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Government Subsidized PDF Print E-mail
Written by David M. Voth   
Wednesday, 26 August 2009 11:57
 Government Subsidized

By David M. Voth | August 25, 2009

 

Time and time again we see news articles of the government subsidizing or “funding” projects. The stupidity of this is so obvious for a free minded individual. Consider a few things. First, there is no such thing as government money. The money that government uses (wastes) is money forcefully expropriated from the people. Government does not create or produce anything; therefore, it does not make any of its own money, save the printing of it. All government money is forcibly obtained from people.

 

Second, one needs to ask why is the government subsidizing the project in the first place. If it were a viable project the free market would “fund” it. Therefore, we must always ask, when we see one of these stories, what’s wrong with the project? How come it needs some of “our” money to continue?

 

I read a news article recently that brought me to write this article. The title of the article was: Natural Resources Canada: Government of Canada Invests in Manitoba Biofuels. Read carefully: “Government of Canada Invests.” There’s misinformation right in the title. As I wrote, the government has no money of its own, so it can’t “invest.” Wouldn’t it be illegal for you to steal money from your neighbor to “invest” in a project? How then can it be different for government?

 

Just because something is the established norm doesn’t make it right. “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” –Frederic Bastiat

 

I read more of the news article because I was curious. The first sentence of the news article says, “Husky Energy’s Minnedosa plant will receive up to $72.8 million to support the production of ethanol, thanks to an investment by the Government of Canada.” The truth is that it’s an “investment” they will likely never see a return on. I’m sure they don’t even expect to see a return. Therefore, it’s not really an investment. Every time you invest your money you expect a reasonable return on your investment, don’t you? Let’s be honest here. This is just another government give away of your money. It’s time to stand up to these idiots and demand fiscal responsibility.

 

Let’s consider the viability of this so-called investment. Although biofuels have become politically correct, they are not the right way to reduce carbon emissions and/or oil consumption, provided that these objectives are necessary anyway. When farmers grow crops for fuel it increases our cost of food and these biofuels represent such a small percentage of our total fuel supply anyway. A report from the Organisation for Economic Co-operation and Development (OECD), says that biofuels will only account for 13 percent of liquid fuels by 2050.

 

But here’s the really big kicker, while our dishonest politicians extol the virtues of ethanol they fail to tell you the truth about why it needs to be subsidized. The government forces oil companies to use ethanol in our fuel and then they subsidize it, why? The number one reason is that using ethanol is not cost effective. It takes about as much energy to produce ethanol as is generated when it is burned.

 

It takes a lot of gasoline, diesel, and natural gas to run the tractors, farm implements, grain dryers, trucks, and processing plants. Furthermore, ethanol can’t be moved in pipelines, because it deteriorates. Therefore, it must be trucked, again costing more in fuel and pollution. The true fact is that the net energy production from corn is basically ZERO!

 

And now the incompetent Canadian government throws away another $72.8 million dollars of your money on another bad project that could not survive without political help. First they steal your money (taxation) then they “fund” a looser project. Don’t celebrate this, but instead challenge it for the stupidity that is.

 

I believe that there is no rational alternative to free markets, limited government, and individual liberty. “The common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality.” –Ludwig von Mises

 
Derivative Markets – An Understandable Explanation: PDF Print E-mail
Written by David M. Voth   
Thursday, 16 April 2009 10:57

Heidi is the proprietor of a bar in Detroit. In order to increase sales, she decides to allow her loyal customers–most of whom are unemployed alcoholics–to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

 

Word gets around about Heidi’s “drink now pay later” marketing strategy and as a result, increasing numbers of customers flood into Heidi’s bar and soon she has the largest sale volume for any bar in Detroit.

 

By providing her customers’ freedom from immediate payment demands, Heidi gets no resistance when she substantially increases her prices for wine and beer, the most consumed beverages. Her sales volume increases massively.

 

The local community bank advises Heidi that her current practice is unsustainable and asked Heidi to repay the loan she took out. Heidi then goes to the local branch of one of those mega-banks, which immediately grants her a new loan.

 

A young and dynamic vice-president at the mega-bank recognizes these customer debts as valuable future assets and increases Heidi’s borrowing limit. He sees no reason for undue concern since he has the debts of the alcoholics as collateral.

 

The bank regulators who have been ordered to enforce the recent “Be Kind to Alcoholics” federal legislation penalize the local bank for demanding that Heidi repay the loan.

 

The mega-bank gets a gold star.

 

At the mega-bank’s corporate headquarters, expert traders transform these customer loans into DRINK BONDS, ALKIBOND, and PUKE BONDS.

 

These securities are then traded on security markets worldwide. Naïve investors don’t really understand the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.

 

Nevertheless, their prices continuously climb, and the securities become the top-selling items for some of the nation’s leading brokerage houses.

 

One day, although the bond prices are still climbing, a risk manager at the mega-bank (subsequently fired due his negativity) decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi’s bar. Heidi demands payment from her alcoholic patrons, but being unemployed they cannot pay back their drinking debts. Therefore, Heidi cannot fulfill her loan obligations and claims bankruptcy.

 

DRINKBOND and ALKIBOND drop in price by 90%. PUKEBOND performs better, stabilizing in price after dropping by 80%. The decreased bond asset value destroys the banks liquidity and prevents it from issuing new loans.

 

The suppliers of Heidi’s bar, having granted her generous payment extensions and having invested in the securities are faced with writing off her debt and losing over 80% on her bonds. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 50 workers.

 

The Senate and House conduct an investigation to determine why a bank would have been so irresponsible as to make loans to unemployed.

 

The Government, following dramatic round-the-clock negotiations by leaders from both political parties who congratulate each other on a job well done, saves the bank and brokerage houses. The funds required for this bailout are obtained by a tax levied on employed middle-class non-drinkers.

 
DIVORCE TERMS PDF Print E-mail
Written by Keith Simpson   
Thursday, 12 March 2009 11:21

Dear American liberals, leftists, social progressives, socialists, Marxists, Obama supporters, et al:

 

RE: DIVORCE TERMS

 

We have stuck together since the late 1950's, but the whole of this latest election process has made me realize that I want a divorce.  I know we tolerated each other for many years for the sake of future generations, but sadly, this relationship has run its course.  Our two ideological sides of America cannot, and will not, ever agree on what is right, so let's just end it on friendly terms.  We can smile, chalk it up to irreconcilable differences, and go our own way.

 

Here is the dissolution agreement I propose:

Read more...
 
The 545 People Responsible For All Of America’s Woes PDF Print E-mail
Written by By Charley Reese   
Friday, 03 April 2009 14:01

Politicians are the only people in the world who create problems and then campaign against them.

 

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits? Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

 

You and I don’t propose a federal budget. The president does. You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does. You and I don’t write the tax code. Congress does. You and I don’t set fiscal policy. Congress does. You and I don’t control monetary policy. The Federal Reserve Bank does.

 

One hundred senators, 435 congressmen, one president and nine Supreme Court justices–545 human beings out of the 235 million–are directly, legally, morally and individually responsible for the domestic problems that plague this country.

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Obama and Fiscal Irresponsibility PDF Print E-mail
Saturday, 21 February 2009 16:10

Written by Richard M. Ebeling              

Friday, 20 February 2009

 

President Obama is hosting a “fiscal responsibility summit” on February 23 that has the goal of reining in the projected growth in government spending in the years and decades ahead. Any such reform, however, will require a dramatic change in the role of government in American society.

Read more...
 
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