News Today

Anybody ever read this book? Written by Jon Scieszka and illustrated by Lane Smith, it’s the story of a boy caught up in a “math curse,” where he begins to see math problems in everything.

Personally, looking at the numbers for the United States budget feels like a “Math Curse” nightmare to me.

Here are the fiscal year’s figures on government spending and debt (the
government’s fiscal year runs Oct. 1 through Sept. 30).

. . .

Total public debt subject to limit Nov. 20  —  $11,953,740,000,000
Statutory debt limit  —  $12,104,000,000,000
Total public debt outstanding Nov. 20  —  $12,010,562,000,000
Operating balance Nov. 20  —  $45,510,000,000

Interest fiscal year 2009  —  $383,365,000,000
Interest fiscal year 2008  —  $451,154,000,000

Deficit fiscal year 2009  —  $1,417,121,000,000
Deficit fiscal year 2008  —  $454,798,000,000

Receipts fiscal year 2009  —  $2,104,613,000,000
Receipts fiscal year 2008  —  $2,523,642,000,000

Outlays fiscal year 2009  —  $3,521,734,000,000
Outlays fiscal year 2008  —  $2,978,440,000,000

. . .

Okay, so what do these massive figures all mean?

The public debt, or national debt, is comprised of by two things - securities held by the public, and securities held by government accounts. We’re currently sitting around $12 trillion in the red. Around 60% of that $12 trillion (over $7 trillion) is considered “owned by the public,” and was spent on your behalf by your government.

The $12 trillion national debt figure doesn’t even tell the full story though, as some intra-governmental debt obligations (like the Social Security Trust Fund) are not included in the budget. A more accurate figure would be our gross debt, which will likely be 90.4% of our entire GDP for 2009. That figure is slated to go up over 100% of our GDP by 2011.

The Statutory Debt Limit is how high Congress has approved our national debt to go — currently $12,104,000,000,000 thanks to a measure in the American Recovery and Reinvestment Act of 2009.

Obviously, our deficit is how much money we lost that year.

Now I want to take a special look at the interest portion of government spending, as this has been a hot topic in the news lately. For decades the United States has increased its borrowing and we’ve now reached trillion-dollar-a-year rates.

According to the White House, by 2019 the cost of paying off our interest will be more than the combined federal budgets this year for energy, homeland security, education and both the Iraq and Afghanistan war.

This is some pretty scary stuff. From Edmund Andrews, New York Times:

“Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.”

One thing that is really at stake here is our dollar. There are three main hazards coming our way in the next couple of months. The first will be dealing with all of the new debt we’ve acquired. The next will be $1.6 trillion of marketable debt that the Treasury must work to refinance (pretty please with sugar on top, China?). Finally, eventually the Fed will have to normalize interest rates, which could cost the Americans quite a lot of money (According to the New York Times, an increase of one percentage point in the Treasury’s average cost of borrowing would cost American taxpayers an extra $80 billion this year).

Even as the government looks at these looming budgetary numbers, they are preparing to borrow $3.5 trillion over the next three years.

“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

Sources:
http://www.nytimes.com/2009/11/23/business/23rates.html?partner=rss&emc=rss
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/11/20/financial/f141157S11.DTL
http://zfacts.com/p/461.html

Not really related at all but enough of a coincidence to make me angry. My friend, we’ll call her Amanda, has been in the hospital since last Friday. She has yet to receive H1N1 medication and her boyfriend informed me that her situation is turning worse and worse.

. . .

“Now watch this drive” — former President George W. Bush.

Hard to forget that Bush quote. Always looking to outdo his predecessor, President Barack Obama was able to accomplish in under ten months what took Bush over 34 months to do — play 24 rounds of golf.

Of course I suppose we should be happy, because by playing with his chief domestic policy adviser, Melody Barnes, Obama became the first U.S. president to play a foursome round of golf with a woman.

Still, as my friend Amanda sits in the hospital, using all of her strength to hold on until the doctors finally give her medication, I have a hard time feeling proud of our president even though he broke such an important gender-equality barrier.

Kind of seems like the same shit on a different day to me.

Sources:
http://online.worldmag.com/2009/10/26/obama-ties-bush-in-golf/
http://hosted.ap.org/dynamic/stories/U/US_OBAMA_WOMAN_IN_FOURSOME?SITE=NCAGW&SECTION=HOME&TEMPLATE=DEFAULT
http://www.freakingnews.com/Freak-Show-Pictures–2327-4.asp

In a 100-page report titled “Troubled Waters: Palestinians Denied Fair Access to Water,” Amnesty International claims Israel is cutting off access to water for Palestinians in Gaza and the West Bank.

“This scarcity has affected every walk of life for Palestinians,” Amnesty’s researcher on Israel, Donatella Rovera, told The Associated Press in an interview Monday, ahead of the report’s release. “A greater amount of water has to be granted to them.”

According to the report, water consumption per capita for Palestinians in the West Bank and Gaza is about 70 liters (18 gallons) per day, while Israeli per capita use is 300 liters (79 gallons). On average, Israelis use four times the amount of water per person on than Palestinians.

In the West Bank the Mountain Aquifer is the only source of water for Palestinians. Israel controls the aquifer and over 80 percent of water drawn goes to the Jewish state. As a result, the 450,000 Israelis who live in the West Bank and East Jerusalem use more water than the 2.3 million Palestinian residents.

Rovera said the water situation in Gaza, home to 1.5 million Palestinians, had reached a “crisis point.” He also estimated damage to Gaza’s sewer system from the Israeli offensive has left 90 to 95 percent of the water in the region contaminated and unfit for human consumption. To make matters worse, an ongoing Israeli blockade is stopping any supplies for repairs to come in.

Israeli officials denied many of the claims from the report, complaining that Amnesty had neglected to use transparent information provided by the Israeli government.

“Israel has fulfilled all its obligations under the water agreement regarding the supply of additional quantities of water to the Palestinians, and has even extensively surpassed the obligatory quantity,” the foreign ministry said in a statement.

“The Palestinians, on the other hand, have significantly violated their commitments under the water agreement, specifically regarding important issues such as illegal drilling (they have drilled over 250 wells without the authorization of the Joint Water Commission) and handling of sewage.”

Sources:
http://www.youtube.com/watch?v=9NOfJfAnrmQ&feature=player_embedded
http://topics.cnn.com/topics/amnesty_international
http://www.google.com/hostednews/ap/article/ALeqM5iVkvzuni3YkNQU5PikPz4yiPs0GQD9BJA3KO0
http://www.cnn.com/2009/WORLD/meast/10/27/israel.water/

A four person United Nations fact-finding mission concluded that both the Israeli military and Palestinian armed groups committed war crimes and possibly crimes against humanity in the three week Gaza war. The panel conducted 188 interviews, reviewed over 10,000 pages of documents and viewed over a thousand photographs and videos before drawing its conclusions.

The war, which ended on a cease-fire shortly after President Barack Obama came into office, claimed the lives of over 1,300 Palestinians, several hundred of which were civilians. Thirteen Israelis were killed in the fight, 10 soldiers and 3 civilians.

The 567 report issued a call for Israel and the Palestinian groups to properly investigate the transgressions. If a credible investigation doesn’t happen the council could refer the situation to the International Criminal Court for possible prosecution.

“The prolonged situation of impunity has created a justice crisis in the Occupied Palestinian Territory that warrants action,” said the report.

The report criticized Palestinian rocket fire for “causing terror in the affected communities of southern Israel.” The majority of the report centered on the Israeli military’s action in the conflict. According to the report “disproportionate force” was used often against the Palestinian civilian population and in a number of occasions Israeli forces launched “direct attacks against civilians with lethal outcome.”

Source:
http://www.nytimes.com/2009/09/16/world/middleeast/16gaza.html

So let me get this straight. Credit is still tight and hard to get. Unemployment is up and will likely continue to rise. Other than automobile sales (and remember Cash-for-Clunkers is gone now) consumer spending is way way down.

But according to the Federal Reserve the recession is over.

The Federal Reserve released its Beige Book report on Wednesday, a publication over the state of the economy that is published 8 times a year. The report summarizes the industrial market and labour markets for the 12 districts of the federal reserve system.

“Most districts noted that the outlook for economic activity among their business contacts remained cautiously positive,” said the Federal Reserve publication, noting that the economy had “stabilized.”

How about the average American who is wondering if they’ll still have their job a month from now? Or one of the 9.7% of Americans who are currently unemployed. Is our economy really stable?

I think this goes to show how out of touch the Federal Reserve is with mainstream America. The factors that affect most Americans are certainly not improving. It’s still hard to get loans, Americans have had to cut a record amount of credit over the last month and unemployment is creeping steadily closer to 10%.

How does this constitute the end of the recession?

After the mortgage bubble burst into pieces last year investment banks on Wall Street have been searching desperately for their next big money-maker. They just might have found it, too.

If you thought that investment bankers gambling on housing loans was a sleazy practice then get ready to be truly disgusted. The next big plan? Bankers buying “life settlements,” life insurance policies that ill and elderly people sell for cash. The idea is all the buzz on Wall Street.

“We’re hoping to get a herd stampeding after the first offering,” said one investment banker not authorized to speak to the news media.

The plan is for the bankers to buy up a bunch of these “life settlements.” They will then “securitize” these policies by packaging hundreds or thousands together into bonds. Then they will resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

Think about this for a second. The earlier the policyholder dies, the bigger the return for the investment banks. In fact, experts warn that insurers might have to raise premiums if they end up having to pay out more death claims than originally anticipated.

So essentially those investment bankers (the same ones that had a huge role in our financial collapse) are gambling on your life, and betting against it as well. Sounds like the good old days, only worse.

“This defeats the idea of what life insurance is supposed to be,” said Steven Weisbart, senior vice president and chief economist for the Insurance Information Institute, a trade group. “It’s not an investment product, a gambling product.”

Auto sales posted their best month of the year so far in August, but automakers are now bracing for quieter showrooms and slower sales this fall now that the government’s Cash for Clunkers program has ended.

The Cash for Clunkers program spurred 690,114 new sales, the majority of them during August, at a taxpayer cost of $2.88 billion. Overall sales of cars and light trucks rose to 1.3 million in August, roughly a 30 percent increase from the previous month. It also was the first monthly year-over-year gain since October of 2007.

Ford, Toyota, Hyundai and Honda all experienced boosts in sales over August. Chrysler Group LLC and General Motors Co. had another month of falling sales, although both companies claimed improvement in their sales of high-mileage vehicles.

The question that remains to be answered is if the boost given to auto companies by the Cash for Clunkers will be enough to tide the auto industry over until the economy picks up speed again. General Motors practically relied off of the Cash for Clunkers program. GM experienced a 20 percent sales decrease over the month but was second only to Toyota in clunker purchases.

Still, auto executives are doing their best to remain optimistic while bracing for the fall.

“We believe the fourth quarter will be better than the second quarter,” said Ken Czubay, Ford’s vice president of U.S. marketing and sales.

Bonuses.

White House officials admitted to misjudging the strength and ferocity of the public backlash that was triggered by the “bonusgate” scandals earlier this year. Hopefully that will make them a little more prepared this time around as Congress waits for a response from 15 of the top health care providers in the country.

Some of the numbers are already known. Health insurance companies have doubled premiums over the last decade, causing many Americans to face months or even years without health insurance. At the same time many CEO’s and top executives of health insurance companies have been making more money than ever in the last decade.

According to the Corporate Library, the head of Cigna (CI, Fortune 500) made $11 million and the head of United Health Group (UNH, Fortune 500) made $9.4 million last year.

Representative Henry Waxman, head of the House Energy and Commerce Committee, is still waiting on fifty-two health and accident insurance companies who have until Friday to turn over salary details for employees making more than $500,000 a year. Also Senator John D. Rockefeller, who runs the Senate Commerce panel, asked the biggest health insurers to turn over particulars of premium dollars spent on patient care.

“I think they will get some information that will surprise policyholders, because there’s not a great deal of awareness of how much these executives do make,” said Wendell Potter, a former Cigna vice president. “A lot of money they’re paying in premiums is going to make executives richer and richer every year.”

If this does turn out to be the case, the public backlash may help the Democrat’s quest for a public option.

Medical Loss Ratio

This is one of the things that Congress wants to learn more about. Most executives earn their big pay checks from bonuses and discounted stock options. Health insurance executives, on the other hand, earn their profits from the money left over after premium dollars are used to pay for patient care. That ratio is called “Medical Loss Ratio.”

According to a Price Waterhouse Coopers report, In the early 1990s health insurers spent more than 90 cents of every dollar collected on patient care. Contrast that to 2007 when national publicly-traded health companies spent just 81 cents of every dollar on patient care.

“These guys are operating on the sole basis that they want to retain as much as they can in premium dollars for their investors and their own pay,” said Robert McGarrah, counsel for the AFL-CIO Office of Investment. “That’s why we need a public plan, so we’ll have a benchmark.”

Advocates like Wendell Potter for the public option argue that those dollars which are currently going towards executive bonuses could instead be going towards patient care in a public option.

“I think it’s significant because Americans are spending more and more of their premium dollars on compensation for the executives and other highly paid employees,” said Potter.

Just a couple of things I wanted to note today, I’m going to try to get a more in depth post put together but we’ll see how things go at the job today.

Yesterday was the four year anniversary for Katrina striking New Orleans, meaning today is the anniversary of F.E.M.A. coming to the rescue for thousands of stranded refugees. Oh wait, no, that anniversary has to wait a couple days still. All sarcasm aside though we should never forget what happened there, lest we let it happen again.

Barack Obama will be hosting a Ramadan dinner Tuesday night, confirming the fact that he is a muslim!!! -Gasp- No in all actuality this is a White House tradition that started in 2002 with George W. Bush. So he was actually the muslim. Joke’s on you compassionate conservatives!

Also conservative columnist George Will has a column scheduled to run later this week which will call for a pull-out of United States troops in Afghanistan.

“Forces should be substantially reduced to serve a comprehensively revised policy: America should do only what can be done from offshore, using intelligence, drones, cruise missiles, airstrikes and small, potent special forces units, concentrating on the porous 1,500-mile border with Pakistan, a nation that actually matters,” Will writes in the column.