Tuesday, July 19, 2011
From Dan Ferris, Extreme Value:
Until June 30, investors were focused on what would happen in the wake of the end of the second installment of quantitative easing, the Federal Reserve’s eight-month, $600 billion, money-printing, Treasury bond-buying operation.
Luckily, not much happened after June 30. But now we find ourselves up against another big deadline: August 2. If Congress doesn’t raise the debt ceiling by August 2, big things will happen on August 3. The debt ceiling is a legally imposed limit on the amount of debt the U.S. government is allowed to have at one time. It can only be raised by a vote of Congress.
The last time it was raised was early 2010, when Congress voted on a ceiling of $14.294 trillion. That limit was reached two months ago. Since then, according to U.S. Treasury Secretary Tim Geithner, the government has avoided not paying its bills through “extraordinary measures” and “accounting maneuvers.” We’re told these measures and maneuvers will run out on August 2.
Without a debt ceiling increase by August 2, the government will wake up August 3 unable to pay approximately 44% of its bills for August. The overwhelming majority of those bills are simply disbursements of funds for government programs, without which this would be a richer, freer country. Interest on the national debt due in August is not a big item.
The hype surrounding the August 2 deadline is that the U.S. will “default” on its debt. I see it a little differently. It’s unlikely the U.S. will default on its debt on August 3. According to the Bipartisan Policy Center’s recent report, interest payments on Treasury securities total about $29 billion for the month of August, and the U.S. brings in about $173 billion a month. There’s no reason why the U.S. government should fail to make any of those payments in the month of August.
What about the $470 billion of debt the government has to roll over in the month of August alone? If it can’t borrow more to pay that off, won’t it default then? That’s obviously a bigger problem… But again, not as big as you might think.
The U.S. government has about $2.88 trillion of total assets. It appears to have about $1 trillion in cash, stocks, bonds, mortgage-backed securities, and other liquid assets it could use to pay off Treasury debt. If that takes us through the end of September, we’d be able to go another few months, running the total debt back up to the debt ceiling of $14.294 trillion.
In an April 4 letter to Congress, Geithner said selling assets “would undermine confidence in the U.S.” That’s like when a government says it won’t devalue its currency, or a company president says bankruptcy isn’t on the table. Bringing up the possibility of selling U.S. assets automatically refutes the assertion that you’re not thinking about doing it.
In the meantime, in the weeks and months that follow August 2, something unexpected would happen… something nobody in government wants you to know. You’d find out how much you don’t need the government.
For example, you’d find out that the Departments of Commerce, Energy, Interior, Agriculture, and a few others are completely unnecessary and a total waste of money. They’d spend only a couple hundred billion dollars out of a $3 trillion budget, but it would be a huge start on the way to showing you how unneccessary government is. Once that ball got rolling, it’d get harder and harder to stop.
That’s why Geithner is saying it would be a catastrophe not to raise the debt ceiling. And that’s why Fed Chairman Ben Bernanke says it would be calamitous. Komrade Obama says it would be “financial Armageddon.” They’re all trying to scare you, because they don’t want you to know that the big, strong government we all depend on so much is really a weakling you can easily live without.
I relish the possibility of huge swaths of our bloated, oppressive federal bureaucracy shutting down. Even more, I relish the prospect of hundreds of thousands of government employees, people with perfectly productive minds, some of them quite brilliant, making the change from parasites to producers, though I realize this is way too much to hope for.
I doubt this unleashing will take place.I doubt the voting public will stand for it. I’d like to believe we’re a nation of self-responsible, self-reliant adults. My fear is that we’ve become a nation of whining, dependent children. Unfortunately, the last thing most people want is to be responsible for everything they do, say, need, and want. Freedom means freedom from government assistance. Hardly anybody wants that. But a fella can dream…
Remember the unleashing of human potential that occurred in the U.S. in the wake of World War II, when all the soldiers came home? It would be similar to that, though it would involve fewer people. Over 4 million servicemen and women came home after WWII. If 44% of the federal government employees were out of work as of August 2, it would amount to roughly 880,000 new productive workers (according to the Bureau of Labor Statistics’ estimate of 2 million federal employees).
Many government employees are highly educated and highly trained. Many are experienced leaders, more than capable of feats of entrepreneurship. Frightened children like Bernanke and Geithner see scary monsters everywhere. Adults with vision and experience see opportunities.
Would there be disruptions to the economy if the government’s role in it was instantly reduced? Of course there would. Would that look ugly in the short term? You bet it would. But I doubt it would be as bad as everyone is trying to scare you into believing. Remember… it’s not you and me going broke here. It’s the government. And it should go broke. It is broke. It should be forced to shrink expenses, reduce debt, and sell assets. Would this be a bad thing in the long term? Absolutely not.
There are many good reasons to reduce the size and cost of government in the United States – and few good reasons to pretend the job can wait another minute.
We could be in for a rocky ride, but it’s hard for me to understand how 44% less government would be anything but an economic miracle.
Green Energy – America’s Lie
By Thomas D. Segel June 29, 2011
It is doubtful that if a truly honest person could be found, Americans would elect that individual to public office. We have historically managed to gather a collection of fork tongued intellectuals and slick talking con artists together into one large gang and allow them to run the country. You think not! Well it is not only in America. Liars have been running the governments of all nations since the days when Plato and Aristotle spoke on this human failing.
One of the biggest deceptions being voiced by our current Administration and its minions in Congress concerns the viability and practicality of Green Energy. Those who have already swallowed this government mythology have strongly bought into the idea that these multiple alternative energy sources will end our need for fossil fuels, clean up our environment, reduce costs and save the planet.
You have read in previous articles my rage about the government lies related to corn-based ethanol. It not only limits one of our main food sources, but also drives up the price on dozens of products from soda pop to plastics that utilize corn in their manufacture.
Farmers can grow and average of 7,110 pounds of corn per acre. This can be processed into 328 gallons of ethanol. That same corn requires 140 gallons of fossil fuel, which at today’s pump prices, would total more than $1200. Using that rationale, ethanol has already been heavily subsidized even before it is processed from the raw corn. During the processing there is only 8 percent extracted in the form of alcohol, with more energy expended to reach that point. An additional process is required to produce the 99.8 percent pure ethanol needed for mixing with gasoline. It requires 131,00 BTUs of energy to make one gallon of ethanol and that one-gallon only produces 77,000 BTUs of energy, or a loss of 54,000 BTUs of energy for each gallon of ethanol produced. It costs $1.74 per gallon to produce ethanol. 95 cents is the cost to produce a gallon of gasoline. On top of all this, the government is subsidizing ethanol to the tune of $1 billion a year. You do the math on the value of this green energy source.
Wind energy may be the closest we have come to reaching balance of cost vs. result. It too, has limited value. There just might be strong value in wind farms located in Deep South Texas. Most of the time there is wind blowing off the Gulf of Mexico. However, national studies have revealed that a utility company can only count of wind generated electricity for about 30% of its power. The remainder of the time wind is not blowing strong enough to yield satisfactory electrical output.
Since each turbine blade is more than 120 feet in length, the noise level of wind driven energy is severe. People who reside within a mile of a wind farm must suffer a continuing noise background and incorporate it into their daily lives. In reality it means wind farms must be located far away from population centers, thus increasing the cost of connecting them to the main grid.
“So”, you ask, “what about solar?” It has been touted as being silent and quietly operating every day. It has been praised for adding to the savings on electricity. It places no pollutants into the air or our overall environment.
My best example of solar folly can come right from my hometown of Harlingen, Texas. The city fathers have been elated at their newest contribution to green energy. Headlines in the daily newspaper read “Solar Panels Equal Savings for Harlingen. Just what are those savings?
Through the American Reinvestment Recovery Act, which many citizens refer to as “Porkqules”, the city received a grant of $645,100 to install 308 solar panels on a municipal building. According to City Commissioner Robert Leftwich, “This will save the city money in the long run and will create a more sustainable and economically responsible model.”
Well, the commissioner must have forgotten his calculator. By the city’s own estimates these panels will save the taxpayers $7,500 a year in energy costs.
If some quick math is undertaken it can be seen that in 25 years a savings of $187,500 will be realized by Harlingen. Since the project has a cost of more than $600,000, which already came out of taxpayer pocketbooks…and since the life span of a solar panel is only 25 years, the American public has taken another tax loss beating.
But, go ahead America; keep buying into the fraud of Green Energy. After all more than 40% of you are not putting any money into the operation of our nation.
It’s Time For Republicans to Speak Up!
Sowell: Rocky and Republicans
Rocky Marciano was the only heavyweight champion who never lost a single fight in his whole career– and, at the time, he seemed the least likely fighter to do that. In many a boxing match, he was battered, bruised and bleeding.
One of the reasons Marciano took so much punishment in the ring was that he had shorter arms than most other heavyweights. It was easier for others to hit him than for him to hit them.
In a sense, Republicans today are in a similar position in the political arena. With most of the media heavily tilted toward the Democrats, Republicans are going to get hit far more often than they are going to get in their own punches.
The difference is that Rocky Marciano understood from the beginning that he was going to get hit more often, and prepared himself for that kind of fight. His strategy was to concentrate on developing punches powerful enough to nullify his opponents’ greater number of punches.
Republicans take the opposite approach from that of Rocky Marciano– and often with opposite results. That may be why they managed to lose both houses of Congress and the White House in recent years, in a country where there are millions more people who call themselves conservatives than there are who call themselves liberals.
Knowing that they are going to get hit more often in the media, you might think that Republicans would put extra time and effort into developing a knockout message. In reality, however, Republicans seem to invest much less time and thought into getting their political message across than is done by the Democrats.
First of all, Democrats develop words and phrases that they all use, so that the public hears those same words and phrases over and over again, until they sink in. Republicans have nothing to match the Democrats’ catch phrases like “social justice” or “tax cuts for the rich.”
Back when George W. Bush first emerged on the national political scene in 2000, Democrats said that he lacked “gravitas.” The media kept repeating it. People who had never used the word “gravitas” in years were suddenly saying “gravitas” 24/7 on news programs, interview shows and in the newspapers and magazines.
When have you ever known the Republicans to be that coordinated?
Not only do Republicans fail to take the initiative when it comes to political rhetoric, they are not very good at counter-punching when they are hit.
How often have you heard “tax cuts for the rich” from Democrats– without the Republicans saying anything to counter the implication that they are just looking out for a relatively few wealthy people, while millions of other people are losing their jobs and their homes?
The facts are all on the Republicans’ side. But, unless someone articulates those facts, they will be like the proverbial tree that falls in an empty forest.
What are called “tax cuts for the rich” have been reductions in high tax rates under four different administrations, including the Democratic administration of John F. Kennedy. In each case, going all the way back to the 1920s, the reduced tax rates have led to increased tax revenues for the government.
“The rich” have ended up paying both a higher total amount of taxes and a larger share of all taxes than they did before what were called “tax cuts for the rich.” The reason is very straightforward: high tax rates that people don’t actually pay do not bring the government as much revenue as lower tax rates that they do pay.
High tax rates drive investors into tax shelters like tax-exempt bonds or drive their investments out of the country altogether, costing Americans jobs. This is not rocket science– and the data are there to prove it. But somebody has to say it.
Unlike Rocky Marciano, Republicans don’t seem to see a need to work on their punches. They are going to need some knockout punches if Barack Obama calls their bluff on raising the national debt limit, and there is a government shutdown that will be blamed on the Republicans. A few light jabs will not save them.
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Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com.
COPYRIGHT 2011 CREATORS.COM
U.S. Foreign Policy: Time To Check Our Premises
By Bradley Harrington
“Whenever you think that you are facing a contradiction, check your premises. You will find that one of them is wrong.” - Ayn Rand, Atlas Shrugged, 1957 -
If you’ve ever wondered about the world becoming a more dangerous place, and exactly how it is that it’s getting that way, a more eloquent example of it than what is currently happening in the Middle East could scarcely be found.
First, the Tunisians get fed up with their authoritarian government and stage a revolt. Then, similarly, the serfs of Egypt decide they’ve had enough of their despotism too: “‘Mubarak is a dictator. We want him overthrown. The time for reforms is passed. The people have had enough.’” (“Voices from Egypt,” The Ottawa Citizen, Jan. 29th.)
And our problems with this? A “moral conflict,” believe it or not: “As with Iran 30 years ago, American leaders again are wrestling with the moral conflict between Washington’s demands for democracy among its friends and strategic coziness with dictatorial regimes seen as key to stability in an increasingly complex world, particularly the Middle East.” (“Analysis: The U.S. moral conundrum in Egypt,” Associated Press, Jan. 31st.)
To which, several things come to mind:
(1) Observe that the goal of “Washington’s demands” is not the institution of limited-state, liberty-protecting forms of governments (i.e., capitalism) but “democracy” (i.e., mob rule) instead – and never the twain shall meet, for the former is based on individual rights and the latter is merely whatever the majority says it is.
What if the majority decides that it is best served by an Islamic fundamentalist theocracy, such as Iran’s? No problem here, apparently. Said regime of which is the aftermath of our previous meddling in the internal affairs of Middle Eastern countries in the first place – and which also happens to be the goal of the Muslim Brotherhood, Egypt’s largest opposition bloc, actually founded in Egypt in 1928.
So, on the one hand of the “moral conflict”: If the United States continues promoting “democracy” instead of capitalism, things aren’t going to be looking too good for liberty in Egypt; for the extent to which the Egyptian people’s desires for such a form of social organization are actually driving the current revolt is the extent to which those desires will soon be hijacked by a better-organized and sure-of-what-they-are-after group of theocratic fanatics. And what good can possibly come of that?
(2) And just what kind of “strategic coziness” is possible when the United States, the alleged defender of liberty, individualism and the Rights of Man, seeks to “stabilize” the region by supporting dictators?
These “stabilizations,” the other hand of the “moral conflict,” are the machinations that got us into this “conundrum” to begin with – and, to be fair to President Obama, are not something limited to his particular brand of foreign policy foolishness. It is an approach the United States has taken for several decades, where we have blown untold billions in foreign aid to prop up institutionalized thuggery.
But the entire “conundrum” is a sham, strictly the fallout resulting from our failure to properly check our foreign policy premises: In the real world, such contradictions do not exist. Were we to truly decide that the protection of Israel and the stability of the Middle East were our goals, we would simply tell the Arabs to keep their hands off – under threat of swift and total military reprisal. No meddling needed there; just some spine.
Instead of displaying such guts, however, the United States has chosen to play both ends against the middle instead – whereby we supply not only Israel with weapons and money, but her enemies as well. (!!) And then we stupidly wonder why everyone in the region hates our guts. This is the kind of contemptible hypocrisy one gets when one abandons principles and mixes one’s premises. And we seriously do not understand why the rule of the brute continues its advance? We’re actually paying for it!
What Tunisia, Egypt and all of the Middle East desperately need are the socio-political principles of capitalism – and the help of a world leader capable of articulating and advancing those principles successfully. Down that road, and no other, lies the future of freedom. But that is a strategy the United States itself rejected a number of years ago – and, in the absence of such principled intellectual leadership, don’t expect for things to bode any better for our “allies” than they’ve been boding for us.
Bradley Harrington is a former U.S. Marine and a writer who lives in Cheyenne, Wyoming; he blogs at www.timeforeverymantostir.blogspot.com
Glenn’s letter to the American people, politicians, and media
While Americans are grappling to understand the Arizona tragedy, the absolute vacuum of leadership on both sides is staggering.
We live in a country that has been struck by John Hinckley Jr. and Sirhan Sirhan, Lee Harvey Oswald and Mark David Chapman. And one that’s been hit by terrorists like Timothy McVeigh, the DC Sniper John Allen Muhammad, the Fort Hood killer Nidal Hasan, and 19 highjackers all claiming to be freedom fighters. You’d think we’d understand the difference between madmen and terrorists.
All evidence points to the fact that the assailant from this weekend was severely mentally disturbed. His belief system was not rational by any modern political standard. He was an atheist, believed George W. Bush was responsible for 9/11, feared a global currency, cited the Communist Manifesto as one of his favorite books and thought the Mars rover landing was staged. These are not the opinions of a coherent individual.
Far too often, we have seen in our schools and in our post offices, acts of violence from misfits of society. While we can look for the warning signs, these horrific events will always be with every nation.
Though violence is a human problem, every American citizen can make a personal choice today. Do you believe that Americans, from any walk of life, can convince themselves they are freedom fighters and carry out acts of violence? My answer is yes. If you agree then you must take a clear stand.
Turning these horrific events into an opportunity for a political attack is a very childish response to a very grown-up problem. This is not about winning a political blame game. Atheists are not to blame. Those who hate George W. Bush are not to blame. Those who don’t believe in space travel are not to blame. Jared Lee Loughner is to blame. Period.
This tragedy should not be used as an opportunity to try and bend reality to retroactively place a madman on the other side of the aisle. It should be a time to pray for the victims and their families, a time that we can all come together and state that violence is off limits for all sides in a Republic. It’s a time for us to state with a unified passion that we won’t accept anyone who threatens or actually carries out violence.
Denouncing violence from all sides including your own does not make your movement any less just. To quote Martin Luther King:
But there is something that I must say to my people, who stand on the warm threshold which leads into the palace of justice: In the process of gaining our rightful place, we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again, we must rise to the majestic heights of meeting physical force with soul force.
I challenge all Americans, left or right, regardless if you’re a politician, pundit, painter, priest, parishioner, poet or porn star to agree with all of the following.
- I denounce violence, regardless of ideological motivation.
- I denounce anyone, from the Left, the Right or middle, who believes physical violence is the answer to whatever they feel is wrong with our country.
- I denounce those who wish to tear down our system and rebuild it in their own image, whatever that image may be.
- I denounce those from the Left, the Right or middle, who call for riots and violence as an opportunity to bring down and reconstruct our system.
- I denounce violent threats and calls for the destruction of our system – regardless of their underlying ideology – whether they come from the Hutaree Militia or Frances Fox Piven.
- I hold those responsible for the violence, responsible for the violence. I denounce those who attempt to blame political opponents for the acts of madmen.
- I denounce those from the Left, the Right or middle that sees violence as a viable alternative to our long established system of change made within the constraints of our constitutional Republic.
I will stand with anyone willing to sign that pledge. Today I make a personal choice. I urge leaders of both sides and all walks of life to join me as all Americans joined hands on 9.12.2001.
I believe that we must change ourselves to hold on to our republic. That’s why I have been talking about e4. Enlightenment. Education. Empowerment. Entrepreneurship. It’s a personal solution for all of us to become the people we were born to be, not the people we’ve allowed ourselves to become. I have called for a personal revolution; change ourselves in order to change the world. Those who live with honor and are responsible to themselves and their families will be the key to the future of our Republic, not those playing political games.
While everyone seems to be focused on politics, I instead choose to focus on Christina Green, the nine year old victim killed Saturday. Born on 9.11.2001, she is now a victim of another case of horrific violence. I hope we can all remember Christina by acting the way we did when she was one day old: To focus on values and principles, to use common sense and stop playing politics.
Glenn Beck, Monday, Jan 10, 2011 at 11:48 AM EST
Take the pledge people. I have…
When is Excessive Luxury Just Plain Wrong?
“Liberals are not the only ones . . . who engage in anti-luxury politics. All sides invoke the term “luxury” with a loaded meaning of “inappropriate,” “excessive” or “wrong.” Take as examples recent criticism from conservatives about Obama’s vacations, Massachusetts Sen. John Kerry’s yacht or criticism from varying political perspectives on the sailing trip BP’s chief executive took during the Gulf of Mexico oil spill.” - (“Government shouldn’t regulate luxury,” Donald J. Kochan, LA Times, Aug. 1, 2010)
In light of the newest regulations on businesses (wealth), there seems to be growing war chant of “kill the rich”. Consider President Obama’s now infamous statement that “I do think at a certain point you’ve made enough money.” Isn’t this a statement symbolic of an anti-wealth, anti-luxury persuasion of this administration’s agenda? Let’s talk about the hypocrisy of that statement and Mr. Kochan’s total misunderstanding of what conservatives and the American people mean when criticizing “excessive luxury”.
First, Obama’s hypocrisy knows no bounds. What our narcissistic president doesn’t appear to understand is that when he, and his family, take all those vacations, they are spending OUR money. Oh sure, they may buy their own food, and maybe even pay their own hotel bill (but I doubt it). How many tax dollars are they using to pay for their entire entourage every time they leave the White House? In the meantime, there are millions of Americans out of work, thanks to the government’s excessive restrictions on business and stimulus money going to the wrong recipients (but that’s a whole other subject for another day). Given the current economic status, it is obscene for the President and his family to vacation and throw parties as often as they do. They are living like African potentates – or royalty. Last time I checked, we did not elect a king.
Second, no American cares one whit whether Sen. Kerry buys a yacht – other than some that may be envious (their problem). The criticism is centered around his alleged avoidance of sales tax and docking fees in Massachusetts. Is he trying to save a few thousand dollars (after spending $7M on the yacht?) by docking in another state? If he is – shame on him. If he has another reason? Well . . . the issue here is integrity. Does he have any? Questionable . . .
Thirdly, no one denies the right of BP’s chief executive to go on a sailing trip. In this case, his timing was inappropriate. Taking his little jaunt during the Gulf oil spill made it appear that he was unconcerned and not doing his job to stop the leak. Although this public perspective can’t be proven, a more astute person would have been aware of the possible appearances of the timing.
To summarize, it is not wealth that is inappropriate, excessive, or wrong. It is how it’s used, when it’s used, and if it’s really your wealth to spend. Obama is spending our nation’s “wealth” – not his own. Sen. Kerry has every right to acquire wealth and spend it – it’s the American way. His may be an issue of integrity. As for BP’s CEO, his timing was just plain inappropriate.
Wealthy or not, people should show a little grace. The three mentioned seem to have none.
