Saturday, September 12, 2009

So What Has "Changed"?

Please compare this political cartoon from the Chicago Tribune of 1934 . . .

(H/T: Transfigurations; click on image to enlarge)

. . . with this political cartoon of today:

(H/T: Powerline)

I get the "hope" (that things might be different), but I do not get the "change." Consider:

A. Social Security is "broke" (i.e., will go broke) because it is a Ponzi scheme, and all Ponzi schemes end up broke, with the last ones in left holding the bag.

B. Medicare and Medicaid are broke by definition because they are a subsidy to two separate classes at the expense of all the rest of the taxpayers. Moreover, Medicare premiums, although recalculated annually, are a flat rate charged to all seniors equally, regardless of what they earn or have to spend on their care, and they do not begin to cover the costs of providing that health care (because a single rate that did so would be beyond the ability of many to pay, and hence politically unacceptable). As a result, there is virtually no incentive (apart from co-pay requirements -- for which more insurance is available) on the part of seniors to care about the costs of their health care, thereby depriving the market of a huge factor that otherwise could help hold down costs.

C. The Post Office is another huge subsidy -- our first-class rates partly subsidize the cost of sending bulk and junk mail, and Congress makes up the difference -- and so is also by definition "broke."

D. Amtrak is the same story, but it is a dying subsidy because Congress (while voting trillions for Wall Street) refuses to vote the three or four billions in capital that would have to be invested to bring its facilities to the point where Amtrak could compete with other forms of transportation, and be viable. Just compare rail travel on Amtrak with rail travel throughout Europe, and you will see what I mean.

E. Fannie Mae and Freddie Mac are broke because they gambled with no risk -- they bet the taxpayers' money, not their own, and so they went for broke.

F. And the President's budget is broke because Congress and the President are collaborating to spend all the money they can print. The party will only be over when someone (read the rest of the world) takes away the printing press, by refusing to recognize the dollar as a reserve currency.

The one common factor in all these government schemes that have gone broke is this: the beneficiaries of the various schemes all receive their benefits without any risk to their own pocketbooks. Disconnect risk from investment, and there is no incentive to spend wisely and well.

Pray that the rallies today and in coming weeks and months will bring the government to its senses. If it does not change, there will be no hope either.


  1. You are far TOO optimistic. We are NOT confronting the forthcoming energy crunch. We are NOT preparing for the end of cheap oil. We are NOT facing up to the intermittency challenge posed by our growing wind power industry. We are NOT in a panic about growing water shortages world wide. We are NOT confronting the worsening radioactive waste problem. But we ARE exporting 250 billion dollars a year to buy crude oil. And we ARE betraying the next generation.

  2. I honestly don't understand many of the politically liberal economists such as Nobelist Paul Krugman who say things aren't as bad as they look.

    I'm very bearish, but the DJIA of the stock market just continues to amaze me.

    I really think things are going to go from bad to very bad to unthinkable. And that the mainstream liberal media will still give Obama and the leftist liberals a pass and that Obama will get elected another 4 years.

    Political Correctness run amok coupled with Orwellian Newspeak coupled with Lemming Behavior coupled with gross apostasy by many in the Church... and we have the makings of the Mother of All Self-Inflicted socio-economic disasters.

    TEc heresy and apostasy globalized to the U.S. socio-cultural-politico-economic scene.

    Weez in major trouble, sports fans.

  3. Is the creator of a Ponzi scheme a liar? Friends of Joe Wilson want to know.