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BA Spending Daily September 20, 2012

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New Polling Analysis: Voters Worried About Debt, Not Sold On Either Candidate’s Plan to Cut Spending
Public Notice today released a polling analysis memo examining Americans’ attitudes toward government spending, the debt and the size of government. With both presidential campaigns currently debating the role of the federal government in Americans’ lives, this memo provides greater context to debate and highlights the growing concern among voters about how their tax dollars are being used. “Voters are rightly worried about government spending and the national debt, with concern growing in the past year, but neither presidential candidate has a clear advantage on the issue,” said Gretchen Hamel, executive director of Public Notice. “Both candidates are within or just outside the margin of error on government spending and debt and neither wins a majority. The pundits and talking heads may be focused on process and candidate gaffes, but the American people are focused on our debt problem. The candidate that wins the debt issue will win the election.”

CBO: Health Care Law Mandate Will Cost 6M Taxpayers $7B in 2016
According to the Washington Examiner, “The individual mandate in President Obama’s health care law will cost 6 million taxpayers a total of $7 billion in 2016, according to new estimates by the Congressional Budget Office. The cost will then average around $8 billion from 2017 through 2022. The health care law requires Americans to either purchase government-approved insurance or pay a penalty. The mandate starts in 2014, and the penalties fully go into effect in 2016. The CBO estimates that 30 million will be uninsured by that year, but most will be exempted from the mandate, because they are unauthorized immigrants, members of Indian tribes, or don’t earn enough income to file taxes, among other reasons. Among those who will have to pay a mandate penalty, 4.7 million will have incomes below 500 percent of the federal poverty line, according to the CBO, which is projected to be $60,000 for individuals and $123,000 for families of four by 2016.”

Fiscal Cliff Brings “Jolt of Reality” to Congress
Politico reports, “A jolt of reality is rippling through the Capitol as discussions over how to solve the so-called fiscal cliff are suddenly swinging into action. Leaders on both sides of the dome, in both parties, are meeting with key Obama administration officials on Capitol Hill, quietly mulling different legislative strategies to avoid massive tax hikes on all Americans. In one day, Treasury Secretary Timothy Geithner met with both House Speaker John Boehner (R-Ohio) and House Ways and Means Chairman Dave Camp (R-Mich.). The meeting with Camp was directly focused on the year-end expiration of tax rates — widely known in Washington as the ‘fiscal cliff.’… If the polls stay where they are today, and Republicans keep the House, Democrats hold the Senate and Obama wins the presidency, top aides in both parties insist that tax rates on the wealthy will go up.”

U.S. Economy Showing Signs of “finally bottoming out”
According to the Associated Press, “The U.S. economy is showing signs of finally bottoming out: Americans are on the move again after record numbers had stayed put, more young adults are leaving their parents’ homes to take a chance with college or the job market, once-sharp declines in births are leveling off and poverty is slowing. New 2011 census data being released Thursday offer glimmers of hope in an economic recovery that technically began in mid-2009. … Not all is well. The jobless rate remains high at 8.1 percent. Home ownership dropped for a fifth straight year to 64.6 percent, the lowest in more than a decade, hurt by more stringent financing rules and a shift to renting. More Americans than ever are turning to food stamps, while residents in housing that is considered ‘crowded’ held steady at 1 percent, tied for the highest since 2003. … Richard Freeman, an economist at Harvard University, said the data point to a ‘fragile recovery,’ with the economy still at risk of falling back into recession, depending in part on who is president and whether Congress averts a ‘fiscal cliff’ of deep government spending cuts and higher taxes in January.”

Dallas Fed President: Fed Action “will probably fail to create jobs while risking higher inflation”
Bloomberg reports, “Federal Reserve Bank of Dallas President Richard Fisher said the central bank’s third round of bond purchases will probably fail to create jobs while risking higher inflation. … Fisher, who doesn’t vote on monetary policy this year, opposed the Federal Open Market Committee decision last week to expand its holdings of long-term bonds with open-ended purchases of $40 billion of mortgage debt every month in a new round of quantitative easing. The Fed, led by Chairman Ben S. Bernanke, is seeking to boost growth and reduce 8.1 percent unemployment. … Congress’s inaction on fiscal policy and excessive government regulation are holding back businesses from spending on hiring and investment, Fisher said in a Bloomberg Television interview. The Fed’s stimulus efforts, or so-called quantitative easing, won’t work because the central bank can’t address those obstacles to growth, he said.”

Eurozone Slump Sending Shockwaves to China 
Reuters reports, “Aggressive new policy from the European Central Bank has so far failed to boost ailing euro zone business, according to surveys that showed a widening chasm between sickly France and a more resilient Germany.” Meanwhile China is feeling the effect of Europe’s troubles as their slump hit Asian exporters hard and China’s factory sector continues to wilt for an 11th straight month. “While the downturn in Europe’s largest economy, Germany, eased by a surprising amount this month, French firms fell deeper into the mire in September – and at a far faster rate than expected. A good indicator of economic performance, the composite euro zone PMI fell to 45.9 in September from 46.3 in August. … European Union and Chinese leaders are meeting in Brussels on Thursday leaders to try to bridge growing differences over trade and find common ground on tackling Europe’s debt crisis.”

Fed of Dallas President Warns of Inflation with QE3
Bloomberg reports, “Federal Reserve Bank of Dallas President Richard Fisher said the central bank’s third round of bond purchases will probably fail to create jobs while risking higher inflation.” Fisher told Bloomberg Radio yesterday that he is skeptical of the Fed’s QE3. He said, “’I do not see an overall argument for letting inflation rise to levels where we might scare the market.’… Fisher, who doesn’t vote on monetary policy this year, opposed the Federal Open Market Committee decision last week to expand its holdings of long-term bonds with open-ended purchases of $40 billion of mortgage debt every month in a new round of quantitative easing. The Fed, led by Chairman Ben S. Bernanke, is seeking to boost growth and reduce 8.1 percent unemployment.… Congress’s inaction on fiscal policy and excessive government regulation are holding back businesses from spending on hiring and investment, Fisher said in a Bloomberg Television interview. The Fed’s stimulus efforts, or so-called quantitative easing, won’t work because the central bank can’t address those obstacles to growth, he said.”

Rand Paul Objects on Spending Bill
Politico reports, “A six-month stopgap spending bill advanced in the Senate Wednesday, even as the House Republican leadership gave up the ghost of acting on any extension of the 2008 farm law, due to expire Sept. 30. In the case of the spending measure, 24 Senate Republicans joined Democrats on a 76-22 vote to limit debate and expedite passage by Congress — possibly as early as Thursday. Standing in the way still is Sen. Rand Paul (R-Ky.), who has insisted on a vote first on his amendment to withhold U.S. aid to Egypt, Libya and Pakistan in light of recent attacks on American diplomatic facilities and the imprisonment of a Pakistan physician accused of helping the CIA locate Osama bin Laden.”

Free Cellphones in Ohio?
Bankrupting America writes, “The Federal Communications Commission has been providing free cellphones to those who are unable to pay for them since 2008, but how much is this program costing us today? According to a recent report by the Dayton Daily News, after reviewing the program’s public data, first quarter spending on the program was $26.9 million, up from $15.6 million last year. The program is expected to cost taxpayers $75.4 million this year in Ohio alone. ‘You don’t have to ask Siri to find wasteful government programs, and the Federal Communications Commission’s ‘free’ cellphone program is a prime example,” said Public Notice Executive Director Gretchen Hamel. “In a time of economic crisis with an ever-climbing $16 trillion national debt, should taxpayers be footing the bill for free cellphones? With an annual cost projected at $75.4 million, it’s time for taxpayers to speak up and cancel this service before the bill gets any more out of control.'”

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Wealth is not Created at the Top: It is Only Devoured There

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The UK has left the EU and we can argue about the minutiae of Wealth until we’re blue in the face. But the overriding factors are apparent and in one of the richest countries in the world it is shocking that so many people can’t even be sure if they are going to be able to eat enough today or provide for their loved ones.

These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurial-ism that are helping to advance the whole world – Opinion by 

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… across the spectrum virtually all agree that wealth is created primarily at the top and so entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

Bankers, pharmaceutical giants, Google, Facebook … a new breed of  rentiers are at the very top of the pyramid and they’re sucking the rest of us dry

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In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

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But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking…

CONTINUE READING HERE:

The problems we face are that the politicians are firmly in the hands (pockets) of the uber wealthy. We live in a corporate plutocracy and those holding all the wealth and therefore power have no intention of changing the status quo, even if it isn’t sustainable. They remind me of bacteria (or cancer) devouring the host body more and more even though eventually it will kill them too.

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Donald Trump Forgets Important Lesson From Grandad:

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Harper’s Magazine reprints an interesting letter from US President Donald J. Trump’s own grandfather that may get you thinking. Here is it then:

The Emigrants – By Friedrich Trump – From a letter written in 1905 by Friedrich Trump, Donald Trump’s grandfather, to Luitpold, prince regent of Bavaria. Trump had been ordered to leave Bavaria for failing to complete mandatory military service and to register his initial emigration to the United States twenty years earlier.

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Prince Luitpold rejected Trump’s request for repatriation; the family later settled in New York. Translated from the German by Austen Hinkley.

Most Serene, Most Powerful Prince Regent! Most Gracious Regent and Lord!

I was born in Kallstadt on March 14, 1869. My parents were honest, plain, pious vineyard workers. They strictly held me to everything good — to diligence and piety, to regular attendance in school and church, to absolute obedience toward the high authority.

After my confirmation, in 1882, I apprenticed to become a barber. I emigrated in 1885, in my sixteenth year. In America I carried on my business with diligence, discretion, and prudence. God’s blessing was with me, and I became rich. I obtained American citizenship in 1892. In 1902 I met my current wife. Sadly, she could not tolerate the climate in New York, and I went with my dear family back to Kallstadt.

The town was glad to have received a capable and productive citizen. My old mother was happy to see her son, her dear daughter-in-law, and her granddaughter around her; she knows now that I will take care of her in her old age.

But we were confronted all at once, as if by a lightning strike from fair skies, with the news that the High Royal State Ministry had decided that we must leave our residence in the Kingdom of Bavaria. We were paralyzed with fright; our happy family life was tarnished. My wife has been overcome by anxiety, and my lovely child has become sick.

Why should we be deported? This is very, very hard for a family. What will our fellow citizens think if honest subjects are faced with such a decree — not to mention the great material losses it would incur. I would like to become a Bavarian citizen again.

In this urgent situation I have no other recourse than to turn to our adored, noble, wise, and just sovereign lord, our exalted ruler His Royal Highness, highest of all, who has already dried so many tears, who has ruled so beneficially and justly and wisely and softly and is warmly and deeply loved, with the most humble request that the highest of all will himself in mercy deign to allow the applicant to stay in the most gracious Kingdom of Bavaria.

Your most humble and obedient,

Friedrich Trump

… Well then. Long ago, yes.. Still applies? You tell me.

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