Did you catch 60 Minutes the other night? Republican-in-name-only David Stockman gives a good lesson in how to be a RINO. Notice how he correctly identifies the problem (budget deficits and debt) and then completely misses the correct solution (he was SO close, without even realizing it).
From CBS News:
"Deficits: The Battle Over Taxing The Rich"
http://www.cbsnews.com/stories/2010/10/28/60minutes/main6999906.shtml
"And he [Stockman] says his own Republican Party has gone too far with its anti-tax religion.
"'Tax cutting is a religion. What do you mean by that?' correspondent Lesley Stahl asked Stockman.
"'Well it's become in a sense an absolute. Something that can't be questioned, something that's gospel, something that's sort of embedded into the catechism and so scratch the average Republican today and he'll say "Tax cuts, tax cuts, tax cuts,"' he explained.
"'It's rank demagoguery,' he added. 'We should call it for what it is. If these people were all put into a room on penalty of death to come up with how much they could cut, they couldn't come up with $50 billion, when the problem is $1.3 trillion. So, to stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves.'"
And there is the problem, right there. Where Stockman's tiny little brain just ran out of steam. Did you catch it?
Here's the problem with Stockman: He takes it as a given that we cannot cut government. He has been co-opted by Washington. He has drunk the swamp water.
The problem, of course, is not that we are not paying enough taxes. The problem is that government is too big!
Let's look at Stockman's quote again.
"If these people [emphasis mine] were all put into a room on penalty of death to come up with how much they could cut, they couldn't come up with $50 billion, when the problem is $1.3 trillion."
Who are "these people"? They are the political class that Stockman socializes with. Unimaginative people who think that tax cuts "cost" the government money, as if it's the government's money. Actually, tax cuts don't "cost" a damn thing. It is government programs that cost the people money. That is the proper way of looking at it.
Stockman may be right in one sense: If we put all these people in the room they couldn't come up with $1.3 trillion in cuts (not even sure if that's the right number, maybe it's larger). But that just means we're not putting the right people in the damn room!!! It most certainly does not mean that we should just give up and raise taxes!
On a final note, this is just another example of discovering the problem and finding out that the problem is ... us. Of course it is obvious that government is too big. But good luck getting elected on a platform of, "I'm going to cut trillions of dollars from the budget." We did have a few good guys sneak into Congress in this past election, but not enough. And elections like this, where the small government ethos is popular, are few and far between.
If we insisted on politicians who tightened the purse strings we would not be in this situation. WE can control this. But WE do not.
Saturday, November 13, 2010
Friday, November 12, 2010
Did somebody say "gold standard"?
Might sanity be creeping back into our global financial system?
From Moneynews.com:
"World Bank Chief Calls for Return to Gold Standard"
http://www.moneynews.com/Headline/World-Bank-Chief-Return/2010/11/08/id/376286?s=al&promo_code=B10E-1
"Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank President Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G-20 summit."
"'The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,' he added."
The United States has benefited by having the dollar used as the reserve currency for the world. We have been able to export our debt, so to speak. This is unlikely to last forever, and it simply cannot last forever if the U.S. keeps printing money.
Why can't it last if we keep printing money? Let's say that we issue notes with 3% interest. We get dollars now and the purchaser of the notes get dollars (plus 3%) some time later. But if we inflate our currency by, say, 4% in that time then our hypothetical investor has lost 1%! He is paying us for the privilege of supporting our economy. When the notes come due the original purchaser won't be able to buy as much real stuff as he did when he started--which defeats the whole purpose of investing.
Maybe other countries would have been more likely to put up with this stuff in the past, when there was no alternative. The dollar, even if it inflated a bit over time, was still the most solid way to make sure that you didn't lose real value. That may not be as true as it once was. Given our deficits and debt, and the low likelihood that we'll cut government spending, we'll have no choice but to inflate. Other countries (potential investors) see this. They'll invest elsewhere. We won't be able to continue to float more debt and the whole house of cards will come tumbling down.
So why is the dollar the de facto reserve currency of the world? Good question. From Bloomberg:
"PBOC Academic Adviser Questions Dollar’s Global Role"
http://www.businessweek.com/news/2010-11-09/pboc-academic-adviser-questions-dollar-s-global-role.html
"Nov. 9 (Bloomberg) -- Li Daokui, an academic adviser to China’s central bank, said it could be seen as 'absurd' that the dollar remains a reserve currency after the financial crisis.
"'To a visitor from outer space, it would seem “absurd” that the dollar holds that role, given problems in U.S. financial regulation and the country’s economic difficulties,' Li said at a forum in Beijing. 'The same assessment could be made of the nation’s ability to keep issuing currency according to its own needs,' he said."
Remember, China is the largest holder of U.S. debt. Our high standard of living is propped up by the fact that China sends us low cost goods while we send them worthless pieces of paper. What would happen if they stopped playing the game?
Here's an article for you Sarah Palin haters out there. Amazing how she's always on the correct side of the issues for someone who is supposedly so stupid.
From the Wall Street Journal:
"Review & Outlook: Palin's Dollar, Zoellick's Gold"
http://online.wsj.com/article/SB10001424052748703514904575602231815453378.html?mod=djemEditorialPage_t
"Stressing the risks of Fed 'pump priming,' Mrs. Palin zeroed in on the connection between a 'weak dollar—a direct result of the Fed's decision to dump more dollars onto the market'—and rising oil and food prices. She also noted the rising world alarm about the Fed's actions, which by now includes blunt comments by Germany, Brazil, China and most of Asia, among many others."
"'We don't want temporary, artificial economic growth brought at the expense of permanently higher inflation which will erode the value of our incomes and our savings,' the former GOP Vice Presidential nominee said. 'We want a stable dollar combined with real economic reform. It's the only way we can get our economy back on the right track.'
"Mrs. Palin's remarks may have the beneficial effect of bringing the dollar back to the center of the American political debate, not to mention of the GOP economic platform. Republican economic reformers of the 1970s and 1980s—especially Ronald Reagan and Jack Kemp—understood the importance of stable money to U.S. prosperity.
"On the other hand, the Bush Administration was clueless. Its succession of Treasury Secretaries promoted dollar devaluation little different from that of the current Administration, while the White House ignored or applauded an over-easy Fed policy that created the credit boom and housing bubble that led to financial panic.
"Misguided monetary policy can ruin an Administration as thoroughly as higher taxes and destructive regulation, and the new GOP majority in the House and especially the next GOP President need to be alert to the dangers. Mrs. Palin is way ahead of her potential Presidential competitors on this policy point, and she shows a talent for putting a technical subject in language that average Americans can understand.
"Which brings us to Mr. Zoellick, who exceeded even Mrs. Palin's daring yesterday by mentioning the word 'gold' in the orthodox Keynesian company of the Financial Times. This is like mentioning the name 'Palin' in the Princeton faculty lounge."
"And here's Mr. Zoellick's sound-money kicker: 'The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.' Mr. Zoellick's last observation will not be news to investors, who have traded gold up to $1,400 an ounce, its highest level in real terms since the 1970s, as a hedge against the risk of future inflation."
Palin's prepared remarks are here, courtesy of National Review Online:
"Palin to Bernanke: ‘Cease and Desist’"
http://www.nationalreview.com/corner/252715/palin-bernanke-cease-and-desist-robert-costa
In related news, this post from Politico put a smile on my face. Even if this doesn't come to pass (it should!) I smiled when I read it:
"Ron Paul in charge of Federal Reserve oversight?"
http://www.politico.com/blogs/glennthrush/1110/Ron_Paul_in_charge_of_Federal_Reserve_oversight.html
From Moneynews.com:
"World Bank Chief Calls for Return to Gold Standard"
http://www.moneynews.com/Headline/World-Bank-Chief-Return/2010/11/08/id/376286?s=al&promo_code=B10E-1
"Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank President Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G-20 summit."
"'The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,' he added."
The United States has benefited by having the dollar used as the reserve currency for the world. We have been able to export our debt, so to speak. This is unlikely to last forever, and it simply cannot last forever if the U.S. keeps printing money.
Why can't it last if we keep printing money? Let's say that we issue notes with 3% interest. We get dollars now and the purchaser of the notes get dollars (plus 3%) some time later. But if we inflate our currency by, say, 4% in that time then our hypothetical investor has lost 1%! He is paying us for the privilege of supporting our economy. When the notes come due the original purchaser won't be able to buy as much real stuff as he did when he started--which defeats the whole purpose of investing.
Maybe other countries would have been more likely to put up with this stuff in the past, when there was no alternative. The dollar, even if it inflated a bit over time, was still the most solid way to make sure that you didn't lose real value. That may not be as true as it once was. Given our deficits and debt, and the low likelihood that we'll cut government spending, we'll have no choice but to inflate. Other countries (potential investors) see this. They'll invest elsewhere. We won't be able to continue to float more debt and the whole house of cards will come tumbling down.
So why is the dollar the de facto reserve currency of the world? Good question. From Bloomberg:
"PBOC Academic Adviser Questions Dollar’s Global Role"
http://www.businessweek.com/news/2010-11-09/pboc-academic-adviser-questions-dollar-s-global-role.html
"Nov. 9 (Bloomberg) -- Li Daokui, an academic adviser to China’s central bank, said it could be seen as 'absurd' that the dollar remains a reserve currency after the financial crisis.
"'To a visitor from outer space, it would seem “absurd” that the dollar holds that role, given problems in U.S. financial regulation and the country’s economic difficulties,' Li said at a forum in Beijing. 'The same assessment could be made of the nation’s ability to keep issuing currency according to its own needs,' he said."
Remember, China is the largest holder of U.S. debt. Our high standard of living is propped up by the fact that China sends us low cost goods while we send them worthless pieces of paper. What would happen if they stopped playing the game?
Here's an article for you Sarah Palin haters out there. Amazing how she's always on the correct side of the issues for someone who is supposedly so stupid.
From the Wall Street Journal:
"Review & Outlook: Palin's Dollar, Zoellick's Gold"
http://online.wsj.com/article/SB10001424052748703514904575602231815453378.html?mod=djemEditorialPage_t
"Stressing the risks of Fed 'pump priming,' Mrs. Palin zeroed in on the connection between a 'weak dollar—a direct result of the Fed's decision to dump more dollars onto the market'—and rising oil and food prices. She also noted the rising world alarm about the Fed's actions, which by now includes blunt comments by Germany, Brazil, China and most of Asia, among many others."
"'We don't want temporary, artificial economic growth brought at the expense of permanently higher inflation which will erode the value of our incomes and our savings,' the former GOP Vice Presidential nominee said. 'We want a stable dollar combined with real economic reform. It's the only way we can get our economy back on the right track.'
"Mrs. Palin's remarks may have the beneficial effect of bringing the dollar back to the center of the American political debate, not to mention of the GOP economic platform. Republican economic reformers of the 1970s and 1980s—especially Ronald Reagan and Jack Kemp—understood the importance of stable money to U.S. prosperity.
"On the other hand, the Bush Administration was clueless. Its succession of Treasury Secretaries promoted dollar devaluation little different from that of the current Administration, while the White House ignored or applauded an over-easy Fed policy that created the credit boom and housing bubble that led to financial panic.
"Misguided monetary policy can ruin an Administration as thoroughly as higher taxes and destructive regulation, and the new GOP majority in the House and especially the next GOP President need to be alert to the dangers. Mrs. Palin is way ahead of her potential Presidential competitors on this policy point, and she shows a talent for putting a technical subject in language that average Americans can understand.
"Which brings us to Mr. Zoellick, who exceeded even Mrs. Palin's daring yesterday by mentioning the word 'gold' in the orthodox Keynesian company of the Financial Times. This is like mentioning the name 'Palin' in the Princeton faculty lounge."
"And here's Mr. Zoellick's sound-money kicker: 'The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.' Mr. Zoellick's last observation will not be news to investors, who have traded gold up to $1,400 an ounce, its highest level in real terms since the 1970s, as a hedge against the risk of future inflation."
Palin's prepared remarks are here, courtesy of National Review Online:
"Palin to Bernanke: ‘Cease and Desist’"
http://www.nationalreview.com/corner/252715/palin-bernanke-cease-and-desist-robert-costa
In related news, this post from Politico put a smile on my face. Even if this doesn't come to pass (it should!) I smiled when I read it:
"Ron Paul in charge of Federal Reserve oversight?"
http://www.politico.com/blogs/glennthrush/1110/Ron_Paul_in_charge_of_Federal_Reserve_oversight.html
Thursday, November 11, 2010
The World's Coolest Animal? The Mimic Octopus.
Check out this octopus. Talk about great camouflage and acting!
"Mimic Octopus"
http://www.youtube.com/watch?v=ygh1-ul6E94
Here are some other videos of this amazing creature.
YouTube search for "mimic octopus":
http://www.youtube.com/results?search_query=mimic+octopus&aq=f
Wednesday, November 10, 2010
People Are Awesome Video
Here is a fun video that should cheer you up. I had to rewind it a couple times because I didn't understand what I had seen or I just couldn't believe what I had seen!
From Askmen.com:
"People Are Awesome Video"
http://www.askmen.com/video/entertainment/1080-people-are-awesome-video.html
From Askmen.com:
"People Are Awesome Video"
http://www.askmen.com/video/entertainment/1080-people-are-awesome-video.html
Tuesday, November 9, 2010
Welfare's Unintended Consequences
When we give people too much we need to realize that we end up taking something from them, too.
Check out this video:
"Why Work? Welfare addiction in handout hungry UK"
http://www.youtube.com/watch?v=WgkVSRs8ADM&feature=player_embedded
If we give too much we destroy the motivation to work. And the worst part is that this gets passed down through multiple generations. The woman interviewed in this video is 39 years old. She is has never worked. She has four kids by multiple fathers, none of which are around. She is a grandmother.
What are we doing? What are we teaching our kids?
Check out this video:
"Why Work? Welfare addiction in handout hungry UK"
http://www.youtube.com/watch?v=WgkVSRs8ADM&feature=player_embedded
If we give too much we destroy the motivation to work. And the worst part is that this gets passed down through multiple generations. The woman interviewed in this video is 39 years old. She is has never worked. She has four kids by multiple fathers, none of which are around. She is a grandmother.
What are we doing? What are we teaching our kids?
Monday, November 8, 2010
Thank Goodness I Live in a Free Country
It's great to be free, isn't it? But are we really free? Check out this article from 2008.
"Thank Goodness I Live in a Free Country"
by Don Cooper
http://www.lewrockwell.com/orig9/cooper1.html
Thank Goodness I Live in a Free Country
by Don Cooper
I was talking with some friends over the Christmas holiday break and they were commenting on how lucky we are that we live in a free country where we have the liberty and the opportunity to live our lives the way we want and are not controlled by the government like in other countries.
So I started thinking about a particular day of mine a couple months ago:
I woke up in the morning in my FHA (Federal Housing Administration) approved home that was built in accordance with USDOE (Department of Energy), FERC (Federal Energy Regulatory Commission), and numerous CFRs (Code of Federal Regulations).
I went to the bathroom to clean up for work. I showered with soap, shampoo and other toiletry products that have been approved for me by the FDA (Food and Drug Administration) using water that meets federal EPA (Environmental Protection Agency) quality standards.
I took my morning vitamins which had to be approved by the FDA.
I went downstairs to eat breakfast foods that had to be approved by the FDA and listened to my morning radio programs which are regulated by the FCC (Federal Communication Commission).
I then got into my EPA and DOT (Dept. of Transportation) standards approved and FTC (Federal Trade Commission) regulated car and was forced by the NHTSA (National Highway Traffic Safety Administration) to buckle my seatbelt and put my daughter into an approved child seat. I then drove on DOT regulated roads and was forced to drive a certain speed while listening to more FCC approved programming on my radio.
I stopped for gas but there wasn’t any due to state legislated gas quality restrictions which caused a decrease in the supply of gas and also gasoline price controls that kept the price so artificially low that there was an excess demand such that it sold out as soon as it arrived.
I arrived at my DOL (Dept. of Labor) regulated and EEOC (Equal Employment Opportunity Commission) sanctioned place of employment, running on fumes, and was forced to work the first 2 hours of my 8 hour shift for the federal and state governments by giving almost 30% of my wages to the IRS and SSA (Social Security Administration) with no compensation.
At lunchtime I went with colleagues to eat and was forced to pay with the only medium of exchange the government approves that is regulated by the FRB (Federal Reserve Board): worthless fiat bank notes.
I then went to pick up my daughter from school where she’s learning a DOE (Dept. of Education) approved curriculum. I took her to an HMO (Health Maintenance Organization) approved doctor to get her HHS (Health and Human Services) mandated vaccinations that I learned she needed while watching a Disney family movie which was interrupted by an HHS PSA.
After returning to work I checked my SEC (Securities and Exchange Commission) and IRS regulated investments in my now Federal Treasury owned banks to see if I’ll be able to retire someday since the SSA trust fund that I’ve been paying into for 25 years has been raided by the federal government and is now bankrupt.
That afternoon I had to catch a flight to our office in Detroit aboard an FAA (Federal Aviation Administration) approved plane operating at an FAA regulated airport.
Before boarding I had to pass through a TSA (Transportation Safety Administration) security checkpoint where I was forced to disrobe down to my shirt, pants and socks and pass through a scanning machine that saw right through my remaining clothing.
Onboard I noticed federal sky marshals with weapons so I decided to have a cocktail composed of liquor that is controlled by the ATF (Alcohol Tobacco and Firearms), as are the sky marshal’s guns.
Once sufficiently sedated with bourbon, I sat back and relaxed and thought to myself: Thank God I don’t live in a country where the government controls your life!
"Thank Goodness I Live in a Free Country"
by Don Cooper
http://www.lewrockwell.com/orig9/cooper1.html
Thank Goodness I Live in a Free Country
by Don Cooper
I was talking with some friends over the Christmas holiday break and they were commenting on how lucky we are that we live in a free country where we have the liberty and the opportunity to live our lives the way we want and are not controlled by the government like in other countries.
So I started thinking about a particular day of mine a couple months ago:
I woke up in the morning in my FHA (Federal Housing Administration) approved home that was built in accordance with USDOE (Department of Energy), FERC (Federal Energy Regulatory Commission), and numerous CFRs (Code of Federal Regulations).
I went to the bathroom to clean up for work. I showered with soap, shampoo and other toiletry products that have been approved for me by the FDA (Food and Drug Administration) using water that meets federal EPA (Environmental Protection Agency) quality standards.
I took my morning vitamins which had to be approved by the FDA.
I went downstairs to eat breakfast foods that had to be approved by the FDA and listened to my morning radio programs which are regulated by the FCC (Federal Communication Commission).
I then got into my EPA and DOT (Dept. of Transportation) standards approved and FTC (Federal Trade Commission) regulated car and was forced by the NHTSA (National Highway Traffic Safety Administration) to buckle my seatbelt and put my daughter into an approved child seat. I then drove on DOT regulated roads and was forced to drive a certain speed while listening to more FCC approved programming on my radio.
I stopped for gas but there wasn’t any due to state legislated gas quality restrictions which caused a decrease in the supply of gas and also gasoline price controls that kept the price so artificially low that there was an excess demand such that it sold out as soon as it arrived.
I arrived at my DOL (Dept. of Labor) regulated and EEOC (Equal Employment Opportunity Commission) sanctioned place of employment, running on fumes, and was forced to work the first 2 hours of my 8 hour shift for the federal and state governments by giving almost 30% of my wages to the IRS and SSA (Social Security Administration) with no compensation.
At lunchtime I went with colleagues to eat and was forced to pay with the only medium of exchange the government approves that is regulated by the FRB (Federal Reserve Board): worthless fiat bank notes.
I then went to pick up my daughter from school where she’s learning a DOE (Dept. of Education) approved curriculum. I took her to an HMO (Health Maintenance Organization) approved doctor to get her HHS (Health and Human Services) mandated vaccinations that I learned she needed while watching a Disney family movie which was interrupted by an HHS PSA.
After returning to work I checked my SEC (Securities and Exchange Commission) and IRS regulated investments in my now Federal Treasury owned banks to see if I’ll be able to retire someday since the SSA trust fund that I’ve been paying into for 25 years has been raided by the federal government and is now bankrupt.
That afternoon I had to catch a flight to our office in Detroit aboard an FAA (Federal Aviation Administration) approved plane operating at an FAA regulated airport.
Before boarding I had to pass through a TSA (Transportation Safety Administration) security checkpoint where I was forced to disrobe down to my shirt, pants and socks and pass through a scanning machine that saw right through my remaining clothing.
Onboard I noticed federal sky marshals with weapons so I decided to have a cocktail composed of liquor that is controlled by the ATF (Alcohol Tobacco and Firearms), as are the sky marshal’s guns.
Once sufficiently sedated with bourbon, I sat back and relaxed and thought to myself: Thank God I don’t live in a country where the government controls your life!
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