As Drew noted below, Obama decided to hold our nation's credit rating hostage over the sticking point of making sure he doesn't have to beg for another increase in the debt limit before the elections.

Reid dutifully cancelled the plan he had agreed to, at Obama's insistence.

Reid is now proposing a slightly different plan which will address the only thing that matters to Obama, his personal political fortunes.

In the new plan, Reid suggests giving Obama his $2.5 trillion in debt limit increase -- enough to get President Pissypants through his election -- and comes up with another $1.4 trillion in cuts.

Those "cuts," however, are entirely of the phantom variety -- they are the anticipated savings from no longer fighting the wars in Iraq and Afghanistan. That's actual money we won't be spending, but that is already figured on anyway, and further, that's money that's spent as required, or not spent as not required. Bush had counted that spending off budget, which Obama claimed was deceptive, but it is a fair way to characterize the emergency, special-conditions nature of it. Those expenses were never part of the permanent budget going forward, were they?

So Reid invents $1.4 trillion in "savings" there and adds it to what he's already agreed to cut (about a trillion) and says, "Voila, $2.7 trillion in cuts."

I don't know how that extra 0.3 trillion gets tacked on there -- maybe interest saved by not spending that money. I don't know.

The point is, this is still the same $1 T Biden and his team agreed to a month and a half ago, added to some phantom cuts, to claim that there is a 1-to-1 exchange of cuts and debt ceiling increase.

The only plus here, from our perspective, is no rise in taxes, which I'm not sure I'm even counting as a plus. What I mean is: Low taxes plus high spending forever (and always increasing high spending) is no way to run a country. Something has to give here, doesn't it? Without actually reigning in out of control spending, I'm not sure how much of a victory it is to continue to push the country towards insolvency.

But it's unclear whether this plan could pass, in any event, as liberals are calling it a "cave" by the Democrats because they don't get their precious tax increases.

So, the new plan:

1. Will not have the support of the House's fiscal hawk wing, because its cuts are puny, and mostly imaginary.

2. Probably will not have support of many Democrats, because there are no tax hikes.

3. Apparently only satisfies a single man in Washington, DC -- Barack Obama -- by giving him his debt limit increase and taking it off the table for 2012.

I don't see this new plan going anywhere.

Democrats and the media (but I repeat myself) are calling the savings from "future wars unfought" a legitimate "cut," because that was assumed in the Paul Ryan budget, too.

Um... yeah, this is a little hard to explain, but assuming those wars wind down, yes, we won't be spending as much on them, and so yes, that money should be accounted for somewhere in the budget.

But this isn't really a "cut," and it's definitely not a "cut" within the meaning of the Republicans's one-dollar-of-cuts-for-every-dollar-of-debt-limit requirement.

Posted by: Ace at 09:49 AM | Comments (279)
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Content is for suckers!

Posted by: DrewM at 09:29 AM | Comments (125)
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Last week Speaker of the House Boehner said he was done talking to Obama and would work with Harry Reid to come up with a deal.

Apparently that process was going well. A little too well for Obama's liking so he killed it.

But the GOP bill to cut spending and raise the debt ceiling, which would avert the coming default crisis, would also require at least one more debt increase before the 2012 election, and the president, working hard for re-election, does not want to deal with the issue again before November 2012. After consulting with Obama Sunday evening, Reid's willingness to work with the GOP disappeared. (The White House has all along blamed Republicans for blowing up the talks.)

"I think Reid wants to get this done," says the senior Republican. "The problem is, the White House is so far out on a limb on vetoing anything that doesn't get Obama through the 2012 election that it's now kind of personal." For Reid to keep working with the GOP would be a slap at the president and leader of the Democratic party -- a virtually impossible scenario for the Majority Leader.

Obama would rather play Russian Roulette with the financial system than have to deal with this issue (and raising taxes again with the expiration of the Bush/Obama tax cuts right after the election).

Funny, but "the only adult in the room" sure seems like a self-centered little brat to me.

Obama is banking that the Senate Democrats will stick with him so they can lay this at the feet of the House GOP. I'm not sure that's going to work, especially if the GOP keeps offering plans. At some point enough Senate Democrats are going to decide they don't want to get tarred with this (remember, they are the majority there after all, though they don't act like it. Where's the budget?).

One power the President has is that he's the face of the nation, he can command airtime and set the frame work of the debate. The downside to that is he's really the only person people can hold personally responsible. People don't vote for "House Republicans", they vote for their member. Very few people actually get to vote for or against John Boehner and Eric Cantor. Everyone gets to vote on Obama.

I think if the GOP in the House holds tight and can offer Reid another shot at this, they have a better chance to get a deal along the lines they want then I thought possible.

If they can get something to Obama's desk, he'll blink.

Posted by: DrewM at 07:44 AM | Comments (279)
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So Speaker Boehner was making alarmed noises over the weekend about what would happen to the markets if no deal was reached over the weekend. As I write this, stock futures are down, but the bond markets are basically giving a big yawn to the whole thing. Maybe it's just me, but I'm starting to think that the politicians want to provoke a financial panic to serve their own political ends. (But then: Obama may fear losing the election more than he fears default.)

The WSJ notices something that has been apparent to the rest of us for a long while now: President Obama does not want to cut spending. Nor do his Democrat bretheren in the House and Senate. The only real raison d'etre of the Democratic Party in the 21st Century is to hand out "goodies" to various victim-groups, and their only real imperative is to keep the gravy-train rolling. The collapse of the Socialist/Marxist ideology in the last century hollowed out the ideological core of the Left -- all they have left is the statist impulse, with no guiding philosophy behind it.

Roger Kimball from PajamasMedia compares the debt-ceiling debate to the labors of Heracles. (That's "Hercules" to you Latinate swine.)

I am a cynic about the debt-ceiling thing -- I think it's a sideshow -- but it may be that the Treasury's liquidity is worse than thought. (You can look at my Saturday essay for the difference between liquidity and solvency.) Just bear in mind that what they're talking about in this specific case is a (possible) liquidity problem.

There was a really good article by Peruvian economist Hernando de Soto over the weekend entitled "The Destruction of Economic Facts", and I urge you to read it. de Soto lays a finger on one of the biggest dangers facing our economic system in the 21st century -- the loss of transparency in the markets, and the inability of regulators and investors alike to discover who is holding what, what prices are being paid, or even who actually owns what assets. (The notional size of this "shadow" financial system? About $700 Trillion dollars, or the GDP of the entire world for ten years.) (h/t to rdbrewer for the link.)

Transparency and discoverability is vital to a healthy economic system. If you go to buy a good, you have to know what the price is, and you have to know that the person selling the good has legal standing to do so.

Why is teenage unemployment at an all-time high? Because adults are filling all the low-end jobs that teenagers used to do. It's not just the economic downturn that has caused this: illegal immigration, the minimum wage law, over-regulation, burdensome corporate taxes, and outsized costs to employers for hiring new employees are all factors.

Is the China "bubble" about to pop?

Meanwhile, Gold hit a new high over the weekend at $1620/oz. You can read this as a vote of "no confidence" in the political class.

Every day brings more evidence that Atlas Shrugged was not fiction, but prophecy.

There are those brave souls who push back against the statist juggernaut and try to keep market-economy principles alive. Like these Louisiana monks.

UPDATE 1: Education bubble? What education bubble?
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Posted by: Monty at 05:02 AM | Comments (209)
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Does this rag smell like chloroform to you?

Posted by: Gabriel Malor at 02:56 AM | Comments (110)
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Hey all - I'm back.

And tanned, rested, and ready...for another vacation which is why I always say that any sufficiently awesome vacation requires still another vacation to fully wind down from it.

Well that ain't gonna happen so I offer this eye exam instead.

Oh and thanks to all the people who worthily filled in on the ONT during my absence!

How Good Are Your Eyes?

Well take this quick test to see if you need glasses: Sitting at your normal reading distance from the screen do you see Marilyn Monroe or Albert Einstein?

If you see Marilyn Monroe, you should probably be wearing glasses or contacts.

If you see Albert Einstein, then you're seeing things as you should.

So how does it work? The answer is that this image is a mix of low frequency elements from a picture of Monroe and high frequency details from a picture of Einstein. Normally our brain pays more attention to higher frequency components of an image so if you have normal vision, you'll tend to see Einstein's face. But if you're near-sighted, the high frequency details are blurred and so you'll just see Monroe. more...

Posted by: Maetenloch at 05:20 PM | Comments (459)
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That picture cracks me up. It looks like adults trying to get some work done. Without the distraction of a self-absorbed brat-president. From National Journal:

Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif., met at the White House for a meeting at 6 p.m. that lasted a little more than an hour. The meeting started an hour after the first of the Asian global markets opened. House Speaker John Boehner, R-Ohio, on Saturday had asked for a debt framework before then, intended to give the Asian markets time to process a last-ditch bid to ward off the market turmoil.

Reid is taking a proposal for "at least" $2.5 trillion in spending cuts as part of a debt-ceiling deal, seeking Obama's approval, according to an aide.

Both Reid and Boehner are advancing plans to raise the debt ceiling. The biggest difference is that the Reid plan would increase the borrowing limit through at least the November 2012 election, while the Boehner proposal would have two stages – with the debt ceiling increase coming early next year and allowed only if matching spending cuts are enacted. Democrats have said that carrying the borrowing authorization past the election is a make-or-break provision. Republicans want two votes, saying they hope to wring more savings.

Meanwhile, conservatives are pushing for a bill to force Obama to avoid default and to pay Social Security recipients and soldiers. From The Hill:

Members of the Senate Tea Party Caucus have met with House freshmen to discuss a plan to pressure House Speaker John Boehner (R-Ohio) to bring the Full Faith and Credit Act to the floor.

The legislation would direct Obama to prioritize federal payments to the nationÂ’s creditors, Social Security recipients and soldiers serving in Afghanistan and Iraq.

And the White House just revealed it will go along with whatever deal that makes it through Congress.

In an accidental moment of honesty, White House Deputy Press Secretary Dan Pfeiffer today admitted on Twitter that President Obama will likely sign any debt deal Congress sends his way.

So, it looks like real progress is being made.

Posted by: rdbrewer at 04:40 PM | Comments (114)
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Allied forces having successfully taken the beachheads, were now slogging through the hedgerows and traps. So much about history has (rightly) commemorated the landings, and fight of June 6, 1944.

There was so much more danger waiting, so many battles yet to fight.

At this point in the fight, victory was not assured. Hitler's "Fortress Europe" did not depend upon the beaches. It was a retrograde action, miles of hedgerow, and flooded fields, and danger for the Allies. They were fighting into a well-laid trap.

And still they fought.

This win cost thousands of lives past the beaches. God grant them rest, and I hope we're not so young we ever forget what they did.

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Posted by: Dave in Texas at 04:19 PM | Comments (37)
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From Hot Air's headlines yesterday, two different teams of scientists at the Large Hadron Collider are reporting a "bump" in their data. That's what they always say when they think they may have found something.

Experts were quick to point out, however, that the bumps could also be caused by computer glitches and flaws in data models.

Fabiola Gianotti, spokeswoman for a 3,000-strong team using detection equipment called Atlas, said: 'We cannot say anything today, but clearly it's intriguing.'

Her view was shared by Guido Tonelli, spokesman the other team using CMS detectors, who independently discovered bumps in their data as well.

He said more research was needed to isolate the difference between 'statistical fluctuations or possible hints of a signal'.

If the bumps are from nature and not man-made error, scientists will have found proof of the last piece in a jigsaw puzzle that forms a theory of how we understand the universe.

Excellent video explaining the Higgs boson below the fold.
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Posted by: rdbrewer at 12:38 PM | Comments (277)
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I was poking around The Perfect World forum the other day and found a link owner CalGal posted to a New York Times article about a film only William Shatner could have made, The Captains. It's a documentary about Shatner all the captains. (Shatner.)

In “The Captains,” which Mr. Shatner wrote and directed, he interviews the five performers who have succeeded him as “Star Trek” leaders, on starships or space stations: Patrick Stewart, Avery Brooks, Kate Mulgrew, Scott Bakula and Chris Pine.

. . .

Much of the fun of watching “The Captains” is waiting to see just how shameless a huckster and self-promoter Mr. Shatner can be. You don’t have to wait long. He starts his journey by flying to England to visit Mr. Stewart, and on the tarmac he greets an executive of the aerospace company whose plane will carry him. It’s a blatant product placement, but it’s more than that: in the course of the conversation, it comes out that the man’s career choice was inspired by “Star Trek.” “He became an aeronautical engineer because of me!” Mr. Shatner says, with limpid satisfaction.

. . .

Striding among the booths, he encounters a series of actresses who are there to make money off their “Trek” connections — Jeri Ryan, Sally Kellerman, Grace Lee Whitney (the ageless Yeoman Rand). Each time he turns to the camera and says, this was the most beautiful girl in the history of “Star Trek."

(Emphasis added.) Heh. I love the way Shatner plays "a guy named William Shatner." He's always right on the edge of being a douchebag but never crosses the line. There's a self-deprecating quality built into his act. He's always making fun of himself, and he's in on the joke. It's a parody of The Self-Absorbed Actor. Or is it an act? Very skillful indeed.

There should be an Oscar for off-screen lifestyle and self-promotion, the "Living the Life" award. Heck, just call it "The Shatner."

Shatnerpalooza sounds like fun. So does that documentary. I don't get Epix, so somebody tell us about it. The Captains started on Epix channel on Friday, and Shatnerpalooza is already underway.

Trailer below the fold. (Thanks to "gu1tar.") more...

Posted by: rdbrewer at 10:01 AM | Comments (246)
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