Spending Daily | January 31, 2013
Unions “turning sour” Over New Health Care Law
The Wall Street Journal reports, “Labor unions enthusiastically backed the Obama administration’s health-care overhaul when it was up for debate. Now that the law is rolling out, some are turning sour. Union leaders say many of the law’s requirements will drive up the costs for their health-care plans and make unionized workers less competitive. Among other things, the law eliminates the caps on medical benefits and prescription drugs used as cost-containment measures in many health-care plans. It also allows children to stay on their parents’ plans until they turn 26. To offset that, the nation’s largest labor groups want their lower-paid members to be able to get federal insurance subsidies while remaining on their plans. In the law, these subsidies were designed only for low-income workers without employer coverage as a way to help them buy private insurance. … Top officers at the International Brotherhood of Teamsters, the AFL-CIO and other large labor groups plan to keep pressing the Obama administration to expand the federal subsidies to these jointly run plans, warning that unionized employers may otherwise drop coverage.”
Some Families to be Unable to Afford Insurance Due to Health Care Law “Glitch”
The Associated Press reports, “Some families could get priced out of health insurance due to what’s being called a glitch in President Barack Obama’s overhaul law. IRS regulations issued Wednesday failed to fix the problem as liberal backers of the president’s plan had hoped. As a result, some families that can’t afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear. The Obama administration says its hands were tied by the way Congress wrote the law. Officials said the administration tried to mitigate the impact. Families that can’t get coverage because of the glitch will not face a tax penalty for remaining uninsured, the IRS rules said.”
Debt Ceiling: Senate Expected to Allow $450 Billion In New Debt
The Associated Press reports, “The Senate is poised to permit the government to borrow hundreds of billions of dollars more to meet its obligations, putting off one Washington showdown even as others loom in coming weeks. The measure would suspend the $16.4 trillion limit on federal borrowing through May 18, allowing about $450 billion in new debt to be added to the federal ledger, according to an estimate by the Bipartisan Policy Center. The Republican-controlled House passed the legislation last week. A successful Senate vote would send the measure to President Barack Obama, who is expected to sign it into law immediately.”
Higher Taxes and Deficit Spending Put “Crippling Drag” On U.S. Economy
Forbes reports, “The U.S. economy unexpectedly shrank in the fourth quarter, according to preliminary Commerce Dept. estimates released today, as a 15% decline indefense spending overshadowed strong increases in fixed investment and personal income. It would be easy to chalk up the reversal in GDP growth to cutbacks in government spending, but buried within the report are signs of more troubleahead. One big example: Personal income rose $253 billion, or 7.9%, in the fourth quarter but most of that was due to increased dividends, salaries and bonuses designed to escape the higher taxes that kicked in Jan. 1.Those higher taxes, combined with uncontrolled deficit spending, will put a crippling drag on the U.S. economy going forward, according to Van Hoisington and Lacy Hunt of Hoisington Investment Management. They estimate higher taxes will suck $250billion, or 2.6%, from personal income this year and have an even larger effect on the overall economy.”
U.S. Jobless Claims Rose to 38,000 Last Week
According to Bloomberg, “Claims for U.S. unemployment benefits increased more than forecast last week, nearly erasing a slide in the prior two weeks and reflecting the difficulty of adjusting the figures for swings at the start of a year. Initial jobless claims rose 38,000 in the week ended Jan. 26, the most since Nov. 10, to 368,000, the Labor Department reported today in Washington. Economists forecast 350,000 filings, according to the Bloomberg survey median. The increase followed a combined 45,000 drop in the prior two weeks.”
Economic Contraction Means More Fed Action, “Risk On, Baby”
The Wall Street Journal editorializes, “The federal government reported Wednesday that the U.S. economy shrank in the last quarter of 2012, but not to worry. The report is better than it sounds, the stock market is rocking, and in any event the Federal Reserve will take the news as another reason to keep both feet pressed firmly on the monetary accelerator. Bad economy=more Fed cowbell=higher stock prices. Risk on, baby. … The government spending decline deserves a word because the Keynesians are using it to call for more ‘stimulus.’ Thus the spending blitz of 2009-2010 gave a fillip to GDP, though not a sustainable one. The Keynesians now decry the very spending cliff they created. The real story is that the Keynesians promised that the stimulus would kick-start the economy to a higher growth plane. It hasn’t. Growth has sputtered in each of the last three years, and for all of 2012 was only 2.2%. That’s barely above 1.8% in 2011, which was below 2.4% in 2010. The biggestloser in all of this should be the notion that temporary bursts of government spending can produce durable economic expansions.”
GOP Willing to See Defense Cuts Take Place
David Rodgers writes for POLITICO, “On a hot July night six months ago, 89 House Republicans joined more dovish Democrats to do the unusual for Washington: cut $1.1 billion from the GOP’s proposed budget for defense in 2013. Then came Hurricane Sandy and the New Year’s Day tax bill, and as many as 157 House Republicans voted Jan. 15 to endorse a much bigger cut, taking nearly $10 billion from the Pentagon to help pay for disaster aid. It was a huge swing by any measure and one followed this week by a Monday night Senate vote in which the overwhelming majority of Republicans endorsed their own across-the-board defense cut worth tens of billions of dollars over the next nine years. … House Republicans seem determined to let the cuts take effect if only as payback to President Barack Obama for humiliating them over taxes. The White House and Senate Democrats are so far feigning indifference.”
“Corporations fear big tax hikes in White House budget”
Reuters reports, “Corporations fear they will be the main course on a menu calling for hundreds of billions of dollars in new tax revenue that President Barack Obama is expected to seek in his annual budget proposal, expected within weeks. Fresh off a political win that raised tax rates on the affluent and averted the so-called ‘fiscal cliff,’ Obama is not likely to back away from past proposals he has sought to close tax loopholes and raise taxes on many big companies, said former advisers to the president.”
Wealth is not Created at the Top: It is Only Devoured There
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 Rutger Bregman
… 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
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.
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…
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.
Donald Trump Forgets Important Lesson From Grandad:
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.
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,
… Well then. Long ago, yes.. Still applies? You tell me.
Looking for Something?
ObamaCare Threw This Burn Victim Out Of The Hospital After 3 Days!
The Federal Government cannot micromanage and nowhere is that made clearer than with ObamaCare. Recently, John, a Floridian man visiting...
ESPN Employee Reveals Painful Secret: “I Pretend I’m A Democrat So I Can Keep My Job Here”
Texas Farmer Gets Emotional After Returning Home To Learn Some Animals Survived [VIDEO]
Vanity Fair Dumps Melania To Fully Honor Michelle Obama On ‘Best Dressed’ List
Confirmed: Colin Kaepernick Was Not Signed By The Ravens Because Of Girlfriend’s Racist Tweet
BREAKING! Natalee Holloway Development! Informant Leads Investigator To Body!
U.S. Federal Court Rules That Females are Free to Display Their Breasts in Public
New Posts2 days ago
Florida School Ditches Common Core – Soars To Number One!
Entertainment2 days ago
Twelve Yr-Old Ventriloquist Is No Dummy! Wins America’s Got Talent and $1 Million Prize [VIDEO]
Politics2 days ago
Trump Expands Military in Israel With Orders No Other President Dared Issue!
New Posts2 days ago
ObamaCare Threw This Burn Victim Out Of The Hospital After 3 Days!