Welfare-Warfare State

Peter Schiff: Detroit Broke City

"The good news is that the same forces that built Detroit could help turn it around. First off, Detroit needs to default on its debt. This means the bond holders and the citizenry will suffer. But after this painful process is complete, Detroit will have a few things going for it. It will boast abundantly cheap real estate and plenty of desperate workers. [..] Liberals would rather the unemployed stay that way rather than suffer the degradations of capitalism. So instead of such honest cures, look for Detroit to borrow its way out of the crisis while pretending to fix its chronic problems. If we laugh at their foolishness, we should all look in the mirror." Continue reading →

Continue ReadingPeter Schiff: Detroit Broke City

Population trends cloud Europe’s post-recession outlook

"Slowly but unsurely, Europe is facing up to population trends that will sap long-run economic growth. Some countries are getting an early taste of difficulties that await Europe as the continent's baby boomers retire and, because of flagging fertility rates, the average age of those left in the labour force rises. Spain, Portugal and Ireland all lost about 2 percent of their working-age adults between 2010 and the first quarter of 2013, raising the question of who pays for pensions and age-related health care costs in countries that are educating their youngsters only to see many of them emigrate and pay taxes elsewhere." Continue reading →

Continue ReadingPopulation trends cloud Europe’s post-recession outlook

Bankrupt Detroit Receives Less U.S. Aid Than Colombia

"President Barack Obama proposed giving Colombia about $323 million in aid next year, mostly to combat drug trafficking and violence. Detroit, with an 81 percent higher homicide rate, will get $108.2 million. Detroit’s implosion has rekindled debate over how and whether a federal government that managed to provide more than $700 billion in aid to banks and automakers in 2008 and 2009 should help cities with unsustainable retirement debt, hollowed-out tax bases and diminished services that endanger the public. From 1990 to 2010, the percentage of the U.S. population that lives in urban areas grew to 81 percent from 75 percent." Continue reading →

Continue ReadingBankrupt Detroit Receives Less U.S. Aid Than Colombia

Company pensions in peril as shortfalls hit record

"Young workers may want to start counting on something other than company pensions to fund their retirements. It turns out that the plans of S&P 500 companies are underfunded to the tune of $451.7 billion, a number that has grown some 27 percent in just the last year alone. Though many workers have switched to 401(k) plans over the years, pensions still have far more workers—91 million to 51 million. This year actually was supposed to be better for pensions under an accounting trick Congress approved in 2012. The move would allow corporations to use a 15-year average of bond yields, rather than the current level, to calculate their obligations." Continue reading →

Continue ReadingCompany pensions in peril as shortfalls hit record

Chart Of The Day: Foreigners Are Quietly Getting Out Of Dodge

"While the Fed is posturing daily whether it will or it won't monetize an ever greater portion of gross US issuance (and considering the drop in US funding needs, unless the Fed tapers it will soon very soon buy more than 100% of all 10 Year equivalent issuance going forward), foreigners have made their position vis-a-vis US paper loud and clear. What is their position? The following chart from today's TBAC presentation to the Treasury makes it very clear. With an ever declining, and recently the smallest on file, notional amount of Treasurys at auction going to foreigners since 2009 (and certainly much further back), they are not sticking around to see what happens." Continue reading →

Continue ReadingChart Of The Day: Foreigners Are Quietly Getting Out Of Dodge

Four Charts Showing How Obama’s Statist Agenda Is Hurting Jobs and Growth

"Let’s look at the Minneapolis Fed’s data for every business cycle since the end of World War II. As you can see, we’re currently mired in the most anemic recovery on record. The employment data is even worse than the GDP data. The comparison of Reaganomics with BushObamanomics is startling. There was a jobs boom in the 1980s, while today we haven’t even recovered all the jobs lost during the downturn. And if we look at the current 'recovery' compared to all other business cycles, it becomes even more apparent that big government is generating very bad results for the American people." Continue reading →

Continue ReadingFour Charts Showing How Obama’s Statist Agenda Is Hurting Jobs and Growth

Obama set to sign bill to lower student loan interest rates

"The House of Representatives on Wednesday passed a bill that would reverse a recent hike in federal student loan interest rates, lowering them to 3.86 percent for undergraduates in the new school year. The bill pegs interest rates on student loans to the 10-year Treasury note plus 2.05 percentage points for undergraduates, and plus 3.6 percentage points for graduate loans. The bill, a result of extensive negotiations in mid-July among a coalition of U.S. senators composed of Democrats, Republicans and an independent, now waits to be signed into law by President Barack Obama." Continue reading →

Continue ReadingObama set to sign bill to lower student loan interest rates

Obama offers ‘grand bargain’ on corporate tax rate, infrastructure

"Obama wants to cut the corporate tax rate of 35 percent to 28 percent and give manufacturers a preferred rate of 25 percent. He also wants a minimum tax on foreign earnings as a tool against corporate tax evasion and the use of tax havens. Obama wants the money generated by a tax overhaul to be used to fund such projects as repairing roads and bridges, improving education at community colleges and promoting manufacturing, senior administration officials said. Republicans contended that by spending the revenue, it would violate Obama's previous commitment to a 'revenue-neutral' overhaul of corporate taxes." Continue reading →

Continue ReadingObama offers ‘grand bargain’ on corporate tax rate, infrastructure

The Debt Ceiling Battle Is Coming

"A working paper by economist James Hamilton, of UC San Diego, for the National Bureau of Economic Research indicates that the official federal debt, $16.7 trillion, is the tip of the iceberg. Currently, the feds are $86.8 trillion in debt, according to Hamilton. The Treasury department has been looting government pensions to hold the debt ceiling at bay. This can go on for another month or so until the battle in Congress begins again. Sunday, Treasury Secretary Jack Lew pre-empted the debt ceiling fight with a strike against the GOP on Meet the Press. Lew predictably blamed the debt ceiling for the S&P crash of summer 2011." Continue reading →

Continue ReadingThe Debt Ceiling Battle Is Coming

Federal Debt: Frozen for Two Months. A Miracle!

"How is is it that the official debt of the United States government has been frozen at $16,699,396,000,000.00 for over 70 days? The Secretary of the Treasury is not saying. He merely reports that this is the case. 'Trust me.' Congress is trusting him. The Media are trusting him. The voters are trusting him. How does the U.S. government deal with an annual deficit of at least $600 billion, yet the official, on-budget debt does not change for over two months? Inquiring minds want to know. Actually, they don’t want to know. This willingness to believe in miracles is part of the national pastime: 'kick the can.'" Continue reading →

Continue ReadingFederal Debt: Frozen for Two Months. A Miracle!