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Ron Paul: Can We Afford Ukraine?

March 10, 2014 in Economics

By Mises Updates

Emblem_of_Crimea.svg

By Ron Paul

Officially, US debt stands at more than $17 trillion. In reality, it is many times more. The cost of the US invasion of Afghanistan and Iraq may be more than six trillion dollars. President Obama’s illegal invasion of Libya cost at least a billion dollars and left that country devastated. The costs of US regime change efforts in Syria are likely thus far enormous, both in dollars and lives. That’s still a secret.

So who in his right mind would think it is a good time to start a war with Russia over Ukraine? And worse, who would commit the United States to bail out a Ukraine that will need at least $35 billion to survive the year?

Who? The president and Congress, backed by the neocons and the so-called humanitarian interventionists!

The House voted overwhelmingly last week to provide $1 billion in loan guarantees to Ukraine. That is just the beginning, you can be sure. But let’s be clear: this is not money for the population of that impoverished country. The Administration is sending a billion dollars from US taxpayers to wealthy international bankers who hold Ukrainian debt. It is an international bank bailout, not aid to Ukrainians. And despite the escalating anti-Russia rhetoric, ironically some of that money will likely go to Russia for Ukraine’s two billion dollar unpaid gas bill!

So what happened in Ukraine? The US government and media claims that the US must save Ukrainian democracy from an invading Russian army that is threatening the country’s sovereignty. But in reality the crisis was instigated in part by US meddling. Remember the intercepted telephone call in which two senior Obama Administration officials discussed plans to replace the elected government in Ukraine with US puppets? That is exactly what happened. Is that not a violation of Ukraine’s sovereignty? Is that what democracy is all about?

The Obama Administration’s policy toward Ukraine is hypocritical. The overthrow of the government in Kiev by violent street protests was called a triumph of democracy, but when the elected parliament in autonomous Crimea voted last week to hold a referendum to decide its future, President Obama condemned it as a violation of international law. What about the principle of self-determination, which is also enshrined in international law?

I have long thought that a referendum to reorganize Ukraine into a looser confederation of regions might help reduce tensions. I still believe this could help, but it …read more

Source: MISES INSTITUTE

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Where’s the Austerity?

March 10, 2014 in Economics

By David Howden

Global debt now exceeds $100 trillion, according to the Bank of International Settlements. Over the past five years, debt has increased by about $30 trillion. What’s more, governments have been the largest issuers.

Low interest rates have attracted governments to the appeal of using debt to fund public projects today. As the saying goes, there’s no such thing as a free lunch. At some point this debt is going to become due. At best all these governments have done is shifted expenditure forward by taking from future generations and giving to the present ones.

The magnitude of the indebtedness is what is striking. The $30 trillion of new debt issued over the past five years represents the full output of the American economy for two years. Even ignoring interest payments (which even at low interest rates are fairly hefty on $30 trillion of principal), this is a phenomenal obligation to have to pay back.

At least the IMF is not worried. After all, adjusting government budgets so as to ignore interest payments on these debts yields a positive analysis. By looking at just the primary deficit, the Group of Seven countries are actually running government budget surpluses!

Measures like the primary deficit are like playing golf and not counting the strokes until you’re on the green. Back in the real world, the total amount of expenditure a government makes matters – not just that portion not spent on debt repayment.

Over the last five years the press has been full of discussions of austerity. Allegedly, governments have scrimped and saved to get by. Now we find out that we are collectively $30 trillion more in the hole compared to where we were when the recession began? If this is austerity, I’d hate to see the alternative.

(Originally posted at Mises Canada.)

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Source: MISES INSTITUTE

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Bubble-Sizing the Economy–The Fed Has Done It Again!

March 10, 2014 in Economics

By Joseph Salerno

Household Net Worth

Well, it’s official.  Figures released by the Fed last week indicate that the total net worth of U.S. households has set an all time record in 2013 in terms of both nominal and constant dollars.  In 2013 alone , total net worth climbed by $10 trillion from $70.86 to $80.66 trillion, the largest annual increase in household wealth in U.S history. More to the point,  in 4Q 2013 household wealth adjusted for inflation–i.e., the constant-dollar value of financial assets plus the value of residential real estate net of all debt owned by U.S households–shattered the old record set in 1Q 2007 at the height of Greenspan’s bubble economy.

In the past year this asset bubble has been led by the skyrocketing stock market which has set record highs.  Over 2013, the value of household-owned corporate equities increased by 34% to a record $14 trillion and mutual fund shares increased by 27% to a record $7 trillion. Even housing prices rose by 11.6%, adding another $2.3 trillion to household wealth.  This artificial wealth bubble has been induced by the Fed’s policy of flooding financial markets with money while maintaining interest rates at super-low levels.   It has failed abysmally to stimulate consumer spending, job creation, and economic growth via the “wealth effect” beloved by Greenspan and Bernanke.  Ironically, what Fed policy under Bernanke has done is to put the U.S. economy in the improbable position where another financial crisis appears likely to occur without first producing even the illusion of prosperity and economic growth among the average American.

Meanwhile Janet Yellen denies to all and sundry that there are bubble-like conditions developing in asset markets. The world’s super-rich do not appear to be listening, however. Last week it was reported that the 167,669 ultra-high net worth individuals (UNHWI), a category covering those people who have accumulated over $30 million in net assets excluding their principal residence, experienced an increase in their combined net worth to $20.1 trillion in 2013, up from $19.5 trillion in 2012. In 2013, the UHNWI, most of whom are from Asia or the Middle East, were busy plowing their wealth into global commercial real estate. They spent a combined $11.2 billion on hotels, office buildings, warehouses, and shops, up from $7 billion in 2012. The average price of an office property rose from $63.9 million in 2012 to $162.7 million in 2013.  The latter price is …read more

Source: MISES INSTITUTE

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Has Austerity Failed? (Has It Been Tried?) | Mark Thornton on the Tom Woods Show

March 10, 2014 in Economics

By Mises Updates

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Source: MISES INSTITUTE

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Intergenerational Transfers and Political Support for the Welfare State

March 10, 2014 in Economics

By Randall Holcombe

Supporters of the welfare state might see it as a mechanism for transferring income from rich to poor with the idea of helping those at the bottom end of the income distribution, but in the United States, the welfare state is increasingly transferring income from the young to the old, regardless of the wealth or income of the transfer recipients.

Obviously, this is the case with Social Security and Medicare, the federal government’s two biggest expenditure programs, because only old people are eligible, and there is no means test to determine eligibility for the transfer. And, not only are the old wealthier than the young, the wealth gap between the old and young is growing.

These programs transfer resources from the young to the old, but also, on average, from the poor to the rich.

Add to these long-standing programs Obamacare, which charges the young rates above what it costs to insure them so that the old can pay rates below what it costs to insure them. The program’s designers made no secret of the fact that the program was intended to impose costs on young Americans to transfer benefits to the old.

Obamacare makes the intergenerational transfer even greater. Thus, it is somewhat paradoxical that young voters have increased their support for the welfare state even as old voters have decreased theirs.

The transfer recipients, who are older and wealthier than average, and who will be dead when the true cost of the current welfare state must be paid, increasingly oppose the transfers. Meanwhile, young voters increasingly support these programs that cannot possibly provide them with the same level of benefits they now approve paying to their elders.

The young and old are, on average, both moving away from supporting policies that are in their narrow interests.

The most paradoxical part of this paradox is that the policies the young support not only work against their current interests, but also against everyone’s interests in the future because the high cost of funding these programs will slow economic growth. Today the old benefit from those transfer programs; in the future, everyone, both young and old, will be worse off because of them.

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Source: MISES INSTITUTE

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Robert Reich on America's Economic U-Turn and How to Move Forward Again

March 10, 2014 in Blogs

By Robert Reich, RobertReich.org

America has forgotten how we came to economic prosperity: working together.


This article originally appeared in RobertReich.org, and is reprinted here with their permission.

Do you recall a time in America when the income of a single school teacher or baker or salesman or mechanic was enough to buy a home, have two cars, and raise a family? 

I remember. My father (who just celebrated his 100th birthday) earned enough for the rest of us to live comfortably. We weren’t rich but never felt poor, and our standard of living rose steadily through the 1950s and 1960s. 

That used to be the norm. For three decades after World War II, America created the largest middle class the world had ever seen. During those years the earnings of the typical American worker doubled, just as the size of the American economy doubled. (Over the last thirty years, by contrast, the size of the economy doubled again but the earnings of the typical American went nowhere.)  

In that earlier period, more than a third of all workers belonged to a trade union — giving average workers the bargaining power necessary to get a large and growing share of the large and growing economic pie. (Now, fewer than 7 percentof private-sector workers are unionized.) 

Then, CEO pay then averaged about 20 times the pay of their typical worker (now it’s over 200 times). 

In those years, the richest 1 percent took home 9 to 10 percent of total income (today the top 1 percent gets more than 20 percent). 

Then, the tax rate on highest-income Americans never fell below 70 percent; under Dwight Eisenhower, a Republican, it was 91 percent. (Today the top tax rate is 39.6 percent.)

In those decades, tax revenues from the wealthy and the growing middle class were used to build the largest infrastructure project in our history, the Interstate Highway system. And to build the world’s largest and best system of free public education, and dramatically expand public higher education. (Since then, our infrastructure has been collapsing from deferred maintenance, our public schools have deteriorated, and …read more

Source: ALTERNET

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The GOP's Other War on Women: 5 Gender Battlegrounds Beyond Abortion and Contraception

March 10, 2014 in Blogs

By Katie McDonough, Salon

Women care about more than birth control. From guns to poverty, here's why the party is doomed.


Republicans are having a tough time shaking the “war on women” label, probably because they can’t stop themselves from sounding — and voting — like a bunch of raging misogynists. But when they do try to deflect this particular brand of sexism, it usually goes something like, “[Women are] more than just a set of reproductive organs, and I’d like someone to talk to me about how they’ll help my pocketbook and keep my health care plan that I like.”

Despite evidence to suggest that plenty of Republicans very much view women as a set of reproductive organs, this is verbatim what a Republican strategist told the New York Times last week in an attempt to challenge the idea that the GOP is a party of caveman bigots. It’s also what Mike Huckabee tried to communicate when he argued that the GOP opposes insurance coverage for contraception because it trusts that women can “control their libidos.” Rand Paul — a man who a majority of conservative tastemakers believe should be the next president — views the GOP’s problem with women as something of a nonstarter, mainly because there are lots of them enrolled in his niece’s veterinary program.

And you can be sure that this is the message that the organizers of CPAC were shooting for with a panel called, “Why Conservatism is Right for Women: How Conservatives Should Talk About Life, Prosperity & National Security.” (Undercutting their pro-woman rhetoric was the fact that the conference only featured a handful of women speakers on the main stage, and the organizers’ decision to go heavy on outdated cartoon villains like Sarah Palin and Ann Coulter rather than relevant conservatives like New Mexico Gov. Susana Martinez.)

The Republican-led assault on basic medical care has had devastating consequences for women, transgender men and gender non-conforming people who need safe, reliable access to abortion, and there’s no doubt that it’s a losing issue with the voters that the party …read more

Source: ALTERNET

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WATCH: Snowden Participates in SXSW Panel, Says the NSA Has Set 'Fire' to the Internet

March 10, 2014 in Blogs

By Alex Kane, AlterNet

The man who exposed mass surveillance spoke via video in his first public live appearance since fleeing the U.S.


In his first live public appearance since fleeing the U.S. after leaking thousands of secret intelligence documents, Edward Snowden warned that the National Security Agency (NSA) is ruining the Internet.  

Snowden, who obtained asylum in Russia after helping to expose the NSA’s dragnet surveillance of millions of Americans, was speaking at the South by Southwest (SXSW) festival in Texas on a panel about how NSA spying impacts the tech community.  He spoke via livestream, with an image of the Constitution as his background.

U.S. government surveillance is “setting fire to the future of the internet,” he told the crowd, adding that “you guys in the room are the global firefighters.”  He was referring to ways to combat mass surveillance, like using encryption and TOR, a way to browse the Internet anonymously.  Also speaking on his panel was the American Civil Liberties Union’s Ben Wizner and Christopher Soghoian.

Snowden also criticized Congress for shirking its duty to oversee the NSA.  And he blasted the heads of the NSA.  “More than anything, there are two officials who have harmed our Internet security and national security. Those two officials are Michael Hayden and Keith Alexander”–respectively, the former and current heads of the agency.

Watch Snowden's address here:

Related Stories

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Source: ALTERNET

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Dem Candidates and the ObamaCare Albatross

March 10, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

Faced with the continuing unpopularity of the Affordable Care Act, aka Obamacare, Democrats across the country appear to have settled on a new mantra: Don’t repeal it, fix it. Unfortunately, saying you want to fix Obamacare appears to be easier than actually fixing it.

Of course, everyone wants a better website. Even the Political Action Committee associated with Nancy Pelosi has been running ads for Democratic candidates that criticizes “the disastrous healthcare website.” But other than better computer programming, one wonders what Democrats would actually do.

Saying you want to fix Obamacare appears to be easier than actually fixing it.”

Polls show the narrow line that Democratic candidates must walk. Some individual elements of the law, such as the ban on denying coverage for preexisting conditions and allowing children to stay on their parents policies until age 26 are well liked, but overall the legislation remains remarkably unpopular. According to the RealClearPolitics average of polls, voters oppose the law by a margin of 52 to 39 percent. Still, Democrats take heart from polls that show the public favors “fixing” the law, rather than “repealing” it outright. 

Thus you find Alex Sink, the Democratic candidate in the March 11 special election for Florida’s bellwether 26th Congressional District, saying of the health care law, “It’s not perfect, so let’s fix it.” But trying to track down exactly how she would fix it is a bit more elusive. Sink’s website says only that she wants to “Keep the good, get rid of the bad.”  

I guess that answers that.

The same purposeful vagueness can be found in Kentucky where Allison Lundgren Grimes, who is seeking to oust Senate Minority Leader Mitch McConnell (R-Ky.), allows that she is “concerned with some aspects of health reform.” Beyond her “concern,” the only fix she offers is to delay the employer mandate for a year. That’s a pretty risk-free position since President Obama has already delayed it for longer than that.

Sen. Mark Pryor (D-Ark.), considered by many observers to be the most endangered Democratic Senate incumbent, has been aggressive about challenging Republicans for their lack of ideas about how to replace the Affordable Care Act. He recently challenged his opponent to “put your money where your mouth is….You’re identifying all these things, let’s go ahead and try to fix them.” Yet, neither Pryor’s Senate page nor his campaign page even mentions the Affordable Care Act, let alone offers any proposal to fix it.

Meanwhile, another at-risk …read more

Source: OP-EDS

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Breitbart Op-Ed: Stop Warping Reagan's Foreign Policy

March 10, 2014 in Politics & Elections

Every Republican likes to think he or she is the next Ronald Reagan. Some who say this do so for lack of their own ideas and agenda. Reagan was a great leader and President. But too often people make him into something he wasn’t in order to serve their own political purposes.
Reagan clearly believed in a strong national defense and in ‘Peace through Strength.’ He stood up to the Soviet Union, and he led a world that pushed back against Communism.
But Reagan also believed in diplomacy and demonstrated a reasoned approach to our nuclear negotiations with the Soviets. Reagan’s shrewd diplomacy would eventually lessen the nuclear arsenals of both countries.
Many forget today that Reagan’s decision to meet with Mikhail Gorbachev was harshly criticized by the Republican hawks of his time, some of whom would even call Reagan anappeaser. In the Middle East, Reagan strategically pulled back our forces after the tragedy in Lebanon in 1983 that killed 241 Marines, realizing the cost of American lives was too great for the mission.
Without a clearly defined mission, exit strategy or acceptable rationale for risking soldiers lives, Reagan possessed the leadership to reassess and readjust.
Today, we forget that some of the Republican hawks of his time criticized Reagan harshly for this too, again, calling him an appeaser.
I don’t claim to be the next Ronald Reagan nor do I attempt to disparage fellow Republicans as not being sufficiently Reaganesque. But I will remind anyone who thinks we will win elections by trashing previous Republican nominees or holding oneself out as some paragon in the mold of Reagan, that splintering the party is not the route to victory.
I met Ronald Reagan as a teenager when my father was a Reagan delegate in 1976. I greatly admire Reagan’s projection of ‘Peace through Strength.’ I believe, as he did, that our National Defense should be second to none, that defense of the country is the primary Constitutional role of the Federal Government.
There is no greater priority for Congress than defense of the nation.
I also greatly admire that Reagan was not rash or reckless with regard to war. Reagan advised potential foreign adversaries not to mistake our reluctance for war for a lack of resolve.
What America needs today is a Commander-in-Chief who will defend the country and project strength, but who is also not eager for war.
Regarding Russia’s invasion of Ukraine, for example, there is …read more

Source: RAND PAUL