Category : Budget

(Wired) America’s infrastructure is such a mess it earns a D+ grade, and we need $4.6 trillion just to bring it to a B

One of President Donald Trump’s first promises after getting elected was to spend $1 trillion on infrastructure—bridges, roads, tunnels, pipes, dams. And whether you’ve had to evacuate a town in the shadow of a crumbling dam, buy filters for tainted municipal water, or even just bounced over potholes on a highway, you’ve experienced the problems the president alluded to.

Well, it really is as bad as you think. The American Society of Civil Engineers has just released its latest infrastructure report card, and grades the United States at D plus. That means the country’s public works are in substandard condition, with a risk of failure. The ASCE releases its reports every four years, and the mark hasn’t changed since the last time. “While our nation’s infrastructure problems are significant, they are solvable,” says ASCE President Norma Jean Mattei. But that’ll take money.

So … $1 trillion, right? Great news! Except the ASCE report says it’ll take $4.59 trillion to bring things up to a B, or adequate grade, by 2025. That’s a shortfall of $2 trillion over current spending plans. Again: $1 trillion is nowhere near enough.

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Posted in America/U.S.A., Budget, Economy, House of Representatives, Office of the President, Politics in General, President Donald Trump, Senate, The U.S. Government

(NYT Op-ed) Paul Volcker+ Peter Peterson–Ignoring the Debt Problem

Yes, this country can handle the nearly $600 billion federal deficit estimated for 2016. But the deficit has grown sharply this year, and will keep the national debt at about 75 percent of the gross domestic product, a ratio not seen since 1950, after the budget ballooned during World War II.

Long-term, that continued growth, driven by our tax and spending policies, will create the most significant fiscal challenge facing our country. The widely respected Congressional Budget Office has estimated that by midcentury our debt will rise to 140 percent of G.D.P., far above that in any previous era, even in times of war.

Unfortunately, despite a brief discussion during the final presidential debate, neither candidate has put forward a convincing plan to restrain the growth of the national debt in the decades to come.

Read it all. For a very important background on this, please see this 2011 post and the comments thereon, in which Boston University’s Laurence J. Kotlikoff makes clear that the true figure of our actual indebtedness is in excess of 200 Trillion dollars–KSH.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Anthropology, Budget, Economy, Ethics / Moral Theology, History, Medicare, Politics in General, Social Security, The National Deficit, The U.S. Government, Theology

(CNBC) Study: 41 percent expect no Social Security benefits

Americans have major doubts about the financial health of Social Security.

A new survey by Pew Research Center finds that 41 percent of Americans think there will be no Social Security benefits for them when they retire and nearly a third expect reduced levels of benefits. (Tweet This)

Some of those fears may be overblown. “People who think they will get zero benefits from Social Security are wrong and they should look at the facts,” said Andy Landis, a former claims representative for the Social Security Administration (SSA) and author of “Social Security: The Inside Story.”

There are concerns that benefits may be reduced, however.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Aging / the Elderly, America/U.S.A., Budget, Economy, Ethics / Moral Theology, Personal Finance, Politics in General, Psychology, Social Security, The U.S. Government, Theology

David Cay Johnston–America needs Walt Disney’s optimism and investment in infrastructure

Disneyland has become a time capsule not of the romantic idea of 19th century Main Street or even the possibilities in Tomorrowland but of a time when Americans believed in a better future ”” and were willing to invest in it. A half-century ago, we put almost 1 percent of our economy into landing men on the moon, yet today we fall behind other countries in exploring space, supposedly because we cannot afford it.

We pay a huge price for our lack of investment and faith in the future of America. We pay for all the inefficiency of our decrepit infrastructure. We pay with minds that will never be fully developed and with scientific breakthroughs that will enrich other countries. And we pay with lives of daily grind and unpleasantness without hope of respite.

Would that as a people we thought like Walt Disney so we could make America into a happy place.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Corporations/Corporate Life, Economy, Education, Ethics / Moral Theology, History, The U.S. Government, Theology, Travel

In South Carolina, Shaw AFB survives budget ax for now; Charleston loses 19 jobs

Shaw Air Force Base was spared in this round of the Air Force’s budget cuts, losing no jobs, but Joint Base Charleston will have 19 positions eliminated.

The announced cuts were the first permanent jobs lost in South Carolina in what is expected to to be a deep reduction in the military following 13 years of war in Iraq and Afghanistan. State leaders are preparing to fight for the state’s seven installations, based mostly in Columbia, Charleston and Beaufort.

The installations and their missions, as well as a large National Guard, numerous defense contractors in the Upstate and a high number of retirees, especially on the coast, pump nearly $16 billion a year into the state’s economy, according to a study by the S.C. Department of Commerce.

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Posted in * Economics, Politics, * International News & Commentary, * South Carolina, America/U.S.A., Budget, Consumer/consumer spending, Defense, National Security, Military, Economy, Politics in General, State Government, The U.S. Government

(IBD) Social Security To Go Bust By 2030: CBO

The $2.8 trillion Social Security Trust Fund is on track to be totally spent by 2030, the Congressional Budget Office said Tuesday.

That’s one year earlier than projected in 2013 and a decade earlier than the CBO estimated as recently as 2011.

The CBO delivered the warning in a gloomy long-term budget outlook that shows federal debt reaching 106% of GDP in 25 years, up from 74% now.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Ethics / Moral Theology, Social Security, The National Deficit, The U.S. Government, Theology

(HMS) $1.9 Billion in Medicare Waste: ”˜Tip of the Iceberg’

In the first large-scale study to directly measure wasteful spending in Medicare, researchers found that Medicare spent $1.9 billion in 2009 for patients to receive any of 26 tests and procedures that have been shown by empirical studies to offer little or no health benefit.

By analyzing Medicare claims data, researchers in the Harvard Medical School Department of Health Care Policy found that at least one in four Medicare recipients received one or more of these services in 2009. What’s more, those 26 services are just a small sample of the hundreds of services that are known to provide little or no medical value to patients in many circumstances.

“We suspect this is just the tip of the iceberg,” said study author J. Michael McWilliams, associate professor of health care policy. The study appears today in JAMA Internal Medicine.

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Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, Ethics / Moral Theology, Health & Medicine, Medicare, Personal Finance, Politics in General, The National Deficit, The U.S. Government, Theology

Pew Research Reports important report on "the next America"

We start with this reality: Social Security and Medicare are practically sacrosanct. Nearly nine-in-ten Americans say they’re good for the country. That’s an amazing number. But the popularity of these programs really isn’t all that surprising. People love them because they do what they were created to do. They ease many of the frets and dreads of old age ”“ a blessing not just for seniors but for everyone who loves, supports and depends on seniors. Which is to say, everyone.

But the status quo is unsustainable. Some 10,000 Baby Boomers will be going on Social Security and Medicare every single day between now and 2030. By the time everyone in this big pig-in-the-python generation is drawing benefits, we’ll have just two workers per beneficiary ”“ down from three-to-one now, five-to-one in 1960 and more than forty-to-one in 1945, shortly after Social Security first started supporting beneficiaries.

The math of the 20th century simply won’t work in the 21st. Today’s young are paying taxes to support a level of benefits for today’s old that they have no realistic chance of receiving when they become old. And they know it ”“ just 6% of Millennials say they expect to receive full benefits from Social Security when they retire. Fully half believe they’ll get nothing.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Ethics / Moral Theology, House of Representatives, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The National Deficit, The U.S. Government, Theology, Young Adults

(Wash. Post) Pentagon blueprint would cut Army size as military adjusts to leaner budgets

The Defense Department on Monday proposed cutting the Army to its smallest size in 74 years, slashing a class of attack jets and rolling back personnel costs in an effort to adjust a department buoyed by a decade of war to an era of leaner budgets.

The five-year budget blueprint outlined by Defense Secretary Chuck Hagel reflects a willingness by the Pentagon to make deep cuts to personnel strength to invest in technology and equipment as it eases off a war footing.

“The development and proliferation of more advanced military technologies by other nations mean that we are entering an era where American dominance on the seas, in the skies and in space can no longer be taken for granted,” Hagel told reporters at an afternoon news conference.

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Posted in * Economics, Politics, Budget, Defense, National Security, Military, Economy, Ethics / Moral Theology, The U.S. Government, Theology

(NY Times) Treasury Secretary Sends Warning on Debt Limit

Treasury Secretary Jacob J. Lew warned Congress on Wednesday that the government would most likely exhaust its ability to borrow in late February, setting up yet another fiscal showdown with Republicans, and this time earlier than congressional leaders had anticipated.

In a letter to Speaker John A. Boehner and the other top three congressional leaders, Mr. Lew said a surge of February spending, mainly tax refunds for 2013, would leave the Treasury with little room to maneuver after the official debt limit is reached on Feb. 7.

The letter amounts to an early alarm bell, coming just weeks after Congress passed its first bipartisan budget and comprehensive spending bill in years. Those bills were supposed to serve as a cease-fire in the budget wars that have rattled the country and the economy since Republicans took control of the House in 2011.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Economy, Ethics / Moral Theology, Federal Reserve, Globalization, History, House of Representatives, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government, The United States Currency (Dollar etc), Theology

(WSJ) Federal Reserve Dials Back Bond Buying, Keeps a Wary Eye on Growth

Although the Fed expects to keep reducing the program “in measured steps” next year, the timing and the course isn’t preset. “Continued progress [in the economy] is by no means certain,” Mr. [Ben] Bernanke said. “The steps that we take will be data-dependent.”

If the Fed proceeds at the pace he set out, it would complete the bond-buying program toward the end of 2014 with holdings of nearly $4.5 trillion in bonds, loans and other assets, nearly six times as large as the Fed’s total holdings when the financial crisis started in 2008.

Still, officials””worried that investors would quake at the thought of less Fed support””went to lengths to demonstrate that they would keep interest rates low for years to come, even after the bond-buying program ends.
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Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, Federal Reserve, History, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Personal Finance, Politics in General, Stock Market, The Banking System/Sector, The National Deficit, The U.S. Government, Theology

(Washington Post) Robert Samuelson–The Latest Budget Deal is just more muddling through

But there’s a problem. [Charles] Lindblom’s common-sense insight has a giant exception: crises. Change, forced by outside events, then happens by “leaps and bounds.” The recent financial crisis caused Congress and two presidents to embrace measures (the rescue of big banks, General Motors and Chrysler) that were unthinkable a few months earlier. In the 1960s, civil rights demonstrations pushed Congress to pass the Civil Rights Act of 1964 that, in outlawing most public racial discrimination, wasn’t “incremental.” History offers other examples, including the Civil War, the New Deal and both World Wars. Small changes won’t suffice when big changes are required.

On the budget, muddling through comes with a crucial assumption. It is that continuous deficits won’t provoke a crisis that compels political leaders to take harsh steps that they would otherwise not take. This optimism may be justified. For decades, “experts” have warned of the dire consequences of unchecked deficits. Yet no great crisis has occurred. But this conviction also could be complacency. Government debt is in territory that, except for wartime debt, is unprecedented. We don’t know the consequences. Someday, we may no longer have the luxury of muddling through.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Ethics / Moral Theology, House of Representatives, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government, Theology, Young Adults

(Washington Post) House, Senate negotiators reach budget deal

House and Senate negotiators have reached agreement on an $85 billion package to fund the government past Jan. 15, avoid another federal shutdown and end the cycle of budget crises that have dominated Washington for much of the past three years.

The deal did not include a key priority of House Democrats who wanted an extension of long-term benefits for the unemployed. But Democrats said they would continue to press Republicans on the issue in hopes of preventing more than 1 million people from losing their unemployment checks at the end of the month.

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Politics in General, Senate, The National Deficit, The U.S. Government

(Wash Post Op-ed) Robert Samuelson–We need to stop coddling the elderly

No one wants to be against Grandma, who ”” as portrayed in the media ”” is kindly, often suffering from some condition, usually financially precarious and somehow needy. But projecting this sympathetic portrait onto the entire 65-plus population is an exercise in make-believe and, frequently, political propaganda. The St. Louis Fed study refutes the stereotype. Examining different age groups, it found that since the financial crisis, incomes have risen for the elderly while they’ve dropped for the young and middle-aged.

The numbers are instructive. From 2007, the year before the financial crisis, to 2010, median income for the families under 40 dropped 12.4 percent to $39,644. For the middle-aged from 40 to 61, the comparable decline was 11.9 percent to $56,924. Meanwhile, those aged 62 to 69 gained 12.3 percent to $50,825. For Americans 70-plus, the increase was 15.6 percent to $31,512. (All figures adjust for inflation and are in 2010 “constant” dollars. The “median income” is the midpoint of incomes and is often considered “typical.”)

There has been a historic shift in favor of today’s elderly. To put this in perspective, recall that many family expenses drop with age. Mortgages are paid off; work costs vanish; children leave. Recall also that incomes typically follow a “life cycle”: They start low in workers’ 20s, peak in their 50s, and then decline in retirement, as wages give way to government transfers and savings. Against these realities, the long-term gains of the elderly and losses of the young are astonishing. From 1989 to 2010, median income increased 60 percent for those aged 62 to 69 while falling 6”‰percent for those under 40 and 2”‰percent for those 40 to 61.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Health & Medicine, Medicare, Politics in General, Social Security, The National Deficit, The U.S. Government

(WSJ) Nicholas Hahn: Is Tax Policy really the Purview of Preachers?

The bishops might have been promoting a strictly Democratic line, but U.S. Senate Chaplain Barry Black was more ecumenical. Amid the shutdown, Rev. Black offered a daily prayer in the Senate chamber asking God to “save us from the madness. We acknowledge our transgressions, our shortcomings, our smugness, our selfishness, and our pride.” Later he condemned the “hypocrisy of attempting to sound reasonable while being unreasonable.” His listeners in one party no doubt assumed he was talking about the other side.

It is one thing to spiritually shame politicians, as Rev. Black did. Trying to do their jobs is another. The bishops and other clergy in the Circle of Protection go well beyond their competencies when they make such policy prescriptions. Speaking about the moral issues of the day is certainly within their pastoral purview, but the bishops’ calls to raise revenues (aka taxes), for instance, or eliminate “unnecessary” military spending are not.

Bishops routinely assert their authority as “pastors and teachers,” as Bishops Blaire, Gomez and Pates did, but according to the tradition of their own church, they have no teaching authority when it comes to politics.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Ethics / Moral Theology, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Religion & Culture, Senate, Social Security, Taxes, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, Theology