Obama on pace to increase the debt by $2.4 trillion this year

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BY SIMON BLACK

OK, this is pretty nuts.

According to data released by the Treasury Department yesterday, the US national debt has soared by a whopping $294 billion since the start of the 2017 fiscal year, just 45 days ago.

That’s an annualized increase of 13%.

So if they keep up this pace, the national debt will increase by $2.4 trillion this fiscal year, surpassing $21 trillion by next September.

It’s hard to believe how rapidly the debt is growing; debt growth is far outpacing the growth of the US economy… and there’s no way to pretend that this is good news.

That doesn’t stop leading economists from trying.

Nobel Laureate Paul Krugman says “debt is good” because the US economy has grown so much over the last 200 years despite not having been debt-free since 1835.

This kind of logic is astonishing.

Aside from a few anomalies like World War II and the American Civil War, debt levels over most of early American history were low.

100 years ago in 1916, US debt was about $3.6 billion; as a percentage of GDP (i.e. the size of the US economy), that was about 7%.

Today’s debt of $19,867,119,032,053.28 is actually bigger than the entire US economy at over 106% of GDP.

Yet in Krugman’s view, the fact that America prospered a century ago when the debt was 7% of GDP means that the nation will continue to prosper with a debt at 106% of GDP.

Amazingly enough, Krugman has been awarded our society’s most esteemed prize for intellectual achievement. It boggles the mind.

To be fair, there is such a thing as “good debt” versus “bad debt”, and it’s not difficult to distinguish between the two.

If you can borrow money at 5% in order to make a safe investment that has a 25% return, for example, that may very well qualify as “good debt”.

If you borrow money at 5%… or even 1%… and then squander the borrowed funds on useless trinkets, that’s clearly “bad debt”.

In 1803, the startup US government negotiated the Louisiana Purchase from France, a real estate acquisition that doubled the size of the US.

It was the mother of all distress sales. France was desperate for cash, and the administration of Thomas Jefferson negotiated a price that valued the land at around $15 million.

Adjusted for inflation to 2016 dollars, Thomas Jefferson paid about 40 cents per acre to acquire the land that comprises fifteen states and has generated trillions in economic activity.

Naturally the US government had to borrow money that year to conclude the Louisiana Purchase with France, so the national debt increased slightly in 1804.

But when you consider the extraordinary economic benefit of that purchase, it clearly qualifies as “good debt”.

Fast-forward to our modern era and we see that the debt is increasing by more than a trillion dollars each year.

What are the good citizens of the United States receiving in exchange for taking on so much debt?

It’s not like the government bought up half of Mexico or colonized Mars.

No, instead they wasted $2 billion on the Obamacare website, most of which went to a company whose top executive just happens to be an old friend of Michelle Obama.

Today, the US government has to borrow money just to pay interest on the money it’s already borrowed. This is almost the textbook definition of bad debt…

In fact, the government now spends nearly all of its tax revenue just on mandatory entitlement programs like Social Security and Medicare, plus interest on the debt.

The real kicker is that Social Security and Medicare are massively underfunded and quickly running out of cash… so they’ll both require a major bailout (i.e. MORE debt).

Interest payments, meanwhile, total hundreds of billions of dollars each year even though interest rates are at record lows.

Today the government pays less than 2% interest on its debt.

Ten years ago in 2006, the average interest rate on US debt was over 5%.

Back then 5% was considered incredibly low compared to the higher interest rates of the 1980s and 1990s.

But today, 5% would bankrupt the US government. It’s pitiful.

So unless interest rates stay at these record lows forever (or perhaps go negative), the government’s interest payments are going to explode.

Debt… particularly bad debt… is an absolute killer.

Excess debt has been responsible for bringing down some of the largest companies in the world. It bankrupts individuals.

And excess debt has caused the decline of some of the largest superpowers in the history of the world.

There are a lot of people, led by their cheerleader Paul Krugman, who outright ignore this problem and pretend that the US government can continue expanding its debt forever without ever suffering a single consequence.

And I know there are a lot of people keeping their fingers crossed hoping that a new administration will steer the ship in the right direction.

Look, I’m all for hope and optimism.

But it’s important to stay rational. These problems aren’t going away.

And you won’t be worse off for having a Plan B that provides solid protection from the consequences of these obvious trends.

Do you have a Plan B?

If you live, work, bank, invest, own a business, and hold your assets all in just one country, you are putting all of your eggs in one basket.

You’re making a high-stakes bet that everything is going to be ok in that one country — forever.

All it would take is for the economy to tank, a natural disaster to hit, or the political system to go into turmoil and you could lose everything—your money, your assets, and possibly even your freedom.

Luckily, there are a number of simple, logical steps you can take to protect yourself from these obvious risks:

Morici: The Wheels Are Coming Off Obamacare

BY PETER MORICI

Obamacare is becoming a nightmare. Health insurance premiums will jump an average of 22 percent in 2017, and federal spending to assist moderate income families is spinning out of control.
For Democrats, the answers are simple—raise taxes on the wealthy to further subsidize a failing system—or force a single payer system—which can dictate prices to service providers and compel their participation—onto reluctant Americans.

For conservative Republicans, the issue is more vexing. Merely repealing the law is not enough, because that would hardly return America to a free market.

Even before the Affordable Care Act, federal and state governments were paying nearly half of the nation’s health care bills.

At one extreme, Medicare and Medicaid reimbursement rates for doctors are tightly controlled and too low to sustain their practices. Many limit the number of patients they take from these programs, and the elderly and poor often face difficulty finding a primary care physician.

Well-off retirees can join concierge services, which charge high annual fees for access to primary care doctors, while the less affluent are left to scramble.

At the other extreme, the legislation establishing Medicare prescription coverage does not permit the government to negotiate prices. Pharmaceutical companies can set whatever prices they like knowing the elderly will simply send the bill to Uncle Sam.

Concierge services have generalized from the elderly to the entire adult care marketplace and created a two-tier system of access to physicians, while  reimbursements are setting drug prices arbitrarily high for everyone.

The basic premise of the ACA was to enroll nearly every working age American in large employer-sponsored insurance or policies sold on government run websites to create competition that would lower costs, but it has not worked out.

At HealthCare.gov, families often pay $500, $1000 or more a month for policies imposing high deductibles and co-pays and with quite limited provider networks. Many have lost access to family doctors, encountered limited out-of-state-coverage when they travel and are generally excluded from using higher cost providers where they live.

The latter can be life threatening. As of the end of 2015, for example, none of the policies offered access to New York included the Memorial Sloan Kettering Cancer Center.

Problems are particularly acute in areas where the number of specialists are limited, and hospitals and group practices are monopolized enough to resist negotiating much on price with insurance companies.

Insurance companies are taking big losses, resulting in the large premium increases noted above—or leaving the website markets across the country. At least 650 of counties nationwide will have only one company offering policies next year.

Many folks won’t feel the full brunt of rate increases, as the federal government is obligated to subsidize premiums for low and middle income families, but the Congressional Budget Office estimates the ACA will cost $8.9 trillion over ten years.

We simply cannot go back to what existed before. Private plans lost in the upheaval cannot be easily reestablished. Simple electoral calculus requires that millions of Americans now receiving subsidies continue to receive assistance purchasing health insurance. However, Americans should not be coerced into buying substandard policies at a government store, and costs must be lowered.

The German system of private insurance, like Obamacare, requires virtually everyone to have coverage, but costs are more tightly controlled. For example, regulators price new drugs according to how much they improve treatment over existing medicines.

Such government interference in pricing is an anathema to conservative Republicans like Paul Ryan, but the incongruity of Medicare paying whatever prices drug companies choose to set is wholly unrealistic.

Japan, Germany and other northern European countries spend about 11 percent of GDP on health care whereas the United States spends 17 percent.

In the end, if the Republicans want to avoid a single payer system that subjects most Americans to a choice between moribund and arbitrary service akin to that offered by the Post Office and IRS, then they will have to explore with the new president regulating prices inside a private marketplace.

Effective leaders work with the world as they find it, not as they think it should be.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1

HERE’S A LIST OF OBAMA ADMIN OFFICIALS WHO USED ALTERNATE E-MAILS TO CONDUCT GOVERNMENT BUSINESS

Agencies include EPA, IRS, HHS and more…

Kerry Picket | Daily CallerSEPTEMBER 26, 2016

The Obama administration from the top down managed to operate around the eyes of the public often by using pseudonyms when communicating with one another online.

Although President Barack Obama previously claimed to CBS he only found out about Hillary Clinton’s private e-mail server through news reports, Politico reported Friday that an FBI news dump shows he communicated with Clinton on her private server using a fake name.

The idea of using a fake name to communicate through e-mail is not an unusual one to Obama administration appointees. Clinton and even her daughter Chelsea obscured their names when communicating with one another. Chelsea went by the alias “Diane Reynolds” when talking to her mother over e-mail the night of the attack in Benghazi.

According to CBS News, Clinton, instead of using her formal state.gov email address, used the email HRod17@clintonemail.com or would sign off as “Gert” or “Gertie” to her friend Betsy Ebeling in Chicago. Another e-mail address she used was hdr22@clintonemail.com.

A “Richard Windsor” appeared to be an official at the EPA. The individual had an official epa.gov e-mail address, but it was later discovered through FOIA requests and public records that Windsor.Richard@epa.gov not only did not exist, but the e-mail address belonged to EPA Administrator Lisa Jackson.

“I don’t know any other agency that does this,” said Anne Weismann, chief counsel of the watchdog group Citizens for Responsibility and Ethics in Washington, which called upon the EPA’s inspector general to investigate the matter in 2012.

It did not stop at just the EPA. Health and Human Services Secretary Kathleen Sebelius, among other appointees, used secret e-mail accounts to conduct business, the Associated Press reported.

In June 2013, the AP asked for HHS’s unpublished secret email accounts from the agency, which the department initially resisted.
“The Health and Human Services Department initially turned over to the AP the email addresses for roughly 240 appointees — except none of the email accounts for Sebelius, even one for her already published on its website. After the AP objected, it turned over three of Sebelius’ email addresses, including a secret one. It asked the AP not to publish the address, which it said she used to conduct day-to-day business at the department,” the AP reported. “Most of the 240 political appointees at HHS appeared to be using only public government accounts.”

Eventually, the AP published Sebelius’s secret email — KGS2(at)hhs.gov — “over the government’s objections because the secretary is a high-ranking civil servant who oversees not only major agencies like the Centers for Medicare and Medicaid Services but also the implementation of Obama’s signature health care law. Her public email address is Kathleen.Sebelius(at)hhs.gov.”

The AP notes that “at least two other senior HHS officials — including Donald Berwick, former head of the Centers for Medicare and Medicaid Services, and Gary Cohen, a deputy administrator in charge of implementing health insurance reform — also had secret government email addresses.”

The Internal Revenue Service disclosed last year that Lois Lerner, the IRS official at the center of the agency’s targeting of conservative organizations controversy, also had a private e-mail account she may have used for government business.

Lerner’s second e-mail, discovered by the D.C. watchdog group Judicial Watch, is registered to the name “Toby Miles.”

“It is simply astonishing that years after this scandal erupted we are learning about an account Lois Lerner used that evidently hadn’t been searched,” Tom Fitton said in a statement to The Washington Times.

The use of a non-public pseudonym for e-mail communication within a government agency was done by address for Seth D. Harris when he was the acting labor secretary.

Did anybody at the Justice Department hold administration officials accountable for the use of such alternate emails? Unfortunately, the task would have been difficult for Attorney General Eric Holder who had two secret aliases — Lew Alcindor and Kareem Abdul Jabar, — to communicate through email at DOJ.

Read more: http://dailycaller.com/2016/09/25/heres-a-list-of-obama-admin-officials-who-used-alternate-e-mails-to-conduct-government-business/#ixzz4LP9FIGjz

Read more: http://dailycaller.com/2016/09/25/heres-a-list-of-obama-admin-officials-who-used-alternate-e-mails-to-conduct-government-business/#ixzz4LP9FIgIP

The Medicaid Ticking Time Bomb – A Budget-Gobbling Fiscal Disaster

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BY DANIEL MITCHELL

The burden of government spending is already excessive. But the numbers will get worse with the passage of time if policy is left on autopilot.

The main culprits are the so-called mandatory programs. Entitlements such as Social Security, Medicare, Food Stamps, and Obamacare that automatically dispense money to various constituencies are consuming an ever-larger chunk of the economy’s output.

And if you want to be even more specific, the fastest-growing entitlement program is Medicaid, which was originally supposed to be a very small program to subsidize health care for poor people but has now metastasized into a budget-gobbling fiscal disaster. Arguably, it’s the entitlement program most in need of reform.

So how big is the problem? Enormous if you look at the numbers from the National Association of State Budget Officers.

“States increased their spending in fiscal year 2015 by the biggest margin in more than 20 years, but most of the increase was thanks to huge leaps in Medicaid spending under the first full year of the Affordable Care Act (ACA). Spending increased last fiscal year, which ended on June 30 for most states, by 7.8 percent, according to new estimates from the National Association of State Budget Officers (NASBO). It’s the biggest boost since 1992 and was thanks to a 15.1 percent increase in Medicaid spending, much of that paid for via federal Medicaid funds. Illinois, Michigan, Kentucky, Nevada and Oregon saw more than 30 percent increases in federal funding because they expanded Medicaid under the ACA. But 2015 was also a year where states were putting up more of their own money again.”
Here’s the chart showing which outlay categories grew the fastest.

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The article points out that spending is outpacing revenue.

“On average, state revenues aren’t keeping pace with spending; NASBO estimates General Fund revenues will increase by just 3.8 percent.”
Though the real problem is that spending is expanding faster than the private sector, which is the opposite of what is called for by my Golden Rule.

One of the reasons Medicaid grows so fast is that the program is split between Washington and the states, which both picking up a share of the cost. This may sound reasonable, but it creates a very perverse incentive structure since politicians at both levels can vote to expand the spending burden while only having to provide part of the cost.

The National Center for Policy Analysis explains how this system produces bad decisions.

“Medicaid has a horrible financing mechanism: Federal transfers to states are not based on the number of poor people, or any other reasonable calculation. Instead, they depend on the amount of its own taxpayers’ money a state spends. Traditionally, when California spent $1 on Medi-Cal, the federal government kicked in $1. … So, state politicians hike taxes and spending on their own citizens in order to get as much funding as possible from people in other states (via the feds). Hospitals and Medicaid MCOs maximize this by agreeing to a state tax on themselves, which the state uses to ratchet up the federal funding. After multiplication, the money goes right back to these providers. … Stopping this wild spending growth requires fundamental reform to Medicaid’s financing. Congressional Republicans have proposed ‘block grants,’ whereby states would get federal Medicaid transfers based on their population of poor residents, not how much they gouge out of their own people.”

US budget deficit approaches $600bn, public debt to reach 77% of GDP

Slower revenue growth and large spending will expand the US budget deficit to $590 billion in the fiscal year ending September 30, according to the Congressional Budget Office (CBO).
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The deficit is expected to be $152 billion more than last year and $56 billion larger than CBO’s forecast in March and will equal 3.2 percent of the country’s economic output.

Such a budget deficit is more than the GDP of Sweden, Poland or Iran. In July, the US posted a $113 billion budget gap, bigger than the economies of Ukraine or Slovakia.

The largest deficit America has seen is $1.4 trillion in 2009, which dropped to $485 billion in 2014. US public debt will continue to grow and is projected at 77 percent of the country’s GDP by year-end.

On Wednesday, US public debt was more than $19.4 trillion, or almost $60,000 per citizen and $164,432 per taxpayer. Federal spending was approaching $4 trillion with Medicare/Medicaid, social security and the military being the largest budget items.

American revenues have grown by less than one percent in 2016 instead of the expected five percent. The reasons are mandatory spending for Social Security and Medicare, the federal retirement and healthcare programs for the elderly, CBO said.

The economy grew only one percent in the first half of the year, but the last months of the year will see a boost, according to CBO, bringing a two percent growth this year and 2.4 percent in 2017. This will add to hiring, putting pressure on inflation and interest rates.

Obamacare Insurers Looking for Taxpayer Bailout…

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Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.

Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled — not through superior products and services, but through lawsuits.

Related: Get Ready for Huge Obamacare Premium Hikes in 2017

Earlier this month, Blue Cross Blue Shield of North Carolina joined a growing list of insurers suing the Department of Health and Human Services for more subsidies from the risk-corridor program. Congress set up the program to indemnify insurers who took losses in the first three years of Obamacare with funds generated from taxes on “excess profits” from some insurers. The point of the program was to allow insurers to use the first few years to grasp the utilization cycle and to scale premiums accordingly.

As with most of the ACA’s plans, this soon went awry. Utilization rates went off the charts, in large part because younger and healthier consumers balked at buying comprehensive coverage with deductibles so high as to guarantee that they would see no benefit from them. The predicted large windfall from “excess profit” taxes never materialized, but the losses requiring indemnification went far beyond expectations.

In response, HHS started shifting funds appropriated by Congress to the risk-corridor program, which would have resulted in an almost-unlimited bailout of the insurers. Senator Marco Rubio led a fight in Congress to bar use of any appropriated funds for risk-corridor subsidies, which the White House was forced to accept as part of a budget deal. As a result, HHS can only divvy up the revenues from taxes received through the ACA, and that leaves insurers holding the bag.

Related: Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed

They now are suing HHS to recoup the promised subsidies, but HHS has its hands tied, and courts are highly unlikely to have authority to force Congress to appropriate more funds. In fact, the Centers for Medicare and Medicaid Services formally responded by telling insurers that they have no requirement to offer payment until the fall of 2017, at the end of the risk-corridor program.

That response highlights the existential issue for both insurers and Obamacare. The volatility and risk was supposed to have receded by now. After three full years of utilization and risk-pool management, ACA advocates insisted that the markets would stabilize, and premiums would come under control. Instead, premiums look set for another round of big hikes for the fourth year of the program.

Consumers seeking to comply with the individual mandate will see premiums increase on some plans from large insurers by as much as 30 percent in Oregon, 32 percent in New Mexico, 38 percent in Pennsylvania, and 65 percent in Georgia.

Thus far, insurers still claim to have confidence in the ACA model – at least, those who have not pulled out of their markets altogether. However, massive annual premium increases four years into the program demonstrate the instability and unpredictability of the Obamacare model, and a new study from Mercatus explains why.

Related: Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed

The claims costs for qualified health plans (QHPs) within the Obamacare markets far outstripped those from non-QHP individual plan customers grandfathered on their existing plans – by 93 percent. They also outstripped costs in group QHP plans by 24 percent. In order to break even without reinsurance subsidies (separate from the risk-corridor indemnification funds), premiums would need to have been 31 percent higher on average for individual QHPs.

The main problem was that younger and healthier people opted out of the markets, skewing the risk pools toward consumers with much higher utilization rates – as Obamacare opponents predicted all along. With another round of sky-high premium increases coming, that problem will only get worse, the study predicts.

“[H]igher premiums will further reduce the attractiveness of individual QHPs to younger and healthier enrollees, resulting in a market that will appeal primarily to lower-income individuals who receive large subsidies and to people with expensive health conditions,” it concludes. “To avoid such an outcome, it is increasingly likely that the individual insurance market changes made by the ACA will have to be revised or reversed.”

Related: It’s Time to Blame Obamacare for Losing So Many Full-Time Jobs

Galen Institute senior fellow Doug Badger, one of the study’s co-authors, wonders how long insurers will continue to publicly support Obamacare. In an interview with me this week, Badger noted how critical that political cover is for the White House, but predicted it won’t last – because the system itself is unsustainable, and no one knows this more than the insurers themselves, even if they remain reluctant to voice that conclusion. Until they speak up, however, the Obama administration can keep up their happy talk while insurers quietly exit these markets, an act that should be speaking volumes all on its own.

Even the Kaiser Foundation, which has supported Obamacare, has admitted that the flood of red ink has become a major issue. “I don’t know if we’re at a point where it’s completely worrisome,” spokesperson Cynthia Cox told NPR, “but I think it does raise some red flags in pointing out that insurance companies need to be able to make a profit or at least cover their costs.”

Red flags have flown all over the Obamacare model for six years. Instead of suing the federal government for losses created by a system for which they bear more than a little responsibility, insurers should finally admit out loud that the ACA is anythingbut affordable – not for insurers, and certainly not for consumers or taxpayers. When that finally happens, we can then start working on a viable solution based on reality rather than fealty to a failed central-planning policy.

WATCH: Debunking the Myth of ‘Democratic’ Socialism

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UPDATE 06/08/2016: I’ve received thousands of emails about the situation below. The following video was entirely removed from Youtube based on a BS “copyright” claim from an angry liberal at Mashable who didn’t like the fact that he was roundly criticized. My personal youtube account was punished with a manual copyright strike, and business privileges like live-streaming were removed from my account which had always been in good standing. It required a lawyer, a counter-claim and a whoooole lot of truth-telling, but the BS was dismissed and the video has now officially been reinstated. It’s horrible that this is such a common tactic from the left, and it’s horrible that mere truth-telling has to be defended, but we did, and we won. Thanks for the support!

Here’s how you know people generally disfavor socialism. Proponents of socialism take a parent to child approach by wrapping a distasteful thing (socialism) inside something seen as more palatable (democracy). Voila, cheese covered broccoli. Except Democratic Socialism is still socialism, with all the trappings and pitfalls of a miserable population, a crap economy, and a huge gap between rich and poor. Also, spoiler alert: the USA is a REPUBLIC. Stop saying we’re a democracy already. I explain in detail below.

Democratic socialism, nationalistic socialism, or just socialism-socialism eventually lead to one thing: misery. Here, I’ll put it in simpler terms for you…

Word+Socialism= Socialism.

More math for you….

Socialism + Anything = Bad idea that’s never worked, will never work, can never work. So stop it.

Socialism seeks to make everyone equally poor, equally dependent, equally terrible. Because success isn’t fair. Rich isn’t fair. Well, except for those cronies up at the top who fooled you into buying their ketchup covered broccoli and telling you it was nutrition.

jeremy clarkson

Yet here we are. We have an openly socialist running for president. Face the facts here. Bernie Sanders rhetoric (nay, most of the Democrat Party) is indistinguishable from Lenin. Socialism is a bad idea. It’s made for the lazy who just would rather not work, but thanks. It’s made for whiners. It’s made for fools. Just don’t be one, you’re going to make the rest of us pay for it. And not just in a metaphorical sense…

Read more: http://louderwithcrowder.com/watch-debunking-the-myth-of-democratic-socialism/#ixzz4B0Uwhp96
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