8 Stood in the Way

Eight GOP senators voted against the 2-year earmark moratorium.  They are:

1. James Inhofe (OK)
2. Bob Bennet (UT)
3. Susan Collins (ME)
4. Thad Cochran (MS)
5. Richard Shelby (AL)
6. Lisa Murkowski (AK)
7. George Voinovich (OH)
8. Dick Lugar (IN)

With their votes, the resolution failed 56-39.

I hate earmarks. I hate them because they are a backdoor currency to buy votes. And they are hard to find because they are not in the budget package. They can be attached to anything the house or senate passes.  I note that only one of these senators is actually up for re-election next year. That's Mr. Lugar of Indiana.

There are also 7 Democratic senators that voted for the moratorium. They are:

1. Evan Bayh (IN)
2. Michael Bennet (WI)
3. Russ Feingold (WI)
4. Clair McCaskill (MO)
5. Bill Nelson (CO)
6. Mark Udall (CO)
7. Mark Warner (VA)

Which just goes to show that doing the right thing isn't necessarily being done by just the right wing.

Earmarks are a symptom of the problem.

In 2005, the Congressional Research Service found that earmark projects accounted for 1.92% of all federal outlays (spending). Now... that doesn't sound like a lot of money.  Well, OK, in the jaundiced and stratosphere-high world of federal spending, that doesn't sound like a lot of money.  In fact, it would work out to about $47.7 billion dollars, which compared to the $1300 billion that we overspent in 2010, doesn't really seem like much.

However, earmarks are a symptom of a Washington problem that John McCain and a few others have been warning us against for years.  Earmarks are used to buy votes in both houses of Congress.  It's a form of political currency that is used to influence members of both the House and the Senate to vote in a manner that they might otherwise have done.  Here's an example:

House Leader: This reform legislation is very important and we really need your vote in order to guarantee it's passage.
Representative: I realize that this is important to you, but you have to understand that my constituency isn't effected that much by the problem your legislation addresses. And they will object to its cost.
House Leader: Well, what is your constituency interested in?
Representative: We've been trying for years to build that new county library, but the economy has made it difficult to get it done.
House Leader: Well, what if we were to attach, let's say, $600,000 in earmarked funding for that library to the proposed legislation?  
Representative. My constituency will be grateful.  You have my support.

See the problem?  So even though earmarks themselves only represent a small amount of the total federal funds spent, they contribute to a bloated federal budget by making it more palatable to some members of Congress by sending some funding back home where it will do some good.

In the above example, would a new public library be of benefit to the community? Almost assuredly so. But because it's earmarked legislation, it never gets debated as part of the budget.  Therefore, this funding is hard to find and hard to track.

If you get rid of these "pork-barrel" projects and hidden earmarked funding riders, then bills tend to be voted on based only on their relative merit and not because votes have been bought and paid for.  For example, without the sweetheart deals that were made to certain members of Congress in states like Kansas and Louisiana, the United States National Health Care legislation (aka "Obamacare") would probably never have gotten enough votes to pass.

And that's why the Tea Party wants earmarks eliminated.

Quantitative Easing and the 2010 G20 Summit.

From the FT.com (Financial Times): In an article by Ralph Atkins while in Frankfurt, Germany, he wrote about the "collision" course that Germany has plotted with regards to the United States.

Our policy makers are whining about our trade imbalance.  Wolfgang Schäuble accused the United States government of undermining its own policymaking credibility.  "It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their printing press." He went on to say that American's have lived for "too long" on credit, overblown their financial sector and neglected their industrial base.  There are lots of reasons for the US problems -- German export surpluses are not part of them.

He further pointed out that we don't have a liquidity problem. There's a LOT of money in the system right now.  What he didn't say, but was definitely implied, is that borrowing is low because banks have increased standards for borrowing and therefore far fewer borrowers are found to be credit worthy. 

I've harped on this for years.  Part of our problem is that in the noble but misguided effort to make home ownership attainable to more people, the federal government put great pressure on banks to ease lending requirements, with the result that potential borrowers were not required to provide much proof that they could pay back the money they were borrowing. This risky behavior resulted in the mortgage bust of 2008, although signs could be seen as early as 2005-6.  Federal policy makers tried to exert pressure to roll back these practices but were soundly rebuffed by a Democrat-controlled Congress. 

If our government continues to "monetize our debt", soon the Federal Bank will be the only organization that will be willing to buy our debt, and at that point the "Weimar moment" as Glenn Beck puts it, will happen.  

Call your congressman, call your Senators and inform them that printing money is no solution to our problem.  Demand that they reign in federal spending, but be aware that in so doing you will be asking the government to reduce services, some of which you or someone you love and know are depending on. How tight are you willing to pull your belt in order to gain federal fiscal responsibility? Because until you are willing to live with less entitlements from our government, our government will continue to spend its way into debtor's prison.

Maybe the GOP gets it. Day 2.

Representative Eric Cantor (R-VA), who will likely become the House Majority Leader in January, distributed a document called "Delivering on Our Commitment" that will be given to new the new class of Representatives.  In it, Mr. Cantor reveals some detail on his proposed congressional agenda.

1)  He opposes a VAT.
2) Create a forum with the nation to seriously discuss entitlement changes necessary to maintain our obligation to retirees while still reducing overall entitlement expenditures. Outreach to the "minority" party is stressed.
3) Continue the GOP moratorium on earmarked appropriations and based on an outcome of the Organizational Conference, extend it to both parties. In short, no House legislation including earmarks will be allowed to the floor for discussion or balloting.
4) A systematic, piece by piece approach to repealing or defund the United States National Health Care act and replace it with "common sense" legislation. I have no ideal what "common sense" legislation means.
5) Implementation of rules for articulating clear standards for bringing legislation to the floor of the House. In summary, an argument must show that the legislation is not more appropriately a state or local government issue and that Congress is within Constitutional limits to pass such legislation. Further, the legislation must include a plan for paying for its implementation.  Shrinking the size of the Federal Government is a primary goal of these rules.
6) Changes to the Legislative Schedule and House Calendar, with focus on committee hearings and oversight uninterrupted by floor activities such as House votes.  Oversight committee reports can be brought to the floor for debate or even adoption.
7) Eliminate expressions of appreciation and recognition for individuals, groups, events and institutions in order to focus on the critical work ahead of us.  Also, consider designations and namings of post offices or other federal buildngs only once day a month.
8) A renewed focus on standardized goals, objectives and formats of oversight reporting in connection with a greater emphasis on individual member oversight initiative.

I have only one relevant piece of advice for Mr. Cantor. Every single category of federal spending needs to be critically scrutinized and that there are no sacred cows.  Defense, Health and Human Services, the Federal bureaus and agencies, and yes, even Social Security all need to be looked at with an eye towards the reduction of spending.

Grumpy Conservative, The 2010 Midterm Results Prove Nothing.

As of 5:00 PM on November 3, 2010, I've heard a President admit he made mistakes and I've heard a resurgent GOP and their pundits talking about a "mandate". 

Florida Senator-elect Marco Rubio said it best. This election result is not an embrace by the people of the GOP, it is a second chance to get it right.

I'm already betting they don't. Because in order for the GOP to get it right, they are going to have to finally convince the American people that we no longer can afford all the programs, services and entitlements that we have come to expect from our federal government. They are going to have to convince the American people that they are going to have to cut over $600 billion dollars from the 2011 federal budget.  They are going to have to repeal parts of the health care reform. But that's only the start.

They are going to have to convince the people that every category of the budget will need to be cut.  They are going to have cut over $150 billion from health and human services. They are going to have to cut over $150 billion from the federal defense budget. They are going to have to dramatically change the way social security payments will be made to people who retire five or more years from now. They are going to have to cut and I mean DRAMATICALLY cut the budgets of federal agencies like the Dept of Education, the Dept of Energy, the Dept of Agriculture, the National Endowment for the Arts, the FBI, CIA. Across board. Nothing is sacred.

Oh yeah, they are going to have to RAISE taxes too. On everybody. Even those who currently don't pay.

And if you the American people don't buy it, then the GOP and the Democratic party are both screwed and the United States defaults on it's debt in 2012.

But the American people won't buy it so why in the hell am I even bothering? I'll see you in the bread line.

Funny stuff. TOTUS comments.

I follow a blogger site called Barack Obama's Teleprompter Blog. If you are a progressive, you'd be better off not following that link. Stay away. But if you are a little more on the conservative side, like I am, I find this guy to be pretty darned funny.

So here's a "tweet" from TOTUS (Teleprompter Of The United States).

Big Guy says he's been fighting for America for 2 years, unfortunately for him America has started fighting back.

OK. That's funny.

Quantitative Easing, Round Two.

Read this CNNMoney article.

Back in March of 2009, the Federal Reserve Bank printed $2 trillion dollars ex nihilo, which means that this money was being added to the money supply but was backed by no additional value in our actual treasury.  In April of 2009, every dollar owned by everyone everywhere was worth 17% less than it was just before they printed the money.

Why would they do such a thing? Well, as the article explains, they are doing this because the federal government is finding it harder and harder to get anybody to buy our deficits. You know... those deficits where our beloved federal government, at the behest of the American people is spending more money than they are willing to pay it for the services they demand their government provide.  So, if China or Bahrain or Qatar or the UAE or the UK are no longer willing to buy our bonds, then the Federal Bank is willing to step in.

Yup, they are going to electronically credit the Federal Reserve with an addition $600 billion dollars in order to be able to purchase our own debt. This is also called "quantitative easing", a desperation move that is taken by a government when an economy is stalled but interest rates for lending are already close to zero.  This is also known as "monetizing the debt", something that has been tried before. I document this in a previous blog posting you can read here.

The Weimar Republic, the German government after World War I did this in order to pay off the massive reparations that they were obligated to pay per the Versailles Treaty.  Look it up. It was not a happy time to be a German.

If you are OK with your government reducing the value of every dollar that you have saved or invested, then don't do anything. But if I were you, and especially if you are a Republican, now is the time to fire up your word processor and write your Senators and Congressman and tell them to STOP THIS NOW!