A Happly Little Story on Us (the US) for Australia

US Government 'hiding true amount of debt'

THE actual figure of the US' national debt is much higher than the official sum of $US13.4 trillion ($14.3 trillion) given by the Congressional Budget Office, according to analysts cited on Sunday by the New York Post.

"The Government is lying about the amount of debt. It is engaging in Enron accounting," said Laurence Kotlikoff, an economist at Boston University and co-author of The Coming Generational Storm: What You Need to Know about America's Economic Future.
 
"The problem is we're seeing an explosion in spending," added Andrew Moylan, director of government affairs for the National Taxpayers Union.  In 1980, the debt - the accumulated red ink incurred by the Federal Government - was $US909 billion.

This represented some 33 per cent of gross domestic product, according to the Congressional Budget Office (CBO).  Thirty years later, based on this year's second-quarter numbers, the CBO said the debt was $US13.4 trillion, or 92 per cent of GDP.  The CBO estimates the debt will be at $US16.5 trillion in two years, or 100.6 per cent of GDP.  But these numbers are incomplete.

They do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits.
In the case of Social Security, beginning in 2016, the US Government will be paying out more than it is collecting in taxes.

Without basic measures - such as payment cuts or higher payroll taxes - the system could be on the road to bankruptcy, according to officials.  "Without changes," wrote Social Security Commissioner Michael Astrue, "by 2037 the Social Security Trust Fund will be exhausted. There will be enough money only to pay about $US0.76 for each dollar of benefits."  Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.  Mr Kotlikoff says the debt is actually $US200 trillion.  Mr Moylan says the number is likely about $US60 trillion.

That is close to the figure quoted by David Walker, the US Comptroller General from 1998 to 2008.  He launched a campaign to convince Americans that the federal spending and debt is a greater threat than terrorism.
But whichever figure is accurate, all three agree that the problem has worsened in the last few years.

They say it is because Congress and the Administration, whether Republican or Democrat, consistently overspend.

Dinesh D'Souza - How Obama Thinks

Here is a great article by Dinesh D'Souza on our illustrious leader. It may or may not be true, but it sure ties up a lot of loose ends and answers alot of questions.

The Money of Fools: Part III - Thomas Sowell

Among the many words that don't mean what they say, but which too many of us accept as if they did, are those staples of political discussion, "liberals" and "conservatives." Most liberals are not liberal and most conservatives are not conservative. We might be better off just calling them X and Y, instead of imagining that we are really describing their philosophies. Moreover, like most confusion, it has consequences.

The late liberal Professor Tony Judt of New York University gave this definition of liberals: "A liberal is someone who opposes interference in the affairs of others: who is tolerant of dissenting attitudes and unconventional behavior."

According to Professor Judt, liberals favor "keeping other people out of our lives, leaving individuals the maximum space in which to live and flourish as they choose."

That is certainly in keeping with the dictionary definition of liberalism and with most contemporary liberals' vision of themselves. But, if we follow Justice Oliver Wendell Holmes' admonition to "think things, not words" and look beyond the label to the tangible realities of the world, we find almost the exact opposite of what the word "liberal" is supposed to mean.

Most of us would probably regard the current administration in Washington-- both the White House and the Congress-- as "liberal," even though the word "progressive" may be more in vogue.

Does the sweeping legislation empowering federal officials to tell doctors, patients, hospitals, and insurance companies what to do, when it comes to medical care, sound like leaving individuals the maximum space to live their lives as they choose?

Communities that have had overwhelmingly liberal elected officials for decades abound in nanny state regulations, micro-managing everything from home-building to garbage collection. San Francisco is a classic example. Among its innumerable micro-managing laws is one recently passed requiring that gas stations must remove the little levers that allow motorists to pump gas into their cars without having to hold the nozzle.

Liberals are usually willing to let people violate the traditional standards of the larger society but crack down on those who dare to violate liberals' own notions and fetishes.

Our academic institutions are overwhelmingly dominated by liberals. They feature speech codes that punish politically incorrect statements. Even to apply to many colleges and universities, students must have spent time as "volunteers" for activities arbitrarily defined by admissions committees as "community service."

As for conservatism, it has no specific political meaning, because everything depends on what you are trying to conserve. In the last days of the Soviet Union, those who were trying to maintain the Communist system were widely-- and correctly-- described as "conservatives," though they had nothing in common with such conservatives as William F. Buckley or Milton Friedman.

Professor Friedman for years fought a losing battle against being labeled a conservative. He considered himself a liberal in the original sense of the word and wrote a book titled "The Tyranny of the Status Quo." Friedman proposed radical changes in things ranging from the public schools to the Federal Reserve System.

But he is remembered today as one of the great conservatives of our time. Great, yes. But conservative? It depends on what you mean by conservative. Conservatism, in its original meaning, would require preserving the welfare state and widespread government intervention in the economy. Neither Milton Friedman nor most of the other people designated as conservatives today want that.

Liberals often flatter themselves with having the generosity that the word implies. Many of them might be shocked to discover that Ronald Reagan donated a higher percentage of his income to charity than either Ted Kennedy or Franklin D. Roosevelt. Nor was this unusual. Conservatives in general donate more of their income and their time to charitable endeavors and donate far more blood.

We are probably stuck with having to use words like liberal and conservative. But we can at least recognize them as nothing more than political flags of convenience. We need not accept these words literally, as the money of fools.

The Money of Fools: Part II

Words are supposed to convey thoughts, but they can also obliterate thoughts and shut down thinking. As Justice Oliver Wendell Holmes said, a catchword can "delay further analysis for fifty years." Holmes also said, "think things, not words."  When you are satisfied to accept words, without thinking beyond those words to the things-- the tangible realities of the world-- you are confirming what philosopher Thomas Hobbes said in the 17th century, that words are wise men's counters but they are the money of fools.
 
Even in matters of life and death, too many people accept words instead of thinking, leaving themselves wide open to people who are clever at spinning words. The whole controversy about "health care reform" is a classic example.
"Health care" and medical care are not the same thing. The confusion between the two spreads more confusion, when advocates of government-run medical care point to longer life expectancies in some other countries where government runs the medical system.
 
Health care affects longevity, but health care includes far more than medical care. Health care includes such things as diet, exercise and avoiding things that can shorten your life, such as drug addiction, reckless driving and homicide.  If you stop and think-- which catchwords can deflect us from doing-- it is clear that homicide and car crashes are not things that doctors can prevent. Moreover, if you compare longevity among countries, leaving out homicide and car crashes, Americans have the longest lifespan in the western world.
 
Why then are people talking about gross statistics on longevity, as a reason to change our medical care system? Since this is a life and death issue, we need to think about the realities of the world, not the clever words of spinmeisters trying to justify a government takeover of medical care.
 
American medical care leads the world in things like cancer survival rates, which medical care affects far more than it affects people's behavior that leads to obesity and narcotics addiction, as well as such other things as homicide and reckless driving.   But none of this is even thought about, when people simply go with the flow of catchwords, accepting those words as the money of fools.
 
Among the many other catchwords that shut down thinking are "the rich" and "the poor." When is somebody rich? When they have a lot of wealth. But, when politicians talk about taxing "the rich," they are not even talking about people's wealth, and what they are planning to tax are people's incomes, not their wealth.
 
If we stop and think, instead of going with the flow of catchwords, it is clear than income and wealth are different things. A billionaire can have zero income. Bill Gates lost $18 billion dollars in 2008 and Warren Buffett lost $25 billion. Their income might have been negative, for all I know. But, no matter how low their income was, they were not poor.
 
By the same token, people who have worked their way up, to the point where they have a substantial income in their later years, are not rich. In most cases, they never earned high incomes in their younger years and they will not be earning high incomes when they retire. A middle-aged or elderly couple making $125,000 each are not rich, even though politicians will tax away what they have earned at the end of decades of working their way up.
 
Similarly, most of the people who are called "the poor" are not poor. Their low incomes are as transient as the higher incomes of "the rich." Most of the people in the bottom 20 percent in income end up in the top half of the income distribution in later years. Far more of them reach the top 20 percent than remain in the bottom 20 percent over the years.
 
The grand fallacy in most discussions of income statistics is the assumption that the various income brackets represent enduring classes of people, rather than transients who start at the bottom in entry-level jobs and move up as they acquire more experience and skills.
 
But if we are going to base major government policies on confusions between medical care and health care, or on calling people "rich" and "poor" who are neither, then we have truly accepted words as the money of fools.

The Money of Fools - Thomas Sowell

Seventeenth century philosopher Thomas Hobbes said that words are wise men's counters, but they are the money of fools.
 
That is as painfully true today as it was four centuries ago. Using words as vehicles to try to convey your meaning is very different from taking words so literally that the words use you and confuse you.  Take the simple phrase "rent control." If you take these words literally-- as if they were money in the bank-- you get a complete distortion of reality.  New York is the city with the oldest and strongest rent control laws in the nation. San Francisco is second. But if you look at cities with the highest average rents, New York is first and San Francisco is second. Obviously, "rent control" laws do not control rent.
 
If you check out the facts, instead of relying on words, you will discover that "gun control" laws do not control guns, the government's "stimulus" spending does not stimulate the economy and that many "compassionate" policies inflict cruel results, such as the destruction of the black family.
 
Do you know how many millions of people died in the war "to make the world safe for democracy"-- a war that led to autocratic dynasties being replaced by totalitarian dictatorships that slaughtered far more of their own people than the dynasties had?
 
Warm, fuzzy words and phrases have an enormous advantage in politics. None has had such a long run of political success as "social justice."  The idea cannot be refuted because it has no specific meaning. Fighting it would be like trying to punch the fog. No wonder "social justice" has been such a political success for more than a century-- and counting.  While the term has no defined meaning, it has emotionally powerful connotations. There is a strong sense that it is simply not right-- that it is unjust-- that some people are so much better off than others.
 
Justification, even as the term is used in printing and carpentry, means aligning one thing with another. But what is the standard to which we think incomes or other benefits should be aligned?
 
Is the person who has spent years in school goofing off, acting up or fighting-- squandering the tens of thousands of dollars that the taxpayers have spent on his education-- supposed to end up with his income aligned with that of the person who spent those same years studying to acquire knowledge and skills that would later be valuable to himself and to society at large?
 
Some advocates of "social justice" would argue that what is fundamentally unjust is that one person is born into circumstances that make that person's chances in life radically different from the chances that others have-- through no fault of one and through no merit of the others.
 
Maybe the person who wasted educational opportunities and developed self-destructive behavior would have turned out differently if born into a different home or a different community.
 
That would of course be more just. But now we are no longer talking about "social" justice, unless we believe that it is all society's fault that different families and communities have different values and priorities-- and that society can "solve" that "problem."
 
Nor can poverty or poor education explain such differences. There are individuals who were raised by parents who were both poor and poorly educated, but who pushed their children to get the education that the parents themselves never had. Many individuals and groups would not be where they are today without that.
 
All kinds of chance encounters-- with particular people, information or circumstances-- have marked turning points in many individual's lives, whether toward fulfillment or ruin.  None of these things is equal or can be made equal. If this is an injustice, it is not a "social" injustice because it is beyond the power of society.  You can talk or act as if society is both omniscient and omnipotent. But, to do so would be to let words become what Thomas Hobbes called them, "the money of fools."

The Truth About the Pay Gap - Steve Chapman

The following column was originally published in April 2007.  
New Year's Day is called that because it begins a new year, and Thanksgiving has that name because it's an occasion for expressing gratitude. But Equal Pay Day, observed this year on April 24, is named for something that, we are told, doesn't exist -- equal pay for men and women.
 
The National Committee on Pay Equity used the occasion to announce that among full-time workers, women make only 77 cents for every dollar paid to men. The three leading Democratic presidential candidates have all endorsed legislation to fix the problem.
 
And the effort got new fuel from a report by the American Association of University Women (AAUW) Educational Foundation, which says women are paid less starting with their first jobs out of college, and that the deficit only grows with time. Pay discrimination, says AAUW, is still "a serious problem for women in the work force."
 
In reality, that's not clear at all. What we know from an array of evidence, including this report, is that most if not all of the discrepancy can be traced to factors other than sexism. When it comes to pay equity, we really have come a long way.
 
On its face, the evidence in the AAUW study looks damning. "One year out of college," it says, "women working full-time earn only 80 percent as much as their male colleagues earn. Ten years after graduation, women fall farther behind, earning only 69 percent as much as men earn."
 
But read more, and you learn things that don't get much notice on Equal Pay Day. As the report acknowledges, women with college degrees tend to go into fields like education, psychology and the humanities, which typically pay less than the sectors preferred by men, such as engineering, math and business. They are also more likely than men to work for nonprofit groups and local governments, which do not offer salaries that Alex Rodriguez would envy.
 
As they get older, many women elect to work less so they can spend time with their children. A decade after graduation, 39 percent of women are out of the work force or working part time -- compared with only 3 percent of men. When these mothers return to full-time jobs, they naturally earn less than they would have if they had never left.
 
Even before they have kids, men and women often do different things that may affect earnings. A year out of college, notes AAUW, women in full-time jobs work an average of 42 hours a week, compared to 45 for men. Men are also far more likely to work more than 50 hours a week.
 
Buried in the report is a startling admission: "After accounting for all factors known to affect wages, about one-quarter of the gap remains unexplained and may be attributed to discrimination" (my emphasis). Another way to put it is that three-quarters of the gap clearly has innocent causes -- and that we actually don't know whether discrimination accounts for the rest.
 
I asked Harvard economist Claudia Goldin if there is sufficient evidence to conclude that women experience systematic pay discrimination. "No," she replied. There are certainly instances of discrimination, she says, but most of the gap is the result of different choices. Other hard-to-measure factors, Goldin thinks, largely account for the remaining gap -- "probably not all, but most of it."
 
The divergent career paths of men and women may reflect a basic unfairness in what's expected of them. It could be that a lot of mothers, if they had their way, would rather pursue careers but have to stay home with the kids because their husbands insist. Or it may be that for one reason or another, many mothers prefer to take on the lion's share of childrearing. In any case, the pay disparity caused by these choices can't be blamed on piggish employers.
 
June O'Neill, an economist at Baruch College and former director of the Congressional Budget Office, has uncovered something that debunks the discrimination thesis. Take out the effects of marriage and childrearing, and the difference between the genders suddenly vanishes. "For men and women who never marry and never have children, there is no earnings gap," she said in an interview.
 
That's a fact you won't hear from AAUW or the Democratic presidential candidates. The prevailing impulse on Equal Pay Day was to lament how far we are from the goal. The true revelation, though, is how close.