Quotulatiousness

January 28, 2013

Japanese finance minister: “elderly are an unnecessary drain on the country’s finances”

Filed under: Government, Health, Japan — Tags: , , , — Nicholas @ 11:32

The Guardian reports on recent comments by the new finance minister in Japan:

Japan’s new government is barely a month old, and already one of its most senior members has insulted tens of millions of voters by suggesting that the elderly are an unnecessary drain on the country’s finances.

Taro Aso, the finance minister, said on Monday that the elderly should be allowed to “hurry up and die” to relieve pressure on the state to pay for their medical care.

“Heaven forbid if you are forced to live on when you want to die. I would wake up feeling increasingly bad knowing that [treatment] was all being paid for by the government,” he said during a meeting of the national council on social security reforms. “The problem won’t be solved unless you let them hurry up and die.”

Aso’s comments are likely to cause offence in Japan, where almost a quarter of the 128 million population is aged over 60. The proportion is forecast to rise to 40% over the next 50 years.

[. . .]

To compound the insult, he referred to elderly patients who are no longer able to feed themselves as “tube people”. The health and welfare ministry, he added, was “well aware that it costs several tens of millions of yen” a month to treat a single patient in the final stages of life.

Cost aside, caring for the elderly is a major challenge for Japan’s stretched social services. According to a report this week, the number of households receiving welfare, which include family members aged 65 or over, stood at more than 678,000, or about 40% of the total. The country is also tackling a rise in the number of people who die alone, most of whom are elderly. In 2010, 4.6 million elderly people lived alone, and the number who died at home soared 61% between 2003 and 2010, from 1,364 to 2,194, according to the bureau of social welfare and public health in Tokyo.

The government is planning to reduce welfare expenditure in its next budget, due to go into force this April, with details of the cuts expected within days.

Sadly, expect more of this kind of comment from hard-pressed governments as the baby boomers move out of work and into retirement.

January 27, 2013

Reason.tv: Two Cheers for the Coming Collapse of the U.S. Economy!

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 11:13

“At some point, holders of Treasury securities are going to recognize that these unfunded liabilities are going to affect the fiscal capabilities of the government and then you’re going to have the same situation that happened in Greece happening in the U.S.,” says Jeffrey Rogers Hummel, who is a professor of economics at San Jose State University and the author of a recent paper on the consequences of a U.S. government default. “In the short run it’s going to be painful, but in the long run it’ll be a good thing.”

Reason‘s Nick Gillespie sat down with Hummel at FreedomFest 2012 for a wide-ranging discussion on monetary policy, business cycle theory, the longevity of the welfare state, and why libertarians who rail against the Fed are like “generals fighting the last war.”

Held each July in Las Vegas, FreedomFest is attended by around 2,000 limited-government enthusiasts and libertarians a year. Reason TV spoke with over two dozen speakers and attendees.

Aaron Wherry dissects Andrew Coyne’s “grand coalition” notion

Filed under: Cancon, Government, Politics — Tags: , , , — Nicholas @ 11:03

Andrew Coyne wrote an appeal to the New Democrats, Liberals, and Greens, prodding them in the direction of a temporary political alliance to topple the Conservatives and to fundamentally change the Canadian electoral system to ensure that the Conservatives would never again form a government (actually, that’s not what he says, but I’m sure that’s how individual NDP, Liberal, and Green supporters will envision the result). In Maclean’s, Aaron Wherry points out that however appealing the coalition idea might be, the practical stumbling blocks are pretty intimidating:

Are enough voters so interested in electoral reform that they would support turning the next election into a referendum on that subject? Could enough voters be convinced to momentarily suspend their concerns about other issues? Could enough voters be convinced to ignore the other policy differences between the NDP, Liberals and Greens? Could enough voters be convinced to ignore the possible ramifications of all other policy debates between the parties to vote with the hope that a real election would then be run in short order?

I’ll try to answer those questions: No. Granted, I can’t predict the future with certainty (and have just finished arguing against making such predictions). Perhaps the New Democrats, Liberals and Greens could persuade voters to make this a singular focus. But this strikes me as implausible. I don’t think voters, in general, are so interested in electoral reform that they’d go along with this. At the very least, it seems like a remarkable gamble for the three parties to make. (And, keep in mind, the Conservatives would be keen to explain, loudly and repeatedly and prominently, why this was such a terrible idea.)

[. . .]

Fundamentally overhauling the electoral system would probably take more than a couple days. Legislation would conceivably have to be passed through the House. Legislation would conceivably have to be passed through the Senate (how would a Conservative majority in the Senate handle such legislation?).

Even if you imagine this proceeding as expeditiously as possible, this would take some period of time (A month? A few months? More?). Someone would have to be Prime Minister while this was happening. Someone would have to be governing. How would that work? Conceivably they would have no mandate beyond changing the electoral system. Would they promise to not touch anything else for as long as they were in government? Would they promise to just carry on with Conservative policy until another election could be held? (Would anyone believe them if they promised as much?) What if something bad happened? What if something came up that required government action?

This is not a rhetorical device. I’m not trying to bury the idea in questions. I honestly want to know how this would work because I honestly don’t understand how this is supposed to work. What kind of government would we have for however long it took to change the federal electoral system and what would be the ramifications of having such a government?

After all this time in power, the Conservatives are still being accused of harbouring a “secret agenda” that will destroy Canada as we know it. Handing Stephen Harper and his friends an even bigger “secret agenda” stick with which to beat the opposition doesn’t strike me as a particularly clever move at this stage of the electoral cycle.

January 25, 2013

Canada and the First Nations — separate nations, separate worlds

Filed under: Cancon, Government, Law — Tags: , , , , — Nicholas @ 13:56

In the Globe and Mail, Tom Flanagan explains why the Idle No More protestors insisted on negotiating with the Governor-General:

Actually, native leaders’ focus on the governor-general as the representative of the Crown is based not on a lack of information about the Constitution but on a different understanding of it. They know perfectly well that the prime minister and government of the day are installed by the political process of the nation of Canada, but they don’t see themselves as part of that process and that nation. They see themselves as separate nations, dealing with Canada on a “nation to nation” basis. They see the Crown as a governmental structure above Canada – and therefore the authority with whom they should deal.

Sovereign nations do not legislate for each other; they voluntarily agree to sign treaties after negotiations. The radical conclusion from this premise is that Parliament has no right to legislate for aboriginal people without first getting their consent. Hence the hue and cry about consultation and the demand to repeal those parts of the government’s Budget Implementation acts that allegedly impinge on aboriginal and treaty rights. Today’s claim is that Parliament had no right to amend the Indian Act and the Navigable Waters Protection Act before consulting with (read: getting the approval of) first nations. But the same claim could be made regarding any legislation, for all laws made by Parliament affect native people. Enforcement of the Criminal Code arguably affects aboriginal rights by putting large numbers of aboriginal people in jail, and so on.

This indigenist ideology is not new. It started to appear in the 1970s, as a reaction to Jean Chrétien’s 1969 White Paper, which proposed repealing treaties and abolishing the special legal status of Indians. In its usual well-meaning but sometimes witless way, the Canadian political class thought it could deal with the reaffirmation of indigenism through word magic. Adopt the vocabulary of the radicals. Start calling Indian bands “first nations.” Pretend to recognize their “inherent right of self-government” or even “sovereignty.”

January 24, 2013

Sun TV’s about-face on “making us all pay for it”

Filed under: Business, Cancon, Government, Media — Tags: , , , , , — Nicholas @ 09:12

Andrew Coyne makes some good points about Sun TV’s hypocrisy, he could have made a stronger case for getting the CRTC entirely out of the business of deciding what Canadians can watch on TV:

When the Sun News Network first loomed on the national horizon two years ago, before it had even begun broadcasting, sections of the Canadian left reacted as they do to most things: with hysterics.

A petition was launched — from the United States, as it happens — demanding the CRTC deny Sun the licence it sought, claiming “Prime Minister Harper is trying to push American-style hate media onto our airwaves, and make us all pay for it.”

[. . .]

Well, that was then: much has happened since. Teneycke lost his job, briefly, after questions were raised about how the bogus signatures found their way onto the petition. The network has mostly avoided peddling hate, unless you count that business about the Roma. And, less than two years since its launch, Sun is back before the CRTC, asking to be put on basic cable.

Well, asking is not quite the word. The network, never shy about self-promotion, seems almost an infomercial for itself these days. Network personalities have been drafted to explain the urgent public necessity of making Sun mandatory carriage, that is of taxing everyone with cable or satellite service. Viewers are directed to a website, where they can send an email to the CRTC in support of its application.

[. . .]

But if fairness is what we’re after, there’s another way to go about it. Rather than give every channel an equal chance to stick their hands in the public’s pockets — to force viewers to pay for channels they would not pay for willingly — it is to grant that privilege to no one: to leave viewers free to decide whether or not to subscribe to each channel, on its own merits. And yes, in case anyone’s wondering, that includes the CBC. (Notwithstanding the princely $500 a pop the corporation pays me to bloviate on At Issue, I have been rash enough to argue, publicly and often, for defunding the CBC.)

For goodness sake, it is 2013. The circumstances that might once have justified such regulatory micro-managing, in the days when there were only three channels and barely room for more on the dial, are long gone. Then, a new or special-interest channel might have made the case for market failure: since it was impossible for viewers to pay for channels directly, there was a built-in bias to the biggest audience, and the programming that tailored to it.

January 22, 2013

British army facing next wave of cuts

Filed under: Britain, Government, Military — Tags: , — Nicholas @ 10:14

The British army has to reduce down to a slim 82,000 troops by 2015, and the cuts coming down later this year are part of the 2010 Strategic Defence and Security Review (SDSR):

Up to 50 brigadiers and other senior officers are expected to be axed as part of a sweeping round of army redundancies that will result in up to 5,300 troops leaving the forces over the next year.

In what is thought to be the biggest tranche of redundancies faced by the army since the early 1990s, infantry battalions are likely to be worst hit as the military reorganises itself for the post-Afghanistan era.

Special forces units will be spared any losses, but officials made clear that this round of job cuts would take “a large slice out of the army in one go”.

Separately, the Ministry of Defence (MoD) also admitted more medical staff from the army, Royal Navy and RAF staff were likely to face redundancy later this year.

Some of the details from the SDSR were discussed in 2010. I also posted that I suspected SDSR actually stood for “Slashing Damage to Strategic Resources“

January 21, 2013

Reason.tv: It’s not what he said, but how he said it

Filed under: Government, Politics, USA — Tags: , — Nicholas @ 08:50

“And those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.”

Reason TV looks back at Obama’s 2009 inaugural address to see how well his rhetoric compares to his first four years in office.

Produced by Meredith Bragg.

January 20, 2013

Corporate welfare — it’s the American way

Filed under: Business, Government, USA — Tags: , , , , — Nicholas @ 12:08

Sheldon Richman on the amazingly inefficient US tax code and some of the ways it got that way:

When Congress and President Obama came up with their beyond-the-last-minute deal to put off addressing the coming fiscal crisis, The Wall Street Journal turned the spotlight on a little-noticed, yet too typical aspect of Washington’s machinations: “The bill’s seedier underside is the $40 billion or so in tax payoffs to every crony capitalist and special pleader with a lobbyist worth his million-dollar salary. Congress and the White House want everyone to ignore this corporate-welfare blowout,” the Journal reported.

So a bill that was represented as the first steps toward fiscal responsibility (try not to laugh too hard) contained billions of dollars in corporate welfare. And it was a bipartisan affair.

[. . .]

Manipulating the tax code to benefit particular interests has obvious appeal for politicians — it’s a source of power and influence — and a code that did not permit such manipulation would be much less attractive to them. Outright cash subsidies from the taxpayers, while not unheard of, smacks too much of cronyism and is more likely to alienate taxpayers. But complicated exceptions written into the tax laws can be presented as creative governance on behalf of the public interest. But it is cronyism as offensive as outright subsidies.

[. . .]

Corporate welfare is not primarily about lowering taxes. That would be a worthwhile goal, of course, and could be achieved simply by slashing tax rates and simplifying the code. But when taxes are lowered selectively by writing complicated exceptions into the law, the goal is to bestow privileges on cronies, not to reduce the burden of government on all. Corporate welfare, among its many sins, violates equal protection under the law.

January 19, 2013

Which is preferable: pirates or bandits?

Filed under: Government, History — Tags: , , — Nicholas @ 10:56

Tim Harford gives a history lesson while answering the question of which is better:

Consider two different types of bandit, suggested Olson: the roving bandit, who wanders around pillaging wherever he can; and the stationary bandit, who builds a castle and settles down to exploit a particular area. At first glance, one might think that a stationary bandit is the greater curse, because he’s always around. But not so: roving bandits are more dangerous because they have no reason to hold back. A roving bandit will take everything and leave you dead. The stationary bandit wants to come back and take more next week, and so will ensure you have the resources to keep going about your business.

Because you have everything to fear from the roving bandit, you are likely to take your own steps to avoid him — to hide, to place locks and alarms on everything, or to hire a group of seven samurai to protect you. Meanwhile, anticipating your counter-measures, the roving bandit will also spend resources on his counter-counter-measures. The cost of such arms races can be vast.

[. . .]

Besley and his colleagues reckon that costs of between $900m and $3.6bn were incurred in 2010 as a result either of pirate attacks, or efforts to deter or evade such attacks. Meanwhile the pirates took home just $120m over the same period. Now that $120m does seem to have had some beneficial effects on the pirates’ home ports, according to Anja Shortland, an economist at Brunel University. But piracy is an expensive way to get $120m into the hands of anybody.

There are signs that Somali piracy is on the wane, at least for now. But Somalia remains the poster child for a failed state. And a good working definition of a failed state is one that lacks a decent, long-lived stationary bandit. After all, once a stationary bandit feels secure in his tenure (“long live the king!”) he may do more than show restraint in his plunder: he may begin to invest in the prosperity of the region he dominates, building bridges, establishing a police force and drawing up laws. To maintain his power base he will have to hand out favours and ensure that prosperity is reasonably widespread.

January 17, 2013

Ibbitson: First Nations must prioritize political agenda to achieve anything

Filed under: Cancon, Government, Politics — Tags: , , , , , — Nicholas @ 11:18

In the Globe and Mail John Ibbitson lays out the possible and impossible goals and explains why it’s crucial for First Nations to work on the possible goals while there’s still momentum:

In that sense, it might be helpful to look at the disparate demands of the various factions claiming to represent native Canadians living on reserve, in an effort to separate the “deliverables” from the “non-deliverables.”

One key demand is that the Harper government withdraw a raft of legislation, including budget bills that have been passed, that native leaders claim weaken environmental protections and otherwise impair the lives and rights of their people.

Rescinding the budget bills, C-45 and C-38, is 100-per-cent non-deliverable. The Harper government is not going to repeal its budget. No government of any stripe ever would.

But other bills have not been passed. The First Nations Transparency Act, which would require band leaders to publicly report their income, is before the Senate. Native leaders consider its provision onerous and unfair. The Safe Drinking Water for First Nations Act aims to improve drinking water safety on reserves, but lacks sufficient funding in the eyes for first nations leaders. It’s still before the Commons. And there are other bills as well.

First Nations leaders would be wise to identify which legislation the Harper government might be convinced to amend, and press for those amendments.

The Assembly of First Nations, in its lists of demands, emphasizes the need for an inquiry into missing and murdered aboriginal women. This is eminently deliverable; native leaders should push hard for it.

Mr. Harper has agreed to take personal charge of negotiations around treaty and land claims. He is known to be personally frustrated with what he sees as an obstructionist bureaucracy at Aboriginal and Northern Affairs. A new and expedited process for resolving claims is deliverable, provided first nations leaders agree in return that resource development is vital to Canada’s and first nations’ economic future.

Any agenda item that requires amending the constitution is completely non-deliverable: after Charlottetown and Meech Lake, Canadians are highly averse to any constitutional tinkering. This limits some aspects of First Nations’ concern, but other areas can and should be addressed. (As pointed out in the article above, revenue sharing from natural resources is a provincial matter, so beating up the feds on that topic is a waste of time and effort.)

Another major factor holding back any chances of meaningful change are the divisions within the Assembly of First Nations (AFN) and opposition to the AFN’s leadership from outside the AFN itself. For details, see Terry Glavin’s most recent article in the Ottawa Citizen.

January 16, 2013

Prosecutorial abuse and the Swartz case

Filed under: Government, Law, USA — Tags: , , , , — Nicholas @ 13:05

Writing in the Guardian, Glenn Greenwald calls for reform in the way prosecutors are immune from any consequences of their misdeeds:

To begin with, there has been a serious injustice in the Swartz case, and that alone compels accountability. Prosecutors are vested with the extraordinary power to investigate, prosecute, bankrupt, and use the power of the state to imprison people for decades. They have the corresponding obligation to exercise judgment and restraint in how that power is used. When they fail to do so, lives are ruined — or ended.

The US has become a society in which political and financial elites systematically evade accountability for their bad acts, no matter how destructive. Those who torture, illegally eavesdrop, commit systemic financial fraud, even launder money for designated terrorists and drug dealers are all protected from criminal liability, while those who are powerless — or especially, as in Swartz’s case, those who challenge power — are mercilessly punished for trivial transgressions. All one has to do to see that this is true is to contrast the incredible leniency given by Ortiz’s office to large companies and executives accused of serious crimes with the indescribably excessive pursuit of Swartz.

This immunity for people with power needs to stop. The power of prosecutors is particularly potent, and abuse of that power is consequently devastating. Prosecutorial abuse is widespread in the US, and it’s vital that a strong message be sent that it is not acceptable. Swartz’s family strongly believes — with convincing rationale — that the abuse of this power by Ortiz and Heymann played a key role in the death of their 26-year-old son. It would be unconscionable to decide that this should be simply forgotten.

[. . .]

In most of what I’ve written and spoken about over the past several years, this is probably the overarching point: the abuse of state power, the systematic violation of civil liberties, is about creating a Climate of Fear, one that is geared toward entrenching the power and position of elites by intimidating the rest of society from meaningful challenges and dissent. There is a particular overzealousness when it comes to internet activism because the internet is one of the few weapons — perhaps the only one — that can be effectively harnessed to galvanize movements and challenge the prevailing order. That’s why so much effort is devoted to destroying the ability to use it anonymously — the Surveillance State — and why there is so much effort to punishing as virtual Terrorists anyone like Swartz who uses it for political activism or dissent.

The law and prosecutorial power should not be abused to crush and destroy those who commit the “crime” of engaging in activism and dissent against the acts of elites. Nobody contests the propriety of charging Swartz with some crime for what he did. Civil disobedience is supposed to have consequences. The issue is that he was punished completely out of proportion to what he did, for ends that have nothing to do with the proper administration of justice. That has consequences far beyond his case, and simply cannot be tolerated.

Update: Radley Balko‘s latest column is also on the topic of the public prosecutor.

The death of Internet activist Aaron Swartz has generated a lot of discussion about the power of prosecutors — particularly federal prosecutors. This is a good thing. The conversation is long overdue. But the discussion needs to go well beyond on Swartz and the Computer Fraud and Abuse Act.

Prosecutors have enormous power. Even investigations that don’t result in any charges can ruin lives, ruin reputations, and drive their targets into bankruptcy. It has become an overtly political position — in general, but particularly at the federal level. If a prosecutor wants to ruin your life, he or she can. Even if you’ve done nothing wrong, there isn’t a whole lot you can do about it.

There are a number of factors that got us here, and it’s worth looking at them in turn.

When Kafka met Sandy

Filed under: Bureaucracy, Government, USA — Tags: , , , , , — Nicholas @ 09:53

In the Wall Street Journal, Roger Kimball talks about the experience of trying to put your life back together after a major storm damages your home:

Like many people whose houses were badly damaged by Hurricane Sandy, my family and I have been living in a rented house since the storm. Unlike some whose houses were totalled, we could have repaired things and been home toasting our tootsies by our own fireplace by now. What happened?

Two things: zoning (as in “Twilight Zone”) and FEMA.

Our first exposure to the town zoning authorities came a couple of weeks after Sandy. We’d met with insurance adjusters, contractors and “remediation experts.” We’d had about a foot of Long Island Sound sloshing around the ground floor of our house in Connecticut, and everyone had the same advice: Rip up the floors and subfloors, and tear out anything — wiring, plumbing, insulation, drywall, kitchen cabinets, bookcases — touched by salt water. All of it had to go, and pronto, too, lest mold set in.

Yet it wasn’t until the workmen we hired had ripped apart most of the first floor that the phrase “building permit” first wafted past us. Turns out we needed one. “What, to repair our own house we need a building permit?”

Of course.

Before you could get a building permit, however, you had to be approved by the Zoning Authority. And Zoning — citing FEMA regulations — would force you to bring the house “up to code,” which in many cases meant elevating the house by several feet. Now, elevating your house is very expensive and time consuming — not because of the actual raising, which takes just a day or two, but because of the required permits.

Kafka would have liked the zoning folks. There also is a limit on how high in the sky your house can be. That calculation seems to be a state secret, but it can easily happen that raising your house violates the height requirement. Which means that you can’t raise the house that you must raise if you want to repair it. Got that?

“A paradox, a paradox, a most ingenious paradox. Ha, ha, ha, ha, ha, ha, ha, ha, this paradox.”

H/T to Monty for the link. Monty also has this meditation on bureaucracy:

This is where Leviathan does the most damage, I think. Tyranny is always a danger in centralized governments, but a greater danger is the proliferation and growth of bureaucracies. The rules become ever more Byzantine, ever more contradictory, ever more pointless, and ever more expensive (both to implement and comply with). The bureaucracies themselves achieve a life outside the body politic: they persist, age after age, irrespective of their political origin. Their sole imperative (regardless of their ostensible purpose) is to perpetuate themselves. They are an amoeba, growing to engulf everything they touch — not because they are evil, necessarily, but simply because it’s in their nature to do so. They cannot help themselves. Bureaucracies — lethargic, slow, risk-averse, rules-bound, pedantic, expensive, often causing more harm than good — are perhaps the very worst creation of human society.

The odd concept that is “money”

Filed under: Economics, Government, History — Tags: , , , , , — Nicholas @ 00:03

In his nominally NFL-related column, Gregg Easterbrook talks about the phenomenon that is money:

Currency is surprisingly abstract as a concept. Money is whatever you agree to accept in trade, with the understanding that others will accept it in turn. If there’s a $20 bill in your wallet or purse, you view it as valuable because you know that others will as well. If you have $1 million in a bank account, you view it as valuable because you know that others will as well. But you can’t eat a $20 bill or sleep under a bank account. Money is valuable only if others agree that it is.

Even if money is backed by some precious substance such as gold, the abstraction doesn’t change much. You can’t eat or wear gold. You view gold as valuable only because you know that others will as well. Whether a thin sheet of linen-like paper or a gold ingot or a string of digits on an electronic financial statement, money is, itself, worthless.

That money has value only when others think it does is why currencies collapse. The ruble and the Zimbabwean dollar lost value when no one wanted them, because a person holding this currency couldn’t be sure that others would also view it as valuable. But if Barack Obama ordered the minting of a trillion-dollar platinum coin, and it was viewed as having a trillion dollars’ worth of value, then it would.

[. . .]

Bear in mind, that’s how the past six years of irresponsible debt-based federal giveaways — two years under George W. Bush, now four years under Obama — have been funded. The Federal Reserve keeps buying Treasuries, or mortgage-backed securities issued by Fannie Mae and similar federal agencies. That gives the executive branch money to spend. One division of government tells another, “Here is a new string of numbers,” and money comes into existence.

What’s underlying these transactions? Nada, beyond the belief that strings of numbers issued by the United States are more likely to be useful in trade than strings of numbers issued by, say, Greece. Because the credibility of the United States is so high, its strings of numbers bear heft. But if government keeps printing money and talking about obvious gimmicks such as trillion-dollar coins, how long will that credibility last?

Economists including Friedrich Hayek have contemplated the idea that privately issued money would be more solid than government-issued money, since privately issued money would be cross-checked by market forces, while government is run to please campaign donors. Governments from the Roman emperors of the far past to the liberal Scandinavian democracies of today insist that they alone control the supply of money. One reason is to ensure taxation. At a deeper level, governments know how easily it could all unravel, and money be viewed as worthless.

January 15, 2013

“Spending cuts” in Washington are not like actual reductions in spending

Filed under: Economics, Government, USA — Tags: , , , , — Nicholas @ 00:02

A. Barton Hinkle clues us in on how to save big in our budget plans:

Would you like to save $20,000 this year? Of course you would. Here’s how: Plan a month-long vacation to Disneyland, and budget $20,000 for the trip. Then don’t go. Presto! You just “cut” your family budget by 20 grand.

This sounds absurd — because it is. Yet that is precisely how Washington operates.

A couple of weeks ago, President Obama claimed on national TV that “I cut spending by over a trillion dollars in 2011.” But as many people quickly pointed out, in fiscal 2011 federal spending rose from $3.4 trillion to $3.6 trillion. Nevertheless, the President repeated the claim on Jan. 2, insisting that “last year we started reducing the deficit through $1 trillion in spending cuts.”

What he meant was that in 2011 he agreed to “cut” spending in future years, in much the same way canceling a future vacation “cuts” your own budget. It is a fiction necessary to sustain the president’s pose that he wants a “balanced approach” to deficit reduction.

That is also nonsense. Take the midnight deal to avert the fiscal cliff, which the White House says will reduce the deficit $737 billion. Of that amount, $620 billion comes from raising taxes. Some balance.

“You kids are screwed”

Filed under: Economics, Education, Government, USA — Tags: , , , — Nicholas @ 00:01

Feeling optimistic about the future? Bryan Goldberg is here to slap that silly optimistic grin off your face:

Hey kids, you’ve all read “The Hunger Games,” right? Almost all young people have read the best-selling books or seen the Hollywood movie about Katniss Everdeen, a smart and ambitious young lady whose life prospects are diminished by historical events that predate her. What little hope she has is seemingly reduced to nil when a bunch of old people drop her into an arena and force her to fight with her fellow children in a battle royale to the death.

But that’s just fiction, right? Your loving parents and grandparents would never screw up their world and then throw you kids under the bus…or would they?

Actually, they already have.

Last week, the economics blog Calculated Risk ran a chart that tells a pretty compelling story. To an economist, this chart means that the magnitude and duration of the 2007 recession’s impact on unemployment outpaces that of any prior post-war recession. To young people, it simply means this…

You kids are screwed.

In fact, teenagers today probably aren’t old enough to remember the “Dot Bomb” recession of twelve years ago. But even at its peak, that really bad recession did not reach a level of unemployment that matched the one we are still currently experiencing. With the Federal Reserve losing its appetite for quantitative easing, the last bullet in their holster, and both political parties deciding to half-ass the fiscal policy debate, it’s safe to say that…

You kids are really screwed.

Pay careful attention to Lesson No. 4: it’s even more important than you think it is.

H/T to Jon, my former virtual landlord, for the link.

« Newer Posts — Older Posts »

Powered by WordPress