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Friday, December 13, 2013

Folks, We Have Been Snookered...Again!

Yesterday, the House of Representatives rushed to pass the Paul Ryan/Patty Murray two year budget 'plan' by a large margin (note the 'plan' takes us past the next election...of course). While the politicians are busy patting each other on the back for this 'bipartisan' achievement, a closer look at the CBO projections tell quite a different story. The first thing to realize is the CBO projections are based on assumptions provided by who?...why the politicians of course. As a result the projections are almost always incorrect and useless.

For example, in CBO's May 2011 projections a 2013 budget deficit was anticipated to be $510 billion, the actual deficit is $759 billion...that is a big 'oops'.  Now let's take another step into the la la land of CBO budget projections. That same May 2011 report estimated the total deficits for the fiscal years 2012 thru 2020 to be $3.209 trillion.  Okay, fast forward to the May 2013 CBO budget projections. The total projection for those same years now amount to $5.504 trillion...only missed by $2.3 trillion (and by the way in fiscal years 2011, 2012 and 2013 the actual deficit was $500 billion more the the CBO estimate). Does that give you any comfort about any rosy statements coming out of Washington?

So here's the bottom two short years the budget deficit estimate was increased by $2.3 trillion and the Ryan/Murray plan says the deficit will be reduced by $25 billion???? What is wrong with this picture? Another typical shell game foisted on us by Washington!

Sunday, October 20, 2013

Let's Dispel Another Democratic Canard!

Bush was responsible for the 2007-2008 financial crisis!  So sayeth the Democrats as they look for reasons to demonize the Republicans during election years (as well as others). But wait a minute...didn't the meltdown result from excessive risk taking in the financial system?  The answer is yes but it was not George W. Bush's fault. Let's turn back the clock to 1998.

Robert Rubin, then Secretary of the Treasury under Bill Clinton, approved of the merger of Citibank with Travelers Insurance.  In order to facilitate the merger, provisions under the then still law Glass Steagall act had to be waived...Clinton agreed to it and a waiver was granted effectively weakening the act.

That wasn't enough for Rubin however. He argued that the times had changed and it was time for banks to be allowed to take on more risk.  In order for that to happen simple waivers would not do...the act had to be repealed. Clinton agreed and endorsed the repeal of Glass Steagall. It was repealed in 1999. Oh, and by the way, as soon as that impediment was removed, Robert Rubin left the government and went on to be an extremely high priced executive at Citigroup.

The rest is history...banks, brokerage houses and insurance companies, now often under one roof, oversaw the biggest risk taking adventure in U.S. history. A short seven years later, the great financial meltdown occurred but it was not because of policies under George W. Bush.