Captain Obvious Moment of the Day: Debt Unsustainable, We Must Stop Borrowing From China
Thank you Captain Obvious… err… I mean Obama!
Ironically enough the debt and the borrowing that Obama is concerned about will mostly come from his irresponsible spending habits within his first 100 days. When Dick Morris mentioned that Obama’s first 100 days would come back to haunt him, he was right!
President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”
That calls for a big “DUH!” but that is simple common sense, something that is much like an endangered species in the halls of D.C.
The amusing part of all of this is the fact that Obama is just simply unwilling to look in the mirror and realize that he has quadrupled the debt and increased our deficit more than any other president in history. He has spent more in his first 100 days than all presidents throughout history combined – and that includes Bush to all you liberals.
Obama continuously uses the blame Bush rhetoric for having to take “drastic” measures, but as any intelligent human being should realize, when the government and politicians make things out to be a crisis, yet you don’t really feel that way (unlike a physical attack against your country), you should be incredibly wary. Politicians lie, they lie to pass an agenda, and Obama is a genius when it comes to manipulation, deceit, and drama.
Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.
Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending.
We are now learning that the supplemental spending for war funding and emergency funding that is sitting in the House and Senate are both over $90 billion at this point. There will most likely be a compromise of some sort between the House and Senate but I believe that the real amount of additional appropriations will most likely stay above the $90 billion threshold.
Let’s not forget that under the Obama administration and this radical left Congress that government is growing and the private sector is shrinking. Entitlement programs are growing because liberals know that the more you can put your thumb over people and oppress them by getting them “hooked” on entitlements and the government, the more they will win votes… that’s just cruel.
The issue is that we are going to go bankrupt quicker by upping the ante on entitlements. Entitlements themselves are already unsustainable.
Baby boomers — that 70-million-strong population lump — begin officially retiring this year. That means the government’s bill for retirees’ pensions and health care has no where to go but up, for decades to come.
Everyone knew this day would come. And virtually every economist and actuary who had run the numbers could tell you, within a few years’ certainty, the system was going bankrupt.
But all this seemed to happen in the distant future. Last year, both political parties virtually ignored the topic during their presidential campaigns. It became a non-issue issue.
Well, thanks to a profligate federal government, which will double the national debt to $11.5 trillion in just four years, and a recession that has weakened federal tax revenues, we can no longer ignore the problem. The day of reckoning is at hand.
The Social Security Board of Trustees reported Tuesday that costs will exceed revenues in 2016 — a full year sooner than expected just last year. And total assets — including more than 70 years of “surpluses” built up in the “trust fund” — will be completely gone by 2037 — four years earlier than in last year’s report.
The deficit over the next 50 years is expected to be about 2% of taxable payrolls — up from 1.7% last year. By the way, changes in the last year alone have added $5.3 trillion in costs to the program.
Long-term, unfunded liabilities for Social Security and Medicare top $53 trillion — about four times the size of current GDP. Taxes must either rise or benefits shrink by that amount to close that gap.
Maybe we could try to work on some issues that really matter, those that could possibly destroy people’s lives? Instead of criticizing private social security accounts, maybe we should revisit the idea and work from there. Many economists argue that private accounts of some sort would be more cost effective and better for everyone.
We also cannot forget that Obama and his lefty contemporaries want to reform health care and create a possible single payer system. Many do not believe that the single payer legislation will get passed, but something that makes the private sector compete with the public sector by providing a choice. The issue that I have/see with this “competition” is how the government can become so forceful and, as it has done in the past, force out of business anything competing with it. Either way, any additional programs provided by the government must come out of taxpayers’ pockets, so medical care will never technically be free – it will only be free to those who don’t work or pay taxes. This is the crux of the problem. Health care provided by the government will just increase our debt to China even more…
Obama is concerned with China? He’s concerned with owing the Chinese more and more? Well, maybe if we took a look at the recent auto industry news regarding GM it would be evident that all we do is take China’s money, give China jobs, and all in all are in the pocket of China.
As thousands of General Motors workers await word on more U.S. plant closures, reports that the company plans to import Chinese-made vehicles to the U.S. have created a political problem for the automaker and the White House.
The reports, which GM will neither confirm nor deny, could mean trouble because GM is supported by $15.4 billion in U.S. government loans, largely due to the Obama administration’s desire to preserve the company’s 90,000 U.S. jobs.
The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.
“GM should not be taking taxpayers’ money simply to finance the outsourcing of jobs to other countries,” Alan Reuther, the union’s Washington lobbyist, wrote in a letter to U.S. lawmakers.
Maybe if the Unions were not allowed to lobby on Capitol Hill to force the hands of Democrats and completely crush the auto industry, this would not have been a problem and the outsourcing of jobs would not have been so enticing to the ailing auto giants. But why would Democrats ever put the good of the country or an industry over that of a big donor?
I have an idea for all who read this – let’s attempt to elect someone who is for the people, by the people – not bought and paid for. Let’s elect somebody who is honest and integrity means more to them than politics and agenda… Stop electing these corrupt, pathological liars and maybe we can get our country back on track.
Biden Thinks Unions Will Help the Middle Class…!?
Moron Alert! Joe Biden thinks unions will help the middle class and possibly cure the ailing economy.
Vice President Joe Biden, making a renewed pitch for a major change in labor law, told union leaders Tuesday that the best way to rebuild the middle class is to help labor unions grow.
Biden said it’s time to “level the playing field” for unions by passing a bill that would make it easier for workers to organize.
“You’ve got to climb up a hill with so many roadblocks on the way to organize that it’s just out of whack,” Biden told a conference of the American Federation of State, County and Municipal Employees, which has about 1.6 million members.
“If a union is what you want, then a union is what you should get,” Biden said.
The Employee Free Choice Act — also known as “card check” — is organized labor’s top priority this year, but business groups are adamantly opposed. It would allow a majority of workplace employees to sign cards to join a union instead of holding secret ballot elections.
This is just idiotic. We are supposed to believe that unions, one of the major causes of the auto industry downfall, will actually help the economy and put more money into the hands of the middle class? Unions have been incredibly corrupt once they came to power and held more sway up on Capitol Hill. Even employees that are supposedly protected by unions get used and abused in order for the union leaders to gain more power and control. Unions suck money out of companies because of strict contractual agreements, huge benefit packages, protection from getting fired, major pay rates, etc. If private companies are forced to accept union labor, they will move to other countries to conduct business. The United States, IIRC, is the only country that has unions. When auto industries conduct business in other countries they are actually profitable because there are no unions in those factories. Other companies will escape overseas, so if Biden wants to level the playing field, as he puts it, and not completely demolish the U.S. economy, then he will have to figure out a way to enforce union labor on places like India, China, Brazil, etc. FAT CHANCE – Good one Joe… But then again, we already know that you and your Democrat cronies are all in the pockets of the Unions.
The Puppet Makes Budget Cuts… To Help Unions
We all know that Obama is bought and paid for by the unions and he once again proves that he is in their pocket. He makes these grandiose overtures to try and pass off budget cuts of historical proportions or market himself to appear to be improving the national debt.
Those who research and do our homework know that those overtures fall flat, especially when one of the largest cuts from the federal budget is the 9% budget cut of the union regulations department. This comes from the Department of Labor via American Spectator:
…buried in the budget documents released by the White House today is a 9 percent cut in the unit of the Department of Labor that is in charge of regulating unions.
Under the leadership of Elaine Chao during the Bush administration, the Labor Department’s Office of Labor-Management Standards took its job of policing unions seriously. Its actions led to 929 convictions of corrupt union officials and to the recovery of more than $93 million on behalf of union members. Yet the Obama administration has proposed slashing its budget from $45 million in 2009 to $41 million in 2010, citing an insufficient “workload” for the office.
Instead of using the money to make sure unions play by the rules, the Obama administration proposes shifting resources to the department’s Wage and Hour Division, Office of Federal Contract Compliance Programs, and the Occupational Safety and Health Administration — all areas of the agency focused on regulating businesses.
Not like union regulation matters anymore when the Department of Education is growing at a rapid clip and the UAW owns GM and Chrysler. I guess the unions can all manage themselves – no corruption there/sarc.
Half of the budget cuts under Obama will actually come from the defense budget:
About half of the cuts are in the Defense Department’s budget, and the White House readily concedes that Defense Secretary Robert Gates already had proposed much of this as part of a new, and bigger, Defense budget that he is seeking. Defense is growing, not shrinking.
Funny how a recent Rasumussen Report just showed the majority of Americans do not believe the unions or the government will manage the auto industry well.
Another funny side note: Bush actually cut more from the budget than Obama.
President Obama announced fewer budget cuts and for a lesser dollar amount than President George W. Bush did in his final budget – and is counting on being able to eliminate some programs that his predecessor repeatedly tried, but failed, to slash.
Obama administration officials said they’re convinced they’ll have more luck eliminating programs such as Even Start, an early childhood education program that Mr. Bush put on the chopping block year after year but which both Democrats and Republicans in Congress refused to cut.
Liberals are Going Nuts Over the Chrysler Threat Allegations (Perella Weinberg)
The left-wing blogosphere is all a-twitter, no pun intended, regarding the allegations brought forth by Tom Lauria, the lawyer for Perella Weinberg. The allegations stated that several bondholders of Chrysler were threatened by members of the Obama administration and more specifically the car czar, Rattner. I reported earlier on what was said at the meeting, in Tom’s words, to his client.
Progressives are now making this into a “trumped up” charge put on by conservative political activists. In the hypocritical realm of the liberals, they now believe the fat-cats and greedy corporations over regular investors of a fund. The issue with liberals is: “If they didn’t have double standards, they wouldn’t have standards at all.”
It boggles the mind to see progressives deciding that because the White House and a corporation deny a charge, that the charge must be false. Imagine, for instance, these folks accepting a version of events simply because it had been put forth by the Bush White House and Halliburton. But this is exactly what Think Progress and Media Matters are doing. It’s as if their cognitive critical apparatus had simply stopped functioning sometime in January.
We think this is an important story, one that deserves further investigation. Critical questions raised by a credible professional about the conduct of those in high offices of the US government remain unresolved. Excoriating reporters who follow up on these questions doesn’t strike us as very progressive or thoughtful. It seems, rather, evidence of a kind of political mania that we’d all be better off putting aside.
Here’s the full statement by Perella Weinberg:
Suggestions have been made that the Perella Weinberg Partners Xerion Fund changed its stance on the Chrysler restructuring due to pressure from White House officials. This is incorrect. The decision to accept and support the proposed deal was made by the Xerion Fund after reflecting carefully on the statement of the President when announcing Chrysler’s bankruptcy filing. In considering the President’s words and exercising our best investment judgment, we concluded that the risks of potentially severe capital loss that could arise from fighting this in bankruptcy court far outweighed any realistic potential upside.
We have a very specific mandate from our investors, and that is to carefully weigh investment risks and rewards. It is not our investment mandate to pursue political or risky legal campaigns with our investors’ money. This was our assessment of investment risk and reward, nothing else.
While we did and still do believe that the lenders would be justified in pressing their objections under conventional bankruptcy law principles, we believe a settlement would now be in the best interests of all parties in the context of avoiding a drawn out contested bankruptcy litigation proceeding, and we encourage our colleagues in the loan syndicate to pursue this immediately.
This is just another example of favoritism, pay-to-play politics, and sheer cronyism. The UAW is one of the favored groups of the democrats and especially Obama, due to the donations he received from the UAW and other union groups for last year’s election.
Think carefully about what’s happening here. The White House, presumably car czar Steven Rattner and deputy Ron Bloom, is seeking to transfer the property of one group of people to another group that is politically favored. In the process, it is setting aside basic property rights in favor of rewarding the United Auto Workers for the support the union has given the Democratic Party. The only possible limit on the White House’s power is the bankruptcy judge, who might not go along.
Michigan politicians of both parties joined Obama in denouncing the holdout bondholders. They point to the sad plight of UAW retirees not getting full payment of the health care benefits the union negotiated with Chrysler. But the plight of the beneficiaries of the pension funds represented by the bondholders is sad too. Ordinarily you would expect these claims to be weighed and determined by the rule of law. But not apparently in this administration.
Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.
The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.
Update: Boston Globe Unions Agree to 5% Pay Cuts; NYT to Dump The Boston Globe; No Bailout for Newspapers
UPDATE:
Unionized employees at the New York Times newspaper on Monday ratified a 5 percent pay cut, according to a memo obtained by Reuters.
New York Times newspaper employees who are members of the New York Newspaper Guild voted 377 to 36 to ratify the pay cut agreement, which includes 10 additional paid days off, while Guild members at the Times’ digital unit ratified the agreement by a 50-0 vote, according to the memo.
The Guild members signed off on an agreement with New York Times management last week designed to save the newspaper $4.5 million.
It has been reported that the New York Times will rid themselves of their subsidiary, The Boston Globe.
Both papers are having trouble making ends meet and the New York Times must dump another paper line if it is to save some money.
Unions have a significant presence at newspaper companies and talks were underway to negotiate before making the final decision on the future of the paper.
Earlier today the Union representatives walked out during the talks. However, it appears that the negotiations may resume a little later today or tomorrow.
The Boston Globe and its biggest union are “taking a break” until later Monday or Tuesday on talks about concessions that parent company The New York Times Co says are crucial to save the newspaper.
The union and management suspended discussions early Monday morning. They have not set a time or location for the next round of talks, a source familiar with the matter, but unauthorized to discuss it, told Reuters.
The Times Co had set midnight Sunday as the deadline to extract $20 million in cost cuts from its unions to avoid closing the Globe, which it said could lose up to $85 million this year.
The Times stepped up pressure on the unions, saying it planned to file notice with the U.S. government that warns it could shut the paper down in 60 days. Negotiations on cost cuts could continue even after that filing.
I personally think that if the paper cannot sell in this market and model its reports to be middle of the road, rather than liberal and biased, then it deserves to go under. Free markets dictate that those companies who make poor business decisions will not stay in business.
Thankfully, at this moment in time, the Obama administration does not plan on bailing out the newspapers:
