Friday, July 29, 2011

Debt Ceiling Phonus Balonus

I don't know how the final numbers will shake out, but as of right now, the competing House and Senate versions both claim they'll increase the debt ceiling by $2 trillion or so, in exchange for $2 trillion or so in spending cuts over the next ten years - all give or take a trillion or two. The biggest sticking point seems to be whether it will be a short-term increase (six months or so) or long-term (just past the next election).

Either way, we're going to be facing another debt ceiling debate by December 2012. So the ceiling increase is good for only about 18 months, tops.

But the proposed spending cuts are spread out over ten years. Presumably, we'll be having this same argument next year or early 2013.

Some questions:
  1. What spending do they think they're going to cut in 2013 in exchange for the 2013 debt ceiling increase?
  2. Why do they think that spending can't be cut today, but they'll be able to cut it in 2013?
  3. The proposed cuts that are being spread out over the next ten years - will they be cuts compared to what was spent this year? Or will the cuts that they're looking to schedule in, say 2018, be cuts compared to whatever ridiculous amount was spent in 2017? In other words, if, say, the EPA's budget this year is $40 billion, and it's scheduled to get cut $10 billion in 2018, will its budget be reduced to $30 billion in 2018? Or will it be reduced $10 billion from the $65 billion it had meanwhile increased over the previous five years? In other words, what is the baseline for that $10 billion cut?
  4. And aren't all these proposals for cuts ten years from now a pointless, phony exercise, since nothing that Congress does today is binding on any future Congress?
I think you know the answers to these semi-rhetorical questions as well as I do, but just in case, here they are:
  1. Shut up. We'll cross that bridge when we get to it.
  2. We can't afford to make those cuts even today. If we make those cuts, who's going to 
    1. stop black-market sales of incandescent light bulbs;
    2. support NPR;
    3. pay the salaries of Outreach Coordinators, Diversity Liaisons, and Sustainability Facilitators;
    4. pay for high speed government rail service between Chicago and Iowa City;
    5. make sure there are government warning labels on all lawn mowers warning people not to stick their limbs into them;
    6. buy machine guns for Mexican drug lords;
    7. grope potential five-year-old terrorists at boarding gates.
  3. The 2018 EPA budget will be $93 billion, which is a cut of $11 billion from 2017's $65 billion because otherwise they would have gotten a budget of $97 billion. If that doesn't make sense, it's because you're smarter than your congressman, who, being an imbecile, understands it perfectly.
  4. Yes.
 The only real spending cuts are the cuts that take effect immediately. Everything else amounts to BOHICA.

Anyway, the debt ceiling increase is meaningless. You could increase it to infinity + a jillion skillion dollars + a unicorn. The bond ratings outfits are going to downgrade our debt regardless, because they don't give a rap what our debt ceiling is. They care about what we're doing to fix the clusterfark we're in, not what we're going to allow ourselves to borrow.

And we ain't doing squat about that. Invest in China.

Thursday, July 14, 2011

Social Worker Managing a Two Billion Dollar Portfolio

Michigan Senator Debbie Stabenow has a graduate degree in social work from Michigan State university.

Would you trust her to manage your money?

Would you trust her to manage $2 billion of your money?
Sen. Debbie Stabenow was also making headlines this week, touring Michigan to promote her Battery Innovation Act — legislation she plans to introduce in the Senate this week that would coordinate all aspects of advanced battery production, from research and development to manufacturing.
While the terms of Dow's recent partnership weren't disclosed, Stabenow's proposed legislation calls for the federal government to invest $2 billion into the effort that she hopes spurs a growing market.

I hatehatehatehatehate when politicians use the word "investing." Whenever a politician uses any variation of the word "invest," he's lying.

That's important, so let me say it again: Whenever a politician uses any variation of the word "invest," he's lying.

Investing means giving X dollars to someone in the hope that you'll get X+Y dollars back in Z time. With X, Y, and Z, you can calculate a return on investment, or ROI.*   Example: You invest $100 (X) in Consolidated Fuzz Corporation stock on January 1. On December 31, you sell the stock for $125.00 (Y). Your ROI is 25% per year (Z).

Politicians only use the X amount above - and they almost always get it wrong by factors of magnitude - and never, never, never give you a number for Y or Z. What they do with your money bears less resemblance to real investing than it does to throwing fistfuls of seed corn out a car window and expecting ethanol pumps to sprout up where they land.

In Stabenow's case, that may be the literal truth. She thinks she can feel global warming when she's flying, so who knows what she thinks would happen if you threw corn out your car window?
"Climate change is very real," she confessed as she embraced cap and trade's massive tax increase on Michigan industry - at the same time claiming, against all the evidence, that it would not lead to an increase in manufacturing costs or energy prices. "Global warming creates volatility. I feel it when I'm flying. The storms are more volatile. We are paying the price in more hurricanes and tornadoes."
This person is trying to spend $2 billion of your money. No wonder we're going broke.

* If you don't understand that because your degree is in something that ends with the word "studies," take a semester of accounting 101 at your local community college, after you've mastered some basic math, such as calculating percentages.

Sunday, July 10, 2011

Happy Independence Day, America, and God Save the Tsar!

So last night, Cunegonde and I and some friends went to Oronoco Park here in the lovely Democratic People's Republic of Alexandria, Virginia, to celebrate America's 235th birthday and DPRAV's 262nd, the celebration of both which is traditionally the Sunday after Independence Day. It was a lovely blankets-and-lawn-chairs-and-coolers kind of evening, a rockabilly band entertained us for about the first half-hour we were there, local dignitaries made speeches, DPRAV fed birthday cupcakes to the crowd, and about an hour before the 9:30 scheduled time for the fireworks display, the Alexandria Symphony Orchestra took the stage and treated us to a wide range of music, from Duke Ellington to Rogers and Hammerstein to Gustav Holst (Jupiter, the Bringer of Jollity, from The Planets), to music from Harry Potter.

At 9:30, it was dark enough for the fireworks to begin, and the orchestra played the last ten minutes or so of Independence Day fireworks' standard accompaniment, Tchaikovsky's famous 1812 Overture.

Am I really the only person in America who finds this a ridiculously insulting juxtaposition of fireworks and music? Here's what 1812 is about, according to Wikipedia:
The music can be interpreted as a fairly literal depiction of the campaign: in June 1812, the previously undefeated French Allied Army of over half a million battle-hardened soldiers and almost 1,200 state-of-the-art guns (cannons, artillery pieces) crossed the Niemen River into Lithuania on its way to Moscow... we hear the ominous notes of approaching conflict and preparation for battle with a hint of desperation but great enthusiasm, followed by the distant strains of La Marseillaise, the French National Anthem, as the French approach... The Tsar desperately appeals to the spirit of the Russian people in an eloquent plea to come forward and defend the Rodina (Motherland)... we hear traditional Russian folk music. La Marseillaise returns in force with great sounds of battle as the French approach Moscow... the great armies clash on the plains west of Moscow, and Moscow burns. Just at the moment that Moscow is occupied and all seems hopeless, the hymn which opens the piece is heard again as God intervenes, bringing an unprecedented deep freeze with which the French cannot contend (one can hear the winter winds blowing in the music). The French attempt to retreat, but their guns, stuck in the freezing ground, are captured by the Russians and turned against them. Finally, the guns are fired in celebration and church bells all across the land peal in grateful honor of their deliverance from their "treacherous and cruel enemies."

An overture full of Russian folk tunes, La Marseillaise, the French national anthem (which Napoleon had actually banned in 1805, but never mind), and Russian hymns God Save the Tsar!, and God Preserve Thy People. What all this has to do with America's or DPRAV's birthday escapes my poor understanding. This is the celebration of the defeat of one European autocrat's armies by the armies of another European autocrat (with a huge assist from the weather), neither of whom had any use for what happened here in 1776, and both of whom happily imprisoned or murdered any of their royal subjects who had any thought of trying to bring 1776 to Paris or Moscow.

But we have to have 1812 when we have fireworks, because, well, you know, cannons! Really? Is that the only justification for playing this musical affront to every American value on the anniversary celebration of the founding of our country? Where we not only believe that all men have the inalienable right to life, liberty, and the pursuit of happiness, but consider it to be as obvious a fact as 2+2=4?

If there is no other music out there that would be suitable for the occasion, can't we find someone who can write uplifting, rousing, Independence-Day-fireworks-worthy music, to include cannons for people unwilling to give up the tradition, to replace this misbegotten celebration of dictators, death and destruction?

Is there anyone who thinks John Williams isn't up to the job?