At least from an economic point of view.  Because today the Federal Reserve will officially become the largest holder of U.S. Treasury debt in the world, followed closely by the Chinese and Japanese respectively; thanks to Mr. Bernanke's QE2 policy.  Now, Tyler Durden at ZeroHedge calls it the beginning of the Ponzi end; which may be just a bit hyperbolic.  Still, it does kinda seem like paying your mortgage payment with a maxxed out credit card.

There's a link to a very informative paper on inflation, published by the Von Mises institute, in the ZeroHedge post.  And stay tuned to POWIP for some upcoming installments/discussions of what quantitative easing is, and differing viewpoints of the effects it will have on our economy.

You know, kind of like a balance to all the joyful moments you'll be sharing with your family over the next few days :)

Rocketman

After voting for Clinton in my first two presidential elections, I had voted for Bush in 2000, but still considered myself a moderate.  I had considered myself moderate growing up, but only on the aggregate.  I can't think of a single issue on which I was "moderate," yet the combination of liberal and conservative opinions made me think of myself as moderate, if uncomfortably so.

As it was, my personal aversion to Al Gore, precipitated by his far left environmental loonacy and completed by the Clinton stench, led to my switch.  9-11, however, forced me to consider, for the first time as an adult, my views of foreign policy.  Before I knew what was happening, I discovered I was a neocon in favor of preemptive strikes, "nation building," and revisiting the whole idea of "just war."

This epiphany led me to further reevaluate my economic ideology as well.  Why not?  My entire belief system had been shaken to the core in a matter of three years, so it only made sense to take an outside look at the ideals that had been instilled into me throughout my youth.  Suddenly, I realized my views on unions, public schools, taxation, race relations, and free markets had drastically changed to the point where I felt George W. Bush was too liberal; or at least too acquiescent.

While I certainly can't call myself a 9-11 Republican; I do consider myself a 9-11 conservative.

Adam Wells

Living life at 84 mph and 7000 feet. All I ask is that you don't block traffic, act like a professional, and don't act all surprised when your actions have consequences. Oh, and don't complain about the refs; trust me, they don't care if your team wins or not.

Click on the link in the story for this video.

Not for what it will teach you, but, well, for the affirmation, baby !  Especially as of late, when, headed into the midterm election season we increasingly hear even larger  loads of horse hockey than usual and customary emanating from national politicians and the MFM punditry that carry their water. 

In this short film, by PJTV's Andrew Klavan, he points out the near delicious irony of our Present-dent adopting many of the Boooooooooooooosh! policies he lamented and decried during the 2008 campaign; and how the useful idiots in the legacy media applaud the very same policies they spoke of then, if mentioned at all, that is, in hushed tones of apprehension, dread, and absolute skepticism.  My personal favorite is when he cites 3 newspapers using the same verbage to hand-wring over a particular Bush policy; surely a case of journo-list prompting, non?

But, as always, Cap'n Ed put's it well when he observes:

Funny how all of those policies that Obama hated suddenly look a lot better once he got burned by his own. We’ll see if he learns the same lessons on economics, or at least on calendars and accountability.

Yeah, somehow, I think not.  Or at least he won't admit it.  I mean, yesterday while palavering on about the economy, jobs saved or created, blah, blah, blah, Obama couldn't resist the opportunity to trot out his go-to meme:

“They’re going remember the policies that got us into this mess as well,” Obama said, referring to the previous Republican administration. “And they sure as heck don’t want to go back to those.”…

In a word; Boooooooooooooooosh!  But, that's our Barry, a paragon of responsibility and virtue.  Instead of, "the buck stops here", his motto should be, "the buck never stops being passed".

I Blame Booooooooooooosh!

Wha-wha-wha...

Or, in a different neighborhood of la-la land, Harris and VandeHei at politico wonder aloud why their awesomely successful Present-dent isn't doing better in the polls?  Amazing, isn't it?  I guess they're of like mind with that putz Bill Press, and believe that the public is either too stupid, or spoiled, to be able to comprehend Obama's greatness.  Sure guys, whatevz...Keep telling yourselves that, because, we're not buying it...

Anyway, check out the video; it's good for a few chuckles, and a few facts as well.  Come for the validation, and stay for the epistemic closure !

And, as always, let us know what you think.

Rocketman

And what's the cause of the near soubling of the debt in that timeframe?  According to Reuters:

The U.S. debt has grown rapidly with the economic downturn and government spending for the Wall Street bailout, the wars in Afghanistan and Iraq and the economic stimulus.

Yep...Just as I noted the other day; it's because of the wars, don't you see?  Never mind that the combined cost of those actions are exceeded by the cost of the bailouts and the spendulus.  And surprisingly Reuters makes no mention of the dramatic increase in discretionary spending that resulted from the Democrats enacting their 15 year "wish list" of expenditures once the won! had ascended to office.  Nope, it's all because of Booooooooooooooosh! and his elective military campaigns-natch...

Nice try, but folks are wising up to this whole connivance.  They know that spending is out of control, and that the day of reckoning is near unless as a nation we begin to act responsibly and live within our means.

But I will hand it to the Obamacrats, they have dramatically increased the rate at which our tax dollars, as well as our children's and grand-children's, are squandered.  It's no mean feat to double the national debt in less than 2 Presidential terms, especially when it starts out at such a large number; remember, with the left percentages and multiples mean nothing, it's sheer magnitude baby!  And by that, their favorite measure to demagogue, I figure they will have increased the debt by nearly as much as all the preceeding administrations since our nations founding.

Is that change you can believe in ?  Or even believe?!?

Thanks to the 52% of voters who gave us this palavering putz President, and especially to all the RINOs, Brooks, Noonan, Buckley et al, and the entire MSM, who instead of being properly skeptical of the man with now avowed past, acted as a cheering section instead; the RINOs gave him cover from the right and helped sway the independents votes, because they too thought he was a good man...

[Update] Just as I suspected, the treasury projection not only assume that spending will in no way exceed the "sharp pencil" projections, based on budgeting, but also uses an unreasonably optimistic assumption that GDP growth will outstrip the historical average for the period of 1990-2009.  Tyler Durden at Zerohedge provides both the razor sharp snark as well as bone-crunching analysis:

In a nutshell, the attached report pretends to forecast US debt and GDP levels. What it doesn't pretend to do, is to be the work product of a variety of pathological liars. Even as Geithner anticipates US total debt to hit $19.6 trillion by the end of 2015, somehow, in some parallel universe, he also anticipates US GDP will rise at a 5% CAGR for the next five years! Total US GDP, which was at $14.2 trillion for 2009, is expected to ramp up by 2.7% in 2010, and then really put on the afterburners in 2011 through 2015, averaging almost 6% each year, and hitting a stunning $19.2 trillion in 2015. The ridiculousness of this assumption is beyond comprehension. And even so, total debt/GDP will still be over 100% per the government's baseline assumptions. Alternatively, if one assumes, as PIMCO does, a GDP growth rate of 1.5% for the next 4-5 years courtesy of the 10% unemployment "new normal", total debt-GDP will hit 126% in 5 years. And this obviously excludes GSE, SSN and Medicare off balance sheet debt. Lastly, the Treasury assumes that even with 100% Debt to GDP, the funding cost on US market debt in 2015 will be only 4.7%, compared to the 1990-2009 average of 5.9%.

The chart below shows the US Treasury's baseline estimate. Keep in mind total debt will realistically be much higher than what is projected here. One notable observation is that the Treasury assumes that Intergovernmental Debt (i.e. funding for trust funds such as SSN etc), will only rise at around 4.5% each year.  This is another chimera that will promptly blow up in the administration's face, now that SSN is net cashflow negative for the first time in history, and will need constant cash replenishment from the Treasury.

His post contains a really detailed analysis of the report, a link to the report itself, and more realistic projections.  It contains a number of charts and, as always, excellent explanation.  It's succinct, to the point, and a must read as the issue becomes more prominent in the political zietgeist.

I mean, if knowledge is power, this is the equivalent of nuclear weapons...

Rocketman

Germany was close to finalizing Monday a major package of government savings, which would likely cut social welfare benefits, slash public sector jobs, and raise taxes to tackle the budget deficit.

With the debt crisis undermining the euro, Chancellor Angela Merkel's government is determined to tackle Germany's deficit - which while among the smallest in Europe is still above the official EU limit.

Several other countries - notably Greece, Spain and Portugal - have already embarked on much tougher austerity drives.

Merkel brought together her Cabinet for a two-day meeting at the chancellery that started Sunday to discuss the package. She said as she went into the meeting that Germany can no longer live beyond its means, insisting "we can only spend what we take in."

If only we could have the same resolve and candor in Washington. Now, no one likes taxes being raised, and there are valid arguments, which will be explored here in future posting, that here in the US a flat tax, or a simplified tax like Paul Ryan suggests, would raise as much revenue as we do now without the need for people to jump through as many hoops nor the number of IRS employees to handle the returns.  But you have to admire her going to the root of the problem; too much welfare state largesse and too many public sector employees.  It sounds similar to what's going on here, no?

Of course, just like here we have the class warriors; only there they are happy to call themselves socialists or, you know, the "C" word:

Opposition politicians and union officials criticized the prospect of cutbacks on social spending.

The head of Germany's labor union federation, Michael Sommer, argued that Germany should increase taxes for the rich and introduce a financial market transaction tax to help narrow its budget gap.

This, coming from the same bunch that gets 6 to 8 weeks paid vacation yearly, unlimited paid sick leave, and beer breaks several times a day, at least at the Mercedes plants in Stuttgart that I'm familiar with.

So while Obama and the far-left Democrats are overtly running toward embracing the Euro-statist model for our government and economy, the Europeans are wising up to it's, ahem, unsustainablility.  All this coming on the back of recent revalations that not only is Obamacare going to "bend the cost curve" in the undesirable direction of higher costs (thanks for telling us after the fact, CBO), but at a time when even prominent, progressive, Keynsian economists like Bob Reich and Jeffery Sachs are admitting that the stimulus failed!

I ask you then, with our own debt set to match and surpass GDP in a relatively short time, and the European socialists finally realizing the crippling that such dept to GDP ratios have on their economies, why are we so committed to taking the same path?  When will the O!ministration stop insisting that we continue to take the proverbial long walk off of that short pier?

Rocketman

Teh Lightworker cometh!

I remember when the O!ministration promised to "pivot" and focus laser-like on jobs and the economy.  But these days, I'm starting to wish that the lightworker could at least focus laser like on reality!  In suburban Maryland, just outside DC, Obama chose to use a local small business for his latest public palaverings; hailing the BLS labor report, a statistical decrease in the unemployment rate, and-of course- remind us that "happy days are here again indeed".

President Barack Obama says the addition of 431,000 new jobs in May shows "the economy is getting stronger by the day."
The president says that even though the census jobs are only temporary, private sector hiring is growing, too.

Now I don't want to spoil the Presidents fun or derail his latest attempt at talking up the economy; or tell us how the stimulus saved us-again.  Nor do I take any satisfaction in the BLS data falling far short of the mark that many had etimated it at, between 600 to 700k.  I truly wish employment were growing, especially in the private sector, but that's just not the case.

As Jonah Goldberg points out at The Corner, and links to a more complete reference, not only did the number of private sector jobs increase pitifully compared to a month ago, but that overall participation in the workforce declined by a couple of ticks, to 65%, and that the decrease in the unemployment numbers was due to people leaving the labor force !

In fact, Tyler Durden at Zerohedge arrives at substantially the same figure, with respect to unemployment, of people being subtracted from the unemployment number by sifting through the BLS data and doing some simple arithmatic.

What's problematic for the White house is that prominent avowed Keynesian economists are starting to say that the economy is going south as well, such as former CLinton Labor Secretary Robert Reich; a gentleman I have had the pleasure of meeting a few times during my days in DC, and who generally speaks his mind whether part of the approved narrative or not.  And I'm certain, that his latest observations are definitely not! part of the script:

We’re falling into a double-dip recession.

The Labor Department reports this morning that the private sector added a measly 41,000 net new jobs in May. (The vast bulk of new jobs in May were temporary government Census workers.) But at least 100,000 new jobs are needed every month just to keep up with population growth.

In other words, the labor market continues to deteriorate.  

The average length of unemployment continues to rise – now up to 34.4 weeks (up from 33 weeks in April). That’s another record.

More Americans are too discouraged to look for a job than last year at this time (1.1 million in May,  an increase of 291,000 from a year earlier.)

Of the small number of jobs created by the private sector in May, many came from temporary help services.

Admittedly, he seems to be under the impression that the answer is...wait for it...More Stimulus! But while I disagree with that particular solution, as it makes it harder to reduce federal spending whith all of these stimulo-bucks being tossed about in the hopes that something will stick, I find it interesting that while Obama insists on the rose-colored, unicorn riding, interpretation, Reich is bold enough to speak the inconvenient truths.  Would that mean he's speaking TROOOOOOOOOOOF! to POW-AH!1!1!!eleventy?

And maybe as important is the question, when did Bob Reich become such a, well, you know...RAAAAAAAAACIST!

[Update] Jeff at Protein Wisdom has a post on the subject with a link to a  Bloomberg news piece that scrutinizes the numbers also.

Image courtesy of Jabberinwookie

Rocketman

Employment is up, wages are up, and job security is as firm as ever. Unfortunately, this is only true for federal government workers.

President Obama is presiding over the largest federal work force in decades. In the current fiscal year, the number of civilian workers will grow by 153,000, to 1.43 million. These are the only jobs Mr. Obama can legitimately claim to have created. Unfortunately, they are subsidized by deficit spending.

Federal positions are not shovel-ready make-work jobs, either. Working for Uncle Sam pays extremely well these days. Government employment used to be a calling, a career in which a sense of fulfillment from public service offset low pay and spartan working conditions. Not so today. According to a study by the Cato Institute, 2008 federal worker pay-and-benefits packages averaged $119,982. That's more than double the private-sector average of $59,909.

The ranks of the highest-paid federal workers are growing fast. A report in USA Today indicated massive growth in the number of pre-benefit six-figure federal salaries. For example, the number of people earning $170,000 or more in the Transportation Department went from one in December 2007 to 1,690 by June 2009. The average above-salary "performance bonus" for federal senior executives in 2008 was $14,831. We doubt these inflated salaries and awards are buying Americans the best government in history.

And Obama would prefer that they were unionized. Mickey Kaus:

In the past decade, LAUSD officials spent $3.5 million trying to fire just seven of the district's 33,000 teachers for poor classroom performance — and only four were fired, during legal struggles that wore on, on average, for five years each. Two of the three others were paid large settlements, and one was reinstated. The average cost of each battle is $500,000.

[W]e also discovered that 32 underperforming teachers were initially recommended for firing, but then secretly paid $50,000 by the district, on average, to leave without a fight. Moreover, 66 unnamed teachers are being continually recycled through a costly mentoring and retraining program but failing to improve, and another 400 anonymous teachers have been ordered to attend the retraining. [E.A.]

That's less than one attempted firing a year. Why? Mainly because firings---and the bad performance evaluations that precede them---are almost invariably contested by the union.

Meanwhile, in beggared California, a judge says that the Governator doesn't have the right to furlough state employees:

An Alameda County Superior Court judge Thursday ordered Gov. Arnold Schwarzenegger to halt thrice-monthly furloughs for tens of thousands of state workers, saying the administration overstepped its authority in approving the unpaid days off.

It's not unlike the extraconstitutional provision that Harry Reid wants to work into Health Care Reform that would require a supermajority to undo the work of a reconciliation minority, even though reconciliation was never designed to create a new entitlement. The relation of government to taxpayers in the United States has never been more abusive. Mother, may I?

Dan Collins

Dan Collins is a dude who blogs. He used to blog elsewhere. Now he blogs here.

Website - More Posts

Yet in the past 9 months, not only has the administration not fixed anything, they have made things much worse for anyone who isn't a Wall Street banker. Therefore, we are past the point where anyone in power still gets the benefit of the doubt and the process of taking back our country for all citizens must begin now.

This is why I think we must ask if U.S. Treasury Secretary Timothy Geithner is still the right person for the job. It has become clear recently that back in his previous role as New York Federal Reserve Governor, he unnecessarily gave billions of dollars of US tax money to banks and insurance companies with few strings attached. And it is now becoming clear that his lack of meaningful action is helping many of these same banks steal more by legalizing their most economically dangerous, socially destructive and self-enriching practices.

This is a powerful argument, written by someone who fully understands the nature and practical operation of the US Financial system, and not just another rant by a partisan Obama hater.  Indeed, Ratigan is currently host of an MSNBC show called "Morning Meeting".  Full disclosure: I never watch it, but know of Ratigan from other network exposure and his tome at CNBC.  Read the whole piece here, so you don't have to give Arianna Huffington the benefit of your traffic.

(H/T Zero Hedge)

Rocketman

It is uncertain how this will effect both the overall market and the customer base, specifically many retail suppliers, that would ordinarily rely on their credit lines to get through the upcoming holiday season.  And of much greater concern in Europe is CIT's involvement in a majority of the CDO's held, and what the effects the bankruptcy will have.  In fact, the only thing that we do know with any certainty right now is that the taxpayers will ultimately lose the 2.3 billion that was advanced to CIT, for which the US government held preferred stock as collateral, since all shares of common and preferred will ultimately be cancelled.

Right now, the market seems to be up, regardless of the filing yesterday, so as to what will ultimately happen, your guess is as good as mine.

Rocketman