2009-02-16

OSO's debt watch

Public Debt on 2009-02-12:

$6.45 Trillion




US GDP in 2008 Q4:

$14.26 Trillion



Debt/GDP Ratio:

45.24%

[Debt ÷ GDP] x 100 )



Public Debt/Person:

$21,092.69

(Public Debt ÷ US Population)


2009-02-12|$6.45Tr|45.24%|$21,092.69
2009-02-05|$6.41Tr|44.94%|$20,949.72
2009-01-29|$6.31Tr|44.23%|$20,622.37
2009-01-14|$6.29Tr|43.63%|$20,553.13
2009-01-06|$6.32Tr|43.84%|$20,651.62
2008-12-30|$6.32Tr|43.86%|$20,664.55
2008-12-17|$6.42Tr|44.52%|$20,978.60
2008-12-10|$6.41Tr|44.45%|$20,952.05
2008-12-03|$6.43Tr|44.62%|$21,030.96
2008-11-26|$6.40Tr|44.38%|$20,936.85
2008-11-19|$6.36Tr|44.07%|$20,820.19
2008-11-12|$6.36Tr|44.07%|$20,821.75
2008-11-05|$6.30Tr|43.68%|$20,632.59
2008-10-29|$6.25Tr|43.73%|$20,459.01
2008-10-22|$6.19Tr|43.32%|$20,264.04

Sources:
Public debt is $6,453,765,915,043.27. Source
Latest GDP is $14,264.6 billion. Source
Population in November 2008 is 305,971,664. Source (Resident population plus armed forces overseas).

Notes:
* There has been a noticeable increase in public debt levels in February.
* Public debt has hit a record $6.45 trillion.
* Public debt/GDP ratio has hit a record of 45.24%.
* Public debt/person has hit a record of $21,092.69.
* Still waiting for latest census figures which should naturally lower debt/person.

2009-02-12



U2 have a new album out soon I hear...

2009-02-10

Abortion laws caused the Victorian fires

Well this is a novel concept:
“Yesterday (Monday 9th February 2009), the front page of the Herald Sun newspaper reported “The Darkest hour for Victoria”. A few months ago the news media should have reported “The darkest hour for the unborn” but unfortunately the “Decriminalization of Abortion bill” went through parliament and was passed, thus making many people call Victoria ‘the baby killing state of Australia,’” Mr (Danny) Nalliah said.

He said on November 7 last year we had sent out an email to our national network and a posting on our website (www.catchthefire.com.au) carried an urgent post titled, ‘STOP PRESS. URGENT PRAYER NEEDED REGARDING AUSTRALIA, ESPECIALLY THE STATE OF VICTORIA’ following a dream he had on the 21st of October 2008, which he shared with his team on 22nd October.

Following is an excerpt from the dream which was published in the article.

“In my dream I saw fire everywhere with flames burning very high and uncontrollably. With this I woke up from my dream with the interpretation as the following words came to me in a flash from the Spirit of God.

That His conditional protection has been removed from the nation of Australia, in particular Victoria, for approving the slaughter of innocent children in the womb.”

“We at CTFM have spent the last few days in prayer and weeping, watching the news and learning that more than 170 people have perished and more than 750 houses have gone up in flames with much property and personal belongings of people all wiped out within hours,” he said.

”Australia is based on Judeo-Christian values. How far have we as a nation moved from these principles instilled in our nation’s inception. How much does it take for a nation to return to God? The Bible is very clear, if you walk out of God’s protection and turn your back on Him, you are an open target for the devil to destroy.

“Can we stop the fires? Yes we can! But it will take God’s children to rally together and repent and cry unto Him as in 2 Chronicles 7:14 (The Holy Bible). We at CTFM have seen this happen several times in the past in Australia, which was also covered by many mainstream media outlets.”
*Sigh*. What can I say? This is exactly the sort of thing that gets my goat up.

You see, the reason is that I am an evangelical Christian. It's there in the blog title. To read how I became a Christian, click here. For a detailed explanation of my opinion on abortion (I am generally pro-life but with important differences to most pro-lifers), click here.

I've included those links in the previous paragraphs to point out to you all the substance of what I believe because I am about to give Nalliah a real serve about what he has done.

Many of you, I am sure, can remember back to the dim dark days following 9/11. One thing you might remember is when evangelical leader Jerry Falwell said this:
"I really believe that the pagans, and the abortionists, and the feminists, and the gays and the lesbians who are actively trying to make that an alternative lifestyle, the ACLU, People For the American Way, all of them who have tried to secularize America. I point the finger in their face and say 'you helped this happen.'"
Of course, such a statement was made during a time of great grief and anger and Falwell later apologised for it, though it was one of those "I'm sorry you feel this way" apologies.

Danny Nalliah's recent comments are similar in tone. They blame a disaster upon the presence of moral evil within society. So, in Falwell's case, it was Paganism + Abortion + Homosexuality = God removing His protection = Terrorists destory the World Trade Center. In Nalliah's case, it is Victorian Abortion Laws = God removes His protection = Fires that kill nearly 200 people.

I'm not going to approach this from the typical perspective (ie the guy's statement is insensitive and shows how horrible he is) because that is a given in this case. No, I'm going to approach this from a Christian and Biblical perspective, to show from that perspective how wrong he is.

Central to Nalliah's belief is his interpretation of 2 Chronicles 7.14, which says:
When I shut up the heavens so that there is no rain, or command the locust to devour the land, or send pestilence among my people, if my people who are called by my name humble themselves, and pray and seek my face and turn from their wicked ways, then I will hear from heaven and will forgive their sin and heal their land. (ESV)
I've included verse 13 in that quote to show you exactly what is going on. This is a statement by God made to King Solomon after the temple has finally been dedicated. What we see here are two very important things:
  1. God is speaking to King Solomon.
  2. God is speaking about the nation of Israel.
Now the thing about interpreting the Bible is to ensure that you don't misinterpret words or commands. The Bible is not a magical quote machine. You don't open the Bible up and point at a random verse looking for direct guidance. When the Bible is being read, it needs to be read according to its literary genre, which is often quite plain.

There's the great story of someone who opens the Bible and plunks his finger down to find the verse "Judas hung himself". Confused, he then opens it again and plunks his finger down again. This time the verse says "Go and do likewise". Is God ordering him to commit suicide? Or is the man being stupid?

So when Danny Nalliah comes to this passage what does he assume?
  1. God is speaking to Australians.
  2. God is speaking about Australia.
Now that is a really long bow to draw. When Nalliah says that abortion causes deadly bushfires he is saying that the "land" in 2 Chronicles 7.13-14 is Australia. But it isn't. The land is Israel. Moreover, you can't make the association without doing violence to the text. Ancient Israel was, according to the Bible, God's special people who lived in the land God gave them under the rules that God gives in the Old Testament. But when we read the Old Testament we discover that God has chosen to create a "New Covenant" because Israel has broken the old one. This "New Covenant" is explained by the Apostles of Jesus as faith in Christ. In other words, Israel as God's special people has been replaced by the Church. This idea is called supersessionism and is found in places like Galatians 3.29, which says:
if you are Christ’s, then you are Abraham’s offspring, heirs according to promise.
"If you are Christ's" = being a Christian.
"Abraham's Offspring" = the nation of Israel.
"heirs of the promise" = the promise God made to Abraham and Israel also applies to Christians.

Therefore, the concept of "Israel" post-Christ is no longer a political and geographical entity, but a "spiritual nation" that is the universal church.

When it comes to reading 2 Chronicles, therefore, we can interpret it to mean that Israel's relative safety has a lot to do with their covenant keeping. If Israel does not keep the covenant, God will take away his protection from them. That is very clear from the passage. Yet what we see in the Old Testament is God's covenant people NOT keeping the covenant, and disaster befalling them as a result (including political division, invasion and eventual exile by the Assyrian and Babylonian empires).

But does the passage mean the same today? If Australia were to, for example, outlaw abortion, homosexuality and paganism, would God bless us with prosperity and happiness and spiritual utopia? But what if Australia did not do this? Are we going to be visited by more fires and earthquakes and terrorists attacks if we don't outlaw abortion, homosexuality and so on? No. Of course not. For the passage to be applicable today, the "Israel" ("land") spoken to in 2 Chronicles 7 is replaced not by the nation of Australia, but by the church. It is the church who will suffer if they do not keep the covenant, not Australia, not Britain, not America.

Of course, supersessionism (and, by implication, Covenant Theology and Biblical Theology) is not always held by Christians, meaning that Nalliah is probably one of those who still place some level of emphasis upon Israel.

Yet there remains a real problem with Nalliah's understanding of how God blesses people. Western Europe is one of the most secular places in the world, with liberal abortion laws and societal acceptance of them. What disaster has befallen Europe? Even considering the latest financial distress, Western Europe is one of the safest and most prosperous places in the world, and they do that without honouring God. You can say the same thing about Japan, which is full of non-Christians and non-Christian thinking. Conversely, Ireland, where abortion is illegal, is collapsing economically. Moreover, nations with very conservative abortion laws are often developing nations whose economy and society have not necessarily been improving because of their "godly" abortion laws. In other words, there is no actual empirical evidence which suggests that nations who have outlawed abortion are socially and materially superior than those who allow abortion.

There is in eastern philosophy the concept of Karma. This idea has been appropriated and distorted by Western culture and has also infiltrated the church including, I might add, the thinking of evangelical leaders like Danny Nalliah. This Westernised bastardisation of Karma can be best described as "what goes around comes around". In other words, a person who does bad things will experience bad things in return. So when Nalliah says "the state of Victoria allows Abortion, so God takes away His protection and Victoria suffers bushfires" (my paraphrase), he is merely repeating the bastardised, western idea of Karma and applying it to Christianity (syncretism).

The reality is that rain falls on the good and bad alike (Matthew 5.45). Moreover, Jesus points this out in Luke 13.1-5:
There were some present at that very time who told him about the Galileans whose blood Pilate had mingled with their sacrifices. And he answered them, "Do you think that these Galileans were worse sinners than all the other Galileans, because they suffered in this way? No, I tell you; but unless you repent, you will all likewise perish. Or those eighteen on whom the tower in Siloam fell and killed them: do you think that they were worse offenders than all the others who lived in Jerusalem? No, I tell you; but unless you repent, you will all likewise perish." (ESV)
What Jesus is saying here is that those who suffered particular horrible deaths did not suffer so because of some particular sin in their lives. He also points out that judgement is universal and that everyone should repent - from the worst sinner to the least sinner. In conjunction with my critique of Nalliah's beliefs, Jesus' words here completely negate Nalliah's understanding of 2 Chronicles 7 while reinforcing my argument that the 2 Chronicles passage can only be applied today in reference to the church (eg 1 Corinthians 11.30).

One thing which I have not addressed here is Nalliah's "vision of fire" which he believed was a message from God reinforcing this idea that Victorian abortion laws = God removing His protection = deadly bushfires. All I can say is that even the Prophet Jeremiah heard this from God:
"The prophets are prophesying lies in my name. I did not send them, nor did I command them or speak to them. They are prophesying to you a lying vision, worthless divination, and the deceit of their own minds.
Ironically, this quote (from Jeremiah 14.13-16), is one of those passages in which God portends suffering and judgement for Israel for not keeping his covenant. In the context of what I have been arguing, such a passage speaks volumes for today's church who follow dreamers like Danny Nalliah rather than following the Word of God. Nalliah may be rightly concerned about abortion, but his dreams and his erroneous interpretation of the Bible have led him to say things which have hurt the families of the dead and injured while simultaneously bringing disrepute to the church and to God. I call on Danny Nalliah to repent.

2009-02-09

OSO's debt watch

Public Debt on 2009-02-05:

$6.41 Trillion




US GDP in 2008 Q4:

$14.26 Trillion



Debt/GDP Ratio:

44.94%

[Debt ÷ GDP] x 100 )



Public Debt/Person:

$20,949.72

(Public Debt ÷ US Population)


2009-02-05|$6.41Tr|44.94%|$20,949.72
2009-01-29|$6.31Tr|44.23%|$20,622.37
2009-01-14|$6.29Tr|43.63%|$20,553.13
2009-01-06|$6.32Tr|43.84%|$20,651.62
2008-12-30|$6.32Tr|43.86%|$20,664.55
2008-12-17|$6.42Tr|44.52%|$20,978.60
2008-12-10|$6.41Tr|44.45%|$20,952.05
2008-12-03|$6.43Tr|44.62%|$21,030.96
2008-11-26|$6.40Tr|44.38%|$20,936.85
2008-11-19|$6.36Tr|44.07%|$20,820.19
2008-11-12|$6.36Tr|44.07%|$20,821.75
2008-11-05|$6.30Tr|43.68%|$20,632.59
2008-10-29|$6.25Tr|43.73%|$20,459.01
2008-10-22|$6.19Tr|43.32%|$20,264.04

Sources:
Public debt is $6,410,020,405,165.47. Source
Latest GDP is $14,264.6 billion. Source
Population in November 2008 is 305,971,664. Source (Resident population plus armed forces overseas).

Notes:
* 44.94% Public Debt/GDP ratio is the highest recorded since I began this debt watch.
* Waiting for latest census figures.

Who controls the US Dollar?

Not the White House; not Congress; not the Federal Reserve.

Rather, the Bank of Japan and the People's Bank of China. Source.

The only thing keeping the US Dollar at its current valuation are foreigners.

How long will it be before the politicians and economists in Japan and China see such a situation as unprofitable?

John Christie

Sorry I didn't get back to you re: Cricket. Thanks for the offer but I'm rather busy at the moment, especially with an increasingly sick mother-in-law.

(John lives in Newcastle and is one of the few people I actually know personally who reads my blog regularly)

Australia on Fire

By now you would've heard the news of severe wildfires here in Australia - it is one of the top news stories around the world at the moment. So far 107 people have been confirmed dead and over 750 homes lost in Australia's greatest bushfire tragedy.

Fortunately for me and my family, we are located about 1000km (620 miles) away from this tragedy. Nevertheless we have suffered 12 days in a row of temperatures exceeding 30°C (86°F). Our grass is brown and leaves are wilting. Today is the first day of sub-30 temperatures and rain is predicted in the next few days, which is good news.

Bushfires (what Australians call wildfires) are a natural hazard. Australia is a dry continent and bushfires are a common occurrence. Our history is replete with deadly bushfires dating back to the 19th century.

Until the weekend, Australia's deadliest Bushfire was the Ash Wednesday fires in 1983. Spread across two states (Victoria and South Australia), these fires killed a total of 75 people - 47 in Victoria and 28 in South Australia. The Ash Wednesday fires were an important step in changing Australian fire-fighting, especially in regards to bushfires.

One of the most important things that was discovered during the months of examination that followed was that many of the dead were found in their burnt-out cars. From this they deduced (quite rightly) that there was a greater chance of survival if people stayed with their homes rather than evacuating at the last minute.

Another important discovery was that the earlier communities were advised of danger, the more likely they were to survive. This was because people either evacuated early, or were able to prepare their houses in time to face the onslaught.

Along with more advanced fire fighting techniques, aided by more accurate meteorological information and satellites, bushfires in Australia became less life-threatening. Here's a list of Australia's major bushfires and their death toll:

1898 Red Tuesday: 12 dead.
1939 Black Friday: 71 dead.
1967 Black Tuesday: 62 dead.
1983 Ash Wednesday: 75 dead.
1994 Sydney Bushfires: 4 dead.
2003 Canberra Bushfire: 4 dead.

I lived in Sydney In 1994 and I clearly remember those fires. All three major highways out of Sydney were affected, leaving Sydney essentially cut off from the rest of Australia for a number of days. Ash fell onto our lawn and I even picked up a carbonised gum leaf that had obviously travelled from the fires many kilometres to our house in Merrylands (which was nowhere near the fires). I remember riding my motorbike on the raised section of the M4 motorway and glancing North, South and West and seeing huge plumes of smoke in the distance from the three fires that threatened Sydney.

And yet, despite the massive danger these fires posed, and despite all the houses destroyed, early warnings and more detailed data helped to reduce the 1994 death toll to just 4.

So it is therefore with a great sense of surprise and sadness that I learn of the deaths of so many in Victoria on Saturday. Obviously there will be a Royal Commission into what transpired in Victoria and this inquiry will expose any human error. Knowing this, though, I do suggest that a number of problems have already been exposed:
  1. People died in their cars. As I stated before, evacuating at the last minute was shown to be more fatal than staying with your property as the fire hit. That was one of the discoveries made after 1983. Why then, in the year 2009, were people doing this? I had always believed that people who lived in bushfire prone areas had had this fact drilled into them and told to either evacuate early or stay with your home. Yet in Victoria 2009, many people died in their cars. This suggests a number of things, including the potential failure of authorities to educate people.
  2. People said they had no warning. As I watched the network news reporting, I was stunned to hear story after story of survivors in tears as they explained just how quick and devastating the fires were, and how unprepared they were for their onslaught. Why was this the case? When residents are notified early enough, people can evacuate sooner or prepare for the worst. From what I can gather, some people were only aware of the impending disaster once their house caught fire. The fact that so many were unprepared could be because fire authorities did not notify residents quickly enough, or if they did, then only in some places and not in others. One of the more damning pieces of evidence was that Victorian fire authorities announced on Friday - the day before the bushfires - that weather conditions on Saturday were very much like the 1983 fires. In other words, people knew before the fires struck that a potential disaster could take place. Yet despite this announcement to the entire state on Friday, people on Saturday were unprepared.
Having said all this, it is also possible that weather conditions were so severe and so unique that no amount of preparation or skill in command and control or communication could have saved the 107+ confirmed dead. In this case, the disaster is simply an uncontrollable act of nature that could not have been avoided nor mitigated. Part of me hopes that this is the case, yet the idea that bushfires - a natural Australian phenomenon - should somehow become more unpredictable and severe than normal is questionable. The human element - notably a failure in communication - is likely to be a major factor in the deaths resulting in these fires.

2009-02-07

Unemployment 7.6%

Direct download here (pdf 194.9kb).

Notes:
  • Highest rate of unemployment since September 1992, which was also 7.6%.
  • The last unemployment peak was 7.8% in June 1992.
  • The last time unemployment reached 8.0% was January 1984.
  • The postwar unemployment peak was 10.8% in November and December 1982.
  • Unemployment has increased from 4.9% in January 2008 to 7.6% in January 2009. That's a 250 basis point year-on-year increase. The last time that happened was between October 1981 and October 1982, when unemployment increased from 7.9% to 10.4% - 250 basis points. It should be noted that such a movement in the unemployment rate over a 12 month period is more damaging if the original level was low. This means that the current increase is more damaging than the 1981-82 increase. Source.
  • A 390 basis point increase occurred between May 1974 (5.1%) and May 1975 (9.0%).
  • Reuters says that the 598,000 increase is the worst in 34 years (1975).

2009-02-05

Borrowing our way out of debt?

Obama is gunning for the stimulus and the Republicans are trying to stop it. Confirming yet again that Australia follows America's lead in everything, our centre-left Labor Party is gunning for our own stimulus while the conservatives are trying to stop it. It the situation weren't so serious it would be funny.

Many regular readers know that I run a (semi) weekly report on the state of public debt in the US. The facts are not pretty - public debt in the US in the days since my last report has now exceeded 44.6% of GDP. ($6.36 Trillion debt ÷ $14.2646 trillion GDP x 100 = 44.61), which is the second highest reading since I began these reports.

But why worry about debt? Some people think that debt doesn't really matter because everything balances. From an accounting perspective this is true, yet increasing levels of debt will ultimately lead to either long term tax increases or long term spending cuts or a combination of the two. The only other alternative would be inflationary money printing or just keep borrowing.

We need to remember that "crowding out" will still occur. In a faltering economy like now, such an action may not seem worrisome (investment has pretty much stopped) but over the long term it is. The more money the economy invests in Government bonds, the more the US government puts on the national credit card.

And the more money put on the card now, the more that will be needed to pay off in the future.

Economists often talk about "the paradox of thrift" as though it were an axiom not worth debating. The idea behind the "paradox of thrift" is that when an economy suddenly shifts from a spending culture to a saving culture, the result ends up being an economic downturn and, as a result, less money saved. While this is true, I would also suggest that "The paradox of spending" should also apply, namely that when an economy spends too much, it eventually results in the inability to spend.

All things being equal, of course, running a deficit and even having a stimulus package is not necessarily a bad thing. The problem is that Keynes prescribed fiscal surpluses to balance out these deficits. Since the US government has been running the opposite of Keynesian fiscal policy since, well, since Reagan, the result has been a growing level of public debt. At this point economic common sense begins to take over, in which it is obvious that if a person just keeps living on credit, a time will come when he has to pay it back or go bankrupt. Governments - even those with the power to create money - just can't ignore this simple economic fact.

With Public Debt over 44.6% of GDP, I do not think that there is much room for the US Government to run a stimulus package of the size currently trying to passed through congress. Moreover, I don't think the previous stimulus package (the Bernanke/Paulson one supported by Bush) was a good idea either.

Now travel in your mind's eye here to Australia. Although unemployment here is still relatively low (4.5% compared to 7.2% in the US) only a fool would think that our little nation is somehow insulated from the crisis engulfing the world. Rudd is trying to push a new stimulus package as a typical Keynesian way to help mitigate the crisis. What is my opinion? I think it's a good idea - and the reason is because net Public Debt in Australia is negative. There is plenty of room for the Australian government to spend big without much fear that it go out of control (unless they go all Whitlam again).

Yet America's fiscal situation, already worrisome before the crisis hit, is likely to counter the effects of the stimulus plan far more than the Republicans can do in Congress.

As a result, I'll simply return to the prescriptions outlined in the Washington Consensus, which I have written previously and write here again:
  • Cut military spending
  • Raise taxes on the rich
  • Run a fiscal surplus to pay off debt
  • Use interest rates to keep inflation low
  • Re-regulate the financial industry to prevent such a crisis from occurring again
  • Fire Ben Bernanke
  • Create a universal health care system that will cut present health costs
I am reasonably certain that, in hindsight, my prescriptions here (which are lifted from the Washington Consensus and applied to the US government in the present) will be the ones most future historians and economists will say should have been applied.

2009-02-02

OSO's debt watch

Public Debt on 2009-01-29:

$6.31 Trillion




US GDP in 2008 Q4:

$14.26 Trillion



Debt/GDP Ratio:

44.23%

[Debt ÷ GDP] x 100 )



Public Debt/Person:

$20,622.37

(Public Debt ÷US Population)


2009-01-29|$6.31Tr|44.23%|$20,622.37
2009-01-14|$6.29Tr|43.63%|$20,553.13
2009-01-06|$6.32Tr|43.84%|$20,651.62
2008-12-30|$6.32Tr|43.86%|$20,664.55
2008-12-17|$6.42Tr|44.52%|$20,978.60
2008-12-10|$6.41Tr|44.45%|$20,952.05
2008-12-03|$6.43Tr|44.62%|$21,030.96
2008-11-26|$6.40Tr|44.38%|$20,936.85
2008-11-19|$6.36Tr|44.07%|$20,820.19
2008-11-12|$6.36Tr|44.07%|$20,821.75
2008-11-05|$6.30Tr|43.68%|$20,632.59
2008-10-29|$6.25Tr|43.73%|$20,459.01
2008-10-22|$6.19Tr|43.32%|$20,264.04

Sources:
Public debt is $6,309,860,670,347.08. Source
Latest GDP is $14,264.6 billion. Source
Population in November 2008 is 305,971,664. Source (Resident population plus armed forces overseas).

Notes: Sorry for lateness!