Wednesday, November 9, 2016

November, 2016, Part 6, Political Class Insanity: The Magnitude of Our Naitonal Debt Load, Underfunding State and Local Pensions And Wearing OUt The Fifth Amendment

The current monthly record for the number of posts that were needed to cover one month's worth of insanity is ten. We equaled that record last month when we needed ten days to cover one month’s worth of political class insanity. There is a very good chance that the ten day record could fall this month since as we get closer and closer to the election, the volume of ineptness grows almost exponentially. 

But today and for all of the insanity posts this month, let’s start off with a welcome piece of honest political dialog. It comes from a State Department spokesperson. Mark Toner, who is about to start the daily State Department press briefing. In a joking matter, he makes the following quote: "Welcome to the State Department. I think we have some interns in the back. Welcome. Good to see you in this exercise in transparency and democracy." 

He then burst out laughing at his own quote, indicating he also knew what a joke the Obama administration has been, especially Mr. Toner’s State Department, when it comes to cover ups, lack of transparency, denial of Freedom of Information Act requests, the prosecution of whistleblowers, etc. But at least it was a little refreshing to finally hear some actual honesty out of Washington as we see from the actual clip of the news conference:

With that context of honesty, let’s see what other insanity has been going down:

1) We often talk about how the Obama administration had doubled the national debt in the past eight years, adding a whopping $10 TRILLION to the national debt. The Obama economic and financial policies have incurred about the same amount of national debt as all previous Presidents COMBINED. Just under Obama, every American man, woman and child is now theoretically on the hook for about a another $31,000 worth of that $20 TRILLION national debt, bringing everyone’s theoretical national debt load to over $62,000 each.

But to give this obscene amount of debt some perspective, consider a set of comparisons that the Daily Reckoning website did a little while ago when the national debt was ONLY $19.5 TRILLION. According to their research:

  • The $19.5 TRILLION national debt is larger than the market value of every S&P company (500 companies) added together, $19.1 TRILLION.
  • The $19.5 TRILLION national debt is larger than the amount of financial assets managed by the top seven financial companies (e.g.Vanguard, Fidelity, etc.) in the world, $18.9 TRILLION.
  • The $19.5 TRILLION national debt is far larger than the amount of cash assets, gold, silver and bitcoin currency in the entire world, about $12.7 TRILLION.
  • The $19.5 TRILLION national debt is far larger by a factor of about 36 the value of crude oil exported by the top ten oil exporting countries in the world annually, $535 billion.
  • The $19.5 TRILLION national debt is far larger by a factor of about 156 the value of gold mined every year worldwide, $125 billion.
  • Another perspective based on the first point above: if you cashed out the entire stock market value of every company in the S&P 500 you could still not pay of our national debt.
It is mind boggling how deep the Obama administration, with the help of the entire political class in Washington, has buried us in debt. This is debt that will take multiple generations to pay off, assuming that the country and our economy are still around and have not crashed totally from the debt load, taking our freedom and liberties with it.

And as we pointed out in yesterday’s insanity post, we as a society have nothing to show for this heavy debt burden. Our roads and bridges are still falling apart, our schools still under educate our kids, our veterans still do not get the health care they need and were promised, the list of issues and problems goes on and on, but no problem was ever resolved despite this out of control spending. Insane.

2) It appears that it is not just the Washington political class that has a hard time managing financial matters, running up a $20 TRILLION national debt burden. According to a Heritage Foundation article by Rachel Greszler on October 14, 2016, local and state political class members also have done a horrible financial management job when it comes to state pension funds:

  • According to research done by the American Legislative Exchange Council (ALEC), state and local governments have underfunded their employee pensions plans by a whopping $5.6 TRILLION.
  • Since the pension funds represent legal obligations, that means that local and state taxpayers will eventually have to pay off this $5.6 TRILLION fiscal hole.
  • On average, state and local governments have only set aside $.35 for every dollar they should have been setting aside.
  • This budget/debt shortfall comes out to about $17,000 for every American man, woman, and child.
  • State politicians have done such a poor job in Illinois that currently $.89 of every new dollar set aside for education goes to supporting the retirement pensions of Illinois teachers with only $.11 of every dollar going to actual education activities.
  • Only five states have a shortfall under $10,000 per capita while 15 states have unfunded liabilities that are over $20,000 per capita.
  • And the trend for these unfunded liabilities is not good, having grown by $900 billion in just the past two years or at about a 9% annual growth rate.
  • Almost 90% of a recent Illinois tax increase went to public employee pensions, not government functions.
  • According to the ALEC, state and local government politicians used “Enron-like” accounting procedures and processes to cover up the shortfalls over time, often using widely optimistic interest and stock market return assumptions to hide their fiscal shenanigans.
  • In addition, often state governments simply did not make any contributions to pension plans like they were required to do.
In the end, no one wins except the politicians that likely enriched themselves while in office. Taxpayers will see an increasingly large amount of their taxes go towards higher and higher pension payouts until the tax rates cannot go any higher and the entire pension house of cards crashes, leaving pensioners without any monthly retirement checks or with retirement checks greatly reduced.

3) We have more or less stayed away from the insanity that is the Hillary Clinton/Donald Trump Presidential circus over these past few months. The simple reason for this is that their political insanity would keep us writing 24 hours a day, 7 days a week. This is what happens when you get two of the least liked, least able people running for the Presidency at the same time.

But today let’s take a quick look at a Clinton-related escapade that shows how badly our political processes have been corrupted, how laws that would get ordinary citizens in jail are somehow only suggestions for those in power. This is related to the reality that Hillary Clinton illegally and foolishly, from a national security perspective, used a private computer server in her home to conduct top secret State Department business.

According to reporting by Sarah Westwood, writing for the Washington Examiner on October 24, 2016: 

  • A former State Department computer expert often invoked his Fifth Amendment rights at a recent legal deposition related to a lawsuit concerning Hillary Clinton’s private emails that went through her private computer server.
  • Specifically, he invoked his Fifth Amendment rights an amazing 90 times during the deposition.
  • According to Ms. Westood: “John Bentel, former Director of Information Resource Management of the executive secretariat, would not answer questions about whether the Clintons had paid his legal fees or offered him financial incentives, according to Judicial Watch, the conservative-leaning group that brought the suit.”
  • The disposition was being conducted because a Federal judge became suspicious when he found that Bentel had made contradictory testimony while under oath in a different investigation.
  • Specifically, Bentel had testified under oath at a House committee hearing that he had no knowledge of Clinton’s private computer server but the State Department inspector general had found that Bentel "told employees in his office that Secretary Clinton's email arrangement had been approved by the State Department's legal staff and also instructed his subordinates not to discuss the Secretary's email again." 
I’m sorry, but this is ridiculous. While I totally respect Mr, Bentel's Fifth Amendment rights, invoking it 90 times in one deposition session strains the belief of innocence and lack of hanky panky when it comes to the whole Clinton private server and email scandal and law breaking. Something is afoot here, 90 times using the Fifth Amendment, proving again that laws are for us, but merely suggestions for those in the political class. 

That will do it for today’s political class insanity. A varied set of insanity tastes from more shady going ons and sandbagging regarding Hillary’s illegal email and server activities to severe underfunding of government employee pension plans to the always mind boggling Federal government national debt. More tastes of insanity tomorrow.

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