Talent works, genius creates.
Robert A. Schumann
Nightmare on Main Street
Quote from Cox and Archer, WSJ:
The actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure. As of the most recent Trustees' report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion.When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion.Quote from Barack Obama, ABC:
We don’t have an immediate crisis in terms of debt. In fact, for the next 10 years, it’s gonna be in a sustainable place.The GOP's Young Turks
I don't mean to exclude Utah Senator Mike Lee and Michigan Congressman Justin Amash (whom I recently featured in a Stossel clip). Rand Paul is riding a wave of popularity following his phenomenal filibuster of the Brennan nomination as CIA Director and nipped Marco Rubio at the Presidential straw poll at this year's just concluded CPAC. I've telegraphed in past posts, I would have supported Rand. When the conventional pundits talk about 2016 and say going up against Hillary Clinton, Paul's more pro-liberty positions, including a more scaled back military and foreign policy, could draw significant support from the Democratic coalition, including young people and suburban women. (Would women, like blacks in the case of Obama, miss their historic opportunity to put a woman in the White House? I'll simply say I think that blacks have been the most reliable and cohesive segment of the coalition and point out that the female vote wasn't enough for Clinton in 2008.) I think a lot depends on the next 2-3 years. I think Clinton will find it difficult to distance herself from Obama's policies and record. It'll be a natural change election year. If something like the bond market melts down or the Middle East flares and we enter a global recession, the Democrats are done, no matter who they run. They will try to run a European-style fear-mongering anti-austerity campaign.
But I think Rand Paul will be able to argue that his nomination would represent a fresh start, a break from decades and his alternative approaches to civil liberty and less interventionism in foreign policy would win broad support. His biggest problem? Law-and-order/military conservatives will try to portray him as soft on defense. The GOP primary debates turned into handicapped tag team matches beating up on Ron Paul. How would I respond? First, I would argue the real issue is nation building, we spread our military thin with our operations in Iraq and Afghanistan, and they were very expensive in blood and treasure. We need to choose our battles more carefully. Second, I would point out a more limited, focused military is consistent with the Founding Fathers and conservative movements in American history.
For Dianne Feinstein's thin-skinned response "I am not a sixth grader" to Sen. Cruz, she earns her first nomination for my tongue-in-cheek JOTY awaud.
Ridley vs. Ehrlich, Malthus, et al.
The idea that there are unintended good consequences to utilization of fossil fuels is not in your typical environmentalist talking points. Ridley is also correct: we need to stop the insanity of ethanol mandates. Even the patron saint of US environmenalism, Al "I got a Nobel Prize and GWB didn't" Gore admitted supporting corn-based ethanol was a policy error.
Rick Santorum And Bella
The former Pennsylvania senator and runner-up in last year's GOP nomination battle and I differ on some political issues, but I admire him and former Governor Palin for their choice of life for their youngest respective children (with special needs). You may recall that Santorum had to take time off the campaign trail when his precious daughter Bella, a gift from God, was hospitalized. Bella has Trisomy 18, a genetic disease involving an extra chromosome; Bella is one of those 1 in 10 Trisomy 18 children to survive past her first birthday. In his weekly column, Santorum pays tribute to a few private-sector support organizations for families with special-need kids.
The USPS Unions Are Annoying Me Again
Is it just me or are the unions blanketing cable TV lately, griping about the Congress having put Draconian "unfair financial demands" on the Post Office, closing post offices, and stopping Saturday delivery? Let's be clear: what the union is protesting is the funding for unfunded retirement liabilities for postal workers (PAEA). The USPS is an anachronism; why the accelerated funding? USPS' cash cow business, first-class mail, is in decline. The decision is correct: postal customers, not the taxpayer, should pay USPS costs. As Reason points out, prefunding is unusual but not "extreme".
From a business standpoint; technology has obsoleted the need for mail where messages can be sent or received instantaneously, as well as orders, bills, financial transaction confirmations, etc. Should we be surprised if newspapers and magazines are ceasing publication due to drops in circulation or print advertising, we also see drops in mail catalogs and related mailings? Increased prices (via supply and demand curves) could accelerate the transition online. At the same time, costs are labor-dominated and remain excessively sticky high.
No, the issue is not because Congress doesn't want to bail out yet another government failure: it has to do with a failing business model (Cato has a more detailed discussion here). The union is correct that Congress is part of the problem, but not because of PAEA. It's because Congress gets in the way of closing money-losing post offices for the same parochial reasons that hamper domestic military base closures, managers lack sufficient authority to set prices, deploy personnel, etc. It's very clear that the best solution is to PRIVATIZE the USPS as has been done in Europe and elsewhere.
It's Time For the US Government to Get Out of the Way
of Exports
Consider the following table of natural gas prices.
Location
|
Price ($/MMBtu)
|
|---|---|
Lake Charles, La., USA
|
$3.01
|
Cove Point, Md., USA
|
$3.34
|
United Kingdom
|
$9.94
|
South Korea
|
$17.75
|
Japan
|
$19.75
|
China
|
$19.35
|
Rio de Janeiro, Brazil
|
$16.84
|
Source: Waterborne Energy, Inc., via Federal Energy Regulatory Commission Via Motley Fool
The argument by crony interests like domestic chemical or steel companies is they worry that exports will result in less ample domestic supplies, pushing up their costs. But low domestic prices also provide less incentive to develop new sources, build related infrastructure, etc.; domestic suppliers have scaled back operations. The same mercantilist argument could be applied against the export of any locally produced good or service. As Perry of Carpe Diem and others point out, we are already exporting carbon-based energy to multiple trading partners. Not only would our trade deficit improve with natural gas exports; it also would shore up purchasing power of the dollar and provide funds for exploration and development.
Political Cartoon
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| Courtesy of Lisa Benson & Townhall |
Led Zeppelin, "Whole Lotta Love". This song is about as hard rock as I get. I couldn't do a cameo retrospective of Zeppelin without covering this classic signature hit. I'll start the Backstreet Boys with my next miscellany post; I'm generally not a fan of boy bands (occasionally there's a decent song like BBMak's The Ghost of You and Me).
