Welfare-Warfare State

Everything that’s Wrong with the Tax System, in a Single Picture

"I used to think this image was a damning indictment of the internal revenue code. Or here’s another chart showing how the tax system has become more convoluted over time. But this new image may be the most effective of all of them. We don’t know what’s in the other 72,000 pages of tax code, but we’re all familiar with the basic 1040 tax form. Look at what the politicians have done to it over the past several decades." Continue reading →

Continue ReadingEverything that’s Wrong with the Tax System, in a Single Picture

Georgia supervisor, coworkers and four others cashed 1,300 U.S. Treasury checks before authorities caught them

"The former supervisor at an Atlanta mail distribution facility, a coworker and four others pled guilty this month to stealing $3 million in U.S. Treasury checks, including veterans benefits, tax refunds and Social Security checks. By the time authorities figured out the scheme, the small theft ring had stolen or cashed 1,300 federal checks, officials said. And the Georgia workers aren't alone. Between April and September of this year, 171 Postal Service employees were arrested for theft, willful delay or destruction of mail, according to a new report by the USPS inspector general. The Service has about 546,000 employees." Continue reading →

Continue ReadingGeorgia supervisor, coworkers and four others cashed 1,300 U.S. Treasury checks before authorities caught them

The Hidden Cost of Oil

"Prior to its $130 billion social-spending spree, Saudi Arabia needed oil prices somewhere north of $70 to balance the kingdom’s budget, according to the International Monetary Fund. Now the per-barrel cost is reportedly approaching $100. Russia needs something close to $120. Social costs also play a similarly large role in Bahrain, Kuwait, Venezuela, Iran and elsewhere, where oil revenue accounts for up to 90% of domestic income. The United Arab Emirates, for instance, needs oil prices in the $85 range to balance a budget larded with social programs. Tiny Bahrain needs about $119." Continue reading →

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JP Morgan Admits That “QE Will Offset Almost All Of Next Year’s Government Deficit”

"Since the Lehman crisis, the Fed has been purchasing Treasuries and Agencies at a $500bn per year pace. This flow, which is equivalent to around 3.5% of US GDP, has offset more than a third of the government deficit since the end of 2008. In other words, QE purchases meant that the QE-adjusted government deficit has averaged 5.8% of GDP since the end of 2008 instead of 9.3% for the actual government deficit. This week’s Fed announcement means that this QE flow will double from a $500bn pace currently to $1tr. Coupled with a projection of a lower government deficit next year, to around 6% of GDP, this means that QE will offset almost all of next year’s government deficit." Continue reading →

Continue ReadingJP Morgan Admits That “QE Will Offset Almost All Of Next Year’s Government Deficit”

Health Insurers Will Be Charged 3.5% to Use Federal Obamacare Exchanges

"The Obama administration said Friday that it would charge insurance companies for the privilege of selling health insurance to millions of Americans in new online markets run by the federal government. The cost of these 'user fees' can be passed on to consumers. The proposed fees could add 3.5 percent to premiums for private health plans sold in insurance exchanges operated by the federal government. Indeed, it now appears that federal officials could be running the exchanges — alone or in partnership with local officials — in more than half the states." Continue reading →

Continue ReadingHealth Insurers Will Be Charged 3.5% to Use Federal Obamacare Exchanges

How the US Air Force Wasted $1 Billion on a Failed Software Plan

"Last month, [the Air Force] canceled a six-year-old modernization effort that had eaten up more than $1 billion. When the Air Force realized that it would cost another $1 billion just to achieve one-quarter of the capabilities originally planned - and that even then the system would not be fully ready before 2020 - it decided to decamp. You might expect the project to be exotic and experimental. If that were there case, the expense and failure might be understandable, if not desirable. But in fact the project was the implementation of commercial off-the-shelf software." Continue reading →

Continue ReadingHow the US Air Force Wasted $1 Billion on a Failed Software Plan

$9 Billion in Government Checks Result in Some Parents Keeping Their Children Dumb

"This is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability." Continue reading →

Continue Reading$9 Billion in Government Checks Result in Some Parents Keeping Their Children Dumb

Detlev Schlichter: What is wrong about the euro, and what is not

"Merkel is desperately trying to pretend that these governments are not bankrupt, that the debt will be repaid, and in so doing she throws good money – that of the German taxpayer – after bad. Most of the governments in Europe, plus the US, the UK and Japan, are unlikely to ever repay their debt, and the big risk is that, once the 40-year fiat money boom that facilitated this bizarre debt extravaganza has ended for good, a lot of that debt will have to be restructured, which means it will be defaulted on. That is not the end of the world, albeit the end of the type of government largesse that has defined politics in the West for generations." Continue reading →

Continue ReadingDetlev Schlichter: What is wrong about the euro, and what is not

Kyle Bass On The End Of The Debt Super-Cycle

"'When you let the politicians run monetary policy, well, that is how it [ends]... All of the ingredients are there [for Japan now] for this vicious cocktail to fall apart' is how Kyle Bass concludes this broad and succinct recent interview. With total credit market debt-to-GDP globally around 350% (or ~$200 trillion), his thesis remains that many countries will reach their profligate endpoint soon (if not already in Greece's case - where investors have already lost 90c on the dollar); but that managing around this current evolution is the single-hardest period for investing of the last few decades." Continue reading →

Continue ReadingKyle Bass On The End Of The Debt Super-Cycle