Thomas Friedman, "Win, Lose, but No Compromise": Shiites and Sunnis?

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In his latest New York Times op-ed entitled "Win, Lose, but No Compromise," would-be Middle East expert Thomas Friedman begins by asking, "Are we all just Shiites and Sunnis now?" Wow, I thought to myself after reading this query, a Times columnist is finally willing to consider Turkey's armored invasion of Syria and the battles it is has been waging there with the Kurds, America's most potent ally on the ground in its war against ISIS. I was also certain that Tom would bestow upon us his benighted wisdom concerning Iran's recent placement of a Russian-made S-300 air defense battery to protect its Fordo nuclear facility. (If Iran has no intention of violating its unsigned nuclear agreement with Obama, why should there be any need to install such a sophisticated missile system at this nuclear complex built into a mountain?) But in fact "Shiites and Sunnis" was only a lead-in to Friedman's take on the state of American politics:

"More and more of our politics resembles the core sectarian conflict in the Middle East between these two branches of Islam, and that is not good. Because whether you’re talking about Shiites and Sunnis — or Iranians and Saudis, Israelis and Palestinians, Turks and Kurds — a simple binary rule dominates their politics: 'I am strong, why should I compromise? I am weak, how can I compromise?'"

Given the unwillingness of Democrats and Republicans to compromise, Friedman goes on to ask:

"How will we improve Obamacare? How will we invest in infrastructure? How will we recreate the compromise on immigration that a few brave Republican and Democratic legislators tried in 2013? How will we get corporate tax reform, a carbon tax and some fiscal policy that we so desperately need to propel the economy and control the deficit?"

Improve Obamacare? Needless to say, no mention by Tom of Aetna's decision to eliminate a vast majority of its Obamacare business. In fact, more and more commentators are telling us that Obamacare has entered into a "death spiral."

How will we invest in infrastructure? Good question. By the time Obama leaves office, US debt will have reached some $20 trillion, and, as we were recently told by the Congressional Budget Office:

"In fiscal year 2016, the federal budget deficit will increase in relation to economic output for the first time since 2009, CBO estimates. If current laws generally remained unchanged—an assumption underlying CBO’s baseline projections—deficits would continue to mount over the next 10 years, and debt held by the public would rise from its already high level.

CBO’s estimate of the deficit for 2016 has increased since the agency issued its previous estimates in March, primarily because revenues are now expected to be lower than earlier anticipated. In contrast, the cumulative deficit through 2026 is smaller in CBO’s current baseline projections than the shortfall projected in March, chiefly because the agency now projects lower interest rates and thus lower outlays for interest payments on federal debt. Nevertheless, by 2026, the deficit is projected to be considerably larger relative to gross domestic product (GDP) than its average over the past 50 years."

Or stated otherwise, it's not only Obamacare that's in a death spiral.

Paul Krugman, "Time to Borrow": Living on Borrowed Time

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Just in case you were wondering, I was unable to attend Obama's 55th birthday party owing to a bout of nausea, which came on after I learned that Barry had funded Iranian terror with a planeload of $400 million in Swiss francs, euros and assorted other currencies.

Onward and upward ... not.

In his latest New York Times op-ed entitled "Time to Borrow," Paul Krugman says of Hillary:

"The campaign still has three ugly months to go, but the odds — 83 percent odds, according to the New York Times’s model — are that it will end with the election of a sane, sensible president."

Someone who thinks she came under sniper fire in Bosnia is sane and sensible? Someone perpetuating a "marital" relationship with Bill, a serial lech, is sane and sensible? A four-Pinocchio compulsive liar is sane and sensible? Yes, I know, it's all relative ...

But Paul's opinion piece is not about Hillary. Rather, he is again demanding that the US take more debt upon itself:

"[I]nvesting more in infrastructure would clearly make us richer. Meanwhile, the federal government can borrow at incredibly low interest rates: 10-year, inflation-protected bonds yielded just 0.09 percent on Friday.

Put these two facts together — big needs for public investment, and very low interest rates — and it suggests not just that we should be borrowing to invest, but that this investment might well pay for itself even in purely fiscal terms. How so? Spending more now would mean a bigger economy later, which would mean more tax revenue. This additional revenue would probably be larger than any rise in future interest payments."

Fascinating. But now consider what the nonpartisan Congressional Budget Office wrote in its July 2016 Long-Term Budget Outlook:

"If current laws governing taxes and spending did not change, the United States would face steadily increasing federal budget deficits and debt over the next 30 years, according to projections by the Congressional Budget Office. Federal debt held by the public, which was equal to 39 percent of gross domestic product (GDP) at the end of fiscal year 2008, has already risen to 75 percent of GDP in the wake of a financial crisis and a recession. In CBO’s projections, that debt rises to 86 percent of GDP in 2026 and to 141 percent in 2046—exceeding the historical peak of 106 percent that occurred just after World War II. The prospect of such large debt poses substantial risks for the nation and presents policymakers with significant challenges.

. . . .

A large and continuously growing federal debt would make a fiscal crisis in the United States more likely. Specifically, investors might become less willing to finance the government’s borrowing unless they were compensated with high interest rates. As a result, interest rates on federal debt would abruptly become higher than the rates of return on other assets, dramatically increasing the cost of future government borrowing. In addition, that increase would reduce the market value of outstanding government bonds. If that happened, investors would lose money. The potential losses for mutual funds, pension funds, insurance companies, banks, and other holders of government debt might be large enough to cause some financial institutions to fail, creating a fiscal crisis.

. . . .

If a fiscal crisis occurred in the United States, policymakers would have only limited—and unattractive—options for responding. The government would need to undertake some combination of three approaches: restructure the debt (that is, seek to modify the contractual terms of existing obligations), use monetary policy to raise inflation above expectations, and adopt large and abrupt spending cuts and tax increases."

Or stated otherwise, notwithstanding Krugman's "what me worry" attitude, the US is living on borrowed time.

Paul Krugman, "Secret Deficit Lovers": Krugman Tries to Pull a Fast One

In his latest New York Times op-ed entitled "Secret Deficit Lovers," Paul Krugman tells us:

"[T]he Congressional Budget Office has tallied up the totals for fiscal 2014, which ran through the end of September, and reports that the deficit plunge of the past several years continues. You still hear politicians ranting about “trillion dollar deficits,” but last year’s deficit was less than half-a-trillion dollars — or, a more meaningful number, just 2.8 percent of G.D.P. — and it’s still falling.

. . . .

Yes, current projections still show a rising ratio of debt to G.D.P. starting some years from now, and uncomfortable levels of debt a generation from now. But given all the clear and present dangers we face, it’s hard to see why dealing with that distant and uncertain prospect should be any kind of policy priority."

Victory over the deficit? Not so fast. What does Krugman mean when he says that the ratio of debt to G.D.P. will start to rise "some years from now"? How many years? Should we be concerned?

See what Fred Hiatt, editorial page editor of the Washington Post, had to say about America's debt in an October 5 opinion piece entitled "Obama’s false victory over the deficit":

"Now look into the future as seen by the scrupulously nonpartisan Congressional Budget Office.

Federal debt has reached 74 percent of the economy’s annual output (GDP), “a higher percentage than at any point in U.S. history except a brief period around World War II,” the CBO says, “and almost twice the percentage at the end of 2008.” With no change in policy, that percentage will hold steady or decline a bit for a couple of years and then start rising again, to a dangerous 78 percent by 2024 and an insupportable 106 percent by 2039."

So, whereas Krugman is telling us "Live for today!," Hiatt is explaining that "some years from now" means in another decade with catastrophe predicted by the Congressional Budget Office in 2039.

Yes, 2039 is 25 years into the future, and at that time no one will remember what Krugman wrote in 2014. But when the CBO, cited by Krugman, is warning that America's deficit could put an end to America as we currently know it, why is he crowing?

Paul Krugman, "Health, Work, Lies": Nothing Wrong With a Disincentive to Work

On Tuesday, the Congressional Budget Office released a report detailing the anticipated effects of the Affordable Care Act:

"The ACA’s largest impact on labor markets will probably occur after 2016, once its major provisions have taken full effect and overall economic output nears its maximum sustainable level. CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive."

Or stated otherwise by Douglas Elmendorf, Head of the CBO (see: http://www.nationalreview.com/corner/370398/cbo-head-obamacare-creates-disincentive-people-work-andrew-johnson):

"By providing a subsidy, these people are better off, but they do have less of an incentive to work."

In his latest New York Times op-ed entitled "Health, Work, Lies" (http://www.nytimes.com/2014/02/07/opinion/krugman-health-work-lies.html?ref=opinion), Paul Krugman tries to help the Obama administration defuse this bombshell:

"It has always been clear that health reform will induce some Americans to work less. Some people will, for example, retire earlier because they no longer need to keep working to keep their health insurance. Others will reduce their hours to spend more time with their children because insurance is no longer contingent on holding a full-time job. More subtly, the incentive to work will be somewhat reduced by health insurance subsidies that fall as your income rises."

Americans "will reduce their hours to spend more time with their children"? Yeah, right.

Krugman's conclusion:

"And now we have a fairly innocuous technical estimate misrepresented as a tale of massive economic damage."

Creating a disincentive to work does not constitute massive economic damage? Remarkable! But then what should you expect from a Nobel Prize winning economist who told us (http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors.html):

"Occupy Wall Street is starting to look like an important event that might even eventually be seen as a turning point.

. . . .

It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details."

Thanks, Paul, for telling us how successful Occupy Wall Street Obamacare will be, but once again, let's agree not to agree.

Maureen Dowd, "Cat on a Hot Stove": The End

This is the end
Beautiful friend
This is the end
My only friend, the end

Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I'll never look into your eyes...again

- The Doors, "The End," 1967

Did you happen to notice that US national debt rose a record $328 billion in a single day and ticked over the $17 trillion mark? When does it stop rising? It doesn't. It's out of control and unsustainable, although you wouldn't know it from the sovereign debt ratings assigned to the US by S&P (AA+), Moody's (AAA) and Fitch (AAA).

You want the truth? You can't handle the truth! On Thursday, China's Dagong Global Credit Rating downgraded America's sovereign debt to A- with a negative outlook (see: http://www.cnbc.com/id/101122993), yet no one on Wall Street stopped to notice. After all, why should it matter what America's largest creditor thinks?

For that matter, why should it even matter to Wall Street that Douglas Elmendorf, head of the Congressional Budget Office, recently declared, "The federal budget is on a course that cannot be sustained indefinitely" (http://www.cnbc.com/id/101065200)? An A- rating with a negative outlook is actually too high, but let's bury our heads in the sand and continue to let the good times roll! 

In her latest New York Times op-ed entitled "Cat on a Hot Stove" (http://www.nytimes.com/2013/10/20/opinion/sunday/cat-on-a-hot-stove.html?ref=maureendowd&_r=0), Maureen Dowd begins by observing:

"PRESIDENT OBAMA won big.

So why did the moment feel so small?

At his victory scold in the State Dining Room on Thursday, the president who yearned to be transformational stood beneath an oil portrait of Abraham Lincoln and demanded . . . a farm bill. He also couldn’t resist taking a holier-than-thou tone toward his tail-between-their-legs Tea Party foes. He assumed his favorite role of the shining knight hectoring the benighted: Sir Lecturealot.

'All of us need to stop focusing on the lobbyists and the bloggers and the talking heads on radio and the professional activists who profit from conflict,' he sermonized. (We have met the enemy and they are . . . bloggers?)"

Obama won big? Why did the moment feel so small? My sympathies are not with the scorched earth tactics of the Tea Party, but one of the last opportunities to set the American economy aright has come and gone. If Obama won big, America - not the Republicans - lost big. And although it may take another 25 years (less if interest rates rise), the writing is on the wall. (Stop focusing on the . . . bloggers? That should make all the difference.)

Dowd continues:

"Obama says he will now work for an immigration bill and a budget deal with deficit cuts. But as Peter Nicholas and Carol E. Lee pointed out in The Wall Street Journal, the president did not mention his more ambitious goals: hiking the minimum wage, widening access to preschool education, and shoring up bridges and roads."

From where will the funding for Obamacare and these other "ambitious goals" come? Answer: With the shutdown behind us, the US Treasury will soon be printing money around the clock, and it might be well worth your while to begin examining financing options on a hi-tech wheelbarrow that will soon be needed to cart piles of $100 bills over to the nearest supermarket to buy bread.

Dowd's conclusion:

"The paradox of Obama is that he believes in his own magical powers, but then he doesn’t turn up to use them."

But why should he bother using these magical powers, if, as Valerie Jarrett would have us know, the president has "been bored to death his whole life" and is "just too talented to do what ordinary people do"? Or stated more simply, why should the anointed one condescend to the level of the hoi polloi?

As I see it, three more years of Obama should pretty much finish off any chance of the US surviving as a global power - economic, military or otherwise.

Paul Krugman, "The Dixiecrat Solution": American Roulette

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. . . . Increasing America’s debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

- Senator Barack Obama, March 20, 2006

In 2006, Senator Obama was opposing an increase in America's debt ceiling to $9 trillion. Today, the US, under the stewardship of President Obama, is facing default unless Congress raises the current $16.7 trillion debt ceiling.

In his latest New York Times op-ed entitled "The Dixiecrat Solution" (http://www.nytimes.com/2013/10/14/opinion/krugman-the-dixiecrat-solution.html?_r=0), Paul Krugman compares Republican opposition to raising the debt ceiling to the antics of a neighbor from hell. Krugman writes:

"So you have this neighbor who has been making your life hell. First he tied you up with a spurious lawsuit; you’re both suffering from huge legal bills. Then he threatened bodily harm to your family. Now, however, he says he’s willing to compromise: He’ll call off the lawsuit, which is to his advantage as well as yours. But in return you must give him your car. Oh, and he’ll stop threatening your family — but only for a week, after which the threats will resume."

Krugman's solution:

"Despite denials from Republican leaders, everyone I talk to believes that it would be easy to pass both a continuing resolution, reopening the government, and an increase in the debt ceiling, averting default, if only such measures were brought to the House floor. How? The answer is, they would get support from just about all Democrats plus some Republicans, mainly relatively moderate non-Southerners. As I said, Dixiecrats in reverse."

Query: Is Krugman's comparison between Republican objections to raising the debt ceiling and an obnoxious neighbor making your life hell a correct analogy? Or is it more apt to compare such objections to a wife threatening her husband with divorce if he doesn't stop his drunken spending spree, which is threatening their household with bankruptcy?

Don't get me wrong: A compromise needs to be reached. Quickly. A default by the US government would decimate the world economic order.

On the other hand, as Douglas Elmendorf, head of the Congressional Budget Office, recently declared, "The federal budget is on a course that cannot be sustained indefinitely" (http://www.cnbc.com/id/101065200).

Peculiar how President Obama is capable of bending over backwards to avoid conflict with overseas bullies, but is willing to play "tough guy" at home and jeopardize what's left of the economy. I suppose the way he sees it, voters would place most of the blame on Republicans. However, this is not a time for politics.

Krugman's conclusion:

"The question for the next few days is whether plunging markets and urgent appeals from big business will stiffen the nonextremists’ spines. For as far as I can tell, the reverse-Dixiecrat solution is the only way out of this mess."

A "reverse-Dixiecrat solution is the only way out of this mess"? I don't think so. The damage in the interim would be immense.

Instead, how about both sides attempting to control their inflated egos and engaging in round-the-clock talks until a settlement is reached. The alternative is disaster.

Who blinks first? Who is to blame? Who cares.

Settle it.

Maureen Dowd, "Welcome to Ted Cruz’s Thunderdome": Dystopia in 2084? How About 2038?

In her latest New York Times op-ed entitled "Welcome to Ted Cruz’s Thunderdome" (http://www.nytimes.com/2013/10/06/opinion/sunday/dowd-welcome-to-ted-cruzs-thunderdome.html), Maureen Dowd paints a dystopic picture of Washington 70 years from now, destroyed by the shutdown. Drawing on imagery much akin to scenes from Will Smith's 2007 "I Am Legend," Dowd writes:

"The year is 2084, in the capital of the land formerly called North America.

The peeling columns of the Lincoln Memorial, and Abe’s majestic head, elegant hands and big feet are partially submerged in sludge. Animals that escaped from the National Zoo after zookeepers were furloughed seven decades ago migrated to the memorials, hunting for food left by tourists.

The white marble monuments are now covered in ash, Greek tragedy ruins overrun with weeds. Tea Party zombies, thrilled with the dark destruction they have wreaked on the planet, continue to maraud around the Hill, eager to chomp on humanity some more."

Describing a conversation between a "gaunt man" and a "sickly boy" concerning who was responsible for this tragedy, Dowd is quick to name the villain :

"The boy frowns. 'But Papa, didn’t the healthy Republicans realize the infected ones had lower brain functions?”

'Well, son, they knew there was something creepy about the ringleader, Ted Cruz,' the man replies. 'His face looked pinched, like a puzzle that had not been put together quite right. He was always launching into orations with a weird cadence and self-consciously throwing folksy phrases into his speeches, like ‘Let me tell ya,’ to make himself seem Texan, when he was really a Canadian.'"

Blame it all on Ted Cruz? Forgive me if I don't assign that much importance or significance to any one member of America's dysfunctional Congress.

As I have said in the past, I support universal health care, but I am also worried by America's national debt, which is now just a tad under $17 trillion, growing by the minute and unsustainable.

And as even Paul Krugman asked yesterday (see: http://jgcaesarea.blogspot.co.il/2013/10/paul-krugman-reform-turns-real-welcome.html) regarding Obamacare:

"What we still don’t know, and is crucial for the program’s longer-term success, is who will sign up. Will there be enough young, healthy enrollees to provide a favorable risk pool and keep premiums relatively low?"

Or stated otherwise: Are there enough healthy youngsters willing to pay more in order to subsidize the unfavorable risk pool, thereby preventing a fiscal disaster, i.e. Democratic Senator Max Baucus's "train wreck"?

Taken a step further, can payments from healthy youngsters ensure that Obamacare is fiscally neutral, i.e. a zero-sum game that does not contribute to massive rapid expansion of America's debt?
As posited by the non-partisan Congressional Budget Office earlier this month with regard to America's financial future (http://www.cbo.gov/publication/44521):

"Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy . . . . Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely."

Yes, unless government spending is brought under control, dystopia could come to the US some 50 years earlier than the time imagined by Dowd. But in order to bring that spending under control, people need to talk to one another, a skill that was lost in the beginning of the 21st Century, when narcissism infected the land.

Paul Krugman, "Rebels Without a Clue": Obama Should Be Setting His House in Order

In any household, there are arguments, some of them bitter. I suppose that is why I recently printed out 100 square pieces of paper to have them ready in case of need. On one side: "To my darling wife, with all my heart." On the other side: "I apologize." You see, I believe in effective, real-time communication when problems arise, as they regularly do.

In his latest New York Times op-ed entitled "Rebels Without a Clue" (http://www.nytimes.com/2013/09/30/opinion/krugman-rebels-without-a-clue.html?_r=0), Paul Krugman  tells us that "a U.S. government default, which will happen unless Congress raises the debt ceiling soon, might cause financial catastrophe." Krugman explains:

"Financial markets have long treated U.S. bonds as the ultimate safe asset; the assumption that America will always honor its debts is the bedrock on which the world financial system rests. In particular, Treasury bills — short-term U.S. bonds — are what investors demand when they want absolutely solid collateral against loans. Treasury bills are so essential for this role that in times of severe stress they sometimes pay slightly negative interest rates — that is, they’re treated as being better than cash.

Now suppose it became clear that U.S. bonds weren’t safe, that America couldn’t be counted on to honor its debts after all. Suddenly, the whole system would be disrupted."

Well, I agree that a US government default would be a disaster, but unlike Krugman, I also believe that US bonds already aren't safe, and one need go no further than the Congressional Budget Office to learn why. As stated by the non-partisan CBO earlier this month with regard to America's financial future (http://www.cbo.gov/publication/44521):

"Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy (see the figure below). Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely."

"Debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely"? It's down the road, but it sounds to me as if US bonds already are not "the ultimate safe asset."

What to do? Listen. Communicate. Compromise. Not just play tough guy with House Republicans while running after Rouhani and then bragging about an "earth shaking" 15-minute phone call, replete with platitudes.

Instead of running after Rouhani, Obama should be setting his House in order.

Gail Collins, "Congress Cracks Up": Does America Have a "Debt Problem and a Failure of Leadership"?

Threaten the full faith and credit of the US by refusing to raise the debt ceiling? Yes, I know, US debt is on the path to becoming unsustainable. As stated by the non-partisan Congressional Budget Office earlier this month with regard to America's financial future (http://www.cbo.gov/publication/44521):

"Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy (see the figure below). Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely."

But threaten a crack-up of the none-too-strong economy with such a measure? Who would be foolish enough to engage in such brinkmanship?

In her latest New York Times op-ed entitled "Congress Cracks Up" (http://www.nytimes.com/2013/09/28/opinion/collins-congress-cracks-up.html?_r=0), Gail Collins chastises US House Republicans for engaging in such dangerous games. Collins writes:

"So, what do you think is wrong with these people? Thanks to gerrymandered Congressional districts and the Tea Party, we do seem to have a surprising number of elected officials who actually don’t believe that raising the debt limit so the government can pay its bills is a good plan."

But consider Senator Obama’s Floor Speech on March 20, 2006, before he voted against raising the debt ceiling:

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

As we were told in January 2011 by Andrew McCarthy in his National Review column "The Corner" (http://www.nationalreview.com/corner/256288/senator-barack-obama-explaining-his-2006-vote-against-raising-debt-limit-andrew-c-mcca), regarding this declaration by Senator Obama:

"At the time, Senator Obama was urging Congress not to tolerate an increase that would bring the debt ceiling to $9 trillion. Under President Obama, the debt ceiling has been raised to $14.3 trillion. Even without counting most unfunded liabilities, the national debt is now calculated to be nearing $14.1 trillion."

Well, we are no longer in 2006, when US national debt was nearing $9 trillion. We are no longer in 2011, when US national debt was some $14 trillion. Rather, we are now late into 2013, and US national debt is just a whisker under $17 trillion.

Does "America have a debt problem and a failure of leadership"? Do "Americans deserve better"? How about some answers, Gail.

Paul Krugman, "The Crazy Party": The Crazy Newspaper

So that there is no misunderstanding: I don't like Republicans. I don't like Democrats. I don't like politicians. But I especially hate when a newspaper manages a nation's foreign policy.

In his latest New York Times op-ed entitled "The Crazy Party" (http://www.nytimes.com/2013/09/20/opinion/krugman-the-crazy-party.html?_r=0), Paul Krugman again takes aim at Republicans and explains how the "crazy party" is preparing to shut down the US government. Krugman writes:

"Yet, at the moment, it seems highly likely that the Republican Party will refuse to fund the government, forcing a shutdown at the beginning of next month, unless President Obama dismantles the health reform that is the signature achievement of his presidency. Republican leaders realize that this is a bad idea, but, until recently, their notion of preaching moderation was to urge party radicals not to hold America hostage over the federal budget so they could wait a few weeks and hold it hostage over the debt ceiling instead. Now they’ve given up even on that delaying tactic. The latest news is that John Boehner, the speaker of the House, has abandoned his efforts to craft a face-saving climbdown on the budget, which means that we’re all set for shutdown, possibly followed by debt crisis."

Ah, yes, Obama's "signature legislation," of which Democratic Senator Max Baucus, who assisted in writing the Affordable Care Act, stated, "I just see a huge train wreck coming down." This is the same "signature legislation" whose problematic implementation was again delayed last month by the president (see: http://www.cnbc.com/id/100959960).

Dialogue? I'm all in favor. But consider what the non-partisan Congressional Budget Office said a few days ago about America's financial future (http://www.cbo.gov/publication/44521):

"Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy (see the figure below). Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely."

Yes, the US is headed for a breakdown, and strong medicine, of the kind that a lame duck Obama administration is incapable of dispensing, is urgently needed.

But as I said earlier, I especially hate it when a dysfunctional Obama administration, in a fit of psychosis and despair, allows a newspaper to dictate its foreign policy. I kid you not.

Michael Calderone, the Senior Media Reporter for The Huffington Post, tells us in an article entitled "New York Times Editors, Columnists Met With Obama During Syria Push" (http://www.huffingtonpost.com/2013/09/18/new-york-times-obama-syria_n_3949419.html?utm_hp_ref=media), that Obama consulted on August 29 with editorial and op-ed staffers from The New York Times regarding his meandering Syria policy. It would appear that as a result of this "off-the-record" meeting, Obama suddenly decided to seek congressional approval for his proposed "limited" strike against the Assad regime.

The meeting, in which Times editorial page editor Andrew Rosenthal, not a particularly bright light (see: http://jgcaesarea.blogspot.co.il/2012/09/is-new-york-times-columnist-maureen.html), participated together with op-ed staffers (e.g., Gail Collins, who knows absolutely nothing about the Middle East) and members of the editorial board, was not reported by the Times.

We also learned from Calderone's article that a former Obama adviser is claiming that Obama only reads the Times.

What is most frightening about all of the above? That Obama only reads the Times, a "psycho-phantic" newspaper which has grown infamous for its anti-Semitic and anti-Israel biases (see, for example: http://jgcaesarea.blogspot.co.il/2012/02/stench-of-anti-semitism-at-new-york.html and http://www.camera.org/images_user/pdf/NYT%20study%20exec%20summary_ind.pdf)?

Or perhaps that Obama saw fit to take advice on Syria from highly politicized Times op-ed writers, such as Gail Collins, who know absolutely nothing about the Middle East?

Or perhaps that Obama was swayed by the editorial board of the Times, whose recent editorials on the subject of Syria (see, for example: http://jgcaesarea.blogspot.co.il/2013/09/new-york-times-editorial-syrian-pact.html and http://jgcaesarea.blogspot.co.il/2013/09/new-york-times-editorial-diplomatic.html) are most kindly characterized as delusional?

Or perhaps that his portrayal by the only newspaper that he reads is more important to the president than making decisions based upon something as straightforward as . . . morality?

And why does Obama only read the Times? Could it be that this narcissistic man cannot bear to confront criticism dished out by other newspapers?

Indeed, we live in deeply disturbing, depressing and demented Times.

Paul Krugman, "Moment of Truthiness": Americans Confuse "Deficit" with "Debt"

Can you imagine a non-economist confusing "deficit" with "debt"? Actually, I think such confusion is easily understood. Paul Krugman, however, is not so forgiving.

In his latest New York Times op-ed entitled "Moment of Truthiness" (http://www.nytimes.com/2013/08/16/opinion/krugman-moment-of-truthiness.html?_r=0), Nobelist Krugman whines that the American public has been misled. Krugman writes:

"In a well-known paper with the discouraging title, 'It Feels Like We’re Thinking,' the political scientists Christopher Achen and Larry Bartels reported on a 1996 survey that asked voters whether the budget deficit had increased or decreased under President Clinton. In fact, the deficit was down sharply, but a plurality of voters — and a majority of Republicans — believed that it had gone up.

I wondered on my blog what a similar survey would show today, with the deficit falling even faster than it did in the 1990s. Ask and ye shall receive: Hal Varian, the chief economist of Google, offered to run a Google Consumer Survey — a service the company normally sells to market researchers — on the question. So we asked whether the deficit has gone up or down since January 2010. And the results were even worse than in 1996: A majority of those who replied said the deficit has gone up, with more than 40 percent saying that it has gone up a lot. Only 12 percent answered correctly that it has gone down a lot."

Who, according to Krugman, is responsible for this misunderstanding? Those nefarious Republicans, of course.

Okay, the annual federal government budget deficit is the difference between government receipts and spending.

On the other hand, US public debt is the outstanding amount owed by the federal government.

The federal government deficit is currently down; however, US public debt is up. How much higher is US public debt? As of January 20, 2009, when Obama became president, US gross debt was $10.6 trillion. As of March 31, 2013, US gross debt was some $16 trillion and rising.

The American public is obviously confusing "deficit" with "debt."

But Krugman denies that he is calling Americans foolish:

"Am I saying that voters are stupid? Not at all. People have lives, jobs, children to raise. They’re not going to sit down with Congressional Budget Office reports."

So what did the nonpartisan Congressional Budget Office say in May 2013 (http://www.cbo.gov/publication/44172) about America's rising debt (my emphasis in red)?:

"Such high and rising debt later in the coming decade would have serious negative consequences: When interest rates return to higher (more typical) levels, federal spending on interest payments would increase substantially. Moreover, because federal borrowing reduces national saving, over time the capital stock would be smaller and total wages would be lower than they would be if the debt was reduced. In addition, lawmakers would have less flexibility than they would have if debt levels were lower to use tax and spending policy to respond to unexpected challenges. Finally, a large debt increases the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates."

Hey, is it possible that a concerned American public, which is confusing "deficit" with "debt," is not so foolish after all?

Paul Krugman, "The Excel Depression": Up the Creek Without a Paddle

When examining America's ratio of debt to G.D.P., is there a magic number beyond which the US should not go? At my age, I no longer "believe in magic in a young girl's heart" or any other magic for that matter. But as much as I don't believe in magic, I think one has to be obtuse not to acknowledge that the ratio of debt to G.D.P. in the US is currently in the stratosphere and is indicative of the fact that US debt is unsustainable.

In his latest New York Times op-ed entitled "The Excel Depression" (http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html?_r=0), Paul Krugman seeks to rip holes in a 2010 paper by two Harvard economists, Carmen Reinhart and Kenneth Rogoff, entitled "Growth in a Time of Debt," which claimed that when debt exceeded 90 percent of G.D.P., economic growth plummeted. Krugman writes:

"As soon as the paper was released, many economists pointed out that a negative correlation between debt and economic performance need not mean that high debt causes low growth. It could just as easily be the other way around, with poor economic performance leading to high debt. Indeed, that’s obviously the case for Japan, which went deep into debt only after its growth collapsed in the early 1990s.

Over time, another problem emerged: Other researchers, using seemingly comparable data on debt and growth, couldn’t replicate the Reinhart-Rogoff results. They typically found some correlation between high debt and slow growth — but nothing that looked like a tipping point at 90 percent or, indeed, any particular level of debt.

Finally, Ms. Reinhart and Mr. Rogoff allowed researchers at the University of Massachusetts to look at their original spreadsheet — and the mystery of the irreproducible results was solved. First, they omitted some data; second, they used unusual and highly questionable statistical procedures; and finally, yes, they made an Excel coding error. Correct these oddities and errors, and you get what other researchers have found: some correlation between high debt and slow growth, with no indication of which is causing which, but no sign at all of that 90 percent 'threshold.'"

Okay, so there is no magical 90 percent threshold. However, as observed by Krugman in an earlier op-ed (http://www.nytimes.com/2012/12/17/opinion/krugman-that-terrible-trillion.html?_r=0), the ratio of debt to G.D.P. is "the best measure of our debt position."

What does the Congressional Budget Office have to say? In a February 2013 report entitled "The Budget and Economic Outlook: Fiscal Years 2013 to 2023" (http://www.cbo.gov/publication/43907), it informs us:

"With revenues expected to rise more rapidly than spending in the next few years under current law, the deficit is projected to dip as low as 2.4 percent of GDP by 2015. In later years, however, projected deficits rise steadily, reaching almost 4 percent of GDP in 2023. For the 2014–2023 period, deficits in CBO’s baseline projections total $7.0 trillion. With such deficits, federal debt would remain above 73 percent of GDP—far higher than the 39 percent average seen over the past four decades. (As recently as the end of 2007, federal debt equaled just 36 percent of GDP.) Moreover, debt would be increasing relative to the size of the economy in the second half of the decade."

Translation without expletives: We're up the creek without a paddle.

Paul Krugman, "Dwindling Deficit Disorder": The Sinking of the Titanic

In his latest New York Times op-ed entitled "Dwindling Deficit Disorder" (http://www.nytimes.com/2013/03/11/opinion/krugman-dwindling-deficit-disorder.html?_r=0), Paul Krugman concludes:

"The deficit is indeed dwindling, and the case for making the deficit a central policy concern, which was never very strong given low borrowing costs and high unemployment, has now completely vanished."

But what if unemployment remains high? As acknowledged by Krugman, "unemployment, especially long-term unemployment, is still unacceptably high." My guess is that high unemployment is with us to stay, given that US manufacturing has been allowed to fly the coop.

And what if borrowing rates go higher? They will need to be adjusted higher when there is a resurgence of inflation sometime over the next 28 years.

Why 28 years? Because as observed by Paul in an earlier op-ed (http://www.nytimes.com/2012/12/17/opinion/krugman-that-terrible-trillion.html?_r=0), the ratio of debt to G.D.P. is "the best measure of our debt position."

Well, US debt is currently some $16.7 trillion, which is more that 100% of America's G.D.P. Those "fools" at the nonpartisan Congressional Budget Office recently warned that "U.S. debt is on track to be nearly twice the size of the U.S. economy by 2037" (http://thehill.com/blogs/on-the-money/budget/230901-cbo-warns-of-grim-long-term-debt-outlook). Sure, in the meantime the American Taxpayer Relief Act and the sequester may have delayed "achievement" of that 200% debt to G.D.P. ratio by a few years; however, as acknowledged by the Peterson Foundation (http://www.pgpf.org/Issues/Fiscal-Outlook/2013/01/fiscal-cliff-atra-2012-long-term-analysis.aspx), we're still headed for that astronomical percentage by 2040.

Krugman warns of "scare tactics" and "a blizzard of bogus numbers" coming from those who oppose his calls for higher federal spending. "Bogus numbers" from the CBO? I don't think so. "Scare tactics"? Scared, me? The damage done and still to be done by the Obama administration is irreversible, and I am prepared to meet my maker.

Yes, the Titanic is going down as Krugman cries "All is well," and it will be for future generations to send deep-sea probes down into the cold murky water to conduct a proper postmortem.

Paul Krugman, "The Dwindling Deficit": A Unicorn Felching a Centaur

Perhaps you recall my blog entry earlier this month (http://jgcaesarea.blogspot.co.il/2013/01/paul-krugman-coins-against-crazies-just.html) concerning Paul Krugman's advocacy on behalf of the US minting a trillion dollar coin. I wrote:

"Mint the coin? I'm certain world financial markets would highly appreciate this stunt, which could cause instant collapse of the American economy.

But heck, why go to the trouble of minting a platinum coin when an autographed picture of Obama, inscribed with the amount of $10 trillion, should do the trick?

Thanks, Paul. Keep those lucid ideas coming!"

Well, Jon Stewart apparently agrees with me. Instead of a one trillion coin, Stewart suggested that the US issue a 20 trillion dollar coin, or better still, a one hundred quillion dollar bill with a picture of a unicorn felching a centaur. Wounded by Stewart's taunt, Krugman accused Stewart of being "lazy," whereupon Stewart doubled down in a moment of comedic history, "It's a stupid f***ing idea" (http://www.thedailyshow.com/watch/mon-january-14-2013/paul-krugman---the-trillion-dollar-coin).

Support for Occupy Wall Street (http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors.html)? Trillion dollar coins? Apparently it's the stuff that makes for Nobel laureates. And not to worry: Krugman's creative juices continue to flow. In a New York Times op-ed entitled "The Dwindling Deficit" (http://www.nytimes.com/2013/01/18/opinion/krugman-the-dwindling-deficit.html?_r=0), Paul tells us that we need not occupy ourselves with concern for America's long-term deficit prospects:

"Recently the nonpartisan Center on Budget and Policy Priorities took Congressional Budget Office projections for the next decade and updated them to take account of two major deficit-reduction actions: the spending cuts agreed to in 2011, amounting to almost $1.5 trillion over the next decade; and the roughly $600 billion in tax increases on the affluent agreed to at the beginning of this year. What the center finds is a budget outlook that, as I said, isn’t great but isn’t terrible: It projects that the ratio of debt to G.D.P., the standard measure of America’s debt position, will be only modestly higher in 2022 than it is now.

. . . .

Now, projections that run further into the future do suggest trouble, as an aging population and rising health care costs continue to push federal spending higher. But here’s a question you almost never see seriously addressed: Why, exactly, should we believe that it’s necessary, or even possible, to decide right now how we will eventually address the budget issues of the 2030s?"

Yup, why should we care that by 2037 US debt will be double GDP (see: http://thehill.com/blogs/on-the-money/budget/230901-cbo-warns-of-grim-long-term-debt-outlook)? That's our children's problem, and there's no need now to "address the budget issues of the 2030s." Heck, you might as well cash in your retirement plans now and spend it all on new Bentleys, given that it's all so far away.

Bottom line: Come the 2030s, the US could well need to issue that one hundred quillion dollar bill with a picture of a unicorn felching a centaur.