Views on the News – 1/5/2013


By: David Coughlin
The “fiscal cliff” is a massive failure of Presidential leadership and the tedious and technical negotiations are but a subplot in a larger drama.  Government can no longer fulfill all the promises it has made to various constituencies.  Some promises will have to be reduced or disavowed.  Only the president can pose these questions in a way that starts a national conversation over the choices to be made, but doing so requires the President to tell people things they don’t want to hear.  That’s his job: to help Americans face unavoidable, if unpleasant, realities, but he has refused to play this role.  Instead, he chooses to distract the American people by casting the long-term budget problem as a question of whether the richest 1% or 2% of the population should pay more in taxes.  The CBO puts it this way:
·    “With the population aging and health care costs per person likely to keep growing faster than the economy [GDP], the United States cannot sustain the federal spending programs that are now in place with the federal taxes (as a share of GDP) that it has been accustomed to paying.”
Until Obama conspicuously and consistently acknowledges these realities in straightforward and unmistakable language, something he hasn’t done and shows no signs of doing, he cannot be said to be dealing honestly with the budget or with the American people.  Obama refuses to concede that Social Security, Medicare and Medicaid are driving future spending and deficits.  Obama would offend many Democrats if he entertained benefit cuts in Social Security and Medicare: higher eligibility ages, higher premiums for affluent elderly, structural changes in the health-care system to reduce costs.  The result is that we’re not getting the debate we deserve and that budget choices are being made mainly by default. Just as important, the periodic, ugly confrontations over budget policy, and the paralysis and bitterness they involve, corrode confidence and weaken the economy. A weak economy creates few new jobs, and the lack of jobs is the nation’s No. 1 social problem. Obama’s abdication of responsibility may be in his political self-interest, but it is profoundly hostile to the national interest.
(“Obama’s Leadership Failure” by Robert J. Samuelson dated January 1, 2013 published by The Washington Post at http://www.realclearpolitics.com/articles/2013/01/01/obamas_leadership_failure_116559.html )
Crack cocaine is one of the most addictive substances on earth because it chemically alters part of the brain called the “reward system” which also explains America’s addiction to government spending.  The drug traps dopamine in the synapses between nerve cells in the brain, reproducing the feelings of pleasure we get while eating or having sex, a euphoric high lasting anywhere from five to fifteen minutes.  But then the drug wears off, leaving the person feeling let-down and depressed, and creating a desire to smoke more crack in order to feel good again.  Research has shown that monkeys addicted to crack will press a bar more than 12,000 times to get a single dose, and the second they get it they start pressing the bar for more.  On New Year’s Day, America inhaled deeply on something far more dangerous and addictive than crack cocaine, government spending.  The House finally gave in to peer pressure Tuesday night and voted to approve a Senate “fiscal cliff” bill to be signed by America’s biggest drug dealer, Barack Obama. The deal increases taxes $41 for every $1 in spending cuts.  On November 6, 2012, a plurality of uninformed voters stumbled into the voting booths and despite the worst economy since the Depression, pressed the bar 59.8 million times in order to get another dose.  The 57.1 million Americans who tried to remove the drug dealer from the neighborhood and the 13 million people (including 3 million Republicans) who voted in 2008 but closed their curtains and stayed home in 2012, watched on early Tuesday morning in stunned amazement as Senate Republicans, with pupils dilated and a light blue cloud of smoke following them, appeared nervously before the cameras and with straight faces denied smoking anything.  The House, with a majority of Republicans voting against it, went along with the Senate on the deal.  Congress’ fiscal cliff deal calls for $620 billion in new taxes while coming up with only $15 billion in spending cuts. Only a crack addict will fail to admit that the real cause of our long-term deficits is government spending, not low revenue but then again, addicts always deny they have a problem.  America’s drug-dealer-in-chief has overseen a 50% increase in our national debt, which currently is at $16 trillion.  Crack addicts will typically sell their personal possessions and steal from family or friends in order to fuel their addiction. That may explain why the federal government is stealing $150 million an hour from our children in order to support its habit.  Food stamps, the street name for an addictive depressant which leads to long-term use, chronic unemployment, and a lack of drive and ambition, used to be associated only with the poor but is now the drug of choice for nearly 47 million Americans.  Unemployment benefits, a stimulant which leaves users with a lack of drive and energy, were also extended once again, adding billions to the federal deficit, because millions of addicts demanded it.  Denial, enabling, and codependency are key examples of the self-destructive behavior of drug addicts, yet under-informed American voters continue to deny there is even a problem with government spending.
(“U.S. Needs a 12-Step Program for Spending” by Gary Wickert dated January 3, 2013 published by PJ Media at http://pjmedia.com/blog/u-s-needs-a-12-step-program-for-spending/
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As Washington staggers into a new year, one side of the political spectrum polarizes and paralyzes all ongoing debates due to its irrational reliance on a higher power, but the problem isn’t religious conservatives and their abiding faith in God; it is mainstream liberals and their blind confidence in governmentConservatives want to give individuals more power while liberals seek to improve the situation by concentrating more power in the hands of the government.  The right preaches self-reliance while the left places its trust in the higher power of government.  The same dynamic characterizes most of today’s foreign-policy and defense debates.  Right-wingers passionately proclaim the ideal of “peace through strength,” arguing that a powerful, self-confident America with dominant military resources remains the only guarantee of national security.  Progressives, on the other hand, dream of multilateral consensus, comprehensive treaties, disarmament, grand peace deals, and vastly enhanced authority for the United Nations.  Liberals place a touching and naive faith in the ideal of a higher power, potential world government, while conservatives insist that the United States, like any nation, must ultimately rely only on itself.  Regarding the great tax-and-spend battles presently pushing the nation ever closer toward the dreaded fiscal cliff, the right argues that the economy will perform better if money is controlled by those who earn it while the left wants to government to make better, more generous decisions on how to invest that money.  Despite abundant evidence to the contrary from the failed welfare states of Western Europe, liberals maintain unwavering devotion to the notion that taking funds out of the private sector will miraculously generate more private-sector economic growth. Republicans trust the private decisions of prosperous people to make the best use of the money that those citizens have generated; Democrats rely on the superior wisdom and broader perspective of a larger, more activist government to distribute rewards and plan for the future in a complex economy.  In selecting strategies for helping the poor and uplifting the downtrodden, the opposed approaches of left and right offer an especially sharp contrast.  Conservatives at every income level provide disproportionate support for private charities.  Liberals, on the other hand, consider such private efforts insufficient and demand governmental initiatives and interventions to supplement the private armies of compassion.  Liberals believe in totally restructuring a broken society rather than merely repairing the broken lives of individuals.  Mainstream conservatism has never denied the importance of human effort or governmental leadership in addressing dire circumstances or everyday difficulties: after all, Republican heroes of history from Lincoln to Reagan have been powerful Presidents, not merely passive and prayerful observers.  Liberals place their confidence in the notion that “Government helps those who can’t help themselves,” a proposition that’s questionable in both its components.  First, it’s wrong and destructive to believe that any America is truly helpless and second, it’s arguable whether government reliably helps more than it hurts when it expands its power into our daily lives.  In the wake of Obama’s reelection, unreasoning reliance on federal power distorts our politics far more destructively than simple-minded faith in God, and big-government fundamentalism poses more of a threat to the republic than religious absolutism.
(“The Liberal God Delusion” by Michael Medved dated December 28, 2012 published by The Daily Beast at http://www.thedailybeast.com/articles/2012/12/28/the-liberal-god-delusion.html )
The Left has long regarded the American Constitution as an obstacle to the sort of fundamental change it desires, and now the seeds of delegitimizing the Constitution itself are being planted by powerful members of the progressive establishment.  Louis Michael Seidman, Professor of Constitutional Law at Georgetown University, has written, “Let’s Give Up on the Constitution,” that postulates we should subvert the Constitution since it gets in the way of the Progressive agenda.  The real intent of the piece is not to persuade by logic, but rather to put on the table the very foundation of our lives as Americans, and devour it by increments, as it becomes increasingly respectable to mouth the opinion that it really doesn’t matter what the Constitution says, if an important issue is challenged.  The argument is that following the Constitution is impractical, and that it somehow holds us back from achievement: “[W]e ought to try extricating ourselves from constitutional bondage so that we can give real freedom a chance.”  This misses the purpose of our Constitution. It is designed to sometimes impede government in order to protect liberty. The “constitutional bondage” on government is meant to protect liberty and to protect individuals from tyranny. It is, as Jefferson wrote, the “chains” binding down men who hold the awesome power of office.  The difference between constitutionalists and progressives is that we recognize that the Constitution is not a law governing the actions of individuals or even of society. Progressives often confuse government with society. The Constitution is our supreme and paramount law, but it is a law written exclusively to frame and control our government, meaning that it was written to govern government itself.  The Constitution sets forth generally how the government must operate and behave. Only by remaining faithful to the Constitution may the government make, enforce and adjudicate other laws governing the people. But note that nowhere does the Constitution actually dictate the behavior of society, only the behavior of government itself.  What the Founders did through the Constitution was to create a supreme law to govern government itself, which is necessary to preserve liberty, and to “give up on the Constitution,” is the progressive way of freeing government from the rule of law.
(“Subverting the Constitution” by Thomas Lifson dated December 31, 2012 published by American Thinker at http://www.americanthinker.com/blog/2012/12/subverting_the_constitution.html )
The socialist left purports to promote universal acceptance, the provision of basic human needs, and the freeing of spontaneous creative impulses, but due to several fundamental misunderstandings about humanity, which play directly into the hands of totalitarian politicians, socialists actually destroy human rationality, content families, harmonious societies, productive economies, and any semblance of government based on true justice.  The implementation of the value of equality is the cover the left runs under to destroy capitalism, hierarchical political and social structures, and reason as a prelude to human reinvention.  Since equality is not an ethic grounded in reality or reflected by nature, this moral imperative wars against nature, and by extension, human nature itself.  The left shares a deeply totalitarian desire to create values in absolute freedom and to remake humanity as they see fit.  This necessarily entails giving the state unlimited power.  Primarily because they tend to live in a state of material comfort, leftists are led to believe that civilization is an artificial state of affairs where man is insulated from the demands of nature; and therefore, natural law.  Human nature and history do not apply.  In other words, man can be reinvented and re-engineered by a socialist vanguard.  This endeavor would supposedly save man and eliminate war, poverty, and misery.  Human experience does not support the left’s point of view.  Rationality to the left is a grave enemy.  It is a state of mind appearing to the left as rigid, blunt, and alien.  The leftist adopts this view of rationality because he fears the regimentation of human life and thought, the formalization of human relations in a market (what Marxists might call “commodifying” human relations), and the withering of emotions such as compassion and empathy.  Ironically, it is the pursuit of a society rooted in emotion and not reason that leads straight to the collectivist mob mentality so characteristic of totalitarian regimes.  The cultural Marxist left cannot accept “civil society” as a place of free-ranging emotions and spontaneous value creation, competition, and destruction in the industrial-capitalist context; to him, society must be co-opted and managed towards the obliteration of value judgment as a necessary step towards domination of the economic system.  A society that operates purely on emotion is not a society at all. It is animalistic in orientation at its very core.  Justice itself is a concept that implies the application of uniform standards of behavior in society as a whole.  This aspect of civilization proper requires reason, and not empathy or emotion removed from logic.  Without justice, the strong are free to oppress the weak, the clever to swindle the dull, and ruthless megalomaniacs to manipulate and rule the masses.  There must be a set of codified morality to guide society, or else arbitrary or pure emotion will cause fluctuations in social relations, occasionally spilling into mob violence.  Only individual rationality can prevent the exploitation of man by man. Emotional manipulation, primarily employing fear, can only be countered with critical reason.  The opposite of fear that is blind hope has been the preferred tool of demagogues since the dawn of civilization.  Socialism fails because of its inability to acknowledge human nature and motivation.  Socialism sets out to fulfill human happiness through the provision of base material needs, but incentivizes idleness by removing the necessity to produce what satisfies those material needs.  Socialism therefore leads ultimately to economic implosion. The system also debases people by destroying virtue, since loyalty to the party trumps all else.  It demoralizes society by crushing the human spirit, thereby leading to precisely the kind of widespread alienation it proclaims to cure.  Men, being ultimately demoralized, do not cooperate with their enslavers under socialism, but are rather ambivalent. After society’s values are obliterated, wanton corruption and shameless inhumanity ensue.  The result is an unproductive, impoverished, irrational, and vulgar society that collapses according to its own internal contradictions.  The task for the American patriot who seeks to preserve his society intact is to engage in rational discourse and value transmission with his fellow citizens because individualist ethics, shared humanity, and truth are the weapons to prevent our demoralization and economic destruction.
(“Socialism Destroys Society” by Kyle Becker dated December 30, 2012 published by Conservative Daily News at http://www.conservativedailynews.com/2012/12/socialism-destroys-society/ )
The fiscal cliff is a less a crisis than a creation that diverts the attention of policymakers, the media and the public away from the big picture abyss that threatens the United States and shifts focus to the smaller and more immediate tax and spending debate associated with the year-end expiration of the Bush tax cuts.  The central problem facing the U.S. that few understand is the growing systemic risk from the unsustainable trajectory of deficit spending and debt accumulation and the $225 trillion derivatives exposure largely held by a handful of favored U.S. banks that are “too big to fail.”  What is striking about the current debate is how relatively small the numbers are compared to those associated with the greater problems of systemic risk that could precipitate a financial collapse:
·    The U.S. Government bond market bubble has grown 55% to $16.38 trillion in the first 4 years of the Obama administration, a sum which is now 107% of U.S. GDP and equals the entire debt accumulated in the first 225 years of America’s history.
·    The $220 trillion in U.S. derivatives exposure held by JP Morgan, Bank of America, Citibank and Goldman Sachs, is a sum which amounts to 3.3 times the entire world GDP.
·    The Federal Reserve decided to double its monetary stimulus (also known as “money printing,” debt monetization, quantitative easing or simply QE) to $85 billion a month, which suggests the Fed may be taking emergency measures to contain systemic risk and fund deficit spending and U.S. government debt issuance foreigners no longer want.
Since the November 6th elections, no one seems to be discussing what the U.S. needs to do to restore its economic health and return to normal.  Staying in denial and addicted to deficit spending, QE and artificially low interest rates is an unquestionably risky path – one that leads to misallocation of resources and discourages investment, capital formation and wealth creation.  Obviously QE and low interest rates facilitate the Federal government’s deficit spending, as well as assisting in bailing out the banking and housing sectors, but the money that the Fed is creating is making the holders of dollars nervous.  Deficit spending financed by the printing of money and escalating federal debt cannot be sustained.  It risks triggering significantly higher inflation or a collapse of the dollar and the bond market.  Uncontrolled public debt now threatens to rupture society as the older generations’ benefits are increasingly financed by debt born by the young.
(“The Fiscal Cliff is a Diversion from the Real Problem” by Scott Powell dated December 28, 2012 published by Canada Free Press at http://www.canadafreepress.com/index.php/article/52052 )
Many people are warning that if the government goes over the “fiscal cliff,” the U.S. economy could tumble back into recession, but in reality we may already be in recession.  Despite some misleading headlines, and some cheerleading in certain quarters, there are plenty of reasons to be worried that the economy could already be shrinking again, even before the wave of tax hikes and spending cuts scheduled for January.  Most of the forward-looking indicators, including industrial production, capacity utilization, real disposable income, real personal consumption, real sales, retail and food service sales, and real manufacturing and trades sales are all pointing down.  The Economic Cycle Research Institute agrees, and recently announced that a recession may have begun as long ago as July.  The economic recovery of the past few years has been based on three things: loan defaults by households, massive deficit spending by the government and enormous money printing by the Federal Reserve.  It is hard to see how any of these, let alone all three, can continue indefinitely.  Missed in most recent jobless reports was the news that the number of employed people in the United States, age 25 to 54, actually fell by half a million (before seasonal adjustments) from October to November.  Because of the lag-time involved in collecting the data they track, economists don’t tend to know we’re going into a recession until we are halfway back out again, so no one will tell us we’re in a recession until we’ve been in it for months and it sure feels like we already arrived.
(“Are we already in a recession?” by Brett Arends dated December 28, 2012 published by MarketWatch at http://www.marketwatch.com/story/are-we-already-in-a-recession-2012-12-28?siteid=rss&rss=1 )
Over the last four years, our national debt has grown by more than $5 trillion to over $16 trillion and we have to service that debt, while the Federal Reserve is keeping rates historically low but here’s the cost of paying interest on the debt for fiscal 2012: $359,796,008,919.49.  All eyes have been on the clear and present danger of the fiscal cliff. but there’s a sound in the mountain range that’s even scarier than the cliff – it’s the sound made by an avalanche, the trillions of dollars of debt that’s heading our way, gathering speed and mass.  All liabilities are not set listed in accordance with the well-established norms of the private sector, where this overhang of liabilities would set off alarm bells in the markets, with boards of directors in emergency sessions.  The greatest fiscal challenge to the U.S. government is not just its annual deficit but its total liabilities.  Our federal balance sheet does not include the unfunded social insurance obligations of Medicare, Social Security, and the future retirement benefits of federal employees, which is estimated to be more than $87 trillion, or 550% of our GDP.  The public doesn’t know about these awesome liabilities because the totals appear only in actuarial estimates.  The real annual accrued expense of Medicare and Social Security alone is $7 trillion.  The government’s balance sheet does not include any of these unfunded obligations but focuses on the current year deficits and the accumulated national debt.  We are locked into continued escalation by the fact that social insurance programs, as well as other mandatory programs, carry payments that are in accordance with automatic formulas written into law and are not subject to an annual spending limit.  Today, less than 40% of our budget is actually decided by Congress and the President, down from 62% 40 years ago.  Let’s remember that 100% of the payroll taxes for Social Security and Medicare are spent in the year that they are collected, leaving no leftovers for the unfunded obligations, and this doesn’t take into account other risks, hardly minimal, like the fact that the Federal Housing Authority confronts a $16.3 billion net deficit after its latest audit that may force a taxpayer bailout for the first time in its 78-year history.  Just four years from now, in 2016, the Disability Insurance trust fund will be fully depleted.  The full extent of the liabilities won’t be realized by the country unless and until the government publishes financial statements in ways the private sector is forced to present them.  At the end of 2011, the administration published the financial statements on the web on a Friday before the holiday break, without a press conference, still less a presidential appearance, thereby deliberately attracting a minimum of attention.  Quite simply, the government has grown too big, promised too much, and waited too long to restructure itself. Large and growing deficits represent deferred taxes that will have to be paid.  In effect, we have a massive taxation without representation for future generations, the people who are too young to vote.  The conclusion is unavoidable, but it is avoided year in and year out, from one election cycle to another.  We have to get moving fast on reform of entitlements, of all the programs viewed as the third rail of American politics.  Our politicians won’t touch it because they think our people are themselves unready and unwilling to risk their security, which is precisely what brought us to where we are today.  The parties have been locked in a dance of death, with Republicans shrinking from raising taxes and Democrats from controlling entitlements.  Once we recognize that unsustainable commitments cannot be ducked any longer, we will recognize that we need both correctives: expenditure cuts and higher tax revenues.  The question is what will happen when investors lose confidence in the ability of the federal government to put its finances in order? That will be reflected in their unwillingness to buy our debt at current low levels of interest.  The question is not whether we must make the tough choices to put our nation’s finances in order.  The question is whether we will do so before the market forces us to do so.  The result of a debt crisis would be not only a significant increase in the interest rates we have to pay (and think of what that would do to the “recovery”), but also a potential decline in the value of the dollar.  We have managed to keep up appearances, but the performance is less and less credible.  Investors who have relied on the good faith and trust of the U.S.A. look at how we fudged and fumbled and name-called to the edge of the fiscal cliff, and they’re focused on what we do or not do.  No one knows when investors will lose confidence in the willingness and the ability of the federal government to put its financial house in order.  No one knows how much interest rates would go up, but we do know it would be just as sudden and dramatic as it has been in the endless Eurozone crises.  Doing nothing to address this level of fiscal irresponsibility is simply not an option.  We can’t inflate our way out, for inflation doesn’t solve our Social Security and Medicare challenges.  We can’t raise taxes beyond the point where they curtail growth, not to mention that a punitive level of taxation is neither culturally or politically acceptable.  We must change course now, before we are engulfed, with devastating consequences for tens of millions of Americans because as skiers and mountain folk know, by the time the distant sound becomes a roar, it’s too late to get out of the way.
(“Brace For an Avalanche of Unfunded Debt” by Mortimer B. Zuckerman dated December 28, 2012 published by US News & World Report at http://www.usnews.com/opinion/mzuckerman/articles/2012/12/28/mort-zuckerman-brace-for-an-avalanche-of-unfunded-debt )
Stockholm Syndrome, otherwise known as “capture bonding,” is a psychological phenomenon in which hostages express empathy, sympathy, and have positive feelings towards their captors, and after four years of following closely, and blogging about, the machinations of government at all levels, the temptation to give up and go over to the dark side is great.  I am tired of attending meetings of our city and county governments.  I am fed up with putting myself on the line by speaking out against their profligate spending and misuse of public funds, their failure to defend us from the radical leftwing United Nations agenda, their decisions to favor the financial manipulations of those with power at the expense of those who have none.  I am worn out from following the Greek labyrinth that is state government when all that I ever find at its center is a big bull.  My efforts to point out the dire consequences of the self-serving politics at the federal level, I am as a voice crying in the wilderness.  Why should I distress myself having opinions contrary to the inexorable status quo when our commissioners, representatives, governor, and president treat my calls and emails as interruptions of their day?  Many of the best and brightest, at all levels of government, seem helpless to do anything, including even getting elected in the first place. The worst of them, which are most of them, are incompetent or corrupt, take your pick.  The saddest thing of all is to see the worst of them keep on getting re-elected.  I don’t have Stockholm Syndrome since I do not empathize, sympathize, or have positive feelings towards our political elites, but I fear the majority of the country may suffer this affliction.
(“Stockholm Syndrome” by Carole Jackson dated January 1, 2013 published by American Thinker at http://www.americanthinker.com/blog/2013/01/stockholm_syndrome.html )
About The Author David Coughlin:
David Coughlin is a political pundit, editor of the policy action planning web site “Return to Common Sense,” and an active member of the White Plains Tea Party. He retired from IBM after a short career in the U.S. Army. He currently resides with his wife of 40 years in Hawthorne, NY. He was educated at West Point (Bachelor of Science, 1971) and the University of Alabama in Huntsville (Masters, Administrative Science, 1976).
Website:http://www.returntocommonsensesite.com/

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