Tag Archives: debt

A Week In Review

Posted by Tim on

Once again, the American people’s eyes have been taken off the ball. Politics works the same way as a magic trick. While the magician is getting you to focus on one thing in his right hand, his left hand is somewhere else. Both hands may be in plain view, but people are so distracted by the right hand that they completely overlook the left hand. What’s the distraction this time? Oh that’s right – same sex marriage.

It may offend some of you who are passionate about “marriage equality” for me to refer to it as a mere distraction, but in the grand scheme of things, that’s really all it is. In the 5 days since the Supreme Court took up the cases of DOMA and Proposition 8, the federal government has added over $15 billion to our national debt. The national debt now stands at $16.75 trillion; quietly working its way to the next big number – $17 trillion. Oh joy!

clintonAt the same time, Federal Reserve Chairman, Ben Bernanke, is set to keep up with QE3 (Quantitative Easing 3) until unemployment recedes to 6.5%. This means he’ll be printing $85 billion each month, used to buy up government bonds, and flood the market with cheap money. The problem, of course, is that printing money actually does make the rest of money cheaper – when you have more of something it is worth less. If someone said that Bernanke was printing a trillion dollars a year, there would be a scare, but because we divided it up by 12 months – to a measly $85 billion – it doesn’t sound so bad. Continue on, Benny.

And who could forget about the 10,000 drones set to be flying above US cities by 2020. Although Rand Paul’s filibuster did get the Feds to concede that they would not use drones to kill Americans on American soil, there is still something unsettling about 10,000 drones just flying around. What exactly are they looking for? These are the drones that are used to survey and kill terrorists in the middle east; why is our government using them in America? Seems like the set up of a 21 century totalitarian state.

Speaking of totalitarian states, the North Koreans are at it again. North Koreans nix their agreement to be peaceful with South Koreans; Americans and South Koreans get together and publicly display their military might; North Koreans shut down their military hotline with South Koreans; America sends a couple B-2 bombers to South Korea; North Korea tells everyone that their preparing a plan for bombing the US – namely Hawaii, Washington, Los Angeles, and Austin. Didn’t hear about that, did you?

Then there’s Planned Parenthood, who defended killing babies after they’ve already been born, but hey – let’s get real. What’s the difference between 9 months pre-born and 2 minutes born – only 2 minutes. That’s hardly a life, right? Where exactly is the line? Most people, even those who call themselves “pro-choice” would admit that once a baby is out of its mother, it is a human life. Do the circumstances make a difference? If the baby was born accidentally due to a botched abortion, apparently it isn’t really a life, and therefore can be killed. What if a mother just has her baby at home, and then 5 minutes after its born, decides to kill it – what’s the difference? Sickening to know that every year Planned Parenthood receives millions of dollars from state and federal government.

While the assault weapons ban has stalled in Congress, Barack Obama (and Piers Morgan, by the way) aren’t done with the issue. They still want guns out of the hands of legal owners. Obama and New York Mayor, Michael Bloomberg, still want “universal” background checks. This of course means that if a father wants to give his son a gun, he has to go check it in to the police department and have them legally transfer the gun to his son. By no means will this limit the guns criminals buy, because criminals aren’t going to get a background check. This is really just a way to get more information on legal gun owners.

Perhaps the real solution to gun crime isn’t to go after law abiding gun owners, but to prosecute gun criminals. Interestingly enough, the district that is the worst at prosecuting these crimes is also a haven of criminal behavior – Chicago. Out of 90 districts in the US, Chicago ranked dead last for how many federal gun crimes its attorneys have prosecuted. Number 2 was Central California (Los Angeles) and number 3 was Eastern New York (New York City). Wait a minute – isn’t that Bloomberg’s city? Why is he calling for new laws, when he came in 3rd to last place for enforcing the ones already on the books?

All this has happened and nothing was said about it on my personal Facebook news feed. Instead, everyone was too busy hopping on board the “gay rights” issue by posting pictures of a red equals (=) sign. I sure wish there was this much enthusiasm about balancing the budget, national security, the outrageous hypocrisy over the gun control issue, or 10,000 drones flying over our heads, spying on us from every angle. But debt isn’t an emotional issue; its a thinking issue, and thinking just isn’t what the left does.

The Gun Battle is Over

Posted by Tim on

Feinstein came out with her assault weapons ban this week. There isn’t a whole lot to go over (since I’ve already written about the meat of it) but I do find it somewhat interesting that people are already doubting whether the bill will even be able to pass the Senate. Even after Obama’s bland speech regarding “gun violence”, during which he urged Congress to ban assault weapons and high capacity magazines, there are still democrat senators that are feeling uneasy about the whole thing.

What’s the reason? Simply put – we are. Politicians know that across the country, people are very upset about potential bans on their weapons. Somewhere around 4 million AR-15s are in the hands of legal owners, hurting no one. For a government official to suddenly ban these – that’ll lose at least 4 million votes. The issue hits home with a lot of responsible law abiding gun owners who feel that they are being attacked for doing nothing wrong. (Click HERE to see a list of specific guns to be banned.)

feinsteinBecause these Americans have something at stake (their guns) they tend to be more informed about the issue, and they tend to be more involved with the issue. The NRA, America’s largest gun-rights organization, has gained hundreds of thousands of members in the last couple of months. These members are both young and old, rich and poor, black and white; but they all have one thing in common – the value they place in the 2nd amendment. Just last weekend, pro-gun rallies were held at every state capital in the US. If this doesn’t send a signal to politicians, nothing will.

But surprisingly, these rallies even sent a signal to democrats, who, at least in recent history, have a habit of not listening to their constituents. Because of this, at least 6 democrat Senators seem unwilling to vote for Feinstein’s AWB. 6 down doesn’t leave enough room for a majority vote, let alone a super-majority which could over-ride a filibuster from someone like Kentucky Senator Rand Paul. If the bill doesn’t get through the Senate, the bill won’t get to the House, and won’t be signed into law by el Presidente. Even if the bill were to pass the Senate, it would be “dead on arrival” in the House.

The fact that it is unlikely to pass the Senate is a big sign that the America people just aren’t against “assault weapons”. People are informed, and they know that assault weapons are no more dangerous than other firearms. They know that the problem is not with guns, but with criminals. They understand why our founders gave us the 2nd amendment; to fight a tyrannical government. And they see through the cheesy propaganda put forth by Feinstein and her goon-squad. Feinstein’s AWB isn’t popular, and that is the reason it won’t pass.

The life of politicians can be long, and many of those currently in office remember the 1994 elections. Earlier that year, President Clinton signed the ’94 assault weapons ban (put forth by – you guessed it – Dianne Feinstein). The result was a massive surge in NRA memberships, a surge in gun sales, and a landslide election for Republicans in November. Politicians are not about to risk their careers over the bill. They saw what happened last time.

I was at a gun store earlier this week, and I must say, that I was happy to see so few people in there. This is probably in part because the store had sold out of almost everything on the ban list, but it is also because people are settling down. For a couple months things were crazy. Packed parking lots, long lines, and shortages of guns and ammo. If the stores are seeing sales drop off, that means that people aren’t worried about the ban. The media has started to talk about other things, the story has moved on. The war isn’t over (Feinstein will be back eventually), but it seems this battle is.

This has been a true testament to the power of the American people. The free press has allowed us to hear the news, free speech has allowed us to say what we think, and the right to assemble has allowed us to take our message to the doorsteps of politicians. Pat yourselves on the back. Good job.

But the real reasoning behind the AWB wasn’t ever about guns. It was about distracting the American people from the debt ceiling debate. Republicans have already vowed NOT to make the ceiling an issue (at least Boehner has), which means that America’s debt will continue to rise. Last time we did this our credit rating was downgraded. It wasn’t downgraded because we fought over the ceiling, but rather because we showed no interest in finding solutions as to how to pay all this money back. So far, Washington has done the same thing again, and as we tee-up another debt ceiling increase, a credit rating downgrade may be right around the corner.

Envy Politics

Posted by Tim on

Does anyone actually believe that our politicians in Washington have any inkling of sincerity when they talk about eliminating the deficit, and starting to pay  off the national debt? Actually, I haven’t heard any of them actually talk about eliminating the deficit, just reducing it. But if the US is running up $1 trillion deficits each year, then “reducing” them could mean going from $1 trillion to $900,000. They’ll all pat themselves on the back, meanwhile, the country is really no better off.

At least they have a plan though – tax the rich. I have yet to hear exactly what defines “rich”, and I’ve certainly never heard anyone define “middle class”. I do know that somehow “millionaires” means $250,000. (Can someone explain this?) And even that $250,000 is for a family, not an individual. So “millionaire” actually means $125,000. Crazy. But to most people, especially those on the left, $125,000 is more than they make, so they don’t care. Tax the rich!

These people refuse to accept the fact that no individual can be taxed, and no single “class” of people can be taxed. Only the economy as a whole can be taxed. This is because all economics is humans interacting with each other. Taxing one person will always have an effect on someone else. Taxing the “rich” means that those rich people no longer can afford to buy a new car. That hurts the car dealer, the car manufacturer, and so on. Most car salesmen don’t earn $125,000 a year, but they too are taxed when taxes are levied on “rich” people.

What about the regular hard working family man who takes home $45,000 a year and depends on his 401k to help during his retirement? As corporate taxes go up, as the economy slows because of excessive taxation, and as heavier capital gains taxes are placed on investors, the stock market plummets. There goes the retirement fund for middle class families. These people can’t afford to retire, so they don’t, and that leads to one less job available for someone just graduating college. No wonder 50% of all college graduates can’t find work.

At least college kids are getting a fair shake, though, right? Not only do they get free birth controls pills and condoms, but el Presidente’ Obama has guaranteed that their student loan interest rates won’t go up. Unfortunately, this acts as a subsidy to high priced schools in general. These schools can afford to raise their prices higher and higher because of government subsides. So, student loan interest rates are low but the loan itself is huge because of government. And these kids will have an awfully hard time paying back their loan when they can’t find a job. Good thing they’re using the birth control that I bought for them, cause they won’t be able to afford a kid.

Taxing the rich, and “giving” things to idiot college kids is not good economic policy, yet this is the way America voted. People traded their country for contraception. This election should have been about big issues, but instead it was about Big Bird, Planned Parenthood, and class warfare. America signs over a little bit more each year to the federal government. As we pass the responsibility onto the government, we pass power to the government.

The vote has been bought. By promising free stuff to people, people vote for the guy who gets them the most stuff. Republicans must learn that they can never win this battle. If Republicans offer amnesty, Democrats will offer amnesty PLUS free college tuition. Republicans must work to differentiate themselves from Democrats and deliver the truth about the direction of our country. More or less liberty for the individual? More or less power given to bureaucrats in Washington? More or less property rights? Totalitarian government or limited government?

Many Republicans assumed that enough Americans had hit rock bottom, and Mitt Romney would automatically win. I played the game myself, doing whatever I could to help get those few extra votes out in my own state. Apparently America didn’t hit rock bottom yet, or maybe, we hit rock bottom and we just won’t be coming back up. Who knows? The fight continues, and I have Supreme Court elections to work on here in Wisconsin. Scott Walker needs a conservative majority in order to pass welfare reform, voter ID, end same day registration, and perhaps make Wisconsin a right-to-work state. The battle continues…

Overspending: Individuals vs Government

Posted by Tim on

Let’s suppose for a minute that there is a man named Jim. Jim is an accountant at a bank and earns right around $40,000 a year – an income that he uses to provide a house for himself, as well as food, clothing, and a little entertainment here and there. But Jim has a spending problem. He recently bought a $100,000 Lexus SUV, a new Sony flat screen TV, and every weekend (and some weekday afternoons) he spends hundreds of dollars at the local strip club. Jim, despite earning enough money to live a reasonable life, is now in debt. Deep in debt.

In fact, Jim is so deep in debt that his credit card debt alone is more than his annual income of $40,000! That’s not counting all the other debt he’s built up – car loan, house loan, unpaid student loans. Sounds like Jim needs to stop spending, right? WRONG! Jim isn’t at fault. It’s the fault of his employer for not paying him enough.

That is the kind of situation we have right now with the US federal government. The big spenders in Washington refuse to admit that they might have problem living within their means. Instead, they blame the American people for not paying enough in taxes. They don’t spend too much; you just don’t pay enough! Its an absurd notion when you break it down to an individual level and use “Jim” as an analogy. But its actually worse than that – here’s why.

Jim doesn’t have the ability to spend his employer’s money before he’s earned it. Jim can put himself in debt, but he can’t put his employer, much less his employer’s children, in debt. And when Jim eventually files for bankruptcy, only Jim is hurt – not his employer. Who is the employer of the federal government? That’s right – we are. The citizens of the US are the employers of the politicians and bureaucrats in Washington, and right now those politicians and bureaucrats are putting the debt on us. And it gets worse.

Not only are we in debt, but it will be harder and harder to pay it off. Jim doesn’t have the power to devalue his employer’s money. He can’t go out and print more, then spend it, and come back 10 years later with $1 being worth $.90! But that is exactly what our government is doing right now. Not only are we in debt – so much that we won’t pay it off in our lifetime and it will be left for our children – but our dollars will be worth less and less because of uncontrolled printing of money.

It is a sickening thought, and its no surprise that the national debt is one of the big issues in the upcoming election. To think that some people out there spend too much money and then explain away their reckless behavior by claiming that we haven’t given them enough of our earnings, and that’s why they’re in debt – what an insult! Sorry, big government! You don’t have a right to my money – which in turn is my labor. We as citizens have a duty to fund the legitimate functions of government spelled out in the Constitution. No more, no less. And the truth is that 90% of what our federal government does has no Constitutional standing per the 10th amendment.

“The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserves to the states respectively, or to the people.” Any government agency not spelled out in the constitution has no place in the federal government and ought to be left to be run by the states. Department of education, department of energy, enviromental protection agency, the federal communications commission, the list goes on and on. Its no wonder that those guys are in debt! They are spending money like Jim – on expensive things that they don’t need. But Jim only hurts himself – our government hurts all of us.

Get Rid of the Debt

Posted by Tim on

Well, I’m just about healed up at this point. My cold or flu or whatever I had is pretty much gone, and the only symptom that remains is a sore throat. Don’t let it fool you though, its pretty painful every time I swallow. Hopefully it’ll go away soon enough. If it doesn’t I’ll schedule an appointment with my doc and have him check for strep. In the meantime I’ll just take it easy, drink some warm tea, some honey, and maybe take “a little something” for the pain. I’ll write a bit too. It makes no sense to go back to sleep at this point, so I’ll just kill some time by writing.

As I’ve mentioned before, I work with a very diverse group of people. Liberals, conservatives, Christians, atheists; there’s even a gay guy. I was talking with one of the liberal atheists once and he seemed pretty confident that he knew how to solve all the problems in the world. In his mind, if he were president, he would just flip a switch and turn off all the power in the world – thereby erasing any and all debt from anyone’s record.

Now, there are a number of problems with this. First off, I should mention that this person is in there 50s, so I’m not sure they understand exactly how computers work. Just because you turn my computer off doesn’t mean that you’d erase it’s memory or clear it’s hard drive. Even if it was that simple, most businesses have some form of backup power. In the event of a blackout generators will kick on and keep everything working.

The other thing I don’t think he understands is that the president doesn’t have the power to turn off an entire country’s electricity, much less the world’s electricity. The constitution doesn’t allow for it. Not only does the president not have the power, but neither does any other branch of government. Thank God we live in a republic and not a despotat. I suppose the EPA could try to work something out, but they’d be taken to court before anything actually happened. Sorry – the president can’t do what you’d like him to do.

But let’s put all of that aside. Let’s pretend that the president somehow managed to wipe all the records of debt away; not just in America, but around the world. Well, I’m a little concerned.

I asked my friend, “So, if I’m no longer in debt to someone who loaned me $1000, then isn’t he screwed because I no longer owe him the money?”
He answered, “No, because he’s no longer in debt to someone else for that $1000. So it evens out.”

As always, there’s a huge fallacy at place hear. I’ve talked about the “zero-sum fallacy” before, and you can read up on it in Economic Facts and Fallacies by Thomas Sowell. Some people believe that there is one set amount of money in the world, and that one person can only get richer if someone else gets poorer. If this is the case, then one person can only be in debt if someone else is in debt the same amount. Well, fortunately that’s not the case.

The whole premise that one person who is in debt to someone else, and that that person is in debt the same amount to another person… oh jeez. Where do I begin? Life doesn’t work that way. If I loan someone $1000, that doesn’t mean that I took out a loan from someone else to get it. In fact, I don’t know why this would ever be the case. Therefore, wiping the record clean would in effect cost me $1000! I get screwed.

This friend is a great guy. He’s generous, funny, and caring. But he’s also a little shortsighted. Economics is such a fun area of study because you keep asking, “and then what?” My friend may equate any debt with debt from a bank, but there are people who give out personal loans as well. I know, banks are evil, but what about me? What about the little guy who gets screwed over? What about the people who live within their means who now have to take the brunt of the hurt from “magically erasing all the debt”.

This is the problem with many liberal policies. In order to “help” one person, they hurt someone else. It doesn’t have to be that way, and it shouldn’t. One responsible individual shouldn’t be forced to subsidize someone else’s irresponsible behavior. And like I said before – and then what? Because the debt is wiped clean, do you think that there will never be debt again? No, of course not. In fact, by wiping the debt clean you’re encouraging people to live in debt, because they’ll plan on it “just being erased” again. It’s a basic law of economics – what you subsidize you get more of. In this case, you’re subsidizing irresponsible behavior, and soon enough, you’ll get more of it.

I didn’t get mad at my friend. I knew from the get-go that he was a liberal who doesn’t think things through or pay attention to reality. But I did question his beliefs, and in my mind I tested how this would work out. Knowing a bit about the nature of humans and the laws of economics helps predict almost anything. Now, if only the politicians knew that. Maybe I should run for office…