You are browsing the archive for 2013 October 11.

Avatar of admin

by admin

Spitznagel on Rothbard in ‘IBD’:

October 11, 2013 in Economics

By Mises Updates

Mark Spitznagel, author of The Dao of Capital: Austrian Investing in a Distorted World writes in Investor’s Business Daily: 

Until we learn from the past, we will continue to expose ourselves to devastating booms and busts. The Bernanke-led Fed has only exacerbated the problem, leading us to the brink of an even worse correction.

To capture the lessons learned, we turn to a scholar of the Great Depression: Murray Rothbard of the Austrian School of Economics, who refutes the common misconception that “laissez-faire capitalism was to blame.”

His contrarian and far less popular — yet more accurate — view is that the booms and busts of the business cycle result from shocks to the system caused by monetary intervention.

Specifically, Rothbard blames the 1929 Crash on loose monetary policy during the 1920s. For Rothbard, the boom was the problem; once the Fed pushed asset prices up to unsustainable levels, a crash was inevitable.

Without the meddling of central-bank intervention, the market — like any natural homeostatic system — can reestablish equilibrium on its own by allowing its natural entrepreneurial “governors” to work. Greater savings prompts longer-term production for future greater consumption (and the inverse). The natural order trumps intervention every time.

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Looking at the Big Picture

October 11, 2013 in Economics

America faces two very serious budget problems: Democrats, and Republicans. Partisan wrangling over the brief shutdown of about 17 percent of the federal government has been unnecessarily long and convoluted because both sides keep repeating their misleading talking points and diverting attention away from the central issue — deficits and debt — and toward extraneous or irrelevant topics. Cato scholar Alan Reynolds sums it up: “Extending the debt ceiling requires negotiating about issues that affect debt — namely, taxes and spending — rather than changing the subject to some Republicans’ mercurial wish list about Obamacare.”

…read more

Source: CATO HEADLINES

Avatar of admin

by admin

Entitlement Reform Must be Part of the Deal

October 11, 2013 in Economics

By Jagadeesh Gokhale

Jagadeesh Gokhale

President Obama’s description of what it means to not increase the debt limit is disingenuous. Here’s what he said at his October 8 press conference: “…raising the debt ceiling is a lousy name… it does not increase our debt. It does not grow our deficit, it does not allow for a single dime of increased spending. All it does is (to) allow the Treasury Department to pay for what Congress has already spent.”

Not only is his rhetoric misleading, it reveals how really deep the debt hole is, and how massively difficult the task of climbing out of it will be.

The gridlock on raising the debt limit is but a symptom of deeper divisions in the nation. Those divisions stem largely from long-standing misdirection by public officials on the size of the nation’s indebtedness, arising primarily from entitlement programs that have massive financial imbalances built into them. Those are not part the $16.7 trillion debt already on the books. But they are precisely the ones that President Obama now wishes to unambiguously include in “our debt.”  If we used that reasoning, the debt limit has already been breached.

Each time we increase the debt limit, we allow more of the future entitlement debt– one could also call it implicit debt — to be converted to explicit debt.”

Under the president’s definition, “our debt” must include future unfunded federal payment obligations including Social Security and health care benefits that are expected to grow especially rapidly. But none of the President’s budget agencies—the Congressional Budget Office, the Office of Management and Budget, the General Accountability Office, etc., are willing to measure and transparently report the size of the projected revenue shortfall that the President has now clearly stated is a part of “our debt.”

What we do know is including promised, but unfunded, entitlement payments in “our debt” make it a very large number.

Unfortunately, based on historical precedent, the political deadlock on entitlement reforms is unlikely to be resolved anytime soon. Indeed, there are procedural hurdles involved: In the Senate, for instance, any bills seeking changes to Social Security’s provisions fall under the so-called Byrd rule, which means they can be challenged as inadmissible by a single Senator.

But regardless of how hard it is, it must be done. Because each time we increase the debt limit, we allow more of the future entitlement debt– one could also call it …read more

Source: OP-EDS

Avatar of admin

by admin

Sen. Paul Speaks at Values Voter Summit- October 11, 2013

October 11, 2013 in Politics & Elections

…read more

Source: RAND PAUL

Avatar of admin

by admin

TIME Op-Ed: Why I Plan to Grill Yellen

October 11, 2013 in Politics & Elections

President Obama’s announcement of Janet Yellen as his choice as the new Federal Reserve chairman has prompted speculation about what this might mean for our central bank. Perhaps this can best be judged by reviewing its recent history and Yellen’s place in it.
It is also important to focus on the fact that the Federal Reserve is structurally flawed. The institution needs to be reformed to prevent Yellen, or any other future nominee, from using the enormous power of the Fed to aid and abet the allies of big government. I intend on using the Senate’s constitutional power of consent to nominations as a means to educate the American people on the structural flaws and policies of the Fed that are bankrupting our nation.
The Fed’s favored practice of ‘quantitative easing’ has been questionable at best. One need not be an economist or mathematician to wonder whether printing money out of thin air is a sound way to help the economy. Still, as The Washington Post’s Neil Irwin notes, ‘Yellen has been not merely an engineer of the Fed’s policies of ‘quantitative easing’ and ‘forward guidance,’ but a consistent voice within the central bank to go further.’
Will it now go further? Yahoo Finance added, ‘Yellen, who is the current vice chair of the Fed, is known for her staunch support of the controversial easy money policies that have dominated Bernanke’s two terms as Fed chief.’
‘Controversial,’ to say the least.

Read my entire op-ed for TIME HERE. …read more

Source: RAND PAUL

Avatar of admin

by admin

VIDEO: Peter Klein Deconstructs the Debt Ceiling

October 11, 2013 in Economics

By Mises Updates

He builds on his Mises Daily article from this morning.

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Sen. Paul Speaks at the Values Voter Summit

October 11, 2013 in Politics & Elections

WASHINGTON, D.C. – Sen. Rand Paul today offered the following remarks at the Values Voter Summit in Washington, D.C. Below is the transcript and video.

CLICK HERE TO WATCH SEN. PAUL’S SPEECH

TRANSCRIPT:

Today I want to tell you about a war the mainstream media is ignoring.

From Boston to Zanzibar, there is a worldwide war on Christianity.

You won’t hear much about it on the evening news because the answer is not convenient and does not fit the narrative we have been told about radical Islam.

The President tries to gloss over who is attacking and killing Christians. The media describes the killings as ‘sectarian.’

But the truth is, there is a worldwide war on Christians by a fanatical element of Islam.

Ever since 9/11, commentators have tried to avoid pointing fingers at Islam. While it is fair to point out that most Muslims are not committed to violence against Christians, this is not the whole truth and we should not let political correctness stand in the way of the truth.

Yes, it is a minority of Muslims who condone killing of Christians. But unfortunately that minority numbers in the tens of millions.

Pew Research did a poll which indicated that 21 percent of Egyptians, 15 percent of Jordanians, and 13 percent of Pakistani Muslims find terrorism acceptable if not laudable. A minority? To be sure. But if you add up the numbers in just three countries, over 40 million Muslims sympathize with violence against Christians.

A Daily Telegraph survey indicated that 100,000 Muslims in Britain fully supported the London subway killings, and 400,000 Muslims expressed some sympathy with the bombers.

In Syria, there is an ancient Christian city called Maaloula, where they still speak Aramaic, the language that Jesus spoke. They have been Christian since the time of Christ. They are a small final outpost of Christians in the Middle East. In August, the town was over-run by the Islamic rebels.

As the Islamic Rebels swarmed into town they demanded everyone convert to Islam or die. Sarkis el Zakhm stood up and answered them, ‘I am a Christian and if you want to kill me because I am a Christian, do it.’ Those were Sarkis last …read more

Source: RAND PAUL

Avatar of admin

by admin

More on the Debt Ceiling from ‘Mises Daily’

October 11, 2013 in Economics

By Mises Updates

Peter Klein’s article on the debt ceiling today links also to John P. Cochran’s “The Ethics of Repudiation” and Murray N. Rothbard’s “ Repudiating the National Debt.”

Also from Mises Daily on the debt ceiling:

The Case against Raising the Debt Ceiling” - Robert P. Murphy

Lower the Debt Ceiling” - Mark Thornton – Mises Daily

Should Congress Raise the Debt Ceiling?” – Robert P. Murphy

A Short History of US Credit Defaults” – John S. Chamberlain

Deficits Do Matter” – Hans F. Sennholz

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Washington Times Op-Ed: The nation deserves better than the fiscal irresponsibility crippling D.C.

October 11, 2013 in Politics & Elections

When Sen. Barack Obama was faced with raising the debt ceiling in 2006, he said, ‘The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills.’
Sen. Obama was right. Spending was out of control under the last president. Our deficit in 2006 was $250 billion. Sen. Obama rightly opposed raising the debt ceiling from $8.1 trillion to $8.9 trillion.
Today, our deficit has quadrupled. Our national debt is now $17 trillion, nearly double what it was when Mr. Obama refused to raise the debt ceiling under the leadership of George W. Bush.

Compared to what he was saying in 2006, some might consider the president in 2013 to be a ‘bizarro world’ Obama.
When Republicans suggest debt increases should be offset by spending cuts, President Obama paints us as extremists. He portrays attempts at fiscal responsibility as irresponsible and reckless. This president continues to demagogue – frightening Americans and markets into thinking that failure to raise the debt ceiling means the U.S. will default.
Debt increase or not, the United States will not default. We have never defaulted. A responsible leader would be trying to assuage any such fears.

We bring in $250 billion in tax revenues each month (the amount of our entire 2006 deficit when Sen. Obama opposed a debt-ceiling increase). Our current interest payment on our debt is about $20 billion per month. We have more than enough in tax revenue to pay that interest. There’s absolutely no reason why we would ever default.
Of course, there’s absolutely no reason why we should have to close down World War II memorials during a government shutdown either, but theatrics seem to be this administration’s stock in trade.

Consider how the Democrats have continued to block the Full Faith and Credit Act. Passed by the House in May, this bill would explicitly prevent the federal government from ever defaulting by mandating that even if the debt ceiling isn’t raised, the Treasury must pay the nation’s debt. This way we could actually debate and try to fix our debt problem without the illusory threat of default every time the issue is raised.

But this administration needs the threat of default. This is why Senate Majority Leader Harry Reid has prevented the Senate version of the Full Faith and Credit Act from ever moving forward and why Mr. …read more

Source: RAND PAUL

Avatar of admin

by admin

DiLorenzo and Raico on William Graham Sumner

October 11, 2013 in Economics

By Ryan McMaken

Writing yesterday in LRC, Thomas DiLorenzo notes:

The “essence of militarism,” [William Graham] Sumner observed, is to despise constitutions, to sneer at parliaments, and to look with contempt at civilians. All the neocon talking heads, from Limbaugh to Hannity and Levin and others, adopted the slogan, “9/11 changed everything” every time someone like Judge Andrew Napolitano would argue that the government was acting in contempt of the Constitution with its warrantless wiretaps, internet and cellphone spying, the PATRIOT Act, etc. All American presidents have simply ignored Congress, for the most part, in instigating wars; and of course all politicians at all times (with one or two exceptions) look with absolute contempt at the average citizen.

Sumner wrote of how the war party of his day was making the “the times have changed” argument for war. This was reminiscent of Lincoln’s similar argument that “we must think anew and act anew,” by which he also meant “to hell with the Constitution.”

Militarism destroys capitalist prosperity, Sumner also warned. He observed that all during the late nineteenth century most Europeans were busy working, investing, starting businesses, and improving their standards of living peacefully under a growing capitalist system with little attention being paid to militarism. Such behavior is absolute poison to the state, however, which considers it to be a mortal enemy. So when European war parties began to militarize, Sumner wrote of how government military spending was crowding out private sector growth so much that European capitalism was being “arrested, diverted, and crippled.” This is always the effect of the growth of militarism in particular and of government in general, and in Sumner’s time America was about to embark on the very same economically-destructive path as the Europeans had so foolishly done.

Sumner also observed that the triumph of the imperial state has a great defeat for localism, small government, and the middle class. Ralph Raico, in his essay, “William Graham Sumner and the Conquest of the United States by Spain,” notes:

As foreign affairs became more important, power would shift from communities and states to the federal government, and, within that, from Congress to the president. An ever-busy foreign policy could only be carried out by the president, often without the knowledge of the people. Thus, the American system, based on local government, states’ rights, and Congress as the voice of the people on the national level, would more and more give way …read more

Source: MISES INSTITUTE