Easing Into a Recession

The Federal Reserve is easing America into a recession that could become a depression.  Easing is a nice way to refer to the Feds use of an economic stimulus tool, also known as quantitative easing (QE).

QE is described by some as printing more money.  The Fed argues that it is pumping liquidity into the economy by buying bonds held by banks.  Since the economic downturn, Fed Chairman Ben Bernanke has acquired about $2.3 trillion in bonds from banks by simply printing more money.

The question is not will QE be a problem in the long run, because it clearly will be.  The question is how long can the Fed continue with QE before we ease into a recession or perhaps a depression.  There is some tipping point that the experts can’t predict with any certainty.  But at some point, QE will weaken the dollar and stimulate rampant inflation.  This tipping point probably will occur soon because of the Fed’s policy of keeping interest rates near zero.  High interest rates can moderate inflation.  Low interest rates will stoke up inflationary fires.

QE may be a short-term solution that helps politicians get elected, but at some point the law of supply and demand will take over.  At the tipping point, our debt will become so large that the market will demand higher interest rates since America will have become a larger credit risk.

If the United States is paying artificially low interest rates, only the Fed will purchase our debt.  And this is where it gets interesting.  How long can we keep funding ourselves by printing more money?  At some point, inflation will consume us and the value of the dollar will collapse.  Either of these events are bad, but the two together would create a synergy that might dump us into a deep depression.

But don’t worry.  It won’t happen for another year or two.


Looking for Baby Boomers

I read an interesting Associated Press story about how local charities and nonprofit groups are looking for baby boomers.  The story indicated that boomers are attractive volunteers because: (1) there are 77 million of them, (2) they are living longer, (3) they are more educated than previous generations, and (4) they bring well-honed skills and years of real-world work and life experience.

This is an interesting article because of what it didn’t say.  It didn’t say that boomers would be excellent employees because of the same reasons.  It said that they would be attractive as volunteers.  In other words, it would be good for society to utilize their skills for free.

Now, I have nothing against volunteering.  In fact, I, as a baby boomer, have done that myself.  But I also have seen the discrimination that occurs when baby boomers attempt to get a second career going.  These same skills and experiences that make us so valuable for volunteer services are not recognized in the work force.

Of course, there are low-paying positions that we might receive for being greeters or sales clerks in stores.  But there are built-in prejudices of the post-boomer generations when it comes to us applying for the higher paying jobs.  Boomers: (1) are set in their ways, (2) don’t have computer and high technology skills, (3) are too demanding on getting things done correctly, (4) are living in the past, (5) have too much experience and will take away jobs from the post-boomer generations, and (6) are going through dementia and other age-related health problems.

As the economy worsens with run-away inflation and with Social Security and Medicare running out of funds, baby boomers who have retired will find that they will have to find jobs to supplement their pensions.  Yes, there will be plenty of volunteer opportunities for the boomers, but I wonder how many good-income jobs will be available.

Education in America Is Failing

Our education system gets an “F.”  But since nobody, including the federal government, has to sign the report card and there is no detention hall, no changes are on the horizon.

Currently the US is ranked 17th in science and China is projected to take the lead over us in this field.  We were at the top of our game in 1969 when our astronauts landed on the moon and then got back home.  That was about 43 years ago.  There is no certainty that we could do that today.

What happened?  It was four decades of decadence.  Our education system has failed us.  We used to cater to those students who showed brilliance and creativity.  Then, we started catering to those students who were disruptive and weren’t interested in learning.

Many studies, including science, should focus on creative thinking or finding unique ways to solve problems.  American education today has a goal to teach only basic concepts.  Teachers are lecture-oriented and do not provide an environment for innovative thinking.  Teachers must satisfy metrics and carefully avoid upsetting any of the disruptive students.  Failure is acceptable under these conditions because the main goal is to avoid creating any waves or missing the average metric marks.

A standard curriculum with teachers being accountable to only deliver the basics and nothing more is a recipe for failure.  There is no challenge to the teachers or the students to go beyond being average.  The goal today is “to just get by.”

If America wants to compete in the world economy, we must change our education system to make it creative and challenging.  As an instructor of  business law classes, I had the students go through mock trials and also create their own businesses, which encouraged the students to incorporate the principles of business law into the practical world of business and law.  It was interesting to note that even the disruptive students became interested in the projects and participated as much, if not more, than the other students.

The Federal Bird is Now an Ostrich

The immigration issues are in the news again.  This time the Supreme Court is examining Arizona’s law requiring police to check the legal status of people they stop for other reasons.  Will the Supreme Court force the federal government to pull its head out of the sand?

I doubt if the Supreme Court will declare this law is unconstitutional.  Chief Justice John Roberts said that Arizona merely wants to notify federal authorities that it has someone in custody who may be in the US illegally.  Roberts concluded, “It seems to me that the federal government just doesn’t want to know who’s here illegally and who’s not.”

Bingo!  The federal government does not want to deal with the problem of immigration, so it puts its head in the sand like an ostrich.  We need a logical approach to the immigration problem and not an emotional or political response.

Back in the early 20th century when immigrants were pouring into the United States from Europe and Asia, America had a system for examining these immigrants before allowing them access.  What system is in place today?  Basically none.  When apprised of the problems with immigration, including drug operations, cheap labor, sex rings, health issues, nobody in the federal government has stepped up to the plate.

When the states attempted to take action in an effort to offer some assistance to the problem, the current administration took the states to task primarily based on political considerations and potential votes in the upcoming election.

So, other than emotional negativity and political motivation, what system do we have?  Basically none.

Will we ever have a system like America had in the 20th century?  Probably not.  We are stuck with a “Do Nothing” Congress and an “Elect Me” President.

I remember a high-level meeting at the Pentagon when after several hours of Power-Point presentations, the highest ranking SES asked if there was a way we could do nothing.

That’s the problem in a nutshell.  There are no leaders in the federal government anymore who will lead.  So, we as American citizens are stuck with a federal government filled with ostriches whose heads are buried deep into the sand.

Let’s Kick the Can Down the Road

I remember a saying when I was younger, “Let’s kick the can down the road.”  When I was older, I heard leaders say, “Not on my watch!”  Both of these quips have the same mean meaning.  They refer to the propensity of leaders to find ways to just get by today, and let somebody else solve the really hard problems sometime in the future.

The latest news on Social Security is that it will run out of money in 2033.  Medicare is in worse shape.  Its hospital insurance fund will run dry by 2024. With lower payroll tax receipts, both of these insolvencies probably will occur even sooner.

Is the current President or Congress going to take any action?  Don’t count on it.  Are they going to kick the can down the road?  Count on it.  Most of our leaders, if you want to call them that, hope they can reach retirement before any of this happens.  They want to make as much money as they can before this nightmare hits our country like a Yellowstone mega-volcano.

Is it smarter to take action now before our funds are exhausted?  Of course, but then that would require real leadership… the type of leadership that America found in George Washington, Patrick Henry, Thomas Jefferson… the type of leaders that don’t exist anymore.


Where Is Us in US?

On April 23, 2012, the US agreed to provide Afghanistan military and financial support through 2024.  Where is the “us” in US?  Will this huge expenditure help us?  Will it even help the Afghan people?

The politicians announced this contract as a way to show the Afghan government that we weren’t just walking away.  But it appears to be a rather expensive departure gift.  And who will actually receive the gift?

It is designed to assist the impoverished people of Afghanistan.  Even if it did help the Afghan people, which is will not, what about the impoverished people in America?  Have we lost what little common sense that we had in the past?

I worked fraud acquisition in Afghanistan for years and know that most of this money is not even going to go to the Afghan people.  It will be scarfed up by the corrupt Afghan government.

American politicians are so far removed from reality anymore, they just throw taxpayer money at countries.  Politicians have lost touch with citizens.  Some of the financial support may stick and do some good.  But most of it doesn’t.  Many countries that we subsidize are run by dictatorships that are happy to accept our money.

We have little fiscal control over our finances anymore.  An important question should always be:  does this financial investment make sense over the long term?  I doubt if politicians even think beyond the next election.

The “us” is no longer in US.  Politicians are squandering our resources as quickly as they can.  Another trillion here and another trillion there.  It doesn’t matter to them as long as we reelect them.  It makes me wonder why we do reelect them?  Perhaps it’s because there are no good candidates anymore.

No Federal Oversight or Consequences

If you let your children run free without any oversight or allowed them to do anything they wanted without consequences, what would happen?  So, is the federal government any different?  Have federal managers and employees become delinquents and criminals without any moral restraint?

The latest scandals within the federal government involve the General Services Administration’s $800,000 training conference in Sin City and the Secret Service agents getting caught soliciting prostitutes in Columbia.  Both these incidents are examples of inappropriate behavior that evidence lack of oversight and consequences within the federal government.

I worked in the federal government for the last four decades, and I have seen the moral fiber of the government degeneraate.  These incidents, unfortunately, are not unique.  I know personally that this conduct is rampant throughout the federal government.

I know of senior executive service (SES) managers who drive luxury convertibles on personal exotic vacations at the government’s expense.  Since there is no oversight, nobody is holding them accountable.  I also am aware of thousands of “boondoggles” that are paid for by taxpayers.  I also am aware of unbelievable fraud, waste, and abuse in the federal government that goes on every minute of every day because there are no consequences.

Billions of dollars are spent each year on overlapping and duplicating government programs.  There also are billions of taxpayer dollars squandered on wasteful and fraudulent programs.  Who is minding the store?  In many cases, nobody.

Senator Tom Coburn of Oklahoma admitted that Congress is “numb to stupidity and waste.”  There are so many Bridges to Nowhere that Congress doesn’t even pay attention to them anymore.  Oversight is boring and hard work.  Congressmen are more interested in getting programs with pork that generate votes for them or that interest lobbyists .  Congressional oversight has a very low priority.  It is so low that in many cases, it doesn’t exist.

And both parties are to blame.  Both Democrats and Republicans fail equally and miserably.  They point the fingers at each other.  So the voters believe that the last party was the culprit when, in reality, the next politician they vote for will be no different.  Investigators and agents tell me that the tea party Congressmen have turned out to be no different.

Most Americans have no idea how bad it has become in the federal government.  The federal managers and leaders are so arrogant today that they openly commit fraud against the taxpayers.  I have heard them say that they don’t care what their employees do as long as they don’t make waves and draw attention to them.  They have lost touch with both American citizens and reality.

All this is a recipe for failure of our system.  In my opinion, the entire federal government should be fired for fraud and incompetence.  It would be interesting if we eliminated the federal government and then relied entirely on state and local government if things would be better.  If there is no federal oversight or consequences, then try no federal government.  I bet we wouldn’t even miss it.


Obamateurism vs. Law

President Barack Obama’s healthcare law, which could add $530 billion more to the federal budget deficit, is before the Supreme Court to determine if Congress overstepped its authority to regulate commerce, making the law unconstitutional.

One of the questions before the Supreme Court is whether individuals may be forced to buy health insurance and thus engage in commerce, which then will be regulated?  In other words, can citizens be coerced into being regulated?

I was a fraud acquisition attorney for over seven years with the Air Force, Navy, and Marines, and I am amazed that basic law has taken a second seat to partisan
politics.  I call President Obama’s attempts to force this law through the judicial branch as “Obamateurism.”

We need innovative thinking as described in my fist book, “A Warrior for All Times,” rather than political thinking.

Forcing Americans to sign contracts with insurance companies flies in the face of basic contact law, requiring willing parties to reach an agreement.  Contracts in order to be binding must be made by parties who are free to make or refuse the contract.  Parties to the contract must mutually assent to the terms without duress.

There must be no coercion, and Obamacare compels citizens to enter contracts under threats of penalties.

The Tenth Amendment lists those powers uniquely reserved to the states and the people.  The Supreme Court has restricted Congress from compelling contracts in the past.

Even though Obama stated that the Supreme Court cannot overturn legislation, it has been doing it for decades.  Politics does not trump the law.

Can You Handle the Truth?

One of the more memorable lines from the movie, “A Few Good Men,” was delivered by Jack Nicholson:  “You can’t handle the truth.”

This seems to apply to Americans today.  I can remember a time when the news media prided itself in reporting the facts and letting citizens apply the facts to draw their own conclusions.  Currently, the media is centered around politicians (both Republicans and Democrats), providing editorial comments to the public.  You don’t get many facts, but you get many opinions based on partisan politics.  If the media is not giving us the truth, then that is committing fraud on the American public.

Is it because we can’t handle the truth?  Or is it because the media and politicians don’t want you to know the truth?  The media is losing touch with American
citizens.  My book, “A Warrior for All Times – Col. John Boyd,” which is coming out later this year, discusses an innovative way of thinking that could bring the media back to reality and just reporting the facts.

I majored in Journalism at the University of Kentucky in the late ’60′s and recall a class on how to brainwash the public.  Today I think you could major in “Brainwashing” rather than Journalism.  For example, the federal government only counts people who are unemployed and looking for a job, not those who have given up on the job search.  Now when I was a reporter and later an editor, I always dug deeper.  If the government did not give me the truth or, in this case, the actual number of unemployed, I would report that the government was not providing the true number.  Then I would dig deeper to find the correct number.

I believe that the media either believes that you can’t handle the truth or they don’t want you to know the truth.  Either way, the media has sunk to even lower depths.

The Red Fed

The Federal Reserve does not have a capitalistic bone in its entire body.  The Fed, led by Chairman Ben Bernanke, is circumventing capitalism by slashing the interest rates to near zero and by injecting trillions of dollars into the economy.

My book, “The Red Fed,” is coming out in 2013.  It examines the Federal Reserve and shows how the Fed has moved from supporting capitalism to providing monetary support to socialism and communism.  This book is a sequel to my first book, “A Warrior for All Times,” which is coming out this year.

The Fed has promoted socialism by purchasing mortgage-backed securities, Treasury issuance, and other assets.  Some have called this printing money out of thin air, but what it does is give the executive branch more leeway for borrowing and spending in its socialistic programs.

The result has been high inflation and a weakened dollar.  The former purpose of the central bank was to preserve the integrity of currency by controlling inflation and letting the economy guide itself.  In other words, the Fed was supposed to support capitalism by dealing with occasional panics.  Interest rates generally are increased to slow down inflation.  The Fed, with its fraudulent purpose, has no desire to stop inflation, thus interest rates hover near zero.  The Fed’s new world goal is to promote a world economy supported by socialistic and communistic governments.

Steve Forbes, Forbes magazine editor and former presidential candidate, called Bernanke a “terrible central banker,” trying so hard to guide the economy that he has lost sight of his primary role, which is to control inflation, keep the economy healthy, and let the economy guide itself.

Bernanke’s low interest rate is allowing inflation to heat up.  The resulting increased prices of gasoline alone are having an effect on our economy.  The actual inflation rate is hidden from the American people.  The spark of inflation could ignite into a major gasoline fire that could engulf and consume our entire economy.

Martin Feldstein, former Reagan economic adviser and Harvard professor of economics, indicated that the printing of money or “quantitative easing,” which creates a large volume of reserves also creates a risk for inflation.

Feldstein stated, “Traditionally, the volume of bank deposits that constitute the broad money supply has increased in proportion to the amount of reserves that the commercial banks had available.”   He continued, “Increases in the stock of money have generally led, over multiyear periods, to increases in the price level.”

“Therefore, faster growth of reserves led to faster growth of the money supply – and on to a higher rate of inflation.”  He concluded, “The Fed in effect controlled – or sometimes failed to control – inflation by irritating the rate of growth of reserves.”