I not only use all the brains that I have, but all that I can borrow.
Woodrow Wilson
Guest Quotation of the Day
HT Don Boudreaux of Cafe Hayek
The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. - Adam SmithBarry Obama and his fellow fascialists have never understood Adam Smith. Central planning is sheer megalomaniac, futile hubris;
Choose Life: Super Bowl Dads
To Be a Father: The Price of Loving One's Son
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| Samuel Forrest and Baby Leo: via ABC |
Real Austerity: Not Spending Cuts, But Tax and Regulatory Increases
I saw in one of my emails a reference to Fed chief Yellen being a hawk. I believe it was a recycled 2013 paper by Hanke. I initially wondered if this was whether Yellen would finally take her foot off ZIRP policy with apparently today's widely heralded jobs and income report, the point being that central banks are usually a day late and a dollar short in anticipating inflationary pressures in a growing economy. But Hanke is arguing the other part of Fed policy, i.e., QE, which has inflated its balance sheet, hasn't reached the real economy due to banking reforms. Now before going further, there are a few tools that the Fed has to try to cool inflation and/or an overheated economy, i.e., raise interest rates, sell notes/bonds/other assets, or raise the reserve requirement. (We would reverse these tactics to try to snap the economy out of a slump.)
Hanke notes that we have to distinguish two types of money: state money and bank money. The Fed is basically concerned with state money but the bank money--which includes things like deposits and checking accounts. What Hanke argues is that when we saw capital/assets ratio requirements raised as commercial banks served as a key scapegoat during the 2008 economic tsunami, Raising capital or or selling risky assets basically destroys money/tightens the larger banking money supply; in practical terms, a smaller amount left for lending, effectively increasing lending costs: not exactly the kind of thing you want when you're trying to snap the economy out of a slump.
In fact, I refer to regulations as an indirect tax which doesn't hit the government books, but just like taxes is a drain on the company's cash flow. I believe the following is from the same sources I listed in yesterday's post:
During President Obama's administration, a record 21,000 new regulations on businesses were enacted, most of them without Congressional approval.Hanke points out that bank money (at that time) was tight, about 6.5% below trend. Taxes and regulations do to business what the new bank regulatory "reform" did to the "real" money supply. Yellen has de facto been pursuing tight monetary policies, just not in terms of interest rates. Note that Dodd N. Frankenstein was the wrong medicine at the wrong time--and a priority of the 111th Congress.
Last year alone Obama issued regulations costing American taxpayers and businesses an estimated $762 million in regulatory costs per day, according to the American Action Forum.
All told, President Obama's administration has filled 468,500 pages in new regulations in the Federal Register.
Moreover, according to the Competitive Enterprise Institute, the president is poised to unleash another 2,375 new rules on American businesses this year, and again without first giving Congress an up or down vote.
Facebook Corner
(Reason). Liberals and conservatives agree: paying more in taxes is a great patriotic duty, especially if you're well-off. Are you with them, comrades?
Another convoluted piece by Gillespie. He seems to be arguing that the GOP and the Democrats both favor higher-income tax hikes, which is manifestly absurd. I'm not a GOP shill, but this is bumper-sticker nonsense. I think he's really talking about the House GOP leadership not pruning spending much (I agree); I think a lot of that has to do with some 70% of the budget being entitlements that politically are very difficult to do without the Dems joining in. I think the real problem is you can't do that with a spendthrift POTUS who threatens to veto any budget without spending increases and is still looking to rollback sequester cuts. The GOP knows better than to commit political suicide over spending cuts that will never pass over a veto and the Dems will use in campaign ads. Notice how the Dems refuse to acknowledge we have an unfunded liability problem--and as Gillespie notes, there aren't enough rich people to fund unsustainable programs. I suspect it won't be until there's blood on the streets, e.g., like public sector pensions, before we see politicians address the big issues. Granted, the Republicans need to go beyond defunding Big Bird...
Vote democrat and lose your freedom and your rights. Vote republican and lose your rights and your freedom.
What retard seriously believes the GOP is responsible for the 70% of the budget which is entitlements? Think beyond tired LP soundbites...
(Cato Institute). "The nation’s long-term fiscal situation needs a solution, and the White House is releasing an unserious plan that shirks the very real responsibility to address our troubled entitlement programs."
Congress needs to replace the funds they stole from the account during the 60's, Social security and medicare just needs to be funded by congress. America can't move forward without progress. Republicans wake up and stand up. We Are Watching and Waiting.
Some misinformation in this thread. I believe contribution surpluses have always been invested in government notes, which the Congress uses to offset operational deficits. The pay-go system has always offset distributions with contributions; when the system is in deficit like I believe it has been since 2010, the difference is made up by redeeming notes and/or interest paid on said notes. To avoid liquidating the reserves, they've increased payroll taxes something like 16 times.
But raided? No. This is an urban legend spread by Jim DeMint and others. What DeMint seems to have confused is LBJ's intent to bring social security "on budget" which is sort of like filing a joint return vs. individual returns. When you file a joint return, the income doesn't change, just the accounting.
I am entitled to my Social Security and Medicare by virtue of having been forced to pay into those systems for nearly half of a century. I first pard SS taxes when I was 15 years old and raising chickens for FFA.
Actually, dependng on income/contributions, you haven't paid enough into the system to justify expected distributions--that's exactly why we have an unfunded liability problem. There are some obvious steps to limit expenditures/disbursement. Reforming the system to eliminate fraud and other waste is one obvious tool; deferring and/or capping and means-testing distributions are another, We could talk about privatizing/diversifying the social security reserve; right now we are vested in government overspending--which is not a real asset. But Harry Browne sounded a solution in terms of financing a privatization, i.e., selling or leasing national assets (land, buildings, power stations/pipelines/infrastructure, oil/mineral rights, etc.) What's not acceptable: payroll tax increases.
Political Cartoon
Musical Interlude: My Favorite Vocalists
Dusty Springfield, "You Don't Have To Say You Love Me". Just pure awesomeness...
