All, right, deficits are bad. No argument about that from me. Taxes can damage the economy. Again, I agree wholeheartedly. Now, Tea Party, tell me how you’re going to rein in deficits and cut taxes without bringing on a catastrophe to make the events of the 1930s seem like the “Not All That Bad Depression.”

The Tea Party is too little, too late. Yes, we fear deficits, but what politician is going to vote to dismantle entitlement programs? How are we going to get rid of entrenched politicians when the interest groups backing them have put so much money into discrediting their opponents? And how do we know if the replacements the Tea Party puts forward are mentally sound?

In War, Politics, and Insanity, C.S. Bluemel put forward the idea that many of the world’s politicians, particularly the populist ones, are certifiably insane. They grew up with hard lives and became rebellious mavericks – psychotic mavericks. The book was written in 1949, so the author was thinking of Hitler, Mussolini, and Stalin, not Palin. The comparison still applies. The danger of populism is that it attracts leaders just like the common man that believe in themselves to the point of megalomania. My final question for the Tea Party is this: beyond your economic solution, how will you keep your movement from producing an American dictator?

The image to the right shows the national debt in 2004, when it was just over $7 trillion, or $7,000,000,000,000 for those who like zeroes. In scientific notation, it’s $7.0 * 10^12. Currently, the debt stands at $12 trillion or so, and the debt limit now lets it go to $14 trillion.

$14 trillion is 100% of GDP, and taking our debt beyond that number puts us in danger of going over a tipping point.

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Obama is going to propose a freeze on discretionary spending to help rein in the budget. His proposals will affect roughly 3% of the budget. They’ll have no effect on non-discretionary spending, which includes programs like welfare, social security, veteran benefits, and payment of interest on the national debt. All of those have to be paid all the time, every time, according to federal law.

So what are the chances those spending cuts will be made in an election year? Slim to none. Times are hard and Congressmen want discretionary spending in their districts, even if it’s useless “pork barrel” spending on highways that go nowhere or condiment research projects (I’ve seen the guy that gets paid $70,000 a year to measure ketchup speed. Nice work if you can get it…). Congressmen may want to talk about cutting someone else’s program, but only to their constituents. In reality, they’re more likely to secure votes for their programs by promising to vote for everyone else’s program. That’s what we call logrolling.

It’s also what we call political economy. When a politician wants to get re-elected, he behaves in a way that’s often inconsistent with the way we want a politician to behave: in ourbest interests. Given that the way out of this current economic mess is to either experience pain now or to postpone the pain and feel a whole lot more later on, I bet we’ll see a lot of postponing and a lot of incumbents getting re-elected.

That’s a lot of concepts there… amazing how things happen to help the AP Government student understand the coursework…

Marxist economists haven’t died and become part of the fossil record. They’ve adapted and continue to raise critical questions of both Keynesian and Classical economic viewpoints. I recently saw one such viewpoint on LinkTV and felt moved to comment on it.

The lecture in question is called “Capitalism Hits the Fan.” In it, Economics professor Richard Wolff examines what he considers the roots of the current economic mess. He points at how regulations designed to rein in businesses quickly became rules for those businesses to circumvent, get exceptions to, and then eventually abolish. This is true. The Chinese philosopher Zhuang Zi observed as much over 2000 years ago: if rats can learn to avoid traps in the kitchen, how much more so can scoundrels learn to avoid the snares set by the law?

When those regulations went away, corporate profits soared while wages stayed flat. For the last 30 years, wages stayed the same for workers across America as their productivity soared. That explains why the profits also soared. Corporations took those huge profits and then used them to underwrite consumer credit cards. Massive credit spending made up for the lack of wage increases.

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Required viewing for all Americans. That’s what I’m calling this. You need to watch it, especially if you’re in my class.

Basically, our financial literacy as Americans is dictated by what the banking industry writes, and if we don’t read up on it, we’re financial illiterates and we’ll be taken for a ride. They’ve got the senate in their pocket – and I love how all the senators protest that they’re not influenced by lobbyist money, but they never, ever vote for meaningful reform. They can vote for reform, but it’s really a few concessions they are willing to make as they scramble to rework the system.

The unregulated free market is a nice way of describing a criminal free-for-all. The banks set the traps and we fall into them, one by one. Yes, regulations stifle growth and innovation, but they also keep people from being bled white by the cheats that flock towards unregulated free markets. I’m sick and tired of cheerleaders for the rich and powerful trying to keep the system as it is. We are in a trap, and the only way out is to change the system so these things can’t deprive us of our liberty.

Simply saying “nobody forced them to get into debt” is garbage. Trickery was in play, and the banks are the perpetrators of that trickery. We, the people, need protection.