The Fed as Counterfeiter

The Mises blog has a great article that explains the complicated workings behind central banking, and how despite the complex mechanisms and multiple actions/strategies, they all combine to create a scenario where the government really can just print new dollars to finance its spending.

No wonder all the governments of the world are such big fans of central banking ... it gives them the 'flexibility' to just issue more debt, which gets exchanged for newly minted dollars, whenever it needs to spend on warfare, welfare, bailouts and special interests.

The mother of all Ponzi schemes

Is the modern Western welfare system.

The Mises Institute have a tragic/comic article about how today's welfare systems, social security, government backed pensions, medicare etc are completely out of hand and about as financially sound as Bernie Madoff's investments.

The money collected in taxes will simply never come close to covering the future liabilities in the form of pensions, medical coverage and government services.

And the article makes a very good point. That like all Ponzi schemes, the winners are the people who get in early. It presents this lucky lady, the first recipient of a social security cheque, as the prime example:

Social Security was a sure thing in its infancy. Just think of Ida May Fuller (1874–1975), a nonexempt legal secretary from Ludlow, Vermont. Ms. Fuller exemplifies the advantages of getting in early and getting out early. She paid a whopping $24.75 to participate in Social Security. Her first monthly Social Security check was issued January 31, 1940, for $22.54. Within three months, Ms. Fuller's investment was in the black. Over the ensuing 35 years, she would collect $22,888.92 in Social Security payments.

Andrew Sullivan - Democrat spokesperson

Nothing but praise for Obama's failures.. this shows just how unprincipled Andrew Sullivan has become in the past couple of years.

My own take on this potential disaster for the Democrats is best represented by my response to an Obama supporter who is intending to vote for Brown. Vote for him in 2012. Hold your nose and vote for Coakley on Tuesday. The message is already clear to Obama about the need to pivot quickly to debt and spending (something his record already proves he can do). But losing health insurance reform now, and crippling the Obama presidency as the far right wants, would be to throw away the last chance for a decade of any meaningful change.

If you voted for Obama in 2008, don't abandon him now.

Where do I begin ? Andrew Sullivan, the so called 'conservative', supports socialised health care, and a Democratic president. He openly opposes a sound Republican candidate without offering a shred of criticism, and suggests voters "hold their nose" and vote for the disgraced Democrat candidate... the states don't matter any more, what matters for him is power and Washington.

Some conservative !

Look out America, this is what socialised medicine is all about.

Socialism places equality above all else. Before prosperity. Before freedom. Before choice. Before people's preferences.

Socialised medicine isn't about helping the poor, but rather about tying the hands of the rest of society.

In Britain, the National Health Service reveals its nasty stripes in this telling encounter:

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That principle was illustrated by the case of Debbie Hirst, a British woman with metastasized breast cancer who in 2007 was denied access to a commonly used drug on the grounds that it was too expensive.

When Hirst decided to raise money to pay for the drug on her own, she was told that doing so would make her ineligible for further treatment by the National Health Service. According to The New York Times, “Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.” The right to health care is so important, it seems, that it can nullify itself.

Here's the elephant in the room

The Global Financial Crisis has not yet begun.

The US dollar, the world's reserve currency and supposedly every central bankers favorite store of wealth, is backed by enormouse debt, and a house of cards waiting to collapse.

It won't be long till the slow Japanese style deflationary slump kicks in as the debt burden continues to grow.

Nothing can go up forever, and eventually something's gotta give. Either the people cut their spending and repay their debts, or the government prints money like Zimbabwe and destroys the currency to keep them spending.

Mike Shedlock has the following post about an interesting Forbes article on the issue nobody in Washington wants to talk about:

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Not too long ago, a billion dollars in a governmental budget was a lot of money. Then we got into hundreds of billions. People understood that this was a lot, just because of all the zeros. Now, unfortunately, the number has become small: the world "trillion," as in $1.2 trillion for health care reform, seems so tiny. But it has 12 zeroes behind it, which is so easy to forget.

The total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time."

Add the unfunded portion of entitlement programs and we're at 840% of GDP.

The world has not seen such debt levels in modern history. This debt is not serviceable. Imagine that total debt is 557% of GDP, without considering entitlements. The interest on the debt will consume all the tax revenues of the country in the not-too-distant future. Then there will be no way out but to create more debt in order to finance the old debt.

An essay worth reading

The House that Uncle Sam Built is surely going to be an enthralling and worthwhile 20-page essay for me and my followers, with the following sharp and insightful opening paragraph:

The theme of “The House that Uncle Sam Built: The Untold Story of the Great Recession of 2008” is that government policy, not a failure of free markets, caused the economic trauma we have been experiencing. We do not live in a free market. We live in a mixed economy. The mixture
varies by industry. Technology is primarily free. Financial Services is primarily government. It is not surprising that the most government regulated and controlled segment of the economy, financial services, experienced the biggest problems. These problems were created by actions
by the Federal Reserve combined with government housing policy (especially the government- sponsored enterprises - Freddie Mac and Fannie Mae). Misguided government interference in the market is the real culprit in laying the foundation for the Great Recession.

Click here to download the entire essay.

Little Green Fanatics

Heh..

Charles Johnson has finally confessed and written a post titled "Why I parted ways with The Right"

After 2 years of leftist hysteria, and alienating all his collegeagues on the Right, he finally acknowledges his changing philosophy.

And what better way to prove his stripes with a post that actually attacks the ClimateGate scandal as a criminal conspiracy ... by the hackers and climate skeptics !

Well at least he's half right there.. better than his average batting record.

For a closer look at his political wingnuttery and environmental fanatacism:

... the CRU theft was a criminal attempt to sabotage the Copenhagen climate summit, and the entire right wing blogosphere is complicit in the crime.

Gee was Charles Johnson this angry about the hacked emails of Sarah Palin ?

All thats left is for me to ask - Whats next ? Will LGF be cheering Castro and Chavez, Keynesian economics, the UN and other idols of the left ?

Government corruption

When the government gets involved in anything, it inevibly becomes corrupt and politicised.

That is an unavoidable conclusion and the absolute truth that leads many people to distrust big government, and to try to keep the role of government as limited and consistent as possible.

When government is responsible for something as supposedly innocent as collecting statistics on unemployment, it is tempted to spin the numbers in a positive way. And Obama's job creation / recovery act tries to take credit for the non-existent recovery by tweaking the numbers:

According to a report from a shoe store in Campbellsville, Kentucky, the Army Corps of Engineers “created or saved” nine jobs when it used money allocated by the American Recovery and Reinvestment Act to buy nine pairs of work boots. The Wall Street Journal reports that the store’s owner, frustrated by the government’s confusing online forms, enlisted the help of his 42-year-old daughter, who figured nine—the number of people who would use the boots on the job—made as much sense as any other answer.

Little Green Failures

Charles Johnson's crumbling and moronic blog, and his ever changing postures and politicking are starting to wear thin on me. It seems he still has thousands of readers, but I wonder how long it will last.

3 years ago, it was pretty clear where he stood on issues. Nowadays, things seem to have changed, and not subtly.

He was about as pro-interventionist as you could get, a huge supporter of conservative blogs and the Bush presidency. Now, he peddles global warming alarmism and propaganda videos by Peter Sinclair, he supports socialised health care, ridicules all lovers of freedom and liberty (especially the tea party protestors and other Obama critics) as maniacal conspiracy theorists and white neo-nationalists and religious fundamentalists.

I was just browsing over some of his very characteristic and typical posts back in 2005, which include the following snippets.. mocking Al Gore for claiming he was non-partisan, mocking all Muslim groups for crying victim to racism, debunking many claims of Israeli soldiers commiting atrocities, pointing out the dozens of Palestinian 'cease-fires' involved continuing to fire upon Israeli civilians, and dozens of posts showing the Palestinian 'death cult' mentality, all whilst showing what a farce the UN is and applauding critics of the UN such as John Bolton.

It was hard to find a single mention relating to socialised medicine, or global warming and the IPCC. But here was a gem of a post in 2005 linking approvingly to Iowahawk who ridicules claims that increased C02 levels caused hurricane Katrina.

Even as recently as June 2008, he made fun of a left wing blog that cheered Obama for threatening anybody who stop him trying to pass his health care bill. And in August 2008, he exposed some of the radical supporters of Obama's campaign, including the Communist Party of America. Charles even used the term "Obamessiah" to ridicule the candidate whom he would later fall in love with.

It didn't take long for him to cheer Obama's plan for socialised health care, support every Democrat, become a global warming alarmist and at the same time, begin ridiculing Republicans and libertarians, ignoring his core issue of terrorism and Islamic fundamentalism, and begin making enemies of every ally he once had.

It seems he has come full circle today, with his post that mocks the Republican Party philosophy listed below, and simply labelling this a "failure". I'll highlight in bold some of the ideas that Charles very recently held to show how quickly he changes his stripes.

THEREFORE BE IT RESOLVED, that the Republican National Committee identifies ten (10) key public policy positions for the 2010 election cycle, which the Republican National Committee expects its public officials and candidates to support:

(1) We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s “stimulus” bill;

(2) We support market-based health care reform and oppose Obama-style government run healthcare;

(3) We support market-based energy reforms by opposing cap and trade legislation;

(4) We support workers’ right to secret ballot by opposing card check;

(5) We support legal immigration and assimilation into American society by opposing amnesty for illegal immigrants;

(6) We support victory in Iraq and Afghanistan by supporting military-recommended troop surges;

(7) We support containment of Iran and North Korea, particularly effective action to eliminate their nuclear weapons threat;

(8) We support retention of the Defense of Marriage Act;

(9) We support protecting the lives of vulnerable persons by opposing health care rationing and denial of health care and government funding of abortion; and

(10) We support the right to keep and bear arms by opposing government restrictions on gun ownership; and be further

RESOLVED, that a candidate who disagrees with three or more of the above stated public policy position of the Republican National Committee, as identified by the voting record, public statements and/or signed questionnaire of the candidate, shall not be eligible for financial support and endorsement by the Republican National Committee; and be further

RESOLVED, that upon the approval of this resolution the Republican National Committee shall deliver a copy of this resolution to each of Republican members of Congress, all Republican candidates for Congress, as they become known, and to each Republican state and territorial party office.