- According to a Washington Post article that was written by Robert Samuelson and summarized in the December 30, 2011 issue of The Week magazine, in 2012 America's budget deficit is expected to be about 8% of the country's GDP, assuming that the current set of optimistic economic assumptions actually come true. U.S. Federal government borrowing to cover its expenses will be 24% of its expenditures, i.e. the U.S. Federal government will have to borrow one dollar for every three dollars it expends.
However, even though these numbers are very scary, consider other numbers from the article as it relates to two economic basket cases in Europe. Italy's budget deficit will be 2.4% compared to our 8%. Greece's government borrowing will be 24% of its spending, compared to our 27%. Thus, if Greece and Italy are tottering close to financial insolvency, what does our expected/best case, economic situation in 2012 mean for us?
- The November 25, 2011 issue of The Week magazine reviewed how Jefferson County, Alabama had filed the largest government bankruptcy in U.S. history in mid-November. The county had tried to restructure its $4 billion worth of debt with its creditors but could not come to an agreement.
The reason for the financial mess? Not surprisingly, the article identifies poor accounting and political corruption, two functions under the full control of the political class. I would bet that Jefferson County and Detroit (see yesterday's insanity) will not be the last government entities that we will see go belly up, with most of them being caused by incompetent and corrupt politicians. We will cover more on this as the bankruptcies unfold going forward into 2012. This would have been unheard just ten years ago, governments going bankrupt.
- A New York Times article that was summarized in the November 11, 2011 issue of The Week magazine reported the United States spends more on health care than what the French spend on everything: education, defense, housing, health care, and more. Thus, our unhealthy health care industry is bigger than the fifth largest economy in the world. And given that we know that Obama Care is likely to add hundreds of billions of dollars to our health care tab, we are likely to move up further in this dubious comparison to the rest of the world's economies.
- Reason magazine is always a great source of political class insanity and their February, 2012 issue did not disappoint. When a technology entrepreneur Amit Gupta found out he had acute leukemia he also found out that he had two good friends. Both friends offered $10,000 of their own money for a donation of genetically compatible bone marrow that could be given to Gupta in his fight against leukemia.
It must be great to have friends like this, ones who would offer $20,000 to incent a stranger to come forward to test if they could help their friend. Unfortunately, their generosity is against the law and exposed themselves to fines and up to five years in prison. The National Organ Transplant Act of 1984 makes it a felony to give or accept "valuable consideration" for any "transplantable organ or tissue."
But bone marrow is not a transplantable organ or tissue, it is like giving a blood transfusion, totally replaceable by the donor. Nevertheless, it is still illegal under the 1984 law. Good friends trying to help out a friend in need and the government makes it illegal. Insanity.
- U.S. News and World Report, reported on December 12, 2011 that "President Barack Obama is pressing his request that Iran return the U.S. surveillance drone captured by the country's armed forces." Talk about insanity. The United States illegally sends a surveillance aircraft over Iran, illegally violating their airspace, which crashes into Iranian territory and the President has the nerve to ask the Iranians to return the craft? And has the irrational expectation that they actually will return it?
If the Iranians had done the same thing to us, illegally violated our airspace with a spy drone, do we think we would return it to them? No chance. We violated international law so for the Iranians, it is "finders keepers, losers weepers." The President looks just plain silly and insane publicly putting forth such a request.
The second part of this insanity is why don't our illegal drones have a self destruct mechanism on board? If the remote controllers of this craft knew it went down in Iranian territory, wouldn't it have made sense to have some kind of way to destroy the craft? We fly them remotely, it should not be a problem to destroy them remotely so that the sensitive technology on board does not fall into unfriendly hands.
Seems crazy not to have that simple self destruct function on these aircraft. If that had happened, the President would not have looked so silly on the international stage asking for the return of the craft.
- On November 16, 2011, the U.S. Treasury officially announced what the final taxpayer cost would likely be for the bailout of General Motors, a bailout that was completely unnecessary. Recall that the government intervened in the GM bankruptcy proceedings, screwing up a business process that should have been an easy, non-taxpayer affecting bankruptcy court action.
As a result of the political class sticking their political noses and the taxpayers' wallets into the proceedings, right now the bailout is likely to cost the American taxpayer about $38.6 billion. This $38.6 billions includes $23.6 billion loss that the Federal government incurred on its $60 billion investment and an additional $15 billion in tax liability that the Federal government "forgave" for GM. This bailout cost every American household about $330 each.
The losses could get better or worse depending on what the government eventually sells its remaining GM stock for but given the stock prices has gone from the mid $30s range in early 2011 to about $20 today, optimism should not be the assumption going forward.
- The following insanity escaped my observation back in the summer but it is still worthwhile to cover for two reasons. First, recall the Obama administration forced through an $800 billion economic stimulus plan a few years ago to try and get the economy rolling. It was not successful since we still have anemic economic growth, high unemployment, and higher underemployment.
Maybe one reason for the failure was what the money was spent on, according to a Senate report called "The Summertime Blues:"
- A half million dollars for new windows at the Mt. St. Helens visitors center in Amboy, Washington. The building has been closed since 2007 and there are no immediate plans to reopen it.
- $6.9 million dollars for repairs to an 1846 brick fort marooned on Dry Tortuga at the end the Florida Keys. Few people can visit this remote national park unless they hire a seaplane or take a four-hour round-trip boat ride.
- Creating a museum in an abandoned train station in Glassboro, NJ, at the cost of $1.2 million.
- $2 million dollars to send researchers from the California Academy of Sciences to islands in the Indian Ocean to study exotic ants.
- A study of dog domestication at Cornell University with a price tag of $296-thousand dollars.
- $141-thousand dollars to send students from Montana State University to China to study dinosaur eggs.
- $762-thousand dollars to create interactive choreography programs at the University of North Carolina. Dancers would wear electronic monitors to analyze their movements.
- $89-thousand dollars to replace sidewalks in Boynton, Oklahoma that were just replaced five years ago. One of them goes nowhere near any houses or businesses and leads directly into a ditch.
Oh yes. Vice President Joe Biden, who was in charge of the stimulus program had this reaction to the "Summertime Blues" report: "The economic initiatives that we took, they are working."
- One last bit of insanity. We have often discussed the fact that the U.S. has hundreds of thousands of military troops unnecessarily deployed all over the world for no purpose except to needlessly burn up taxpayer wealth. And President Obama has recently decided to station 2,500 U.S. troops in the remote reaches of Australia, again for no reason.
North Korea has 1.2 million men in its army so 2,500 Marines, no matter how good they are, are no match for 1.2 million. The Chinese have several million people in their military so our 2,500 will serve no military purpose against them, half way around the world. Japan is highly unlikely to attack us and Australia is an ally. This insanity is totally unnecessary but will cost us more than half a billion dollars a year for this deployment.
Unfortunately, political class insanity comes in many forms and in many costs, all of which is borne by the American taxpayer.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/
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