southchild

With all the debate and rancor over the debt ceiling reality has been shoved down Alice’s rabbit hole. President Obama now talks of indirect taxes in reference to the effect higher interest rates will have on America. In fact, the reality is, higher interest rates only effects borrowers. The de-valuation of the dollar affects all spenders of American currency.

A down-grade in American debt is sure to cause interest rates to rise on all borrowers. Whenever the government competes with the private sector in the dollars for loan market, interest rates will rise. The reality is, interest rates would have already risen had it not been for two major factors. First, the private sector has no appetite for risk. Taking a loan means incurring risks. Second, 70% of the Federal government debt issued in June was purchased by the U.S. Treasury with newly printed money, a practice known as monetary easing. 70% of the demand for U.S. debt was the U.S. Treasury.

Quantitative easing lowers interest rates. This is a good thing for borrowers. Central planners (Marxists or Keynesians) believe this will spur economic activity in the private sector. In a stable political and regulatory environment this may be true. In an activist environment with new and increasingly burdensome regulations on the private sector, the free markets (capitalists) take a wait and see attitude.

An undisputed fact of quantitative easing is the devaluing of the newly printed currency. In our case, for every dollar the Federal Government is borrowing, it must print new money for 70% of that borrowing. With each new dollar printed, every dollar in your savings account or 401K is devalued. In a global economy where commodities are valuated in US Dollars two types of people feel the effect of quantitative easing, those that loan the United States government money, and the citizens of the United States.

Pick any globally traded commodity you like, overlay a chart of the United States Dollar index on top of that commodity. You will quickly see the relationship the drop in the dollar has with our purchasing power as Americans. 3^rd world dictators have resulted to inflating their way out of debt for many decades. Is that the proper course for the United States of America?

Believing the status quo, quantitative easing, is a punitive tax on all holders and spenders of US Dollars, let’s examine the alternatives.

Default. Default is not really an option. The Federal government brings in more than sufficient revenues to service its debts. The Federal government brings in more than enough revenues to service its entitlement payments, military obligations, veterans benefits and all other mandatory obligations. What gets paid and what goes unpaid will be a political decision made by the president and his tax cheating Treasury Secretary.

Default will force the Federal government to pay higher interest rates. This will have a dynamic effect in out years on the deficit. This will cause private sector borrowers in competition with the Federal government to pay higher rates on their borrowing.

Default will also benefit responsible citizens. Default will benefit responsible citizens that live within their means. Default will benefit responsible citizens that save their money. Default will benefit responsible citizens that place their money in money market accounts. Default will benefit responsible citizens that purchase Certificates of Deposit. Default will benefit citizens that purchase the Federal government’s debt.

The other option is to cut spending. This is an option that benefits all holders of US debt and spenders of US currency. A tightening of the money supply, otherwise known as the US Treasury shrinking its balance sheet, would strengthen the dollar, enabling all holders of the greenback to purchase more with their hard earned, or government provided, dollars.

Given the three choices; let Obama continue to spend unchecked, let the country default, or reign in spending and get our country and our currency on solid footing, there is no way in hell I would ever vote to raise the debt ceiling.

Today on the Senate floor, Marco Rubio gave an incredible speech on the raising the debt ceiling debacle. He also did a rare thing — yield some of his time so John Kerry could interject some comments and questions to Rubio during his speech. I think you’ll like Rubio’s responses to Kerry’s questions. It’s good to see our newest Statesman in such good form. To thine own self be true, Marco Rubio.

After a long blog break, we are back at it, and we have some new changes to make this site more fun for everyone!

First, we’d like to welcome MikeinValdosta as a new writer. Check out his articles, The Commerce Clause Must be Redefined and The Wisdom of Checks and Balances for a taste of what’s to come. You’re going to learn a lot.

So, drumbeat…..the Big News is that we’ve enabled comments for registered users! This has been an outstanding request for a long time, and we’re very excited to finally be doing it! Registration is open for now, but hurry up and grab your user names because we might not keep it open indefinitely. We really look forward to hearing from you: comments have been opened on all posts going back at least one year, including some great posts from Tyler Butler that were posted in May, 2010. Be sure to check those out and maybe we can get Tyler to write some great, new articles!

OK, time to go snap some beans and shuck some corn. We look forward to enjoying with you a re-vamped, and re-energized southchild.com.

The Founding Fathers were not perfect. Slavery was wrong. Women’s suffrage was wrong. Dividing the Federal government into three separate branches with checks and balances on each other, and limiting their authority to those powers specifically enumerated within The Constitution was pure brilliance. The bi-cameral congress was an act of providence.

I bring this up due to the debt ceiling crisis. The left wing and the suppliant media have labeled the ”Tea Party” members of congress as “terrorists” due to the unwillingness to go along with President Obama and Harry Reid’s plan for raising the debt limit.

Fareed Zakaria, CNN’s Shaman of Obamotics, proclaims the Tea Party is hijacking America with an agenda “it cannot get it through the political democratic process.” He then positioned the loyal opposition’s stance as, “we’ll blow up the country if you don’t listen to us. We will hold hostage the credit of the United States, the good standing of the United States and we’ll blow it up.”

In today’s world, standing on principle and following the prescribed legislative rules outlined within The Constitution of The United States of America amounts to “terrorism” if you happen to disagree with the Democrats.

In 2006, then a freshman Senator from Illinois in the minority, Barack Obama voted against a debt ceiling raise. Does that make President Obama a reformed terrorist in Fareed Zakaria’s eyes?

The Constitution exists to limit the Federal government’s power. Furthermore, it is designed to make the creation of new laws difficult. If I may, it exists to limit the ability of politicians, especially those suffering from Potomacitis, to enact knee-jerk legislation based upon the emotions of the day or the next election.

If we are going to start throwing the word “terrorist” at those we disagree with politically, perhaps we should start with those that do not respect The Constitution and the checks and balances contained within.

Well, now that the GOP House has screwed the pooch and passed the Boehner debt ceiling increase bill, it’s worth reading Andy McCarthy’s Against the Boehner Plan to see what we got.

To Thomas Sowell, the Boehner plan seems commendable because it would not only “spare the country a major economic disruption” but also “spare the Republicans from losing the 2012 elections by being blamed — rightly or wrongly — for the disruptions.”

Rightly or wrongly. In a nutshell, that tells us everything we need to know about the state of Obama’s opposition. Even our best minds assume that a principled stand taken for the right reasons is a loser. Standing in the midst of what is already a catastrophe, even our best minds are content to pretend that the “disruption” is something from which we can be spared.

Ask any rational person: “When a government is so addicted to reckless spending that it has run up a crushing $14.3 trillion debt that it has no plan to pay back — when it is borrowing $180 million per hour because it has taken on more obligations than it could ever hope to satisfy — would it be better to extend that government’s credit line another $2.5 trillion so it can continue heedlessly along, or to take every available opportunity to force it to alter course dramatically?” There is only one right answer to that question.

And that’s just the beginning. Read it all: the country is in economic trouble, and McCarthy explains the predicament without the political spin from either side.

The facts just keep piling up against the Global Warming alarmists, but don’t wait on the EPA to let facts get in the way of their anti-fossil-fuels agenda.

This lastest news comes from NASA, New NASA Data Blow Gaping Hole In Global Warming Alarmism:

NASA satellite data from the years 2000 through 2011 show the Earth’s atmosphere is allowing far more heat to be released into space than alarmist computer models have predicted, reports a new study in the peer-reviewed science journal Remote Sensing. The study indicates far less future global warming will occur than United Nations computer models have predicted, and supports prior studies indicating increases in atmospheric carbon dioxide trap far less heat than alarmists have claimed.

Study co-author Dr. Roy Spencer, a principal research scientist at the University of Alabama in Huntsville and U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer flying on NASA’s Aqua satellite, reports that real-world data from NASA’s Terra satellite contradict multiple assumptions fed into alarmist computer models.

“The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show,” Spencer said in a July 26 University of Alabama press release. “There is a huge discrepancy between the data and the forecasts that is especially big over the oceans.”

In addition to finding that far less heat is being trapped than alarmist computer models have predicted, the NASA satellite data show the atmosphere begins shedding heat into space long before United Nations computer models predicted.

The new findings are extremely important and should dramatically alter the global warming debate.

Check out Jonah Goldberg’s observations on Obama’s Towering Inferno, aka the debt ceiling “debate”.

Imagine you’re in a burning office building. Obama’s plan for getting out alive: “Okay, you guys break up into different groups and come up with a series of proposals about how we get out of the building. I will then negotiate with each of you separately and then together, and then separately. Then I’ll get on Skype and tell the world what I think of your respective plans and criticize you for their lack of seriousness. I will insist that we have balanced approach of applying both water to the fire and opening the windows, which some say will only provide more oxygen for the flames. But my base says window-opening is essential. Oh and I will blame all of the gasoline I threw around on the lower floors of this building on the guy who moved out two years ago. And I will veto any plan that requires we have a new plan should we get stuck on another floor. And, did I mention this mess was created by the former tenant and….ahhh what’s that smell?

Jon Stewart on the debt ceiling debate:

The Commerce Clause is an enumerated power granting the United States Congress the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”. The Tenth Amendment states the Constitution’s principle of federalism by providing that powers not granted to the federal government nor prohibited to the states by the Constitution are reserved, respectively, to the states or the people. With every passing day, the Commerce Clause and the Tenth Amendment become more contradictory than the precedent day. At present, the Commerce Clause has eroded the Tenth Amendment to the point of obsolescence.

The very core of Federalism is built upon the limited powers of the Federal Government and the unique privileges granted to the individual states allowing them to write their own laws. The freedoms that all American’s derive from The Creator serve as an obstruction to Federal power, as does the Tenth Amendment, this is how the framers saw the role of government. Those that wish to expand the power and reach of the Federal government have successfully sought to utilize the vague Commerce Clause to trump both the Federal government’s limitations and the powers granted to the individual states by the Tenth Amendment.

The phrase “General Welfare” exists twice in the United States Constitution presenting another open door for those that desire to expand the scope and reach of Federal government power. The latter reference, in the Taxing and Spending Clause, is often referred to as the General Welfare Clause. Unlike the Commerce Clause, the so called General Welfare Clause has, in the past, lacked the specificity required to trump most state laws.

Today, America’s citizens are faced with a severe and imposing challenge to their individual freedoms. The Tenth Amendment, the very facilitator of our country’s nearest approach to true democracy, is under assault once again by the Commerce Clause and the ever growing General Welfare provision within the Taxing and Spending Clause. This assault arrived within a Trojan horse titled the Patient Protection and Affordable Care Act, otherwise known as Obamacare, which was signed into law March 23, 2010.

Obamacare is under constitutional challenge due to its mandate that citizens purchase healthcare insurance or face penalty within the tax code. The Obama administration, Nancy Pelosi, Harry Reid, and the Democratic members of congress they lead, base the legality of the Obamacare mandate upon the Commerce Clause and, to a lesser extent, the General Welfare “Clause.”

The basis for the reliance on the Commerce Clause lies within Medicare and Medicaid, two 1965 government programs enacted over one hundred fifty years after the ratification of the United States Constitution, as well as the Federal Insurance Contributions Act (Social Security) of 1935, that claimed constitutionality upon the General Welfare “Clause” and the Commerce Clause. All three programs, if offered by a private company, would qualify as the largest Ponzi scheme ever inflicted upon a people.

The central element of the Obamacare mandate revolves around the ultimate cost to the Federal government to provide healthcare to a citizen that does not have insurance or the financial wherewithal to purchase their healthcare. Ultimately, the Obama administration will rely upon the vague Commerce Clause in that the cost of the healthcare resulted in a cross state lines financial transaction due to the bill being picked up by the Federal government.

When this issue arrives at the Supreme Court, which it is sure to do, the stakes will go far beyond the constitutionality of Obamacare. At stake is our, every individual citizen’s, right to live our lives as we see fit. Should the court uphold Obamacare and its assertion that our health is an interstate commerce issue that falls under the Commerce clause, there is no facet of our lives that the Federal government will be prevented from legislating. The very powers the founding fathers sought to limit will become unlimited due to the Federal entitlement granted by Lyndon Johnson’s Medicare.

You may believe universal healthcare is a good thing, a thing an advanced nation such as The United States of America should provide. That is not the primal issue at stake. The means by which the Obama administration wishes to achieve this goal represents the largest affront to our individual freedoms since the British last fired upon our shores.

The Commerce Clause was never intended to be a back door to dominance of the governed. The sole intention of the Commerce Clause was to provide a legal framework for the resolution of issues involving multiple states and jurisdictions.

Should Obamacare be upheld, the Federal government’s power will no longer be limited of its citizens. There will be no activity in your life that can involve a consequence to your health that will not be subjected to the legislative powers of Congress.

It is paramount that Obamacare be defeated and the Supreme Court redefines the reach of the Commerce Clause.

This wonderful Michael Ramirez cartoon fits nicely with this small excerpt from Francisco’s Money Speech in Ayn Rand’s “Atlas Shrugged”:

“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: ‘Account overdrawn.’

Was Obama off the prompter at his speech this morning? He let slip his belief and affection for Karl Marx’s classic quote:

“From each according to his ability, to each according to his needs”:

The American Thinker blog has the story:

Video of Obama’s Marxist moment.

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UPDATE: Fred Thompson weighs in on the Marxist’s latest gaffe:

Every once in a while, President Obama, when he freelances, exposes his inner-core ideology and the fact that he has little acquaintance with how the real world works. In his Q & A Monday, he explained again the necessity for people like Warren Buffett and himself to give up in taxes “hundreds of thousands of dollars I don’t need.”

It is going to be difficult for a great many of those “millionaires and billionaires” subject to the Obama tax rates to pay those extra “hundreds of thousands of dollars,” because they only make $200,000.

Does he not realize that the little company tending the lawn around Warren Buffett’s home probably pays the same income-tax rate that Buffett pays? And that his tax-rate increase on the “wealthy” would raise that firm’s taxes the same? According to the Obama vision, money you have earned is basically on loan from the government until our president deems you don’t “need” it anymore.

I think about the guy or gal who has worked their way up the ladder to finally reach the $200,000 taxable income level, who has a medical emergency or who is the sole source of income for an invalid parent. I wonder if they think they “need” every dime they earn.

There are very few Buffetts, and President Obama probably knows most of them. But we’ve got quite a few H.E.N.R.Y.s (High Earning Not Rich Yet).

I wonder if our president knows any of them.

There are lots of children in Wisconsin schools, but they’re not sitting in desks. They are called “teachers” when they’re doing their job and not abusing sick leave to throw a temper tantrum at the capitol (I say “teachers” in quotes because I refuse to dishonor real teachers.) These union thugs have proven, as if anyone still doubted it, the disdain that they have for the taxpayers who pay their worthless asses. They all should be fired.

Left Re-embraces Hate and Vitriol in Wisconsin:

The left has come unglued. Forgetting that public sector employees work for the taxpayers (and not the other way around), unions descended upon the Capitol in protest.

Among the loudest protesters were the teacher unions. Angry that the governor was not treating them as professionals, some teachers unions staged a “sickout,” causing schools to cancel classes due to insufficient staff levels. (Talk about a mixed message.)

Better still, some teachers dragged students to the Capitol as political props. Video released by the MacIver Institute shows students marching through the streets, carrying signs and protesting. Only one problem: the kids don’t have the slightest clue why they’re there. In the video, one student says, “We’re trying to stop whatever this dude (meaning Gov. Walker) is doing.”

But the depth of the students’ cluelessness was matched only by the nastiness of their teachers. Some union members were also seen holding signs that read, “Death to Tyrants.” Other messages included, “Hosni Walker,” “Hitler Outlawed Unions, Too,” and “Walker puts the dic in dictator.” Stay classy, government school teachers!

One protestor had sign that read, “I am not replaceable. I am professional.” Really? Do professionals disrupt the learning process to engage in silly political theatrics? Do professionals use students as political pawns to help secure hefty retirement and benefit packages for themselves?

Perhaps the teacher unions would have more credibility if taxpayers ever saw the unions’ expend this much passion and energy over the drop-out rate and the travesty of seeing high school graduates who cannot read their diplomas. Remember teachers, actions still speak louder than words.

Now that the unions are fighting for their very existence, they are open to discussing education reforms and spending concessions. But the unions should have cooperated long ago, before states such as Wisconsin started careening toward insolvency.

The unions and the other special interest groups are reaping what they have sown. They’ve called the shots for so long, that they’ve made harsh budget decisions a necessity. But instead of seeking constructive solutions, they are back to spewing anger, hate and vitriol.

Soon, that may be all that remains of the American left.

Also recommended is this piece at Powerline. Don’t miss the links to Jay Nordlinger’s excellent commentary on this ridiculous situation.

Just a small accounting on that new age of civility.

Herman Cain

Wisconsin Governor Scott Walker.

The Republicans are taking away my baby food!

Nancy Pelosi: Republicans put women and children last.

This will be an easy list to expand. Stay tuned.

UPDATES:

17 February 2011:

Hosni + Hitler = Scott Walker.

Don’t miss Charles Krauthammer’s article in today’s National Review, Constitutionalism:

Americans are in the midst of a great national debate over the power, scope, and reach of the government established by that document. The debate was sparked by the current administration’s bold push for government expansion — a massive fiscal stimulus, Obamacare, financial regulation, and various attempts to control the energy economy. This engendered a popular reaction, identified with the Tea Party but in reality far more widespread, calling for a more restrictive vision of government more consistent with the Founders’ intent.

Call it constitutionalism. In essence, constitutionalism is the intellectual counterpart and spiritual progeny of the “originalism” movement in jurisprudence. Judicial “originalists” (led by Antonin Scalia and other notable conservative jurists) insist that legal interpretation be bound by the text of the Constitution as understood by those who wrote it and their contemporaries. Originalism has grown to become the major challenger to the liberal “living Constitution” school, under which high courts are channelers of the spirit of the age, free to create new constitutional principles accordingly.

What originalism is to jurisprudence, constitutionalism is to governance: a call for restraint rooted in constitutional text. Constitutionalism as a political philosophy represents a reformed, self-regulating conservatism that bases its call for minimalist government — for reining in the willfulness of presidents and legislatures — in the words and meaning of the Constitution.
…
The most galvanizing example of this expansive shift was, of course, the Democrats’ health-care reform, which will revolutionize one-sixth of the economy and impose an individual mandate that levies a fine on anyone who does not enter into a private contract with a health-insurance company. Whatever its merits as policy, there is no doubting its seriousness as constitutional precedent: If Congress can impose such a mandate, is there anything that Congress may not impose upon the individual?

Karl Rove had an excellent article in yesterday’s Wall Street Journal, ObamaCare Rewards Friends, Punishes Enemies. The article details how the implementation of Obamacare is rife with waivers for unions, overreaching Federal control of insurance rates (typically the regulatory turf of the States), payoffs to the AARP, and more. John at powerline rightly calls this “crony socialism.”

From Rove’s article,

In September, HHS Secretary Kathleen Sebelius began granting waivers to companies that provided workers “mini-med” coverage—low-cost plans with low annual limits on what the insurance will pay out. This followed announcements by some employers that they would have to drop these plans because they did not meet the new health law’s requirement that 85% of premium income be spent on medical expenses. … Whatever is going on here, a disproportionately high number of waivers are being granted to administration allies.
…
It’s not hard to connect the dots. The Obama administration is using waivers to reward friends. On the flip side, business executives will be discouraged from contributing to the president’s opponents or from taking any other steps that might upset the White House or its political appointees at HHS.

This is not what people had in mind when candidate Obama promised in his acceptance speech in August 2008 to undo “the cynicism we all have about government.”

Read the whole thing for the details. We can’t get rid of this law fast enough.

“We could give it all back to you and hope you spend it right… But … if you don’t spend it right, here’s what’s going to happen.” — Bill Clinton, 1999

“We can’t just leave it up to the parents.” — Michelle Obama, 2010, referring to decisions on feeding children while talking about the Healthy, Hunger-Free Kids law.

The Socialist-Democrat Party has a long tradition of treating adults like children and respecting only a select few personal choices: the choice to have an abortion being one.

David Catron at The American Spectator has a great piece today on how this shameful tradition continues unabated among our current rulers. Check out Obamacare and the Broccoli Mandate:

If Gershengorn had been permitted to provide a candid response to the judge’s observation, he would probably have said something like, “What’s your point?” He, like everyone else in the Obama administration, presumably believes that the commerce clause gives the federal government the authority to regulate virtually every decision we make in our day-to-day lives. Indeed, the belief that Washington can — and should — supervise us as if we were a nation of children is the core tenet of their nanny-state political philosophy. This is the belief system that prompted First Lady Michelle Obama to say, as her husband signed a law that will regulate what children eat during summer vacations and what can be sold in school vending machines, that child nutrition is something “We can’t just leave…up to the parents.” Without the “help” of the federal government, some mother might fail to force broccoli on her kids.

Likewise, we “can’t just leave it up” to the patients to decide for themselves if they should buy health insurance. Indeed, according to the Obama administration, there is something sinister in the very suggestion that we must allow them to do so. In a recent editorial published in the Washington Post under the names of Secretary of Health & Human Services Kathleen Sebelius and Attorney General Eric Holder, we are told that the twenty odd lawsuits challenging the right of Congress to impose the individual mandate are “troubling.” Why are they so troubling? “We saw similar challenges to laws that created Social Security and established new civil rights protections. Those challenges ultimately failed, and so will this one.” In other words, the officials of twenty states, including the old Confederate bastions of Michigan, Colorado, Washington, and Nebraska, are actually modern equivalents of Bull Connor and Orval Faubus.