Reason Morning Links: Tax and Spend Edition

- The Treasury prepares a record-setting debt auction.

- The Senate passes a "cash for clunkers" bill.

- The House ponders new revenue streams. Among the options: a new tax on soft drinks, a higher tax on alcohol, an increase in the income tax, an increase in the payroll tax, and a VAT.

- A jury tells a Minnesota woman to pay record labels $1.92 million for swapping 24 songs online.

- The Pentagon perceives public protests as "low-level terrorism."

- Ayatollah to protesters: Cut it out.

Comments

[John]

Cash for clunkers. War on affordable transportation.

[not the real jb]

So Obama doesn't condemn the speech-inhibiting actions of the mullahs because he doesn't want them to think the US is "meddling."

His administration remains silent.

And the mullahs still claim the US used "interfering rhetoric."

Man, if we're going to be accuse of the crime anyway, maybe he should have spoken out.

[dbcooper]

A jury tells a Minnesota woman to pay record labels $1.92 million for swapping 24 songs online.

I hate to generalise, but you guys really have an interesting damages system ...

[John]

DBCooper,

That case makes me think I am just going to stop buying music. I have plenty of music. At this point I can't see supporting an industry that spends its time bankrupting single mothers.

[domoarrigato]

new revenue streams. is there anything the government doesn't tax yet?

[domoarrigato]

The Treasury prepares a record-setting debt auction.

The government bond market is creaking, and slowly shaking back and forth under the weight of supply. The dealers no longer make any pretense. They butcher the market before the auction, bid low as hell, get cheap bonds, and still get slaughtered when the auction tails. 1 bps used to be a large tail, now it's considered a "fair auction". Look for 6% 10 year notes by the middle of next year. And it's not even going to be because of inflation - there, I said it.

[P Brooks]

"The simple fact is that we need to get Americans into car showrooms, and this is the bill that will do it," Rep. Candice S. Miller (R-Mich.), a co-sponsor of the legislation, said in a statement.

The simple fact, Rep. Miller, is that you are an idiot.

[P Brooks]

After the verdict, Ms. Thomas-Rasset, a natural resources coordinator for the Mille Lacs Band of the Ojibwe, said she was disappointed that she had not been able to convince the jury that she had not posted the songs. "The only thing I can say is good luck trying to get it, because you can't get blood out of a turnip."

Maybe the Presidential Suit will bail her out; the RIAA is too big to fail.

[Bronwyn]

So the higher payroll tax will put my husband out of business and my employer out of business, which I guess would save me from suffering from a higher income tax.

So that's... about 25 jobs lost, plus a foreclosure and an extended family of four adults and two children on the street.

Is it any wonder I'm depressed?

[Mike Laursen]

What if they gave a debt auction and nobody came?

[domoarrigato]

What if they gave a debt auction and nobody came?

Legit question. there is no "reserve" on the yield - they will hit each and every last bid if they have to. Some of them are pretty steep, too, I'm guessing. I remember in 06 when a t-bill auction tailed 200 bps - of course funds was 4% then, I think.

If there are literally not enough bids for the securities then the auction "fails". It happened to the UK recently. It means they dont issue, and have to try again. Note: the inflation linked UK debt was oversubscribed that same day...

In reality, the chances of this happening are slim to none, because Wall Street underwrites every public debt auction. The banking system will buy the debt - at a price. Dealers, of course, will take their pound of flesh in the process.

[P Brooks]

What if they gave a debt auction and nobody came?

As long as there are TARP recipients whom the Treasury Secretary can "urge" to participate, we'll be okay.

[Warren]

The Treasury prepares a record-setting debt auction.

And they're going to do it again. Every other week for months to come.

The debasement of the dollar is inevitable. Hyperinflation is looking more and more probable. Hope you all have a pot of gold, or at least a pot of Yen, to see you through the coming hard times.

[domoarrigato]

As long as there are TARP recipients whom the Treasury Secretary can "urge" to participate, we'll be okay.

Don't kid yourself, government coercion of the banking system to buy debt is as old as the public debt itself. The banking system is actually designed around it. On one hand, the government leans on the dealers to hold their debt, but on the other hand, they let them finance that debt for free by keeping federal funds at 0%. Big Brother giveth and taketh away.

[CoyoteBlue]

So the higher payroll...
....
...about 25 jobs lost, plus a foreclosure and an extended family of four adults and two children on the street.

But you'll get some "free" crappy health insurance, so you've got that going for you.

[P Brooks]

On one hand, the government leans on the dealers to hold their debt, but on the other hand, they let them finance that debt for free by keeping federal funds at 0%.

"We're going to give you some money, so you can loan it to us."

My head hurts.

[Bronwyn]

You're right, CB. I feel better already.

See? It's working!

[Xeones]

See? It's working!

You've just got to hope harder!

[dbcooper]

DBCooper,

That case makes me think I am just going to stop buying music. I have plenty of music. At this point I can't see supporting an industry that spends its time bankrupting single mothers.

Indeed. I have pretty much all the major label back catalogue stuff on CD or a lossless digital format already (FLAC), and almost anything new I like comes out on an indie label or is self released. RIAA stuff like this or trying to spy on my internet connection, or terminate/throttle it for using the bit-torrent protocol hardly engenders sympathy either ...

[Bronwyn]

hope harder

I'll hope so hard I'll sprain something so I can get some more of that hawesome FREE HEALTHCARE.

*RRRrrrrrrrrrrrrgh!*

[Invisible Finger]

Some justice system. A 2 million dollar fine for shoplifing 24 dollars worth of stuff.

As they say, steal 1000 dollars and they'll put you in jail. Steal a trillion dollars and they'll want to do business with you.

[alan]

Note to self: Never commit a crime in Minnesota. You may actually find twelve jackasses on your jury that have walked a very straight and very narrow line in life.

[LoonBoy]

"Note to self: Never commit a crime in Minnesota. You may actually find twelve jackasses on your jury that have walked a very straight and very narrow line in life."

No. Hypocrites all.

[domoarrigato]

P Brooks

"We're going to give you some money, so you can loan it to us."

My head hurts.

the fed "gives" them the money all on their own. but technically, bonds are financed in the repo market, which is essential just a cash lending market using treasuries as collateral.

The disparity between short and long interest rates is essentially a subsidy to leveraged holders of treasury securities. Think of it as the price the treasury is willing to pay people for using their balance sheet. It's right that this is expensive these days. This is a real cost to the taxpayer, but it doesn't expand the monetary supply by itself, (though low rates do that generally) and it doesn't result in monetization of the debt.

[alan]

No. Hypocrites all.

Here in NC, I would assume half the jury, including for murder trials, would be composed of hypocrites*, but those Minnesota Vikings have a reputation of being square.

* when I was a kid, Blanche Taylor Moore was the dirty talking old lady at the local grocery store.

[jtuf]

The National Iranian American Council has regular updates and blogging about the events in Iran.

[jtuf]

not the real jb | June 19, 2009, 9:00am | #

So Obama doesn't condemn the speech-inhibiting actions of the mullahs because he doesn't want them to think the US is "meddling."

His administration remains silent.

And the mullahs still claim the US used "interfering rhetoric."

Man, if we're going to be accuse of the crime anyway, maybe he should have spoken out.

The US should lead by example. Officials in DC should take a neutral stance and insist on nonviolence, because neutral peace keeping is the role of government. We as private citizens are free to give Iranian officials an ear full.

[perilisk]

"A jury tells a Minnesota woman to pay record labels $1.92 million for swapping 24 songs online."

To be fair, the evidence she shared the songs was convincing, and she probably would have gotten more sympathy from the jury had she said "yeah, I did it, but at a dollar a song, assuming quite a few people downloaded them (not proven), we're still talking a loss of a grand for the record labels. The damages they've sought have been ridiculous and unfair, which is why I need you to render a more appropriate verdict".

Her lawyer's tactics seemed to consist of hunting around for gotchas and trying to create doubts that probably wouldn't even convince a criminal jury. The jury was punishing her for appearing to be an ass who wanted to completely avoid responsibility for her actions. It might not be fair, but it's human nature.

[jtuf]

From the linked Times article:

"Street challenge is not acceptable," Ayatollah Khamenei said, according to a rendering by the BBC. "This questions the principles of election and democracy."

What about the people rallying in Florida for a 2000 recount and the liberals who spent 8 years saying Bush stole the election? I'll give the Ayatollah his due and agree that any overturning of the election must be based on evidence of fraud, not rally attendance, however Iranians have every right to hold those rallies and denounce the election results as much as they want.

[jtuf]

The National Iranian American Council reported on House efforts to stand up for the Iranian protestors. I found two relevant bills on Thomas, HRes. 549 and HRes. 560.

[jtuf]

HRes. 560:

Expressing support for all Iranian citizens who embrace the values of freedom, human rights, civil liberties, and rule of law, and for other purposes.

Resolved, That the House of Representatives--

(1) expresses its support for all Iranian citizens who embrace the values of freedom, human rights, civil liberties, and rule of law;

(2) condemns the ongoing violence against demonstrators by the Government of Iran and pro-government militias, as well as the ongoing government suppression of independent electronic communication through interference with the Internet and cellphones; and

(3) affirms the universality of individual rights and the importance of democratic and fair elections.

[jtuf]

HRes. 549:

Expressing support for all Iranian citizens who struggle for freedom, human rights, civil liberties, and the protection of the rule of law.

Whereas the United States supports the right of the citizens of Iran to have free and independent elections for the selection of their political leaders;

Whereas article 21 of the Universal Declaration of Human Rights states that `(1) Everyone has the right to take part in the government of his country, directly or through freely chosen representatives; (2) Everyone has the right of equal access to public service in his country; (3) The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures';

Whereas, according to the State Department's Country Reports on Human Rights Practices for 2008, Iran's `poor human rights record worsened, and it continued to commit numerous serious abuses . . . the government severely limited citizens' right to change their government peacefully through free and fair elections . . . authorities held political prisoners and intensified a crackdown against women's rights reformers, ethnic minority rights activists, student activists, and religious minorities';

Whereas Iran's system of government violates numerous international norms and principles of democratic governance;

Whereas, on June 12, 2009, Iran engaged in the process of selecting that country's new political leader;

Whereas the ensuing announcement by Iranian authorities of Mahmoud Ahmadinejad's `overwhelming victory' has sent Iranians into the streets since June 12, 2009, and has prompted unprecedented criticism of Iran's ruling leaders;

Whereas in the streets of Tehran and other major cities, riot police, members of the Revolutionary Guard Corps, and Basij militias are cracking down on demonstrators who were protesting the results;

Whereas the government has cut Internet connections and cellphone service and jammed foreign satellite TV and radio broadcasts;

Whereas most foreign journalists in Iran to cover the June 12, 2009, selection process were reportedly expelled after the voting ended;

Whereas news websites were reportedly blocked by Iranian authorities and the Iranian Government has reportedly arrested opposition political figures and journalists;

Whereas the Iranian Government outlawed any protest following two days of unrest, with the Interior Ministry warning that `any disrupter of public security would be dealt with according to the law'; and

Whereas the Government of Iran, pro-government militias, and affiliated entities have attacked demonstrators, causing multiple injuries and fatalities: Now, therefore, be it

Resolved, That the House of Representatives--

(1) expresses its support for all Iranian citizens who struggle for freedom, human rights, civil liberties, and the protection of the rule of law;

(2) condemns the ongoing violence against demonstrators by the Government of Iran, pro-government militias, and affiliated entities against the people of Iran, which has escalated since the June 12, 2009, process of selecting Iran's next political leader; and

(3) affirms the universality of individual rights and the importance of democratic and fair elections.

[Adam]

The Pentagon perceives public protests as "low-level terrorism."

Where did I hear something just like..? Oh, right, Khamenei's speech today.

"...By thinking that by turning out onto the streets that you can pressure the officials your demands is wrong. first of all. it will not be acceptable to submit to illegal demands this would be the start of dictatorship [LOLZ!!!! - ed.]. This is a miscalculation. If there are any consequences, they would directly affect the leaders behind the scene the people would know them in due time as well. I call on all these dear friends, brothers and sister to observe the law to follow the legal code. the law welcomes you legal channels are there for you i hope that almighty god will help us all to follow the legal channels. don't allow the enemies to destroy and ruin the celebration of our elections. If there are people who choose other paths, I will come and talk to people even more exclusively."

(please pardon the rough edges of grammar and translation on that)

[Tulpa]

So Obama doesn't condemn the speech-inhibiting actions of the mullahs because he doesn't want them to think the US is "meddling."

His administration remains silent.

What happened to that whole non-intervention thing libertarians used to be all about? Do you think a President Paul would be saying anything other than that it's none of our business at this point?

There's plenty to criticize Obama for, but this ain't part of it.

[Telly]

The reason Obama is remaining silent about the speech-inhibiting actions of the mullahs in Iran is because he "perceives public protests as low-level terrorism."

[TrickyVic]

"""What happened to that whole non-intervention thing libertarians used to be all about? Do you think a President Paul would be saying anything other than that it's none of our business at this point?"""

So true.