Category Archives: Economy

UPDATED: Thought Experiment in Statism (Economic Apocalypse?)

Debt, Economy, Government, Political Economy, Private Property, Taxation, The State

Treasury Secretary Tim Geithner told FoxNews anchor Chris Wallace repeatedly that to avoid the debt precipice, “tax reform that would generate revenue” [“now there’s a nice word for taxes”] must be considered. The “revenue we’re going to get through tax reform”: that’s how Geithner put it second time around, during the Sunday interview.

Let us assume, for a moment (as Secretary Geithner expects us to), that the solution to the debt is paying the people who incurred the debt more money; that the solution to the debt is seizing private property (through taxes) and placing it in communal ownership (state bureaucracies), where resources are never allocated efficiently and are always squandered.

Assuming all the above, do you have any guarantees that the money stuffed down the maw of the Federal Frankenstein will actually go to pay down the debt? Of course you don’t. Of course it won’t.

Money extracted from us by the Feds is fungible. Any additional revenues the Feds receive via taxes they will use to plunge private property owners deeper into debt.

UPDATE (July 25): The notion that not raising the debt-ceiling must necessarily result in the US defaulting on its debt is nonsensical. In so asserting, Tiny Tim is talking tripe. The US Treasury takes in enough loot to pay down the interest on the debt as well as a portion of the principal.

Meanwhile Secretary of State Hillary Clinton was upbeat about the US’s economic prospects. In a speech to the U.S. Chamber of Commerce in Hong Kong, Clinton framed “the political wrangling in Washington” over the debt as a function of America’s “open and democratic society.”

Clever. I noticed that CNN, in its reporting today, had taken the same tack: Markets across the world were worried over political wrangling in the US, rather than the debt. It was essential for the Demopublicans to arrive at an agreement for markets’ sake. The fact that there is no money in the coffers: that’s of no concern. Why, the awful Gloria Borges, a banal mind if ever there was one, ventured that legislation ought to be passed to automate the raising of the debt ceiling so that “We don’t have to go through this again.”

Dead-End Debt Debate

Debt, Democrats, Economy, Federal Reserve Bank, Ilana On Radio & TV, Individual Rights, Inflation

The following is from “Dead-End Debt Debate,” now on WND.COM:

“The economy is in advanced stages of decrepitude due to debt: public and private. Nevertheless, a just-released ABC News/Washington Post poll revealed that 58 percent of self-identified Republicans believe that if their government doesn’t continue to borrow apace, things will get worse.

In legislative language, our wily political pitch men have been granted license to lift the debt ceiling! Quick-fix quacks in both chambers can now proceed to borrow by further inflating the country’s fiat money supply.

Duly, two broad plans have been hatched. These schemes are aimed at saving financial face, more than slashing spending or trimming America’s gargantuan government. To listen to this school of scoundrels – represented by statists from different corners of the political boxing ring, from Fox News’ Stuart Varney to MSNBC’s Rachel Maddow – not to raise the debt ceiling is plain unpatriotic. … Needless to say that, “Cross-party consensus results when political expediency trumps principle.” …

The complete column is “Dead-End Debt Debate,” now on WND.COM:

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Upcoming Mercer media appearances are here. I’ll be talking with Chuck Wilder of “Talk Back” tomorrow, Friday, July 22, from 12:40PM until 1:00PM Pacific

Dirty Dollars

Debt, Economy, Europe, Federal Reserve Bank, Inflation

Putin protests the funny-money plague the US has unleashed on the world: “Unites States act as if they were ‘hooligans’ because they ‘flood’ the entire world with dollars, Russian prime minister, Vladimir Putin, declared, attacking the liquidity QE2 program launched by the Federal Reserve using fresh printed money.”

They start the money printing presses and throw dollars throughout the world in order to solve their immediate responsibilities. They say monopolies are bad but only if they are foreign – their monopolies are perfect. So they use their monopoly to print money until the whole world is flooded” Putin explained.

Too true and not so funny.

Darker Clouds On the Horizon

Affirmative Action, Barack Obama, Economy, Race, Taxation, Welfare

The dynamics Pat Buchanan describes in his latest column, “Black America vs. Obama?,” might very well be borne out: African-Americans will likely turn on the black president who was forced to slash the oink sector in which they are overrepresented.

Though 10 percent of the U.S. civilian labor force, African-Americans are 18 percent of U.S. government workers. They are 25 percent of the employees at Treasury and Veterans Affairs, 31 percent of the State Department, 37 percent of Department of Education employees and 38 percent of Housing and Urban Development. They are 42 percent of the Equal Employment Opportunity Commission and Pension Benefit Guaranty Corp., 55 percent of the employees at the Government Printing Office and 82 percent at the Court Services and Offender Supervision Agency.
When the Obama administration suggested shutting down Fannie Mae and Freddie Mac, the mortgage giants whose losses of $150 billion have had to be made up by taxpayers, The Washington Post warned, in a story headlined, “Winding Down Fannie and Freddie Could Put Minority Careers at Risk,” that 44 percent of Fannie employees and 50 percent of Freddie’s were persons of color.
In Washington, D.C., we have also seen the result of government cuts on African-American leaders who had to approve those cuts.
When Mayor Adrian Fenty stood behind schools chancellor Michelle Rhee, who fired hundreds of teachers, most of them African-American, the wards east of the Anacostia cut him dead. In 2010, Fenty was thrown out by many of the black voters who elected him

Is this is a welcome development? Hardly. (And I fully understand that Mr. Buchanan is hardly making such a claim.)

While coalitions of the aggrieved are good, where here is there a coalition for freedom-loving Americans to pursue? Fifty percent or so of Americans—those who pay the taxes—want the excesses of the oink sector curtailed. The African-American cohort Buchanan cites wants these programs to carry on in perpetuity.

It’s possible that Mr. Buchanan is simply warning that African-Americans are just going to get angrier and angrier.