – Firebrand filmmaker Michael Moore, who targeted the Bush administration in “Fahrenheit 9/11” and the healthcare industry in “Sicko,” is now focusing on the global economic meltdown.

The Oscar-winning director will release his as-yet-untitled documentary across North America on October 2, co-financiers Overture Films and Paramount Vantage said on Thursday.

“The wealthy, at some point, decided they didn’t have enough wealth,” the statement quoted Moore as saying.

“They wanted more — a lot more. So they systematically set about to fleece the American people out of their hard-earned money. Now, why would they do this? That is what I seek to discover in this movie.”

Overture said Moore was still working on the film, and was keeping plot details close to his vest in typical fashion.

Liberty Media Corp-owned Overture will handle the film’s domestic release both in theaters and ancillary outlets, while Viacom Inc-owned Paramount Vantage will handle international sales.

Read the rest:

Pelosi Calls Global Warming “Greatest Challenge”

Obama: Get Used to The Truth, You Were Wrong On Biden, Gitmo, What Else?

May 21, 2009

Barack Obama’s enchanted first 100 days are history and now we have to deal with stark reality.

In a tragedy, do you have any confidence that Joe Biden could be President?  Probably not.  How about Nancy Pelosi?

And so can you listen to any of these with confidence?

You’ve probably decided in your own mind already if there was torture at Gitmo, if the prison should be closed and if the military tribunals have any merit.

But Dick Cheney and Barack Obama will each make their case in public speeches today as if two lawyers in a courtroom.

National Security: Rove Praises Obama for Listening to CIA, Pentagon and Growing Weary of MoveOn, Code Pink and ACLU
So ask yourself this: Is Obama in a Gitmo cell himself and if so why?  Why do we have dueling speeches today?

It appears that on Gitmo, torture and the tribunals, Team Obama did a lot of yacking but not a lot of research and alternative evaluation.  Then they sent their budget to the Congress with a promise to figure it all out.

AP: Obama in political box over closing Guantanamo
See link below)

Congress hit the abort button: no blanck check with a promise to tell us the details later.

Some in Congress must be asking, why in hell did we issue such a huge blank check on the stimulus without knowing the details?

The same money sans details scenario is approaching with health care and cap and trade.

This is governing by speeches, deficit spending and attention-deficit-disorder.

What we expect Dick Cheney to say today is, because we have neglected the details we are less secure today than we were a few months ago.

That’s a tall charge of malfeasance: the White House doing its homework so badly that national security is in peril.

And that charge from Cheney should cause all of us to ask, what other projects still have “devils in the details” that haven’t been looked for and seen?

Iran?  Israel?

Jihadists from Gitmo Back in Terror War:

Obama ‘Distracted’ by Biden’s ‘Indiscipline,’ Book Asserts

Pelosi’s Congressional Team Worked Details of Stimulus, Health Care: Do You Trust Them?

White House: “It Was a Mistake” To Set Up Gitmo. Really?

Is Iran Ready For Lasting, Peaceful Dialogue?
Obama’s Biggest Gamble?
Has Obama given up on halting Iran?
Iran tests missile that could hit Israel, Europe

AP: Obama in political box over closing Guantanamo

Watch For Next “Bailout” Idea To Come From California…..

May 20, 2009

“California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.  The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.”

That was last October 3, 2008.  So what does any thinking American believe about a bailout of California now that the state’s  voters have refused to pay more?

(A)  Arnold Schwarzenegger will ask Obama for a bailout.  California is too big to fail.


(B) The rest of us shouldn’t have to pay more.  No Fed Bailout for California.

The problem is, like an addict needing drugs, many are crying for a bailout after AIG, the banks, the entire auto industry and a bunch of others got fed at the trough.  Geithner has turned into drug dealer of first choice.

It might not be “permanent.”  Just an addiction….

“We are committed to helping California in these difficult economic times,” an Obama administration official said today. The official was not authorized to speak publicly….

The Obama Administration also caved in on its threat to withhold stimulus money from California…..

The L.A. Times reported that a letter that was given to the governor this morning, the U.S. Department of Health and Human Services said the state remains eligible to receive another $8 billion in stimulus money for its Medicaid program, a ruling that may offer some solace for state officials coping with the resounding voter defeat Tuesday of five ballot measures aimed at closing California’s huge budget shortfall.

Note “some solace”= $8 billion….

California Voters Reject Taxes, Spending, Big Government — Bluest State is Red in The Face

May 20, 2009

California is arguably the bluest of the blue states — the most liberal of all the 50 states.

But news from Na-Na Land today: the state’s voters reject more taxes, more spending and more bad government.

Voters said yesterday: guess what?  We can’t have it all because we can’t afford it.

California voters soundly rejected a package of ballot measures Tuesday that would have reduced the state’s projected budget deficit of $21.3 billion to something slightly less overwhelming: $15.4 billion.
Three thousand people are leaving California every week: many seeking lower taxes.

“Go West Young Man” has turned into “go back east or go back where we came from.”

The voters of California seemed to join the Tea Party Revolt on Tuesday.

Washington should take note….

Michelle Malkin:

California: Why Liberal Media is Failing
Calif Voters Order Govt Pay Cuts; No New Taxes, Gov Starts Slashing Budget, Services

In Calif: Schwarzenegger Runs To See Obama as Voters Expected to Trash His Spend and Borrow Budget

May 19, 2009
Conceding that passage by angry voters seems unlikely, the governor makes a final pitch before leaving to join President Obama at a White House news conference.
By Michael Finnegan and Michael Rothfeld
L.A. Times
May 19, 2009
The battle over six state budget propositions on today’s ballot sputtered to a close Monday with a burst of low-profile campaigning that belied the gravity of California’s fiscal crisis.

Gov. Arnold Schwarzenegger, whose legacy will be shaped in part by the election’s results, made a final pitch to voters before leaving the state ahead of the results. The governor is scheduled to join President Obama at the White House today for an announcement on auto emission rules. His absence in the face of widely forecast defeat drew mockery from his foes.

Read the rest:


Angry California Votes On $15-21 Billion Deficit; Govt Employees Highest Paid, Gov Threatens to Close Fire Stations, State Already Gets Over $90 B of Stimulus

Obama Refuses to Meet with Nevada Governor after Gov Says O Killed Vegas Tourism

See Bloomberg:
“The voters who are really tuned in are really turned off,” the survey’s director Mark Baldassare said. “They see the state’s budget situation as a big problem, but so far, they don’t like the solution.”

Angry California Votes On $15-21 Billion Deficit; Govt Employees Highest Paid, Gov Threatens to Close Fire Stations, State Already Gets Over $90 B of Stimulus

May 18, 2009

The State of California has the eighth largest budget of any country in the world….

But the state also has among the world’s biggest and most highly compensated government work forces….

The only segments of the California economy that are growing are the government and health care…..

California gets 12% of the $787 billion federal stimulus…..That’s about $94.4 billion….

The “Golden Bear” has wasted its  Golden Share?  Shelves are Bare at the Golden Bear?


Tuesday, California voters will decide on six statewide propositions during a special election.

If the voters don’t save a bunch of money for the state, the Governor says he’ll close prisons and fire stations….

Police stations are being closed or consolidated….

“Maybe California should end its sea otter project,” Fox News’ Glen Beck thinks….

File:Sea otter cropped.jpg

The propositions concern alterations to the California lottery, funding for education and mental health services and a prevention of pay increases during budget deficit years for lawmakers — all in an effort to ease the strain on the state’s budget deficit.

Get to know more about Prop. 1A to Prop. 1F with’s voter guide.

A lot of other states are also in deficit trouble, including New York and Vermont…..In fact, 47 of the 50 states have serious budget shortfalls which cumulatively top $300 billion….

Fed Tells California: Can’t Cut Pay of Union Jobs To Save Budget; Threatens Loss of Stimulus Money

Obama’s Spending, Debt, Taxes Will Lower America’s Standard of Living

May 14, 2009

Stuart Varney says, “America’s standard of living, especially for Middle Class America, is likely to stagnate or drop due to the Obama administration’s spending and debt.”

Varney is the British economic journalist, currently working for the Fox News Channel.

He said he expects taxes to go up to pay for all the spending and debt and anticipates a recovery.

But he has concerns that the recovery will not return average wage earners to the prosperity they once enjoyed due to new taxes and inflation…..