Our Economic Future (Part 3): Our Municipal Bond Crisis

Rather than try to explain myself, this time around I will post a link and a video to explain what is going on. And maybe I'll quote an important part of the article as well:

"US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning."

Basically this means that over 100 U.S. City Governments are in danger of coming down (i.e. face default) because of a municipal bond crisis. To read the article, click the previous sentence.

"The Day of Reckoning", originally aired on 60 Minutes, came out last week and is available below.

Video: Cato Opposing 'Stimulus' -- Hundreds of Economists Sign on

The Cato Institute just tweeted this link to a video they made back in early 2009. I remember it well. I was a young Constitutionalist and officially a card-carrying member of the Constitution Party. I don't consider myself a constitutionalist any more, but that doesn't mean I don't respect the Constitution or the Constitution Party. I do. But my political views are much more in line with anarcho-capitalism nowadays.

Gary North on Socialism

"If something isn't done about it, they will become totally dependent on the State, at precisely the point in history when the state is about to go bankrupt because everyone is demanding more than it, or the taxpayers, can fulfill." Gary North, Inherit the Earth

Video: Gold Vending Machines

Tax Cut Clarity

Thomas Sowell recently debunked the current rhetoric of the Bush Tax cut debate. I always knew there was something fishy going on.

Here are the key points:

1)

Let's face it, politics is largely the art of deception, and political rhetoric is largely the art of misstating issues. A classic example is the current debate over whether to give money to the unemployed by extending how long unemployment benefits will be provided, or instead to give "tax cuts to the rich."

2)

Not only are the so-called "tax cuts" not really tax cuts, most of the people called "rich" are not really rich. Rich means having a lot of wealth. But income taxes don't touch wealth. No wonder some billionaires are saying it's OK to raise income taxes. They would still be billionaires if taxes took 100 percent of their current income.

3)

It also takes a lot of brass to talk about taxing "millionaires and billionaires" when most of the people whose taxes the liberals want to raise are neither. Why is so much deception necessary, if your case is good?

4)

Another fashionable political and media deception is making a parallel between giving money to the unemployed versus giving money to "the rich."

When you refrain from raising someone's taxes, you are not "giving" them anything. Even if you were actually cutting their tax rate – which is out of the question today – you would still not be "giving" them anything, but only allowing them to keep more of what they have earned.

Read the rest here.

Video: The Four Loko Lowdown

Recently the Feds decided to ban Four Loko. But what does science have to say about this drink? Is it any different from, say, any other mix like Red Bull & Vodka? I'm no drinker, so I'll leave it to the guys at ReasonTV to give you the 411. (411..Man. That term is ancient!)

Tacitus on the End of Society

Tacitus, the Roman historian of the 1st and 2nd century, had an insightful observation about the end of societies:

The closer a society is to ruin, the more laws there are.

Today, President Obama bragged about how productive Congress was this year.

Advice for the 30-and-Under-Club

Simon Black, a man whom I have never heard of until I saw his recent post on LewRockwell.com, gives some interesting, and agreeable advice for the 30-and-under-club.

One:

Go explore the world and get an education based on experience, not expensive academic theory.

Two:

Find people whose lifestyles you want to emulate and make yourself indispensable to them as an apprentice… this will be the only time in your life that you can afford to work for nothing in exchange for a valuable, first-hand education.

Third:

Most of all, stop playing by everyone else’s rules. Refuse to be enslaved by the idea that it’s your civic and moral responsibility to pay off the debts of your government’s failures.

The second one I absolutely agree with. In fact, I have drafted a few cover letters to journalists who I hope will allow me to apprentice under them for free. Not only will this benefit me short-term (via the added skill) but it will also benefit me long-term (I can now ask for a hefty letter of recommendation from an established person in the field).

Think about the possibilities in your area of interest.

Schiff's Way out of This Mess

Since midsummer, so much ado has been made about the extension of the Bush tax cuts. In truth, the "benefits of holding taxes low will be more than mitigated by damage done by larger deficits" says Peter Schiff. So many others are in agreement with this fact that it isn't necessary to link them all.

Dr. Doom and Gloom, while very entertaining, informing, and insightful, has become somewhat formulaic in his prescriptions to cure the crisis. And yet, I can't seem to get enough of reading his columns.

What's his solution to the crisis this time around? The same one he's been giving before:

What we really need are massive cuts in government spending so we can have true tax relief. In addition, we need to remove the government-imposed barriers which make our economy uncompetitive, and which are preventing market forces from correcting the imbalances.

He concludes with a clear message, "by expanding government and increasing debt, the plan puts us farther than we have ever been from a real recovery."

Of course this is not to say that we do not need tax cuts. When the people get their money back or are allowed to keep their money this is always a good thing. The problem is the spending.

Read the rest of Schiff's latest column here.

Our Student Loan Addiction

This image was taken from the Ripon College's Scholarships and Financial Aid page.

While Federal Grants are at 26 percent and state/local grants are at 40 percent, the amount of freshmen holding student loans is a staggering 80 percent at this college.

What bothers me so much about this statistic is that colleges can keep the price of tuition higher than what it would have possibly been if the student loans weren't there in the first place.

University planners, knowing that financial aid is guaranteed, plan expansion based on somewhat false signals in the markets (federal grants, student loans). It does not matter how big or small the false signal. They can be lilliputian or large. As long as their is some sort of intervention, there is always going to be some level of malinvestment on behalf of the university because the distortions give a false signal that savings for colleges are there even when they are not. Eventually, the number of students able to pay for college will shrink once the price of tuition becomes too high and the true number of adequate savers will be revealed.

Even the adequate savers get punished because they, too, pay an artificially high tuition price.

Budget cuts, department cuts, tuition hikes, and major cuts will ensue as a result of decreased revenues. However, they would not have to happen, or at least be as severe, I think, if the distortion were absent and university accountants were allowed to plan growth within budget and naturally.

Ben Bernanke as Juggler of Digits

Gary North wrote an interesting piece this week on Ben Bernanke. It is surprisingly more narrative than his usual stuff:

The juggler I most remember was a young man who was juggling a bunch of hoops. He was really good . . . until he dropped all of them in his grand finale. They came down in disarray. He picked them up and walked out of the ring. What else could he do? The finale was not so grand.

What if he had been juggling the world 's interconnected banking system?

What if he had been juggling in secret?

What if he had dropped all of the rings?

He's no Jonathan Franzen or John Updike, but he's got something going on for him here. It got me interested in the rest of the piece. Read the rest on Lew Rockwell.com.

Murray Rothbard on Writing Clearly

"It is not enough, after all, to be clear and brief; one must also have a pretty good idea of what one is saying." Murray Rothbard, Boom! Crack! Crash!

State-Mandated Health Care Unconstitutional, But What about Car-Insurance?

The recent declaration of Obamacare, specifically the section that mandates the uninsured to buy health insurance, unconstitutional is a victory for liberty and a reason for celebration.

But one thing I never understood, and I haven't understood this since I was sixteen and one month, was why I have to purchase state-mandated car insurance.

What if I can't afford to drive and pay for insurance and pay for gas that is continually going up in price? How does one save when a teenager?

Having a car assumes someone has saved enough for car payments and gas to use the contraption. That is understood. But this law has the potential to kill savings, if it has not already done so, and is a way to force young people, even the responsible ones, to quit driving all together. At least that's what I think.

Can someone please tell me the difference between state-mandated health insurance and state-mandated car insurance? Somebody? Anybody?

I must look deeper into the history and reasoning behind state-mandated car insurance.

Video: Schiff Report: Chinese inflation is getting worse!

That spells "b-a-d-n-e-w-s" for Americans, because the Chinese will have to stop expanding their money supply and start contracting it to stifle inflation in their own country.

This means reducing exports to the United States and keeping more of their own goods.

As Peter Schiff notes, that's when U.S. inflation will speed up because they may stop hoarding our dollars - and lots of em - and may stop sending us their goods.

Gary North was right: Ben Bernanke is a juggler of digits. But China is juggling, too. It has a decision it has to make about its currency: The RMB.

It has to let its currency rise. The purchasing power of the RMB must go up in order for the 5.1 percent inflation to drop.

Ding! Ding! Ding! It may be time to invest in the RMB, while its still low.

Video: Surviving Without Money

What does a society that experienced hyperinflation and now is in its post-hyperinflation stages look like? Well, a lot like Argentina in the video below.

Watch and see how they survive.

Barter is one among other things. Seeing that they are still living and breathing and didn't kill each other off actually gives me hope among all the "societal collapse" prognosticators that the U.S. can bounce back, slowly and somehow.



In January 1988, a writer at The Freeman visited various South American countries and described the experience:

How would you like to live in an economy without memory, where you don’t know the price of anything day to day or the value of the wage you are paid? That’s what it’s like under hyperinflation, in Argentina, supermarket prices are increased twice daily. During the two weeks we were in Brazil recently, interest rates rose 100% from 330% to 430%. Bolivia’s demand for money is so great that its third largest import is currency.

Read the rest here.

Falsifying Resumes and References

Don't get caught doing this.

Video: Homegrown Revolution - Radical Change Taking Root

Video: The Citizen's Guide to Surviving Police Encounters

What Keeping Confidence in the U.S. Dollar is all About

Even the outside world (countries outside of the U.S.) have vested interest in keeping confidence in the U.S. dollar high. The main reason is that "at the moment the bulk of the monetary reserves of central banks across the world consist mainly of dollars and US Treasuries."

Because of decades of exporting our inflation to other countries, we have merely pushed off a total decline in the value of our currency. So what is keeping confidence in our dollar now?

Dr. Sander O. Boon explains:

The dollar reserves retain their value as long as the American economy keeps on performing well enough. But when confidence in the American economy crumbles, so does the value of dollar denominated assets, once investors start selling some of them off. The world fears losing its confidence in the dollar, as it would be a very costly affair for the holders of these assets. You could also try to describe the situation as follows: as long as your neighbour keeps his job, the value of your own house remains intact. This is the very fragile basis on which our entire monetary system has been built.

Yikes!

Is Higher Education a Cartel? Gary North Explains

In his 2000 essay, The Coming Breakdown of the Academic Cartel, Gary North says the following:

In higher education, government-enforced accreditation restricts the spread of new ideas, new methodologies, and above all, new technologies that enable producers to lower prices. This is how higher education has become uniformly secular, liberal, and mediocre: raising the cost of entry.

Video: Ladies of Liberty Alliance

Jon Stewart on Ben Bernanke

Every single word made against the Federal Reserve by mainstream television personalities is always welcome.

See The Daily Show's lambasting of Ben Bernanke here.

Imagine: Ron Paul's Best Anti-War Column

In Spring 2009, as a junior at a private Catholic university, I took a class called Language & Prejudice. As our final assignment we had to choose one person whose writings we admired - or something like that - and give a presentation on this person's writing style and so forth. I chose Ron Paul's "Imagine" transcript written in his Texas Straight Talk column. I only read the first few paragraphs..and my classmates loved it; including this part:

Imagine if some Americans were so angry about them being in Texas that they actually joined together to fight them off, in defense of our soil and sovereignty, because leadership in government refused or were unable to do so. Imagine that those Americans were labeled terrorists or insurgents for their defensive actions, and routinely killed or captured and tortured by the foreign troops on our land.

One of my peers said, "I never thought of it that way." In other words, he realized that the golden rule isn't not being applied in our foreign policy - or that we fail to take into account what it would feel like if the "opposition" was doing it to us.

Without ever having studied foreign policy in-depth, this one piece of writing convinced me that foreign policy should take into account the golden rule. But then again, as a Christian, shouldn't this have been taking into account a priori?

Four Books to Understand the Crisis

My latest column on the Charleston Tea Party website has just been published.


Finally!

It was written with the reader (read "Non-economist") in mind; and as I said in the column the goal of studying my book recommendations is not:

to become a bonafide economist or a constitutional scholar; the goal is to become an informed citizen.

For this reason I have narrowed down the number of books that could be read to understand the crisis to a digestable four books. If you want to read more on economics, then go right ahead. Every book except The Alpha Strategy has a book recommendation list at the end, usually broken into beginning, intermediate, and advanced lists.

To read my latest column, Four Books to Understand the Crisis, click here.

Video: Can Facebook Stop Child Abuse?

My Facebook Profile Picture for the Child Abuse Campaign

It could only be the one and only Outlaw Star. C'mon! Tell me you didn't watch Toonami back in 2001?

Anyway, I have two postings related to this topic: A video and a blog post.

Oh yea, I did have a Goku picture originally.



Tell me you recognize this guy?

The Facebook Child Abuse Campaign

I think this child abuse campaign is by far the best activism campaign on Facebook by far. It's trendy. It's meaningful (more meaningful than the last trend Q&A) and it gives people a chance to think about their childhood.

I personally believe it is working in two ways: (1) People are learning about what is making people change their profile pictures to cartoons. My evidence: 50% of Google Searches (10 out of the top 20 searches of today) are cartoon related -- and there is no good reason to believe that Road Runner or 90's cartoons would make a resurgence like this in a day absent of this facebook phenomena; and (2) There has been a sharp uptick of child abuse related searches. One of the rising searches is "Child Abuse Facebook" as evidenced by the chart below.





These searches have primarily been in the United States and part of the U.K., although not so much there.

There's a really hot tweet out bashing the campaign. It goes like this: "Changing your profile picture to a cartoon to prevent child abuse is like changing your avatar to a treadmill to prevent obesity."

This is only half true if you do nothing about it.

Another goes like this: "I don't see how changing my profile picture will end child abuse by December 6."

You know, I never really thought that was the point.

And no, I don't believe child abuse will end on Monday when everyone switches their profile pictures back to normal. That's unreasonable, Utopian, and far-fetched. I don't think anyone in their right mind believes this.

But there are people who believe that they have solutions that will help reduce child abuse.

Forbes Magazine had an article called "The Economics of Child Abuse" and gives insights on what could be done to reduce child abuse. It was written by an economist from the Ludwig Von Mises Institute (the same institute I am a part of); as an Assistant Professor at Rhodes College he holds stronger Austrian economics views than I do. His article will prove to be challenging to those with conservative and liberal views.

Here's another one from a different author. It may be more challenging than the first article.

Hmmm....now if an activism campaign like this is so successful, when will an activism campaign exposing Federal Reserve mischief be as successful?

Video: 11 Reasons to Vote For Democrats

Unfortunately, I found this video post-election.

Video: Social Security Scam Robs Elderly By Convincing Them They Are Dead

Talk about sticking it to the elderly. Who is afraid of a default on social security when there are people in the world scamming old people like this?

(For those who don't know, The Onion is a satirical news site)

Video: '9/11 Conspiracy Theories Ridiculous' - Al Qaeda

It's been a while seen I've looked into the so-called 9/11 truth movement - 2007 to be exact. As of right now, I'm not convinced of what this movement argues: that 9/11 was an inside job.

What you must say - in order for me to believe that "individuals within the United States government may have been either responsible for or knowingly complicit in the September 11 attacks" as Wikipedia puts it - or rather what you must do is define what you mean by "inside job." If you mean that the Bush administration coordinated the entire thing, then I'm not on your side. However, if you mean that foreign policy as advocated by Washington insiders lead to the events on September 11th, 2001, then sure, I'm on your side. I'm a big believer in blowback; I'm not big on.....

Truth is always important and in all ages. But right now, there's enough evidence that government corruption exists and has been existing for some time now. I can sleep at night not accepting the truth of 9/11. Any explanation for 9/11 is a bad one (if product of foreign policy, then bad; if product of Bush Administration, then it's still bad), and the resolution of contradictory explanations and accounts is not top priority right now.

...Oh yea...The Onion produced a classic in the above video. "How would you like it if you spent two months sleeping in a mountain cave, sleeping on rocks, planning something very special only to have someone take the credit from you?"

August 2011 Update:

I find the 9/11 truth movement more credible now. Better late than never.

H.L. Mencken on Democracy

"Democracy is a form of worship. It is the worship of jackals by jackasses." H.L. Mencken, Quotation taken from Walter Williams' Website

Overdose: The Next Financial Crisis (Film)

According to the Facebook Fan Page for the Movie, "Overdose is the story about the greatest economic crisis of our age - the one that awaits us."

Anarchy and Christianity

Somehow I keep on finding these great product descriptions that are worth mentioning. This latest one is from the back cover of Anarchy and Christianity:

"Jacques Ellul blends politics, theology, history, and exposition in this analysis of the relationship between political anarchy and biblical faith. On the one hand, suggests Ellul, anarchists need to understand that much of their criticism of Christianity applies only to the form of religion that developed, not to biblical faith. Christians, on the other hand, need to look at the biblical texts and not reject anarchy as a political option, for it seems closest to biblical thinking."(Italics added)

The notion that anarchy is closest to biblical thinking has been reiterated and expounded upon in the 2001 essay Biblical Anarchism by Stephen W. Carson. I thoroughly recommend it. In fact, one should listen to this brief 12-minute MP3 (The Biblical Prophet: He Told It Like It Is by the late Robert LeFevre) before reading the essay to get a good understanding of where Carson is coming from.

J.R. Hummel on The Death of the Welfare State

"What will ultimately kill the welfare State is that its centerpiece, government-provided social insurance, is simultaneously above reproach and beyond salvation." Jeffrey Rogers Hummel, Why Default on The U.S. Treasuries is Likely

J.R. Hummel on "Pay-As-You-Go"

"Even conceding that federal taxes might rise rapidly enough to a level noticeably higher than during World War II overlooks an important consideration: All the social democracies are facing similar fiscal dilemmas at almost the same time. Pay-as-you go social insurance is just not sustainable over the long run, despite the higher tax rates in other welfare States." Jeffrey Rogers Hummel, Why a Default on the U.S. Treasuries is Likely

Video:The BLOWBACK SYNDROME: Oil Wars and Overreach

According to Merriam-Webster blowback is:

an unforeseen and unwanted effect, result, or set of repercussions

Ron Paul on Money and Our Economy

"To reclaim our dollar and our economy, Americans must oppose central banking per se. Fiat currencies cannot be “reformed” or “managed.” They are fundamentally subject to ruinous debasement courtesy of the political and economic ruling class. History shows that this is true in all nations at all times." Ron Paul, The World Shorts the Dollar

To listen to the entire article of which this passage was excerpted from, click here.

Hennacy on Anarchism

"Oh judge! Your damn laws! The good people don't need them, and the bad people don't obey them." Ammon Hennacy

Thomas Woods on Bipartisanship

"It's not always easy these days to tell which of our two major political parties is the Stupid Party and which the Evil Party. But it remains true, as a conservative wag once said, that from time to time the parties collaborate on something that's both stupid and evil and call it bipartisanship." Thomas Woods, Why I am a Catholic Libertarian

Video: Quantitative Easing Explained

This video is spreading like wildfire! Watch it and see why!

An excerpt from this brilliant conversation:

Man Creature: The deflation is when the prices of the things we buy go down?
Woman Creature: Isn't this good? Doesn't this mean the people can buy more of the stuff?
MC: Yes, but the Fed said this was bad. Especially during the recession.
WC: So they think that during the recession, when the people have less money to buy the stuff, they think its bad that the prices go down?
MC: Yes, the Fed would rather have the inflation.
WC: So why does the Fed think we have the deflation?
MC: Because the CPI said so.
WC: But aren't the food prices higher than a year ago?
MC: Yes.
WC: Aren't the gas prices higher than a year ago?
MC: Yes.
WC: Aren't the health care costs higher than a year ago?
MC: Yes.
WC: Aren't the tuition prices higher than a year ago?
MC: Yes.
WC: Aren't the taxes higher than a year ago?
MC: Yes.
WC: Aren't the subway fares higher than a year ago?
MC: Yes.
WC: Aren't the stock prices higher than a year ago?
MC: Yes.
WC: Aren't the bond prices higher than a year ago?
MC: Yes.
WC: So what is deflating right now?
MC: The only thing that is deflating, that I can see, is the Fed's credibility.

Thomas Sowell on Congressional 'Gridlock'

The party not in power always complains that they "won't be able to get anything done" because of so-called 'grid-lock'. This has been the fear of Democrats pre-November elections and after; they fear that the "Party of No" will block everything the President and the Democratic party want to do. (Who says these are good ideas anyway?)

But, as Thomas Sowell notes, gridlock is what prevents the worst possible bills from coming into existence. Well, except for Obamacare. You know, the bill that regulates things that has absolutely nothing to do with health care at all (I'm thinking of the regulation on gold. Why Gold? Why in a health care bill?)

Other conservative commentators have noted that our "founders" did not want an "efficient" government. They wanted a government with a little gridlock so that government could not rapidly expand. Nevertheless, pundits complain.

Thomas Sowell gives a history lesson on Congressional 'Gridlock'. Read on.

Alan Greenspan on Supply & Demand Applied to Money

"But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the good purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion." Alan Greenspan, Gold and Economic Freedom

Alan Greenspan on the Welfare State

From his essay, "Gold and Economic Freedom" (1967)

"Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support the wide variety of welfare schemes. A substantial part of the confiscation is affected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale." ~Alan Greenspan

Rothbard Thinks Social Security is a Ponzi Scheme, Too

Murray Rothbard is sounding a lot like Dan "The-Politicians-Have-Already-Spent-The-Money" Mitchell:

Thus, most people think that the Social Security Administration takes their premiums and accumulates it, perhaps by sound investment, and then "pays back" the "insured" citizen when he turns 65. Nothing could be further from the truth. There is no insurance and there is no "fund," as there indeed must be in any system of private insurance. The federal government simply takes the Social Security "premiums" (taxes) of the young person, spends them in the general expenditures of the Treasury, and then, when the person turns 65, taxes someone else to pay the "insurance benefit." Social Security, perhaps the most revered institution in the American polity, is also the greatest single racket. It's simply a giant Ponzi scheme controlled by the federal government. But this reality is masked by the Social Security Administration's purchase of government bonds, the Treasury then spending these funds on whatever it wishes. ~Repudiating the National Debt

Rothbard on Hamilton's "Debt as National Blessing" Argument

"Contrary to Alexander Hamilton, who spoke for a small but powerful clique of New York and Philadelphia public creditors, the national debt is not a "national blessing." The annual government deficit, plus the annual interest payment that keeps rising as the total debt accumulates, increasingly channels scarce and precious private savings into wasteful government boondoggles, which "crowd out" productive investments." Murray Rothbard, Repudiating the National Debt

Video: Reversal Tuesday, jobs, Fed critics, Bernanke, SchiffRadio.com

Despite the fact that last week, when the world received news that the Federal Reserve would be rejecting sound economic sense (for the umpteenth time) and begin QE2 (or the second dose of Quantitative Easing) to stimulate the economy, it is great to know that the world is waking up to the disaster of Federal Reserve monetary policy. Japan, China, Germany, and a host of other leaders, and even critics within the Federal Reserve itself, are against the new injection of money into the economy - and rightly so!

In this latest video by Peter Schiff, he criticizes the Fed and humorously points out their only solution to crises: inflate a burst bubble by printing up more money and lowering interest rates. Schiff addresses the nonsense:

Didn't we just blow two bubbles? According to Ben Bernanke we now need a new stock market bubble to cure the recession caused by the housing bubble which was created because the Fed tried to cure the recession caused by the bursting of the previous stock market bubble. So is this it? Is this all they know? Serial bubble blowing forever creating bubbles?

Because people within the Fed are distancing themselves from Ben Bernanke, I must say that the genius behind this new plan is looking lonely in his decision, and he is looking quite clueless. But the world isn't. The other good news is that concerns about inflation may bring a rise to new gold standard. This is a step in the right direction. Next, we Austrians hope, 100 percent reserve Banking.

Video: Ben Bernanke was Wrong

Think of this video as "contra-Peter-Schiff."

Size (Of the Government) Matters

When it comes to the size of government, smaller is better: better for the economy; better for the taxpayer; better for freedom.

What politicians decide will be the size and scope of the government is of great importance to our economic recovery. It would have helped two years ago—when Obama first got into office—if we had discussions about what to cut. But since we didn’t we are now more in debt because of government deficit financing and other big government ventures.

If we shrunk the size of the government, which means unproductive jobs—and all government jobs are unproductive because they drain the private sector—are lost, labor will be free to pursue productive jobs in the private-sector. Moreover, the taxpayer would not be on the hook for the excessive benefits government workers receive that have no parallel in the private sector.

The Cato Institute has been very helpful in outlining which Departments—yes whole departments—of the U.S. Government to cut. They proposed 15 different departments that could be cut in a very short document. This short work is important because Democrats always stick the same question to Republicans, "Well, what would you cut?", as sort of a defeater for Republicans; and when they can't, and usually don't answer, they get big Democratic eggs on their faces (The non-answers, of course, don't justify the persistence of Democrats keeping projects like Social Security and Medicare publicly-funded; nor does it justify expanding the size and scope of government). When Republicans do answer, it is usually something small; something that would hardly fix anything. (I am reminded of the response a few weeks ago that they will cut spending to 2008 levels, as if that is hardly enough!)

If I were a Republican, I'd begin where everyone is criticizing me at: Defense Spending. That means immediately ending the wars, closing the 100+ overseas bases, and, in a Jeffersonian move, shrinking the size of the military as well. Then I'd move on to privatizing Social Security and Medicare. As for cutting out American's unemployment insurance, I would not. Unemployment insurance is just a fraction of the budget. It can stay for a while.

I'd also cut those 15 departments that the Cato Institute recommended. And while many people will hurt short term, because of the release of the thousands of government and military employees, overall the economy will get better just like it did after World War II ended. For those who don't know, the Great Depression ended because government cut spending, and the year after we had the most productive year in all of U.S. history.

The guys at Cato also have produced a book called “Downsizing Government” that is now available on their website and is free for a limited time only. Also, they have a website of the same name, which serves as a "department-by-department guide to cutting the federal government's budget," that I highly recommend.

It is worthy to note that "Big Government" in itself is not the cause of our current economic downturn. However, it is making the recovery a lot harder because resources are not being freed to go where the private sector would have otherwise put them. The culprit of the current economic crisis is Federal Reserve System and our fractional-reserve banking system.

Big Government can, however, bankrupt us, which is why many economists in the Austrian School (and some outside, I guess) believe that a "Great Default" is coming.

Gordon on Economic Growth in Light of Theory

Excerpted from the Mises Review of Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse:

"The basics of Austrian cycle theory fall readily into place once one considers a fundamental point: the economy can grow only by producing more goods. An expansion of the money supply does not suffice. Efforts to get something for nothing, by the government's deficit spending or by an expansion of the money supply, cannot produce lasting prosperity." David Gordon

The Necessity of Public Support of Free-Markets

Excerpted from the Mises Review of Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse:

"If the public does not understand the economics of depression, there is little hope that we can avoid disastrous government policies. Unless the free market receives sufficient popular support, our economic future is bleak." David Gordon

Peter Schiff Keeps it Real on the Republican Win

Book: The Revolution That Wasn't

This passage is amazing - and it's only a book description:

"It is my contention that conservatives who think the Republican Party is the party of conservatism are mistaken, Christians who think the Republican Party is the party of God are deceived, and anyone who thinks the Republican Party is the lesser of two evils is ignorant" -Laurence M. Vance, The Revolution That Wasn't

With descriptions like these, I wonder what is on the inside!

Video: 3 Reasons This Election Didn't Change A Thing

This video is absolutely essential for the Tea-Party movement and indeed all Americans to see and understand.

My Three Reasons for Believing This Election Won't Change Anything

1. No one is talking about the needless and titanic American war-machine in the Middle East.

2. The Republican Party still is the party of war and unnecessary defense spending.

3. Oh, and the economy is still in the toilet and the Republicans don't have a clue as to how to let the market correct it.

(Notice I didn't say the Republicans didn't know how to "fix" it - as if the Republicans were a bunch of Mr. Fix Its with tools in hand, smiles on faces, and a blueprint to lay down the groundwork for the economy. No. If I said that, that would make them central planners.)

Humor: Is Obama A Keynesian? Rally For Sanity, 10/30/10

Listen to the first lady. She thinks Keynes is a country and people from Keynes are called Kuh-knee-shan. Sorry lady. Its pronounced Kanes-zi-en.

P.J. O'Rourke on Democrats

"Democrats hate Democrats most of all. Witness the policies that Democrats have inflicted on their core constituencies, resulting in vile schools, lawless slums, economic stagnation, and social immobility. Democrats will do anything to make sure that Democratic voters stay helpless and hopeless enough to vote for Democrats. [emphasis mine]" They Hate Our Guts

What We Saw at the Stewart-Colbert Rally to Restore Sanity

Sanity restored?

Advice to Tea Partiers

John Samples, a speaker in this video and author of The Struggle to Limit Government, has made his latest book available for free (or at least the Cato Institute has). To download the new book click here.

The Madness of Barack Obama

ReasonTV on the Return of Obushma! Oh Wait. He never left!

Rothbard on the National Debt

"The annual government deficit, plus the annual interest payment that keeps rising as the total debt accumulates, increasingly channels scarce and precious private savings into wasteful government boondoggles, which "crowd out" productive investments.

Establishment economists, including Reaganomists, cleverly fudge the issue by arbitrarily labeling virtually all government spending as "investments," making it sound as if everything is fine and dandy because savings are being productively "invested."

In reality, however, government spending only qualifies as "investment" in an Orwellian sense; government actually spends on behalf of the "consumer goods" and desires of bureaucrats, politicians, and their dependent client groups. Government spending, therefore, rather than being "investment," is consumer spending of a peculiarly wasteful and unproductive sort, since it is indulged not by producers but by a parasitic class that is living off, and increasingly weakening, the productive private sector. Thus, we see that statistics are not in the least "scientific" or "valuefree"; how data are classified—whether, for example, government spending is "consumption" or "investment"—depends upon the political philosophy and insights of the classifier." Murray Rothbard, Repudiating the National Debt

Jon Stewart's speech at the Rally For Sanity.

Peter Schiff on CNBC Fast Money 10/25/10

“We are the world's biggest debtor nation and we're giving economic advice to the creditor nations… It's like an 'F' student giving advice to honors students on how to improve their grades.”

Peter Schiff gives all kinds of important economic analysis. Check out his columns and his brand new radio show and archived internet broadcasts!

Relief for Young Entrepreneurs

Remember my "Killing Kid Start Ups" post? Well, there is good news for young entrepreneurs. According to Child Labor Bulletin 102:

Young entrepreneurs who cut their neighbor’s lawn or perform babysitting on a casual basis for farmers are not covered under the FLSA.

Thank God!

Now if we could only get rid of those "compulsory school attendance" laws! (Big emphasis on compulsory) Hey, at least they don't pretend to not be authoritarian.

Vindicated! How Ron Paul's Life Proves My Point

No later than two days--TWO DAYS--after I posted my last blog, which is the latest in my Libertarian Views of Law series, I came along a passage in End the FED that proves my point about the unnecessariness of regulation in starting and running a business:

"My first job, and that of my brothers, was to assist my dad in a small dairy run out of our basement. Even at the age of five, the incentive system was instilled in me. Our job was to make sure all the glass bottles, which had been hand washed, were clean. It was bad for business if a customer saw a black spot in the bottom of a milk bottle. For each dirty bottle we found as we removed them from the conveyor belt and placed them into the wooden case, we were rewarded a penny. It didn't take long for us to know when a certain uncle was washing the bottles, since more dirty bottles were found on those days." End the Fed, Chapter 4 "My Intellectual Influences", p.33-34

Paul's anecdote touches on topics that I didn't think about at the time, and it agrees with various points I made in my Suzy Q argument. "It was bad for business if a customer saw a black spot" touches on the idea that cleanliness is necessary to expect transactions to occur. Dirtiness, in contrast, is repugnant to many customers and is an instant transaction-stopper! In fact, no transaction would come into existence in the first place.

Notice that this idea is also an extension, or better yet application, of the Golden Rule. Doing unto others in this case would be preparing a clean home (as in the Suzy Q story) or having spotless milk bottles. Who would really think they can sell milk with grime on the sides, spots in the inside, and cracks near the lid?

Also noteworthy is the fact that this business was run out of their basement. There is a surprising connection between Suzy Q's hairstyling business run out of her home and the Paul family's business run out their home. It is bootstrap capitalism: "a person or group of persons collaborated and started a business and within years it was successful."

The current laws under the U.S. Fair Labor Act actually allows "work in businesses owned by their parents (except in mining, manufacturing or hazardous jobs)", so the young Ron Paul and our young Suzy Q would not be in jeopardy of losing their right to earn a living. But many other kids are in jeopardy of, if not prohibited from, losing their right to earn a living. The current law "sets 14 as the minimum age for most non-agricultural work."

This also prompts me to admit that my title "Why You Can't Legally Braid Your Neighbor's Hair" is slightly a misnomer, slightly. A mother can braid her child's hair; a child can braid her friend's hair; but operate a Hair Salon out of your home? Oh, you can't do that. That would be against the law!

Still, what if the only "non-agricultural work" is the only work in town? Should kids under 14 have to be deprived of their right to work? Furthermore, what if they aren't skilled at agricultural work, but very skilled at "non-agricultural work" should they be denied the right to make money doing what they are skilled at? And how can they learn?

Paul touches on something that I was aware of but failed to illustrate: working at age five gave him incentive; and I'd add that working young gives a sense of dignity as well. How can kids get work experience needed for greater, more skill-specific jobs, if they can't even get experience in less specialized jobs? They are legally barred from doing so.

The funny thing is that I was just conjecturing about the libertarian/biblical application of ethics when I wrote the previous post. I never actually had any real examples. In fact, I didn't even read the laws (until today). Then I came across the passage in "End the Fed", and I jumped (not literally) when I saw it.

From these last few Libertarian Views of Law posts, the observant reader will be able to make valid inferences about the law, and the humorous paternalism guiding them all: the grocery store laws, the agricultural laws, and every other law enforced by the State.