California's Gasoline Taxes are Highest in the Nation

Booker T. Washington on "Race Problem Solvers"

Today, 28-AUG-2013, marks the 50th anniversary of Martin Luther King, Jr.'s famous "I Have a Dream" speech.

In celebration, a number of prominent "civil rights" proponents took the podium in Washington. Listening to their words, it appears that some either slept through King's actual speech, misunderstood its meaning, or have other motives. The behavior of some civil rights "leaders" (Jesse Jackson, Al Sharpton, and sometimes even the President himself) reminds me of the words of Booker T. Washington, who was one the last generation of African American leaders born into slavery.

I am afraid that there is a certain class of race problem solvers who don't want the patient to get well, because as long as the disease holds out they have not only an easy means of making a living, but also an easy medium through which to make themselves prominent before the public.

From "My Larger Education" by Booker T. Washington (1911).

Booker T. Washington's words are amazingly prescient having been written more than a century ago.

Is the U.S. Treasury Hiding Debt (Again)?

"You can observe a lot by just watching." 

-- Yogi Berra

A number of web sites have been amazed that the U.S. public debt holds remarkably steady near the maximum legal limit of $16,699,396,000,000.00 ($16.699 TRILLION) for 70 days and counting.  Has the U.S. government stopped spending?  Okay, pick yourself off the floor from laughing.  No, the Treasury is simply hiding debt using "extraordinary measures", as they've done in the past.

The Treasury provides the daily debt status on their web site.  You can also search for historical data. Here's a chart the graphs this total pubic debt since January 1, 2008.  Click to enlarge.  The chart also shows the legal debt limit in effect over time.  Note that there have been prior periods where the debt remained remarkably flat for a long period of time--before August 2, 2011 as an example.

As soon as Congress approves a new, higher debt limit, the Treasury remarkably reports a surge in new debt.  It's an old game.  After Congress increased the debt ceiling on August 1, 2011, miraculously, the U.S. needed to borrow nearly a quarter trillion dollars in new debt!  Where did Treasury hide that $238 billion in debt?  Similarly, the Treasury borrowed $120 billion in new debt over a two day period starting January 30, 2012.  Enron and WorldCom accountants would be proud.

Applying a linear regression of the data (R-squared is 0.9874, indicating a good match), it appears that the U.S. government is borrowing roughly $3 billion a day!  Granted, the Federal Reserve is currently buying $85 billion in U.S. debt per month, so the two numbers jive nicely ($85 billion divided by 30.4 days per month equals about $2.8 billion per day).  As reported by the Treasury, the total public debt remained flat at about $16.699 TRILLION. However, at $3 billion per day, the projected debt very likely currently exceeds $17.10 TRILLION.  So where is Treasury hiding that extra third to half a trillion dollars?

Once Congress inevitably increases the debt limit, as they always do, stay tuned for a whopper of a borrowing day by the Treasury.  Of course, we could balance the federal budget, but ...

See also ...

United States Treasury Department: The Daily History of the Debt Results (1-JAN-2011 to 26-JUL-2013, “Total Public Debt Outstanding”)

www.treasurydirect.gov/NP/debt/search?startMonth=01&startDay=01&startYear=2011&endMonth=07&endDay=26&endYear=2013

The Concord Coalition: Understanding the Federal Debt Liming (Increases in the Debt Limit since 1997)

www.concordcoalition.org/issue-briefs/2013/0114/understanding-federal-debt-limit

Congressional Research Service: The Debt Limit: History and Recent Increases (May 22, 2013)
www.fas.org/sgp/crs/misc/RL31967.pdf

Soquel by the Creek: The Debt Ceiling and Where Do You Hide $238 BILLION?
soquelbythecreek.blogspot.com/2011/08/debt-ceiling-and-where-do-you-hide-238.html

The Rest of the Story Behind President Obama's Deficit Claim and PolitiFact's "Fact Checking"

In a speech at Knox College in Illinois on July 24, 2013, President Obama said ...

"... our deficits are falling at the fastest rate in 60 years."

The fact-checking website PolitiFact even rated this claim as true.  However, PolitiFact fails to put this claim and their "true" rating into proper context.  It is much like saying that it is true that the Nazis did good things, as some still claim, while ignoring the big picture of their atrocities and mass murder.

It is indeed true that "our deficits are falling at the fastest rate in 60 years," as shown in the following figure (click to enlarge).  According to the PolitiFact article, the White House makes this claim using a four-year change in the deficit as a percentage of the U.S. gross domestic product, as shown in this chart.  However, what both President Obama and PolitiFact fail to mention is that while "our deficits are falling at the fastest rate in 60 years," this comes after increasing our deficits at the fastest rate since we won World War II after defeating the Nazis and the Japanese Empire.  The deficit reduction is laudable, but it also comes as a result of the prior massive deficits.  Some of the deficit spending during President Obama's first term can be attributed to Bush-era spending, under a Democrat-controlled Congress, including seizing Fannie Mae and Freddie Mac, TARP, and the initial auto bailouts. Additional spending happened under the Obama Administration, again with the Democrat-controlled Congress, including the $787 billion Stimulus, Cash for Clunkers, buying General Motors, 99 weeks of unemployment benefits, and increased welfare, food stamps, and disability benefits.

Let's look at this same information in another manner.  The following chart shows the annual budget surplus or deficit (mostly deficits) as measured as a percentage of the U.S. gross domestic product (GDP).  The bars are color-coded by political party of the President (red for Republican, blue for Democrat) and the Presidents are listed at the top.  As you can see, it is technically true that we are currently reducing our deficits at their fastest pace in 60 years, but only because we ran massive deficits in excess of $1 TRILLION for four years from 2009 through 2012.  Although the 2013 fiscal year isn't yet complete, the White House Office of Management and Budget (OMB) forecasts a smaller annual budget deficit of $759 billion, which helps bolster the President's claim.  However, as a percentage of GDP, this "greatly reduced" deficit still exceeds the largest deficit from President George H. W. Bush in 1992--twenty years earlier.  Part of the reason for the for the smaller budget deficit is the controversial sequestration process that enforces across-the-board budget reductions in spending growth.

Our Rating

We rate the President's claim as "technically true but misleading."  The President is making claims that omit the full context for his claims.

Unfortunately, this isn't the first time that we've found President Obama's claims to be factually correct but misleading.  He, or somebody on his staff, is apparently a fan of the classic book, How to Lie with Statistics.  For another example, see President Obama's claims "... that Ho Chi Minh was actually inspired by the U.S. Declaration of Independence and Constitution, and the words of Thomas Jefferson.”.  Based on Ho's actions, however, Ho apparently read a cheap knock-off translation of these works.

See also ...

• Digging Deeper Into President Obama's Manufacturing Jobs Claim
• What Does the Obama Job Chart Really Mean?

Misconceptions

We received the following tweet that originally alerted us to President Obama's deficit claim. Unfortunately, many of the President's supporters do not actually understand what the President claimed.

The United States government, in no way, shape, or form is the "smallest government in 50 years." The Twitterer is potentially mistaking a claim that we have the lowest percentage of people employed by the government in 45 years. Likewise, the President has not "reduced debt faster than any other President in history."  The President's claim is about deficit reduction, not debt reduction.  Here's a quick tutorial on the difference between deficit and debt, courtesy of the United States Treasury.

In order to have actual debt reduction, we must first run a budget surplus ... and we're in no danger of doing that any time soon.  However, based on changes to policy, it is possible to reduce the forecasted future debt while currently running a deficit.

The President's claim also covers the last 60 years (actually, 64-65 years), not all of U.S. history. There were much bigger improvements to deficits immediately following the end of World War II.

Sorry, we don't "Ignorant much" around these parts.

Methods

According to PolitiFact, the Obama Administration makes this claim using the annual budget deficit measured as a percentage of the U.S. gross domestic product (GDP).  They then measure the difference over a four-year time frame (YEAR(n) - YEAR(n-4).  The deficit as a percentage of GDP data is available directly from the White House web site as Table 1.2.  Use the field "Surplus or Deficit" under "Total".  We used the mid-year updated figures from the White House for 2013, which is not included in Table 1.2.  The updated values are -4.7% and $795 billion, which are to the benefit of the President's claim.

Data Sources

White House: Office of Management and Budget: Historical Tables

Table 1.2—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–2018 (Total Surplus or Deficit as a Percentage of U.S. GDP)
Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-) as Percentages of GDP: 1930–2018 (Total Surplus or Deficit in Current Dollars)
www.whitehouse.gov/omb/budget/historicals

Wall Street Journal: White House Sees Smaller Budget Deficit in 2013 (Lower, revised 2013 deficit numbers based on mid-year update)

online.wsj.com/article/SB10001424127887323368704578594020152453486.html

PolitiFact: Obama says deficit is falling at the fastest rate in 60 years
www.politifact.com/truth-o-meter/statements/2013/jul/25/barack-obama/obama-says-deficit-falling-fastest-rate-60-years

FactCheck.org: Deficits Falling (From Way Up)
http://www.factcheck.org/2013/08/deficits-falling-from-way-up/

California May 2013 Unemployment Rate

According the Bureau of Labor Statistics (BLS), California's official unemployment rate continued to improve in May 2013, dropping by 0.4% from 0.9% in April to 8.6% in May. The national unemployment rate increased 0.1% to 7.6%. California's unemployment rate continues to lag the nation as a whole and is tied with New Jersey at the 5th-highest in the nation ahead of Nevada, Mississippi, Illinois, Rhode Island, and North Carolina.

SOURCE:  U.S. Department of Labor, Bureau of Labor Statistics:  Unemployment Rate for States, Seasonally Adjusted (April 2013, preliminary).

www.bls.gov/web/laus/laumstrk.htm

The current 8.6% unemployment rate is at its lowest level since October 2008, just before the 2008 Presidential election. The current 8.6% unemployment rate remains higher than the 7.0% peak during the prior recession although it currently is lower than the peak of the early 1990s recession.

Source: Federal Reserve Bank of St. Louis: Unemployment Rate in California (CAUR)

research.stlouisfed.org/fred2/series/CAUR/

Total non-farm payroll jobs in California grew by 10,800 jobs and presently stands at 14,612,500 jobs.  The current levels is up 727,200 jobs since the bottom of the recession but is is down 529,600 jobs from January 2008. At the current growth rate of 10,800 jobs per month, total employment will reach January 2008 levels in approximately four yours.

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics:  California, Total Nonfarm, Seasonally adjusted - SMS06000000000000001.

data.bls.gov/cgi-bin/surveymost?sm+06

Approximately 1.6 million Californians remain unemployed, down 364,000 from May 2012.

At the national level, the civilian participation rates in the job market (CIVPART, EMRATIO) remain at their lowest levels in a generation and show no immediate signs of improvement.

The average (mean) duration of unemployment (UEMPMEAN) and the median duration of unemployment (UEMPMED) remain well above the highs set in prior recessions.  The average duration is for all those who are unemployed.  The median indicates that 50% of those who are unemployed had a longer duration, 50% had a shorter duration.  The difference between the mean and the median indicates that there are a large number of long-term unemployed people.  This may be a possible effect of providing 99 weeks of unemployment benefits.

Overall national unemployment rates exhibit their typical ethnic and education-level patterns.

Nationally, Black or African American unemployment is highest at 13.5%, followed by Hispanic or Latino unemployment at 9.1%.  White unemployment is 6.7% while Asian unemployment is lowest at 4.3%.

The unemployment rate is highest for those lacking a high school diploma, currently at 11.1%.  The data is only for those 25 and older, so it does not include teenage unemployment data. Those who are high school graduates, but no college have a 7.4% unemployment rate.  For those with a bachelor's degree or higher, unemployment stands at 3.8%.  In all categories, the overall unemployment rate is higher than historical averages.

A Rare Day Indeed: Drudge Report and Huffington Post are Critical of the Same Politician

June 6, 2013 was indeed a rare day.  The Drudge Report and Huffington Post are often politically diametrically opposed.  Both the Drudge Report and Huffington Post took aim at President Barack Obama and both disapproved of his Administration's policies allowing covert NSA eavesdropping and data mining operations that allegedly involved innocent Americans.

Drudge Report (June 6, 2013)

Huffington Post (June 6, 2013)

The IRS' Employee Union Historically Gives 90%+ to Democrats

The IRS is accused of targeting Tea Party and similar groups for excess scrutiny when these groups applied for tax-free 501(c)(4) status.  Various reasons for the extra scrutiny is alleged.  However, does the IRS' own public-sector employee union play a role?

IRS employees are organized by the National Treasury Employees Union (NTEU), who also manages employees within other divisions of the federal government.  The Tea Party groups advocate for smaller, more affordable government which is in direct conflict with employees and their union within the federal government.  Is this the reason for the additional IRS scrutiny?

While the NTEU isn't among the bigger political spenders at the national level, historically, they give roughly 90% or more to Democrats.