The Stimulus Bill is like telling a fat person to eat more Ho Ho’s and Ding Dong’s
Hat tip: Dave Ranallo
Guest contributor for the Liberty Voice
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.“ – Alexis de Tocqueville
Newsweek put it best on their latest issue – “We’re all Socialists Now.” And indeed it’s true now and has been true to some degree since since WWI. After that war and especially after WWII, triumphalism and patriotism in our government swelled to the point of utopia (Anyone up for a “Great Society”?). The confidence in central planning and government was all the rage at the turn of the 20th century as witnessed by the creation of the Federal Reserve in 1913 and even in Russia with the Bolshevik Revolution in 1917. Every US administration since that time has increased the size of government represented as either a % of GDP or increase in the Federal Register.
And yes, even Reagan admitted that he was only able to decrease the RATE at which government increased. It still swelled to outrageous numbers due his exorbitant funding of the military-industrial complex, which Eisenhower warned about during his farewell address.
This trend is troublesome to say the least and has arrived at our doorsteps like a flaming turd burger.
I’m fiscally conservative, socially liberal and a believer in empirical truth. This means my beliefs tick off everyone. Liberals get upset when I say central planning of an economy destroys individual freedom, is exceptionally wasteful and eventually leads to abuses of power by seemingly well-intentioned people. While many conservatives would heartily agree with that last statement, they can’t quite see their own hypocrisy when people like me say you can’t legislate morality or that spreading the message of freedom by gunpoint only generates hate for the U.S. Until both these groups and the rest of us understand that control over millions or, really, numbers greater than one are impermanent illusions, then we’ll continue to debate the same insipid arguments forever.
Let’s just call me an equal opportunity irritant.
Why do I write these screeds?
- I’m mad as hell and don’t want to take it anymore!
- It’s cathartic, and the discovery of truth excites me.
- I’m between projects right now. However, a strong pipeline brewing so I need to get this out.
- Freedom is more fun than being a slave.
- To help inform and hopefully protect my family and friends from the upcoming financial bull$#!+.
- To motivate all of us “Ordinary Americans” to start paying more attention and begin fighting this battle of ideas in our everyday lives. Make no mistake, this battle needs to start now before fear grips us all to the point where logic dies and guns blaze. (People who say you shouldn’t talk about sex, politics and religion in public are either automatons of political correctness or don’t know how to disagree without being disagreeable. If you’re the latter, it’s a good time to learn this tactic.)
- I don’t know (and seriously doubt) if heaven exists. I do know that we’re here now, so let’s make the most of our time on Earth.
Obama ran his campaign on a platform of hope and knowledge vs. fear and ignorance. The problem with his version of hope is that half its contents are based on ideas that don’t and have never worked namely the central planning of an economy. (Don’t fool yourself into thinking McCain would have done things differently…he was cheerleading the original TARP last year during election season, is a corporatist and his economic advisers included John Thain and other big government spenders.) These powerful men and administrations have used the same tactic to attain more power for the government – FEAR. From Woodrow Wilson all the way up to Obama’s “Financial Catastrophe”, our leaders have abused their bully pulpits and used our own collective ignorance of international affairs and economics against us.
This is not a complete condemnation of our government or any government for that matter. These power brokers probably had the best intentions to keep US interests at the forefront while spreading goodness and democracy to all. However, two axioms come to mind:
“The road to hell is paved with good intentions.” – Samuel Johnson
“All power corrupts but absolute power corrupts absolutely.” – Lord Acton (For today’s world, you could replace corrupts with deludes.)
Combining these truisms with our amnesic, frenetic and short-term thinking lifestyles, we open ourselves up for for easy abuse by the powers that be.
With the understanding of fear-as-power, the only way to successfully combat it is with knowledge. As with most things, someone else says it better or discovered it earlier. If you have the time, please read the below and watch the following videos. If you don’t have the time, make some…at the very least it will allow you to begin making sense of everything that’s happening today and to position yourself for a worst case, but highly probable, scenario.
- Dave Walker (former CBO head and a Baby Boomer fighting for younger generations), Warren Buffet and Peter Peterson discuss how our government is already bankrupt even before this spending spree occurred. Watch Dave Walker’s intro and IOU.S.A. videos.
- Peter Schiff predicted this mess and continues to make accurate predictions. Why?
- Peter Schiff explains why bailouts and stimulus don’t work especially when you’re already broke.
- Jim Rogers another highly respected economist with similar predictions
- Stephen Roach, Morgan Stanley VP of Asia and Chief Economist, makes a few predictions at the latest Davos Meeting in Switzerland
- Peter Thiel, founder of PayPal and current CEO of Clarium Capital, makes a short-term prediction – govt debt is the last bubble.
- Here’s how to protect your money in the high probability that the above are right.
- Nations have risen and fallen just like this before…even Kublai Khan’s empire died because of rampant inflation due to unimpeded govt spending and printing presses.
- Rick Santelli calls for a Chicago Tea Party
These dire predictions are inevitable unless we change our course. I mean come on…our problem is too much debt and too much spending, so our govt tells us to do the EXACT same thing. That’s a solution? Would you tell a fat person who wants to lose weight to eat more Ho Ho’s and Ding Dong’s?
The probability of these events occurring over the next 1-3 yrs is much greater than 50/50. You’ll be able to watch the end game play out plainly now that we’re “socialized” and interest rates are near 0%. Unless our leaders do the exact opposite of what we’re doing now (like Paul Volker did in 1981), then the following events will occur:
- China slowly “decouples” from the US by not buying our debt and not pegging their currency to ours. (It’s happening already.)
- The Fed will be the only creditor left who is able to buy our debt using printing presses thus causing hyper-inflation. Inflation can only be quelled by jacking up interest rates to extreme rates (> 20%).
- This resulting condition in this case is stagflation just like the 70′s in the U.S.
- The US Dollar crashes.
- The US Govt defaults on its obligations and must either shrink spending, tax us to oblivion or pick a fight with a foreign “enemy” to scare us into buying govt bonds…or all 3.
This may be a “doomsday” prediction and, hopefully, we wise up. However, I’d bet against it. Our system of govt is set up to be slow (that’s good!) and the political culture is too myopic and short-term focused (when’s the next election?).
- What really drives the US economy? Answer: Small Business!
- George W. Bush was a big government disaster, NOT A DEREGULATOR.
- Herbert Hoover was NOT laissez-faire or a free market believer
- FDR extended the Great Depression by 7 yrs (UCLA economists)
- Has Capitalism Failed?
- The Federal Reserve violates the US Constitution and is a legalized cartel. (Understand this at all costs!)
- Baron M.A. Rothschild said: “Give me control over a nation’s currency and I care not who makes its laws.”
- Thomas Jefferson once warned, “If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”
- Inflation is a hidden tax…middle class wages are hit especially hard. Why is the 2 parent income not enough any more?
- “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” – John Maynard Keynes
- Keynesian economics is central planning. Socialism has never worked throughout history. Why are India and China liberalizing and growing, while we’re restraining and stagnating?
- “The biggest problem is not to let people accept new ideas, but to let them forget the old ones.” – John Maynard Keynes
- What is Quantitative Easing? (Hint: It’s a euphemism for Fed actions that rhyme with renting dress.)
- Keynes vs. Hayek I; Keynes vs. Hayek II
- US corporate taxes are higher than any other country including France. Even if you include Payroll Taxes (FICA, Unemployment, Social Security) and VAT/Sales Taxes, we’re still one of the highest taxed populations. (BTW, lower taxes alone are not the answer. We have to cut spending too.)
- Social Security is a legal Ponzi scheme but only worse – you’re forced to participate!
- Entertaining explanation of Social Security. There is no “fund” accruing interest. Our cash been replaced with US Tbills or IOU’s.
- Is capitalism morally corrosive? – Ayaan Hirsi Ali is the biggest bad ass around. She’s escaped fanatical Islamic oppression in N. Africa and landed a think tank job with AEI. Through self education and exploration, she discovered that protection of individual freedom is highest order we can strive for.
- Corporatism is not capitalism
- Corporatism throughout history
- US economic statistics are just order of magnitude estimates and skewed in favor of the government policies – CPI artificially low; Unemployment stats are difficult to gauge and always laggingly low; GDP doesn’t include production expenditures in its calculation making consumption and govt spending look like the drivers of our economy; GDP is an inaccurate gauge of society’s health
- Military-industrial complex is not a conspiracy (even McCain says so)
- “Why We Fight?” - (99 min video). This is an explanation of our defense spending and not a Michael Moore rag fest. It starts and ends with Dwight D. Eisenhower’s profound warning about the M-I-C and our empire building. This is as close to reality as I’ve seen and includes a few nice cameos from McCain – watch minutes 35 – 50 to see him in action and why he’s an extension of Bush policies. Very revealing.
- Once you see how the Military-Industrial Complex works, then see how our international banking system works to further US interests at the expense of other people’s lives and fledgling democracies in this book, “Confessions of an Economic Hit Man“ Here’s an interview with the author. This stuff is not conspiratorial and affects us daily through our govt’s profligate spending.
- Health insurance for everyone without government intervention (Cato Institute)
- Heck, even Glenn Beck is seeing the light about inflation
- The most efficient and well-rounded way to keep up with all this – The Week Magazine
These views seem contrary to the history lessons we learned in school and definitely run contrary to what mainstream pundits/TV newspeople are saying. Why are so many of us fooled? There are many reasons for people in general but, for those few people “influencing the game”, the main ones besides out-and-out power grabs and greed are POLITICAL CORRECTNESS and too many people living in a ZERO SUM WORLD, i.e. win-lose mentalities.
Political correctness has morphed from adding hyphens to words (Asian-American, Afro-Centric, etc.) thus avoiding “inappropriate” language into some sort of positive reinforcement/self esteem police. I know for a fact that if anyone publicly states that an organization or an individual has performed poorly, they’re considered jerkweeds unfit for their position. For instance, if an authority figure states publicly that the Department of Education does an exceptionally poor job of teaching children to learn, they’d be vilified by every teacher’s union, public school student and DOE bureaucrat despite the statistics demonstrating we’re terrible compared to the rest of the world. Have you wondered why stating obvious truths in public is considered a “gaffe” by the media resulting in unelectability or resignation? Even private schools and colleges have to toe-the-line or risk getting sued for teaching “un-American” classes or forcing teachers/administrators to resign because of inappropriate thought experiments. How many college professors receive govt research grants whose main premise is that govt isn’t the answer? Not many. Political correctness destroys the truth.
As for living in a ZERO SUM WORLD…unless you’ve owned a business or tried to sell something in a “win-win” environment, you probably don’t understand capitalism and free markets. If you’re a lawyer, athlete, pundit/journalist, actor, politician, govt bureaucrat, priest, teacher, academic, engineer, doctor, healthcare administrator and even business people in operations and IT, you most likely live in a ZERO SUM WORLD. Meaning, if one side wins, the other loses. Synergy/”expanding the pie”/capitalism is completely unknown to most of these folks. Think about it…in their world, it’s always “if I win, you lose”. There are only so many jobs at the NY Times, roles in a movie, positions at Yale, seats in Congress, budgets to allocate or stances in a trial case.
Reviewing that list of professions again, you’ll notice this group also captures most Americans and especially those who publicly debate these critical issues. If all you know is win-lose, you’ll have a very difficult time internalizing the concepts of win-win economics. Why do most news’ headlines report items as if everything is a sporting event with winners and losers? Because, that’s what most people know! If you don’t understand a win-win world, you’ll think capitalism and free markets hurt more than help. Instead, free markets and conducting activities that produce value “expand the pie” giving more to everyone, who wants to voluntarily participate.
Peeps, I’ve already done most of the legwork here and have pretty much exhausted my knowledge capital. So, please just take a few hours of OPEN-MINDED THOUGHT over the next month or so to familiarize yourself with these concepts. Then, read the news with this lens to see for yourself. This exercise will generate a hefty dose of cognitive dissonance in your brains. It took me over 6 yrs right after I graduated college to begin fully grasping and DEPROGRAMMING my mind from this constant bombardment of fallacy. It shook me to my core and weakened my confidence in everything I just had learned over 16 yrs of schooling. However, I came out of it better, stronger and more confident that individual freedom, small but strong government, free markets and openness is the right path. Take the intellectual leap!
As the great William Wallace from “Braveheart” once said, “FREEDOM!“
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