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Monday, December 31, 2012

Five Sins to Avoid

Obama Grants Pay Increase For Members Of Congress, Federal Workers In Executive Order

When it comes to US austerity, a very sensitive topic as framed best by the "spending cuts" portion in the Fiscal Cliff debate, the ideas range from the surreal to the outright idiotic: as an example in the most recent Obama proposal spending would be "reduced" in the form of $290 billion in interest savings - not an actual spending reduction, but a hope and a prayer that because rates are lower, the government will "save" money with rates continuing to be lower (something which immediately causes a #Ref!explosion for anyone not using government math), $130 billion in savings that would come from once again rejiggering the definition of 'inflation', as well as "savings" from not funding extra defense spending because the US is not engaged in a pro forma war. Like we said: surreal and idiotic, or in other words, no actual real cuts to spending. Yet even as the nation is gripped by the melodrama of fake spending cuts offset by the threat to tax millionaires more (all of whom will merely find more creative and effective ways to hide their wealth and income offshore), spending increases are all too real, such as last night's order by Obama's just issued an executive order to end the pay freeze for federal employees, which is the equivalent of a wage increase. A truly deserved rise in wages for a job well done by the most dysfunctional Congress America has ever seen.

Among the workers to receive a pay increase is Vice President Job Biden. As the Weekly Standard reports, citing disclosure forms, Biden made $225,521 last year and after the pay increase, he'll now make $231,900 per year. More: "Members of Congress, from the House and Senate, also will receive a little bump, as their annual salary will go from $174,000 to 174,900. Leadership in Congress, including the speaker of the House, will likewise get an increase." Somehow we have the feeling that Congress will be quite united behind this "order", just as the Senate was very united yesterday in its decision to continue spying on America's citizens.

From the Weekly Standard:

Here's the list of new wages, as attached to President Obama's executive order:

"A new executive order has been issued providing for a new pay schedule beginning 'on the first day of the first applicable pay period beginning after March 27, 2013,'" reports FedSmith.com. "The pay raise will generally be about 1/2 of 1%."

Jeryl Bier points to an example of the pay increase for average government executives:

"Not much of an increase, but an increase all the same," Bier notes.

And the timing isn't great either: Just as President Obama and Congress try to avert going over the "fiscal cliff," he doles out pay increases to federal workers.

UPDATE: According to a senior Republican congressional aide who has reviewed the executive order and consulted with the Congressional Budget Office, Obama's pay raise will cost $11 billion. "The CBO told us that the President’s pay raise for federal workers will cost $11 billion over ten years," says the aide.

The aide explains, "On the cost-estimate, CBO says the (discretionary) cost of the .5% pay-hike the President is calling for in the Exec Order – relative to a freeze – is about $500m in FY 2013 and $11 billion over the ten years from FY 13 - FY 22. The reason why the FY ’13 savings is only $500 million is because the pay hike as proposed by the President’s Exec Order would not go into effect until April 1st, 2013 - when the current CR expires. So it only covers half the fiscal year. The annualized cost of the pay hike is about $1 billion/year."

Obama Executive Order

Zero Hedge

Ron Paul On The Fiscal Cliff: "We Have Passed The Point Of No Return"

In a little under three minutes, Ron Paul explains to a somewhat nonplussed CNBC anchor just how ridiculous the charade that is occurring in D.C. actually is. 

This succinct spin-free clip should be required viewing for each and every asset-manager, talking-head, propagandist, and mom-and-pop who are viewing the last-minute idiocy of the 'fiscal cliff' debacle with some hope that things will be different this time. "We have passed the point of no return where we can actually get our house back in order," Paul begins, adding that "they pretend they are fighting up there, but they really aren't. 

They are arguing over power, spin, who looks good, who looks bad; all trying to preserve the system where they can spend what they want, take care of their friends and print money when they need it." With social safety nets available to rich and poor, there is no impetus for change and "the country loses," but Paul concludes, the markets are starting to say "there is a limit to this."

Zero Hedge

India Receives Second Russia-Built Stealth Missile Frigate

India Receives Second Russia-Built Stealth Missile Frigate
NEW DELHI, December 30 (RIA Novosti) - The second of three stealth frigates that Russia builds for India at the Yantar Shipyard in Russia’s Baltic exclave of Kaliningrad arrived at the port of Mumbai, an Indian Defense Ministry source said on Sunday.

The source did not specify whether an official ceremony of the frigate’s reception would be held.

Russia and India signed a $1.6 billion contract on construction of three modified Krivak III class (also known as Talwar class) guided missile frigates for India in 2006. The first frigate, INS Teg, joined the Indian Navy on April 27.

The second frigate, The Tarkash, was commissioned on November 9 and sailed from Baltiysk to India on November 17.

The last in the series of three frigates, The Trikand, currently undergoes dock trials and after it completes sea trials in the Baltic Sea will join the Indian Navy in the summer of 2013.

The new frigates are each armed with eight BrahMos supersonic cruise missiles.

They are also equipped with a 100-mm gun, a Shtil surface-to-air missile system, two Kashtan air-defense gun/missile systems, two twin 533-mm torpedo launchers, and an antisubmarine warfare (ASW) helicopter.

Russia previously built three Talwar class frigates for India - INS Talwar (Sword), INS Trishul (Trident), and INS Tabar (Axe).

RIA Novosti

The year 2012 ended with the announcement of the arrival of a new period of confrontation between Washington and Moscow

Political strategies and show biz have become so intertwined nowadays that it’s hard to tell the former from the latter, and vice versa. For Washington and Moscow – two old-time friends and rivals – the year 2012 ended with the announcement of the arrival of a new period of confrontation, which can be observed between parliaments at the moment but could grow into something much more serious.

Having shaken off the ‘archival dust’ of the Jackson-Vanik amendment, the United States quickly replaced the obsolete document with the Magnitsky Act. Russia responded with the blacklist of Americans who will be denied Russian visas and imposed a ban on the adoption of Russian children by US citizens.

Like in chess, the game between Moscow and Washington is developing on the basis of a logical scenario. The methods the two countries resort to are not important after all, as the relations between the two countries were destined to deteriorate anyway. This opinion belongs to International Grandmaster Alexei Kuzmin.

"The political duel between the United States and Russia will assume yet more threatening proportions in 2013. Given that the two sides have exhausted all their arguments concerning a European missile defense system, Iran, Syria and the ever-green issue of a Middle East settlement, there are practically no chances for striking an easy deal. A chess player is often confronted with difficult choices where he has to decide whether the oncoming worsening of his position is beneficial. Every grandmaster knows how to provoke the opponent into making a move that could seem dangerous but yields good fruit in the long run. A provocation that fails to hit its target makes your position weaker."

Whatever moves Russia and the US choose to make, they are unlikely to grow into a full-fledged conflict, International Grandmaster Vladislav Tkachev says.

"No high-profile moves, like the Magnitsky and Dima Yakovlev Lists, the creation of new missile defense systems, or support of one of the parties to the Syrian conflict, can spoil relations between Russia and the US. As always, the United States is feigning interest in what Russia has to say but does as it pleases. It reserves the right to set its own rules of conduct. Like in a game of chess, Washington controls the key fields of the chessboard while feeling free to decide whether to exchange pieces or launch a direct attack against the king."

According to Alexei Kuzmin, the recently signed Dima Yakovlev Bill and the law that bans corrupt US officials from opening accounts in Russian banks or entering Russia are strategic moves designed to provoke the opponent into taking symmetrical measures, which in turn could strengthen President Putin’s positions on the ‘domestic policy section’ of the chessboard.

All these moves are but red herring while Moscow is consistently pursuing its agenda moving, slowly but surely, towards the ‘main target’. This is what is bothering Washington, Vladislav Tkachev says.

In general, Russia is against ‘blacklist wars’ or games for raising stakes. The Russian Foreign Ministry said a few days ago that the only reasonable way of handling international relations is a dialogue. But a dialogue presupposes two parties.

Voice of Russia