Colorado

• Remediation in college "is wholly ineffective." The solution is to improve K-12 education.
• A group of voters is challenging a rule change related to electronic voting machines. The Post story doesn't mention what the rule change is however, all voting machines should include a paper receipt that can be used for a manual, human recount which is definitive in case there are questions about an election.

Everywhere else

• Rod Blagojevich was sentenced to 14 years in prison for trying to sell former Sen. Barack Obama's seat after he was elected President.
• Oh, goody. We're two months into the Federal budget year and we're already $250 billion in debt. Any idea where the Republicans who were trying to stop this are?
• California voters may kill off the high speed rail boondoggle. The cost of the project has tripled and Californians are reluctant to continue throwing good money after bad.
• Senators McCain and Coburn are working up an amendment that would end Solyndra-style loan guarantees. It's nice to see it even if Democrats will spin it as Republicans hating jobs.
• Newly released documents prove that the Obama administration was using Fast and Furious to push for stricter weapons regulations.

Remember the first guy in line at that beautiful ol’ Bailey Building and Loan?  The guy who wants every last penny of his account out, so he can put it under his mattress?

Well, George Bailey is Greece and that guy is Finland.

The Finns, as a condition of a loaning Greece more money, wants hard collateral, and the Greeks were perfectly willing to cut this side-deal, to the chagrin of the Dutch, the Austrians, and a host of other lending countries who are now expecting the same treatment.

The other Euro-lenders need to approve any Finnish collateral, and they don’t seem in a mood to do so, which the Finnish government surely had to have known when it struck the deal.  There’s at least some evidence that it was reached more for internal Finnish political consumption than anything else.

Now, it’s not entirely clear what form the collateral can take.  More Greek debt is probably not going to cut it, so whether it’s buildings or islands or the new Ferrari or ticket revenue at the Parthenon or on option on the Elgin Marbles upon their prospective return, we don’t really know what the Finns thought they were getting as collateral.  If it turns out to be some dedicated revenue stream, they’ve turned themselves into tax farmers for the Finns, and made the Finns the senior debtholders.

That’s what the rest of the European lenders are worried about.  They’re worried that once the Finns get paid off, there won’t be enough to go around for the rest of them, so some of the other countries are refusing to sign off on that deal unless they also get, ah, assurances.

With the added doubt about Europe being able to arrive at a deal, Greek-German spreads have jumped up today.  But as with the US debt ceiling debate, the liquidity problem pales in comparison to the solvency problem.  The fact that the Dutch, Austrians, Germans, and Slovians (Slovakia and Slovenia) are all against it isn’t just a signal that they don’t want Finland rocking the boat.  Isn’t it also an indication that they money isn’t there?  Not just today, but for the duration of the restructure?

At this point, the complaints seem to be more along the lines of fairness rather than structural soundness of the loan.  The one exception is the Austrians, who proposed an inverse relationship between loan and collateral.  But even then, reassuring the small countries that they’ll get theirs, while the large countries recognize implicitly that they’re not any better off with guarantees, isn’t exactly reassuring.

Nevertheless, the reaction is telling.  Right now, George Bailey is asking that nice old lady how much she can get along with, and praying that she doesn’t just name her account balance.

Editorial page editor of the Colorado Springs Gazette Wayne Laugesen was kind enough to write a little blurb about and link to the show we did a couple weeks ago. We talked about the horribly fallacious campaign to smear the Springs with deputy director of the Colorado chapter of Americans For Prosperity Sean Paige.

Over on our Environmental Policy page, Amy Oliver shows us once again how much green it takes to be green. Both taxpayers and ratepayers will find their wallets just a bit lighter because of this. Additionally, over on Townhall.com Amy has a little fun with our national debt. Guess how many Superbowl tickets you could buy with our national debt? You’ll have to check out Amy’s article to find out.

Constitutional scholar Rob Natelson shares his thoughts on the most recent ruling against Obamacare on his blog, constitution.i2i.org. That unconstitutional individual mandate just can’t catch a break these days…

The next logical question is: how do the states take control? Answer: A convention for proposing amendments! The states must come together and address the issue of runaway spending by our runaway Congress. Rob has been talking about this solution for quite some time, but after a couple years of incredibly in-depth scholarship, he’s written his masterpiece for Tennessee Law Review: Proposing Constitutional Amendments By Convention: Rules Governing The Process.

Rob’s article contains the most in-depth look at our Founding era’s historical record on Article V conventions ever put down on paper. I suggest giving it a read if you’d like to become educated on this topic so riddled with fallacies and misconceptions. Additionally, check out this iVoices.org podcast Rob did this morning with my minion. It’s probably the best overview of the subject you could get in around 20 minutes time.

Although Amy Oliver doesn’t have a book (yet), she is on a mission to kick start a movement to get activists fired up and policies changed. In this Townhall op-ed, Amy outlines her version of the Silent Spring – what she calls our “Economic Silent Spring.”

Right now every man, woman and child in the United States is shackled with more than $46,700 of national debt and that does not include interest or unfunded liabilities such as Medicare and Social Security. Assuming we continue down the superhighway of spending, by 2015 every child in America and their parents will owe more than $70,000 each according to the U.S. Debt Clock.

Debt is the new DDT. But unlike the harmless pesticide, debt is toxic. As it grows and grows it poisons our children’s future. Amy’s plea for less spending and a brighter future for our kids is not going unnoticed. Mothers Against Debt is getting bigger each day (like our debt). More Moms are coming to understand the danger in having policies that promote the “spend now, leave bill for later” lifestyle of Washington, DC. After all, the bills we are accruing at an unprecedented rate are neatly stacking up in each and every baby cradle across the country. Forget your kid’s impending college debt. They’re already tens of thousands in the hole before they take their first class.

If Amy gets her way, the Economic Silent Spring will start a movement that lasts over 40 years and changes business as usual in Washington. Help Amy ban wreckless debt. Join Mothers Against Debt today.

In addition to senior fellow and Constitutional scholar Rob Natelson’s severe disappointment with the debt deal, our Barry Fagin is also not impressed. In yesterday’s Colorado Springs Gazette, Barry outlines why he isn’t a fan of the deal and also what we could do to end our perpetual federal spending crisis. Hint: it doesn’t require any action from those spendaholics in Congress.

As an emblem of what Walter Russell Mead calls, “the Blue Social Model,” there’s almost no place Bluer than New York.  So it seems fitting to pay homage to the home of the modern patronage state in a post devoted to transfer payments.

We all know that transfer payments – Welfare, Social Security, Medicare, Medicaid, Unemployment Benefits – have been growing at an unsustainable pace, and are the source of our long-term structural problems.  We’re also aware that once a program acquires a sufficient constituency, it’s almost impossible to reduce, let alone do away with.  Thus the concern when the top few percent of earners pay 40% of all income tax, and when half the country pays no income tax at all.

This dramatic Calculated Risk post about recession measures has gotten a number of people’s attention, but what struck me was the qualifier on the Personal Income chart: less transfer receipts.  Transfer receipts don’t count towards GDP, with good reason, but they certainly subtract from the country’s capital available for investment or spending.  They’re also the key, most public, most obvious way of obtaining a constituency for higher taxes and continued spending.  We’re now reaching the point where almost $1 out of every $5 of personal income comes from transfer payments (the scale on the left is in $ billions):

You can see the large boost given as Medicare and Medicaid took hold in the late 60s and early half of the 70s.  Through the 80s and 90s, the numbers continued to slope upwards, but a robust economy kept them largely between 12% and 14%, or between 1/7 and 1/8 of personal income.  Then, with the financial crisis and the preceding recession, they went through the roof.  For the first time, a boost in transfer payments was also accompanied by a year-over-year drop in aggregate personal income.  It’s that spending percentage that Obama and the Democrats want to lock in as the floor for the economy.

Colorado has it a little better, or maybe is just lagging behind the rest of the country (the scale on the left is in $ millions) :

In the 90s, as Colorado recovered from the commodities bust and attractive tech talent from around the country, the percentage of income derived from transfer payments fell just barely above 8%.  The recession of the early ’00s hit, and the slower growth of that decade, while real, was only enough to just balance the increase in transfers.  Some of this was a result of Colorado’s generosity to its own citizens, as the legislature loosened rules for Medicaid.  The state, of course, followed the rest of the country in a near-vertical climb in ’09.

The number is starting to decline gently as unemployment benefits run out, and incomes begin to slowly recover.

The chart, although the time scale is different from the one for the country as a whole, points out the main lesson of all this: growth is the only way out of this problem.  It can’t be healthy for $13 of every $100 of personal income to come from an unearned government check.  It’s even worse for the country as a whole.  And the deepening dependency of more and more people is only going to make the political will necessary to break this cycle harder to find.