Means Testing Your Social Security Payments

The welfare state's Ponzi scheme economics will catch up with the politicians

by Gary North

I posted an article on my Tea Party Economist site on the increase in the real debt of the US government over the last year. The increase was $11 trillion.

Impossible? Not at all. The annual increase — the deficit — will be even larger next year, and larger still the year after.

This refers to the unfunded liabilities of the government. These are the price tags of political promises that politicians have made over the years for which there is no money available to fulfill. The expert here is Professor Lawrence Kotlikoff of Boston University. His most recent report says that total unfunded liabilities went from $211 trillion a year ago to $222 trillion this year.

The biggest source of future red ink will be Medicare. In second place is Social Security.

Taliban outflanks US war strategy

Time to go home

By Gareth Porter and Shah Noori

Sharply increased attacks on US and other international forces personnel by Afghan security forces, reflecting both infiltration of and Taliban influence on those forces, appear to have outflanked the US-North Atlantic Treaty Organization (NATO) command's strategy for maintaining control of the insurgency. 

The Taliban-instigated "insider attacks", which have already killed 51 NATO troops in 2012 - already 45% more than in all of 2011 - have created such distrust of the Afghan National Army (ANA) and national police that the International Security Assistance Force (ISAF) command has suspended joint operations by NATO forces with Afghan security units smaller than the 800-strong battalion of Kandak and vowed to limit them in the future. 

How High Oil Prices Will Permanently Cap Economic Growth

Each new barrel we pull out of the ground is costing us more than the last

By Jeff Rubin

For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies.

The countries guzzling the most oil are taking the biggest hits to potential economic growth. That’s sobering news for the U.S., which consumes almost a fifth of the oil used in the world every day. Not long ago, when oil was $20 a barrel, the U.S. was the locomotive of global economic growth; the federal government was running budget surpluses; the jobless rate at the beginning of the last decade was at a 40-year low. Now, growth is stalled, the deficit is more than $1 trillion and almost 13 million Americans are unemployed.

The Greatest Trick The Devil Ever Pulled

The problem lies in the "Solution"

by Tim Price

Never try to teach a pig to sing, advised Robert Heinlein. It wastes your time and it annoys the pig. Similarly, never try to convince a central banker that his policies are destructive.

After five years of enduring crisis, market prices are no longer determined by the considered assessment of independent investors acting rationally (if indeed they ever were), but simply by expectations of further monetary stimulus. So far, those expectations have not been disappointed.

The Fed, the ECB and lately even the BoJ have gone “all- in” in their fight to ensure that after a grotesque explosion in credit, insolvent governments  and private sector banks will be defended to the very last taxpayer.

Cuba's wound won't heal

President Mujica, the Cut on His Nose and the Potholes of Havana

By Yoani Sánchez

It was a flying sheet of roofing that cut the nose of the Uruguayan president José Mujica. A piece of metal that fell off just as he was helping a neighbor reinforce the roof of his house. The anecdote traveled through the media and the social networks as an example of the simplicity of a leader known for his austere lifestyle. There he was, like one more farmer, trying to make sure the storm didn’t carry off the roof tiles of a house near the farm where he lived in Montevideo. Undoubtedly, an anecdote full of lessons that should be imitated by many other world leaders.

Down With the American Dream

Some conflicts cannot be wished away

By Robert Samuelson

It's time to retire the American Dream -- or at least give it a long vacation. We ought to drop it from our national conversation. This would be a hardship for politicians and pundits, who use "the American Dream" as a rhetorical workhorse embodying goals embraced by almost all Americans. That's the problem. The American Dream has become so expansive in its meaning that it stifles honest debate and harms some of the very people it is intended to help.

Who can oppose the American Dream? No one. It captures our faith in progress, opportunity and striving. It reflects hopes for a large and stable middle class. Everyone would go to college, become a homeowner. Children would always live better than their parents.

This election often seems a contest over whether President Obama or Mitt Romney can best restore the Dream. To the extent people believe this, one outcome is certain: disappointment. The Dream's ultimate appeal lies in its promise of personal fulfillment, which can't be assured.

The fabric of trust

Libertarians and Group Norms

By Arnold Kling

When politicians and commentators appeal to group identity in order to support government action, those of us with a libertarian bent tend to resist. Our instinct is to scorn such appeals. When someone says that "government is the name we give to what we do together," I want to shout "Lose the 'we'!"

Still, I think it is unwise to dismiss altogether the case for group loyalty and adherence to group norms. My inclination is to approve of organizations that promote group objectives and attempt to limit individual choices, as long as participation in these organizations is voluntary. However, within libertarian thought, there are very different points of view as to whether or not the pressure to conform to group norms is morally justified.

Two Cheers for Heresy on Global Warming

Climate change is a cycle—of faddish opinions

By RON UNZ

I first encountered the strong case for global warming in the early 1970s in an Isaac Asimov science column. As an elementary school student, I merely nodded my head, assumed that America’s political leadership would address the danger, and moved on to an explanation of quarks.

Even in those days, the subject was hardly new. The Asimov column had originally run in the late 1950s, before I was even born, and the possibility that burning fossil fuels might raise the Earth’s temperature via the “Greenhouse Effect” had already been around for many decades, going back to the late 19th century. Whether it occurred in the real world was a different matter.

Germany Losing Patience With Spain as EU Warns on Crisis

Another Dead Man Walking Backwards

By Tony Czuczka and Brian Parkin

Germany’s governing coalition showed growing exasperation with Spain, as a senior ally of Chancellor Angela Merkel said Prime Minister Mariano Rajoy must stop prevaricating and decide whether Spain needs a full rescue.

“He must spell out what the situation is,” Michael Meister, finance spokesman for Merkel’s Christian Democratic Union, said in an interview in Berlin today. The fact he’s not doing so shows “Rajoy evidently has a communications problem. If he needs help he must say so.”

Meister’s comments underscore Europe’s crisis-fighting stalemate amid discord over a banking union, Greece’s ongoing debate on how to meet bailout commitments and foot-dragging by Spain on a possible aid bid. European Union President Herman Van Rompuy warned today against “a tendency of losing the sense of urgency” in fighting the debt crisis three years after it erupted in Greece.

German patience is running out with Spain as it plays for time after European Central Bank President Mario Draghi offered help to lower borrowing costs in return for strict conditions.

Dead Country Keeps Walking - Backwards

Greece Caught Under-reporting Its Budget Deficit By Nearly 50%

by Tyler Durden

There was a time about a year ago, before the second Greek bailout was formalized and the haircut on its domestic-law private sector bonds (first 50%, ultimately 80%, soon to be 100%) was yet to be documented, when it was in Greece's interest to misrepresent its economy as being worse than it was in reality. Things got so bad that the former head of the Greek Statistics Bureau Elstat, also a former IMF employee, faced life in prison if convicted of doing precisely this.

A year later, the tables have turned, now that Germany is virtually convinced that Europe can pull a Lehman and let Greece leave the Eurozone, and is merely looking for a pretext to sever all ties with the country, whose only benefit for Europe is to be a seller of islands at Blue Aegean water Special prices to assorted Goldman bankers (at least until it renationalizes them back in a few short years). So a year later we are back to a more normal data fudging dynamic, one in which Greece, whose July unemployment soared by one whole percentage point, will do everything in its power to underrepresent its soaring budget deficit.

The Next Industrial Revolution

Large, centrally-directed systems are inherently fragile

by John Aziz

Think of the human body; a spontaneous, unexpected blow to the head can kill an otherwise healthy creature; all the healthy cells and tissue in the legs, arms, torso and so forth killed through dependency on the brain’s functionality. Interdependent systems are only ever as strong as their weakest critical link, and very often a critical link can fail through nothing more than bad luck.

Yet the human body does not exist in isolation. Humans as a species are a decentralised network. Each individual may be in himself or herself a fragile, interdependent system, but the wider network of humanity is a robust independent system. One group of humans may die in an avalanche or drown at sea, but their death does not affect the survival of the wider population. The human genome has survived plagues, volcanoes, hurricanes, asteroid impacts and so on through its decentralisation.

When Politicians Feel Voters' Infantilism

Someday, someone is going to seek the presidency by demystifying it

By GEORGE F. WILL

In every year divisible by four, the dominant superstition of American politics — faith in the magic of presidential words and deeds — reaches an apogee that feeds national narcissism: Everything that happens anywhere is about us, is a response to something America did or did not do, and can be controlled by a president doing — even just saying — something.

This self-absorption was evident as Mitt Romney and the Obama administration sparred about violence directed at U.S. facilities in the Middle East and elsewhere.

Romney called this the fruit of administration weakness; the administration blamed it on a video. It would require exquisitely precise intellectual calipers to gauge which idea is silliest.

In Egypt, Libya and elsewhere, the crumbling of old regimes and hierarchies has ignited complex sectarian and tribal power struggles, in which some participants find anti-Americanism useful.

Germany's Wind Power Chaos Should Be A Warning To Everyone

Germany’s renewables drive is turning out to be a disaster

By Christopher Booker

On Friday, September 14, just before 10am, Britain’s 3,500 wind turbines broke all records by briefly supplying just over four gigawatts (GW) of electricity to the national grid. Three hours later, in Germany, that country’s 23,000 wind turbines and millions of solar panels similarly achieved an unprecedented output of 31GW. But the responses to these events in the two countries could not have been in starker contrast.

In Britain, the wind industry proclaimed a triumph. Maria McCaffery, the CEO of RenewableUK, crowed that “this record high shows that wind energy is providing a reliable, secure supply of electricity to an ever-growing number of British homes and businesses” and that “this bountiful free resource will help drive down energy bills”. But in Germany, the news was greeted with dismay, for reasons which merit serious attention here in Britain.

The Republic has no need of geniuses

Trivia: Father of Modern Chemistry Beheaded in French Revolution

By Alex

Antoine Lavoisier, the Father of Modern Chemistry, was beheaded during the French Revolution.

An appeal to spare his life was cut short by the judge, who said: "The Republic has no need of geniuses."

Václav Klaus warns that the destruction of Europe's democracy may be in its final phase

'Two-faced' politicians have opened the door to an EU superstate by giving up on democracy

By Bruno Waterfield

The new push for a European Union federation, complete with its own head of state and army, is the "final phase" of the destruction of democracy and the nation state, the president of the Czech Republic has warned.

In an interview with The Sunday Telegraph, Václav Klaus warns that "two-faced" politicians, including the Conservatives, have opened the door to an EU superstate by giving up on democracy, in a flight from accountability and responsibility to their voters.

"We need to think about how to restore our statehood and our sovereignty. That is impossible in a federation. The EU should move in an opposite direction," he said.

“The Economy” and the Taxpayer

A “soft” servitude

by Joseph Sobran
“Would a tax cut be good for the economy?” Economists are having their usual eye-glazing debate over this question, without bothering to define their terms. The Bush administration wants to cut taxes a little tiny bit over the next decade, insisting it will help “the economy”; their opponents say that even a little tiny tax cut could hurt “the economy.”

What do they mean by the economy? Is it a single thing, or a whole lot of disparate things lumped together into a misleading abstraction?

The first thing to notice is that Americans didn’t use to talk this way. In the first century of the U.S. Government’s existence, when Federal budgets were in the millions, not trillions, taxes were very low, the country prospered as no other country had, individual freedom was unprecedented, and Europeans flocked here. There was no welfare state; the immigrants didn’t come to live off the taxpayer, but to reap rewards for their own efforts in a system of free exchange. Nobody spoke of a monolithic “economy” as the government’s concern.

A totalitarian state in the making

2 U.S. Supreme Court Justices Warn of Dictatorship

by George Washington

Former Supreme Court Justice David Souter told University of New Hampshire School of Law that the “pervasive civic ignorance” in the U.S. could bring dictatorship:

I don’t worry about our losing a republican government in the United States because I’m afraid of a foreign invasion. I don’t worry about it because of a coup by the military, as has happened in some other places. What I worry about is that when problems are not addressed people will not know who is responsible, and when the problems get bad enough — as they might do for example with another serious terrorist attack, as they might do with another financial meltdown — some one person will come forward and say:  ‘Give me total power and I will solve this problem.’

That is how the Roman republic fell.  Augustus became emperor not because he arrested the Roman senate. He became emperor because he promised that he would solve problems that were not being solved.

Former Supreme Court justice Sandra Day O’Connor has also warned of dictatorship.

Myth and Truth About Libertarianism

A plain look at liberty 

by Murray N. Rothbard 

Myths

1.   Libertarians believe that each individual is an isolated, hermetically sealed atom, acting in a vacuum without influencing each other.

2.   Libertarians are libertines: they are hedonists who hanker after "alternative lifestyles."

3.   Libertarians do not believe in moral principles; they limit themselves to cost-benefit analysis on the assumption that man is always rational.

4.   Libertarianism is atheistic and materialist, and neglects the spiritual side of life.

5.   Libertarians are utopians who believe that all people are good, and that therefore state control is not necessary.

6.   Libertarians believe that every person knows his own interests best.

Conclusion

Notes

Libertarianism is the fastest growing political creed in America today. Before judging and evaluating libertarianism, it is vitally important to find out precisely what that doctrine is, and, more particularly, what it is not. It is especially important to clear up a number of misconceptions about libertarianism that are held by most people, and particularly by conservatives. In this essay I shall enumerate and critically analyze the most common myths that are held about libertarianism. When these are cleared away, people will then be able to discuss libertarianism free of egregious myths and misconceptions, and to deal with it as it should be on its very own merits or demerits.

Myth #1: Libertarians believe that each individual is an isolated, hermetically sealed atom, acting in a vacuum without influencing each other.

Pleasing Lucifer

The ‘Faustian pact'

By Jan Skoyles

Faust Part 2 by Goethe includes a cautionary tale on money printing replacing gold with ultimately dire consequences - alluded to recently by Jens Weidmann. Could this be a warning to all Central Bankers?

Bundesbank President and economist, Jens Weidmann, hasn't exactly kept quiet about his lack of support for the ECB bond-buying program. But this week he put it into a context which the public would be able to understand, and ‘shocked' Europeans by relating the program to that of making a deal with the devil.

Weidmann refers, as many have before him, to the ‘Faustian pact', called so thanks to Act I, Part II of Goethe's 1832 play ‘Faust'. In the play the Devil, Mephisto, convinces the Holy Roman Emperor to print large amounts of paper money rather than use gold.  In the short term, the money printing solves the emperor's financial problems, but it soon leads to rampant inflation.

Obama fights for power of indefinite military detention

Obama fights for power of indefinite military detention

Obama lawyers file a breathless, angry appeal against the court ruling that invalidated the NDAA's chilling 2011 detention law

By Glenn Greenwald

In May, something extremely rare happened: a federal court applied the US constitution to impose some limits on the powers of the president. That happened when federal district court judge Katherine Forrest of the southern district of New York, an Obama appointee, preliminarily barred enforcement of the National Defense Authorization Act (NDAA), the statute enacted by Congress in December 2011 with broad bipartisan support and signed into law by President Obama (after he had threatened to veto it).

That 2011 law expressly grants the president the power to indefinitely detain in military custody not only accused terrorists, but also their supporters, all without charges or trial. It does so by empowering the president to indefinitely detain not only al-Qaida members, but also members of so-called "associated forces", as well as anyone found to "substantially support" such forces – whatever those terms might mean. I wrote about that decision and the background to this case when it was issued.