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John Adams Blog

The blog of The Antient and Honourable John Adams Society, Minnesota's Conservative Debating Society www.johnadamssociety.org

Wednesday, March 26, 2008

Time to Listen to Ron Paul?

Yes, says Elizabeth MacDonald, Fox Business blogger in today's entry.

Time to listen to Texas Congressman Ron Paul, the lone voice of reason in Congress today who’s got to feel like he’s shouting into a field of cotton with his repeated warnings about the dangers of a collapsing dollar, while the administration goes AWOL on the problem.

The dollar just hit a record intraday low against the euro on reports that consumer confidence levels have dropped to levels not seen since the post-Watergate era. It is down 7% year to date against the Chinese renminbi, it’s weaker than the Japanese yen and the Canadian loonie.

Maybe the rest of you aren't reading the same economic news that I am. Because Festivus will say that the Federal Reserve is just a conspiracy theory and that we're really spending Confidence-backed Audacity Notes (hoping for change). And Harsh will say this is just a cyclical downturn, an extended correction, not a recession, and certainly not what we used to call an inflationary depression.

Back to quoting Elizabeth quoting Ron Paul:

Congressman Paul rightfully warns us when he says the US government has “systematically undermined” the US dollar by expanding “the money supply at will for financing war or manipulating the economy with little resistance from Congress–while benefiting the special interests that influence government.”

In a room full of economists, I'm not one. But even this blonde can fathom that while you might get away with limitless spending in a short term, the credit card bill is going to come, and one day we'll be over our limit.

We are currently $53 trillion in debt, $400,000 per household, and it will cost $2-3 trillion more every year we fail to take action.

David Walker, USA Comptroller General before he suddenly resigned this month, has been beating this drum for a few years now, the situation becoming more dire as big spenders on both sides of the aisle continue to ignore him. According to Walker, "I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility."

(If you really want to get depressed, watch David Walker's interview with Glenn Beck.)

As Elizabeth (quoting Ron Paul) says, “Empires fail because they run out of money, or more accurately, run out of the ability to spend or inflate,” Congressman Paul warns. “We need to control spending, immediately, before it is too late.”

The dollar hitting another record low against the Euro yesterday was surely unrelated to the Fed printing new money to cover Bear Sterns loans and more new money to pay 1.2 million government employees in Iraq, right?

Eh, forget it. There are some scrap gold auctions closing on eBay, and I must bid.

Before I run off, it's not too late. You can still vote for Ron Paul, at least indirectly. We have a serious economic situation here, and he's the only presidential candidate insisting that we slash the budget and willing to say Bernanke's not wearing clothes. Bad image. You know what I mean.

03.27.08 UPDATE: U.S. Treasury Secretary Henry Paulson says, "Without change, rising costs [of Social Security and Medicare obligations] will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America's future prosperity."

Glenn Beck (column yesterday) adds,

Translation: Every single tax dollar that is sent to Washington will be used to pay for just these two programs.

That means no money is left for anything else. Nothing. No Department of Defense or Homeland Security, no Department of Energy, no Department of Justice, no Environmental Protection Agency . . .

Hurray! We might be able to get rid of garbage bureaucracies even without Ron Paul!

Blogger Scribbler de Stebbing said...

And more. I'm not looking for this stuff; it's everywhere.

Today, Yahoo Finance Market Watch

9 Reasons Your Taxes Are Going Up

No matter who's elected president, the debt party's over

Well, folks, the party's over. Campaign rhetoric won't hide America's excesses, denial, incompetence and arrogance much longer. No matter who's elected, taxes will increase to cover massive debts.

Yes, our five-year war was totally financed by borrowing. But unfortunately, "deficit spending gives the illusion that the laws of economics can be repealed. They cannot. Americans will have to pay for the war at some point -- and when they do, they will be paying not the Bush markdown but the full price," the authors say.

11:37 AM, March 27, 2008  
Blogger Harsh Pencil said...


Where are on God's green earth did you get this? "We are currently $53 trillion in debt, $400,000 per household, and it will cost $2-3 trillion more every year we fail to take action."

Huh? Total US government debt is $9.5 trillion, or about $31,000 per person. About half of that is held by the Federal Government itself in the form of the Social Security Trust Fund. IOU's to yourself aren't debt and so don't count. Nearly another trillion is held by the Federal Reserve. This is because the Fed gets money into the economy by buying Treasury securities. So unless you think they are going to shrink the money supply (by selling their Treasuries) these don't count either. So the Federal debt is really closer to $4 trillion, so were looking at maybe $15,000 per person.

That doesn't count as Federal debt implicit "obligations" to future Social Security recipients. But no estimate of these comes even close to the numbers you are talking about. (And any calculation of this would also have to take into account that we have "obligations" to the government as well, such as paying taxes on the money in our 401k's and IRA's when we withdraw).

So everyone is entitled to their own opinions, but not their own facts. Does your number include mortgage debt? All private debt?

If so, I can't see how this is relevant. If I owe you $100,000, then I can see how you may think I'm in financial trouble, but I don't see how you can think WE (you and me together) are in financial trouble. Between the two of us, our total net worth is the same regardless of how much I owe you.

3:33 PM, March 28, 2008  
Blogger Scribbler de Stebbing said...

Google "$53 trillion obligations" and you'll come up with about 52,000 results.

Our obligations are debt. My mortgage payment, which doesn't have to be paid all at once, is an obligation and a debt. Medicare and Social Security ARE obligations. We owe that money.

You use the words "Social Security Trust Fund." LOL. You always were such a joker!

7:52 PM, March 28, 2008  
Blogger Harsh Pencil said...


My point of the SS fund holding Treasuries was precisely that this didn't count. It was one arm of the govt owing the other.

So I googled your $53 trillion. That is one estimate of SS and Medicare "obligations" plus the current debt. These are an estimate of the present value of the cost of providing these benefits IF NO CHANGES ARE MADE TO THE PROGRAMS. But these obligations have been reduced in the past. (Taxing SS benefits is exactly the same as reducing the amount of untaxed benefits, and we did this in the 80's.) More fundamentally, these debt numbers are essentially meaningless in determining the fiscal health of the country.

That is, suppose the government simply announced tomorrow "guess what everyone. Social Security and Medicare are now abolished. No more Social Security taxes and no more Medicare taxes and no more payments to old people." Are we as a society any richer? Are we any poorer? Answer: Some of us are richer (the young), some are poorer (the old) but as a whole, we are even.

But how can that be when we now have $53 trillion less in obligations? It's because, after the change, we also have $53 trillion less in assets.

If you want to worry about the fact that the country is aging, go right ahead. That's a real worry and incompatible with everyone retiring earlier. But that has nothing to do with made up accounting numbers like $53 trillion.

10:15 PM, March 28, 2008  
Blogger Jameson said...

"Medicare and Social Security ARE obligations. We owe that money."

Legally Social Security and Medicare benefits in the future are political promises made by politicians. They are not money that the United State Government owes, unlike Treasury Securities.
Practically, Social Security and Medicare benefits are reduced or raised depending on the shifting political winds. The Social Security retirement age used to be 65, is 67 under current law for me, and will probably be a higher number in the future.

"But how can that be when we now have $53 trillion less in obligations? It's because, after the change, we also have $53 trillion less in assets."

The tragedy of Social Security and Medicare is that delivering trillions of dollars of benefits will cost our economy far more than the dollar amount of benefits paid. The FICA taxes discourage labor supply by placing an extra 15.3% tax wedge for most wage-earners on top of state and federal income taxes. This encourages employers and employees to inefficiently provide compensation in non-taxable forms. It encourages clever attorneys, like John Edwards, to use real resources to transform labor income into non-labor income for tax purposes to avoid the Medicare portion on FICA. FICA taxes discourage investments in education by greatly reducing the returns to education investment for most Americans.

If you want to you one estimate of the discounted present value of SS and Medicare promises as $43 trillion, that the real cost of providing that is probably a present value of roughly $68 trillion. That is computed by using the Browning and Browning Public Finance textbook estimates that the marginal cost of a dollar raised by income tax is about $1.58.

So ending all Social Security and Medicare promises and taxes might result in a efficiency gain of a little less than two years GDP ($25 trillion).
This is a really rough estimate, but I think I did get the order of magnitude right.

So if we reduce $43 trillion in the present value of federal transfers, we may save $68 trillion.

Why doesn't some conservative make estimates of the excess burden and compliance costs taxes part of the revenue forecasting process in D.C?

For a nice discussion of the bad effects of taxes read Marty Feldstein:

More is available on taxes and Social Security here: http://www.nber.org/feldstein/

12:03 AM, March 29, 2008  

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Monday, March 24, 2008

Difficult Questions Posed At John Adams Society Debate

Last week, at the John Adams debate caucus, several critical questions were asked of neopopulist speakers. These questions were asked in a time where the people hold Congress and the President at historically low levels. Here is a recitation of those questions and written responses.

Question 1: What evidence would it require for a neopopulist speaker to admit that the speaker does not speak for the people?
None. Neopopulist speakers are committed, in the first instance, to speaking for the interests of the people.
This wonderful question is targeted, like an arrow aimed for the bullseye, on a critical, irresolvable political paradox for neopopulists.
How do neopopulists impose their political will through government on the people while still loving the same people? Neopopulists begin with this paradox and admit it is irresolvable. However, admitting this irresolvable paradox is the start, not the end of the debate.
In addressing this paradox, neopopulists admit they do not speak as moral agents for the people. Put another way, neopopulists do not speak as substitutes for the people's voice.
Rather, neopopulists, out of love for the people, speak for the interests of the people. This is the the way in which neopopulists assert their legitimacy, their political will and their love of the people -- all at one time.
The right-wing and left-wing critics of neopopulism will assert that the neopopulist position then can be reduced to its own ideology -- no different in type than their own ideologies. The criticism would reduce neopopulism to individual neopopulists autonomously asserting political will by its own ideology or set of ideologies.
There are many neopopulist responses to this criticism.
First, the critics' assertion that neopopulists operate autonomously, politically and ideologically is not in itself an answer to the irresolvable paradox of imposing political will on your neighbor while still loving your neighbor. Conservative and liberal ideologues ignore this political paradox by operating on an ideological level -- combatants on a political zero-sum battleground. Neopopulists view that political zero-sum battleground as an unnecessary elitist exercise of power. Neopopulists assert their political will differently. Neopopulists view the real battle as ensuring our modern bureaucratic state -- including all the branches of government -- serves the people and respects the dignity of the people.
Second, neopopulists ask the question back to the critics, "Who do you speak for -- the people or God?" Neopopulists out of humility choose to speak for the people rather than God. After all, neopopulists do not assert autonomy outside of the context of neighbor and do not propose universal, systematic principles to explain how humanity and the social order should work. Conservative and liberal ideologues, on the other hand, act as God when they assert autonomy separate and apart from the context of neighbor and propose universal, systematic principles to explain how humanity and the social order should work.
Now, to be fair, neopopulists would agree that there should be an all-inclusive democratic deliberation among the people on the principles to explain how humanity and the social order should work. Neopopulists assert their political will to have this discussion -- separate and apart from the God-talk of the conservative and liberal ideologues. The conservative and liberal ideologues want to turn the people's discussion about the social order into a zero-sum political game because of their ideological and partisan reductionism. Neopopulists disagree.
Third, neopopulists do have a substantive political program addressing democratic deficits in the existing modern regulatory state. For example, neopopulists support: more directly-elected executive officials in the federal and state government; direct election of federal and state judges; more aggressive legislative and judicial oversight of administrative agencies; less delegation of law-making authority to administrative agencies; aggressive facilitation and representation of citizens vis-a-vis federal and state authorities in criminal and civil proceedings to actually effect the rule of law.
As to foreign governments, neopopulists are also skeptical of the European Union being a stepping stone to a federated Europe because of its democratic deficits including the legislative power primarily being left in the hands of the Commission -- 25,000 experts working in Brussels. Neopopulists see the American federal government trending towards the model of the EU expert-laden legislative process -- increasing democratic deficits not minimizing them.
In response to neopopulists identifying democratic deficits, conservative and liberal ideologues have little interesting to say. The ideologues and their political game have become so predictable and dull that not only the newspapers but even the politicians are beginning to become bored of it.
Fourth, neopopulists appreciate the paradoxes involved in the question of the elusive "I." Politically, the neopopulists choose to define the elusive "I" in the context of neighbor -- thus diminishing autonomy of the political actor. Conservative and liberal ideologues have chosen to maximize autonomy of the political actor -- God-talk -- at the expense of the love-neighbor limitiation.
Neopopulists believe that diminishing the autonomy of the political actor by the love-neighbor limitation will result in more people-oriented results. Conservatives may object because tradition - the democracy of the dead -- is a sufficient limitation of the politician's autonomy. Similarly, liberals may object because current constitutional and institutional limits themselves serve to limit the politician's autonomy.
Neopopulists don't necessarily disagree with these objections, they just go futher with the love-neighbor limitation which politically, philosophically and morally limits the politician's autonomy to... nothing?
No, not quite, neopopulists recognize the above-explained irresolvable paradox. If the politician's automony was reduced to self-abnegation, how could the politician enforce his will against another? That is why it is an irresolvable paradox.
Fifth, on the more humorous side, a colleague of mine who agreed with neopopulist principles as to love of neighbor claimed to be too humble to call himself a neopopulist. Neopopulists like this type of person but they make lousy politicians.

Question 2: Which is more manly -- ideological politics or neopopulist politics?
Neopopulists believe that the love-neighbor limitation is more manly than the ideologue's illusion of self-autonomy. Manliness requires authenticity. The ideologue's self-autonomy contradicts experience, coherence and transcendental truths.
First, experience show that people are dependent on each other. Self-autonomy contradicts this shared experience. The love-neighbor limitation is consistent with this experience.
Second, coherence requires intelligible consistency. If we are all self-autonomous ideologues, what need is there for community? Neopopulists, in the first instance, acknowledge community.
Third, the ideologue's automony violates the transcendental truth that man is not God and each man is not his own God. The ideologue's proposal of universal truths explaining the Universe is God-talk. Neopopulists acknowledge they are not gods.

Question 3: Do neopopulist narratives appeal to emotions?
No. Neopopulist narratives are circumscribed to citizen efforts to counteract government violations of the rule of law. Neopopulist narratives are hard-headed and document when the government acts in mediocre, mendacious and/or self-contradictory ways.

Blogger Scribbler de Stebbing said...

Where do Neopops stand on a federal spending debt bubble that's about to burst, rendering the dollar, in which the common man saves, worthless as a 1990's ruble?

1:45 PM, March 27, 2008  

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Tuesday, March 18, 2008

Wed, March 19, University Club:
Resolved: Don't Vote; You'll Only Encourage Them

The John Adams Society

Marianne Stebbins David Schilling G. Larry Colson Mark Sanquist
Chairman Secretary Chief Whip Chancellor

March 2008

“Our principles were high, and very definite. We were not a party; we had no candidates; we had no axes to grind. Our vote laid upon the man we cast it for no obligation of any kind. By our rule we could not ask for office; we could not accept office. When voting, it was our duty to vote for the best man, regardless of his party name. We had no other creed. Vote for the best man--that was creed enough.”
Mark Twain

VOTING, THAT SACRED RIGHT, is the method by which We The People give legitimacy to our government. In exchange for the opportunity to vote for the candidate of their choice, the citizenry agrees to allow itself to be governed by those elected. Typically, these elections result in a slight reshuffling of the political landscape – one party gaining in its ranks another losing. However, sometimes the results are quite lopsided. The mid-term federal elections of 2006 illustrate how elected officials respond to a perceived ‘mandate’ from the voters. The Democratic leadership, newly armed with a majority in both the House and Senate, set out to push through legislation to support their party platform and deliver on campaign promises… as they should. That is the way the system works; the winners call the shots. And for the voters who supported them, there is much celebrating.

However, for Conservatives, there has not been much to celebrate. Over the last 20 years, with ‘hold-your-nose-and-pull-the-lever’ support from this group, the Republican Party has churned out, elected, and reelected, candidates that stray ever and ever further from the party platform and the principles of its conservative base. Judging from such recent events as the McCain nomination, the floating of Pawlenty for VP, and the begging by the party for Ramstad to run again, it appears there’s no change in that course. Just as the ‘mandate’ empowered the Democrats to run rampant with their agenda, the Republicans, or for that matter, any other party that deviates from its slated purpose, needs to lose, and lose big. It’s time for conservatives to thumb their nose and not pull the lever.

ON THE OTHER HAND, as the saying goes, “Why cut off your nose to spite your face?” Surely, there many who may disagree on some points with their party’s candidates, but which is worse, your party’s candidate or the opposition’s? To abstain from voting is a vote for those you favor least. And besides, if you are not happy with your party’s selection of a nominee, you must be in the minority, for evidently there were more people who did approve of the selection. So be happy that you have a candidate with at least some chance of winning. Behind the curtain, you will do the right thing.

THE CHAIRMAN, who believes that voting, like a fine wine, is wasted on those who don’t know the difference, has called for a debate to settle the question:


The Debate will be held on Wednesday March 19, 2008 at the University Club, 420 Summit Avenue, in Saint Paul. The Chancellor will preside over drinks beginning at seven o'clock p.m. The debate will begin at half past seven. While there is no dress code for attendance, gentlemen who wish to speak must wear a tie; ladies should adhere to a similar sartorial standard. For those gentlemen who arrive tieless yet wish to speak, fret not: the Purveyor of Ties will keep on hand at least one of his quite remarkable ties for just such an eventuality. Questions about debate caucus procedures or about the John Adams Society itself may be directed to the Chairman at (952) 470-8090 or the Secretary at (952) 210-2448.


Friday, March 14, 2008

Understanding Universities

"The pillars of American liberalism -- the Democratic Party, the universities and the mass media -- are obsessed with biological markers, most particularly race and gender. They have insisted, moreover, that pedagogy and culture and politics be just as seized with the primacy of these distinctions and with the resulting "privileging" that allegedly haunts every aspect of our social relations."
- Charles Krauthammer

National Review Online has a very interesting blog covering higher education: http://www.realclearpolitics.com/articles/2008/03/the_democrats_race_gender_camp.html

Wednesday, March 12, 2008

Which Way for Thee, My GOP?

The Minnesota Republican Party is at an all-time low (all-time for the sixteen years I’ve been involved).

I got active in 1992, two years before the Republican Revolution of 1994, beginning at my caucus as is the way in our state party. Those were exciting times. A newbie with enthusiasm was propelled forward; there was no limit to the volunteerism that was gratefully accepted. New people were flocking to a party which now stood for something, something spelled out in that ambitious pledge, the Contract with America.

But eventually the Republican Party got comfortable with its power and began outspending drunken Democrats. The GOP President barely made it through twice, and power was lost in both legislative branches at both the Federal and State levels.

So you’d think we’d be encouraging new people into the party again. Seems smart to me.

Instead, MN GOP leadership from the top down to the BPOU levels are on the record for wanting to keep out any new Republicans.

A friend was told by his BPOU Secretary, who didn’t realize he was a Ron Paul supporter, that they were using tactics to keep the Ron Paul people from getting elected as delegates. Other BPOUs have resorted to “thuggery and bullying,” vocal slurs of Ron Paul supporters, and, most often, disallowing anyone to witness the vote counting as occurred at my convention last night. (Although the counting was complete, they would also not report until the delegate election results had been massaged, at least overnight. I’m not kidding. Any guess as to whether I’ll make their cut, regardless of how many votes I received?)

Ron Carey, especially, has performed in a spectacularly negative fashion. It is a well-known and strict tradition that all statewide candidates are to receive the official delegate lists from the party. The Ron Paul campaign was denied this list. McCain’s campaign obviously received it as I and others are now receiving unsolicited email from that camp.

What we have here is a sad group of people who are losing an entire political party, so they are locking the gates, hoping the horses will somehow get back in the barn, desperately clinging to a last shred of power, all the while kicking out newcomers who could expand their diminishing empire.

Which will it be, Mr. Carey? Will you change your tune and lower yourself to accepting enthusiastic newcomers into the party, or will the MN GOP’s demise come on your watch as you force this energy into a more conservative third party?

Blogger Jameson said...

A full report from Saint Paul's 64b BPOU:
Republican Hold Polite, Fair, and Open Convention (and begin an attack on the Saint Paul DFL Property Tax Hike)

At last Saturday's Highland Park GOP BPOU convention (64b) a record 36 Republicans ran for 12 delegate positions to the Congressional and State GOP conventions. All three tellers were elected by unanimous consent and any delegate who wanted to be a teller would have been welcome because there was a lot of counting work.

The election process for delegates at the 64b BPOU convention necessarily has a longer ballot than most elections. Ballots had to have the written names of exactly 12 candidates for delegate. The counting took a long time because of the 12 positions available. I can imagine that in a more Republican BPOU it is harder still to elect 50 or 60 delegates. After the delegate results were reported, 12 1st alternates and 10 2nd alternates were elected. No thuggery or bullying was observed or suspected.

Perhaps the most significant political development was the circulation of a petition to put the massive DFL Saint Paul property tax hike up for referendum in the November 2008 ballot. I would encourage all overtaxed Saint Paul voters to sign the petition. I will post website information for the petition drive when I learn about the website.

11:51 PM, March 13, 2008  
Blogger Scribbler de Stebbing said...

I heard no complaints about 64B. You comported yourselves in an exemplary fashion, as far as I know. Furthermore, any attacker of a property tax hike is a friend of mine.

12:24 AM, March 14, 2008  

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