Debt and Demography as Destiny: Emerging Markets Not Immune

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Many analysts are predicting that the emerging markets (BRICs etc) will own the 21st century, due to a superior budget balance, with far less debt than the more developed nations. But these analysts may be omitting some of the most important elements in their analyses.

Already in the decade before the 2008–2009 economic crisis, a number of factors favored considerably faster economic growth in the emerging market economies than in the industrialized countries. In contrast to the slow-growing and aging populations in the industrialized countries, emerging market economies are characterized by younger and faster growing populations. At the same time, savings rates in non-Japan Asia have considerably exceeded those in the G-7, while the emerging market economies are taking full advantage of the potential to grow rapidly through simply catching up technologically to the industrialized countries.

In the years immediately ahead, one must expect that the emerging market economies will retain many of the advantages that have favored their rapid growth in the recent past. There is now every reason to expect that these advantages will be amplified by the sounder public finances that characterize the emerging market economies. And there is also every reason to expect that, as they become even more important in the global economy, the emerging markets will become increasingly more vocal in pressing their case for their representation in international economic organizations like the International Monetary Fund to more fairly reflect their relative importance. _American

The author above rightly contrasts the prospects of "slow-growing and aging populations" with those of "younger and faster growing populations." And yet he forgets to look at another aspect of demography: intelligence. If the population average IQ is below 90, the long-term prospects for that country are not good -- unless it possesses a high-IQ market dominant minority.

So, looking at the author's "circle of favour" above, one would have to cross off South Africa. One would also have to cast a jaundiced eye at Mexico, Indonesia, Brazil, and Turkey -- all with average population IQs below 90. The future of those nations depends in large part upon how they choose to treat their market-dominant minorities, and how they deal with internal violence and corruption.

Although it is immensely wealthy in terms of minerals and energy, Russia, also, must be ejected from the "circle of favour," due to its collapsing demographics combined with its ominous trends back toward a Soviet-style centralisation of power, and reversion to tyranny.

China's economic miracle has been based almost entirely upon exports to Europe and North America. As those export markets have cooled, China has attempted to create internal markets out of nothing, building huge empty cities, apartment complexes, and shopping malls. As all of that wasted wealth (on top of the wasteful and corrupt state-owned enterprises) takes its toll on the nation's economy, economic stresses will likely lead to additional catastrophic decision-making by central planners.

South Korea and Taiwan score well economically, and on average population IQ. Both nations are, however, sitting under significant military threats from close neighbors. In addition, both nations are prone to the same demographic shrinkage that most affluent nations are prone to.

The US is being stripped for salvage by its ruling class. Only a significant re-revolution and return to constitutional ideals -- and a savage disciplining and down-sizing of governments at all levels -- can save the US from its designed dismantling. The US is likely to be dismantled, in other words.

After it becomes clear to the rest of the world that the US under Obama Pelosi is truly becoming a "paper tiger", significant shifting of alliances may well occur. But stability is not likely, until the human technological infrastructure evolves.

Thomas Sowell on His New Book "Dismantling America"

Sowell is one of the most incisive observers of the decay and decline of the American experiment. It is crucial for ordinary Americans to understand the dynamic process of intentional dismantling and decay of 230 year old constitutional protections.

The ideas behind the constitution were ingenious compromises between libertarianism and authoritarianism, but for those ideas to survive they require a substrate of knowledgeable and wise humans of basic competency. Unfortunately, that substrate has declined. It is declined to the point that a government of the size of the modern day US cannot be maintained, and will necessarily self-destruct.

US Government Debt: Going Up?

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What is responsible for the disastrous buildup of US government debt? In a word, corruption. Everyone wants a piece of the wealth. But these criminals are stealing from unborn generations, as you can clearly see from the graphic above.

There will be a huge price to be paid for the foolish whimsy of American voters in 2006 and 2008. Elections have consequences.

Notice how the defense budget has been going down.

So what has been driving up the deficit and the debt? Fixed entitlements, plus financial bailouts to special interests, piled on top of more financial bailouts to special interests.

If you think the end of this story will be fine and happy, you may want to take up skydiving without a parachute, or deep sea diving using cyanide gas breathing apparatus.

Will Obama Be Forever Known as the Unemployment President?

Unemployment numbers have risen to their highest level in almost a year.

But America is full of government and government workers. And even if government incompetence destroys the private sector and all its jobs, the government will still be there to help you.

There are 90,000 governments within the US! While not all of them can print money, the one that does print money is standing behind the other governments -- as long as their workers are unionised!

Mr. Obama has been good for unionised government workers. Of course, the public sector unions donated to Obama's campaign and participated in "get out the vote" efforts for Obama. What's a little corruption between friends?

If the governments of the US are not prepared to cut wages for government workers -- unionised or not -- there is not a chance in hell that they will survive the long run.

You need to start finding places to safeguard your assets where none of the governments can find them.

Liberals vs Conservatives: Psychology's Modern Morality

video via Who is John Galt
This TED talk is from Jonathan Haidt, a psychology professor and morality researcher at the University of Virginia. It is useful as a type of "out of the mind" view of human morality, and how human minds may be innately attracted to one pole or another, and how a mind might be primed toward one strange attractor or another.

Your blog host has traveled a path that has wound its way through conservative, liberal, libertarian, socialist, eastern philosophy of detachment, pacifist anarchist, and several other moral and quasi-moral perspectives on reality.

Freedom of beliefs and religion is paramount, as long as the religion focuses on the spiritual and does not delve into political or economic control too much.

A religion that attempts to enforce morality, politics, economics, and the rest of existence for everyone in the world, is not truly a religion, but is a totalitarian philosophy -- a system of enslavement of body and mind.

But a system of morality that is incapable of providing individuals and societies with the will to defend themselves against an onslaught of hostile outsiders, is useless or worse.

As to the middle ground, that is often determined by the stage of history that a society is passing through at the moment. Get back to me on that.

Gimme You' Money!

Obamanomics has Failed

Obama's Economic Quagmire

As Goes California, so Goes America

The world does not work the way politicians, journalists, ivy league professors, and university textbooks think it does. To understand the real world, the tenured clowns would need to ditch tenure and get out in the thick of things and experience reality.

Like that's gonna happen.

Obama Pelosi Train Wreck On Schedule to Demolish Grand Central Station Along With the Rest of the Economic System

The following article was published by US Congressman Paul Ryan in the Milwaukee Journal-Sentinel. It discusses some topics which put the finger of blame for the ongoing economic disaster within the US and the western world where it belongs -- on the statists in control.

Despite watching European welfare states collapse under the weight of their own debt, those running Washington are leading us down precisely the same path. With the debt surpassing $13 trillion, we can no longer avoid having a serious discussion about how to address the unsustainable growth of government.

Unfortunately, rather than make meaningful contributions to this conversation and bring solutions to the table, Democrats have attempted to win this debate by default. Relying on demagoguery and distortion, the left would prefer that entitlements - often labeled the "third rail" of American politics - remain untouchable, and the column by Paul Krugman of The New York Times is indicative of the partisan attacks leveled against the plan I've offered, a "Roadmap for America's Future."

When I introduced the "Roadmap," my hope was that it would spur an open and honest discussion about how our nation can address its fiscal challenges. If we are truly committed to developing real solutions, this discussion must be free of the inflammatory rhetoric that has derailed past reform efforts. In keeping with this spirit, it is necessary to clarify some of the inaccurate claims and distortions made recently regarding the "Roadmap."

The assertion by Krugman and others that the revenue assumptions in the "Roadmap" are overly optimistic and that my staff directed the Congressional Budget Office not to analyze the tax elements of the "Roadmap" is a deliberate attempt to misinform and mislead.

I asked the CBO to analyze the long-term revenue impact of the "Roadmap," but officials declined to do so because revenue estimates are the jurisdiction of the Joint Tax Committee. The Joint Tax Committee does not produce revenue estimates beyond the 10-year window, and so I worked with Treasury Department tax officials in setting the tax reform rates to keep revenues consistent with their historical average.

What critics such as Krugman fail to understand is that our looming debt crisis is driven by the explosive growth of government spending - not from a lack of tax revenue.

Krugman also recycles the disingenuous claim that the "Roadmap" - the only proposal certified to make our entitlement programs solvent - would "end Medicare as we know it."

Ironically, doing nothing, as Democrats would prefer, is certain to end entitlement programs as we know them, and in the process, beneficiaries would face painful cuts to these programs. Conversely, the "Roadmap" would pre-empt these cuts in a way that prevents unnecessary disruptions for current beneficiaries.

It reforms Medicare and Social Security so those in and near retirement (55 and older) will see no change in their benefits while preserving these programs for future generations of Americans. We do not have a choice on whether Medicare and Social Security will change from their current structure - the true debate is if and how these programs will be made solvent.

Far from the "radical" label that critics have tried to pin on it, the Medicare reforms in the "Roadmap" are based on suggestions made by the National Bipartisan Commission on the Future of Medicare, chaired by Sen. John Breaux (D-La.). That commission recommended in 1999 "modeling a system on the one members of Congress use to obtain health care coverage for themselves and their families." With respect to Medicare and Social Security, the "Roadmap" puts in place systems similar to those members of Congress have. There has been support across the political spectrum for these types of reforms.

By dismissing credible proposals as "flimflam," critics such as Krugman contribute nothing to the debate. Standing on the sidelines shouting "boo" amounts to condemning our people to a future of managed decline. Absent serious reform, spending on entitlement programs and interest on government debt will consume more and more of the federal budget, resulting in falling standards of living and higher taxes as we try to sustain an ever larger social welfare state.

The American people deserve a serious and civil discussion about how to reduce our exploding debt and deficit. By relying on ad-hominem attacks and discredited claims, Krugman and others are missing an opportunity to contribute to this discussion and are only polarizing and paralyzing attempts to solve our nation's fiscal problems.

I reject the notion that these problems are too big or too difficult to tackle or that it is acceptable to leave future generations of Americans an inferior standard of living than we enjoy. The "Roadmap" shows that a European-style social welfare state is not inevitable, that it is not too late for our nation to choose a different path and that we can do so in a way that preserves our freedoms and traditions.

Rep. Paul Ryan (R-Wis.) represents the 1st Congressional District. _MJS

Black Tea Party Members Attacked by Hostile Media

The media in America is biased against anything that is not of a radical leftist, redistributionist, hyper-statist nature.

For that reason, American media must be diced, sliced, sifted, stirred, sauteed, baked, boiled, broiled, pounded, flamed, and deep-fried until the foul stench and taste of statist slaveholder-elitism is eradicated. We have a long, long way to go.