Jim Rogers, Ron Paul & Tom Woods Interviewed By Judge Napolitano

In a veritable quad-fecta of freedom loving interviews, Judge Napolitano interviews Congressman Ron Paul, Mises academic Tom Woods (and friend of TILB), and legendary investor Jim Rogers in this assembled video

Fourth in the quad-fecta is the combination of John Papola and Russ Roberts interviewed about their famous rap video concerning the debate between Hayek and Keynes.

Inflation Nation - Prepare For The Coming Hyperinflationary Dollar Collapse

Dammit.

TILB has been trying to post less frequently and to have those infrequent posts avoid frustrating topics such as the destruction of our economic and social future. You can understand that.

I've established many times over that nobody cares, so why even keep banging the gong...particularly when it seems I'm banging it with my forehead instead of a mallet?

As an aside, friend of TILB and thief (before I invented it) of the phrase Tooth Fairy Economics Tom Woods makes several appearances in this video as do several other TILB mancrushes like Ron Paul, Peter Schiff, Mark Faber, and Uncle Jimmy Rogers.

This is the best video I've seen since Chris Martenson's Crash Course collection (someday I'll post about that video collection - if you haven't watched it yet, you must stop everything you're doing and spend a few hours watching immediately - link here).

I've been meaning to sit down and write more about the value of money, why price deflation is the natural course of the world (a good thing, btw!), and why not all GDP is created equal, but honestly, it's an emotional drain to reflect on and write about these ideas and it requires more of my head banging the gong. But I'll get to it, because while I'm sure nobody reads this, much less cares, I find the anguish and process of putting myself through it strangely beneficial.

In any case, watch this video and watch the Crash Course. As the great Cypress Hill has warned us so many times, "when the shit goes down, you better be ready...YOU BETTER BE READY!!" Indeed



PS: Please do me a favor and buy some actual, physical gold. It's for your own good.

Keynesianism Is So Nuanced

[This will be a multi-part series that discusses inflation, what money is and why it has value. We begin with some basics through the lens of Keynesianism's "attractiveness".]

I was on an email string recently about The Carnegie Endowment for International Peace's Uri Dadush. I made the statement that Dadush is simply a Keynesian, albeit one that is well connected and understands there are many difficult challenges that need to be addressed. In response to my email, a long-time friend of TILB and fellow liberty loving free marketer - though he is still finding his legs with regards to understanding the implications of his beliefs - responded to me that he has spoken at length with Dadush and that he's more nuanced and "complex" than being simply called a Keynsian. Here's a quote from Dadush's recent FT OpEd:

There are ways to mitigate the pain. For example, Germany and other countries could adopt more expansionary fiscal policies for a while. Or, more powerfully, the wider euro area could adopt more expansionary monetary policies for several years. Today, this second option is anathema as the “inflation fundamentalists” will have none of it.

Nuanced? I guess.

Here's what my friend said (mind you, he's an avowed libertarian - though he's still figuring himself out so to speak) - light editing for privacy reasons or clarification:

I met with the guy for 2 hours, and I would not classify him as such [a "strong Keynesian with fairly mainstream opinions"]. If anything, he is complex – and clearly what he says on CNBC and in NY Times oped is not what he can say behind closed doors. While Keynesian, he is not a classically academic Keynesian, sitting in a library dealing with only theory. He counsels governments facing massive social unrest and high unemployment, and he approaches his work with a much deeper appreciation for the human situation than we can. So while espousing money creation below, he was also very pragmatic with me about the moral hazard of this choice, the continued low interest rates, our over-reliance on debt, etc.

I am sympathetic with his situation. We often throw around our ideas without considering the reality of what will inevitably happen – at least in the short term – if our ideas were implemented. I know you will vehemently disagree with me on this, but the fact is that – again, in the short term – what you and I want ideally is economically wishful thinking and politically impossible. Yes, the opposite will bankrupt the world, and we are largely already insolvent. There’s no argument there. Should we suddenly balance our budget, shrink government dramatically, stop stimulus, war, and over-regulation, the result could be 50-60-70% unemployment rates – in the short run. I do believe the LT benefits of Austrian economics are obviously far superior to the Keynsian ponzi scheme.

However, no one talks about the transition, and what it would really mean for us. If you take a heroin addict, and suddenly “reform” him with complete withdrawal and going cold turkey, he will often die from this. His body cannot handle the shock.

Uri had just met with the Italian Finance Minister prior to seeing me – I can imagine that conversation. How do you convince someone like that that what he really needs is to leave the EU, get on the gold standard, balance his budget, cut taxes – and face assassination b/c 100 million are thrown into convulsions?

My point is that Uri deals with the reality of our current situation, while we do not. We read letters and books, then pontificate and rant without a good understanding of what it really means. It will kills us eventually, yes. But it will be a long, slow death probably instead of a quick one.

Lastly, I’ve read Ron Paul, Murry [sic] Rothbard, etc. They all talk about how wrong things are – and I agree with them. I have yet to see a transition plan, so if you know of anything they have written on how to get off the system we are currently addicted to, I’d love to read it.

I decided not to send him a reply by email. Instead, I decided to bring the discussion to TILB, as it's a more productive forum for this sort of thing. To be direct, I disagree with a number of his assertions.

In my opinion, what you described is in fact classic Keynesianism. No self respecting Keynesian would claim that running large deficits and printing money is a long-term viable solution or economically healthy approach. That is simply the tag line non-Keynsians use to belittle the Keynsian approach. It's the politicization the word "Keynesian" but not the reality. Dadush is a classic, behind-the-desk academic Keynesian. He provides advice based in theory as does every other economist, Austrian or otherwise.

The Keynesian argument is always more nuanced or "complex". The argument is generally that goverment needs to implement aggressive and targeted public spending policies during difficult economic periods because taking the hard medicine in the middle of a recession would (they believe) be too painful and counterproductive. By putting it into human terms it becomes very powerful (for obvious reasons) even if - in my opinion - the Keynsian trade is to attempt to avoid some human pain today in exchange for accepting much more human pain in the future.

What's here is tangible and it matters more to voters than tomorrow's pain.

So if we can just take a few easy money bong hits and confuse our body into thinking it's healthy, we can take the hard medicine then. We'll do what needs to be done, but just not yet. Tomorrow. Always some day in the future.

As you know, the issue is that the recession is not the problem, the recession is the cure. It's the cure to profligacy; a recession is simply a period of excess savings that offsets periods of excess spending and consumption.

Switching from a societal bias toward spending to one of savings is painful because society was confused by the profligacy into setting up a structure that serves society's apparent "needs" as if the profligate period is normal. The profligacy is full of false/unsustainable demand signals that trick people into creating/investing in the wrong kinds of businesses or in the wrong amount. The longer the cure is postponed by inflicting more easy money and socialist disease (e.g., Dadush's prescription), the more painful the necessary recession will be because the imbalances are greater and become more depended on.

It's not just imbalances as defined as switching from spending/borrowing to saving/investing. It's that entire industries were created to serve an unsustainable consumptive demand rather than productive advancement. It requires more than just saving new capital, but shifting existing capital from entire industries and possibly geographies to others. A human toll is left in the wreckage of these corrections. It is, however, unavoidable.

What is avoidable is compounding the problem through continued interference with the needed correction.

Bernanke/Bush/Obama's current postponement means the next recession (assuming we are - in fact - past "this one") will feel worse than this one. Their fight of postponement is really an attempt to induce even more capital to become malinvested toward less productive industries and to have us become even more dependant on unsustainable behaviors. So there will never be a period in which the hard medicine can be comfortably consumed because the hard medicine IS the recession and the imbalances it wants and needs to address continue to grow in the meantime. So avoiding taking the hard medicine means avoiding curing the disease; allowing it to metasticize, take root, grow and spread.

You know me well and you are correct: I do vehemently disagree with your statement. Short of a major North American landwar, there is virtually no scenario in which a society as productive as ours would experience anything like "50-60-70%" unemployment rates, even if one mistakenly changes the whole system in one yank.

Ron Paul and others have addressed transition plans. They logically begin with the easiest part: balancing the budget while cutting taxes. By taxing less and borrowing less, capital remains in private (productive) hands and out of public (unproductive) hands. Sounds hard, but if you are of the opinion that most of government is value-destructive, it's actually easy. First, bring the troops home and end the American military empire abroad (foreign military bases). Those two actions are somewhere in the $500 billion to $750 billion annually of savings (1/3 to half of our expected deficit this year and 100% of our deficit from three years ago). Other than for providing a platform for safe living and investment, military is a non-productive expense, by definition. Then end most of the "Department ofs", as I call them. Dept of Education, Dept of Interior, Dept of Energy, Dept of Homeland Security, etc. and slash the size of those you keep, emphasizing of course a strong defense (not offense - defense). This is key, bringing home the military does not mean having a weaker defense. It means changing the nature of it and allowing us to invest in true defense rather than wasting investment on overseas bases.

These cuts are - importantly - phased in but transparent and forecast so that the change is digestible.

That's the easy part. The harder part (though made much, much easier by having already shifted to a smaller government that runs a balanced budget) is moving to a harder currency. This involves ending the Fed and installing free banking, which means a banking system that doesn't "create" money with customer deposits. My personal view is the only way to do that is a slow, planned, well understood phase-in. It might take two decades to let happen so that the adjustment is manageable. I believe the huge benefits reaped from freeing capital from government hands would unleash such a lollapalooza of positives on society that shrinking the banking system would actually shift from an economic headwind to a tailwind by the latter years of the process.

As a final aside, in contrast to your assertion, I am not actually a government-installed-gold-standard man, because it relies on government to be well behaved. I am for market-based money, but that's a discussion for another day.

Ron Paul Ties Obama In National Rasumessen Poll

Okay, technically it is 42% Obama and 41% Ron Paul, but that's a statistical dead heat and at this point most people are still learning who the great Congressman from Texas is.

Prediction: nobody reports on this and somewhere Bill Kristol makes an excuse for this.

We hold out some modest hope for actual change...

Link to the poll.



[HT: LB]

Ron Paul On The "Health Care" Frankenstein Passage

We lost a chunk of freedom tonight as we continue the process of putting enough weight on our own shoulders that we collapse under its mass.

I can't bring myself to talk about this health care travesty. It's just so sad, immoral and unsustainable. To quote Congressman Ron Paul when asked what it will take to repeal the health care bill, "the bankruptcy of this country will repeal it... It will end, it will end badly and it will hurt the people that many [other] people are very seriously trying to help with medical care... Every country in the world today is on the verge of bankruptcy..."

Anyway, I'll let Congressman Ron Paul tell you about this debacle:

Senator Jim Bunning Folds

Well, I guess he got what he wanted. He managed to get the Senate to sacrifice its "black liquor" subsidy to pay for the unemployment extension. At least he had principles, even if the fireworks didn't fully manifest. It feels somewhat anti-climactic (though perhaps not to holders of Boise warrants - you know who you are).

I'll always remember Bunning as "that guy that held up the Senate at gun point...and retired his seat creating an opportunity for Ron Paul's son Rand Paul to be elected to the U.S. Senate." Ah, you remember him, don't you? You know, That Guy? Oh, yeah, That Guy.

From this WSJ article:

WASHINGTON—The Senate Tuesday reached a deal to lift Sen. Jim Bunning's blockade of a bill to extend unemployment benefits, following new moves by Mr. Bunning's fellow Republicans to distance themselves from his tactics.

The agreement allowed Mr. Bunning (R., Ky.), who had complained that the $10 billion bill was not paid for, to offer an amendment that would fund the legislation by rescinding a tax credit for a paper manufacturing byproduct.

His amendment was expected to fail later Tuesday night. After that vote, Mr. Bunning was set to lift his objection to the underlying bill, which was expected to pass.

Mr. Bunning argued that the unemployment bill violated congressional rules requiring new initiatives to be paid for. Democrats said the extension was emergency legislation, exempting it from those rules. The public relations battle appeared to be playing out in the Democrats' favor as more than 100,000 jobless workers saw their unemployment benefits dry up this week.

Democrats also agreed to allow Mr. Bunning to offer two amendments on Wednesday to a longer-term extension of unemployment benefits and other programs. Both amendments are expected to propose ways of paying for that larger measure.

After the deal was reached, Mr. Bunning reiterated his argument that federal spending was out of control.

"If we cannot pay for a bill that all 100 senators support, how can we tell the American people with a straight face that we will ever pay for anything?" he said. "That is what senators say they want, and that is what the American people want."

Democrats said Mr. Bunning had been offered the same deal last week but refused to take it. "The real question in this debate is who we are as a nation," said Sen. Richard Durbin (D., Ill.). "Do we care about these people, these breadwinners who are down on their luck?"

Mr. Durbin objected to Mr. Bunning's proposal to pay for the bill by rescinding a tax credit for "black liquor," a paper manufacturing byproduct, saying this revenue source was already set aside for another measure.

Mr. Bunning had held up the unemployment-benefits extension by objecting to Democrats' "unanimous consent" request to advance the legislation, a routine procedure that requires all senators to go along.

Jim Bunting Gives The Finger To...Well, To Everyone

...and we here at TILB fucking love it.

Before reading the below article, I didn't know jack about Jim Bunting save for one thing: he is retiring and his resignation has paved the way for the very real possibility that Ron Paul's son Rand Paul is elected to the U.S. Senate as Bunning's replacement.

That fact alone makes Bunning a hero in our eyes: even accidentally paving the way for potentially putting a Paul in the Senate is deserving of hero's praise.

But now we've learned one additional piecce of information about Senator Jim Bunning: he is single handedly holding up the extension (yet again!) of socialized unemployment and healthcare benefits. Workers already have had them extended from 26 weeks of state provided benefits to 26 weeks of state benefits plus 73 weeks from the Federal government! WTF!

Now without this extension, everyone is getting cut off once their current tier of benefits expires. While obviously it sucks tremendously for needy unemployed people, it is principled. All Bunting is saying is, (paraphrasing) "we need to cut an equal amount from somewhere else in the budget. I'm not going to be responsible for increasing the deficit any further given we already can't pay for what we have."

It's literally 99 to 1 in the Senate but it takes unanimity to extend an existing law without going through the traditional legislative process of actually passing a new law. As The Great Jim Bunning said on the Senate floor:

"If we can't find $10 billion to pay for something that we all support, we will never pay for anything on the floor of the U.S. Senate."

Amen Saint Bunning. Amen.

Oh, and because he's retiring and is basically untouchable as a result, he's literally flouting his opposition, including flicking off the media. Further, he actually told the Honorable Gentleman from Oregon, "Tough shit" when Senator Jeff Merkley criticized Bunning's stance.

I don't want to know anything else about the guy. Don't ruin this image of perfection.

I'm sure learning additional information would sully him in my eyes. But for now, he's perfect. On the one hand, he's going Mantan Moreland on them and putting his dick in the Senate's proverbial mashed potatoes while providing space for Rand Paul on the other.

Genius.

I'm gonna stick my dick in the mashed potatoes sound bite  Beastie Boys sound bites

Stay strong, Jim. Stay strong.

Here's the Yahoo! article.

[HT: TD]

The Borg, I Mean Obama Administration, Proposes Federal Price Controls On Health Insurers

Good lord, our president has no shortage of self-assuredness in his ability to control all aspects of society. Thomas Sowell preciently warned us of this prior to the 2008 election.

The Administration is apparently going to take another crack at health insurance reform (rather than healthcare reform) by imposing federal price controls on the insurance industry. The modicum of respect that I retain for the man declines everyday as his populist exploitations accumulate.

I mean, federally imposed price controls have worked so well in other areas of the economy. Fortunately, this effort is unconstitutional and clearly impedes states' rights and oversteps constitutionally limited federal authority. Unfortunately, we all know that Obama views the constitution as a simple set of best practices recommendations rather than the fundamental underpinning of the relationship between man and his servant government.

If it is not yet screamingly obvious that price controls reduce competition, reduce service quality, and impair productivity, then it never will be. There is not one sector of the economy that the government has ever successfully improved through price controls.

Here is the New York Times article on the topic of The Administration's efforts to set prices.

What's ironic is that every industry the government is heavily involved subsequently earns a terrible reputation: public schools, health care, banking, insurance, defense, etc. These are businesses that have costs that rise in excess of inflation and productivity gains that lag it. However, industries that are relatively more free such as high tech, retail, and consumer goods reflect the opposite: improving productivity, declining costs, and increasingly customer friendly prices and products.

The obvious answer is to free the health care and insurance sector of governmental interference and watch them blossom. Sadly, this will not happen under the rule of a man that believes he can impose better outcomes than individuals would receive through freedom (or, in the case of insurance, local judgement).

The Revolution Marches Forward

I have nothing to add.

Ben Bernanke Defends The Indefensible: The Fed

As we occasionally do with OpEd's intended for broad public distribution, we provide below the complete version of Bernanke's ridiculous defense of the Fed's ability to hide its actions from Congress and his table pounding support for the Fed's place as a regulator.

These ideas are of course ridiculous on their face, as the power to destroy our currency and thus our country should be watched closely (it should never be granted in the first place, but certainly we should have a right to understand what they are doing and who benefits). Further, The Fed has obviously been an abject failure as a regulator (a cursed job to begin with, admittedly).

Anyway, from The Washington Post.

The right reform for the Fed

By Ben Bernanke
Sunday, November 29, 2009

For many Americans, the financial crisis, and the recession it spawned, have been devastating -- jobs, homes, savings lost. Understandably, many people are calling for change. Yet change needs to be about creating a system that works better, not just differently. As a nation, our challenge is to design a system of financial oversight that will embody the lessons of the past two years and provide a robust framework for preventing future crises and the economic damage they cause.

These matters are complex, and Congress is still in the midst of considering how best to reform financial regulation. I am concerned, however, that a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions. Notably, some leading proposals in the Senate would strip the Fed of all its bank regulatory powers. And a House committee recently voted to repeal a 1978 provision that was intended to protect monetary policy from short-term political influence. These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States. The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation.

The proposed measures are at least in part the product of public anger over the financial crisis and the government's response, particularly the rescues of some individual financial firms. The government's actions to avoid financial collapse last fall -- as distasteful and unfair as some undoubtedly were -- were unfortunately necessary to prevent a global economic catastrophe that could have rivaled the Great Depression in length and severity, with profound consequences for our economy and society. (I know something about this, having spent my career prior to public service studying these issues.) My colleagues at the Federal Reserve and I were determined not to allow that to happen.

Moreover, looking to the future, we strongly support measures -- including the development of a special bankruptcy regime for financial firms whose disorderly failure would threaten the integrity of the financial system -- to ensure that ad hoc interventions of the type we were forced to use last fall never happen again. Adopting such a resolution regime, together with tougher oversight of large, complex financial firms, would make clear that no institution is "too big to fail" -- while ensuring that the costs of failure are borne by owners, managers, creditors and the financial services industry, not by taxpayers.

The Federal Reserve, like other regulators around the world, did not do all that it could have to constrain excessive risk-taking in the financial sector in the period leading up to the crisis. We have extensively reviewed our performance and moved aggressively to fix the problems.

Working with other agencies, we have toughened our rules and oversight. We will be requiring banks to hold more capital and liquidity and to structure compensation packages in ways that limit excessive risk-taking. We are taking more explicit account of risks to the financial system as a whole.

We are also supplementing bank examination staffs with teams of economists, financial market specialists and other experts. This combination of expertise, a unique strength of the Fed, helped bring credibility and clarity to the "stress tests" of the banking system conducted in the spring. These tests were led by the Fed and marked a turning point in public confidence in the banking system.

There is a strong case for a continued role for the Federal Reserve in bank supervision. Because of our role in making monetary policy, the Fed brings unparalleled economic and financial expertise to its oversight of banks, as demonstrated by the success of the stress tests.

This expertise is essential for supervising highly complex financial firms and for analyzing the interactions among key firms and markets. Our supervision is also informed by the grass-roots perspective derived from the Fed's unique regional structure and our experience in supervising community banks. At the same time, our ability to make effective monetary policy and to promote financial stability depends vitally on the information, expertise and authorities we gain as bank supervisors, as demonstrated in episodes such as the 1987 stock market crash and the financial disruptions of Sept. 11, 2001, as well as by the crisis of the past two years.

Of course, the ultimate goal of all our efforts is to restore and sustain economic prosperity. To support economic growth, the Fed has cut interest rates aggressively and provided further stimulus through lending and asset-purchase programs. Our ability to take such actions without engendering sharp increases in inflation depends heavily on our credibility and independence from short-term political pressures. Many studies have shown that countries whose central banks make monetary policy independently of such political influence have better economic performance, including lower inflation and interest rates.

Independent does not mean unaccountable. In its making of monetary policy, the Fed is highly transparent, providing detailed minutes of policy meetings and regular testimony before Congress, among other information. Our financial statements are public and audited by an outside accounting firm; we publish our balance sheet weekly; and we provide monthly reports with extensive information on all the temporary lending facilities developed during the crisis. Congress, through the Government Accountability Office, can and does audit all parts of our operations except for the monetary policy deliberations and actions covered by the 1978 exemption. The general repeal of that exemption would serve only to increase the perceived influence of Congress on monetary policy decisions, which would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation.

We have come a long way in our battle against the financial and economic crisis, but there is a long way to go. Now more than ever, America needs a strong, nonpolitical and independent central bank with the tools to promote financial stability and to help steer our economy to recovery without inflation.

The writer is chairman of the Federal Reserve Board of Governors.

End The Fed.

Ron Paul Interview With John Stossel

First off, your TILB wrote in Ron Paul in last November's election and, as such, we admit to a large degree of bias. That said, having somehow never before seen this video series of Ron Paul's extensive interview in April 2008 with John Stossel, we walk away saying that amongst his more modern interviews, this is the most clear depiction of Congressman Paul's views we have seen. Absolute must watch. Stossel does a great job of challenging our favorite Congressman without being argumentative and allowing plenty of time for response.

It seems virtually impossible for Dr. Paul to be more different than President Obama.

The below is Part 3 of 6, as Ron Paul talks about the role of military and foreign policy.

Ronald Reagan's Speech Supporting Barry Goldwater At 1964 GOP Convention

This speech is considered by many the great speech of modern republican history. Small government, firm but humble economic policy, inalienable rights, low taxes, low spending, government as a servant not a master, balance budgets. While many GOP politicians parrot those ideals, they practice anything but.

Watching this speech makes you quickly realized how far the GOP has drifted...this, despite invoking the name "Ronald Reagan" so often. Other than a few voices that are largely ignored - such as Ron Paul - most mainstream Republican politician bare little similarity to this man's views.

It is worth your time.

There Is No Such Thing As "Government" Spending

There is no such thing as government spending. Period.

The government is not a private citizen that creates wealth that it subsequently uses for its own investment or consumption. The government does not "earn" money.

The government is simply a conduit through which we make collective decisions.

Government is, in essence, a private club with broad membership. It makes regular assessments (taxes) to fund what we require of it. However, unlike most clubs, it does not assess members evenly or based simply on usage, it actually charges successful members (from a monetary success standpoint) a greater assessment than less successful members. It charges an uneven rate for its membership.

We make the point about the non-existence of government spending because we believe it is vital to understanding what "government spending" actually is. Government spending is simply the act of taking money from certain citizens to use for some purpose that, presumably, those citizens would not make via the sum of their individual collective decisions. It serves as an override on individual liberties in the name of the greater good.

In order to grasp this important idea - that the government has no wealth to spend that it does not first take (or prepare to take via borrowings) from its citizens - we need to recognize that this is a limitation on freedom; that man should not be allowed to retain the fruits of his labor or to use them as he sees fit.

Warren Buffett wrote that value investing is like an inoculation: it either quickly takes or it never does; once explained people either quickly grasp the concept or they never do. The concept of government spending that we are talking about is similarly an inoculation: you either quickly understand or you don't that if you ask your government to spend on something, you are asking the government to take money and liberty from your fellow citizens and redirect it toward your purposes and away from theirs.

The majority of people either do not understand this or willfully ignore it...and yet it is so fundamental to our lives.

TILB was skimming Facebook the other day and noticed that a friend from college wrote, after being frustrated with her inability to get private health insurance at a price she appreciated, "bring on the Obama health care plan." Her view was that the government should spend "its" money on her health care insurance rather than her spending her own money. If instead we worded her desire as, "I would like to force my neighbor to pay for my health care plan because I don't like having to pay for it myself," we would quickly extrapolate the implication that her actual request is for the few to pay for the needs of the many. Clearly her request is not that the burden or assessment should be made equally, otherwise she would reap no benefit. Rather, she implicitly believes it should be an unequal system. She obviously does not believe she should pay for other folks' health care; she doesn't even think she should have to pay for most of her own! Instead she wants to go up the pyramid and take resources from the few and shower them on the many.

Yet I honestly doubt she recognizes that is the essence of her request.

We cannot ask the government to spend in a vacuum. All we can do is ask the government to confiscate wealth from our neighbor in order to sprinkle our neighbor's former wealth onto others or ourselves. When thought of this way, the insidiousness of "government spending" comes quickly to light. It seems easy to ask the faceless, bottomless pocket of government for more handouts. It is quite another thing to go next door and shakedown our neighbor to their face.

Sadly, that is exactly what a request for government spending is: an impersonal way of requisitioning our neighbor's wealth.

TILB stands against this theft of liberties other than for limited constitutional purposes: national defense, protecting personal liberties, prosecuting cheats, and contract enforcement. All else falls outside the duties of government. If not explicitly limited in this way, the incremental theft of freedom becomes too easy to give into and the desire too great to resist.

After writing the above paragraph, TILB went searching for a good quote on the matter. We came across the below from Congressman Ron Paul, which we will leave you with for today:

"In a truly free nation, the government acts only as a referee by protecting property rights, enforcing contracts, prohibiting force and fraud, and providing national defense. Such was the system [envisioned] by the Founding Fathers, who strictly limited regulatory and tax powers in the Constitution. They were tired of having their business affairs managed by the Crown, so they created a servant government that would allow freedom and capitalism to flourish.

"Today’s political rhetoric demonstrates that the servant has become the master. Most politicians, and too many Americans, have accepted the premise that government should plan our lives and control the economy. This subservient mindset encourages political pandering, as candidates strive to convince voters of their superior plans to take care of all of us. For a nation founded upon rugged individualism and self-reliance, the modern political landscape represents a wake-up call. Unless and until Americans begin to reclaim the mentality that made us great, we are destined to slide further into an economic and political malaise that cannot be solved by the grandiose plans of politicians."

PS: Keep your eyes peeled for a similar post in the future about corporate taxation, which is a misnomer. There are, of course, no corporations that are not ultimately owned by people. Corporate tax is simply another form of personal income tax.

Liberty Quote Of The Day: Ron Paul

Avowed protector of Liberty, Congressman Ron Paul tells us what freedom really means. Folks less familiar with Texas's great Dr. No should realize that when Ron Paul talks about robbing our neighbors, he means it both literally and figuratively. For those that follow our Liberty Quote of the Day series, you understand that in most modern forms, taxes, monetary inflation (money printing), and governmental borrowing are the primary forms of the figurative theft he (and we) refer to (see our recent Cliff Asness or Francisco D'Anconia quotes, for instance).

"The most basic principle to being a free American is the notion that we as individuals are responsible for our own lives and decisions. We do not have the right to rob our neighbors to make up for our mistakes, neither does our neighbor have any right to tell us how to live, so long as we aren’t infringing on their rights. Freedom to make bad decisions is inherent in the freedom to make good ones. If we are only free to make good decisions, we are not really free."

— Ron Paul

Congressman Ron Paul Debates Federal Reserve Governor Charles Partee

....in November 1983.

This is really an amazing set of videos that took place in a formal debate between Ron Paul and lifelong Fed employee and governor Charles Partee. One of my favorites parts is in Part 5 beginning at about 4:30. Ron Paul talks about the falacy of believing that the creation of money and credit has any meaningful long-term productive benefit. He goes on to say:

[Money printing and credit creation] does [create productive output], in an inflationary climate at the early stages of an inflation, by deceiving the people and creating new money there's a deception, and yes people do feel better and it might stimulate for a while, maybe even for decades, but eventually it does the opposite and that's what I'm afraid we're moving into now, where even the stimulation that we have today will not produce what we want and desire, and that each time, we need more and more...

Read that again. This was written in 1983 and it just nails it. Nails it.

These are a must watch. The Charles Partee segments are perhaps 20% of the total video and definitely worth skipping.



Click here for a link to the video series.