Tag: Boomergeddon
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The Folly of Expanding Medicaid
by James A. Bacon As Richmond lawmakers ponder whether or not to expand Virginia’s Medicaid program, the center-left Commonwealth Institute has made another pitch for the program. Their paper, “Medicaid is Far from Broken,” creates plausible talking points to bolster anyone inclined to accept the federal government’s offer to cover the vast majority of the…
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Boomergeddon Three Years Later: Still Running on Schedule
by James A. Bacon With the non-stop news coverage about the federal budget and debt-ceiling crisis, I’ve been thinking a lot about the Boomergeddon scenario I wrote about back in 2010. Since I predicted a financial collapse of the federal government within 15 to 20 years, a number of significant developments have occurred. Congress enacted…
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The Debt Vise Tightens
by James A. Bacon Moody’s Investor Service may revise its rules for rating municipal bonds, and the news could be bad for states and local governments with large unfunded pension liabilities. The company is proposing to increase the weighting of pension liabilities and other long-term debts from 10% to 20% in its scorecards for General…
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Prairie Populism Meets Boomergeddon
Over on the Strong Towns blog, Andrew Burleson describes the reaction that he and his compatriots get when they tour the country preaching their Minnesota brand of Boomergeddon, to wit: that human settlement patterns in many cities and towns are fiscally unsustainable; local elected officials need to re-think everything about growth and development; and communities…
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What Happens in Detroit, Does Not Stay in Detroit
Detroit seems a long way from the Old Dominion, and its bankruptcy woes seem largely irrelevant to a state and its local governments which, whatever else their flaws, have among the strongest bond ratings in the country. But it would be a mistake for Virginians to ignore events in the Wolverine State. It looks like…
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It’s the Debt You Don’t See that Kills You
In theory, state and local governments in the United States are required to balance their budgets every year. In practice, many have been running massive deficits. Count on slippery politicians to find the loopholes. The most widely practiced trick is the under-funding of pension obligations. Another is dishing off debt to independent authorities. Another is…
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Boomergeddon Watch: Uncle Sam’s Other Debt
by James A. Bacon The federal government is far more exposed to a rise in interest rates than commonly believed. As I frequently remind Bacon’s Rebellion readers, the national debt stands at $17 trillion, a sum that is increasing with no end in sight. But Uncle Sam’s total financial liabilities are far larger, says James…
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Boomergeddon Watch: The Interest Rate Trap
by James A. Bacon In previous blog posts, I’ve explored how the Federal Reserve Board’s near zero-interest rate policy has created drags on economic growth and job creation that have significantly offset its stimulative effects. First, by reducing yields on bank CDs, money market funds and bonds, super-low interest rates penalize savers. Low yields create…
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Boomergeddon Watch: Chicago
Chicago is said to be the city that works. It has problems but its economy remains strong and diversified. It is no Detroit. Not yet… Unfortunately for that narrative, Moody’s last week made an unprecedented cut in the city’s bond rating from Aa3 to A3. “The outlook incorporates the likelihood of continued growth in unfunded…
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Boomergeddon Watch: Detroit
Defenders of the leviathan state were getting so hopeful. The U.S. budget deficit is well below $1 trillion a year, the economy is still growing, the health care cost curve shows signs of bending and even California has a balanced budget. Things may not be great right now, but they’re mending. All that talk about…
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Haven’t We Seen this Show Before?
Item One, from WSJ article, “Bernanke Affirms Bond Buying” (my emphasis): “Federal Reserve Chairman Ben Bernanke came down firmly in favor of continuing the central bank’s bond-buying programs, even as he acknowledged concerns that the efforts might encourage risk-taking that could someday destabilize markets or the economy.” Item Two, from WSJ article, “Builders Fuel Home…
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Your Health Care System on the Government Needle
From the power-corrupts-and-absolute-power-corrupts-absolutely department in today’s Wall Street Journal: An extraneous and last-minute provision inserted in the New Year’s Day fiscal-cliff legislation sharply cut Medicare payments for Elekta AB, a Swedish maker of radiation tools used to battle brain tumors. Turns out that Elekta competitor Varian Medical Systems, of Palo Alto, Calif., had persuaded Senate Majority…
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Medicaid Madness
State bean counters have revised their estimates for what it would cost to expand the state Medicaid program under the Patient Protection and Affordable Care Act. The good news is that Virginia actually would save money, thanks to federal reimbursements and other provisions in Obamacare, through 2019. And when it does start costing the state,…
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The Fiscal Cliff Is Dead! Long Live the Fiscal Canyon!
by James A. Bacon Rejoice! The fiscal cliff has been averted. Fret! There is more political turmoil to come as Washington mud wrestles with sequestration spending cuts and the cap on federal borrowing in the next two months. Despair! Washington’s inability to enact serious budget reform means that Boomergeddon, once only a strong probability, is…
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Laughing in the Face of the Fiscal Cliff
Jim Bacon chats with Scott Lee about the “fiscal cliff” on Bearingdrift’s Score Radio Network. Cheer up, things could always be worse. Iran could get nuclear weapons. Space aliens could invade California. Madonna could announce another world tour. But that’s about it. I can’t think of anything else that would exceed the fiscal cliff for…