In this post.

It looks like the country of Greece is going bankrupt, possibly setting off the next leg of the ongoing debt crisis. They are somehow beating New York, New Jersey and even California to it. I wonder if borrowing for the infrastructure and facilities associated with the 2004 Olympics has anything to do with it? Given that New York is already one of the most indebted states and cities, relative to our residents' (falling) income, and are virtually broke as it is, I certainly am glad we aren't building similar facilities for 2012 right now. Even Vancouver, with the Winter Olympics a week or so away, is having regrets. The expectations and demands of the IOC, it seems, have been in a bubble as well.

With an assist from the staff of the Medicaid Statistical Information System (MSIS), I’ve crunched down Medicaid beneficiary and spending data for FY 2007. The assist was required because the Datamart program only works with Internet Explorer, and my teenagers convinced me to shift over to Apple when my old computer wore out. Previously, I had found that the Regional Economic Information System disks from the Bureau of Economic Analysis could only be used on Windows machines, not I-Macs. I guess the federal government doesn’t do Apple, although I haven’t had a problem with the Census Bureau yet. Those who have read my past posts on this subject might as well just download the attached spreadsheets for the latest year, because not much changes. But for those who are interested in my analysis, details on beneficiaries, spending, spending per beneficiary and related information follows.

It appears that Generation Greed is responding to the upcoming elections the way it always does -- by selling out the future of the country and younger generations. The Obama Administration came in promising investment in America's future, funded by borrowing, through the Build America Bond Act. But older generations don't want to build America, they want to securitize it as a way of getting more for less right now. And they are becoming more and more desperate as the diminished future ensured by 30 years of their past decisions continues to arrive.

So now, according to the Wall Street Journal, the Obama Administration proposes that the Build America Bond act be made permanent, with an ongoing federal subsidy (funded by the federal debt) for state and local bonds (more debt) issued not just for capital improvements (which might provide some benefit in the future when younger generations are forced to pay back the debt) but also to pay for more services and lower taxes right now. This might be the one Obama proposal that doesn’t get filibustered, as it is one that consistent with Republican principles. Not theoretical principles from the far off Republican past, actual ones from the past 30 years.

In his State of the Union address, President Obama asked if anyone had a better idea to hold down the cost of health care, cover the uninsured, and reduce the deficit. I laid out the problems, proposals, problems with the proposals, my solution, and how to pay for it back when in the attached document, and my views haven't changed. Just my optimism.

The travails of the news media, with declining paid subscriptions and advertising revenues, are well known to all. I wrote a prior post with my suggestion as to how to fund local news coverage. Now, however, the U.S. Supreme Court has given me a new idea. A new type of newspaper could be created that would consist entirely of "news" that people had paid to put in it.

No longer would corporations and unions have to fund "think tanks" to issue "reports" that PR flacks then pushed reporters to write articles on as "news." The reporters would be eliminated, cutting costs. No longer would publishers have to agonize over whether to, for example, publish articles pointing out that there is a housing bubble or private motor vehicles kill a lot of people and are bad for he environment -- risking their real estate and auto ads. No longer would the free flow of information be impaired, and the Bill of Rights confounded, by artificial restrictions. The "news" presented would be put up to the highest bidder.

The MTA document on service reductions includes the ridership and average cost per ride for every NYC bus route. Even when I was inside NYC Transit, I never saw a tabulation of costs, although ridership was tabulated.

Cost data is provided for LI Bus and MTA Bus Company lines as well, in other reports. And as for rail, it isn't provided but could be if the MTA would use Metrocard data how much times trains spend on each part of the line to do an estimate as well. Perhaps the cost of maintaining the express tracks could be assigned to outer lines. And for real sophistication, distinguish marginal from average costs, with the marginal cost of additional rush hour riders on the Lexington Avenue line equal to -- the cost of the Second Avenue Subway. Finally, look at the dedicated MTA taxes paid by those in different areas, relative to the level of subsidy, not including the portion that is sucked away by the past (debts, unfunded past pensions, etc). The more the better.

And as one who cares about Jack’s future, I’m sick of it.

Like Albany, our health care financing system is not “dysfunctional,” but rather functions very well for those with power and privilege.

Today’s senior citizens get government-funded health care without limit, funded in part by a tax that workers pay and the retired do not, and in part by borrowing on such a scale that there is no chance that (absent some restraint) Medicare will be there for younger generations when they need it.

Public employees also get the same deal – virtually unlimited health care paid for by less well off taxpayers who increasingly do not have health insurance themselves, particularly if they are in younger generations.

According to Crain's Chicago Business, the State of Illinois is heading for a de facto bankruptcy. "While Illinois doesn't have the option of shutting its doors or shedding debts in a bankruptcy reorganization, it seems powerless to avert the practical equivalent. Despite a budget shortfall estimated to be as high as $5.7 billion, state officials haven't shown the political will to either raise taxes or cut spending sufficiently to close the gap." That is, they don't want to tell the voters that as a result of their past decisions Illinois residents face a future of high taxes and degraded services, to pay for unfunded pension obligations and debts run up by past residents and older generations. Of course, the overall tax burden in Illinois is much lower than in New York.

On the private sector side, one of the dwindling number of honest men in business asserts in the Wall Street Journal that corporate executives are collectively fleecing investors and wrecking the economy and institutional investors, part of the same class of people, are thus unwilling to meet their fiduciary obligations by stopping them. "The faith of investors has been betrayed" according to John C. Bogle, founder of Vanguard.

Then use John Bogle's rate of return, as shown in this Wall Street Journal article, as an assumption for the pension funds, and start paying up now rather than put it off with interest.

Of course, robbing future generations and destroying the future is exactly what those who control our institutions have been doing for nearly 30 years, and there is no evidence they want to stop. I only hope that in the end, when the consequences are inescapable, people will not be fooled by some demagouge into blaming some powerless group.

So Governor Paterson has announced that local governments in the portion of the state outside New York City will be able to put off paying into the state pension funds the amount required to keep them solvent. They will not have to pay more 9.5% for most workers and 17.5% for police and fire workers -- a small fraction of what New York City is paying right now! The money would be borrowed from the pension funds themselves. And what would happen if future residents of those localities are unwilling or unable to pay the money back, a near certainty? I suppose the state -- including residents of New York City -- would have to do so instead. With the state once again offering nothing to New York City.

Another generational theft by a member of Generation Greed, sure to be approved by all the other members of Generation Greed in the legislature. They just keep running up those guaranteed, "contractual" benefits for themselves, and deferring the costs, with no limit. As I said in my previous post, evolutionary change won't do. Only bankruptcy -- or a reduction in the value of past debts and pensions via massive inflation -- can help this state now.

I read in the NY Observer that Governor Paterson slammed “good government” groups for being “drunk with power.” “Here are good government groups who are always talking about what government is doing, and no one knows who their donors are…It's about time they realize they have been drunk with power, just like the legislators,” he said. Well, I donate to one of them, because I see coverage of state and local government issues ebbing away in the for-profit media, and that group has a website that produces original new content on state and local government issues as well as links to that for-profit media. Even if I often disagree, it’s much better than nothing, and I’m free to comment there. So do I see the Governor’s remarks as those of a desperate man lashing out, well, blindly? Not necessarily.

My bad, he's a Dem. I ought to stick to what I know. I do think it's telling, however, that all these pols keep showing up from out of state. I think they sense the shortage.

that the deadline to make certain changes to New York State educational policies (such as liberalizing restrictions on Charter Schools) in order to qualify for federal funds is a phony deadline. Just like the deadline to enact congestion pricing. And for some in the media to repeat that assertion with a straight face.

If you want to know the reason why the New York State legislature, controlled by the public services producer interests and hostile to the needs of public services consumers, will not make the changes being demanded by the Obama Administration, re-read this post. And remember, it was written before the take home pay of future teachers in NYC schools was cut by 5 percent (for starters). No one could have seen that one coming, right?

In a piece in the New York Times Magazine, Roger Lowenstein, author of several books on financial issues, argues underwater homeowners should walk away from their mortgages, and not feel guilty about it. After all the wealthy and their financial institutions make similar strategic, self-interested decisions all the time. "Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with." In some cases homeowners are trapped because they also purchased at inflated prices at the height of the boom. In other cases they had previously purchased at fair prices, but borrowed against their home equity to live large, spending the proceeds of loans they now can't pay back.

Lowenstein is also the author of While America Aged, about the coming public employee pension disaster, a good read. The question I have for him is this. Why should younger generations sacrifice (higher taxes, diminished public services, lower pay and benefits as future public employees) to pay the unfunded portions of those pensions, and other public debts, to ensure older generations get benefits they promised themselves but didn't pay for, and that younger generations will never see, based on decisions younger generations never made?