Free Frank Warner

Mark Zandi study: GOP's $61 billion of cuts would cost jobs, but Dems have to cut $400 billion a year

It’s interesting that a Moody’s Analytics study is being quoted to suggest the U.S. House Republican plan to cut $61 billion in borrowing and spending this year would destroy 700,000 jobs over two years.

And yet the same Moody's study, authored by Mark Zandi, one of the architects of President Obama’s 2009 “stimulus,” says the Democrats will have to cut $400 billion a year if the economy is ever to stabilize.

So, it seems, the Republicans aren’t doing nearly enough. They should be cutting $400 billion in spending and let the private sector reorganize in a reality-based economy.

Huge 1.6% cut. It defies credibility that cutting $61 billion in federal borrowing and spending would produce a net loss of 700,000 jobs. A $61 billion reduction is a 1.6 percent cut of a $3.83 trillion federal budget. I repeat, it's 1.6 percent of an enormously bloated, debt-fed budget.

Non-productive government jobs would be lost, true, but they shouldn't be there now. And within two or three years, if the budget continues closer to balance and economical U.S. energy supplies grow, productive private-sector jobs would more than make up for the losses.

In 2009, the Democrats borrowed and spent almost 10 times $61 billion, promising to prevent unemployment from exceeding 8 percent (and telling us we’d have 9 percent joblessness without the Moody-Zandi “stimulus”).

Into the chasm. Then the "stimulus" gave us 10 percent unemployment. Thanks, Mark Zandi. Why should we keep listening to you, when your plan took an economy from the edge of a cliff and into the chasm?

Zandi in December 2009:

The Great Recession has given way to a tentative and fragile economic recovery. I expect the recovery to evolve into a self-sustaining economic expansion, but that won't be until 2011. …

[T]he job losses will end early in 2010 and for meaningful job growth to resume by yearend 2010. Unemployment will rise through next summer, peaking as high as 11 percent. Full-employment, which is consistent with a 5.5 percent unemployment rate, isn't likely until 2013. Even this depends on continued, very aggressive policy support; the Fed needs to keep rates at near zero throughout 2010, and fiscal policymakers need to come forward with more temporary tax cuts and spending increases.

Continued bleeding. The Fed did keep interest rates near zero throughout 2010, and it didn't seem to matter. But keep increasing spending? It makes you wonder how much some people will bleed the patient before they realize they’ve killed her.

Frank Warner

Time to look at the budget

Liberal or conservative, a leader is supposed to have the competence to know when all the money is spent, and the sensible courage to set priorities. Well, the money is gone, and because Democratic Party leaders are chronically least likely to admit such a truth, it comes down to Republican Party leaders to deliver the obvious bad news and propose a cure.

Charles Krauthammer hits the nail on the head:

We have heard everyone — from Obama’s own debt commission to the chairman of the Joint Chiefs of Staff — call the looming debt a mortal threat to the nation. We have watched Greece self-immolate. We can see the future. The only question has been: When will the country finally rouse itself?

Amazingly, the answer is now. Led by famously progressive Wisconsin — Scott Walker at the state level and Budget Committee chairman Paul Ryan at the congressional level — a new generation of Republicans has looked at the debt and is crossing the Rubicon. Recklessly principled, they are putting the question to the nation: Are we a serious people?

It is remarkable. The wagon already has three wheels over the cliff, and almost half of the people inside are singing songs and heaving themselves forward to bring that fourth wheel along.

In this case, Walker is the progressive. When you're going over a cliff, progress is turning around.

Frank Warner

Social Security 'Trust Fund' soon worth less than zero?

Jed Graham of Investors Business Daily points out that the Congressional Budget Office has come up with an “Alternative Fiscal Scenario” for Social Security that, applying current economic policy, projects the Social Security “Trust Fund” as worth less than zero by 2035.

In this scenario, Social Security’s debt (to get real money for the empty “Trust Fund”) would reach $4.5 trillion in 2035. Social Security would be consuming 7.4 percent of the economy (up from 4.2 percent in 2008). And interest rates on new debt to keep Social Security going would be soaring because government itself had borrowed virtually all the cash available.

This is not the rosy scenario. If government spending is not capped and entitlements reined it, this is the realistic scenario.

Frank Warner

The fire story I covered

Here's a little of what I do at work.

Frank Warner

The revolution

Watching the west Libyan bureaucrats tremble while the (mostly poorer) east Libyan masses revolt against the dictatorship is like watching Wisconsin government workers tremble while (mostly poorer) Wisconsin private-sector workers discover how much wealth someone promised public employees when most taxpayers were powerless to say no.

Frank Warner

Unit 731: More of Japan’s WWII atrocities uncovered

Sixty-six years after World War II, Japanese officials are digging up a medical school site in Japan that may hold human remains from Imperial Japan’s wartime program of ghastly experiments on living prisoners.

The program was called Unit 731. Most of its horrifying work was done in China, but some of its “specimens” were sent to Japan.

Unit 731, based in Harbin in northern China, conducted experiments on tens of thousands of mostly Chinese and Korean prisoners, and a small number of Allied prisoners of war. Some historians estimate up to 250,000 people were subjected to experiments. The remains of some are thought to have been transported from China to Tokyo for analysis.

According to historical accounts, male and female prisoners, named "logs" by their torturers, were subjected to vivisection without anaesthesia after they had been deliberately infected with diseases such as typhus and cholera. Some had limbs amputated or organs removed.

Remember, defeating Japan in World War II wasn’t necessary to avenge Pearl Harbor. Defeating Japan was necessary to stop that dictatorship’s horrors on many fronts.

Frank Warner

Germans know that debt can kill an economy

Jennifer Rubin in The Washington Post:

Last fall Chris Caldwell wrote in the Weekly Standard:

German policymakers do think the United States is misguided as a matter of economic reasoning. "We think they're wrong," says one top official. "We think you don't get the multiplier they say." The multiplier is the measure of how much economic activity results from emergency government spending. Discussions of the multiplier were at the center of the debates over the Obama stimulus plan. Christina Romer and the president's other economic advisers argued that the multiplier would be around 1.6--the government would create $1.60 worth of economic activity for every dollar it spent. At those rates, who can afford not to stimulate? "Our research says the multiplier is more like .60," says the German official. If he is correct, then a stimulus plan can actually deaden an economy rather than stimulate it. If he is correct, you might have been as well off to have taken the stimulus money and thrown it away.

What he calls "our research" does not mean studies commissioned by the German government. It means academic papers that are either skeptical about stimulus in general or question the long-reigning orthodoxy that stimulus plans based on government spending outperform stimulus plans based on tax cuts.

Facts are facts. The "stimulus" "multiplier" turns out to be a stultifying divider.

Frank Warner

If Kadhafi goes, can al-Megrahi be far behind?

Wouldn't it be lovely if, in the Libyan revolt against Moammar Kadhafi, Lockerbie bomber Abdelbaset Ali Mohmed al-Megrahi were captured and returned to Scotland?

Yes, Scotland. I would enjoy watching the power-drunk government of Scotland take back the murderer of 270 people and try to free him again. It would be satisfaction enough to hear them explain again how they released him in 2009 because he had just 3 months to live.

Frank Warner

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See also: Kadhafi and the magic umbrella. Or as the kids say: "See ya! Wouldn't wanna be ya!"

‘Egypt is free,’ this year

It’s true. Egypt is free, and it will be free for at least a year.

In the year ahead, Egyptians will be free to speak their minds, free to write almost anything they can imagine and free to propose their ideas of a better future. And if they enjoy this taste of freedom, they cannot waste a minute. What they do with the next 12 months will determine whether they’ll have to wait another 30 or 50 years for another rendezvous with liberty.

This year and early next, the Egyptians will have to build solid democratic institutions, the most important of which will be (1) a freely elected government that faces regular, competitive, fair and free elections, and (2) an independent court system that is required to equally and judiciously apply Egypt’s democratically enacted laws. A bill of individual rights would help, too.

I celebrate with anyone who has broken the chains of tyranny. But the celebration would be a lie if all who today hail the promise of democracy in Egypt don’t follow through with constant vigilance against the next gang of chain-makers.

Frank Warner

Mubarak resigns

Hosni Mubarak finally has resigned as dictator of Egypt. The unelected Supreme Military Council is in charge. This is an opportunity, not a victory, as the sad example of Iran reminds us. It is up to the Egyptian people to make sure this chance for democracy and peace does not slip through their hands.

Now, who are Egypt's democratic leaders?

Frank Warner