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Posts Tagged ‘deficit’

Anyone living in California is well aware of our budgetary crisis. But what if I told you there was more than just the budget? What if I told you that even though the CA budget was in the red, there were dark pools of money not being touched that far exceeded our budgetary shortfalls? While that may sound like a conspiracy theory, it turns out to be both true and quite commonplace.

If you look at the budget, then California, as of April, has a shortfall of about $26.3 billion. That’s the amount allocated for spending that we did not take in as revenue in the general fund and must now make up the difference either by increased taxes or spending cuts. There’s nothing unfamiliar about that so I won’t bother going into detail. But that’s the budget. When it comes to government finances there are two sets of books. There is the budget and then there’s the Comprehensive Annual Financial Review (CAFR). The CAFR is basically a comprehensive list of all liquid asset funds, bonds, stocks, etc, that the government owns. Every state, county, city, and local government must produce a CAFR every fiscal year. And much of the assets reported in the CAFR never go towards the budget, strange as it may seem.

So what’s the difference between the budget and the CAFR? The budget only lists the money the government receives from taxes, fines, and fees. Within each budget, a certain amount of money is set aside for “rainy day funds”. This money gets invested and does not get spent as part of the next year’s budget. There are also large profit centers in each state where revenues do not go towards the budget. For instance, the revenues from many toll roads are excluded from state budgets. Thirdly, when voters approve the sale of bonds to raise money for a specific project, once the project is paid for, the excess funds are not handed over to the state toward next year’s budget. They just sit idly in an earmarked fund, drawing a modest interest. This is why, in California, we have the dichotomy of experiencing both a budget deficit of $26.3 billion while at the same time having a $71 billion surplus.

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The Tigers are over .500 (for the time being), all is well…or at least all should be well.  The fact that the Motor City Kitties are number one in the [measly] AL Central and that the Red Wings are in the NHL Western Semifinals are simply not enough to pick up the pieces in Detroit, which has an unemployment rate three times higher than the national average.  I read an article from April 1958 in TIME, which mirrors much of the current situation.  When the nation gets a cold Detroit is the sore throat and runny nose.

Would you like a home for less than $8,000?  Maybe you ought to try Detroit.  And with the recession and resulting unemployment inevitably comes poverty.  And if you decide to buy a home in Detroit, I hope that excessive crime doesn’t bother you…

I guess the point of all of these dreadful bits of information regarding Detroit’s amplified state of recession is to ask this question:  What can be done for Detroit?

Perhaps you, the reader, would respond in one of these ways:

  1. Nothing can be done for Detroit, let her rot.
  2. The best thing that can be done for Detroit is to let the recession run its course and the markets will eventually fix themselves…maybe after several thousand more violent crimes.
  3. The federal government needs to help out Detroit.  More handouts and deficits!

Many more responses can be added to this list, but in general they all lack the ability to solve this problem rapidly or without major repercussions in the long run.  My only proposition is to do what is most human, and what is most human has been demonstrated through God’s will, especially as expressed though Christ.

‘When the Son of Man comes in his glory, and all the angels with him, then he will sit on the throne of his glory.  All the nations will be gathered before him, and he will separate people one from another as a shepherd separates the sheep from the goats, and he will put the sheep at his right hand and the goats at the left.  Then the king will say to those at his right hand, “Come, you that are blessed by my Father, inherit the kingdom prepared for you from the foundation of the world; for I was hungry and you gave me food, I was thirsty and you gave me something to drink, I was a stranger and you welcomed me, I was naked and you gave me clothing, I was sick and you took care of me, I was in prison and you visited me.”  Then the righteous will answer him, “Lord, when was it that we saw you hungry and gave you food, or thirsty and gave you something to drink?  And when was it that we saw you a stranger and welcomed you, or naked and gave you clothing?  And when was it that we saw you sick or in prison and visited you?”  And the king will answer them, “Truly I tell you, just as you did it to one of the least of these who are members of my family, you did it to me.”’

Maybe these are some practical resources:

In the meantime, when looking for a sports team that properly reflects the current condition of the City of Detroit, look no further than last season’s record-breaking Lions.

Yes We Can

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Like many bloggers, radio hosts and pundits (at least of the Fox News variety), I found myself completely confounded by Barrack Obama’s press conference last night.  Here are some questions I’ve been pondering:

1) Is a time coming when everyone (liberals included) will become utterly fatigued from seeing Barrack Obama on television?  It seems that every time I turn on the news or get on the internet I’m greeted with Barrack Obama, whether he’s giving his picks for the NCAA basketball tournament, chatting with Jay Leno, appearing on 60 minutes, or giving another nationally televised pep talk for his budget.  Is he immune to the law of diminishing returns?  Or will everyone soon start to tune him out?

2) What does Barrack Obama mean when he says:

At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led us to a narrow prosperity and massive debt. It’s with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.

Where, and when, exactly, does this saving come in to the picture?  Obama repeatedly blames Bush for raising the federal deficit to unacceptable levels, but tells us that we’ll experience “broad economic growth” if we spend more than ever before, multiplying the deficit by a factor of 8 or 9 by Obama’s own projections.  He tells us that we’re somehow going to save money by bringing down healthcare costs.  Again, this is highly confusing- how exactly does the government save money by spending unprecedented amounts of money on healthcare?  His budget does not show these supposed savings ever bringing down our national debt, only dramatically increasing it.  So are we just supposed to trust him that, sometime in the future, well after his budget has taken our national debt to unfathomable depths, that savings are magically going to appear?  Or, is the idea that, upon seizing more control of the health care system, the government will be able to eventually set price controls on healthcare?  Or does he mean more of a moral savings, like our consciences will be saved from the guilt of a private health care system?  If that’s what he means I wish he’d say it, because telling us we’re going to save money by spending a bunch of it is confusing at best, and duplicitous at worst.

3) Is it just me, or is the media finally starting to turn on Obama?  I was pleasantly surprised last night that the questions were pointed and critical.  One of the most direct questions was about the AIG bonuses:

…when you and Secretary Geithner first learned about this 10 days, two weeks ago, you didn’t go public immediately with that outrage. You waited a few days. And then you went public after you realized Secretary Geithner really had no legal avenue to stop it…But on AIG, why did you wait — why did you wait days to come out and express that outrage? It seems like the action is coming out of New York and the attorney general’s office. It took you days to come public with Secretary Geithner and say, “Look, we’re outraged.” Why did it take so long?

This question was satisfying to me  (needless to say, Obama’s answer was not) and it was really not unique from the other questions in terms of tone.  If the mainstream media is beginning to take a more critical stance towards Obama, I wonder what’s driving it.  Is it possible that, sensing that Obama’s first month is going poorly and that more disappointment might be around the corner, reporters are smelling fresh meat?  Perhaps they are sensing that the ship has some holes, and they want to be the first ones on the scene?  Or perhaps they want to avoid being the last man standing in a suddenly unpopular corner?  Or, did they all finally decide to do their jobs?  Or this all in my imagination, and the treatment last night was no different than what Obama is normally accustomed to?

4) The arrangement of the teleprompter was interesting- mostly off-screen.  Was this a direct response to Rush Limbaugh and others who incessantly point out his reliance on the device?  And, along those lines, is anyone else a bit unnerved by his drastic drop in communication skills when the teleprompter no longer tells him what to say?  Or is the drop off really not that severe, and more a figment of my conservative imagination?

5) One thing Obama said last night that I really appreciated was as follows:

I think that the last 64 days has been dominated by me trying to figure out how we’re going to fix the economy, and that affects black, brown and white.

And, you know, obviously, at the inauguration, I think that there was justifiable pride on the part of the country that we had taken a step to move us beyond some of the searing legacies of racial discrimination in this country, but that lasted about a day.

And — and, you know, right now, the American people are judging me exactly the way I should be judged. And that is: Are we taking the steps to improve liquidity in the financial markets, create jobs, get businesses to re-open, keep America safe? And that’s what I’ve been spending my time thinking about.

I was braced, given the question that Obama was responding to, for him to use his race to further leverage a moral case for supporting him, or to remind us all of how racist we still are, or how great we suddenly are for electing a black president.  I was pleasantly surprised that he chose to take race out of the equation.  I agree with him completely here: watching an African American man get inaugerated to our country’s presidency brought a lot of pride to Americans, myself included.  But now that he’s taken office and begun the job we elected him to, he needs to be judged as the 44th president, not the first black president.  He seems to get that, and I’m very thankful for that.  Is it too early to trust that Obama is committed to leaving his race out of the discussion completely for the next four years?

Thoughts?

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