Tuesday, January 31, 2012
The Housing Collapse
The next time you hear folks blaming the housing crisis on a lack of regulation and those evil Republicans, please refer them to this short 4 minute video that should add a little perspective to the discussion.
Sunday, January 29, 2012
Why We Are Totally Finished
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| Image by Juliano Mattos via Flickr |
In A Nutshell: Corporatocracy Has Replaced Capitalism
Capitalism Fixes Problems & Preserves Democracy: Capitalism is what we should be relying on to fix our problems. Capitalism has it's own ecosystem, just like biology's ecosystem. An economic ecosystem that weeds out the weak, has parasites that eat the failures and new bacteria that evolves and grows replacements for that which failed. A system that keeps everything in balance.
The problem is we are no longer a capitalistic society. What we were taught in school is now utter and absolute nonsense. Capitalism is a thing of the past.
As outlined in "It's Not A Financial Crisis - It's A Stupidity Crisis", we created two back to back bubbles. The air out of the Tech Bubble was sucked up for fuel by our next stupidity crisis: The Housing Bubble.
Now, after the second Stupidity Crisis there isn't a third bubble to inflate. If we still lived in a capitalistic environment the banks and financial institutions that created loans for folks who should have remained renters and then sold those loans as investments to pensions and countries would have been cleansed by capitalism's ecosystem.
But that isn't what happened.
In a very anti-capitalistic move the government decided that stupidity and criminal activity should be rewarded. I'd say they took our money, but it is worse, we didn't have that much money. So they borrowed the money in our name. The loan has a variable rate. They borrowed so much money that our kids cosigned the loan. In fact, our kid's future kid's signed on the dotted line.
That is unequivocally immoral.
They gave that borrowed money to a bunch of morons as a reward for stupidity. Morons who created subprime loans, liar loans, no income no documentation loans and other fraudulent instruments. Morons bundled that trash, got it rated AAA and then sold these turds or weapons of mass destruction that they had the audacity to name complex financial instruments or derivatives to pension funds, countries and other "investors".
Then it all blew up.
Big surprise.
For blowing up the world's economy this Stupidity Crisis was falsely named an Economic Crisis by CNBS and 535 morons on a hill in DC (Ron Paul and a few other fiscally responsible adults excluded). The idiots who created the mess were rewarded with a 700 billion dollar "bailout". This "bailout" was anything but a bailout and had a price tag of anything but 700 billion. The actual price tag is closer to 11 trillion and puts us on the hook for another 13-17 trillion - not counting interest.
Click image to enlarge.
Think about that for a second. This stupidity crisis is the equivalent of our Federal Debt which took a generations of politicians over a hundred years to wrack-up.
For anyone who still believes we live in a free country where capitalism reigns please show me one economic textbook which states that failure, and fraud get rewarded with borrowed taxpayer money. For anyone who believes we live in a democracy please show me a textbook that says the government will en-debt you and your kids and their kids to pay for a failed business. How is that democratic?
"Law of Morons": Years ago, while serving on a committee I came to a sad realization. Like gravity, there is the another invisible force which I dubbed "The Law of Morons". Put a group of very intelligent, well meaning people in a room together, put them on a committee or some governmental body that is devoid of guiding principles or merit-based decision making and "The Law of Morons" will prevail. The collective IQ will drop to the smallest shoe size in the room. And hope for loafers, because collectively this body won't be able to tie anything together - not even a single shoelace.
Government Creates Problems: Basically our government is comprised of many well meaning intelligent people who for whatever reason, re-election, greed the "Law of Morons", corporate puppet strings (read: lobbyist), self interest, corporatocracy or whatever else, do nothing but create massive problems. Lack of regulation, too much regulation.
And without any uncertainty --- too much DEBT along with a deficit that will NEVER be paid.
They have failed us.
Terribly!
With debt and a failed capitalistic society our democracy is now at risk. Serious risk.
A democratic society requires a stable and effectively functioning economy. I trust that we and our successors at the Federal Reserve will be important contributors to that end.~ Alan Greenspan
Serious irony there unless he was talking about the end of a democratic society. Greenspan was primarily responsible for muzzling Brooksley Born's attempt to regulate derivatives.
Our deficit requires that we counterfeit "money" to service our debt payments.
Forget about GDP, it is a bogus measure cooked by the BEA (US Bureau of Economic Analysis) . GDP is so baked that it makes the folks who cooked Enron's books look like saints. Let's focus on what we take in and what we pay out. We take in about 2 trillion in taxes and other revenues. We borrow about 2 trillion of which about 1 trillion must be taken off for debt service, and we spend well over 4 trillion.
To deal with the 1.6 trillion ++ shortfall we just print/counterfeit it. This debases the value of every dollar we hold, stealing wealth from every hard working American. It causes the need for more dollars to be injected into the system, which increases the amount of taxes that Americans pay.
There are only two crimes listed in our Constitution: Treason and counterfeiting.
"Solutions Create More Problems" ~ Al Bartlett (Worked on the Manhattan Project).
Another asked, "Is there any intelligent life on earth to change our future to a sustainable one?"
Dr. Bartlett replied, "Is there any intelligent life in Washington, DC is the bigger question?"
We Have a Corporatocracy: Not capitalism.
Corporatocracy: A government that serves the interest of, and may de facto be run by corporations.
Some states have government workers who have powerful unions that influence the government's decisions. California has a massive pension mess, created in large part by government unions and elected officials who have catered to these unions.
"Too Big To Fail" is living proof that capitalism is dead. These TBTF institutions that blew up the economy in 2008 with their stupidity crisis, at the very least deserved to fail. They blew it. That is the definition of capitalism. You do well you are rewarded, you screw up you close shop. You commit fraud and you do time.
But with a Corporatocracy you have Hank Paulson - a former Goldman Sachs CEO worth about 700 million dollars who winds up becoming our past Secretary of the Treasury. There is a serious distinction between a civil servant and someone who serves a corporation, especially the last corporation he worked for. His salary was only six figures, but his benefit was that he got to cash out of his stocks and pay no taxes. He gave the morons who blew up the economy 700 billion dollars. He had another former Goldman Sachs employee disperse the funds while the current CEO of Goldman Sachs professed to be "Doing God's work."
The movie "The Corporation" can be viewed at NetFlix or online with Hulu.
In Summary: Our debt and our inability to revive capitalism and cut the waste in government will be our demise. Sadly, the only glimmer of hope I see is that Corporatocracy will destroy itself. I say sadly because it will destroy the average American citizen like some parasite that kills it's host.
Capitalism is dead and that is why we are totally screwed.
D Sherman OkstCentral Virginia, USAdavos @ psychopathiceconomics.com
http://www.psychopathiceconomics.com/
Friday, January 27, 2012
They Thought They Were Free
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| Image via Wikipedia |
Among the many books written on Germany after the collapse of Hitler's Thousand Year Reich, this book by Milton Mayer is one of the most readable and most enlightening.”—Hans Kohn, New York Times Book Review
An excerpt from
They Thought They Were Free
The Germans, 1933-45
Milton Mayer
"What no one seemed to notice was the ever widening gap between the government and the people. And it became always wider...the whole process of its coming into being, was above all diverting, it provided an excuse not to think...for people who did not want to think anyway gave us some dreadful, fundamental things to think about...and kept us so busy with continuous changes and 'crises' and so fascinated...by the machinations of the 'national enemies,' without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us...
"Each step was so small, so inconsequential, so well explained or, on occasion, 'regretted,' that unless one understood what the whole thing was in principle, what all these 'little measures'...must some day lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing...Each act is worse than the last, but only a little worse. You wait for the next and the next.
"You wait for one great shocking occasion, thinking that others, when such a shock comes, will join you in resisting somehow. You don't want to act, or even talk, alone...you don't want to 'go out of your way to make trouble.' But the one great shocking occasion, when tens or hundreds or thousands will join with you, never comes.
"That's the difficulty. The forms are all there, all untouched, all reassuring, the houses, the shops, the jobs, the mealtimes, the visits, the concerts, the cinema, the holidays. But the spirit, which you never noticed because you made the lifelong mistake of identifying it with the forms, is changed. Now you live in a world of hate and fear, and the people who hate and fear do not even know it themselves, when everyone is transformed, no one is transformed.
"You have accepted things you would not have accepted five years ago, a year ago, things your father...could never have imagined."
Wednesday, January 25, 2012
It's Raining Coin
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| Image via Wikipedia |
Tim Nerenz wrote this piece. He is a businessman, libertarian writer and speaker, published academic, and former LP candidate for U.S. House of Representatives. His “Moment Of Clarity” is a weekly commentary that is always worth a read. Visit Tim’s website www.timnerenz.com to find your moment and order Tim’s new book, “BRING IT!”.
It's Raining Coin
Like most other “rich” people, I slept in this morning; rolled out from under the spun-gold sheets at the crack of noon, showered in Evian and went outside to fill up my humungous money bucket with the golden coins that fall out of the sky on people like me.
No, no really – that’s where it comes from, don’t you know. The raining of the coin doesn’t happen everywhere, as it would be silly of us who already got ours let the middle class siphon off any of the loot. You have to watch Fox News and know the secret code words to learn where and when the Koch brothers are going to make the next drop. There’s an app for that, too.
They teach us all about this stuff in that secret rich white boy’s school – how to steal the poor people’s buckets and rig the game so we are always first in line when prosperity rains. That way there is nothing left for the working class and they all have to go on food stamps so we can belittle them, just like Juan Williams said…
Sadly, it is necessary to tell some people now that this is satire. For the record, there is no secret rich boy’s school and wealth doesn’t really fall out of the sky - you have to earn it. Sorry to burst your bubble, lefties.
Actually, I don’t even know if I am rich or not – certainly better off than I ever dreamed possible growing up in my little mining town, and super-rich in all the really important ways that don’t involve counting up money. When the Democrats start the drumbeat for more taxes on the rich, sometimes the line is as low as $106,000 and sometimes it is $250,000 and sometimes you have to be a millionaire or billionaire.
I guess it doesn’t really matter; it is one of those questions of which came first - the chicken or the chicken-tax.
The President just gave his State of the Labor Unions address (yawn) and announced that taxing the rich (yawn) will be the backbone of his new plan (yawn) to build the economy. Funny, since he just decided we wouldn’t be building pipelines, power plants, drill rigs, Gibson guitars, planes in South Carolina, or cars that people actually want to buy. I guess the economy is something else.
And incidentally, I think that Republican congressman who boycotted the President’s speech was as wrong as the Wisconsin state senators that fled to Illinois. Until the day the next President is inaugurated, President Obama is everyone’s President, and we all have jobs with stuff we don’t like to do. But I digress…
Just in case there is one liberal somewhere whose brain is not bolted down to the deck of the U.S.S. Economic Suicide, let me try one more time to explain why increasing tax rates on the rich is a really bad idea, even though it might feel good to think they won’t miss a couple scoops out of their rain-money buckets.
The Wall Street Journal did a recent piece on a 2007 Congressional Budget Office analysis of tax burdens – a CBO which was under the control of Nancy Pelosi’s Democrats at the time. Nancy doesn’t bring up this particular tax study very often.
CBO found that the average total tax rate of the top 1% was slightly less than 30% of their income, while the middle class paid an average tax rate of 15%, and poor people (bottom 20%) paid just under 5%. It turns out that the rich indeed do not pay their fair share of taxes; they pay nearly twicetheir fair share.
And if we raise the top marginal tax rates on the rich – as Democrats like Mr. Obama and Ms. Pelosi propose - it will increase the tax burden on the middle class. That is not economic theory, it is economic history.
In the 1970’s, when the top marginal tax rate on individuals was 70%, the top 1% paid 19% of all taxes collected, while the rest of us paid 81%. Today, with the top marginal rate reduced to 35%, the wealthiest 1% pay 40% of all taxes and the rest of us now pay only 60%. Trickle up economics.
Imagine if it were the middle class who earned 28% of all the income and paid 40% of all the taxes – would Krugman and Reich be clamoring for tax increases on teachers and firefighters? Would Buffet’s secretary come forward and volunteer to pay more? What would the protesters occupy, an Applebee’s?
The liberals tell us we must increase tax rates on the rich – they say to put them back up to the pre-Reagan rates that were “fair”. Ok, but if we do, taxes on the rest of us will go back up by 35% to make up for the shortfall in tax revenues. Been there, done that.
Why do higher tax rates produce less tax revenue? Because the rich quit earning taxable income when we take away more of what they earn – guys like Michael Moore make less movies (ok, wishful thinking, but you get the drift). Investment also dries up because half of the reward is no longer worth all of the risk. Investment is what creates jobs; we do not need less of it.
And for those who enjoy only a casual acquaintance with the obvious, this is not the only country where it rains money. The very rich can take their buckets to the Caymans, or Ireland, or Singapore or a dozen other places who would be thrilled to tax them at lower rates than we do. And 70% of zero is zero, whether you are a Keynesian, an Austrian, or Chicago School economist. Or just from Chicago.
Last year the state of Illinois slapped a 67% increase on tax rates for wealthy individuals – the Obama/Pelosi magic pill to cure budget deficits. But taxing the rich did not reduce their deficit; it made things predictably worse. Much worse.
$4.5 billion of unpaid bills sit past due, with another $4 billion coming due that can’t be paid – tax refunds, employee health insurance, invoices for road repair, things like that. The state is losing residents at a rate of one every 10 minutes. Hint: the poor and unemployed are not chief among them.
The President apparently doesn’t get back home much; or he is too busy blaming everyone else for his failures to bother about economics and home-state reality. “Tax the rich” is good chanting material, and that is what passes for deep thoughts these days.
If you want to bet your prosperity on Tooth Fairy Government doing any of that stuff the President promised you tonight, then put out your bucket and wait for it to start raining coin. As for me, I’m getting up early tomorrow and going to work.
Monday, January 23, 2012
The Ministry of Silly Walks
Neal Boortz is reporting on the proposal of our imperialist Federal leaders to implement a Reasonable Profits Board.
Could this be any more frightening? This is Atlas Shrugged stuff come to life!
The Democrats are out of ideas of ways that they can get their hands on the money of the producers in this nation. So they’ve dusted off their file cabinet, stuck their hands into the way-way back and come up with … a windfall profit tax on oil companies!
Six Democrats in the House, led by none other than moonbat Dennis Kucinich, want the federal government to establish as “Reasonable Profits Board.” The purpose of this board would be to control the profits of the evil oil companies.
Just remember that money earned in the private sector does not really belong to those who earn it. To liberals and proggies, that money belongs to the government and it is the government that decides how much of it you should be able to keep!
This Reasonable Profits Board would be made up of three presidential nominees, not approved by Congress. They would be able to impose a “windfall profit tax” as high as 100% on the sale of oil and gas. What is considered a “reasonable” profit? That is up for these arbitrary presidential nominees to decide.
Now as I’ve mentioned, the Democrats have come up with this idea before .. though the idea of this presidential panel is new. But a windfall profit … what is that? I’ve come up with a definition I’d like to share with you, since I’m sure that government schools don’t teach things like this. A windfall profit is money earned by a company that can be readily demagogued by a politician. It is money earned by a company on a commodity that consumers absolutely need but don’t like paying for.
You can read the rest of the story here.
In the meantime - I can't help but be reminded of this gem from Monty Python:
Sunday, January 22, 2012
Saturday, January 21, 2012
The Worst People In Politics Aren’t Racists
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| Image via Wikipedia |
When you hear someone touting a conspiracy theory in politics, you can safely discount it without paying much attention because 999 times out of 1000, there will be nothing to it. Sadly, we’ve gotten to the same point with cries of “racism” in politics. There’s almost never any validity to complaints about bigotry or racism and almost everyone who says otherwise is being deliberately dishonest.
The idea that the Republican Party of today is being compared to the Democrats of yesteryear who organized the KKK, encouraged the abortion of black children, and fought to keep black children from going to school has always been ridiculous on its face. Unlike the Democratic Party, the Republican Party was founded on fighting slavery and has nothing in its entire history, from its beginning to the present, to be ashamed of.
Even setting that aside, the idea that the Republican Party is racist is extraordinarily easy to refute. The only black man on the Supreme Court, Clarence Thomas, was put there by a Republican. The first black Secretary of State, Colin Powell, was given the job by a Republican, as was the first black woman to be a Secretary of State, Condi Rice. Herman Cain, for a time, was at the top of the polls in the GOP race for President, Michael Steele just served a term as RNC chairman, Allen West keynoted CPAC, Walter Williams fills in for Rush Limbaugh, and Thomas Sowell was voted the most liked person on the Right by conservative bloggers. The number of black Americans doing extremely well in the Republican Party, despite the tiny percentage of black Americans who vote Republican, blows the idea that Republicans are racist straight to hell.
So, if conservatives aren’t racist, why do we hear ever-present claims that they are despite overwhelming evidence to the contrary?
Simple. It’s pure politics.
Keep in mind that unlike the Republican Party, the Democratic Party has a long shameful record of backing everything from violence against blacks to eugenics. Even today, many of the policies the Democrats support have a racist component. Liberals think black Americans are incompetent; so they need Affirmative Action to help them compete with better qualified white Americans and liberal support for abortion is in part designed to keep down the number of black babies. Additionally, black Americans have suffered terribly since they started supporting the Democratic Party en masse. Support for the Democratic Party has been like one never-ending Katrina for black Americans.
So, with a record that bad, Democrats have to falsely convince black Americans that Republicans hate them. They do this by constantly making false accusations, for which they pay no price whatsoever. Worse yet, there are a lot of rewards for seeing a Klansman behind every bush. There are a number of people in the Democratic Party whose entire livelihood is centered around seeing racism where it doesn’t exist. As long as they keep doing it, they get paid. If they admit the truth, the attention and soon thereafter, the money, will stop flowing.
However, these smear jobs are bad for everybody involved. Many black Americans have been falsely convinced that they’re hated when nothing could be further from the truth, millions of white Americans are outraged that they’ve been maliciously accused of racism for political purposes, and the few real victims of racism out there are less likely to be taken seriously because 99% of all cries of racism in politics are phony.
In a real sense, people like James Clyburn, Al Sharpton, Jesse Jackson, Bill Maher, Michael Moore, Janeane Garofalo, Eugene Robinson, Maxine Waters, Juan Williams, Jimmy Carter, etc., etc. and the Southern Poverty Law Center are worse than the KKK, David Duke, or the American Nazi Party. The latter group are marginalized losers with no influence and no microphone, who are almost universally held in low esteem. On the other hand, liberals who falsely accuse people of being racists are often taken seriously, rewarded for making their slanderous accusations, and aren’t treated like pariahs — as they DESERVE to be. It’s like a modern day Salem witch hunt and the attitude is, sure we may falsely accuse a few million Americans to get one witch, but if it helps us politically, who cares what kind of damage it causes?
Wednesday, January 18, 2012
The U.S. is on a Suicide Watch
In 1991, the Soviet Union, arguably the greatest experiment
in Communism, collapsed. After Mao Zedong died in 1976, his successors moved to
shift its Communist economy to one that embraced Capitalism while retaining
centralized government control.
Following World War Two, the recovering nations of Europe were rescued from Communism by the Marshall Plan, but adopted Communism-Light in the form of Socialism. The U.S. was already headed in that direction, creating programs that we now call “entitlements.” For most of the nation’s history, such “entitlements” did not exist.
What binds together the financial problems of the West is the common thread of infantile behavior and thought. One might call it wishful thinking. Instead of encouraging people to provide for old age and possible illness, politicians decided to turn government into Big Daddy, the eternal source of money for everything.
Need to go to college, start a business, or plan for retirement? Government would be there to help. All this ignored the need to actually pay for these programs. In the case of Social Security Congress began to dip into its funding to pay for other programs! This is what children do.
One can look around the world and see what a failure both Communism and Socialism have been. Governments spending more than their tax and other revenues have suffered grievously from this path to default and that includes the United States of America. It can be argued that, with few exceptions--the Reagan years come to mind—Presidents have been poorly served by their economic advisors.
Politicians make poor economists because, in America, members of the House must think of getting reelected every two years and Senators every six. Moreover, being politicians, they believe that the more federal largess they can bring back to their State and then brag about is the one true path to reelection.
At the very beginning of the nation, Thomas Jefferson said it best. “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
How many commissions and special committees have earnestly produced reports intended to deal with a government grown too large? At the federal level, some two million or more Americans are employed promulgating a deluge of regulations and pushing paper.
Now President Obama says he wants to streamline the federal government.
The real issue is not “streamlining” government agencies by gathering them together under one roof and one administrator, but the failure to end government departments and agencies that no longer serve a useful purpose and whose removal would also remove countless obstacles to economic growth.
In April 2011, Wayne Crews of the Competitive Enterprise Institute warned that “the federal government is on track to spend more than $3.5 trillion this year. What most people don’t know is that government actually costs about 50% more than what it spends. That’s because complying with federal regulations costs an additional $1.75 trillion—nearly an eighth of GDP. And almost none of that cost appears on the budget.”
The United States of America, the greatest engine of wealth the world has ever seen, is bankrupt. The national debt exceeds the Gross Domestic Product, the sum total of all revenue generated by goods and services.
The President has asked that the debt ceiling be raised another trillion or so and Congress will comply. That, I submit, is insane.
I also submit that, since Barack Obama was sworn into office on January 20, 2009, the nation has been witness to the economic insanity personified in the man and in the Democrat-controlled Congress that was his partner until 2010 when the control of the House of Representatives was wrested away by the Tea Party movement and its support for Republican candidates.
The only constant in life is change. America’s demography has changed. We have, thanks to medical care and other advantages, a much older segment of the population than ever before, but the nation from the 1930s to the 1960s had committed itself to ensure they would have Medicare and Medicaid at a time when people more often than not died in their 50’s and 60’s. We now have an average life expectancy of 78 years. My parents lived into their 90s.
Politics, not economics, continues to make it impossible to revise and restructure both Medicare and Social Security to reflect this reality. Instead, we had Obamacare foisted upon us which took trillions from Medicare and imposes rules that will let elderly heart attack or stroke victims die rather than pay for a level of care to which they contributed during their working years.
If the Supreme Court declares Obamacare unconstitutional it will go away. If we elect a Republican Senate, the repeal already passed in the House will be passed and it will go away.
But America’s economic problems will not go away until Americans insist that the shackles of Big Government be cut loose to enable the growth of an energy industry that can not only make the nation energy independent, but produce billions in revenue as far as the eye can see into the future.
The tax system with its thousands of pages must be revised to a simpler, fairer program. It makes no sense that forty percent of Americans pay no taxes at all.
It’s not that we don’t know what must be done. Conservative think tanks like The Heritage Foundation, the Cato Institute, The Heartland Institute, the Competitive Enterprise Institute, and others have spelled out programs that can and will save America, but the nation must be led by a president who understands that Capitalism involves budgeting, planning, hard work, and—yes—risk.
The federal government is running on “continuing resolutions.” It has not had a formal budget since Obama arrived. This is no way to run the greatest nation on the face of the Earth. America is on a suicide watch and we are just an election away from saving it.
Following World War Two, the recovering nations of Europe were rescued from Communism by the Marshall Plan, but adopted Communism-Light in the form of Socialism. The U.S. was already headed in that direction, creating programs that we now call “entitlements.” For most of the nation’s history, such “entitlements” did not exist.
What binds together the financial problems of the West is the common thread of infantile behavior and thought. One might call it wishful thinking. Instead of encouraging people to provide for old age and possible illness, politicians decided to turn government into Big Daddy, the eternal source of money for everything.
Need to go to college, start a business, or plan for retirement? Government would be there to help. All this ignored the need to actually pay for these programs. In the case of Social Security Congress began to dip into its funding to pay for other programs! This is what children do.
One can look around the world and see what a failure both Communism and Socialism have been. Governments spending more than their tax and other revenues have suffered grievously from this path to default and that includes the United States of America. It can be argued that, with few exceptions--the Reagan years come to mind—Presidents have been poorly served by their economic advisors.
Politicians make poor economists because, in America, members of the House must think of getting reelected every two years and Senators every six. Moreover, being politicians, they believe that the more federal largess they can bring back to their State and then brag about is the one true path to reelection.
At the very beginning of the nation, Thomas Jefferson said it best. “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
How many commissions and special committees have earnestly produced reports intended to deal with a government grown too large? At the federal level, some two million or more Americans are employed promulgating a deluge of regulations and pushing paper.
Now President Obama says he wants to streamline the federal government.
The real issue is not “streamlining” government agencies by gathering them together under one roof and one administrator, but the failure to end government departments and agencies that no longer serve a useful purpose and whose removal would also remove countless obstacles to economic growth.
In April 2011, Wayne Crews of the Competitive Enterprise Institute warned that “the federal government is on track to spend more than $3.5 trillion this year. What most people don’t know is that government actually costs about 50% more than what it spends. That’s because complying with federal regulations costs an additional $1.75 trillion—nearly an eighth of GDP. And almost none of that cost appears on the budget.”
The United States of America, the greatest engine of wealth the world has ever seen, is bankrupt. The national debt exceeds the Gross Domestic Product, the sum total of all revenue generated by goods and services.
The President has asked that the debt ceiling be raised another trillion or so and Congress will comply. That, I submit, is insane.
I also submit that, since Barack Obama was sworn into office on January 20, 2009, the nation has been witness to the economic insanity personified in the man and in the Democrat-controlled Congress that was his partner until 2010 when the control of the House of Representatives was wrested away by the Tea Party movement and its support for Republican candidates.
The only constant in life is change. America’s demography has changed. We have, thanks to medical care and other advantages, a much older segment of the population than ever before, but the nation from the 1930s to the 1960s had committed itself to ensure they would have Medicare and Medicaid at a time when people more often than not died in their 50’s and 60’s. We now have an average life expectancy of 78 years. My parents lived into their 90s.
Politics, not economics, continues to make it impossible to revise and restructure both Medicare and Social Security to reflect this reality. Instead, we had Obamacare foisted upon us which took trillions from Medicare and imposes rules that will let elderly heart attack or stroke victims die rather than pay for a level of care to which they contributed during their working years.
If the Supreme Court declares Obamacare unconstitutional it will go away. If we elect a Republican Senate, the repeal already passed in the House will be passed and it will go away.
But America’s economic problems will not go away until Americans insist that the shackles of Big Government be cut loose to enable the growth of an energy industry that can not only make the nation energy independent, but produce billions in revenue as far as the eye can see into the future.
The tax system with its thousands of pages must be revised to a simpler, fairer program. It makes no sense that forty percent of Americans pay no taxes at all.
It’s not that we don’t know what must be done. Conservative think tanks like The Heritage Foundation, the Cato Institute, The Heartland Institute, the Competitive Enterprise Institute, and others have spelled out programs that can and will save America, but the nation must be led by a president who understands that Capitalism involves budgeting, planning, hard work, and—yes—risk.
The federal government is running on “continuing resolutions.” It has not had a formal budget since Obama arrived. This is no way to run the greatest nation on the face of the Earth. America is on a suicide watch and we are just an election away from saving it.
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