More importantly, Muller is heading up the new Berkeley Earth Temperature Study, which will review and analyze all of the data on this subject starting from scratch. Unlike the Climategate cabal in Britain and in our NASA, the Berkeley group will share its data with all comers. Keep your eye on this; it will take time--years more than months probably--but may prove to be the thread that unravels the main prop of the climate campaign.
Federal Reserve policy makers are signaling they favor an abrupt end to $600 billion in Treasury purchases in June, jettisoning their prior strategy of gradually pulling back on intervention in bond markets.
“I don’t see a lot of gain to reverting to a tapering approach,” Atlanta Fed President Dennis Lockhart told reporters yesterday. “I don’t think that is necessary,” Philadelphia Fed President Charles Plosser said last month.
Central bankers, who next meet March 15, are about half way through their second round of bond purchases. To bring the program to a full stop in June, they must be confident that the economy is strong enough to endure higher long-term interest rates and rising expectations of an exit from the most expansive monetary policy in Fed history, said Dan Greenhaus at Miller Tabak & Co. LLC in New York.
“If this is a self-sustaining recovery that can withstand higher interest rates, then why not get the hell out?” said Greenhaus, Miller Tabak’s chief economic strategist. “Still, I am nervous about their ability to withdraw from this policy without broader disruptions.”
The Fed announced in November that it would buy $600 billion of Treasuries through June in a bid to boost the recovery and reduce an unemployment rate lingering near a 26- year high. The program, known as QE2 for the second round of so- called quantitative easing, followed $1.7 trillion of asset purchases that ended in March 2010.
Fed staff members, such as Brian Sack, the New York Fed official in charge of carrying out the bond buying, have argued the total amount, or stock, of securities the Fed has announced it will make has more impact on longer-term interest rates than the timing of those purchases. That’s a view now held by several members on the Federal Open Market Committee, including the chairman.The italicized paragraphs (my doing) above are key. We can hope that this signals that the parties in Washington have agreed, at least in principle, on significant deficit reduction, so that ordinary debt market mechanisms can finance the Federal deficit without the central bank adding to the money supply as it has been doing with quantitative easing. Presumably, it is a show of confidence in the economy. Of course, a year ago a similar show of confidence gave way to the summer slowdown and QE2. Will past be prologue?
“We learned in the first quarter of last year, when we ended our previous program, that the markets had anticipated that adequately, and we didn’t see any major impact on interest rates,” Fed Chairman Ben S. Bernanke told the Senate Banking Committee during his March 1 semiannual monetary-policy testimony. “It’s really the total amount of holdings, rather than the flow of new purchases, that affects the level of interest rates.”
Fed Vice Chairman Janet Yellen supported that perspective, saying at a monetary policy forum in New York last week that “the stock view won out over the flow view.”
The Fed is currently pumping about four billion dollars per day of funny money into the markets (mostly), which has turned stocks, bonds, and commodities into helium-filled balloons.
Turn off the helium-money all at once, and watch all those balloons turn into bricks. Except for gold and silver…maybe.
I’m no longer of the opinion that we’re going to hit new highs on the Dow. I think we’re pushing on a string now, and if they pull the puppet master’s strings, look out below.
The pension funds for state and local workers in the United States are understating the amount they will owe workers by $1.5 trillion or more, according to some economists who have studied the issue, meaning that the benefits are much costlier than many governments and taxpayers thought.
Doubts about government pension accounting have been voiced by analysts for years, but with shortfalls in state and local pension plans exacerbated by the recession, the push to refigure pension fund shortfalls has gained political momentum.
The trillion-dollar gap arises from the government method of accounting, which several experts say significantly underestimates the cost of future pension payments.
At press time, California was being governed under a state of economic “emergency” declared by Brown’s predecessor, Arnold Schwarzenegger, in light of a staggering $28 billion budget shortfall expected in the next 18 months.
It gets worse. Medium-term unfunded liabilities for government employee pensions are pegged by the Legislative Analyst’s Office at $136 billion—and that’s a lowball figure. Legislative analyst Mac Taylor acknowledges in his current fiscal outlook report that the estimate leaves out billions in funding shortfalls at the pension funds for public school teachers and University of California employees. In the next 10 years, taxpayers will most likely be on the hook for somewhere between $325 billion and $500 billion. (Over the past five years, state revenues averaged $94.5 billion per year.)
How did this happen?
California’s state and local governments employ somewhere between 1.5 million and 2 million workers, representing 4 percent to 5 percent of the state’s total population. When they retire, all of those employees are contractually entitled to generous pension benefits—so generous that, collectively, they can’t be paid even by a pension system that ladles out more than $20 billion a year and is one of the largest investment pools on Wall Street.
Federal data indicate how urgently we need reform: The unfunded liabilities of Social Security, Medicare and Medicaid already exceed $106 trillion. That's well over $300,000 for every man, woman and child in America (and exceeds the combined value of every U.S. bank account, stock certificate, building and piece of personal or public property).Uncloudy day on the budget front - Scott Johnson
The Congressional Budget Office has warned that the interest on our federal debt is "poised to skyrocket." Even Federal Reserve Chairman Ben Bernanke is sounding alarms. Yet the White House insists that substantial spending cuts would hurt the economy and increase unemployment.
Plenty of compelling examples indicate just the opposite. When Canada recently reduced its federal spending to 11.3% of GDP from 17.5% eight years earlier, the economy rebounded and unemployment dropped. By comparison, our federal spending is 25% of GDP.
Geithner freely conceded under questioning from Senator Sessions that the president's own budget calls for interest payments and obligations that are "excessively high" and "unsustainable."
If the United States were a company, what financial shape would it be in? And what would it make sense to do to put the company on a sounder footing?
...
First, the "bottom line:"
Slide 27:
As USA Inc. we have a continuing and enormous negative cashflow and negative net worth...effectively "in the hole" by negative $45 TRILLION!! [Ed.: So much for the insistent liberal theme that we're not broke.]
In comments on my post on Rand Paul and David Letterman, some commenters expressed interest in seeing the data on overall federal tax burden, not just the burden of the federal income tax. As it happens, the Congressional Budget Office reports such data. I would reprint their tables but I haven't yet figured out how to do that. So here is the link for 2006 data. Click on their data and you'll get an Excel spreadsheet that shows the following:
. The bottom quintile paid 4.3 percent of income in taxes,
. The top quintile paid 25.8 percent of income in taxes,
. The top decile paid 27.5 percent of income in taxes,
. The top 5 percent paid 29.0 percent of income in taxes, and
. The top 1 percent paid 31.2 percent of income in taxes.
In other words, it's still the case that the higher your income, the higher a percent of your income you pay in taxes.
This page contains CBO's most recent estimates of federal effective tax rates (taxes as a percentage of income) across household income groups for the four largest sources of federal revenues--individual income taxes, social insurance (payroll) taxes, corporate income taxes, and excise taxes--as well as the total effective rate for the four taxes combined. The page also contains estimates of average before- and after-tax household income, counts of households, and shares of taxes, income, and households for each income group; information relating to the methodology used to construct the estimates; supplementary estimates for different household types; and a comparison of income and payroll taxes.
It should be noted that Freeman doesn’t claim that outside forces were responsible for the major factors of the economic crisis, namely the subprime mortgage fiasco, but that these outside forces might have intentionally helped things along. The report identifies three key stages in this possible economic attack:
- The first phase was a speculative run-up in oil prices that generated as much as $2 trillion of excess wealth for oil-producing nations, filling the coffers of Sovereign Wealth Funds, especially those that follow Shariah Compliant Finance.
- The second phase appears to have begun in 2008 with a series of bear raids targeting U.S. financial services firms that appeared to be systemically significant.
- The risk of a Phase Three has quickly emerged, suggesting a potential direct economic attack on the U.S. Treasury and U.S. dollar.
“There is sufficient justification to question whether outside forces triggered, capitalized upon or magnified the economic difficulties of 2008,” the report says, explaining that those domestic economic factors would have caused a “normal downturn” but not the “near collapse” of the global economic system that took place.
A number of potential causative factors exist, including sub-prime real estate loans, a housing bubble, excessive leverage, and a failed regulatory system. Beyond these, however, the risks of financial terrorism and/or economic warfare also must be considered. The stakes are simply too high for these potential triggers to be ignored.
My conclusion: I believe that fear can destroy many stocks, but this selling feels motivational and not done by those who sell short stocks as a way of living. I sure would like to be able to see who is selling these stocks in order to take financial terrorism off the table.
To me, the most obvious dangerous legacy of the Cold War would have to be the damage the Soviets did to the world. I don’t mean the millions they murdered; those dead do not threaten us now, even if they should haunt us.
I mean the relentless distortion of the truth, the psychological violence they visited on the West and the World via their useful idiots and their agents. I’m thinking not merely of the intellectual corruption of the American Left (which even folks like Richard Rorty had to concede), but the corruption of reformers and their movements around the globe. Soviet propaganda still contaminates, while nuclear fallout does not. Lies about America, the West, and the nature of democratic capitalism live on throughout the third world and in radioactive pockets on American campuses.
The Soviet effort to foster wars of national liberation, to poison the minds of the “Bandung Generation,” to deracinate cultures from their own indigenous building blocks of democracy, to destroy non-Marxist competitors interested in reform, to create evil and despotic regimes that are seen as “authentic” because they represent the “true will” of their subjugated and beaten down peoples: these seem to me to amount to the most dangerous legacy of the Cold War. Not least because it was those sorts of efforts that gave birth to North Korea in the first place.
