Free Republic

Remember the Credibility Gap? It was a phenomenon that rose to public awareness in the late 1960s (and even inspired a funny comedy group) when reporting showed a great difference between what government claimed and reality. It lives. According to Bloomberg: “As California Governor Jerry Brown seeks a temporary 5 percent pay cut from public employees to fill the largest state deficit in the U.S., many of those same workers are poised for raises next year . . .

Despite running up federal deficits at a faster pace than any previous president, Obama says he is not at fault. “Deficits aren’t the result of spending alone,” the President pointed out. “Deficits occur when there is a gap between spending and revenue. If you look at the trends for both you will see that it is the revenue line that has flattened while the spending line has remained pretty much on track with prior periods.” Of course revenues aren’t keeping up because taxpayer earnings aren’t keeping up. Business profits are down. Employees have been thrown out of work. The base...

“[Republicans] run up these wild debts and then when we take over, we’ve got to clean it up.” -- President Obama speaking to donors in Denver touting the fact that federal spending has increased less than 2 percent since 2009.

In an interview for PBS News Hour, US Treasury Secretary Timothy Geithner confessed to being “severely confused” by matters of finance. “A few years ago I was being mocked for messing up my taxes,” Geithner complained. “But, really now, who can figure out the tax code? It’s such a mixed up pile of contradictory rules and instructions that I’d be surprised if anybody got it right.” “This deficit stuff, what’s that all about?” Geithner wondered. “How can the government be short of money? I’ve been to the mint and it seems we can print as much as we need. If...

Only in America could politicians talk about the greed of the rich at a $35,000 a plate campaign fund raising event. Only in America could people attempt to claim that the government still discriminates against black Americans when we have a black President, a black Attorney General, and roughly 18% of the federal workforce is black (only 12% of the US population is black). Only in America could we have had the two people most responsible for our tax code -'TurboTax Tim' Geithner, the head of the Treasury Department and Charles Rangel (who once ran the Ways and Means Committee)- BOTH...

Gov. Jerry Brown on Monday unveiled his revised budget for the coming fiscal year with twin pleas. He pleaded poverty and pleaded with voters to approve more taxes on the November ballot. Both pleas are curious. . .

Wisconsin’s Republican Representative Paul Ryan’s efforts to put the federal government budget on a track to balance in the next decade was widely criticized by Democrats. “This budget is not a statement of our national values,” said Minority Leader Nancy Pelosi (D-Calif). “It represents a bleak future for America,” said Minority Whip Steny Hoyer (D-Md). “It is antithetical to our entire history,” said President Obama. Statistical analysis reveals that Ryan’s budget spends 46% more in inflation-adjusted dollars than Democratic President Bill Clinton’s last budget. It also would put federal spending at 22.2% of gross domestic output vs. the Clinton budget’s...

In President Obama’s address to the Associated Press Luncheon on Wednesday, he claimed that he is preventing disaster. Republican congressman Paul Ryan’s proposed budget cuts would still allow publicly held debt to increase by $5.5 trillion over the next ten years, but to Obama, they mean Americans will be dying from starvation and defenseless from hurricanes and other natural disasters. “Demagoguery” is not too strong of a word to describe Obama’s speech. Two million mothers and young children will be left without “access to healthy food.” Violent crime will soar and illegal aliens will flood across our borders because of...

Treasury Secretary Timothy Geithner argued against letting fears of ballooning federal government deficits interfere with increased government spending. “The federal government’s debt and deficit are no big deal,” Geithner insisted. “It’s not like personal or corporate debt or fiscal shortfalls. It can be canceled at any time. Look, the government makes the laws. It can easily make a law absolving itself from the responsibility to repay borrowed money if it has to.” Geithner hastened to clarify that he was “not advocating such a law at this time, but the power is there if we need it. I don’t think we...

In President Obama’s address to the Associated Press Luncheon on Wednesday, he claimed that he is preventing disaster. Republican congressman Paul Ryan’s proposed budget cuts would still allow publicly held debt to increase by $5.5 trillion over the next ten years, but to Obama, they mean Americans will be dying from starvation and defenseless from hurricanes and other natural disasters. “Demagoguery” is not too strong of a word to describe Obama’s speech. Two million mothers and young children will be left without “access to healthy food.” Violent crime will soar and illegal aliens will flood across our borders because of...

Desperate to spend billions rather than allow taxpayers to keep their money, the California High-Speed Rail Authority boasted Monday that it has cut costs, scaled back and speeded up the construction schedule of a train that should never be built. Like all government boasts, it isn't what it appears to be...

There is so much wrong with the California High-Speed Rail project, it’s getting difficult to stay up to date as new absurdities are revealed almost daily. . . . But Katy Grimes raises an aspect pretty much overlooked, although we and others have mentioned aspects of this aspect previously. . .

The conventional wisdom that nearly infinite demand exists for U.S. Treasury debt is flawed and especially dangerous at a time of record U.S. sovereign debt issuance. The recently released Federal Reserve Flow of Funds report for all of 2011 reveals that Federal Reserve purchases of Treasury debt mask reduced demand for U.S. sovereign obligations. Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis. This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce...

Voters approved $9.9 billion in bonds in 2008 to partially fund California's proposed $33 billion high-speed rail project. The price since has increased to as much as $118 billion. The completion date has been extended 12 years, to 2032. To use $3.3 billion in federal funds, train backers need legislative approve to sell $2.7 billion of the bonds. The Legislative Analyst says more than $700 million a year from the state's general fund would be needed to pay bond interest. Budget-strapped California should not pay for an initial 130 miles of track in the Central Valley that won't connect metropolitan...

Some folks who want to undo the boondoggle also known as California’s High-Speed Rail project took a step closer to that reality yesterday when their ballot initiative was cleared to collect signatures. Republican state Sen. Doug LaMalfa and former congressman George Radanovich seek to derail the train, but now need signatures of 504,760 registered voters to qualify their measure for the November ballot. They’ve have until Aug. 13. We’re hoping they get what they need. But a few obstacles remain, and they aren’t insubstantial...

A new estimate from congressional economists says the government will run a $1.2 trillion deficit for the budget year ending just a few weeks before Election Day. It would be the fourth straight year of trillion dollar-plus deficits. The almost $100 billion spike from earlier projections for the fiscal 2012 deficit comes almost exclusively because Congress passed legislation recommended by President Barack Obama to renew a 2 percentage point cut in payroll taxes and jobless benefits for people languishing on unemployment rolls for more than six months.

Let's stipulate that high-speed trains might be worthwhile. Sometimes. In some places. Now let's make this perfectly clear: California in the foreseeable future is neither the time nor the place. A high-speed rail system for California would be like a canoe concession in Saudi Arabia. Unneeded. Unprofitable. Just plain stupid. So, why do so many clamor for just such an unneeded, unprofitable, stupid idea? . . .

The Los Angeles Times has a news story today about the Moonbeam Express, as we like to call it. Sometimes known as the California High-Speed Rail. The Times sub-headline says: “The high-speed rail line would transform California lifestyles for the better, backers say.” We couldn’t have said it better. There, in one concise sentence, is the problem. . . The problem with that is the train’s backers are almost exclusively agents of your government, a coercive group that doesn’t persuade, it, well, coerces. The government wants to transform your lifestyle. . .

California's high-speed rail project has been plagued with cost increases, delays and political shenanigans since 2008, when voters authorized $9.9 billion in bonds to help pay for it. Unsurprisingly, recent weeks have brought more of the same. The independent Legislative Analyst now says the state must repay more than $700 million annually if bonds are sold to build an initial 130-mile Central Valley route. Ultimately, the plan would link San Diego and San Francisco. But to get $3.3 billion in federal funds, train authorities agreed to put the first tracks where populations are sparse, rather than in densely populated areas...

Standard and Poor downgraded the credit rating of the USA from AAA to AA+. Add in the fact that they downgraded the credit of institutions such as Freddie Mac and Fannie Mae for being too reliant on government (shocker!), are mulling downgrades of Britain and France, and said they might downgrade the USA again in a few months if the situation doesn't improve, and we're looking at financial free-falls worldwide. This of course has prompted a renewed interest in American debt, since the S&P said that was the main factor in this downgrade. In fact this morning John Chambers, Managing...

California's tax burden, according to the Tax Foundation, is heavy. The Register reported that per-person state and local taxes, fees, licenses and "intergovernmental revenue" amount to $8,634, ranking California 13th-highest among the states. California businesses fare worse, the Tax Foundation said, ranking 48th in tax climate, based on corporate, income, sales, property and unemployment insurance taxes. What's unsaid is the effect on individuals of extremely high corporate taxes. Companies not driven out of state or out of business are less likely to hire or expand, more likely to contract and struggle to provide for current employees...

President Obama told an Atlanta TV station this week that the reason he's unable to live up to his campaign promise to cut the deficit in half is "because this recession turned out to be a lot deeper than any of us realized." But Obama's own budget documents show that this excuse doesn't hold up very well.

Considering the state of this state and the condition of the world, the so-called "Public Employees Bill of Rights Act" might be mistaken for satire. The problem is, Assembly Bill 1655, is serious. It aims to give unionized California government workers "more workplace discipline protections and first dibs on state government work," as the Sacramento Bee put it...

The White House has released their proposal for the Federal Budget for 2012. Before we discuss the 2012 budget, harken back to President Obama saying in 2009 that he will CUT the deficit in half by the end of his first term. His first term ends in January 2013, so he has less than a year to accomplish his promise. The projected deficit for 2012 is forecast to be $1.33 trillion, 2.6% higher than the $1.296 trillion deficit in 2011 and 16% higher than the $1.15 trillion projection released by the Congressional Budget Office (CBO) last week. This is a...

Let's think about the kind of mess that we're in. Federal 2010 Medicare and Medicaid expenditures totaled $800 billion. The projected annual growth of both programs is about 7 percent. Social Security expenditures are more than $700 billion a year. According to the 2009 Social Security and Medicare trustees reports, by 2030, 49 percent of federal revenues will go for Social Security and Medicare payments. The unfunded liability of both programs is already $106 trillion.But not to worry. The Congressional Budget Office estimates that it's possible to sustain today's level of federal spending and even achieve a balanced budget. All...

It's not good when people want to raise taxes. But, ironically, it may turn out to be good that so many different people want to raise taxes in California. It appears increasingly likely that three competing tax initiatives will appear on the November ballot, which could result in voters rejecting them all. We don't often agree with Gov. Jerry Brown, who is pushing one of the three tax increases. But we do agree with the governor that several initiatives on the same ballot could confuse voters and divide the pro-tax vote, resulting in none of them passing. The difference is...

In a brazen denial of the obvious, Gov. Jerry Brown now insists the proposed California high-speed rail can be built for much less than its own business plan stipulates, and wants to use anti-global-warming carbon taxes to underwrite the proposal, whose price tag has nearly tripled in the three years since voters approved it. The governor seems intent on demonstrating how California's state government has burdened taxpayers with mounting debt, while overspending to create consecutive years of budget deficits. . .

Stunning. That’s really the only word we can use to describe the release of a “sensitive and confidential” 57 page memo, written by then soon-to-be U.S. Treasury Secretary Larry Summers in December 2008, about what became President Obama’s signature economic program in the first year of his presidency: the “stimulus package”. James Pethokoukis has summarized some of the most significant aspects of the memo, which we’ve excerpted below, and which reveals the Obama administration’s thinking behind what became an over 821 billion dollar boondoggle. The bold text represents Pethokoukis’ summary of that thinking, which is directly followed by a supporting...

FLASH! BULLETIN!! NEWS ALERT!!! State Controller John Chiang has announced that California will run out of cash by early March. Yawn. Haven’t we heard this before? So, what’s Chiang’s best advice? The state will have to take swift action to find $3.3 billion through payment delays and borrowing, he writes in a letter to state lawmakers today. Yawn. Let’s see, what got the state into this mess? . . .

Gov. Jerry Brown, that renown budgetary and fiscal expert, says don’t fret. His high-speed train to nowhere in particular won’t cost as much as nearly everyone who has looked at it says it will. And besides, he says, the Moonbeam Express can be paid for by your carbon footprint. Is it starting to make sense? The carbon scare was used to put into place effective and real taxes on stuff like that air you exhale. And now we find out why. It’s an endless source of your money to pay for their follies.

Gov. Jerry Brown, in his annual State of the State message, said Wednesday that "California is on the mend." But what the still-ailing state needs, he said, is more medicine in the form of higher taxes, intrusive regulations and more debts to pay off. Someone needs to tell Dr. Brown that bleeding patients kills them, as the medical profession discovered long ago. The governor said not only must Californians increase sales taxes on everyone and income taxes on the most-wealthy, but he also proposed increasing the state's debt by issuing bonds for a high-speed train that polls say voters don't...

Appearing on Fox News’ Hannity, Sarah Palin reacted in disgust to a clip from Gayle King‘s interview with First Lady Michelle Obama, where she said Americans were “confused” about how much had been accomplished by the President. “Oh, Lord. Oh, Lord — what are we just a bunch of numbskulls out here in the heartland of America?” Palin exclaimed incredulously. “Just a bunch of numbskulls who can’t read the unemployment numbers and see that 5 trillion dollars in new debt later under her husband, President Obama. 5 trillion dollars more! And we have fewer jobs today than we had before...

In Mauston, it’s easier for the School District to fire teachers. In Jefferson County, seniority no longer determines who is laid off or promoted. In Waukesha County, road maintenance workers can’t count on overtime pay when they work odd hours. In New Berlin, teachers work longer days and can wear school sweatshirts on only a limited number of days. Across Wisconsin, school districts and local governments are replacing union contracts with policy manuals that give public administrators a clear upper hand for the first time in 50 years under a state law that essentially ends union rights for most public...

Military Spending: The head of the House Armed Services Committee says already enacted and looming defense cuts could cost the economy a million and a half jobs. It could cost the nation much more than that. As we've written, the upcoming mandated cuts in defense spending, on top of already enacted cuts,are real cuts, not cuts in the rate of growth. They are deep cuts in the budget baseline that will impair military readiness and our ability to meet our commitments and respond to crises around the world. They will also take a toll on the nation's job picture. Rep....

WATCH: Heartbreaking Video Of Italian Minister Bursting Into Tears While Announcing Pension Reforms Joe Weisenthal Dec. 4, 2011, 5:05 PM We're not sure exactly what Welfare Minister Elsa Fornero saying, but obviously announcing reforms to pension systems is an emotional subject, as it means more pain for seniors on fixed incomes. (via Hugo Dixon). A commenter translates part of her statement: "I'm sorry. The people who work have no more money to give you. As a result, the pension age will go to 62 years old for woman, and 65 years old for man. No longer can we afford to...

The so-called Super Committee composed of a dozen members of Congress failed to agree upon the required $1.2 trillion cut to planned increases in federal expenditures for the next decade. The sequestration that will now kick in will hold the increase in federal spending to $1.6 trillion dollars between 2013 and 2021. The fact that the amount of spending will continue to expand regardless of whether the Super Committee accomplished anything was belittled by Press Secretary Jay Carney. “The impact of anything they might’ve done is minor compared to the fact that they failed to do anything,” Carney explained. “It...

SUPER FAILURE: Deficit Committee Certain To Announce Failure Tomorrow Zeke Miller Nov. 20, 2011, 8:33 AM It's over. After months of posturing and secret negotiations, the super committee has failed at its task of reaching $1.2 trillion in deficit cuts. Via POLITICO's Mike Allen: The official deadline for action by the Joint Select Committee on Deficit Reduction is Wednesday, the day before Thanksgiving. The real deadline is Monday night, since any plan has to be posted for 48 hours before it's voted on. So conversations this weekend revolved around how to shut this turkey down. Aides expect some "Hail Mary"...

Democrats and Republicans may never agree on the multiplier from government stimulus, but that debate is increasingly about the past. What matters now is that the multiplier — whatever it is — is diminishing as policymakers try to erect something of a fiscal roller-coaster. Even deeper payroll tax cuts proposed by President Obama for 2012 would, at least on paper, be followed by an abrupt reversal and a ramping up of tax increases on higher earners. The policies spelled out by the White House would mean a jarring $380 billion tax hike in fiscal 2014 compared to 2012, equal to...

The odds of Ron Paul being nominated by Republicans and defeating President Barack Obama are, in the words of one news service, "beyond remote." Perhaps. But Mr. Paul's "Plan to Restore America" is breathtaking, nevertheless. Candidates whose success may be less remote would do well to adopt this plan in large measure...

Right about the date of Republican debate last week it started to rain pretty heavily here in Napa County. Rains like this are rare for early October. A rainfall right before the grapes are picked can form a fungus on the grapes called Botrytis, which can distort the fermentation of the grapes when the winemakers try to ferment the grape juice into wine. Within a few hours, grapes in Napa and Sonoma Counties, at least the most vulnerable chardonnay and sauvignon blanc grapes, were being picked before the fungus could set in. Traffic here was pretty bad, with those flat-bed...

COMPLETE TITLE: STEVE WYNN Goes On Big Rant About Occupy Wall Street, Obama, Deficits, And Anger At The Government ### Classic. On the conference call for Wynn Resorts, CEO Steve Wynn went on a big rant on Occupy Wall Street, Obama, and deficits. Here are our notes in raw form. It's all mostly paraphrased. In a nutshell, he says: Deficits are killing us, our dollars are worthless, and the Democrats are bankrupting the country and vilifying anyone who's successful. So naturally, people are protesting. *snip* You're seeing it taken to the next level in Greece. People are trying to break...

WASHINGTON (AP) -- The government ran a $1.3 trillion for the budget year that ended last month, the third straight year it has operated more than $1 trillion in the red. The 2011 budget deficit was the second highest on record. It's slightly ahead of the previous budget year's $1.29 trillion deficit but below the $1.41 trillion imbalance record in 2009. A decade ago, the government was running surpluses and trillion-dollar deficits seemed unimaginable. But those deficits now loom over tense negotiations in Washington. Lawmakers are under pressure to agree by Thanksgiving on where they can cut $1.2 trillion over...

I want to welcome this groundbreaking scientific expedition to the savage lands of the Left Coast. You are here in California to answer an important theoretical question and now you have your answer. Yes, this is what Barack Obama’s second term would look like. Study it. Fear it. And then go home and make sure that it never happens to the rest of the country. Of course, in spite of all of its problems, California is still one of the best places in the country to build a successful small business. All you have to do is start with a...

Insisting that “things are much better than most people think,” Vice-President Joe Biden said he is “comfortable with the idea of phasing former President George Bush out of the conversation when it comes to the economy.” “A narrow focus on unemployment and deficits misses the overarching improvements we have achieved since Barack Obama took office,” Biden cautioned. “Look, if you’re among the 9% who are unemployed it’s a bummer. But if you’re one of the 91% who has a job your commute to work is easier since fewer people will be driving to jobs on the streets you use. So,...

For several years, a heated debate has raged among economists and policymakers about whether we face a serious risk of inflation. That debate has focused largely on the Federal Reserve — especially on whether the Fed has been too aggressive in increasing the money supply, whether it has kept interest rates too low, and whether it can be relied on to reverse course if signs of inflation emerge. But these questions miss a grave danger. As a result of the federal government's enormous debt and deficits, substantial inflation could break out in America in the next few years. If people...

The majority of economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced only or primarily through spending cuts. The survey out Monday found that 56 percent of the NABE members surveyed felt that way, while 37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases. As for how to reduce the deficit, nearly 40 percent said the best way would be to contain Medicare and Medicaid costs. Nearly a quarter recommended overhauling the tax system...

The New York Times recently ran an "analysis" article entitled, "Debt Problem's Sure Cure: Economic Growth." This is something that falls into the category of "Gee, why didn't I think of that?" All you need is growth, so let's go get us some growth! That will take care of everything! Journalist Catherine Rampell asserts, There is, in theory, a happy solution to our debt troubles. It's called economic growth. No need to raise taxes or cut programs. Just get the economy growing the way it used to. Rampell admits that this is a dicey proposition. She holds to the belief...

I'm really getting tired of hearing about Bush's spending compared to Obama's (don't get me wrong, like most conservatives, I didn't approve of Bush's spending either). I'm also tired of hearing about Clinton's surplus (you know, the surplus where we continued to fall deeper in debt...). Congress (specifically, the House) has the greatest authority over the purse. Want a better picture of federal financial management since Reagan? Here it is... Notice that both Reagan and GHW Bush had to deal with Democratic Congresses and we had deficit spending. Clinton was prevented from implementing "Hillarycare" early in his presidency and the...

The U.S. dollar may weaken and Treasury yields rise when Asian markets reopen on Monday, though any selling in response to ratings agency S&P's downgrade of the United States is likely to be tempered by the escalating crisis in the euro zone. The S&P cut in the U.S. long-term credit rating by a notch to AA-plus is an unprecedented blow and results from concerns about the nation's budget deficits and climbing debt burden. It called the outlook "negative," signaling another downgrade is possible in the next 12 to 18 months. "The initial reaction will be a high degree of uncertainty...

With a debt ceiling agreement finally in place and the Senate on track to approve it today congratulations are being handed out all around.  Armageddon and catastrophe has supposedly been averted. And politicians are rushing to put the best face on the deal.  Unfortunately, the new agreement does not accomplish as much as many had hoped, or as much as it should have, in terms of curbing spending and continued deficits. This explains why stock markets continued to fall despite the supposedly "good" news. The reason is because, once again, politicians are continuing to push the problem to the future. ...