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Froma Harrop - Is the sequester that awful?

The sequester may be "dumb," as the president says, but one thing it is, is interesting. Especially the politics.
First off, it slashes defense spending, which Democrats want and most Republicans don't. With the exceptions of Hawaii and Maryland, the deepest defense cuts are being felt in the red (or purple) states so intent on shrinking government.
Irony abounds. Note the spectacle of red-state politicians fighting off tax hikes that would hit hardest on the blue states, where incomes are higher.
Let's talk about Virginia, whose economy will be most hurt by the squeeze on civilian defense jobs. Thanks to the war on terror, a civilization of gleaming new office towers had spread across its northern countryside. No doubt these people are doing useful work, some of them. But inadequate attention has been paid to what the taxpayers were getting in return.
Look at Fairfax, Arlington, Loudon, Alexandria and other government-subsidized paradises. Admire their gracious housing developments, Northern Italian eateries, Lexus vendors, Tiffany stores, Cartier representatives and other purveyors of the high life.
Of the 10 richest counties in America, six are in the Washington, D.C., suburbs. In the recent recession, unemployment in Arlington County, where the Pentagon resides, never passed 5 percent. Now, due to the sequester, 90,000 civilian defense workers based in Virginia will experience temporary layoffs, and the state could head into recession.
Republicans insist that they'd rather see this almost $1 trillion in forced social and military spending cuts over 10 years than another penny of tax revenues. That he originally supported sequestration must be a great political inconvenience to Eric Cantor, the Virginia rep now serving as Republican house majority leader.
Politics aside, it appears that the warring parties have blindly stumbled onto a way to reach the goal of cutting deficits by $4 trillion over the decade. We get there by adding the sequester, the $1.5 trillion in spending cuts started in 2011, President Obama's $700 billion tax hike on rich people and the $700 billion to be saved in interest on the debt.
While this is no way to run a railroad, the train may be reaching its destination in a fashion. So, has your correspondent lost her mind and joined the tea party?
The answer is "no." Here's where she differs radically from the Republican right:
This obsession with shrinking government makes no sense. It's pointless to brawl over whether government should be big, small or middling. We should decide what we want government to do — and ensure that government does it in an effective way. And except in economic downturns, we should pay for that government with tax revenues.
It is not true, as many on the right insist, that raising taxes fuels government spending. The opposite is true. When you force folks to pay outright for government, they look at the bill. Borrowing the money makes it seem like a free lunch. That's how the George W. Bush administration got away with cutting taxes, running two unfunded wars and starting a new Medicare drug benefit, not a penny of it paid for.
Here's where your writer agrees with the tea party: Much government spending is wasteful. The way to address that, however, is to go into the budget, identify the unnecessary, and fight the entrenched interests living off it.
We may not always agree on what is unnecessary, but putting a bowl over the head and chopping what's hanging out is an inelegant way to do a haircut. We're stuck with this approach right now, so let's see what happens. Perhaps this lemon of a leadership can produce some lemonade, even if only by accident.
(A member of the Providence Journal editorial board, Froma Harrop writes a nationally syndicated column from that city. She has written for such diverse publications as The New York Times, Harper's Bazaar and Institutional Investor.)

Last Updated on Wednesday, 31 December 1969 07:00

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Bob Meade - A few things to ponder

The Affordable Care Act, aka "ObamaCare", is, essentially, an expansion of Medicare to all citizens. It was thought that by forcing younger people to buy health insurance, that would prop up the financially strapped Medicare. You see, by its own admission, Medicare claims to have $36 trillion in un-funded liabilities. Add to that, ten thousand "baby boomers" are retiring every day and going on the Medicare rolls. Those numbers will continue for the next 19 years. And government appears to have made it easier for those who have exhausted their unemployment benefits, to file for Social Security disability. After 18 months, they too, will qualify for Medicare benefits. If there's $36 trillion in un-funded liabilities now, how much more will it be when the entire citizenry is on it?
If you make something cheaper, or if you make it easier to do, more of it will happen. With that in mind,and considering we already have a physician shortage, and considering many of the seats in our medical schools are occupied by foreign students here on temporary student visas who will return to their home countries after becoming physicians, and acknowledging that many physicians have said they will take early retirement when "ObamaCare" kicks in, how do you think we will accommodate the increasing demands on the medical network? Long waiting lines? Rationing? Services denied to the elderly?
Another issue is that Medicare essentially regulates prices. Doctors and hospitals can set their fees. Today, those fees can be paid by those not on Medicare. However, if the patient is on Medicare, the fee paid to the doctor is set by the government. For example, the physician may charge $105 for an office visit. Medicare may only allow $65 for that visit. Medicare pays 80 percent of the $65 and the patient or his secondary insurance pays the balance. For surgeries, tests, and hospital stays, the reduction in allowable charges is even more pronounced. Prior to the Affordable Care Act, doctors and hospital could recover some of these lowered reimbursements from the amounts paid by non-Medicare patients. As that capability ceases, how does the medical community maintain its financial health? Does the entire medical system become part of the government? Just think, the government, which has Medicare with $36 Trillion in un-funded liabilities, running the entire system and expanding that number to infinity. Perhaps we should get China's permission first.
When Social Security was introduced back in the mid 1930's, there were sixteen people paying into the system for every one collecting a benefit. Today, there are less than three people contributing for every one receiving. Also, back at its inception, life expectancy was 57 years and eligibility for benefits was 65 years of age. As you can see, it looked like a good deal for the government . . . making benefits available eight years after people were expected to have died. Well, things have changed. Today life expectancy is 76 years for men and for women it is 81, but the full retirement age for Social Security has only increased by one year, to age 66.
In 1964 President Johnson needed monies to fund his "Great Society" programs. Until then, Social Security funds were kept separate from general funds. For the first time Social Security contributions were borrowed and mixed with general funds. Government securities in the amount of the borrowed Social Security monies were put into the proverbial lock box. Those transactions didn't impact Social Security until the annual payout of benefits exceeded the annual receipt of funds. That has happened and will only get to be more of an issue as those baby boomers continue to retire at the rate of 10,000 per day for the next 19 years. In order to redeem those government securities, the government must sell new securities to get the funds necessary to redeem them. While the transaction doesn't increase the debt or deficit, it may increase the interest paid and it will certainly transfer the burden of paying off the newly purchased securities to a future generation.
In 2010, the net present value of Social Security's un-funded liabilities was estimated at $15 trillion. Added to the Medicare un-funded liabilities of $36 trillion, we have a staggering total of $51 trillion dollars being dumped on future generations . . . our children and grandchildren and their children. While there is no easy fix for Medicare and Social Security, each must be addressed soberly and changes made. The addition of the Affordable Care Act into the mix may be the proverbial straw on the camel's back.
These are but two of our spending issues. Don't you think it's time they get addressed honestly?
(Bob Meade is a Laconia resident.)

Last Updated on Wednesday, 31 December 1969 07:00

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Roy Sanborn - Good buys

There were 54 sales in January in the Lakes Region communities covered by this real estate market report. The average sales price was $189,399 and the median price came in at $169,430. I thought that was pretty dismal until I looked at last January's sales numbers and realized we only had 48 sales then. Even though last January's average sales price was higher at $295,068 and the median price was $184,500, right now I'll take the higher activity level as we need to keep the inventory levels down.
There appeared to be some pretty good buys last month. I'm not talking about the after Christmas sales at the mall, but good buys on all kinds of Lakes Region real estate. For example, there is a property at 536 Endicott Street in Laconia which is across from the Funspot parking lot that was owned by Freddie Mac. It sold for a mere $38,500, which was just 25 percent of its assessed value of $152,100! I can't say much about the house as I haven't seen it and there really isn't much info in the MLS, but what the heck, it is a four bedroom, two bath cape built in 1958 on a .98 acre commercially zoned lot with public sewer. Seems like this was a great buy regardless of the condition of the home?
A property in HUD's vast stable of foreclosed properties sold at 19 Westview Drive in Laconia for $99,500, or just 50 percent of its assessed value of $199,500. This is a 1965 vintage, three bedroom, two bath ranch, with 1,640-square-feet of living space, and a two car garage that sits on a .53 acre lot with views of Lake Winnisquam. Water views at $99,500? As with most bank owned or HUD owned properties there wasn't a lot of effort given by the listing agent to describe or to give any info on this property. He was pretty adept, however, at letting you know that the property is being sold "in as-is condition," that the "property is sold AS IS AS SEEN," and "neither the owner or the agent makes warranties or representations." Despite having to deal with the Sergeant Shultz mentality of "I Know Nothiiinngg," this was probably a pretty good deal with some good upside potential for the buyer.
Also in Laconia, over at 139 Eastman Shore Road North, someone got a great deal on a nice 1,978-square-foot, three bedroom, one-and-three-quarter-bath ranch. This home was built in 2003 and was in "turn-key" condition. This home was light and bright and features an open floor plan, a kitchen with a pantry and office area, a living room with a soap stone gas stove, a finished walk out lower level, a four season room finished in pine, bedrooms with cathedral ceilings, a farmers porch, and a two car garage. This home sits on a 2-acre lot with beach rights to Winnisquam. Unlike the previous two homes, this home was owner occupied, so the buyer got the all the property disclosures to help him get comfortable with his purchase. And based on the fact that the new owner bought the property for just $176,000 or 75 percent of its assessed value of $236,100 and $43,000 less than the original asking price, I bet he is pretty comfortable!
If you like older homes with charm and character you would have liked the property at 528 Cherry Valley Road in Gilford. Built in 1928, this 3,642-square-foot, four bedroom, three and a half bath cape has large bright rooms, cathedral ceilings, exposed beams, two fireplaces, hardwood and tile floors, a first floor master suite, a walkout finished lower level with game room, large deck, a detached two car garage, and great views of Winnipesaukee. The house sits on a well landscaped 2.29-acre lot near the Gunstock Recreation Area. This home was originally listed back in 2008 at $489,000, but this go around it came on the market at $274,000 and sold for $274,000 which is 78 percent of the assessed value of $350,170. What a difference a few years and a few hundred thousand dollars makes...
Last week I wrote about the "unexpected" low number of sales on Winnipesaukee in January. That was just one sale, by the way. Well, I got an "unexpected" e-mail from an agent that read the column and she was sure that the waterfront listing she sold at 301 Trask Side Road in Alton was the one I would have described. Unfortunately, that property was not included in my report because she omitted a key piece of data when she entered it in the MLS. In the MLS you indicate the type of water access that a property has from a drop down menu with choices such as "owned," "shared," or "ROW." This field was overlooked and left blank on this listing so it was not picked up in the search. So anyway, "unexpectedly," this listing doubled the number of sales on Winnipesaukee in January to two! This home is a 1965 vintage, 3,164-square-foot, six bedroom, three bath contemporary ranch with two completely separate living areas and kitchens. The house features an open floor plan, two stone fireplaces, lots of natural wood work including wood ceilings, and more importantly lots of glass to bring in the big lake sunset views. This home sits on a .6 acre lot with 144-feet of level frontage with two docks and a lake side deck. The sale also included a 6 acre lot across the street.
So, I do feel a little better that we had two sales instead of one, but not really, really great as we need more. But, I also heard from the buyer of that property about how happy he was to be on Winnipesaukee. As a matter of fact, he said, "We feel Great! As it is a terrific house in a fantastic location. I refer to it as box seats on the forty yard line of the big lake!" And I think he got a good deal to boot. This property was listed at $879,000 with a tax assessment of $845,900 and was purchased for $785,000. A good deal and a very, very happy buyer! Now that's what I call great!
Please feel free to visit www.lakesregionhome.com to learn more about the Lakes Region real estate market and comment on this article and others. Data was compiled as of 2/19/13 using the Northern New England Real Estate MLS System. Roy Sanborn is a REALTOR® at Roche Realty Group and can be reached at 603-677-8420

Last Updated on Friday, 01 March 2013 22:55

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Michelle Malkin - The court jesters of sequester

Traffic alert: There's a massive clown car pileup in the Beltway. And with the White House court jesters of sequester behind the wheel, no one is safe. Fiscal sanity, of course, is the ultimate victim.
President Obama has been warning America that if Congress allows mandatory spending "cuts" of a piddly-widdly 2 percent to go into effect this week, the sky will fall. The manufactured crisis of "sequestration" was Obama's idea in the first place. But that hasn't stopped the Chicken Little in Chief from surrounding himself with every last teacher, senior citizen and emergency responder who will be catastrophically victimized by hardhearted Republicans. Curses on those meanie Republicans! How dare they acquiesce to the very plan for "cuts" — or rather, negligible reductions in the explosive rate of federal spending growth — that Obama himself hatched?
How low will the kick-the-can Democrats go? Among the ridiculous claims the administration is making: The National Drug Intelligence Center will lose $2 million from its $20 million budget. That scary factoid appears in an ominous Office of Management and Budget report purporting to calculate the Sequester Disaster. So lock the doors and hide the children, right?
Wrong. As Reason magazine's Mike Riggs points out, the NDIC shut down in June 2012, and some of its responsibilities were absorbed by the Drug Enforcement Administration.
Ready for more reckless, feckless farce? Department of Homeland Security Secretary Janet Napolitano played Henny Penny during a panicked speech at the Brookings Institution Tuesday. She warned that her agency's "core critical mission areas" would be undermined by the sequester. To cynically underscore the point, "waves" of illegal aliens were released this week from at least three detention centers in Texas, Florida and Louisiana, according to the Fort Worth Star Telegram. U.S. Immigration and Customs Enforcement confirmed the release of some illegal immigrants Monday night, but would not say how many or from which detention centers.
The real punch line, as I've reported relentlessly, is that the catch and release of criminal illegal aliens has been bipartisan standard operating procedure for decades. The persistent deportation and removal abyss allows hundreds of thousands of illegal aliens — many of them known repeat criminal offenders — to pass through the immigration court system and then disappear into the ether because we have no determined will to track them down and kick them all out of the country.
While Napolitano shrieks about decimation of the DHS workforce, DHS workers tell me that the double-dipping of retired ICE brass — who get back on the payroll as "rehired annuitants" — is rampant.
While this open-borders White House phonily gnashes its teeth over the sequester's effect on national security, its top officials are lobbying for a massive nationwide amnesty that would foster a tsunami of increased illegal immigration for generations to come. The shamnesty beneficiaries will be welcomed with open arms, discounted college tuition, home loans and ObamaCare. And as every outraged rank-and-file border agent will tell you, DHS top officials have instituted systemic non-enforcement and sabotage of detention, deportation and removal functions.
In another emetic performance, Obama parachuted into a Virginia naval shipyard this week to decry Pentagon cuts that would gut our military. But I repeat: The reductions in spending are CINO: Cuts In Name Only. If the sequester goes into effect, Pentagon spending will increase by $121 billion between 2014 and 2023. Fiscal watchdog GOP Sen. Tom Coburn adds that $70 billion is spent by the Defense Department on "nondefense" expenditures each year.
Send in the clowns. Wait. Don't bother. They're here.
(Syndicated columnist Michelle Malkin is the daughter of Filipino Immigrants. She was born in Philadelphia, raised in southern New Jersey and now lives with her husband and daughter in Colorado. Her weekly column is carried by more than 100 newspapers.)

Last Updated on Wednesday, 31 December 1969 07:00

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Susan Estrich - Rich & guilty or poor & innocent?

"You've got African Americans; you've got Hispanics; you've got a bag full of money. Does that tell you — a light bulb doesn't go off in your head and say, 'This is a drug deal'?"
Sam Ponder, an assistant U.S. attorney in Texas, said that — and successfully convinced a jury to reject the defense that Bongani Charles Calhoun did not realize the road trip he went on involved buying drugs. The jury convicted. Calhoun was sentenced to 15 years for participating in a drug conspiracy. The appeals court affirmed. The Supreme Court declined to hear the case.
Justice Sonia Sotomayor, joined by Justice Stephen Breyer, wrote separately. The two joined in the court's decision not to hear the case, but wanted to "dispel any doubt" that refusing to hear the appeal would "signal our tolerance of a federal prosecutor's racially charged remark. It should not."
So Calhoun goes to prison for 15 years.
Sometimes I ask my students: Would you rather be rich and guilty or poor and innocent? Most of them pick the former because rich people get much better lawyers, not to mention expert investigators, jury consultants and the rest.
The reason the court did not take the case, according to most observers, is not only because the business of the Supreme Court isn't to correct mistakes made below (unless they raise major legal issues of broader application), but also because Calhoun's lawyers did not object when the prosecutor made the comment, nor did they raise it in his appeal to the United States Court of Appeals. As we lawyers say, the objection was not properly preserved. It had not been addressed by any court below. There was no conflict among the circuit courts that the Supreme Court needed to resolve. "Cert denied."
You've heard it on television a million times. Criminal defendants have a right to a lawyer, and if they can't afford one, a lawyer will be appointed to represent them. They must be told that when they are taken into custody, or their statements cannot be used against them.
Even if they talk to police without a lawyer, appointing one is the first step in the judicial process. Under the constitution, you're entitled not simply to the assistance of a person who passed a bar exam; you are entitled to the effective assistance of counsel. Justice, we say, demands no less.
A few years ago, a defendant convicted in a capital case and sentenced to death appealed to the Supreme Court on the grounds that he had been denied the effective assistance of counsel because his lawyer fell asleep (this was uncontested) during the trial. He lost.
Ask anyone who has practiced law, and they will tell you: Some lawyers are better than others. There are some good lawyers at the very bottom of the legal food chain (where lawyers agree to represent indigent defendants for hourly wages that few lawyers in private practice would accept). But there are, as in most things, more good lawyers at the top than at the bottom. The real question is: How low can you go?
The answer, sadly, is very low.
I wish that at some point in my career I'd been a prosecutor. Prosecutors, many of them just a few years out of law school, decide whether a Calhoun will be charged and for what. Supreme Court justices make law. Prosecutors make life-and-death decisions.
Faith in our system requires that the fight between prosecution and defense not necessarily be equal, which it rarely is (rich defendants can often outlawyer the government, and poor defendants almost never do), but that it at least be fair. In Calhoun's case, it wasn't. Pure and simple.
The prosecutor, as Sotomayor put it, "tapped a deep and sorry vein of racial prejudice that has run through the history of criminal justice in our nation." The defense lawyers were too stupid or distracted or disinterested to object. And even so outspoken a defender of racial equality as Sotomayor couldn't right that wrong. Had she not written separately, we probably never would have heard of the case.
It should make you wonder: How many more cases like that are out there?
Take my word for it. Too many.
(Susan Estrich is a professor of Law and Political Science at the University of Southern California Law Center. A best-selling author, lawyer and politician, as well as a teacher, she first gained national prominence as national campaign manager for Dukakis for President in 1988.)

Last Updated on Wednesday, 31 December 1969 07:00

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