Senate Majority Leader Harry Reid (D, NV) is at it again. Interrupting his Nevada NPR host, he demanding that all talk of cutting taxes be stopped. This Progressive does not approve of such speech, and so we have no right to hear it. He also
said Republicans would have to agree on tax-revenue increases for Congress to achieve a large-scale agreement, but they instead have their mind set on “nothing more on revenue.”
“And until they get off that kick, there’s not going to be a grand bargain. There’s not going to be a small bargain.
It has been claimed—Congresswoman Nancy Pelosi (D, CA) is the most famous proponent of the theory—that unemployment payments to the unemployed are inherently stimulative: the recipients promptly spend the money. The stimulus is assumed to come from what’s called the velocity of money.
The velocity of money is a concept in economics that looks at how many times a dollar gets turned over in a local economy: a man buys groceries and pays rent, the grocer pays his clerk, who buys…, and the landlord hires maintenance workers, who then spend on…. The velocity aspect comes from measures of how many times that dollar gets turned over before it disappears from—has been consumed by—the local economy.
We must increase our debt limit so that we can pay our bills.
This is the thrust of President Barack Obama’s insistent demand that our debt ceiling be raised, and that it be done with no strings attached. The graph below, via Zero Hedge, however, illustrates the foolishness of continually expanding our country’s debt. It shows government debt as a percentage of GDP compared to the annualized rate of change in economic growth.
It’s hard to get any clearer than this demonstration of the inverse relationship between government debt growth and economic growth. It’s not just that growing debt impedes economic growth; the reverse is true, also: reducing government debt (not just reducing debt growth rate) allows the economy to grow.
…or does it matter?
Here are some examples that Paul Bedard, writing for the Washington Examiner, described:
- CNNMoney reported one family “found a bronze-level plan for roughly $357 a month, after their subsidy…[b]ut it comes with a $12,600 family deductible”
- Enormous rate increases. A research group found that a 30-year-old male nonsmoker “will see his lowest cost insurance option increase 260%”
- Some who already buy their own insurance are seeing their policies non-renewed, with replacement offers only for expensive new policies. The Christian Science Monitor reported on a North Carolina family who had been buying Blue Cross and Blue Shield insurance for $380-a-month. ”BCBS is offering them a new plan for three times the cost, $1,124.50 a month…with an $11,000 deductible”
Why do we even have food stamps and farm support? Here’s a brief, over-simplified history. During the Great Depression, with unemployment at historic levels and mom-and-pop farms failing at a high rate (not enough income from not enough sales of produce to an unemployed population), Franklin Roosevelt pushed through Congress a pair of bills that had negative impacts on the unemployed and on those farms (and that prolonged the Depression, but that’s for a different post).
President Barack Obama and his…colleagues…in the Senate keep threatening national default if those Evil, Anarchist, Terrorist Jihadi Republicans don’t promptly shape up and pass a budget, raise the debt ceiling, and otherwise give him a blank check. One of his more recent threats is this:
…if Republicans aren’t willing to set aside their partisan concerns in order to do what’s right for the country, we stand a good chance of defaulting.
Let’s look at some numbers:
At a meeting of the Institute of International Finance on Saturday, Jamie Dimon, JP Morgan Chase & Co CEO, said…his bank would fund the $6 billion to $8 billion in [Social Security payments] that the bank processes each week for its clients, even if the government doesn’t actually pay those obligations.
“Instead of the government putting it in, we are. We’ll let them overdraft for it and won’t charge them for it, and then hopefully the government will give us the funds back[.]“
Just like a predecessor Evil (JPM) Banker did 100 years ago, during the Panic of 1907.
HHS Secretary Kathleen Sebelius had something to say about our fate on a recent episode of The Daily Show. She made the remark after the show had finished airing, but in a post-show segment before the studio audience—and so still on the record. Here’s her statement:
As you know, we’re facing the end of the Western Civilization by having a market-based strategy. We’re bringing Western Civilization its knees by having a private insurance plan on a website where people pick and choose.
Lloyd Grove, writing about this for The Daily Beast, suggested that Sebelius was merely trying for humorous sarcasm.
Christopher Weaver and Louise Radnofsky wrote in their optimistically titled Wall Street Journal article, “Healthcare.gov’s Flaws Found, Fixes Eyed,” that, among other things,
By Thursday morning, a new tool that allows users to preview plans without registering appeared on the site with little fanfare.
I’ll come back to that. First, though, here’s a bit of the backstory on that claim, also from Weaver and Rasdnofsky’s article.
Much of the problem stems from a design element that requires users of the federal site, which serves 36 states, to create accounts before shopping for insurance, according to policy and technology experts. The site, HealthCare.gov, was initially going to include an option to browse before registering, but that tool was delayed, people familiar with the situation said.
There are conflicting reports concerning the impact of Obamacare on job creation. The President’s Council of Economic Advisors says, for instance, that since Obamacare’s enactment in 2010, 9 out of every 10 jobs created have been full time jobs—that is, by the Obamacare definition, jobs that required 30 or more hours of work each week. Other economists disagree and talk about stunted job creation due to Obamacare.
Who’s right? The answer depends on more than whom you ask; it hinges on the time period covered by the answer. CEA is right when the time frame runs from the end of March, 2010, when Obamacare formally became law.