How It Works In New York

Many people are starting to notice that, no matter how much politicians overspend the people's money and how corrupt they are, it seems to be just about impossible to vote them out and get a new bunch that is meaningfully different.   Why?  A big part of the answer is the use of public moneys in the corrupt processes of government expansion and entrenchment.

There is little systematic reporting on these processes in the media.  But here in New York, a series of corruption cases has exposed a widely-used M.O. that seems to represent the current state of the art.  The latest case has revealed corruption at a whole new level and brought it to the doorstep of the kingpin of New York State politics, Speaker of the Assembly Sheldon Silver. 

Here's the basic New York M.O.:  Start a non-profit organization ostensibly dedicated to alleviating "poverty" among your constituents.  The public is bamboozled by fake federal statistics into thinking there are lots of people in physical-deprivation poverty, and generally supports public spending to alleviate the poverty.  The State Legislature and City Council spend public money, purportedly to alleviate poverty, by handing out large grants to dozens of non-profits in the scam "anti-poverty" biz, many of them closely associated with various state legislators and city councilpeople.  So you get your non-profit on the list.  Not one of these non-profits has ever actually removed a single person from "poverty" as measured by the federal statistics, because the services they provide are all in-kind and therefore don't count toward the official federal poverty measure.  But these non-profits are political gold.  At the minimum you have lots of employees who can be your campaign workers when that season rolls around, but that's only the beginning.  Next, you can put on the payroll your wife, girlfriend, and/or lots of relatives, not to mention yourself -- remember, state legislature and city council are part-time jobs.   Best of all, you can divert a good piece of your state or city  funding back into political contributions to your campaign to ensure that no competition against you can ever get traction.  And finally, you have no concern that your non-profit might actually cure the "poverty" and put itself out of business because none of its efforts count in the fraudulent official measure of "poverty."  Get a bigger appropriation next year!  You are fixed for life!

And if you start following this stuff, you realize that one after the other the Feds (rarely the state AG or DAs) arrest the state pols and time after time it's some variation of the same story.  To take some that have been in the news within the past year or so:

Pedro Espada was a State Senator from the Bronx, even serving briefly as Majority Leader.  He had a non-profit called Soundview Health Clinic that was the subject of repeated allegations of corruption.  According to this Wikipedia article, in 2000 he was tried, but acquitted, for diverting taxpayer funds from Soundview to fund his political campaigns; although he was acquitted, four other employees were convicted.  Subsequently, multiple state and federal investigations dogged him. In 2010, Andrew Cuomo, then state AG, accused Espada in a civil suit of allegedly diverting some $14 million from Soundview for personal expenses.  A 2010 private civil lawsuit accused him of diverting $1.35 million from Soundview to hire "Espada Management Company" to provide janitorial services to the Soundview facilities.  Ultimately Espada was convicted 2012 on a 2010 federal indictment  for embezzling money from Soundview (yes, Soundview also got Federal money).

In July 2012 Larry Seabrook, a Bronx City Councilman (and formerly State Assemblyman and State Senator) was convicted after being charged with diverting more than $2 million of public funds between 2002 and 2009 for personal purposes through non-profits.  According to the New York Post, the non-profits included a "job training program and a group aimed at bringing diversity to the FDNY."

In early 2013 State Senator Shirley Huntley of Queens pleaded guilty to diverting $85,000 to herself from a taxpayer-funded non-profit called the Young Leaders Institute in Laurelton.  I know what you're thinking -- Small time!  Yes, but don't assume that was the extent of the corruption.  At Huntley's sentencing in May where she got a very light sentence of a year and a day from Eastern District Judge Jack Weinstein, it emerged that she had been wearing a wire for some time to assist the FBI.  So more indictments may well be coming!

Then there's the case of long-time State Assemblyman Vito Lopez of Brooklyn.  Lopez's non-profit power base was something called Ridgewood Bushwick Senior Citizens Council, recipient of over $13 million of government money in 2011.  According to this article from the Daily News in August 2012, "with Lopez, there was always talk of one investigation or another, [u]sually [having] to do with the Ridgewood Bushwick Senior Citizens Council."   Among the more obvious eyebrow-raising aspects of RBSCC was that Lopez's "girlfriend, Angela Battaglia, was earning $343,000" a year working there, while his campaign treasurer was paid $782,000.  However, before any of the investigations actually caught up with Lopez, he found himself accused in a sexual harassment scandal, lost the support of powerful speaker Sheldon Silver (who stripped him of his chairmanships), and resigned from the Assembly in May.  And then he immediately ran for a City Council seat from the same area of Brooklyn, which he lost in a primary in September.  Hard to say if the investigations will continue with him gone from the political scene.

But all this is just the prelude to the Big One.   On September 24 one William Rapfogel was arrested on corruption charges, this time by state (AG) prosecutors (!).  Rapfogel had been head of something called the Metropolitan Council on Jewish Poverty -- yes, it's precisely one of those completely cynical so-called "anti-poverty" agencies that provides in kind services and therefore never actually gets anyone out of officially-measured "poverty."  (Don't believe me?  Check out their list of programs on their website here.)  But this is no small-time operation.  According to the New York Post today, it has recently been the recipient of some $90 million annually of taxpayer funding.  Oh, and did I mention that Rapfogel's wife Judy is long-time chief of staff to Assembly Speaker Sheldon Silver?    So it comes as no surprise that the "Met Council" was one of Silver's favorite non-profits for the direction of state funds.  (From the Speaker's perspective, what's not to like about being able to claim that he is spending a lot of money to "help" people in "poverty" without any risk that the number of people in official poverty might go down and undermine the spending machine?)   According to this article at Newsday (unfortunately behind pay wall), none other than Judy Rapfogel was the regular representative of the Speaker at the legislative meetings where state "anti-poverty" funds were whacked up among the various competing non-profits.  But don't worry, when the Met Council came up, she didn't speak, although it was known that the Met Council was one of Silver's favorite non-profits.  (And, of course, Silver has the power to strip Assemblymen of committee chairmanships that carry extra pay.)       

Some great alleged details of the Rapfogel story are in the allegations of the Criminal Complaint.  The basic idea is the the Met Council paid inflated insurance premiums (with taxpayer money), and then the insurance companies kicked the money back to Rapfogel, much of it as cash in envelopes.  The Complaint alleges that some $400,000 in cash was recovered by prosecutors from the Rapfogel's homes, and that the total amount stolen was "in excess of $5,000,000."

But the best part is the allegations about how Rapfogel then turned the kickbacks into political donations in small amounts from so-called straw donors.   According to unnamed confidential sources cited in the Complaint, Rapfogel would divert money from the kickbacks to reimburse individuals who made small political contributions, particularly to candidates for city office.  Why in small amounts?  For those who don't know, New York City matches donations up to $175 per candidate per election on a 6-1 ratio.  And thus, if divided into pieces of $175 and under, can $1 million of taxpayer funding for an "anti-poverty" program turn into $6 million of political contributions to keep your friends in power.

Well, how exactly are challengers supposed to compete effectively with an incumbent-entrenchment system at that level of uber-corruption?  But don't worry -- so far at least, Judy Rapfogel is saying that she knew nothing about this.  I guess that means that Silver didn't either.  Yup.  It's just how it works in New York.

Argentina Bond Default - Now It Starts To Get Interesting

In the competition for the world's most incompetent and irresponsible economic policy, Argentina struggles for the lead against the likes of Venezuela and Greece.  (Cuba and North Korea are in yet another category, an economic fools' lifetime Hall of Fame.)  We are soon to see if Argentina can put a few lengths between itself and its rivals.

If you have been following the long-running saga of the Argentina bond default, you know that Argentina defaulted on close to $100 billion of external debt around the end of 2001.  Then in 2005 and again in 2010 it put out take-it-or-leave-it exchange offers, and got some 93% of the holders of the defaulted debt to turn them in for new "exchange" bonds with face value of about 25 cents on the dollar, and other less favorable terms.  But that left about $7 billion of the defaulted bonds outstanding.  Argentina passed a so-called "Lock Law" that flatly prohibits payment on the defaulted bonds, but those bonds by their terms are payable in New York and governed by New York law.  Holders of those remaining bonds have been relentlessly pursuing their lawsuits in the Federal courts in New York.  Argentina has lost at every turn in the Southern District and the Second Circuit Court of Appeals, and after many years we are coming up on the end game.  Most recently Argentina put its hopes on a long-shot cert petition to the U.S. Supreme Court.  This morning the Supremes denied cert.  

Now it starts to get interesting.  It's been some eight years of litigation, but believe it or not Argentina is starting to run out of options.   The Southern District court has not only granted summary judgment to the holders on their bonds, but has also granted equitable relief ordering that Argentina must pay the defaulted bonds any time it makes a payment on the exchange bonds, and further that it may not "take any action to evade the directives" of the court.  Argentina wished to keep paying on the exchange bonds and keep not paying on the defaulted bonds, so it then in August came up with the idea of exchanging the exchange bonds yet again for new bonds payable in Argentina, thus outside the jurisdiction of the U.S. judges.  

Not so fast!  The defaulted bond holders went into court and asked the judge to specifically order that Argentina could not do such a new exchange to evade his prior orders, and he agreed.  On October 3 he ordered that such a new exchange would violate his prior orders and was specifically prohibited.  Back to you, Argentina!

Might Argentina go into outright defiance of the New York court orders?  Here is a clip from the Second Circuit argument earlier this year where the lawyer for Argentina (Jonathan Blackman of Cleary) seems to be saying that they will: 

 "We would not voluntarily obey such an order."  Needless to say, this is not an everyday event in the U.S. courts.  Yes, parties do from time to time get themselves intentionally held in contempt in the District Court in order to enable an immediate appeal.  But here, all appeals have been, or will shortly be, exhausted. 

Given the breadth of the orders the courts have already shown themselves willing to issue, it appears that unless Argentina gives up and pays the defaulted bonds, the courts are heading toward cutting it off completely from the New York financial markets.  It is possible to operate a country without access to these markets -- Cuba and North Korea already do it.  Take that, Venezuela and Greece!  While you are merely impoverishing your populaces, Argentina may soon gain entry into the economic fools' lifetime Hall of Fame.    

Of course, getting cut off from credit would probably be the best thing that could ever happen to Argentina, finally forcing a reduction in its wildly bloated state sector and out-of-control crony capitalism.  But don't worry.  Without a doubt the Europeans will continue to lend to them. 

UPDATE:  Instalanche!  Many, many thanks to Glenn Reynolds for the link.  New readers, please stay and see if you enjoy other content. 

Should We All Be Hoping That Obamacare "Works"?

I guess I already answered that question with the last post.  But a few days ago the Washington Post came out with an editorial taking their usual approach of declaring the views of all those who disagree with them to be outside the realm of legitimate debate.  The editorial is titled "Everyone Should Hope Obamacare Works."  If you're wondering why everyone should hope Obamacare works, you'll be hard pressed to find an answer in this editorial.  Here's the best reason they give that I can find:

As with any big rollout, there will no doubt be problems, many of them mundane. Computer systems will not work perfectly. Some people might have to sign up over the phone or on paper. But everyone should hope that those sorts of problems — and the overheated rhetoric of critics — do not deter too many people from buying insurance. Many Americans’ health depends on it.

"Many Americans' health depends on it."  Wrong.  There isn't any evidence I know of that health insurance status improves actual health outcomes.  See "Medical Insurance Is About Asset Protection Not Health," March 6, 2013.   

I don't even know what it means for Obamacare to "work."  Even if a lot of people sign up, it just means that we've gotten ourselves into a big unsustainable mess.  The basic idea is a massive wealth transfer to be brought about by some combination of coercion, fear mongering, and lies.  The young and healthy are to be systematically pillaged.  Bringing the United States to a utopia of perfectly fair health outcomes is not one of the possible outcomes.  The real alternatives are that Obamacare falls apart quickly, or it falls apart slowly.  Of those two, quickly is far preferable.   James Taranto of Best of the Web is onto the issue:

We hope [Obamacare] fails quickly . . .  to minimize the damage.  Imagine if the Post had written a similar editorial in 1917, after the Russian Revolution, titled "Everyone Should Hope Communism Works." That would have seemed equally high-minded: If communism didn't work, tens of millions of people would be made miserable.  Which, of course, is precisely what happened over the next 70-plus years. . . .  The communist revolution would not have succeeded absent a critical mass of people hopeful communism would work. Nor would it have endured as long as it did if no one had an emotional interest in its perpetuation.

The Post's unstated goal is a world where the large majority of the people perceive themselves as dependent on government handouts.  It believes, and probably correctly, that even as the handouts sap initiative and bring about economic and population decline, such dependent people will never vote to go back to a world of self-reliance and freedom.  Detroit!  In the 2012 election, the people of Detroit voted 98% to 2% for Obama.     

The way out is for the Ponzi scheme to crash, and the sooner the better. 

The Right Strategy To Deal With Obamacare

Washington is currently aghast at the chutzpah of Congressional Republicans advancing various strategies to restrict or eliminate Obamacare.  The Republican initiatives run from the Cruz/Lee defunding gambit, to the efforts to get rid of some of the more obnoxious aspects of the law like the medical device tax, to other efforts to delay for a year or perhaps more the so-called "individual mandate."  I think that anything and everything that can be done to get rid of this disastrous government power grab should be encouraged, so I don't mean to be too critical.  But as usual, nobody is advancing what I think is the best idea.  Although I generally don't offer strategic advice to the Congressional Republicans, I'm going to make an exception this time.   

The Republicans should be always and everywhere, and as loudly as possible, screaming from the rooftops to all young people that this is a fraud and a scam directed at them, intended to take their hard-earned money away at the least-wealthy point in their lives, for nothing in return, and transfer the money to people wealthier than they are.  No young person should sign up for health insurance through the exchanges.  Actually, if the Republicans had any sense they should be organizing a boycott.  

But instead the Republicans seem to be completely pussyfooting around this one, and I don't get it.  There hasn't been one word of actual sense spoken about healthcare in this country for several decades, and this is a fantastic opportunity to get that conversation going.  Why?  Because the only way that healthcare or any other industry works is that consumers bear the costs and risks of their decisions.  That has not existed in healthcare in this country for a long time, but suddenly Obamacare makes it so greatly to the financial advantage of a large swath of the population to take on a big piece of the risk themselves that they will be crazy not to do it.  Why is that not a good thing?  Given the ridiculous financial burdens that Obamacare seeks to load onto low-earning young people, if they behave rationally we could shortly see the number of uninsured in the country shoot up.  That would mean that Obamacare would promptly be revealed as failing in its principal stated goal of getting "insurance" for everyone.  Meanwhile, there would suddenly be a huge cohort of massively price conscious shoppers for medical care.  Imagine: you might even be able to get a hospital to tell you how much a treatment will cost before they perform it!   

I have previously characterized the government's promotion of Obamacare to the young as "the most massive organized fraud in world history."  How could it possibly be wrong to point that out?  And remember, the government is gearing up to spend unbelievably huge amounts of money on obviously false and fraudulent advertising to get the young to sign up -- the AP has identified at least $684 million in state and federal budgets for the project.   There would be no need to spend a dime if this was to people's financial advantage. 

What are the possible objections to my proposal?  

From the Progressive/Democrat side, the main idea seems to be that it is immoral for the government to allow people to take on any material risk in their lives.  Even if you believe that a world where all risk is socialized can actually work, I don't see that as any justification for this kind of huge fraud.  Sorry. 

Another justification I have seen is that the "individual mandate" is now the law and so Republicans should not be seen as undermining a duly enacted law or advocating civil disobedience.  Here's the problem with that:  the "individual mandate" is not the law.  The Supreme Court struck it down.  Here's a link to the Supreme Court opinion.  I don't think I am misreading it.  The only part of the individual mandate that is still the law is the tax penalty for failure to obtain the insurance.  Oh, and the law disables the IRS from actually enforcing that penalty.   So I don't see why anybody should be deterred from advocating a boycott by the supposed "individual mandate."  If anything, the Republicans should be loudly pointing out that the individual mandate has been struck down and that the tax penalty is far less than the amount you will save by not signing up.

Looking for an actual intelligent objection to my proposal, the best I can find is from the usually thoughtful Megan McArdle at Bloomberg.  Megan says that "Republicans have been skating a thin line" between predicting that "people can game the system by going without insurance and then buying it when they get sick" and "encouraging it."  Megan says that Republicans are "wrong" to even get close to this line.  Why?

After March 2014, this is going to be a pretty dangerous game to play. You will only be able to enroll in an exchange policy during open enrollment at the beginning of each year. Now, this would actually work for a lot of conditions- -- even necessary surgery can often wait nine months, and while I really wouldn’t recommend it, it probably wouldn’t actually kill you to wait six months to get into a diabetes treatment program. But if you get into a car accident in April, the next 10 months of expensive treatment will be on your dime.

Sorry Megan, but I strongly disagree.   I don't see it as at all a fair characterization of what young people may do as "gaming the system" when the government is trying to strong-arm them into paying double or triple the fair price for health insurance, and also has a stupid rule that allows you to buy so-called "insurance" after you get sick.  The whole idea behind free-market capitalism is that people are allowed to behave rationally and are rewarded for it.  That's what distinguishes a functioning economic system from a Cuba or a North Korea.  

So how big is the risk for a young person that you take a pass on the insurance and then you have a bad accident or medical problem and go many months before you can sign up?  The answer is, no worse than things are today for the supposed 47 million uninsured.  If the accident happens, you show up at the hospital, get treated, and then don't pay.  Go bankrupt if necessary.  If you have no meaningful amount of assets, it's their problem, not yours.   I'm not saying this will be pleasant, but the tradeoff is a one or two percent chance of going through an assetless bankruptcy versus overpaying by thousands per year for medical insurance for a decade or two.  It's time to embrace a little risk!

Here's the most important part of my proposal:  When you find yourself in an unsustainable Ponzi scheme, you want it to collapse as soon as possible.  With Obamacare, the essential question is, is it going to be a painfully slow Ponzi scheme like Medicare/Medicaid that is taking at least 70 and maybe as much as 100 years to get to collapse, or can we get it to collapse in just a few years?  We want the death spiral absolutely as fast as possible!  If only young people will boycott it, that could happen.

Nomination For The Worst Possible Public Policy: "Affordable Housing" In Manhattan

I've previously written (back in January) that so-called "affordable housing" has to be, among the various government programs intended to assist the less-well-off, "the most expensive possible way to help the smallest number of people."  

And yet additional "affordable housing" initiatives seem to have the full support of just about everyone around here.   Fresh evidence came last week when still-Mayor Mike Bloomberg announced final agreement on the so-called SPURA project for the Lower East Side.  (SPURA stands for Seward Park Urban Renewal Area.)  According to a report in our local paper The Villager on September 19, Bloomberg, in announcing the new project that is now supposed to rise, said, “It’s a changing point of New York for the good, it really does have the support of everyone."  Then he said, “If anyone is opposed, raise your hand or forever hold your peace," and apparently no one did.  I guess it's unanimous!  Except for me, of course.

If you have ever entered Manhattan via the Williamsburg Bridge, you have seen SPURA -- a vast wasteland of parking lots on the south side of Delancey Street that has sat vacant for decades.  It's hard to imagine a clearer demonstration of the abject failure of government as housing developer.  Here is a picture of the site that I took this afternoon:  

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SPURA site looking Southeast from Norfolk St. near Delancey St. 

Here's another view looking more due East.  You can see the approaches and one of the towers of the bridge toward the left of the picture. 

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SPURA was created way back in the 60s during the heyday of the urban renewal era.  Politicians thought they could cure poverty by building public housing.  You can see in the pictures some of the projects that actually got built around that time.  But by the late 60s, the project-building era was running out of gas.  They knocked down multiple square blocks of buildings that were deemed to be substandard, or "slums," and then just left the parking lots there for decade after decade.

The new development will supposedly contain 900 new apartments, half of which, or 450, will be "permanently affordable."  Back to that in a moment. 

Meanwhile, something else has happened.  On the north side of Delancey Street there was a neighborhood more or less the same as the neighborhood on the south side of Delancey, in other words a "slum" at the time, but the government geniuses never got around to knocking it down.   Most of the old buildings are still there, with some new mixed in.  Gradually, this became a desirable neighborhood.  Today, you might even call it chic.  I'll throw in a few pictures to demonstrate.  For example, just about 50 feet north of Delancey Street on Norfolk Street is a condo called the Blue, built in 2007. Picture:

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According to data at streeteasy.com, there are 5 recorded sales at this building in the last 180 days, with an average price of $2,171,000.  There is one current listing, valued at $1,596 per square foot.  This would mean that a two-bedroom apartment would go in the range of $1.25 - 1.5 million.   Streeteasy says that rental listings in the building average $64 per square foot per month, which would be in the range of $5000 - $6000 per month for a two-bedroom apartment.  

Walk up Norfolk Street one short block to Rivington Street and you will find, for example, trendy clothing boutiques: 

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The very hot Schiller's Liquor Bar restaurant: 

The equally hot THOR ("The Hotel On Rivington") Hotel: 

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As to SPURA, they haven't yet announced any specific prices of the so-called "affordable" apartments in the new development, but let's take some ballpark numbers.  If a poor family is going to qualify for a two-bedroom apartment for close to free, that will amount to an annual subsidy of about $60,000.  If a middle class family qualifies for a similar apartment for, say, $2000 per month, that will amount to an annual subsidy of about $40,000.  Of course the City will not lay out this cash, and the subsidies will not appear in its budget or on its balance sheet.  But the subsidies are absolutely real, because one of the options is that the City could rent out the apartments at market rate to someone else, take the cash, and then instead of handing out an apartment, pay the qualifying family all -- or more likely some part -- of the money. 

And if you consider this alternative, you will quickly realize how little an "affordable housing" program accomplishes despite expending a vast amount of resources on a very small number of people.  For the poor family, by providing them the apartment the City government has given up $60,000 it could have had by renting it to someone else, and it has still left the family in "poverty" as measured by official statistics, when it could have given the family cash of $25,000, thus removing it from poverty, and have had $35,000 left for other programs.  If you wanted, you could then remove a second family from poverty and still have cash left over. 

A $40,000 annual subsidy to a middle class family makes even less sense.  How can we justify giving that kind of subsidy to a family that by definition is not even poor, even as other families are poor and are not receiving help? 

But then, here in Manhattan, it is completely unanimous that this is a good idea.  That is, except for me. 

Food Stamps And The Brezhnev Doctrine

Many readers may not be old enough to personally remember Leonid Brezhnev, the block-headed super-thug who was dictator of the Soviet Union during its long period of stagnation and decline from 1964 to 1982.   Here is a picture:

When Brezhnev is remembered at all, it is for the so-called Brezhnev Doctrine, by which he asserted that any country once turned Communist must never be allowed to go back to capitalism.  He may have been dumb, but he had sufficient instincts to sense that once any part of the empire was lost it could start a cascade and the whole house of cards could collapse very quickly.  In the end, that's exactly what happened.

A very similar but so far nameless doctrine applies to the world of government programs, where the principle is that no program must ever suffer an actual spending cut.  Without doubt the defenders of all government spending are motivated by the same instinct that motivated Brezhnev -- once any cut is made and seems successful, the house of cards is in real trouble.  And thus we see seemingly insignificant and clearly necessary cuts subject to hysterical defense down to the very last dollar. 

This phenomenon is currently playing out in regard to the food stamp program, otherwise known by the official acronym of SNAP.   Prior to the Obama years, food stamp spending tended to go up in recessions and down in recoveries.  But during the five years of the Obama "recovery," food stamp spending has somehow exploded from about $40 billion to about $80 billion per year, with the number of recipients nearly doubling to about 48 million.  Causes of the explosion include the government's aggressive promotion of food stamp dependency, along with lifting of prior restrictions and limits on eligibility.  I have previously covered this issue here.

Now enter the congressional Republicans with a budget proposal to bring about a small reduction in food stamp spending.  As reported at The Hill, the House last week passed a Republican proposal to "cut food stamps by $39 billion."  Of course that's $39 billion over  ten years, less than $4 billion per year.  So we're talking about getting back maybe a tenth of the explosion of the last five years, going from $80 billion per year back to maybe $76 billion.  This is supposedly to be accomplished by re-imposing some of the restrictions previously in place.  For example, the Wall Street Journal reports on September 21 that the 2009 Obama "stimulus" eliminated a 20 hour per week work requirement, and that Obama also eliminated a three month time limit for employable and able-bodied adults, leading the number of employable adults on food stamps to grow by 164% from 2007 to 2011; those restrictions would now be at least partially reinstated.  Nobody is even talking about going after some of the even more outrageous aspects of the program, such as that home equity in unlimited amount and retirement savings accounts in unlimited amount do not count toward food stamp eligibility.  After all, we wouldn't want to restrict our entitlements to just non-millionaires. 

Anyway, cue the hysterical forces seeking to prevent even one dollar of federal spending from ever being cut.  NPR refers to the approximately 5% cut as a "slash"; the Atlantic Wire calls the proposed cuts "massive"; Think Progress says the bill will affect "millions of the most vulnerable people in the country."   From among many crazed reactions, consider this one from one Albor Ruiz in the New York Daily News on September 22:

The bill will leave nearly 4 million Americans hungry, and 210,000 children without school lunches. Apparently, the GOP leaders believe that’s not their problem.  “We’re looking at a hunger crisis unlike any we’ve seen in Food Bank’s 30-year history,” said Margarette Purvis, president and CEO of Food Bank For New York City.  The sheer meanness of the Republicans’ action becomes clear once you know that, nationally, nearly 48 million people — 1.8 million in New York — rely on SNAP. Over 92% of them are children, the elderly, disabled or working families below the poverty line.  Coming at a time when one in five children (16 million) suffer hunger, a record-high, the bill would deprive millions of Americans from a proven lifeline to keeping food on the table.  “I find that idea repugnant and repulsive,” said an irate Rep. José Serrano (D-Bronx), who added that the cuts represented “one of the cruelest visions of government that we have seen in generations.”  Repugnant, repulsive and needlessly cruel, these cuts would be disastrous for New York City.

It's like there's no end to the invective:  "devastating," "sheer meanness," "repugnant," "hunger crisis," "repulsive," "cruel," "disastrous."  All this over a 5% cut, almost all of which is intended to come from able-bodied, employable adults who were not even eligible for the program at all until just a few years ago?  Brezhnev would be proud!

Although not so over-the-top in the rhetoric department, even far more dishonest in my opinion was the lead editorial of Friday September 20 in the New York Times.   Here's what they have to say:

In what can be seen only as an act of supreme indifference, House Republicans passed a bill on Thursday that would drastically cut federal food stamps and throw 3.8 million Americans out of the program in 2014.  The vote came two weeks after the Agriculture Department reported that 17.6 million households did not have enough to eat at some point in 2012 because they lacked the resources to put food on the table. It came two days after the Census Bureau reported that 15 percent of Americans, or 46.5 million people, live in poverty.

The evidence cited by the NYT in favor of its argument is completely fraudulent.  As previously discussed by me here, the DOA did not report "that 17.6 million households did not have enough to eat at some point in 2012" or anything like it.  The report instead found that 17.6 million households, or 49 million individuals, were "food insecure" at some time in 2012, as determined by an affirmative response to the proposition: "We worried whether our food would run out before we got money to buy more."  That question was completely cynically contrived to get a "yes" answer from most or all food stamp recipients, since the program by its design requires recipients to manage a limited budget throughout a month.  If the food stamp program serves 48 million people, and still leaves all or almost all of them  in "food insecurity," (or as the NYT would say, without "enough to eat") shouldn't it be completely scrapped and replaced with something that works, instead of cut a lousy 5%?  Similarly, the Census Bureau "poverty rate" statistic is a total fraud, as previously covered by me many times, including here and here.    To give just one example of the massive dishonesty, included in the government's supposed 46 million in "poverty" are almost 300,000 here in Manhattan, many of whom are observably getting in excess of $100,000 per family per year in in-kind government handouts (housing, Medicaid, food stamps, cell phones, parking spaces), all of which are counted at zero in the poverty statistics.

The question I have about the NYT is, are they intentionally perpetrating the fraud, or have they themselves been taken in by others?  Those are the only two possibilities, and neither is good.  As a partial answer, I would point out that it is not possible to read the DOA's "food insecurity" report and come away thinking that they are saying that the 17.6 million households did not have "enough to eat."

Anyway, from their perspective, the advocates are right to fight for every dollar of government spending, because when the first chips of the edifice start to fall, the whole thing could go quickly like a house of cards, just like the Soviet Union.