Oh, I didn't see you there...Come on in.

Today one of my professors was pretty emotional. He is from Slovakia and as you may have heard, both President Bush and Vladimir Putin met today in Slovakia to discuss certain issues of importance. Those issues are not really what I am trying to talk about here though.

You could see it in his face. A sense of Pride deep inside you. I imagine the closest feeling I could have is the feeling I get when I hear about some victory of my hometown high school. I cannot imagine what it would be like to get the same feeling on a national level.

The Bushinator!! Action Packed Program Annihilation

The cold night air blows eerily, stirring the heavy mist in the dark alleyway.

A spark and then another...yet another.

A burst of light shines forth from the origin of the sparks and then a brilliant flash and there arises the most feared entity to walk this earth. The Bushinator.

He is on a mission from the right to annihilate all of these "WANTED" programs. He is going to take them down.

Ok so maybe not the best example but these are for real. This is the cost of our war on terror and oh so precious tax cuts....it seems like quite a bill.

The x's after the program mean that Bush has targeted this program before

Oh and also these programs are ones that are completely cut...there are more programs getting reductions.

Agriculture Department (5 Programs)

• Agricultural Marketing Service biotechnology program
• Forest Service economic action program x
• High cost energy grants x
• Natural Resources Conservation Service watershed and flood prevention operations x
• Research and extension grant earmarks and low priority programs x

Commerce Department (3 Programs)

• Advanced technology program x
• Emergency steel guarantee loan program x
• Public telecommunications facilities, planning and construction program x

Education Department (About 50 Programs)

• Comprehensive school reform x
• Educational technology state grants
• Even Start
• Vocational education state grants
• Vocational education national activities x
• Tech prep state grants x
• Upward Bound
• Talent Search
• GEAR UP
• Smaller learning communities x
• Perkins Loans: capital contributions and loan cancellations
• Regional education laboratories x
• Safe and Drug Free Schools state grants
• Javits gifted and talented education x
• National Writing Project x
• School leadership x
• Dropout prevention program x
• Close Up fellowships x
• Ready to Teach x
• Parental information and resource centers x
• Alcohol abuse reduction x
• Foundations for Learning
• Mental health integration in schools
• Community technology centers x
• Exchanges with historic whaling and trading partners x
• Foreign language assistance x
• Excellence in economic education
• Arts in education x
• Women's educational equity x
• Elementary and secondary school counseling x
• Civic education x
• Star schools x
• Higher education demonstration projects for students w/disabilities x
• Underground railroad program x
• Interest subsidy grants
• Occupational and employment information x
• Tech-prep demonstration x
• Literacy programs for prisoners x
• State grants for incarcerated youth x
• LEAP x
• Byrd scholarships
• B.J. Stupak Olympic scholarships x
• Thurgood Marshall legal opportunity x
• (Small vocational rehabilitation programs:)
• Vocational rehabilitation recreational programs x
• Vocational rehabilitation migrant and seasonal workers x
• Projects with industry x
• Supported employment x
• Teacher quality enhancement program

Energy Department (4 Programs)

• Hydropower program
• Nuclear energy plant optimization x
• Nuclear energy research initiative x
• Oil and gas programs x

Health and Human Services Department (14 Programs)

• Administration for Children and Families Community Service Programs
• ACF Early Learning Opportunities Fund x
• Centers for Disease Control and Prevention congressional earmarks x
• CDC Preventive Health and Health Services block grant
• CDC youth media campaign
• Direct service worker delivery grants
• Health Resources and Services Administration emergency medical services for children
• HRSA health facilities construction congressional earmarks x
• HRSA Healthy Community access program x
• HRSA state planning grant program x
• HRSA trauma care x
• HRSA traumatic brain injury
• Health Resources and Services Administration universal newborn hearing screening x
• Real Choice systems change grants

Housing and Urban Development Department (1 Program)

• HOPE VI x

Interior Department (4 Programs)

• Bureau of Land Management Jobs-in-the-Woods program
• Land and water conservation fund state recreation grants, National Parks Service
• National Park Service statutory aid
• Rural fire assistance (Bureau of Land Management, National Park Service, Fish and Wildlife Service, Bureau of Indian Affairs)

Justice Department (9 Programs)

• Byrne discretionary grants x
• Byrne justice assistance grants
• Community Oriented Policing Services hiring grants
• COPS interoperable communications technology grants x
• COPS law enforcement technology grants
• Juvenile accountability block grants x
• National Drug Intelligence Center
• Other state/local law enforcement assistance program terminations
• State Criminal Alien Assistance Program (SCAAP) x

Labor Department (2 Programs)

• Migrant and seasonal farm worker training program x
• Reintegration of youthful offenders x

Transportation Department (2 Programs)

• National defense tank vessel construction program
• Railroad rehabilitation infrastructure financing loan program

Enviromental Protection Agency (2 Programs)

• Unrequested projects x
• Water quality cooperative agreements

National Aeronautics and Space Administration (1 Program)

• Hubble Space telescope robotic servicing mission

Other agencies (4 Programs)

• National Veterans Business Development Corporation
• Postal Service: revenue forgone appropriation
• Small Business Administration: Microloan program
• SBA: Small Business investment company participating securities program

This is what is most likely going to get cut in order to relieve the deficit pressures. Which is of course a very very necessary and good idea. I just hope that while we are beating other countries into shape we don't let ours go to shambles.

After you..No, After you...No please, I insist After you

Bob: Did you know that some people in Europe don't like us Americans?

Bill: Yeah of course.

Bob: Do you know why?

Bill: Well sure. They don't like how cocky we are. How we police the world. Behave hypocritically in our trade policies.

Bob: Yeah those are some of the reasons. There are lots more but those are some of the ones that most people think of.

Bill: Of course.

Bob: Well another thing you might not have known is that they don't like our exchange rates policy.

Bill: Our what?

Bob: Our Exchange rate policy. It is the policy on which we base our decisions that affect the value of our currency, the dollar.

Bill: Yeah, I have heard of this. Some groups in Europe, namely exporters, have been irked with the US because our dollar has been losing ground against the Euro.

Bob: Right again Bill. When our dolllar gets weaker against the Euro, European exporters get upset because their prices look really high when compared to the prices of goods sold for dollars. So then they won't sell as much and their economy is in result kind of sluggish.

Bill: So they are mad at us for having a weak currency?

Bob: Yup. But this is the problem it isn't our fault.

Bill: Then whose fault is it?

Bob: It is theirs Bill...It is their fault. Let me explain.

See our formal policy on currency valuation and exchange rates is that we have no formal policy. We have what is called a "fully-automatic" or free floating exchange rate. It is affected by a number of things in our economy that are too numerous to list. Most of these are things over which we hold no direct control. They just happen to be performance stats on our nation economically.

Bill: So wait! I get what your saying we cannot change anything dramatically to change the value of the dollar.

Bob: Right. Well...kind of. We can try not and run huge budget deficits but that is another story. There is a much simpler and logical solution.

Europe can lower their interest rates. It is perfect. Some of their biggest problems are not that our dollar is too weak its that their euro is too strong. Other problems include high unemployment (10% approx while the U.S. is mildly happy with 4%) and generally sluggish economic growth. Interest rates going down would fix all of that.

Bill: Ok, so your telling me you have solved Europe's economic crisis with three words...low interest rates? Nobody thought of this before you?

Bob: Of course others have thought of it.

Bill: So why don't they do it?

Bob: Well Bill, they are scared....scared of inflation. Which is understandable considering their past but it does not give them the right to try and coerce us into changing our currency policy because they are too scared to fix theirs.

Bill: Hmm, So they could solve their own problems without ever complaining to us? Sounds good to me.

Bob: Me too Bill...me too.

:: End Convo

Just thought I would try that format out.

"Warning Warning!" Says the Fed.

Yahoo! News - Borrow Cautiously, Greenspan Advises

Poor Alan Greenspan is joining the ranks of such maligned characters as the worrisome engineer, the blinking red light in action movies, that silly laptop fuel thingy in fast and the furious, and all those other silly warning notices that go ignored throughout any dire situation. As the headstrong hero of the story, Bush pushes through the easily avoidable turmoil to arrive bloody, soiled, yet victorious. I am not so sure Bush has got it in him though. I think it is much more likely that we end up, as a nation, just bloody, soiled, and drowning.

The government is borrowing too much and that is the bottom line. It really is not a unrealistically advanced concept to grasp.


Let's assume the bar below is the total amount of money available to be loaned out...that includes loans for cars, homes, college, missile defense systems, or Social Security reform programs.

l-----Total Supply of Loanable Funds----l

Ok so that is our "Loanable Money Supply." Let's go ahead and take out some percentages and give them to certain things. (NOTE: The amounts being taken out are for explanation use only. They are not accurate unless I got really lucky guessing.)

lPPPPP:--------------------------------------l

Let us say that the area taken by the P's are us, the people, borrowing money that we need for our everyday demands....cars, boats, homes, etc.

lPPPPP:CCCCCCCC:-------------------------l

The C's will represent companies borrowing money to finance their new buildings, factories, ad campaigns and the like.

lPPPPP:CCCCCCCC:GGGGGGGGGGGGGGl

Let us also say that area taken by the G's is the government borrowing money to pay for its aircraft carriers, missile defense, wars against terrorism, healthcare programs, etc.

The financial markets behind this lending and borrowing of money are free and behave as markets should. Quantities supplied and demanded will fluctuate to equilibrium and thus set a price and quantity. Awesome right? Of course....free markets rock.

So from these bar charts we can make the leap of reasoning and say they will translate into lines of "supply of loanable funds" and "demand of loanable funds."



The Green dot on the above graph represents the current level of price of loanable funds (price of loanable funds = interest rates). The Red dot indicates the equilibrium Quantity supplied of loanable funds which is a part of the money supply. So let us suppose now that we take into account the government spending HUGE amounts of money to revamp social security (I personally think social security is in need of reform but not if we need to borrow this much money).




The green line in the above graph now represents the increased level of demand that is now present because the Government is in need of borrowing a large amount of money to fund the Social Security reform. So our demand line shifts out and a new equilibrium is found. The gap is representative of the increase in government demand on loanable funds. (Last time I heard, the Social Security plan would cost about 2 trillion. In all fairness the opposing party will post their numbers sooner than the rest and as such you have to take info like this with a grain of salt.) Price has risen from the black dot on the left up to the Green dot. Quantity demanded also increases to the Red dot. This makes sense so far right...greater demand = higher prices, and more supply. The problem is this: When the Government or anyone else for that matter needs money they cannot just print more to their heart's content. Expanding the money supply like that causes huge problems with inflation..namely, it increases. Ok, so now we cannot change supply, but we need a certain level of safe inflation to be maintained and the only other factor that can change is price. So now the graph looks like this.



And this is our conclusion to the Econ lesson. Supply is shifted to the left (or decreased). This effectively controls the supply putting the red dot back where it belongs. But look at price it has shot up dramatically. The fact of the matter is this...when the government wants to borrow that much money it makes it more expensive to borrow money for the rest of us because we are facing a smaller amount of money available to be loaned after the government has taken what they want out of it. More expensive means higher interest rates. High interest rates mean that we are less likely to get new cars or homes and that companies are less likely to upgrade their facilities to increase efficiency. All in all we get an overall slowdown of the economy.

Phew! So what am I getting at?

We need to heed Alan's warning and if we are going to do this we need to do it slowly and at a measured pace so we don't end up pushing the brakes on our own economic development.

Further down the ladder of Freedom - Bush Signs Bill to Curb Class-Action Suits

Yahoo! News - Bush Signs Bill to Curb Class-Action Suits

These guys suck. The level of the freedom in the US just fell another couple notches under Bush's hands. Basically what the GOP has done is remove the ability for Class-action suits to be filed on a state level. Instead the suits will be directed to the Federal courts where Bush believes they are more likely to be more fairly carried out. By fairly, conservatives really mean that they don't want lawyers getting large amounts of money while the actual plaintiffs get a tiny fraction. I will agree with them there. This seems like a genuine problem, but this new method doesn't solve that problem it just makes the problem occur with less frequency. To effectively solve that problem it just requires the people filing the suits to demand better representation that isn't screwing them over. All Bush and the GOP have done is make the American people a little less free and allowed big business (or small business for that matter) to be a little more careless in their practices.

You might think:
Less free you say....less free! By golly, this is exactly what we need...LESS REGULATION makes us more free right?
Well yes, but in this case it is companies that become more free not the public as a whole.

To a certain degree, regulation does bind us. A Laissez Faire world would be where companies operate under zero regulation. However, it is always necessary of even the most Capitalist society that we have pillars that our capitalism is held up by. For example property rights are required just as the ability to enforce those property rights are required. There has to be a system in place to check those who are abusing their freedom. There can be no coercion in a free society and we must have a system to check that as well. Another required structure is the ability to punish those who behave frivolously.

Bush and his party are taking that away from us under the veil of saving us from evil lawyers and their exorbitant fees. He is not saving us. He is just taking away one more tool that we have to make sure that companies don't use toxic chemicals in their plastics or asbestos in their buildings. Without this tool of retribution how are we supposed to make sure they behave. Bush might turn and console you..."It's ok sonny we will make sure they don't do anything to hurt you." SCREW THAT! I thought you said less regulation...that would mean even more regulation if the government is going to take care of it. So Bush has taken away our tool and slipped it in the pocket of the Government because apparently we don't meet the IQ requirement to operate such heavy machinery.

Current Status: Regulated by Government = mammas boys

The Intellectual Process

So I took this Political compass test and I ended up scoring near an Economist named Milton Friedman. That made me feel kind of good...you know...all this effort I am putting into learning Economics is turning out some actual good. Anyways, I realized I really do not know that much about things of a political nature and have since decided to start learning. So for my first effort I am going to read one of the books that Milton Friedman wrote. It is titled Capitalism and Freedom. I am in chapter three now and it is very interesting. Hopefully once I get more acquainted with the material I will b able to give some sort of an insightful remark about it but not yet. Basically it has to do with the tradeoffs and relationships between economic and political freedom.

Current status: Free Markets = Free People