What Would Hamilton Say about Congress's Debt Limit Debate?

I am reading Ron Chernow's excellent biography Alexander Hamilton. On page 300 he discusses Hamilton's first Report on Public Credit which he wrote as the first Secretary of the Treasury:

In the report's final section, Hamilton reiterated that a well-funded debt would be a 'national blessing' that would protect American prosperity.  He feared this statement would be misconstrued as a call for a perpetual public debt--and that is exactly what happened.  For the rest of his life, he was to express dismay at what he saw as a deliberate distortion of his views.  His opponents, he claimed, neglected a critical passage of his report in which he wrote that he 'ardently wishes to see it incorporated as a fundamental maxim in the system of public credit of the United States that the creation of debt should always be accompanied with the means of extinguishment.' The secretary regarded this 'as the true secret for rendering public credit immortal.'  Three years later Hamilton testily reminded the public that he had advocated extinguishing the debt 'in the very first communication' which he 'ever made on the subject of the public debt, in that very report which contains the expressions [now] tortured into an advocation [sic] of the doctrine that public debts are public blessings.'  Indeed, in Hamilton's writings his warnings about oppressive debt vastly outnumber his pens to public debt as a source of liquid capital. Five years after his fist report, still fuming, he warned that progressive accumulation of debt 'is perhaps the NATURAL DISEASE of all Governments.  And it is not easy to conceive anything more likely than this to lead to great and convulsive revolutions of Empire.'

And, of course, Robert Rubin and Timothy Geithner are no Alexander Hamiltons.  They are more Madoff and Ponzi than Hamilton.

A Federal Reserve Bank Position is Bachmann's Acid Test

I spent a few minutes Googling +Michele Bachmann +"Federal Reserve Bank" and found little. Bachmann's website says that she is for cutting government and debt, but, like the fatuous debate about the Glass Steagall Act, saying you are for cutting taxes is beside the point. (The Glass Steagall Act is a matter of irrelevance to the bubbles that have riddled the American economy since the establishment of the Federal Reserve Bank.) Ronald Reagan said he was for cutting taxes, but through supply side cum Keynesian economics he created a thirty-year bubble whose bursting we now see. Bachmann says that she is for less debt, but Reagan said he was for less government; he did not really cut government (his increases in defense spending compensated for his cuts in domestic spending).

In short, the Republicans have lied for 30 years. They have repeatedly said that they favor small government and free markets, but there was no significant reduction in government or in regulation during any of the Republican administrations. George W. Bush expanded government, setting the stage for Obama's return to the pre-Reagan government expansion pattern.

The only way to limit government is to prevent money-printing.  This would have the side effect of forcing some manufacturing back to the United States as the treasury bonds that are currently used by foreign banks to prop up the dollar would not be issued with the current profligacy. In turn, stock markets and Wall Street as well as government would shrink.  The mess that a century of Progressivism has created would begin to be sorted out. It would not be pleasant, but if we do not do something now there will be worse hell to pay when the dollar finally collapses.

Bachmann is smart enough to have ideas about the Fed, but her Website seems to be silent, and she has not responded to my earlier letter. Unless she is willing to discuss a policy that would contain or eliminate the Fed, her small government credentials are bogus.  She is another Progressive masquerading as a friend of small government.

Obama's Waning Popularity Suggests Legacy Media's Waning Influence

Rasmussen's daily presidential tracking poll indicates that President Obama is vulnerable to a Republican bid. According to Friday's poll, 46% of the public at least somewhat approve of Obama's performance while 53% at least somewhat disapprove.  A minority has consistently strongly opposed him.  The difference been those who strongly disapprove of Obama and those who strongly approve has been negative for some time and the difference is currently a whopping 19% (40% strongly disapprove and just over half, 21%, strongly approve).  But independent voters are the question.  If 51%  at least somewhat approve then Obama will likely win against a Republican.  In my own case, I am not certain that I would vote for a generic Republican like Mitt Romney or Michele Bachmann; rather, I would vote for the Libertarian candidate.

Obama's weak to modest poll results fly in the face of incredible residual pro-Obama bias in the legacy media. Obama's policies have completely failed. His money printing, the stimulus, and his preposterous health reform act have failed to restore economic growth and have failed to capture the public's support. A majority of the public continues to disapprove of the ill-conceived health reform act. Nevertheless, the legacy media continues to put a positive spin on his performance and continues to distort economic events surrounding the bailout, the activities of the Federal Reserve Bank, the refusal of Congress to expose the Fed to an audit, and the massive mal-investment that has characterized the American eoconomy for decades and that is slowly leading to an economic and political collapse.

Obama's mess is much bigger than Bush's, but the legacy media says otherwise. Common sense and the bare unemployment statistic expose the legacy media's lies to simple falsification.  Obama's numbers, then, suggest the legacy media's continuing but waning influence.  If Obama's policies, which have failed worse than Bush's, were exposed to the same media spin that Bush's were, Obama's strong approval rating would like be at 4%. That they are at 21% suggests that a good portion of the public is committed to the legacy media's pro-Wall Street and pro-big government ideology. That an additional 25% somewhat approves of Obama shows that, though waning, the pro-Wall Street media still influences many Americans.  But their numbers are getting thinner. In the 1940s, the  pro-Wall Street media was able to manipulate 60.8% to support Roosevelt's failed New Deal; today, the number taking the legacy media's side is significantly less, about 46%.

Debt Ceiling Crisis? A Mazda Miata in Denmark.

Obama's Debt Mess is Bigger than Bush's. And this doesn't include the Bush/Obama Fed's 2009-11 400% monetary expansion. Chart Courtesy of US Government Spending.com.

In looking at the recent discussion of the so-called "debt ceiling crisis," I am surprised that no one in the legacy media unravels the cost of government operations and atavistic military strategy.  There are discussions of costs of failed but supposedly sacrosanct programs such as Medicare and Social Security, but no one seems to have asked that the federal government provide information about what percentage of these programs goes to administration, capital costs, personnel costs, and other service costs, such as consultants.  For instance, an organization called the Center on Budget and Policy Priorities points out that $705 billion go to defense, but does not clarify how much of that goes to colonels in the Pentagon sending memos to each other and how much goes to keeping America safe.

Anyone who has worked in a bureaucracy knows that empire building and waste are rules, not exceptions. As well, it is evident that numerous federal departments are complete failures and should be terminated. These include the Departments of Education, Labor and Energy.  

As well, we currently maintain more than twenty military bases in Germany.  What, exactly, are we defending Germany from?  Vladimir Putin? Fidel Castro?  Why can't Japan defend itself?  It seems to me that the Japanese, Taiwanese and South Koreans can either pay us for maintaining bases in Guam, South Korea  and elsewhere in Asia or, better yet, do it themselves.  A list of US military bases around the world is here. There are over 1,000 that cost us over $100 billion per year. Do we really need so many bases?  Our main opponents now are terrorists who are mobile, incognito, work in microscopic units and are not susceptible to orthodox warfare.  I appreciate the importance of security, but do bases in Denmark and Spain really contribute to our or to Denmark's and Spain's defense?  Are they relevant to post-modern warfare? It seems that something is rotten in Denmark, and in Washington, if  the President and Congress view a debt ceiling of $14 trillion as a "crisis" but view 1,000 military bases, including many in Germany and Denmark, as sacrosanct.

The Washington crew, including Boehner, Obama and Reid, remind me of my ex-wife who, with a $30,000 credit card balance in 1991, considered her lack of   Mazda Miata a "crisis" and went out and bought one for an additional then-$26,000 in debt.  American politicians have a multitude of Mazda Miatas: dole programs, bridges to nowhere, failed educational systems, failed energy policies and bloat in the military.

The American people have not gone brain dead.  They do not agree that indebtedness nearly equal to the nation's gross domestic product of almost $15 trillion is desirable. According to Rasmussen, fifty-five percent of likely voters believe that cuts in government will help the economy. As well, according to Rasmussen:


Just 24% of Likely U.S. Voters think tax increases help the economy. Fifty-four percent (54%) disagree and believe tax hikes hurt the economy...Most voters have said tax increases hurt the economy in every survey but one since July 2008.

If so, why do Americans continue to elect profligates like Boehner, Obama and Reid,  who think every military base is a Mazda Miata?  My guess is that the legacy media, pawns of Wall Street, bamboozle the public.

Social Security provides a benefit that is a tiny percentage of the average contributor's future value of lifetime contributions.  There are specific reasons, including its welfare component and the 21st century workers' subsidization of 20th century retirees as well as Congress's use of Social Security funds for other purposes.  But given Social Security's failure, why do 21st century Americans want it?   Why is there no discussion of voluntarization?  If Social Security is  20% of the federal budget, even authoritarians like America's Progressives should be glad to allow citizens to opt out of the failed program. But they aren't.  Every opportunity for authoritarian compulsion, badly designed programs and ignorant violence is a Progressive Mazda Miata.

Moreover, if few Americans believe that tax increases help the economy, why is John Boehner ready to capitulate to the Miata-loving Progressives in the debt ceiling discussions? 

The debt ceiling crisis is an opportunity to propose voluntarization of Social Security, the elimination of the Departments of Education, Labor, and Energy, the elimination of half of the military bases and the elimination of one third of government operations costs, including in the Pentagon. If Boehner does not take advantage of it, the Republicans need to go.