by Ed Mattson
2012 is almost ready for the scrap heap of history. 2013 is just around the corner. Will America wake up or will it continue down the road to LaLa land? Will America stand up and take care of those who fight to keep it free, or will it succumb to the temptation to lavish benefits on those who just won’t take care of themselves in exchange for the votes to keep themselves in power?
If we step back and look around, anyone with a modicum of common sense would have to see things just aren’t right in the land of the free and home of the brave. The once greatest economic power in the world that defeated the communist Soviet Union in the Cold War, not by guns and bombs, but by overwhelming economic production and freedom, is now on the pathway to extinction as the world leader.
What triggered this article was an email I received over Christmas from a friend and mentor who came up with a great analogy that demonstrates the economic situation in the United States by comparing The Administration’s view of the country’s financial situation to his family budget in figures most logically thinking Americans will understand.
In April 2009 President Obama ordered the cabinet to cut $100,000,000.00 ($100 million) from the $3,500,000,000,000.00 ($3.5 trillion) federal budget over a 90-days period, as an intended signal of the president’s determination to cut spending and reform government.
I was so impressed by his sacrifice that I have decided to do the same thing with my personal budget…
I spend about $2,000 a month on groceries, household expenses, medicine, utilities, etc., but it’s time to get out the ‘ol budget cutting axe, go through my expenses, and cut back. I’m going to cut spending of my total budget at exactly the same ratio that the Federal Government is planning – 1/35,000, to show I too, can share in the suffering the rest of the nation will undergo in the process.
After doing the math, it looks like instead of spending $2,000 a month, I’m going to have to cut that number by six cents. Yes, I’m going to have to get by with only $1999.94, but hey, that’s what sacrifice is all about. Like other Americans I’ll just have to do without some things, that are frankly, luxuries – six cents worth.
When Congress and the President talk about cutting the budget, it’s all smoke and mirrors if you understand the concept of base-line budgeting, and if we all understood the concept, we would have already gotten out a rope and found a tall tree somewhere on Capitol Hill.
“Baseline budgeting” is one of those Washington terms that sounds very dry and boring. In reality, baseline budgeting is one of the most sinister ways that politicians claim to cut spending when they are actually increasing spending. The Congressional Budget Office defines the baseline as the current budgetary policies or current services are continued without change. The baseline includes automatic adjustments for inflation and anticipated increases in program participation. Baseline budgeting (f or current services), therefore builds automatic, future spending increases into Congress’s budgetary forecasts.
Baseline budgeting tilts the budget process in favor of increased spending and taxes. For example, if an agency’s budget is projected to grow by $100 million, but only grows by $75 million, according to baseline budgeting, that agency sustained a $25 million cut. That is analogous to a person who expects to gain 100 pounds only gaining 75 pounds, and taking credit for losing 25 pounds. The federal government is the only place this absurd logic is employed.
Perhaps if the country had and education system in place that would teach how this concept is destroying the country, then maybe, just maybe, we would see some heads roll inside the Beltway. From the mighty pulpit of the Rose Garden at 1600 Pennsylvania Avenue where President Obama speaks eloquently to a subservient press corps and the mind-numb voters waiting breathlessly on every syllable; and from the mighty pulpit of the Congressional Chambers where rhetoric more often than substance, seems to flow like sewage to a city reclamation processing facility, we soak it all up faster than Sham Wow mops up a spill.
With the federal government spending at a rate of more than $4 billion/day (The federal government borrowed 46 cents of every dollar it has spent so far this fiscal year, which began Oct. 1, according to the latest data the Congressional Budget Office released Friday), the numbers are so large, people become ambivalent to the financial calamity that awaits us in the near future. Looking it at from a different prospective…That tax revenue is up by $30 billion compared with last year, or about 10 percent, but spending is up even more — a staggering $87 billion, or 14 percent.
“A billion here, a billion there, pretty soon it adds up to real money.” — the late Senator Everett M. Dirksen
America is broken. Don’t believe me? Look at the facts and then you decide:
We just had an election where in we re-elected 85% of the Congressional and Senate representatives. The figures would have been if more astonishing had it not been for re-districting. The estimated number who would have been re-elected was thought to be closer to 90%, according to Bloomberg. Imagine how unlikely these numbers are when Congress has only an 18% approval rating according to Gallup. We have certainly crossed the gap into the land of insanity, but then again, who would have thought the majority of the people would have voted for four more year of economic pain and 20+ million people out of work?
According a report from State Budget Solutions, the state of California is teetering on the edge of bankruptcy staring at $617 billion dollars in debt. The state’s debt burden comes out to roughly $16,400 per California resident. Most of the outstanding debt is related to unfunded pension liabilities. The report also looked at the fiscal year 2013 budget gap, unemployment trust fund loans and unfunded retiree health benefits. As an example of the waste the taxpayers of California have endured with no end in sight, is…
California Highway Patrol division chief Jeff Talbott retired last year as the best-paid officer in the 12 most-populous U.S. states, collecting $483,581 in salary, pension and other compensation. Talbott, age 53, received $280,259 for accrued leave and vacation time and took a new job running the public-safety department at a private university in Southern California. He also began collecting an annual pension of $174,888 from the state.
Union-negotiated benefits, coupled with overtime that can exceed regular pay and lax enforcement of limits on accumulating unused vacation, allow some troopers to double their annual earnings and retire as young as age 50. The payments they get are unmatched by those elsewhere, according to data compiled by Bloomberg on 1.4 million employees of the 12 states. Some, like Talbott, go on to second careers.
The chaos doesn’t just end with public-sector, union-negotiated wage and benefit packages our legislators so easily agree to currying favor with and securing the vote of Big Labor, we also see a never-ending cycle of waste and lack of oversight. According to the San Diego Union Times: More than 200 state employees were overpaid more than $500,000 by managers who deliberately broke state rules at the troubled California Department of Parks and Recreation, according to a report by the state controller.
The report is the latest blow to a department where employees were found last summer to have kept $54 million hidden in two special funds for more than a decade, even as dozens of parks faced closure. Results from additional investigations by the Department of Finance and state attorney general are expected in coming weeks.
The controller’s office found that managers broke rules and regulations to pay 203 employees about $520,000 in extra pay over three years. Several dozen other employees were also overpaid more than $63,000 because they worked more hours or in higher-paying positions than allowed.
Speaking of taxpayer money and a federal Santa Claus government waiting breathlessly to give taxpayer money away to countries, many of which do not like the US and in fact vote against us at every opportunity in the forum of the United Nations:
FY2010 Top 5 Recipients by Region of U.S. Economic Assistance (in millions)
Country 2009 2010
Afghanistan 2,784 4,647
Pakistan 1,327 1,940
Indonesia 211 313
Mongolia 37 235
Bangladesh 171 227
Europe and Eurasia
Georgia 593 420
Russia 425 379
Moldova 31 308
Kazakhstan 90 304
Ukraine 175 288
Latin America and the Caribbean
Haiti 366 1,406
Colombia 711 678
Mexico 431 622
Peru 140 189
Guatemala 138 160
Middle East and North Africa
Iraq 2,231 1,082
West Bank/Gaza 1,039 693
Jordan 577 463
Egypt 480 397
Lebanon 155 156
Ethiopia 952 981
Sudan 1,198 871
Kenya 915 816
Senegal 134 698
South Africa 567 566
…And talking about the United Nations, the U.S. is assessed 22 percent of the regular budget, which is nearly $567 million in gross contributions for 2012. The U.S. is assessed more than 180 other U.N. member states combined and 22,000 times more than the least assessed countries. Together, the top 15 contributors pay over 81.4 percent of the U.N. regular budget. Moreover, under U.N. rules, the 129 member states that contribute less than 1.3 percent can pass the budget over the objections of the countries paying over 98 percent…INSANITY!
This explains why so many member states are blasé about increases in the U.N. budget: The financial impact on them is miniscule and undermines incentives for them to fulfill their oversight role. This divorce of financial responsibilities from voting privileges is perhaps the greatest cause of the decades-long intransigence on U.N. reform.
So, not only is the United Nation a toothless bureaucracy steeped in unbelievable ineptness, but corrupt on top of that. Through your taxpayer money and our financial support of the UN we are the CHIEF ENABLERS. Though not an isolated case of the UN in action, most of us will recall the Oil-for-Food Scandal that undermined the so-called diplomatic pressure designed to force Iran out of Kuwait after Saddam had invaded the almost helpless oil producing country.
From the Canada Free Press, recent years have brought a cascade of scandals at the United Nations, wherein the Oil-for-Food Scandal has been only the most visible. We still do not know the full extent of these debacles–the more sensational ones include:
- The disappearance of UN funds earmarked for tsunami relief in Indonesia.
- The exposure of a transnational network of pedophiliac rape by UN peacekeepers in Africa–and we may never know. What we do know is that an assortment of noble-sounding efforts has disolved into enterprises marked chiefly by abuse, self-dealing, and worse.
- The free world is grappling with threats from the spread of radical Islam to North Korea’s nuclear blackmail and Iran’s pursuit of nuclear bombs. The UN, despite its trophy case of Nobel prizes, has failed so far to curb any of these, just as it failed abysmally to run an honest or effective sanctions program in Saddam Hussein’s Iraq. Currently it is gridlocked over matters as seemingly straightforward as cleaning up its own management department.
To pour salt into an open wound, the city of New York Department of Finance said UN diplomats had unpaid tickets totaled $16.7 million through the end of July 2011. Egypt topped the list with $1.9 million in tickets, followed by Nigeria with about $1 million and Indonesia with about $725,000.
We continue to re-elect those who have made all this possible. You know who they are…the politicians we send to Washington who are surrounded by hangers-on with their make-work jobs and mini-bureaucratic fiefdoms.
I know some will argue that point, but have you noticed that whenever a major weather storm is about to hit Washington DC, the government issues bulletins telling “only essential personnel are required to report for work”. Say what? “Only essential personnel are required to report to work”. That means all the rest…about 90% ARE NOT ESSENTIAL! Why in the heck are they even on the taxpayer’s payroll, sucking up paychecks larger than the private sector and building credit for a comfortable retirement and benefits while the rest of us get the a broken Social Security System, Veteran pension, and Medicare?
Still think things are all peaches and cream with our leaders… How about the President, First Lady and family welcoming Park Jae-Sang, better known as Psy, with all the pageantry and accolades reserved for heads of state? Most Americans are not aware of the fact that they are creating another “air-headed bimbo” with the laud and praise they have bestowed upon gangster rappers, musicians, self-centered Hollywood idols (Lindsay Lohan, Paris Hilton, et al), and others, not worthy of a second thought.
In 2002 and again in 2004, Park Jae-Sang cut a track, which was a collaboration between himself and Korean rock group N.E.X.T, that was called ‘Dear American’, and included lyrics such as “Kill those f***ing Yankees who ordered them to torture… Kill their daughters, mothers, daughters-in-law and fathers… Kill them all slowly and painfully.” Knowing that he was going to be lavished additional praise by an out-of-touch White House, Psy apologized for the slam-dunk of all Americans, most notably our military, knowing that it was inappropriate and totally uncalled for regardless of the excuses he made.
It was the same military that suffered 128,650 killed and wounded fighting to end North Korean aggression in the Korean War that today enables him to bask in the lap of luxury complete with a US education at Boston University and Berklee College of Music. He could have well ended up as a citizen of North Korea under the thumb of Kim Jong-il, had he even been allowed to live.
We have a White House at war with the private sector. They call it “taxing the rich” and chant slogans suggesting they “are not paying their fair share”, when nearly 50% of the population isn’t paying anything…as if forking over about 50% of what they earn in accumulated income is not a fair share! In reality the lexicon of words means we are to punish success, achievement, and hard work. The thought is that it was government which made America what it is and not the other way around.
The President can’t wait to rub shoulders with the rich and famous elite of the entertainment crowd and the Wall Street insiders so long as they continue to dole out money for liberal politicians and causes. He strolls around the best golf courses spending taxpayer money almost as fast as Benanke can print it, more so than any other President in history. The first family lives at taxpayer expense on a budget that would make Harry Truman, the 33rd president, blush. I guess old Harry was right when he said “My choice early in life was either to be a piano-player in a whorehouse or a politician. And to tell the truth, there’s hardly any difference.”
The worse part about the Hollywood types who cheer on the President for higher taxes are hypocrites beyond belief. Those who work really hard and earn their money, invested everything in a business or idea and create jobs for others, are now told they didn’t have anything to do with it. They are demonized and the stupid voters actually bought into this line of garbage. At the bottom of the 1040’s, those wanting more taxation could select the box which allows all taxpayers to pay additional tax money if they so choose. If they feel so strongly about giving the government more money to waste, why don’t they fire their accountants, and either file the EZ1040 short form or write out a check for more than they owe?
Cities are now going bankrupt and states are following close behind. Instead of addressing the problem, cities like Detroit are demanding the federal government bail them out…that means you in Florida, me in North Carolina, and folks living all over the country may be asked to cough up more of our money to reward the bureaucratic pimps to suck even more money out of our budgets that have declined by $4000 the past four years. US families have seen a loss of family wealth by an average of nearly $40,000 since 2008, and come January 2013 it will probably get even worse when Tax Armageddon arrives.
I’ll close with a little tearful humor that is probably more truth than most will admit…
5000 years ago Moses said, “Pack up your camel, pick up your shovel, mount
your ass, and I will lead you to the Promised Land.”
5000 years later, F. D. Roosevelt said, “Lay down your shovel, sit on your
ass and light up a camel, this is the promised land.”
Today, the president “will tax your shovel, sell your camel, kick your ass,
and tell you that the promised land is somewhere else.”
Posted by Ed Mattson on December 26, 2012, With 0 Reads, Filed under Business, Economics & Markets, Economy. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.