Bogus Obama Math

Listen carefully.

Did you hear that Obama administration talking point? We can’t afford the $700 billion to extend the Bush tax cuts for the “wealthiest Americans”. But we really want to extend the “middle class” tax cuts.

Let’s do some math.

Bush tax cuts: What you need to know

What’s at stake for the deficit?

Treasury estimates the costs of making the tax cuts permanent for everyone is $3.7 trillion over 10 years.

Of that, $3 trillion accounts for the cost of extending them for the vast majority of Americans, as the president has proposed. The remaining $700 billion is the cost of extending them permanently for the high-income earners.

Um, so, we can afford $3 trillion, but not $3.7 trillion, according to Obama math. If we can’t afford the $700 billion for the tax cuts for the “rich” in the first place, where is Obama going to come up with the $3 trillion for the “middle class” tax cuts he loves so much and why is no one asking this question? What bull[expletive deleted]!

See also:
Obama: Republicans playing games with tax cuts
No time to play ‘games’ with tax cuts, Obama says
Obama Blasts GOP on Tax Cut Issue
Tax Cut Battle
Democrats divided over tax hikes
Moderate House Democrats Push for Vote on Extending All Bush Tax Cuts
More House Democrats call for tax cuts for all
Another Democrat Says Extend ALL Bush Tax Cuts
WHIP COUNT: Democrats in favor of extending all of the Bush tax cuts
Change: Pelosi Hints She’s Open To Full Tax Cut Extension

Obama is such a dishonest douche bag. He has no problem borrowing $3 trillion to play political class warfare ahead of the midterm election, but then he can’t seem to borrow the extra $700 billion to extend the tax cuts to those evil “rich” people, you know, the people who actually create most of the jobs in our economy.

/it’s real simple, with the country already over $14 trillion in debt, either we can afford all the tax cut extensions or we can’t afford any of them

Obama And The Democrats Set Another Record!

And it’s a record that really sucks.

US budget deficit hits record in April

The US Treasury Department says that the federal budget deficit hit a record for the month of April, reaching nearly 83 billion dollars.

On Wednesday, the Treasury Department announced that the April deficit soared to $82.7 billion, the largest imbalance for that month on record.

That was significantly higher than last year’s April deficit of $20 billion and above the $30 billion deficit private economists had anticipated.

Revenues for April were down 7.9 percent from a year ago, dipping to $245.3 billion. That decline included a fall in individual income tax payments.

That reflected not only the impact of millions of people out of work but also tax relief provided through the economic stimulus program that Congress passed in February 2009.

The latest data brought the deficit for the first seven months of fiscal year 2010 to around 800 billion dollars.

The White House had warned that the deficit for fiscal year 2010 could go above one and a half trillion dollars.

See also:
U.S. posts April deficit for 3rd time in 30 years
U.S. Posts 19th Straight Monthly Budget Deficit
19 Straight Months! April’s Record-Breaking Budget Deficit
US budget deficit wider-than-expected in April
Federal budget deficit $82 billion in April
Budget Deficit in U.S. Widened to $82.7 Billion (Update1)
U.S. posts record April budget gap-UPDATE 2
U.S. April budget deficit $83 billion: Treasury

It’s especially pathetic when the totally out of control, Democrat Congress enabled Obama administration spending sets a budget deficit record in the month when the bulk of the yearly Federal tax receipts roll in!

/this isn’t Greece, is this Greece?

Read The Writing On The Wall

The numbers are big but the math is fairly simple, the United States is in deep financial trouble, we’re digging the hole deeper, and no one in Washington is even thinking about putting down the shovel.

Taking the National Debt Seriously

As of Sept. 30, 2009, the national debt was almost $12 trillion and interest on that debt was $383 billion for the year, according to the Treasury Department’s Bureau of the Public Debt. The Congressional Budget Office on Oct. 7 estimated the 2009 budget deficit to be almost $1.4 trillion (about 10% of GDP). In August, the White House Office of Management and Budget (OMB) estimated total government revenues at about $2 trillion. The revenue estimate included $904 billion from individual income taxes. This means the cost of interest on the debt represented more than 40 cents of every dollar that came in from individual income taxes.

Except for a few years in the late 1990s, for decades Washington has spent more than it has taken in each year and borrowed the rest. Taxpayer dollars that could have paid off debt each year have instead been spent on interest to finance debt. Unfortunately, that’s a vicious cycle that will likely only get worse.

The OMB projects deficits of about $9 trillion over the next 10 years. If that occurs, the national debt will be almost $21 trillion by 2019. However, the actual amount could be much higher. The OMB also optimistically projects $13.5 trillion of revenue increases over the next decade, while minimizing the inevitable rise in interest rates that will come with an expanding national debt.

During Jimmy Carter’s years in the White House, Treasury yields reached 15%. The 2009 average interest rate on the debt was only 3.2%. With our mounting national debt and budget deficits, it is reasonable to assume that in the near future interest rates on new and refinanced debt could double or triple.

In stark but simple terms, unless Americans are made aware of this financial crisis and demand accountability, the very fabric of our society will be destroyed. Interest rates and interest costs will soar and government revenues will be devoured by interest on the national debt. Eventually, most of what we spend on Social Security, Medicare, education, national defense and much more may have to come from new borrowing, if such funding can be obtained. Left unchecked, this destructive deficit-debt cycle will leave the White House and Congress with either having to default on the national debt or instruct the Treasury to run the printing presses into a policy of hyperinflation.

See also:
US National Debt Clock
Let’s Play Hypocrisy Or Incredibly Shameless Hypocrisy?
Obama’s $2 Trillion Friday Night Dump
Setting Records
You’d Better Sit Down, I’ve Got Some Bad News
Thank You President Obvious
File Under: No [Expletive Deleted] Sherlock!
Money Doesn’t Grow On Trees
Spending Like A Drunken Sailor On Crack

/hey, I know, let’s spend a couple trillion more on health care “reform”, cripple the economy with cap and trade, and, oh, how about a second “stimulus”?

We’re From The Government And You’re Screwed

Bailout Man Turns the Screws

Late on New Year’s Eve, , a Treasury Department official, sat waiting impatiently for documents to arrive from Citigroup Inc. He’d just been told by the bank’s chief financial officer that Citigroup couldn’t reach some executives who needed to sign the paperwork, including one woman whose husband was in the hospital with a heart attack.

“Well then, you know where to find her,” Mr. Lambright replied to the finance chief, Gary Crittenden, according to three accounts of the call. “Put someone in one of your fancy black cars and get her to sign the document.”

As the government continues to pour cash into the economy, Mr. Lambright, 38 years old, has become one of the most powerful men in American finance. Unknown to most outside the Treasury building, he’s an embodiment of how power in the economy has shifted — for good or ill — to Washington.

. . .

After the government agreed to help, Mr. Lambright’s team had to put flesh on the deal, including compensation curbs for bank executives. Bank of America officials were rankled by the proposed pay restrictions and the 8% interest rate the government planned to charge.

On a conference call with top government and bank officials, Bank of America’s chief financial officer said the deal seemed punitive. Mr. Lambright spoke up. He reminded the CFO that his firm was bleeding outside the emergency room and was seeking help from a government with only blunt instruments at its disposal, according to three people familiar with the call.

“You’re in pain and you have to decide: Does it hurt more to come in or stay out?” Mr. Lambright said, according to those people.

Government officials agreed that they needed to impose restrictions, and in the end, pay limits were set.

See also:
Treasury continues image control
Export bank chief James H. Lambright joins financial rescue team
Treasury Names Interim Chief Investment Officer for TARP
TARP leader Lambright wields power in Washington
James H. Lambright
James H. Lambright

/is it any wonder these banks regret taking the money and can’t pay back the TARP funds fast enough?

This Had Better Work

My Plan for Bad Bank Assets

Today, we are announcing another critical piece of our plan to increase the flow of credit and expand liquidity. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system.

The Public-Private Investment Program will purchase real-estate related loans from banks and securities from the broader markets. Banks will have the ability to sell pools of loans to dedicated funds, and investors will compete to have the ability to participate in those funds and take advantage of the financing provided by the government.

The funds established under this program will have three essential design features. First, they will use government resources in the form of capital from the Treasury, and financing from the FDIC and Federal Reserve, to mobilize capital from private investors. Second, the Public-Private Investment Program will ensure that private-sector participants share the risks alongside the taxpayer, and that the taxpayer shares in the profits from these investments. These funds will be open to investors of all types, such as pension funds, so that a broad range of Americans can participate.

Third, private-sector purchasers will establish the value of the loans and securities purchased under the program, which will protect the government from overpaying for these assets.

The new Public-Private Investment Program will initially provide financing for $500 billion with the potential to expand up to $1 trillion over time, which is a substantial share of real-estate related assets originated before the recession that are now clogging our financial system. Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets. The ability to sell assets to this fund will make it easier for banks to raise private capital, which will accelerate their ability to replace the capital investments provided by the Treasury.

This program to address legacy loans and securities is part of an overall strategy to resolve the crisis as quickly and effectively as possible at least cost to the taxpayer. The Public-Private Investment Program is better for the taxpayer than having the government alone directly purchase the assets from banks that are still operating and assume a larger share of the losses. Our approach shares risk with the private sector, efficiently leverages taxpayer dollars, and deploys private-sector competition to determine market prices for currently illiquid assets. Simply hoping for banks to work these assets off over time risks prolonging the crisis in a repeat of the Japanese experience.

See also:
Geithner Banks on Private Cash
White House Defends Plan for Toxic Assets
Treasury’s toxic asset plan could cost $1 trillion
Treasury expected to unveil new entity to help buy toxic assets
A Plan To Purge Banks’ Toxic Assets
AIG fallout could trip up toxic-asset sales
Banker fury over tax ‘witch-hunt’
Pandit’s Memo to Citigroup Employees
Bank CEOs Push Back on Legislation That Would Tax Bonuses
Citigroup, Bank of America, JPMorgan criticize proposals to tax bonuses
Citi CEO says bonus tax could hurt financial firms
Citi’s Pandit warns of ‘setback’ if bonus tax passes
U.S. Department of the Treasury
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation

Gee, now they want the help of private equity? That might be a tough sell after last week’s shameful, sordid infantile tantrum, where everyone in the government from Obama to Barney Frank was hypocritically kicking “greedy” Wall Street executives in the groin and passing retroactive laws to take away money they’ve already legally earned. Why should they cooperate when Washington can turn on them on a whim and change the rules at the drop of a hat?

In any case, I hope the Public-Private Investment Program works. It’s a vital step on the path out of this recession.

/keep your fingers crossed and stay tuned