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07/17/2011

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Jack

RA....... With Texas being in charge of raising nearly ten percent of America's youth it would be good IF they would take their educational obligations a bit more seriously.

Despite Rove pawning Bush off as the "education Gov" Texas is saved from being dead last on ACT and SATs by the Carolinas, MS and perhaps GA. Worse yet......... the scores they DO attain are from just 50% of HS grads taking the tests...... one assumes the best of the bunch? And......... THAT is after a 40% drop out rate over the last 4 years of "schooling".

It's such negligence that obligates the Feds to step into the breach. IF....... "conservatives" don't like federal intervention they really ought to better live up to their responsibilities, wouldn't you think?

BTW......... Texas spent millions in court trying to maintain their "right" to prejudicial shtfund the schools of "those areas". In some instances one side of town would spend three or more times what was spent on the "other side". But, finally, about five years ago their appeals and stalling tactics exhausted, "Hooray!" Texas is under court mandate to provide equitable and adequate funding to the schools of ALL of their kids. In a decade......... we should reap the rewards.

And No we shouldn't let them secede....... the regular hardworking Texans are better off with Federal protection from what the "old boy club" and the likes of Perry would do to them if they didn't have a modicum of Federal protection.

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R.A.

"RA....... With Texas being in charge of raising nearly ten percent of America's youth it would be good IF they would take their educational obligations a bit more seriously."

Every major demographic in Texas does better than their national average.

http://iowahawk.typepad.com/iowahawk/2011/03/longhorns-17-badgers-1.html

How well a state, or in fact school district, is doing in "education," is based much more on demographics than government policy. But, to the extent that government policy matters Texas is doing something right.

"Texas is under court mandate to provide equitable and adequate funding to the schools of ALL of their kids. In a decade......... we should reap the rewards."

Lol...yes this will be the one time you "close the achievement gap."

School funding does not cause better performance. True, the better students tend to be in the richer schools, but that's because they're genetically smarter (which is why their parents were able to make money and send them to good schools). Google the "Coleman Report".

an observer

R.A.

We can both agree that you Un-American and as dishonest as any conservative.

The South fought the Civil War to keep slavery.

Lincoln fought the Civil War to Preserve the Union.

If you don't knnow why, then you shouldn't be allowed to keep you citizenship (I doubt you are a citizen, anyway), vote, own property, have a job, or participate in America life in any way.

an observer

Christopher Graves

Your are dishonest and Un-American

It was Cheney who said, "Deficits don't matter."

Democrats worked for years to restore fiscal sanity after Reagan Bush and achieved a balanced budget under Clinton, which Bush Cheney and the Republicans immediately gutted.

Obama is the more fiscally responsible than Clinton and has a deep understanding that, as we recover from the Financial Depression we just experienced, we must tackle both spending and revenues to restore balance.

More than anyone he also knows that the path to that is finding a means or method of both providing health care and controlling health care costs.

On this, it is very interesting to see that Vermont is taking on a single payor approach because, as a suburb of Montreal, it cannot compete for factory locations with Canada. (Similarly, we often think that Detroit's problems are because auto jobs went South. Has anyone asked whether its problems might also be that jobs went North, to Canada, because it costs less for employers to do business in Canada?)

Jack

Observer -- good point:
Canada’s exports to America amounted to $339.5 billion or 16.1% of overall US imports.

1. Crude oil … $62.7 billion
2. Passenger cars … $31.4 billion
3. Natural gas … $30.7 billion
4. Automotive accessories … $12.1 billion
5. Other petroleum products … $8.7 billion
6. Aluminum … $7.6 billion
7. Fuel oil … $6.7 billion
8. Plastic materials … $5.8 billion
9. Trucks and buses … $5.7 billion
10. Fertilizers and pesticides … $5.2 billion

Say 1.5 million of our 10 million market?

Mexico gets a piece too: Mexico’s exports to America amounted to
$215.9 billion or 10.3% of overall US imports.

1. Crude oil … $37.1 billion
2. Automotive accessories … $20.4 billion
3. Video equipment (DVD) … $18.6 billion
4. Passenger cars … $13.9 billion
5. Trucks and buses … $8.4 billion
6. Electric apparatus … $8.1 billion
7. Telecommunications … $7.3 billion
8. Other household goods … $7.2 billion
9. Engines and engine parts … $5.1 billion
10. Household appliances … $4.6 billion

Note that but for oil we'd run trade surpluses with each.

Time to switch heavy rigs to NG and lighter ones to plug-in hybrids.

Come to think of it........ as a Volt uses so little fuel, perhaps fueling the small back-up engine with compressed NG. But then...... with it using so little fuel anyway..... not much gain per unit.

Pickens has it right on switching big rigs to NG. With NG btu's being a third of diesel btu's the savings at 65 mph are nearly enough to pay the driver, plus much easier on the environment AND it's OURS!


Christopher Graves

Thanks for your response to my comments above, Jack. Yes, Americans on average pay in a lot less than they receive in benefits from Medicare. Here is a link to a discussion of this problem by David Brooks (“ Where Wisdom Lives,”* New York Times,*Published: June 6, 2011 ).

http://www.nytimes.com/2011/06/07/opinion/07brooks.html?_r=1&nl=todaysheadlines&emc=tha212

He has different figures in this column that I just supplied a link to than I heard him present several weeks ago on his regular discussion of current affairs on Friday’s with Mark Shields and Jim Lehrer during the *PBS News Hour.* That is where I got the figures in my first post on this topic. I have heard other figures as well, but they all show that typically people receive considerably more from Medicare, and Social Security for that matter, than they pay into the system in taxes.

This problem shows up at the macro level, naturally, and has been calculated in various ways. Economists Jagadeesh Gokhale and Kent Smetters have calculated what they term the “generational imbalance” and “fiscal imbalance” of Federal spending to be in excess of $63 trillion that is primarily due to the shortfall of taxes necessary to support Social Security and Medicare with the largest shortfall coming from Medicare. That figure has increased since they first presented their study. Here is a link to their discussion followed by an update:

http://irm.wharton.upenn.edu/WP-Fiscal-Smetters.pdf

http://www.nber.org/chapters/c0066.pdf

Medicare is a basically a "pyramid scheme" like Social Security. Both are running up against the hard demographic reality that there are fewer people paying into the system. That problem has been aggravated over the years by political promises of increased benefits. Medicare's problems are also aggravated by the increasing costs of medical care.

In his column, David Brooks makes the point that plans employing some elements of a market-based approach have, in practice, held down medical costs.

“Advocates, like Alain Enthoven of Stanford, point out that competition-based plans have improved outcomes in many places. Such plans cover employees of the University of California and state employees in California, Wisconsin and Minnesota. They also note that the Medicare prescription drug benefit also uses a competition model. Consumers have been adept at negotiating a complex marketplace, and costs are 41 percent below expectations.”

So, there is reason to believe that prices and markets do make a difference. I am suggesting moving even further in the direction of the market by limiting third-party payers. I am also in favor of easing entry into the health care market allowing nurse practitioners and Physical Assistants to offer primary care
services without the supervision of an M.D.

Finally on the point of greater equality of result, I have repeatedly argued against any other concept of equality than a formal moral equality of all persons.

Christopher Graves

Observer, I am honest and I am an American. I haven't done or said anything that should reasonably prompt you to question my integrity.

As for my being an American, I am one by birth and heritage. I was born in Atlanta, Georgia, and have lived my entire life in the United States. I have traveled abroad though. My family living in America dates back to Seventeenth Century Massachusetts. They moved to Georgia around the time of the Revolution. My mother's family came here in the Eighteenth Century on the same ship as William Penn.

I am an American on philosophical grounds, too. I affirm and argue for the philosophy of John Locke and the English Whigs that formed the nucleus of the Founders' philosophy. I am a Jeffersonian in my political and social philosophy. How much more American can you get?

NEH

If tax cuts are the solution to our economic ills, then why after eleven years of them, is the Nation in its worse economic state since the Thirties? Anyone doing a causal analysis on the current raw data would clearly see that tax cuts do not stimulate an economy. So why the current call for more and greater tax cuts to stimulate the economy and solve our budgetary crisis? Ignorance and the belief in a fiction and fantasy that has no basis in current economic reality? In order to bring things back into balance, an enlightened approach to taxes, customs, tariffs and duties must be imposed coupled with "loophole" elimination and unnecessary expenditures elimination. Remember, "Revenues must be greater than or equal to expenditures"...

As has been said, "Time to think anew and act anew". The only way out is to recreate a harmony of interests between Agriculture, Business, Commerce, Industry and Government. Coupled with the acceptance of the fact that Government, Business/Industry and the Consumer are the big three of any Macro-Economic system.

Jim

Almost all of the commentors here are honest AND patriotic in their opinions and analyses. No reason to assume otherwise.

Even if/when the debt and defit problems are solved, the economy will adjust downward both in terms of quantity and quality. We still have a few bubbles needibg deflation ie health care, housing and higher education. There has already been tremendous downward pressure on business if for no other reason than organizational models. Commonwealth Edison in Illinois is a good example. They no longer generate power, cut trees or maintain and repair their own infrastructure. All of that is either purchased or subed out which complicates communication and some waste. Stock holder interest trumps infrastructure investment, the regulatory agencies are somewhat impotent and most ComEd people have backup generatiors at their homes (What does that say about reliability). Does anyone think that will get lower costs and/or better quality? Frankly speaking, "harmony of interest" requires folks who are interested in the other guy as much as in himself/herself/themselves AND in the long term. Without coercion (never works), I don't see that happening soon.

John

http://blogs.wsj.com/economics/2011/07/20/u-s-offshores-its-position-as-shoppers-for-world/

"Who is replacing U.S. shoppers? No surprise: international consumers, especially in emerging markets. Coke saw its big sales gains in China and India. Apple said Asia, including China, powered its sales. The Harry Potter film racked up a record gross of $307 million in 59 nations excluding Canada and the U.S.

The shift is part of the structural change going on in the global economy. U.S. consumers are slowly ceding their crowns as “Shoppers for the World.” The abdication exposes the wide gap within the American consumer sector."

...A little bit more socialism and America will regain its world leadership. Any time now...

an observer

If tax cuts are the solution to our economic ills, then why after eleven years of them, is the Nation in its worse economic state since the Thirties? Anyone doing a causal analysis on the current raw data would clearly see that tax cuts do not stimulate an economy.

Observer does

Economist Robert Dugger has a sound explantion: fiscal discounting

TANSTAAFL

Observer and NEH offer comments that, at best, are worthy of the Castro brothers or Hugo Chavez. Less charitable readers could readily infer that Observer and NEH would be right at home in North Korea.

an observer

Tanstaafl

You are clueless.

Since Republicans started cutting taxes and fighting two wars without pay for them and without regard the deficits being created, private investment in the US has fallen dramatically with attendant job loss.

The reason is that any sensible investor could see where we were going to end up was where we did---in a severe financial depression and no ability to make the massive Keynesian expenditures necessary to restore confidence and demand. The stimulus didn't work because is was woefully inadequate in size and poorly planned designed, and executed, all due to political friction.

This isn't Marx its 101 capitalism. Capital is going to flea from a dysfunctional political system, which the Republicans have given us for 30 years.

Look at the market yesterday, when a couple of Republican Senators had the good sense to suggest that we raise taxes.

Here, it is important to recall that Keynes did not approve of the perpetual deficits of Reagan and Bush I and II. In those years we should have been running a surplus.

Knowing what was coming, in a process called fiscal discounting (anticipating future economic troubles) capital has been fleeing the US and doing to China and elsewhere for 25 years.

The prosperity associated with Clinton's tax increases proved that the mechanism exists.

Anyone with common sense knows that we need a grand bargain that cuts spending and raises revenue. Democrats need to learn that taxes are trust funds, to be spent far more wisely, and Republicans need to learn that fiscally weakening the government is horrible idea (look at our lack of foreign policy options, due to all the tax cuts)

Alen Greenspan

Lincoln fought the Civil War?

Jack

Observer: Good post! And Tans? You? Standing on the fine record of the "conservatives" attempting to govern? What were your favorite policies of the Bush admin?

NEH

Tanstaafl, I love it when such an enlightened view resorts to painting everything with a broad brush from the "RED" tar bucket as the necessary element of economic analysis and the solution to our current Economic Crisis past and present. No wonder, given the ideological slant involved, we have economic problems. It appears you have drunk deeply from "The Well of McCarthyism".

Now with that said and done, let's get back to the problem at hand.

TANSTAAFL

Observer, please go learn to spell and punctuate. No one will give you any serious attention until you do.

NEH, thank you for confirming that my earlier comment was on target. Above, pouring out your own "tar bucket," you likened the Republicans to Al Qaeda and the Nazi Party. The Leninist propaganda you spout is precisely the problem at hand. Your inability to recognize the fact belies your pathetic effort to simulate a voice of reason.

Both, given the chance, would oversee gulags. Marxist dolts.


vibram five fingers

Both Labour and the Tories would have had to inflate their way out of this deficit. The difference with the Tories is they are trying to achieve with negative growth. Brilliant.

Notice today how Mervyn King had to downgrade growth “forecast” while having no real answer to Faisal Islam or Paul Mason when they questioned the credibility of the inflation target? Apparently, inflation is the price we have to pay. The unforeseen resilience of the underlying inflationary pressures, if inflation was a deliberate policy of the MPC, is the elephant in the room. Seems it is one of those known unknown elephants, according to MK: we can now see the reasons why it has happened.

One thing is for sure: there are more questions than answers down on Threadneedle Street and if growth doesn’t return and quick, we’re all in for a bad decade or two.

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A Bajaj

"Without borrowing, however, it will not have enough money to pay noncontractual obligations in full, such as government salaries, and entitlements such as social security, Medicare, and Medicaid, and a host of subsidies. .... interest rates may rise, and stay higher, because of doubts about the basic competence of American government. Those doubts .... may deepen the current economic downturn, which in turn will reduce tax collections, increase transfer payments, and in both respects increase the federal deficit. "

Hate to point out the elephant in the room, but the American Government IS incompetent. Why are they making commitments to pay that they cannot possibly meet? they need to renege on their payments, interests rates do need to go up, and the government needs to live within its means. Anyone with a modicum of practical common sense can see that any government that makes promises to pay that are 50% more than their revenues IS INCOMPETENT.

Jack

Bajaj: One strongly suspects that the "full faith and credit of the US government" means.................. us!

annnd! something to consider:

It's great to know that during the worst economic crisis since the Great Depression, the wealth of the 400 richest Americans, according to Forbes, actually increased by $30 billion. Well golly, that's only a 2 percent increase, much less than the double digit returns the wealthy had grown accustomed to. But a 2 percent increase is a whole lot more than losing 40 percent of your 401k. And $30 billion is enough to provide 500,000 school teacher jobs at $60k per year.

Collectively, those 400 have $1.57 trillion in wealth. It's hard to get your mind around a number like that. The way I do it is to imagine that we were still living during the great radical Eisenhower era of the 1950s when marginal income tax rates hit 91 percent. Taxes were high back in the 1950s because people understood that constraining wild extremes of wealth would make our country stronger and prevent another depression. (Well, what did those old fogies know?)

Had we kept those high progressive taxes in place, instead of removing them, especially during the Reagan era, the Forbes 400 might each be worth "only" $100 million instead of $3.9 billion each. So let's imagine that the rest of their wealth, about $1.53 trillion, were available for the public good.

What does $1.53 trillion buy?

It's more than enough to insure the uninsured for the next twenty years or more.

It's more than enough to create a Manhattan Project to solve global warming by developing renewable energy and a green, sustainable manufacturing sector.

And here's my favorite: It's more than enough to endow every public college and university in the country so that all of our children could gain access to higher education for free, forever!

Jack

Chris: What you say of Medicare (SS is quite different and easily fixable) is also true of "private insurance"........ except that as our already high cost of H/C continues to soar they, can, have, and will increase premiums. For those wanting to predict future financial disasters just run out the expected cost of H/C premiums at the time "Medicare is broke".

In both, of course, we "tend" to get back more than put in as private H/C can invest the premiums from the young and mostly healthy until the bills of being 50-ish come in. Surely they are VERY happy to see oldsters OFF their rolls and onto those of Medicare.

In short Medicare can't be "fixed" while H/C inflation so dramatically out paces the stagnant wages of most.

Those favoring rationing by "free markets" simply don't understand the nature of H/C. One simply does not "go shopping" when ill, and even less so when under the care of their trusted GP or specialist.

IS this the same country that once had a high percentage of NOT for profit hospitals?

Lastly "shortfalls primarily due to" this or that are highly subjective.......... for example my list would feature the interest that will be paid for the next several generations and beyond on the DEBT amassed by the "deficits don't matter" advocates, and though our military expense is a fairly small fraction of GDP it is the TOP single entry of the US budget and still larded with pork, for example $6 billion MORE C-17's NOT requested by the Pentagon.

IF....... 30 nations, mostly, with lower per capita GDP's can extend H/C to ALL of their citizens for 10% of those smaller GDP's surely we are doing something VERY wrong not to have a streamlined system serving ALL of our folk for the 17% of GDP that we do spend.

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