The Sixth Day
Tuesday, November 07, 2017
  Thoughts on Tax Reform
The people of a certain country were tasked by fate to the perpetual job of pushing a heavy wagon up a never-ending hill. For generations everyone pushed and the burden was easy. Then some people began to complain that the weakest among them should not have to push but rather should be entitled to ride on the wagon, and who could disagree? As time went on, those who spoke for the weak riders complained more and more so more riders, some not so weak, were added and ever fewer people were left to push. So as the wagon rolled on and took on more riders and became heavier and heavier, its wheels picked up tacks that made the wheels rougher so they rolled less easily and smoothly. In time, because of the many tacks, the wheels became odd-shaped so the wagon bumped and bounced forward more slowly. A new leader arose with the suggestion that they remove the tacks to smooth the wheels and make the burden easier for those who were still pushing. But those who spoke for the free-riders complained loudly and bitterly that the greatest benefit of fixing the wheels would go almost entirely to the strongest among them, and who could disagree? So the weak bounced along as the heavy wagon creaked and cracked along. The strongest continued the nearly futile push as the wagon ground forward moving ever more slowly. Will the tacks situation be repaired? Will all of the strongest be penalized because a few of them have found ways to become free-riders? Will fixing the tacks be more important than demonizing the strongest? The people of a certain country should think carefully about these questions.
Sunday, June 02, 2013
Islam is not a religion of peace! Islam is a totalitarian political system masquerading as a religion. Muslims are taught that any system of thought, religion, economics, justice, law, or culture that is contrary to Islam is to be overcome and destroyed. They make no apologies, even after one of their followers beheaded a British soldier for no good reason. That is Islam. Either non-Muslims overcome it or they will submit to Islam. Our federal government is in the process of having Americans cease to criticize Islam. I will not criticize Islam; I will only describe it as it is and you can decide for yourself if you want to live under it or overcome it. Those are the only alternatives. If you do not want to live under Islam and it's system whereby Muslims are privileged above non-Muslims, then I suggest you complain loudly and often to all of your elected officials. Obama and his Injustice Department under the Deputy Liar in Chief Eric Holder will do as they please to assist Islam if we permit them to do so. Speak up, and speak up now!
Wednesday, June 08, 2011
  Status quo or kill Grandma?
Brian Burch of Catholic Vote recently asked the question above plus some other questions about government spending and social welfare culminating in this one:

"Which option is the moral and responsible choice? Preserving the status quo? Or would it be better to make the hard choices to reduce the borrowing and spending by our federal government and encourage solutions that address the needs of people at a different level in society?"

Good question! Here are my thoughts: The only workable solution must do two things: 1) Shrink the size and scope of the Federal government, leaving more to the states and to private entities; 2) encourage growth of the private sector so the existing debt and unfunded obligations can be paid without just printing the money to meet them.

The federal government was intended to be very limited, doing only those things that had to be done by a national government. National defense and the federal courts are necessary. Beyond that, everything should be considered. Medicare fraud supposedly costs billions. Private charity does not have that problem.

I do not mean to mean spirited, but entitlements are destructive to the spirit of both the receiver and the one taxed to provide them. Private charity, on the other hand, cultivates a mature, humble, and thankful spirit in both the giver and the receiver. Welfare, in all its forms, is destructive to the fabric of society.

While some may believe greed is America’s biggest problem, I believe rather that it is covetousness; the wholesale coveting of the property, income, and freedom of people who work, live frugally, save, and produce the goods and services that we all benefit from. Our “leaders” too often seek power by harnessing the desire of millions of people to have a better life without having to work to obtain it.

There is no way that continuing to spend the incomes of people yet unborn just to provide an easier life to people today can be considered anything but immoral.
Their money is not ours to spend. Burdening them with our liabilities is a ticket to generational conflict.

Shrink the government and the private sector will grow. Freedom will grow and civility will flower. If not, prepare for hard times because they are sure to come.

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Tuesday, May 10, 2011
  Crack in Congress
Congress is on crack. Seriously; not crack cocaine, but spending crack.

The high from crack cocaine produces feelings of euphoria, confidence, high energy, and a craving for more cocaine. The craving is so powerful that addicts will do almost anything to get it.

For Congress, spending money is their crack cocaine. It gives them feelings of power, control, confidence, self-assurance, magnanimity, euphoria, and a powerful craving to get more of the feeling by spending even more money. They simply cannot resist the opportunity to gain those feelings. Democrats, Republicans, Independents, Socialists; they all fall victim to the extraordinary and potent feelings that go with spending billions and billions of dollars.

Like a street addict who will steal from strangers, friends, and even the closest members of their own family, politicians and their friends at the Fed will do anything to keep up the spending. Members of Congress are stealing from their own children and grandchildren as well as everyone else’s as they engage in deficit spending year after year, decade after decade.

They are incapable self-restraint regardless of who they are hurting or the damage they are doing right now, nor caring how much future pain their current actions will inflict. They fiddle with budgeting rules to make it look like they are not stealing and are not hooked, but they are.

I do not want to believe this, but the evidence is overwhelming. Congress has created programs that are committed to spending even more trillions of dollars in the future without any regard for where the money will come from.

Like any other addict, they are in denial. But the numbers do not lie. More than forty cents of every dollar spent is borrowed. Interest on the debt, mandatory spending and entitlements take nearly every dollar of tax revenue. Eliminating 100% of discretionary spending would not close the deficit, so “budget cuts” and rooting out “waste, fraud, and abuse” are nothing but smokescreens and lies so they can keep feeding their addiction while pretending responsibility.

Presidential leadership on this issue? We have not had it since Ronald Reagan. We are headed for a financial cliff and what has Washington done? They have hit the accelerator.

God help us because a bunch of crack addicts are running the show and they will not even admit they are hooked.
Friday, May 06, 2011
  Islam is Not a Religion
Islam is a totalitarian political system wrapped in a religious flag. I realize that is a bold and potentially controversial statement.

I urge you to take a look for yourself to see if I am overstating the case. Wikipedia defines totalitarianism as follows: “a political system where the state, usually under the power of a single political person, faction, or class, recognizes no limits to its authority and strives to regulate every aspect of public and private life wherever feasible.”

Islam means “submission” and those who are its adherents are expected to submit every aspect of their lives to its teachings and commands. But that is only the beginning. Islam recognizes no such concept as separation of church and state. Muslims are commanded to create a government that follows and enforces its own system of Islamic law called Sharia.

While other religions may exist in Muslim nations, they may not build any building for religious use and if any already exist, they can not repair them so they are in a perpetual state of decline. It is against Islamic law to criticize Islam, both for Muslims and non-Muslims, and it is against the law for anyone to try to convert a Muslim to another faith.

Adherents to Islam are commanded to bring the entire world under the control of Islam and the rule of Sharia law and they are permitted to use warfare to do so. All persons living in Islamic countries are subject to Sharia law irrespective of their personal religious beliefs. Non-Muslims must pay a special tax called jizya as a penalty for not converting to Islam.

Muslim men may have up to four wives and may sire children by an unlimited number of slaves. By Islamic reckoning, any child born to a Muslim father is a Muslim, period. There is no choice and if one attempts to leave Islam, they put themselves under a death sentence that may be carried out by any “true” Muslim.

All women are entirely subordinated to men. Women have no choice in where they live and who they will marry and they cannot initiate a divorce from a forced marriage. The husband may divorce his wife with a wave of his hand and is permitted to beat his wife if she is disobedient.

Muslims are commanded to bow down together in the same direction five times a day to pray. This ritual binds them psychologically to one another in a way that obviates any sense of personal freedom or independence.

By now you may be saying to yourself that this does sound totalitarian, but that you have a Muslim friend who doesn’t seem at all like this. Muslims are not allowed to have non-Muslim friends; they are only permitted to pretend to be a friend to non-Muslims and they are advised to use deceit in their relationships with non-Muslims.

This is not everything there is to know about Islam and the people who practice it who are called Muslims, but I think you can see that it is totalitarian and not religious in the sense that Western civilization understands religion. Most of the Quran is not about the relationship of Muslims to Allah, but about how Muslims are to deal with non-Muslims, and therein lays the conflict that is inevitable between Muslims and all people who want to have freedom, make their own life choices, or be self-governing.

Please inform yourself and others about this threat to freedom! Two good websites are and
Thursday, April 28, 2011
  The Birth Certificate and Race
There is some discussion on the web about the issue of "race" on President Obama's birth certificate. It has been argued that "African" is not a race with regard to the designation of Barack Obama Sr. as being of the "African" race.

Perhaps this is a good time to think about the issue of race. The concept of race is, in my humble opinion, among the most evil inventions of Satan since the beginning of time. Race is used to divide people. It can up stir up animosity, envy, pride, and perhaps a few other deadly sins as well.

Will this country ever be truly unified if we continue to divide over questions of race? Is unity possible when charges of racism are regularly thrown about like baseballs in pre-game warmup?

Can the world find peace when race is added to the already challenging mix of cultural, religious, tribal, lingual, and other differences? Should the U.S. Census stop recording this artificial, man-made distinction on its forms? Would it help to stop drawing the lines of our U.S. Congressional districts, in part, based on the racial breakdown of the people who live in them?

I believe there are many more questions that could be asked about the issue of race and why we permit it to divide us. Or, perhaps we want these divisions. If we do, then we play into Satan's hand, or so it seems.

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Wednesday, February 23, 2011
  The Law of Compensation - What People Should be Paid
The Law of Compensation is very simple. It says what a person is paid is determined by three things:
1) The type of work they do. (Brain surgeons are paid more than day-care workers.)
2) How well they do it. (A highly skilled worker with 20 years of experience is paid more than a novice.)
3) The difficulty of replacing them.

Labor unions exist largely to defeat the law of compensation. They violate the Sherman Act which prohibits collusion with others to set prices. Of course, unlike businesses, they are given an exemption to the Sherman Act.

For example, the National Football League owners cannot even discuss ticket prices among themselves without violating the Sherman Act while the players union can "negotiate" terms that say no rookie will be paid less than $340,000 per season and no five-year veteran will be paid less than $650,000 per season.

Public sector unions "negotiate" with friendly politicians for wages and benefits that generally exceed those of average taxpayers. Politicians willingly promise benefits, especially pensions, that are unaffordable because the politicians know the bills will come due long after they leave office. (Not to mention campaign contributions!)

Long after has now arrived. "Houston, we've got a problem." Likewise Madison, Columbus, Indianapolis, your state capital, and Washington D.C. Perhaps it is time to fix the problem by applying the law of compensation.

No one who can easily be replaced by a similarly qualified and competent person at significantly lower pay should have their job and benefits protected simply because they collude with others in similar circumstances to shut down their employer if they do not get what they demand.

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Friday, August 06, 2010
  Islam is Evil
TIMEcoverAug92010 Islam supports and promotes racism, sexism, homophobia, and genocide. It is time to stop tip-toeing around the truth about Islam.

Americans tend to think of all religions as good, kind of like ice cream. We each have our favorite flavor and though we may not like what our neighbor likes, we can see why he or she likes their flavor because it is “good,” if you like that particular flavor.

When it comes to religions, there is a fundamental difference. Not every religion is good. Most of us would agree most religions teach good things, even if the flavor we like is different from the one our neighbor likes. But when it comes to Islam that is not the case.

Time Magazine recently featured a cover showing the true face of Islam. The magazine cover and Afghanistan war are discussed here. I do not necessarily agree with the writer’s position about the war, but the point is that the Taliban will strictly enforce Islamic Sharia law if given the opportunity, and not just in Afghanistan.

What about “moderate” Muslims you ask? My question is, “Where are they?” They have not risen up in mass to confront the radicals for the reason that the so-called radicals are the true representatives of the actual teachings of Islam. Moderates will not speak against radicals because radicals represent what every true Muslim know he should be.

If you do not know about Islam, Sharia law, and the imperative to Muslims to spread Sharia law to all the earth, I urge you to begin to inform yourself. Do not join this battle without ammunition.

Here are two good websites for the truth about Islam from two people who have lived under it.

Usama Dakdok Brigitte Gabriel

Thursday, January 14, 2010
  Pact with the Devil?
Televangelist Pat Robertson has come under fire for apparently blaming the Haiti earthquake on a pact with the Devil made by Haitians a couple of hundred years ago. I am no fan of Pat Robertson, but it may be that his comments are being misconstrued.

Perhaps he was saying that God is punishing Haiti with the earthquake, or perhaps he was saying that the devastation and loss of life resulting from the earthquake is in part a result of the dictatorship and corruption that Haiti has lived under for the last two hundred years.

Haiti is widely reported to be the poorest nation in the Western Hemisphere and it is widely reported to be riddled with corruption and gang violence, and it is an historical fact that it has lived under one dictator after another for most of the last two hundred years. Poverty and corruption are natural consequences of dictatorship and they are far less prevalent in free market societies where the rule of law prevails and respect for private contracts and private property rights are upheld.

Did Haitians make a pact with the Devil? I do not know, but it is evident that Haitians today suffer in a corrupt dictatorship. We can hope that aid reaches them and that the government will be reformed. The Red Cross and Salvation Army are two possible ways to make contributions to help Haitians.

Rebuilding the damage caused by the earthquake will be an enormous task. History suggests that building a free society in Haiti will be even harder.
Friday, December 11, 2009
  Declare War! – And then Bring Home the Troops
OK, I know it sounds crazy, but that is the sanest strategy for the U.S.A.

Let me explain. By any common-sense definition, we are at war even though there has been no congressional declaration of war. I believe the first thing we must do is to enact a formal declaration of war against any and all terrorists and terrorist organizations that threaten the United States.

The declaration should specify that we will pursue such terrorists anywhere they may be found without regard to national borders. Once that position is made clear, we should bring home most of our troops and cease our attempts at nation-building.

Our troops would be replaced by beginning the development of a far more extensive intelligence network than we now have or have ever had in the past. As terrorist networks are discovered through our intelligence network, we would, where practical, request that law enforcement arrest and prosecute the terrorists or deliver them to us. In countries such as Afghanistan, where there is no effective national government, the intelligence agents on the ground would be empowered to make calls for missile strikes from aerial drones in order to destroy the terrorist networks, training camps, etc.

I realize this is an unconventional approach, but we are fighting an unconventional enemy and it takes advantage of our technological superiority. This is not a quick fix, but our current military strategy assumes that we will maintain troops in Iraq and Afghanistan more or less indefinitely, probably for the next fifteen years, or longer. Developing the intelligence networks will take time but will be far less costly in both the blood of our soldiers and in dollars over the long run.

Our current strategy is working but is unsustainable. It is too costly and we will, in time, lose the political will to continue that strategy because of its success at preventing attacks here at home. Yet this success cannot be allowed to keep us from being on the offensive against terrorists both now and for years to come. The only practical way to combat a non-uniformed force employing terrorist tactics is with human intelligence. It can be done, and with patience and persistence, it will succeed.

So, are you ready to declare war and bring home the troops?
Wednesday, August 26, 2009
  A Few Random Thoughts
Israel, you grew fat and rebelled against God, your Creator;
you rejected the Mighty Rock, your only place of safety.

(The words of Moses as recorded in Deuteronomy 32:15)

We have trusted in material goods, the things we could touch and feel and buy with our credit cards; we have loved our government and looked to it to fondly when it promised to solve our problems, and even though we never looked to it for succor we neglected to warn those who did that it would become their master.


The cost of government is like a heavy wagon that must be pushed up a hill. If everyone helps to push, it will be easy and the burden will be light. Instead, half the people neither push, nor walk on their own, nor encourage those who do push, but rather expect to ride in the wagon. In fact a very small group of people do 95% the pushing. Does this sound like a fair system to you? Is this social justice or is it tyranny by another name?


The federal government is now spending $1.85 for every $1.00 it takes in taxes. You and I could do the same thing as long as our creditors permitted us to do so, but for most that would not be for long. How long will America’s creditors continue to permit Uncle Sam to do so?


The name of this problem is “Unsustainable.” Congress spends money as if nothing is wrong even though we all know everything is wrong and this is unsustainable. Ignorant people point to Social Security and say that government welfare programs work. Arrogant people point to Medicare, Medicaid, SCHIP, and the Prescription Drug Program and claim that they work even though they shift costs to other people and are bottomless pits of unfunded liabilities. They are unsustainable.


“Do it for the children.” How many times have policies and programs been sold to us with that line? I have a suggestion. Do this for the children: Stop burdening them with debts they can never pay. Stop condemning them to a lifetime of 70% or higher tax rates. Stop pretending to be compassionate with money that isn’t yours to spend because it will first have to be earned by people who haven’t even been born yet. Stop lying and acknowledge that broad government entitlement programs can only be paid for by broad and heavy taxes that rob people of the fruits of their labors. Stop the immorality of robbing the future. Stop claiming that other people’s greed caused our problems and admit that it was your own pride and sloth and envy and lust for power and yes, your own gluttony, greed, and vainglory that brought us here. And if you do not want to turn the other way and cut spending, then at least get out of Washington and let someone else who will, take your place!
Thursday, July 09, 2009
  Your Children Have Been Sold Into Slavery
Though you may not know it, your children have been sold into slavery. I realize this may come as a shock to you but you may as well become accustomed to the idea because it is a fait accompli, a deed already done.

Perhaps an explanation is in order. Let us recall the ancient Israelites who were a free people whose only king was the Lord. But they wanted to be like other people around them and have a king. The Lord gave them a stern warning through Samuel:

"This is what the king who will reign over you will do: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. He will take your daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants. Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. He will take a tenth of your flocks, and you yourselves will become his slaves.”

Despite the warning, Israel became a kingdom with an earthly king and the people willingly became subjects, or in the words of the Lord, slaves. It is important to note that slavery was not imposed on the people, they chose it for themselves, and that they were called slaves even though only a tenth of their produce would be taken.

Did you know that the great animating force for the American Revolution was the New Testament teaching that all people have unalienable rights that come from God. I dare say that you have not the right to make yourselves nor your children slaves. But look what we have done.

We are bankrupt. We cannot spend our way to prosperity nor buy our way out of debt by creating more debt. We have sold ourselves and our children as slaves to pay for social security, medicare, prescription drug benefits, bankster bailouts, and all the rest of big government.

In 2006, Professor Laurence J. Kotlikoff concluded that the U.S. was “clearly headed down the path” to bankruptcy. That was before the housing bubble burst, before chaos hit the financial system, before the TARP Bill, the Stimulus Bill and numerous other ad hoc schemes designed to keep our system afloat. He calculated the fiscal gap in 2006 as $69.5 Trillion. It is much higher now because Congress has gone on a spending binge and tax revenues have collapsed.

Economics is not rocket science. The economy was worse in 1981 than it is today with higher unemployment plus the scourge of high inflation. We got out of that mess with tax cuts and a determined, if only marginally successful, effort to cut the size and scope of government. In four years tax revenues nearly doubled and the deficit would have shrunk if not for continued reckless spending by Congress.

Those same policies could dramatically boost the economy now. We would still be bankrupt but we would have some hope of regaining our financial footing and putting our house in order. As it is, we like the Israelites, have chosen slavery.

An International Monetary Fund economist with much experience in the Third World noted that no nation’s economy can really be “fixed” until the power of the local oligarchs has been broken. We have our own oligarchs. Just as in most Third World cases, they are bankers. For us it is Goldman Sachs and the New York Fed. I am going to refer you to a lengthy article from Rolling Stone magazine. I hope you will take the time to read all of it. You and your children, after all, are being made slaves to for the benefit of wealthy and powerful people. The article pulls back the covers to reveal just a little of Goldman Sachs dark side.

There is much more that could be said about Goldman and then there is the New York Fed, formerly run by Timmy Tax-Cheat Geithner before he ran off to run the U.S. Treasury. We are in trouble but the first step out of trouble is to understand our situation. Then we can begin to regain our freedom. I hope that you are one who is willing to make some sacrifices to get it back.

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Wednesday, June 03, 2009
  Fiction, Freedom, and the Fourth Estate
We have all watched a magician perform illusions that leave us spellbound. “How did he do that?” we ask ourselves. We understand there is always something going on that we do not see and that a big part of the illusion is accomplished because our attention is drawn to what the magician wants us to see. The “show” is a fiction that hides what is real.

America is witnessing a kind of magic show right now. Great attention is focused on what President Obama says while what he does is accepted with little scrutiny and no serious questioning because of his personal charisma and popularity.

Elected Republicans and the RNC are almost entirely silent. It is only Newt Gingrich, Dick Cheney, and a few others who seriously question what is happening. In response we see stories from the old media about “moderate” Republicans fearing the party has left them. These stories are designed to silence elected Republicans so they will not say what they are thinking.

The President says he is concerned about the budget deficit. Yet he helped pass the $700 Billion TARP bill. He asked for the $787 Billion stimulus bill to be passed in January so he could sign it quickly once inaugurated. It shot through Congress so fast that no one actually read it before voting on it. The President has said “no more earmarks” and yet the bill he signed contained thousands of earmarks.

The President said no lobbyists would be appointed under his administration. The exceptions came almost immediately and then last Friday the policy was scrapped with little fanfare. Watch what he does, not what he says.

The President says he wants to nationalize healthcare to save money. Really? Do you believe more people can get more care, and better care, for less money? No one past the second grade should buy that illusion.

The President wants to limit carbon emissions to save the planet. Or is it to create an enormous new tax system that will undermine our ability to be globally competitive and justify regulating virtually every human activity?

The President promised “change.” No one seemed to question whether this “change” would add to our freedom or take away our freedom. We should keep in mind the wise words of Gerald Ford who observed, "A government big enough to give you everything you want is a government big enough to take from you everything you have.”

The U.S. Constitution was set up to preserve our freedoms by establishing a limited government that would only have a few definite, enumerated powers. The Fourth Estate (the free press) was to be the watchman on the wall that assured our freedoms would never be swept away.

The Fourth Estate, in the form of newspapers, NBC, ABC, and CBS, has fallen under the spell of the magician. Thank God for the Internet media, talk radio, and FOX News or there would be no Fourth Estate as conceived by the Founders.

Most of what the federal government does today is far beyond the enumerated powers. Because no one seems to question anything government does, even the legislation that passed last week is ignored. Consider the TARP bill that had the express purpose of protecting financial companies from collapse. President Bush used some of that money for the first round of bailouts of the auto companies. Where was the Fourth Estate?

Now there are credible allegations that auto dealerships designated for closing by the Administration were selected based on political contributions. This is a serious issue. Where is the Fourth Estate?

Never forget that government is a monster that always seeks to feed itself and to grow and to devour anything that stands between it and the satisfaction of its appetites. Freedom is a precious thing, and once taken away is not easily regained.

Freedom depends on discovering truth and opening it to the light of day. Fiction, illusions, and flowery speech will not preserve freedom. Will the Fourth Estate fight to preserve freedom, even its own freedom?
Monday, June 01, 2009
  Tiller the Killer Meets his Maker
The notorious late-term abortionist, Dr. George Tiller, was murdered at church on Sunday. This is a sad and unfortunate turn in the long effort to bring to an close his abortion clinic. I am pro-life and so I do not support the killing of Dr. Tiller nor the practice of abortion.

There is an effort underway to paint pro-life people and groups as somehow "responsible" for the murder of Dr. Tiller. I believe responsibility lies elsewhere. In fact, I believe strident pro-abortionists bear the major part of responsibility for this heinous act.

The latest poll indicates the majority of Americans are now pro-life. The more important fact is that a substantial majority have for years been opposed to the grisly late-term abortions performed by the likes of Dr. Tiller. But, politicians and non-elected judges have thwarted the will of the majority.

Again, I do not defend the killing of Dr. Tiller, or any other abortionist, but when politicians who are bought and paid for with abortionists dollars, and judges who gain appointments largely because they are committed to protecting the practice, stand in the way of limitations, restrictions, or even sensible health regulations for abortion clinics, then common sense says that our political system has broken down and unbalanced people become more likely to resort to extreme acts.

Having said that, I will go out on another limb. I was surprised by how little news coverage Dr. Tiller's murder seemed to garner on national basis. If the coverage was truly as little as I perceived, then I believe that is also a sign of how little support there is among the public for keeping late-term abortions available.

To the strident advocates of "a woman's right to choose," I say you need to look in the mirror and ask yourself if you bear some burden in the killing of Dr. George Tiller.
Thursday, May 21, 2009
  Madoff Gets a Bum Rap!

Bernard Madoff has been widely excoriated for running the largest Ponzi scheme of all time. If only it were true.

Bernie took money from investors while promising solid, but not spectacular returns. He used money from later investors to pay off earlier investors and skimmed off a bit for yachts, jets, villas, and other goodies too numerous to mention as his take for keeping it all afloat for years.

Now, I understand that fifty or sixty-five Billion dollars seems like a lot of money to most folks but it is chump change compared to what is actually the world's largest Ponzi scheme. Congratulations, because you are part of it!

It is called Social Security. The government took money from early workers (beginning in the 1930's) and gave them great returns. Among the first was a woman who paid in less than fifty dollars and then collected benefits until she died at the age of 100.

Bernie Madoff skimmed off money for his personal expenses; your government has effectively done the same thing. Your dollars have paid for national defense, welfare, food stamps, roads and bridges, waste, fraud, and abuse, and a host of other things. Bernie didn't put IOU's in the till for the things he bought. Your government did put in IOU's, but the money is gone, accounted for, and spent.

Bernie made a lot of people happy with the fine returns he provided for many years. FDR and successive congresses have made voters very happy by providing lots of goodies from the federal treasury for many years.

Bernie has gone to jail because he could not find enough new investors to keep it all going. The same thing will happen eventually to Social Security. Younger workers will revolt.

The Trustees just told us the money will be gone sooner than they thought it would last year. They are talking about when the IOU's run out. But there are only tax payers to pay the IOU's and those same taxpayers will have to pay for current government expenses at the same time they begin paying off the IOU's in just a few years.

This is what is known as a train-wreck and it will happen sooner than you expect. The only difference is that no one will go to jail. The guilty parties are voters who have kept on, and keep on, electing politicians who rob them of their freedom while promising "security" in return.

Those who make this bargain end up with neither. Bernie Madoff is probably collecting his Social Security payments while in jail. If only we could lock up Congress with him!

Tuesday, May 19, 2009
  Green Shoots and Great Subterfuge

Much has been made of supposed "green shoots" in the economic reports that indicate things are getting better. Banks actually made profits in the first quarter. Housing numbers are not as bad as they seem. New claims for unemployment came in lower than expected.

These are actual reports but are better seen as "spin" than as signs that things are turning around. Bank profits were based on silly things like this: Banks could repurchase their debt for pennies on the dollar and the difference between par and pennies is thereby booked as a profit even though they did not actually repurchase any of their debt.

New claims for unemployment are made weekly and the numbers are well known to be quite volatile. Economists are pretty much universal in their agreement that unemployment will continue to rise even after a recovery has actually begun. That is the normal pattern of every recession. The rate of unemployment can be expected to rise for at least a year and will probably reach 12%, if not higher.

Housing starts are the lowest they have been in the fifty years records have been officially recorded. Sometimes I think we might be better off without all of the government and private institutional reports telling us what is going on. The spin says most of the drop in housing was in multi-family, not single family units. Gee, don't you feel better now!

One of the great questions I still wrestle with is whether we will have inflation or deflation. I believe the reality is that we cannot yet know the answer to that question. Some economists believe we need to encourage inflation to help debtors to be able to repay their debts. The pressure on prices is now downward because more people are inclined to save and fewer people are borrowing and buying. Housing, automobiles, and many other things, especially durable goods, are falling in price.

Niels Jensen believes governments worldwide will need to borrow at least to 33 Trillion Dollars because massive government borrowing has always followed banking crises. That is about fifty times the amount set aside by the original TARP bill. The massive borrowing will crowd out private sector borrowing and that will mean very slow economic growth in the private sector economy for at least the next several years.

Massive borrowing needs may mean high interest rates for savers, or it may mean that the slow economic growth will leave interest rates at low levels for years to come as we try to grow out of these problems while starving the economy of investment capital. Either result will not be good for the stock market.

The green shoots of the economy should have two words written on them: Caveat emptor!

Wednesday, February 18, 2009
  Help for Homeowners?
The Administration’s new plan to help struggling homeowners gives short-term gain at the cost of long-term pain. When banks are forced to take a write-down on the balance due on loans they have made, you can be sure that loans will be much harder to obtain in the future.

There is a definite logic to asking the banks to write off part of the loan when the borrowers now find themselves upside-down, owing more than their house is worth. But, once the precedent has been established, banks will have every reason to become extraordinarily cautious in whom they approve for loans and to ratchet up the required down payment to thirty percent or even forty percent of the total cost of the house.

Tax credits for borrowers and special government programs to guarantee loans made with zero percent or five percent down will help some people buy homes, (i.e., more of the policies that got us into this mess) however, the overall effect will be to lessen the amount of money available for home financing. In the long run, that means more pain, less gain, as fewer people will be able to afford homes.

Bankers certainly know they will have to take write-downs on thousands of loans. Over one-quarter of the homes on the market in Mesa, Arizona, for example, are reported to be “short-sales.” That is, the bank has already agreed to accept whatever the house can be sold for and to write off the balance of the loan. The difference between this and what the Administration is proposing is that the homeowner loses the house. Painful, yes. But allowing the homeowner to keep the house is to reward imprudent behavior in a way that nearly guarantees it will happen again.

We are being transformed into a culture that punishes success and rewards failure. Homeowners who pay on time are being taxed to help those who did not. Consider the car companies. GM and Chrysler took bailout money. The Stimulus Bill provides for the government to buy thousands of new cars for the Federal fleet. Whose cars will they purchase? You can not tell me that the tendency won’t be for the government to try to protect its “investment” in GM and Chrysler by buying cars from them. I’m sorry, Ford. You will have to suffer for being a little better managed than your Detroit brethren.

Bankers who were cautious in their lending are now forced to compete with government subsidized banks that were foolish in their lending and investing.

Reward failure. Punish success. Change we can believe in?
Thursday, January 29, 2009
  Pelosi and Family Planning

STEPHANOPOULOS: Hundreds of millions of dollars to expand family planning services. How is that stimulus?

PELOSI: Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children's health, education and some of those elements are to help the states meet their financial needs. One of those - one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government.

STEPHANOPOULOS: So no apologies for that?

PELOSI: No apologies. No. we have to deal with the consequences of the downturn in our economy.

My Comments:
This may be the most Hitler-like statement ever made by a U.S. politician. Eliminating children (Hitler called unproductive people "useless eaters"), is not the road to economic growth. Any economist will tell you that population growth is one of the key conditions for economic growth.

It may seem like a short-term solution because of the costs of educating and caring for children, but in the long run, children grow up and become producers. Over a lifetime, each person produces many times more than they consume.

Europe, faces a bleak economic future because of a declining population. The taxes to pay government, especially social insurance for the elderly, can only come from a growing labor force. This problem will devastate Europe in the next forty years.

You are probably familiar with the concept of exponential growth, that is growth that becomes faster and faster in numerical terms even though the percentage change is the same every year. What you may not realize is that populations also decline along an exponential path when the birth rate is not sufficient for replacement. That is to say, it begins slowly and then grows at a faster and faster rate every year.

My recollection is that in Italy the birth rate is 1.2 children per woman versus a replacement rate of 2.1. If present trends persist (they have been in place for years), then by 2050 Europe will have lost one third of its population. Do you think we have a crises in the U.S. partly because of an excess of houses over demand? What do you think it is like in Europe and what will be like going forward?

I understand that politicians have a hard time thinking past the next election, but providing "services" to lower birth rates is a long road that leads to economic suicide.

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Sunday, January 25, 2009
  Challenges at Hand - A Time to Pray
President Obama is now in office and the challenges of governing have begun. On the domestic side, the knotty issues relate mainly to the economy. In foreign policy, there are several unavoidable challenges; the largest is Afghanistan, not Iraq and not the Israeli-Palestinian conflict. That unruly conflict can be, and usually is, avoided by Presidents, except those who want to get symbolic points for trying.

The President faces hard choices in Afghanistan. He will need good fortune as well as good judgment and wisdom. His plans call for disengagement from Iraq, and with relative stability there the way forward seems manageable. He has called for an increase in our commitment of troops to Afghanistan to fight the Taliban.

The challenge therein is maintaining supply lines. At present those lines go from ships docked at Karachi, Pakistan by truck through Pakistan and then north across the border into Afghanistan at either of two crossings. We depend entirely on the government of Pakistan to maintain the integrity of those supply lines.

Rising tensions between India and Pakistan complicate the situation. Pakistan has already pulled some troops from the Afghan border area to its border with India following the Mumbai attacks. Increased tensions could come from the government on either side or from more terrorist attacks. All three of these factors are beyond Washington’s control.

An alternative supply route is critical and can only come through Iran (not possible at present) or from the north through some combination of former Soviet Republics and Russia itself or at least with Russian cooperation. This will mean making concessions to Russia. We will get no help in pressing the Russians for cooperation from any coalition of European states because too many of them are too dependent on Russian natural gas for industry and for home heating. Moscow is already flexing that muscle to make it clear to European states that they must bow to Russian wishes.

It is likely that Russian cooperation will come at a high price. It will probably mean lessening our support for Georgia and Ukraine, abandoning talk of them joining NATO, and possibly withdrawing from our military bases in Central Asia. At worst, it could mean recognition of the Russian sphere of influence throughout the former Soviet Union, not unlike the Monroe Doctrine which charges European nations not to interfere in the Americas.

Dealing with hard and unavoidable challenges is what makes being the President so tough. Foreign policy is certainly an area in which to pray for wisdom for our President and for the Lord’s favor on our country in a dangerous world.
  New Name!
I have changed the name on this blog. I have decided to put all of my economic and financial market commentary only on my other blog:

I will use this blog for everything else. I plan to post links to some other blogs that I read on a regular basis.

Your comments are always welcome!
Monday, January 05, 2009
  Open Letter to the Republican National Committee
January 5, 2009

Mike Duncan, RNC Chairman
310 First Street SE
Washington DC 20003

Dear Mr. Duncan,

Thank you for the impressive Republican National Committee card that you sent to me. I look forward to working with the RNC in the future if there is a clear return to at least Reagan-style conservatism.

I really want a more Ron Paul type party and not Democrat lite as we have seen with George Bush and would have had with John McCain. These are not bad men they just do not share the vision of limited, constitutional government that I cherish.

The Republican Party will never win by trying to be centrists. All that has done is to give us things like an unaffordable prescription drug program. What ever happened to Social Security reform? Oh, I know it was 9-11.

If this had been made a priority, at least maybe it would be part of the debate. Instead we are debating how President Bush could illegally use the TARP money to bailout the GM/UAW cabal while we count the Trillions of dollars in un-funded liabilities that will be an immoral burden on future generations.

If you seriously want to rebuild the grassroots of the Republican Party, you had better make the Grand Old Party stand for something instead of trying to stand in the middle of the road. Because, I’ve got news for you, if you keep standing there you are going to continue getting run over.

Like millions of other conservatives, I will be watching to see if the Republican Party returns to me or stays in the middle of the road. I will not join you there because I do not believe that is the place from which to fight the Obama-Reid-Pelosi socialists. Instead, let’s go back to the citadel of the Constitution as presented in the Federalist Papers and fight from there.

Gary Harbaugh
Commentary about all things human; life, the Christian religion, ethics, politics, economics, sociology, art, anything to do with twenty-first century American culture. Perhaps I will inform, perhaps I will anger and frustrate, but I hope always to make you think!

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Location: Fort Wayne, Indiana, United States

I grew up in Kansas in the 1950's - 60's. I attended Kansas State (B.S. in Soc. Science) and Washburn Law School (J.D.). My wife and I have been married for over thirty years and are the parents of three grown sons.

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