Welfare-Warfare State

Social Security: Muffling the Warning Bells

"It had to 'cover benefit payments, forcing the agency to tap its $2.7 trillion trust fund sooner than some had expected.' But how did it tap this Trust Fund? By selling assets. What assets? IOUs from the Treasury. Where did the Treasury get the money to pay the S.S.A.? From the general fund. Where did the general fund get this money? By borrowing it. Where will the Treasury get the money to pay this interest? From the general fund. Where will the general fund get it? Borrowing. When the agency says 'shortages of tax revenue,' it refers to FICA tax revenue. But there is also a shortage of tax revenues in the general fund. That is why there is an annual deficit." Continue reading →

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$80 Billion Bond Funds Sell-Off in June

"Mortgage rates have soared. The days of the 3.5% 30-year mortgage are over. The bond market has been rigged by the FED. Everyone knows this. A handful of economists decide what rates should be. Investors went along with this. But Bernanke’s remarks persuaded them that the rigging will be reduced. So, they started selling their fixed-rate securities. This is what happens when the decisions of a handful of salaried economists to inflate the currency are substituted for the decisions of investors. The economists giveth, and then their #1 spokesman threatens to taketh away. Investors then scramble for the exits." Continue reading →

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Ron Paul: The Death of Daniel Somers

"The numbers sadly tell the story: more military suicides than combat deaths in 2012, some 22 military veterans take their lives every day, nearly 30 percent of veterans treated by the VA have PTSD. We should be saddened but not shocked when we see the broken men and women return from battles overseas. We should be angry with those who send them to suffer and die in unnecessary wars. We should be angry with those who send them to kill so many people overseas for no purpose whatsoever. We should be afraid of the consequences of such a foolish and dangerous foreign policy." Continue reading →

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David Galland: What the Hell Is Wrong with Obama?

"It sure seems like we are following the script set down by the neocons (Kristol, Wolfowitz, Cheney, Rumsfeld, Abrams, et al.) that years ago infiltrated the US military-political complex. This is the 'Might is right' crowd who believe in exercising US power proactively to knock down the dominos of all Middle Eastern countries Israel feels threatened by, with the end goal of remaking the Middle East as a region dominated by friendly democracies (or, in the case of Saudi Arabia, friendly dictatorships). Failing functioning democracies, turning the outcast countries into failed states that pose no real threat to US or Israeli interests." Continue reading →

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The Bush-Obama Great Stagnation

"Robert Higgs has another must read in his 'Etceteras … Real Gross Domestic Private Product, 2000-2012' in the most recent Independent Review. He provides good arguments on why government product should be (and perhaps almost was) excluded from income and product accounts. He then builds a measure of Real Gross Domestic Private Product for the Bush-Obama years. Based on his calculations, he states, 'Perhaps the most positive statement we can make about the private economy’s performance during this thirteen-year period is that it has been somewhat better than complete stagnation.'" Continue reading →

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Central banks sell record sums of US debt

"Central banks sold a record amount of US Treasury debt last week while bond funds suffered the biggest-ever investor withdrawals as markets shuddered at the prospect of the US Federal Reserve ending its quantitative easing programme. Holdings of US Treasuries held at the Fed on behalf of official foreign institutions dropped a record $32.4 billion to $2.93 trillion, eclipsing the prior mark of $24 billion in August 2007. It was the third week of outflows in the past four. Private investors are also dumping fixed income. US funds were the worst hit, with withdrawals totalling $10.6 billion, but emerging market debt funds also saw record redemptions of $5.6 billion." Continue reading →

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Why the Status Quo Is Doomed

"Every one of these implicit assumptions has been turned on its head: growth is barely above the rate of inflation; by some measures, it has already fallen below the real rate of inflation. Debt is increasing much faster than income or wealth. Virtually all of the recent expansion of wealth/income is flowing to the top 10%. This is why the status quo is doomed: there is no Plan B or even conceptual alternative to the 'more growth forever' agenda. The oft-touted fantasy is that 'we're going to grow our way out of this,' but it is abundantly clear that debt is rising far faster than growth or incomes." Continue reading →

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By Global Standards, The US Education Bureaucracy Gets the Most Money With Mediocre Results

"America has a very costly and inefficient government school monopoly. The strongest piece of evidence is an amazing chart put together by a Cato colleague. It shows that education spending has skyrocketed while educational performance has stagnated. We’ve now surpassed Switzerland to become the biggest spenders on education. But we still get a crummy return on all that money that is spent. One reason the system is so expensive is that we squander so much money on bureaucratic overhead. But I guess we need all those paper pushers so we can stop little kids from engaging in terrorist behavior." Continue reading →

Continue ReadingBy Global Standards, The US Education Bureaucracy Gets the Most Money With Mediocre Results

Bill Bonner: No Real Recovery Without “Hitting Bottom” First…

"The fireworks in the gold market are still, probably, far ahead. You'll hear the explosions when consumer prices begin to rise. And that won't happen for a while. And here is where the story gets interesting... and hard to follow. The bond market has turned. This could push the economy into a deeper funk unless growth starts to pick up. But it could be years before the new trend is firmly established. We remember the last turn... in the early 1980s. Paul Volcker announced it in 1979. But it was almost four years before investors fully absorbed the news." Continue reading →

Continue ReadingBill Bonner: No Real Recovery Without “Hitting Bottom” First…