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Today is OCTOBER 23, 2008
Last season's entertainment offerings from Channel Obama (Health Care Reform, Cap'n Trade, and Card Check) are wrapping up to mixed reviews and a decidedly tepid audience response.
Card Check never even got into production.
The Evil Cap'n Trade was, pardon the pun, anticlimatically derailed by an unidentified Secret Agent in an episode called Climategate just before the scheduled showdown in Copenhagen, spoiling the planned triumphant outcome.
Health Care Reform, while not yet over, took a weird twist in which the proponents, much to the dismay of its intense fan base, stripped out the maniacal Public Option, inserting a surreal provision requiring citizens to buy health insurance under threat of incurring huge fines or imprisonment. And called it "universal health coverage," weirding out everyone except the health insurance providers, who were, to say the least, thrilled at having 30 million new customers marched in at gunpoint. Viewers tuned out in droves.
But "¦ never fear, they were only warming up for The Big One.
Channel Obama's political producers have set the stage for their most thrilling prime time soap opera yet! No spoiler alert, so read on.
Notwithstanding their faltering major efforts to drive up America's cost structure, enough was done courtesy of the Bailouts, as well as Congress's insatiable spending practices, to tee up next year's prime time offerings.
Thanks in major part to a critical assist from series sponsor, The Federal Reserve Board, the Administration was able to borrow a plenitude of "Uncle Ben's Converted Dollars" (Hello Peso! I, the Dollar, will be meeting you in Tijuana soon for some really sleazy good times!) at a zero percent teaser interest rate.
The government now is on the hook for an enormous credit card balance at an interest rate, as this writer has recently pointed out elsewhere that is about to start rising "¦ dramatically.
How dramatically? Well, according to the New York Times, the interest component of the federal government is projected, by the White House no less, to rise from around $200 billion a year to "¦ $700 billion a year! Not to put too fine a point on it, but "¦ that effectively will crowd out all federal spending except for entitlements, such as social security and medicare, and the defense budget.
Meaning: something's got to give. Meaning: there is effectively no way to cut spending dramatically enough to cut our way out of this.
So, the series producers, have tied Little Nell (that would be Us!) to the railroad tracks. They have, off camera of course, started this runaway interest payments locomotive barreling down directly at our Helpless Heroine (remember, that's Us!).
Nancy Pelosi is saddling up her trusty steed, named VAT, getting ready to ride to our rescue. A VAT, or Value Added Tax, is a sales tax that is buried in the price structure of the goods and services "” food, clothing, shelter, movie tickets "” and doesn't show up at the cash register. Although we pay every penny of it as higher costs, technically it's not a tax on individuals, preserving the president's promise not to raise taxes on anyone who makes less than $250,000 a year! Wowza, diabolically brilliant!
How much will the VAT raise the cost of our food, clothing, shelter, movie tickets, and everything else? Oh, well, just"¦ 25% or so. Equivalent to a 25% pay cut and cut in the value of our savings! Now that, of course, would cause a violent voter reaction; nor is the Congress's credit card interest bill scheduled to triple (ok, more) overnight, but "¦ over ten years.
So"¦ the Pelosi Solution has been scripted to be introduced just a little at a time. 2%, maybe 3%, in the beginning, as an "emergency measure" and "temporarily." While the politicians get costs (which, of course, are on a fast track upward) under control, you understand.
Winkie winkie, as award-winning journalist Mark Tapscott might put it.
The most wonderfully engaging, even cunning, aspect of this script is that it will be presented by the Democrats as a fiscally responsible, "conservative" solution, a necessity really, shrewdly designed to split the Republican ranks. Back before the late Jack Kemp and Ronald Reagan, Republicans willingly assumed the role of what we Supply Siders called "tax collector for the welfare state."
The producers at the Obama Channel are counting on it that the GOP will willingly resume that role, consigning itself to permanent minority status, with the Liberals giving away the goodies and the Conservatives presenting the duebill.
Will we?
Therein lies the Drama.
Clearly, the GOP cannot stand idly by while the locomotive decapitates Little Nell (Us!)! Neither any level of economic growth that could be elicited by tax cuts, nor the savings from spending cuts, will be sufficient to stop the spending locomotive in, as it were, its tracks.
Those who are enthusiastically working to Europeanize America (Hello Gucci shoes, Armani suits, Fellini movies, film festivals, topless beaches! Hey, the life of Eurotrash is not all bad, they do have style over there!) "” which is founded on the VAT that is ubiquitous in Europe"” have set this up perfectly. This writer stands in awe.
If checkmating the Republicans into supporting a VAT is all that there were, however, next season would be destined to be a major yawnfest, drama-wise. Casting Republicans as Scrooge? How dog bites man!
Luckily for us viewers: there is one wild card in the deck.
The GOP, rather than defaulting to its preferred "Party of No" stock character, or its legacy as "Tax Collector for the Welfare State" role has a much more interesting Supply Side option open to it.
Someone credible can play the gold card.
No, the gold card does not refer to some fancy AmEx plastic. It refers to the gold standard. Back in the pre-Internet days of wooden sailing ships and ox carts (1981, to be specific) this writer was summoned by the Reagan Treasury Department to testify before its Gold Commission on the constitutional history of American monetary policy.
This is an esoteric subject in which he was then (and still may be) considered one of the two existing experts. Of course, the commission voted against gold. A few copies of The Gold Commission's minority report, by commissioners Lewis E. Lehrman and Rep. Ron Paul, The Case for Gold may still be kicking around for purchase.
In the course of completing the research for the testimony this writer tripped across some astounding facts.
Under the gold standard, not only was inflation effectively nonexistent but that home mortgages could be had for around 3% and, directly pertinent here, the federal government (as well as the best blue chip companies) could finance long term debt for around 1%.
Moreover the mechanism of gold convertibility actually, it turns out, is a practical one, nothing antiquated or esoteric about it. It has been reinstalled in numerous countries over the years to what was then hailed as miraculous effect. Turns out, done right it proves tonic for the people, and, what really counts in the minds of elected officials"¦ salvation for elected officials.
So, it's a compelling conservative counterproposal to a VAT and by all appearances "¦ the only one.
There is an almost theological aversion to gold by the political elites"”heck, gold, though promoting robust economic growth, gently but firmly constrains our ability to spend beyond our means! Integrity? Bummer, dude, where's the fun in that? And yet, when they become desperate enough, it is not impossible for them to reach for something with integrity"¦.
The elites have worked darn hard, and with great success, to wiggle out of that provision in the United States constitution that charges Congress with the responsibility to "coin Money [and] regulate the Value thereof " (together with fixing the Standard of Weights and Measures). Article 1 Section 8. (You could look it up.)
Botheration, how tedious. So much nicer to kick that over to some faceless bureaucrats. Alas, it has been kicked over to the Feckless Fed rather than the sober-sided weights and measures guys over at the National Institute of Standards and Technology. NIST is, this is not made up, in charge of keeping the inch exactly one inch long, the ounce exactly one ounce in weight, and the minute precisely sixty seconds long.
NIST has proved marvelously proficient at this. Through classical gold convertibility, NIST certainly would prove equally proficient at keeping the dollar worth exactly"¦ a dollar! So Congressmen, take heart! You can redirect this over to a better class of faceless bureaucrats! No heavy lifting!
There is a slightly startling degree of popular support for the gold standard. Many rank and file citizens apparently, go figure, find some uncanny appeal to the idea of being able to refinance their mortgages at 3% in a reliably inflation-free environment. Small businessmen would like to finance their receivables at 2%. That sort of thing.
Pesky citizenry, yeah. Nothing an elected official would wish to concern herself with, right?
Still, would create a lot of jobs. Hmmmm. Get the populace off your back?
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