Please! Do not call me a Republican (or a Conservative)!!

The historical home of the GOP - The Little White Schoolhouse.

People occasionally ask me how I originally became a Republican, and why I so stridently left the GOP and now reject both the Republicans and the Democrats. There is a third option that I have pursued, and it is premised upon a rejection of both social mysticism and religious mysticism – in all their forms. Stated most eloquently by Ayn Rand:

The concept of individual rights is so new in human history that most men have not grasped it fully to this day. In accordance with the two theories of ethics, the mystical or the social, some men assert that rights are a gift of God—others, that rights are a gift of society. But, in fact, the source of rights is man’s nature.

The Declaration of Independence stated that men “are endowed by their Creator with certain unalienable rights.” Whether one believes that man is the product of a Creator or of nature, the issue of man’s origin does not alter the fact that he is an entity of a specific kind—a rational being—that he cannot function successfully under coercion, and that rights are a necessary condition of his particular mode of survival.

“The source of man’s rights is not divine law or congressional law, but the law of identity. A is A—and Man is Man. Rights are conditions of existence required by man’s nature for his proper survival. If man is to live on earth, it is right for him to use his mind, it is right to act on his own free judgment, it is right to work for his values and to keep the product of his work. If life on earth is his purpose, he has a right to live as a rational being: nature forbids him the irrational.” (Atlas Shrugged)

Over time, I have continued to study and challenge my assumptions and understanding. I, for one, try to keep learning and I honestly believe that this is an obligation we all have to ourselves. Consequently, I cannot honestly support, or participate in any way, either the Republican or the Democrat partries – both are (as stated in a now defunct comment by a noted Objectivist): “evil statist fucks without the slightist rightful claim to power.” If memory serves, and to the author’s credit, that comment was characterized as “in more vulgar terms.” Well, I really don’t think that was necessary! The reason being is that both groups get to their evil statism-in my view-in morally reprehensible ways that, in the end, trample upon individual rights thus foundationally drawing into question whether the concept of inalienable rights (nicely discussed by George H. Smith here, here, and here) even has meaning.

So, why did I become a Republican in the first place? Well, like many, I first learned about politics from my parents. Also, I was influenced heavily by my grandparents, and in my case even a great-great grandparent! So, for me, it was a package deal. Later, as I began to become more “enlightened” in my thinking I studied the history of the political parties and in the GOP found what turned out to be a temporary political home. ‘To man, his birthright; to labor, freedom; to him that wants to labor, work and independence; to him that works, his dues.’ This is the Republican platform (Carl Schurz). It is indeed interesting to see the parallel between Schurz comment, and the positive and enlightening statements above by Ms Rand.

While I don’t agree with all that Schurz eventually advocated, I do find it sad that the above platform is not what Republicans of this day and age revere. The current gang of political hucksters known as Republicans are premised fully upon religious indoctrination bordering on a desire to institute a Christian theocracy in America. Their militant anti-abortion positions are merely a logical consequence of their indefensible, irrational, and contradictory philosophical positions. As a result, their only defense of capitalism is through altruism – a contradiction hardly to be matched. Yet, it is from such gymnastics that they all now hail. There is more to this current gang which is irritating, but those are eluminating attributes which if viewed by the men and women of the mid 1850′s who founded the party would likely have driven them right out of the Little White Schoolhouse.

What attracted me to the GOP many years ago, and what was clearly the impetus for my quick and total disengagement with them, revolves around the original founding of the party and its emphasis on individual rights. To understand the origins of my GOP leanings, and to understand my utter disenchantment with them presently, one needs to go back to the late 1850′s roughly 10 years after Wisconsin gained statehood. It was at this time that my great-great grandfather, Professor Edward Daniels, was running around the state as a “Freeman” advocating for individual rights – overtly the rejection and rebellion against The Fugitive Slave Acts of 1850. Edward Daniels was an abolitionist, and very active in the cause. He also supported the Freesoilers who believed that any new states entering the union ought to be free states where slavery was banned. This world-view can be illustrated rather dramatically by the Booth War that was raging at the time in Wisconsin.

Edward Daniels (and his Republican enthusiasts) position was well represented by the Ripon Times of both August 4th and August 10th of 1860 in reference to the “Riot in Ripon”:

“At the Hall, as soon as order could be restored, a resolution was offered by A. E. Bovay,–”Resolved, That Mr. Booth shall not be re-arrested in Ripon,”–which was adopted amid deafening shouts and hurras. Mr. Daniels took the stand and made an impassioned speech for a few minutes, and moved that we now organize a League of Freedom, the members of which shall be pledged to resist any attempt to execute the Fugitive Slave Act. One hundred and twenty persons were enrolled as fast as the names could be written. A. E. Bovay was elected President, and C. J. Allen Secretary. A Vigilance Committee of twelve members was appointed, consisting of Edward Daniels, O. H. LaGrange, A. B. Pratt, Dana Lamb, A. E. Bovay, C. D. Loper, J. S. Landon, F. R. Stewart, I. A. Norton, F. W. Cooke, Lucius Thatcher, A. M. May, Benj. Pratt, L. P. Rivenburgh. The mass of the people then formed a procession, preceded by the Ripon Wide Awakes, and escorted Mr. Booth to the residence of Prof. Daniels. Some twelve or fifteen persons were put on duty as volunteer guards, to defend the residence of Prof. Daniels, and the remainder dispersed. (Aug 4)”

The Times then published this on August 10th:

“WHERE RESTS THE RESPONSIBILITY?–No good citizen desires to see such a state of affairs as prevailed in this city last Saturday and Sunday–a community excited, angry, turbulent–men arming themselves for defense, and organized in military bands to protect themselves and their friends.

A man appears in our midst who has been convicted for an offense under the Fugitive Slave Act, and who has escaped from imprisonment. Personally he is not known to a dozen persons in community [sic]; circumstances connected with his career have not commended him to popular regard. Yet at the first intimation that he is to be again arrested, hundreds of men become excited, solemnly pledge themselves that he shall not be taken again into custody, and rally to his defense. What is the character of the men who do this thing? They are not the depraved, the debauched, the reckless–the supporters of the grog shop, the gaming-table, or any other of the dens of vice. They are our farmers, our mechanics, our students–men, young and old, of sobriety, integrity, and honor–men who in all the ordinary routine of life are the best neighbors and citizens. Moreover they are persons of strong moral convictions, and uncompromising in their devotion to their principles.

When such men, to the extent of large numbers in a community, resolve that an enactment which is offensive to all their ideas of right shall not be enforced, is it claiming too much to maintain that those who instigate, abet, and encourage, either actively or by their indifference, such a course of proceedings as will oblige these men to either defend their principles or abandon them, are responsible for disturbing the peace of community?

After the recent demonstration here it must be conceded that the Fugitive Slave Act cannot be peaceably enforced in Ripon. The public sentiment is up to that point. Let this fact be recognized and respected, and there will never occur a repetition of the scenes enacted in this city on the 4th and 5th days of August last. (Aug 10)”

For my great great grandfather, in the summer of 1860, support of Sherman Booth and active rebellion against The Fugitive Slave Acts were an uncompromising commitment to the highest ideals and vision of America’s founders; the implicit sense of individual, inalienable, rights put forth in The Declaration of Independence.

As a result of my historical connection to the founding of the party (we have it on family history that Edward Daniels was one of the gatherers at in Ripon in March of 1854, but given the surrounding history that is documented it is fair to conclude he was at least one of the earliest-outspoken-members of the GOP), I held and believed for many years that the Republican Party subsumed this sense of individual rights. Through time, I am now fully convinced that was a mistaken assumption. Clearly, by any measure, the slow and steady rise of religious and arbitrary moral litmus tests for membership and, most importantly, party leadership and candidacy positions is well known (such as the effects of the Christian Coalition, Ralph Reed Jr., and Jerry Falwell’s Moral Majority). The rise of Falwell, and his so-called “Moral Majority,” was the first overt sign I saw in my lifetime of serious anti-individual rights issues and blatant contradictions within the GOP. Their defense of property and liberty was particularly troublesome from an economics as well as philosophical perspective. For example, Bush 43′s position on lowered tax rates was defended not on an individual rights basis (as the original founders of the GOP would have), but rather on a convoluted notion that lowered tax rates were justifiable because they would, in the end, return more revenue to the federal government. Moreover, that sort of altruistic rationalization is clearly premised upon a theocratic view that one IS obligated to be the keeper of ones brother. A parallel premise is held firmly and overtly by Democrats who simply escalate government and collective rights above the individual and make no excuses that this is turning the founders vision on its head.

It is this sort of convolution that simply resulted in my search for another option. That search led me to some brilliant minds such as George Reisman, Ayn Rand, Ludwig von Mises, Adam Smith, John Locke, Thomas Jefferson, Aristotle, and others. Also, I found myself with renewed interest in the history of scientific development. Great minds such as Galileo, Newton, Einstein took on a whole new meaning to me. My view gelled to where I am far more comfortable in my own philosophic skin. In philosophical terms I fully embrace that reality is an absolute, reason the only means of knowledge, that humans do have a free will (to think), that rational self-interest is profoundly moral, and that above all of this that individual rights, properly understood, are in fact inalienable and absolute and that the source of those rights is profound – man’s nature as a living being. On this view, only capitalism can be considered as a social system worthy of man’s mind, and that politically only those governments (and the elected representatives) that are premised upon and dedicated to the protection of individual rights are just. Moreover, that the founders vision that all government be subordinated to the individual must be defended.

To effect all of this one must take the time and incur the effort to visit the ballot box armed with knowledge, but while on the way (if you happen to see me) …. please do not call me a Republican (or a Conservative)!

The Wisconsin State Historical Society notes

Daniels, Edward 1828 – 1916
Definition: geologist, abolitionist, soldier, b. Boston, Mass. He moved to Wisconsin in 1849, where he taught at Ripon and Carroll colleges. He was Wisconsin state geologist (1852-1854). In 1854 he aided in the escape of fugitive slave, Joshua Glover, and in 1856 participated in Jim Lane’s expedition to Kansas. Returning to Wisconsin, he aided in the freeing of the Milwaukee abolitionist, Sherman Booth (1860) (q.v.), and in 1861 organized the 1st Wisconsin Cavalry Regiment and served as its colonel until his resignation in 1863. After the war he moved to Gunston Hall, Va., where he engaged in scientific farming, became a newspaper editor, and later edited a labor magazine. Milwaukee Evening Wis., May 13, 1916; 32nd Reunion of 1st Wis. Cavalry Assoc. (n.p., 1916); E. Daniels Papers.

The Implicit Problem of “Faith”

Words mean things, and conflating the word “faith” with knowledge based reasoning is really troublesome. Diana explains that fundamentally faith is believing something just because you feel like it, or that you simply want it to be true, despite any facts (or worse, in the face of contrary evidence) to support its veracity.

Please visit Diana’s awesome Philosophy in Action for more rational thinking!

What Art IS

Craig Biddle writes:

‎”Thus, Objectivism rejects the idea that art is whatever any self-proclaimed or allegedly “accomplished” artist happens to slap together or place in a gallery. Neither paint randomly splattered on a canvas, nor a bicycle wheel “cleverly” fastened to a stool, nor a word salad neatly printed on a page is art. Such things are not “bad” art; they are not art at all. Art is not the emotional spewing of irrational impulses, but the selective recreation of reality. Since man grasps reality only by means of reason, the creation of art requires the intense use of this faculty; it requires thought, concentration, mental connections, and the transformation of highly abstract concepts and values into the material of perceptual reality. This is not the province of buffoonery; it is the province of genius—and should be recognized and guarded as such.”

Brilliant! Could. Not. Agree. More.

Oppose SOPA / PIPA

If уου supported (οr attended) tһе protests іח Madison over collective bargaining, уου wеrе exercising уουr freedom οf speech. If уου protested tһе protestors іח Madison, уου tοο wеrе exercising уουr freedom οf speech. Freedom οf speech іѕ, іח fact, wһаt I wουƖԁ consider аח inviolable, sacrosanct, principle οf American-style democracy аחԁ fully reflects tһе brilliant enlightenment ideology οf ουr founders аחԁ tһе founding documents tһеу penned. It doesn’t mean уου аrе endowed wіtһ ѕοmе un-sourced, uncaused, supernaturally οr socially granted rіɡһt tο ѕау wһаt уου want, wherever, аחԁ whenever. Freedom οf speech іѕ fundamentally premised upon tһе recognition аחԁ due respect fοr tһе property upon wһісһ one speaks – іt іѕ a reflection аחԁ outgrowth οf tһе fundamental οf individual rights.

Wһеח уου һаνе permission frοm those wһο һаνе ownership οf ѕаіԁ property tο speak, уου аrе enjoying tһе freedom οf speech, properly understood. If уου ԁο חοt һаνе tһеіr permission, аחԁ speak anyway, уου аrе wrongfully trespassing аחԁ violating tһеіr pre-emptive rіɡһt tο hold аחԁ еחјοу property privately. Tһіѕ means tһе land upon wһісһ уου аrе holding уουr sign, οr speaking іחtο уουr megaphone; tһе building іח wһісһ уου rise tο deliver уουr message; tһе radio station οr television studio іח wһісһ уου аrе crafting уουr words аחԁ images; οr, indeed, tһе very web page upon wһісһ уου аrе posting уουr tһουɡһtѕ (video, writing, audio message). Sіחсе wе tһе people һаνе granted tο government tһе unique υѕе οf physical force іח ουr society, tһеу һаνе a profound role tο uphold tһе individual rights οf property owners wһο invite-οr give permission tο-people tο speak. Wе һаνе tһе rіɡһt tο speak ουr minds provided wе ԁο חοt violate tһе actual rights οf others іח tһе process – mу individual rights еחԁ wһеrе yours bеɡіח. Wеrе уου οr I invited onto private property tο speak аחԁ demonstrate, аחԁ tһе police (οr anyone) used force tο unilaterally silence such speech THAT wουƖԁ bе a violation οf уουr freedom tο speak аחԁ tһе property rights οf tһе landowner. Alternatively, іf уου rυח іחtο a lecture hall wһеrе аח invited speaker іѕ presenting views уου аrе opposed tο, аחԁ bеɡіח tο shout, interrupting tһе speaker, іt іѕ YOU wһο аrе violating tһе speaker’s (аחԁ tһе venue owner’s) freedom οf speech – уου аrе NOT legitimately exercising уουr οwח freedom, bυt rаtһеr preventing someone еƖѕе frοm іt.

If уου wеrе one οf tһе impassioned protestors іח Madison wһο ѕһοwеԁ up οח tһе steps οf tһе capital, οח еіtһеr side οf tһе debate, уου wеrе exercising tһіѕ protected rіɡһt аחԁ tһе principles behind іt. Yου wеrе חοt hauled οff tο jail аѕ a consequence οf protesting against Governor Walker bесаυѕе tһе land upon wһісһ уου demonstrated іѕ owned, theoretically, bу חο one іח particular, аחԁ everyone simultaneously, i.e. public property. If wе lived іח a dictatorship, Governor Walker сουƖԁ һаνе simply ordered tһе Capital Police tο seize уουr signs, аחԁ toss уου іח jail. Protesting οח public lands іѕ, іח fact, a unique case іח аח otherwise general freedom οf speech. It іѕ tһе government’s agents responsibility tο ensure tһаt уουr rіɡһt tο speak іѕ protected, аחԁ חοt violated – whether іt bе οח public lands (wһіƖе abiding tһе reasonable access rules needed), οr, especially, οח private property. Tһе wοrѕt case οf аƖƖ іѕ wһеrе tһе government presumes ownership οf аƖƖ property аחԁ simply uses іtѕ unique access tο physical force tο censor уου frοm speaking out merely bесаυѕе tһе message уου want tο deliver іѕ еіtһеr antagonistic tο, οr otherwise inconsistent wіtһ, official government policy. Tied fοr first wοrѕt, уου аrе hauled οff, οr censored, bесаυѕе someone standing next tο уου, wһο уου don’t know οr perhaps don’t even agree wіtһ, held up a sign οr played ѕοmе audio tһаt tһе government didn’t appreciate, οr violated someone’s intellectual property rights, аחԁ therefore уου wеrе summarily denied tһе rіɡһt tο speak (οr even remain οח tһе premises bесаυѕе tһе government сουƖԁ condemn tһе property forthwith) bу υѕе οf tһе force οf government – аƖƖ without аחу due process. Tһаt іѕ wһаt happens іח a dictatorship, οr аחу overtly tyrannical, οr theocratic/religious, state.

Wһісһ brings mе tο SOPA (аחԁ PIPA) –ill-conceived legislation supported bу tһе Motion Pictures Association οf America (MPAA), аחԁ others wһο claim (correctly) tһаt piracy οf protected material іѕ a problem οח tһе internet. Tһе stated intention οf tһіѕ expansion οf tһе Federal Government’s power over tһе internet іѕ ostensibly tο protect intellectual property, such аѕ music, video content, аחԁ literature. WһіƖе protecting tһе individual rights οf intellectual property owners IS a legitimate function οf government, іt саחחοt bе tһе case tһаt such protection simultaneously tramples tһе rights οf other’s free speech іח tһе process. Bυt tһаt іѕ exactly wһаt tһіѕ legislation wουƖԁ ԁο. Tһе legislation’s fundamental premise іѕ tһаt tһе internet іѕ actually tһе property οf tһе United States Government, аחԁ аѕ such those wһο happen tο bе іח power today саח unilaterally υѕе force tο restrict уουr аחԁ mу ability tο exercise ουr freedom οf speech, properly understood. Tһе proponents οf SOPA view tһе internet аѕ being owned bу tһе United States Government, аחԁ therefore subject חοt јυѕt tο protection οf intellectual property, bυt tο tһе overt υѕе οf force tο shut down entire websites аחԁ internet communities without tһе application οf tһе rule οf law. Tһіѕ іѕ wrοחɡ, іt іѕ a violation οf property rights, аחԁ іח fact a violation οf tһе individual rights οf website owners аחԁ οtһеr content producers.

Aѕ stated οח Wikipedia’s site “Tһе originally proposed bill wουƖԁ allow tһе U.S. Department οf Justice, аѕ well аѕ copyright holders, tο seek court orders against websites accused οf enabling οr facilitating copyright infringement. Depending οח wһο mаkеѕ tһе request, tһе court order сουƖԁ include barring online advertising networks аחԁ payment facilitators frοm doing business wіtһ tһе allegedly infringing website, barring search engines frοm linking tο such sites, аחԁ requiring Internet service providers tο block access tο such sites. Tһе bill wουƖԁ mаkе unauthorized streaming οf copyrighted content a crime, wіtһ a maximum penalty οf five years іח prison fοr ten such infringements within six months. Tһе bill аƖѕο gives immunity tο Internet services tһаt voluntarily take action against websites dedicated tο infringement, wһіƖе mаkіחɡ liable fοr ԁаmаɡеѕ аחу copyright holder wһο knowingly misrepresents tһаt a website іѕ dedicated tο infringement.[4]”

Tһіѕ іѕ analogous tο аƖƖ tһе protestors against Governor Walker wһο wеrе οח tһе grounds οf tһе capital іח Madison being hauled οff, en-masse, bесаυѕе a single protestor οח tһе οtһеr side οf tһе block held up a sign tһаt violated tһе copyright οf ѕοmе third party. If уου οr I violate a copyright іח ουr activity οח tһе internet, іf someone pirates intellectual property, tһаt іѕ a problem аחԁ piracy laws аrе already іח force. Bυt trampling tһе rights οf otherwise innocent website owners аחԁ tһеіr law abiding site visitors іѕ חοt tһе solution – bυt tһаt іѕ exactly wһаt SOPA wουƖԁ ԁο. I rarely agree wіtһ Hillary Clinton, bυt I ԁο agree wіtһ һеr wһеח ѕһе ѕаіԁ:

“Wһеח іԁеаѕ аrе blocked, information deleted, conversations stifled аחԁ people constrained іח tһеіr choices, tһе Internet іѕ diminished fοr аƖƖ οf υѕ.. Tһеrе isn’t аח economic Internet аחԁ a social Internet аחԁ a political Internet. There’s јυѕt tһе Internet.”

Today Wikipedia, аחԁ numerous οtһеr sites, аrе offline tο protest tһіѕ proposed legislation. I stand іח full support οf Wiki іח tһіѕ matter. Oppose SOPA! If such laws аrе allowed tο pass іח America, tһеח wе deserve tһе noose bесаυѕе wе һаνе given tһе government tһе rope аחԁ tһе authority tο tie tһе knot.

Sherlock on Occupy and Capitalism

Some time ago I received a newsletter that stated the following as part of a defense of capitalism:

“The capitalist system is messy, imperfect, and does need constraints to enforce contracts impartially, to protect individuals, the weak from the strong and it requires the rule of law to make it work. While the rule of law is not always perfect, the rule of the central planner is subjective and is subject to more corruption. This makes it more unfair to more people.”

Clearly, the gang hanging out doing the Occupy Wall Street shuffle not only believe the above but suspect and decry far far worse of capitalism. Indeed, these folks seem to be implicitly and in most cases tacitly demanding that capitalism either be “perfect,” or utterly abandoned. This is not all too different from the sustainability crowd who argues along the same thesis, if it cannot be sustained it must be untouchable; both views demonstrate abject moral depravity.

I would argue, and I believe it is no small point, that the concept of “perfection” is misplaced in any discussion of the merits of capitalism. In fact, I would take it one step further to suggest that those who have an overt anti-capitalist worldview have worked very hard to implant this notion. A notion that is almost reflexively adopted by those who contend capitalism is preferable, yet begin by conceding this point of imperfection to those who have a diametric worldview. All these defenders are left with then is an argument based upon shades of gray or degrees, and not absolutes.

Ryan’s Plan Pushes Debt Limit UP ~ 9 Trillion

Well, if anyone thought the GOP was pushing to NOT raise the debt ceiling you would be both wrong and naive. As I pointed out below, Paul Ryan had already stipulated this way back in January. Apparently Senator Schumer’s office thought they were being prescient earlier this week by intimating that just last week the GOP had only recently gone down this road. Schumer needs to do some fact checking, or perhaps stop in here for real enlightenment!

I have some numbers to compare to my estimate of 2.5 to 5.0 trillion as mentioned the other day. My assumption then was an amount of increase for the next budget year, assuming that would be the end of it for the foreseeable future… Below are the Ryan numbers right out of the proposed legislation he ran around Wisconsin advertising..

My admonition regarding taking him seriously as a bold fiscal conservative stands. I see no long term commitment or overt strategy whatsoever to re-forming (reducing) the size of government at the federal level.

Here is a portion of the actual text. You can look at the whole plastic bananna budget proposal here. Please note that I have added in parenthesis the annual increase.. All told, Ryan’s plan increases the debt limit just shy of 9 trillion dollars in 10 years..

CONCURRENT RESOLUTION
Establishing the budget for the United States Government
for fiscal year 2012 and setting forth appropriate budgetary
levels for fiscal years 2013 through 2021.

(5) DEBT SUBJECT TO LIMIT.—Pursuant to
23 section 301(a)(5) of the Congressional Budget Act
24 of 1974, the appropriate levels of the public debt are
25 as follows:

1 Fiscal year 2012: $16,204,000,000,000….(+ 1.9 trillion
2 Fiscal year 2013: $17,177,000,000,000….(+ .973 trillion
3 Fiscal year 2014: $17,955,000,000,000….(+ .778 trillion
4 Fiscal year 2015: $18,704,000,000,000….(+ .749 trillion
5 Fiscal year 2016: $19,513,000,000,000….(+ .809 trillion
6 Fiscal year 2017: $20,257,000,000,000….(+ .744 trillion
7 Fiscal year 2018: $20,981,000,000,000….(+. 724 trillion
8 Fiscal year 2019: $21,711,000,000,000….(+ .730 trillion
9 Fiscal year 2020: $22,416,000,000,000….(+ .705 trillion
10 Fiscal year 2021: $23,105,000,000,000…(+ .689 trillion

In all fairness to Rep Ryan, I understand why this is in here. He is doing this so as to inoculate himself and the GOP from hysterical criticism for not compromising towards the Democrat’s overt statist position. However, and this is the troubling part for me, Mr. Ryan also caved in on the whole bailout bash not all that long ago.

This has become his unfortunate trademark now, he talks a fiscally conservative, free market, line (, even pushing copies of Atlas Shrugged to his staff) , but clearly isn’t crafting legislation in concert with either. Compromise toward what he ought to (and I suspect he does) understand is evil is not leadership, it is foolish.

Our direct, demonstrable, personal interests, apart from any collectivist notions of “national interest,” are not advanced by going down this path. In fact, it is a clear and present detriment towards the attainment of long run, rational individual values. Moreover, this is all enforced at the proverbial point of a gun; and that is evil.

S&P’s Warning: A “Catch-22″

If S&P has taken this long to issue a negative watch on The US Treasury’s ability to repay debt, what would it actually take for this rating agency to make good on its warning? This is the question no one wants to really discuss in the media. It’s as if people here in the U.S. actually think that folks all around the world don’t already see our situation for what it really is… and think they can keep it that way. Moreover, If the United States has gotten away with a AAA rating all the while incurring massive deficits, doing basically nothing to address the incredible imbalances in the government, one has to really wonder… Well, now that the S&P has finally come out of the closet on this let’s briefly explore further.

It’s pretty clear now what will happen, and we will see a package of three measures; two of which are totally and completely antithetical to everything the Tea Party supposedly ran upon (not to mention what the Republican Party ought to stand for). We already know that Paul Ryan stipulated an increase in the debt ceiling – he has no fundamental aversion to big government, notwithstanding his occasional rhetoric and appearances as a deficit hawk. If he did, he would not have already agreed to engage in the illegal/legal ceiling charade (not to mention his support for the bailouts). So, you have Ryan’s “extreme” plan on the one hand, and the Obama plan (hitting the snake oil train today) on the other with both plans not-so-tacitly assuming an increase in the debt ceiling. Everything else proceeds from here..

The package will be composed of cuts in the rate of growth in spending coupled with small and generally symbolic cuts in some government programs, a tax increase upon both the middle class and, especially, millionaires and billionaires (defined as anyone who earns over $250,000 (:>) ), and an increase in the debt ceiling (which will be illegal before it becomes legal). We will still have roughly 1/2 of the tax filers in this country not paying any federal income tax, while the percentage of total tax revenue coming from the aforementioned millionaires and billionaires will rise.

With this basic blue print of increased taxes, modest spending cuts, and an incresed debt ceiling, the Washington viewed expenditure equation will be “balanced.” How much will the ceiling ceiling be raised? That’s a great question, but last year they engaged in the illegal, then legal, debt ceiling increase charade by tacking on roughly an additional 2 trillion… Given our dire situation, the number I see is an increase in the range $2.5 to $5 trillion. Yes, I realize that is an extremely wide range. But given the differences in Ryan’s plan verses what Obama is trying to sell, the ceiling charade really is the variable here. And this is where Obama will be focusing, in fact he has already shown his hand on this by extending his time frame to 12 years, etc.. Once the ceiling charade is again revisited and adjusted up, the Treasury will then commence to sell this debt. And this is where we get back to the S&P, and will see whether it has even a modicum of follow-through.

For every dollar of additional debt authorized, a commensurate incremental decrease in our credit worthiness is justified – all other things being equal. Such an incremental decrease justifies an increase in the rate of interest others can demand due to an increased risk premium addition. To compensate, we must either increase revenue or decrease our expenditures. The increased revenue and/or decreased expenditures must account for both present commitments and provisioning for future obligations, adjusted for increases or decreases in the cost of our debt. As a general premise, if our expenditures are lowered, and our debt ceiling is kept at its present level, the credit worthiness component (risk premium) of the interest rate we pay will not rise (we maintain our AAA rating). Conversely, if the debt ceiling is raised, then our interest payments will also go up (we have a degraded rating).

It is my observation that interest on our debt (new and already issued) is going to be rising as folks around the world already see our sovereign debt as something other than AAA, so the stipulation to increase the debt ceiling coupled with spending cuts and increased taxes will, at best, be merely an attempt to keep the appearance that our boat will stay afloat (even though listing, with a gaping hole in its side). The increased debt, higher taxes, and modest spending cuts are merely a not-so-elegant rearrangement of the deck chairs in an attempt to refocus attention (ours and other would-be purchasers of our debt) away from the sinking end of the boat, and into the blue sky above.. This adjusting of the balance sheet premised upon MORE total debt to fund current and near term spending will require a higher interest rate to compensate would-be buyers of that new debt. And make no mistake about it, an increase in the debt repayments will result here because rational investors (foreign and domestic private investors) will demand it – and rightfully so. The S&P has essentially given them the green light to demand it merely by virtue of this warning announcement…

And therein lies the issue. If S&P has stated that that the U.S.’s sovereign debt credit rating is in a watch status, and such a watch actually has the potential for a consequence (a 1 in 3 chance of a downgrade), then they should, in view of what both sides in this debate have ALREADY stipulated, lower the U.S. rating immediately upon the agreements reached in this debate – regardless the formula. And the reason is that this whole budget matter is nothing more than a classic Catch-22; a logical paradox that occurs when a person, or a government in this case, wants something (the credit rating that implies confidence for debt buyers to buy at the lowest risk rate available) that can only be acquired by not being in that very situation (increasing total debt); therefore, the acquisition of this thing becomes logically impossible.

Folks, there is only one way out of this paradox. The aforementioned 2 out of 3 must be eliminated from the debate and the solution. The debt ceiling must not be raised under any circumstances, and taxes should actually be lowered across the board and applied to all tax filers. The only rational solution here is to simply cut spending, reform entitlements (meaning phase out Medicare and social security), and dramatically cut the defense budget. Sadly, this is not part of either the Ryan plan nor, of course, Obama’s. Any legislator who supports either plan is betraying the premise upon which they were elected. Tea Party elected members for sure, and any so-called fiscal conservatives. Anyone who suggests, such as Paul Ryan, that the game begins with a continuation of the ceiling charade is not to be taken fully seriously in this matter. The solutions that are now on the table are non-solutions, and the S&P, if it is to have any credibility at all in the future, must lower the U.S. credit rating immediately after the votes on this budget issue are cast – regardless the outcome.