Truthful Accounting and the Debt Ceiling Debate

The debate over raising the $14.3-trillion debt ceiling to some higher number is what Congress will discuss and the media will report over the next 30 days. What will be missing, however, is debate about the nation's real debt burden. Our calculations show it's more than $76 trillion, consisting of Treasury securities recognized under the debt ceiling and the unfunded promises we've made to our seniors, military veterans, and federal workers. Add to that the federal guarantees for everything from coastal flood insurance to expected bailouts for Fannie, Freddie, and the too-big-to-fails, and the nation's total obligations may exceed $100 trillion.

http://www.americanthinker.com/2011/07/truthful_accounting_should_be_the_first_objective_of_any_debt_ceiling_compromise.html

News from the Daily Reckoning

US federal spending

Fiscal year 2010 (in billions of US dollars)

• Discretionary $660
• Other mandatory $416
• Net interest $197
• Medicare and Medicaid $793
• Social Security $701
• Defense Department $689

TOTAL: $3.456-trillion

Now compare that to...

US tax receipts

Fiscal year 2010 (in billions of US dollars)

• Social Security/Social insurance $865
• Corporate income $191
• Other $140
• Excise $67
• Individual income $899

TOTAL: $2.162-trillion

As you can see, there's a bit of a discrepancy there. For every dollar the government spent in 2010, it was only able to steal roughly 62 cents through taxes. The rest came from the kindness of strangers with last names like Wong and Kim. Now, why would a Wong bother lending money to the US, you ask? A better question might be for how long will Wong lend? And what happens when Wong's kindness runs out?

Thus far, the United States has incurred an impressive $14.3 trillion in public debt, "subject to limit," as they say. Put another way, that's about $46K per citizen, or $130K per taxpayer. At current rates, those figures will jump to $22.9 trillion by 2015; $70K per citizen, or almost $190k per taxpayer.

In 2007, for example, that debt stood at about 36% of America's GDP. Today, that same little monster has grown to reach 70% of GDP. All that in four years; one Olympiad! They grow up so quickly, don't they? Even so, that's some pretty gnarly spending, even by politicians' own standards.

And what do these geniuses have to show for all of their greasy- mitted stimulus spending, for their various bailout programs and phony-baloney make-work schemes? What, in other words, does a few trillion dollars worth of other people's money – some stolen, the rest begged and borrowed – buy you these days? More jobs? A rebound in the housing market? A new suit and tie? Any measure of honest, good-for-something growth? A – dare we even say the word – "recovery"?

STOP THE SPENDING NOW CONGRESS!!!!!!!!!

The efficiency of the incandescent light bulb

Filaments in [incandescent] electric lamps are not as hot as the surface of the sun, yet the light they emit is very similar. Each one emits light in the entire wavelength range visible to the human eye . . . .

Incandescent lamps are notoriously inefficient, emitting less than 10% of the input power as visible light. The problem with more efficient sources like fluorescent lamps is that their light is not a continuous spectrum, but rather a handful of individual wavelengths. The effect is to distort colors of objects illuminated by the light.

Note that this “inefficiency” of incandescent light bulbs is the source of their scorn by the environmentalist left and their effective ban by the federal government. Energy Secretary Steven Chu reveals the mentality behind the ban when he says, smugly, of a law preventing individuals from buying the light bulbs they want: “We are taking away a choice that continues to let people waste their own money.”

What is Chu ignoring when he calls the choice to buy regular bulbs a “waste”?

Well, for one thing, he’s ignoring the fact that while incandescent light bulbs are not efficient in the sense of producing as much light per unit of energy as possible, they are incredibly efficient in the sense of producing the most desirable light for our money (including our energy). There is a rarely-consulted passage of a rarely-consulted document that champions “the pursuit of happiness.” When I choose to buy an incandescent light bulb, I do so because that gets me the best light for my money—with “best” emphatically including the quality of illumination I will enjoy as I read books, talk to friends, work in the evening, etc. To our government, such considerations are irrelevant; as long as I can fit neatly into government statistics that say I’m emitting less CO2 but I’m still alive and have access to illumination, why should it matter whether I enjoy my life more or less?

The ultimate standard of efficiency (be it energy efficiency, economic efficiency, or any other form) is the individual’s life and happiness. If anyone ever tells you that something you love is “inefficient,” and the cure is to shove something you hate down your throat, then “efficiency” has become a mere rationalization for tyranny.

Political Accounting

Since most politicians—simply by their career choice—indicate a desire for power, any measure that increases power will be considered a success. If a policy increases the number of people beholden to them, then it is good as an end in itself. The ultimate conflict of interest that subverts paternalism is that government officials want power and citizens want freedom.

There is no reason to expect contemporary Leviathans to become significantly more efficient in the future. The only way to fix most government programs is to repeal the underlying law and abolish the government agency. Anything less will be little more than a future full-employment program for investigative journalists.

http://www.thefreemanonline.org/featured/political-accounting/

Worse than Reported by the MSM

Greece’s debt-to-GDP ratio is 143%. America’s is officially 97%. But the $14.3 trillion national debt, stacked up against a $14.7 trillion economy, doesn’t tell the whole story.

• $14.3 trillion: “Official” national debt
• $5 trillion: Amount Uncle Sam is on the hook for Fannie Mae and Freddie Mac
• $62 trillion: Total liabilities and unfunded obligations for Social Security and Medicare

That’s more than $81 trillion... or a debt-to-GDP ratio of 553%.

We know how much the Federal Reserve doled out in emergency loans: $16.1 trillion between Dec. 1, 2007, and July 21, 2010. We know that because yesterday the Government Accountability Office completed its first-ever audit of the Fed, made possible largely through the persistence of Rep. Ron Paul making that audit, however incomplete, the law.

What we don’t know is how much of that has been paid back. “We have literally injected about $5.3 trillion,” said Dr. Paul last week during his questioning of Fed chief Ben Bernanke, “and I don’t think we got very much for it. The national debt went up $5.1 trillion.”

Bernanke did not challenge those figures.

Catch 22 on Poverty and Welfare

To the average American, the word "poverty" implies significant material deprivation, an inability to provide a family with adequate nutritious food, reasonable shelter, and clothing. But the actual living conditions of America's poor are far different from -- read: better than -- what these media images convey. What does it mean to be "poor" in America? I write about it in a new paper from The Heritage Foundation: "Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?" According to the government's own non-census data, in 2005 the average household defined as poor by the Census Bureau lived in a house or apartment equipped with air conditioning and cable TV.

http://www.americanthinker.com/2011/07/catch_22_on_poverty_and_welfare.html

Making Priorities

Cut the Damn Spending

It's time to cut the damn spending! This means taking a commonsense approach to America's priorities and eliminating outdated programs that have long past served their original purposes and exist only out of habit and to protect their bureaucracies.

http://www.americanthinker.com/2011/07/cut_the_damn_spending.html

Undertaxed or Overspent?

Historical spending and revenue data cannot be used to justify current levels of expenditures or taxation. However, it is important that thoughtful citizens as well as those directly involved in deficit-cutting legislation be informed about the origins of the deficits. Have recent deficits been the result of taxes falling more than spending or of spending increasing more rapidly than taxes?

The more things change, the more they stay the same. This article was written in 1988. What has changed?

http://www.thefreemanonline.org/columns/undertaxed-or-overspent/

America - The Europe of the West?

The reality is that Americans need not resign themselves to the future that the White House would have them embrace. Flawed policies are holding back the U.S. economy, and there is room to grow if the government gets out of the way. As Heritage’s Bill Beach explains that, “Based on our talents, resources, and capital structure, the economy should be growing now at 4—5 percent. That growth rate would produce over 250,000 jobs per month…enough to reduce the unemployment rate.” But because of big government policies, we’re not realizing those gains.

America doesn’t have to be France. It doesn’t have to carry a European-style debt and tax burden. But the White House and congressional leaders must choose to enact policies that reject a European-style future.

http://blog.heritage.org/2011/07/11/morning-bell-america-the-europe-of-the-west/