Wire Report

(Wire/FFF) – It may be possible to look into America’s future. How? Watch what’s going on in Greece. According to the Washington Post, “Greece needs to raise about €23 billion [more than $31 billion] in April and May to pay debts coming due. Greek officials say that either is impossible, or would require punitive interest rates — making it harder to bring the budget under control — unless Europe helps out.” So the Greek government awaits a bailout from Germany and France, but first it has to impress them that it is serious about fiscal austerity.

The Greek welfare state’s annual deficit is about 13 percent of its GDP and its accumulated debt is 113 percent of GDP. Meanwhile, the U.S. government’s overall debt is now on track to reach 90 percent of GDP by 2020, more than $20 trillion¹. Just last week the Congressional Budget Office said that over the next decade, the annual budget deficit will be $1.2 trillion more than the Obama administration has guessed. The ten-year figure is now projected to be $9.76 trillion. The annual deficit is about 10 percent of GDP.

Government spending is rising — and the new entitlement called health-care “reform” hasn’t passed yet. That’ll be good for a couple of trillion over the next decade.

CBO  estimates, GDP will reach 90% by 2020

The economic consequences of all that are likely to be dire. As the government tries to borrow more money, both to finance its programs and to pay the old debt that’s coming due, it will have to promise a better return to nervous lenders, such as China. But raising the interest rate will push other borrowers’ rates up, which in turn will put a damper on economic activity. Unemployment will grow and revenues will shrink, but entitlement programs, such as Medicare and Social Security, will keep growing. They already face tens of trillions of dollars in unfunded liabilities and are heading toward bankruptcy. Military spending will also increase, along with most other government spending.

What will the politicians do when they find interest payments swallowing the budget, leaving them less and less money to shower on political supporters? They might resort to higher taxes, which would further dampen economic activity. They might get the Federal Reserve to monetize the debt through inflation; but that would wreak economic havoc. Politicians aren’t likely to cut spending because it would jeopardize their careers. At that point, the government might default on its debts, a step that has much to recommend it.

Thus, the welfare state is a fiscal failure.

The welfare state has long been presented as the viable “third way,” a happy medium between laissez faire — full separation of state and economy — and state socialism — government control of the economy. Advocates of individual liberty have emphasized that the welfare state violates freedom because government takes wealth from those who produce it and transfers it to favored groups. Defenders have responded that the welfare state embodies compassion: people with means give to those less fortunate. But forced transfers through government are not true compassion. A virtue like compassion requires free choice, but government gives you no choice. So the compassion of the welfare state is counterfeit. It’s more about distributing goodies at others’ expense to win votes for politicians.

Historically compassion had little to do with government programs for the poor and social insurance for the working and middle classes. Beginning as far back as Queen Elizabeth I poor laws were intended to control people who were potential sources of social strife; and social insurance beginning in Bismarck’s German welfare state was calculated to make working people dependent on the government. In both cases the free society was subdued for the sake of those in power.

Now it is clearer than ever that the welfare state is not only morally flawed, it is also fiscally unsustainable. Politicians will always have an incentive to spend, while hiding the costs or pushing them onto future generations through debt. But reality doesn’t go away. It comes back to bite in unexpected ways.

We’re seeing it in Greece today. Tomorrow it will be other European welfare states. Then, if nothing changes, it will be America’s turn.

© 2001-2010 The Future of Freedom Foundation. All rights reserved.

Source(s): ¹Congressional Budget Office, The Budget and Economic Outlook, January 2010 •

Sheldon Richman, Editor “The Freeman”

Sheldon Richman is editor of The Freeman, published by The Foundation for Economic Education in Irvington, New York, and serves as senior fellow at The Future of Freedom Foundation. He is the author of FFF’s award-winning book Separating School & State: How to Liberate America’s Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and FFF’s newest book Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: “I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank… . I also think that Mr. Richman is right to fear that state education undermines personal responsibility…” Mr. Richman’s articles on population, federal disaster assistance, international trade, education, the environment, American history, foreign policy, privacy, computers, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the Fortune Encyclopedia of Economics. A former newspaper reporter and former senior editor at the Cato Institute, Mr. Richman is a graduate of Temple University in Philadelphia.

Wire Report

On Guantánamo, Symbolism Trumps Substance

(WIRE/IndInst) – President Obama has been so chastened by his failure to meet the pledge of closing Guantánamo prison within a year that Rahm Emanuel, his chief of staff, is trying to negotiate with Sen. Lindsey Graham (R-SC) to gain Republican support for doing so. In exchange, Graham wants Khalid Sheikh Mohammed and other alleged 9/11 attackers tried using a military tribunal instead of a civilian court and also wants unconstitutional legislation allowing the indefinite detainment of terrorism suspects without trial. Closing Gitmo is designed to revive a tarnished U.S. image abroad rather than being a substantive change in policy, and it now apparently may come at the expense of using unconstitutional and discredited means of holding and trying terrorism suspects.

Although closing Guantánamo would be important symbolically, the law-free sanctuary that the Bush administration had achieved there has already been eroded by the Supreme Court’s demand that detainees have some legal rights. And even if the Obama administration closes Gitmo, some of Bush’s unconstitutional policies would continue in prisons around the United States—for example, the use of military tribunals for some detainees and the detention of some former Guantánamo detainees indefinitely without trial. Thus, the world should, and probably will, focus on the U.S. government’s continued violation of detainees’ rights rather than where they are violated—thus negating any positive public relations benefits from closing Gitmo.

But why should suspected diabolical terrorists have rights? Because these are our rights that are being trampled on too. The key word here is “suspected.” No matter how horrendous the crime—and slaughtering innocents for political reasons is about as heinous as it gets—the alleged culprit deserves a fair trial because he or she could actually be not guilty. Governments, including U.S. federal, state, and local governments, routinely make mistakes and jail the wrong people for crimes. According to Anthony Gregory, author of a forthcoming book on legally challenging incarcerations, an academic study of Guantánamo prisoners found that more than half had never committed a hostile act against the United States. And all but a few percent had not been picked up by American authorities, but had been turned over to U.S. forces in Afghanistan by Afghans to claim handsome rewards. In other words, innocent people had been turned in to get cash. Only 8 percent of Gitmo detainees were al-Qaeda members.

And why are military tribunals so bad? Although they have been slightly improved since the Bush administration originally set up its kangaroo military courts, they still lack the procedural safeguards of detainee rights found even in military courts-martial. Even more important, they are unconstitutional. The 6th Amendment in the U.S. Bill of Rights requires a jury trial for all criminal offenses, with no exception for national security cases. Proponents of military tribunals cite their use to try would-be German spies and saboteurs during World War II, but they were no more constitutional then than now. Furthermore, the killing of almost 3,000 people on 9/11 was a shameful crime, and those that allegedly perpetrated it should not be elevated to “warrior” status by trying them in a military tribunal.

Obama is only contemplating abandoning civilian trials for the alleged 9/11 attackers because of political pressure against holding such trials where the attacks occurred—southern New York, eastern Virginia, and western Pennsylvania. It is disheartening that the public in these attacked areas would not leap at the chance to uphold justice and the American legal system in their own communities.

Overseas, people will merely see any use of kangaroo military tribunals for what they are: attempts to shop jurisdictionally to get convictions more easily. Already the Obama administration selected the cases easiest to prove—those against the 9/11 attackers—for pursuit in civilian courts and relegated the more difficult ones to remain in military tribunals. This policy then created the anomaly that the most heinous defendants got the most rights. Of course, throwing the alleged 9/11 attackers’ case back to into military tribunals will correct this anomaly, but at the expense of violating the 6th Amendment. Thus, all defendants in terrorism cases should be tried in civilian courts as potential criminals.

Lastly, the civilian courts—just as they have in other cases with sensitive information, such as espionage and Mafia cases—have an excellent record of obtaining convictions. Civilian trials have resulted in hundreds of successful terrorism prosecutions, whereas the flawed military tribunals have resulted in only a few convictions—and most of those were overturned.

So if a deal is cut with Sen. Graham to close Guantánamo in exchange for tossing the alleged 9/11 attackers’ case back into military tribunals, the Constitution again will have been trampled under foot and the positive symbolism of closing Gitmo will have been offset by the use of kangaroo military commissions, which have been justly reviled around the world.

© 2010 The Independent Institute

Ivan Eland, Senior Fellow and Director of the Center on Peace and Liberty, The Independent Institute

Ivan Eland is Senior Fellow and Director of the Center on Peace & Liberty at The Independent Institute. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and a Ph.D. in Public Policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, and he spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office. He also has served as Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office (now the Government Accountability Office), and has testified on the military and financial aspects of NATO expansion before the Senate Foreign Relations Committee, on CIA oversight before the House Government Reform Committee, and on the creation of the Department of Homeland Security before the Senate Judiciary Committee. Dr. Eland is the author of Partitioning for Peace: An Exit Strategy for Iraq, Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, The Empire Has No Clothes: U.S. Foreign Policy Exposed and Putting “Defense” Back into U.S. Defense Policy, as well as The Efficacy of Economic Sanctions as a Foreign Policy Tool. He is a contributor to numerous volumes and the author of 45 in-depth studies on national security issues. His articles have appeared in American Prospect, Arms Control Today, Bulletin of the Atomic Scientists, Emory Law Journal, The Independent Review, Issues in Science and Technology (National Academy of Sciences), Mediterranean Quarterly, Middle East and International Review, Middle East Policy, Nexus, Chronicle of Higher Education, American Conservative, International Journal of World Peace, and Northwestern Journal of International Affairs. Dr. Eland’s popular writings have appeared in such publications as the Los Angeles Times, San Francisco Chronicle, USA Today, Houston Chronicle, Dallas Morning News, New York Times, Chicago Sun-Times, San Diego Union-Tribune, Miami Herald, St. Louis Post-Dispatch, Newsday, Sacramento Bee, Orange County Register, Washington Times, Providence Journal, The Hill, and Defense News. He has appeared on ABC’s World News Tonight,  NPR’s Talk of the Nation,  PBS, Fox News Channel, CNBC, Bloomberg TV, CNN, CNN Crossfire,  CNN-fn, C-SPAN, MSNBC, Canadian Broadcasting Corp. (CBC), Canadian TV (CTV), Radio Free Europe, Voice of America, BBC, and other local, national, and international TV and radio programs.

Allison Bricker

WASHINGTON D.C. – Senators Charles Schumer, Democrat of New York and Lindsey Graham, Republican of South Carolina are meeting today with President Obama to discuss tactics on how best to orchestrate the appearance of bipartisanship regarding comprehensive immigration reform. However, immigration reform is not the sole reason for the Senators’ visit. Also on the agenda is the culmination of the plutocrat’s fetish like desire to track all Americans with yet another attempt at shackling us with a national identification card.

Since the events of September 11th, the aristocrats on the hill have sought a way to effectively track like cattle all U.S. Citizens; however, despite their relentless fearmongering of boogiemen terrorists, the American people have in large part resisted the attempt to achieve “safety” via a mirroring of 1970’s era East Germany.

In a fashion similar to when the FDIC proposed the “Know Your Customer Rule” before public backlash forced a retraction, the statist have returned to their default playbook to achieve their end by swaddling in a national identification card under the guise of “securing the borders”. Then Assistant Director of the FEDERAL RESERVE, Richard Small provided keen insight to the minds of plutocrats when he spoke at the Mid Atlantic Compliance Conference in 1999, quipping that success of “Know Your Customer” depended on simply renaming the provision in order to avoid public scrutiny; the Central Authority hopes to replicate a corresponding trajectory for the National ID.

Whereas, “Know Your Customer” finally became law upon passage of the unconstitutional USA PATRIOT Act, the National ID card has encountered continued resistance thanks both to the new-media and internet-at-large. First as REAL ID, then as the PASS Act, the National ID has thus far repeatedly run up against an ever-growing chorus of Americans awakening to a federal government intruding ever further into our personal lives and business.

As recently reported, efforts are now under way by Imperial Senators John McCain (R-AZ), Saxby Chambliss (R-GA), Scott “Tea-Party” Brown (R-MA), and seven other co-sponsors co-conspirators to indefinitely detain Americans merely upon suspicion and without trial. Further, details remain sparse on the Obama Administration and Director of National Intelligence Dennis C. Blair’s request to be granted authority by Congress to assassinate Americans suspected of committing belligerent acts against the Central Government. Now the seek to saddle us with a biometric ID which confirms identity be scanning the veins in our hands?

These several recent legislative maneuvers by the treasonous statists in Congress are scheming what can no less be described and ought rightfully be referred to as the “New Intolerable Acts”.

While we are fortunate to have a robust and growing body of enlightened pro-liberty advocates, thinkers, and teachers such as Representative Ron Paul, we must not rest upon their hard work to reclaim our quickly atrophying liberties. As his interview with Megyan Kelly of Fox News demonstrates, we must also consider utterly detaching ourselves form what was once referred to as “the fourth branch of government”, ergo the old-media, as it is obvious at least to this blogger, that they are but mere shills for the statists. Her inference that an erosion of our natural liberties is of no consequence and a necessary concession under the current events, shows her to be a cold lifeless traitor to human liberty.

Make no mistake, the world, why undeniably dangerous, has always appeared to be at an unrivaled level of hostility when viewed through the lens of the here and now. Whereas it took close to 2,000 years of human civilization for an imperfect generation to rightfully proclaim the individual as the standard-bearer of liberty, in full possession of our natural rights, and offer the opportunity to form a more perfect Union.

Let us not now shrink in the duty to be ever vigilant defenders of both our own and our posterity’s unalienable natural liberties in the face of this growing tyranny.

Wire Report

(Wire/LP) – The Liberty movement has been looking for a beacon of truth in the mainstream media to stand up for the Founding Fathers vision of patriotism. At CPAC’s Campaign for Liberty event Thursday night, Ron Paul talked about a young man who came to his office to ask the congressman what it would take to get into politics. Dr. Paul encouraged the young man to consider going into the media business instead.

During an interview with Judge Andrew Napolitano promoting his book “A Nation of Sheep”, he told me we need more wolves in the “fourth branch of government,” spreading the ideas of liberty and that will challenge the dominant progressivism-which sometimes goes by the name “conservatism.” The progressive movement has gradually infiltrated the minds of conservatives, through talk radio and other mediums, and such pundits are truly sheep in wolves clothing.

Enter the Neo-Conservative

Talk host Sean Hannity doesn’t even acknowledge Kentucky Tea Party Republican candidate Rand Paul who was even endorsed by Hannity favorite, Sarah Palin. Rush Limbaugh said of Representative Ron Paul’s CPAC victory, that it “put the brakes on Republican progress.” Mike “holy war” Huckabee, claims of CPAC, “it’s not the event it once was”, and in their agreement, Huckabee and Rush are correct–there were actual conservatives at CPAC this time.

Let’s not forget Debra Medina being treated like a joke by Glenn Beck. Beck obviously doesn’t understand himself, the principles of conservatism he preached to the CPAC audience, concerning “progressivism” and “Wilsonianism”. The blind-leading-the-blind, Beck might want to go back to step-one himself and admit he is himself a disease called “Beckaholism”, a not so rare sickness that consists of part liberty rhetoric, part establishmentarianism, and part progressive interventionism.

Though his schizoid mix is a more dangerous form of the disease, there is hope. Mr. Beck, we invite you to join Neoconservatives Anonymous before going off and embarrassing the rest of us who are actually in recovery from the intellectually debilitating disease of neo-con denial. I am willing to be his sponsor as I am the founder of the program and all are welcome. But remember it’s for those who want it, not for those who need it.

My suggestion to Beck and the rest of the war state ostriches:

1. Take the cotton out of your ears and put it in your confused-about-conservatism mouths.
   
2. Start listening to real wolves in the media beginning with the Mike Church Show.
   

Yes, the Mike Church Show! I recently had the honor of meeting Mike Church at CPAC, a true, modern day Patrick Henry, and someone I believe to be an honest-to-goodness, recovering neoconservative. After he spoke Friday night, a small group had dinner with Mike Church, including his brother, sister-in-law, his producer Andrew Guss, author Tom Mullen, The American Conservative’s Kelly Jane Torrance, Jack Hunter (aka the Southern Avenger”), and we discussed what it was like before and after we woke up from neo-conservatism. Mike Church knows both sides of the real conservative vs. neo-con argument, which easily makes him the most dangerous man on talk radio today. It’s hard to neo-con a recovering neo-con.

Mike Church has been doing talk radio for 18 years and was part of what he calls the “talk show mafia”. Mike has the longest running talk show on Sirius Radio and just a couple of years ago he woke up from neo-conservatism and has been helping wake millions since. Mike discovered noted Liberty movement figures Kevin Gutzman and Tom Woods and organizations like the Ludwig von Mises Institute, which led to his producing a wonderful film about the founders and constitutional government called “The Spirit of 76: The Greatest Story Never Told.”

There are those who do speak for true liberty in the forth branch of government. FOX News Judge Andrew Napolitano with his program “Freedom Watch” and a veteran voice on Sirius satellite radio, the great Mike Church. Before it’s over, I expect there will be many others that will join the Church/Napolitano wolf pack. Who knows, perhaps even the schizophrenic Glenn Beck might come around, finally and fully becoming one of “us”. But chances are by the time that happens-it will be viewed along with the rest of the “talk show mafia” through Mike Church’s rear view mirror.

Kurt Wallace, Editor & Publisher, The Liberty Pulse & The Liberty Pulse Blog

Since hosting Wake Up America, Wallace has interviewed many distinguished guests including Judge Andrew Napolitano, Fox News Commentator and Judicial Analyst; Dr. Murray Sabrin, USA Daily; Thomas E. Woods Mises.org and Peter Schiff, Financial Advisor and a regular contributor to Fox Financial Network and Congressman Ron Paul. As Editor & Publisher of LibertyPulse.com, Mr. Wallace offers the Liberty Movement its own news aggregator service filled with a variety of Liberty oriented news stories and editorials updated constantlyfrom around the web.

Allison Bricker

WASHINGTON D.C. – The man once held as a P.O.W. and tortured after his A4E-SKYHAWK jet was shot down during the Vietnam War has authored a bill entitled, “S.3081 – Enemy Belligerent, Interrogation, Detention, and Prosecution Act of 2010” which thus far has been referred to the Senate Judiciary Committee. The bill outlines the process by which Americans may be held indefinitely, without notice of their Miranda Rights, and without ever being charged with a crime. Worse detainment of an individual according to the legislation is authorized by mere suspicion that the individual did or seeks to harm any asset of the United States government or any civilian target.

Even more disappointing, the bill introduced last Thursday, March 4 already has 9 co-sponsors, including the supposed “Tea Party” candidate Senator Scott Brown of Massachusetts.

Calls made by this blogger to Senator McCain’s press office for comment regarding the Senators’ bill entitled “S. 3081__ ‘Enemy Belligerent Interrogation, Detention, and Prosecution Act of 2010″* remain unanswered as of this writing. However it is unlikely that Senators McCain or Lieberman would agree that their statist takes on protecting the “Homeland” come at the cost of fundamentally altering the Republic and Constitutional principles for which they took an oath to uphold and defend.

Case in point, Senator McCain’s website proudly displays his most recent vitriolic pronouncements against Liberty whereby he stated:

Mr. President, I rise to introduce legislation that sets forth a clear, comprehensive policy for the detention, interrogation and trial of enemy belligerents who are suspected of engaging in hostilities against the United States. This legislation seeks to ensure that the mistakes made during the apprehension of the Christmas Day bomber, such as reading him a Miranda warning, will never happen again…”

Senator John McCain (AZ)
U.S. Senate
Floor Statement³
March 4th, 2010

As was predicted when the Bush Administration first began down the path of forswearing the American principle that all individuals American or alien were guaranteed the inherent right of Habeas Corpus when coming into contact with the U.S. Government, Senator McCain and Senator Lieberman now seek to exert and extend the ever-corrupting power of the Central Authority’s design on the use of indefinite detention, secret interrogations, and denial of counsel to Americans. While many knee-jerked and quipped it was merely “Muslim Terrorists” who were subject to such treatment under the previous White House, this legislation seeks to lump all into the same pot, inherent liberty be damned.

My how far we have fallen from “the Path of the More Perfect Union”. Everyday the “Change” that came to Washington looks more and more  like an emboldened status-quo. Many will remember just months after President Obama’s inauguration, Rachel Maddow of MSNBC, reported on the new President’s desire² to scrap former President’s Bush’s piecemeal system of imprisonment via the label of “Enemy Combatant” in favor of constructing a “new legal-framework” of “prolonged detention”, of which this bill will provide should it reach his desk.

Click Picture to Enlarge

Moreover, this bill comes on the heels of the Obama Administration, the C.I.A., and the Director of National Intelligence Dennis C.  Blair seeking to have Congress authorize the assassination of Americans (a story we continue to research), the Central Authority on the Hill seeks to obtain the “legal” authority to label Americans with vague sounding titles such as “Unprivileged Enemy Belligerent” and “High Value Detainee” thereby denying “We the People” our right to Habeas Corpus solely based upon mere suspicion.

Lost Down a Rabbit Hole of Red Tape

Contained within this most abhorrent piece of legislation, whose pages emanate a continual nauseating stench of Imperialist statism, is  a system of interrogation and arbitrary adjudication which should make any cognizant American question their government’s lust for such unchecked power.

According to the bill any individual who is captured or “otherwise” comes into the “effective control” of the United States government shall be transferred into “military custody” at the earliest possible convenience. After which a “team” referred to as the “high value detainee interrogation group” organized by the President and consisting of  members with expertise in National Security, terrorism, intelligence, enhanced interrogation a.k.a torture, or law enforcement will conduct an initial assessment of the detained person to determine whether or not they pose a threat to the Central Authority its “Coalition Partners” or any of the federal government’s  endless Imperial wars/occupations.

Moreover, one can only guess that Senator McCain was seeking to hedge against any backlash the bill may produce upon seeing the light of day and included language that indicates the “high value interrogation group” must decide whether or not the person is indeed a threat within a 48-hour timetable. (phew) Whilst 48-hours is still an awful long time without access to legal counsel, one might think to themselves, well it sure is less oppressive sounding than indefinite.

Click Picture to Enlarge

However, as anyone who has spent any time at all reading the schizophrenic manner in which legislation is crafted  will tell you, beware the redirect to previous sections of the bill and/or U.S. Code. As such, at the conclusion of SECTION 3; Sub-Section b; Paragraph C(3) which delineates the “48-hour” time window, the draconian measure directs you back to Section 2, which reveals that the the time-limit for detention and transfer of custody is only applicable if the detainee is determined not to be of any value from an intelligence or strategic perspective.

If the detainee is determined by any members of the ad hoc Tyrant tribunal, then the detainee may face indefinite detention without a trial or charges filed in a fashion similar to  many of the detainees in Gitmo who were held for years upon years without formal charges before their release.

After all, being indefinitely held without trial, legal counsel, and tortured, reassures this blogger that those detainees will harbor no ill will towards their captors which might motivate them to seek revenge against said government  captors/torturers. Such observations of  “blowback” are only for the weak minded who secretly lust for the Glorious Imperial Homeland to fail, or are obviously “terrorist” sympathizers, and as such, indefinite detention is just punishment for their “un-NeoPatriotic” sentiments; right Mr. Hannnity?

Does this mean that Senator McCain himself might qualify as  an “Overprivileged Belligerent Aristocrat” if he helps recruit “enemies of the STATE” by proxy via the guaranteed abuses which are sure to follow should this legislation find its way into law? Does that count as material support of the enemy Senator McCain?

Upon reading this bill in its entirety, one can only hope that a piece of legislation which cites MIRANDA v. ARIZONA (384 U.S. 436 (1966)) solely to indicate that this right is no longer applicable should the whim of an unelected and unaccountable field agent of the CIA, FBI, DHS, NSA, et al declare an individual American to be an “Unprivileged Enemy Belligerent” would go down in flames. Its authors at a minimum, censured or at optimum, removed from their seats in the Senate and replaced with Senators who actually understand their oath to the Constitution and the principles embodied therein.

However, it is a new season of American Idol, and America’s Next Top Model, so maybe it is just wishful thinking that this legislation is tossed into the proverbial shredder and its machinations contained therein never see a vote in a conference committee or the stroke of the President’s pen.

As was once practice in all stenographer classes across the nation, “Now is the time for all good patriots to come to the aid of their country.”

In my estimation, we stand at an intersection of which two paths are quickly diverging. While we may take the time to celebrate such victories as our momentum on exposing the nature of the FEDERAL RESERVE, the flawed nature of Keynesian Economic Philosophy, and the insanity that is Fractional-Reserve banking, we must at the same time be vigilant to further resist the stratagem of the status quo’s desire to amass more unchecked power for themselves while indenturing our obedience through endless war and fear mongering over the threat of terrorist boogie men.

For it is up to us whether we stand to Restore the Republic or sacrifice human liberty to a second dark ages.

Source(s): ¹“S. 3081 “Enemy Belligerent Interrogation, Detention, and Prosecution Act of 2010″ PDF (174.0KB) • ²MSNBC Rachel Maddow Show, originally aired May 22nd, 2010 • ³Website of Senator John McCain, Floor Statements, STATEMENT BY SENATOR McCAIN ON THE ENEMY BELLIGERENT INTERROGATION, DETENTION, AND PROSECUTION ACT OF 2010 / March 4, 2010

* Note S. 3081 has not been received by the Government Printing Office. As such the version contained within this post is the original draft. If any changes in the Bill exist after printing by GPO, the post will be updated to reflect the official Text of the bill. *See Update at top of page.

Allison Bricker

Essay No. 3

– A response to my fellow advocate for Liberty, Mr. Jack Hunter, a.k.a. The Southern Avenger regarding the Supreme Court & the Chicago Handgun Ban –

During his most recent editorial, Mr. Hunter asserts that the Supreme Court of the United States has no right to determine the Constitutionality of the City of Chicago’s ban on handguns, which has existed since 1982. He further opines that supporters of the 2nd Amendment and Constitutionalists make an egregious error in looking to the Supreme Court to overturn Chicago’s prohibition, going so far as to say it is in fact Constitutional, albeit ignorant.

He attempts to buttress his point of view by referencing the 10th Amendment, which says all powers not delegated to the federal government are reserved by the states, and thus argues that a local municipality has the right to determine its own rules and regulations.

While it is indeed true that, the 10th Amendment prohibits federal interference on state matters, the issue before the Supreme Court is a matter which is not simply confined to the realm of “community standards” or daily operations, instead it is a restriction upon the natural right of an individual to defend themselves against an attack upon their person.

As such, the usual mantra that the states existed prior to the Central Authority is in this case utterly immaterial, as the Natural Rights of the People existed prior to the several states, the federal government, and the Constitution itself in perpetuum.

Further, those aligned against the validity of the Supreme Court’s jurisdiction and in support of Chicago’s gun ban point to ARTICLE I, SECTION 22 of the current Illinois State Constitution adopted in 1970 which states:

SECTION 22. RIGHT TO ARMS

Subject only to the police power, the right of the individual citizen to keep and bear arms shall not be infringed.

The portion before the first comma is where the statists hang there hat. Desiring and thus obtaining its citizens continue to cede their ability to bear arms subject to a determination by the state whether or not public safety would be endangered, these five words, seek to appoint the STATE as arbiter ille supremus over the natural right of self-defense. Moreover, as a state, Illinois has never recognized the right to bear arms as an individual liberty, and instead has from its admission to the union, and under four previous state Constitutions, sought to ordain the right to bear arms exclusively to the militia solely in defense of the state.

While Mr. Hunter seeks to dismiss the “incorporation” counterpoint via the 14th Amendment with the creation of the same-sex marriage straw man, the simple fact remains that Illinois is a member of the union and as such enjoys the privileges and immunities of its membership and thus pledges its allegiance to the Organic laws of the Republic. The aforementioned are the absolute embodiment of the principles as enshrined in the Declaration of Independence and secured by the rEVOLution whereby the Individual, not the STATE is the Standard-Bearer of Liberty.

With all due respect, I urge Mr. Hunter re-read the 10th Amendment, most specifically its last four-words.

Nevertheless, let none misconstrue my sentiments, as it is not my purview to cede liberty unto the Hobbesian notion of “popular sovereignty”. For even “Popular Sovereignty” does not reign supreme when its motivations are to seek usurpation of a minority’s or individual’s unalienable natural Rights.

If history is any guide upon the matter, sometimes the individual must be prepared to defend their Liberty, against any and all machinations of knee-jerk populism.

Wire Report

(WIRE/SA) – In 2007, USA Today reported. “Like a ticking time bomb, the national debt is an explosion waiting to happen. It’s expanding by about $1.4 billion a day – or nearly $1 million a minute¹. What’s that mean to you? It means almost $30,000 in debt for each man, woman, child and infant in the United States.” Three years later Congress has raised the national debt ceiling yet again — to an unprecedented and even more astronomical $14 trillion. From healthcare to climate change, stimulus to war, virtually every conversation coming out of today’s Washington, DC-regardless of which party is in power — is about how much money our government is going to spend next.

Not surprisingly, countless Americans are now realizing that the greatest threat to their life, liberty and property is their government. Describing such people as “deranged,” New York Times columnist Frank Rich seems to think the greatest danger on the horizon is not necessarily big government-but “extremists” hell-bent on fighting it. Writes Rich:

(M)ost Tea Party groups have no affiliation with the G.O.P. despite the party’s ham-handed efforts to co-opt them. The more we learn about the Tea Partiers, the more we can see why. They loathe John McCain and the free-spending, TARP-tainted presidency of George W. Bush. They really do hate all of Washington, and if they hate Obama more than the Republican establishment, it’s only by a hair or two. The Tea Partiers want to eliminate most government agencies, starting with the Fed and the I.R.S., and end spending on entitlement programs. They are not to be confused with the Party of No holding forth in Washington – a party that, after all, is now positioning itself as a defender of Medicare spending. What we are talking about here is the Party of No Government at All.

Frank Rich
New York Times Columnist
“The Axis of the Obsessed and Deranged”²
Published: February 27, 2010

What Rich derisively calls the “Party of No Government at All,” has been a healthy and long overdue reaction to what we have now — the Party of Any-and-All Government. Flustered over the rise of anti-Washington “extremism,” establishment men like Rich continue to ignore that our current, virtually omnipotent federal government is pretty damn extreme itself-that is, if the U.S. Constitution is still any gauge on what American government should be and not simply the status quo sympathies of a NYT’s columnist.

Rich paints a picture in which the supposedly respectable conservative movement of the recent past has been hijacked by the ghost of John Birch and the specter of Ron Paul. But Rich has it exactly backward-there has been no mainstream movement advocating for limited government conservatism for decades, only the GOP using conservative rhetoric as a marketing tool to win elections. The conservative movement isn’t being hijacked-it’s being resuscitated. Rich notices the difference; he just doesn’t like it:

The distinction between the Tea Party movement and the official G.O.P. is real, and we ignore it at our peril. While Washington is fixated on the natterings of Mitch McConnell, John Boehner, Michael Steele and the presumed 2012 Republican presidential front-runner, Mitt Romney, these and the other leaders of the Party of No are anathema or irrelevant to most Tea Partiers. Indeed, McConnell, Romney and company may prove largely irrelevant to the overall political dynamic taking hold in America right now. The old G.O.P. guard has no discernible national constituency beyond the scattered, often impotent remnants of aging country club Republicanism. The passion on the right has migrated almost entirely to the Tea Party’s counterconservatism.

Frank Rich
New York Times Columnist
“The Axis of the Obsessed and Deranged”²
Published: February 27, 2010

As the old GOP guard scrambles to put rank-and-file conservatives back in line so they can vote for Republicans like Mitt Romney who might save Medicare or spend trillions on another war, tea partiers, libertarians, and constitutionalists of all stripes should take solace in the fact that despite their critics–radical loyalty to limited government principles has long been a hallmark of American conservatism. Or as the original right-wing extremist, Barry Goldwater explained in his famous 1960 book The Conscience of a Conservative:

The turn will come when we entrust the conduct of our affairs to the men who understand that their first duty as public officials is to divest themselves of the power that they have been given. It will come when Americans, in hundreds of communities throughout the nation, decide to put the man in office who is pledged to enforce the Constitution and restore the Republic. Who will proclaim in a campaign speech: ‘I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them. It is not to inaugurate new programs, but to cancel the old ones that do violence to the Constitution, or that have failed in their purpose, or that impose on the people an unwarranted financial burden. I will not attempt to discover whether legislation is ‘needed’ before I have first determined whether it is constitutionally permissible. And if I should later be attacked for neglecting my constituents’ ‘interests,’ I shall reply that I was informed their main interest is liberty and that in that cause I am doing the very best I can.’

Barry Goldwater
“The Conscience of a Conservative”³

Copyright © 2010 The Southern Avenger

SOURCE(s): ¹USA Today “U.S. Debt $30,000 per American” published 12/03/2007 • ²The New York Times “The Axis of the Obsessed and Deranged” by Frank Rich, published 02/27/2010 • ³ “The Conscience of a Conservative” by Barry Goldwater • ⁴ Southern Avenger YouTube Channel

Wire Report

(WIRE/TMB) – If you are going to listen to Washington politicians at all, it is always best to listen to the party that is currently out of power. After each election, it is the job of the losers to try to attack the winners in any way they can. Often, they inadvertently advocate genuine principles of liberty in the process.

During the 8-year nightmare that was the Bush administration, it was the Democrats that stumbled upon these principles in their efforts to regain the throne. It was they who pointed out that the government should not be spying on its own citizens, that the president was assuming un-delegated powers through executive order, and that it was neither morally justified nor prudent to invade a third world nation that had committed no acts of aggression against the United States and lacked any reasonable means to do so. Their hysterical mouthpiece, Keith Olbermann, even went so far as to cite a long-forgotten document, the U.S. Constitution.

Of course, it is now abundantly clear that these arguments were made simply out of expediency. With the Democrats in power, it is now the Republicans’ turn to “fight City Hall,” and they have rolled out their usual rhetoric about small government, free markets, and traditional family values. Moreover, they, too, have rolled out the U.S. Constitution and waived it around in opposition to the Democrats’ plans to “spread the wealth around.”

Let’s take note that the Republicans are now correct in opposing the main tenets of the Democratic agenda, including expansion of government involvement in health care, “Cap and Trade,” and other wealth redistribution schemes. Amidst all of the usual noise coming from Washington and its media pundit class, it is only the Republicans that are making any sense at all.

Unfortunately, this is shaping up to produce familiar results. There is a growing movement for “change” that promises to “throw the bums out” in the next two elections. However, those who are part of this movement do not stop to consider what the Republicans’ true agenda will be once they regain power. As they have for over 100 years now, Americans are dashing to the other side in their perennial political game of “pickle in the middle.” They still haven’t learned that the pickle never wins.

The Republicans are having remarkable success in painting President Obama’s agenda as socialist and their “conservatism” as its antithesis. Most average Americans who identify themselves as conservatives accept this argument. If socialism redistributes wealth through the force of government, then conservatism, being its opposite, must oppose such redistribution of wealth. If socialism means that the economy will be centrally planned by government “experts,” then conservatism, being its opposite, must leave those decisions with private citizens. If socialism results in big government, conservatism, being its opposite, must result in small government. These are the assumptions that inform the political decisions of most conservative American voters.

There is only one problem. None of them are true.

The conservative-liberal dichotomy is as old as politics itself. It was present at the founding of the American republic. However, despite the Republicans’ claim to represent America’s founding principles, America was actually founded upon radically liberal ideas. The secession from the British Empire was in essence a complete rejection of conservatism.

Most Americans today believe that the primary motivation for the American Revolution was a separation from the British government. However, the revolutionaries only acquiesced to the necessity of complete separation as a last resort. Even after Lexington, Concord, and Bunker Hill, the colonists were still making attempts to settle their differences with the British king and remain in the British Empire. The primary objection of the colonists was not the British king being their executive, but the conservative, mercantilist economic system that the British government enforced. The colonists objected to the policies of corporate welfare, protectionist tariffs, a central bank, militarism, and the taxes levied upon them to support these and other aspects of the worldwide British Empire. Had the British not imposed this system upon them, they would have been content to remain British citizens.

As soon as the Revolutionary War was won, the exact same debate erupted within the new American political system. Alexander Hamilton and his Federalists wished to replicate the British mercantilist system under an American government that would closely mirror the constitutional monarchy of Great Britain. The Federalists were the party of big government, national debt, corporate welfare, militarism, and central bank inflation¹.

They wished to preserve the status-quo insofar as the role of government and the nature of civil society was concerned, which benefited a privileged, wealthy elite. They were the conservatives.

Socially, this party was the less tolerant of dissenters and tended to promote religion as useful in informing public policy. During Adams’ presidency and with the Federalists in control of Congress, the Alien and Sedition Acts were passed, making it illegal to criticize the government. These also are core conservative principles.

Their opponents, Thomas Jefferson and his Democratic-Republicans, promoted exactly the opposite ideas. They wished to radically change the role of government in society to one that was strictly limited to enforcing the non-aggression principle of liberty, most importantly economic liberty. They were opposed to corporate welfare or any other government redistribution of wealth, railed against the dangers and injustice of standing armies and the national debt, and opposed the central bank. Over and over again when asked about the role of government, Jefferson consistently applied the non-aggression principle to arrive at an unambiguous answer. Always his answer supported each individual’s right to do as he pleased as long as he did not violate the rights of others, and to keep the fruits of his labor.

Jefferson and his followers insisted upon a “wall of separation” between church and state and denounced the Alien and Sedition Acts. They advocated free speech, civil liberties, and tolerance. These are core liberal principles.

While the conservatives gained the early lead due to George Washington’s election as president and subsequent appointment of Hamilton as treasury secretary, it was not a decisive victory. Washington, who along with Vice President John Adams was certainly a more moderate Federalist, also appointed Jefferson to his cabinet as secretary of state. This set the stage for an epic battle between the two ideologies after Washington departed from politics. Adams eventually broke with Hamilton and his party, costing him the 1800 election, and resulting in a decisive liberal victory by Jefferson and his Democratic-Republicans. For the next 60 years, it was the liberal ideology of individual liberty, limited government, and economic freedom that dominated federal politics.

During this time, the conservatives constantly fought to establish bigger government, the central bank, and the other tenets of mercantilism that defined American conservatism. After the Federalist Party disbanded, they were replaced by the Whigs, a party made up of the same people and advocating the same principles as the Federalists. By this time, Jefferson’s Democratic-Republicans had also had a split, and had emerged as the Democrats.

The Whigs were never successful in achieving their goals, and eventually disbanded. However, as before, the same people and the same principles of big government were back again in 1860, this time calling themselves “Republicans.” They finally won a decisive victory in electing Abraham Lincoln to the presidency and a majority in Congress. Immediately, the Republicans began implementing their agenda of corporate welfare, protectionist tariffs, and higher taxes. Contrary to conventional wisdom, it was this economic agenda (particularly the tariff) that motivated the southern states’ secession from the Union, not a disagreement over slavery.

It is vital to understand that the Republican Party was born as the party of big government, inheriting traditional, conservative big government principles from its conservative philosophical ancestors, the Whigs and Federalists. For most of its history, it has remained true to these principles, up to and including the Bush II administration. Barry Goldwater’s more libertarian platform during the 1960’s was a divisive anomaly in the conservative movement. Its popularity was later exploited by Ronald Reagan’s administration to implement the usual conservative philosophy of bigger government, militarism, and debt.

The problem for Americans today is that there is no longer an opposition party that represents a true antithesis of these principles. By the dawn of the 20th century, the Democrats had completely abandoned their core principles of individual liberty and economic freedom and adopted a socialist, democratic ideology of popular wealth redistribution. Where the Republicans continued to promote a system which plundered the many for the benefit of the privileged few, the Democrats no longer objected to government as an instrument of plunder and now merely fought to divide up the loot differently. They were no longer truly liberal, although they perverted that word in popular culture to mean exactly the opposite of what it really means. Since then, Americans have had to choose between two parties whose ideologies are fundamentally hostile to liberty.

One week ago, Congressman Ron Paul gave a speech at the Conservative Political Action Conference (CPAC) that both mainstream Republicans and Democrats disagree with. Of course they do. It was an eloquent articulation of America’s founding principles of individual liberty and limited government. Like Jefferson, Paul consistently applied the non-aggression principle of liberty to every aspect of government, concluding that we must end our worldwide military empire, end the welfare state (both corporate and popular), and get rid of the plundering Federal Reserve.

Socially, he advocated tolerance, civil liberties, and the right of every American to express his or her opinion, even if those opinions contradicted Paul’s own most preciously-held beliefs. Despite being likely the most truly Christian person in any branch of the federal government, he never once made any allusion to religion during his entire speech, except for a purely philosophical reference to Thomas Aquinas’ principle of the just war (he alluded to this as part of his anti-war argument). Young Americans for Liberty, an affiliate of Paul’s Campaign for Liberty, invited a gay pride group to the conference, invoking a bigoted outburst from one of the younger conservative speakers just before Paul took the stage. Paul’s followers roundly booed him out of the auditorium.

Ron Paul pitched his ideas as “conservative,” but they are not. During one point in the speech, libertarian radio commentator and publisher of Liberty Pulse, Kurt Wallace, turned to me and exclaimed delightedly, “Ron Paul is a radical!” He is. Like Thomas Jefferson, Patrick Henry, and the rest of the most pro-liberty founders of the United States, Ron Paul is a radical liberal (in the true sense of the word “liberal”). He is also an extremist, in the true sense of that word. He refuses to compromise his principles regardless of the political consequences.

Average Americans elect Republicans because they believe that Republicans will give them small government, low taxes, and economic freedom. They are mistaken. What they are yearning for has nothing to do with the Republican Party or the more general ideology called “conservatism.” What they really want is radical change. They demonstrated this in giving Ron Paul a victory in the CPAC straw poll. They also proved once again that they are wiser than the political class in Washington. At this critical juncture in American history, there is only one thing that can bring America back from the brink of social, economic, and political collapse: radical, anti-conservative change from leviathan government to extreme liberty.

Source(s): ¹Thomas Dilorenzo’s books, Hamilton’s Curse and The Real Lincoln document the true roots and history of American conservatism superbly.

Tom Mullen -Independent Policy Analyst, Freelance Writer, and Business Consultant

Tom Mullen is a writer, musician, and business consultant. In January 2009, he published his first book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Tom was the opening speaker at the Revolution March in Washington, D.C. on July 12, 2008. The event was attended by over 10,000 supporters and included Thomas E. Woods, Jr., G. Edward Griffin, Naomi Wolf, and presidential candidate Ron Paul. In 2007, Tom released his first solo CD, A Glimpse of the Ether, containing 13 original compositions. Tom’s style has been described as “Powerpop with a hint of modern rock,” although there are a wide variety of styles represented in his music. During the 1990’s, he was lead singer, guitarist, and principle songwriter for The Skeptics, an alternative powerpop band that played for audiences all over the U.S., including opening shows for national acts The Tubes and 10,000 Maniacs. Tom has appeared twice on A.M. Buffalo with The Skeptics, and was also featured on Buffalo’s local music television broadcast, Nickel City Scene. Tom is originally a native of Buffalo, NY and graduate of Canisius College. He earned a Master’s Degree in English from State University of New York College at Buffalo. He now resides with his family in Tampa, FL. For more information, visit Tom’s website at www.tommullen.net.

Wire Report

Justin Logan -Associate Director of Foreign Policy Studies, The CATO Institute

Justin Logan is associate director of foreign policy studies at the Cato Institute. He is an expert on U.S. grand strategy, international relations theory, and American foreign policy. His current research focuses on the formation of U.S. grand strategy under unipolarity; the growing role of counterinsurgency (COIN) and nation building in U.S. foreign policy; and the intellectual lineage of COIN. He has authored numerous policy studies and articles on topics including international relations theory, U.S. China policy, U.S. Russia policy, stabilization and reconstruction operations, and the policy approaches to a nuclear Iran. His articles have appeared in the Harvard International Review, The National Interest, Orbis, the Foreign Service Journal, The American Conservative, Reason, The American Prospect, National Review Online, the Chicago Sun-Times and other publications. He has made regular appearances on a variety of broadcast media including the BBC, MSNBC, Fox News, Voice of America, and others. Logan holds a master’s degree in international relations from the University of Chicago and a bachelor’s degree in international relations from American University. He lives in Washington, DC.

(WIRE/CATO) – Recent war games and public statements from U.S. military commanders are reinforcing what should have been clear some time ago: A U.S. or Israeli attack against Iran would have significant but unpredictable consequences.

American and Israeli intelligence on the Iranian nuclear program is of uneven quality, but excellent, near-perfect intelligence would be required to make any strike successful. There is the real possibility that an attack would set back Iran’s progress by only a few years, while rallying Iranian citizens around the regime they seem to be increasingly challenging at present. The Iranians have a host of asymmetric capabilities, some of which they would likely use to respond to a foreign attack. This could complicate the American withdrawal from Iraq and ongoing operations in Afghanistan, and potentially cost American and Israeli (to say nothing of Iranian) lives. Most importantly, there is the prospect of an escalation spiral that could lead to a full-blown war and possibly regime change in Iran followed by chaos, potentially across the region.

Beyond immediate policy questions, though, there are general lessons for U.S. foreign policy: Military violence is a tool of limited utility. American threats can frighten weaker countries, encouraging them to seek nuclear deterrents. Willful diplomatic isolation is counterproductive. Finally, inserting ourselves as the balancer-of-first-resort in every region of the world is a costly and unnecessary strategy that discards America’s natural strategic advantages and plays to our weaknesses. The sooner these lessons are digested by the U.S. foreign policy elite, the better.

Wire Report

Dominick T. Armentano -Research Fellow, The Independent Institute/Professor Emeritus of Economics, University of Hartford

Dominick T. Armentano is a Research Fellow at The Independent Institute and Professor Emeritus of Economics at the University of Hartford. He received his Ph.D. in economics from the University of Connecticut, and he is the author of the books, Antitrust and Monopoly: Anatomy of a Policy Failure, Antitrust: The Case for Repeal, Intervention in the Petroleum Industry, and The Political Economy of William Graham Sumner. His articles have appeared in such scholarly journals as the Antitrust Bulletin, Business and Society Review, Antitrust Law and Economic Review, and Business History Review, as well as in the Financial Times, New York Times, Wall Street Journal, Reason, National Review, and Hartford Times. Professor Armentano is frequently interviewed on numerous TV and radio programs including “Economically Speaking” (PBS).

(Wire/Ind.Inst.) The economic landscape still looks pretty gloomy despite (because of?) massive increases in federal government spending by Congress. Want something else to worry about? What if your government suddenly went “belly up” on some or all of its public debt IOU’s?

Impossible you say? Not really.

When individuals or businesses have long-run expenses that exceed anticipated income—and have neither capital nor savings to fill in the gap—they often declare bankruptcy. And though it is rare, even some city governments (i.e., Vallejo, Calif.) have been plunged recently into insolvency and bankruptcy, and some state governments (with heavy pension costs) might consider it. But could it happen to our own federal government?

Most economists have always regarded this possibility as nearly unthinkable. After all, the U.S. government has never defaulted on a penny of its debt obligations in over 220 years. What this means is that when the Treasury sold government bonds, the bondholders have always received their interest payment and have always had their original principal returned at maturity. In that sense, U.S. government bonds have been 100 percent safe.

There are several ways that U.S. debt could become risky and unsafe and increase the likelihood of a general or partial default. The most obvious problem would be that Congress becomes unwilling or unable to raise taxes sufficient to pay, by law, the interest on the national debt.

So far this has not been an insurmountable problem despite the fact that in FY 2009, the interest cost to “carry” the U.S. public debt was $383 billion. (For a frame of reference, the budget for NASA last year was $19 billion.) The carrying costs by year 2019 are estimated to be more than $700 billion.

But these historical costs and projections are based on conservative guesses about deficits and interest rates. What if annual deficits now become trillion dollar holes (as they have) and rising interest rates (as are likely) force governments to pay far more to fund their increasing debt?

The analogy here would be to a credit card holder who already has debt, spends more this month than last, accumulating even more debt and, in addition, faces increasing payments every month because of higher interest rates. It becomes an impossible situation.

In the case of ever-increasing public debt, where does the new money come from to “carry” this increasing burden? Federal taxes would have to be increased to extraordinary levels; but this effort would prove self-defeating since it would likely destroy incentives and the economy to boot.

Another possible debt/default scenario, and just as depressing, is that the Federal Reserve continues to purchase more and more U.S. government debt. When the Fed purchases government securities in the “open market” it tends to push bond prices up and interest rates down, making it easier for the Treasury to market new debt and keep its funding costs low.

Unfortunately, the purchase of government securities (public debt) by the Fed leads to what economists call a “monetization” of that debt. Sellers of the securities get “new money” from the Fed and that new money normally works its way into the economy and raises prices for almost everything including interest rates.

The resulting inflation (or even the anticipation of it) also starts a vicious cycle of dollar depreciation that makes it even harder (at existing interest rates) to sell U.S. debt abroad. Again, as rates increase on more and more debt, the interest and refunding burden grows exponentially, and the once unthinkable becomes at least debatable.

Depressing as it is, however, the U.S. currency and debt/funding situation is actually in reasonable shape (as measured, say, by recent credit-default swap spreads) at least when compared to near basket-case countries such as Ireland, Spain, Portugal, and especially Greece.

A particularly dangerous example is Japan, where government debt is currently an astounding 200% of its GDP and is expected to rise to 230% by 2012. But none of this should make U.S. government bondholders at all smug since defaults on “sovereign debt” abroad could start a contagion that could swamp all boats. Stay tuned.

Copyright 2010 The Independent Institute