Pork - Federal Govt Approved Pork

Congress recently passed a defense spending bill that includes more lovely wasteful spending! Here's a sample:


Congress added in 1,720 pet projects, including:

∙$5 million for a visitors center in San Francisco
∙$23 million for indigent health care in Hawaii
∙$18 million for the Edward Kennedy Policy Institute in Massachusetts
∙$1.6 million to computerize hospital records in Oakland
∙$47 million for anti-drug training centers around the country
∙$20 million for the World War II Museum in Louisiana
∙$3.9 million grant to develop an energy-efficient solar film for buildings
∙$800,000 for minority prostate cancer research
∙$3.6 million for marijuana eradication in Kentucky
∙$2.4 million for handicap access and a sprinkler system at a community club in New York

Plus they are building C-17s and destroyers that the Pentagon neither needs nor wants all because they protect jobs in some key lawmakers' states.

Proud to be an America!

Sir Patrick

Patrick Stewart will soon be a knight...

Terror In The Skies

Apparently the man that recently attempted to blow up a plane was being tracked by the CIA. The CIA was putting together a report on this individual, but didn't distribute because it was waiting on photos. We have been spending lots of money, delaying travelers, and just generally making flying much more difficult all in the name of increasing security...seems like it's not working.

I for one don't feel all that much safer - because we have not been screening smart.

The Fed - Part 1 (Lender of Last Resort)

The Federal Reserve System in the United States is the most intrusive part of our federal government and is probably one of the least understood by the public. Many of the macroeconomic and financial market distortions we experience have their root cause in the Federal Reserve.

Recently there has been a lot of anger and outrage over the actions taken by the Fed – particularly bailing out banks. This anger has come from frustration at the seemingly endless power of the Fed that is very loosely regulated by Congress. The anger and frustration is very justified, but the actions being discussed (oversight by Congress) will only make the situation much worse. The only permanent solution is to eliminate the Fed entirely.

How would our economy look without the Fed? In order to answer that question we need to look at exactly why the Fed causes problems. This is a topic that has divided economists for decades and most mainstream economists are currently drinking the central bank kool-aid. The Federal Reserve has two major responsibilities: regulator and lender-of-last-resort to banks and conductor of monetary policy. These two responsibilities are separate and yet closely integrated.

The Fed is a lender of last resort for depository institutions (traditional banks) by legislation and through practice and precedent has extended this power/responsibility to investment banks and other financial institutions in general. As lender of last resort the Fed is supposed to safeguard our lending institutions by preventing bank runs. This task is divided into 2 parts: the FDIC guarantees deposits and the Fed stands ready to lend. In the event a bank were to experience withdrawals that exceeded capital on hand and the reserves the bank is required to keep on deposit with the Fed the bank is able to seek funds from other banks through the Federal Funds market (a market of interbank lending managed by the Fed) or from the Fed itself at the discount window. The idea is that banks will not fail if their deposits are backed by the FDIC and they can always get capital loans from the Fed. This is supposed to help prevent the public from starting bank runs and stabilize our financial system.

This system is of course seriously flawed. Most people can readily see the flaw in this system if put another way. Suppose you tell your children that you demand they learn to live on a budget for the year. You tell them you expect them to manage it wisely, but if they don’t you will bail them out. I can imagine most of you see the potential flaw here. It is really no different for banks. They take our deposits and are supposed to manage them responsibly – lending to facilitate investment, but not lose all our money so we can get it back on demand. The risk here is of course that if everyone asks for their money at once, because they have lost faith in the bank, the bank will of course fail. Banking lending only works because we have confidence in our ability to get our money back. The Fed basically says to banks we will watch over you, but you are free to try and make profits oh and if you lose it all we will lend you money to bail you out. It is kind of a heads-you-win/tails-I-lose situation. The bank has little incentive to manage its risk effectively. This has led to excessive lending, over use of debt, and high risk gambling by our banks because they believed and we proved they were too big to fail. The major issue with this recent crisis wasn’t the bailouts (by the time we got here it was too late, we had to bail them out or the whole system would fail) but it was sticking with a system that encouraged the behavior that got us here.

When we create a system that allows banks to benefit when they win and face virtually zero consequences when they fail we should not be surprised that it doesn’t turn out so well. Removing the Fed would of course fix this messed up incentive system.

Terror In The Skies

Another person tried to blow up another plane. This time he failed...

The insane thing about all this is that now riding on a plane will be even more difficult than it is now. Security will be extra tight and in 3 months we will be where we are today again until someone else does something stupid. The major question is how safe should we strive to be? At what point does the task of getting through security and complying with rules while in the air make flying so difficult that no one will want to do it. I dare say that for anyone with small children that point is probably now.

I am all for being safe and preventing terror, but for all the measures we have taken how much safer are we truly. It seems that for all of our stronger security measures we are not really that much safer...because you see we lack the will to do what must be done to be truly safe. In the interests of being politically correct we do not put additional scrutiny on passengers from nations that tend to be originators of terrorists. Until we will dedicate ourselves entirely all we get are frustrations and minor improvements in security.

The Euro-Zone Challenge

Greece is facing a serious financial crisis – with a current national budget deficit of ~13% of GDP – Greece is running about 10% over the GDP deficit limit set by the Euro-Zone of 3%. Greece’s debt is growing so fast and spending exceeds revenue by so much that several ratings agencies have downgraded their sovereign debt to near junk levels.
Greece’s malaise is going to test the staying power of the EU’s rules and resolve. Technically Greece’s debt rating is below the minimum (A-) that the European Central Bank (ECB) is supposed to accept as collateral for loans. This will cut Greek banks off from an important source of funds. The ECB must decide whether to bend the rules and bail Greece out or accept the risks to the Euro of Greece’s ailing fiscal picture. The major catch here is that one of the initial concerns over the long-term success of the Euro-Zone was the large differences across the national economies and the ability of the ECB to set appropriate and sustainable monetary policy over such a diverse group. This will be the first major test of the ECB and the stakes couldn’t be higher because other nations are struggling under the current policies and if the ECB steps in to help Greece others will want their bailout too. In particular, Italy and Spain may be the most upset. For now all we can do is sit and wait, but I for one was skeptical of the Euro-Zone from the start.

Obama Care Updated

Democratic Senators may have reached a deal to move the health care bill to the floor for a vote. In order to get the 60 votes necessary to block republican attempts to stall the bill they have made all kinds of deals for the holdouts. This how you elected representatives serve you - making middle of the night deals to give some states huge advantages in exchange for votes, pushing through a bill against clear opposition from the majority of the public, and refusing to properly debate and consider it on the floor. This is the way Obama and the democrats do business - remind anyone of the USSR?

Obama Toys With More Stimulus

The President is "warming" to the idea of another round of stimulus to help create jobs. President Obama promised to create new jobs with the enormous $787 billion stimulus. Unfortunately that didn't work to well as the unemployment rate continued to climb. Now democrats are yearning for more spending and more deficits to create jobs. The catch here is that most of the $787 billion won't be spent until next year or the year after, so this package alone may hit the economy at a time when we no longer need it and could overheat or otherwise distort the economy.

The current administration's idea here seems to be that if at first you don't succeed just spend more! I feel sorry for my grandchildren already.

Economics Redux

Economics as a discipline may be on the verge of changing. Economics has long held to a belief that individual economic actors - be they individuals or corporations - are rational in there choices and actions. This assumption is not only a very strong one that has profound and fundamental impacts on all economic theories that adopt it, but it is also very convenient from a modeling and forecasting point of view. If we assume that all economic "actors" are rational that means, at its most basic level, that they evaluate all available information weighing costs and benefits and then select the action that maximizes the benefits per unit of cost. This is a very powerful assumption because it means that from a theoretical and mathematical point of view all the economist has to do is decide on what information is available and assign costs and benefits to the choices. Then arithmetic can determine the outcome or steady-state. There are obviously other issues with this approach aside from this assumption: not everyone views the costs and benefits the same, information is imperfect, and there exist time constraints on decisions just to name a few. Putting these aside there is another glaring problem with today's economic models - people are not strictly speaking rational.

The issue is that virtually every single human being is influenced to various degrees by their emotions and the emotions of those around them. It is likely true that the vast majority of us would make very rational choices when presented with simple clear cut costs and benefits - unfortunately this simply doesn't happen. Our emotions, perceptions, and attitudes greatly impact our decision making. Recognizing this one single fact shakes the foundations of virtually all mainstream economic models. Suddenly psychology and behavioral analysis become important factors in determining how someone will react to an economic choice instead of just cost/benefit analysis.

Behavioral economics is a new and growing field that attempts to work the eccentricities of the human psyche into economic models to allow us to better model the real world and predict behavior. If economics as a discipline can make this shift I believe it will go a long way to making economics more intuitive to the general public and restore economists credibility.

The Truth Behind "An Inconvenient Truth"

A recent Fox News article briefly covered the growing opposition to the showing of former Vice President Gore's film to school children as a part of science curriculum. It's about time that someone recognized this film for what is was - sensationalist and alarmist.

Health Care Debate Moves Forward

The health care debate appears to be moving forward in the Senate. It now appears that Democrats have secured the 60 votes necessary to break Republican efforts to stall the bill prior to open debate in the Senate. The bill is anything but a sure though. Many of the central leaning Democrats while supporting debate have as yet stopped short of actually stating they would vote for the bill. The debate will now center around how much the left leaning Democrats are willing to concede to the centrist Democrats to get the bill through.

The Decade in 7 Minutes

House Passes Health Care Bill

The House passed their version of a health care reform bill 220-215. The bill will cost an estimated $1.055 trillion over 10 years and it includes both an individual mandate and a public health care option. This represents perhaps the single largest intrusion of the federal government into the everyday lives of citizens and into our economy. The future of this nation and our economy now rests in the Senate.

CIT Files Bankruptcy, and Retailers Get Nervous

CIT's recent bankruptcy filing represents the 5th largest bankruptcy in US history with $71 billion in total assets on the books. CIT is a critical lender to retailers for inventory - especially around the holidays. Since CIT was only slightly smaller than GM and was larger than Chrysler it makes you wonder why it didn't warrant an Obama bailout...maybe because there are no unions working at CIT. You decide....

CIT Files Bankruptcy, and Retailers Get Nervous - Local News | News Articles | National News | US News - FOXNews.com

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The New Health Tax

Taxes are on the rise to cover your health care bill. At least that is the proposed method of paying for the new health care proposals. Congress wants to levy a 5.4% income tax on individuals making over $500,000 a year and couples over $1,000,000. This would raise the effective tax rate on these individuals by nearly 12.5% (a 32% increase) when you factor in other changes Obama wants to make. There are many reasons why taxing the heck out of the wealth is unhealthy for the economy, but this new health care tax has a much more glaring problem. It is not indexed to inflation. This means that each year as inflation slowly erodes the value of the dollar more Americans will be hit with this tax at ever lower income levels in today's dollars. This is not the first tax to suffer this fate - remember the AMT or Alternative Minimum Tax.

Eventually this new health care tax will begin to fall on middle-class Americans as inflation lifts incomes in dollar value but without adding buying power. This will end up being another thing Congress has to "fix" every year before tax time. It seems to me that given our experience with the AMT this is just a covert way to raise taxes year after year.

Unemployment Tops 10%

The official rate of unemployment is 10.2% - unofficially probably much closer to 20% or 25%. Need I say more.....

Cash For Clunkers Impact!

It was not too difficult to see how the cash for clunkers program would give people a reason to buy a new car. Apparently it was difficult to get the intended result out of the program. This was supposed to be a win-win program. Not only would it drive sales of cars, which in theory would save jobs and create economic growth, but it would also help save the environment by giving people an incentive to buy fuel efficient vehicles. What could possible go wrong?

The latest data out about the program shows that most people traded in trucks for guess what trucks not tiny hybrids. The net impact of the small improvement in fuel economy was probably out weighed by all the energy used in advertising the program. And we want the government to provide our health care because?

Inflation Nation (Coming Soon!)

The FED is intent on holding interest rates at near zero despite confidence that the economy is recovering. This dedication to easy money is perhaps the greatest single risk to our economy today. If the FED gets it's timing wrong (which it almost always does) we could easily end up with sky high inflation over the next decade that will destroy investor wealth, asset values, and retirement savings. By the time they see it coming it'll already be too late!

Health Care Proposals In A Nutshell

The table below shows the highlights of the various health care reform bills or click this link for the full web-page:

Features	Senate bill	House Democratic bill	House Republican outline
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Who is covered	The Senate Finance version covered an estimated 94% of Americans. Illegal immigrants would not receive government benefits.	Around 97% of non-elderly residents (those not covered by Medicare, which kicks in at age 65) would be covered. Nearly half the 17 million non-elderly residents who remain uninsured would be illegal immigrants.	Aims to make insurance affordable and accessible to all. There aren't estimates about how many additional people would be covered.
Cost	Senate leaders aim to keep it under $900 billion over 10 years.	The Congressional Budget Office estimates the net cost of the proposal (less payments from employers and uninsured individuals) to be $1.042 trillion over 10 years.	Unknown.
How it's paid for	Fees on insurance companies, drug makers, medical device manufacturers. Tax levied on insurance companies, equal to 40% of total premiums paid on insurance plans costing more than $8,000 annually for individuals and $21,000 for families (that number may rise to $23,000); retirees over age 55 and people in high-risk professions may be allowed to have somewhat more valuable plans before they're taxed. Cuts to Medicare and Medicaid. A fee on employers whose workers receive government subsidies to help them pay premiums. Fines on people who fail to purchase coverage.	Approximately half of the cost of the plan is financed through about $500 billion in cuts to Medicare and Medicaid. The remaining costs are financed through new income taxes on single people making more than $280,000 a year, families making more than $350,000; penalties paid by individuals and employers who don't obtain coverage.	No new taxes are proposed, but Republicans say they want to reduce Medicare and Medicaid fraud.
Requirements for individuals	Almost everyone must get coverage through an employer, on their own or through a government plan. Exemptions for economic hardship. The Senate Finance Committee version required individuals and families to buy coverage as long as it cost no more than 8 percent of their income. Those who are obligated to buy coverage and refuse would face a fine of perhaps $100 in the first year of the program, likely increasing over time.	Individuals must have "acceptable health coverage" requirement enforced through tax penalty with hardship waivers.	No mandates.
Requirements for employers	Not required to offer coverage, but companies with more than 50 full-time workers would pay a fee as high as $750 multiplied by the total size of the work force if the government ends up subsidizing employees' coverage.	Employers must provide insurance to their employees or pay a penalty of up to 8% of payroll. Companies with annual payroll under $500,000 annually are exempt.	No mandates; small business tax credits are offered. Employers are encouraged to move to "opt-out" rather than "opt-in" rules for offering health coverage.
Subsidies	Tax credits for individuals and families likely making up to 400% of the federal poverty level, which computes to $88,200 for a family of four. Tax credits for small employers.	Individuals and families with annual income up to 400% of poverty level ($88,200 for a family of four) would get sliding-scale subsidies to help them buy coverage. The subsidies would begin in 2013.	Tax credits are offered to "low- and modest-income" Americans. People who aren't covered through their employers but buy their own insurance are allowed to take a tax deduction. Low-income retirees younger than 65 (the eligibility age for Medicare) would be offered assistance. Subsidies will not be available for illegal immigrants.
Benefits package	All plans sold to individuals and small businesses would have to cover basic benefits. The government would set four levels of coverage: Under legislation passed by the Senate Finance Committee the least generous would pay an estimated 65% of health care costs per year; the most generous would cover an estimated 90%. Those numbers could change.	Through a new Health Insurance Exchange open to individuals and, initially, small employers; it could be expanded to large employers over time. States could opt to operate their own exchanges in place of the national exchange if they follow federal rules.	Insurers would have to allow children to stay on their parents' plan through age 25.
Government-run plan	Reid proposed a new federal insurance plan this week with payment rates to providers negotiated by the Health and Human Services secretary. Unlike the House bill, states could opt out of the plan. It's not clear the proposal commands enough votes to survive, so it could be replaced by a less sweeping version of a public plan. The bill also would create nonprofit, member-owned co-ops to compete with private insurers.	A committee would recommend an "essential benefits package" including preventive services, mental health services, oral heath and vision for children; out-of pocket costs would be capped. The new benefit package would be the basic benefit package offered in the exchange and over time would become the minimum quality standard for employer plans. The bill is likely to include a compromise version of the public insurance option with rates negotiated with health-care providers, instead of based on Medicare rates.	No public plan.
How you choose your plan	Self-employed people and small businesses could pick a plan offered through new state-based purchasing pools. Employees would be generally allowed to keep their work-provided coverage.	A new public plan available through the insurance exchanges would be set up and run by the secretary of Health and Human Services. Democrats originally designed the plan to pay Medicare rates plus 5% to doctors, but the version that passed the Energy and Commerce Committee instead would let the HHS secretary negotiate rates with providers.	No new purchasing exchange or marketplace is proposed. Health savings accounts and flexible spending plans would be strengthened.
Changes to Medicaid	Income eligibility levels likely to be standardized to 133% of poverty ($30,000 a year for a family of four) for all parents, children and pregnant women. States could negotiate with insurers to arrange coverage for people with incomes slightly higher than the cutoff for Medicaid.	The federal-state insurance program for the poor would be expanded starting in 2013 to cover all non-elderly individuals with incomes up to 133% of federal poverty line.	People eligible for Medicaid would be allowed to use the value of their benefit to purchase a private plan.

Republicans Win New Jersey and Virgina

Republicans won gubernatorial races in Virgina and New Jersey yesterday! The loss of New Jersey, a typically blue state, is perhaps the most telling and damaging to Obama's political capital since he threw personal support behind the democratic incumbent. The media will undoubtedly begin drawing all sorts of conclusions from these victories - some bad, some good. These wins almost certainly do indicate rising voter concern with the direction of this nation and the current administration. They are by no means a guarantee of upcoming republican landslides though and the GOP needs to continue to hold true its founding principles of conservatism, small government, and respect for individual liberties if it hopes to gain momentum. All I can say is be careful what you wish for because republican victories mean the new republican officials have to deliver on promises - and that may turn out to be a tall order.

Ron Paul vs. Michael Moore

Check it out....

Halloween Fun

Check out this great costume...you have to watch the whole thing!

Another good one...

The New FED

The long arm of the federal government just seems to keep growing. At least it will if our current President and Congress have their way. New proposals for increased financial regulation and expanded powers for the FED were recently unveiled. The proposed changes would give the FED unprecedented power to dictate and control firms and the financial markets. Among the powers would be the ability to order firms to sell or spin off assets if the FED deemed them to be too large. The FED would also be able to force financial firms to assist in the bailout of failing competitors or order them to stop doing certain activities. All of these powers could be exercised by the FED if they deemed any financial firm's size or actions to represent a threat to the stability of the markets.

Not exactly a black and white sort of thing. The FED would also have great discretion in applying the rules to individual firms. It seems to me that giving an arm of the government the ability to order firms to bail out competitors, sell assets, stop conducting certain activities, or even split up is something much closer to communism than capitalism. Why would any firm want to innovate or take risks in the financial sector if they could be forced to stop and sell assets or to pay to unwind failed competitors? The result will be decreased financial innovation, decreased market efficiency, and generally less access to capital. This is another step in a long line of unprecedented intrusions into the free market by our government and a stark deviation from what America has stood for the past 200 years or so.

Medicare Rip Off

Medicare fraud is quickly becoming one of the largest crimes in America. Totaling nearly $60 billion a year in fraud. This is an excellent video segment that shows just how big the problem is. We should think about this long and hard before we hand over another trillion dollars in health care spending to these folks!



Watch CBS News Videos Online

More Obama Care Maddness

More news on the health care front! How can we possibly pay for all this health care "improvement?" One idea is just to force everyone to buy insurance and to make it all fair the old and young should pay the same price, which of course means young adults will pay much more for one-size-fits-all policies with coverage they don't need. Read all about it....

US Government Approved Paychecks

President Obama's so called "Pay Czar" unveiled new compensation rules for firms that received large sums of government bailout money. The rules reduce total compensation by 50% on average and in some cases salaries have been cut by up to 90%! The current administration seems intent on invading every aspect of private and corporate life. The goal they cite is to ensure that companies align pay with proper incentives and enable firms to repay the money faster.

A close look reveals several flaws with this plan. First, aligning compensation with proper incentives is a very difficult task and it is not likely to work with cookie cutter policies such as those proposed by the "Pay Czar." Second, one of the changes made by these compensation rules was to make stock awards very long-term. The issue with long-term stock options is that over a long period of time many factors can affect a stock's price that are not in the control of the executives of the company. This means that long-term awards are likely to have little to no incentive effect as there value is likely to be viewed by the employee as beyond his/her control. Third, by limiting the compensation allowed to be paid in some of the most competitive jobs in America the government has put firms that borrowed money at a significant disadvantage when it comes to retaining and finding talent. This is likely to make it more difficult instead of easier for these firms to repay the government.

This is just another example of poor policy making and short-sightedness by our current administration.

Health Care Continued...

The Day Obama Care Died

Individual Mandate Exposed

One of the more controversial aspects of Obama's health care plan is the so called individual mandate. If such a mandate passed the federal government would basically make you buy health insurance or pay a fine of some sort. This would be one the greatest encroachments on individual liberty since prohibition. Interestingly enough pretty much all of Congresses power under the Constitution comes from either an amendment (like prohibition) or from article one where Congress is granted to power to regulate interstate commerce. This clause has been interpreted very differently over the years - with the trend toward an ever broader definition. As a recent Fox News article points out an individual mandate would be imposed simply for being on this Earth and not because of any commercial or economic activity - which may make such a law unconstitutional. I'll be reading more on this topic!

Iran Tests More Missiles

Iran is testing more missiles after news of a secret Uranium enrichment facility broke this week. You can read the story at The Wall Street Journal Online.

Health Care Maze

The diagram below is supposed to help you navigate through the government health care system:
Go to Diagram

Iran's Nuclear Aspirations

The cat is out of the bag and I must say I am unsurprised. Iran has a secret uranium enrichment facility - of course it's only for peaceful purposes. Which if that were true then one might ask: why was it secret?

Iran will likely be a nuclear power in short order if something is not done to stop them and the US, Britain, and France are not too happy about it - not to mention Israel. Israel has repeatedly warned that Iran is pursuing nuclear weapons over the years and guess what they were right. I for one don't find this surprising at all I mean if I were Israel and was located close to a country ruled by a dictator who had publicly called for my annihilation I would make it business to know if that nation had or was trying to build nuclear weapons.

No surprise either that Israel is not ruling out the possibility of preemptive strikes against Iran perhaps all the more so since our President announced he doesn't support Israel fully. This is one international issue that could quickly become a military situation and I question the qualifications of our President on this one.

Health Care Update

There is so much going in the health care debate it is almost impossible to keep track of it all....

President Obama is facing strong headwinds for his vision of health care reform. Americans are overwhelmingly against a public option and in many other ways against other portions of Obama's proposal like an individual mandate. The President has been addressing Congress and the American people trying to sell his ideas. He has even signaled a willingness to consider other proposals as becomes clearer that the public option may lack the votes to pass. For more on Obama's willingness to deal click here.

Recently Representative Joe Wilson shouted out to President Obama "You lie!" during an address to a joint session of Congress. The remark has been decried by both sides of the aisle as unprofessional and inappropriate prompting Representative Wilson to apologize. While I admit it was somewhat rude I am glad that someone is willing to tell the truth in the open. I think it's high time we put some of the political etiquette away and just got down to business.

One of the biggest reasons the democrats claim we need a pubic health care option is to infuse competition into the health care system and drive down prices. If only it were that simple! Our current system is a hodgepodge of government regulation and private industry that will distort any free market policies or approaches. Also, health care is not a traditional type of service, as an economist would say it is not exactly a normal good. What this means in practice is that purchasing decisions and supply decisions are not as straightforward for health care as say for oil changes, hair cuts, clothes, and the like. Why because health care is complicated and most consumers have very limited information upon which to base their decisions because they are not - well doctors. This means that simply adding more competition doesn't always result in lower prices. Take the Dallas area as an example. The Dallas Morning News recently ran an article that shows how health care in Dallas is very expensive when compared to the rest of the country despite the fact that there is a lot of competition. The article touches on some of the reasons behind this. The simple fact of the matter is that we cannot solve a problem as complex as health care by simply adding more insurance options.

Here's a good one...Under one version of the health care package working its way through Congress all individuals would be required to buy health care or pay a fine through higher income taxes. If you don't well they'll just throw you in jail where the health care is free! Anyone see a flaw here?

Missile Defense Redirected

President Obama recently decided to change tactics on missile defense. The Bush administration had pushed for the placement of missile defense batteries in Eastern Europe to counter Iranian missile development efforts. The Obama administration seems to favor smaller, cheaper systems that utilize existing Aegis and Patriot systems.

Though the President denies it -some suggest that the change in policy was an effort to save money and gain political capital with Russia (who never liked the idea of American missile defense batteries in Eastern Europe - I think we should be asking why). Somehow when Obama was elected I just felt less secure and this change in policy doesn't make me feel much better. Saving taxpayer money is always a good thing and a system that is complex and expensive must always be carefully considered when there exist cheaper second best options.

There are a couple of things that I take issue with here. First, it is not clear to me that the decision really makes America just as safe as the option originally put in place by the Bush administration. Second, I find it extremely misguided that the current President would move to scrap a defense project to save some money when he is spending hand over fist elsewhere on arguably less important things. This also is not the first time he has done this though - remember the F-22?

You can read a little more about this at Fox News.

Obama Care Cont....

The debate over health care has not slowed down at all. The democrats are pushing to get something through Congress as fast as possible, so is the President, while the republicans are doing everything they can to slow down the process. I for one think that we should take some more time and think about what we are doing. The huge cost of the suggested programs should dictate careful consideration. Unfortunately what has happened is that the debate has shifted to the sharing of anecdotes, which often are not even accurate. Just ask Obama....

The Power of Trust

Trust is everything. Particularly in an economy built on credit - as we have come to find out. The current economic crisis started out with a bursting of the housing bubble that led to the near collapse of our financial markets. The lack of trust that froze our credit markets nearly paralyzed our economy. The question we must now answer is how to gain back that trust. The answer, at least according to Dov Seidman, is to trust others.

This is the theme of his piece entitled "Building Trust by Trusting." It ran in the September 7th edition of Business Week.

He takes an interesting approach to the concept of trust at all levels of business. From allowing employees to take as much vacation as they feel appropriate to providing severance to employees who lose their jobs. Definitely worth a read so check it out.

Health Care Reform Update

It appears that the efforts of Americans to get out to town hall meetings and tell their elected officials what they think of health care reform were not in vain. The article below is from Fox News, you can find the complete article here, and it shows some of the ways in which the public outcry might be changing the legislation. There is a chance that the public health care option may no longer be on the table! There are still lots of other terrible ideas in the proposed bill, but let's take a moment and celebrate this small (though still tenuous) victory. See below:

WASHINGTON -- The Obama administration's bottom line on a government health insurance option blurred Sunday as White House officials stressed support but stopped of short of calling it a must-have part of an overhaul.

As President Barack Obama prepares for a Wednesday night speech to Congress in a risky bid to salvage his top domestic priority, no other issue is so highly charged. Obama's liberal supporters consider the proposal for a public plan to compete with private insurers do-or-die.

Republicans say it's unacceptable. It's doubtful the public plan can pass the Senate.

White House political adviser David Axelrod said Obama is "not walking away" from a public plan. But asked if the president would veto a bill that came to him without the option, Axelrod declined to answer.

The president "believes it should be in the plan, and he expects to be in the plan, and that's our position," Axelrod told The Associated Press.

Asked if that means a public plan has to be in the bill for Obama to sign it, Axelrod responded: "I'm not going to deal in hypotheticals. ... He believes it's important."

The biggest challenge Obama faces in his prime-time address is to take ownership of health care legislation that until now has been shaped by political conflicts in Congress. Lawmakers return this week from a summer break that saw eroding public support for an overhaul and contentious town hall meetings in their districts.

The idea of a public plan has become a symbol for the reach of government in a revamped health care system. Supporters say it would give workers and their families similarly secure benefits as older people now get through Medicare, while leaving medical decisions up to doctors and patients. The plan would be offered alongside private coverage through a new kind of purchasing pool called an insurance exchange. At least initially, the exchange would be open to small employers and people buying coverage on their own.

Insurers say they could never compete against the price-setting power of government. Employer groups warn it would undermine the system of job-based coverage.

A public option -- or government plan -- has come to mean different things to different people. Some say it could be a public trust and independent of the government: nonprofit co-ops could serve as a check on insurance companies. In its original form, supporters envisioned a Medicare-like plan in which the government pays the bills. But it would be financed through premiums paid by beneficiaries, not taxpayer dollars.

While there's strong support for a public plan among House Democrats, the votes appear to be lacking in the Senate.

Democratic Sen. Ben Nelson of Nebraska, a swing vote on health care legislation, said the only way a public plan should be included is as a last resort. The government option would only be rolled out if after a few years, private insurers have failed to increase competition and restrain costs.

"If somehow the private market doesn't respond the way it's supposed to, then it would trigger a public option, or a government-run option," Nelson said on "State of the Union" on CNN. "But only as a fail-safe backstop."

White House spokesman Robert Gibbs, who joined Axelrod in a one-two administration punch on the Sunday talk shows, said the president believes a government plan would be "a valuable tool." But Gibbs danced around the question of whether it has to be in the final legislation.

"We're not going to prejudge what the process will be when we sign a bill, which the president expects to do this year," he said on ABC's "This Week."

The uncertainty over the administration's position isn't new. Health and Human Services Secretary Kathleen Sebelius said last month that a government alternative to private insurance is "not the essential element" in revamping the system to guarantee coverage for all and try to curb unsustainable costs.

On Friday, during a call with prominent liberal House members, Obama refused to be pinned down on the public plan, a participant told The Associated Press. "It was unclear as to whether the public option is on or off the table," said the official, who spoke on condition of anonymity because of the sensitivity of the issue.

Independents who helped propel Obama to the presidency are increasingly skeptical about his direction on health care. Unsubstantiated allegations that the legislation would promote euthanasia grabbed headlines last month. But beneath such controversies, voters appear most concerned about the scope and costs of the bill -- around $1 trillion over 10 years. Obama has said he won't sign a bill unless it is fully paid for and doesn't add to the deficit.

Zo's Thoughts

The video below show's Zo's thoughts on torture. Enjoy!

The Rise of Obama

This excerpt is from The Lonely Conservative it gives a brief chronicle of how Obama ended up as Commander-in-Chief. See the whole post here.

Obama was being groomed for decades.

They helped him get into Columbia, and then into Harvard (according to Percy Sutton).

They got him his lawyering intern-job where he met Michelle – the daughter of a long-time Chicago machine member.

They got him his first “community organizer” job – also in Chicago.

They ran him on the New Party line – a socialist party backed by the SEIU.

They got him on the Democrat Party ballot for state senator (a stepping stone job if ever there was one) – and got his opponents off the ballot to guarantee a win in his state senate run.

(More on the ruthlessness with which Obama’s supporters cleared the path for him here).

(More here and here.)

While in the Illinois State Senate, Obama never took on the machine or achieved any important legislation.

He never did anything of import in the Illinois Senate – except for defending and voting for infanticide.

Obama’s suporters – including the SEIU and ACORN – did the same thing for his US Senate run as they did for his Illinois state senate run (and Obama won a SURPISE landlside… hmmm…) – and they even got rid of the GOP candidate who might’ve given Obama a run for the money.

THEN… then they got him an important time slot at the Kerry Convention. AND THIS IS WHERE THE TIMING GOT PUSHED WAY WAY UP:

His Kerry-speech won him enormous attention and extraordinary accolades they didn’t expect, and this is when they started to think they might be able to stage a run for the POTUS in 2008 – as a trial run, practice – never expecting to win.

Health Care News

Georgia is working on an amendment to their state Constitution to help mute the impact of any federal health care bill. I admire their creativity and determination - check out the video.

Fox News Sunday did a health care round table that is pretty interesting. You can catch the video below.

John Stossel on Health Care

This short video is an excerpt from 20/20. Just make sure you watch the whole video!

Health Care Video

This video shows a representative giving a House committee his two cents on health care. It's great...check it out!

The Americans By Gordon Sinclair

The Americans

The United States dollar took another pounding on German, French and British exchanges this morning, hitting the lowest point ever known in West Germany. It has declined there by 41% since 1971 and this Canadian thinks it is time to speak up for the Americans as the most generous and possibly the least-appreciated people in all the earth.

As long as sixty years ago, when I first started to read newspapers, I read of floods on the Yellow River and the Yangtse. Who rushed in with men and money to help? The Americans did.

They have helped control floods on the Nile, the Amazon, the Ganges and the Niger. Today, the rich bottom land of the Misssissippi is under water and no foreign land has sent a dollar to help. Germany, Japan and, to a lesser extent, Britain and Italy, were lifted out of the debris of war by the Americans who poured in billions of dollars and forgave other billions in debts. None of those countries is today paying even the interest on its remaining debts to the United States.

When the franc was in danger of collapsing in 1956, it was the Americans who propped it up and their reward was to be insulted and swindled on the streets of Paris. I was there. I saw it.

When distant cities are hit by earthquakes, it is the United States that hurries into help... Managua Nicaragua is one of the most recent examples. So far this spring, 59 American communities have been flattened by tornadoes. Nobody has helped.

The Marshall Plan .. the Truman Policy .. all pumped billions upon billions of dollars into discouraged countries. Now, newspapers in those countries are writing about the decadent war-mongering Americans.

I'd like to see one of those countries that is gloating over the erosion of the United States dollar build its own airplanes.

Come on... let's hear it! Does any other country in the world have a plane to equal the Boeing Jumbo Jet, the Lockheed Tristar or the Douglas 107? If so, why don't they fly them? Why do all international lines except Russia fly American planes? Why does no other land on earth even consider putting a man or women on the moon?

You talk about Japanese technocracy and you get radios. You talk about German technocracy and you get automobiles. You talk about American technocracy and you find men on the moon, not once, but several times ... and safely home again. You talk about scandals and the Americans put theirs right in the store window for everyone to look at. Even the draft dodgers are not pursued and hounded. They are here on our streets, most of them ... unless they are breaking Canadian laws .. are getting American dollars from Ma and Pa at home to spend here.

When the Americans get out of this bind ... as they will... who could blame them if they said 'the hell with the rest of the world'. Let someone else buy the Israel bonds, Let someone else build or repair foreign dams or design foreign buildings that won't shake apart in earthquakes.

When the railways of France, Germany and India were breaking down through age, it was the Americans who rebuilt them. When the Pennsylvania Railroad and the New York Central went broke, nobody loaned them an old caboose. Both are still broke. I can name to you 5,000 times when the Americans raced to the help of other people in trouble.

Can you name me even one time when someone else raced to the Americans in trouble? I don't think there was outside help even during the San Francisco earthquake.

Our neighbours have faced it alone and I am one Canadian who is damned tired of hearing them kicked around. They will come out of this thing with their flag high. And when they do, they are entitled to thumb their nose at the lands that are gloating over their present troubles.

I hope Canada is not one of these. But there are many smug, self-righteous Canadians. And finally, the American Red Cross was told at its 48th Annual meeting in New Orleans this morning that it was broke.

This year's disasters .. with the year less than half-over… has taken it all and nobody...but nobody... has helped.

Town Hall Meeting

This video was shot at a town hall meeting about health care. Some how I feel like that majority of Americans are against this bill...

The Unemployment Paradox

The unemployment rate dropped in July, from 9.5% in June to 9.4% in July. Many people have found the drop to be odd given that the economy wasn't really doing any better. Even more perplexing is that now that we seem to on our way out of this mess economists are warning that unemployment is still likely to rise to 10% and remain high through 2010. These same economists are projecting economic growth in 2010 and the second half of this year. How does this add up?

The unemployment rate is calculated by the Bureau of Labor Statistics (BLS) on a monthly basis. The formula is very straightforward: Unemployed/Labor Force. The catch is in the definition of labor force. The BLS defines the labor force as those currently working or actively seeking work. Unemployment is then those that are in the labor force but not currently employed. What happens is that when workers become discouraged and stop looking for work they are magically no longer unemployed because they are not a part of the labor force. The drop from 9.5% to 9.4% was primarily due to people stopping their search for work. Since those that fall out are 100% unemployed (by definition) when a large number of people give up the search the unemployment rate can drop or fail to rise month on month even as the economy sinks.

In fact there are some estimates that put the unemployment rate at closer to 15% if the so called "discouraged job seekers" were still included. This is the key to understanding how the economy can improve and unemployment rise slightly or stay high. As more jobs become available and companies start to hire, the "discouraged workers" suddenly start looking for jobs again. That adds more unemployed people to the labor force thus increasing the proportion of unemployed in the labor force - unemployment rate rises. Eventually the number of people becoming undiscouraged drops and the unemployment rates starts to stagnate and then slowly drop. This all occurs well after the economy is in recovery. This effect will likely be magnified this time since the recovery is not expected to be swift.

This is just one example of how the government, and some economists, can lie with statistics. Now you know!

Monday Must Read

8/24/2009:

Business Week ran a special on optimism in this economy that includes several very interesting articles. They might shed some light on where we go from here and how to be prepared for the best. Worth a read.

Fox News has an article detailing how social security payments will shrink in real terms for the first time since 1975. The trustees have opted to forgo the cost of living adjustments for the next two years. This is in response the negative CPI (consumer price index) that has resulted from this severe down turn.

Health Care

The health care debate rages on! It is all but certain that some kind of legislation will pass, but some of the more irksome proposals may not make the final cut. Pulling the government run option seems to be gaining momentum as our senators and representatives struggle to deal with the negative public opinion. The town hall meetings are turning violent in some cases and unruly in most as citizens are voicing their disapproval of such measures. Fox News ran an article not too long ago about violence at a town hall meeting in Florida...check it out.

Interestingly there is some debate in France about the enormous cost of their health care system. The Wall Street Journal ran an article about it not long ago. The article describes how France has struggled to keep up its standard of care as costs have risen. The problem is that the government cannot pay for it, but citizens now expect it as a right along with freedom of speech or religion. The result has been reduced services and locations leading to even longer lines and angry people. The whole article is available here.

One item that no one wants to touch is the impact of illegal immigrants on health care costs. There are lots of studies that show that illegal immigrants almost exclusively use emergency rooms for basic care, because under a 1980s law they cannot be refused treatment even if they cannot pay. This is driving up health care costs nation-wide. The political nightmare that is immigration has basically assured that not only will we pass some version of this monstrosity but will almost certainly not address one of the major drivers of health care costs - illegal immigrants.

It's hard to say for sure what will come out of all of this debate, but one thing is certain if we pass a bill anything close to what is sitting in Congress now it will cost trillions and our children and grandchildren will have to clean it up when the house of cards comes crashing down.

Obama Destroying America

The Lonely Conservative posted an interview between Jennifer Harper and Jon Voight about the Obama Administration. The partial text is below or click here for full text.

“We are witnessing a slow, steady takeover of our true freedoms. We are becoming a socialist nation, and whoever can’t see this is probably hoping it isn’t true. If we permit Mr. Obama to take over all our industries, if we permit him to raise our taxes to support unconstitutional causes, then we will be in default. This great America will become a paralyzed nation.”

Be outraged, Mr. Voight advises. [...]

“The real truth is that the Obama administration is professional at bullying, as we have witnessed with ACORN at work during the presidential campaign. It seems to me they are sending down their bullies to create fist fights among average American citizens who don’t want a government-run health care plan forced upon them,” Mr. Voight says. “So I ask again. Is President Obama creating a civil war in our own country?”

Of course, years of socialist government in England have not produced anything resembling a totatlitarian state. But those who argue that this has disproved the thesis of the Road to Serfdom have really missed one of its main points; that the most important change which extensive government control produces is a physiological change, and alteration in the character of the people. This is necessarily a slow affair, a process which extends not over a few years but perhaps over one or two generations. The important point is that the political ideals of a people and its attitude toward authority are as much the effect as the cause of the political institutions under which it lives. This means, among other things, that even a strong tradition of political liberty is no safeguard if the danger is precisely that new institutions and policies will gradually undermine and destroy that spirit. The consequences can of course be averted if that spirit reasserts itself in a time and the people not only throw out the party which has been leading them further and further in the dangerous direction but has also recognized the nature of the danger and resolutely change their course. There is not yet much ground to believe that the latter had happened in England.

The truth is scary!

Reagan's Views On National Health Care

Ronald Reagan was perhaps the greatest conservative President in modern America, but nearly 2 decades prior to that he was already fighting against the precursor to today's health care debate. The audio below is a recording of a speech by Mr. Reagan that is perhaps the best articulated rebuttal to nationalized health care I have ever heard. There are no cost figures, economic analysis, or opinion polls just plain old logic and historical fact. Please share this with everyone you know.

Obama Speaks At Town Hall Meeting

The following videos show some clips of Obama talking at a town hall meeting on health care...any one notice anything odd? Why does no one disagree with him...all the other town hall meetings on this topic have had disagreement. Enjoy!

Monday Must Read

8/10/2009:

The Wall Street Journal ran an article about Treasury Secretary Geithner asking Congress to raise U.S. debt limit. This is is exactly what the democrats are hoping for a carte blanche to borrow money. I don't know what is worse that we will likely reach the limit of $12.1 trillion by this fall or that Congress will probably raise it.

At least one democratic Senator is open reason! Fox News is reporting that the number 2 democrat in the Senate is open to health care reform without a public health care option. At least maybe they will pass a bill that isn't a death sentence for the federal budget - even if it isn't perfect.

Is Obama Listening in on You?

A Fox News article from today is drawing some attention to an unusual request from the Obama administration. The White House apparently asked supporters to e-mail "fishy" blog posts, e-mail chains, etc to a White House e-mail address. There are no readily available details on what the White House would do with such information. It is just scary that the administration of a United States President would ask our citizens to report political communications to the government. The request has spawned outrage and ridicule from conservative radio hosts and commentators. Republican Senator John Cornyn (Texas) has even asked the Obama administration to provide details on how it would use such information. It seems to me that maybe the White House is making a list of those that cooperate with the forced socialization of America and those that do not. This is something that should outrage all Americans. I for one would love to hear what President Obama is planning on doing with any information collected through this request.

Read the article here.

Monday Must Read

8/3/09:

The House is preparing to vote on the Health Care reform bill now that it has cleared all panels and committees. The Wall Street Journal had a brief article on it this week that is worth a read.

Fox News has an article discussing Obama's change of heart on taxes. I am sure I am not the only one unsurprised that Obama is considering raising taxes across the board. Something he campaigned against doing.

More Obamacare News

This video shows a window into the bureaucracy of government run health care. Oh the headaches! See the flow chart...

Democracy At Work

This is what makes our nation great...the ability to voice our opinions. Hopefully the not so silent majority will get the message across in time. Enjoy...

Health Care Destruction Marches On...

Your elected leaders are hard at work ruining the future of our nation. The article below is from Fox News:

WASHINGTON -- A key House panel approved its version of major health care reform package Friday night, setting the full House up for a debate on the legislation after its August recess.
The House Energy and Commerce Committee, which voted Friday, was the last of three panels to approve a health bill. The vote, 31-28, was made possible by a deal brokered earlier this week between Democratic leaders and conservative "Blue Dog" Democrats, though health reform legislation still is being held up in one Senate committee.
The Blue Dogs wanted to dial back a "public option" where the government offers health care for Americans. They also sought protections for small business owners and significant cost reductions.
All but five Democrats on the committee voted for the plan. The other Democrats, Reps. Charlie Melancon of Louisiana, Bart Stupak of Michigan, Rick Boucher of Virginia, Jim Matheson of Utah and John Barrow of Georgia joined all Republicans in opposing the legislation.
House Democrats intend to spend August selling the health care bill to the public. They hope the effort will enable them to call a vote on the measure before the whole House in September.
Republicans, on the other hand, intend to use August to gin up opposition to the plan.
Just before the final vote, both Democrats and Republicans stood to give a standing ovation to Rep. John Dingell, D-Mich., for whom the bill is named. Dingell is the most-senior member of the House, starting his career in the 1950s. Dingell's father preceded him in the House and worked on approving health care reform in the 1940s.

Health Care Video

The Obama Care Facts

More on Obama Care:

Fox News has a nice little list of facts vs. Obama. The truth is brutal. The benefits of Obama Care wither under scrutiny and the costs balloon.

The AMA originally opposed the President's efforts at health care destruction, but has changed its tune under pressure from the administration. This has resulted in an uproar from some members including some leaving the association.

I am sure there will be more on this later.

Political Stimulus

Have you been wondering where all of the $787 billion was being spent? I have wondered who was getting all that money - and now I know...

We were promised that this time if we gave Congress and the President the check book it would be different. Only the necessities they said - we will use this money to help those hurt by this recession. The goal was to stimulate the economy by sending money to the places and people hit the hardest. I don't know what is more sad that fact that we believed him or that I am not surprised by the outcome.

The only thing getting stimulated by the stimulus are the supporters of Obama. States that voted for him, cities that voted for him, states and cities that might vote for him next time. They all got huge piles of money- even if their economies were doing ok. Well that's politics folks- spend 1 year making promises and 4 years breaking them. Fox News has an interesting article on the political stimulus of America.

The Truth About Obama Care

We should all take note of this because if we don't act this will soon be a reality in America.
Enjoy:

Monday Must Read

7/20/2009:

You just have to listen to this. It is audio of an interview with a patients rights advocate about the details in the health care destruction package working it's way through Congress. Listen Up!

The health care brawl is alive and well in Washington. Finally, truth is coming out about the health care reform ambitions of our President. Finally, the public is catching on to the costs, inefficiencies, and pitfalls of government run health care. You can read about it in this Fox News article.

There is also a nice video of Obama....just a mistake or a little ray of truth - you decide.

Commentary on The Second Amendment

This article was sent to me and I think it a very nicely articulated expression of why the right to bear arms is important. Please take a few minutes and read it:

The Billings Murders
by Chuck Baldwin
July 17, 2009

By now, most Americans are familiar with the horrific murder of a Pensacola, Florida, couple by the name of Byrd and Melanie Billings. They were the parents of 17 children, 13 of whom were adopted--most of whom had disabilities. This case hits home with me, because they lived in my hometown of Pensacola. I did not know them personally, but they were fairly well known around town. Byrd was a well-to-do businessman who owned a used car business and financial loan service.

Byrd and Melanie were shot to death in their own home a week ago Thursday. So far, eight people have been arrested in the case: seven men and one woman. The seven men are each charged with two open counts of murder, and the woman is charged with accessory to murder after the fact. Law enforcement officials said yesterday that at least one more "person of interest" is being sought.

The Billings murder case was broken open by the fact that their home was equipped with a surveillance system, which recorded the vehicle used to transport the murderers to the home and probably much of the criminal activity inside the house, although the sheriff's office has not released the video of what was recorded inside the house. The video of the van led police to the suspects. Our State Attorney, Bill Eddins, says that all of the perpetrators who actively took part in the shootings are in custody. At least five of the men were inside the house when the murders took place; and police said the killers were in and out of the house in four minutes.

In a news conference yesterday, Escambia County Sheriff David Morgan and State Attorney Bill Eddins said they have the murder "weapon or weapons." They also said that the remaining "person of interest" was supposed to disable the surveillance system but did not do so, which is why the system was still operational when the crimes occurred. In addition, Morgan and Eddins said the motive was robbery, because a small safe was taken from the house, but that other motives could also apply to the killings. Federal agencies are also assisting with the Billings murders, including the FBI, BATFE, and DEA.

To my way of thinking, this case smacks of much more than a robbery gone badly. There were at least eight, and maybe nine, people involved. Maybe more. The invasion and killings were perpetrated in less than four minutes, by multiple assailants, and with "military precision." The home invasion took place at approximately 7:30 p.m. local time. And at the time of the shooting, nine of the Billings children were in the home.

I believe murder, not robbery, was the motive. Extraordinary planning and the number of personnel involved indicate to me that the Billings were executed, and that robbery was an afterthought--or was even intended to be a ruse to mislead law enforcement. The real reason behind the killings may never be known, of course.

Regardless of the "why" and "how" of the killings, one thing is painfully obvious: a violent attack took place against a man and his wife inside their own home. And while the circumstances of the Billings case may be sensational, the simple fact that a couple was murdered inside their own home has become rather commonplace throughout the United States. Nationwide, home invasions are skyrocketing.

Home is the one place where most of us feel safe and protected. Even those who have a keen sense of self-defense feel free to let their guard down at home. And, sadly, most people do not possess a keen sense of self-defense. Most people have the deluded opinion that law enforcement will protect them. But even law enforcement professionals will tell you it is not their job to protect citizens; it is their job to apprehend and bring those who have committed crimes to justice. In other words, after you are dead, the cops will try to catch the guys who killed you.

It is time that people wake up to the fact that the responsibility of self-defense rests with each individual citizen. We are all vulnerable to attack--even in our homes! For this reason, our federal Constitution and most (if not all) State constitutions recognize the Natural Law right of people to keep and bear arms.

Over the past 40-plus years, however, miscreants in Washington, D.C., and in our State capitols have been whittling away at the right of the people to keep and bear arms. Lawful gun dealers are being harangued and harassed out of existence by the BATFE. Law enforcement agencies and State prosecutors often side with criminals when they are shot in self-defense by intended victims (especially in the Northeast). The media often characterizes lawful gun owners as "gun nuts" or "militia members" to try to create the impression that they are "dangerous" or "extremist." Public education--especially higher education--is often a willing participant in helping to demonize gun owners. Even Hollywood often uses its influence to sway public opinion against gun owners. All this, coupled with a natural lazy tendency of urban living, equates to a careless and defenseless society: something both would-be tyrants in government and street criminals love.

Fortunately, America's founders were wiser than most of today's generation. They understood the relationship between the citizen's right (and determination) to keep and bear arms and his or her safety and security.

For example, Thomas Jefferson said, "No free man shall ever be debarred the use of arms." He also said, "Laws that forbid the carrying of arms . . . disarm only those who are neither inclined nor determined to commit crimes . . . Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man."

Likewise, Thomas Paine said, "[A]rms, like laws, discourage and keep the invader and plunderer in awe, and preserve order in the world as well as property . . . Horrid mischief would ensue were one-half the world deprived of the use of them; for while avarice and ambition have a place in the heart of man, the weak will become prey to the strong. The history of every age and nation establishes these truths, and facts need but little arguments when they prove themselves."

The Billings double murder is the latest example of just how vulnerable we all are to the violent tendencies of evil people. For this reason (and more), every American should (1) resist any and all attempts by government to curtail or restrict our legal right to keep and bear arms, and (2) purchase, practice with, and always keep our own personal firearms handy. Furthermore, we should always live in a heightened "state of alert" (even in our own homes), because both our lives and our liberty may depend on it.

*If you appreciate this column and want to help me distribute these editorial opinions to an ever-growing audience, donations may now be made by credit card, check, or Money Order. Use this link:

http://www.chuckbaldwinlive.com/donate.php

© Chuck Baldwin

The Government's Debt Problem

Our national debt is rising at a spectacular rate. Every day brings new record highs - over 11.5 trillion dollars and still climbing. Americans are starting to worry about the national debt and with good cause. The national debt is now something close to 80% of GDP and there is no stop in site to the spending from Washington. If we don't do something the debt could become the next economics crisis!

Obama made promises to cut the deficit in half by the end of his first term, but with his spending record that is looking more and more unlikely. The table below is an excerpt from a Fox News article:

• $38 billion for the State Children's Health Insurance Program Reauthorization between 2010 and 2019
• $787 billion fiscal stimulus bill
• $75 billion homeowner stability program
• $125 billion "place holder" of additional financial stabilization funds (if needed)
• $22 billion for Cap and Trade program in 2020

Even if the President manages to cut the deficit in half that does not even begin to address the remaining national debt or the other half of the deficit. Why is all of this debt such a big problem, you might be wondering?

There are four primary reasons that a continually growing national debt of the size we currently have is a danger to our economy. First, when the government needs to sell new bonds to cover spending it has to get someone to lend those dollars. This means the government competes with other borrowers to attract investors' money. The government has many advantages here, because it has taxing power; the default risk and therefore interest rates on government debt are relatively low, but as the government's liabilities grow that begins to change. Investors will and currently are beginning to take note of the high debt to GDP ratio of the U.S. and they then demand higher interest to compensate them for the greater risk of lending more money. The higher interest rates paid by the government is a problem in itself (more on this later), but it also has a ripple effect. The interest rates on U.S. government bonds are used as "risk-free" benchmarks for a lot of other short- to long-term market rates. This means that as the government borrows more it puts upward pressure on interest rates and begins to slow economic growth and distort investment and saving even more. Over time this will result in reduced prosperity in America.

Second, a large percentage of U.S. government debt is held by other nations' governments. This has historically been true ever since the second world war because the U.S. was the major economic power and a very stable place to stash your money. It is also expected that other nations would hold dollars because of the dollar's position as the primary currency of international trade and would like to store those dollars in an interest bearing instrument like a bond. The only real problem of foreign ownership of U.S. federal debt comes from the sheer size of our liabilities and the foreign holdings. The U.S. economy is very sensitive to interest rates and the strength of the dollar. If a large group of foreign debt holders decided to dump their holdings all at once the result would be a sharply weaker dollar and sharply higher interest rates on U.S. bonds as treasury prices sank. Those rates would bleed over into broader market rates and choke the economy over time if the demand for treasuries continued to be weak. This limits our ability to protect our interests internationally because certain nations have a massive store of U.S. debt, like China. While such an action is unlikely and would have consequences for the other party it is possible and it ties our hands. This will become an even bigger issue as we continue to go hat in hand to the world to fund our government's operations. If suddenly no one would lend to the U.S. government all of our options are very bad. They range from printing money and spiking inflation to shutting down government services.

Third, as our debt grows it requires an ever larger proportion of our annual budget to just pay the interest on the debt. Interest on the national debt is now the fourth largest spending category after Medicare-Medicaid, Social Security, and defense. By 2050 many economists predict that Medicare, Social Security, and the interest on the debt will take up the whole budget! Obviously, the interest burden diverts resources from other programs and itself necessitates more borrowing in a vicious and self-reinforcing cycle. The biggest detriment to the U.S. economy comes from the large percentage of interest that is paid to foreign debt holders. That represents money collected by the government and shipped to other economies. It is a net wealth loss for the U.S. At least with domestic holders of federal debt the interest payments re-enter our economy as income to the bond holders. Once the debt reaches the point where we have to borrow just to pay the interest on the debt - then the U.S. government is nothing more than a giant ponzi scheme.

Fourth, it is a simple fact of economics and mathematics that no entity, not even the U.S. government, can borrow indefinitely and never have to pay it all back. At some point our economy will change or the global situation will change and the U.S. will be forced to balance its budget and pay down the debt. The more we borrow today the bigger the hole we dig for our children, grandchildren, and great-grandchildren. We are quite literally stealing prosperity from future generations. Future Americans will face higher taxes, higher interest rates, slowing economic growth, and a generally reduced standard of living when the time comes that we have to pay the piper. This reason implores us to fix our spending habits from a purely moral perspective.

Our national debt and continued over spending is a complex problem and in order to change it we will have to look at ourselves long and hard. We as individuals and families must decide to live within our means, be realistic about what the government and and should provide, and demand accountability. Only then will we ever get this spending under control.