Lickety-Split Links (122609, Morning)
Perfect analogy by Reuters columnist James Pethokoukis on the statist health care monstrosity passed by the Senate (bold is mine):
Basically, the government is taking money out of Medicare’s Hospital Insurance (MHI) trust fund, replacing it with IOUs and then spending it. But the CBO doesn’t score such intra-governmental transfers as the same sort of debt as when a Treasury bond is issued. But it is an obligation just the same. If not for this accounting quirk, the Senate health bill seemingly would be scored as increasing the budget deficit by $170 billion or so over the next decade (itself a funny number since taxes come first, then benefits) instead of cutting the deficit by $130 billion. This is a similar shell game played by the government when it uses Social Security surpluses to mask the true depth of the budget deficit.
And, as has happened with Social Security during much of the past year (last item at link), when the time comes that related tax revenues are less than benefits paid out, there will be no real money available to pay benefits, because the MHI trust fund’s supposed balance will be a bogus as Social Security’s currently is. Benefits will have to come from current taxes or new debt, assuming it can even be issued.
Update: I critiqued a related pathetic report by the AP’s Charles Babington at this later post.
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CPAC — “Consciously Providing Ammo to Critics.” Given that the organization has treated Objectively Unfit Mitt Romney as a headliner during past several years, I think the first word should be “Continually.”
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These items are a couple of weeks old, but conditions have not materially changed. David Goldman has “Dave’s Top 10 Reasons To Dismiss Last Friday’s Unemployment Report” (HT Pethokoukis, who himself has 12). They’re all good, though if they looked at the government’s actuals (i.e., the not seasonally adjusted figures), they could come up with even more.
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Redefining “aiming low” –
North Dakota Democrat Kent Conrad, chairman of the Senate Budget Committee, has said that the Senate legislation would postpone the Medicare trust fund’s projected 2017 insolvency by several years.
So you see, this is only the beginning of the problem, not the end.
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From the “This Country is in the Best of Hands” file – “Kerry Floats Plan to Visit Tehran; White House Wouldn’t Oppose Trip, First by Top U.S. Official in 30 Years, to Chagrin of Iran’s Opposition” (HT Hot Air).
In contrast to Ronald Reagan, who cut Poland and its Soviet-backed controllers no slack in December 1981, the Obama administration, especially if it designates Kerry as its “official representative” if/when he goes, will be legitimizing the current regime and demoralizing its opposition.
Poland ultimately became free. Does Obama want Iran to be free? Maybe someone should ask him.
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Some context in Ford’s buyout offer to all of its U.S. hourly UAW workers:
- Even after breaking its promise not to lay off any more hourly employees, GM has 48,000 of them, plus including 6,000 – 7,000 on indefinite layoff collecting “sub pay.”
- Chrysler plays things a lot closer to the vest, even though taxpayers own a substantial percentage of it. Its hourly headcount appears to be something like 23,000. It was reported as 26,000 in late April.
- Ford’s sales in most recent months, including November, have been running at about 80% of GM’s and are getting pretty close to doubling Chrysler’s.
- Looking at those results proportionally and taking into account GM outsourcing of more comparatively more components to facilities in other countries, Ford’s 41,000 hourly headcount with only 634 on layoff is probably too many, but not by a lot, especially if (very, very, big if) the company’s early-December plans to significantly increase production are still in place.
I see the buyout a way for Ford to get a bit leaner and to build up a cash reserve in case the car business as a whole doesn’t recover as expected, to hedge against adverse statist actions designed to protect the government’s two wards, and to get ready for negotiations two years from now that result in no new labor concessions. Such concessions might not be necessary if the company can balance its headcount against its sales. What’s more, Chrysler and GM’s contracts are as I understand it basically locked in until 2015.
