The Debt Limit and CCC Payments

John Phipps notes that farm program payments made through CCC (Commodity Credit Corporation) could be impacted by failure to raise the debt ceiling. 

That fits with my memory of the old days--our release of deficiency payments would be delayed until Congress got through with the debt limit. Of course, I could be misremembering; it might be the delay was in passing language giving CCC money.  CCC has statutory authority to borrow money from the Treasury for its operations.  So if CCC writes drafts on the Federal Reserve Bank of Kansas City up to its limit, it has to suspend payments until Congress appropriates money to reimburse the Treasury.  Complicated, I know, but that's what happens when you have both lawyers and accountants messing around in your business.

Carolyn Hax on Our Budget Problems

Carolyn Hax is the Post's advice columnist. Today's column starts with a query from a two-career, two child family, where the wife is feeling a bit overwhelmed. Her advice is appropriate, not only for the question, but also for the US Congress and political system in dealing with our budget problems:

". It’s so easy to focus on the individual items that make up your life: We need to do X for the kids, we need Y amount of money, Z is necessary for my job and I need this salary, etc. That’s because they’re small, incremental decisions, often conveniently black-and-white, so making them brings a sense of progress — all while leaving the bigger, scarier, grayer issues entirely unaddressed.

 Since semi-conservative columnist Robert Samuelson is also in the paper bemoaning ":

government has promised more than it can realistically deliver and, as a result, repeatedly disappoints by providing less than people expect or jeopardizing what they already have. But government can’t easily correct its excesses, because Americans depend on it for so much that any effort to change the status arouses a firestorm of opposition that virtually ensures defeat.

[I was astonished to have Samuelson say that Rep. Ryan would "gut defense"; my impression which may be wrong is that he didn't touch defense beyond Sec. Gates' proposals.  But anyway, when we look at the big picture, as Ms Hax exhorts us to, through Ezra Klein's eyes, we find the current law will end the deficit.  (What he doesn't say is government spending increases as a percent of GDP--the point is that tax provisions on the books would raise enough, assuming the PPACA provisions are implemented.)

Unforeseen Consequences: Ebooks

The rise of ebooks may mean the decline of donations of used books to library book sales.

How Politics Works--Kaplan, the Post, and Reps

The Washington Post has a good article on their Kaplan subsidiary, which started out as a test preparation business, was purchased by the Post to diversity their business, became a for-profit education business making big money off low-income students who take government loans. Ir captures some ways our political system works:

You take a worthy cause which appeals to most, especially the left--helping people get more education, particularly people who have been in the workforce and want to improve themselves and people who couldn't go to college right out of high school.  This taps into the idealism of the left.

You implement it using a method which appeals to the right: a competitive market in for-profit educational institutions and which rewards the entrepreneur.This taps into the greed of the right.

The combination of factors  means this happens when a Republican comes to power:

"One of its [GWBush's administration] key players was Sally Stroup, assistant secretary for postsecondary education, who had been a lobbyist for the biggest for-profit education company, Apollo Group. Soon the agency eased regulations, allowing companies to reward recruiters based in part on the number of students enrolled, or as one government report later called it, “asses in classes.” Like others, Kaplan made enrollment incentives one element of employees’ compensation. Stroup did not respond to request for comment.

Congress also made a change that helped spur enrollment. In 2006, Rep. John A. Boehner (R-Ohio) — then House majority leader and a major ally of for-profit education companies — pushed through legislation that lifted federal loan restrictions for online-only schools.

Our political parties also can act as checks; the story goes on:

With the election of Democrat Barack Obama to the presidency, a new team landed at the Education Department, one that took a skeptical view of the for-profit sector.

And then the magic of the market comes into play: speculators who had successfully "shorted" the housing bubble saw another opportunity to gain:

Investors were hoping the government would tighten the spigot, a move that would jolt the entire for-profit education sector while leading to a big payday for the shorts. Today, investors have sold short — in essence, bet against — shares equal to about one-tenth of The Post Co.’s outstanding stock, about 3.8 percent of Apollo’s and 31.3 percent of Corinthian’s, according to investment Web site.

Sentence of the Day for Farmers

From Farm Policy:
The top five earnings years for farmers in the last 35 years have occurred in the last decade.

Meanwhile, Rep. Ryan is proposing a 20 percent cut in farm programs, beginning with the 2012 farm bill and implemented as the Ag committees want.

Fight Global Warming: Legalize Pot?

 A headline on a post at Treehugger says 1 percent of US electricity goes to grow pot!  So I'm waiting for the green movement to push legalization of pot as a way to move growing pot outside and save electricity for higher purposes, like maybe tanning salons.

Rep. Paul and Rep. Dave

Thirty years ago a Republican congressman from the upper Midwest had risen to prominence through his wonkish demeanor and mastery of the ins and outs of the Federal budget. The Republican leadership of that time gave him full power over the budget, which led to major changes in the federal government.

Today another Republican congressman from the upper Midwest has risen to prominence through his wonkish demeanor and mastery of the ins and outs of the Federal budget.  The current Republican leadership (of the House, not the President this time) have given him full power over the budget.

Will Rep. Paul Ryan succeed in making major changes to the federal government?  Will he, like ex-Rep. Dave Stockman, the director of OMB, have to be "taken to the woodshed" for going off the reservation and admitting his magic asterisk was bull?

[Updated:  I should have added, both Representatives were good at getting favorable press coverage; the media loved the wonks.]

Diversity Hidden in Plain Sight

"When the New York Times recently did a piece on me, Ezra Klein, Brian Beutler, and Dave Weigel exactly zero people complained about the massive over-representation of people of Latin American ancestry that reflected. People saw it as a profile of four white dudes. Which is what it was. But my dad’s family is from Cuba, Ezra’s dad’s family is from Brazil, and Brian’s mom’s family is from Chile."

Ethical Geezers--Are We a Minority?

Lots of stuff in the blogosphere on Rep Ryan's proposals.  One thing he does is to exempt people over 55 from the effects of his change on Medicare.  That may be wise politically, but it's not right.  I prefer the approach in the original Ryan-Rivlin plan, where geezers would choose between the current plan and the new plan (supported premiums/vouchers). Best would be a plan which is phased in and which applies to everyone.  No special breaks for geezers, even though we do vote.

Globalization--a Well-Traveled Baby

From Chris Blattman's blog, announcing the arrival of his daughter (plus stories on her name)

"Considering she made it to Cote d’Ivoire, Burundi, Uganda, Vietnam, Thailand, France, England and Canada while in the womb, we figure a name of many meanings (and easy pronunciation) fits perfectly.