Republicans have prevailed in their efforts to rein-in future spending, as deficit-saddled US governments will find it nearly impossible to increase spending for at least the next 10 years.
The New York Times reports, here, that the Obama administration has released startling budget predictions that anticipate massive budget deficits, through at least 2020, which will render the United States nearly impotent in its ability to create new domestic initiatives to alleviate our current crisis or develop new social programs. These deficits will strangle future governments’ ability to initiate new programs or provide aid to stagnant states or industrial sectors.
Starving the Beast, which refers to Republican’s fiscal policy of using budget deficits via tax cuts to force future reductions in the size of government, may ultimately prevail. Bush-era tax cuts, coupled with massive spending created by 2 wars, will result in budget deficits far into the future. These deficits have been largely funded by the Chinese, who have recently demonstrated their anxiety over the situation by admonishing the US government repeatedly.
While Starving the Beast was widely discounted and ridiculed as impractical or unsustainable throughout the Reagan and Bush era, it appears that the massive budget deficits created by the wars, coupled with the Bush era tax cuts, will have the same practical effect throughout the next decade.
The resulting deficits will largely succeed in choking future administrations, including Obama, from increasing or initiating domestic spending programs, especially while America fights a 2 front war. What are the practical implications of this? Future administrations, and Congress, will have to either make drastic cuts in expenditures or raise taxes, or a combination of both.
Republicans have largely ignored the deficits, and refuse to consider tax increases, while Democrats refuse to consider massive cuts to entitlement programs. This path is unsustainable, and will result in further weakening of the US dollar as governments abroad lose faith in the US’ ability to sustain itself. Meanwhile, the stock market continues its disconnect from mainstream America, and has continued its slow, if steady rise to new heights. The stock market reflects the increasing disconnect between the investment class, which prefers short-term solutions to long-term problems, and most of America, which is increasingly skeptical of any solution to these problems.
America’s present path is clearly on a collision course with its future. Starving the Beast will ultimately result in both massive cuts to entitlement programs, and the pain that this will engender throughout the lower and middle classes. Cuts to social services and entitlement programs will be coupled with increased taxes at both the state and federal levels, as state and municipal governments strain to balance their budgets. While state governments have largely avoided these cuts by adopting accounting gimmickry to forestall these cuts, real pain will ultimately be felt by real people. Unless another consumption bubble, fueled by runaway asset prices is created, the slow demise of America’s economy has been ensured by Starving the Beast.

The Florida Bar has initiated investigations of 35 of Scott Rothstein’s partners, investigating trust account misdeeds and misappropriations.
The Miami-Herald has reported, here, that Florida Bar investigators are focusing on the equity and non-equity partners of the failed firm, which served as the foundation for Scott Rothstein’s $ 1 billion Ponzi scheme, one of the largest in Florida history, and whether any of the partners misappropriated client trust funds or otherwise lied about the status of those funds.
That the investigation has turned to Scott Rothstein’s former partners is unsurprising, given the massive nature of the Ponzi scheme that unfolded at their feet. Without concrete evidence of complicit behavior, investigators are likely wielding the only tool at their disposal: the trust accounts and the annual certifications that occur when lawyers renew their Florida Bar memberships. The highly technical focus on these largely perfunctory certifications is evidence that investigators have been unable to directly tie partners or other attorneys to the massive, $1 billion Ponzi scheme, and are seeking creative, if technical, links that tie these attorneys to the fraud.
What should the senior members of the firm have known about Rothstein and his practice? The firm’s partners, equity or non-equity, should have known that firm revenues were largely unsupported by firm employees, associates or staff, and that a significant disconnect was occurring between the work being performed by firm employees and overall firm revenues. Did any partner review firm revenue, by practice area, and determine which associates were assigned to these unique areas?
Given Rothstein’s extravagant lifestyle, did any partner determine the primary source of the firm’s significant revenues, and establish the link between those practice areas and the associates being assigned to the work? Did senior partners review payroll expenditures and establish the funding source for the shortfall between the payroll expenditures and ongoing, systematic revenue?
Even a cursory review of these patterns and linkages would have established that something was terribly wrong at Rothstein’s firm. These 35 partners either turned a willful blind-eye to these obvious problems, were blinded by Rothstein’s inflated generosity into believing that everything was fine, or were actively complicit in the fraud.
Evidence sufficient to support criminal prosecution of these attorneys will be difficult to uncover and nearly impossible to substantiate, but their collective ignorance, willful or haphazard, reveals a simple truth about the legal profession: attorneys are simply not very good at detecting, preventing or otherwise understanding fraudulent behavior.

Frank Rich of the New York Times writes, here, that the narrative of our decade has been defined by how easily we’ve all been duped by the con-artists in our midst. Collectively, Americans have become inured to the deception that surrounds our social, commercial, cultural and economic relationships.
Our vacuous minds have purposely ignored the fraying of these relationships and the resulting impact on our country because acknowledging this reality would require a painful acceptance of the cancer that is slowly consuming our society.
Rich notes that we have witnessed a decade of scam, fraud and misfortune in the likes of Citigroup, Fanny Mae, Ted Haggard, Enron, Madoff, Drier, housing, Stanford, AIG, Barry Bonds and Iraq, to name a few, and that Tiger Wood’s fraud is merely the culmination of this era. Tiger’s demise is all the more pronounced, writes Rich, because of his “sham beatific image, questioned by almost no one until it collapsed”.
Rich emphasizes, though, that it is not Tiger’s hypocrisy and our collective disappointment at yet another fallen hero that is remarkable, but the canyon-like gulf between Tiger’s public image as a “paragon of businesslike discipline” and his “maniacally reckless life”. A worse breach, though, reveals the lie of Tiger’s near-obsessive dedication to building trust as the cornerstone of his public image, and also of Tiger as the paragon of corporate resoluteness and self-discipline.
Trust and its destruction have defined these frauds. Tiger purposely cultivated an image of trust and self-discipline, and ultimately became Accenture’s standard bearer. Similarly, Enron, AIG, Fanny Mae and Madoff collectively hyped trust and reliability as the cornerstones of their businesses. Rich notes that “We keep being fooled by our leaders in all sectors of American life, over and over” and that after Enron, our financial leaders and government regulators should have been more careful in monitoring our financial landscape and critically analyzing the developing housing bubble.
The Tiger drama becomes but the latest example of this cancer, a drama which has been reduced to comical farce, freak-show, and circus tent. Tiger’s saga is interesting not because it is the undoing of a celebrity, but because this painful collapse represents the culmination of a decade of duplicity, fraud and self-righteousness.
These frauds enshrined these celebrities and institutions with masks and accompanying standards which most ordinary Americans could never achieve, and which are antithetical and contrary to our innate, imperfect, human selves. Exposing these frauds removed the masks that these celebrities have worn and which most of us accepted as impossibly true.
Perfection was imbued in these institutions and stars, Tiger Woods as the paragon of trust, Enron as the standard of corporate America, housing’s hysterical climb as the perfect asset. When measured against these standards, the rest of us were ultimately exposed as imperfect, flawed and incapable. These were impossible benchmarks to achieve or judge ourselves against, because they were ultimately revealed as scams or fiction, and yet their resolution quietly restored the vision of ourselves as flawed and imperfect, but human.
Shredding these masks returns our humanity and acknowledges that even the best among us, those near-perfect celebrities and stars, are indeed identical to us in their collective failures and misfortunes.

South Florida is awash in illegal money, and even federal investigators can no longer ignore this area as the center of corruption.
Miami continues to uphold its well-earned reputation as being the capital of vice and corruption, as the Herald writes, here. Miami is the capital of Medicare corruption, yet again, and has become the focus of federal efforts to reduce fraud. According to the Herald, Medicare “paid $520 million to Miami-Dade healthcare agencies for treating diabetic patients, more than what the agency spent in the rest of the country combined”. Think about that, Medicare spent more in Miami-Dade than the rest of the country!
The Herald noted that the county is home to just 2% of the nation’s diabetic patients eligible for Medicare. The assessment that Miami-Dade represents a disproportionate amount of medicare and health-care fraud throughout the United States has, incredibly, taken federal investigators decades to reach. But, there’s more: 1) “Miami-Dade providers accounted for over half of the $1 billion paid out nationally in 2008 for the treatment of homebound patients with diabetes and related illnesses”; 2) “The county’s percentage of diabetics is lower than the rate of in other Florida areas with heavy elderly populations; 3) “No other part of the country…comes close to Miami-Dade, which is dubbed the nation’s healthcare fraud capital; 4) “Medicare spends more than $15 billion on all home-care services nationwide, with one of every $15 spend in Miami-Dade”; 5) “Medicare’s average cost for each home healthcare patient with diabetes runs $11,928 every two months…that’s 32 times the national average cost of $378”.
With these stunning statistics, why hasn’t Miami-Dade been flooded with FBI agents, investigators, prosecutors, and other agents? Badges of fraud are fairly easy to detect, predictable, and confirmable. What else do investigators need to confirm this fraud? Signed affidavits from the fraudsters? It’s obvious that Miami-Dade County is awash in fraudulent Medicare activity, and federal investigators should freeze payments immediately and send teams of investigators to our area. Confirming the extent of this fraud should not be difficult, and could result in significant savings to Medicare.
The interesting dynamic to this situation is that once Medicare officials decide to clamp down on this type of fraud, how will their efforts affect South Florida’s local economy? Miami-Dade has been a hotspot of mortgage fraud, Medicare fraud, money-laundering, and Ponzi schemes. Slowly, surely, federal agents and prosecutors have been working to stamp these out, and have been progressively ramping-up their investigations. The effect of these efforts on the local Miami-Dade economy could be disastrous, as fraud has been such an integral part of Miami-Dade’s culture for decades. Efforts to eradicate fraud could severely weaken the local economy, and perversely, lead to more hardship in South Florida. The trickle-effect of fraud eradication efforts could undermine local retailers, who depend on this influx of illicit money, and undermine an economy already ranked among the worst in the country. Is it fair to conclude that a substantial portion of South Florida’s economy is dependent on fraudulent activities?