Well, you really have to admit the White House staff do know how to use numbers as we have seldom seen such a staff use numbers :)

Prof. DeLong:

I'm afraid you and your traitorous cohorts in the reality-based community simply do not understand the basics. Bush governs by means of confusion: if he can get the American public to be just as confused as he himself is, then he has the upper hand!

http://www.nytimes.com/2005/02/02/business/worldbusiness/02yukos.html

China Helped Oil Company in Russia Buy Yukos Unit
By ERIN E. ARVEDLUND

MOSCOW - China lent Russia $6 billion late last year to enable Rosneft, which is owned by the Russian government, to buy Yukos's biggest oil-producing unit, Kremlin officials said Tuesday.

Through a complex financing chain, Chinese banks lent $6 billion to Russia via Vneshekonombank, a government-owned bank that had already credited Rosneft some of the money to pay for Yuganskneftegas, the Yukos production unit.

Yuganskneftegas, the most important of Yukos's three production divisions, pumps a million barrels of oil a day. It was auctioned by the government in December for $9.35 billion to help defray a $14 billion tax claim against Yukos.

The $6 billion loan was backed by Rosneft's promise of oil deliveries over the next few years to China, underscoring just how willing China is to strike creative deals to meet its energy needs....

http://business.timesonline.co.uk/article/0,,13129-1461961,00.html

American Account: America stymied as governments bid to control oil
Irwin Stelzer

CONCENTRATION on fluctuations in oil prices has detracted attention from the fundamental changes occurring in world oil and gas markets...

We are witnessing nothing less than the geopoliticalisation of the world’s oil and gas industry. Governments rather than traditional commercial enterprises are taking control. And those governments have interests hostile to America’s.

China is forging closer economic and political ties in the Middle East, and not only because it needs more oil. ...China can and, according to reliable sources, does pay not only with cash but with ballistic-missile components and components for nuclear weapons.

...The western hemisphere is also in its sights. Canadian prime minister Paul Martin came away from a visit to Beijing with an agreement to co-operate in a wide variety of energy projects, including plans for a pipeline and ports that would allow oil from Alberta’s tar sands to move to Canada’s west coast for export to China, rather than to America.

In Latin America, China is investing $100 billion in a series of energy deals to extend its influence. Most threatening is a $400m investment in Venezuela’s oil and gas industry, strengthening the hand of president Hugo Chávez...

Meanwhile, Vladimir Putin has been developing what columnist Roger Boyes of The Times calls “a new policy instrument” to reassert Russian power. That instrument is “Russian gas and oil-exporting companies that already all but dominate Europe’s energy supplies . . . Gazprom has woven a web of energy dependencies from Turkey to Turkmenistan, from Berlin to Baku.”

A newspaper may care about getting things right, but a propaganda sheet care only about hewing to the party line. The current party line is that discussion of last year's deficit in regards to deficit cutting be predicated on the phony projection. On the other hand, discussion of last year's deficit in regards to Bush as masterful master of the economy be predicated on how economic growth spurred by his tax cuts allowed the deficit to come in way under what was forecast.

The WaPo has no interest in informing its readers, nor in publishing facts. Doing so in the present environment would cut them off from access to the very people who are misleading them (and us). That, in turn, would mean that reporters would be forced to actually work (rather than playing stenographer), and the editors would not be invited to Rummy's Valentine Bash.

The New York Times article merely shows that China wishes to secure an energy supply as do nations from Germany and France to Brazil to Japan and South Korea. China with its rapid development and size adds significantly to world energy demand.

Irwin Stelzer's article however seems to be alarmist with no reason evident for alarm. Such is the Hudson Institute.

Haha. Live by a crummy press corps, die by a crummy press corps.

You know, people tend to recall the last thing they read. My conscience is flexible enough that I'm content to let that be that the 2004 deficit was over half a trillion dollars. Close enough!

I think the R's are going to find that people have a much more limited patience for getting the Fed in the black than they did before, since Clinton proved not long ago that it was actually possible. And the bigger the numbers are today, the more the pressure to get things turned around.

I'm not sure why democrats are so interested in a pay as you go system. Is there something holy about intergenerational transfer. Why not an investment system---- taxes are collected and invested. Benefits are paid out of the investment account. In 1983 we somewhat went to a system like this but why not go all the way. The investments would be in Trasuries and an index fund. The benefit of shifting to an investment basis is the serious boost to the economy---- currently my payroll taxes go mostly for consumption. In an investment system my taxes are invested in the economy. An investment system does not necessarily require privare accounts. It's simply a better way to run an economy. If dems made this argument I could take them seriously but to defend the current system is asinine and any econ 101 student knows it.

I think the Dems would do good to start pulling out the SS Trust Fund surplus from the consolidated budget projections and call it the "Real Deficit". If Bush can call transition costs "prefunding", it's about time some light is shined on the real problem (structural operating deficit).

Let him cut 50% of that.

What is "holy" about Social Security and Medicare is returning the support for our parents that they extended to us.

Who needs a full -blown PR effort when you have "reporters" hurling softball questions to defend your position(as reported in the Boston Globe today):

"White House-friendly reporter under scrutiny"
(http://www.boston.com/ae/media/articles/2005/02/02/white_house_friendly_reporter_under_scrutiny/)

Les Spero says "Is there something holy about intergenerational transfer. Why not an investment system---- taxes are collected and invested. Benefits are paid out of the investment account."

That is an intergenerational transfer too. Retirees sell their ownership in the private sector to workers.

Then Les says "In an investment system my taxes are invested in the economy. An investment system does not necessarily require privare accounts. It's simply a better way to run an economy."

That is fine, but to get to that, you will have to sell lots of government bonds so that your taxes to pay to additional interest costs will replace the contribuitions you are making now to pay current benefits.

Econ 101 students should know that there is no change in national saving funding PRA with debt.

pbird says "I think the Dems would do good to start pulling out the SS Trust Fund surplus from the consolidated budget projections." Alas it was Lyndon Johnson who put it in there in the1960s to try to fog the cost of his war.

It is interesting that the administration is fond of say that the late Senator Moynihan was for PRAs. What they do not say is that in the mid 1990s he was all for cutting Social Security contributions because there was a surplus in the fund and it is a regressive tax.

I think the other fudge is characterizing homeland security as being exempt from a freeze. Per CNN last week, Ted Stevens was warning Homeland Security to not exepect an increase in their budget. So they cover up stinting on homeland security by linking it to defense - sort of the inverse of making social security look bad by linking it to medicare.

>Is there something holy about intergenerational transfer.

Why are you asking us? We didn't invent the term "death tax".

When I used to deliver the New York Post in the Bronx in the fifties it was considered the "communist line" newspaper by my conservative Irish family -- but: business is business.

Derelict wrote, "The WaPo has no interest in informing its readers, nor in publishing facts."

Well...

In terms of coverage leading up to the invasion of Iraq, the Post was definitely better than the NYT. At the same time, the NYT editorial page was somewhat against war (at least as far as opposing the actual invasion when it happened), whereas the Post ed section went the other way.

A newspaper cares about getting things right less than it cares about staying in the good graces of the Bush administration because the Bush administration looks to punish those who don't play ball. So who is more despicable in this transaction?

Les, an investment based system would require additional investment, rather than diverting revenues from the current system.

Having the treasury borrow a bunch of money and loan it to current workers as a margin loan wouldn't increase net investment.

It would really just be a gamble that for the next 20 to 50 years, stocks will consistently yield more than bonds. But given that we face a significant demographic challenge in the next 20 to 50 years, there is a very real chance the gamble would fail.

It would only really have to fail once, for just a few years, over the next 50 years, to cause a panic that could bankrupt the US government and cause all that equity in private accounts to evaporate.

If you want to honestly increase investment, the way to do it is to either raise new money NOW, or generate new revenue NOW. Otherwise, you're just gambling.

Additionally, the other "holy" thing about an insurance system, as opposed to an investment system, is that in an investment system, there will necessarily be some losers. If you use insurance to spread the risk around, you eliminate the possibility of being a big winner who makes bonanza returns, but you also eliminate the possibility of being a big loser who gets to eat cat food every night.

Also, even if you have your bonanza returns, if you live longer than you expect and spend too much early -- or if the market takes a dive six months after you retire and doesn't recover for your first five to ten years of retirement -- you can still end up screwed.