How Much Would You Pay to Become a Sheep? 03/27/2012
 According to the Consumer Financial Protection Bureau: Total outstanding student loan debt surpassed $1 trillion late last year. Many folks blame rising tuition costs as the chief driving factor of massive student loan debt. According to the U.S. Department of Education, the inflation adjusted annual cost of undergraduate tuition, room, and board in 1980 was $7,685 and in 2010 it was $17,464. On average, tuition tends to increase about 8% per year - that means that the cost of college doubles every nine years. But why are colleges and universities charging more for tuition? Much of the credit belongs to the Department of Education, Federal grants, and government loans for college and university students. The government has taken on the role of subsidizing tuition costs, and as a result, universities are relieved from the market pressure of providing the best quality education at the lowest possible price. By the government trying to make college more affordable for everyone, they have actually driven prices through the roof while diminishing the quality of the product. They have also created incentives for students to take an obscene amount of government loans to finance their education in degrees that will do little to advance their careers or enrich their lives. I am not saying college is not valuable. It certainly can be. But for those that go to college simply because it is what the rest of the herd is doing may be fleecing themselves without knowing it. A $ A Listen to Jason's 9min podcast on education and the student loan bubble: Additional Resources: The Higher-Education Bubble Has Popped - Doug French The Student Loan Fiasco: Made in D.C. - Robert Murphy The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent - Zero Hedge "As of now, our dreams of owning a home and having a family are gone" - StudentLoanBubble.com [Mis]Educating America 2 Comments Obamacare is a Violation of Human Rights 03/21/2012
The U.S. Supreme Court will hear arguments on the constitutionality of Obamacare next week. According to a recent Rasmussen Reports poll, 56% of likely US voters favor the repeal of Obama's Healthcare Law. Some may find solace in the fact that over half support the repeal of this egregious legislation, but I find it concerning that nearly half of Americans obviously do not understand the concept of human rights. It is even more frightening that the Supreme Court will likely rule in a 5-4 decision as to whether or not Obamacare is constitutional. The ruling may very well depend on what side of the bed Justice Kennedy wakes up on that morning. Of course, over the last 200 years, the US Constitution has done little to stop the growth of the federal leviathan. Moreover, the Supreme Court has an abysmal record when it comes to upholding the restraints on government put in place by the Constitution. Setting the Constitutional arguments aside, it should be clear that Obamacare is a blatant violation of human rights and should be acknowledged as such. We may have certain responsibilities to help men and women in need, but using the force of government to coerce people into providing a service is not benevolence. It is immoral laziness. I understand that access to medical care is, in many cases, a matter of life and death. The debate around this subject carries correspondingly weighty emotional arguments. The public is bombarded with anecdotal talking points from the popular media that confound a myriad of surface-level, consequential concretes without any reference to a consistent system of ideas. Typically, the arguments around health care are framed in a manner which presupposes that it is a human right to secure some entitlement to special privilege: "Everyone has a right to affordable care. We are a rich country. We should provide health care to people who need health care." The astute reader may ask the question, Who is the "we" that must provide that care? Perhaps the question one should consider is: “Can an entitlement to a good or service produced by another really be considered a human right. Can something be a right if it necessarily implies the obligation on the part of another? To assert that medical care must be provided as a human right is a contradiction in terms. This necessarily implies that one person has a positive obligation to provide a product or service to another. The forced surrender of labor and property (whether it be forced medical care or mandatory insurance) for the benefit of another is a stark violation of human rights. Even with best intentions, central planners cannot magically create human rights by abrogating the human rights of another. Moreover, it is misleading to think of healthcare as a “system” that can be controlled and distributed to the needy by a central authority. ‘Healthcare’ is a generalized term for a very specific combination of goods and service of a scarce quantity offered by and consumed by individual humans. Health care does not just appear automatically in nature. It must be produced by someone through intense physical and mental effort. The claim that it is the role of government to ensure everyone is provided with health care or health insurance is analogous to claiming that it is the government’s role to ensure everyone has access to a car, cell phone, and color tv. Should everyone enjoy the right to these goods as well? Unfortunately, self-described Progressives today answer “yes”. Many people have come to view modern conveniences as necessities without considering what has made the increased standard of living possible. Human advancement for centuries was gradual or flat. It was a social system built on the principles of freedom and individual rights that catapulted mankind into realizing achievements past generations could not even conceptualize. Advocates of using a centralized, monopolistic instrument of coercion to force a group to work for the special privilege of another attempt to constrict the very engine that makes this debate even possible – a political/economic system that respects individual human rights. Perhaps our vision of history and human rights has been skewed by our crystal-clear 21st century LASIK eyesight…. A Celebration of Christmas and Capitalism 12/25/2011
Twenty years ago today, on the morning of December 25, 1991, Mikhail Gorbachev resigned as president of the USSR, declaring the office extinct. The Soviet flag was lowered for the last time over the Kremlin marking the end of a 70 year nightmare. Famine and fear were all too common for those lucky enough not to be part of the tens of millions murdered in the name of a collectivist utopia. It is sickening to think that this criminal experiment was adopted and implemented on such a vast scale. The USSR is one of the darkest blemishes on the canvas of human history. Its collapse should be celebrated, and we should take this time be reminded of just what evils are possible when we allow individual human beings to be sacrificed for government, or society, or "the greater good". Contrast the death and destruction of the USSR to the lively prosperity of of the USA. The extent to which societies flourish in material and moral terms is directly proportional to the degree to which free-market capitalism is adopted. Christmas in America is celebration of capitalism. As noted by Leonard Peikoff, "Christmas in America is an exuberant display of human ingenuity, capitalist productivity, and the enjoyment of life." Andrew Bernstein adds that, "Santa Claus is also a symbol of good will, and thus is the appropriate holiday symbol of America, a country that, because of its material prosperity, can inspire good will in all of its citizens." Santa Claus is an advocate for justice. He gives only to the good children that have earned it. Finally, it should be noted that Christmas is a time that can be celebrated by all: "The secular meaning of the Christmas holiday is wider than the tenets of any particular religion: it is good will toward men—a frame of mind which is not the exclusive property (though it is supposed to be part, but is a largely unobserved part) of the Christian religion. The charming aspect of Christmas is the fact that it expresses good will in a cheerful, happy, benevolent, non-sacrificial way. One says: “Merry Christmas”—not “Weep and Repent.” And the good will is expressed in a material, earthly form—by giving presents to one’s friends, or by sending them cards in token of remembrance . . . . The best aspect of Christmas is the aspect usually decried by the mystics: the fact that Christmas has been commercialized. The gift-buying . . . stimulates an enormous outpouring of ingenuity in the creation of products devoted to a single purpose: to give men pleasure. And the street decorations put up by department stores and other institutions—the Christmas trees, the winking lights, the glittering colors—provide the city with a spectacular display, which only “commercial greed” could afford to give us. One would have to be terribly depressed to resist the wonderful gaiety of that spectacle." - Ayn Rand, The Objectivist Calendar, Dec. 1976 Merry Christmas! A $ A The Best Bet is Freedom 11/09/2011
This article by Jason Riddle originally appeared in the Freeman on 11/09/2100. 
As I was watching the recent GOP debate in Las Vegas, I couldn’t help but think of the millions of people that enter the casinos expecting to beat the odds. Some do. However, most do not. There is a reason why gambling is a multibillion dollar industry. Big profits are made as relatively small amounts are lost by the masses trying to beat the system. Of course gambling may be regarded as entertainment, but the relevant feature of gambling for present purposes is that it is a zero-sum game. One person’s winnings are necessarily another’s losses. Wealth is transferred, and the house always wins so long as enough people play the game. Similarly, politics operates as a zero-sum game. Economist Robert Murphy points out that our current political system is actually a negative-sum game, but even if we could eliminate all bureaucratic waste, we cannot escape the simple truth that when an individual wins political favor, he or she only benefits at the less obvious expense of someone else. There is no such thing as a magical public fund from which political gifts spontaneously generate. No matter how noble the intention or the cause, the benevolent politician is not Santa Claus. All goods distributed by government must first be created or produced by somebody. Whatever is given must first be taken. This is true for corporate subsidies and bank bailouts, just as it is true for transfer payments made to the very poorest members of society. People by and large accept such a system because they believe they will be able to draw more in political advantage than they lose by way of political plunder. This mentality keeps the population playing the game, and like the casino, if enough people play the game, it is the political class and the politically connected that always win.... RON PAUL “PLAN TO RESTORE AMERICA” 10/17/2011
Today, Ron Paul released his Plan to Restore America. “It’s the only plan offered by a presidential candidate that actually balances the budget and begins to pay down the debt. And it’s the only plan being offered that tries to reign in the Federal Reserve and get inflation under control.” Paul’s plan does not just rearrange the status quo. Paul’s Plan to Restore America is real fundamental reform. Here is a summary of what is included: CUT SPENDING
CUT TAXES
REFORM ENTITLEMENTS
A Golden Opportunity? 09/13/2011
The United States has the largest gold reserves of any nation in the world by a significant margin. The U.S. is reported to hold about 8,133.5 metric tonnes of gold. Germany is a distant second with 3,401.0 metric tonnes of the yellow metal. Italy has 2,451.8 metric tonnes in reserve. Could nations tap into their gold reserves to ameliorate their sovereign debt woes? Let’s take a look at the numbers.  Presently, the Italian government’s annual deficit is nearly 4% of national output. In order cover this year’s budget shortfall at current spending levels, Italy would have to raise $72 billion. One way to do this might be to sell $72 billion of gold. Unfortunately, Italy’s total gold holdings are only worth about $81 billion at today’s prices. That doesn’t get the Italian government very far considering Italy’s current debt has grown to almost $2.2 trillion after years of fiscal irresponsibility. Furthermore, Italy is going to have to come up with $151.55 billion in financing from September to the end of this year just to avoid default, according to Goldman Sachs. It seems the Italian welfare state is insolvent, having spent far more than they have or will be able to generate. The facts do not bode well for the world’s eleventh largest economy looking at a mountain of debt that is over 120% of national output. The situation in the United States is not much brighter. The U.S. has 3.3 times the amount of gold as Italy, but nearly 6.6 times the amount of government debt. Sure, the U.S. has the largest gold reserves in the world, but the total amount of gold held by the United States is only worth about $270 billion at today’s prices. In other words, all of the gold held in Fort Knox and at the various U.S. mints would be enough to cover about one half the cost of Obama’s newest proposed spending bill. In fact, at today’s prices, the value of all the gold ever mined in the history of the world comes to a grand total of $5.2 trillion. That is just enough to fund the U.S. Federal government for a little over a year at current spending levels. The fact that government debt far outpaces the amount of gold reserves may be another signal that gold is undervalued relative to fiat currencies. This could actually turn out to be a golden opportunity to reduce sovereign debt. Perhaps, instead of dumping all of their gold at once to pay down debt, nations like the U.S. or Italy could actually take advantage of their large gold stocks and the public’s new appetite for gold by minting new coins of various weights and then selling them at a premium. The proceeds from the sale of new coins could be used to retire existing debt. As the new coins circulate, the public will be more accepting of gold. Increased demand will give countries like U.S and Italy a larger future income stream from selling their bullion. Some economists have argued that over-extended governments should sell their assets on the open market to pay down the massive debts they have incurred. I certainly agree. This would reduce government debt and return valuable resources taking from the private sector. Gold reserves should be included in such an auction. It is unlikely governments will sell bullion to pay debt. It is more unlikely governments will reduce spending in any meaningful way so long as it is easier for the politicians to print colorful paper tickets or make electronic entries to inflate the money supply. The chief problem is that governments do not have nearly enough real resources, actual or projected, to cover the cost of their exorbitant spending. History tells us that this age-old political game usually ends with destruction of the currency. It is unlikely the dollar or the euro will fare differently this time around as long as governments are controlling the money. A $ A  Now that we’ve had exactly one month to digest the debt ceiling debacle, followed by the S&P’s downgrade of the US government, let’s take a deep breath and consider the reality of the situation. The United States government remains very much in the midst of fiscal disaster. The debate over raising the debt ceiling for the 75th time since 1962 was a complete distraction from the real problem: Out of control government spending. The meager deficit reductions included as part of the debt ceiling deal represent a decrease from the amount of increasing government spending. This was not an overall decrease in spending. At the end of 2012, the government’s debt will have reached a total of over $16.5 trillion from its current level of $14.6 trillion. Ten years from now the U.S. government’s debt will reach $22 trillion dollars, given the most conservative projections. That is 51% higher than it is today. Today, our government officially spends about 3.4 trillion per year. In ten years, annual spending levels are projected to be 5.2 trillion per year by the CBO. Given those projections, the government has knowingly promised to put us in debt to the tune of at least $22 trillion dollars. If that is the case, why didn’t Congress just raise the debt ceiling to $22 trillion since that is what they are promising to do anyway? On August 2nd, our elected officials authorized the U.S. Treasury to borrow and spend an additional $2.4 trillion dollars over the next 15 months - conveniently, long enough to make it though the next election cycle. Clearly, the entire process of raising the debt ceiling for the 75th time since 1962 has been one of smoke and mirrors by both political parties. But raising or not raising the debt ceiling isn’t the issue. The government is going to find a way to spend the money it wants to spend. Without question, the debt ceiling has proven to be an ineffective tool to constrain out of control government spending. At best, it is an inconvenient formality and an opportunity for cheap political posturing. The evil here is not in the abuse of continuing to raise the debt ceiling; but rather in the government’s use of debt borrowing to fund spending on programs with which the government has no legitimate authority to be involved in the first place. The appetite of government cannot be quenched and will continue to consume the wealth and income of those working in the productive private sector as long as we let it. We are caught in the “iron triangle” of politicians, bureaucrats, and special interest groups. The only real solution to our government’s debt dilemma is to challenge the justifications for the size and scope of Washington’s reach over the lives the American people. The government has shown it has no plans to get its fiscal house in order. Americans should rediscover the proper role of government and to stop asking the government to do things for us that we are not willing to do ourselves. A $ A The Beauty of Liberty 08/26/2011
Today Stephan Kinsella wrote a great piece for Mises.org about a five-week online course he is offering called "Libertarian Controversies". I have taken several courses through Mises Academy and have very much enjoyed the experience. However, what captured my attention today was Kinsella's splendid articulation of the personal joys that come from championing a reason-based philosophy of life and liberty. Kinsella writes: "What could be more beautiful than the idea that we ought to respect each other's rights so we can live in peace and harmony? It's refreshing to be part of a community that has a passion for justice, freedom, and goodness — for truth, reason, and consistency. We believe society and prosperity are achievable if we simply adopt a civilized political ethic. It's a beautiful way to look at the world. Appreciating the logic of liberty and the role of property rights in the social order is enlightening, provocative, and inspiring. Our approach also provides striking analytical advantages over conventional "left" and "right" oriented political views. Leftist and rightist political thinking alike are hypocritical, inconsistent, collectivist, and contrary to economic science and human nature. They give lip service to liberty and reason but renounce it on a dime to preserve their cherished statist policies. They end up defending policies and consequences contrary to their professed values. By contrast, the libertarian perspective strives for consistency and justice. It recognizes the nonaggression principle and the important role of property rights in justice and the promotion of peace and prosperity." Well said Stephan Kinsella! A $ A Bruce Smith's 3 Principles for Lawmakers 08/24/2011
Bruce Smith (1851-1937) in Liberty and Liberalism: A Protest against the Growing Tendency toward undue Interference by the State writes: "The broad principles, then, which I should venture to lay down as guides for any one assuming the responsible position of a legislator are three in number.
All legislators should keep these principles in mind. Unfortunately, guidelines that lead with the words "the state should not" are quickly ignored by rulers and central planners. 2011 or 1931? 08/22/2011
"Credit expansion cannot increase the supply of real goods. It merely brings about a rearrangement. It diverts capital investment away from the course prescribed by the state of economic wealth and market conditions. It causes production to pursue paths which it would not follow unless the economy were to acquire an increase in material goods. As a result, the upswing lacks a solid base. It is not real prosperity. It is illusory prosperity. It did not develop from an increase in economic wealth. Rather, it arose because the credit expansion created the illusion of such an increase. Sooner or later it must become apparent that this economic situation is built on sand." - Ludwig von Mises, 1931 "To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about." F.A. Hayek, 1931 As we stand ready for the Fed to announce QE infinity, I can hear voices from history warning against this failed policy. Read more about Hayek's insights from a recent article by Jeff Tucker on mises.org: Hayek's Ghost Haunts the World | A note from A-equals-A:
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