Tag Archives: US debt

2 Cents Worth On Life Its Ownself

Do we laugh, cry or just go into our hole when we read the headlines from today?…thoughts and reflections on same follow.

Well, it is Yellen for the new Fed Chairmanship.  One wonders  a year from now who will be yelling for Yellen or yelling at her.   The elderly and the prudent savers of the US certainly won’t benefit from her severe easy money policies and extremely low interest rate regime.  The ants will continue to get crushed for their diligence and hard work and the grasshoppers will continue to eat off the fat of the land produced by the ants.

The arguments and conflict over the debt ceiling and payment of the Federal debt has been around since literally the inception of the country.  As we transitioned from the interregnum after the Revolutionary War to our current Constitution we had a big argument then about the debts run up by the Colonies to fund the War.  There were many who advocated not paying all that debt especially to the foreigners who had bought it i.e. the Dutch and French and even some Brits.   But Hamilton’s view prevailed and the Constitution honored all the outstanding debt of the US, Colonies.  Yes, there were some “fat cats” in the US who also profited enormously from this decision because they had bought up many of those bonds for pennies on the dollar.  But Hamilton and the like-minded believed we had to pay all those bonds to protect our credit and against the future need to borrow more and that meant paying all creditors regardless of their moral worth.  They were all paid 100 cents on the dollar with interest.

We are not yet bankrupt or a dead beat because the US does have the capacity to pay all its debts in full.  The current argument is correctly about future fiscal policy to see we remain that way.  The current trajectory of the Democrats will indeed drive us to bankruptcy.  That can and must be changed so we remain solvent.  The existing fight truly is about making the Democrats recognize that reality and adjust our spending accordingly.  Yes, the guy in the White House has it right–the numbers do not lie.   Houston, we have a problem!

Unless you keep up with the foreign press reports you would not know that the Arctic sea ice has in fact increased this year by 60%.  Strange that the Europeans are even more paranoid about the global warming hysteria than we are but they are the ones that most often report the facts and critiques of the IPCC reports and global warming alarmists excesses.

Historically, the Democrats and the Paul Krugman’s of this world have taken the position that the US debt is not a major worry because with just a little tinkering we can grow our way out of it.  They believe that increases in population will result in constantly growing GDP and thus the size of the debt will be manageable in relation to that larger economy.  Many arguments can be made against that proposition on the merits and the numbers especially when you include in the off balance sheet liabilities like Social Security and Medicare.   However there is one other flaw in the dialectic, who can guarantee they we will continue to grow?  Japan and Europe are already in the midst of a significant population slow as is China.  Why wouldn’t that happen here?    Then the debt would loom even larger not seem manageable relative to the size of the overall economy.   Those Democratic liberals are making a gamble on the future based on what scientific evidence?  They love to talk science.  But that theory is faith, not fact.

We’ve passed the Harvest Moon and already the moms in our neighborhood are putting out their Halloween stuff in the yards and on the doors.

I want to be safe and secure in the US and have no problem at all with taking out  the bad guys around the world.   The radical Muslims are our enemy and we do need to be vigilant and aggressive in combating them.  But, but, but….do we really need a million square foot facility in Utah for NSA in addition to all those thousands of worker bees there in the DC area?   Do we really need those 50,000 plus TSA folks doing those ridiculous searches at the cost it requires?  I don’t travel much anymore but when I do I sure don’t feel any safer with them around.  I don’t think they would deter in the slightest a serious terrorist bent on mayhem.  Indeed my last trip through their procedures I was questioned by a black lady wearing her hajib.  That didn’t exactly increase my level of confidence and it sure didn’t help that she was rude to boot to everyone passing through her line.   There are over 35,000 in the FBI and 114,000 in the Justice Department.  There is no way we need that many people protecting us from those breaking Federal criminal statutes.  They need to be cut back, not eliminated but cut back for heaven’s sake.   The FBI used to do most background checks for security clearances but they don’t even do most of that anymore it is done by contractors.    It seems to some of us that we have lost our sense of balance on these issues.

And on that subject why does the EPA, the IRS, Labor department, Interior department and many others have guys running around with guns and badges?  Can’t they have the FBI do the arresting when they come across a crime.

Wouldn’t it be interesting if the Feds were required by law to list all their departments, agencies, bureaus and the zillion other special committees along with their cost and personnel count online.  It wouldn’t be binding of course but then allow the public to “vote” on each one.   Either to eliminate it completely or change the funding level for each identified entity.  Might be a true wake up call for the Feds.

“All I know is what I read in the papers.”  Will Rogers  http://www.olcranky.wordpress.com

 

 

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2 Cents Worth On Life Its Ownself

In spite of sequester the computer still works and I even managed to fill up the tank this morning, at a high price I might add, so let’s review the thoughts, comments and musings of the day…..

Why didn’t anyone at last week’s testimony of Bernancke ask the most salient question?   He should be made to answer under oath what the interest rates would be for US bonds if the Federal Reserve quit buying any of them.  Since the Fed is buying approximately 80% of all such bonds their price and interest rates are being manipulated outrageously.  The Fed is in fact cornering the market on such bonds.  We all need to know what the true “market” value  is for such US debt.  That false and fraudulent market manipulation is simply allowing the US to run deficit and higher debt ceilings as the Fed prints up new money to “buy” the bonds.  The market for US debt is phony now.  We all need to know what people around the world would loan and what interest rate they would demand for our debt.  Those rates and market demand drive everything in our economy from credit card debt and car loans to house mortgages.   The cost of profligacy can only be postponed, not eliminated.   Yes, because of the Fed we have very low interests costs now.  But that doesn’t mean we’ll not have to pay for the borrowing later when interest do go to a real normal market driven level and spike even higher to compensate for the higher debt level of your prior profligate ways.

Folks say the Republican party is absolutely doomed because of demographics.  Assume they are right.  When the Democrats have won everything there is to win and control the political process nationally and even in most of the States one wonders what their immigration policy will be then.  After all at that time they won’t be needing any new voters coming to their clarion call.  They will have won.  Who will care about new votes?  What incentive will they have for new immigrants and of course at that point the unions will be riding very high and they certainly won’t  be promoting any new immigration platform because their whole purpose is to protect union jobs not open them to competition from immigrants.  Be interesting to see how that turns out, if the predictions are true of complete Democratic dominance.

Maxine Waters says sequester will cause us to lose 170 millions jobs.  Hmmm, didn’t realize we had that many 12 and 10 years olds in the workforce.   Last I heard there were only about 150 million workers of all types in our economy.  But facts and logic never get in the way of a good Leftist rant.   Just think you and I pay her 174K a year for that brilliance plus whatever under the table profits her hubby makes off of his banking investments from regulators that get calls from her.

Greece established colonies around the Med.  One such was Marseilles.  They called in Massilia.  About the time of Alexander the Greek, one Pytheas sailed from there for the open sea beyond Gibraltar to  search for tin and amber from England.  It had been the dominance of the Carthaginians for centuries.  He was a merchant and obviously a true explorer.  He worked his way up the west coast of Europe from Portugal to France then across to Cornwall where the tin mines were. He wrote of an ancient monument that may well have been Stonehenge and gave a description of the land and his climate and people.   He sailed north beyond the Scottish coasts and went to Iceland or Norway although the descriptions are too vague to specify.  He was far enough north to describe sea ice and pack ice floes.  He wrote of the nights being only a few hours long.  What is amazing is that he made in and essentially open boat all that way and returned through the English Channel and home.   Julius Caesar may have had access to his writings to influence his decision to make a reconnaissance in strength into England almost three centuries later.   No magnet, no GPS and no maps or sea charts.  Pretty remarkable feat.

North Korea makes another threat to nuke us because we are hostile and our sanctions amount to war on their people.  That Kid they have running the place must be as dumb as he looks and he sure looks dumb.  I don’t know why we don’t take out all their nuke facilities now, right now.  Yes, there would be the usual hue and cry from certain quarters around the world.  Even China would verbally raise hell but the truth is that everyone would be relieved.  The Chinese, Russians, Japanese  and the South Koreans would love to have that threat removed from their back yard.   The world would be a safer place.  Nuclear bombs shouldn’t be in the hands of dolts and guys who think it is cool to hang out with the likes of Rodman.  Having access to nukes is way beyond his pay grade.   It makes no sense for the rest of us to suffer catastrophic harm because of his schoolboy antics.

All our politically correct and civil rights laws could be summed up in a short phrase from Proverbs:  “I will render to the man according to his work”. Proverbs 24/29.  We really don’t anymore guideline than that.

“Take heed lest thou become a Caesar indeed; lest the purple stain thy soul”.  Marcus Aurelius.  Roman Emperor and philosopher.  180 AD.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

We didn’t even  look for things to interest us but the flow of information and misinformation from the media compels further review…..

Wow, Mother Nature revealed again how puny our doings on earth are in the grand scheme of things with that asteroid display over the Urals mountains Friday.   The reports are of hundreds of injuries and some relative severe damage to windows and structures from the sonic boom caused by the explosion of the descending asteroid.  Ironic that the news has also been ripe in the last week with the information about the passage of that large asteroid some 17,000 miles away today which in astronomical terms is whisker close.   Of course what we never remember is that each and every day we are bombarded by thousands of smaller asteroids which in turn shower us with hundreds of tons daily of debris from space. It pollutes our atmosphere and the EPA is doing anything about it!

The blooms on the Bradford Pear trees are going to burst out today or at least by tomorrow; they are on the verge.   At our latitude you can about set your calendar by them; they come out within 48 hours either way of Valentine’s Day each year.

Noticed several news items this year critical of the whole concept of the State of the Union address as a relic that should be radically changed.  It has become pure political pageantry.  I have said it should be eliminated for several decades now.  The President should issue a formal written report to Congress and have a serious working meeting for a day with top Congressional leaders where in fact they question him about the current concerns and issues of the day and the actions he purposes.  We get enough campaign speeches during the election season there is no need for another.  This should become the norm regardless of the party in power in the future.  The Congress can control this if they have the will.  After all it is they who have to invite the President to make the address in such a formal setting.  They can change the rules of the delivery of his report.

Once we got the cell phone it was only a matter of time til we reached the Dick Tracy stage of a communication device like he had.  Yep, the news now is that a couple of outfits in the biz are thinking of a “watch” smartphone.  You can phone with it, send messages, see videos and pictures and receive everything you get on the smartphone your carry in your pocket.  It was bound to happen.

Those people much smarter than me are finally also talking about the problem of our debt/money printing style of economic planning and policy and its effect on the value of the dollar.  A few decades ago well over 70% of all international transactions were denominated in dollars, today the figure is just barely over 60% and declining steadily.  Have a very strong and esteemed currency is good for our US economy even though it makes our exports a bit more expensive.  There are many more off-setting advantages to having the world standard currency.  More and more the yuan, Swiss franc and Japanese yen are used for those international transactions.  Factually, the Chinese have stopped buying our Treasuries already.  For a couple of years now they have bought them but at the same time have sold off other that matured and thus there net holdings have held steady at about 1.1 trillion.   The world markets (think Singapore, Australia, the Middle East, Japan) will one day soon turn on our debt (Treasury bills and notes) and stop buying them because they will fear even more Federal printing to cover our debt and deficits.  The interest we have to pay on those bonds will skyrocket.  You ask what does that have to do with Joe Blow–plenty, all his credit card, car loan and mortgage debt will go up even more and the Feds will likely demand even more taxes at the same time to cover the increased government expenditures.   The ONLY reason our Treasure debts are so low right now is because the Federal Reserve is buying over 80% of all of them with freshly printed made-up money on that money tree they have out in the back yard.

Chuck Hagel, Secretary of Defense or Surrender?

Some watch the science or history channel and see those episodes about how the Earth is doomed in the long run because our Sun will someday go nova and literally devour us as it expands.  Yep, that is true.  But we will already by long gone anyway.  The outer core of the Earth is molten iron that rotates around the inner solid core.  That movement of the iron is what gives us our electromagnetic field.  You know, the magnetic north pole and south pole.  Well, it is what also protects us from the Sun’s radiation now, today.  Without that protection we’ll not survive.  Mankind and all other forms of life worth discussing with be fried.   Just as Man doesn’t live forever, Mankind will not last forever.  We would have to leave the Solar System for another world.  That ain’t likely for lots of reason not the least of which is we won’t find another earth-like planet and it would take millions of years to get there unless you can find one of the time warp thingies.

The good and bad in man, the noble and venal haven’t really changed since recorded time.  The nature of Man is so poignantly revealed in the Bible stories.  The worst of evil, Satan, and lots of heroes but most of them as to be expected have their faults too–David, he slew Goliath, was a hero but he also had Uriah slain just so he could have his wife.  We haven’t and won’t fundamentally change regardless of modern secularist theories and that isn’t all bad because we each still have the choices to make that direct our life.  We have plenty of examples of the choices we should make even when they are the harder ones.   You just don’t go wrong doing the right thing even when you are pummeled by others at the time for doing it.
“Be not wise in thine own eyes: fear the Lord, and depart from evil”  Proverbs 3, 7.  Good advice then and now.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

The Holidays are upon us but the news cycle never stops for Holidays and thus…..

Already you hear the mantra that if we don’t increase the Debt Ceiling from 16.3 trillion by another 2 trillion plus that such refusal will cause a default on the US Debt.  That is a bald-faced LIE.   The latest estimates are that the US will collect about 2.7 trillion in this fiscal year or maybe a bit more.  The Feds will have money, lots of money.  If the debt wasn’t increased they would have to figure out where they were going to spend that 2.7 trillion and establish priorities.  They w0uld have top live within their means, what a novel idea.  They naturally could pay the interest and principal on the government debt first.  Their choice.  I don’t recommend not raising it some if there is a solid agreement to  reduce spending dramatically.  But we here just can’t abide dishonest conversation and the presentation of optional actions as concrete fact.

If the Feds don’t fix the Alternative Minimum Tax there would be a huge tax revolt and mass confusion.  The latest estimates are that 28 million families could be ensnared in that tax quagmire and many simply wouldn’t have budgeted for the extra taxes they would owe.  Many simply wouldn’t pay or couldn’t pay that higher tax.  There would be at a minimum  a large red tape jam at the IRS.  Maybe that wouldn’t be such a bad thing.  The outrage would be enormous.  These are the truly “middle class” folks all the politicos say they are there to help.

Those of us who cherish our freedom and freedom of the internet should keep an eye on the progress of the push by many countries in the UN to take control of the internet.  There are 193 “countries” that have a vote on this issue and it is likely that a majority will vote to have a UN agency and/or individual countries with the UN imprimatur of this vote take over the internet.  There are many things wrong with the internet now and daily abuses as we all know but I’ll take that hassle any day over any kind of governmental control.  We darn sure shouldn’t want Ghana, Dubai, China or whoever to have any say regarding the free flow of information on the Net, even the silly or erroneous info  that is there.

I can still remember that first Lionel train set I got when I was about 5 years old.  I am sure it cost my mom and dad a fortune at the time.  The engine alone must have weighed almost a pound and it even puffed smoke at the stake up front.  Kept that thing for years and then like so many items it got lost in one of our moves but the memory of it lives on.

Egypt is looking worse and worse with each passing day.  It slowly but inexorably slides into a Islamist fundamentalist trend.  Do those people in the Administration really believe that Syria will be a shining example if and when Assad falls?  We are not likely to come out of that situation  with a dependable or reliable ally in the Mideast.  Indeed the outcome could be far worse with one more hostile Islamist regime in place.

If BO were to attempt to raise the debt limit by executive order the Congress of both parties should advise him that is an impeachable offense.   Such dictatorial action goes beyond any current President or circumstance.  Congress has boatloads of problems and shortcomings but even with all them that is preferrable to the arbitrary whim of a President.  We don’t elect them King, only President.

This constant argument about protecting the 98% we hear from BO I find curious.  Give or take there were about 60 million people who voted against him and for the Republicans last month.  Only a relative handful of them were in the 2% yet they voted to protect everyone.  The vast majority of that 60 million were voting their conscience and what they believed was in the best interest of the country not to benefit their own pocket book.  You can make your own comparison as to the motives of the 60 plus million who voted for BO.   I never found a “beggar thy neighbor” approach to politics or government policy good for the long haul.   Someday sure as the world you’ll be the “neighbor” in the cross hairs of the majority of the voters.

If I were King for a day one of the things I would do would be to repeal thousands of the Federal criminal statutes.  There are so many of them today that no one knows exactly how many there are.  They potentially intrude into every aspect of your life.  The vast majority of them are never used or enforced.  The problem is that they are used selectively to punish those determined to be a difficult for an Administration or one of its Departments, agencies or bureaus or even worse the spite of a US attorney.  Make no mistake those guys are highly political and will go against political enemies in a heartbeat. Further all of our Federal criminal statutes should be in one location, in the US Penal Code and no where else.  Now they are scattered throughout the hundreds of thousands of Federal laws and regulations.  That is a set up for abuse.  It is one thing to say that ignorance of the law is no excuse but our citizens should at least be given a reasonable man standard about knowing some of the arcana of the Federal criminal laws.

“Fame is proof that people are gullible”  W. Emerson, American poet, essayist.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Let’s dig through that old trunk in the attic and see what we can find…..

“the private sector is doing just fine”….naturally there was more than just an “hmmm” to that remark by BO.  Next thing you know he’ll have those bands start playing “Happy Days Are Here Again” rather than “Hail To The Chief” to set the right mood for his economic messaging.

How can academics by so smart and completely stupid at the same time?  We have an enormous debt and deficit problem.  Those that can do 4th grade math can see the problem there.  The liberal (European) solution is to print more money to cover the increased debt so that more debt solves the debt problem.   According to them we then re-distribute that money and use the “multiplier effect” whereby they assert that for every one dollar of money given by the Feds to anyone will produce a dollar and half of economic value.  Lord, why don’t that just give us all a lot of money and we’ll go spend and everyone will be rich.  Of course, I don’t know how you’ll get food, or gasoline or a car repaired or a haircut or anything else that you need.  After all who would need to work?  In the land of Oz anything is possible apparently.

You’ve heard of and maybe read “Two Years Before The Mast” by Dana.  It is the tale of the terrible conditions for sailors in the early 19th century.  There is some truth to that story.  But like so many headlines it is always good to look behind the curtain a bit and see the full show.  From the early 16th century traders from Europe and then the Americas were making sailing trips to the Far East and Mid East to barter and trade for spices and silks and other goods.  They took with them clothe and other manufactured goods to trade for those items.   Yes, it is true that the wages were generally very low but there was a common bonus feature that is too often overlooked.   A typical trading ship is say 1680 would allow the common crew members and set amount of storage on board.  Normally it would be measured by weight, pounds and/or square footage as another limit.  The sailor from the Netherlands or England could fill his portion of the ship with whatever he wanted to take East for trade.  Likewise on the return, he could fill his part of the hold with mace, ginger, cloves, pepper or other desired spices.  They would make a huge profit on their return home.  They wouldn’t become wealthy but quite comfortable for that age.  If they made several trips they could become quite well to do.   Of course that journey was dangerous and more than half did not survive the year plus round trip voyage, mostly due to disease, malaria, dengue fever and the like.  Point is though that they all weren’t dressed in rags upon their return to Bristol or Amsterdam.

Something is weird about the Commerce Secretary Bryson’s recent bizarre hit and run incident.  Maybe just a tragic story of a medical condition.  But I for one don’t believe the White House didn’t check into the details before the Press Secretary started his recent news conference.  In times past when an incident occurred with a member of an Administration that involved the police or a hint of scandal they would come to the defense quickly and forcefully of the team member, or fire them.  The no comment in effect that they gave makes one think there is something more than the announced alleged medical problem Bryson supposedly had.  If that were the whole story then the WH would jump to his defense; the hesitation is puzzling.  Stay tuned for the details that were surely emerged.

Defenders of the Administration have recently cited several times the Internet as an example of the Feds promoting innovation through research and development money put up by the Feds.  It is true that the US military did develop much of the basic structure for computers communicating with each other.  But that was strictly for military use in communications and control of satellites and other weapons systems.  Of course IBM and Cray were doing the heaving lifting in all those advances, not some Army sergeant and White Sands.   Furthermore that world-wide web was the brainchild of a Brit.  He is the one who realized all the computers everywhere could be joined and an information exchange.  Again, that had nothing  to do with the Feds or Federal advancement of private enterprise and innovation.  Just like it was not Al Gore it also was not the Feds that gave us the world-wide web that you type in on every web address.

As they say, let’s follow the money.  Someone or some entity in Europe (you’ll note that little detail is missing so far from all the news reports) is going to loan money directly to banks in Spain.  The lender(s) didn’t want to be seen supporting the sovereign debt of Spain because Spain has to clean up its act the European Union says.  But the interest rates for Spain have shot up dramatically.  Spain will still regulate its banks just like we do.  When the Spanish banks get that money for Germany and their entourage, and the Spanish regulators come along and “suggest” it would really be nice if they would use that money to buy Spanish government bonds do you think those banks will refuse?  So, the money will end up going to the Spanish government after making a short stop at the local banks.   But it is only 125 billion, pocket change apparently these days.   But the European will sure be showing those Spaniards who is boss by not giving the government there any money directly.

“Capitalists are no more capable  of self-sacrifice than a man is capable of lifting himself by his own bootstraps”  Lenin.  Rebuttal evidence–The Greatest Generation.  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

The following opinions are those of the escapee and not those of the sponsor……

Everyone wants to be treated with dignity however so many folks forget that you must act dignified if you want to be treated that way.  How many buffoons are treated with dignity?…..well, except for some unnamed politicians.

Before sugar became a highly sought after staple there wasn’t much “manufacturing in the world.  The old spice and commodities trades were merely shipping agricultural products around the world.  It was complex and dangerous but didn’t involve much processing.  Sugar on the other hand was quite complex.  You couldn’t just cut a cane and throw it on a pile and magically have sugar a couple of days later.  The cane had to be crushed with heavy rollers and then the sap had to be heated or cooked if you will right away or its composition changed.   The products of the cooking process gave not only sugar but molasses which was the heaviest and last of the residue from the process.   Once sugar became known it Europe it was highly sought after.  It was certainly not a necessity but a luxury if you will but all levels of society wanted it; hence the huge industry built up around its production in Brazil and the Lesser Antilles.  It was a true industrial process that was very labor intensive.  That is why the overwhelming majority of all slaves imported by the Portuguese, British and Dutch primarily went to those locales and not the US.  Oh, as a curious follow -up, most people forget that the importation of slaves was banned by the US in 1808, long before the War Between the States and was not opposed by the Southern States.

Silicon Vally companies are rightly associated with the green movement and renewable energy programs.  Yet the few they have are merely for show.  Those large companies, like Facebook, AOL, Google, etc, have numerous huge warehouses each filled with those servers.  Those facilities absolutely eat electricity.  There is simply no way they can use solar or wind power for their work.  In theory they could of course but it would take several square miles for each facility in windmills or solar panels.  And as we are learning quickly even if those panels or windmills are located in “remote” areas there is always someone who thinks they destroy the environment or a snail darter and sues to block them, e.g. the fight off the coast of Massachusetts over sea-based windmills.   Panels on the roof tops would only provide a tiny fraction of the needed power.   They need huge amounts of space.  Some have estimated that to power them all we would need an area the size of Arizona in solar panels.  Don’t take my word for it check it out for yourself.

Remember those 3 or 5 page essays you had to write for English or literature classes and how you agonized over them?   Well, go get a volume of the complete works of Shakespeare and leaf through it.  Even though it took him years to do them all you certainly will have a great appreciation for the sheer amount of labor he had to put into those epics.    He wasn’t writing on an eight grade level either.   How did he make those stories and poems so pithy, cogent and yet so beautifully written.

Have you seen those pictures of the Greenland ice caps and glaciers from the 1930’s?   Such an interesting story and filled with lessons for us today.  They sat forgotten after a scientific mission in 1932 for decades.  They reveal the ice and glaciers were severely depleted, worse than anything today.  Then they came back in a short period of time.  Old Mother Nature has her own way of doing things and we should be a bit more humble about thinking we have everything figured out.  

Some of the pundits on CNBC have promoted the idea that the Treasury should issue at least 500 billion of Treasury notes because the interest rates are so low.  It would be “cheap” money available to the government for whatever purpose.  As a theoretical proposition it makes sense if you need to borrow to do so at the lowest possible rate and the rates right now are on the floor.  But there is one little fly in the ointment–last I checked we were already around 15.7 trillion in debt.  To borrow that much more would require another immediate increase in the debt ceiling.   Politically it wouldn’t happen and in any event what is going to be our ultimate limit?  I mean we can’t just keep borrowing forever?  Even governments sooner or later have to pay their debts, ask the Greeks.

Do you think Frau Merkel can keep all the unruly children in check?  Maybe she should be more sympathetic with them after all they might really mean their promises this time.  What is it the 5th, 6th, 10th time?   How many times do the miscreants get to erase the blackboard and have a fresh start?   Trouble is that Dad has to buy a new car every time they wreck the old one.

The Good Book endorses the notion of the rule of law, contract rights and property rights contrary to revisionist theologians.  Just re-read the parable of the Lord with the vineyard who hired workers for his vineyard after different times of the day–some early, some mid-day, and some late in the afternoon.  But for each of them he paid the agreed price regardless of the hours worked.  Those who started early in the morning raised cain, alleging unfairness since they worked longer.  But the Lord replied with two questions–did you not agree to the wage and did I not pay it? and  Can I not do what I will with my own property?  Yes, there are other lessons there also but it does affirm the sanctity of the rule of law and importance of contract rights and their enforcement and lastly that private property was to be respected.

“A reformer should be exempt from the suspension of interest, and he must possess the confidence and esteem of those whom he proposes to reclaim.” E. Gibbon,  historian.   www.olcranky.wordpress.com

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Greek Gag Or Gagging On Greece?

The ebb and flow of events  regarding  the Eurozone and the Greek debt crisis makes it hard to determine whether we are watching a Greek tragedy or comedy.   Their theatrical accomplishments have endured for millenia because of their connection to the human condition.  They might have lost the ability to produce great theater but they still now how to stage great political theater.   The machinations of the Greek technocrats and politicians for the past almost two years now makes the Keystone Kops and the Three Stooges look like the Marine Corps precision drill team.  Maybe there are some lessons to be seen in their predicament but the issue is, will we learn from them.  Like the Good Book says, they hear but they do not listen.

As we go to press it appears that the Greeks have said they will agree to the debt re-work terms with the IMF, ECB and the major European players (Germany and France).  But the latest is that the unions leaders have threatened new strikes and some have foretold of blood in the streets to protect the government payments to all and sundry of the population.   The wonder is that the few who actually work in Greece can possibly support what they have for as long as they have.  Of course they haven’t, they have been living on borrowed money for years, not the product of the labors and capital.   They haven’t been producing enough income collectively and through their corrupt tax system to meet the expenditures to pay for those 50 year-old retirees and bloated government payroll.  You do realize that one in four citizens of Greece are on the public payroll.   The Greeks have made promises over and over for decades about their system and the reform of same.  But they renege on the promise every time.  That is their only consistency–never doing as they promise, including the promise to pay their debts.

Some Greeks are vocally assailing the Germans and asserting that they are trying to dominate them again just as they did during the War.  They can’t even keep their history straight.  It was the Italians that attacked the Greeks during the War, not the Germans.  The Germans only got involved when Mussolini couldn’t finish the deal.  Hitler was building up for his big set-to with the Soviets and was most peeved to have to divert resources to bail out the Italians.   But we humans of a liberal/welfare state mindset only take personal responsiblity as a last resort.  Those welfare staters are always going to look for a bogeyman that caused all their problems.

Again they Greeks have promised big cuts.  You may recall that last year they were going to reduce the public payroll by 30,000 but as of last fall only about one tenth that amount had actually, really been cut.   They have bought into the idea that there is a free lunch.  That the government can provide everything for everyone and keep their taxes low.  Their taxes are pretty high but collections are spotty because everyone cheats.  It is a national pastime just as it is with the Italians to dodge and elude the taxman.  It’s ok for government to pay for everything as long as the money comes from the “bourgeoisie” or “capitalists”.  The problem they have is the same as ours: even if you took all the money of the “rich”, it would only last a couple of years and then the money machine would be busted again except then who are you going to tax?  Everyone would be broke.

Their organizational skills remind of the Anarchists of Spain during the Spanish revolution of the 1930’s.   The Republican Front of Heminways fame and the dream state darling of the Left was a real hodge-podge of groups–Communists, Socialists, Basques and Anarachists who in many areas were the dominant force.   In Barcelona the Republican Front controlled the city and went on a rampage of looting and killing.  The Anarchists took over many industrial plants and utility production facilities.  Great joy!  The bourgeoisie and monied interest and church had been defeated and the workers were no longer subject to any control or exploitation by those hated classes.  Within days though everyone realized that the plants and industrial capacity had to be restored if they were going to eat, have water, prevent street crime and something to sell to the world for the lucre–money to buy necessities.  Of course all agreed that there would be no “bosses” or owners.   The common working man had prevailed and were no longer subject to the dictates of the money and ownership class and the professionals.  Indeed the emotions and rampage was so high that for a short period many men were killed on the spot on the street merely because they were wearing a tie.  The tie was taken as a symbol of belonging the dreaded ruling class.  I am not making this up.  So the workers ruled but guess what?  Everything ground to a halt quickly.  Nothing was working and no one was working.   The C0mmies as always were very tightly organized and disciplined and willing to kill quickly so they eventually gained controlled of the industrial capacity in Barcelona.   The workers were rid on one boss, but that vaccuum was quickly filled with another not necessarily to their liking.

The Greek mob may well win the day and take control of some new government of a sort.  Yes, they no doubt will stiff their hated creditors and all those globalists and capitalists at some point down the road.  What is their in their recent, or ancient, history to indicate otherwise?  They can be in control of their own destiny without those evil German creditors calling the shots.   No one will loan to that group after just watching creditors in front of them get cheated big time.   They can either grow up and earn what they receive or become the beggar nation of Europe.   There is no Alexander the Great on call.  Mayhap they should read their Plato afresh.  Truth was the centerpiece of his discourse.  They should start by being true to their word if they want to participate in the global community of commerce.  We don’t have an interstellar commercial system yet so their  alternatives are pretty limited. 

US debt 16 trillion by fall 2012; US deficits of over 1 trillion a year for the last three years and projected as far as they dare to predict; US debt to GDP 100%; liabilities for Medicaid, Medicare and Social Security of tens of trillions with no plan to have funds on hand to pay them when due; and now one in seven  Americans on the government payroll and many more dependent of government expenditures of one sort or another.   Worse, a Greek-like view among many that we can have the free lunch and that there are always “others” who can pay for everything.   With those cheery thoughts, have a nice day.

“I wish men to be free, as much from mobs as Kings–from you as me”  Lord Byron, English poet and Greek freedom fighter against the Muslim Turks.  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Let’s rummage through some of those leftover thoughts from the last week and see if there is anything worth the advertised price.

Sometime around election day this year the total national current debt will be about 16.2 trillion dollars.  That isn’t the total debt because it doesn’t include the unfunded liabilities for Social Security and Medicare for example.  Those push the debt higher by tens of trillions of dollars.   And we sit here and worry about Greece!  How are we going to pay our debts if we don’t rein in spending.  There simply isn’t enough money from the so-called rich to pay for our bills.   Don’t believe Bernie Sanders, the self-avowed socialist from Vermont when he says Social Security is sound for the next 20 years because it has lots of assets on its balance sheet.  Those assets are nothing but IOU’s from the Treasury.  We have already reached the downhill side of the mountain and are paying out more than we collect for Social Security each year and the deficit is growing.   Ok, politicos, start talking about this problem. 

Oh, the “entitlement” programs aren’t permanent despite the common belief.   First of all they are only good until the next Congress is in session.  Any Congress could simply repeal the whole thing.  Besides what good does it do you to have an entitlement if you are paid in Monopoly money?

Despite all the hysteria over the BP oil spill in the Gulf it appears that everything is fine.  That is not my opinion but that of NOAA.  The story was on the back pages of the papers but essentially they said that the oil was all gone.  It evaporated or was eaten by microbes in the Gulf for the most part.  That finding shouldn’t really surprise any thinking person.  The amount of oil leaked would be enormous if it all spilled out in your back yard but the Gulf and oceans generally are huge, huge places and the amount of volume was de minimus compared to the oceans of Mother Earth.  Other than those tar balls on the beaches which were cleaned up with over kill there isn’t any long-term effect.  When it comes to issues of Man versus Mother Earth it seems that hubris always comes to the fore and we think we have more influence than we do in reality. 

The recent Solar flare eruption caused only minimal disruption to our daily affairs unless your transpolar flight was cancelled.  Some day Old Sol will really belch and send a big wave of electromagnetic ions and such our way.  Everything will be cancelled and all our electronic gear will need to be shut down.  Supposedly the GPS satellites have some protection from those radiation waves.  Sure hope so but I would suggest you keep handy that old-fashioned magnetic compass.  History records that in the past these solar flares have caused the Northern Lights to be seen as for south as the Old South but hasn’t happened in the modern era with our dependence on electronic devices to manage our lives and our economy.  We’ll survive but it will be something to tell your grandkids about when next it occurs.

Iran in 1979 took Americans hostage and kept them for over a year until Ronald Reagan was sworn in.  Now its 2012 and the new Egyptian government, whatever that is, has held up some Americans from leaving the country.  They aren’t called hostages yet but the action is eerie.  There were those last year talking about how wonderful everything would be once Mubarak was gone.  Well, he is and things aren’t.  The one constant is that it is another Muslim nation being dominated by the Islamists.  The Muslim Brotherhood will soon be in complete charge of affairs there and we best deal with them for what they are, not what we would like them to be.

Of all the almost 200 nations on earth how many have a net worth equal to that of Apple?  Maybe the way to solve the Greek debt problem is to have Apple simply buy Greece.

Speaking of that national debt, you might what to do the math and you’ll find that every single, man, woman and even child owes over $52,000.00 for that debt.  How are you going to pay off your share and that of your family?

A government can unite the evils of liberty (mob rule) and servitude (submission to an all-powerful central state) by having the people oppressed with a multiplicity of laws and the arbitrary actions of their master.  Not an original thought with me but from Gibbon writing about the Romans of yore.  Still valuable food for thought.

The ancient Romans allowed interest to be earned on money at risk.  Their rates were 4% for regular loans, 6% for real estate, 8% for trade or commercial transactions and the highest was for marine insurance which went for 12%.  Yes, folks, the idea of insurance has been around for a long time.  Contrary to current political debate it is not something we invented in the last century.  Just as it was in our Colonial times, there was vast amounts of money to be made in the safe passage of ships with valuable cargo and a great deal to be lost if it was sunk by storm and taken by pirates.

For those believing that almost every scientist in the world buys into the Al Gore version of global warming you should review the letter in the WSJ on Jan. 27.  It is signed by 16 very distinguished and legitimate scientists, academics and Nobel winners from all corners of the world.   Maybe someone is finally willing to say the Emperor’s has no clothes.

Don’t understand the original thinking behind the dual mandate for the Fed–stable money and unemployment.   The money part is hard enough to understand and implement and the Fed’s success in doing that is quite mixed to say the least over the decades.  But unemployment?  Exactly how is monetary policy supposed to create jobs?  I am not the only one who doesn’t understand this.  Employers hire for many reasons but most have nothing to do with the monetary policy of the Fed.  Unless the Fed is going to extend its reach into the market and outright buy and own some industries how can it influence employment?  That is a scary thought especially since BO and his gang have already done that with GM, Chrysler, GMAC, AIG and of course Fannie and Freddie and then there are the misfires in Solyndra and that ilk.  Let the Fed just give us stable and sound dollars and low inflation and leave the market place alone; it can take care of itself if not hog-tied by regulations and money manipulation.

“No two human beings have made, or ever will make the same journey in life”  A. Keith, Scottish anthropologist.  Hmmm, but some liberals seem determined to attempt to make sure we all take the same journey and reach the same destination because they know what is best for us.  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

A few thoughts to ponder during the Holiday Season and ideas of the inquiring mind about the current state of affairs.  Buckle up and take the ride.

Greece has been much in the news lately because of their debt problems stemming from their very generous welfare state and highly regulated economy.   They are in a death spiral at the moment and trying to right the ship, or at least so they say.  There are some of us old enough to remember a little history about how they got to this point.   After the War most of Europe made substantial progress and improved the economic situation greatly all the way into the ’70’s.   Greece, Portugal and Spain were the noticeable laggards.  Their economies were third world during the period.  The European community was formed and the free trade zone established during this period which ultimately lead to the Eurozone with the Euro currency.   Greece wanted in badly in the ’70’s but lots of Europe was skeptical but they did want the whole nine yards and all of Europe to be in the economic union.   Greece couldn’t qualify on its own merit so it was granted special subsidies to be a member.  (No one ever accused the Greeks of being bad bargainers).  It was a great deal for Greece and the rest of Europe hoped it would be a good deal down the road for everyone.   Shortly after Portugal  and Spain applied for membership having ended the authoritarian reigns of Salazar and Franco. 

They were no bargain but again “Europe” wanted everyone in the deal because it would benefit all, at least that was the belief.  Guess who raised the most objection to them?  You guessed it, the Greeks.   They were already running deficits and their economy was still lagging behind everyone else but they thought the Iberians were too much of a load to carry.  To induce the Greeks to approve the addition, the rest of Europe again granted special privileges (subsidies) to the Greeks for them to go along with the Iberian additions.   With the extra money in their pocket for doing nothing more than saying yes, the Greeks were happy to welcome them in the early ’80’s.  We all know how that has worked out.  The Eurozone with the Euro came into existence finally in the late ’90’s.  The Greeks continued to have a bloated public payroll, low productivity per worker and huge deficits.  Others are having to step in and pay off the debts for the Greeks for their profligacy and the Greeks riot in the streets about how unfairly they are being treated!   Funny, I was always taught that whoever pays the Piper gets to call the tune.

Speaking of our friends in Europe are you getting as confused as I am about the way they intend to fix their debt problems.   We have the EFSF which is the European Financial Stability Fund that was is going to get money from somewhere; they can’t seem to articulate exactly where.  Then we now have the ESM, the European Stability Mechanism which is going to add more money to the bailout pot.  New ideas seem to emerge every week.  Will the ECB (European Central Bank) simply print up new money like our Fed does for its bailouts?  There has been talk of some authority, as yet not clearly specified, that will issue bonds and then loan that money out to the needy hands.  Maybe I am just not smart enough to understand the thinking of all those European “smartest guys in the room”.  I do know it all boils down to the Germans because they are the hardest working ants in the field and the most frugal.  Can you blame them for asking what they are getting out of all this?

You all remember the story of Robin Hood.  The complaint was tha the local Sheriff of Nottingham was in cahoots with some of the local big wigs and stealing money from the public coffers.  Am I the only one who has ever wondered why Robin Hood didn’t just go after the evil Sheriff and leave the others alone.  He ended up stealing from anyone he believed was involved in wrongdoing without trial or proof and then gave the money to his preferred special interest group and built a political machine.   Had the bad Sheriff merely been replaced with another Sheriff that had another coterie of cohorts after the same bag of money?  Was he really a hero or just another wannabe dictator?

I don’t get the Payroll Tax reduction for one year.  It will add up to about $80 per average family per month for the next year.  It is like the $600 check most of us got back a few years ago and the cut we’ve had this year.  That amount spread out over a year just doesn’t motivate lots of renewed spending by consumers.  I mean look at the economy for this year.  Has that cut of 2% in the payroll tax boosted the economy this year?  A year flies by really fast.  You reach your own conclusion.  I love all lower taxes but cuts need to make sense in a broader picture.  We would all love to have that extra 80 bucks a month but that won’t cause us to go buy a pick up truck; maybe we’ll do a couple of trips to Appleby’s with the family.  

After all the sound and fury of the last year the fact is that the National Debt is higher still and going up like a rocket.  All the talk about cutting hasn’t happened yet and the so-called cuts are merely reducing the amount of the growth of the debt which is currently projected be 44 trillion in ten years.   Maybe we are just Greeks writ large.   Everyone can’t live on the Federal payroll directly or indirectly forever.  Someone has to actually work in the private sector to create real wealth and money.  The Government doesn’t create wealth, it takes wealth for allegedly the common good.   As it grows the private sector shrinks and soon there won’t be anyone to tax if we keep on the present road.

“I desire what is good; therefore, everyone who does not agree with me is a traitor”.   George III www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Waterfront is full on ships bringing in new tidbits of data, rumors or even skullduggery for the consumption of the wise and foolish,,,,,so here we go unloading.

Seen lots of July the 4ths over the years.  I can’t really remember most of them and what I did on those occasions.  There were family events and sometimes on trips but the particulars blend into a maze of one jumble.  But I do recall one of them–the one in 1976 when we celebrated the 200th anniversary of the Independence Day.  Ford was President but we were on our way to having to endure Carter.  We had just left Viet Nam the year before, inflation was running too high, the damn hippies were still running around demeaning everything American and we had just survived one Arab oil embargo and times were definitely not the best.  We were dealing with the Watergate backlash and the mood was somber.  But for a few hours that afternoon and evening things were bright, cheery and positive.  The big celebration was in New York harbor with the tall ships, sailing boats and navy ships filling the waters.  Many of the ships were here from almost every foreign nation.  They shot up their fireworks, opened their hoses with colored water and the air was filled with patriotic music.  It was only an interlude but it felt good.  The ’70’s were pretty miserable by any standard and those few hours were a welcomed reprieve from the negative news of the era.

Geithner appears on his way out.   Sure hope the door doesn’t hit his rear end on the way out.  One wonders if he will figure out how to do his taxes back in the private world or at least hire competent CPAs to do it for him.

Some of the pivotal struggles at Gettysburg occurred on July 4th in 1863.  In addition to the fear and smell of smoke in the air it must have been miserable in that heat with the exertions by those men fighting literally for their lives.   It was another lesson for any winner in a grand struggle.  One major victory doesn’t mean all has been won.  In spite of the defeat, Lee was not defeated.  The War continued for another two years before the weight of the North’s industrial might overwhelmed the South’s resistance.

Conservatively speaking and it is very conservative, the US is paying at least 2 percentage points less on its debt than it has historically.  Wish someone in Washington would talk about that more.  The rates will go up again and most likely higher than the historical average in the medium term.  Calculate 2% of the total US debt and see how much more we will owe every year in interest.  In a few years the interest on our debt would equal or exceed the national defense budget. 

It is appalling that someone didn’t put the kabash on those photos on the front pages of our special ops personnel leaving the hotel in Kabul this week after the attack there.  You could see their faces and that is so dangerous for those men.  Surely you noticed that a couple of them were holding up their hands in an attempt to cover their faces.  How did that breach of security occur?

Worse than the strike affecting the NFL is the thought that it might continue throughout the entire season and no one will really notice or care.  Those college and high school games could well fill the void of those missing games quite nicely.   Somehow the strike won’t affect the economy or unemployment or even the overall well-being of the public.  It won’t be the end of civilization as we know it; it might produce improvements and reduce the infection rate from tattoo jobs gone wrong.

The recent decision of the 6th Circuit Court on the Obamacare is frightening.  The majority ruled that there is no “categorical” limits on the Commerce Clause.  That is very scary.  That means those guys believe there is virtually nothing that the Feds can’t regulate.   They could tax you for not smoking since under their reasoning that affects interstate commerce since the Government and State governments depend on tobacco tax revenues for some programs.  Your decision not to smoke reduces that revenue and therefore interstate commerce.  Read the decision for yourself please.   That interpretation completely destroys the concept of a Federalist system of government.

If the Dems got what they are asking for and the increase on the “rich” and reinstatement of the death tax, they would raise a little over 200 billion a year.  (Assuming those rich folks don’t alter their behavior in any way and smiling hand over the extra money)  Of course that would still leave a 1.2 plus trillion dollar deficit as far as the eye could see.   Would those tax increases make it more likely the lenders to the US would have more confidence in our dollar and Treasuries?  Would they seek even higher rates of return since the shortfall would  remain staggering, of Greek proportions?

Why do we have to be computer experts to do the most routine maintenance on our cars?

If the new proposed mileage standards of the Administration are implemented then the cost of the average car will go up a few thousand dollars and they will have to be substantially smaller increasing the fatality factor significantly.  Is the average consumer willing to pay that extra money and assume the additional risk to save Government Motors and  the planet from imminent death from global warming?

It would be a good thing for most men to have to spend at least one day of their lives digging and setting cedar posts for a barbed-wire fence on a hot summer day in Texas.  Believe me it will make them appreciative for other lines of work.   www.olcranky.wordpress.com

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