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	<title>FrontPage Magazine &#187; debt</title>
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		<title>Paul Singer Is Right: Argentina Must Pay Their Debts</title>
		<link>http://www.frontpagemag.com/2014/ronn-torossian/paul-singer-is-right-argentina-must-pay-their-debts/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=paul-singer-is-right-argentina-must-pay-their-debts</link>
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		<pubDate>Thu, 16 Oct 2014 04:10:51 +0000</pubDate>
		<dc:creator><![CDATA[Ronn Torossian]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[Cristina Fernandez de Kirchner]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[loan]]></category>
		<category><![CDATA[Paul Singer]]></category>
		<category><![CDATA[repay]]></category>
		<category><![CDATA[Supreme Court]]></category>

		<guid isPermaLink="false">http://www.frontpagemag.com/?p=243112</guid>
		<description><![CDATA[An investor comes to a country's rescue -- and the government tries to make off with his money. ]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2014/10/cristina-fernandez-de-kirchner.jpg"><img class="alignleft  wp-image-243214" src="http://cdn.frontpagemag.com/wp-content/uploads/2014/10/cristina-fernandez-de-kirchner-450x337.jpg" alt="cristina-fernandez-de-kirchner" width="327" height="245" /></a>Hedge fund manager Paul Singer of Elliott Management Corporation has been involved in a high-profile dispute with the Republic of Argentina for seeking repayment of the full face value of debts acquired at a deep discount during Argentina’s financial crisis.  While the latest ruling in the United States Supreme Court rejected Argentina&#8217;s appeal of the ruling, Argentina remains in default for not repaying $539 million in interest – and remains on the hook for $1.5 billion dollars.</p>
<p>Media reports indicate that a mediator recently noted that despite repeated court rulings, Argentina still has issues. A certain logic must prevail. Winners win, and losers lose.  If one invests and wins, in the civilized world they get paid – even if they are wealthy.  If this group of Singer-led investors would have bet wrong, one can bet they wouldn’t have gotten a penny back. Hence, they must be paid. Argentina can call them any bad words they choose – from vultures to whatever else – but spell the name right on the check.</p>
<p>It is really very simple – one must pay what they agreed to. Some quotes from wise people who should be listened to on this matter:</p>
<p>“To the U.S. Government, I would say that supporting the government of a country that does not play by the rules of a true democracy does not necessarily mean support for its citizens.” &#8212; Horacio Vazquez, an Argentine holdout bondholders</p>
<p>“I love it when he (Singer) wins, because it just validates who he is as a person. He’s a fighter. He’s not going to give up. And he’s not a villain: He’s a hard-nosed businessman, that’s it, and he sticks up for what he thinks is right. More people should do that.” &#8212; Ralph DellaCamera</p>
<p>“Since the country was largely cut off from international capital markets following its default in July, the government of President Cristina Fernandez de Kirchner — never a paragon of orthodox policy making — has resorted to even more self-destructive coping measures. As the foreign currency reserves that Argentina needs to pay for imports have diminished, the government has issued new rules meant to keep dollars from leaving the country.<i>” </i>“There’s one easy way for Argentina to avert such a scenario: Settle with its holdout creditors and regain access to global capital markets.<i>” &#8211; </i>Bloomberg Editorial, “<a href="http://www.bloombergview.com/articles/2014-10-05/argentina-s-contempt-for-its-citizens"><span style="color: #0433ff;">Argentina’s Contempt for Its Citizens</span></a>”</p>
<p>“After being urged to invest in our country after its historic 2001 default (which was restructured in 2005) we were told that our investments were worth pennies on the dollar, and that the government would no longer honor its contracts and commitments.” &#8212; Horacio Vazquez, an Argentine holdout bondholders</p>
<p>“He doesn’t get into fights for the sake of fighting. He believes deeply in the rule of law and that free markets and free societies depend on enforcing it.” &#8212; Daniel S. Loeb.</p>
<p>“By negotiating in good faith with its creditors and respecting the rule of law, Argentina could repair its <a href="http://www.dailymail.co.uk/news/article-2534770/Argentina-apply-1-8billion-World-Bank-loan-just-days-reveal-Britain-sends-country-2million-aid.html"><span style="color: #0433ff;">global standing</span></a> and signal a new era to much-needed foreign investors.  Such a move would be a positive first step in repairing Argentina’s wretched economy for the benefit of all its citizens.” &#8212; American Task Force On Argentina</p>
<p>“As Argentina struggles with a poor economy and the risk of default, a consensus has emerged among Argentines, business groups and ruling-party lawmakers that the government should settle a $1.5 billion debt with holdout bondholders—and do so soon….” &#8211; Wall Street Journal</p>
<p>“Imagine how much capital a country like Argentina might attract &#8211; If instead of defaulting seriatim and affecting a pose of anger toward creditors, it borrowed responsibly and honored its obligations.” &#8212; Paul Singer (2005)</p>
<p>Even this <a href="http://www.5wpr.com/"><span style="color: #0433ff;">PR Agency</span></a> owner cannot spin Argentina’s case – Was Argentina issuing bonds with no intention of paying them back?  When they got the money did they simply not intend to pay it back? Governments receive money – and investors get paid even if they end up making a ton of money.</p>
<p style="color: #272727;">It is really rather simple: investors deserve to be paid.  That’s the way the world works.</p>
<p><b>Freedom Center pamphlets now available on Kindle: </b><a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank"><b>Click here</b></a><b>. </b></p>
<p><a style="line-height: 1.5em;" href="http://horowitzfreedomcenter.us1.list-manage.com/subscribe?u=caa6f67f1482e6214d83be62d&amp;id=c761755bdf" target="_blank"><b>Subscribe</b></a><strong style="line-height: 1.5em;"> to Frontpage&#8217;s TV show, <i>The Glazov Gang</i>, and </strong><a style="line-height: 1.5em;" href="https://www.facebook.com/glazovgang" target="_blank"><b>LIKE</b></a><strong style="line-height: 1.5em;"> it on </strong><a style="line-height: 1.5em;" href="https://www.facebook.com/glazovgang" target="_blank"><b>Facebook.</b></a></p>
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		<title>The Nightmare of a Nuclear Iran &#8212; on The Glazov Gang</title>
		<link>http://www.frontpagemag.com/2014/frontpagemag-com/the-nightmare-of-a-nuclear-iran-on-the-glazov-gang/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=the-nightmare-of-a-nuclear-iran-on-the-glazov-gang</link>
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		<pubDate>Wed, 08 Oct 2014 04:28:49 +0000</pubDate>
		<dc:creator><![CDATA[Frontpagemag.com]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[The Glazov Gang]]></category>
		<category><![CDATA[danger]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[ISIS]]></category>
		<category><![CDATA[Nuclear Iran]]></category>
		<category><![CDATA[Obama]]></category>

		<guid isPermaLink="false">http://www.frontpagemag.com/?p=242652</guid>
		<description><![CDATA[And everything Obama isn’t doing about it.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2014/10/Iran_nuclear_.jpg"><img class="alignleft  wp-image-242655" src="http://cdn.frontpagemag.com/wp-content/uploads/2014/10/Iran_nuclear_.jpg" alt="Iran_nuclear_" width="274" height="205" /></a><strong>[<a href="http://horowitzfreedomcenter.us1.list-manage.com/subscribe?u=caa6f67f1482e6214d83be62d&amp;id=c761755bdf">Subscribe</a> to <em>The Glazov Gang</em> and <a href="https://www.facebook.com/glazovgang">LIKE</a> it on <a href="https://www.facebook.com/glazovgang">Facebook.]</a></strong></p>
<p>This week&#8217;s <em>Glazov Gang</em> was joined by Conservative Entrepreneur <strong>Monty Morton</strong>, who came on the show to warn us about <strong>The Nightmare of a Nuclear Iran </strong>&#8211; and everything<br />
Obama isn’t doing about it <strong>[starts at 8:20 mark]</strong>.</p>
<p>The discussion occurred within the context of <strong>Two Lethal Threats to America, </strong>in which Monty stressed two dire dangers facing the U.S., the other one being focused on in the first half of the episode:</p>
<p style="text-align: center;"><iframe src="//www.youtube.com/embed/DuMR7-ddCMQ" width="460" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<p>Don&#8217;t miss this week&#8217;s second episode with<strong> Ako Eyong</strong>, a journalist from Cameroon, West Africa, where he became a political dissident and was eventually exiled for critiquing the government. He is the author of the new novel, <a class="profileLink" href="https://www.facebook.com/pages/The-Vision-of-the-Blind-King/388021917887014" data-hovercard="/ajax/hovercard/page.php?id=388021917887014">The Vision of the Blind King</a>.</p>
<p>Ako came on the show to discuss &#8220;A Cameroon Dissident’s Love Affair With America,&#8221; discussing his appreciation of living in the U.S., his new novel, the vital importance for a nation not to abandon God, the conflict between love and fear, and much, much more:</p>
<p style="text-align: center;"><iframe src="//www.youtube.com/embed/p1PidB3U2jA" width="460" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<p style="text-align: left;"><strong>To watch previous <em>Glazov Gang</em> episodes, </strong><a href="http://jamieglazov.com/"><strong>Click Here</strong></a><strong>.</strong></p>
<p><a href="https://www.facebook.com/jamie.glazov"><strong>LIKE</strong></a><strong> Jamie Glazov’s </strong><a href="https://www.facebook.com/jamie.glazov"><strong>Fan Page</strong></a><strong> on Facebook.</strong></p>
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		<title>Two Lethal Threats to America &#8212; on The Glazov Gang</title>
		<link>http://www.frontpagemag.com/2014/frontpagemag-com/two-lethal-threats-to-america-on-the-glazov-gang/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=two-lethal-threats-to-america-on-the-glazov-gang</link>
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		<pubDate>Fri, 03 Oct 2014 04:00:04 +0000</pubDate>
		<dc:creator><![CDATA[Frontpagemag.com]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[America]]></category>
		<category><![CDATA[dangers]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[glazov gang]]></category>
		<category><![CDATA[Iran]]></category>
		<category><![CDATA[ISIS]]></category>
		<category><![CDATA[mullahs]]></category>
		<category><![CDATA[Threats]]></category>
		<category><![CDATA[U.S.]]></category>
		<category><![CDATA[warning]]></category>

		<guid isPermaLink="false">http://www.frontpagemag.com/?p=242445</guid>
		<description><![CDATA[A sobering look at two ominous dangers on the horizon. ]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2014/10/lf.jpg"><img class="alignleft  wp-image-242447" src="http://cdn.frontpagemag.com/wp-content/uploads/2014/10/lf.jpg" alt="OLYMPUS DIGITAL CAMERA" width="258" height="194" /></a><strong>[<a href="http://horowitzfreedomcenter.us1.list-manage.com/subscribe?u=caa6f67f1482e6214d83be62d&amp;id=c761755bdf">Subscribe</a> to <em>The Glazov Gang</em> and <a href="https://www.facebook.com/glazovgang">LIKE</a> it on <a href="https://www.facebook.com/glazovgang">Facebook.]</a></strong></p>
<p>This week&#8217;s <em>Glazov Gang</em> was joined by Conservative Entrepreneur <strong>Monty Morton</strong>, who came on the show to warn us about <strong>Two Lethal Threats to America:</strong></p>
<p style="text-align: center;"><iframe src="//www.youtube.com/embed/DuMR7-ddCMQ" width="460" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<p>Don&#8217;t miss this week&#8217;s second episode with<strong> Ako Eyong</strong>, a journalist from Cameroon, West Africa, where he became a political dissident and was eventually exiled for critiquing the government. He is the author of the new novel, <a class="profileLink" href="https://www.facebook.com/pages/The-Vision-of-the-Blind-King/388021917887014" data-hovercard="/ajax/hovercard/page.php?id=388021917887014">The Vision of the Blind King</a>.</p>
<p>Ako came on the show to discuss &#8220;A Cameroon Dissident’s Love Affair With America,&#8221; discussing his appreciation of living in the U.S., his new novel, the vital importance for a nation not to abandon God, the conflict between love and fear, and much, much more:</p>
<p style="text-align: center;"><iframe src="//www.youtube.com/embed/p1PidB3U2jA" width="460" height="315" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<p style="text-align: left;"><strong>To watch previous <em>Glazov Gang</em> episodes, </strong><a href="http://jamieglazov.com/"><strong>Click Here</strong></a><strong>.</strong></p>
<p><a href="https://www.facebook.com/jamie.glazov"><strong>LIKE</strong></a><strong> Jamie Glazov’s </strong><a href="https://www.facebook.com/jamie.glazov"><strong>Fan Page</strong></a><strong> on Facebook.</strong></p>
<p>&nbsp;</p>
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		<title>The Era of Spiraling Debt</title>
		<link>http://www.frontpagemag.com/2014/arnold-ahlert/the-era-of-spiraling-debt/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=the-era-of-spiraling-debt</link>
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		<pubDate>Tue, 05 Aug 2014 04:50:27 +0000</pubDate>
		<dc:creator><![CDATA[Arnold Ahlert]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[7 trillion]]></category>
		<category><![CDATA[Bush]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Federal]]></category>
		<category><![CDATA[History]]></category>
		<category><![CDATA[Obama]]></category>

		<guid isPermaLink="false">http://www.frontpagemag.com/?p=237820</guid>
		<description><![CDATA[How long will the scheme last? ]]></description>
				<content:encoded><![CDATA[<p style="color: #232323;"><a href="http://cdn.frontpagemag.com/wp-content/uploads/2014/08/Money_Black_Hole.jpg"><img class="alignleft  wp-image-237827" src="http://cdn.frontpagemag.com/wp-content/uploads/2014/08/Money_Black_Hole.jpg" alt="Money_Black_Hole" width="277" height="203" /></a>To the surprise of absolutely no one, the nation’s debt has skyrocketed during President Barack Obama’s tenure. In a little over five and a half years, the Obama administration has <a href="http://www.cnsnews.com/news/article/terence-p-jeffrey/706025967449751-federal-debt-7t-under-obama"><span style="color: #1255cc;">added</span></a> more than $7 trillion to the total, a number that represents more debt accumulation than the administrations of George Washington through Bill Clinton combined. At the close of business on July 31, the nation’s debt was $17.6 trillion, with $7.06 trillion of it accumulated since Obama was inaugurated in 2009.</p>
<p style="color: #232323;">CNS News offers some gut-wrenching perspective regarding the numbers:</p>
<blockquote>
<p style="color: #232323;">As of June, there were 115,097,000 households in the United States, according to the U.S. Census Bureau. The $17,687,136,723,410.59 in debt the federal government had accumulated as of the end of July equaled $153,671.57 per household.</p>
<p style="color: #232323;">The $7,060,259,674,497.51 in new debt that the federal government has taken on during Obama’s presidency equals $61,341.82 per household.</p>
<p style="color: #232323;">The median household income in the United States in 2012 (the latest year estimated) was $51,017. Thus, President Obama has increased the federal debt by more than the typical household’s annual income.</p>
</blockquote>
<p style="color: #232323;">There is bitter irony and hypocrisy attached to these numbers. &#8220;The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents –number 43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back&#8211; $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic,” said presidential candidate Barack Obama, at a 2008 campaign event in Fargo, ND.</p>
<p style="color: #232323;">Bush was indeed nearly as irresponsible as Obama, <a href="http://useconomy.about.com/od/usdebtanddeficit/p/US-Debt-by-President.htm"><span style="color: #1255cc;">adding</span></a> $5.849  trillion in eight years to the national IOU, an increase of 101 percent over the $5.8 trillion in debt America owed at the end of Clinton&#8217;s last budget in FY 2001.</p>
<p style="color: #232323;">Yet it is worth noting two salient facts: the <a href="http://www.cnsnews.com/image/federal-debt"><span style="color: #1255cc;">largest</span></a> accumulation of debt on Bush’s watch occurred after Democrats gained control of both houses of Congress in 2006; and the Troubled Asset Relief Program (TARP) Bush signed into law in 2008, accounting for a large part of his administration&#8217;s debt accumulation, was supported by a majority of Democrats in both the <a href="https://www.govtrack.us/congress/votes/110-2008/h681"><span style="color: #1255cc;">House</span></a> and <a href="https://www.govtrack.us/congress/votes/110-2008/s213"><span style="color: #1255cc;">Senate</span></a>, while a majority of Republicans opposed the measure. Furthermore, Democrats have had majority control of the government, including total control for the first two years of the Obama administration, for the last eight years.</p>
<p style="color: #232323;">None of this should be seen as an excuse to mitigate the economic irresponsibility wrought by Bush and his “compassionate conservative” agenda that represented nothing more than &#8220;tax-and-spend liberalism&#8221; by another name. But apparently once our current Redistributionist-in-Chief entered the Oval Office, taking out a credit card for the Bank of China in the name of our children was no longer considered irresponsible or unpatriotic.</p>
<p style="color: #232323;">Americans will never know with absolute certainty whether bailing out the banks was necessary. On the other hand, they are certain about a number of other things. They know there wasn&#8217;t a single resignation demanded from those who engineered the crisis in return for that bailout. They know the Federal Reserve policies emanating from the crisis, including multiple rounds of Quantitative Easing (QE), coupled with the Fed’s Zero Interest Rate Policy (ZIRP), have precipitated both the <a href="http://blogs.wsj.com/economics/2014/08/01/plosser-says-fed-well-behind-on-rate-setting/"><span style="color: #1255cc;">weakest recovery</span></a> since WWII, and a financial bonanza for the top 1 percent of Americans, who have <a href="http://www.washingtontimes.com/news/2014/jan/13/obama-economic-policies-fail-to-turn-trends-hurtin/?page=all"><span style="color: #1255cc;">garnered</span></a> 90 percent of the income gains since the so-called recovery began in 2009. They know the Fed’s policies were so egregious, that Andrew Huszar, who helped engineer the Central Bank&#8217;s bond-buying spree, offered up a <a href="http://online.wsj.com/news/articles/SB10001424052702303763804579183680751473884"><span style="color: #1255cc;">public apology</span></a> in the <i>Wall Street Journal</i> for &#8220;the greatest backdoor Wall Street bailout of all time.”</p>
<p style="color: #232323;">But there is something most Americans <i>don’t</i> know. In 2011, in one of the most under-the-radar financial stories in the history of the nation, Bloomberg News <a href="http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html"><span style="color: #1255cc;">reported</span></a> that the Federal Reserve made <i>$7.7 trillion</i> available to the banking industry, completely in secret. &#8220;The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day,” the article revealed. &#8220;Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.”</p>
<p style="color: #232323;">Thus while ordinary Americans struggled through the worst recession since the Great Depression, those partially responsible for it were taken care of. The other bad actor in this fiasco was the federal government itself, which turned owning a home into a de facto entitlement program, forcing the banks to offer mortgages to minority applicants with shaky credit, lest they be accused of racism and subject to the attendant federal penalties.</p>
<p style="color: #232323;">The Keynesian economists who currently run the show continue to insist all the “pump-priming” that precipitated the $7 trillion in additional debt—and counting—accrued during the Obama administration, was a necessary tradeoff for our current recovery.</p>
<p style="color: #232323;">It is a “recovery&#8221; in which 11.4 million Americans have <a href="http://news.investors.com/politics-andrew-malcolm/080414-711620-obama-new-jobs-numbers-tell-another-tale.htm?p=2"><span style="color: #1255cc;">left</span></a> the workforce since 2009, and <a href="http://www.huffingtonpost.com/2013/08/21/part-time-job-creation_n_3788365.html"><span style="color: #1255cc;">75 percent </span></a>of the jobs created last year were part-time. As of last month the part-time labor force still contained <a href="http://www.npr.org/2014/08/01/337094697/as-labor-market-advances-millions-stuck-in-part-time-jobs"><span style="color: #1255cc;">7.5 million</span></a> Americans who want full-time employment. The labor-force participation rate remains at its lowest level since 1978, and shows few signs of <a href="http://blogs.wsj.com/economics/2014/07/17/white-house-economists-see-few-labor-force-dropouts-returning/"><span style="color: #1255cc;">rebounding</span></a> any time soon. Record numbers of Americans remain on <a href="http://cnsnews.com/news/article/terence-p-jeffrey/hhs-report-percentage-americans-welfare-hits-recorded-high"><span style="color: #1255cc;">welfare</span></a> and <a href="http://cnsnews.com/news/article/10962532-us-disability-beneficiaries-exceed-population-greece"><span style="color: #1255cc;">disability</span></a>. Most of the jobs being created are low-paying and <a href="http://www.thenewamerican.com/economy/markets/item/18845-july-bls-jobs-report-the-sound-of-one-hand-clapping"><span style="color: #1255cc;">insufficient in number</span></a> to keep up with population growth. And while the <i>initial</i> estimate of GDP growth for the 2nd quarter was 4 percent, it was offset by a negative 1st quarter. Moreover, most economist expect the nation&#8217;s annual growth rate to come in at under 3 percent, &#8220;not high enough to break us out of the wage-stagnating &#8216;new normal&#8217; of the Obama era,” as the <i>New York Post’s</i> Charles Gasparino <a href="http://nypost.com/2014/08/03/obamas-hollow-economic-boasts/"><span style="color: #1255cc;">put</span></a> it.</p>
<p style="color: #232323;">Through it all, the debt keeps climbing. According to the Congressional Budget Office (CBO) the total amount of publicly-held federal debt is now 74 percent of the economy’s annual output (GDP) &#8220;a higher percentage than at any point in U.S. history except a brief period around World War II and almost twice the percentage at the end of 2008.”</p>
<p style="color: #232323;">In short, we remain on an <a href="http://reason.com/blog/2014/07/15/americas-unsustainable-long-term-debt-tr"><span style="color: #1255cc;">unsustainable</span></a> debt trajectory with no end in sight, during a flaccid economic recovery sustained only by saddling future generations of Americans with the burdens of our unconscionable economic recklessness.</p>
<p style="color: #232323;">The late Herbert Stein, chairman of the Council of Economic Advisors under Presidents Nixon and Ford, <a href="http://www.goodreads.com/quotes/467811-if-something-cannot-go-on-forever-it-will-stop"><span style="color: #1255cc;">characterized</span></a> the ultimate consequences of such recklessness. “If something cannot go on forever, it will stop,” he said. One is left to wonder whether that stoppage will be abrupt, or simply an <a href="http://money.msn.com/investing/15-disappearing-middle-class-jobs"><span style="color: #1255cc;">incremental</span></a> ratcheting down of economic expectations, along with many others that comprise the foundation of American exceptionalism. Perhaps that’s what the “fundamental transformation” of the United States is <i>really</i> all about.</p>
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		<title>Putin Robbed Blind by the Castros</title>
		<link>http://www.frontpagemag.com/2014/humberto-fontova/putin-robbed-blind-by-the-castros/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=putin-robbed-blind-by-the-castros</link>
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		<pubDate>Fri, 25 Jul 2014 04:10:31 +0000</pubDate>
		<dc:creator><![CDATA[Humberto Fontova]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
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		<description><![CDATA[Why many Cuba-watchers snickered.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2014/07/pp.jpg"><img class="alignleft  wp-image-237078" src="http://cdn.frontpagemag.com/wp-content/uploads/2014/07/pp-450x253.jpg" alt="pp" width="301" height="169" /></a>Russian president Vladimir “Teflon” Putin is on a roll—or so we’re led to believe by the media. The Russian president combines the slick machismo of James Bond, the <em>cojones</em> of George Patton and the craftiness of Cardinal Richelieu.</p>
<p>Actually, in his dealings with Cuba, Putin looks more like Barney Fife. We’re not accustomed to seeing Mr Macho-Cool Vladimir Putin made an international jackass. But many Cuba-watchers snickered as the hapless Russian President met with the Castro brothers on July 11th and “wrote off” their $32 billion debt to the Soviet Union.</p>
<p>“That old thing? I never liked it anyway,” Cuba-watchers easily imagine Putin hissing through gritted teeth. &#8220;We will provide support to our Cuban friends to overcome the illegal blockade of Cuba,&#8221; is what Putin actually hissed for the record.</p>
<p>Vladimir Putin rose to the rank of Lieut. Colonel in an organization that tortured and murdered at roughly TWICE the rate of the Nazi SS. So his offense at the “illegal” U.S. embargo of a KGB-founded, terror-sponsoring regime should provoke only chortling and snorting. Instead it’s probably causing a fit of the vapors at the State Dept. and in faculty lounges nationwide.</p>
<p>Not that Putin left Cuba completely empty-handed. Instead the Russians reclaimed the Evil Empire’s largest foreign spying base, located in Lourdes just south of Havana. The Soviets built this complex&#8211; capable of electronic spying on everything from the U.S. Military’s Central and Southern command to NASA facilities&#8211; in 1967 and manned it until 2001. That year financial problems and pressure from the U.S. forced the Russians to close and abandon it. Interestingly it was (then) Russian President Vladimir Putin <a href="http://www.capitolhillcubans.com/2014/07/russia-set-to-reopen-military.html">who felt compelled to lock it up and scurry out.</a></p>
<p>This re-colonization by the Russians of a spy base on our very borders is obviously important, but surely a true Russian Richelieu could have reclaimed the base for less than $32 billion, especially with an Obama in the White House.</p>
<p>Putin’s visit to the colonial outpost his “old” outfit (the KGB) helped convert from a vibrant capitalist nation swamped with European immigrants into a vast sewer, slum and prison that repels even impoverished Haitians disgusted most Cuban dissidents. The loathing of most Cubans (including many communists) for <a href="http://www.hfontova.com/che.html">Che Guevara</a> owed much to Guevara&#8217;s groupie-like devotion to the Soviets who infested Cuba and roundly repelled almost all Cubans.</p>
<p>Putin’s fleecing by the Castro brothers provides more proof (if we actually needed any) that rarely in modern history has any item of U.S. foreign policy triumphed as patently (or hilariously) as the so-called U.S. embargo of Castro’s Stalinist kleptocracy. Here’s a glittering gem amidst the rubble of so much recent U.S. foreign policy.</p>
<p>Actually the Castros stuck it to Russia years ago, claiming they owed only an outfit named The Soviet Union, which no longer existed&#8211;so neither did this outfit’s invoices. Putin, faced with an offer he couldn’t refuse, simply ratified the rooking. The Castros stuck it to Mexico just last year, when its state development Bank Bancomex wrote off almost $500 million Cuba owed them from 15 years back. The Castros stuck it to Europe back in 1986, defaulting on most of their debt to the Paris Club. Fifteen years later the Castros stuck it to French taxpayers again for $175 million.</p>
<p>In 2011 the Castros stuck it even to their old “friends” Nelson Mandela’s South Africa. “The Cuban regime has a long track record of failing to pay back our loans,” lamented South Africa’s Deputy Minister of Trade &amp; Industry as he <a href="http://www.amazon.com/Longest-Romance-Mainstream-Media-Castro/dp/1594036675/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1376276049&amp;sr=1-1&amp;keywords=the+longest+romance+humberto+fontova">wrote off almost 2 billion Rand in Cuban debt.</a></p>
<p>In sharp contrast, thanks to the so-called U.S. embargo of Cuba, the U.S. taxpayer remains unfleeced (at least at the hands of the Castros,) even after almost $4 billion in trade over the past dozen years with Cuba, the world’s most notorious deadbeat. “Wanna trade?” says the current version of the U.S. embargo. “No <em>problemo, </em>Mr Castro<em>.</em> Cash up front, buddy. The American taxpayer will NOT extend you credit. <em>Comprende</em>?</p>
<p>Enacted by the Bush team in 2001 this cash-up-front policy has kept the U.S. taxpayer snickering on the sidelines, much as we snickered at Oliver Douglas dealings with Mr Haney or Steven Spielberg and Larry King’s with Bernie Madoff.</p>
<p>“The problem with Socialism,” famously quipped Margaret Thatcher, “is that you eventually run out of other peoples’ money.” True enough. But when the communist Castros run out of one sugar-daddy’s money, there’s always another suitor waiting in line. From the Soviets to the Europeans to the Mexicans to the Venezuelans, etc. the Castro brothers—unlike, say, Bernie Madoff—possess a singular talent for keeping their scam running longer than the Energizer Bunny. One born every minute, Mr P.T. Barnum? Ask the Castro brothers. They’ll tell you that ten are born every second.</p>
<p>Alas, an extremely well-funded campaign to include us among P.T Barnum’s cherished customers (i.e. lift the Cuba embargo) is building steam in Washington. Fascinatingly, “libertarians”&#8211; those self-described defenders of the U.S. taxpayer, those self-described champions of American sovereignty and pocket books against snooty, sneaky and predatory supranational cabals and elites—these very libertarians now serve as an echo-chamber for David Rockefeller’s Council on Foreign Relations and George Soros’ Open Society Foundation, along with The Trilateral Commission , the Davos Groups, the United Nations, The Arca Foundation, former Fed Chairman Paul Volcker, The Ford Foundation, a KGB Lieut Colonel, The Brookings Institute, and the Carnegie Endowment for International Piece (founded by Soviet spy Alger Hiss.)</p>
<p>Today’s “libertarians” march arm in arm chanting the anti-Cuba embargo mantra in perfect rhyme and cadence with every socialist elitist and every secretive supranational outfit mentioned above. Bedfellows don’t get much stranger. Let’s stand back and have a look:</p>
<p>All of the above clamor for an Imperial Democratic President to further circumvent the U.S. Congress and nullify the work of legendary conservative Republican legislators Dan Burton of Indiana and Jesse Helms of North Carolina.</p>
<p>Another name for the Cuba embargo in its current form, after all, is the Helms-Burton act of 1996, sponsored by these Red-State Republicans and constitutionally voted upon and passed by U.S. legislative branch.</p>
<p>But today’s “libertarian constitutionalists” have signed on to one of David Rockefeller’s <a href="http://babalublog.com/2013/03/06/mr-chavez-you-were-no-fidel-castro/david-rockefeller-and-fidel-castro-shaking-hands/">longest-running and most cherished labors of love. </a> All the above clamor for a brazenly imperial President and disciple of Saul Alinsky to further trash the congressional work of Jesse Helms and Dan Burton (also a Tea Party stalwart until his recent retirement.) This trashing would enable U.S. taxpayers to subsidize the Communist terror-sponsoring regime that stole $7 billion from U.S. stockholders at Soviet gunpoint and came within a hair of nuking us. This nuking was barely foiled at the last second by the aghast Butcher of Budapest:</p>
<p>“What?!” Khrushchev gasped on Oct. 28th 1962, as recalled by his son Sergei. “Is he (Fidel Castro) proposing that we launch missiles from Cuba?&#8230;.But that is insane!&#8230;<em>Remove them</em> (our missiles) <em>as soon as possible!</em> Before it’s too late. <a href="http://www.amazon.com/Longest-Romance-Mainstream-Media-Castro/dp/1594036675/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1376276049&amp;sr=1-1&amp;keywords=the+longest+romance+humberto+fontova">Before something terrible happens!”</a></p>
<p>Oh, I know…I know, Camelot’s court scribes concocted a different version of why the Russian missiles left Cuba. And naturally this version went instantly viral in the MSM, Academia and Hollywood.</p>
<p>At any rate, too bad Rod Serling isn’t around. This freak- show of anti-“embargo” lobbying would make a great episode for The Twilight Zone.</p>
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		<title>The State of the Dis-Union: Preparing World Citizens</title>
		<link>http://www.frontpagemag.com/2014/mary-grabar/the-state-of-the-dis-union-preparing-world-citizens/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=the-state-of-the-dis-union-preparing-world-citizens</link>
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		<pubDate>Thu, 30 Jan 2014 05:20:46 +0000</pubDate>
		<dc:creator><![CDATA[Mary Grabar]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
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		<description><![CDATA[Reading between the lines of the president's remarks on education.]]></description>
				<content:encoded><![CDATA[<p><span style="line-height: 1.5em;"><a href="http://cdn.frontpagemag.com/wp-content/uploads/2014/01/763249ef91c88c9287c8c69d628e4beb.jpg"><img class="alignleft  wp-image-217583" alt="763249ef91c88c9287c8c69d628e4beb" src="http://cdn.frontpagemag.com/wp-content/uploads/2014/01/763249ef91c88c9287c8c69d628e4beb-450x339.jpg" width="315" height="237" /></a>There were many who had reason to be outraged by President Obama’s State of the Union address: the military whose funding has been cut, and who have been besmirched as </span><a style="line-height: 1.5em;" href="http://eaglerising.com/4382/democrat-says-military-veterans-mentally-ill/">emotionally unstable</a><span style="line-height: 1.5em;"> while they are forced to be sitting ducks in battle and then face the potentiality that the administration will </span><a style="line-height: 1.5em;" href="http://www.washingtonpost.com/world/middle_east/iraqi-airstrikes-artillery-target-militants-in-fallujah-at-least-7-dead-in-city/2014/01/26/9fcdec52-86d3-11e3-916e-e01534b1e132_story.html">abandon</a><span style="line-height: 1.5em;"> what others had died for, like Fallujah; the millions in the middle class whose health insurance has been dropped or whose premiums have doubled and who are losing jobs to illegal aliens and are insulted by the idea that a job that pays $10.10 is something to aspire to. </span></p>
<p>But I want to focus on Obama’s continued efforts to re-educate America, to re-educate her people so that they become shriveling dependents who long for a leader who will unilaterally make decisions for the masses.</p>
<p>Only such a people could believe Obama’s claim of having “a set of concrete, practical proposals to speed up growth, strengthen the middle class and build new ladders of opportunity into the middle class.”</p>
<p>Only a well-educated, independent-thinking populace could feel the chill of words regarding “congressional action.”  Conflating America with himself, Obama said, “America does not stand still, and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that&#8217;s what I&#8217;m going to do.”</p>
<p>Once again, there was discussion of government job-training programs.  (Has anyone actually gotten a job as a result?)   To prepare “tomorrow’s workforce” (and that’s all it is: a workforce, not an educated citizenry), we must guarantee “every child access to a world-class education.”</p>
<p>Translation: indoctrination into world citizenship.</p>
<p>Obama referred to one “Estiven Rodriguez,” who “couldn’t speak a word of English when he moved to New York City at age nine.”  Apparently, Rodriguez “led a march of his classmates – through a crowd of cheering parents and neighbors – from their high school to the post office, where they mailed off their college applications.  And this son of a factory worker just found out he’s going to college this fall.”  Obama referred to the army of tutors and teachers that helped him, but immigrants have done far more with only night classes, and often working two or three jobs.</p>
<p>Then, said Obama, “Five years ago, we set out to change the odds for all our kids.  We worked with lenders to reform student loans, and today, more young people are earning college degrees than ever before.”</p>
<p>There is a reason why this government wants to monopolize student loans to produce more “peace and environmental justice studies” graduates: Democrat voters.</p>
<p>Obama invoked the misleadingly named “Race to the Top” contest (really a race for stimulus funds attached to federal education standards called Common Core).  He claimed, it “has helped states raise expectations and performance.  Teachers and principals in schools from Tennessee to Washington, D.C. are making big strides in preparing students with skills for the new economy – problem solving, critical thinking, science, technology, engineering, and math.  Some of this change is hard.  It requires everything from more challenging curriculums and more demanding parents to better support for teachers and new ways to measure how well our kids think, not how well they can fill in a bubble on a test.  But it’s worth it – and it’s working.”</p>
<p>Notice how he didn’t reference Common Core, now dubbed Obamacore.  After test scores plunged and mass confusion ensued, even the <a href="http://neatoday.org/2014/01/28/new-york-teachers-union-says-no-to-common-core-standards-as-implemented/">New York NEA</a> teachers union came around to opposing Common Core. “Problem solving, critical thinking” are hallmarks of <a href="http://sfppr.org/2014/01/common-core-whats-behind-arne-duncans-race-card/">progressive educators</a>, like Linda Darling-Hammond, close pal of Bill Ayers, who has been in charge of designing one of the two Common Core <a href="http://sfppr.org/?s=mary+grabar">national tests</a>.  And what, exactly, is wrong with filling in a bubble?  It means the test-taker has to <i>know </i>something and the grader can’t give extra points for correct attitudes.</p>
<p>What, also, is the “new economy”?  Did we not need science, technology, engineering, and math in the old, twentieth-century economy?</p>
<p>By stating “It requires more challenging curriculums,” Obama admitted what Common Core proponents deny: it does change the curriculum.  These are curriculums that eliminate most history, except that which advances the U.S. as <a href="http://townhall.com/columnists/terrencemoore/2014/01/13/racebaiting-101-the-common-core-on-civil-rights-n1777289">racist</a>, sexist, homophobic, imperialistic, etc.</p>
<p>The reference to “New ways to measure how well our kids think” is not reassuring when the Department of Education <a href="http://content.govdelivery.com/accounts/USED/bulletins/96fac8">promotes</a> the idea that “educational strengths” include “social competence” and “ethnic awareness.”</p>
<p>The new standards do not involve knowing about the country’s founding or the Constitution.  Such students might understand this pre-speech message from Jon Carson of Organizing for Action:</p>
<p>“Friend &#8211;</p>
<p>“Tonight, President Obama made sure everyone knows:</p>
<p>“He&#8217;s not waiting for Congress. He&#8217;s taking action now, and he&#8217;s going to explore every method in his power to restore real opportunity for all Americans.”</p>
<p>Then he asks for a $5 donation.</p>
<p>But kindergarten is not early enough.  Said Obama, “The problem is we’re still not reaching enough kids, and we’re not reaching them in time.  That has to change.”</p>
<p>He cited “research” to justify making “high-quality pre-K available to every four year-old”: “Research shows that one of the best investments we can make in a child’s life is high-quality early education.”  Funny, how they always say “research,” but not <i>which </i>research or what the research actually says about <a href="http://news.heartland.org/editorial/2013/11/12/government-preschool-treating-cancer-band-aid">government-funded preschool</a>.</p>
<p>Nonetheless, “As a parent as well as a President, I repeat that request tonight.”</p>
<p>What if Congress doesn’t snap to and fulfill his “request”?  Well, Obama has friends: “And as Congress decides what it’s going to do, I’m going to pull together a coalition of elected officials, business leaders, and philanthropists willing to help more kids access the high-quality pre-K they need.”</p>
<p>Such “coalitions” must ensure that Obama fulfills his promises: “Last year, I also pledged to connect 99 percent of our students to high-speed broadband over the next four years.  Tonight, I can announce that with the support of the FCC and companies like Apple, Microsoft, Sprint, and Verizon, we’ve got a down payment to start connecting more than 15,000 schools and twenty million students over the next two years, without adding a dime to the deficit.”</p>
<p>Of course, Microsoft is in the “coalition” of “business leaders and philanthropists.” The Bill and Melinda Gates Foundation is the biggest funder for Common Core; all tests must be taken online.  The other companies surely appreciate the business, too.</p>
<p>Obama’s Department of Education is redesigning high schools: “We’re working to redesign high schools and partner them with colleges and employers that offer the real-world education and hands-on training that can lead directly to a job and career.”  It seems all bases for government control are being covered.  Oh, and “real-world education”?  It means being <a href="http://www.rollcall.com/issues/57_120/mary-grabar-gradgrinds-of-common-core-213672-1.html">trained</a> for a job—only.  (See my <a href="http://sfppr.org/2014/01/dumbing-down-the-nations-classrooms/">review</a> of Terrence O. Moore’s book <i>The Story-Killers</i>.)</p>
<p>The feds have not only taken over financing, but they now want to <i>rate </i>colleges.  But this is how Obama put it: “We’re shaking up our system of higher education to give parents more information, and colleges more incentives to offer better value, so that no middle-class kid is priced out of a college education.”</p>
<p>The Education Department is appealing to the youth vote by holding “summits,” inviting college “<a href="http://www.ed.gov/blog/2014/01/duncan-invites-student-feedback-on-college-access-and-affordability/">student experts</a>” to weigh in on college “accessibility” and “affordability.”  The youth experts have spoken and Obama heard: “We’re offering millions the opportunity to cap their monthly student loan payments to ten percent of their income, and I want to work with Congress to see how we can help even more Americans who feel trapped by student loan debt.”</p>
<p>The scary part came when he used himself and Michelle as examples: “The bottom line is, Michelle and I want every child to have the same chance this country gave us.  But we know our opportunity agenda won’t be complete – and too many young people entering the workforce today will see the American Dream as an empty promise – unless we do more to make sure our economy honors the dignity of work, and hard work pays off for every single American.”</p>
<p>Oh, you mean college students should write <a href="http://obamaprincetonthesis.wordpress.com/">theses</a> like Michelle Obama’s?  Can we all write “Princeton Educated Blacks and the Black Community” and investigate how “attending Princeton will likely lead to my further integration and/or assimilation into a White cultural and social structure that will only allow me to remain on the periphery of society”?</p>
<p>Education was bad enough back then.  As a result, we have her in the White House with her Columbia and Harvard educated husband.  It can only get worse when he invokes “widely shared” prosperity, calling on Americans to “toil” together, and summoning “what is best in us, with our feet planted firmly in today but our eyes cast towards tomorrow. . . .”</p>
<p><b>Freedom Center pamphlets now available on Kindle: </b><a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank"><b>Click here</b></a><b>. </b></p>
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		<title>USA: The Next Detroit</title>
		<link>http://www.frontpagemag.com/2013/porter-stansberry/usa-the-next-detroit/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=usa-the-next-detroit</link>
		<comments>http://www.frontpagemag.com/2013/porter-stansberry/usa-the-next-detroit/#comments</comments>
		<pubDate>Mon, 09 Dec 2013 05:13:35 +0000</pubDate>
		<dc:creator><![CDATA[Porter Stansberry]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[Bankruptcy]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Detroit]]></category>
		<category><![CDATA[failure]]></category>
		<category><![CDATA[Socialism]]></category>

		<guid isPermaLink="false">http://www.frontpagemag.com/?p=212659</guid>
		<description><![CDATA[A look at the biggest threats to wealth in the history of our country.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/12/detroit.png"><img class="alignleft size-full wp-image-212664" alt="detroit" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/12/detroit.png" width="350" height="307" /></a><strong>Reprinted from the<a href="http://stansberryresearch.com/products/the-s-a-digest/"> S&amp;A Digest</a>.</strong></p>
<p>One of the most important things to remember about socialism – or coercion of any kind – is it fails eventually because human beings have an innate desire for liberty and a strong need for personal property rights. In fact, the origins of government lie in the need of agricultural communities to protect themselves from violence and theft. So it is particularly ironic that in more recent times, it is government itself that has more frequently played the role of bandit.</p>
<p>When you start taxing people at extreme rates to pay for socialist &#8220;benefits,&#8221; when you start telling them which schools their children must attend, when you start giving jobs away to people based on race instead of ability… you quash human freedom, which bogs down productivity and if continued for long enough leads to social collapse.</p>
<p>I find it perplexing that only 20 years after the collapse of the Berlin Wall, the West continues to implement laws that mimic all of the failed policies of our former &#8220;communist&#8221; foes. Our current president won the election by promising to &#8220;spread the wealth around.&#8221; But… truth be told… we don&#8217;t have to look to Eastern Europe or the Soviet Union to find a society destroyed by coercion, socialism, and the overreaching power of the State. We could just look at Detroit…</p>
<p>In 1961, the last Republican mayor of Detroit lost his re-election bid to a young, intelligent Democrat, with the overwhelming support of newly organized black voters. His name was Jerome Cavanagh. The incumbent was widely considered to be corrupt (and later served 10 years in prison for tax evasion). Cavanagh, a white man, pandered to poor underclass black voters.</p>
<p>He marched with Martin Luther King down the streets of Detroit in 1963. (Of course, marching with King was the right thing to do… It&#8217;s just Cavanagh&#8217;s motives were political not moral.) He instated aggressive affirmative action policies at City Hall. And most critically, he greatly expanded the role of the government in Detroit, taking advantage of President Lyndon Johnson&#8217;s &#8220;Model Cities Program&#8221; – the first great experiment in centralized urban planning.</p>
<p>Mayor Cavanagh was the only elected official to serve on Johnson&#8217;s task force. And Detroit received widespread acclaim for its leadership in the program, which attempted to turn a nine-square-mile section of the city (with 134,000 inhabitants) into a &#8220;model city.&#8221; More than $400 million was spent trying to turn inner cities into shining new monuments to government planning. In short, the feds and Democratic city mayors were soon telling people where to live, what to build, and what businesses to open or close. In return, the people received cash, training, education, and health care.</p>
<p>The Model Cities program was a disaster for Detroit. But it did accomplish its real goal: The creation of a state-supported, Democratic political power base. The program also resulted in much higher taxes – which were easy to pitch to poor voters who didn&#8217;t have to pay them. Cavanagh pushed a new income tax through the state legislature and a &#8220;commuter tax&#8221; on city workers.</p>
<p>Unfortunately, as with all socialist programs, lots of folks simply don&#8217;t like being told what to do. Lots of folks don&#8217;t like being plundered by the government. They don&#8217;t like losing their jobs because of their race.</p>
<p>In Detroit, they didn&#8217;t like paying new, large taxes to fund a largely black and Democratic political hegemony. And so in 1966, more than 22,000 middle- and upper-class residents moved out of the city.</p>
<p>But what about the poor? As my friend Doug Casey likes to say, in the War on Poverty, the poor lost the most. In July 1967, police attempted to break up a late-night party in the middle of the new &#8220;Model City.&#8221; The scene turned into the worst race riot of the 1960s. The violence killed more than 40 people and left more than 5,000 people homeless. One of the first stores to be looted was the black-owned pharmacy.</p>
<p>The largest black-owned clothing store in the city was also burned to the ground. Cavanagh did nothing to stop the riots, fearing a large police presence would make matters worse. Five days later, Johnson sent in two divisions of paratroopers to put down the insurrection. Over the next 18 months, an additional 140,000 upper- and middle-class residents – almost all of them white – left the city.</p>
<p>And so, you might rightfully ask… after five years of centralized planning, higher taxes, and a fleeing population, what did the government decide to do with its grand experiment, its &#8220;Model City&#8221;? You&#8217;ll never guess…</p>
<p>Seeing it had accomplished nothing but failure, the government endeavored to do still more. The Model City program was expanded and enlarged by 1974&#8242;s Community Development Block Grant Program. Here again, politicians would decide which groups (and even individuals) would receive state funds for various &#8220;renewal&#8221; schemes. Later, Big Business was brought into the fold. In exchange for various concessions, the Big Three automakers &#8220;gave&#8221; $488 million to the city for use in still more redevelopment schemes in the mid-1990s.</p>
<p>What happened? Even with all their power and money, centralized planners couldn&#8217;t succeed with any of their plans. Nearly all of the upper and middle classes left Detroit. The poor fled, too. The Model City area lost 63% of its population and 45% of its housing units from the inception of the program through 1990.</p>
<p>Even today, the crisis continues. At a recent auction of nearly 9,000 seized homes and lots, less than one-fifth of the available properties sold, even with bidding starting at $500. You literally can&#8217;t give away most of the &#8220;Model City&#8221; areas today. The properties put up for sale last week represented an area the size of New York&#8217;s Central Park. Total vacant land in Detroit now occupies an area the size of Boston. Detroit properties in foreclosure have more than tripled since 2007.</p>
<p>Every single mayor of Detroit since 1961 has been a Democrat. Every single mayor of Detroit since 1974 has been black. Detroit has been a major recipient of every major social program since the early 1960s and has received hundreds of billions of dollars in government grants, loans, and programs. We now have a black, Democrat president, who is promising to do to America as a whole what his political mentors have done to Detroit.</p>
<p>Those of you with a Democratic political affiliation may think what I&#8217;ve written above is biased or false. You may think what you like. But there is no way to argue that what the government has done to Detroit is anything but a horrendous crime. You may think what I&#8217;ve written above is merely a political analysis. Perhaps so, but politicians drive macroeconomic policy. And macroeconomic policy determines key financial metrics, like the trade-weighted value of a currency and key interest rates.</p>
<p>The likelihood America will become a giant Detroit is growing – rapidly. Politicians now control the banking sector, most of the manufacturing sector (including autos), a large amount of media, and are threatening to take over health care and the production of electricity (via cap and trade rules). These are the biggest threats to wealth in the history of our country. And these threats are causing the world&#8217;s most accomplished and wealthy investors to actively short sell the United States – something that is unprecedented in my experience.</p>
<p><b>Editor&#8217;s note:</b> Yesterday, a federal bankruptcy judge granted Detroit the ability to make billions of dollars of debt disappear. A new, dangerous precedent has been set. This precedent sets the stage for other municipalities to follow suit.</p>
<p><b>Freedom Center pamphlets now available on Kindle: </b><a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank"><b>Click here</b></a><b>.   </b></p>
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		<title>Sen. Ted Cruz: Turning America Around</title>
		<link>http://www.frontpagemag.com/2013/frontpagemag-com/sen-ted-cruz-turning-america-around/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=sen-ted-cruz-turning-america-around</link>
		<comments>http://www.frontpagemag.com/2013/frontpagemag-com/sen-ted-cruz-turning-america-around/#comments</comments>
		<pubDate>Fri, 06 Dec 2013 05:43:48 +0000</pubDate>
		<dc:creator><![CDATA[Frontpagemag.com]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[Conservative]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Freedom]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Spending]]></category>
		<category><![CDATA[Ted Cruz]]></category>

		<guid isPermaLink="false">http://www.frontpagemag.com/?p=212484</guid>
		<description><![CDATA[A conservative warrior explains the path to victory at Restoration Weekend. ]]></description>
				<content:encoded><![CDATA[<p><strong>Editor’s note: Below is the video and transcript of Sen. Ted Cruz&#8217;s keynote speech at the Freedom Center&#8217;s 2013 Restoration Weekend. Restoration Weekend took place November 14th-17th at The Breakers resort in Palm Beach, Florida.</strong></p>
<p><iframe src="//player.vimeo.com/video/80239401" height="281" width="500" allowfullscreen="" frameborder="0"></iframe></p>
<p><a href="http://vimeo.com/80239401">Senator Ted Cruz</a> from <a href="http://vimeo.com/user15333690">DHFC</a> on <a href="https://vimeo.com">Vimeo</a>.</p>
<p><strong>Ted Cruz:</strong> Thank you. Wow. What a tremendous introduction. What a tremendous comparison to the Last Lion, Winston Churchill.</p>
<p>You know, I have to note &#8212; I can think of at least one person on the face of the earth who, in a tiny, tiny, tiny aspect, would agree with that comparison. And that is President Obama.</p>
<p>(Laughter)</p>
<p>Because he would, I think pretty assuredly, like to send my head back to England.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>Let me say a word about David Horowitz. David is profoundly principled. And he commits one very simple act that has incredible power over and over again. He tells the truth. Telling the truth is so rare in our modern world that it seems utterly bizarre. And yet, the truth has a powerful, powerful impact. And David is fearless. Utterly fearless.</p>
<p>You know, in Texas, we&#8217;re proud of a lot of Texans. The one Texan we&#8217;re particularly proud of is Chuck Norris. Chuck Norris is a tough guy.</p>
<p>You know, a lot of kids across this country wear Superman pajamas. Superman wears Chuck Norris pajamas.</p>
<p>(Laughter)</p>
<p>And Chuck Norris wears David Horowitz pajamas.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>Now, the night is getting late. So I&#8217;m going to make a promise to you. I&#8217;m going to try my very, very best to speak for under 21 hours.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>But you will know that I&#8217;m nearing the end if and when I begin to read &#8220;The Cat in the Hat.&#8221;</p>
<p>(Laughter)</p>
<p>Twenty-one hours is a long time. I mean, it&#8217;s really a long time. That&#8217;s almost as long as it takes to sign up on the Obamacare website.</p>
<p>(Laughter)</p>
<p>You know, I haven&#8217;t talked about Forest Gump. I think President Obama has discovered Obamacare is like a box of chocolates. You never know what you&#8217;re going to find.</p>
<p>(Laughter)</p>
<p>All of us are here tonight because we love this country. We&#8217;re here tonight because we love our kids, we love our grandkids. And we&#8217;re worried about the future. And one of the great things of being a parent is that kids, I think, have a unique ability to instill humility, frankly, whether you want it or not.</p>
<p>Couple of weeks ago, Heidi and our girls &#8212; we have two daughters, Caroline and Catherine. Caroline&#8217;s five, Catherine&#8217;s two. Just turned three. They were up in DC. And it was a Sunday afternoon, we were driving down to Mount Vernon. And we&#8217;re driving down there, and Caroline asks her little sister, Catherine, she says &#8212; Catherine, what do you want to do when you grow up? And Catherine says &#8212; I want to work in the US Senate.</p>
<p>(Laughter)</p>
<p>I want to work with Daddy. And Caroline says &#8212; oh Catherine, that&#8217;s boring.</p>
<p>(Laughter)</p>
<p>We&#8217;re going to be in a rock band. And then she throws in the zinger. She says &#8212; besides, Daddy will be dead by then.</p>
<p>(Laughter)</p>
<p>This is a true conversation. I&#8217;m sitting there, driving, going &#8212; hello, I&#8217;m right here.</p>
<p>(Laughter)</p>
<p>Frankly, I kind of wondered if maybe Caroline had been speaking with Republican leadership.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>If maybe she knew something I didn&#8217;t know.</p>
<p>These are times of big challenges in this country. And yet, I want to come with a word of encouragement. I&#8217;m incredibly optimistic for turning this country around. And I want to tell you three things that we need to do together to turn this country around.</p>
<p>Number one &#8212; champion growth and opportunity. Number two, defend American interests. And number three, empower the people.</p>
<p>Let&#8217;s start with the first one. You know, in the last four years, our economy has grown 0.9 percent a year on average. 0.9 percent. I can tell you, in the less than a year I&#8217;ve served in the Senate, every day my top priority has been bringing back economic growth, bringing back jobs. The reason is simple &#8212; because growth is foundational to every other challenge.</p>
<p>You want to turn around unemployment? You want to turn around our national debt? You want to maintain the strongest military in the world to protect our national security? You got to have growth.</p>
<p>You know, there&#8217;s only one other four-year period since World War II of less than one percent growth on average &#8212; 1979 to 1982. Coming out of the Jimmy Carter Administration, it was the same failed economic policies &#8212; out-of-control taxes, spending, and regulation. But it doesn&#8217;t work. Produced the exact same stagnation.</p>
<p>Now, President Obama is fond of saying that he inherited the worst economy in the history of the universe. Anyone here remember the 1970s?</p>
<p>(Laughter)</p>
<p>Double-digit unemployment, 22 percent interest rate, stagflation, gas lines? And yet, in 1981, a very different President came into office.</p>
<p>(Applause)</p>
<p>Ronald Reagan came into office and implemented policies the exact opposite of Barack Obama&#8217;s. Instead of jacking up taxes by $1.7 trillion, Reagan cut taxes and dramatically simplified the tax code. Instead of exploding national spending and the debt, Regan restrained the growth of spending. And instead of unleashing regulators like locusts to destroy small businesses, Reagan pulled back federal regulation. The result was some of the most incredible economic growth this country has ever seen.</p>
<p>By the fourth year of Reagan&#8217;s presidency, 1984 &#8212; anyone know what GDP growth was? 7.2 percent. 7.2. Now, what does that mean? What does that mean in a real sense? One point David makes all the time &#8212; Republicans, we talk like a bunch of accountants. We put on green eyeshades. I&#8217;ll tell you, a friend of mine who&#8217;s an accountant said &#8212; how do you tell an extroverted accountant? He looks at your shoes when he&#8217;s talking to you.</p>
<p>(Laughter)</p>
<p>Now, in the interest of all the accountants in the room, I&#8217;m obliged to tell a lawyer joke in response, which is that I don&#8217;t know if you&#8217;ve heard, a number of laboratories across the country have started using lawyers instead of rats in their experiments.</p>
<p>(Laughter)</p>
<p>This is true, this is true, this is true. But really, for two reasons. Number one, the scientists were getting too attached to the rats.</p>
<p>(Laughter)</p>
<p>And number two, there&#8217;s some things even rats won&#8217;t do.</p>
<p>(Laughter)</p>
<p>What does that growth mean? What does 7.2 percent mean? It means that if Barack Obama coming into office, inheriting the same lousy economy Ronald Reagan inherited, had implemented the same economic policies Reagan implemented, and if the same economic growth had resulted, by today, we would have an additional seven million new jobs. Seven million. That is the equivalent of taking every single person who is unemployed in 46 of the 50 states and finding a new job for every one of them.</p>
<p>That&#8217;s transformational. That&#8217;s what we need to stand for. How do you get growth back? You do what has worked every time we&#8217;ve implemented it. You do tax reform, you do regulatory reform, you unleash entrepreneurs and get the economy growing. It worked in 1980, it worked in 1960, it worked in 1920. We stand for growth.</p>
<p>Fundamental tax reform &#8212; you know, every year we spend roughly $500 billion on tax compliance? That&#8217;s about the entire budget of our military. Wasted, pure deadweight loss. Lawyers and accountants filling out government paperwork. We need to dramatically simplify the tax code. I think the best solution of all &#8212; we should abolish the IRS.</p>
<p>(Applause)</p>
<p>You look at regulatory reform. The most important regulatory reform we could do is to repeal every single word of Obamacare.</p>
<p>(Applause)</p>
<p>And let me make a point about Obamacare. Boy, it is amazing how things can change in a couple of weeks.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>Three, four weeks ago, in DC, people asked over and over again &#8212; why are you guys fighting so hard on this? Today, nobody asks that.</p>
<p>You know, a couple of weeks ago, Jay Leno came out on his show. He said &#8212; so, President Obama called me. He said &#8212; Jay, if you like your job, you can keep it.</p>
<p>(Laughter)</p>
<p>Last week on Leno, Leno came out and said &#8212; so, holiday season is coming up. Thanksgiving. You know, the first Thanksgiving, the pilgrims said to the Indians &#8212; if you like your land, you can keep it.</p>
<p>(Laughter)</p>
<p>What a powerful indication, a barometer of where this country is. Look, Obamacare is a disaster.</p>
<p>(Applause)</p>
<p>It is the biggest job-killer in this country. Millions of Americans have lost their jobs, millions of people have been forced into part-time work. Over five million people have already had their health insurance canceled.</p>
<p>Now, this compassionate President says &#8212; well, your health insurance was substandard. So now you don&#8217;t get any.</p>
<p>(Applause)</p>
<p>Thanks a lot!</p>
<p>And you know, the shoes will keep falling. One of the next steps that more and more people are going to discover is you can&#8217;t see the doctor that you&#8217;ve been seeing. We&#8217;re seeing hospital chains all over this country &#8212; Texas Oncology, one of the leading cancer providers in Texas, has just said it&#8217;s out. It&#8217;s not dealing with Obamacare at all. Visit with a cancer survivor whose doctor they suddenly can&#8217;t go to anymore.</p>
<p>One of the next steps we&#8217;re going to see this spring, since nobody is signing up for this thing &#8212; it was actually funny, &#8220;Saturday Night Live,&#8221; when they made fun of this, they made a joke saying &#8212; we designed the website for six people to sign up.</p>
<p>(Laughter)</p>
<p>And then we discovered, on the first day, six people signed up.</p>
<p>(Laughter)</p>
<p>We talk about life imitating comedy. This spring, we&#8217;re going to see premiums skyrocket. Skyrocket, as people are going to get &#8212; they&#8217;ve already been hit with higher premiums. But more is coming. And in the next stage, you&#8217;re going to see the 90 million-plus people that have employer-provided healthcare getting their healthcare dumped and getting them pushed on the exchange.</p>
<p>This thing isn&#8217;t working. And we know now that the President said &#8212; 28 times at least, he committed a flat-out deliberate willful falsehood. Now, if you read the New York Times &#8212; well, that&#8217;s your first mistake.</p>
<p>(Laughter)</p>
<p>But the New York Times Editorial Board said he misspoke.</p>
<p>(Laughter)</p>
<p>You know, there are times when you don&#8217;t need to ridicule the Left. They engage in self-parody. Which part of &#8220;if you like your health insurance plan, you can keep it, period&#8221; &#8212; that&#8217;s not misspeaking. That&#8217;s not being less than clear. That is perfectly clear, and entirely false.</p>
<p>We need to champion growth. And I&#8217;ll tell you the biggest reason we need to champion growth. Because growth is foundational to opportunity. The single biggest lie in politics is the lie that Republicans are the party of the rich. Complete and utter nonsense.</p>
<p>You know what? The rich do great with big government. Big business does great with big government. They get in bed with big government, they have armies of lobbyists and accountants and lawyers.</p>
<p>(Applause)</p>
<p>You know, the top one percent, the millions and billionaires that President Obama demagogues all the time &#8212; top one percent today earn a higher share of our national income than at any time since 1928. And everything worked out real well after &#8217;28.</p>
<p>(Laughter)</p>
<p>Who are the biggest losers under the Obama economy? Mainstream media will never tell you this. The biggest losers are the people who are struggling the most. They are the most vulnerable among us. They are young people, Hispanic, African Americans, single moms. Why is that? Because they&#8217;re the ones who are losing their jobs. They&#8217;re the ones who are pushed into part-time work. They&#8217;re the ones who are losing their health insurance.</p>
<p>Opportunity &#8212; for a long, long time, I&#8217;ve advocated what I call opportunity conservatism. That every policy we think about, we talk about, should focus like a laser on opportunity, on easing the means of ascent up the economic ladder, on how it impacts those who are struggling to achieve the American dream.</p>
<p>What the men and women in this room understand is the free-market system in the United States of America has been the greatest engine for prosperity and opportunity the world has ever seen. Why is it that millions have come from all over the world to America? Because there has been no land in the history of the world where so many people could start with nothing &#8212; and it doesn&#8217;t depend on who your daddy was, doesn&#8217;t depend on what you born with &#8212; but start with nothing and, based on your talent and perseverance, and the content of your character, achieve anything.</p>
<p>(Applause)</p>
<p>The most tragic casualty of these failed Obama economic policies is the American dream. The American dream is becoming a more and more distant reality every day for people who are struggling.</p>
<p>If you&#8217;re a single mom working a job who suddenly had your hours reduced to 29 hours a week, you can&#8217;t feed your kids on 29 hours a week. So what do you do? You get another job at 29 hours a week. Now you got two jobs at once, with two bosses at once, both of whom want you to work on Tuesday. And you&#8217;re driving from one to the other. You still don&#8217;t have healthcare. But now you have two jobs, and you see your kids even less.</p>
<p>Those are the real people who are hurting. We need to be all about opportunity, all about creating an environment where people can achieve the American dream. That&#8217;s the first thing.</p>
<p>The second thing we need to do is we need to defend American interests. Let me say something to each of you who are here, who are supporting the Horowitz Freedom Center. David and the men and women here speak out about defending our nation at a time when that is sadly uncommon. We are facing a global war, not initiated by us, but launched by radical Islamic terrorists across the globe.</p>
<p>(Applause)</p>
<p>And we have a President of the United States who seemingly cannot utter the words &#8220;radical Islamic terrorists.&#8221; You can&#8217;t fight something if you won&#8217;t even acknowledge what it is. You know, my history book may be wrong. But I don&#8217;t recall on September 11th that it was 21 ticked-off boy scouts on those planes.</p>
<p>In Texas, you look at the 14 innocent souls that were murdered at Fort Hood by Major Hasan, and this administration calls that workplace violence. That wasn&#8217;t workplace violence. That was a radical act of terrorism. And I have to say the single greatest threat to US national security right now is the threat of a nuclear Iran.</p>
<p>You know, we just saw &#8211;</p>
<p>(Applause)</p>
<p>&#8211; in the past couple of weeks, John Kerry, on behalf of the President, attempt to negotiate a deal with Iran. That was a spectacularly horrible deal. It was &#8212; let&#8217;s call off the sanctions in exchange for what? Don&#8217;t dismantle even a single centrifuge. Don&#8217;t turn over even a pound of enriched uranium. But just give us a promise that maybe, kind of sort of, you&#8217;ll slow down and not sort of do the nuclear weapons tomorrow, maybe.</p>
<p>I don&#8217;t know how many of y&#8217;all saw the video statement that Israel&#8217;s prime minister, Benjamin Netanyahu, put out. It was extraordinary. And if you haven&#8217;t watched it &#8212; it&#8217;s one thing to read it; watch it &#8212; it was incredible as he looked in the camera and said &#8212; this is a very, very bad deal.</p>
<p>Now, there are a lot of men and women in this room who have followed US-Israeli relationships very closely for a long time. It is extraordinary. It is almost without precedent for an Israeli prime minister to so explicitly, so directly call out US foreign policy. And it illustrates how spectacularly dangerous what was about to happen was. But he felt he had no choice but to speak up.</p>
<p>You know, if there&#8217;s one principle true from time immemorial, it&#8217;s that bullies and tyrants don&#8217;t respect weakness. Appeasement doesn&#8217;t work. A responsible President of the United States would stand up and say on the world stage &#8212; under no circumstances will the nation of Iran be allowed to acquire nuclear weapons capacity.</p>
<p>(Applause)</p>
<p>And we will use every available tool to prevent it from happening, including overwhelming military force.</p>
<p>(Applause)</p>
<p>Now, the reason is simple. The risk of Iran acquiring nuclear weapons capacity is utterly unacceptable. Because if they acquire it, no reasonable person would be willing to risk that they will use those weapons against the United States or against our allies, like the nation Israel.</p>
<p>You know, a lot has been written about President Rouhani, the moderate. Well, he uses Twitter, so he&#8217;s got to be okay.</p>
<p>(Laughter)</p>
<p>Mean, what utter nonsense. He&#8217;s described Israel as a wound. And his response was &#8212; well, I was taken out of context.</p>
<p>(Laughter)</p>
<p>Okay, what was the context? Give the context that explains that.</p>
<p>One of the leading generals of the Iranian Guard &#8212; his last will and testament said that he wanted on his tombstone the words &#8220;This man sought the annihilation of Israel.&#8221; Well, God has a sense of humor. So he was assassinated, many expect, perhaps by the Mossad.</p>
<p>(Applause)</p>
<p>Here&#8217;s a simple bit of advice &#8212; if somebody tells you they want to kill you, believe them.</p>
<p>(Applause)</p>
<p>When Iran refers to Israel as &#8220;the little Satan&#8221; and the United States as &#8220;the great Satan,&#8221; those are not terms of endearment.</p>
<p>(Laughter)</p>
<p>You know, one illustration of that, that ought to be spoken of much, much more, is the tragic circumstance of Pastor Saeed Abedini. I suspect most of you all are very familiar with Pastor Saeed&#8217;s situation. Was born in Iran, but he&#8217;s an American from Idaho. Went back to Iran to start an orphanage. And he was sentenced to eight years prison time for preaching his faith.</p>
<p>So many of us take for granted the incredible constitutional liberties we have here in the United States to worship God with all of our heart mind and soul. He went sent to prison for doing that. First to the Evan Prison, a terrible, terrible place. And then, just over a week ago, he was transferred from the Evan Prison to the Rajai Shahr Prison, the infamous prison where they keep their death row, they keep the worst of the worst; and they send people to be tortured and disappeared.</p>
<p>The day he was transferred happened to be the 34th anniversary of the Iranian taking of American hostages. What they call Death to America Day. Mind you, this is by the moderate President Rouhani.</p>
<p>Everyone here realizes these are perilous times. I think the safety and security of Israel has never been more in jeopardy than it is right now.</p>
<p>I&#8217;ll tell you, when the issue of the US-Israel alliance comes up &#8212; and in my view, US support for Israel should be absolute and unshakable.</p>
<p>(Applause)</p>
<p>But when our alliance comes up, many characterize the $3 billion in military aid we provide as foreign aid. I think that completely mischaracterizes the relationship. It is fundamentally a strategic partnership. A strategic partnership that yields immense national security benefits for the United States of America.</p>
<p>(Applause)</p>
<p>And there is right now a powerful illustration of that. Sadly, I think the mullahs in Iran have little to no reason to fear military reaction from the United States for continuing to develop and acquire a nuclear weapon. And as much as that may dismay every one of us, there is one Commander in Chief, and only one person who has the authority to order our military forces into combat.</p>
<p>And I will tell you, when I travel Texas, a point I make all the time that gives great comfort is if Iran gets too close to acquiring nuclear weapons capacity, I have deep confidence that Israel will act.</p>
<p>(Applause)</p>
<p>And what an incredible, incredible benefit to US national security interests for Israel to act to take out Iran&#8217;s nuclear weapon capacity.</p>
<p>(Applause)</p>
<p>Now, let&#8217;s be clear &#8212; Israel shouldn&#8217;t have to act; the United States should take care of its own problems. But I will underscore to the men and women in this room &#8212; the urgency is growing greater by the day. I think we could see a military attack within weeks or months. If that happens, the international pressure on Israel will be deafening. And I worry greatly about the response of this administration. And it will be incumbent on the men and women in this room and the men and women across this country to make clear that the United States stands with Israel. And we stand together, protecting our national security.</p>
<p>(Applause)</p>
<p>The third thing we need to do is empower the American people. If you remember nothing I said tonight, then you probably had too many glasses of wine.</p>
<p>(Laughter)</p>
<p>If you remember just one thing I said tonight, let it be this &#8212; that I am profoundly, profoundly optimistic about where we are, and that together we&#8217;re going to turn this country around.</p>
<p>You know, Harrison&#8217;s talk about the space program, and John F. Kennedy&#8217;s commitment that let us commit together we&#8217;re going to send a man to the moon, inspired me. And let me say, collectively, let us commit together today that we should send Congress to the moon.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>And the best thing is, we only need to worry about one-way travel.</p>
<p>(Laughter)</p>
<p>The answers to this country are not going to come from Washington. But the reason I am so excited is that we are seeing a new paradigm in politics. We are seeing the rise of the grass roots.</p>
<p>The Book of Ecclesiastes tells us there&#8217;s nothing new under the sun. And I think where we are right now is very, very much like the late 1970s. We had dismal economic conditions caused by failed presidential politics. You had a President in the late 1970s telling people to accept malaise. We had a President wringing his hands in impotence as our hostages languished in Iran for 444 days.</p>
<p>And yet, we saw in the late 1970s a movement, a grassroots movement, sweep this country &#8212; the Reagan Revolution &#8212; millions of men and women. A lot of the men and women in this room who bear the scars of that fight, who stood up and said there is a better way. We can get back to the free-market principles, the constitutional principles, that are the foundations of this country.</p>
<p>You know, if you look at the big fights we&#8217;ve had this year, you look back to the fight we had on guns &#8212; following the tragic shooting in Newtown, Connecticut, President Obama, instead of saying let&#8217;s go after violent criminals &#8212; and I think we ought to come down like a ton of bricks on violent criminals &#8212; but instead, he said &#8212; let&#8217;s go after the constitutional rights of law-abiding citizens.</p>
<p>And Washington, the political class, said this is unstoppable. And what happened? The American people rose up in overwhelming numbers and said &#8212; no. Protect our rights.</p>
<p>(Applause)</p>
<p>You look at what happened on immigration, where the President came out and said he supported a plan that doesn&#8217;t secure our borders and yet grants amnesty. And Washington said &#8212; this is unstoppable, you got to do it. It cannot be stopped. And you know what? The American people rose up in overwhelming numbers and said &#8212; we want our borders secured, and we don&#8217;t want amnesty.</p>
<p>(Applause)</p>
<p>And then you look at the fight over Obamacare. The fight over Obamacare, when it started months and months and months ago, it was clear that Washington had no interest in doing anything to stop Obamacare. And we saw, all across this country &#8212; we saw over two million people across this country sign a national petition at dontfundit.com and melt down the phone lines &#8212; calling and saying stand up and stop this train wreck of a law. What an incredible, breathtaking demonstration of the American people.</p>
<p>And we saw the House of Representatives stand up and stand strong and say &#8212; we&#8217;re going to fund the federal government and not fund Obamacare. Washington was shocked! Just a couple of months ago, they said it was impossible that would happen. And you know what? The House, people like Louie and Trent, stood strong and listened to the American people.</p>
<p>(Applause)</p>
<p>That new paradigm, the rise of the grass roots, terrifies Washington. Terrifies them out of their minds.</p>
<p>You know, the single biggest complaint that my colleagues raised during the whole fight? They&#8217;d pound the table and say &#8212; my constituents keep calling me!</p>
<p>(Laughter)</p>
<p>I kind of thought we worked for them. That&#8217;s changing the rules of Washington.</p>
<p>You know, one of the powerful things with Obamacare is telling human stories. We&#8217;ve launched a national website &#8212; makedclisten.org. Makedclisten.org. It&#8217;s a portal where people can go and upload their stories about Obamacare, how it&#8217;s impacted their lives, their jobs, their healthcare. You can record on an iPhone your own video. And we&#8217;re trying to help tell those stories in a very real sense.</p>
<p>Let me just close. It&#8217;s always dangerous to pause after that phrase.</p>
<p>(Laughter)</p>
<p>The terror you have at any remarks is when you say &#8220;in conclusion,&#8221; and rapturous applause bursts out.</p>
<p>(Laughter)</p>
<p>But let me just close by observing that what I&#8217;m fighting for, what you&#8217;re fighting for, what all of us are fighting for, is the same thing. Freedom is not something we read about in a book. It&#8217;s something we&#8217;ve experienced in our lives. It&#8217;s part of who we are.</p>
<p>You know, I think of my mother, Irish and Italian. Her mother was the second youngest of 17 kids. They were Irish Catholic. They didn&#8217;t know what else to do on a Saturday night.</p>
<p>(Laughter)</p>
<p>My mom became the first in her family to go to college. Got a degree in math from Rice University in 1956. Went to work at Shell as a computer programmer in the 1950s, the dawn of the computer age. My mom used to tell me all the time when I was a kid &#8212; she very deliberately didn&#8217;t learn how to type. She said &#8212; listen, it was the 1950s. I understood the world I was living in. She said &#8212; I&#8217;d be walking down the hall, and men would stop me. And they&#8217;d say &#8212; sweetheart, would you type this for me?</p>
<p>(Laughter)</p>
<p>And my mother wanted to be able to smile very, very sweetly and say &#8212; I would love to help you out, but I don&#8217;t know how to type.</p>
<p>(Applause)</p>
<p>I guess you&#8217;re going to have to use me as a computer programmer instead.</p>
<p>(Laughter)</p>
<p>And then, my dad &#8212; many of y&#8217;all have gotten to know my father.</p>
<p>(Applause)</p>
<p>As you know, he is a shy, retiring wallflower.</p>
<p>(Laughter)</p>
<p>One of my favorite reactions, David, was when he was actually on Glenn Beck. And he talked about, in Cuba, they had the Ministry of Disinformation. And he said &#8212; you know what? We have that here. It&#8217;s called the mainstream media.</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>Tell you a true story about my father that you&#8217;ll appreciate. April 15th, 2009, when the Tea Parties first started, my dad spoke in Dallas. About 20,000 people in downtown Dallas. My father stood up and said &#8212; you know, when I was a young man, I saw a young and charismatic leader come to power. And he promised hope and change. My father then described the enormous suffering and misery that Fidel Castro visited upon Cuba.</p>
<p>Now, at the end of those remarks, I posted a portion of it on my Facebook page. And some liberal journalists &#8212; although I repeat myself &#8211;</p>
<p>(Laughter)</p>
<p>&#8211; posted a story about how crazy this was &#8212; this was ridiculous to compare Barack Obama to Fidel Castro. And about 1:30 in the morning, I&#8217;m reading all of these commentators, all of these lefties, who are just going nuts about how terrible it was. I did something I&#8217;d never done before &#8212; I signed up online, using my own name, and I said &#8212; I&#8217;ve just been reading through all of these hysterical comments about my father&#8217;s remarks. I want to make one simple point &#8212; if you look at what he said, he never once mentioned the words &#8220;Barack Obama.&#8221;</p>
<p>(Laughter)</p>
<p>Now, what does it say about you that you hear what Fidel Castro did, and you immediately think &#8212; that&#8217;s got to be Barack Obama?</p>
<p>(Applause)</p>
<p>But I&#8217;ll tell you, at every stage, when I think about the challenges we face, I think about them from the perspective of being the child of an immigrant who risked everything to come here. Fifty-five years ago, when my dad fled Cuba, he&#8217;d been imprisoned, he&#8217;d been tortured. He&#8217;d been beaten almost to death. When he landed in Austin, fleeing the Batiste regime, he was 18. He couldn&#8217;t speak English, he had $100 sewn into his underwear. Michael, I don&#8217;t advise carrying money in your underwear.</p>
<p>(Laughter)</p>
<p>His first job was washing dishes, making 50 cents an hour. Why&#8217;d he get that job? Because he couldn&#8217;t speak English. You didn&#8217;t have to speak English to stick a dish under hot water.</p>
<p>He learned English quickly. His next job was as a cook. Same restaurant, better job, paid a little more. With the money he made washing dishes and cooking, he paid his way through the University of Texas.</p>
<p><strong>Unidentified Speaker:</strong> [Book 'im].</p>
<p><strong>Ted Cruz:</strong> Book &#8216;im.</p>
<p>(Laughter)</p>
<p>From there, he got a job as a teaching assistant, teaching math to undergrads. And then he got hired by IBM as a computer programmer in the early 1960s. And then he went on to start a small business, a seismic data processing company in the oil and gas business, and worked towards the American dream.</p>
<p>Now, you know what? If he doesn&#8217;t get that first job washing dishes, making 50 cents an hour, he doesn&#8217;t get the second job. Or the third job, or the fourth job. He doesn&#8217;t get to start his business. The people who are being hurt &#8212; if my father were washing dishes today, he&#8217;d been one of the people that maybe is laid off because of Obamacare. He&#8217;d be one of the people forced into part-time work because of Obamacare. He&#8217;d be one of the people losing his health insurance because of Obamacare.</p>
<p>And as much as my dad is my hero, what I find most incredible &#8212; every person in this room could walk up here right now and tell a story just like that.</p>
<p>(Applause)</p>
<p>The most fundamental DNA of what it means to be an American is we are all the children of those who risked everything for freedom. That&#8217;s what we are fighting for.</p>
<p>And I got to say, the window is short. We don&#8217;t have decades to turn this country around; we have a window right now. And the way we do it is the same way we did it in the 1970s &#8212; we energize and empower the American people to get back to free-market principles, get back to the Constitution, to get back together to that shining city on a hill that is the United States of America.</p>
<p>Thank you. And God bless.</p>
<p>(Applause)</p>
<p><b>Freedom Center pamphlets now available on Kindle: </b><a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank"><b>Click here</b></a><b>. </b></p>
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		<title>Beating Obama</title>
		<link>http://www.frontpagemag.com/2013/dgreenfield/beating-obama/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=beating-obama</link>
		<comments>http://www.frontpagemag.com/2013/dgreenfield/beating-obama/#comments</comments>
		<pubDate>Tue, 22 Oct 2013 04:56:16 +0000</pubDate>
		<dc:creator><![CDATA[Daniel Greenfield]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[defeat]]></category>
		<category><![CDATA[Obama]]></category>
		<category><![CDATA[Obamacare]]></category>
		<category><![CDATA[Tea Party]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=208071</guid>
		<description><![CDATA[There’s only one way to outmaneuver The Radical-in-Chief.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/10/obama66.jpg"><img class="alignleft  wp-image-208082" alt="obama66" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/10/obama66-417x350.jpg" width="292" height="245" /></a>Obama does many things. He prevaricates, manipulates, defrauds, abuses and usurps. But one thing that he does not do is compromise.</p>
<p>Any strategy built on forcing Obama to compromise is inherently flawed. He may occasionally throw Republicans a tiny bone to make them feel better about giving in, but only as long as his is the only plate with meat on it.</p>
<p>Obama never compromises because he has never really lost. He has been insulated from defeat by his fanaticism, his arrogance and his media… and by Republican incompetence.</p>
<p>Obama can only be beaten on his own terms. He can’t be beaten legislatively or judicially as long as he wields executive powers whose limits he refuses to accept. If Congress passes something, he can and will choose to ignore it. If the Supreme Court strikes something down, he will do it anyway.</p>
<p>That is why Justice Roberts, like so many other conservatives, blinked in a confrontation with Obama and chose to preserve the system while legalizing ObamaCare, rather than see ObamaCare implemented anyway while the system of checks and balances was trashed.</p>
<p>The Roberts mistake is the same one that Congressional Republicans have made in their games of chicken with Obama. They have chosen to preserve the system, whether it’s the political system, the economic system or any other part of the status quo, over defeating Obama.</p>
<p>In a game of chicken with a man who cares nothing for the status quo that impulse to conserve has become their fatal weakness. They may gamble, but they never gamble everything because they see themselves as custodians of a political system, a legal traditional and a national heritage.</p>
<p>Obama, who has no concern or use for any of those things, always comes to the table prepared to gamble everything. And it is hard to beat a man at a political game within a system of rules when he cares nothing for those rules.</p>
<p>There is only one way to beat Obama and that is on his own terms.</p>
<p>Obama does not see his power in legal terms. The Constitutional limits on his power mean nothing to him. Instead he sees his right to rule in terms of popular will. He isn’t afraid of being on the wrong side of the law, but he is afraid of his agenda being stranded on the wrong side of public opinion.</p>
<p>Unlike Clinton, he reacts less to polls believing correctly that his media allies can help him weather temporary unpopularity. As long as he is moving forward, then he is in control. What he fears is losing that momentum. He fears a Newt Gingrich who will sideline his agenda with a counter-agenda.</p>
<p>The rise of the Tea Party panicked Obama because suddenly there were agendas in the public eye that were not his. He was forced to pivot, briefly, to the deficit. He was forced, uncomfortably, to talk about responsible spending.</p>
<p>The ObamaCare steamroller rolled on, but it was now doomed to be unpopular. The dedicated opposition had crippled it by making it suspect. But it was less the damage to ObamaCare that worried him than the fear of losing the ability to set the public agenda. Without that power, he would have become completely impotent.</p>
<p>But the natural caution of the Republican Party reasserted itself and the lessons of the Tea Party uprising were forgotten. And those lessons were simple.</p>
<p>Obama can only be beaten in the popular arena. In his mind, he derives his power from the bully pulpit. He is a creature of the media age and popularity is his only law and the only verdict that he will accept.</p>
<p>The Republican Party is still playing this game by Washington rules while Obama is playing it by Chicago rules where the only rule is to do whatever you can get away with for as long as the people let you.</p>
<p>Obama isn’t just challenging a few laws, he is challenging whether the government has any hard limits that can’t be overcome by asserting popular will or the force of history. And the Republican Party is not only unable to answer his challenge, but is unable to even understand that it is being made.</p>
<p>The Tea Party instinctively understood Obama’s uncompromising political grammar. As do men like Ted Cruz. While the Republican Party looks for a compromise, they understand that it’s impossible.</p>
<p>This is a test of wills. Agendas are asserted. Law doesn’t matter. Passion does.</p>
<p>Most people don’t understand the inner workings of government. What they know is that they are unhappy with the state of the country and looking for someone to fight for a better life for them.</p>
<p>Instead of stepping up to the challenge, the Republican Party has become consumed with the illusory center. It is afraid of alienating anyone and so it appeals to no one. It engages in half-measures that do more damage than doing nothing would. It commits halfway to every policy and is hated by everyone.</p>
<p>The modern Tea Party, like the classical one, was fed by a sense of desperation from a middle class that sensed its property, its prosperity and its future slipping away under the boot of government. It went out prepared to gamble everything. Some of its gambles were foolish, but they were still less foolish than hoping that letting the responsible parties assemble in a room and work it all out was the answer.</p>
<p>The dirty little secret of the Republican Party is that no one wants to run it or take responsibility for it. Everyone is just biding their time until the next election and the one after that. They are waiting for the Post-Obama era when the burden of opposition will be lifted from their shoulders and they will be able to go back to business as usual.</p>
<p>That complacency is at the heart of everything that is wrong with the Republican Party. It is why it is losing. It is why it deserves to lose.</p>
<p>Obama can only be beaten with sustained opposition. Innate to his plans is the assumption that his enemies will give up and let him have his victory. When they don’t, he begins making mistakes.</p>
<p>The ObamaCare website went live in a disastrous state because he was too afraid of postponing it and letting Republicans smell weakness. The ObamaCare exchanges are more of a disaster than they had to be because dedicated conservatives never stopped challenging and questioning the law. And both of those mistakes may yet prove fatal.</p>
<p>These battles weren’t legislative. They were clashes of will and nerve. Their sustained effect was to make ObamaCare controversial and to make Obama paranoid about its image. The only thing Obama truly cares about is his popularity. It is the one thing he will defend at all costs. The Tea Party has done a good job of wearing down ObamaCare, but its real triumph will come if it succeeds in stealing enough momentum from Obama to make its own agenda into a national topic.</p>
<p>It did that briefly with the national debt. If it can do it again and in a bigger way, if it can win a popular mandate for its own issues, then it can steal Obama’s only real source of power and beat him for good.</p>
<p>*</p>
<p><em>Don&#8217;t miss <strong>Jamie Glazov&#8217;s</strong> video interview with <strong></strong> <strong>Daniel Greenfield</strong> about Obama&#8217;s Destructive Strategy, The Administration&#8217;s Brotherhood Romance, and much, much more:</em></p>
<p><iframe src="//www.youtube.com/embed/hpyoCFF-iL8" height="315" width="420" allowfullscreen="" frameborder="0"></iframe></p>
<p><b>Freedom Center pamphlets now available on Kindle: </b><a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank"><b>Click here</b></a><b>.   </b></p>
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		<title>The Real Debt Ceiling</title>
		<link>http://www.frontpagemag.com/2013/arnold-ahlert/the-real-debt-ceiling/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=the-real-debt-ceiling</link>
		<comments>http://www.frontpagemag.com/2013/arnold-ahlert/the-real-debt-ceiling/#comments</comments>
		<pubDate>Thu, 03 Oct 2013 04:35:26 +0000</pubDate>
		<dc:creator><![CDATA[Arnold Ahlert]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[16 trillion]]></category>
		<category><![CDATA[ceiling]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[National]]></category>
		<category><![CDATA[Obamacare]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=206087</guid>
		<description><![CDATA[The credit of the United States hangs by a thread.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/10/AP226751434682_620x350.jpg"><img class="alignleft  wp-image-206088" alt="AP226751434682_620x350" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/10/AP226751434682_620x350-450x334.jpg" width="270" height="200" /></a>The rollout of ObamaCare and the subsequent government shutdown have engaged the attention of millions of Americans. Unfortunately, both issues are inconsequential compared to what will likely be another battle over raising the debt ceiling. Even more unfortunately, most Americans have little grasp of the economic issues that have brought us to the precipice for the second time in two years.</p>
<p>Most Americans do know the nation is $16.7 trillion in debt, but far fewer understand the implications of such debt. In fact, precious few Americans even know which nation underwrites more of our debt than any other. The overwhelming majority believes it is either China or Japan. The overwhelming majority couldn&#8217;t be more wrong. The largest underwriter of U.S. debt is the United States of America, courtesy of the Federal Reserve.</p>
<p>The Fed&#8217;s Keynesian-economics-on-steroids buying spree is called &#8220;Quantitative Easing&#8221; (QE). It consists of spending $85 billion per month, with no end in sight. Of that total, $40 billion is <a href="http://www.forbes.com/sites/markmcsherry/2013/09/19/sp-hits-new-high-as-fed-continues-buying-bonds/">spent </a>on mortgage-backed securities and $45 billion on longer-term Treasury securities.</p>
<p>Where does the Fed get the money to buy these securities? It &#8220;prints&#8221; money to buy them. To put this in household terms, the Fed is essentially paying down one credit card&#8211;by charging it to another credit card. During the Obama administration, QE, along with Congress spending additional revenue we don&#8217;t really have, has increased the national debt by an additional $6 trillion. QE has also debased the currency, since creating more currency makes each piece of currency worth less&#8211;on the way to becoming worthless.</p>
<p>The Fed has coupled this idea with a Zero Rate Interest Policy (ZIRP), thoroughly convinced that both agendas will &#8220;stimulate&#8221; the economy, because borrowing money is cheap, and the new money has to go somewhere. That &#8220;somewhere&#8221; has been the stock market, which has been pushed to record highs as a result. Fed Chairman Ben Bernanke and his fellow Keynesians believe that pumping up the market will result in a &#8220;trickle down&#8221; effect, as those Americans who feel wealthy with regard to their stock portfolios will spend money and create new jobs. The Fed has pursued QE in one form or another for five years.</p>
<p>During those same five years, the official unemployment rate has never dipped below 7.4 percent, according to the Bureau of Labor Statistics (BLS). That number is a fraud because it fails to acknowledge that we have lowest workforce participation rate in 35 years, and BLS doesn&#8217;t count the people who have given up looking for work as unemployed. If the workforce participation rate were the same as it was just before the financial crisis hit in 2008, the unemployment rate would be <a href="http://www.newyorker.com/online/blogs/johncassidy/2013/09/why-the-real-unemployment-rate-is-nine-or-ten-per-cent.html">approximately</a> 11.3 percent.</p>
<p>Furthermore, despite the nation being in a so-called recovery since 2009, we have record numbers of Americans receiving <a href="http://www.zerohedge.com/news/2013-09-08/households-foodstamps-rise-new-record-high-more-americans-live-poverty-population-sp">food stamps</a>, record numbers <a href="http://www.thenewamerican.com/usnews/item/15399-record-number-10-9-million-americans-collecting-disability">collecting</a> disability checks, and a record number of Americans <a href="http://www.mercurynews.com/census/ci_24114574/record-number-americans-stuck-poverty">living</a> in poverty. Americans&#8217; annual household income has also declined by 4.4 percent during the <i>recovery</i>, which is worse than the 1.8 decline that occurred during the recession.</p>
<p>As for inflation, the Fed claims it is under control. Americans might argue otherwise, considering the reality that food and fuel prices have gone up substantially under this administration. Yet many of those same Americans are unaware of the reality that food and fuel prices are <a href="http://www.bankrate.com/finance/personal-finance/is-inflation-higher-than-you-think-1.aspx">not included</a> when the government calculates the inflation rate. While not counting the price of fuel <i>might</i> have some validity, since many Americans use public transportation, every American has developed a habit of eating to sustain themselves.</p>
<p>In short, the Fed&#8217;s QE approach is nothing less than disastrous.</p>
<p>And despite everything you hear from this president, his administration, and the rest of the Democratic Party that purports to care for &#8220;ordinary Americans,&#8221; aka the middle class, it&#8217;s precisely the middle class that is being squeezed. ZIRP is a so-called &#8220;one-percenter&#8217;s&#8221; dream, because it pumps up the banks and Wall Street, even as the middle class that prefers not to invest its hard-earned money in the stock market can’t get decent return on savings anywhere else. On the other end of the spectrum, the aforementioned dependency class is also getting taken care of, due to the reality that the statist party is more than willing to countenance increasing numbers of Americans on the government dole in <a href="http://www.realclearpolitics.com/articles/2013/10/01/obama_transforming_america_120170.html">return</a> for their loyalty.</p>
<p>This dual accommodation of both the financial and entitlement communities has engendered a monstrous amount of national debt, fueled by the record-setting, trillion dollar-plus annual deficits needed to pay for it. And despite the Fed&#8217;s money printing prowess, even they can&#8217;t pony up the kind of revenue necessary to underwrite the entire effort.</p>
<p>Thus we tax, and we <i>do</i> borrow from other nations.</p>
<p>On the tax side of the equation, those who pay them have done yeoman&#8217;s work. For the first 11 months of  FY2013, the federal government <a href="http://www.newsmax.com/US/tax-collection-record-figure/2013/09/17/id/526188">received</a> a record-setting $2.47 trillion in revenues. Yet they spent all of it, <i>plus</i> an additional $755 billion during the same period. Thus, on the borrowing side of the equation, we are constantly adding to our national debt, and have again &#8220;maxed out&#8221; our spending limit, reaching the so-called debt ceiling.</p>
<p>Yet even as we constantly bump up against a new debt ceiling, we continue paying interest on the debt we&#8217;ve already accumulated. In 2012, the interest on that debt <a href="http://www.politifact.com/wisconsin/statements/2013/sep/15/chris-kapanga/interest-payments-us-debt-exceeds-us-tax-revenue-w/">totaled</a> $360 billion. Like the minimum payment on a household credit card, that massive amount of spending does nothing more than maintain the debt at its present levels. Nothing is being paid down.</p>
<p>For the nation in the short term, the media-driven hysteria about the notion that America would default on paying its debt if we don&#8217;t raise the debt ceiling, is pernicious nonsense. Currently, interest payments are <a href="http://www.nationalreview.com/article/360134/real-debt-ceiling-kevin-d-williamson">running</a> about 7 percent of revenue. The worst case scenario is that the Treasury Department would be forced to prioritize where the rest of the money would be spent. Undoubtedly this would ignite a huge fight, as Congress and the administration would be forced to decide which government programs are truly important, and which, to use the jargon-du-jour, are &#8220;non-essential.&#8221;</p>
<p>Such a fight would be extremely unpleasant, but the nation would survive. Furthermore, neither party has said they are willing to default on our debt, but Republicans want concessions aimed at bringing the debt under control.</p>
<p>Why Republicans want those concessions brings us back to the Federal Reserve and their ZIRP. What the overwhelming majority of Americans don&#8217;t know is that we&#8217;re paying a <i>record low</i> interest rate of 2.4 percent just to maintain the status quo.</p>
<p>The <a href="http://www.cnbc.com/id/101062461">average</a> interest rate the Treasury paid on U.S. debt over the last 20 years is 5.7 percent. Americans might tolerate paying 7 percent of every dollar collected just for interest, but what about 10 percent, or 20 percent&#8211;or more? Not for more Social Security, Medicaid, Medicare, military, or any other government program. Just interest. Just to maintain. How many American families could sustain themselves if 20 percent of their income or more did nothing but keep their credit card debt right where it is now?</p>
<p>And 20 percent may be an optimistic number. CNBC&#8217;s Peter J. Tanous <a href="http://www.cnbc.com/id/101062461">explains</a> that just our public debt&#8211;as opposed to the money the government owes itself because the politicians have raided the Social Security &#8220;lockbox,&#8221; for example&#8211;will be $16.6 trillion in seven years, according to Congressional Budget Office (CBO) estimates. At an average interest rate of 5.7 percent, the interest payment will be about $930 billion. In 2012, the IRS collected $1.1 trillion in personal income taxes. Based on that figure, debt service would consume 85 cents of every dollar Americans pay in personal income taxes.</p>
<p>Tanous notes something else as well. &#8220;Some economists will also suggest that interest rates may go much higher than 5.7 percent largely as a result of the massive QE exercise of printing money at an unprecedented rate,&#8221; he warns.</p>
<p>What then? It is not inconceivable that America could be headed for a <i>real</i> debt ceiling, described by National Review&#8217;s Kevin Williams as one where immutable reality boils down to &#8220;a more or less identical partial shutdown of the government <i>plus </i>suspending most or all Social Security payments indefinitely, eliminating federal health-care benefits, and/or defaulting on our bonds and enduring the subsequent economic chaos&#8221; (italic in the original).</p>
<p>An American politician <a href="http://abcnews.go.com/blogs/politics/2011/04/obama-2006-vs-obama-january-2011-vs-obama-april-2011-on-the-debt-ceiling/">vividly expressed</a> the consequences of continually raising our borrowing limit and accumulating more debt as a result:</p>
<blockquote><p>“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” he said. “It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”</p></blockquote>
<p>That politician was Barack Obama in 2006.</p>
<p>Barack Obama in <a href="http://news.investors.com/ibd-editorials/091913-671796-debt-ceiling-not-linked-to-higher-debt-says-obama.htm">2013?</a> &#8220;Raising the debt ceiling, which has been done over a hundred times, does not increase our debt; it does not somehow promote profligacy.&#8221; Except that it does. Every time we have raised the debt ceiling, our debt level has increased.</p>
<p>Thus, <a href="http://www.washingtonpost.com/blogs/plum-line/wp/2013/09/26/the-morning-plum-the-gops-debt-limit-strategy-is-insane-people-should-say-so/">&#8220;insane&#8221;</a> Republicans are demanding concessions for raising the current debt ceiling. Those concessions include a one year delay of the new and massively expensive (more than <a href="http://www.weeklystandard.com/blogs/obamacare-now-estimated-cost-26-trillion-first-decade_648413.html">triple</a> its original cost estimate) healthcare bill, a blueprint for tax reform, medical malpractice reform, approval of the Keystone  pipeline, and an increase in offshore drilling for energy. The president&#8217;s Twitter <a href="http://www.motherjones.com/politics/2013/09/obamas-red-line-debt-ceiling-no-deals">response</a> is telling. &#8220;I won’t negotiate on anything when it comes to the full faith and credit of the United States of America.&#8221;</p>
<p>Due to unprecedented levels of government spending by both parties&#8211;<i>nothing more, nothing less</i>&#8211;the full faith and credit of the United States of America is hanging by a thread. Either we stop engaging in <i>that</i> insanity or we are finished as a nation. Politicians lie. Math does not.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>The DNC Goes Broke</title>
		<link>http://www.frontpagemag.com/2013/arnold-ahlert/the-dnc-is-broke/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=the-dnc-is-broke</link>
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		<pubDate>Wed, 02 Oct 2013 04:40:20 +0000</pubDate>
		<dc:creator><![CDATA[Arnold Ahlert]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[bankrupt]]></category>
		<category><![CDATA[Broke]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[democratic national committee]]></category>
		<category><![CDATA[donors]]></category>
		<category><![CDATA[Organizing for America]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=205977</guid>
		<description><![CDATA[A fitting reflection on the party leading America into bankruptcy. ]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/10/debbie-wasserman-schultz-empowers-a-radical-muslim-fundraiser_errbi_0.jpg"><img class="alignleft size-full wp-image-205994" alt="debbie-wasserman-schultz-empowers-a-radical-muslim-fundraiser_errbi_0" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/10/debbie-wasserman-schultz-empowers-a-radical-muslim-fundraiser_errbi_0.jpg" width="249" height="230" /></a>While Americans are focused on a government shutdown precipitated in large part by America&#8217;s debt crisis, the fundraising arm of the party that advocates spending trillions of dollars in borrowed money has a debt crisis of its own. As a result of spending during the 2012 election campaign, the Democratic National Committee (DNC) is <a href="http://finance.fortune.cnn.com/2013/09/30/dnc-debt-crisis/">nearly broke</a>, even as it struggles to pay its own vendors.</p>
<p>The numbers paint a bleak picture. At the end of May, the DNC <a href="http://www.washingtonpost.com/blogs/post-politics/wp/2013/07/19/rnc-raised-8-million-in-june/">had</a> $6 million in cash and $19.8 million in debt, and was paying off its bills at a rate of less than $1 million per month. Through August, the DNC owed $18.1 million to its various creditors. Several of those creditors, speaking anonymously to avoid any blowback from the DNC, described the organization as one falling further and further behind in its ability to pay past due bills. Moreover, senior strategists with close ties to the money-raising arm of the Democrat party have expressed concerns that the DNC has no apparent strategy for returning to solvency. &#8220;They really thought they could get this money raised by the summer,&#8221; said one of those strategists. &#8220;But the fact is, from talking to people over there, they have no real plan for how to solve this.&#8221;</p>
<p>DNC officials note that their problems are exacerbated in part by the White House, as well as DNC head Debbie Wasserman Schultz, who reportedly has no strong relationships with anyone in the administration. Tellingly, Wasserman Schultz has personal debt issues that mirror the organization she represents. She is currently over a <a href="http://cdn.rollcall.com/news/10_poorest_members_of_congress_owe_big-227786-1.html?popular=true&amp;zkPrintable=true&amp;cdn_load=true&amp;zkPrintable=1&amp;nopagination=1">million dollars</a> in debt, with two mortgages worth at least $750,000 in total, and another $350,000 in home equity and personal loans. In 2012, Wasserman Schultz also carried more than $50,000 in credit card debt. By contrast, she has $100,000 worth of spouse-held stock in the community bank where her husband is employed, and other smaller accounts that include college savings plan for her children.</p>
<p>Yet while Wasserman Schultz is incompetent, the DNC&#8217;s woes are not completely her fault. Organizing for Action (OFA), Barack Obama’s former campaign apparatus reincarnated as a nonprofit advocacy group, has emerged as a fierce competitor for donor dollars. Last March, Fred Wertheimer, head of Democracy 21, a campaign finance reform group, <a href="http://www.reuters.com/article/2013/03/13/us-usa-obama-donors-idUSBRE92C15N20130313">aptly described</a> what OFA is all about. &#8220;It is operating as an arm of the presidency and it&#8217;s funded by private money including large contributions and bundlers raising large amounts,&#8221; he explained.</p>
<p>OFA also has a technological infrastructure with access to Obama’s 2 million volunteers, 17 million email subscribers, 37.2 million Twitter followers, and virtually every registered voter in the country. All of it is used to drive the president&#8217;s message&#8211;and raise money.</p>
<p>It is that money raising ability that has hurt the DNC. According to the Center for Responsive Politics, all of the top-tier OFA donors have also raised substantial sums of money for the DNC in the past. And while 13 of those donors contributed six-figure sums to the OFA over the first half of 2013, only three of them gave money to the DNC over the same time period.</p>
<p>DNC national press secretary Michael Czin acknowledges the OFA&#8217;s fund raising prowess, but doesn&#8217;t consider it a problem. &#8220;Of course there&#8217;s competition,&#8221; he explains. &#8220;But the Democratic family is a big one, and at the end of the day we are all on the same team, our work compliments each other&#8217;s, and there are enough resources for all of us.&#8221;</p>
<p>A top Democratic operative paints a completely different picture. &#8220;Donors are being pulled in two directions, and there&#8217;s absolutely no doubt it&#8217;s impacted the DNC&#8217;s fundraising,&#8221; the operative said. &#8220;I&#8217;m hearing it from donors regularly that they&#8217;re being told to help one and not the other.&#8221;</p>
<p>The DNC is also beset by leadership problems. Patrick Gaspard who was executive director of the committee since 2011, was chosen in March to become America&#8217;s ambassador to South Africa. The effort to replace him has been described as chaotic. &#8220;It&#8217;s a surprise to most people that there isn&#8217;t an executive director at this point,&#8221; noted a source close to the DNC. &#8220;There have been a number of candidates who pulled their names out after having been floated, but it should have been done by now.&#8221;</p>
<p>Ostensibly, President Obama is aware of the problem. According to the DNC, he has headlined 15 of their fundraisers in 2013, including two last week in New York and Washington, D.C. Yet it remains a reality that Czin is dealing with DNC vendors on a case-by-case basis, and that their aforementioned payment schedule of just under one million dollars a month is being maintained. Nonetheless, Czin expresses optimism. &#8220;While we work to retire our debt, we&#8217;re not taking our foot off the pedal and are making the investments that will help ensure that Democrats are successful in 2014, 2016, and beyond,&#8221; he contended.</p>
<p>Keeping the pedal to the metal is contingent on the continuing involvement of the president who may not be as inclined to help his party as he is to help himself. It is quite possible, given the Obama’s narcissistic tendencies, that he may be far more interested in burnishing his historical legacy than raising funds for his fellow Democrats. OFA is in a far better position to support that effort than the DNC.</p>
<p>This reality may explain the August <a href="http://www.nydailynews.com/news/politics/clinton-adviser-harold-ickes-return-dnc-signals-power-play-bill-hillary-article-1.1439132">appointment</a> of longtime Clinton advisor Harold Ickes to the DNC&#8217;s rules and bylaws panel. According to Ickes, the panel’s “goal is to design rules to nominate the strongest candidate for the general election.” Toward that end he is engaged in eliciting contributions from wealthy donors and &#8220;assisting&#8221; the Ready for Hillary Super PAC that aims to get Hillary Clinton elected president in 2016. Earlier in August, the DNC also <a href="http://thehill.com/blogs/ballot-box/campaign-committees/316575-dnc-brings-in-hillary-ally-as-communications-director">hired</a> Mo Elleithee, Clinton&#8217;s traveling campaign press secretary in 2008, as its new communications director. Thus, the DNC&#8217;s transition with respect to the party&#8217;s standard-bearer appears to be moving past the current president towards their most obvious candidate for 2016.</p>
<p>It remains to be seen if Clinton is willing to return the favor. Barack Obama has established the template of organizing a SuperPac that allows him to raise large sums of money independent of the DNC&#8217;s efforts. If Clinton takes the same approach, big donors may gravitate towards her, leaving the DNC to fend largely for itself in the 2014 mid-term election and beyond.</p>
<p>Either way, the DNC&#8217;s current condition epitomizes a party that continues to <a href="http://townhall.com/tipsheet/guybenson/2013/02/14/senate-democrat-the-us-isnt-broke-doesnt-have-a-spending-problem-n1512652">insist</a> America does not having a spending problem. Nearly $17 trillion in national debt, and <a href="http://online.wsj.com/article/SB10001424127887323353204578127374039087636.html">more than</a> $86 trillion in unfunded liabilities, say otherwise. It remains to be seen when denial gives way to reality for the DNC&#8211;and America itself.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>UC Economics Prof Says Real National Debt is $70 Trillion</title>
		<link>http://www.frontpagemag.com/2013/dgreenfield/uc-economics-prof-says-real-national-debt-is-70-trillion/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=uc-economics-prof-says-real-national-debt-is-70-trillion</link>
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		<pubDate>Thu, 15 Aug 2013 14:53:47 +0000</pubDate>
		<dc:creator><![CDATA[Daniel Greenfield]]></dc:creator>
				<category><![CDATA[The Point]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[National Debt]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=200715</guid>
		<description><![CDATA[That’s an increase of $13.5 trillion just since 2006, and is growing by more than $2 trillion a year.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/08/one_billion_dollars2.jpg"><img class="alignnone size-full wp-image-200733" alt="one_billion_dollars2" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/08/one_billion_dollars2.jpg" width="320" height="213" /></a></p>
<p>There are 300 billion stars in the Milky Way and there are 100 trillion atoms in a human cell. But <a href="http://www.foxnews.com/politics/2013/08/14/california-economist-says-real-us-debt-70-trillion-not-16-trillion-government/">here&#8217;s a number that might even make</a> Carl &#8220;Billions and Billions&#8221; Sagan faint.</p>
<p>Forget the number of stars and the number of atoms. Let&#8217;s look at the <a href="http://www.foxnews.com/politics/2013/08/14/california-economist-says-real-us-debt-70-trillion-not-16-trillion-government/">number of unfunded government liabilities</a>.</p>
<blockquote><p>The federal government has been low-balling the public for years on how much debt it actually has, a University of California, San Diego economics professor says, adding that the real amount is $70 trillion – not $16.9 trillion.</p>
<p>Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, actions taken by the Federal Reserve as well as the cost of other government trust funds. Factoring in those fees brings the total amount the government owes to a staggering $70 trillion, he says.</p></blockquote>
<p>But surely it couldn&#8217;t be that bad. Could it?</p>
<blockquote><p>He includes the implicit mortgage guarantees of Fannie Mae and Freddie Mac: ”With the federal government today being the sole owner of Fannie and Freddie, it seems appropriate to consider both the direct debt obligations … as well as their outstanding mortgage guarantees [which are now treated] as an off-balance sheet liability.” Added together, housing guarantees ($7.5 trillion), FDIC guarantees ($7.4 trillion), Social Security ($26.5 trillion), Medicare ($27.6 trillion), and other government trust fund liabilities ($1.8 trillion) come to $70 trillion. That’s an increase of $13.5 trillion just since 2006, and is growing by more than $2 trillion a year.</p></blockquote>
<p>But as 2016&#8242;s leading candidate would say, &#8220;What difference does it make?&#8221;</p>
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		<title>Obama&#8217;s Death and Taxes Economy</title>
		<link>http://www.frontpagemag.com/2013/dgreenfield/obamas-death-and-taxes-economy/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=obamas-death-and-taxes-economy</link>
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		<pubDate>Fri, 26 Jul 2013 04:50:31 +0000</pubDate>
		<dc:creator><![CDATA[Daniel Greenfield]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
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		<category><![CDATA[death]]></category>
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		<guid isPermaLink="false">http://frontpagemag.com/?p=198216</guid>
		<description><![CDATA[Masquerading social policies as economic policies. ]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/07/obamad.jpg"><img class="alignleft  wp-image-198234" alt="obamad" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/07/obamad.jpg" width="322" height="202" /></a>It&#8217;s an iron law of nature as certain as the one about an angel getting its wings every time a bell rings or a snowstorm blanketing the area every time Al Gore comes to town to remind the carbon puffing infidels about global warming: every time Obama gives a speech, a thousand businesses go out of business.</p>
<p>On July 24th, Obama delivered yet another economic speech in which he castigated Republicans in Congress for the sequester that he proposed, promised big economic benefits for the entire country from green energy and illegal immigration and promised to spend every one of his remaining days trying to help working people; at least those days when he isn&#8217;t on the golf course, on vacation at Martha’s Vineyard or delivering useless speeches.</p>
<p>An economics speech, a creature that Barack Obama has been unleashing on the taxpayers, lawmakers and layabouts since his post-election days in 2008 of pretending to be president complete with an imaginary seal with the motto &#8220;Vero Possumus” (which can be translated very loosely as &#8220;God Help Us All&#8221;), is an entirely familiar breed.</p>
<p>It&#8217;s an FDR-on-crack assemblage of crackpot social plans masquerading as economic plans and homey testaments to American exceptionalism wrapped around bankrupt Euro ideas about how to run a country into the ground. And in the year 2013, the whole thing smells like last year&#8217;s leftovers.</p>
<p>There are the warnings about all the old bridges threatening to fall down and kill the trolls living under them. Despite a second term in office, a stimulus plan, a plan to stimulate the stimulus plan and years of assorted pork, there are apparently now more Damocles bridges in the land than there ever were before.</p>
<p>In 2009, Obama promised to fix all the crumbling roads and bridges with a $787 billion stimulus plan full of &#8220;shovel-ready jobs.&#8221; Two years later he joked to the Council on Jobs and Competitiveness, led by GE CEO Jeff Immelt, whose company is the 15th biggest government contractor, that the shovel-ready jobs were not shovel-ready. It would have been nice to know that before we spent the $787 billion.</p>
<p>And then there are the promises that we can fix all our problems with a green energy revolution that drives up electricity rates for everyone in order to buy windmills and solar panels from China. The green energy revolution has done a lot for Red China&#8217;s middle class while further eviscerating the standard of living for American middle class families who are just trying to keep the lights on.</p>
<p>And no Obama speech on the economy would be complete without urging us to invest more in education in order to get our hands on tomorrow&#8217;s jobs. &#8220;If you think education is expensive,&#8221; Obama said, borrowing his line from a bumper sticker, &#8220;wait until you see how much ignorance costs in the 21st century.&#8221;</p>
<p>But we don&#8217;t have to choose. As Detroit shows us, we can have both. Detroit has 5,000 teachers to 88,000 students. Its biggest challenge has been trying to win back another 5,000 students who escaped to charter schools to justify not laying off all the extra teachers. Its billion-dollar school budget is all the more shocking in a city that is deep in debt and suffers from a 47 percent illiteracy rate.</p>
<p>The education system fosters incredibly expensive ignorance. And that ignorance can not only be found in public schools in Detroit&#8217;s ghettos, but in the Ivy League alma maters of Obama and his financial advisers.</p>
<p>Obama&#8217;s 6 trillion dollar debt is a testament to the high price of ignorance; as are his economic speeches calling for more green energy, more education and more taxes to solve all of our ills. In his latest speech, he vowed that making &#8220;preschool available to every four year-old in America&#8221; would make America competitive in the &#8220;ocean of tomorrows&#8221; and &#8220;a sky of tomorrows.&#8221;</p>
<p>About the only thing in Obama&#8217;s entire 5,000-word speech that was at all interesting was in its opening as he pivoted from discussing the loss of middle class jobs to inveighing against the income inequality of the 1 percent. It was a convenient dodge that his average supporter was incapable of noticing, but it&#8217;s at the heart of what&#8217;s wrong with Obama&#8217;s economic logic.</p>
<p>Obama&#8217;s speech stayed in familiar class warfare territory. Its implication was that if the wealthy were made to pay their fair share, the lost manufacturing jobs would somehow come back. The economic logic of that is absurd. Even if we assume that the wealthy are the villains of the piece, taxing them at Hollandaise rates seems as likely to bring back the jobs as constructing cardboard factories in a cargo cult ceremony to summon the spirits of the lost jobs would.</p>
<p>But Obama, like most of his Socialist brethren, isn&#8217;t really interested in repairing the broken relationships of the economy. The logic running through his speech is that forcing the rich, or at least those of their class who haven&#8217;t written their timely checks to Organizing for America, to pay more will allow the government to create more jobs.</p>
<p>Obama&#8217;s perpetual motion tax machine is offering the same empty social welfare promises that more social services, more preschools, more free Internet, more green energy, more Obamacare, will turn the economy around, while shamelessly claiming that it has already done as much.</p>
<p>There are still the occasional nods to all the nation&#8217;s broken bridges that are just about to fall down, but mostly it&#8217;s the same empty Socialism that proposes to tax a country to death because it&#8217;s right and just to do so.</p>
<p>&#8220;In this world nothing can be said to be certain, except death and taxes,&#8221; Benjamin Franklin wrote to a French correspondent around the time that the United States Constitution took effect. Some two centuries later, government has combined death and taxes into one by taxing the economy to death.</p>
<p>Taxing economies to death is one thing that we have in common with the French. President Hollande began his disastrous term in office with a proposed 75% tax rate. France&#8217;s move to tax its economy to death hit a snag when its budget minister, a member of the Socialist Party in good standing, who was supposed to lead the crusade to make the rich pay their fair 75 percent share, admitted to hiding some $790,000 in a secret Swiss bank account.</p>
<p>Obama has squandered money like Louis XVI and then pledged to lead a revolution to find where the rest of the money is. Surrounded by some of the most corrupt billionaires in the country, whose think-tanks help write the policy proposals that the teleprompter feeds into his brain, he inveighs against the 1 percent. And he tops it all off by claiming his disasters as successes.</p>
<p>Obama taxes Americans. He taxes their incomes, their lifebloods and their patience. He has put his entire faith in taxes, in grubbing up enough money to serve as collateral for his latest scheme. And the road that his paradise of amnesty for illegal aliens, green energy for electric poverty and more government employees to administer the whole mess leads to is Detroit.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank">Click here</a>.  </strong></p>
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		<title>Federal Housing Administration Losses May Hit $115 Billion</title>
		<link>http://www.frontpagemag.com/2013/dgreenfield/federal-housing-administration-losses-may-hit-115-billion/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=federal-housing-administration-losses-may-hit-115-billion</link>
		<comments>http://www.frontpagemag.com/2013/dgreenfield/federal-housing-administration-losses-may-hit-115-billion/#respond</comments>
		<pubDate>Sat, 06 Jul 2013 14:24:03 +0000</pubDate>
		<dc:creator><![CDATA[Daniel Greenfield]]></dc:creator>
				<category><![CDATA[The Point]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Federal Housing Administration]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=195203</guid>
		<description><![CDATA[Don't call them losses. Call them wealth redistribution and social justice.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/07/r-TOO-BIG-TO-FAIL-large570.jpg"><img class="alignnone size-medium wp-image-195205" alt="r-TOO-BIG-TO-FAIL-large570" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/07/r-TOO-BIG-TO-FAIL-large570-450x242.jpg" width="450" height="242" /></a></p>
<p>It&#8217;s all<a href="http://www.ihatethemedia.com/house-oversight-committee-estimates-fha-losses-of-115-billion"> still too big to fail</a>, <a href="http://news.heartland.org/newspaper-article/2013/06/24/congressional-report-raises-spectre-fha-bailout">until the day that it does fail</a> and the Great Failwhale swoops down over Washington D.C., trailing worthless paper waves in its wake.</p>
<blockquote><p>The Federal Housing Administration&#8217;s (FHA) losses over the next 30 years could be much higher than originally projected, according to the findings of a congressional committee. The dismal forecast has some bracing for another taxpayer-financed bailout.</p>
<p>The House Oversight and Government Reform Committee, chaired by Rep. Darrell Issa (R-Calif.) is reporting that a worst-case scenario stress test conducted last year estimated the FHA could suffer losses as high as $115 billion.</p>
<p>FHA was created as a part of the National Housing Act of 1934 with the goal of improving housing affordability. The agency does not lend money to borrowers but insures lenders against losses on loans that meet certain standards, making lenders more willing to extend credit.</p></blockquote>
<p>So don&#8217;t call them losses. Call them wealth redistribution and social justice.</p>
<blockquote><p>The primary cause of the FHA&#8217;s troubles is the plague of underwater mortgages that has struck the housing sector in recent years. During the late housing bubble, the FHA lost market share as more private lenders sold “subprime” loans to home buyers. But with the collapse of the housing market in 2007-08, much of that business returned to the FHA. While the agency has played a major role in propping up home prices, it has also been overwhelmed by defaults.</p>
<p>Critics say the FHA is not helping anybody by easing credit to borrowers. “Insofar as the FHA was encouraging people to buy homes in bubble markets that were not deflated, that’s not good for the FHA and you didn’t help the homeowner,” Dean Baker, co-director of the Center for Economic and Policy Research, told the Wall Street Journal.</p>
<p>In addition, a decision whether to draw against the U.S. Treasury will not be taken until September in the hopes an improving housing market will allow the agency to avoid a bailout.</p></blockquote>
<p>Sure. Everything will be better in September.</p>
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		<title>Dem-Controlled Detroit Defaults</title>
		<link>http://www.frontpagemag.com/2013/arnold-ahlert/dem-controlled-detroit-defaults/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=dem-controlled-detroit-defaults</link>
		<comments>http://www.frontpagemag.com/2013/arnold-ahlert/dem-controlled-detroit-defaults/#comments</comments>
		<pubDate>Mon, 17 Jun 2013 04:52:34 +0000</pubDate>
		<dc:creator><![CDATA[Arnold Ahlert]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[bankrupt]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Detroit]]></category>
		<category><![CDATA[homeless]]></category>
		<category><![CDATA[Mayor]]></category>
		<category><![CDATA[Money]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=193406</guid>
		<description><![CDATA[Where a half century of leftist rule has gotten the residents of the Motor City.]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/06/image1.jpg"><img class="alignleft  wp-image-193422" alt="image" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/06/image1.jpg" width="237" height="159" /></a>In Detroit, more than a half-century of Democratic rule has taken the ultimate toll. On Friday, Kevyn Orr, the emergency fiscal manager appointed March 1 by Republican Gov. Rick Snyder, <a href="http://www.breitbart.com/system/wire/DA6TMNC00">announced</a> that the city intends to default on approximately $2.5 billion in unsecured debt. That default is detailed in a 128-page restructuring <a href="http://www.freep.com/assets/freep/pdf/C4206913614.PDF">report</a> aimed at preventing the largest municipal bankruptcy in the nation&#8217;s history. “We have to strike a balance between the legacy obligations to our creditors and our employees and retirees and the duty as a city to 700,000 residents for lights, police, fire, emergency management, cleaning the streets,” Orr <a href="http://www.bloomberg.com/news/2013-06-14/detroit-on-bankruptcy-s-brink-stops-paying-some-debts-orr-says.html">told</a> reporters.</p>
<p>Reality hit home on Friday when the city missed a $39.7 million payment on a debt obligation used to fund pensions. Orr met in a closed-door session with about 180 of the city&#8217;s creditors, including bond holders, union representatives, pensions trustees and others, seeking critical concessions that include taking ten cents on the dollar for what those creditors are owed, while underfunded pensions plans may get even less. Even if the deal is acceptable, Detroit&#8217;s chances of going bankrupt <a href="http://detroit.cbslocal.com/2013/06/14/detroit-emergency-manager-proposes-plan-to-creditors/">remain</a> 50-50. “This is not a jaded effort just to get to a bankruptcy filing,” said Orr. &#8220;I sincerely want people to behave rationally and take this opportunity to work together.”</p>
<p>Rational behavior has been scarce in Detroit for quite some time. Beginning in 1962, Detroit has <a href="http://www.policymic.com/articles/20567/america-s-future-looks-too-much-like-detroit">endured</a> a steady diet of Democratic mayors and their social welfare agenda. Beginning in 1962, Mayor Jerome Cavanagh <a href="http://www.rightmichigan.com/story/2011/12/21/191126/29">ushered</a> in a “Model City” program to a nine-square-mile section of the city. It was based on a Soviet Union-style approach, aimed at rebuilding entire urban areas all at once. The effort was funded by a commuter tax and a new income tax that Cavanagh told residents would be paid by “the rich.” Yet the same central planning that that formed the heart of the Model City program was extended to the people themselves, who eventually resented being told by government how to run their businesses and their lives in exchange for government goodies. Unsurprisingly, the program was a monumental failure.</p>
<p>Then there were the riots. In 1967, police broke up a celebration at a &#8220;blind pig.&#8221; Blind pigs were after-hours clubs that featured gambling and prostitution and had been part of the traditional black culture in Detroit since Prohibition. The political leadership considered them antithetical to the Model City program. An enraged neighborhood did not. People took to the streets, igniting the worst race riot of the decade. Black-owned business were looted and burned to the ground. Forty people were killed and 5,000 were left homeless. Thus began the “white flight” out of the city center, totaling 140,000 people over an eighteen month period, ensued. The city never recovered.</p>
<p>None of this stopped the progressive agenda from continuing to be implemented. Public employees were given precisely the exorbitant wage and benefits packages that are coming back to haunt the city now. This Democrat-fostered attitude extended to private sector unions, whose equally exorbitant packages, along with efficiency-strangling work rules, made the cost of doing business in the Motor City prohibitive. As a result, much of the car industry that formed the city&#8217;s employment backbone left for right-to-work states that provided a far less hostile &#8212; and far more affordable &#8212; business climate.</p>
<p>As chronicled <a href="http://frontpagemag.com/2013/arnold-ahlert/detroit-public-schools-bankrupting-minority-students-futures/">here</a>, the same progressive-inspired insanity destroyed the Detroit public school system (DPS), which itself stands on the brink of bankruptcy. This tragedy is highlighted by several sad realities. In 2009, DPS students turned in the lowest scores ever recorded in the national math proficiency test over its then-21-year history. The state of Michigan, led by Detroit, has one of the highest black-white achievement gaps in the nation. As of June 12, only 1.8 percent of the system&#8217;s students were capable of doing college level work.</p>
<p>Yet by far the most telling indictment of the system is this mind-bending reality: a full 47 percent of city residents are <i>functionally illiterate.</i></p>
<p>Thus, Detroit&#8217;s date with fiscal destiny was pre-ordained. Orr is applying the pressure, telling creditors that they might not fare as well in bankruptcy court as they can right now. “It doesn’t get better with time, OK?” he told the <i>Detroit Free Press</i> editorial board following the meeting. “It actually gets worse. So the sooner you come in, the better treatment you might get.”</p>
<p>Orr may not be exaggerating. Left unchecked, the city&#8217;s debt obligations, including pensions and healthcare outlays that currently total a staggering 42.5 percent of all city revenue, will rise to 65 percent by 2017. No other major city has more than 20 percent of their revenues going to similar payouts. Thus, in addition to the aforementioned 90 percent losses Orr needs for the city&#8217;s creditors to absorb, other measures are also being considered. These include the possibility of selling city assets, including parking garages, and artwork from the Detroit Institute of Arts. The city park of Belle Isle will be leased to the state&#8211;under virtually the same conditions the Democrat-controlled City Council rejected. The Water and Sewerage Department will remain under ownership of the city, but spun off into a regional authority. And finally, the city wants to replace its retiree health-care plan with one relying on ObamaCare&#8217;s federal insurance exchanges or Medicare, coupled with some city supplements.</p>
<p>All of the ostensible savings generated by this plan will be plowed back into the city over the next ten years, <a href="http://detroit.cbslocal.com/2013/06/14/detroit-emergency-manager-proposes-plan-to-creditors/">including</a> $500 million for blight removal and $1.25 billion earmarked for shoring up the police and fire departments, and restoring many of the streetlights in the city <a href="http://www.freep.com/article/20130614/NEWS05/306140059/FBI-data-ranks-Flint-Detroit-highest-Most-Dangerous-Cities-America-list">ranked</a> by the FBI as the second-most dangerous in the nation.</p>
<p>Two of the nation&#8217;s rating services were unimpressed with the plan. Following the meeting, Standard &amp; Poor&#8217;s lowered the rating on the city’s general-obligation debt from CCC-minus to CC with a negative outlook, while Fitch Ratings cut the city&#8217;s unlimited-tax and limited-tax general obligations, along with its pension obligation certificates, to C. The former rating indicates a debt obligation 10 steps below investment grade. The latter rating constitutes &#8220;imminent default.&#8221;</p>
<p>More than imminent, default looks inevitable. This is due to the reality that even if creditors sit still for ten cents on the dollar, the follow-up to this plan requires that the city borrow additional funds. Where will that money come from, given that current creditors have been asked to forgo 90 percent of their investment? National Reviews&#8217;s Kevin Williams <a href="http://www.nationalreview.com/exchequer/351131/detroit-defaults-kevin-williamson">reveals</a> the infuriating answer, noting that &#8220;the unwilling taxpayers of Michigan and those of the United States&#8221; will be forced to foot the bill, even as &#8220;the collection of misfits, miscreants, and criminals who govern that poor city&#8221; remain in control of the municipal government.</p>
<p>Again, that would be a collection of <i>Democrat</i> misfits, miscreants, and criminals.</p>
<p>Yet as Williams correctly explains, it is not entirely clear whether pensions and retiree benefits can be legally reduced. The city furthest along the timeline in determining whether such an arrangement is viable is Stockton, CA. In April, U.S. Bankruptcy Judge Christopher Klein <a href="http://frontpagemag.com/2013/arnold-ahlert/dogfight-ahead-in-stockton-ca-bankruptcy/">allowed</a> that city to enter bankruptcy, pitting the city’s creditors against its public employee retirement funds, regarding who gets paid off first. Since that was the first Chapter 9 bankruptcy case challenging state pension obligations, it really becomes a matter of whether the Tenth Amendment of of the Constitution preserving states’ rights trumps federal bankruptcy law. The case is likely to end up in the U.S. Supreme Court.</p>
<p>Yet regardless of any court ruling, there are no winners. Either thousands of municipal employees take a hit on their contractually obligated health and benefit packages, or the $3.7 trillion municipal bond market where cities go to get much of their financing &#8212; long considered a safe, mom-and-pop investment vehicle &#8212; may be far more reticent to lend money to the nation&#8217;s municipal basket cases. Orr spokesman Bill Nowling expresses that no-win reality with regard to Detroit. “It’s going to have an impact” on the municipal-bond market, he said before the meeting. “But we’re at a crossroads.”</p>
<p>The city has 10,000 current city workers, roughly 20,000 city retirees, and 700,000  residents, and its current budget deficit could top $380 million by July 1. Nowling didn&#8217;t say whether Detroit would honor its next general-obligation bond payment, contending the city is “going to go month to month.” Kevyn Orr believes Detroit’s long-term debt tops $17 billion. Negotiations begin with union leaders next week, and continue through August. If they stall at any point along the line, Orr can file for Chapter 9 bankruptcy.</p>
<p>Orr wants to avoid bankruptcy. &#8220;What the average Detroiter needs to understand is that where we are right now is a culmination of years and years and years of kicking the can down the road,” he said, insisting his proposal should not be seen as a &#8220;hostile act,&#8221; but a step in the right direction. Maybe so, but it seems like an impossible task, given the reality that the city has spent $100 million more than it takes in every year since 2008. In three words, Orr expressed the reality that Detroit and several other cities mismanaged by years of Democratic control currently face.</p>
<p>“We’re tapped out,” he said.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>It&#8217;s Official: Federal Debt Will Never Be Paid</title>
		<link>http://www.frontpagemag.com/2013/mark-hendrickson/the-federal-debt-will-never-be-paid/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=the-federal-debt-will-never-be-paid</link>
		<comments>http://www.frontpagemag.com/2013/mark-hendrickson/the-federal-debt-will-never-be-paid/#comments</comments>
		<pubDate>Thu, 16 May 2013 04:40:43 +0000</pubDate>
		<dc:creator><![CDATA[Mark Hendrickson]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[default]]></category>
		<category><![CDATA[Deficit]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Government spending]]></category>
		<category><![CDATA[trillion]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=189654</guid>
		<description><![CDATA[And the implosion is coming. ]]></description>
				<content:encoded><![CDATA[<p><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/05/MoneyHole.jpg"><img class="alignleft  wp-image-189686" alt="MoneyHole" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/05/MoneyHole-450x333.jpg" width="315" height="233" /></a>A trillion dollars is a LOT of money. Stacking hundred-dollar bills flat on top of each other, a forty-inch stack would be one million, a stack one-and-one-half times as tall as the Empire State Building would be a billion, while a stack 631 miles high (from Pittsburgh to the other side of St. Louis) would be a trillion. That’s just one trillion. The national debt is approaching $17 trillion.</p>
<p>That is the official total. However, that figure greatly understates the problem by not counting unfunded liabilities. During the previous two fiscal years, the government added $2.6 trillion to the nominal national debt, but using GAAP (generally accepted accounting principles) the actual tally was over $10 trillion of new debt.</p>
<p>Estimates of total federal indebtedness vary according to the time frame one adopts and various assumptions about the future, but whether the actual figure is nearer $75 trillion of $221 trillion (economist Laurence Kotlikoff’s tally) the true federal debt is multiples of our GNP—an incomprehensibly high figure that can never be paid in full.</p>
<p>Contrary to Democratic protestations, our debt problem is essentially a spending problem. Look at this graph from the Federal Reserve:</p>
<p style="text-align: center;"><a href="http://cdn.frontpagemag.com/wp-content/uploads/2013/05/Picture-2.png"><img class="size-medium wp-image-189684 aligncenter" alt="Picture 2" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/05/Picture-2-450x250.png" width="450" height="250" /></a></p>
<p>The blue line is revenue and the red line is federal spending since the late 1940s. Uncle Sam clearly has not been starved for revenues, but it has proven impossible to keep up with the breakaway explosion in spending.</p>
<p>The crux of the spending problem is in the area of entitlements. Exhibit A: Federal revenues and budget requests (i.e., expenditures) for Fiscal Year 2011. Social Security, Medicare, Medicaid, and interest on the national debt totaled over $2.4 trillion versus that year’s total federal revenue of $2.3 trillion. Conclusion? What we usually think of as “the government”—the various departments, agencies, and bureaus—was financed entirely by borrowed money.</p>
<p>To add insult to injury, despite all the red ink, federal profligacy has continued. Absurd spending programs abound—everything from a $750,970 grant to a successful brewery, to $2 million for ten cupcake shops, to $150 million to study lesbian obesity. Program redundancy is epidemical—82 federal programs to improve the quality of teaching, 47 for jobs training, 160 to support housing, 53 to spur entrepreneurship, at least 116 financial regulatory bodies, and 56 programs to teach financial literacy (obviously not working, since we keep digging ourselves deeper into debt).</p>
<p>How did we get into such a mess? Here are three key reasons:</p>
<ol>
<li>The moral poison in our society that has caused us to find justifications to redistribute property. Americans who would never consider entering a neighbor’s house and taking some of his property think nothing of consuming some of their neighbors’ wealth if the government takes it on their behalf.</li>
<li>The progressive ideology which transformed our concept of government from negative to positive law—that is, altering the primary function of government from trying to keep bad things, like violence or theft, from happening to us (negative) to actively trying to do things for us (positive). The problems with this are twofold: first, the government can’t give anything to anybody without first taking it from somebody else; second, once you decide that government should do “A” for Jones (say, help with his food) then why not “”B,” “C,” “D,” etc. (help with housing, medical care, retirement, ad infinitum with no logical stopping point); also, if you help out Jones, why not Schmidt, Gonzalez, Miller, and so on? In other words, progressivism is an ideology for the never-ending expansion of government spending.</li>
<li>The perverse incentives of democracy, which impel politicians to gain popularity by conferring benefits while avoiding the negative backlash that results from raising taxes. Eventually, democratic pressures cause politicians to shift the burden of their grandiose spending plans onto those who are in no position to penalize them at the ballot box—Americans who aren’t yet voters, either by being too young or not yet having been born.</li>
</ol>
<p>To repeat: The massive federal debt never will be paid. One reason is the simple economics of debt: The more debt there is in a society, the more current income is needed to service the debt rather than to produce new wealth. The marginal productivity of debt (that is, the amount of new wealth produced per dollar of new debt added) has been declining in the U.S. for half a century. During the 2008-9 financial crisis, it fell below zero. Whatever the figure is now, we simply aren’t able to get much bang for our additional debt bucks, sort of like a junkie in the advanced stages of addiction.</p>
<p>There is a more ominous reason why the younger generation will find it impossible to honor Uncle Sam’s extravagant promises: Already young people burdened with college debt are delaying marriage and having children. These trends will accelerate when future congresses raise taxes to try to fulfill its entitlement promises. The result will be a population implosion. That will further increase the per-person debt burden, generating a vicious cycle that will culminate in economic cataclysm and political volatility. The unaffordable spending spree of the last generation has created an existential threat to America itself. Without realizing it, we have been voting for a coming implosion of our population and the concomitant destruction of our own society.</p>
<p>The practice of spending today while asking future generations to pay for it was deemed immoral by earlier generations of Americans. Jefferson spoke for the majority when he described federal debt as “swindling futurity” and a mortal threat to liberty. If generations could shift the burden of their debts to future generations, said Jefferson, “then the earth would belong to the dead and not to the living generation.”</p>
<p>Jefferson asserted that no nation “can validly contract more debt than they may pay within their own age, or within the term of 19 years.” By what abstruse calculations he arrived at the term of “19 years,” I have no idea. In the Old Testament of the Bible, the jubilee principle stated, “At the end of every seven years you must declare a cancellation of debts” (Deut. 15:1, NET Bible © 2006). Today, as we drown in debt and the rising generation faces the prospect of being debt slaves, it is clear that we wouldn’t be in such a woeful fiscal hole if we had adhered to the principle articulated by Jefferson and the ancient Hebrews.</p>
<p>So, what can the younger generation do? At some point, they will have no choice but to repudiate the national debt. That may sound radical, but even if they don’t act to repudiate the debt openly, you can bet your bottom Federal Reserve Note that the central bank will repudiate much of our debt via the subterfuge of monetary depreciation.</p>
<p>Our younger generations would be justified in repudiating the debt. The heavy taxes they will be asked to pay for today’s deficit spending are unjust. They amount to taxation without representation. The younger generations are not contractually bound to honor federal debt. There was no quid pro quo—they didn’t receive the benefits of the federal largess that they are expected to pay for. Not only would they be justified in taking such drastic actions, they need to do so in order to have a chance to rescue themselves and the future of America itself from the above-mentioned potentially fatal population implosion.</p>
<p>What form may this repudiation take? At some point, when enough of them recognize the untenable position into which their elders have placed them, the younger generations will need to coalesce around a debt-cancelling political agenda. This agenda would consist of two parts: 1) paying off federal bondholders, foreign and domestic, at X cents on the dollar (perhaps using the immense inventory of real property that Uncle Sam owes in settlement of debts); 2) dismantling the pay-as-you-go format of federal entitlements and replacing them with accounts in each individual’s name (with their contributions making no detours into the federal Treasury)—a policy based on the time-tested principles of private property and voluntary cooperation rather than on compulsory participation in programs predicated on collectivized risk.</p>
<p>The second step is absolutely indispensable for both practical and moral reasons. To wipe out the existing debt, but then continue the bankrupt policies of using government to confer financial privileges and redistribute wealth would simply place their own children into the same abyss of debt from which they themselves had escaped, and to lay claim to the same benefits that liquidation of the national debt would deny to older Americans. Repudiation of the debt without abandoning the corrupt politics of the transfer society would be morally indefensible.</p>
<p>In short, the national debt, as destructive as it is and as badly as we need to eliminate it, is only the symptom. The actual disease is the modern democratic redistributionist state that grants favors, privileges, and benefits to some citizens paid for by others. We will reap the bitter fruits of what we are now sowing.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>Dogfight Ahead in Stockton, CA Bankruptcy</title>
		<link>http://www.frontpagemag.com/2013/arnold-ahlert/dogfight-ahead-in-stockton-ca-bankruptcy/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=dogfight-ahead-in-stockton-ca-bankruptcy</link>
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		<pubDate>Thu, 04 Apr 2013 04:16:58 +0000</pubDate>
		<dc:creator><![CDATA[Arnold Ahlert]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[Bankruptcy]]></category>
		<category><![CDATA[California]]></category>
		<category><![CDATA[debt]]></category>
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		<category><![CDATA[Stockton]]></category>

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		<description><![CDATA[A precedent-setting government spending case likely headed to the Supreme Court.]]></description>
				<content:encoded><![CDATA[<p><a href="http://frontpagemag.com/2013/arnold-ahlert/dogfight-ahead-in-stockton-ca-bankruptcy/ap_stockton_bankruptcy_nt_120625_wg/" rel="attachment wp-att-184318"><img class=" wp-image-184318 alignleft" title="ap_stockton_bankruptcy_nt_120625_wg" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/04/ap_stockton_bankruptcy_nt_120625_wg-450x298.jpg" alt="" width="270" height="179" /></a>On Monday, U.S. Bankruptcy Judge Christopher Klein <a href="http://www.latimes.com/local/lanow/la-me-ln-stockton-bankrupt-20130401,0,7979388.story">ruled</a> that the city of Stockton, CA, will be allowed to enter bankruptcy. Klein noted the move was necessary so that the city could continue to provide basic municipal services to its residents. &#8220;It&#8217;s apparent to me the city would not be able to perform its obligations to its citizens on fundamental public safety as well as other basic government services without the ability to have the muscle of the contract-impairing power of federal bankruptcy law,&#8221; Klein <a href="http://www.cnbc.com/id/100578156">said</a>. Yet the real story has yet to unfold: it must still be determined whether the city&#8217;s creditors or its public employee retirement funds get paid off first.</p>
<p>Klein himself was unsure. &#8220;I don&#8217;t know whether spiked pensions can be reeled back in,&#8221; he said during his ruling. &#8220;There are very complex and difficult questions of law that I can see out there on the horizon.&#8221;</p>
<p>The biggest part of Stockton&#8217;s debt is the $900 million it owes to the California Public Employees Retirement System (CalPERS). Since this is the first Chapter 9 bankruptcy case challenging state pension obligations, what Klein is essentially <a href="http://www.businessweek.com/ap/2013-04-01/stockton-bankruptcy-decision-only-the-beginning">referring</a> to is whether the <a href="http://www.usconstitution.net/xconst_Am10.html#gsc.tab=0">10th Amendment</a> of the Constitution preserving states&#8217; rights trumps federal bankruptcy law. Thus, it is likely this case will eventually end up before the U.S. Supreme Court.</p>
<p>During the hearing, Klein twice noted that the city&#8217;s creditors had acted in bad faith, referring to the reality that they had refused to negotiate with the city unless it cut its payments to CalPERS during the 90 mediation period required by state law. The creditors challenging the city are the ones who lent it $165 million in 2007 to fund CalPERS. The debt associated with CalPERS skyrocketed during the recession, when Stockton property values plummeted, leaving the city unable to meet its pension obligations. The creditors had sought to keep the city out of bankruptcy because it will enable Stockton to avoid repaying what it owes in full. Toward that end, they argued Stockton had not sufficiently cut expenses or raised taxes. City attorneys contended they had cut their expenses to the bone. The judge agreed with the latter assessment.</p>
<p>&#8220;The creditors got a big black eye today,&#8221; said Karol Denniston, an attorney who helped draft the legislation guiding the mandated mediation process that preceded the bankruptcy protection filing. &#8220;Now the stage is set for the real dogfight.&#8221; Despite the ruling in the city&#8217;s favor, Bob Deis, Stockton&#8217;s city manager, was less than enthused. &#8220;There&#8217;s nothing to celebrate about bankruptcy,&#8221; he said. &#8220;But it is a vindication of what we&#8217;ve been saying for nine months.&#8221;</p>
<p>It&#8217;s a Pyrrhic vindication. During the go-go years preceding the real estate crash, this bedroom community of San Francisco passed several bond resolutions to fund new municipal buildings. Public employees were promised overly generous pensions, as well as the state&#8217;s <a href="http://www.cnbc.com/id/100578156">most generous</a> healthcare plan: lifetime benefits for each retiree plus one dependent&#8211;<em>irrespective</em> of how long they had worked for the city. Since then, Stockton has tried to restructure some of its debt by cutting employment, slashing services, renegotiating some of their labor contracts, and cutting some of those health benefits.</p>
<p>The cutbacks, especially those in the Police Department, which now only responds to emergencies in progress, has turned the city into a <a href="http://www.shtfplan.com/headline-news/murder-rape-robbery-and-assault-skyrocket-in-bankrupt-stockton-california_10242012">war zone</a>. The murder rate is four times the national average, and the sobering reality is that 1-in-17 city residents face the likelihood that their car will stolen, or their house will be broken into, this year alone. In short, Stockton has become one of the most dangerous cities in the nation.</p>
<p>Nevertheless, the city&#8217;s creditors are arguing that the pain of bankruptcy should be shared, and that currently untouchable pensions negotiated when the city thought the boom years would last forever should be part of the equation. It is expected that creditors will address this reality in the next phase of the process. &#8220;That&#8217;s where it will be precedent-setting,&#8221; contended Denniston. &#8220;Does bankruptcy code apply to CalPERS or not? If bankruptcy code trumps state law, then that&#8217;s huge and it has huge implications in terms of what happens next for other municipalities across California.&#8221;</p>
<p>The state pension plan manages $255 billion in assets, but it is dealing with an $87 billion shortfall. CalPERS is determining new rates to offset the deficit, but those rates will more than likely put additional strain on at least two dozen other cities in the state, including San Bernardino, San Jose, Compton, Fairfield, Watsonville, and Atwater. If an eventual ruling comes down that allows cities to stop fully funding CalPERS by declaring bankruptcy, many of them may follow Stockton&#8217;s lead.</p>
<p>Yet in the bluest of blue states, it is likely that the progressive worldview will prevail. &#8220;Greedy&#8221; Wall Street bondholders will be expected to take the hit, while &#8220;put upon&#8221; public sector employees will have their pensions and health benefits, bloated as they may be, preserved. Yet such inevitable posturing obscures the reality that <a href="http://communities.washingtontimes.com/neighborhood/politics-blue-collar/2013/apr/1/stockton-california-bankrupt-expect-cyprus-solutio/">75 percent</a> of outstanding muni bonds are owned by small, mom-and-pop retail investors, whose own pensions and healthcare costs were to be underwritten by their investments in the ostensibly &#8220;safe&#8221; securities that muni bonds represented.</p>
<p>Until now.</p>
<p>And it is precisely that uncertainty that could reverberate far beyond Stockton. Since the 1930s, and possibly earlier, bond holders involved in major municipal bankruptcies have had their principle <a href="http://www.chicagotribune.com/news/sns-rt-us-usa-stockton-bankruptcybre9310z7-20130402,0,4110290.story">repaid</a> in full. If that equation changes? As of now, the $3.7 trillion U.S. municipal bond market is a major source of funding for cities and towns across the nation, many of whom would be forced to file for bankruptcy should that funding dry up.</p>
<p>Many muni bond sellers dismiss this reality. Dan Heckman, senior fixed income strategist at U.S. Bank Wealth Management, expressed the prevailing attitude. &#8220;There are lots of areas where the city can go before looking for a big discount from bondholders,&#8221; he said. &#8220;We don&#8217;t think it will be as much a negative as many believe.&#8221; Peter Hayes, head of the municipal bonds group at BlackRock, which oversees $109 billion, echoed that assessment. &#8220;We&#8217;ve seen this coming for quite some time and the market has expected it, so it&#8217;s not the big attention grabbing headline that would necessarily create volatility or a selloff in the market,&#8221; he said.</p>
<p>Of course, this attitude is eerily reminiscent of the prevailing attitude that preceded the collapse of the real estate bubble in 2007. That crisis too was allegedly  &#8220;contained.&#8221;</p>
<p>To reiterate the other side of the equation, if the ultimate determination here is that cities burdened by unsustainable public employee contracts can get even partial relief from those contracts via bankruptcy, that too will drive many of them to embrace insolvency. Thus, one way or the other, the eventual outcome of this case will be precedent-setting.</p>
<p>A partial solution for the future comes to mind. Perhaps every major municipality in the nation should constitute some sort of citizen review board that would be invited to the party whenever government and union officials negotiate public service employee contracts. Such a change would go a long way towards ensuring that the people who actually pay for those contracts have a voice at the table. For far too long, the quid pro quo of unions donating large campaign contributions to politicians who, once elected, are expected to negotiate municipal contracts with those same unions, has been left unchallenged. Yet it is plain that such an arrangement has, in numerous cities across the nation, amounted to nothing less than legalized collusion. The city of Stockton is the latest example proving such an arrangement is unsustainable. Sadly, it won&#8217;t be the last city to do so.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>Louie Gohmert: America Must Stop Paying Its Enemies</title>
		<link>http://www.frontpagemag.com/2013/frontpagemag-com/louie-gohmert-government-must-stop-paying-our-enemies/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=louie-gohmert-government-must-stop-paying-our-enemies</link>
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		<pubDate>Mon, 25 Mar 2013 04:37:13 +0000</pubDate>
		<dc:creator><![CDATA[Frontpagemag.com]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
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		<category><![CDATA[Budget]]></category>
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		<guid isPermaLink="false">http://frontpagemag.com/?p=182936</guid>
		<description><![CDATA[Can America afford to send Egypt's Islamist president F-16s? ]]></description>
				<content:encoded><![CDATA[<p><em>Editor’s note: Below is the video of Rep. Louie Gohmert&#8217;s keynote speech at the David Horowitz Freedom Center’s 2013 West Coast Retreat. The event was held February 22nd-24th at the Terranea Resort in Palos Verdes, California. A transcript of the lecture follows.</em></p>
<p><iframe src="http://player.vimeo.com/video/62121701" frameborder="0" width="500" height="281"></iframe></p>
<p><a href="http://vimeo.com/62121701">Congressman Louie Gohmert</a> from <a href="http://vimeo.com/user15333690">DHFC</a> on <a href="http://vimeo.com">Vimeo</a>.</p>
<p><strong>Louie Gohmert:</strong> I feel like God puts things in our lives to help prepare us for the future.  And I didn&#8217;t expect to ever be a judge.  But my late mother was brilliant.  She told me all through the &#8217;80s &#8212; this was after I&#8217;d done the four years out of the army from a scholarship at Texas A&amp;M &#8212; but she&#8217;d say, you know, God meant for you to be a public servant, and you&#8217;d be a great judge.  I went &#8212; mother, I don&#8217;t want to be a judge.  I make more money than judges.  I couldn&#8217;t sit and listen to most of these guys around here.  They&#8217;re not very good.</p>
<p>(Laughter)</p>
<p>You know, some are great.  But oh, my.</p>
<p>So anyway, it was after she died in &#8217;91 that I started thinking about being a judge.  Because my mother was so smart.  But a few months after she died, I get a call from the judge of a court &#8212; I had a breach of contract lawsuit coming up in about two weeks.  And the judge says &#8212; and for those of you who don&#8217;t know, it&#8217;s not appropriate to call a lawyer for one side of a lawsuit without the other being on the phone or being present.  He says &#8212; that&#8217;s a mighty fine-looking woman you had in my court the other day.  You think she&#8217;d go out with me?  And for those of you who don&#8217;t know, that&#8217;s not appropriate.</p>
<p>(Laughter)</p>
<p>You&#8217;re really not supposed to, as a judge, date people that are coming before you for trial.</p>
<p>(Laughter)</p>
<p>But anyway, I told him I couldn&#8217;t help him.  And then I thought &#8212; well, maybe &#8212; we obviously need a new judge.  We elect our judges.  I tried for six months to find somebody that would run against him, and nobody would.  Because people said &#8212; look, he&#8217;s the first Republican ever elected in our county, and we just kind of feel like we owe it to him to let him have whatever job he wants.  Well, nobody&#8217;s owed a public servant&#8217;s job.</p>
<p>And so anyway, I couldn&#8217;t find anybody.  I ended up &#8212; my wife and I had a piece about it, we ran it.  And it was, as I&#8217;d mentioned in one of the questions &#8212; we felt like that was our lot in life.  And so, ran for judge; judge 10 years.  And then felt like I needed to legislate, and I wasn&#8217;t going to do it from the bench.  So I left and became a congressman so I could legislate.  And then I get with some guys who are fantastic, and then some who are afraid that somebody might not like us if we really do what we promised that we would do, so that gets a little problematic.</p>
<p>But the first hearing I ever had, I&#8217;d promised &#8212; I had jurisdiction over major civil lawsuits and felonies, including death penalty cases.  And I&#8217;d promised that I was going to move this 1,000-case backlog &#8212; the longest anybody had been out on bond awaiting trial was 20 years.  I thought that was a little excessive.  And so I said &#8212; we&#8217;re going to move these cases.  So to do that, you have to set them for trial.</p>
<p>And so I had these huge hearings where the lawyer and the client had to show up.  I would call the case name, they would come up before me.  And I would say &#8212; are you the defendant?  Court reporter&#8217;s taking it all down.  And when they would acknowledge yes, I would tell them their trial date and time.  And then, if they didn&#8217;t show up, I&#8217;d revoke their bond.  And people are more quickly ready for trial if they&#8217;re in jail.  So, you know, we got the backlog moved.  I cut the backlog by over 80 percent, even though every year there were more cases filed.  So I went through thousands of cases.</p>
<p>But that first hearing, I called one case, and the guy comes up with his lawyer.  And I said &#8212; are you the defendant, so-and-so?  And before he could answer, his lawyer said &#8212; judge, my client is deaf, and we&#8217;re going to need an interpreter at the trial.  I said that&#8217;s fine, we&#8217;ll have an interpreter at the trial.  But I just need to know right now that he understands when his trial is set for.  So I looked him in the eye, and I said &#8212; can you read my lips?  And he looked me in the eye and went &#8211;</p>
<p>(Laughter)</p>
<p>And see, I didn&#8217;t recognize at the time, but that was preparation for Congress down the road.</p>
<p>(Laughter)</p>
<p>You know, when people will look you in the eye and just lie to you.  You know?  And sometimes they even smile and lie to you.</p>
<p>(Laughter)</p>
<p>So that was preparation.</p>
<p>And in another lesson I learned, one of the judge friends I was talking to told me about a case in their court &#8212; right before a felony trial, the lawyer for the defendant jumps up, said &#8212; your honor, may I approach the bench?  Yes, what now?  And he comes up, the prosecutor comes up.  He says &#8212; I need to make a motion to withdraw as counsel.  He said &#8212; we got the jury panel sitting there, you can&#8217;t withdraw now.  He said &#8212; but I got to, judge.  He said &#8212; my client just told me, if I lose, he&#8217;s going to kill me.</p>
<p>(Laughter)</p>
<p>And he said &#8212; I can&#8217;t &#8212; you know, I got a wife, I can&#8217;t work under that kind of pressure.  And so the judge went &#8212; oh, good grief.  So he calls the defendant up, doesn&#8217;t read him his rights or anything.  He said &#8212; look, your attorney here just told me that you said if he loses the case, you were going to kill him.  Did you say that?  And he said &#8212; yes, I did, he ought to win.  You know, I ought to be found not guilty, this is crazy.  And he said &#8212; but you understand, if I grant his motion to withdraw, and we got the jury panel here, we&#8217;re ready to go, I&#8217;ll have to delay the trial, I&#8217;ll have to appoint another attorney.  If I did all that, are you going to tell him the same thing?  And he said &#8212; well, yes I am.  No matter who the lawyer is, they ought to win.</p>
<p>(Laughter)</p>
<p>So the judge took a deep breath and said &#8212; well, if we&#8217;re going to lose a lawyer, might as well be you, Mr. Walker.  So your motion&#8217;s denied.</p>
<p>(Laughter)</p>
<p>So you find out, sometimes sacrifices have to be made.  You know?</p>
<p>(Laughter)</p>
<p>And that brings me to the topic I was asked to talk about &#8212; the military and the sequester of the military.  Sometimes sacrifices have to be made.</p>
<p>But I want to remind you, all of you here &#8212; you love the Constitution, you appreciate it for what it is &#8212; the greatest founding document in the history of mankind.  And I heard somebody ask Justice Scalia once, in a little group we had &#8212; do we have the most free nation in the history of the world because of our Bill of Rights?  And he said &#8212; no!  I love the guy &#8212; well, no, of course not.  He said &#8212; the Soviet Union had a better Bill of Rights than we do.  And then I remembered, I did a college paper on that.  They did have a better Bill of Rights.  They just didn&#8217;t honor any of it, you know.  He said &#8212; no, what made us the greatest country, more freedoms than any other country in the world, is the Founders did not trust government.  That&#8217;s why.  And so they were very picky about the powers they gave government.</p>
<p>And if you look at the Preamble &#8212; we the people, in order to &#8212; and one of the specified purposes is to provide for the common defense.  You know that.  And it wasn&#8217;t enough that they used something in such general terms like that, at the beginning of the Preamble &#8212; in Article 1, Section 8, when it talks about that Congress shall have the power to provide for the common defense.  And then it goes on and sets out a whole bunch of stuff &#8212; to declare war, and one y&#8217;all talk about all the time &#8212; the granting of letters of mark and reprisal, right?  Y&#8217;all talk about that all the time &#8211;</p>
<p>(Laughter)</p>
<p>&#8211; mark and reprisal.  Actually, a couple of us were talking about that yesterday.  And I made a mistake.  I said &#8212; Andy McCarthy and a few others &#8212; I said there were letters of reprisal granted in World War II.  And John, you said &#8212; I was thinking it was the War of 1812.  And actually, it wasn&#8217;t letters of reprisal that were granted in World War II; I went back and looked it up last night.  It was the letters of mark that were done in World War II.  The Congress granted letters of mark to Goodyear Blimp, so that they could carry guns and shoot at submarines on behalf of the government.  But anyway, not used a whole lot.</p>
<p>(Laughter)</p>
<p>But Congress makes rules concerning captures on land and water, to raise and support armies, to provide and maintain a navy, to make regulation of the land and naval forces, to provide for calling forth the militia to execute laws of the union, suppress insurrection, repel invasions, provide for organizing, arming and disciplining of the militia; and for governing such part of them as may be employed in the service of the United States.</p>
<p>Course, one of the specified duties is the power to establish tribunals, which is why when President Bush established a military tribunal, that was wrong.  He didn&#8217;t have the power to do that; that&#8217;s a congressional power under Article 1, Section 8.  And so the Supreme Court actually did the right thing &#8212; they threw it out.  And then Congress came back and set up the Military Commission Act of 2006, where it was legitimate that people who were captured could be tried in a military commission.  And that was legitimate constitutionally.</p>
<p>Now, just to do a little check &#8212; because I had to go back and check to find out for certain what the answer was &#8212; anybody here make a guess &#8212; 1962, before all of the LBJ programs, before the Great Society &#8212; what percent of our federal budget was for defense?  Anybody got a guess?  Forty for defense?  Pardon?</p>
<p><strong>Unidentified Audience Member:</strong> 5.6?</p>
<p><strong>Louie Gohmert:</strong> 5.6?  Actually, depending on whose numbers you trust &#8212; CBO, OMB &#8212; it was between 48 to 52 percent of the federal budget was for defense.  &#8217;62.  That was before Vietnam even really got started.  We had advisors over there.  Basically half.</p>
<p>And now, right now, even before the sequester, anybody want to hazard a guess what percent of our budget is for defense?  Ten?  That&#8217;s not a bad guess, but it&#8217;s actually &#8212; depending, again, whose numbers you believe &#8212; 19 to 23 percent.  So basically, in &#8217;62, it was half.  And now it&#8217;s one fifth.  And the Great Society is the thing that&#8217;s intervening.  When we declared a war on poverty, and then got our rear ends kicked by poverty.  They didn&#8217;t even have guns, and we lost that war, you know?</p>
<p>(Laughter)</p>
<p>When you declare war on somebody or some thing, and 50 years later you keep getting buried every year by your enemy, it&#8217;s time to give that one up, isn&#8217;t it?  You know?  Because we&#8217;ve lost.  We were doing better before we declared the war.  But I think if we don&#8217;t get this turned around &#8212; and I&#8217;m not going to call the guy&#8217;s name, because I think he&#8217;s so wrong on so many things, but some guy called the World War II generation the greatest generation.  And they may&#8217;ve been, but I think the Founders were the greatest generation myself.</p>
<p>(Applause)</p>
<p>And there were great sacrifices in World War II.  But how many people would&#8217;ve had the nerve to do what the government of Virginia did, when he [said] to the artillery &#8212; why are you not firing at the headquarters of all the British officers?  And they said &#8212; sir, that&#8217;s your home.  He said &#8212; it&#8217;s where the enemy officers are; you&#8217;ve got to take it out.  They took out his home.  I mean, people would understand nowadays if &#8212; well, course, he would want to preserve his home.  Not back then &#8212; the idea was to win.  And they made those sacrifices, and they didn&#8217;t think about it.</p>
<p>So is there anybody in the history of our country, any generation, that can compete for worst generation in American history if they were so self-absorbed, so narcissistic, that they couldn&#8217;t stop spending money on their generation, even though it was for things that didn&#8217;t work and made them worse off than they were before, but they still couldn&#8217;t stop spending?</p>
<p>Can you imagine a parent going to a bank and saying &#8212; I need a loan?  For what?  I can&#8217;t stop spending money on myself, you know.</p>
<p>(Laughter)</p>
<p>Well, I mean, we&#8217;re in the business of making loans.  What&#8217;s your collateral?  Well, I don&#8217;t really have collateral, but I brought my little children with me.  And I&#8217;m willing to sign anything you want to pledge that someday they or their children, or their children, will pay back what you loan to me.</p>
<p>(Laughter)</p>
<p>I mean, would you consider perhaps that person was part of a really bad generation, you know?</p>
<p>(Laughter)</p>
<p>And we&#8217;ve done it across the board.  And people who got elected for all the right reasons, and especially with the conservative wave of two years ago &#8212; the biggest conservative-wave election in our history &#8212; and they ran for the right reasons, and they got elected by people who voted for them for the right reasons.  And then, somewhere along the way, they got convinced that the only way we can really win is if we&#8217;re a team.  And we can only have one quarterback in the team, and there&#8217;s no &#8220;I&#8221; in &#8220;team.&#8221;  Somebody pointed out there is an &#8220;I&#8221; in &#8220;win,&#8221; though.</p>
<p>(Laughter)</p>
<p>And I love football, my favorite sport.  But I am sick of the football metaphors.  And as I&#8217;ve said in conference &#8212; look, I love being part of the right team.  I understand we can only have one quarterback.  But when he calls a play to run to the wrong end zone, I&#8217;m not blocking for him.  You know?</p>
<p>(Laughter)</p>
<p>(Applause)</p>
<p>So, a little background on the sequestration, how it came about.  Some of you remember, because you&#8217;ve mentioned to me about Cut, Cap and Balance.  We&#8217;ve had speakers brought it up.  Ron brought it up.  And that was when I first met Ron.  We had a little meeting of people that were pushing for Cut, Cap and Balance; although at that first meeting &#8212; I don&#8217;t know if you remember, Ron, but I was saying &#8212; look, this is the right thing to do.  But we need to clean it up some.  There&#8217;s not enough enforcement in here.  If we pass this thing, there&#8217;s not enough teeth for enforcement.  And it wasn&#8217;t Ron, but one of the other senators said &#8212; Louie, for heaven&#8217;s sake, this is the best we got, you got to get onboard.  And it became clear we were not going to put more teeth to make sure it was as enforceable as it should&#8217;ve been.  But it was the best thing we had.</p>
<p>And we passed it in the House.  And that was a big deal to get our Speaker to bring it to the floor.  Because it was a conservative thing to do.  And that afternoon, he was negotiating for something else.  And next day, the headlines were not that the day before we passed this fantastic concept of Cut, Cap and Balance; it was what the real negotiations were that were going on the day before.  They didn&#8217;t even talk about Cut, Cap and Balance.</p>
<p>If we want to do the right thing, we can&#8217;t just pass it in the House; we have to be willing to stand behind it, instead of saying &#8212; okay, now, that&#8217;s behind us.  Or, as our leadership did after the debt ceiling bill passed, we were actually told &#8212; well, guys, the great news is, now that we&#8217;ve got that thing passed, and the debt ceiling is off the table, now the Senate&#8217;s got all they want, so we can work on all the things we really want to work on.</p>
<p>You&#8217;re not going to pass them if you don&#8217;t have leverage to get the Senate to bring them up and vote for them.  But the good news is, now we can just work on what we want to pass.  Well, shouldn&#8217;t it be about getting it passed into law?  Is it really just about getting it through the House?  We passed a lot of great stuff, including two fixes to the sequester.</p>
<p>But when we found out what was in the sequester &#8212; and I am anal enough, I do try to read this stuff.  I read Cut, Cap and Balance before we voted on it.  I read the first 1,000-page Obamacare bill.  And that was the one voted out of committee.  And then, what came to the floor was a 2,000-page bill.  And then, the one that became Obamacare was a 2,500-page bill.  And I read all of those.  And they were a disaster.  But they were really not about healthcare; they were about the GRE &#8212; the government running everything &#8212; that&#8217;s what they were.</p>
<p>But anyway, when I found out what&#8217;s in the sequester bill &#8212; this isn&#8217;t armchair quarterbacking; this is in the fight when it&#8217;s starting &#8212; I got up &#8212; and this is one of the reasons that the only chairmanship I have is as the co-chair of the Thursday morning prayer breakfast.</p>
<p>(Laughter)</p>
<p>Because that&#8217;s the only one the Speaker doesn&#8217;t get a voice in.  But anyway, I said &#8212; and I&#8217;m at the member mic, and Speaker&#8217;s at the front mic, and I said &#8212; in high school &#8212; I grew up in a small town in East Texas &#8212; I said &#8212; in high school, I had a friend whose father had a gambling problem.  And one night, he had almost the best hand you can have in poker at all, and he was out of chips, out of money, so he put his home on the table.  And somebody there had the one hand better, and he lost his home.  And Mr. Speaker, I&#8217;ve known since high school &#8212; I don&#8217;t care how good you think your hand is, you never put your national security or your home on the table for negotiation.  It&#8217;s non-negotiable.</p>
<p>And I was told, just calm down, Louie.  You know, the sequesters will never happen.  And I said &#8212; of course they&#8217;re going to happen.  He said &#8212; no, no, the Super Committee will reach an agreement.</p>
<p>(Laughter)</p>
<p>And we have assurance in the sequester that it&#8217;ll reach an agreement.  Because if it doesn&#8217;t, there may be a few hundred billion dollars cut out of Medicare.  And I said &#8212; have we forgotten?  Obamacare, without a single Republican vote, cut $700 billion out of Medicare.</p>
<p>So the only way next year, in 2012, the Democrats can run a commercial condemning Republicans for caring about our rich friends, and not caring about the seniors, is if they prevent the Super Committee from reaching an agreement.  Then they can say &#8212; we cared more about our rich friends not being taxed than we did about the seniors getting healthcare, and they can run that commercial all next year.  If the Super Committee reaches agreement, they have no plausible basis to run that commercial.  So of course it&#8217;s not going to reach an agreement.  He said &#8212; it will, and you don&#8217;t have to worry about it.</p>
<p>And I think one of the reasons that the Speaker said &#8212; after I nominated Newt Gingrich for Speaker &#8212; the first words out of his mouth were &#8212; well, I love you too, Louie.  And it was heartfelt, I could tell.  But anyway &#8211;</p>
<p>(Laughter)</p>
<p>Because in January, when we&#8217;re talking about the sequester, and the Speaker said &#8212; well, I&#8217;m going to do what I can to stop it &#8212; I got up to the microphone and reminded him what he had said in July of 2011.  I know that&#8217;s part of why he loves me so.</p>
<p>But anyway, the sequester now &#8212; after two years after the greatest conservative-wave election in American history &#8212; is now the only game in town for making any cuts.  I don&#8217;t think we got a choice.  As we&#8217;ve been told repeatedly, maybe the greatest national threat is our overspending.  We got to make some cuts.</p>
<p>But as far as the cuts to the military, let me just give you some facts.  Over the next 10 years, the 285-ship navy could decline to 230.  These are estimates made by different sources.  That&#8217;s the smallest level since 1915.  And of course, you know that&#8217;s around the time we started building our navy, and Roosevelt &#8212; Teddy &#8212; not FDR, but the other Roosevelt &#8212; sent the navy around the world, and we became and international player.</p>
<p>And by the way, it was the Democrats, as they have now admitted, that actually forced the sequester on us.  And you may&#8217;ve heard a replay, but in November of 2011 the President of the United States said &#8212; I&#8217;m quoting &#8212; already, some in Congress are trying to undo these automatic spending cuts.  My message to them is simple &#8212; no.  I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending.  Was his idea.  Was his staff&#8217;s idea.  And then he comes out and condemns us repeatedly for these horrible sequesters we came up with?</p>
<p>Now, I know some of y&#8217;all have said &#8212; you guys have just got to call him for the lies.  In the Senate and in the House, the rules are the same.  And y&#8217;all got to understand, if we get up on the floor of the House, or Jeff or Ron get up, as they would like to, and say, you know, this is a lie that the President has told, then you&#8217;re the one that gets in trouble.  Because you have violated the rules of decorum of the House and Senate.  You can&#8217;t do that.</p>
<p>Now, one article awhile back said some people are getting dangerously close, like Louie Gohmert, who said &#8212; now, we know under the House rules that the Speaker cannot lie.  But whoever&#8217;s putting those words in his teleprompter sure is.</p>
<p>(Laughter)</p>
<p>So anyway &#8211;</p>
<p>(Applause)</p>
<p>But the Air Force says that they will likely lose 200 or more airplanes.  The current average &#8212; so you understand &#8212; current average of our planes in the Air Force is 22 years old.  And the average for tankers is 47 years old.  The House Armed Services Committee says sequestration cuts would likely include terminating the Joint Strike Fighter &#8212; best plane we&#8217;ve come up in decades.  It could cause the scratching of the new strategic bomber, delaying new submarines, shrinking aircraft carrier fleet, and terminating our coastal combat ship program.  It is serious stuff.</p>
<p>And one of the things I think you&#8217;ll see is being talked about is that we will likely have a bill that will &#8212; and I don&#8217;t know what the Senate will do &#8212; gosh, I wish Jeff and Ron were in charge down there, wouldn&#8217;t that be awesome?  But somebody else is, who is from a place where they like to gamble.</p>
<p>(Laughter)</p>
<p>Oh yeah, so it&#8217;s a gamble, let&#8217;s cut our military down to nothing, you know, whatever.</p>
<p>But the release statement from House Armed Services Committee is &#8212; precisely at the moment when advanced military technology is spreading around the world, sequestration would force America to make severe cutbacks eroding our technological advantage.  So we&#8217;re talking about a bill that would give the military some flexibility, so that they don&#8217;t have to leave somebody stranded somewhere.</p>
<p>Course, the military would never leave somebody stranded, say, if we had somebody hypothetically in Benghazi.  If they were left to their own devices, they would probably, if they&#8217;re left to their own devices, get a plane there in quicker than 20 hours &#8212; hypothetically.  But anyway, that may be a bill that you&#8217;ll see go through.  It could end up, hopefully, passing both houses; at least give the military some flexibility.</p>
<p>Now, I&#8217;ve heard a lot of people say &#8212; but if it&#8217;s across-the-board cuts, it&#8217;s kind of dangerous to single out the military for exceptions where they don&#8217;t have to have the same cuts.  Folks, it&#8217;s not across-the-board 11 percent cut, as it is for most every department.  The military &#8212; it&#8217;s going to cut &#8212; well, let&#8217;s say, around $85 billion will be cut the first year.  That&#8217;s the first year of sequester.  Half of that is of the military.  It&#8217;s not across-the-board 11 percent.  It whacks the military harder than anybody.  So it is a very serious cut.  But again, we&#8217;ve got to make cuts.  And hopefully, we can allow them some flexibility to fix that after the cuts occur.</p>
<p>So the other thing that breaks my heart, and is so opposite common sense &#8212; and some of y&#8217;all have pointed out &#8212; but remember, in Washington, common sense isn&#8217;t common, and I get that &#8212; but we keep rewarding our enemies under this administration.</p>
<p>You know, I was real little, in elementary school, and we had a couple of bullies.  One of them was about two heads taller than me.  He had failed two or three grades.  And I learned, you can&#8217;t pay a bully to respect you.  You actually have to take your football helmet and whack him in the back of the head when he doesn&#8217;t see it coming, before he&#8217;ll leave you alone for the rest of your life.  And actually, people noticed in high school &#8212; he blocks better for you than anybody else playing quarterback.  I don&#8217;t know, we&#8217;re good friends.</p>
<p>(Laughter)</p>
<p>But you respect each other.  But you don&#8217;t do it by paying your enemies.  And I have more and more members of Congress say &#8212; Louie, I&#8217;m quoting you, I don&#8217;t usually give you credit, but my line has been, for eight years &#8212; you don&#8217;t have to pay people to hate you; they&#8217;ll do it for free.  You know?</p>
<p>(Laughter)</p>
<p>And we keep paying countries.  For heaven&#8217;s sake, even sending them F-16s and tanks.  And mark my words, those tanks and F-16s will someday kill Israelis and Americans.  It&#8217;s not a smart idea.  Even though there are people who are good friends, who say &#8212; look, it&#8217;s not like you think, Morsi is going to get thrown out, and we still have good connections with the military.  I said &#8212; yeah, right, but he threw out the people that were against him and put in people that could control [them].  They&#8217;re not our friend.  Oh yeah, they&#8217;re our friend.  So when Morsi goes out, we&#8217;ll have this friendly force in Egypt.  Are you kidding me?  You don&#8217;t take a chance like that.</p>
<p>And again, I don&#8217;t find that those who betray Israel will be blessed.  It&#8217;s not going to happen.  And I was asked by Dr. Bob, you know, what&#8217;s the most frustrating thing &#8212; it&#8217;s people who you&#8217;re close to who end up not doing the right thing or breaking promises.  Because you expect the Left to be who they are.  And I know, from some of the comments, there are a number of Jewish people here &#8212; I&#8217;m sick and tired of people who are Jewish feeling they&#8217;ve got to beat themselves up for some reason and beat up Israel.  That&#8217;s got to stop.  Israel is the greatest friend we&#8217;ve got.</p>
<p>(Applause)</p>
<p>So it&#8217;s time to get over that.  And there is an old concept &#8212; you encourage your friends, and you go after your enemies.  Khadafi didn&#8217;t just abandon his nuclear program.  Because all of a sudden, there was newfound respect.  We invaded Iraq.  And he threw up his hands and said &#8212; what do you want to know?  You can come in, you can &#8212; you know, he was scared.  That&#8217;s how you get respect.  Another way of hitting them in the head with a football helmet when they&#8217;re not looking, you know?  You have to make sure they understand.</p>
<p>Mike [Lorren] and I have talked about this.  And he said the reason Iran is not stopping &#8212; it&#8217;s not because Israel is not a credible threat to attack them.  Everybody believes Israel is quite capable of going ahead and attacking them, but that&#8217;s not deterring them.  The reason they&#8217;re continuing is because the United States is not a credible threat to attack them.  If they honestly believed that we would attack them, they would stop today.  Immediately.  But they don&#8217;t think we will.  And I&#8217;m hearing behind the scenes that this administration has put so much pressure on the Israeli government that they &#8212; well, let&#8217;s say that they may&#8217;ve decided they can&#8217;t do anything because of the threats from this administration.</p>
<p>Now, the people that helped get Obama elected, who think Israel is a good idea, need to wake up and tell him they&#8217;re our friends, let&#8217;s preserve them.  And then it would happen.  Because that&#8217;s the only kind of thing he responds to.  But he throws our friends under the bus and rewards our enemies.  And I&#8217;ve taken all kinds of grief by saying &#8212; with what he has done in Egypt, in Libya &#8212; he has jumpstarted the new Ottoman Empire.  And I&#8217;ve been called all kinds of names.  But look at the map.  Look at what&#8217;s happening, and surrounding Israel.  And there will be a price to pay for being such an enemy, in reality, to Israel.</p>
<p>I don&#8217;t know if anybody here noticed, but back in May of 2010, I read that the United States government, for the first time since Israel came back into existence, had sided with all of Israel&#8217;s enemies and demanded that they disclose any and all nuclear weapons.  You may not have noticed, if you noticed that, that it was within two days, the flotilla leaves Turkey to go challenge the Gaza Strip blockade.  It&#8217;s not an accident.  You study history, you know that a nation&#8217;s enemies, upon seeing that nation&#8217;s greatest ally moving away from them, are provoked into moving against them.  It&#8217;s just the way it works.</p>
<p>North Korea thought that South Korea &#8212; some people say it was not the cause, but it was certainly timely &#8212; when you had an administration official say South Korea is basically outside our sphere of influence, North Korea moved south.  I mean, it&#8217;s provocative.  And when we show distance between us and Israel, it provokes Israel&#8217;s enemies, who are our enemies.  So why not be a friend &#8212; even if you don&#8217;t like Israel, why not be a friend to the enemy of our enemies that want to destroy us?</p>
<p>You may not be aware, the Northern Alliance, now called war criminals by this administration, fought and defeated the Taliban completely within four months.  You remember that?  By October, we&#8217;d found out where the training occurred, where the terrorist camps were in Afghanistan.  The Taliban was involved.  We didn&#8217;t send 100,000 troops over there; we sent less than 500, around 300 embedded Special Operations, military, and some intelligence.  It&#8217;s one of their greatest victories.  Within four months, the Taliban was totally routed.</p>
<p>And then, a major mistake &#8212; and I didn&#8217;t know this until I met with the Northern Alliance officials overseas a few times, once in Afghanistan, a couple of times other places, where they felt safer.  But we told them they had to turn in all the weapons we gave them to defeat the Taliban.  Said you gave back everything?  Well, not everything.  But we also had given them aerial support.  And they defeated the Taliban without a single American being killed.  You know, there were some hurt.  Riding in a wooden saddle for 10 days caused blood blisters on some of our guys&#8217; rear ends, but nobody was killed.  And these guys, now called war criminals, that we&#8217;ve abandoned, that are going to be targeted for killing the minute we pull out &#8212; they did our bidding, and they defeated our enemy.</p>
<p>Now, I&#8217;ll do this very quickly.  But we don&#8217;t have to have any more people killed in Afghanistan to win.  And I know a lot of people hadn&#8217;t thought about it.  But meeting with the Northern Alliance, there&#8217;s a number of things very clear that we could do, and we could be out sooner than the President says.  We should&#8217;ve been out years ago.  Occupiers don&#8217;t do real well in that part of the world.  Somebody that knew history said &#8212; well, Alexander the Great &#8212; he conquered that area.  He died on the way out.  I don&#8217;t count that as a big win.</p>
<p>(Laughter)</p>
<p>But anyway, it&#8217;s a tough place to try to occupy.  And we became occupiers after we won.  And we forced this centralized government on them, when they&#8217;ve never been centralized.  And you can&#8217;t have a centralized government there unless it&#8217;s really corrupt.</p>
<p>And I didn&#8217;t know, until I really got involved &#8212; under the constitution we gave them, each region or state does not get to elect their governor.  The president, President Karzai, appoints them.  You think there are any kickbacks involved?  They don&#8217;t get to elect their mayors.  We gave them this constitution and said Sharia law is the law of the land.  The last Christian church meeting publicly has had to abandon it.  The last publicly professing Jew has had to leave.  After we gave them this government.  They don&#8217;t get to &#8212; they appoint the police chiefs &#8212; think any corruption there?  Karzai says there&#8217;s none, so I&#8217;m sure he&#8217;s right.</p>
<p>But anyway, the Northern Alliance guys say &#8212; look, if you will just help us amend our constitution, allow us to elect our governors, allow us to elect our mayors, select our own police chiefs, it&#8217;ll help end the corruption, and it will strengthen our regions.  And if you make our government more like yours, where &#8212; they don&#8217;t realize how little power the states have &#8212; but where the states have most of the power, then we can stop the Taliban.  The way it is, they can knock off the top people in the centralized government, and they&#8217;ve taken over.  But if you give the power back to the states, we can keep them from taking over.  But you got to let us elect our people in our own areas.  Why wouldn&#8217;t Americans be for that?  Why did we give them a government full of corruption?  Well, we did.</p>
<p>And I said &#8212; well, what makes you think that we could have that kind of power, to get an amendment through that would be that sweeping a change?  And Massoud, whose brother was called the Lion of [Pashtun], the great hero from the Russian fights, the one person that they believed could&#8217;ve united all of Afghanistan with America&#8217;s help &#8212; they killed him the day before 9/11.  The Taliban knew what they were doing.  We didn&#8217;t know what was going on.  They knew.  We figured out [they will unite] behind Massoud.</p>
<p>Well anyway, his brother, a smart guy &#8212; but he said &#8212; our Afghan budget in American dollars is around $12.5 billion.  He said &#8212; do you know how much of that we pay ourselves with Afghan money that we collect as a government?  No.  $1.5 billion of the $12.5 billion comes from us.  The other $11 billion comes from other countries, and that means mainly you.  You think you&#8217;ve got some leverage to help us get an amendment through our constitution?  Well gee, maybe we do.</p>
<p>Anyway, I met with Dana Rohrabacher and some Baloch officials.  They&#8217;re the largest part of Pakistan.  They have most of the natural resources in Pakistan; that&#8217;s where they get their natural resources.  And they&#8217;re tired of being terrorized.  The Pakistani government thinks the way to keep them suppressed is go through, terrorize their town, kill, rape, destroy crops, tear them up, keep them subjugated to the radical Islamic government, basically.</p>
<p>And I had a thought.  And next time we met with the Northern Alliance officials, I said &#8212; what would you think if some of us in the US government started pushing for an independent Balochistan?  And half of them didn&#8217;t speak English.  But after the interpreter interpreted, even General Dostum &#8212; all their eyes got big, and Dostum said &#8212; that would change everything.  The arrogance of Pakistan would go away overnight.  You would see them coming to you.</p>
<p>Dostum said &#8212; I was meeting with some &#8212; he&#8217;s a legend over there because of his legendary fighting.  But he said the Pakistani leaders were saying recently &#8212; we&#8217;re sick of the United States.  Now they&#8217;re offering the Taliban to buy them offices in Dubai, to let their criminals out of prison.  They ought to be buying us stuff.  We&#8217;re the ones supplying the Taliban.  They ought to be offering us bribes, not the Taliban; they&#8217;re just our puppets.  And he said &#8212; you start talking about an independent Balochistan, that attitude will change overnight.</p>
<p>So I did an op-ed.  And Dana said &#8212; you and I agree on a position.  I had one line in there that mentioned Balochistan.  I said maybe it&#8217;s time to start talking about an independent Balochistan, since the supplies are coming through the Baloch area to the Taliban, to weaken the Taliban and to take them down.</p>
<p>A week later, I get an English translation of an op-ed in Pakistan&#8217;s largest newspaper.  And they referred to this congressman from Texas named Louie Gohmert, who is now is now advocating for an independent Balochistan &#8212; that obviously being from Texas, he knows all our natural resources come from the Baloch area.  And I&#8217;m sure, being from Texas, they want &#8212; you know, Texas just wants their natural resources.  And surely, a congressman wouldn&#8217;t bring something up like that unless it was all the talk behind the scenes in Washington.</p>
<p>But anyway, they said &#8212; regardless of the motivation, maybe it is time to change the strategy of our military away from terrorizing the Baloch people, try to work out a peace with the Baloch people, and stop supplying the Taliban, and worry more about Pakistan than the Taliban in Afghanistan.  There are ways to win without killing more Americans.</p>
<p>This last thought &#8212; one of the fathers of one of the Seal Team Six members that got a target on their backs after Vice President Biden outed the seal team &#8212; they went to the briefing by the military for family members of Seal Team Six members that were killed on the Chinook, that were ambushed.  And I&#8217;ve read the C130 transcripts of the cockpit that was watching all this, was told they couldn&#8217;t fire at these people because there might be civilians in the area.  They watched them dissemble their equipment and fade back.  And they asked for permission to take them out and was denied &#8212; there might be civilians in the background.</p>
<p>And the family members didn&#8217;t even know this, but one of the fathers said &#8212; since you knew this was such a hotspot, and nobody had been able to land there recently, why didn&#8217;t you just send in a drone?  And the admiral said &#8212; because we&#8217;re trying to win the hearts and minds of their people.</p>
<p>Folks, that&#8217;s not the purpose of the military.  We give the military money, it ought to be to kick rears, break things, and come home.  And we could do that in Afghanistan without getting another American killed if we just empower the enemy of our enemies.  We should not be the worst generation in American history, but that&#8217;s where we&#8217;re headed.</p>
<p>So I thank God for you caring enough do all you do to contribute, to learn, to read, to talk to people.  Because there&#8217;s still hope.  I&#8217;m still running for Congress because I know there&#8217;s still hope.  And you&#8217;re part of that hope.  And I really believe, if we&#8217;ll keep pushing and do the right thing strategically, we don&#8217;t have to be the worst generation in history.  We can be one of the better generations.  Because on the brink of complete failure of the system that the Founders created, we brought it back and put it on the right path.</p>
<p>Thanks for letting me be here with you.</p>
<p>(Applause)</p>
<p><strong>Unidentified Audience Member:</strong> My question is about the sequestration process &#8212; what&#8217;s in store &#8212; with an eye on baseline budgeting, what the cuts really are going to be in the short term, and whether it&#8217;s a manufactured crisis that&#8217;s being peddled by Obama and, if so, is there an upside for us?</p>
<p><strong>Louie Gohmert:</strong> Well, going back to front &#8212; I don&#8217;t think it&#8217;s a manufactured crisis.  I mean, there&#8217;ve been plenty of those.  The Fiscal Cliff was a manufactured crisis.  We keep manufacturing these.  But it&#8217;s not &#8212; it is a manufactured crisis as far as financially for the country.  I mean, manufactured in the sense that this has been coming for a long time, it really is a problem, we can fix this &#8212; it&#8217;s not a crisis, but we got to start now.</p>
<p>But yeah, the baseline budgeting &#8212; and by the way, I filed a bill, in all four Congresses I&#8217;ve been in, to eliminate the automatic increase in every budget and go to a zero-baseline budget.  I heard Rush Limbaugh talk about it in the &#8217;90s, when I was a judge, never dreaming that I would be in a position to do something.</p>
<p>But anyway, I actually got a promise from Speaker Boehner that he would being the bill up.  I said &#8212; I don&#8217;t care whose name is on it.  If you will promise &#8212; and he promised.  He said &#8212; but all I&#8217;ll promise is if Paul Ryan brings it out of committee.  Well, I got a promise from Paul he&#8217;d bring it out of committee.  He&#8217;s been on my bill every time, and he supported it.  Back in &#8217;05 and &#8217;06, when we were in the majority, the Chairman of the Budget did not want to support it.</p>
<p>So it passed the House last year, year ago.  And I&#8217;ve got to give credit, you know, Speaker Boehner kept his word.  He brought it to the floor after Paul committee-passed it.  They had Rob Woodall, a great &#8212; well, he was freshman last year &#8212; on the Budget Committee, put his name up front on it.  And he and I are working to do that again.</p>
<p>It mainly is cutting the rate of growth.  But the trouble is, it&#8217;s more than that for the military.  It really is going to hurt the military.  The $42 billion in cuts &#8212; that is a real problem.</p>
<p><strong>Unidentified Audience Member:</strong> (Inaudible question &#8212; microphone inaccessible)</p>
<p><strong>Louie Gohmert:</strong> Yeah.  All of that is manufactured.  Yeah, he&#8217;s asking about the long delays at the airport and all that.  Now, understand, you could very well have those.  I know when I was at the Army in Fort Benning, when President Carter was President, we had severe cuts.  And I thought some of the big perks for some of the flag officers would go away.  None of those went away.  It was all the things the public could see that got cut first.  So I think you can anticipate that.</p>
<p>And those could very well be real delays.  They could be, you know, very real problems with planes.  Because it&#8217;s likely the President will give orders so that it will at least appear he wasn&#8217;t lying about this.  But you can expect a show of problems, but I think they&#8217;ll be self-inflicted.  I don&#8217;t think they&#8217;re necessary.  It&#8217;s just a matter of priority.  But you can expect that, and you need to be ready to answer.</p>
<p>There were all kinds of fat in their budget at TSA and other places.  They just made the cuts where they would hurt people the worst to try to make the point.  And then you can point out to your Democratic friends &#8212; which is why you need to become a Republican &#8212; any party that would go about hurting the public just to make a point is not somebody you ought to be supporting in the next election.  So anyway, you&#8217;re going to feel it, but not because you have to.</p>
<p>Now, let me make this point &#8212; all of the government agencies are supposed to get an 11 percent cut.  One of the things I&#8217;ve been mad at my leadership about is not the fact that they forced us to cut our own House budgets by 11 and a half percent over last two years.  We were able to do it.  We have one less employee in my office than we used to have.  So we got nine where we had 10 in the Washington office.  So we all adjusted in the House.</p>
<p>The Senate &#8212; you know, Harry Reid was not about to cut the Senate&#8217;s budgets over the last two years.  But the thing is, that gives us the moral authority to tell every agency, every department, we did it to ourselves.  And by the way, I think that&#8217;s good politically.  People in America don&#8217;t know we cut our own budgets.  Use that for the moral authority to say to every department and agency &#8212; we did it to ourselves, now we&#8217;re doing it to you.  And you can do this.</p>
<p>Well, instead, this sequester &#8212; on top of the 11 and a half percent we cut our own budgets in the House &#8212; cuts another 11 percent.  We will have cut nearly 23 percent in three years from our own budgets.  And as my Chief of Staff has said, you know, we&#8217;re in a war here to save America, and we keep cutting our own supply line while the other side is not cutting their supply line.  But those will be real cuts in the House for our own staff.</p>
<p><strong>Unidentified Audience Member:</strong> Louie, I was really incensed when I heard that the government gave F-16 planes to Egypt and to their man, Morsi.  So I told a Democratic friend of mine &#8212; aren&#8217;t you incensed about that?  His answer was &#8212; do you want China to supply those planes?  How do you respond?</p>
<p><strong>Louie Gohmert:</strong> Actually, there is such unrest there.  If China is foolish enough to get embroiled in that, it will cost them tremendously.  That act would cost them, it would hurt them.  They might think it&#8217;s an opportunity.  But it kind of reminds me what my former preacher used to say about sin.  He says &#8212; it will keep you longer than you meant to stay and cost you more than you meant to pay.  And I think that&#8217;s what would happen if China gets involved.</p>
<p>But when I was in Israel, talking to one of the ministers, about a year ago, he said &#8212; oh, you just missed the Chinese emissaries.  They come very regularly, and especially when they think that the US has done something to snub us.  And they come by, and they say the same thing every time &#8212; are you ready to acknowledge that the US is really not your friend?  Are you ready to acknowledge that they will throw you away just like they have their other allies?  Because we know one of these days you&#8217;re going to come to that realization.  And when you do, just give us a call.  We&#8217;re ready to be your friend, and we&#8217;ll be a better friend than the United States has ever been.  They do that routinely.  They move in Africa, they move in South America.  They move where we anger people.  And it would not be &#8212; it&#8217;d be the same thing in Egypt.</p>
<p>But good grief, what a mistake for them to get &#8212; see, they&#8217;re still concerned about the Uighurs and the radical Islamists in China.  It would be very dangerous, they&#8217;d have to understand, to help give that a jumpstart again.</p>
<p><strong>John Lott:</strong> Yes, thanks very much for your great speech this morning.  My name is John Lott.</p>
<p>I was just wondering &#8212; when you&#8217;re talking about this $40 billion &#8211;</p>
<p><strong>Louie Gohmert:</strong> The John Lott?</p>
<p><strong>John Lott: </strong> Right, [I guess so].</p>
<p>(Applause)</p>
<p><strong>Louie Gohmert:</strong> You and I have talked.  I appreciate so much everything you do.</p>
<p><strong>John Lott:</strong> Oh, well, likewise.  Anyway, thank you.</p>
<p>In the military right now, we&#8217;re spending like $10 billion a year on green energy type things.</p>
<p><strong>Louie Gohmert:</strong> Yeah.  You&#8217;re right.</p>
<p><strong>John Lott: </strong> There&#8217;s other things.  So why?  Is maybe part of the response just to point out the things that the President would be cutting are important, and yet he has these pet projects that are wasteful &#8211;</p>
<p><strong>Louie Gohmert:</strong> That&#8217;s a great idea.  That&#8217;s a great idea.  And you&#8217;re right, we&#8217;re spending about $10 billion on green energy for the military.  That&#8217;s insane.  But even without checking, I can guarantee you that will not be something that gets cut by this administration.  So even if we pass the bill, as I hope we do, to give the military more flexibility, I&#8217;m sure that will be one of the things that won&#8217;t get cut.  So that&#8217;s something &#8212; I&#8217;m already thinking I got to get that on a poster and use it on the House floor.  So thank you for reminding &#8212; great, great comment.</p>
<p><strong>Unidentified Audience Member:</strong> Thank you for all you&#8217;re doing.  This is kind of a devil&#8217;s advocate question &#8211;</p>
<p><strong>Louie Gohmert:</strong> [Lead to what?]</p>
<p><strong>Unidentified Audience Member:</strong> &#8212; put the brakes on spending.</p>
<p><strong>Louie Gohmert:</strong> Yeah.  It is outrageous.  The people that got elected in the bigger conservative-wave election two years ago ran on that very issue.  Most of us ran on that issue.  In fact, the Speaker of the House made us take the pledge.  I willingly took it.  And it said &#8212; and another reason I&#8217;m loved &#8212; I pulled the pledge out and read it to our leadership more than once, where it says &#8212; basically, if you&#8217;ll put us back in the majority, we will return spending to pre-bailout, pre-stimulus levels, which is fiscal year 2008.  And we will cut $100 billion in the first year.  We could&#8217;ve done that.  We could&#8217;ve kept our promise on that.</p>
<p>And you remember what happened &#8212; as soon as we won the majority, by January, our leadership was saying &#8212; now, remember we pledged $100 billion for a year, and the fiscal year starts October 1st.  So we&#8217;re not talking about a full year.  So we&#8217;re really talking about a two thirds of a year, so we&#8217;re really talking about, you know, maybe $66 billion in cuts, not $100 billion, because it&#8217;s only two thirds of a year.</p>
<p>And then we got to march, to the CR.  And we were told this is not really the place for a fight.  The debt ceiling in July &#8212; that will be the place we&#8217;ll take our stand and we&#8217;ll fight.  So we just kind of need to go along with this.  And then we got the final deal at 10 p.m. on Friday night, when things were going to shut down.  And it was, we were told, cut maybe $28 billion, $29 billion.  It&#8217;s not everything we had hoped, but at least it&#8217;s cuts.  And now we&#8217;re told that actually it didn&#8217;t cut $29 billion; it may&#8217;ve spent $5 billion more.</p>
<p>So we&#8217;ve gone two years without cutting.  We could cut.  And the Founders anticipated that we would be a line of defense, that we don&#8217;t have to worry about the Supreme Court, whether they say something is constitutional or not.  Because we&#8217;ve got Congress, and we have the power of the purse.  And all we&#8217;ve got to do is just shut off the money to something that&#8217;s unconstitutional.  They anticipated we&#8217;d do that.  And we haven&#8217;t.  And there is no way one dime can be spent unless the House agrees to it.</p>
<p>And I know that you&#8217;ve heard repeatedly &#8212; look, we&#8217;re only one half of one third.  Look, we&#8217;re the most important half of the legislative branch from which all money comes.  If we don&#8217;t agree to it, it doesn&#8217;t happen, they don&#8217;t get the money.</p>
<p>So if we just have the courage of our convictions, we could cut off spending to anything.  But as I told you earlier, we were told that &#8212; gee, now that we&#8217;ve got the debt ceiling bill behind us, and we&#8217;ve given him enough debt ceiling increase to get through the election, now we can go about passing the things we want to pass, that the Senate will never take up, which is what happened.  So it&#8217;s just a matter of having the courage of our convictions.  And we could do it.</p>
<p>Actually, I was inspired by Jim DeMint&#8217;s action.  And after hearing a number of House members saying &#8212; look, I&#8217;m under attack, and the only way I&#8217;m going to get help from the party is if I go along on this issue or that issue.  So I&#8217;m with you, but I&#8217;m not going to be back if I don’t tow the line on this so I can get help.</p>
<p>So I started a PAC, and actually trying to build a group &#8212; we need at least 20, and hopefully we&#8217;ll get 25 to 30 &#8212; of people who will be uncompromising.  We can force our party into doing the right thing.  Because if you have [enough, more] than the majority, then you have to be willing &#8212; and I think people in Washington know that I am &#8212; to bring down something important to your party if they don&#8217;t do the right thing on an entire issue.</p>
<p>And also, some of us have been meeting by camera with some senators, conservative Republican senators.  We&#8217;re starting to meet every couple of weeks.  And Rand has kind of pushed that.  But we&#8217;re trying to do just what you suggested &#8212; develop a strategy of consistency and then force our parties to stay consistent.</p>
<p>But you got to have strong leadership to do that.  And if you don&#8217;t have strong leadership, you&#8217;ve got to have enough of a stick over the heads &#8212; I mean, they were ready to kick Michele Bachmann off of Intelligence, and the Speaker had threatened that.  And we were able to delay that action long enough that enough people responded that it scared the Speaker&#8217;s office that they better not kick her off or there&#8217;d be a lot of people coming after the Speaker.</p>
<p>That makes a difference, when people make their voices heard.  It really does.  American people still have that kind of impact, and that&#8217;s what it&#8217;s going to take if we&#8217;re going to get anything done.</p>
<p><strong>Unidentified Speaker:</strong> Steve&#8217;s going to get the last question.</p>
<p><strong>Louie Gohmert:</strong> Okay, Steve.</p>
<p><strong>Steve:</strong> We would all like your strategy to win, your PAC to raise sufficient funds, to be able to hold the line.  But what is the realistic expectation for how this budget crisis winds its way out into the summer?  What do you really expect?</p>
<p><strong>Louie Gohmert:</strong> I think you&#8217;ll see the sequestration &#8212; I think our leaders are concerned enough that if they cave here at the last minute, they may end up out of leadership.  But I&#8217;ve heard that repeatedly for the last few years, and it hasn&#8217;t happened.  But I think you&#8217;ll see the sequester play out through the summer, as you bring up.  And there&#8217;s going to be a lot of wailing and gnashing of teeth.  And what we have got to do &#8212; and I&#8217;m hoping our leadership will be good about it, because actually this week, they&#8217;ve sent out a lot of good messages &#8212; this was the President&#8217;s idea.  And I think we need to hang it around their necks.</p>
<p>And like in California, the bad news is the Democrats control everything.  The good news is you ought to be reminding the public of that every day.  You don&#8217;t like something that&#8217;s going on?  You can&#8217;t blame the Republicans, because your people are controlling everything.  And once you realize the damage that they&#8217;ve been doing, then you come over and support us.  You&#8217;re a minority?  You&#8217;re tired of the way you&#8217;ve been taken for granted, and you&#8217;ve been lured into ruts you can&#8217;t get out of by government benefits, and it&#8217;s not enough to help you?  And you really want to do something with your life?  Support Republicans, and [we'll get this done].</p>
<p>This is the opportunity we have to keep pointing out the truth and drowning out all of those mainstream, lamestream media moguls that don&#8217;t do their jobs.  And so I think it&#8217;s a chance for us to do well.</p>
<p>I thought that we &#8212; I didn&#8217;t think &#8212; we had 21 people who had signed in writing, their own handwriting &#8212; I will not vote for John Boehner for Speaker, and sign their names.  We thought if we got it in writing, they&#8217;ll be afraid to back out.  Because they&#8217;ll know we can wave that around in the future.  But we had 13 that did not vote for the Speaker.  It fell apart, but at least a couple of our guys got chairmanships, you know, and some good things.  So it&#8217;s okay to break your word if you can get something good out of it.  But &#8212; that&#8217;s sarcasm, y&#8217;all.</p>
<p>(Laughter)</p>
<p>In Washington, people don&#8217;t recognize sarcasm, so they blast me for thinking I really mean something I say sarcastically.  If we stand firm in the House and do what we promise, it gives them more credibility with the public, to let them take back over the majority in the Senate, and the country will benefit.</p>
<p>So I&#8217;m hoping that we can be the example that we should be.  And I thank you for all the help to do that.</p>
<p>(Applause)</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>After Four Years, Dem Senate Passes a Budget</title>
		<link>http://www.frontpagemag.com/2013/arnold-ahlert/after-four-years-dem-senate-passes-a-budget/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=after-four-years-dem-senate-passes-a-budget</link>
		<comments>http://www.frontpagemag.com/2013/arnold-ahlert/after-four-years-dem-senate-passes-a-budget/#comments</comments>
		<pubDate>Mon, 25 Mar 2013 04:25:17 +0000</pubDate>
		<dc:creator><![CDATA[Arnold Ahlert]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[Budget]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[Deficit]]></category>
		<category><![CDATA[four years]]></category>
		<category><![CDATA[Pass]]></category>
		<category><![CDATA[Reid]]></category>
		<category><![CDATA[Senate]]></category>

		<guid isPermaLink="false">http://frontpagemag.com/?p=182910</guid>
		<description><![CDATA[A doomed effort defined by crushing taxes and government spending.]]></description>
				<content:encoded><![CDATA[<p><a href="http://frontpagemag.com/2013/arnold-ahlert/after-four-years-dem-senate-passes-a-budget/harry-reid-3/" rel="attachment wp-att-182912"><img class="alignleft  wp-image-182912" title="harry-reid" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/03/harry-reid-450x337.jpg" alt="" width="270" height="202" /></a>After a series of debates beginning Friday afternoon and continuing for almost 13 straight hours, the Democratically-controlled Senate <a href="http://www.cnn.com/2013/03/23/politics/senate-budget-bill/index.html">passed</a> its first budget in four years. The $3.7 trillion blueprint for 2014, that contains almost one trillion dollars in tax increases, narrowly passed by a vote of 50-49. Every Republican voted against it, as did four Democrats facing reelection next year. One Senator, Frank Lautenberg (D-NJ), was absent. “The Senate has passed a budget,” <a href="http://www.nytimes.com/2013/03/24/us/politics/senate-passes-3-7-trillion-budget-its-first-in-4-years.html?_r=1&amp;">declared</a> Senate Budget Committee chairwoman Patty Murray (D-WA) at 4:56 a.m.</p>
<p>The marathon session is called a <a href="http://keithhennessey.com/2010/03/25/vote-a-rama/">&#8220;vote-a-rama&#8221;</a> because the Senate can conduct a series of back-to-back votes far more quickly than normal, due to a 1974 law that limits the time for debate to 50 hours, rather than the unlimited time afforded to other measures. As a result, Senators filed as many as 500 amendments. Only 101 of them were <a href="http://www.politico.com/story/2013/03/senate-passes-budget-89244.html">considered</a>, but that still gave both parties a chance to force votes on a series of issues they each favored. Yet because the budget is non-binding, the voting was largely a theatrical exercise, and very little of it is likely to be enacted into law.</p>
<p>It is just as well. The plan calls for an immediate $100 billion to be spent on infrastructure &#8220;to bolster the economy,&#8221; making a mockery of the more than $800 billion in <a href="http://cnsnews.com/blog/terence-p-jeffrey/obamas-stimulus-documented-failure">stimulus funds</a> earmarked for shovel-ready jobs in 2009 that did next to nothing on that front, despite being eight times larger. A tax code overhaul that aims to bring in another $975 billion over the next ten years with filibuster-proof legislation. Those taxes are coupled with spending cuts of $875 billion, generated by modest reductions to federal health care programs, domestic agencies and the Pentagon, along with reduced federal borrowing costs.</p>
<p>Yet the net result is tiresomely familiar: ten years from now, the government will still be running a deficit in excess of $500 billion&#8211;and more than $5.2 trillion will be added to our already unconscionable <a href="http://www.usdebtclock.org/">$16.7 trillion</a> of national debt.</p>
<p>Nevertheless, Patty Murray was delighted with the result. &#8220;The budget we&#8217;re debating this week puts our middle class families first,&#8221; she <a href="http://www.cnn.com/2013/03/23/politics/senate-budget-bill/index.html">said.</a> &#8220;It reflects our pro-growth, pro-middle class agenda that the American people went to the polls in support of just a few months ago.&#8221; Senator Jeff Sessions (R-AL), the Budget Committee&#8217;s ranking Republican, saw things quite differently. &#8220;Honest people can disagree on policy, but where there can be no honest disagreement is the need to change our nation’s debt course,” he contended. “The singular truth that no one can escape is that the House budget changes our debt course while the Senate budget does not.”</p>
<p>The various amendments that won approval reflected the differing priorities of each party. They dealt with a variety of issues, including such items as raising or lowering taxes, hiring veterans, repealing Obamacare, prohibiting illegal aliens from being eligible for various government programs such as Medicaid, preventing the UN from abridging the Second Amendment, allowing states to collect Internet sales taxes, a redefinition of full-time employment, and a bid to end the mobile phone welfare program.</p>
<p>Three of the more popular amendments <a href="http://www.cnn.com/2013/03/23/politics/senate-budget-bill/index.html">dealt</a> with the approval of the Keystone pipeline by a bipartisan vote of 62-37, a 79-20 vote to <a href="http://www.boston.com/politicalintelligence/2013/03/22/senate-passes-bill-repeal-medical-device-tax-industry-urges-house-the-same/NNnMVECmYGD9oxTW8dwlaN/story.html">repeal</a> the medical device tax, and a unanimous vote to end &#8220;too big to fail&#8221; financial advantages for any &#8220;megabank&#8221; with more than $500 billion in total assets.</p>
<p>The impetus for passing a budget for the first time in four years was likely the <a href="http://www.breitbart.com/InstaBlog/2013/02/05/Pelosi-Not-Happy-About-No-Budget-No-Pay-Bill">passage</a> of the &#8220;No Budget, No Pay&#8221; bill which suspended the current debt limit until May 18th, so the federal government could continue to pay its bills. One of the bill&#8217;s provisions prohibits legislators from getting paid if Congress doesn&#8217;t pass a budget by April 15. Salaries will either be held in escrow until they do, or resume being paid in January 15, when the current congressional session ends.</p>
<p>Considering the vast differences between this legislation and the House budget <a href="http://firstread.nbcnews.com/_news/2013/03/21/17401829-house-passes-budget-for-2014-sends-2013-spending-bill-to-obama?lite">passed</a> last Thursday that brings the budget into balance by 2023, but changes the nature of entitlement programs in ways completely anathema to Democrats, it is virtually certain that no budget will be reconciled before the debt ceiling showdown. On Thursday, House Speaker John Boehner (R-OH) revived a rule ignored in January, stating that any increase in the debt ceiling must be accompanied by commensurate spending cuts.</p>
<p>Yet even leaving that rule aside, passing a budget by May 18 is <em>still </em>overly optimistic. Thus, the House also passed a continuing resolution to fund the government for the rest of the fiscal year, which lasts through September. The Senate approved that resolution, and it is expected that the president will sign it once he gets back from his trip to Israel.</p>
<p>In other words, the more things seemingly change, the more they remain the same: barring a miraculous spasm of bipartisanship, government will likely be funded piecemeal&#8211;and our unsustainable fiscal trajectory will remain unaltered.</p>
<p>Senate Minority Leader Mitch McConnell illuminated this undeniable reality. “Although Senate Democrats finally generated a budget after four years, the plan they produced raises taxes, increases spending and debt and never, ever balances,” he cautioned. “The only good news is that the fiscal path the Democrats laid out in their Budget Resolution won’t become law.”</p>
<p>Four Democrat Senators up for reelection in 2014 in red or red-leaning states, Kay Hagan (D-NC), Mark Pryor (D-AK), Max Baucus (D-MT) and Mark Begich (D-AK), voted against the measure. It remains the job of voters in each of those four states to determine whether those votes represent a principled stand against runaway government spending, or merely an expedient desire to get reelected.</p>
<p>In the end, the public will have to be satisfied by the fact that Harry Reid and the Democratically-controlled Senate have finally produced something that has eluded them for four years: a budget. That would be the same Harry Reid who <a href="http://www.nytimes.com/2008/02/04/washington/04cnd-budget.html?_r=0">blasted</a> president Bush in 2008, when the former president submitted a 3.1 trillion dollar budget, later whittled down to <a href="http://federal-budget.findthedata.org/compare/111-114/2008-vs-2011">$2.9 trillion</a>, that contained a then-record of $458 billion in deficit spending. “President Bush’s fiscal policies are the worst in our nation’s history&#8211; he has turned record surpluses into record deficits&#8211;and this budget is more of the same,” Reid said at the time.</p>
<p>Yet as far as Reid is concerned, passing a $3.7 trillion budget that includes no plan whatsoever to bring spending and revenues into alignment, even as it contains a projected deficit of $700 billion, and adds an additional $5.2 trillion to the national debt, is now considered <a href="http://my.news.yahoo.com/us-senate-approves-budget-first-093107362.html">&#8220;a Herculean feat.&#8221;</a></p>
<p>Such overt hypocrisy ought to be laughable. Unfortunately,  the seemingly inexorable march towards national bankruptcy this irresponsible budget represents, is no laughing matter.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n%3A133140011%2Ck%3Adavid+horowitz&amp;sort=daterank">Click here</a>.</strong></p>
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		<title>An American Cyprus?</title>
		<link>http://www.frontpagemag.com/2013/dgreenfield/an-american-cyprus/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=an-american-cyprus</link>
		<comments>http://www.frontpagemag.com/2013/dgreenfield/an-american-cyprus/#comments</comments>
		<pubDate>Fri, 22 Mar 2013 04:30:18 +0000</pubDate>
		<dc:creator><![CDATA[Daniel Greenfield]]></dc:creator>
				<category><![CDATA[Daily Mailer]]></category>
		<category><![CDATA[FrontPage]]></category>
		<category><![CDATA[Banks]]></category>
		<category><![CDATA[Cyprus]]></category>
		<category><![CDATA[debt]]></category>
		<category><![CDATA[deposit]]></category>
		<category><![CDATA[eu]]></category>
		<category><![CDATA[european union]]></category>
		<category><![CDATA[Money]]></category>

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		<description><![CDATA[Everyone is scrambling to salvage what they can from an unsustainable system -- are we next? ]]></description>
				<content:encoded><![CDATA[<p><a href="http://frontpagemag.com/2013/dgreenfield/an-american-cyprus/cyprusrfd-sfspan/" rel="attachment wp-att-182448"><img class="alignleft  wp-image-182448" title="CyprusRFD-sfSpan" src="http://cdn.frontpagemag.com/wp-content/uploads/2013/03/CyprusRFD-sfSpan.jpg" alt="" width="237" height="158" /></a>Cyprus is Europe&#8217;s original failure. It was the first part of modern Europe to be invaded and colonized by Muslims, while its native Christian population was ethnically cleansed. Cyprus is to Islam what Czechoslovakia was to Nazism; the canary in the coal mine warning of worse things to come.</p>
<p>Now Cyprus has wound up in the middle of the European Union&#8217;s meltdown as everyone scrambles to salvage what they can from an unsustainable system at the expense of everyone else. We are seeing the beginnings of bailout cannibalism as the Eurocrats manipulate entire nations into fighting each other. The real purpose of the deposit grab was to wreck Cyprus&#8217;s banking sector and continue the centralization of international finance.</p>
<p>The Cypriot government tried to salvage its banking sector by passing on the pain to ordinary depositors in one of those brutally unfair decisions that technocrats like so long as they have the early warning to opt out of them. While the banks were closed to ordinary people, there&#8217;s little doubt that plenty of insiders took the time to get their money out.</p>
<p>In Cyprus, the Russian elite looking for a safe place to put its money when the people turn on them intersected with a Eurocratic elite trying to eliminate safe harbors and cheap places to do business. And they all bumped into British senior citizens looking for a cheap place to retire and angry leftists with no serious economic plan, but a determination to overthrow the government.</p>
<p>Cyprus is the place we go to learn that everything is tangled up with everything else and that the only things left are blame to be passed around and money to be stolen.</p>
<p>Everyone is deep in debt and no one is going to pay up. And why should they? Southern Europe may have dug itself into a hole, but the Eurocrats ordering them to dig out were the ones who provided the shovel because it seemed like a good idea at the time. Debt was a profitable and useful political tool. It still is.</p>
<p>American Federalism was built on the Federal assumption of state debts. Obama&#8217;s two-term reign was built on massive bailouts used to consolidate power while reassuring the banks that they would be taken care of. The National Debt is headed into 17 trillion dollar territory because that too is a useful political tool. Driving the debt to the point where it can never be repaid is meant to transform the entire way we do business and spend money. And it&#8217;s working.</p>
<p>Cyprus was a dirty little demonstration that you can kill two birds with one stone by giving a desperate government two impossible choices. And despite all the reassurances, there is no real reason to believe that it will stay in Cyprus. If anything the last few days have demonstrated how effective that particular tactic is. And once the money has fled Cyprus, the demonstration will be considered a success.</p>
<p>The problem with Europe, as with the United States, is that you can only assume so much debt and failure. German bankers may profit from pressing Cyprus depositors, but the German people are still in hock for far more than they should be. Similarly New York bankers and California Green tech entrepreneurs may be making money from the last four years, but their actual cities and states are deep in debt and floundering.</p>
<p>The European Union&#8217;s interlinkage makes as little sense as tethering some of the most productive states in the United States to the least productive states. The sort of thing that outrages Europeans has long been taken for granted by Americans.</p>
<p>The two-term kleptocracy now in office was elected on an explicit pledge of wealth redistribution, but the process of moving money from healthy communities to unhealthy communities, from bad cities to good cities and from bad states to good states, has been underway for a while.</p>
<p>Detroit, a city where hardly anyone bothers paying property taxes, has finally gotten an emergency financial manager, but there&#8217;s no real reason to believe that the people sticking it out in Motor City who don&#8217;t pay their bills, but do collect government cash, are going to change.</p>
<p>Someone else is going to have to bail them out because Detroit is too big to fail, even though it has already failed, because the United States is too big to fail, and the United States is too big to fail for the same reason that the EU and the new Chinese capitalism are all too big to fail. Everyone is invested in everyone else and no one can afford for anyone to fail; unless it&#8217;s small outposts like Cyprus that can be safely looted by the big boys.</p>
<p>But the real question is how long it will stay that way. For now everyone subscribes to the myth that a recovery is here and that all the really big investments that depend on working countries are safe.</p>
<p>China pretends that America isn&#8217;t being run by lefty professors-for-life with worse math skills than manatees and America pretends that China&#8217;s economy isn&#8217;t one giant Potemkin village maintained with currency manipulation and slave labor. Everyone pretends that everyone wants to be in the EU, despite a pesky refusal to hold actual referendums on the topic (and ignoring those that have been held) and also pretending not to notice all the money in the EU budget that can&#8217;t be accounted for.</p>
<p>All this is Cyprus and Greece, but on a much bigger scale.</p>
<p>Whether or not other governments and their banking systems begin looting consumers as crudely as the Cyprus scheme attempted to do; loot them they shall. And they will hit the middle class, because that is, as a famous bank robber once said, where the money is.</p>
<p>The left likes to pretend that removing the middle class will make room for some clean regime of the oppressed. What it will actually do is remove the citizenry with enough power and wealth to keep government in check and replace it with beggars and rebels who depend on government subsidies while hating the government. If you want to see what an extended bout of that looks like, you can travel to the Middle East. These days you can try Europe as well.</p>
<p>Eurocrats fancied that the Arab Spring meant that the Muslim world was finally catching up to Europe. It&#8217;s the other way around. These days Europe is catching up to the Arab Spring and not just because of the wave of Muslim colonists spreading across its shores. European countries are losing the vestiges of democracy and bouncing between unelected technocrats and elected extremists.</p>
<p>The Brotherhood phenomenon is not foreign to Europe. Not when Athens is tilting to the Golden Dawn and Italy&#8217;s new power broker is a leftist comedian whose sole virtue is that he hates it all. Eventually the far right or the far left will get its ducks in a row and make a serious play for power and the Eurocrats will either be caught flatfooted or will be forced to invalidate elections.</p>
<p>That is one more reason why American liberals should not be too proud of the Obama machine. What looks shiny and clever in 2013 may take on a whole different appearance as the malaise drags on and an angry jobless generation looks to get its payback and paychecks by voting for anyone who screams the loudest.</p>
<p>Beating Mitt Romney was no great achievement. Neither was beating McCain. But at some point the government-media complex of social welfare and crony capitalism will go up against an angry populist with an agenda and an organized movement, from the right or the left, and then things will get properly ugly.</p>
<p>The establishment has no plan except to continue doing its thing while pretending that nothing is wrong. It can&#8217;t fill the hole in the boat so it bails in more water from the ocean and calls it investment. It&#8217;s a madness that will begin nearing its end once people are standing outside banks demanding their money back.</p>
<p>And that is as true for the United States as it is for Europe.</p>
<p><strong>Freedom Center pamphlets now available on Kindle: <a href="http://www.amazon.com/s/ref%3dnb_sb_noss?url=search-alias%3Ddigital-text&amp;field-keywords=david+horowitz&amp;rh=n:133140011%2ck:david+horowitz&amp;ajr=0#/ref=sr_st?keywords=david+horowitz&amp;qid=1316459840&amp;rh=n:133140011%2ck:david+horowitz&amp;sort=daterank" target="_blank">Click here</a>.  </strong></p>
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