Economy & Budget

Spending at the level of the U.S. government is toxic. Spending on this scale cannot be done efficiently and it cannot be done effectively or with accountability and therefore is corrupting our society. When the allocation of resources, because of its size, cannot be accomplished in compliance with the fundamental objectives; effectiveness, accountability and efficiency, the stewardship of our government-extracted resources is a sham and our trust is corroded.

I guess Ron Paul will soon attack Mitt Romney for being a socialist, since Romney is claiming credit for the Obama triumph saving the auto industry.

I am laughing as I write this. What can I say? Mitt Romney might be the most shameless liar in modern political history!

President Obama has spent much time lately discussing fairness. This is a word that has a very positive connotation. However, if one is going to make it the centerpiece of their campaign, it would be advisable to define what the word actually means to them.

Traditionally, fairness means giving everyone equal treatment. That means that proportionality should take a pinnacle position in fairness policies. A person who has very little should be required to give very little. A person who has very much should be required to give very much, but on a proportional basis.

The voters of Europe have spoken: They are not prepared to endure austerity measures to achieve financial responsibility and stability.

This has set the stage for breakup of the eurozone. The only way to finance the stimulus that French President-elect Francois Hollande is proposing is to increase taxes or borrow. Neither option is practical. His proposal to raise taxes to 75 percent on the wealthy will create a mass exodus of high-earning Frenchmen to lower-tax jurisdictions outside of France. It is highly unlikely that the credit markets will lend the French government enough money to stimulate its economy at economic rates.

While the world is finally witnessing the fundamental flaws with the EU — namely, a unified currency system combined with a dispersed political framework (meaning financial and political decisions cannot be adequately coordinated) — the problems were greatly exacerbated by the reduction in liquidity and the risk aversion of investors that followed in the wake of the U.S. subprime industry meltdown.

When the bubble burst in the small European nations, they, unlike America, could not just print more money. They had to go to the EU central bank, hat in hand, and seek a bailout from the stronger economies in Europe such as Germany and England. It quickly became a political fiasco. The European central bank imposed drastic austerity measures on the populations of the PIGS — measures that have proven to be politically disastrous and caused conflict and unrest even in England, one of the wealthiest countries in the EU.

In my Elizabeth Warren column, I referred to the war of the worlds about the future of the U.S. economy. Well, the dark side in this war is led by Mitt Romney, the man who likes firing people, claims that vulture capitalists are job creators and recently criticized the housing policies of a great man, his father, George Romney. The even darker side is led by Ron Paul, whose reactionary economics would bring America back to Austrian economists from a previous century, would cause a depression for America, and have nothing to do with the Constitution or the Founding Fathers.

Europe is on the brink of collapse.

The prime minister of the Netherlands just resigned over the issue of austerity. President Sarkozy of France will probably lose his election to the socialist candidate Francois Hollande over the issue of austerity. The grand deal to save the euro and the European economy is about to collapse. The economies of Spain and Italy are falling under their own weight and cannot achieve the austerity targets agreed upon by the rest of Europe.

Europe's economic collapse will have a negative impact on the U.S. economy. There is no one left to bail out Europe, if they don't solve their own internal problems.

Every year companies should fire the bottom 5 percent of their workforce. Both the company and the employee will benefit from this policy. The company benefits because it replaces the least productive employees with more productive employees. The employees benefit because they are in a position where they are the runt of the litter and suffer psychologically from having low self-esteem as a result of being the least productive. Most of these employees would benefit from being in new jobs that can take advantage of their strengths. In the new jobs they will eventually make more money and have higher self-esteem, which leads to better productivity.

Are we not judged by God relative to our kindness to the downtrodden and the disadvantaged? Maybe. But since God created this planet and everything on it, including the laws of nature which dictate that the strong survive and the weak perish, why are models based on those laws so frequently disregarded?

Can anything survive for long if it continues to lower its standards to the weakest 15 percent of itself? All living things, from animals to humans, by following such an approach, would become extinct in time. All companies and governments will eventually bankrupt themselves by governing their assets in this manner. Communism lived and died quickly because it strangled itself with an idealistic theory that sounded generous, but was seriously flawed. Socialism is like a deadly lung disease, wherein you eventually die by slow suffocation. Capitalism, alone, takes into account the true nature of our species and will always survive through self-adjustment.

Most Americans are pleased that they can refinance their homes at incredibly and historically low interest rates. We are certainly thankful for the high value of the U.S. dollar when we travel abroad. Wall Street, U.S. banks, the auto industry, unions, money market account holders — all were too happy for their bailout gift from the U.S Treasury and the Federal Reserve. Our economic system is based upon free markets, yet in the last four years we have had anything but a free-market economy. Once upon a time there was a television commercial that reminded us, "You cannot fool mother nature.”

The same holds true for markets. Distortions, anomalies, bailouts, TARP, etc., are only delaying the inevitable. The U.S. advantage is that in Washington, D.C., at the Federal Bureau of Printing and Engraving, the presses are working 24/7/365 printing crazy money. That cannot be done in Europe because of the eurozone constraints. If the PIIGS were able to print their currencies individually, we would be experiencing hyper-inflation NOW! Thank goodness for the eurozone in this matter.