The Democratic Donkey Ride Down to the Bottom

If the fiscal cliff is a ditch, the national debt is the Grand Canyon. We are riding the Democratic Party donkey all the way to the bottom and they have no mandate, or desire, to balance the budget. The economic zombie apocalypse is waiting for us there, and they won’t be passing out granola bars.

The GOP has to come together to decide, overwhelmingly, that we must balance the budget. The problem is that the majority of those in the GOP apparently do not see the debt as the top priority. They will pick-up right where they left off before the election and avoid the elephant in the room. And we will all go down together.

They have actually joined with the Democrats in voicing their “horror” over the prospect of forced budget cuts via sequestration. God forbid both sides cut anything. Even if the “devastating” sequestration cuts go through, it won’t even touch the 16+ trillion-dollar debt.

We have been played; very skillfully I must say, by the ruling Democratic Party elite. They have set us up specifically NOT to balance the budget – or even really debate it in a meaningful way. They did this, not in Karate fashion – it was more Aikido fashion. Instead of punching the GOP, they simply invited the GOP’s punches and directed the elephant to the ground. They used the GOP’s own willingness to expand the scope of federal government and depth of the national debt via the Patriot Act, increased military spending, no child left behind, Medicare Part D and the 2008 bailouts. In that respect, the GOP joined with the Democrats in expanding government spending and reach.

They realized two very important points. First, the GOP would not push for a balanced budget because they would have to offer up military spending cuts and they would be afraid that would anger the voters. Second, the Democrats knew that as long as the Dems continued to increase voter dependency on government programs, they would be assured a majority voting block as that dependency was already approaching 50%, all without having to even address the debt. The Democratic strategists knew there was one additional reality about their long-time foe that would guarantee that everything would come together.

The icing on the cake for them was their knowledge that the GOP was stuck in their own antiquated, failed, inter-party battle between moderates and conservatives. Why was this perfect? Because one thing the moderates and conservatives shared, while they debated over the social platform, was their love for military spending. No matter which candidate rose to the top, they knew the trap was set, and no meaningful balanced budget debate would occur. And why was that so important? Because the only thing that could derail their entire plan would be for the GOP to embrace the KEY ISSUE by merging with the Tea Party and Libertarians with their balanced budget, small government passion. That would capture a much wider base and push them over the top – with a mandate to actually balance the budget once in office.

But that didn’t happen. The Democrats knew the GOP would not open the party to that opportunity. Their prediction was confirmed during the Republican National Convention. They knew the GOP was too entrenched, too full of pride. And they were correct. And now the Dems can lead us to increased collectivism – or worse.

So what is the solution, if we are so fortunate to even have a two-party option in 2014 and 2016? The GOP needs to move away from the moderate-conservative debate and move toward the conservative-libertarian/Tea Party debate, which means having all those extra votes in the room with them. The new debate must squarely focus on balancing the budget, and thus necessarily reducing the scope of government as the critical point of focus. Yes, that will lead to discussing military spending. Fortunately, like all inefficiently run government programs, there is plenty of waste that this new alliance can agree upon and target. Who knows, maybe they can actually find a way to save billions of dollars (e.g., requiring countries like Germany to pay for their own border defense) while at the same time actually shore-up one of the most dangerous international borders in the world – the U.S./Mexico border. Defense spending is different from military spending. That distinction provides lots of room for negotiation.

At least the new alliance will be on the same page about something that actually matters – the greatest threat to our national security and the greatest threat to the survival of Democratic Party dominance – the national debt.

Given that even the magnificent Obama machine still left 40% of Americans at home, not voting on election night, I have hope some of those will join us.

Originally Published on ClashDaily.com

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Surest Roads to Sovereign Suicide

Here’s a quick quiz. Which of the following is the biggest threat to our national security, according to Admiral Mike Mullin, (former) Chairman of the Joint Chiefs of Staff?

  1. Iran
  2. al-Qaeda
  3. Taliban
  4. Our national debt

The correct answer is “D.” Admiral Mullin said, “”Our national debt is our biggest national security threat” on June the 24th, 2010 during a speech he made at a “Tribute to the Troops” breakfast. Does that alarm you? Can you ever remember a top military mind saying something like that?

Here’s another quiz. If you were our enemy planning the demise of the U.S., which of the following would be the best strategy:

  1. Institute economic policies that may appear to help in the short-term but actually involve tremendous risk of leading to an economic event even worse than the 2008 housing-bubble collapse.
  2. Engage in expensive foreign policy strategies that lead to fanning-the-flames of hatred for the U.S., do nothing to actually lead to actual democracy but embolden Islamic extremists to further organize and act-out.
  3. Go to war in the Middle East against an enemy that has allies capable of further destabilizing the U.S. economy.
  4. Place the final decision-making authority of the above in the hands of one or two men, rather than the Congress, at a time when the Congress is not in session.
  5. All of the Above.

The correct answer is “E. All of the Above.”

It is important to search for some answers to these complicated issues. Below are a few of the explanations I have found to be particularly enlightening. Please feel free to add some of your own.

QE3 won’t go to decreasing unemployment. Look just about anywhere on the web, there is a tremendous amount of negative response to the Fed’s decision to move to QE3. For example, Peter Schiff, from the Schiff Report, explains how the Fed’s recent plan to print money, decrease interest rates, and purchase mortgage-backed securities is what got us here in the first place and will be “the final nail in the U.S. dollar” and “a day that will live in infamy.”  Another great explanation is from Reason.com’s Anthony Randazzo. He said, “The fact that QE promotes activities that led to the housing bubble should have stopped its progression as an idea a long time ago, especially since these problems are greater than any gain that would come from this now perpetual pace of money creation.”

The move to Audit the Fed is gaining some steam as more co-sponsors in the Senate are adding their names to Senate Bill 202. As of Sunday evening, there are 32 co-sponsors. If you are interested in joining the cause, you can visit Audit the Fed.

Caroline Glick helps to answer the question posed by Secretary of State Hillary Clinton following the Benghazi attack. Clinton pondered, “Today, many Americans are asking – indeed, I asked myself – how could this happen? How could this happen in a country we helped liberate, in a city we helped save from destruction?” Glick explains how our government, “determined – based on nothing – that the masses of the Muslim world from Gaza to Iraq to Afghanistan and beyond were simply Jeffersonian democrats living under the jackboot. If freed from tyranny, they would become liberal democrats nearly indistinguishable from regular Americans.”

 Pat Buchanan provided a cost-benefit analysis of our involvement in the Middle East in his recent article, Is It Time To Come Home? He notes that, “In this brief century alone, we have fought the two longest wars in our history there, put our full moral authority behind an “Arab Spring” that brought down allies in Tunisia, Egypt and Yemen, and provided the air power that saved Benghazi and brought down Moammar Gadhafi… The cost of our two wars is 6,500 dead, 40,000 wounded and $2 trillion piled onto a national debt that is $16 trillion, larger than the entire U.S. economy. And what in heaven’s name do we have to show for it?”

As Julian Pecquet wrote, Defense Secretary Leon Paneta acknowledged plans to position troops in as many as 18 different locations and expressed concern that extremists would strike, “from positions of weakness,” due to the void left by the fall of dictators in the Middle East. He argued that even with damaging the al-Qaeda leadership, “We always knew that we would have to continue to confront elements of extremism elsewhere as well.” My question is, why, for how long, at what cost, and to what end?

Finally, there is a very well made video (see below) explaining the history of making the war decision and how Congress has increasingly bowed-out and left it to the Executive branch. In the intro, Nick Gillespie wrote, “As deadly and violent attacks on American embassies and consulates in Libya, Egypt, and elsewhere multiply in the Middle East, it’s vitally important to remember that foreign policy decisions – especially acts of war – are not supposed to be the province of one man.”

 As for fighting a war with Iran, the thought of the economic war options China and Russia bring to the table is frightening and should give us pause and even more reason to demand that our politicians get our country’s debt problem in order and stop allowing the Fed to devalue our own currency.

Originally Published on ClashDaily.com

Don’t Worry About the Debt

I had a friend over the other day. He asked me, “Hey G.C., are you worried about the national debt?” I told him, I was not. Right now the debt has not really hurt me, so why worry? “But what about when it does hurt us?” Well, old boy, at that point, what will I be able to do about it that the leaders of this fine country haven’t been able to do?

He continues, “Some are talking about the LIBOR scandal, debt-to GDP being dangerously high, coming austerity, and the need to audit the FED.”

Look, I can’t worry about all of that economic lingo. I can’t fix that myself. Hell, I can’t even understand it and if I did, I doubt Congress will do anything about it anyway.

“So what do you focus on?”

I focus on the obvious invasions to our personal liberty like that damn Chick-fil-A thing, guns rights, Obamacare, and the daily things Obama says to manipulate his base. Things I can understand, maybe have a say, and pressure Congress to fix.

“How do you do that?”

I educate myself. The Internet…YouTube…political sites. Then, you see, you get a big group together and overwhelm Congress with your outrage.

“How does that work?”

I am a student of psychology. All creatures are slaves to reinforcement. We indulge on what we like because it feels good, even if it is not good for us. That is why we smoke – cancer is in the distant future. That’s why we eat bad food – heart disease is in the distant future. The positive reinforcement outweighs the delayed punishment. Punishment has to be immediate and severe or it can’t compete. That is why addicts don’t seek help until it has all gone to hell.

“What does that have to do with Congress?”

Don’t you see? They are slaves to this as well. They are rewarded by going with the flow up there, and by not making waves they avoid anxiety. The only thing they worry about is being punished by the overwhelming, organized voice of their constituents. That is why they stopped the Internet privacy thing and why they took the 2010 midterms.

“Don’t you think the Conservatives up there get that?” “I mean, they talk about it all the time…They know they will be punished…What’s the point of continually yelling about the obvious stuff?”

Others need to be convinced as well. I am sure all the people that are convinced to vote for Obama are open to reason if we just keep yelling and yelling at them. Maybe we can change the Left.

“Really, does that work?”

No, but it seems to feel very good when I can vent it out.

“So if I understand you correctly, you focus on the obvious invasions to individual liberty, educate yourself, get others to voice your concerns, those concerns are well known by Conservatives in Congress, and they know they will be punished if they don’t do something about it.”

Exactly!

“But you won’t focus on the debt because you don’t have the capacity to understand it, haven’t organized others to challenge the Conservatives, and they will avoid it because there is no fear of constituent reprisal. They won’t have to confront the anxiety of making difficult choices or jeopardizing the positive reinforcers they are receiving because there are no immediate or severe consequences.”

Look, I am an American. We are supposed to be in debt. Everyone is in debt that I know. We all have more going out than coming in. That is what credit is all about. If we didn’t buy on credit, there would be a lot more businesses hurting. They rely on us being in debt. That is why the banks need us. They make money off of us needing debt. If we didn’t go into debt, the bankers would be worse off. They couldn’t loan us money for things. That is why we don’t make any money when we try to save. The banks don’t like it when we save. Our country runs on debt.

“But what happens when you are in too much debt… don’t you go broke and have to declare bankruptcy?”

True, but I try not to let it get that far, and hopefully the Government won’t either. I still spend like I want. I have to, to enjoy life a little because all this stress about the country gets to you. You have to have the nice things, the expensive things, to feel good, to impress others, to appease others, gosh to even deal with life.

“But if you don’t save some, you won’t be able to retire in your old age…what about your health in old age, or leaving something for your kids if you don’t have money saved?”

What am I retiring to? The way things are going, I don’t even know if Social Security or Medicare will be around so I can barely scrape by. I am not old yet. I am not sick yet. I am not thinking about my kids. I have not been punished enough yet.

“So you are a slave to reinforcement as well. Spending more than you bring in, avoiding individual austerity now, staying distracted to avoid anxiety, and counting on the Government to be there for you when you get old so you can be a slave to the very thing you hate, assuming it is still even around. Is that not the greatest jeopardy to individual liberty?”

Quite right my friend, but I would be a hypocrite to whine about the Government doing the same thing. I will wait until the country is punished severely for ignoring the debt, like everyone else.

“You’ve been messing with me, haven’t you?”

Yes, but that doesn’t change the fact that I may be a hypocrite.

Originally Published on ClashDaily.com

B of A: $69 Billion, 0% Interest

Remember the bailout? Want to throw-up all over again? The FDIC recently released the breakdown of the $618 Billion+ payouts.

From Bob English at EconomicPolicyJournal.com, Bank of America received “a total of 1,352 issues totaling $69,205,303,031” at 0% interest. He noted that, “While several other institutions were able to take advantage of 0% rates on a portion of their debt funding (including Citibank, General Electric Capital, Goldman Sachs Group and HSBC), only Merrill Lynch & Co. was able to finance nearly all of its $19,786,359,000 in debt issued at 0%.”

And who was the big winner? “Preliminary analysis reveals it is General Electric (GE) Capital, with 4,328 issues totaling $130,850,166,935.”

 Think this is shocking? Just wait until we finally get a look at the Fed’s books, hopefully after the election. Time to read-up on Economics theory.

Read on to see “Who Got How Much.”

You can also visit the FDIC site for the actual source spreadsheet and the issuance interest rates.

Originally Published on ClashDaily.com

 

Workers of America, Unite! (In Philadelphia, August the 11th)

On August 11th in Philadelphia, union members from all over the nation will reveal “America’s Second Bill of Rights.” They have a purpose; “to counter those forces preaching austerity” by exerting pressure on both parties prior to the national conventions.

In a memo to national and international union presidents, AFL-CIO president Richard Trumka is, “encouraging union members and leaders to engage in policy discussions around the convention committees, including the Platform, Rules and Credential Committees.”

They should have less competition and distractions while they work their magic if the Dems follow Pelosi’s advice to stay home and campaign.

The Workers Stand for America site outlines their Second Bill of Rights:

  • The Right to Full Employment and a Living Wage
  • The Right to Full Participation in the Electoral Process
  • The Right to a Voice at Work
  • The Right to Quality Education
  • The Right to a Secure, Healthy Future

Curiously absent were; The Right to a Hot Mate, and The Right to Eternal Bliss in An Afterlife of Your Own Choosing.

Workers Stand for America noted FDR’s “Economic Bill of Rights,” presented during his State of the Union in 1944, was their inspiration: he laid out his vision for a postwar America, “where every American would be entitled to decent work, education, medical care and retirement security.”

 I think most of America would agree that the “Rights” proposed would be great general “Goals” for our country. There is a difference.

F.A. Hayek noted that though two men might exhibit equal effort, skill, and knowledge, “one may be a success and the other a failure” because in a free society it is the “use of particular opportunities” that determines usefulness. When living freely, payment is not to be expected because of the skill we’ve learned but rather by choices of individuals, “our skill for using it rightly.” We are not entitled to any particular position simply due to our talents. To claim that, “would mean that some agency has the right and power to place men in particular positions according to its judgment.” FDR himself proposed to exert just such a power. He recommended to Congress the adoption of a “National Service Law” that, “for the duration of the war, will prevent strikes, and, with certain appropriate exceptions, will make available for war production or any other essential services every able-bodied adult in this nation.”

 The All-Providing Government feeds you, clothes you, then owns you (and may not let the unions strike).

As Hayek continues, “All that a free society has to offer is an opportunity of searching for a suitable position, with all the attendant risk and uncertainty which such a search for a market for one’s gifts must involve.” This founding principle of our country does not mean freedom will be easy, and many resent that.

Regarding the other proposed “Rights.” The right to full participation in the electoral process is already guaranteed to all U.S. citizens. There is a catch, however, you must actually be a U.S. Citizen.

The right to a voice at work sounds fine, unless that is code for preventing their voices to be heard when they vote freely to not be coerced by a union they don’t want to join.

They propose the right to a quality and “affordable” education from pre-kindergarten through college. Our educational system is a failure. Now we are going to make it even more “affordable” and higher “quality” somehow by expanding government involvement in the process?

And finally, they propose the right to Obamacare and perpetual entitlements for all; “the right to a baseline level of health care, unemployment insurance, and retirement security” as well as confronting, “inadequate pension plans.”

There are some things we can agree on. Our economy sucks, things are bad, and there is no real end in sight. Our country would be stronger if we were all employed, making good wages, voting legally, having a voice at work, able to afford and obtain a quality education (if you want one), and being healthy and able to retire. FDR had a great quote (displayed on the Workers Stand for America site), “True individual freedom cannot exist without economic security and independence.”

 My question is, when in the history of humanity, have people become more free and independent, when they became increasingly more dependent on a government that is going broke?

In closing, I do have my own proposal for a “Second Bill of Rights:”

  • The Right to Expect That Congress Reads All Bills Before Voting
  • The Right to Re-read the First Bill of Rights Until It Sinks In

Feel free to offer other suggestions to add to my list – it is your right.

The Hayek quotes come from, F.A. Hayek’s chapter “Responsibility and Freedom” found in, The Constitution of Liberty: The Definitive Edition.

Originally Published on ClashDaily.com

 

Hayek, Like High Explosives

For those of you not as down with the deep economic discourse, this great little video is just the ticket. If economics was this fun in college, I may not have slept thru it.

See more from the fine folks at EconStories.tv

Originally Published on ClashDaily.com