Sunday, December 11, 2011

The Eurozone Failure, Here Comes Communism!

Ok, I'm no economist, but I have a fundamental understanding of economics as well as a pretty good understanding of how democratic type government works. It doesn't take a rocket scientist to figure out that the eurozone is screwed, at least for the next ten years.


Heres the problem, the debt is a symptom of a larger problem (socialism/govt dependence). They (the powers that be) know this. So does anyone who has thought about it. When your government debt is 100, 200, 300 percent or more of your nations GDP, its going to take some time to pay off.

Lets think about it in smaller terms, a household. The household income represents GDP, spending represents spending, and debt represents debt. Portugal, Italy, Ireland, Greece, and Spain (PIIGS from here out) all have debt of over 100% of GDP, and government spending of 70+% of their countries GDP.

Alright, So you're household brings in 50k per year, and after taxes 40k (for maths sake), It has a debt over 50k and growing rapidly. Well that's not so bad right? I mean it will only take you 8-10 years to pay off with interest. BUT the problem isn't that it's impossible to pay off, the problem is that the debt will continue to increase because as your kids (citizens) get older, they get more costly in terms of wants and needs (i.e. healthcare, social security, wanting more, etc...).

Unlike a household where those making the money get to decide how to spend it, the government doesn't actually make any money, they take other peoples, and they rely on telling voters that they will take more of other peoples money and give everyone benefits because of it. So its up to the voters to see the problem and stop voting for the guy promising to take other peoples money and give everyone entitlements. This hasn't happened anywhere in the eurozone and the idea is about split even in the states.

One thing we can always count on is that we never believe we have enough. So, couple this with the problem of a democracy above and what happens? Inevitable bankruptcy, UNLESS the people see the error of their ways and change.

I highly doubt that will happen... I mean, look at the riots in greece over the austerity measures. They're not going to change, their only hope is that the next generation will figure it out, but since they have a fertility rate of 1.4 (1.4 kids per couple), that generation is dwindling. So even if they do figure it out, it will take a VERY VERY long time to pay it off. The same can be applied to the rest of the PIIGS.

So this created a new problem, other countries and banks saw the eurozones insolvency and ran as fast as they could (except mf global). That's what any smart investor would do. So liquidity went down the drain (the household income went stagnant). So then they came up with this solution: the ponzi scheme of ponzi schemes! But this is legal because the government is doing it (just like the insider trading). Will it work? Maybe, but it will only solve the liquidity problem. So its another bandaid.

This is where socialism transforms into communism. We've established that this can't be solved while the kids (democracy) are still in charge. So to 'fix' things, they will institute some form of dictatorship, now whether this is through a transformation of government formally, or government signing away the rights of the kids without their knowledge or consent through economic means, is yet to be seen.

One thing is for sure, the current path of the eurozone is unsustainable and will take years to repair, if they even opt to repair it.

Wednesday, December 7, 2011

Obama: The Great Divider

As most of you probably know by now, obama gave his big speech trying to be like a roosevelt. The full, very long winded, speech can be found here. I am just going to go over the highlights and explain how terrible this president really is.

The first false argument he makes is in the first paragraph after the introduction.
Fewer and fewer of the folks who contributed to the success of our economy actually benefitted from that success. Those at the very top grew wealthier from their incomes and investments than ever before. But everyone else struggled with costs that were growing and paychecks that weren’t – and too many families found themselves racking up more and more debt just to keep up.
"fewer and fewer... benefitted from that success." Well that is just false. In fact, even since the collapse of 2008 the rich have gotten richer and there is a record number of them (so, more and more people are becoming rich).

"Those at the very top grew wealthier from their incomes and investments than every before." Thats correct, the rich are getting richer as pointed out above. But here's the catch, what good does all of that money do people like bill gates? You can only buy so many personal items. so once you've got yor five dream cars five houses and every toy you can think of, you're not even close to 100M. So when you are making billions, like gates, what do you with the rest? INVEST! Now they are trying to make this a dirty word, but it's not at all. It's a wonderful thing. This whole class warfare cry of the liberals and obama is on the premise of "giving back". That's exactly what investing is, they buy parks (zuccotti park is privately owned but reserved for public use), they invest in businesses allowing them to grow more rapidly than they would be able to normally, which increases the number of jobs that are out there. The other thing they do with their money is GIVE TO CHARITIES! Just last year bill gates broke the record for charitable giving. He donated 10 BILLION to a charity for vaccines for children.

So their whole argument is based on the false premise that the rich and ultra rich don't give back. They obviously do, bill gates is not an exception, he is exactly what most rich people are like. He himself said that once you get beyond making a few million, its all the same anyway.

The Oblamer goes on to say that everyone else suffered while the rich got richer, that everyone else had to rack up debt to keep up. Well I'm part of that "everyone else" and since 2008 I have paid off all of my debts and built a savings account the size of about half of my annual income. So no, we didn't ALL struggle. Some did, but they need to take responsibility for their mistakes and improve. If you were living beyond your means prior to the collapse, you probably suffered. The lesson to learn is live within your means and be prepared. Debt is slavery. There are certain things you and I have to go into debt for, but before you go into debt on anything, think long and hard about what it will really cost you and how much it will really benefit you. We all make mistakes and need help sometimes, if this is one of those times for you, seek it. Not from the government (which is just taxpayers) but from family, friends, and charitable organizations.

Of course the rich got richer, how do you think they got rich in the first place? by succeeding when odds were against them. There is no risk free formula to success and riches, otherwise we would all have it.

Moving on, he actually gets something right, but I have to take it out of context slightly for him to be correct:
It combined the breathtaking greed of a few with irresponsibility across the system.
Yes, there are greedy evil rich people. But there are even more greedy evil poor and middle class people. He is correct when he says "...with irresponsibility across the system." Yes, the system screwed us into a recession, but it wasn't the capitalist system, it was the government system. He goes on to admit that government agencies saw the problem and ignored it (their job is to find the problems and out them, not ignore them). Which was irresponsible, but it gets worse. Instead letting these firms fail (which would have hurt our economy a lot, but only for a 6 months or so) the government was even more irresponsible and gave them tax payer dollars to "reward" irresponsibility. Earlier in his speech he was reminiscing upon the old america where; "responsibility was rewarded."

Throughout the speech he claims the free market never worked. That's a lie. The free market has always worked. He states that it didn't work the decade before the depression... Has he ever heard of the roaring twenties??? If he is trying to blame the free market for the depression he is a moron. The fed OPENLY ADMITS that they were responsible for the great depression, not the free market. He then goes on to say that the 50's and 60's prosperity happened during high taxes. Taxes are only part of the equation and in the 50-60's taxes were only 17% of the economy!! Also, in the 1950's one in twenty workers required permission from the government to do their job. Today its one in three. Combine higher taxes with that and we will be unable to ever get ahead.

He continues to say that bush cut taxes in 2001 and 2003 and it led to slow economic growth. Well, he must not believe that because just a couple weeks ago he told congress to extend those same tax cuts! He is a liar, that is that.

Side note: Another constant theme in his speech is that Republicans want 'survival of the fittest,' and that's true to an extent. He says it like it's a bad thing, but I'd like to point out that natural selection is a proven method of improving, while governments have a history of destroying, not improving. (I.e. Greece, Italy, China, Germany 70 years ago, etc...)

Friday, December 2, 2011

America, Morally Obligated

This post was prompted by the bull crap I keep reading about the "illegal" Iraq war. These anti-American, anti-freedom, conspiracy theorists annoy me beyond my limits.

Their entire theory is based upon hatred for America (and the west in general) and freedom. They would rather that people be murdered, raped, and beaten, by a dictator and his regime, rather than free with a functioning government of the people. They hate the idea that others may have freedom which is why they are always looking to take freedoms from their neighbors, but I'll get into that later.

The first argument that they bring up is "bush lied". Well this is a flawed argument in many ways. Their target is one person, but if bush lied, so did most all of the west and many high profile democrats including John Kerry (who they probably voted for in 2004).

"Saddam has been engaged in the development of WMD technology which is
a threat to countries in the region and he has made a mockery of the
weapons inspection process."
-- Rep. NANCY PELOSI (D, CA) DEC 16, 1998

"There is no doubt that Saddam Hussein has reinvigorated his weapons
programs. Reports indicate that biological, chemical and nuclear
programs continue apace and may be back to pre-Gulf War status......
-- BOB GRAHAM (Democrat FL) DEC 5, 2001

"We KNOW that he has stored secret supplies of biological and chemical
weapons throughout his country." AL GORE SEPT 23, 2002

"Iraq's search for WMD has proven impossible to deter and we should
assume that is will continue for as long as Saddam is in power"
-- AL GORE SEPT 23, 2002

"We have known for years that Saddam Hussein is seeking and developing
weapons of mass destruction."
-- Sen. TEDDY KENNEDY (D, MA) SEPT 27, 2002

"I believe that a deadly arsenal of WMD in his hands is a real and
grave threat to our security."

"Without question, we need to disarm Saddam Hussein. He is a brutal,
murderous dictator, leading an oppressive regime... He represents a
particularly grievous threat because he is so consistently prone to
miscalculation... And now he is miscalculating America's response to
his continued deceit and his consistent grasp for WMD... So the threat
of Saddam Hussein with WMD is real."
-- Sen JOHN KERRY JAN 23, 2003

"We are confident that Saddam Hussein retains some stockpiles of
chemical and biological weapons, and has since embarked on a crach
course to build up his chemical and biological warfare capabilities.
Intelligence reports that Saddam is seeking nuclear weapons..."
-- Sen. ROBERT BYRD (D, PA?) OCT 9, 2002

"He [Saddam Hussein] has systematically violated, over the course of
the past 11 years, every significant UN resolution that has demanded
that he disarm and destroy his chemical and biological weapons and any
nuclear capacity. This he has refused to do."
-- Rep. HENRY WAXMAN (Democrat, CA) OCT 10, 2002

"We also should remember we have always underestimated the progress
Saddam has made in development of WMD."
-- Sen JAY ROCKEFELLER (Democrat WV) OCT 10, 2002
As we can see, it had been common knowledge for years that Saddam was pursuing a large arsenal of WMD's. Now, they'll usually bring up that the source lied. There were multiple sources that confirmed the same thing, they [the government] just trusted this one the most. When you're misinformed by people you trust, that doesn't make you a liar if you pass on the information, it simply propagates misinformation.

Also, we removed multiple chemical weapons and 550 metric tons of yellow cake from Iraq. Then later, 53 tons more were sent to canada (which was the niger yellow cake, dang it, that destroys the bush lied argument). And lets not forget Iraq had just refused to allow U.N. inspectors in, signaling guilt.

94 countries believed that Iraq had WMD's including Iran and Israel who are enemies, yet their intelligence said the same thing.

So lets move on, bush didn't lie. Now they don't have an argument that it was illegal so they will move on to the idea that we had no business being in there, we aren't the world police. Well I beg to differ, we are the world police, whether we should be or not is up for debate. I think we should be, but only because the world without America is quite scary... just think about it. No America = Germany and Japan winning WWII.

Anyway, this was a very moral war. Saddam gassed the Kurds, tortured his people, killed his people, his sons raped women, killed political dissenters, and in general the Iraqis lived in fear of him daily. We overthrew him and instituted democracy. Ask any Iraqi that lived through the 80's - 90's if Iraq is better now than then, the answer will always be yes. Does Iraq still have problems? Of course it does. But as they evolve into more civil people the (terrorist) problems will dwindle.

Then they'll move on to the war for oil argument, which is absurd. There is ZERO EVIDENCE!! Even if there were some evidence (but there isn't), is it a crime that there was a benefit to overthrowing a vicious dictator? These people hate win-win, they wanted the Iraq war to be a win for Iraq and a loss for America, because they hate America and freedom. Think honestly and rationally, you're overthrowing a dictator, which requires occupation until things settle down. They have natural resources, using them is bad? Why? I mean, if we farmed there would it be stealing too? IF we were using their oil, it was for operations in the region. We weren't shipping it back to the states that's for sure... $4/gallon gas anyone???

So lets reflect,
Bush lied? Nope.
Illegal war? Nope.
Immoral war? Nope.
War for oil? Nope.

A little common sense and research goes a long way.

To use an already overused cliche; "With great power comes great responsibility". America and the west have great power, and thus are required, morally, to police the world to an extent. I wonder what people would say if we didn't help countries in need. Spreading freedom is never a bad thing.