July 24, 2010

Adjusting WH Deficit and Spending Projections to Cash-Based Reality

Here’s the White House’s latest deficit projection, as illustrated at the Corner (HT Instapundit):


As explained in two previous posts, FY 2010 is worse than it appears by about $115 billion:

  • July 9 — “CBO Notes YTD Deficit Tops $1 Trillion; Reality Is Much Worse”
  • April 13 — “AP Cites ‘Dramatic’ March Deficit Reduction Due to $115 Billion Non-Cash Item; Out-of-Control Spending Continues”

The essence of the adjustment, as explained at each post:

… the administration pushed as much “bad news” (TARP “asset” writedowns) as it could into last year’s financial reporting, since last year was going to be a disaster no matter what. But since they overdid it with the writedowns last year (”Gosh, how did that happen?”), they can make this year look better than it really has been.

So here’s the cash-based reality:

  • Pushing the $115 billion non-cash adjustment back into FY 2009 where it belongs reduces the reported deficit from $1.416 trillion to $1.301 trillion, and reduces spending for that year from $3.520 trillion to $3.405 trillion.
  • After doing that, the projected deficit for this fiscal year is really $1.587 trillion ($1.472 trillion above plus $115 billion), and projected spending (in the large PDF White House report at Page 18) goes from $3.603 trillion to $3.718 trillion.

Here’s how the White House’s projected FY 2010 situation really compares to FY 2009 after removing the effect of the non-cash adjustment:

  • The FY 2010 deficit will be almost 22% higher than FY 2009 ($1.587 trillion divided by $1.301 trillion is 1.2198).
  • In a nearly zero-inflation environment, FY 2010 spending will exceed FY 2009 by over 9% ($3.718 trillion divided by $3.405 trillion is 1.092).

All of this is before any other non-cash adjustments that might be dreamed up to push reported deficits into or out of 2010. Yours truly will be watching, the apparatchik press mostly won’t.

Cross-posted at NewsBusters.org.


Related: For those who need the nitty-gritty of the “logic” behind the non-cash adjustments, go here (“The Federal Deficit Gets Nearly Indecipherable”).

Positivity: Religious sister who ran bank for India’s poor dies at 86

Filed under: Positivity — Tom @ 9:49 am

From Bangalore, India:

Jul 22, 2010 / 05:31 am

Sr. Nancy Pereira, foundress of a Fund for the Poor bank to help impoverished clients in Bangalore, India, died on July 14 at the age of 86. Her fellow sisters remembered her for her service to the poor with “joy” and “creative solidarity.”

Sr. Nancy was born at Pudukkruruchy in the state of Kerala on August 14, 1923. She made her first profession as a member of the Daughters of Maria Auxiliatrix (FMA) on January 6, 1945.

She became well-known in the early 1990s when she started the Fund for the Poor, following the example of the Nobel Peace Prize awardee the Grameen Bank in Bangladesh. According to CBCI News, clients of Sr. Nancy’s bank had to be poor people from slums or villages who lacked the opportunity to improve their livelihoods.

To obtain credit, a prospective applicant had to prove that he or she had saved a small sum for a year and had taken part in meetings of a small credit management group. The bank’s annual interest rate on its loans only covered management expenses.

The Bank for the Poor’s credit projects involved the whole family and helped improved living conditions both for many families and whole villages.

The FMA Sisters described Sr. Nancy in a short biography, saying she was convinced her vocation was “to be with the poor and to devote herself to serving them.”

“She loved all of them and tried to make them aware of their rights as well as their duties and to live their dignity as children of God. She did this with joy, involving many people in her projects for doing good. Forgetful of self, she lived a life of poverty to enrich the poor,” the sisters wrote. …

Go here for the rest of the story.

Peter Orszag: Another Journolist Member With Government Ties? Klein Says Not

journolistPrevious NewsBusters posts Friday afternnoon provided readers with a list of 65 known participants in the now-infamous Journolist (via Melissa Clouthier) and the special case of Jared Bernstein, Vice President Joe Biden’s Economic Adviser (via Lachian Markey).

(Aside: Does the fact that Biden has his own econ adviser explain why what the Vice President says in public about the economy is so often of sync with the rest of the President’s peeps?)

Here’s another very special name that could (emphasis: could) be added to the (Journo)List: the soon-departing White House Budget Director Peter Orszag.

An Investors Business Daily editorial Friday identified the existence of Orszag’s involvement as a given without providing any specifics:

As it turns out, Office of Management and Budget Director Peter Orszag also was a participant in the online group.

Nothing wrong with talking to government officials — unless you’re doing so with a secret agenda, selling partisan views as objective media coverage to an unsuspecting public.

Contrary to claims now being made, JournoList wasn’t an innocent Web tool, a harmless forum for discussion. It was an organized effort by one party and its sympathizers in the liberal press to secretly influence public debate and policy.

Orszag’s association with Klein’s effort was noted seventeen months ago — by head Journolister Ezra Klein himself at the American Prospect (HT Jeff Goldstein at Protein Wisdom). Retrospective comic relief in the excerpt that follows is included at no extra charge.

But carefully note that in terms of the matter at hand, Klein does not definitively describe Orszag as a list participant, and most of the others Klein identifies as having “helped” are not on Clouthier’s list as it currently exists (number tags correspond to the person’s presence on Ms. Clouthier’s list):

… The work of this site has always been to illuminate standard political reporting with expert policy commentary. In that, I’ve been helped by the many experts who have adopted the medium as their own: Mark Thoma, Brad DeLong (15), Paul Krugman (8), Matthew Holt, Peter Orszag, Andrew Gelman, Larry Bartels, Dani Rodrik, John Sides, among others. As a journalist, it’s hard to always know who to call or which questions to ask. The joy of those blogs is that I don’t have to guess what experts think is important: They simply explain what they think is important and I can use, or follow-up on, the information.

As for sinister implications, is it “secret?” No. Is it off-the-record? Yes. The point is to create a space where experts feel comfortable offering informal analysis and testing out ideas. Is it an ornate temple where liberals get together to work out “talking points?” Of course not. Half the membership would instantly quit if anything like that emerged. There are no government or campaign employees on the list.

22%, or two of Klein’s nine “helpers,” are known Journolist members. We don’t know about the other seven. Clouthier’s list of 65 only constitutes about 16% of the listserv’s estimated 400 total participants.

In an open tweet to Pajamas Media’s Ed Driscoll at about noon on Friday, Klein claimed that that “Orszag was never a member. That list of expert bloggers I liked wasn’t a list of Jlist members.”

Driscoll’s pointed response:

So release the full list of members, and let us know who was. Shouldn’t President Obama’s “Non-Official Campaign” staff be even more open and transparent than the administration that it continues to serve?


The possibility also clearly remains that IBD is in possession of information I’m not aware of.

Cross-posted at NewsBusters.org.