Liberty Maven

Can you answer the following questions?

1. What is the supreme law of the land?
2. What do we call the first ten amendments to the Constitution?
3. What are the two parts of the U.S. Congress?
4. How many Justices are on the Supreme Court?
5. Who wrote the Declaration of Independence?
6. What ocean is on the East Coast of the United States?
7. What are the two major political parties in the United States?
8. We elect a U.S. Senator for how many years?
9. Who was the first President of the United States?
10. Who is in charge of the executive branch?

Hopefully you can answer most (if not all) of these basic questions correctly. But these questions were presented to 1,134 [public] high school students in Arizona, and not a single one could answer more than seven out of ten correctly.

The biggest shocker (for me) is that more than 73% couldn’t name George Washington as our first president.

Wow. What more proof do we need that public schools have failed?

Sometimes, out of curiosity (or perhaps some masochistic tendency), I’ll listen to neoconservative talk radio (Limbaugh, Hannity, or a local personality) to see what they have to say about the day’s events.  Usually I am quickly sickened with complaints about how suddenly everything is going to hell in a handbasket now that Obama is president.  They conveniently ignore the fact that President Bush was much like Herbert Hoover (only worse).  He increased the federal budget enormously (much of it on domestic spending) and worked to give unprecedented (and unconstitutional) powers to the executive branch, among other things.

Yes, Bush was a terrible president.  Some argue that his abuses should be considered traitorous and he should be convicted for treason.  Then today I ran across an interesting article by Bush-hater Ted Rall in which he pines for the “good old days” of George Bush:

I haven’t forgiven George W. Bush for stealing two elections, starting two wars, bankrupting the treasury and doing his damnedest to turn the U.S. into a fascist state. He deserves one of hell’s hottest picnic spots for refusing to lift a finger to bring the 9/11 murderers to justice. Bush was stupid. He was vicious. He should be in prison.

He was the worst president the U.S. had ever had. Until this one.

On major issues and a lot of minor ones, Obama is the same as or worse than Bush. But Bush had an opposition to contend with. Obama has a compliant Democratic Congress. Lulled to somnolent apathy by Obama’s charming manners, mastery of English (and yes, the color of his skin), leftist activists and journalists have been reduced to quiet disappointment, mild grumbling and unaccountable patience.

I don’t care about window dressing. Sure, it’s nice that Obama is intelligent. But policies matter–not charm. And Obama’s policies are at least as bad as Bush’s. [Continue Article]

By John Browne – Senior Market Strategist, Euro Pacific Capital.

Through its rhetoric and actions, the Obama Administration has made it clear that no matter the current or future costs, the federal government will not allow a collapse of the banking system. The resulting aura of certitude has, in turn, encouraged investors to roll the dice one more time. Some of these investors are likely trying to make good prior investment losses through speculative trading in U.S. equities. The surety of the government guarantee has sadly allowed them to overlook the fact that U.S. corporate earnings continue to fall.

So, as is the case with all government guarantees, the risks our economy faces are now disproportionate to the opportunities. Haven’t we been down this road before?

The operative question remains whether the government can reward the current round of investment by averting an economic depression. If not, what is the justification for investing in U.S. equities or high-yielding corporate bonds?

Given that the majority of government spending is on corporate bailouts and social programs, rather than infrastructure improvement, I would argue that the odds of recovery are long.

Economists broadly agree that greater economic bang for the buck is achieved through infrastructure spending. It is surmised that for every $10 billion spent on infrastructure, some 35,000 real, wealth-creating jobs are created. Therefore, a government spending $1 trillion should create some 3.5 million new jobs.

When President Eisenhower, the last big spender on infrastructure, left office in 1961, infrastructure amounted to some 12 percent of federal spending. The ensuing generations have neglected such spending in favor of wealth transfers and efforts to control social development. Today, only some 2.5 percent of the federal budget goes towards infrastructure.

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An excellent op-ed in the Washington Times today authored by Congressman Ron Paul hammers home the Old Right ideas of non-interventionism in foreign policy arguably better than he ever did during his Presidential campaign.

Paul writes:

Neoconservatives who have come to power in both the Democratic and Republican parties argue that the U.S. must ether confront every evil in every corner of the globe or risk danger at home. We need to “fight them over there” they say, so we don’t have to “fight them over here.” This argument presents a false choice. We do not have to pick between interventionism and vulnerability. The complexity of our world is exactly why the lessons of our past should ring true and demand a return to a traditional, pro-American foreign policy: one of nonintervention.

In this piece Ron Paul seems to be taking some lessons from his son Rand. Paul the elder is framing his non-interventionist foreign policy beliefs in a way that should be less off-putting to die hard neo-conservatives.

This is truly Ron Paul at his best. Read the entire article here.

I was perusing the Federal Budget recently, and I had sort of a knee jerk reaction to most of the items I saw.  Keep in mind, what I propose below is only a starting point, and it is in no way meant to be a “final draft”.  I’m extremely interested in your input!

1st draft tax plan:

1. GIVE AWAY AMTRAK.  Privatizing CONRAIL worked, this will too. Savings: $1.4 Billion annually. Privatizing it also has the effect of generating tax revenues, as private ownership will make it profitable.
2. Sell (at a minimum) 1/2 of all land owned by the Federal Gvt.  “We the people” currently own an estimated 999,390,920 acres, about 44% of ALL US landmass.  By the way, the Bureau of Land Management has no idea how much land it (we) own(s) anymore. Sell for $500/acre, generating $499,695,460,000, yep, that’s almost $500Billion.  Besides, why does the Federal Gvt need all that land?  Why are they aquiring more every day?
3. Eliminate the Department of Education.  Savings: $178 Billion annually.
4. Eliminate the Department of Agriculture. Savings: $124 Billion annually.
5. Bring ALL troops home, including closure of all foreign military bases (we don’t need troops in Europe and Japan. . .), estimated annual savings: $325 Billion (half the annual budget).
6. Cut the Deparment of Health and Human Services.  Thanks so much for telling us to wash our hands to avoid the pig flu!  Common sense costs us: $71 Billion annually.  They administer Medicare and Medicaid also, both complete failures that are underfunded (and we want to Nationalize healthcare? – we’ve already proven we can’t manage it!), which constitutes $666 Billion annually.  It, as should social security, be a voluntary, not mandatory, system.
7. Eliminate the Department of Homeland Security (this can be taken care of in our normal military budget).  Savings: $44 BN
8. Cut Department of Housing and Urban Development in half at a minimum.  There’s $300 MN in there for housing for persons with AIDS, enough to buy 1,500 homes for $200,000 each.  Savings $105 BN
9. Cut Department of Labor in half at a minimum, savings: $27 BN
10. Cut Department of State in half at a minimum (we fund foreign military to the tune of $5 BN a year, and disburse loans to foreign governments in the amount of $15 BN – which we’ll never get back).  Savings: $35 BN.
11. Eliminate, at a minimum, the entire IRS, as you’ll see reasoning for below, from the Treasury Dept, saving $11 BN

Total Savings / Earnings: $1.422 Trillion

12.  Eliminate graduated scale federal income tax and replace with fair tax based on purchases – no tax on food, at all!!  Set Federal fair tax rate @ 10% max (we could delve into this more and probably wriggle it to 8% or less).  Total sales taxes (when including local) capped @ 20% (I don’t think any local ST is over 10%, is there?).  Furthermore, you don’t need a complicated system to file returns, etc.  You make your purchase, you’re done.  Businesses file sales tax returns, this would just be one more line.

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Caveat emptor. Buyer beware.

Originally published Tuesday, June 30, 2009 at http://www.nolanchart.com/article6577.html

“Honey, whaddya do for money?
Yeah, whaddya do for money honey, how you get your kicks?
Whaddya do for money honey, how you get your licks?”

- ACDC, “What Do You Do For Money Honey?“

A May 2009 Wall Street Journal article details that many employees and newly unemployed are having issues with withdrawals and redemptions from their company-sponsored, government-tax-deferred 401k retirement plans. The only employer named in the article is the energy giant BP, but 401k providers listed include State Street Corporation, a major bank, Northern Trust, and Principal Financial Group.

Some investors have found their money either frozen and unable to be withdrawn, or redemption rates much slower than expected. One man was laid off from an undisclosed manufacturing job and was unable to access $40,000 in funds held by Principal Financial Group. “I hate to be whiny, but it is my money,” he said.

Typically in a 401k plan, one must be laid off or resign before having full access to withdrawal funds, but there are, of course, loopholes and rules that vary from plan to plan, and from fund to fund. Typically when funds are withdrawn, especially prior to age 59, they are taxed as income AND taxed a 10% additional penalty.

Even as Madoff is sentenced to 150 years, many have forgotten that there are likely many other Ponzi schemes still out there, whether it’s the FED, Social Security or other Madoff investment schemes. And no, the government itself has certainly not yet blocked withdrawals from 401k’s – any move by lawmakers to inhibit redemptions would likely cause a panic and populist uproar.

I am not a financial advisor, but I would suggest that it is merely a matter of prudence for any reader with an active 401k or IRA plan to educate themselves on withdrawal methods and confirm that withdrawal lines are still solvent, if you choose to invest in these vehicles and are not already 100% aware. Caveat emptor.