Related posts:Our Government? No, All Governments The Law by Frederic Bastiat

1. Our Government? No, All Governments
2. The Law by Frederic Bastiat

Leviathan Being Destroyed

Government is 79% of the Economy

Welcome to the world of dysfunctional, bloated and insolvent government.

CNBC recently reported on delayed income tax refunds: “…  cash-strapped states such as North Carolina, Alabama and Hawaii have been forced to slow down issuing income tax refunds to individuals and businesses because of a lack of funds in their budget.” These states are but a few that have slowed down refunds. How comfortable might you be awaiting a refund from Michigan, New York, New Jersey, California, Illinois, etc.? What do you suppose their condition will be when the federal stimulus teat runs dry?

The state tax problem is merely the first manifestation of governments unable to pay their bills. Municipalities are sitting on retirement time bombs that they will be unable to service. The Federal government is hopelessly in debt (see Spiraling to Bankruptcy) and pays its bills only because Ben Bernanke chooses to run his printing press. Governments at all levels are insolvent. They have grown bigger and made promises larger than taxpayers will or can support. Government spending, at all levels, now exceeds 40% (roughly 25% Federal) of GDP as shown in this chart.

The tax burden implied from the chart is about 45%. However, that is truly misleading thanks to the manner in which GDP is calculated. Fifteen percent of GDP is imputed.  Imputed means there is no market transaction. Some government statistician “imputes”

Continue reading Government is 79% of the Economy

1. Why The Economy Will Not Recover
2. 8th Largest Economy Continues to Implode
3. U.S. Government’s Road to Perdition

I believe that the rise of the Tea Party movement and the impassioned nature of American politics in 2009-10 is the result of the Obama administration’s having, probably inadvertently, intruded into “some favorite points which becomes the criterion of (our) happiness.”

Regarding the debt, Blankley states:

Similarly, the shift from less than $500 billion of annual deficit in the last George W. Bush year to a $1.5 trillion deficit in each of the first and second Obama years (and the proposed addition of almost $10 trillion of new public debt over the next decade) has — by the increase in quantity — changed the nature of public debt in such a way as to intrude into our sense of our fundamental liberty.

Blankley sees a way back from our current position:

The first hard step in that defense will be the election in November. The second, even harder step will be the rollback of already enacted debt and damage to our freedom. Defining the extent and detail of the rollback must be the agenda for the government’s loyal opposition in this year’s election. And the things to which we are loyal are

Continue reading Freedom vs. Politics

1. Freedom
2. Wisdom: Freedom is a Country’s Source of Success and Wealth
3. Obamacare a Pallbearer for American Freedom?

For me, gridlock is not a problem. It is a blessing! I think there should be more of it, rather than less.  Pour more sand into the engine of government. Encapsulate all government buildings with impenetrable epoxy glue. Stop everything completely. Hooray!

President Obama is a problem, but he is not the problem. He is a symptom of a much larger problem. To further understand, one need only look at recent Presidential and Vice-Presidential candidates. How comfortable were you having to choose between McCain and Obama?  Do the names Kerry, Bush, Gore, Clinton, Dole, Palin, Edwards, resonate with anyone as the best and brightest?  Remember, these were the survivors from primaries that had even more motley characters.

A process that produces such inferior choices ensured that one day we would get an “oddball.” In many peoples’ minds that has now occurred. We elected a gifted orator whose only experience was a sophisticated form of Chicago-style street hustling.  How is it possible that this man-child, with no experience, could attain the highest office in the land?

The problem is not Barack Obama. Nor is it the process that provides such flawed candidates. Both result from a democratic process driven by the people. Ultimately, the problem resides with the people.

An email from a friend contained the following explanation of

Continue reading Not Gridlock but Brainlock

1. Failed Government a Disaster for Americans
2. Two Votes For Deflation
3. The Shrinking Presidency

Thanks to Mr. Friedman for setting the record straight. His comment was included with the original post.

Thank you for allowing replies to your blog. The issues here are being somewhat distorted by your presentation of what you believe are the facts here. First, nobody is asking to be whole or beyond being made whole as you reported. There is a maximum limit, just like FDIC has a maximum limit as to what a person can possibly expect to be gotten back. Secondly, you must familiarize yourself with the SIPA law of 1970 that created SIPC before you are unduly influenced by the rantings of Stephen Harbeck, the President of SIPC.

In its 40 year history, and based upon the law, if a broker/dealer goes bankrupt, it is SIPC’s responsibility to first try to recover the shares of the investor and return it to them. If not all of the shares can be recovered (note: regardless of whether or not they were ever purchased), than it is SIPC’s responsibility to go out to the open market and purchase those shares. Nothing in the SIPC statute addresses what it cost those investors in the first place.

Let’s take a simple example. An investor bought 100

Continue reading The Wealthy Merely Seek Legal Redress

1. The Wealthy Beg
2. Democrats seek distance from Obama as health care reform is revived
3. The Mortgage Market has been Nationalized

Together, the groups hope to persuade Congress to add a requirement to the regulatory overhaul bill, now under Senate consideration, that brokerage firms pay about $4 billion in additional fees to the Securities Investor Protection Corp. fund. SIPC protects U.S. investors’ accounts against fraud or bankruptcy. The victims also want Congress to require the fund to compensate them up to $500,000 each in losses.

We all should have sympathy for the victims of these two Ponzi schemes. After all, their lives have been adversely affected, in some instances irreparably. However, to believe that the rest of the country has an obligation to make them whole is a bit outrageous.

The lobbying initiative “gives new meaning to the word chutzpah,” said James Cox, a professor at Duke University School of Law. “This is just a tax increase. It’s levied on banks but customers end up paying.”

Their effort is natural. After all, in a society that bails out banks that created the economic crisis, why would others not believe they are entitled to the same treatment?  When “victimology” becomes the code, all deserve to be recompensed for anything that is bad, or even unsatisfactory. No one should lose money, even when it is their fault.

The

Continue reading The Wealthy Beg

1. The Wealthy Merely Seek Legal Redress

Washington is cleaning up the airline industry with more regulation. NOT!

This latest example of Washington intervention is more patently absurd than others. All are absurd; this example is just so simple that it is understandable without a complex chain of reasoning.

It is classic top-down management in a world that is run from the bottom up. It illustrates perfectly why reality cannot be legislated out of existence. Trying to do so always produces unintended consequences. In this, as in most examples to help consumers, your life has been made worse.

From the American Thinker:

Clarice Feldman

Hoping no doubt to curry favor with passengers beset by lengthy delays Administration bureaucrats set unconscionably high fines for delays. As a result airlines will simply cancel delayed flights rather than bear these punishing consequences for often unavoidable delay:

Under new federal guidelines that take effect next month, airlines can be fined up to $27,500 per passenger if a plane is stuck on the tarmac for longer than three hours.

“How can they say there is nothing wrong with having someone sit on a seat and run out of water and everything and sit on there for three, four, five hours? That’s ridiculous,” Kelly said.

With the new fines, a delayed MD-80 could cost American Airlines close to $4 million, and a fine for a full 757 could cost more than $5 million.

“It’s unavoidable that more flights will be canceled to avoid fines,” said American Airlines spokesman Steve Schlachter.

Continue reading Another Blow to Air Passengers

1. Another Blow for Science

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.”

Related posts:The Beginning of a Hockey Stick

1. The Beginning of a Hockey Stick

I don’t have the data, but perhaps some readers might. I have often speculated that the cost of a state-university degree is higher than a private university. In my state, NC, it would be interesting to compare the cost per graduate of UNC-Chapel Hill to the cost per graduate of Duke University. I am speaking of cost, not tuition. Obviously, tuition at state universities is lower because it is subsidized by taxpayers. If anyone has a source of data, for either NC or any other state, I would be pleased to receive it and analyze it to test the hypothesis.

Not related to this cost comparison is a post today by Karl Denninger. Denninger takes no prisoners on his website. Here is a post dealing with the “privileged class,” the University of Illinois. I suspect most states are similar.  We know from many sources that government employees are better compensated than their counterparts in the private sector.

Posted by Karl Denninger in Education at 19:56

Then aim your “demonstrating” at the people who are bankrupting your state – and you personally.

I speak specifically of people such as those that The Daily Illini pointed out – all employees for the University of Illinois.

Let’s see what we have here….

The head of the football team – the coach – makes $1 million.  For coaching a college football team.

The “intercollegiate (sports) director makes $600,000.

The President of the University

Continue reading State University vs. Private University

1. Medicare Denies More Claims than Private Insurers
2. The Notion of Green Shoots is Laughable!
3. Economic Contraction To Continue

A very clever take-off of “Casey at the Bat” Posted on February 25 if this link doesn’t take you to it.

Probably not too funny for Dems unless they are as disgruntled as the rest of the population.

Related posts:How Did He Lose? Baby Bush: The Worst President in History? Gold Insurance Hedge

1. How Did He Lose?
2. Baby Bush: The Worst President in History?
3. Gold Insurance Hedge

Related posts:The Great Depression — Revisiting the Past Federal Government Salaries Explode During Recession Cash for Clunkers Great Failure: NOT SO! says White House

1. The Great Depression — Revisiting the Past
2. Federal Government Salaries Explode During Recession
3. Cash for Clunkers Great Failure: NOT SO! says White House

“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.” Jefferson predicted that

Continue reading Why Liberty Fails

1. Liberty and Freedom
2. Why Regulation Fails Regularly
3. Geithner Fails, Gets Promoted and Taxpayers get Screwed

Just 25% of U.S. voters now say the country is heading in the right direction, the lowest level of voter confidence since early January 2009.

Related posts:President of The World Losing Support There Also Kofi Annan: Public Nuisance 2010 will be a watershed election

1. President of The World Losing Support There Also
2. Kofi Annan: Public Nuisance
3. 2010 will be a watershed election

Mark W. Hendrickson wrote a piece on Keynesian Economics in American Thinker today. It is an excellent read for fans or opponents of Keynes. Even better for those who want to learn, or refresh, some economics.

In the piece he discusses the following four topics:

Hendrickson concludes with the following:

“Stimulus plans haven’t worked, won’t work, and we can’t afford them. We are already in great economic danger from deficit spending. A policy to plunge us even deeper into the debt abyss is kamikaze economics.”

Related posts:Keynesian Economics Where Keynes Went Wrong Banana Republic Economics

1. Keynesian Economics
2. Where Keynes Went Wrong
3. Banana Republic Economics

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

Continue reading ObamaCare or Obama Care?

1. Democrats seek distance from Obama as health care reform is revived
2. Economic Summit Insult to the Intelligence of Citizens or Revelation of Obama’s IQ
3. Obama Denied Parole