Economic Fallacies, Partisan Indolence, and Socialism
March 06th, 2009 | Author: JL

Lew Rockwell discusses the economic ignorance of the Obama administration. He also wonders where the right has been the last 8 years while the Bush administration was carrying out the same awful policies. And finally, a quick summary of why socialism has never, and never could work:

Ludwig von Mises in 1920, however, added something special and new to the critique of socialism. He said that socialism in all its forms cannot accommodate any economic development beyond the hunter-gatherer stage. And the reason has to do with the socialist attack on the ownership and exchange of capital goods. Without ownership, there is no exchange, and so prices do not emerge. Here is his 1920 essay, which says it all.

Without market prices for capital goods, accounting is not possible. You don’t know if you are making money or losing money, saving resources or wasting them, doing the right thing or not doing the right thing. Think of all the decisions that have to be made on the production end that require you to know whether you are wasting resources or not. With steel, do you make more buildings or trains? Or do you make cutlery or computers? Or cars or cables?

You can’t just rely on assessing consumer demand. The demand for stuff is infinite. What matters are choices in light of foregone alternatives. These can’t be discerned with polls or intuition. What matters here is the weighting of all alternative uses of resources. They can only be worked out in real time, in light of the choices of consumers and the profitable production decisions of producers.

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Bailout Prize Patrol
March 02nd, 2009 | Author: JL

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Obama the Interventionist
February 27th, 2009 | Author: JL

Obama is shaping up to be more interventionist than even George W. Bush was, regarding both the economy and military engagement abroad. Justin Raimondo points out the “silence of the liberals” as he increases the military budget, expands the war on terrorism, and fiddles with his campaign promises. The $3.6 trillion budget proposed by the Obama administration comes as little surprise. His war on recession will have the same result that all government wars have: More of what they attempt to eradicate:

Liberal theory teaches that one truism of government is that whatever it does, the results end up making the problem not better but worse. I’m thinking of the war on drugs, the war on poverty, the war on illiteracy, and the war on terror. So it is with the war on recession. Already it has given us a record of failure, for going on a year most recently but really dating back to the 1930s.

The idea that spending billions of dollars that simply do not exist, will make things better is baffling to me. If wealth and prosperity were created as easily as that — by willing money into existence and handing it out to every well intentioned program — then Zimbabwe should be the most prosperous nation on earth. Instead they face 94% unemployment, an inflation rate exceeding 230,000,000 percent, and countless related problems.

Obama is doing way too much. It will cost us.

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Tarp Visualized
February 24th, 2009 | Author: JL

If only it was really this clear.

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Video: ‘Slumdog Thousandaires’
February 20th, 2009 | Author: JL

“What the celebrated film can teach America about economic stimulus”

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That Was Quick: GM, Chrylsler Come Begging For More
February 18th, 2009 | Author: JL

The Detroit auto companies were “loaned” over $17 billion by the government, just before the inauguration of Obama, and they are already asking for billions more. This comes as little surprise with the way government has been handing out unearned money.

A key feature of a free society and economy (Capitalism) is holding businesses responsible for their actions, by allowing them to fail when they are unable to meet the demands of consumers with their own resources. Of course the United States do not, nor have they ever, operated under a Capitalist system. By propping up inefficient companies like Chrysler and GM, we are diverting money into wealth destructive activities. Destruction of wealth leads to deterioration of the quality of living.

People are genuinely concerned about the effects of the bankruptcy of the Detroit auto companies. Many fear mass unemployment (which is happening regardless). However, the foreign car companies cannot meet consumer demand alone, and southeast Michigan has a solid workforce and plenty of capital in the form of factories. Some entrepreneur would likely step in, rebuild the Detroit auto industry, and start selling better and more affordable cars. All this could be accomplished by the government doing NOTHING.

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Stimulating Socialism 101
February 16th, 2009 | Author: Victor Lucas

Recently the Associated Press published an informative bit on Yahoo related to all that stimulating talk that’s been going on in Washington.  It’s titled, “How the economic stimulus plan could affect you”, and it breaks down (at least a portion of) what the new stimulus is intended to do, in simple-to-understand sections, including: Taxes, Health Insurance, Infrastructure, Energy, Schools, Environment, Police, Higher Education and The Poor. 

Scanning through these various sections, one begins to successfully envision Mr. Obama’s image of ”the wealth” being spread around (and around).  Problem is, in reality, it’s debt, not wealth that’s being so generously spread. Debt that according to the AP, “will affect us all directly for years, as well as our children and possibly grandchildren, in higher taxes and probably reduced government services”; which is ironic considering that pretty much every last bit of rubbish contained in the package is meant to inflate an already exorbitant amount of socialized government programs.  Shouldn’t this mean MORE government services?  I’m confused.  Perhaps I need to read through each section once more; a bit more carefully.

Taxes (or rewarding the spenders, “the green” and those already on the government dole):  First-time home buyers will be eligible for an $8000 tax credit, while those who buy new cars won’t have to pay sales tax.  Homeowners who add energy-efficient windows, furnaces and air conditioners can get a tax credit to cover 30 percent of the costs, up to a total of $1,500.  And, my personal favorite, those who ALREADY receive unemployment won’t  pay any federal income taxes on the first $2,400 they receive.  That’s a relief.

Health insurance (namely COBRA and Medicaid):  The government will pick up 65% of the tab  for those unemployed who are on COBRA insurance (for the first 9 months).  Additionally, the plan offers $87 billion to help states administer Medicaid, which “could slow or reverse some of the steps states have taken to cut the program”, according to the AP.

Infrastructure:  Amazingly, while it continues to destroy and rebuild the bridges of countries other than our own, the government intends to spend your money “repaving highways”, replacing the pipes of “century-old waterlines” and reinforcing aging bridges “with fresh steel and concrete”, and all of it here at home!  

Of course, the Associated Press has to be a downer by proclaiming that this $90 billion expense ”is a mere down payment on what’s needed to repair and improve the country’s physical backbone.  And not all economists agree it’s an effective way to add jobs in the long term, or stimulate the economy.”  Come on!

Well, the list goes on and so could I, but in the interest of time (and my sanity) let me conclude with these last few especially exciting points.  Firstly, Mother Nature will indeed be grateful for the more than $42 billion in energy and another $9.2 billion reserved especially for environmental projects.  And so will those working to “keep the peace”, for their cut of more than $3.7 billion. 

Schools (K-12) will get a $54 billion slice of the pie, with another $25 billion going to No Child Left Behind and other “special education programs”.  Head Start and Early Head Start get a mere $4 Billion.  And altogether, the package spends an estimated $32 billion on higher education.

“Poor people” who (ALREADY) get food stamps — 30 million and growing — will get more.  And people drawing unemployment checks — nearly 5 million and growing — would get an extra $25.

Did I leave anyone out?  Probably not.  Those who pay taxes are included as contributers and those who don’t as benefactors, so we’re pretty much all covered in one way or another.

I suppose, as a side note, I could mention the one section I kind of skipped over: The National Debt. Quoth the AP:

“One thing about the president’s $790 billion stimulus package is certain: It will jack up the federal debt.   Whether or not it succeeds in producing jobs and taming the recession, tomorrow’s taxpayers will end up footing the bill.  The national debt — the sum of all annual budget deficits — stands at $10.7 trillion. Or about $36,000 for every man, woman and child in the U.S.”

But think of the roads people!  And the trees and the poor!  Am I right?

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Taxation Obligation?
February 13th, 2009 | Author: JL

When debating the legitimacy of taxation, I’m often confronted with the claim that we are obligated to pay taxes because we benefit from government services, whether or not we consent to paying them. If this is generally accepted logic, then I’m going to start clearing people’s driveways after it snows — without first getting their permission — and demand compensation at a rate of $50/hour. They should comply, and appreciate what I’ve done for them. After all, they’ll probably need to use their driveways; and if so, they’ll undoubtedly benefit from my hard work.

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The Looming Threat of Conscription
February 11th, 2009 | Author: Victor Lucas

In his new book, American Grit: What it Will Take to Survive and Win in the 21st Century, overly zealous neo-con Tony Blankley warns us that “Americans need to toughen up–personally, culturally, and as a national fighting force–if we are to survive the unprecedented threat from Islamist assault.”   Fittingly one of the ways Blankley proposes we do this is through significantly beefing up our military forces; primarily by way of reinstating the draft.

The book’s inside flap informs us that, among other things, the book addresses, “how Obama’s plan for national service is a weak substitute for what America really needs–a full-on military draft”.

Blankley realizes “there is a limit to the number of people willing to volunteer to be a soldier – a dangerous career that is often severely disruptive of family life – and that pool has clearly been tapped out.”  He continues, “We will soon be faced with the choice of severely scaling back our role in the world or expanding the army through conscription.”

William Grigg, in his recent article The Draft-Nappers Are Stirring, points out that “one measure of the depth of Blankley’s totalitarian impulses can be found in the fact that he never considers the possibility that scaling back “our” role in the world (that is, the role assumed by the government ruling us) is the correct and moral thing to do.”

Grigg also notes how Blankley is not at all alone in his America-achieving-world-domination agenda.  Democratic Rep. Charles Rangel of New York has supported similar legislation; along with William L. Hauser and Jerome Slater in their article Bring Back the Draft.

Thankfully, some people (like Mr. Grigg) are not only able to see the threat of a draft for what it really is (an atrocious violation of liberty) but are acting as the sound voice of warning for those Americans who are yet in the dark as to the reality of its seriousness.

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Some New Deal Truth
February 10th, 2009 | Author: JL

Why are they trying to do this again?

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‘Honest Mistake’ Exemption
February 09th, 2009 | Author: JL

tax cartoon

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Is Hyperinflation on the Way?
February 05th, 2009 | Author: JL

Michael Rozeff believes it’s a possibility:

Hyperinflation is not an immediate prospect for the U.S., but considering the positions of both the government and the Fed, much higher inflation in base money and a rising price level for goods are both definite prospects. It is not too early to review what happens in a hyperinflation, if only to help discern and understand the kinds of actions our government and central bank are taking now. I focus on the German hyperinflation of 1919–23.
…
Hyperinflation has a single proximate cause, which is the central bank’s large expansion of the monetary base. What causes such expansion? Large government deficits are one major cause. Fiscal deficits are financed by issuing treasury bonds. When the central bank buys these, it makes the monetary base rise. Government deficits, which have many causes such as wars and social programs, signal a weakness in the political and fiscal systems, which result in taxes not being high enough to cover government spending. The central bank itself causes an independent expansion of the base when it decides to issue credits to such entities as banks, businesses, and other central banks.
This brief summary emphasized the role of fiscal deficits. The U.S. government has a much stronger tax collection system than Weimar Germany. Yet, it is now running the largest official deficit in its history. In 2008, the treasury reports here that outlays exceeded receipts by $816 billion. In the last three months of 2008, the deficits were $485 billion alone. The 2009 deficit will easily exceed $1 trillion. Given the programs being passed and discussed, a deficit nearer $2 trillion is possible. A series of such large deficits is likely according to the Obama administration. The Fed has already indicated its intention to monetize the debt issues of the treasury to an unknown extent.
…
We have heard this theory countless times in the past, but the growth of the government debt has yet to abate. We know in the Weimar Germany case that vast increases in government bond issues and inflationary finance disrupted the entire economy. They did not lead to reduced government borrowing but to greater government borrowing. This is the history of the U.S. economy since the year 2000. Increased borrowing at all levels of the economy has led to a large-scale recession, reduced government revenues, and greater government borrowing. This lays the foundation for greater inflation in the future.

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Obama to the Rescue?
February 03rd, 2009 | Author: JL

At least 55 people have died so far, due to ice storms, and things are looking bleak in Kentucky.

Christopher Manion asks “Is he [Obama] just waiting for the ice to melt, so he can rescue them from the flood?”

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Another Obama Nominee With Some Tax “Errors”
February 03rd, 2009 | Author: JL

Now Three(!) of the president’s nominees have been exposed for their tax problems. Nancy Killefer is the latest tax cheat in this comical ordeal. Why should anyone take these people, or the IRS, seriously? I understand their reluctance to pay taxes, and I’d sympathize with them if they weren’t part of the machine that is determined to make us pay our taxes, and punish us when we make the same “errors” that they make.

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Tom Daschle on How to Handle Tax Cheats
February 03rd, 2009 | Author: JL

“Make no mistake, tax cheaters cheat us all, and the IRS should enforce our laws to the letter” – Sen. Tom Daschle, Congressional Record, May 7, 1998, p. S4507.

I’m sure he meant for this to be applicable only to ordinary citizens, and not important people like himself. He should have clarified.

Wendy McElroy writes:

This is the same Daschle for whom the IRS has forgiven all fines and penalties for the $128,203 in back taxes and $11,964 in interest for tax “errors” in his returns for 2005 and 2007. Why? Because Daschle apologized. It didn’t matter that it took him months to pay up after being informed of the “errors” or that he disclosed the “oversights” only a few days before his Senate confirmation hearing to become Secretary of Health and Human Services. He apologized.

Of course this is the second Obama appointee/nominee that has trouble paying his taxes. But the Timothy Geitner debacle was a little more amusing since he’s now the head of the IRS.

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