by | BLOG
Treasurydirect.gov has a feature called, “The Debt to the Penny and Who Holds It”. It is a government website, typically dealing with items such as savings bonds, and is separate from Treasury.gov. It shows some interesting data regarding the current debt:
Current Debt
10/15/2013
Held by the Public
11,926,495,975,191.95
Intragovernmental Holdings
4,820,874,558,898.67
Total Public Debt Outstanding
16,747,370,534,090.62
Here we see that this history feature shows a public debt number that is different from the US Treasury daily reports (which haven’t moved in 150 days) The current amount of total public debt outstanding is a sum higher than the Statutory Debt Limit of $16,699,421,000,000.
Just to make sure that the history feature worked, I did a search from October 14, 2013 – October 15, 2013. It gave these results:
10/11/2013
16,747,411,584,091.53
10/15/2013
16,747,370,534,090.62
The search feature does work, and even shows the increased change from the two days.
To make sure the definitions were correct, TreasuryDirect.gov offers the following explanations:
What’s the difference between the Public Debt Outstanding and the Public Debt Subject to Limit?
The Public Debt Outstanding represents the face amount or principal amount of marketable and non-marketable securities currently outstanding. The Public Debt Subject to Limit is the maximum amount of money the Government is allowed to borrow without receiving additional authority from Congress. Furthermore, the Public Debt Subject to Limit is the Public Debt Outstanding adjusted for Unamortized Discount on Treasury Bills and Zero Coupon Treasury Bonds, Miscellaneous debt (very old debt), Debt held by the Federal Financing Bank and Guaranteed Debt.
So, we have a Public Debt Outstanding that is higher than the current Statutory Limit because it is “adjusted”?
At the same time, our Public Debt Subject to Limit has remained frozen at $25 million under the Debt Ceiling for 152 days.
Why can numbers be adjusted and frozen willy-nilly, so that taxpayers — who fund the government(!) — can’t get a true picture of their money? What numbers are true anymore? What numbers do Congress have to work with while they strut and fret their hour upon the stage over the “debt ceiling”? We the People have none.
by | BLOG
Monday, October 14, 2013 marks 150 days since the Treasury Department’s listing of public debt has not moved. The most current Daily Treasury report (October 10) shows “Total Public Debt Subject to Limit $ 16,699,396,000,000; Statutory Debt Limit $16,699,421,000,000.”
The record for these two entries has remained unchanged since May 17, 2013, the first time it recorded the public debt at $16,699,396,000,000.
Why is this important?
The Treasury reports show that the public debt has stayed at just about $25 million under the statutory legal limit ($16,699,421,095,673.60). However, a review of monthly budget reports created by the Congressional Budget Office (CBO), indicate something else is going on. These CBO reports list the receipts and outlays for each month. They continue to show deficits each month since May 17th, while the records of the Treasury do not show that the deficits have affected the federal debt in any way.
The total amount of deficit accrued in June, July, and August total $127 billion. The report for September, typically published in the beginning of the succeeding month — in this case, October — was not available. The CBO reported, “Because a lapse in appropriated funds has caused CBO to largely shut down its operations, the Monthly Budget Review, which ordinarily would be issued this morning, will not be published today or during the duration of the government shutdown”. We can safely assume it would show a deficit for September.
Despite the rising deficit, the Treasury reports no change in federal debt. What is going on?
Back to May 17th. Jack Lew, the Secretary of the Treasury, penned a letter to John Boehner, Speaker of the House. The letter notes,
As provided by Public Law 113-3, the statutory debt limit was suspended by Congress through May 18, 2013. Because Congress has not yet acted to approve normal borrowing authority after May 18, the Treasury Department will begin implementing the standard set of extraordinary measures that enable us, on a temporary basis, to protect the full faith and credit of the United States by continuing to pay the nation’S bills. These measures are the same ones that have been used in previous debt limit impasses, and are described in detail in an appendix to this letter.
The appendix describes four particular measures that would free up money:
(1) suspending sales of State and Local Government Series Treasury securities;
(2) redeeming existing, and suspending new, investments of the Civil Service Retirement and Disability Fund and the Postal Service Retirees Health Benefit Fund;
(3) suspending reinvestment of the Government Securities Investment Fund; and
(4) suspending reinvestment of the Exchange Stabilization Fund
These four actions were calculated by Lew to “free up approximately $260 billion in headroom”.
The current date for hitting the debt ceiling is sometime between October 17 – November 1, according to recent testimony by Jack Lew to Congress on October 10. Lew described catastrophic consequences for its obligations, citing possible interruption of benefits to Social Security, Medicare, military and veterans among others. However, Lew refused to entertain the possibility of prioritizing payments.. He warned, “If Congress does not act and the United States suddenly cannot pay its bills, the repercussions would be serious”.
In contrast, a memo from Moody’s Investment Service dated October 7, three days prior to Lew’s testimony, painted a different story. Moody’s opined that, ”We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,”. It went on to say that, “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default”.
National Review Online noted that the Treasury department did not respond for comment on Moody’s memo.
Lew has supposedly already gone through the extraordinary measures of $260 billion worth of transaction-suspending these last five months, which might explain how the Treasury reports show no change in debt, leaving a tiny legal limit cushion of $25 million. At some point, those transactions suspensions will have to be made up, along with continuing to pay on our obligations.
In other words, the Administration is currently picking and choosing what parts of government to fund. But isn’t that exactly what Obama is lambasting the Republicans for — offering a budget that suspends the funding of something (Obamacare), an action that is perfectly within their constitutional right to do?
In fact, suspending the funding of Obamacare for a year will have the same fiscal impact as Lew’s current actions: freeing up money. The CBO estimates that it will give us “headroom” of $35 billion over 10 years.
Why does Jack Lew get to decide what parts of government get funded or not funded but the House of Representatives does not?
A interesting thing to note about Lew’s testimony is that, besides rejecting the possibility of prioritizing payments, Lew also declined to be specific about 1) the amount to which Obama wanted the ceiling to be raised and 2) the length of time, i.e. the next deadline. The open-endedness of the position of Obama’s Administration regarding the debt ceiling should raise some red flags for those who are leery of raising it.
Thomas Jefferson wisely observed, “I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared”.
For those who are worried about our public debt, have no fear! The Treasury Department’s FAQ’s already have a solution. Did you know:
“There are two ways for you to make a contribution to reduce the debt:
You can make a contribution online either by credit card, checking or savings account at Pay.gov
You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it’s a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188”
Despite our government shutdown, pay.gov is still up and running, and is happy to accept your money.
(And the 16 trillion dollar question is — if one makes a contribution, will the Treasury department reports show it?)
by | ARTICLES, BLOG
Hey folks —
Just remember, the very same Administration actively blocking your access to monuments, etc is the same Administration now in charge of your access to health care.
by | BLOG, ECONOMY, OBAMA, POLITICS
On the eve of the government shutdown, Obama remarked that “I shouldn’t have to offer anything”, and that he’s always ready to have a conversation:
“Steve when you say what can I offer? I shouldn’t have to offer anything,” Obama said. “They’re not doing me a favor by paying for things that they have already approved for the government to do. That’s part of their basic function of government; that’s not doing me a favor. That’s doing what the American people sent them here to do, carrying out their responsibilities.
“I have said consistently that I’m always happy to talk to Republicans and Democrats about how we shape a budget that is investing in things like early childhood education, rebuilding our roads and bridges and putting people back to work, growing our economy, making sure that we have the research and development to stay at the cutting edge and that deals with some of our long-term debt issues. But we’re not going to accomplish those things if one party to this conversation says that the only way that they come to the table is if they get 100 percent of what they want and if they don’t, they threaten to burn down the house”
So, let’s do a trip down memory lane to see how Obama’s grand budget ideas have turned out in the last few years.
President Obama’s proposed FY2012 budget was voted down by the Democrat-led Senate 97–0. Not one Democrat or Republican Senator would sponsor it, put his name to it, or vote for it. And that budget was no prize—according to the Congressional Budget Office, that proposal never had an annual deficit of less than $748 billion, would double the national debt in 10 years and would see annual interest payments approach $1 trillion per year.
Obama’s proposed FY2103 budget was defeated in the House of Representatives by a vote of 414-0. That was a $3.6 trillion budget proposal that included, among many things, tax hikes and increased energy spending. No Democrats would even vote for that one either.
Obama submitted his FY2014 budget late by two months, in April of this year. By that time, the House had already created and voted on a budget, as did the Senate (first time for the Senate in a few years). OBama’s FY2014 budget was $3.8 trillion this time, and managed to upset both sides of the aisle — the Republicans because it containted more tax hikes, and the Democrats, because it made systemic changes to Social Security. Incidentially, Obama’s budgets were late 4 out of 5 budget cycles, 2010 being the only year he submitted it on time.
So here we have arrived at a government shutdown. Obama’s recent budgets have been continuously and unilaterally rejected by both the Senate and the House, by both Democrats and Republicans, and we are 1616 days without a budget. So please Mr. Obama, don’t offer us anything more. Your ideas have been tried and found wanting. Get out of the way.
by | BLOG, ECONOMY, OBAMA, POLITICS
Do as I say, not as I do. That is the modus operandi of President Obama. He whines to everyone that he despises these Congressional deadlines, and that it is patently unfair of the Republican to let things slide to the last minute. However, that is precisely what he wants. In the time between one deadline to another, Obama himself never presents a plan for anything. It’s disingenuous.
Obama complains that decisions should be discussed and negotiated and worked out, and points a finger at a “do nothing Congress”, but in fact, he wants everything to be done at the last minute. We know this to be true by his leadership, or lack thereof. There is no dealing with cuts or budget items in between crises, unless it is an executive order circumventing the normal process. He continuously talks and talks and talks about how he is “willing to discuss” but then brings nothing to the table as a starting point for discussion.
Classic Obama — full of hot air, no substance; plenty of blame, but no true action. And no, ruling by Executive fiat to avoid being to “no” in Congress is not leadership. The fact that Obama facilitates no discussions or presents no working actionable items in between various deadlines proves that he is not about leading by example. The last-minute scrambling is his backdrop for grandstanding. It’s about perpetuating crises as leverage for outrageous policies that the majority of Americans do not want.
by | ARTICLES, BLOG, NEW YORK, OBAMA
Obama is lending NYC Mayor candidate his playbook to win — including his endorsement, his staff, and his rhetoric.
Obama recently and heartily endorsed Mr. de Blasio, which comes a couple of weeks after his win in the Democrat primary against 8 other candidates.
De Blasio’s campaign released a statement noting Obama’s endorsement; Obama remarked, “Progressive change is the centerpiece of Bill de Blasio’s vision for New York City”, which would make him a “great mayor”. De Blasio spoke to this effect, describing how “On health care, tax fairness or the economy, the president is no stranger to addressing big problems with big ideas and big solutions. I will emulate the example he has set, and if elected I stand eager to work with him on an urban agenda that grows prosperity for all.”bb
According to the NYT, Obama is lending not only his name, but also his powerhouse consultants. “Several veterans of Mr. Obama’s 2008 and 2012 campaigns are now senior campaign advisers to Mr. de Blasio, including Mr. de Blasio’s campaign manager, Bill Hyers, and John Del Cecato, who has been most responsible for his commercials”. This will be a difficult obstacle for Joe Lhota to overcome along with the Obama endorsement — especially in light of the fact that Bloomberg, a marginal Republican and mayor for the past 12 years — as refused to endorse anyone in the race.
Most notably, De Blasio is using language that echos much of the phrases preferred by President Obama. De Blasio describes himself as ““a consistent progressive with a very strong activist worldview and someone who wants to make substantial change in this city.”. (sounds a lot like community organizer, eh?).
He has also spoken of his plans regarding “fighting inequality and economic injustice.” Sounds very much like “pay their fair share” policies.
So if New Yorkers want NYC to be a microcosm of our current government style and economy, De Blasio is their candidate. He is very open about modeling himself after Obama.
by | ARTICLES, BLOG, FREEDOM, HYPOCRISY, OBAMA
The idea of “disparate impact” is a poisonous cancer that has taken root as an important concept in the business world. If we do not end it soon, it will continue to grow, extorting huge sums from innocent companies, creating an enormous economic burden on society, and allowing the tort bar to run amok.
Under disparate impact, there are many areas in business where charges of “discrimination”, often regarding race, could and are being made every day. Employment and mortgage origination are two of the most prevalent. The law requires – as it should -that for a company to be guilty of such discrimination, there must be an intent to discriminate.But government agencies have found a way to overrule that requirement by developing the concept of “disparate impact”. Disparate impact is the concept that allows for a showing that if a protected class of citizens has a statistically lesser representation with respect to a business (hiring, mortgages originated, etc.) it may be implied that the business has intentionally discriminated. This is clearly irrational, since there may be many economic, societal, and local reasons for the statistic. But disparate impact puts the burden to show lack of discrimination on the employer – guilty until proven innocent. In fact, in order for an employer to defend himself against such a charge, he would have to show that the “offending rule or practice” was a “business necessity”.
Though I find this concept outrageous, the federal and state governments and their agencies seem to love it. I therefore believe that they should be equally adamant in applying the concept in the public sector.
The IRS scandal has shown the clear practice of targeting conservative groups applying for 501c4 status. Under disparate impact theory, the charge of intentional discrimination would apply because there is no “business necessity” in the clearly statistically significant discrimination policy the IRS has employed. The Obama administration, having complete control and responsibility for the Department of the Treasury and its Internal Revenue Service.is therefore guilty of intentional discrimination. In particular, President Obama’s specific response, that there has been no evidence that anyone directed anyone to intentionally target conservatives, does not insulate him from being actually guilty.
The current administration has been keen on applying disparate impact theory to a number of private companies, and appears intent on ramping up the practice. For example, Obama’s labor secretary nominee, Thomas Perez, has been particularly lucrative in this regard. In June, National Review Online (NRO) covered some of Perez’s more recent cases, noting that Perez “has applied that theory vigorously to force large settlements from financial companies even in cases where there was no evidence of actual racial discrimination”. In other words, employers can be sought after for violating the law whether or not they intended to do wrong.
The White House in general, and Perez in particular, like disparate impact theory because it, as NRO notes, it “sets a very low bar for proving discrimination. Under it, prosecutors need not prove intent, merely that minorities have suffered a disparate impact from some action”. And this is a person Obama intends to add to his Presidential Cabinet.
If disparate impact can be applied to the private sector, it should also — in the spirit of fairness and equality, of course — be applied to the IRS. Numbers have been abused, and particular groups have been adversely singled out and subject to excessive, burdensome, and overreaching scrutiny; of this we are certain. The targeting of conservatives was a concerted effort to slow down or dissuade the creation of their tax-exempt groups. Even if the White House did not give a direct order (which remains to be seen), it doesn’t really matter anyway under disparate impact theory. Intent needs not to be proved in court; merely the act of discrimination is enough.
Based on the White House’s unmitigated belief of their ability to use disparate impact against companies for questionable practices, the rule should be applied to the IRS for its questionable practices as well. Since the IRS falls directly under the purview of the Executive Branch, why is the President of the United States therefore not directly responsible and culpable for the IRS abuse?
by | ARTICLES, BLOG
The Chicago Tribune has published a Sunday editorial calling for Obamacare to be re-written. The Chicago Tribune.
The Tribune goes through the myriad of delays that the Administration has announced in the last few months, contrary to the actual written law, and then they go further. They question the ability of Obama to actual ignore parts of the law he deems inconvenient or difficult to implement under the dates created by Congress — and signed into law by Obama himself.
“The administration asserts that it can make these changes under the president’s broad executive authority. Yet critics make a compelling argument that the president is stretching the limits. Former federal appellate Judge Michael McConnell, director of the Constitutional Law Center at Stanford Law School, writes in The Wall Street Journal about a different sort of mandate: the mandate in Article II of the Constitution that the president “‘shall take Care that the Laws be faithfully executed.’ This is a duty, not a discretionary power. … As the Supreme Court wrote long ago (Kendall v. United States, 1838), allowing the president to refuse to enforce statutes ‘would be clothing the president with a power to control the legislation of Congress, and paralyze the administration of justice.'”
Like most issues of presidential authority, this isn’t cut and dried. Presidents do have broad discretion on how laws are enforced. But they’re on shaky ground when they decide whether to enforce a law. It’s not hard to understand why: Imagine the outcry if President Mitt Romney refused to enforce, say, Obamacare”
Yes, imagine that. Imagine Romney (or Bush?) trying to do what Obama has done. What’s more, The Chicago Tribune calls into credibility Obama’s excuse to circumvent Congress and administer his changes by fiat. Obama blames a toxic environment in Congress, but the Tribune isn’t even buying it.
“Tweaks? Obama isn’t making tweaks. He’s trying to circumvent major flaws that began flaring when the law was enacted. Hence the many carve-outs, delays and special deals that have been piling up since he added his signature to Obamacare on March 23, 2010.
The president crusaded for this law and has embraced its nickname. But he did not write the law. Congress did. Major changes are necessary — he has stipulated by his actions that this law as constituted cannot work — and Congress should legislate them for his review.”
The Chicago Tribune sums up the sloppy, slippery implementation of Obamacare by calling for it to be rewritten. The fact that the one of the most adament cheerleaders of Obama has 1) turned its back on this signature piece of legislation and 2) questioned Obama’s tactics, is quite alarming. When such a major ally discovers that our Emperor indeed has no clothes, it reinforces the need for Obamacare critics to press on in their fight to repeal this monstrosity of a law.
by | ARTICLES, BLOG, ECONOMY, HYPOCRISY, OBAMA, OBAMACARE, POLITICS
Eye-opening words of HHS Secretary Sebelius yesterday:
“This is no longer a political debate; this is what we call the law,” Sebelius told a group that includes Democrats and Republicans, elected officials, political appointees and bureaucrats. “It was passed and signed three years ago. It was upheld by the Supreme Court a year ago. The president was re-elected. This is the law of the land.”
Except when it is not.
If this is the law of the land, why is our President of the United States picking and choosing the parts of law that he wants to implement and/or delay?
Just this morning, Forbes is reporting “that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year”.
Recently, there was a delay in the employer mandate.
Before that, “there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies, relying on the “honor system” instead”
And for starters in April 2012, there was a delay of Obamacare’s Medicare cuts until after the election.
Oh, and don’t forget the security flaws and delays recently revealed. Deadlines for security safeguard have been missed, and the date to implement that system has been moved to September 30 (one day before the exchanges open).
Here’s the problem. Sebelius and the Obama Administration want to use the argument “It’s the law of the land!” when they are criticizing Republicans for questioning Obamacare. At the same time, they are not followign the “law of the land” when they are moving deadlines, delaying implementation of the law, and using the honor system.
Michael McConnell wrote an excellent piece last month in the WSJ entitled ” Obama Suspends the Law: Like King James II, the president decides not to enforce laws he doesn’t like. That’s an abuse of power”
He points out the simple fact that “Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so”.
Indeed. When Obama decides to pick and choose the parts of the law he wishes to execute, he is not upholding “the law of the land”.
Is Obama using Obamacare to set up a series of precedents for which he easily dispenses with troubling or inconvenient laws or statutes, in order to expand his Presidential powers?
There are many reasons why Americans should continue to be wary of Obamacare. These include:
Fiscal — Staggering costs of the system, rising costs of premiums, etc
Medical — Not being able to keep your doctor or healthplans as promised. Concerns about rationing, death panels, etc.
Personal — Your information is, at this time, not secure, and is overseen by unregulated “navigators” (think TSA)
Operational — Obamacare was signed into law in March 2010. It was expected to be fully implemented January 1, 2014. Yet in those almost four years, Americans have seen delays, missed deadlines, cost changes, and more. If Obamacare can’t even be implemented without substantial missteps along the way, what confidence does the public have that it will run efficiently and properly?
Constitutional — Obama is ignoring deadlines contained in the law and delaying parts that are problematic
Americans will have varying opinions as to which of these concerns above is most acute. However, the Constitutional aspect might very well be the most troublesome. Invoking the “law of the land” when chastising your political opponents, while simulataneously ignoring the “law of the land” is the height of executive hubris. An expansion of power by the Executive Branch undermines our entire American system of government.
by | ARTICLES, BLOG, BUSINESS, ECONOMY
Detroit is not too big to fail.
The city of Detroit must take its lumps, as difficult as they may be to swallow. But the city of Detroit is to blame. They made a very bad calculated error. They thought their decades of cronyism and sweeping promises were good and economically viable. The people didn’t realize, or really didn’t care, that they were sold a lot of snake oil from public service sectors and unions that were promised too-good-to-be-true benefits and rewards.
But Detroit must not be bailed out because there are a great many other localities in the same boat as Detroit, that operated on the same premises. We simply cannot afford this financial baggage. Thatcher warned us decades ago, “The problem with socialism is that you eventually run out of other people’s money.”
One of the most difficult facets of Detroit’s economic woes is the fact that the state of Michigan constitutionally protects the rights of public service pensions. But pensions systems function as a vendor as a budget item to be paid; therefore, there should be no (other) protection for them than any other vendor — to do so is a clear form of cronyism. It is typically very difficult to get constitutional provisions passed at all, and yet some states, like Michigan and New York for example, managed to get it done. So this mindset of economic self-protection has clearly long been pervasive; these states have had the constitutional pension protection in place for some time.
The constitutional protection for public pensions is rather duplicitous because of how such money is protected when finances or the economy sours. You see, when states and cities raise money via taxes, the purpose is not for profit-making, and they don’t make decisions based on profits and such. First and foremost, their job is to take care of citizens. You would think with that being the case, it would therefore be really important to the elected leaders to make certain that the bondholders (who execute money in large quantities to help finances projects to benefit the citizenry) would know that their bond money is protected first and taken care of first. This is common sense.
A lot of the time in municipalities, the bonds that are issued are General Obligation (GO) bonds. GO Bond money is usually considered first in line for protection because of the enormous sums of money issued. Bondholders have to be promised by the locality that they get paid back first as an element of protection, a form of collateral if you will. In exchange for that guarantee, the GO Bonds are usually issued at lower rates than other types of bonds. That iron clad arrangement enables the GO Bonds rates to be very affordable for projects (think “smart money”), specifically because the bond has the guarantee of the locality that the money is financially protected. Other bonds don’t have that guarantee and therefore have a higher rate.
But if there are constitutionally protected items (like a pension system), they get put at the top of the list for protection, even ahead of GO bonds. This is an enormous problem. GO bonds have no actual and true collateral — only the “full faith and credit” of the borrowing locality. What kind of hypocrisy is it now to say to the bondholders that the money which was was borrowed to pay for education and teachers and government projects for the betterment of Detroit citizens now won’t get paid back — because we have to first pay for the teachers and unions and public service retirement pensions?
Detroit must be allowed to go through the proper process and not be propped up. This is a city that continuously and consciously made outrageous and untenable financial decisions with no accountability. A bailout for this behavior and operation will have a rippling effect on other localities which practiced this same kind of cronyism. Why should other taxpayers now be responsible for shouldering such gross economic negligence of a city rife with economic corruption?
