Six Charts That Show Liberal Propaganda is Immune to Reason & Evidence
Somebody on ThinkProgress.org recently produced this attempt to an argument for more deficit spending called “Six Charts That Show It’s Time To Reset The Budget Debate” (in which case by the way he must be happy about what’s been going and will continue to go on for a while).
It’s not like anything of what he’s saying there is surprising or new since liberal and conservative propaganda both seem to continue to have a hard time coming up with one original idea or thought that has not already been used and refuted ad infinitum.
For the most part he relies on projections, and then in the end he gives us a bonus nugget of knowledge which is the apparently in his mind surprising news that the government bond yield (which I have been consistently and correctly expecting to go lower over the past years) is unusually low.
What this guy is proposing is in short the continuation of government budget deficits because they’re “only” going to be at around 3% in the projections for the next few years (the years after that he seems to ignore because I presume he’s still feverishly working on a solution for those). The money raised he then of course wants to see poured into infrastructure projects, so that shovel ready projects can be launched, roads fixed, equipment employed, people put to work, money earned, which (and I am now supporting his case by adding my own words to his stereotypical Keynesian narrative) will then of course trickle through the entire economy and through the multiplier effect produce wealth and get the economy jumpstarted again so that the government can earn more tax money to then pay off their debts which is as we all know what governments do all the time; in other words, all the unoriginal, mindless, boring, embarrassing, childish, dumb-ass Keynesian nonsense that many of us, myself included, were taught and swallowed at face value in undergraduate economics.
I’m not even going to harp on the fact that he’s going with projections which are highly questionable (and which I have by the way in the past accurately predicted to be way off). But let’s just assume for the sake of making the case as easy as possible for this amateur economist that these are 100% accurate predictions.
If you’re unclear on the fundamentals about what it is you’re writing about, it sometimes helps to go way back to the very basics of what it is that you’re proposing, and that is in this case the problem with government budget deficits (I’ll just post the conclusion here, but read the entire article if this is new to you):
(…)
This is very important: When people say something like “the deficit is damaging/bad/a problem/etc.” what it ultimately means is that the money used for more spending and favors and owed by the government to investors will be taken from you or your children in the future via the threat of kidnapping and imprisonment if you don’t comply. This is really at the root of all the problems around public debt owed, and the deficit that we hear about every year is just piled on top of that existing debt.Due to the fact that the effects of deficits are not immediately noticeable to the general public they are an incredibly convenient way of funding government programs and shifting involuntary burdens on to future disenfranchised generations. Thus public debts will always continue to grow along with rising taxes, until a level is reached where the required tax burden becomes untenable, where creditors can no longer be paid off, the government can no longer fund itself, where social tensions rise between recipients and payers, and where the whole superstructure that is the government collapses in its entirety.
“Solutions” to Deficits
As I explained, the ultimate damage caused by public budget deficits occurs at that point in time when taxpayers are forced to restrict their consumption and unjustly bear the cost of malinvestments from the past.
(…)
And regarding the low interest rates argument, I will take you back to what I wrote over a year ago, which by the way includes a little prediction of what’s happening in Japan right now:
And yes, they can rollover debt for as long as interest rates are low. I may note that I have consistently and correctly predicted record low Treasury rates for years to come.
(…)
All these low rates will do is allow the debt to get even more bloated. And interest rates won’t remain low forever, as you can see in Greece and similar situations. Did people like the above author see any of those sovereign debt crises coming?
What about Japan? Their debt is the most crushing of all industrialized nations, and I’m predicting that their time of low rates will be drawing to an end any day now, with their debt and pension crisis having entered its final stage. Then what?
They have been running deficits for two decades, people like this author ought to love what they did. Now what? … All you’ll hear is chirping crickets.
Deficits never matter … until they do. The party is always fun, the hangover never is.
Cheers!
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Japanese Currency & Debt Crisis Enters Implosion Phase
A little over a year ago I wrote in regards to Japan as an example as to what Keynesian US policy will bring about:
All these low rates will do is allow the debt to get even more bloated. And interest rates won’t remain low forever, as you can see in Greece and similar situations. Did people like the above author see any of those sovereign debt crises coming?
What about Japan? Their debt is the most crushing of all industrialized nations, and I’m predicting that their time of low rates will be drawing to an end any day now, with their debt and pension crisis having entered its final stage. Then what?
Now we hear that the Bank of Japan chief is saying this:
“I do not expect a sudden spike in long-term bond yields. In the long-run, if the economy recovers and inflation heads towards two percent, we might see nominal interest rates rise but that’s natural.”
As it is with statements politicians make, usually the exact opposite is true.
Mish posts this chart on his site:
Expect a spike in Japanese bond yields and a further collapse in their currency valuation globally, sending the Japanese economy into another long overdue financial crisis.
Furthermore expect more and more of the same 30+ year long policy from the Japanese government and central bank: Money creation, debt creation, all to no avail and leaving no other option but a chaotic and painful endgame.
So long as people ridicule libertarians for their “strange” ideas of sound money and fiscal responsibility, this is what they’ll get.
Mish, Salinas & Others on Bitcoin
Mish finally wrote his first post on Bitcoin :)
I consider this another milestone since he’s arguably one of the most influential economics bloggers out there.
A few things I wanted to point out about what he said:
I am neither a convert nor a true believer. I will stick to gold thank-you. I see things similarly to Ron Paul who said in a Bloomberg Interview “If I can’t put it in my pocket, I have some reservations about that.”
It’s a common misconception that you can’t “put bitcoin in your pocket”. You absolutely can. You can put your wallet on a flash drive and literally put it in your pocket.
Furthermore you can get actual physical bitcoins by Casascius. Personally I don’t see why you would other than as a bit of a gimmick, but hey, if you like it old fashioned, by all means go for it.
In addition you can of course make it a paper wallet which you can, if you so desire, “put in your pocket”.
Mish also quoted Hugo Salinas who as far as I can tell from his article doesn’t seem to know much about Bitcoin yet:
Let’s get this straight: real money has to be the commodity that is generally accepted by society as payment in full for goods or services received. Throughout history, the commodity most generally accepted in payment has been gold. Silver has taken the second place after gold. Gold and silver were chosen by humanity thousands of years ago, as the commodities with which to make payments.
Don’t get me wrong, I love gold as much as the next guy. But the whole article literally tries to stuff a revolutionary, disruptive technology into the conceptual box of the old payment systems we’ve known to date.
That’s fine. If everyone was on the bandwaggon already it would be way too boring, wouldn’t it?
But one challenge I’d have for Mr. Salinas (and you tell me who you think will be faster):
Let’s each order a brand new flatscreen TV anywhere in the world, I use Bitcoins, you use gold or silver, and we’ll see which of us finds a merchant faster, in other words which medium is “more generally accepted in payment”.
Ready…? GO!
Great Discussion About the Current State of Libertarianism in Public
Bitcoin Symposium @ NH Liberty Forum Feb 23 2013
Right vs Left
The right-left paradigm of politics finds its roots in the two most innate and manipulation-prone emotions known to mankind: Fear and guilt.
Every single right wing ideology exalts and admires strength, for it takes strength and discipline to protect us from all the things we’re supposed to be scared of.
Leftist ideologies emphasize the feeling of pity and compassion for the weak and the less fortunate, and generally appeal to a sense of guilt in those who are better off.
So called moderate or centrist political ideologies can be found anywhere in-between those two polar opposites.
This is not a coincidence. Most of us have lived through both sides of this manipulation spectrum:
A weak and defenseless child is easily manipulable by means of patriarchal threats and assertions of strength. Once the child grows into a vigorous adult while his parents become elderly and fragile, physical threats will no longer be credible or effective. It is during this phase that the appeals to fear will subside and give way to the subtle cruelty of dewy-eyed guilt trips.
To free yourself from this game, you need to see it for what it is.
Reason VS the Hivemind
When you’re a curious and reasoning individual, election time has probably got to look like one of the most embarrassing human displays of collective intellectual inertia and laziness.
During the “off-season” knowledgeable people politely point out the inevitable consequences of current policies and are met with knee jerk derision, mindless platitudes, or plain disinterest.
Come election time, you’ll find numerous people vociferously beating each other up over inevitable symptoms of the inevitable consequences of the policies they derided others for criticizing.
And when the same knowledgeable people then politely remind them that these are the inevitable consequences of those past policies, they will be met with … oh well you know that part :)
ECB Fears Bitcoin May Harm Its Reputation; Bitcoin, Cryptography & Peer-to-Peer the Way of the Future
I’m happy to say that Bloomberg is reporting Bitcoin’s Gains May Fuel Central Bank Concerns:
Greater demand for virtual currencies could have a negative impact on the reputation of central banks, according to a report published by the European Central Bank in October last year. Since the report was released, bitcoin has risen more than 55 percent against the dollar and use of the currency has surged.
I have bean reading and coding a lot for the past day about stuff related to Bitcoin.
I am absolutely fascinated by the concept and I think that in the long run it’ll be a successful currency.
Economically, in my opinion, it fulfills all the requirements that exist for a quality medium of exchange (limited in supply, predictable in growth, divisible, homogeneous, fungible, and sustainable)This is either just some mad, deluded, and over-excited trip that I am on, or it is greatest challenge that the global state controlled and “regulated” money system has encountered in all of history!
I’d be surprised if over the coming years Bitcoins won’t be priced much much higher than they are now.
Furthermore, expect the driving concepts behind Bitcoin, that is cryptography and peer-to-peer validation, play a major role in the emergence of other online solutions, for example in the fields of web search solutions and social networks (Google and Facebook better watch out).
I’m now convinced that I wasn’t tripping on anything. :)
The beauty of the free market economy …
The beauty of the free market economy is that it allows for maximum predictability in its approaches, while surprising us again and again with the most unpredictable of outcomes.
