Friday, September 16, 2011
Wednesday, September 7, 2011
If only we had such an innovative political culture. Imagine the hundreds of new applications for protecting individual rights, voluntary trade, and property in novel ways.
By the way, I'm in Bogota for a few months so anyone one interested in what life is like in Colombia let me know…
Thursday, August 11, 2011
The Credit Downgrade That Didn’t Happen*Dr. Folsom is also the author of The Myth of the Robber Barons. He has a new book on FDR during WWII coming out in October!
by Dr. Burt Folsom
Ninety years ago, in 1921, the U. S. was poised for a recession, high unemployment, and a possible credit downgrade.
Because World War I had ended, the troops had come home, but 11.7% unemployment darkened the country. Our veterans could not find work. To solve these problems, some leaders recommended, in effect, a stimulus package–give the veterans jobs to build roads, bridges, and some buildings.
But President Harding (who died in office) and President Coolidge said no. Instead, these two presidents recommended cutting federal spending and cutting tax rates.
The cutting of federal spending was critical because the U. S. national debt had increased from $1.2 billion to $24.3 billion from 1916 to 1920.
We complain today about 9.1% unemployment and a doubling of our national debt in the last eight years; from 1916 to 1920, however, we had a 20-fold increase in the national debt and 11.7% unemployment.
But in early 1920s, the U.S. never had a credit downgrade or a prolonged recession because the cutting of federal spending and of tax rates jump-started the economy and produced budget surpluses every year during the 1920s.
During that decade we slashed more than one-fourth of our entire national debt, and increased GDP by almost 25%. American entrepreneurs eagerly began producing radios, talking movies, and air conditioning–three inventions, among others, that changed our nation and the world.
What is encouraging here is that Americans can still chart their own future. We did that in 1921, and we can do so today. We are not pre-destined to be a declining nation–we have a choice in that and we will help make that choice as a nation when we vote next year for the leaders who will shape public policy.
If we select someone with Coolidge’s free-market philosophy, then the freedom that comes with that will allow Americans to invent and create more goods and services to provide the jobs and prosperity to get America moving again.
Woodrow Wilson, the president who Harding and Coolidge replaced, promoted the first income tax and under Wilson the top rates went from 7% to 15% to 65%, and finally to 73%.
Under those rates, we were making the decision to chase wealth out of the country and stagnate as a nation. Harding and Coolidge reversed that decision and sent tax rates tumbling to 25% on top incomes.
American entrepreneurs arose and dominated the world. Revenue actually increased and budget surpluses became the hallmark of the 1920s. What choices will we make ninety years later?
Thursday, July 28, 2011
“The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies.Of course, it's almost a given now that everything Obama says has an expiration date, and this statement was no doubt made then only for the purpose of opposing Republicans. Still, it was true then and it's even more true now.
Increasing America's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.'
Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
-- Senator Barack H. Obama, March 2006
With 'plans' on the table that actually cut no spending at all - they're all just reductions in projected (i.e. fantasy) spending increases in the future - we'll continue with the status quo... until the whole house of cards collapses in about 10 years.
Tuesday, July 26, 2011
“Nearly every day without fail…men stream to these [mining] operations looking for work in Walker County. They can’t pay their mortgage. They can’t pay their car note. They can’t feed their families. They don’t have health insurance.I applaud his decision. After thinking it over for two years, I've reluctantly concluded that it's time for the entire country to do that. I honestly can not see any other way, short of actual civil war, to get the state and Federal governments to back off.
And as I stand here today, I just…you know…what’s the use? I got a permit to open up an underground coal mine that would employ probably 125 people.
They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home.
What’s the use? I see these guys—I see them with tears in their eyes—looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them.
So…basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.”
The latest round of ridiculous 'negotiations' in D.C. was one of the last tumblers to fall into place. I applaud the Republicans for trying, but even the most 'extreme' plans represent at best 1/10th of what needs to happen, economically.
The regulatory burden, many times greater, isn't even being discussed. While I fully expect things to get a whole lot better for a while after January 2013 - if Obama, Reid, and crew haven't completely destroyed any chance of recovery by then - it won't be nearly enough.
No one hopes more than I that I'm wrong, that this is just (temporary) and unfounded pessimism. But I genuinely can not see how you pay down several trillion dollars of debt without serious changes to entitlement programs and even the Republicans are only nibbling at the edges. I can't see how you prevent a continued economic slide without removing vast swaths of irrational regulations. I can't fathom how any of this will even begin without a moral and cultural revolution, which doesn't appear to be in the offing. Even the Tea Party is a very weak brew.
Still, I've been wrong before. Maybe I will be again.
Tuesday, July 19, 2011
Recently, I received an email from a friend which said, in part:
Isn't Congress just wonderful! Entitlement? I paid cash for my social security insurance!!!! Just because they borrowed the money, doesn't make my benefits some kind of charity or handout!!The outrage is well placed and understandable, but the situation is ENTIRELY the fault of the electorate.
Congressional benefits, aka. free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days, now that's welfare, and they have the nerve to call my retirement, an "entitlement" !!!!!!.....
Where was the outrage when Congress voted to adopt baseline budgeting, which had the following effects.
- 1. All taxes, regardless of what they are called, regardless what their original intent and regardless of any promises past, present or future congresses have made or will make, are simply revenue streams to the government. These taxes all go into one pool and are spent as Congress and the President sees fit to fund any and all programs, including Social Security and Medicare.
- 2. There is no Social Security Trust Fund. Politicians talk about the trust fund all the time, but it is empty rhetoric devoid of meaning which is designed purely to appeal to the electorate’s base emotions. The Social Security IOU’s are also a joke! They have no meaning in a baseline budgeting system. It has as much meaning as would you were you to over spend the funds in your checking account, writing yourself an IOU to pay yourself back. Silly!
- 3. Ditto Medicare!
- 4. If you have failed to plan for your own retirement, both income and medical care, the best you can hope for is politicians who will chose fund these programs before they fund other programs. This will especially become important when the crap hits the proverbial fan and our government is forced to only spend what it takes in.
- 5. For points 1, 2 and 3 above, before you get all morally outraged and say what I wrote is a lie, know this. The Supreme Court of the US has already ruled that the Social Security and Medicare taxes that all of us pay are simply revenue generators for the Federal Government.
Worse, they ruled that any and all past promises with regard to these two programs carry no legal weight. In essence, none of us who have paid in to these two funds our entire working lives have a "legal" right to benefit from them at any point in our life. In fact, both programs have been entitlements since the day the Feds adopted baseline budgeting.
What our politicians have done is a moral outrage and were they private citizens doing same, would have found their butts in jail. There is, however, a difference between what is moral and what is legal. I'm sorry to tell you that Congress could vote to stop paying Social Security benefits tomorrow and your only two recourses would be to vote the bastards out of office or pick up arms, march on DC and by force, take back control and hold a Constitutional Convention. Sadly, the courts are not on our side and offer no justice on this front!
Finally, a word about the mentality that brought this about.
In my opinion, anyone who thinks they have a right to someone else’s production is to blame for the mess we are in. If you think the rich don't pay their fair share, you're part of the problem. If you think we are morally obligated to administer welfare programs, you're part of the problem. If you think we are entitled to own homes regardless of our ability to pay for them, you're part of the problem. If you think we are obligated to send money to other governments, you're part of the problem. If you think we are entitled to public education, you're part of the problem. If you think the government should fund research in to anything, regardless what it is, you are part of the problem.
Now that I've likely gored at least one of your sacred cows, let me explain.
It is pretty universally accepted in Western Democracies that slavery is an immoral and unjust system for engaging in commerce. One definition of slavery is person A owning the production of person B’s labor without person B’s consent or agreement. In most cases, especially with state sponsored slavery, slavery leaves the victims virtually defenseless and helpless to do anything about it that wouldn’t likely lead to their death. When person A owns person B’s labor, they in fact own person B’s life energy!
I think we can all agree that this is an immoral system that should not be tolerated?
When you enter into a contract with an employer, you agree to give up some percent of your time for some level of compensation, usually in the form of cash. Your time is an investment of your life energy, which as noted above, no person other you has a right to without your consent. Therefore, the cash you earn is a proxy for your life energy.
When the government takes your cash and transfers it to another, they have in fact transferred some portion of your life energy to another human being without your consent! No matter how uncomfortable you might be feeling right now; this immoral system of transfer of your life energy makes you a slave.
Since we have already established the fact that slavery is immoral and unethical, all of the programs listed above, and most of everything else our government currently engages in is immoral as it is, in fact, slavery.
I know this position won't be popular; if it were we wouldn't be in the mess we're in. That being said, I would gladly entertain any serious challenges to my reasoning.
Saturday, July 16, 2011
Here, August Comte makes it completely clear that when he talks about the duty to sacrifice self for the sake of others, he really means it. It's also clear, even from this brief passage, that it is incompatible with liberty.
“[The] social point of view . . . cannot tolerate the notion of rights, for such notion rests on individualism. We are born under a load of obligations of every kind, to our predecessors, to our successors, to our contemporaries.
After our birth these obligations increase or accumulate, for it is some time before we can return any service. . . .
This [to live for others], the definitive formula of human morality, gives a direct sanction exclusively to our instincts of benevolence, the common source of happiness and duty. [Man must serve] humanity, whose we are entirely.”
[Catéchisme Positivist, 1852]