Day by Day

Monday, November 15, 2010

Swept Away and Sinking Fast - Democrat "Leadership"

Nancy Pelosi and Democrat leadership permanently reside in “Fools’ Paradise.” The chairmen of President Obama’s fiscal commission just released a report proposing sweeping changes to Social Security, Medicare and the tax code. The plan would reduce the deficit by nearly $4 trillion over the next decade by making dramatic spending cuts and overhauling the tax code by lowering tax rates while wiping out some deductions, such as for mortgage interest. Pelosi and union leaders called it “simply unacceptable.”

What is acceptable? Drowning in our current raging, rising deficits? At the Federal level, unfunded liabilities for Medicare/Medicaid and Social Security total over $80 trillion, roughly six trillion more than the world’s gross annual product. For state and municipalities, indebtedness plus unfunded public employee pension liabilities exceed four trillion dollars, or $41,000 per household. Very soon every tax dollar will be consumed by entitlement programs. You want to increase funding for education by cutting the military budget? No problem; military spending will have to be cut – to zero! But so too will funding for education, parks, transportation, police, fire, libraries; everything but entitlements will have to be eliminated.

Is there a way out? Yes, states and municipalities can default on their debt payments. “Experts” who say this won’t happen consider only bonded indebtedness but ignore the unfunded pension liabilities tsunami. These experts suggest the Feds should rescue states and municipalities, yet they ignore the super-tsunami of unfunded Federal entitlement liabilities. Who rescues the rescuer?

Public employee pensions, “negotiated” between public employee unions and politicians (who are also public employees) seeking their contributions and votes, will be swept away by waves of municipal bankruptcies. In California pension costs rose 2,000% from 1999 to 2009, while state funding for higher education declined. That’s unsustainable.

Piloting the “Ship of Fools,” Nancy Pelosi calls that simply acceptable.

Wednesday, November 03, 2010

E. J. Dionne Jr. doesn’t get it (and never will)

According to liberal columnist E. J. Dionne, Jr., Obama and the Democrats did the right things, they just didn’t “sell them” well, and now Republicans should do what Democrats would if they continued to control Congress. Dionne pointed to revenue sharing with the states, especially now that most will have Republican governors.


That’s a dumb idea. The states – and counties, and cities – have unleashed a tsunami of unsupportable spending for public employee pensions. Soon the only funds available to governmental units that can’t print money will be totally consumed by government employee pensions.

If Republicans cooperate with Democrats and governors through revenue sharing they will be enablers of this spending addiction. Simple mathematical analysis illustrates that current and projected tax revenues, even given the most optimistic scenarios, are insufficient in light of unfunded public employee pension liabilities. If private businesses had such unfunded liabilities, the government would immediately shut them down.

It’s inevitable that there will be massive public sector bankruptcies – cities, counties and states – and that the Federal government does not have the will or the means to rescue them from themselves.

The best thing Republicans can do is to practice “tough love” and resist vain rescue attempts, because in fifty years unfunded entitlement liabilities for Medicare, Medicaid, and Social Security will squeeze out all “discretionary” Federal spending programs. Right now would-be rescuers would best serve their country by avoiding being part of long-running government incompetence that sees the problems facing later generations and doesn’t do a thing to prevent them.

So, Mr. Dionne, Mr. Obama, and all you “progressives” – give me proof that I am wrong.

Obviously you must believe I am, or else you would be doing something about it.

Wouldn’t you?

Tuesday, November 02, 2010

The Election is Over!

The election is over, and Republicans did quite well. Let the analyses begin!

First, there will be near universal agreement by the main stream media with Senator Kerry that the American public are “know-nothings” because if they were “know-somethings” they would have voted for Democrats. Another point of agreement is that Republicans are divisive – in fact, Obama considers anyone who disagrees with Democrats not only divisive, but “enemies.” Obama told Latinos that instead of sitting out the election, they should be saying, “We’re gonna punish our enemies, and we’re gonna reward our friends who stand with us on issues that are important to us.”

More agreement – it’s all the fault of Republicans and George W. Bush. This one’s easy, since the Republicans only lost the House and Senate four years ago, and the presidency two years ago. If the Republicans would have just gone along with Democrats, unemployment wouldn’t have doubled in two years to 9.6% and neither would the public debt.

Of course, with total Democrat control of government since 2009, the Democrats didn’t need even one Republican vote to pass anything they wanted. That didn’t change until the voters of heavily Democrat Massachusetts, the only state suffering universal healthcare, elected Scott Brown to fill the Senate seat of Mr. Universal Healthcare, Ted Kennedy, thereby giving Republicans a filibuster option – if no Republican defected. In order to claim “victory,” Democrats then hastily passed the health care bill no one (except the health insurance companies) likes, including almost all Democrats running for House and Senate seats.

Interestingly, the most important issues: enormous unfunded liabilities for public employee pensions, Medicare and Medicaid, and Social Security will soon prevent politicians from spending for anything else. Until these unsustainable entitlement programs are fixed, all else is just “grandstanding on the Maginot Line.”