The absolutely useless GOP

It’s clear at this point in history those of us who want a restoration of the characteristics that once made America great — prudence, self-discipline, foresight, statesmanship, to name a few — will have to look somewhere other than the GOP to find them:

Sen. Rand Paul (R-Ky.) was hoping his Republican colleagues would be embarrassed by their vote to jack up federal spending earlier this year and support his plan to phase in a balanced budget. Few were.

Paul got 20 other Republican senators on Thursday — less than half of the Senate GOP caucus — to vote for his “penny plan,” which would balance the federal budget over five years by cutting spending except for Social Security by 1 percent every year. No Democrats back the proposal…

“Republicans only care about budget deficits when they’re in the minority,” said Jason Pye, vice president of legislative affairs at FreedomWorks.

Mark Meckler, president of Citizens for Self Governance, agreed, saying, “There are very few sane people willing to have a rational discussion about fiscal responsibility … It’s obscene. These guys are pigs in slop.”

One percent a year should be easy to find in a $4 trillion budget.  But I’m sure the gluttonous swamp would cry the fiscal sky is falling (“Children will starve!  Seniors will be destitute!  Illegal aliens won’t have as much welfare support”).  Well, maybe not that last talking point (they aren’t completely foolish and willing to admit their agendas).  But here’s some perspective:

Paul’s plan would have reduced spending by $404.8 billion in the fiscal year that starts October 1. After the budget balanced in five years, spending would be held to 1 percent increases per year, resulting in a budget that was 14.6 percent bigger in 10 years that it is now.

In other words, even after balancing the budget, the overall size of it would continue to grow.  Don’t overlook the fact in the excerpt above that a mere one percent of Federal spending equals $404.8 billion!  A true conservative would say balancing the budget would be preparatory to starting to trim back the Federal Leviathan.  Yet these GOPers can’t even countenance the first step!

Putting America first, or “making America great again” is inseparable from solving our budgetary house of cards.  You failed once again, GOP.  When you ask yourselves how in the world a man like Donald Trump could get elected, just look in the mirror.

As for us, primary season is upon us.  One of my Senators just guaranteed he won’t have my vote.  How about yours?

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By the purse strings

Since leaving the military, former Chairman of the Joint Chiefs Admiral Michael Mullen has spoken often about what he considers to be the biggest danger to U.S. security: the national debt.

China may be about to give us an object lesson in that assessment:

China added to bond investors’ jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market.  Senior government officials in Beijing reviewing the nation’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter.

China holds the world’s largest foreign-exchange reserves, at $3.1 trillion, and regularly assesses its strategy for investing them. It isn’t clear whether the officials’ recommendations have been adopted. The market for U.S. government bonds is becoming less attractive relative to other assets, and trade tensions with the U.S. may provide a reason to slow or stop buying American debt…

Most Americans who pay attention to government spending habits are happy merely to see the deficit fall.  But even if the deficit were brought to zero (i.e. the government miraculously balanced its budget) the outstanding debt still has to be renegotiated periodically, as old bonds mature and new ones are issued.  When there is less demand for new bonds, the yield (interest) has to rise in order to become more attractive.  Thus, even with a balanced budget, our roll-over debt is a potential time bomb.

For the last decade, the U.S. has been able to take advantage of record low bond yields as the Federal Reserve held interest rates at historic lows in the wake of the mortgage debt crisis in 2008.  This, incidentally, is why your bank pays you next to nothing on your savings any more — the same policy that keeps the government’s borrowing costs low essentially robs individual savers.  Unlike taxes, people don’t immediately recognize this fiscal effect the debt has on them.

If forces beyond the government’s control — say, the largest holder of U.S. debt decided not to roll over its holdings — caused bond yields and interest rates to rise faster than desired, the results would bankrupt the U.S. Treasury overnight:

Given its sheer size, if the interest rate on that debt were to rise by even 1%, the annual federal deficit rises by $200 billion. A 2% increase in interest rate levels would up the federal deficit by $400 billion, and if rates were 5% higher, the annual federal deficit rises by a full $1 trillion per year.

The only way to begin mitigating this risk is to not just balance the budget but to start paying down the debt.  Think that will happen?

Me neither.  The day may be fast approaching when the government, in order to service its creditors, has no choice but to cut many of the programs people have become entirely dependent upon.  It may also impose confiscatory taxation, seizing the property of those who’ve managed to save and invest during these irresponsible years.  In both cases, the social consequences will be enormous.

As the Instapundit likes to say, “things that can’t go on forever, don’t.”  The exponential rise of our national debt can’t go on forever.  It’s simply a question of when an event will occur that undeniably shows the emperor has no clothes.

Cashing out

The powers that be are doing all they can to constrain the options of the average citizen who refuses to play their game.  The latest angle is to renew the push for a cashless society:

On Monday the European Central Bank President emphatically disclosed that he is strongly considering phasing out the 500 euro note.

Yesterday, former US Treasury Secretary Larry Summers published an op-ed in the Washington Post about getting rid of the $100 bill.

Prominent economists and banks have joined the refrain and called for an end to cash in recent months.

The reasoning is almost always the same: cash is something that only criminals, terrorists, and tax cheats use.

In his op-ed, Summers refers to a new Harvard research paper entitled: “Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes”.

That title pretty much sums up the conventional thinking. And the paper goes on to propose abolishing, among others, 500 euro and $100 bills.

The authors claim that “without being able to use high denomination notes, those engaged in illicit activities – the ‘bad guys’ of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their ‘business models’.”

The $100 is a “high denomination note?”  That might have been true 50 years ago, minus several decades of inflation eating away at purchasing power, but it’s hardly the case today.  One can easily spend that much now by taking a family of four to a restaurant.

And while any such proposals are always couched as trying to somehow make life difficult for “the bad guys,” there are some very real effects on law-abiding citizens here.  Governments around the world have exhausted their ability to “goose” the economy through artificially low interest rates (a policy, by the way, that penalizes the thrifty savers in society in favor of profligate borrowers).  Having taken that game all the way to zero — literally — now central banks have the bright idea of negative interest rates… which would potentially charge savers who hold their money in savings accounts rather than spending it.

So what is a thrifty family to do?  The best answer is to hold as much of your assets as possible outside of the increasingly corrupted financial system.  Cash is the most obvious way to do that.  But bankers know full well that if Americans returned to the days of stuffing mattresses with greenbacks, it would quickly become apparent there aren’t enough pieces of paper to go around — not by a long shot.  (For an example of this, watch the “bank run” scene in “It’s A Wonderful Life.”)

In addition to discouraging all the hoi polloi from asking for banknotes they don’t have, this move toward smaller denomination bills is meant to inconvenience cash transactions.  It’s not only criminals who like to use cash, although many in authority like to pretend that’s the main association.  There is still the rare family who literally saves their pennies for anything from a vacation to buying a used car.

Here’s the thing: if you paid $10,000 in cash for a vehicle you bought used from another owner, it would take carrying one hundred $100 bills.  Imagine that bill is eliminated.  The $50 is already a much rarer note in circulation, so the common alternative is the $20.  Now you’d need a stack of FIVE HUNDRED notes–more than a pound of paper –to pay cash.  And few people are willing to do that these days.  Yes, this is part of what the authorities want to do to “inconvenience” large criminal transactions.  But it will also push average consumers further into using what is already a largely digital world of commerce.

And that’s exactly what the powers that be want.  With digital transactions (credit and debit cards), privacy is greatly reduced and control greatly expanded.  I know there are still those full-blooded law and order types who’ll protest “if you’re not doing anything wrong, you have nothing to worry about.”

Baloney.  Plenty of innocent people have already had their bank account (vulnerable digital assets) wrongfully seized, after which they face a daunting process of proving their innocence in order to see any of it again.  But the real problem with the “you have nothing to worry about” premise is that the definition of “doing wrong” is often in the eye of those wielding any kind of power.  Think I’m kidding?  Ask the former head of Mozilla, who was forced to resign after those oh-so-tolerant liberals discovered his heinous crime of donating to a campaign against legalizing same-sex marriage.  Think about how the IRS went after political groups sympathetic to “Tea Party” small-government advocacy.  Now extrapolate that to a future where every book you buy, every movie/documentary you watch, every church contribution you make and even families you choose to support financially in some small way leaves a digital trail for those who disagree with you to follow and exploit.

There’s a term for this: it’s called a targeting system.  And if we’ve learned anything through the recent weaponization of government agencies, it’s that such targeting capabilities WILL be used to harass and silence anyone who dissents from public orthodoxy.  Completely ‘virtual’ banking and finance (a “cashless society”) will result in ‘virtual control’ over our ability to live freely and privately with our own consciences.

I’ve said this before, but am becoming more strident about it: it’s time to “abjure the realm.”  If you disagree with the direction the ‘soft fascists’ in our land are taking us, you need to separate yourself from their system as much as possible, because the net is continuing to tighten.  That means holding stores of wealth beyond their digital control, in forms like cash, precious metals or other tradable commodities that provide a good store of value.  Equally important, it means building networks of like-minded people who are willing to form communities that can exchange privately among themselves without every transaction being officially recorded and perused for potential political heresy.

In short, it means declaring your personal independence and intention NOT to be simply a compliant serf to the ruling order.  Does it take work not to do things the way everyone else does?  Certainly.  But it is the kind of work that makes one free.

The lion’s share of human suffering

For the last week, there’s been steady public anger over the killing of a lion in Africa.  But most of those joining in to this outrage bandwagon probably don’t realize (or in many cases, don’t care) that:

– Behind the scenes of the well-publicized beheadings, ISIS has enslaved and sold thousands of Christian women and girls into sexual slavery.  (Hello, “feminist” movement… are you listening?)

– Ongoing releases about the gruesome practices of Planned Parenthood strongly suggest their “donations” to medical research may well include babies who are born alive… but whose lives are quickly snuffed out in ways meant to achieve rough compliance with technicalities of law.  Put another way: children are entering this world ever so briefly, only to have their organs harvested for ‘research’ in a way that would delight Joseph Mengele.

– The state of our economy and education system are so bad that teachers in Detroit regularly have to guess how much of their paycheck will show up each time… and fight hard to get any semblance of the wages due to them.  This is but one example of the gross mismanagement of municipal resources resulting from years of ‘educrat’ and union domination, and isn’t going away any time soon.  (Have you helped your children escape public schools — the dying relic that’s a legacy of Prussian statism?  If not, why?)

– The ever-increasing wave of illegal immigrants in our nation (and elsewhere) continues to result in chaos, crime and death… and yet there is still no serious, concerted response to cut off these invasions, enforce the laws on the book, and to secure our sovereignty and borders.  If anything, it almost seems the leaders of the Western world are out to ensure that world is swamped by the human tsunami… which begs the question: why?

– Despite the spectacular human catastrophe that resulted from experimentation with communism/fascism/statism in the 20th Century (and its continued infliction of misery today), its appeal (even if marketed under other names) seems to have grown in the U.S. and elsewhere.  Those who don’t learn from history must pay dearly for the lessons over and over again, and it seems sometimes that many are simply incapable of learning.

In short: literally hellish ideologies are resurgent, the legacy of human slavery is used as a political cudgel in America even as the contemporary version goes unlamented and unchecked elsewhere, unwanted children are being chopped up and sold for parts, and the most free and materially successful civilization in human history is being left defenseless before an onslaught of invaders whose incompatible cultures and worldviews will destroy it.  So cry for a lion if you must… but at least reserve some tears for the exponentially greater suffering of humans at the hands of other humans.  No matter how cute Simba Cecil might have been, he did not bear the imago dei.

And a world that refuses to recognize Yahweh will most certainly not care about what happens to His image bearers…

The red tide keeps rising

I remember when people expressed outrage in the Reagan era that the national debt had crossed the $1 trillion dollar mark.  They were right to do so, though for most of them it was more a matter of political posturing than true concern over the fiscal health of the nation.

Which is why, three decades later, the high tide just keeps getting exponentially higher:

National Debt as of Nov 28 2014

 

 

 

Want to know why you can’t get any interest on your savings?  It’s because the government has to keep interest rates artificially low.  Not so much to boost housing sales (though this is a useful cover story).  No, it’s because if interest rates returned to historic norms, the interest on the national debt would, by itself, consume all the revenue generated by income taxes!

And yet people thought Admiral (ret) Mullen was off base when he said the debt was one of our biggest national security challenges

This can’t continue on the trajectory it’s on.  And as the saying goes, “that which can’t go on forever, doesn’t.”

That’s an understatement

It seems the Boomers kept taking so much equity out of their homes they’re finding it hard to retire.  An article on the subject has this to say about the phenomenon:

Rising debt levels also reflect a psychological shift among Americans, financial advisors and economists say.

“People who lived through the Great Depression came out of that period with a great aversion to debt,” said Lori Trawinski, director of banking and finance with AARP’s Public Policy Institute. “As a culture we have loosened our opinion of debt.”

Loosened our opinion?  How about completely giving in to it?  Whether it’s the national debt, the annual budget deficits or our own personal spending habits, everyone seems to have just accepted that ever-more-massive numbers are a fact of life on this side of the ledger.

And in doing so, we are building our own literal living debtor’s prisons.

Even the spectacle of hundreds of thousands of Americans losing their homes in the recent economic downturn hasn’t caused a fundamental shift in thinking about debt yet.  People still whip out the credit card to buy the latest iPhone, or take out tens of thousands of non-dischargeable debt to pursue increasingly questionable degrees that may or may not contribute to landing a job.

We didn’t get here overnight.  Those who’ve been paying attention have been talking about the exponential growth in debt, and how one day there would be a reckoning.

Regular readers know that I’ve spent years teaching my Musketeers that “debt = slavery.”  They understand the concept that taking on debt gives someone else a higher priority on your life and earnings that you yourself have.  They’ve seen that in the last 20+ years their parents have bought only two new cars (and one used one–paid in cash–when having two vehicles became necessary).  And now, as the oldest Musketeer is in his first semester of college (at a relatively inexpensive but highly praised community college) it’s still cash on the barrel.  He worked for nearly a year after graduating home school.  Between what he saved to add to what his mother and I put away, his AA degree is banked.  We’re almost to that point with the Middle Musketeer, who graduates this year, and still have several years before the Youngest has college in his sights.  We’ve explained that our goal was to have the first two years provided for each of them, but that if they want a full Bachelor’s Degree they’re going to have to play a larger role in getting there.  That said, we’ve discouraged them from taking on any debt for school, which seems to have become a means of enslaving the last couple generations of graduates.  Because of that, I have no intention of cosigning for any “student” loans.  I would rather they alternate work and school, even if living at home longer, in order to graduate debt-free, than to get on the cookie-cutter mill of four or five years of school followed by a decade or more of loan payments.

I realize many people have entered a cycle of debt just to meet basic necessities.  I also understand, as the article above points out, that attitudes in this area have changed substantially and thus peer pressure can be crushing.  The Oldest Musketeer was one of only two in his high school graduation ceremony that didn’t have a declared college plan.  But he’s also now one of of maybe two that doesn’t have a bank saddling him for a long ride even as he studies.  I think that’s a good tradeoff, no matter how many eyebrows might be raised at first.

Take “the path less traveled” — and less leveraged.  It’ll make all the difference…

“Be not one of those who give pledges,
    who put up security for debts.
If you have nothing with which to pay,
    why should your bed be taken from under you?”

Proverbs 22:26-27

Bourgeois pseudo-‘communism’

Is there anything more amusing than watching self-professed ‘radical communists’ fight over who owns the copyright(!) to the English translation of the collected works of Marx and Engels (a work originally bankrolled by the Soviet Union, an entity that no longer exists)?

The Marxist Internet Archive, a website devoted to radical writers and thinkers, recently received an email: It must take down hundreds of works by Karl Marx and Friedrich Engels or face legal consequences.

The warning didn’t come from a multinational media conglomerate but from a small, leftist publisher, Lawrence & Wishart, which asserted copyright ownership over the 50-volume, English-language edition of Marx’s and Engels’s writings…

And it wasn’t lost on the archive’s supporters that the deadline for complying with the order came on the eve of May 1, International Workers’ Day.

Stubborn thing, that concept of property rights…

Meanwhile, Detroit’s distressed properties seem to be successfully winning… investment(!)… from China.  And if the governor of Michigan gets his way, 50,000 Chinese will accompany or ‘follow the money’ there:

Michigan Gov. Rick Snyder asked the federal government Thursday to set aside thousands of work visas for bankrupt Detroit, a bid to revive the decaying city by attracting talented immigrants who are willing to move there and stay for five years.

“Let’s send a message to the entire world: Detroit, Michigan, is open to the world,” Snyder said at a news conference.

And apparently, China is buying.  Wonder where they found the ideological blueprint in Das Capital for that move… or did Lawrence & Wishart’s legal takedown prevent them from consulting it?

The old saying used to be that the capitalists would sell the communists the rope they used to hang them.  Now it appears the ‘capitalists’ have given way to debt-fueled corporatism in the West, giving Eastasia an opportunity to just buy out(!) Oceania.

You can’t make this stuff up…