January 29, 2009

Couldn’t Help But Comment (012909, Morning)

Filed under: Economy,Taxes & Government,US & Allied Military — Tom @ 9:26 am

Yeah, this is about the scariest chart ever, and I don’t know how you avoid serious inflation down the road when the government is printing money so furiously. Sadly, it looks like they’re just warming up.

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Election stuff and other matters have kept me from commenting on Uncle Sam’s spending binge and declining receipts. Well, here, using number from December 2008′s Monthly Treasury Statement, are the first three months of the current fiscal year compared to last year (all figures are in millions):

FY2009thru3months

There’s not much to say to this, except what I said a couple of weeks ago about the POR (Pelosi-Obama-Reid) Economy we are enduring: Tanks a lot.

Beyond that, for reasons yours truly documented all the way back in 2005, the real results are even worse than they appear. And I really hate being right about the fourth reason noted at that post — “…. we as a country, thanks to the poor example the GOP has set during the past four-plus years, are philosophically defenseless to argue that getting spending under control and at least reducing the REAL annual deficit to zero are good ideas.”

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Having said that, some progress was made getting back to basics yesterday. Kudos to Republican Leader Boehner and his party for unanimously rejecting the aptly named “Porkulus” package that is at best about 12% stimulus, and is better described as the big spenders’ 40-year wish list (“just about every pent-up Democratic proposal of the last 40 years”).

The other party owns the POR (Pelosi-Obama-Reid) Economy. So it’s only appropriate that they own what they are trying to push off as the solution to the mess they created. It isn’t anything resembling a solution. It’s so utterly lacking in items relevant to economy recovery that it leaves you wondering whether they really want a recovery at all.

If a GOP president had promised to eliminate pork/earmarks and had almost simultaneously proposed a bill such as this, he or she would be laughed out of the Beltway in minutes — and justifiably so. But that’s exactly what Barack Obama has done. Ten days in, there is little sign that a serious person is in charge.

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Reason’s Hit and Run blog needlessly apologized in a blog post that criticized former New York Times reporter David Cay Johnston’s “Fiscal Therapy” in Mother Jones. The ever so (not) fair and balanced Johnston was last seen at BizzyBlog in August 2008, when I observed that he has become a bit of a fave as a speaker at fever-swamp events.

Johnston has this suggestion relating to tightening up the tax system in his MJ piece:

Invade the Caymans
In 1983 just 10 percent of America’s corporate profits were funneled through places that charge little or no corporate income tax; today more than 25 percent of profits go through tax havens. The Obama administration could tell the Caymans—now fifth in the world in bank deposits—to repeal its bank secrecy laws or be invaded; since the island nation’s total armed forces consists of about 300 police officers, it shouldn’t be hard for technicians and auditors, accompanied by a few Marines, to fly in and seize all the records. Bermuda, which relies on the Royal Navy for its military, could be next, and so on. Long before we get to Switzerland and Luxembourg, their governments should have gotten the message.

Now I have a bone-dry sense of humor at times, but I’m not seeing a hint that Johnston doesn’t mean it in the just-excerpted paragraph. True, in the next paragraph he pulls back — a little:

Barring gunboat diplomacy (tempting as it is), there is no reason we cannot pass laws to block financial transactions with tax havens or even, Cuba-style, make it a crime for Americans to visit or do business with them without special permission. Congress could declare the hiding of funds a threat to national security and require that anyone with offshore assets disclose them to the IRS within 30 days and pay taxes, interest, and penalties within 180 days. For the holdouts, temporary special teams in the IRS and Justice Department could speedily pursue civil or criminal charges.

But what if the tax havens don’t let IRS auditors look at their records? It looks to me like David would want our government to give in to “temptation.”

What caused the Hit & Run apology was a missive from Johnston, who used lines of argument BizzyBlog readers are all too familiar with:

Wow, what reactions—many of them full of venom and personal attack, but without any substance on the issues in my article. BTW, for those who make wild guesses and get it wrong, I am a registered Republican and chairman of a corporation I founded with one of my sons. ….. And of course in my Mother Jones piece I am jesting about actually invading the Caymans, as Radley sort of notes, but I am joking not about the need to enforce the law and stop helping calculated cheats get away with their felonies.

The “registered Republican” line is a classic. C’mon David, who did you really vote for in the last six presidential elections?

Until Johnston fesses up on that, Reason’s apology is needless.

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11 Comments

  1. Engaging in Orwellian euphemisms is a standard Dem tactic, no surprises there. Whenever a Dem labels a piece of legislation you know it will do the opposite of what it implies. Obama is nothing more than a figurehead so there is no need to look to him for any leadership. If you really want to know who’s in charge, look to Nancy Pelosi, queen of the House.

    I am intrigued by Johnston choice of targets, doesn’t he know the Kennedy clan uses these offshore tax havens to shelter their vast wealth?

    Comment by dscott — January 29, 2009 @ 9:56 am

  2. Tom, for a point of clarification to the readers, the chart is in millions, i.e. add 6 zeros behind the published figures.

    For the 3 month period October, November and December 2008, the federal government spent 1,032,638,000,000 dollars. Quite a shopping spree. What do we have to show for all this money spent???????

    Comment by dscott — January 29, 2009 @ 10:05 am

  3. #2, thx, added.

    #1, offshore stuff was a brief issue with the Clinton’s in HRC’s campaign last year.

    Comment by TBlumer — January 29, 2009 @ 10:45 am

  4. Welcome to the Democrat Economy. Remember, this is what the people voted for when they put the Dems in control in ’07 and reconfirmed last Nov. Apparently, the Hope and Change they wanted was recession cum depression. Oh well. Now they got it so don’t want to hear any of them complain when unemployment is in double digits and a panoply of Jimmy Carteresque numbers start floatin’ by, ‘cuz they were warned. I’m going to remind them and laugh and laugh and laugh.

    Comment by Joe C. — January 29, 2009 @ 2:01 pm

  5. You would hardly know it from the post here that I was one of the first people, and just about the first journalist, to urge skepticism of the bailout, cited specific things to watch for and did so in part because the Democrats instantly bought into the panic talk of Secretary Paulson in September.

    Since then in articles, on national TV and in radio interviews I have again and again pointed out from facts I could extract from the minimal (and hard to get at) disclosures in the public record who really benefits (Goldman Sachs et al).

    I have also shown who really bears the burden (taxpayers) of the $8.4 trillion in spending, investments (of assets but at full or near full price when their value had already collapsed) and guarantees that was in the bailouts. And also showing how the lacked coherence, except for taking care of Goldman, through rescuing its counter parties.

    BTW, $8.4 trillion equals all of the individual income taxes paid during the George W. Bush years plus about another trillion — the folks on Wall Street should thank you for your generosity.

    Did you know that we taxpayers paid a price for their Goldman warrants that effectively was a gift of $5 billion of your tax dollars, if you use Warren Buffett’s deal as your baseline? Must have missed my expose of that.

    If the Kennedys are cheating on their taxes, as one person above imagines, by hiding money in the Caribbean then they should be found out, pursued civilly and prosecuted criminally along with everyone else committing calculated white collar felonies.

    The problem is that our government has rules that make it easy for some of us to cheat on our taxes, but other rules that make sure wager earners cannot cheat because the government gets independent verification of what is on your tax return.

    Comment by David Cay Johnston — January 29, 2009 @ 2:45 pm

  6. #5, That’s nice David, but the question about who you voted for is still open.

    BTW, I don’t disagree that there are breaks some of the super-wealthy leverage unfairly (I suppose this means you like the Fair Tax? Somehow I doubt it; you appear to want a transaction-based paperwork nightmare). The existence of those breaks doesn’t negate the value and proven historical effectiveness of supply-side econ.

    Comment by TBlumer — January 29, 2009 @ 2:51 pm

  7. I have for voted for Republicans, Democrats, Conservatives Liberals, Independence and Working Families and voted for candidates on every line in the last election.

    Try going where the facts go. Sometimes GOPers get it right, sometimes Dems and, more often, neither.

    Good policy grows from skepticism and careful examination of facts, mixed with empirical evidence over time, not from, as you do, wearing warped lenses in a vain effort to make everything reassure your prejudices. Often facts show that things are not as all as one was taught or believed or wished.

    Comment by David Cay Johnston — January 29, 2009 @ 6:25 pm

  8. The issue of inflation is right now beyond any reputable economist’s forecasting horizon and will remain so, notwithstanding the amount of money the government prints, until those printed dollars have some velocity, of which there is currently none. The Fed/Treasury will have ample time to drain the liquidity they’re now trying to provide. But this is a 2011 or 2012 story, at best.

    Comment by Invictus — January 29, 2009 @ 6:30 pm

  9. The POR economy is simple to figure out. Just look at the years prior to Jan 2007 and after.

    Comment by Scrapiron — January 29, 2009 @ 8:33 pm

  10. #7, “Try going where the facts go.”

    That’s what I try to do. That’s what I think you try to do. I seem to be finding better facts.

    There are no warped lenses here, only your warped view of me.

    And once again, you haven’t answered the question. The fact that you’re a registered Republican is totally meaningless.

    Comment by TBlumer — January 29, 2009 @ 10:22 pm

  11. #5, The Kennedy keep their money in Fiji not the Caribbean, they were exposed a couple of years ago: http://antiprotester.blogspot.com/2006/01/fiscal-hypocrisy-of-edward-m-kennedy.html But I find your indirect defense of the Kennedys telling.

    When you talk about Warren Buffett and Goldman Sachs you falsely imply they are Republicans, gauging by the bulk of their political campaign contributions, they are Democrats.

    Very slick demagoguery by citing $8.4 Trillion federal spending figure since you refuse to name the revenue over that period of time AND since you declined to acknowledge the Democrats took control of Congress on Jan 2007 who were directly responsible for the two biggest deficit years during the Bush Administration.

    Mr. Johnston, your arguments betray your political alliances, you are not a Republican much less a conservative, not even by a long shot. How many times have we been treated to the faux claim by Democrats playing at one-ups-manship? We have a saying, if it walks like a duck, quacks like a duck and looks like a duck, it’s a duck. Everything you say is liberal Democrat.

    Comment by dscott — January 30, 2009 @ 9:48 am

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