Laughable Solutions to Major Debt Problems

Paul Craig Roberts, writing for Alex Jones' INFOwars has a hit piece out yesterday detailing that it's time for an American Revolution.  Funny though that the piece never calls for a revolution until the final sentence, nor does it offer any realistic solutions to the debt problem that is ruling the USA.  Roberts' article starts out well with stated facts that we have a huge budget and trade deficit that are crippling the country but that's about where the good part stops. 

It seems that Roberts understands that we have been off shoring too many jobs and far too much debt, but he fails miserably to see that the USA has lost it's competitive manufacturing advantage.  To bring those lost manufacturing jobs home, he advocates for a tiered tax structure that would make a value added tax on companies who produce goods outside of the USA.  Unless Roberts has taken notice, almost everything sold on the store shelves of American retailers is made in some other country THAN the USA.  Not only would this asinine idea increase costs to American consumers, but these "tarrifs" would effectively spark a trade war with China and other trade "partners."  If Roberts believes continued deficit spending will ultimately spark a US dollar / debt purge by Treasury bond holders, there would be no better way than to do it by slapping a tax hike on imported goods.

If Roberts truly wants a competitive America, perhaps he should find a way to reduce the costs of business here in the USA.  Labor costs are currently as cheap as they have been in the last decade, but the hurdlers of business to meet OSHA protocols, union thuggery and legislative manipulation of the markets is what is truly dooming our country.  Failing to fix these things, along with a fair tax structure instead of the regressive and putative punishment of success, companies will flee to countries like China that have lower taxes, less restrictive zoning laws, no property taxes, less restrictive government oversight, and no labor lawyers and union bosses breathing down their necks.  Further, without double taxation of capital gains, dividends, and absurd confiscation rates, the real economy could then be built on investment instead of debt as Roberts seems to advocate against. 

Instead of those trade solutions and a serious reduction in social spending and pork bellies, the dimwit decides to loose all credibility and rail against the "neocon" and "military/security complex" of the country.  Roberts wants to fix the budget deficit by a reduction of military spending.  This seemingly "brilliant" idea discounts the fact that our biggest bond purchaser (besides the Fed), China, is in a full blown military arms race with the USA.  Unfortunately, the defense budget isn't even the biggest contributor to the budget deficits!  The winner of those titles can easily go to porkulious, TARP I & II, quantitative easing I (and hopefully not II), unemployment benefits, pay for teachers, medicare bailouts, health care, social security and pork barrel pet projects, pay for unions, and bailouts of the states! 

While continuing in Iraq and Afghanistan aren't exactly the best use of federal budget, leaving Iraq while real progress has been made is not currently justifiable.  I will conceded that Afghanistan is a lost cause.  Simple isolation and mitigation of the Taliban / terrorist threat from that country would suffice our national security needs.  However, when the defense budget of the US for Fiscal 2010 was 23% versus the 55% spent on social programs, we could have easily eliminated 2 trillion in waste that was simply vote buying for incumbents (source).  If that had been done, we would have had about a 1 trillion budget surplus (tax receipts vs spending).  True, Roberts is correct that US military budget "exceeds the budgets of all the serious military powers on earth combined," but that isn't what has made us bankrupt over the last 80 years.


Perhaps Roberts realizes that gutting the social programs is actually necessary to the survival of this country, even though it is not politically expedient.  Unfortunately, I would not believe that anything the crew from INFOwars publishes, actually has any real credibility behind it, since the wackos run the asylum.  I suppose though that we could toss Roberts a peanut for effort, even if it comes up a bit short sighted. 

Quote of the Day: When Money Dies, Double Edition

On 7 August, I told you I would be reading the book When Money Dies: The Nightmare of the Weimar Collapse.  After relaying my start of the book, I didn't make it past the prologue until this weekend.

Before I get to the main Quote of the Day (QOTD), I will give you this one that is too important to overlook from the last paragraph of the prologue:

"This is, I believe, a moral tale.  It goes far to prove the revolutionary axiom that if you wish to destroy a nation you must corrupt its currency.  Thus must sound money be the first bastion of society's defense. 

With this in mind, Adam Fergusson's book isn't so much economic theory, as it is historical context of what happens to the people in an economic crisis of epic proportions.  No need to hold an economics degree to follow this writting because Fergusson thus far, has done an excellent job of recanting the almost mind numbing price escalations and the corresponding fall of the German Mark and Austrian's Krone in a post WWI environment.  So fast was the devaluation, we have the main QOTD:

"A Roman who was born under Theodosius and died under Romulus Augustulus had seventy years in which to pass through the changes which Austria has seen in three."

It leaves us to wonder, where exactly are we headed as we leave interest rates at near zero percent rate for such an extended time frame (approaching two years).  It is apparent that we are headed towards a currency devaluation that as Fergusson has already eluded to in three short chapters transferred wealth from savers, retirees, and those of nobility, to the political class, the paupers, the debtors, and the wealthy bankers.  What we are seeing in this crisis is ultimately a greater groundwork for a revolution that may not necessarily be for the better.  If history repeats itself, the misery depicted through the end of chapter three is one that will cause "joyless streets" for an extended period of time.

More updates and comments to come.

ICE Director Directly Responsible for Prevention of Immigration Eforcement

Dysfunctional Washington is now getting blasted by the union chief of Immigration and Customs Enforcement.  Seems that some 7000 union members and ICE officers placed a vote of no confidence against the ICE Director.  I can't imagine why the boots on the ground would speak out against their director, but maybe it has something to do with the willful lack of enforcement of our immigration laws?  You know it's bad when the WaPo also calls for your resignation. 

Just more dislocation between Pennsylvania Avenue and Main Street America.  We need to fix the former before we can ever fix the latter. 

Big Government Big Bureaucracy

What happens when the government steals 20 billion from a major corporation?  Oh that's right, thieves steal from the government!  From the London Telegraph last week...

US authorities have arrested three people in the past week on suspicion of abusing the system designed to compensate commercial fisherman for lost business since the [BP] disaster.

One thing to learn is that while the government steals from it's citizens, don't steal from the government, it hates competition.  Just more failed meddler's policies right before our eyes.  Is there ANY argument to keep ANY one of the current incumbents in Washington?  Let them all burn at the election stake this year.  (Note that I did say election stake, not an actual stake, lest someone think I'm inciting violence against our dear leaders). 

Does America Know How to Fight?

I wanted to write a follow up to my post regarding potential Israel, Iranian conflict (post here).  This week, Iran has begun digging "mass graves for attacking American soldiers" just in case we attack them (source).   

I do find it necessary to give some frame of reference for my opinion on Iraq, Afghanistan, and now potential Iranian wars.  Let us not mince words as "conflicts" in my mind are merely politicians' double-speak for military action.  Seven years ago, I wasn't as smart as today (geo-politically / historically), and I bought into the half-truth that I now understand the whole Bush Administration's intelligence estimates to be.  That being the case, my present day opinion is that containment, isolation, and prevention to the best of our abilities of these countries is the best way to go about creating a peaceable and workable solution. Washington would have to use an exorbitant amount of restraint against meddling, which means that it is destine for failure before it would even start.  Something that the US leadership forgets is that it's primary focus should be on the citizens of our country and what is best for them.

If the US political leadership is not willing to expend the resources (men, machines, and money) to completely crush the hearts and minds of those who espouse radical Islam, then you have no business trying to change them.  While we are seeing some progress with the DoD's COIN (Counter Insurgency) Doctrine, it is hard to reason with people who still prefer to live in the stone-age and are manipulated by radicals who are almost a clone of their Washington counterparts.  Politicians are politicians, whether they speak from a realm of "law" or "religion."  It is plainly evident that both Washington politicians and radical Imams know exactly how to create classes of people that oppose one another, which in turn, creates a climate for exploitation.  That exploitation is only a means to an end of amassed power.

Do not get me wrong, Islamisists are an enemy of our country, but killing non-military, radical terrorists that fight for an idea is nearly impossible to stop unless you assure them of their complete and utter destruction.  Without clear war, there is no clear victory.  Our current doctrine of break, rebuild, and change their hearts and minds is not successful.  Jihadists seek to instill their Sharia Law (source) upon those whom don't want anything to do with it.  Sound familiar?  We expect them to follow a doctrine that we don't follow ourselves.

Does this mean abandoning the efforts in Iraq and Afghanistan?  Not completely.  It does mean that where we have screwed up, we must make right on a human level, fix things, as best we can to then trust that human nature and good will take hold.  Once that is reasonably accomplished, our focus should be to shift towards home, and take care of ourselves and stop meddling with everyone else's business.  That includes what Israel would like us to do by using us in a proxy war.

If Israel wants regime change in Iran, let them go at it alone.  It will be ugly and it will be long.  I have no doubts that the Israelis will succeed, and perhaps with less humanitarian efforts than the USA, but what they will achieve, is a destruction of their enemies' souls.  That's what war used to be about.  When there was an evil in the world, and it chose to make itself present, you confronted it and obliterated it.  I don't think the USA knows how to do that any more, at least not from a political level.

AK Fan and I were discussing the mass graves.  The comedian that he is suggested we should lob a few cruise missiles at those graves, and blow 'em up.  Show Iran who is boss.  Kick ass and take names later.  It's a great strategy, but unfortunately, the world of the precision army, polarizing civilian leadership, and the lack of testicular fortitude to do dirty deeds, dirt cheap, it'll never happen.  Israel on the other hand should seriously consider AK Fan's suggestion, and commence bombing in 30 seconds.  Maybe then we would see some real stability in the middle east, and the blind sheeple of the desert sands can come into the 21st century. 

Of course, he wanted to do it merely to hear the snickers from the UN security council members, and I can't say that I blame him for that.  Talk about one geo-political joke!