September 16, 2014

Why a Debt Default Would Be Wonderful

While it is likely that the two parties in Congress will reach a deal before the August 2 deadline, I can’t help reflecting on how wonderful it would be if they didn’t. While Congressman Ron Paul has correctly pointed out that the government has already defaulted at least three different times in its history, and continues to default every time it prints new money, it is not quite the same as an “on-the-books” failure to make a timely payment. That is exactly what America needs.

Politicians, mainstream economists, and the media tell us that a U.S. government debt default would be catastrophic. Treasury bonds would be downgraded, interest rates would soar, and the massive government spending that has supposedly fueled the present (jobless) recovery would be severely curtailed, plunging the U.S. and possibly the world back into a deep recession.

Perhaps that is true. However, a debt default by the federal government would still be a blessing to American society for several reasons.

First, one must remember that all government spending represents a redistribution of wealth (what we regular folks call “stealing”). The government forcibly confiscates money from those who have earned it and spends it for the benefit of someone else. The most insidious way that the government does this is by borrowing. When it borrows, it is confiscating money from people in the future – some of whom are not even born yet – to hand out to their special interest supporters today. To the extent that it would prevent or decrease this, a default would result in a more just society.

However, even if one doesn’t care about justice or property rights, a default would help correct the very malinvestment that has caused the crisis in the first place. As I’ve said before, the entire U.S. economy is really one, huge bubble of misallocated resources, caused by at least a century of government intervention. Most people recognize that the government’s backing of mortgages, together with monetary inflation by the Federal Reserve, were the primary causes of the housing bubble. However, most people fail to recognize this same dynamic in almost every sector of the economy.

The government also backs student loans for people to go to college. Just like it did to the housing industry, this has inflated the price of higher education far beyond what could be supported by real demand. That in turn has led to the creation of millions of jobs in the education sector that only exist because the government redistributes wealth to back those loans. When the government funds are no longer there, the price of education will plummet, just as housing prices did. All of those people will be out of work.

Healthcare is another sector with all of the same intervention-related problems. Government subsidy creates artificial demand, inflating the price and driving the misallocation of resources to the healthcare sector. The industry is not forced to innovate in terms of delivering its services in more efficient ways because the customers are forced to buy its products (if you doubt this, just withhold the Medicare portion of your payroll taxes and see what happens). This also directs employees into the healthcare sector that would not be supported by natural market forces. When the government can no longer subsidize it, the bubble will pop, just like housing and education. Again, massive unemployment for misallocated human resources.

Banking, research, agriculture, energy, automobile manufacturing – there is not one sector that anyone can name where government is not overriding the voluntary transactions that market participants would otherwise engage in. Wherever the government is spending taxpayer money, it is overriding the choice that the taxpayer would have made if he had been allowed to keep his money and spend it as he pleased. As F.A. Hayek pointed out in The Road to Serfdom, the government has never and can never make better choices than millions of market participants acting in their own self-interest. They simply lack the information necessary to do so.

So, wherever the government is spending money to try to boost some aggregate statistic, it is making the problem bigger, not smaller. If government spending is creating jobs, they are not real jobs. A real job is a voluntary contract between a buyer of services (an employer) and a seller of services (an employee). If that job is created because of government spending, then a third party is introduced into the transaction who is not acting voluntarily.  Government-created jobs force taxpayers to purchase services from employees because it is not profitable for the employers in that sector to purchase them. Forcing taxpayers to purchase them doesn’t make those jobs any more profitable. It just depletes the capital available to create profitable jobs elsewhere.

The prospect of perhaps tens of millions more people unemployed may seem frightening, but that day is coming regardless of what politicians do in Washington. Economic laws are like the laws of nature. They will assert themselves in the end. Any job that requires the government to borrow more money to subsidize it is also a job that depends upon the lenders continuing to lend. As we have seen in recent Treasury bond auctions, those days are coming to an end. Raising the statutory debt ceiling only allows more phony jobs to be created, setting up more employees for the painful correction.

However, the most important reason that a debt default will be beneficial is a philosophic one. It will force a complete paradigm shift in the way Americans think about the role of government. For at least a century, there has been no area of life that some special interest has not appealed to government to manage or subsidize. From the way we conduct commerce to the way we make personal decisions on food or healthcare to the way we coexist with our neighbors in other countries, nothing has been off limits. Complacency about our liberty has been one reason. The other has been the perception of infinite financial resources. The great wealth that the United States generated in its freest period provided a tax base and borrowing collateral that has always been perceived as unlimited. A debt default would shatter that foolish perception.

The default would be a bucket of cold water in the faces of a drowsy and compliant populace. It would wake people up to the reality that Thomas Paine was aware of over 200 years ago, when he wrote that government “is at best, a necessary evil.” People would realize that the government doesn’t “have our back,” other than to stick a gun in it to loot our liberty and wealth. We would no longer hear that horrid refrain from media pundits after some new government incursion or heist: “Well, the government had to do something.” Instead, we would hear the resigned chorus, “Well, the government couldn’t do anything.” And perhaps, in some glorious, enlightened future, “The government shouldn’t do anything.”

Comments

  1. g kaiser says:

    how nice to see a place where you can just place a comment, without having to register and be censored by a moderator, I hope!.

    That takes guts!

    • Rudy Fritsch says:

      Central planning cannot work, not even in principle, not just because of what Hayek said; ‘central planners can never have the right information’… this assumes that IF they did have the right information, then planning could work -at least in principle-.
      Mises showed that even WITH perfect information, central planning CANNOT work; because no central planner can predict human action… and all economic activity originates in human action, in individual decisions. There is such a thing as free will.
      The invasion of economic privacy by ‘central planners’ is justified by misguided efforts to ‘gather all economic information required for proper planning’…
      Rudy Fritsch
      Editor in Chief
      The Gold Standard Institute

      • jo veno says:

        i don’t know why everyone is so scared about a default and a lowered standard of living. my family came from an asian country with a terrible government, oligarchic families running it, a one time dictatorship, and a dysfunctional economy. the thing is everyone we knew have survived and are doing well now. how? they didn’t bother about the government or the larger economy, they just started their own businesses which grew. and being in a “third world” economy has it’s advantages: mainly the government is so cash strapped it doesn’t have the computers and bureaucrats to track you down. just don’t get too big a fish. and as for getting things done, just pay off the local government bureaucrat who is also struggling to survive. i look forward to the day when the whole federal leviathan collapses of its own weight and we can finally do what we need to do to succeed.

        guess who is richer now: us? or our friends and relatives that we left behind? hint: i’m still waiting to buy my first house 30 years after moving here.

        • DJ says:

          jo veno, if your friends and relatives that you left behind in the asian country with a terrible government, oligarchic families running it, a one time dictatorship, and a dysfunctional economy are doing so much better than you, why haven’t you returned rather than staying here for 30 years?

          Especially since you look forward to the day when the whole federal leviathan collapses of its own weight and you can finally do what you need to do to succeed.

          Just asking…

          • jo veno says:

            it’s good you asked. we’re actually going back in two weeks to inspect a 5 hectare (that’s 11 acres) of farmland full of fruit trees and great views for the princely sum of $150k. i’ve had it up to here living in the states with the constant erosion of basic american values such as hard work, entrepreneurship and individual initiative thanks to big progressive government. mind you i own a biz here, for 23 years now. never missed a payroll and always paid my taxes. just couldn’t grow because of the oppressive growth of government mandates. so yeah, i’m going back along with a whole lot of expatriating americans. last one to leave please turn off the lights.

            btw, the country threw out its dictator but is still run by the same families. except by dint of its location in asia it’s enjoying boom times, balanced budgets and infrastructure development. pure dumb luck. still corrupt as heck but easy to do business under the table.

          • Alex says:

            Jo veno has owned a business here for 23 years and STILL doesn’t have a house?
            Hmmm…

      • orsobubu says:

        @rudy fritsch

        Totally wrong. Mathematically, post-keynesians destroyed all the menger-bohmbawerk-von mises-von hayek crap. Obviously, also post-keynesians couldn’t give an answer. Without taking into account Marx (and factors like surplus value, exploitation, etc) you’ll never be able to understand the capitalistic production system, which is basically a social relationship. It’s really, really fun when you try to demonize central planning in capitalism, when absolutely ALL successfull capitalistic enterprises are nowadays developed and managed with an incredible gigantic amount of central planning. Also military operations, space explorations, urban projects, bank investments, financial operations, biology and medical research and so on are based on scientific principles of planning and development. If we let the market forces make their course, next third world war will be started by conflicting capitalistic imperialst blocks trying to fight off the fall of profit rate, overproduction crisis and protectionist rage, environmental and resource catastrophes. Hopefully, mankind will make in advance the transition (after a social revolution) from capitalism to communism. When market, money, banks and salaries will be a thing of the past, central planning will be possible also inside the political sphere, scientists will substitute corrupted lobbiers and lawyers inside parliaments, and people of the earth will be able to plan the development of the deserts, moon exploitation, cancer cures, etc, without the mess of competition, money, capitals and wars, just extending to the global world production system of associated workers (and their political organizations, the soviets) what is today applied only inside single industries, in a deadly, useless competition among each other.

        • Tom Mullen says:

          Orsobubu – Are you seriously saying that there is any merit to Marxism? Whole populations starving to death in the 20th century wasn’t sufficient proof of its idiotic premises?

          • Jonny H says:

            Tom, this is one I’ve never understood either. My Marx-quoting (American/Canadian) friends who live their comfortable lives made possible almost entirely by the results of capitalism simply baffle me.
            And here in Seoul where I live, there was a Marxism conference last week with international big names speaking to thousands of students and “activists” who attended.
            This is 30 miles from the land that time forgot — North Korea — where Kim Jong Il lives in splendor as million starve in his version of a centrally planned economy.
            Meanwhile, here in the south, though capitalism has been modified by statist directives and subsidies, the country has gone from third world status to being the 11th largest economy in the world in the last 4 decades largely because it has competed successfully on the world market. When are people going to take their blinders off? Why are they so afraid to think for themselves?

        • Ralph Dwyer says:

          fool

        • orsobubu says:

          @Tom, Jonny and Ralph

          I perfectly understand you judge me as “fool”. First time I heard about these arguments, I also reacted this way. I spent three months, back in 1998, studying preliminary introductions to Marx, Engels and Lenin works. At that time, my intellectual frame was the standard bourgeoise political economy teached in universities. I was forced to admit all that theories were contradictorial and fake, starting from Smith to Karl Popper. You really need to study some of the top all-time epistemologist, like Feyerabend and Geymonat, to understand that communism is the only future for mankind (and – in perspective – anarchy).

          About the “marxist idiotic premises” applied in so-called socialist failed states during 20th century, I perfectly know there is absolutely no way I could persuade you to take in consideration a different reading. As result, I usually never try to start discussions on the internet about this, because i know it brings an endless fight without result; so, I carry out my political fight on the road, where a few words have enormous potential to tear down my opponents, conquering them to communist’ cause. Time to time, I try to test on the web if something is going to change, as the economic crisis deepens and times of international war and civil war approach.

          For the most intellectual inquisitive among you, I feel it’s necessary to give some links to start a voyage toward a new knowledge of history and political economy:

          Here’s a profile of the man whose work is the very first to establish that so-called communist last century countries were in reality state-capitalist, the same form which USA is headed to today, after last economic crisis:

          http://en.wikipedia.org/wiki/Amadeo_Bordiga
          http://en.wikipedia.org/wiki/State_capitalism

          here are some introductory works about false socialist planning in russia:

          http://www.sinistra.net/lib/upt/compro/lipo/lipoebubie.html
          http://www.sinistra.net/lib/pro/whyrusnsoc.html

          i know you will get rid of these, but let me tell you’re making the worst mistake of your intellectual life. Take into account that I know really in depth all the economic free-market and liberal theories you refer to. Their application is totally useless, as the only way to manage the crisis induced by their application is not economic but political: capitalists and the capitalist states must make war against workers, usually substituing democracy with some form of fascist state. It’is called counter-revolution, and it is exactly the future of USA and Europe. This is the reason workers have to organize in revolutionary organizations to defend themselves and plan a different world without money, market, banks and wage work.

          • Tom Mullen says:

            I’ve read Das Kapital and the Communist Manifesto – had to read both as part of my education – and found them both to be replete with false premises, non sequiturs, and flawed reasoning throughout. They have been debunked by far abler economists than I, but I will say that they depend upon one assumption: that one person may initiate the use of force against another for some “greater good” that obviously excludes the victim. However, all are victims under this system.

  2. popscro says:

    Default would be fine if done for the right reasons but this one won’t be.

    • Eric Overton says:

      Default is almost irrelevant at this point for the basic reason that the laws of economics are oblivious to the posturing of politicians. To a large degree the markets have *already* priced in the value of government debt, regardless of what anybody does or doesn’t do to raise the ceiling or change the credit rating on paper. If there’s no default and no change to the credit rating, no sane observer is going to say, “Just goes to show there’s no problem… I think I’ll buy more worthless paper now…” Holders of debt are already signalling their lack of appetite to buy more of it. The author makes a valid point that a default does at least have the prospect of waking the populace up to the facts that credit is not infinite, that economic efficiencies cannot be perpetually displaced to some never-never-land where somehow they all get righted, and that yes, we’ve had a big freaking problem from the day we headed down the road marked, “government as economic player instead of government as economic referee.”

      Mind you, you’re right if you see the timing as being politically motivated. But I don’t necessarily think it a bad thing that Obama have to contend with this problem in an election year (which is what he’s going out of his way to avoid). An election year is *precisely* the time to raise this problem again, because it calls the owners of it to some accountability for their actions.

  3. Mark says:

    “Most people recognize that the government’s backing of mortgages, together with monetary inflation by the Federal Reserve, were the primary causes of the housing bubble.”

    Do you just make stuff up or do you repeat what you have been told because you didn’t do any due diligence on this whopper.

  4. G. Hall says:

    Mr. Mullen just might be right. Many years ago when things were not nearly as bad as they are now, and old
    friend of mine said that at some point……….EVERYTHING MUST COME BACK TO PARITY.
    We might just be nearing that point now………………………….

  5. Granny says:

    The Empire has to die, in order for the Republic to live! They have destroyed the currency. They have destroyed representative government. They have destroyed the demographic integrity of our land. Now we must destroy them, or our children will suffer the consequences of living in a violent, socialist, third world cesspool.

    • Hey You says:

      Seems that most large nations must go through fascist and/or other collectivist screw-ups as the collective feeling of entitlements overwhelms common sense. We, in the USA, are probably seeing the tipping point with the present myopic “leaders” continuing selfish policies of previous collectivists. My guess is that the resolution will be a break-up of the USA union. Seems to be a logical end point.

      Also, that will cause a repudiation of the US dollar. Fortunately, there are still stores of wealth available to us “little people”. No guarantee of how long such will be available.

  6. Glenn David says:

    What planet are you from? The US had a 6 trillion dollar surplus when Clinton left office, Bush senior goes into office cuts taxes and spends like a drunken sailor borrowing trillions to pay the bills. In other words corporations and billionaires get tax credits while the middle class pay back the debt…you are full of crap my friend. Its the gullible American public that you play with..the same losers that watch Fox news and believe what they see!

    WAKE UP AMERICA!!!!!!

    • Hey You says:

      The Clinton administration had a big surplus because the USA had “won” the cold war. No longer was the USA government involved in “minor” shooting wars, nor in supporting tin-horn dictators around the world, nor in letting “defense” contractors syphon money from the US treasury, etc.

      The Clinton administration basked in the post cold war happiness. Clinton wasn’t the cause of this fortunate atmosphere. Gorbachev of the USSR deserves credit for almost all that surplus.

      Figure out how the cold war was won before giving a follow-on dupe credit for much of anything. Also, be aware that this is not a democrat-repubilican thing. It’s just a case of so called leaders trying to fool all of the people all of the time. They are only successful in fooling the more impressional lemmings all of the time.

      • Hey You says:

        And yes, Clinton was president at the time, but the spending was controlled by a Republican congress. Let’s try to put pertinent facts into misdirected sound bites.

    • Demoblicans and Repubicrats are both guilty. Suggesting that replacing one w the other will solve problems, is part of how we’ve gotten to this point. Each side has been fiscally irresponsible, and borrowed against the future, bribing one constituent or another. Defending either side is also a waste of time. That’s the point of this article, that we need a new paradigm.

  7. Glenn David says:

    If medi-care and government intervention are so bad..why are Canadian banks all in such good shape? They are in good shape because they are GOVERNMENT REGULATED…Why are Canada, Norway and Sweden considered to have a better quality of life than the US? You my friend are obviously a well to do right wing republican that loves conning the average gullible middle class American…..CRIMINAL!

    • Vae Victus says:

      Canadian banks aren’t in as good shape as you may think….if you wish to continue to evaluate macroeconomic situations by the standards of pre-2007, using the false paradigms of Keynesianism then you may see matters that way.

      Remember, that when bubbles and statistics are fixed in the “right” manner, we have the illusion of prosperity only. Think Ireland.

      Ireland was touted as being the strongest economy in Europe, and was placed within the list of Top Ten Best Nations to Live in prior to the 2008 depression. Now what are they saying about Ireland? Or Iceland, or Greece, or Italy, or Portugal, etc. all nations that were held up as examplars of “mixed economy” or socialism in glorious action. It doesn’t work in the long run.

      The nations you mention in your post are no different. There are many articles and books out there about the economic woes of Sweden and Norway, especially over the last 25 years.

      Your use of the term “right wing republican” simply does not apply to most of us. The Two-Party Paradigm is just as false and anathema to reason as the Keynesian paradigms. It is hard to actually rationalize and form meaningful conclusions about reality when you are trapped within a world of partisan, dogmatic rhetoric.

  8. Bryant Hamstra says:

    Nice article Tom…. I just sent nearly this same email to several friends a week ago…..

    @ Glenn David- sounds like you have several good options on places to live…..This country was founded on free market principals and liberty for all. If that is not your particular cup of tea, it’s pretty easy to leave….if you stay, start acting like an American and don’t call people who speak out against government interference in the free market a criminal- that’s irresponsible and malicious.

    • RonM says:

      Bryant, I agree (especially comments to Glenn David).

      Glenn has to know that to get medical care in Canada takes forever–they (Canadians) come here for treatment and routine appointments.

      Glenn has to know that even our poor people have a place to live, good nutrition ,3 meals a day and snacks (in fact high cases of obesity). Their kitchens typically have a frig, microwave, and stove. They have transportation (most cases a car), clothing, several color tvs, vcr, even typically the have an XBOX or PLAYSTATION.

      We live in the greatest country on earth, but can’t continue to outspend what we bring in. Government has to be reduced so that we can be an even stronger republic!

  9. John Dains says:

    Outstanding! Right on the money! Sadly most people have no clue about how things really work, nor do many care. I’m glad I stumbled across this article. I’ll be sure to forward it to all I know.

  10. siliconhillbilly says:

    That’s the best summary AND criticism of this mess I’ve ever seen. Thank You!

  11. Rusty Brown in Canada says:

    “A democracy cannot survive as a permanent form of government. It can last only until its citizens discover that they can vote themselves largesse from the public treasury.

    From that moment on, the majority…will vote for those candidates promising the greatest benefits from the public purse, with the result that a democracy will always collapse from loose fiscal policies, always followed by a dictatorship.”

    Lord Thomas MacCauley, May 23, 1857

  12. Glenn David says:

    Bryant,
    In other words don’t dare think! Don’t dare try and change with a changing world..its my way or the highway as the rich get richer and the middle class falls into poverty.

    I thought one had the right to be free in America. and think as he or she wishes Why are corporations outsourcing? Because they can get cheap labour…to hell with Americans..to hell with the middle class..so Bryant go on living the American Dream that has ended..

    America will rise again by investing in its people and only then will it attain the highest standard of living in the world with the best quality of life (health and education) in the world as it should have.. not just for a small % of selfish wealthy types that can’t get enough,..America will wake-up! A better day is coming..TRUST ME!!!

    • RonM says:

      Glenn, you are one angry and bitter person.

      The American dream can be achieved. Let’s start with fewer regulations, lower taxes, and an administration that will not hesitate to throw America under the bus to help unions (Boeing in SC as an example). How about Jeffry Immelt (GE) transferring even more jobs recently to China. GE paid no corporate taxes in 2010 due to international business. Immelt leads Obamas committe for job creation!

      How much more do you want to bleed from the rich? Top 10% pay some 40% of taxes. Bottom 48% pay no federal taxes. I’m not rich, but this is not fair. The top wage earners are job creators. Regulate them too much, tax them too much, and now Obamacare thrown on top of all of that–none of this is healthy for job creation and helping the middle class.

      Both sides of the aisle are guilty for the mess we’re in, so please consider the facts before you go on these rants!

    • Tom Mullen says:

      I’m curious, Glenn. If Walmart was in financial trouble, would you support a law that forced consumers to buy its products?

  13. david says:

    Good article. A couple of addenda–

    Even if the government did have complete information like millions of market participants, it probably wouldn’t allocate resources in the same way. Remember, the government is a small number of elite, and they are very ideologically driven. They have an agenda. They don’t approve of the way Joe and Jane Citizen spend their money (just ask them) and they want to redirect J&J’s resources into more “humane”, “enlightened”, “necessary”, “forward-thinking”, etc. pursuits than J&J’s simple “pursuit of happiness” expenditures, which they scoff at.

    Secondly, unlike Tom, I don’t think a debt default would necessarily cause people in the US to re-think the role of government, especially if the default is brought on by a refusal to raise the debt ceiling. They’ll just say, “Those idiot tea-party types! Now look what they’ve done!”, thinking that it would have been so simple to keep things going if the TPers hadn’t been so narrow and unimaginative. Now if the default is brought about by market forces causing a sudden and catastrophic failure of the system just when everyone is saying “peace and safety!” then the numbers of those losing faith in omnipotent government might be higher. But I doubt if even then a critical mass (however many that might be) will come to the proper realization.

  14. Glenn David says:

    RonM
    You don’t know what your talking about!!!
    I am Canadian and our health system continues to be the cornerstone of our society. Our present national right wing conservative government and some of the like-minded provinces are trying to undermine the best health system in the world by decentralising services into regional health districts that each have a bureaucracy as long as your arm with high paid bureaucrats that duplicate services over and over again. Corporate health-care interests are lobbying our governments to destroy a beautiful system for the people. You don’t know what your talking about my friend! WAKE UP AMERICA..THE WORLD IS PASSING YOU BY!!
    Oh, and RonM I’ve heard your rhetoric about our health system before in your tabloid type media …IT’S A JOKE!!
    I have been served beautifully by our system for over 40 years and so has every Canadian I know…YOU ARE FULL OF SH#T!!

    • RonM says:

      Glenn David, you’ve been served beautifully for over 40 years, eh, apparently your Canadian health care system has failed miserably with your mental health issues!

      Seriously, the American health care system is not perfect, but adding 30-40 million more people to the system will overload it tremendously. Doctors are announcing early retirements–no incentive for doctors to enter medical school for the future because of increasing patients and decreasing income from “government enrolles”.

      If I am FULL OF SHIT as you say, maybe I can go to Canada and get relief for my constipation in say, 6-9 months. No, I think I will call my doctor and get in at 3:45pm today!

  15. Glenn David says:

    I think you yankees are afraid to speak your mind in case big brother throws you in jail…Well, I’m no Yankee so I’ll say it for you…WAKE-UP America you can still be #1 but you’ve got to deal with the PIGS!!!

  16. Scott Van Kleeck says:

    Sir, great points. I am just wondering when all our elected officials forgot that it is a government of the people for the people, not special interest groups. Sometimes you just have to wipe the slate clean and start over again and if a debt default is what we have to do then so be it, but we can not continue to go down this road we are going down now.

  17. Joe...uh huh..the plumber says:

    Some very excellent points in your piece, Tom. The most important point you made is that a “real” market always knows the trooth. “Eventually” we will get proper pricing in all things that affect us on a daily basis. The big problem with government is that it has been infiltrated by Wall St. Therefore, it never will be government “for the people” unless we as the people bring about the separation. The good news is that this “should be” the last time at the punch bowl for the Wall St criminals. There is zero doubt that the excesses that were not allowed to unwind after 9/11, and then again after Hank “uncle Fester” Paulson decided who should n shouldn’t survive the real estate bubble, will finally be allowed to unwind when the current bubbles blow. We as citizens of the United States MUST let our elected officials know that we will NOT allow them to put our children’s future into the hands of the Wall St criminals again! If there are no bailouts next time the “real” market will take over. It will be nice to get back to pre-George W. Bushwacked pricing in oil, gas, building materials, etc etc. We can start a new base from there. As far as this debt ceiling crisis it is actually funny to see how many sheeple actually think it will have an effect on things. What…the stock market just figured out 3 days ago that this “could be trouble?”…Last week the S&P 500 was approaching a new 52 week high! The sheeple need to learn how markets are manipulated so that if you are gonna panic you can panic early and avoid the rush. And God help anyone who is buying gold right now in anticipation of a default. You fokes deserve what’s comin to ya.

  18. Glenn David says:

    Hey You
    So Clinton wasn’t responsible for the surplus and Obama IS responsible for the deficit…Wake Up..Smell the coffee
    You are in trouble in the states because Regan, and the Bushes kept lowering taxes while financing trillion dollar wars using debt to pay for it now Elmer Fudd – Jo 6 pak is stuck with the bill..while your unregulated banksters earn billions…duh!…the average American is so brainwashed its amazing..Anybody in their right mind that would believe somebody like Sarah Palin should even be considered to hold the most powerfull job in the world is just plain STUPID! America Will WAKE-UP thats why your such a great country..you eventually “catch-on” and remake yourself into a winner..now is no different….read Daniel Altman’s book “Outrageous Fortune” and you will learn the truth and you will also have hope that America will regain its place as #! in the world! …but first the PIGGS have to be dealt with!

  19. Vae Victus says:

    Glenn,

    Again I say that you must recognize that most everyone in the Liberty Movement isn’t trapped in the Left-Right or Two-Party Paradigms.

    You keep making statements that imply people do not see Bush II or other presidents at fault. Where was that every advocated in this blog? Bush II is indeed at fault for many things, but that doesn’t take away from Obama, Clinton or anyone else culpable.

    The bottom line is that reality is reality. You can make a statement such as, “the Bankers were unregulated and that is what caused the depression!,” or “cutting taxes made a deficit problem!” But on what reason do you form such statements?

    The evidence demonstrates that regulation (read: government controls) upon the economy, namely the Federal Reserve’s manipulation of the currency, generated the bubble. Simply saying “add more regulation to fix the problem!” is rooted only in an intuitionist frame of mind and is far too generalized. What does the evidence actually suggest that we do, specifically?

    Same with tax cuts and hikes. Tax whom? By how much? Simply yelling out, “Raise Taxes!!” over and over again is not a reasonable argument. Especially in light of evidence from the historical past where prosperity and the government’s financial solvency was healthier with less rate of taxation.

    Yelling gross generalities as solutions, which are based upon only further gross generalities in reason is not the way to get things reformed. Doing more of the same, but only bigger, harder or faster is not usually the way to solve a problem.

  20. Glenn David says:

    Vae,

    Yes I’m yelling I suppose and the people of the US better start yelling before its too late!

    To get to the bottom of this argument we have to decide who we want to be the general public’s protector. Do we want corporations or do we a government that has been elected by the people to see that we have a fair and just society. Right now you have a president who is trying to be the people’s advocate while on the other side you have a party that caters to the corporate rich while posing as a government that pretends it has the general public’s interest at heart…..and their con-job is everywhere..and most gullible Americans (sheeple) buy into it .

    I do believe that the sheeple will see through the con one day before long and will elect politicians that have the people’s interest at heart. These politicians need to be individuals of the highest character that can’t be bought and sold like cars on a used car lot. In other words have the balls to stand up to the corporate lobbyists that run the country. Sounds simple I know but the whole thing is very simple..the large majority of the corporate rich want it all and they don’t give a hot damn about the American public..and they will stop at nothing to have their way as has been witnessed in the last week with the debt crisis..the longer this goes on the more Jo is starting to realize just how sick and selfish these idiots are!

    Vae this is not rocket science and you don’t have to use all your mambo jumbo jargon to further intimidate Jo public into believing he is incapable of having valid opinions of his own, all Jo needs to do is look beyond your daily tabloid media and do some reading and thinking to learn how he’s being conned.

  21. Vae Victus says:

    “Right now you have a president who is trying to be the people’s advocate while on the other side you have a party that caters to the corporate rich…”

    That statement alone tells me you don’t get.

    You sir, are the one who is being conned. YOU need to seriously wake up, or at least study our political system in the United States as it REALLY operates, not as CNN or Fox tells you it does.

  22. Glenn David says:

    Vae
    I don’t watch Fox ever!! and very seldom do I watch CNN.
    The United States should be a model to the world for quality of life, the last time I looked it ranked 4th at best 17th at worst, looking at many different raing sites…does that make sense Vae? It dozen’t to me. .the countries that beat the US have good universal heath and education..there’s no excuse for this, the US should by far and away be #1, hands down..

    One thing I want you to know Vae I love the USA, I love its culture mind you I hate seeing so much of it in places like Europe and Asia..nothing makes me sicker than seeing the Golden Arches in Paris..jazz OK but fast food joints and big box US chain stores..ughhh!

    • Vae Victus says:

      Two things:

      1) Go and read the first reply I made to you in your message about Canadian banks. Do the “countries that beat the US” fall into any on that list I made? They probably did, at least for a time.

      2) You are still, either intentionally or not, avoiding my main point. That being, you are not seeing the political situation as it truly exists. You keep arguing as if some of us are saying the US has no problems, telling us to “Wake Up!” Isn’t that a little ridiculous to do on a blog that is about precisely that, i.e. waking up to realities?

      You’re talking to the wrong people my friend. We understand that the US has problems, grave problems in fact. Where we differ is in the characterization of those problems and how best to fix them.

      Above all, you continue to posit the dilemma of the US as a partisan battle between differing dogmas. As I said already, if you actually think that president Obama represents a “people’s advocate,” you simply are not seeing the reality. The policies of both these presidents have been the same.

      Candidate Obama received more corporate donations from Wall Street than ANY other presidential candidate in US history. One of his top contributors was Goldman Sachs, and a former Sachs member is one of his top advisors. Tim Geitner being promoted to head of Treasury? Bernake keeping his job? QE2?

      Then you have the so-called Healthcare Overhaul, which was literally written by insurance company and Big Pharma lobbyists. These are facts, please look into them.

      This is all aside from the continuation of wars, the commencement of operations in Libya, signing extensions of the Patriot Act, some now with no sunsets, the refusal to close Guatanamo, his continuation of roving wiretaps (actually increased from Bush II), the executive order allowing for the assassination of American citizens, his legal counsel (Holder) advocating a policy of “preventative detention” and positive “rights.” This is just a sample of things all done against the interest and will of the American people, and yet you find he is an advocate for the people?

      You need to start seeing the situation in the US for what it really is: a corporate-financial complex dominated by elites, who actuate their will by a sham Two-Party system that deludes the people into believing they have choice. Every 4-8 years we get a new “Glorious Leader,” and the policies continue unfettered. Both parties will implement identical policies and only shift roles of referree to keep a semblance of balance. At the end of the day, they simply want to be reelected and they know who their masters are. They do what they are told.

      Why do you think that Congress only has 6% approval rating at this point, or did you even know that? Yet you tell the people to “wake up!” We have woken up, millions of us. That is what the Liberty Movement is all about.

      If you want to start dealing in the real world, then feel free to join with us. If you prefer instead to read only the propaganda and listen to the Mainstream Media, then all you are doing is perpetuating the illusion. The elites want us to be at each others’ throats: class warfare, racial violence, envy, jealousy, and all the other evils.

      When you and others are so daft as to think all our problems are because we simply don’t tax the rich enough, or that there is one party going against the wishes of yet another Glorious Leader who promises Hope and Change as People’s Advocate, you are just playing into that illusion.

  23. Jonny H says:

    Yeah Glenn, they oughta make a law against McDonalds and Walmart to protect consumers from themselves, right?

  24. Glenn David says:

    Jonny,
    I get your point Jonny…but when I go to Paris I don’t want to go to the US..it kinda ruins the magic if you know what I mean..but I guess we have to learn to live with all cities being the same..McDonalds, Home Depot and Walmart everywhere..its just kinda sad! Here in Canada it dozen’t matter we have not much identity anyway but in Europe they used to.

  25. Plato says:

    Money corrupts. The concept of “property” is opposed to the concept of “harmonius society” like the concept of
    “equality”, are all abstract ideas that are enforced by a “stronger” or “smarter” minority who is controlling a weaker
    and less educated/intelligent majority. Proportions Rule the Happiness or Misery of our life, in everything, from matter to thought. The fonctioning proportions of Honest and Decent, Competent Politicians, Entepreneurs, Jurists has been alter to the point that nothing is working anymore in the so called “Democracies of the World”. White collar Criminals are in large part in “control” creating a too large imbalance of “The Have ” and “The Have Not”, Harvard has created as many criminals as benefactors.A conflict of “Classes is been created not just in the USA but in the whole world. I don’t have nor see any solution for the Common Men/Woman it looks like to me that the “Welleness” that we have enjoyed in the past half century is almost gone and a Large Proportion of Misery will be over the World Democracies (Industrualized Nations). Let’s enjoy what we have as long we can, nothing is guarenteed but death!
    Cheers!

    • Tom Mullen says:

      If you believe that all human beings are created equal insofar as any natural predisposition to rule over others is concerned, in other words if you DO NOT believe that anyone is born with an intrinsic right to rule over others, then logic dictates that you must conclude that every human being has an inalienable right to life, liberty, and property (the right to dispose of one’s labor and the fruits of one’s labor as one sees fit).

      Plato was wrong. Aristotle was right.

  26. Bob says:

    I don’t have the economics background that some people here seem to have but I do have some common sense, a quality lacking from our current system. When a business is losing money you have 3 choices , well 4 really. 1. Cut costs, 2. Increase revenue, 3. Both 1 and 2 . 4. The last option is to fail and be replaced by a business that is better set to meet the needs placed upon it.
    Government is a business in any form. We have let it spend more than it takes in for far too long. If you owned a business and never showed a profit, it wouldn’t be long before no one would lend you money so why is the government different.
    There are tons of ways the government could be changed to fix our problems but I have a feeling that it is going to have to get much worse before the people rise up and change anything, until then we will be forced to listen to a bunch of rich old men ( and a few rich old women) tell us how they are going to make it all better while they line their pockets with kickbacks and special interest money.

  27. William Schooler says:

    Great article Tom and as usual some interesting comments.

    Here is what I found and is the entire root to the deliriousness we are living in. I have been studying the Declaration of Independence after much research mind you. I finally came across the original writings of Thomas Jefferson and studied this in depth and I swear it was like a light bulb finally turned on.

    What is missing is the foundation the people were given to use, thats right to USE. This document is not for your pleasurable reading, it is actually applicable for all decision making to form and keep a Republic. Here are the facts, very few people have read it in its entirety. Several have read it but less than 1% have actually got its full intention. What this really means is it is not used period. If you have no foundation under your belt then I assure you a failure at a Republic. People have laughed and yelled back at me and I laugh at the ignorance they truly share with me.

    Our Financiers and or Government (one in the same) actually defies and opposes this document entirely and have worked very hard to see we have no clue of its use. They actually know if this population does not get it and use it they actually have no opposition in the way. Thats pretty sick if your reading this you are questioning your own thoughts if you really know what it means to use it.

    It is entirely impossible for a Republic to sustain itself without the very foundation that binds it and it is that simple. A Republic may not survive in the world of the financier because the financier produces debt while many others produce accomplishments. Look at accomplishments and then look at debt and what do you see different about it? Debt has no product to back it, it is false, the work is not there yet and is expected. If you raise the debt above production the Republic withers away.

    I will let you all think with that, I have and it is unbelievable to me that Thomas Jefferson had Observation skills before his time as well ours. He also had great determination skills based on what?

    • Tom Mullen says:

      The preamble to the Declaration is based upon earlier documents, especially the Virginia Declaration of Rights, but the ultimate source of the philosophy was Locke’s Second Treatise of Government (Essay Concerning the True Original Extent and End of Civil Government). How do we know this? Because Jefferson told us, and actually had a resolution passed by the Board of the University of Virginia which said:

      “Resolved, that it is the opinion of this Board that as to the general principles of liberty and the rights of man, in nature and in society, the doctrines of Locke, in his ‘Essay concerning the true original extent and end of civil government,’ and of Sidney in his ‘Discourses on Government,’ may be considered as those generally approved by our fellow citizens of this, and the United States.”

      If you read Locke’s essay, you will find every principle that the Jeffersonian wing of the founders believed in. Hamilton and his followers believed in quite another.

  28. William Schooler says:

    Truly this is your argument? That Thomas Jefferson took other ideas put them up against his own experiences and truths for which he was able to find and determine an idea (or a defining moment) of what a Republic actually is. The pieces that bind it, what the whole is by the parts and by the warnings of what takes place when these are not used correct?

    It is truly amazing to me that we would fight against a Republic because one has yet to be present as described by such an idea. History can present no true Republic by this idea and yet today it is still entirely denied such a concept because someone used others ideas in order to truly form this one.

    Its alteration from its original form is proof acceptance did not exist then as it does not exist now and today no Republic exists. Sadly this is not even viewed which is only validation of what I describe is as true as I sit here communicating.

    The truth is our denial is ours by our own decision, I know this because I recognized for the first time that I myself did not get it, that I have not used it, that in fact I was the very cause of the failure. That it was my own views stopping me from actually duplicating the true intent of the ORIGINAL idea that was communicated as well documented. No it was not brought into agreement by the many because many have opposed a Republic for generations because of poor habits developed over some 5000 years of time.

    In other words; I have accepted responsibility for my own lack of taking time to evaluate and discover truths and all truths are results. They are the results of acts good or bad makes no difference because regardless they hold these truths on display by what is left from such actions. To view these and evaluate them fully is my responsibility to myself as an individual.

    Today the idea of a Republic is still just that, not once in history has the determinations, the decisions and the actual destination actually been achieved purely by our own short comings. The very glue to this idea is the basic elements that define it and also bind it. These parts are Life, Liberty and the Pursuit of happiness and not one bit less. These 3 encompass each other entirely because one cannot exist without the other in a REPUBLIC period. Our Constitution is to be our road map to Liberty to support such a Republic by keeping Government in its proper role, (again) period.

    The idea supports Life’s Role to live out, to do, to bring about, to accomplish or in the words of this described document to Pursue Happiness which by far is an accumulation of Life’s experiences realized. To have certainty of our results, to know when we do something we cause something to be brought about and at the end of it lays the truth, that defining moment the result for which now becomes viewable and can be compared and evaluated along side other such truths and life experiences.

    What is life is about to begin with? This is not a trick question and is very simple, it is to live which really means to DO, to cause, to bring about effects that can be analyzed and learned from. True education by definition of the experience of life itself. Life’s whole intent is to experience more life along side some other life, to do for each other something that can bring about yet another great experience. This would be defined entirely as LIVED!

    A basis is something we use, it is something that is complete and clearly known and understood, we can operate with it and when used will produce a certain or particular kind of result by such an act as doing, causing, bringing about or Pursuing.

    In my experience I have learned very well not to doubt that which I am certain of which I take full advantage of. To know myself, my strengths, my weaknesses, my abilities and as well my accomplishments. I am not in confusion of what I have found here nor should you be when I am done.

    Our certain unalienable rights are to the ability to determine based on our experiences, the will to decide based on principal. We were all endowed with these and it is entirely up to us to use and determine our way with such unalienable rights.

    Now I hope I have made a good case that will not become an argument or some dispute but rather an observation from some individual who has fully decided to live as a Republic and there is only two choices in this exercise, there is the decision to live as a Republic or the decision to deny one and in simple form is all there is. The choice your will entirely is it not?

    Call this boldly stated as none have made it here, our Republic is how well we make the picture, how well we use what is in the picture but most importantly how well we decide we will live such a picture because as I have discovered, the only ideas that hold true are the ones acted upon and brought about as in results to be viewed and determined from as all other ideas we have experienced and including today’s poor decisions. We are certain these are not of a Republic because as long as Financiers have their say a perversion exists that directly goes against each of these parts of a Republic and they are as visual as I sit here. Pursuing control is not a form of pursuing happiness at all because the pursuit of happiness improves the experience of living verses destroying it.

    You are entitled to hold on to the old versions passed along but I refuse and have decided a Republic shall exist by such efforts. The time to decide is today and tomorrow will bring you exactly what you have decided upon. The old term “watch what you wish for” really refers to watch what you decide on because it will take place for no idea was brought about without such an activity.

    You decide.

    William Schooler
    A Producing American