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Archive for the ‘Politics’ Category

Wake Up America!

 

Normally, I do not make commentary on specific candidates for any office other than those candidates (of any political party), which support and uphold individual liberty and sound economic policy.  FedUpUSA in general is apolitical, since economics is based upon MATH, not politics.  However, as events are unfolding, I feel compelled to make the following statement:

Anyone considering voting for Romney had better watch this video.  Have we as Americans learned NOTHING in the past 5 years?!  How many times are we going to elect the SAME fascist oligarchs and expect a different outcome?!

If this happens, we deserve everything we get.  Romney is NOT better than Obama – in many ways he is far worse.  The only bright spot about a Romney nomination is that he will be at the helm when the Republican party goes the way of the Whigs and what remains of this country is destroyed.

For crying out loud, wake up America, you’re being herded like sheep to the candidate pre-chosen by those who already control our lives and this country – the same people who have eroded our liberties through discarding the US Constitution.  If you can’t figure this out, we apparently don’t deserve to be saved.

 

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How I Came To Register Libertarian

and why you should consider it too.

Let’s start with the preamble of the Okaloosa County Libertarian Party’s Constitution and Bylaws:

We, the members of the Libertarian Party, challenge the cult of the omnipotent state and defend the rights of the individual.

We hold that all individuals have the right to exercise sole dominion over their own lives, and have the right to live in whatever manner they choose, as long as they do not forcibly interfere with the equal right of others to live in whatever manner they choose.

Governments throughout history have regularly operated on the opposite principle, that the State has the right to dispose of the lives of the individuals and the fruits of their labors. Even within the United States, all political parties other than our own grant to government the right to regulate the lives of individuals and seize the fruit of their labor without their consent.

We, on the contrary, deny the right of any government to do these things, and hold that where governments exist they must not violate the rights of any individual: namely 1) the right to life – accordingly we support the prohibition of the initiation of physical force against others; 2) the right to liberty of speech and action – accordingly we oppose all attempts by government to abridge the freedom of speech and the press, as well as government censorship in any form; and 3) the right to property – accordingly we oppose all government interference with private property, such as confiscation, nationalization, and eminent domain, and support the prohibition of robbery, trespass, fraud and misrepresentation.

Since governments, when instituted, must not violate individual rights, we oppose all interference by government in the areas of voluntary and contractual relations among individuals. People should not be forced to sacrifice their lives and property for the benefit of others. They should be left free to deal with one another as free traders; and the resultant economic system, the only one compatible with the protection of the individual rights, is the free market.

This reads in a rather familiar way, doesn’t it?  Indeed it does, and indeed it should:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,

You know where that came from, right?  (If not please check your citizenship at the door on the way out!)

But let’s back up and look at the Libertarian principles again — specifically, one of them:

We hold that all individuals have the right to exercise sole dominion over their own lives

There’s your first principle

You either believe and intend to live to this, or you do not.  It is a binary choice with no shade of gray.

Either you, and only you, have the right of dominion (ownership) over your person and nobody else does, or you do not.

This does not mean you cannot cede that authority for a period of time and on a voluntary basis to some other entity (e.g. your idea of what God is, to military service, etc) but it does mean that nobody else can compel you to do so.

The difficulty with first principles is that they’re inviolate.  One either believes in them or one does not.  Once you adopt one you are then forced to square all your other political principles against this first one, and if you cannot fit what you wish to adopt into that first principle then you must modify or abandon whatever it was that you intended to do.

The problem with the Republican and Democrat parties is that they have no first principle that comports with The Declaration and Constitution.

A recent little blowup of controversy related to the Catholic Church will provide a sufficient example for both sides of the aisle.

The new video message is the latest step in an escalating and historically unprecedented confrontation between the Roman Catholic Church and an American president.

It centers around what the American Catholic bishops see as the Obama administration’s efforts to restrict the right of Catholic citizens and institutions to freely exercise their religion as guaranteed by the 1st Amendment to the Constitution.

This time, Dolan said, the administration is moving to violate the 1st Amendment by forcing Catholics to purchase health insurance plans that cover sterilizations and artificial contraceptives, including abortifacients. The church teaches that sterilization, artificial contraception and abortion violate the natural law and that Catholics cannot be involved in them. Dolan called on Americans to contact elected officials and call for the administration’s health-insurance regulation to be rescinded.

No they’re not.  Let me explain.

There is nothing prohibiting Catholics from forming into a group to obtain health insurance under a group policy.  Such a group would presumably all be comprised of people who believe as Dolan does.  They would therefore all not use such services and drugs, even though available.  As a result they would not be paying for them either, as the rate base on which they were assessed would not include any use of same.

That’s a half-Libertarian solution to this dilemma, but it’s only half a solution because it still recognizes the right of the government to force you to buy insurance in the first place.

The Libertarian position is that forced purchases of anything are immoral and violate your first-principle right of dominion over yourself.

But see, Dolan has no problem with that.  He’s perfectly fine with the government sticking its stiletto-heeled-boot into and through your neck provided that it does so in a way that is theologically compatible with what he believes.

Dolan takes neither of the liberty-based positions available to him in his editorial.  He is not so much interested in trying to protect his own liberty and those who believe as he does, but rather he is interested in restricting your liberty by attempting to declare various forms of family planning “immoral” and restricting their availability.  Worse, he can’t even get to where he ends up by using a “pro-life” position (hypocritical as it often is among those who make that claim) as he includes both barrier methods of birth control and voluntary sterilization in his complaint, both of which prevent fertilization in the first instance.

This is rank hypocrisy; Establishment prohibits all preference for one religious set of beliefs over another (or over none) and Dolan deserves a pointy red hat for his utterances in this regard, not the reverence normally afforded a Cardinal’s cap.

Dolan’s position is consistent with the state owning your person.  Do you agree that The State owns you?  If so, you can then proceed to his argument and ultimately you might agree with Dolan. 

If not, you’re a Libertarian.

Now let’s look at another difficult case — the recent spate of crude meth labs blowing up and landing people in burn units.

A crude new method of making methamphetamine poses a risk even to Americans who never get anywhere near the drug: It is filling hospitals with thousands of uninsured burn patients requiring millions of dollars in advanced treatment – a burden so costly that it’s contributing to the closure of some burn units.

So-called shake-and-bake meth is produced by combining raw, unstable ingredients in a 2-liter soda bottle. But if the person mixing the noxious brew makes the slightest error, such as removing the cap too soon or accidentally perforating the plastic, the concoction can explode, searing flesh and causing permanent disfigurement, blindness or even death.

I looked up the so-called “shake and bake” method (online at that) and found several crude “recipes.”  I know enough about chemistry to immediately recognize that these forms of creating this drug are extremely dangerous, and if you attempt them you’ve got a good shot at ending up severely injured or dead from exactly the sort of explosion being discussed in the article, and what’s worse is that the chemicals involved are strong acids and bases, which means chemical burns will be added to your injuries.

Given the prevalence of these incidents anyone thinking about doing this has to know about the risks.  Yet they choose to undertake them anyway.

Compounding the problem is the fact that due to EMTALA (a Reagan-era law) hospitals must treat emergency patients irrespective of ability to pay.  And these are emergency patients.

So we have several problems here.  First, we made these drugs illegal.  Then, we cracked down on the means that people used to produce them anyway, driving abusers of these drugs to more-dangerous means of producing what they were trying to obtain and radically increasing the street price.  And finally, we wind up paying for it again several times over when the drug addict’s lab literally blows up in his face, severely injuring him or her.

At the same time I can get shitfaced drunk all day long and that’s perfectly legal, despite the fact that doing so is known to cause liver cancer.  I can then force society to pay for the treatment.  I can also smoke like a chimney, despite knowing that it is likely to cause heart disease, emphysema and lung cancer, and bill society to pay for the treatment.   Or I can choose to have unprotected anal sex and again, if I contract HIV doing so force society to pay for my treatment once again.

If you don’t see the problem here you’re not paying attention.

Dominion over one’s person is a two-edged sword.  The meth addict isn’t going to stop using meth.  We know this because if the law was a deterrent or even the risk of outright massive disfigurement or painful death was, there wouldn’t be people blowing themselves up in these makeshift labs. 

But there is.

HIV is a nasty way to die.  Were this a sufficient deterrent nobody would engage in unprotected anal sex.  But people do. 

Emphysema and lung cancer is a nasty way to die as well, as is liver cancer.  Yet people still smoke and drink to excess, despite knowing these facts.

In the 1920s we attempted an experiment in America.  We made liquor illegal in 1919 with the 18th Amendment and repealed it in 1933 with the 21st Amendment.

Why did the 18th Amendment fail?

That’s rather simple: Despite being illegal, people did not stop drinking.

What they did do is make alcohol through much more dangerous devices, such as makeshift stills using old automobile radiators that had utilized lead solder.  The lead leached into the alcohol and caused lead poisoning in the people who drank the booze.  Stills occasionally blew up, causing burns and blast damage, and then there were the gangs.

Much like today’s drug gangs prohibition made the transport and production of alcohol a thing that could not be protected in the courts.  As a result disputes were settled the “uncivilized” way — with guns.  Shoot-outs and similar unsavory behavior became common and the government of course responded with ramping up police-state tactics, escalating what amounted to a domestic civil war.

But those who wanted to drink did not stop drinking, just as those who want to take drugs will not stop doing so today.  Eventually the people wised up and repealed the 18th Amendment, demanding that the government stop causing violence by interfering in consensual adult behavior (in this case, transacting in the use of booze.)

Libertarian thought won one round.

So what solutions do we have to today’s view?  The jackbooted government solution is more laws.  But will they work?  History says no, they will not.

Libertarians are often (derogatorily) called “Republicans who wish to smoke pot.”  Were it only so simple, we could all give up with the quest for liberty today.

Rather, the Libertarian view requires that one examine each step of what is broken here against the first principle of personal dominion and see if you can square it.

So let’s start.

First, the crime of using meth itself. Does prohibiting the mere use of a substance comport with personal dominion?  No.  Therefore, there is no law that can be supported that prohibits the use of a substance — including meth.  This also means that if you believe in personal dominion you cannot support laws that prohibit the use of tobacco, alcohol, or for that matter consensual gay sex.

It simply does not matter if the substance or act is personally dangerous.  If you believe in personal dominion then you believe in the right to do things that are personally dangerous!  This is a binary choice — if you have the right to eat until you get fat and fail to exercise, if you have the right to smoke, or if you have the right to drink then you also have the right to use recreational drugs that could harm your health within the confines of your own residence and/or to engage in any sort of consensual personal conduct between two or more adults that you may desire. 

You cannot support the right to be fat, to smoke, to screw, or to drink and support drug prohibition and be consistent in your beliefs — if you make that argument you’re a damned hypocrite as you don’t support personal liberty at all.

Now what do we do about the burn problem?  That’s a different matter — you see, personal dominion means that you do not have the right as a meth abuser (or for that matter as anyone else) to force other people to pay for your treatment either.  That is, your acts and their effects on your person are uniquely your responsibility.  This same principle applies to smokers, drinkers, and those who like to engage in gay sex.  You have the right to purchase a private insurance contract to cover those risks, but not the obligation to do so and if you choose not to you also have no right to force others to cover your expenses after the fact.

This does not prevent others from covering your expense on an entirely-voluntary (e.g. through charity care) basis.  But it does prevent you from forcing others to do so.

Adopting such a position means you cannot support Medicare or Medicaid, say much less Obamacare, as all are forced transfers of money from taxpayers to those who enjoy the benefits, in one case at a rate of more than four times what was “paid in” and in the other case without any “pay in” at all!

First principles are funny things.  When you actually have them and believe in them you find all sorts of problems we have today in our government and its budget aren’t really problems.  They all stem from one place — the desire to control others.  To direct their lives, to tell them how to live, and to violate their fundamental liberty interests — fundamental rights that most people believe were endowed by the very creator they claim to worship!

Think about that for a minute.

On the one hand most people in this country claim to believe in a God that endowed us all with certain unalienable rights — life, liberty, and the pursuit (ed. but not the guarantee!) of happiness.

But then, under the label of “Democrat” or “Republican” we vote for, support, and enable the enactment of laws that blaspheme what we claim to believe, in that we then intentionally violate those very same liberty interests we claim come from that God.

When I was 20 I didn’t process this cleanly, and I suspect neither do most other people.

But now, as I come toward pushing 50, I can no longer wave away and dismiss the logical inconsistency of the positions adopted and put forward by either Democrats or Republicans.

I believe in personal dominion as first principle.

I believe I was endowed with unalienable rights, and that the founders were correct to declare same, and that all of these flow from the first principle of personal dominion.

I believe that this endowment came from God (although if you believe they came from Darwin, that’s fine too.  None of us will know until we die, at which point it’s too late to change your mind.)

As a consequence I cannot support, or vote for, those who have, do and will in the future disrespect and abrogate that first principle.

As such I am left with only one political party’s pole today where I can doff my cap and hang my coat.

It’s marked Libertarian.

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Tickerguy’s State Of The Union Address

My fellow Americans;

Four years ago, on this day in 2008, Bear Stearns stood on the edge of collapse.  We did not know this, of course, as other than their two hedge funds’ failure their internal condition was hidden — by the company and by the regulators who were charged with keeping our financial system safe.

Over the next six months we came close to losing America.

Today, we’re not in much better shape.

We have failed to address the first, and only, reason we find ourselves mired in an economic situation where we cannot grow and we cannot prosper.  Where The Senate has failed to pass a budget for nearly three years.  Where The House has proved unable to put forward a set of spending and revenue bills that balance.

The reason for our economic malaise, for the near-collapse in our economy in 2008 and the inability to exit the job recession of the last four years is that those who you vote for are incapable of telling you the truth.

The truth of a nation’s financial situation is no different than that of your household.  You cannot spend more than you earn in your household for a long period of time.

We all have short-term challenges in life; a sudden illness, the loss of a job, a leaking roof.   The wise family socks away some percentage of their earnings — their personal economic surplus — to buffer itself from these ordinary and expected calamities.  The less-wise depends on the ability to pull out a credit card and charge that new refrigerator when the need arises.

It is a time-honored practice in America for politicians to make promises they cannot keep.  We promise to build a gleaming new school, brimming with high technology, but we did not put aside the tax money to construct it in advance.  We promise that you will have medical care in retirement, but we never funded that program.  We promise that you have a “lock box” in Social Security, but then we raid it to make the budget deficit look smaller.  And we all want to drive cars, but we don’t want oil rigs off our shores, we don’t want pipelines and refineries across our land, and we don’t have either the money or the moral right to invade all those nations in the world that have the energy resources we need.

Our medical system has increased in cost at a compounded 8% rate for the last 30 years.  In 1980 the Federal Government spent $53 billion on all medical programs combined.  Last year it spent over $800 billion.  Politicians on both sides of the aisle have taken the  “gold-standard” position that nobody over the age of 50 will see their Medicare tampered with, as they know that you, the voter, will fire them if they tell you the truth.

The truth is that Medicare cannot be fixed and neither can Medicaid, standing alone.  Instead we must repair the medical system itself.  EMTALA, which mandates that hospitals must treat everyone irrespective of the ability to pay, must be revisited and either modified or abolished.  The practices of cost-shifting, where what you pay for a medical procedure, drug or device is set based only on how you pay for it or where you live, all exempted from laws that make this conduct illegal in other lines of business, must end.  The provision of taxpayer-funded medical care to those who are in this nation illegally must be abolished.  These changes must take place now, not tomorrow and definitely not “somewhere down the road.”  If they do not our medical costs will double in another six years, and we do not have the money to pay that cost.  The result of inaction today, as a matter of mathematical certainty, will be rationing of medical care and collapse of these programs.

The same rot that has infested our medical system must be excised from the rest of our Federal Budget.  The simple fact of the matter is that we are borrowing more than one third of every dollar the federal government spends.  This will double the national debt in less than a decade — again.  We have added more than 50% to our federal debt in three years, and we cannot continue on this path.  Eventually, foreign and domestic creditors who have lent the government that money will go on strike, dramatically raising the cost of financing.  When this occurs we will be forced to cut the size of government by more than 50% in an afternoon, instantly collapsing all of our federal social programs.

There are people on the right side of the aisle who say that we have to “grow the economy” to get out of the current fiscal mess.  They’re lying.  This mantra has been repeated for 30 years, and yet not once has this actually produced economic growth that exceeds the growth in debt through the economy.  The economic bubble in Internet stocks in the 1990s and the housing bubble of the 2000s were both caused by outrageously-fraudulent acts — first through making of knowingly-false statements about exponential growth of the Internet that could not possibly be true for more than a couple of years, and then again through the making of “fog-a-mirror” loans that were packaged up and sold as “solid AAA credits” through the financial system.  Both bubbles were driven by knowing lies.

The tax system at the corporate and personal level favors debt instead of equity, leverage over thrift and industry.  This must end.  The Fair Tax is one such way to do so; by zeroing the corporate tax and rendering all taxes on consumption it removes the preference for debt over equity, makes lobbying for special preferences impossible and makes the cost of government instantly visible and transparent to everyone in the nation.  The Internal Revenue Code should be burned to ash and replaced with The Fair Tax tomorrow morning.

The right also says that we need to return to “sound money.”  But sound money means no more fiscal deficits — period — and no unbacked credit emission.  Yet none of the people on the right side of the aisle — or the left — are actually proposing to cut off that fraudulent emission of credit nor are they proposing a balanced budget.  Yet this is a necessary condition in order to have “sound money.”

The left says that the rich must pay their “fair share.”  But what is their “fair share”?  Nobody on their side of the aisle will tell you.  The fact is that the “rich” pay nearly all of the income taxes now and yet the federal government spends all of that money and then more than a third more — which it doesn’t have.  The lesson is simple — no matter how much money we shovel into Washington it will spend every penny and then continue to spend more, even though Congress doesn’t have it.  There can be no fiscal discipline nor a resolution to this problem until the Congress stops spending money that it has not been able to first tax from someone.

Government tax receipts are, in the main, entirely dependent on the employment participation rate.  That rate is back to where it was in the 1970s and has not budged despite the alleged “recovery” since early 2009.  The fact of the matter is that behind this problem is the offshoring of labor; we temporarily made possible the appearance of prosperity through excessive borrowing at all levels of the economy — federal, state, local and personal.

But those days have now come to an end and we must deal with what our fiscal and employment situation is on-balance, not what we would like it to be.

Either our wage and environmental laws are just or they are not.  If they are not then they must be repealed.  If they are then they must be enforced.  Since we cannot police every nation in the world on either a practical or moral basis the only means of policing those laws beyond our borders are through the imposition of tariffs on all goods and services sold in the United States. This is both a lawful and Constitutional means of enforcing our labor and environmental standards.  Companies can either construct their goods and provide their services with labor and materials from the United States, employing Americans, or they can cover the social spending necessitated by exploiting our markets with slave labor and environmental destruction abroad through tariffs imposed on their activity.  The choice is theirs, but this mandate must be ours, without fear or favor.

Companies such as Apple often claim that they cannot fill the jobs they need filled in America, and that our educational system is failing.  More than fifty years of federal involvement in the education of our children has proved to be an abject failure.  “No Child Left Behind” in fact has left all children behind.  In the 1800s and early 1900s we powered ahead with innovation unmatched anywhere in the world, culminating with putting men on the moon.  We did it all, building this nation literally from the ground up, without Title I.  The Education Department must be de-funded and abolished tomorrow morning and Title I must be stricken from the books along with the rest of federal involvement in education.  We have 50 state laboratories on purpose and our federalist system ensures that our population is free to both vote for the state educational system desired in an area and that the people can move to states that fulfill their own individual mandates in this regard.  At the same time federal involvement in post-secondary education is an abomination; we must both remove the non-dischargable status of student loan debt and in fact remove all federal subsidy and support of higher education.  30 years of interference has proved that all of the “benefit” accrues to university bloat rather than educational outcome with costs increasing at more than three times the rate of inflation.  In 1980 you could flip pizzas to put yourself through college; today that is impossible.  This is not due to market forces; rather, it is due to intentional government interference that must be withdrawn.

America was founded on the rule of law.  Yet while it is illegal for you or I to defraud someone and we will be arrested, tried and imprisoned if we do, over a half-million citizens in Jefferson County Alabama were ripped off and had their water and sewer bills quadrupled through a series of fraudulent schemes.  Several county officials and others involved in the scams were tried and imprisoned.  But the banksters and companies who ultimately funded those bribes, and who benefited financially from these schemes and scams, were neither indicted or forced to give back their ill-gotten gains, and the bills have remained at the quadrupled level, effectively stealing from the citizens each and every month.  Other big firms who have made illicit profits through money laundering for Mexican drug gangs or the off-label promotion of prescription drugs have been fined some portion of their “excess profit”, which simply turns the breaking of the law into a business risk.  Again, if our laws are just then they must be enforced evenly against every entity, irrespective of their size or alleged “importance” to the nation.  The CEO and other corporate officers and board members must be held to account through personal liability when they either are aware of such violations of the law or willfully avert their eyes.  Sarbanes-Oxley allegedly addressed this failing in the white-collar world yet not one financial executive has been charged under this law.

America has the ability to be a great capitalist nation.  But today America is not a bastion of capitalism.  Many have claimed that we now have “crony capitalism” but that too is a misnomer.  Capitalism is the premise that one succeeds or fails through the wisdom of one’s investment, predicated on capital formation (that is, the investment of economic surplus into various economic activities.)  While the vestiges of this system remain in America, what has replaced it is a feudalistic system of scams, frauds, allegedly “lent” funds that do not in fact exist and bribery of various forms, both legal and not.

Later this year America will go to the polls to select a President and all 435 members of The House, along with one third of The Senate.  A vote for those candidates who are currently in office is a vote to continue the policies of theft, fraud and scam.  Neither major political party has shown any interest in reform or putting a stop to the scams, nor has either been willing to tell the truth.  It is often said that nobody other than a Democrat or Republican can win a major political office, yet this is simply untrue.  I have never in my life voted in an election in which only two names were on the ballot for President, and any of those on the ballot is capable of winning.

That which we vote for and demand we cannot complain about.  That which we refuse to admit to yet which is nonetheless true remains our responsibility.  With the cliff of fiscal insolvency and a forced and disorderly contraction in the size of the Federal Government by more than half now in view before us, we have the choice to either change course or drive straight toward certain government and economic ruin.

The responsibility for our political and economic future is in fact individually ours.  We can either focus on the political minutia such as abortion and gay marriage, or we can demand and vote only for candidates that will stop the deficit spending, put a final and complete end to the offshoring of our labor through the exploitation of the environment and slavery in foreign nations, and imprison the fraudsters in our financial system without regard to who they are, restoring the rule of law.

The choice is yours America, and so are the consequences.

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Is Recognition Finally Gelling?

 

On April 1st 2007 the very first Tickers were written.  In just a bit over two months, The Market Ticker will be five years of age.

And through that time The Market Ticker has pointed out one central fact behind everything published here: You cannot spend more than you take in on an indefinite basis.

This, of course, is anathema to a nation — and a world, really — that has done exactly that for more than three decades.  Many of the citizens of the world — those under about 35 (as your first few years of life have little direct connection in a cerebral sense to economics) have never known a world where overspending and ponzi economics was not practiced.

You can’t exactly flaw people for not understanding that a thing is broken when they’ve never experienced life in any other way.  And for those who are somewhat older, those of us who remember the 1970s, the oil shocks, gas lines and 5 gallon purchase limits along with grocery store prices that seemed to double every six months (it wasn’t quite that bad — but it was bad!) it is easy to get the mistaken impression that what we’ve had for the last 30 years “fixed” what was broken in the 1970s.

It didn’t, of course.

The world had run on it a simple fraud covered in various layers of complexity to hide it from the common man, just as has been done many times before.  The 1920s were the same thing, basically, minus the computers but also minus fast information sharing.  The land swindles of the day in Florida were almost identical to the condo-flipping schemes here in the Panhandle when you boiled them all down; tiny down payments on construction not yet initiated, the promise of ever-higher valuations, carnival-style barkers spinning rags-to-riches stories and you only needed $10,000 to get in “on the ground floor” of an elevator that would take you to the sky.  Sign right here mister, and your life of luxury and privilege will begin.

Uh huh.

Last night the yarn-spinning continued on Greece.  Bloomberg said:

Greece and its private creditors said early today they had made progress during talks in Athens on a debt-swap accord needed to lower the country’s borrowings and clear the way for a second round of international aid.

“The elements of an unprecedented voluntary private-sector involvement are coming into place,” according to an e-mailed statement from Charles Dallara, managing director of the Institute of International Finance, a Washington-based lobby group representing creditors negotiating with the government.

Sure they did.  Sure Greece is going to pay debts of more than 100% of its GDP — even after the “restructuring.”  And sure this is “voluntary” — in more-or-less the same way that it’s “voluntary” that you hand over your wallet when there’s a gun up your nose.

The real problem is that people — and governments — borrowed money they couldn’t pay back off their economic surplus.  For a private-sector entity (a person or company) economic surplus is easy to define — it’s what you have left after you spend on the bare necessities of life.  When those necessities (such as your house) become part of the overborrowing then the situation appears more complex but it really isn’t — you just “upscaled” your view of what was a “necessity.”

But let’s face facts — a trashy trailer on a 100×50′ piece of rented land with utility connections is more than the “bare necessities” when it comes to housing — by a lot!  I lived in a little 400sq/ft one-bedroom apartment for a good while when I was just getting started and that was more than “bare necessities” (by a lot) for even modern comforts.  A studio would have been sufficient, since I had no dependents and was single.

The same applies to transportation.  Most people today in the United States are driving around in vehicles that have values that are two, three, five or even ten times the cost of “basic necessities” for the required task (getting to work, the grocery store, etc.)  It was in fact in the recent-enough past that I owned said vehicles that the “basic car” had an AM radio with one speaker, a manual transmission, no air conditioning, no power door locks, no power windows, no power steering, no power seats and the seat coverings were vinyl.  You could also see (and work on) all sides of the engine and the road under it when you popped the hood.

In fact, one of the pieces of said “basic transportation” that I owned in my earlier years (and drove to work every day) was one of these:

Before that I had one of these in considerably worse condition than pictured (it was gray and had a smashed-in passenger side door from a collision prior to my acquiring it for a literal cost of $100.)

THOSE were “basic transportation” and not only where they cheap to buy they cost almost-nothing to insure because there was no reason to have collision or comprehensive coverage on them!  The Vega, incidentally, consumed a quart of oil per tank of gas on good days (and worse on bad ones) along with having a habit of slowly eating coolant.  Yeah.

I’m not saying you shouldn’t own this, incidentally:

IF you can afford it without debt, and without spending more than you make.  That is, if you can pay for it using your personal economic surplus.

But recognition of these facts is rather jarring for most people.  Some of us grew up understanding it; our parents owned one car that was much nicer than the other (and was used to get to work) while the other was, literally, “basic transportation” (with no power anything and no air conditioning) if we had a second car at all.  We rode bicycles to our friend’s home rather than being carted around by “soccer moms” in no small part because driving the car cost money; the bike cost only human power.  Nice bicycles (which most of us could not afford) had 10 speeds; the more-ordinary ones that nearly all of us actually owned had coaster brakes and one speed.

Let’s put this in a slightly-different perspective.  The poverty level income for a single person in the United States today (as of 2011) is $10,890.  Many people reading this, perhaps most, spend more than 1/10th of that on their cellphone bills.  A further significant proportion of the population spends more than 1/10th of this on their cable or satellite TV bill and the overlap between the two is significant.

That is, a very significant percentage of the population spends more than a quarter of poverty level income on two luxury and entertainment items which are utterly unnecessary.

Again, none of this is a problem if you can afford it.

But what should you have paid for first?

Well, for one, a very significant financial reserve.  Your retirement, for example, never mind a cushion in case something goes wrong (like losing your job.)

With governments its equally-simple: Government gets all of its money by taxing it.

Yes, all of it.

I know, some people will say “they can print it!” or “they can borrow it!” but in fact on a long enough timeline all of that is taxed.

If the currency is debased the taxation happens immediately and hits everyone at once.  If it’s borrowed then the taxes fall on you tomorrow, assuming it’s ever paid back.  There’s no real difference, when you boil it all down, other than the immediacy of payment.

All of it, in the end, comes down to taxing you — taking your money and giving it to someone else.

That’s all government does.

This weekend dawned with the news that Greece’s creditors have walked out of their meeting.  That in and of itself is probably not all that important.  What is important, however, is the rising tide of speeches coming from various government officers in Europe recognizing that deficit spending has to end.

It’s not just there — Fed President Dennis Lockhart has said the same thing about the United States.  What was just a few lone bloggers in the wilderness a few years ago, myself included, has now turned to policy-makers inside and outside of the government itself.

At the core of this problem is the buying of votes with money that doesn’t exist.  It’s very popular to do things like that, as having the necessary adult conversation regarding the sustainable level of spending by government — and the adjustment that comes to GDP and thus overall consumption when overspending stops — tends to bring revolt at the ballot box.

But there comes a time when the political expedience of vote-buying and other chicanery simply cannot be sustained any more.  We’re within sight of that cliff, and if we do not act we will go over it.

If you remember the speeches from Bernanke in the 2008/09 time frame he counseled that we must get our budget deficit under control in the “intermediate term.”  But exactly what is “the intermediate term?”  This again leads back to the fundamental nature of exponential growth and how badly you’re screwed if you ignore it.

In 1980 the Federal Government spent $53 billion on health care all-in. Last year it was about $820 billion.  That’s a roughly 9% compounded rate of increase.

The rule of 72 says that this means the spending will double again in roughly 8 more years (2019) to $1.64 trillion, then in 8 more (2027) to $3.28 trillion, which is approximately the size of the entire federal budget today.

Obviously that won’t happen as you can’t raise that much money, but that’s exactly what our politicians are promising people over the age of 50 when they say “Medicare will not change for those over 50as that rate of expansion simply gets you to where you qualify at age 65!  There will be two more doublings required to get you to 80 years of age, which (if it was possible) would rack that number to over $13 trillion dollars — close to the size of the entire economy today.

Bluntly: Such claims are a lie.

What’s worse is the curve when you look at government debt.  Let’s chart it:

Pick a point on that graph.  Even at the most-optimistic number — 2006 or 2007, when we were creating massive amounts of private credit to prop up an about-to-explode housing bubble — federal debt was still growing at over 6% a year.  That means it was doubling every 12 years!

In 2008 and 2009 we grew it at 15% or more a year.  That means it was doubling every 4.8 years.

Does anyone really think we’ll get away with either of those statistics given what we now know is happening in Greece and elsewhere in Europe?  Remember, Japan, which is the common poster child for this, came into their government debt binge with massive private savings — savings that have been essentially all consumed by that binge.  We never had the private savings in the first place, which means we have nothing to consume in previously-earned economic surplus!

Folks, there is not one year in the last decade during which we can point to a sustainable level of debt.  If you go back into the 1990s there were a few years during which federal debt expanded at a much-more-modest rate, but those were years during which private credit creation was expanding exponentially in place of the government (through the Internet bubble.)

There isn’t any way out of this through more government debt.  It has to stop, and stop now, because the nature of exponential growth is that the rate of damage accelerates.

If you read (again) my Ticker from 10-18 of last year, you should understand what’s going on — and what we face.  This is simply not about what I want, what I’d like, what pundits would like to do or anything of the sort.

It is about mathematical reality.

Think about exactly how much further we can expand government spending in this regard and not have the entire economy collapse around us.  Then reduce that percentage of increase to “doubling times” and you know where the wall is, in your best estimate.  Nobody who does this exercise can come up with a number that is larger than the number of fingers you have on one hand.

Look, I don’t like what taking our medicine means, and the reason I wrote Leverage was because I had gotten very tired of people saying “nobody could have seen this coming.“  In addition, there are a whole host of people who have sounded the warning horns for a while, yet they have no cogent plan to resolve the problem or help buffer the inevitable (and severe) pain that must be endured.  Some of them, including some political candidates for President this time around, understand the problem and even propose massive budget changes (e.g. $1 trillion a year in spending cuts) yet have no plan to buffer the economy and the people from what will, left alone, be a contraction in overall GDP of up to 25% and the Depression that will inevitably come with it — a Depression worse than the 1930s!  That is outrageously irresponsible and worse it will never get passed because without those buffers it is not only unnecessarily harsh but could lead to the collapse of both civil order and our government.

But irrespective of what I would like to see, or what politicians promise, this adjustment — the necessary adjustment — is coming.  It cannot be stopped.  It is mathematically certain, whether people like Bernanke, Obama, Romney and others wish to face it or not.

Your choice is whether to face these facts in your personal and economic life, preparing to the extent you’re able, or whether you will be one of those who claim that you were “blindsided” by the inevitable that you were simply unwilling to face.

The Market-Ticker

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OpEd: It’s Dying (Calen Fretts)

It’s Dying.

The two-party system, that is. And it has to, if our Republic is to survive.

It’s dying for good reason. Citizens across our great nation are realizing that the Republicans and Democrats in Washington no longer represent their interests, and they’re ready for a severe change to the political status quo. No longer is the concept of “throwing your vote away” relevant. What does it really matter, if the alternatives – the Republicans and Democrats – have become two wings of the same party, the Big Government party?

The U.S. government borrows more than $40,000 per second. So if you’re an average American, the U.S. government added to your tab more than you make in a year in the time it took to read this sentence. What they don’t borrow, they print. And what they don’t print, they take from you, in the form of taxation.

As if that weren’t enough, Congress seems intent on making life hard on the American people. From the drug war, to the Patriot Act, to the TSA, to the NDAA, their assaults on the civil liberties of nonviolent, innocent American citizens seem to be intensifying at an exponential rate.

The rule of law in America is deteriorating, as white collar banksters are rewarded for defrauding billions of dollars out of blue collar America while blue collar America is harassed and imprisoned for nonviolent crimes that affect no one else. All this has been enabled by both Republican and Democrat politicians alike for decades. At best, they give lip service to the Constitution, while trampling all over it and the principles it stands for.

But there’s a new party in town.

The Libertarian Party has only been around for about 40 years, but the principles it stands for go back centuries. America’s Founding Fathers were the first modern Libertarians. They sought a life free of the King’s dictates. So they wrote the Declaration of Independence, testifying that all men are created equal, and that rights come from the Creator – not from kings, governments, or anyone else.

But men like George Washington and Thomas Jefferson would be shocked at our modern government. They grew hemp and made moonshine, both of which are illegal today. They did not ask for permission to own and carry a firearm. They certainly did not obtain a permit to wager a bet on a friendly game of cards. By all accounts, Washington and Jefferson, those symbols of American liberty, would be common criminals in modern America. Our Congress has stacked the deck in this way, because it enables them to play out the game in their favor.

The message of Liberty was, and is, about individual empowerment. The ability to live free of force from others. To live in a nation of laws, not of men. To enjoy the comfort of one’s own castle, where every man is his own king. The government’s role is not to give us rights (which it cannot do), nor to infringe upon them; but rather, simply to protect our natural rights.

That’s why people of all races, creeds, and colors are leaving the two-party system and joining the Libertarian Party in droves. It is the only party whose registrations are growing. It is the only party that knows that all citizens, and especially minorities, are not served by special rules or government favors, but by the law being equally applied to all. It is truly liberating to finally release oneself from the confines of the two-party box; to no longer be required to make excuses for one politician or another’s repeated shortfalls; to have real choice. The Libertarian Party is the real populist party, the party of We the People.

Perhaps our cry can best be summed up by five words of the Rev. Dr. Martin Luther King, Jr.: “We want to be free.”

We just want the opportunity to live the American dream.

Calen Fretts is a resident of Valparaiso, Candidate for the U.S. House of Representatives in the 1st District of Florida, and Vice Chair of the Libertarian Party of Okaloosa County.

http://frettsforcongress.com

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Blind Party Loyalty Is For Mental Midgets

If most high profile Republican leaders and officials, salaried or not, do not shed their political arrogance and narcissism soon, 2012 November elections may be a repeat of why a high percentage of California Republican middle class voters refused to vote for many Republican candidates last two major election seasons. If any candidate’s only relevance to our lives is their Republican registration – not good enough, not any more.  But the message remains elusive to local, state and national Republican Party officers and leaders suffering a severe handicap of arrogance, narcissism, and many lacking in social and people skills outside of impersonal blogs, websites and podium speeches.  Federal prisons are full of dishonest lawyers and corporate executives which justify us more streetwise middle class voters to remain cynical and distrustful even of our own GOP leaderships.

Every time the majority of elected Republican leaders, local, state or national display condescending attitudes, arrogance, greedy self-serving agendas, and elitist demeanor toward whom they consider economic and intellectually inferior on the basis of modest incomes, they are further alienating an inevitable diversity of voters with potential common shared issues.  Many of us, with the ability and the backbone to confront internal Party deficiencies and push for leadership reforms, are frequent targets of verbal assaults by titular Republicans with delusions of being earthly deity.  God forbid if virtues of speaking truth and accountability are not just confined at Democrats.  It remains the GOP (as in Going Old Party) tradition to discourage us plebiscites from openly (instead of some “quiet room”) exposing ineffective leaders; or to probe into some Republican candidate’s credibility by connecting the dots between current campaign rhetoric to his/her past performance.  Embellishing resumes to expediently fit a believable profile of public leadership has not escaped intelligent voters’ observations. A demon is a demon regardless of partisan labels or religious claims which are no assurance of their personal integrity and humanity.

It takes profound intellect and expansive sociological sophistication, seemingly lacking in sufficient numbers within current traditional Republican ranks, to develop solutions of realistic substance.  The Democratic Party is not alone in being inundated with intellectually hollow whiners.  Attending state GOP conventions are bastions of mind numbing sound bites – stale, archaic, simplistic and lacking in public relations hospitality and other social skills to which the organizers seem totally and repeatedly oblivious, but then consider the sources.

Every political leader should be judged for re-election on the basis of how much legislation and policies have given benefit to the mass numbers of their constituents, not to a small percent of their deep pocket donors.  Not all corporate titans give a damn about helping to preserve and improve the integrity of U.S. patriotism, as most have legally sanctioned privileges to protecting their profits by stashing their monies offshore; low wage overseas job outsourcing; and our U.S. military protecting corporate overseas assets. Legislative offices, supported by middle class taxpayers as well, are visited most frequently by corporate lobbyists, whose fees are a business tax deduction unavailable to us middle class.  In fact, economic treason is a legitimate allegation to launch against many Republican and Democratic congressmen,  U.S. Senators and their corporate donors.  Isolating the ills of this nation just on Democrats alone is wearing thin, given the facts of bi-partisan complicity in playing us middle class voters and taxpayers like human yo-yo’s.

The problem why our GOP presidential candidates are not believable is that Newt Gingrich comes across a capricious and ego driven moral and ethical hypocrite whose criticism against Mitt Romney seems  self-serving.  On the other hand, Mitt Romney believes himself to be an American aristocrat whose rhetoric alone should be sufficient to justify voters’  support.  Romney’s offensive references to “envy” and that tax policy disagreements be confined to “quiet rooms” among other verbal Freudian slips were not just poor choice of words, but reflective of how he defines us not of the elite.  In his mindset, failing to achieve super rich status is the only value which passes his litmus test of intelligence.  Rick Santorum is too culturally and socially unsophisticated to lead a nation where many admitted Christians, including Catholics, prefer government and legislative agendas be confined within secular boundaries. Ron Paul is just a magnet for Libertarian type advocating a anarchy.

News media have no idea the number of scams, deceit, lies and exploitation passing for GOP’s version of gratitude, respect and morale reinforcement to many of us grassroots active uncompensated Republican volunteers in California and beyond.  Our first Bay Area regional Korean American Republican elected as GOP state senate nominee, Doo Sup Park, had to file a police report for a seemingly deliberate act of larceny committed on him last year by Luis Buhler sanctioned by his CAGOP allies, as the case remains ignored by the California Republican Party officers (all white Caucasian and most are social rednecks).  However, such breaches of integrity and respect are prolific, mostly the rule, not the exception. We are no longer electing from high standards of public leadership qualifications, but out of desperation to lure candidates with disposable campaign cash, insatiable egos and under the delusions that simply attacking  Democrats  is synonymous with actual leadership performance.  Unless we grassroots Republicans assert our mandates for higher standards, we will be stuck with the whims of some Tea Party movement; and politically ambitious individuals mistaking narcissism, aloofness and arrogance as social class. Maybe an acting course can help many of them effectively pretend to have charisma. Too many overpriced Republican campaign consultants and spin doctors seem to do a lousy job.

The problem is that many Republican official representatives and leaders, even at county levels, believe their role to just pontificate rules of behavior for others. They believe to be divinely or aristocratically immune from the need to exemplify role model behavior or be held accountable. Talking at us, not with us is a typical Republican tradition which is sowing Republican middle class warfare conflicts.  It is the arrogance of many Republican officials, salaried or not, to presume that blind allegiance to the Republican Party ideals must transfer even to defective Party leaders. We have a moral and ethical right to support the ideological merits of being Republican without being crucified for refusing to pay homage to a growing number of politically ambitious Republicans whose only public leadership qualification lies in their embellished or fictional resumes.

Gail E. Neira
Lifelong conservative Hispanic American active Republican
San Francisco native, past publisher, managing editor, diplomatic embassy aide

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