September 13, 2011

AP’s Crutsinger Predictably Avoids Most August Numbers, Raised Spending Baseline in Deficit Report

The August Monthly Treasury Statement released by the government today reveals that Uncle Sam ran a $134.2 billion deficit in August. That figure was $44.7 billion, or 48%, higher than the $90.5 billion deficit seen in August 2010. The year-over-year deficit increase occurred because outlays increased by 19% to over $303 billion, while receipts went up by 3% to $169 billion.

Gee, that wasn’t difficult to express, was it? But it was apparently too difficult for the Associated Press’s Martin Crutsinger to communicate to his readers. Of the eight figures and percentages noted in the opening paragraph, only one — the August 2011 deficit — appears in his report.

Crutsinger’s defense may be that he wanted to concentrate on year-to-date figures. But that objection, if raised, rings hollow, given that he wasted several paragraphs falsely rehashing the past decade’s fiscal history while completely failing to explain why spending continues to increase even though the 2009-2010 stimulus program is supposedly over.

Here are excerpts from Crutsinger’s Tuesday afternoon report (bolds and numbered tags are mine):

Federal deficit totaled $1.23T through August

The federal budget deficit reached $1.23 trillion in August. The third straight $1 trillion-plus deficit adds pressure on Congress and the White House to reach agreement on a long-term plan to trim government spending. [1]

The Treasury Department said the deficit grew by $134.2 billion last month. At that rate, [2] the nonpartisan Congressional Budget Office projects the deficit will total $1.28 trillion when the budget year ends in September. That would nearly match last year’s $1.29 trillion imbalance and come in below the record $1.41 trillion hit in fiscal 2009. [3]

… Interest on the debt is the fastest growing category of the budget, according to the Treasury report. Payments totaled $233 billion through August, up 15 percent from the same period a year ago.

Revenues totaled $2.06 trillion through August, up 7.6 percent from a year ago. Tax receipts have increased as more people have gone back to work. Government spending totaled $3.3 trillion through August, an increase of 3.8 percent from the same period in 2010. [4]

… Obama has also recommended a series of tax hikes to pay for his $447 billion job-creation proposal. [5] He wants Congress to limit itemized deductions for charitable contributions and other deductions taken by families making over $250,000 a year, close loopholes for oil and gas companies, [6] change the tax treatment of corporate jets and require investment fund managers to pay higher taxes on certain income.

… The government last recorded a budget surplus in 2001, when revenues were $127 billion greater than spending. The surpluses were expected to total $5.6 trillion over the next decade. [7]

But the deficits grew again after President George W. Bush won approval for broad tax cuts … [8]

Higher spending on unemployment insurance and food stamps, and a sharp contraction in tax revenues, widened the deficit. And it grew even more after the Obama administration backed a $787 billion stimulus program [4] to boost the economy.

Notes:

  • [1] — Why this situation hasn’t put pressure on President Obama to refrain from new spending initiatives — especially of the type that did not work the first time around — is unexplained.
  • [2] — “At that rate” of $134 billion per month, the deficit will be well over the number Crutsinger identified. The words weren’t needed.
  • [3] — As explained previously (go here for the original methodology write-up), in fiscal 2009 the government recognized huge losses relating to TARP investments before they actually occurred or could reasonably be predicted. This was designed to dump all of the bad news into that year and to artificially create an impression of spending control in future years. In fiscal 2010, the government “discovered” that its losses wouldn’t be so large to the tune of $115 billion, and arbitrarily reduced outlays by that amount. A similar smaller such adjustment has also occurred in fiscal 2011. A graphic showing an adjusted rundown yearly receipts, spending and deficits is here. Unsurprisingly, it shows that spending has increased significantly in every fiscal year since 2007.
  • [4] — If the stimulus spending is done, all other things being equal, spending should have decreased by $393 billion, or about half of the two-year, $787 billion cost of the stimulus plan. But spending has continued to climb. Crutsinger never explains why. The truth is, again as seen at this graphic, that spending increased by 30% from fiscal 2007 to 2010, and is on track to increase yet again this year.
  • [5] — Only in AP Land could $447 in current spending be “paid for” with tax increases spread over 10 years. Someone who knows Crutsinger should ask to borrow money for lunch, tell him they’ll “pay him back” slowly over 10 years, and record his reaction. Let me know if he says “yes”; I’ll be right over.
  • [6] — Unless I’m missing something, what I’ve learned about the so-called “oil company loopholes” is that they represent legitimate out-of-pocket business expenses that any business would expect to be able to deduct from revenue to arrive at taxable income. If anyone can demonstrate that this is not the case, I want to hear about it.
  • [7] — The $5.6 trillion in “expected” surpluses was a CBO projection which failed to recognize the Internet bubble which was already well under way when the report was released. It was obviously bogus the day it was published, and remains so over a decade later.
  • [8] — This is so tired. As shown numerous times, in the four years after the “Bush tax cuts” of 2003 were enacted, federal receipts increased by 44%. Blaming the tax cuts for “lost revenue” assumes economic behavior would have been the same during those years if the cuts hadn’t been enacted, which is ridiculous.

The bottom line is that, as so many predicted when it happened, the Obama administration used the stimulus to increase the government’s spending baseline to the point where any suggestion that outlays should be reduced to below $300 billion a month is considered outrageous — even though the government was spending less than $230 a month just four years ago. You’ll never see Martin Crutsinger or anyone else at the AP acknowledge that basic truth.

Cross-posted at NewsBusters.org.

Lucid Links (091311, Afternoon)

Filed under: Lucid Links — Tom @ 4:02 pm

At Right Scoop: “Ron Paul blames US foreign policy for 9/11 attacks.”

He got booed. He deserved it.

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And here I thought Rick Perry said “I was wrong, I am sorry” about Gardasil. Michelle Malkin (here and here) disagrees. She makes several good points.

I get the concerns, especially since Perry and his peeps seem to be spinning instead of just saying flat-out that he was wrong, he’s sorry, and he wouldn’t do anything like it again.

The one thing on which I’m not going to give Gardasil opponents any quarter is the idea that it is “unproven” or “dangerous,” specifically Michelle’s contention that:

… Perry rushed to mandate the Merck-pushed order less than 8 months after it had received FDA approval. Clinical trial and safety data was extremely limited at the time.

What, now we have to wait until years AFTER the FDA approves a drug to have any confidence about its safety?

C’mon. Anyone following the FDA should know that it takes way too long to approve good drugs, and that many drugs deserving approval never get it. My late father as well as another family member have worked in the pharma industry, so I also have some indirect but solid knowledge of what a ridiculous process getting FDA approval really is. The contention that the FDA lets drugs go when “clinical trial and safety data” is “limited” just doesn’t wash.

If you don’t want your kid to receive Gardasil or any other drug based on higher principles, that’s fine — in fact, it’s your obligation as a parent to follow those principles — but please don’t hide behind the supposedly “unproven” safety of the drug. (I will concede the possibility of synergistic issues between multiple vaccines, but unless someone has info to the contrary, Gardasil hasn’t been shown to be any more vulnerable to that problem than any other vaccine.)

That said, Perry is weakening himself needlessly. He just needs to say “I was wrong, I am sorry, I won’t do it or anything like it again, period” — and mean it.

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“Poverty” as measured by the Census Bureau went way up in 2010 (from 14.3% of the population to 15.1%) after going way up in 2009 (from 13.2% to 14.3%), thanks to the POR (Pelosi-Obama-Reid) Economy, more recently characterized as the Fear-Based Economy.

“Poverty” is in quotes for a couple of reasons. First, the Census Bureau’s primary measurement doesn’t take most “noncash” government benefits, like traditional welfare, food stamps, and I believe Earned Income Credit, into account. Second, as Heritage has frequently pointed out (today’s example here), “poor” in America would be considered pretty impressive in most of the rest of the world, based on the household appliances, other conveniences, gadgets, and toys many poor families own.

Nonetheless, the Census Bureau’s “poverty” measurement and its median income data (2008 to 2009 drop, 3.4%; 2009 to 2010 drop, 2.3%) are meaningful year-to-year comparables which show just how badly the economic situation of millions of Americans deteriorated during the two years Nancy Pelosi, Barack Obama, and Harry Reid had exclusive control of the executive and legislative branches. The slide will probably continue as long as Reid’s Senate and Obama have effective veto control over anything resembling sensible fiscal policy.

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At The Hill (“Axelrod: ‘We’re not in a negotiation’ on Obama $447B jobs package”):

“Obama’s top political adviser David Axelrod said Tuesday that the administration was unwilling to break up the president’s $447 billion jobs plan if Republicans were only receptive to passing certain elements.”

… It’s not an a la carte menu. It’s a strategy to get this country moving,” Axelrod said Tuesday on ABC’s “Good Morning America.”

Fine, David. The whole thing is indigestible on arrival.

Remember this the next time anyone on the left suggests that they’re looking for bipartisanship.

Obama in Ohio Today to Promote Tax-and-Spend, While Kasich & Co. Promote Jobs and Growth

Filed under: Economy,Taxes & Government — Tom @ 9:14 am

President Obama is visiting Ohio today to “promote” his “jobs plan” (“promote” is the word in the Associated Press headline).

What he’s promoting is really a bill which is Stimulus II funded almost entirely with tax increases. Ron Bonjean at US News describes the “Jobs Plan” as a vehicle which “has turned into (a) cynical maneuver that is no longer focused on creating jobs, but on scoring campaign points.”

Though I don’t have the list of those Mr. Obama plans to meet, I suspect Buckeye State Governor John Kasich is not among them. That’s a shame.

Under Kasich, according to the government’s Bureau of Labor Statistics, Ohio has added 79,000 seasonally adjusted jobs during the first seven months of this year, while the U.S. has gained 872,000. If the entire country was adding jobs at Ohio’s rate, that number would be over 2 million.

Instead of promoting a misnamed “jobs plan,” Kasich & Co. are promoting job creation and economic growth without tax increases while controlling state spending. Though it’s still far too early in the fiscal year to break out the party favors, as seen in the State’s August Budget Report (fairly large PDF obtainable here), Ohio’s tax receipts during the past two months are up by over 11% compared to the same two months a year ago (2% ahead of budget), while spending (including interagency transfers) is down by 6% (2.8% below budget).

Too bad for the rest of the U.S. that the President won’t consider doing at a federal level what Kasich & Co. are doing in Ohio — which is why Mr. Kasich’s pointed response several months ago to a presidential complaint remains on target today:

Kasich (internal link added by me):

… I was Chairman of the (U.S. House) Budget Committee and was the chief architect of the last time we balanced the budget.

And here in Ohio, we, we have balanced our budget here, under the budget that we have presented, along with preserving the tax cut.

The President of the United States has I think a $13 trillion debt. Why doesn’t he do his job? And when he does his job and gets our budget balanced and starts to prepare a future for our children, then maybe he can have an opinion on what’s going on in Ohio.

The President hasn’t done that, and has since shown himself to be the principal obstacle to doing that.

The national debt is now over $14.7 trillion.

Positivity: Divine Mercy congress inspires quake-stricken New Zealand

Filed under: Positivity — Tom @ 5:57 am

From Christchurch, New Zealand:

Sep 2, 2011 / 01:50 am

Catholics in Christchurch, New Zealand drew inspiration from a recent Divine Mercy Congress as they work to rebuild from a series of devastating earthquakes that have hit the country in the last year.

“The blessings and graces which all received at the congress have and will continue to inspire all those who attended to greater acts and greater works of mercy in their homes, workplaces, and missionary endeavors,” Pat Barrett, national coordinator for the event, told CNA on Sept. 1.

“This is particularly important right here now in Christchurch,” he added, “which has suffered exceptional losses and destruction over the past 12 months.”

Since Sept. 2010, four major earthquakes and over 7,000 aftershocks have shaken the city and “reduced its center to a demolition site,” Barrett said.

Over 200 people have been killed in the series of quakes and 27,000 have left the city permanently. More than 5,000 damaged homes need to be razed to the ground, “to say nothing of the 900 plus city buildings that will have to be demolished,” he said.

The New Zealand Apostolic Congress, which was held at the local St. Bede’s College from Aug. 26-28, was launched under the title “Divine Mercy – God’s Gift for our Time.” The event began with a Votive Mass of Divine Mercy, celebrated by Bishop Barry Jones of the Christchurch diocese.

Bishop Jones was accompanied by Archbishop Alapati L. Mataeliga of Samoa and Fr. Patrice Chocholski, Secretary General for the World Apostolic Congress on Mercy and parish priest in Lyon, France.

“Fr. Patrice Chocholski has traveled around the globe over the past three years, visiting every continent, and attending every national and regional congress and encouraging all to greater trust in Divne Mercy and greater works as servants for the Lord, ” Barrett said. “He spoke of the need for modern witnesses to Divine Mercy in a world infused by hate, revenge, and self.” …

Go here for the rest of the story.