The Morning After America’s Debt Binge

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Photo Credit: Frugal Cafe/Reason.comPresident Barack Obama is adamant that he will not be held “hostage” by the Republicans in the House of Representatives, who are threatening not to raise the U.S. debt ceiling without some concessions on future spending and Obamacare. If the debt limit is not raised, allowing the Treasury Department to borrow more money, the federal government will default on some of the bills it owes in the next couple of weeks. Lots of commentators believe that such a default would have significant, if not devastating, downside economic effects.

Maybe so. But we should also want to consider the ways a relentlessly rising level of debt could damage our economic prospects. The debt ceiling for the United States is currently set at $16.7 trillion. In 2000, the U.S. national debt stood at $5.7 trillion. The amount of the U.S. national debt is now roughly the same size as the annual output of the economy. Is this a problem?

Yes, suggests recent research by numerous macroeconomists. Specifically, they find that a big public debt “overhang” likely slows down future economic growth for more than two decades. In other words, excessive national debt racked up now will make future Americans considerably poorer than they would have been otherwise.

Let’s start with a 2012 study in the Journal of Economic Perspectives, conducted by the Harvard economists Carmen Reinhart and Kenneth Rogoff and Morgan Stanley chief economist Vincent Reinhart. In that study, which looked at 22 advanced countries, the researchers identify in the years between 1800 and 2011 some 26 episodes lasting more than five years in which public debt to GDP ratios exceeded 90 percent. They argued that if the public debt-to-GDP ratio is greater than 90 percent for five or more years, then, on average, economic growth rates fall from an average of 3.5 percent to 2.3 percent annually, a drop of 1.2 percent. Even the fierce critics who pointed out a major error in the earlier work of Rogoff and Reinhart find that when the debt-to-GDP ratio is greater than 90 percent that subsequent economic growth averages 2.2 percent annually, falling from 4.2 percent when the ratio is below 30 percent.

Similarly, a 2010 working paper by the International Monetary Fund economists Manmohan Kumar and Jaejoon Woo looked at the effect that high public-debt-to-GDP ratios had on the economic growth of 38 advanced and emerging economies between 1970 and 2007. The study found evidence that surpassing a debt-to-GDP threshold of 90 percent has a significant negative effect on growth. The researchers also reported that a 10 percent increase in the debt-to-GDP ratio is associated with a 0.2 percent slowdown in annual real per capita GDP growth. As it happens, America’s debt-to-GDP ratio climbed from around 60 percent in 2003 to a projected 108 percent this year. If the IMF’s findings are accurate, that implies that future economic growth rates will be about one percent lower than they would otherwise have been. Kumar and Woo concluded that the chief cause for depressed economic growth is less investment in capital goods, which in turn produces a slowdown in labor productivity.

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Man Falsely Accused of Rape by Sharpton Calls On Advertisers To Drop Support

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Photo Credit: truthrevolt.orgSteven Pagones is a former Assistant District Attorney in the State of New York. He became the victim of Al Sharpton’s defamatory smear campaign to label him a rapist of 15-year-old black girl Tawana Brawley in 1987. Now he speaks out at Truth Revolt. To help stop advertiser support for Sharpton, sign our petition:

In November of 1987, 15-year-old African-American girl Tawana Brawley went missing. When she was found, it is alleged that she began telling people that she had been approached, kidnapped, raped, sodomized, and her body scrawled on with human feces by individuals whom she supposedly described as resembling white police officers. Law enforcement officials began working with her, but she soon enlisted the efforts of attorneys Alton Maddox, Vernon Mason, and a then-obscure supposed civil rights leader named Al Sharpton.

Soon thereafter, all cooperation between the Brawley camp and law enforcement was cut off.

I remember very clearly the day I was first accused of being involved in the kidnaping and rape of Tawana Brawley. I was preparing to attend a Christening on a Sunday when my phone rang. I picked up the phone, and the person asked if I was Steve Pagones; it was a media member inquiring about team Brawley’s allegations about me. I didn’t know what he was talking about. Then he dropped the bombshell: the Brawley team had said I was responsible for raping Brawley. I stammered, disbelieving, “That’s absurd. There’s not a shred of truth to it.” For the next 24 hours, my phone didn’t stop ringing. I was on the front page of every major newspaper in the state, and many across the country. It was simply unbelievable that the allegations had been made – and that the Brawley team made them without any evidence or support whatsoever. As soon as his charges hit the media, I had to hire around-the-clock security. I received death threats on the phone, in the mail. I had to hire armed guards for my family, for my property. My whole life was turned upside down.

Worse, because of the atmosphere and the race-baiting going on, I had to prove my innocence, as opposed to anyone having to prove my guilt. It was draining, emotionally and physically. Eventually, a grand jury found not only that I hadn’t had anything to do with whatever happened to Brawley, but that the entire story was a hoax.

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Now Is the Time to Delay ObamaCare

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Photo Credit: Martin KozlowskiThe Obama administration has an implementation problem. More than any administration of the modern era they know how to talk but have trouble doing. They give speeches about ObamaCare but when it’s unveiled what the public sees is a Potemkin village designed by the noted architect Rube Goldberg. They speak ringingly about the case for action in Syria but can’t build support in the U.S. foreign-policy community, in Congress, among the public. Recovery summer is always next summer. They have trouble implementing. Which, of course, is the most boring but crucial part of governing. It’s not enough to talk, you must perform.

There is an odd sense with members of this administration that they think words are actions. Maybe that’s why they tweet so much. Maybe they imagine Bashar Assad seeing their tweets and musing: “”Ah, Samantha is upset—then I shall change my entire policy, in respect for her emotions!”

That gets us to the real story of last week, this week and the future, the one beyond the shutdown, the one that normal people are both fully aware of and fully understand, and that is the utter and catastrophic debut of ObamaCare. Even for those who expected problems, and that would be everyone who follows government, it has been a shock.

They had 3½ years to set it up! They knew exactly when it would be unveiled, on Oct. 1, 2013. On that date, they knew, millions could be expected to go online to see if they benefit.

What they got was the administration’s version of Project ORCA, the Romney campaign’s computerized voter-turnout system that crashed with such flair on Election Day.

Read more from this story HERE.

The House Republicans are the Adults in the Room When it Comes to Debt Talks

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Photo Credit: Irish Central President Obama’s minions call conservative House Republicans, jihadists, arsonists and terrorists. He claims they will harm America’s full faith and credit by demanding fundamental changes to the out of control spending in Washington.

Conservative Republican House members claim raising the debt ceiling by a trillion to 18 trillion, 600 billion annual deficits and having the Fed pump 85 billion phantom bucks monthly into the market, are sure ways of destroying America’s full faith and credit.

But on top of all of this is another huge expense getting enacted this month that will add trillions of additional expense to America in the form of Obamacare.

Americans, who have a basic concept of economics, a knowledge of history and how debt has destroyed mighty nations in the past, see the reckless spending in Washington as immoral and irresponsible. They don’t want to see their children become indentured servants to debt incurred today in order to fund America’s present lifestyles.

Current debt is getting close to Italian levels in ratio. Italy is an economic basket case, run into the ground by left wing socialist policies and unchecked union power ….Italy, formerly the seat of the Roman Empire, used to be the greatest nation on earth 2,000 years ago and thought it would last forever, until the advent of “bread and circuses.” There are many other examples of great nations collapsing, or even wars starting due to out of control debt.

Conservative Republican House members have been holding the line when it comes to checking the out of control spending in Washington. They want some accountability and some responsibility.

In spite of intense pressure from the White House, its allies in the media and big government politicians of both parties…these House members will demand some economic concessions from the Obama administration, before they give up their leverage.

It’s a sad note to see that our leadership has devolved to the point that just one segment of the three branches of government, has to be the ones holding the line against big spenders.

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Ed Farnan is the conservative columnist at IrishCentral, where he has been writing on the need for energy independence, strong self defense, secure borders, 2nd amendment, smaller government and many other issues. His articles appear in many publications throughout the USA and world. He has been a guest on Fox News and a regular guest on radio stations in the US and Europe.

Obama Just Made a Terrible Mistake Regarding Egypt

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Photo Credit: Ozan Kose | AFP | Getty ImagesIn a certain sense, the Obama administration’s decision to withhold much of the $1.3 billion in annual aid given to Egypt isn’t surprising. U.S. law mandates cutting off aid to countries in which a coup has taken place, and the Egyptian military’s ouster of President Mohamed Morsi this summer was, analytically speaking, exactly that. Moreover, the Egyptian military’s behavior during the three months since Morsi’s removal has made Egypt’s slide towards enhanced autocracy impossible to ignore: Over 1,000 people have been killed in the military-backed government’s crackdown on pro-Morsi protests; journalists who criticize the military have been prosecuted in military courts; and the new constitution will likely further shield the military from any kind of civilian oversight.

Indeed, the generals are not democrats, and never have been. They are bureaucratic actors who selfishly guard their bureaucratic privileges, which include autonomy over their internal affairs and control over vast economic assets (for example, among other consumer products, the Egyptian military produces bottled water), and they know that true democracy could cost them these perquisites. But cutting off aid won’t make the military democratic, and it will come at a substantial cost: namely, the ability to encourage the military in a more progressive direction down the road, when the environment might be riper for a more assertively pro-democratic U.S. policy in Egypt.

The calls to cut off military aid in the aftermath of Morsi’s ouster reflect a fundamental misunderstanding of what transpired in Egypt this past summer. To say, as is frequently said, that the military removed a democratically elected president from office is to overlook a very basic reality: that by the time unprecedentedly mass protests against the Muslim Brotherhood’s rule commenced on June 30, Mohamed Morsi was a president in name only. Morsi’s November 2012 constitutional declaration, which put his own edicts above judicial scrutiny, and his subsequent ramming of an Islamist constitution through to ratification, severely undercut his popular legitimacy, and shrunk his support in a country of 85 million people down to the Brotherhood’s base of approximately 500,000 members. Meanwhile, the Muslim Brotherhood’s decision to dispatch its cadres to brutally attack and torture protesters outside the presidential palace on December 5 led many Egyptians to view the Brotherhood—an organization that they had elected only months earlier—as an emerging fascist regime. From that point forward, protests against Morsi’s rule became so frequent and destabilizing that by late January, the military—at Morsi’s request—assumed control over the three major Suez Canal cities.

Read more from this story HERE.

Democrats to America: We Own the Government!

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Photo Credit: APIn the current fight over the government shutdown, Republicans are simply representing the views of the American people.

Americans didn’t ask for Obamacare, they don’t want it, but now their insurance premiums are going through the roof, their doctors aren’t accepting it, and their employers are moving them into part-time work — or firing them — to avoid the law’s mandates.

Contrary to Obama’s promises, it turns out: You can’t keep your doctor, you can’t keep your insurance — you can’t even keep your job. In other words, it’s a typical government program, but this one wrecks your health care.

Also, the president did raise taxes on the middle class in defiance of his well-worn campaign promise not to. Indeed, Obamacare is the largest tax hike in U.S. history.

Among the other changes effected by this law are:

— Obamacare will allow insurers to charge 50 percent higher premiums for smokers, but prohibits insurers from increasing premiums for those with HIV/AIDS.

Read more from this story HERE.

Sowell: Inarticulate Republicans

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Photo Credit: National Review If the continued existence of mathematics depended on the ability of the Republicans to defend the proposition that two plus two equals four, it would probably mean the end of mathematics and of all the things that require mathematics.

The Republican speaker of the House of Representatives, John Boehner, epitomized what has been wrong with the Republicans for decades when he emerged from a White House meeting last Wednesday, went over to the assembled microphones, briefly expressed his disgust with the Democrats’ intransigence, and walked on away.

We are in the midst of a national crisis, immediately affecting millions of Americans and potentially affecting the kind of country this will become if Obamacare goes into effect — and yet, with multiple television-network cameras focused on Speaker Boehner as he emerged from the White House, he couldn’t be bothered to prepare a statement that would help clarify a confused situation, full of fallacies and lies.

Boehner is not unique in having a blind spot when it comes to recognizing the importance of articulation and the need to put some serious time and effort into presenting your case in a way that people outside the Beltway would understand. On the contrary, he has been all too typical of Republican leaders in recent decades.

Read more from this story HERE.

Republicans Didn’t Sabotage Health Exchanges, Obama Did

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Photo Credit: Ken James/BloombergFor the first week that the federal health-care exchanges were running … well, crawling … the Obama administration claimed that no one could get through because of overwhelming pent-up demand. Essentially it spent a week arguing that no one could have predicted that, in a country of 300 million people, 2.4 percent of those people might stop by sometime in the first seven days to check out the administration’s signature legislative achievement.

We can now dismiss that theory, because the administration has: “Six days into the launch of insurance marketplaces created by the new health-care law, the federal government acknowledged for the first time Sunday it needed to fix design and software problems that have kept customers from applying online for coverage.”

Presumably, it would not have given that interview if its efforts to fix the systems had been successful this weekend. The Hill reports that the system will go offline again late tonight for more repairs.

So prepare yourself for the next theory: This is the fault of Republicans. Had Republicans created state exchanges as they were supposed to, agreed to the Medicaid expansion and provided more funding, the reasoning goes, everything would be going swimmingly.

I blame the Republicans for a lot of things, from their support for atrocious farm policies to the counterproductive showdown theater that is: 1. Wreaking havoc on everything from government data websites to the Smithsonian; 2. Not saving any money, because we just agreed to pay furloughed workers; 3. Not noticeably advancing the cause of repealing Obamacare; and 4. Grinding down the public’s opinion of the Republican Party from a stump to a hole.

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Government “Shutdown” a Boon for Americans, the War on Energy Has a Lull

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Photo Credit: Irish CentralFrom the emotional headlines, you would think America is in dire straights from a government “shutdown.” But as usual the truth is masked by the headlines and can be found in the print of the details.

In reality only 18% of the government is “shutdown” and the rest of it is humming along as usual, getting automatic funding by rules in place to safeguard our system.

Entitlement checks are on schedule, our armed forces are funded, coasts are guarded and all other critical services essential to running our government are functioning, including the White House chef and dog walker. See White House in shutdown.

Most of the high profile government layoffs are for employees deemed “non essential,” yet even these employees will suffer no long term ill effects, as they will get full pay and benefits for staying home when government “reopens.”…Basically these non essential employees are getting paid vacations.

If American citizens thought there would be some sort of savings from having a government shutdown, on the surface it appears there is none.

But if you look at just one government agency that has a profound effect on the cost of living for all Americans, you can see there is a silver lining.

The Environmental Protection Agency has deemed that over 93% of its employees are “non essential” and have sent them home.

The EPA has been the surrogate bludgeon President Obama has used to wage war on the fossil energy sector, particularly America’s main source of fuel for its electrical energy: coal.

After President Obama was thwarted by members of his own party to impose a crippling carbon tax on the energy industry, he declared a backdoor war of regulations with the end goal of punishing all forms of fossil energy…..All being waged under the guise of his “climate action plan,” which particularly singles out the coal industry.

President Obama did declare his policies would make energy prices necessarily skyrocket and we can see where these policies are leading as Europe and UK citizens struggle under a new devastating economic condition known as “energy poverty.” See: Soaring energy costs make Europeans poor.

“Among those furloughed at the EPA would be most workers at the Office of Air and Radiation, which is in charge of writing and implementing most of the EPA’s major air pollution rules. Also facing furloughs is the unit of the EPA that enforces regulations by taking legal action against an air or water polluter. Just 182 of the enforcement unit’s 804 employees are exempted from furloughs.” See Reuters article-EPA to be hit hard in shutdown.

This brief respite might prove a welcome relief for the blanket of regulations and litigation that add untold expense every time you switch on a light bulb, or start your car to go to work.

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Ed Farnan is the conservative columnist at IrishCentral, where he has been writing on the need for energy independence, strong self defense, secure borders, 2nd amendment, smaller government and many other issues. His articles appear in many publications throughout the USA and world. He has been a guest on Fox News and a regular guest on radio stations in the US and Europe.

The Cold Hard Facts of Obama’s Economy

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Photo Credit: APThere’s an old adage, “Don’t let the facts get in the way of a good story.”

That could be the battle cry within the Obama administration when it comes to Obama’s work on the economy through his five plus years as president. But a close and objective look at the facts shows that the Obama-led and Obama-owned economy tells one and only one story — FAILURE.

Let’s begin on the labor front, where the numbers are atrocious. While the monthly unemployment rate is the headline-grabbing number so many flock to, it is far from the best gauge of labor market strength.

The unemployment rate currently stands at 7.3%. Obama backers will point to the fact… again let’s look at the facts, and rightfully say that the unemployment rate has steadily fallen from its peak of 10% in October 2009 and has remained below 8% since August 2012. These are indeed facts, but they mask the underlying and quite troubling data.

Understand that the unemployment rate is a rather simplistic calculation. The numerator is composed of the number of people unemployed and who have looked for work in the past four weeks. That number is then divided by the total number of individuals in the labor force.

Read more from this story HERE.