Budget ‘Debate’ Is Mostly Twaddle So Far

Senate minority leader Mitch McConnell said on Face the Nation over the weekend that President Obama wasn’t serious about the budget. Lest anyone mistake this for partisan sniping, here’s an interesting factoid that drives the charge home:  The $4 billion in spending cuts that Congress just approved to avoid a government shutdown amounts to about ten hours of government spending and less than a day of Treasury borrowing. This calculation comes from Bill Buckler, editor of the Australia-based Privateer. Mind you, the cuts were ginned up by a Congress that supposedly is in the grip of austerity-crazed Tea Partiers and Republicans. What it suggests is that the paltry sum hacked from federal outlays may be as good as it gets for anyone hoping The Government will somehow get its act together.  Meanwhile, if either a Democrat or a Republican claims to be in favor of reducing the deficit, keep in mind that the sums he or she will be talking about will be in the billions, whereas the deficit itself is mounting into the trillions.  As Buckler has noted, “This year, the official budget for the U.S.

government is $3,700,000,000,000.  That means the government will spend $10.13 billion every day – weekends and holiday included. The latest official figure for the fiscal 2011 deficit is $1.65 trillion. The U.S. Treasury will borrow nearly 45 cents of every dollar it spends – a total of $4.52 billion every day – weekends and holidays included.”

That’s the reality of it. But when our best and brightest on Capitol Hill attempt to reconcile these numbers with tax revenues, you can bet it will play out as slapstick. The looming Punch-and-Judy show between the big spenders on one side of the aisle and the even bigger spenders on the other side was framed by news stories over the weekend concerning McConnell and such Democratic heavies as Sen. Dick Durbin, an ardent Obama ally, and Sen. John Kerry. Said McConnell, “What I don’t see now is any willingness to do anything that’s difficult.”  For his part, Kerry, perhaps emulating the leftist economist Paul Krugman, went all-out to flaunt his economic ignorance in as concise a formulation as possible, ranting that the GOP budget proposal is an “ideological, extremist, reckless statement. If [it] were to be put in place, it would contribute to the reversal of our recovery…[and] deny us the competitiveness that we need to move with China, Indian and other countries into the future.”  We gather that Kerry, like Krugman, regards the U.S. Government as an engine of sustainable, healthy growth and thinks the best way to get the economy expanding would be to push Treasury debt from its current $14.2 trillion to…what? $20 trillion? Durbin took another track, suggesting that too much budget-cutting would “push more kids out of school.”  Someone ought to tell the kids they’ll need good jobs to pay for teacher health care and pension benefits in the unlikely event the unions carry the day in Wisconsin..

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  • P Root March 12, 2011, 10:28 pm

    How did we go from a surplus to such horrendous deficits? Seems Bush started an unnecessary war in the mid-east and then Greenspan compounded the costs by lowering interest rates. Next we allowed the Chinese to keep their currency undervalued so as to send us tons of seemingly cheap products taking away our production jobs to low wage countries. And we don’t want to tax imports to equalize the situation. The list of dumb moves goes on. The country deserves a depression. PR

  • Jim N March 8, 2011, 4:46 am

    Mario….in the spirit of this debate with a smile, i would like to reply.

    You do quote the government statisitics regarding, business, exports, etc. Obviously you trust those statistics, and then you base your opinion that things are getting better on them. We can have a difference in opinion, but you being one the smartest guys that i read, when you cite this obvious BS, and believe it, i need to start scratching my head. Actually can’t believe it as you are a real smart and fun guy…

    I am personally a very positive guy, and i want things to get better. But unless some Black Swan event happens to change to global economic chaos, like a war, and a big one, the system has no place to go but to default. Regardless of any upTICK you see on some gov’t statistic.

    I agree completely with you on the difference in economic reality for the elite or semi elite and …the rest. But you are looking at that, as far as i can see, in a static way. 2 years ago, there were many, many more that were doing well. But 2 years from now, many that are doing well today, will be having a much more difficult time. I call this a TREND. What direction is the TREND going? The numbers of those doing well, is trending DOWN. IT is spiral that we would love to break by breaking the downward spiral. God, how i would love to see it broken. But we live in a real world.

    Remember the move Apollo 13? After the accident, all the input coming from the different inputs to “FLIGHT” was coming in non stop. He stopped all that, and told everyone to reevaluate everything in terms of “STATUS”.

    Lets look at everything that is “working” well” in our economy.

    So now, using that analogy, go ahead and analyzie what is happening in terms of status. What sector is working well? Is it on life support and getting worse or is it trending better? HONESTLY, take every issue we are facing, and i cannot find one substantial area in our economy that is trending better. I’m sorry, i don’t believe in the bogus gov’t statistics. They just don’t tell the truth.

    Here is some of the sectors. Every one can determine if it is getting better or worse.

    Debt getting better?
    Deficit getting better?
    Interest rates going down?
    REAL UNEMPLOYEMENT going down?
    Stock Market rising based on real growth?
    Muncipal and state Tax and fiscal situation getting better?
    Mortgage foreclosures? More going on the market?
    Bank balance sheets getting better in the next year?
    Europe getting better and more solid?
    Middle East will calm down?
    Price spike of oil is just speculation and thus will collapse?
    Commodity price increases just temporary right?
    True investment capital (more of it available)?

    Please tell me anything SUBSTANTIAL and documentable that is TRENDING better that will turn this ship around. I need some good news.

    I don’t think anyone can. Nope, all of these are trending worse. Will the $$ hit zero? I think something else will happen, but it an illusion to think that it is even remotely possible for the US to dig out of this and remain in its current state. Scares even me, this normally positive and fun loving guy who plays the ivories too!

    Just my opinion.

    My best,
    Jim N

  • dan March 8, 2011, 3:36 am

    This CONgress only has contempt for the voters, both piss poor parties .Any one that has held office for four years or more is part of the problem. They will never reduce their spending no matter what. They think they will be able to escape the turmoil that they themselves have created, they are sadly mistaken,for liars and thieves that they are ,the judgement day will surprise any of them with the harsh reality of JUSTICE. They will not bask in their ill gotten gains,none of them….especially the ones that have been voted out and the ones that are retiring on our dime…think again you POS…you ALL will rot in hell….

    • mario cavolo March 8, 2011, 4:28 am

      …yet they will escape much of the turmoil they have created, they will escape justice, relatively speaking, because they are relatively rich. That’s the point, they’ve played it out for themselves, not responsible corporate and gov’t leaders keeping their country in mind.

      So I take it meanwhile dan that POS doesn’t stand for point of sale:)

      Cheers, Mario

  • Rich March 8, 2011, 2:37 am

    Thanks@Steve:
    “I am one of those who do not believe the national debt is a national blessing…it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country.” —Andrew Jackson, letter, April 26, 1824

  • John Jay March 8, 2011, 2:30 am

    Mario,
    The BD for February was 223 billion dollars.
    Congress is debating about 6 or 30 billion dollars worth of cuts for the year.
    The Fed buys trillions in Treasuries because a one year T bill at 5% and an 8% mortgage rate means doom.
    ZIRP is all that is holding our sham economy together, and inertia is all that is providing worth to the dollar.
    It is just a matter of time.
    No one feels worse about the demise of the good old USA than me.
    Regardless of my emotions for the USA, my reason is telling me we are near the end.

  • A. Rand Fan March 7, 2011, 11:10 pm

    One BIG problem with Government is how they spend money as opposed to the individual. Milton Friedman has a good take on it. http://www.youtube.com/watch?v=5RDMdc5r5z8&feature=player_embedded

  • Rich March 7, 2011, 11:04 pm

    Aloha All.
    Much wisdom here today.
    Every single Jubilee Winter Depression was preceded by inflation and wealth concentration in the hands of a relative few.
    A few observations from the early days of America and on the American Dream ( I am there in spirit):
    The Bank of England owned by the Rothschilds (Nathan) wanted to inflate and deflate the American colonies to lend, foreclose and acquire property. Franklin saw through this and issued a Fiat currency more steady than British Pounds (enjoying as a printer the right of seigniorage that made him a wealthy man who left 200 year bequests to Boston and Philadelphia). The Spanish Silver Dollar Ocho Real Pieces of Eight were legal tender in America from 1497 to 1857 because they held their value better than any Fiat currency, British or American, and were often driven out of circulation by Greham’s Law: ‘Bad money drives out good.’
    Our founding fathers observed this after 1776 with the destruction of the new American currency – not worth a Continental, that bankrupted many patriots and left Revolutionary soldiers hungry, ill and unpaid, which is why the FF codified into the Constitution that only gold and silver in a ratio of 16:1 were legal tender in settlement of debt. (The Mint Act of 1792 added copper.)
    That bastard Treasurer Hamilton from the British West Indies persuaded President Washington to tax whisky for silver without paying the soldiers, leading to Shay’s and the Whiskey Rebellion, where Washington was again forced to mount troops to put down American citizens. Meanwhile Hamilton rounded up worthless Continentals for his Bank of New York clients, then persuaded Washington and Congress to redeem the Continentals in silver to protect the credit of America while impoverishing the citizens and enriching his cronies. Little changed in the annals of grievious mistreatment of the little people who make up the authority of the majority in a Democratic Republic.
    Just government serves the people, not the other way around.
    In fact, for those who study the ancient Jewish Book of Jubilees (Divisions), written before Genesis, excluded from the Canon by the Constantine Council of Nicea in 325, when Christianity became the ruling religion of Rome, the Holy Book still retained by the Armenian, Coptic, Ethiopian, Syrian and other Oriental Orthodox Churches, there were 2500 years of double generation 50-year Jubilees documented. Each Jubilee had the same inevitable pattern of Spring Planting, Summer Growth, Fall Harvest and Winter Dormancy.
    Jubilee gave a practical reason for the ban on usury common to all monotheistic traditions:
    Nature grows and decays in cycles, while usury keeps compounding, eventually enslaving those who borrow and cannot repay. Recall Rothschild said, ‘Give me control of the money and I care not who makes the laws.’
    Jubilee codified the forgiveness of indentured debts every Seven Years and the forgiveness of slavery debts every 49 years.
    What made America great and prosperous was her biblical perspective practiced by the Freemasons, Junto, Pilgrims and Quakers, with ethics, freedoms, responsibilities and reliance on a gold, silver and copper money supply that was harder for bankers to fake or manipulate.
    Jefferson warned ‘Banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.’
    Two American Jubilees later, Wilson came along and after running against the Money Trust and War, took US into WWI with the Fed and IRS taxes of 1913.
    FDR came along and threw the gold standard out the window, paving the way for more theft and tyranny.
    Nixon finished the job after the Fed and Treasury finished JFK and his silver certificates.
    Until all debts are paid by default or usury, as Rick, Vern Myers and many others said, we cannot be free again to prosper together.
    We entered the Winter Jubilee Dormant Season.
    Despite the best fiat efforts of all the kings men, they cannot put Humpty Dumpty back together again.

    Meanwhile, just tweeted @RichCash8 that today’s M Class flare (with jumps in Geomag and electron flux from weekend lows) gives US one more chance to jump aboard the Burlington Northern to higher ground and the promised land.

    $GOLD targeting $1680:
    http://stockcharts.com/freecharts/gallery.html?%24gold
    $SPX targeting $1590:
    http://stockcharts.com/freecharts/gallery.html?s=spx
    $USB targeting $178:
    http://stockcharts.com/freecharts/gallery.html?s=%24usb
    $USD targeting $115:
    http://stockcharts.com/freecharts/gallery.html?s=%24usd
    $WTIC targeting $135:
    http://stockcharts.com/freecharts/gallery.html?s=%24wtic

    How can this be, we ask?

    Only Jehovah Jubilee knows…

    • Steve March 8, 2011, 2:12 am

      The Jefferson quote is actually a summary of Jefferson thoughts cited by a U.S. congressman. The meaning is Jefferson’s, the quote of a congressman. Some liberal will tag you on the Jefferson quote about banks. Just a simple heads up. The congressman’s quote is a good summary of Jefferson’s statements.

    • mario cavolo March 8, 2011, 4:22 am

      …amazing history lesson Rich, thanks alot! Mario

  • Agent P March 7, 2011, 7:38 pm

    “Manufacturing? Rising…”

    – What industries are doing the manufacturing?

    – Where is the manufacturing taking place?

    – Are revenue numbers aggregated on manufacturing done overseas for a U.S. based parent company, or are the increases coming from domestic manufacturing, done on U.S. soil, employing U.S. citizens?

    – Why am I confused when the majority of products we use on a daily basis (outside of $1M machine tool assemblies, certain Boeing aircraft assemblies, Caterpillar products (?), and locomotives made in Idaho), are all made overseas, but ISM/U.S. manufacturing data points to increased domestic GDP growth?

    – Are the numbers truthful?

    – Do they matter?

    – What am I (and many others) missing in the equations?

    If you have a difficult time believing CPI/PPI/Employment numbers and treasury auction/re-purchases/POMO by the Fed, why should (manufactured) domestic Manufacturing numbers be taken as truthful?

  • Steve March 7, 2011, 7:15 pm

    I used to think “inflate or die”. Now I’m thinking even if we can successfully inflate, we may still die.

    • Robert March 7, 2011, 7:40 pm

      Possible, however unlikely in my opinion. Inflation is an invention of man to distort the basic economic law
      of supply and demand. Deflation is merely the mirror-image consequence of this invention- the Yang to inflation’s Yin, if you will…

      Every hyperinflation in history has collapsed into a deflationary vortex of fundamental economic re-balance between supply and demand.

      “We” (in the collective) will not die in such an event.

      “You” (in the singular) may die; especially if you do not understand the forces at work, and do not understand how to stay outside the violent thrashing of the economic armature as it does its work to restore this balance…

      Stay away from the spinning blades, and the only thing that might kill you are flying shards of debris.

      In other words, I can’t guarantee you that you will not be dead tomorrow from a comet or asteroid striking the Earth, but I CAN guarantee that you WILL be dead if you jump into a running wood-chipper.

      All the global political and economic chaos today is merely providing the energy those blades need to keep turning.

  • laurent March 7, 2011, 6:00 pm

    I do not think at this economic juncture it is possible to attempt to salvage a ship that is just now listing below the surface of the water. A comprehensive and infallible plan of rescue can only be drafted once it is clearly immobile on the sea floor……30 million homes have to participate in the salvage. How??? Just a humble suggestion.

    Every square foot now being cared for by a lawnmower to be changed to a garden cultivator. Every TV set traded for a hoe, shovel and a rake. That’s if you can get that much for it once the lights in the sheep barn are turned on. Parasite jobs in real estate, financial advice racket traded for agriculture, engineering and trades. The rest will all fall into place. Oh, another little detail, we need to convert Wall Street into a testing drag strip for the development of electric vehicles.

  • roger erickson March 7, 2011, 4:01 pm

    sorry, the Ben Franklin link above got scrubbed
    http://www.u-s-history.com/pages/h256.html

  • John Jay March 7, 2011, 4:00 pm

    More of the same: SNAFU.
    We’ve all said it all many times before.
    We’ve all of us proven the point in countless ways.
    Bankruptcy and collapse is the only solution.
    With an approval rating of 11% or less, the average guy knows he has no representation in Congress.
    The MIC/Banker/Corporate takeover of DC is complete and irreversible.
    There can no longer be any political solution.
    Only a worthless Dollar can stop them.
    And by then, the big players will be deversified out of it.
    Leaving the average guy to live in an economic wasteland.

    • mario cavolo March 7, 2011, 4:38 pm

      Nonsense, I really don’t get this. You’re being sarcastic, satirical? Trying to make a point but don’t really mean what you say? Am I right or wrong? Bankruptcy and collapse are the only solution? So only an extreme solution is the solution and no other scenario is likely to play out across the globe John Jay? That sounds much more preposterous and unlikely, yet it is likely and the only solution?

      There will NEVER be a worthless USD dollar, why is that so hard for intelligent people to comprehend? When the dollar reaches a certain “low point” it will get bought up again, like a girl whose skirt is short enough, and the economics will shift/rebalance again.

      Lest I remind everyone here, no matter how bad things might get, the U.S. economic level and influence is still by FAR on this planet, the most dominant and significant in the world. That is not a point to underweight, no matter how pissed off or disgusted we may be at the scenario which has developed over the last few years.

      BTW, if I do need to say it, this is “debate” for the enjoyment of argument in the academic sense, I mean no disrespect or disparaging toward anyone’s thoughts here.

      Cheers, Mario

    • Steve March 7, 2011, 6:46 pm

      Mario, “value” of a Federal Reserve Note “1” “One” Note = zero. (Okay, value is about 3.+/- cents as toilet paper in cost to manufacture). The debt note is a tally against the ‘credit’ of a Man to do work for the master under the General and Paramount Lien of the Banking Act of 1913. Nash’s Non Co-operative Game Theory is the plan book that punishes anybody who will not play/pay the debt game. (you will not be given the play book to Nash’s Theory) ONE CANNOT TRADE IN GOLD AND SILVER TO EXINGUISH DEBTS because the territorial banks do not allow it for territorial 14th amendment citizens taking the benefit of mobocracy, and “use” under the Banking Act of 1913. Try to make a “use” of specie to Extinguish one’s debts, even though that act to Exinguish is Lawful, and allowed in Law.

      The valueless note discharges against the debtor in possession doing corporate business. The U.S. corporation says I have x to the 3rd power persons laboring, and their labor is a mathmatical equation = to this. In other words, by assignment of an exclusive ‘number’ tatooed in the mind, or on a card, I can produce this much of “that”, that you cannot in China.

      The U.S. has produced ‘debt’ better than anyone else in the world.

      China has manpower, and creates deflation via cheap labor producing much product.

      U.S. debt/China credit = a settlement at some point in time based in a tally of numbers created by two forces opposed.

      Value = water, soil, and today oil.

      Nash’s Non Co-operative Game Theory is in play. In Order to get “settlement” the U.S. needs to produce something of value that China needs. China has provided labor to the U.S. at a great cost to the Common Man’s debt load = slavery. China does not need American labor, but; it seems China needs American debt in order to keep labor laboring. American general labor is about gone, thereby the American individual cannot keep spending debt to support China labor.

      Inflate away American Debt by hurting China, and American People ?

      Deflate away American Debt hurting China, American People, and return to a Debt Extinguishment Model?

      How much water ?
      How much good land ?
      How much oil to produce fertilizer?
      How much oil to run tractors?
      How many people to do the work of 1 tractor?
      How much sun, and wind to produce electricity.
      And, with unlimited electricity; how much good water, how much good land, how much good fertilizer, and how many bodies to farm the land?

      Are you Free Mario? Does anyone care about Liberty?

      But then Mario, I ramble in hanging pendants. I am the head of a nail sticking up above the deck, and surely I will be pounded down. Asian theory isn’t it?

  • roger erickson March 7, 2011, 3:49 pm

    The debate here starts off as off base, then gets worse.

    Yes, there are multiple uses for currency. The most trivial one are retained value. The one that makes all others insignificant is the distributed bookkeeping that allows return-on-coordination.

    We have a “tribe” of US citizens. Our coordinated efforts makes us wealthy & secure. To make distributed transactions better/faster/cheaper, we decide to INVENT and distribute a record keeping currency.

    Note that real goods have instantaneous value, as do real efforts, while the return on coordination can create anything we with to achieve. [Wouldn’t do you much good to sit in 100K BC with a bunch of gold, or fiat currency for that matter – you’re toast without the organization of your neighbors.]

    Given that currency is NOT wealth, and certainly not a stable store of it [despite that & other outdated ideas of Aristotle], why do we spend so much time tracking fiat currency instead of tracking real goods, real capabilities and ESPECIALLY real community or national coordination?

    Outdated, gold-std, thinking about currency is actually the single, greatest impediment to coordinating the limitless return-on-coordination. Ask the Marine Corp if, when push comes to shove, they feel limited by fiat currency.

    If our national aggregate demand (net activity & hence capabilities) are down & sinking, it’s primarily because we can’t generate a coordinated understanding of the very fiat currency supply that our Treasury has monopoly power to create for our use.

    If Larry Summers & Ben Bernanke told you that we were “running out of” numerals to use in all our calculations, would you believe that too? These people are just temple-hooligans trying to keep a strangle-hold on our currency supply while paying themselves protection-racket salaries.

    If we want to get 312 million people together and see what they can accomplish, we have only to plan it out. THEN, if we want to unleash citizens to explore the unimaginable number of options available, we’d ONLY need enough, fluid bookkeeping to allow the relative cost of any/all distributed transaction tracking to NOT be an impediment. That is, we might want to design & distribute a fiat currency! [I mean, DUH!]

    How much currency would we need to distribute? Don’t tell me YOU, of all peoples, actually have to ask? As much as people need to denominate REAL transactions, no more & no less.

    Do we have to get all anal and insist that when a growing population with growing capabilities requires increasing numbers of transaction-denominating numerals (i.e., currency) – that we’re going to panic at the thought of using more entirely nominal numerals? Are we going to then add insult to our own injury, and choose to believe bankers who claim that use of more numerals = a REAL deficit?
    If they claim that we actually have to pay them not just inflated salaries, but also an interest rate on use of those numerals, then it sounds more like a protection racket every day.

    I can’t believe that real Yankees are actually having this discussion. It’s an insult to Yankee ingenuity.

    Here’s the relevant history.

    [In the mid-1700s the American Colonies were prospering, in part because they were issuing their own money called “Colonial Scrip,” which was strictly regulated and did not require the payment of any interest. When the bankers in Great Britain heard this, they turned to the British Parliament, which passed a law prohibiting the Colonial Scrip, forcing the colonists to accept the “debt” or “fiat” money* issued by the Bank of England. Contrary to what history teaches, the American Revolution was not ignited by a tax on tea. According to Benjamin Franklin, it was because “the conditions [became] so reversed that the era of prosperity ended.” ] He said:

    “The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.”

    • Steve March 7, 2011, 6:09 pm

      Sounds a bit like Marxism – all for the good, and good for all according to their needs as one body.

      Franklin seem so have said that the Americans didn’t want to play the game the master was providing. 13 states, 13 religious orders in 1776. After 1776, 3% fighting for, 30% supporting, 33% waiting to see who wins, 30% supporting ‘against’, 3% fighting against. There was no consensus of opinion when Franklin wrote his words about war. There was no complete body united in 1774, 1787, 1791, nor has there ever been a body united here except in regard to the Original Common Law. There has been respect that I want to live in the country, and him in the city, and that one crowded in an apartment stacked 10 stories high. I want to be left alone, and him; he wants someone to tell him what to do. The single thing the united States of American had was ‘respect’ for the differences, and respect for the ‘Common Law’, as; assault, breach, fraud, theft, & tresspass.

      The British subject will fight to the death to have a lord/king over him. The American will fight to have no lord, or should I say the American once fought for freedom and now fights to be enslaved by debt.

      Hamilton, the shill from the Bank of England, told Washington to create debt among the People to control them. Arron Burr disagreed.

      The theory you present, Roger, seems to be “me” doing exactly what you want for yourself “Roger”, and forcing 300m +/- others in one direction. My sister believes the government will take care of her no matter what. I DON’T believe.

      I am a Tribe of Common Man, having Common Right, with Common understanding, who may live for Individual Rights. The u.s. tribe is a tribe of highly limited liability in mobocracy, having given away Personal Responsibility for being taken care of by the master/creator legislative force under the rebellion of the 14th amendment, who do die for the priviledge of being enslaved to debt.

    • Robert March 7, 2011, 7:21 pm

      Roger-

      Interesting viewpoints. However:

      “there are multiple uses for currency. The most trivial one are retained value. The one that makes all others insignificant is the distributed bookkeeping that allows return-on-coordination.”

      This statement is highly subjective and laced with personal opinion.

      What you declare as “highest significance”,- the centralized tracking of return on coordination- the free market characterizes as complete balderdash.

      I fully agree with your tribal viewpoints- the world population will not be truly free until all borders (whether they are borders to trade, or borders to culture) are irrelevant.

      The problem I see with your perspective is that, as Steve accurately points out, it is fundamentally Marxist, IE, you speculate that there SHOULD be someone whose purpose and charter is to centralize and coordinate the economic and trade productivity of others. This “role” in a healthy economy is completely unnecessary. The process of entrepreneurism self regulates as long as there are two fundamental tenants (or laws if you must):

      1) All contracts/agreements must be entered into only on the good faith that both parties find the settlement of said contract in their personal interest.
      2) No contract can be voided by threat (or action) of personal violence or aggression against another person’s real property.

      If both of these were adhered to, and if the judiciary (of peers) exists only to settle disputes, and to render judgment against aggressors, then there would be no need for a “higher order” of coordination on common productivity.

      There is no covenant that says:

      3) Both parties in a valid contract must submit to a 3rd authority that they will abide by that authority’s desire to track, and regulate the settlement of said contract, and will collect a fee of usury as a % of the transaction in order to finance said tracking and regulating.

      Try to imagine a smaller world – one where people are safe to do their business, and are protected by the very liberty that allows them to work in their own best interest, and not the interest of the ones trying to track and maximize “return on coordination” – it should not be scary to imagine such a world.

      “If we want to get 312 million people together and see what they can accomplish, we have only to plan it out. ”

      -No we don’t.

    • Benjamin March 8, 2011, 12:19 am

      Steve: “Sounds a bit like Marxism – all for the good, and good for all according to their needs as one body.”

      Yeah, a bit! Additionally…

      As a crook, all I have to do is look to where there’s large amounts of coordination, and just pretend I want to help, too. Is a trillion coordinating numerals
      enough for your ores, your crops, your labor? Splendid. Here ya are. Bye now!

      The other thing is, how do people come to feel the pain of their coordination, if said effort must result in it? For example, if 300 million feel they need to occupy Afghanistan until the people there look and act just like them, what stops those 300 million well before they are able to…?

      a) acheive that goal (not very likely)
      b) break themselves of their own resources (a bit likely)

      There isn’t anything, except for increasing and seemingly endless pain itself (though cooperation can persist even then, and for some time more, like it is now, which is where the danger lies).

      On the other hand, the coining of savings necessiates shorter-term and proportionate pain; a higher weighted currency is the signal from the people, via the Mint, that they are willing to suspend their own saving and consumption in favor of government action. What a higher weight also does is temporarily make exporting more expensive, thus protecting our own resources for the time government may need them. On the flip, imports become cheaper (for government, as they have the coined weight to spend).

      Together, government has incredible wealth. When a nation coins savings, it is a power-packed punch that is not at all unsuited for a response of national defense. In fact, that is precisely what it is for! Vice versa, a low weighted currency means we’re open for more trade and are more willing to save, invest, and spend on ourselves. And it would remain this way until that was threatened, because…

      Humans are creatures of reward and punishment. We also utterly depend on reality to keep that in balance. Obey those laws, and we prosper. Disrupt them, and it is only to our own gradual and eventual demise.

  • Benjamin March 7, 2011, 11:20 am

    I don’t know about everyone else, but I find all of this so dizzying, frustrating, and enraging (especially after reading Rich’s links) that I can only say… Five and one, one and five. No one here gets out alive!

    Oh, and wendigo psychosis. That’s my new name for socialism/central planning/trade without a natural regulator. It’s pure, bloodthirsty insanity that needs to be put down (but probably won’t because no matter how many times shot in the behind with a bb gun, it just won’t die).

    Other than that, there isn’t much else to say.

  • Terry S March 7, 2011, 6:46 am

    @Chistiaan Yeah! Gold price is about debt not jobs.

  • Rich March 7, 2011, 6:07 am

    As 60 Minutes tonight covered the reality of accelerating American Homelessness and doubling up from unemployment, foreclosure fiascos and utility shutoffs, with kids thinking it’s their fault, dropping out of school to do odd jobs and homeless shelters splitting families up, with 25% in poverty, America has a negative net worth of (-$44 T) according to a famous VC partner. Raising taxes will further impoverish Americans with the expense of bigger government growing 11 times faster than the economy. This is the largest generation of homeless…

    http://www.cbsnews.com/stories/2011/03/06/60minutes/main20038927.shtml

    http://www.businessweek.com/print/magazine/content/11_10/b4218000828880.htm

    • mario cavolo March 7, 2011, 1:38 pm

      Hi Rich, I’m going to call you here on that “generalizing” problem which I suggest gets made far too often when people suggest America is in economic trouble; awfully hard for all the American folks who aren’t in trouble to agree with you on that point.

      While yes it is an unequivocal fact that the lower/middle income folks are under more and more financial strain, in fact they have really been screwed over in all the ways that have been enumerated here, that is not “America” as a whole. That is that socioeconomic part of America; and not the case for the upper middle and upper income sector who are richer and more prosperous than ever. It is this sector of the American population and economy who is benefiting greatly from the new reality of the expanding global economy, most specifically the rise of Asia led by China. At the same time, it is the lower/middle income sector of America who is most being hurt by this same global socioeconomic shift. Wrong place, wrong time on planet earth. So when I read “America is broke” type comments I feel the strong need for clarification.

      It is not my imagination that the private sector manufacturing and export and other biz stats are clearly on the rise; a set of facts too often ignored by many here as they foretell America’s and the USD’s coming collapse, which is just nonsense. The problem is that any such improvements are only narrowly helping the country’s economics, ie., only helping those upper middle income and upper income rich folks who are holding the strings of power. The rich folks and the gov’t leaders have made it clear that what is best for America as a whole is not high on their priority list of governing, and we can even suggest their hands are tied as they are themselves trapped in the very system that has morphed into the economic, banking, insurance, pharmaceutical, union, oil and gov’t monster which has eaten away at what America was. Hell, they don’t even have the common sense or integrity to roll the budget back to ’08 levels.

      Let me put this another way to help folks understand the scenario of how the lower/middle income class of America has essentially been marginalized in this new global world; if you moved all the 100 million struggling folks in the western 1/2 of the U.S. to struggle financially amongst themselves, with a modicum of gov’t support programs to survive, that leaves the rest in the eastern half of the country, the other 150 million, including all the corporations who are sitting on a couple trillion cash, just hunky dory, better than ever. It is, no matter how distasteful, a fact. Are colleges deserted? No. Are we getting dismal corporate sales and earnings numbers? No. Manufacturing? Rising…Exports? Rising. It is an amazing, miserable, wrenching, ballsy, hard to accept, conspiratorial, elitist setup and like I keep saying, when you’ve got $500,000 and then its only worth $300,000 in actual buying power because of the falling dollar and rising prices, guess what?…you’ve still got $300,000 and that ain’t exactly a nightmare is it?

      Meanwhile with oil heading over 103 to 106 so far since Thursday, how can the markets possibly go up…? Nuts…

      Cheers, Mario

    • BDTR March 7, 2011, 4:09 pm

      However you may presume clarity of elevated view, mario, your inference is that requisite sacrifices to NWO are where they belong.

      How many more fixed income elderly that dutifully paid their taxes for decades will be forced from “strain” to consume dog food to avail the investment class incrementally higher enterprise profits and add to their stash of static investment funds?

      Social Security recipients and federal employees have already been penalised cost of living adjustments under a doctored rate of inflation for what likely will be an accelerating two year period of realised, basic living expenses, by diktat.

      It’s a best guess higher % rate of taxation than the rejected, proposed return to pre-Bush tax concessions to “that socioeconomic part of America” that’s found a right much more liveable place at the right time. A 4% increase on the admittedly rich would have gone about $700 billion in the right direction without a hint of human degradation or imposed hunger.

      25% of American children are now dependent on food stamps, many more of the growing unemployed, working poor parents are homeless, displaced and undernourished further disabling any prospect of a healthy and educated next generation of internationally competitive workers.

      The older siblings of hungry children are no longer among the campus populations, even those bolstering statistically at least, the predatory hues of dead-end corp-redator “universities”. There’s more government money well spent towards buffering select portfolios.

      And, mario, how much of the glow from “US” manufacturing stats actually reflect on the faces of US workers, and not those of the third world slave-class? Is the glow bright enough to reveal the depth of and unending dependence on Fed funding of capital fuel?

      Generalizing socioeconomic hope and success has its own pitfalls, but generally only for those yet to fall. For relativists afflicted with mere inconvenience, short memory or shallow conscience, it can be a long way down with a very hard landing.

    • mario cavolo March 7, 2011, 4:26 pm

      Hi BDTR, 100% agreed and understood, I don’t believe I pointed out anything to the contrary regarding the damage that is going on. I think its terrible how so many have been marginalized, and how the society has deteriorated for the benefit of the manipulating elite. But that does not give us reason to ignore or rationalize the fact that all is not lost for everyone…100 million plus Americans have also never had it better, many of them innocently in the right place at the right time, as opposed to the wrong place at the wrong time.

      Cheers, Mario

    • Steve March 7, 2011, 5:38 pm

      Mario, born in 1950 I had no debt, and my father owned an allodial estate purchased with Coin in 1946. An American child born today owes 450k +/- the second he comes under 14th amendment subject status as in ‘. . .all persons born and subject to. . .”. Just for ease we’ll take a family of 4, with 1.8 million dollar debt (4@450k), not accounting for credit cards, home loan, and car loan.

      The family of 4 is not paying down anything, and they are not saving. The expansion of the past quarter in 2010 was based upon credit card spending, and car loans for these individuals. To get to net zero, where one could start to gain, the average American must “find” well over 2m to be broke with no ownership of anything. Under the limited liability model of American Democracy the unpaid debt of the people who cannot make the 2m is taken on by all others. Under the federal reserve system, money only comes into existence with debt borrowing. So the 1 frn obtained has to be paid back by some fraction thereof, meaning there is more debt than money. Couple that with fractional reserve banking, and the banks are collecting interest on notes that do not exist. (good ole’ banks are making interest on the same frn note from multiple people who all borrowed the same frn). I don’t know about China, but; I suspect the average worker at least owns the clothes on his back, which is better than the average American.

  • Christiaan March 7, 2011, 5:59 am

    debt junkies!

  • DG March 7, 2011, 5:02 am

    Other Paul:

    You are correct…..however the number doubles when you throw in “other defense related items:…homeland security is now pushing $60b a year, veteran pension and affairs is well over 150, interest on debts, defense related is over 100. It do add up.
    http://en.wikipedia.org/wiki/Military_budget_of_the_United_States

  • Martin Snell March 7, 2011, 4:05 am

    Only one way to do it. Forget about cuts/taxes at first. Start with a deficit target, cast in stone, then make sure you beat it (no exceptions allowed). That is the way to build credibility with the markets. If that is done consistently there is still a chance at a way out (a small one to be certain). That was the Canadian experience back in the late 80’s.

    Until the military is cut – one estimate has security expenses at $1.2 trillion (or 1/3 of expenses or more than all personal income taxes and corporate income taxes put together) – there can be no progress on the deficit. You can trim all you want, but without serious a cutting of defense (and cutting oil imports to fix the trade deficit) the debate really is twaddle.

    Oh, and tax “carried interest”. Lots of nice money there.

    • Other Paul March 7, 2011, 4:37 am

      Per Wikipedia, the 2010 budget for the US Defense Dept was $685 billion.

    • Rich March 7, 2011, 6:04 am

      and transfer payments (theft) were $695 B Social Security, $453 B Medicare, $290 B Medicaid, $571 B mandatory programs, and $164 B interest on Treasury Debt.
      http://en.wikipedia.org/wiki/2010_United_States_federal_budget
      There was no Sep 2011 Fiscal Year Budget because the Pelosi House and Reid Senate did not pass one despite consitutional requirements to do so…

    • Martin Snell March 7, 2011, 6:06 am

      This link shows the more complete “security budget” –
      The Real U.S. National Security Budget – http://www.tomdispatch.com/post/175361/tomgram%3A_chris_hellman%2C_%241.2_trillion_for_national_security/#more

      You need to include things like veterans’ health care, the intelligence services, pensions for defense dept. employees, etc.

    • Martin Snell March 7, 2011, 6:09 am

      Rich, social security should never have been added to the budget. It was supposed to be a separate program. It was adding it to the budget that helped start this mess as the surplus was spent to give tax cuts that never should have been given.

  • Terry S March 7, 2011, 3:07 am

    Never underestimate unions; 1930’s / 1950’s / etc. we’ve already read about it yesterday.