Social Security: Massive Ponzi Scheme

That Social Security is a decades-old, massive ponzi scheme that is reaching its foregone conclusion sounds pretty right to me. To quote a very interesting article on Bloomberg,

[Overwhelming debt] is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.

The article delineates the reality that our government is totally bankrupt, but that thanks to politically expedient obfuscatory financial labeling, government debts are bearing down on us under the radar.

The article concludes,

Herb Stein, chairman of the Council of Economic Advisers under U.S. President Richard Nixon, coined an oft-repeated phrase: “Something that can’t go on, will stop.” True enough. Uncle Sam’s Ponzi scheme will stop. But it will stop too late.

And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.

Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.

Hold on tight, this is gonna get rough.

My Legislators Are Plain Awful

I can thank my House Representative, Gary Peters, for helping to pass one of the most disastrous acts of Congress. I'm fuming. Here's my response to his politically pandered decision:

Dear Rep. Peters,

I am appalled and dismayed at your vote to pass the pleasantly named "American Clean Energy and Security Act." We didn't vote you in to kill even more of our jobs, nor to amass even more intrusive power in the hands of the federal government.

I'm disgusted. Your vote not only flies in the face of sound science and common economic sense, but it also completely ignores the will of your constituency, as polls show.

I am thankful that your term is only two years. Even though that's 1.5 years too long to wait to vote you out of office.

I like to think that my vote makes a difference. In Michigan, that thinking is wishful, I guess.

Kevin Gilbert and Prognostic Pop

In 1995 a tragically unknown talent named Kevin Gilbert put out an album filled with crisp, biting lyrics and unforgettable hooks. More tragically, he died shortly after at age 29.

His music could be described as "progressive pop." It's sweet and sardonic, dissonant and refined. But what makes it all stick: the message behind the notes.

I was reminded of a Gilbert song while reading one of the countless articles about who's to blame for the country's economic mess. Clearly, there's plenty of blame to go around. But the preponderance of it sits on the shoulders of one demographic--here mentioned by Gilbert 14 years ago:

Goodness Gracious of apathy I sing
The baby boomers had it all and wasted everything
Now recess is almost over
and they won't get off the swing

I couldn't agree more. I wonder if Gilbert would be gratified to know in 2009 that recess is, indeed, over.

Mitt Romney Was Right About Detroit

Back in November of last year, Mitt Romney advocated letting distressed automakers fall into a managed bankruptcy rather than be given "bridge loans" to keep them afloat. He was roundly criticized for not having enough faith in the American auto industry, nor enough sympathy for the plight of auto workers receiving free health care and guaranteed retirement perks.

He wrote in his op-ed in the New York Times:

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

Today, tens of billions in government-backed loans later, it looks like GM and Chrysler are bankruptcy-bound. If they had listened to Romney six months ago, the painful but necessary restructuring would be well underway, and light may even be shining at the end of the auto makers' tunnel.

Instead, we're in a deeper hole and the auto makers are only now realizing that their ship is too obsolete and outdated to float.

For reasons such as this I still haven't removed my Mitt '08 bumper sticker. I can endure the tackiness for another few weeks, I think.

Obama: The Perfect Manchurian Candidate

Here's a rather cutting article about a hypothetical president whose sole purpose in getting elected was to destroy a country. It then compares this character with our current president. And the resemblance is striking.

It's worth a quick, easy read.

DUH of the Day

Most politicians are masters of speech without substance, and this holds true on an international level. Case in point, from the G10 spokesman.

"We have a number of elements that are suggesting that we are approaching the moment where you would have a pick up," European Central Bank head Jean-Claude Trichet said in his capacity as spokesman for the G10 central bankers meeting at the Bank for International Settlements (BIS).

Approaching the moment of a pick up? Let's define approaching:

- verb: to come nearer to

So if we EVER get out of this recession, then by definition we are approaching a pick up. Way to really stick your neck out on that prediction there, M. Trichet. You got paid how much to reach that conclusion?

Obama: From Crafter of Hope to Monger of Fear

In his presidential campaign, when Barack Obama resuscitated the phrase "just words" in a speech defending his lack of leadership experience, he hit the nail on the head. In the business of politics, words, for better or for worse, make all the difference.

For example, Obama's campaign theme was HOPE. He carried a message of hope, even without any backing of substance. His words, though lacking the weight of logic and reason, made a huge difference in getting him elected.

Recently, Obama's words helped to push through the biggest governmental power grab in generations--again abandoning sound reasoning in favor of soaring rhetoric. Or, in this case, fear mongering.

In the Wall Street Journal, Bradley R. Schiller expounds on the president's recent rhetorical tactics:

President Barack Obama has turned fear mongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.

Mr. Obama's analogies to the Great Depression are not only historically inaccurate, they're also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren't likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fear mongering can trigger a political stampede to embrace a "recovery" package that delivers a lot less than it promises. A more cool-headed assessment of the economy's woes might produce better policies.

Today the party in power has abandoned sound legislation for political gain, empowered to do so by a president who has mastered the rhetorical skills needed to persuade an increasingly weak-minded electorate. I don't hold out a lot of hope for our children.

Thank the Democrats

Eight hours to read 1100+ pages? Examination and debate was never the intention here. I'm fumed.

Politics Always Trumps Economics

It's the sad and unfortunate truth, as explained in the article.

"I think (doing) nothing would have been better," said Ed Yardeni, an investment analyst who's usually an optimist, in an interview with McClatchy. He argued that the plan fails to provide the right incentives to spur spending.

"It's unfocused. That is my problem. It is a lot of money for a lot of nickel-and- dime programs. I would have rather had a lot of money for (promoting purchase of) housing and autos . . . . Most of this plan is really, I think, aimed at stabilizing the situation and helping people get through the recession, rather than getting us out of the recession. They are actually providing less short-term stimulus by cutting back, from what I understand, some of the tax credits."

...

Another reason that some analysts frown on the stimulus is the social spending it includes on things such as the Head Start program for disadvantaged children and aid to NASA for climate-change research. Both may be worthy efforts, but they aren't aimed at delivering short-term boosts to economic activity.

"All this is 25 years of government expansion jammed into one bill and sold as stimulus," said Brian Riedl, the director of budget analysis for the Heritage Foundation, a conservative policy research group.

You reap what you sow. And you deserve whom you elect. Bravo, America. Bravo.

Another Letter to my Reps

This time it's about the "stimulus" bill. I'm not quite as cordial in this one.

SUBJECT:
Please vote AGAINST the final stimulus bill.

Dear [Senator/Representative] [Levin/Stabenow/Peters]

I am writing to let you know I am extremely disturbed by the "stimulus" bills passed by the House and Senate, and that I am strongly against final passage of any legislation that even remotely resembles what is currently on the table.

This bill is so incredibly and blatantly filled with earmarks, and so devoid of real immediate stimulus, that I'm dumbstruck that anyone could actually support it. Even the Congressional Budget Office says that the bill would leave us worse off in 10 years than if Congress didn't pass anything at all.

Supporting this bill is insanity. I fervently urge you to reconsider your earlier support of this legislation if you want to retain any semblance of common sense. Again, your voting record on this issue has me dumbfounded.

Did you know that if all those hundreds of billions of dollars were given back to the people, it would pay off almost everyone's mortgage? Instead, let's fund long-term "social infrastructure." Give me a break.

Mitt Romney Quote of the Day

In the final analysis, we know that only the private sector -- entrepreneurs and businesses large and small -- can create the millions of jobs our country needs. The invisible hand of the market always moves faster and better than the heavy hand of government.

Taken from remarks to the House Republican Conference. Read the entire excellent excerpt.

Economists Against Stimulus Package? Impossible!

How in the world can economists discard the foregone conclusion that huge government intervention is needed RIGHT NOW to avoid financial catastrophe? Oh--because they understand economics, and don't turn a blind eye to history.

Here's an ad from libertarian the CATO institute castigating the Obama administration and its support of the proposed government "stimulus" package, signed by various faculty from hudreds of universities. Click on the image to read the entire piece.

So if reducing the government burden on the economy is Economics 101, why are all the leftie politicians so gung ho about the stimulus package? As White House Chief of Staff Rahm Emmanuel put it, "You never want a serious crisis to go to waste." Yeah, way to put country first there, Rahm.

Where Your Treasure Is...

A global financial crisis tends is very illuminating in a lot of ways. It weeds out the enterprises that lack efficiency. It's a commentary on the credit culture in which we've lived for the past few decades. And it shines a spotlight on those who have placed money above all else in their lives. It seems every month now we're hearing of some rich guy who was so in love with his riches that he couldn't bear to live without them, such as billionaire Adolf Merckle. Or about crooks like ponzi mastermind Bernard Madoff, who lost not only his own fortune, but that of many other financially enhanced individuals willing to risk all for the easy buck.

Even among the cash-strapped masses, big money is the overriding goal, what with billions spent on lottery gambling each year.

Ever more relevant is the admonition in Matthew 6:

But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also...

At times like these, I'm thankful that I have enough to keep a roof over our heads. But I'm even more thankful that whatever happens economically, my most precious possessions are secure.

Today's Wisdom from Thomas Sowell

Too many people who argue that there is a beneficial role for the government to play in the economy glide swiftly from that to the conclusion that the government will in fact confine itself to playing such a role.

In the light of history, this is a faith which passeth all understanding. Even in the case of the Great Depression of the 1930s, increasing numbers of economists and historians who have looked back at that era have concluded that, on net balance, government intervention prolonged the Great Depression.

Read the entire article.

Harry "The Weasel" Reid

This is rich. Harry Reid earlier spouted off some inside information about yet another particular insurance company headed toward the brink of bankruptcy. Naturally, the markets bailed on all the major insurers, causing a huge drop to the already beleaguered stocks. Here are his comments:

"We don't have a lot of leeway on time. One of the individuals in the caucus today talked about a major insurance company. A major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about." Reid said prior to the Senate's approval of the $700 billion bailout bill.

Oh, but Reid can't be held responsible for those comments. They were just "misunderstood."

"Senator Reid is not personally aware of any particular company being on the verge of bankruptcy. He has no special knowledge about [a bankruptcy] nor has he talked to any insurance company officials," said Jim Manley, spokesman for Sen. Reid, in an email to CNNMoney.com.

How does he get away with this? Why his constituents don't hold him responsible for such duplicity is beyond me.

Playing the Ag Card

Pundits everywhere are saying that the age of America's clout on the international stage is just about over. And most evidence suggests that it's true. The Fed has gutted the dollar. Iraq has our military stretched way too thin. China pirates and replicates our technology even as it's developed. Our national debt continues to soar. The blight of illegal immigration increasingly stifles the economy. And the American lifestyle is characterized by living on credit – and those debts must be paid, sooner or later.

But there's one area in which America still dominates the world: food production. Here's a list of the world's top ten ag exporters:

World Top 10 Agriculture Exporters
Country	In Million Dollars
United States	42,826
France	24,262
Netherlands	19,780
Germany	13,842
United Kingdom	11,613
Canada	10,107
Australia	9,824
Italy	9,446
Belgium	9,013
Spain	6,621

The U.S. accounts for 27% of world food exports! The oil-exporting Arab countries are net food importers. China is on the verge of becoming one as well. If push ever comes to shove, that's some serious leverage right there. Maybe the economic equivalent of the 'red button.' Unfortunately, all the influential pinheads would proclaim that playing the 'food card' is inhumane and deplorable.

Personally, I say we start pushing our agricultural weight around, sticking our adversaries with higher prices for our commodities. Interestingly, the Cult of Global Warming may be accomplishing this very feat as it drives up U.S food prices. Let's have the government impose a stiff tariff against those who aren't behaving nicely towards us. That would not only give them incentive to cooperate, but also possibly ease rising food prices at home.

The Economy: You Reap What You Sow

The credit collapse: How could anyone NOT see it coming? For decades hundreds of millions of Americans have sold their future for immediate luxuries - in the form of home equity loans, credit card debt and adjustable rate mortgages. Of course, shortsighted companies took advantage of consumers' stupidity in exchange for a quick buck. I think it all goes back to the "me-me-me, now-now-now" attitude of the baby boomer generation.

Prophetic were the lyrics of a 1990s Kevin Gilbert song:

"The baby boomers had it all, and wasted everything.
Now recess is almost over, and they won't get off the swing."

Well, recess is certainly over, and those who cashed in their financial future are simply reaping their own noxious harvest.

Also timely was the counsel of LDS Apostle Joseph B. Wirthlin:

“All too often a family's spending is governed more by their yearning than by their earning. They somehow believe that their life will be better if they surround themselves with an abundance of things. All too often all they are left with is avoidable anxiety and distress” (May, 2004).

My family is one of very modest means, but we've managed to avoid the pitfalls of deficit spending. Sure, we don't have a giant flat-screen TV, we drive a couple crappy sedans and our home isn't exactly dinner party material. But still, we have zero debt (excepting a standard mortgage). So I'm not really missing those extraneous niceties at this point.

Detroit Michigan, Land of Firsts

Yesterday it was first in the misery index. Today it's first in foreclosures. Isn't that great?

Some 4.9 percent of the households in the Detroit metro area were in some stage of foreclosure in 2007 -- 4.8 times the national average, according to the study being released Wednesday by mortgage research company RealtyTrac Inc.

Michigan has been in a protracted economic downturn and has led the nation in unemployment, a combination that has caused many homeowners to fall behind on mortgage payments.

We're also a serious contender for winner on the crime front (New Orleans just doesn't have the staying power). Thank goodness we have a liberal governor to make things better for us.

Welcome to Detroit - America's Most Miserable City

Forbes has released its list of most miserable of the nation's largest 150 metropolitan areas, and guess what – Detroit is number one. But then, why wouldn't it be?

Motown is the worst in the country when it comes to violent crime, with an annual rate of 1,251 crimes for every 100,000 residents. Unemployment in the area is below the double-digit rates it hit in the early 1990s, but at 8.5% over the past three years, it is still the second-highest in the country among the 150 largest metro areas.

While Detroit doesn't provoke the sunniest outlooks among its residents, those hundreds of thousands uneducated workers who are still sitting pretty on cushy union jobs have little to gripe about. Even if they get laid-off, it will be in the form of a buyout worth hundreds of thousands of dollars each. If worse comes to worse they can depart at will to their lake cabins up north and wait for brighter economic times.

No, I don't have a chip on my shoulder.

Let the Recall Begin

Michigan governor Jennifer Granholm's disastrous solution to the states abysmal budget deficit is to raise taxes to cover most of the shortfall. Consequently, businesses are set to exit the state for a more tax-friendly environment. We can look forward to a deeper state recession as a result. Unsurprisingly, there is now a movement to recall some key legislators and the governor herself.

Enter the Michigan Taxpayers Alliance, which will initiate recall proceedings in the wake of the malfeasance. The site's blog addresses the reasons behind the budget disaster:

When I served in Lansing, I frequently asked colleagues if they thought reforms, like eliminating the state's prevailing wage laws or becoming a right-to-work state, would help Michigan. Nearly every Republican and a few Democrats told me that they knew such reforms would help the economy, but they could not vote for them because the unions would harshly punish them in an election. Privately, legislators support education reform BUT fear the teacher union would punish them. Shrinking government spending is also supported BUT government employees would target legislators caught enacting such cuts.

Oh, thank goodness for unions!

Recalling the governor appears to be a longshot, but she's the most public face behind the fiasco, and so her name will likely appear at the top of any petition.

I just wonder what morons voted her into office in the first place. Oh, right. Union members.