Treasury Bonds: I learned something last week. I learned that fully 40% of the over $9 trillion in Treasury debt currently outstanding to the public has a maturity of 3 years or less. Put another way, it means that we are rapidly approaching $4 trillion in U.S. debt that matures by 2014 or sooner. As I write this, the yield (interest rate paid) on a 2-year Treasury note is 0.645% or about 2/3 of one percent. The yield, at the same time, on a 10 year Treasury note is 3.4%, and on a 30 year is 4.55%. In bond parlance, this is called a "steep yield curve" where interest rates get much higher as you go farther out in time.

It’s pretty clear why the Treasury is doing this. By issuing mostly short-term notes, the Treasury is paying less interest, thereby keeping interest costs and, consequently, the deficit down. In addition, the Federal Reserve is in the middle of its "quantitative easing #2" (QE2) under which it is buying $600 billion of our own Treasury debt over about a 6 month period. The Fed is not buying the short-term notes, but is buying 10 year maturities and longer in order to hold those rates down.… Read More

The Sacramento Bee’s Capitol Alert Blog is reporting this morning that Assembly Republican Leader Connie Conway, who apparently spoke with some of the "Rogue 5" GOP State Senators, that their negotiations with Governor Brown craft a budget deal have broken off.

Specifically (excerpted from Capitol Alert):

From today’s Wall Street Journal Political Diary E-mail… … Read More

George Skelton’s column in the LAT tomorrow is the latest in pricelesslypathetic analysis of the GOP’s position in the current budget talks. Is it just senility on his part? Selective memory? I mean, what could it possibly be? Let me remind everyone: the voters in California have spoken. They have rejected and repudiated Republican ideas as thoroughly as they can be rejected. November, 2010 was a slaughter. Georgie – Californians don’t want our freaking input, okay? Do I need to send you the numbers again?

The only reason the MSM wants Republicans at the table at all is to share the blame for the inevitable non solution that will come out of these latest budget talks, and it appears at least five of our knuckleheads are at least considering being useful idiots for the California welfare State, again. The GOP is only wanted to provide votes for high taxes. That is it.

Hey people! How did we get here in the first… Read More

It’s no surprise that members of the Oceanside City Council don’t like the idea of their city being labeled a “predatory community.” Yet, that’s the reference George Skelton used in a February Los Angeles Times column to describe Oceanside and other California cities that have imposed “crash tax” ordinances, including Carpinteria, Costa Mesa, Fullerton, Garden Grove, Hemet, Petaluma, Redlands, Ripon, Roseville, Sacramento, San Bernardino, Stockton, Tracy, Woodland and several others.

The crash tax is generally defined as a fee imposed on those getting in an accident that results in the dispatch of paramedics, firefighters or other emergency responders. Some cities impose it only on visitors or those “traveling through,” not their own residents.

Very inviting.

Many are calling it double taxation. State Senator Tony Strickland has introduced legislation, SB 49, that would ban the… Read More

Last night I received an email from Celeste Greig, President of the California Republican Assembly (dubbed the conscience of the GOP) — who informed me that on behalf of the CRA, she has introduced two resolutions for consideration at next weekend’s California Republican Party Convention.

The first one, immediately below, is pretty self-expla

natory. This is a resolution that would seek to condemn and censure GOP legislators that vote to put taxes on a June special election ballot. Greig actually leaves blank spaces in this resolution so that, if necessary, the names can be added in…

California Republican Party… Read More

I was almost amused to read over at the Sacramento Bee’s Capitol Alert Blog that Governor Brown has apparently rolled up his sleeves and is working on a public employee pension reform plan with his staff. Especially when he was asked by the media about the specifics that would be included, and he apparently responded, "As much as we can include that will not set at loggerheads all the opposing parties."

As I have often said on this blog, public employee unions (all employee unions) are creatures that live for two purposes only — to increase their size, and to increase the salary, benefits and regulatory environment to the benefit of their members. That’s it.

This is why unions like the California Teachers Association look ridiculous saying that they are about "the kids" when, for example, they don’t want to lay off the worst teachers first, but the most recently hired teachers first. In fact, they go so far as to say that you should not be able to rank teaches based on outcomes… Read More

Public employee unions are going to kill themselves and our state with their greed. This classic scene from Monty Python’s The Meaning Of Life is a great visual of what is going to happen as the unions keep pigging out at taxpayer expense…

… Read More