Which Lie am I Supposed to Believe?

If you’re old enough, maybe you’ll remember this…

I think of it every time time a politician threatens to lay off police and firemen if they have to cut the budget, or we’re told how many poor children will be thrown on the street without a tax increase, etc.

The latest not-so-subtle threat to punish the innocent to extract financing for the guilty came last week when our Community Organizer-in-Chief ominously stated that he could not guarantee that Social Security checks would go out if the House Republicans  refused to raise the debt ceiling on his terms.  In other words, “raise taxes or we’ll starve these senior citizens.”

The federal government will receive about $200 billion in funds in August without borrowing.  So Obama and Treasury Secretary Geithner apparently plan to send money for ethanol subsidies, welfare recipients, Planned Parenthood, high-speed rail, and myriad other hogs at the public trough; instead of to seniors depending on Social Security and members of the armed services.

Naturally, Republicans will be blamed.  No news there.

The interesting part is that, as I’ve mentioned before, if you stick around long enough, liberals will always tell you the truth.  On accident.

For years, some people (including me) have maintained that the Social Security “funds” consist of worthless I.O.U.’s that the federal government wrote as they stole the money.  This always brings indignant accusations of needlessly scaring seniors and sanctimonious proclamations as to the rock solid safety of those notes.

The official Social Security web site even states:

Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government... The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

Well, my goodness.  The full faith and credit of the U.S. Government means those will always get paid before any other obligations (just like the debt we’re being told we’ll default on).

So here’s what the question I’d like answered:

Mr. President, when you indicated that Social Security checks may not go out simply in deference to your preferred constituents, was that

A) just a cynical lie to scare people into supporting more borrowing in our continued rush towards complete fiscal insolvency, or

B) an official admission that the Social Security funds actually are insolvent and that “the full faith and credit of the U.S. Government” is meaningless?


It was a trick question.  The correct answer is:

C) Both of the above.

Posted in Economics & Politics | 3 Comments

August 2, 2011 — Doomsday or just Tuesday?

Well, we’re only a couple of weeks out until budgetary Armageddon.  Total financial collapse.  A world economic catastrophe unlike any ever seen.

Or not.  It depends on who you ask.

We’re getting ominous warnings from the Congressional Democrats, the Federal Reserve, Treasury Secretary Timmy “TurboTax” Geithner, and the mega ratings agencies (Moody’s, S&P); which could give one pause.

However, that assumes that the brilliant financial minds that missed Enron, WorldCom, the internet bubble and collapse, Fannie Mae, Freddie Mac, the PIIGS meltdown, the housing bubble and collapse, the Countrywide scam, the Lehman collapse, Bernie Madoff, the Bear Sterns collapse, the AIG debacle, and the dollar bubble and impending collapse — in other words, every major financial event of the last decade — are going to get one right this time.

It could happen.  Just the sheer odds would tend to predict they’ll stumble onto a correct answer some day.  (And “missed” may not be entirely accurate.  More like “unindicted co-conspirators.”)

The aforementioned experts are correct in one sense.  Forcing the government to not spend money it doesn’t have and will never repay would cause economic havoc for all of the investment bankers, consultants, lobbyists, subsidized and bailed-out CEO’s, six-figure government bureaucrats, and the sundry non-profit and other organizations and special interests that serve as loyal conduits and money-launderers for these elites.   And you can bet they’re intent on not letting that happen.

Realistically, though, with over $60 trillion in unfunded liabilities and annual revenue of about $2 trillion (against annual spending of $3.5 trillion plus a couple more trillion of added unfunded liabilities), we are far past the point where this could have been addressed in ways that won’t involve words like “default,” “hyperinflation,” and/or “collapse.”

So I’m betting that enough Republicans will be able to overcome their principles and find some way to reach a bipartisan compromise to kick the can down the road just one more time.

The bottom line is just what I’ve said all along:

The situation is hopeless, but not serious.





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High-speed fail

At a Springfield press conference last Thursday, U.S. Secretary of Transportation Ray LaHood said that there would be high speed rail service between Chicago and St. Louis within five years, proving the old adage that it’s better to keep one’s mouth shut and be thought a fool than open one’s mouth and remove all doubt.

This came as complete surprise to pretty much everyone in the world (the rail part, not the fool part).  We’re allegedly getting some kind of fast rail sometime, but even that’s years out.  No one had mentioned 160 mph train service before it apparently lept from LaHood’s fertile imagination and out across his lips.  Normally, those type of projects require sundry things, like a plan, budgets, surveys, environmental studies, engineering work, site acquisition work, etc. after they’re approved that take years before construction even begins, which takes more years still.

But according to Secretary LaHood, this is all going to happen, idea to turnkey, in five years.  I don’t know if he’s measuring that five years from when he thought of it, which must have been recently, or from when Illinois’ congressional representatives were informed about the idea, including Senator Dick Durbin, who apparently heard about it for the first time in the next day’s paper.

He then went on to brag that the Department of Transportation has spent $48 billion over the last two years and created 65,000 jobs.  Or just a tad under $370 thousand per year per job.  Illustrating once again why, as a Republican,  he’s always been the go-to guy when someone tries to say that only Democrats are profligate big government boosters who never met a problem they couldn’t turn into a disaster.

According to the story, he got a bit testy when asked about studies showing the whole high-speed rail program to be the boondoggle that it is, and stated that “I’ve had a front-row seat in making history.”

Considering where this train wreck is headed, one can only hope.


Posted in Economics & Politics | 3 Comments

Great idea! Then I’d like a bottle of thalidomide and a frontal lobotomy.

This was prompted by a May 25 article in the “Be Healthy” section of the local State Journal-Register.  This is a regular section of the paper that health-conscious readers can use to their advantage by carefully studying the information, then doing the opposite of what they’ve read.

This particular installment was optimistically titled “Gastric bypass surgery can lead to other health improvements,” and focused on the story of a local woman who’d shed 130 pounds after this extreme surgery.  The article then went on to claim that this surgery cures all sorts of other “comorbidities” of being obese; i.e., diabetes, high blood pressure, depression, arthritis, etc.  Wow.  What’s not to like about that?

Well, “dumping,” maybe.  That’s the term for how what remains of your digestive tract responds when you eat a meal of more than about a half of a cup or cup of food.  It’s pretty much exactly what it sounds like.  And that’s the name people who promote gastric bypass give it.

Here’s something interesting.   I looked up the diet people who have this surgery are instructed to follow.  You can check it out here.

It starts with a couple of days on a 2-3 ounce per meal liquid diet, and then a month on pureed meals, and another month on foods that have all been finely minced.  Then you can start on “regular” foods.  Except for any of these:

  • Nuts and seeds
  • Popcorn
  • Dried fruits
  • Sodas and carbonated beverages
  • Granola
  • Stringy or fibrous vegetables, such as celery, broccoli, corn or cabbage
  • Tough meats or meats with gristle
  • Breads

Oh, and nothing with much fat or sugar in it.  Ever.  For the rest of your life.  The total calories shouldn’t go over about 1,200 per day.

You’ll also need to take daily vitamin and calcium supplements.  A permanent diet that is so calorie restricted means you won’t be getting enough vitamins in your food.  Plus,  after ripping out the majority of your gut, what’s left won’t be able to extract much of the vitamins you are getting.  Also keep in mind that a number of essential vitamins and nutrients are only “fat soluble.”  But you’re not supposes to eat fat, remember?

The person in the article noted how much her mood had improved and she no longer needed to take anti-depressant or allergy pills.  Which makes perfect sense.  After all, she’s been on a high-fat diet for a year.  How’s that?  Well, since her surgery, she’s lost 130 pounds in a year, meaning her body has been utilizing just over a third of a pound a day of healthy saturated fat (about 1450 calories) — her own.  So if she’s ingesting 1200 calories  daily and using 1450 calories of stored fat, her diet is over 50% fat.

The new major restrictions on carb intake means her body isn’t dumping insulin into her system and forcing fat storage, so her body is burning it.  In fact, cutting out carbs, especially sugar (and even more especially fructose) tends to clear up all of those “comorbidities” mentioned earlier, without devastating your entire digestive system.

Unfortunately, if one does allow surgeons to second-guess what God and/or thousands of years of adaptation (take your pick) has created, after the stored body fat is consumed, there will no longer be a way to provide that fat that the body needs for the brain, bones, hormones, etc.   May want to hang onto the anti-depressant prescription.

Here’s what I think.  Before undergoing an irreversible “lobotomy” on your digestive system, maybe a person should spend a year on the post-bypass diet before going under the knife.

So, cut out all of the above-mentioned foods, including sugars, and keep your daily intake around 1200 calories.  If you eat more than a cup of food at one meal, chug a bottle of Milk of Magnesia to mimic that “dumping” effect.  To make it more realistic, get a friend to randomly pop up and make you down the laxative at times you can’t anticipate.

If you can do that for a year, I have a hunch you’ll be a lot thinner and won’t need surgery.  I doubt most people would be able to stick with it, however.  In more enlightened times, that would’ve been called a “starvation diet.”  Even when people go through with the surgery, which would technically mean no choice, there’s still a discouraging rate of weight gain, only now with a thoroughly compromised physiology.

Better yet, take most of the diet but add a few hundred calories of saturated fat.  You’ll still lose the weight and take care of those pesky comorbidities.  Plus, you won’t end up, like the person featured in the story, “terrified of eating even one cookie.”

Pass the bacon.

Posted in Diet & Nutrition | 5 Comments

Go smooth yourself, part II

Today’s SJ-R reported again on Governor Quinn and the Democrat-controlled legislature’s continuing efforts to borrow anywhere from six- to eight billion dollars for past due bills so they can get back to running up more bills they can’t pay.

There’s something I haven’t seen mentioned in any of the ongoing coverage of this maneuver, however, and the cognitive dissonance is making my head hurt. Here’s the pieces — maybe someone can explain how they fit together:

  • The Democrats are supported by the unions, including and especially the state employee unions.
  • As non-union state workers have been routinely getting left behind, almost every state employee except Quinn and Madigan are either in a union or trying to get in one. Quinn may be a little “iffy.”
  • The $8 billion in unpaid vendor bills is devastating Illinois businesses and care providers, but it’s peanuts compared to the unfunded state pension liabilities. The deficiencies — despite recent above-average investment returns and creative accounting (see”Go smooth yourself“, below) — are accelerating as assets are drawn down to pay benefits.
  • Illinois remains the state with the highest Cumulative Probability of Default on its bond obligations at 21% — within a whisker of Iraq, Egypt, and Lebanon. So, the market thinks there’s a one-in-five chance that Illinois will default on it’s debts, despite the fact that…
  • Illinois is constitutionally mandated to pay principle and interest on debt obligations before anything else. Anything.
  • Like pensions. The constitution defines pensions as a binding contract, but they’re still subordinate to bond debt.

So, please explain why the Democrats are intentionally switching billions of dollars of bills from behind, to in front of, pension obligations. And why aren’t the unions screaming?

In the meantime, I’ll just take a couple of aspirin, try not to think about it, and watch the show.

Posted in Economics & Politics | 2 Comments

Or, for a little more, you get 3 bedrooms near the golf course…

Here’s another case where a bit of math and common sense makes it easy to understand government.

The Springfield city council recently approved a project to build a 44 unit housing complex for $7 million.  If you’re not familiar with Springfield politics, it was pretty much pre-ordained that it would be given the go-ahead because neighborhood residents objected to it and the Planning and Zoning Commission recommended against it.

Of course, this isn’t a housing complex that some entrepreneur had decided there was a market for and wanted to build with their own financing.  This project will be government funded as they’re being built as permanent housing for people “at risk of being homeless.”

That funding works out to $159,090 per unit, and by unit they mean high-density single room efficiencies.  In Springfield, the median home price is around $105,000 — and those generally have two or three bedrooms and a yard.  Or, if we’d like to spare the homeless from lawn work, for about that same $159,000 there was a 3-bedroom condo listed for sale last week near Panther Creek golf course.

To recap, our insolvent government borrows money to give some company 50% above the median value of entire houses in a market in order to build one room units which they call, apparently without a hint of irony,  “affordable housing.”   To which one can only ask – for whom??

So it should be easy to understand that these boondoggles have almost nothing to do with helping out the poor and downtrodden members of our society and nearly everything to do with the people who will be getting in on that $7 million.  It won’t be the homeless, and it won’t be you or me.

Fortunately, the situation is hopeless, but it’s not serious.

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Experts 0, Nature 3

My brother once opined that we’d be much more advanced as a species if cognitive dissonance had immediate physical symptoms.  Think of how much stupidity we’d avoid if, for instance, when some economic simpleton said something like “our country just needs to borrow more money to spend so we won’t go broke,” they immediately got one of those “brain freeze” headaches like when you eat ice cream too fast.  Unfortunately, instead of holding their heads in agony and pleading for mercy, they get awarded Nobel prizes.

Besides wiping out nearly the entire economics profession, this genetic upgrade would also lay barren huge swaths of the nutritional science landscape.  Today’s SJ-R Health section focused on the very real food-health connection and an anti-inflammatory diet, but only the last sentence mentioned that “foods labeled ‘low-fat’ often remove fat and replace it with pro-inflammatory carbohydrates.”

Like the low-fat menus being force-fed to school kids now, which remove the fat their brains and bodies need to be healthy; then fill them up with grains and other carbohydrates; then wonder where all of the childhood obesity, diabetes,  ADD and autism is coming from.  That ought to make someone’s brain hurt.

You’d think it couldn’t get dumber, but you’d be wrong.  Besides removing saturated fat, which we need, and forcing in carbohydrates, which cause metabolic havoc, there is the third pillar of dietary dissonance – salt restriction.  The experts lecture us constantly to remove salt from our diets because they absolutely know it will raise our blood pressure and make our hearts explode.  Don’t they?

No they don’t, according to the results of an eight year study published in the Journal of the American Medical Association (cited by a reader on my brother’s web site).  Not only did they find no difference in hypertension onset among low-, medium-, or high-sodium level diets among nearly 3,700 participants; in fact, the participants with the lowest sodium intake were much MORE likely to die of cardiovascular disease.

The study wasn’t designed to explain this phenomenon, but one of the authors posits that since sodium is an essential nutritional requirement (much like fat and cholesterol), diets that limit sodium intake “activate some of the  systems that  conserve  sodium and they are known to have a negative influence on cardiovascular outcomes.”

So, when an expert tells you that you need to cut back on fats, eat “good carbs”, and throw away your salt shaker, just smile and realize that a merciful creator or evolutionary anomaly is keeping them from dying of a massive migraine.  Then finish your bacon.

Posted in Diet & Nutrition | 7 Comments

Go smooth yourself

Several months ago, the SJ-R published a letter to the editor I submitted regarding the deepening crisis with state funded pensions in Illinois.

A week later the paper published a reply from Dave Urbanek, spokesman for the Teachers Retirement System (TRS), one of the larger components of our decrepit pension systems. Though well written, I thought the points raised were irrelevant; but I was flattered that I rated a response, and the figures cited piqued my interest enough to check out TRS’s website, which has a wealth of information available. The fiscal reports supported his statements without refuting mine.

I checked back last week to peruse the TRS Comprehensive Annual Financial Report. Reading the financial summary, either side could claim vindication. I suspect Urbanek would point to the 13.5% (gross of fees) return on the TRS portfolio for 2010 and its balance increase of $2.5 billion. However, those numbers are after $6.8 billion in contributions and investment income. As liabilities increased from $73.0 to 77.3 billion, the reported funds available slipped to 48.4% of the actuarial requirement.

To understand the chilling part, however, you have to read between the lines. Beginning in 2009, with massive losses in the pension funds, Public Act 96-0043 was passed, requiring pension fund values to be “smoothed” over five years. Coincidentally, this then understated those massive losses. How understated? From the actuarial section:

“As of the June 30, 2010 valuation the total net deferral is a $6,115,308,000 loss”

So “actuarial” now means “pretend.” While TRS reported $37.4 billion in “actuarial” assets, market value was $31.3 billion. Using these real numbers, TRS funding has dropped from an abysmal 56% in 2008 (as the the market was crashing), to 40% — despite above average 2010 returns.

It’s not looking good, but at least we’ll know what to tell pensioners when this train wreck arrives:

“You got smoothed!”

Posted in Economics & Politics | 3 Comments

Inaugural post, and some econ nerd guilty pleasure


This is my first official post.  You may notice that there are actually several posts dating back a few years, but those are uploads of older writings to get things started.  Most are letters to the editor of my local paper, the State Journal-Register (Springfield, IL) — some published, some not.  They’re all left open for comment for now.  Please chime in.

I’m just getting the hang of this blog stuff, as up until now I figured the whole internet thing was just a fad that would blow over.  I’m still holding out in hopes of making it to my grave without a FaceBook account, but that may require either another change of mind or an earlier than anticipated demise. At any rate, there will likely be a lot of changes to the look and feel as time goes on.

However, I don’t think the general nature of what will be found here will change much.  It’s mostly going to be about the areas you see in the categories listed to the right, usually economics and politics related; a lot focused on the state of Illinois and its perpetual fiscal mismanagement, some national, with sprinklings of global and local.

What gives “guilty pleasure” to an armchair economics nerd?  Well, how about an smack-down match between the two fountainheads of the eternally opposed branches of economic thought?  IN RAP!

I heard of this via an email from the outstanding Illinois Policy Institute.  The IPI is a free-market oriented think tank (my kind of people).  As I watched it I kept saying to myself, “this is sooo wrong.”  I mean, who would’ve thought economists could rap?  Or, even more disturbing, maybe they’re rappers who understand both FA Hayek and John Maynard Keynes.  It boggles the mind.

If you don’t know who FA Hayek is,  I’d suggest you start remedying that right away with The Road to Serfdom.  It’s free-market, libertarian philosophy and economics at its best.  It’s way shorter than Ayn Rand’s Atlas Shrugged, plus you don’t have to wear black and take up smoking.

If you haven’t heard of John Maynard Keynes, you could be reading the wrong blog!

There’s actually a number of other big names in economics portrayed in the video.  You should at least recognize the guy with the beard who’s passing out money.  Here it is.  I’d suggest you lower the shades before watching it in case you want to bust a move:

Posted in Diet & Nutrition, Economics & Politics, Energy & Environment, Personal Finance, Random Thoughts | 3 Comments

Just spitballing here, Senator, but how about you just do your job?

[Submitted/published State Journal-Register]

Firstly, I think most people acknowledge that we’re all imperfect sinners, and could all use a little help or friendly counsel from time to time.  Even from other imperfect sinners.  On the other hand, the average citizen would likely be dumbfounded if, say, Charlie Sheen appeared on their doorstep and proceeded to lecture them on the merits of safe sex and responsible drinking.

The same sense of the surreal is prompted by Illinois Senator Terry Link’s initiative concerning the number of local cemetery districts, levee districts, streetlight districts, etc. that populate our state like mushrooms after a Spring shower.

Here’s a member of a body that can’t get within 8 billion dollars of balancing a budget after a 66% tax increase; manages an $80 billion unfunded pension liability by ignoring it; and whose innovative answer to billions in vendor-crushing past due debts is more borrowing.  Given this fiasco, what’s on the Senator’s mind?  Answer:  Surface water districts in Podunk, Illinois.

He makes a point of recognizing the irony of his proposed solution — another government body to reduce the number of government bodies.  He then obliviously reasons that giving total power over locally answerable government entities to a commission of politically appointed hacks will “take the politics out of the equation.”  Now that’s funny.

If the state is providing funding to these sundry entities I’d support Senator Link  slashing every penny to every one of them.  No commission needed.  I don’t want to pay for Podunk’s TB Board, and we shouldn’t expect Podunkians to pay for Springpatch’s tsunami lookout district.  If local government entities really worry the Senator, he could push legislation enabling local citizens to dissolve their vestigial local political organs via referendum.

I’d suggest he get started on that right after the state budget is balanced and Charlie Sheen sobers up.

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