The Demographic Tsunami

From time to time we have referred to the upcoming demographic tsunami and its debilitating impacts on the government's and country's fiscal welfare. You can see the tsunami coming in the huge gap between the 67 year old and 68 year old age distribution in the following graph. The 67 year olds were the first of the post World War II Baby Boomers (68 years old now). We are just three years into the first cohort of Boomers qualifying for Medicare. Year by year the number of new Medicare recipients will grow until about ten years from now when the annual incremental enrollment will be twice what it was just five years back. 

The stories and the ultimate expense impacts are similar for social security and other programs that grow with increases in the number of aged citizens.

Source: http://www.stevenssweet.com/2014/08/the-most-common-age-in-us-is-far.html

There is a double whammy to this picture in that the Boomers will not only become takers; they will no longer be makers as their peak earnings years pass and their incomes and tax payments decline.

We are turning the corner, but going the wrong way. Here is how the Congressional Budget Office (CBO) shows federal deficits increasing back into the $1 billion to $1.5 billion range as a consequence.

Source: http://crfb.org/document/report-deficit-falls-486-billion-debt-continues-rise

As for projections, per standard practice CBO assumes away the business cycle. That is, it is assumed there will be no recessions between now and 2025, when the statistical probability is there will be two and it is a virtual certainty that there will be at least one recession. Without legislative change, the numbers going forward will almost certainly be worse than projected.

Halfway through his second term Dear President has done absolutely nothing to address the programmatic impacts of the tsunami. He will do nothing in his last two years in office either other than to lay back and trash any Republican that hints at spending reforms that will limit expense growth. 

Gridlock, thy name is Barack.

The tsunami rolls on. 

Getting the Government You Vote For

It's works for me so long as someone else bears the burden.

Sometimes you run across a quote that you just can't pass up. This one comes from Austin, Texas. Austin is a university town (U of T), the artsy town, and the state capital, which means it is home to the highest echelons of the highly paid, secure and fringe benefit laden state bureaucracy, and populated with wall to wall know-it-all moral relativists who can find a demon to justify blocking any fiscally, economically or commercially viable market and efficiency based outcome and spending unlimited funds to do so. These are smart and creative people who know better what is good for a person than any individual can ever know for him or herself.. Whenever stuff doesn't work, costs too much, collapses of its own weight, or generates enormous "unintended consequences," why that is just some other evil person's fault who they will make sure to target and make pay in the next round of collectivism.

The relativists vote to concentrate power and expand the collective, to deputize crony capitalists (for local government, this typically means commercial real estate interests whose economic power is concentrated these days in a relative handful of national REITs) who go along with the crowd, and to punish those who don't, without judging when and how the collective and its mercenaries will ultimately come back to bite and consume them. Here is how the Austin vote went the last presidential election -- more or less opposite the state as a whole.

With 100 percent of the states precincts reporting, Obama won more than 60 percent of the vote in Travis County, home to Austin, the state's most liberal city. Romney trailed with just over 36 percent of the vote.

These are the really smart people who are prone to vote for a person based on his or her identity and little or nothing else, not because that's the right thing to do, of course, but they just know in their scientific bones that everyone who doesn't vote their way is an evil misogynist, racist, greedy capitalist, privileged white guy or whatever, who unites with others to vote the opposite way base on another spurious set of identities. 

Now, here is the quote.

“I’m at the breaking point,” said Gretchen Gardner, an Austin artist who bought a 1930s bungalow in the Bouldin neighborhood just south of downtown in 1991 and has watched her property tax bill soar to $8,500 this year.

The collective's tax and spend policies are gentrifying
Gretchen Gardner out of her 23 year long residence.

“It’s not because I don’t like paying taxes,” said Gardner, who attended both meetings. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore. I’ll protest my appraisal notice, but that’s not enough. Someone needs to step in and address the big picture.”

Uh, that would be you lady, the brainless, navel gazing, power aggrandizing, reflexive voter who asked for this. Duh!!!!

Big Banks Bigger and Small Banks Fewer -- Thank You Federal Government

The lasting legacy of the federal government's response to the financial crisis in the world of Obama is that the big banks are bigger, more profitable and more powerful than ever and small banks are folding, consolidating and falling by the wayside in startling numbers. First, the question of size. 

FORTUNE -- One third of all business loans this year [in 2013] were made by Bank of America. Wells Fargo funds nearly a quarter of all mortgage loans. And held in the vaults of JPMorgan Chase is $1.3 trillion, which is 12% of our collective cash, including the payrolls of many thousands of companies, or enough to buy 47,636,496,885 of these NFL branded toaster ovens. Thanks for your business!

A lot has changed since the financial crisis. A number of large banks and Wall Street firms have disappeared. There are new regulations in the works meant to limit risky trading and bring derivatives that compounded the financial system's losses into regulated markets. Subprime lending has been coming back recently, but it's still a fraction of what it once was.

But at least one of the widely recognized causes of the financial crisis is not only still around, it has perhaps gotten worse. By every measure I can think of, and I have tried a bunch, the big banks are bigger than they were five years ago, at the dawn of the financial crisis.

The six largest banks in the nation now have 67% of all the assets in the U.S. financial system, according to bank research firm SNL Financial. That amounts to $9.6 trillion, up 37% from five years ago. And the big banks seem to be getting better at acquiring assets all the time. The overall growth of assets in the system in the same time is up just 8%.

The biggest bank in the nation, JPMorgan (JPM), has $2.4 trillion in assets alone -- the size of England's economy. And JPMorgan is seven times larger than the nation's No. 10 bank U.S. Bancorp (USB), which itself has $350 billion in assets -- along the lines of Austria -- and at this point is probably part of the TBTF club as well. Also way up: Profits. The four biggest banks in the U.S. alone, which along with JPMorgan include Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC), made collectively nearly $45 billion in the first six months of the year, nine times what those same banks made five years ago.

Assets have grown more than many other size metrics. But across the board, nearly every measure of the big banks' size is up. In terms of loans, according to FDIC data, 42% of all loans outstanding by U.S. banks come from the five largest. That's up from 38% before the financial crisis. The four biggest banks in the nation employ just over 1 million people. That's up from around 900,000 just before the financial crisis.

And those big banks have less competition. Just over 1,400 banks have disappeared in the past five years. About 485 failed. The rest were merged into other banks.

Even though small banks were not responsible for the financial crisis, they are being regulated out of existence by the Dodd Frank regulatory regime. The Obama administration adores big banks.




http://research.stlouisfed.org/fred2/series/USNUM


The explanation for the sharp and continued downward trend in the number of small banks is the impact of fixes that the Democrats installed, ostensibly, to punish big banks and to protect us from their misdeeds. Here is what is happening instead.

In a period when low interest rates are squeezing small banks, the costs of adhering to new regulations are taking a toll. Executives from at least a half-dozen small banks that have agreed to be acquired in recent months said the increasing regulatory burden was a factor in their decisions.

The executives said the new rules aren't scaled for banks of their size. While the Dodd-Frank financial-overhaul law and other new rules were aimed at reducing the problems caused by big banks, small banks must deal with many of them as well, and the costs don't necessarily get lower as the banks get smaller.

"When they created 'too big to fail,' they also created 'too small to succeed,'" said Dan Baird, chief executive of Capital Funding Group Inc., which last October sold its CFG Community Bank, a Maryland bank with $481 million in assets, to MVB Financial Corp.

When we went up to Kalispell for the annual shareholders meeting of Glacier Bancorp in April the CEO said:

The wave of new regulations continues at a mind boggling pace. Banks had to interpret, implement and train on 16,000 pages of new rules just in 2013 alone. Dodd/Frank is simultaneously increasing the regulatory burden for banks while restricting revenues. We are beginning to see numerous community banks look for strategic partnerships in order to avoid the costs and constraints of complying with the new regulatory environment -- good news for us. 

But not good news for community banks, which are being gobbled up one after another by their larger, more prosperous competitors.

Carry on. Pay no attention. Concentration of power and control in a fortunate few continues to grow. Good luck to all.

Liberal Flight

People cast ballots with their fingers and hands. But their ultimate vote is with their feet.

There are states in this country that are magnets.  They attract. There are other states that repel. Let's look across this great country of ours and look at the real election returns, net moves in and out -- and compare those returns to ballot box voting.

Over the last decade the state that people most wanted to go to was Texas, followed in order by Florida, then North Carolina, New Mexico and Georgia.  These are states with right leaning to moderate political tilts. You need to go all the way down to Washington (number 9) and Oregon (number 11) to find states with a dramatic leftward tilt that actually attract net positive migration.

On the other hand, the top three out-migration states are New York, California and Illinois. These states were landslide supporters of Barack Obama in the last presidential election,  Their representation in Congress tilts Democratic almost 3 to 1.  Yet these are states that people do not want to stay. Abandonment is the rule in liberal America, not the exception.

The liberal out-migration slant runs through the top ten (or perhaps more properly, bottom ten) with the exception of Louisiana. Louisiana's out migration occurred in the two years after Hurricane Katrina.  It was caused by nature (despite what megalomaniacs like Al Gore tell you), not by man. If it were not for Katina, Rhode Island, despite its tiny size, would have slipped into the top ten out migrators, and there would have have been a left leaning clean sweep.

I would not advise the citizens of Oregon and Washington states to feel smug and secure. They've been blessed with some extraordinary geographical advantages and have fed off of entrepreneurial success stories that are now decades old and running their course. Liberal political programs are step-by-step, bit-by-bit, destroying economic incentive and opportunity in the Pacific northwest, as elsewhere.  It is just a matter of time.

Good luck to all.

Obama Uses His Pen -- To Eliminate Jobs

Barack Obama wags his pen -- the dude is in charge!

When Congress wouldn't salute smartly and go along, Barack Obama used his pen to establish a new federal minimum wage for work on government and government sponsored or regulated contracts. He ratcheted minimum pay from $7.25 to $10.10 per hour. That is a 39 percent increase, which anyone who has even passing knowledge of basic economics or business finance knows, will make many operations that are dependent on low wage, unskilled labor unprofitable, put them out of business and inhibit new business growth altogether.

Sure enough, when Dear President's penmanship wrought and wrote down into military bases, their eateries, one after another, began to close down. In late March it was reported:

Six restaurants located on military installations, including three McDonald’s outlets and two name-brand eateries, have closed recently or are planning to shortly, with new minimum wage requirements for workers on federal contracts believed to have played a role in the decisions.

Last week McDonald’s restaurants closed at Naval Weapons Station Charleston, S.C., and at Naval Support Activity, Bethesda, Md.; a third McDonald’s will close next week at Naval Base Kitsap-Bremerton, Wash. A fourth restaurant, I Love Country, has notified Navy Exchange Service Command that it will close next week at Naval Station Pearl Harbor, Hawaii, reported Army Times.

Two other contractors, a sandwich eatery and a pizza parlor, have asked to terminate their Army and Air Force Exchange Service contracts to operate at two other installations.

These decisions most likely are related to Labor Department rules governing fast food workers on federal contracts, along with a recently signed executive order increasing the minimum wage for employees working on new federal contracts beginning Jan. 1, a source told the publication.

United States soldiers patronizing a McDonald's in Kuwait.

The Labor Department rules, issued last fall, require federal contractors operating under the Service Contract Act to pay fast food workers a higher minimum wage, as well as additional health and other benefits. It is not yet clear what the impact of President Obama’s executive order will be for contracts on military installations. It will increase the minimum wage for all federal contract workers from $7.25 to $10.10.

These closings “are the tip of the iceberg,” the source told Army Times. “I don’t think anybody has realized what the far-reaching effects of this will be.”

The shutdowns and job losses prompted a response and rebuke from the Navy:

More closures may come unless relief is granted. Navy and Marine Corps exchange officials estimate that up to 390 fast food concession operations would close on installations across the U.S. and its territories, which would result in the loss of jobs for nearly 5,750 employees, according to an April 8 letter to Labor Department officials signed by Russell Beland, deputy assistant secretary of the Navy for military manpower and personnel, asking for exemption from the wage regulations.

These contracts are negotiated for different bases at different times, so the effects will be seen incrementally. The Navy and Marine Corps exchange systems already have suspended 74 contracts for “new concepts,” according to the Navy letter.

Many family members and veterans are employed by the fast food restaurants.

Officials of the two exchange services estimate a combined loss of about $27 million a year in profits associated with food service sales alone. The companies that build and operate the restaurants on base make payments to the exchange systems.

This was a lose, lose, lose deal as is so normal when the federal government intervenes in business decisions and interferes with markets. I pray someday that we have a president again who worked real jobs, for real businesses, in the real world, for an actual living.

For now, at least, the Department of Labor has found a well of disappearing ink.

No need to bid adieu to that Big Mac. The U.S. Department of Labor is temporarily exempting fast food restaurants on Navy and Marine Corps installations from new minimum wage rules that led to the closure of McDonald's restaurants on several bases.

Time will tell if this is the last chapter or Obama will author more writs to show employees the door.

A Blog I Would Like to Write

Sometimes I think about writing a blog that focuses more on policy issues, such as putting tight and responsible reins on fiscal and monetary policy, limiting government to its essential purposes, promoting fair and growth oriented tax policies, managing and demanding efficient provision of government services, freeing the economy from the crippling weight of unpredictable, confusing, overlapping, burdensome and excessively intrusive regulatory regimes, constraining the police state and ending the militirization of police, putting an end to crony capitalism and the pernicious partnerships that have arise in recent years among the government and the nonprofit and union sectors, reforming entitlements, aligning defense planning and expenditures strategically, stopping centralized government control and management of the economy, and taking on and breaking down virtually all concentrations of power, whether in government, finance, business or elsewhere. All the problems in these areas are getting bigger with each passing day.

But others do much of this writing incredibly well. I pipe up from time to time when I believe I have an unique experience or can offer a fresh perspective. Or sometimes I opine a bit ahead of the game. One of my best such experience-based posts is one I wrote about lobbyists (It's That Fella Across the Street) which highlighted my personal experience living inside the Beltway, where it seems there is a lobbyist at every corner, or at least across the street. I once lived across the street from the chief lobbyist for Fannie Mae (a Republican who freely acknowledged that is what he did), and, another time, lived across the street from the chief lobbyist for the Obamacare website contractor (a Democrat who denied he was a lobbyist -- ethics have careened downhill in the era of Obama). Washington, DC is run by lobbyists and the special interests they represent, much much more than most of you will allow yourselves to understand.  

Listed at the bottom of my blog is one of my favorite blogs, the "Growls" -- authored by a gentleman by the name of Tim Wise, who is pretty much a one man show, challenging fiscal excess, insider dealing and regulatory overreach in my former residence of Arlington, Virginia. He operates under the aegis of the Arlington County Taxpayers' Association (ACTA).

Arlington is across the Potomac River from DC. It is top five among counties nationwide in household incomes, and is awash in the federal government spending bubble. Seldom has so much self importance, and such an incredibly high sense of entitlement, been concentrated in a single place.

Arlington's residents include federal contractors and consultants, high level federal employees (grade inflation is rampant in the DC metro area), lobbyists and lawyers who all feed, in one way or another, at the federal trough. Commercial real estate is huge in Arlington, with the primary tenants being various federal government agencies and bureaus, and contract operations serving the same. Rather than build to own, the federal tenants primarily lease properties that are built to suit their needs. Arlington has become a monument to rampant corporate cronyism. 

The crony capitalist landlords (primarily large REITs, like Vornado, Simon and Federal Realty Trust) and the local property tax man love these arrangements.  Federal tenants pay top rents; they are not low cost solution seekers. Commercial buildings use little in the way of municipal services, and attract jobs that relieve social service 
burdens.

Vornado/Charles E. Smith realty is the largest
commercial real estate operation in the DC
metropolitan area.  By market cap Vornado
is the third largest publicly traded US REIT. It
has $3.7 billion invested in Arlington, alone.

Federally occupied real estate is a cash cow that feeds rental income to the crony capitalists and property tax revenues and fees into the pockets of the liberal elites in Arlington County government. The elites praise themselves for their economic development prowess, when they are doing nothing more than feasting on federal largess -- largess that is being financed by sending our children and grandchildren into debilitating debt.

At the same time, there is not a federal funded grant program or project that escapes Arlington's notice -- its federally employed citizens make sure of that. There is no more aggressive, knowledgeable and successful seeker of federal funds than Arlington County, Virginia. Last year we blogged on the million dollar bus stops. DC metropolitan area governments are sucking the federal treasury dry in more ways than you can count.

Many of the the Growls posts capture the local flavor of spending without limit.  Other are more oriented to the national picture.

One of the Growls most recent posts links to a local newspaper editorial that concludes as follows:

We live with the delusion that the government serves the public, not the other way around. But taxpayers just never seem to be the top priority when there’s extra money on hand.

Earlier this week, The Growls quoted from "A Thought on the Morality of Progressive Economics" published in The American Spectator.

"Far too many Americans behave as if government spending is “free money,” as if there is a free lunch if it’s paid for by Uncle Sam. But few things are more effective arguments with younger and slightly liberal voters than “You and your kids are going to pay for all this. They are bankrupting your future, and your children’s future. Isn’t that wrong no matter how they try to justify it?” 

"Again, this isn’t a technical point; it’s a moral one: It is simply wrong to burden our children and their children with opportunity-destroying debt incurred in pursuit of buying votes, or even of buying “equality” or “free” birth control. 

"If your parents created debt that was somehow passed down to you, even if it originated with a good intention of theirs (but not one to benefit your family), how would you feel about it, especially when paying off the debt meant you couldn’t buy a house or couldn’t put your own children through college? 

"It’s not just unfair or rude; it’s wrong. And it is exactly what every “liberal” economic policy is doing to YOUR future and your children’s future. 

"THIS is the argument that Republicans and conservatives fail to make in a convincing and repeated way. (Repetition is as important as the argument itself because people almost never take to heart a message they hear only a few times.)" (Emphases in the original)

~ Ross Kaminsky

A few days earlier the Growls wrote on the erosion of the United States Constitution, this time quoting from The National Review.

"The administration of Franklin D. Roosevelt dealt our Constitution a grave blow. When the Supreme Court rubber-stamped the New Deal, the framework of limited and enumerated federal powers — which shaped the very structure of our Constitution — was swept away. Federal power over every aspect of our lives has been expanding ever since, with no end in sight.  

"Conservatives understand that much. What they don’t yet understand iswhy this happened. That’s a problem. After all, how much good can a doctor do if he doesn’t understand what’s making the patient sick? In recent years, luminaries of constitutional history such as Richard A. Epstein and Michael Greve have made important strides in helping us understand how the progressive movement of the last hundred years has ravaged our Constitution. Some of their insights are startling.  

"The great internal danger to the democratic form of government is its vulnerability to capture by political elites. James Madison called them “factions”; today we call them “special interests.” The Constitution was designed to protect against them, chiefly by limiting the federal government’s power and guaranteeing strong property rights and freedom of exchange.  

"The Bill of Rights contains important protections. But the greatest protections the Constitution provides are the structural limitations it places on federal power. In key areas, those limitations have eroded, leading to the very expansion of federal power that opponents of the original Constitution warned about during the ratification debates."

~ Mario Loyola, Senior Fellow, Texas Public Policy Foundation

Growls finds and shares the trenchant quotes and passages from throughout the literature. Tim Wise says what needs to be said and present the messages better than I ever can or will. Check in with the Growls and you will be informed and enlightened.  Ignore the Growls and like-minded sources and you will never rise above being one of the sheeple. Check it out. The man actually researches and uses data from  time to time.

Arlington County Virginia, 2013 Annual Financial Report (note the doubling of assessed values during a time period when other markets have been relatively flat)

Employment Dropping

In the day when I kept an economic release date calendar on my desk and would pore over the employment reports within minutes of their 8:30 am release, I would have noticed this a month or two back. As is, thanks to Edward Lazear of Stanford University and the Hoover Institute for adding up the numbers and publishing the analysis. 

Most commentators viewed the February jobs report released on March 7 as good news, indicating that the labor market is on a favorable growth path. A more careful reading shows that employment actually fell—as it has in four out of the past six months and in more than one-third of the months during the past two years. 

Job creation rose from an initial 113,000 in January (later revised to 129,000) to 175,000 in February. The January number frightened many, while the February number was cheered—even though it was below the prior 12-month average of 189,000.Although it is often overlooked, a key statistic for understanding the labor market is the length of the average workweek. Small changes in the average workweek imply large changes in total hours worked. The average workweek in the U.S. has fallen to 34.2 hours in February from 34.5 hours in September 2013, according to the Bureau of Labor Statistics. That decline, coupled with mediocre job creation, implies that the total hours of employment have decreased over the period. 

 ****

Here's a full explanation. The job-equivalence number is computed simply by taking the total decline in hours and dividing by the average workweek. For example, if the average worker was employed for 34.4 hours and total hours worked declined by 344 hours, the 344 hours would be the equivalent of losing 10 workers' worth of labor. Thus, although the U.S. economy added about 900,000 jobs since September, the shortened workweek is equivalent to losing about one million jobs during this same period. The difference between the loss of the equivalent of one million jobs and the gain of 900,000 new jobs yields a net effect of the equivalent of 100,000 lost jobs.

****

The improvement in average weekly hours worked was reason for celebration after the recovery began. The recent decline is cause for concern. It gives us a more accurate but dismal picture of the past two quarters.

Straight from the Department of Labor here is the graph that illustrates both the tail end of the economic recovery and the recent concerning decline.

See http://data.bls.gov/cgi-bin/surveymost?ce to review the data yourself.

And so it goes.

Student Loan Program Running Amok

Come one, come all, get money without standards, merit or real recourse. Borrow government money to live on. Once you get into a hole too deep to get out then defer the debt bomb by borrowing more. All the while, grease the pockets of Elizabeth Warren's cronies -- we have talked about this before.

The latest data are highlighted in today's Wall Street Journal.

The debt continues to skyrocket, now near $1.1 trillion. Student loan delinquincy rates are bumping up against twelve percent, which understates the degree of the problem due to hundreds of billions of repayment obligations being held in abeyance.

Today's story is that student loans are being used to pay for non-educational needs (I worked to support myself, except for a few months, throughout my seven year college career, and had an excellent, even outstanding academic record). And students are re-enrolling to rack up new debt in order to suspend paying previously incurred debt that could not be paid. The student loan program is throwing bad money after bad.

Some Americans caught in the weak job market are lining up for federal student aid, not for education that boosts their employment prospects but for the chance to take out low-cost loans, sometimes with little intention of getting a degree.

Take Ray Selent, a 30-year-old former retail clerk in Fort Lauderdale, Fla. He was unemployed in 2012 when he enrolled as a part-time student at Broward County's community college. That allowed him to borrow thousands of dollars to pay rent to his mother, cover his cellphone bill and catch the occasional movie.

"The only way I feel I can survive financially is by going back to school and putting myself in more student debt," says Mr. Selent, who has since added $8,000 in student debt from living expenses. Returning to school also gave Mr. Selent a reprieve on the $400 a month he owed from previous student debt because the federal government doesn't require payments while borrowers are in school.

The essential flaw is that colleges and universities decide who gets the money and how much. Yet they have a conflict of interest because they are ultimate recipients of most of the trillion dollars of loan money outstanding.  There is no recourse available against the colleges and universities when the loans are not repaid.    

If this system is to be retained the institutions who approve and administer the loans should be required to cover the defaults and backstop delinquincies.   That will clean up the mess, pronto.

Stuff It Oregon -- Time To Reverse Engineer Generational Debt

The lying, loony, liberal scum (sorry for the redundancy) latest give away scheme is to open up a $500 savings account (dubbed a universal savings account) for every baby that is born in the United States (and ultimately, Bolivia, El Salvador, Belarus, Indonesia and Bangladesh as well, no doubt). Ron Wyden (D - Oregon), who hopes to soon become Chairman of the Senate Finance Committee, is the mouthpiece.

Ron Wyden and his wife Nancy at Yankee Stadium.

Wyden's family lives in New York while he
represents Oregon in the United States Senate.

Speaking earlier this month at the University of Southern California School of Law and the Urban-Brookings Tax Policy Center, Wyden said universal savings accounts for newborns would “really put a dent in the poverty rate.” He described the country’s current tax code as a “dysfunctional, rotten mess of a carcass.” 

These hypocrites cannot open their mouths without lying. To review wacko Wyden's proposal on his own terms, let's look how the the federal government defines the poverty rate. It varies by household size.

 2013 Federal Poverty Guidelines

Household Size	100%	133%	150%	200%	300%	400%
1	$11,490	$15,282	$17,235	$22,980	$34,470	$45,960
2	15,510	20,628	23,265	31,020	46,530	62,040
3	19,530	25,975	29,295	39,060	58,590	78,120
4	23,550	31,322	35,325	47,100	70,650	94,200
5	27,570	36,668	41,355	55,140	82,710	110,280
6	31,590	42,015	47,385	63,180	94,770	126,360
7	35,610	47,361	53,415	71,220	106,830	142,440
8	39,630	52,708	59,445	79,260	118,890	158,520
For each additional person, add	$4,020	$5,347	$6,030	$8,040	$12,060	$16,080

Source: http://www.familiesusa.org/resources/tools-for-advocates/guides/federal-poverty-guidelines.html

When a baby is born, a household needs to generate an additional $4,020 in income per year to stay above the poverty line. That accumulates to $72,360 by the time a child reaches age 18 and is no longer considered a minor.  Five hundred dollars puts a dent in that? It barely mars, in fact it doesn't even scratch the surface of the actual challenge. The only way to put a dent in the poverty rate is for the parents to get jobs, real jobs.

Wyden's proposal is a shell game. This country has no money to give anyone. Indeed, when every child is born today he or she assumes $55K in debt. 

A rational and reasonable proposal would take on eliminating that diabolic inheritance. Let's up the $500 to a still modest (relative to the inherited debt) but easily achievable $1,200 per birth, and reduce the federal deficit by that amount for each child born. Here is how the math works.

Live birth data form CDC.

Even though the annual contribution is modest ($4.7 billion the first year), by the time today's babies reach the age of being fully privileged adults, more than a trillion dollars will have been shaved off the accumulated debt. That's a small down payment on eliminating the immense burden that our spendthrift society is passing along to the next generation.

Workforce Participation Rates

If I hear the lazy louts in the mainstream media or the lying idiots on the left claim one more time that stagnant employment and declining workforce participation rates are caused by an aging population and voluntary retirements, I don't know whether to scream or puke.  This country is being led into a pit by a bunch of lies and liars.

Pathetic Job Numbers

The print, borrow and spend economy is not real; it's not working sheeple. We are living a lie and running an abject failure.

Today's job numbers were south of pathetic. New payroll jobs numbered 74,000 (less than half the pace needed to keep up with population growth) and the unemployment rate "dropped" to 6.7 percent, not driven by employment but by people giving up on a life of work. We have not had this low of a labor participation rate since the halcyon days of Jimmy Carter. 

People are discouraged from looking for work and cannot find decent jobs when they do. And Dear President announced this will be the year of tackling income inequality, while at the same time doing everything in his power to control, regulate and undercut the real economy and to subsidize sloth.  

President Barack Obama has appointed Janet Yellen (center) to continue four more years the money printing regime that robs the real economy of vitality and drives enormous increases in income and wealth inequality. 

We uncorked the lid on Obama's pious absurdity last April.

There is a fool born every minute. Obama thanks God for that.

It is shocking how foolish the American people are. They support Barack Obama and his policies because he supposedly promotes middle class values and has the interests of the 99 percent at heart. The reality is totally different. I am befuddled, perplexed, dumbfounded and dismayed by the ignorance and the gullibility of the average American.

The Pew Research Center released a new study this week which reveals the obvious – that Obama’s print (money), borrow (money) and spend (money) policy triad favors people with money -- the uppercrust. Obama is a money lever guy, not an economic leader. The money changer in chief doesn't understand or promote a value driven economy. Real exchanges of actual goods and genuine services drive value and build a strong, broad based and resilient economy and sustainable economic growth. The demand and production led economy that we should be building has attributes that reach into every household.

I said,

In the world of Obama wealth disparity has not merely skyrocketed among economic groups, disparities have also soared to record highs levels between whites and blacks, and whites and Hispanics.  And those poor old seniors, the folks on whose behalf that AARP incessantly whines, they are gaining dramatically compared to the young people who actually work, and incomprehensibly vote for and support Obama.

The right overarching strategy is the real economy, yes, and the Federal Reserve Board and banking system paper-based (in the modern era, digital currency) economy, no. Strategy execution requires a federal bureaucracy that thousands of times a day in dozens of different ways makes every small step that works in the right direction, when Obama's regulatory administrative behemoth does exactly the opposite.

You have gotten what you voted for.  Good luck to us all.

Get Competence Into Government

Our first term Congressman is 5th generation Montanan, Steve Daines, formerly of Proctor and Gamble, Daines Construction, and RightNow Technologies (Oracle Corporation). He is probably the most competent and grounded in real world economic experience member of the United States Congress. He has announced his candidacy to replace retiring Senator Max Baucus who played the lead role in managing the passage of the cost increasing, choice reducing spaghetti mess known as Obamacare through the United States Senate. In the Senate races coming up this fall there is probably no one more capable of helping our country get back on the right track than Steve Daines. The news story is here.

Congressman Steve DainesKTVQ story on my meeting with Crow Tribe leaders yesterday-- it's exciting to see the potential that exists on the Crow Reservation for responsible, job-creating energy development. Now it's time for Washington to get out of the way and allow the Crow Tribe to develop its resources and create good jobs for the Crow people.Crow leaders tell Congressman tribe needs jobs | KTVQ.com | Q2 | Billings, Montana
ktvq.com
CROW AGENCY - Congressman Steve Daines visited the Northern Cheyenne and Crow reservations, on Saturday.Unlike ·  · Share · 1421 · about an hour ago · 

Coal in Our Offspring's Stocking

$17 trillion debt bomb

Looks like the Democrats and establishment Republicans are conniving around the Christmas Tree to gift the debt bomb down the road and to take joyous credit in keeping open an outsize, inefficient and incompetent government that they want, but are unwilling to pay for. It's so easy when they can pass the bill for the largess along to the children and grandchildren.

After more than two years of constant crisis, the emerging agreement amounts to little more than a cease-fire. Republicans and Democrats are abandoning their debt-reduction goals, laying down arms and, for the moment, trying to avoid another economy-damaging standoff.

The campaign to control the debt is ending “with a whimper, not a bang,” said Robert Bixby, executive director of the bipartisan Concord Coalition, which advocates debt reduction. “That this can be declared a victory is an indicator of how low the process has sunk. They haven’t really done anything except avoid another crisis.”

Budget negotiators Paul Ryan and Patty Murray

And no doubt Dear President will sign the budget bill, offering encomiums to the, you scratch my back and I'll scratch yours, negotiators who avoided tough battles and difficult decisions.  

All to avoid "another crisis"?  If anyone bothered to notice the economy didn't even hiccup in October despite the extended government shut down.

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for October 2013. In the past month, the indexes increased in 44 states, decreased in four states, and remained stable in two, for a one-month diffusion index of 80. Over the past three months, the indexes increased in 45 states and decreased in five, for a three-month diffusion index of 80. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Fed’s U.S. index rose 0.2 percent in October and 0.7 percent over the past three months.

Not to mention we told you so and so. We are living on false premises and borrowed time. Good luck to all.