Quotulatiousness

April 17, 2011

This is why the Finnish election matters to Portugal

Filed under: Economics, Europe, Politics — Tags: , , , — Nicholas @ 09:00

Unlike most other EU states, Finland has an option of putting the bailout to a vote:

Opinion polls suggest the True Finns have nearly quadrupled in popularity since the last election though they are unlikely to enter government.

Analysts see mainstream parties taking a harder line on the EU as a result.

Unlike other eurozone states, Finland can put requests for bail-out funds to a majority vote in parliament.

Since any bail-out must be approved unanimously by all 17 eurozone members, a hostile Finnish government could theoretically veto it.

The outcome of Sunday’s election may affect EU plans to shore up Portugal as well as impacting on stability in debt markets.

April 8, 2011

Monty’s daily dose of DOOM!

Filed under: Economics, Europe — Tags: , , , — Nicholas @ 11:12

People suffering from over-cheerful attitudes about the future of the European Union could just read Monty’s chock-full-of-DOOM postings at Ace of Spades HQ for a quick depressant:

Let’s begin abroad by explaining why Spain is boned. Spain suffers from the same disease as the rest of the continent generally — socialism, postmodernism, an ossified job market, an unsustainable welfare state — but in more concentrated form. Spain is so boned that their main export these days is young ‘uns (h/t Andy).

If you look at the countries currently in the midst of insolvency in Europe — Ireland, Greece, Portugal, and (shortly) Spain — it’s obvious that they are different entities altogether from their more prosperous European peers. For one, most of them are recent entrants onto the first-world stage. Spain languished under Franco until the mid 1970’s; Ireland only emerged from decades of civil strife (both amongst themselves and against England) in the early 1990’s; and Portugal was (and still is) a third-world nation glued to the continenet almost as an afterthought. Portugal is more properly thought of as a North African developing country than a first-world European country, whatever the maps say (h/t rdbrewer).

The Euro project hid those problems…for a while. Cheap credit allowed the dysfunctional European countries to borrow enough money to pretend to a first-world standard of living for more than a decade. There was real growth in the various economies — particularly in Ireland — but much of the “growth” was mainly borrowed money with little attendant economic or social reform.

The Great Downturn of 2008 did not cause the problem; it simply exposed what a sham the whole thing had been all along.

England is watching the drama play out on the Continent, and thanking $DEITY that they never signed on to the Euro. England still has serious problems, but they also have options that the other European nations do not have because they control their own currency.

As usual, the original post has lots of links to follow to increase the dosage of DOOM. Adjust intake to adequately suppress your optimism.

April 5, 2011

China’s High Speed Railways: not for the masses

Filed under: China, Government, Technology — Tags: , , , , — Nicholas @ 12:07

Reports of corruption among top officials and soaring costs for China’s HSR network:

. . . question-marks have been raised over these plans after the sacking in February of Liu Zhijun, the minister responsible for building the high-speed network. He was accused of skimming off as much as 1 billion yuan ($152m) in bribes and of keeping as many as 18 mistresses. Zhang Shuguang, another top official in the railways ministry, was later dismissed for corruption. Separately, on March 23rd, state auditors reported that $28m had been embezzled from the 1,300km high-speed line between Beijing and Shanghai, the highest-profile of China’s many rail projects.

Public support for high-speed trains is muted. The trains may reach 350km per hour but fares are proportionately eye-watering. That is all right for well-heeled travellers, happy to have an alternative to flying. But tens of millions of poor migrants who work far afield and flock home for the Chinese new year are being priced out the rail market and have to go by bus (the number of bus journeys is soaring).

The sacking of top officials may be the result merely of one of China’s periodic anti-corruption campaigns. Or it may be the upshot of a high-level factional or personal battle, in which corruption charges are often a favourite weapon. If so, the dismissals would not necessarily affect railway development.

March 25, 2011

CNN: US government finance requires both spending cuts and tax increases

Filed under: Economics, Government, USA — Tags: , — Nicholas @ 09:26

Jeanne Sahadi at CNN Money insists that the government can’t control the ballooning debt situation by spending cuts alone:

If lawmakers wanted to permanently freeze the debt held by the public at the today’s level — 62% of GDP — they would need to immediately cut spending by 35% or about $1.2 trillion, according to the Government Accountability Office. And those cuts would need to be permanent from hereon out.

How hard would that be?

Consider that in 2010, all of discretionary spending — including defense — totaled $1.35 trillion. In other words, to do deficit reduction all on the spending side means “you have to cut into the real meat,” said Roberton Williams, senior fellow at the Tax Policy Center.

Consider, too, how much fun lawmakers are having right now trying to negotiate spending cuts for this year alone. Their working range: Between $10 billion and $61 billion.

And here’s the kicker: Even permanently cutting $1.2 trillion today wouldn’t be the end of the story. Deficit hawks note that public debt at 60% is still well above the country’s historical average — which is below 40%. So more cutting would need to occur in subsequent decades.

The joker in the pack is that interest rates at the moment are incredibly low by historical standards. This is an aberration, not the “new normal”, and won’t last. If the government fails to take serious steps to reduce the debt now, it’s vanishingly unlikely that they’ll be able to avoid a default. It’s like running up a huge debt on a credit card with a low introductory interest rate: once the low interest period is over, the debt becomes payable at the higher interest rate. Pretending that tomorrow will never come is never a good planning strategy.

March 23, 2011

US government financial plight: more reasons to worry

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 12:21

The ever cheerful Monty brings us another helping of financial DOOM:

Our whole “plan” (to the extent that our government even has a plan for getting us out of this mess) is founded on the belief that our borrowing costs will remain low — that the interest-rate environment will remain at or near zero indefinitely. Well, it won’t, and I don’t think enough people are thinking about what a huge dent interest-payments on the debt is going to put into our budget. Our entire federal budget will be eaten up with four things: Medicare, Medicaid, Social Security, and debt-service payments. That means any additional spending (like, oh, say, the military) will have to come from borrowed money…which will have to be borrowed at higher rates, which in turn causes debt-service costs to rise yet again. This is the vicious debt-spiral many European countries now find themselves in.

What has basically happened during the past forty or fifty years is that we’ve spent most of our actual capital — mainly on our vast welfare state and government apparatus, but also on our huge military. We are like a couple who lives paycheck-to-paycheck: any money that comes in goes right back out. Nothing gets tucked away. An unexpected expense — a busted water-heater, broken-down car, or an unexpected illness or injury — all of a sudden puts you in a hell of a financial hurt. So you borrow. You can’t really afford even the payment much less the whole loan, but what can you do? You may even cast caution to the winds and buy that jet-ski you’ve had your eye on (on credit, of course). Why not? You’re already screwed; being screwed a little bit more hardly matters at this point, right? Then something else breaks and you have to borrow again (if you can), and the monthly bills start to pinch you where you live — it’s either service your debt or pay the rent, because you can’t do both. At that point, the spinning plates will come crashing down — you will either default on your debt to avoid starving your family into oblivion, or you will force your family to live like animals in a cave so you can pay off the debt you ran up.

So the frustrated call goes up: “Okay, we’re boned! I get it! But what can we do about it?” Answer: I don’t know. Maybe nothing, at this point.

[. . .]

I’ve often said that circumstances will impose a solution on us if we don’t find one ourselves — we simply cannot continue as we are. And the reckoning is not comfortably far off in the future; it’s unfolding right now, before our very eyes.

March 22, 2011

QotD: The modern welfare state

Filed under: Bureaucracy, Economics, Government, Quotations — Tags: , , , — Nicholas @ 11:26

In past ages, the desire of kings and emperors to control the lives of their people was no less than it is now, but they simply lacked the means to substantially affect the average serf or peasant’s daily life. A tax collector or company of soldiers might come by occasionally, but it was the church and not the state that formed the polestar around which most lives revolved. But beginning in the late 19th century, technology allowed the governments of the industrialized nations to reach down into each city, town, and hamlet, and “adjust” things directly. In totalitarian regimes the impulse was malign, but in western nations the intentions were mainly good: to provide subsistence and aid for those in need of it.

But one thing has become clear in the western nations since the welfare-state started in earnest after World War II: it spreads like kudzu, it encompasses and infantilizes ever-larger percentages of the population, and it beggars even the richest and most powerful countries. Leave aside questions of morality and efficacy for the moment — it is dreadfully clear that the main problem with the welfare-state is that we can’t afford it. No one can, no matter how rich or powerful.

This is the paradox of the welfare state: it will surely ruin us if left to run unchecked, yet so many people now depend upon it that we can’t stop.

[. . .]

We have so successfully turned Americans into wards of the state that any significant change will (I fear) have to be imposed by fiat or by circumstance, because I don’t think it will ever take place at the political level. There is simply no way to get from here to there without making the kinds of wrenching changes that no democratic/republican form of government is good at. (If you doubt me, look at the protests in Greece, Ireland, and Portugal. Even when the writing is on the wall, the population does their best to ignore it.)

Monty, “She Walks in DOOM! Like the Night…”, Ace of Spades HQ, 2011-03-22

Why nobody takes conservative promises too seriously

Filed under: Cancon, Economics, Government, Politics — Tags: , , , , — Nicholas @ 09:37

Today is budget day, when federal Finance Minister Jim Flaherty will be introducing the Conservative budget for 2011. Unless something has suddenly changed in the government’s philosophy, don’t expect anything daring:

First and foremost, the budget should contain a plan for reducing federal spending in real terms over the next four or five years. Mr. Flaherty’s 2010 budget outlined how the federal government intended to restore balance to the federal books by 2015 by holding the line on spending increases to just over 1% a year while praying for a return to robust annual revenue increases. In fact, merely planning to hold the line on spending is never going to be enough. For one thing, the Conservatives have never proven themselves capable of pulling it off. Despite coming to power in 2006 on a message of fiscal restraint, the Tories raised federal program spending by an average of 6% in each of their first three budgets before the worldwide finance crisis of 2008. Since then, they have added $100-billion to the national debt, in large part thanks to stimulus spending of dubious worth.

According to the Canadian Taxpayers Federation, as of last Friday, Canada’s debt stood at nearly $563-billion. This means the debt repayments made over the 11 years before the recession began have been wiped out, and that the federal treasury is back to where it was before the Liberals’ then-finance minister Paul Martin brought down his austerity budget in 1995.

Since the Tories took power five years ago, program spending has expanded by nearly 40% and the federal civil service has grown by nearly 20%. We’re sorry, but we just don’t trust a government with a track record like the Tories’ to be able to regain budget balance simply by holding the line on new spending.

They can promise all sorts of things, but what they seem best at doing is pretending not to be “conservative” at all.

The government may fall, as the opposition are calling for even higher spending on “universities, home care, daycare, unemployment, seniors and Quebec”. This may work to the Conservatives’ advantage as they’re (temporarily) riding high in the opinion polls, so they might be able to win a majority if an election is forced on them over this budget. Of course, the opposition can read the polls too, so they may not be as eager to throw Stephen Harper an opportunity to win an easy victory.

Update: Well, the budget was tabled in the House, the opposition parties all rejected it “as it stands”, and the prime minister has stated they will not accept any amendments. For Thursday’s performance in the Ottawa Little Theatre, the budget will get first reading, which means the first opportunity for the government to be defeated . . . which means a May general election.

March 20, 2011

A different way to visualize the proposed US budget cuts

Filed under: Economics, Government, Politics, USA — Tags: , , , — Nicholas @ 10:53

Jon sent me an interesting link on a different way to visualize the relative size of the proposed budget cuts:

That struck me as a pretty good analogy. I wondered: if you do the math, what part of a Big Mac Extra Value Meal would a $6 billion budget cut represent?

The arithmetic is pretty simple, due to the extensive nutrition information that McDonalds makes available online. A Big Mac Extra Value Meal has three components: a Big Mac, a large order of french fries, and a medium soda. The McDonalds site tells us that a Big Mac has 540 calories, a large fries has 570 and a medium Coke has 210, for a total of 1,320 calories.

Meanwhile, the federal budget is currently around $3.8 trillion, which means that a $6 billion cut represents one 633rd of the total. What would be an equivalent cut in a Big Mac Extra Value Meal?

One variable is not readily available online; that is, how many french fries are there in a large order? To answer that question, I went to a nearby McDonalds at lunch time, paid for a large order of fries, and counted them. There were 87. (I counted fries regardless of size, but did not count the hard bits in the bottom of the container.)

This allows us to complete the calculation. If there are 570 calories in a large order of fries, and 87 fries per order, each french fry, on the average, contains 6.5 calories. One 633rd of the total calorie content of a Big Mac Extra Value Meal is 1,320/633, or 2.1 calories. That equals almost exactly one-third of an average sized french fry.

March 15, 2011

DC residents get stiffed on their solar power subsidies

Filed under: Environment, Government, Technology, USA — Tags: , , , , — Nicholas @ 12:00

David Nakamura reports on some Washington, DC folks who are feeling ripped off by their local government over solar panel reimbursements that were promised but never delivered:

It isn’t easy going green, and it may also prove costly.

Dozens of District residents who installed solar panels on their homes under a government grant program promoting renewable energy have been told they will not be reimbursed thousands of dollars as promised because the funds were diverted to help close a citywide budget gap.

In all, the city has reneged on a commitment of about $700,000 to 51 residents, according to the D.C. Department of the Environment. The agency has pledged to try to find money in next year’s budget, its director, Christophe Tulou, said.

“It just doesn’t seem fair to go through a process with them and have them make investments in solar panels under the assumption they would be reimbursed,” Tulou acknowledged. “It’s really sad we are having these economic woes when we are.”

H/T to Radley Balko for the link.

March 14, 2011

Government debt: “U.S Treasuries increasingly look like Wile E. Coyote running in midair; they’ll keep selling only as long as nobody actually looks down”

Filed under: Economics, Government, USA — Tags: , , , , , — Nicholas @ 16:17

To borrow a phrase from Monty at Ace of Spades HQ, here’s a hot steaming bolus of DOOM for you, courtesy of Eric S. Raymond:

Insolvency is no longer a sporadic problem, it’s become pervasive at all levels of government everywhere. This is why the recent brouhaha in Wisconsin was so surreal. The public-employee unions weren’t just rearranging the deck chairs on a sinking Titanic, they were fighting to preserve their right to bore more holes in the hull.

When these are the objective conditions, what point is there in arguing that the whole system is corrupt and that middle-class entitlements have to go on the scrap-heap along with every other big-government program? It’s going to happen anyway soon enough. A year ago the U.S. government was only taking in a third of what it needed to cover annual outlays; today it’s so much worse that individual monthly deficits are larger than the entire Bush administration’s. The money’s all gone. Our options are closing down to default or hyperinflation.

It’s going to get ugly out there. A lot of old people are either not going to get their pensions and Social Security at all or get them in hyperinflated dollars that won’t be worth anything. Anyone else dependent on government transfer payments will be similarly screwed. Urban poor, farmers, veterans, the list goes on. Imagine the backlash when that really hits — when it sinks in that the promises were lies, the bubble has popped, the Ponzi scheme is over.

March 4, 2011

A model of how government pension schemes work

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 12:04

It’s all so immense that it’s hard to understand, so Karl Denninger reduces it to an easy-to-comprehend model:

Let’s start with the model but take it into the real world. We’ll use you and I.

You set up a business. I’m a “trustworthy guy.” You have employee who you wish to provide a pension.

So every week when you pay them, you take out $100 from their paycheck. You have 10 employees (including yourself) and you come to me with your $1,000 every week and give it to me. I take it.

But instead of sticking it in an account somewhere with your name on it (as a trustee would) I instead give you a piece of paper. It says I owe you $1,000. But it’s not a debt security. You cannot negotiate it like a check, nor can you sell it to anyone else — it’s only valid if you bring it back to me. It says so right on the face. I promise that if you bring it back I’ll give you the $1,000.

Here’s the problem — as soon as you leave I call up my 10 stripper friends and the local liquor store and throw a party. Guess what I use for the money? Your $1,000.

Now here’s the rub — I don’t have any other money. At all.

In fact, I’m in hock up to my neck. I earn $100,000 a year but I spend $170,000. And how do I do this? Well, among other things I have people like you giving me money to “save.” I also have a bunch of credit cards, and everyone thinks I’m a great guy — kind of like an uncle (just call me “Sam”) and so they keep raising my credit limit.

It’s a wonderful life, isn’t it?

Well, maybe for a while.

But there is a problem with this model. First, this isn’t a “Trust.” A Trust can hold funds for someone, and can even invest them in something, but the funds cannot be converted to the trustee’s use. They must be held segregated and not inure to the benefit of the trustee. Further, the trustee must act solely in the best interest of the beneficiaries of the trust, not their own interest. That’s black-letter law.

Then there’s the second problem — I didn’t invest the money. I blew it, and all of the rest of my money.

One day you come and ask me to redeem one of your $1,000 IOUs. I don’t have any money, but I have a cash advance available on the credit card — or at least I think I do. So I go to the local bank and pull a $1,000 cash advance, giving you ten crisp $100 bills.

Notice what just happened: As soon as you showed up, your IOU, which in fact had no legal status as debt, had to be turned into actual debt at that point in time. Now there really is $1,000 in debt out there — it’s on the credit card.

This is exactly what happened with Social Security and Medicare since Reagan’s “reform” of the systems in the 1980s. Every single Administration since has taken all the money and immediately blown it. There is no money.

March 1, 2011

American high speed rail plans an expensive mirage

Filed under: Economics, Government, Technology, USA — Tags: , , , — Nicholas @ 12:35

Philip Klein looks at the faulty notions behind the Obama administration’s push for high speed railways:

To most Americans, the passing reference to California was likely an afterthought, lost amid all the dreamy rhetoric of rebuilding the nation. But upon closer inspection, the state’s proposed high-speed rail system serves as a perfect example of the gap between the promise of transformational liberalism and the reality of big government. Taxpayers everywhere should pay attention, because the project has already been granted $3.2 billion in federal funds, mostly through Obama’s economic stimulus package — and its backers hope to gobble up billions more over the next decade.

The $43 billion transportation project to link Los Angeles to San Francisco with a bullet train by 2020 would be considered grandiose during the plushest of times, yet it’s being pursued during an era when governments at all levels are mired in deep fiscal crises. The plan has been subject to a series of scathing reports by independent analysts, raising concerns about everything from its cost estimates to its business model. The University of California at Berkeley has questioned its lofty ridership projections. And even the Washington Post has editorialized against it.

It’s a huge wodge of cash from a government that’s already struggling with record deficits, handed to state governments who are in many cases even worse off financially, yet must match the federal funds or lose the subsidy.

Calling it a “system” is misleading, as none of the currently imagined lines would inter-connect. Nobody seems to be worried that there will not be enough passenger traffic to justify the enormous acquisition, construction, and operational costs for these train services.

“The cost projections are overly optimistic,” Wendell Cox, a public policy consultant and co-author of a critical report for the libertarian Reason Foundation, says. “The ridership projections are absolutely crazy. The thing will have no impact on highway traffic and will have little or no impact on the amount of planes in the air. This project really defines the term ‘boondoggle.'”

[. . .]

BRINGING HIGH-SPEED RAIL to America has been a decades-long dream for liberals, who have long envied Europe’s extensive rail system. Building a high-speed rail network, they hope, would move the nation away from automobiles and reduce pollution. It has the added bonus of being a massive, centrally planned public works project. The problem is just because rail has worked elsewhere, that doesn’t mean it makes sense here.

“We’re not like Spain or France, where the population densities are a lot higher, and the cities are not as spread out,” Ken Orski, a former transportation official in the Nixon and Ford administrations and publisher of the newsletter Innovation Briefs, says. “So you can connect cities like Barcelona and Madrid or Paris and Marseilles easily.”

The best place to build a high speed rail system for the US would be the Boston-New York-Washington corridor (aka “Bosnywash”, for the assumed urban agglomeration that would occur as the cities reach toward one another). It has the necessary population density to potentially turn an HSR system into a practical, possibly even profitable, part of the transportation solution. The problem is that without an enormous eminent domain land-grab to cheat every land-owner of the fair value of their property, it just can’t be done. Buying enough contiguous sections of land to connect these cities would be so expensive that scrapping and replacing the entire navy every year would be a bargain in comparison.

The American railway system is built around freight: passenger traffic is a tiny sliver of the whole picture. Ordinary passenger trains cause traffic and scheduling difficulties because they travel at higher speeds, but require more frequent stops than freight trains, and their schedules have to be adjusted to passenger needs (passenger traffic peaks early to mid-morning and early to mid-evening). The frequency of passenger trains can “crowd out” the freight traffic the railway actually earns money on.

Most railway companies prefer to avoid having the complications of carrying passengers at all — that’s why Amtrak (and VIA Rail in Canada) was set up in the first place, to take the burden of money-losing passenger services off the shoulders of deeply indebted railways. Even after the new entity lopped off huge numbers of passenger trains from its schedule, it couldn’t turn a profit on the scaled-down services it was offering.

Ordinary passenger trains can, at a stretch, share rail with freight traffic, but high speed trains cannot. At higher speeds, the actual construction of the track has to change to deal with the physical problem of safely guiding the fast passenger trains along the rail. Signalling must also change to suit the far-higher speeds — and the matching far-longer safe braking distances. High speed rail lines cannot be interrupted with grade crossings, for the safety of passengers and bystanders, so additional bridges and tunnels must be built to avoid bringing road vehicles and pedestrians too close to the trains.

In other words, a high speed railway line is far from being just a faster version of what we already have: it would have to be built separately, to much higher standards of construction.

Getting back to the California HSR line; it goes from A to B on this map:

Okay, you think, at least Fresno will get some snazzy slick rail service . . . except this section will be built but not operated until further connecting sections are built . . . at a later date. Maybe. It will be the track, including elevated sections through Fresno, and the physical right-of-way, but no electrical system to power the trains; but that’s fine, because the budget doesn’t include any actual trains.

Of course, this is an old hobby horse of mine and I’ve posted about High Speed Railways a few times before.

February 24, 2011

The core of the Irish financial crisis

Filed under: Economics, Europe, Government — Tags: , , , , — Nicholas @ 07:13

Theodore Dalrymple explains the underlying reason for Ireland’s financial woes:

If you want to study the economic crisis of the last few years, go to Ireland, where you will find it in its purest form. Ireland is a small country, with a population of just 4.4 million, and the connection between clientelistic politics, bankers’ cupidity, and the mass psychology of bubble markets is easiest to comprehend there.

Dotted around the country, outside of almost every town and sometimes in the middle of nowhere, are housing estates — completed, half-completed, and never-to-be-completed — which are unsaleable, will almost certainly never be inhabited, and are destined to fall into graceless ruins. Some 300,000 new dwellings now stand empty in the Irish Republic, a number whose equivalent in the United States would be approximately 21 million.

[. . .]

A house in Shrewsbury Road, Dublin, sold for $80 million in 2005 but, now standing empty, is on the way to dereliction, and no house on the road — a millionaires’ row — has sold for the last two years, despite a fall in prices of at least 66 percent. During the boom, taxi drivers and shop assistants would tell you about the third or fourth house they had bought — on borrowed money, of course — and of their apartments in Europe, from Malaga to Budapest to the Black Sea Coast of Bulgaria. It was not so much a boom as a gold rush, or a modern reenactment of the Tulipomania.

February 15, 2011

US budget from a different universe

Filed under: Economics, Government, Politics, USA — Tags: , , — Nicholas @ 07:10

You’d have to assume that President Obama and his team really do live in a different universe than this one, as the latest budget fails to rein in spending in any meaningful way:

The budget has 2012 spending falling a bit from record 2011 levels, but that’s because “stimulus” spending is winding down, war costs are supposed to fall, and unemployment benefits should decline as the economy improves. Let’s look at some of the new budget data (all data for fiscal years):

  • Total federal spending jumped from $2.98-trillion in 2008 to $3.82-trillion in 2011. Obama’s budget has outlays at $3.73-trillion in 2012, but that’s still up 25% from 2008. Spending in 2011 is the highest share of GDP since the Second World War at 25.3%.
  • Non-defence discretionary spending jumped from $522-billion in 2008 to $655-billion in 2011. Spending is supposed to fall to $611-billion in 2012, but that’s still up 17% from 2008.
  • Defence spending jumped from $612-billion in 2008 to $761-billion in 2011. Spending is supposed to fall to $730-billion in 2012, but that’s still up 19% from 2008.
  • Entitlement spending jumped from $1.59-trillion in 2008 to $2.19-trillion in 2011. The budget has entitlement spending at $2.14-trillion in 2012, which is up a huge 35% from 2008.

[. . .] In the administration’s mind, apparently absolutely nothing has changed on fiscal policy in the last year. Obama hasn’t shifted toward fiscal responsibility an inch. The Tea Party movement, the November elections, the government debt crises in Europe, and the Obama Fiscal Commission have all been totally ignored in the new federal budget.

Even in economic good times, this would be an irresponsible budget. It’s far worse as the US economy is still crawling out of a deep hole.

February 14, 2011

So, how big is the US federal debt, really?

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

H/T to Jon, my former virtual landlord, who asks:

Should “unfunded liabilities” be counted as the guy is counting them here? While some of those things are promised — such as Medicare and Medicaid — the amounts that will actually be paid out might be less. For example, many of those who are unemployed might starve to death before they rack up Medicare bills, so the actual Medicare costs will be less than the projected unfunded liability.

Whether they’re counted as he suggests or not, it’s still a freaking huge pile of bills.

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