Mar 022013
Maybe providing free bags isn't so bad after all.

Maybe providing free bags isn’t so bad after all.

The Seattle City Council unanimously passed a law last year banning the use of plastic bags in grocery stores, and requiring stores to charge 5c each for paper bags.

In truth, it seems the retailers were quite pleased about this.  They no longer had to give away plastic and paper bags for free, and – even better – could often make a profit by selling the massively marked up reusable shopping bags that it was hoped Seattle’s citizens would switch to.

The law took effect last July.

So what has happened since then?

Local hospitals report a surge in E.coli cases – and even deaths – as a result of people carrying food in unclean bags they were reusing.

Shoplifters delighted in being able to carry bags into the store, fill them, and walk out without paying.

Other shoppers, frustrated at finding they would have to pay to bag their purchases, simply walked off with the store baskets (and maybe/maybe not paid for the contents of the baskets).  Stores responded by not replacing the lost/stolen baskets, but that caused a new raft of customer service problems too.

As for the benefits – well, we’re still waiting for a report on those.  But perhaps the fact that there is no measurable global warming at present might ‘prove’ that Seattle was very wise.  On the other hand, the last time there was any significant global warming was almost a decade ago, so perhaps Seattle was simply late to the party.

More details of Seattle scoring an own-goal here.

Feb 112013
Don't learn your lessons from the movies. Dirty Harry isn't real. And you're not a cop.

Don’t learn your lessons from the movies. Dirty Harry isn’t real. And you’re not a cop.

So there you are.  You’ve surprised three felons about to burglarize your property.  Fortunately, you have your handgun with you, and when you confront them as an armed homeowner, the three felons very sensibly turn tail and flee.

Great.  So far, so good.  Bravo.

But what happens next can completely change your day if you’re not careful.  There you are – heart pounding, blood surging, adrenalin levels off the scale, full of righteous anger, and your gun is in your hand.  Maybe you even have some vague fuzzy perception that it is legal to shoot after felons, perhaps because you are ‘in hot pursuit’ or something like that.

Do you shoot after the bad guys?  Or do you carefully holster your handgun and call the police?

Don’t just answer this question in the calm and comfort of where and how you’re reading this.  Try and really put yourself in the scene, and understand how you’d be thinking and reacting.

Now – the answer.  Would you shoot after the bad guys?

If you answered ‘yes’, go take a cold shower.  Then come back and please continue reading.

If you answered ‘no’, congratulations, but don’t relax.  Drill that ‘I must not shoot’ thought hard into your brain, so that when the situation actually occurs and you’re operating more on instinct and emotion, your rational self can still fight away the blood lust and desire for vengeance and correctly guide your actions.

Don’t just take our word for it.  Read this short news item about a homeowner in a scenario pretty much as we just depicted.  He did the wrong thing, and got locked up for it, and now is facing an expensive journey through the legal system, with the only certain thing in his future being tens of thousands of dollars in legal fees, many sleepless nights full of worry, and possibly – probably – a criminal conviction on his record and maybe even some prison time.

Two things to remember :

First :  Your state may or may not have a long laundry list of situations in which it might be legal to use lethal force.  But the only one of these which is likely to be unimpeachable is when you or your loved ones are staring certain death or severe injury in the face, and you have absolutely utterly no way to avoid that outcome, other than to use the least amount of deadly force possible.  All the others are less black and white, and you can find yourself trapped in very unpleasant grey.

As soon as you retreat away from that ‘worst case’ scenario, you start to facing a growing subsequent alternate worst case scenario – either criminal and/or civil action against you after your shooting.  Depending on the jurisdiction you live in, your state’s laws on deadly force may be interpreted permissively or restrictively, and concepts such as ‘what would a reasonable man be expected to do in the circumstances’ could be answered – in a court of law – in very different ways.

Remember also that juries are fickle.  You can never guarantee what verdict a jury will reach.  Get a couple of vociferous anti-gun people, a few others who believe that ‘nothing can ever justify taking a human life’, and have the others basically conciliatory and passive, and before you know where you are, you’re guilty of whatever the prosecutor has decided to throw at you.

Maybe the local community is currently experiencing a backlash against some gun tragedy somewhere in the country, and it is just your bad luck to be the recipient of that backlash.  Maybe you are white and shot at black criminals, and the case has been perverted into a cause celebre for ‘black rights’ and you are made to look like a racist rather than an ordinary homeowner.  And so on and so on.

The bottom line :  Any shooting may have extremely unfair criminal and civil consequences.  Avoid the risk of such consequences, by avoiding the need to shoot.

Second :  Go stand in your driveway and imagine yourself doing like the guy in the news story did, shooting at the would-be burglars as they make their getaway.  Now look carefully at what is in the background.  What do you see – and also what are behind the bushes and fences that you can’t see (but which your bullets can reach)?  Houses.  Apartments.  Cars.  And, most of all, people.

In most residential areas, there’s no such thing as a safe direction to shoot in.  Even if your shots hit the bad guys, they might still travel through and on and cause other damage elsewhere.  Police departments regularly average $10,000 and up, for every shot fired by their officers, in terms of the costs they incur repairing the damage from the rounds expended.  You can expect the same, and it will be money out of your own pocket, because your insurance will refuse to cover you.

Here’s the unfair thing (and – get this – everything about these types of situations is unfair, right from the get go).  If you hold your front door open for the burglars and help them carry away all your gear; insurance will reimburse you as per the policy you have.  They see that as an accident or event you have no control over.

But if you protect your property and shoot at the burglars, the insurance company won’t thank you for acting to reduce the amount of loss they have to pay out.  Instead, they say this was a deliberate act on your part, not an accident or random piece of bad luck, and they’ll refuse to reimburse you any of the costs you might incur as a result of where the bullets went and the damage they caused.

Dirty Harry never had to worry about these things.  He was a policeman, more or less acting, on duty, as employed to do.  Sure, the mayor and his superiors would often berate him for the damage he caused, but Harry never had to pay any of that himself.  The city and the police department, and all their attorneys, would run interference for him.

You have none of this behind you.  Instead, it will all be ranged in front of you and against you.

Bottom line?  Don’t shoot, unless you have no choice, and it is the only option open to you, and necessary to save you or your loved ones from imminent and severe harm or death.  And force yourself to stop shooting as soon as the situation changes.

Update :  The citizen who shot at the fleeing burglars ended up agreeing to a plea bargain.  He has given a guilty plea, and is receiving a $700 fine, must take a weapons safety class, and has been required to forfeit his handgun.  Maybe he got off lightly, depending on your perspective.  Add the incarceration, now having an arrest and criminal record, and thousands of dollars in attorney fees, and those two shots truly changed his life.  Details here.

Jan 152013
The Royal Clock Tower Hotel in Mecca (also known as the Abraj Al-Bait Towers), at 1972 ft and 120 floors, the tallest building completed in 2012 and now the second tallest building in the world.

The Royal Clock Tower Hotel in Mecca (also known as the Abraj Al-Bait Towers).  At 1972 ft and 120 floors, it is the tallest building completed in 2012 and now the second tallest building in the world.

As we move into the new century, it is increasingly obvious that the 21st century belongs not to western civilization, but to other civilizations and regions.

That’s an unpleasant truth and hard for most complacent westerners to appreciate or accept, particularly when they close their eyes to the rest of the world and surround themselves only with those selected snippets of information that encourage their belief in the innate supremacy of the western cultural/social/economic system.

It is hard to measure the decline of the west, particularly when we are part of it ourselves, and surrounded by a version of reality that is unwilling to acknowledge our decline.  But if you travel the world (may I modestly say that I have) and particularly if you visit some of the new prosperous regions of the world, the difference between what we have come to accept and what is happening in the rest of the world is astonishing.  Why aren’t we being told about this in our newspapers and on our television programs?

Well, that’s a question with no answer, isn’t it!

One such measure of the economic winners and losers might be urban construction and development.  Here’s an interesting article that gives us a non-standard measure of the relative economic success and prosperity of cities in the world – skyscraper construction.  It lists the ten tallest skyscrapers built in 2012.

If you don’t want to go through the article page by page, here’s the list :

1.   Mecca, Saudi Arabia
2.   Dubai, UAE
3.   Dubai, UAE
4.   Dubai, UAE
5.   Guangzhou, China
6.   Dubai, UAE
7.   Hanoi, Vietnam
8.   Guangzhou, China
9.   Guangzhou, China
10. Chongching, China

In case you’re wondering, you have to get all the way to number 15 before the west appears (Toronto), and number 23 before the US appears (Oklahoma City).  Then another long gap until Canada reappears at #34 and the US again at #45.

As for Europe, its first appearance is #39 (Milan), followed by Moscow (which may or may not be fairly considered as part of Europe) at #48.

This page lists all ‘tall buildings’ (which it defines as taller than 200 meters, ie 656 ft) completed in 2012.  There were 66 in total, of which 22 were built in China, 18 in Muslim countries, and 11 in other Asian countries, but only four in Canada, two in the US, and one in Europe (plus one in Russia).

That would seem to clearly indicate where all the economic growth is occurring and – alas – where the economic growth is not occurring.

Jan 032013
Gun-hating Senator Schumer with a hammer.  Where is his outrage over hammer murders?  What hammer controls does he propose?

Gun-hating Senator Schumer with a hammer. Where is his outrage over hammer murders? What hammer controls does he propose?

The sheep are predictably bleating in response to the Sandy Hook School shooting.  Ban this!  Restrict that!  Outlaw the other thing!

The gun grabbers are leading this chorus with glee, while the sheep rush to sacrifice not just their liberty and freedom but also yours and mine too; all in the naieve ridiculous hope that the bad guys will voluntarily also sacrifice their liberty and their freedom.

Most of the focus seems to be on restoring the useless ban on ‘assault rifles’ (although Senator Feinstein’s definition of ‘assault rifle’ for her ban provision would also include any pistol capable of having a greater than 10 round magazine, which means just about every modern semi-auto pistol).  There’s something about the sight of a modern sporting rifle that creates a knee jerk hate response with gun banners – it seems they wish that only guns that ‘look nice’ with gentle curves and pastel colors should be allowed.

But – let’s stop a minute and smell the roses.  Just how many people are killed by rifles each year?  The answer might surprise you.

As reported here, the FBI uniform crime statistics show that in a typical year, about 300 – 450 murders were committed with a rifle.

But – in the same typical year, more people are killed with hammers than with rifles.  For example, in 2011 (the most recent year for statistics) there were 323 people killed by rifle, and 496 people killed by hammers and clubs.

A typical year shows half as many people again killed by a hammer or club than by a rifle.  And – get this – a typical year also sees twice as many people are murdered with nothing other than the killer’s bare hands (see this table for five years of recent data).

And don’t get us started on the slaughter from knives and cutting instruments – four to five times greater than that from rifles.

So, where is the outrage against hammers and clubs?  Against knives and cutting instruments?  What restrictions are being mooted against a person’s bare hands and feet?  Should there be a ban on hammers weighing more than 1 lb?  What about people with large hands or strong legs?  Should they be required to have surgical alterations?

We urge you to write your representatives and point them to these statistics and ask them to prioritize their actions to reduce violent crime.  Why focus solely on rifles when they are a small part of the problem, and already subject to dozens if not hundreds of rules and restrictions?  Why should honest people have their access to rifles restricted, when dishonest people will ignore any new laws and restrictions, the same as they have ignored all the previous restrictions that already exist.

By focusing on the tool – be it a rifle, knife, hammer, or even a killer’s bare hands – we are avoiding focusing on the real root cause, which is human nature and the propensity for bad people to do bad things, whatever way they can.

Dec 162012
There's a reason you never hear of terrorist attacks on Israeli schools.

There’s a reason you never hear of terrorist attacks on Israeli schools.

As I write this, the country is going through a histrionic act of soul-searching after the Sandy Hook Elementary School shooting in Newtown Connecticut last week.  Gun grabbers can barely hide their glee behind a veil of crocodile tears, and the rush to enact more gun control legislation is terrifying in its irrational intensity.

The biggest problem with gun control?  There’s too much of it.  There’s a reason that people choose to shoot up schools – because they are ‘soft targets’.  Where else can a crazed gunman be sure to find a lot of helpless defenseless people, with no danger of anyone having a gun and shooting back?

Rather than take more guns out of the hands of law abiding citizens who use their guns exclusively for good and never for bad, why not change the prohibition on guns in schools and instead mandate that teachers take small arms defensive training and be issued with firearms.  We require teachers to spend many years of their lives training in how to teach – why not have them spend another week learning not just how to educate our children, but also how to protect them while they are responsible for the safety of our children.

And let’s now look at an interesting statistic that puts our so-called violent culture into a truer perspective.  As we’ve written about before – see here and here, for example – our rates of violent crime are massively decreasing and now are at about half the levels of when they were at their worst.  During these last twenty years or so, we’ve not seen any abatement in unemployment, gangs, drug related activity, and so on.  But we have seen massive increases in gun ownership and massive improvements in the laws that formerly sought to restrict our ability to own, carry and use firearms in self defense.

The conclusion is inescapable.  More guns and a more realistic approach to their use, equates to less violent crime.

Now, for the really telling comparison.  Please read this article which compares rates of violent crime in various European countries.  Near the bottom, it also shows the rate of violent crime in the US and Canada.  Here in the US, we have a rate of about 466 violent crimes per 100,000 of population.  Up in gun-hating ‘peaceful’ Canada, the rate is more than twice as high!  935 violent crimes per 100,000 of population in Canada.

Now go to Europe, and while a few countries have lower rates, look at the countries with hugely higher rates, including, worst of all, the ultra-gun grabbing country of Britain, with a rate of 2,034 violent crimes per 100,000 citizens – almost five times the rate in the US.

These are the real numbers that count.  Sure, 20 dead children is an emotional event that upsets anyone with children (including me).  But that is a rare occurrence, and it happened in a state that is already very restrictive in its gun laws, and in an area where people weren’t allowed guns.  How many laws did that gunman already break?  Enacting new laws won’t be any more effective at preventing him than all the laws already in place.

These children died because of too much gun control, not because of insufficient.

We need to empower and equip schools and teachers with the tools and skills they need to make schools ‘hard targets’ rather than soft ones.  And, most of all, we need to preserve our invaluable Second Amendment rights, so we as citizens can protect ourselves wherever we are (including in school grounds) and so we as citizens can do our bit to keep the violent crime rates falling still lower and lower.

Nov 272012

Gun stores and gun shows are all reporting massive increases in business.

Black Friday this year set a new record for gun sales nationwide, which were up 20% on Black Friday last year.

Gun sales can be loosely tracked to the number of calls to the FBI’s NICS background check service.  Any time a person buys a firearm from a registered gun dealer, the dealer needs to call the NICS service for an instant background check and obtain an approval code for the transaction.  Of course, not all sales are from registered dealers (private party sales are excluded) but probably all new gun sales necessarily go through dealers, and so the NICS call volume gives us a way of understanding the number of new guns being purchased and added to the country’s overall supply of guns in private hands.

One call to NICS can sometimes be for multiple guns being sold at the one time, so from that perspective, sometimes the count of guns sold could actually be higher than the NICS call number.  On the other hand, some states also call NICS to validate CCW licenses, and so these other calls to NICS, for purposes other than people buying new/additional guns, tends to mean that the total guns sold are less than the number of NICS calls.

However you adjust the raw NICS numbers, there remains the simple fact that, in general terms, the higher the number of calls to NICS, the greater the number of new guns sales that are being conducted, and this is particularly true on days when state and local authorities are probably closed and not calling NICS for other purposes (ie, Saturdays, Sundays, and public holidays, such as probably is the case in most areas for Black Friday, the day after Thanksgiving).

In 2012, Black Friday saw 154,873 calls in to NICS, a 20% increase on the 129,166 calls for last year’s Black Friday.  Call volumes were so high that the FBI computer system overloaded and crashed on two separate occasions.

Every month for the last year has seen more NICS calls than for the same month the previous year, and every year for the last ten years has seen more NICS calls for the full year than the previous year.  Here’s the FBI official statistics on a monthly basis for every month since the NICS system started in November 1998.

Now that President Obama has gone on record, in the Presidential debates, as saying he advocates a re-introduction of an assault weapons ban, and with the renewed threat of a UN weapons treaty abridging our second amendment rights as well, we agree with the flood of people racing to buy firearms that there is good reason to be concerned with the status of our second amendment rights.

As some people have wryly pointed out, Obama has been the ‘best friend’ the gun industry has ever had.  His presidency has seen an unparalleled growth in new gun sales, which seems destined to continue into the future.

Oh – don’t forget stocking up on ammo, too.  Continued attempts to tax every bullet sold, and/or to outlaw lead in bullets, show that the gun-banners are exploring every possible way of diminishing your rights to affordably own and use firearms.

Oct 112011

Disney have edited this scene, changing the shotgun into a broom

A seven minute Mickey Mouse cartoon, originally released back in 1938, had Mickey Mouse grabbing a double barreled shotgun from a wall rack in his bedroom to protect himself against what Mickey believed to be a dangerous escaped criminal (in actual fact, it turned out only to be a parrot).

The cartoon is light-hearted and fun, as were all Disney cartoons back then.

But in a recent re-release, Disney have edited out the shotgun, and replaced it with a broom instead (details here).

This is the same Disney that, through its wholly owned ABC network subsidiary, thinks nothing of bombarding all viewers, including children, with adult themes of sexuality, drug taking, immorality and violence (and, yes, even guns).

But apparently a cartoon shotgun in a Mickey Mouse short from 1938 is too harmful to expose to viewers?

Where are these people’s heads, other than up their you-know-whats?  Which is the more offensive – their censoring and substituting the cartoon shotgun, or the appalling imagery and storylines they foist on viewers most of the rest of the time?

Their inconsistency is extraordinary.  Shame on Disney.

Aug 092011

This WSJ prepared graphic vividly shows how US spending on entitlements has more than doubled in the last generation

There’s been an appalling amount of nonsense put forth in justification of the differing points of view regarding how to solve our nation’s terrible debt crisis, and an even more appalling amount of nonsense is now being spewed out of the usual sources to try and shift the blame for our nation’s first ever credit rating downgrade onto anyone else but themselves.

So here are the simple truths that you need to understand.

Government ‘Spending Cuts’ Don’t Exist

The simplest truth of all is that the deal – the ‘compromise’ that was reached between Democrats and Republicans – contained no real cuts to anything at all.  It was a political fiction which politicians from both parties eagerly supported.

The ‘$900 billion in spending cuts over ten years’ that we were triumphantly told had been reluctantly agreed to are not cuts at all.  In reality, the government spending will increase by $7 trillion over these same ten years!

The ‘cuts’ are in reality reductions in spending increases.  They are meaningless.  Imagine a smoker proudly telling you ‘I’m cutting back on my smoking, I’m reducing the number of cigarettes I smoke by five a day’.  And he tells you that he currently smokes 20 a day.  So you’d expect him to drop down to 15 a day, right?

But no, he then tells you, without embarrassment, that after cutting down by smoking five fewer cigarettes a day, he will now be smoking 30!  How is that possible, you ask him in amazement.  He answers ‘Oh, I had been going to increase to 35 a day, so I’ve cut down by five and now will only be smoking 30.’

You end up wondering ‘How can a guy who smokes 20 cigarettes a day tell me he is cutting down by five a day and now be planning to smoke 30 a day?’.

It is the same with government ‘spending cuts’, and here’s how their game works.  You take a federal program and increase its budget request massively for the next few years.  You then make this new requested amount the baseline, rather than the actual amount spent in past years, and any reduction in this ridiculously inflated projection of expenditure for the future becomes a ‘budget cut’ – even though the program ends up getting a generous increase!

This is exactly what has happened.  The government is not reducing its expenditure compared to what it is currently spending or what it spent last year.  It has merely reduced its future fanciful increase.

If the government wanted to ‘reduce its spending’ even more, it could have projected a $10 trillion increase and then allowed it to be cut back to the same $7 trillion, and boasted/agonized over the $3 trillion in ‘cuts’.

So, do you understand, that the ‘reduction in federal spending’ claimed by so-called fiscal conservatives in government is nothing of the sort?

But who has been passing this truth back to you?  Has your congressman or senator told you ‘I tried my best, but the government is still going to increase its spending by a humongous $7 trillion over the next ten years’?  Or have they written impassioned letters to you about how any reduction at all will destroy the nation’s social fabric (if they are a Democrat) or about how the time for financial austerity is now and these bold cuts are necessary (if they are a Republican)?  Both sets of claims are ridiculous, because the government has allowed itself to continue to increase its rate of expenditure.

And has the mainstream media had headlines ‘Government fails to cut any spending and will instead boost it by $7 trillion’?  Nope.

For reasons you will have to guess at yourself, no-one wants to tell you the truth.

The Size of the Federal Budget and Deficit

In 2010, the federal budget in total was for $3.456 trillion dollars to be spent.  This is twice the size of the budget only ten years before.  If your income has doubled in the last ten years (not from promotion and seniority, but just ‘because’), then you’ll feel this to be fair.  But if your income has not doubled in the last ten years, then you’ll wonder how it is the government can double the amount it spends while you (and just about everyone around you) has not been able to double the amount they spend, too.

For 2010 the government not only planned to spend $3.456 trillion, but it also had a projected $2.162 trillion dollars in tax receipts – in other words, in 2010 we had right around a $1.3 trillion deficit.  One out of every three dollars the government spent was money it didn’t have.

In actual fact, the reality is even worse because the government engages in accounting practices that makes high profile corporate accounting fraudsters like Enron (CEO Kenneth Lay found guilty and was expected to receive 20 – 30 years in prison but died prior to sentencing) and Worldcom (CEO Bernard Ebbers received a 25 year jail term) look like saints rather than sinners.  If public companies used the same accounting tricks and outright dishonesty that the federal government uses, their leaders are sent to prison.  Even domestic goddess Martha Stewart found herself incarcerated for five months after a high profile show trial relating to avoiding a $46,000 loss by selling shares before they dropped in value.

But what are the chances of the government censuring itself?  Oh, about as likely as them voting to turn off their gold plated pensions!

The government mixes up its various different sources of revenue so that social security payments – the money we pay into our social security accounts to be held for future payouts back to us – are used to adjust their present shortfalls.  This is spending tomorrow’s money today, and is an incredibly foolish strategy that we ourselves know better than to do, but it is something the government happily does every day.

Look at this chart which shows the ‘official annual deficits’ (blue bars) after this government financial trickery and then compare them to the actual budget deficits (red bars) showing the true deficits.  (This second chart shows a projection for the future, and you just know that these projections are way too positive, rather than realistic.)

So our annual deficit is huge.  Imagine if you spend 50% more than you earn this year – and imagine that you’ve been spending more than you’ve earned for each year in the last decade, and imagine further that you’re planning to continue spending 50% more than you earn each year for the foreseeable future, too.  And also imagine that you’re not spending this money on investments like buying a house, investing in securities, or anything like that.  You’re spending it on luxuries rather than essentials, and on things that you use up and consume and which are then gone, leaving only their cost as a reminder.

What would happen to you?  How long could you continue living like this?

So, ask the same questions of our government.  What will happen to our government, and by direct extension, ourselves.  How long can our government continue spending money it doesn’t have?  And (here’s the really scary question) – what will happen when the government’s lenders stop lending it money?  (Almost the only remaining solutions then become for the government to either default on its debt or to just print more money to pay its debts, something that will create massive inflation and possibly even hyper-inflation).

The unstated huge tidal wave that will engulf us all is the growing interest on the growing balance of money we have borrowed.  Look at this chart which shows what the future holds for us – the red bar is the interest we will increasingly have to pay each year.  People like to talk a lot about the problem with the cost of Social Security (Social Security is not a cost, because it is something we have paid for ourselves) or the cost of Medicare/Medicaid, but what is the fastest growing part of this chart?  Not the green (Social Security) or the blue (Medicare/Medicaid).  It is the red – the interest on our growing debt mountain.

The Real and Very Simple Reason for the S&P Ratings Downgrade

So let’s now consider the historic first ever S&P ratings downgrade.  Is it the ‘fault’ of the Tea Party?  Did the Tea Party support a $7 trillion increase in government expenditure?  No and no are the answers to both these questions.

We can understand the real reason for the S&P ratings downgrade very simply – by reading their statement and explanation of why they downgraded the US.  There’s no need to invent other reasons, just look at the simple words they used to explain their action.

This is what they said :


  • We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.
  • We have also removed both the short- and long-term ratings from CreditWatch negative.
  • The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.
  • More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.
  • Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.
  • The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Expressed really simply, while the politicians hope to fool us when they talk about ‘spending cuts’ that in reality are quite the opposite, they didn’t fool S&P at all.  S&P can see that the ‘cuts’ are actually increases not decreases.  Hence the downgrade.  End of story.

Democrats have tried to spin this as being all the Tea Party’s fault, because S&P said they are concerned about the lack of political consensus.  But when S&P say they are concerned about the political process, what they mean is the fact that politicians have not truly faced up to economic reality and cut any of the ever larger entitlement programs that are causing the deficit increases.  All this arguing over the last few weeks was not about actual decreases in government spending at all, it was instead about how much government spending would continue to increase!

S&P are not complaining about the Tea Party trying to encourage a measure of financial responsibility; they are worried about the Republicans and Democrats who pretend to be financially responsible while acting completely the opposite.  Even after all the fuss and theatrical nonsense about ‘the debt crisis’ (didn’t we all know, 100% for sure, that after a lot of chest-beating by both sides, the politicians would get together and work out a ‘compromise’ that in reality was not a compromise at all, shortly before the point where the government was to ‘run out of money’) the politicians have continued their same-old same-old approach to spending ever more to try and keep buying votes at the next election, no matter what the underlying longer term cost to our nation’s economy may be.

Note also that S&P are saying there is a chance they might downgrade our country’s rating still further if things don’t improve.

One last comment about the S&P rating.  Unfortunately, economics is not an exact science, and jokes-a-plenty talk about how whenever you get any number of economists in the one room, you end up with more than that number of opinions (because some economists can’t even bring themselves to express a single opinion about anything).

Other rating agencies still have the US on the top rating, and so the S&P rating drop, while significant, does not conclusively mean that it is the end of the world for life as we know it.  On the other hand, S&P’s decision to do something as hugely significant and symbolic (and to risk attracting the ire of the US government and people – Michael Moore suggested that they should be arrested as criminals) as to downgrade the US economy is certainly not something they’d do lightly, without a huge amount of discussion and thought.

How Did We Get to This Point

The US economy was formerly the rock on which the entire world based its financial system.  Our economy was healthy and strong, and other nations were happy to invest in our economy and our currency, because it seemed the safest place in the world to place money, and even nations that weren’t investing in the US were happy to use our dollar as the basis for their international trade.

All those things are changing – or have already changed.

So what has happened to our economy?  I’m not even going to talk about the ‘hollowing’ of the US economy – the loss of most manufacturing type industry to other countries, and the fact that just about anything and everything we buy these days comes from China rather than from a US factory.  Yes, those issues are indeed problems, but they are not the root cause of the issues facing us at present.

The issue we’re facing at present is that we’re spending too much.  That’s the simple problem.  We – that is, our government – is ignoring how much money it can bring in, and is spending money without any thought to budgeting or fitting its expenditures to match its income.

And what is it spending so much money on?  No – not defense (something too many people love to also cite as the runaway cost that needs to be reduced the most).  And, alas, neither are we spending money on bona fide capital investments and improvements (like new highways) that will give us lasting benefits for decades to come.  It can sometimes make sense to borrow money to build something that will then give you decades of lasting benefit – that way you are paying for the asset during the time period you are using it.

The government is spending money on ‘entitlements’ – welfare programs and the like.  Increasingly, our politicians have been buying our votes each election cycle by giving ‘us’ more benefits and handouts.  In the mid sixties and through to the beginning of the 1970s, the percentage of the federal budget spent on entitlements was less than 30%.  But since that time, with the only notable exception being during the Reagan years and the first half of the Bush snr presidency, entitlement spending has been steadily growing – not just in real dollar terms, but also as a percentage of the total federal budget.

Entitlement spending is now over 65% of the total federal budget (as shown in the chart at the top of this article).  Two out of every three dollars the government spends goes towards payouts (some would say ‘pay-offs’) to individuals.  As for defense spending, that represents a mere 20% of the federal budget.  And of that 20%, about 13% goes to actually spending money on defense, and the other 7% is interest on government debt that is so-called ‘defense related’.

No wonder that half of the US population no longer pays income taxes.  And that is an unsustainable and crazy situation to be in.  If the definition of ‘truly needy’ has shifted from a point where the bottom 5% or even 10% of the nation needs support to now where the greater half of the entire nation all needs support, then we need to change the definition back again.

Because there is the other part of the problem.  Politicians love to talk about ‘the wealthy paying their fair share’.  But what is a fair share?  Is it fair that half the country pays no income taxes at all?  Is it fair that someone who has been successful, who has created jobs for other people, who spends money on things that help other parts of the economy function, and who saves some money, creating funds available to then be lent to others; should this person pay hundreds of thousands of dollars a year in taxes (or even millions of dollars)?  Who do we better trust to keep our economy stable and growing – successful businessmen, or politicians?

How about some hard-hitting talk about the ordinary people also paying their fair share?  Don’t get me wrong – I’m an ordinary person too, and I don’t like paying taxes.  But the solution to my not liking paying taxes is not to tax the wealthy guy more, it is for the government to reduce its spending.

The real problem here is the government is trying to become unaccountable for its expenditures.  By focusing on a minority of the population to get their tax income from, a government no longer has to worry about any retribution at the polls, because although the heavily taxed minority might vote against them, the 50%+ of the population who are net beneficiaries of government spending will support the government, and enough of the people in the grey area between paying no tax and paying a lot of tax will support the government to ensure its survival.

Lastly, let’s just think what the $14.3 trillion federal debt ceiling (prior to it being increased) means to us.  It means that each and every one of the 300 million US citizens have close on a $50,000 debt incurred by the government on our behalf.  If you’re a family of four, that means your share of the nation’s debt is almost $200,000.

If you think that is a lot of money to owe, there’s more to consider.  This is just the total of the federal government’s debt.  How about the money your state owes?  Your county?  Your city?  How about your school district?  Fire district?  Port Authority?  Transit Authority?  All these other organizations probably have ‘negative net worth’ as well, adding further to your overall indebtedness.

So in total, you personally probably have closer to a $100,000 share of the total government debt of all types, and your family is getting close to half a million in debt.  And unlike your own personal debt – a mortgage on a house, a loan on a car, perhaps a student loan still being repaid, and hopefully not too much credit card debt – what can you show for this huge ‘investment’?  A lovely house?  Nope.  A shiny new car?  Nope.  How about increased earnings capabilities as a result of a degree or trade qualification?  Not that either.

Which begs one final question.  If we can’t see anything as a result of the huge over-expenditures the government is making, how exactly would we be harmed if the government eased back on spending money it doesn’t have?


1. – this shows the growth in government expenditures that are payments to individuals from 1965 to 2011, and draws its raw data from OMB.  The chart at the top of this article is taken from this source.

2.  – this shows the makeup of defense spending

3. – this shows total 2010 government spending

4. – the source of the ‘government cuts $900 billion but raises spending by $7 trillion’ statement.  The article goes off on a tangent by strangely comparing our debt to Chinese military spending (and probably underestimates the Chinese military budget, too) but the first part of it is excellent.

5. – Alan Greenspan acknowledges that the government can ‘cheat’ by simply printing meaningless money to ‘pay’ its debts, then amazingly blames the US’ problems, not on itself, but on Italy!

Aug 042011
School prayers are encouraged in Toronto, but only for Muslims, not Christians

School prayers are encouraged in Toronto, but only for Muslims, not Christians

Canada seems hell-bent on committing national and social suicide; turning its back on the country’s traditional values while welcoming and giving preferential treatment to a value system that is hostile to everything that Canada’s society has been built upon.  And while the examples in this post are in Canada, we all know the same thing is happening here in the US, too.

Here are two examples that you should read and ponder the implications of.

First, here is a fairly straightforward situation showing how Muslims get given ‘get out of jail free’ passes by the Toronto police.  Behavior that would get us arrested is apparently acceptable if you are a Muslim.

Okay, so that is something to get upset about, for sure.  But it seems like a finite sort of issue, rather than one which threatens to overturn Canadian society on its head, right?

So now please read this second article, and be afraid – be very afraid.  The scary part is not the appalling hypocrisy that has Canadian public schools banned from any type of linkage to anything Christian, but which allows them to encourage strict Muslim prayer sessions.  While that is bad enough, the really terrifying part is the analysis, towards the end of the article, about the demographic trends in western society.  To put it bluntly, Muslims are immigrating to western countries at greater rates than people of other religious persuasions, and once they get there, they are outbreeding us by two to one (in some cases even more).

Our future looks to be increasingly Muslim dominated.  In the past, it has made no difference to us if our neighbors are Protestant or Catholic or Jewish or agnostic/atheist.  Or, let’s open our minds some more – it also didn’t matter if they were Hindu or Buddhist or even Zoroastrian or – let’s go all the way – belong to some sort of ancient fertility cult.  Because, in at least the last hundred years or so, all these other religions and their adherents have been able to peacefully co-exist in western society (even if not necessarily in their own home countries!) without seeking to change our society and demanding that non-followers of their religion must adhere to their own personal opinions, views, and values.

But the Muslims seem to be different.  They seek to impose their values not only on themselves, but on the people around them too, and their values and behaviors are very different to ours.

That wouldn’t be a problem if we stood up and said ‘Sorry, you’re in our country, which is founded on Christian values of tolerance, decency, and egalitarianism’ and insisted they either conform to our social standards or return back to the squalor from which they’ve escaped.  But, for reasons that I can’t start to comprehend, we don’t do this.

Let’s be frank here – when Muslims move to our countries, they are moving to countries with vastly better living standards than what they’re leaving behind them (why else would they come here?).  And – here’s the irony of it – the reason our societies are so much more affluent and appealing to them – is because we have Christian/western standards and those have allowed us to build the positive societies that these immigrants simultaneously seek out to live in and then wish to destroy.

The ultimate sadness in all of this?  Our problem is not really the Muslim invasion that is occurring everywhere around us.  Our problem is ourselves and the passive way we go out of our way to accommodate them and their beliefs, even though those same beliefs are the opposite of the traditional values that our societies are built on.  Most of all, our problem is the hypocrisy that sees us restricting and debasing our Christian heritage while welcoming the new Muslim system and giving it preferential treatment.

We have met our enemy, and it is, alas, none other than ourselves.