Another Over-Educated, Nobel Prize Winning Idiot

An exchange between Nobel Prize winning economist Eugene Fama and Rick Santelli on CNBC caught my eye yesterday morning. 

It was a fairly remarkable exchange which showed just how much ivory tower academics can be detached from the real world.  I think that PhDs at the Fed and the predominance of (Marxist) academics in this administration are ruining this country.  We need more 'real world' businessmen in key positions throughout government and the Federal Reserve.  These academics apparently don't know anything!

Rick Santelli was talking to the professor about the continuation of the $85 billion bond purchase program (QE) and about how and when to end it. 

Fama  says "it's basically a neutral event... It's No Big Deal!"

"Let me interrupt you," Santelli interrupted at one point. "If it's no big deal, then why don't all central banks just do this to the nth degree and make it a constant day to day week to week event where they purchase what's issued, keep interest low, and just target a low rate forever. Why won't that work then?"  The professor scoffed condescendingly at the question saying "there is so much confusion in the question." 

Confusion?  Maybe, but Rick's analogy could be extended even further: why bother to tax at all?  Why not just let the Federal Reserve buy all of the debt issued by the Government all of the time (to the nth degree as Rick mentioned)?  There is no need to tax citizens at all! 

If it wasn't such a big deal, why the prolonged Federal Reserve debate, with plenty of hand wringing, about just the beginning of the end of the QE program??  Prognosticating about what the Fed will do in it's massive monetary experiment is the singular obsession of the professional investor community--a very unhealthy thing in itself.

Remember when the Federal Reserve even hinted in May that it might slow it's bond buying sometime in the future?  The 10 year treasury bond yield rocketed from 1.6% to 2.9% in about a month along with mortgage rates.  Imagine if they had actually slowed the buying of bonds, or heavens forbid, actually sold some of the bonds that it's been accumulating!!?? 

It's abundantly obvious that the Fed has, at the very least, succeeded in massively distorting bond prices by their intervention in the market.  When I say distorted, I mean bond prices are too high and interest rates too low. 

And there are problems with nascent asset bubbles.  Cheap money is finding it's way into the stock market and reinforcing a bubble there.  Companies are using cheap borrowed money to buy back their own shares.  Stock market margin debt is at record levels and so are stocks.  Bond yields are so low that the Fed is making the stock market the "only game in town." Housing is suddenly inflating at 12% per annum (from a low level).  Medical costs are inflating enormously.  Farm land prices are soaring in the Midwest.  

Does this sound like "no big deal?"   

All of these market interventions will be reversed at some point and will create more problems, including bursting bubbles.  We're living through the aftermath of one burst bubble already---created courtesy of the Federal Reserve and the Government. We've all learned of the damage from burst bubbles and we're headed in that direction again. 

Like I said, PhDs, LLDs and Nobel Prize winners are ruining this country.

Guest Post: The Staus Quo is Intellectually, Financially and Morally Bankrupt

From Charles Hughes Smith at Of Two Minds blog:

"The financial storm clouds are gathering, ominously darkening the horizon. Though the financial media and the organs of state propaganda continue forecasting blue skies of recovery and rising corporate profits, the factual evidence belies this rosy forecast: internal measures of financial and economic activity are weakening across the globe as the state-central bank solutions to all ills--massive increases in credit creation, leverage and deficit spending--have failed to address any of the structural causes of the 2008 Global Financial Meltdown.

This failure to address the causes of 2008 Global Financial Meltdown is disastrous in and of itself--but the status quo has magnified the coming disaster by scaling up the very causes of the 2008 Global Financial Meltdown: excessive credit expansion, misallocation of capital on a grand scale, an opaque shadow banking system constructed of excessive leverage and a dependence on phantom collateral, i.e. risks and assets that are systemically mispriced to skim stupendous profits for financiers, bankers and their political enablers.

This is what I have called doing more of what has failed spectacularly...

Doing more of what has failed spectacularly--inflating new asset bubbles in housing, stocks and bonds via quantitative easing, obfuscating financial skimming operations with thousands of pages of new regulations, and so on--is the equivalent of pushing an obese, unfit person to run uphill. Rather than repair the system, doing more of what has failed further stresses the system.

But even if the financial system were cleansed of bad debt and phantom collateral, the status quo would remain only partially repaired. For it's not just the financial system that has reached the point of negative return: the entire economic foundation of the developed world--credit-dependent consumerism--is as bankrupt and broken as the financial system that fuels it.

The state's response to this economic endgame is de-personalized welfare, both corporate and individual. When favored sectors can't succeed in the open market, the state enforces cartel-capitalism that enriches the corporations at the expense of the citizenry. When the cartel-state economy no longer creates paying work for the citizenry, the state issues social welfare benefits, in effect paying people to stay home and amuse themselves.

This destroys both free enterprise on the corporate level and the source of individual and social meaning, i.e. the opportunity to contribute in a meaningful way to one's community, family and trade/skill.

The status quo is thus not just financially bankrupt--it is morally bankrupt as well.

The status quo is as intellectually bankrupt as it is financially bankrupt. Our leadership cannot conceive of any course of action other than central bank credit creation and expanding state control of the economy and social benefits, paid for with money borrowed from future generations."

My Visit to Healthcare.gov

Sometimes a picture says a thousand words (hat tip to ZeroHedge):

I visited the  Healthcare.gov website this weekend.  I logged on just to look around.  The website was "down" about half of the time during various attempts to browse it.

On the other hand, if you want to see a great site (but one with diminishing options thanks to Obama and his fellow socialists), go to www.ehealthinsurance.com.   At that site, you used to be able to get 100s of options to find exactly what you want at a price you want to pay.  Ah, the wonder of the formerly free market.  Now, many/most options that you want are literally becoming illegal.  Like the cartoon above, you have to get on board.

The administration's site is "amateurish" and even ridiculous when considering the $600 million dollars spent so far.  There are no hyper-linked details for any of the plans listed, so you have no idea of what's on offer for the inflated price.  The choices are limited and conform to one (expensive) idea of what insurance is all about.  Me and millions of others are being forcibly upgraded to get benefits that we don't want.

For example, I don't want prescription benefits or any benefits for doctor's office visits.  In a similar way, why would I want insurance coverage for oil changes on my auto insurance?  It would just raise my costs due to the added administration costs of the insurance company to approve, pay and keep track of such stuff.  

My blog My Damage From Obamacare tells the tale of my insurer cancelling my high deductible policy and offering a ACA-compatible policy at double the cost compared to earlier this year.  My health insurance cost will have gone up 5-Fold since the President started flapping his lips to "transform" America and our healthcare system. 

The website may be experiencing "technical difficulties." Technical difficulties can be fixed.  But, what can't be fixed are the intellectual deficits in the people behind this law. 

Those can not be fixed except to "clean house." Welcome to government by the ignorant and liars.

As if to prove that point, I'm listening right now to a report by NBC that the Obama administration knew back in 2010 that up to 75% of the 18 million people in the individual market (like myself) would find their insurance cancelled thanks to the mandatory coverage required by new law.   But the shameless liar, an accurate characterization of Obama, kept spouting his lies that "you can keep your insurance" while campaigning for his second term.  Also concealed before the 2nd election was the price tag of being forcibly upgraded to a one-size-fits-all approach embodied in ObamacAIR.  

Whatever Obama Advises, Do the Opposite

After the "manufactured crisis" of the debt ceiling non-negotiation negotiation the President advised the American sheeple to ignore the bloggers.  Here's what he said:

Now that the government has reopened and this threat to our economy is removed, all of us need to stop focusing on the lobbyists, and the bloggers, and the talking heads on radio and the professional activists who profit from conflict...

Isn't that rich?  Professional activists "who profit from conflict."  It sounds like what a community organizer/activist does. It also sounds like what the race-baiting charlatans like Al Sharpton and Jesse Jackson have done to profit over the decades.  For example, take another manufactured crisis in the Zimmerman trial which was fomented by Holder, Obama and a legion of thoroughly discredited black "leaders."  Fortunately, a jury of responsible women shut that down.

It reminds me of another occasion when the President advised me not to listen to the voices that warn of government tyranny.  See my blog I've Warned You of Government Tyranny.  The President said the following to our young, impressionable minds at Ohio State:

..you've grown up hearing voices that incessantly warn of government as nothing more than some separate, sinister entity that's at the root of all our problems. Some of these same voices also do their best to gum up the works. They'll warn that tyranny always lurking just around the corner. You should reject these voices. 

He said this just before we learned of the extensive IRS persecutions of citizens who happen to disagree with the administration,  after we had been stonewalled regarding the Benghazi lies and "talking points,"  and learned of the monitoring of journalist's phones and emails in an unprecedented affront to freedom of the press.  All of this is more reminiscent of the Soviet Union rather than the USA.  After all, Communists always rely on lies and, control of the media, and propaganda.  Get it?

This blog has warned many times that the biggest problem with big and bigger government is loss of freedom and inevitable government tyranny.

With the lamestreet media firmly in Obama's pocket, I advise to NOT take any of the President's advice.  In fact, do the opposite.  There is a deep and sad intellectual bankruptcy in this President, this administration, the government and the Media.   In fact, the only place to find the truth these days is in the blogosphere and, from time to time, Fox News.

US Energy Production is Up, But Down On Federal Land

US fossil fuel production is up sharply in the USA but it's all from private (and State) lands, not Federal Land.

The Obama administration has worsened the oil and gas permit process which has slowed down energy production on Federal lands.  I believe it's intentional.  And it's worked!  After all Obama has said repeatedly that he wants oil prices (and pump prices) to rise to justify his favored energy alternatives.  Those alternatives are only economically justified when compared to very high oil prices.  I bet that Obama is actually annoyed that the US-led energy boom has led to cheap natural gas prices that are 3 to 4 times cheaper than in Europe.  He would deny any of this, of course.  He would simply dismiss this as right wing "talking points."

See my blog: US Energy Revolution Shows Fallacy of Central Planning.   US energy production is strongly up. 

Overall Energy Production Mostly Due to Fracking Revolution

As overall energy production is rising, it is all due to state and private land production.  Overall energy production is falling on Federal lands.  From Carpe Diem blog;

There's good reasons for this difference.  States manage their resources much more effectively than the Federal Government.  But, does the Federal Government do anything well?   About the only thing the Federal Government does efficiently is writing checks as in the Social Security system.  Just about anything else is ineffective, costly, inappropriate, and never-ending.

State Permitting Process Versus Federal Permitting

The Obama Administration has increased the bureaucracy regarding oil and gas permitting on Federal lands compared to the States.  There are stark differences now between the effectiveness of US States and the Federal Government in the regulation of Oil and Gas.

From the Heritage Foundation regarding the difference between the States and Federal permitting:

North Dakota processes a permit in an average of 10 days.[4] Other states have similarly short time frames: Colorado’s average is 27 days (and improving),[5] Ohio’s average is 14 days,[6] Texas’s average is five days (expedited permits are two days),[7] and even California is seven days and by law must be processed within 10 days or the permit is automatically approved.[8]

The average application for a permit to drill on federal lands was 307 days in 2011—a 41 percent increase since 2006—because of an increasingly complicated application process. In 2011, it took industry an average of 236 days just to submit the permit application and the Bureau of Land Management another 77 days to approve the permit.[10]

Other hurdles that industry faces when attempting to drill on federal lands include the environmental analyses required by the National Environmental Policy Act and the legal challenges from anti-drilling advocates create additional unnecessary delays. From lease sale until actual production, drilling on federal land can take up to 10 years, as opposed to one or two years on private and state-owned lands.[11]

Leftists and their supporters will flatly ignore, deny or vilify these facts and this blog as "right wing talking points."  But it is the Left that are the deniers.  And they deny the obvious truth that the Federal Government  is usually ineffective and even harmful.

Jim Grant: Another US 'Default' Inevitable

Jim Grant says that a US debt default is inevitable but not the way you usually think of it. In fact, we've 'defaulted' in our history a number of times. The default that I'm talking about is from inflation or 'devaluation' that dilutes the value of our currency and reduces the value paid to our foreign and domestic creditors.

A little history lesson: The dollar was defined in post US revolutionary time as 1/20th of an ounce of gold. This lasted until FDR, when he devalued to 1/35th of ounce of gold. That lasted until the Nixon administration where he abandoned the Bretton Woods accord (1971) and let the dollar price float and freed it altogether from it's anchor in gold. Today, one dollar is 1/1,325th of an ounce of gold. US prices since the formation of the Federal Reserve have risen 23 fold in 100 years, a 95% devaluation.

Although a good bit of dollar devaluation occurred after 1971 but also occurred during periods where the gold standard was in force.  But it is the rise of federal deficits, chronic trade imbalances, chronic current account imbalances and money printing that have occurred after 1971--all of which threatens another Great Depression.  We barely avoided depression in 2009.  Since nothing has been fixed, expect more crises and more brushes with disaster. 

The gold standard has many problems but those problems will pale in comparison to the troubles ahead with the "PhD standard."

From Jim Grant in the Washington Post:

The U.S. government defaulted after the Revolutionary War, and it defaulted at intervals thereafter. Moreover, on the authority of the chairman of the Federal Reserve Board, the government means to keep right on shirking, dodging or trimming, if not legally defaulting.

Default means to not pay as promised, and politics may interrupt the timely service of the government’s debts. The consequences of such a disruption could — as everyone knows by now — set Wall Street on its ear. But after the various branches of government resume talking and investors have collected themselves, the Treasury will have no trouble finding the necessary billions with which to pay its bills. The Federal Reserve can materialize the scrip on a computer screen.

Things were very different when America owed the kind of dollars that couldn’t just be whistled into existence. By 1790, the new republic was in arrears on $11,710,000 in foreign debt. These were obligations payable in gold and silver. Alexander Hamilton, the first secretary of the Treasury, duly paid them. In doing so, he cured a default.

Hamilton’s dollar was defined as a little less than 1/20 of an ounce of gold. So were those of his successors, all the way up to the administration of Franklin D. Roosevelt. But in the whirlwind of the “first hundred days” of the New Deal, the dollar came in for redefinition. The country needed a cheaper and more abundant currency, FDR said. By and by, the dollar’s value was reduced to 1/35 of an ounce of gold.

By any fair definition, this was another default.  Creditors both domestic and foreign had lent dollars weighing just what the Founders had said they should weigh. They expected to be repaid in identical money.

Language to this effect — a “gold clause” — was standard in debt contracts of the time, including instruments binding the Treasury. But Congress resolved to abrogate those contracts, and in 1935 the Supreme Court upheld Congress.

The “American default,” as this piece of domestic stimulus was known in foreign parts , provoked condemnation in the City of London. “One of the most egregious defaults in history,” judged the London Financial News. “For repudiation of the gold clause is nothing less than that. The plea that recent developments have created abnormal circumstances is wholly irrelevant. It was precisely against such circumstances that the gold clause was designed to safeguard bondholders.”

The lighter Roosevelt dollar did service until 1971, when President Richard M. Nixon lightened it again. In fact, Nixon allowed it to float. No longer was the value of the greenback defined in law as a particular weight of gold or silver. It became what it looked like: a piece of paper.

Yet the U.S. government continued to find trusting creditors. Since the Nixon 'default,' the public’s holdings of the federal debt have climbed from $303 billion to $11.9 trillion.

If today’s political impasse leads to another default, it will be a kind of technicality. Sooner or later, the Obama Treasury will resume writing checks. The question is what those checks will buy.

“Less and less,” is the Federal Reserve’s announced goal.  Under Chairman Ben Bernanke (with the full support of the presumptive chairman-to-be, Janet Yellen), the central bank has redefined price “stability” to mean a rate of inflation of 2 percent per annum. Any smaller rate of depreciation is an unsatisfactory showing to be met with a faster gait of money-printing, policymakers say.

In other words, the value of money has become an instrument of public policy, not an honest weight or measure. In such a setting, an old-time “default” is impossible. How can a creditor cry foul when the government to which he is lending has repeatedly said that the value of the money he lent will shrink?

The Five Big ObamaCare Lies

I recently wrote a blog titled Liberalism Imposed by Lies, Tricks and Doesn't Work as an explanation that, only through tricks, half-truths and even lies, will the liberal agenda be foisted on the American people.

It turns out that ObamaCare is the ultimate example of what I've said.  It was passed by administrative "tricks" (the law wasn't even voted on in the House--it was "deemed to have passed").  Furthermore every single selling point used by the communists in the White House and Congress to sell the law are ALL LIES.

The Five Big Lies Used to Sell ObamaCare

Lie #1:  The promise of Universal coverage.  According to the latest CBO projections, some 50% or 31 million people of those without insurance will still be uninsured by 2023.  This  is a far cry from universal coverage that the president promised.

Lie #2:   No new taxes on the middle class.

According to theThe Weekly Standard article "Health Reform Breaks Bad"

Obamacare’s employer mandate penalties ($106 billion) assuredly will hit the lowest-income workers, since they are the ones least likely to be covered through employer health plans. Similarly, taxes levied on health insurers ($101.7 billion), drug manufacturers ($34.2 billion), and medical device manufacturers ($29.1 billion) nominally are levied on big corporations. But everyone knows these ultimately will be passed along to consumers in the form of premium increases or higher out-of-pocket spending. 

How do we know this? Because the Congressional Budget Office told us so, in November 2009, months before Obamacare was actually signed into law. Oliver Wyman, a well-known international consulting firm, has estimated the health-insurers tax alone is expected to increase premiums for single coverage by a minimum of $2,150 over the next 10 years while boosting family premiums by $5,080 during the same period. Even older people on Medicare Advantage plans, who tend to have lower-than-average incomes, will see premiums go up by $3,590 over 10 years according to the Oliver Wyman calculations.

Even for progressives who might fantasize that these corporate levies will somehow come out of big business’s (presumably obscene) profits, there can be little doubt that the individual mandate ($55 billion)—which, in fairness, wasn’t a tax until Chief Justice John Roberts declared it to be—will hit the little guy. Likewise, the new limits on Flexible Spending Accounts ($24 billion) and the higher threshold for deducting medical expenses from one’s income tax ($18.7 billion) will hit average families squarely in the pocketbook.

So, in summary, about 70% of the new ObamaCare taxes will affect the middle class.

Lie #3:  ObamaCare will save the average family $2,500 per year.

In my blog, ACA Increases Family Healthcare Costs By $7,450 Per Year makes the point that the law will not save $2,500 per year, but INCREASE health care spending by about $7,450 per year.  Big difference.

Lie #4:  "I will not sign a plan that increases the deficit by one penny"

The GAO has said that  Obamacare will add about $6.2 trillion to the long term deficit as reported by Andrew Stiles at the National Review.  Most Americans know that when something sounds too good to be true, that it is not true.  I make the case in an upcoming blog that, because prices of ACA policies are so high that few, if any, young people will sign up on the (non-)functioning exchanges. That means that only sick, older persons will sign up and insurance premiums will go up further next year to cover those persons. Only draconian penalties would have forced young people onto the exchanges--akin to putting a gun to their heads.   It's a cost disaster.  Furthermore, it would have been miles cheaper just to target the very sick persons that find themselves without coverage without all of the new bureaucracy, control, central planning and cost of the law.

Lie #5:   If you like your doctor, you get to keep him/her, If you like your current health plan, you get to keep it.

I wrote a blog called No You Can't Keep Your Existing Coverage that shows decisively that you can't keep your existing high deductible policies.  Nearly every plan will be affected by ACA rules and will raise plan costs.  I've said before that doctor's are fleeing the new law and leaving the profession.

It's becoming increasingly clear to me that the Obama Administration and it's enablers are a bunch of Communists. How do I come to that conclusion? Consider that the  Communists have a long history of lying to: 1) maintain their power: 2) maintain their elite privileged position and benefits, 3)  manipulate public opinion---all through propagandist lying.   Ultimately they manipulate a captive media to keep the people in the dark,  use crony-style bureaucracy to harass the opposition (and influence elections) and ultimately use totalitarian methods to maintain their position, power and privilege at the expense of the people and their country.

I think this is a fair assessment of the ultimate end of the political tactics of the Obama administration.  

Lies, Half-Truths and Idiots Everywhere

There's no future for this country when the majority of the people are idiots and liars.  It's especially disturbing when the nation's opinion leaders are the biggest idiot-liars of them all.

Idiot "Shutdown" Talk

The idiot-liar media kept saying the government is shutdown when only 800,000 (then down to about 400,000) employees out of 2 million Federal employees were furloughed. There are 20 million persons working in government direct and indirect, so 1/2  million furloughed out of 20 million is hardly even a slowdown much less a shutdown.

Nonsense "Default" Talk

Then came media hysteria about the government "default."  When federal government revenue is $250 billion per month and interest payments on the debt is only $20 billion, it's pretty clear that there is not much risk that bondholders won't be paid.  There was never a risk of default.

Despite that, Obama was irresponsibly warning about Armageddon and literally threatening default.  He tried to crash the stock market to increase the drama.  He was looking to create the maximal damage to the citizens like he did when the sequester cuts took effect.  All of this is extremely un-presidential and amateurish.

Politicians Are Nearly All Idiot-Liars

Obama is one of the biggest "idiot-liars" out there--the great truth-twister. One minute he's touting that the gov't deficit is coming down, then in the next sentence denouncing the sequester spending cuts which is partly responsible for the improvement (also the payroll tax increase).  He also said that the deficit is coming down because the economy is improving, but the economy is not improving.  It's a flat economy at best.

The BLS (Bureau of Labor Statistics), and most administration economists are basically lying when they say that employment is improving when the number of jobs is stagnant.  The "improvement" in the unemployment rate only reflects a huge drop in people looking for work and therefore they are no longer counted as unemployed.  Statistics lie.

CBS News and the Rest of the Media Is Irresponsible Too

I turned on CBS Evening News last night and the first report was that Ted Cruz caused the debt limit standoff which "threatened default."  First, wrong about default.  And misleading about the extent of shutdown.  Yeah Ted Cruz, in trying to defund ObamaCare, did overreach but that demand quickly morphed into a reasonable request to delay the ObamaCare individual mandate.

But CBS doesn't have the integrity to mention that Obama abdicated his constitutional duties by "not negotiating."  They didn't report that Obama was not acting lawfully when he unilaterally delayed the employer mandate.  They rarely mention that only 36% of persons polled want ObamaCare--far from the mandate that Democrats claim.   From the beginning, more than 50% don't want it.  Approval numbers are dropping daily as the price of ACA compliant policies becomes known.

Obama and Democrats Purposefully Crashing Our Constitutional System

Obama and Democrats are purposely crashing our Constitutional system when they tried to ignore the House of Representatives during the debt ceiling debate.  The Republicans, who inconveniently control the House of Representatives, happen to represent about half the people in this country.  Reid and the President tried to make them completely irrelevant, as if they have no say.  Wrong, wrong, wrong.  They are trying to smash our Constitution.  This is what Communists do.

They want to propagate the myth that Republicans are in a permanent winter and irrelevant.   I hate to tell the Democrats, but there are more Republicans in this country than Democrats.  Fully 60% of state governors are Republicans.  There are more Republicans in Congress than Democrats when you add up both houses. The majority of Americans have leaned Conservative for many, many decades.

Climate Change Nonsense

Last night, I turned on Nova on PBS.  The show was about "super storm" Sandy.   Within one minute of the start of the program, the announcer began, "because carbon dioxide is rising in the atmosphere...."   At that moment, I instantly turned the channel. 

No one will ever  report the fact that this year's hurricane season is one of the slowest on record.  There are only 2 minimal hurricanes so far this season---both barely hurricane force--and the season is finished.  Only one weak storm struck Central America.  Normally there are 9 hurricanes and 3 are major storms (Cat 3 or higher).  This year, 2 very weak hurricanes and 0 major storms.  It must be climate change!!  Right?

You'll never hear that reported on PBS.

Superstorm Sandy Wasn't That Super

Another comment about that NOVA program. Sandy was NOT a particularly strong storm. In fact, Hurricane Sandy was downgraded to a post-tropical cyclone as it made landfall in New York City.  It wasn't even a hurricane at all, but now it's a "super-storm" in the media. It was a nor'easter.

Northern NJ and NYC rarely gets a direct hit, so they rarely get such the tidal surge that is typical of minimal hurricanes.  Untested coastal structures were hit very hard.  In fact Sandy was the first storm in modern history (year 1900 or later) whose eye hit just west of NYC on the northern NJ coast.  Most storms hit eastern Long Island.   Even the severe 1938 storm hit east of the city sparing NYC the brunt of the storm. 

The 1938 storm was truly deserving the title super storm.  It was a huge and powerful storm with 130 mph sustained winds.   That storm's tidal surge was 17 feet (measured at Rhode Island).  The subways were flooded in NYC during that storm as well. 

Sandy's 13.9 foot storm surge was high in northern NJ and southern NY but not unusual or abnormal compared to other minimal hurricanes.   And coastal structures and homes do get wiped out.  But people continue to build as if these storms don't happen.

Yes, Sandy was a strong storm, but there were other weather systems in place when the storm struck. For instance, there was widespread snow in inland areas due to a weather systems already in place and intensified by Sandy.  In that one sense, it was a very large storm. But it was more like a Nor'easter than anything else.

Canadian Immigration Policies Far Superior to the US

I've said that the US needs a comprehensive immigration point system like they have in Canada. This idea is especially important when both political parties are barking up the wrong tree when it comes to immigration reform.

Twenty first century America mostly needs highly qualified and highly skilled people to better compete in the world economy.  Don't you think America should be targeting and granting visas for the best qualified people? 

Undocumented psersons from Mexico and Central America are generally low-skill, poorly-educated persons that bring little to offer the US in the 21st century.  These people, who come here legally or illegally, are barely 'making it' in this country and bring little to offer in terms of skills that we need.  We already have plenty of poorly educated and low skilled people!  The Obama economy is not creating low level jobs and leaving many young people shut out of the job market.  Sadly, even the few college educated illegal (or otherwise) immigrants from Mexico and Central America will find few opportunities in this economy thanks to numerous other failed policies of our current regime.

The Democrats are ever so eager to give amnesty to 11 million illegal or undocumented Latinos but continue to ignore (or pay lip service to) tighter border enforcement and/or stymie any effort that allows local law enforcement to check immigration status.  In this way, the government, for decades, has been sending a signal to would-be illegals that we are "soft" on enforcement.  In essence, the US government has been encouraging illegal immigration, wink-wink.  That could change overnight if we started checking status.

It's time to let all potential immigrants apply to an objective ranking system like the one in Canada.

Adopt the Canadian-Style Immigration Point System

Here's a great article on the effectiveness of an immigration point system in Canada.  We should adopt their system.  Canada is the only country in the Western world that is not royally screwing-up their public policies.  We have a lot to learn from them, including the way they handle immigration.  From Market Watch:

[Canada's] corporate tax rate, at 15%, is less than half the U.S. rate. Its debt is 35% of GDP, instead of the U.S. rate of 73%. But where Canada really shines in comparison to the United States is in its immigration policy.

Consider the simplicity of the Canadian immigration system. To enter Canada through its federal skilled worker program, applicants are ranked on a points system. One hundred points are possible, and 67 are required to get an entry visa. Included are English and French language skills (28 possible points), education (25 points), experience (15 points), adaptability (10 points), age (12 points), and job offers (10 points).

In contrast, U.S. H-1B temporary visas for new skilled immigrant workers, limited at 85,000 annually, do not meet demand. Acquiring permanent residency (a “green card”) is a lengthy and potentially costly process. Talented immigrants, such as the 51% of engineering doctorate earners and the 41% of physical sciences doctorate earners who are foreign-born, are frequently forced to leave the United States. Many come to Canada.

H-1B visa applications can be filed on April 1 of each year. In 2013, the cap was reached within the first week of the filing period. In 1999, Congress temporarily raised the quota to 115,000, and again to 195,000 in 2001, a number that did not exceed demand, but the quota reverted to 65,000 (plus 20,000 awarded for recipients of U.S. advanced degrees) in 2004

In nearly every way, US government oversight and policies are not working well for this country.  There is a severe lack of intellectual capability at the Federal level of government.   Any rational change appears impossible.  Sadly, a point system for immigration is entirely too logical, effective and objective for our idiot-liar leaders.

ObamaCare Exchanges Flop

If you ever wanted a summary of the performance of the mal-performing Healthcare.gov exchanges, just look at the graph below:

Maryland is reported to have signed-up just 1100 persons so far (end of week 2).   Just 5 people have signed-up in Iowa.  NO one has signed up in Hawaii.

The Federal exchanges are doing the worse by far.  The healthcare exchanges, run by the federal government, is a classic example of over-arching Information Technology projects.  The IT industry has a horrible record of project failures, something like a 60 to 70% failure rate.  The reason:  too ambitious goals and over-arching reach for 'comprehensive' systems.

I have said that comprehensive anything from Washington is a flop.  I rest my case.

Obama Administration's Extortion of JP Morgan

Remember when Obama's Department of Justice "extorted" a $25 billion settlement from BP after their oil spill disaster?  Then he appointed one of his "czars" to spend it "for" them.   It was really  political theater since BP would have been responsible in settling claims without such a huge and arbitrary claim of $25 billion.  Where did Obama come up with this amount, anyway?  He pulled it out of his you-know-what.

Naturally, with such a huge settlement, BP has charged recently that the settlement "gravy train" has turned fraudulent and is arguing for an end to the open-ended payments by claiming, among other things, that administrators are receiving kickbacks. 

Speaking of political theater, remember when Obama's people hired local people for a few hours to be "seen" to rake up tar balls off of the beach behind him for a television appearance?  Once the "show" was over, those people were told to shove off.  Those people were not happy.  Worse, there wasn't any oil on the beach.  Reporters had to search hard to find any tar balls.  (the disaster was terrible but it's amazing how little oil hit the Gulf beaches).

Now fast forward to the present and our wonderful administration is trying to extort some $11 billion in fines/settlement charges from JP Morgan in connection to it's packaging and selling of mortgage securities prior to the financial bust.   JP Morgan has set aside a whopping and eye-popping $23 billion in reserves to cover potential legal liabilities--suits mostly orchestrated by the US Government.

From the Wall Street Journal:

The talks revolve around residential mortgage-backed securities that J.P. Morgan, Bear Stearns Cos. and Washington Mutual Inc. issued between 2005 and 2007.  

Authorities have been investigating whether J.P. Morgan, which acquired Bear Stearns and Washington Mutual during the financial crisis, misled investors about the quality of the underlying mortgages that were tied to the securities. Many of those securities collapsed in value as housing prices eroded. J.P. Morgan has estimated that roughly 70% of the securities involved were issued by the other two institutions.

Wait, those "acquisitions" of Washington Mutual AND Bear Stearns were BOTH shotgun marriages orchestrated by the government during the crisis!  JP Morgan was forced to buy these companies at the behest of the Federal Government!

Now this administration is trying to "punish" and "extort" huge fines from this company?   Yeah, no bank has perfectly clean hands from the pre-crisis days, but it can be argued that JP Morgan helped stabilize the financial system during the panic by absorbing the troubled institutions.  Now their reward is extortion and lawsuits led by the administration?   There is a virtual witch hunt of potential litigation and agency attacks on JP Morgan and Jamie Dimon these days.  For more information on this, see here.

And Jamie Dimon has been a friend to Obama and the administration. Wow, with friends like that, who needs enemies?  They say that Obama has no friends and I see why!

Obama is following a well-known path of African American extortionists like Al Sharpton and Jesse Jackson who made a "black grievance" industry out of accusing companies of "racism" and settling for $millions for themselves.  Obama himself, in his short public career, is involved up to his eyeballs in billions of dollars of taxpayer money extorted in the Pigford scandal that was about as criminal as you can get.  See my blog Obama (partly) To Blame for Massive Gov't Fraud.

How to Replace Obamacare and Why

In my blog "ObamaCare Doubles-Down On a Broken Medical System" I describe how costs are rising in our healthcare system because everyone---hospitals, doctors and patients----are using "other people's money." No one has any incentive to control expenditures. Plus we have an aging population adding demand to the system.  Also open-ended government spending in Medicare and Medicaid has been a big driver of medical cost inflation.

I've also written in my blog My Damage From ObamaCare that my personal health insurance cost will more than double this year alone (for an ACA plan) and will have risen 5 fold since Obama's inauguration.  And I'm "older" and supposedly shielded from some of the biggest cost increases!  Some families will see a tripling in costs.  ACA will cause a rise of family spending of $7,450 on medical insurance NOT a DECREASE of $2,500 as the President promised.

ObamaCare has already increased costs and will further increase costs due to:

1. increased benefits--even benefits that you don't want.  You will be forcibly upgraded by some bureaucrat's notion of insurance coverage regardless of what you want.
2. the mandate to cover pre-existing conditions well before the insurance coverage is universal  means that older and sicker people sign up first while young people "run for the hills"
3. fixing the benefit to elderly at no more than 3 times that of young beneficiaries will raise prices for young persons to "subsidize" older people, 
4. the added cost of bureaucratic government compliance and red tape from the government; reporting requirements, digitizing records, etc .
5. the government is increasing demand in a the medical system with no regard to expanding "supply" in the medical services.  
6. doctors are fleeing the profession, fleeing the strong arms of the government (decreasing supply)
7. no effort whatsoever in the law to control costs such as tort reform or insurance reform
8. the program will invite more and more fraud

ObamaCare will increase the size (and cost) of government itself in a dramatic way.  And of course Obama will want to raise taxes more to cover all that.

Then there's the ObamaCare panel, probably correctly labeled the "death panel" that will make general pronouncements about what the "government" will cover regardless of your particular case.  I've written that even Dems Agree ObamaCare Panel Will Not Work:

This 'board' is an unworkable "medical rationing" committee which will make pronouncements about medical spending for large categories of persons (with no knowledge of each individual situation) to try to "save" costs.  An unelected, unaccountable panel of 15 persons can't do squat except cause millions of problems!  It's totally unworkable!  It's like a Soviet-style "politburo" trying to preside over the health care of 100s of  millions of persons.

Get Ready For Hell

Expect further medical insurance price rises next year after huge rises this year.  Because of much higher ObamaCare prices, fewer young people will sign up and instead opt for the small penalty.  Only sick and older people will sign up for the program (if they ever can fix the computer programs at healthcare.gov which is a big flop).  Then insurers will raise premiums again to cover costs next year---this time in an election year.

Add this to the fact that ObamaCare is already hurting businesses despite denials from Obama (except for the 1000s of businesses politically connected who were granted waivers--many in Nancy Pelosi's district).  If you're a young college grad, you're already feeling the bad job market.  The blame is substantially on Obama's policies including ObamaCare.

Then next year, as costs continue rise to the point where no one can afford it,  Obama will make an impassioned plea to expand government spending and expand coverage to "take care" of people who are suffering so much.  But it will have been the government who has caused the problems.  So, expect deficits to rise again after some progress this year.  Worse, the more government spends, the more medical prices inflate.

This is a recurring theme in modern history: the government causes a problem by it’s intervention in a market, then further intervenes to “fix” the very problem(s) it caused.  The result is usually worse plus you're left with a permanently expanded government.  Then come the tax (or deficit) increases to pay for all of this.

At the end of all of this, you'll be left in hell with higher taxes, still large government budget deficits, rapidly rising medical costs, a government "managed" healthcare system, the death panel, waiting lines, bigger and more intrusive government and few job opportunities.

Then, if America doesn't shift course, economic stagnation and debt leads to higher unemployment, debt crises, economic depression, social upheaval, possibly war and the end of the American dream.  

The end result of unbridled liberalism: collapse.  

Romney Had The Right Ideas But No One Listened

Liberals keep saying that the Republicans have no ideas for replacing ObamaCare, but it's not true at all.  So many liberals say this so often that it becomes common "knowledge" but it's incorrect, ie., a lie.   Mitt Romney, didn't do the best job in communicating his policies, but he had the right ideas.  In his campaign for President described his vision for market-oriented health reform taken from a Forbes article from Avik Roy:

“Everyone can agree that health care is broken,” he said in a speech in Metairie, Louisiana. “So the last thing we should do is allow Obamacare to freeze the current system in place. Instead, we need to encourage innovation at every level. States should have the flexibility to pursue new policy approaches. Insurers and providers should have the opportunity to compete in a genuine market. Most importantly, patients should have the information and control they need to make choices about what they actually want.”

Romney also suggested to give Medicaid back to the states in the form of block grants [a fixed amount, not open-ended]. This would free states from the mountain of red tape in Washington, and allow them to address their uninsured population in the way that makes sense for them. I’ve highlighted in the past how federal bureaucrats have thwarted modest and successful reforms in Illinois and Indiana. Contrast their experience to that of Rhode Island, where Medicaid reformers made significant headway due to a block grant-like waiver from the feds..

Solving the Pre-Existing Condition Problem and Attaining Universal Coverage

The problem of pre-existing conditions is mostly due to the fact that employers provide health insurance to a vast majority of insured (80%).  When you leave a job and have a pre-existing condition, then you have a problem re-entering the insurance market if you're sick.  But the 'pre-existing condition' problem is a relatively small problem.  You can buy a COBRA policy but these are expensive and are limited in duration.  A better solution: move people away from company-provided insurance altogether.  Transition people to their own policy and make policies portable across state lines through state insurance reform.

Since company's get a tax deduction for providing health insurance to employees, why not give a tax break instead to individuals to buy insurance for themselves and their families?   Give individuals a tax deduction or an outright tax credit (or even an outright subsidy or voucher if low income) to buy their own policies.  In this way, people have their own policies regardless of their employer or employment situation.   Poor people getting a voucher for coverage should partially replace Medicaid.

Notice with the tax deduction,  outright credit, or voucher,  you obtain nearly universal coverage.   If you're not employed, or very low income, you can get Medicaid (or vouchers).  ObamaCare, with much higher individual and governmental costs, will not attain universal coverage.  Such alternative policies would cost much less than ObamaCare since we're not imposing a huge new bureaucracy and disrupting the industry.

This is hardly a complete discussion of the various reforms of insurance and state laws that are required.  The best and most lengthy discussion I have seen is found at How to Replace ObamaCare by James Capretta and Robert Moffitt.  Here's a few highlights with some quotes from that very article:

1. Pass tax law changes to provide tax credits (or tax subsidies for low income persons) so that people can buy their own policies outside of their employer benefits (so it's 'portable').  Enact policies that encourage continuous coverage with at least high-deductible (catastrophic) health coverage.  Move people away from employer-provided policies to individual policies.
2. The federal government could close gaps in protection that emerge when people move from employer-sponsored plans to the individual market regulated by the states. Transition sick people without coverage and pre-existing conditions to high risk pools probably with government support. The Federal Obamacare website might be the start of a high risk pool as we speak.
3. Transition to Medicare and Medicaid block grants to states, fix the amounts spent, and let States innovate and manage the monies suitable for each circumstance.
4. reform medicaid system to a substantial "premium support" or voucher program so that these people shop for their own policies. Again government expenditures should be fixed or limited rather than open-ended.
5. states would need to amend their regulations of the individual and small-business insurance markets to require insurers to sell coverage to customers who have remained continuously covered. These new regulations would also have to require that such coverage be made available at standard rates — that is, at rates that apply without regard to differences in health status (age and geographic adjustments would be permitted).

We should do everything possible to avoid injecting the heavy-handed and strong-armed government into the insurance market and medical business as ObamaCare does.  We didn't do that, so get ready for hell instead.

Numerous Incidents of Black Mob Violence Not Reported

There's a rash of black mob violence occurring in many cities in this country and the stories are not being reported by media.  Most of these incidents of black mob crime are not being reported by media or "white-washed" to avoid revealing the racial nature of the crimes.  These episodes are so shocking, violent and disgusting that the media shies away from the true story.


A journalist named Colin Flaherty has written a book called "White Girl Bleed Alot" to expose the surprisingly large number of violent black mob crimes in many American cities and where coverage was suppressed in the media.  It's happened recently in Schenectedy NY and 70 other American cities,  From the story in FrontPageMag "White Girl Bleed Alot:"

It is easy to see why the powers that be want to keep a lid on several episodes of black mob violence in downtown Schenectady, NY.

This is the same kind of violence that caused people to flee places like Schenectady, Flint, Wilmington and hundreds of other cities around the country. Replacing vibrant, small town centers of commerce with hollow, dangerous hulks.

Now that investors are back, trying to rebuild Schenectady, the last thing they want is anyone talking about a large group of black people assaulting patrons in the shiny new downtown movie theater.  But that is what happened: The beat down. And the denial

I've personally seen reports of gangs of dozens of black men robbing stores in Tokyo by overwhelming the store owners with mob action.  The Japanese already have a very bad opinion of black people as it is.   They are tired of the crimes and rapes committed by US soldiers (both races) in Okinawa.  If put to a vote, the Japanese people would vanquish the US troops toute suite.

Here's Colin Flaherty's 9 minute video with his account of numerous black mob violence incidents at numerous cities around the country.  Many incidents are not being reported by media.  You'll see why---it's disgusting and revolting---people acting no better than animals. The sad truth is that these people ARE like animals.  But this is a insult to animals!  Have a look and make up your own mind (alternative link here)

Interview With Colin Flaherty, Author of 'White Girl Bleed Alot'

I don't enjoy reporting this.  I do so because of the false Liberal narrative that wants to paint a false picture that all is well in this country---while US inner cities are collapsing with black violence. It's a good example of a "head in the sand" quality that so well characterizes liberals.

Here's a few excerpts from the complete interview with Colin Flaherty who discusses his book and what he's discovered.  (Here's a link to a good extended radio interview here):

"Flaherty: My brother and I were doing a talk radio show in WDEL Wilmington, Delaware when I read a story about something called a flash mob on the streets of Philadelphia.  This was two years ago. Then it happened again and again. Finally I looked at it on YouTube, and the violence and mayhem I saw on video was totally different than the antiseptic account I read in the newspapers in Philadelphia.  Everyone involved was black. So I asked a few reporters: “What’s up with this race riot in Philadelphia?” They said it was not a race riot and I was imagining things. “Did you see the videos?” I asked. “Well, everyone is black but race has nothing to do with it.”

The riots kept happening, in Philadelphia and elsewhere. I kept asking people what was going on. They kept denying anything was going on.

So I decided I would write a book for the people who denied the reality of this horrific racial violence and mayhem. 

FP: Give us an example of the lies. 

Flaherty: Sure, Chicago. Memorial Day 2011. Chicago had been the site of a series of black mob attacks in all different parts of the city. In the downtown, the gay area, the public transportation, and the beaches, to name a few. So during the Memorial Day holiday in 2011, hundreds and hundreds of black people descended on North Avenue Beach and starting beating up people, knocking them off their bikes, wreaking havoc.  The next day, the city closed the beach. They said they did it, not because of the mob violence — they denied mob violence even took place there. They said they closed it because  it was too hot. A local radio station got the 911 calls, and people who were there called the station, and that showed that the beach was the site of a big civil disturbance, and the police administrators were not telling the truth about it.

I documented hundreds of examples in more than 70 cities. And here is what happens. I hear about a riot or a mob and I check it out and learn that it was a large group of black people creating havoc. So I write the details. In the course of reporting it, or after the story comes out, I almost always hear: “That’s been happening here a long time.”  But reporters are afraid to write about it. City officials are afraid to combat it, or call it by its name. So it goes on. And it is not just the places where you might expect it: Chicago, Philly, Boston, Baltimore. It’s in smaller places in the Midwest as well.

FrontPage: Like where?

Flaherty: Ames, Iowa. They had a “Beat Whitey Night” at the State Fair.  Peoria, Illinois. They had almost a dozen episodes of racial violence and lawlessness by black mobs over the last year. Milwaukee. Minneapolis. Seattle. Portland. And on and on."

Billy Graham: USA Drowning in a Sea of Immorality

From the Washington Times:

World-renowned Rev. Billy Graham, 94, said President Obama’s campaign promises for “hope and change” are little more than meaningless cliches and the reality is the nation is facing a dire future, about to collapse on its own immorality.

America is suffering from a “sea of immorality,” he said, adding that in his opinion, the second coming of Jesus Christ is imminent. Meanwhile, the trend in America is oppression — increased threats to First Amendment freedoms from an ever-encroaching government that is using digital data and technology to monitor innocent Americans, he told Newsmax.

“Our early fathers led our nation according to biblical principles,” Mr. Graham said, Newsmax reported. ” ‘Hope and change’ has become a cliche in our nation, and it is daunting to think that any American could hope for change from what God has blessed. Our country is turning away from what has made it so great. But far greater than the government knowing our every move that could lead to losing our freedom to worship God publicly, is to know that God knows our every thought. He knows our hearts need transformation.”

Stabilize Social Security and Medicare Programs!

Here's something Democrats should agree upon: Protect the Entitlement Programs.

Medicare and Social Security are good programs from which I hope to benefit.  But, when they were started in the late 1930s life expectancy was some 20 years lower at 67 years, benefits were understood to be a small supplement to personal savings, and there were some 160 workers for each beneficiary.   Now there is about 3 workers per beneficiary and dropping slowly.

Spending on all of these programs, especially Medicare/Medicaid, has outstripped payroll tax collection in recent years.  In fact, spending on all of these entitlements threatens to consume the entire Federal budget in several decades. And as government spending rises, so do medical costs/prices.  It's already pressuring discretionary spending like defense and domestic programs.  See the chart below from Heritage.org. (click to enlarge)

Red Line is Gov't Revenue as % of GDP,  Blue Lines are Entitlement Spending as % of GDP

Spending on Medicare, Medicaid and Social Security totals $1,570 billion (Social Security at $768 billion, Medicare/Medicaid at $802 billion for FY 2012) while tax receipts are only $925 billion (also FY2012).    You can see that there is a $645 billion gap or deficit comparing spending to tax receipts.  That amounts to a 70% shortfall based on tax collections.

Since these programs were meant to be paid for by payroll taxes, I propose that we "protect" these programs by a proposal to raise the FICA witholding by 70% to put the program in balance.  I would also propose to continue raising taxes each year to keep the programs in balance.  It's that or trim benefits.

If we did this, it would do several things.

1. It would start an important debate about how much to raise the payroll tax vs. how much to trim benefits.
2. It would communicate to the ordinary taxpayer, who doesn't pay close attention to Federal budget issues, that the 'books' are way out of balance in these important programs. 
3. It would communicate that entitlement spending, as is, is threatening to consume the entire Federal Budget.
4. It would alert younger workers and taxpayers to their outsized responsibility in taking care of the aging people in this country.

To balance these program's budgets, the current 7.6% payroll tax (FICA) would have to rise 70% or to 12.9% to match taxes to spending---and/or cut benefits. (It would raise the 7.6% tax on businesses to 12.9% also.)

Wouldn't that be an eye opener??   It should start a conversation on whether to trim benefits or accept the burden placed on younger workers.  Furthermore, balancing the entitlement deficits would balance the entire federal budget.  That's right, $645 billion is the projected budget deficit for this fiscal year.

Of course,  anyone who proposed such a thing would be labeled as hostage takers, anarchists, insane, arsonists and extortionists by the Democrats who want to keep their own heads in the sand.  It would be declared "dead on arrival" by Reid in the Senate, and so on.  They can't admit anything is wrong with their pet programs.

Social Security Disability Fraud

I've written about fraud in the Social Security Disability (SSDI) program in my blogs:  Social Security Disability Rolls Soar and 1.4 Million People on Welfare for "Mood Disorders"

It's become a stealth "welfare" program as costs and enrollment have soared in recent years--not only under Obama but Bush as well.  My understanding is that, with SSDI, you need not have paid into the SS system to get benefits and once in, your benefits basically continue for life.  Now comes a 60 Minutes expose talking about the Social Security Disability program.

From Mish's Global Economics Analysis and an interview with Tom Coburn:

Kroft interviews senator Tom Coburn of Oklahoma.  Coburn selected cases at random and found 25% of the cases were fraudulent and another 20% were "highly questionable". The "system is being gamed pretty big right now", said Coburn. "You need look no further than disability lawyers trolling for new clients."

Here's the 60 Minutes video (13:40 minutes):
(alternative link:  https://www.youtube.com/watch?v=8jtekHrfq3w)

It's a good video and makes good points substantiating the claims of fraud that I've mentioned in my blogs above.

The SSDI program is a good one which is exactly why the fraud should be addressed (but won't).   I'll bet you the fraud in SSDI is north of 25%  just like Medicaid and Medicare.  Since spending on these programs is $1.5 Trillion per annum, then the total fraud is about $400 billion or nearly 60% of our current deficit.

US Energy Revolution Shows Fallacy of Central Planning

The US oil and gas industry, vilified by the President, the media, and some members of our society (ie., liberals sitting comfortably in New York high rises enjoying abundant energy) is responsible for the only real boom in the US economy in recent years.  The President's hostility to fossil fuels is hardly a secret.

Remember when the President repeatedly said that: 
"we're running out of places to drill "
"you can't drill your way out of this." 
"US only has 2% of the world's reserves."

The President has incorrectly and unilaterally written-off the oil and gas industry in favor of uneconomic and marginal unconventional energy.  

With great irony, and despite the President's assumptions, the US is set to become the largest world energy producer in the world this year;  exceeding the production of Saudi and Russia.  See my blog US Top World Oil Producer as of March 2013.  This trend has continued.

US natural gas prices, driven by increases in production from the fracking revolution, are some 4 times cheaper than those in Europe.  This is a huge boon to power and chemical producers and retail consumers.  It is leading to big investments by companies like Dow Chemical to build chemical plants.  The US is otherwise starved for investments which is primarily responsible for the poor employment situation. It's only a matter of time before natural gas is used for transportation and displaces oil imports.

You would think the President would happy about this, but the US energy industry still has no friends in the White House or with most Democrats.  Republicans have been quick to point out the many benefits to employment and the balance of payments.

Here's a great chart showing the nascent energy boom from Carpe Diem blog:

US Fossil Fuel Production (Coal, Natural Gas, Oil) from 1947 to 2013 (est)

Central Planning Is Wrong Anywhere and Especially in America

 
This boom illustrates the problem with central planning, the key philosophy of the President. The government doesn't know what is best.  Ignorant politicians, who pretend to be smarter than they are and manage to talk their way into office, don't know best either.

When the government is wrong, they are really, really wrong.  That's why markets work better.  Markets are 100s or 1000s of 'entities' trying different things to find a competitive advantage.  This is why we have an actual energy boom but the President continues to be a champion of failed subsidies, wasteful spending and uneconomic, unattractive energy alternatives. 

There is a dictum that says that "it's not a crime to be wrong, but it is a crime to stay wrong."  This applies to the President.  There is another dictum that says, "there is none so blind as those who can not see."  This man never learns anything.  This is the problem with liberals---they never learn the right lessons despite repeated lessons of history regarding central planning.

One last point.  Fossil fuels can and will carry us to the next stage of cheaper energy and reduced CO2 emissions: Thorium Energy.

So Much For That Social Security "Lock Box"

The Social Security Administration says that a failure to increase debt limit would jeopardize social security payments.  From the Wall Street Journal:

The Social Security Administration has begun warning the public it cannot guarantee full benefit payments if the debt ceiling isn’t increased.

When asked by the public, the agency is notifying beneficiaries that “Unlike a federal shutdown which has no impact on the payment of Social Security benefits, failure to raise the debt ceiling puts Social Security benefits at risk,” according to a person familiar with the agency directive.

First of all, in my blog Fear-Mongering From Democrats is Irresponsible, I point out that there is plenty of current tax receipts to pay for social security, medicare, medicaid and pay interest on the public debt.   There's even enough to cover the military but not much more.

So, it's a lie to claim that Social Security payments won't be made.  They will.  It's just more fear-mongering.

But What about the Social Security Lock Box?

But why would the Social Security Administration warn about payments to beneficiaries when the Social Security Trustee's latest report claims that the programs are funded until 2032?

It's because there's no money in the so-called "lock-box."  And forget the stupid claims that social security doesn't add to the deficit.  The program is already in deficit and is indeed contributing to the budget deficit.  Jack Lew has lied to you, Al Gore has lied to you. Virtually all of the Democrats have lied to you about the solvency of this program.  The social security administration issues a fancy report each year and it's based on a very fundamental lie.

All too often, Liberalism is based on tricks and lies.  See my blog Liberalism: Imposed by Tricks and Lies, and Doesn't Work.

There's no money in any lock box--just IOUs.  The money has been spent long ago.  Current benefits are paid out of current receipts.  It's a pay-as-you-go system.  Yeah, there are government bonds in the trust fund, but government bonds in the hands of the government is a liability, not an asset.  That's where people are misled.  There's no money, no assets.  Thus the warning.

Here's the Social Security deficit projections that add to our future deficits:

Obama Voted Against Debt Limit Increase in 2006

I love Zero Hedge.  They ran this great image today to put the current debt limit (and CR) debate into an "interesting" light:

Yes, I agree with everything said.  Fast forward to today,  America now has much more of a debt problem than in 2006 and we definitely have an even worse failure of leadership.

America deserves better.  But America voted for this. 

Fear-Mongering from Democrats Is Irresponsible

The annual net interest payments on the Federal debt is $255 billion.  Since the Government receipts are over $3,000 billion per year, there is no chance of any default on US debt obligations.  That tax revenue works out to be about $250 billion of tax revenue per month and interest payments are about $20 billion per month.  All entitlement spending is another $125 billion per month.  That's $145 billion of absolutely essential spending per month versus $250 billion revenue.  So all Medicare and Social Security checks can go out.  All interest payments can be made---easily.

Yes, the interest payments (and tax collections) are "lumpy" meaning there possibly needs to be a cushion of money in the coffers.  To do that, we should have started the debt negotiations several months ago rather than days ago.   Or, the President needs to sit down and talk to the representatives of half of the population of this country---that half of the population that doesn't want unrestrained growth of debt.  

This fear-mongering on the part of the Treasury (Jack Lew) and Obama is unbelievably irresponsible.  Rather than encourage the markets and re-iterate that there is no circumstances that the US would default on any of the debt, they are literally trying to scare the markets.  Just how is that statesmanship?

NSA Chief Says "Maybe" One Terror Plot Foiled

Maybe one or maybe none.

The budget of the NSA is $10 billion per year and they can't even confirm that all of the telephone data mining has made a single contribution to the security of the nation.  This despite the administration and the NSA had previously claimed that the agency has foiled 54 plots.

From Libertyblitkreig blog:

Pressed by the Democratic chairman of the Senate Judiciary Committee at an oversight hearing, Gen. Keith B. Alexander admitted that the number of terrorist plots foiled by the NSA’s huge database of every phone call made in or to America was only one or perhaps two — far smaller than the 54 originally claimed by the administration.

From Washington Times:

Leahy asked Gen. Alexander to admit that only 13 of the 54 cases had any connection at all to the U.S., “Would you agree with that, yes or no?”

“Yes,” Gen. Alexander replied.

In response to a follow-up question, Gen. Alexander also acknowledged that only one or perhaps two of even those 13 cases had been foiled with help from the NSA’s vast phone records database. The database contains so-called metadata — the numbers dialing and dialed, time and duration of call — for every phone call made in or to the U.S.

But wait,  Homeland Security has claimed that it foiled 45 plots!  Which is it? 

The Daily Beast, reported that the entire Department of Homeland Security is given credit for foiling 45 terror plots since September 2001 or about 3 plots per year.  I doubt if these are entirely different than the 54 plots falsely claimed as "resolved" by the NSA and the administration.   

Since the Homeland security budget for 2013 is $56 billion dollars, the cost per foiled plot is  $18 billion dollars. Worth it?  How many of those plots were solved by ordinary police work and citizen tips?  I'll bet that a majority were solved the old fashioned way at a far more modest cost.  How many security agencies do we need??

Add that to the fact that the TSA, with $6 billion budget, has NEVER identified even a single terrorist from airport screening.

Shut 'em all down. We're broke already!

A New Civil War: No More Debt! No More Government!

Chants of "No More Debt! No More Debt!" could (and should) be the new rallying cry for Republicans to put an end to unlimited government and it's associated excesses. Republicans could just refuse to approve any more debt limits---ever. They do have that power if they hang together.

What if the Republicans instead started chanting in unison, "No More Debt," "No More Debt" and really meant it?   It would be the most significant rallying cry since Paul Revere and his associates cried-out "the King's men are coming!"

It could and should mark the end of "peak debt" and therefore "peak government." Nothing would more effectively put the dagger in the heart of the debt-funded free-for-all in Washington (and liberal experiment) than stopping the debt accumulation---cold.  It would kill the shameful charade of governance by this pitiful government.  Can you imagine the epic proportion of hysteria of all the spoiled little children in Washington?  Liberals would self-immolate in the streets!  Imagine the screaming and gnashing of teeth from the minions of lobbyists and lawyers who have been gorging at the overflowing Federal trough.  And you could also expect this administration to maximize the inconvenience to the public like they did with the puny sequester cuts.

All of this would have to happen after the Republicans take the Senate and White House.

Government Grows 4 Times Faster Than Economy

Government is so bloated because of debt.  The real economy has only grown 75% since 1990, but government (local and national) has grown over 300% since then.   How's that?  Because of debt--and huge amounts of it.  I say enough is enough.  Have a look at charts from Charles Hughes Smith:

Now for the chart showing Debt Increases:

 

Put The Government On a Diet

Current Federal spending is $3,800 billion with a projected budget deficit of $729 billion.  The improved deficit situation is due to higher tax collection and the "sequestration" cuts.  Since the federal budget deficit is down to about 5% of GDP or about 18% of government spending,  a sudden haircut of this magnitude would still be very disruptive (would cause a recession that would last awhile, stocks would 'crash' and unemployment would soar), therefore it should be done gradually.  But putting the government on a diet would set up a healthy scenario for the country in the long term.

Remember, after the 2nd World War, the US government cut spending from over 50% to 11% of GDP over several years, so don't say it can't be done without huge harm.  Yeah, there was a recession in the late 1940s, but to stop the exponential growth of debt and government mismanagement, the fight is worth it.  Deficit spending and money printing hasn't helped the economy nearly as much as predicted, so removing government spending may not hurt nearly as bad as expected.

A reduction of 18% of government spending to balance the budget would reduce Federal spending back to about $3,000 billion or to the 2008 level.  Even with that drastically reduced level of spending, the ratio of Federal spending to GDP would still be 21% of GDP-- still higher than any other administration during the 1980s and 1990s (19%).

The net interest payments on the Federal debt is up to $255 billion and is included in that $3,800 of Federal Spending.   Since the Government receipts are over $3,000 billion, there is no chance of any default on US debt obligations. 

Balancing the Budget Could Happen

Cuts of $700 billion can be done over time.  It would overwhelm this incompetent administration, however.  Cuts of this magnitude would also have to be done in a period of reduced regulations in the economy, something that this administration knows nothing about.  

The biggest source of deficits now is entitlements.   Spending on Medicare, Medicaid and Social Security is over $1,500 billion while receipts are only $1,000.   Since these programs were meant to be paid for by payroll taxes, one obvious solution that would alert young taxpayers to their outsized responsibility in taking care of the elderly in this country, would be to raise the 6.2% payroll tax to 10% (which would raise the 6.2% tax on businesses to 10% too) to match taxes to spending.   Wouldn't that be an eye opener??  It would also nearly balance the federal budget and also would be the right thing to do.  Since the entitlement spending gap to receipts is only going higher and higher in the years ahead.  If Congress passed a law to keep these accounts in balance that would put pressure on Congress from the electorate (working electorate that is) to contain and restrain spending.  But taxes on working people is putting austerity on the people, not the government!

Some departments should be eliminated (Energy, Education, Housing and Urban Development) and downsized (Agriculture, HHS, Commerce).  Healthcare and social security entitlements would have to be cut.   See my blog "How to Cut $450 Billion In Federal Spending" which was based on conservative estimates of savings and didn't include any Medicare/Medicaid,  ObamaCare or Social security cuts.  Military spending would have to be cut--meaning a reduction of troops.  But we have far too many soldiers in far too many countries.  Banning public unions, who respresent some 40% of government workers (mostly office workers who hardly need union representation), would reduce cost of government.  Repeal of 1931 Bacon Davis Act and 1935 National Labor Relations Act would further reduce the cost of government and government procurement.  There is no reason to unionize government work--it's just an extortion of taxpayer money. Every dollar paid above market rates is just extortion of taxpayers.

Cuts should come to the programs that have seen the highest growth under Obama.  Foodstamps and Social Security Disability rolls have rocketed by over 50%, and spending increased by 100%, since Obama's inauguration.  These programs must be trimmed back.   We could put an end to the NSA too.   

I say hold the line.  No more debt.  No increased debt ceiling.  Ever.