Author: bill

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Senator Bunning’s Unappreciated Gifts

Up until Senator Bunning’s actions our legislators seemed to be acting more like the parents of an addicted child. Parents initially hope they can buy their way out of their child’s problem. Eventually they realize the compassionate solution  is tough love. I suspect that Senator Bunning’s actions reflect this thinking and that there is probably wide spread support for our legislators to stop the shell game style financing schemes. It is time for our legislators to embrace tough love.

By Alan Reynolds

Sen. Jim Bunning (R., Ky.) blocked “extended” unemployment benefits beyond their scheduled expiration on February 27. That thwarted bill would also have put off, again, a scheduled 21 percent cut in Medicare payments to physicians. Democrats were outraged. But why?

Bunning just wanted to use leftover “stimulus” money to pay for the benefits. Why not? Such transfer payments accounted for over 80 percent of stimulus spending last year.

Besides, as Federal Reserve policymakers noted, the evidence is overwhelming (see here and here) that extending unemployment benefits from six months to nearly two years has raised the unemployment rate by a percentage point or two. I’ve waited since 1991 for someone to prove I’m wrong about that. Nobody has, because nobody can.

If the maximum duration of jobless benefits were trimmed by 13 to 20 weeks (which is all that’s at stake), they would still be far more extended than ever before. But the unemployment rate by the time of this November’s elections would be much lower than otherwise. Would Democrats prefer to go into the elections with an unemployment rate near 10 percent or a rate below 9 percent?

As for Medicare, slashing payments to physicians is the Democrats’ favorite way of paying for expanding Medicaid enrollment and health-insurance subsidies for the non-poor. If they really think that will work, how can they possibly object to saving money sooner rather than later?

[Cross-posted at The Corner]

Senator Bunning’s Unappreciated Gifts
Alan Reynolds
Sat, 27 Feb 2010 22:39:00 GMT

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Things that make me go hmmm…. Geithner: No change to Fannie, Freddie until 2011 (AP)

To the average person the mounting debt being accumulated by the Federal Government is a clear and present danger. According to nationwide polls this is the second most important issue confronting voters. One of the biggest spending areas that appears out of control is the subsidies for the mortgage market. At present most of these costs are being kept off of the Federal books despite the complaints of the CBO and Republican legislators. Ironically sometime before March 31st the Federal Reserve needs to convince someone other than the Federal Reserve to buy the mortgage backed securities. I doubt Mr. Geithner reassured prospective investors with these explanations. It should be interesting to see how high an interest rate will be required to move these securities. Will they resort to selling these securities at speculative rates just to move the securities into private hands? How could a fund manager consider investing in these speculative mortgage backed securities when the Obama administration’s plan is to ignore critical mortgage problems until 2011?

Treasury Secretary Tim Geithner, right, and IRS Commissioner Doug Shulman talk to the media after taking a tour of the damaged Echelon office building in Austin, Texas, on Monday, Feb. 22, 2010. (AP Photo/Jack Plunkett)AP – The Obama administration will wait until 2011 to propose an overhaul of mortgage giants Fannie Mae and Freddie Mac, Treasury Secretary Timothy Geithner said Wednesday, arguing that he wanted to put some distance between a new system and what he called "the worst housing crisis in generations."

Geithner: No change to Fannie, Freddie until 2011 (AP)
Wed, 24 Feb 2010 21:27:04 GMT

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The admissions will be seized on by sceptics as fresh evidence that there are serious flaws…

I agree with Ann Althouse that the admissions make the non-skeptics, scientists and media, look bad. By failing to effectively criticize their own arguments for global warming, these non-skeptics have done more harm to the global progress on environmental issues than anything the deniers could say or do. Now we are confronted with a large amount of global science research of questionable scientific quality and set of global priorities which may be unjustified. This is probably a good time to re-examine the priorities advocated in The Skeptical Environmentalist by Bjørn Lomborg and to re-read the article, The Case for Due Diligence in Policy Formation, by Bruce McCullough and Ross McKitrick. Bjørn Lomborg argues that we are spending too much time on th wrong environmental and social issues.  Bruce and Ross argue that faulty scientific research is consistently leading us to make poor government policies on major issues. As an example we may have a cleaner environment with more jobs if we can unlock the EPA from its view that carbon dioxide is a pollutant that they need to regulate. The article, Time to Repeal New Source Review? (Up to 30 GW of coal-plant upgrades hangs in the balance), makes the argument that the EPA is holding up a lot of jobs and a cleaner environment for the sake of regulating carbon dioxide.

Original link to Daily Mail article:

http://www.dailymail.co.uk/news/article-1250872/Climategate-U-turn-Astonishment-scientist-centre-global-warming-email-row-admits-data-organised.html

Similar article on Instapundit:

SHOCKER: Climategate U-turn as scientist at centre of row admits: There has been no global warming …

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What a real gov does – NYPOST.com

In the NYPost.com editorial, What a real gov does, I think we are likely seeing a break through in the process of constructing a balanced budget. If the polling confirms his position of “no new taxes”, we will likely see major cuts in those school districts, cities, and states across the country “who kicked the can down the road” for the next group of legislators to deal with. I would not be surprised if the polling reveals a preference by the voters to deal with these budget deficit problems now rather later. Although these budget cuts will be very painful the more interesting question is whether the legislators will cut deep enough to start offering modest tax breaks for new business startups and expansions that create jobs in the private sector.

New Jersey Gov. Chris Christie clearly is serious about doing what he was elected to do — getting the budget under control, without reflexively raising taxes.

Noting that Jersey’s current budget contains "the same worn-out tricks of the trade that have become commonplace in Trenton, that have driven our citizens to anger and frustration and our wonderful state to the edge of bankruptcy," Christie on Thursday declared a new day.

Facing a $2.2 billion deficit in the current budget, the governor imposed fiscal emergency measures: By executive order, he froze $1.6 billion in unused state funds and started chopping in the areas where the money is — education and health care.

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Saving Private Keynes

Like the movie Saving Private Ryan it is time for the Keynes economic ideas to go home. It is not that the ideas are necessarily wrong but as Allan Metzer argues in How Obama Got Keynes Wrong, the bPOR(Bush-Pelosi-Reid-Obama) administrations have used the name of Keynes to justify bad fiscal policies.

While the Obama team is laying out huge sums of money, Meltzer says it’s neglecting a key part of Keynes’ plan: You can’t run up a debt without a way to cover it.

Running up huge debts without a plan to pay it off is a bad plan in almost all economic theories. Keynes’s ideas are tainted now so it is time for some ideas that actually have a chance at working. Hopefully our Congress men and women will not need a California IOU moment to spur them on to fiscal responsibility. If they do not start acting responsibly we will probably throw out as many of them as we can in the November elections.

FORTUNE: How Obama Got Keynes Wrong….
Glenn Reynolds
Sun, 07 Feb 2010 19:10:03 GMT

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Obama’s Bank Tax: Missing the Target

I must give a hearty thanks to the Heritage Foundation for this article. I have been pursuing a better understanding of Fannie Mae subsidies ever since the Wall Street Journal published Katrina’s no-brainer idea that everyone should rally around the idea to tax the big banks to recoup the taxpayer-funded bailout. In an interesting twist of word meanings I agree with Katrina that taxing the big banks is no brain idea. It is difficult to understand how the average person finds the wisdom of picking a fight with commercial banks while we ignore the continuing financial disaster at Fannie Mae and Freddie Mac. So while the CBO and the Administration quietly debate when to recognize the increase in the national debt due to Fannie Mae and Freddie Mac and the Federal Reserve frets who will buy the mortgage backed security debt in April, the average person is presumed to be more interested in taxing banks rather than efforts to fix the biggest financial crisis of our generation.

In his State of the Union address Wednesday night, President Obama repeated his call for a tax on banks, calling it “a modest fee to pay back the taxpayers who rescued them in their time of need.” That sounds good, everyone agrees the taxpayer’s money should be paid back. But there’s a bit of misdirection going on here.

As shown in the chart above, most big banks have already paid back the government money they received, with interest. On the other hand, most of the big companies that still owe billions to taxpayers, including Fannie Mae and Freddie Mac, and auto firms GM and Chrysler would not be subject to the tax. Only two big firms, AIG and GMAC, owe the government and would pay the tax. Even in these cases, the “modest fee” won’t add anything to the government’s coffers ”” any taxes they pay would simply reduce the amount the amounts they pay back.

The plan will do nothing to help taxpayers or get bailout money returned to the Treasury. It makes for good rhetoric ”” what politician doesn’t want to sound anti-bank nowadays? ”” but is no substitute for real policy.

Obama’s Bank Tax: Missing the Target
James Gattuso
Fri, 29 Jan 2010 14:51:59 GMT

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Another Way to “read” the Bible and literary classics

About two years ago I decided to read the entire Bible. There are many ways to accomplish this task and I chose a Daily Reading plan served up to my RSS reader courtesy of The ESV Bible. When I started my second round of reading the Bible I increasingly used the audio version. This was much easier on those days when I was tired, unmotivated, and procrastination seemed to rule the day. About a month ago I started downloading podcasts to my phone. I play the reading on my way to work. This had been a very pleasant and fulfilling way to listen to the Bible and take advantage of the lost time during the morning commute. I enjoyed this endeavor so much I decided to listen to free audio books in the afternoon commute. In the morning I listen to the daily Bible reading and in the afternoon I listen to my daily reading of Pride and Prejudice courtesy of AudioOwl. It seems so appropriate that Pride and Prejudice is read by a woman with a British accent.