Those pesky markets are confusing even the really smart economists these days. For the last couple months, all eyes have been on Europe and whatever is the latest country to be having major debt problems. Sonic Charmer has been blogging for awhile about the roller coaster that has ensued as headlines spit out good news or bad news about “plans” to “save” the “euro.” I haven’t bothered to keep up the details, which mostly seem to be concerned with either accounting tricks to hide the large amounts of debt that European countries have, or public relations tricks to try to convince the less indebted nations to sacrifice for the more indebted ones.
What is the Supercommittee?
The Supercommittee was created by Congress to try to find a way to cut $1.2 trillion from the federal budget over the next 10 years. Congress could not agree on a way to do this, so they appointed 12 of their members – 6 Democrat and 6 Republican – to try to come up with such a way, and if seven of them agreed on a plan, that plan would go straight to the House and the Senate to be voted on. However, these 12 members could not agree on a plan any more than the rest of Congress could earlier.
What was the Supercommittee’s deadline?
The official deadline for coming up with a plan was Wednesday, November 23, but the Congressional Budget Office needed 48 hours to analyze the plan and verify that it would produce $1.2 trillion in savings, so the failure of the committee to come up with a plan by Monday night means that they have failed completely.
It seems that the Debt Supercommittee is doomed to fail, which doesn’t actually surprise a lot of people. (If you don’t understand what the Supercommittee is, see “Layman’s Terms: What Does The Debt Supercommittee Failure Mean?“) The United States government is still showing an extreme unwillingness to make hard choices about its debt. The Supercommittee only needed to come up with cuts of $1.2 trillion over 10 years, or an average of $120 billion a year from a deficit of over $1 trillion of a budget in the neighborhood of $3.5 trillion. The members of the Supercommittee couldn’t even agree on a way to trim roughly 5% of our overall budget – cuing lots of political posturing about whether we should blame the Republicans for not accepting enough tax increases or the Democrats for not accepting enough cuts.
But at least we have the “automatic” cuts that kick in since the committee didn’t find a better way to come up with those numbers, right? It’s still a tiny amount in the scheme of the overall budget. It still amounts to a slowed manner of growth rather than legitimate cuts. It still leaves us with an enormous deficit and growing debt. But at least the government has tricked itself into finding a way to save $1.2 trillion, right?
Well Occupiers are now less popular than the Tea Party, but that hasn’t stopped NPR from covering their latest antics every time I’ve been in the car for the past two days. This morning I was treated to students chanting that education should be as free as water and air, and while I hate giving these folks more attention and picking on the low-hanging fruit of the Tree of Progressivism, this statement is full of so much ignorance that I just had to respond.
Look, I understand students’ frustrations with expensive education. A lot of them are racking up debt loads without good job prospects in sight. My personal bias is that it’s the government’s involvement in making student loans more accessible that contributes to college’s soaring costs, and that more government would make things worse, not better. But I understand the frustration. But chanting about a perceived right that education should be as free as water is so ironic on so many levels that it borders on hilarious hysteria.
1. The phraseology about making education “free as water and air” comes from Peter Cooper, the founder of a privately funded college. I think it’s fantastic that this guy believed people deserved free education and set up his own institution where every student has their tuition fully covered from voluntary donations. Of course, the college can only accept about 10% of the students that apply, and it seems to be in financial troubles these days, too. Free college is expensive. But forgive me for assuming that these chanting students aren’t pushing for voluntary philanthropy to fund their college experience, and it’s ironic that they’re stealing the catch phrase of someone who tried to provide free college in the private sector and using it to suggest that the government should mandate this for everyone.
I heard a fascinating story on my drive home from work this evening, and while I don’t have a complete grasp on it, it’s so interesting that I want to blog my scattered thoughts about it. The NPR story was about these taxi medallions that are required to operate a taxi in New York City, and how these medallions, after rising in value for decades, have now ballooned in value from a couple hundred thousand dollars to a million dollars in just a few years. Regular taxi drivers can’t afford them anymore so there’s a company called Medallion Financial that makes loans. I was waiting for the reason the cost of these medallions has gone up so much, but first I got a hilarious mouthful from Medallion Financial’s president:
Now that I have been at my cubicle job for a year, I have taken the option of diverting a small portion of each paycheck to the chaotic markets under the guise of a retirement fund. This has had me thinking about the stock market in new ways. I’m generally rather pessimistic about the whole thing, because even though it’s been investor dogma that the stock market always goes up in the long-term, I’m coming of age at a time when the market’s basically been flat for a decade, and I see no reason to presume that the future must echo the past. But my own participation has led me to wonder if demographics will affect the future of the stock market more than anything else.
Well, the Christmas tree tax sprouted and got chopped down before I had time to blog about it, but I’m going to blog about it today anyway. The audacious folks of Fox News almost certainly had a part in destroying the plan before it started by combining the words “OBAMA and TAX and CHRISTMAS” enough times in enough headlines to scare the Administration off. I have a love-hate relationship with those folks; they spend a lot of time, er, barking up the wrong tree (like complaining about Obama visiting a mosque that George Bush also visited), but when I don’t like the tree I’m glad to have them around doing all that barking, if you take my meaning. Though I sympathize with Cato’s disappointment that the GOP also had hands in the history of this proposal and “certain people saw the ‘Christmas Tree Tax’ as an opportunity to further partisan aims rather than provoke a discussion and debate on the proper role of the federal government.”
Barely more than 24 hours after writing about my opposition to government invasions of privacy, I learned yesterday about a case going before the Supreme Court to determine if police need a warrant to place a GPS tracking device on your car:
The L. A. Times notes the latest development in the, er, lack of development on California’s high speed rail program:
The bullet trains from Anaheim and Los Angeles to San Francisco will not cost $34 billion as originally estimated, or $43 billion as the authority insisted just two years ago, but closer to $100 billion….
The original system included Sacramento and San Diego. They are not part of this estimate. They will be added in Phase 2, and the authority does not say what Phase 2 will cost. Critics of the plan estimate the total cost at $180 billion.
It’s not at all surprising to read about a government project that is now projected to cost three times its original budget even after removing some of the original goals. Just a few days ago I was reading about NASA’s latest Mars mission being “24% over budget and… by October 2008 MSL was getting closer to a 30% cost overrun…” The CATO Institute has a dutiful article about the infamous history of government projects (though of course they prefer the more politicized phrase “government schemes”), from the Boston “Big Dig” transportation project that ballooned from $2.6 billion to $14.6 billion to a series of defense vehicles that took millions more dollars and several years longer to arrive than originally estimated.
I have a great way to cut down on undiscovered crime — we all must provide copies of our house keys to our local police departments and never bar them from rummaging through our homes to make sure we are law-abiding.
I mean, if you don’t have anything to hide, why should you object? The local government only has your best interests at heart…
I’ve tried to explain before why I oppose the government reading my emails or patting my genitals under the guise of defending the nation, even if I have nothing to hide. I usually try to explain this position with philosophical ramblings about how a government bureaucrat’s definition of “doing something wrong” may be different from mine, but I don’t know that I always get my point across very well.