Thursday, July 29, 2010

Don't Worry Your Pretty Little Head, ...

... your Government is looking out for your best interest.

Further increases in federal debt relative to the nation’s output almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades. Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels, as shown in the figure below. (For more details, see CBO’s recent report The Long-Term Budget Outlook.)

Although deficits during or shortly after a recession generally hasten economic recovery, persistent deficits and continually mounting debt would have several negative economic consequences for the United States. Some of those consequences would arise gradually—but a high level of federal debt, combined with an unfavorable long-term budget outlook, would also increase the probability of a sudden fiscal crisis prompted by investors’ fears that the government would renege on the terms of its existing debt or that it would increase the supply of money to finance its activities or pay creditors and thereby boost inflation. The resulting abrupt rise in interest rates would create serious challenges for the U.S. government. For example, a 4-percentage-point across-the-board increase in interest rates would raise federal interest payments next year by about $100 billion; if those higher rates persisted, net interest costs in 2015 would be nearly double the roughly $460 billion that CBO currently projects for that year. Such an increase in rates could also precipitate a broader financial crisis because it would reduce the market value of outstanding government bonds, inflicting losses on mutual funds, pension funds, insurance companies, banks, and other holders of federal debt.

From the blog of the Director of the Congressional Budget Office

Our National credit card is maxed out, and we aren't even making minimum payments.

Wednesday, July 28, 2010

Congress Adds Another Nail in the Coffin of the American Economy

The United Sates Congress has exempted the Securities and Exchange Commission (SEC) from the Freedom of Information Act. This will really inspire the restoration of confidence in the Stock Market and the United States Dollar. NOT


Sunday, July 25, 2010

No Dollars and No Sense

Zero Dollar Bill

Federal Reserve Chairman and Time Magazine Man of the Year, Ben Bernanke notes the our economy is "unusually uncertain". How condescending of him to let us know what we already knew.

Sunday, July 18, 2010

Open Letter to my Children

(A response while forwarding some old depression era photographs)
Even by my childhood not even 15 years later, the world had improved a lot from the world of the 1930s, but nothing like you know now.

In the early 1950's:
There were no Interstate highways. Most country roads were still dirt.
Motels were little individual houses in a semicircle - and often had flashing neon signs saying "No Vacancy".
Men still wore dress hats and suit jackets to go to town. Women wouldn't be caught dead in pants in town.
By the way, those hats were always removed indoors.
School teachers were always dressed up. Women wore their good dresses and men suits and ties - always.
Good dress? Suitable for church. Even the kids were dressed up for church. The boys wore jackets and ties too.
Somehow what passed for fat back then don't seem anywhere near today's standard. There were no 300 pound people.
There were no jet planes. Crossing the US took an entire 24 hour day by plane and you were dirty and exhausted.
But that was OK because trains still served small towns and competed in style and service.
Telephone calls still required operators except very locally where it was a four-digit dial. There were no Area Codes or Zip codes for that matter.
Party lines where you shared a line and could listen in to your neighbor's call and vice versa were the norm.
Long distance required setting up a connection ahead of time.
Pay phones were everywhere often in great lines.
Television broadcast in black and white like these pictures but just a few hours an evening - sometimes just 15 minutes.
Not every family had one. If you did you were considered rich. In my high school, I was the first to have my own: a 9inch round tube set (with a plastic water blister to magnify the picture) that I patiently restored from dead myself.
FM radio was an adapter that plugged into some radios. There was nothing on it anyway. AM radios glowed orange with the light of the tubes inside. I got one for my eighth birthday. I was proud of it. None of my friends had one.
Soft drinks came in glass bottles with no screw tops.
Smokestack factories dotted our country.
Most things were made in the U.S.A., not yet with a few shoddy things made in Japan.
Most kids still bragged on what there dad "did in the the war".
A penny would buy you candy, a nickel would even get a chocolate bar and you would
be thankful when one of your parents friends gave you a penny.
Most drug stores still had lunch counters or soda fountains as we called them.
Downtown areas were busy with stores - clothing, hardware, grocery, drug, and of course, the bank.
The big cities had a signature department store or two; and you would go once a year generally before Christmas.
There were no computers - not even at the banks.
There were no credit cards. Not even Diners Club or American Express yet.
The bank was like a fortress with walls with gun-ports between you and the teller.
You kept track of your money in a bankbook which the teller wrote in and you guarded with your life.
A camera folded out with a bellows and your pictures were hand developed and back in a week or so.
There were no meals that merely needed to be heated to eat, but mothers stayed home all day to cook and clean.
No one's home had air conditioning. If it was that hot, you went to the movies - maybe. Otherwise you just fanned yourself and bore it.
Coffee, spam, and tuna fish came in cans that were opened by turning keys that wound off a strip of metal and would often cut you.
Politicians knew their constituents and would greet you by name, so would policemen.
Milk bottles were left in a metal container by the kitchen door and the empties picked up. Some places also delivered bread.
And in some places (York, PA for example), even cases of beer were left at the door.
The annual introduction of the new cars was a big deal shrouded in secrecy and created a great deal of interest.
Penicillin was about it for wonder drugs.
X-rays were dangerous except for that machine at the shoe store I guess.
The doctor made house calls - even 15 miles from his office.
When you had the measles, they put dark curtains over the windows lest you go blind or need glasses.
The dentist's drill was run by strings and pulleys - and hurt. Some even were pumped with foot pedals like old sewing machines.
Remember them? Most kids wore clothing made by their mothers. Patches on the knees of boy's pants were not at all unusual.
High schools did not have student parking. Few teenagers had cars. If they did they were being restored. What they did have was bicycle racks.
Cars did not have air conditioners and barely had heaters. Even windshield wipers were primitive and
driven by vacuum from the engine and would speed up and slow down with the engine.
Some even had radios, but most did not.
The dash board was metal and hurt if you hit it on a sudden stop.
Almost nothing in your world was made of plastic. If it was, it would not be any plastic you would recognize today. It would be something like melamine of phenolic. There was no polyethylene or polystyrene. Nylon was new and a substitute for silk in ladies stockings.
Schools did not have intercoms or door holders other than a kid in your class.
The desks were screwed to the floor, often in long rows, but always with an inkwell.
The teacher was an authority figure backed up by your parents who would sometimes even provide a meal for (generally) her.

And these were things the people in these pictures would have found as marvels and been thankful for!
And however bad things seem today, be thankful for the changes we have made.

Saturday, July 17, 2010

(Mis)Leading Economic Indicators

The cheerleaders for the Government in the nightly news and the shells that remain of Time and Newsweek and our daily papers tell us that the recession is over and happy days are here again. I look around and wonder if they are in a different world than I am.

Sunday afternoon I went to my local Lowe's hardware/builders store and bought something I needed and a few things I didn't and came back home to do a little home repair. Lowe's and Home Depot are big box discounters who sell Chinese made plumbing and electrical supplies cheaply. So cheaply in fact that all of the hundred-year-old mom-and-pop hardware stores have had to either shut their doors or delayed that inevitability a bit by selling the same blister-packed Chinese junk for a somewhat higher price than Lowe's and Big Orange.

Tuesday morning I drove past and noticed plywood over the sign out by the road in front of Lowe's. My first thought was "damn vandals". I noticed the same on the other side and then looked at the building. The name was gone! Sunday evening after I took my ball-cock and went home to fix my toilet, the employees were all called together and told "That's it. Don't come in tomorrow." I guess they figured if I was only going to buy this home repair stuff and not remodel my entire home, they weren't going to waste their time on me.

The true irony was that as I was driving by, the news on the radio was reading a report from the Department of Labor of how "although the number of unemployed was up due to the release of the Census counters, the figures were actually good news because that was offset by the creation of so many jobs in the private sector."

But employment is only one part of it. Much has been made of the collapse of the home housing market. They call it a bubble. I think that to be misleading. If it were truly a bubble, the houses that were built would never have been occupied. They would have been overbuilt by quantity. These were overbuilt by quality. People fraudulently bought houses their income and station-in-life did not really qualify them for - janitors in half-million dollar McMansions.
And then the inevitable caught up with them.

There is something else hanging over our heads: The suburban landscapes is covered with the carcasses of big-box stores like this Lowe's, the remnants of the war of the drug stores of a decade ago, hundreds of small strip malls and office parks that were never full and now boast no real tenants other that the occasional dollar store and imitation Goodwill store. The fast food stores now house title pawn and "We Buy Gold" places. (How can they stay in business? Fool me once shame on you. Fool me twice, shame on me. Are there enough shameful fools out there to support so many of these crooks?)
This real estate is as leveraged as the housing market and due to the miracle of debt-backed currency and fractional reserve is poised as a sword of Damocles over our heads waiting to drop and wreak havoc on our unsound and fragile economic system.

Thursday, July 8, 2010

NASA's New Mission

You may have heard President Obama's new head of NASA, Charles Bolden, explain on Al Jazira what three tasks the President has instructed him to persue, most notably to "reach out to the Muslim World". Well, let us see how the Muslims view NASA and our world.

We Will Discover What is in the Health Care Bill Once We Pass It

For starters, every commercial transaction over $600 must be reported to the Federal Government. Aside from the burden of extra and increased paperwork, comes the ability to track who has bought what. Privacy will be a thing of the past.
What has happened is that effective Jan. 1, 2012, the whole system of giving and receiving Internal Revenue Service 1099 forms will be turned on its head and all persons (including corporations) who are in business will now have to give 1099 tax reporting forms for coins and other goods that they sell as well as buy.

What does this have to do with healthcare?
Well it is one way to keep us in line. Land of the free indeed.

Monday, July 5, 2010

Fourth of July Celebrations

Was it my imagination, or did once upon a time Fourth of July celebrations include speeches? Not just the why you should elect me and not that scoundrel running against me; but speeches on liberty, freedom, and "why this is a great country". It seems like such a long time ago.

Oh, well, bring on the fireworks and tacos.

Friday, July 2, 2010

Please Don't Squeeze the Customer

From time to time, I answer surveys for a company from the Midwest. I get a dollar. Today's survey is about Toilet Paper. Question 7 is
For Each statement, select which brand or brands of toilet tissue, if any, that statement best applies to.

Some choices are:
I like to seek out others who use this brand
On occasion I like talking to others about this brand
I feel this brand helps me connect with others

I chose answer number 4 for all:
I feel I have some things in common with others who use this brand.

Somewhere, some company paid a lot of money for this sh ... err,uh, survey.

Thursday, July 1, 2010

Something I have suspected for a long time

From an essay by Walter E.Williams confirmation of some of the things I had observed over the years
According to the U.S. Department of Health and Human Services, the 2009 poverty guideline was $22,000 for an urban four-person family. In 2009, having income less than that, 15 percent or 40 million Americans were classified as poor, but there's something unique about those "poor" people not seen anywhere else in the world. Robert Rector, researcher at the Heritage Foundation, presents data collected from several government sources in a report titled "How Poor Are America's Poor? Examining the 'Plague' of Poverty in America" (8/27/2007):

Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage and a porch or patio.
Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
Only 6 percent of poor households are overcrowded; two-thirds have more than two rooms per person.
The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
Eighty-nine percent own microwave ovens, more than half have a stereo, and a more than a third have an automatic dishwasher.

And there is no mention of how many poor kids have the indispensable cell phone - and not some minimal phone only cell phone. No, only the one with texting and a camera will do.

It is tough to be poor in America.