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


Friday, January 29, 2010

Obama theory; blame someone else

“The moment a person forms a theory, his imagination sees in every object only the traits which favor that theory.” Thomas Jefferson

As we have commented previously, we are witnessing a rare person in a high elected office who not only blames his predecessor for “what he inherited” but also for anything that happens on his watch for which he seeks to avoid responsibility. How does one measure the performance of a leader who describes his efforts as valiant and all others as weak? Out of touch? Or does it indicate something a bit deeper and a bit more problematic? Someone who sees only that which favors his “theory?”

Here are the lessons we took away from Wednesday’s very disappointing assessment of the state of the union.

1. The man is still campaigning. Still viewing the world as an academic exercise in which his philosophies and programs and ideals are not getting a fair opportunity to take hold so that America can truly be the changed and improved place he envisions. He adheres to policies and beliefs that have failed elsewhere; that are “feel good” and wishful and he is committed to them in the face of growing opposition from within and without his country.

2. The reason for the opportunity being denied is always a combination of outside forces – the party out of power will not vote for his agenda so they are obstructionists. All they know how to do is say no. The previous administration created so many problems that all the new guys can do is work around the messes. The party out of power distorts the new message and creates fear among the voters which leads to untimely political losses. These are all examples of what is call “victimhood.” There are many people in this country of opportunity who feel they are denied opportunity and benefits because of others. They are victims.

3. Victimhood is a learned philosophy. It is embraced vigorously in the community organizing community. Someone else is the source of our problems. Someone else is keeping me/us down. It’s not my fault that I have no education; that I can’t get a job; that my buddies are in jail; that I can’t afford health care; that I can’t support my children and that they are not doing well at good schools. I am a victim.

4. There is one more aspect to the leaned philosophy of victimhood. Someone owes me something. I have a right to my piece of the pie. Prosperity is my birthright. Gimme; gimme; gimme. See those other guys. They know how to work the system. They get something for nothing. Now it’s my turn. Many of you will recognize a key source of this philosophy. It is the city of Chicago and the state of Illinois.

So where do we go now? The year 2009 is gone; lost; wasted. It looks as if the same will be true of 2010. Record deficits. Not my fault. Record debt growth. Not my fault. Closer to the abyss. What are you talking about? We saved the country from the abyss.

On the other hand, America is awakening to this failed philosophy and its philosopher. It appears that about 54 or 55% of the voters are now aware that we must change course. Deficits must become surpluses. Debt must be repaid. It will take sacrifice and frugality. Opportunity does require some work; some responsibility. Victimhood requires neither. November 2, 2010. 

Wednesday, January 27, 2010

In the Know

The people of the United States know that the state of the union is not good.  We also know that the financial state of the union is bad.  The question on our minds is, "Can this current group in Washington muster the courage to start real corrective action?"  "Do they know what we know?"  A political speech is not required tonight.  An action plan is.

The United States is a large going concern; taking in lots of revenues and spending those funds on activities that are permitted under its organization papers; it’s by laws: The Constitution. It has to report to We the People who created it and gave it these powers about how it is doing. In two ways it is required to report to us: Article I, Section 9 says, “No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time” and Article II, Section 3 says, “He (president) shall from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient.”

The president said that he would do everything in the open, transparent was his word, and he would make sure government spent our money wisely. He would go over every line of every activity and cut out the waste. So, we have the right to expect a good accounting tonight. Here are the categories and some of the specific statistics that we are anticipating:

1. What are the total revenues that the United States will receive in the current fiscal year ending September 30, 2010 and compare that amount with the actual amount for the year ending September 30, 2009? Please provide an analysis of major changes between the two periods.

2. What are the total expenditures that the United States will make in the current fiscal year ending September 30, 2010 and compare that amount with the actual amount for the year ending September 30, 2009? Please provide an analysis of major changes between the two periods emphasizing reductions.

3. There was a huge deficit in the previous year.  Explain specifically the steps that you will take to reduce that deficit in the current year. Be very specific about expenditure cuts, personnel cuts, program cuts and agency/department cuts. A simple power point presentation of the reductions will suffice; something in writing so we can follow progress.  Task forces and bipartisan committees are not required.  It's your job.  Just do it.

4. Will those cuts reduce the deficit to zero by September 30, 2010? If not, why not? When will the deficit be reduced to zero? If you are unable to reduce the deficit to zero within the next 18 months, please just say so.

5. What is the debt level of the United States today? Please include known commitments that will be included in the debt level of the United States within the next five years for which there is no current revenues set aside.

6. What will the debt level of the United States be at the end of the current fiscal year, September 30, 2010? Please include all known commitments as defined above.

7. How much of the debt will you repay, not refinance, repay within the next 18 months? If you are not going to net repay any of the debt in that time period, please just say so.

That’s all we need to hear from you. Forget about the jobs you are going to create and all the other wonderful things you think you can do with other people’s money. The people are fed up with these unfounded claims. Every year the same problems you claim you are going to fix are still around; every year you want more spending to fix the problems that never get fixed; every year you accumulate more debt in the process. Every year you spend more money on yourself, the congress and the endless agencies, departments and employees you hire to fix the problems and issues that never go away. This year, We the People are demanding a new accounting. A new report. One based on specifics. One we can measure what you are doing so we can decide if you and your administration are doing our business or your business. Our business is to reduce spending and start paying down the debt. Make it simple. Make it specific. We will know what to do with the information.

Monday, January 25, 2010

"Government does not create jobs."

The title of today’s posting is bookmarked with quotation marks because someone said it last week in front of all the mayors of the country who had gathered in the national capital. It was not TheFundamentals and, no, it was not the head of the US Chamber of Commerce. It was not even our hero, Steve Wynn. It was someone very close to BHObama. Very close indeed. His mentor. His boss. His hero. The one and only….

….Richard M. Daley, Mayor of Chicago.

Now why is this obvious statement (read it all at: http://www.chicagobreakingnews.com/2010/01/in-dc-daley-makes-plea-for-unusual-jobs-bill.html ) by a man who has turned his city and the city’s public assets over to every union demand – both private and public, worthy of an essay? This mayor has caved to every union claim for self aggrandizement and has even reverted to the sale of public assets to meet their greed. Why would Daley make this statement in close proximity to the white house and contradict his young ‘un at this time?  The young 'un keeps saying government is going to create jobs.

Could Daley be in big trouble? Could his city be in big trouble?

There are no jobs for the urban youth in Chicago. His school system is and has been a disaster. The former head of this system is now running the nations unneeded department of education. His plan to fix everything? Guess? More money. Back in Chicago, the big conventions and conferences and meetings that used to love to come to Chicago so the spouses could wander the Magnificent Mile while the men downed big fat juicy steaks and large martinis at some of the best big juicy steak and martini restaurants in the world are now going to places like Orlando and Las Vegas. Why? Costs in Chicago imposed by outlandish union rules and wage rates and spectacular benefit/pension programs.

So, Daley goes to Washington, the nation’s capital, and says give business a tax break. Tax breaks for business will create jobs.

There is no greater canary in the coal mine than a bloated mayor from a bloated union town screeching for fresh air in the form of tax breaks for employers so he can get some jobs for his constituents. Something is big-time wrong in some cities and states of this land. Chicago is a union town. Illinois is a union state. In 2009, union workers were 17.5% of all workers compared with 12.3% nationwide. Illinois has had union membership above the nationwide numbers for all 20 years that the statistics have been provided. It’s even worse (or better if you are a union organizer) in Michigan. There, 18.8% of all workers belong to a union. In Ohio, its 14.2%. California 17.2%. New York leads all states – 25.2%. Remember, the nationwide union membership percent is 12.3%. Source: http://www.bls.gov/ . All these states have very high unemployment rates.

If you were to ask the employers in these states what would help them increase their employment, what do you think they would say? More government? More government spending plans and jobs plans and stimulus payments? Would they ask for tax breaks? Would they ask for more unions? Would they ask for lower unemployment insurance rates and workmen’s compensation costs? Would they ask for the simple ability to hire and fire without fear of litigation and union harassment? Would they ask to be able to run their businesses without constant interference from state and local and national bureaucracies and their endless fees and costs and rules and threats?

Mr. Daley, there is a lot more to the evaporation of employers in your town and state than a few tax breaks will solve. Why not go home and start using your local power to make a more favorable climate for employers in your town and your state? Not sure what to do? Here are the union membership percentages for some states you could learn from: Tennessee and Texas – 5.1%; North Carolina - 3.1%; South Carolina - 4.5%. Too far to travel you say, then how about Kentucky – 8.6% or Kansas – 6.2%.

Or, is it just a lot easier to whine and complain and go running to Washington DC?

Friday, January 22, 2010

Performance Measurement - BHObama II

America  is quite capable of phenomenal performance.  The new man leading this country is struggling with many fundamentals because of his very limited experience and he is also proving to have very limited listening skills.  In his bubble, he thinks he's done quite well.   So, TheFundamentals decided to take a look at some specific categories of performance. We recollect that as youngsters we were graded on specifics and then the teacher gave us an overall comment. So, let’s look at the specifics calling into mind some of Obama’s very own comments and criticisms of his predecessor:

• Standing/Influence in the World. Spectacularly low and dropping.

• Unemployment Rate. Much higher; not improving.

• Real unemployment rate. Depression levels. Please don’t tell anyone.

• Employment possibilities. Almost nil.

• National Debt. Rising at a record rate, geometrically.

• Influence/respect among major competitive nations. Flagrantly rude.

• Success in military adventures. Minimal. What’s worse? Inability to accept reality.

• Deficit spending. Each month sets a new record.

• Value of currency. Record low. Value of gold. Record high.

• Outlook for manufacturing jobs. Are you kidding?

• Effect of stimulus and earmark spending programs. None except for debt burden on American youth.

• Influence of Special Interest Groups such as unions and lawyers. All time high.

• Minority unemployment. Unbelievably high.

• Home foreclosures. All time high.

• Investor interest in US mortgage securities. Nonexistent.

• Federal Government employment. All time high.

• Federal Reserve Bank failure to accomplish stated objectives. 100%.

• Federal Government salaries. All time high.

• Proposals to rein in lawyers, unions, taxes and bureaucracies. Absolutely none.

• Bankruptcies. Almost all time high.

• Support to states to avoid bankruptcy. Endless.

• Plans to reduce Federal Deficit. Nonexistent.

• Efforts to repay Federal Debt. Not even under consideration.

• Number of people impressed with the leadership of America in US of A. A few hardcore Democrats; rapidly diminishing.

• Cost of deals cut with Obama’s own party members to buy their vote. Billions of dollars.

• Justice Department indictments of corrupt elected officials involved in vote buying. Nonexistent.

• Number of people impressed with the leadership of America in World. A few hardcore Democrats; rapidly diminishing.

• Federal Reserve printing of currency without economic activity. At least $1 trillion in one year.

• Plans to reduce Federal Employment. Not under consideration.

• Plans to cut government spending. See above.

• Anyone in the American mainstream media courageous enough to suggest this man is on the wrong path. Zero.

• Support for sacrifice and frugality. Huh?

• Number of elected officials proposing sacrifice and frugality. Double huh.

In less than one week this man will speak to the nation about the condition of the country.  The United States is simply in debt up to its ears and old fashioned plans and schemes to spend our way out of this situation are akin to a drunk saying that tomorrows booze will make everything better.  Mr. Obama, it is time to enter rehab.  Rehab is a bit of sacrifice to produce a better tomorrow.  Rehab is an opportunity to learn about yourself and get feedback from others.  Rehab will lead to frugality.  Frugality is simply spending for needs; setting aside savings for a rainy day; repaying debt and carefully budgeting and spending for wants.  We want you to do well Mr. Obama.  This is intervention knocking.  Do you hear us?

Wednesday, January 20, 2010

We the People say, "Enough"

There is one simple way to put America back on a secure base of fundamentals and positive values. There is one sure way to communicate to every hard working, taxpaying American that this country is going to be a place of opportunity for every citizen who will go to school, complete their education, work hard, obey the law and not expect any form of special treatment, be it legal protection or job protection or high government pension payments and other benefits. What is that way you ask?

Start repaying the debt of the United States.

TheFundamentals has proposed a simple plan for the national government to accomplish this objective.

Reduce “entitlement” payments by 5%

Reduce all federal employment by 10%

Reduce all other federal spending by 15%

Start repaying the federal debt. First objective: 5% reduction in 18 months

Why is it important to start repaying the federal debt? There is no single action that the United States can take to demonstrate its commitment to fiscal responsibility and financial soundness that would have anywhere near the impact to the hard working, taxpaying citizens of this country and our trading partners and economic competitors around the world than the signal that the debt of the United States is not going to keep rising. It is going to decline.

Why is it important to start repaying the federal debt? It can only be accomplished by a total shared program of sacrifice and frugality. It cannot be done by a few reductions here and there. It requires that we the people say we have had enough of massive spending; had enough of massive government employment; had enough of massive rules and regulations and involvement in everyday life’s activities and had enough of special groups getting special benefits and special favors and ridiculous paychecks and benefits and pensions.

Why is it important to start repaying the federal debt? There are limits to what any person, any community, any country can do. We cannot dominate the world with our checkbook. We cannot cure every ill, remove every despot, fix everyone’s broken infrastructure or save every group of embattled people anywhere around the globe. What we can do is set an example of hard work and sacrifice and frugality. We can set that example as has been done by this country through its fairness, its charity and its competitiveness.

How tough will it be? Fair question. To some it is scary. How can we reduce social security payments by 5%? How can we reduce federal employment by 200,000 jobs? How can we eliminate defined benefit pension programs and replace them with defined contribution programs? How can we reduce non employment spending by 15%? Well, these changes, these reductions are exactly what have occurred in the private sector over the last 30 months. And, they can happen in the public sector also. The United States needs to take its medicine. We have lived for way too long on the credit card; on other people’s money. We need to retrench for 18 months and accomplish these attainable objectives.

Why is it important to start repaying the federal debt? Too many states in this country have grown accustomed to feeding at the federal teat. The states must stand on their own financially. Their cities must stand on their own financially. Some states and cities have limited their addiction to the federal teat. To them the adjustment will be minimal. To the others the adjustment is way overdue. It is tearing the fiber, the values, the foundations of this country apart to see special deals for bribes, corruption and vote buying from very weak public officials. In the past this activity would be prosecuted. Today it is business as usual. Yesterday, the people of one state said, “Enough.” Tomorrow the people of many states will say, “Enough.” The problem is that the politicians, bureaucrats and special interests are very weak and bloated and will do their best to make some small moves to placate the people and then will slip back into their promiscuous ways. The best immediate discipline We the People have is to force them to repay the debt. Then we have to find new public officials who will adopt, embrace, support and live by TheFundamentals.

Last. Isn’t it wonderful to be an American? How can one not be proud of the people of Massachusetts? They led us in fighting tyranny and government oppression 234 year ago and they just fired the second shot heard 'round the world.

"By the rude bridge that arched the flood,
Their flag to April's breeze unfurled;
Here once the embattled farmers stood,
And fired the shot heard 'round the world."
RWEmerson

Monday, January 18, 2010

Good Reporting from CBS

CBS has a remarkable reporter who can be counted on to go after the fiscal promiscuity of our politicians and bureaucrats.  Here is an excellent example of Sharyl Attkisson's good work:

http://www.youtube.com/watch?v=pO4XQLvss5Q

In addition to speaker Pelosi, who managed this expensive junket, and leader Steny Hoyer and Tax Avoider, 'er, we mean, tax chairman Charles Rangel, Nancy's chosen few include:  Democrats: Waxman, Miller, Markey, Gordon, Levin, Blumenauer, DeGette, Inslee, Ryan, Butterfield, Cleaver, Giffords, and Republicans: Barton, Upton, Moore Capito, Sullivan, Blackburn and Sensenbrenner.

Please remember these names.  They come from all over America.  It may be appropriate for you in their districts to consider working to make sure that each of these congress people has the opportunity come November of this year to use their talents in a different vocation.
In all, the taxpayers paid for a total of 36 representatives and 36 senators to attend this nonsense on your dime.  That, of course, does not count the vast dollar and carbon expenditures generated by your great community leader and his cast of hundreds that must accompany him wherever the whims and winds blow.

Last, if you have 2 or 3 minutes and want to have some fun, take a look at this CNN commentary picking up on the CBS report and capturing the essence of madame speaker --  "She’s a horrible woman."  Go to: http://www.youtube.com/watch?v=A6_xgKWzhRw&feature=player_embedded

Just think how quickly we could get America back to fiscal sanity (sacrifice and frugality) if we saw and heard more of this reporting and commentary on all the stations regularly.

Thursday, January 14, 2010

America's Hugo Chavez

All talk. All for the people. Don’t look at the numbers. Don’t look at the results.

Record government spending. What is there to show for it? Record government employment and record government deficits. Record average government salaries. Record congressional paychecks. Record levels of congressional staff levels and overhead costs. Record congressional pensions (watch the hard working servants scramble for the exits and their pension checks.) Record US debt levels.

Forced public ownership of major private and semi private businesses. Forced public ownership of banks that were deemed too big to fail and now are bigger than ever. Forced public ownership of two of the three major domestic automobile manufacturers with even more public moneys being forced into their declining activities. Forced ownership of the major residential lending entities in the United States with no disclosure about the real value of their “asset” holdings. Blank checks to operations that should be bankrupt with any salvageable portions professionally managed.

Record high US population and workforce with growing unemployment and growing failure to offer any form of employment opportunities to the undereducated and the lower socio-economic participants. Large numbers of citizens simply dropping out of the workforce. Where is the reconciliation between the government supporting high federal, state and municipal employment numbers, record high government wages and not providing any assistance to business in the form of reduced taxes, reduced unemployment insurance cost, reduced workmen’s compensation cost and reduced health insurance costs? Instead the chatter suggests new taxes, new fees all camouflaged in anti business rhetoric.

No responsibility or accountability applied to any government agency, any government agency head, any government agency supervisor or employee. What happens when the job is not done at all or not done properly? Why is there never a termination when there is obvious failure; never a demotion; never a reduction in force? Instead we hear, “Systemic failure.” What the dickens is a “systemic failure?” This government is all about employing people – tens, hundreds of thousands of them. It’s not systemic, folks. It’s people. It’s bad management; bad purposes; bad follow-up; bad supervision and no accountability. It’s Venezuela!

When people who never faced being terminated for any reason or no reason (TheFundamentals definition of “real life experience’) run the largest entity in history, the government of the United States, does it surprise anyone that they will not cut back on employment, will not hold managers and supervisors and employees responsible for measurable results and will not apply routine cost cutting processes and efficiency and productivity improvement steps to their activities? Is there anyone on the face of the earth living outside of the Washington DC Beltway who doesn’t know that this government does little more than employ the unemployable? Why should anyone go to work where they might get fired; might have to save some of their earnings for retirement; might have to actually show up when it snows? Can’t we all work for the government? Then no one would work for those nasty private, profit making companies. You know, the ones that discriminate and abuse and don’t pay living wages. You know the ones which pay the taxes that are used to pay the government employees.

Ten short months from now, on November 2, 2010, it would be better to not vote than to vote for any representative, senator or state and municipal official who will not demand, support, introduce and vote for an immediate 5% cut in all government “entitlement” payments; an immediate 10% across the board cut in all government employment; an immediate 15% across the board cut in all other government expenditures and an immediate commencement of a 5% debt repayment program. It’s a simple concept: 5 + 10 + 15 = 5% reduction in debt. Let’s rebuild a strong America with a declining national debt.

The United States simply cannot survive eight years of Bush’s fiscal promiscuity and sophomoric leadership followed by four years of an American Chavez.

Tuesday, January 12, 2010

Harry and history (or Wishful Thinking)

"This is a good man who has always been on the right side of history.”

Well that is a pretty strong statement – always been on the right side of history. We know what always means. Right side probably means not the wrong side. Or it might mean right side rather than left side. Maybe the good side or the bad side. The upside or the downside. How many other sides are there?

How many people can you think of who have always been on the right side of history?

Let’s take a look at some other sides of history that Harry finds himself on.

How about the deficit side. Well, Harry has been a leader of the Senate since 2001 when he became majority whip. He went on to be minority leader and then majority leader which is the position he has held for the last three years. So, how has Harry been on deficits? And on debt? And on debt repayment? Here are the numbers:

                                           Deficits                                Debt                                  Net Debt Repayment

                                                     (In Billions – rounded)

2001                                $ 128 surplus                         $5,943                                       B

2002                                  (158)                                    6,406                                       I

2003                                  (378)                                    6,998                                       G

2004                                  (413)                                    7,596

2005                                  (318)                                    8,170                                        F

2006                                  (248)                                    8,680                                        A

2007                                  (161)                                    9,229                                        T

2008                                  (459)                                  10,700

2009                               (1,841) est                             12,311                                        0

Source: http://www.whitehouse.gov/omb/budget/Historicals/  and

http://www.treasurydirect.gov/NP/BPDLogin?application=np

The state senator from Illinois cum US senator from Illinois cum president says that this record is the “right side of history.” We doubt it. Bush and his cronies were tossed out after eight years of fiscal promiscuity. Obama and Harry and their cronies are doubling, even tripling the level of damage done by Bush. This is not the “right side of history.” History has taught us a few lasting lessons. Here are two:

Deficits = Debt = Destruction and basic fiscal discipline requires frugality and sacrifice.

Those are proven history yardsticks. Harry, don’t expect high marks. Your final report card will be issued soon by a less forgiving electorate, unless you decide to retire first.

Thursday, January 7, 2010

This Government is Lying, Part II

Let’s look at an even bigger issue than the blank check financing of FNMA and FHLMC. This one may well be the triggering event in the collapse of the house of cards.

We, at TheFundamentals have previously written about what is contained in the Constitution about maintaining the credit of the United States and repaying debt (please see: TheFundamentals, December7, 2009 or just read the Constitution: Article I, Section 8.) The Constitution also requires the congress to report on the financial condition of the country (Article I, Section 9.) These requirements seemingly are just ignored. Does this matter? Well, let’s say a public company had to refinance a very large portion of its debt and its cash flow analysis suggested that it was also facing a huge requirement for additional financing. Let’s say that this company failed to disclose this information in a readily available and understood fashion. Let’s say they only revealed these facts in difficult to find websites and press releases and other arcane disclosures. Would this be deemed concealment or failure to disclose? What if it’s not a company but, instead, the largest borrower in the history of the world? What if it’s a country that depends upon foreign and domestic lenders to finance its endless bureaucracies, failed state and municipal governments, politicians and military adventures? Where can one go to find out just exactly how much cash money the US of A needs in the next 12 months? Where is this disclosure being made? Treasury Department? Federal Reserve? Congressional Budget Office? White House? ACORN? SEIU? AFSCME? Where or where, Barry and Timmy and borrowing Ben, do you let us know?

Well, TheFundamentals estimates that the United States will need to refinance about $1.5 trillion to $2.0 trillion in the next 12 months. This is maturing debt that must be replaced with new debt. We also estimate that the United States will need to borrow an additional $1.0 trillion to $1.5 trillion in the next 12 months. Combined, a cool $2.5 to $3.5 trillion. Eye popping numbers. But Barry would rather talk about dopey Muslim kids flying around with no passports and no baggage and a load in their underpants. (Aside: Barry, how about we just don’t let people into the US if they come from countries that don’t tolerate other religions, huh?) Here is a simple question that the boy president or the senate or the house might like to answer. Just how much will you borrow new and refinance in 2010? And just how much will you simply print instead of borrowing (borrowing Ben and little Timmy are quite good at running the presses)? And just how much do you think you can borrow/print/ refinance before the house of cards collapses? Why doesn’t the boy president (el presidente NiƱo for our Spanish speaking readers) talk with us about this huge financial issue which is a much greater threat to the homeland than Muslim kids? Could it have anything to do with the added benefits to bureaucrats of scaring Americans versus running a prudent financial government?

The Treasury issues a calendar projecting the dates of its auctions of treasury securities. Here is the link to that site: http://www.treas.gov/offices/domestic-finance/debt-management/auctions/auctions.pdf   The calendar goes out to early May 2010. There is one key factor missing from the calendar. Amounts. Is it possible they don’t even know how much they will need just a few months out? No businessman who wanted to keep his business would not know this information. Or do they just wait to measure what the market will bear? Great disclosure, eh? There is critical financing information that the public should be receiving from the boy president and the boy treasury secretary; such as:

• Maturing US debt that is being refinanced. Refinanced means selling new securities and using the proceeds to pay off the maturing securities. Barry, somebody’s gotta know what’s maturing. If you don’t know, ask little Timmy. If little Timmy doesn’t know, ask the Chinese.

• Rates being paid for new funds versus rates of maturing funds and the resulting interest dollar cost. A lot of the debt of the US is very short term and as long as they can refinance it at low short rates the interest cost will be controlled, somewhat. Don’t kid yourself. Ben is keeping those rates low to help the folk in Washington DC. Alan did the same thing in the early 90's and we know that predictable outcome.  Watch out when rates rise. It may well be a good time to extend maturities but that will also increase short term costs and this government seems to be interested only in the short term.

• New debt being sold to finance deficits and military adventures and washed up west coast bodybuilders. $1.4 trillion last year. In 2010? C’mon Barry, take a guess. One trillion? One and a half? Huh?

• And last, money just being printed. Let’s see a month by month comparison of money being printed to buy treasury securities, 2010 v. 2009 v. 2008. Would be informative. How much more “banana republic” promiscuity is in the works for the New Year, el presidente Nino?

This country now owes over $12 trillion to almost everyone on the face of the earth. Add in FNMA and FHLMC for another $4 or 5 trillion.  Disgusting. How much do you need in 2010? Enquiring minds would like to know. The Constitution requires it!  You took an oath to, "...preserve, protect and defend the Constitution of the United States."  What do you call a person who disregards a sworn oath?

Tuesday, January 5, 2010

Blame it on Bush

Confidential Memo – Insiders Only. Do not share! Rahm says that we can stretch this “we inherited it” strategy for at least six more months; probably much longer with mainstream media. They are clueless. Always refer to most recent update before speaking with press. Ask Rahm if you are unclear about any point. Here they are. Things we inherited:

1. War in Iraq - winding it down. We fixed it

2. War in Afghanistan - winding it down. Not going to spend a lot of time on it. Military’s in charge

3. War on Terror – we don’t call it that. We prefer to make nice-nice with our Muslim friends

4. Billion plus peace loving Muslims who don’t like us but we’re going to fix that (see above)

5. Europeans who don’t like us. But they love me and that’s what matters

6. Asians who don’t like us; working on it. Improving trade relations

7. Russians who don’t like us; cancelled the missile shield

8. Who does like us? Time magazine, MSNBC and PBS do. Remember, everybody likes me

9. Dollar worth little compared to almost any other currency. Don’t worry; we’re printing more

10. Two local hemispheric leaders who make fun of our great leaders. We’ve got a nice-nice program for them too

11. Detention camp at Guantanamo Bay, Cuba. The people of Illinois want them. More good union jobs. Trust the justice system

12. 7% unemployment. We know how to fix that (see #18 below)

13. Iranian scientists who think they can build a bomb but we are going to talk them out of it. They wouldn’t dare. Gotta get Israel on board

14. Millions of our voters without health care insurance; we cut the coverage seniors paid for and gave it to our voters; real progress; took a hundred years to get this done

15. Sleepy Airport Security. Don’t worry we’re raising their pay. Gonna examine your privates; take some pictures; soon everyone will want to work for TSA

16. No manufacturing jobs. We will create green jobs. Green jobs for Detroit. Rebuild Detroit

17. TARP. What’s TARP? Oh, some money left over. Send it to the California public unions.

18. Stimulus program. Wait a minute; we may have proposed that one. Big deal. It was only $780 billion but it solved the employment problem (see #12 above.) Remember – everything we do solves a Bush problem

19. Deficits past. Obviously not our fault

20. Deficits current. Not our fault. We inherited it

21. Deficits future. Not our fault. Nothing is our fault when it comes to deficits

22. Debt. Never bring up debt. If they bring it up blame Bush. This is the big one. Downplay it at all times. Always under control. We’re watching it. We inherited it. Ben and Timmy are on top of it

23. Dope running the Federal Reserve Bank. Hey, no one else wants the job. Plus he likes to print/print/print. Never realized you could just print money and hand it out. We couldn’t do that in Chicago. Zero interest rates. We borrow for nothing. This is great; just borrow/borrow/borrow at zero interest rates. This job is not that hard

24. Really scary person running the USTreasury Department. We hired a kid; fast learner

25. Melting icebergs. Record warm winters. Should have listened to Al. He’s our hero. Wait a minute. Better to downplay Al and give me credit. We got a plan. Raise the cost, call it something exotic

26. Really screwed up mortgage lending activities at federal agencies but we have given them a blank check so they will fix everything sometime soon. Don’t talk about this one; avoid it if possible; deflect to other topics

27. Really screwed up banks too big to fail. They are getting smaller. (Hey Rahm, the banks are getting smaller, huh?)

28. Walmart. Why does everyone shop at Walmart? We didn’t let ‘em build stores in Chicago. They better watch out. Unions want in big time. We need to keep this one under wraps

29. Totally inexperienced dope running Homeland Security (oops, we may have appointed her; she’s learning on the job.) Example last week of bad show. I had to clean up her mess. That’s a no – no. Always make me look good

30. Financial system failure; we saved it; everything is ok now

31. Two crappy domestic automobile firms – GM and Chrysler but they are about to introduce a battery car that will cost twice what the Japan battery car costs and go at least 40 miles on a charge. Such a deal. Rebuild Detroit

32. Busted large states that consistently vote for just Democrats like Michigan, Illinois, California and New York but it’s not THEIR fault. We now own them and they are on the mend. More votes in November

33. Unions with their sticky fingers always held out for another handout. They like us. Union jobs are good jobs

34. 22 million people working for governments across the land. Good jobs. We saved all of them. Raised their pay. We pay them a lot more than anyone else earns and we give them really cool benefits and really fat retirement programs. They like us. They will vote for us

Summary: Bush made a mess. We’ve pretty much got it cleaned up. Stock market is roaring. We’re a shoo in this November. We inherited the mess. It’s almost fixed. Everybody is feeling much better about things. Remember. Always make me look good. That’s the key to this strategy. Bush bad; me good.

Friday, January 1, 2010

New Year's Resolution

TheFundamentals would like to share its seven 2010 resolutions with you. We hope you will consider adopting and supporting some, if not all, of these resolutions. We will address these topics during our 2010 essay postings. We would like to express our appreciation to all who have commented, contributed, criticized and lauded our efforts in 2009. We appreciate this support. Thank you.

We hereby resolve to do the following in the New Year – 2010:

1. Be charitable to our neighbors who are in need and seek out opportunities to help them

2. Speak out on the fundamentals of good citizenship and personal and communal frugality and sacrifice

3. Support economic freedom for all Americans in the form of right to work laws; limits on taxation, rules and bureaucratic involvement in commerce; limits on lawyers and litigation opportunities for lawyers in commerce; reduction in government spending (15% per year for the next two years) and government employment (15% immediate; 10% more in 12 months) at all levels

4. Reduce America’s foreign involvements and encourage mutually beneficial policies of strategic partnerships

5. Promote education and learning opportunities regarding business economics, competition and wealth creation and encourage their adoption in government, education and health care reform

6. Support the following legislation and, where required, amendments to the US Constitution:

• Term Limits for Representatives and Senators
• Annual Balanced Budget and Mandatory Accounting/Disclosure Rules
• Curtailment of Federal Funds Flowing to States
• Loser pays and Limits on non economic damages in all federal litigation
• States and Personal Rights Enumerated including all education, health and welfare matters
• Debt Limits and Mandatory Repayment Rules
• Prohibition of Intra Federal Government Financing Transactions
• Repeal the Sixteenth Amendment
• Basic Privacy Rights of law abiding citizens over their financial, tax, health, image, DNA and credit records
• Restrictions on Special Interest Groups and Campaign Activities

7. Only support candidates for local, state and federal office who will introduce, vote for and work with other elected office holders to expedite the adoption of the above legislation and constitutional amendments. Remember the states must ratify US Constitution amendments and the more states that become wards (MI, IL, NY, MA, CA, etc.) of the federal government the more unlikely that such approval will occur