John Boehner can take a hit on this one too. You know that wonderful payroll tax cut? Guess who’s going to pay for it?

(CBS News)Just before Christmas, American workers got a rare gift from Washington politicians – the current payroll tax cut would be extended for two more months.

At the time, both President Barack Obama and House Speaker John Boehner lauded the move to avoid a tax increase for millions of working Americans.

But there’s something the politicians weren’t bragging about – the fact that they’re paying for the two-month tax cut with what has turned into a brand new fee on home buyers.

The new fee is a minimum of one-tenth of 1 percent on Fannie Mae- and Freddie Mac-backed loans, and is likely to go much higher.

It will be imposed for the next 10 years on most mortgages and refinancings and it lasts for the life of the loan.

For every $200,000, it amounts to an extra $15 dollars a month.

It’s bad news for Patty Anderson, who’s buying a home in Virginia.

Anderson will save a couple hundred dollars from having her payroll tax cut extended but her mortgage broker told her the new fee would cost her almost $9,500.

“I was absolutely startled that it would add up to that much,” she said.

The money collected by this tax will go toward social security, right?

Nope.

The $35.7 billion collected in fees won’t go into the Social Security fund to replace the lost payroll tax. It goes to the general treasury where Congress can spend it however they please.

“We had to pass it to find out what was in it” Boehner is rumored to have said. Fingerpointing all around.

CBS News went to Capitol Hill ask what Congress was thinking when they passed the mortgage fee hike. Boehner pointed the finger at the Senate.

“As you’re well aware, this bill came over from the Senate. I don’t know how they justified it. We would rather have offset that two-month extension with reductions in spending,” he said.

But the Senate blamed the House. And Democrats and Republicans blamed each other.

The Obama administration says this won’t hurt much because the knife will be stuck into the taxpayers’ backs slowly.

An Obama administration official defended the mortgage fee, calling it “modest.” She said it’s “unlikely to negatively affect borrowers” because increases “will be phased in over the next two years.”

Patty Anderson doesn’t agree.

“I think it just looks like Washington grabbing more money,” she said.

Yep.

Welcome back, class! As I warned you last time this subject would be painful for you, so strap yourselves in. As you’ve probably noticed with all of the charts and graphs we use that economists love to use pictures to make their points. In this case instead of a picture I’m going to use a hypothetical story to get things started…

Let’s say that at some point during your childhood your mother promises you that if you get straight A’s in school and do all of your chores upon graduation from high school your father will buy you a Ferrari. Needless to say, you are very well motivated to be a good kid. You spend the next few years busting your butt, getting all of your chores done and making whatever sacrifices to your social life that are necessary to get straight A’s. Graduation day comes and you walk up to your father and tell him about the promise your mom made and ask when you’re going to get your new car. Your father looks back at you and asks how you thought the family could ever afford a gift like that. Even with both of your parents working full time your family can only afford to live a pretty modest lifestyle. If you had just looked around you would have understood that there is no way the family could have fulfilled such an outrageous promise.

Having your dream crushed would not go over well, and you are justifiably unhappy for having been duped. Now, where is your frustration directed – at your mom or dad? Even though the fault lies with the person who made the ridiculous promise, chances are that most of your anger is at the person who had to point out the reality of the matter and say “no” to you.

To most of us who live outside of the beltway or state capitols the concept of making outrageous financial promises that can never be kept sounds absolutely insane, and sadly for you this is just basic strategy to win an election.

Before we go any further let’s ensure that everybody understands exactly what an unfunded liability is. Break down the two words:

Unfunded – A desired purchase that one does not have the means to buy based on current finances

Liability – Financial commitment to be paid at a later date

What this means is that every time you decree that something will be paid for with funds that have not been budgeted you are creating what is called an unfunded liability (UL). Be careful – don’t confuse unfunded liabilities with capital expenditures. Capital expenditures (CE) can be defined as purchases that are paid over several years and will appear in outyear budgets. Where CE’s are planned and already factored into future budgets, UL’s are not.

To illustrate this think of a household budget. Sister Babe and I have all of our regular expenses that we pay as we consume them – groceries, utilities, gasoline, clothing, etc. We also have items that we had to finance because we are unable to buy them with cash, such as our car or our home. The car and home are not ULs because we have budgeted for their expenses in future years based on our current income level. We know that based on our salaries we can afford the car and our home, so these are not unfunded liabilities. Now, let’s assume that one of us decides to do something stupid like make a large, unplanned purchase that goes enough beyond our budget that has to be financed with the money from elsewhere. In terms of scope, a cup of Starbucks during the day or going to grab a beer with a coworker after work are not expenses we budget, but are small enough that we don’t have to plan for them. If one of us decides to surprise the other with the gift of a Lexus as a Christmas gift, that would have a significant impact on our household finances (If you want to see a great parody of those obnoxious ads click here. Warning – the language is NSFW). We would have to either cut back on other expenses, find a way to make significantly more money, or borrow against our future and make plans to pay for this for years to come, preventing us from using our money for other financial goals.

From your perspective, our consumption would be the equivalent of the day to day services that your level of government provides, such as police and fire services or payments to retirees. Our car or home would be your long term projects, such as building bridges or highways. As for the Lexus, that is everything that you have planned that you don’t have in the budget. Examples of these would be wars, natural disasters, or Obamacare. Sure, if you spend too much you can just raise taxes and rely on unrealistic revenue forecasts from a tax base that your laws incentivise to shrink. Or, if you spend spend recklessly you can just tell people not to worry and that we can just pay for it down the road or punish the wealthy.

Here is the problem with unfunded liabilities – they ultimately have to be paid back, and those payments mean that in the future you will have less to consume or invest. If Sister Babe and I now have a $700 monthly Lexus payment that’s money that we don’t have for vacations, for funding our retirement, paying off the car we already have, or, heaven forbid, forcing Brother Bob to cut his beer consumption.

The same goes for you. The beauty from where you’re sitting is that the pain is spread over many people and your constituents are so used to paying you taxes without question it goes largely unnoticed. But ultimately the debts have to be paid back. I believe it was the writers at Cafe Hayek who defined an unfunded liability as a tax on future generations that will have to be repaid either by raising taxes or inflating the currency. A few years ago I got to hear Ben Stein Speak when he got in front of the crowd and said, “Bueller… Bueller…”. No, he actually didn’t say that but what he did offer was a great definition for our soaring deficits – “Financial grandchild abuse.”

A few years ago Chris Christie was elected governor of New Jersey, surprising many that a conservative Republican could win in such a blue state. The people of New Jersey got fed up with the leadership of one of the best financial minds that Democrats could produce in John Corzine. The state had (and still does) face some serious budget issues, but Christie was the one who was given the task of dealing with the problem. The Democrats in the state legislature naturally proposed taxes on the wealthy to pay for these, which Christie rightly vetoed as soon as the bill reached his desk. New Jersey already suffers from one of the highest tax burdens among the states, and only neighboring New York’s even more oppressive taxes keep more people from North Jersey from fleeing the state. Christie had to make cuts to the budget, and one of the larger outlays that New Jersey has is to its bloated public sector workers. Specifically he targeted the teachers’ union, making the unreasonable demands that they fund part of their pensions and health care – you know, like everyone else has to do. This and other spending cuts made Christie quite unpopular in New Jersey, but at the end of the day who’s fault is the state’s terrible financial condition? Was it the man who caused the problem or the man who enacted the painful solution?

Sadly, in your world these promises get you re-elected until the bill finally comes due. Or when you finally get thrown out of office you can fail upward into some think-tank or high paying lobbying job. And of course, we get stuck with the bill. Going back to Cafe Hayek’s definition, any deficit spending that you commit is nothing more than a tax increase that you haven’t bothered to pass yet. If you want a great example, look at what happened just recently when all of the president’s sycophants in the media were baying over Mitt Romney’s tax returns. The debt ceiling was quietly raised by $1.2 trillion dollars. Using a rough total US population of 308 million people, that averages out to a tax increase of $3,896 for every man, woman and child in America.

And if you think we can get around that tax increase that the president just passed by simply demanding that the wealthy pay their “fair share”, think again. Declaration Entertainment’s Bill Whittle does a great video walking through Iowahawk’s analysis of how much of an impact on the debt we would have by confiscating private wealth. If you have five minutes it’s well worth watching.

To shoot down another argument supporting deficit spending we can look at every lefty’s favorite economist, Paul Krugman. By calculating that most of our federal debt is held by American entities, whether it be private citizens, banks, etc. the debt is meaningless because we“owe it to ourselves”. This is a perfect illustration of why it is dangerous to listen to people with grand ideas and minimal experience in the real world. An old coworker of mine gave me a phrase I love to use, Krugman is “buzzword compliant but experience deficient.” When you’re looking at the world from eight miles high it’s easy to make assumptions about a big picture without realizing that the big picture is made up of an incredible number of small moving parts. Every bit of that debt that “we owe to ourselves” is exactly that – it is owed to some person who is working under the assumption that at some point they will be paid back for the loan they made. Yes, the borrowee can take a loan from someone else to pay it but at some point there is an end where the debt has to be paid.

To show this point of owing to ourselves with a real life example we can look at an example from my past of betting on football with friends. When we were in 6th grade my buddy Richard (not his real name) sat behind me in Sunday CCD class. I would always tear out of the newspaper the latest betting lines and we would pass the paper back and forth negotiating which games we would bet on and at the end of class we would come to an agreement as to which games each would have. We were twelve years old, so our big stakes betting was a quarter or fifty cents per game. Every Tuesday morning when the gaming week ended after the Monday night contest we would settle our debt on the playground with the loser paying what he owed. If I remember correctly I trounced him pretty well that season, having an advantage for the year of being up around $6 after the Super Bowl. Being a good sporting friend I offered double or nothing on the following week’s Pro Bowl all-star game, which Richard won – easy come, easy go.

In contrast, I started a new job just over a year after graduating college. A coworker who I’ll call Charles suggested we bet each other on some of the weekend pro football games. This was probably the first time I was betting on football since my days with Richard, so I gladly accepted. This time was different though – I got out to an early lead in the season, but instead of paying each week Richard suggested we apply whatever he owed toward next week’s games. This kept up until I was going out of town one weekend and asked Richard to pay up. At this point he got indignant and said that he bets for friendship and that he was annoyed that I suggested that he pay. Being that he was a coworker bodily harm would have been inappropriate, so I took that opportunity to realize that I was better off without this goon in my life. So for the $10 or $20 that this cost me I gained the ability to immediately send this fool scurrying away whenever he tried to start a non job related conversation.

The point of these stories is that “we owe it to ourselves” only holds up if it is never expected that the original money be paid back. And that money doesn’t get to to, or from, this amorphous being known as “ourselves”. It’s made up of individuals, and at some point no matter how much our government bullies the banks and other institutions to buy its debt this shell game won’t go on forever because it can’t. Anyone remember the bank runs of the 1930′s from your history books or the last time you saw “It’s a Wonderful Life”? This is what happens when a few clever individuals realize they better move quickly if they want to get the debt that’s owed to them back. Then more and more people will figure it out, and the result is not going to be pretty.

There is actually one other way to pay down our deficits other than ruinous tax increases or hyper-inflation , and that’s by spurring the private sector to grow faster than the government that feeds off of it. No parasites can indefinitely grow faster than its host without killing both, yet leftists seem to be in love with gorging government growth for some improved economy that becomes their bizarro version of “Waiting for Godot.” Dubya partially got this, which was how, despite his “irresponsible tax cuts” government tax receipts hit all time highs. Of course, that doesn’t excuse his decision to start spending like a liberal.

We need to start taking a hard look at how you’ve plundered our economy, and we need to start having those painful conversations right now about how much we’re going to need to sacrifice thanks to your selfishness. Bernie Madoff’s name has become almost synonymous for large scale financial rip-offs, yet the $65 Billion that he cost the people who believed in him is is only how much more you take from us in one month – and that’s only at the federal level. And frighteningly enough, while you no doubt agree with us that Madoff belongs behind bars, you probably have the nerve and gall to think that we should be thanking you.

So spare us the talking points that Obama has “given” us these massive tax cuts. Since coming into office the President and his fellow Democrats have increased our federal debt by $3.5 Trillion to $14.2 Trillion in just three years – that’s a tax increase of $11,363 per citizen.

Naturally, I’m picking on Barry O. since he is the one at the helm right now. Don’t think that I’m letting our last president off the hook today. During his eight years in office Bush presided over deficits that increased to $5 Trillion dollars – using my formula above that’s a tax increase of $16,233 for each of us. So you’re on the right track when you tell us that Bush’s reckless policies hurt our country, but it’s not his tax cuts, it’s his tax increases that hurt us. We all agree that Bernie Madoff’s $65 Billion rip-off was criminal. What is it that makes his actions criminal and yours noble? You’d better be ready to answer that, and soon.

OK, that’s enough for today. I know that I was a lot rougher on you than in previous lessons, but sometimes tough love is necessary. But in the words of the great Michael Muir, “And if I offended you, oh I’m sorry but maybe you needed to be offended…” Mr. Muir had a bit more to say on the subject, but in the name of the new civility those words won’t be reprinted in this post. If you are interested you can hear the rest of his musings by clicking here .

“Who the H*** you callin’ fiscally irresponsible? You wouldn’t know what fiscal responsibility was if Milton Friedman was eating Fruit Loops on your front porch!”

The next lesson is only going to be somewhat better for you, as we explain why the unintended consequences of your actions often cause more harm than good. This next chapter will be a bonus section for journalists – never again will you have to type the word “unexpectedly” when explaining why jobless claims increase under President Obama! Next up:

Chapter 9: Unintended Consequences – Bonus Section for Journalists!

Previous Lessons:

Lesson One: It’s Not Your Money

Lesson Two: Intro to Microeconomics, or Why Prices Matter

Lesson Three: Intro to Macroeconomics. or So that’s Where Government Fits In!

Lesson Four: You Don’t Create Jobs – It’s Time to Get Over FDR! 

Lesson Four A: By Definition the Government Can Not Create Wealth

Lesson Five: Businesses are Greedy – That’s Not Necessarily a Bad Thing! 

Lesson Six: You are Greedy – That is a Bad Thing!

Lesson Seven: You Don’t Invest; You Spend

Barack Obama: On the eighth day, God said “raise taxes”

President Barack Obama has been taking lumps from Republicans for years over his support for Wall Street and health care reform, but today at the National Prayer Breakfast he claimed support from on high to defend two of his most controversial legislative achievements.

“And so when I talk about our financial institutions playing by the same rules as folks on Main Street, when I talk about making sure insurance companies aren’t discriminating against those who are already sick, or making sure that unscrupulous lenders aren’t taking advantage of the most vulnerable among us, I do so because I genuinely believe it will make the economy stronger for everybody. But I also do it because I know that far too many neighbors in our country have been hurt and treated unfairly over the last few years, and I believe in God’s command to ‘love thy neighbor as thyself.’”

Sure you do.

“I know the version of that Golden Rule is found in every major religion and every set of beliefs — from Hinduism to Islam to Judaism to the writings of Plato,” Obama added.

If nothing else works, let’s try guilt:

“And I think to myself, if I’m willing to give something up as somebody who’s been extraordinarily blessed, and give up some of the tax breaks that I enjoy, I actually think that’s going to make economic sense. But for me as a Christian, it also coincides with Jesus’s teaching that ‘for unto whom much is given, much shall be required,’” Obama said, noting Jewish and Islamic teachings say much the same thing.

Three years into Obama’s Presidency we learn that we didn’t just elect a President, we elected an evangelical. Well, that does explain the “pitchforks” thing.

So how do you like him now?

Click here to view the embedded video.

Now that the Florida Primary is over and we have seen how effective a carpet bombing campaign of negative ads can be, I thought it would be interesting to see exactly who provided the ammunition to each of the combatants. By ammunition I mean money, lots of money. I expected to see what we all knew to be true; Romney has the run of a well-stocked military base’s ammo dump, Newt Gingrich is a kid in the back yard who found his dads stash of illegal firecrackers.

Off to the web site OpenSecrets.org I go. A great place to find all sorts of nifty little facts and figures politicians like to avoid talking about or to crow over. Rooting around like a French pig looking for very expensive fungi, I came upon the numbers for both Romney and Gingrich. There are no real surprises here. Romney took in $56,465,509 far outdistancing Gingrich’s $12,648,565, a 4-1 advantage. Anyone following the Republican Primary knew this was the case even if they were not aware of the exact numbers. Romney supporters are always sure to let you know how much more money Romney has then his opponents. What is amazing is this one statistic. With all the resources Romney has to gather in funds there is one statistic he loses to Gingrich.. It’s you and me.

By “you and me” I am referring to people who do not attend dinners that cost more per plate then our mortgages. We, for the most part, are working stiffs without thousands of dollars to blow on someone’s political ambitions. It’s not that I would not like to be in such a position one day. I would surely welcome it as I think most honest people would agree. The reality is that for most of us that is not the case, and may never be. Still, with what little money we can afford to part with, Romney doesn’t get as much of it as one would think.

Of what the OpenSecrets.org defines as “Small Individual Contributions” Gingrich took in $6,260,961 compared to Romney’s $5,232,273. Not a huge lead that Gingrich has over Romney at first look. What is significant is the percentage of the total amount that these contributions are relative to the total amount of money raised by each candidate. For Gingrich Small Individual Contributions make up 49% of the total rose. For Romney, only 9%.

Armed with this knowledge, one can draw many conclusions and come away with as many questions. I will ask the obvious. Knowing that Small Individual Donors only comprise of 9% of Romney’s total contribution intake, exactly how much influence can the little guy or gal have on the man’s politics? It’s not as if Romney needs us. In fact, if one looks at how the Romney Campaign and the Republican Establishment treat its conservative base, they act as if they have come to the same conclusion as well.

I will assume that I will inevitably be charged for engaging in “class warfare” So be it. But before you do that realize that if a frozen fat guy in Maine armed with Google can see this could be an issue, you can be sure that Team Obama has already planned to make it an issue. And In case you’re wondering (Not for the faint hearted)……..

Obama’s total intake so far $124,333,258 of which $58,498,953 came from Small Individual Contributions. A percentage of 47%.

*SHUDDER*

Today, I received an email from a very liberal Obama supporter which contained a reference to the following link:

Dishonest Fox Chart: Food Stamps Edition

This article portrays Fox News and Newt Gingrich as being dishonest about the number of SNAP (food stamps, for those of you in Rio Linda) recipients that have been added to the rolls since Obama became “The Precadent”. In the article, they reference the Annenberg Foundation’s FactCheck.org, which, in turn purports to prove that Fox and Gingrich are lying.

Being the curious type, and knowing that “Obama the Humble” and “Ayers the Terrorist” both worked together at the Annenberg Foundation Challenge, I decided to check out the raw data from which they got their analysis. Here is what I found:

I used the end of the previous president’s term(s) through the end of the next president’s term(s) to determine the net change in average participation.

As one can see, during Obama’s three years in office, on average, over 16 million new people have been enrolled in the SNAP program. In the FactCheck article they state: “We asked the U.S. Department of Agriculture’s Food and Nutrition service for month-by-month figures going back to January 2001.” They do not show or give a link to those figures, however, I found this table on the USDA web site, which has a different set of numbers from the table above.

Using the data from the previous link, the number of people on food stamps at the end of the Bush administration was 31,567,037, while the current number (not including November or December of 2011) is 46,224,722. FactCheck calculates that to be 14.2 million, while claiming 14.7 million were added during Bush’s 2 terms. My math tells me that the real answer is 14,657,685 added during Obama’s ¾ of a term.

Since I could not find the same monthly tables that Annenberg used for the years 2000 through 2008, I can’t check the rest of their assumptions, however, since they are so slipshod in their math skills, one has to wonder if they are purposefully trying to excuse Obama and blame Bush or just sloppy. Then again, FactCheck is run by the Annenberg Foundation, one of Obama’s former hangouts.

I’m a huge fan of lotteries. It is one of the few taxes that citizens pay willingly. Spending a dollar for the prospect of winning a hundred million is kind of fun. And the fact that the state’s provide the fig leaf of responsibility by suggesting all funds go to support education makes players feel like they are doing their part to support the kids… Imagine, a way of taxing people that is actually voluntary!

Unfortunately however, most taxes are anything but voluntary, particularly those levied by the federal government. In 2011 the federal government took in $2.3 trillion in taxes. Not only did all of that get spent, but about $1.4 trillion more. And now Barack Obama is in charge of the spending machine. In the three years he has been President, Obama has spent over $11 trillion. That includes not only the $6.6 trillion Uncle Sam took in in taxes, but an additional $4.6 trillion that has been borrowed on your behalf, or at least for which you have the responsibility to repay. If we split that sum up amongst every one of the 310 million people in the country that would mean that Barack Obama has racked up $15,300 in debt on behalf of every American… in a mere three years.

I’d like to give that $4.6 trillion sinkhole a little perspective. Imagine that instead of that money going to failed green jobs scam companies like Solyndra or to university research departments to play World of Warcraft, something completely different happened. Imagine that on January 20, 2009 Barack Obama had knocked on your door, teleprompter in hand, and said “(Insert taxpayer’s name here) I’d like to thank you for giving me the opportunity to be your President. And to show my gratitude I’d like to give you $5,000 a year each of the next three years. Now, you’ll have to pay it back of course, but I’ll spread the payments over 30 years and give you an interest rate of about zero.” You think to yourself “If I don’t take the deal he’s just going to barrow it in my name and spend it on poetry readings or some such thing.” Deciding you could come up with much better places to spend the money, you respond “Thank you Mr. President. I’ll take the checks.”

Wow. He gives you the check. Now you have a $5,000 you didn’t have the day before. You start dreaming…”What am I going to spend my new found money on?” Well, if you were an average driver, who uses approximately 700 gallons of gas a year, you could pay for gasoline for the year and still have about $3,000 left over. You could then spend $720 on clothes, $1,000 on entertainment and still have enough left over to cover half of your healthcare expenditures. “Not bad” you think.

Now of course, that is just one $5,000 check. Given that the average American home has 2.6 people in it, the President quickly takes the $5,000 check back and gives you a $13,000 family sized check instead. You think “Wow, almost $40,000 over three years! Now that’s some serious cash!” At $13,000 the government just covered more than 80% of the total cost of what the average American family spends on housing. That’s pretty nice. At a rate that is lower than your mortgage as well. “This is going to be great” you tell yourself.

Then, suddenly, just as the President is about to leave you stop dreaming and start thinking about the big picture. “Mr. President! Wait! $13,000 a year for my family would be nice, God knows we could use it, but I don’t want to bankrupt the country or close down the government or endanger the national defense.” “Good citizen” President Obama calls you, “Don’t worry about that, we’ll make do with the just the $2.2 trillion or so we take in in taxes annually, which is, exactly what we spent way back in the ancient period known as 2004.” – remember this is a dream.

The wheels start turning in your mind… How different is your life in 2009 relative to 2004, and how much did a bigger government have to do with making it better or worse? Recognizing that the growth in government didn’t do much to make life any better over that time, you decide you can indeed live with a government budget circa 2004. “Ok, Mr. President, never mind, I’ll keep the money! Thank you!”

Of course, that was all a dream. Unfortunately for you – and the rest of America – you are apparently too stupid to know what to do with your own money, or in this case, the money the government borrows but forces you to pay back. As such, no mortgage payments for you. No gas money, movie money, no check to cover your family’s annual food and insurance bills combined. No, unfortunately, while you are indeed on the hook for the money, guys like Barack Obama, Harry Reid and Barney Frank get to decide where all that money (and much more) goes…

Fundamentally that is the problem. And it’s not just money. Nor is it just the federal government. Increasingly it’s all levels of government and it’s seemingly about everything. Rather than parents being responsible for their kid’s fitness, schools have to ban burgers and pizza. Rather than drivers being able to purchase the kinds of vehicles they want, the government mandates auto companies sell cars no one wants and forces drivers to put inflation spurring ethanol into them. Rather than consumers and markets deciding what banks, and energy companies and health insurance companies should succeed, the government sticks its nose in virtually everywhere at almost every turn.

At the end of the day, few people could or would run their lives the same way the government runs the country – and unfortunately running the country is exactly what governments try and do. Fantasy budgeting and accounting, a distinct lack of accountability, a nonexistent correlation between success and continued funding, and a Pollyanna notion that all human problems and foibles can be obviated by government fiat.

Whether we get another four years of Barack Obama (God help us…) or a first term of one of the big government “conservatives” currently vying for the GOP nomination, voters should understand that the deficits and the regulation creep and the basic suffocation of the capitalist system that made America great will not be put asunder until we nominate and elect a President who:

1. Recognizes that the power of the federal government is constrained by the Constitution, particularly the 10th Amendment;
2. Understands that role of government is to do only those things which citizens cannot do themselves and nothing more;
3. Has the intelligence to know where the line between the two is;
4. Has the courage to tell voters to begin acting accordingly.

That doesn’t sound like too difficult a task. One wonders why the GOP can’t seem to figure it out.

Obama’s “moon project” aka high-speed rail is moving along. Costs are spiraling:

Faster than a speeding bullet train, the cost of the state’s massive high-speed rail project has zoomed to nearly $100 billion — triple the estimate given to voters and more than enough to run the entire state government for a year.

Planned completion times are increasing:

bullet trains won’t be up and running until at least 2033, much later than the original estimate of 2020, although that depends on the state finding the remaining 90 percent of the funds needed to complete the plan.

And the voters are increasingly beginning to see the light:

Four weeks after the news that the cost of California’s high-speed rail project has tripled since voters approved it, the struggling project is taking another hit: waning public support.

A new Field Poll shows that 64 percent of California voters would like a ballot measure giving them a chance to reconsider their 2008 decision to approve $9 billion in state bonds for the project.

Fifty-nine percent said they would reject the $98.5 billion project if it were put before them again. In 2008, 52.6 percent of voters approved plans for the rail line to connect San Francisco and Sacramento with Los Angeles.

So what should our government do? Should they be fiscally intelligent and kill the stupid thing?

Obama?

Ain’t gonna happen:

The Obama administration vowed Thursday at a House committee meeting in Washington that it would not back down from its support of California’s bullet train project despite attacks from critics who alleged it is tainted by political corruption.

“We are not going to flinch on that support,” said Joseph Szabo, chief of the Federal Railroad Administration.

Szabo said that his agency had committed itself to provide $3.3 billion for a construction start next year in the Central Valley and that federal law prohibits any change of mind about where to begin building the first segment of the state’s high-speed rail system.

“The worst thing we could do is make obligations to folks and start to renege on our word,” Szabo told the House Transportation and Infrastructure Committee.

If the cost has increased three fold before one shovel has hit the ground…what do you think it will end up costing in 20 years when it will supposedly be complete?

It’s insanity. It’s a huge waste of taxpayer money. And in the end it will STILL be faster to fly.

If Obama really wanted a “moon project” to spend money on it should be for a completely new mode of travel. Something that would provide new technology and might actually be worth spending the money on.

But instead he wants to bankrupt us on a 19th century mode of travel.

60 Minutes, as usual, had a very nearly excellent program last week on the economic collapse, and they were all upset because no one has been arrested; no particular person appears to be under investigation.  They have a good reason to be upset, but they seemed, at least in this report (and in several previous programs), to be clueless as to why.

What happened at the end of 2008 changed history and the direction of the United States.  Treasury Secretary Hank Paulson goes to President George Bush and tells him, “The banks in the United States are about to collapse.  We need TARP.  Let me have nearly a trillion dollars, and I can take care of this.”

Then 10 or so huge banking conglomerates are called in and they are told that they are going to take a huge, temporary loan, and no one is to talk much about it.  If a bank is in good shape, they take the money; if a bank is ready to collapse, they take the money.  The explanation, which seemed reasonable, was, we do not want the public to know which banks are solvent and which ones are not.  The problem was, so many of these banking conglomerates had a huge amount of bad housing investments in their portfolios.

At first, Congress said no.  Then our economy very nearly collapsed.  The Dow Jones dropped 778 points on at the end of September, 2008, right after Congress refused to pass the TARP legislation.  This was the greatest net loss in Stock Market history, when $1.2 trillion of wealth was lost in one day.

TARP was immediately passed; money was left on the table for the next administration, and, eventually, hundreds of institutions were bailed out.   As a result, the momentum for Republican candidates McCain and Palin stopped and they began to lose ground.  The Democrats capitalized on this, blaming the Republicans, and Obama blamed George Bush.  and the Democrats took over the Presidency, with strong majorities in the Senate and the House.

If you will recall the Obama campaign, you heard President Bush and his economic policies being blamed, over and over again, for the market crash.  TARP was not strongly questioned, but it was clearly Bush’s fault, at least, according to Obama and the media.  Democrats successfully blamed George Bush, the banks and Wall Street, and said it was all their fault for the market crash.

So, here it is, 3 years later, after 2 years of super-majorities by Democrats in Congress, and, for some reason, these evil bankers and evil Wall Street types are not being pursued for their criminal acts.  In fact, it turns out that Wall Street is giving far more money to Democrats than to Republicans.  Furthermore, it was Wall Street that got bailed out, both under Bush and under Obama.  Those same evil bankers and financial types that the media told us were at fault.

So, what gives?  Why is there this symbiotic relationship between the current White House and these same financial institutions that they blamed for the crisis?

That is what 60 Minutes asks.  Who is going to be investigated?  Who is going to be arrested?  Department of Justice seemed to have no substantive answers for them, apart from, “The wheels of justice grind slowly.”  Furthermore, 60 Minutes seemed to have no real clue either.  There were no questions about the key connection here: the relationship between the government, Wall Street, credit services and the large banks.  This is the unholy alliance.  I’m not talking about Democrats versus Republicans here; I am talking about government and the many financial institutions which were intimately involved in this crisis.

What has been happening as of late?  It turns out that many members of Congress were making money on the stock market, no matter that we are in a down market or an up market (and this has been going on for a long time).  Senators, in particular, were getting great returns on their investments—even greater than smart fund managers.  Somehow, these Senators are so brilliant that, besides handling all this government stuff, they are brilliant investors.

Although I have not studied this, I can just about guarantee you that the investments that various members of Congress made with respect to housing and the housing market was inspired.  Just as if they could see the future.  It is as though they knew when the markets were going to tank.

Information is coming out in drips and drabs.  No investigating committee wants to turn over too many stones.  After all, what Wall Street banker, who has given $1000′s or has bundled tens of thousands of dollars for the current president wants to take the fall for this.  Do you think they will stay quiet?  Do you think one of them is going to be arrested and then he says, “Yep, I did it all.  It was all my idea.”  No, if he is pushed against the wall, he is going to starting naming government names and government legislation and, more importantly, the names of the government regulation who told them, “Start lending money for housing to specific groups of people and we will buy these loans from you.”  You simply cannot have dozens of institutions suddenly doing the exact same thing (making bad loans) without some guidance and help from the government.

Only recently, it has come out that credit agencies would do rapid re-scores on people with bad credit (one of the ignored stories of this month).  The buyer or buyers would walk in to get a loan after finding a house; they explain with a short letter why this, that, and the other thing is on their credit record, and suddenly, within 1 hour, their credit score goes from 500 to 700.  Suddenly, they are qualified to buy that house; they can now get the loan for it.  They have the background and credit score necessary to qualify.  Although this is well-known in the banking industry, this does not seem to be of any interest to the media.

From personal experience, I know that loan officers and underwriters did a horrible job when it comes to checking the backgrounds of potential home buyers.  I had two instances where I was called to tell how my tenants were doing; did they pay on time; and, in each case, these were problem tenants.  So as not to ruin their chances to get a house, I said, “Call me back in a week” so that I could work things out with the tenant.  These people doing the verification never called back a second time.  They verified the ability of a person to pay on their housing loan without getting a clear appraisal from me, their landlord.

And so, millions of people purchased homes that they could not afford; banks loaned money on very bad loans; and the government continued to buy or guarantee these loans.  Also, in all of this, the government went from owning and controlling 50% of American mortgages to owning and controlling and guaranteeing 90% of the mortgages in the United States.  During all of this time, these rapid re-scores would last just long enough for the loan to close and fund; and the government continued to buy or guarantee these bad loans.  At the same time, people who worked for FNMA and FHLMC made millions–particularly the executives.

In other words, the government was intimately involved in this mortgage mess, as I have pointed out in many articles in the past.  In fact, those in the government were criminally involved.  If there was no government involvement, there would have been no housing bubble and subsequent crash.

What we are talking about is hundreds and possibly thousands of people, both inside and outside of government, who pulled this off.  They may have had some honorable intentions at the beginning, but then they began to make so much money and the economy went like gangbusters; and then there was that crash.  And still, some Senators and Congressmen seemed to have this uncanny ability to know how to time their own investments as to make money during one of the greatest crashes to occur in our lifetime.

Let me make it clear—if there are more than 10 Wall Street types and mortgage company CEO’s that are arrested, then, there is going to be revelations of many ties to our government, government officials, and government regulators to a point that our heads will spin.  And then there will be thousands of arrests, most of them coming from inside the government.

Therefore don’t expect any arrests; not in the near future.  Expect the official explanation to be, “While what these bankers and mortgage officers was immoral, it was not illegal; and so, we have no way that we can prosecute them.”  Because, to bring charges against these private citizens is to eventually bring charges against many congressmen, Senators and government regulators, from both parties.  Do you think our government is going to allow that to happen?

From Conservative Review #207  (HTML)  (PDF)

Worst. President. Ever…

and a liar:

Click here to view the embedded video.

Of course it took Fox News to call him out on the lie.

The rest of the media?

Crickets…..or spin.

Kinda like this spin:

Take a look at these headlines:

The President’s Jobless Recovery
Frustrated Job Seekers Cause Jobless Rate To Drop
Economy Adds Few New Jobs
Low Jobless Rate Reflects Lost Hope
US Jobless Rate Drops But For Wrong Reasons

Recent headlines regarding the drop in the unemployment rate from 9% to 8.6% right?

Wrong.

Those are headlines from January 2004, when the jobless rate dropped to 5.7% and when President Bush was just starting a re-election campaign.

Here are headlines from Friday’s job numbers:

Unemployment Rate Drops To 8.6% Raising Hopes
Jobless Rate Drop Could Boost Obama
Obama Gets Economic Indicator He Can Crow About
Good News On Job Front For Obama
Jobless Rate Lowest In 2.5 Years

No liberal bias my ass.

We have all heard lately about the “supercommittee,” its charge, and, if it isn’t successful, pulling the spending “trigger.” Defense has the most to lose from triggered cuts, as this source illustrates. Leon Panetta, head of the Department of Defense (DOD) and no bastion of conservatism, called the trigger “draconian” and “devastating” and said that it will “hollow out” the military. The worst thing, Panetta said, is that the cuts “invite aggression.”

But supercommittee cuts exempt Social Security, Medicaid, Supplemental Security Income (SSI), veterans’ benefits, civilian and military retirement programs, and other programs serving low-income families. Cuts to hospitals, physicians and other Medicare providers are limited to 2 percent.

So let’s examine SSI, a part of Social Security, and exempt from supercommittee cuts. Why SSI? It has become the newest welfare scam. In 1988, there were 4.46 million SSI recipients. In 2011, there are 8 million. The SSI program for children was created mainly for those with severe physical disabilities, such as cerebral palsy, Down syndrome, and blindness. But benefits now go primarily to indigent children with behavioral, learning and mental conditions. “This [SSI] has become the new welfare,” said MIT economics professor David Autor.

What is SSI? The SSI program pays benefits to disabled adults and children who have limited income and resources. It also pays benefits to people 65 and older without disabilities who meet the financial limits. SSI is a federal income supplement program funded by general tax revenues, not Social Security taxes. It is designed to help aged, blind, and disabled people, who have little or no income, and it provides cash to meet basic needs for food, clothing, and shelter.

That sounds pretty good. The original intent of SSI was well intended. But, as with all federal assistance programs, scam artists horned in, particularly in the “disabled” child area. SSI is known as “crazy money” since one must “act crazy” to receive it. Oftentimes several people in the same household, adults and children, collect SSI checks. Easy-to-fake learning, behavioral, and mental disorders are the most common “disabilities,” especially among children, who comprise 55 percent of all cases. More than half who go on SSI as a child, requalify as adults. SSI recipients are not required to get treatment for their or their children’s disabilities. No requalification can be good since it can be harmful for kids to take drugs for fake or exaggerated symptoms. The SSI program for children is rapidly expanding, with the biggest increase among kids with mental, behavioral and learning disorders, including attention deficit hyperactivity disorder (ADHD), speech delays, autism and bipolar disorder.    (Personal note: With kids, how can an adult know if he/she has a “disability?” In my day [I'm 62 years old] we were told to sit down and shut up, otherwise we would get a spanking. Today, rather than administer corporal punishment, it’s easier to drug kids.)     ”Accurately diagnosing some types of mental impairments is a complex and often subjective process for [the Social Security Administration], which can sometimes be vulnerable to fraud and abuse,” Daniel Bertoni, from the Government Accountability Office, said.

About what amount of money are we talking? In 2010, the Social Security Administration paid almost $50 billion in SSI benefits. It paid more than $10 billion to 1.2 million disabled children.

And the future doesn’t look any better. Federal statistics show a rise over the past two decades in the number of children who qualify for SSI because of a variety of mental disabilities. The attraction of up to $700 a month in payments, and the near-automatic Medicaid coverage that comes with SSI approval, leads some families to count on a child’s remaining classified as disabled, even as his/her condition may be improving. At a hearing on Thursday, October 27, 2011, federal investigators told members of the U.S. House of Representatives that preliminary findings from their inquiry into the program show that the number of children receiving SSI benefits due to mental disabilities like autism and ADHD is on the rise. At the same time, periodic case reviews to verify continued eligibility for the program are less common.

Though somewhat dated, this source clearly illustrates the problems with SSI and the unintended consequences that can come with massive federal programs. SSI is one of the fastest growing welfare programs in the federal budget. SSI, originally designed to provide a safety net for low-income senior citizens, is now experiencing spectacular growth in recently eligible population groups, including drug addicts, the mentally ill, immigrants, and children. Government projections indicate that between 1990 and 2000 the number of immigrants on SSI will have grown fivefold and the number of drug addicts and alcoholics eightfold.

There is little or no incentive to leave the SSI program. A family of four, all getting SSI checks, could get $32,352 annually, not counting other benefits. Since there is not much most SSI recipients could do to earn a living other than work in fast food for minimum wage, why work when you can watch television all day and collect more in aid? Why bother trying to raise yourself up?

There are, of course, legitimate SSI recipients. After more than a year of violent temper tantrums, and being kicked out of preschool, four year old Hulston Poe was diagnosed with severe ADHD. His mother, Suzanne Poe, who was scraping by as a single parent of two, now receives a monthly SSI check of $674 that helps pay for Hulston’s day care, a private tutor and medicines. Plus he gained access to the doctors he needed.

So can we differentiate between legitimate recipients and scam artists? It’s a shame that the SSI program, as originally intended, must be swept up in all this “trigger” furor. But SSI is one more example of Democrat vote buying at the expense of the Defense Department.

But that’s just my opinion.

Crossposted at RWNO, my personal web site.