Wednesday, January 23, 2013

Collapse of the American Empire?

If you're the kind of person who likes to watch videos and read articles about finance or global politics, and you've searched the internet for it at all recently, you’ll inevitably stumble across sites where people warn of the imminent collapse of western civilization due to the mounting debt problems of individuals and governments across the world.  The argument goes something like:
If the government defaults on its debt obligations, it will no longer be able to purchase anything, including oil and items used for national defense, nor will it be able to fund all of the social programs like welfare, social security, Medicare and the like, because its currency will be worthless.  If people suddenly stopped getting their government handouts, they'd revolt, and with no money to spend on defending itself, the government would collapse overnight.  We’d go back to a barter system or a gold standard because no governments will be left to back a paper or electronic currency. 
All international trade would stop, and therefore importantly oil would be unavailable to most people in western nations.  All commerce, which drives everybody's livelihood, would grind to a halt.  Since most people live in cities, and wouldn't be able to fend for themselves in the wilderness should they escape from population centers, they would surely die within a short time.  We would instantly be plunged back into the Stone Age, or at least another dark ages.  In essence, the world, as we know it, would come to an end.
Now I do agree that at some point the governments of most western nations, including the United States, will eventually default on their debt.  As of this writing, the U.S. has in the neighborhood of $16.5 Trillion of debt on the books and climbing1.  The GDP of the entire nation, which amounts to all of the wealth produced within the United States in a given year, is $15.1 Trillion per year.  Looking at it that way, it doesn't seem that ridiculous to have a debt to income ratio that’s a little less than 1:1.  But when you include all of the future obligations (the real debt) of the U.S., like those that have been promised for social security, Medicare and defense spending, the number jumps to $222 Trillion2.  No, that is not a typo, the real debt is actually about 15 times that of GDP.
The same rules apply for the finances of governments as they do for individuals.  And a good rule of thumb is, once a person’s debts exceed their income by more than 3 times, that person is in danger of defaulting from one day to the next.  The government has knocked that number out of the park.  The very fact that they haven’t gone bankrupt already is miraculous.  In my estimation, this part of the doomsayers’ story will happen, and in the near future. 
So that begs the question: Why won’t this mean the end of civilization as we know it?  The answer is: Because there are precedents for this type of thing in modern times.  Governments have gone bankrupt and their paper money was rendered worthless before.  And guess what?  The show went on.  Civilization continued, and the rest of the world went on with their lives. 
The times when this happened were due to similar scenarios in which the respective governments didn’t have enough revenue to cover their expenditures, so they just printed more money.  This devalued those currencies to the point that nobody would accept them anymore, and those governments were forced to restructure their debts, issue new currencies with new valuations and get their fiscal houses in order.  Now this was not a good situation for those nations, but the world did not end. 
Now an argument can be made that a nation as large as the United States, with global reserve currency status, has never done this before.  And some would say that either the U.S. is immune from such a thing, or the results would be so catastrophic that the world would be plunged into darkness.  Both would be wrong.  The U.S. couldn’t possibly honor all of those financial obligations if tax revenue increases remain on par with today.  They will have to either print money, or restructure their debt (default, bankruptcy, cutting of programs, etc.), because they certainly won't be able to increase taxes to the levels they would need to be without severe political backlash (or without causing the revenues to actually shrink).  This problem will work itself out, one way or another.
But even in a financially catastrophic event, nothing real necessarily gets destroyed in the process.  All of the infrastructure, the roads and bridges, farm land, power plants and transmission lines, refineries, hospitals, firehouses, police stations and on and on, will all still be here.  And that goes along with the people that populate that infrastructure.  All of the engineers, farmers, plant workers, doctors, firemen and police will all still exist.  And so will the military for that matter. 
As long as we don’t see massive ethnic or political genocide by the government, the military and police will continue to defend our borders and infrastructure.  No essentials need to disappear for any period of time.  The revolutionaries during the American Revolution often didn’t get paid for several years, so it’s not unprecedented for people to work without pay to serve the greater good within this country3.  I’m still optimistic about the American people.  I believe that we will come together in a time of crisis, like we always have, to fix these problems. 
There won’t be any revolution because there’s no legitimate reason to revolt.  Everything that we’re dealing with is a product of our own making.  We, the people, have demanded everything that our government has provided us, good or bad.  We still have the Constitution.  We still have the three branches of government, with all of their glorious checks and balances.  We still have our votes.
Like Lincoln and his constituents did, I vote to preserve the Union.  I’m not willing to scrap and part out 237 years of what has become the greatest idea for a nation in the history of man.  Yeah, we’ve got our problems.  And they’re big mind you.  But the system was built with the kind of flexibility that will allow us to restore it to its former glory.  We can still use the Supreme Court to nullify unconstitutional laws.  We can still form new political parties and vote these ‘bums’ out of office.  We can still fix our revenue and tax structure.  We can still peaceably assemble.  We can still vote.
1http://www.usdebtclock.org/
2http://www.theburningplatform.com/?p=38718
3http://www.archives.nysed.gov/a/research/res_topics_mi_revwar_claims.shtml

Tuesday, January 15, 2013

Newtown Inspired Gun Control



Since the Newtown shootings that took place in December, we’ve all been constantly inundated by uneducated and reactionary commentary from the media about gun control.  People say we need to do something about all of these guns and the crazy people who have them.  They like to cite countries like Great Britain, where successful gun control legislation campaigns have significantly reduced gun crime in their respective countries.  They argue that we need similar actions here in the United States.  Just like the events following the September 11 terrorist attacks, safety and security have been used as reasons to challenge our constitutional freedoms.
The data showing the decrease in gun crimes by tough gun legislation may be correct, but when you look at violent crime overall in Britain compared to the US, a different picture appears altogether. The following article cites data, collected by sources within Britain, showing how that country ranks in violent crime rates compared to other nations: http://www.dailymail.co.uk/news/article-1196941/The-violent-country-Europe-Britain-worse-South-Africa-U-S.html
When you read this article, you see that the violent crime rate in Britain is nearly 4 times the rate in the US. Now I've seen data showing just the opposite for homicide rates specifically, as seen in this Wikipedia entry: http://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide_rate, but even that data shows that only about 1% of violent crimes in the US are homicides, and that there is an approximately 0.0042% chance of being the victim of homicide in the US within a given year, making you almost 4 times as likely to die in a car accident, which is still incredibly unlikely to happen.  So in spite of all our guns, we're less violent than other less-armed nations, but we're markedly more successful when we commit to violence.
But as with others who advocate a libertarian stance on the possession of firearms in the US, my main reason has little to do with an attempt to reduce violent crime, which continues to drop as the population ages and people generally become more educated with each passing year. The real reason to maintain the free possession of firearms is the same reason that Martin Luther King Jr. fought and died in the civil rights movement, and the same reason our founding fathers fought for independence from Britain, which is to maintain an assertion of our civil liberties against those who would unjustly attempt to revoke them.
During the 20th century alone, there are many examples of genocide which have been enabled by strict gun control legislation. In fact, more people were killed by their own governments in these countries than all other homicides and domestic and international wars combined, as shown here: http://jpfo.org/filegen-a-m/deathgc.htm#chart.  Free gun possession is the one last fail safe against such tyranny.
I'm not suggesting that our current Presidential administration is filled with the kinds of people that would launch into a genocidal mania the moment that they see an unarmed populace, but there's no telling what they would do with their new-found absolute power if it were suddenly granted to them. And there's no telling what the next group of elected officials would do, or who would be enticed to run for office if it meant free reign to ride roughshod over political opposition once in power.
It's been scientifically shown that people who are drawn to positions of power are disproportionately narcissistic when compared to the rest of the population (http://researchnews.osu.edu/archive/narcissism.htm). These are people with an incredibly self-serving and sociopathic view of the world, and will do whatever it takes to get and keep power. Not all of them would murder, but without the threat of retaliation, one of them will eventually, and no one will be able to stop that person.
We’ve already seen two laws over the last 12 years that have essentially nullified different parts of the Bill of Rights.  The National Defense Authorization Act or NDAA, signed into law in 2012, destroys our right to due process as outlined in the 5th Amendment.  NDAA basically makes it possible for the government to arrest you without charging you with a crime, and holding you indefinitely, for no good reason other than that they say it’s in the interest of national security.  The Patriot Act, in its Orwellian glory (see 1984), destroys our right to be left alone by the authorities unless there's reasonable cause to believe that we have or are planning to commit crimes.  We were formerly protected against this type of behavior by the 4th Amendment, but now they can spy on you any time they like, and all they have to say is that it’s a matter of national security, citing the Patriot Act, and they get a free pass.
If the 2nd Amendment, which protects our right to keep and bear arms, is nullified without resistance as well, we’re in big trouble.  If the trouble doesn’t come now, it will in the very near future.  The founding fathers added these amendments to the Constitution for the reasons I have described above.  They knew that just because people happened to be in power didn’t mean that they were infallible.  They actually believed the exact opposite.  That people in power were prone to corruption.  And it just so happens that they were right.
Our whole system was set up as one of checks and balances.  The idea behind the whole system was that no individual or group of people would be able to gain absolute power, and that all groups would be represented and have a say.  Not only that, but individuals would be protected against mob rule, which is the most exceptional part of the system of government that we have enjoyed for over 200 years.   Ignoring these mechanisms like we are with the Patriot Act and the NDAA is a slippery slope that can only lead us to fall off of a cliff into tyranny.  Going this one step further and killing the 2nd Amendment will be a tragic, and an irreversibly fatal, mistake.  Don’t be a victim.