October 8, 2006

UN Sec-Gen Update, Given NoKo Nuke Test: Uh-oh

Filed under: Taxes & Government — Tom @ 11:48 pm

This is not good, especially given the news of North Korea’s nuke test:

The legacy of mediocrity continues.

The military coup in Thailand has essentially torpedoed the prospects of Deputy Prime Minister Surakiart Sathirathai, who had been endorsed by the Association of Southeast Asian States (ASEAN) and purportedly backed by China. The man left standing, and current frontrunner for Secretary-General after the informal Security Council vote on Monday (which will be formalized next week), is South Korean Foreign Minister Ban Ki-moon. In Mr. Ban the world body will have one-upped Kofi Annan: whereas on the eve of his election the latter had been guilty of past dereliction, the former stands before the world community in 2006 complicit in ongoing horror.

Ban became the new (South Korean) president’s foreign policy advisor and, since 2004, his foreign minister. Since then, two milestones in particular stand out as indicative of the man.

  • In 2005 the UN General Assembly, in an almost unprecedented display of moral courage, actually passed a resolution censuring North Korea for “systematic, widespread and grave violations of human rights” including “torture and other cruel, inhuman or degrading treatment or punishment, public executions, extrajudicial and arbitrary detention, the absence of due process and the rule of law, the imposition of the death penalty for political reasons, the existence of a large number of prison camps, and the extensive use of forced labor” as well as “all-pervasive and severe restrictions on freedom of thought, conscience, religion, opinion and expression.” Things have to get bad if international diplomats are willing to use words like those found in that resolution. Where was Foreign Minister Ban in the midst of this? Instructing his envoys to abstain, and sending out a spokesman to explain that his approach was necessary “for the sake of more urgent and important policy goals integral to peace and stability on the Korean peninsula.”
  • Earlier this summer, as Kim Jong-Il’s regime prepared to test its missiles, Ban’s foreign ministry insisted that Pyongyang was only planning to launch a civilian satellite. When Kim decided to celebrate the Fourth of July by firing off seven rockets — all of which are fully capable of hitting anywhere in South Korea — Ban’s government’s turned its ire on those who made an issue of incident, criticizing “the creation of a state of needless tension and confrontation by the excessive reaction of certain parties” which would “not be conducive to problem-solving.”

Is this the mettle one is to expect from the eighth secretary-general of the United Nations? If so, it won’t be long before we’ll be looking back nostalgically at the relatively courageous “Annan era.”

Yikes. This is especially troubling because this TCS Daily piece by Josh Manchester gives the impression that despite tonight’s nuke test by the NoKo, careful, calculated, firm, and ongoing diplomatic moves over the past several years at least have a chance of paying off by getting Pyongyang to foreswear its nuclear arsenal. It appears that part of the motivation for the test was to spite the Chicoms. If so, that’s actually good news, because the Chicoms had been coddling NoKo for quite some time. Now they appear to be convinced that a nuclear NoKo would not be a good thing.

I’m not happy to say this — I’m skeptical that anything short of armed conflict will convince the NoKos to stand down. But it figures that the new UN Sec-Gen’s appeasement posture might wreck whatever chance there might be of avoiding it.

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UPDATE: Allah at Hot Air notes that others share the “empty suit” assessment of Ban.

UPDATE 2: Also on the nuke test story — Michelle Malkin, Instapundit, Ace, MK Ham, Wizbang, Atlas Shrugs, and I’m sure a host of others.

UPDATE 3: Ban as Sec-Gen is done deal.

Weekend Question 3: What Are the Latest Reasons to Oppose the Ohio Learn and Earn Intiative?

Filed under: News from Other Sites,Taxes & Government,TWUQs — Tom @ 2:20 pm

ANSWER: Glad you asked.

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Here are the three latest reasons, from Jill at Writes Like She Talks, who has been counting them down from 57 (original post on her efforts is here), and will continue to do so until Election Day:

  • Reason 34: “Because Cleveland, Northeast Ohio, and Ohio as a whole already have more than enough bankruptcies.”
  • Reason 33: “Because pathological, problem and even low-risk gamblers have far higher divorce rates (accompanied by all the economic costs associated with divorce) than non-gamblers.”
  • Reason 32: “Because gambling venues make a city an impermissibly and detrimentally attractive nuisance, literally and figuratively.”

The Federal Budget Deficit: Bush Benchmark Achieved, Ignored

….. and the best may be yet to come.
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A huge point has been virtually if not totally ignored since the announcement on Friday that the reported federal deficit for the fiscal year that ended a week ago was $250 billionThe Bush Administration has done what it said it would do about the deficit three years ago, and has done it a full three years early, i.e., in half the time predicted.

This continues what has been a very difficult past few years for those who deride supply-side economics. If Washington, with a little help from the states, lets the supply-side engine continue to chug along for next several years, the results could be so positively stunning that it would become impossible for supply-side detractors in touch with any part of the real world to hang on to the comfort of their static-analysis fantasyland.

But first, let’s recap what has happened in the past three fiscal years:

  • Tax receipts have soared by over 35% (with 5.5%, 14.5%, and 11.7% increases in fiscal 2004, 2005, and 2006, respectively) from $1.78 trillion to $2.41 trillion (2004 and 2005 results can be found at Page 2 of this PDF from the Congressional Budget Office [CBO]; 2006′s receipts were estimated by adding the $253 billion revenue increase reported near the end of this longer story).
  • Despite the costs of the Iraq War, the rest of the War on Terror, Katrina relief, and not nearly enough control over other spending, the administration has accomplished its goal of cutting the reported deficit in half by the time it leaves office a full three years early (fiscal 2009, which ends a little less than three years from now, is the last budget over which the Bush Administration will have responsibility). Andrew Taylor of the Associated Press reported on the deficit yesterday (commented on here) but “somehow” missed this little nugget of good news, even though he reported on the administration’s original fiscal 2004 promise in a “not going to happen” manner just under a year ago on October 14, 2005 (last two paragraphs at link) –

    The White House has set a goal of cutting the deficit in half from the $521 billion prediction for 2004 that it issued at the beginning of that year. (the original goal was therefore set sometime before October 1, 2003, the beginning of the 2004 fiscal year — Ed.)

    The administration says it is still on track to reach that $260 billion goal by the time Bush leaves office. But administration budget projections leave out the long-term costs of occupying Iraq and Afghanistan, and have yet to be updated with cost estimates of hurricane relief.

    Even with all of those costs included, the administration has reached its goal. How ’bout that, Andrew?

  • Economic growth has averaged an annualized 3.89% during the past 13 quarters since the 2003 Bush tax cuts were passed. This is a record that for all practical purposes matches the best seven years of the Clinton administration, but trails the best seven years of the Reagan-Bush 41 and Kennedy Johnson eras, when more aggressive tax cuts were enacted:
    13QgdpGrowth
(Bottom time period actually ends at 2Q06 — Ed.)

This is all very nice. But it could get better — much, much better. So much better that it’s scary to even contemplate the possibilities, because if the ruling class in Washington thinks it might really happen, they’ll probably figure out how to ruin it.

For starters, understand that I have been using the term “reported federal deficit” for a reason. The TRUE federal deficit is much higher. That’s because for decades federal budgetmakers have reduced the true deficit by the amount by which Social Security tax collections have exceeded Social Security benefits, and have “borrowed” that money from the Social Security “Trust Fund” — even though the “Trust Fund” should be holding and investing those funds to help cover future benefit payments.

Here, pending what I assume will be very minor revisions, is how fiscal 2006 really turned out, in billions; the $179 billion listed as “Social Security surplus” actually consists of a $177 billion Social Security surplus and $2 billion in positive cash flow from the US Post Office; both were estimated by the Congressional Budget Office (CBO) in its August 17 Budget Update Report (large PDF document; information is at Page 12):

FY2006deficit

All of this is important to understanding the following tantalizing possibilities:

  • If federal tax receipts continue to increase at just 9% per year, which is only about 70% of the 13.1% average annual increase in the past two fiscal years, and if federal spending and the Social Security surpluses in future years turn out as the CBO predicts in the Budget Report noted above, the last Bush budget in fiscal 2009 will show a reported surplus.
  • If federal tax receipts continue to increase at 9% per year, and if federal spending and the Social Security surpluses continue to turn out as the CBO predicts, it will be fiscal nirvana — a honest-to-goodness REAL budget surplus will occur in fiscal 2011, less than five years from now.

Here’s is how it will look if the described assumptions hold up:

DeficitThruFY2011proj

So, will these hoped-for serendipitous events take place? Well, there are certainly a lot of barriers. Here are what I believe to be the biggest four:

  1. The CBO is assuming increases in projected outlays of just over 5% per year; unfortunately, the average increase during the past 5 years has been just under 7%. It’s not like 5% can’t be done; the average increase in outlays during the first five years of GOP control of Congress (1995-1999) was only 3.8%. The question is whether there is anything even resembling resolve in Congress to keep spending under control.
  2. The 9% revenue increases, though less than those of the past couple of fiscal years, still depend on two things that haven’t yet happened. First, the tax structure enacted with the Bush tax cuts of 2003 only extends out to 2010. There is absolutely no chance that the hoped-for revenue increases will materialize unless that tax structure is made permanent, or at least extended by a minimum of five more years. Make no mistake: The economy and the markets will treat a failure in this area for what it would really be — a massive growth-stalling tax increase that would drastically reduce the rate of growth in tax receipts, possibly below zero.
  3. The other thing that mostly hasn’t happened yet is fiscal control in the various states. Most of them, thanks to the very federal tax cuts that some governors and so many Blue Staters deride, are awash in revenue. Unfortunately, as has so frequently occurred in the past, most states are simply spending the extra money instead of taking the opportunity to enact their own economy-stimulating tax cuts. The states need to do their part to keep the economic engine running. Ohio (of all states) actually came through on this front with an income-tax reduction a few months ago, but needs to do much more.
  4. Most ideally, the top federal rate should come down further from its current 35%. In 1986, when the first wave of Reagan tax cuts started losing steam, it took another cut of the top federal rate to 28% to get the annual pecentage increase in collections back into double digits again. It’s likely that a cut in the top federal rate to that same 28% level would accomplish an identical result; it would certainly make the 9% revenue-increase assumption more likely to come true, and it could even lead to a level of economic growth closer to that achieved during the Reagan-Bush 41 and Kennedy-Johnson years.

As has been shown time and time again, suppy-side tax cuts work when they are allowed to do their magic.

Let’s keep the magic going, shall we?

Cross-posted at NewsBusters.org.

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UPDATE: From Pajamas Media, very funny — “Deficit Cut in Half. Three Years Ahead of Schedule. Deficit Not Gay. Nobody Notices.”

UPDATE 2: Welcome Instapundit readers! After the problems a couple of months ago, it’s nice to be set up to handle an Instalanche. Glenn notices that writing on the deficit doesn’t even involve virtual gay sex, which must explain the 527 Media’s lack of interest in this news in this post.

UPDATE 3, Oct. 12: The absolute final number reported by Treasury on Oct. 11 ended up being $247.7 billion.

UPDATE 4, Oct. 15: Welcome to Carnival of Insanities readers. A few days ago, this post got noticed by another Post — The New York Post.

Positivity: Acting Like God’s Children

Filed under: Positivity — Tom @ 7:02 am

Link — Matthew 18:1-5:

At that time the disciples came to Jesus saying, “Who is the greatest in the kingdom of heaven?” He called a child, had him stand among them, and said, “I tell you the truth, unless you turn around and become like little children, you will never enter the kingdom of heaven! Whoever then humbles himself like this little child is the greatest in the kingdom of heaven. And whoever welcomes a child like this in my name welcomes me.”

From ABC News, October 5:

The oldest of the five Amish girls shot dead in a Pennsylvania schoolhouse is said to have stepped forward and asked her killer to “Shoot me first,” in an apparent effort to buy time for her schoolmates.

Rita Rhoads, a midwife who delivered two of the victims, told ABC News’ Law and Justice Unit that she learned of 13-year-old Marian Fisher’s plea from Fisher’s family.

What’s more, Fisher’s 11-year-old sister, Barbie, who survived the shooting, allegedly asked the gunman, Charles Carl Roberts IV, to “Shoot me second,” Rhoads said.

“They were amazing,” Rhoads said, “absolutely amazing. There was a tremendous amount of calm and courage in that schoolroom.”

“Marian, the oldest one, did ask to be shot first,” Rhoads said. “The faith of their fathers really was embedded in them. … How many adults are willing to do that? Not many.”