Tag Archives: deficit

More BS Flowing Down The Political Sewer Pipe

San Diego – Oh how soon we forget when it serves our purposes…  But sometimes there is that pesky videotape that someone forgot to erase when the agenda changed.  And now we have a glaring example of it.

The year was 2006.  The President was the hated Bush demon and in his evil machinations sought to raise the debt ceiling.  The left was simply apoplectic.  Senators Reid, Pelosi and, yes, Senator Barrack Obama each took to the dias and bloviated in soaring rhetoric how this was an outrage!  This was, they ALL chanted, simply so we could spend more money but we did not need to raise it for current spending obligations because all of those had to have been approved under the debt ceiling as then defined.  This was, they shrieked, merely a way to allow the administration to spend NEW money on the wars in Iraq and Afghanistan beyond that already approved, which they hated.

In fact, they were right.  Congress cannot approve borrowing more money than the debt ceiling in place at the moment will allow.  So every debt and liability incurred by the country at the moment has had to fit within the debt ceiling when the liability was enacted.  And, sure enough, we have the revenue to at least service the current debt even though we do not have the revenue to pay the principle down or to fund new debt.  That was true when Reid, Pelosi, Obama, et al rose to say it in 2006.  And it is still true today.

It was still true in 2008 when Obama, on the stump, called the Evil Bush Demon irresponsible and unpatriotic for allowing the national debt to reach $4 trillion on his watch, to create, he noted, a debt exceeding the total debt run up by all presidents before him.  He was correct.  But that was $6 Trillion ago.  And that additional $6 Trillion was run up not by the Evil Bush Demon but by the benighted Obamessiah,  How can that be when he was telling the truth back then.

However, he was not telling the truth today or anything even close to it.  He had to be assuming, (and with every reason to make the assumption based on the election results), that the populace is so ignorant and so burdened with short attentions that they will not only have forgotten it but those few who remembered will think they remembered in error, our Spender in Chief rose Monday morning to warn the people that if the evil right wing continued to hold America hostage by refusing to raise the debt ceiling unless some equal cuts in spending were added, we would fail economically, fail in our promises to the world, our credit would be shot, and we would no longer be a powerful nation.

Sorry Chief, that is simply a bald faced lie.  And worse.  Trying to frighten recipeients of social security and VA benefits is disingenuous because he knows full well that the payment of those specific benefits is protected by Federal law.  It is more than disingenuous, it is sleazy and duplicitous.

And, Dear Leader, it contradicts your own surprisingly well reasoned diatribe against raising the debt ceiling for the Evil Bush Demon which, against all odds, actually caught you doing something unusual, telling… the truth.  Well, some of the truth anyway.

Raising the debt ceiling is wanted and needed solely so we can raise our debt.  Duh.  Obama’s problem is that as a country, we do not take in the revenue to pay for the desired levels of spending especially when the leadership wants to turn us overnight into a Scandinavian model socialist democracy.  But this is not a result of incompetence.  I believe it is an obvious part of strategy 101.

If we continue, year after year to raise the debt ceiling and then borrow up to it so we need to raise it again to spend and borrow more, sooner or later that house of cards will come crumbling down just as it does to a family who tries the same thing.  And then we have a choice.  We can do what we are doing now which is simply push the day of reckoning down the line so our kids and their kids will have to deal with the catastrophe we are creating, or we have to belly up to the bar and cough up the revenues into the public coffers to pay for it.

The problem is then we will have to believe that a Congress known most of all for its profligate spending (and yes, this includes the mainstream Republicans as well who differentiate themselves from the liberals only be want to spend a little less and a little slower, will take that added revenue and put it toward paying down the debt instead of simply expanding new programs.  You do all believe they will all suddenly be bitten by the bug of restraint, don’t you?  I’m sure I do…  NOT!

The only chance this generation has of getting the debt under control is to stop increasing the debt faster than it can be paid down.  And that needs to start now.  Will it happen?  I doubt it.  The citizenry unburdened by any real knowledge of the issues or the consequences, hearing only what they want to hear and even then only if buried in the speech is a promise for more stuff to flow down into the public trough, are apparently clueless.

Obama has an uncanny ability to avoid issues and solutions while successfully painting any who oppose his view as the enemy, not just of him, though that is bad enough in his eyes, but of the country, of the children, of the poor, of the minorities, of women, of anyone whose status allows the inference of some ugly label to be applied to his opposition.

Amazing.  Sad.  Maddening.  I think perhaps we need the object lesson  now rushing at us like an out of control freight train while we, in our economically and ethically broken jalopy sit here broken down on the track.  Maybe those left standing, after they have clawed their way back to fiscal responsibility and productivity will, at least for another generation, remember.

Despite government promises to the contrary, there really is no free lunch.  And this lunch is going to have one Hell of a bill.

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Posted by on January 14, 2013 in Uncategorized


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A Good Week for the Prez…The Economy looks Bad.


San Diego — Last week was a GREAT week for the Prez, King Barrack I, all merciful and bountiful, hallowed be his name.  Moody’s is threatening to reduce our national credit rating, and the already under reported unemployment numbers went back up over 9%.  Even party loyalists are quietly uttering the forbidden thought of a “double dip” recession that was long forecast by those doom and gloom folks on the other side.  Ignoring all past rhetoric to the contrary, he told the employees at a Chrysler plant that we had to expect it to get worse before it got better because of “bumps” in the road that would stop even the famous Jeep Wrangler which that plant was building.

Some tried to paper over the remark by claiming it was simply a lame joke.  I don’t think it was a joke at all but a slip of the truth, a “Freudian” error.  It was fascinating he should choose that venue, itself sort of a shell game economically.  The company and the administration made much of the fact that they had paid back their bail out money… they did not mention that they did it with low interest government loans meaning that in terms of their liability to the government it was a wash and they owe the same as they did before the swap in books.

But that is a side show to the economic main attraction.  What I believe are the true bellwether sheep in the mix, gas and food and housing, all continued a negative slide.  Gas went slightly down then back, housing continued down, and food costs continued up while unemployment was up.  All while His Majesty told us how much better things were getting, all while catastrophe was being declared if we were not allowed to borrow even more money instead of facing reality and cutting back on our entitlement spending.

I just have a single question for those advocating this debt ceiling increase.  Would you advise a family member or close friend, someone who was in trouble due to over extending their credit cards, that a workable solution could only be found if they got another credit card and borrowed some more?  How well would you expect that to work out?  Well, that is precisely what the administration is telling us needs to happen.  And they won’t even consider trying to offset that with some spending cuts.

i even just read the comments of one partisan that claimed we were looking at it all wrong and as any banker knows liabilities are actually assets.  He was serious…  and he ignored that it was the banks which had been doing precisely that with a boatload of toxic loans that should never have been granted that was one of the critical nails in the economy’s coffin.

One of the MSNBC pundits, Rachel Maddow, asserted categorically that if we stopped the funding for the wars in Iraq and Afghanistan then we could solve the budget crisis without having to cut other programs.  Whatever she is smoking, i have some old hippie friends that would love to get their hands on some of it. Let’s do the math.

According to the Governments own figures, total defense spending requested for FY 2012 was $881 Billion.  That number included spending on the military, Homeland Security, the Veterans Association, The Nuclear Adminsitration and several State Department Programs.  But to the point, funding for the Iraq and Afghanistan action is requested at $118 Billion, down from $159 Billion last Year.  But the national debt is now over $14 Trillion.  The money for the Iraq and Afghanistan operations won’t even pay the debt service which is $275 Billion for May through October of 2011.  In 2010 interest on our debt was $413.9 Billion and the total for 2011 will be higher.

The other common suggestion from the left is that we should raise taxes on the very wealthy and that would solve it.  OK, let’s do the math again.

According to The  Monthly Treasury Report just put out by the Treasury Department, the total worth of American Billionaires is $1.3 Trillion.  Forget just taxing them, if we took their entire worth and chucked them on the street homeless and penniless we could not even cover this year’s deficit of $1.6 Trillion, never mind the debt. And then who do we hit up for the rest?  And what do we do next year? Throwing in all of the Millionaires entire wealth still does not come even close.

In fact, for those “We can tax our way out of this” crowd, if we added up the entire Federal Tax revenues from all sources (taxes, fees, Social Security, etc.) in 2011 it adds up to $4.46 Trillion.  Does the administration think we are so stupid that we cannot go on to the government’s own web site and get these numbers to poke holes in what they are trying to tell us?  For every dollar in funding commitments we take in less than 50 cents.  Could you run your personal finances like that, unless of course you were on the public dole yourself?  Of course not.

But, you respond, the government can do something you can’t; it can simply print more money.  Yes it can and that is precisely what it is doing.  But how many years of economic study does it take to understand that more money applied to the same number of pulls on it must necessarily result in that money being worth less per unit.  But if you are paid a fixed rate that is not adjusted for inflation, then it takes more of the money from your pocket to buy the same things.  So how is that working out for you at the gas pump and the grocery store?

That is all common knowledge so the answer to the question on the table apparently is, “Yes.”  We ARE that stupid.

There was a time when you might not have heard it since the main media never talked about it and the only ones trying to sound some alarm were those wackos on the opposite side.  But now, even NPR TV finally had one of its reporters admit that some major economists were not backing the administration’s story of economic recovery.  On a Radio Talk show this week even James Carvell, virulent liberal and hardly a pawn in the conservative camp, expressed the concern that Obama, his guy, did not seem to really understand the situation and he feared that we could start seeing some serious civil unrest over it.

So why would this be good news for the Prez?  Well to ask that you would have to be very new to this blog where I have pointed out event after event where, to me, the only logical explanations that connected all of the dots and provided a complete fit to the facts were that either he was rock stupid or was purposely trying to destroy our economy so that he could then ride to the rescue and rebuild it in his own favored European socialist model.  His comment that it has to get worse before it can get better is a revelation of the real plan.  For him to succeed then it MUST get a lot worse… to the point of collapse.

Both the “rock stupid” and the “Socialist Revolutionary” theses form viable working hypotheses. But the missing part of the “stupid” thesis is compassion for the human costs and concern for the country.  Even if he were too stupid, too ignorant, or simply too incompetent to know how to fix it but actually wanted to, a positive desire for the country and real compassion for the economic suffering of so many citizens would have seen an outreach for help and a game change to try to find something that did work even if it was the final humiliation of an admission that the government cannot fix an economy, especially by ramping up the spending policies that created the problems in the first place.  But there is no sign that is about to happen and that means the “stupid” hypothesis starts to fall apart.  That only leaves the one working hypothesis to examine.

Government can certainly can ruin the economy, but only production and private industry can fix it and maintain it.  Increased tax revenues flow from increased productivity.  Duh!  But that concept is not something possible to even contemplate, much less address in his world view.  It is, for him, a complete and willful blind spot.  I think rather that while he is an unqualified and incompetent president, he is not a stupid person.  And he is certainly not without a goal and a plan to reach it.  Instead I think, and with increasing conviction, that he is an ideologue with a plan for social revolution that he is implementing brilliantly.

The obvious next question then is to what possible ends could he be aiming?  Weren’t you listening?  He already told us but no one wanted to hear it and he knew full well that the sycophants hanging on his anointed robes would hear only what they wanted to hear and then try to ignore or spin the rest.  His previous close associates and mentors have already told us.  He himself was clear he wanted to transform America and he was also clear in his vision for what that might look like.  Couched in warm fuzzy rhetoric about caring for the poor, the needy, or, best and most heart-string tugging of all, the children, he wishes to oversee a government run and enforced redistribution of wealth from those who earn it to those who do not.  He knows that those who do not, who seek to continue feeding at the government trough, are a sufficient voting block to keep him in office essentially for life.

Oh I know there is that pesky amendment limiting Presidential terms but he has already shown a major disdain for that musty old document and would have no trouble overriding it as he has other Constitutional roadblocks to his plans.

I can see the eyes rolling now; I hear the whispers that ol’ David has finally lost what little grip on reality he might ever have had.  But I simply would ask you to revisit the history of countries who have gone from some more or less popularly elected for of government (prior to rigged elections that created “Presidents for Life”) and see what the mechanisms were that set the change to a de facto dictatorship in motion.  it has, nearly always and with very, very few exceptions, been the same sequence of effects and it has started with an economic crisis followed by, as Keynes himself described it, a debauching of the currency, that is the printing of more money to stave off an out of control inflation which is then enflamed by the increased amount of money in an economic death spiral.

As in the most famous example, the Weimar Republic in Germany, the value of money declines rapidly meaning the cost of good escalates rapidly until even basics are unaffordable, people panic and in the following chaos take to the streets in protest which, given the nature of mob psychology turns sooner or later to riots and the benevolent dictator in training now has to use strong-arm means for the good of the people to bring things under control.

None of that would be possible here except slowly and surely the drug of benefits has been doled out as if for free and now has become cripplingly addictive.  We were promised “change” and we certainly got it.  From January 2009 to May 2011 Gas prices have increased 84%, Corn has increased 78%, Sugar has increased 164%, Food Stamps have increased 35%, long term unemployed has increased 146%, the national debt has increased 32%.  All of that in a little over half of a Presidential term. The rate of increase in the National Debt is stunning. In the last two years we have accumulated national debt at a rate more than 27 times as fast as during the rest of our entire nation’s history. To put that in some perspective if you are driving in the right lane doing 65 MPH and a car rockets past you in the left lane going 27 times faster, it would be doing well over 7,000 MPH!  Is your income growing at that same rate?

No one could possibly believe that is sustainable and so the only possible explanation for the continuation, much less the acceleration of the policies that created that situation is that it is on purpose and it has as its goal the very end to which it has historically always led: an over throw of government and the institution of a de facto dictatorship “for the good of the people.”

I truly do not want to be correct in this. I keep waiting and searching for the evidence that will provide another working hypothesis to analyze but thus far i’ve not seen it.  That is why i endure the snarky administration apologists on MSNBC and read the claptrap from Huffington Post and other such sites hoping to hear the missing fact or piece of evidence to allow me to change that thinking.  I don’t have any kids so I do not worry about them and I also do not worry about the kids of those who have consistently voted to let this political monstrosity loose on the land.  If that truly reflects the values of the 21st Century American then they deserve what is coming.

What I don’t like is the closing speed which may bring about this collapse and change in my own lifetime.

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Posted by on June 7, 2011 in Uncategorized


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The Government Wouldn’t Lie to Us… Would They?

San Diego – This might be a long one so get a cup of coffee and setle in a bit…

I’ve been asked,  since I claim only to be an image maker, where I come up with the ideas and conclusions I espouse in this blog and in personal discussions.  How is it that nearly all of my colleagues in the arts and in education, are almost diametrically opposed to me.  It’s a fair question.  I cannot speak for my colleagues and how they arrive at their own conclusions, but in my case I have experience in the real world that most of them lack and I try to follow the advice of my old philosophy instructors in college now summed up nicely by John Mauldin, a major financial figure in this regard when he explained his willingness to quote from those with whom he disagreed by saying,

“… if we only read what we already think, then how can we learn? It is only when your ideas are challenged and you seek (honestly) to determine why the other guy is wrong and you are right, that you can either become more firm in your beliefs or change [as the facts dictate].”

So I try to keep abreast of as many perspectives as possible, assuming hyperbole from each according to their obvious biases, and seek first to find any common ground, which is nearly always correct, or to find the dots that need to be connected whether the piece i am examining has done so or not.  In addition to online versions of the NY Times and Wall Street Journal, I check out the online English versions of La Monde (French), Der Spiegel (German), Daily Mail (England), and even Al Jazeera and Al Arabiya.  I read the political drivel from all sides ranging from NewsMax to Huffington to Politico.  I also devour intelligence reports, especially from Stratfor, financial ideas from John Mauldin’s “Outside the Box” newsletter which as noted above presents ideas all across the spectrum, and, when I am home to do it, try to scan the blather from MSNBC, CNN, and Fox.

Unlike mainstream channels those sources do not seek to hide their biases so you can hear ideas “from the horse’s mouth” so to speak and not hear just an edited version of it.  And finally, my personal library contains many of the foundational documents of the various political philosophies and also the texts driving theocracies such as the Koran/Qur’an or however one choses to Anglicize the spelling.  I have read all of them, sometimes several times.

Of course I cannot read everything out there so I search quickly for articles in the areas that interest me: geopolitics, oil, security and terrorism, and sovereign finances for the most part.  Obviously I cannot do it every day since I have a real job that is, itself, taking more than normal times.  But I can spend a few minutes here and there, cut and paste parts i think are salient into a file and then at my leisure on weekends, such as now, try to make sense of it.

Is it possible I have missed something important?  Of course. But I would argue that whatever else I may be or may not be, I am not completely uninformed as to the events transpiring around us in this most dangerous (in my opinion) of times.

I would dearly love to posit that I think the greatest danger to our country, society, and culture is, as it used to be, an external threat and those certainly do exist in abundance.  But I have come regretfully to the opinion that our greatest threat is internal and that we are, as one financial pundit phrased it, “…trending toward unwitting self-destruction.” Those external dangers, while all very real, poised, and waiting their opportunity, would never have that opportunity if somehow we did not, through internal idiocy or malice, open the gates for them and haul in the modern versions of the Trojan Horse.

You really should re-read (I’m making a possibly invalid assumption about the quality of your education here) the section of the Iliad describing what the Greeks did to entice the Trojans to accept and embrace the vehicle of their own destruction, and then look for the parallels to our current situations.  The only difference is the “Greeks” in this case are not outside the walls, they are already in the walls and in the palace.

Sometimes I feel like Cassandra in this regard.  (Oh, all right, for God’s sake, I’ll just tell you. She was the Trojan oracle who spurned Apollo and was cursed to always tell the truth and never be believed.  She warned Priam and Hector about the Greek trick but was not believed.  No wonder we are such “fair game.”)

So here is my “Cassandra Report.”  Our economic situation is dire and getting worse and if we do not turn this ship around, quit dealing with symptoms and short-term political feel good “solutions” while carefully avoiding addressing the cause of it because the solution is viewed as political suicide and painful in the extreme, we will see our great culture self destruct and open the gates for all of the dangers out there who seek to destroy us and see us join them as just another third world country that is just a bit bigger and see the Orient once again take its place as the major world power.

Whatever horrid pain we will have to face to solve the current problems because we waited too long, are nothing compared to the pain we will all suffer if we do nothing.  And the solution begins by admitting the problem.  You cannot — CANNOT — solve a problem that you will not acknowledge exists.  Period.  And we have a huge problem that in the last few years has been exacerbated to an extreme degree and is now being covered up with a combination of lies, band-aids, and panaceas in the form of misdirections.  We hear each side blaming the other for setting this in motion when the truth is both had their hands in it and there are no innocent parties here.  Good Lord, get over it.  The point, in the end, at least at this desperate point, is NOT who started it… history can sort that out later.  The point is what are we going to do about it and it appears to me our deadly partisanship will prevent this group of so-called law makers from really doing anything.

The problem that the problem is causing is that it is generating such angst that we are losing our ability to keep an eye on the powder kegs in the middle east where the fuse is already lit and inching toward disaster.

(As a teaser, when the current king of Saudi Arabia dies or is killed and if Khamenie is still the high Ayatollah in Iran, keep your heads down because all Hell is likely to break out led by Iran.  Ah but that is a story for another day because it really will not make any difference to us if we are, by then, at a place we are sure to be if we do not reverse course and quickly.)

So what is about to — or at least likely to happen on the economic front?  Well, here is a quote from David Gallard of the Casey Report, a widely read financial newsletter whose conclusions have rarely been wrong:

“The Fed has been extremely supportive of the U.S. government’s insane spending, polluting its own balance sheet by buying up toxic loans by the hundreds of billions and by pumping enormous quantities of cash into the money supply.

” …(you) don’t have to look very hard to understand why we have seen some small recovery in the economy, much of which has been driven by the financial sector that has been the recipient of so much largess – it was bought and paid for by the government, working hand in glove with the Fed.”

Why is this a problem?  Because to support a flawed economic policy, it has resulted in what even Keynes himself feared, a “debauchery” of the currency.  The monetization of the debt by printing money and loaning it to one’s self via purchasing your own bonds, called, euphemistically,  “Quantitative Easing” or QE, is (a) inflationary on the face of it because it debauches (debases) the value of the currency and (b) should it stop after it is depended upon and fundamental problems are not solved, will generate, in, at most (if history remains true) a couple of years, a secondary market collapse because the whole scheme was not used to address the real problems but to prop up the parties complicit with government policy in fomenting the collapse in the first place.

And it appears highly likely that as they approach the end of QE2, the Fed, ever terrified of inflation even through their own filters, will not immediately go to QE3 but will stop to assess the success of the plan.  Success or failure, it will be labeled as a success because it is what King Barrack and Count Bernanke wanted to happen. Given a little time though, the incredible problems impacting our economy will resurface so that the economy will be back in the tank in a way impossible to cover up.

At that time the Fed will be forced to do some further monetization, though they will likely try to pretend it is something else other than more quantitative easing when they describe and label it.  It is all they know to do and have little choice since the politicians at ALL levels are refusing to address the core issues are looking to them to somehow, magically fix it so they (the politicians) can claim innocence of the pain and thereby keep their jobs.  And it appears that the public, on both sides of the aisle, is dumb enough to buy into it so long as they keep being promised protection from their own pain.

I believe however that QE1, 2 or 3 or 4 or 28, by any name or label, are all stop-gap measures that in the end will backfire badly and the inflation feared will come at us like an onrushing freight train and make Japan’s experience look like a Sunday School picnic… unless we change course.  They are treating the symptoms not the cause.  It is like putting a bandaid on a festering wound… it hides the reality for a while until the gangrene sets in to force some really ugly decisions that could have been avoided early on.

So why do I believe that?  I believe it because i believe we are being lied to on so many levels that it is nearly pathological in occurrence.  And that if you look beneath the curtain of this well-woven fabrication all of the signs of disaster are there to be seen clearly.  Here again is David Gallard,

“…the problems that made the economy stumble in 2008 have not been solved. As I said before, most have gotten worse. Have the impossible levels of sovereign debt and trillions in unresolved bad mortgages embedded in the balance sheets of Fannie, Freddie, the Zombie Banks and even the Fed been resolved? Hardly.

“Is there any real sign coming out of Washington that the deficits will be substantively tackled? You don’t have to be as active a skeptic as I to understand that the deepest spending cuts being discussed don’t even scratch the surface of the $1.5 to $2 trillion deficit. As for the $60 trillion or so in debt and unfunded obligations, forget about it.

“The U.S. government and the governments of most large nation-states are fundamentally bankrupt. In time, they will have to default on their obligations. While there will be some overt defaults, I expect most of them to follow the path of least resistance, which is to try to inflate the problem away.”

The truly worrisome deficit is the deficit of government accountability.  Here’s another dot for you to connect.  On February 10th CNNMoney reported the IMF issued a report encouraging replacing the US Dollar as the world’s reserve currency.   China has said, “we don’t want to make any more foreign exchange reserve of any paper currency, because all the paper currencies are government debt currencies.” In southern China, the “BRICS” group, Brazil, Russia, India, China, South Africa, recently met in a sort of mini-summit and agreed “to transact all of their mutual trade and investment in their own currencies” effectively minimizing the need, at least in the short-term, for a global reserve currency and because of, in their view, the volatility of the US Dollar under current fiscal policies.  They didn’t replace the dollar as reserve, they sidestepped it.  But the result is the same.

In a wonderful bit of political misdirection the Administration’s pet sycophantic “economists” have rushed to assure us that the dollar is not in danger of collapsing.  I think they are probably right.  But that is not the issue: it does not have to collapse per se to have a catastrophic effect on our economy.  All it has to do is devalue significantly due to inflation and the spiral is on.  But we are also assured by the anointed one that the economy is back on track and inflation is not a problem.  And if you just slightly cook the books, that is more or less true.  But to do it you have to change the rules of how such things are measured and that is precisely what has just happened.  And Bernanke assured us recently that deflation was not likely.  Duh.  But deflation is not the problem yet everyone read into that, “Hey the Fed said there was no problem so relax; it’s all under control.”  That is the equivalent of the lookout on the Titanic telling everyone, “No problem, we’re made of steel and that is just frozen water so there will be no problem.”

First of all, a “jobless recovery” is NOT a recovery at all.  Unemployment remains very high.  Of course if you are a blind partisan and buy into the government’s figures, it is moving steadily in the right direction. But the government has never entertained any reservations about juggling actual figures to suit itself. One telling statistic they avoid like the plague is, unfortunately, the only real way to look at it: unemployment as a percentage of the employable population, which screens out many of the government’s self-serving adjustments to its official figures. Looked at that way, you can see that unemployment is continuing to rise alarmingly, even though the government is reporting that it’s falling markedly.  What is the basis of their declaration: the number of people applying for unemployment.  Period.

Plans to help solve problems (especially as in California) by raising productivity, which means raising the tax base, are simply pie in the sky when, in fact, the tax base of employees is going down because business — you know, those nasty entities that actually hire people –are being driven to places like Texas.  Anyone willing to do the research to find the real numbers can see that both unemployment and inflation is going up. With the web at hand it is incredibly simple to do the research.  For example, just pull up a chart of the CRB (Commodities Research Bureau) Index for Commodities which tracks the prices for the real stuff required for life – and one can see it has been on a steep upwards trajectory. Inflation is very much here and alive.  As I noted a few posts before, oil is rising rapidly and with it the costs of food production so food cost is also going up.  And so is most everything else.

John Williams’s (another high level financial consultant/analyst) “Shadow Stats” chart ( reveals that inflation is at nearly 10%, while the Bureau of Labor Statistics is reporting 2.1%.  But, and here is a really interesting kink in all of this,  even Williams’ statistics don’t report actual percentages but rather what it would be if the government reported inflation the way it used to, before it started “improving” its reporting in the 1980s. It’s still an incomplete view, because the government’s original reporting was flawed to begin with and skewed to minimizing the numbers even back then.

How can the government skew these figures? Easy, they added in Housing to the CPI (Consumer Price Index). In 2008 housing was dealt a huge blow and it will be there for a very long time, because government had (and continues to) encourage and facilitate bad decisions on the part of both lenders and borrowers. This has left trillions of dollars of bad debt hanging out there, much of it now in the government’s ledger.  So the inclusion of housing prices, which plummeted as that bubble burst, as a component of official CPI, pulls the official inflation figures down, even though those figures don’t sync up with the actual cost of living.  And et viola, a magical and instant drop in inflation numbers.

i once did work for a Fortune 100 company whose CEO made the balance sheets look wonderful by selling off core business departments of the company until there was nothing left to sell.  That company then went under, no longer exists, and to the end the stockholders, told only of the incredible “revenues” while costs dropped, kept voting for HUGE annual bonuses for him.  Hmmmmm, sounds like the government to me…

This is precisely the same approach used to indicate global warming by eliminating, from the list of gathering stations, those that are in colder areas.  And if you leave that little important bit of data out as  you are calculating the figures, they do seem quite plausible.  Ah but now we are bumping into another topic for another time. But is it possible there is a trend here?  Surely not.  Say it isn’t so… and then back that up with some hard data.  Please, go for it.

Many economists from different perspectives are predicting oil prices to continue rising.  Some blame speculators not fully understanding the difference between spot markets and normal market speculation, some blame foreign issues, and others note that in addition to those influences on oil prices, our government seems to actually be facilitating it by refusing to allow us to get at our own reserves or refine what we have in order to push its green agenda onto the backs of people who are trapped in their positions.  With inflation gobbling up large chunks of one’s paycheck, King Barrack’s laughing while telling a worker he needed to trade in his SUV for a hybrid van, is like Marie Antoinette telling the starving French who could not afford bread to “let them eat cake.”

I do hope some of you remember the French Revolution and not only what led up to it but the Reign of Terror that followed.  The next time you ‘neocons’ want to set in motion some protective law please re-read Robespierre’s letter that allowed him to set up the security apparatus that led to job security for Madame Guillotine and see if you recognize any of it.  And you far left people wake up and see the revolution that is possible when you get the people mad enough because they are feeling helpless because that is where you want them to be to justify your creation of the government village to take care of them.

People underwater with their homes and vehicles could not trade up to a hybrid vehicle even if they wanted to.   What a stupid, irresponsible response that was but it is totally revealing of the agenda and of the connection King Barrack has with real people. Telling the people here in southern California to use public transportation where a 20 minute commute by car would then take 2-3 hours — assuming it was even an option — is ridiculous and out of touch. But then so are the proponents of such ideas.

Before you can demand that change you have to build a workable system and that takes… oh wait, I’m beginning to see it now… that takes higher taxes to pay for it.

Why no, they wouldn’t lie to us… much…

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Posted by on April 16, 2011 in Uncategorized


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Extremist & Draconian Math

San Diego – We all know about “New Math.”  That is the math that has left our kids without the ability to count change and depend on calculators.  But now we have Extremist Math.  Since good ol’ Chuck Shummer told his fellow Democrats to label anyone who wanted to cut spending as extremists and their ideas as Draconian that has been the obligatory label used for nearly anyone who disagrees with them.  “Draconian” is a fitting label for them to use since they also accused their opposition of coming to town to kill women and old folks.

I hear a deafening silence… “Draconian?” you ask.  Oh come on, all of you ever-so-educated and informed voters surely are so steeped in history you remember the Athenian Greek, Draco?  In 621 BC Draco was asked to codify all laws so that everyone would know them and not be able to claim ignorance or to break them unknowingly.  His code decreed death for virtually every offense.  He stated he believed death was appropriate for ANY crime and could not think of something more severe for the bigger crimes.

So lets put the Draconian objectors to the budget deal to the microscope.  it has become pretty well established that Americans. almost somewhat uniquely (and, in my opinion due in part to new math) cannot comprehend or deal with really big numbers.  A million is slightly out of grasp and a billion or more are just abstractions.  THe only way to make sense of what is really at play is to deal in percentages and bring down examples into the realm of the understandable.  That is what I tried to do when I showed that, following the math done by a friend, using the Democrats’ reasoning, my own $3,000 credit card debt could be properly dealt with by my cutting $.08 (that is eight cents) from my annual spending.

Well here is another example.  First the reality as described here in an article on the issue:

“Currently, the Federal debt amounts to $14.2 trillion. (Washington has) borrowed every penny the law allows. In fact, that’s the reason for the current war of words. If Congress won’t raise the debt ceiling, the government can’t borrow any more money. If it can’t borrow any more money, it can’t pay for all the boondoggles and giveaways that are already law. [DK: And that means that expenditures and liabilities were passed into law knowing full well they were above to so-called debt limit and now they need to hike the limit to pay for them. So much for any real debt ceiling: you just authorize the spending and then tell the people they will be devastated if they have to “cut” the programs.  Can we spell “fraud?”  Oh well, back to the quote… )

“The deficit is already scheduled to grow by $1.6 trillion this year. In other words, even if Congress can’t agree on spending one more dollar this year, we taxpayers are already on the hook for our government to fork over $1.6 trillion more than it collects in taxes.

“The deficit for February (the shortest month of the year!) was $223 billion. That was the largest single deficit of any month in our country’s history.  Let me put it another way: The same day that Republicans in the House voted to cut spending by $6 billion, our national debt jumped by $72 billion. That’s $72 billion in new deficits, every day of the week, every week of the year.”

So lets convert that all to pennies where one penny equals a trillion dollars (from an analogy first presented by Chip Wood). The debt is roughly 15,000 pennies or a pile of 300 of those red penny rolls. And the pile is growing by 72 pennies a day or about a roll and a half. (for those who have never been in business or saved their change, a penny roll/wrapper holds $.50.  Oh, I’m sorry, that is 50 pennies.

The nasty evil Draconian House wanted to cut 10 pennies from that pile of 15,000 pennies
but had to settle on less. The Dems were willing to cut 4.5 pennies and in the end settled on about 6 pennies or 1/16 of the amount of NEW debt being racked up that very day.  Draconian?  Extreme?  And in following our analogy how do the liberal folks tell the tale?  They say those nasty Draconians are trying to cut all of ten pennies at once (can you even imagine?) which will be disastrous because we only increased the deficit this month by 1.44 rolls. And the sychophants readily buy into that bit of verbal mis-direction.  The nasty conservatives want to cut 10 but only increased 1.44.  Uh, but wait a minute… the cut is 10 pennies but 1.44 rolls is 72 pennies… you have to not let them keep you from reading the fine print.

When it looked like they actually might lose the fight Dems accelerated the misdirection approach and added an old staple technique… they lied.  they lied by also started telling people that if the government shut down then soldiers in the field (“America’s flowering youth now in harm’s way”) would not be paid.  That is a lie.  The Law is clear that active duty military are considered essential personnel and exempt from furlough or layoff without pay.  And who else is excempt?   I know this will surprise you.  Congress and all of their staffs are also exempt.  Reality is not kind to the liberal position but they can happily (for them) rely on voter ignorance and short-term memory and their fear of nasty labels.

King Barrack loves telling the world he inherited a Trillion Dollar deficit, as if that somehow excuses boosting it to the current levels.  But it is a lie.  $800 billion of that deficit was the one time, never to be repeated TARP bailout.  But the new administration, instead of keeping it as a one time expenditure, rolled it into the base line for the continuing budget and then rolled their own additional “Stimulus” money of several more trillion into the base line.  In a truly bizarre and utterly ironic twist of events, the idiot Michael Moore was partially right: we are not as broke as it seems because the reality of one-time expenditures has been rolled forward on paper as if we should be spending that money EVERY year, and God knows King Barrack wants to do just that.

Anybody know of a small isolated island needing a Photo Professor where the national budget is counted in fish and coconuts and one cannot run a deficit because the exchange is based in tangible goods?  No one can say that a pound of fish is, today, worth 1.8 pounds of fish.

I want to declare a moratorium on the use of all labels and personalities used in place of national political debate.  I want to make it mandatory that only the facts be presented and let the voters decide based on facts, not on fear-based labels and emotional arguments.

P.S. – re local/State issues.  I do not support a tax increase; we are driving businesses out-of-state in record numbers and with them, losing the tax base on both corporate and employee levels.  But I do believe the voters have a right to decide for themselves and it should be put on the ballot. and if, according to law, 2/3 of them vote to increase specified taxes then that should be allowed.  Plato referred to pure Democracy as “the rule of fools” but the petition/referendum process in California has already totally subverted the 3-part government approach and created a third branch which is totally unaccountable and has consistently refused to pay for the schemes their petitions have put in place.  Now I think we should give them a choice to face reality.

On the budget ballot we should list the amount that needs to be raised to pay for all of the schemes and let them chose to pay for them with additional taxes or not.  Those that do not get the votes would be scrapped the day the votes are counted.  For those that do, taxes will be raised accordingly unless enough are dropped to make up the difference.

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Posted by on April 15, 2011 in Uncategorized


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Betting Our Future on a Shell Game

San Diego – OK, what am I missing here?  The Republican Speaker says in order to get him to raise the debt ceiling the Dems have to agree to more budget cuts while the Dems are saying that if we do not raise the debt ceiling we will default on our obligations.  Wait a minute.  Am I the only one to see the logical disconnect with that.  THe only way those statements, especially the ones from the democrats, make sense is if we have ALREADY exceeded the debt ceiling by knowingly borrowing more than we were allowed to under the current debt ceiling.  And if they can just do this anyway then what is the point of even having a debt ceiling?

This is not only a classic shell game, good old cups-and-ball with our nation’s future at stake, it is, as it generally was by good con men, rigged already.  And it is rigged by extremely good con men who already managed to convince their simpleton prey that (a) shutting down the government was disastrous despite the fact that it has happened numerous times with little more than inconvenience at stake and (b) that real cuts of under $10 million were actually nearly $40 million.

And yet, with those actually minuscule cuts already the feeders at the government trough are starting to squeal their displeasure.  And knowing now how easy it is to fool the republican politicians it is no wonder King Barrack was so confident in his speech now openly starting to sell the idea that American prosperity did not really start until Social Security and Medicare, two classic cons that would make Charles Ponzi proud.

The only hope for this country resides in the 2012 election at which time my prediction of 1998 will come true that by 2014 we will have irrevocably cast out future in stone to either get back on the right track or toward doom as just another Balkanized Federation ala European social “democracies.”  Failing that, only the dangers of a real revolution could change things back and if we do not change course then i would predict that sometime by 2030 we will see that revolution getting underway.  What a frightening prospect.  THe people who start revolutions are but rarely the ones to control the authority that follows.  Almost unique was our own revolution but truthfully it was far more a war for independence than a true revolution since we did not seek to overthrow the monarch merely to break away from his rule.

Such prospects, again, make me glad I’m an old guy and will likely not live to see it.  But then, I never thought I’d live to see the day when a slick politician could, in one term, turn us almost completely away from our core values and align us much closer to those of the collectivist, socialist thinking of our former enemies.  i had a higher regard for the American people than to think their intellect so shallow as to not remember the failures of such regimes in the past or their laziness so vast as to think the slop from the government trough was OK.

Propelled by their rush to have all things provided for them, they have forgotten Jefferson’s warning that any authority sufficiently powerful that it can give you anything is powerful enough to take it all away.  Remember the old saying that if you give a man a fish he can eat for a day but if you teach him how to fish for himself he can eat forever?  We seem to be saying to our newly minted king to not waste time with the fishing gear, just keep the flow of fish coming and we will be happy.

Not me, thank you very much.  I know how to fish. And hopefully i will not live to see the government simply close off the fishing holes so that I cannot continue to fish for myself and must eat at their trough and then do their bidding because that has, throughout history, become the inevitable end of such policies.

No wonder the liberal history professors needed to revise history to cover up the litany of failures of their philosophies, as King Barrack is starting to do in his speeches as he continues to run for another term.  I had been concerned about the spread of Islam as a threat to this country’s values and culture but there is a far more imminent danger and it is coming not from without but from within.  It is our own growing weaknesses stemming from too many soft beds and warm meals that will make us vulnerable.  In the end, if we do not change course and get back on track quickly, we will become victims of our own success and in the doing, throw that success away.

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Posted by on April 14, 2011 in Uncategorized


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When You Find Yourself in a Hole…

San Diego – An old saying goes, “When you find yourself in a hole, the first thing to do is stop digging!”  But the approach of our brilliant congress takes another tack: they want us to give them a bigger shovel, or, better yet, a backhoe.

After the fight over the peanuts involved in the “negotiations” over keeping the government open, the next hot topic appears to be the Liberal Keynesian clamor to raise the debt ceiling so the country can borrow more money.  The rationale given is that if we do not raise the debt ceiling thereby allowing us to borrow more money, then it will be a disaster because we will have to default on some of our loans.  What?  Do they not realize what they said?

Basically they are saying that they do not have money to pay the sources from which we have borrowed money and so their best solution is to… borrow some more.  They want to borrow more money to keep from defaulting on previously borrowed money.  Put simply, the plan is to borrow more money to help with their debt problem.  Before becoming President, Senator Obama knew the reality of this and eloquently railed against raising the debt ceiling calling the need to do so a failure of leadership.  He was right then and that statement is STILL right.  But now that he has to apply it to himself, he is saying it was a mistake.  No, Barrack, baby, it wasn’t.

Does anyone out there with some credit card debt see that as a good way to get out form under their debt?  In fact isn’t precisely that approach the first step down the road toward real bankruptcy for so many of us?  We don’t want to cut back, we don’t want to lower our expenditures for material things we have come to see not as niceties but as necessities, we don’t know how to raise our productivity, so we get another credit card to use or raise the limit on ones we already have.  And has that plan ever worked?  No.  So why will it work for the government?

“But, but, with that “breathing room” they can now tackle the underlying and real problems!” goes the cry supporting the plan.  Really.  And i would believe that, why?

In the last fight over a tiny fraction of the budget problem those who wanted to cut back were accused of “…coming to town to kill women!”  They were going, with the paltry cuts proposed as a stop gap, to starve children and old folks, it was screamed about.  So do you really, for a split second, believe that those same people will not fight tooth and nail when the REAL cuts are being proposed?  THey do not want to cut a penny.

As I have said before, the problem is simple.  The citizenry wants more goodies than the government can afford or that they are willing to work for themselves.  And that has led politicians to give them those goodies and in return they keep getting voted in to keep the slop flowing in the trough.  When the revenue did not meet the demands of the expenses, to keep themselves employed by keeping the people happy, the politicians simply borrowed it.  It was easy.  Too easy.  They borrowed it from China, Japan, Saudi Arabia, Great Britain, they even printed money and are borrowing it from themselves!  But astonishingly they kept spending at a rate higher than the initial borrowing could handle so they need to increase the borrowing.  And now the deficit (the amount needed to pay for those goodies that we do not actually have) is in the trillions while the debt itself is in the tens of trillions.

And now they want to be able to spend more (raising the deficit) and borrow more (raising the debt) as a solution to it.  if you wrote this as a novel most people would say it makes so little real-world sense as to be unbelievable.  When a situation arises where you do not have the money to pay for what you want and you can no longer borrow money, then you have a clear set of choices; only have what you can pay for, or increase your revenue.  The government is no different.  To be fiscally sound they can either deliver only what the government has the money to pay for, or the citizens have to agree to pay for the services they want.

That is so obvious and so clear, to push for an obviously disastrous third choice, i.e. to raise the debt limit so you can borrow more, is nonsensical on the face of it… if, that is, the goal really is to achieve fiscal stability.

We have long ago passed the point where solutions will be pain free and are well into the phase where solutions will really hurt across the board.  But no one wants to be the ones in pain: they want those OTHER feeders at the trough to be the ones to suffer, but not themselves.  Anybody else hurting is OK, but not themselves or their pets.  So why would anyone believe that the coming fight over the real money is going to be any less rancorous than the fight over the paltry money (in government terms) just fought so viciously over?

Or, since that line of thinking that you can borrow your way out of debt is so bizarre is it possible that applying Occam’s Razor to the issue (Occam posited that the simplest solution was usually the correct one) we might have to realize solving the problem is not really the goal?  Perhaps the problem is, to the ones in charge, not a problem at all but actually a tool and a means to an end. Our system, unique in the history of world governments, was so well thought out, has been so strong and so able to persevere since its inception, the only way to truly transform it, as King Barrack says he wants to do, is to tear it down and start over.  That would be nearly impossible.  Only if the system crashes will there be a likelihood that a new one, built on the constantly failing european social systems can be built in its place.  Hmmmmmmm

Now that is, to me at least, a really ugly line of inquiry.  I do not want it to be true.  But since the declared reasons are so fallacious and spurious on their face it logically means that either the people supporting the declared reason are stupid beyond belief, or that rationale is simply there to cover for a truth that does make sense.

So I need a little help here in figuring out the truth of it.  Can someone show me how it has ever worked to borrow their way out of a debt crisis and if so, how that translates into the government’s avowed plans?  And if not, then can you explain why the sheep are knowingly following their bellwether leaders to almost certain doom?

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Posted by on April 12, 2011 in Uncategorized


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A Trillion Here, A Trillion There… Pretty Soon You’re Talking a Real… Disaster

Wow, the ever gracious and wise congress agreed to a deficit reduction of just under $40 billion.  Compared to the actual deficit of several Trillion that is chicken feed and compared to the National Debt it is utterly inconsequential.  Do you know how much a single  trillion dollars is?  Actually do you know how much a million dollars is and if you have that much do you recall how hard you had to work to get it  (unless you had a parent who was willing to work and just gave it to you…)?  Well if, starting on the date commonly ascribed to the birth of Jesus, you had been given one million dollars every single day until now… you still would not have but a fraction of a trillion dollars.

And if the ever-so-entitled feeders at the government trough are going to go to the wall in some of the most despicable and false scare language I’ve ever heard over an amount that is a tiny fraction of the deficit (the difference between what we take in and what we are committed to spending) then how are they ever going to deal with the REAL number to get the country back on a fiscal even keel?  The reality is that the country, especially the liberal side of it, has for years wanted the country to provide for it things they have also been unwilling to pay for.  They want someone else to pay for it, but oh, they deserve it anyway.  I’m sorry, breathing is not a reason for support by me or the government.  One of the freedoms that made us great and provided serious motivation for productivity was the “Freedom to Fail.”  We allowed people to fail and either learn from that or go sit on their rock in mindless contemplation and starve.  It was their choice and they had a right to make it and accept the consequences.  We need to return to that ethic.  Without the Freedom to Fail the other freedoms will soon be seen as detrimental to the protected society and done away with.

The country and the citizens, to be fiscally sound, have a very simple choice to make: do they (a) deliver only the services that the people are willing to pay for and stop there or (b) can they talk the people into actually paying for the services they want?  In the end, to be fiscally sound one or the other action has to take place.  THe government has only one source of income: you the people.  It does absolutely nothing of a productive nature to earn any money on its own and has to rely on the tribute needed  by confiscating some of what YOU have earned.  It has no magical money tree, no hidden treasure vaults, and unlike the european Kingdoms of old, has no “new world” of its own that it can plunder for its riches.  Just us.

We cannot forever try to make up the deficit by borrowing more money and thereby increasing the debt.  Why is that not obvious to every one who has ever tried to make ends meet as a family?  When you get overextended sometimes you have to eat hamburger not steak, sometimes it is chicken not beef (I’m not ignoring vegans I just have so little in common with them i do not know a workable metaphor for them).  Sometimes you keep the old car and wait for the new one until you can afford it.  But those people living off of other people’s money via government handouts have no clue about such things nor are they willing to have to substitute chicken for the beef for which they have become accustomed.  And neither do the professional politicians against which Franklin and Jefferson warned us back at the start because they can make rules for themselves that are very different from the rules they make for us.

They are like those of my colleagues in academia who have had no real experience trying to make a living outside of the protected fantasy arena of education and simply want the government to give them more money so they can continue doing the only thing they know how to do despite the stunning facts surrounding the failure of the entire educational system in this country.  In the real world many of them would have been fired long ago.  Now protected by the equivalent of the Prince of Darkness, they simply whine, with the others, that “they” need to come up with more money.  They are like a caged monkey with its pathetic hand out for some peanuts because it can no longer forage for itself.  Now THAT is greed: the desire for economic protection totally divorced from the individual’s contribution to that pot from which the protection comes.

I just did my taxes.  I am a college professor.  I made less this year than last and paid more taxes for it.  What?  I had a third more income than national average and paid twice the average in taxes. And then I hear the idiot congress woman complain about the shut down saying she couldn’t afford it… on her $200 K plus per year and pension for life she was, she asserted, “…living paycheck to paycheck just like everyone else.”  Her salary is over three times what I make living here in one of the higher cost of living areas of the country.  Ask me how much sympathy I have for her.  Everyone else?  Please, does this not tell you how out of touch they are?

A dear friend recently tried to tell me our problem was all greed.  I agree but I think she is looking at the wrong segment of society.  I do not think it is greedy to want to keep the money you have worked for with either your muscles or intelligence.  But I do think it is greedy for someone to want that productive person to then carry them because they won’t put in the same effort.  Before you misinterpret that let me quickly assert that I think if someone has been blindsided by life, e.g. health has failed them, something out of their control and that did not in any way flow from a choice they made has devastated them, then yes, to the extent we can, we should try to help them get back on their feet.  but the operative concept is to “help” them not to simply carry them and facilitate their never getting back into society in a productive way.

That paltry $30+ billion finally agreed to be cut by congress was all in so-called “discretionary” budgets.  Well I think entitlements are discretionary too.  We CHOOSE to help people when we can afford it; but when we cannot… we cannot.  Except for professional idiots like Michel Moore what does “no money” mean to you?  What does the math that you are taking in far less than you are paying out mean to you except that you have to borrow more and more money?  Why does not Moore, whose brain is a thick as his girth, not get that?   In preparation for government shut down that never happened we heard that “Non-Essential” people would be laid off.  Wait a minute… why should we the people pay for a single person that is non-essential and why would a government of, by, and for the people have them in the first place?

Now I’m not here to let corporate greed escape condemnation too.  Like the handout crowd at the trough, they are doing what the system allows and I think it needs to be tightened on BOTH ends of the spectrum.  Having GE pay no taxes is incredible but it is, under current law legal.  just like giving full protection and economic deals to illegal immigrants.  The problem is that in congress we have each end of the economic spectrum represented but not the country as a whole.

I do not think this congress has the stomach for the fight ahead and the few that do, that actually listened to the people in the last election; are so in the minority they will not have that much power anyway.  i expect to see the most insidious and scandalously false accusations of those trying to rein in the impending doom as simply wanting to kill women, children, minorities, endangered species, the planet, and God knows what all.  But here is the truth of it.  Only this country can protect those things, only this country has the potential power and might to do it.  But not if we are broke.  We cannot help others if we are crippled ourselves.  in order to regain that position where we can help others we have to make ourselves healthy again and that means a period when we have to withdraw from world policeman status, and seriously tighten our own belts.

I will be asked to pay more taxes to help.  I refuse until I can see that all of the extra money being asked of me is NOT going to simply be used to pay for more entitlements, more warm and fuzzy programs, and more funds to prop up and facilitate tin-horn tyrants around the world.  Show me that we can cut the real waste, like all — ALL — of those non-essential people and all — ALL — of the duplicated programs and services, then and then only come and see if I am willing to kick in a little more if it is needed.

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Posted by on April 9, 2011 in Uncategorized


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