New York has a “balanced budget” requirement. One year, they had a shorfall of something like 200 million. Do they cut expenses, like anyone else would? Oh, come now. Let’s be serious. This is a very, very blue state we’re talking about.

There is a NY state organization — a separate “Fannie Mae”-like bonding agency whose job is to sell debt instruments for the state. It’s not “a state organization”, but, like Fannie and Freddie is “a separate entity”.

So NY sells Attica Prison to this agency for 200 mil, then rents it back from them so they can keep using it.

This is as blatant and total a scam as Clinton’s “budget surplus” was. Any business tries to pull this crap, they’ll be shut down and their officers up on charges (can you say “Enron”?) the instant it becomes public knowledge.

But The State in its various forms doesn’t have to use GAAP like the rest of us, and thus can obfuscate, misdirect, and otherwise abuse any sort of accounting they choose to.

The first thing to fix is the accounting process.

I think the first thing we need to do is to put the hatchet to the government’s capacity for chicanery by forcing them to use GAAP instead of the comically incompetent accounting practices they currently use. This should be law at all levels — Federal, State, and Local. Books should be open and available to the public (with some limited areas like intel and the military which aren’t open to the public but are “black boxed” expenses).

The amount of crap that arises from this garbage on all levels is just preposterous, and one of the chief reasons why Fannie and Freddie screwed things up so bad was that they AREN’T held to the same kind of accounting standards that any other equivalent business organization is held to.

We currently don’t have a good feel for actually valuing IP at this point — it does not share even as many similarities with Mfg Goods that Mfg Goods did with Ag Goods — that is, there are intrinsic properties associated with IP which make its behavior radically different from that of Mfg Goods. This makes assigning a value to a software, or an idea, or a creation, much different from that of assigning a value to a widget.

Some key examples:
1) All the expense of creating IP is front-loaded. It’s all in creating that “first item” — after that, it’s almost free to distribute and disseminate however many there is a demand for. This is in contrast with MGs, which have an extensive overhead for each additional item. In a sense, IP has “infinite” economy of scale.
2) When I sell you my IP, I don’t lose my IP, I simply lose my ability to sell it to you (though even this can be tweaked somewhat). Unlike MG, where I sell you a widget, I no longer possess that widget. This is a key distinction between “Theft” and “Piracy”. When someone pirates IP, the “owner” of the IP nominally loses only the ability to sell it to that person, they don’t actually lose the thing itself. That’s still relevant, but it’s an important distinction between piracy and outright theft — if I steal your widget, you not only can’t sell it to me, you can’t sell it to anyone else, either. If I pirate your IP, you still retain possession of it and the capacity to sell it to others. (I make a distinction here between personal piracy and commercial piracy, mind you… the latter does qualify as theft, since the commercial pirate does deny the IP “owner” the power to sell it to others).
3) All current copyright law is flat out wrongheaded. It attempts to control the uncontrollable. Consider — It is usually accepted as a truism that “The internet treats censorship as noise and routes around it”. Then:
Censorship is someone saying “This we deem dangerous, therefore, you may not access it.”
Copyright-as-is is someone saying “This you have not paid for, therefore, you may not access it.”
Copyright-as-is and censorship are the same action — attempting to constrain access. So the result of attempting to enforce copyright-as-is will be the same as censorship — the copyright enforcement will be treated as noise and routed around.
(Note: This is most emphatically not “information should be free” — information is someone’s hard work organizing data into a specific viewpoint unique to that individual — be that data musical notes, images and words, or concepts and ideas. People who create must be rewarded for releasing those creations to people. Copyright-as-is must morph from being based on controlling access to some other form which rewards people without attempting to provide control. Those few creators who also demand control will be welcome to keep their creations hidden in a closet for none to see, while the rest of us revel in the creations of the many who are happy getting a penny each from a hundred million people.

And herein may lie some real adjustments in America’s benefit. Our IP is pirated around the world. What would happen if we recieved five cents from China for each copy of any of our pirated IP which was to be found there? That’s not all that much for any single Chinaman — what, 10, 20, 50 bucks each man each year? But spread that across a billion people, and it’s going to add the hell up over time, esp. if you go into paying up the backlog… Anyone else think we might wind up in the plus side on the trade imbalance is such a system was implemented worldwide? AND be able to pay off a lot of our foreign debt? Because I’ll argue that, in those terms, there’s one hell of a lot of wealth being produced by America, and there is very, very little real competition for us in some arenas — TV, Movies, and Music, we have a major advantage over every other nation, due to our inherent melting pot, mongrel nature. If it plays here to wide acclaim, then it automatically also appeals to a wide variety of interests around the world. Our culture and our individual nature is such that we encourage free inquiry and challenges to the status quo. This makes for greater innovation and creativity in all fields that few other nations can come close to. China has its own advantages — if it can be solved by throwing a million men at it, they can solve it. India, though, can do the same thing, so there is more competition at using that technique. There is no competition for America. There is no other melting pot with the same degree and history of individualism and dynamism.

We may be hitting a rough spot, and, no question — in the apocryphal “ancient Chinese curse” sense, “We live in interesting times”. But all is not dark.

Norm, I have made this point in many other places, and I will share it here:

If you seek a single, solitary quality which all leftists, liberals, and greens share, it is a singular lack of Wisdom — the ability to learn from experience.

They often have Intellect — the ability to learn from books, memorize facts, and such — but Wisdom is a different form of intelligence, and the lefties are innately lacking in it. If you were to come up with a “WQ” to match up with IQ, then the Left would uniformly, almost to a man, rank in the bottom half, and preponderously in the bottom third of all people (the more “left”, the lower they’d rate).

It’s how so many of them can be so smart, yet so abysmally stupid at the same time — they are IQ smart, but WQ stupid.

And this is why they never learn lessons from life, as you put it — that is “experiential learning”, which is a quality they “lack in spades”.

This explains their love of Marxism and Collectivist policies. No matter how many times it screws up, no matter how much death and misery and ruin it causes, “it just hasn’t been done right” (which is correct only if “doing it right” equals “not doing it at all”).

Fools say that they learn by experience. I prefer to profit by others’ experience.
– Bismarck -

http://townhall.com/news/business/2010/02/14/us_debt_will_keep_growing_even_with_recovery?page=full&comments=true

Here’s the catch – it would seem that the obvious answer is to cut spending, but doing that has to unemploy a large number of people depending on that government dollar. Since the cuts have to come before any recovery in the situation, this means accepting the idea that we must intentionally drive unemployment to around 15% before we can even start to recover. Will even a Republican Congress accept that? I don’t think so, which is why I think eventual default on the all US obligations is where we will end up. No matter who is in charge.

We are already in the position where we have to borrow money just to pay interest on the money we have already borrowed. We are past the point of no return.

Obama’s NSC Will Get New Power is an article in the Washington Post that was written in February 2009. The article summary is information on the changes Obama plans on making to the NSC, which in my opinion was a bad mistake. The IC doesn’t need more levels of bureaucracy. The recent intelligence failures are due in part to this problem. The so called *connecting the dots* is a bad phrase that truly doesn’t explain how analysis is performed and it does a disservice to analyst. Furthermore, the multiple levels are what adds to the watering down effect of the final product. You work in the government so you would know firsthand. I believe as well, one of the largest if not largest and wide spread problem in the IC is political correctness. As many journalists have pointed to in many of their articles covering Ft Hood, military officers were afraid to point out Major Hasan and his strange behavior. Why is that? For one, when President Obama entered office, he came in with the idea he was going to change the perception of how Muslims were viewed and Holder’s protection of their civil liberties. Through his directive, profiling was no longer used. This was a HUGE mistake as you know and well, we have 11 dead service members as a result. Holder also omitted certain key words that are triggers for those who work in the NSA wire tapping program to have the authority to listen to legal phone taps. I do not think I need to express how serious that mistake is and will be.

He came into this presidency badly informed, preset attitude, and obvious bias against the US military complex. He states in many of his apology speeches, that the US doesn’t have the right to be superior over any other nation. That said as a Commander in Chief of the US Arm Forces is wrong and dangerous for several reasons. It signals to our adversaries he is weak in defense, naïve, a fool, and they are going to have a great deal of fun for the next 4 years. Notice at the level he continues to be tested. His ignorance, arrogance and naivety on history, foreign policy, national security, and just about every major title a world leader would have to cope with it, is an obvious defect he projects in which the entire world can witness. A great leader does not talk out of both sides of his mouth, and expect his people to follow and trust him. More and more are seeing him for what he really is, an empty suit with no integrity to boot.

Like you said, they have put ridiculous policies above US national security. In all the Intel classes I have thus far, I have NEVER EVER read any expert expressing Global Warming as a possible threat to Nation Security. That is utterly absurd and all should be ridiculed; although, it does make for some embarrassing commercials for the opposition. I believe too, the threat of prosecution to the IC interrogators was a threat to attempt to keep them in check. In another words, if you leak on me, you will pay a heavy price. He does not want to piss off the CIA; a fight I believe he will lose. In closing I sometimes wonder if Obama is seriously trying to destroy this country, and remake it in the image he has fantasize over most of his life.
In closing three terrorist attacks in less than one year on his watch; Arkansas murder of 2 US soldiers, Fort Hood massacre, and the attempted murder of 300 passengers aboard a US bound plane. He states first attack was a lone wolf, and how many days did it take for him to address it? Second attack, was another lone wolf and refers to Hasan as an extremist. He refuses to use Islamic terrorist. The third, he again jumps to a lone extremist, and again refuses to state the terrorist affiliation. What the country needs to be asking is WHY? What has he changed in one year in his leadership, and why does he insist on calling a spade a spade? Lecture over, CJ out.

Oh yes, one last thing..check out Brennan’s comment on detainees being released from Gitmo and returning to terrorism.

But if the socialists have planned this they have planned very badly, because they have no clue as to how this is going to play out in real life. It’s going to play out the way these kinds of things always do – the people who’ve stockpiled the most guns and ammo ahead of time are going to be the ones calling the shots, and as far as the socialists go, that ain’t them.

Standards of living took a massive and immediate drop. Now Iceland is a small, racially monochromatic place that can almost be seen as one very large extended family. They did not suffer civil unrest from the hardship because of this. The US will not be so lucky, and our greatest danger will be when the various groups that are able to organize go after each other over the shrinking pieces of the pie. Not only will it make all politics toxic, but once things start to get scarce the guns will come out, on all sides.

I agree that it will happen quickly, but what I haven’t yet figured out is the “how” it will manifest. What goes awry first here in the US. IE: Do we get trucking companies unable to deliver goods through lack of credit to buy fuel? i wish others, with better understanding of the mechanisms of trade, would lay out their thoughts in an easily understood manner.

In this case it’s a simple one that no one dares to answer: How will the debt be paid? Every conventional answer involves much hand waving and no real answers – somehow it is all supposed to go away someday.

But it won’t, and you know it and I know it. What’s worse is that even attempting to pay it will bankrupt our economy. That’s why we will inevitably come to the point that default on government obligation, no matter how terrible, is going to look less bad than any other option.

And before you scoff consider that California may be looking at defaulting on its state obligation in less than 12 months. The only way to pay any of these obligations at all levels is to keep borrowing more and more and more, in a giant ponzi scheme – but what happens when confidence is lost? We are looking at a cascade failure, the kind of systemic unraveling in which all of the weaknesses play off of each other.

A worldwide systemic failure needs only the proper catalyst – and that could easily be the death of the Euro. Here’s how – the Euro finally falls apart as bondholders quit buying Greek debt and Germany and France refuse to bail Greece out, leading to a Greek default. Spain and Portugal, seeing no hope of a bailout for themselves, also default. Since major banks around the world, but especially in Europe, own these bonds this leads to a new credit crisis probably culminating in the final nationalization of all the European banks. (either that or colllapse) Since American banks are so tied in to them, this will lead to the same choice in America, which may not have the nerve to do another trillion dollar bank bailout.

There’s a lot of ways it could play out from there, but all of them lead to default of some kind. Sadly, the most likely of those is slow default through deliberate hyperinflation of the monetary supply, which will just make us a large, english speaking Argentina.

The real point is that once this system begins to collapse it will collapse very quickly, and there is no good way out of the position we have gotten ourselves into.

The only hope I can bring out of this is that maybe the complete collapse of our financial system will make it easier to rebuild along the lines that Paul Ryan is suggesting.

But before we get there we are all headed towards a great time of darkness.

truly honored. Our Lance Cpl Marine will be heading there sometime (probably after he makes cpl) and we are grateful for all your husband and his colleagues are doing to prepare the way.

Our prayers are with you in this for sure. We have other friends over there in the Army and NATO and we know how much is being accomplished.

Back to Brennan and Holder if you don’t mind. In that post I linked to I mentioned the possibility of new rules for ‘extremists’ verses established rules (and a a hair trigger response) for ‘terrorists’ or ‘al qaeda’. Want to jump in here at all?