Budgetary Games That Would Shame a Greek
One element of Obamacare, the CLASS program (a long term care program) has flatlined. HHS Secretary Kathleen Sebelius, officially acknowledged what had been known since the get go: the program was not economically feasible. So she pulled the plug.
CLASS was one of the myriad pieces of legislative-financial legerdemain used to make believe that Obamacare would actually reduce future deficits.
The budgetary impacts of Obamacare were made up out of the whole cloth: CLASS was just the most egregious example of that. To create the fiction that Obamacare would save money, Congress and the administration resorted to budgetary and accounting tricks that were so outrageous that even the Greeks would have blanched at the thought of using them when presenting their fiscal numbers in to qualify for the Eurozone.
Yes. That bad.
Obamacare is not only a policy disaster, it is a fiscal time bomb. One would hope that the premature detonation of CLASS will put Congress and the country on warning, and result in the defusing of the rest of the whole dangerous mess. That, unfortunately, will have to wait until January 2013, at the earliest.
You may take comfort in my prediction that Obama will lose.
Comment by Sublime Oblivion — October 15, 2011 @ 3:58 pm
Alternatively, you may be disturbed by mine that he will beat whoever the Republicans choose to shove, stumbling, into the ring, without breaking a sweat. Mitt Romney is the most likely golden boy, although evangelicals loathe him, and he got stinking rich by breaking up companies that employed Americans and selling the pieces at huge profits, unemploying those Americans. Hardly an ethic that should endear him to the common folk, although one never knows with the American electorate.
Maybe not every initiative Obama proposed has borne fruit as hoped. But the avalanche of job losses stopped as soon as he took over and slowly reversed. There are still too many without jobs, although absent Republican obstructionism there might not be, but the trend under Bush was a steadily worsening disaster and McCain’s recipe was more of the same.
Comment by Mark — October 15, 2011 @ 5:05 pm
A few months is a lifetime in politics, but one issue that Obama faces is himself. There seems to be no one elected President that I can think of that had less sense of effective legislative politicking than this man – and I am including Millard Filmore, JQ Adams and Chet Arthur. No one on any side in active politics seems to like him – he has done nothing in getting projects through that didn’t involve throwing the pen open to the legislative hogs (2009), accepting fait acompli (2010), or putting up proposals like the Jobs bill that were dead before arrival(2011). His musings that it would be better or easier to be a dictator seems to make the argument that he thinks he should act as a philosopher king as per Plato. Two problems. He isn’t a philosopher and he is no king.
In other words, he is stunningly inept at the job of President, shown himself to be an ignoramus (“I don’t know how they say it in Austrian”), caused literally hundreds of deaths through incompetence (GunRunner, GrenadeRunner) and alienated everyone from the grass roots to the current crop of incoherent anarchists, communists and Nazis know doing their OWS thing. Only the stiffing effects of political correctness and the complete political correctness has prevented the lapdogs in the media from turning on him, and even those spineless dolts are beginning to wake up that their credibility is shot. It is probably too late for the democrats to wake up and cry, in the immortal words of Governor LePetomaine (Mel Brooks) “We have to do something to protect our phoney baloney jobs!” That no internal challenges have come out in the open speaks to the bankruptcy of that party, no matter how much of an Opera Buffo is being acted out by the Republicans in their primary process.
Comment by Sotos — October 15, 2011 @ 6:35 pm
“Maybe not every initiative Obama proposed has borne fruit as hoped. But the avalanche of job losses stopped as soon as he took over and slowly reversed.”
Indeed, this is somewhat disturbing. Our assiduous servant George W. arranged things rather better from Our perspective. After the very brief, very shallow recession in early 2001, economic growth resumed in July, but (and this was Our favorite part) private sector job losses continued for another two full years! During that happy time, all of the gains of economic growth was wrested from Labor and accrued to Capital, and then some, as employment and wages continued to decline. Now that was a good economy, and Our assiduous servants George W., Bill Frist, Denny Hastert, and Tom Delay worked without cease for Our benefit. Taxes were cut, regulations slashed, unions were squeezed, and private sector empolyment and wage incomes declined satisfyingly. Good times!
Though he tries hard, Our assiduous servant Barack is not advancing Our interests quite as fast as Our assiduous servant George W. did.
Comment by a — October 15, 2011 @ 8:59 pm
SCARE 20.12.2012
(Stop Corruption and Repression Effective 20.12.2012)
Banks were given a very important privilege to create more in the form of extending credit. This function requires diligence and careful consideration in regard to individual credit risks as well as to overall credit levels in the system. The financial crisis revealed that the banks were operating at too high a leverage and with too much risk. They were used to be saved by the Central Banks and certain that in times of difficulties the Central Banks were there to save them. They were like trained dogs and their master Greenspan or Bernanke would always be there to rescue them when unforeseen difficulties arose.
That may be true but that does not absolve them from their obligation to monitor overall debt levels in the system as well as being diligent in evaluating the debtors ability to not only service a debt but to be able to repay it over time. The banks clearly failed in this function that is the core function of banking but focused mainly on their compensation packages. The way these bankers enriched themselves in the process of driving the financial system into a wall was appalling and the average income earner was never able to comprehend their schemes but preferred to simply ignore them. Of course, the bankers explained their outrages income levels with free market principles of supply and demand, where the best simply could be hired with those kinds of benefits only. In hindsight those superior managers seem to have missed their mark considerably. The most interesting aspect of all of this is the fact that, after we have been more than 3 years in this financial crisis, the bankers continue to loot the system as if nothing ever happened.
True to form the Central Banks “saved” the financial system by saving those great financial institutions without whom the system would have collapsed, as was argued. Hardly were we out of the danger of collapse, the banks immediately went back to their old ways and were certain that this was a problem that would occur just once in a lifetime and now all was clear again. The real problem, however, had not been addressed but had simply been muddied.
In actuality, the losses produced of extending unsustainable levels of credit by the banks have been transferred to the public. Different ways were chosen to achieve this task in the form of free money for the banks, injection of government funds into some institutions, increase of basic money supply and so on.
The threat of system collapse would have been labelled blackmail if it would have occurred in another setting. However the bankers were able to influence the media, the legislators and regulators in their favour with all the financial resources available to them. Nobody was made to take any responsibility and no one was taken to account.
This represents a serious violation of the spirit of the Rule of Law that is the basis of western society. It seems that now the new rule is Might is Right. This changes many parameters in the compass of the social system within the western world. No one can be sure on what level and when one will be subjected to the financial abuse of those elites. Presently, the people in charge are trying to enhance financial repression of which one form is to keep interest rates below the level of inflation which affects mainly those that lived within their means over the past many years; another clear violation of the spirit of the Rule of Law as it transfers losses from bad investments to the innocent and decent part of the population. In addition, the increased level of government debt puts in doubt all those benefits promised by governments the world over.
It is interesting how the banks were able to confuse the public that they are unable to grasp the actual situation. But considering their great financial resources, it seems not that much of a miracle to influence the media and the legislator and having politicians do their bidding. The question is what the heck can WE, THE PEOPLE do about it.
Usually, we could address such things on a political level as we are a democracy, right? But it seems that the system has been corrupted by all the money sloshing around and it is extremely difficult to find any electable person that will act against those powerful interests. In addition, it will take many years until sufficient numbers of persons with the new thinking and with integrity not to be corrupted by those lobbying efforts will be elected to office that will implement the changes needed. So, what should we do? Start a revolution?
Well, the blackmail used by the banks may be the only way to address the injustices that have occurred over the past few years. They showed us how to leverage one’s limited resources to achieve one’s goal. Therefore the following proposal to start the movement “SCARE 20.12.2012” should be seen in this context. The idea is that if by that time (20.12.2012) some serious injustices have been removed from the system, people start to withdraw their money from all financial institutions driving them into default. And it might work, because those who hesitate to support this threat may be left with no money as the banks will have to close down before all has been paid out.
Now, what demands are made if that scenario is to be avoided.
1. Bankers and past Bankers (all those working in the financial industry that earned in excess of $500k plus annually for more than 2 years during the past 15 years and this without any downside risk i.e. risk of financial losses, except the possibility of losing their job) have to be made personally accountable for their past activities and be removed from any such position that might directly or indirectly have influence on the money creation and lending aspects of the economy (this includes regulating agencies and politics) before 20.12.2012.
2. Present and past regulators have to be made personally accountable for their past activities and be removed from any such position that might directly or indirectly have influence on the money creation and lending aspects of the economy (this includes financial institutions and politics) before 20.12.2012.
3. Politicians that accept any financial support from institutions that are involved in the money creation and lending aspects of the economy will have to face a jail term of no less than 2 years without the possibility of parole.
When these 3 points are implemented before 20.12.2012, we the public will not destroy the financial system but support the way to find back to the RULE OF LAW and away from the idea of MIGHT IS RIGHT.
Comment by Linus Huber — October 16, 2011 @ 5:06 am
+++When these 3 points are implemented before 20.12.2012, we the public will not destroy the financial system but support the way to find back to the RULE OF LAW and away from the idea of MIGHT IS RIGHT.+++
Sounds like a threat to me.
General Pinochet says hello.
Comment by LL — October 16, 2011 @ 1:34 pm
“Sounds like a threat to me.”
On a small scale, it is. Utilizing customer deposits gives Us greater scope for action.
“General Pinochet says hello.”
Yes, We can call upon his sort to put down inconvenient demands as needed. We did appreciate his calling upon the good Professor’s intellectual forebears from the Chicago school to redesign the Chilean economy for Our benefit.
Comment by a — October 16, 2011 @ 6:08 pm
“2.Alternatively, you may be disturbed by mine that he will beat whoever the Republicans choose to shove, stumbling, into the ring, without breaking a sweat. Mitt Romney is the most likely golden boy, although evangelicals loathe him, and he got stinking rich by breaking up companies that employed Americans and selling the pieces at huge profits, unemploying those Americans. Hardly an ethic that should endear him to the common folk, although one never knows with the American electorate.”
Yes, we’ll take a flip flopping RINO with various contortions on abortion and nary a host of other issues caught on tape or the Godfather’s Pizza guy who’s never held elected office (but worked for a’s enablers at the Fed)…ANYONE but that crazy old Uncle in the attic who keeps muttering about the costs of America’s wars and the Federal Reserve.
Because I can only shudder at the massive cognitive dissonance that would settle over America’s GOP labelled but war-whoring class inside the Beltway — we might see Bill Kristol endorsing Obama, or Hillary/Kerry coming up up with some cockamamie excuse to attack Iran first like a halfwit used car salesman trying to knock off the Saudi Ambassador, if such occurrence looked even remotely possible…
Crickets from the good professor as usual when pointing out that the only candidate who embodies his libertarianism and Fed skepticism honestly is also the one who would quit all the empire building around Russia and the world.
Comment by Mr. X — October 17, 2011 @ 2:10 am
“His musings that it would be better or easier to be a dictator seems to make the argument that he thinks he should act as a philosopher king as per Plato…In other words, he is stunningly inept at the job of President, shown himself to be an ignoramus…”
I couldn’t agree more. Except we’re not talking about the same president. The one who claimed it would be easier to be a dictator isn’t president now.
http://www.buzzflash.com/analysis/2002/10/29_Dictator.html
Comment by Mark — October 17, 2011 @ 12:33 pm
God help us, could the two be alike!
Comment by Sotos — October 17, 2011 @ 4:08 pm
Sure. As much as chalk is like cheese.
Comment by Mark — October 17, 2011 @ 7:22 pm