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Alternate Histories by Thomas F. Berner

The standard history of the Great Depression holds that Herbert Hoover deepened the Depression by not doing enough, that Franklin Roosevelt’s spending improved the situation but that his attempt to balance the budget in 1937 sent unemployment back up to nearly the level of 1932. Then came World War II when all restraints were off and with the end of the war came untrammeled economic progress, with management and labor walking hand in hand under the rainbow of a benign government. Then, depending on how old your history professor is, along came Richard Nixon or Ronald Reagan or George W. Bush, who ruined everything. All that is necessary for the triumph of the Little Man is unrestrained Keynesianism with all dissenters locked away somewhere.

But there is a different way of looking at the story. That it is more realistic than the standard Keynesian myth is irrelevant for the millions of people – bureaucrats, lawyers and the rest of society’s snake oil salesmen – whose livelihood depends on this myth.

Even with the large deficits the Federal government was running, the net debt in the economy – individual, corporate, local, state and federal government – dropped steadily throughout the thirties, freeing up private and local government balance sheets to allow them to borrow more and reinvest. The importance of “deleveraging” is nothing new. Hoover’s first Secretary of the Treasury, Andrew Mellon, famously argued that the solution to the Great Depression was to “liquidate capital, liquidate industry, liquidate the farmers.”

The result, of course, was that Mellon himself was liquidated and policies were put in place to prop up failure. Deleveraging is still considered as a possible solution in every credit crisis, but while it is always proposed it is always ignored. One of the pre-TARP proposals was for the government to buy up bad debt and to liquidate it over time, allowing banks to create new debt without having to deal with the baggage of old debt. The argument for rejecting that idea was that there was no way to price bad debt, but that is downright silly. You just buy at a high enough price not to bankrupt the banks and a low enough price to keep Uncle Sam from losing his shirt. Then you provide a mechanism for the bank to share in recoveries above that amount. The real reason the idea was rejected is that it would have forced those in the executive suites to show just how bad the stewardship of their institutions had been. Heads would have rolled. TARP, like the President’s stimulus bill, was designed to save jobs, not create any.

The recession of 1937 had more to do with the social legislation of the New Deal – high taxes, social security (which was being taxed but not yet paid out), the Wagner Act which empowered labor unions – stifling the private economy. FDR accused capital of “going on strike” but he had induced the strike. Capital doesn’t go on strike unless it is facing an uncertain future. Today we have the same thing: Obamacare and the raft of regulations being churned out of Washington are big scary unquantified liabilities looming over the economy. Why pour your money into a hole in the ground when you have no idea how deep the hole is?

When World War II broke out, there was a sudden demand for goods of all types. But here was the kicker: people were earning money, but rationing prevented them for spending any of it. The post-war boom resulted from four years of pent-up demand, factories with enough resources to move into products which were in demand and the undeniable fact that the industrial capacity of the rest of the world was bombed flat, creating a foreign demand for American goods (and equally important, a lack of competition domestically).

The effect of these three elements wore off by the early 1970’s leaving Presidents Nixon, Reagan and Bush to try to muddle through within the paradigm created by FDR. As America lost its supremacy and then its industry, it fell into a position where the old paradigm no longer works. This week, Fred Barnes of The Weekly Standard called the Obama Administration “reactionary,” but the President is pushing the policies of the academic, political and media establishments. Reactionary they may be, but they think of themselves as progressive.

These reactionaries are encouraged to think of themselves as progressive since there is not yet a coherent body of ideas coalescing around the opposition. The Tea Party knows that something is very wrong, but they are a mass movement of middle class and working class Americans, the same people who in 1860 and 1930 knew something was terribly wrong with the framework of society, but had no intelligible body of ideas to deal with it. Tax cuts are not a complete public policy.

This is nothing new. When a paradigm has become obsolete, there is no full blown platform of ideas to replace it. Abe Lincoln was lucky to have the platform of the Whig Party which had been held up by the Democrats for twenty years, but even he flailed around with many issues. He was, after all, against emancipation before he was for it. FDR was a famous experimenter, borrowing concepts from Herbert Hoover, Benito Mussolini, Adolf Hitler, Teddy Roosevelt, Woodrow Wilson, Francis Everett Townsend, Huey Long and any other crank, tyrant or crackpot who had a vaguely attractive idea to flog.

So where are the new ideas going to come from? Despite the lack of a coherent policy, FDR kept the Government Printing Office busy grinding out new laws and regulations. Abe Lincoln had a legislative program which in its ambition and effect was even greater and more important than that of the New Deal.

But both of those Presidents had advantages we don’t have today. Abraham Lincoln and FDR both had advisors who were practical men of affairs. America had not yet strapped itself into the strait jacket of an academic elite coming from academic ivory towers and a business elite which has more in common with postal workers than entrepreneurs. The media was not yet a morass of unthinking scriveners who all say the same thing, but was a vibrant market of competing opinions.

If we are to climb out of the current dead end we find ourselves in, we have to rethink a great many things. New ideas won’t come from the left. All humans have a tendency to confuse self-interest with public interest, but the elites – those who have reached the top of the ladder of the current economic system – have the power to influence the future, which makes their confusion more dangerous than that of the average person. Since the left constitutes the bulk of the current elite, radical ideas will not be coming from them. This is made worse because the current elite, unlike the agricultural interests which dominated before 1860 and the industrial interests which dominated before 1930, have no vested interest in anything but keeping themselves on top. The cotton grower had to protect the environment in order to keep his fields productive, the industrialist had to build a useful product in order to find a market for his goods. The academic, the media and the day trader don’t have anything riding on the long term.

The left controls most of academia and the media and as both of those august institutions strive to prop up the current economic regime, they inevitably betray the neutrality and quest for the truth which is the reason they exist. These istitutions either have to be reformed or replaced.

It’s time to explore whether there are alternate ways to frame society which will keep the best of what we have, but leave behind those elements which benefit some of us to the detriment of everyone else.

Thomas F. Berner

Where To Cut Defense Spending? Health Care? By Dick Shriver

Whenever the defense budget is under attack to produce major cuts, most people think of eliminating expensive advanced weapons programs such as the B-2 bomber, submarines, or even eliminating thousands of troops.Gary Schmitt and Tom Donnelly, in the August 15 issue of The Weekly Standard, do mention the possibility of saving a “few billion” dollars annually by better management of such programs as the military’s health care plan, TRI-CARE for LIFE, but they greatly underestimate the magnitude of what is possible.

The US Defense Budget of nearly$700 billion in FY2011, which does not include the roughly $35 billion to support the wars in Iraq and Afghanistan, does include $25 billion for the F-35 Strike Fighter Plane, Ballistic Missile Defense and the Virginia Class Submarine, the three largest US weapons programs today.These are juicy targets for desperate budgeteers.

A second priority is to reduce overseas troops and to reduce the number of troops on active duty in each of the services, especially in the largest (in terms of manpower), the US Army.

The trouble is, we may actually need these capabilities, and by the time we find out, it will be too late to recover such massive programs in any reasonable time.That’s not to say that the requirements justifying each of these assets is without fault; these are deservedly contentious areas worthy of discussion.Furthermore, almost all weapons systems experience huge cost overruns, thus diluting the original returns expected.

The administration, in 2009, already cut $400 billion from defense over the ensuing ten years; now it’s looking for another $500 – $600 billion over the next ten years.

It seems to me the administration wants to reduce our war-making capability.There is other low-hanging fruit to be examined, however, as is the case throughout all state, local and federal budgets:entitlements, retirement ages, and even health care.

The TRI-CARE for LIFE program is $50 billion of the US defense budget, about 12%, and applies only to military personnel and families in their peace-time capacity (medical care of wounded soldiers is not in this budget, and is quite small by comparison).It has been demonstrated that with proper incentives for patients and doctors alike, the claims paid by an insurer like TRI-CARE for LIFE could be cut in half, or more.In other words, the key to maintaining our military readiness, might be in encouraging military people, just like all other US citizens, to take better care if themselves. If this was done, and it has been done in test sites around the country, the total cost of medical insurance for the military could decrease from $50 billion to $25 billion, a savings of $25 billion a year, or $250 billion over ten years (to be sure, wellness programs require some time to build up savings, but this does not negate the argument).

Given the choice, I would rather see the relatively disciplined members of our armed services and their families keep themselves in better shape eat better, take their meds, feel better, and see fewer emergency rooms and surgeons, and at the same time, hang onto our F-35 fighter planes.

Let’s Pretend There Is No Debt Ceiling By John Russell Deane

There can be no question of the impact of the United States defaulting on its bond obligations. Devaluation of the dollar! Massive increases in the cost of borrowing for the United States Government and us as well! Failure to cover other obligations are not as dramatic but consequential as well. So why would we default? We do not really need to. Why not just pretend there is no debt limit?

Certainly, we cannot be concerned about the potential that the government will not comply with the law. That happens every day. We should be more concerned about efforts to reduce massive spending which is unsustainable. The Democrats believe that if there are to be cuts in expenditures, there should be equal increases in tax revenues. The Republicans say our problem is not taxing, it is spending. We must stop spending. If we attempt to resolve these conflicting positions before August 2, without the opportunity to reflect on potential resolutions, we will certainly end up with unintended results.

Wouldn’t it make more sense to undertake these important discussions without being under a hard deadline? For example, the call for increased taxes is put forward in political terms. We need to tax the millionaires and billionaires. Everyone, including General Electric, should pay their fair share. The conservatives are taking medicine from seniors to assure tax cuts for the rich. If we are looking for tax reform, lets be comprehensive.

Everyone says that a reform of the tax code would be a herculean task and the Congress is not up to it. My proposal for tax reform does not begin to “tax” the limited intellectual capacity of the Congress. You begin with the premise that the tax code is to raise revenues to fund the necessary functions of government. It is not to accomplish social goals or dole out benefits to “friends.” With these established as givens, the tax code would simply state that there shall be a tax on income. The tax could be a flat tax. It could be a progressive tax similar to the current tax categories. There would then be a comprehensive definition of what constitutes income. For example, if certain costs are incurred in making money, such as raw materials, they would be deducted from “income.” If there is a desire to help one group or another, there could be a direct appropriation. There is no need to complicate the tax code for that purpose. For example, if the Congress wanted to encourage the production of ethanol, they would appropriate funds for ethanol manufacturers. In this way, the American public would be able to watch their Congress give $6 Billion to ethanol manufacturers. Further, since the federal government wants to increase the amount of ethanol in fuel, despite the damage it does to engines and fuel systems, and realizes that selling such fuel requires expensive fuel blenders. The government wants 10,000 pumps across the nation at the cost of $120,000 per pump. Since it would not be hidden in the tax code, it would have to stand the burning attention of the American people. How about farm subsidies? Why are they hidden in the tax code? If they can stand the attention of the public, appropriate the funds directly. How much are we talking about? Billions of dollars, $30 Billion over a decade.

This would be so much better than simply stating that we need to tax the rich. This is partially true because if the rich were taxed at 100%, the deficit gap would still not be closed. This is truly a red herring but seems plausible until one understands that it will not do what it promises. Even eliminating all of the tax benefits will not resolve the deficit. At least, it will deal fairly with taxation and will better justify the program cuts that must be made.

While we are debating unrealistic goals of both sides, the debate does not move forward in a vacuum. As the Obama budget languishes, we need to remember that the debt will double between 2011 and 2021. Clearly, we cannot continue on this course.

The American people know that increasing debt is not good. They also have said that they feel that spending must be reined in. When we get to which programs must be paired, the numbers change. The majority does not want to change Social Security and Medicare. Unfortunately, without change, our fiscal position will continue to crumble.

I tend to agree with those who suggest that we cannot grow our way out of our mess but clearly it is a constructive part of the solution. We can cut our way out but the cuts will be deep and painful. Nonetheless, this also is a step in the right direction. We also know that we cannot tax our way out. We can eliminate unnecessary tax breaks but most tax increases would further erode our potential to grow our way out of the mess. The answer then is a compromise of a number of approaches. First, completely revise the tax code as suggested above. This will likely be a revenue source but not one that is destructive to economic growth. Next, we cut expenditures to substantially reduce the costs of government. Next, we will begin to grow our way out.

The premise of this paper is that this type of approach cannot be undertaken under the pressure of dealing with a national debt limit. It takes a reflective approach and some adult supervision. The question is whether our Congress is capable of either.



The Stupidest Smart People in the World by Thomas F. Berner

During the Battle of Jutland, Admiral Beatty of the Royal Navy, watched as, one after another, England’s newest and biggest battlecruisers, each hit by a single shell from the German fleet, disappeared with a flash and a roar, taking its entire crew to the bottom of the ocean. “Something is wrong with our bloody ships today,” he muttered.

In truth, there had been something wrong with his bloody ships the day they were built – there was an open elevator shaft from each gun turret leading directly down to the powder magazine, practically guaranteeing that a devastating explosion would destroy the ship if a single spark worked its way down the shaft – but it took a day of battle for the flaw to move from the theoretical to the obvious. For historians, it was just one more validation of General Ludendorff’s description of the British military as “lions led by donkeys.”

Today, our economic commodores watch as, one by one, their concepts blow up and drag down the economy down with them. Unfortunately, they lack the wit to reexamine their prejudices and their solution is to just double down on their flawed policies. We are in the midst of a serious battle for economic survival and no one in power has the wit to ask themselves “could I be wrong?” Instead, they just launch ponderous battleship sized “reforms” waiting for the first shell of reality to hit them.

Neither Keynesianism nor monetarism seems to provide the answers for correcting the current state of the economy. Rather than attempting to correct the flaws in their theories or even to provide plausible reasons why those theories have failed, academia chooses to disparage dissenters and speak of the rise in “structural unemployment,” as if unemployment were the fault of some sort of alien influence on the economy which everyone is helpless to confront, rather than the fault of policy.

There is an almost childlike expectation that jobs will magically appear if Congress passes legislation, a sort of Field of Dreams economy: “if you build it, they will come.” When they don’t come, it’s because the legislation wasn’t big enough.

The inability of Washington’s experts to “walk back” their assumptions to figure out what they’re doing wrong is an intellectual flaw, but it has nothing to do with the brain power of the President or his advisors and everything to do with educational system which failed to teach them how to think. Simply put, there is something wrong with our bloody intellectuals today and the flaws have been part of the system for so long that few people in academia have the skills to analyze them.

The record reveals a host of examples proving that our Best and Brightest are neither:

In the late 1990’s, a physicist named Sokol launched a hoax: using the jargon of modern literary theory such as deconstructionism, he submitted a paper to a leading cultural journal, Social Text, in which he asserted that the concept of gravity was merely a fictional construct of society and did not exist. The journal, oblivious to the scam, published the article. This created a few laughs, but it did nothing to alter the way academics taught their subjects. Social Text is still going strong today, published by Duke University.

In early 2009, a leak of thousands of emails written by the world’s leading global warming experts showed them to be conspiring to ruin the lives of scientists and shut down journals who dissented from their sloppy science. To call this McCarthyism is to insult Joe McCarthy, who, for all his flaws and inaccuracies, targeted Communists out to do harm to the Western world. By contrast, the global warming “scientists” sought to destroy better scientists than they were, people whose only flaw was a more honest sense of scientific inquiry. Of course, the only notice The New York Times gave this latter story was to complain about people who opened other people’s mail.

And that’s part of the problem: with the poodle press unwilling to challenge the conventional leftwing wisdom, there is no one able to speak truth to power. Rightwing critics are ignored, so “liberal principles” become an oxymoron and liberal politics become dominated by charlatans and profiteers. But the ideologically driven New York Times and Washington Post are only part of the problem.

As a nation, both left and right, we have put such an emphasis on schooling that we forget that schooling is only one form of acquiring intelligence, and a fairly limited one at that. To quote Mark Twain, “the problem with schooling is that it interferes with your education.” With rare exception, the route to success in a classroom setting is to develop the ability to parrot back to the professor whatever he or she wants to hear. If you do it well enough, you will have a stellar academic record. The problem is that the world requires many different forms of intelligence, not just a good memory.

There is an old redneck insult which shows more wisdom than most output from academia. If one does something really stupid, a redneck will say “you have to be five kinds of stupid to do that.” They, if not the eggheads of the world, know that there is a need for many different kinds of intelligence, including social intelligence, creative intelligence, practical intelligence (aka “common sense”) to name just a few. None of these other forms of intelligence are taught in academia, or even valued very much.

For example, the U.S. Air Force has a concept called Situational Awareness, which is the ability of a person to process different streams of information simultaneously. It is a significant achievement to stay on top of constant bombardments of data, some important, some not. Those pilots who have situational awareness are the ones who remain alive and successful. Those who don’t have it don’t live very long.

Situational awareness is crucial for a soldier in a battlefield, a teacher in a crowded classroom, a trader on a Wall Street trading floor, an entrepreneur running a small business and just about any kind of leader. All of these professions need the ability to observe or absorb new information coming from many different sources, gauge the importance of each item of information, weigh the probable accuracy of contradictory information, combine the information into the best course of action and act, all in the fastest time possible.

So, how does the educational system treat such promising leaders when they are students? Well, children with this sort of intelligence are understimulated in a classroom, so they jitterbug in school, are easily distracted, are often disruptive, so authorities diagnose attention deficit disorder, prescribe Ritalin and turn the leaders of tomorrow into zombies. All because one form of intelligence – in many situations a superior form of intelligence – is different than conventional intelligence.

If the best and the brightest really were the best and the brightest, this might make a sensible tradeoff, but they aren’t. Among their shortcomings are a lack of foresight, a short term focus on long term problems, an inability to “think outside the box” and a pretty poor record of thinking inside the box, too. More and more, America’s intellectual elite have come to resemble the ancien regime, about whom Talleyrand said “they forgot nothing and they learned nothing.”

After fifty years of letting the best and the brightest lead us into Vietnam, the dotcom crash, subprime mortgages and Obamacare, it is time that we scrapped this model of intellect and thought about constructing a less combustible alternative.

Maybe we can then be led by people with intellects at least as good as those of the average World War I general.

Thomas F. Berner

First Socialism, Next Denial of Fundamental Constitutional Rights–What is Next? By John Russell Deane

What constitutes a clear and present danger? Would it be an Administration which moves us ever closer to financial disaster without any apparent plan to avoid it? Would it be an Administration that moves us ever closer to socialism? What about an Administration that proposes to take away fundamental freedoms guaranteed by the United States Constitution? I think all three constitute a clear and present danger.

I had intended to post a paper on another issue today until the Heritage Foundation brought to my attention a scandalous and insidious plan by the Obama Administration. Interestingly, the least transparent Administration in memory has pursued this criminal act in the name of transparency.

The First Amendment to the Constitution guarantees to all Americans the right of free speech. The Administration wants to take it away.

In order to prevent inappropriate influence on the awarding of federal contracts, those companies seeking such contracts are completely barred from making contributions to political parties, candidates for public office or any person for any political purpose. Violations are subject to prosecutions. While direct contributions from corporations to candidates continues to be prohibited, the Supreme Court in Citizens United v FEC, struck down limitations on corporate involvement in independent political broadcasts. President Obama severely criticized the decision, even during his State of the Union while the members of the Supreme Court sat a few feet away. In the House and Senate, the DISCLOSE Act was introduced by Democrat representatives in an effort to save the Union. It was defeated in the Senate. Not surprisingly, the legislation was supported by labor which retained its rights to participate in the political process. It was opposed by the business community.

Even though the Supreme Court and the Congress dealt with the rights of corporations, the Administration is circulating a draft Executive Order which not only seeks to counter the other branches of government, it seeks to go dramatically further. The Executive Order would require not only companies seeking federal contracts to disclose political contributions, even those legal under the law, it would require disclosure from officers and directors of the companies of personal political activity, not associated with the companies. Not only it this intended to intimidate corporations and their officers and directors who might want to engage in the political process, it is a clear violation of their First Amendment rights. Inasmuch as the disclosure must be made by the companies, the companies would have to gather personal information from their directors and officers.

These requirements would not apply to labor unions which negotiate very large contacts with the government and would not apply to those who receive federal grants. One does not need to back too far to remember ACORN which sought to subvert the election process using government funds. What about them? When asked about this draft Executive Order, the White House said it was intended to further transparency in government and would allow the taxpayers to “know where his or her money is going.” What the White House failed to mention is that the “money” being disclosed is not the taxpayer’s money. This is money that has been earned by individuals for services performed. It is their money.

If the government can require that certain people must report their personal participation in the political process to the government to make the federal contract process more transparent, what else might they do? Which of our rights is next?

For students of history, one not need to look too far in the past to remember when people saw proposed changes in the scope of their government and said it did not seem too much of an imposition. When their liberties were reduced a little at a time, they said it probably was good because it would help protect their security. When their fundamental rights were infringed, they began to object but they found it was too late.

Thomas Jefferson said “Constant Vigilance is the Price of Liberty.” We should spend more time listening to him. It would not hurt to be a member of the Heritage Foundation and listen to them as well.



When The Money Stopped Coming ……. By Dick Shriver

Our visit to the former defense plant in western Ukraine was supposed to begin at 10:00, but was delayed until 11:00.It was a gray, cold day in a long series of gray, cold days that we had dubbed a “two sock day”, so cold that if you didn’t have two pairs of socks on, your feet would freeze.It was a meeting during which none of us took off our coats for the same reason. It was February, 1996, about five years after the money from Moscow had stopped coming.

The meeting began with small plates of the traditional salo s’chesnikom and vodka.Salo is the fat from the shank of a pig, basically lard, which had a near- religious significance in Ukraine because salo was one of the main means of sustenance for Ukrainians during WWII.It is edible only when accompanied by garlic (chesnikom) and, especially, vodka.The vodka was poured time and again, un an increasingly demanding tone as the vodka began to take effect.The flow from aperitiv into lunch was seamless.The vodka was supplemented by several bottles of wine in case anyone was interested.

It was like this every day at the plant.The management team met in the morning when they were all reasonably sober, but things fell apart rather quickly thereafter.Nothing constructive was even attempted after lunch.Sooner or later, everyone drifted home, with no visible work being done.It had been like this for much of the time since the USSR had dissolved.Many workers had left, but many still came to the plant.Their monthly stipend had been reduced to a monthly bag of groats and a bottle of cheap wine from Moldova.

Our visit, to determine if we could be helpful to the plant in finding new business, was a failure.We met with more than 1500 plants and other businesses in Ukraine over the seven years from 1995 – 2002, and only found 100 with which we could work, and which would work with us.

The collapse of communism took a toll on men, especially.Women had been placed in the “less important jobs” such as retailing, food and banking.Now that defense plants were basically shut down, the women found themselves in charge of much of what remained of the economy, while men had little to do but drink.Many men died prematurely of alcoholism.The life expectancy of males in Russia (I assume much the same for Ukraine) dropped from 64 in 1990 to 58 by 1995, almost a statistical impossibility.Their useful lives had ended when the Soviet Union collapsed.Most of the older, and more senior managers, had little propensity or desire to learn how to function in a market economy.When the money stopped coming from Moscow, they tried to steal what they could from the system.They cheated their employees. Their employees cheated on expense accounts (whenever we arrived at a train station, there were always men asking for our ticket stubs so they could turn them in for phony expenses). What few orders came to the plant were only accepted after agreeing on the amount of the bribe.

Now we see President Obama is preparing to sell the government’s shares in General Motors for a loss of 11 billion dollars, a loss to the taxpayers, that is.We are spending far beyond our means, and everyone, including Standard & Poor’s, knows it can’t keep up forever.S&P has downgraded the long-term outlook for US credit as “negative”, a step down from “stable”.The main reason given by S&P is its lack of confidence in the government of the United States to work cooperatively toward a solution; in other words, a bet on partisan politics to a fault.

The US Government’s financial leaders, Secretary of the Treasury Timothy Geithner and Chairman of the Federal Reserve, Ben Bernanke, are playing a dangerous game, betting on the recovery of the country when the odds are even , or worse, that there will be no such recovery, only a bad case of inflation, or even hyperinflation.No one knows.The Germans didn’t know either in 1923 when suddenly the conversion rate of the German currency to equal one dollar leapt to 4,200,000,000,000 marks.At one point, prices doubled every two days.How much warning did they, the average citizens, get?

We already know from previous crashes that when there is a collapse in the US market, the collapse is huge.It would make sense for this government to do at least one thing to re-assure Americans that it is aware of the uncertainty and potential instability that exists; instead, every move of substance has been just the opposite, as if their goal was to destroy the American economy wholly and completely … and suddenly.

The more Americans rely on money from the government, mostly in the form of entitlements, the harder we will fall when the money stops coming from Washington.Can’t happen here?Please pass the lard.



Credit Rating of the United States By John Russell Deane

The newspapers this week are replete with headlines about the Standard and Poor’s warning about a possible downgrade in the credit rating of the United States. This has been referred to as a “Wake-Up Call.” Those who see this as a wake-up call must spend a great deal of time under a rock. Our apparent inability to find a way to deal with our debt and deficit could render our fiscal profile “…meaningfully weaker than that of peer “AAA” sovereigns” according to S&P. Certainly, S&P is not alone in seeing this.

Interestingly, the report refers to the United States as a sovereign. Many take sovereignty for granted. Those who do should consider Greece, Ireland and Portugal which are no longer sovereign nations. Their decisions are not made by Greeks, Irish or Portuguese. Their decisions are made by the bankers of the European Community. Could that happen here? While we are headed toward the fate of those countries, there is one important distinction. When their fiscal position became unsustainable and they were about to default on their obligations, the European Community and the International Monetary Fund came to their assistance. They lent billions of dollars to each of the countries to bail them out. When we default, there is no one to bail us out. I guess that we will be different from Greece, Ireland and Portugal. We will continue to be a sovereign, a bankrupt sovereign. Everyone should also understand that we were materially involved in that bailout. We loaned billions to the European Central Bank and we are the largest contributor to the International Monetary Fund. Didn’t know that, did you?

It seems that everyone in Washington knows that we must address our debt and deficit. They simply have fundamental disagreement about how to do it. The Democrats and liberal contingent want to employ undefined spending cuts and tax increases. The Republicans and conservatives have provided a specific road map of cuts that they feel are needed. Some would argue that neither proposal would be sufficient to deal with debt and deficit and that we are simply kicking the can down the road.

Back to the credit rating. While to some the S&P rating warning is a wake-up call, there are many indicators of our dire fiscal situation. Any one of them could result in an international vote of no confidence. The result of such determinations include significant increases in the interest rate on the money we borrow, all $14.3 Trillion. The dollar would no longer be the “safe haven” for international investment. The dollar’s value could fall more dramatically that when the Federal Reserve monetizes the debt.These events would be sufficient to return our economy to the toilet. This is the beginning of another downward spiral. The impact will be felt at all levels of society.

Those in Washington would prefer that you not be involved in dealing with these issues. Here, however, the business of the People necessitates the active understanding and involvement of the People.



Ryan’s Budget: Defense Should Be On The Table By John Russell Deane

As we have discussed in earlier papers, Congressman Paul Ryan exercised significant courage in proposing a Budget dramatic in its contrast to the Budget proposed by the Obama Administration. The Proposal is the first real attempt to deal with our massive $14.3 debt level and our $1.4 Billion budget deficit. No attempts at dealing realistically with our debt and budget deficit will come without controversy and significant pain. The Ryan proposal deals with a number of budget items. Nonetheless, there are many areas which could be addressed in the Budget which have been left out. First, nothing should be exempt from potential cuts, including defense. The Ryan Proposal is very similar to the Obama Proposal in avoiding cuts in defense spending. This a mistake. Second, we must put emphasis on the efforts of the House Ways and Means Committee to undertake serious reform of the tax code. Third, we need to look at alternative ways of reforming Medicare, reforms that are intended to accomplish the same goals but in a less controversial fashion.

Let’s look at Defense. While there are massive amount of defense funding that can be saved. This will not be easy. Often the programs that are pursued as Defense programs, did not begin at Defense. Former Secretary Donald Rumsfeld has pointed out that “$18 Billion in earmarks are shoved down the Pentagon’s throat every year. Congress wanted it, we didn’t want it. It didn’t have anything to do with defense capabilities.” How does this happen? Defense contractor gave $26 Million to congressional candidates in the last election and spend $150 Million annually on lobbying. They are already complaining about the potential of thousand of layoffs as well as other catastrophes that will befall the nation in the event of Defense cuts. They are not going to roll over and play dead.

What are some of the examples of serious cuts in funding? For a number of years, Members of Congress and defense contractors sought to sell the F-35 to each of the Services as a multi-purpose fighter. The Services did not want the plane but it proceeded anyway. Finally, the House, but not the Senate, responded to the claims of waste and voted to kill the alternative engine that was to be built in Speaker Boehner’s District. The Department of Defense has stopped the funding for the engine. They should go further. They should kill the F-35. Instead, they have cut the orders for the F-22, currently in operation and the most capable fighter in the world. Clearly, the F-35 is not designed as a replacement for the F-22 and, with only one engine, is not really a replacement for anything. Interestingly, General Electric seems to feel that even this de-funding decision will ultimately be reversed and, as a consequence, they are continuing to “self-fund the project through this crisis”. GE has been here before. Perhaps, they know something we do not.

How about the C-17 cargo plane which costs $300 Million for each plane and is not even wanted by the Air Force? This does not make sense. It would appear that there is no reason for keeping 80,000 military personnel in Europe. Clearly, there is no threat from Russia in terms of an invasion of Europe. Some 60 years after World War II, our presence in Europe is completely obsolete. Even our allies in Europe are cutting or considering cutting their defense budgets in recognition of the fiscal issues facing Europe. Our allies will not be pleased by cuts in our presence in Europe. These cuts will place greater pressure on their fiscal positions. In the end, however, we must watch out for ourselves.

The Debt Commission, appointed by President Obama, made a series of proposals for cuts in Defense spending. Congressman Ryan was a prominent member of this Commission. The Commission proposed $100 Billion in costs by 2015. Part of this was reducing our overseas bases by 1/3rd, saving $8.5 Billion. Why not 2/3rd of the bases for a $17 Billion saving in Defense spending?

The total Defense Budget is $700 Billion or 20% of the Federal Budget. Currently, $160 Billion is allocated for the wars in Iraq and Afghanistan. Another $50 Billion pays for the pensions and health care benefits of our military. The rest of the Budget goes for new equipment and foreign military assistance, including $5.4 Billion for foreign military financing. If it can be shown that the financing is for defense purchases from American companies and we ultimately have the financing returned by foreign countries, this could be a reasonable program. Also part of the Budget is the cost of overseas bases and non-core military operations.

These and other potential cuts in Defense spending are in addition to the savings that could be made in reducing fraud and mismanagement. Maybe, at some point, the Defense Department will be able to actually conduct an audit on their programs. In the meantime, we need to find savings wherever they are. Everything should be on the table.


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A Seceding States’s Treaty With The US? By Dick Shriver

Secession is in the air.Actually, it’s been in the air since before the Peace of Westphalia and the creation of the modern nation-state in 1636.The United States seceded from Great Britain in 1776.One of the most important secessions in the past 200 years was, of course, the Civil War in 1861 when 11 states seceded from the United States. Less well known is the fact that secession has been a serious issue in five of the fifty states in the US in just the past ten years.The proponents of secession have their reasons.

Hawai’i: There is a movement in Hawai’i seeking full independence from the US because of the “illegal” annexation of Hawai’i fromQueen Lili’uokalani in 1893 Hawai’ian secessionists received a boost when the US Congress passed its famous “Apology Resolution” in 1993, to atone for the heavy handed manner in which Hawai’i was annexed by the US at the end of the 19th century.

Alaska:the Alaskan Independence Party succeeded in putting secession on the ballot in 2006 in an effort to gain freedom from the United States.

Georgia:In 2009, the Georgia legislature voted on a conditional secession should the US Congress restrict the ownership of firearms or ammunition; with the recent declaration by Secretary of State Clinton that the US will ratify the UN Small Arms Treaty, Georgia may soon be tested on this point.The UN treaty is a multi-lateral agreement whereby American guns will be subject to confiscation, more bureaucratic licensing requirements, gun registry and more restrictions in the buying and selling of guns.

South Carolina: the Third Palmetto Republic is a movement today to secede from the US in an effort to become independent of an over-controlling Washington and big companies that, together, control the US to the detriment of South Carolinians, unable to stand up to the leviathan of DC and big business.

Texas:In 2009, Texas Governor Rick Perry said, “Texas is a unique place.When we came into the union in 1845, one of the issues was that we would be able to leave if we decided to do that … My hope is that America and Washington in particular, pay attention.We’ve got a great union.There’s absolutely no reason to dissolve it.But if Washington continues to thumb their nose at the American people, who knows what may come of that?”

In a 2008 Zogby poll, 22% of Americans believed :”any state or region has the right to peaceably secede and become an independent republic.Secession from the US is unlikely in any state or region today.The work of President Obama and his administration, however, will invigorate secessionist movements that spread to other states.

Secession of any state is not going to happen as concurrence at both state and federal level is required. Let’s take a peek at a hypothetical secession, however.

If a state were to secede, it would immediately seek a treaty with the US.The seceding state might propose as follows:

“Article 1:We will continue to look to the US to provide us with national security, and to that end, we agree to pay our fair share of the US defense budget and NATO.Our National Guard will be maintained as in the past and may be called up by the President of the United States to serve the United States wherever and whenever required.

Article 2:We agree to support the budget of the Department of Homeland Security on a fair share basis for all customs issues, Coast Guard support in our waters, so long as this Department upholds the existing laws of the United States pertaining to counter-terrorism, illegal immigration, illegal narcotics, and illegal arms trade.

Article 3:We agree to continue to pay our fair share of the Department of Transportation, including federal highways and air transportation.

Article 4.We agree to continue to pay our fair share of Native American affairs.

Article 5. We will look to the US State Department to represent us in all affairs foreign to our state and the United States, and to that end, we will pay our fair share of the cost of the US State Department, US foreign assistance, the UN, and the World Bank Group.

Article 6.We will introduce a new currency, pegged to the price of gold (rather than let US inflation work its way into the local economy).All trade with the US will be done in our own currency.

Article 7.We will adopt, temporarily, US laws the first day of our independence with the exceptions that our state supreme court will be the court of last resort for our citizens and other legal entities based in our state; federal US judges must leave our state.

Article 8.All US Medicare, Medicaid, and Social Security payments to our citizens will cease on the day of independence, we agree to continue support of these programs at their current levels, though we reserve the right to change the terms of these entitlements in the future.

Article 9.We hereby declare that we are in no way responsible for repayment of any future debt incurred by the United States.

Article 10.Trade between our state and the US will be free and without customs and border controls, though all foreign trade with the US will be carried out with our own currency which will start out, on independence day, at one unit of our currency for one US dollar.

Article 11: We will maintain a small embassy in Washington to represent the interests of our state on matters of trade and finance (especially our contribution to the US budget).

Article12.Articles 1- 11 represent the full extent of our agreement with the United States of America.During the first year after our independence, we will systematically and cooperatively eliminate all US support of, and involvement in, taxation of our citizens, our schools and universities, hospitals, housing, laws and courts, agriculture, veterans affairs, commerce, small business support, the governmental affairs of our state, environment, parks, forests, energy, labor and elections.US laws related to gun control and human life no longer apply in our state.On our independence day, we will relinquish our current congressional and senate seats in the US Congress and our electoral votes for the US presidency”

Imagine the uproar.

In a not unrelated event, fifteen months after Lithuania declared its independence from an “indestructable” Soviet Union in March of 1990 (which secession was triggered by forty years of Soviet oppression economically and politically), the Soviet Union itself collapsed.



The Budget: Social Security and Medicare By John Russell Deane

There has been much discussion about what cuts can be made to the budget to make our expenditures sustainable. Interestingly, neither the Republicans nor the Democrats seemed prepared to address the white elephant in the room. If we address only non-defense discretionary spending, we will not reduce the annual deficits or the national debt sufficiently. In fact, entitlement programs, including social security, medicare and medicaid account for 60% of the budget. Today, Congressman Ryan, Chairman of the House Budget Committee has stepped forward to lead.

The discussion of spending cuts must address reform of social security and medicare. This will be a difficult and divisive discussion. It will require and open and candid conversation which is rare (perhaps non-existent) in Washington. It will also require political courage of which there is also a deficit in Washington. Neither party wanted to step forward first. Each was concerned that the other party would take advantage of the opportunity to castigate the other party as the one that wants to destroy the programs our seniors need to survive.

I, and many of my friends, are on social security. I enjoy the monthly payments but, were I to have planned to live without those payments, I could have. I am not a fan of wealth distribution programs or progressive tax programs. I am not a socialist. However, social security is here, it is counted on for retirement support by millions, and it is unlikely to be ended in the near term. That being the case and with a dose of pragmatism, what can we do?

First, we must return as soon as possible all funds that have been stolen from the social security trust fund. When we look for solutions in the budget and debt levels, we have to remove the smoke and mirrors. Second, we must eliminate the payroll cap from the social security tax, even though that increases the costs of a program for people who will likely never benefit from it. Third, we must raise the retirement age. Fourth, the social security payments to our retired citizens must be needs-based. These steps will make the program even more socialistic, but there does not seem to be an alternative. Perhaps we will find a better alternative in the future. For now we must assure there will be a future.

As is the case with social security, I, and many of my friends are on medicare. The program is broken and becomes more broken each day the baby boomers swell the rolls. The problem is also about five times the problem with social security. There are a number of financial and operational issues with the medicare program which will be addressed in another paper. For now, I will only suggest that part of the solution is to increase the income that will support the program. Medicare should be treated just as any other insurance program. Most of us have dealt with our medical needs over time through insurance. When we reach the magic age, we subscribe to medicare and reduce what we spend for insurance. I believe that this must change. Some are better able to pay toward the costs of medicare. Some are not. Therefore, based on income and assets, recipients of medicare should pay premiums that bear a relationship to their ability to pay. Again, we move more toward socialism. Again, I am no socialist. Again, there is no alternative.

The difficulty with entitlement programs, of which social security, and medicare are the majors, is that they all continue to grow, especially with the advent of an aging population. It has been reported that nearly half of Americans live in a household where someone receives government benefits. Approximately 45% of our people do not pay any federal income taxes. A Wall Street Journal poll showed that less than 25% of those polled supported significant cuts to social security or medicare. A significant majority of the tea party supporters also do not support such cuts. Interestingly, a significant majority of those polled did not feel that cuts to medicare would be necessary to significantly reduce the deficit. For social security, 49% did not think significant cuts were necessary to reduce the deficit. In the fight to reduce entitlements, a very large percentage of citizens have little to gain in cuts and little interest in such reductions. The majority of our people benefit from these governmental programs and do not pay taxes. The majority of our people do not approve of cuts in these entitlement programs. Reforming social program is clearly not popular. It is not difficult to see why political courage will be necessary in this discussion.

One day in the dining room in the Parliament Building in Tallinn, Estonia, I had lunch with Mart Laar, the Prime Minister of Estonia. I said that I saw that his ratings in the polls had fallen to 20%. He looked up and said “Good, we must take harder decisions.” This was a leader. He was substantially more interested in the future of Estonia and its people. It will be interesting to see who our leaders are as this issue is debated and who are simply interested in political security.

If we are serious about reducing our unsustainable deficits, we must look to changes in social security and medicare. We need to support these changes and those who propose them. If solutions were easy, they would have been implemented already.


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Truman’s possible Fifth Point: Culture Matters! , by Dick Shriver

President Harry Truman’s 1949 Inaugural Address was one of the most amazing speeches in modern history.In it, he laid out the substanceof the next 50 years of world affairs with just four points: he said, in short, we must repair a broken Europe (Marshall Plan), we must protect Europe from the East (NATO and the Cold War), we must support the United Nations (We have been its biggest supporter), and fourthly, we must help those countries less fortunate than we; we have the technology and it is in our best interests to do so.

Truman’s fourth point became known during the ‘50s as America’s Point Four Program, and today, after some iterations, is called USAID, the US Agency for International Development.

I met Point Four workers building schools in Iran in 1956.They were using local materials (mud bricks, e.g.) and did not stand out in any way.These workers were very civil engineers working for a pittance who imparted much value to poor people in countries we assisted; they expected nothing by way of thanks, and certainly shunned the limelight. They had no political agenda, and to me, represented the best of America ideals.From what I saw, they assimilated well culturally, even though few, if any, spoke the local language.

After a few decades of foreign development experience in the latter part of the last century, I became increasingly convinced that it was foolish to provide foreign assistance without the US being substantially more conscious of the local culture.Of those things that make up a nation’s culture, language and religion go without saying, but sometimes the more critical items are attitudes toward law and order and even the quality and fairness of local laws to begin with, the degree to which courts are independent, attitudes toward paying taxes, honesty in contracts, attitudes toward Americans, attitudes toward criminal behavior, attitudes toward women, and so on.

Without an understanding of such matters, foreign assistance may accomplish precisely the opposite of what is intended.The good people for whom assistance is intended may never receive it, or receive no more than is needed to provide evidence to donor countries that their wishes were observed. We may simply line the pockets of local potentates, and in various ways, the pockets of our own potentates.

The importance of culture was driven home to some of us during a seminar at a small college in Berlin of which I was the head at the time.The seminar was held in the evening, and was optional.Twelve students from ten countries attended, as did I.The seminar was led by Dr. Jens Reich, a colleague and friend who had been a biological scientist for East Germany and the Soviet Union, though an early dissident and thorn in the side of the German Democratic Republic.

In September, 1989, Dr. Reich was a co-author of the paper, “Fresh Start 89 – New Forum”.A couple of months later this paper went viral (before the word had even been invented) throughout East Germany, resulting in great confusion and hesitation among the authorities who lost control of the situation, and could no longer make local decisions to fire on protesters.On November 9, 1989, the order was given to East Berliners that they could now move freely throughout Berlin, which then led to the crumbling of the Berlin Wall.

Professor Reich’s seminar focused on a single poem, “Wanderer’s Nightsong”, written in 1780 by Johann Wolfgang Goethe.

Reich never stated a purpose or goal of his seminar.He simply handed out copies, in 32 languages, of this immortal poem comprised of a mere 24 words.In the translation of the poem into English by Henry Wadsworth Longfellow, the poem grew to 30 words:

Wanderer’s Nightsong

Over all the mountaintops

Is calmness,

In all the tree peaks

Sensest thou

Scarcely a breath;

The little birds remain silent in the woods,

Just wait, soon

Restest thou too.

Jens, the Green Party’s candidate for President of Germany in 1992, described the poem’s free rhythm, its perfect rounds, ABABCDDC (in the original German, of course … even this poetic form did not translate into other languages, however).In German, the poem is suspenseful and there is tension as the birds “hold back” their song, an active verb in German for which there is no counterpart in English.

Each student was invited to read the poem in his or her own language (of which eleven were represented, counting German), and then describe what the poem said.Of course, the rhythm, the sound, and the feeling …. among other aspects, were different in each case.Sabina Amanbaeva from Kazakhstan read the 1892 translation by the poet laureate of Kazakhstan, Abai Kunanbai-uli, as tears rolled down her cheeks.It was apparently a moving poem, but when she described the story of the poem in English to the class, it differed in many ways from Goethe’s original. Someone asked if the Kazakh poet had translated it from the German: “Oh, no”, she said.He had translated it from Russian into Kazakh from the 1840 translation from German into Russian by the famous Russian poet, Mikhail Lermontov.

Jens had made his unstated point: culture matters.

I marvel at the simple perfection of Truman’s Inaugural address in 1948.However, if he had made a fifth point, it might have read:

“Point number five: the vastly different cultures in our world today will make it difficult for Americans, who are so isolated from the rest of the world, to participate in the new and complex environment of the future.We must be prepared to communicate our values, principles, ideals and policies in such a way as to not offend foreign cultures, but nonetheless to get our points across with the utmost effectiveness.Furthermore, we should understand foreign cultures sufficiently to engage with them in such productive activities as trade, treaties and cultural exchanges.We should especially understand their attitudes toward us.We should therefore ………”. I am not smart enough to conceive what Truman might have said at this point….possibly something to do with educating college students about other cultures. Thirteen years later, we did get the Peace Corps, however (the first head of which was my late cousin, Sargent Shriver).

Had Truman made the fifth point in 1948, would US policy-makers have attacked Vietnam?Probably. Would the Cold War have ended sooner? Doubtful.Would anti-Americanism be the powerful force it is today in so many parts of the world, however?I think not.Furthermore, with Truman’s fifth point implemented for more than 60 years by now, would we have invaded Afghanistan, Iraq and Libya?My guess is we would not be at war against all three, certainly not at the same time, and may even have avoided at least one war altogether through greater knowledge and less clumsiness in foreign affairs and cultural matters on our part.

Importantly, we might have found a means, other than war, to liberate Iran by now.

We would absolutely have seen Islamic fundamentalist terrorism coming our way decades before 9/11.

Finally, USAID would, today, be run very differently by very different people … and perform vastly better in terms of both foreign and American interests abroad.

Sometimes it’s fun to just ruminate.



The Budget: Making It Work By John Russell Deane

Dealing with our $1.65 Trillion budget deficit and our $14 Trillion debt will take dramatic actions which will be unpopular with one group or another, maybe all. Clearly, with social security, medicare and medicaid, comprising 60% of our national expenditures, there is no way to balance our budget and reduce our unsustainable debt without addressing these programs. Discretionary spending only accounts for about 12% of spending. However there are a number of steps which can be taken to help.

While there is a great deal of discussion about the 2012 Budget, we have not yet passed the budget for FY 2011, and we are already half way through the year. I wonder how many businesses operate their budgetary process like this? With a $14 Billion debt, the Democrats in the Congress proposed cuts in the FY 2011 Budget of $6 Billion, of which $2Billion was smoke and mirrors. The Republicans proposed a cut of $61 Billion. A lot bigger cut, one would say. In fact, when dealing with a $14 Billion debt and a $1.65 Trillion FY 2011 deficit, both are chump change. By the way, this does not even take into consideration the $103 Billion we have learned the Congress hid here and there in the ObamaCare legislation last year. More on that in a later paper.

For FY 2012, the Administration has proposed that we limit spending to the levels of 2008. The Republican proposal has not been made. If we are to truly engage in adult conversation, we must find solutions to our entitlement programs, including social security and medicare. We must find “cuts” in the tax code. We must also find big cuts in the Defense budget. There is no reason why this cannot be begun in dealing with FY 2011 and carried forward in dealing with FY 2012. For example, since there is little threat from a Russian invasion of Europe, why not close our facilities in England, France, Germany, Italy and others? Savings of billions of dollars will be achieved. With the threat of North Korea and our presence in South Korea, removing military assets from Asia requires a bit more analysis. Nonetheless, assets in Asia should be on the table. More on this in a later paper. How about dropping whole weapon systems? The F-35 program to provide a jet with multiple uses for all of the military services was initially rejected by the services. It continued to have life because it was pushed by members of Congress whose constituents had much to gain. Interestingly, the alternative engine for the F-35 was recently rejected though it would have benefited Speaker Boehner’s constituents. Let’s get rid of the F-35 and not hurt our defense resources, but more on this in a later paper.

How about the tax code? One would think that the purpose of the tax code and tax system would be to raise funds to support important governmental programs. Too often, however, the tax code has been written to accomplish other goals, social and otherwise. We allow billions of dollars in tax breaks for the “oil depletion allowance”. This is intended to encourage drilling for new sources of oil. Two problems. If someone were to propose that we take billions of dollars from our treasury and give it to the oil companies to drill wells, it would not get past the laughter. Second, the oil companies are not drilling. Why is this massive gift still on the books? How about farm subsidies? Probably the same fate of massive laughter. This subsidy is not enjoyed by small farmers. Rather, agribusiness, major corporations, benefit from the farm subsidies. How about the $5.4 billion in lost revenues to encourage the production of ethanol. Ethanol not only took money out of your pocket, it is probably rusting the fuel system of your car as you read this. Definitely more on this later. There are many deductions that most would be more familiar with. How about deductions for interest, medical expenses and the like. All are popular, but very expensive. There must be some attention to this if we are going to corral our expenditures. More on this in a later paper.

This is not to say we should not keep up the pressure on discretionary programs. A recent report from the Government Accountability Office found dozens of overlapping and duplicative programs in virtually all departments and agencies of the federal government. It was estimated that by ending duplicative programs could save $100 Billion to $200 Billion annually. Interestingly, there even seemed to be bipartisan support for such cuts.

If we are serious about cutting our deficit spending and reducing our massive debt, we have to look everywhere. Everything must be on the table. When everything is on the table, those proposing cuts will be either joined by the other party and both will work toward solutions. Or, those of one party will take the lead and the other party will use the opportunity for political advantage. They will claim that the party proposing the cuts is mean-spirited and the cuts are not really necessary. I think it will be obvious who are the leaders and who seek political expediency. You need to watch to see who wants to save the nation and who wants to be reelected.


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In Search of Civility and Common Sense By John Russell Deane III

For the first time in my life, I have begun to worry about the state of our nation. Is it possible for our way of life to weather the challenges it faces? Will our Constitution survive? Will we sink in socialism as other countries are seeking to climb from its clutches? Will we be able to pass on a society which values hard work and respect for others? Will our people believe, as they have in the past, that they should assume responsibility for our acts and omissions? Will we be a people that do not look to others for support and, at the same time, be a people with a spirit of charity to look to the needs of other? Will we pass to our children and grandchildren a country in which they will be able to enjoy the fruits of their labor and have a life even better than we have enjoyed?

I am a practicing libertarian. I strongly believe that I should have the right to live as I will without the interference of government or individuals so long as I do not interfere with the rights of others to enjoy such freedom. I strongly believe that no one owes me anything and I owe no more to others. At the same time I support voluntary charity to help those in need through no fault of their own. I believe strongly in strict construction of the Constitution, not the elastic version which allows it to support or oppose what the judges want it to.

Over the past few years, I have witnessed events that I feel evoke comment. The events run the gamut. I am concerned that our foreign policy, which has always been uncoordinated and, largely, ineffective, has become dangerous. I feel we have also reached the point where our tax policy, monetary policy, debt policy, economic policy and various governmental programs pose a serious threat to the viability of government at all levels. To the extent possible, I have made my comments clear to those who wished to hear them. I have decided to continue my efforts in a more formal fashion.

I will be preparing papers from time to time which explore issues I feel are important in terms of values I hold high. Joining me in this venture will be Dick Shriver, a friend for 40 years and a true patriot. Others will be introduced from time to time. Some of our papers will address issues that are timely. Some will take the longer view. Likely, none of our papers will deal comprehensively with the issues they address. Often, our papers will deal with a specific issue within a matter and we will come back later with a paper that will deal with other issues. The views are our own. We welcome comments. We also welcome our readers making the availability of our papers known to others.

John Russell Deane III


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