Via Instapundit:
On the Economy: What to do Now
It is clear to all, it is hoped, that the US and global economy is on the verge of collapse. While we might dodge the bullet this week, it is only a matter of a short time before all possible Big Government and fiat money expedients are exhausted, if they aren’t, already. We need bold, firm action – to do what needs to be done, endure the pain we’ll have to endure, and get on with the job of building American prosperity.
While there are no silver bullets, we can take some concrete steps which will ensure that the United States, at least, weathers the storm without too much pain. In light of the extreme danger, I suggest the following:
1. An immediate, across the board spending cut of $50 billion for the FY 2011 budget…that means what we’ll spend between now and October 1st. Every department, sparing only social security and military pay, gets cut in proportion as necessary to produce $50 billion in spending reduction.
2. For the FY 2012 budget, a reduction in spending – once again across the board and only sparing social security and military pay – of $500 billion.
3. An elimination of the corporate income tax on corporations employing 500 or less employees; a 50% reduction in the corporate income tax on corporations employing 501 to 1,000; a 25% reduction on all other corporations.
The cuts in spending are necessary to demonstrate to the world that even with the downgrade, the United States is deadly serious about reducing spending and thus restoring our bond rating in short order…in other words, to make certain that as the global economy goes “plop” that the United States is seen as a safe haven for money. And this feeds in to the tax reductions – the reductions in corporate taxes will not only spur domestic investment, it will also massively encourage the inflow of foreign capital as well as capital held by US corporations overseas. This could amount to trillions more dollars being injected in to our economy over the next 12 months, thus spurring the growth necessary to repair the damage already done, and that which is about to happen.
Because make no mistake about it: there is no easy way out. We are going to go through hard time. How hard depends on us – hope for more money printing and government spending and the reward may be a couple more quarters of “growth” but then a collapse which will make the Great Depression look like a picnic. Or we can take the adult course and realize that the free ride is over…that we will have to have a bit less nanny State and a bit more hard work on our part.
The choice is ours. We can do this, now; or we can flub it, and pay the price.
UPDATE: Asian stocks continue to slide. I’m less and less certain that anyone will be able to figure out how to dodge the bullet, even for a little while…but, we shall see.
UPDATE II: From Mish:
…being the ever-optimist, I prefer to look at the bright side of things. Get your party hats ready. Another DOW 10,000 party may be on the way…
If the only thing you can do is weep, then you might as well laugh…God is still there, and all will be well.
UDPATE III: From Instapundit:
PRESIDENT DOWNGRADE: Dow Finishes Down 634 Points. Obama’s speech certainly did nothing to slow the drop, though I suppose the White House will argue that it would have been 734 without the speech, meaning that Obama saved or created 100 Dow points . . . .
A friend of mine did note it rather amusing to watch the Dow drop 100 points while the Bamster was speaking…
Yet Another Incursion By the Mexican Military
From the Houston Chronicle:
A Mexican military helicopter landed Saturday afternoon at Laredo International Airport by mistake, said a spokeswoman for U.S. Customs and Border Protection.
Mucia Dovalina, the uniform public affairs officer for the Laredo Port of Entry, said the helicopter landed about 3 p.m., but she couldn’t share details such as the number of occupants or whether they were armed.
Dovalina said that, following protocol, CBP officers checked out the helicopter’s occupants, then allowed them to return to Mexico in the aircraft.
“The only thing that I can tell you is that they did land here,” she said. “It was by mistake. They were processed and they were returned to Mexico.”…
We seem to be getting a lot of mistakes by the Mexican military…seems the poor guys can’t tell north from south and often find themselves on our side of the border. The airport, itself, is two or three miles north of the Mexican border…which is, of course, the Rio Grande river..one does wonder how the pilot missed that in the old landmarks? Not like the river moves around a lot…unless this was the pilot’s first flight – and he didn’t have a compass – I’m mighty suspicious of this “mistake”.
My concern is that these incursions of the Mexican military are actually to assist the criminal element in Mexico – basically challenging our forces to stay out of the way so that the drug cartels can gain de-facto control of the ground. The next time a Mexican military force crosses, we should hold the men and the materials until we’ve had a chance to thoroughly investigate the matter…and we should insist upon compensation from the Mexican government for the violation of our national sovereignty (yes, we do have that…just like all other nations, we really do have a right to keep foreign military forces out of our nation).
Enough is enough, already…time to let the Mexicans know there is a border, and they can’t cross it without our permission.
Defending the TEA Party
From NRO’s The Corner:
Sen. John McCain defended the Tea Party against Sen. John Kerry’s “tea party downgrade” remark on Meet the Press this morning.
“We could have reached an agreement a lot earlier, but the members of the House of Representatives had a mandate last November, and it was jobs and the economy and it was spending. And for them to then agree to tax increases and spending increases was obviously a repudiation of the mandate they felt they had from last November,” McCain said.
He said that much of the “dysfunction” in the current political system could be attributed to “the failure of the president of the United States to lead.”…
Some times John McCain can be infuriating, other times he’s just so right. And gutsy – right now, the MSM/DNC drumbeat is that the TEA Party caused the problem. Here is a chance for “moderate” GOPers to flee and mumble their agreement. Not for John McCain – he just told it like it is: the TEA Party is about cutting government spending. To have agreed to tax hikes in lieu of serious spending cuts (and what we got in the deal was no where near “serious” enough to warrant signing off on revenue increases) would have been a rank betrayal.
To be sure, Democrats are all about that – in fact, over the past 40 years Democrats have mostly managed to advance their cause by gift of GOPers betraying principle and go along with whatever liberal flapdoodle is the fashion of the moment. Remember Arlen Specter – that was the sort of “Republican” who was forever cutting the GOP off at the knees. And that is precisely the sort of Republican the TEA Party people will not be.
Ultimately, we may have to obtain higher revenues in order to get out of this mess – but the fact of the matter is that Democrats will just lie about the spending cuts and greedily spend any increased revenue on their special interests. In a very real sense, the Democrat leadership in the United States doesn’t care about the United States. If they did, they would have proposed a real cut in next year’s spending – even if it were a symbolic cut of 10 or 20 billion. I mean, of course, real cuts – not reductions in the rate of growth, but an actual spending of less money next year than we did this year. Until Democrats show a real change of heart – show that they care more about America than they do about their own power and wealth – then we simply cannot go along with them…and thus the TEA Party standing firm against any tax hikes was an act of sublime patriotism. It took away from those who are destroying the United States part of their ability to keep doing it.
McCain sees it; I see it, too. Eventually, the whole country will see it – and I do believe that this growing understanding of what is really happening will destroy liberalism in 2012.
UPDATE: In Canada, Saskatchewan gets a “TEA Party upgrade” to it’s bond rating:
…Rather than quickly spending its newly-earned wealth, the provincial government has put its tax revenue toward paying the bills. S&P gave special credit to Saskatchewan for its “low-and-declining debt burden.” As of March 31, the province’s fiscal year-end, Saskatchewan’s debt totalled $4.6-billion, representing 38 per cent of this year’s projected operating revenues and only 8 per cent of its gross domestic product. Canada’s federal debt-to-GDP ratio sits at around 35 per cent…
Rational tax and regulatory policies, a pro-business environment, fiscal responsibility which puts a premium on living within means and paying debt. This isn’t rocket science, people…
Gold Goes to $1,700 an Ounce
The signal of absolute no confidence in the fiat money, usury-based economy…from Reuters:
Gold vaulted above $1,700 an ounce for the first time on Monday, after the respective pledges by the G7 and the European Central Bank to quell the turbulence in the financial markets did nothing to put investors at ease…
Of course it didn’t, because the ECB if bankrupt, all its money already having gone to shore up Greece and Portugal and there not being enough money in Europe to bail out Spain and Italy.
Going to be an interesting day – in the “Chinese curse” sense of the word.
Municipal Bonds on the Chopping Block?
From Zero Hedge:
While the impact on Treasuries as a result of the downgrade may be limited (after all the other side of the Atlantic is about as ugly as the US, so where could $8 trillion in marketable USTs practically go… at least for now), the same may not be said about the far smaller, $2.9 trillion municipal market, which is about to see a blanket downgrade tomorrow as S&P warned on Friday night, and of which Matt Fabian of Municipal Market Advisors earlier said that “There will be hundreds and hundreds of municipal downgrades, which will not do well to bolster investor confidence.” The scary bit: “Treasuries may be able to shake off a real impact from the downgrade. Munis I’m less sure about…
This could be devastating to the already stressed budgets of municipalities – many of them, burdened under bloated pension budgets and other foolhardy spending, are just an ace away from bankruptcy, as it is. Put a bit more pressure on them and a lot could fail. And even if they manage to scrape through, this will mean less money for police, fire and schools…and likely further rounds of government worker layoffs (which, in a macro sense, aren’t bad, but are plain and simple lousy for the people losing their jobs).
Learn the lesson – debt is poison. No government should ever carry any of it – certainly not for anything less important than fighting a World War. To mortgage the future under the best of circumstances is foolish..to mortgage it in order to keep up a bloated, wasteful government entity is criminal. The change must come, and we might as well get over the worst of it right away…slash budgets until no more bonds need to be sold, and then rebuild from there.
Did You Ever See a Stock Market Crash?
The Tel Aviv market gives a good indication of what it looks like – and here’s the really bad news: Israel’s economy is healthy.
Of course, by the time the markets open tomorrow Bernanke and the boys might have figured out some way to finesse around the downgrade and the spreading crisis in the Eurozone. I honestly don’t know what will happen tomorrow – but things are looking really dicey both in the short and long term.
We’ve got one heck of a mess and it won’t be easy to get out of…and we need a government which recognizes the mess (no more happy talk about how things are moving in the right direction when they’re not) and has the guts to do what is right. We need to massively reduce spending, reform taxes and entitlements and free up the wealth-creating capacity of the American economy. This will infuriate all those special interests who are still living off the carcass of Big Government, but it has to be done.
Out and About on a Sunday Morning
Poll: 71% support five year ban on ex-Congresscritters lobbying. I say, make it 10.
Mark Steyn has penned another of his doom-and-gloom articles about the United States. I’d like to say he’s wrong, but that would be a lie…if we don’t get our debt under control, we’ll suffer a gigantic collapse, and in just a few years (my guesstimate is in 2015). The bottom line is that we’d better elect someone in 2012 who will see to it that in 2014 we spend less money than in 2012…and I don’t mean “lower rate of growth” in spending, but an actual reduction. $500 billion would be best, but even if its a mere dollar, it is a start.
Vogue dresses a 10 year old girl like a harlot and we’re actually having a debate about whether this should be. A healthy society would flog the photographer and the magazine editor and move on (did you just say, “flog”, Mark? Yes, I did. And I mean it – tie them to a post and lay 20 stripes with a bullwhip across their backs…it would carefully instruct them and provide a good lesson to all and sundry). Add this to that small – but rapidly growing – list of things I’ll keep saying until everyone agrees with me, because I’m right: we’re poisoning ourselves. The filth we allow to flow in to our civilization is killing us. We can easily call a halt…if we just have the courage to do it.
Over at Breitbart TV, a businesswoman carefully explains what is wrong with Obamunism.
Result of the culture of death – the world is short 163 million women. Really great that we’ve “protected a woman’s right to choose”, huh? I mean, we’re certain that birth control and abortion aren’t being used by men to determine what sort of children will be born, right?
Downgrade: Obama will catch the flack.
Understanding the President
Joseph Rago of the Wall Street Journal talks things over with House Majority Leader Cantor, and comes out with this:
Like Mr. Cantor, President Obama is also a man of deep and strong convictions, and perhaps that’s why they seem to dislike each other so much. Call it, to adapt Freud, the narcissism of big differences. Mr. Cantor cautions that he isn’t a “psychoanalyst”—before politics, he was a real-estate lawyer and small businessman—but he says, “It’s almost as if someone cannot have another opinion that is different from his. He becomes visibly agitated. . . . He does not like to be challenged on policy grounds.”
In a meeting with the Journal’s editorial board Wednesday, Mr. Cantor, 48, gives his side of one of his more infamous altercations with the president. In a mid-July Cabinet Room meeting, Mr. Cantor made a suggestion that Mr. Obama and other Democrats took as impertinent. “How dare I,” Mr. Cantor recalls of the liberal sentiment in the room. He was sitting between Nancy Pelosi and Steny Hoyer, “and they were in absolute agreement that [the president] was such a saint for having endured all this.”
“No president has sat here like I have, in these kinds of meetings, with congressional leaders, in this detail,” Mr. Obama said in Mr. Cantor’s recollection, which Democrats dispute. Mr. Cantor says the president also invoked Ronald Reagan “to be a little patronizing of us, because he assumed that anything Reagan did we like.” Mr. Obama then told Mr. Cantor, “Eric, don’t call my bluff,” and walked out…
Maybe this is why Obama has a desire to appoint Czars…it was Czar Nicholas I who stated, at the start of his reign, “I cannot permit that someone should disagree with my views, once he knows what they are”. Might be that my little joke about His Majesty, Barry I actually hits close to home. President Obama might be one of those sad political specimens who are driven bonkers by contradiction. Equally telling, if Cantor has it completely right, is the servility of Pelosi and Hoyer…The One was defied by a Republican, and that was offensive…where does that little worm get off talking like that to Dear Leader? I wonder if Obama still has the Democrat Congressional leadership enthralled like that? Is the mere fact that he is black something which will continue to blind them to the facts? To put it differently, is the election of a black man so important, to liberals, that the results will be resolutely ignored?
I guess we’ll find out as the next year unfolds. But if Cantor has read Obama correctly – and other evidence out there indicates he’s at least in the ball park – then Obama will just rigidly adhere to his view and keep bulling ahead, regardless of what happens. This works out bad for America, because the President should be a man with the courage to admit he has been wrong and then change course. On the other hand, it works out great for conservatism because it means Obama will just keep driving liberalism over the cliff.
It is a pity that our final wake up from liberalism should have to come like this, but it also might have been inevitable. So seductive is the idea that you can have it all for nothing that once you fall for liberalism, it would take a complete catastrophe to get you cured of it. The catastrophe is coming (though the very worst won’t get here until 2015…and not then if we toss Obama in 2012)…but that means the liberation is, too.
Huckabee: Replace Geithner with Trump
From CNN:
Amid calls by the GOP for Treasury Secretary Timothy Geithner’s resignation, one Republican is offering an unorthodox choice for a potential replacement.
“Ask Donald Trump to be Treasury secretary,” Mike Huckabee said on Fox News Channel.
The former Arkansas governor elaborated: “Have Donald Trump take the job for 90 days. It’s a game changer.”…
Trump certainly wouldn’t be worse than Geithner and may end up a lot better. Certainly, unless Obama really changes course at this point we’re heading for a really bad time. Even a major course change won’t completely get us out of the soup…but swift action, now, can prevent “bad” from becoming “hideous”. If not Trump, then someone who has a bit of guts and a bit of knowledge of business.
But I doubt we’ll see it – Obama may call in Underbus to rid himself of a political liability, but I doubt Obama even sees the need for a real change, let alone what that change might entail.
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