This One's for Der Trihs, Pay Attention.

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I haven’t posted on here in a while, yet I have been reading through some of the threads on this site and some of the comments have left me quite discouraged for the future of our nation. I directed this thread to user Der Trihs, not to pick on him specifically, but because I consider his ill informed, partisan comments to be emblematic of a significant number of participants on these forums whom I guess could be called the “Obama loyalists”, for lack of a better term. I have witnessed a stunning lack of understanding of even basic principles of economics, a naive faith in public institutions and authority, and a world view and understanding of US history no doubt shaped through decades of propaganda and misinformation. It is quite sad, actually. I am directing this thread towards the education of Der Trihs, yet I would be more than happy to engage with any other members who share his views. The most tragic element of the willful ignorance or blind loyalty to a political party is that those of this mindset will be hurt the most when the most negative repercussions of current government policies come to fruition as this crisis deepens. I hope I can open some eyes and turn a few of you towards the truth.

On “The Opposition to Obama”:

Der Trihs, you seem to parrot the line that all opposition to Obama in the Tea Parties or the grassroots is based upon racism, religious extremism, or xenophobia. You characterize the opposition almost exactly as outlets such as MSNBC do, as far right “extremists”, always “exclusively white, older” and “dangerous, armed, militia members”. Possibly they are “unhinged”, or “domestic terrorists” who could snap at any time and turn into the next Timothy McVeigh. Obviously, most of this is fear mongering and scare tactics to keep otherwise sympathetic people from engaging with the members of these protests. In reality the “opposition” to Obama is very diverse and includes many people who have never in their lives been associated with the Tea Party, such as myself. Are there some of these extreme elements in this country? Certainly. But they are a very small percentage and to the extent that they do exist, I am reminded of a saying by the brilliant and stunningly prescient Trends Forecaster Gerald Celente, who says “When people lose everything and they have nothing left to lose, they lose it.” Meaning, there is a profound anger toward the incumbent politicians that manifests as yelling at town hall meetings and some make a spectacle of themselves and go overboard. I don’t intend to defend every action of the protesters, but the reasons for the anger is very valid and have nothing to do with the color of the President’s skin.

I don’t know you Der Trihs, but I will wager that you have never attended a Tea Party rally. You likely have never even talked to a participant. To make such blanket statements and accusations against so many people is beyond irresponsible. You should know by now that the media’s portrayal of reality is frequently not accurate. I have made a point to attend a few rallies and protests to gauge for sure the tenor of the political climate in 2010. I live in California and yes there are Tea Party protests in California. A few things that I noticed:

  1. One protest was at least 15% African American. Another rally I witnessed many Hispanic voters in the ranks. Yet another was filled with many college age protesters signifying a significant youth demographic.

  2. There was very little mention of Obama specifically. I heard much about Congress, some complaints about the spending and plenty of blame for both parties.

  3. The tone was distinctly Libertarian. I heard no social conservative issues like gay marriage, abortion, religious issues, or anything of the sort. It was focussed on balancing the budget, cutting spending, ending the bailouts, and following the Constitution. I heard some complaints about the Federal Reserve. I even heard some complaints about the war in Afghanistan and of our foreign policy in general. There was also a distinct opinion that Obama’s economic policy has failed and will continue to fail going forward.

  4. Of the protests I have attended and some that family members and relatives have attended (in different States), I know that they are not affiliated in any way with the Republican Party. Obviously the GOP will try to woo these voters, but many operationally are more interested in defeating the establishment backed candidates and running on their own platform. There are even Tea Party candidates running as Independents.

  5. Sarah Palin’s popularity is VASTLY overestimated by the mainstream media. They are trying to create a excitement for her that for the most part doesn’t exist in most parts of the country. Even those that I talked to who liked her were happy for her to remain a sort of conservative “celebrity” rather than someone they considered a serious person for higher office. Nobody thinks she is qualified. The people I heard mentioned were Ron Paul, some economic intellectuals like Mises and Hayek, as well as founders such as Thomas Paine, Jefferson, and Madison. I feel like Palin is designed to feed into this media storyline that portrays very simple minded, anti intellectual social conservatives as the main people in this movement.

  6. I came away convinced that by 2012 this “revolution” will expand beyond the confines of “conservatism” and even the tea party label to become broader and more inclusive. The reality on the ground is so far from what you may have seen on tv that it can be staggering.
    Some rallies in some parts of the country include some of the more standard conservative voices in the country to be sure. But there are people who don’t attend any of these rallies who are upset and would easily join a third party (or movement) that isn’t attached to the stigma associated with the Republican Party. This is what is happening. As I said before, I am not a Tea Party member. I am not a conservative.

I am a rationalist, an anti war libertarian, and an intellectual. A seeker of truth.

The truth is that we are living in a fantasy world. Our welfare/entitlement programs are insolvent. Within a couple of decades they will face a shortfall of tens of trillions of dollars. The housing bubble is bursting and the dollar is collapsing. We are borrowing billions from China everyday to continue our extravagance. We are escalating our commitments in Afghanistan, bombing Pakistan and threatening Iran. We’ve known for a while that we cannot fund our government and its obligations, yet all our political class can come up with is more of the same.

I find it funny in a depressing sort of way that those who really have a problem with the above, those who see us speeding towards the cliff and advocate that we change directions, that is, really cut spending and rethink the role of government in modern society in relation to fiscal reality and common sense are considered not just right wing, but far right, fringe, lunatic and crazy. Thats what I have noticed. That is the dominant theme in the grassroots in this country right now. There are many differences between grassroots groups in race, age, religion, state, etc. The unifying theme is concern about the debt, the unfunded obligations and a recognition of the need to have a smaller government in light of the ongoing financial crisis. The day of reckoning is here and people are recognizing this.

Yet Der Trihs, you, with a broad brush, label all these people this way (from another thread):

And:

I sincerely hope that this does not truly reflect your intellect, but rather is a manifestation of subconscious disappointment with Obama and is your egos way of protecting yourself from the shame of admitting that you were suckered into believing in the so called “change” candidate. Even if this is not the case, you should learn to lay off the destructive red state/blue state bickering and articulate your views with more care, more thoughtfulness.

I have read many of your comments Der Trihs, and you have responded to my posts in the past. I find it fascinating to understand how one comes to believe the things your apparently believe, and what education or societal stimuli have shaped your world view. From my perspective, through my years of research and delving deeply into the various subjects, I can see very clearly the devastating effects of government policy and the culmination of the disastrous modern trend of runaway government spending, endless stimulus, globalization and the impoverishing of the poor and middle classes through inflation and debt. It saddens me to see someone so obviously in the dark about the nature of the times we live in. Perhaps you could lay off the knee jerk partisan stuff and enlighten us on your more broad understanding of political issues and your educational background? I’m sure it would be fascinating.

For now, however, school is in session. I want to raise a few issues for you (and others who think like you do) and I am looking forward to your feedback.
Lesson 1: “Big” Government vs “Limited” Government:

It seems to me that those who could be considered loyal liberals scoff at anyone who seems to be anti government or believes in small government, as if this is such an absurd point of view that it barely merits discussion at all. The perspective that perhaps we should shrink government spending or cut back in an effort to regain solvency is hardly broached in liberal circles I know of. The discussion is the need to provide “Universal” health care to everyone who needs it, and the desire to implement new social programs and agencies to combat any number of perceived threats or societal problems. Although there may be a token discussion on a few things that would merit cutting (like the Defense Budget), hardly ever is the discussion on cutting spending overall. In fact, from my discussions with many of my liberal friends, I have come to the conclusion that:

The term “Progressive” means year by year expansion of government power and authority over all aspect of society and that any resistance or desire to “roll back” in a significant manner this power is considered a threat to this mindset.

It is a fallacious argument to equate expanding government power with “progress”. This is absurd. Progress comes through the evolution of culture and principles of the people toward a more enlightened, kinder society than the one that came before. Many times we have not progressed, but rather devolved as a society. For example, our standards of education have dropped drastically in the last fifty years. Health care also has gotten worse. We have obviously not “progressed” despite dramatic increases in government control over these two areas.

I feel like libertarianism is the truly progressive movement that seeks to progress humanity out of the dark ages of totalitarianism and authoritarianism into the light of human liberty, equal justice, non violence, tolerance, and egalitarianism.

In terms of “Big” Government vs “Limited” Government, I propose the followed two principles all rational beings should be able to acknowledge:

1. No matter what one thinks of the role of government, the functions that it takes on must be fully funded without dangerous levels of debt and inflation.

And:

2. We recognize government as a potential threat to liberty, therefore we “limit” government to a set of explicit functions (no matter what they are or how many) that they may engage in. We are vigilant in the enforcement of these limits.

How could anyone disagree with these two principles? The first is the one I want to explore, because anyone who knows basic arithmetic can easily figure out that our government is completely insolvent and we have no choice but to cut spending drastically, including “sacred cows” like Medicare and Social Security.

As to the second point, the document that is supposed to limit the federal government is called the Constitution. We The People, being sovereign free individuals, delegate certain limited authority and responsibilities to a central government. Everything not expressly delegated, is reserved to the states or to the people. Now, you could argue that we need to change the Constitution. If you desire to have government take on new and expanded functions, we must amend the Constitution. There is no way around it. Our government should evolve slowly and deliberately, with much caution and respect for human liberty. This is how our system is supposed to operate.

As far as the debt is concerned, I want to give you a few numbers to think over:

The National Debt = $13,330,000,000,000 (Thats Thirteen Trillion Three Hundred and Thirty Billion)

Look at this graph of the monetary base over time (number of dollars in circulation):

http://www.chartingstocks.net/wp-content/uploads/2009/03/money-supply.gif
Now, consider the rate of increase in the national debt over the last few decades:

When Nixon was sworn in (1969), the national debt was: $354,000,000,000
When Reagan was sworn in (1980), the national debt was: $908,000,000,000
When Clinton was sworn in (1992), the national debt was: $4,065,000,000,000
When G.W. Bush was sworn in (2001), the national debt was: $5,760,000,000,000
When Barack Obama was sworn in (2009), the national debt was: $10,124,000,000,000
Now, in eighteen months the national debt has gone up by more than three trillion dollars! The numbers aren’t working. The early stages of hyperinflation are here. Don’t you see that the rate of increase has been exponential? The Federal Reserve has more than doubled the money supply since 2008.

The system is being held together only by the fact that many don’t understand how bad things really are, so a residual confidence remains in the system.

What you need to understand, Der Trihs, is this:

The era where the American people could be sold on the idea of massive government interventions like The New Deal or The Great Society are finished. Nobody believes in the promises of politicians any more. The era of frugality and government reform (meaning cutting spending drastically) is here to stay. That is what the electorate wants.

The liberal, Keynesian arguments that deficits don’t matter and we could afford the welfare state and entitlements are being exposed. The people with credibility are the Austrian economists and those who warned of the long term consequences of the mentality that we could create wealth out of thin air and give everyone a house and health care are being vindicated.

So, regardless of whether you and I would agree on exactly what the government should be involved in, you should see that we should cut back immediately, balance the budget, get back to a solid fiscal standing, and restore solid economic growth. Then we can have our debates within the context of reality.

Because, really, isn’t it wrong to promise people a government service that you know you won’t be able to deliver?

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Lesson 2: Economics and Central Banking

Building on what we discussed in lesson 1, we must understand the means used to finance big government. The answer comes through the understanding of fractional reserve banking and the Federal Reserve system.

The founders argued persuasively and passionately against the creation of a central bank. They knew that for the Republic to survive and freedom to be preserved for future generations, the bankers must not be allowed to take control of the economy and the government. Literally, entire nations rise and fall based on the quality of their money. John Adams wrote to Thomas Jefferson in 1787 and said this:

“All the perplexities, confusions, and distress in America, arise, not from defects in their Constitution or Confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.”

The Federal Reserve system is the creator of economic booms and the culprit in the eventual downturn. The Fed artificially sets interest rates. Banks are required to keep a certain fraction of their deposits on withdrawal, as opposed to being lent out, to be available for customer withdrawal. Banks frequently find themselves below the the reserve requirement set by the Fed if they have made a lot of loans or if a large number of people have withdrawn funds. Banks borrow from each other when they need additional reserves. When there is too much demand from banks looking to borrow and too little supply from banks willing to lend, the federal funds rate rises. The Fed always wants to prevent the federal funds rate from increasing, therefore it takes steps to prevent this. It pushes the rate down by buying bonds from the banks. The banks have more money and therefore more reserves to lend to banks that need it.

Where do you think the Fed gets the money to buy the bonds? Thats right, it simply creates the money out of thin air, writing checks to itself and giving them to the banks. Thanks to the Fed’s purchase of bonds, the banks now have excess reserves they can lend.

Whens banks claim to have money on deposit and they don’t, this is called fraud. It should be a crime. Yet the Fed participates and encourages fraud. This creates the moral hazard and creates the bubbles that we see. In a free market, the banks are required to have one hundred percent reserves and growth comes through savings and investment. The Fed is interfering with the natural and healthy market mechanism which would prevent excess borrowing and the creation of a credit bubble. When there is too much demand from banks willing to borrow and too little supply, they shouldn’t be able to lend money. Period.

The economic problems associated with the Fed’s interventions are many. It decreases the value of the dollar, thereby making people poorer. In the long term, the apparent stimulus to the economy is harmful as well, as the phony prosperity creates conditions for a necessary recession or depression down the road. People are tricked into the stock market, tricked into thinking housing prices will rise forever, and tricked into a false sense of security driven by phony government statistics and Fed propaganda.

Furthermore, this monetary system enriches the business class and the cronies in Washington while it impoverishes the poor and middle classes. As money is created, those that get to use the money first do so before prices have risen. They score a windfall. When these dollars trickle down to most people, prices have risen, while the average person still has the same salary. This is known as the Cantillon effect of inflation, after brilliant economist Richard Cantillon. The average person is silently robbed through this process, and none can figure out why it is becoming harder and harder to make ends meet year after year.

None of this is happening by accident. There is an interesting correlation between the rise of central banking in this country and the so-called “Progressive” movement in the early part of the 20th Century.

Der Trihs, you, like many liberals rightly condemn monopolization and cartelization in business. Yet, that is exactly the process by which the plans were laid for the Federal Reserve central bank. Throughout history the power to control the money has been the most sought after goal that man could achieve. It was said by Mayer Amschel Bauer Rothschild: “Give me control of a nation’s money and I care not who makes it’s laws”. Therefore if one wanted to control a nations government and politicians, it must simply control the purse strings.

There was talk of the formation of a central bank dating back to the mid 19th century. In fact a central bank was set up twice in our early history, only to be struck down by a vigilant population and politicians of conscience who could recall the warnings of the founders. For most of our early history, our money was denominated in Gold, just as the founders intended. As we all know, our founders spoke eloquently about liberty, the rule of law, and gave us our Constitution and Bill of Rights. But if one of their most prophetic warnings could be summed up succinctly it would be: “Don’t let the bankers take over the Country.” Unfortunately, that is exactly what has happened.

The transition to this new economic order did not happen overnight, not even right after the creation of the Federal Reserve. It took a few decades. I consider the most significant period of our history to have occurred from 1910 to World War II. During this period of time we abandoned the Gold Standard, created a central bank, had two bloody and disastrous World Wars, suffered a fifteen year depression caused by the Fed, and ushered in a new, fraudulent form of economics called Keynesian economics. This new paradigm sowed the seeds of economic ruin, as any true student of history could tell you. No nation survives long on fiat money.

There was a heavy propaganda campaign undertaken by the bankers dating back to the end of the 19th century, attempting to sell the notion of a central bank to the American People. Paul and Felix Warburg and a group of international bankers located in Europe were the primary private institutions that sought to gain from this coup that they was being planned. Paul and Felix Warburg wined and dined a Senator named Nelson Aldridge, who had ties to the Rockefeller family for two years. In 1910, in a secret meeting in Jekkyl Island, off the coast of Georgia, Warburg and Aldrich and many others drafted the Federal Reserve Act. Soon afterwards they attempted to push this piece of legislation through under the name The Aldrich Federal Reserve Act. However, since Nelson Aldrich had such well known close ties to the international bankers, it was voted down under the leadership of President Taft.

Following this setback, they redid it and waited for the opportune moment. During the 1912 Presidential elections, the international bankers got behind and financed Woodrow Wilson to beat Taft, given his allegiance to their cause. Woodrow Wilson’s sole purpose as president to these men was his willingness to allow them to create a central bank. Thus, in 1913, on December 22, on the eave of the Christmas Recess, the Federal Reserve Act was brought before Congress. The members, wanting to get home to see their families pushed it through without much debate.

Woodrow Wilson later grew to regret his actions in allowing this sellout to take place under his watch, in the later part of the decade, he wrote:

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”

The private central bankers had created a cartel to protect their profits and had gained control of the United States economy to manage as they saw fit. Beyond the Warburgs, other influential European banking families, including the Rothschilds and the Rockefellers were involved in this scheme. The Federal Reserve was not ever designed to benefit the populations of the people at large, nor to improve “stability” in the economy. It was to allow private banking interests to get wealthy (or wealthier) by collecting interest on its issuance of credit to our nation.

The more our nation borrows, the more money these private bankers collect on interest. The first thing these bankers did was get America involved in World War 1, in order to charge more interest. The catalyst for our involvement was a lie about the sinking of the Lusitania. Many scholars agree that World War 1 was one of the most avoidable and unnecessary wars in history. And sadly, our involvement likely created the conditions for Hitler to come to power and the continuation of this war twenty years later.

Following this war, the roaring twenties saw reasonable economic growth, however the truth was the Federal Reserve was creating a bubble and the conditions for a major correction that would follow. The paradigm of continuous booms and busts and federal intervention and subversion of healthy market mechanisms was here to stay.

We all know about the stock market crash of 1929 and the Great Depression that followed. Of note is that, like today, it was the “free” market and the Gold Standard that was blamed, rather than the Federal Reserve itself. And, like today, the people who asserted these things did not see the crisis coming.

Ludwig von Mises, the great Austrian economist, was one of the few who warned of the market crash of '29 years before it happened:

Following the crisis our government did everything to prevent a correction. One of the worst things it did was to confiscate the peoples gold, thereby robbing them of their last remaining true wealth. Obviously the policies FDR pursued failed because the Depression dragged on and on. Even a second World War failed to lift us out of the crisis. We didn’t experience complete recovery until the late 40’s. At that point the spending went down two thirds and taxes went down one third. Kinda ironic that the one thing that we’re never supposed to do in a recession or depression (according to the Keynesians) was the one thing the facilitated a true recovery. Yet, the lasting harm from this period was that we instituted bad economic theories that have persisted despite all logic and reason.

The next significant event in economics was the breakdown of the Bretton Woods agreement and the closing of the gold window. Nixon, in 1971, closed the gold window and ever since we have been living under the first completely fiat worldwide monetary system in history. In case you didn’t know, closing the gold window meant that foreigners could no longer exchange the US dollar for gold.

The timetable for the devaluation of our currency goes like this:

From 1913 to 1933: People could still convert dollars for gold if they desired, both at home and abroad. So, we still technically had a gold standard, although the Federal Reserve was continually interfering in our markets and causing plenty of problems.

From 1933 to 1971: After the confiscation of the peoples gold, US citizens could no longer convert their money to gold. However, foreigners could. So their was a lingering link to gold that still restricted government spending to a degree.

From 1971 to Present: After Nixon closed the gold window there has been no link to gold and we have been living on a completely fiat currency ever since. This is incredibly dangerous. Many at that time knew that the end of the system was certain, because no country can exist for long on such a fraudulent system of money. Ron Paul, in fact, started his political career following this decision by Nixon, knowing that economic problems would be severe as a result.

I’m outta here.

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I think most of us sense that this country is not the great country it used to be. We don’t have the same type of prosperity. This sense is bi partisan. Like I said a little earlier, nations rise and fall based on the quality of their money. If you refer back to Lesson 1 you will see the graph of government spending, the national debt and the monetary base. You will witness a profound spike since 1971 that has been exponential. What happens in nations throughout history when the soundness of a currency is lost (no backing to the money), the value is deluded until the currency is completely worthless.

Think about this:

**From the Revolution to 1913, the value of the dollar went up 7%.

From 1913 to now, the value of the dollar went down 96%!**

When the dollar goes down, prices go up and the people become poorer. Like I said earlier, wealth is transferred from the poor to the wealthy. When we have a completely fiat currency, instead of working hard and being entrepreneurial, our businessmen (not all, of course) go to Washington looking for a handout. Since wealth is not earned, but rather “created” (through a printing press) special interests line up to get a hold of some of this new money. This breads corruption and corporatism.

Like Thomas Jefferson said:

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”

Does this sound familiar? Isn’t this what we have seen over the last few decades?

Lesson 3: The Creation of Wealth vs The Redistribution of Wealth

Building on what we discussed in Lesson 2, how do you think the fraudulent monetary system called the Federal Reserve system impacts a governments ability to provide the entitlements and social welfare that so many Progressives treasure? When there is no limit on the creation of money, politicians can promise anything to the people. Politically motivated handouts become the norm. Earmarks for certain districts, corporate welfare and much more run rampant.

However, I want to focus on what Democrats tend to see as the “Golden age” of Progressivism, from roughly the thirties through the sixties. This era saw the creation of massive new social welfare institutions. Regardless of name (The New Deal, The Great Society), these programs included Medicare, Social Security, various public works programs, and the War on Poverty and many more. Like I said earlier, liberals tend to view new government interventions such as these in terms of “progress”. However, given the fraudulent way these programs are financed, does this cause you to change your perspective a bit?

During the same time we are being sold these new social programs by politicians, our monetary system is impoverishing people and enriching the business class and their buddies. In fact, if looked at objectively, what is being taken from us in civil liberties, and the purchasing power of our money greatly exceeds any crumbs certain individuals may get back from the government.

I’ll give you an example. Our government and treasury fight very hard to keep hidden the true rate of inflation from the American people. The reason they do this is so that benefits they pay out don’t have to be adjusted to the true rate of inflation. That means that in the absence of inflation AND social welfare programs those on welfare currently would be better off. People on fixed incomes are being screwed. Not to mention the notion that most of the welfare is actually going to corporations and the rich.

Der Trihs, the thing you need to understand is that if we had a true balanced budget and sound money with low inflation, by definition, our government would have to be much smaller. The people would be much wealthier. Its not that government theoretically couldn’t provide social welfare, or wage war or any number of other things. The point is that the funding would be very limited without prohibitively high taxes.

I would personally prefer that people were wealthy enough that they wouldn’t need assistance. Which would happen if we had sound money and a healthy economy.

Think about this. The two presidents most liberals look up to are FDR and Lyndon Johnson. Ask yourself these two questions:
What if FDR, instead of pursuing New Deal policies, cut government spending and allowed the market correction to occur and the crisis was over in three years and we had a robust recovery? What if FDR allowed people to keep their gold and did everything possible to keep us out of another world war?

Would that be a better outcome, in your mind, than the enduring legacy of Social Security? This is not a crazy question, many esteemed economic minds and historians postulate that had FDR not pursued his disastrous policies the Great Depression would have lasted no more than three to four years.

What if Lyndon Johnson, instead of pursuing his Great Society, got us out of the Vietnam War? What if instead of waging a war on poverty (how’s that one working out?), he instead waged a war on the military industrial complex and the profiteering that goes on there? What if he got serious about curbing inflation and gained international confidence in our dollar?

In fact the inflation and destruction of money had been so rampant during this era of ambitious presidents with Utopian ideas, that Nixon had to sever all ties of the dollar to gold, its value had dropped so precipitously (prompting a more precipitous drop since).

Rather than giving us something for free, these programs simply accelerated our bankruptcy and increasing public debt. No matter how much you care about these programs, we cannot afford them. Period.

The situation is dire. Jose Pinera, Chile’s former Labor and Social Security Minister, a few decades ago privatized Chile’s entitlement system. Following his advice about unfunded liabilities, they ended their entitlement system, swallowing the bitter pill and after a lot of pain, they managed to get out of the hole. Now he gives us this advice:

“$100 trillion is the present value of what Americans will have one way or another to pay, unless they default on their obligation to their citizens. And that is the future, and I am extremely worried because you are like passengers in the Titanic. You see the Titanic is going toward the iceberg of aging populations but populations they feel entitled to all these huge benefits that the politicans have promised the people, but they have not funded the benefits for the future. So how are you going to pay them? That is the big issue, the big domestic problem facing America.”

And this:

“The problem is the entitlement state. The problem is that there is a gigantic disconnect between what the people want the government to pay them in the future, in health, pension, and what the people want to pay in tax. And because the entitlement state is based on promises for the future, you don’t have to pay it today, this is growing, because to win elections politicians offer benefits to people that would be paid to people in the future. So this big hole is not only a problem in America, it’s exactly the same problem in Greece today, in Southern Europen, in France, in Germany. The west will go bankrupt unless you reform deeply the entitlement state.”

This is sound advice. More and more of the country is starting to see this. Der Trihs, why don’t you get on the bandwagon? Are you so stubborn as to ignore that which is right in front of your eyes?

Lesson 4: Monopoly and the Role of Regulation

Another problem with the modern day left is their unwillingness to apply the same rules to both the private sector and the government sector. For example, many will push for increased gun control on private citizens, while at the same time raising no objection to the increase in firepower our local law enforcement and government people have. Many liberals rightly object when corporations and businesses gain a monopoly, yet are silent on the many government monopolies where consumers have no choice. If you are a consistent and honest person, you have to agree with the following:

If government is there to help me and serve me, they should never prevent me from seeking an alternative source for a service they provide. Furthermore, as a free citizen, I should never be forced into a government program. I should be allowed to opt out.

And:

I oppose government monopoly just as much as I oppose private business monopoly.
That last point is key. How exactly do monopolies form? Monopolies in a free market are traditionally very rare and almost never occur. Monopolies occur as a result of the formation of cartels and through the assistance of government in hurting their competitors. Monopolies traditionally require government involvement. Liberals claim to care about the poor and the middle class, right? Then I would assert the following:

The best scenario for most people in the acquisition of goods and services is to have many choices from a variety of competitors. They should never be coerced into having to pay for an inferior service or having the government arbitrarily limiting their choices. We should not permit government monopolies.

Why on earth are so many liberals claiming that so-called “Universal” health care is a stated goal, given that assuredly that would amount to granting a government monopoly over healthcare? And how can we tolerate the current health care bill which compels me to purchase health insurance from a private corporations whether I want or need it?

There is a knee jerk distrust of Markets by some liberals that is unjust and frankly ridiculous.

This manifests in the debate over the role of regulation. In many liberals minds, government serves as a altruistic entity which curbs the “excesses” of the “unfettered” free market. For those not well versed in Free Market economics, this ignorance is understandable. Whenever there is any corporate abuse or crime, the claim is we “deregulated” and we just need more federal regulators running around in Washington and these things will never happen again.

Regulation is a term that merits clarification. I don’t want corporations to take over our government. But regulation frequently facilitates Corporatism, rather than preventing it.

The reason being that Corporations frequently lobby for more regulations, and they usually get their wish. The reason is that they always are able to find or create loopholes in the complex regulatory code that allows them to continue with business as usual, yet hurts or destroys their competitors. This is called Regulatory Capture. It is common practice in this country.

Over the last forty or fifty years, the trend has been like this:

Somebody points out an instance of corporate abuse, which prompts the calls for more regulation. The very large corporate entity lobbies and creates loopholes in the legislation that allows them to continue on as usual. However the smaller business, unable to jump through the the hoops required by the new legislation, frequently go out of business. And the honest businessmen are forced to move overseas to more business friendly nations.

A few decades of this and we have the opposite of the intended effect. The large corporate criminals are still running the show and small businesses and honest businessmen are punished. We have more than one hundred and fifty thousand pages of regulations. And they are apparently failing! (at least in terms of holding big business and banks accountable).

We need to get rid of most of these regulations in an effort to make our country more friendly to small business and entrepreneurs.

I will pose a few questions to you:

  1. What do you think about the regulations that are clearly benefiting corporations and not protecting us? Should we get rid of these harmful regulations?

  2. Is there any aspect of human behavior that the government should be prohibited from regulating? What would that be?
    Since most regulations don’t help the situation, rather they harm the lower and middle classes, the admirable goal of protecting people from corporate abuse needs to happen in a different manner.

The government role in the marketplace should be:

  1. “Regulate” the market, meaning make sure there is a free market and no politicians are being bought off, there is no regulatory capture and government interference is kept to a minimum.

  2. Prosecute fraud and strive to have equal justice under the law. Prosecute any and all criminal activity.

  3. Make sure in all markets there is free entry, meaning a small business has no obstacles to competing with much larger firms. Make sure the rules are equal for everyone.

  4. Enforce contracts. Provide a court system for resolving disputes. Allow any and all bankruptcies to occur. Bankruptcy is good for the market, in economics it is called “creative destruction”.

  5. And of course, remove all subsidies and special favors benefiting one class of business at the expense of another.
    If we did this, we could easily prevent corporate crime, while maintaining a truly FREE market and limiting government intervention. Furthermore, we would create incentives for small business to thrive and bring back that entrepreneurial spirit once again.

So, next time you hear someone say that lack of regulation caused our financial crises, you can correct them by saying that, in fact the Federal Reserve system caused it and we need to get rid of the bad regulation in order to facilitate a true recovery.

Besides, why on earth would you place so much faith on regulators and bureaucrats?
Conclusion:

I could certainly provide further lessons for you all to contemplate, but I think I have provided plenty for now. I will allow these truths to sink in. I want to make the point that I purposely restricted my criticism to the ideology of Obama supporters because the Democrats are in power at the moment. Anyone who is remotely familiar with my previous posts knows I don’t have any respect for the Republicans either. To get into the harm Reagan, Bush I and Bush II have caused to our country would require a lengthy essay to scratch the surface. Suffice to say, the ideas of “limited” government, fiscal responsibility and personal liberties have not had a home in either party for decades. We must separate the ideologies from the political parties.

So, to Der Trihs, and any other that has so much invested in the Progressive theories that have been drilled into your head since you were young, I ask you to rethink these concepts about the wisdom of government solving our problems in light of reality. As I have shown in this post, the Progressive Utopias promised by your idols FDR and Lyndon Johnson are disappearing in a cloud of debt. The system we have been living with is no longer viable. This economic order we have been living with will need replacing and in the process, people are going to learn how to get by without government assistance whether they like it or not. Because all the promises made will be exposed for the lies that they are. A major realignment is taking place in this country, between the rationalists and realists vs those who will stubbornly cling to this old concept of government as savior mentality. Those days are over. It will be apparent to you sooner rather than later. Things may get ugly.

So, Der Trihs and all others who claim that the opposition to Obama is filled with uneducated hillbillies and racists, I am asking you to confront the true intellectual challenge to authoritarianism and collectivism. It is easy to look down on Sarah Palin and the nutcases that MSNBC finds at the fringes of protests. It requires no intellectual effort, you feel good about yourself and think to yourself “Thats the opposition”.

I would also be curious to learn where you get your news from. From my experience, people are conditioned through the media construct of left vs right to believe things that are untrue and to take sides in a political fight where they will always come out as the loser. It is impossible for me to undo all this programming and propaganda in one post (or many posts), so allow me to suggest some resources and individuals you may follow to become more astute as well as cautioning you from looking at certain mainstream outlets that will not inform you.
**Avoid these political media outlets: **

New York Times
Newsweek
Washington Post
Time Magazine
Wall Street Journal
Fox News
MSNBC
CNN
ABC News
NPR
There are others, but don’t watch or read the above and think you are being informed.

Individuals and Outlets You Should Follow:

Russia Today
Gerald Celente
Ron Paul
Peter Schiff
Tom Woods
Marc Faber
Jim Rogers
Lew Rockwell

Websites You Should Visit:

http:/Mises.org
http://Wikileaks.org
http://breakthematrix.com/
www.Rense.com

Plus, there is so much economics literature and history you should read, but the above will give you a head start in becoming more aware.

I want to stress that this thread is open to everyone, not just Der Trihs. Please read this whole post so we can have a reasonable discussion. I am looking forward to everyone’s response.

wait for me!!!

jrodefeld, try this again without the Der Trihs angle. If you want to quote him, fine. Directing the entire thread at him and making a series of negative remarks is not fine. You’ve poisoned the well too thoroughly for this thread to work and I think from here it’s just going to be provocations between you and Der Trihs. Make some quick edits to your OP and come up with a new thread title. I’m locking this.

EDIT: If you want to criticize Der Trihs individually - which is not your stated intention - you should post in The BBQ Pit.