NYC Letter: Blame Them! IV

Countdown 45,374 minutes to awesome change

Today the solution to any money problem with a constituency is a carefully crafted government bailout. Bailout money doesn't grow on trees. It is conjured from taxes, debt, and inflation.

Government fiscal management is backed by the full faith of the government. The presumption of the full-faith backing is that the government will responsibly draw on the commonweal to pay its bills, repay its debts, and protect the value of its currency. The government is a proxy for the wealth of the nation itself. And whereas the presumption means nothing in Zimbabwe, once upon a time it did mean something in the United States. [Pause.]

But the United States government has at last racked up more debt and unfunded obligations than the entire net worth of the commonweal.

AMERICA WILL SOON OWE MORE
THAN ITS CITIZENS ARE WORTH

NEW YORK December 15, 2008 (pgpf.org) - The sum of America's liabilities and other financial commitments now exceeds the collective net worth of its citizens, the Peter G. Peterson Foundation has calculated using the latest official data. Growth in the government's unfunded promises for social insurance programs such as Medicare, combined with a drop in Americans' net worth due in part by lower home equity values, is causing this unprecedented milestone.

The Foundation's calculations are based primarily on the new consolidated federal financial statements as of September 30, 2008 which do not reflect the additional toll taken by more recent market declines, bailout packages, and record October and November deficits. The financial statements show approximately $56.4 trillion in debts, liabilities, and unfunded promises for Medicare and Social Security versus the Federal Reserve's estimate a total household net worth of $56.5 trillion, both as of September 30, 2008.

BANKRUPTS
Pissing Away America For Votes

This is an amazing profligacy. The numbers are too large to grasp, too large to be meaningful in the everyday circuit of life. They are dreamy big unreal numbers for ordinary folk. [Pause.] Apparently these numbers have no reality for the government either, which continues to overspend not just its due but the whole of the commonweal. The government has appropriated to itself the "too big to fail" business bailout model.

Bankrupting the richest nation on earth is an extraordinary accomplishment -- an astonishing accomplishment -- and the responsible parties should be recognized.

WITH ECONOMY IN SHAMBLES, CONGRESS GETS A RAISE

December 17, 2008 (The Hill) - A crumbling economy, more than 2 million constituents who have lost their jobs this year, and congressional demands of CEOs to work for free did not convince lawmakers to freeze their own pay.

Instead, they will get a $4,700 pay increase, amounting to an additional $2.5 million that taxpayers will spend on congressional salaries, and watchdog groups are not happy about it. Daniel O’Connell, chairman of The Senior Citizens League:

As lawmakers make a big show of forcing auto executives to accept just $1 a year in salary, they are quietly raiding the vault for their own personal gain.

However, at 2.8 percent, the automatic raise that lawmakers receive is only half as large as the 2009 cost of living adjustment of Social Security recipients.

Still, Steve Ellis, vice president of the budget watchdog Taxpayers for Common Sense, said Congress should have taken the rare step of freezing its pay, as lawmakers did in 2000.

Look at the way the economy is and how most people aren’t counting on a holiday bonus or a pay raise — they’re just happy to have gainful employment. But you have the lawmakers who are set up and ready to get their next installment of a pay raise and go happily along their way.

... In the beginning days of 1789, Congress was paid only $6 a day, which would be about $75 daily by modern standards. But by 1965 members were receiving $30,000 a year, which is the modern equivalent of about $195,000.

Currently the average lawmaker makes $169,300 a year, with leadership making slightly more. House Speaker Nancy Pelosi (D-Calif.) makes $217,400, while the minority and majority leaders in the House and Senate make $188,100.

This is what is paid for bad government. Good government is considerably cheaper -- but good government is nowhere to be had.