Recession 2 “Summer of Recovery” 0

The government is about to confirm what many people have felt for some time: The economy barely has a pulse.
The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent.
That’s a sharp slowdown from the first quarter, when the economy grew at a 3.7 percent annual rate, and economists say it’s a taste of the weakness to come. The current quarter isn’t expected to be much better, with many economists forecasting growth of only 1.7 percent.
Such slow growth won’t feel much like an economic recovery and won’t lead to much hiring. The unemployment rate, now at 9.5 percent, could even rise by the end of the year.
“The economy is going to limp along for the next few months,” said Gus Faucher, an economist at Moody’s Analytics. There’s even a one in three chance it could slip back into recession, he said.
The report confirms the economy has lost significant momentum in recent months. Most analysts expect the nation’s GDP will continue to grow at a similarly weak pace in the current July-to-September quarter and for the rest of this year.
The economy has grown for four straight quarters, but that growth has averaged only 2.9 percent, a weak pace after such a steep recession. The economy needs to expand at about 3 percent just to keep the unemployment rate, currently 9.5 percent, from rising.
According to data released earlier this week, home prices fell as much as five percent across the country in the month of July, and existing home sales fell 27%.

The worst in 15 years.

But if you listen to the liberals and their pundits, it slow but it’s all good. You just to have more hope. Give it more time. Don’t be so impatient.
So what if GDP growth has gone for 5% in the last quarter of 2009 to 1.6% now it’s still improving!
And you wouldn’t to hand the keys back over to Bush now would you!
After all, Bush was Republican and all Republicans are Bush. (a gold star to anyone who can spot the logical fallacy in that statement ) But isn’t that what the Democrats ARE saying…
Cue Sisyphus!


Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.
All of this is obvious. Yet policy makers are in denial. Why are people who know better sugar-coating economic reality? The answer, I’m sorry to say, is that it’s all about evading responsibility.(Paul Krugman)

After all, it’s Bush’s Fault! and you wouldn’t want Republicans! they’ll just wreck the car again like they did before!
After all, Bush was Republican and all Republicans are Bush.
And as Mr Krugman also says, showing his liberal roots,”The administration has less freedom of action, since it can’t get legislation past the Republican blockade.”
The Democrats currently have an overwhelming majority in the House and 59/100 seats in the Senate and The Presidency.
Yet, it’s a “republican blockade”.

The problem is that the Democrats can’t get all the Democrats to vote for all of this crap so they have to blame the minority party for it!
It sure as hell can’t possibly be their fault!
So, if November happens as predicted and the Democrats are the minority, it will be the tyranny of the majority then right? They will be the victims yet again, as they are now in the majority.
Perpetual Victimization!

But the Democrats will focus again on the 1 tree in the forest that isn’t on fire and say that’s you’re hope and change, just be patient, socialism wasn’t built in a day!


On Thursday, Standard & Poor’s said action is needed soon if the U.S. is to keep the much-coveted AAA bond rating that lets the government borrow in global markets at the lowest rates possible.
S&P’s warning came just days after Morgan Stanley asserted that the U.S., along with a number of other developed nations, is likely to default on some debt. Such defaults are “inevitable,” it said, given the growing number of retirees in developed nations who will have to be taken care of by a shrinking pool of workers.
The sovereign debt crisis “is not over,” said the investment bank’s Arnaud Mares, and that includes in the U.S.
What worries Wall Street is a public debt-to-GDP ratio of around 53%. That’s high enough as it is, but it’s about to go a lot higher. By 2020, recent data suggest, the ratio will top 100% — a red line that virtually all economists agree is dangerous.
In raw numbers, we owed roughly $7.5 trillion at the start of this year. By 2020 that explodes to $23.5 trillion, according to an analysis of Congressional Budget Office data by economist Brian Riedl.
What do these numbers mean? To begin with, we spend $187 billion a year, or 1.3% of GDP, to pay our debts now. Just 10 years from now, that will surge to $1.1 trillion, or 4.8% of estimated GDP. Fiscally speaking, we’ll be gasping for air.
Debt can be a good thing, but in big doses it’s poison. If, as some fear, the U.S. should simply say it can’t pay its debts and default — or do a de facto default by printing money to retire our debt — the consequences would be dire.
No nation would want our bonds in their portfolios. To entice them to buy, we’d have to offer a much higher risk premium — that is, higher interest rates.
That means our debt service could go even higher, squeezing out even more of our economy’s spending.
The dollar would implode, and prices for foreign goods — which now make up 15% of our economy — would soar. Private investment would shrink and, along with it, private-sector GDP
Americans’ standard of living, once the envy of the world, would recede into the pack of mediocre, government-run nations.
It doesn’t have to be this way. All this is due to unrestrained spending. The federal government now spends about $29,000 per household. That will rise to $38,000 by 2020. If you think “the rich” will, or can, pay for it all, think again.
Unless we begin to control spending, we can kiss our American lifestyles goodbye. It’s that simple.
Sadly, the White House is unwilling to see reality. Which may explain why, as our debts mount to ruinous heights, Vice President Joe Biden — President Obama’s point man on the recovery — can burble, “This is a chance to do something big, man!”
Yeah, man, something big — like wreck a country.
Warnings about America’s impending financial car wreck are being sounded, loud and clear. The only question is whether those driving the car will slam on the brakes before it’s too late.(IBD)

Got the car out of the ditch and drove it straight off a cliff and into a bottomless pit!
Way to go Barack & Co!
Yours is the Superior Intellect!

The Ditch

Congressional Budget Office (CBO), in its mid-year budget update, has projected that the 2010 budget deficit will be the second highest on record since the end of World War II, eclipsed only by the deficit of 2009.
The CBO says that the total 2010 deficit will reach $1.3 trillion, down slightly from 2009’s $1.4 trillion record. All told, CBO projects that the government will run up a total of $6.2 trillion in new deficits between 2011 and 2020.
Making it over $20 Trillion, double what it was in 2007 and 4 times what it was 20 years prior! a 400% rise in a generation!
But don’t worry it’s all George W Bush and The Republicans Fault! 

During his speech, the president likened Republicans to the “folks who drove the car into the ditch.”
“And so we decided, you know what, we’re going to do the responsible thing,” he said. “We put on our boots, we got into the mud, we got into the ditch. We pushed, we shoved, we’re sweating. They’re standing on the sidelines sipping a Slurpee, sort of watching us, saying, ‘Well, you’re not pushing hard enough,’ or ‘Your shoulder is not positioned the right way,’ giving us a whole bunch of advice on how to push — not lifting a finger to help.
“And finally we get this car up back on the road again, and finally we’re ready to move forward again,” Obama said. “And these guys turn around and say, ‘Give us the keys.’ Well, no, you can’t have the keys back — you don’t know how to drive.”–President Obama

So, children, you can’t hand the keys back to those morons. You have to trust me, I know what I’m doing.
And I’m so much smarter, and so much better than you!
Yeah, the car is back on the road alright, it has a whole in the gas tank, the fuel system is running rich, the steering wheel veers violently to the Left, the muffler has a hole in it and is dragging on the ground. The windows are broken, the transmission needs an overhaul,  and the tires are bald.
But it runs. And you should have more respect and reverence for your Elite Superiors, you ungrateful louts!
And it’s all George W Bush’s Fault after all!
Relative to the size of the economy, the 2010 deficit will reach 9.1 percent of the Gross Domestic Product, according to the CBO’s projection. The deficit in 2009 was 9.9 percent of GDP.
“As was the case last year, this year’s deficit is attributable in large part to a combination of weak revenues and elevated spending, associated with the economic downturn and the policies implemented in response to it,” the CBO explained.
The current economic downturn is expected to last for several more years, the non-partisan office said, predicting that unemployment will not fall to around a healthy 5 percent until at least 2014.
Oh goody, just in time for the Health Care Mandate and the other taxes to start kicking in!!!
Rejoice!!
After a year and half of “stimulus” and bailouts gone bad, what has the shift towards higher government spending and an encroaching nanny state cost you? This year, it has cost you 231 days out of your life, or 63 percent of 2010.
Every year, the Americans for Tax Reform Foundation and its Center for Fiscal Accountability calculate the day on which the average American has paid off his burden of federal, state and local spending and regulations. This year that day falls on August 19, a full eight days later than last year’s date.
That was yesterday folks! Rejoice!
Federal spending, always the largest contributor to the Cost of Government Day, cost taxpayers 104 days this year. This is up from 90 days in 2008, when Cost of Government Day fell on July 16. This is to say that the ill-conceived spending policies of the past two years have cost taxpayers over a month of their lives, and show few signs of abating.
President Obama has proposed spending $3.8 trillion in 2011, a 40 percent increase from pre-bailout, pre-“stimulus” levels. (Daily Caller)
And they want to raise taxes in a recession…sorry “Summer of Recovery”.  Hope 2.0…Recovery from what? a Marxist drunken stupor?
Does it kind of remind you of Hollywood rehab, where they go and attend a rehab then come out and do it all over again and go back to rehab and then come and do it again, ad nauseum…?
But don’t worry, if you’re mad about it,remember  it’s all George W. Bush’s Fault you islamophobic,racist,insensitive, ignorant low country moron!
Listen to your Masters, the Insufferably Superior Left.
They are just better, smarter, more tolerant, and sensitive than you could ever be.
And that’s just the facts, ma’am.

Lies, Damned Lies, and Medicare

First off, the Old Gray Lady, the Propaganda Mistress of Liberals, The New York Times: Here’s the bottom line: The recently passed health care reform bill is promising to have a positive effect on Medicare, assuming Republican opponents don’t succeed in killing the reform in court or otherwise undermining its main provisions. Social Security is holding up even in the face of a weak economy.
Would it be a surprise that they are lying.


NEW YORK (CNNMoney.com) — It’s official: Social Security will reach its tipping point this year. For the first time in nearly 30 years, the system will pay out more benefits than it receives in payroll taxes both this year and next, the government officials who oversee Social Security said on Thursday.
This is “holding up”??
CNN: The controversial Affordable Care Act extends the life of the Medicare Trust Fund to 2029, from 2017.

The actuary of the Medicare Trustees memo attached to the report disagrees:

“(T)he financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range. . . or the long range. . . . I encourage readers to review the ‘illustrative alternative’ projections that are based on more sustainable assumptions for physician and other Medicare price updates.”
These remarkable words are found, in all places, in the “Statement of Actuarial Opinion” in the back of the 2010 annual Medicare Trustees’ Report.
The actuary’s alternative memo explains that “the projections in the report do not represent the ‘best estimate’ of actual future Medicare expenditures.” Worse than that, they are not even in the ballpark of reasonability. The official 2010 Trustees’ Report tells us that total Medicare expenses will be total 6.37% of GDP by 2080. The CMS actuary’s alternative memorandum explains that 10.70% of GDP is a more reasonable estimate for that year – though one that is roughly 68% higher.
If the 2010 report’s projections were arguably within the range of plausibility, perhaps the actuary could have agreed to sign off on them. But this was clearly prohibited by the magnitude of the deviations from reality. (For additional perspective, consider that the previous 2009 Trustees’ Report projected that program costs by 2080 would be 11.18% of GDP – more than 75% higher than this year’s projection.)
The actuary’s memo identifies two principal reasons why the official report’s projections are so far afield from reality.
One is that the official scoring presumes that payments to Medicare physicians will decline on December 1 by 23%, followed by a further 6.5 percent decline in January, 2011, and another 2.9 percent decrease in 2012. The Obama administration and the Congressional leadership are on record as opposing these enormous payment reductions, and no one seriously expects them to happen. The Medicare actuary’s memo refers to this physician payment formula as “clearly unworkable and almost certain to be overridden by Congress.”
The other major source of projection error is the assumption, enshrined in the recent health care law, that future program cost growth will be contained by downward adjustments in annual price updates, reflecting in turn the assumption that health service productivity growth will parallel “economy-wide productivity.” The actuary states, however, that “(t)he best available evidence is that most health care providers cannot improve their productivity to this degree – or even approach this level – as a result of the labor-intensive nature of these services.”
The actuary’s memo provides greater detail on the point. The memo notes the long-acknowledged phenomenon that productivity growth in services industries is generally not as rapid as in industries affected more by technology improvements. It is possible, for example, for productivity in personal computer manufacturing to improve several-fold in a short time. It is not similarly possible for productivity in nursing services to mushroom in the same way. The actuary’s memo rightly notes the generally slower pace of productivity growth in the health care field, which has been slowest of all in such labor-intensive venues as skilled nursing facilities and home health services.
As a result, the memo finds, it “very unlikely” that Medicare productivity growth can mirror productivity growth in the larger economy. The chief consequence of the legislated productivity adjustments, therefore, would be to render 15 percent of hospitals, skilled nursing facilities, and home health agencies unprofitable by 2019 — up to 25 percent in 2030 and 40 percent by 2050.
The actuary concludes that “neither of these update reductions is sustainable in the long range, and Congress is very likely to legislatively override or otherwise modify the reductions in the future to ensure that Medicare beneficiaries continue to have access to health care services.”
This is a key point; the glowingly optimistic projections in the official Trustees’ Report assume that we as a nation will be content to have 40% of our medical facilities go under within the next 40 years, and that we will happily accept these severe constraints upon beneficiaries’ access to health care. If that is not in fact the societal will after the enactment of health care reform, then the official cost estimates should be tossed into the nearest receptacle.
Bad though all of this is, none of it is actually the worst gimmick in the official report’s advertised improvement in Medicare solvency. That involves the double-counting of Medicare savings. Earlier this year, Congress passed a health care bill containing various new Medicare taxes and constraints on program expenditures. Such savings are assumed in the official report to extend the solvency of Medicare. But Congress chose instead to spend the savings on a new health care entitlement.
The Medicare actuary wrote a memorandum on April 22 of this year calling attention to this “double-counting.” “In practice,” he stated, “the improved Part A financing cannot simultaneously be used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.”
In other words, money can only be used once. Since the Medicare savings is being spent elsewhere on expanded health care coverage, it is not really being employed to extend Medicare solvency. To claim an improvement in Medicare financing is to mislead about the effects of recent legislation.
All that can be responsibly done is for those associated with the Trustees’ Report is to note the limited utility of the “official projections” and to simultaneously provide their best projections for actual reality. The rest of us, for our part, must take appropriate note of the alternative findings of the scorekeepers. This was an ethic too-little observed during the health care debate, when health care reform’s proponents continued to cite CBO’s purported sign-off on the fiscal gains of health care reform — despite the repeated caveats issued by CBO refuting the validity of such claims.
Treasury Secretary Geithner’s statement on the occasion of the report’s release mischaracterized it as follows:
“The Affordable Care Act has dramatically improved projected Medicare finances. Medicare’s Hospital Insurance (HI) Trust Fund is now expected to remain solvent until 2029, 12 years longer than was projected last year, which is a record increase from one report to the next. In addition, the 75-year financial shortfall for HI has been reduced to 0.66 percent of taxable payroll from 3.88 percent of taxable payroll in last year’s report, and the projected costs for the Medicare Supplementary Medical Insurance (SMI) program over the next 75 years, expressed as a share of GDP, are down 23 percent relative to the projections in the 2009 report Nearly all of these improvements in projected Medicare finances are due to the Affordable Care Act President Obama signed into law in March.”
Perhaps it is too much to expect the Secretary’s statement to acknowledge the double-counting at the root of this purported solvency extension, or to delve into the full extent to which the Medicare actuary has explained the inapplicability of these particular numbers. But as the Managing Trustee of the Trust Funds, the Secretary bears a duty to represent program finances as accurately as possible, which this statement fails to do.
The implausible projections in the official Trustees’ report will need to be revised downward almost immediately, after the next extension of Medicare physician payments expected later this year. By next year’s report, this year’s official projections may well look silly. It is unfortunate that the Treasury Department statement grotesquely spins the analysis in the Trustees’ report, especially given the clarifying corrections that the CMS actuary has already publicized.
The final page of the Trustees’ report states that “The Board of Trustees will convene an independent panel of expert actuaries and economists to consider these issues further and to make recommendations to the Board regarding the most appropriate long-range growth assumptions for Medicare projections.” Clearly, to be credible, this panel should be assembled with the active guidance of the Medicare actuary’s office, to avoid any appearance that the panel has been convened to over-ride rather than support the non-partisan analytical work of the Medicare actuary. The last thing needed is for the long-respected Trustees’ process to be tainted by its own version of the Gruber episode. (It was revealed that last June the Department of Health and Human Services (HHS) had awarded a no-bid contract worth nearly $300,000 to MIT professor Jonathan Gruber, the Administration’s star witness for the superior cost-containment features of health care reform.  Obama Administration officials, and most of the journalists celebrating Gruber’s findings, had neglected to mention this detail when trumpeting his supposedly independent confirmation of the Administration’s policy arguments).
There is, regrettably, a striking contrast between the Treasury Department’s statement on the Medicare Trustees’ Report, and the Medicare Actuary’s own repudiation of it. In time, the Treasury Secretary may very well come to regret his statement even as the Medicare Actuary comes to take pride in his own principled stand. (e21)

Gee, I wonder who’s telling the Truth?  The Liberals or the Actuary of Medicare?
Gee, I don’t know…

Contradictions and Conundrums

Remember when Obama said, no more bailouts?
Neither does he.
Not really a surprise though is it.
President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.
In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s free fall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party.
“I think there is spending fatigue,” House Majority Leader Steny H. Hoyer (D-Md.) said recently. “It’s tough in both houses to get votes.”
Democrats, particularly in the House, have voted for politically costly initiatives at Obama’s insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.
The House last month stripped Obama’s request for $24 billion in state aid from a bill that would extend emergency benefits for jobless workers. Senate Majority Leader Harry M. Reid (D-Nev.) hopes to restore that funding but with debate in that chamber set to resume this week, he acknowledges that he has yet to assemble the votes for final passage. Obama’s request for $23 billion to avert the layoffs of as many as 300,000 public school teachers has not won support in either chamber.
Gotta protect your union base, and the expense of everyone else.
“He’s calling on Congress to pass a [jobless] bill that will add about $80 billion to the deficit, but then calls for fiscal discipline; he says these measures need to be targeted and temporary, but then calls for extending programs passed in the stimulus more than a year ago,” Stewart said in an e-mail. Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.)
He says to Michigan High Schoolers to be responsible for your actions, then turns around and blames BP for everything.
And we won’t even go into the still rampant virulent disease of Bush Derangement Syndrome!!
Republicans have offered an alternative package that proposes to cover the cost of additional jobless benefits — but not aid to state governments — by cutting federal spending elsewhere. In contrast to the Democratic bill, the GOP measure would reduce deficits by nearly $55 billion over the next decade, according to the nonpartisan Congressional Budget Office.
But will Democrats listen, hell no. It’s not on The Agenda.
Feeling tapped out after stimulus, ObamaCare and everything else? Senator Bob Casey has one more deal for you. If the Pennsylvania Democrat gets his way, U.S. taxpayers will also pick up the astonishing tab for poorly managed union pension plans.

Mr. Casey is gathering support for his curiously named “Create Jobs and Save Benefits Act,” a bailout for union-run retirement plans. Similar to House legislation from North Dakota Democrat Earl Pomeroy and Ohio Republican Patrick Tiberi, the bill would transfer tens of billions of dollars worth of retiree liabilities to the Pension Benefit Guaranty Corporation, i.e., to taxpayers.

At issue are multi-employer pension plans, in which companies across an industry pay into a single pension pool. The plans are predominately run by unions and for years have distinguished themselves by poor management. The Labor Department in 2008 listed 230 multi-employer plans that were either endangered (less than 80% funded), or critical (less than 65% funded), or that had applied to government for funding relief. By 2009 that number had soared to 640.
The financial crash is partly to blame, but even before 2006 only about 6% of multi-employer plans were fully funded, compared to about 31% of single-employer plans. The real problem is that multi-employer plans have become a sort of pension Ponzi scheme.

Unions love multi-employer plans because they let workers keep their retirement benefits even if they switch jobs to another participating company. This encourages lifelong union membership. Unions are less enthusiastic about paying the bills. The negotiating priority of union leaders is to get hefty wage increases and benefits for current workers, leaving the scraps to the pensions of retirees who no longer vote in union elections.
When a company in an industry goes out of business, meanwhile, the remaining firms are still on the hook for all costs of the multi-employer plan. This explains why the trucking industry is backing Mr. Casey’s bill, and why Mr. Casey announced his legislation at a Pennsylvania facility of YRC Worldwide, a Kansas trucking outfit. Someone has to pay for years of the industry agreeing to Teamster demands.

Mr. Casey’s bill would cordon off “orphaned” pensions—those for which an employer has stopped contributing or withdrawn from a multi-employer fund—and put them into a separate account. Surviving companies would pay benefits to these orphans for five years, after which they’d get kicked to the PBGC, which would shoulder the benefits until the last retiree or beneficiary dies. The remaining multi-employer plan would be back in the black, free to start the negative-feedback loop of underpayments and overpromises again.
All of this is a raw deal for union pensioners who worked a lifetime in expectation of certain benefits. The PBGC’s current maximum payment to any plan participant is $12,800 a year. Mr. Casey’s bill raises that to $21,000 year, still only a fraction of existing pension promises.

Not that the PBGC has the cash to pay more. The agency’s deficit was $21 billion as of last September, and it is expected to rise to an estimated $34 billion by 2019. Mr. Casey is claiming his multi-employer-bailout scheme will cost a mere $8 billion, but Moody’s estimated last year that multi-employer plans were $165 billion underfunded.

The tab is likely to be much higher given the moral hazard Mr. Casey would create. As Hudson Institute economist Diana Furchtgott-Roth notes, the bill creates “a vicious circle. Once PGBC took over some plans, other employers would want to declare bankruptcy, unload plans on the PGBC, and reorganize under another name. The incentives to do this would be enormous.”

In 2006 Congress passed the Pension Protection Act to prod companies and unions to shape up their pension plans, whether by lowering benefits, increasing contributions from employers and workers, or even raising retirement ages. The fact that many unions and companies have refused to use these tools does not make their mistake the obligation of U.S. taxpayers. If unions really cared about protecting retirees, they’d ditch defined-benefit plans and adopt 401(k) plans that give workers control over their retirement assets.
Union chiefs prefer the power that comes with managing huge pension investments—even if they’re failing. They are now counting on Mr. Casey to preserve their power by making taxpayers pick up the tab for years of pension mismanagement. With the union priority of “card check” stalled, word is that the Casey bailout is Big Labor’s consolation prize. Taxpayers should let Congress know they don’t want to pay.(WSJ)
Washington Examiner (excerpt):

So union management bleeds one company dry, then makes an unrelated company responsible for picking up their pension obligations. Then they start bleeding them dry. When there’s no one left to bleed dry, they have Democratic senators and House members in their pocket to push this bill on the taxpayer.

Bottom line is that unions are taken care of, while taxpayers are left to shell out billions. Nice racket, huh?
Given the liabilities involved, very few companies are willing to enter multi-employer pension plans voluntarily. They usually have to be forced by unions in negotiations and arbitration. Lawmakers may support a pension plan bailout on the grounds that it’s not fair to employers, but unions knew exactly what they were doing when they forced companies into these plans.
Nobody is pointing out that it was wrong for unions to force companies into these untenable positions to begin with. It’s doubly wrong to make the 93 percent of privately employed Americans who don’t belong to a union — who have to contribute to their own 401(k)s for retirement — pay also for the retirements of the seven percent who have or are greedily bludgeoning their employers out of existence.
But Obama has to take of he peeps. Screw everyone else.
Especially in an election year.
Report from the Treasury Department.  The report to Congress warned that U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015 .
At that point, Treasury reckons, the ratio of debt to gross domestic product would be 102% compared with 93% this year.
But don’t worry, the Government is here to help you!

2011

People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.
It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

John Fund of WSJ's Political Diary breaks down Tuesday's most interesting primary contests. Also, WSJ Columnist Mary Anastasia O'Grady translates the latest economic signals from Washington.

Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it's also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.

People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, "high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992—over $15 billion—in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994."
Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn't rocket surgery, as the Ivy League professor said.
On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.
Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there's always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe "double dip" recession.
In 1981, Ronald Reagan—with bipartisan support—began the first phase in a series of tax cuts passed under the Economic Recovery Tax Act (ERTA), whereby the bulk of the tax cuts didn't take effect until Jan. 1, 1983. Reagan's delayed tax cuts were the mirror image of President Barack Obama's delayed tax rate increases. For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10%.
But at the tax boundary of Jan. 1, 1983 the economy took off like a rocket, with average real growth reaching 7.5% in 1983 and 5.5% in 1984. It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Consider corporate profits as a share of GDP. Today, corporate profits as a share of GDP are way too high given the state of the U.S. economy. These high profits reflect the shift in income into 2010 from 2011. These profits will tumble in 2011, preceded most likely by the stock market.
In 2010, without any prepayment penalties, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. Given what's going to happen to tax rates, this conversion seems like a no-brainer.
The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain't seen nothing yet. (Mr. Arthur Laffer is the chairman of Laffer Associates and co-author of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).)

And there's the "reduction" in the Deficit from The Government takeover of health care and those associated taxes.
Then the proposals for Cap & Trade that will tax your energy.
Fifty three of the Senate's 59 Democrats gave unelected, overpaid bureaucrats at the U.S. Environmental Protection Agency a green light yesterday to do pretty much whatever they choose in their quixotic crusade against global warming. All 41 Republicans and six brave Democrats voted for Alaska Sen. Lisa Murkowski's resolution nullifying the EPA's recent usurpation of authority under the Clean Air Act to regulate the U.S. economy to combat greenhouse gases. Thankfully, this craven surrender of congressional authority isn't the last word on the issue, assuming that the November elections produce a Senate with enough backbone to reassert the legislature's rightful power.
In the meantime, it's vital to understand how bureaucracies function. Whatever else they may do, leading bureaucrats always do two things, regardless of which party controls the White House or Congress: They limit choices available to the rest of us by imposing regulations that increase government power and thus justify expanding their budgets and staffs; and they protect themselves and their turf by suppressing internal dissent, often at any costs.
As an example of the latter, consider career EPA scientist Alan Carlin. Last year, Carlin went through all the proper channels in submitting a study to the EPA's top leadership in which he raised serious questions about the credibility of scientific reports used to justify the agency's decision to regulate greenhouse gases. Carlin's study became public thanks to the Competitive Enterprise Institute. Carlin's reward was to be publicly pilloried by President Obama's EPA administrator, Lisa Jackson. His work was suppressed within the agency, and he was threatened with additional retaliation if he continued voicing his views. Rather than endure this bureaucratic muzzling, Carlin retired.
Similarly, EPA lawyers Allan Zabel and Laurie Williams -- a married couple living in San Francisco who between them have four decades of experience at the agency -- became so concerned last year about the EPA's support of cap-and-trade legislation that they created a YouTube video titled "The Huge Mistake" to explain their case. They made it clear that the video represented only their personal opinions, but the EPA still ordered them to change the video's content or face severe punishment.
Sen. Lamar Alexander, R-Tenn., predicts that a suffocating new round of EPA regulations will soon descend upon the "one-fifth of our restaurants, one-fourth of our schools, two-thirds of our hospitals and doctor's offices, 10 percent of our churches, thousands of farms and millions of small businesses" that emit greenhouse gases. Considering how the EPA grandees mistreat their underlings, we wonder how the agency will respond to the soon-to-be-swelling ranks of critics on the outside.(Washington Examiner)

Then there's the bankruptcy of Social Security and Medicare.
But don't worry, you can be safe and secure and get the warm fuzzies...

BECAUSE IT'S ALL GEORGE W. BUSH's FAULT! :)

So have your Two Minute Hate (A hideous ecstasy of fear and vindictiveness, a desire to kill, to torture, to smash faces in with a sledge hammer, seemed to flow through the whole group of people like an electric current, turning one even against one's will into a grimacing, screaming lunatic. And yet the rage that one felt was an abstract, undirected emotion which could be switched from one object to another like the flame of a blowlamp-George Orwell) and go out and work 3 jobs just to put food on the table and a roof over your head.
The Guardian reported on June 2 that the UN was supporting a switch to a radical anti-meat agenda. “A global shift towards a vegan diet is vital to save the world from hunger, fuel poverty and the worst impacts of climate change, a UN report said today,” wrote the paper.

Here’s how the group Vegan Action describes this extreme vegetarianism. “While vegetarians choose not to use flesh foods, vegans also avoid dairy and eggs, as well as fur, leather, wool, down, and cosmetics or chemical products tested on animals

The UN report is all about the environmental impact of “consumption and production,” or pretty much what humans do – eat and make stuff. It warns: “A substantial reduction of impacts would only be possible with a substantial worldwide diet change, away from animal products."
So evil carnivores everywhere beware, the Politically Correct are gunning for you too!

Best rest assured, the government will be here to save you! :)

“We see it as a entrepreneurial bill - a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”-Speaker Nancy Pelosi
Doesn't that just make you feel so much better! :)