Posts Tagged ‘Federal government of the United States’

The Fisher King

July 23, 2017

The Fisher King is a figure in Arthurian legend. He is the guardian of the Holy Grail who has been wounded in the foot and cannot discharge his duties as king of the land he rules. Many scholars believe that the foot or leg is an euphemism for a wound in the groin and that the king is impotent. Whatever the case, according the the legend, because the Fisher King is barren and impotent, so is the land he rules. The health of the land depends on the health or virtue of its king.

This happens to be a motif found in many places in mythology, folklore, and political propaganda. There seems to be a strong need to believe that a strong and virtuous king will have a flourishing kingdom, while the kingdom of a weak or evil king will be desolate. The Chinese belief in the Mandate of Heaven held that the prosperity of the Empire was directly dependent on the virtue of the Emperor. If China was doing well, the Emperor must be good. If there were natural disasters or economic catastrophe, than the Emperor must be at fault somewhere. In the Old Testament there is an explicit link between the devotion of the kings of Israel and Judah and the welfare of the kingdom. It makes sense that if the king or emperor is the representative of God or the gods and is not doing a good job then Heaven might signal its displeasure by causing natural disasters.

One might think in our more modern world in which most countries are republics, such superstitions would be a thing of the past. That does not seem to be the case. It is true that people no longer ascribe earthquakes or hurricanes to the faults of our political leaders, but we do have a way of assuming that they have far more influence over the affairs of the country, especially over the economy, than they actually do. Here is an example from Sean Hannity.

President Donald Trump has made the United States more than $4 trillion richer since taking office last January, but you wouldn’t know that from watching or reading the mainstream press, writes Fox’s Stuart Varney.

As the destroy-Trump media continues to obsess over Russia-Trump conspiracy theories, the President has made good on his campaign promise to unleash the American worker and get the US economy back on track.

Since the President’s inauguration, Trump has added roughly $4.1 trillion to the nation’s overall wealth, affecting all Americans with a 401k, an IRA, a savings account, loans, stocks; essentially anyone with “a dime in the market.”

President Trump did no such thing. He does not have the power to add $4.1 trillion to the economy. It is possible that the policies he supports will encourage economic growth, but six months is far too early for any presidential policies to take effect. Of course, a good deal of economics is psychology. It is likely that if the president is perceived as pro-business, businesses will be more inclined to expand, believing that the economy will improve, creating a self fulfilling expectation. On the other hand, if the president keeps talking about spreading the wealth around, businesses will play it safe, anticipating an economic downturn, that their actions will help precipitate. I think that if Bernie Sanders had been elected president, we would be going into a deep recession. We can give Trump credit for inspiring optimism, but not for any magical powers.

Here is a more egregious example from a singer named Lana Del Rey

I feel less safe than I did when Obama was president. When you have a leader at the top of the pyramid who is casually being loud and funny about things like that, it’s brought up character defects in people who already have the propensity to be violent towards women. I saw it right away in L.A. Walking down the street, people would just say things to you that I had never heard.

I definitely changed my visuals on my tour videos. I’m not going to have the American flag waving while I’m singing “Born to Die.” It’s not going to happen. I’d rather have static. It’s a transitional period, and I’m super aware of that. I think it would be inappropriate to be in France with an American flag. It would feel weird to me now—it didn’t feel weird in 2013.

Women started to feel less safe under this administration instantly. What if they take away Planned Parenthood? What if we can’t get birth control?

This is precisely the same country in 2017 as it was in 2015. The only difference is that the person who is president has changed. If Ms. Lane is not as proud of her country now as when Obama was president, than she is not really very proud of her country at all. Trump cannot make the streets of Los Angeles more or less dangerous. He has no control over people’s character defects. He cannot take Planned Parenthood away. Even if Congress should cut Planned Parenthood’s federal funding, which they should, Planned Parenthood has other sources of revenue. Trump cannot ban birth control. She is ascribing to Trump powers that no president has.

Why do we do this, assume that our political leaders have greater power over events than they actually do? Part of the reason must be that this is what they want us to think. How many politicians running for office criticize their opponent’s handling of the economy? How many politicians boast of the economic growth that occurred during their time in office? They might as well be bragging about how good the weather was. Indeed, the whole idea behind the global warming/climate change alarmism is that national and international governments can change the climate.

Whatever the reason for this kind of thinking, we need to get over it. The president does not run the country. We do. . President Trump cannot make America great again, though he can lead the effort. It is up to each one of us to make this country a better place.

 

 

Attacking the Messenger

January 26, 2013
English: Gaius Aurelius Valerius Diocletianus ...

At least he tried to solve his country’s problems. (Photo credit: Wikipedia)

That may be what the government is doing with the credit rating agencies if Tyler Durden  is right in this post he wrote at Zero Hedge.

Early in the 4th century, Emperor Diocletian issued an infamous decree to control spiraling wages and prices in the rapidly deteriorating Roman Empire.

As part of his edict, Diocletian commanded that any merchant or customer caught violating the new price structures would be put to death.

This is an important lesson from history, and a trend that has been repeated numerous times. When nations are in terminal economic decline, governments will stop at nothing to keep the party going just a little bit longer.

I thought of Diocletian’s desperation a few days ago when I read about the recent sanctions imposed on US rating agency Egan-Jones. It’s a similar story–

For years, major rating agencies (S&P, Moody’s, and Fitch) have championed the outright fraud of our financial system by pinning pristine credit ratings on insolvent governments and their heavily inflated currencies.

In doing so, the rating agencies are effectively claiming that the greatest debtor that has ever existed in the history of the world is nearly ‘risk-free’.

Clearly this is a ridiculous assertion. With a debt level over 100% of GDP, the US is so broke that the government must borrow money just to pay interest on the money it’s already borrowed. They’ve lost over a trillion dollars a year since 2008, yet they still spend money on things like drones and body scanners. It’s crazy.

As with any good scam, the government must maintain public confidence.  The moment someone says ‘the Emperor has no clothes,’ that shallow, fragile confidence will come crashing down and expose the scam. Dissent must be vigorously and swiftly pursued.

So when S&P finally downgraded the US one notch in August 2011, the SEC and Justice Department announced that S&P was under investigation, just two weeks later.

Egan-Jones, a smaller rating agency, has been even more aggressive, downgrading the US credit rating three times in 18 months. And while the federal government may not have imposed Diocletian’s death penalty, they are just as willing to squash dissent.

In a country that churns out thousands of pages of new regulations each week, it’s easy to find a reason to go after someone. As you read this letter, in fact, you are probably in violation of at least a dozen regulatory offenses.

In the case of Egan-Jones, the SEC brought administrative action against the agency within two weeks of their second downgrade. And a few days ago, the case was settled.

I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth.

The lesson here is obvious. Just as in Roman times, bankrupt nations today will stop at nothing to keep up the scam just a little bit longer.

Given that all this is happening at a time when Congress is voting to suspend the debt ceiling entirely, these actions are the clearest sign yet of just how desperate the government has become.

Could the warning signs be any more obvious?

His knowledge of ancient history is a little off. The Roman Empire lasted another one hundred seventy years in the west and more than a thousand years in the east, so Diocletian’s reign hardly marked a terminal decline of the Empire. It is easy for us to consider Diocletian as a sort of villain or tyrant because of the harshness of some of his actions and the fact that he enlarged the Roman government and made it more autocratic. In fact, Diocletian ended the crisis of the third century with its continuing civil wars between short-lived emperors and the near total collapse of the Roman economy. Diocletian saw that the old system of pretending that Rome was still a republic and the Emperor just another citizen made it too easy for emperors to be overthrown. Although some of his reforms, like the Edict of Maximum Prices, were ill-advised, Diocletian did manage to stabilize the economy, in part by reverting to barter. He defeated Rome’s enemies and secured the borders. He also devised a system of regular succession for Emperors in order to prevent future civil wars. The plan was ignored by his successors, but he can hardly be blamed for that.

Tyler Durden is absolutely correct about our financial situation, though. We are in a lot of trouble, and no one seems to be willing to acknowledge the problem, much less try to solve it. We simply cannot continue to spend a trillion dollars more than we take in every single year. Contrary to what President Obama may think, we do have a spending problem, and a lot of it is his fault.

Which is more that you can say about him

Which is more that you can say about him

We are heading off the cliff very fast and it won’t be pleasant when we crash.

 

U.S. Credit Downgraded

August 6, 2011

For the first time in American history, the federal government’s credit rating has been downgraded from AAA to AA+ by Standard & Poors.

Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

Lowering the nation’s rating to one notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.

“It’s always possible the rating will come back, but we don’t think it’s coming back anytime soon,” said David Beers, head of S&P’s government debt rating unit.

The decision came after a day of furious back-and-forth debate between the Obama administration and S&P. Treasury Department officials fought back hard, arguing that the firm’s political analysis was flawed and that it had made a numerical error in a draft of its downgrade report that overstated the deficit over 10 years by $2 trillion. Officials had reviewed the draft earlier in the day.

“A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesman said Friday night.

The downgrade to AA+ will push the global financial markets into uncharted territory after a volatile week fueled by concerns over a worsening debt crisis in Europe and a faltering economy in the United States.

The AAA rating has made the U.S. Treasury bond one of the world’s safest investments — and has helped the nation borrow at extraordinarily cheap rates to finance its government operations, including two wars and an expensive social safety net for retirees.

Treasury bonds have also been a stalwart of stability amid the economic upheaval of the past few years. The nation has had a AAA rating for 70 years.

Analysts say that, over time, the downgrade could push up borrowing costs for the U.S. government, costing taxpayers tens of billions of dollars a year. It could also drive up interest rates for consumers and companies seeking mortgages, credit cards and business loans.

A downgrade could also have a cascading series of effects on states and localities, including nearly all of those in the Washington metro area. These governments could lose their AAA credit ratings as well, potentially raising the cost of borrowing for schools, roads and parks.

They don’t believe that we will get our finances under control and I don’t blame them. I suspect that they were either being nice or were subject to political lobbying or they would have downgraded us all the way down to junk bond status.

I think it’s official now. Obama is a worse president than Jimmy Carter. If he keeps going he’ll pass James Buchanan as the worst president in history.

In case there’s any question about whose fault this mess is, look at this graph.

Bush’s spending was bad enough but Obama’s is an order of magnitude worse.

Hope and change!!

 

Tax the Rich 2

June 30, 2011

In the early 1920s the highest tax rate was 73%. In 1921 President Harding appointed Andrew Mellon to be Secretary of the Treasury. Over the next eight years he reduced the top rate to 24%. The result, federal revenue increased from $700 million to over $1 billion. Every year that decade the federal government ran a surplus, hard to believe I know. Unemployment and inflation were at record lows.

It may seem counter-intuitive that lowering tax rates would increase revenue but it is actually easy to understand. In general, people do not like paying taxes. They will often go out of their way to avoid paying taxes by exploiting any loopholes in tax codes, decreasing any activity that is taxed, consuming less of any commodity, or just plain cheating. If tax rates are relatively low, it is not worth the trouble and people go ahead and pay their taxes. If tax rates are relatively high, then people start putting their money in tax shelters.In other words, people don’t just sit still and allow themselves to be taxed. They take action to limit their tax burden as much as possible.

The reason I mention all of this is that there seems to be a movement among the Democrats to raise taxes in order to lower the deficit. They believe that the reason that we are in the fiscal mess we are in is because people, especially the greedy rich, just do not pay enough in taxes. The problem is that raising taxes simply will not produce the bonanza of increased revenue that they expect. Raise taxes on the wealthy and they will send their money abroad, or not invest, or do what it takes to pay as little as they can. I know I am being repetitive, but I cannot seem to pound that concept into Progressives’ heads.

In any event, revenue to the federal government as a percentage of GDP seems to hover at about 19%, regardless of tax rates as shown here and here. And check out this chart here. The US has the honor of having the second highest corporate tax rate in the developed world, 13% higher than the OECD average. This is not exactly helping our recovery.


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