Sunday, August 23, 2015

The Giant Debt Bubble Revisited

Debt Bubble Revisited

I wrote the following piece as a newspaper column in 2004 -- 11 years later, the bubble has expanded and no one seems to care.

* * *

The Giant Debt Bubble

Stephen Roach, chief economist at the Morgan Stanley banking group, presented some alarming facts about the U.S. economy recently before an audience of fund managers. In order to finance the national debt (which exceeds $7 trillion), America has to import $2.6 billion in cash every day, an amount equal to 80% of the entire world's net savings. The debt was about half the size of the economy 20 years ago. Today it's at 85%.

The dollar has hit new record lows against other currencies from the yen to the euro. Household debt is at record levels. Americans are presently spending a record portion of their disposable income on their interest bills. Under these circumstances, Roach predicts a "spectacular number of personal bankruptcies" in the near future.

America is sitting on a giant debt bubble, spending money like a bunch of drunken sailors, seemingly oblivious to the catastrophic consequences of the bubble bursting.

The cost of government is now over $20,000 per household. As a token of their appreciation for being elected to office, Congress has recently passed the 2005 omnibus spending bill (H.R. 4818).

Six years ago there were less than 2,000 pork projects in appropriations bills. In 2005, more than 11,000 pork projects will be appropriated, costing over $23 billion, exceeding the 10,656 pork projects of fiscal 2004.

Some of the 11,000 pork projects for 2005 include:
  • $6.3 million – Wood utilization research (several western states)
  • $3.5 million – Bus acquisition (Atlanta, Georgia)
  • $3 million – Grape Genomics Research Center (Davis, California)
  • $3 million – Center for Grape Genetics (Geneva, New York)
  • $2.5 million – Horse Springs Ranch (New Mexico)
  • $2.3 million – Animal Waste Management Research Laboratory (Bowling Green, Kentucky)
  • $2 million – Kitchen relocation, North Star Borough (Fairbanks, Alaska)
  • $2 million – Replace buses (Chapel Hill, North Carolina)
  • $1.8 million – Eider and sea otter recovery (Alaska)
  • $1.75 million – Parents Anonymous
  • $1.5 million – Transport naturally chilled water from Lake Ontario to Lake Onondaga
  • $1.5 million – Wood products wastewater repairs (Canton, North Carolina)
  • $1.5 million – Anchorage Museum (Anchorage, Alaska)
  • $1.25 million – Train-to-Mountain (Washington)
  • $1.2 million – Alternative salmon products (Alaska)
  • $1 million – Trailways Station revitalization ((Georgia)
  • $1 million – B.B. King Museum Foundation (Indianola, Mississippi)

Apparently drunken sailors aren't the only ones who spend like a bunch of drunken sailors. Congress has a debt ceiling it has imposed upon itself that must not be exceeded. However, whenever the national debt approaches the limit, Congress simply raises the ceiling and continues its merry spending habit.

In a democracy, people tend to elect politicians who promise to give them something. Then the politicians appropriate vast sums of money to pay off the voters who elected them. In the process, the federal government spends much more than it takes in, building a massive debt that must be paid by future generations.

Our collective greed will be our downfall unless we sober up and get our financial house in order. If the giant debt bubble bursts, all we can do is clean up the mess and start over from scratch.

I've started over from scratch a couple of times in my life -- it's a long, hard road back to daylight.

* * *

In August of 2015, the U.S. National Debt exceeds $18 trillion, which is more than $57,000 per citizen and exceeds $154,000 per U.S. taxpayer.

The solution is simple -- less government and living within our collective means.

Quote for the Day -- "Blessed are the young, for they shall inherit the national debt." Herbert Hoover (U.S. President 1929 - 1933)

Bret Burquest is the author of 11 books. He lives in the Ozark Mountains with a few dogs and flourishes in a debt free, modest existence.

Thursday, June 25, 2015

Custer & Crazy Horse

Manifest Destiny was a term used primarily by Democrats in the 1800s to describe the concept of expansion of white European settlers in North America, based on the premise that expansion was not only good, but that it was also obvious (manifest) and certain (destiny).

As a result of the belief of the superiority of the White race, Manifest Destiny was used as justification for westward expansion and the adverse consequences perpetrated on those outside of the White race.

George Armstrong Custer (1839-1876) graduated last in his class at West Point and became an officer in the United States Army. He fought in the American Civil War, established a reputation as an aggressive cavalry commander willing to take risks and became a brigadier general by age 23.

After the Civil War, Custer eventually became commander of the 7th Cavalry and participated in the so-called Indian Wars, which were a series of conflicts between the federal government and the native people of North America. Apparently, the pesky natives didn't exactly buy into Manifest Destiny. Custer was nicknamed "hard ass" and "iron butt" by the troopers because of his stamina and persistence in the saddle.

Crazy Horse (1840-1877) was an Oglala Sioux who fought against the federal government in order remain free from the white man's utopian dream of conquest through Manifest Destiny. He had fought in many battles between the Lakota and their enemies, including the Arikara, Blackfeet, Crow, Pawnee, and Shoshone. But after the Sand Creek Massacre of the Cheyenne, the Lakota joined forces with the Cheyenne against the U.S. military.

In order to take possession of the Black Hills (gold deposits), the federal government set a deadline of January 31, 1876, for the plains Indians (Lakota Sioux, Cheyenne and Arapaho) who had been wintering in the free plains to report to their designated reservations or be considered to be hostile.

On May 17, 1876, the 7th Cavalry headed into the plains, as part of a larger army force, to round up the remaining free Indians.

In the spring of 1876, Sitting Bull, the Hunkpapa Lakota holy man, had formed a large gathering of plains Indians to discuss what to do about the advances of the white man. This temporary village along the Little Bighorn River had about 10,000 Indians, with as many as 3,500 warriors.

On June 17, 1876, Crazy Horse led a group of 1,500 Lakota and Cheyenne against General Crook's force of 1,000 soldiers and 300 Crow & Shoshone warriors in the Battle of the Rosebud. This battle prevented Crook's forces from joining up with Custer's forces headed for the Little Big Horn.

On June 25, 1976, Custer's 7th Cavalry attacked the Indian village along the Little Big Horn River. He had assumed the Indians would run when attacked. Consequently, he deployed a battalion led by Captain Benteen to the left to prevent the Indians from escaping and ordered three companies led by Major Reno to attack the lower end of the village whereby the remaining forces led by Custer would provide support.

Just prior to the attack, Custer's Crow Indian scouts told him it was the largest Indian village they had ever seen. The scouts then changed out of their army garb and into their native dress whereupon Custer released them from his command.

"There are not enough Indians in the world to defeat the Seventh Cavalry." Gen. George Armstrong Custer

The first group to attack was Major Reno's three companies. They crossed the Little Bighorn and soon realized that the Lakota and Cheyenne were not running away. Soon warriors attacked Reno's men and forced them to retreat.

During this prolonged bloody confrontation, Crazy Horse led various assaults against Custer's main forces.

An Arapahoe who fought in the battle claimed Crazy Horse was "the bravest man I ever saw. He rode closest to the soldiers, yelling to his warriors. All the soldiers were shooting at him, but he was never hit."

A Sioux warrior said, "The greatest fighter in the whole battle was Crazy Horse."

When the dust cleared, the Lakota, Cheyenne and Arapaho had won an overwhelming victory over the 7th Cavalry. The Custer Battalion, a force of 700 men, suffered a severe defeat. Five of the 7th Cavalry's 12 companies were annihilated. The total U.S. casualty count was 268 dead, including Gen. Custer, and 55 injured.

Manifest Destiny was neither obvious nor certain. It was a choice, made by those who assumed they were superior to others, based on the color of their skin.

Perhaps they were mistaken -- perhaps they were simply self-centered, greedy people abusing their power.

Quote for the Day – "All we wanted was peace and to be left alone... If I ever pass away, the white man will take you under their custody as their wards." Crazy Horse

Bret Burquest is the author of 11 books. He lives in the Ozark Mountains with a few dogs and where destiny is a work in progress.

Sunday, June 7, 2015

State of Well-Being

According to Gallup-Healthways Well-Being Index, the 50 states are ranked based on "ranking of residents' satisfaction with their lives."

The top 10 states where residents are the most satisfied with their lives are:

1) Alaska
2) Hawaii
3) South Dakota
4) Wyoming
5) Montana
6) Colorado
7) Nebraska
8) Utah
9) New Mexico
10) Texas

The states where residents are the least satisfied with their lives are:

45) Alabama
46) Mississippi
47) Ohio
48) Indiana
49) Kentucky
50) West Virginia

While the top two states are isolated from the continental Lower 48, there seems to be a pattern here -- "middle-western" states are the most satisfied, whereas "middle-eastern" states are the least satisfied,

I have lived in the following states:

11) Minnesota
12) California
18) Wisconsin
20) Arizona
26) Florida
30) Georgia
32) Kansas
41) Missouri
43) Arkansas
44) Tennessee
47) Ohio

One of these days I might figure it out -- satisfaction is not a location, it is a state of mind.

Quote for the Day -- "Happiness is not a goal -- it's a by-product of a life well lived." Eleanor Roosevelt

Bret Burquest is the author of 10 books. He lives in the Ozark Mountains with a few dogs and where moving once again to another state is no longer an option.

Wednesday, May 27, 2015

One Hundred Years Ago -- 1915

The following took place in 100 years ago -- in 1915:

Jan 9 -- Pancho Villa (Mexico) signed a treaty with the USA halting border conflicts.

Jan 12 -- The U.S. House of Representatives rejected a proposal to give women the right to vote.

Jan 13 -- An earthquake in Italy killed some 30,000 people.

Jan 15 -- Japan claimed economic control of China.

Jan 18 -- A train crashed in Guadalajara, Mexico, killing 600 people.

Jan 19 -- The first neon tube sign was patented.

Jan 25 -- Alexander Graham Bell, inventor of the telephone, inaugurated transcontinental USA telephone service by placing a ceremonial call from New York to his former colleague Thomas Watson in San Francisco. --  “Leave the beaten track behind occasionally and dive into the woods. Every time you do, you will be certain to find something you have never seen before.” Alexander Graham Bell

Jan 28 -- The U.S. Coast Guard was founded by an act of Congress to assist distressed vessels at sea and halt contraband trade.

Jan 31 -- During World War I, the Germans used poison (chlorine) gas for the first time against the Russians, and German U-boats sank two British ships in the English Channel.

Feb 4 -- The Germans declared British waters to be part of the war zone whereby all ships would be sunk without warning.

Feb 8 -- The premier of "The Birth of a Nation" -- D. W. Griffith's silent movie about the U.S. Civil War.

Feb 10 -- The Germans captured 100,000 Russians in Lithuania. U.S. President Wilson denounced Britain for using U.S. flags on merchant ships to deceive the Germans.

Feb 12 -- Actor, Lorne Greene (Bonanza) was born in Ottawa, Canada.

Feb 12 -- The cornerstone for the Lincoln Memorial was laid in Washington, D.C.

Feb 20 -- President Wilson opened the Panama-Pacific Expo in San Francisco to celebrate the opening of the Panama Canal.

Feb 21 -- The 20th Russian Army Corps surrendered to Germany.

Feb 22 -- Germany began unrestricted submarine warfare.

Feb 23 -- Germany sank two U.S. ships and a Norwegian ship.

Feb 26 -- The Germans utilized the first flamethrowers in World War I.

Feb 28 -- Actor, Zero Mostel, was born in Brooklyn.

Mar 2 -- A Jewish military force was organized to fight in Palestine.

Mar 13 -- The Brooklyn Dodger baseball manager, Wilbert Robinson, attempted to catch a baseball dropped from an airplane, but the pilot substituted a grapefruit.

Mar 14 -- The British Navy sank a German battleship.

Mar 16 -- The U.S. Federal Trade Commission was formed.

Mar 22 -- A German Zeppelin made a night raid on a railway station in Paris.

Mar 25 -- A U.S. submarine sank off the coast of Hawaii, killing 21 sailors.

Apr 4 -- American blues musician, McKinley Morganfield, a.k.a. Muddy Waters, was born. -- "I been in the blues all my life. I'm still delivering 'cause I got a long memory."

Apr 5 -- Jack Johnson, U.S. heavyweight boxing champion since 1908, lost the heavyweight title to Jess Willard in Cuba, in the 26th round. -- “You don't always have to hold your head higher than your heart.” Jack Johnson

Apr 7 -- Jazz singer, Billie Holliday, was born. -- "If I'm going to sing like someone else, then I don't need to sing at all."

Apr 10 -- Actor, Harry Morgan, was born in Detroit, Mich.

Apr 21 -- Actor, Anthony Quinn, was born in Chihuahua, Mexico. -- "On stage, you have to find the truth, even if you have to lose the audience."

Apr 25 -- Australian and New Zealand troops landed in Turkey in a failed attempt to take the Ottoman Empire out of the war.

May 1 -- The luxury liner Lusitania sailed out of New York harbor on a voyage to Europe.

May 1 -- A German submarine sank a U.S. ship (Gulflight I).

May 5 -- Actress, Alice Faye, was born in New York City.

May 6 -- Actor and director, Orson Welles (Citizen Kane) was born in Kenosha, Wisconsin. -- “Style is knowing who you are, what you want to say, and not giving a damn.”

May 6 -- Writer and historian, Theodore H. White was born. -- “To go against the dominant thinking of your friends, of most of the people you see every day, is perhaps the most difficult act of heroism you can have.”

May 6 -- Baseball player, Babe Ruth, made his pitching debut with the Boston Red Sox against the New York Yankees, losing 4 to 3 in 15 innings -- he also hit a home run. -- “It's hard to beat a person who never gives up.”

May 7 -- The ocean liner, Lusitania, was struck by a torpedo fired by a German U-boat and sank off the coast of Ireland, killing 1,959 people, including U.S. millionaire, Alfred G. Vanderbilt.

May 12 -- Mary Kay Ash of Mary Kay Cosmetics was born. -- “The greatest pollution problem we face today is negativity.”

May 12 -- Croatians attacked and plundered Armenia, killing 250 people.

May 15 -- In Germany, chemist Clara Immerwahr, wife of chemist Fritz Haber, shot herself in the heart with her husband's revolver in their garden -- her husband had personally supervised the use of chlorine poison gas by the Germans in the battlefield against the Russians.

May 20 -- Moshe Dayan, Israeli general and Minister of Defense, was born. -- "Freedom is the oxygen of the soul."

May 23 -- Italy declared war against Austria and Hungary.

May 24 -- Thomas Edison invented a devise called the telescribe to record telephone conversations. -- "I have not failed. I have just found 10,000 ways that won't work."

May 27 -- Author, Herman Wouk (The Caine Mutiny), was born. -- “When in danger or in doubt, run in circles, scream and shout.”

May 31 -- A German Zeppelin made an air raid on London.

Jun 8 -- Woodrow Wilson's Secretary of State, William Jennings Bryan, resigned in a dispute of the U.S. handling of the sinking of the ocean liner Lusitania.

Jun 10 -- The Girl Scouts of America was founded.

Jun 12 -- International banker, David Rockefeller, was born. -- "We are part of a secret cabal working against the best interests of the United States… If that's the charge, I stand guilty and am proud of it."

Jun 14 -- An excursion steamer capsized at Chicago's Clark Street dock, killing more than 800 people.

Jul 10 -- Author, Saul Bellow (Pulitzer Prize & Nobel Prize) was born in Montreal, Canada. -- “I love solitude but I prize it most when company is available.”

Jul 24 -- An excursion ship capsized in Lake Michigan, killing 852 people.

Jul 28 -- By the authority of President Wilson, U.S. Marines landed at Port-au-Prince on the island of Haiti to safeguard the interests of U.S. corporations.

Jul 28 -- Some 10,000 blacks marched on 5th Avenue in New York City to protest lynchings.

Jul 30 -- A homemade bomb, made by a former Harvard professor who was upset by the private sales of munitions to the allies during World War I, exploded in the U.S. Senate Reception Room.

Aug 14 -- A German U-boat sank a British transport ship, killing some 1,000 people.

Aug 16 -- A hurricane hit Galveston, Texas, killing `12 people and causing an estimated $8 million in property damage.

Aug 17 -- In Cobb County, Georgia, a Jewish factory manager, Leo Frank, was lynched by a mob seeking justice for the killing of a 13-year-old girl who worked in his pencil factory. Although Leo Frank had been convicted of the crime, the governor of Georgia believed in his innocence and had commuted his death sentence in June.

Aug 19 -- A British ocean liner was sunk by German U-boats. Following this incident, Germany promised it would no longer torpedo merchant ships without warning because of fear the USA would be brought into the war. Some 16 months later, Germany once again announced it would "sink on sight" thereby bringing the USA into the war.

Aug 21 -- Italy declared war on Turkey.

Aug 27 -- Economist, Walter Heller, was born in Buffalo, NY. He would become the Chairman of the Council of Economic Advisors in 1961-1964 under President John F. Kennedy. Later, he was also a professor of Economics at the University of Minnesota where I was in one of his classes many moons ago.

Aug 29 -- Actress, Ingrid Bergman, was born in Sweden. -- “I was the shyest human ever invented, but I had a lion inside me that wouldn't shut up.”

Sep 4 -- The U.S. military placed Haiti under martial law to quell a rebellion.

Sep 21 -- Stonehenge was sold at auction for 6,600 pounds sterling ($11,500) to a man who bought it as a present to his wife. Three years later, he presented it to the British nation.

Sep 30 -- Lester Garfield Maddox was born. He would become Democratic governor of Georgia in 1967 to 1971. As a rabid segregationist, he gain his popularity as a restaurant owner who passed out axe handles to his white customers in an effort to prevent black customers from entering his establishment. Incidentally, I lived in Atlanta in 1966 to 1968 when I was a draftee in the U.S. Army at Third Army Headquarters during the Vietnam Era and Maddox was in the local governor's mansion -- his strange antics were often great fodder for daily TV news -- "That's part of American greatness, is discrimination."

Oct 8 -- During World War I, the Battle of Loos ended with virtually no gain on either side. Over 100,000 French, British and German men lost their lives in this encounter.

Oct 9 -- Woodrow Wilson became the first U.S. President to attend a World Series baseball game. -- “Some people have a large circle of friends while others have only friends that they like.”

Oct 16 -- Great Britain declared war on Bulgaria.

Oct 17 -- Author, Arthur Miller (Pulitzer Prize) was born. He married actress Marilyn Monroe in 1956 and they were divorced in 1961. -- “Maybe all one can do is hope to end up with the right regrets.”

Oct 21 -- The first transatlantic radio-telephone message was transmitted from Arlington, Virginia, to Paris, France.

Oct 23 -- Tens of thousands of women marched in New York City, demanding the right to vote.

Oct 30 -- The U.S. Secret Service captured two former Oakland policemen in Utah and Ohio after a 12,500 mile chase, and charged them with counterfeiting $100,000 in bogus $5 gold pieces.

Dec 12 -- Singer and actor, Frank Sinatra, was born in Hoboken, New Jersey. -- "The big lesson in life is never be scared of anyone or anything -- I'm gonna live till I die.”

Dec 16 -- Albert Einstein published his General Theory of Relativity. -- “When you are courting a nice girl an hour seems like a second. When you sit on a red-hot cinder a second seems like an hour. That's relativity.”

Dec 18 -- Widowed the previous year, President Woodrow Wilson married Edith Rolling Galt.

Dec 22 -- Yuan Shikai proclaimed the Empire of China and named himself the Emperor of China

Dec 31 -- The Germans torpedoed a British ocean liner without warning, killing 335 people.

* * *

World War One was originally called "The War to End all Wars" -- but once it became apparent that mankind was not exactly enlightened as a collective species, they began numbering future World Wars.

Life can be understood by examining the past, but it must be lived forward -- we are the products of our past, but we don't have to become prisoners of it.

All we have is now.

Quote for the Day -- "Life's under no obligation to give us what we expect." Margaret Mitchell

Bret Burquest is the author of 11 books. He lives in the Ozark Mountains with a few dogs and where yesterday is just a memory & tomorrow is never what it's supposed to be.