Nutter's Washington

Obama may be listening on Employment Tax Cuts

Bloomberg News reports today the Administration is discussing a temporary cut in the payroll taxes businesses pay on wages as officials consider ways to spur hiring amid signs the anemic recovery is slowing, http://www.bloomberg.com/news/2011-06-08/payroll-tax-break-said-to-be-discussed-by-obama-aides-amid-slowing-economy.html

I guess the White House is reading my stuff as I recommended this very tact on Monday on this very subject. I am really flattered. There is hope, if they are listening to such suggestions. Just kidding, they do not listen to me and I am not the smartest guy in the room here. But, it is a good idea. 

On another matter, I should note the Biden Group is back in the saddle today to discuss the debt limit extension. No closer to anything of significance but it is not August yet.

It should be further noted, you can hear the drum beat that any spending cuts have to be very modest, and better yet delayed until 2020 or maybe 2035. I read it in the New York Times this morning on the front page, no less, so must be true. 

It is clear the economy is weak and it is probably weaker than projected. A very good op-ed piece by Martin Feldstein yesterday in the Wall Street Journal gave a convincing case for that analysis. A motto that has permeated this Administration--" never let a good crisis pass"-- is applicable here. The weak economy is a perfect opportunity to argue to preserve and even expand government spending. Taking the economic merit out of the equation, the politics are clear and the sound will get louder. We just can not risk a cut in federal spending---I can almost put it to music. 

 

 

 

Pawlenty Tax Plan: Graded

This article in a slightly different fashion can be found at: MarketWatch.com http://www.marketwatch.com/story/grading-the-pawlenty-tax-plan-2011-06-08

Former Republican Governor Tim Pawlenty gave a major look at his economic program should he be elected President. Speaking in Chicago, Pawlenty put forth in alternating concrete proposals and political rhetoric some specifics of his plan, indicating a goal of creating a 5 percent economic growth rate. In order to achieve this high rate, he would raise the Social Security retirement age, cap and block grant Medicaid to the States, cut business taxes, and remove "special interest handouts, carve-outs, subsidies and loopholes," cut personal tax rates and freeze federal spending until the budget is balanced. Wow, and on the 7th day, I hope he rests. Pawlenty is ready to unleash the dogs of war, storming the Citadel of Liberalism.

 It is an ambitious plan, a bold plan, and an unachievable plan. However, since he is a serious candidate, the substance bears an examination. I will not dwell on the spending cuts, balance budget, anti-regulatory suggestions. Not that they are not important, but it is the tax policy that draws attention here.

Congressman Anthony Weiner: It is the lying, stupid

The whole tale of Congressman Anthony Weiner is a shameful one. It is a sad story of a man who made some wrong decisions and then lied about it. He not only lied about it, but his denial effort for a week mirrored a military campaign. Talk shows, interviews, press conferences. In the end, without a choice, he decided the only way to save his political career was to make the obligatory confession. I do not care what he wants to do in his marriage or if his ego demands he sends pictures over the internet to women he does not know. It is the lying.  Although his conduct was bizarre, we all have made idiotic decisions. However, the coverup  has destroyed all credibility and trust. If he had any self respect or respect for the people he represents, he would leave the building. 

I doubt he will go quietly into the night. They rarely do. 

Economic Suggestion: Reload the tax cut gun and shoot

The economic news for the Administration has not been good lately. In fact, you could characterize it as awful, terrible, horrendous, and pathetic. On Friday, the jobs report showed an anemic increase in private sector jobs and the unemployment rate going in the wrong direction. Economic growth is not occurring at a rate to necessary to even stay even. 

Last week, it was reported housing prices continue to decline with 19 out of the top 20 markets showing decreases. A full twenty eight percent of all home sales are foreclosures. Goodness knows how may more to come.

Oh, no! not again--Moody's Investor Service Strikes

Moody’s Investors Service has indicated it expects to place the US government’s rating under review for possible downgrade, due to the very small but rising risk of a short-lived default. 

I am sorry, is this the same Moody's that gave all the sub-prime mortgage-backed securities the two thumbs up rating?  The same guys who could not smell the stink after they stepped in it. Those guys who were asleep at the wheel? Those guys who plain just could not figure it out?  Now this is irony. Precious irony and boldness.

First of all, if the Federal government was a business, its paper would be junk status. Do not need Moody's to figure that one out. The only reason the government can pay its debt is that it prints the money. Get it? If the government needs more money, it will borrow it at whatever rates or just print and create it along with the cronies at the Federal Reserve. So not  to worry Moody's Investor Services, the government can always pay up. 

But, thanks for the heads up. Will keep it in mind. You being on the job guarding my portfolio or what is left of it makes me feel better.  

White House Meeting on Federal Debt Yields Nothing but Heat Stroke

With a potential debt default by the U.S. government just sixty or so days away, the standoff between the White House and GOP congressional leaders continued yesterday. The White House in a public relations move invited the Republican House Members for a get together. President Obama presided in the center of a table set up in the East Room of the White House. The best and most entertaining feature of the meeting was to see the Republicans get out of their buses and walk up the driveway to the mansion. It was hot, sweltering, meltdown conditions and I was afraid many of them would fall to their knees with heat prostration. Or at least pit out their neckties or scarves. The march looked like a Shriners’ convention in mid-July in Houston except they were not wearing those nifty little hats. Well, at least the March of the Penguins on Asphalt

The substantive result of the discussion: Nothing, Nada, Zip. Zilch. The parties did agreed it was a good idea to meet and, yes, the debt limit is an issue which has to be resolved more or less.

House Debt Limit Vote was Necessarily Unnecessary

The House of Representatives voted yesterday 318 to 97 against raising the Federal debt limit. It was an unnecessary vote, perhaps a silly vote. It is the type of vote one would expect Senator Majority Leader Harry Reid (D-NV) to schedule--a vote meant to embarrass or make the opposition take a particular position or to make a futile point.

Not one Republican lawmaker voted to raise the debt ceiling from $14.3 trillion to $16.7 trillion, an amount projected to cover the government’s outlays through the end of next year. It is the incredible pace of deficit spending that makes all of this necessary. The Republican Leadership wanted to defeat the debt limit expansion-a goal sought by the Administration- and was trying to make a point, trying to get someone in the Executive branch to take them seriously. The vote screamed-look at me! Nearly half of the House Democrats sided with the Republicans.