Truthful Accounting and the Debt Ceiling Debate

The debate over raising the $14.3-trillion debt ceiling to some higher number is what Congress will discuss and the media will report over the next 30 days. What will be missing, however, is debate about the nation's real debt burden. Our calculations show it's more than $76 trillion, consisting of Treasury securities recognized under the debt ceiling and the unfunded promises we've made to our seniors, military veterans, and federal workers. Add to that the federal guarantees for everything from coastal flood insurance to expected bailouts for Fannie, Freddie, and the too-big-to-fails, and the nation's total obligations may exceed $100 trillion.

http://www.americanthinker.com/2011/07/truthful_accounting_should_be_the_first_objective_of_any_debt_ceiling_compromise.html

News from the Daily Reckoning

US federal spending

Fiscal year 2010 (in billions of US dollars)

• Discretionary $660
• Other mandatory $416
• Net interest $197
• Medicare and Medicaid $793
• Social Security $701
• Defense Department $689

TOTAL: $3.456-trillion

Now compare that to...

US tax receipts

Fiscal year 2010 (in billions of US dollars)

• Social Security/Social insurance $865
• Corporate income $191
• Other $140
• Excise $67
• Individual income $899

TOTAL: $2.162-trillion

As you can see, there's a bit of a discrepancy there. For every dollar the government spent in 2010, it was only able to steal roughly 62 cents through taxes. The rest came from the kindness of strangers with last names like Wong and Kim. Now, why would a Wong bother lending money to the US, you ask? A better question might be for how long will Wong lend? And what happens when Wong's kindness runs out?

Thus far, the United States has incurred an impressive $14.3 trillion in public debt, "subject to limit," as they say. Put another way, that's about $46K per citizen, or $130K per taxpayer. At current rates, those figures will jump to $22.9 trillion by 2015; $70K per citizen, or almost $190k per taxpayer.

In 2007, for example, that debt stood at about 36% of America's GDP. Today, that same little monster has grown to reach 70% of GDP. All that in four years; one Olympiad! They grow up so quickly, don't they? Even so, that's some pretty gnarly spending, even by politicians' own standards.

And what do these geniuses have to show for all of their greasy- mitted stimulus spending, for their various bailout programs and phony-baloney make-work schemes? What, in other words, does a few trillion dollars worth of other people's money – some stolen, the rest begged and borrowed – buy you these days? More jobs? A rebound in the housing market? A new suit and tie? Any measure of honest, good-for-something growth? A – dare we even say the word – "recovery"?

STOP THE SPENDING NOW CONGRESS!!!!!!!!!

The efficiency of the incandescent light bulb

Filaments in [incandescent] electric lamps are not as hot as the surface of the sun, yet the light they emit is very similar. Each one emits light in the entire wavelength range visible to the human eye . . . .

Incandescent lamps are notoriously inefficient, emitting less than 10% of the input power as visible light. The problem with more efficient sources like fluorescent lamps is that their light is not a continuous spectrum, but rather a handful of individual wavelengths. The effect is to distort colors of objects illuminated by the light.

Note that this “inefficiency” of incandescent light bulbs is the source of their scorn by the environmentalist left and their effective ban by the federal government. Energy Secretary Steven Chu reveals the mentality behind the ban when he says, smugly, of a law preventing individuals from buying the light bulbs they want: “We are taking away a choice that continues to let people waste their own money.”

What is Chu ignoring when he calls the choice to buy regular bulbs a “waste”?

Well, for one thing, he’s ignoring the fact that while incandescent light bulbs are not efficient in the sense of producing as much light per unit of energy as possible, they are incredibly efficient in the sense of producing the most desirable light for our money (including our energy). There is a rarely-consulted passage of a rarely-consulted document that champions “the pursuit of happiness.” When I choose to buy an incandescent light bulb, I do so because that gets me the best light for my money—with “best” emphatically including the quality of illumination I will enjoy as I read books, talk to friends, work in the evening, etc. To our government, such considerations are irrelevant; as long as I can fit neatly into government statistics that say I’m emitting less CO2 but I’m still alive and have access to illumination, why should it matter whether I enjoy my life more or less?

The ultimate standard of efficiency (be it energy efficiency, economic efficiency, or any other form) is the individual’s life and happiness. If anyone ever tells you that something you love is “inefficient,” and the cure is to shove something you hate down your throat, then “efficiency” has become a mere rationalization for tyranny.

Political Accounting

Since most politicians—simply by their career choice—indicate a desire for power, any measure that increases power will be considered a success. If a policy increases the number of people beholden to them, then it is good as an end in itself. The ultimate conflict of interest that subverts paternalism is that government officials want power and citizens want freedom.

There is no reason to expect contemporary Leviathans to become significantly more efficient in the future. The only way to fix most government programs is to repeal the underlying law and abolish the government agency. Anything less will be little more than a future full-employment program for investigative journalists.

http://www.thefreemanonline.org/featured/political-accounting/

Worse than Reported by the MSM

Greece’s debt-to-GDP ratio is 143%. America’s is officially 97%. But the $14.3 trillion national debt, stacked up against a $14.7 trillion economy, doesn’t tell the whole story.

• $14.3 trillion: “Official” national debt
• $5 trillion: Amount Uncle Sam is on the hook for Fannie Mae and Freddie Mac
• $62 trillion: Total liabilities and unfunded obligations for Social Security and Medicare

That’s more than $81 trillion... or a debt-to-GDP ratio of 553%.

We know how much the Federal Reserve doled out in emergency loans: $16.1 trillion between Dec. 1, 2007, and July 21, 2010. We know that because yesterday the Government Accountability Office completed its first-ever audit of the Fed, made possible largely through the persistence of Rep. Ron Paul making that audit, however incomplete, the law.

What we don’t know is how much of that has been paid back. “We have literally injected about $5.3 trillion,” said Dr. Paul last week during his questioning of Fed chief Ben Bernanke, “and I don’t think we got very much for it. The national debt went up $5.1 trillion.”

Bernanke did not challenge those figures.

Catch 22 on Poverty and Welfare

To the average American, the word "poverty" implies significant material deprivation, an inability to provide a family with adequate nutritious food, reasonable shelter, and clothing. But the actual living conditions of America's poor are far different from -- read: better than -- what these media images convey. What does it mean to be "poor" in America? I write about it in a new paper from The Heritage Foundation: "Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?" According to the government's own non-census data, in 2005 the average household defined as poor by the Census Bureau lived in a house or apartment equipped with air conditioning and cable TV.

http://www.americanthinker.com/2011/07/catch_22_on_poverty_and_welfare.html

Making Priorities

Cut the Damn Spending

It's time to cut the damn spending! This means taking a commonsense approach to America's priorities and eliminating outdated programs that have long past served their original purposes and exist only out of habit and to protect their bureaucracies.

http://www.americanthinker.com/2011/07/cut_the_damn_spending.html

Undertaxed or Overspent?

Historical spending and revenue data cannot be used to justify current levels of expenditures or taxation. However, it is important that thoughtful citizens as well as those directly involved in deficit-cutting legislation be informed about the origins of the deficits. Have recent deficits been the result of taxes falling more than spending or of spending increasing more rapidly than taxes?

The more things change, the more they stay the same. This article was written in 1988. What has changed?

http://www.thefreemanonline.org/columns/undertaxed-or-overspent/

America - The Europe of the West?

The reality is that Americans need not resign themselves to the future that the White House would have them embrace. Flawed policies are holding back the U.S. economy, and there is room to grow if the government gets out of the way. As Heritage’s Bill Beach explains that, “Based on our talents, resources, and capital structure, the economy should be growing now at 4—5 percent. That growth rate would produce over 250,000 jobs per month…enough to reduce the unemployment rate.” But because of big government policies, we’re not realizing those gains.

America doesn’t have to be France. It doesn’t have to carry a European-style debt and tax burden. But the White House and congressional leaders must choose to enact policies that reject a European-style future.

http://blog.heritage.org/2011/07/11/morning-bell-america-the-europe-of-the-west/

The Schiff Report - Jobs, Jobs, Jobs

http://www.youtube.com/watch?v=uh3Z-JbqIJU

The Wisdom of Thomas Sowell

"A recent poll showed that nearly half the American public believes that the government should redistribute wealth. That so many people are so willing to blithely put such an enormous and dangerous arbitrary power in the hands of politicians -- risking their own freedom, in hopes of getting what someone else has -- is a painful sign of how far many citizens and voters fall short of what is needed to preserve a democratic republic."
-- Thomas Sowell (1930- ) Writer and economist

Economic Freedom and Quality of Life

http://www.youtube.com/watch?v=v1U1Jzdghjk

"If an American is to amount to anything he must rely upon himself, and not upon the State; he must take pride in his own work, instead of sitting idle to envy the luck of others. He must face life with resolute courage, win victory if he can, and accept defeat if he must, without seeking to place on his fellow man a responsibility which is not theirs." Theodore Roosevelt

Thought for the Day

A thoughtful person might be forgiven for asking the obvious question here: Why is the government — i.e. the least productive institution in any economy — charged with the duty of stimulating anything? Everyone knows DC is a veritable cash vortex. When it comes to vacuuming scarce resources from those most in need, nothing sucks quite like bureaucracy.

So how do they get away with it? Why are people sending in their tax dollars instead of rioting in

the streets? Why do swindled citizens applaud trillions squandered on programs to buy small business cyanide and economy-sized nooses? The trick, as usual, lies in a carefully plotted economic public relations campaign. It’s in the way these schemes are sold.

As George Orwell once noted, “Advertising is the rattling of a stick inside a swill bucket.” People seldom riot while waiting in line for a free lunch. Recognizing this, politicians and their lackey economists go about convincing people that a nation really can spend its way to riches.

In this manner, the Keynesian economic theory of interventionalism enjoys a growing popularity among those it will eventually ravage. The hungry man will do well to remember, therefore, that the only thing a universal “free lunch” can reasonably guarantee is mass starvation.

Joel Bowman

The Increasingly Complex Relationship between Man and State

The expropriation of private property – which in any other domain is punishable by the very institution that holds a monopoly on such an action; the state – is commonly known as theft. Of course, when the state commits such an act, on threat of imprisonment, fine or other use of force, we refer to it by a subtler label: tax. Let us not be confused here. There exist only two possible forms of wealth transfer – one voluntary, the other coercive. One can no more be “voluntarily taxed” as one can be “partially pregnant.” A = A, no more, no less and no other.

http://dailyreckoning.com/the-increasingly-complex-relationship-between-man-and-state/

Give Me Liberty, Not Debt

Tea Party Anthem, Hip Hop Style

http://www.youtube.com/watch?v=jsIsKpxUhR0

The Casey Anthony Verdict is NOT an endorsement of our criminal justice system

The Casey Anthony verdict doesn’t endorse our criminal justice system; it exposes our crumbling society. The courts can’t always dispense justice, it is up to society to protect our children. We need to bring back public shaming, we need to bring back the idea of moral responsibility separate from legal responsibility. Some people lament that Casey Anthony will not be able to hold a job or go out with her friends or meet a decent man because of the public scrutiny of the trial. Caylee Anthony will never be able to do those things either.

http://www.redstate.com/robtaylor/2011/07/05/the-casey-anthony-verdict-is-not-an-endorsement-of-our-criminal-justice-system/

The Threat is in Spending

As the Fed purchases Treasury bonds or other such assets, it creates new dollars that tend to undermine the currency’s foreign exchange value. Indeed, the dollar is more than 9 percent lower against a broad basket of currencies than it was a year ago, the lowest point since 2008 and down more than 40 percent against the same basket over six years. Federal Reserve data indicate that when adjusted for inflation, the dollar is at its lowest value against major trading partners’ currencies since it began fluctuating in January 1973.

http://www.thefreemanonline.org/headline/the-threat-is-in-the-spending/

If We Want a Better Country, America Needs Better Men

http://www.pjtv.com/?cmd=mpg&mpid=174&load=5676

There Are No Socialists

Once the individual develops a dependency on food stamps, free medical care, subsidized housing, all sorts of disability or unemployment compensation, education credits, grants, and zero-interest loans — the entire American version of the European socialist breadbasket — then expectations for far more always keep rising, with a commensurate plethora of new justifications, usually in the realm of someone else having more than the recipient, always unjustly so. The endangered aid recipient is always seen as being pushed off a cliff in a wheel chair — therefore, “they” can afford to give “me” more; things are not “fair”; there is no “equality.” - Victor Davis Hanson

http://victorhanson.com/articles/hanson070211B.html

The Declaration of Independence

9 Key Concepts Everyone Should Know

http://www.youtube.com/watch?v=cS-tshQ9sys

The Prescience of Thomas Jefferson

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. My reading of history convinces me that most bad government results from too much government. No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government. The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical. I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered.

Thoughts for the Day - Happy July 4th

"Let the Fourth of July always be a reminder that here in this land, for the first time, it was decided that man is born with certain God-given rights; that government is only a convenience created and managed by the people, with no powers of its own except those voluntarily granted to it by the people. We sometimes forget that great truth, and we never should. Happy Fourth of July." -- Ronald Reagan (1911-2004) 40th US President Source: Independence Day, 1981

As Thomas Paine says:

"Some writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.

"Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one: for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer. Government, like dress, is the badge of lost innocence; the palaces of kings are built on the ruins of the bowers of paradise."

GOP Governors are Showing the Way

There's a reason that no Republican governor seeking re-election has lost a general election since 2007, while three Democrat governors have fallen in that same period. Voters expect their state executives to make tough decisions with future generations, not weekly polls, in mind. That's exactly what Republican governors have done and what President Obama has failed to do. And that contrast will make a difference at the ballot box in November 2012, to the advantage of the Republican presidential nominee.

http://online.wsj.com/article/SB10001424052702304070104576398072003438908.html

Best Workforces are in Right-to-Work states

This may just be a coincidence but, out of the 50 states, there are 22 states that do not force people to pay union dues as a condition of employment. Workers in these states are often viewed derisively by union extremists as being somehow inferior to their union counterparts. However, a new study published by CNBC may blow that myth out of the water.

http://www.redstate.com/laborunionreport/2011/06/30/best-workforces-are-in-right-to-work-states-survey-finds/