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Default is Inevitable, Part II

Default is Inevitable, Part II

Talking points are truly amazing things. They capture the essence of the obsessions of political operatives. The political news has recently been dominated by the talking points surrounding the debt ceiling debate, with the main terms of choice being the assorted variants of “apocalypse.”

First of all, failing to raise the debt ceiling would not automatically lead to a default on the national debt. The federal government would continue to collect revenue, and could use that revenue to pay debt obligations as they fall due, or in other words, pay the coupon interest on time. This would involve deep cuts to everything else, and if you are a professional politician that is synonymous with impossible, so there is an assumption that default would be the result.

And that default would be “apocalyptic,” “a catastrophe,” “a disaster,” or would “cost us our credit rating,” – which is doomed anyway because it is a mirage; the federal government is borrowing 40% of the money it spends this year and is projected to do so for the next ten. This is not a debtor worthy of a AAA rating, and the only reason we haven’t seen a failed bond auction is because the Federal Reserve has been buying everything in sight.

Professional politicians who never saw a dollar belonging to somebody else that they wouldn’t spend, now lecture us on the importance of borrowing money to pay the obligations on the money they borrowed to spend on political goodies. We are told of the need to increase our debts to stay current on our debt payments.

When individuals pay debts with new debts (called “Surfing” by finance experts) it is usually the last desperate trick before they call a bankruptcy lawyer. When our political overlords do it, they demand to be: 1. Re-elected; 2. Paid more; 3. Given a medal or an honorary Ivy League doctorate.

The apocalypse for the Democrats is that this issue is coming to a head too soon. Over the next ten years, a majority of the baby-boom generation will be enrolled in Social Security and Medicare. And, as the American economy continues to die over the next ten years, it is thought that these voters will be more frightened of losing benefits than of the country collapsing under the weight of the debt. Government dependency is the Democratic Party’s stock-in-trade, and they will be there to defend all government spending with borrowed (or more likely, printed) money.

In their calculation, if they can only delay the eventual tipping point where the economy just can’t take more debt, then as things continue to get worse more voters will fear losing Big Government than losing everything to Big Government.

While we’re talking about Medicare, some time soon you should do a web search for “unemployed college graduates,” and see how many news articles you can find. Think about this: A generation wants to get government-financed benefits, while a younger generation is chronically underemployed and not paying much money in FICA (Federal Insurance Contributions Act), the tax that funds Medicare. No job means no wages; no wages means no FICA; no FICA means no Medicare – unless they print the money and finance it with pure, un-tempered inflation.

The professional politicians cannot get us out of this problem; it is in their best interest to make the problem bigger. The cynicism is downright psychopathic – make sure that so many people depend on your appropriations that you cannot lose power even if the country is completely bankrupted. This, I fear, is what most Congressional Democrats, and probably most Congressional Republicans, intend to do.

It must stop. It is time to stop rewarding politicians who successfully loot the public treasury by affixing their names to schools, institutes, nature trails and wildlife refuges as recognition of their long and illustrious careers of running the nation into serfdom.

I’ve been told that veteran bankruptcy lawyers have a common speech they give to their clients who feel guilty or ashamed about the debts they’ve run up. They say “Stop that. Do you think corporate CEO’s feel guilty when they restructure debt? No! You are Mr. and Mrs. X, Incorporated, and you are getting out of debt.”

We need to put down the pride, the guilt, and the illusions of prosperity fashioned by self-interested politicians, and declare that we are the United States of America, Incorporated, and we are getting out of debt. If we don’t, we will default eventually anyway either directly or through currency devaluation, but by then our nation will not have a future. At all.

[Note: The first article “On National Debt, Default is Inevitable,” the numbers in the article were from the Monthly Statement of the Public Debt, June 2011, but the link inside the article was to the Monthly Statement of the Public Debt from June 2010. Apologies for the error.]

Photo Becky Stares –

Default is Inevitable, Part II

The Stench of Impropriety: Your Tax Dollars, Your Body Image, and The Government (Part 2 of 2)

The following is the second installment of a two part piece. The first is entitled “The Stench of Impropriety: Tom Harkin, Al Franken, Herbalife International, and The F.R.E.E.D Act”, and can be viewed below.

In part one of this piece, I introduced you to the relationship between Tom Harkin and his largest campaign contributor, Herbalife International. A partnership that demonstrates the perils of an incestuous system of politics and money, and ultimately played a part in Harkin’s introduction of the F.R.E.E.D. Act in the U.S. Senate. As bad as that looks, what the bill actually proposes to do is just as bad.

The act itself is only impressive in that it manages to hit the Liberal trifecta—it is completely devoid of any traditionally rational Constitutional basis, it increases and empowers an unelected bureaucracy to spend our money, and is a blatant attempt to further grow the entitlement base (which we can’t afford as it is now).

As the name suggests the stated mission of the bill is “to enhance and further research into the prevention and treatment of eating disorders, and for other purposes”. The bill opens with an assortment of claims and statistics meant to spur the reader into supporting its “heroic” intentions. Included here is that, “estimates, based on current research, indicate that at least 5,000,000 people in the U.S suffer from eating disorders including anorexia nervosa, bulimia nervosa, binge eating disorder, and eating disorders not otherwise specified” and “anecdotal evidence suggests that as many as 11,000,000 people in the U.S, including 1,000,000 males, may also suffer from these disorders”.

Naturally, the way this legislation would solve this problem is to create more agencies, throw an undisclosed amount of money around, and as mentioned above, amend and expand the Social Security Act of 1935 to ensure that we as taxpayers pay as much as possible in curing our fellow citizens’ ills.

The additional bureaucracy it proposes creating would exist inside The Department of Health and Human Services and be named—I kid you not—“The Interagency Eating Disorder Council”, and be funded from 2012 through 2016. To run this Council and to award grants (i.e. our tax dollars) would be the Director of The National Institute of Health, Francis S. Collins. His job would be to hand out money, as he saw fit, to various non-profits, colleges, State or local health departments, and community based organizations.

The bill states that the grant money is to be awarded for, among other things, the following reasons: to conduct a study regarding the economic costs of eating disorders that would “examine years of productive life lost, missed days of work, reduced work productivity, costs of mental health treatment, costs to family, and costs to society as a result of eating disorders”. In addition, money would also be required to go to “promoting positive body image development, positive self-esteem development, life skills that take into account cultural and developmental issues and the role of family, school, communities and the connection between emotional and physical health, and the prevention of bullying based on body size, shape, and weight.”

In short it is an embodiment of the kind of financially irresponsible, Constitution-shredding, emotionally-driven, nanny-state legislation that modern day American liberals have become synonymous with.

When it comes to co-sponsor Sen. Franken, though Herbalife did throw him $250, my sense is that he is in it for the pure ideological benefit of expanding the entitlement base…otherwise known as Section 938 of the F.R.E.E.D Act.

Section 938 is entitled “Grants to Support Patient Advocacy”, and would essentially require an unspecified amount of our tax dollars to be spent “diagnosing” people with eating disorders and enrolling them in Federal programs. In the bills words, the funds would be spent to “provide education and outreach in community settings regarding eating disorders and associated health problems, especially among low-income, minority, and medically underserved populations”, (Sect. 938(c)(1)); “providing education and outreach regarding enrollment in health insurance, including enrollment in Medicare, Medicaid, and the Children’s Health Insurance Program (SCHIP)”, (Sect. 938(c)(6)); and for, “Identifying, referring, and enrolling underserved populations in the appropriate Health Care agencies and community based programs and organizations in order to increase access to high quality health care services”, (Sect. 938(c)(6)).

It has long been believed by liberals that the surest way to get to a single payer health care system is to get enough people dependent on the government for this service that the private insurance sector can no longer exist. My view is that Sen. Franken (and probably Sen. Klobuchar and Sen. Harkin) wrote this part of the bill to hasten this process by further adding to the 16 million people that Obamacare is already slated to dump into Medicaid in the coming years.

Indeed this bill has a little something for everyone. The citizens among us deemed to have an eating disorder would get free medical attention, Herbalife International would be eligible to bill the Federal government for weight loss and eating disorder “treatments”, Al Franken could successfully move us one step closer to socialized medicine, and Harkin, well he has already gained $137,916 in campaign contributions (no matter the ultimate fate of the bill).

Those left among us who still respect the Constitution and its clear vision of the role of Federal government know that somewhere along the way we have failed it. Every single element of this bill, from the spirit in which it was offered, the language it contains, and the system it arose from is the epitome of this failure. I would argue that not only does this bill need to be stopped, but the institutionalized system of political donations from private companies needs to be abolished. Until such reform comes there will be no reprieve to the endless wave of disastrous special interest legislation that this bill represents.

It is we the American people that need to be F.R.E.E.D.

Default is Inevitable, Part II

The DSM Register Independence Day Weekend “Progressive Trifecta” (3rd of 3) “Keep Social Security Safe”

The Des Moines Register’s Opinion Section on Sunday, July 3, 2011 featured a “Progressives Trifecta” of half-truths and sophistry:

Richard Doak – What if the founders were around today?

Donald Kaul – My favorite 4th of July speech

Dean Baker – Keep Social Security safe from politicians who want to save it

This week I will focus my comments on Dean Baker’s article sub-titled “Real patriotism requires coming to terms with the grimmer side of American history”. Mr. Baker is co-director for the Center for Economic Policy Research (CEPR). The CEPR home page lists 10 funders, mostly far left organizations including the Open Society Foundations, which was founded by and led by George Soros.

Dean Baker-He advises the reader that two thirds of people age 65 rely on Social Security for more than half their income. He notes that “with traditional pensions disappearing and many near retirees losing much or all of the equity in their home, and also seeing 401(k) assets plummet”, hence “the next generation is likely to be even more dependent on Social Security”. He then proceeds to explain “Fortunately the program (Social Security) is fundamentally solid”. He goes on to summarize various facts about the trust fund and speculates about various ways to further improve the long term health of the program. He says “Many opponents of Social Security insist that its $2.6 trillion trust fund does not exist or that it is “just sheets of paper”. He acknowledges that “the trust fund is held in the form of U.S. government bonds, which are indeed sheets of paper. However, investors everywhere eagerly seek out these ‘sheets of paper’ as the safest asset in the world”.

  • Public reliance on Social Security-Mr. Baker is not providing a fully accurate picture in his description of the American public’s dependence on Social Security. I checked several sources for my information and found them to be relatively consistent, so I have only referenced three of them. My conclusion is that Americans who have lived within their means, saved money, invested prudently and maintained marketable skills are relying properly on Social Security as a meaningful component of their retirement. Social Security was never intended to be more than that.
  • Average U.S. Home Prices[1]
  • The median price of homes in the United States in 2004 was $221,000. It peaked in 2007 at $247,900. In 2010 it was $221,800. Baker’s statement about near retirees losing much or all of their equity would only have occurred if they leveraged their home equity for other reasons. If they had been in their home for 20 years, even the depressed 2010 prices reflect a gain of 80%.
  • Planning to Retire by Emily Brandon[2].
    • Americans age 65 and older receive most of their income from four sources: employment, Social Security, pensions, and asset returns, according to a recent Congressional Research Service report. The prevalence of each of these types of income has shifted somewhat since 1980. More Americans now continue working past age 65 and fewer people bring in income from assets. Here’s a look at how the biggest sources of retirement income have changed over the past 30 years.
    • Employment. In the 1980s and 90s about 16 percent of seniors worked, a number that steadily increased to 20 percent in 2008. Earnings now make up over a quarter (26 percent) of income for Americans age 65 and older, with the typical senior bringing in a median of $20,000 annually from work.
    • Social Security. Social Security remains the most common source of income for people age 65 and older. About 86 percent of seniors receive these monthly checks for a median of $12,437 annually. This entitlement makes up 39 percent of the typical senior’s income.
    • Asset income. Just about half of Americans (54 percent) receive some income from assets, down from 67 percent in 1980. But most Americans don’t receive very much in the form of interest, dividends, rent, or royalty payments. Interest rates and dividend yields have fallen since the early 1990s. The typical American made just $1,054 off their assets in 2008. Asset returns account for approximately 13 percent of retiree income, down from 24 percent in 1990. (Writer’s note: The Federal Reserve is “saving the economy” with 0% interest rates. Unfortunately this punishes millions of retirees who saved for their retirement and were counting on fair returns on bank deposits, CD’s etc..)
    • Pensions. The proportion of Americans with a pension from a former employer has fallen slightly from 37 in 1990 to 34 percent in 2008. Pensions payout a median of $10,800 annually which makes up about 20 percent of the typical retiree’s budget.
  • 401K Balances Moving Back to Pre-recession levels by David Pitt[3]
    • Americans who were afraid to open their 401(k) statements during the recession are finding good news inside the envelope now: For the most part, their accounts have come all the way back and then some.
    • Nine in 10 of the popular retirement plans are at least back to where they were in October 2007, the peak of the stock market. Since the bull market began in March 2009, stocks have almost doubled.
    • And many investors who kept their nerve and continued putting some of their paycheck into a 401(k) during the market’s worst months are now ahead.
  • My main issue with Mr. Baker is his insistence that the Social Security Trust Fund is secure. The current crisis over the debt ceiling now exposes that lie completely. President Obama has admitted that checks may not be issued if the U.S. Treasury cannot continue to borrow next month. If the Social Security Trust Fund held real assets, rather than government paper, they could sell those assets and pay benefits independently from the General Fund. As noted above, long term investments in real estate, stocks, bonds, commodities (gold), etc. have real value. Unfortunately all we have is paper made worthless by closet socialists like Tom Harkin and Barack Obama. I wish this were not true. I have paid into these programs at maximum levels for most of my working career. Privatize Social Security? Absolutely. Young people should demand it. The Ponzi scheme is over!

    I refer you to the following article, The Fraud of the Social Security ‘Trust Fund’ Exposed by a Most Unlikely Source by Don Boudreaux on July 16, 2011[4]

    If Americans choose to accept the misinformation of socialists like Mr. Baker as fact, then they deserve the government and fate that they choose. The Republicans have proposed a plan and until President Obama does likewise, they should be applauded for at least recognizing the problems. Mr. Baker knows better. He is simply a socialist who hopes to use the budget crisis to tax the private sector out of business, redistribute an ever shrinking American economic pie, and secure power for global elites like George Soros.

    [2] U.S. News and World Report, January 12, 2010

    [3] The Huffington Post, March 21, 2011


    Photo: Gino Santa Maria –

    Default is Inevitable, Part II

    The Stench Of Impropriety: Tom Harkin, Al Franken, Herbalife International, And The F.R.E.E.D Act (Part 1 of 2)

    Harkin and Herbalife

    Every reasonable American with a pulse knows that much of what goes on in the undercurrents of Washington D.C is disturbing. It is not often, however, that one proposed piece of legislation encapsulates nearly everything that is wrong in our Federal Government, unfortunately that is exactly the case with Senate file 481.

    The name of this bill is the Federal Response to Eliminate Eating Disorders, or the F.R.E.E.D Act. It is sponsored by Sen. Tom Harkin (D-IA), co-sponsored by Sen. Al Franken (D-MN) and Sen. Amy Klobuchar (D-MN), and was introduced in the Senate on March 3, 2011. If you have ever wondered what Tom Harkin and Al Franken have been up to lately you are about to find out not just the what, but more appallingly the why.

    Before examining the wide ranging particulars of the bill, let us first take a look at a very suspicious factor in its origin— a company called Herbalife International.

    Without getting too far into the maze of legislative language (though you are welcome to do just that by following the links), what this bill does is continue the re-write of The Social Security Act of 1935 that The Patient Protection And Affordable Health Care Act (Obamacare) began in 2010.

    Specifically the F.R.E.E.D Act does the following:

    • Redefines what our tax dollars can pay for by amending Sect.1905 of the Social Security Act (SSA) to add coverage for—screening, counseling, and non-prescription drugs used in the treatment of eating disorders.

    • Amends Sect. 1927(d)(2)(A) of the SSA by removing the restriction that specifically excludes payment for—“agents when used for anorexia, weight loss, or weight gain”.

    • Though it was passed only last year, amends Obamacare to include coverage for eating disorders treatment.

    The effective implication of this, among other things, is that it would authorize Medicare and Medicaid pay-outs for over-the-counter drugs used in the “treatment” of eating disorders. For a private company which sells such products this change in the law would represent nothing less than the Holy Grail—government purchased sales.

    In what would be a remarkable coincidence, Tom Harkin’s biggest political contributor over the last 22 years is a company called Herbalife International. Not an agro products company, an insurance provider, or a labor union as you may suspect, Herbalife International is in fact a global nutrition and supplement company that specializes in “healthy” weight loss.

    Herbalife International earns the distinction of becoming Harkin’s biggest single donor by having given him a total of $137,916.00 since 1989. Between the years 2005-2010 they gave Harkin $55,606.00, a display of generosity which came after already having donated over $40,000.00 to him in the 2004 campaign cycle alone.

    Some investigating shows that not only does Herbalife International have a wide range of products directly or indirectly tied to weight gain, weight loss, and eating disorders, but that the issue is one of a deeply personal nature for the company. Herbalife was founded in 1980 by a man named Mark Hughes, now deceased, whose inspiration for starting the company was his belief that his mother died of an eating disorder and an “unhealthy approach to weight loss”.

    While there is no way of knowing what they have in the future pipeline, the products they currently offer that directly relate to eating disorders include Zinc and Thiamine B1 supplements. The medical link lies in the fact that a person suffering from an eating disorder, by nature, has deficiencies of these compounds in their system, which supplements can effectively correct.

    Illustrating the connection between nutritional supplements and eating disorder treatment is a report released by the Royal College of Psychiatrists in London entitled “Guidelines for the nutritional management of anorexia nervosa”. One of many similar studies, it recommends that in planning the diet for a patient with anorexia, particular attention should be given to “the need for long-term, well balanced vitamin and mineral supplementation”. It goes on to say that “A significant proportion of patients with anorexia nervosa are deficient in thiamine, and the increase in carbohydrate metabolism that occurs during re-feeding may exhaust inadequate thiamine reserves. The use of prophylactic thiamine supplements in oral form is recommended for in-patients and those undergoing rapid weight gain”.

    In addition to the already defined role that supplements have in treating eating disorders with Zinc and Thiamine, there are ongoing studies looking at whether the lack of these in the body may actually cause the onset of eating disorders, opening the possibility that in the future such supplements may also be used in preventative care.

    By all appearances what we have here is a major global company giving a U.S Senator over $90,000.00 in a seven year period and then being the beneficiary of a sweeping piece of legislation, sponsored by said Senator, which authorizes our government to pay for the company’s products.

    It would be a mistake to conclude this is a simple case of a company giving a legislator money to be their puppet; in fact Tom Harkin has been one of Capital Hill’s loudest advocates for alternative medicine and prevention for 20 years now. In 1992 he was primarily responsible for the Office of Alternative Medicine coming into existence, and in early 2009 said the following:

    On several occasions, I have laid down a public marker, saying that if we pass a bill that greatly extends health insurance coverage but does nothing to create a dramatically stronger prevention and public health infrastructure and agenda, then we will have failed the American people.

    Clearly he feels Obamacare has “failed the American people” and is proposing this bill to make it even more inclusive and expansive, which is certainly his prerogative.

    Whether or not he has a genuine conviction on this issue, and frankly I believe he does, is beside the point. What is at issue here is that his largest political donor stands to make gigantic amounts of money should legislation that he proposed be signed into law.

    Though we have allowed and accepted the institutional development of these types of relationships and practices, we as the American public have a right to know about them when they occur.

    Note: Tom Harkin’s Washington D.C office was contacted for comment and clarification regarding this story.  So far they have provided neither, as soon as they do this story will be updated.

    This is only one of many disturbing elements of this legislation. Here is part two entitled: “The Stench of Impropriety: Your Tax Dollars, Your Body Image, and The Government (Part 2 of 2)”, where many other provisions of this bill are examined, including Al Franken’s involvement.

    McKinley’s Memo

    McKinley’s Memo

    Though the third longest session in Iowa history has been over for two weeks, Governor Branstad still has until the end of July to sign or veto any of the legislation that was passed.

    While there were some notable and very positive accomplishments, Senate Democrats also stood in the way of a lot of positive progress.

    Here are a few accomplishments followed by some of the missed opportunities.

    1) Sustainable Budget

    We finally are back on the path to long-term fiscal sustainability with a budget that spends less than we take in and funds Iowa’s priorities. Is there more we can cut? Absolutely. But it’s a good start and a real break from the problems of the last four years.

    2) Rule & Regulatory Reform

    We have begun to change the direction of the state when it comes to onerous rules and regulations that are stagnating job creation. Our 11 city “Re-Open Iowa for Business” tour has yielded some great suggestions and opened a lot of eyes. Stay tuned in a few weeks more information on this as our comprehensive report will be made public.

    3) Reorganization of Economic Development Department

    This reorganization of Iowa’s economic development department, one of Governor Branstad’s top priorities, will give the state more flexibility as it pursues and recruits entrepreneurs and job creators to Iowa. This reorganization, coupled with helping our existing businesses, will be key to continuing to grow Iowa.

    What were some of our missed opportunities because of Senate Democrat obstruction?

    1) Property Taxes

    In order to make our state more competitive for jobs, we must have lower property taxes – for all classes of property. Unfortunately, the property taxpayers of Iowa will not get the comprehensive tax reform that they deserve. We will continue to work hard to find a bi-partisan solution and make next session the session of true property tax reform.

    2) Clean Abundant Energy

    In order to grow the economy of the future, we must have adequate, clean and reliable base-load energy. Nuclear energy is one excellent source that would create a lot of good jobs in Iowa. The Iowa House passed legislation to continue to pursue possibility of adding additional reliable base-load energy. The votes existed to pass it in the Iowa Senate in bi-partisan fashion, but Senator Gronstal obstructed a vote.

    3) Income Tax Relief

    Both individual and corporate income tax reductions would help grow our economy, create jobs and stimulate positive economic activity. Once again, it did not happen this session because of Senate Democratic obstruction but count on us to continue to push forward next session.

    4) Collective Bargaining Reform

    The Iowa House, with broad support, voted to inject some common sense reforms into the collective bargaining and arbitration processes in Iowa. For the long term fiscal sustainability of the state, we believe there needs to be more equity and fairness in the process. As it stands today, over 80 percent of state employees pay nothing for health insurance and most get lucrative benefit packages and healthy annual salary increases that are out-of-line with the private sector. It is not just the union bosses that should be at the table – the taxpayers deserve a seat at the table too.

    5) Education Reform

    We must once again make education about the children and discontinue the notion that simply spending more money will equal better student achievement. We need to set high standards and hold everybody accountable for the success and achievement of our students.

    6) Late-Term Abortion & Marriage

    Because of inaction by Senate Democrats, Iowa could soon become the Midwest Capital for Late-Term Abortions. We had the votes in the Iowa Senate to slam the door on abortionists like Dr. LeRoy Carhart who wanted to come into Council Bluffs and open up a clinic, but Senate Democrats refused to do what needed to be done. On the issue of marriage, Iowans sent a strong message last fall with the ouster of the three Supreme Court Justices. We need to keep the pressure on to give Iowans the statewide vote they deserve on the issue of marriage.

    Though we made some positive steps forward, much of what we set out to accomplish not yet been achieved. Senate Democrats obstructed much of our pro-jobs agenda.

    That is why we must work hard day in and day out to talk to our family, friends and neighbors about the important issues facing Iowa and continue to press forward with what we know will bring the brightest future for all present and future Iowans.

    As always, I welcome hearing from you and can be reached by phone at 515-281-3560 or by e-mail at [email protected]

    Default is Inevitable, Part II

    The DSM Register Independence Day Weekend “Progressive Trifecta” (2nd of 3)

    The Des Moines Register’s Opinion Section on Sunday, July 3, 2011 featured a “Progressives Trifecta” of half-truths and sophistry:

    Richard Doak – What if the founders were around today?

    Donald Kaul – My favorite 4th of July speech

    Dean Baker – Keep Social Security safe from politicians who want to save it

    This week I will focus my comments on Donald Kaul’s article sub-titled “Real patriotism requires coming to terms with the grimmer side of American history”.

    Donald Kaul – He shares viewpoints about the things he likes and dislikes about the 4th of July.  He likes back yard gatherings but he dislikes patriotic claptrap.  He likes patriotism, defined as acts of citizenship and service, but dislikes speechifying.  He likes the flag itself but dislikes flag-waving, defined as substitute emotionalism for rational behavior.  My primary issue with his meandering opening is that he never refers to the holiday by its real name, which is Independence Day, not the “Fourth of July”.

    • Flag Waving Emotionalism-His example of substituting flag-waving emotionalism for rational behavior is “War, for example.  How many times have nations been led into truly stupid wars behind a flowing flag?  Does the word Iraq suggest anything to you?”
      The rest of the story: Which Iraq war was Mr. Kaul referring to?  Why did he select war(s) started under Republican Presidents, but not include Vietnam, started under Democrat Presidents?  There was meaningful United Nations support for both military actions in Iraq.  There was minimal UN involvement in the military actions in Vietnam.  His point about irrational behavior would have seemed less partisan had he said “Does the word Vietnam suggest anything to you?”.
    • Favorite Fourth of July Speech-He proceeds to inform his readers about the great black orator and civil rights leader, Frederick Douglass.  He rightfully acknowledges the key role that Douglass played in pointing out the hypocrisy of the “Independence Day” celebration of 1854, a time when slavery was a legal practice in southern states and segregation a common practice almost everywhere in the United States.
      The rest of the story:  Mr. Kaul does not fully inform us about the political party that was responsible for the safeguarding of slavery between 1789 and 1854.   That was the Democrat Party.   Frederick Douglass supported abolitionist John C Fremont in the 1864 Republican primary.   Lincoln, who won the nomination and the election, was a moderate, not a radical abolitionist. Douglass eventually reconciled himself with Lincoln’s shortcomings and legacy.  Douglass supported Republican Ulysses S. Grant in 1868.  Mr. Kaul, why not acknowledge that Frederick Douglass’ speech was about injustices imposed by Democrats, including Thomas Jefferson and Andrew Jackson?

    (On a side note, I wish influential liberal writers like Mr. Kaul would acknowledge that Republicans drafted and passed the 13th, 14th and 15th amendments ending slavery, providing citizenship and voting rights to all minorities.  It is a tragedy that the Supreme Court later gutted the clear intention of these amendments with the Cruikshank decision of 1876. After that, southern Democrat Senators prevented enforcement rights for 88 years until a coalition of Republican and Democrat Senators prevailed with the Civil Rights Act of 1964 and the Voting Rights Act of 1965.)

    • Tulsa Race Riot- He concludes with a review of the history of the Tulsa race riot of May 31, 1921. The Wikipedia article on this event varies substantially with Mr. Kaul’s article, but my interests are not to quibble over details.  It was a deplorable event driven by unreasonable fear and hatred stirred up by sensationalistic newspaper reporting.   The town’s black community was burned to the ground and they suffered a large number of deaths and injuries.  I support Mr. Kaul’s desire to educate the public about this event.   Our nation’s history has too many examples of horrible behavior denying life and liberty to minorities and the underprivileged.
      The rest of the story:   Now, it is also a fact that the state of Oklahoma originated in 1907 and had Democrat Governors until 1963.  The Governor in 1921 was Democrat, James Brooks Ayers Robertson.   An article from the Encyclopedia of Oklahoma History and Culture, referring to the early years of the state legislature, “The legislature banned interracial schools at all levels. Many public facilities along with common carriers were segregated. Some 540 railroad depots in the state had to be altered to fit the new separate waiting rooms requirement, while new coaches also had to be added to the lines. Over time, legislators segregated everything from hospitals to housing to cemeteries to restaurants. In 1915 Oklahoma made national history by becoming the first state in the Union to segregate public pay telephone booths.”.[1]  Mr. Kaul, why don’t you acknowledge that the Tulsa race riot was a product of the racist history of the Democrat Party?



    Default is Inevitable, Part II

    Environmentalism: A Cult with a Ponzi Scheme

    A long time ago, somebody figured out that people were afraid of nature. With this realization, our subject set out to carve a statue of a woman with a horned head dress, and declared the idol to be Ninhursag, the goddess of the earth. Our carver then set about convincing people that if they brought their best wheat, their best grapes, and their best lambs and calves to sacrifice to the goddess then they will be blessed with plenty and the grace of the divine goddess will rain down upon them, but if they refused they would be cursed with pestilence.

    And thus the people, rending their garments and lamenting of their fear of the weather and their invented devil gods, brought their best produce to their idols, making themselves poorer and their lives more difficult all out of superstition and fear of their world.

    It grew into dogma – everybody knew that sacrifices to the idols was a necessary step to ensure survival of the community and the individual alike.

    Of course, modern humanity has advanced light-years beyond these petty superstitions. We don’t fear natural phenomena; we fear a chemical element – carbon.

    Enter the global climate change movement, who has informed us that driving cars, using electricity and having children (or as Prince Philip called them, Carbon Bombs,) are all causing massive expulsions of carbon dioxide into our atmosphere, and that if it continued, the seas would rise, hurricanes and other storms would run rampant, crops would wilt and famine would choke all the lands everywhere.

    It has turned into a dogma – everybody knows that carbon dioxide from human activity will destroy all the world with global warming and floods, droughts, heat, cold, etc…

    Therefore we the peasants must be constrained in our “carbon footprints,” with higher taxes on gasoline, electricity, natural gas, food, clothing, babies and every other trapping of ordinary life.

    So, instead of sacrificing your standard of living to a god, you can sacrifice your standard of living to government.

    Of course, if you feel uniquely guilty about your existence, you can sacrifice a larger portion of your income through the purchase of carbon offsets; plenary indulgences guaranteeing your place in green heaven regardless of what you do in your everyday life, and the carvers of the environmentalist gods are standing ready to accept your offering.

    They also have no more power over the climate as the carved idols of primitive cultures, but they will take your hard-earned wealth if they can convince you that your sacrifices are for the greater good by means of gratifying the new climate goddess.

    The environmentalist cult has even threatened “climate change deniers,” going so far as calling for systematic punishment of those who publicly disagree with the climate change agenda. One Australian commentator even called for forcible tattooing of climate change skeptics. Our self-appointed betters aren’t above sending heretics to the dungeons as it turns out.

    Under the climate change regime, progress is renamed destruction, poverty assumes the name “sustainable development,” and naturally there are huge profits to be made by the prophets of the new nature worship; and a horde of people line up to sacrifice wealth and liberty out of fear and without receiving anything in return.

    So, go surrender your freedom, your mobility, your red meat and your air conditioning to the new Ninhursag if you wish. I’ll burn a pile of tires in honor of Kali the Destroyer, and we’ll see what happens.

    Default is Inevitable, Part II

    The DSM Register Independence Day Weekend “Progressive Trifecta”

    The Des Moines Register’s Opinion Section on Sunday, July 3, 2011 featured a “Progressives Trifecta” of half-truths and sophistry:

    • Richard Doak – What if the founders were around today?
    • Donald Kaul – My favorite 4th of July speech
    • Dean Baker – Keep Social Security safe from politicians who want to save it

    This week I will focus my comments on Richard Doak’s imaginary view of our founding fathers.  I will cover the other articles in due time.

    Richard Doak – He begins with “This Fourth of July finds the country caught up more than usual in the mythology of America.”.  This opening argument is a fundamental tactic of the Progressives, i.e. to undermine our most cherished institutions by equating them to something less (mythology).

    • He asserts that “a faction” of the Supreme Court claims to discern the “original intent”.  Every Justice is required to faithfully and impartially discharge and perform all the duties incumbent … under the Constitution.  How can a Justice fulfill that oath without trying to understand the original intent of the founders?  Every decision requires a majority, not a faction (minority).
    • He says that “Today’s congress and courts are more intent on freeing the rich from taxation…”.  According to The Heritage Foundation, the % of Federal Taxes paid by the top 10% of income earners has increased from just fewer than 50% in 1980 to about 70% at the end of 2008.  In 2008, 49% of U.S. households paid no Federal Income Tax.[1] The reality is that for decades congress has been intent on freeing everyone but the rich to pay taxes.
    • He asserts that “The Constitution, written in 1787, created a strong central government and a unified national economy.”.  He then creates the straw man that “politics are occasionally roiled by calls for a return to a weak central government and state’s ability to veto federal actions” as existed under the Articles of Confederation.  I have attended every major Tea Party event in Iowa over the past 3 years.  I can’t recall anyone calling for a return to the Articles of Confederation.   Most Tea Party supporters simply want the country to operate under the Constitution as properly amended.
    • He offers several rights, including guaranteed health care, implying the founders would have included them had they thought about them.  At the time the Constitution was written, there was substantial discontent over the welfare of the common man, both in the United States and Europe.  The French Revolution occurred in 1789.  The Articles of Confederation were introduced by James Madison that same year and ratified at the end of 1791. It is disingenuous to imply that the founders had no opportunity to think about social justice entitlements.  It is more likely that they considered such matters to be the province of individual states.
    • Finally, he offers up the U.S. Post Office as a shining example that the founders were pragmatic and had no favoritism of private sector solutions vs. government solutions.   They just wanted to do “what works best”.   I can’t think of a better argument for limited government and the need to repeal Obamacare.


    What Would The Founders Think?

    What Would The Founders Think?

    This morning I am considering “what ifs”.

    My father often jokes that had I been born 5 hours earlier, he would have named me Ulysses instead of Arthur.  That is, I could have been a 4th of July baby with the initials “U.S.”.  I have been forever thankful that my mom stuck it out long enough to prevent that impediment on my life.

    Sometimes I daydream about what would have happened in my life if I had been named Ulysses instead of Arthur.  I believe I would have developed a very similar personality, but I suspect (mixing my current personality with the name) that I would have found myself running for public office at some level and leveraging my “U.S.” initials as a brand of patriotism.

    But today I want to consider some “what ifs” that actually matter.  Such as what if Washington’s Continental Army completely disintegrated during the march across New England?  Or was decimated at New York?  Or never made it across the Delaware?  As much as we may honor today the patriots who spent their time articulating a fantastic message of freedom from the tyranny of the British King, our standing as a nation would have been seen as a quaint colonial uprising if it had not been for the hard work and sacrifices of the soldiers who fought for our freedoms.

    It is entirely likely that the British Realm would have dominated the world in greater glory in the past 235 years.  The great world wars of the 20th century may never have happened.  Freedom for slaves may have occurred on a larger scale in the earlier part of the 19th century (recall that the British Kingdom led the world in abolishing slavery, not the United States).

    It is hard to deduce the path of technology over the same time period… American inovation has been a factor in developing better processes and our freedoms have been a factor in developing better education and allowing dreamers to work out their dreams.  And the urgent needs of war (though not a goal of a nation) have certainly led to some valuable inventions.  I tend to believe that we would, if still a British colony, have a world without iPods or even computers, or televisions, or many of the modern conveniences that we enjoy today.  We would probably still be populated heavily along the coasts, lacking efficient transportation, and Native Americans could still be holding much of the land in the midwest.

    Spain and France could still be holders of large parts of the American continents.

    Of course, the Founding Fathers could not have comprehended all that they initiated by standing up for the basic rights of man.  They were dreamers, and some were fortunate enough to see parts of their dream come to fruition, but despite everything we may think about our current state of affairs, those men who sacrificed everything would doubtless be proud to see what their work has wrought.

    Generation upon generation have looked upon the Revolution and subsequent creation of a republic as the cornerstones of our incredibly open society.  The Constitution is a bulwark that has carried us through our darkest days, and provided over 200 years of bloodless changes in power.  We should be proud of our ability to work things through as a nation in peace.

    We may have concerns today about how the Constitution has been misunderstood by some, abused by others, and ignored at times when it should be the guide for how we make decisions.  The frustrations grow when it becomes more apparent that our government, which was built to serve the people, appears to be served by the people.  We must guard against this at every turn.

    But the Founders would be proud to see that so many do remember their words, seek faithfully to carry on a free society, and flourish in our freedom.  What we have today in the United States is more than I think they could have hoped for.  No matter what one may think about the current state of political affairs, the dream of America continues to burn brightly.  To the Founders we should be appreciative that they stuck through to the end, and that they sought the hand of Providence in what they did.  While the structure of our government may be secular, our goals are tied to the will of our Creator who is the provider of the very rights we seek to defend.

    On National Debt, Default is Inevitable

    On National Debt, Default is Inevitable

    Much attention has been focused on the size of the national debt as a whole; roughly $14.4 trillion. That number is astonishing, but the sheer size of the debt actually hides the true horror which is in store for the economy and future generations.

    The debt has many component categories, the largest of which is called Marketable Debt. That means the portion of the debt that was issued in treasury securities that can be sold in the secondary bond market, and it is around $9.2 trillion. The rest is Non-marketable, and held mainly by the Social Security Administration through bonds that cannot be sold.

    The Marketable Debt also has its own sub-components, based on the type of security that was sold to incur the debt in the first place. Treasury Bills mature in 1 year or less and accrue interest; Treasury Notes mature in 2, 3, 5, 7 or 10 years, and Bonds mature in 30 years – and the Notes and Bonds pay coupon interest every six months. Each bond is sold at the prevailing interest rate at the time of the sale.

    Here is the part that is frightening: Starting under President Clinton, expanding under Bush, and exploding under Obama, the federal government has shifted its borrowing from traditional 30-year Bonds to the shorter term securities.

    According to the US Department of the Treasury’s Monthly Statement of Public Debt dated May 31, 2011, of the $9.2 trillion dollars of Marketable Debt, only about $965 billion are 30-year Bonds. More than $6 trillion are on Notes, with maturities ranging from 2 to 10 years, and a whopping $1.5 trillion are on 1-year Bills.

    We are running record deficits, so we aren’t paying any of these off when they mature – we just roll them over onto new securities. We’re also adding another $1.6 trillion on to the pile.

    Right now the Federal Reserve is fixing interest rates at levels so low that they cannot be maintained forever. When the Fed raised interest rates to more than 20% back in the 1979-82 recession, the Treasury actually sold some bonds at interest rates of 20% or higher. Imagine if interest rates went up to just 10% today, and stayed there for a couple of years. All of those Bills and Notes that mature and are rolled over will roll over to higher interest rates.

    The interest payments alone will easily top $700 billion dollars a year, and since the debt is likely to grow further as interest rates go up, the country is likely to pay well over $1 trillion per year in coupon interest alone -which will be financed by the issuance of new Treasury Notes.

    Imagine a world where the Army is disbanded, Medicare covers only critical care needs, the Social Security age is retroactively raised to 75, and the all retired government officials lose their pensions because the United States needs to dedicate so much of its budget to paying the interest on the debt. These are politically impossible measures.

    The only other way to avoid direct default is to print money – destroying the nation’s economy with hyperinflation but technically making the interest payments, albeit with dollars devalued to near worthlessness. That’s how the Federal Reserve managed to keep interest rates so low up to this point – by buying Treasuries at artificially low interest rates with printed money. That is why Bill Gross of PIMCO dumped every piece of US Treasury paper his hedge fund owned – the returns on these bonds would have been eaten up by inflation.

    There it is – either we ruin the dollar or we default. Default is by far the better option; we can restructure our debts to something more manageable. This will ruin our credit rating forever, so future politicians will not be able to run deficits for vote-buying projects and illegal “Kinetic Military Actions,” whatever those are. There are silver linings everywhere.

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