About This Blog

Ludwig von Mises (1881-1973) was the greatest economist of my time. His greatest works can be accessed here at no charge.

Mises believed that property, freedom and peace are and should be the hallmarks of a satisfying and prosperous society. I agree. Mises proved beyond a shadow of a doubt that the prospect for general and individual prosperity is maximized, indeed, is only possible, if the principle of private property reigns supreme. What's yours is yours. What's mine is mine. When the line between yours and mine is smudged, the door to conflict opens. Without freedom (individual liberty of action) the principle of private property is neutered and the free market, which is the child of property and freedom and the mother of prosperity and satisfaction, cannot exist. Peace is the goal of a prosperous and satisfying society of free individuals, not peace which is purchased by submission to the enemies of property and freedom, but peace which results from the unyielding defense of these principles against all who challenge them.

In this blog I measure American society against the metrics of property, freedom and peace.

Sunday, July 31, 2011

Why I Am Hoping For A Government Shutdown

I have been listening to talk radio for 45 years. I listen because I get to hear what ordinary Americans like me are thinking and what never gets reported in the mainstream media.

About 20 years ago I was listening to a liberal talk show host interview the Director of the Social Security Administration. This stereotypical bureaucrat fielded question after question about the Social Security program. I called the show and asked this man about the Social Security Trust Fund. He told me the bonds held in the Trust Fund were assets, Federal Treasury Bills, the equivalent of the Treasury Bills sold to the public. Knowing better, I told this bureaucrat that the bills held by the Trust Funds were the equivalent of IOU's issued by the federal government. That the notes held by the Trust Fund were not traded on any market, that the hard cash the notes represent was spent by the federal government to pay for current operating expenses and that when these notes mature the federal government will have to raise the money to reimburse the Trust Fund by either raising taxes, borrowing on the open market or by cutting other programs.

This sorry bureaucrat disagreed and would not change his story, insisting that the Trust Fund notes were as good as gold. Of course, it is all but common knowledge now that I was correct and that this bureaucrat was lying through his teeth.

The point is that the federal government has been deceiving citizens for decades when it comes to budget matters. We all know a politician would never say "tax" even if he had a mouthful of it. In Washington taxes are "revenue enhancements" or just plain revenue. Moreover, "tax expenditures" is political doublespeak for money Washington lets us keep and thus foregoes for itself. Politicians look at the Bush Tax Cuts, for instance, as tax expenditures. Eliminating the Bush Tax Cuts thus becomes "cutting spending" in Washington double-speak.

In the 1970's Congress enshrined its most grievous budget deception into law when it invented a system of budgeting known as "baseline budgeting." Bill  Wavering, writing in the Intellectual Conservative blog concisely explains this nefarious practice. In a word, baseline budgeting automatically increases the budgets of government departments and programs from one year to the next. This new, higher budget amount becomes the baseline over which politicians argue. In short, if a program's baseline is 10% higher next year over this year and one party insists on "cutting" that program's budget by 3%, in reality the program not only suffers no "cut," but has its budget increased by 7%. Baseline budgeting is simply a way for politicians to lie to us without us catching on to the lie.

This morning on talk radio Paul Ryan, R-Wisconsin, explained to Sean Hannity how Democrats are able to claim budget cuts in their various debt-ceiling plans by merely skimming a per cent or two off a program that was slated for an automatic increase of 7%! Only in Washington could a 5-6% budget increase become a 1-2% budget cut. Multiply that "cut" by 10 years and you have serious "savings."

At least the lying is creative. However, the arrogance is astounding.

This all begs the question: Why should we believe anything a politician tells us when history is replete with their clever, bald-faced lies.

President Obama, Harry Reid, Nancy Pelosi and various Democrat stooges have painted this debt ceiling sham as a "crisis" or a "catastrophe." Obama has speculated that seniors Social Security checks may not be written if the debt ceiling is not raised. In fact, Obama can pick and choose which programs to write checks for and which programs to suspend in the even the debt ceiling is not raised. Why? Because tax money continues to flow into the Treasury regardless.

Another caller I heard this morning on talk radio told the radio host that he was distraught with worry that if a debt ceiling deal was not reached Washington would cease writing checks for a program he deeply cared about. It seems the man is part of a federal government program that feeds, clothes and shelters illegal aliens sneaking across the border from Mexico. Money is also provided to these aliens because "you need money to live in the US."

I ask you, why would President Obama choose to stop writing Social Security checks to seniors instead of stopping checks that go to illegal aliens? The answer pure politics.

The bottom line is that there are millions such ridiculous and stupid programs that stand to lose their funding if the government is shut down. I say, let them lose the funding. No crisis will develop. No catastrophe will be experienced.

Lastly, I heard this morning a repeat of the Rush Limbaugh Show. A 24-year-old caller was defending government spending. He said, in essence, that when individuals spend their own money the benefits of the spending only accrue to that individual. However, when the government spends an individual's money the benefits accrue to everyone, i.e., the benefits accrue to the common good!

Good God! No wonder Washington lies are so easy to tell and so easily swallowed by this nation of economic morons! 

1 comment:

John Galt said...

There are other advantages if the debt ceiling is not raised.

We published a short list of some of these from the blogger "Iowahawk". I would subscribe to all of them.