Our rights do not originate with government, but they are to be "secured" by government.
Formerly: Libertarian Party of Citrus county

Tuesday, April 26, 2011

Patent law and Constitutional Limits

By Tom Rhodes, 4/26/2011

To bad none of the GOP or newly elected TEA Party legislators actually cares about the constitution. The Senate has passed a bill (S.23) to take away the property rights of American inventors. They held a quick poorly publicized hearing that did not include a single inventor, a small-business person, a venture capital person or a constitutional authority. It’s sister bill in the house is now being pushed without any publicity, H.R. 1249.

This bill is clearly unconstitutional, as rather than acknowledge one of the most valuable individual rights guaranteed in the U.S. Constitution is the right of "inventors" to own "the exclusive right" to their "discoveries" for "limited times” (see Article I, Section 8 of the US constitution), these bills give the right to an invention to the person who first files. Get that, if a company files the paperwork, they have the right to an invention, not the actual inventor.

The right to one’s own invention has been recognized and reinforced by our system of granting patents to inventors, U.S. patents are awarded to the "first-to-invent" a new and useful product. The U.S. patent system was unique when the Constitution was written and is still unique in the world today. It protects individual property rights, not government filing rights. This is one of, if not the primary, reason why the United States has produced most of the world's great inventions and dominates the world in innovation.

Every other country in the world award patents under a system called "first-to-file," i.e., the first person to file a paper with a government office. The rest of the world would prefer that we changed our system from first-to-invent to first-to-file. Harmonizing as it’s called, would take the system that has produced more innovation than any other and proven successful for centuries, and make it match the proven inferior system the rest of the world uses.

Even if harmonizing were a reasonable idea (it’s not) the bigger problem is that it is clearly unconstitutional. The Constitution, Federalist Papers, and centuries of court cases are very clear, and plainly state that the property right belongs to "inventors," not to someone handing a piece of paper to a government bureaucrat. Not a single scholarly law review article proves or claims otherwise, while many which have examined the issue have concluded that the “first-to-file” concept is unconstitutional.

Where are the TEA Party, and other so-called constitutional defenders on this issue? (I hear crickets chirping over the silence). An “inventor” through all of US history, and the writings of our forefathers has always meant the first-to-invent something, not the first to do paperwork. If you look at the “Patent Acts,” laws created in 1790, 1793, and 1836, you will see that historically we have always considered a patent to go to the first “original and true inventor.” First-to-invent, not first-to-file conforms with our tradition and history and over 200 years of court proceedings. First-to-invent is the standard we have used, and the standard that has proven to best protect innovation, and provide a foundation that has resulted in more innovation than the rest of the world combined. We have over 200 years of settled and successful law. Why are our leaders even considering the un-American notion that we should utilize treaties and foreign laws to reinterpret our Constitution and statutes concerning patent law?

Who benefits from first-to-file? This concept elevates paperwork over true inventions. First-to-file favors foreign inventors and big corporations that have the lawyers and resources to file quickly and redundantly, while taking rights away from independent inventors and small businesses.

First-to-file may make patents more efficient, and international agreements easier, but it destroys individual rights in favor of big business, and violates our Constitution. This is a truly perverse constitutional issue that YOU should be outraged over. Get out of your internet browser, fire up your word processing software (if you’re using word note that MS lost a patent case and is now at the US Supreme court trying to defend its theft of another’s invention) , and type out a letter, and sign it by hand and mail it to your US Representative, and urge him to vote against “harmonizing” US Patent Law.

Wednesday, April 20, 2011


Typical liberal Luddite – in the true historic meaning of the term - Rep. Jesse Jackson Jr. (D-Ill.) declared that the Apple iPad was responsible for unemployment. In a impassioned declaration supporting bookmakers and publishers he said, "Now Borders is closing stores because why do you need to go to Borders anymore? Why do you need to go to Barnes & Noble? Buy an iPad and download your newspaper, download your book, download your magazine. What becomes of publishing companies and publishing company jobs? What becomes of bookstores and libraries and all of the jobs associated with paper?"

Imagine if Rep. Jesse Jackson Jr. (D-Ill.) was a political leader in the mid 15-th Century, he probably would have been working for the Church as it had all the power. His impassioned declaration would have read, "Now the monastery is closing because why do you need to have copyists? Why do you need to go to the Church or Town Square? Buy an Bible, or buy one of Luther’s books and read it yourself. What becomes of copyists, monks, Just think of all the quill maker jobs. What will the woodcarvers and their suppliers do?"

In the mid-15th century Johannes Gutenberg invented a mechanical way of making books. This was the first example of mass book production. Before the invention of printing, multiple copies of a manuscript had to be made by hand, a laborious task that could take many years. Later books were produced by and for the Church using the process of wood engraving. This required the craftsman to cut away the background, leaving the area to be printed raised. This process applied to both text and illustrations and was extremely time-consuming. When a page was complete, often comprising a number of blocks joined together, it would be inked and a sheet of paper was then pressed over it for an imprint. The susceptibility of wood to the elements gave such blocks a limited lifespan.

The result of Gutenberg’s invention was something called the Reformation. Without the printing press, the ideas of Luther, and later Calvin, would have been easily suppressed by Rome. The number of people who could read would have remained minimal, and the cost of creating a Library would have remained out of the reach of most small cities and villages. The printing press, and the generosity of industrialists like Carnegie, implementing new technology, has led to virtually every small town in the USA having a library, where the people could for free go and read books. Libraries cost the community, but the cost is minimal compared to the volume of information they provide. To use a library a person must take time, spend money on traveling, and provides limited access due to library hours, and is limited to the books on hand of a specific library. To create bound paper books uses large amounts of physical resources, paper, fuel, printing presses, etc. The printing press and resultant surge in libraries was a huge boon for all of society, but not so good for quill makers, wood carvers, and copyists, and hurt the control of the ruling elite.

Rep. Jesse Jackson Jr. (D-Ill.) is typical of liberals and socialists. They support unions who uniformly resist technological advances. In the US we make more automobiles than ever before. Ford, GM, Chrysler, Mercedes, BMW, Honda, Hyundai, Toyota, BMW, KIA, Nissan, Subaru, and Telsa, produce a larger number of cars of better quality in the USA than ever before and with just a fraction of the people it used to take. One of the prime reasons Detroit is just a shadow of itself is because the unions gained significant power and authority over law makers and were able to stop car companies from modernizing because it would eliminate union jobs. The unions became so strong that if technology resulted in the elimination of a position on the assembly line the car company in Detroit had to keep the person employed, and literally had to pay employees to sit in a room and do nothing. This was a huge contributor to why they moved and built their new facilities anywhere but Detroit and Michigan. The Luddite resistance to technological advances was a major contributor to the fall of Detroit.

EBook readers are not new, originally called Cyber-Readers or Cybooks, they have been available for over a decade. It’s just taken a few years for them to be accepted by the public. Personally I’ve been surfing the web, editing documents, watching movies, and reading eBooks on my Palm TX for over 5 years. Although the interface is not as glitzy as the Ipad or new Android tablets, Apple and Google are just now producing products with the functionally, including reading eBooks, that the Palm TX has had since 2005. From a single point of origin, Mainz, Germany, printing spread within several decades to over two hundred cities in a dozen European countries. By 1500, printing presses in operation throughout Western Europe had already produced more than twenty million volumes. In about 50 years more books were produced then in all of human history before. It created the Publishing industry.

Today, like the printing press, eBooks offer even greater access to information massively less cost. The Gutenberg Project now has over 40,000 eBooks available in virtually any electronic format at no cost. Anybody with a Nook, Kindle, Palm, Ipad, Iphone, or other similar device has a huge world of information sitting in their hands. The benefits in savings in material resources and availability of knowledge to everybody at such minimal costs can only benefit society. Visit The Gutenberg Project or new models of publishing like that offered by Baen to see what eBooks have to offer, even for free. With the volume of “free” books available you would think that book sales would drop. In reality antique bound paper type book sales are down, but the sale eBooks which now out sell traditional books have more than made up the difference. Now for the price of three new hardback books, you can have instant access to tens of thousands of books for free.

The explosion of relatively inexpensive information that Gutenberg ushered in changed the world. EBooks, and the explosion of inexpensive information that hand held tablets, smart phones and the internet have made possible, are again changing the world. Changes in the way and the ease in which people can get information severally hamper the control ruling that elite have over the masses. Hillary Clinton famously remarked that their needed to be some kind of “gatekeeper” on news. She like the ruling elite in the past, want the rulers to have control over what and how the masses receive information.

What I have experienced is that that in the month after finally convincing my 19yr old son to read an eBook on my Palm T|X, he read 6 novels. I wanted my Palm back, so I gave him a Nook for his birthday. Since then the sound of the TV and video games is no longer the dominant noise in the house. The purchase of a cover for the Nook that gives it the “feel” of a real book actually increased its use. Raised in a reading house my sons almost always are reading a book or two, but the ease of use and ability to read a chapter or two before purchasing a eBook has dramatically expanded both the volume and variety of reading. My son’s old eight to ten book a year habit, is now a 30 to 40 book a year habit. His disposable income for reading has not increased, but his access to reading has. He’s found authors like Cory Doctorow, and others who are generally not available in either the library, and seldom in the big book stores. Doctorow has shown a model for publishing where literally giving his books away has resulted in significant sales increases of his books. His libertarian methodology of voluntary exchange without government or big business control of the transactions is a thorn in government and big business attempts to control who and what get’s published.

In 1980, prior to the internet, there is a book written by Bruce Bethke, that literally coined a name for an entire genre of books, titled “Cyberpunk.” In that era, publishers controlled what people could read, and what could be printed. This novel was purchased by a publisher via an exclusive contract which forbid Bethke from selling the novel to any other publisher. The publisher decided to not release the novel, causing several years of legal battles over the rights to the book. Bethke has a downloadable version of the novel available on his website. This is an example of how technology has taken control away from the ruling elite, in this case Publishers.

I find it odd that Democrats and liberals in general often refer to conservatives as Luddites. The behavior of liberals is clearly more Luddite than any other group. The Luddite socialism that dominates the Democratic Party is inherently selfish. It requires the rest of us have less and pay more, so particular individuals may continue to make money from old technology. They want the power to determine what technology the people are allowed to adopt. Rep. Jesse Jackson Jr. and his Washington brethren, think that artificially keeping the price of books and other information high to protect the jobs of publishers and printers is better for the people. If Washington Politicians truly cared about the people, they'd worry about the millions who like their eBook readers rather than the thousands who wield clubs, looking to smash the "infernal" machines. Never mind the new jobs of the people who make eBook readers, overpriced eBook covers, lights, and accessories.

Information technology is surpassing the ruling elite’s ability to control the people. Personally I believe that the Democrats are against modern eBooks and internet technologies because it severely limits how they can control the information the masses receive, and the Republicans won’t fight them on this because they are against eBooks and similar information technologies because these new technologies limit the profit they can make from selling information.

Watch the Watchmen

Editor's Note: I hope Mr. Stossel doesn't get mad, I reprinting his article in total here. This particular subject is a huge problem in the USA, and one I think and am working on having the Libertarian Party attack. You will note that there is a specific plank about filming government officials, including law enforcement, in the Proposed Platform which should be adopted at the end of the month at the Libertarian Party of Florida State Convention. Thank you Mr. Stossel for bringing this problem into the spotlite.

Watch the watchmen
John Stossel © 2011
April 20, 2011

I believe in the right to privacy.

Yet I can think of someone who deserves very little privacy – a policeman making an arrest. Unfortunately, in some states it's a crime to make a video of a policeman doing just that. People recording police have been threatened, detained or arrested. Some were jailed overnight.

That's wrong. Police work for the public, they're paid with tax money, and most importantly, they have tremendous power. They've got the legal right to pull guns, detain us, lock us up and, in some cases, shoot us. The potential for abuse is great. So it's a good thing that modern video cameras are now so commonplace. Any abuse of police power in a public place is likely to be recorded. Why should that be a crime in some states?

I asked Radley Balko, an editor at Reason magazine who keeps an eye on issues like this: What's happened to the people who were arrested for videotaping cops at work? Balko will be a guest on my Fox Business show this week.

"In most of these cases, the people aren't actually prosecuted," Balko said. "The charges tend to get dropped before these cases get to trial – I think because the people prosecuting these cases and the people who make the laws don't want the laws to actually get challenged. But it's a night in jail."

On what charge?

"In states that have these two-party consent laws, they rely on the old wiretapping laws. The claim is that police officers have a right to privacy while they're on the job in public exercising some pretty powerful responsibilities that we give them. I think that claim is ridiculous."

He says some authorities now claim that people who record the police while being arrested are "interfering with arrest or ... refusing to obey a lawful order, if they tell you to turn the camera off and you don't."

How does it interfere with the arrest?

"It's a ridiculous argument. But here's the thing: You may not go to jail for these charges. But they're going to take your camera, going to arrest you, you're going to be handcuffed, put in the back of a squad car. And nothing is going to happen to the police officers who illegally arrest you – usually."

Occasionally a cop caught abusing his power is arrested or fired. But that's rare.

In Maryland, motorcyclist Tony Graber got in trouble for recording a cop who pulled him over for speeding. Graber didn't know it was a cop. He was just a guy in plainclothes with a gun. The cop eventually identified himself.

"Graber didn't get arrested until he posted that video on YouTube," Balko explained. "Once he posted it ... the state police raided his home – came into his home early in the morning, guns drawn – confiscated a bunch of computer equipment, held him and his parents at gunpoint, arrested him. He spent several nights in jail. He had felony charges hanging over his head until the case finally got to court."

Fortunately, a state judge threw out the charges and wrote a strong opinion:

"Those of us who are public officials and are entrusted with the power of the state should not expect our actions to be shielded from public observation."

He ended by asking, "Who watches the watchmen?" – a question Plato raised in "The Republic." Good for the judge. But Balko points out that no one punished the authorities who abused their power.

"The prosecutor who charged him, the cops who raided him and arrested him – they were all wrong about the law and did real harm to him, and none of them are going to suffer any consequences."

Most police officers told us that they're fine with cameras, and some were happy they were recorded when they were vindicated of misconduct charges thanks to a video made by a bystander. The cops who object tend to be problem cops.

That little phone with a camera is a good thing. Now it's even a weapon against tyranny.

But, Balko added, only if the laws "ensure that we can continue to use it that way."

Thursday, April 14, 2011

Liberals Think Your Stupid Or.....

Either liberals can’t do basic math or they are liars. There is no other answer. Their constant mantra of “Tax the Rich” is based on creating a false “class warfare” not on increasing government revenue.

Consider what would happen if we did as Michael Moore suggested and “Eat the Rich.” If we taxed those who make more than $250,000 a year at 100% and taxed 100% of all Fortune 500 companies’ profits, and confiscated all billionaire's total assets, we’d only cover a portion of the government’s annual expenses for one year. The rich don’t have enough total wealth to fix our problems. What’s worse, is next year those people would change their behavior and make dam sure that they reduced their income and hide their profits, or move to a place that allowed them to keep the money they earn. So the idea that we can solve our problems by taxing the rich just doesn’t add up.

Michael Moore is a prime example of people changing behavior based on what it will cost him. He was recently in Wisconsin ranting and raving and getting himself on the news in support of the public sector Unions, yet when it’s his money, he chooses to shoot his films where he doesn’t have to use union labor and shoots his films without union labor so that he can maximize his profits. He just doesn’t expect everybody else to change their behavior so they can keep more of what they earn.

As a percentage of GDP our taxes are the most progressive of all western industrialized nations. This explains why American businesses are moving overseas. Liberal high-tax ideologues don't see it. They would be horrified at the idea that we ought to lower our corporate tax rates, just so that more American businesses would do more of their business at home, providing more Americans with much-needed jobs.

You cannot cut taxes for the poor, they don’t pay any taxes, and therefore virtually any tax cut would result in being for the people who pay the most taxes, the rich. Because tax policy actually does affect behavior, when the rich are allowed to keep more profits, they do things to generate more profits, and hence although the rate of taxation may be lower, the results are the total dollars they pay in taxes is higher. History is clear, cutting very high tax rates has ended up bringing in more revenue to the government in the Coolidge, Kennedy, Reagan and Bush 43 administrations. This included more – that’s MORE not less-- tax revenue from people in the highest income brackets than before. Some liberals doubt this and claim it is a lie using the fact that under Reagan with the tax cut was an accompanying increase in the national debt. The fact is total revenue did increase but was more than offset by even greater government spending; if spending increases faster than revenue increases it doesn’t do much good, you're still deeper in debt.

No matter what a liberal thinks, or a liberal wants to be true, or what a liberal tells us, changes in taxes policy result in changes the way taxpayers behave. Regardless of the tax policy, the revenue collected by our government since WWII remains relatively constant at just under 20% of GDP. Lower taxes and we generally see an increase GDP and thus greater revenue for the government. Raise taxes and people move their money to tax free bonds or offshore. Their money may not earn as much profit but amount of money they can keep is better and there is less risk. There is a balance between zero taxation and 100% taxation which maximizes revenue. History is clear that if you raise taxes too much you get less. Liberal high-tax ideologues don't see it that way. They would be horrified at the idea that we ought to lower our corporate tax rates, just so that more American businesses would do more of their business at home, providing more Americans with much-needed jobs.

Liberals do not want to increase taxes to increase government revenue, they know that this will not work; they are liars if they say or imply that we need tax increases to increase government revenue. Liberals are more concerned about wealth inequality than they are about jobs, the health of the country, liberty, freedom, human rights, quality of life. Rather than deal with what “is”, they deal in what they think “should” be. The act just like a mommy, and don’t think anybody should suffer as a result of the life choices they make, and want to make everything fair. Because they think it’s unfair that some people have more than others, rather than let some people succeed, they are willing to make everybody suffer. In a rare moment of honesty, while on the campaign trail Obama said that raising the taxes on the rich was about being fair, not about raising revenue for the government.

Liberals fundamentally don’t believe that society should reward people for what they contribute to society based on free and voluntary exchange with their fellow members of society. Because this will result in some people having more than others, becausenot everybody has equal talent, abilities, drive and luck. Liberals believe but that some ruling elite should distribute wealth based on their egalitarian principles, not based on the effort individuals contribute to society. The 20th century has many examples of this, all failed and ended up not only putting everyone in those societies (except for the ruling elite) into poverty, but resulted in those same ruling elite murdering tens of millions of people to maintain their power.

Don’t confuse our current system with Capitalism or Free Enterprise, because it isn’t. We now live in a semi-free corporate crony state, where the government picks and chooses who it wants to succeed based on how much they “donate” to the correct political coffer. It is not free enterprise, fair or voluntary trade between free people. Look at the tax code; nobody can say that it treats everybody equally under the law. GE is a prime example, they have legally found a way to protect their shareholders assets and virtually didn'tpay a dime in taxes last year. Again this is where liberals confuse what “is” with what they think “should” be, and blame capitalism for the unfair advantages some lawmakers in washington have granted to favored corporations.

Taxing income and profits and the ability to create special exceptions to those taxes (loopholes) is how the ruling elite in Washington hand out political favors for “donations” and attempt to control how and where people spend money. If they think you should buy an electric car, then they will allow you to deduct from your taxes part of the price of that car. This is of course of no benifit to the poor who cannot afford a new car. It gives the government an excuse to know how much everybody earns and how they spend that money, and uses that information to change and create tax law to manipulate the behavior of people to do what the ruling elite thinks is best, then redistribute these tax funds to purchase votes and maintain power. Because controlling tax laws have given the government so much power it is hard to imagine them truly “simplifying” or making the tax laws “fair.” If they did so it would greatly reduce their power. We will never again see fair taxation, the ruling elite have discovered they can control behavior and buy votes with tax dollars.

Listening to Obama, Pelosi, etc. it is clear that the liberals are upset . . again. They lost the power to totally control tax law, because the people of the USA got all uppity with what they were trying to do when they had the power. Even with democrat control of the House, a super majority in the Senate, and the Presidency their ineffectiveness was evident as they failed to pass a budget. Now, because all tax laws must start in the House of Representatives and even though liberals control the Presidency and the Senate, they only have moderate control of tax law. To get what they want, they once again have to deal with conservatives (Rep. Ryan) and libertarians (Rep Paul). They are doing so by calling Ryan’s proposed spending increases extreme cuts, and maintaining their call to tax the rich more.

So we are left with only two options when thinking about liberals. Either the liberals are so dumb that they can’t do basic math and look at history, or they are lying and think the American people are so dumb that they can’t do basic math and look at history. In either case their continued call to save the country and make things fair by increasing taxes on the rich, can obviously be discarded as a the wrong direction for this country. It will neither generate the increased revenue as promised nor will it make things fair. You decide either liberals can’t do basic math or they are liars.

Tuesday, April 12, 2011

Paper Money vs. Tangible Assets

Now that it is clear that the people elected by the TEA Party to protect our liberty and institute financial responsibility by the government, are going to do what the Democrats and Republicans have for over 50 years, and spend spend spend regardless of the available revenue and wishes of the people (62% of us don’t want the government to extend the debt ceiling). It’s time to start changing our behavior and the way we think. The government will not live within its financial and constitutional restrictions anymore. Deficit spending at the current rate will bankrupt the USA and we will see another true depression. In less than 10 years there will not be money for Medicaid, social security, and welfare. That means in less than 10 years about half the population will have no means of support. What we will see will make the Great Depression look like a mild dip in the economy. For a thorough explanation read “The Return of Great Depression” by VoxDay. Here is an interview about the book.

Right now we are experiencing far more inflation that either the government or the news is telling us. Unless you live in a bubble you know this is true, just go to the grocery store or gas pump. At the grocery store you are seeing a steady significant increase in food prices. For example a 1 pound package of pasta less than 2 years ago cost 99 cents, now it costs $1.79, and a 16oz can of veggies now only contains 13oz. For many items the price appear to be stable the actual quantity of food sold per package has decreased. If the deficit spending doesn’t stop soon you’ll pay $10,000 or more for that pound of pasta.

Inflation is going to take away your savings and cripple the USA. To pay off the impossible debt of the government it will simply print money. This has been the way governments in debt trouble get out of debt. Unlike Greece, a relatively small country, there is nobody who can or will bail out the USA. If you think this can only happen to a third world countries like Zimbabwe and not to a modern western republic, you’re wrong, it has. Less than 100 years ago Germany (the Weimar Republic) went through hyperinflation.

Timeline of German (Weimar Republic) Hyper-Inflation

  • June 24, 1922: 272 Reichsmark (RM) = 1 US dollar
  • July 1922: 670 reichsmarks = 1 US dollar
  • August 1922: 2,000 reichsmarks = 1 US dollar
  • October 1922: 45,000 reichsmarks = 1 US dollar
  • November 1922: 10,000 reichsmarks = 1 US dollar
  • December 30, 1922: 500,000 reichsmarks = 1 US dollar
  • February 1923: Reichsbank buys back RM (or reichsmark); stabilizes RM at 20,000 to 1 US dollar
  • May 4, 1923: RM 40,000 = 1 US dollar
  • June 1, 1923: RM 70,000 = 1 US dollar
  • June 30, 1923: RM 150,000 = 1 US dollar
  • August 1-August 7, 1923: RM 3,500,000 = 1 US Dollar
  • August 15, 1923: RM 4,000,000 = 1 US Dollar
  • September 1, 1923: RM 10,000,000 = 1 US Dollar
  • Around September 10 to September 25, 1923: Prices reportedly rise hourly in several German cities.
  • September 30, 1923: RM 60,000,000 = 1 US Dollar
  • November 15, 1923: Rentenmark issued; pegged to the Gold Standard; Rentenmark 4.2 = 1 US dollar; at this time: Old Reichsmark 4,200,000,000 = 1 US dollar.

    It could happen here, too, and all the money you've scrimped and saved could become worthless in a short order. Notice what they did to stabilize their currency, pegged it to Gold. Gold for thousands of years has been the standard to own to protect assets. Not to grow in value but to protect accumulated wealth. The rich own property, gold, jewelry, and other real assets as hedges against inflation.

    What can you do? You can change your behavior. Traditional savings will not be adequate, forget growth, you need to put a significant amount of your assets into something tangible. Don’t go out and buy Gold, right now it is artificially high because significant people have realized the above truths and the law of supply and demand have increased its value above its traditional level. When (not if) hyper inflation hits we will be back to barter, until the government is forced to create a stable currency. Although valuable gold will be hard to trade and not as liquid as you may think. You need to think about what people will need and want that you can reasonably store and protect and will hold its value? The reality is a breeding pair of pet goats, or promoting your kid to raise a calf for 4H, are probably better investments than Wall Street. Unfortunately the people that will probably have the last laugh are survivalists. Yep those crackpots who are hording food, fuels, etc. will be better off when hyper inflation hits.

    Personally, trying to figure out what assets will be tradable when hyper inflation hits but would still be either usable or maintain their value if the US does by some miracle avoids the next depression (it won’t) is difficult. I believe guns and ammo will be of high value and very trade-able, food stuffs will be valuable including basics like baking powder, yeast (for brewing and breads ), and spices. Owning some basic building supplies, nails, PVC pipe, tarps, and having tools, fasteners, etc may be valuable, but if the economy recovers what do you do with 100 lbs of nails and a half-dozen hammers that are no longer a viable trade good? I’m stocking up on sugar and grains, way more than I can reasonably use, except for the fact that my hobby, home brewing, has given me the skill to turn that sugar into alcohol. Now that is a trade worthy commodity of historical significance.

    Regardless of how you do it, being prepared for a crash in the dollar makes prudent sense. If the powers that be vote to once again extend the debt limit, converting our assets from cash and other paper money to real trade worthy products is practical and shrewd.
  • Monday, April 11, 2011

    How to Explain Our Budget Crisis so People Actually Understand.

    By Tom Rhodes, April 11, 2011

    The Republicans and Democrats agreed to $38 Billion dollars in spending cuts. Sounds big, the news and our elected leaders are all saying how grand these spending cuts are, and how draconian any bigger cuts would be. The fact is the cuts are less than the interest on the national debt for just one year, and are barely symbolic, so they continue to choose to continuing borrowing money we don’t have.

    Let’s put it this way, assume you are spending $1500 more than your income by using a home equity line of credit. Every additional dollar you spend over your income adds to your mortgage. Part of what you are using that $1500 in excess of income is to make part of your mortgage payment (like using one credit card to pay another). You finally realize that you (republicans) and your spouse (democrats) can’t keep spending they way you have, because you are digging a financial hole you may not be able to climb out of. You both argue over what to cut, and it seems everything is essential. So after lots of loud arguments you and your spouse agree to cut your excess monthly spending by $38. The results are that you and your spouse are mad at each other you’ve reduced your excess spending from $1500 more than what you earn to a mere $1462 more than your paychecks. STUPID! Does any rational person think that when you are spending $1500 more than your income, reducing your spending by $38, is going to help your debt problem? When this kind of spending has maxed out your line of credit, would any reasonable person think that because you will now only spend $1462 more than your income that it’s acceptable to get yet another line of credit and borrow more money?

    In the real world the only acceptable solution would for you and your spouse to make some serious cuts in your spending, and stop spending more than you take in. Deficit spending over a short period of time for a real crisis is understandable, and most people have had to do that, but to do that every day, week, month, and year without any plan to reduce spending to below your income so that you can pay off the huge debt is a surefire road to bankruptcy. What do we call nations that do this? - Greece and Iceland. Permanent deficit spending is not sustainable.

    We already have the most progressive taxes in the world. Our rich (the people who hire others), already pay a disproportionate share of taxes compared to the rest of the population. Our top 20% pay over 80%, while our bottom 50% pay less than 3%. Our history has shown that regardless how we structure our taxes, we cannot collect much more than 20% of GDP in taxes. If we raise taxes people find ways to get out of the taxes by either moving to where they can keep more of their money (off shore), or hording their assets (stop investing and sit on your cash), or some other way to get out of taxes (look at GE for an example). The amount of money the government can get out of the people is maxed out. Sustained spending at 24% of GDP as Obama proposed with revenue at 20% of GDP won’t work. You cannot continue to spend 5% more than your income and not go bankrupt. To become financially stable we must reduce spending to below revenues using the difference to pay down the debt. Nothing else will put us on solid financial ground.

    If we don’t institute significant cuts to spending, we will become another Greece or Iceland. We can reduce the size of necessary and painful spending cuts if we increase our revenue. Because our history has clearly shown that in our society it is unreasonable to expect revenue greater than 20% of GDP. To increase revenue we must increase GDP. The problem is our current government laws, regulations, and taxes all go towards reducing GDP and making business harder to do in the USA. Unless your GE or one of the very few other “Fortune 100” companies who have the law makers in their pockets. What congress has done over the past few decades is kill incentives to increase the GDP. From Obamacare, Cap-n-Tax, and hundreds of thousands of pages of new regulations and tax code, the Federal government appears to be systematically trying to kill expansion of the US economy.

    The best way to look at it to consider a small business with 40 employees. At the end of the year this business earns for its owner about $200,000. Considering the assets invested, risk taken, and long hour a small business owner works (typical is 60/week) the earnings are modest. Our example business would like to expand because there is a market for more of its product than they currently produces. Any serious or reasonable expansion would put it over the magical 50 employee mark. Because of the additional work expanding the business would cause for the owner, the additional government mandates, and the increase in taxes, if the owner doubled the size of the business the owner would realize an significant increase in liability, responsibility and costs. These increases are not proportional to the benefits of expanding. The additional government burdens because of exceeding 50 employees are huge. A doubling of the size of the business it would only earn its owner about total of $225,000. The meager additional earnings (12.5%) for the small business owner compared to the significant increase (100%) in workload and costs, coupled with a huge increase in regulatory liability, don’t justify expansion. So rather than expand and hire more people the business, holds steady. Imagine turning down work because it would require expansion, and that expansion would put you over 50 people, so the increase in work would become unprofitable? That is what our government has done to our small businesses. Contrary to what the press would have you believe, small businesses are what generate expansion in our economy, and fuel expansion in big business.

    Now the problem, the old married couple we keep electing to run the country. The Democrats and Republicans, are not responsible, their entire goal is to maintain power for themselves. The are just like the example I started with explain our financial situation except, unlike couples living in the real world, they can tell the bank what to do. The Republicans newly elected based on promises to institute spending cuts, yada yada yada. They are no different than the Democrats, they promised fiscal responsibility, but when they had the power to force the government to become fiscally responsible they caved. The Republicans ignored their promises and look at the entire thing from how to maintain power not do what’s right, and admit it. In the national Review Online, on , April 9, 2011, Rich Lowry said, “I saw the whole confrontation through the prism of two major downside risks: 1) a shutdown that could go awry politically and badly hurt Republicans three months into their House majority; 2) a poisonous split in the caucus that would make it impossible for House Republicans to fight cohesively on the big items to come.”

    Latest polls show that 62% of the people don’t want the government to raise the debt limit. That was and is a major point of what the TEA Party wants and demands. The taxpayers of the USA do not want the government to go further into debt, they understand we have a spending and debt problem. The Democrats hold the people of the US in total contempt. Over the weekend Sen. Charles Schumer may have come up with the most comically derogatory metaphor for the people of the US. He considers the people less than fleas. The people elected a new batch of Republicans to control the US finances, Schumer said they are a “flea, wagging a tail, wagging a dog.” He seems to think the government not the people is the dog, and that the government not the people is in charge.

    The constitution makes the House in charge of taxing and revenue laws. The Senate cannot constitutionally initiate these laws; this is so that the law makers closest to the people, the House, are in charge. Constitutionally the government was instituted by the people for the purpose of protecting our rights. Chief Senate Democrat Schumer seems to think that Government, not the people is in charge. The wishes and desires of the people as expressed in our last election are just fleas( Majority of House), on the tail (Budget and Revenue Laws) wagging the Dog (Government).

    Almost 80 percent of Americans feel today that the country is on the wrong track. Last November, voters fired one quarter of the sitting Democrats and a good number of the Republicans in Congress in the name of change. What is clear is that both Democrats and Republicans hold the financial health of this country and the wishes of a super majority of the people (62%) in total contempt. They want you to remain ignorant, and their desire is to maintain and keep power. There is a method to force the government to become financially solvent. Stop borrowing, the current GOP majority in congress has that power. Simply refuse to vote to expand the national debt limit. That would be the dog, as in We the US Taxpayer, being in control.

    To quote Earl Pitts, “WAKE UP America!!”

    Thursday, April 7, 2011

    Truth - Liberals Don't Tolerate It.

    The actions, thoughts and ideas that Democrats have about Obama are like parents at their kids' first piano recital, regardless of how their child actually plays the parents are convinced it's great and will lie to everybody including the child about how wonderful the child did. Every time Obama speaks, liberals think they're listening to a combination of the Gettysburg Address and the Dr. Kings “I have a Dream” speech. Just look at their name-calling and ad hominem attacks every time anybody criticizes Obama, while never addressing the reason, logic, and substance of the criticism. Objective truth about Obama is tolerated by liberals the same way helicopter parents tolerate bad grades; they attack the truth teller.

    Obama called for an adult conversation about the budget and entitlements; Paul Ryan's release a budget for 2012 that addressed both in real substantive ways. Now that they have got their adult conversation, they can't handle it. Typically they are calling it and him, mean, radical, extreme, but have offered no alternative. Ryan's budget is well considered thought out carefully and restrained. It makes sure that no one who is vulnerable is hurt by the undeniably necessary changes proposed. This is a far more adult method of dealing with our problems than Obama's budget which is irresponsible and does not address any entitlement changes at all.

    I’d like some liberal to explain to me how reducing the budget to below 2008 levels, restoring it to pre-stimulus, pre-bailout spending, is extreme. Ryan’s budget would decrease Federal spending to below 20% of GDP, similar to the long-run, postwar, historical level, by 2015. That is the same level of federal spending that prevailed on average for 60 years since World War II. What part of the government spending as a portion of GDP roughly the same as it did from Truman to Clinton, is radical, irresponsible, and extreme? Leaders and the press that are saying so are unprofessionally irresponsible and misleading.

    If we adopt Ryan's budget we will see a reduction in the national debt by nearly $5 trillion relative to the President's budget in the first 10 years alone. This would result in the national debt being reduces as a percent of GDP every year, until the national debt is zero. In contrast O Obama's budget would double the national debt in his first term alone, and triple it by 2021. Which would you says is radical, irresponsible, and extreme?

    Some economists say that Ryan's budget if implemented would result in about 1 million private sector jobs created next year, a drop in the unemployment rate to 4% by 2015, and by the end of the decade, the economy would be creating 2.5 million jobs a year. We have seen the real results when Obama’s ideas are implemented, instead of not letting unemployment reach 8%, the news seems joyous when it’s dropped to 9%.

    The truth is that the liberals do not want an adult conversation about the budget, they are willing to turn the US into Greece, and destroy our way of life, and any objectivity about the money available to the budget from the taxpayer, and the spending by the government will not be tolerated. And they wonder why the Tea Party exists, why they have such low approval ratings. Governors, congressmen, and all sorts of politicians were elected based on promises to return this country to solvency, reduce the size of government, and gut government spending. The liberals are completely intolerant of these newly elected officials actually doing what they promised. The liberals are intolerant of these newcomers not “understanding” how government works. They really can’t tolerate liberty, and will use any means they can legal, illegal, immoral, and even unconstitutional, to keep power, and force their failed utopian socialist agenda on the people of this country.

    The government might get shut down (temporarily) in a couple days, I can’t think of a single person who pays more in taxes than he receives in government handouts that will be more than mildly affected. Email will still be delivered, Stores will be open, electricity will flow, my local police will catch criminals, my local schools will teach children, churches will marry couples, and hospitals will help the injured. The people crying and gnashing their teeth will be those who live off the taxpayer, and have their needs and wants met by the government rather than in fair trade with their fellow citizen. This truth will greatly upset liberals.