Category Archives: Debt

UPDATED: Economic Apocalypse Now

America, Constitution, Debt, Democrats, Economy, Propaganda, Republicans, Ron Paul

The following is from “Economic Apocalypse Now,” my latest WND.COM column:

“… On reflection, the U.S. Treasury takes in enough loot to pay down the interest on the debt as well as a portion of the principal. Matching federal spending with federal revenue: what a concept! And what a tonic to our moribund economy that would be!

To the soul of the subject: The engorged organisms (Anthony D. Weiner is a sample) that currently control the economy from D.C. can discharge their responsibility to creditors without authorizing more borrowing. To do so, however, they will have to cease their many unconstitutional endeavors and break the promiscuous promises they’ve made to certain voters at the expense of the vassals, out of whose hides these ‘promises’ are carved.

As it stands, Republicans – and a few Democrats, one of whom has even cosponsored an amendment to cap federal spending – have done no more than perform a budgetary Bonnie and Clyde: If Democrats want to continue the heist and run deficits and debts to eternity, they will need to promise – “nudge-nudge, nudge-nudge; know what I mean? know what I mean?” – budget cuts, preferably in the trillions. Or introduce, not necessarily pass, a balanced-budget amendment….”

Read more: “Economic Apocalypse Now.”

My new book, Into the Cannibal’s Pot: Lessons for America from Post-Apartheid South Africa, is now available from Amazon. A Kindle version should be on offer by next week.

UPDATE (June 5): Rand Paul:

“On the Democrat side, we have a proposal to cut about $5 billion to $6 billion for the rest of the year. To put that in perspective, we borrow $4 billion a day. So the other side is offering up cuts equal to one day’s borrowing.…Now, on our side of the aisle, I think we have done more, the cuts are more significant, but they also pale in comparison to the problem. If we were to adopt the president’s approach, we would have a $1.65 trillion deficit in one year. If we were to adopt our approach, we’re going to have a $1.55 trillion deficit in one year. I think both approaches do not significantly alter or delay the crisis that’s coming.…I recently proposed $500 billion in cuts, and when I went home and spoke to the people of my state, spoke to those from the Tea Party, they said $500 billion is not enough. And they’re right. $500 billion is a third of one year’s problem. Up here that’s way too bold, but it’s not even enough.” —Sen. Rand Paul (R-Ky.) on the Senate floor, March 9, 2011

Pay attention to how the same self-anointed policemen of libertarianism—the tinny ideologues who’ve never reflected authentically American libertarianism—have taken it upon themselves to purge Rand Paul.

On the positive side, it seems like Beltway libertarians such as the author of this fair-minded piece have learned from the mistake they made when they reflexively panned Rand’s father, Ron Paul.

UPDATED: An Inflationary Flight From Truth

Business, Conspiracy, Debt, English, Individualism Vs. Collectivism, Inflation, Intelligence, Political Economy, Propaganda, The State

An observant manager at a social event commented recently about my husband and me: “You both use language very precisely.” The man was bright alright, but he was not necessarily flattering us, since my spouse (PhD, dubbed “guru” in his field) is constantly pelted with admonitions: Be vaguer when zeroing in on a problem—solve it to the group’s advantage, but don’t dare speak openly of incompetence. However obvious, credit the collective, submerge your achievements, ditch the “I” pronoun in favor of the “we.” (And how, pray tell, does one solve problems without removing the obstacles to their resolution? Easy: the able do double shifts to cover for the deadwood.)

The private sector is silhouetted by the state–and infected with the same collectivist philosophy, which aims to maintain the status quo, abolish the deference to ability (since we are all the same, given the right nurture, right? WRONG), and never admit that some are brighter than the rest. Or if this cannot be denied, rope the better man in the service of the mediocre majority that thrives in a culture of collectivism.

To be clear, this impetus is reflexive, rather than a matter of collusion and conspiracy. With few exceptions, most people believe they benefit from state- and corporate enforced collectivism—they believe this is the right way to be, the thing to strive for. (The Bell Curve—normal distribution—will give a hint as to why this is so.)

The co-optation of language plays a large role in subverting reality. The state and its lick-spittle toadies—educrats, mediacrats, and “intellectual”—have co-opted semantics over the years; stolen our words so that the new words better serve the parallel reality they’ve manufactured.

This is serious stuff since language mediates thoughts, actions, and hence public debate and policy.

The mutation in the accepted “meaning” of the word inflation serves as a good example of the process I’ve touched upon.

“Samuel Johnson’s famous A Dictionary of the English Language, published in 1755, had just one definition for inflation,” writes the Wall Street Journal’s Justin Lahart, in “Inflation Definitions: Through the Ages”:

The state of being swelled with wind; flatulence.

Naturally, the WSJ does not anchor its historical survey of “the evolution of the dictionary definition of inflation from ‘flatulence’ to ‘rising prices'” in any philosophical framework; it certainly omits any reference to the natural laws of economics. Nevertheless, do read “Using a Dictionary to Define Inflation Can Spell Trouble”

You ought to conclude that the culture en masse is fleeing from truth.

UPDATED: Compassionate Fascist, sadly, proves my point: The official line, which he repeats, has it that inflation is a rise in prices. False! Inflation is an increase in the money supply. The general rise in prices is but a consequence of an increase in the money supply.

Steve Forbes: Johnny-Come-Lately To Gold

Debt, Economy, Elections, Federal Reserve Bank, Media, Ron Paul

The mummified media, the financial press included, called Rep. Ron Paul a lunatic when he explained again and again that “a return to the gold standard by the United States would help the nation solve a variety of economic, fiscal, and monetary ills,” created when President Richard Nixon abolished the Gold Standard.

“Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending. … With a stable currency, it is ‘much harder’ for governments to borrow excessively. … Without lax Federal Reserve System monetary policies that led to the printing of too much money, the housing bubble would not have been nearly as severe.”

You don’t say?!”

Actually, these are Steve Forbes’ words, not Paul’s. Forbes is currently singing from the Paul hymn-sheet, and it is music to the ear.

Of course, this is not to say one should embrace Paul’s political opponents, just because they’ve arrived at the correct economic conclusion, now that it’s probably too late.

Goldbugs know that gold is a necessary financial hedge in the survival on the road to serfdom.

Watch out! Gold is bad for government health. Remember Executive Order 6102? FDR, idolized by BHO and many a Republican alike—by almost all offshoots of the duopoly, in fact—forbade “the Hoarding of Gold Coin, Gold Bullion and Gold Certificates” at pains of punishment: a fine of “not more than $10,000, or “imprisoned for not more than ten years or both.”

UPDATED: Barnanke is Stealing Your Wealth by Stealth

Debt, Economy, Energy, Federal Reserve Bank, Inflation

As Terence Corcoran of Canada’s National Post puts it, “The Fed’s claim … is that all that is happening in the world economy—rising commodity prices, a falling dollar, rising bond yields, price increases in developing nations and Europe—have nothing whatever to do with the Fed’s unprecedented trillion-dollar quantitative easings and monetary expansion.”

“The Fed has a bit of a credibility problem,” concludes Corcoran. My countrymen (I’m a naturalized Canadian) are known for the understatement. Corcoran continues:

It wouldn’t be the first time in economic history that growth and employment dragged while prices -due to monetary inflation -rose. This year, U.S. consumer prices in March rose at an annual rate of 6% and were 2.7% higher than a year ago. In a recent speech, Fed vicechairman Janet Yellin called the CPI gains “transitory” inflation. Meantime, producer prices are up almost 6% year over year and import prices -thanks to a falling dollar -are up almost 10%.
Despite this evidence, the Fed sees no real inflation and is waiting to see if price increases begin showing up in “inflation expectations.”

[SNIP]

The enormous increase in the stock of money—a deliberate and destructive policy pursued by Ben Bernanke, the man with the reverse-Midas touch—is responsible for the steady rise in the prices of all commodities, crude included.

Prices are rising because mounds of paper money are printed and credit expansion policies promoted in order to fund the government’s profligacy. More fiat currency in the system means that every unit is worth less. This is the essence of inflation—it is a hidden tax, another way for government to steal your wealth by stealth.

According to the post hoc illogic of others (Bill O’Reilly and Attorney General Eric Holder, for instance), you ought to blame gas speculators, “profiteers” or foreign producers for gas prices—anyone but your government. Apparently, they believes that the price of fuel is causing prices to rise.

This topsy-turvy chain of causality should not make a lick of sense to a sane individual.

UPDATE: Herschel, on Facebook, wants to know, “who has all this new money? Certainly not the people who are suffering under high prices.”

Exactly: When money markets are flooded, the first counterfeit down payment goes into the coffers of the selected government contractors and employees. And also to all the DC hacks. It spurs artificially created demand, causing suppliers to raise prices. It’ll take time, but the new money will generate price hikes throughout the economy. By the time you and I, politically unconnected suckers that we are, experience a meager rise in money income (but not in tangible wealth), rising prices will have obliterated the tiny gain.