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Archive for the ‘CBO’ Category

The EU, US and UK Are Going Bankrupt, Not China | Culture of Life …

emsnews.wordpress.com11/17/11

But it didn't shift in the US favor, it shifted in favor of Asia! Now, Europe is seeing individual countries going bankrupt, one after another, in rapid succession. Greece already is bankrupt when they announced a 50% haircut on …

The Dollar Today Is Dead, The U.S. Bankrupt | Laitman.com

www.laitman.com10/30/11

Opinion: (Giulietto Chiesa, former Italian Politician and Member of the European Parliament): “We are at the beginning of the transition period, which has no.

You Don’t Believe The US Is Headed For Bankruptcy?

So Let’s put the debt into perspective!

And now take a look at President Barack Obama’s 2010 budget!

It shows a massive fiscal gap over the next seventy five years, the closure of which requires immediate tax increases, spending cuts, or some combination of both totaling 8% of gross domestic product, and to put 8% of America’s GDP in perspective, this year’s employee and employer payroll taxes for Social Security and Medicare will amount to just 5% of GDP.

And why are we only projecting seventy five years ahead? Probably because over the full long-term, we’ll need an extra 12%, not 8%, of GDP annually.

Seventy-five years might seem like a long enough time to plan ahead but it’s not, and if the Greenspan Commission, which “fixed” Social Security back in 1983, had focused on the true long term we wouldn’t be sitting here now with Social Security 26% under funded.

The Social Security trustees, at least learned a lesson and the 26% figure is now based on their infinite horizon fiscal-gap calculation.

And another reason we shouldn’t look just seventy five years ahead, is that the government’s cash flows, which are the difference between its annual taxes and non-interest spending, over any period of time, including the next seventy five years, aren’t well defined.

If you use different words to describe the receipts taken in and paid out each year by the government, you produce entirely different cash flows and an entirely different fiscal gap measured over any finite horizon.

Take this year’s payroll tax contributions.

Let’s call these transfers from workers to Uncle Sam “borrowing” by the government, rather than “payroll taxes”, since the money will be paid back as future benefits.

If the future payback isn’t in full however, meaning equal to principal plus interest, then we can call the difference a “retirement tax”.

And abracadabra!

With this change of words, our 2011 deficit of about 10% of GDP is boosted another five points to 15%.

The bottom line then, is that we need to look at the infinite-horizon fiscal gap not just for Social Security, but for the entire federal government and that analysis, based on the CBO’s (Congressional Budget Office’s) long-term alternative fiscal scenario, shows a mind numbing fiscal gap of $202 trillion!

And covering this gap requires coming up with the aforementioned 12% of GDP, forever.

But the Obama administration budget has seemingly fixed the problem!

The president’s 2012 budget, shows that most of our long- term fiscal problem has miraculously disappeared and the fiscal gap isn’t 12% of annual GDP or even 8%, it’s 1.8%.

How does it work?

In 2014 an Independent Payment Advisory Board will be established and will be charged with recommending cuts to Medicare and Medicaid providers when their costs grow too fast.

Hardly anyone expects the cuts to actually happen of course, because until now they’ve always been repealed, and Richard Foster, who is Medicare’s chief actuary certainly doesn’t believe they’ll happen.

Foster added this statement to the end of the report:

“The financial projections shown in this report for Medicare do not represent a reasonable expectation in either the short range, or the long range”.

I’m not sure whether censoring the fiscal gap is more dishonorable than fudging it, but what is sure, is that if nobody starts getting honest about it real soon, then it will be cheaper to light cigars with dollar bills than with matches.

The Obama Plan to Redistribute Housing | Libertarian Party

www.lp.org10/29/11

First Obama tried to redistribute wealth before he was President, by leading the charge to force banks to make loans to lower income Americans who could not afford to own homes (through the Community Reinvestment Act). …

Applying Obama's “redistribution of wealth” to school grades …

usamericanfreedom.com11/19/11

That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama's plan”. …

Obama and the liberals could perhaps have achieved both growth and redistribution, but they chose only the latter, and they will pay heavily for their error on Tuesday!

Will Obama change direction after the elections?

No He won’t!

During his election campaign Obama said:

“What people really want is fairness”.

“They want people paying their fair share of taxes”.

“They want that money allocated fairly”.

Redistribution Of Wealth

People thought it sounded good and they voted for him, but they didn’t know that he would immediately attempt redistribution of wealth, and he went for it full throttle in spite of the recession.

What the vast majority of Americans believe in however is economic growth, and they understand full well that the threat of having more and more money taken away as you get richer and richer is simply a demotivator.

The result, motivation went down, small businesses stopped hiring and unemployment went up and stayed up; and in some states it’s still getting worse.

Then Came ObamaCare

With motivation down, the Obama administration then committed another horrendous error of judgment – they rammed ObamaCare down a mostly unwilling nation’s throat.

Obamcare essentially subsidizes health insurance for low and middle-income groups and attempts to recover the cost by taxing high-earners even more, which in turn lowers motivation and causes people to hunker down instead of trying to grow their businesses.

And what makes it even worse is that low and moderate-income workers now feel no need to earn money because they can now maintain the same standard of living with even less effort.

Obama’s Response?

Seeing popularity wane both for him personally and for his policies Obama set out a stand and tried to sell the public his unwanted wares.

Expanding health care coverage was somehow going to somehow drive down costs.

Handouts to state and local governments became a stimulus package.

Climate change legislation became a “green jobs” bill, and so on.

When the voters didn’t buy his arguments his response was to tell them that, “They are confused and not thinking clearly” and that one statement will cost him dearly.

You don’t tell people that you want to vote for you that they are basically stupid if they don’t understand you, do you?

Harry Reid just said something equally stupid and it might cost him re-election in Nevada, “He saved the world economy!”.

Doesn’t he know that Oblamer is the One?!

Could Obama Have Played It Differently And Maybe Won?

Yes, he could have!

Obama could have embraced at least two policies that would have enhanced both equity and economic performance simultaneously, and some of them might well have bridged the ideological divide.

Fannie Mae and Freddie Mac.

Loan guarantees should not have been provided for Fannie and Freddie because they shifted risk from participants in real estate transactions to taxpayers, and the caused capital to flow into the industry under very favorable terms.

Creating the guarantees allowed mortgage lenders, realtors, homebuilders, developers, securities traders and others to reap enormous gains during the boom, only to later dump their losses on taxpayers during the ensuing bust.

Cutting off all federal support for Fannie and Freddie would have sent a completely different message.

It would not only have greatly enhanced equity, but would also have helped steer investment away from ever more conspicuous McMansions and into productive endeavors like building newer, more-efficient factories, all of which would have stimulated economic growth.

* “McMansion” is an originally pejorative term used to describe a large house, particularly in the United States, that is constructed using modern labor-saving techniques and materials

The Tax Code

Another area that was ripe for reform would have been the loophole-ridden tax code.

Today, the proliferation of carve-outs means that only around 40% of personal income is taxed!

The loopholes should have been removed as much as was possible and the tax base broadened, after which the Obama administration could have slashed rates, enhanced equity, and provided a huge stimulus to the economy.

Instead, the administration did exactly the opposite; it added even more loopholes and promised to raise rates!

Right now we have a situation where similarly situated families often face vastly different tax burdens depending on their ability to game the system, and it also means that investment is steered away from companies that are adept at building better products, to those with the knack for lobbying.

Will Obama Move The Goal Posts?

Obama was a member of the New Party (communist) just 13 years ago, and he was no teen.

Michelle is a Black separatist of the worst kind as her Princeton thesis shows.

Obama is on record as saying that he’d rather be a great one term President than an ineffectual two termer, so we can sadly expect him and Michelle to continue to try and force their socialist/communist on America!