Economic Miseducation

I have taught basic principles of economics for thirty years to groups after groups of college students who were often cross-eyed, bored, running late, playing with their phones, angry that I gave them too many notes, “hard tests,” and too many assignments which interfered with their busy social lives.  

Many students were there just to get a grade and to complete their useless social studies degrees on the way to an advisor’s assurance of a six-figure salary job on day one, an offer that would never materialize on their limited horizons. They did not care that their parents went in debt to pay for this college miseducation they received or that hard-working taxpayers funded their federal grants for four years. Most of them had no clue how the economy ran nor did they care.

It is painfully obvious that today students and college graduates are just as woefully incompetent and uninformed. They are voting in droves for their Marxist/communist of their choice, falling for empty promises of free education in their communist utopia of free birth control pills and free legalized drugs.

None of them paid attention in Economics classes that in communism abortion is not a choice, birth control pills are not available or expensive, and drug use is punishable with hard time in jail.  Education is free technically but there is no room to educate everybody in the halls of higher learning, so only a select few are chosen, usually the elite’s children are picked first, regardless of grades. If there are places left, then those with the highest scores are admitted.

Someone who spends a lot of his time running computer models to predict economic downturns, upturns, bubbles, crashes, and collapse, attempted to educate the audience on Facebook. Most of his advice fell on deaf ears because people are tired of listening to anybody, they know it all already, and have already made up their minds to go full speed ahead off the cliff, they want to try things for themselves, why listen to reason and rational thought. Repeating failed history in hopes of a different result seems enticing to most people.

In his analysis, in an economic environment of “120 percent debt to GDP ratio, we have less than five years before economic implosion.” He defined “Point Zero” as the point where the national debt becomes 120 percent of GDP, an unsustainable scenario that would cause an unrecoverable spiraling downturn of the economy. A black swan event would make things much worse.

In order to make sure the economy becomes sustainable again in the face of a 19 trillion national debt, “entitlements” must be reformed, spending and waste must be cut, some regulatory burdens on corporations must be reduced or eliminated, and taxes must be raised.

And this does not even begin to address unfunded liabilities such as Social Security and Medicare. Entitlements comprise 70 percent of the budget and debt servicing is 10 percent. This leaves just 20 percent of the budget that can be cut. Is that sufficient to even begin reducing the huge national debt?

Cutting the corporate credit card will force Congress to balance the budget. They cannot spend more than they take in from Treasury auctions and taxpayers. How many Congressmen will risk their careers in order to do what is right? Congress does not seem willing to address any of the above because they do not want to compromise their political careers and thus destroy the power they yield in Washington.  

Even though both spending cuts and tax increases are necessary, Congressmen fight and politically posture on both sides of the isle while nobody’s pet project or state funding gets cut. Why are Congressmen unwilling to cut pet projects? When they do, they know their constituents will vote them out of office.

We keep giving money to the U.N., we fight unwinnable wars with strange rules of engagement, and we waste more money on our political friends and foes overseas at a time when we can ill-afford it.

To make matters worse, inflation is looming on the horizon because of the three quantitative easings (QEs), printing money without the backing of goods and services in order to purchase our own debt.

The corporate mandate of the Affordable Care Act (ACA) has not even taken full effect yet. We are not sure if Congress will repeal Obamacare without a replacement. The preexisting conditions’ feature of ACA is a good idea.  In spite of dishonest political rhetoric, nobody will die in the streets without medical care.

But there is rationing occurring already due to the burgeoning and very expensive bureaucracy. We cannot offer care to more people and illegal aliens without substantial costs to the nation which so far seem to be far greater than if we would have given free premiums to the millions of uninsured who, before ACA, could not secure nor afford medical insurance. Some of them were already recipients of Medicaid.

We are sitting on a social unrest powder keg as evidenced by Ferguson, Baltimore, the Black Lives Matter, the collegiate race-baiting violence, and ISIS coming to our shores via unprotected borders. The social cohesion is breaking down faster than you can say All Lives Matter.

Even though our national debt to GDP ratio is quite high (104.7%), our economic situation is slightly different than Greece’s because we can print our own dollars. http://www.tradingeconomics.com/united-states/government-debt-to-gdp

Our fiscal policy is in a mess. Taxation burdens the middle class and favors crony capitalism while spending is out of control.  Almost 50 percent of the country does not pay any taxes and crony corporations move their headquarters to other countries to avoid paying proper share of taxes. Because corporate tax in the U.S. is one of the highest in the world, Congress enabled corporations to move overseas via Congressional bills.

The burden of taxation falls on the middle class yet again. TPP is going to move most of the remaining manufacturing sector overseas, transforming U.S. into a service economy and destroying many blue collar and white collar jobs in the process.

Congress originates the spending bills and approves them. The President can express what he wants and signs or vetoes bills, but the ultimate spending power and control rests with Congress. Congressmen are few and far between who have strength of character or the will to do what is unpopular. Nobody wants to be perceived as hurting parents trying to feed their kids, put a roof over their heads, or as “throwing grandmas over a cliff.” So the out-of-control spending continues to balloon.

American citizens themselves do not want to give up their instant gratification and suffer without their Starbucks coffee and the pain or indignity of a less than 75-inch TV or other electronic gadgets that are creating the blue screen hunchback nation. Why bear responsibility for yourself when Uncle Sam can do it for you?

Presidential hopefuls make promises to the electorate that will not reduce debt substantially in the absence of a robust and sustained economic growth that would bring in additional revenues. Some talk about “entitlement” reform by increasing the retirement age. Proposals to create economic growth are not very encouraging. There is no magical pot of gold at the end of the rainbow, nor another bubble that would bring in enough revenue to offset the very large budget and reduce the unpayable national debt.

What Will it Take to Right the Ship of State?

People ask all the time what will it take to return our Constitutional Republic to its previous glory, away from the century-old destructive road to socialism and one world government global communism? The answer is obviously complex, as there are many nefarious plans and forces at play, seemingly unrelated, all merging at some place in time when the point of no return will be reached. The bridge over the dangerous chasm will be entirely destroyed and crossing to safety will be impossible.

Conservative and America-loving ideas to preserve free markets and our way of life are considered radical and extreme by the regressive minority running the country. Even individuals who are trying to do the right thing and respect their oath of office are constantly harassed and intimidated by the political correctness (read free speech censorship) running our government.

We must honor existing international agreements, alliances, and treaties and fulfill ethical and legal obligations to our allies. Nobody should be allowed to enter into new treaties through backdoor legislation that overrides the power of the Senate to ratify treaties and any such agreements, no matter what the title; the agreements and private-public partnerships formed under the aegis of U.N. Agenda 21 should benefit the American people, not the globalist corporatist interests who have no allegiance to our country.

President Obama’s trade agenda, the trade promotion authority (TPA), would allow him to fast-track new trade deals like Trans-Pacific Partnership (TPP) with 12-nations from Asia to Latin America. The trade promotion authority (TPA) bill, sponsored by Senators Orrin Hatch (R-Utah), Ron Wyden (D-Oregon), and Paul Ryan (R-Wisconsin), would give Congress a vote on trade agreements “negotiated by the administration, but lawmakers would not have the option to amend those deals.” http://thehill.com/policy/finance/239810-obama-trade-fight-engulfs-the-capitol

If you liked the North American Free Trade Agreement (NAFTA) with its millions of jobs lost and the huge U.S. trade deficit created, and none of the benefits advertised before its passing, then you are going to love the Trans-Pacific Partnership (TPP).

“This job-killing trade deal has been negotiated in secret,” said Sen. Bernie Sanders (I-VT). “It was drafted with input by special interests and corporate lobbyists, but not from the elected representatives of the American people.”

TPP removes any remaining impediments to shipping American jobs overseas; it will rob consumers of product safety and labeling.  It will also allow for unchecked flood of immigrants from the 12 signatory countries into the United States. Foreign companies can sue the U.S. government for any damages deriving on American soil. They can pollute the environment and the fees levied by the EPA against them will be paid for by the American taxpayer directly and indirectly.

TPP is a worse threat to our national security than the declared climate change, a.k.a. seasons. Our national debt will grow exponentially and we will become consumers suffocated by debt with jobs left only in the domestic service sector.

The military should be used as a last resort with a defense apparatus based on realistic and truthful understanding of threats. Foreign policy should identify issues that may result in conflict and attempt to resolve them diplomatically first. Women in power with college activist experience should not be allowed to make decisions for the entire country when they have no real understanding of battlefield conflict issues or historical precedent.

Qualified leaders should be chosen based on their work that benefits the American people, not corporate interests, political donations, and charismatic personalities.  

Redundancy in appropriations should be eliminated. The out-of-control spending that doubled our national debt in the last eight years should be curtailed.

Responsible top military leaders should build the strongest defense on the planet by using technology in every area possible, even cyber space. Decisions based on the cold war era format that started in 1947 may or may not be applicable today.

Instead of declaring climate change a national emergency and security threat, energy independence should become a defense issue by developing domestic sources of energy, an independence steered away from the Middle East countries which are steeped in religious hatred, turmoil, wars, and centuries-old tribal conflict.

The College of Education and the Common Core national standards should be immediately eliminated. They represent the “progressive” (read regressive) indoctrination into the global communist ideology and Islam.

Even though some regulations are necessary to maintain a relatively clean environment, the Environmental Protection Agency should be defunded and controlled as it overtly attempts to destroy the coal industry, the main engine of affordable energy supply for our vast economy, and the use of our land and private property.

If we are to remain an independent country, we must protect the largest source of cheap energy derived from fossil fuels, oil and coal. Because scientists have demonstrated that the earth continues to produce oil, the name fossil fuel is somewhat inaccurate and deceptive. Alternative sources of energy should not be entirely discounted but maintained as a plan B in the event of an EMP attack.

Defund any attempts to promote Green Growth, to socially re-engineer our towns, cities, our agricultural land, and stop any attempt to reshape every facet of our economic lives based on a debunked scientific hoax and a non-existent danger to the planet earth as promoted by the climate change industry and U.N.’s Agenda 21.

Do not buy into “living with less” environmentalist/global warmists agenda of housing, herding the population into “stack and pack” tiny apartments and shipping containers turned into homes smaller than most hotel rooms and prison cells, while the global elites live in mansions on the most beautiful beach front pieces of real estate in the world, the very beaches that environmentalists tell us are supposed to be underwater due to global warming melting the ice caps. As Mark Steyn said, “environmentalists are communists, green on the outside and red on the inside.” http://www.truthrevolt.org/news/steyn-environmentalists-are-communists

The Department of Energy as the main distributor of college research grants duplicates other departments. Its stated mission is now “to ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.” It has been years since we built a nuclear power plant, but we have wasted billions giving grants and subsidizing failing solar power plants and windfarms, many who have produced few and expensive kilowatts of energy, while destroying wildlife.

Can we right the ship of state before the point of no return? Are Americans willing and interested in doing so?

Is it possible to realistically right the ship of state when misguided young Americans destroy and torch their own city and businesses that could employ some of the 70 percent jobless youth? Why would a mayor “give them room” to destroy a city?

Why would useful idiots riot to turn our country into a third world basket of lawlessness, corruption, and racial hatred egged on by professional agitators who make the empty promise of non-existent communist social justice?

Copyright: Ileana Johnson 2015

 

 

 

Where Do We Find Money When We Are Broke?

Where do we find money to fund so much out-of-control spending when we are so broke, our national debt ($17.5 trillion) with unfunded liabilities ($128.3 trillion) exceeds $145.8 trillion? Where did the Democrats find almost $4 trillion to fund this year’s budget when Gross Domestic Product is $16.1 trillion and the total national assets are $112.1 trillion for almost 318 million Americans? http://www.usdebtclock.org/

How did it happen that United States, a former power house of wealth and industry, now burdened by a national debt impossible to fathom and repay, can find money to send to Ukraine in order to protect its sovereignty but does not care about U.S. sovereignty?

How can Congress find money to send to every tin pot dictator in the world and to groups that are not just hostile to the U.S. but desire our demise, but reduces benefits, commissary access to affordable food, and Tricare health care premiums to our military? Did Congress not promise care and support for life to our military in exchange for their service often paid with their lives?

The government is citing “economic woes” in their explanation for military families’ budget cuts. Should we not slash financial aid to Mexico, Pakistan, or other nations that “undermine U.S. sovereignty?”

Why do minimum wage earners, less than 2 million in the whole country, deserve over $10 an hour for low-skill jobs while our military in the trenches earn less for dangerous jobs yet they don’t complain so vociferously and publicly?

How can we justify cutting down our military so drastically at a time when the world is arming around us, rattling its swords, while China is increasing its military budget by 12 percent?

How can we find money to destroy our excellent educational system and replace it with yet another half-baked experiment in socialism called Common Core Standards?

How can our government tax the middle class to death, including poor American students who are struggling to pay bills, while finding $4.2 billion annually to give to illegal aliens in earned income tax credit for children who are not American citizens and do not even live in the U.S.?

How can we destroy our medical insurance system for 85 percent of Americans who were satisfied with it, in order to pay for the 14.8 percent who did not have medical insurance in 2008, in the name of social justice? How can Democrats spin the latest Gallup poll that showed that 17.1 percent of Americans did not have health insurance in 2013, compared to 15.9 percent so far in 2014?

How is it fair to give illegal aliens Affordable Care Act medical care (it is affordable for them since it’s free) while charging those who had good insurance plans higher premiums, higher deductibles, higher co-pays and offering them less care and less access to doctors?

How is it possible to claim that we are in a recovery when millions are out of work, millions on food stamps, and the labor force participation is one of the lowest since 1978? http://data.bls.gov/timeseries/LNS11300000

How is it possible to find money for Planned Parenthood to kill babies, but we must cut medical services to the elderly, the very young, and the handicapped?

How did we find hundreds of millions of dollars to waste on the computer program that was supposed to run ObamaCare smoothly yet it is a monumental failure?

How did we find money to fund infrastructure in other countries and “nation building” but our own infrastructure is in disrepair in spite of the billions of dollars spent on economic stimuli?

When did $300 million become a rounding error in the Democrat-controlled budget of almost $4 trillion?

How does it happen that U.S. never runs out of money for welfare? There are so many legal and illegal beneficiaries that choose welfare over work because it is more lucrative.

How did Congress find money to give itself a raise and subsidize 75 percent of the ObamaCare premiums for itself and staff under the excuse that someone who makes a six-figure salary cannot afford the premiums?

How can we afford to buy ammo to the tune of hundreds of millions of dollars for federal agencies, including the post office, and why?

How can we afford to buy war-like urban assault vehicles and drones for small and large towns’ police departments in the nation and why?  Should we not fill the pot holes first and secure crumbling bridges? Why are we no longer building roads?

How did we find so many billions to fund renewable energy projects such as solar and wind when they have gone bankrupt one after another, killed and fried birds, including the bald eagle, and generated so little electricity for such a high cost per kWh?

Why do we fund billions of dollars to support the global warming hoax when thousands of real scientists have come out to say that there is no such thing as “settled science” and “consensus,” it is just a convenient and profitable political tool to assert power and control?

Why did we kill NASA’s Space Shuttle program  but we have money to fund studies that investigate the color of the feathers of the first bird on Earth (black), to develop a video game that “depicts a female superhero sent to save planet Earth from climate changes allegedly caused by social issues that affect women,”  to fund a study that found “unintelligent robots do not have the ability to maintain a baby’s attention,” or allow “117,000 Americans to double-dip into Social Security disability insurance and the federal unemployment insurance program to the tune of $850 million?” http://blog.heritage.org/2013/08/20/morning-bell-15-pictures-of-ridiculous-government-spending-guaranteed-to-make-you-mad/

What is going to happen when the U.S. national debt we owe collectively for the out-of-control spending now will come due later? If we cannot pay it back to our creditors, are we going to lose our national assets? Are we escalating our nation’s wellbeing to a point of no return, the fundamental transformation we were promised?

 

 

The Boston Marathon Bombing and Amnesty for Illegal Aliens

The Boston Marathon bombing was a glaring and painful lesson in the premise of the much touted gun-control legislation, which was thankfully defeated this week in the Senate. Liberals and the administration were angry that their own brethren, the Democrats, could not gather enough votes to pass the anti-gun legislation that only 4 percent of Americans supported. This legislation would have denied 2^nd Amendment rights to 96 percent of Americans who wished to defend themselves against home invasions.

An entire town was in lock down, held hostage to the idiotic creed that somehow, leaving everybody vulnerable, without guns to defend themselves, shaking in fear behind closed doors, while one 19 year old criminal was on the loose, would make everybody safer and prevent harm to one’s family. I wondered how many citizens wished they had the non-existent “assault weapon” or any weapon to protect their loved ones.

On the other hand, how was it possible that a goofy-looking 19 year old required a massive man-hunt comprised of an entire SWAT team, police, and National Guard, armed with semi and fully automatic rifles, similar to semi-automatic AR-15 that liberals said that law-abiding Americans should not own?

Astonishingly, 46 Democrat and Independent Senators voted this week to give away Americans’ Constitutional rights to a foreign power, the United Nations. The U.N. Small Arms Treaty which had been promoted by the current administration would have placed a global ban on the importation and exportation of small firearms. All private gun owners in the U.S. would have been affected, requiring an international gun registry on all private guns and ammunition. Would criminals have abided by the treaty? I don’t think so. The narrow vote of 53-46 prevented the United States from entering into the United Nations Arms Trade Treaty - for now.

The two Chechen brothers, Tamerlan and Dzhokhar Tsarnaev, the alleged bombers in Boston, stole a car with a “COEXIST” bumper sticker. Liberals love to display this sticker on their Priuses and Smart Cars in order to show their tolerance towards other cultures and religions that are usually not so tolerant or peaceful. Ironically, the elder brother was taken to a Jewish hospital in an attempt to save his life.

Both brothers, devout Islamists, were not so tolerant after all and did not wish to “COEXIST” in peace. They thanked the Bostonians that took them in, gave them food and shelter, free education, scholarships, mentorship, a mosque to pray in, legal residence, and even citizenship, by killing and maiming Americans in cold blood on the day celebrating life, American history, and marathon tradition in Boston, on Patriot’s Day.

According to Glen Howard, president of the Jamestown foundation, there are less than 200 Chechen immigrants in the U.S., mostly in the Boston area. Seventy percent of the immigrants are women. The Treasury Department lists the Islamic International Brigade, the Special Purpose Islamic Regiment, and the Riyadus-Salikhin Battalion as radical groups on a terrorist list. These groups were implicated in the Moscow theater hostage bombing that killed 129 people and the 2004 Beslan school massacre in which 320 children were killed.

The Tsernaev family emigrated to the U.S. as refugees after the outbreak of the 1999 Russia-Chechnya war. There were four brothers, mom, and an assorted number of relatives. The alleged bombers attended the Boston Latin School which prides itself as being the oldest school in the U.S., founded in 1635, “serving an economically and culturally diverse population,” with students representing 83 nations. The liberal ideology of diversity did not seem to work out so well with certain groups of immigrants.

Because they claimed refugee status, the Chechens, who are Sunni Muslims, were admitted into the U.S. when Dzhokhar was six years old. Educated in the diversity of Boston, where being American is feeling guilty for perceived past transgressions and wrongdoings of the “evil empire” against the rest of the world, Dzhokhar became an American citizen last year.

Tamerlan was absent from the U.S. for six months yet that did not raise suspicions. Ordinary, law-abiding permanent legal residents who leave the country for more than 30 days are flagged by Immigration and must be moved to the back of the line if they petition to become citizens.

It would seem that U.S. citizens should decide who immigrates to the U.S. What was the benefit of these radicalized Muslims to U.S. citizens? How has unchecked immigration benefitted Americans in the past? It encouraged chain migration of low skilled workers who brought their extended families and later became a financial burden to the U.S. taxpayers to the tune of billions of dollar each year.

Why do liberals insist on bringing refugees from third world nations for the sake of diversity? We are quite diverse and inclusive as a nation as long as people are willing to become part of us, to grow together. Why bring people in who hate America, its culture, its Christian foundation, religion, and its language? Why do educators teach anti-Americanism? What purpose does it serve to politicize tragic events and point leftist fingers at “right wingers” just because ideologies collide? When tragedy strikes, we are all Americans, regardless of skin color, religion, or ideology.

We are a nation of laws yet 11 million illegal aliens, mostly Latinos, who broke our laws and crossed the border illegally, demand to be recognized and rewarded with a path to citizenship while four million foreign nationals with visas are waiting patiently in other countries to come to America lawfully.  How many potential terrorists are hiding among these 11 million illegal aliens?

The Gang of Eight senators promises that the border will be secured after these 11 million illegals come out of the shadows. Who stands to gain from this massive immigration bill? Big business, big labor unions, and representatives of “unauthorized immigrants” (the new euphemism which replaced “undocumented Americans”) such as La Raza (the Race) will benefit from “legislated amnesty.” Only four percent of Americans who were polled think that amnesty is a good idea. Ninety six percent of Americans oppose amnesty in any form.

It is not just the fact that illegals do not want to be assimilated and live in their own self-appointed enclaves, trying to transform America into the repressive country they’ve escaped from.

According to Robert Rector of the Heritage Foundation, amnesty would cost taxpayers more than $2.5 trillion and is currently working to revise the number upwards. Millions of illegal immigrants would qualify for federal benefits (welfare, Social Security, earned income credit, etc.), college grants, and would receive healthcare through Obamacare exchanges since they are not excluded from the Affordable Care Act.

Sen. Rubio said that amnesty would be granted without government benefits but that is just wishful thinking. As soon as illegal aliens get legal status, they will be transitioned to citizenship, to federal benefits, and, most importantly, to voting.

Millions of new Democrat voters will change the political landscape forever. Latinos may be conservative with their religious values but they believe that the source of financial success and prosperity is big government and that will never change.

When Ronald Reagan amnestied 3 million illegals in 1986 with the Congressional promise that the border will be enforced, the security never happened. The amnesty caused more illegal immigration which brought us to the 11 million illegals today. Only 37 percent of those amnestied in 1986 voted Republican. Furthermore, this 1986 amnesty caused Republicans to lose California to the Democrats.

Social Security, Medicare, food stamps, and entitlement programs represent trillions of dollars in unfunded liabilities to taxpayers. Adding more recipients to the welfare rolls and retirement benefits rolls will increase the already out of control national debt. Most illegal aliens have a tenth grade education or lower, collecting more in benefits than they pay in taxes. The broken immigration system should be fixed first before giving illegals citizenship and federal benefits. (Heritage Foundation, Jim DeMint)

The inability and willingness to control the flow of potential terrorists among the illegal aliens is just the tip of the iceberg. We cannot afford trillions of dollars in extra government spending. We cannot afford millions of illegal aliens in front of the employment line when 20 million Americans who want to work cannot find a job. We cannot afford to sponsor an endless chain of relatives most of whom have no means of financial support or education to earn a living.

We cannot afford $900,000 to fund White House tours for our American children but the Immigration bill wants to spend $50 million to help illegal immigrants file for the “registered provisional immigration status.” Would it not be cheaper if we enforce the current immigration laws and deport the illegals back to their respective countries while stopping the “anchor baby” automatic citizenship which was meant for the children of slaves not illegal immigration?

 

 

 

 

An Army of One and Fiscal Uncertainty

In a January 24, 2013 breakfast speech, Gen. Raymond T. Odierno warned his audience that “Today, the greatest threat of our national security is fiscal uncertainty.” (www.army.mil/article/95007/Jan242013CSAremarkstoAUSAILWBreakfast/)

Our volunteer army has over 88,000 soldiers deployed, 56,000 in Afghanistan alone, thousands in Kuwait, Qatar, Kosovo, Sinai, Horn of Africa and 91,000 soldiers stationed in 150 countries. In the last twelve years, 1.5 million men and women have deployed overseas and half a million of these soldiers served on multiple tours, some 2-5 times. My friend’s daughter Bonnie served four tours. It is a strong, well-trained, remarkable, and honorable army. But no army and exceptional training in the world can protect and serve our country’s needs without proper funding.

The Joint Chiefs of Staff wrote a letter on January 14, 2013 to Congress leaders expressing angst over the future readiness of our Armed Forces in light of the current budget conditions.

The Senate has not passed a budget in four years. Operating on continuing resolutions and the specter of more continuing resolutions for 2013 has already cost the Army a deficit of more than $6 billion in operation and maintenance accounts because money cannot be moved from one budget that is “overprescribed” to another budget that is “undersubscribed.”

The sequestration threat of 9 percent across the board cuts and the Department of Defense cuts will cause an additional shortfall of $6 billion in operations and maintenance for the FY 2013 for a total of $12 billion.

The funding of the wars in Iraq and Afghanistan (Overseas Contingency Operations) is also uncertain, potentially experiencing a $5-7 billion gap in financial needs for operations and maintenance. By March 1, when the debt ceiling is reached again, the Army will face a drastic total shortfall of $17-19 billion.

According to Gen. Odierno, prioritizing will guarantee that soldiers in Afghanistan or going to Afghanistan will be prepared, soldiers going to Korea will be properly equipped, but the readiness of the Division-Ready Brigade at Fort Bragg may suffer, as well as the training and maintenance across the Army.

Immediate effects in the next six months will include “extremely low levels of readiness,” cancellation of rotations, delay in equipment coming out of Iraq and Afghanistan, and maintenance on current fleets. Afghanistan is a land-locked country and moving equipment out is very expensive. Delays due to lack of funding in 2013 will definitely snowball into FY 2014 and FY 2015.

To mitigate the fiscal uncertainty, the Secretary of the Army and Gen. Odierno have prepared to:

-          Freeze immediately all civilian hiring

-          Terminate temporary employees

-          Furlough the civilian workforce

-          Curtail temporary duties and missions that are not critical

-          Reduce thirty percent in installation operation costs

-          Cancel and reset of orders for 2013 of units that have not deployed or were set to deploy

Decisions have not been made yet for contracts, studies, facilities management, community services, and research and development programs.

Gen. Odierno described the situation as serious in the “highly uncertain global security environment.” He surmised, “This is a time that I would say is not a time of peace and stability around the world.” There is great instability around the globe, in Algeria, Libya, Syria, Iran, North Korea, and the Middle East. “The Arab Spring has not sprung yet.” The Sinai is the biggest concern [we’ve had] in the last 30 years in terms of stability, particularly at a time of fiscal problems.

In the next five years, the Active Duty force will be reduced to 490,000 in an environment where the Budget Control Act has already cut $500 billion. Plans were made before sequestration for the removal of soldiers from 21 installations in the United States. Modernization efforts were reduced; this begs the question, how ready and strong are we? And what will happen to veterans’ services, medical care, military families, Wounded Warrior program, and transitioning back to civilian life program?

Can we afford to become too weak militarily? Can we really ensure that we don’t have to go to war, that we can prevent conflict when the world is a basket case of uncertainty and renewed aggression from many directions? Are we so naïve to believe that we can hit a reset button that will make everything peaceful, new, and friendly? We should always remember that “The strength of our Nation is our Army” and the ability to defend ourselves in the face of evil.

 

 

 

Butler on Business Radio Segment WAFS 1190

Lighthearted radio chat (8 minutes) with Alan Butler on WAFS 1190 Atlanta on 12-12-12. I come on at the 33 minute mark. Topic: personal stuff and a few minutes about my articles this week.
http://host1.cyberears.com//18050.mp3

"Addressing Our Debt Is a National Security Imperative"

I have written several articles on the national debt as the biggest threat to our national security. I have given numerous lectures on the subject and every time, during the Q and A time, professionals astonished me with their naiveté. Liberals always post unkind and downright insulting commentaries to my articles, accusing me of being a “tool” of the one-percenters and a paid advocate of the rich. Nothing could be further from the truth.

You do not have to understand all the intricacies of economics, the machinations, and the manipulation of statistics, the market speculation and derivatives to realize that, if you were to run your own household on a constant deficit that is quadrupling in four years, you are in terrible trouble and are going bankrupt.

Our Gross Domestic Product (GDP) is approximately $15.5 trillion but we spend $6.4 trillion at the federal, state, and local levels, making our gross debt to GDP ratio almost 106 percent. We are not Greece, Spain, or Portugal but we are on our way.  I use the word “approximately” because these figures change constantly. (http://www.usdebtclock.org/)

I realize that, unlike Greece, Spain, Italy, or Portugal, we can print or create our own currency out of thin air since we are still in control of our monetary policy via the Federal Reserve System while the Mediterranean countries must depend on the monetary policy of the EU, coming from Brussels.

The U.S. total debt is almost $58 trillion, personal debt is $16 trillion, mortgage debt is $13 trillion, student loans $932 billion and credit card debt $846 billion. The U.S. debt on interest alone is $4 trillion.

I realize that the student loans have been nationalized and President Obama has plans in place to forgive this debt in exchange for service in poor areas, after 5 years of minimum payment, or by an executive order. However, the overall taxpayers would be responsible to pay any forgiven student debt. How would the students and their parents feel when they paid off college debt without any help from Uncle Sam? Where is, as the liberals like to say, the “social justice?”

There is a level of debt that has been relatively constant and is a hot potato for politicians who want to be re-elected – unfunded liabilities. An unfunded liability is an expenditure that will occur in the future for which there are currently no reserves set aside or in a lock box – the money must be spent as it comes in as revenue. Revenue of course, cycles with taxation levels, booms and recessions in the economy, and the level of spending that the federal government is engaging in. The Social Security liability is almost $16 trillion, the prescription drug liability is $21 trillion and the Medicare liability is $ 84 trillion – a total of $121 trillion U.S. unfunded liabilities.

A very important question should be asked by any thinking American, can we afford the huge, not yet fully known cost of the unfortunately named the Affordable Care Act (a.k.a. Obamacare) on top of these unfunded liabilities? Is the free market not the best alternative if we make needed changes to private plans such as portability across state lines, elimination of certain pre-existing conditions, and tort reform? Do we have the money to grow the federal government’s already out of control spending and to satisfy the ever increasing demand for entitlements from the winning electorate?

The Federal Reserve monetary base is approximately $2.7 trillion. The M2 money supply is $10.4 trillion (cash, savings, and small time deposits such as CDs). The Treasury securities (T-bonds, T-bills, and T-notes) add up to $1.2 trillion. The most bothersome part of the Federal Reserve Monetary Base is the currency and credit derivatives at a whopping $632 trillion. The most common types of derivatives are: forwards, futures, options, and swaps in underlying assets such as commodities, stocks, bonds, interest rates, and currencies. Since it is highly speculative, it is highly volatile as well, as witnessed by the housing crash based on investment in bundled mortgages of good and insolvent mortgages.

Uninformed liberals viciously attack and slander the credibility of people like me who report that our national debt is the number one threat to our national security.  Would they attack the one page ad (page A13) and its signatories as it appeared in the Washington Post on December 5, 2012, “Addressing Our Debt is a National Security Imperative.”

The message from the newly formed Coalition for Fiscal and National Security (www.FiscalAndNationalSecurity.org), sponsored by the Peter G. Peterson Foundation, asks that the fiscal cliff resolution by the end of the year should contain:

-         Stabilization of the debt as a share of the economy on a “downward path for the longer term” because our global leadership is threatened if we accrue national debt faster than we grow our economy

-         Substantial deficit reduction over the next ten years with “parameters for longer-term fiscal reform, including future levels of debt as a share of the economy, and a date by which the budget must balance”

-         Tax reforms to raise more revenues through “eliminating deductions, increasing rates and/or more fundamental changes to our tax code”

-         “Changes to entitlements on a sustainable long-term path”

-         “Changes to defense and other discretionary spending, while protecting the most vulnerable”

-         “Congress and the President should agree on an expedited process to enact legislation reflecting this framework in 2013, in the truest form of patriotism – putting our country first”

I am not privy to defense strategy but I see the rising military threat around the world and the anti-American sentiment coupled with terrorist attacks.  I believe in the Roman strategy of “Si vis pacem, para bellum,” “If you want peace, prepare for war.”

I am skeptical of the Coalition’s last statement, “In our judgment, advances in technological capabilities and the changing nature of threats make it possible, if properly done, to spend less on a more intelligent, efficient and contemporary defense strategy that maintains our military superiority and national security.” Somehow, getting rid of a substantial amount of Marines and soldiers, mothballing naval resources, and cutting nuclear arsenal when others around the world are building more, do not seem like good ideas. I could be wrong.

The signatories to this coalition are former government officials who have served during eight Presidential administrations, Democratic and Republican, and “strongly believe that our long-term debt is the single greatest threat to our national security”:

-         Admiral Michael G. Mullen, Coalition Chairman and former Chairman of the Joint Chiefs of Staff

-         Samuel R. Berger, former National Security Advisor

-         Sam Nunn, former Chairman of the Senate Committee on Armed Services

-         Ike Skelton, former Chairman of the House Committee on Armed Services

-         Madeleine K. Albright, former Secretary of State

-         Harold Brown, former Secretary of Defense

-         Robert M. Gates, former Secretary of Defense

-         Paul O’Neill, former Secretary of the Treasury

-         Paul Volcker, former Chairman of the Federal Reserve

-         James A. Baker, III, former Secretary of State and the Treasury

-         Zbigniew Brzezinski, former National Security Advisor

-         Henry A. Kissinger, former Secretary of State and National Security Advisor

-         George P. Shultz, former Secretary of State and National Security Advisor

-         John Warner, former Chairman of the Senate Committee on Armed Services

What will liberals say who love entitlements and are unwilling to give up an inch of their cradle to grave mentality?  They believe that taking care of their every need is a birthright. They should not have to care for themselves as self-reliant Americans have done for generations. They are the Entitled Generation.

The problem is that the Entitled Generation is running the country into the ground. As Dr. Thomas Sowell so eloquently stated, “I have never understood why it is ‘greed’ to want to keep the money you’ve earned, but not greed to want to take somebody else’s money.” I would call it theft and enslavement of the producers.

 

 

 

 

Radio Chat with Silvio Canto of Dallas on U.S. Economy

U.S. Economy, fiscal cliff, this day in history - radio chat with Silvio Canto of Dallas
http://www.blogtalkradio.com/cantotalk/2012/11/30/the-us-economy-with-dr-ileana-johnson-paugh

National Debt Is Still the Biggest Threat to Our National Security

“An unlimited power to tax involves, necessarily a power to destroy, because there is a limit beyond which no institution and no property can bear taxation.” – John Marshall

Americans are in denial about the simple fact that our national debt is the biggest threat to our national security. National debt grew exponentially from Washington’s profligate deficit spending, recessions, and wars.

When I looked today at the national debt clock, each taxpayer owed approximately $142,000, the figure changing rapidly based on factors such as the value of the dollar, trade deficits, and the latest sums borrowed from U.S. taxpayers or from whatever country willing to buy our Treasury Securities, T-bills, T-notes, and T-bonds - China, Japan, and oil exporters being the largest buyers of U.S. debt so far.

The national debt to most Americans is something on paper in a faraway place that does not concern or affect us. Americans have no idea how it grew so exponentially large, where it came from, who owes it, who owns it, and how many zeroes a trillion has.

Perhaps the debt figure would become more real to Americans and take on dire significance if each taxpaying citizen would receive a bill for $142,000 payable in full right now, no kicking the can down the road to our children and grandchildren in exchange for our current comfort.

It is true, our national debt is measured in dollars, which we can always print in order to meet our payments. This is called monetizing the deficit. Doing so, however, creates inflation, as too much money is chasing too few goods. A responsible government should never print money in outlandish excess of GDP, the amount of final goods and services produced in a year. If they do, hyperinflation will occur, and severe devaluation of the currency.

“Since 1971, U.S. borrowed $50 trillion to produce only $13 trillion of goods and services in a 40 year period.” Egon von Greyerz, a financial analyst with Matterhorn Asset Management AG in Zurich, Switzerland, said, “From 1971 when President Nixon ended the gold-backing of the dollar, virtually all of the growth in the Western world has come from the massive increase in credit rather than from real growth in the economy.”

The mantra that the “rich are not paying their fair share” promoted by the MSM sound bites and the Democrat ruling party prompted many to calculate what would happen if we were to confiscate every millionaire and billionaire’s wealth, what impact would have on our national debt, the accumulated budget deficits of previous years. All the U.S. accumulated wealth would last a mere two months.

There is a difference between income and wealth. The Democrats are talking about taxing the rich (income), not taxing the wealth – big difference which voters clearly do not understand. Taxing income will result in “spreading the wealth” from producers to takers in the name of “social justice” and the subsequent consumer spending, with no tangible assets created. Excessive tax discourages capital formation and job creation, stifling economic growth. Perhaps that is the political intent of the ruling party.

Taxing the rich already brings in the lion’s share of revenue to the Treasury. If the rich are taxed too much, who is going to create manufacturing jobs, the government?

Average earners and small businesses that pay taxes at the personal income tax level are now the rich - the middle class will be taxed more when the Bush era tax cuts expire and the Obamacare taxes will go into effect in January 2013, contracting job creation. The Democrats and the President have no intention or concrete plans to cut spending. Their main goal seems to be tax increases.

According to Mark Steyn, if the government was to confiscate all of the $44 billion that Warren Buffett has, it would only last four days at the current level of spending.

Much ado has been made in the press about Warren Buffet who did not pay the same tax percentage as his secretary. When Mr. Buffett complained, I was not clear what kept him from writing a “fair share” check to the IRS, matching his secretary’s percentage.

Mark Steyn calculated again that, if everyone’s tax indebtedness would go up according to this Buffett rule, the deficit created by the Obama administration in 2011 would be paid off in 514 years and we would still have the deficits created in the other three years of this presidency.

The national debt has exceeded $16.3 trillion but Gross Domestic Product (all the final goods and services produced in a year domestically) is only $15.3 trillion, one trillion short. The federal revenue from taxes is $2.4 trillion. We have spent almost 7 times what we raise in taxes annually. 

The problem is not that Americans, rich or poor, are not paying enough taxes, the problem is that Congress and this administration are spending too much money. Spending to GDP ratio is 41 percent.

We have paid so far in 2012 almost $4 trillion in interest from excessive borrowing when our money supply from cash and savings is $10.3 trillion.

Our national debt has exploded in the last four years. During President Obama’s first three years in office, it grew by $4.7 trillion, an increase of 45 percent. (factcheck.org)

Our current policy seems to be putting pressure on the U.S. dollar until two options remain - default on the U.S. debt, or monetizing it by printing more money. If we default, as in any case of bankruptcy, creditor nations would demand payment in American assets – our oil fields, mines, land, parks, monuments, buildings, military bases, and even the indentured servitude of generations of taxpayers.

Can we refuse to pay our national debt?  We could but the consequences might not be so pleasant. Britain, Germany, and Italy blockaded the ports of Venezuela during the Venezuelan Crisis of 1902-1903 when dictator Cipriano Castro refused to pay foreign debts and damages suffered by European citizens in the Venezuelan civil war.

Defense Secretary Leon Panetta said the following during the November 20 speech to the Center for a New American Security (a think-tank in Washington):

“One of the national security threats is the question of whether or not the leaders we elect can, in fact, govern and can, in fact deal with the challenges that face this country.” (Emelie Rutherford, Defense Daily, November 26, 2012)

Secretary Panetta was initially questioned during this meeting why the Senate failed to pass the Law of the Sea Treaty (LOST). Most Americans are actually glad that LOST was not ratified since it is part of U.N. Agenda 21’s plan of global governance.

Sequestration may not be such a good idea when it involves the military. Si vis pacem, para bellum, the Romans said, “if you want peace, prepare for war.”

Panetta acknowledged that budgeting “can’t just be about cutting, it’s got to be about investing, investing in space and cyber, investing in unmanned systems, investing in the kind of capability to mobilize quickly if we have to. And most importantly, maintaining our defense industrial base in this country so that we are not in a position where I’m forced to contract out the most important defense capabilities that I need. I can’t do that. I can’t just contract those out to another country. I’ve got to have that capability here in the United States.”

National debt is the number one threat to national security. If we keep squandering trillions of dollars borrowed from our potential foes and have nothing to show for our spending, except increasing dependency of our population on welfare, food stamps, and entitlements, if we cut NASA and rent space on Russian flights, if we spend so much that we are no longer able to invest in infrastructure, technology, medicine, space exploration, industry, manufacturing, and defense, our integrity as a powerful nation is severely threatened and damaged.

 

 

Friday Radio Chat with Silvio Canto from Dallas

One hour radio chat with Silvio Canto on Blog Talk Radio, 9-21-12.
http://www.blogtalkradio.com/cantotalk/2012/09/21/our-friday-chat-with-dr-ileana-johnson-paugh

Welfare Recipients Entitled to Be Lazy and in Debt

“I must confess, when I see anyone with an Obama 2012 bumper sticker, I recognize them as a threat to the gene pool.” Allen West

Yesterday I saw a new bumper sticker in Maryland, “Obama cares.” President Obama and his administration must care a whole lot – they love to spend so much money that we are running up a projected fifth year of $1 trillion deficit spending.

The national debt clock is changing red numbers as fast I can focus, reflecting the out-of-control spending in Washington and the weak value of the dollar in conjunction with our disastrous energy policy, high unemployment rates, comatose economic growth, and the rapid rise in welfare.

The public debt today is nearing $16 trillion while U.S. tax revenues are a mere $2.3 trillion. U.S. debt interest alone in 2012 is $3.9 trillion. U.S. debt held by foreign countries is approximately $5.4 trillion.

Total national assets, including small businesses, corporations and households are $91.3 trillion. If we sold them at some unprecedented national auction, that would not be enough to cover the total U.S. unfunded liabilities (Social Security, prescription drugs, Medicare) which are fast approaching $120 trillion.  

Maybe we have enough cash to pay off our national debt? The Federal Reserve (Fed) monetary base is $2.7 trillion, M2 money supply is $9.9 trillion, and Treasury securities $1.2 trillion, for a total currency and credit derivatives (created and bogus money) of $734 trillion.

Maybe we produce enough goods and services in a year (GDP) to cover our national debt and insane spending? U.S. gross domestic product is $15.3 trillion, a drop in the bucket when compared to the federal, state, and local government spending of nearly $7 trillion.

The following ratios paint a very ugly picture of our economy as well.

The ratio of spending to GDP is 44.2 percent.

The ratio of gross debt to GDP is 104.19 percent.
The ratio of revenue to GDP is 32.32 percent.

The largest budget items of the federal spending are listed below. The sad part is that, if I log onto the debt clock.org later today, the numbers would have changed very rapidly up or down, generally up.

-          Medicare/Medicaid ($798 billion)

-          Social Security ($740 billion)

-          Defense/Wars ($673 billion)

-          Income Security ($371 billion)

-          Net Interest on Debt ($226 billion)

-          Federal Pensions ($214 billion)

The United States has a constantly changing population of approximately 315 million, give or take a few 10-20 million illegal aliens who are either in the process of being amnestied by the Obama administration because they were brought here by “no fault of their own” and thus deserve U.S. citizenship ahead of overseas legally petitioning immigrants who have done everything according to the law but are hindered by vast oceans, and more illegal aliens who have already completed the arduous process of having jumped or crossed the southern border “undocumented” and are now benefitting from our generous welfare (income security) system, compliments of politicians who always need grateful legal or illegal voters.

The labor force is listed at 144 million although not long ago it was 156 million. These are the discouraged workers who are no longer counted and have fallen off the face of the earth.  Thirteen million Americans are officially unemployed but the actual unemployment number listed is 23 million. Where did the other 10 million unemployed workers go? They must have disappeared to the same place where President Obama’s shovel ready jobs went.

Not to worry, there are 67.5 million retirees and SSI recipients and almost 46 million food stamp recipients to draw from the overabundance of the combined U.S. evil capitalist wealth which was not created by hard-working Americans but by a benevolent federal government who taxed the heck out of working Americans and then built roads and bridges to the front door of all U.S. small businesses and corporations.

Welfare spending, cash, food, housing, medical care, social services for the poor has increased seventeen times since Lyndon Johnson’s War on Poverty in 1964. We obviously lost this war on poverty since the Obama administration plans to increase welfare spending rather than reduce it. He will need $46 trillion today and $1-2 trillion a year in the future to meet all the welfare promises made. (Heritage Foundation, Issues 2012)

TANF (Temporary Assistance for Needy Families) was a Clinton era 1996 welfare reform success story which prepared welfare recipients for work through on-the-job training, unsubsidized employment, attending high school or a GED program, vocational education, community service work, job search, and job readiness training.  Recipients with children had to perform 20-30 hours a week of work in exchange for cash benefits. Welfare cases dropped by 50 percent, employment earnings increased, and child poverty rates decreased. (Amy Payne, Heritage Insider)

Unfortunately, the Obama administration circumvented Congress and announced a directive through the HHS that welfare recipients no longer have to work to fulfill the TANF requirements. “Vocational training or job search/readiness programs would count, even personal care activities, massage, motivational reading, and journaling.”  “President Obama made no secret about his plans to expand the welfare state permanently,” forcing recipients into a permanent cycle of dependence on government. (Amy Payne, The End of Welfare Reform As We Know It, July 18, 2012)

Since the 1960s, the U.S. has spent $16 trillion on welfare and is projected to spend almost $11 trillion over the next ten years. About 70 welfare programs are spread over 13 federal agencies and account for $900 billion a year in expenditures. (Heritage Foundation, March 17, 2011)

We are fast becoming a nation of lazy and entitled, government dependent citizens, approaching a high percentage of our population, legal and illegal. All entitlements, food stamps, unemployment, housing assistance, Medicare, Medicaid, and Social Security represent more than half of total spending. At this rate of welfare extension (Obama added millions more to the welfare rolls), Social Security will be exhausted before the projected 2036 because, “in net-present-value terms, Social Security owes $9.1 trillion more in benefits than it will receive in taxes.” Spending on all entitlements “will consume all revenues within less than two generations. No revenue will be left to pay for other government spending, including constitutional functions such as defense.” Who needs national defense when Iran, North Korea, Russia, and China are flexing their military muscles all around the world? (Issues 2012 - The Candidate’s Briefing Book, p. 46, The Heritage Foundation, 2011)

As I watch again the fast changing numbers of the national debt clock.org, I am reminded that we are dismally broke and we cannot afford more welfare. Our number one threat to national security is not just the out-of-control spending that our President, with the blessing of Congress, is engaging in, but the entitlement mentality of able-bodied and healthy Americans on permanent welfare who produce more welfare dependent children at the expense of those who work, gleefully voting for corrupt politicians who promise them more welfare, locking them into perennial poverty and enslavement to a benevolent government that produces nothing.