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The US Budget “Deal” Summarized (In One Cartoon)

Context is key…

A greater-than $1 trillion (spending) budget heralded as a triumph on the basis that they raised $20 billion in additional revenue (oh and spent an additional $63 billion in anti-sequester outflows).

h/t Investors via The Burning Platform blog

And how the deal got done… Mother Jones explains… why military spending is the glue holding the budget deal together…

The House just passed the Ryan-Murray budget deal, signaling an unexpected end to the cycle of budget crises and fiscal hostage-taking. A few weeks ago, such an agreement seemed distant. Sequestration had few friends on the Hill, but the parties could not agree on how to ditch the automatic budget cuts to defense and domestic spending. Republicans had proposed increasing defense spending while taking more money from Obamacare and other social programs, while Democrats said they’d scale back the defense cuts in exchange for additional tax revenue. Those ideas were nonstarters: Following the government shutdown in October, Senate Majority Leader Harry Reid (D-Nevada) called the idea of trading Social Security cuts for bigger defense budgets “stupid.”

 

Which explains why Rep. Paul Ryan and Sen. Patty Murray’s deal craftily dodged taxes and entitlements while focusing on the one thing most Republicans and Democrats could agree upon: saving the Pentagon budget. Ryan’s budget committee previously declared the sequester “devastating to America’s defense capabilities.” Murray had warned of layoffs for defense workers in her state of Washington as well as cuts to combat training if sequestration stayed in place.

The chart above shows why military spending is the glue holding the budget deal together. It also shows how any remaining opposition to the bill in the Senate may bring together even stranger bedfellows than Ryan and Murray: progressive dove Bernie Sanders (I-Vt.) and sequestration fan Sen. Rand Paul (R-Ky.).


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZW1P8e4oTHc/story01.htm Tyler Durden

The US Budget "Deal" Summarized (In One Cartoon)

Context is key…

A greater-than $1 trillion (spending) budget heralded as a triumph on the basis that they raised $20 billion in additional revenue (oh and spent an additional $63 billion in anti-sequester outflows).

h/t Investors via The Burning Platform blog

And how the deal got done… Mother Jones explains… why military spending is the glue holding the budget deal together…

The House just passed the Ryan-Murray budget deal, signaling an unexpected end to the cycle of budget crises and fiscal hostage-taking. A few weeks ago, such an agreement seemed distant. Sequestration had few friends on the Hill, but the parties could not agree on how to ditch the automatic budget cuts to defense and domestic spending. Republicans had proposed increasing defense spending while taking more money from Obamacare and other social programs, while Democrats said they’d scale back the defense cuts in exchange for additional tax revenue. Those ideas were nonstarters: Following the government shutdown in October, Senate Majority Leader Harry Reid (D-Nevada) called the idea of trading Social Security cuts for bigger defense budgets “stupid.”

 

Which explains why Rep. Paul Ryan and Sen. Patty Murray’s deal craftily dodged taxes and entitlements while focusing on the one thing most Republicans and Democrats could agree upon: saving the Pentagon budget. Ryan’s budget committee previously declared the sequester “devastating to America’s defense capabilities.” Murray had warned of layoffs for defense workers in her state of Washington as well as cuts to combat training if sequestration stayed in place.

The chart above shows why military spending is the glue holding the budget deal together. It also shows how any remaining opposition to the bill in the Senate may bring together even stranger bedfellows than Ryan and Murray: progressive dove Bernie Sanders (I-Vt.) and sequestration fan Sen. Rand Paul (R-Ky.).


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZW1P8e4oTHc/story01.htm Tyler Durden

Social Security Starts Paying Benefits to Gay Widows and Widowers

Okay, there will probably be no rejoicing because the benefit requires somebody to die.Rejoice, libertarians, in the
expansion of a federal benefit program!

Sorry, couldn’t resist presenting it that way because it makes
some folks gnash their teeth. The Supreme Court ruling in
Windsor v. United States earlier this year requires the
federal government to recognize same-sex marriages in states where
it’s been legalized. As a result, federal benefits extended on the
basis of marital status now apply to many gay couples as well. This
week, the Social Security Administration announced it has begun
paying survivor benefits to qualifying widows and widowers.

Courtesy of AlJazeera America:

“I am pleased to announce that, effective today, Social Security
is processing some widow’s and widower’s claims by surviving
members of same-sex marriages and paying benefits where they are
due,” said Carolyn Colvin, the acting commissioner of Social
Security, in a statement.

“In addition, we are able to pay some one-time lump sum death
benefit claims to surviving same-sex spouses,” said Colvin. “As I
stated shortly after the Supreme Court decision on Section 3 of the
Defense of Marriage Act, our goal is to treat all Americans with
dignity and respect.”

Anyone who was married to their partner at the time he or she
died, or anyone who was legally married for at least 10 years but
later divorced, is eligible for Social Security benefits.

But Social Security uses a state’s definition of marriage to
determine eligibility. Consequently, a couple that married in a
state where gay marriage is legal, but lives in a state that does
not recognize their marriage, would not be considered married under
current rules.

I know there are many libertarians who are frustrated that
recognizing same-sex marriages has the additional impact of getting
the federal government more involved in more people’s private lives
rather than less, but that’s a completely separate fight. By all
means, let’s work on unwinding these various tax-based benefits and
burdens from marital status and legal recognition of private
relationships. In the meantime, though, gays aren’t exempt from
paying Social Security, so their relationships should get the same
treatment.

from Hit & Run http://reason.com/blog/2013/12/17/social-security-starts-paying-benefits-t
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Europe Officially Loses Fight For Ukraine, Russia Wins

Over the past month, an interesting conflict emerged between Putin’s Russia and, well, some unelected person’s Europe. The conflict was over who would be the Ukraine’s big brother, and strategic ally for the future, and whether the Ukraine would snub Europe, i.e. the West, and reorient to its Soviet Union roots, by aligning with Russia. Moments ago, the fight over Ukraine ended. Russia won, and not only pledged $15 billion in future Ukraine investments, but de facto became the lender of last resort for the troubled nation.

  • PUTIN SAYS RUSSIA-UKRAINE TALKS IN MOSCOW WERE CONSTRUCTIVE
  • PUTIN SAYS GAZPROM TO SELL GAS TO UKRAINE AT $268.50
  • PUTIN SAYS UKRAINE BENEFITING FROM DISCOUNT ON RUSSIAN GAS
  • PUTIN: RUSSIA TO USE SOVEREIGN WEALTH FUND TO INVEST IN UKRAINE
  • PUTIN SAYS RUSSIA TO INVEST $15B IN UKRAINIAN SECURITIES
  • PUTIN SAYS UKRAINE’S MEMBERSHIP IN CUSTOMS UNION NOT DISCUSSED
  • SILUANOV SAYS UKRAINE TO SELL $15B BONDS TO RUSSIA IN 2013-14

Europe, like a jilted lover, was sad but understood it had been bested. 

  • GERMANY’S STEINMEIER: EU’S OVERTURE TO UKRAINE FELL SHORT
  • STEINMEIER: EU MAY HAVE UNDERESTIMATED RUSSIA DETERMINATION

Notably, this is the second major geopolitical gambit that Europe has lost this year: first the Syrian escapade, where it tried aggressively to replace Gazprom with Qatar (and failed), and now it has lost Europe’s “bread basket.”

Ukraine bonds welcomed the clarity, and that the nation is now officially once again under Russia’s sphere of influence:

And now, with Ukraine firmly in the pocket of Russia, it remains to be seen how the local opposition and the pro-European protesters will react. They will hardly be enthused.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4rlYnZtIhNs/story01.htm Tyler Durden

Caretaker of Disabled Child Humiliated in Botched Sex Sting: Don’t Cops Have Better Things to Do?!

“Caretaker of Disabled Child Humiliated in Botched Sex Sting:
Don’t Cops Have Better Things to Do?!” is the latest video from
ReasonTV. Watch above or click on the link below for video, full
text, supporting links, downloadable versions, and more Reason TV
clips.

View this article.

from Hit & Run http://reason.com/blog/2013/12/17/caretaker-of-disabled-child-humiliated-i
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Homebuilder Confidence Spikes Back To Highest In 8 Years

Despite higher rates, collapsing mortgage applications, lower affordability, and fast money exiting the market, the NAR just won’t back off their exuberant optimism that it will all end well. With the biggest beat of expectations in 7 months, the NAHB sentiment index re-spiked back to 58 – levels not seens since November 2005. Only the NorthEast saw prospective buyer traffic drop notably (we are sto be blamed on the weather) as the survey saw a surge in the single-family-home-sales sub-index.

Yay – 8 year highs in optimism…

 

Seems a little overdone…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/L8sBSq6P0pU/story01.htm Tyler Durden

ECB Fails To Sterilize Bond Purchases For Second Time In A Month

Back in November 2011, when the ECB failed to fully sterilize its weekly outstanding amount of bond purchases under its now defunct SMP program (replaced with the even more impotent OMT non-existent “bond buying” program), it caused a plunge in the Euro and sent European stocks reeling over fears what this may mean for European bank liquidity. This happened just as Europe was “turmoiling” and the ECB announced the flooding of the European banking system with hundreds of billions in excess liquidity via the collateral-soaking LTRO 1 and 2. A few hours ago, the very same thing happened after the ECB found only 109 bidders for today’s weekly attempt to sterilize €184 billion in outstanding SMP holdings, and instead got bids for only €152.3 billion of the total leading to a €32 billion shortfall. This happened just a month after another failed ECB sterilization on November 26. The market barely noticed.

Why the completely muted response? Perhaps because it some ways it was expected, since as a result of accelerated LTRO repayments in recent weeks, excess cash in the Eurosystem is now at the lowest level in just about two years, which also means that banks are seen as preferring to hold on to money. In fact, according to IFR, excess liquidity is expected to drop from today’s €171.5 billion to below €150 billion by year end and banks will naturally hold on to dear cash for window dressing purposes and for anything out of the ordinary.

Furthermore, earlier today the Eonia spread (June vs Feb forwards) turned the most negative in months, and certainly since the ECB’s announcement of its refi rate cut in early November.

So if sterilization failures are also added to the New Normal, why should the ECB even pretend to be a prudent sterilizer of monetized bonds? If indeed the European liquidity is so low that finding €184 billion in the system becomes a problem, is this a harbinger that very soon the ECB will proceed with unsterilized monetizations, and is today merely a market test to see how risk responds to the second sterilization failure in a month.

Of course, if indeed that is the case, and Draghi is preparing to launch unsterilized monetizations, then suddenly Asmussen’s recent departure makes far more sense.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/q2fATrscuy8/story01.htm Tyler Durden

Somebody’s Got a Bad Case of the Second-Term Bushitis

At National Journal, Ron Fournier lays out nine
analogues between George W. Bush’s generally disastrous second term
and Barack Obama’s. From the top:

Bush wasted no time plotting an expansive vision for his second
term, ordering speechwriters to produce an Inaugural Address that
made “ending tyranny in our world” official U.S. policy. His
domestic agenda included changes to Social Security, immigration,
the tax code, and court-clogging litigation rules. Obama unleashed
an aggressively liberal agenda in his second Inaugural Address,
promising to combat climate change, loosen immigration
restrictions, curb gun violence, and expand human and civil
rights.

Bush and Obama made the same mistake. Both men convinced
themselves that they were reelected because of their agendas,
rather than because of negative campaign strategies that
essentially disqualified their rivals—Democrat John Kerry and
Republican Mitt Romney. In fact, many of the issues claimed as
presidential mandates in 2005 and 2013 actually received relatively
little attention from the candidates and from the media in 2004 and
2012.

This is Fournier’s most-interesting point (IMO):

3. First-term success haunted the second
term. The increasingly unpopular Iraq war Was an
issue in 2004, even after Saddam Hussein’s capture, but Bush had
managed to finesse it for reelection. Obama’s white whale was the
Affordable Care Act. In both cases, luck ran out after Election
Day. The death toll rose in Iraq during Bush’s fifth year. For
Obama, the federal health insurance website didn’t work, and
millions of Americans lost their insurance policies despite his
promises to the contrary.

Both presidents deceived the public about their signature
policies, and their credibility crumbled. Insularity hurt both
teams. Vice President Dick Cheney famously said the Iraq insurgency
was in its “last throes.” Obama and his advisers characterized
catastrophic flaws with the ACA website as “glitches.”


Read the whole thing.

Of course, history doesn’t have to repeat itself but there’s a
lot of reasons to believe that Obama will start becoming less
relevant to his own party any second now, especially given that the
Dems need to figure out who will be their standard-bearer in 2016
and beyond.

For all the legitimate yapping about internecine battles within
the GOP, at least the Republicans have a pulse and a bench of
people jockeying for power, status, and the future of the party.
Where is the next generation of Democratic leaders? The
vice-president is not just a joke but at the twilight of a career;
Hilary Clinton represents a bridge to the past, not a superhighway
to the future. And that’s about it. There are no Democratic
governorns with much to tout and the congressional folks are with
ancient or invisible. In a Young Republicans poll of Millennials of
all political persuasions, the only name under-30 Dems tossed out
was Cory Booker, who is now a do-nothing senator from New
Jersey. 

from Hit & Run http://reason.com/blog/2013/12/17/somebodys-got-a-bad-case-of-the-second-t
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Somebody's Got a Bad Case of the Second-Term Bushitis

At National Journal, Ron Fournier lays out nine
analogues between George W. Bush’s generally disastrous second term
and Barack Obama’s. From the top:

Bush wasted no time plotting an expansive vision for his second
term, ordering speechwriters to produce an Inaugural Address that
made “ending tyranny in our world” official U.S. policy. His
domestic agenda included changes to Social Security, immigration,
the tax code, and court-clogging litigation rules. Obama unleashed
an aggressively liberal agenda in his second Inaugural Address,
promising to combat climate change, loosen immigration
restrictions, curb gun violence, and expand human and civil
rights.

Bush and Obama made the same mistake. Both men convinced
themselves that they were reelected because of their agendas,
rather than because of negative campaign strategies that
essentially disqualified their rivals—Democrat John Kerry and
Republican Mitt Romney. In fact, many of the issues claimed as
presidential mandates in 2005 and 2013 actually received relatively
little attention from the candidates and from the media in 2004 and
2012.

This is Fournier’s most-interesting point (IMO):

3. First-term success haunted the second
term. The increasingly unpopular Iraq war Was an
issue in 2004, even after Saddam Hussein’s capture, but Bush had
managed to finesse it for reelection. Obama’s white whale was the
Affordable Care Act. In both cases, luck ran out after Election
Day. The death toll rose in Iraq during Bush’s fifth year. For
Obama, the federal health insurance website didn’t work, and
millions of Americans lost their insurance policies despite his
promises to the contrary.

Both presidents deceived the public about their signature
policies, and their credibility crumbled. Insularity hurt both
teams. Vice President Dick Cheney famously said the Iraq insurgency
was in its “last throes.” Obama and his advisers characterized
catastrophic flaws with the ACA website as “glitches.”


Read the whole thing.

Of course, history doesn’t have to repeat itself but there’s a
lot of reasons to believe that Obama will start becoming less
relevant to his own party any second now, especially given that the
Dems need to figure out who will be their standard-bearer in 2016
and beyond.

For all the legitimate yapping about internecine battles within
the GOP, at least the Republicans have a pulse and a bench of
people jockeying for power, status, and the future of the party.
Where is the next generation of Democratic leaders? The
vice-president is not just a joke but at the twilight of a career;
Hilary Clinton represents a bridge to the past, not a superhighway
to the future. And that’s about it. There are no Democratic
governorns with much to tout and the congressional folks are with
ancient or invisible. In a Young Republicans poll of Millennials of
all political persuasions, the only name under-30 Dems tossed out
was Cory Booker, who is now a do-nothing senator from New
Jersey. 

from Hit & Run http://reason.com/blog/2013/12/17/somebodys-got-a-bad-case-of-the-second-t
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2014 Will Move Us Closer To The End

Originally posted at Monty Pelerin’s World blog,

The fraud that has been the US government and its effects on the Potemkin economy should be obvious by now. Yet our politicians continue to pretend the economy is growing and recovering. It is not. It is in a death spiral that their interventions caused and continue to feed.

The presentation below is another one from Gordon T. Long. This one includes Charles Hugh Smith as his guest. Both are worthwhile listening to, especially in this presentation.

 

What is discussed is expectations for 2014. The problems that may surface this coming year have their roots decades before. Each problem results from prior government attempts to stop normal economic corrections. Each was designed to stimulate the economy to avoid the necessary adjustments. Their effectiveness short-term was politically acceptable and was achieved by distorting prices, interest rates and lending standards. The intent was to send false signals to economic actors, to encourage them to behave in ways that helped short-term results but were harmful long-term.

For years short-run corrections were avoided or mitigated by this falsifying of economic signals. The cost was to make the economy weaker and less efficient. It also was to burden the economy and its participants with record levels of debt. This economic debauchery produced immediate good feelings in the same manner that excessive drinking does. It makes you feel good during the binge, but the next day is hangover time.

The economy has been wasted. These short-term highs have place it in grave danger. John Maynard Keynes replied to objections to his short-term remedies with the statement that “in the long-run we are all dead.” Keynes is long dead. Perhaps he was thinking only in terms of his lifespan. The rest of us are facing the consequences of such irresponsible policy.

Whether enough of the negatives hit in 2014 to sink the country is doubtful but not impossible. The saddest part about what is happening is that there is no political will to even recognize the path that we are on. From a political standpoint, no one wants to admit we are in trouble. As a result, there are no attempts to remedy our economic and social spiral to ruin, (and probably no way) to reverse the march to collapse.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/cAUlvNlIZLA/story01.htm Tyler Durden