The Biggest Cliff of All
by Daniel Henninger
December 26, 2012
If you're looking for optimism as the world turns toward 2013, stay up late watching paid-for television explaining how to turn wrinkles into miracles. Past that, my own reservoir of uplift is a bit dry this year.
A famous and successful American optimist, Ronald Reagan, put his finger closer to the problem when he suggested there was little limit to what people could accomplish if government would get out of the way. As Barack Obama flies from Hawaii's beaches to Washington's cliff, there may be four or five liberals who've come to agree with the Gipper.
Indeed, a reality has become too obvious for the world's dazed inhabitants not to notice: The greatest threat to the upward arc of human progress is the collapse of public policy making. That is the biggest cliff of all.
Governments are giving government a bad name.
Japan's once-thriving economy has been in the dumpster for years. California, said to be the world's sixth-largest economy, is joining Japan in decline. The euro crisis, now in its third year, is less a crisis than a chronic condition of policy failure across Western Europe. As to America's fiscal cliff, no comment.
Then came the Newtown massacre. A few days after this event, a familiar American policy-making consensus called for federal gun-control laws. More precisely, they want Congress to re-pass the ban on big, dramatic-looking assault-type weapons that existed from 1994 until the law sun-setted in 2004.
Government, for the past 80 years or so, has seen its purpose as mainly to "respond" to society's failures the moment they occur or whenever they are imagined. Adam Lanza killed with guns, so modern policy-making logic posits that government must pass a law. Whether that law will accomplish its goal is . . . irrelevant.
Policy making has become an activity that supports the genetic and financial needs of policy makers and their follower tribes. The community's role, we've lately learned, is to provide revenue. Medicaid, for example, is medical care for the poor. As administered by the policy professionals, it has been allowed to become awful.
The experience with guns is hardly better. In November 2011, the National Institute of Justice convened its Firearms and Violence Research Working Group to examine what the best research reveals about reducing gun-related violence. In 2005 the National Research Council produced a 250-page study of this subject. Both concluded that the quality of data about gun violence and prevention programs is poor, and that it is possible to reach very few policy conclusions about what works or not.
Programs and laws abound already. For years the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives has run the National Tracing Center that operates the firearms eTrace system. Every new U.S. firearm goes into the eTrace system from point of manufacture to first retail sale. But past first sale, tracing guns or bullets has proved impossible.
A real-world look at where killers and other career criminals get guns emerged in October when the New York Police Department put on display 154 guns—most of them bizarre-looking handguns—that it obtained in a high-risk sting operation in Brooklyn. Incidentally, these police antigun efforts are about the only program that research has identified as effective.
Buying or possessing a gun legally in New York City is so difficult that it is a non-subject for most New Yorkers. So where did the NYPD get these guns? A Mr. Kerwin "Trini" Gobin allegedly sold undercover cops 87 of the weapons, including a Sten machine gun able to fire 550 rounds per minute. Machine guns have been illegal since the 1930s. But not in Trini Gobin's world. The illicit firearms market is global. Canada, Australia and New Zealand are all wrestling with how to control black-market gun traffic after recent outbreaks of firearm violence, much of it gang-related.
A consensus has formed around the unacceptability of young people being killed by guns—as bystanders in the inner cities or as mass-murder victims in the suburbs and on campuses. Policy making today ordains that we pass laws no matter how little we know and ignore what we've already learned.
After Newtown happened, mental-health experts pointed out the hardly disputed linkage between violent behavior and some untreated or poorly medicated patients who have a severe mental illness. But legislation to monitor or mandate effective treatment for individuals already identified as dangerous is frequently voted down by various civil libertarians. Public programs that exist are often poorly administered.
Government's problem for a great many people around the world today is that its advocates are enacting policies that do damage or don't work. The public record of national governments—America's and others'—as we approach the new year calls to mind the minimalist optimism of a prescient book title from the 1960s: "Been Down So Long It Looks Like Up to Me."
Read more: http://goo.gl/ejRqA
Geithner: Treasury runs out of cash Monday
by Neil W. McCabe
December 26, 2012
The 75th man to hold the office of Treasury Secretary informed congressional leaders from both parties by a letter dated today that the U. S. Treasury would hit its debt limit Dec. 31.
As of Dec. 24, the national debt stood at $16,337,556,561,533.65.
The current debt ceiling is: $16,394 trillion.
“Under normal circumstances, that amount of headroom would last approximately two months. However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures,” wrote Timothy F. Geithner, who served as the president of the Federal Reserve Bank of New York prior to his current posting.
Geithner said the reason for the short notice and the short leeway is the confusion caused by the failure of President Barack Obama and the Congress to resolve tax and spending issues regarding what has become known as the “fiscal cliff,” the mandatory spending cuts and tax increases written into the Budget Control Act passed in August 2011.
“If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures,” Geithner said.
Speaker John A. Boehner (R.-Ohio) released a joint statement today, before the Geithner debt ceiling letter was released, with the other members of the GOP House leadership team: Rep. Eric I. Cantor (R.-Va), the House Majority Leader, Rep. Kevin O. McCarthy (R.-Calif.), the House Majority Whip and Rep. Catherine McMorris Rogers (R.-Wash.) stating his case for resolving the fiscal cliff.
The House Republicans have already acted to meet the crisis, he said.
“The House has acted on two bills which collectively would avert the entire fiscal cliff if enacted. Those bills await action by the Senate,” he said.
“If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House,” he said.
The House will act, but the Senate, controlled by Democrats, must act first, the Speaker said.
Boehner said he and the House GOP will continue to communicate, but they are convinced the problem that the governement spends too much, not that the people are taxed too little.
Geithner sent his letter to all Capitol Hill leaders, including Boehner, House Minoity Leader Nancy P. Pelosi (D.-Calif.), Senate Minority Leader A. Mitchell McConnell Jr. (R.-Ky.), Rep. Sander M. Levin (D.-Mich.), the ranking member on the House Ways and Means committee; Sen. Max S.Baucus (D.-Mont.), the chairman of the Senate Finance Committee and Sen. Orrin G. Hatch (R.-Utah), the ranking member on the Senate Finance Committee, recieved the same letter as well as individual members of the outgoing 112th Congress. The 112th Congress expires Jan. 3.
The text of the letter sent to Sen. Harry Reid (D.-Nev.), the senate majority leader is below:
December 26, 2012
The Honorable Harry Reid
Majority Leader
United States Senate
Washington, DC 20510
Dear Mr. Leader:
I am writing to inform you that the statutory debt limit will be reached on December 31, 2012, and to notify you that the Treasury Department will shortly begin taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations.
These extraordinary measures, which are explained in detail in an appendix to this letter, can create approximately $200 billion in headroom under the debt limit. Under normal circumstances, that amount of headroom would last approximately two months. However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures. At this time, the extent to which the upcoming tax filing season will be delayed as a result of these unresolved policy questions is also uncertain. If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures. Treasury will provide more guidance regarding the expected duration of these measures when the policy outlook becomes clearer.
Sincerely,
Timothy F. GeithnerRead more: http://goo.gl/Aoz67
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