Let The Federal Government Collapse?

Passage of the health care bill has sparked a revival of small-government thinking, causing many to predict significant Republican gains in Congress this fall. But despite some short-term success, this small-government revival is doomed to fail. The depressing truth is that the only way to regain the full measure of those freedoms proclaimed in our Founding Documents is for our current federal government to completely collapse under the weight of its own excesses.

Often, one carefully articulated analogy can succinctly convey a very complex idea. In our case, that analogy is addiction. Over the past hundred years, we have slowly allowed a monstrous system of dependence to develop until nearly every citizen relies upon government money, and thus is an addict. This has come about because the hard logic of the Founders has been replaced by the seductive ease of emotional arguments. All too often, the debate is over not if government should do something, but what it should do. This almost imperceptible shift in our national philosophy is a manifestation of our addiction.

Detoxing America will cause social, political, and economic strife of a sort unimaginable, and yet it is a process we must endure. Hitting bottom is our only hope for a national rehabilitation. It is our only chance for a true reacquaintance with those principles that made this the greatest nation on earth: liberty, individual achievement, limited government, and the equality of opportunity.

(Emphasis added.) Via American Thinker: Let It Burn.

The Twilight of the Welfare State?

The debt crisis initiated by Greece’s near default has subsided for the moment because of a trillion dollar bailout package from the European Union and the International Monetary Fund.

This is only a temporary respite, however; debt crises will recur soon, in more virulent fashion, and they will affect not just Greece and the other less economically robust countries of Europe but the United States, the rest of Europe, and high-income countries like Japan.

The fundamental problems are the interactions between demographics, technological progress in medicine, and entitlement programs.

Tax increases will not fix things; only major cutbacks in entitlements can avoid fiscal collapse.

The Twilight of the Welfare State? – Room for Debate Blog – NYTimes.com.

Bernie Madoff vs Social Security

Takes money from investors with the promise that the money will be invested and made available to them later Takes money from wage earners with the promise that the money will be invested in a “Trust Fund” and made available later.
Instead of investing the money Madoff spends it on nice homes in the Hamptons and yachts. Instead of depositing money in a Trust Fund the politicians use it for general spending and vote buying.
When the time comes to pay the investors back Madoff simply uses some of the new funds from newer investors to pay back the older investors. When benefits for older investors become due the politicians pay them with money taken from younger and newer wage earners to pay the geezers.
When Madoff’s scheme is discovered all hell breaks loose. New investors won’t give him any more cash. When Social Security runs out of money they simply force the taxpayers to send them some more.
Bernie Madoff is in jail. Politicians remain in Washington .

via Institute for Truth in Accounting – Blog.

The Big-Spending, High-Taxing, Lousy-Services Paradigm

James Madison would have to revise—or possibly burn—Federalist No. 10 if he were forced to account for the new phenomenon of the government itself becoming the faction decisively shaping its own policy and conduct. (See “Madison’s Nightmare” in City Journal’s 2009 special issue, “New York’s Tomorrow.”) This faction dominates because it’s playing a much longer game than the politicians who come and go, not to mention the citizens who rarely read the enormous owner’s manual for the Rube Goldberg machine they feed with their dollars. They rarely stay outraged long enough to make a difference.

via The Big-Spending, High-Taxing, Lousy-Services Paradigm by William Voegeli, City Journal Autumn 2009.

Why Smart People Can Be So Stupid

Sternberg’s premise is that stupidity and intelligence aren’t like cold and heat, where the former is simply the absence of the latter. Stupidity might be a quality in itself, perhaps measurable, and it may exist in dynamic fluxion with intelligence, such that smart people can do really dumb things sometimes and vice versa.

Perkins lists eight deadly sins of the stupid smart person, which seem to sum it all up rather elegantly: impulsiveness (doing something rash), neglect (ignoring something important), procrastination (actively avoiding something important), vacillation (dithering), backsliding (capitulating to habit), indulgence (allowing oneself to fall into excess), overdoing (like indulgence, but with positive things) and walking the edge (tempting fate). That sounds like my entire life, actually. Yes, that explains a lot.

After reading Stanovich, the proper utility of game theory seems to be, not the study of human interactions, but the study of why game theory doesn’t work in real life — to wit: the study of human stupidity, including the stupidity of those who keep trying to apply game theory to real human behavior. Stanovich also contributes the excellent term “dysrationalia.” A word to keep and to use.

via Salon.com Books | “Why Smart People Can Be So Stupid,” by Robert J. Sternberg.

The Obsolete New York Model

More important still, the propounders of the individualist work ethic, from Alexander Hamilton onward, had it right: a free society isn’t one that alleviates the burden of supporting ourselves and our families, but rather one that provides the opportunity to labor in a way that brings to light whatever human excellence may lie within us—a way that perhaps even adds to the sum of human progress. As opposed to FDR’s immense governmental machine throbbing mightily at the end of history, how much grander is Edmund Burke’s vision of society as “a partnership in all science; a partnership in all art; a partnership in every virtue and in all perfection.” It is a vision in which some can be the Titans Roosevelt rejected—not just the Morgans and the Vanderbilts that New York produced, but also its Edith Whartons and its Herman Melvilles. Most crucially, all can be humans, free citizens with a sense of purpose, not cogs.

via The Obsolete New York Model by Myron Magnet, City Journal 16 July 2009.

This Is The War On Drugs

We’ve reached the point where police have no qualms about a using heavily armed police force trained in military tactics to serve a search warrant on a suspected nonviolent marijuana offender. And we didn’t get here by accident. The war on drugs has been escalating and militarizing for a generation. What’s most disturbing about that video isn’t the violence depicted in it, but that such violence has become routine.

via A Drug Raid Goes Viral – Reason Magazine.

Gambling With Other People’s Money

Gambling With Other People’s Money is a sensible, accessible, intuitively appealing treatise from Russell Roberts on the financial collapse. It centers on the incentives and behaviors of those involved, not on the financial instruments they used.

Short version: if you have the idea that the government will bail you out when you are about to lose, you feel safer being reckless. You are even more reckless when you get to keep all the upside, and lose nothing on the downside, because someone else bails you out when you lose. The gains are private, and the losses are public. This, combined with bad regulation and other bad incentives, shows Washington and Wall Street to be tightly intertwined; they are together the fox, and we the people are the chickens in the henhouse. We taxpayers are the ones who pay for the bailout, a huge transfer of wealth to the already-wealthy bailed-out lenders.

Following are many excerpts that I found especially good. The entire conclusion “Where Do We Go From Here?” in particular is excellent, and defies excerpting.

Continue reading “Gambling With Other People’s Money”

U.S. taxpayers are helping finance Greek bailout

The International Monetary Fund board has approved a $40 billion bailout for Greece, almost one year after the Senate rejected my amendment to prohibit the IMF from using U.S. taxpayer money to bailout foreign countries.

Congress didn’t learn their lesson after the $700 billion failed bank bailout and let world leaders shake down U.S taxpayers for international bailout money at the G-20 conference in April 2009. G-20 Finance Ministers and Central Bank Governors asked the United States, the IMF’s largest contributor, for a whopping $108 billion to rescue bankers around the world and the Obama Administration quickly obliged.

Rather than pass it as stand-alone legislation, President Obama asked Congress to fold the $108 billion into a war-spending bill to send money to our troops.

It was clear such an approach would simply repeat the expensive mistake of the failed Wall Street bailouts with banks in other nations. Think of it as an international TARP plan, another massive rescue package rushed through with little planning or debate. That’s why I objected and offered an amendment to take it out of the war bill. But the Democrat Senate voted to keep the IMF bailout in the war spending bill. 64 senators voted for the bailout, 30 senators voted against it.

Only one year later, the IMF is sending nearly $40 billion to bailout Greece, the biggest bailout the IMF has ever enacted.

Right now, 17 percent of the IMF funding pool that the $40 billion bailout is being drawn from comes from U.S. taxpayers.

via U.S. taxpayers are helping finance Greek bailout | The Daily Caller – Breaking News, Opinion, Research, and Entertainment.