Monday, May 14, 2012


America's families aren't able to save for a rainy day, according to a new report. One out of five families owes more on credit cards, medical bills, student loans and other unsecured debt than they have in savings.

President Obama used his weekly address to call for $34.7 billion in more stimulus spending, including tax credits for clean energy companies.

California will need to spend $6 billion -- that's $3.5 million per day until September 2017 -- in order to complete its high-speed train. Meanwhile, the state's budget shortfall has grown immensely, hitting $16 billion.


It has been over 3 years as of this date (May 14th, 2012 ~ 1,111 days to be precise) since the U.S. Senate last passed a budget. The last time Senate Majority Leader Harry Reid (D-NV) fulfilled his legal responsibility, Conan was still on NBC, Tea Parties hadn't come together, the iPad hadn't yet been introduced and Obama's golf game was in its early stages! This is one of the biggest abdications of power we have seen on the part of our government in modern time. And there is no excuse. The Senate needs only 51 votes to pass a budget. Democrats have had well over that for President Obama's entire term, yet they refuse to even offer a plan.


Saving the American Dream

Budget Overview & Highlights

The Saving the American Dream budget empowers individuals to define their own financial future, creates a better delivery system for safety net services, reduces spending across the federal government, and adequately protects America’s national security.
  • Modeled on Heritage Foundation’s Saving the American Dream Plan
  • Easy as “1-2-3”
    • 1 unified tax rate
    • 2 credits (health insurance and Earned Income Tax Credit)
    • 3 deductions (mortgage interest, higher education, charitable giving)
    • Built upon the principles of individual freedom and consumer choice, not government mandates and market distortion
    • Balances the federal budget in 2017 and stays balanced thereafter
    • Reduces publicly held debt to approximately 52% of GDP over the next decade and reduces it to 30% in the 25 years
    • Reduces spending to 17.8% of GDP by 2022
    • Includes entitlement reform for Medicare and Social Security

Tax Reform

The Saving the American Dream budget replaces today’s complex tax system with a new, simple structure that creates powerful incentives for individuals to save, invest, and build wealth.

How it works

  • Single, unified flat income-based tax on consumption for both businesses and individuals (target rate of 25%)
  • Individuals can save and/or invest tax free
  • Eliminates 15.3% payroll tax
  • Eliminates special interest loopholes
  • Eliminates death and excise taxes
  • Transitions to a territorial tax system
  • Caps receipts at 18.5% of GDP
  • Replaces archaic and complex depreciation schedule with expensing

What it does

  • Makes paying taxes easier, more transparent and predictable
  • Frees Americans to base personal financial decisions on individual choice
  • Promotes personal savings and wealth creation for all income levels
  • Encourages self-reliance and lessens dependency on government programs like Social Security

Entitlement Reform

Social Security

The new reform creates a retirement security system more akin to a traditional insurance plan than the current  “income replacement” plan

How it works

  • Delivers an income-adjusted monthly benefit for retirees
  • Gradually increases retirement age
    • Over the next 10 years normal retirement age will rise to 68 for workers born in or after 1959
    • Over the next 18 years early retirement age rises to 65 for workers born in or after 1964
    • After that, retirement ages will be indexed to longevity, adding about one month every two years according to current projections
  • Implements means testing to phase out benefits for married couples earning greater than $110,000 in non-Social Security Income
    • Only the wealthy will see a decrease in monthly benefit
  • Indexes COLA to Chained CPI

What it does

  • Saves Social Security
  • Provides economic security for seniors, preventing sudden poverty as a result of unforeseen events
  • Creates new incentives for individuals to save for retirement
  • Eliminates payments to wealthy individuals
  • Protects retirees who truly need help


The new reform creates a market-driven health care system that empowers seniors to choose their own health care insurance based on personal needs and individual preferences

How it works

  • Transitions to a defined contribution premium support plan
  • Frees Medicare participants to choose to remain in the existing Fee For Service plan or transition to new premium-support program
  • Government contribution will be based on weighted average premium of regional bids of competing health plans
  • Caps total Medicare spending at CPI plus 1 percent and Medicare population growth.
  • Enacts a permanent “Doc Fix” and physician payments are adjusted for inflation measured by CPI

What it does

  • Ensures seniors at all income levels can afford health insurance
  • Reduces the financial burden on future taxpayers 
  • Eliminates payments to wealthy individuals
  • Protects seniors who truly need help
  • Reduces government involvement in personal health care decisions

Health Insurance & Medicaid

The Saving the American Dream budget creates a new portable health insurance credit that ensures all Americans can afford health care

How it works

  • Repeals ObamaCare
  • Replaces it with a new market-based income-adjusted tax credit for purchasing health insurance of the one’s choice
  • Very low-income individuals and families receive additional assistance through a larger tax credit
  • Low-income disabled and elderly are covered by Medicaid; funding is blocked granted to the states, capped at 2007 levels, and indexed to medical inflation thereafter
  • States are given more freedom to design their own Medicaid programs

What it does

  • Frees individuals to make their own health care choices
  • Eliminates government takeover of health care
  • Reduces financial burden on future taxpayers
  • Preserves the Medicaid safety-net program for the truly needy

Other Spending Reform

The Saving the American Dream budget makes significant spending reforms to programs across the federal government to reduce the size of government, eliminate waste, lower future burdens on taxpayers, encourage productive economic activity, and enhance individual liberty and choice.
  • Cuts a total of $9.6 trillion over ten years versus the President’s budget, cuts $7.1 trillion versus the CBO baseline
  • Cuts the size of government in half over 25 years


The Saving the American Dream budget protects America’s security interests at home and abroad and keeps its promise to America’s heroes
  • Ensures adequate funding to protect America’s national defense
  • Strengthens and modernizes our military force
  • Assumes full withdrawal from Iraq and Afghanistan by 2015


The Saving the American Dream budget reforms the regulation process to transform a costly, burdensome, and often unconstitutional process that stifles economic growth
  • Adopts REINS Act
  • Eliminates Davis-Bacon wage provisions
  • Sunsets regulations

Wednesday, May 9, 2012


Unless, like me, you're a believer in truth and objective reporting, there's no good news here:

The Washington Post Co. reported its first-quarter earnings on Friday, and the news coming out of the newspaper division was mostly grim. The unit lost $22.6 million in the quarter, with revenue down 8% and revenue from print advertising specifically falling 17%.
Meanwhile, the Post just reported one of the biggest circulation drops of any major newspaper with the lucrative Sunday edition selling 5.2% fewer copies and the daily edition skidding almost 10%.
We're seeing the same with the collapse of CNN's ratings. Not enough people like or respect Soledad O'Brien, Don Lemon, Anderson Cooper or Piers Morgan any more than they do Wapo.
Bottom line: People on the left and right are sick and tired of being lied to, and in the case of the Washington Post and CNN, the "lie" is this phony, dishonest, and transparent shield of objectivity these outlets hide behind in order to pummel Republicans and push a left-wing agenda.
As more and more Americans move online, they're finding honest and talented brokers of news, information, and analysis from all ends of the political spectrum. People might not agree with everything they read, but at least they know no one is treating them like a fool and trying to put one over on them.
CNN and the Washington Post and so many other cratering MSM entities either need to go out of business or do the honorable thing in announcing their biases and agenda. Personally, I don’t care which one they choose. Both would be good for America.
Certainly, both CNN and Wapo could choose to be unbiased and do things like, say, pursue Fast and Furious as hard as they did the non-story that Valerie Plame, but I just don't think the left is capable of being objective. When you're wrong about absolutely everything, objectivity and truth can only work against you.
The best news, however, is that these dishonest outlets are also losing their impact. New Media isn’t yet able to set the narrative agenda, but we sure can impact, expose, ridicule, deconstruct, and push things into the narrative. The difference between now and 2008 is already startling.
Truth will always win out, and now that the distribution of information is no longer bottlenecked by just a corrupt few, everything is changing for the better.

Friday, May 4, 2012


Labor Force Shrinks As Jobless Swell Disability Ranks

That same month, more than 225,000 workers applied for Social Security disability benefits, and nearly 90,000 were enrolled, according to new data from the Social Security Administration.
Compared with June 2009, the month the economic recovery officially started, the labor force has shrunk by 365,000, a trend that has never occurred in any post World War 11 recovery. Those saw the labor force climb by the millions by this point in their recoveries, even as unemployment rates were driven down.
The decline in the workforce combined with the growing population has pushed the labor force participation rate — which compares those working or looking for a job the working age population — fell again in April to 63.6%. That's down from 65.7% in mid-2009, and is the lowest it's been since 1981.
Economists note that the shrinking labor force has masked the true size of the unemployment problem, since people who quit looking for a job are no longer counted as unemployed.
In fact, had the labor force participation rate had stayed where it was in June 2009, the unemployment rate would be around 11%.
Many of those who've quit looking have instead signed up for disability benefits.
So far this year, nearly 1 million workers have applied to get on the disability program. According to the Social Security Administration, more than a third will eventually be enrolled in the program.
Almost 90,000 workers enrolled the program in April, pushing the total for new enrollees over 333,000 in the first four months of the year.
If you add in spouses and dependents, the number of beneficiaries added to the program so far this year climbs to 539,000.
As IBD reported recently, more than 5 million workers and their families have enrolled in the disability program since Obama took office.
A report last fall from the Obama administration's economic advisers warns that the mass exodus of workers who can't find a job onto the disability rolls poses a long-term risk to the economy, since once enrolled, these workers almost never return to the active workforce. This can, the report said, result "in a loss to society of the economic contribution those workers could have made."
  • monthly applications for SS disability benefits?
  • monthly applications for those leaving SS disability?
  • monthly application for SS benefits?
  • monthly statistic for those reaching 62 years of age?
  • monthly statistic for those reaching 65 years of age?
  • monthly statistic for those reaching 67 years of age?
  • monthly statistic for work force participation?
  • monthly statistic for those entering the work force?
  • monthly statistic for those leaving the SS Insurance Program due to death?

Employers in U.S. Added Fewer Jobs Than Forecast in April  By Shobhana Chandra - May 4, 2012 12:12 PM ET

American employers added fewer workers than forecast in April and the jobless rate unexpectedly fell as people left the labor force, adding to concern the economic expansion is cooling.

Payrolls climbed 115,000, the smallest increase in six months, after a revised 154,000 gain in March that was larger than initially estimated, Labor Department figures showed today inWashington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated.
A representative from Time Warner Cable takes job applications at a job fair on May 3, 2012 in New York City. Photographer: Spencer Platt/Getty Images
May 4 (Bloomberg) -- Chad Moutray, chief economist at National Association of Manufacturers, talks about U.S. manufacturing and employment. He speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)
May 4 (Bloomberg) -- John Silvia, chief economist at Wells Fargo Securities LLC, talks about the April U.S. jobs report, economy and Federal Reserve policy. Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 rise in March that was more than initially estimated, Labor Department figures showed. The jobless rate fell to a three-year low of 8.1 percent. Silvia speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)
May 4 (Bloomberg) -- Roger Altman, chairman of Evercore Partners Inc. and former U.S. deputy treasury secretary, talks about today's April jobs report and the outlook for the economy and Federal Reserve monetary policy. Altman, speaking with Betty Liu on Bloomberg Television's "In the Loop," also comments on Facebook Inc.'s initial public offering. Bloomberg's Michael McKee also speaks. (Source: Bloomberg)
Audio Download: Gross Says Job Data Should Force Reevaluation
Job seekers at a job fair on May 3, 2012 in the Queens borough of New York City. Photographer: Spencer Platt/Getty Images
Stocks and bond yields fell on bets that a slowdown in hiring will restrain the wage growth needed to fuel the consumer spending that accounts for 70 percent of the world’s largest economy. The data pose a challenge for President Barack Obama, who was attacked by Republican challenger Mitt Romney’s campaign today for his “failed economic record.”
“We’re still very much on the recovery path, but we’ve got a huge amount of ground to make up in the labor market,” saidScott Brown, chief economist at Raymond James & Associates Inc. in St. PetersburgFlorida, who accurately forecast the unemployment rate.
The Standard & Poor’s 500 Index declined 1.5 percent to 1,371.41 at 12:08 p.m. in New York. The yield on the 10-year Treasury note fell to 1.88 percent from 1.93 percent late yesterday.
Transportation and warehousing, government agencies and construction all cut jobs in April. Bloomberg survey estimates ranged from increases of 89,000 to 210,000 after a previously reported 120,000 rise in March.

Obama Campaign

The data come a day before Obama formally opens his re- election campaign with rallies in the swing states of Ohio andVirginia. Romney has made the president’s stewardship of the economy a point of attack and polls show voters are focused on jobs and growth.
“From green jobs that never materialized to an unemployment rate that has remained above 8 percent for 39 straight months, President Obama’s rhetoric simply doesn’t match with his failed economic record,” Andrea Saul, a Romney Campaign spokeswoman, said in a statement.
Alan Krueger, chairman of Obama’s Council of Economic Advisers, focused on 26 consecutive months of private job growth. Today’s report “provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression,” he said in a statement.
Private payrolls, which exclude government agencies, rose 130,000 last month after a revised gain of 166,000. They were projected to rise by 165,000, the survey showed.

Auto Revival

The Obama campaign is pointing to a revival in the auto industry to support his record.
Chrysler Group LLC, the automaker controlled by Fiat SpA, said it will accelerate the addition of 1,100 jobs and a third crew of workers by hiring them in November, pulling ahead plans for increasing production in early 2013. Earlier this week, it also said four plants will skip normally scheduled two-week midyear shutdowns to meet increased demand.
At the same time, cost-cutting is prompting reductions at some companies. H&R Block Inc. (HRB), the biggest U.S. tax preparer, plans to reduce 350 jobs and close about 200 company-owned offices. AMR Corp.’s American Airlines this month said it will eliminate 1,200 airport agent, baggage and cargo jobs as part of a bankruptcy restructuring plan to trim annual labor spending.
Weakening consumer confidence is hurting sales at businesses like Tops American Grill, Bakery & Bar in Schenectady, New York.

No Plans to Hire

Evan Christou, the owner, said he has no plans to add to his staff of 42 employees. Sales were up about 6 percent earlier this year before dropping off when gasoline prices went up. He said he would need to see a significant increase in sales for a sustained period before hiring more workers.
“We’re kind of consolidating and multitasking,” said Christou, 49. “In this market, it’s pretty much a wait-and-see attitude.”
Economists pointed to some bright spots in today’s report. Payroll gains for the prior two months were revised higher by a total of 53,000 jobs. And some of the slowdown may reflect unusually warm weather that boosted hiring early in the year.
“The weather was mild in January and February, and it’s very possible that hiring was pulled forward,” said Christophe Barraud, an economist and strategist at Market Securities Paris LLP, who correctly forecast the payrolls figure. “This report is not good, but we have to wait for the next one to see if the real trend is actually decelerating.”

Jobless Rate

The unemployment rate was forecast to hold at 8.2 percent, according to the survey median. It has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.
The participation rate, which indicates the share of working-age people in the labor force, fell to 63.6 percent, the lowest since December 1981, from 63.8 percent.
The report showed a drop in long-term unemployed Americans. The number of people out of work for 27 weeks or longer fell as a percentage of all jobless, to 41.3 percent.
Among those still looking for work is David Bouchey, who lost his job as a financial analyst in 2007. He said he thought his years of experience in the industry and three post-graduate degrees would land him a job.
“I’m overqualified for almost every job I apply for,” said Bouchey, 54. He, his wife and two sons live on about $1,000 a month in public assistance. “I never thought the economy would be this bad.”

Hourly Earnings

Average hourly earnings were $23.38 in April, essentially unchanged from the month before, today’s report showed. It was the first time without an increase since August. Compared with April of last year, earnings climbed 1.8 percent, matching January as the smallest in a year. The average work week for all workers held at 34.5 hours.
Faster economic growth would help lay the groundwork for more hiring. The economy expanded at a 2.2 percent annual rate in the first quarter after a 3 percent pace the prior three months, the Commerce Department reported last week. Consumer spending grew 2.9 percent, the most in more than a year.
The improvement in the U.S. contrasts with some of the other major economies. Joblessness in the 17-nation euro area increased to 10.9 percent in March, the highest since April 1997, from 10.8 percent a month earlier, data showed this week.
United Parcel Service Inc. (UPS), the world’s largest package- delivery company, is among firms taking note.

‘Positive News’

“During the quarter, the most positive news has come from the U.S. where indications of economic rebound are evident,” Scott Davis, chief executive officer of UPS, said on an April 26 conference call. “Retail sales have grown faster than expected and the employment environment has improved. On the other hand, economies in other parts of the world continue to face challenges.”
Federal Reserve policy makers last month repeated their plan to hold borrowing costs low through late 2014 to spur growth.
“The unemployment rate has declined but remains elevated,” Fed policy makers said in an April 25 statement. The group “expects economic growth to remain moderate over coming quarters and then to pick up gradually,” and “anticipates that the unemployment rate will decline gradually.”
Today’s report showed that factory payrolls increased by 16,000, the smallest in five months. Construction companies cut jobs for a third straight month. Retailers added 29,300 employees, almost recouping losses in the prior two months. Employment gains at service-providers were the weakest since August. Government payrolls declined for the seventh month in the last eight.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- held at 14.5 percent.