The Tin Foil Hat and The Eye of the Beholder

Truth is a difficult thing to recognize and even harder to discover. If the average American were told last year that their government would be proven to be reading our emails, listening to our phone calls, wiretapping the media, and using the IRS as a political weapon they would have laughed and told the messenger to take of his tin-foil hat. It would have been unbelievable to most people. We would still be ignorant if it wasn’t for Edward Snowden.

Edward Snowden was the leak within the NSA that exposed the government’s surveillance program to the world. He embarrassed the United States government and they don’t like it. As of now, Edward Snowden the former NSA contractor is sitting in the Moscow airport international terminal on the run for his life.

If the scandal stopped there, it would be terrible. The true sign of just how deep the rabbit hole goes is that the American people have barely noticed. There haven’t been any riots in the streets or public outcry for the jobs of anyone and everyone who had a played a part in these scandals. It is as though America has just accepted that we will live in a surveillance state as long as we have the appearance of freedom. Even the media has gone so far as to say that Snowden and men like him are traitors and spies.

We need to have a meeting as a society and come to an agreement on what level of control we will allow to our government. Do we have a right to privacy? Are we ok with drone strikes on American soil? Where do we draw the line as a society?

We live in a nation where the raving paranoid delusions of the homeless man you walk by on your way from the train to your office are proving true. The government is watching all of our communication, the President has a kill list that gives him permission to bomb citizens on US soil without a trial, and the government has been caught in at least 5 official lies in the last 9 months. We now live in a world where the tin foil hats have been vindicated, and no one seems to care.


Rape Whistles and the Paradox of the Free Market Economist

I realized something today, free-market economists are like rape whistle manufacturers.

A rape whistle manufacturer most likely got into the whistle making business for the purest of intentions.  He or she most likely wanted to change the world for the better and wanted to empower women against the threat of rape and therefore lowering the overall rate of rape in the world.  There is an interesting paradox associated with this.  The single purpose of a rape whistle is to deter a potential rapist and to alert nearby people.  So let’s say that this rape whistle is the top of the line and lowers rape by 30%, it follows that his or her sales would drop by 30%.  As a business model, you are working towards your eventual obsolescence.

Free market economists are similarly working toward their eventual obsolescence.  The free market when left on its own self regulates.  When we are asked how to fix a problem, our default answer is, “don’t do anything.”  It is easy to see why that advice may not be popular with the people in the crisis.  Historically, the crisis is the cure not the disease, and must be allowed to work.  This impatience is the fuel of for big government.  People want to hear their politicians tell them what they will do to fix their problems.  It is hard to get elected on the “chill out” platform.

Silly things like tariffs and licensing hinder the market from correcting properly.   If a business is poorly run, people choose not to buy their product and the business dies.  Let’s take the most extreme example of a doctor.  Ask yourself if you have ever had a doctor that wasn’t so much bad as he was unlikeable? In the current system that doctor, as long as they don’t actually do anything illegal, is allowed to practice.  In fact, HMO’s and other insurance groups may force you to go to this doctor.  In the free market there are private regulating organizations, similar to consumer reports that would rate doctors on whatever the customers deem important.  Competition would drive down prices while increasing quality.  Wouldn’t you like to know if a doctor is the warm and fuzzy Patch Adams type or more of Dr. House type? The other nice part of this system is the verification.  If I get a state licensed doctor who was having a bad day and decided to take out my gall bladder instead of my appendix, I can just go after the doctor.  What of the licensing board?  They gave their assurance with that license that this doctor was competent.  What repercussions can be taken against that board?  The answer is none.  This model could be made for lawyers, restaurants, banks, and any other heavily regulated profession.

The policies we advocate for are typically getting rid of intrusive and needless policies instituted by a previous generation of Keynesian economists.  The world we work towards and dream of is a world without the hindrance of unnecessary regulations and government intervention.  We dream a world where, ironically, we are out of a job.


Unemployment: The fallacy of the minimum wage.

Introduction

Government is too often in the business of getting reelected and not in the business of the greater good.  The minimum wage law is possibly the most widely misunderstood and backward policy on the books today.  World renown economist Milton Friedman’s definition of the minimum wage is a law that essentially, makes it illegal to hire someone whose work is valued at less than a determined amount.  This policy most affects people that are unskilled and uneducated.  It is ironic that the minimum wage is sold as a program to help the very people it is designed to protect.  If $9.00 an hour is good, then why not $20.00 or $100.00.  The ridiculousness of such a policy can be most easily seen when scaled.  When analyzing public policy it is important to look past the label and get to the true effects of such a program.  In fact 79% of all economists agree that a minimum wage hurts more than it helps. (Mankiw, 2009)

The extent of the problem

Obviously people would rather make $12 an hour instead of 8 but, this forgets that a minimum wage doesn’t force employers to pay every worker $12.  The policy forces companies to get rid of anyone that isn’t worth $12 an hour.  Companies must make a profit to stay in business.  Workers must generate value for a company and if those workers can no longer generate more value than they cost, that worker gets laid off.  To believe otherwise would be to engage in a loss for charity.  America has an under 25 unemployment of 14.8%. (Gumbel, 2012)  This causal relationship becomes much clearer in states with a higher minimum wage against states such as California with a low minimum wage state such as Colorado.  As expected, unemployment is very high in California and very low in Colorado.  Obviously there are statistical anomalies in the data, but for the most part there seems to be a trend.   (Bier, 2013)

The mechanics of the minimum wage.

If I owned a burger restaurant my job, as owner and manager, would be to make a profit.  Let’s say that I make 10 cents per burger in profit and a minimum wage law in introduced.  Looking at the situation from my angle, it becomes very simple to decide who is worth keeping and who gets fired by looking at how many burgers are flipped by each employee per hour.  The least skilled workers get let go because they are not making more money than they would cost to keep on payroll.  The most interesting part is that the skilled workers tend to be paid more anyway because, if they weren’t paid a competitive wage another burger restaurant owner could offer that employee a more money.  So, the people that benefit from the minimum wage are the people that would have made more anyway.  This is the regressive nature of the minimum wage, its connection to unemployment. and why it should be abolished.  The opposite would be allowing the free market to work.  If workers and businesses are allowed to determine for themselves what wages should be, people can be hired what would not otherwise be working.  Even though those workers are being paid a lower wage, they are receiving training and marketable skills to make them more valuable assets and more likly to find work in the future.

Why does the minimum wage exist then?            

Some may ask, why would anyone try to pass a minimum wage law if most economists see that it is harmful to an economy?  The answer is simple and two fold.  The first reason is that raising the minimum wage is a great way to increase votes for a politician.  The politician who supports the law gets to appear as the as champion of the people, while the blame for the resulting unemployment is easily shifted to the “evil” corporations.  The second reason the minimum wage’s are enacted is that some very large businesses, like Walmart and the trade unions  lobby for a higher minimum wage because it keeps out competition.  The minimum wage bankrupts smaller businesses that can’t afford to pay workers the inflated wage.  The unions negotiate for higher wages for their members, so it becomes a barrier for competing workers to challenge their power.  This also results in more unemployment. The policy preys on the people with the least education and thus ignorant to the economic consequences.  People vote for a minimum wage hike because it is easy to see the immediate effects of the policy, people get paid more.  The Philosopher Economist Fredric Bastiat spoke of this in his book The Law that in economics we must look at the seen and the unseen consequences of policy.  It is easy to see the immediate effects of the minimum wage but, to see the unseen effects; you must look at the long term effects of policy. (Bastiat, 1850)  Unemployment is the unseen effect of a minimum wage.

What does the world look like without a minimum wage?

A popular criticism of the minimum wage-less society is that if we lost the minimum wage, then we would all be forced to work for pennies and sweatshops would open on every street corner   The problem with this criticism is that it shares the same shortsightedness of the minimum wage itself.  We live in a free country with a mostly free economy.  In a free society you always have the right to quit a job that isn’t worth the money.  Employers have an incentive to pay a competitive wage to get the best workers possible that can generate the most profit.  These employers need to pay workers what they are worth so that someone else can’t come around and take them away by offering more money.   If people couldn’t make enough to live they couldn’t turn around and buy things to keep most of these businesses going.  A happy medium is always reached when given the opportunity, in economics that is called equilibrium.

Demographics most hurt by increases in minimum wage?

Statistics show that the groups most negatively impacted by a minimum wage policy are the least educated and the least skilled.  Those without a high school diploma are hit hardest of any group.  The highest concentrations of high school dropouts tend to also be where education is of poorest quality, in inner cities.  The second most negatively impacted group are those who are attempting to join the workforce for the first time, youth trying to get their first jobs.  The combination of inner city youth hurts the African American community and Latino community the hardest.  The unemployment rate for an inner city African American is more than double than for a Caucasian  (Poor, 2013) This imbalance leads to an increase in crime and gang activity which exacerbate the cycle.

Conclusion

            The minimum wage is destructive and shortsighted.  It is a racist policy that preys on the very people is designed to protect.   Only the free market can determine what wages should be.  The government should never get involved when two people are trying to make a voluntary exchange.  This is a situation where the government is wrong to step in.  Unemployment could be drastically decreased by abolishing of the minimum wage.

Work Cited

Bastiat, F. (1850). The Law. New York: The Foundation for Economic Education, Inc.

Bier, Daniel (2013, February 25). Remedial economics and the minimum wage: A guide for presidents. Retrieved from The Skeptical Libertarian Blog: http://blog.skepticallibertarian.com/2013/02/25/remedial-economics-and-the-minimum-wage-for-presidents/

Gumbel, P. (2012, November 05). Why the US has a worse youth unemployment problem than Europe. Retrieved from Time Business: http://business.time.com/2012/11/05/why-the-u-s-has-a-worse-youth-employment-problem-than-europe/

Mankiw, Gregory N. (2009). 10 things economists believe. Retrieved from Real Clear Markets: http://www.realclearmarkets.com/charts/10_things_economists_believe-44.html

Poor, J. (2013, March 16). Minimum wage responsible for black unemployment, Sowell says. Retrieved from The Daily Caller: http://dailycaller.com/2013/03/16/minimum-wage-responsible-for-black-unemployment-author-says-video/


The Mutant Liberation Front

Today, Rep Justin Amash followed me on twitter.  It seems like such a trivial thing but, to me, it made my week.  There is a small elite group of about 15 heroes I have in the liberty movement, and he is one of the ones I look up to the most.  The first of this group to follow me was Amanda Billy Rock who I have been a fan of since she was interviewed by Adam Kokesh on YouTube.  She was one of my first subscribers and I hope to one day be able to thank her in person.  I started thinking about this group of liberty superheroes and realized that there were two categories within that group; those who believe the state is the enemy of liberty and those who want to work within the state to bring about liberty.  The more I thought about this group, the more I realized that Libertarians are mutants.

When I was a child I loved the X-men cartoon and comics.  I would watch every Saturday morning and I collected all the action figures, comics, and cards.  What always intrigued me about the X-men was that there were three factions and very few all bad guys.  There were the humans and the mutants but, the mutants were divided into the X-men, and Magneto’s brotherhood of mutants.  Professor Xavier and the X-men worked to build a society where mutants could live free and peacefully with humans.   The X-men often found themselves saving the lives of a group of humans only to be demonized for their trouble, yet they pressed on with their vision.  Magneto was (depending on which origin story you choose) a Jew that lived through the genocides of World War II and saw what the human race is capable of when people blindly follow leaders.  He believed that mutants and humans were natural enemies and that mutants were superior to humans.  Contrary to the portrayal in X-Men First Class (Vaughn, 2011) , Magneto was not a bad guy; he was trying to save his species the best way he knew how, by fighting those that would destroy them.  The humans, for the most part, were scared and afraid of what mutants were capable of and thus lashed out, giving validity to Magneto’s concerns.  It was hard to paint any side as the good or bad guys; they were all trying to live their lives to the best of their ability and understanding.

The liberty movement seems to be made up of two separate sides as well, Libertarians who want to work within the state and those who believe that the state is force and thus the enemy of liberty.  As I sat pondering the similarities between the 2 stories, I have decided that Adam Kokesh is Magneto.  I have also named Ron Paul as Professor Xavier.  The two heroes were friends and even though their philosophies differ still respect and admire each other even though their paths have diverged.  Adam is doing exactly what he believes is correct and I see his very valid points.  I see him fight against the state and admire him for the good he has done.  On the other hand you have Rand Paul, Justin Amash, and others who want to work within the State to shrink the size of government.  I would call them the X-men.

If the Anarcho-Capitalists are Magneto’s Brotherhood of Mutants and Libertarians working within the state (normally the Republican Party) are the X-men then the Republican establishment are the humans.  The humans are scared of the power and conviction of the liberty movement and will go to spectacular lengths to try to kill it before it grows.  As the storyline goes, the humans were so afraid of the mutants that they eventually voted themselves into a global totalitarian regime.  The people’s fears muddy their judgment and the government’s lust for power created forces they could not hope to control. The only ones capable and willing to fight the creeping loss of liberty were the mutants.  I find it telling and interesting that it was only when the two groups came together and focused on the philosophy they had in common that were they able to break the tyranny and brought peace to the world. Well, as much world peace as you can get in a comic book that is.

Works Cited

Vaughn, M. (Director). (2011). X-Men First Class [Motion Picture]. http://www.imdb.com/title/tt1270798/


Keynes vs. Hayek: The fight for the future of our country

As a country, we love to throw around words like freedom, liberty, and free markets without much thought to what they mean.  What is it that makes us free?  What are the liberties we have and why do they exist?  When people discuss the freedom of a country, especially economic freedom, they are really discussing the philosophies of two long dead economists Keynes and Hayek.

Let’s say that two people live on a tropical island.  One is named John and the other is named Fred.  There isn’t a way off the island, and for the purposes of the story there isn’t anything off the island. The island is their world.  On this island there are coconuts and in the water there are fish.  John is a very good fisherman, but he can’t climb trees very well.  Fred climbs like a monkey but has no patience for fishing.  Now, Fred is able to keep himself fed on coconuts, and John can sustain himself on fish, but as one would imagine, that gets pretty boring after a while.  One day the two men get to talking and begin to complain about their diets.  Fred is tired of fish all the time and John is tired of coconuts.  The two men decide to trade some of their food for the others.  John wants coconuts and Fred wants fish, so when they trade they are both better off because trade is a win/win situation.  There was no loser in the deal, both made the choice to trade and both were better off for it.  Now let’s suppose that a government is added to the island and they decide that because fish are harder to catch, there must be a subsidy for John and they then tax Fred 2 coconuts. One goes to pay the tax collector and the other goes to John.  The two men were happy where they were and it is possible that John can no longer afford fish.

The model is simplistic but, it drives home the point that government intervention in a market tends to just muddy the waters and make everything less efficient.

When people think of famous rivalries they immediately think of Muhammad Ali and Joe Frasier or Coke and Pepsi or possibly even Microsoft and Apple but, in the world of economics there is only Keynes vs Hayek.  It could be argued that these two, long dead, economists have the most meaningful impact on your life than any other men in history.  Governments rise and fall in one camp or the other and Presidents win and lose elections because of the philosophies of these two men.  This argument has become the economic and political fight of the century.  (Stories, 2010)

In the red corner we have Friedrich August Hayek was an Austrian economist who immigrated to England to teach at the London School of Economics.  He saw Hitler take power in Germany as well as elected in Austria with 98% of the vote.  He watched as his country lost its freedom for the “greater good.” He observed conditions within Europe and documented the rise of Stalin as well as Franco and Mussolini.  He watched Europe fall to tyranny and, as an economist, was able to track exactly how it got to where it was.    He found that socialism inevitably leads to tyranny.  He compiled all of this information into his 1944 book The Road to Serfdom.  In it he warned against printing money without gold or other precious metals backing it.  He believed that the free market is the most efficient way to preserve our freedom and conduct business.  Simply put, he believed that government should be as small as possible and stay out of the economy and our lives because, it is impossible for government to make decisions for you better than you can.  Under Hayek’s philosophy prices rise and fall with supply and demand and that a depression can be solved by letting the market settle on a new equilibrium. (Hayek, 1944)

In the blue corner we have John Maynard Keynes a British economist.  Keynes served as a financial advisor to England during both world wars.  He also watched the deep depression that happened between the wars.  He saw the British government step in during the time of war to facilitate the British war machine.  He saw unemployment at nearly zero and the total output of the country rising as the government spent more than it collected in taxes to fund the war.  This experience became the foundation for his magnum opus 1936 The General Theory of Employment, Interest, and Money.   The General Theory has been the blueprint of nearly every world power’s economy for the past 30 years.  Simply put, the more the government spends, the more the people have in their pockets to spend on other things and the money circulates.  He theorized that the way to fix a depressed economy is to print money and spend it to get the people money to spend for others to spend and so on.  (Keynes, 1936)

As you can see, these two theories are the polar opposites of each other.  These two schools of thought became known as the Austrian school of economics and the Keynesian school or Keynesianism.  The question is who is right?  I intend to answer this question in three ways.  First we will look at government spending in the American economy during the great depression, World War 2, and after.  We will look at government intervention in markets and its effects.  Lastly we will look at the effectiveness of a central bank, fiat currency, and its effects on the economy as well as on the money itself.  In the words of the rap battling parody of F A Hayek, “prepare to get schooled in my Austrian perspective”. (Stories, 2010)

Government spending on the economy 1929-1948         

The great depression and World War II were some of the world’s darkest times.  Many economists to this day see the depression and the apparent economic boom during and after WWII as evidence of validity of Keynesian government spending.   There are three very prevalent myths about the great depression that should clear up thinking on the matter.  First it is important to understand something of the depression before we pick apart its causes and ends.  It began in 1929 with the stock market crash.  At the end of 1928 the Federal Reserve, America’s central bank, began raising interest rates because stock of speculation, in other words, prices were rising without actual value being added to the economy.  It should be noted that the purpose of the Fed at this time was to prevent a crash. When industry slowed in 1929 and overall growth turned negative beginning the recession that led to the crash.  In 1933 unemployment was at an all-time high of 25%.  (world, 2013)

The first myth is that Herbert Hoover was subscribed to a small government Austrian philosophy and not only allowed the collapse but that he was the cause of it because he didn’t do enough to stop it.  The truth is exactly the opposite; Hoover was a CEO and tried to run the country like a business.  He followed the Keynesian playbook to a T by deficit stimulus spending, or borrowing money to spend more than the country was taking in, in order to get people working again i.e.: the hoover dam. (Learn Liberty, 2011)  On the surface this would seem to help the economy, but the government was only masking the symptom of unemployment buy not creating permanent jobs.  The government was borrowing money to build roads and dams, but this was unsustainable and at some point the country would have to get back on its own feet.   Hoover also raised tariffs, or taxes on goods coming into the United States.  Again, this seems like a way to help the farmers who were experiencing a drought.  This answer too was shortsighted because in protecting the prices of things like wheat and corn for American farmers, it hurt the average man because now prices that would have been much lower for basic foodstuffs were much higher as a result of the government.   It was exactly this kind of intervention that Hayek warned about.  (Hayek, 1944)

The second myth was that Franklin D Roosevelt’s New Deal ended the great depression.   The New Deal was Roosevelt’s plan for fixing the economy by spending money.  In many ways it was a continuation and acceleration of Hoover’s plan.  When hoover lost the election in 1932, Roosevelt was elected to fix the economy.  The problem with that thinking is that it requires the president to intervene.  When a detoxing addict cries and begs for a hit, the worst thing you can do is give it to him.  Most experts now agree that the new deal elongated the depression instead of helping.  The rest of the world recovered much more quickly than we did. The easiest way to show this would be Great Britain.  They followed us into the great depression and an argument could be made that they had it worse, but their healthy fear of government control led them to take a more hands off approach.  They pulled out of the depression by 1933, and afterword had a time of economic growth.  America on the other hand pulled out of the depression much later, which will be discussed in myth 3. (Chitester, 1977-1978)

The third myth is that World War II ended the great depression and saved the economy.   The numbers do seem to prove it, unemployment was down to zero and GDP, the total amount of goods and services the country produces, skyrocketed.  First, let it be said that it is really easy to get to zero percent unemployment, start a war and institute a mandatory draft.  This myth can be easily debunked with logic.  Let’s say that everyone was employed making shells and tanks for the military, we would have full-employment but, nothing to eat. People work to live better and provide for themselves and their family.  Prosperity only emerges when people produce what is demanded.  With that in mind, it would be difficult if not impossible for society to prosper in wartime America, even though we had full employment and our GDP skyrocketed with the production of every new weapon of war.  The demanded resources that were being produced were rationed and thus less of those products were consumed.   When you strip out the war production, we didn’t emerge from the depression till around 1948. (USgovernmentspending.org, 2013)

With these three myths debunked it is clear that government spending, especially money it doesn’t have is a short term fix elongating a long term problem

Government intervention in markets and their effects

In the model of the island and coconuts we saw some of the effects of government intervention.  There are two ways that government intervenes in markets, from the suppliers and the consumers.

When the government wants to affect the supply of a good, it is normally done through tariffs, regulation, and taxation.  As stated earlier, government tariffs are taxes on foreign goods to limit their ability to be competitive in the US.  Have you ever wondered why there is high fructose corn syrup in nearly everything but actual sugar is quite rare?  It is because we tax sugar which normally isn’t made in the US and give tax breaks for corn farmers because corn is one of America’s biggest export goods.  This brings the price of producing corn down and the cost of sugar to everyone else way up.  The second way governments get in the way is through regulation.  As companies have more and more hoops to jump through, they have to spend more and more money on jumping through those hoops.  The cost of the hoop jumping is then tacked onto the product and we, the common man, has to pay more than we would have to otherwise.   It could be said that those hoops have to be there to keep us safe, but we as consumers make decisions about these sorts of things all the time.  When you go to that hole in the wall restaurant for really cheap food, you are making a decision and taking a risk.  If that restaurant were found or even thought to be serving horse meat, you would have grounds to sue and they would be ruined.  So the market weeds out bad service and standards on its own making government involvement redundant and wasted tax dollars.  The last way that government affects the suppliers in markets is through taxation.  Simply put, a tax on a corporation is actually a tax on the consumer because they raise prices to compensate.  The world renowned Economist Milton Friedman loved to say, “Can you tax business? What is business? There is no business to be taxed.  There are people, only people can pay taxes.  Can I tax this floor or this building?  Only people pay taxes, either the worker makes less, the consumer pays more, or the shareholder pays the tax.”

When government wants to affect the demand of a good, they tax it, regulate it, or ban it.  It first must be noted that banning it never helps; prohibition is always a bad idea from an economic standpoint.  Just as speakeasies sprang up as quickly as the police could shut them down in the 20’s, marijuana grow-houses will always be there.   If someone wants a product there will be someone to meet that demand and thus we see the free market finding a way.  Taxing and regulating things only works as long as the cost is not more than the customer is willing to pay.  We regulate cigarettes and alcohol but the people who shouldn’t have them always find a way.  If we taxed cigarettes an extra 10 dollars, a black market would emerge. (Learn Liberty, 2011)

In both instances we see that government intervention in the market leads to redundancy, inefficiency, and a waste of your tax dollars.  The market regulates itself through prices.  If people charge more than something is worth, no one buys it.  If someone charges not enough, they either catch on quick or go out of business, making room for more efficient companies. (Hazlit, 1962)

Central Banks and Fiat Money

There was a time in our nation’s history that you could take your dollars to a bank and exchange them for gold.  Every dollar printed was tied to gold owned by the government and that kept a lid on spending.  In the same way that a household might begin to pay in cash to make sure they stayed within a budget, the government was held accountable in the same way.  This also meant that the value of the dollar was tied to the value of gold.  This began to change during the great depression, where the government saw the lure of Keynesian deficit spending and ran up an enormous debt.  To be fair, in terms of our current national debt it didn’t even make a dent.   To bring it back to our model, the family got a credit card.  Roosevelt ran a deficit of 30% of GDP, meaning that he basically spent a everything the government made plus a third of value of every good and service produced by everyone in the country combined.  (Tullock, 2013) When the dollar left what was referred to as the gold standard, everything changed for America.  Now, politicians could spend as much as they like because the dollar was the most stable currency.  This meant that the world began to use dollars for international trades, because there were so many of them and America wasn’t going anywhere.  This was our Achilles heel, because all of a sudden we could print and print and the world still wanted more.  This is known as inflation.  If you imagine that there are 100 dollar bills in the world, you own 100th of America, if there are 100 billion dollars in the world, you own 1 billionth of America.  It is a crude example, but it makes the point.  This is how we have amassed such a large debt, by spending and printing.  This is how we fund social security, FAFSA grants, 2.5 wars and everything else the government does.  The interesting part is that it is in the best interest of the countries that hold our debt to keep buying it so that the dollars we owe them are still worth something.  A dollar is only worth what someone will give you for it. (Hazlit, 1962)

As it can be plainly seen, the ideas of Keynes are like a college student who has partied too hard and drank too much.  In the morning this person, in lieu of sobering up, decides to continue to drink in order to not have to feel the effects of the hangover.  It may work for the short term but at some point the bottom drops out.

Works Cited

Chitester, B. (Director). (1977-1978). Milton Friedman: Free to choose [Motion Picture].

Hayek, F. A. (1944). The Road to Serfdom. Chicago: University of Chicago.

Hazlit, H. (1962). Economics in One Lesson. New York: Three Rivers Press.

Keynes, J. M. (1936). The General Theory of Employment, Interest, and Money. London: Palegrave-Mcmillan.

Learn Liberty. (2011, June 17). Top Three Myths about the Great Depression and the New Deal. Retrieved from Youtube: http://www.youtube.com/watch?v=7QLoeehMw0w

Stories, E. (2010, January 23). “Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem. Retrieved from You Tube: http://www.youtube.com/watch?v=d0nERTFo-Sk

Tassava, C. J. (2010, 02 05). The American Economy During World WarII. Economic History Association Encyclopedia, pp. 1-5.

Tullock, G. (2013, 09 03). Government Spending. Retrieved from The Concise Encyclopedia of Economics: http://www.econlib.org/library/Enc1/GovernmentSpending.html

USgovernmentspending.org. (2013, 03 09). US government spending since 1900 . Retrieved from USgovernmentspending.org: http://www.usgovernmentspending.com/spending_history

world, T. c. (2013, 03 09). Great Depression in the United States. Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Great_Depression_in_the_United_States


The Federal deficit explained

The national debt is a difficult thing to wrap your head around.  Because all of us have to deal with debt and income at home, I find it best to imagine the US is a household.  You are making $23,000 a year.  You owe $164,000 right now in credit card debt.  You still have pretty good credit because you have a good reputation around town so you have been able to open up and max out credit cards to pay the minimums on the other debts.  You also have a daughter that wants to be a doctor and you know that her education will cost $459,000 when it is all said and done.  She knows it will be expensive so she has worked for years at long hours for minimum wage to put money aside to help pay for it.  That piggy bank begins to look pretty tempting after a while and you begin taking money out of the piggy bank without telling your daughter but you leave an IOU telling her you will pay her back with interest.

This may seem farfetched but the national debt is massive, about 16.4 trillion worth of massive.  That works out to roughly $52,000 for every man woman and child in America.  This number is just the public debt that it has borrowed from other countries and private citizens.  This may seem like a large problem but, sadly this is just the tip of the iceberg.  America has also promised healthcare to Social Security recipients which it doesn’t have the ability to pay, to the tune of 7.7 trillion.  Even more remarkable are Medicare promises at a whopping 38.2 trillion.  That puts the total to 62.3 trillion dollars.  The GDP is the totally amount of goods and services that a country produces.  Our GDP is 15 trillion, but the government only makes 2.3 trillion a year.

To be more accurate to the real world you would have to force your daughter to give you money from her check to pay for a college you know she will never see.  Though the dramatization is admittedly crude, the numbers are real.  There aren’t enough people to tax to fix this problem with taxation.  With these figures in mind, we need to take a hard look at what we spend our money on.  As it stands we borrow $.46 for every dollar we spend.  We have to live within our means if we are to survive as a country.  We have to take a hard look at the “sacred cows” of spending such as defense, social security, and Medicare.

On November 18, 2011 the House voted down an amendment to the constitution that said that congress must pass a balanced budget each fiscal year.  If the American people stand up to out of control spending and demand this amendment, we could be well on our way to facing our problem.  Please, join me and write your congressman and ask that the balanced budget amendment be reintroduced.


Republicans, Libertarians, and the great divide

Wednesday night I watched C-SPAN for the first time in my life.  A friend on Facebook sent me a message to turn it on and said that something amazing was happening. I watched Senator Rand Paul give an old school talking filibuster concerning President Obama’s pick for CIA director, John Brennan.  Though I only caught the last three hours, he filibustered for thirteen.  I watched in awe as the senator spoke at length about due process and liberty.  I also saw several senators added their voices to Sen. Paul’s, even going so far as to read tweets from the number 1 trending hashtag on twitter, #standwithrand, that had over 1 million tweets.  Sen. Paul’s aim was to deny the nomination because of a letter he sent to Attorney General Eric Holder, asking him if the President had the authority to assassinate American citizens on American soil that weren’t in combat.  The response he received didn’t actually answer the question at hand. It basically said, “yes, but we should trust that he won’t.”  Sen. Paul decided that before handing over the keys to the largest and most secretive intelligence agency on earth, which, by the way helped draft the Obama assassination list of Americans targeted for assassination, Eric Holder was obligated to give a definite answer to the question.  Throughout the entire ordeal, there was an air of something important was taking place.  You could almost hear the creaking and grinding of the Republican Party’s rusty gears as these new leaders began to get out and push the party away from the old guard and into a brand new light.

Interestingly enough, this was not the reason I have been moved to action and began this blog.  Whenever the powerful see themselves losing power, they get angry and they get jealous.   When Sen. John McCain spoke yesterday on the senate floor he called the filibuster a political stunt, even called the liberty movement the work of a bunch of “impressionable kids” in their college dorm rooms.  All the people producing 1 million tweets who took the initiative to watch a 13 hour senate speech were all brushed off as “impressionable kids.”  Today he called Sen. Paul a wacko bird…. who says that?  Lindsey Graham also stood with McCain and criticized Rand on the senate floor today while winning an award for world’s most condescending chart/visual aid.  It should also be noted that both Senator McCain and Senator Graham didn’t show up for the filibuster and instead ate a steak dinner with President Obama.

The Obama administration has already killed American citizens overseas with drone strikes without a trial.  The worst part is that these people weren’t in combat; they were killed for 1984 Orwellian-style thought and speech-crime.  Anwar al-Aulaqi may or may not have been a terrorist.  We don’t know because he didn’t get a trial.  His 16 year old son was also killed in a separate drone strike.  When the administration was asked why Anwar’s son had to die, the official answer was that he should have picked more responsible parents.  We live in a very strange time when we have to ask the President if he is allowed to kill his citizens without a trial–and it takes six weeks for him to give an answer.

The Paul name is revered throughout all Libertarianism as a voice of liberty.   Rand’s father Ron was a 12 term Congressman, 3 time presidential hopeful, and was the first to garner widespread appeal Libertarianism in our modern Republican Party.  In fact, he ran against Senator McCain in 2008 for the Republican nomination.  Ron inspired many young voters from both the right and left to follow him, drawing much larger crowds at college campuses than any of the other candidates combined.  Ron also received more campaign contributions from active duty military than all other candidates combined.  When Ron decided to retire from the House in order to focus on his presidential campaign, many of his people looked to Rand to see if he would be the one to carry the torch.  Up until this point, Libertarians have been wary and watching Rand for the spark of his father.  This large group of Paul supporters saw that spark Wednesday and a shift has begun.

Some have said that the Republican Party has been dying for years.  They have lost the popular vote in 5 out of the last 6 general elections.  The base of the party has grown smaller and smaller as well as older and older.  The fresh life being infused into the party hasn’t come from the party base.  It has come from college students who have seen their rights being infringed upon.  They see their paychecks shrinking with the taxation and outrageous spending of the very generation that now talks down to them and calls them “impressionable kids.”  This young generation grew up connected to the internet and they know that bullshit is only a Google search away from being called out.  They stand behind new leaders who understand their problems and encourage their activity within the party.  As time goes on, we see the “old guard” retire and the new blood getting more powerful.  The tighter they grip the thin reigns of their draining power, the more obvious their sad desperation becomes.

UPDATE:

Question: Do you agree with Senator McCain that Libertarians are just getting in the way?  Have you ever been called a wacko bird?  Do you consider yourself a wacko bird?  Leave your answers in the comments down below and don’t forget to subscribe and follow me on twitter


Follow

Get every new post delivered to your Inbox.

Join 360 other followers