"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27,2010


Thursday, February 26, 2009

Mind-boggling wastefulness

Toby Harnden, US Editor, Telegraph.co.uk reports that the cost to each US taxpayer of Mr. Obama's 2010 budget is $25,573.48. Mr. Obama complains about what he inherited. He sure didn't inherit frugality or fiscal restraint.

See details at http://blogs.telegraph.co.uk/

Please click on the links to the left for US House and US Senate. Locate your representative and senators and send them the following message:

Dear ___________:

The cost to each of us taxpayers of Mr. Obama's 2010 budget is $25,573.48. I am a taxpayer and I cannot afford this level of unnecessary and wasteful federal government spending. As a taxpayer and a constituent I ask and implore you to vote against this 2010 budget.

Thank you.

Wednesday, February 25, 2009

$10,626,877,048,913.08

“A Debt They Cannot Pay”

Mr. Obama’s very own words. Those five words are the sole reason for TheFundamentals.

The Republicans hooted and clapped and acted as if finally the President was speaking their language. Who are they kidding? Their track record on debt accumulation is abominable. They should hang their heads in shame and just vote against all spending legislation until their time of penance is complete.

What is “a debt they cannot pay?”

On January 20, 2009 BHObama took office. The debt of the US as displayed on the website treasurydirect.gov was 10 trillion, six hundred and twenty seven billion dollars or, to be specific, $10,626,877,048,913.08. Wow. A lot of us might want that obligation attributed to someone else.

This is the number BHObama says "we inherited." Let’s examine that choice of words for a minute. The immediate connotation would appear to be that neither he nor his colleagues in the Senate and the House had anything to do with it. Sounds like the same old politics to me. When he left the senate of the State of Illinois it was debt ridden and had unfunded pension obligations that have been described by others as measuring in the tens of billions of dollars. Was he responsible for that debt? Here’s a simple solution that is in keeping with all his rhetoric.

Please tell us debtors (that's us folks) what the same number will be on January 20, 2010. Ditto for January 20, 2011 and January 20, 2012.

Let's stipulate that the Republicans spent us into a debt we cannot pay. We agree that this is unacceptable. Just tell us what the number will be going forward and then we can budget and decide if we can afford to spend or if we must save. Also, we have heard a lot about transparency and making information available. HClinton just spent some time with our creditors asking them to keep loaning money to us. Well, I think those creditors would also be interested in the three numbers above. They would probably view it as a commitment they could count on.

Come to think of it, that would be change we all could count on.

Monday, February 23, 2009

Understanding Obama/Reid/Pelosi Stimulus Bill

My neighbor shared this parable with me. I would like to give it proper attribution but I do not know the original source. Perhaps a reader can let me know.

"Shortly after class, an economics student approaches his economics professor and says, "I don't understand this stimulus bill. Can you explain it to me?" The professor replied, "I don't have any time to explain it at my office, but if you come over to my house on Saturday and help me with my weekend project, I'll be glad to explain it to you." The student agreed. At the agreed-upon time, the student showed up at the professor's house. The professor stated that the weekend project involved his backyard pool. They both went out back to the pool, and the professor handed the student a bucket. Demonstrating with his own bucket, the professor said, "First, go over to the deep end, and fill your bucket with as much water as you can." The student did as he was instructed. The professor then continued, "Follow me over to the shallow end, and then dump all the water from your bucket into it." The student was naturally confused, but did as he was told. The professor then explained they were going to do this many more times, and began walking back to the deep end of the pool. The confused student asked, "Excuse me, but why are we doing this?" The professor matter-of-factly stated that he was trying to make the shallow end much deeper. The student didn't think the economics professor was serious, but figured that he would find out the real story soon enough. However, after the 6th trip between the shallow end and the deep end, the student began to become worried that his economics professor had gone mad. The student finally replied, "All we're doing is wasting valuable time and effort on unproductive pursuits. Even worse, when this process is all over, everything will be at the same level it was before, so all you'll really have accomplished is the destruction of what could have been truly productive action!" The professor put down his bucket and replied with a smile, "Congratulations. You now understand the stimulus bill."

Sunday, February 22, 2009

Government Gone Wild!!

Look left - do you think we’ve spent enough already? Here are some simple lessons:

Excessive behavior requires remedial action. There is just no way to avoid it. If you eat too much, you feel crappy and you need to fast. If you eat too much for too long a period you gain weight and you run health risks – high blood pressure, diabetes, heart problems, cellulite in the butt (anyone come to mind?) and so on.
A little bit of exercise goes a long way. A little bit of discipline goes a long way. Just get out and walk a few miles four days a week. Use the stairs. Go outside and pick some weeds. Bike to McDonalds. Clean the House; help your Senator get a JOB (see links at left.)
If you go on a spending binge you will need to hunker down and pay the debt off. So, you do without. Keep the car an extra year or two. Postpone a vacation. Cut out eating out three times a week. Dilute your good booze when friends arrive.
Save some money. Set aside 5% of each paycheck and bank it.

Now that is really not that difficult is it?

So, here’s a suggestion. We just had an election and somehow the winners have interpreted their success as license to ignore the above lessons. One thing we know for sure is that they, like any other undisciplined human, only get away with what they are permitted to get away with. Call them on their foolishness; they too will change their ways.

So, write to them. Here’s how. Contact your two senators (http://www.senate.gov/) and representative (http://www.house.gov/) and insist that they follow these Rules (cut and paste them in your email) and insist they report back every 60 days on the action they have taken to follow these Rules. No exceptions or they get tossed in November 2010. Others will be glad to implement the Rules beginning January 2011.

Rule 1. No more deficit spending. Balance the budget and reduce the debt. Do it now or get tossed. How to do that you ask? See Rules 2 - 6 below.
Rule 2. Reduce all government spending by 10% immediately including entitlements. Do it now or get tossed.
Rule 3. Reduce all government employment by 5% per year for the next four years. Do it now or get tossed.
Rule 4. Pay down the national debt with a tax increase below. Do it now or get tossed.
Rule 5. Increase tax rates on top 10% earners by 33% and use part of proceeds to pay down debt and rest for a tax deduction for savings of 5% of income for all other taxpayers. Do it now or get tossed.
Rule 6. Pass term limits (6 years max; no pensions) immediately. Do it now or get tossed.

If we follow these simple Rules we will correct the mess we’re in by November 2012. Just in time to throw out the rest of the bastards we missed in November 2010!!!

Friday, February 20, 2009

Note to EHolder

Dear E,

This coward is going to reach out as a result of your strength and bravery in asking us racial cowards to stop avoiding the race subject.

So, E, here goes.

I measure folk based on values and adherence to fundamentals. I believe in work, education, obeying the law and being financially responsible for my commitments and obligations. I have worked all my life, graduated from school, learned how to read, write and make change. I have put up with more silliness from government employees and bureaucrats than I have time to recount and still live a productive life. If I owe someone money, I pay it. If I say I will do something, I do it. No need for a contract or a lawyer or a court. If I can’t stand someone I stay away from them. I don’t shoot them, I don’t envy what they have and I sure don’t steal from them. I pay my taxes and I don’t seek government assistance.

What do you believe in E?

Should a person who causes injury to someone pay for it? Or should we excuse it because maybe they did not stay in school and did not learn how to put up with all the crap that most of us have to deal with daily? Are you suggesting that all us cowards should be ashamed of ourselves for wanting to be around people who go to school, go to work, pay their bills and their taxes, avoid government employees and programs, obey the law, discipline their kids and still find time to be a good neighbor without whining to some government dope who wants to lecture them about their moral strength? There’s a lot of good people out there - all colors and religions and ethnicities.

E. Praise the Lord. You are one strong, brave unique fellow. But I am still not sure if you believe in any of the concepts above. Do you? Here’s a modest suggestion. If you believe in something tell us. Take a stand. In the meantime, if all you can do is pontificate, I suggest you get to work, find the bad guys, prosecute them and shut the f*** up! That’s how I will measure you.

Thursday, February 19, 2009

You go girl. U R Awesome!

Note to HClinton.

Dear H –

Just a quick heads up. The country you represent is nearing financial bankruptcy; moral, ethical and spiritual bankruptcy objectives have mostly been attained. NPelosi (currently appearing at the Vatican) and HReid (location unknown; possibly Vegas strip) appear to be moving forward quickly to accomplish financial ruin objectives. Strong assists being provided by TGeithner (note to personal tax advisor; pls duplicate Treas Sec'y tax logic and procedures asap) and BBernanke (does being an expert on Depression I mean that we can get to Depression II really fast?) Do your best to continue policy of ignoring these facts in dealing with our Asian funding sources.

Suggest you cool it on the leadership/guidance approach and investigate all possible sources of borrowed funds. Also suggest you spend more time asking questions and listening to answers re: lowering health costs, lowering education costs, lowering manufacturing costs and lowering government costs. Pay particular attention to answers involving limitations on unions, lawyers, politicians, taxes, laws, rules and bureaucrats. Take notes; post regularly on your blog. We are fascinated by your observations. You are one national treasure.

H. We all miss you. No need to hurry back. Just send notes and updates. Bill seems to be doing reasonably well on his own

Wednesday, February 18, 2009

Some modest ideas....

Here are a few modest thoughts. Pls add you own by clicking on the link at the bottom.

Greenspan commenting on remedies for the economic situation of today is akin to Bernie Madoff teaching investment ethics at the local grade school.

Fool me once, shame on you. Fool me twice, shame on me.

Is California too big to fail?

Is it too small to exist? Could we consider selling California to the Saudis? Or Hugo Chavez?

Would Ontario consider a fire sale price for Michigan? If we promise to throw in their genius governor? And the auto company execs?

How about if BHObama travels coach for the next 90 days and we turn Air Force One over to WBuffett’s rent-a-jet business?

Here’s a thought that has been bouncing around in my mind for some time. If you work for any government, one day a week, you need to show up at a taxpayers home and do chores as assigned by the homeowner/taxpayer. They rate the quality of your services. Get two bad reports and you lose your government job, even if you were elected to it. No unemployment compensation. Chores include tasks like shining shoes and washing automobiles.

Would Mexico take California back? No charge! Would Austria take back Ahnold?

Did someone fire the Donald, after the umpteenth bankruptcy of another business bearing his name?

Who are your heroes?

Has any western power ever prevailed in the middle east or that Afghanistan garden spot? How do you defeat people who enjoy killing and go home at night to no electricity; no tv; no salty snacks and no fertility drugs and can't wait to get back to killing westerners at sunrise?

I can’t detect any significant difference between Roland Burris and the other 99. Can you? Tom Coburn excepted.

If a Martian landed here, saw a tv set tuned to either a sporting event or one of those crappy news shows, would he be correct in concluding that we’re either impotent, incontinent or both? If men gotta pee but can’t pee what are they doing at sporting events drinking beer?

Pass the following constitutional amendment: All government employees must travel in a Smart car or use public transportation.

If the dimwit mayor of Chicago does succeed in landing the Olympics will the athletes have to pay to play?

I would contribute to a fund to send Greenspan and his wife on a lengthy sabbatical to remote locations without satellite hookups.

Isn’t it comforting to know that HClinton is now traveling around spreading the gospel of the US as the US borrows funds to send HClinton around spreading the…..

Closing test question: Please list the world leaders who follow the following concept. “Just stand back as your enemy engages in self destruction.”

Wednesday, February 11, 2009

Mr. Obama, it is time for change

BHObama has taken to describing the economic situation as an inheritance from the prior administration. This use of the word inherit takes a bit of license as the most common use of inherit is to describe something acquired or received through legal or physical succession. He is also using the same terminology and phrases from his candidacy speeches in describing what his administration is doing or contemplating to do with respect to the economic situation. These are clues, really good clues. We got even better clues from Messrs. Geithner and Bernanke yesterday. I think we can posit that the banking problem is rather large and that the economic growth machine or consumer society that produces real wealth and adequate government revenue flows to pay for the programs and employees and their perquisites is badly broken.

So, BHO wants you all to know that he is not responsible for making the mess – Georgie did it. So, what does he not know or knows and doesn’t want us to know that he knows?

Well, back to the clues. The diversion of responsibility suggests that they don’t know what to do. If that is the case, it is probably based on two conditions: one, they can’t measure or quantify it and, two, therefore they don’t know where to start to do something and there is probably some fear that they will do the wrong thing. So, we still should ask why are they starting by spending billions that don’t address the problem?

Geithner and Bernanke provided some clues to the problem. We have obviously permitted a number of banks to reach the point of no return (i.e. too big to fail (TBTF.) In the good ole days the bank regulators would show up on a Friday afternoon with a bunch of papers, take the place over and assure the insured depositors that their deposits are safe and then deal with the assets – usually sell them to another bank. It appears that the other banks are in equally crappy shape. They are probably insolvent meaning their liabilities exceed their assets? So, are there no good banks to take over the crappy banks? And, if that’s the case, then the government has to take over all the crappy banks and that could be most of the banking assets and deposits in the country? And now I know maybe why they aren’t too sure where to start.

So what does this mean to us regular folk? Well, I think it means be careful, save your money, find a safe place to put it, pay down your debts, don’t incur more debts and cut back in all ways possible. It also means that all governmental entities need to do the same. We are indeed in for change. It’s just not the form or type that BHO was describing. Mr. Obama, please get rid of your campaign speech rhetoric, study this problem carefully (believe me you don’t grasp it,) do not rely on politicians (here’s a simple suggestion – do not listen to anything said by Charles Schumer of NY) and academics for guidance (find some good regular folk who have to earn their money and balance their budgets) and only spend available (no more borrowing) government resources on programs providing necessities for folk in difficulty. Pass a one year tax increase on the top ten percent of taxpayers. Layoff government workers and shut down unneeded bureaucracies. Last, constantly encourage all of us to donate cash and goods to charities so that they can help folks in difficulty.

Government has to cut back and do it immediately. At every level. These wasteful spending programs are akin to running out to the local store and buying a carton of cigarettes on the day you are diagnosed with lung cancer. It is either massive stupidity or resignation and acceptance that you are in a terminal state.

Mr. Obama, describe it how you wish. If you are not up to the job you owe it to us all to turn it over to someone who is. If you believe it is Georgie’s problem you need to resign. We have all been in situations where we recognize that the new leader or boss is just not the right person for the job. The early clues are not good for you. If need be, take a month or two to learn more and then pick a starting point, perhaps one of the big banks and take it over with the existing mechanism and work it through. Then do two more and so on. Do not worry about making a mistake. Do not worry about triggering a bigger problem. The people you are listening to are not people who take measured risks in order to accomplish goals. You need smart people who are risk takers and who know how to work through problems and not worry about reelection.

Thank you.

Sunday, February 8, 2009

Threat Level System (modified) - RED ALERT NOW

One of our government’s moves during the last decade was the implementation of the Homeland Security Advisory System. This color coded notification process contains five levels as follows: Severe (red), High (orange), Elevated (yellow), Guarded (blue) and Low (Green). Basically if you are traveling and these notifications are posted then the expectation is that the citizenry will be alert to suspicious activities and notify the authorities accordingly.

TheFundamentals has decided to digress from our introductory essays because we are indeed in a SEVERE situation and it involves all taxpaying citizens, not just travelers. We have slightly modified the system and are now relating it to various governmental entities (Federal, State and Municipal) and their penchant for borrowing money the citizens do not have to spend on activities which are unnecessary. There are several clues to tip off the citizenry of these forms of irresponsibility. Most notable are the use of one or more of the following terms by any elected official or employed bureaucrat - stimulus, jobs, recovery, state and municipal, working for the people (or doing the people’s business), helpful, bailout, troubled asset, bad bank, jobs creation, needed and bipartisan. Any activities so characterized would receive a RED coding meaning stop; do not pass go; do not pass period. On the other hand, some of you may have noticed that the immigrant turned naturalized citizen formerly known as Ahnold has announced a furlough program (Turquoise – after all it’s something) for 200,000 California state employees. Had this been a termination or RIF program it would have immediately been designated as GREEN. But Ahnold, ever conscious of the overwhelming value of each CA state employee has asked them to take off a couple of Fridays each month until the Feds can bailout (DEEP PURPLE RED) that eighth wonder of the world, home of your Speaker of the House, the insolvent, but never apologetic, State of California.

Here is a brief recap of what your Representative, Senators and Presidents have done for/to you with your money in the last 11 months under the guise of saving America, savings jobs (mostly theirs) and avoiding bankruptcy caused by their promiscuity:

DATE PROGRAM* and COST (est.) Color Code


March 2008 Bear Stearns $ 29 billion RED
September 2008 FNMA and FHLMC $200 billion ?? Deep RED
September 2008 AIG $ 85 billion RED
October 2008 TARP - $700 billion RED/Purple
November 2008 Citibank Bailout $300 billion Purple
January 2009 Bank of America $118 billion RED
February 2009 Proposed Stimulus $827 billion PURPLE
* This schedule does not reflect liabilities (real and contingent) committed to by the Federal Reserve Bank and ultimately the responsibility of US taxpayers. These liabilities may be measured in the trillions of dollars!

What does it mean as millions flow into billions into trillions? Remember that famous quote from RCheney in the early Bush II years regarding their new awareness that deficits and borrowing just didn’t matter. As a consequence of that idiocy (and will the full support of the US Congress) they almost doubled the US Debt in just 8 years to close to $11 trillion dollars. One administration and four seated congresses have pissed away enough money to equal what it took the previous 42 presidents and 106 congresses to do over 225 years. Folks, if that ain’t criminal then Bernard Madoff should be the Secretary of the Treasury (which means he gets to sign his name on our worth less currency.)

It is imperative that we contact our two senators (http://www.senate.gov/) and representative (http://www.house.gov/) and insist that they vote against the proposed bailout (economic stimulus) plan. This is a RED alert. Please act immediately. Thank you.

Friday, February 6, 2009

The Leader Speaks; We MUST Follow

“We may not be able to reverse…”

Well, the new president from Illinois is now imitating Chicken Little, cousin of the rooster, Blago. We may never be able to recover unless we spend multi billions of dollars on his and Nancy’s programs. Praise the Lord. What did we ever do to be so blessed with this man’s vision and capability?

So, here’s a simple question for these geniuses. How many times can you reinflate a balloon? When does it get too stretched out or fragile or worn to the point that it can no longer hold air?

Government spending, government debt and employment, government programs, bailouts, subsidies and loans are all at record highs. The balance sheet of the Federal Reserve is levering up fast and the US Treasury is issuing record levels of new debt. As we approach the end of the first decade of the new millennium and enter the 24th decade of our republic, each government effort to reinflate the balloon requires more cash and more debt. Would any of you conduct you own financial affairs in such a manner?

Why are we so intent on not taking the pain of occasional downturns, recessions, higher unemployment and bankruptcies in order to build a healthier base for the future? When and why did our government (really politicians and their hired bureaucratic help) reach the conclusion that we are better off avoiding these downturns with government programs and debt infusions and high falutin’ rhetoric. What gives with these new principles? Where did they come from? Where do they lead us? What happened to frugality and living within ones means?

Why do we avoid economic pain with so much conviction? Individually we face physical pain as either the price for a healthier body or as the price for a medical therapy to restore health. But we don’t want any pain to restore our economic health. Or could it be the clay feet of our leaders? Maybe it’s just them telling us that the world is going to collapse unless we keep pumping up the balloon. Interesting logic. We’re in trouble because credit and leverage were excessive so to avoid the painful correction let’s add some more debt and leverage. Hmmmmm……. Am I really this stupid?

My hypothesis is simple. It is not wealth creators and taxpayers who avoid this pain. It’s government – politicians and bureaucrats. Politicians because they fear for their jobs and paychecks and benefits and silly lifestyle and bureaucrats because they fear for their jobs and paychecks and……

Let’s get back to the fundamentals.

Thursday, February 5, 2009

Fear and Loathing in Obamaland

Cheney says it's just a matter of time (I thought he left town.) GWB says Sadddam will develop and use nuclear weapons against the free world (that was almost eight years ago.) Now its Obama saying the only action between now and catastrophe is the well thought out stimulus package put together oh so carefully by that team of great thinkers - Pelosi, Frank, Schumer and Durbin. Praise the Lord, the cavalry is on the way.

Could this be one of those Hollywood screenplays where the Marx Brothers or the Three Stooges implement a crazy plan for the amusement of all? Help me. I don't remember their plans carrying trillion dollar price tags. Everyone watched and laughed and knew it was dopey.

Yesterday I shared with a friend the concept that we seem to be living out all the lessons of the fairy tales that we as youngsters in the 40's and 50's learned. The Boy who Cried Wolf. The Emperor's New Clothes. Chicken Little. These stories were lessons about the idiocy of the ruling class and other characteristics of human nature.

Here's a simple proposition. Where is John Wayne? If our rulers - Pelosi, Obama and the other Keystone Cops can't take a little heat, can't tell the folk to stay home, save some money, fix the old car, cut out some unneeded purchases, turn off the tv, read the kids a book, talk a walk, visit family and friends and we'll get through this adjustment period just fine; then, perhaps they should accept the nice set of perquisites that they have arranged for themselves - pensions and health care and security details, etc. and head home. It's okay, we'll make it just fine without you. The world will survive. The stock market has already taken a pretty good beating. It'll come back.

Here's a little secret Barney and Chuckie. We're gonna do it anyway. We know it's time to cut back. We know it's time to save some money and pay down some debt. We're on to your little secret. Inflation and growing deficits and money spent on crap are your plan to keep government revenues flowing and keep your silly concept of consumer (read voter) satisfaction alive and well.

So shut down your bureaucracies. They don't work anyway. Save some money like the rest of us. Layoff the hundreds of thousands of government employees or, because you are too terrified to do it the way private business must do it; just furlough them for 30 days and let's see what happens. Give them some of those unemployment payments. Give it a try. You can always say, "I told you so."

Re: John Wayne. Guess what folk? We are the John Wayne's. We're wearing the white hats. Nothing has changed.

Wednesday, February 4, 2009

TheFundamentals

Interesting combination of factors which resulted in a novice politician being elected president and being supported by an almost veto proof congress led by the most liberal long standing representatives and senators in his party. A real problem for him in two or three years. Why you ask? Well, lets look at what happened and why. First, the folk were fed up with Bush and Iraq and deficits and poorly performing government activities; mostly because so much money is wasted and government spending just keeps growing rapidly. Next, the preeminent democratic candidate is not well liked by many in her party. Plus most folk are still fed up with her husband and his oxygen inhaling excesses. So, the republicans are out of favor and the top democrat is out of favor and along comes a kid who is young, glib and runs a better campaign than anyone else. Boom, he’s elected along with even more of the folks in congress and they read the election as an opportunity to spend, spend, spend. Some call it payback. Now, in 2001 we had a similar situation with the roles reversed. Sick of Bill, economy tanking and then boom, the planes hit. So, that president spends a ton of dough on crap, cuts taxes so that the boom can be artificially extended and an overhyped fed chairman supports the whole mess with dirt cheap money. It’s déjà vu all over again in 2008/9 only there are more zeros after the wasteful spending and the social programs are written in California and the northeast corridor rather than Texas and South Carolina. Where does it end? Who knows? Can the democrats spend their way into correction avoidance? Big question. No one will take the medicine and rebuild on a stronger foundation. No one will ask the unions to back off; terminate bloated government bureaucracies; lower business taxes where jobs are created and raise taxes on the overpaid top ten percent. No one grasps that without true wealth creation – extraction, growing, manufacturing there can be no service economy. And we continue to plaster the walls of foreign banks and institutions worldwide with US paper. No fundamental change again; just temporary fixes in an attempt to avoid a complete collapse of the so called service economy.

Time to think about TheFundamentals.