Budget

Political Theater: It Turns Out That The Republicans And The Democrats Were Both Lying To Us And That The Real Budget Cut Number Is Far Less Than $38.5 Billion

Guess what?  The Democrats and the Republicans are both lying to us again.  So what else is new?  The truth is that the great “budget crisis” which supposedly took us to the verge of a government shutdown was just a whole bunch of political theater.  Even the Associated Press is declaring that our politicians used “accounting sleight of hand” to reach the $38.5 billion budget cut figure.  Not that $38.5 billion was an impressive number to begin with.  $38.5 billion would just be one percent of the federal budget.  But once you strip away the accounting charades, the real budget cut number is somewhere around 14 billion dollars.  It turns out that the “budget cuts” include money left unspent from previous years, earmarks that were going nowhere, unused census money and programs that Obama was already planning to cut.  The more you examine the “budget deal”, the more it becomes obvious that the Republicans and the Democrats had no intention of doing anything serious about our debt problems.  The U.S. government is still going to run a record-setting budget deficit in 2011 and both the Democrats and the Republicans are to blame.

So should we be surprised that our politicians have been lying to us again?

Of course not.

But if something is not done about our soaring debt it is absolutely going to crash our financial system.

According to the IMF, the U.S. government will have to borrow an amount of money equivalent to 29 percent of GDP this year alone in order to finance its budget deficit and its maturing debt.

That is what you call a crisis.

But neither political party seems the least bit serious about the national debt.

The Republicans are proposing even more tax cuts without saying how they are going to pay for them, and they even tucked an increase in military spending into the “budget cut” deal.

The Democrats don’t seem to want to cut much of anything.  In fact, most Democrats seem to believe that government debt is not much of a crisis at all.

Our politicians love to talk about “cutting the budget”, but nothing ever gets done.  Both parties have been promising us “fiscal responsibility” for decades but both parties have never delivered.

Sadly, the American people have not held our politicians responsible for this.

This latest episode just reveals how much of a joke Washington D.C. has become.  In the 8 days leading up to the “historic” $38.5 billion budget deal, the U.S. national debt increased by $54.1 billion dollars.

Our politicians are standing by and doing nothing while the financial future of this nation is being destroyed right in front of our eyes.  It is now being projected that by the year 2021, interest payments on the national debt will amount to $1.1 trillion dollars a year.

Fortunately, some bloggers out there are starting to wake up to just how pathetic this latest “budget deal” really was.

For instance, Tim Fernholz of the National Journal recently posted the following….

For example, the final cuts in the deal are advertised as $38.5 billion less than was appropriated in 2010, but after removing rescissions, cuts to reserve funds, and reductions in mandatory spending programs, discretionary spending will be reduced only by $14.7 billion.

In fact, some conservative bloggers are becoming absolutely furious with the duplicity of the Republican party.  In a recent article on Business Insider, John Ellis really let John Boehner have it….

It turns out that the budget agreement that all parties were hailing this past weekend as a “great achievement” is in fact a joke.  Any Republican who was elected with even a sliver of Tea Party support is now duty-bound to vote against it on Friday.  Every 2012 Republican presidential hopeful is now duty-bound to demand that it be voted down.

But Boehner is already saying that it is time to “move on” and that he is really going to “get tough” during the next battle.  Boehner is claiming that the “war” over the debt ceiling is going to be about “trillions” instead of “billions”.

The American people are certainly in the mood for something to be done about our debt crisis.  According to a new NBC/WSJ poll, the vast majority of Republicans and the vast majority of independents do not want the debt ceiling raised.  Even Democrats are roughly split on the issue.

John Boehner is promising that the Republicans will not agree to raise the debt ceiling without “serious steps in the right direction”.

So what pathetically low number will cause John Boehner to cave in this time?

Obama is already taking a strong stand on the debt ceiling.  He is demanding that the Republicans send him a “clean bill” and is warning that they must not “play politics” with U.S. government finances.

On Monday, White House press secretary Jay Carney stated that “the consequences of not raising the debt ceiling would be Armageddon-like in terms of the economy.”

You know what?  To a certain degree Carney is right.  If the U.S. government hits the debt ceiling the financial markets will likely go haywire.  That would cause the big boys up on Wall Street to start putting tremendous pressure on Boehner.  There is no way that Boehner would watch chaos unfold on Wall Street and not end up flinching.

Not that Boehner was ever serious about cutting the federal deficit.  He was not serious about it during the Bush years and he is not serious about it now.

This is all just a whole lot of political theater.

Meanwhile, most Americans are not even paying attention to all of the financial fraud being committed by the “fourth branch of government”.

Of course the Federal Reserve is not actually part of the federal government at all.   But they do get to spend trillions and lend trillions without ever having to get the approval of Congress, the president or the American people.

For example, most Americans don’t realize this, but the Federal Reserve has been handing out hundreds of millions of dollars in nearly risk-free loans to their friends and even to the wives of their friends.

Unfortunately, the Federal Reserve is above the law and is not accountable to anyone.  In fact, we can’t even get our politicians to authorize a comprehensive audit of their books.

The truth is that our system is soaked in so much fraud that there is no way that it will ever recover.

We have turned our backs on the principles of our founding fathers and so now we pay the price.

The U.S. national debt is now over 14 times larger than it was 30 years ago and it is currently rising by well over 4 billion dollars every single day.  This debt will destroy our financial system.  We are stealing the future from our children and our grandchildren.

It is so sad to see what is happening to America.

So what do all of you think about what is going on in Washington D.C.?  Feel free to leave a comment with your opinion below….

Become A Teacher? 10 Examples That Show Why Becoming A Teacher Is A Dead End In This Economy

Today budget cutters are on the rampage from coast to coast and often one of their first targets is public school teachers. What we have witnessed recently in Wisconsin is just one example of this. The truth is that you do not want to become a teacher if you want to have financial security in America today. Teacher salaries are being slashed from sea to shining sea. But to a certain extent the teachers that are having their wages cut are the fortunate ones. There are thousands upon thousands of teachers that have already been laid off, and there are tens of thousands more that are about to be laid off. It is absolutely brutal out there right now. So if you are thinking about becoming a teacher you might want to think twice. Not that there are a whole lot of other jobs that are more secure right now. The truth is that there is no such thing as a “safe job” in America today.

It is very unfortunate that what is going on right now is going to scare so many young people away from becoming a teacher because the next generation could definitely use some quality teachers.

But the truth is that it is getting really hard to honestly recommend that anyone become a teacher at this point. Just consider some of the following news stories that we have seen around the nation recently….

#1 In Providence, Rhode Island the school district plans to send out dismissal notices to every single one of its 1,926 teachers.

#2 Michigan has just approved a plan to shut down nearly half of the public schools in Detroit.  Under the plan, 70 schools will be closed and 72 will continue operating.

#3 In New Jersey, Governor Chris Christie has laid off thousands of teachers and he cut a billion dollars from the state education budget.

#4 Bills in Wisconsin, Ohio, Tennessee, Indiana and Idaho would either significantly alter or completely take away the collective bargaining rights of public school teachers.

#5 The eyes of the whole country are on Wisconsin right now.  Teachers there are very alarmed about the $900 million in cuts to school funding over the next two years that are being proposed.

#6 Clay Robison, a spokesman for the Texas State Teachers Association, recently said that his organization is projecting that 100,000 school employees in the state of Texas could lose their jobs.

#7 The current plan is for more than 4,500 New York City school teachers to be laid off after this current school years ends.  This will be the most significant teacher layoffs in New York since the 1970s.

#8 In Los Angeles, more than 5,000 teachers will be receiving preliminary layoff notices due to budget cuts.

#9 Nevada Governor Brian Sandoval is being deeply criticized for the teacher pay cuts that he is proposing.

#10 StudentsFirst.org is projecting that 161,000 teachers across the United States are in danger of losing their jobs this year alone.

So in light of the facts above, should we advise any of our young people to try to become a teacher?

The worst thing about all this for young teachers is that in many areas of the country there is a rule that says the last teachers hired are the first ones that get laid off.

That is another huge incentive for young people not to choose teaching as a profession.

So why are so many teacher layoffs happening?

Well, the truth is that most of our state and local governments are very deep in debt and have run out of money.

State and local government debt has reached at an all-time high of 22 percent of U.S. GDP, and hordes of state and local governments are teetering on the brink of insolvency at this point.

When there is no more money, the cuts have to come from somewhere.  It is just really unfortunate that so many teachers are going to be put out onto the street.

People that have gone into the teaching profession have all spent a lot of time and money to get the education that they need to teach.  If they are told that they can’t do that anymore, what are they supposed to do?

Most of the time when teachers are forced out of the profession they end up having to take jobs that pay much less.  In this economy, many ex-teachers will not be able to find jobs at all.  Today, one out of every seven Americans is on food stamps, and sadly many teachers may soon be joining them.

So why don’t we just raise taxes so that all of these teachers can keep their jobs?  Well, the truth is that middle class Americans are already being taxed into oblivion.  When you add up the dozens and dozens of different taxes that Americans pay each year the overall tax burden is absolutely frightening.  There is only so much that you can squeeze out of the American people.

No, the truth is that the American people are taxed way too much already, and the big corporations and the ultra-wealthy have become experts at avoiding taxation.  Our current tax system needs to be completely scrapped and replaced with something entirely new.

If our state and local governments had not been so addicted to debt, and if our economy had been managed correctly and if about a hundred other things had been done differently we would not be having these problems.

But here we are.

Unfortunately, there does not seem to be any easy answers.

Or are there some solutions that most of us have been overlooking?  What do you all think?  What should be done about all of the teacher layoffs that are taking place all over the country?  Please feel free to leave a comment with your thoughts below….

Barack Obama’s Budget For 2012: A Complete And Total Joke

Is Barack Obama trying to play a joke on all of us?  The budget that the Obama administration has submitted for fiscal 2012 is so out of touch with reality that it may as well be a budget for “Narnia”, “Fantasy Island”, “Atlantis” or some other mythical land.  You can view the hard numbers for Barack Obama’s 2012 budget right here.  Obama’s budget assumes that the U.S. will experience economic growth of over 5 percent for most of the coming decade.  That is so far-fetched that “optimistic” is not the right word for it.  It also assumes that U.S. government income (primarily made up of taxes on all of us) will more than double over the next ten years.  For 2011, the budget projects that the U.S. government will take in a total of 2.1 trillion dollars, and for 2021 the budget projects that the U.S. government will take in a total of 4.9 trillion dollars.  For the Obama administration to assume that the federal government will be able to drain an extra 2.8 trillion dollars per year out of the American people by the year 2021 is ridicul0us beyond belief.  In his new budget Barack Obama does propose some very, very modest spending cuts that he knows have no chance of getting through Congress.  Barack Obama’s budget for 2012 also does not even attempt to make any cuts to entitlement programs such as Social Security and Medicare.  In essence, you can sum up Barack Obama’s budget proposal for 2012 by saying that it is a complete and total joke.  This budget is so delusional and so out of touch with reality that it is hard to imagine anyone taking it seriously.

Oh, but Obama is really trying to sell it hard.  When Obama unveiled this new  $3.7 trillion budget for 2012 at a middle school in Baltimore, he insisted that his plan will make it “so that every American is equipped to compete with any worker anywhere in the world.”

Well, that is a nice sound bite, but as I have written about previously, unless Barack Obama suddenly finds a way to stop multinational corporations from paying slave labor wages to their workers on the other side of the globe the job losses in America are going to continue.

But that is a topic for another day.  Getting back to the 2012 budget, Obama is proposing to cut more than a trillion dollars from federal budget deficits over the next ten years.

That sounds really good until you figure out that means that the cuts only amount to about $100 billion a year.  Considering the fact that Obama’s budget is projecting that we will have a $1.6 trillion budget deficit this year alone, that really is not a whole heck of a lot to be cutting.

The truth is that Barack Obama should be proposing spending cuts that are at least ten times as large if he was actually serious about addressing our budget woes.

But at least Obama is not proposing an increase in spending.

Oh wait, he actually is.

In fact, under Obama’s budget, U.S. government spending will soar from 3.8 trillion dollars this year to 5.6 trillion dollars in 2021.

But the mainstream media is solely focusing on the budget cuts that Obama is proposing.

Apparently they are trying to cast him as some sort of “fiscal conservative”.

Try not to laugh.

But the modest cuts that Obama is proposing are at least some place to start.

Under Obama’s budget, approximately half of all government agencies will have their funding decreased from 2010 levels.

In fact, approximately 33 billion dollars would be saved by scaling back or shutting down 200 federal programs.

Of course Obama’s fellow Democrats in Congress will never go along with many of these cuts, but at least it is something.

However, this is where most in the mainstream media stop their analysis.

They don’t take a closer look at the numbers in Obama’s budget.

They don’t question the wacky economic growth assumptions.

They don’t question the bizarre government income projections.

But even with the Obama administration’s crooked numbers, the federal deficit still never drops below 600 billion dollars over the next decade and a total of 7.2 trillion dollars is still added to the national debt over the next decade.

If economic growth ends up being much lower, or if the U.S. government is not able to get twice as much money out of the American people by the end of the decade then the projections would look much, much different.

So where does the Obama administration assume all of that extra money for the government is going to come from?

Oh, from raising taxes of course.

The Obama budget assumes that there will be significant tax increases starting in the year 2013.

A recent article on CNBC summarized some of the tax increases that the Obama budget calls for….

The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000.

Wealthy taxpayers would have their itemized deductions limited, including deductions for mortgage interest, charitable contributions and state and local taxes.

There are many liberals (such as my friend Gary) that would love to see these tax increases go into effect, but Obama knows that there is no chance that they will ever see the light of day unless the Democrats retake the House of Representatives.

But most of Obama’s budget for 2012 is based on things that simply never even have a chance of happening.

The reality is that Obama’s budget for 2012 is a great work of fiction.

Meanwhile, the U.S. government continues to accumulate staggering amounts of debt.

In fact, Obama’s budget admits that we will witness the biggest one year debt increase in history this year.

In 2011, the gross federal debt with surpass 15 trillion dollars.  In fact, it is being projected by some analysts that this will be the year when the debt finally becomes larger than the size of the entire U.S. economy.

Ouch.

But Obama insists that he is taking this debt problem very seriously.

Obama insists that he is committed to making “deep” cuts.

In fact, as he announced this new budget Obama stated that these budget cuts hit “many programs whose mission I care deeply about, but meeting our fiscal targets while investing in our future demands no less.”

Do any of you actually believe him?

Not that the Obama administration is in an easy position.  The truth is that the U.S. government (both Republicans and Democrats) have been horribly irresponsible with our money for decades.

The 14 trillion dollar national debt problem that we have now did not develop overnight.

Neither will it be solved overnight.

But Obama is not even trying to address the tough issues such as Social Security and Medicare.

The truth is that the federal debt problem cannot be solved without addressing our out of control entitlement programs.

So why didn’t Obama address them in his budget?

Well, the reality is that Obama is not stupid.  Social Security and Medicare are political sacred cows.  Obama is not going to do anything at this point that would cost him millions of votes in 2012.

So Barack Obama ignored most of the $4 trillion in budget cuts recommended by the White House-appointed deficit commission.

It kind of makes you wonder why Obama ever appointed a “deficit commission” in the first place.

One area that Obama does attempt to cut in his new budget is military spending.  Obama’s budget for 2012 sets military spending at 5 percent below what the Pentagon requested for 2011.

In fact, Obama’s defense budget would slash military spending by $78 billion over the next five years.

His budget also assumes that we are not going to get involved in any more wars, which is not necessarily a safe assumption.

So will these military spending cuts actually get through Congress?

Not likely.

The Republicans control the House of Representatives, and they are not likely to take too kindly to large cuts to the defense budget.

In fact, the truth is that not too many of Barack Obama’s spending cuts are likely to survive in Congress.

As a recent article on CNN explained, Barack Obama’s budget plan must navigate a vast array of congressional committees in the coming months and by the time it emerges it is likely to be radically changed from its current form….

Before it gets back to Obama’s desk for a signature, the spending blueprint will go through no less than 40 congressional committees, 24 subcommittees, countless hearings and a number of floor votes in the House and Senate.

As our Congress critters have demonstrated over and over and over, they love to spend our money on some of the most wasteful things imaginable.

For example, a total of $3 million has already been granted to researchers at the University of California at Irvine so that they can play video games such as World of Warcraft.

Something seems to happen to people who get elected to Congress.  Almost all of them seem to develop an addiction to spending our hard-earned money.

Let us hope that something changes in that regard, because right now government debt is completely and totally out of control.

In fact, the U.S. national debt is currently increasing by approximately 4 billion dollars every single day.

In the end, if something is not done about all this debt it will destroy the entire U.S. financial system.

But our politicians just keep putting it off and putting it off.

Eventually we will reap what we have sown.  Debt is a very cruel master, and nobody can run from it forever – not even the U.S. government.

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