Wednesday, January 26, 2011

Now That We Are Past the State of the Union Address, It's Time For the Fun Shit to Begin

I am happy that during last night's speech, the Republicans and Democrats sat together. Having been a part of something very similar a couple of times- two opposing groups that really don't like each other can be a very hostile and nasty environment.

I am convinced that the best thing America has done in the last six years, was dump the House Democrats. Nothing short of dumping the Senate's Democrat majority was going to rescue us from Obamacare. Just weeks ago, there was talk of an Obamacare repeal. I am still scratching my head over that- wondering just how they were going to pull off that feat of magic.

It's time for the fun shit to start.

Remember that 2.5 trillion (sounds like big stuff) budget cut proposal over ten years? I have embedded it here.

To put it simply, it's a waste of time. It includes privatizing Fannie and Freddie, the smoldering and ruined home lenders. I am trying to envision any scenario where that is remotely possible. It is difficult to envision the circumstances under which that zombie mess can be spun off and sold either publicly or privately. Perhaps a scenario where the government breaks it up and sells it off for absolute chump change to the banks- allowing them to take losses and tax benefits- and dispose of the remnants. Maybe.

Not paying for Obamacare implementation and legal challenges? This I have to see.

Obama himself- created something like four thousand 100k plus salaried government workers and czars. I don't think they'll be able to cut the federal workforce by 15% in ten years by attrition. Maybe half that number. The pay freezes will do very little and the benefit packages will swell.

In the absolute best case scenario, the fluff cuts that they'll be able to achieve will not amount to 100 billion a year or about 1 trillion. That includes cutting this years budget and not spending any more stimulus funds. That's the absolute best scenario.

Ending wars and eliminating the United Postal Service, the Department of Energy or the Department of Education would be a lot more productive. In the case of the Department of Education, this is what they do- The primary functions of the Department of Education are to formulate and administer federal funding programs involving education, such as college financial aid, collect data on US schools, and to enforce federal educational laws regarding privacy and civil rights.[3][4]

This hardly seems worth a budget of 52 billion this year and 71 billion next year. Eliminating this money pit will save more dough than all of that other fluff combined. Incidentally, Democrat Jimmy Carter was responsible for these two money sucking ventures, education and energy.

When the smoke clears, the politicians will beat on their chests and act as though they have scaled Mt. Everest. In actuality, they will have done very little. It will be fun to watch those futile efforts. All of this of course, won't do one damn thing for scaling down our existing 14.1 trillion deficit that continues to compound interest. It will simply slow the rate of the additional debt we pile on. The current debt ceiling of 14.3 trillion will be breached by Feb. 28. Current tax revenues are still coming in short of already shortened estimates. And don't forget the FED. Adding zeroes and monetizing the debt. That little piece of 600 billion dollar handiwork has not been accounted for.

At current interest rates, our debt continues to compound. It will rise 2 trillion every 300 days. This is getting rather nasty. If bond yields rise, hang onto your ass. That estimate goes out the window.

When they get real serious, I'll sit up and take notice. Until then, it will be fun to watch them contest every little piece of this budget cut proposal. They are going to have to do a hell of a lot more than this.

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