Category Archives: Debt

UPDATED: No Tapering Off For Fed Tapeworm (GOLD SOARS)

Debt, Economy, Federal Reserve Bank, Inflation, Ron Paul

The markets like that the Federal Reserve will not follow through on its promise to stop buying government bonds at a pace of $85 billion a month. But what right does the Fed have to steal percentages off our income via this form of inflation? asks the Only Moral Congressman to have served in recent years. Why punish savers, especially poor pensioners, by eroding their purchasing power?

Ron Paul predicts a collapse of the bond market and the further weakening of the dollar.

As if Quantitative Easing were not deceptive enough a term, now we have “tapering.”

The money mafia had been “easing” to the tune of $85 billion in monthly bond purchases. If they’ve admitted to this much, you can be sure it’s much more.

The consequence of Ben Bernanke’s non-stop monetary stimulus, of course, is a rise in prices, stocks included. Homes too. It should be obvious too that an increase in the price of an item is not the same as an appreciation in it value.

UPDATE: “Gold prices soar after Fed fails to taper stimulus”:

… gold prices are suddenly soaring, following the Federal Open Market Committee saying Wednesday it will continue its push to buy $85 billion of debt securities a month.
Investors poured into gold between late 2008 and mid 2011 as the Fed injected trillions of dollars into the economy. Gold investors speculated the government’s intervention and stimulus would spark inflation, which is bullish for the yellow metal.
Gold set a record of $1,921 an ounce on Sept. 6, 2011, and jumped more than 70% between December 2008 and June 2011, Bloomberg News says. But gold prices have slipped this year as investors expected the Fed to pull back on stimulus.

The CBOafs On Delaying The individual Insurance Mandate

Barack Obama, Debt, Healthcare

The CBOafs (The Congressional Budget Oafs) always grossly underestimate the costs to the private, productive economy of government programs. This is their mandate.

“On July 17, 2013, the House of Representatives passed ‘H.R. 2668: An act to delay the application of the individual health insurance mandate, to delay the application of the employer health insurance mandate, and for other purposes.'”

H.R. 2668 would delay the implementation of several provisions related to the expansion of health insurance coverage established by the Affordable Care Act (ACA, Public Law 111-148 and the health care provisions of P.L. 111-152). Title I of H.R. 2668 would delay for one year the requirement that most residents of the United States have health insurance coverage by January 1, 2014. Title I also would shift by one year the schedule of penalties for people who do not comply with that mandate. In addition, title II of the legislation would delay for one year the imposition of penalties for certain large employers that do not offer health insurance coverage that meets the affordability standard defined in the ACA and two reporting requirements for certain large employers and health insurance coverage providers.

Just imagine the real savings generated by any delay of Health-Scare, if,

They CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting H.R. 2668 would reduce federal deficits by roughly $36 billion over the 2014-2018 period and by roughly $35 billion over the 2014-20 23 period. Those budgetary effects would result entirely from title I. Title II would not affect direct spending or revenues since it essentially codifies changes announced by the Administration and subsequently incorporated into CBO’s baseline.

About a repeal of Obamacare we can only dream.

John Maynard Keynes: Where’s The Genius?! (Part 2)

Britain, Capitalism, Celebrity, Debt, Economy, Federal Reserve Bank, History, Inflation

The following is an excerpt from “John Maynard Keynes: Where’s The Genius?! (Part 2),” the conclusion of my conversation with Benn Steil. (Read part 1. ) Dr. Steil is senior fellow and director of international economics at the Council on Foreign Relations. His latest book is “The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order.”

ILANA MERCER: After reading a negative review of your book in The Times Literary Supplement, I decided to go cold turkey on what had been a guilty pleasure for over a decade. I did not renew my TLS subscription. The TLS had stupidly assigned the review to one Eric Rauchway, a left-coast history teacher. Rauchway would not let an argument favorable to the gold standard—yours—stand. Your case against the Bretton Woods system of “managed currencies” he turned on its head. Rauchway credited Harry Dexter White, one of Bretton Woods’ architects, with helping to lift the “cross of gold” from the shoulders of the world’s working classes. Since White was also a Soviet spy, Rauchway quickly concluded that the Soviets saved capitalism (an “unknown ideal” for a very long time). Sound money is suspect, but a Soviet spy is capitalism’s savior. How do you unpack that!?

BENN STEIL: You can’t get blood from a stone, and you can’t get logic from Rauchway’s review, just gobs of nonsense and libel (as I documented on on my blog ). The review’s title, “How the Soviets saved capitalism,” is so inane that the only explanation for it is that Rauchway, or his TLS editors, fell in love with the sheer childish cheekiness of it. It certainly bears no relation to Rauchway’s account of Bretton Woods, nor that of anyone who can actually claim to know anything about it.
Rauchway would no doubt mock the economist who wrote the following of the 19th century classical gold standard: “[t]he various currencies, which were all maintained on a stable basis in relation to gold and to one another, facilitated the easy flow of capital and of trade to an extent the full value of which we only realize now, when we are deprived of its advantages.”

Unless, that is, Rauchway knew who it was – none other than J. M. Keynes.

MERCER: We can both agree that John Maynard Keynes’ opposition to WWI and his “bitterness over the terms of the peace” were admirable. Priceless too was John Maynard Keynes description of President Woodrow Wilson as “slowminded and bewildered”; a “blind and deaf Don Quixote.” (pages 70-71) On the other hand, also quite admirable was the following unflattering description of Keynes’ “General Theory of Employment, Interest and Money.” It comes courtesy not of Keynes, but of our author: “It is only slightly outlandish to liken the book to the Bible: powerful in its message, full of memorable, mellifluous passages; at times obscure, tedious, tendentious, and contradictory; a work of passion driven by intuition, with tenuous logic and observation offered as placeholders until disciples could be summoned to supply the proofs.” (page 88) Have Keynes’ disciples really delivered? It would appear that the Keynesian faithful have foisted on free-market capitalists an unfalsifiable theory. Evidence that contradicts it, Keynesian kooks enlist as evidence for the correctness of their theory.

STEIL: Yes, if the economy sinks, then Paul Krugman was right about the need for massive stimulus; if it recovers in the face of plunging deficits, from spending cuts and tax increases, then Krugman was right that deficits were not a problem. Heads he wins, tails you lose.

MERCER: Keynes assessed Karl Marx’s “economic value” as “nil… apart from occasional flashes of insight.” (page 87) I would venture that in the United States, Marxism has been far less destructive to free-market capitalism than Keynesianism. Marxists honestly wish for capitalism’s demise and say as much. We can fight such an enemy. Conversely, Keynesians have redefined capitalism and banished our definition therefrom. The Keynesians then proceeded to cripple capitalism so as to ostensibly save it. Positively Orwellian.

STEIL:

The conclusion of the Steil-Mercer conversation about Keynes is now on WND. Read “John Maynard Keynes: Where’s The Genius?! (Part 2).”

If you’d like to feature this column, WND’s longest-standing, exclusive paleolibertarian column, in or on your publication (paper or pixels), contact ilana@ilanamercer.com.

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UPDATED: John Maynard Keynes: Where’s The Genius? (Part 1)

Capitalism, Celebrity, Classical Liberalism, Communism, Debt, Economy, History, Inflation, Intellectualism, Left-Liberalism And Progressivisim, libertarianism, Media

“John Maynard Keynes: Where’s The Genius?! (Part 1)” is the first part of my conversation with Benn Steil. Dr. Steil is senior fellow and director of international economics at the Council on Foreign Relations. His latest book is “The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order”:

1) ILANA MERCER: Congratulations on a beautifully written book, so carefully researched, with both archival and secondary material. Followers of the Austrian School of economics, as I believe we both are, have a reflexive disdain for John Maynard Keynes. Nevertheless, the portrait you drew of him was powerful and persuasive. For example, it is easy to sympathize with Keynes’ frustration with the American mind—so prosaic and anti-intellectual—during the critical Bretton-Woods negotiations. There is much to admire too about Keynes’ “unrelenting nationalism.” I had never before thought of Keynes as an English patriot, first. You, a Hayekian thinker, managed to humanize J. M. Keynes. How did that happen?

BENN STEIL: Thanks Ilana. I’m a great admirer of Hayek’s writing, as you know, but I’ve never been one to wear the Austrian (or any other) label. More importantly, “The Battle of Bretton Woods” is in large measure a parallel biography of Keynes and Harry Dexter White, and no biographer succeeds in engaging readers of any stripe without empathy towards his subjects. In the case of Keynes, I may not sympathize with his economics in the way that his greatest biographer, Robert Skidelsky, does, but I found it not in the least bit difficult to admire him as a gifted public intellectual and to warm to him as a human being, with all his obvious flaws and foibles. One aspect of Keynes that I tried to bring out is how fundamental his English upbringing and nationalism were to shaping both his economic and political thinking. He was a defective diplomat, no doubt, but he took to the role with ease and enthusiasm.

2) MERCER: My mistake. You were awarded the 2010 Hayek Book Prize, so I presumed you favored Austrian economics. But back to Keynes. As you reveal, he “never bothered with a [doctorate]; he hadn’t even a degree in economics,” and “he formally studied economics for a brief period” only. (page 61) His election to “a life fellowship at Kings College, Cambridge, at twenty-six” seemed to rely on familial membership in Britain’s intellectual peerage. Yet, as you contend, he amalgamated the qualities of “mathematician, historian, statesman, philosopher” “with a genius that no economist has ever matched.” (page 62) Guide the perplexed, please.

STEIL: It’s important to understand that in Keynes’s day, …”

Read the rest of the conversation, “John Maynard Keynes: Where’s The Genius?! (Part 1),” on WND. Stay tuned for the conclusion, next week, of the Steil-Mercer conversation about Keynes.

If you’d like to feature this column, WND’s longest-standing, exclusive paleolibertarian column, in or on your publication (paper or pixels), contact ilana@ilanamercer.com.

JOIN THE CONVERSATION:

• At the WND Comments Section. Scroll down and “Say it.”

• On my Facebook page.

• By clicking to “Like,” “Tweet” and “Share” this week’s “Return To Reason” column.

UPDATE (8/15): I forewarned Benn Steil, who is the nicest gentleman—and, unlike J. M. Keynes, a jolly good sport—that our readers are hard-core. If only these readers used respectful language, but there is nothing I can do about the conduct of others.

It has to be obvious from my questions to Dr. Steil (part 2 is still to come) that I have the utmost respect for his scholarship and that I enjoyed what was an impressively researched, beautifully written book. I am not one of those tinny ideologues who’d rather miss out on an important intellectual contribution just because it doesn’t comport 100% with my philosophy. I’m too curious for that.

Benn Steil and I began communicating when I penned an irate blog about a negative review of his book in The Times Literary Supplement.