Free kibbles

TAX AND SPEND:

The government is finally admitting Social Security and Medicare are in worse shape than it previously admitted. But they're even in worse shape than that. Social Security went into the red last year, and there is no money in any trust fund. Congress raided that and left behind a bunch of IOUs. It's already being subsidized from the general fund.

FEDERAL RESERVE:

Bernanke keeps saying he wants inflation. This chart shows he's produced it. But I think the American people feel it much more acutely than this chart shows. I don't know what is in the CPI that is pulling the numbers down. I bet it's housing prices, like people buy houses every couple of weeks. Nope, but it does include rent which is probably falling as well.

We're reached the limits of the Fed's power to inflate the economy. Despite everything its done, the economy is heading into a double dip while suffering inflation.

The Fed's escape plan, the ability to raise rates, is no longer available.

"The Fed could announce a federal funds target of 3% but the tsunami of excess reserves now out there swamps any conceivable demand, so the Fed funds rate would be guaranteed to remain stuck at zero. The target would be meaningless."

Oops. So even if Bernanke wanted to raise rates, he couldn't.

"Now, it would be possible for the Fed to raise the federal-funds rate by way of paying the banks significantly higher rates on their reserves than the current 0.25 percent. But such an action would cause banks to cease lending to the public, which would create a recession. Therefore, the Fed cannot raise rates without causing a recession."

But the double-dip is happening anyway. And we have inflation to boot. Bernanke claims these rising prices are the result of economic growth, new production, but that's impossible.

"Therefore, by definition, if emerging markets are truly growing quickly, they are creating new goods and services at a very fast rate; they are producing more commodities and other goods. Their demand for purchasing commodities is being enabled (i.e., paid for) by those other recently produced goods that are given in exchange for commodities, and whose creation lowers both domestic and international prices. And if the United States (and other Western economies) were truly growing as well, it, too, would be producing more goods, causing prices to decline. All of this increased production would cause all goods — including commodities — to fall in price, not to rise."

Another Bernanke lie exposed.

"Consider just the savings effect of printing money. People have to save for their retirement because they have to have money to live on when they're no longer working. Their current savings will not support them in the future, so they must save more, especially because prices will be higher. Suppose that today it costs a 40-year-old $45,000 a year to live. With inflation of 3 percent per year, it will cost her over $94,000 a year to live when she retires at age 65. Thus, she must save heavily in order to have an amount of savings large enough to live off each year, and still have it grow for future years of retirement (say, into her 90s, given current life expectancies) at a rate faster than she is drawing down on it. A very high growth rate is needed, especially considering that she will be taxed on all her gains.But consider an alternative scenario in which no money was printed, and that the rate of production increased at 3 percent per year. In this case, upon retirement, the living that used to cost the woman $45,000 would now cost just over $21,000. And by age 95, it would cost less than $8,500 per year — in real terms, and with nothing taxed! In that case, not only would workers not have to race against the inflation clock before and during retirement, but whatever savings they had would buy more each year."

That simple example shows how damaging inflation is to people who don't die young.

HEALTH CARE:

EU bans sale of unlicensed herbal remedies that have been used for centuries.

POLICE STATE:

Indiana Supreme Court rules mundane citizens have no right to resist unlawful entry of their home by police. The justices explicitly white-wash the Fourth Amendment:

"“We believe … a right to resist an unlawful police entry into a home is against public policy and is incompatible with modern Fourth Amendment jurisprudence,” wrote Justice Steven David. “We also find that allowing resistance unnecessarily escalates the level of violence and therefore the risk of injuries to all parties involved without preventing the arrest.”"

Bend over and take it.

WAR:

After weeks of targeting Qaddafi with air strikes, the archbishop in Tripoli claims he has been wounded and fled Tripoli. This article and another I read are careful not to blame NATO for wounding him. It turns out there was no popular uprising against Qaddafi. The revolt was engineered by the French government. That's why we never saw pictures of mass protests.

How bin Laden used couriers to send and receive email.

Taliban kill 80 Pakistan training forces in revenge for assassination of Osama bin Laden.

"A different Taliban official, however, speaking anonymously to The Washington Post, disputed his organization’s statement. The official said the attack was intended to punish the Pakistani military for a recent offensive in the Mohmand region of Pakistan’s semi-autonomous tribal belt, where the Taliban, al-Qaeda and a potpourri of other militant organizations are based. Charsadda borders the the Mohmand region."

The idea that terrorists were choosing not to attack until bin Laden was killed is ludicrous.

MISC:

Libertarians like me often talk about how government picks winners and losers. Most of the people most of the time yawn about that. Who cares, right? It's academic. The people being killed and having their homes wiped out care. There's nothing academic about killing people. The idea that central planners have to make agonizing choices is a false choice in itself. This is a problem created by central planners. People will die because of it. Others will lose all their belongings and their livelihoods because of it. This illustrates the fatal flaw of central planning, not its benefits.