About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Sunday, January 31, 2021

ACTA Report Helps Explain Presidential Election Results

Earlier this fall the American Council of Trustees & Alumni (ACTA) released the 12th edition of their invaluable annual report entitled What Will They Learn? in which they review core cirricula @ over 1,100 four-year public & private institutions in America.

For someone getting ready to select a college there is no better place to start than this ACTA report.  ACTA recently wrote to me that they are "the only organization that works directly with university trustees, alumni, lawmakers, faculty, & students - providing them with the tools needed to solve the serious threats that are facing higher education. Threats like the ongoing assaults on free expression on campus, steadily declining academic standards, & an unsustainable rise in the cost of college education.  We provide college leaders with the unvarnished information & resources they need to be effective & efficient, ensuring that the money that students, families, & taxpayers pay for higher education truly prepares them for engaged & informed citizenship & a rewarding career.  And, @ an affordable price."

The search for the right college can be overwhelming & many students & parents can be fooled by college reputations.  For example, ACTA grades  Harvard "D" with an annual tuition of $51,925 & Johns Hopkins "F" with an annual tuition of $55,350 - compared to the 23 schools on the ACTA  "A" list with annual tuitions from $6,456 for Kennesaw State University all the way up to $55,892 for Pepperdine.  So parents & students - make sure you know what you are paying for because employers do know, or will find out shortly after hiring you, what you learned that is useful in growing a business.

The ACTA report focuses solely on classroom achievement regarding what the schools teach while other college evaluators focus on way less meaningful topics.  

For instance , the U.S. News & World Report survey's top rankings concentrate on how selective a school is.  The WSJ/Times Higher Education College Rankings annual report is 40% based on the salary graduates earn & the debt burden they take on, 30% weighting for the spending schools put into instruction & student services, 20% weighting of student interaction with faculty & other students, & 10% assesses the diversity of the university community.

The above criteria don't tell you what matters most: what students are learning.  What Will They Learn? is a resource that does tell you exactly what the schools are teaching & what graduates have learned.  ACTA actually grades the schools.

By the WSJ's measure Harvard is the top school in America but is graded "D" by ACTA.  My friend Anne Neal, past president of ACTA & a Harvard alumni, used to tell me you could be an English major @ Harvard & graduate without ever reading one play by William Shakespeare.  Doesn't sound too rigorous does it?

Now I was only interested in learning engineering & putting my knowledge to work for gainful employment which of course depended on how much I could contribute to the growth of my employer's business.  Capitalism, after graduating from a school known by employers to produce positive results, makes it simple.  Pursuing your career otherwise is most likely building on bamboo shoots in a swamp instead of bedrock.

But the major college rankings systems are unconcerned with what schools are teaching & whether students are learning anything of value. 

Just look @ the following graphic & see if it resembles your own everyday experience.  So many people have told me recently that calling a bank, a doctor's office, or restaurant for take out, let alone a government office, has left them cold & dissatisfied in that the person they talked to representing the bank, doctor's office, restaurant, or government office, seemed disinterested, not engaged in the conversation, or actually gave out wrong information - if they answered the phone @ all.  In short these people exhibited many of the skills gaps shown on the graphic below - especially not being able to communicate effectively orally.  When an 80% effective oral communication (really should be 100%) is listed as a very important quality & only 40% of the time it is experienced something is wrong.
—Challenge Success, Stanford Univers
WS, MoneyW

And that something that is wrong is the poor education system in America.  Neal Boortz said "Government schools & teachers' unions are more dangerous to America's future than al Qaeda ever was."

Professor Friedman wrote in the Cato Policy Report, March/April 1999 that "any institution will tend to express its own values & its own ideas.  Our public education system is a socialsit institution.  A socialist institution will teach socialsit values, not principles of private enterprise."

Hillsdale College reports that for decades far too many American K-12 schools have failed to provide young people with a solid grounding in American civics - the study of American history, government, & economics & that this failure has contributed to the attraction so many young people today feel for socialism.

In turn, American colleges & universities are now hotbeds of progressive & "politically correct" ideology, including socialism, to the point that nearly half of younger Americans would "prefer living in a socialist country than a capitalistic one."  The word "socialism" does not carry the stigma that it did in the past thanks to celebrity politicians like AOC.  Much of America's youth ignorantly think the term refers to FaceBook or Twitter. 

The above phenomenon was vividly demonstrated in the recent presidential election in that young voters backed Biden over Trump 61% to 36% - source AP VoteCast.  All other things being equal this virtually handed Biden the presidency.

In Washington County, Michigan - home of the University of Michigan - Biden received 23,000 more votes than Hillary got in 2016.  Michigan State's home county provided 20,000 more votes for Biden.  This 43,000 additional youth votes for lackluster Biden was over four times the amount that Trump won Michigan by in 2016 thereby attributing a very significant portion of Biden's win in Michigan to people 18 to 29 years old.

A similar story is told in Wisconsin where Dane County, home of the University of Wisconsin-Madison, produced nearly 35,000 more votes for Biden than Hillary received in 2016.  Trump won Wisconsin in 2016 by less than 23,000 votes.

For a quarter of a century or more WI, MI, & PA have been tempting targets that looked in reach for Republicans only to fall short except in 2016 when Trump won all three by a combined total of less than 80,000 votes - thereby showing Trump's vulnerability regarding reelection in 2020.

Republicans were hoping for a split between Biden supporters & the Bernie/AOC/Warren hard socialist faction of the Democrat party - but the hatred of these people for Trump made them vote for Biden, who ran the most pitiful campaign in electoral history.

The above partial analysis of the 2020 presidential election results, as it relates to the successful indoctrination of America's youth (18 to 29) toward socialism, is in lockstep with the parents of K-12 students who don't want their children exposed to the Wuhan coronavirus.  These parents prefer that their children go to school online knowing they are not keeping up academically.  Several studies have shown that in the eleven months since the Wuhan coronavirus struck that K-12 students have fallen about 5 months behind what was already a poor learning system.  Parents of such students are concerned only about their children not contracting Covid- 19, without feeling any responsibility about how they could ensure their children kept up with their education - which is not even an afterthought as American students fall further & further behind students in the rest of the world.

This topic will be resumed in the next post, when a complete presidential election analysis will be presented. 

Sunday, January 17, 2021

The Significance Of The National Debt

On the day in 2011 when the gross national debt crossed $14 trillion Bill O'Reilly emphatically proclaimed on the O'Reilly Factor on FNC that we had reached our borrowing limit.  The USA could go no deeper into debt in this pundit's opinion without serious widespread bad effects to our country.

Well, @ the end of fiscal year 2019 the gross national debt had reached $22.7 trillion & after the deficit spending authorized to combat the Wuhan coronavirus pandemic it reached its current level of $27.2 trillion - almost twice the level that troubled Bill less than a decade before.  Of further concern is that both of these national debt numbers are greater than the annual GDP of the country.  And there is another $463.8 billion waiting in the wings in the form of increased individual checks of $2,000 per person up from $600 that was signed into law last month.  Further, Biden has proposed a "first installment" for his administration of $1.4 trillion (net of the increased $2,000 individual checks) bringing the total to $5.7 trillion of deficit spending in less than a year.

Note - the federal government divides the gross national debt into two main categories: 1) $16.8 trillion in publicly held debt such as that held by individuals, corporations, local governments, & foreign governments like China, & 2) $5.9 trillion in intergovernmental debt which is owed to special funds like the Social Security Trust Fund (an empty fictitious accounting ledger filled with IOUs of money that has already been spent on other politically expedient projects).  Figures are for the end of fiscal year 2019 so the large increase in debt due to Covid 19 spending in 2020 are not included in these subtotals.

With the growth & concern of the gross national debt during the past forty years we should have learned that the problem, if any, is not a number (i.e., an amount).  In fact, if you add in unfunded liabilities like federal employee retirement benefits, obligations for current Social Security participants above & beyond both projected revenues from their payroll & benefit taxes & the IOUs in the Social Security Trust Fund, & obligations for current Medicare participants above & beyond both projected revenues from their payroll & investment taxes & IOUs in the Medicare Trust Funds the unfunded liabilities are well over $100 trillion by the most conserative calculations & twice that amount by most others.  To put this debt & unfunded liabilities into perspective the entire American household net worth (i.e., not just assets or income) @ the end of the third quarter 2020 is $123.52 trillion. 

So even to the least discerning among us, after all the years of deficit spending, it should have become clear that the gross national debt problem is not just a large dollar number.  

Dr. John Cochrane put his finger on the problem with the debt, writing in the WSJ on March 18, 2020: America's "unique ability to borrow, & to promise eventual repayment by taxation, is a treasured but finite resource.  When a crisis comes in which even the Treasury can't borrow, we are in for a true catastrophe."  Until we reach this point our political leaders are more than happy to play musical chairs with our lives & economy hoping they will not be standing (i.e., in office) when the music stops.  We are just too ill-informed or disinterested to realize this is what is happening.

Professor Friedman taught that money available for taxation is composed of direct taxes & deficit spending (borrowing) & that the portion of the national debt that is paid every year is the interest payments on that debt.  The great libertarian professor explained that government spending should be minimized in order to have the most robust economy possible because the larger the proportion of private sector resources that the government takes (spends) the less money is available for consumption, production, savings , & investment - the things that drive the economy & prosperity.  

The above point is illustrated by the famous Harvard study by Carmen Reinhart & Kenneth Rogoff in that they found that advanced economic countries with public debt above 90% of GDP typically had slower economic growth - median growth rates fell by 1% & average growth rates by considerably more.  This reduction in economic growth is largely an unseen cost compared to, for instance, a very visible direct cut in pay by your employer.

Now the debt & deficits can become much more serious than just a slowdown in economic growth - which is bad enough because increases in your standard of living depend on economic growth.  Without economic growth our futures are less robust.  This seriousness starts to turn into a crisis when the Treasury begins to have problems borrowing money to fund much of the programs that far too many Americans count on for living expenses. 

This borrowing problem for America has not gone unnoticed by communist China, whose plans to supplant American leadership is known by all but the majority of the American citizenry, who are oblivious to such matters preferring to concentrate on identity politics, racism, & political correctness matters.  

The real annual growth rate of China's GDP has exceeded America's for over 40 years, with much of this time China's real annual growth rate being twice or even more than four times greater than America's, thereby setting China up to replace America as the preeminent country in the world - if America stumbles like in a Harris/Biden administration.  

China is projected to be the only major world economy to grow during 2020 - a year that America's GDP was in decline.  China's 2020 GDP growth rate will be reported Monday, but we know that Chineses exports rose 3.6% from a year earlier to a record $2.6 trillion, Chinese imports rose 6.5% from a year earlier reflecting strong domestic demand in China - a new source of Chinese growth, & its currency gained 6.6% against the dollar in 2020 (0.1436 dollars per yuan rising to 0.1531). 

See graphic below that shows China's growth on the world stage compared to America's declining then flat line stagnation.

click on graphic to enlarge

Once the general public, from all countries, refuses to lend money to the U.S. Treasury to fund the federal government (including forcing the U.S. to redeem - pay off - the face value of maturing bonds, i.e., the lenders want their money back), the Treasury is limited to raising taxes or counting on the Federal Reserve to print money to buy government debt meaning increasing the money supply & in turn inflation. 

If replacing foregone borrowing with increased taxes to finance government programs like Social Security, Medicare, & Medicaid starts slowly then increasing taxes like the corporate income tax, which is an invisible tax that most people incorrectly think corporations pay, will work for a short time.  But this could quickly turn into substantial individual income tax hikes as wealthy people & corporations flee America which will eventually turn to the obvious conclusion that the only people who can pay off the national debt are the property owners of record - the only people who cannot readily flee the country's direct tax burden, @ least not legally.

Property owners will also quickly realize that paying off the principal & interest on the national debt is a form of hidden taxation - inflation financed by the Federal Reserve printing money accompanied by an invisible tax on all property whose future income on that property, & in turn its owners, will not be able to keep up with the taxes due caused by inflation.  

Please understand I'm not talking about hundreds of thousands of dollars of debt that an undefined & vague group you hear about on TV known as our children & grandchildren will each pay off one distant day - I mean once the United States can no longer readily borrow money from the general public, because China has replaced America as the financial leader on the world stage, devastating problems will quickly set in for us like they most recently did in socialist Venezuela - @ one time the fourth richest country in the world with the world's largest oil reserves that now sees its people searching garbage dumpsters for food.

Venezuela has been devastated by an annual inflation rate of 2,000,000% & the local currency, the strong bolivar, has become worthless.  The strong bolivar lost 99.996% of its value against the dollar in eight months in 2018 during which time the dollar gained 2,401,878.4% against the official Venezuelan currency.  On August 31, 2018 there was 0.00417% remaining of the January 1, 2018 value of 1 strong bolivar per 0.0967 dollar.

Professor Friedman taught there is not one expenditure of the government that does less harm than making interest payments, which are simply a transfer of money from taxpayers to bondholders with the majority of American bondholders most likely putting the money right back into the economy.  Interest payments do not use up any resources - e.g., there is no labor that is unavailable for something else.  But there is a net outflow of wealth from America to foreign holders of our debt if they don't put the interest received back into the U.S.  Foreigners own 35% ($7.07 trillion) of our outstanding debt with Japan owning $1.27 trillion & China owning $1.06 trillion.  Source - U.S. Treasury as of September, 2019.  So this bond market - national debt game will work with unnoticeable disruption to our lives as long as there are willing lenders of money to America - both foreign & domestic.

The national debt went from $5.6 trillion to $10.0 trillion under GW Bush, $10.0 trillion to $19.5 trillion under BO, & from $19.5 trillion to $27.2 trillion under Trump in less than four years.  The latest assault on the national debt being the 5,593 page combined Covid relief & omnibus spending bill that passed Congress the week of December 21, 2020 - two bills that no one read, as usual.  Pelosi's nonsense is starting to worry me because it really looks like Congress has to pass a bill to find out what is in it.  Click here to see how individual senators voted on this bill & here to see how each congressman voted on it.

The further left into socialism the country goes in the Harris/Biden administration, with greater resources taken from the productive private sector to give to unproductive people dependent on government programs, the harder the fall will be if sources of borrowing dry up.

A decade ago pollster Frank Luntz said this Citizens Against Government Waste ad concerning a Chinese professor was the most powerful ad he had ever run.  Before I presented the ad originally in 2010 I had a charter member of the readership who was born in Shanghai verify the translation.

Now whether the Chinese professor is correct or whether there will be an exact duplication to the extent of the ordeal in Venezuela (inflation & currency devaluation) no one knows for sure.  But it is not far-fetched to think that having a national debt & unfunded liabilities that are five to ten times greater than our country's annual output, or equal to or greater than our net worth, will not end well if the worldwide public stops buying our debt.

This post answers the first presidential debate question I hoped would have been asked last September to Biden & Trump - What is the significance of the national debt now that the federal government owes more to the public than the economy produces in a year?  

This is the type of question & issue the country needs to focus on.  Answering it correctly, in understanding & action, will keep America growing, create wealth & value, & ensure America remains prosperous so that enemies like China do not overtake us.  We need to reduce government dependence among our people so that the increased free cash flow resulting from such independence can reduce our national debt & the need for foreigners to fund it.

Instead we elected a majority of representatives who supported Pelosi to immediately put in new, trivial, & superficial House rules regarding gender neutral language showing just how distracted America is from the issues that matter.

Sunday, January 3, 2021

The Way Forward - Presidential Debate Questions Need To Be Answered & Understood

Please direct your attention to the post right before the first 2020 presidential debate last September entitled Debate Questions For The American Citizenry   This post included fourteen questions, the correct answers to which are very important in preserving our liberty & warding off the socialistic tendencies the country is moving toward.

Of course nothing resembling these debate questions was asked by the moderator.  In fact it is hard to imagine either Biden or Trump answering them coherently.

But focusing on the title of the above post shows the debate questions were really meant for the American citizenry, not two politicians.  

The posts on RTE in the new year will concentrate on the answers to these debate questions as well as election analyses that show the best way forward to preserve our liberty for those who cherish the founding principles of limited government, personal responsibility, & free enterprise.  Bellyaching over the 2020 presidential election result is not that way forward whether or not the apparent Biden victory withstands the expected challenge on January 6 when the electoral votes are counted by Mike Pence in a joint session of Congress per the Constitution.

Socialism has taken hold in America with supporters of Bernie Sanders & AOC totalling 35% to 40% of voters in the Democrat Party.  Bernie has such a following that he almost won the Democrat nomination in both 2016 & 2020.  Bernie wants this type of representation in the Biden administration personnel & plans to put pressure on Biden to bring this about.

It will be much more productive to convince Democrat voters not inclined toward socialism of the dangerous path we are travelling - a path that has never turned out well for any country that has tried it.

In no particular order, in between other topics, I plan to post my answers to the subject debate questions.  I ask concerned members of the readership to send me any points they would like to see included in my answers to the debate questions.  Better yet, answer the questions yourselves & send them in.  Don't rely on me - which is the point of this post.

It is up to those of us who know better to turn the socialist momentum (mass times velocity in physics & politics) around.

It is not an easy task we have ahead of us.  We have lost much of free enterprise in America to the statists who mistakenly prefer a socialist republic.  If we don't take steps as described above, only Joe Biden stands in the way of a fundamental transformation of America & a tyrannical government that has been in previews in 2020 under the pretense of flattening the pandemic bell curve.  Our return to excellence, if ever, starts with understanding the answers to the subject debate questions that were never even thought of by the moderator, the candidates, or the audience even to this day.