Whose Economy Gets Stimulated?Transcript
of comments during the Florida Republican Debate, January
24, 2007
Mike Huckabee: "But let me speak
to the really heart of what I think a lot of Americans are
concerned about with the economy and, frankly, in talking
about the stimulus package.
"One of the concerns that I
have is that we'll probably end up borrowing this $150
billion from the Chinese and when we get those rebate
checks, most people are going to go out and buy stuff that's
been imported from China.
"I
have to wonder whose economy is going to be stimulated the
most by the package."
--Comment: China now owns more than $380 billion of
US Treasury obligations, and foreign interests control
about 45% of the current $5.2 trillion of publicly held
national debt, up from 30% in January 2001 ($2.34
trillion as of 11/2007 vs. $1.01 trillion as of
01/2001). See
Major Foreign Holdings of US Public Debt.
US national
debt now exceeds $9.2 trillion, up from $920 billion in
January 1981 when President Jimmy Carter left office,
up tenfold in a generation, including $3.5
trillion in new national debt in only seven years
since January 2001, plus another likely $600 billion
before President George Bush leaves office in 2009.
How can anyone believe such a trend is sustainable?
Are we now a
"Blanche DuBois" nation: "dependent upon the
kindness of strangers" to keep our consumer economy, and
our empire, afloat?
Daily
calculation of US national debt, see
U.S Treasury Debt to the Penny at Treasury Direct.
01/08/2008
January 08, 2008:
Plan Would
Let Seniors Work to Pay Taxes
Tuesday December 25, 1:38 pm ET
By Jim Fitzgerald, Associated Press Writer
NY Town
Wants to Start Program to Let Senior Citizens Work Off
Property Taxes, for $7 an Hour
GREENBURGH, N.Y. (AP) -- Audrey Davison lives alone, gets a
$620 Social Security check each month and worries about the
sharply rising taxes on her four-bedroom house. Davison, 76,
raised her family there and after 43 years, she really
doesn't want to leave Greenburgh.
Greenburgh doesn't want her to leave, either.
The town is pushing a program that would let seniors work
part-time, for $7 an hour, to help pay off some of their
property taxes.
"People shouldn't have to sell their house, move away to a
place with less taxes, leave behind their family and
friends," said Town Supervisor Paul Feiner.
He envisions retired doctors mentoring schoolchildren,
retired accountants helping with the town's finances,
retired lawyers offering their services for a discount. But
there are plenty of less-skilled jobs that need doing, he
said.
"It's not like we're going to see grandma running the
snowplow," he said. "There are lots of things people can do
for the town and it wouldn't cost us that much to pay them."
The proposal has caused a stir in Greenburgh, a town of
90,000 in Westchester County, which has the nation's
third-highest homeowner property taxes. The plan would be
unusual if not unique in New York, but similar programs are
considered successes in Colorado, Massachusetts, South
Carolina and elsewhere.
Davison, who suffers from arthritis and sciatica and needs a
walker to get around on her bad days, said she pays about
$12,000 a year in property taxes -- perhaps $2,000 to the
town -- and has already taken out a reverse mortgage to pay
her bills.
Talking to Feiner last week at the town senior center, she
said, "I would work as long as it was a job where I could
sit."
"You could be a receptionist!" Feiner said. "You could greet
people right here, when they come in."
"That I would love," Davison said.
Scott Parkin, spokesman for the National Council on Aging,
said the program sounded interesting, as long as it wasn't
limited to menial work. "It's certainly in line with what we
stand for, keeping seniors involved in work or volunteering
as a part of healthy aging," he said.
Boulder County, Colo., pioneered a tax workoff program in
1986 for residents over 60 and now has about 250 applicants
for the fewer than 100 openings, said spokeswoman Barbara
Halpin. The work done by the seniors includes landscaping,
gathering climate data, clipping newspapers and staffing the
courthouse information booth.
"Taxes aren't that high out here, so even at $7 an hour
people can burn off their county taxes pretty quickly,"
Halpin said. She added that many stay in the program as
volunteers after paying off their taxes.
In Concord, Mass., Maria Casey of the personnel department
said about 10 seniors get $8.50 an hour to work at research,
data entry and groundskeeping. The program, started in 1999,
"allows seniors to be able to work and be involved in the
community, and the town benefits by their work," she said.
Feiner is suggesting creating about 25 slots for seniors and
letting them work off $500 or so a year. His proposal faces
some obstacles. If the wages earned are to be tax-free and
directly credited to the property tax bill, the state
Legislature would have to approve. In addition, unions would
have to be convinced that the program is no threat to their
members' job security.
Feiner is hoping for at least a pilot program next year.
Eventually, he said, he would like to see the county and the
local school districts adopt similar plans.
"If we got seniors working for the schools, there might be a
more intergenerational feeling there," he said. "It might be
easier to pass the school budgets."
Janet Goodman, a retired teacher and travel agent who was
leading a knitting class at a Greenburgh community center,
said paying the bills at her town house in Hartsdale, one of
Greenburgh's seven villages, is "a constant struggle." She
said she would gladly take part in a tax workoff program "as
long as the work is interesting."
"You have to be creative," she said.
08/12/2007
August 12, 2007: U.S. Lifespan Keeps Slipping, Now
42nd in World
By the Associated Press -
Link to Full Story
Americans are living longer than ever, but not
as long as people in 41 other countries.
For decades, the United States
has been slipping in international rankings of
life expectancy, as other countries improve
health care, nutrition and lifestyles.
Countries that surpass the
U.S. include Japan
and most of Europe,
as well as Jordan,
Guam and the
Cayman Islands.
"Something's wrong here when
one of the richest countries in the world, the
one that spends the most on health care, is not
able to keep up with other countries," said Dr.
Christopher Murray,
head of the Institute for Health Metrics and
Evaluation at the
University of Washington.
A baby born in the United
States in 2004 will live an average of 77.9
years. That life expectancy ranks 42nd, down
from 11th two decades earlier, according to
international numbers provided by the
Census Bureau
and domestic numbers from the National Center
for Health Statistics.
Andorra, a tiny
country in the Pyrenees mountains between
France and
Spain, had the
longest life expectancy, at 83.5 years,
according to the Census Bureau. It was followed
by Japan, Macau,
San Marino
and Singapore.
The shortest life expectancies
were clustered in Sub-Saharan Africa, a region
that has been hit hard by an epidemic of HIV and
AIDS, as well as famine and civil strife.
Swaziland has
the shortest, at 34.1 years, followed by
Zambia,
Angola, Liberia
and Zimbabwe.
Researchers said several
factors have contributed to the United States
falling behind other industrialized nations. A
major one is that 45 million Americans
lack health
insurance, while
Canada and
many European countries have universal health
care, they say.
But "it's not as simple as
saying we don't have
national health insurance," said Sam
Harper, an epidemiologist at
McGill University
in Montreal.
"It's not that easy."
Among the other factors:
• Adults in the United States
have one of the highest obesity rates in the
world. Nearly a third of U.S. adults 20 years
and older are obese, while about two-thirds are
overweight, according to the National Center for
Health Statistics.
"The U.S. has the resources
that allow people to get fat and lazy," said
Paul Terry, an assistant professor of
epidemiology at
Emory University in
Atlanta. "We
have the luxury of choosing a bad lifestyle as
opposed to having one imposed on us by hard
times."
• Racial disparities. Black
Americans have an average life expectancy of
73.3 years, five years shorter than white
Americans.
Black American males have a
life expectancy of 69.8 years, slightly longer
than the averages for Iran and
Syria and
slightly shorter than in
Nicaragua and
Morocco.
• A relatively high percentage
of babies born in the U.S. die before their
first birthday, compared with other
industrialized nations.
Forty countries, including
Cuba,
Taiwan and
most of Europe
had lower infant mortality rates than the U.S.
in 2004. The U.S. rate was 6.8 deaths for every
1,000 live births. It was 13.7 for Black
Americans, the same as
Saudi Arabia.
"It really reflects the social
conditions in which African American women grow
up and have children," said Dr. Marie C.
McCormick, professor of maternal and child
health at the Harvard School of Public Health.
"We haven't done anything to eliminate those
disparities."
Another reason for the U.S.
drop in the ranking is that the
Census Bureau
now tracks life expectancy for a lot more
countries � 222 in 2004 � than it did in the
1980s. However, that does not explain why so
many countries entered the rankings with longer
life expectancies than the United States.
Murray, from the
University of
Washington, said improved access to
health insurance could increase life expectancy.
But, he predicted, the U.S. won't move up in the
world rankings as long as the health care debate
is limited to insurance.
Policymakers also should focus
on ways to reduce cancer, heart disease and lung
disease, said Murray. He advocates stepped-up
efforts to reduce tobacco use, control blood
pressure, reduce cholesterol and regulate blood
sugar.
"Even if we focused only on
those four things, we would go along way toward
improving health care in the United States,"
Murray said. "The starting point is the
recognition that the U.S. does not have the best
health care system. There are still an awful lot
of people who think it does."
Source: Associated Press,
August 12, 2007
07/12/2007
July 12, 2007: Fake Firm Gets Nuclear License in
Government Sting
WASHINGTON (Reuters) -
Undercover investigators, working for a fake firm, obtained
a license to buy enough radioactive material to build a
"dirty bomb," amid little scrutiny from federal regulators,
according to a government report obtained on Wednesday.
The U.S. Nuclear Regulatory
Commission issued the license to the dummy company in
just 28 days with only a cursory review, the
Government Accountability Office said in a report to
be released on Thursday.
The GAO, which set up the
sting, said the NRC approved the license after a couple of
faxes and phones calls and then mailed it to the phony
company's headquarters -- a drop box at a United Parcel
Service location.
"From the date of application
to the issuance of the license, the entire process lasted 28
days," the GAO said. "GAO investigators essentially obtained
a valid materials license from the NRC without ever leaving
their desks."
The NRC oversees the U.S.
nuclear industry and nuclear material safety issues.
The GAO report said its
undercover agents made counterfeit copies of the license,
changed the wording to remove restrictions on how much they
were allowed to buy and then ordered enough radiological
materials to build a dirty bomb.
The GAO, a nonpartisan
investigative arm of Congress, said its investigators did
not take possession of the radiological materials.
U.S. officials have warned
that militant groups, including
al Qaeda, could use conventional explosives and
material from sources as common as hospital X-ray
departments to build so-called dirty bombs that could spread
radioactive waste across urban centers.
The GAO sting was requested
by a Senate panel that has been exploring post-September 11
security gaps in the U.S. government's regulation of
radioactive material.
The senior Republican on the
panel,
Sen. Norm Coleman of
Minnesota, said the panel found the NRC was issuing
licenses for "dangerous" level materials before visiting
facilities making the applications.
"The NRC's first visit to the
facilities could be up to one year after the license was
issued. That's like handing out a gun license and waiting a
year to do the background check," Coleman said in a
statement.
The GAO recommended the NRC
improve its process for examining license applications for
radioactive materials and explore ways to prevent the
counterfeiting of licenses.
Source: Reuters 07/12/2007
Top
06/01/2007
June 1, 2007: Ethanol Boom May Fuel Shortage of
Tequila
As
ethanol demand has pushed corn prices higher, Mexican
farmers now are cashing in by setting ablaze their fields of
blue agave, the cactus-like plant grown for tequila, and
re-sowing the land with corn.
(Full story here.)
The switch to corn will
contribute to an expected
scarcity of agave in coming
years, with officials
predicting that farmers will
plant between 25 percent and
35 percent less agave this
year to turn the land over
to corn.
"Those growers are going
after what pays best now,"
said Ismael Vicente Ramirez,
head of agriculture at
Mexico's Tequila Regulatory
Council.
The law of unintended
consequences will make cheap tequila a thing of the past as
less blue agave acreage drives up the worldwide cost of our
favorite margarita-making ingredient.
Source: Reuters and MSNBC
05/29/2007
05/19/2007
May 19, 2007: Vladimir Lenin and the Moscow Investment
Bankers
Moscow:
Within a mile of the tomb of Vladimir Lenin, who vowed to
destroy capitalists, investment bankers in Moscow are
now earning double the pay of their counterparts anywhere
else. Dealmakers are offered $7 million
and more a year, industry recruiters said.
In
New York, managing directors who
arrange corporate mergers and stock and bond sales typically
get $2 million to $3 million. "This market is hot, hot, hot,
and if you want to keep top talent, you have to pay big,"
according to an industry recruiter.
Source: Bloomberg Financial
News and Doug Nolan's Credit Bubble Bulletin
Top
04/14/2007
April 14, 2007:
Border Fence Contractor Fined for Hiring
Illegal Aliens
SAN DIEGO ---- In what may be
the first case of its kind in the federal court in San
Diego, one of California's largest fence-building companies,
its founder, and a vice president were sentenced Wednesday
to probation and large fines for knowingly hiring illegal
immigrants.
Melvin Kay Jr., 64, who founded Golden State Fence Company,
and Michael McLaughlin, 42, Kay's son-in-law and a company
vice president, also were sentenced to six months of home
confinement and more than 1,000 hours of community service
within the next two years.
After an immigration check in
1999 found undocumented workers on its payroll, Golden State
promised to clean house. But when followup checks were made
in 2004 and 2005, some of those same illegal workers were
still on the job. In fact, U-S Attorney Carol Lam says as
many as a third of the company's 750 workers may have been
in the country illegally.
Golden State Fence built
millions of dollars' worth of fencing around homes, offices,
and military bases. Golden State's work for the
government included work on a border fence between San
Diego and Mexico in 1997, although it was not alleged
the company hired undocumented workers for those contracts.
Golden State, which is based
in Riverside and has a branch in Oceanside, was ordered to
forfeit $4.7 million to the U.S. government. That total
represents the amount of profit the government believed the
company derived through its use of undocumented workers from
1999 through 2005. Kay was ordered to pay a $200,000 fine,
and McLaughlin must pay a $100,000 fine.
KH Comment: Res ipsa
loquitur. The thing speaks for itself.
Having said that, illegal immigration will be stopped only
when employers are prevented from or punished when hiring
undocumented workers. Employers will be prevented from
hiring illegal immigrants only when a real-time
identification database is made available by the government
to validate the hiring process at time of application. Our
government currently has no interest in this solution as it
would cause significant economic and social disruption. (See
my essay
Immigration Nation.)
Source: Wire reports, March 30, 2007 through
April 5, 2007)
Top
04/02/2007
April 2, 2007:
New Clarity from an Old Obfuscator (Almost)
After nearly two decades of perfecting the art of language
obfuscation, former Federal Reserve Chairman Alan Greenspan,
with his usual sparks of sanguinity and elan, suddenly is
speaking very clearly.
In
comments to conference attendees in Hong Kong in late
February, Greenspan boldly suggested economies are
cyclical and that all things considered, given the
duration of the current U.S. expansion, we could be seeing
early signs “we are in the later stages of a cycle.”
Which translates to a one-in-three chance of recession by
year's end or early 2008 according to the Maestro of money,
forgoing his usual indecipherable blather.
World financial markets, unfamiliar with such clarity,
responded by swooning, the Dow Jones Industrial Average
shedding more than 450 points intra-day, proving the old
obfuscator still strikes fear into the minds of traders
everywhere.
Also clear, mostly, were the 81-year-old former Fed chief's
remarks at the Futures Industry Association meeting in Boca
Raton on March 15th, addressing the likelihood of
negative economic consequences as a result of developing
subprime mortgage lending fallout.
Much of the strength in consumer spending over the past five
years can be traced to capital gains on surging housing
prices, whether realized or not,
according to Greespan
(emphasis mine).
If
home prices (nationally) drop in a year, that could cause
problems “to spill over into other areas (of the economy),”
Greenspan noted, since consumer spending fuels two-thirds of
the nation's economic activity, adding, “At the moment,
we're not seeing this.”
But, slipping into characteristic ambiguity, he suggested if
home prices “would go up 10 percent, the subprime mortgage
problem would disappear.”
Comment - Huh?! Presumably the brewing subprime problem
would “go away” in the sense that unqualified borrowers
faced with dramatically escalating monthly payments
resulting from interest-rate resets would be able to sell
their price-inflated homes to other, more creditworthy
buyers, should those buyers exist, and thus avoid late
payments or default. Mr. Greenspan did not elaborate, nor
did he offer suggestions for new living arrangements for
subprime borrowers forced to sell their homes, in some cases
after only a few months of “ownership.”
Interestingly, Mr. Greenspan of all people, economist he is,
would know housing prices (like stock prices) cannot
continue rising at a rate more than double the rate incomes
increase, or at least not very long. We may be at that
point where the "not very long" is now.
More ominously, Greenspan, again without benefit of verbal
camouflage, accurately observed the strength of the U.S.
economy has resulted from busy consumers who have benefited
from capital gains on surging housing prices, whether
realized or not.
"Realized or not" is the
important part: Homeowner “A”, let's say, sold an 1,100
square foot Southern California fixer-upper in 2003 for
$700,000, clearing, let's say, $600,000 on the sale and
moved to Albuquerque and bought a 2,200 square foot home for
$300,000, still presumably have $300,000 left over to save,
invest or spend to prop the consumer economy. That $300,000
is a realized gain.
Homeowner “B”, who bought “A's”
house in 2003 for $700,000, took out a $200,000 home equity
loan in 2005 based on an appreciated appraised value of
$900,000, and used the borrowed $200,000 to update and
redecorate it, send junior to college and buy a boat and a
motor home, based all those expenditures on $200,000 of
unrealized gains, which now likely never will become
realized gains because the neighbor across the street with a
nearly identical house can't sell it a $600,000. The
unrealized gain evaporated, but the $200,000 of additional
debt remains.
Does any part of this scenario
sound like late 1999-early 2000, when market indices stood
at record highs and unrealized stock market gains had
made everyone wealthy, at least on paper. How quickly those
unrealized market gains disappeared, leaving, in many cases,
only the margin debt or loans owed to brokerage firms and
banks which had extended credit based on those lofty equity
values.
The downside, of course, to
which Mr. Greenspan alluded, is that subprime woes do, in
fact, spill over to other areas of the economy in a great
unwinding of the debt-driven consumer culture of the last
two decades, becoming a vicious circle of collapsing housing
prices, home sales and foreclosures, layoffs and
bankruptcies.
Source: Wire reports, February
27, 2007 through March 17, 2007)
Top
11/14/2006
November 14, 2006:
In 1991, shortly after the end of Desert Storm and the
liberation of our oil-bearing friends in Kuwait, the U.S.
Secretary of Defense stated why "going to Baghdad" was a
bad idea.
"Once you've got Baghdad,
it's not clear what you do with it," the secretary told the
New York Times. "It's not clear what kind of government you
would put in place of the one that's currently there now
(Saddam Hussein). Is it going to be a Shia regime, a Sunni
regime or a Kurdish regime? Or one that tilts toward
the Baathists, or one that tilts toward the Islamic
fundamentalists? How much credibility is that government
going to have if it's set up by the United States military
when it's there? How long does the United States military
have to stay to protect the people that sign on for that
government, and what happens to it once we leave?"
Good questions, the answers
to which, to our great regret, we now know. We also
know in 1991 the Secretary of Defense was none other than
Dick Cheney, our current vice president, who presumably
forgot those rhetorical questions in 2002 when the subject
of liberating Iraq was being discussed at the seat of power
in our nation's capital. As is clearly evident,
nothing changed in those nearly dozen years.
Source: George Will,
"Costly 'Irrational Exuberance'" 11/12/2006
and the New York Times, 1991. Somehow a particularly
bad idea in 1991 became a government policy of preemptive
regime change in 2002 which has led to thousands of deaths
and injuries of soldiers and civilians and financial cost
approaching $400 billion. Now what?
Top
11/02/2006
November 02, 2006: Today, the U.S. stands preeminent among all nations
in treating people like caged animals. According to statistics
provided to the
BBC by the International Centre for Prison Studies, 724 people
per 100,000 are imprisoned in the U.S., overwhelmingly trumping even
increasingly authoritarian Russia, the world's second-ranked prison
power, who's rate of caging humans is only 581 per 100,000.
All told, the U.S. now has 2,135,901
prisoners in domestic detention facilities, alone -- several
hundred thousand more than are imprisoned in both China and
India, the world's two most populous countries, combined.
Of these people, 192,198 are imprisoned in federal
facilities -- though just 5.3% of them for the violent
crimes of most people's nightmares: homicide, aggravated
assault, kidnapping, and sex offenses. Instead, most -- 53.6
% -- are locked up on (often small-time) drug charges.
(Source:
"American Prison Planet: The Bush Adminstration as Global
Jailor," by Nick Turse, posted 11/02/2006 to
TomDispatch.com, Copyright 2006 Nick Turse. This
article discusses the extent of America's growing global
(and domestic) capability to detain and "render" anyone it
chooses, perhaps greater than possibly can be imagined given
a president's new powers to declare martial law and use
federal troops and federalized national guard troops at the
commander in chief's discretion under a provision of "The
John Warner Defense Authorization Act of 2007" signed by
President Bush on October 17, 2006. That provision allows a
president to declare a ‘public emergency' (such as Hurricane
Katrina, a 9/11-like terrorist attack, an avian bird flu
epidemic) and station troops anywhere in America and take
control of state-based National Guard units without the
consent of the governor or local authorities, in order to
‘suppress public disorder.')
Top
10/18/2006
October 18, 2006:
After missing 2005 recruiting goals, the U.S. Army has introduced a
new advertising campaign, "Army Strong," which replaces the "Army of
One" campaign it has used for six years. It also has made
changes in the basic training of new recruits. Drill sergeants
now are a kinder, gentler breed, having been ordered to act more as
"mentor" and "coach" to help trainees navigate the difficult
transition from civilian to soldier, which in turn has helped reduce
first-year washouts by 7 percent. (Still a third of all
entrants fail to complete their entire three- or four-year tour of
duty, half in the first year alone.) The old way of "talking
loud, and often" to get recruits' attention has evolved into "a more
counseling" type role to deal with today's generation. The
Army also has reduced its required minimum intelligence quotient
(IQ) for new recruits to cast a wider net among applicants.
(Hey there's a war going on. Maybe that has more to do
with career interest in the Army than does the current
advertising slogan or friendliness of mentoring drill
sergeants.)
Top
09/13/2006
September 13, 2006:
A Scripps Howard/Ohio University poll this summer found that 36% of
respondents think that it is very likely that U.S. government
officials assisted in the 9/11 attacks on New York and Washington,
or allowed them to happen, to create a pretext for war in the Middle
East. A similar conviction thrives in the Muslim world where
many believe that the attacks were a U.S.-Israeli plot to justify
war in Iraq and Afghanistan, and that Jews - who were in fact among
those killed in the attacks - had been secretly warned.
(Source: USA
Today editorial 09132006 headlined "Disturbing Delusions" in
which the unnamed editorial writer concluded that such views
suggest "a cynicism about the nation that is at least
disturbing and perhaps dangerous." I believe it
inconceivable that our generally inept federal
government actually could have planned and orchestrated the
9/11 attacks, but the conspiracy theories do reveal the
depth of government mistrust, as evidenced by this survey.)
Top
09/11/2006
September 11, 2006:
U.S. Senate candidate Katherine Harris, who as Florida's Secretary of State in 2000 was instrumental in
helping George Bush secure the presidential election, tells
a Baptist audience that separation of church and state is "a lie we
have been told." Moreover, according to Harris, "God
is the one who chooses our rulers."
(Source: Ana Marie Cox,
Time Magazine 09112006. Looks like voters and, when
necessary, the Supreme Court, no longer are necessary.)
Top
09/11/2006 #2
September
11, 2006: "No more 'God-is-on-our-side' religious
nonsense." Salt Lake City's mayor, Rocky Anderson, a
Democrat, addressing an antiwar rally a day before President
Bush visited the Utah capital.
(Source: Time Magazine 09112006.)
Top
08/22/2006
August 22, 2006:
The state of Arizona, in a bid to boost declining voter
turnout, is considering awarding a prize of $1 million to a
lucky voter who casts a ballot on November 7th. The
prize will come from a pool of unclaimed lottery winnings.
(If the Arizona plan is
successful in registering more voters and getting them to the polls,
election officials may propose a similar bribe prize to
encourage better turnout in national elections. Oh,
and maybe open bars at each polling place.)
Top
08/08/2006
August 8, 2006:
New Data from the
U.S. Bureau of Economic Analysis confirm that the average
federal civilian worker earns more than $106,000 in total
compensation, or twice the $53,000 in wages and benefits for
the typical private worker. In 1950, that ratio was
1.2, in 1990 1.5, and in 2006, it is now 2:1. In 2005,
federal wages rose 5.8% compared with 3.3% in the private
sector.
(When everyone decides to work for the federal government
because of the great compensation plan, who will be left to
pay taxes to fund that great compensation plan?)
Top
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