This David Stockman Quote Should Scare the Hell Out of Everyone

Is the US economy about to collapse worse the Greece’s? 

Some, like Paul Krugman, say that it’s okay for governments to print unlimited money.  Others, who have actually managed businesses, say otherwise.

ronald-reagan-david-stockmanDavid Stockman is among the latter.  He was Reagan’s budget director for a few years.  He became a media sensation because of his command of numbers.

He left the White House early, fretting over federal debt.  But debt in the 1980s was as a piggy bank to Wells Fargo.

In an interview with Business Insider, Stockman warned that America’s financial end is nigh, and that you better hope the Lord returns before it gets here.

Here's the heart of the matter. The Fed is a patsy. It is a pathetic dependent of the big Wall Street banks, traders and hedge funds. Everything (it does) is designed to keep this rickety structure from unwinding. If you had a (former Fed Chairman) Paul Volcker running the Fed today 7/8— utterly fearless and independent and willing to scare the hell out of the market any day of the week — you wouldn't have half, you wouldn't have 95 percent, of the speculative positions today. [Emphasis added]

Read more: http://www.businessinsider.com/david-stockman-youd-be-a-fool-to-hold-anything-but-cash-now-2012-3#ixzz1oA6pTfdp

The GOP is our best hope, but its candidates better get their brains around this, and fast.  I really don’t feel like spending the rest of  my life foraging for roots and wrestling nuts from a squirrel.

America’s Economic Freedom Is Collapsing. Here’s What You Need To Know | Video

Yesterday, I blogged about freedom envy—the feeling Americans get when they look at countries where the people get freer every day.

Today, thanks to Economic Freedom blog, we have a great video to introduce the idea  of economic freedom.

Does that sound silly?  I mean, aren’t Americans born with an understanding of economic freedom?  And craving to preserve it?

Yes, we are.

But our schools, entertainment, press, and, above all, GOVERNMENT beats economic freedom out of us by the time we’re 14 years old.

It’s time to beat schools, entertainment, the press, and government into submission.  (Yes, I really typed that, you lefty pansies!)

You wanna fight back against the tyrants?  Then watch this video and follow the directions.

[youtube http://www.youtube.com/watch?v=F4fWQnguR1E]

America is about to drop out of the top 10 nations in economic freedom.  And we invented the practice of economic freedom, by God!

Leave a comment.

The Biggest Rip-Off in America is College Tuition

While everyone was screaming about the rising cost of medical treatment, America’s leftist incubation chambers—colleges and universities—robbed us of our economic future. And the federal government’s misguided student aid program is to blame.

What allows this growth? 

  • Increased per student government funding
  • Massive private and public debt

Who benefits?

  • College administrators
  • Unions working on college campuses
  • Political causes that college administrators like (liberal)

Who pays?

  • Taxpayers (who else?)

Check out these statistics:

  • College tuition increased 799% between 1978 and 2007 (source)
  • Student loan debt has increased 511% since 1999 (source)
  • Government per student increased 246% between 1978 and 2007
  • In the past 20 years, college tuition has increased about twice as fast medical costs
  • The education bubble makes the housing bubble look like a pimple (source)
  • Recent college graduates are no smarter than graduates of 40 years ago (observation)

On that last point, I’m not alone.  From contraryinvesting.com, Brett writes:

Did this increase in spending do any good? Not on the available evidence. Test scores — measuring achievement — have not budged in 40 years. In other words, the additional investment over the last 40 years has been wasted. We might as well have thrown the money down a well.

Read Brett’s piece in its entirety.  The arguments against everyone going to college are important.  Seth Godin raised similar questions in 2010.

Most colleges are organized to give an average education to average students.

Check out these graphs from www.mymoneyblog.com:

tuition

And Tuition vs. Healthcare

tuition2

There is great value in a college education, but not at any price.  Not when the lifetime economic value of an education is about to become a net negative.  According to the rating agency Moody’s:

Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place."

Personal finance coach Dave Ramsey shows families how a child can complete a 4-year degree without a penny of debt.  But that formula might not work today. Tuition has gone up 16 percent in the two years since I first heard of Ramsey’s plan.

So what’s Obama’s prescription? 

You guessed it: Obama wants more government spending.  More borrowing.  More forgiveness of debt. 

While some on the right want to vilify students, in most cases, I disagree. Kids born near or after me grew up with “college education” pounded into our heads. 

“You’ll be nothing! without a degree,” we heard.

We scorn people who don’t go to college.  (Look at the recent flap involving St. Louis County Executive Charlie Dooley.) 

But the government has encouraged colleges to drive their costs through roof. For years, the federal government promised to fill the gap between what a student could afford (according to the government) and what a college charged. 

Seriously.  What if the government made the same deal with car buyers?

The solution isn’t simple.  There’s a big bubble in the higher education market, and it has to burst. Families, students, and governments have no more money to lend.  The ROI on a degree is falling fast. 

Kirsten Winkler of the blog big think shares one alternative to college degrees as credentials.

I see only two possible solutions: we continue to bail out colleges by feeding borrowed money to the bubble, or we unwind our addiction to traditional higher education.

Exit question:  Do we do as Obama says and borrow more money to endow colleges, or do we begin dismantling the “college or death” mantra? Or is there a third way out?

Who Killed the American Job Machine

Maureen Dowd’s having trouble slathering make-up on her favorite pigs these days. Her President—the man for whom she surrendered all pretense of intelligence, wisdom, and self-control—is flailing. maureen_dowd_x200And Maureen Dowd is going all wobbly.  Wobbly on Obama. Wobbly on America.  Wobbly on life.  Here’s an exceprt:

On the razor’s edge of another recession; blocked at every turn by Republicans determined to slice him up at any cost; starting an unexpectedly daunting re-election bid; and puzzling over how to make a prime-time speech about infrastructure and payroll taxes soar, maybe President Obama is wishing that he had thrown the game.

Maureen Dowd makes a big mistake in blaming Obama alone for America’s jobless carnival of mayhem.  It’s not all his fault.

Let’s not make the same mistake made by Dowd and her friends.  Barack Obama did not wreck the American Job Machine.

His Democrat Party did.

Face it.  When the Democrats took overwhelming control of Congress in 2007, unemployment was 5.5 percent.  When John Boehner pried the Speaker’s gavel from Nancy Pelosi’s dry, cold claw, unemployment stood at 9.9 percent.  (Source)

That’s a 44.4% increase in the unemployment number.

For two years, Democrats controlled the House, the Senate, and the White House.  What did they do with that power?

They created a new entitlement.  Even after admitting that the existing spending programs were unsustainable, Democrats invented yet another new entitlement.

Sure, George W. Bush and the Tom Delay Republicans had their problems.  But they’re not around THIS TIME.

We are living under a 100 percent Democrat economy now. The GOP’s grasp on 1/2 of  1/3 of the government can’t undo 4 years of Democrat damage.

We have a Democrat in the White House and Democrats running the Senate.  It’s not the Republicans in the House preventing Obama from moving the economy forward; it’s the Democrats in the Senate and White House frightening natural risk-takers into keeping their job-creating money in their pockets.

I can see only one solution to the continuing unemployment nightmare facing people in America. That’s to finish the work started in 2010 by turning over the Senate and the White House.

What Do You Serve at a Downgrade Party?

DRUDGE REPORT 2011® Answer: Bondbonds.

Sometimes the only option is humor.  Maybe it’s time to laugh . . . at ourselves, at our pre-occupations, and at our president.

We elected him. And, in a republic, you always get the leadership you deserve.

Now what?

Now focus. Public displays of anger only hurt us. Anger is a tactic.

Yes, I’m angry. Furious. But acting out on anger does us no good.  Instead, wise men and women focus that anger into a steely resolve to electorally destroy the cretins that destroyed America’s credit rating, liberty, and economy.

What makes United States Marines, Rangers, Delta Force, SEALs, an the like so deadly is not bloodlust . . . it’s discipline.  Had an angry mob descended on Usama’s compound in May, he’d be alive and the mod would be dead.

Steely determination to electorally destroy.  Lacking that discipline will hurt the cause.

The next meeting is September 15 at 7:00 at Crowne Plaza Hotel in Clayton.  Please bring a cold, steely resolve.  But leave room for a warm smile for friends.

For more on S&P's downgrade of US debt, see WSJ Weekend

What’s the One Thing Congress Should Push Right Now?

It’s not the Balanced Budget Amendment, though that’s a good second choice. It’s certainly not senseless and impossible ideas like impeaching Obama or suing over birth certificates.

Instead, we should push an idea that’s ripe for quick passage.  It’s an idea that cheers political moderates and conservatives.  And it doesn’t immediately turn off liberals.

What is it?

It’s an old idea that Jack Kemp championed for decades. It’s an idea that I’ve written about many times before.  It’s the best next step in restore fiscal sanity to Washington.

It’s time to implement the Flat Tax.  Here’s why:

1. Flat Tax Closes Idiotic Loopholes:  I know that many Tea Partiers oppose legislation to close tax loopholes.  I do, too, if it’s done to punish certain classes of business.  But there’s really no good reason why General Electric paid no taxes on $5+ billion in profits.

2.  Flat Tax Eliminates Innocent Mistakes:  Flat tax is almost fool-proof.  We can test that theory on Tim Geithner.  When the formula is Tax = (Income – $30,000) * n (where n = rate), it’s hard to screw up.  The current tax code is so complex that the Secretary of the Treasury cannot understand it. 

3.  Flat Tax Eliminates Same-Sex Marriage Argument:  The individual flat tax is per person, not per household. There is no marriage penalty or marriage benefit.  Since marriage isn’t mentioned in the Constitution, it makes sense that our tax code ignore it, too.

4. Flat Tax Increases Revenue:  Yes, revenue will increase. Some, including many rich, will see their effective rate increase.  Others will see their effective risk fall.  Some who pay nothing today will begin contributing to functioning of government—legitimizing their opinion.  With a $14.3 trillion mortgage that grows every day, we need to increase revenue.

5.  Flat Tax Is Marketable:  Don’t underestimate the importance of marketability.  Great ideas (like the Fair Tax) are often stillborn because of their complexity.  Ninety percent (or more) of people don’t want to spend a week studying the effects of government policy on them. Complex tax codes strike people as crooked schemes designed to hide something.  The flat tax sells because it’s simple and obviously fair. 

6.  Flat Tax Eliminates Bracket Creep: You pay a flat percentage of your income above a flat, inflation-indexed deduction of about $30,000.  The poor pay no taxes.  Everyone pays an identical amount.  Without bracket creep, the marginal tax rate is constant, encouraging additional activity.

7.  Flat Tax Solves the Warren Buffett Problem:  Billionaire Warren Buffett (incorrectly) claims that his secretary pays more in taxes than he does.  (So why doesn’t Warren increase her salary until she hits his happy bracket?)  Although Buffett’s argument is nonsense, many smart people take him at his word.  The flat tax solves the problem of high income people avoiding taxes. 

There’s no reason why the Flat Tax cannot proceed in parallel with the Balanced Budget Amendment, which I came out for in The Conservative Manifesto in 1993.  But the BBA will take a while to get through Congress and 38 states.  The flat tax have to be phased in over a few years to prevent too large a jolt.   If Congress passes it 2011, it can be fully implemented by 2014 or 2015. 

While the flat tax may not be perfect, it’s the best tax reform that’s possible.  

What Everybody Ought to Know About the Debt Deal

There’s hysteria on both sides.  From Satan Sandwiches to “killing future generations,” you’d think Congress is voting on a bill to launch the US nuclear arsenal on Philadelphia, Detroit, Atlanta, and Los Angeles. There are reasons to distrust the deal.  I distrust it.

There are great reasons to distrust the Congressional committee charged with finding more cuts.

The bill does far too little, too slowly, to prevent a credit rating cut in the near future.

And I don’t think the world would end without raising the debt ceiling.

That said, the reality is something was going to give. Most members of Congress are Establishment—and the Establishment hates risk, even smart, principled risk.  Sorry—just reality.

So let’s keep pushing for more cuts, for entitlement reform, for a government that obeys the law and operates within the limits of our Constitution.

The Tea Party movement rattled both Establishment Republicans and President Obama.  We have a voice. But if we scream ourselves hoarse, that voice will weaken—and the many, many Unknowing Believers will close their minds to us.

5 Things to Question About Debt Deal

Yes, the Tea Party movement influenced what went on in Washington.  No, the Tea Party is not the winner.  (No one won.)

No, this debt deal won’t guide the government off the road toward bankruptcy.  Here’s why.

1.  No Entitlement Fix:  In fact, it appears that entitlements aren’t touched.  Entitlements are the nation’s spending problem.  Not roads and bridges, not the military.  Entitlements. Until we arrest and reverse growth in Social Security, Medicare, and Medicaid, we’re spitting in the ocean.

2.  Military Spending Won’t Be Cut:  Remember the “peace dividend” after the Berlin Wall fell?  Then Saddam invaded Iraq.  Obama and the Dems know damn well that Republicans will forgive them for ignoring planned military cuts as soon as some threat appears on the horizon.  And there’s always a threat.  These cuts, if implemented, will be quickly reversed.

3.  Cuts Are Someone Else’s Problem:  The cuts don’t start until we have a new Congress and a new President. That’s asking a future generation to fix yesterday’s problems.  That’s cowardice and irresponsibility.  And it’s perfectly Establishment. 

4.  Won’t Save Credit Rating (Unless Moody’s Was Lying):  Moody’s reported on Friday that none of the proposed bills would solve the nation’s long-term debt problem.  If we’re going to lose AAA, why not use that trauma as the impetus for real financial reform?  Instead, we’re kicking the can down the road to save the President and Establishment Republicans.

5.  Favors the Establishment:  Most importantly, this bill demonstrates the problem with Establishment politicians: they’re first duty (they believe) is to their next election.  Boehner abandoned his party’s principled members and crafted a deal to win over some Democrats.  That might protect him and Obama.  The taxpayer—especially Millennials and younger—get screwed.

Question the Establishment, kids.  It is not your friend.

At Last, Obama’s Ready to Borrow More Money from China

The headline on July 15 was knee-slapping funny:

Obama says he’s “ready to move” on debt ceiling.

Really?  The man who dug a deeper debt hole in two years than anyone else did in 8—or 15—is willing to borrow more?

12716Say it ain’t so.

For those who believe Obama’s some sort of deficit hawk, let’s take a quick stroll down memory.

  1. Obama wanted to increase the debt limit by $2.5 trillion in April, and he want no conditions on that increase.  In April 2011, Barack Obama opposed any measures to reduce federal spending.
  2. Obama refused to produce a plan. Period. He has no plan for reducing debt. He has no plan for eliminating deficits. He has no plan for creating jobs or helping small business.  He has no plan for anything but golf and party.

3.  Obama says 80 percent of Americans demand a tax increase, though he is incapable of citing any source for that number. In other words, he made it up.

Of course Obama’s ready to move on borrowing more money.  Borrowing is his only plan. His credit card is maxed out, and he wants the limit raised.

Only, this time, there are men and women in Congress who more beholden to the Millennial generation than to Boomers. Like a good banker, this Congress wants the borrower to produce a debt reduction plan before lending another penny.

I’m glad Obama’s finally ready to move on something besides a tee box.  But I won’t be completely satisfied until he moves out of 1600 Pennsylvania Avenue.

What’s Your FICA Score?

Your FICO score is a number between 380 and 820 (or something like that) that banks use to determine your credit worthiness.  The higher your FICO score, the better. But that’s not what I’m talking about here.

I’m talking about your FICA score.

bi_weekly_stub

Your FICA score is the minimum payment on your federal loan.

You didn’t know you had a federal loan?  You do.

If you’re 18 years old, you owe the federal government about $46,000.  That’s before your take out your first student loan. 

You can see your FICA score on your very first pay stub. 

The good news:  you should earn enough in your lifetime to pay off this $48,000 loan that my generation and my dad’s took out on your behalf.

The bad news: we keep borrowing more against your loan.  You’ll never be able to earn money as fast as we can borrow it.

Your best bet? Here’s two rules for getting out of other people’s debt:

1.  Don’t trust anyone who tells you that you’ll be better off deeper in government debt.

2.  Don’t trust people born before 1982, since we’re the ones using identity theft to live richer lives and leave you poor.

And look at your FICA score every payday.  It’ll remind you of Rules 1 and 2 above.

Money Problems? Borrow Your Kids’ Social Security Numbers

Why not? Kids have a clean slate when it comes to credit scores.  Sure, they don’t have a long history, but you can help with that. 

And you can buy that 56-inch 3D LED TV you’ve been craving.  In a few months, you might even be able to buy a new car—on your kid’s credit.

Best of all, you really don’t need to pay it off.  Let your kids pay that loan.

happy-peopleThink about it: most kids rack up a ton of college debt. They borrow and borrow to go to college.  And they can’t even eliminate school loans with bankruptcy.

They can get out of the loan for your Hummer, though.  And if they love you, they’ll be happy to help.

Besides, you need the Hummer to haul the kids and their friends around to malls and soccer practice, right? 

Plus you’re establishing their credit for them.

Only one problem: pretending to be your kids by stealing their identity is identity theft.  And sort of like financial molestation.

So why isn’t federal borrowing a crime? 

The US government has borrowed $14+ trillion using my Social Security number and yours.  The same government has bribed older generations to buy their silence—even their complicity.

Worse, most of this debt has been charged to the accounts of Millennials.  And their kids. 

Where’s the outrage?

Thomas Jefferson showed appropriate fury at the notion of borrowing to benefit the present generation at the expense of future generations.

I sincerely believe... that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.

and

Then I say, the earth belongs to each of these generations during its course, fully and in its own right. The second generation receives it clear of the debts and incumbrances of the first, the third of the second, and so on. For if the first could charge it with a debt, then the earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater that may be paid during the course of its own existence.

If you were born after 1982 (Millennial Generation), I’d love to hear your thoughts on the matter. How do you feel about entering the workforce almost $50,000 in debt for things no one every asked you about?

Gimme More Money or Granny Gets It!

Obama showed his breaking point today. The stress got to him. Today Obama threatened to stop Social Security payments if Congress doesn’t bend to his will on the debt ceiling.

The president told reporters that there may not be enough money to pay Social Security benefits on and after August 3rd. 

But the President lies.

Revenue from taxes and other fees would cover Social Security and other payments. What won’t be covered is additional borrowing to service the country’s already outrageous debt. 

In desperation, Obama put a gun to the heads of the elderly.

Smart. Very smart.

Jefferson on Debt

With the debt ceiling negotiations closing in, it’s worth looking to Thomas Jefferson. ThomasJefferson250

Jefferson was very opposed to federal government borrowing.  (He was less concerned with states borrowing.)  What I love about the quote below is Jefferson’s concern for leisure time. 

"To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers . [emphasis added]"

--Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39

Pay a mortgage? Have student loans? Make a car payment?  Then you might know what Jefferson was talking about.  Debt limits your freedom. You work to pay off the debt, not to live a better life. While you might be perfectly happy selling sea shells you hunted and painted by hand, you cannot. You must work for the man to earn the wage to repay the debts.

These obligations, of course, are your own. If you feel trapped by debt, you trapped yourself.

Government debt, however, enslaves us just as surely. Yet we had little choice in the matter. In many cases, we opposed the borrowing that now forces us to labor.  Our children were born into this financial slavery, and their children will be. 

Free the children.

Blame Machines

Even though they became ubiquitous when he was an undergrad, Obama just now discovered that ATMs reduce foot traffic in banks.  Then again, they probably didn't have the machines in the Kremlin where he spent his semester abroad.

But the twits are sure having a blast with the news (me included).

Exit question: you think ATMs and airport kiosks are preventing people from finding work?  Seriously?

Answer in the comments.

Obama Makes It Worse

"It" could refer to anything. Anything at all. 
In this case, though, I'm referring to unemployment.  Well, maybe I'm referring to the economy overall.
Unemployment rate rises to 9.1%, 54K jobs added « Hot Air
Obama has increased regulation, seized entire industries (auto, student loans, commercial banking, medicine), and borrowed more money faster than all previous presidents combined. 
Obama is a one-dictator disaster.  And an incompetent one at that.
If you don't have a job, Obama made it worse.
If you have a job, Obama made it worse.
If you live in America, Obama made it worse.
Unless you're a communist college professor or union boss, Obama made it worse.

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UMSL Killing American Males

David Brooks—the former conservative—skewered the University of Missouri St. Louis yesterday.  Brooks wasn’t aware, and UMSL administrators don’t read. But some of us caught it. Brooks wrote of The Missing Fifth. Did you know that 20 percent of American men in their primes don’t work?

Americans should be especially alert to signs that the country is becoming less vital and industrious. One of those signs comes to us from the labor market. As my colleague David Leonhardt pointed out recently, in 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. One-fifth of all men in their prime working ages are not getting up and going to work. [Emphasis added.]

How sad. How embarrassing. I’d say “how shameful” except the Supreme Court ruled shame unconstitutional, or so it seems. We’ve had that feeling, shame, removed from our souls.

Men who do nothing are deadbeats, much more so than people who try to pay their bills and can’t.  We’re talking about able-bodied men who simply choose to sit on their asses and sponge of others—off of foolish women, in many cases.

Brooks errs in his proposed solution, of course.  Brooks thinks American education the solution. He hasn’t been paying attention. I have some other ideas.

Higher education isn’t the solution to our problem; education is the problem.

The University of Missouri’s wing schools, UMKC and UMSL, offer the course “Introduction to Labor Studies.”  This course is why 20 percent of men believe that sitting on their brains is their right—nay, their duty—as young, able-bodied American men.

Leaving aside the communist party recruitment activity for a moment, UMSL’s Labor Studies course is a lesson in lying, lazy, and license.

In Labor Studies, professional derelicts Don Giljum and Nancy Ancel teach students how to avoid work, how to destroy a company’s profits, and how to harass and intimidate managers.

Think about this: the state of Missouri uses tax dollars to teach Missouri students how to rip off employers.  Knowing that, why would you hire someone who went to a public university in Missouri?  Why would you open an office or business in the state?  What could be more foolish than to expect Missouri to encourage business?

Here’s a solution.  It’s a tiny, tiny step, but it’s a step in the right direction: Shut down the damn Labor Studies course in the University of Missouri system.

An alternative solution if that’s too radical for our legislature: rename the course “Introduction to Deadbeat Studies.”

But do something before "Men at Work" becomes nothing more than a trivia question.

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