Sunday, July 31, 2011

Crisis?

The idea the biggest CRISIS we have is our government may lose its AAA rating or may even default without legislative action to borrow more money is a tough one to swallow. The current situation is more accurately described by noting the ruling Republicrats (see earlier post about a one-party system) are simply arguing over how to best move any decision to borrow more money until after the next election. I favor cutting off the flow of funds to this dysfunctional government and if the current posturing raises the price of borrowing I think that is a good outcome. The real crisis is the inability of our currently constituted government to make LIMITED taxing and spending decisions and the lack of will to slow the growth of the government debt.

On a slightly different topic, I am again brought back to one of the biggest issues with democracy: the tyranny of the majority. This time I am reminded of the problem by a Christian friend of mine was explaining to me how charity from the people via government was justified. I am certainly in favor of charity and do my best to help those in need. I do not, however, need the government to direct my charity or to be a middle man (and take a cut) of my charity. Despite my friend's strong belief in- and adherence to- the 10 Commandments, he doesn't see how it is THEFT when the majority forces the minority to give money to a "worthy" cause against the minority's will.

Why does it surprise anyone when the recipients of the charity vote more charity for themselves? This is the open feedback loop that is going to kill our great experiment. We are indeed on the Road to Serfdom.

Cafe Hayek Quote of the day

from page 135 of Will Durant’s 1939 book The Life of Greece:

"The crossroads of trade are the meeting place of ideas, the attrition ground of rival customs and beliefs; diversities beget conflict, comparison, thought; superstitions cancel one another and reason begins."

Opponents of free trade literally are unreasonable. No matter how “progressive” they fancy themselves to be – a fancy fueled by the asinine yet apparently attractive notion that society progresses the more individuals’ wills and actions are bent (with force, if necessary) to conform to the will of the state – opponents of free trade are peddlers of backwoods stupidity grounded as firmly in ignorance and inability to reason as it is in atavistic fears and superstitions still lingering from our tribal past.

Friday, July 29, 2011

Tea Party = Populists?!? America’s debt ceiling face-off: The audacity of hopelessness - FT.com

America’s debt ceiling face-off: The audacity of hopelessness - FT.com

"The emergence of the populist Tea Party movement as an intransigent force is often singled out as driving the malfunction, with last year’s midterm congressional elections shifting the Republicans so far to the right that any agreement with the Democrats becomes virtually impossible. "


Very interesting. Now, apparently, Populist=fiscally conservative. I have always held the belief that Populist meant a politician pandering to labor unions and people that were looking for redistribution of wealth via taxation.

Tuesday, July 26, 2011

Two Ugly Charts | Leeds on Finance

Two Ugly Charts | Leeds on Finance

http://leedsonfinance.com/wp-content/uploads/2011/06/12.jpg

wow...

Government Debt as a Percentage of GDP

I think economists are doing a major disservice to the public by measuring and comparing government debt and fiscal deficits as a percentage of GDP. First, the government has no claim on the GDP. Imagine comparing a company's debt load or losses with respect to the total available market for their products?!? A company's debt or losses are rightly compared to the revenue it takes in. We must start comparing a government's debt and fiscal deficits to tax revenues.

Second, comparing government debt and fiscal deficits to a percentage of the GDP lulls the reader or listener into thinking it is OK to maintain that same percentage. In other words, the GDP grows and the debt grows. No problem. In reality, it is a problem the debt never decreases as a percentage of GDP.

I for one am glad the politicians have borrowing and debt and deficits at the top of the agenda. What could be better?

Monday, July 25, 2011

Mayor pushing to ban plastic bags at Austin stores

Mayor pushing to ban plastic bags at Austin stores

Beautiful. We use the plastic bags to put dirty diapers into. Now I guess our choice is to buy bags or to simply drop the diapers off at city hall.

Thursday, July 21, 2011

Napolitano: One-party System

"I believe we have a one party system in this country, called the big-govern​ment party. There is a Republican​ branch that likes war and deficits and assaulting​ civil liberties.​ There is a Democratic​ branch that likes welfare and taxes and assaulting​ commercial​ liberties.​"

Napolitano: High Court Key to Obamacare Survival