Of course they will expose a boatload of knowledge that the government kept hidden and lied about, etc. Nothing surprising or newsworthy as far as that part is concerned.

I myself have unfortunately not yet made it through all those 90,000 reports, but apparently someone else has:

The documents are “not particularly new or illuminating,” Morrell said. The most recent “is at least six months old” and doesn’t reflect the current U.S.-Pakistan “partnership that is so vital to our success in Afghanistan.” This relationship “has been trending in the right direction for months, if not a couple of years now,” he said.

(That’s the government’s honesty and curiosity in action right there.)

But what’s really quite amazing to me is the following statement:

Pentagon Probe

The U.S. military has opened “a very robust investigation” with a team working “round the clock” to find “who’s responsible for breaking the law here and leaking this classified information,” Pentagon spokesman Geoff Morrell said today on the CBS “Early Morning” show.

You see, these people are so enormously concerned about transparency and about their screw ups and errors and the millions upon millions of people murdered in its futile wars, that what they are really passionate and motivated about is to work “round the clock” to find who’s responsible for handing over a some pieces of paper with reports that could potentially – can you believe it – have documented what’s actually going on in this thing called reality.

Note how the focus is on finding who’s responsible for “breaking the law here”. No attempt to an argument from morality, not even one from effect. Just a plain and bland invocation of the code of law. This is how you lose the battle of ideas.

There couldn’t be a better and more recent example for the moral bankruptcy of the concepts of statism, the belief that a government is a good and necessary institution.

As the idea of statism dies out and as voluntaryism captures the hearts and minds of the majority, we will see more and more such plain, boring, and uninspiring “arguments” advanced by the those trying to hold together the foundations of the crumbling structure of aggression, irrationality, and indoctrination, in short – the government.

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This whole clip is funny and of course sad at the same time.

It’s of course completely predictable that when a government official promises big and positive change on the energy front, the exact opposite will happen, namely EVEN MORE dependence on foreign oil NOW compared to THEN. This is one of the very consistent threads you can observe when it comes to state propaganda and there’s no need to act surprised about such inevitabilities.

But what’s so tragically funny on top of all this is that you will continue to see people complain about these problems while at the same time running again and again to the government for solutions.

Look out for John Stuart sucking up to Al Gore yet again when he’s on his show next time, talking about how we need the government to solve our energy challenges and environmental problems and how “NOW’s the time!”.

This stuff is unfortunately a bit too serious in my opinion to continue to mess around with it. This oil spill along with all the corollary problems that pertain to the US’ energy dependence was and continues to be brought to you by Uncle Sam, until you realize that you need to walk away from this abusive Uncle, and look for serious solutions.

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3. Prolonged Detention – Change?

Today’s Someone Left the Irony On Award goes to the National Commission on Fiscal Responsibility and Reform, better known as the Deficit Commission.  Barack Obama created the panel ostensibly to reach some kind of bipartisan consensus on reducing the federal deficit; a better title may have been the Accountability Avoidance Commission, since it owes its existence to the need for Obama to avoid political blame for the massive tax hikes he needs to fund his nanny-state agenda.  Even before they get to that stage, however, they have already proven that government naturally inclines towards unthinking growth and irresponsibility, as the Tax Prof discovered at Tax Analysts:

Saddled with a tight deadline and great expectations, members of President Obama’s deficit reduction commission say they may not have the resources necessary to meet their task.

The National Commission on Fiscal Responsibility and Reform, which the president created through an executive order in February, is charged with developing a plan by December 1 that would stabilize the budget deficit by 2015 and reduce the federal debt over the long term. The group is widely expected to consider a combination of tax reforms and spending cuts.

But despite the weighty demands, the panel has only a fraction of the staff and budget of standing congressional committees. The panel’s own cochairs and Senate Majority Leader Harry Reid, D-Nev., have criticized the meager resources and called for more support. …

According to fiscal commission staffers, there are 10 to 15 people who work for the commission, including two full-time employees, interns, employees “borrowed” from other agencies such as the Office of Management and Budget and the Treasury Department, and special government employees, who are expected to work no more than 130 days in a calendar year. The number of workers will likely grow to around 20 by midsummer.

The White House has set aside the resources to provide the equivalent of four full-time salaries and $500,000 in operating costs for the commission, fiscal commission Executive Director Bruce Reed told Tax Analysts.

The commission has as many as 15 employees, two full-time, for their work.  Congress has allocated $500,000 in operating costs apart from the four full-time employees for the life of the panel, which produces its report on December 1.  That is about $50,000 per month to analyze the federal budget and develop proposals for cuts, based on having an unpaid commission full of supposed experts in this field.  I ran a call center of 45 people with a budget just over four times that much, which included the salaries and a lot of costs that the Deficit Commission won’t have to address, such as phone lines, rent, capital depreciation, and so on.

This is a microcosm of the very problem that the commission is supposed to fix, and the reaction from Washington pols is priceless for understanding it.  The gripe from Harry Reid is that the staffing doesn’t match that of Congressional panels, such as the House Ways and Means Committee.  That panel employs 90 staffers and spent over $8 million in FY2009.  Ninety staffers equals more than 20% of the entire Congress.  Maybe the problem isn’t that the NCFRR doesn’t have enough people, but that Ways and Means spends way beyond our means.  In fact, the entire federal government spends way beyond our means, and we can thank the Democrats who added over a trillion dollars in annual federal spending in just three short years for that, increasing the budget by 40% during their control of Congress.

Meanwhile, let’s just savor the irony of a deficit commission that couldn’t get halfway to its goal without running its own deficits.

Earlier this year I already posted another absurdity in regards to the then to be Congressional task force:

This task force will have plenty of time to sit around and do nothing while the taxpayer will continue to be pillaged. In the end, all I expect them to come up with is some superficial and immaterial spending reductions (to make it look good), and massive tax increases.

The highlighted part above is actually quite funny: Over the past 100 years there have been two parties in Congress that continuously ran up government spending and deficits. In particular over the past 10 years the Republican Bush administration ran up until then never before seen deficits. Then the Democratic Obama administration picked up on that an ran up even higher deficits.

Now, the solution to the problem is supposed to be a bipartisan task force, comprised of Republicans and Democrats to solve the structural deficits brought about be Republicans and Democrats.

If one is capable of understanding the hypocrisy behind these policies, the following is of course completely predictable and unsurprising:

First, however, the plan would have to pass the Senate on Tuesday, where a vote has already been scheduled. Moderate Democrats want to attach the deficit task force plan to legislation to permit the government to continue borrowing money to pay for its operations.

Ladies and gentlemen, I give you … the Government of the United States!

Ladies and Gents … just when you were worried the President’s own commission couldn’t match such hypocrisy, here they are, not only matching it, but stepping it up, always ready to deliver on my unceasing expectations of complete and unconditional lunacy! Applause!!

Related posts:

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3. President Obama – Elevating Bush’s Inattention to Deficits to an Art Form

Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

… mmmmmh the sweet taste of utterly deranged insanity. You gotta love it … :)

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This is a chart I generated from data that I pulled from that site:

In particular I found it quite amusing the other day when someone told me that Hoover’s policies of cutting government spending from 1929 through 1933 have obviously shown how reducing government spending can result in a depression.

Well, of course this is just completely uninformed nonsense since government spending under Hoover rose from $3.81 billion to $5.1 billion on the federal level, from $11.7 billion to $12.6 billion in total, and from 12% to 22% (!!) of GDP in only 4 years.

Please, people! Check your facts before you go on the record with such foolish nonsense!

I understand that facts can be annoying when they contradict the tripe you’ve been indoctrinated with from childhood on. But I would strongly and passionately urge you to get off this delusion, to sincerely pursue the facts out there. The stakes are way too high to take this stuff lightly …

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The city of San Carlos, facing a multimillion-dollar budget deficit brought on by the recession and rising employee costs, is considering a money-saving measure that is all but unheard of in the Bay Area – dissolving its Police Department and outsourcing the job of law enforcement.

After 85 years of having its own police force, supporters of the idea say, it’s time for San Carlos to hand the job either to the San Mateo County Sheriff’s Office or to neighboring Redwood City to eliminate nearly two-thirds of next year’s $3.5 million deficit.

But critics say having an outside agency handle local law enforcement would cost “the city of good living” control over its affairs. Dissolving the 32-member force, they maintain, would be a rickety fix for years of bad budget decisions.

San Carlos is not a high-intensity policing assignment. The number of violent crimes in an average year is 27, and there have been only three homicides in the city of 28,000 over the past decade.

Still, “we certainly do have issues that are of concern to local residents who are hoping to maintain their quality of life and the property values here,” City Manager Mark Weiss said.

“We certainly recognize that and respect that,” Weiss said. “And yet the fact of the matter is, the city does not have adequate revenue to maintain the current business model to provide municipal service.”
Deputies as cops

There’s plenty of precedent in the Bay Area for outside agencies policing small cities. Dublin’s police officers are Alameda County sheriff’s deputies. In Contra Costa County, the sheriff patrols Danville, Lafayette, Oakley and Orinda. Santa Clara County sheriff’s deputies handle crime in Cupertino, Los Altos Hills and Saratoga.

However, none of those cities ever had its own police force. Locally, only Sonoma, which dissolved its police department in 2004 and turned to the Sonoma County Sheriff’s Department to save money, has ever done what San Carlos is considering.

“There’s no question in my mind that this is the wave of the future,” said Redwood City Mayor Jeff Ira. “We all want to have our domain and protect our own domain, and that’s what really kept us from doing a lot of these things many years ago. Unfortunately, it’s the crisis that brought us here.”

In May, the San Carlos City Council held a special session to review policing proposals by the sheriff’s office and Redwood City police. The city is expected to decide this month whether to disband the force and select one of the agencies.

“We have two attractive offers from two professional organizations,” said Mayor Randy Royce, who believes the city should scrap its force. “I am just elated to have two great proposals. We can’t go wrong either way.”
Raising funds proposed

But Ken Castle, who leads San Carlos’ largest neighborhood watch group, said having an outside agency police the city in a “work-for-hire arrangement really abrogates that kind of localized control.”

He said San Carlos should consider charging fees for recreational use and installing parking meters downtown to help raise the $2 million a year that outsourcing police services could save the city.

The sheriff’s department and Redwood City are also experiencing budget cuts, and choosing either would be like “jumping out of the frying pan and into the fire,” Castle said. “Tossing this over the fence in a bidding war, I think, is absolutely the wrong way to do this.”
Competing suitors

The San Mateo County Sheriff’s Office already patrols Woodside and Portola Valley. Sheriff Greg Munks noted that his agency’s SWAT team, Office of Emergency Services and air squadron are based in San Carlos.

San Carlos and Redwood City police routinely work side-by-side, said Redwood City police Officer Mike Reynolds, president of that city’s Police Officers Association. San Carlos officers are part of the Redwood City SWAT team.

“Criminals don’t care where jurisdictional boundaries are,” Reynolds said. “They’re not going to stop at a line drawn across El Camino Real because it says San Carlos.”

San Carlos, which has cut its budget for 11 years in a row, is also considering outsourcing its fire and parks maintenance services. Police and fire now make up 60 percent of the city’s $26 million budget.

The San Carlos Police Officers Association objects to any outsourcing and is blaming city officials for failing to manage budget challenges.

“It’s a bad idea, because they’re losing their department. It will never be the same as being policed by your own department,” said Officer Gilbert Granado, president of the San Carlos police union.

All San Carlos officers would also be offered full-time, higher-paying jobs with the sheriff’s office, which now has 462 deputies, officials said. There is no such guarantee if San Carlos chooses to go with the 87-member Redwood City force.
Keeping the city’s identity

Regardless of which agency would handle San Carlos police services, the officers would keep the city’s identity by driving the same San Carlos police cars and wearing the same uniforms. Indemnity agreements would hold either the county or Redwood City liable.

San Carlos City Councilman Matt Grocott said he supports the idea of a joint powers authority under which the city would maintain its police force but partner with another agency.

Munks, however, said he didn’t believe a regional approach would be feasible. “That would be way too confusing,” the sheriff said.

I say: Better yet – disband the entire police force, cut local fees and taxes accordingly, and let the people vote with their dollars whom to purchase protective services from!

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3. California Controller Considers Paying in IOUs

Thanks for my good friend “G” from Chicago for sending me this …

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Keep this in mind. Whenever the government deploys new methods as a result of more expansive powers granted, like in this case the Patriot Act of 2001, their creativity and rigor in finding other applications in the service of advancing their power and diminishing your privacy and freedoms, will know awfully few boundaries.

Don’t ever give credence to the specific reasons stated at the moment a law is passed. Those are nothing but expedient excuses to help corrupt people push the enactment of exploitative and abusive powers past the finish line. Once this is done it’ll be too late.

Think of the long term opportunities that any new law opens up to people who are behind the trigger of an unbelievably massive force of arms and guns pointing at you, and you will get a much clearer picture of what it going on around you and what will happen in the long run.

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Otherwise, I recommend you don’t read on.

Here is a comment that James Galbraith made in a recent interview:

EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It’s not overstated. It’s completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate.

My comment: Wow, that’s pretty amazing indeed. If this is “the only possible answer” he can come up with, then of course it makes perfect sense for him to hold such beliefs. But in that case he might be well advised to take his half baked thoughts back into the kitchen and stick them in the oven once more.

The nature of the problems with deficits is unfortunately a fundamentally different one, and it has nothing at all to do with potentially rising interest rates. At the root of the problem with deficits is the misdirection of resources toward bureaucratic waste and corruption, away from demanded productive factors and voluntary choices, which ultimately all has to be borne by the taxpayer in the form of higher taxes. As I explained before in great detail:

The burden of restricted consumption is thus shifted over time from the investor over to the taxpayer. However, the investor made the choice voluntarily, along with all the risk of default which comes with the contract. (In fact, a complete debt default is precisely what the investor would suffer for funding a comparable project on the market, ensuring corresponding and healthy incentives moving forward.) The investor’s time preference and value preference is at no point being acted against. Nothing is violently taken away from him or anybody else. He willingly participates in the transaction.

The taxpayer, however, never had any choice. He doesn’t necessarily realize that what the government consumes now will be funded by his restricted consumption in the future. Money that would usually have been used to fund the purchases and thus spur production of capital goods (whose employment would increase the production of consumer goods in the future), is now employed in fundamentally consumptive government activities which necessitates that the debts be paid off through the restriction of future consumption lest a default occur.

But the crucial point with the budget deficit is that, from the consumers’ (= the majority’s) point of view, the effects of deficit financing don’t show up until a later point in time. In the meantime it all appears to be taking its normal course as things would on the market. But when the debts need to be paid off, the expectation that the borrowed funds were used to obtain capital goods which would enable repayment through the production of more consumer goods with less labor input than before, turns out to be a completely false one. No new capital was generated from the projects in question and upkeep of existing capital was, as a tendency, being neglected. Capital consumption inevitably ensues.

Thus, with a budget deficit, and more broadly with the public debt, the fundamental damage occurs at the point where money is taken away from the taxpayer to pay off the investors who voluntarily funded unproductive and ultimately coerced projects in the past.

Now, if anybody thinks he brings something new to the table by objecting with the argument “but the government does invest in demanded productive factors”, I would kindly ask that person to show me the prevailing and abounding examples of government projects that were so productive that the debts which funded them could be paid off out of the proceeds from the sale of the plentiful output of demanded consumer goods generated via the “investments” made, so that taxes were not needed to pay off the debts. To make it easy, I would even, just for starters, be happy with one single example! Not that that would rest the case, but if would show some foundations to the objection, rather than just mindless trash pulled out of nowhere.

Anyway, Mr. G. rambles on:

Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn’t be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

My comment: You see how he misses the fundamental point? He thinks that the concern over the deficit is driven by concerns over the government’s ability to fund the deficit. I have little doubt, and have always said so, that for now and probably for quite a while longer the US government will be able to honor its public debts. But what I have also said is that it will do so by taxing and looting us to the hill! Galbraith doesn’t give a damn about this problem. To him, as long as the government can pay off its debts, there are no problems.

From his point of view it makes perfect sense. He has been a public servant for pretty much all of his professional career, and probably depends, directly or indirectly, on government grants, subsidies, and positions/fellowships in his job. He has never had to sell any products and services on the market, deal with consumer feedback, or fundamentally understand the incentives provided by competition and the vices of bureaucracy. He will pay lip service to some of these ideas where it’s absolutely necessary. But he will never understand what it means to be in the shoes of someone who is not in government.

He sees no need in delving into such mundane subjects as entrepreneurship, profit and loss, factors of production, the problems with bureaucracy, the problems with letting concepts overshadow empirical reality.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn’t rational. And if the market isn’t rational, there’s no point in designing policy to accommodate the markets because you can’t accommodate an irrational entity.

My comment: Isn’t it amazing how he talks in absolutes all the time? Again and again he says things like “there is only one possible answer” or “there are only two choices”. But saying so doesn’t make it true, Mr. Galbraith. You do need to provide some reasoning if you don’t want to appear like a complete clown.

Let’s assume for a moment (yes, I am making it as easy as possible for him) that he is right about the idea that the only problem one could possibly think of when talking about the deficit is that they push up interest rates. Fine. In that case you can’t just look at the nominal interest rate that currently prevails on the market! You have to look at the difference between the rate that would have prevailed, had the government balanced its budgets from now through the next decade, versus the rate that prevails now based on trillions upon trillions in deficits.

I would humbly submit that the prevailing rate would now be much lower than it currently is, had the government balanced the budget. This is not to say I know this for an absolute fact, nor does Mr. Galbraith or anybody on this planet. But evidence and logic leads me to believe that this would be the case. And I do think I might have at least a little bit of credibility based on my past predictions in the Treasury market. So even when I accept and apply his completely false premise, I still end up unsatisfied and utterly unimpressed with his “logic”.

I hope you can understand that if his fundamental knowledge and theories about the government deficit are based on such rampant nonsense, there is really no point in listening to or dealing with anything that follows from it.

Thus I won’t delve into the remainder of his ramblings because it quite honestly makes me angry. I have nothing but sincere disdain for pompous intellectuals who carelessly advance such dangerous theories that are bound to hurt millions of people in the long run.

The blood and sweat of generations is on the hands of the mystics and apologists of the powers that be. They are the ones who make suffering and corruption possible, and they are the ones we have to defeat once and for all in the battle of ideas.

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3. What’s the Problem With Government Budget Deficits?