Larry Summers = Dick Cheney - That's what Spiegel Online says in "Chancellor Merkel visits the debt president."

Extra - Gateway Pundit: "When a far left German mag starts bashing Obama you know the honeymoon is over."

More - George W. Obama.

Cap and trade chimera - According to Powerline, the energy bill that passed through the House of Representatives yesterday doesn't exist. That is, the 1000+ page bill was "replaced" with a 300-page version that nobody read and it wasn't formally incorporated into the original. What gives?

Almost heaven, West Virginia - Today I passed through West Virginia on my way to a relative's wedding in Virginia. There's not much to note here except I saw a coal hopper and a 30-foot cross made out of a crane truss.

Goin' south - I'm heading to a cousin's wedding in Virginia this weekend. Blogging is questionable. See you soon (although probably tomorrow).

The national train wreck

What could I possibly add that hasn't been said about Michael Jackson's untimely death? Fifty years old...damn.

Let's be honest: did anybody really see Jackson living to a ripe old age? Multiple surgeries, a questionable mental state, a dysfunctional support system; it all came together to suck the life, heart, and soul from the man. If he had the strength and willpower, Jackson would have been better off to exile himself and cut the cord from the life that was programmed for him from an early age.

Go fishing. Read some Hemingway. Watch game shows. Make spaghetti. Drive an RV to the Grand Canyon. Get drunk at a NASCAR race.

Too late. Even so, he was planning a comeback tour and the life he's only known. A shame that.

Who knew Gwyneth Paltrow could sing?

It's been a crazy day with a take-home final due and my son's swim meet. So let's just enjoy Gwyneth Paltrow and Huey Lewis from the underrated movie "Duets." Good night!

Beware the Massachusetts model for health care

Here's Mark Steyn:

The minute health care becomes a huge, unwieldy, expensive government bureaucracy it's a permanent feature of life and there's nothing anyone can do about it. That's why Republicans need to resist this in Congress, because if we cross this line we can never go back.

As usual, look to Massachusetts for the triumph of "good intentions" over sound government policy. The Bay State health care mandate that was supposed to expand coverage while keeping costs manageable has resulted in a system 1) twice as expensive as estimated, 2) where nobody can find a primary care doctor, resulting in 3) a spike in expensive ER visits.

But, like the Big Dig, there's no going back. We're stuck with it and the steadily climbing taxes required to support it.

The distaff rule of Sparta

Do you remember this scene in "300" when King Leonidas got the nod from his wife to start a war with Persia?



According to today's Boston Globe, there may be some truth to it:

Feminism is generally associated with modern, progressive society. Yet few people know that ancient Sparta - infamous for its militarism - granted women exceptional rights. Spartan women could inherit, own, and bequeath property; they were fed and schooled as much as men; they had complete freedom of movement; they married later and could even get away with adultery. So why would the tough Spartan men allow this to happen? Upon subjugating its neighbors - whose population vastly outnumbered Sparta’s - Sparta needed its males to focus entirely on training for war and its females to focus on managing the subjugated population and estates. To give the women sufficient capability and incentive, especially in the absence of men, the men had to grant the extra rights to women, the authors of a new study argue. However, as in modern times, more autonomy for women was associated with lower fertility, which ultimately led to Sparta being unable to field a large enough army, losing control of its subjugated neighbors, and rescinding the rights of its women.

Another classic case of overextension, I fear.

Hysterical hyperbole of the day - Firedoglake: "The gravity of America's health care crisis is the moral equivalent of the 19th Century's bloody conflict over slavery. This is not hyperbole..."

Stop right there. Yes it is.

Stealing an election - Interesting, but maybe obvious, point made over at FiveThirtyEight: by Western standards it may be difficult to rig an election because responsibility for the counting is split up, requiring many conspirators. Not so in Iran, where all the votes are "counted" by the Interior Ministry who are beholden to the current government in general and the mullahs in particular.

Happy Father's Day!

Iran - Review and continuous update at Hot Air.

I know that some are annoyed at Obama (ice cream, anyone?) for his measured response to the Iran crisis, but I really don't know what the United States could do about the unrest over there. On the one hand, we want to stand up for freedom and democracy but then we don't want to play into the mullahs' hands by intervening in Iran's internal affairs. Frankly, cellphone cameras and the Internet are the greatest weapons against the Islamic theocracy right now. Let the truth out.

More - Gateway Pundit is all Iran right now. Keep scrolling.

Update (6/21) - It looks like Peggy Noonan largely agrees with me.

All the news that's fit to spin - The New York Times needs to read their own paper; occasionally it contains "facts." The Minuteman reveals how "Emotion trumps research every time."

Extra - Shady poll reporting, also.

Linear programming and stuff - Blogging may be light this weekend as I'm working on my take-home exam for Decision Analysis. It involves a small amount of programming, the likes of which I haven't worked on since my Fortran days.

That's right: I said "Fortran." Laugh it up, kids.

Careful what you wish for, health reform edition - That darn Congressional Budget Office keeps making estimates on health care reform that gives everybody sticker shock. The Atlantic reports that part of the blame for this goes to Obama's budget director Peter Orszag who beefed up the CBO to handle the number-crunching.

The cost estimates may be a little too honest for the White House. Prepare the (more flexible) OMB numbers.

Extra - Maggie's Farm "Health care reform: it's not about you."

More - It has begun: Nancy Pelosi attacks the CBO.

Commentary of the day

Here's Michael Totten on Contentions:

Mahmoud Ahmadinejad has almost no support among Kurds whatsoever. Claiming he “won” 70 percent in Kermanshah is as outlandish as Dick Cheney winning San Francisco and Berkeley in a landslide.

It could happen...in bearded Spock universe!

"Perfectly logical," says mirror-universe Spock.

Republic of fear

I have an acquaintance (friend-of-a-friend) who is from Iran. He probably doesn't me to blog about this, but he was asked if he heard any news directly from home. His response was that he doesn't dare ask about the protests over the telephone for fear of the government listening in. Everything's coming over the Internet.

These crowds of protesters keep growing and I think everybody's waiting to see if it peters out or whether we're witnessing "Tiananmen Square 2" in the making.

More - CNN: "Iranian protesters mostly unfazed by government warnings."

Que sera sera

Driving home today, I heard a news story about California's intractable fiscal problems. And I thought to myself that the Golden State's only option left is to slash spending and "let the chips fall where they may." Then I thought...where did that particular phrase come from?

No matter what the consequences, as in I'm going to tell the truth about what happened, and let the chips fall where they may. This metaphoric term alludes to chopping wood and is usually joined to a statement that one should do what is right (that is, the woodcutter should pay attention to the main task of cutting logs and not worry about small chips).

Thank you, Internet!

Sorry, kids

Economist: "The biggest bill in history"

Not since the second world war have so many governments borrowed so much so quickly or, collectively, been so heavily in hock. And today’s debt surge, unlike the wartime one, will not be temporary. Even after the recession ends few rich countries will be running budgets tight enough to stop their debt from rising further. Worse, today’s borrowing binge is taking place just before a slow-motion budget-bust caused by the pension and health-care costs of a greying population. By 2050 a third of the rich world’s population will be over 60. The demographic bill is likely to be ten times bigger than the fiscal cost of the financial crisis.

H/T Maggie's Farm. I'm so weary of repeating this, but I'll give it another try. There's no point searching under the couch cushions for money to pay for universal health care. That money has been spent a long time ago to pay for Social Security and Medicare. There's nothing left. It's gone.



"The system is unsustainable." Any of this getting through? For heaven's sake, let's not pour gasoline on the fire with a public health care program that will tip us permanently into European socialism.

Maybe they like the little guy - Sister Toldjah: "Independent pre-election polling indicated wide margin of support for Ahmadinejad." Yeah, it stinks that the crazy guy is going to be around for a few more years but, let's face it, nothing much was going to change in Iran anyway. The mullahs hold all the cards and the nuclear program was going to continue no matter what.

Geek speak - Check it out: "Top 20 websites every scientist (or engineer) ought to know." Tragically missing is the Britney Spears guide to semiconductor physics. Science can be fun!

Special request – My cousins are participating in a fundraising walk for the Susan G. Komen for the Cure in the fight against breast cancer. If you'd like to contribute, click here and then hit the button to donate. Any amount is welcome. Thanks!

Twin perks

On a less-serious note, here's a story on the - ahem - "enhanced" benefits available to nurses in the Czech Republic:

PRAGUE - When Petra Kalivodova, a 31-year-old nurse, was considering whether to renew her contract at a private health clinic here, the offer of special perks helped clinch the deal: complimentary German lessons, five weeks of vacation, and free liposuction and silicone breast implants.

This is a family blog, so I'm going to end commentary here.

A blessing for a sick girl is a dilemma for a country

If you want to look into the hard questions that need to be answered before this country lurches headlong into nationalized health care, check out this front page article in today's Boston Globe about a very ill girl with Gaucher disease in Costa Rica:

For Jose and his family, it was as though a hand had reached down to answer their prayers. But in that moment, something else had happened as well: The Cambridge drug company Genzyme had just found its first potential patient in Costa Rica. And now that it had found one, it would supply the drug to Tania, but at an astonishing cost - $160,000 a year, possibly for the rest of her life.

This was far more money than the Costa Rican government had ever paid for a drug, and Genzyme would not bend on the price. The country's health officials were forced to weigh the prospect of a healing gift for one girl against the needs of a nation struggling to care for millions.

Should Tania get the drug?

Costa Rica's health board decided "no".

Costa Rica's healthcare system was considered a success story, and it was succeeding not because it spent freely, but because it spent carefully. The challenge of paying for Cerezyme, a product at the extreme high end of the brand-name drug business, was something new.

Inside the health ministry, a committee of doctors met to decide Tania's case. They reviewed the medical literature on Cerezyme's effectiveness - whether all patients clearly benefited (they don't) and whether Tania would, which was uncertain. In the end, the committee voted, unanimously, to deny the payment.

"We have 600,000 hypertensive patients, 120,000 diabetics," said Chaves in an interview. "That's where they set the priorities."

With help from the American drug company (Genzyme) the Gonzalez family sued the government:

The case reached Costa Rica's constitutional court in July 2003, and the results were swift. At the hearing, Dr. Saborio testified about Tania's diagnosis; he said she definitely had Gaucher disease.

"They asked me what her future would be if she didn't receive the medication. And I told them exactly what would happen: eventually she would die," said Saborio. "And that was it . . . I think there was little doubt about what the right decision was."

It took an hour. The court told Costa Rica that Tania would get her treatment, and Genzyme would get paid.

A happy ending for Tania, to be sure, but there's always the question of how finite resources might have been spent for the rest of the Costa Rican population.

Rigged election in Iran - That's the opinion of U.S. analysts following election returns. The main opponent to Ahmaninijad failed to win his own hometown while another conservative candidate got less than 1% of the vote. So I guess that's a little fishy.

Extra - More from Gateway Pundit on protests in Tehran.

Spending yourself to fiscal balance rarely works. OK, it never works.

George Mason professor of economics Tyler Cowen has an opinion piece in the New York Times where he reviews some arcane economic theory:

The demand for universal coverage sounds like a moral imperative to “take care of everybody,” but in reality it would make only a marginal difference when it comes to the overall health of the American population. The sober reality is that universal coverage is another way to spend money, which may or may not be a good idea.

The most likely possibility is that the government will spend more on health care today, promise to realize savings tomorrow and never succeed in lowering costs. It is rare that governments successfully cut costs by first spending more money.

Mr. Obama has pledged to be a fiscally responsible president. This is the biggest chance so far to see whether he means it.

Spending costs money? Who knew? Thanks, professor!

Creeping towards Europe - Mark Steyn on "The smothering embrace of nanny government": "The British National Health Service is the biggest employer not just in the United Kingdom but in the whole of Europe. Care to estimate the size and budget of a U.S. health bureaucracy?"

Same as it ever was - Contentions declares the victor in the Iranian elections: "The winner: the mullahs"

Stanley Cup game 7 - In only the 15th game 7 in NHL history, the Pittsburgh Penguins are facing off in Detroit against the Red Wings. I don't know who to root for: on the one hand, I'd like to see Pittsburgh win but then hasn't Detroit suffered enough?

Scoreless after the first period. Stay tuned.

Update: Pittsburgh up 1-0 early in the second.

Two-on-one breakaway: Pittsburgh up 2-0.

Six minutes left in the game, the Red Wings score. It's 2-1.

Detroit pulls Osgood. Empty net for the last 1:30.

Pittsburgh wins the Stanley Cup! Hooray for them.

Iranian elections tomorrow - We're probably not going to know the results until Saturday but, according to the Guardian: "Mahmoud Ahmadinejad faces defeat if election not rigged, say Iranian experts."  There's always a loophole.

From what I've heard on the news Ahmadinejad's main opponent, Mir Hossein Mousavi, has been campaigning with his wife and is expected to capture the female vote and the youth vote in a country where a large percentage of citizens are under 30.  Meanwhile, Ahmadinejad has been bussing in supporters for his campaign rallies.

Violence is expected if the vote is close.

Send in the clowns - Via NPR, here's "The least appropriate wedding songs ever."  Be sure to read the comments.

Mixed messages - This editorial from The Truth About Cars urges Americans to "Boycott the GM Boycott" and buy cars from Detroit.  But it starts out with a story about how the author's father's tranny seized up the morning after he bought the Buick home from the dealer.

A gnawing question - Can you trademark a chocolate bunny?  European chocolatiers are in court to find out.

Processed meat products + heat + Jr-bashing - I have to prepare for our annual NASCAR fantasy league picnic tomorrow. There will be hot dogs along with discussions as how Dale Earnhardt Jr. can't find his pit stall with GPS and a neon sign.

All together now - Megan McArdle has a great post explaining how a government health care program largely depends on getting young, healthy workers to subsidize less-healthy participants.  Also, the bureaucracy will be mind-blowing.

Good news, everybody! - Via Free Republic, Comedy Central has ordered new episodes of the greatest show ever: Futurama.  Yay!

One week and counting - Speaking of zombies, the Chrysler sale to Fiat was put on hold by Supreme Court Justice Ruth Bader Ginsberg, pending arguments by Indiana pension managers. Fiat has warned that if the sale isn't finalized by next Monday, everything's off the table, meaning that Chrysler could be liquidated. Yeah, right...Obama's going to let that happen.

It's up to you, New York, New York

Wow, I don't think anybody saw this one coming: "Two Dems defect in NY Senate, control flips to GOP." Ed Morrissey adds some perspective: "What better way to complete a day in which Barack Obama’s economic policies lose the majority in a Gallup poll, Dems lose the edge on the GOP in a Rasmussen poll on economics, and the Supreme Court apparently blocks Obama’s dictatorial dissolution of an American carmaker than to highlight a “parliamentary coup” in Albany, NY?"

Suddenly the zombie party of the GOP is showing some life, and only a little more than 100 days into the Chosen One's administration. Evan Thomas, deploy the sycophantic/teenage crush prose! Accelerate to spending speed! Stand by to release the bonds!

Bye-bye Boston Globe - The Globe's largest union rejected wage and benefit cuts in a narrow vote tonight.

Everybody's paying for the Big Dig

After the federal dollars dried up, the state had to find some other way to pay for the $15 billion dollar project (original cost: $2 billion.) So Massachusetts diverted money from MassPike tolls:

Massachusetts Turnpike commuters have paid $442 million in tolls to cover Big Dig expenses over the past three years, according to a financial analyst hired as part of a class action lawsuit against the Turnpike Authority.
Commuters, politicians, and state officials have long argued that tolls collected on the turnpike have been used to pay off unrelated portions of the $15 billion project, amounting to a back-door tax that unfairly burdens one segment of the public.

It never ends. Can't we fill the damn thing back up with dirt?

Vader and Son



It was difficult to think up the perfect post title to go with this picture from a Boston Globe article. Other potential choices included:

The Force and the Word
The Vader, the Son, and the Holy Dollar
"If you strike me down, I shall become more powerful than you can possibly imagine"
Dark Lord vs. Lord of Light
The Vader and Child reunion is only a motion away
"I find your lack of faith disturbing"

And so on.

Good news from Lebanon - The beautiful Lebanese babes have been deployed because Hezbollah was defeated by a pro-Western coalition in national elections.

Heck of a job, Baracky - Gateway Pundit: "Big government spending programs having opposite effect on economy."  Unemployment is spiking, the deficit is exploding, and the bond markets are spooked because "investors are saying the Fed can't just print money out of thin air..."  So instead of tamping down mortgage rates so distressed homeowners can refinance, nervous bond investors are pushing rates higher.

Extra - Some humor from Vodkapundit: "The grand unification theory of sucking."

From the city that brought you the Big Dig - Boston Globe: "Boston's $300K toilet nearly ready."  The outlandish cost is almost entirely due to the effort of working through Beantown's array of public regulations.

Load the plutonium into the DeLorean - Here's some fun-ness to start off the weekend: "15 essential moments to (re)visit if you had a time machine."  It goes into the past as well as the future (e.g. first contact with an alien species, Cubs win the World Series).

Just off the top of my head, I would add the crucifixion of Jesus, Pickett's Charge at the Battle of Gettysburg, and the moment that Alexander Graham Bell called for Watson and opened the age of telecommunication.  For the future: mankind travels to another planet, Mars I suppose.

Brown down - Expat Yank is on the frontline to Labour's implosion in England.

Unemployment up again - I look forward to Paul Krugman's article explaining how all the encouraged workers are causing the unemployment rate to spike by looking for work.  Perhaps he could start by explaining the shape of this graph.

Extra - Speaking of Krugman, Greg Mankiw all but calls him a liar on public health care reform.

How times have changed! – In the bad ole days we had "discouraged workers" but now we have the "funemployed!"

Also, I checked my 401(k) today and it's "broke-tastic!"

The big one – The Corner: "On Tuesday, President Obama sent a letter to Senators Kennedy and Baucus outlining what kind of bill he wants and will support. And what he wants is a government takeover of American health-care, plain and simple." This will be the largest expansion of entitlements since Medicare and Obama doesn't have the slightest idea how to pay for it.

Extra - More on the health reform cramdown at Patterico.

Thank Washington for that pothole

Boston Globe: "Road fund running low, Obama says"

The Obama administration is warning lawmakers that the trust fund that pays for highway construction will go broke in August unless Congress approves an infusion of as much as $7 billion.

How is it possible that the federal government can spare $50 billion for General Motors, run a $2 trillion deficit, but still not have enough money to keep the roads paved? Seven billion dollars nowadays is a rounding error.

Mortgaging our future

Today Fed chair Ben Bernanke warned that long-term economic growth is endangered by the huge new levels of debt taken on by the federal government. Contentions looks forward to "Our high tax, low growth future"

Since we must scale back fiscal borrowing as we move into the future, there are only two alternatives: to accept far higher levels of taxation, or to accept a U.S. economy that is significantly smaller and slower-growing than it would otherwise have been. (The consequences of the latter, of course,are high unemployment and less material well-being for individuals.)

What would be a logical way to navigate between those alternatives? Adopt a high-tax policy that does as little as possible to burden highly-productive individuals, businesses and capital, thus lessening the impact on the size and dynamism of the economy.

But we already know that the President wants to do exactly the opposite. Faced with an evil choice between much higher taxes and a smaller economy, Obama is on track to give us both.

Right now, Washington is gorging on cheap borrowing supplied by the Chinese. Do they think this can continue? Here's the response when Treasury secretary Timothy Geithner told a Chinese audience about the U.S. Treasury bonds they've purchased: "Chinese assets are very safe."

The comment provoked loud laughter from the audience of students.

Guess not.

So long and thanks for all the Corvettes - Another contributor at The Truth About Cars writes that this is "The End" for General Motors: "In other words, one way or another, GM is heading for liquidation."

At this point, I'd be content if we didn't throw good money after bad once GM looks for Bailout part VIII.

On second thought - With the scenario of terrorists filling mainland prisons looming, suddenly Americans think closing Gitmo is a bad idea.

They all thought I was crazy

Today I was proven correct about something so I'm going to post the Elliot Reed "I told you so" dance:

Eleventeen and kerjillion - The Treasury department is just making stuff up now.  (HT: Maggies Farm)

And then there's this: "U.S. debt = $668,621 per household."

Less is a lot more expensive - Patterico has a good post about how Uncle Ted is trying to impose Massachusetts-style healthcare on the whole country.  Always with the "good intentions" instead of the results, which include costs that are double above projections and a state-wide shortage of primary care doctors.

Extra - WashPost: "Health reform's savings myth"

General Zombie Motors

The automobile blog The Truth About Cars is, of course, all over the bankruptcy of General Motors (keep scrolling and scrolling). According to Paul Niedermeyer, GM has been among the walking dead for 17 years:

How do you write an obituary for an entity that’s been dead for seventeen years? Like that high-school Biology frog-leg experiment, GM’s twitching since 1992 was due to externally administered stimuli. Yes, I would have much preferred to write GM’s obit in ’92. Back then, the guilty party was merely GM’s brain-dead management. It would have been easy just to rag on about all the lame cars they built. But it’s become a lot more complicated and uglier. Now we all have blood (and red ink) on our hands. And it’s not going to wash out easily.

Not to drive a cliche into the ground (with a car cliche!), but there's a lot to suggest that GM's management felt they were "too big to fail." These guys were stuck in a different age of three-martini lunches while the floor mats shifted under their feet.

GM goes down like Frazier - Fox News: "General Motors prepares bankruptcy protection announcement."  Happy now, Michael Moore?

The house with a million balloons

I go to the movies about once a year and last night I caught Pixar's wonderful new offer: "Up."  The story had this sad undercurrent of a curmudgeon widower trying to fulfill a promise to his late wife which was constantly counterbalanced by a pudgy sidekick, a talking dog, and a colorful big bird.  Excellent movie on so many levels.  Plus, I saw the version using Disney's 3D technology which made it an extra-special treat.

"Treat!?!"  I mean, "delight."

The government just put another 50-large on your credit card - USA Today: "Leap in U.S. debt hits taxpayers with 12% more red ink."  "Taypayers are on the hook for an extra $55,000 a household to cover rising federal commitments made just in the past year..."  Ah, the kids are good for it.

Not as complicated as you might think - Over at Maggie's Farm, Roger is telling everyone (especially Republicans) that Obama is not playing a deep game.  Enough with the car dealerships already.

Laodicean - I was going to blog more tonight but I got totally caught up in the National Spelling Bee on ABC tonight.

Impulsive legislation now, cost considerations later

As the national debate on health care reform gains speed, everybody's looking at Massachusetts' experiment in mandated health insurance. From today's Boston Globe there's an article titled "Costs snarling health overhaul – Study finds more are struggling to pay; gains at risk in state's foray into insurance." Here's a telling passage:

While the state is facing cost challenges, he said, implementation of near-universal coverage in 2006 still put consumers here in a better position than in other states. "We should be lucky enough to have those problems [nationally]," Altman said of the challenges outlined in the Urban Institute survey. "If we get to a point where everyone is insured, then we can move on to worry about the affordability of care."

We're not buying a wedding cake here. We're talking about irreversible federal legislation that will dramatically alter how one-sixth of the economy operates. The only issue worth consideration is how to pay for national health care before we indulge in self-congratulation. As usual, the curse of "good intentions" is leading the debate towards the easy work of expanding coverage before considering the costs involved. It's dessert before dinner.

All this, of course is lost on Ted Kennedy who has an opinion piece in today's Globe with five principles of health care reform, only one of which is related to the cost. Predictably, the old chestnuts of "fraud, abuse, and red tape" are rolled out. Let's be honest: fraud and abuse have been around since shipbuilders supplied the Greeks with boats for the Battle of Salamis. New data technologies may help but the main drivers of rising health care costs are an aging population and advanced medical technologies. The irony that Ted Kennedy fails to grasp is that the very technology that has helped him to battle brain cancer would be unavailable for most Americans under a national health care program, no matter how much he wishes otherwise.

One-hundred percent GDP

It's hard to fathom these numbers, but the United States is approaching a new benchmark: we'll soon owe an amount equal to everything we make in a year. From Financial Times: "Exploding debt threatens America"

Under President Barack Obama's budget plan, the federal debt is exploding. To be precise, it is rising – and will continue to rise – much faster than gross domestic product, a measure of America’s ability to service it. The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years.

A government debt burden of that [100 per cent] level, if sustained, would in Standard & Poor’s view be incompatible with a triple A rating," as the risk rating agency stated last week.

When bond ratings drop, it becomes more expensive to borrow money since creditors get worried about getting paid (see: General Motors.) Investors are already getting skittish because it looks like we're going to monetize our debt by driving up inflation. A lot.

The fact that the Federal Reserve is now buying longer-term Treasuries in an effort to keep Treasury yields low adds credibility to this scary story, because it suggests that the debt will be monetised. That the Fed may have a difficult task reducing its own ballooning balance sheet to prevent inflation increases the risks considerably. And 100 per cent inflation would, of course, mean a 100 per cent depreciation of the dollar.

Megan McArdle weighs in:

Eventually the treasury has to roll that debt or pay it off, and if interest rates spike, that can prove catastrophic--just ask Argentina.

Well, Obama promised he wouldn't raise taxes on Americans making under a quarter-mil, but with those darn rich entrepreneurs squeezed along with greedy corporations, there are no jobs and (surprise!) tax revenues are way down. Any other tricks we can try to pay for everything? Enter the value-added tax trial balloon, which will dramatically drive up the cost of buying anything.

To recap: we have pending high inflation + a national sales tax gumming up the cogs of commerce, the rich are hiding their money in the Cayman Islands instead of investing in demonized business, and government borrowing is getting more expensive as interest rates climb. And all this is occurring on the cusp of the entitlement bomb. None dare call it "stagflation" or make comparisons to Jimmy Carter...yet.

Related – Certain states have high tax rates, but they're broke! Wha happened?

Metaphor of the day – Some North Korean official: "We've been living under U.S. sanctions for decades, but have firmly safeguarded our ideology and system while moving our achievements forward. The U.S. sanctions policy toward North Korea is like striking a rock with a rotten egg."

I suppose I should say something about Sotomayor - Well, she seems a reasonable pick for the Supreme Court. There are some cases with which I would disagree (author's rights, reverse discrimination) but nothing disqualifying. And I'm going to refer back to something I wrote back when Democrats were filibustering judical nominees: the President won the election and the executive branch gets to fill the judiciary. Those are the rules.

Sports sports sports sports - I got some stuff goin' on today so enjoy "Top 10 iconic trophies" via Real Clear Sports.

"The longer changes are postponed, the more wrenching they will be" - Robert Samuelson once again discusses the entitlement crisis.  I think he stole this line entirely from me: "The government bonds in these trust accounts will be presented to the Treasury for payment.  Those payments can be financed in only three ways: bigger deficits, higher taxes or spending cuts."  Pick your poison, America.

Happy Memorial Day - My son marched in my town's parade playing "It's a Grand Old Flag." Now I'm watching the (delayed) NASCAR race.

Have a great weekend - I'm going to visit Mom so I'll be back in time for the NASCAR race.  Peace out, y'all.

A company from the era of the Charleston and silent movies

If there's one thing that this blog might be known for, it's my steadfast opposition to a certain program that originated during the Great Depression and has no place in modern society. Now everybody is wringing their hands that General Motors is going to go bankrupt. Here are the other companies that were part of the Dow Jones Industrial Average the year that General Motors joined back in 1925:

American Can
General Electric Company
U.S. Realty *
American Car & Foundry
General Motors Corporation *
U.S. Rubber
American Locomotive
International Harvester *
U.S. Steel
American Smelting
Kennecott *
Western Union
American Sugar
Mack Trucks
Westinghouse Electric
American Telephone & Telegraph
Sears Roebuck & Company
Woolworth
American Tobacco
Texas Company *

"American Smelting?" My point here is that as new businesses rise, old businesses fall. Instead of worrying about the demise of GM, we should be nurturing the next Microsoft. General Motors is like something from a bygone era:

Impervious to irony

WSJ: "Obama signs credit-card overhaul legislation into law"

WASHINGTON -- President Barack Obama put his signature on legislation Friday clamping down on credit-card companies' ability to boost interest rates and slap higher fees on consumers, a measure long-sought by the White House but reviled by the banking sector.

"We're not going to give people a free pass, and we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives," Obama said at a signing ceremony in the Rose Garden.

Ha ha ha! What a joker. By the way, did I say the United States is following California into a hole? Maybe I meant the United Kingdom: "Britain's debt omen"

Even the White House concedes that U.S. debt held by the public as a share of GDP will hit 70% in fiscal 2011, by far the highest level since 1951 and up from 40.8% in 2008, before declining. (See nearby chart.) But that forecast beyond 2011 depends on very rosy assumptions about renewed growth and future spending restraint.

The dollar's standing as the world's reserve currency gives the U.S. somewhat more protection against losing its AAA rating. But the world's creditors are making their own judgments about U.S. fiscal credibility on a daily basis, and those judgments will show up in the value of the dollar and the yields on Treasury debt. Those investors didn't like what they saw yesterday, perhaps because they think the British are showing where out-of-control spending leads.

Next stop: taking Hawaii to the international pawn shop.

Memorial Day weekend is almost here

A book to avoid – A NY Times reporter writes a book saying: "Ooops! We're bankrupt! How'd that happen?" Well, Megan McArdle unpeels the onion on a guy with a six-figure salary living well beyond his means. When your Amazon book page has a discussion forum titled "What a jerk" – well – you're a jerk.

Show me the way to the Granite State – Boston Globe: "Senate approves sales tax hike." At No Looking Backward, Bruce derives the equation for the New Hampshire Retail Radius.

Don't forget the Internet. This past Christmas, I made my first major electronics purchase through Amazon and not only did I avoid sales taxes but I got free shipping. There will be more of that, you betcha.

Power to the (stupid) people

Despite the near-unanimous urging of all the major California papers, voters in the Golden state overwhelmingly rejected a whole range of tax increases to close a yawning state deficit. The LA Times moaned: "California voters exercise their power – and that's the problem."

Say Anything sums up the mood of Californians and the disconnect of the mainstream media:

The context is simple - not only are the people of California selfish in denying their politicians more of their money, they’re just plain too stupid to understand the complexities of what they’re voting for. Taxes are good for you, you stupid little people.
…
By the way, nowhere in the article do they interview anyone who might explain why people are sick to death of the state sucking them dry.
Read the whole LA Times article. It’s as good an example of elitist arrogance and sneering condescension from both the left and the main stream media as you’ll find anywhere.
Voters exercising their rights. The nerve.

Look on California and tremble America. Because if you believe, as Megan McArdle does, that "California is completely, totally, irreparably hosed" then historian Victor Davis Hanson has some really bad news for you:

One would hope this is wake-up call for Obama. His proposals will put the federal government a year or two away from a California-style reckoning. For now, the slash and burn tax approach to "them" (the top 5%) has assured the people that they can spend all this borrowed money on health care, education, cap and trade, and free this and free that. But in about a year's time, as the deficits and interest rates mount, the fed will start looking everywhere for cash, and Obama's "95% of you will get a tax credit" will go the inoperative way of military tribunals and rendition, and we will start to see a real pushback against taxes.

Gold and guns are starting to look like a good investment.

The illusory two-state solution - Jeff Jacoby has a great article today about the Israel/Palestine debate and how everybody thinks the "two-state solution" is a great idea.  Well, everybody but the Palestinians: "Peace isn't an Arab goal."

Rationed care, part 2 - The Wall Street Journal essentially echoes a post I had the other day that health care reform will inevitably lead to limited care to keep costs down: "How Washington rations."

Goin' broke - John Stossel: "The Medicare Ponzi scheme"

They're sensitive about unsecured loans to deadbeats – Atlantic: "Why credit card companies are so mean."

GM = Government managed - Wizbang: "US government to buy GM if it declares bankruptcy"

Must love dogs - I have a standing bet with a guy at work (for a Coke) that Michael Vick will never, ever return to the NFL after serving his sentence for running dog fights.  Well the guy's putting on the suit of contrition: "Vick to work with Humane Society."

Yeah, that's not going to do it.  No team is going to take this guy just to see the field littered with hundreds of Milk Bones thrown by angry spectators.

If only I had been more irresponsible

I keep my credit card charges low and pay off my balance every month.  Therefore, I must be punished: "Credit card industry aims to profit from sterline payers."  Actually, I'm not too frightened because I can't see how credit card companies can bring back annual fees and add-on charges without inviting a consumer revolt.  Hey, man, cash is fine with me.

Don't mess with Texas

There are a lot of interesting stats in this WSJ opinion piece on how low tax states (e.g. Tennessee) are doing much better than high tax states (e.g. New Jersey.) But this statistic is hard to believe:

Texas created more new jobs in 2008 than all other 49 states combined.

How cow, can that be true? Amazing.

Double the estimate, double the fun

Right Wing Nuthouse has "CBO estimates on Obamacare top $1 trillion": "That $1 trillion is a number the Congressional Budget Office is looking at right now. Estimates by others have used $1 trillion as a starting point and go up to $1.5 trillion."

Hmmm...I'm experiencing deja vu here. DC Examiner: "Universal coverage? First, look at the disaster in Massachusetts": "Just a year after the universal coverage law passed, The New York Times reported, state insurers were already jacking up rates to twice the national average."

In other words, no matter what they tell you: double the cost as the baseline minimum.

Mortgaging away our money and freedom

In today's WashPost, Robert Samuelson runs the numbers on "Obama's risky debt"

At best, the rising cost of the debt would intensify pressures to increase taxes, cut spending -- or create bigger, unsustainable deficits. By the CBO's estimates, interest on the debt as a share of federal spending will double between 2008 and 2019, to 16 percent. Huge budget deficits could also weaken economic growth by "crowding out" private investment.

At worst, the burgeoning debt could trigger a future financial crisis. The danger is that "we won't be able to sell [Treasury debt] at reasonable interest rates," says economist Rudy Penner, head of the CBO from 1983 to 1987. In today's anxious climate, this hasn't happened. American and foreign investors have favored "safe" U.S. Treasurys. But a glut of bonds, fears of inflation -- or something else -- might one day shatter confidence. Bond prices might fall sharply; interest rates would rise. The consequences could be worldwide because foreigners own half of U.S. Treasury debt.

This economic gamble in America is based on the concept that we're "too big to fail." Recent history suggests that's a dangerous assumption.

Over at Volokh, there's a post titled "The coming explosion of federal spending" and it concludes with a concept I've explored before when it comes to entitlement spending. When huge portions of the federal budget go on autopilot – that is, pensions, Social Security, Medicare, and interest on the national debt – what does that portend for the future of representative democracy?

It's important to recognize that the gargantuan deficits and looming fiscal crisis likely to result from the Administration's spending plans are just one part of the danger we face. Such massive increases in federal spending also exacerbate the more general problems caused by expanding government control over society. In particular, growing federal spending and regulation will make it even more difficult for rationally ignorant voters to impose meaningful democratic control on public policy. And they will provide numerous opportunities for interest groups to exploit the growth of government for their own benefit, at the expense of the general public.

With the level of borrowing we're taking on, it's not so difficult to see a tipping point where our foreign policy is constrained by international creditors while domestic policy is steered (even more) by banks and lenders. For example, is it such a stretch to imagine that China could own such much U.S. debt that they would attack Taiwan without fear of retribution? What about when the government needs to borrow more money to pay for Social Security Treasuries and the lenders demand higher rates? Our fiscal irresponsibility and failure to address real problems in entitlement spending will subjugate America to the sway of its creditors.

We're putting on the handcuffs.

The Mamas and the Papa's lesser-known song - Opinion Journal: "California reckoning"  Meanwhile, Polipundit has lots of pictures of an anti-tax rally in the Golden State.  I like the one with the Ah-nold overtones: "Don't be a girly man!  Terminate 1-af" which, IIRC, are the tax hike referendums on the state ballot.

Health care reform = rationed care

Get ready for more stories like this, from the Boston Globe: "Hospital strains to cut elder care costs"

Massachusetts General Hospital launched a pathbreaking effort to cut medical costs by reducing hospital stays and emergency room visits by the frail elderly - an initiative that underscores just how hard it will be for the medical industry to make good on its promise to President Obama to pare healthcare spending by $2 trillion over the next decade.

The Globe also has an incredulous editorial about Obama's plan to prestidigitate savings from the current health care system: "$2 trillion saved, just like that?"

The hard truth is that America is aging and Obama is trying to constrain health care costs just as the wave of Baby Boomers is poised to join Medicare. This is like trying to cut gas costs while everybody's crowding onto the bus. And I'm not saying it's not worthwhile to cut health care costs; I'm just saying that there will be inevitable sacrifices to quality. So don't act shocked.

Analogy of the day - Joe Biden : Neil Kinnock :: Maureen Dowd : Josh Marshall

Williams Trivia tonight

I have a trivia game starting at midnight and it's traditional to adopt a team name based on a cultural reference. This year, I'm going with "The lobster's in the pot. Devour! Devour!"

If health care reform doesn't work, we're doomed

Here's David Brooks with "Fiscal suicide ahead" on why it's a longshot:

If you read the C.B.O. testimony and talk to enough experts, you come away with a stark conclusion: There are deep structural forces, both in Medicare and the private insurance market, that have driven the explosion in health costs. It is nearly impossible to put together a majority coalition for a bill that challenges those essential structures. Therefore, the leading proposals on Capitol Hill do not directly address the structural problems. They are a collection of worthy but speculative ideas designed to possibly mitigate their effects.

The likely outcome of this year’s health care push is that we will get a medium-size bill that expands coverage to some groups but does relatively little to control costs. In normal conditions, that would be a legislative achievement.

But Obama needs those cuts for his whole strategy to work. Right now, his spending plans are concrete and certain. But his health care savings, which make those spending plans affordable, are distant, amorphous and uncertain. Without serious health cost cuts, this burst of activism will hasten fiscal suicide.

In related news, less than a week after healthcare industry leaders promised big savings, they were saying "not so fast": "Health Care Leaders Say Obama Overstated Their Promise to Control Costs." Maybe it would have been prudent to get the health care savings up front before we spent the money we don't have.

Whew... - Thank heaven the weekend is here.  I'm tired.

Red ink rising, part 2 - The entitlement crisis in horrifying chart form, via Q&O.  (HT: Maggie's Farm)

Red ink rising

Jacob Sullum on Reason Online: "Obama pretends to be frugal as we sink deeper in debt"

This year, the Associated Press notes, "the government will have to borrow nearly 50 cents for every dollar it spends." Even with optimistic economic assumptions, the Obama administration projects budget deficits of more than $500 billion every year from 2010 to 2019, totaling $7.1 trillion in additional debt at a time when Social Security and Medicare spending will be skyrocketing due to the retirement of baby boomers-a problem Obama has not begun to address.

"We can no longer afford to spend as if deficits do not matter and waste is not our problem," the president said last week. "We can no longer afford to leave the hard choices for the next budget, the next administration-or the next generation." I wish that Obama had some influence on the one who is setting the administration's fiscal policy.

It seems like the man has a problem with simple math.

Apple takes a bite – There are a couple entries on this list of the ten biggest tech failures of the last decade have a common theme. Vista, Zune, Palm, even Sirius XM went up against Apple's technology and lost. (HT: Real Clear Markets)

You ain't seen nothin' yet (deficit-wise)

From Heritage:

The year when Social Security begins to spend more than it takes in, 2016, is by far the most important year. From that point on, Social Security will require large and growing amounts of general revenue money in order to pay all of its promised benefits. Even though this money will technically come from cashing in the special issue bonds in the trust fund, the money to repay those bonds will come from other tax collections or borrowing. The billions that go to Social Security each year will make it harder to find money for other government programs or require large and growing tax increases.

As I've noted, the trajectory for the federal government, even before Obama's spending spree, is towards a system of tax collection on the revenue side and payments to seniors and bankers (for interest on the national debt) on the expenditure side. Discretionary spending? Um...no.

Put it on the credit card - Examiner editorial: "Feds are broke but keep right on spending"  (HT: Gateway)

Also, Jennifer Rubin notes that economists don't believe any of the administration's assumptions: "I don't know how the Obama team intends to avoid the inevitable math."  Well, Jen, the same way he's going to pay for his health care program: magic!  Embrace the unicorn.

The entitlements that won't be there

WSJ: "Medicare,Social Sec Trusts Dwindling Faster Than Expected"

Social Security and Medicare trust funds are expected to run out of money sooner than expected, a report released Tuesday shows.
The report, from the programs' trustees, shows that expenses will exceed tax revenues for Medicare's hospital insurance fund in 2017, two years earlier than was estimated in a 2008 report.
Social Security's trust fund is expected to be exhausted in 2037, four years earlier than last year's estimate. Social Security's expenses are expected to outpace the program's tax income by 2016. On a 75-year horizon, Social Security would need additional revenue equivalent to $5.3 trillion in today's dollars to pay all scheduled benefits.
The report "once again reminds us that the longer we wait to address the long-term solvency of Medicare and Social Security the sooner those challenges will be upon us and the harder the options will be," U.S. Treasury Secretary Timothy Geithner said in response to the data.

Megan McArdle follows up with "The Problem with Social Security"

This year the "it's fine" arguers have a tough uphill climb. The year that Social Security goes bankrupt and cuts benefits by 25% moved up four years, to 2037. The surplus fell 25%. The date that Social Security starts becoming a drain on the general fund, rather than subsidizing it, moved forward a year, to 2016. And suddenly these dates don't sound so comfortably far off, do they?

She refers to the automatic benefit cuts that kick in (by law) once the SS Trust Fund is exhausted. The problem with the "it's fine" argument is that it misrepresents the health of the Social Security system which could alter saving behavior today:

The political risk is that whatever the economic theory, we will not politically be able to continue benefits at planned levels. People who counted on those benefits will thereby be made much worse off, because they will have saved too little on the assumption that the benefits would be there.

Without reform, every worker 40 and under in American can expect only 75% of promised benefits. Forbes wants to let you know that there's a future as a Walmart greeter waiting: "Kiss retiring at 67 goodbye."

Extra – The Trustees' full report is here. (pdf)

More - Red State notes that the SS surplus has been used to hide the true size of the federal deficit. In 2016 (previously 2017), the money stops flowing in and starts flowing out.

Going for the Scrabble record: "Zawahiri in Quetta"

Where does Pakistani Intelligence rate on the credibility index? Somewhere between Joe Isuzu and Nancy Pelosi, I think. Still.....

Ayman al-Zawahiri, al Qaeda's No. 2 leader, the most wanted terrorist after Osama bin Laden, with a $25 million bounty on his head, is holed up near Quetta, Pakistan, according to a highly placed Pakistani intelligence source.

Let's get those satellites lined up.