'Did [your supervisor] give you any indication of the need for the search [for tea party groups], any more context?' one IRS witness was asked in a closed-door interview.
'He told me that Washington, D.C., wanted some cases,' came the reply.
The employee, who said he or she was evaluating 40 such applications for tax-exempt status from conservative organizations at the time, said 'some went to Washington. D.C. ... I sent seven.'
They'll find the evidence of this; emails, phone records, whatever. It exists and it will be unearthed.
If the people in DC try to hide it, that's the exact sequence of events that brought down Nixon.
It's time not only to flush the toilet in the Executive Branch of Washington DC but at the same time to flush the capacity to do this to people in the future. Our government has a long history of this sort of abuse and The Fair Tax would put a permanent and immediate stop to it. While I support it for other reasons, primarily that of the principle that taxation should be easily understood and applied against all without fear or favor (or loophole) this scandal is rapidly becoming the reason to scuttle this agency and chain its doors closed -- permanently.
Mr. Obama, with all due respect (that's none, by the way) -- you're in the wheelhouse and the deck is awash.
Keep your nose in the air with that haughty view from the bridge. The higher you climb the further down you fall and the sea floor is a hell of a long way down from where you are now.
If you think a bunch of low-level employees in Cincinnati are going to take the hit for you on this deal then you're dumber than I thought.
Impeachment -- it's what's for breakfast, lunch and dinner.
There were plenty of zingers and more than a few stupidity exhibitions from Democrats, but one bit of questioning stands tall.
Here's the real question -- for exactly how long will the American people put up with this crap?
This is completely out of hand. The media continues to cite the so-called "expectation" that Treasury will run "only" a $600-odd billion deficit this year, and they cite this as source:
This shows ~$488 billion in operational deficits from October 1st to April 30th.
There's a problem with this number however -- it does not reflect reality.
In other words it is a bald and intentional lie.
This reflects the truth:
What is that? It's simply a reproduction of the Debt To The Penny series. The first column is the public debt, the next is Social Security and Medicare (mostly), the third is the total and the last is the month-to-month change (which is, of course, simple arithmetic.)
What we see is that since September 28th 2012 (the last business day for which this was reported) there has been a net $762.6 billion of new debt added to the Federal balance sheet, not $488 billion.
Oh, and for those who are keeping track Social Security and Medicare are almost $90 billion in the hole this fiscal year thus far.
In addition, April was not a net surplus month. January was close, and that's frequently the case because January is corporate tax payment month.
Remember that this fiscal year included debt ceiling games; it is thus grossly distorted unless you look at the cash statement.
At the current run rate over the four calendar months we have in the bag thus far the run rate for deficits on a cash basis this year is $1.188 trillion. For comparision last year was $1.210 trillion, which is indistinguishable.
From 9/28/2012 to the end of April on a fiscal year basis the run rate is $1.307 trillion.
This data is trivially able to be reproduced by anyone who cares, which leads me to conclude that the press is on its knees collectively and individually blowing Obama even as his DOJ is monitoring their emails and otherwise screwing them.
Incidentally, if you're curious, in calendar 2011 the cash-basis deficit was $1.198 trillion.
In other words this will be the third year running, at present rates, with nearly-identical cash-basis fiscal deficits of about $1.2 trillion ($1,200 billion) dollars.
Don't ever kid yourselves folks on borrowing folks -- nobody borrows money they don't intend to spend in the immediate future, and all the accounting games and tricks (such as temporarily robbing various funds in the Treasury that are supposed to be, for example, TSP accounts in government bonds) are eliminated when you look at the cash statement.
TOPEKA, Kan. – U.S. Attorney General Eric Holder has told Kansas Gov. Sam Brownback that a new state law attempting to block federal regulation of some guns is unconstitutional and that the federal government is willing to go to court over the issue.
But Brownback replied in a letter Thursday that Kansans hold dear their right to bear arms and are protecting the state's sovereignty. Secretary of State Kris Kobach, a former law professor who helped draft the law, accused the nation's top law enforcement official of "blustering" over the issue.
"The people of Kansas have clearly expressed their sovereign will," Brownback said at the conclusion of his letter. "It is my hope that upon further review, you will see their right to do so."
Wow, Holder will sue.
Go ahead Eric, sue.
Holder seems to forget that this nation is a Federal Constitutional Republic. It operates under a Constitution where the 10th Amendment specifically provides (not that it needed to) that all matters not delegated to the Federal Government are reserved to The States or the People, respectively.
Holder also seems to forget that there is exactly one way to lawfully change that -- amend The Constitution. No, a bunch of guys in black robes cannot write their own version of such an Amendment, despite their century+ long record in doing so. That we, the people, along with the States have allowed that simply speaks to this sentence:
Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.
Mr. Holder ought to know that document well, as understanding and agreeing with it should be a qualification for any elected office, whether it be in a local, state or federal capacity.
One would certainly hope so, because if not, and if he "sues" and Kansas simply replies with a middle finger should Holder win, the potential exists for the next sentence in that very same document to become operative once again after a more than 200 year slumber.
Now the question is whether Congress can find its balls with both hands, threats to do so notwithstanding.
In a letter viewed by the Wall Street Journal, House Oversight Chairman Darrell Issa(R., Calif.) and Rep. Jim Jordan (R., Ohio) told Fed Chairman Ben Bernanke that they were frustrated at the lack of response to a February request demanding more details on the central bank’s strategy to unwind assets purchased during years of its easy-money stimulus programs. The lawmakers say Mr. Bernanke continues to “willfully withhold” sensitive documents the committee has requested.
“The American people have a right to know the true risks associated with the expansion of the Federal Reserve’s balance sheet,” the lawmakers wrote in a letter dated April 22. “The Fed’s obstruction and lack of transparency must stop.”
Of course he is willfully withholding them.
The reason is simple -- there is no way to do what Bernanke has claimed.
If The Fed stops QE rates will go up, all things being equal. This will make home prices go down. Assuming that you have a $200,000 house today with a 4% 30 year mortgage rate if rates go back to the bottom of the historical 30 year rate, about 6%, your $951.66 payment buys not a $200,000 house but a $159,522 one.
There's no way around this folks.
More to the point right now the Fed's rate manipulations make the effective interest rate on the nation's debt extremely low. What happens to the federal budget when the blended interest on $16 trillion rises just a little -- say, to about 4%?
That leads to a $640 billion annual interest expense as opposed to ~$127 billion last fiscal year, or about $500 billion a year in additional deficits.
(For the math challenged, this is NET OF OFFSETS. Gross interest was ~$359 billion including $243 billion of publicly marketable bond interest and another $116 billion on "special issues" [Social Security and Medicare, mostly]. The offsets include the roughly $90 billion that The Fed "rebated" back to the Treasury, all of which will instantly disappear in a rising rate environment as they will take unrealized capital losses.) If you use only the gross on publicly-marketable debt the effective interest rate is ~2.16%; ~2.23% including the "specials." If you look at a "more normal" rate environment, say, FY2006, you will find that the Treasury spent ~$407 billion on the marketable debt interest in that year, or an effective rate of 8.4%. If you think 4% is being "pessimistic" or otherwise unreasonable or are a Congresscritter calling BS on these numbers you're not wrong, you're lying; it is in fact outrageously optimistic given the historical facts. To argue with these facts you must call Treasury a liar and "wrong", not me.)
That's why Issa hasn't received his documents -- this is matter of arithmetic, not opinion, and Bernanke knows it.
My money is on neither Issa or Boehner having the balls to press the issue -- after all, the arithmetic hasn't change on this in the last five years since the 2008 crash, and yet neither of them has taken this issue on head-first at any point since.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.
NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.
The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
Looking for "The Best of Market Ticker"? Check out Ticker Classics.
Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.
The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.
Submissions may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.
Leads on stories of current economic and political interest are always welcome. Our fax tip line is 850-897-9364; please include contact information with your transmission.