Does Virgina really support Cantor?

Do the residents of Virgina really want such a person representing them?

The following is reprint from Salon.com (http://www.salon.com/news/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest). The original, at least in my browser, is dark print on a dark background and I could not read it.

With apologizes to Salon:

War Room
Monday, Jun 27, 2011 20:25 ET
Eric Cantor's glaring conflict of interest
He's the GOP's chief debt ceiling negotiator. He's also invested in a fund that will skyrocket if there's a default
By Jonathan Easley

Eric Cantor's glaring conflict of interest
AP/J. Scott Applewhite
Eric Cantor

When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively "shorts" long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)

According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor's office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.

"If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries," said Matt Koppenheffer, who writes for the investment website the Motley Fool. "Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike."

The fund hasn't significantly spiked yet because many investors believe Congress will eventually raise the debt ceiling. However, since Cantor abruptly called off debt ceiling negotiations last Thursday, the fund is up 3.3 percent. Even if an agreement is ultimately reached before Aug. 2, the fund could continue to benefit between now and then from the uncertainty. (One tactic some speculators are using is to "trade the debt ceiling debate" -- that is, to place short-term bets on prices as they fluctuate with the news out of Washington.)

Salon's Andrew Leonard calls the debt ceiling negotiations "Washington’s titanic game of chicken," and the longer the game goes on, the more skittish the bond markets will become.

"Cantor's involvement in the fund and negotiations is not ideal," Koppenheffer said. "I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short. We can only guess how much he understands what’s in his portfolio, but you’d think a politician would know better. It looks pretty bad."

Cantor spokesman Brad Dayspring noted that U.S. Treasury bonds make up a large portion of the congressman’s pension, and said investment in ProShares ETF serves to balance that investment and to diversify his portfolio. Disclosure forms indicate that Cantor has considerable personal assets, including real estate in Virginia worth up to $1 million, and a number of six- and seven-figure loans to private entities and limited liability companies. So his investment in ProShares ETF represents only a small portion of his overall portfolio -- but that share could grow a little larger just over a month from now.

Jonathan Easley is an editorial fellow at Salon. Follow him on Twitter @joneasley. More: Jonathan Easley



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Cantor, debt ceiling, Republican, conflict of interest,

Authorized Brand, an original poem

Cookie cutter people
living cookie cutter lives
raising cookie cutter children
with their cookie cutter wives
driving cookie cutter SUVs
to cookie cutter schools
on to cookie cutter jobs
with their cookie cutter rules

on a cookie cutter schedule
for their cookie cutter day
while their cookie cutter kids
engage in cookie cutter play
in their cookie cutter suburbs
with their cookie cutter lawns
'til their cookie cutter nights
end in cookie cutter yawns

Budgets, yours and the government's

(Prime Directive) The government can't go broke.

The country went off the gold standard in 1971!!!! And what is strange is everyone acts as if we are still on that standard. The mind set, certainly in the general population, remains fixed on the idea that a federal budget and home budget work the same way.

They do not. In fact many of the concepts that we have for home, corporate, or state budgets either don't apply or are reversed for a government running on a fiat currency.

For example: Your budget requires obtaining something of value to trade for products or services you want. You need to get cash to spend. The government, on the other hand, needs to create something of value to provide for an economy and to control the economy. That control is supposed to be for the overall benefit of the citizens for whom the government (presumably) works. The government must create a currency and, somehow, give that currency value. If the government has the power to tax and define the currency that tax must be paid in, it must use that power to give its currency value. In fact that is the only way the government has to give value to its currency.

This, of course, leads to the first difference in your budget and the government's; you must earn, borrow, or somehow acquire money to pay your taxes. But the government must spend money (and run a deficit) in order for there to be money to tax. But note well!!! The government does not have to borrow any money; not a farthing, nothing. The government neither has nor doesn't have money.

What about the tax money it gets? An entry is made that you paid your taxes - and that's it. It doesn't go into a tin box somewhere, it simply disappears. The government doesn't require any taxes to pay for a government purchase of goods or services. It doesn't even have to bother printing currency most of the time, it simply makes entries in its score card, its spread sheet.

If there is too much money and too little goods and services, i.e. more demand that supply, then raising the taxes will drain the excess and lower the demand. The government can control where growth is simply by where it spends (where we tell it to?) and what it taxes. Tax automobiles by weight, say 10 cents a pound per year. No complicated fuel consumption rules. Just that alone will drop fuel consumption in this country dramatically. Tax income above, say $300,000, at 90% and down $200,000 at 10%. How much of the population (and industry) would benefit?

There is a lot of fine structure that is built from this concept, but the sad thing is that a grasp of just this simple model is all the is really necessary to conclude that the public is being badly served. Whether it is through ignorance or chicanery is hard to tell, but if the general public should ever figure this out and realize that the economy can easily be configured to provide a descent life for everyone but has been structured to enrich a few on the backs of the general population, there should be hell to pay.

Notice, I did suggest the government didn't need to borrow anything. A little secret (shhhhh: It never has to). Why it does will be discussed during news at eleven. (I mean in another blog.) It makes sense but not to acquire money.