Free Republic

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...