2009-06-03

Iraq was invaded because of 9/11

While Bush and Cheney may have prevaricated in saying outright that Iraq should be invaded because they were involved in 9/11, the text of the Authorization for Use of Military Force Against Iraq Resolution of 2002 makes it very, very clear:

*Whereas members of al Qaida, an organization bearing responsibility for attacks on the United States, its citizens, and interests, including the attacks that occurred on September 11, 2001, are known to be in Iraq;

*Whereas Iraq continues to aid and harbor other international terrorist organizations, including organizations that threaten the lives and safety of United States citizens;

*Whereas the attacks on the United States of September 11, 2001, underscored the gravity of the threat posed by the acquisition of weapons of mass destruction by international terrorist organizations;

*Whereas Congress has taken steps to pursue vigorously the war on terrorism through the provision of authorities and funding requested by the President to take the necessary actions against international terrorists and terrorist organizations, including those nations, organizations, or persons who planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such persons or organizations;

*(2) acting pursuant to this joint resolution is consistent with the United States and other countries continuing to take the necessary actions against international terrorists and terrorist organizations, including those nations, organizations, or persons who planned, authorized, committed or aided the terrorist attacks that occurred on September 11, 2001.


Of course, this resolution was passed by a Republican congress and signed off by George Bush. Could it be any clearer?

Public Debt exceeds 50% of GDP

For those who were following my public debt watch:

GDP = $14.0897 Trillion (source)
Public Debt = $7.09786167767201 Trillion (2009-06-01)
Debt/GDP ratio = 50.38%
Population = 306,749,445 (Resident Population + Armed Forces Overseas, 2009-05-01)
Public Debt / person = $23,138.96

2009-05-19

Oil $60

Another one of my predictions for 2009 has been fulfilled - though technically the rise has more to speculation than with a falling dollar (which was my predicted reason for the rise - though the dollar has been dropping a bit lately).

Oil above $60 on US economy hopes.

2009-04-14

Enforced Hiatus

Yes - I know I haven't been blogging. But family issues have been getting in the way.

As many long term readers know, my Mother-in-law has cancer. She has been valiantly battling this for some years and has lived longer than the experts predicted. However she is now at a point where she can no longer look after herself.

Additionally, our landlords were finally able to sell their house, which means that we have been given notice to leave so the new owners can move in.

The only reasonable thing we can do, therefore, is move in with Judy - a process that will both help her and help us. The problem is that her house is not really big enough for 3 adults and 2 children. So we are in the process of packing our stuff to be put into storage while taking the bare minimum with us to Judy's place.

With these concerns in mind, I haven't really been able to blog much. Since our next abode will be a tight squeeze, I may not have enough time to devote to blogging and commenting.

So I will have to stop blogging for a while. How long? I don't know. Make sure you keep my site on your bookmarks and check back on a weekly basis to see how things are going because it is my intention to continue blogging once things get a little easier.

Make sure you keep up with my 25 predictions for 2009.

I wish to reiterate again my firm opinion that the US dollar is poised for devaluation and that capital flight will occur. Given that this is the case, I am not very supportive of Barack Obama's stimulus plan since I believe that it might drive the US government to the brink of bankruptcy - and I say this not as a conservative but as a political progressive who is very glad that George Bush is no longer president.

As I have said before, borrowing and spending in order to solve a problem caused by too much borrowing and spending is not a logical solution to the current economic crisis. Obama and Congress may have inherited a debt-ridden Federal government caused by stupid Republican decisions, but that doesn't give them the right to make it even worse.

The inevitable result of US government debt reaching stratospheric levels will be an erosion in the faith of the US dollar. Once the dollar has crashed, the result will be something I describe as "financial armageddon". If you think 10% unemployment and -5% GDP is bad, think of how much worse it would become with a surge in inflation and/or an increase in interest rates.


2009-03-30

Wrong Move Singapore

Bloomberg:
The Monetary Authority of Singapore may devalue the city’s currency and allow it to drop 4 percent against the U.S. dollar by June 30 to aid exporters and lift the economy out of the worst recession since independence in 1965.

The central bank will shift the mid-point of the Singapore dollar trading band at a twice-yearly review in April, according to 15 of 17 economists surveyed by Bloomberg News. The currency is “extremely and ridiculously overvalued,” Patrick Bennett, Asia foreign-exchange strategist at Societe Generale SA in Hong Kong, said last week.
Like many nations, Singapore's GDP is contracting. The problem with Singapore is that, like Japan, it has an economy based far too much on manufacturing and exports. Singapore's current account surplus is 15.4% of GDP, which indicates a currency that I would describe as "extremely and ridiculously undervalued".

Singapore wants to boost its economy by devaluing its currency to make its exports cheaper and more competitive. This is precisely the wrong move. Instead, Singapore should be trying to boost its own consumption, which will happen as the currency increases, rather than decreases in value.

Look, the logic on this is very simple. If a country has been running an unsustainable current account deficit (such as the US) then they should NOT be focusing upon boosting internal demand but upon boosting external demand. But if a country is running an unsustainable current account surplus (Japan, China, Singapore), then the best way to boost their economy is through increasing internal demand.

Put simply, the savers need to spend while the spenders need to save.

The US needs to re-jig the economy so it borrows and consumes less and saves and produces more. Producer nations like Singapore need to re-jig their economies so they borrow and consume more, and save and produce less.

Singapore is not helping anyone in this move - not least itself.

2009-03-26

Thoughts on the impending collapse of the US Dollar

Of all countries in the world, none has the same knee jerk, reds-under-the-bed, the sky is falling attitude towards raising taxes as America does.

Some might argue - and with good reason - that raising taxes during a recession is a bad idea. However, when you consider that current estimates of the budget deficit exceed 10% of GDP, what else can you do?

It's all very well to say that Roosevelt ran deficits back in the 30s that helped stimulate the economy - but back then budget deficits were hovering around 3-5% of GDP.

According to "Historical Tables of the FY 2009 Budget", there was only one time since 1930 in which the US government ran budget deficits in excess of 10% of GDP, and that was between 1942 and 1945.

With the budget deficit likely to exceed 10% of GDP, the United States is embarking on a fiscal situation that rivals the Second World War, and exceeds that of any year of the Great Depression.

According to recent stats from The Economist magazine, four nations are expected to have budget deficits in excess of 10% this year. They are the United States (13.7%), Britain (11.3%), Ireland (12.4%) and Iceland (12.6%).

Huge deficits of the size being predicted cause international investors to baulk. In the case of Iceland, investors pulled out and caused the Krona to crash. This has resulted in inflation nearing 20% in Iceland.

The Pound is already taking a pounding over Britain's increasingly unstable economy, while Ireland's financial troubles are fortunately subsumed by their adoption of the Euro.

In short, the huge budget deficit that the US is running will end not in a boost to the economy but result in the ruin of the US Dollar.

2009-03-24

ISO 8601 - it's time to conform

Okay people, enough individuality and freedom of choice - It's time to conform to standards.

This is a command from me, to you, on behalf of common sense.

It's time to use


ISO 8601


in our date usage.

What is the date today?

In Australia, it is 24/3/09

In the US, it is 3/24/09

According to ISO 8601, it is


2009-03-24


That is, yyyy-mm-dd.

This guy says some good stuff
:
I believe that the yyyy mm dd order, going from big to small, is the natural way to write dates. My reasoning is that we almost always use a descending unit size order when we combine a number of different unit sizes of the same quantity. For example, when we write a price, we start with dollars and then go to cents, i.e. from big to small, as in $12.34.

And when you measure your kitchen for new floor covering, you measure (say) 2345 mm by 1840 mm, and then change to metres to order your material (2.345 x 1.890 = 4.432 square metres). Again, you write from big (metres) to small (millimetres). We’ve always done this. Consider the same kitchen floor using the (fortunately now obsolete) yards, feet, inches and fractions of an inch. In this case the floor would be 2 yds (big) 1 ft. 6 5/16 in. (small) by 2 yds 0 ft 2 13/32 in. I leave this calculation to others!

Indeed, our very numbering system uses the same order of big to small. Consider the number 543; the 5 hundreds (big), come before the 4 tens, and the 3 units (small) are last.

Once you adopt the numerical descending method for writing dates you make some interesting discoveries. The yyyy mm dd format:
  • is preferable for sorting, filing and retrieving documents in date sequence. This is especially useful with computer files.

  • makes calculations of elapsed time very much easier, especially for date calculations such as those used for the amount of interest on an investment.

  • combines rationally with hh mm sss of time when you need more precision.

So... change your blog settings, change your calendar settings, change the way you write formal letters.

- OSO 2009-03-24 09:50:16Z

PS, for strftime, use %F %a

Gingrich - a more important conservative than Reagan

Think back to all the presidents since Jimmy Carter. Which of these presidents is considered an icon by political conservatives? There's no doubt that Ronald Reagan would top the list. As for the president most loathed by conservatives, there's no doubt that Bill Clinton would be nominated - though Carter does come a close second.

But what do political conservatives want? If we ignore the "fluff", the basic desire of political conservatives is to reduce the size of the Federal government and to ensure that government spending is responsible.

Yet when we look at the raw statistics (Historical Tables of the FY 2009 Budget, PDF, 2.4 Mib), a rather strange thing occurs. Here is a table (based upon table 1.2 from the document) which averages out the levels of government spending and government debt over the terms of each president since Jimmy Carter:



Well whaddya know? Ronald Reagan presided over the largest Federal Government and the highest level of government debt. By contrast, Clinton presided over the smallest Federal Government (for all intents and purposes) and the smallest increase in government debt. You'd think from evidence like this that Reagan was the spendthrift while Clinton was the conservative darling - yet in the Bizarro world of conservative politics, the opposite is the case.

The problem is that conservative politics since Reagan seems to have focused solely upon taxation - and thus government revenue. Reagan did, of course, make some big tax cuts but there was no commensurate reduction in spending that accompanied such cuts. The result ended up being a Federal government that actually increased its spending as a proportion of GDP while simultaneously increasing government debt as a result. Moreover, those levels of debt were huge.

Of course we need to remember that government spending is also the responsibility of Congress. Thus if we were to criticise or praise certain presidents over their fiscal performances, we need to do the same with congresses and the party that controlled them.

During Reagan's term as president, the 97th, 98th and 99th Congresses had Republican Senates and Democrat Houses. Both houses of the 100th Congress were Democrat, and the average Federal outlay for those two years (1988-1989) was 21.45% of GDP, while debt averaged -3.15% of GDP - both lower than Reagan's 8 year average.

Of course, Democrats were hardly blameless during George HW Bush's term in office with both the 101st and 102nd Congresses being controlled by Democrats and overseeing, with Bush, no reduction in the size of government and no reduction in debt.

But if Ronald Reagan was the Republican Party's number one hero of the past 30 years, the number two would have to be Newt Gingrich and the 104th Congress. Whatever faults conservatives have today with Gingrich and the 1994 "Republican Revolution", there is much to praise them for as well.

On the surface, Gingrich's Republican Congress and the Democrat Clinton in the White House were at odds from day one. Beginning with the 1995 Federal Government shutdown and ending with the impeachment of Clinton, it is unlikely that any period during the 20th century saw such animosity and divisiveness between the executive and legislative branches of government.

Nevertheless, the stats do tell a striking story. Clinton and the Gingrich Republicans actively reduced the size of government while simultaneously cutting back on debt.

Yet this did not continue. Between 2001 and 2006, the Republicans controlled both houses of congress as well as the White House itself. While spending remained relatively tight over the course of Bush's presidency (spending which would've been smaller had not war intervened), the tax cuts he sponsored, that were approved by the Republican congress, ended up putting the government back into debt once more. By the time the Democrats retook congress in 2006, economic conditions had deteriorated and debt levels began to soar again.

Now as a political progressive who has no problems at all in increasing the size of government, I obviously do not align myself either with the Republicans of today, or those in the 1990s, or even those in the 1980s. What I do respect, though, is the ability to maintain one's political stance through practice.

The Republicans of the 1980s and 2000s are, to my mind, not really conservatives. 80s Republicans preached government restraint while overseeing a huge increase in the size of government and in government debt. 2000s Republicans oversaw a smaller sized government but didn't reduce it, while also adding to the levels of debt.

Increasingly, the 1990s will be seen as a golden period for political conservatives - despite the fact that Clinton inhabited the White House. Apart from the glory of the 1994 mid term elections, the shenanigans that followed it and the popularity of the Republican party over the next decade, there is no doubt that conservatives actually did achieve what they set out to do. The budgetary statistics prove that beyond doubt. And for that I grudgingly (and through gritted teeth) respect them.

In short, who should Republicans look back to as an icon? Not Reagan and not Bush (either of them), but to Gingrich.

2009-03-19

A thought

Ben Bernanke is trying to wage war against the Great Depression.

The problem is, as many prospectuses say, "past performance is not an indicator of future performance".

I don't think Bernanke is factoring in the great possibility of capital flight from the US - a process that would leave the US Dollar in tatters.







2009-03-18

More interesting US Budget information

Some more stats for you, courtesy of "Historical Tables of the FY 2009 Budget":

--------

2001 Budget Outlay (M$): $1,863,190 (18.5% of GDP)

2008 Budget Outlay (M$): $2,931,222 (20.0% of GDP)

Increase in budget during Bush's term of office ($M): $1,068,032.

Percent increase in Federal Spending during Bush's term of office: 57.32%


--------

1993 Budget Outlay ($M): $1,409,522 (21.4% of GDP)

2000 Budget Outlay ($M): $1,789,216 (18.4% of GDP)

Increase in Budget during Clinton's term of office ($M): $379,694

Percent increase in Federal Spending during Clinton's term of office: 26.94%

--------

1989 Budget Outlay ($M): $1,143,829 (21.2% of GDP)

1992 Budget Outlay ($M): $1,381,649 (22.1% of GDP)

Increase in Budget during GHW Bush's term of office ($M): $237,820

Percent increase in Federal Spending during GHW Bush's term of office: 20.79% (4 years)

--------

1981 Budget Outlay ($M): 678,241 (22.2% of GDP)

1988 Budget Outlay ($M): 1,064,481 (21.3% of GDP)

Increase in Budget during Reagan's term of office ($M): $386,240

Percent increase in Federal Spending during Reagan's term of office: 56.95%

--------

1977 Budget Outlay ($M): 409,218 (20.7% of GDP)

1980 Budget Outlay ($M): 590,941 (21.7% of GDP)

Increase in Budget during Carter's term of office ($M): $181,723

Percent increase in Federal Spending during Carter's term of office: 44.41% (4 years)

--------

Conclusions:
  • All Presidents ended their term with budgets bigger than when they started.
  • The President that oversaw most significant reduction of federal spending (as a percentage of GDP) was Clinton, who reduced spending from 21.4% of GDP to 18.4% of GDP.
  • The President that oversaw the most significant increase of federal spending (as a percentage of GDP) was George W. Bush, who increased spending from 18.5% of GDP to 20.0% of GDP.