Category Archives: Debt

Is There Nothing the Kochs Can’t Do?

As a prime example of just how deranged the modern liberal movement is, check out this recent story — “Did the Koch Brothers Just Kill the Film and TV Business in Florida?

Is there nothing the Koch Brothers can’t do? (Or can’t be blamed for?) They even get blamed for being against tax breaks for the rich! (Assuming that they were actually behind any of this, which they weren’t beyond providing a lot of initial funding for a deregulation/taxpayer watchdog group many years ago and supporting like-minded politicians.)

Wait, a minute, according to smart people like Hillary Clinton, tax breaks for the rich have no trickle down effects. They only benefit the rich. But the union goons in the article talk about all the little who were helped by these tax breaks… I’m confused.

The article, clearly coordinated with the Democratic Party, liberal groups and unions, tries to argue several contradictory points — the tax incentives are small yet vast creating employment for thousands; very few projects actually used them yet without them all filming dries up instantly; and if there are no incentives no one would have any reason to film in Florida yet the incentives aren’t why people are coming to film in Florida.

Not surprisingly, the Florida legislature’s decision that giving taxpayer money to wealthy filmmakers (or betting on less-than-wealthy filmmakers) is a bad use of that money, is portrayed as a terrible idea. And it is implied that every Florida legislator that voted that way is a puppet of the Kochs and their group. They were incapable of making that decision otherwise.

So why are the Kochs doing this? The article doesn’t venture any theory beyond implying the Kochs are bad. It doesn’t even try to make a hypertenuous attempt to nebulously connect them to the film & TV industry.

Deadline just provided nothing more than Democratic Party propaganda. It’s just another tool of the party and no longer a legitimate journalistic venture. Treat it as hostile.

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Fuhgedaboutdadebt

The federal debt sits around $19 trillion and continues to grow. A sane person would worry about such a large number but Washington, D.C., does not contain a majority of sane people. Many in government think debt is a good thing and more debt would be a better thing.

Witness a June 3, Wall Street Journal letter to the editor by one Francis X. Cavanaugh, “the founding chief executive of the Federal Retirement Thrift Investment Board, 1986-1993.” He complains that a recent column worrying about the debt, especially in the light of the trillions of dollars in unfunded obligations to retired and retiring federal workers (which it totaled up to $118 trillion).

Cavanaugh says, “Mr. Melloan’s concern that ‘we have borrowed so heavily from future generations’ is baseless. Future generations will indeed inherit the liability of the debt but they will also inherit the offsetting asset of the Treasury securities issued to finance the debt. So the net impact of the debt on future generations is zero.”

Whew! That’s a load off my mind.

In case you didn’t follow that, Mr. Cavanaugh is saying that we can’t owe money to ourselves. All those T-Bills bought by American investors (including retirees), don’t have to be paid off; or rather the Treasury can just crank out more debt to pay them off. In fact, the debt is turned magically into an asset!

Don’t you wish you could do that with your mortgage debt; your credit card debts; any student loans?  They aren’t debts, they are assets. take that mortgage debt and use it to buy a car!

Even more good news from Cavanaugh, the feds in Washington can keep spending like drunken sailors because there really is no such things as a yearly “budget deficit” pumping up those federal accumulated budget deficit numbers. He says, “The maturing debt and the interest on it are effectively paid off by issuing new Treasury securities. So the controllable budget has been balanced on average over the past 70 years.”

He even quotes Abe Lincoln, “Men can readily perceive that they cannot be much oppressed by a debt they owe to themselves.”

It’s just that simple.

Except it’s not.

Like a lot of Lincoln’s quotes, the quote can be “perceived” two ways. Anyone can “perceive” the Earth is flat. You can “perceive” you don’t owe a debt. That doesn’t make it so. It doesn’t mean that the person who originally loaned the money is happy to wave goodbye to it.

As anyone who has paid off a debt with a credit card knows, that debt doesn’t actually go away. Rolling over debt eventually catches up with you. Admittedly, the awesome power of the U.S. government means that it can get away with things that you and I can’t get away with but it eventually will catch up.

Real people own that debt. They payed their money fairly and legally on the promise that the U.S. federal government was good for the debt. People like Cavanaugh think, SUCKERS!

Cavanaugh is typical of so many people in government. Their knowledge of economics is horrific, actually downright dangerous. Many of them, like Cavanaugh, seem to be of the mind that a future miracle is going to happen, perhaps finding a winning trillion-dollar Lotto ticket under one of the government’s many couches. The other group, socialists that are growing in power within the Democrat party (and hence the U.S. government), will simply cancel the debt just as they wish to cancel the now trillion-dollar student debt morass and are beginning to look at the mortgage market to patronize their supporters with repudiations and write-offs.

My recommendation, avoid federal government debt instruments. They might be repudiated in a future Democrat administration populated by in-debt Millennials.

We Spend $600 Billion Per Year On…

The United States annually spends in the neighborhood of $600 billion per year on its Department of Defense.

I’m going to toss out a serious question — are we getting our moneysworth?

Defense is one of those jobs that the Constitution has placed in the hands of the federal government, unlike so many other things that it has taken on (and now spends the majority of its budget on).

Yet, I look around and see a lot of troublespots in the world. And not just any ol’ troublespots, but troublespots that get Americans killed. I’m not really seeing our military doing much about that.

Now that’s not necessarily its fault. It follows orders and in the last few years, the fish has clearly rotted from the head. The Obama administration practices the “Lennonization” of politics; John Lennon, that is. “Give peace a chance” makes a great lyric chorused with a bunch of drugged-out hippies but it makes for lousy real-world policy.

In fact, the Obama administration has kicked into fourth gear what the Clinton administration really started (and the Bush administration failed to root-out and even tolerated), the transmogrification of the military into a giant social service organization.

Make no mistake, a large portion of our military can’t fight and won’t fight. Those soldiers and sailors (the Marines have been able to hold their line to some extent) are in the military not to serve America’s interests but for the benefits; to serve their personal interests. Health care, college money, etc. This ain’t your dad’s army.

Any army trotting out, even proud of, pictures of young women wearing ill-fitting helmets and unis, lugging rifles two-thirds as big as they are, is doomed if something big and scary goes “Boo!”

Ever see those pictures of the Hitler Youth during the battle for Berlin? You know it’s over then.

I live a stone’s throw from the Pentagon. I’m not that big yet I tower over almost every uniformed female I come across in the local stores and on the streets. At least half are not in any kind of shape.

I do occasionally come across a male shorter than myself but four out of five times this guy is lean and mean looking. I also figure he knows all sorts of martial arts and could fold me into an accordion in about five seconds. He is intimidating. The women, not so much. Part of an army’s strength is its reputation. Get my drift.

The D.C. Area has a lot of uniformed women. Women make up almost 20% of the military. Figure that’s about 20% of the military that cannot be deployed into a combat zone and expect it to rain death on the enemy. That “rain death on the enemy” thing is the army’s main job.

Or it was.

Not seemingly anymore.

Let’s get down to some specifics. Take ISIS for example. It’s a lightly-armed, poorly-trained, locally-despised, imperialistic low-level threat. The only reason it’s on a U.S. threat map is because it brazenly kidnaps and murders Americans along with destabilizing the Middle East (as if that’s the word for that historical mess).

So what to do? Our president and his advisers, who savaged George Bush, et al, over the “lengthy” Iraq war, have recently called the project to curtail ISIS a multigenerational project.

It’s like someone planning to remove a thorn from their foot over a period of months, while having a fully-trained doctor and medical office at hand. “Maybe it will just rot away,” they hopefully think. It’s foolishness, sheer ignorance. It could get the foot amputated.

We’re spending $600 billion dollars a year on a military that can’t swat a fly. Or I should say, won’t be used to swat a fly (because it’s being used to butter some bread).

The 101st Airborne alone has enough manpower and firepower to handle the job. Ask them, they’d be happy to demonstrate. Instead they sit around.

Partner them with our Special Operations teams, the one segment of the military that is earning its keep, and modern technology (drones, sensors) and eliminating ISIS would be more like shooting fish in a barrel.

Yes, some elements of ISIS have hidden amongst people but lately it is so confident that we’ll do nothing (why is that?), that it is taking up larger formations in open areas. Just the kind of open warfare we specialize in winning.

Desert nights are perfect for drones with infrared sensors to map out concentrations of soldiers that can be annihilated by “stand-off” weapons platforms such as AC-130 gunships.

So what are we doing? A lot of pin-prick bombing runs (mostly really dry runs) and trying to train a handful of misfits in Syria. We could help our only real allies in the area, the Kurds, but for some unstated reason, the Obama administration has taken a dislike to them. I think I can guess why that is…

As we’ve learned in the past, if you thrash one bully, most of the rest run away. You only have to do these things occasionally yet for some reason we don’t do them at all anymore. So the bullies multiply.

Now let’s take a look at another failure — Benghazi. I will focus on one element here, the failure to get any kind of air effort into the air in one night.

An Air Force general was asked why nothing was sent up that night of the attack on the U.S. consulate in Benghazi that killed four Americans. Specific points to be addressed were why U.S. Air Force aircraft at Aviano, Italy, (near Venice) or the Naval Air Station at Sigonella (on Sicily) were not used. He said that it would have taken 20 hours to get anything from Aviano to Benghazi and that tankers from England would have to be prepped. He also implied that the only thing at Aviano were training aircraft — perhaps the 20 hours would be for converting them into ground attack aircraft?

Let’s do a little fact-checking.

Aviano is the home of the 331st Fighter Wing. It is not a training squadron but an air superiority and ground support group. That means its mission is combat. It flies F-16s. The F-16 is capable of ground attack, even if only using its cannon (though it can be armed with bombs and air-to-ground missiles). The F-16 has a range, with drop tanks, of 2,500 miles. It is roughly 1,000 miles from Aviano to Benghazi, therefore relieving the need of refueling tankers. If you think that would be cutting it close and not allowing any loiter time over Benghazi, Sigonella is only 500 miles away and it handles big aircraft so there’s no worries about support facilities for fighter aircraft returning through Sigonella. The F-16 is capable of Mach 2. At sea level it maintains a top speed of over 900 mph. F-16s deployed from Aviano could have been over Benghazi in an hour and a half. Does no one do scramble drills anymore? What are we spending $600 billion a year on?

The general also argued that they did not want to risk civilian casualties so a ground attack by aircraft was out of the question. Two thoughts on this. When American lives are at stake “civilian casualties” need to start taking a back seat to those considerations. Our enemies already know this weakness of ours and are using it to hamstring us. Plus, the cannon on the F-16 could be used and have kept civilian casualties to a lower number, if any at all.

Two, and most importantly, whether the aircraft could have attacked is not the key. The key is that U.S. aircraft buzzing the city tells the attackers that we know they are there and that help is on the way. Whether it really was or not the attackers wouldn’t know or wouldn’t want to risk.

Imagine you are a burglar breaking into someone’s house. You know you are on the clock, someone might be coming home, an alarm might be tripped. But you see a note telling the maid to take the week off because the owner has gone to Europe for two weeks; and not to activate the alarm because it’s kind of sensitive to the squirrels on the roof. Wouldn’t you hang around awhile or return to steal more knowing that no one is coming back for awhile?

That’s exactly what the Benghazi attackers did that night. They came back later and attacked the CIA Annex, convinced that they had not been detected or that the U.S. was doing nothing in response. I seriously doubt they would have went home and rearmed for an attack on the annex if U.S. aircraft had been buzzing the town, with an implied threat that other forces were on their way.

But they weren’t. And we have a general making excuses why they didn’t even try that night. Of course, he’s just following orders from his clown prince commander in chief.

We spent $600 billion on that.

Then there’s the curious case of the combat team in Croatia that night. It has been acknowledged that 40-man special forces combat team was training in Croatia and was awaiting/expecting/hoping for orders to redeploy to Benghazi. Those orders never came though orders to go back to their base in Germany did arrive. Distance to Benghazi, approximately 1,000 miles. Might as well have been a million miles for our $600 billion per year.

This, of course, does not address why, only a few days after the U.S. Embassy in Cairo had been attacked and the U.S. Ambassador to Libya was going to be out of his protective pocket for a couple of days, there were no evac plans that could be modified or any kind of response to, “Hey, what if some bad guys decide to celebrate the anniversary of 9/11 by attacking a U.S. installation or personnel somewhere in North Africa?”

Beyond that $600 billion I keep harping about, remember, the U.S. taxpayer pays a lot of people six-figure salaries at the upper levels of the U.S. government and this is what they came up with that night — nothing (other than four dead Americans). They didn’t even try to help. And other than Hillary Clinton, who’s angling for a promotion, those incompetent boobs are all still employed by the U.S. government.

U.S. taxpayer=sucker!

Whither the $1,000 Bill?

Why aren’t there any $1,000 bills in circulation? I wondered that recently as I’ve become a fan of Pres. Grover Cleveland and he’s on the $1,000 bill so I thought it would be fun to have a $1,000 bill to frame.

But there aren’t any at the bank. And though there are a few around in private collections, they cost a lot more than $1,000.

It turns out that in 1969 Pres. Nixon issued an executive order to remove them, and any remaining “high-denomination” bills (i.e. $500 and above), from circulation in an attempt to “curb” crime. Whether one can consider that order a success I know not. We still seem to have crime…

However, the $1,000 bill remains legal tender (though you’d be a fool to use it for $1,000 – see above).

Increasingly I am against laws that exist for nothing more than to make it easier for police to do their job or pretend to do their job — all the while making the lives of law-abiding citizens more difficult (see gun control).

Thousand dollar bills weren’t harming anyone in of themselves (no moreso than the existence of money itself). The United States used to circulate $500, $1,000, $5,000 and $10,000 bills, but no more. Gold Certificates of $100, $1,000, $10,000 and $100,000 were eliminated in the 1930s courtesy of Roosevelt’s gold seizure. Free the gold! I say.

I think that $1,000 bills (along with $500 and maybe $5,000 and $10,000) should be brought back. I bet if they offered to put a politically correct chick on one of those suddenly a lot more of our liberal cultural superiors would be for it!

But seriously, I think making the economy more cash-based would help revive our increasingly sclerotic economy. Cash gives a visceral sense of value to money. I think that’s been lost. The creditization of the economy has spurred inflation as people become detached from the value of money. Don’t even get me started on “quantitative easing.”

Think about it. When you go to the store with only cash, you tend to watch your spending. You have to watch your spending lest you try to buy more than you have cash for. But with that magic credit card, suddenly that impulse item — a coconut crème pie! — is within reach! Suddenly a treat, something to be saved for, becomes, for all practical purposes, an everyday item. I do this all the time myself. Cash makes people spend wisely (usually).

When money is just a bunch of blips, bright numbers on a screen, or something to be handled later, it loses some of its value.

Don’t get me wrong — credit is a wonderful thing. And checks and credit cards are vital tools for survival and even thriving in the modern world (really, who would want to push a wheelbarrow of cash to a house settlement?). But they’ve done some harm by pushing cash out of many transactions. We’ve lost a sense of value with them. I feel we need to bring that value back so we can understand that things just aren’t “free” because we don’t see their immediate cost (this could lead into a long disquisition on our ‘entitlement” mentality but I’ll save that for another day).

Oh, yes, I am becoming a hard money person. I shall return to this subject.

Beware of Greek Canaries Bearing Gifts in Coal Mines

I was mildly amused hearing on the news a Greek woman in Athens after the Greeks had rejected on compromising with their debt creditors. She said something along the line of “We have voted ‘No’ to their demands. Now they will listen to our demands!”

The Greeks seem to be saying, “How dare they ask for repayment, Don’t they know how special we are?”

You can’t get much more arrogant or economically illiterate than that. Sadly, there are many more like her across the planet, including plenty of Americans. Perhaps even a majority, looking at King Barry’s vote totals.

I’m aware of the old saw about how in reality heavy debtors really are in control of the debt debate. It’s along the same line that masochists are really in charge in BDSM. And there is some truth in that.

However, it looks like the Europeans, actually the Germans, are prepping for the worst, a Greek collapse, and therefore do not plan to compromise. Sometimes you have to cut the alcoholic off. The Greeks will have to pay the piper (or at least not kick him in lieu of payment and claim the piper should have been honored to play for them).

Some people have tried to get the Germans out of their Scrooge McDuck mentality by claiming that half of Germany’s debt after World War II was forgiven.

Apparently these people think there was a world war recently and Greece was bombed to smithereens and those members of its previous government responsible are in prison or planted six feet under.

Why do people make such absurd arguments for not paying one’s debts?

No one forced the Greeks to max out their national credit card and ask for an increase in its limit, year after year. No one forced Greece to overregulate the economy, overpay an overstaffed civil bureaucracy, overpromise retirees and instigate socialist policies for decades. Greece has been run for decades as liberals would have the United States run. It is the Democratic economic platform writ small — high taxes, powerful government unions, increasing government control over everything, regulated and inflexible labor and commerce markets, etc. In a sense — making everyone dependent upon the government for daily survival; an open discouragement of old-fashioned independence and self-sufficiency.

(Nota bene — the Republicans are not wholly innocent in this.)

Except, in the long run, it doesn’t work. Greece just got there earlier because it is smaller and less flexible; and it can’t print the world’s currency franca.

Dear Leader and his supporters freely talk about “forgiving” the tens of billions (or is it hundreds of billions?) in rapidly mounting student debt (while also encouraging more such spending on student ‘loans’ or even making them unaccountable ‘grants’). It’s nice of them to forgive that which is not theirs to forgive. And that’s exactly their angle — grab the political glory and enduring fealty of youth while sticking the bill to those of us who scrimped, saved and paid our taxes. Remember, these very same people pushed out most of the private student loan lending a couple of years ago because the private lenders actually expected to be paid back. But in King Barry’s eyes, along with the smug graduates, education is an “investment” that you just can’t put a value on… How convenient (and expensive).

We saw a very similar pattern with the “housing bubble.” The federal government aggressively pushed banks to make loans to the uncreditworthy so they could “share the American dream.” Banks that balked at such nonsense found the government’s boot on their neck. So the banks ultimately went along, some eagerly looking for a silver lining. Attempts to reform this bottle of nitro glycerine that was being juggled were choked off by (mostly) Democrats, often under the accusation of racism. Paging Barney Frank, Chris Dodd, et al.

When the uncreditworthy lived up to their name and reputation, the bubble burst (aided amply by house flipping dominoes and collateralized debt obligation shenanigans). In an instant, the federal government performed the most perfect 180-degree pirouette in history and laid the whole blame on the banking industry. It then used reeling markets as an excuse to semi-nationalize parts of the banking industry (‘too big to fail’) and to formulate regulations that left other parts enthralled to Washington. Dumbfounded bankers didn’t know what to say as they were rounded up for the cattle cars, figuratively.

It helped that a surprisingly large number bankers, especially at the largest banks, are major donors to the Democratic Party — and don’t mind working hand in glove with the government. Some saw this as an opportunity. It can be easier to placate a few bureaucrats and politicians than shareholders and consumers.

(One of the left’s and the media’s greatest crimes has been to convince so many people that all businessmen, especially bankers, are top-hatted Republican bully-boys.)

And it was wash, rinse, repeat with “The Stimulus.” Admittedly, that inane Keynesian wet dream was conceived in the last days of the Bush administration but The One’s flying monkeys larded it up with even more nonsensical “green” projects and turned loans into “grants” so the pretense of ever paying back the original money no longer weighed on anyone’s mind (as if it ever did). Many of the projects were helmed by Democratic Party contributors while other chunks of money went to party stalwarts such as public employee union members. Eight hundred billion dollars down the drain, never to be seen again, and so many politicians shrug their shoulders, and some demand even more spending (we can fill that rat hole if we stuff enough taxpayer dollars down it!).

I don’t want to sound like a gold bug but the age of fiat currencies may be coming to an end. When money loses its value it will be a Hobbesian world.

There are far too many people who seem to think they are entitled to spend other people’s money and then demand more. To top it off, the original loaners will be cast as the villain if they don’t hand over more money. That’s rich. Sadly, that’s the way many who should know better see it. I’m pretty sure Paul Krugman, Barack Obama, Hillary Clinton, the New York Times, etc., see it that way.