The power of III

Summum ius summa iniuria--More law, less justice

12 August 2011

Federal appeals court rules individual mandate for Obamacare is unconstitutional

...not exactly what you expect from the fox guarding the henhouse, but satisfying nonetheless:

Another constitutional slap in the face for the constitutional scholar. Just out from Reuters: the 11th Circuit Court of "Appeals court rules that Obama's healthcare law's individual mandate to own health insurance unconstitutional." It has thus found in favor of the 26 states that challeneged a requirement that Americans should purchase health insurance. What next: Obama takes Obamacare to the Supreme Court? And just when the summer seemed like it may finally get boring for a change...

From Reuters:
A U.S. appeals court ruled on Friday that President Barack Obama's healthcare law requiring Americans to buy healthcare insurance or face a penalty was unconstitutional, a blow to the White House.

The U.S. Appeals Court for the 11th Circuit, based in Atlanta, found that Congress exceeded its authority by requiring Americans to buy coverage, but also ruled that the rest of the wide-ranging law could remain in effect.

The legality of the so-called individual mandate, a cornerstone of the healthcare law, is widely expected to be decided by the U.S. Supreme Court. The Obama administration has defended the provision as constitutional.

hat tip to


Obamacare constitutional?

I'll show ya constitutional, ya ultramaroons!

The Tenther view of the GOP debate

verbatim post

Santorum and Obama: Two Peas in a Pod?

by Connor Boyack

George Orwell is no doubt smiling down from the heavens after witnessing last night’s Republican “debate” in Ames, Iowa. Why, you might ask? This event featured more doublethink (if not hypocrisy) than any other in recent history.

Recall that Orwell defined doublethink in 1984 as “The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them…” The Ames Debate offered several instances of this very thing, many relating directly to the Tenth Amendment.

Congresswoman Bachmann, for example, has positioned herself repeatedly as a leader in the tea party, state’s rights, and Tenth Amendment movements. Asked last night whether there was a difference between the state or federal government mandating that an individual buy a product (referring primarily to health care insurance), Bachmann responded that there was no difference. It is “unconstitutional,” she maintained, regardless of whether it is imposed by the state or federal government. She did not cite which part of the Constitution denies states this authority.
Of course, that’s because no clause in the Constitution prevents states from doing it, as Congressman Paul rightly noted in response to Bachmann’s doublethink. Paul stated that the federal government is not empowered to go in and stop states that do bad things.

Moments later, Senator Santorum jumped in to criticize both of them, claiming that their responses were indicative of “the Tenth Amendment run amok.” Said Santorum:
Michelle Bachmann says that she would go in and fight health care being imposed by states, but she wouldn’t go in and fight marriage being imposed by the states. That would be okay. We have Ron Paul saying oh, whatever the states want to do under the Tenth Amendment is fine. So if the states want to pass polygamy, that’s fine. If the states want to impose sterilization, that’s fine. No! Our country is based on moral laws, ladies and gentleman. There are things the states can’t do. Abraham Lincoln said “the states do not have the right to do wrong.” I respect the Tenth Amendment, but we are a nation that has values. We are a nation that was built on a moral enterprise. And states don’t have the right to tramp over those because of the Tenth Amendment.
Leaving aside the fact that he inaccurately portrayed Rep. Paul’s stance, it is obvious that Santorum is no Tenther, but rather a power-loving thug looking to impose his personal set of morals and values on any people living under whatever level of government he can use to accomplish his goals.  In this respect, he’s hardly different from Barack Obama at all.

Obviously, Santorum has either not read or understood the Tenth Amendment — included in the Constitution which he has on several occasions sworn an oath to support and defend — which provides for the very things he is criticizing.

States do have the ability, under the constitutional system the Founders put in place, to “do wrong.” They have the sovereign authority to decide whatever they wish on whatever matters they like, provided that this authority has not already been delegated to the federal government, or has not been explicitly denied them in the Constitution.

For as we read in the Tenth Amendment,

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

In Federalist 45, James Madison provides a well-known quote regarding the balance between federal and state powers:
The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.
Nowhere does Madison describe the Constitution as empowering the federal government to intervene in a state’s affairs when it is believed by others to be “doing wrong.” Indeed, the very purpose of the Tenth Amendment is to enable states to retain the authority and ability to do stupid things (and hopefully good things, too). For if the other states can, through the federal government, force another state to not do something they consider to be “wrong,” then what can that federal government not do?

Another common attempt used by nationalists to impose in one fell swoop what they otherwise would have to introduce in 50 different states is to authoritatively affirm, simply, that we are “a nation.” It was notably used in the last presidential cycle by Governor Huckabee who claimed that “…we are one nation. We can’t be divided. We have to be one nation under God. That means if we make a mistake, we make it as a single country.” Without qualifying these remarks with the constitutional limits placed upon the federal government — and thus describing what that “nation” can and cannot do — support is manufactured for policies that have no authority, yet which are then imposed upon everybody.

The federal government was created by the states, and unless explicitly denied the authority, states retain the ability to pass dumb laws — even horrible ones.  In fact, many already do!  It is up to the individuals in that state to fix those laws and improve their government.  It is not the right or duty of their neighbors to use the federal government to correct their behavior.

When we sit back for a moment and recognize that the federal government already claims the power to require to you to purchase health insurance, to tell you what size toilet you can have, what kind of plants you can grow in your back yard, what kind of light bulb you can use, and so much more – don’t we realize there’s already too much federal power?  For people like Obama and Santorum, it sure doesn’t seem that way.

The examples mentioned here are unfortunately not mere doublethink. They are constitutional treason. They are violations of the oath of office to support and defend that document, and they are either ignorant or intentionally destructive attempts to impose upon an entire nation of people things that should be left up to them to decide.

In doublethink, writes Orwell, “the lie always one leap ahead of the truth.” It is true that the Tenth Amendment is important, that the federal government should be restrained, and that the Constitution should be upheld. Unfortunately, most of the politicians promoting these truths are doing so in the shadow of their contradicting lies which run totally contrary to those positions.
Thus did Orwell also write that political prose is crafted “to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” Voter beware.

11 August 2011

Sci-fi cool bioneural device: Please keep it out of government hands...

...probably way too late to say that.

A hair-thin electronic patch that adheres to the skin like a temporary tattoo could transform medical sensing, computer gaming and even spy operations, according to a US study published Thursday.

The micro-electronics technology, called an epidermal electronic system (EES), was developed by an international team of researchers from the United States, China and Singapore, and is described in the journal Science.
"It's a technology that blurs the distinction between electronics and biology," said co-author John Rogers, a professor in materials science and engineering at the University of Illinois at Urbana-Champaign.

"Our goal was to develop an electronic technology that could integrate with the skin in a way that is mechanically and physiologically invisible to the user."

The patch could be used instead of bulky electrodes to monitor brain, heart and muscle tissue activity and when placed on the throat it allowed users to operate a voice-activated video game with better than 90 percent accuracy.
"This type of device might provide utility for those who suffer from certain diseases of the larynx," said Rogers. "It could also form the basis of a sub-vocal communication capability, suitable for covert or other uses."

The wireless device is nearly weightless and requires so little power it can fuel itself with miniature solar collectors or by picking up stray or transmitted electromagnetic radiation, the study said.

Less than 50-microns thick -- slightly thinner than a human hair -- the devices are able to adhere to the skin without glue or sticky material.

"Forces called van der Waals interactions dominate the adhesion at the molecular level, so the electronic tattoos adhere to the skin without any glues and stay in place for hours," said the study.

Northwestern University engineer Yonggang Huang said the patch was "as soft as the human skin."

link to Breitbart

Horrors! Children working on a farm!!

Working, learning self discipline and diligence, earning money, being outdoors, not sitting around the house on facebook or playing Nintendo DS! OMG! Poor things!

Almost like being a kid growing up in the south! Cant have that!

Link to ABCnews

Nearly two years after ABC News cameras uncovered young children toiling away in Michigan's blueberry fields, federal investigators have found yet another disturbing example of illegal use of child labor in the berry industry.

Three southwest Washington strawberry growers were fined $73,000 last week after the U.S. Department of Labor found children between the ages of six and 11 working in their strawberries fields in June.

While an exemption in the federal child labor law allows 12- and 13-year-olds to work for unlimited hours on large agricultural operations, children under the age of 12 are strictly prohibited from working under similar conditions.

Andrea Schmitt, an attorney with Columbia Legal Services in Olympia, said that the low wages made by workers in the Northwest berry industry are a key factor driving young kids into the fields. She said that berry pickers, who are usually paid a piece rate instead of an hourly wage, often struggle to make the federal minimum wage of $7.25 per hour.

The law was intended to prevent exploitation of children, on it's face.  It may also protect union jobs, the concept of minimum wage, etc.,.

But if parents and children both agree that when school is out for the summer that it is OK for kids to work in this manner for these wages, then the law becomes another stupid law: Prosecution of a victimless crime. 

Moral of the story: Let it be a personal choice of parents, no government interference, keep government out of our lives.

Notice they don't say how many kids are involved here.  Could be three in total and a story like this is written that implies an exploitative evil in our midst.

09 August 2011

UK riots: What exactly are the police for, if they cannot protect people and their property?

Good for nothing. 

Awesome, home run of a blogpost by blogger James Delingpole of The Telegraph (UK)

Verbatim post.

Glossary of British English: sharpish = right away.  twigged = realized.
(I had to look it up... ;-)... England and the USA, two peoples separated by a common language)


In the Sunday Telegraph last weekend we learned that plans to improve London’s systematically useless police force the Metropolitan Police by appointing US supercop Bill Bratton to take it over and revamp it had been blocked by a woman called Theresa May.

By spooky coincidence, a woman also called Theresa May hit the headlines again more recently when she refused to give permission for young, unarmed, outnumbered policemen struggling – and mostly failing – to contain some of the worst riots in British history to use water cannon.

Is this Theresa May person really Home Secretary of one of the world’s leading economies? And if so, please can we have a new one, sharpish?

Sure, one can see why Theresa May was so keen to be seen ruling out the use of water cannon. Tripping around her pretty little head – as I’m sure it does in the pretty little heads of most loyal Cameroons – is a mantra that goes: “Mustn’t be seen as the Nasty Party. Mustn’t be seen as the Nasty Party. Mustn’t be seen as the Nasty Party. etc”. No doubt she imagined herself getting lots of brownie points from Dave and Steve and the gang for the way she had exploited this high profile opportunity – her first occasion, really, to show what she is made of – to help detoxify the brand and show that above all else the New Conservatives care at least as much as that nice Tony Blair’s New Labour did.

Problem is, what Theresa clearly hasn’t yet twigged is that the world has changed. For those of us who never got to experience the Second World War, this is the beginning of the most dramatic, turbulent and terrifying era of our lifetime. The rules have changed; the old keep-whistling-cheerfully-and-pretend-it’s-all-going-to-go-away political bullshit is no longer valid currency.

As an example of this, just look at the response to my colleague Daniel Knowles’s blog condemning Roger Helmer MEP for his recent Tweet suggesting looters should be shot on sight. I agree with Daniel that the Tweet was ill-advised; and, thoroughly decent man that he is, I don’t believe for a second that Helmer really believes that rioters in Britain now should be shot dead. Where I diverge sharply from Daniel – as, very forcibly do most of the commenters below his blog, I’m please to note – is that the most vital lesson to be drawn from Helmer’s Tweet is that David Cameron should expel him from the Tory party.


Er, hello, Daniel. The streets of London are burning. The world economy is collapsing. Not one of the world’s leaders has shown him or herself remotely up to the task of dealing with the problems now facing us. And here you still are, stuck in the old world,  discussing how the Conservative party (if it can actually be said still to exist after its emasculation by the Cameron project) might present itself in a more favourable, snuggly, caring, inclusive, non-judgemental light.

Snuggle, snuggle. "Mustn't be seen as a nasty Party"

There are lots of reasons why we are where we are today: the takeover of the police force by politically correct Blairite apparatchiks like Ian Blair; the Macpherson report; multiculturalism; ludicrous, self-defeating slogans like (the Met’s motto) “working towards a safer London.” These are entrenched problems which will not easily be undone; they certainly require root and branch reform of the kind that an outsider like Bill Bratton is far better placed to achieve.
And I don’t believe the most of the young policemen and women now laying their necks on the line actually want to be working in the kind of PC police force we have today. I think most of them are thoroughly appalled at the way they are only allowed to perform their primary duty – protecting people and property – with one arm tied behind their back by PC regulations. I think what they want is for the kind of police force that does what most of us expect the police to do. Not to make us “safer”. But to make us actually safe.
The police can't even protect their own property, apparently.

The UK riots are another great example of what happens when a population is disarmed.  An armed society is a polite society. 

You don't have to rely on PC police to "save" you, as if they ever would.  Anyway, they'll arrive in time to scrape you off the sidewalk and write a report.  You've heard it before: when seconds count, the police will arrive in minutes.

Delingpole, by the way, is the guy who had the scoop of the internal emails of the UK climate scientists, which showed collusion and falsification of data
(so- called Climategate), which started the Global warming skepticism that has been increasing ever since. 

The Panic of 2011, and the response of our betters: You pay for it.

The crisis of the markets is as much a function of the European sovereign debt crisis as it is of American sovereign debt crisis.

The Chinese have high inflation, with 6.5% overall, and 14% for food items.  This will ripple out to the rest of the world that has Chinese products for sale.  Example: Wal-Mart. 

The market now expects the Fed to make another round of money printing, to be obfuscated under the title "QE3".  What does that mean for us mundanes?  Your dollar is worth less to buy "stuff" every time they print more of them.  Your same salary goes less and less far.  You are being squeezed without mercy for every bit of your labor to support the spending, entitlements, debt burden that you never wanted or voted for.

In Europe, things are no better for the average taxpayer:

...[European Central Bank head] Trichet just went ahead and sent the cavalry to buy another X billion worth of Irish 10 years to send a powerful message that European taxpayer capital will be used to purchase worthless paper that is cash flow bad, until morale improves.

(Emphasis added-HM)

Angry yet?

"For if the bulk of the public were really convinced of the illegitimacy of the State, if it were convinced that the State is nothing more nor less than a bandit gang writ large, then the State would soon collapse to take on no more status or breadth of existence than another Mafia gang. Hence the necessity of the State's employment of ideologists; and hence the necessity of the State's age-old alliance with the Court Intellectuals who weave the apologia for State rule." -- Murray Rothbard

08 August 2011

In our near future: Healthcare rationing. Government sucks.

For some utilizing our enlightened modern medical system, stupid federal rules are leading to delay in treatment:  

South Carolina health officials are petitioning the federal government to overhaul its "discriminatory" Medicaid rules after a local construction worker was denied coverage for breast cancer treatments because he is a man.
Raymond Johnson, 26, found out about his cancer last month. He visited the emergency room after a pain in his chest became unbearable. He already knew he had a lump there but, "being a male," assumed it was a cyst.

When the tests came back, "I found out I had cancer."
Thoughts flashed through his head, he told "Is this gonna be it for me? Am I gonna die?"
He stepped outside, he said, and "talked to the Lord." He resolved to do what had to be done to deal with the disease.
But when Johnson, who is uninsured, applied for Medicaid, he was swiftly rejected. The reason? He is a man.
"To me it's really dumb. ... It's not as common as a woman having breast cancer, but we do have it," Johnson said.
The state of South Carolina agrees with him. Since Johnson applied for coverage, the state Department of Health and Human Services has been in talks with federal Medicaid officials about the possibility of changing the rules. Tony Keck, director of the state health department, said in a statement that the federal position is "discriminatory" and urged the Centers for Medicare & Medicaid Services to show some flexibility.
"This is a very clear example of how overly rigid federal regulations don't serve the interests of the people we're supposed to be helping," Keck said.

article here.

The way medicine used to be in this country, before Medicare started distorting how healthcare was delivered, people paid for their care for routine visits, and carried catastrophic insurance.  Doctors worked on a sliding scale, and did some patients for free.

The healthcare insurance applicants were vetted and risk stratified for coverage by their insurance company, as insurance companies do for any other kind of insurance.  Insurance companies competed for people to be insured.  Prices for both delivery of care and for insurance were much less, and we had the best medical care in the world.  

Fast forward through Medicare, Medicaid, Hillary's health care task force, the rise of the HMO's and Kaiser Permanente models, and progressive socialist legislation by both parties, and we are on the verge of a socialized rationed healthcare system, which will eventually collapse.  

Central planning cannot efficiently allocate resources. Only the market itself can do that.
Oh, and yes, government sucks.

07 August 2011

Memphis 1878 = USA 2011; The Yellow fever economy

Most Americans' reaction to the economic mess and the Friday S & P USA credit rating downgrade:

A long but very worthwhile verbatim post from the weekend edition of by one of my favorite columnists, Gary North.

Read it all:

Financial columnists of the sky-is-sagging perspective have searched for an accurate metaphor to describe the current economy. We have all failed.
"A slow-motion train wreck" doesn't work, because train wrecks as bad as what we are facing are high-speed.
Then there is the "car without brakes." But at least the driver can take his foot off the gas pedal. Congress is accelerating.
I have promoted "the burning trestle." But, again, the engineer could put on the brakes. No such luck. Congress is accelerating.
How about "the Titanic"? That's closer to it. But there was a specific timetable available. The ship's designer knew how long the ship had. There were some lifeboats. "Women and children first!" (Actually, the boats were not all filled. If a person had leaped off the deck, he might have swum to a half-filled boat. A few did.) The male passengers knew they were doomed. They adjusted mentally to reality. There was no yelling and screaming. There was no blame-shifting, since the captain planned to go down with his ship. There was a dull acceptance of reality. That's surely not Congress.
So, I have tried once more. I have dug into American history to come up with something plausible. I fear that it is too plausible.

In early summer, 1878, telegraph reports announced that yellow fever had broken out in the Caribbean. On July 27, it reached New Orleans.
Yellow fever was a dreaded disease. When it struck a city, many thousands of residents came down with it, and thousands died. It had hit Philadelphia in 1793, with devastating effects. There is a book about this: Bring Out Your Dead.
Physicians knew in 1878 the disease's symptoms and deadly effects. They just did not know what transmitted the disease. A Cuban physician, Carlos Finley, theorized in 1881 that a variety of mosquito was to blame, but this was not proven until Walter Reed's team conducted research two decades later in the aftermath of the Spanish-American War in Cuba.
In 1878, experts knew that it was a summer disease. It always ceased when cold weather hit. They knew that it was deadly. In the 1850s, New Orleans was hit four times. About 20,000 people died. In 1873, a quarter of the residents of Shreveport, Louisiana died from it.
They also knew that it was relentless. It would spread up the Mississippi River, day by day. There was no stopping it. It had done so three times before in Memphis: in 1855, 1867, and 1873, when 2,000 people died, a fearful 40% of those who came down with it.
What were the results in 1878? When the disease hit, 25,000 people fled the city. About 17,000 people did not. Of these, 80% came down with the disease. About 5,000 died. About 80% of these were whites. This was normal. In Africa, the disease had always killed a far higher percentage of whites than Africans.

The city collapsed economically. It lost its charter in 1879. The state took over the city's finances. It took 20 years for the city to recover.
But this is not the heart of the Memphis story. The heart of the story is this: the population sat, nearly immobile, as word reached it, day by day, that the plague was on its way north.
We know the phrase, "a deer in the headlights." For a few seconds, a deer is immobilized. But then it runs. People don't. You have heard that a frog will not jump out of a pot of water if the water warms slowly to boiling temperature. It's not true. But people will stick with hopeless projects and dreams for years, only to lose everything. Few events confirm this better than Memphis in the summer of 1878.
In a fine article, "Epidemic," published in 1984 in American Heritage, the author described the two weeks leading up to the plague.

Like someone alone at midnight hearing approaching footfalls on the stairway, Memphis waited while the disease came nearer. On August 9 word came of yellow fever in Grenada, Mississippi, only a hundred miles to the south. But boosterism whistled brightly. "Keep cool!" said the Memphis Daily Appeal four days later. "Avoid patent medicines and bad whiskey! Go about your business as usual; be cheerful, and laugh as much as possible."

That paragraph has stuck in my mind for over 20 years. I have watched the debt of the United States government ratchet upward relentlessly, just as yellow fever moved up the Mississippi in 1878. The boosters – on Tout TV, The Wall Street JournalThe New York Times, and virtually all academic economists except for the Austrian School – have assured us that deficits don't matter. They have also warned us not to take patent medicine, such as a the twin ideas of a Federal budget surplus and a gold coin standard.
"Laugh as much as possible," they have assured us. "Don't worry. Be happy." Economic growth will let the government meet its obligations. No, it will not pay off the debt. The Federal debt is said to be eternal. But the Treasury will make the interest payments, keeping investors happy – rich investors.

Problem: for every dollar invested in government debt, the private sector is not funded. Capital flows to Washington and out again to the welfare-warfare state's constituencies. The government's percentage of invested funds keeps growing. But, the boosters assure us, "There is no such thing as crowding out." This is a corollary of their fundamental axiom: "There are government-supplied free lunches."
Back to Memphis. On August 13, the first yellow fever death was reported. The boosters stopped boosting. They ran. So did 25,000 others.
The word "ran" is a euphemism. They could not run. They could barely walk out. The roads were clogged with refugees.

"On any road leading out of Memphis," one survivor recalled, "could be seen a procession of wagons, piled high with beds, trunks, and small furniture, carrying, also, the women and children." The male refugees walked alongside, either despondent or excitedly shouting to each other. Boats and trains were jammed. People forced open windows and doors and fought their way aboard. "The ordinary courtesies of life were ignored," recalled John M. Keating, editor of the Daily Appeal and one of several who would write books about that appalling summer and autumn. "There was only one thought uppermost … an inexpressible terror."
Inside of ten days, some 25,000 people poured out of the city – anyone who had kinfolk or could afford to rent accommodations in places as far off as St. Louis, Louisville, and Cincinnati. Passage was neither easy nor unobstructed. Nearby towns set up quarantines, backed by gun-toting enforcement committees. Many who fled were turned back or forced to camp in the woods. A few unlucky steamboat passengers spent the whole epidemic trapped on board, refused permission to land anywhere.

This has played out in crises as far back as there are records of social crises. People sit calmly, self-assured. Then a great fear grips them at the same time. They try to get away. But the cost of getting away is high. Not everyone can escape.
So it was in Memphis. About 11,000 blacks stayed behind. Of these, fewer than a thousand died. "Virtually every one of the 6,000 white men and women still in the city fell sick, and there were 4,024 deaths – almost a 70 percent mortality rate. The number of deaths rose in September to nearly 200 per day."

The author goes on to describe hellish scenes. I shall mercifully skip over them. But this description is memorable.

Yet what left the strongest impression on some was not these grisly sights but the overpowering emptiness. Keating recalled that "an appalling gloom hung over the doomed city. At night it was silent as the grave, by day it seemed desolate as the desert. There were hours . . . as if the day of judgment was about to dawn. Not a sound was to be heard; the silence was painfully profound. Death prevailed everywhere. . . . Even the animals felt the oppression and fled from the city. Rats, cats, or dogs were not to be seen."

There were stories of heroism, of physicians and nurses and nuns who stayed behind to nurse the ill and dying, and who died for having stayed. Some 54 physicians came down with the disease – about half of those who stayed behind – and of these, 33 died. There were also stories of cowardice, drunkenness, and theft. In other words, in the crisis, people's character became clear to others. This is normal.
There was even a "prostitute with a heart of gold" story. One local madame sent her staff away and turned her house into a hospital. She served as a nurse. She died. The upper class citizens, on their return, buried her in Elmwood Cemetery, where members of the upper class were buried – and still are, a walled-in garden spot in the midst of a very poor neighborhood. (It was within walking distance of the church I attended.)
You can read the entire article. I recommend that you do.
This week, the U.S. government came to a last-minute agreement to increase the debt ceiling by at least $2.1 trillion. That is supposed to tide the government over until January 2013.
Think about this. The Federal government plans to spend at least $2.1 trillion more than it takes in over the next 17 months. This is no secret. It was the basis of the deal.
A bipartisan committee will be set up that will identify spending cuts ("no" will vote the Democrats) and tax increases ("no" will vote the Republicans).
If the committee fails to propose solutions – if! – there will be automatic cuts by the President in January 2013. Note: even if a new President is elected in 2012, Obama will preside over these allocated spending cuts. He will still be in office for three weeks.
Then, with a new Congress and maybe a new President, the Federal government will have to eat the famous S-sandwich – or else borrow more. The debt ceiling debate will come to the forefront again.
We can see where this is headed. Think of New Orleans in late July of 1878. The plague has hit. The deficit will eat into the debt ceiling, month by month. Up the mighty Mississippi of government spending will come the plague, city by city.
Obama hopes to get this issue out of the campaign in 2012. Maybe the boosters will be successful again. After all, they were successful until August 13, 1878 in Memphis.
Maybe we are farther up the banks of river than we think. (I know we are up the creek without a paddle, but that is a different metaphor.) Maybe the Federal Reserve System can keep the party going beyond 2013. But there is no early winter in this scenario. There is no day of deliverance. It's summer from now until the plague hits.
About 17 years ago, Agora Publishing invented a new advertising tool, the bookalogue. It replaced the then-fading magalogue. A bookalogue was a cheaply printed paperback book that was mass-mailed to mailing lists. It sold newsletter subscriptions.
The commercial bookalogue was modeled after the highly successful paperback book by Rear Admiral Jeremiah Denton, When Hell Was in Session (1976). That was the autobiography of Denton's years in a North Vietnamese prison. It was mass-mailed as a fund-raiser. It got him elected U.S. Senator from Alabama in 1980.
Agora's bookalogue was The Plague of the Black Debt (1994). It sold a lot of newsletter subscriptions. It also informed millions of people who read at least part of it. It was the right title. But it was premature. Here we are, 17 years later, still watching the Federal debt climb like a rocket – a booster rocket – yet with the 90-day T-bill interest rate at six-one-hundredths of a percent. That was not conceivable in 1994.
Today's boosters take comfort from the fact that national government debt is still being funded at low rates, at least outside of Greece, Portugal, and Spain. They proclaim that, in theory and in all likelihood, it will always be funded at low rates.
Boosters are everywhere. They have dominated the media throughout my lifetime. Boosterism became the favored outlook after 1945. It was appropriate back then. Social Security was not yet a source of red ink. Red ink arrived in 1977. Carter hiked FICA rates and promised that this would last until the year 2000, but the program was busted again in 1983, when Reagan and Congress raised the tax again. It is now in red-ink mode again. More money is flowing out than is flowing in. The Trust Fund is selling its IOUs back to the Treasury, and the Treasury is using money from the general fund to make up the difference.
Medicare arrived in 1965. It will bankrupt the government if it is not changed. So, it will be changed. We know when: in the midst of a monumental crisis, called "The Can Is Too Big To Kick."
If "kick the can" is not the phrase of the year for 2011, there is no justice.
The boosters know the can is growing. But, for as long as Congress can keep kicking it, they will continue to boost.
This is merely the Federal government's debt burden. There are state and local burdens. Then there is the massive debt burden of consumer debt, which must be rolled over. It is never paid off, any more than government debt is.

The boosters scream for more government spending whenever consumers slow their spending. That is the Keynesian mantra. They are dominant in the media. "Consumers must spend!" This requires more debt. The boosters recommend more consumer debt.
Consumers are willing, but their budgets are tight.
Banks are not lending. They are sitting on top of $1.2 trillion of excess reserves at the Federal Reserve.
Small businesses are not borrowing, either. Same reasons as the bankers: fear of the future.
Keynesianism is visibly failing. But Keynesianism's 75 years of unpaid bills have not come due yet. They will.
Red ink will produce yellow fever. We can see it coming up the river of Federal spending.
Anyone who pays attention can see this. The vast majority ignore it. They do what 25,000 residents of Memphis did until August 13. They sit tight. They hope for the best.
In panic, they will run for the exits. There will be few, and they will be a lot more expensive than they are today.
Agora in 1994 called this the plague of the black debt. I call it the yellow fever economy. It is the same economic problem: massive debt.
The U.S. government is a sub-prime borrower. The major credit-ratings agencies do not admit this, any more than they admitted it with respect to low-income real estate borrowers in 2007.
There were boosters in 2007. Angelo Mozilo of Countrywide Financial was a booster. Chuck Prince of Citicorp was a booster. Stanley O'Neal of Merrill Lynch was a booster. They are all gone now – very rich, but gone.
There will be other boosters who will be long gone after this strain of yellow fever has killed off the dreams of hundreds of millions of people worldwide. These boosters will not be buried in the equivalent of Elmwood Cemetery after the plague has departed. I am working on my list. You should work on yours. One name is sure: Ben Bernanke.
The news reports are clear. The yellow fever economy is coming. But most people sit tight. They listen to the boosters. "Keep cool! Avoid patent medicines and bad whiskey! Go about your business as usual; be cheerful, and laugh as much as possible."
August 6, 2011
Gary North [send him mail] is the author of Mises on Money. Visit He is also the author of a free 20-volume series, An Economic Commentary on the Bible.


Best of luck to us all: