Too many people think that long-term care planning is just a decision about whether to purchase long-term care insurance. However, long-term care planning is so much more. It is a discussion about how you will fund this expense, where you will receive long-term care, and who will provide the care.
Ask a D.C. insider what’s the best way to solve the debt crisis. Nine times out of ten, they’ll recommend taking on more debt. That’s how things operate in the Potomac swamp. Up is down, right is left, digging yourself into more debt is the best way to get out of it. But it wasn’t always like this. In fact, there used to be common sense when it came to the economy. So where did it all go wrong?
The Heartbleed bug is a massive security flaw that could put you and your personal information at risk. And while there are things you can do to limit the damage and protect yourself, you haven’t yet seen the ramifications of this security disaster. The Internet in the post-Heartbleed world won’t look like anything you’ve seen before.
Politicians talk about the uninsured. Special interests argue on behalf of those with pre-existing conditions. But why is no one wondering how doctors are affected by the new law? They’re the ones on the frontlines dealing directly with new patients, as well as the red tape that makes bureaucracies go round.
Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
Here we sit Tuesday, thanking the heavens above that we live in the greatest country in the world. Allow us to count the ways. We discovered this morning that an estimated 810,000 previously uninsured Americans now have the good fortune of paying the U.S. Treasury for health insurance. That’s a full 1.7% of America’s 48.6 […]
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Every year millions of Americans wait until the last minute to prepare and file their taxes. Regardless of whether you’re one of these people, there are still things you need to be aware of before you send those forms in.
Technology brought the world together. But has it gone too far? Decades ago, mail was delivered by hand. Now it’s delivered in seconds. How has that changed the way you live your life? How has it changed the way people act with each other? These are just some of the questions we need to ask.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
Protect Yourself from Tax-Time Scams and Other Tax Pitfalls. Getting caught up in a tax scam can occur at any time of year. But your chances of getting scammed peak during that jolly season when you dutifully file your taxes. This is why, leading up to April 15, the IRS releases a list of the […]
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
Gun control isn’t a modern idea. The rise of gun control laws and limits on your 2nd Amendment freedom go hand in hand with the increase in the size and scope of government. Politicians want you to think the only people who can keep you safe are government forces. But as one renown libertarian economist and thinker will show you, their misguided laws do nothing but take away your freedoms and leave you less safe.
The government will do whatever it takes to make sure it has enough of your money to fund itself. On the surface you might think that means enduring a grueling audit. But the IRS and the government is more than willing to ignore your privacy in the cold relentless pursuit of the money they think they deserve. As they get bigger and bigger every year, the smaller and smaller your paycheck becomes as they leach off it.
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
Three Opportunities to Make Double-Digit Yields or 5, 10, or even 100 Times Your Investment! By now you have probably heard of crowdfunding. It’s a new, innovative way for artists and entrepreneurs to raise money online from a crowd of ordinary individuals. You make a monetary contribution to their project, and depending on how much […]
The Congressional Budget Office said the government needed to reach 7 million people by the end of March. They claim to have reached the goal and now the debate about Obamacare is over. But what does this milestone really mean in the ongoing healthcare discussion? And more importantly, how will it affect reforms going forward?
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
In an effort to cut costs and keep track of patients' records, governments could institute a medical guideline cookbook. Bureaucrats might think they have the best of intentions in mind, but these new rules would drag down the medical process and destroy whatever quality is left in our current system.
The best way to explain how to choose a good password is to explain how they're broken.
Gasoline prices have held fairly steady over the past three years, but the potential for a spring-summer price spike always exists. It wouldn’t take much for prices to lift back to the 2008 highs that caused near panic among motorists. GasBuddy.com offers a mobile app that displays price data for the gas stations nearest you. […]
Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The saga of All Saints could soon be coming to a community near you. Thanks partly to the scandal surrounding the IRS’ targeting of conservative groups, the agency has proposed a new set of rules for a huge number of social-welfare groups that claim tax exemption under Section 501(c)4 of the tax code.
The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
When you eat or drink something sweet, your body and your brain immediately want more. It’s like a drug, really. But in my book, artificial sweeteners are worse than plain table sugar. Far worse. They lull you into thinking you’re doing something smart and healthy by avoiding extra calories. But it’s all a mind game, […]
As full implementation of the Affordable Care Act (ACA) approaches, every doctor, research professional, and health administrator I talk to tells me the same thing: Obamacare is going to reduce the quality of care and cost you more… in some cases, a lot more.
Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.
As of December 19 at 11:50:59 a.m. GMT, the national debt of the federal government was $16,357,278,240,896.86, or $52,080.07 for every individual in the United States. The only sane and moral stance is to repudiate it entirely.
“Repudiation” is not a word used by the political mainstream. Part of the reason is who holds the debt. China is often castigated as the largest holder, but that country actually accounts for less than 8 percent of the money America has borrowed. On September 4, FOX News reported, “Fully two-thirds of the national debt is owed to the U.S. government, American investors and future retirees, through the Social Security Trust Fund and pension plans for civil service workers and military personnel.”
The United States is unlikely to repudiate money “owed” to itself. Nor will politicians voluntarily commit career suicide by reneging on promises to grandmas, civil servants, and veterans. That leaves few choices.
On December 12, the Federal Reserve issued a press release. It will pump $45 billion into the economy every month until unemployment falls below 6.5 percent, so long as inflation is below 2.5 percent. The new money will buy Treasury bonds. The Fed also renewed its current commitment to buy approximately $40 billion of mortgage bonds every month.
As long as government refuses to shrink, there is no other choice but to run the printing press until it is white-hot. Even hiking taxes to a confiscatory level is not likely to meet government expenditures, and it would probably cause social unrest.
However you approach the national debt, it is unsustainable. Austrian economist Michael Suede approaches it by holding the debt up against America’s gross domestic product (GDP). He writes,
Presently, the U.S. government is spending $6.3 trillion annually. Total state spending accounts for roughly 40% of U.S. GDP.… In other words, 40% of the U.S. economy exists to serve the purposes of war, imprisonment, welfare entitlements, bureaucrat salaries, regulatory bodies, subsidized housing and subsidized industry.
In early 2012, the national debt exceeded America’s annual GDP. In other words, it is now larger than the entire economy.
The good news is that the time is fast coming when the federal government will be forced to cut back, whether it wants to do so or not. Suede described two events that could spark a drastic reduction. First, “If the Fed were to accelerate [even further] the amount of Treasury and mortgage bonds it is buying, the value of the U.S. dollar may fall faster than the interest being earned by the foreign holders of our debt.” If so, then foreign holders would divest themselves of their debt, and this could cause a bond run. In turn, the value of the American dollar would be gutted.
Or inflation could rise precipitously, as it did in the 1980s. Suede speculated, “Should this occur, the Fed is not in a position to be able to reduce the money supply without driving interest rates up.” Even a 1 percent rate rise would add $160 billion in interest onto the $16-trillion-dollar debt. He concludes that a rise of several points “would completely demolish the state.” I expect it would survive, but the prospect of destruction may well be the only circumstance under which the federal government agrees to roll back.
The bad news is that many innocent people will be harmed by the fiscal and social fallout of whatever happens with the national debt. Repudiation would minimize that harm. And the sooner it happens, the better.
The case for repudiation
There are three possible ways to address the national debt. The first is to continue borrowing and paying interest indefinitely. The second is to repudiate the debt. The third is to pay it off.
Realistically, no one expects to pay off the national debt; it is simply too massive. Moreover, there is no political will to do so.
Instead, the government wants to borrow and pay interest indefinitely at taxpayers’ expense. In essence, the taxpayer acts as the government’s guarantor so that the interest and principal will be paid to the “investors.” Just one problem with the plan is that it is a type of Ponzi scheme. To pay off existing investors, the government needs to bring in an ever-increasing flood of taxpayers at the base. It is now so desperate for taxpayers that it is looting future generations by burdening them with crushing debt.
This raises a moral objection. Children in the shadow of the national debt have done nothing to deserve being there. They didn’t buy bonds, suck up entitlements, or vote anyone into office, and yet they are now economic hostages to a national debt clock.
Even Americans who believe in some level of mandatory taxation should be outraged. The ruling elites have created an inevitable economic catastrophe so that they can fund their political ambitions, line their pockets, and pay off crony capitalists. Nothing, not even stealing the future from children, has made them pause.
The politicians and bureaucrats are snatching the bread out of children’s mouths. Full repudiation is the only way to provide fairness to future generations.
But what of the older generations who “depend” on receiving the interest and principal, or who “need” the entitlements funded by borrowing and taxation? There is no sugarcoating the short-term prospect. There will be immense pain, and it will be terrible to watch. But that pain is inevitable. Entitlements such as Social Security will implode, even if repudiation does not occur.
The entitlements may collapse due to their own Ponzi-scheme nature, from the rise of interest rates on the national debt, or from another dynamic. The best outcome is to end the ongoing injustice as soon as possible. To continue an injustice because some people depend upon the proceeds is to enshrine it in perpetuity — or, at least, until it cannot stagger forward one more step.
Repudiation is also one of America’s best chances to reestablish a free and healthy economy. And it means weaning people away from their dependence on the state, especially on entitlements.
But can’t the bad effects be mitigated? For instance, could selling federal property to private buyers buy Social Security some transition time? In his essay “The Trillion Dollar Question: Should the National Debt Be Repudiated?” historian Jeffrey Rogers Hummel addresses this issue. “First, there is a practical difficulty with this option,” he states.
Suppose the sale of government assets does not yield sufficient funds to cover the entire debt? Then do you use taxation to repay the remainder, or do you permit partial repudiation? If you’re willing to allow partial repudiation, on what grounds can you object to total repudiation?
Then Hummel raised a compelling point. “The government is an institution that has both voluntary and involuntary relationships with its citizens.” In the involuntary relationships, the government has robbed and brutalized people through taxation, regulation, and other abuse. Why should the people who voluntarily bought government debt be first in line for money that results from the sale of federal property?
Surely the state’s victims have a better claim to restitution than people who had a choice and chose the risk of investing in government. The involuntary victims would include people who were forced to pay into entitlements such as Social Security. Thus, the elderly on a pension would deserve a lump-sum payout plus interest for money previously stolen by government.
The historical case for repudiation
The iconic Austrian economist Murray Rothbard was fond of pointing out that American governments had a long history of repudiating debt. In his book A History of Money and Banking in the United States, Rothbard described the repudiations that followed the fiscal crises of 1837 and 1839.
By 1847, four western and southern states (Mississippi, Arkansas, Michigan, and Florida) had repudiated all or part of their debts. Six other states (Maryland, Illinois, Indiana, Louisiana, Arkansas, and Pennsylvania) had defaulted from three to six years before resuming payment.
Elsewhere, Rothbard highlighted a basic principle underlying the wisdom of repudiation, asking “Why should more private capital be poured down government rat holes?”
Hummel provides historical data that the economic consequences might not always be as damaging as the panic-mongers claim. He wrote of the repudiations in the 1840s brought on by costly state investments in building canals,
Rather than having disastrous consequences, this repudiation brought on a widening circle of benefits. States became very wary of investing money in internal improvements or in anything else, while investors became very cautious about loaning money to the states.
One consequence is that when a spree of railroad building hit America,
the states not only left the development and expansion of the railroad network to the market, but also during this period, they finally threw off their mercantilist and interventionist heritage and, for the first time, instituted a reign of near laissez-faire at the state level. Not surprisingly, the period prior to the Civil War witnessed some of the most rapid economic growth in the nation’s history.
The national debt will only become worse and far more destructive with time. It cannot be paid off. It cannot continue indefinitely. It will end, and badly.
Those who call for the madness to cease by embracing repudiation are not villains who hate grandmothers. The villains are the ruling elite, who cry out insatiably, “More, more, more money!” It is someone else’s money they are spending; it is your money and that of your children. The only thing left to say is “no!”
[Originally published at the Future of Freedom Foundation]