How America got there

It is kind of ironic that had things turned out a little differently back in 2000 in the Florida fiasco .

" The controversy over the 2000 presidential election, which concluded with a Supreme Court decision that placed George W. Bush in the White House, featured numerous complaints of civil rights abuses on the part of the Florida state government. With the presidency riding on a breathtakingly close finish in Florida, a huge number of African-American Floridians argued either that their votes for Bush's opponent Al Gore had been improperly excluded from the state's official totals—or that they had been denied the opportunity to vote in the first place."
I might not be writing this blog. but first up a chart from The New York Times

That tells a story  and it is a story the right can attempt to deny. In short Bush screwed your economy

" With President Obama and Republican leaders calling for cutting the budget by trillions over the next 10 years, it is worth asking how we got here — from healthy surpluses at the end of the Clinton era, and the promise of future surpluses, to nine straight years of deficits, including the $1.3 trillion shortfall in 2010. The answer is largely the Bush-era tax cuts, war spending in Iraq and Afghanistan, and recessions."


This isn't rocket science. Now I happen to think a budget deficit in a recession is not a bad thing while Bush was running massive deficits the NZ Government was running massive surpluses and  the government chose not to cut taxes  but to pay back foreign debt and although it wasn't popular and eventually cost them the treasury bench's it was the right thing to do. The current recession probably wouldn't have hurt us very much except in New Zealand it has been compounded by the Christchurch earthquake that has forced us to borrow far more than we would normally have had to and instead of looking at surpluses next year it will take us until 2015.

Now this next graph is even more telling

That is just piss poor policy those tax cuts are the ones New Zealand wanted and remember we were in surplus but our government of the day said no we are paying back debt first.


"...that under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much."

Now that is probably as I argue above probably not a bad thing for the Obama administration to do  recession can be blunted  by deficits.

" A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up."


" In future decades, when rising health costs with an aging population hit the budget in full force, deficits are projected to be far deeper than they are now. Effective health care reform, and a willingness to pay more taxes, will be the biggest factors in controlling those deficits."

Again the right will yell the Tea Party will   go into the usual deny everything  that is even remotely rational on the grounds that batshit insanity  is a much better way to manage the economy.

President Obama is trying to save America from destroying herself and the Republicans for reasons I can't fathom are behaving like .....like drink addled idiots. Just a little thought for you all to ponder.

Pension funds invest  massive amounts in the American economy and they are very conservative investors  most of them have rules like only investing in places with a AAA credit rating something America has at the moment but probably won't have unless a deal is done  soon. You can't avoid earthquakes  but I have never heard of a country voting for one.

Taxation stupidity

Demanding tax cuts and refusing to accept that the rich should pay your way can produce some interesting graphics.

Hat tip Kiwiblog

The Bonfire of Civilisation - The Greek FUBAR

FUBAR is a  nautical term meaning " fouled up beyond all repair " although fouled has been replaced with a with a slightly stronger F word in its modern incarnation. I have been following events in Greece from afar but really without any real understanding of what was actually behind them but today I was given a heads up with Radio New Zealand's Afternoons Programme The panel is probably the best hour of weekday radio in New Zealand.

Vanity Fair last year ran an excellent article that astonished me and given the dislocation occurring in Greece now might well explain the situation.

" ...and for the mysterious Vatopaidi monastery, which brought down the last government, laying bare the country’s economic insanity. But beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks. "

 $250,000 per working person that is an astonishing figure we are freaking out down under at a debt of about $4000 per New Zealander which I am guessing would be about $12,000 per working New Zealander. This is public debt not private debt, ie your liability for what your Government has borrowed. So how did this happen ? 

In the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t ta" In just thke into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year.... Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.”

I have always worked in the private sector and I have often wondered what the my worth might be in the public sector in Greece it probably would be a hell of a lot more than New Zealand.

" The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average—and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets. "

Actually it is a crime here theft as a servant and it would be prosecuted but unbelievably this story gets better    sorry worse.

Each day they discovered some incredible omission. A pension debt of a billion dollars every year somehow remained off the government’s books, where everyone pretended it did not exist, even though the government paid it;...The next morning there would be this little hand rising in the back of the room: ‘Actually, Minister, there’s this other 100-to-200-million-euro gap.’ This went on for a week. Among other things turned up were a great number of off-the-books phony job-creation programs. “The Ministry of Agriculture had created an off-the-books unit employing 270 people to digitize the photographs of Greek public lands,” the finance minister tells me. “The trouble was that none of the 270 people had any experience with digital photography. The actual professions of these people were, like, hairdressers.”

Getting the picture people.  Trust me you are not it get worse, from the Greek Finance Minister

As he finishes his story the finance minister stresses that this isn’t a simple matter of the government lying about its expenditures. “This wasn’t all due to misreporting,” he says. “In 2009, tax collection disintegrated, because it was an election year.”

“What?”

He smiles.

“The first thing a government does in an election year is to pull the tax collectors off the streets.”

“You’re kidding.”

Now he’s laughing at me. I’m clearly naive.

WTF. I have issues with the taxman being the first creditor when it comes to people being made redundant but this i8s a bad joke. It get's worse.

"The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” 

Excuse me all you fucking idiots in the Tea Party this is your vision for America. Vote Palin guys and you can have it. 

Tami  my friend, Isn't it ironic.