Economics a la Nan Pelosi

What we have here is a graph and a comment by Nancy Pelosi that perfectly captures the Progressives (Socialists) view of economics.  Ms Pelosi clearly believes that government spending creates jobs when she says the Republicans budget cuts will cost 800,000 jobs.  It would be fun to have her respond to this chart, for the record.

The debt and the media

With all the attention now being lavished on the US debt problem by the media, one wonders where were they when all this debt was being accumulated over the last few decades?  If memory serves there was a time in my lifetime when if we had a war or some unusual event facing the nation there was a discussion about raising the money to pay for the consequences of the event or war.  When did we lose this sense of fiscal rectitude and responsibility to not run up debt willy nilly?  Was it during the Johnson administration of the '60s when simultaneously all the liberal programs for eliminating poverty were put in place and the Vietnam war was making its demands on the public treasury?  Whenever it happened it put us on the slippery slope of accumulated debt that we are now faced with having to manage since it fairly clear to everyone that there simply is no more capacity for additional debt left in the system.  The key to our dilemma is interest payment on all the accumulated debt.  It must be payed, it won't go away, and it has had this annoying habit of compounding each time we've added debt to the country's balance sheet.

All of this brings to mind my recently departed good friend Jim Whelpley, a life long toiler in the financial services business, who back in the 60's used to point out -- to anyone who would listen -- that mechanisms were being put in place by the government and banks to expand the use of credit in the economy.  Jim was way ahead of his time, and remained so throughout his life.  He was also largely ignored because, as he liked to say, he was simply the guy who was saying at the height of a party that it was time to remove the punch bowl before everyone got ripping drunk.  We're now "ripping drunk" and still having a very hard time figuring out who's going to remove the punch bowl.  Obama's recently submitted budget says loud and clear he's not going to remove the punch bowl.  That leaves it up to the Republicans who, let's face it,  in the past have been much less than courageous in this matter as well.  What's different now is the Tea Party whose influence just may have put some spine in the "career" Republican pols like Mitch McConnell, Speaker Boehner, et al.  Two young Republican turks, Paul Ryan and Eric Cantor, the House Majority leader from Virginia, may be the key players here since they represent the generation that will have to deal with the consequences of a wild drunken party gone completely out of control.  The debt problem gets a good airing here in this strait forward reporting, at last, from the media.

Obama's budget consequences

Keith Hennessey, former WH operative provides useful charts here.

And here, yet another condemnation of Obamacare, the fraudulent numbers and the havoc it will wreak on state budgets.

Vietnam

Dennis Pragar recently visited Vietnam and offers some insights here.

Replace the welfare state with a cash subsidy for the poor.

How to deal with the poor, working and non-working, has been the bane of capitalism at least since the Progressive Era at the turn of the 20th century.  The system we now have in place, as described in this piece here, is inefficient, costly, and rife with disincentives to work.  The idea presented in this article to provide a cash payment to the poor based upon the percent their income falls below the poverty level for and individual, has been tried in test cases with inconclusive results. It remains, however, a better idea than the system in place now because it reduces the size and intrusiveness  of the bureaucracy.  Sounds like the way to go.