Saturday, July 30, 2011

Hold the Debt Limit Line

The debt limit talks show people for what they are. Political gamesmanship amuses the watchers, I suppose. So whatever President Obama and his supporters choose to pay if there is a halt to the borrowing will reveal character and resolve. Insolvency will not be aided by further borrowing. If you have sold the future, what is there to do?

I think the point here is that the present should not have the power to indebt the future until choices narrow to subsistence and debt service. We are at the crossroads of history and rationality as the choice to default moneylenders or default to the people looms over Washington. So far TV business news has mentioned jitters in the Orient and in Abu Dhabi, presumably due to default worries as the USA legislators grind out a compromise guaranteed to please few.

One thing both sides agree on is the need for entitlement reform. You know, like Social Security, Medicare and Medicaid. The COLA (cost of living allowance) presently in place in Social Security which guarantees a Social Security raise if inflation appears is now to be cut out of Social Security. Since Ben Bernanke's stated policy and objective is to keep inflation at about 2% a year, all Social Security checks are automatically worth 2% less in spending power. In ten years, a Social Security check will decrease in value by 20%. What an easy way to pay off debt! Just make the legal tender of the debt worth less and print more money. Of course, this policy hurts the retired depending on Social Security, but so what? What are these people thinking?

The interest rates might rise if the debt limit is not reached! Smallholders all over the country would celebrate possibly getting something for their CD holdings. Of course inflation erodes further the buying power of the dollars held by the smallholders. The interest rate paid is far less than inflation, so the value of the holding decreases by 2% or more each year due to abysmal interest rates paid, courtesy of the Federal Reserve.

Talk of canceling mortgage interest deductions would forge towards the goal of cutting trillions in deficit spending, they say. So now people looking for a mortgage will have to be told they cannot deduct the cost of the mortgage from your income tax payment. Across the board aimed at homeowners, a handy way to raise cash. It also cuts consumer spending, like other schemes. Cutbacks in Federal spending might be the best way to raise cash you don't have.

I hope our people avoid all the crisis mongering and forge ahead to success in not raising the debt limit. So California has arranged for billions to borrow if the Fed doesn't keep paying them. Sounds like a good idea to me. Self funding for the states. Cutbacks in government jobs are inevitable. And statistics suggest that the trend for the last few years has been to forward the Bush tax cuts on that basis that higher taxes means fewer jobs. I don't think that the data demonstrates that the Bush tax cuts generated any jobs, and indeed presided over massive layoffs and a rise in unemployment and the bailout crisis.

Closing tax loopholes is an interesting option but whose loopholes will be closed? That's when it gets political and choices loop back to who doesn't know what's going on anyway and who does know what is happening and who might give a nice contribution after things are resolved favorably. Closing middle class loopholes won't help the economy. It would cut consumer spending.

Counter by cutting prices, thus more people could buy widgets if they wanted to and more could be sold. But the people making the widgets would get paid less per unit because you are selling them for less....The continuing devaluation of real estate is a true indicator of the economy. It occurred at about a 4% rate last year, close to inflation in fuels and commodities.

More debt will not cure insolvency and avoiding the cutbacks in government spending is futile as the ready cash remains tied in obscure investments that the Plebian could not begin to understand except that the securities markets do not create jobs on the ground making widgets. If you cannot make widgets, you cannot sell them, of course. And if the Chinese make widgets at a quarter the cost of making them here and can ship them for another quarter and still undercut 50% on the dollar, you are out of business because money is tight and people cannot afford to pay more.

Now if the shipping costs rise because fuel costs are gradually rising and the trend is to continue to do so, then shipping costs might outweigh the worth of the goods. Possibly it is not worth shipping some of the Oriental goods due to the cost and the importance of the goods. Do we need to import glass, which is heavy and costs more to ship, when we have glassworks in Ohio and Arkansas and a railroad network for transport? How about keeping our scrap iron here instead of shipping it to the Orient? Smelting it down, refining and making new things would create jobs here and cut down on shipping fuel use.

The more debt there is, the more payments to make and less ready cash after the borrowed lump sum is blown, thus our problem now. Wars already fought, securities already purchased and sold, real estate is deflating and the chickens come home to roost. Politicians indebted the future while some of the old decry the opinions of youth, who must live in the future as it is created now. We must listen to the youth in Congress and bypass name calling and deriding, and remember who voted for what all these years. Accountability is a heavy cloak to wear.

Power is not easily relinquished but age will require it.


Saturday, July 23, 2011


TUCSON CITY NEWS: Rio Nuevo Rundown

The Rio Nuevo Board takes action to uncover the daisy chain of events leading up to the evaporation of the Rio Nuevo dream. It appears that high rollers took most of the money and very little hit the ground for the little guy. Rio Nuevo is a tax rebate program created by the state aimed at encouraging development that would result in increased tax revenue. The construction was to create jobs and the result was to attract consumers.
Since a few well connected individuals made off with most of the money, there were very few jobs and now there are no consumers because the money was blown on multiple designs, trips to Italy for U of A faculty, a useless $700,000 video, and endless cost overruns that were always granted. The rich became richer and the poor had no jobs, yet our tax money paid for all of it.

The problem with Rio Nuevo is that the projections lacked practical vision, leaving the field wide open for charlatans, which I will label any designer who designs something that is so expensive, it can never be built by the employer. Yes, employer. Rio Nuevo hired these people to produce a workable design and they did not do that. Clawback time for sure. Oh, but somebody's feelings might be hurt if they had to refund money for a job not done well. How about limiting design costs for that actually constructed?

This Garfield Traub mess was to be predicted, since they have serial lawsuits recorded all over the country where they sued other cities. I don't know who brought these people in, but they should be thrown out. And as for Sundt not paying his contractors, I say that they be excluded from bidding on government work until they pay up.

So I heard on the John Justice program that this new forensic audit will not only look at the existing paper trail of who was paid what, it will also examine bank records and possible conspiracies centered around the disbursements. Let's remember that all of this took place with the Democrats firmly in control, their lawyer issuing opinions that allowed for payments over the amount of contract to flow unimpeded into the hands of the unscrupulous. The Democrats and their buddies milked Rio Nuevo dry. Just hours from the institution of a new Rio Nuevo Board, the old board borrowed $80,000,000 and disbursed most of it. This money trail has to be followed.

The upcoming city council elections are extremely important. We have a little Napoleon around here by the name of Jeff Rogers, head of the Pima County Democrats. Rogers runs the town and the politicians like a fiefdom, dictating positions and lack of compromise and apparently he supported the Rio Nuevo Ripoff. His people are still in office, still burdening the city with debt and still allowing rampant cost overruns on the streetcar and the bridge. The Democrats are running a lawyer for Mayor, who has deep financial ties to the current city council, which means more of the same for the taxpayers. The Democrats are supporting the unions yet allowing workers to be furloughed in order for workers on overtime to have the empty slots. Are the union honchos grabbing that work for themselves, while the rank and file take furloughs? The Democrats deserve to be voted out of office for corruption and waste.

The primary election for the Mayor and city council is coming up in August. Republicans have two candidates for city council, Jennifer Rawson in Ward 2 and Tyler Vogt in Ward 4. The Republican write in candidate for Mayor is Rick Grinnell. I hope you all write in Rick Grinnell on your mail in ballots for the primary. If enough people write him in, then Republicans will have a candidate on the ballot.

If you are wondering why we don't have a Republican on the ballot when you signed a petition for Shaun McClusky, I'll tell you now. Enough petitions were turned in, but some petitions were signed by two people, which is taboo, according to the elections people. The Democrats challenged Shaun's petitions and they were thrown out because two people signed a few of them. The signatures were valid, but the glitch allowed the Democrats to challenge successfully. It seems to me that the intent of the people who signed the petitions was to have Shaun on the ballot and that the government thwarted the will of the people. The people signed the petitions! I think that a huge write in campaign for Rick Grinnell would reward the Democrats for ignoring the will of the people.

Friday, July 08, 2011

Amendment to Pima County GOP Bylaws

Amendment to the Proposed Bylaw Change set forth by the Pima County Republican Central Committee

This is the original proposed bylaw change to add Section 5 to Article IV:

An elective officer of the county committee may be removed at any time by a vote to that effect of two-thirds of the precinct committeemen of the county committee elected per the provisions of A.R.S. ~ 16-821 A. and present in person or by proxy at a mandatory or special meeting of the county committee, but an elective officer may not be removed at a special meeting unless his/her proposed removal is set forth in the notice of the call of the meeting as one of the items of business of such meeting. Thirty percent of the precinct committeemen members of the county committee elected per the provisions of A.R.S. ~ 16-81 A. and present in person or by proxy at a mandatory or special meeting called for the purpose of removal of an elective officer shall constitute a quorum.

It is proposed that the following paragraph be inserted behind the above Amendment to the Bylaws:

An elective officer of a Legislative District may be removed at any time by a vote to that effect of two thirds of the precinct committeemen of the Legislative District elected per the provisions of A.R.S. ~ 16-823 C. and present in person or by proxy at a special meeting of the Legislative District precinct committeemen. An elective officer may not be removed at a special meeting unless his/her proposed removal is set forth in the notice of the call of the meeting as one of the items of business of such meeting. Thirty percent of the precinct committeemen of a legislative District elected as per the provisions of A.R.S. ~ 16-821 A. and present in person or by proxy at a special meeting called for the purpose of removal of an elective officer shall constitute a quorum.

(The rationale behind this amendment to the proposed Bylaw Amendment is that many of the Legislative Districts have no mechanism to remove officers, if that does become necessary. This is a situation similar to that of the county GOP, and needs to be rectified. Since the LD officers are elected differently even though they are on the county GOP committee, a different paragraph is needed to cover that eventuality. It also offers a failsafe for the LDs in case of lapses of judgment, infighting, cronyism, sectarianism and false accusations. If the central committee wants power to remove the chair, they should all be subject to the same removal procedure as the Chair.

I think that allowing non precinct committeemen to vote or hold proxies in this election is a violation of some kind that must be investigated. This election is for elected precinct committeemen who hold proxies of precinct committeemen from the same precinct only, not Tom, Dick and Harry. There needs to be some order maintained. If citizens want to vote as a precinct committeeman, then they should run for the office.)

Dorothy Prater Niemi 8 July 2011