Category: Uncategorized

by Smitty

There is something special about nihilistic joy. You spot doom on the horizon. You track it. Doom comes in, at constant bearing and decreasing range, despite every possible maneuver to avoid it. And the doom is so huge as to cause the people in charge to loop in stage one of the Kübler-Ross Model, not merely denying the problem, but actively repeating behaviors that worsen it.

In the month of March, the U.S. government spent more than eight times its monthly tax receipts, when you include the money spent for maturing U.S. treasuries. The U.S. treasury netted $128.18 billion in tax receipts during the month of March, but paid out a total of $1.05 trillion, which included $49.8 billion in Social Security benefits, $47.4 billion in Medicare benefits, $22.58 billion in Medicaid benefits, and $37.9 billion in defense spending. However, by far, the U.S. paid out the most for maturing U.S. treasuries, which equaled $705.3 billion.

In order for the U.S. government to stay afloat with only $128.18 billion in tax receipts, it had to spend $72.5 billion from its balance of cash, which ended the month at $118.1 billion, and sell $18 billion worth of TARP assets. But most importantly, the U.S. treasury had to sell $786.5 billion in new treasury bonds.

The U.S. government is the largest ponzi scheme in world history. We can only fund our government expenditures and pay off maturing debt plus interest, by issuing larger amounts of new debt. Americans are lucky that we have been blessed with record low interest rates for an unprecedented amount of time, but NIA believes that as we roll over U.S. treasuries in the future, we will have to refinance them at much higher interest rates. Our national debt is now so large that interest payments on our debt will become the government’s largest monthly expenditure.

If the Federal Reserve doesn’t implement QE3, NIA believes it will just about guarantee a bursting of the U.S. bond bubble in the second half of 2011. If the Fed stops buying U.S. treasuries, there is a chance that we won’t find foreign buyers for our bonds no matter how high interest rates rise. The world is waking up to the fact that the U.S. government is insolvent, and the benefits of propping up the U.S. dollar are no longer worth the expense to our foreign creditors. The U.S. government ponzi scheme will soon be exposed for the world to see.

Oh, it’s the elephant in the room. The question will be whether the plutocrats will step up to the plate and buy some debt to keep the entire system from blowing up in their faces. It could happen. Or not. As with a punishment from dad whenever I broke something as a child, I just want to get it over with.

by Smitty

Icelandic banks like Icesave were wrecked in the 2008 economic fracas. The Dutch and the Brits had dropped $5 billion into Icesave, which also died. So the British and Dutch governments bailed out their citizens, and then tried to get the government of Iceland to cut a deal with the governments to repay them.
And now, for a stunning second time:

Voters in Iceland have rejected a government-approved deal to repay Britain and the Netherlands $5 billion for their citizens’ deposits in the failed online bank Icesave, referendum results showed Sunday.

The result complicates Iceland’s recovery from its 2008 economic collapse.

With about 90 percent of the votes counted, the “no” side had 59.1 percent of the votes and the “yes” side 40.9 percent.

It’s as if people somehow resent having their ruling class overlords tell them to accept a haircut. Bankers have run amok, hurting individual citizens, and now we have governments playing musical chairs as they try to find a group of slow-moving citizens to target with the pain.
One thing the British could do is use the HMS Ark Royal, which has been decommissioned but apparently not yet sold, to put pressure on Iceland. Just give it enough maintenance and fuel to be seaworthy, and start having it buzz Icelandic fishing fleets at speed, until the Icelanders relent and pay up the money. Make it the most polite form of extortion ever. “Sorry, but we fear we must pester you until you pony up.”
Seriously, I would like to know why countries can’t support more and smaller banks and spread risk across more institutions. In the US case, across the other 49 states beside North Dakota that lack a state bank. Then, when the fertilizer hits the air circulator, which it will, the state can manage the problem at a lower level. A bad bank can be let die. Sell the thing off. Purge the banker pool of fools. Don’t just let everything fail upward, or internationally. Make the bankers take the haircut, and quit throwing innocent taxpayers under the bus.
The game of musical risk chairs will be helped by stopping the music sooner, rather than later.

by Smitty

Judicial Watch notes that the Chicago based corporation called ACORN is on the carpet again:

Facing more than a dozen felony charges in Nevada, ACORN pleaded guilty to one count this week for illegally paying canvassers to register voters during the 2008 presidential campaign. The deal means that ACORN will avoid going to trial, which was scheduled for later this month in Las Vegas. A judge will determine the sentence on August 10, according to a spokeswoman for the Nevada Attorney General’s office, the prosecuting agency.

Since ACORN is a corporation, it will only be fined and there will be no prison term, the Attorney General’s spokeswoman told Judicial Watch. The fine is expected to be a maximum of $5,000. In November the ACORN supervisor overseeing the illicit Nevada voter registration scheme pleaded no contest to two counts of conspiracy.

ACORN has a long, sordid history of election fraud and questionable hiring and training practices. The group has been busted for forging voter registration applications in key battleground states and submitting falsified forms in more than half a dozen others. In 2007 ACORN settled the largest case of voter fraud in the history of Washington State after seven workers were caught submitting about 2,000 fake registration forms.

Reached for comment, the carpet in Eric Holder’s office said “Yeah, I heard he’s in Wisconsin looking for evidence of GOP fraud in the Prosser election.”

by Smitty (via Insty)

The talk of a Convention is tempting. We had 126 years prior to Woodrow Wilson, who set us on course to become the Progressive State of America in 1913. Completely unfair to credit him with so many of the misdeeds, foreign and domestic, that occurred in the last century, and culminated in the current crisis administration, but there it is.
Where we’re at is that power is over-centralized. Local and state governments have been failing upward for decades. And, if Wisconsin teaches us anything, it is the the Iron Law is real, and the protectors of the Iron Law prefer it above life itself. The Irony Corollary.
What isn’t clear is that the American People have made it past the primal scream stage, and are serious about improvement. As a military member, I adhere to the Code of Conduct, which is intended to offer guidance in the event of enemy capture. Note Article I:

I am an American fighting in the forces which guard my country and our way of life. I am prepared to give my life in their defense. 

Now, it’s interesting, as you read the various Medal of Honor write-ups, the general lack of time available to decide to do the honorable thing under fire.

1. Deadly situation.
2. Do I have almost 0 time to think about it?
3. Do something immortal.

The bulk of the people involved are self-effacing, and claim they didn’t do anything more that the obvious. Those that survive, that is. I will now do something unfair and map the concept of the Code of Conduct to non-military members of society. Now, let there be an entitlement involved. “I am prepared to give my life in their defense” becomes untenable. Again, Wisconsin.
I submit that there really isn’t a need to talk about a Constitutional Convention until we’re all ready to take a major haircut. It won’t be the last, permanent haircut of the Code of Conduct variety, but We, as The People, need to bring that level of seriousness to the discussion, or it will just be “relief in the round”. If anything is off the table, then everything is off the table.
The bulk of what needs to occur, really, is reducing the federal scope to the enumerated powers of the Constitution, de-centralizing the federal government, and re-invigorating the states. We do not require the kind of centralization currently seen in an Information Age.
Not everyone is likely to agree with me here, but that Information Age flattens the hierarchy and renders moot the economies of scale which used to make failing upward attractive. The vast hordes of Iron Law bureaucrats dragging their knuckles from meeting to meeting in a PowerPoint stupor Are Not Helping You.
As a blogger, my mission is to repeat this theme with enough variations to keep it interesting until the political will to Fix This Noise has been attained. Then we can have a Constitutional Convention with some likelihood of success.

by Smitty

The Blaze quotes Andy Stern as saying, in the context of the Constitutional layers of power, where authority is delegated to the federal government:

Now, however, in the midst of the transformative change of globalization and this third economic revolution, those layers have become an impediment to making the changes necessary to keep America competitive in the world economy. Today, America crawls along at a snail’s pace.

I got several thousand people scattered around the world who’ve sworn to support and defend those very ideas you besmirch, Mr. Stern. Your complaints are best phrased as a Constitutional Amendment. While not likely, it’s possible you’ve got a rounder wheel in mind. Step up to the plate and let your ideas be in PLAIN VIEW OF YOUR EQUALS, or you’re likely to encounter some tough sledding, sir.
A suspicious man might think you and cronies are planning some stealth overthrow of that Constitution, through, say, economic means. It behooves you to quell those suspicions stat, Mr. Stern.