By Monty Pelerin, on March 10th, 2010 Anyone who has looked at the financial condition of this country knows insolvency cannot be remedied without severe cutbacks in entitlements such as Social Security, Medicare and Medicaid. Similarly, major cutbacks in the welfare and warfare state will be required. These latter cutbacks are not sufficient. The bulk of the cuts must come from entitlements.
For those depending upon these benefits, the bad news is just starting. Bloomberg reports:
Erskine Bowles, co-chairman of the commission on U.S. deficit reduction, said entitlement programs such as Social Security will turn the nation into a “second- rate power” if their costs aren’t reduced.
“We’re going to mess with Medicare, Medicaid and Social Security because if you take those off the table, you can’t get there,” Bowles said today in a speech to North Carolina bankers in Greensboro. “If we don’t make those choices, America is going to be a second-rate power and I don’t mean in 50 years. I mean in my lifetime.”
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By Monty Pelerin, on March 8th, 2010 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.”
Continue reading Why Liberty Fails
By Monty Pelerin, on February 11th, 2010 The public is in an ugly mood regarding politics. For the country, this anger may represent a turning point. For politicians in Washington, it is just business as usual. Can they be this tone deaf? Does their arrogance prevent them from recognizing what is happening?
According to Rasmussen:
A new Rasmussen Reports national telephone survey finds that 63% of likely voters believe, generally speaking, that it would be better for the country if most incumbents in Congress were defeated this November.
Despite these signals, Washington is unable or unwilling to change direction. Proposed and enacted policies have been rejected by the public. Yet, Washington’s only response is to increase the dosage of what the public has already rejected.
What Washington appears unable to comprehend is the fact that they have lost their magic and credibility. The public sees the empire for what it is, little more than a facade. The public has rejected the myth of government as savior and replaced it with the view once expressed by Reagan — government is the problem, not the solution.
Arrogant continuation of policies not wanted by the public only reinforces the view expressed in Rasmussen’s book, In Search of Self-Governance where he describes the view of the American public as follows:
Continue reading Washington is Oblivious as Well as Useless
By Monty Pelerin, on January 7th, 2010 Here is a good collection of articles from Chris Martenson’s site. These articles show no green shoots, and in no way are consistent with what the government wants you to believe. There is no recovery coming. See recent post about 2010 will be worse.
Take a look at Chris’ site. Be sure to watch “The Crash Course” that he provides online. It will provide a simple and thorough explanation as to why we are here and why getting out the hole is not simple (and I would say, not possible). He also provides good information as to how you might protect yourself and your family in the free “Crash” video.
Daily Digest – January 6
Wednesday, January 6, 2010, 11:01 am, by saxplayer00o1
Contracts down: Is housing headed for double-dip?
Pump prices on pace to top 2009 high by weekend
GMAC Says Lender Will Post $5 Billion Quarterly Loss
Silicon Valley ‘Bloodbath’ Leaves Buildings Empty
Manhattan Apartment Prices Fall as Finance Jobs Lost
Fed may re-enter MBS market later in 2010
TrimTabs suggests government manipulated stocks
Medicaid Long-Term Care Spending Tops $106 Billion
Missouri revenue drops in December, more budget cuts coming
U.S. business bankruptcies rise 38% in 2009
Homelessness and cold weather have shelters at capacity
Unemployment spikes demand for Census jobs
Promise to Trim Deficit Is Growing Harder to Keep
US public pensions ‘facing $2,000bn shortfall’
Over $26 billion borrowed by states for unemployment benefits
U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says
read more »
Continue reading Martenson Sees No Recovery
By Monty Pelerin, on January 5th, 2010
Four Horsemen of the Apocalypse
Despite the rising stock market, virtually everything else continues to deteriorate in the economy. An earlier post dealt with this anomaly.
There literally is not one thing that can be claimed as a positive. And that includes the phony GDP third quarter “improvement” and presumably a better (preliminary) number for the fourth quarter. Here is a quick (not all inclusive) list as to why things will get worse rather than better:
Bankruptcies and unemployment continue to increase.
Foreclosures are increasing and will get worse.
The Housing market will worsen as a result of more foreclosures and more mortgage resets in 2010
The Federal Government’s deficits continue to grow
Foreigner financing, necessary to support our deficits, is decreasing
The private sector continues to decline as evidenced by state income and sales tax collections
Private and state pensions continue to fall further behind actuarial soundness putting special pressures on local and state governments
States continue to spend beyond sustainable levels
Consumers will underspend for several years because of too much debt
Health care “reform” adds costs and problems to the out-years
Legislation passed and proposed causes small business to hunker down and refrain from expanding or hiring
The banking system continues to deteriorate
Credit is being increasingly withheld from small business and commercial real estate
The FDIC is out of money
Bailouts, promised to produce returns for taxpayers, are turning sour
Fannie and Freddie are now completely guaranteed by taxpayers
The FHA is repeating the same mistakes as Fannie and Freddie
There is no private mortgage market left; much
Continue reading 2010 Will Be Worse
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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