We will be singing this some time this fall.

UPDATE: An initial draft of my Gloria (it still needs work in places): Gloria. Revised work in progress:Gloria v1.1

By my figures, it appears the total outlays of the federal government for all spending is somewhere in the neighborhood of $3.8 trillion. Since 1996, that represents an overall increase of $2.1 trillion over the total outlays then or an increase of about 5.9% per year in total outlays. The plan that the Senate just approved proposes to “cut” $917 billion of spending over the next ten years. That sounds great, but overall spending during those same ten years will be $38 trillion if the budget does not increase at all year over year. The $917 billion spending “cut” compared against the total outlays in that context would represent a “savings” of roughly 2.4%.

But the chances that the budget will not increase by about as much as it historically has is remote. The more likely scenario is that the overall budget will continue to grow at least as fast as it has over the last decade or so. Using the 5.9% increase per year figure, the total outlays during the ten-year period would amount to $49.937 trillion (with total outlays in 2020 amounting to a whopping $6.385 trillion). That $917 billion in “savings” now represents a paltry 1.8% of the overall spending during the period.

Meanwhile, all this spending is doing no favors for the overall debt. The more suspicious of you might have discovered that this bill does not actually balance the budget. Rather, it decreases (imperceptibly, it turns out) the amount of debt that would have been added in any given year. During the period from 1996 to 2011, government receipts tended to grow by about 3.7% per year (while outlays during the same period increased by 5.9%, see the problem?). Receipts in 2011 are projected to be $2.1737 trillion. In 2012, they are projected to be $2.6274 trillion. Using the latter projection and figuring a 3.7% growth rate through 2020, the total deficits during that period amount to $20.217 trillion. The current U.S. government debt is $14.294 trillion. So, over the course of the next ten years while we’re busy “saving” $917 billion, the debt will more than double, ballooning to more than $34 trillion. Of course, it could be worse: the debt could have been $34.917 trillion.

If you want to be really depressed, consider that there are 312 million Americans. If the anticipated $34 trillion debt were paid equally (fat chance!) by each American, your share at the end of 2020 would be $108,974.40 ($435,897.20 for a family with the regulation 2.1 children). It sort of goes without saying that I was a bit perplexed at the outbreak of clapping on the House floor yesterday when our Representatives passed the plan.

The first group emphasizes the politics of the action. Because it is Barack Obama driving the bus, these Republicans object. The point is that whatever he does, he must be criticized – even if the thing he does is precisely what George W. Bush would have done. Representative of this group is the following comment:

Would it have been to difficult for him to go to congress with a request or perhaps grace us with his presence with a primetime presidential address? George W had 42 nations behind him when he went into Iraq, he had a clear mission and UN support. He addressed the nation and got approval from BOTH dem and rep in the congress. This guy has NO IDEA what he’s doing and couldn’t find his way out of a paper bag with a flashlight. We are empowering terrorist by appearing weak and undisciplined. He is a fool and making the United Staes look foolish.

The other camp, however, looks beyond the politics of the moment and sees that Obama’s administration is, in many ways, simply a continuation and amplification of Bush’s administration. Representative of that strain of thinking are the following two comments:

Please don’t oppose Obama when he is doing the right thing just because he is Obama. The US is currently preventing Gaddafi from slaughtering tens of thousands of his “disloyal” citizens. If the US were not doing this, we would be bystanders to Stalinist butchery in a country where we could EASILY stop it. And we are easily stopping it at a cost of zero lives and $.5-3 billion. I’m as conservative as they come, but I will not follow NRO in unthinkingly bashing Obama over petty political points like “he promised no ground troops in Libya, but theres marines off the coast just in case. Flip flop!”. This is the kind of petty posturing and game playing that makes politics so unpleasant.

and

JG,

I agree with Ron – there is not much of a story here and it just makes you look bad to gin up something factually empty just so you have a blog post for the day/hour/minute.

You are almost always better than this.

It makes us conservatives look bad when we posture for purely political reasons (what are we, liberals?) – ie, carping about actions (Libya) that many/most of us are actually in favor of…

This empty, mewling rhetoric about one of the rare times Obama has acted correctly (if belatedly) has become the conservative version of PC – feigned virtue wounded.

Please stop it.

Elsewhere (and I can’t find the comment again or I’d link to it), I found one who synthesized his schizophrenia by criticizing President Obama for failing to prosecute the military adventure as well as President Bush would have (i.e. not enough troops, no coherent plan, etc.). All we know is Obama is wrong. It’s just not as clear exactly why.

Maybe after a round of clozapine, the GOP will come to its senses and realize that all of our military adventures have been ill-conceived whether prosecuted by a guy with an R after his name or a D. And that both houses could stand to have plagues afflict them.

I wrote above that it is the sense of security that people desire. There is no evidence that ceding these liberties will ever lead to actual security. For the life of me, I cannot recall a single news story of any would-be terrorist who was thwarted from boarding a plane by airport screeners. Indeed, it appears that every terrorist who sought to board a plane with explosives seems to have been successful. But, if these measures do not actually thwart terrorism, then why would we simply relinquish our rights? Is the comforting notion that something is being done enough to compensate for the forfeiture of our American heritage and birthright? I suggest we should hold out for more if only because it would be inconsiderate to our forebears who spilled their blood to secure those liberties to us.

We have come a long way from the sentiment expressed by Patrick Henry when he said, “Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!” I know with certainty that persons like the one with whom I exchanged emails will say that my treasured liberties will lead to my death and that my “warped libertarian hypocrisy. . . would have us all killed. Thank GOD Bush was president. . . I’m sure your Constitution will come in handy when AQ takes over the world and beheads us all.” In Bushian terms, it seems, we must destroy our liberties in order to save them. After all, what good is freedom to a dead man, Patrick Henry notwithstanding? It is a shame if this is how it all ends. For a moment, it seemed like there was really something to this whole American experiment thing. But all good things come to an end and in answer to Abe’s question, it seems that a nation, conceived in liberty, cannot long endure if it is attacked by terrorists.

My acquaintance’s response was “Patriot Act saves lives. I support it fully. You’re with the ACLU. Congrats!” I wish I could say I was stunned, but I have had prior conversations with this person who claims he is conservative, but whose every instinct adds power to Washington and removes it from individuals. If ever there was a bigger statist, I couldn’t tell you who it was.

I pointed out that even pilots and stewardesses – those whose lives are directly at stake in the question of airport security most often – have organized a protest against the new procedures. No matter how forcefully I illustrated the evil that is being done by TSA agents, my interlocutor refused to budge maintaining that security was more important than any highfalutin constitutional right like the Fourth Amendment. He explained that as long as the Muslims got their share of the attention, he would be okay with “racial profiling and nude scans, cavity searches or whatever,” adding, “I’m for racial profiling. Period. I cannot be any clearer.”

At that point my argument got muscular. I wrote:

You encourage the molestation of minors in the name of security? If this becomes the norm, what is prohibited by the Fourth Amendment? Would flyers be subject to anal probes (which have FAR more relevance to discovering possible terrorism than gropes of crotches). Won’t you feel upset when some unknown guy with a TSA patch on his shoulder thrusts his hand between [your wife's] legs to determine whether the “anomaly” that was reported from her nude body scan was a Maxi-pad or something more sinister? What if it takes three or four tries to be sure? . . . . In defense of [your wife], I will object!

In response, he blocked my email, called me anti-Semitic (I suppose because he is Jewish and I was arguing with him and also, undoubtedly, because he has learned through experience that the easiest way to get someone to abandon an argument is to insinuate that it is anti-Semitic, whether it is or not), accused me of insulting him and his wife (by pointing out what the TSA agents will actually do to them) and suggested that I must be drunk and that he should call the cops on me.

It is tragic that the description of what the TSA agents are authorized to do is “sick shit” that demands intervention by “the authorities,” but the actual doing of those things by the agents is acceptable in the name of enhanced security. Apparently, defending one’s constitutional rights is the exclusive province of the drunkard. I feel bad for his wife that he would offer her up on the altar of national security to be groped by persons who achieved the level of high school diploma in order to land a sweet job at the Transportation Safety Administration. If she were married to someone with a real backbone, she would be protected from incursions like he would allow her to be subjected to. Moreover, I despair for the fact that he and his wife are young and will likely have children. I hate to think that his 13-year-old daughter, when the time comes, will be subjected to the fondles and gropings of those high school graduates who make up our first line of defense against Islamic terrorism. I would save him the embarrassment, humiliation, and fury that comes with the policy announced by TSA, but he can only respond with fury at my obtuseness, cut off my email address, and tell me that what I write is “sick shit” never pausing to think that what I write is EXACTLY what the TSA will be doing to his wife and daughters. I daresay it is not me who is sick, but those individuals who would defend the TSA’s actions.

I stand by my disgust.

Note to Reader(s): Some of you may have noticed that this is now a different version of the original post. The prior version was a blow-by-blow account of our discussion, directly quoting the email messages. Instead, I have provided a summary of what was written and few quotes.

Kmiec, a law professor and one time dean of the Columbus School of Law at the Catholic University of America, turned his back on morality by supporting the infanticide supporting Barack Obama for President.  He stumped hard for him during the 2008 campaign.  For his soul, Kmiec was awarded the position of Ambassador to Malta by Barack H. Obama.

Now few people recognize the necessary implications of the economic statements they are constantly making.  When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt:  these are different names for the same thing seen from opposite sides.  When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer to the city worker.  When they say that the way to national wealth is to pay out government subsidies, they are in effect saying that the way to national wealth is to increase taxes.  When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective ultimately to increase imports.  When they say, under nearly all conditions, that the way to recovery is increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production.

Henry Hazlitt, Economics in One Lesson, 1946.

Over the course of the last few weeks, the news has focused on the proposed mosque near Ground Zero.  Ground Zero, of course, possesses a tremendous amount of significance to Americans as the place where nineteen Muslim extremists conspired to kill thousands of Americans on September 11, 2001.  Such an act can never be forgotten.  Likewise, the building a mosque mere steps from the site of such a tremendous evil, conjures the prospect that it is being done for reasons that are less than pure.  I cannot say, from my vantage point what the motives are of those who wish to build a mosque in this location in a city that already contains so many hundreds of mosques.  But I can say without reservation that the appearance that it is calculated to reinforce and celebrate that act of terrorism is undeniable.  Consequently, I cannot personally support the building of a mosque on that property.

Furthermore, I cannot imagine that economically such an endeavor is wise.  I don’t know for sure how things are in New York, but in my hometown of Chicago, I know that such a project would require the cooperation of the unions.  I can’t believe things are much different in New York City.  Union members are patriotic Americans and their personal beliefs are sure to run contrary to the building of such a monument to anti-Americanism.  As advice to those who seek to build such a mosque, I can only imagine that the cost will exceed your estimates by at least six-fold, and the length of time you believe the mosque will take to erect will be multiplied by five.  There is little that the government can, or in most places will, do to sanction unions.  These calculations should be taken into account by those who wish to build such a mosque as it may prove a foolhardy project with little hope for relief from local government.

That said, there is nothing that government can do to obstruct the project.  The Constitution prohibits the federal government from interfering in the exercise of one’s religion. Our Supreme Court has extended that prohibition to the States.  The plans for the mosque are perfectly legal constitutionally and there is little that government can do to obstruct it.  All faiths are welcome in this country, which is part of what make America the greatest nation on earth.  We look forward to the day when Muslims, Christians, Jews, and all the religions of the world, worship side-by-side in perfect peace.  America is the only place on earth where that dream is obtainable.

God Bless America,

And good night.

It begins as follows:

If Ben Bernanke, Federal Reserve chairman, expected the release of second-quarter growth data to clear up the “unusually uncertain” outlook for the US economy, then he will have been sorely disappointed.

On the surface, the numbers were easy to interpret. Growth over the previous quarter at an annualised rate fell from 3.7 per cent in the first three months of this year to 2.4 per cent in the second. That fits with many other signs that the recovery is slowing down.

The details, however, hide a series of economic mysteries – about how fast the economy can grow, how weak it actually is, and what US consumers have been up to for the past few years – that policymakers will have to solve.

Let us take a moment to focus on that last mystery, and a mystery it most certainly is.  The reason Bernanke cannot tell what consumers have been up to is because those very measures that might have revealed their doings are the very same ones that the Fed is constantly tinkering with.  Consequently, the true activities of consumers is obscured by the Fed’s interventions.  Let us take one example.

According to the Austrian School, interest rates are not artificial constructs, but are an inherent element of the market.  Interest rates convey information.  For instance, when a large number of depositors put money into a bank (that is, they opt to save instead of to consume), the bank, being flush with cash, will lower interest rates to encourage investors to take out loans.  This makes sense in an elementary economics sort of way.  The supply of loanable money is great, therefore the price of that money will sink until it meets its corresponding level of demand from those disposed to purchase it.  Therefore, in a market free from external interference,  low interest rate tells businesses that consumers, by and large, are sitting on the sidelines saving their money for future purchases.  Conversely, a high interest rate tells businesses that consumers are not saving, but are consuming immediately available goods.

It should be plainly evident that artificial interference with the interest rate will obscure the true nature of consumer saving or spending.  This will, of course, mislead businesses into allocating resources into long-term or short-term projects according to the nature of the distortion.  Of course, that is precisely what Bernanke and the Fed do – they tinker with interest rates.  When he later finds it a mystery what consumers are up to, that can hardly be surprising.  Indeed, it was his own actions that made him ignorant.  That fact, in itself, should be ample argument that the Federal Reserve should be abolished.  Its own activities interfere with the market to such a degree that their actions can only ever be based on guesswork.  They are no more competent to solve a financial mess than a monkey shaking a Magic Eight Ball. And whatever solutions they propose should carry as much weight – even less, when one considers that the solutions that they proposed are the very ones that created the problem in the first place.

Puzzled by the fact that even when they thought they had a handle on the numbers for 2007, 2008, and 2009, those numbers are continually revised downwards.  First, this fact strongly suggests that the numbers have been massaged along the way.  Second, this also suggests that the government interference in the market plays a role in obscuring the nature of the transactions even after the fact so that unraveling what actually happened is unnecessarily complicated.  To my mind, this strongly suggests that government officials are trying to fit the outcomes into predetermined narratives that are not up to the task of accounting for these outcomes.  In short, the narrative is wrong; the expectations are fantasy; and the continued course of action should be obviously misdirected.  Instead, they scratch their “brilliant” heads and say things like, “‘The recession was un­usually long and unusually severe and has proved unusually resistant to unusual amounts of stimulus,’ says Neil Soss, chief economist at Credit Suisse in New York.”

Perhaps its because we are trying to cure a recession caused by excessive spending and regulation by increased spending and regulation.  Consider these paragraphs:

There are two ways to read the revisions. One is that the economy is even further from using its full capacity than previously believed – an argument for more easing by the Fed. The other is that the economy’s capacity to grow is less than thought.

Paul Ashworth, senior US economist at Capital Economics, says he leans towards the latter explanation because inflation numbers remain the same. Less growth for the same inflation suggests a lower potential to grow.

Another question is quite how weak the economy actually is. Purchases by US consumers and businesses grew a lot faster in the second quarter than in the first – up by 4.1 per cent from 1.3 per cent – it is just that many of them came from abroad.

Ignoring the impossibility of further easing when the Fed is damn near at zero percent as it is, it is unbelievable that one conclusion that can be reached is that the economy is “even further from using its full capacity than previously believed,” necessitating even more destructive distortion to temporarily prop up a market that is sorely out of whack.   In a sense the statement that the economy is not at full capacity is quite true, the economy has been bamboozled into allocating its resources into projects that are unsustainable because of a lack of savings, while other near-term (obtainable) projects are ignored.  A properly allocated economy would indeed run at a fuller capacity, by responding to the true nature of consumer demands.  Concededly, many of those producers who engaged in long-term projects, for which there are too few resources to complete, will find themselves facing bankruptcy.  But, these are the oats that are sown by massive government disruption of the free market.  Those companies (and their stockholders) will inevitably feel the pinch for their (inadvertent) mismanagement.  But instead of blaming the directors of the company, they should cast their eyes toward Washington.