We are squandering a great opportunity to become energy independent and put millions of Americans back to work with moratoriums and still more regulations. To say more would only be repeating what has been said in the past. With reckless spending and willful deflect of our exploding debt our economic freedom in this county is being questioned unlike anytime before. It is almost cliche to say that government is the problem, however, in light of our current predicament it’s worth repeating. The only mechanism that can create jobs and prosperity is the free market. The arena of ideas, opportunity, and work. You read where how I got to these conclusions below:

• Obama: One Step Forward, Three Steps Back On Job Creation
• Obama Job Plan: Regulate America to Oblivion.
• Putting ‘Big Oil’ to Rights

Now, the folks at Economic Freedom have a simple three minute video that highlights all of these concerns. It’s worth your time. Enjoy.

The world seems to be coming apart at its seams. We are facing real threats that resemble the great plagues of the past. This plague is targeting the foundations of society as opposed to the people who make it. Great Britain is being throttled by rioters as London has become a city of chaos. We are witnessing a global meltdown in the financial markets and the only thing that looks to be clear at this point is that a new world order will emerge once the old one gives up the ghost.

Countries such as Russia and China are clamoring for the US dollar dominated-era to end. The latter of the two is in a good position to take advantage of US vulnerabilities. Back in 2009, there was a concerted effort by rich nations such as France, China, Russia, and Japan to move away from dealing in dollars for the price of oil. It was really just pecking blows from lightweights – considering US economic hegemony – as opposed to a knockout blow. However, in my limited powers of observation, the US’ legs are as wobbly as anytime before. The momentum, if you want to call it that, does seem to be moving away from the US in light of our economic and financial woes toward a yet to be announced global realignment.

It is easy to be fatalistic when faced with so many uncertainties. The US is losing credibility along with its place in the world as the sole superpower. Consider the fact that we aren’t being removed from that lofty pedestal from the machinations of another, but, rather, our fall is by our own doing; and it becomes even more depressing.

Our government has spent every cent it has taken in and then borrowed an additional $14 trillion. Take a minute for that to seep in. Our politicians promised and voted in programs it could not afford. Voting constituencies lapped it up. Our national debt became excessive and is now a catastrophic danger. Our government ignored proper funding for the interest on the debt. Instead we borrowed more against our debt. The result, obviously, was that creditors lost confidence in their investments and government securities were hardly secure. The party is ending but it goes much deeper than that.

(more…)

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Download Podcast | iTunes | Podcast Feed

On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the claim by DNC Chair Debbie Wasserman Schultz that Obama has turned around the U.S. Economy, Michele Bachmann, and whether or not the Fed’s dual mandate should be reconsidered.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Debbie Wasserman Schultz: Obama Was Able “To Turn The Economy Around”
Debbie Wasserman Schultz: Democrats Turned the Economy Around, Or Something!
‘On the Beach, I Bring von Mises’

Follow Brad on Twitter
Follow Ben on Twitter
Follow Francis on Twitter
(more…)

The news media in this country are in a stupor. Either out of ignorance, or complete leftist bias and fraud to protect their socialist hero Barack Obama, the mainstream media has turned a blind eye toward the enormous disaster facing our economy. The greatest Ponzi scheme in world history is coming to an end, leaving America on the precipice of economic Armageddon. Here are the facts the mainstream media does not want you to see- hiding in plain site just like Osama bin Laden was.

Bill Gross is the world’s biggest bond trader. He runs the PIMCO bond fund with over $250 billion under management. He recently disclosed through financial filings that PIMCO has sold every single U.S. bond in its portfolio. Local, state, federal bonds- all sold off. Gross knows bonds are about to default in record numbers. And most importantly, he knows that the last resort of the Federal Reserve buying our own government’s bonds at auction is a certain sign of Armageddon. When no one is left to buy your own debt but you, you have reached the end of a Ponzi Scheme.

Then there is legendary Wall Street investor Stanley Druckenmiller. He, too, is calling the Fed’s bond purchases a fraud and a Ponzi scheme. Druckenmiller says, “There is a phony buyer of $19 billion per week of Treasury Bonds.” The phony buyer he refers to is the U.S. government. Druckenmiller knows that when a country resorts to buying its own debt, we are seeing the last days of the Roman Empire.

Another Wall Street legend, Jim Rogers, spoke out at a business conference last week. He said he plans to short sell (bet against) U.S. bonds with both hands. Rogers added, “If any of you have bonds, I would urge you to go home and sell them. If any of you are bond portfolio managers, I would get another job…if I were you, I would think about becoming a farmer.”

(more…)

Recently, Portugal officially requested a $116 billion bailout from the European Union and the International Monetary Fund. This makes Portugal the third European nation to seek such a bailout in the past year (Greece got $157 billion; Ireland $122 billion). What most people don’t realize is that the U.S. is the largest contributor to the IMF. Therefore, U.S. taxpayers are paying for Portugal’s bailout which – like the earlier bailouts of Greece and Ireland – was caused by too much government spending and borrowing.

Last year, here at BigGovernment.com I warned how the Obama Administration was making a Greek bailout more likely by agreeing in advance that U.S. taxpayers would help foot the bill. Later, the IMF set up a $356 billion bailout fund for European governments with the consent of the Obama Administration– even though the fund will likely cost U.S. taxpayers between $50-100 billion and possibly more – all without a Congressional vote or consultation.

On April 29, 2010, Rep. Mike Pence (R-IN) and I wrote a letter to Treasury Secretary Tim Geithner warning of the dangers of U.S. participation in a Greek bailout. “The Obama Administration needs to understand that bailing out Greece will not solve Greece’s problems,” I said at the time. “It will only create a moral hazard that gets America more involved in the gathering storm of European bailouts.” That storm has since consumed Ireland and Portugal and others may be on the way.

(more…)

The media are reporting that if a governmental shutdown occurs, it will affect only “nonessential services and personnel.” Now, call me superficial, but I have a question:

At a time when we face a $1.4 trillion deficit this year alone, why are we funding anything or anyone that is admittedly “nonessential”?

I have been pondering an analogy that ought to be easy for anyone to grasp. Let’s compare the current congressional battle over federal spending with a hypothetical family feud over your own household budget.

Suppose you and your spouse are arguing about your finances. You have discovered, to your horror, that you are spending $1,400 per month over and above your total household income. Terrified, you inform your spouse that this is completely insane and unsustainable, and that it must stop immediately.

Your spouse nods in nominal agreement — but then digs in his or her heels against every single specific spending cut that you propose.

Knowing of your partner’s stubborn, spendthrift ways, you eventually propose just $100 in reduced spending. That would still have you falling behind each month by $1300, but at least it’s a start. However, your spouse is outraged and rejects the figure out of hand; it’s “draconian,” and would undermine the profligate lifestyle to which you’ve become accustomed.

You argue, and argue, and argue. Getting nowhere, and desperate for any point of agreement, you say: “Look, can’t we cut just $61 from our monthly spending? We both know that this won’t even make a dent in our obligations, but at least it might slow our rush toward bankruptcy, if only by a few days.”

(more…)

The $7.2 billion broadband portion of the federal government’s nearly $1 trillion “stimulus” law has been counterproductive and destructive from the moment President Barack Obama signed it.  There are myriad examples of these mountains of money being spent terribly.

Well, behold perhaps the worst – Lake County in northern Minnesota.

Lake County wanted to get in on the government broadband gravy train.  So they hired to put together their proposal the highly problematic Tim Nulty. His company, National Public Broadband, had already blown up a similar untenable government Internet project in Burlington, Vermont.

Why do I say the Lake County plan is untenable?  Because the numbers simply don’t add up.

Lake County’s total population is only 11,058 – which means at most about 7,000 homes to which to potentially sell broadband. To up that tally, Lake County added to the plan parts of neighboring Saint Louis County.  Thereby placing Lake residents on the hook for the nearly $60 million in federal loans – much of which would be spent not on them, but in Saint Louis.

This dubious move brought the total number of homes to-be-potentially-served to about 15,000.

(more…)

Barack Obama and the U.S. government have called for a “peaceful transition” in Egypt, in response to massive protests, riots and escalating anarchy. But I wonder if President Obama is taking notes? I wonder if he realizes just how close America is to facing a similar crisis that could result in riots, revolt in the streets, and economic paralysis. I wonder if President Obama would act much different than President Mubarak in Egypt. So far, small signs hint that Obama might turn out to be just as intolerant to dissent as Mubarak.

Think it couldn’t happen here? Think again. Let’s review the economic crisis that America faces at this very moment. Just in the days since Obama’s State of the Union speech there have been numerous signs that the U.S. faces an economic Armageddon. Dark storm clouds are fast approaching:

• The U.S. budget deficit is far more than even economic experts imagined.
• Unemployment is up yet again — far more than the experts projected.
• Social Security shortfalls are bigger and have happened sooner than any expert predicted — a decade sooner.
• Fourth Quarter GDP was lower than projected — and even the figure released was merely the result of the Fed printing fake money 24 hours a day, to create false consumer confidence, to prop up a U.S. economy that is falling off a cliff.
• The foreclosure crisis is deepening beyond what any expert imagined. As a result, real estate prices are falling even further, thereby threatening not only consumer spending, but the very survival of major banks.
• Inflation is skyrocketing on the two things that matter most — food and energy prices. One more disaster — perhaps the fall of Egypt, leading to an oil crisis — could lead to a hyperinflation that could turn America into a combination of Zimbabwe and the Weimar Republic.
• We already face economic Armageddon on a state and local level. U.S. cities, counties and states are teetering on the verge of bankruptcy. Their grave financial condition is the result of massive unsustainable spending and debt, caused in large part by irresponsible public employee salaries, pensions and health benefits. The worst part of this crisis is that the stimulus money is gone and the federal government is bankrupt, unable to bail itself out, let alone the cities, counties and states.
• There are early signs of revolt and anarchy here in America — with a record number of policemen shot and killed during a two-week period in January.
• The Middle East threatens to turn into a powder keg that could lead not to democracy, but to radical Islamic control of many Arab countries. This grave new threat to America, American interests, and the survival of our ally Israel, would lead to more military spending and a potential oil crisis that could engulf and overwhelm the U.S. economy. In our current vulnerable economic state this tragedy could set off a worldwide economic panic.
• Japan’s credit rating was downgraded on what most economists agree is a disastrous slide toward oblivion. Japan’s debt is so huge it can never be repaid. As one famous economist describes the crisis they are facing: “Japan is a bug in search of a windshield.” Japan’s impending implosion could also trigger a worldwide economic panic.
• Spain just announced unemployment of over 20%. Not only does this news threaten the survival of the EU, it also drives a stake through Obama’s strategy for saving the U.S. economy by creating green jobs. Spain proves there is no market for green jobs. The whole idea is a mirage created by leftist progressive politicians desperately grasping for straws.

Can you imagine that all of this toxic news has occurred in only the few days since Obama’s State of the Union?

(more…)

We are navigating through truly uncharted political and economic territory.  Members of the financial cognoscenti have freshly alluded to the notion of the ‘government bubble’ as the next blow to the world economic order.

Since 2008 we have seen the housing, financial, and insurance markets hit on a global level, one after the other.  At one point, they all burst because they were unsustainable.  You don’t have to be a politico to know that the sovereign debt crisis is real.  Just look around.  As European countries (Portugal, Ireland, Italy, Greece, Spain, and Belgium) reshuffle hundreds of billions of dollars to lighten rising government deficit and debt levels, Republican appropriators here at home futilely attempt to get our books in order.  Ladies and gentleman, something is afoot.

The recent crisis in Egypt has only intensified discussion on the stability of the world economic order. No one knows what’s going to happen.  In an ideal situation, a peaceful transition of power will re-stabilize what has triggered a sell-off in equity markets and posed more geo-political uncertainty in the region as energy commodities are poised for gains based on fear.  And the bad news just keeps pouring in.

According to Reuters,

Adding to Cairo’s financial woes, ratings agency Moody’s downgraded the country’s debt rating on concern the Mubarak regime may spend more to placate protesters.

(more…)

Chairman of the Federal Reserve Ben Bernanke launched a second round of Quantitative Easing (QE2) in October, following over a year of growth in the economy at a robust rate of over 3%. Most analysts pooh-poohed QE2 as an insufficient economic stimulus to create enough inflation to reduce unemployment. I warned that QE2 was like pouring inflationary lighter fluid on the world and then lighting a match. With food inflation now running at 15% in poor countries, the Middle East is just the first area to burn, but fire is smoldering in much of the world and other fires will break out soon.

QE2 is a program by the U.S. Federal Reserve to inject $600 billion of U.S. dollars in the financial system by repurchasing an equivalent amount of U.S. Government bonds. Once the money is paid to the former bondholder, they deposit the cash in banks. Banks take deposit dollars and leverage them by 6 to 10 times creating $3.6 to $6 trillion in credit. Given that the Gross Domestic Product of the U.S. economy is only about $14 trillion annually, it would impossible to immediately purchase 25-40% of the entire economy. Consequently, the reality of Quantitative Easing is that the money will be invested in the stock and commodity markets. The theory is that the financial assets rise on the huge inflows of QE cash, investors will feel wealthier and go to the malls and the car dealerships to “shop till they drop”.

The problem with theory is that QE2 money quickly drove up commodity food prices around the world. This price rise is barely noticeable to Americans who only spend 10% of their personal income on food for three meals a day; but the impact of food inflation is devastating the over half the world that spends approximately 50% of personal income on food for two meals a day. The 15% QE2 induced commodity food price increase has reduced the amount of food poor people can purchase by almost 1/3.

The riots and revolutionary activity burning down Tunisia, Yemen, and Egypt are about gut-level economics. Do you think Americans would riot and throwing out our government if we were forced to cut back to eating 1 1/3 meals a day? Once riots start people in cities hoard food to survive and becomes dangerous for farmers to transport food. This is exacerbates food shortages and drives prices even higher.

(more…)

In his State of the Union address this week, President Obama showed up late to the game of ideas. While he offered up a few good notions, they mimicked what Republicans have been championing for two years now. In just three weeks, the new House Republican Majority has taken pro-active steps to refocus our economy in a real way.

As part of that new Congress, I’ve already voted to cut Congressional budgets by 5%, repeal the $2.6 trillion ObamaCare law and cut $100 billion over the next year by reverting back to 2008 spending levels.

President Obama referenced several options for economic prosperity in his address Tuesday night.  But if a spending freeze, earmark elimination and investment in transportation and infrastructure sound familiar, it’s because Republicans have proposed implementing such legislation to save money and create jobs for two years.

Yesterday, the citizen-empowering YouCut program came to life as we voted on a citizen idea to terminate taxpayer financing of presidential election campaigns and Party conventions.

Now that we’ve gained the Majority, Republicans are committed to cut spending and grow the economy in drastic ways. This YouCut vote will put $617 million back in the pockets on of American taxpayers in the next 10 years. It empowers the people and enables our government to do more with less during a scary national debt crisis.

(more…)

Charlie Gasparino in today’s New York Post:

The municipal-bond market is in crisis, with prices fall ing and investors running for cover — and for good reason.

Munis — bonds sold by states, cities, counties and other localities to finance government operations — are in trouble because the Ponzi scheme of Big Government is coming unglued. The markets are merely reflecting this reality, as they always do.

The $3 trillion muni market was once regarded as the safest of all investments because the bonds are backed by government taxes. Now it’s showing all the earmarks of the 2007-08 meltdown.

(more…)

Ten years from now university economists will analyze Federal Reserve Chairman Ben Bernanke’s recent presentation to the U.S. Senate Budget Committee as the successful turning point in American economic policy from a focus on demand side consumption spending to supply side production investment.

As Bernanke clearly stated:

“We need to think about making investments for the future as opposed to simply spending our seed corn on current needs. So thinking about government programs, we should ask the question, will this provide benefits in the future.” …

“On the tax side, I don’t think it’s really very controversial among economists that rising rates, combined with a multiplication of exemptions, deductions, credits and so on, leads to a tax code which is very complex and can distort economic decisions.”

For the last decade our nation’s economy grew at an above average rate of 3.8% rate, tax revenue grew at the average rate of 2.5%; but government spending exploded at 13.7% growth rate. Fed Chairman Bernanke’s new found appreciation for getting government out of the way of the private sector only comes after America’s government debt burden has reached a Greek like 127% of our economy. With gold soaring, unemployment at record highs and serious efforts underway to eliminate the dollar as the world’s reserve currency; the US is clearly in trouble. To put the debt in personal terms, the US government debt burden equals $103,692.20 for every working American.

The Chairman’s rejection of bailouts nullified the intensive lobbying efforts by California and other state and local municipalities for a Federal debt guarantee. Having run-up over $3.5 trillion of municipal bond and pension obligation debts in the last decade, state and local governments are now facing widespread defaults. Newly inaugurated California Governor Jerry Brown, who many blame for passing legislation 30 years ago that permitted the Golden State to become the perennial poster child of deficit spending, just announced a six month moratorium on all state borrowing.

(more…)

Thanks to decades of reckless spending by European welfare states, the newspapers are filled with headlines about debt, default, contagion, and bankruptcy.

We know that Greece and Ireland already have received direct bailouts, and other European welfare states are getting indirect bailouts from the European Central Bank, which is vying with the Federal Reserve in a contest to see which central bank can win the “Most Likely to Appease the Political Class” Award.

But which nation will be the next domino to fall? Who will get the next direct bailout?

Some people think total government debt is the key variable, and there’s been a lot of talk that debt levels of 90 percent of GDP represent some sort of fiscal Maginot Line. Once nations get above that level, there’s a risk of some sort of crisis.

But that’s not necessarily a good rule of thumb. This chart, based on 2010 data from the Economist Intelligence Unit (which can be viewed with a very user-friendly map), shows that Japan’s debt is nearly 200 percent of GDP, yet Japanese debt is considered very safe, based on the market for credit default swaps, which measures the cost of insuring debt. Indeed, only U.S. debt is seen as a better bet.

Interest payments on debt may be a better gauge of a nation’s fiscal health. The next chart (2011 data) shows the same countries, and the two nations with the highest interest costs, Greece and Ireland, already have been bailed out. Interestingly, Japan is in the best shape, even though it has the biggest debt. This shows why interest rates are very important. If investors think a nation is safe, they don’t require high interest rates to compensate them for the risk of default (fears of future inflation also can play a role, since investors don’t like getting repaid with devalued currency).

(more…)

The Media is aflutter these days about the imminent return of the economy.   Of course, it marks a stark contrast to the manner in which they covered the Bush economy.  In the months leading up to the 2008 election, the Media was talking the economy down.  Now they are attempting to talk it up.  No amount of Media optimism, however, will change some basic dynamics which will keep the economy in its weakened state or worse for years to come.  As you go through these reasons, keep in mind that consumer spending makes up, and has for years, approximately 70% of the US economy.

1.  Historically High Unemployment.  The unemployment rate remains historically very high.  History also tells us that unemployment takes longer to recover than other economic indicators.  That certainly applies to our current economic troubles.  Despite Pelosi’s claims about how unemployment checks create jobs, the magnitude of our unemployment translates directly into a historically high lack of consumer purchasing power.  That’s true for the 9.8% of unemployed Americans and their families – not to mention those affected by the much higher underemployment rate of  17+%  – and those dependent on consumers.  No one expects unemployment to fall rapidly and therefore this will continue to hurt the US economy for years.

2. The Foreclosure/Mortgage Crisis.  The magnitude of the continuing foreclosure/mortgage crisis continues to be grossly under-reported by the press. (Surprise).  Many believe that foreclosures will actually increase in 2011 over the approximately 1.2 million that occurred in 2010.  Combined with the 2009 numbers, that means over 3 million foreclosures in a three year period.  That depresses housing prices and hurts the housing industry overall which, historically, has led the way in past recoveries.  Worse yet, estimates of the number of mortgages “under water,”  (homes whose mortgage is higher than the value of the home) continues to rise – not to mention those homes which have less equity than the costs of sale.

Looking at it another way, the Federal Reserve believes Americans have lost $6 trillion in home equity since 2006.  All of that translates into nervous homeowners with much lower – if not lost – purchasing power.   That won’t turn around in time for Obama either given his policies.

3. Rising Gas Prices.

(more…)

While chaos theory has had a place in science since mathematician and physicist Jules Henri Poincare first coined the term in the 1880s, it made its way into pop culture with the introduction of the so-called butterfly effect by fiction writers Ray Bradbury (“A Sound of Thunder,” 1952) and fictional chaotician-in-chief Ian Malcolm with his widely popular “Jurassic Park” in 1993. The idea, of course, is that activity that impacts one part of a system can have wide-ranging, unforeseen (and in the case of government interfering in a free-market economy) unintended and undesirable consequences elsewhere in that system.  While we have had no scarcity over the years of political butterflies in both parties incessantly flapping their wings to, generally, no good purpose, we are currently witnessing a truly historic exercise in chaos theory, Washington style.

As we argued in an earlier column this month, the $2.0 trillion in cash (and growing) that has been accumulating throughout the year in corporate bank accounts is more than enough to jump start the economy out of the doldrums in which it has been languishing for the better part of three years.  All of this capital is locked in irons, as our sea-faring friends like to say, chiefly because a muscle-flexing, game-changing government is piling uncertainty on top of uncertainty with largely unwanted new taxes, new programs, new mandates (mostly unfunded), new regulations and new agencies to enforce them.  What’s a well-intentioned businessman to do?

Rather than stepping aside and giving the marketplace a chance to regain its footing after the financial debacle (also largely the result of government malfeasance) that defined the transition of government nearly two years ago, the Administration, Congress and the Fed have elbowed their way, at great cost, into the commerce of the country with dubious to negative results thus far and, for many, with absolutely devastating impact.

Interest rates have been maintained at ridiculously low rates quarter after quarter and, now, year after year.  The Fed has accomplished its goal and made this a heyday for borrowers. Companies and others who don’t even need the money are borrowing to avoid missing this debtors’ bonanza although in many sectors (notably real estate), banks won’t lend because of marketplace uncertainties.

(more…)

It must be a condition of employment that a journalist who writes about the current recession include in his article the statement, “consumption makes up more than two-thirds of the economy” or “consumption spending accounts for 70 percent of GDP.” This seemingly simple, factual statement, however, is nearly always intended to carry some explanatory weight, and on occasion the writer spells out this explanation by adding a statement such as, “unless consumers begin to open their wallets and spend more, recovery from the current recession will be impossible.”

At first glance, this journalistic commonplace appears to make sense. Anyone can understand that, say, a store at the mall will not hire additional employees unless its sales increase enough to justify the additional expense. Hence, would-be employees will remain unemployed; they will purchase fewer consumption goods than they would have purchased if they had jobs; and therefore the stores will not hire more workers; and so forth. The circle of a theory of income and employment seems to be closed, and thus an explanation provided for the lingering recession: consumers are not spending enough.

One does not need a Ph.D. in economics, however, to discover that something must be wrong with this way of thinking about prosperity and recession. Checking the national economic accounts produced by the Commerce Department’s Bureau of Economic Analysis (Table l.l.6), one finds, for example, that the most recent quarterly peak in real personal consumption expenditure occurred in the fourth quarter of 2007. This spending ($9,244 billion at an annual rate) equaled 69.2 percent of contemporary GDP ($13,364 billion at an annual rate)—where the data are expressed in dollars of 2005 purchasing power. Real GDP did not fall significantly until the third quarter of 2008. When it reached its trough in the second quarter of 2009, it had fallen to $12,810 billion, down about 4 percent. At that time, real personal consumption spending was $9,117 billion, down only 1.4 percent, and equal to about 71 percent of GDP. Thus, as usual over the course of a boom and bust, consumption spending varied proportionately less than GDP as a whole.

As every student of the business cycle learns early on, the most variable part of aggregate expenditure is private investment. When real gross private domestic investment peaked, in the first quarter of 2006, it was $2,265 billion, or 17.5 percent of GDP. When it hit bottom in the second quarter of 2009, it had fallen by 36 percent to $1,453 billion, or 11.3 percent of GDP. (Deducting investment expenditures aimed at compensating for depreciation of the private capital stock [Table 1.7.6], we find that real net private investment—the part that contributes to economic growth—in the most recent quarter was only one-third as great as it was at its peak in early 2006.) The ups and downs of the business cycle are obviously driven not by consumption spending, but by investment spending.

(more…)

Putting more and more wolves in charge of guarding the henhouse might characterize the big problems we’ve now created for ourselves.

Government is growing.  The private economy is shrinking. Those wielding political power see fewer and fewer problems they believe private citizens can solve on our own.   Soon, each one of us will have our own personal guardian bureaucrat.

The real difference between us and the hens is that the hens are not paying for the wolves’ salaries and benefits.

This past week new rules governing our credit cards kicked in, following passage of the Credit Card Accountability and Responsibility Act, signed into law last year.

The point of the CARD Act is to protect us consumers from the scheming bankers from whom we get our credit cards.

As result of these new protections, consumers can be grateful that credit card interest rates are the only interest rates that are not now dropping.  According to the Wall Street Journal, the average card interest rate is now 1.6% higher than last year and the gap between credit card rates and the prime lending interest rate is the highest it’s been in 22 years.

More good news for consumers is that there is less credit available.  The average credit limit on new cards being issued is down 11% from last year.

And, because the CARD Act implements new rules limiting the flexibility that banks have, for example, in changing rates on balances of overdue accounts or on exceeding credit limits, banks are simply finding new ways to raise revenue.

(more…)

The bizarre and unlikely rebellion known as the Tea Party began with only a few thousand people in a few dozen places on February 27, 2009. Those of us who were there in St. Louis or Atlanta, Chicago, or Los Angeles, feel a bit of trepidation as we approach the November 2 Mid-Term. Will we live up to our promise? Or will we live under the growing tyranny of debt, taxes, regulation, and corruption.

With so much at stake, let us pause one last time.  Like a football team before the championship game, we need a moment to reflect on what we’ve done, to lend strength to our companions, to reinvigorate our determination, and to ask God’s favor.  On September 12, the American conservative movement will clear its throat and prepare to sing to the world.

In Washington, DC, Sacramento, CA, and St. Louis, MO, tens of thousands of Americans will gather one final time before the most important election in a century. We will do what we always do at Tea Parties: pray, speak, listen, sing, and celebrate.  While we may be angry, we are also joyful that our words find so many welcoming ears, and that our voices blend with so many others.

We will gather together as a family, full of the drama and petty disagreements that seemed so important—so life or death—a few weeks ago. They weren’t important, of course. They were frivolous. But human nature makes mountains out of mole hills.  Until fate places a real mountain in the path to our destiny.

That mountain is debt, government, corruption, and depression.  Its malignant foliage is stolen power, plundered treasures, and trampled rights.  And while that mountain looks mighty and strong, we know that Jericho’s walls fell to trumpets and prayers.  We know that faith can move a mountain.

(more…)

The Obama Administration announced that it will urge government agencies to trim five percent from their budgets by reining in wasteful and duplicative programs – and redirect how that money is spent.  Less than 20 minutes later, the Administration’s Budget Chief Peter Orszag admitted that the initiative was as much about spending as it is deficit reduction.  To be clear, the Administration did not commit to use those cuts to pay down the deficits.

Look, trimming these budgets is a good thing – as Republicans have said repeatedly.  But is giving the heads of these agencies the ability to redirect money really an indication that Washington is prepared to bring our deficits under control before the European debt crisis migrates across the Atlantic?  Or is it simply posturing?

The good news is that the administration, at least on the surface, is finally getting the message that the American people are fed up with the reckless culture of spending prevailing over Washington.  America has soured on an agenda that sets out to double the debt in five years and triple it in 10.  That is why we launched YouCut, an effort to begin to transform the culture in Washington from one focused entirely on spending to one that forces measures to cut waste and save money.

Now, after more than 700,000 YouCut votes have been cast to remove specific wasteful spending items in the budget, and three House votes later (that would have saved $85 billion had enough Democrats supported them), the President is beginning to talk about finding ways to save taxpayer money.

(more…)