CBO Deficit Plan

Which Countries own our Foreign Securities?

This survey shows which countries hold our Securities.  Not surprisingly China tops the list, followed by Japan.  The top five is rounded out by United Kingdon, Caymen Islands and Luxembourg. 

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Saul Alinsky Tactics

"Tactics are those conscious deliberate acts by which human beings live with each other and deal with the world around them. ... Here our concern is with the tactic of taking; how the Have-Nots can take power away from the Haves." p.126
Always remember the first rule of power tactics (pps.127-134):
1. "Power is not only what you have, but what the enemy thinks you have."
2. "Never go outside the expertise of your people. When an action or tactic is outside the experience of the people, the result is confusion, fear and retreat.... [and] the collapse of communication.
3. "Whenever possible, go outside the expertise of the enemy. Look for ways to increase insecurity, anxiety and uncertainty. (This happens all the time. Watch how many organizations under attack are blind-sided by seemingly irrelevant arguments that they are then forced to address.)
4. "Make the enemy live up to its own book of rules. You can kill them with this, for they can no more obey their own rules than the Christian church can live up to Christianity."
5. "Ridicule is man's most potent weapon. It is almost impossible to counteract ridicule. Also it infuriates the opposition, which then reacts to your advantage."
6. "A good tactic is one your people enjoy."
7. "A tactic that drags on too long becomes a drag. Man can sustain militant interest in any issue for only a limited time...."
8. "Keep the pressure on, with different tactics and actions, and utilize all events of the period for your purpose."
9. "The threat is usually more terrifying than the thing itself."
10. "The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition. It is this unceasing pressure that results in the reactions from the opposition that are essential for the success of the campaign."
11. "If you push a negative hard and deep enough, it will break through into its counterside... every positive has its negative."
12. "The price of a successful attack is a constructive alternative."

13. Pick the target, freeze it, personalize it, and polarize it.  In conflict tactics there are certain rules that [should be regarded] as universalities. One is that the opposition must be singled out as the target and 'frozen.'...

     "...any target can always say, 'Why do you center on me when there are others to blame as well?' When your 'freeze the target,' you disregard these [rational but distracting] arguments.... Then, as you zero in and freeze your target and carry out your attack, all the 'others' come out of the woodwork very soon. They become visible by their support of the target...'

     "One acts decisively only in the conviction that all the angels are on one side and all the devils on the other." (pps.127-134)

GAO Report - Debt Limit

Delays Create Debt Management Challenges and Increase Uncertainty in the Treasury Market

Why GAO Did This Study

GAO has prepared this report to assist Congress in identifying and addressing debt management challenges. Since 1995, the statutory debt limit has been increased 12 times to its current level of $14.294 trillion. The Department of the Treasury (Treasury) recently notified Congress that the current debt limit could be reached as early as April 5, 2011, and the Congressional Budget Office (CBO) projects that under current law debt subject to the limit will exceed $25 trillion in 2021.

This report (1) describes the actions that Treasury traditionally takes to manage debt near the limit, (2) analyzes the effects that approaching the debt limit has had on the market for Treasury securities, and (3) describes alternative mechanisms that would permit consideration of the link between policy decisions and the effect on debt when or before decisions are made. GAO analyzed Treasury and market data; interviewed Treasury officials, budget and legislative experts, and market participants; and reviewed practices in selected countries.

What GAO Recommends

To avoid potential disruptions to Treasury markets and help inform fiscal policy decisions in a timely way, Congress should consider ways to better link decisions about the debt limit with decisions about spending and revenue.

Treasury provided technical comments on a draft of this report, which GAO incorporated as appropriate.

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The Impact of Pensions on State Borrowing Costs

This is a very comprehensive article on State Borrowing Costs.  It is published by and this is their mission Statement :

The Center for Retirement Research at Boston College was established in 1998 through a grant from the

Social Security Administration. The Center’s mission is to produce first-class research and forge a strong

link between the academic community and decisionmakers in the public and private sectors around an

issue of critical importance to the nation’s future.  To achieve this mission, the Center sponsors a wide

variety of research projects, transmits new findings to a broad audience, trains new scholars, and broadens

access to valuable data sources. Since its inception, the Center has established a reputation as an authoritative

source of information on all major aspects of the retirement income debate.

I have not read the entire article -- its quite lengthy and very detailed.  This is the conclusion.

In conversation, state officials frequently indicate that they are concerned about the impact of their pension

decisions on their bond ratings. Our results indicate that, while the rating agencies say they consider pensions,

pension funding does not have a statistically significant effect on bond ratings. In contrast, it does

have an effect on the spread, albeit modest – 3 to 7 basis points. That result is not surprising given that

pension expense accounted for only 3.8 percent of state budgets in 2008. The magnitude could increase,

however, to the extent that pensions become an increasingly important component of state budgets.

Full article

Illinois Borrows to pay annual pension contribution

wsj.com/article/SB10001424052748703775704576162350542651930.html

On Freddie Mac and Fannie Mae

http://www.treasury.gov/press-center/press-releases/Pages/tg1059.aspx

Above is the link to a summary of the Obama plan to wind down Freddie Mac and Fannie Mae.  It is strong plan and deserves attention. 

U.S.' Least, Most Educated Most Likely to Find Jobs in 2010 - Those with some college fared worst

U.S.' Least, Most Educated Most Likely to Find Jobs in 2010 - Those with some college fared worst

by Dennis Jacobe, Gallup Chief Economist:

"Unemployment improved the most between January 2010 and January 2011 among Americans with a high school education or less, declining to 13.6% from 15.4%, and among those with postgraduate work, declining to 3.8% from 5.0%. The data also suggest there are benefits associated with completing college. The unemployment rate of 5.8% among college grads is much lower than the 10.9% among those with some college. And unemployment among college grads improved slightly over the past year, while staying flat among those with some college. Year-over-year unemployment, as measured by Gallup without seasonal adjustment, improved to 9.8% in January 2011 from 10.9% in January 2010."

Topic(s): Government Documents

Deficit Reduction Commission

This is the link to the Defict Reduction Commssion Report. 


http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf


A couple of excerpts bear quoting here.  The first is the plan summary.  This is as follows:
We propose a six-part plan to put our nation back on a path to fiscal health, promote economic growth, and protect the most vulnerable among us. Taken as a whole, the plan will:

My Favorite Podcasts

American Public Media:  Marketplace
American Public Media:  Marketplace Money
The Economist
The Economist: Editors Highlights
F1 Minute
Morningstar.com: Investing Insights
NPR: Planet Money
The Ray Lucia Show
Stuff You Should Know

Robert Reich Quotes

NPR 12/15/10

We need a new WPA to put the unemployed back to work. And an infrastructure bank to create jobs repairing the nation's crumbling roads, bridges, and water and sewer systems. Exempt the first $20,000 of income from payroll taxes, and apply payroll taxes to incomes more than $250,000. Extend the Earned Income Tax Credit wage subsidy all the way up through the middle class.

Por this by raising marginal income taxes on millionaires. Under President Dwight Eisenhower, the top marginal rate was 91 percent. I'm not advocating this, but a millionaire marginal tax of even 70 percent would a go a long way toward reducing the nation's future budget deficit.


NPR 2/9/11 (Full Text)
So if the individual mandate to buy private health insurance gets struck down by the Supreme Court or killed off by Congress, I'd recommend President Obama immediately propose what he should have proposed in the beginning -- universal health care based on Medicare for all, financed from payroll taxes.

Feb. 23, 2011 (Full Text)
The ceiling on income subject to the Social Security tax would need to be raised to $180,000. Do that and Social Security's long-term problem is solved.

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