How the US government’s finances work

I have been on a crash course to try and understand the arcane details of what options are available if the current debt ceiling is reached with no action taken to raise it and the balance in the government’s account actually becomes zero. I thought I would share what I have learned so far.

We tend to think of the US government as having a checking account, just like many of us, and of the debt ceiling like a loan given to us by a bank. This is mostly true, except in one significant way that I will get to below. This informative article by John Carney says that the government does have something that looks like a checking account in which all the money it receives continuously (tax receipts, air transport security fees, the postal service, Medicare premiums, etc.) is deposited and from which all its payments (federal employee salaries, income tax refunds, NASA, interest on our debt, unemployment insurance benefits and paying defense contracts) goes out. To get an idea of the scale of transactions in that account, at the beginning of last Friday, the account had $83 billion and during the day it received $7 billion in deposits and paid out $13 billion in withdrawals, leaving it at the end of the day with $77 billion. When the debt ceiling is raised, the balance of money available for use in that account is effectively increased by that amount.
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The pathetic cosmological argument for god

It has become increasingly clear that cosmology has become the last refuge of those religious people eager to find some place where god can still have done something while remaining undetectable. But those arguments are clearly pretty desperate.

Jason Rosenhouse provides an excellent summary of the debate over cosmological arguments and concludes:

If the cosmological argument is the best theology has to offer then we atheists do not need to worry that we have overlooked a good argument for God’s existence.
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As for the cosmological argument itself, I make no apology for being dismissive. Depending on what version you are considering, you can expect to find concepts like causality or probability being used in domains where they do not clearly apply, or dubious arguments for why an actual infinity cannot exist, or highly questionable premises about the beginnings of the universe or about how everything that began to exist must have had a cause, or groundless invocations of the principle of sufficient reason. You inevitably come so perilously close to assuming what you are trying to prove that you may as well just assume God exists and be done with it.

That’s my reaction to proponents of the cosmological arguments as well. They work so hard at finding implausible reasoning to support their pre-ordained conclusion that they might as well just say that believe in god because they want to or need to, even if it is unsupported by evidence.

How yogis ‘levitate’

Hindu mystics have long been claiming that they can, by sheer will and/or the intervention of god, levitate off the ground. Here is one way it is done.

A good rule of thumb is that if something violates the laws of science, it is not a miracle, it is not by ‘harnessing the energy field’ or some such Deepak Chopraesque mumbo-jumbo, and it is not due to a god. It is merely a trick. The only question to be explored is how the trick is carried out.

The logic of science-8: The power of universal claims in science

(For other posts in this series, see here.)

In the previous post in this series, I argued that in the case of an existence claim, the burden of proof is upon the person making the assertion. In the absence of a preponderance of evidence in its favor, the claim can be dismissed. As has often been said, “What can be asserted without proof can be dismissed without proof”. The basis for this stance is the practical one that proving the non-existence of an entity (except in very limited circumstances) is impossible. Hence if we do NOT have a preponderance of evidence in favor of the existence of an entity, we conclude that it is not there.

In the case of a universal claim, however, the situation is reversed and the default position is that the claim is assumed to be true unless evidence is provided that refutes it. So in this case, the burden of proof is on the person disputing the assertion, again for eminently practical reasons.
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Collateral damage caused by government shut down

While many of us wonder what might be the long-term ramifications of a government default and shutdown if the debt ceiling is not raised by August 2, for many people this is not merely an academic exercise but a real and immediate danger.

Recall that about half of American households are ‘economically fragile’ in the sense that in an emergency they could not lay their hands on $2,000 within 30 days. They live from paycheck to paycheck. What will happen to such households if government employees get furloughed and don’t get paid or to similarly situated seniors if the social security checks don’t go out? How will they pay their rent and mortgages?

This should be a sobering reminder that politics is not a game. Ordinary people get hurt.

Religious nuts’ greatest hits

Rachel Maddow has compiled the great thoughts of the religious people invited to Texas governor Rick Perry’s day of prayer on August 6 to which he has invited all his fellow state governors. (Via Pharyngula.)

Visit msnbc.com for breaking news, world news, and news about the economy

There is an outfit called ‘The International House of Prayer’? Who knew? Why isn’t IHOP suing for trademark infringement?

How the oligarchy speaks

Oligarchies are most effective when they work in the background, out of the public eye, getting their way by having political leaders carry out their bidding. The oligarchy usually prefers to use establishment academics and the media and the bond rating agencies to speak on their behalf but they seem to have become worried that those subtle, behind-the-scenes ways seem to have failed when it comes to raising the debt ceiling, forcing them to come out more in the open.

Wall Street has pretty much openly told the Republican party leadership that the kabuki theater had gone on long enough and to raise the debt ceiling. In a highly unusual move, a broad segment of the oligarchy sent an open letter to Obama and every member of Congress (though I suspect that the real targets were the debt-ceiling holdouts) that the ceiling must be raised.
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Palin film continues to bomb

The second weekend of the Sarah Palin fan biopic The Undefeated saw the film being expanded to 14 cities from the original 10 but reporting gross box office receipts of just $24,000, a decline of 63% from the first weekend.

To the calculators! With apologies to Tbogg, who has been mocking chronicling the film’s performance so far (see here and here and here), but the above results mean a weekend average of $1,714 per city or $571 per day or $143 per show (assuming four shows per day) or 18 people per showing (at $8 per ticket).

I think it is safe to say that if you want to see the film, you need not bother about buying tickets in advance, unless they are showing it in people’s living rooms.

This must really hurt, you betcha. After all, the distributors carefully chose cities that are supposed to be friendly to her, such as Grapevine, Texas.

Which raises the question: Where are all the real Merkins who see Palin as the nation’s savior? Surely she has more fans than this? Why aren’t they showing her some love in return for the joy she brings to their lives?

The Internet: Where religions come to die

Even evangelical Christians agree with this assessment that the internet poses a real threat to religion’s survival. Listen to Josh McDowell of Cru, the organization formerly known as Campus Crusade for Christ.

Atheists and skeptics now have equal access to our children as we have, which is why the number of Christian youth who believe in the fundamentals of Christianity is decreasing and sexual immorality is growing, apologist Josh McDowell said.
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“The Internet has given atheists, agnostics, skeptics, the people who like to destroy everything that you and I believe, the almost equal access to your kids as your youth pastor and you have… whether you like it or not,” said McDowell, who is author of two books on Christian apologetics, More than a Carpenter and New Evidence that Demands Verdict.
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“Now here is the problem,” said McDowell, “going all the way back, when Al Gore invented the Internet [he said jokingly], I made the statement off and on for 10-11 years that the abundance of knowledge, the abundance of information, will not lead to certainty; it will lead to pervasive skepticism. And, folks, that’s exactly what has happened. It’s like this. How do you really know, there is so much out there… This abundance [of information] has led to skepticism. And then the Internet has leveled the playing field [giving equal access to skeptics].”

McDowell, who lives in southern California with his wife Dottie and four children, said atheists, agnostics and skeptics didn’t have access to kids earlier. “If they wrote books, not many people read it. If they gave a talk, not many people went. They would normally get to kids maybe in the last couple of years of the university.” But that has changed now.

Jesus and Mo pick up on McDowell’s comments.

J&M-level field.png

Daniel Dennett once said that arguing with religious people is like playing tennis with someone who raises the net when you make your shot and lowers it for theirs. The internet is like a more impartial person who has taken over umpiring duties.

The oligarchy forced into the open

I do not tend to follow micro-politics (who’s up, whose down, what the latest rumor is about this or that, how the polls vary from day to day) carefully because doing so not only consumes all your time but it prevents you from seeing the more important big picture. I prefer to focus on macro-politics, politics on the large scale and longer time frames. However, there are times when macro-political theories impact micro-political events and the debt-ceiling debate is one such case.

I have been writing about how the US is run by an oligarchy that is fronted by the Democratic and Republican parties. The issues that the oligarchy is united on (ones that financially benefit themselves) are agreed upon by the two parties and usually take place so quietly and behind the scenes that we are not even aware of it (much of the legislation passed by Congress and the regulations implementing them by the committees is of this form) or when it cannot be avoided becoming public (as was the case of the massive bailouts of the financial sector in 2008) is done with a grand show of bipartisanship and rushed through as matters of supposedly extreme urgency that gives the rest of us no time to participate in the process at all, let alone mount a protest.

The debt ceiling debate is another case where the oligarchy has been forced to emerge from the shadows and try to more overtly influence events.

So who makes up the oligarchy and how does it make its wishes known? The oligarchy is not a hierarchy or secretive cabal that issues orders. Such a crude system cannot be effective for long. It is a loose alliance of the top people in the business, financial, and media sectors, all of whom all share the same goal of enriching themselves at the expense of the general public. This tends to create a uniformity in general thinking, though it can differ in details. These people tend to move around in the same circles as top government officials so a lot of the oligarchy’s wishes are communicated informally. The rapidly revolving door by which top government and business officials switch roles is another mechanism to ensure uniformity in thinking. The oligarchy’s lobbyists, who pretty much have taken up residence in the halls of government and contribute heavily to congressional and presidential campaigns, also exert constant pressure to ensure that politicians know what they should do.

The major media (which is also owned by the oligarchy) also contributes when it interviews business leaders and selected intellectuals and reports their opinions which can then reach a wider audience. A lot of so-called ‘think tanks’ (The Heritage Foundation, The American Enterprise Institute, etc.) are also created and funded by the oligarchy, along with prominent university academics who are sympathetic to oligarchic interests (see the great documentary Inside Job for examples of the latter). The chair of the Federal Reserve and the Treasury Secretary can always be relied upon to be reliable spokespersons for the oligarchy since they almost always have close ties with them and often emerge from their ranks and go back to them when their terms of office are over.

This is how an informal consensus becomes created about what the ‘best’ course of action (i.e., what benefits the oligarchy) is for any given situation and those who are outside this consensus can then be dismissed as radicals and extremists and ‘shrill‘.

When it comes to the debt ceiling, I wrote the following back in November of last year:

Despite Republican rhetoric about opposing the rising national debt, the oligarchy needs the government spigots to be kept open and so I predict the Republican Party will agree to raise the debt ceiling, all the while hypocritically wailing and gnashing their teeth at what a bad thing it is. It will be interesting to see how well their supporters respond to such a blatant betrayal of what they were promised.

It has indeed been interesting to see how this is being played out in the current debt ceiling debate. I did not pay too much attention to the day-to-day drama of the talks between Obama and the Republicans or worry about the US defaulting on its debt because I felt that the oligarchy was united in wanting the debt ceiling raised and thus it would happen. This is because a default would trigger a lowering of the US’s debt rating which would require it to pay higher interest rates on the money the government borrows which in turn would raise interest rates all round. Since it is a fairly good rule of thumb that interest rates are inversely correlated with stock prices, and the oligarchy is devoted to keeping stock prices high, I felt it was a no brainer that they would push for passage of a debt ceiling increase to prevent a steep stock market decline.

It looks like that is what is mostly happening. The stock market has not panicked yet (in fact, it rose somewhat the last week) and the yield on US Treasury bonds (a key predictor of interest rates) has remained pretty much stable for the month of July.

However, it has also become clear that some vocal elements of the Republican party (such as the Tea Party caucus) are not as yet quite adept at picking up the subtle cues that tell them what they must do and who the real bosses of the country are, and are balking even when those cues are translated for them by their party leaders in more direct terms. They seem to be true believers of the idea that raising the debt ceiling is a horrendous evil and not merely a fairly routine procedure that was made into a marquee issue simply to win votes in the 2010 elections.

Given this high level of obtuseness on the part of the Tea Party, the oligarchy has to be more direct in conveying its message and it is interesting to observe it coming out in the open and start cracking the whip.

Next: How the oligarchy speaks