The Great Recession of 2011-2012

A lengthy article focuses on the problems ahead. It appeared in the February American Spectator.


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Why Liberty Fails

Liberty as an Ephemeral Event

“If men are good, you don’t need government; if men are evil or ambivalent, you don’t dare have one.”  Robert LeFevre

Introduction

It is natural for oppressed men to yearn for liberty. Once attained, it is taken for granted and assumed to continue forever. History, however, shows that liberty is both rare and ephemeral. Liberty is not the norm; it is the exception. The world is generally replete with oppression.

Our Founders understood the nature and benefits of liberty and set out to create a nation that could preserve freedom.  The Jefferson and Franklin quotes below reflected their doubts regarding permanency:

“Our country is now taking so steady a course as to show by what road it will pass to destruction, to wit: by consolidation of power first, and then corruption, its necessary consequence.” Thomas Jefferson

“… I think a general Government necessary for us, and there is no form of Government but what may be a blessing to the people if well administered, and believe farther that this is likely to be well administered for a course of years, and can only end in Despotism, as other forms have done before it …” Benjamin Franklin

These giants of history were prescient and knew the dangers.  Their fears are now being realized by the people of our country. Are our current problems merely a part of the (inevitable?) process foreseen by these Founders?  Franklin declared that we “can only end in Despotism.”

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ObamaCare or Obama Care?

The title puts the sound of Obamacare into perspective. Orally, it is possible that the speaker means it either way. “Obama care” is the issue that Simon Johnson, MIT economist, explores.  More specifically, “Does Obama care?”

Johnson appears to answer the question with a No. He believes Obama is not trying to remedy the economic mess:

But ever so quietly, you get the impression the Obama team itself is not so very unhappy — they know the jobs will come back by 2012, they feel that Republican control of the House will just energize the Democratic base, and no one will be able to blame the White House for getting nothing done from 2010 on.

If Johnson is correct in his impression, how competent can this Administration be? How does someone who accomplished nothing in his first two years possibly think that pitching another two year shutout can help in 2012?

According to Johnson, the Administration thinking is that unemployment will not be a crippling issue in 2012:

The inner team apparently thinks that 2012 will go just fine — as long as unemployment is down around 6 percent.

It would have been interesting to hear Johnson’s opinion on the unemployment target. In my opinion, unemployment dropping to 6 percent by 2012 seems extremely slim. Massive tax increases are just around the corner. Higher interest rates probably are as well. A weakening dollar may force Bernanke’s to tighten monetary policy.  Unemployment does not improve under any of these conditions.

If, in fact, the beliefs communicated by Johnson

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The Basics of Healthcare and Economics

J. R.Nyquist has written an excellent article on Healthcare.

He summarizes quite nicely the economic aspects of healthcare and why soft-headed thinking, regardless of good intentions, produces bad results.

He uses basic economics to describe why healthcare, as proposed, must fail. It cannot work in theory. And it cannot work in practice. Nothing the government has ever done has worked. They have no record of improving anything. Generally, their results are just the opposite from what the intended. Here is Nyquists assessment:

But many agree that the health care system is broken. So government is to fix the problem? Just like they won the war on drugs, crime and poverty. Just like they fixed education, and the family court system. Anyone who understands today’s social problems can see that government has solved nothing. In fact, there is no way government can fix our health care problem, especially when government has lost sight of its basic function (i.e., national security). Every solution offered by government leads to further problems: dependency, corruption, economic inefficiency, clogged courts and crowded prisons, schools that graduate illiterates, broken homes and neglected children.

Finally, Nyquist believes the entire effort of taking over healthcare is merely an early step in a “road to serfdom:”

After the government has taken over the management of health care, the socialists will find yet another industry to target. As each sector of the economy is colonized by government, as each citizen is guaranteed free health care, free bread or lodging, the power of the state

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Dracula Government Meets Its Cross

There is no greater scam than that being perpetuated by fiat money.

It is plausible that the gold market might be manipulated because of its critical importance to the current economic crisis. Gold is to Central Bankers and governments as The Cross was to Dracula. It threatens their existence.

Before governments got into the state of bankruptcy, gold hindered them from spending money they did not have. To truly increase spending and power, it was necessary for governments to remove the constraints gold imposed. Once that was accomplished the welfare/warfare state was off to the races.

Now, after almost forty years or nothing but fiat money, many governments are so bloated that they are no longer sustainable. Their key to survival (at least for some period) depends upon maintenance of the myth that fiat money is real. Gold is a huge threat to this scam.

Gold has been an alternate currency for thousands of years. It is the only currency that is not someone’s liability. It is not dependent upon the performance of some government. It stands on its own and always has.

Governments do not go bankrupt in the manner that businesses or individuals do. They do so by dishonoring their debts and obligations. The default can come as an outright refusal to honor claims or it can come via inflation. Most governments prefer the latter.

The soundest government in the world, until recently, was the United States. In spite of its enormous wealth and economic growth, its

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