I just don't understand some people

Some time back, I wrote a lengthy post on why I am not a Republican. I stick by that account. Not only is the historical founding and growth of the party abhorant to me, it's modern leaders are as well. Admittedly, there is at least a part of me that has a soft spot of The Gipper. And Ron Paul, who holds a congressional seat as a Republican, and ran for President in the Republican primary is a man that I admire. But, on the other hand, going back through at least Eisenhower, the policies pursued by Republican Presidents or Presidential Nominees have been very poor. Think Eisenhower, Nixon, Ford, Bush, Dole, Bush, McCain. No real true solid consistent constitutionalist in the bunch. In fact, quite the opposite. (Reagan, I believe was a mixed bag - and while far from perfect, was the best of the bunch)

Basically, I am a man without a party. While I am not a Republican, I do not see how any knowledgeable Christian person could ever support any of the Democratic Presidential candidates of the last several decades. It is chilling to me that many Christians are openly supporters of our current leader, Barack Obama. While I can sympathize greatly with them if they do not like many of the Republican contenders, as neither do I, I can not even see a "hold your nose and vote for Obama as the lesser of the two evils" approach as acceptable. As I wrote elsewhere, I even think a 'wasted' third party vote or even a no vote at all are more respectable than a vote for a downright evil candidate.

But, I am aware of people who profess the name of Jesus Christ and who attend Evangelical Bible Believing churches who whole heartedly support Barack Obama. I honestly do not get it. I can give at least a couple of reasons for it, but I think they would fall apart with even a cursory examination.

1. GWB got us into a war that we do not need to be in and we need a change in that direction.

The whole current war situation is way beyond my understanding and I honestly do not know if it is a 'just war' on our part or not. I am not of a settled opinion, and can actually understand if someone is of the settled opinion of it being bad. That is, I can sympathize with someone who thinks this is the wrong war, at the wrong time, fought in the wrong way, for the wrong reasons. But, after all the hoopla in the election cycle, when all is said and done Obama's timeline for troop withdrawel is virtually identical to Bush's.

2. We have used torture methods and Obama is ending that practice and shutting down Gitmo

The torture method that seems to make all the headlines is waterboarding. This is a very controlled method which produces no injury and no long term harm. Obviously while going through waterboarding, the recipient must be under more than a minor discomfort, else it would not work. But, is it 'torture'? Is it inhumane? What if it produces results which prevent a major attack on the US (which it has) What if this method, which produces no injury results in imformation which saves thousands of lives?

This interrogation process does not even hold a candle to the methods used in the past and present by other nations - many of which either permanently maim, or even kill the victims. (I don't think anyone has ever survived a decapitation)

But, no, we just need to 'love our enemies' I am told. All the while, they not only hate us, but are bent on our very destruction.

Also, as some commentators are now pointing out, for all the grand oratory about closing Gitmo, our beloved leader has no workable plan on what to do with the detainees. Hey, Obama supporters, ya'll got any ideas? Why don't you 'love' them by taking them into your own homes???

Finally, though, if Barak wants to end the practice of waterboarding and even if he wants to close Gitmo, that still does not make it right for him to have released important classified documents to the world.

3. Barack (and of course all Democrats) care for the poor or otherwise underpriviledged, unlike those rich evil Republicans

This is the one that just kills me. Of course, every politician of any party if he or she is going to have any chance of getting elected, is going to claim to want to help the helpless, etc. and of course, virtually everyone falls into some sort of 'underpriviledged category. Women?? Underprivilidged. Minorities? Underpriviledged. Old People; children; overweight; addicts; The list goes on and on.

And of course every right thinking person, especially Christians, actually do want to truly help the truly underpriviledged. BUT, on what do we base the idea that the only way, or even the best way, to do so is through government coercion? I could go on and on, and won't, but I have yet to hear a single person argue effectively that government is good or successful at this. In fact, I have seen scholarly studies proving just the opposite. Also, on what do we base the very idea that this is even a legitimate function of government. Helping the needy IS a legitimate activity, and the Church should be behind it in every way. But before one more Christian ever attempts to tell me that he or she is for the 'liberal' candidate because said candidate 'cares about the poor' I insist that that person make the biblical case that this is a legitimate function of the civil government to carry out. I am also going to insist that they prove to me that if I don't share their love of government programs, that this means that I do not care about the plight of the unfortunate. I hate to harp so much on this, but I have read a few too many Christian writers state that they like Obama (or some other liberal) because he cares about the poor and of course Christians should care about the poor so why would any Christian not support Obama. Well, I care about the poor, and I think in the long run government programs to help the poor actually hurt the poor and everyone else, so why would I support a candidate that wants more and more programs?

Now, in addition to fact that the supposed reason for a Christian to be a supporter of Obama are quite weak, the reasons to not be are even stronger.

1. For over 20 years Obama attended a church that was so obviously racist and anti-American that absolutely no one can deny it. He finally dropped it when it became a politically hot issue and the media immediately dropped the issue as well. But, study up on this church and its preacher. Then exchange the black and white labels and ask yourself would a white person ever stand any chance of having any respectability at all if he attended such a place. You know the answer. It is beyond doubt. The white guy would be universally condemned and would never stand a chance in national politics. AND RIGHTLY SO. But, with Obama, we just act like it never happened. Apparently people even believe his preposterous story that even though he attended there twenty years, he never heard any of the inflamatory type remarks that were documented.

Moreover, Barack's 'religion' is not at all Orthodox Christianity. I base this not on conjecture, but on his own words that can easily be found on the internet. He believes all will go to heaven and there is no hell. He believes 'sin' is defined as 'not being true to yourself'. (Actually, we are all born sinners so sin is actually when we ARE true to ourselves!!) there are so many other things in which whatever his religious beliefs may be, they are definitely not Christian.

2. Obama has very little relavent experience

He has in his adult life been a left wing agitator (aka community organizer) a state repressentative (for a short period) and a US Senator for a short period before running for President.

3. He demonstrates on a daily basis that he does not understand (or is it does not care about?) our constitutional system of government.

The constitution spells out what the federal government as a whole can and can not do, and specifically spells out what the executive can and can not do. He daily acts as if these restraints do not exist.

4. He is driving the economy so far down the tubes that I fear it will never recover

I know I know George Bush did this. Well, he did have a lot to do with it. That is why I do not like W. He pushed the economy further and further toward the breaking point. But, here is what 98% of Americans do not understand. BO does not represent a change in direction from the Bush administration in the area of the economy. Instead, he is going in basically the same direction at a much much higher rate of speed. All this sype policy does is put off the inevitable crash that much longer, and make the inevitable crash that much more severe. Apparently Obama, like Keynes, has the opinion that it does not matter because "in the long run, we're all dead." How CHRISTIAN is it to place our kids and grandkids in the position of a nation in total economic collapse?

5. He radically supports gay 'rights' and the gay agenda

On an earlier post I put a link to a site documenting his beliefs and actions on this issue. You can go look it up

6. He is rabidly pro-abortion - more so than any President or contendor in the history of this nation

Again, that post refered to in #5 has info on this. Of course, many Christian Obama supporters will say that well, they are not 'one issue voters' but if there was ever a single issue that one could vote on, this would be it. Killing innocent unborn human life just should not be an option.

I also realize that some supporters will say that we should be more willing to help and to be understanding to women in the unfortunate position of having an unwanted pregnancy. I agree, that Christians should be on the front lines of this issue and where we are not it is to our shame. But even that is not as shameful as supporting a politician who wants no part of any limitations on abortions. And we do not need to let our care and concern about it remove us from the fact that quite often the woman is not exactly a 'victim' but was a willing accomplice. We are not showing Christian love to a person by telling them there are no consequences to their actions. Instead we show them there is forgiveness in the cross and strength in Christ to work through the situation without resorting to making a bad situation a million times worse by committing murder.

How anyone who considers themselves an evangelical Christian, who believes that humans have dignity and worth because they are created in the image of God, could turn the other way and support with great fanfare a leader who is not only complacent, but active in the destruction of millions of innocent lives, while at the same time decrying a previous leader because he allowed some people to poor water on the faces of terrorists bent on our destruction is totally beyond me.

Can anyone explain this to me please?

Our Current Economic Crisis

I have been reading, studying, and thinking alot about the economy lately. My daughter is having to read a book entitled Whatever Happened to Penny Candy? for her high school economics course and the wife and I have been reading it also. Like all economics books, it is not perfect. But, especially the first several chapters are very good, and should be required reading for every single person in America (that is if I were the dictator type - but I guess the fairness doctrine would insist that everyone also read Keynes or Marx or something).

I have also been re-skimming Honest Money by Dr. Gary North, and What Has the Government Done to Our Money by the late Professor Murray Rothbard. If you get a chance, you need to read any or all of these.

Yesterday while out and about, I stumbled on a radio program which featured a guest named Thomas Woods. His insight into the situation was fascinating. A brief article about his book can be found here: http://www.pointofview.net/site/News2?page=NewsArticle&id=8531

Woods main argument, one that is echoed in the works of Rothbard and others, is that an unfettered free market is NOT the cause of the problems we are facing, and government intervention of one form or the other is NOT the solution. In fact, the exact inverse is true.

The current situation, like that of the Great Depression of the 1930s, has been caused by irresponsible governmental monetary policy.

The books mentioned above make this claim as well. In reading my version of Penny Candy which was dated 2005, I was fascinated by the relevance to the current situation. The author demonstrates how throughout history, governments have turned to the same currency devaluing schemes to try to continue to prop themselves up, ultimately leading to their inevitable downfall, and the downfall of the society they were suppose to be protecting. The same thing is happening now at a terribly alarming rate.

Money is simply a medium of exchange. Nothing more. Nothing less. The natural state of things has always led in civilized society to the use of precious metals ( hereafter referred to as PMs), specifically gold and silver, as this medium of exchange. The reasons for this are many. PMs have real value in and of themselves. They can be broken down into usable quantities (from large bullion to small coins). The amount of them available in society can not be quickly, nor infinitely increased. In short, they provide value, ease of use, and stability.

Monetary units (such as dollars) are simply known quantities of some precious metals. By definition, a dollar was the equivalent of one ounce of silver. (The British Pound Sterling was just that - a pound of sterling silver). At the time of the formation of the U. S. Constitution, gold was considered to have roughly twenty times the value of silver - hence a 'dollar' was also one twentieth an ounce of gold, or an ounce of gold was twenty dollars. That is, the value of gold or silver did not fluctuate in terms of dollars, but the value of a dollar would fluctuate if the value of gold or silver fluctuated. Things were essentially this way for the better part of 150 years. If you had a dollar, that meant you had an ounce of silver or a twentieth of an ounce of gold. If silver or gold for some reason increased or decreased in value, your purchasing power increased or decreased with it. However, due to the nature of things, rapid or large fluctations in the value of precious metals rarely occur.

In times past, such as during the late stages of the Roman Empire, governments would devalue the currency by 'clipping' the coins. That is, they would collect coins (through taxation or whatever means), shave off portions of the gold or silver, then mint new coins with the shavings. A coin that was say one ounce, may then be 0.9 ounce, but, have the same 'face value' even though the real value had diminished. Also, there were now more coins made from the same amount of PM.

Now suppose you were a Roman merchant who was selling an item for an amount equal to nine ounces of PM. Previously, you collected nine 1 ounce coins. Now, to obtain the same quantity, you needed ten 0.9 ounce coins. (Obviously, I am simplifying here). The result? There are more coins (therefore, supposedly more 'money' available for exchange) in the market, but prices have gone up. That is, the currency has been devalued. Prices have risen. People may seemingly have more 'money' in their pocket, but, their purchasing power has not improved. This is inflation.

Please note, inflation is not a rising of prices. The rising of prices is a result of inflation. Inflation is the devaluing of the currency.

Over the centuries other innovations have made this practice more convenient for the government devaluers (counterfeiters) to ply their trade. The most useful innovation has been the introduction of paper money.

Paper money began as what could be termed bank notes. Someone may not want to store their reserves of PM in their own home. Businesses which were essentially warehouses for PMs developed. One could deposit his PM in the warehouse, and the warehouse would issue him a paper receipt or receipts. Suppose I deposited 25 ounces of gold and 100 ounces of silver in the warehouse. I get receipts stating that I have this (maybe I get twenty five receipts each worth one ounce of gold, and 100 receipts each worth one ounce of silver). Now, I do not carry all this gold and silver around with me, but I can redeem any or all of my receipts whenever I desire. If I buy an item priced at one silver ounce, I could trade my receipt for it. Now, the merchant I traded with can redeem that receipt upon demand and receive the actual silver. (Likely, the warehouse (bank) would charge some type of holding and processing fee for this service.)

Now, these banks began to get creative. They determined that rarely if ever did they have a run on all deposits. At any time, they had the overwhelming majority of deposits on hand. Therefore, they began 'loaning' some of the reserves that they had. This is called Fractional Reserve Banking. So, just using my deposits for example. I may come in and out occasionally and deposit more, or withdraw some, but on the whole, my balance is staying somewhere near what I originally deposited. The bank may then write out another receipt against my deposit and give it to another individual as a loan that must be repaid. So, now for my one deposit, there are two sets of receipts in circulation. The borrower then goes and somehow invests this, trying to make a return. He may go turn his certificate over to a merchant who sells him some equipment that he uses to provide a good or service to make more money. If he makes a return, he pays back the borrowed credit, with interest. The bank has made money. As long as I, and the others who are now holding certificates against my deposits do not demand our PMs at the same time, the bank is safe. However, obviously, the larger the overlending verses the amount actually on reserve, the larger the risk the banker is taking. Also, the riskier the investment, the more risk of the bank failing.

Fractional reserve banking has caused some problems during economically troubled times in the past. In fact, it has actually caused some of the economic problems themselves. For one, this has inflated the currency (If the banker 'loans out' receipts equal to my original deposit, he has essentially doubled the currency in circulation, thereby lowering its value, much like the coin clippers of old)

During much of the 19th century, American politicians struggled with these issues. On the one hand were the bankers, licking their chops to use fractional reserve banking, along with the politicians they backed to help foster the system. On the other hand, were more economically conservative politicians who fought against this system.

Finally, in 1913, perhaps the greatest debacle in the history of American economics occured. The Federal Reserve system went into effect. Since that time, they have continued along a path that has gone further and further in the direction of currency devaluation.

The climax of this has been to utimately remove all ties from our paper money to any PM, along with the passage of 'legal tender' laws. Not too many years ago, your paper money had a noted on it saying it could be redeemed for 'real money' (i.e. silver or gold). That is no longer the case. Now, it is simply a note that we are forced by law to accept as legal tender for all debts. In reality it is nothing but a worthless piece of paper. (And nowadays, often it is not even that, but is simply an electronic blip on a computer program). You could have piles and piles of hundred dollar bills, and they are absolutely worthless in and of themselves (unlike silver or gold) and the ONLY reason they have value is because the government by law forces everyone to accept them as tender.

So, now the 'value' of a dollar is not tied to PMs. It therefore can fluctuate tremendously. As stated previously, one of the major reasons why PMs became used as a medium of exchange is because they could not be quickly and easily devalued by a sudden large influx. (It is not impossible that this could happen, as it happened in Spain when they obtained huge amounts of gold from the Americas during the 16th century - another story for another post at another time!) However, it can not easily and frequently happen.

However, when paper that is printed solely at the governments discretion and is forced to be used as legal tender is the only allowable legal tender, the government can inflate the currency at will. A huge influx of this so called money into the economy does not add one whitt of wealth to the economy, but only devalues the currency.

Our wealth as a nation is the sum total of all our productivity. In reality, money is only a medium of exchange for that productivity. If suddenly the government prints one trillion dollars and injects that into the economy, it has not increased our wealth one iota. All it has done is make the buying power of each unit (dollar) that much less. This can cause widespread destruction.

Suppose you are 70 years old, have worked hard all your life, have saved, invested, and smartly handled your money and you now have a net value of one million dollars. Sounds like a lot of money, doesn't it? However, if the government suddenly prints and circulates trillions of dollars into the economy, now your one million dollars is worth a fraction of what it once was. All your hard work and intelligence just went down the drain. This is happening to millions of Americans right now.

Well, in our current hard financial situation (which has been caused by the very monetary policies we are talking about) the Messiah's, uh, I mean the President's plan for fixing it is to inject tons of money into the economy. See how utterly senseless this is?

Not one person in a hundred understands this. The average Joe, while possibly thinking something might be amiss in what is going on, at least on some level thinks that injecting money to 'jump start' the economy is a good thing.

In actuality, it is a travesty - and one we will be suffering from for a long time to come.

This inflationary monetary policy is actually harmful in many many more ways than I can even begin to talk about here. This policy, and not the unfettered free market, causes the business 'boom and bust' cycles we have seen throughout our history. We have just come out of a long 'boom' and are now going into a huge 'bust.' The best that our current policy of stimulous can do is to continue to artifically lengthen the aritificial 'boom' and forestall the inevitable 'bust,' while making the eventual 'bust' just that much more severe. I fear we are near a breaking point where no matter what happens, soon the 'bust' will be irreversable - perhaps leading to a total cultural meltdown. The only way to fully and finally recover is to allow the 'bust' to run its course - as painful as that may be, then to restore a sound monetary policy in its wake.

Austrian economists (see the Woods link above, or that of the Mises Institute or Lew Rockwell Report to the right) have been saying this for years, only to be labeled lunatics. However, I think it is undeniable that the only solution to this situation is to somehow someway get back on some sort of Precious Metal ("honest money") monetary system with little or no government intervention.

The Keynesian 'Solution'

Dictionary.com describes John Maynard Keynes as follows:

1883–1946, English economist and writer.

British economist who proposed that high unemployment, being a result of insufficient consumer spending, could be relieved by government-sponsored programs. He also advocated deficit spending by governments to stimulate ecomomic activity.

English economist who advocated the use of government monetary and fiscal policy to maintain full employment without inflation

Keynesian economics has dominated the American political economy for decades, going back at least to the great depression. It was Keynesian policy which FDR used to get us out (cough, gag) of the depression. In the late 1960s early 1970s Richard Nixon (who had taken us off the gold standard completely) stated “We’re all Keynesian now.”

Virtually every president since at least FDR has been to some extent or the other, Keynesian, no matter what else you may say about him. That even includes Reagan, though possibly to a lesser extent.

As can be seen from the above definitions, one of the main, perhaps THE main tenant of Keynesian economics is that during times of economic slowdown, the government should spend money on infrastructure and various projects in order to provide jobs, spur consumer spending, etc. This, supposedly will get the economy through the tough times. Once the economy recovers, the government spending can be curtailed. It is a form of planned economy.

Sounds good on paper to the layman, but there are more than a few drawbacks.

To start with, it really does not work. As I have said elsewhere, the state of the economy was at least as bad, if not worse in the late 1930s, after years of FDR, than it was when FDR took over. FDRs programs were, among many other things, Keynesian.

It is not a natural thing for the whole economy to be in a downturn all at the same time. Unfortunately, most people think that the free market will frequently result in a total economic meltdown, at which point some government intervention (in the form, at least, of Keynesian policies, if not outright socialism) is required. However, while no possible economic system can ever insulate every individual from hardship, the free market will never end up in an economic meltdown. The meltdowns that do occur (such as 1929 onward and our current situation) are almost always directly related to government intervention. However, the solution proposed by our government leaders? More government intervention. Make sense to you??? Yeah, me neither.

1929 was the result of government intervention. The as bad or worse situation of 1938 was due to continued government intervention.

Second, it is as close to an absolute fact as anything in the world that once government spending is started, it is not stopped. Many of the programs for economic recovery of the 1930s are still with us today. This causes continued deficits and other problems which result in further economy wide problems on down the road.

Third, and most importantly, there are long term negative effects of this type of spending (deficits and higher taxes and the further economic hardships that occur due to these things). When asked about what the effects of his policy would be in the long run, Keynes himself famously quipped, “In the long run, we’re all dead.” There ya go. That’s the philosophy we want to hand down to our kids, right? We want policy which we believe (rightly or wrongly) will benefit us, but who gives a rip what it will do to our descendents? Sure, count me in. I don’t care what Jr. says.

Now, what to do about our current mess? First off, let us be clear. Our problems are not the result of the free market gone wild. Our problems are directly related to over arching government intervention into the lives and businesses of individuals and corporations, from bad, even terrible tax policy, from wretched spending programs, from freedom squelching regulations, from currency devaluing monetary policy, and on and on. The proposed solution? More government. Create money out of thin air and spend it on ‘infrastructure,’ and a myriad of other social programs. In short, the current proposed solutions are the same old tired Keynesian policies which have actually contributed to the current mess.

In the end, I have no idea exactly how all this will turn out. But I can promise you, absent any major change, the direction we are heading is wrong. We can keep putting band-aids on our severed jugulars and keep the patient alive until hopefully, in the long run, we are all dead, OR we can care about our descendents and try to fix the problems permanently with sound, honest money, low taxes, limited government, and so forth.

What do you think?

A bunch of random thoughts concerning the election

In no particular order, kind of a 'stream of consiousness' thing:

1. I have read many comments from liberals about the fact that poor ole McCain supporters were not really for McCain, but just AGAINST Obama, as if that is in any ways important. If you are a liberal with this view, suppose one side was someone you really did not much care for (say George Bush) and the other side was Adolph Hitler. Would you be more voting for Bush or against Hitler? The choices are what they are and a person just has to make what he thinks is the wisest choice among what is there - even though he may not like even the wisest choice. In my case, I decided to cast a vote that I could feel good about (3rd Party vote) even knowing the guy had a zero chance of winning. Admittedly, if the race would have been close in Alabama, I would have voted for McCain.

2. I don't for the life of me understand why when there is potentially really controversial information about a candidate, it is wrong for us to wonder about it or even speak about it. There have of course been rumors that Obama was Muslim. I have heard rumors that he had been addicted to Cocaine at one point in his life. I had heard rumors that he was gay or bi. Now, admittedly these may be crazy. They may be flat made up. They may be totally baseless. My personal feeling right now is that Obama is not a Muslim (more on this later, though). I do not think he shows any characteristics of a drug addict, although I have actually seen him admit to smoking pot frequently when he was younger. I really know nothing about his sexual preferences, but have no knowledge of any deviancy on his part. So, unless someone could really produce evidence for any of these, then of course it is silly, immature, and unChristian to spread such rumors around. If there is any evidence for any of these, then I think they are legitimate concerns and are open for discussion in a campaign.

However, there are are other areas in which there have been persistent rumors that seem to have more backbone. Mr. Obama's past activities and ties with other people and organizations would say a lot about who he is. He has been associated with who knows who.

At the very least we could talk about Jeremiah Wright. 'Pastor' Wright has openly touted 'Black Liberation Theology" and the writings of James H. Cone including "A Black Theology of Racism" (you can find Wright touting this book on youtube and he has in the past at least, cited this book as a founding document for his church. ) This book and this man and this "theology" which term is used in the loosest way possible, is simply hate filled anti-American racism. The major premise of the book is that community defines theology. Therefore, the 'black' community can define a 'black theology" that suits their needs. Of course, the other premise is that historical orthodox Christian theology is "White Theology" which has been used to oppress blacks. Note here then that 'theology' which correctly would be the objective study of God with no racial connotations at all now becomes the subjective statement of our own racial prejudices clothed in the righteous garb of religion. There is 'oppresive' white theology and black 'liberation' theology. Where is God in this view?

According to Cone and Wright, they can not worship a God who is not on the side of the Black Liberation movement. If God is on the 'side' of Whiteness then they hate that God.

Here are a few excerpts from this book:

1. "[W]hiteness is the symbol of the Anti-christ."
2. "The goal of black theology is the destruction of everything white, so that blacks can be liberated from alien gods."
3. "The black experience is the feeling one has when attacking the enemy of black humanity by throwing a Molotov cocktail into a white-owned building and watching it go up in flames. We know, of course, that getting rid of evil takes something more than burning down buildings, but one must start somewhere."
4. "Black theology seeks to analyze the satanic nature of whiteness and by doing so prepare all nonwhites for revolutionary action."
5. "We have reached our limit of tolerance, and if it means death with dignity or life with humiliation we will choose the former. And if that is the choice, we will take some honkies with us."
6. "To be black is to be committed to destroying everything this country loves and adores."

Now, I ask you dear reader, rearrange the black and white above and what would our media do to anyone even remotely associated with it? Anyone white who can even by the third or fourth degree be remotely associated with anyone even remotely racist can have their any hope of attaining public office destroyed. Remember Pat Buchanan in 1996? Remember Trent Lott?

But, what did we do in this case? We elected a man president who for twenty years attended a church that was self described as based on these racists writings/rantings. Then, when it briefly became a political issue, he dropped it like a hot rock and the rest of us are suppose to just shut up and never mention it?? Excuse me??? I am absolutely sure I would get labeled a racist by some for even mentioning it here.

No, I do not believe Obama is a Muslim. I believe Obama is a lifelong member of a church that falsely uses the name of Christ to buttress marxism and anti-white bigotry.

Add to this other known ties at some level or other with terrorists, Chicago mafia types, marxists, vote fraud scams and the like and there is tons of smoke, but we simply must assume that there is absolutely no fire. If we want to do a fire investigation, we are labeled as fearmongers, haters, racists, etc. It really boggles the mind.

3. Sarah Palin was absolutely unready to be President, we are told. But Barack? Oh noooo. Time as a street agitator, a while in the Illinois State House, and a hudnred some days in the Senate make him uniquely qualified for the most powerful job in the world. Wright, er. Right.

4. I didn't much care for McCain, that is for sure. I do think much that McCain would do would be much the same as Bush. I do not agree at all with the direction of the country under Bush. I think we are heading in the wrong direction. However, with politics, there is a multitude of directions we could go. It is not that we go the MCCain way or we go the Obama way (which in a lot of instances are not all that different) There are a million other directions to proceed. So it is not just that since I do not like the current direction, I must vote for the change that Obama represents.

5. As bad as I think Bush has been and McCain would have been, it would still be far easier to turn things back and right the ship had McCain been elected. If Obama get's his way, and with majorities in both houses, he might, he can do almost irreperable damage. Once you let the cat of socialized medicine out of the bag, you absolutely can not be put back in. If his policies go through, we are stuck with them short of a revolution of colonial American proportions.

6. Related to this, let's just be as clear as possible. Obama is a socialist. I know I am not suppose to say this just like we are not suppose to bring up any ties to any shady characters in his past (or present). But it is the truth. People misunderstand this in many ways. a. they do not even know what socialism is b. they think they know and they actually think it is a good thing. c. they think it is allowed in the constitution d. they think it is Christian, etc. All of these thoughts are dead wrong. Socialism not only has never really worked (though through extensive use of smoke and mirrors has been made to look like it is working for a time) but actually socialism CAN NEVER work. It is an impossibility. it inevitably leads to lower standards of living and higher government power and persecution. It is impossible for it to do otherwise.

7. Obama has given indication that he will go to great lenghts not only to not allow further restricitons on abortions but to propogate more and more abortions. He has stated that the first thing he would do as president is sign the freedom of choice legislation. Ok, we know where his prioirities lie. In Illinois, he voted against legislation that would have protected the life of a child that survived an abortion procedure. Instead, they were just throwing the child in the garbage to die. Even many other liberal pro-aborts supported this legislation, but not Mr. Obamonation. Obama would be by far the most pro-abortion President in the history of the United States. What, therefore will he do in court appointments? What legislation will he push, and sign if it passes? If you are a Christian and voted for Obama, how do you justify voting for someone who is so pro-abortion?

8. Obama has given indications that he is rabidly pro-gay agenda. Now, I do not mean to imply that a candidate for president should desire to bust into homes of homosexuals and cart them off to the Gulags. Although I find the practice disgusting, and a horrible abomination against a holy God for which there will be a price to pay, I do not think it necessarily the job of the government, esp from a presidential office, to interfere with what two consenting adults may do in private. (The church has a major job to do here, for sure, though! But that is through preaching, teaching, admonishing, ministering, etc.)

But, if Mr. Obama gets his way, it may soon be illegal to preach against homosexuality. The homosexual agenda may be ramrodded at our kids through the schools, etc.

The link below is to a blog by a Robert Gagnon. Now, he is not some sort of blinded conservative. He is actually from a theologically far more liberal tradition than I. He has written a book about the Biblical view of homosexual practice that has garnered rave reviews by both conservative and liberal reviewers, even a liberal homsexual advocate. In other words, he is not simply on some sort of conservative soapbox. However, he details his concerns here about the above items (Obama's views on abortion and homosexuality) There are tons of links on this as well.

Again, how/why would a Christian have voted for this man?

http://robgagnon.net/ObamaWarOnChristians.htm

9. I am not the least bit upset over the fact that a black man got elected. I actually can truly understand why millions of black Ameicans would be very excited at the prospect of voting for a Black man. I have not experienced what they have. While there is a lot that is perception, there is a lot of reality to the history of blacks in this nation as being in an oppressed state. This is vindication of sorts for them. I understand that.

In fact, I am all for racial reconciliation and a Black president could go a long way toward that end.

Unfortunately, this is not the case with Obama. His policies will do far more harm than good, maybe even irreparable harm. I believe at the very least he has some very bigoted associates. He is from a marxist background. He is pro-death, pro-gay agenda. He is not the person, regardless of his race or gender, to lead this nation where it needs to go. He is apparently going to lead it in precisely the opposite direction than where it needs to go.

I hope it is obvious to anyone reading this that neither I, nor millions of other, white conservatives were against Obma because he is Black. We are against him because of his issues.

10. Nontheless, I am adamant that we all, black, white, liberal, conservative, need to pray for our leaders - democrat, republican, white, black, male, female, conservative, liberal. We need to pray not that our will or their will be done, but that God's will be done to His Glory and for our good.

Further Thoughts on the Upcoming Election

The closer we get to the election, the more uncertain I become of which way to go.

In brief, here is my delimma:

I absolutely do not like and can not support Obama/Biden. They clearly represent everything I am against, and are against everything I represent.

I do not care much at all for McCain. I am not real sure what it is he does represent. I don't care for his personality, such as it is. On a great variety of issues I see no huge difference between him and Obam/Biden.

I am very intrigued by Sarah Palin.

On the whole from what I know, Chuck Baldwin of the Constitution Party would be far closer to what I would feel comfortable supporting (though he/they are not perfect). But, he has exactly zero chance of winning the election.

The struggle is this - is the addition of Palin enough to make me vote for the Republican ticket?

Palin has in her favor in my mind several things which the liberals scoff at her for:

1. She is a biblical literalist (I do not know exactly what her interpretive principles are and if they are the same as mine, but just the fact that she accepts the Bible as God's inerrant word to be taken seriously is good for me) I know a great many would question what in the world this has to do with being a national leader, but I would say it has plenty. She also has the guts (if she were a man, I would possible use another bodily reference) to state this publically and stand by it. This colors a lot of her other views in a positive light, some of which I'll mention here.

2. She is VERY pro-life. Not kinda sorta in a politically correct way when it is convenient, but solidly staunchly biblically pro-life as best I can tell. She also lives consistently with this, giving birth to a Downs Syndrome child and having her daughter carry her pregnancy through. It is not as if she says one thing then acts another way.

3. She has pursued action in Alaska consistent with not pushing the gay agenda - including wanting to rid the schools of pro-gay readings.

4. Most consistently, she has publically stated her belief in the literal reading of Genesis - meaning God created the world in six days not so very long ago. Adam and Eve were real people, etc. I recently read a liberal columnists which used this as reason enough to be scared silly of her. She must just be stoopid to believe that fairy tale, ya know!

These things makes me tend to want to have huge respect for her. Maybe even God is using this time of wimpy men to raise up another Deborah, as Douglas Wilson pointed out. (Deborah had to deal with a wimpy leader named, of all things, Barak!)

However, I do have a few reservations about making her VP, and with a certain turn of events, eventually President.

1. This may sound silly, but the fact that she is sided with John McCain makes me uncomfortable. I know Joseph had to work for the Pharoah. I know Daniel had to work with the leaders of his day. But, these great Godly leaders did not have to politically bow to the leadership direction they served under. Quite the opposite, Joseph and Daniel rose to the top by staying faithful to God even when it was unpopular, even dangerous. I have know idea what the level of faith of John McCain is, but some of his positions are not what I believe someone who understands biblical government, our constitution, and the relation between the two would be. The political reality of our day is that a VP has to be almost an exact echo of the Pres. How far is Palin willing to compromise? Or is that even a compromise for her? Is she politically comfortable with McCain?

2. A specific example was displayed to me in an interview I recently heard. I believe it was Sean Hannity who repeatedly asked her what was the problem with the economy, and what was the solution. Her consistent answer was that THE cause of our current economic woes was corruption on Wall Street and that THE solution was more government in the form of regulation. Now, I do not at all deny that there is some corruption on Wall Street. Only an imbecile, and Ayn Rand would. And I do not even deny that the government has a legitimate role to play in dealing with corruption (its job being to administer justice). However, the totality of our current economic problems is really a long and complex result of over one hundred and forty years of bad economic policy and too much government. There are so so many other things she could have more accurately stated as being major causes of our current economic woes and so many other directions she could have taken to point the way out. But, instead, she says that THE problem is Wall Street corruption and THE solution is more government. She even mocked the idea of 'self regulation' stating that it was actually 'no regulation.' My question to this is always then, who regulates the regulaters? At some point somewhere, someone is 'self regulated.' For all the dangers associated with the money of Wall Street, I feel much better with them being 'self regulated' than with the government empowered regulaters being 'self regulated.'

All this fits in nicely with McCain's own direction. He brags that while he is a Republican (presumably pro-big money interest) he has attacked Wall Street, Big Oil, Big Tobacco, Big Money Campaign Financing, etc. If McCain is a "Maverick" it is because in what little difference there is in the actual direction of the Republican and Democratic parties, there are some issues in which his rhetoric is that of Democrats instead of Republicans.

So, in the end, I am uncertain if I can swallow all of this and vote for McCain/Palin or if I should cast a protest vote.

Any help would be appreciated!

A couple of Political Vids

Just for your general interest.

http://www.youtube.com/watch?v=VtxRU2QXJ8Q&NR=1

http://www.youtube.com/watch?v=trqB6p02Kek&feature=related

Youtube

I like youtube...for the most part. A while back, I linked a bunch of youtube vids to this blog - found over to the right. However, since then, I have gone back and looked and a lot of my linked vids are no longer available on youtube. This is mostly due to copyright lawsuits.

If you read my economic posts, you will probably figure out that I am basically in agreement with this. Say a movie company makes a movie. Someone - the movie company, the actors, etc. actually 'own' the product. Not just anyone can then 'broadcast' this product. The production company has invested its money, as well as the time and talents of its workforce in the production. The actors have invested their time and talents. These are the people who whould reap the financial reward, if any, from the viewing of the product. They have taken the risk of their time and money - they get any reward. They - someone in this chain anyway - own the rights to broadcast the piece when and where they choose.

Now, if someone, without permission, 'broadcasts' snippets from the movie on a site like Youtube, they are doing something they have no legal right to do. I guess I also have no legal right, therefore, to link to the youtube post so that my millions and millions of readers can see the snippet. Often then, when someone posts a two minute segment they find funny or meaningful on Youtube, sooner or later the owners of the piece file against youtube and have it removed. All well and good. Philosophically I do not have a problem with their petitioning at all.

However, I tend to think it possibly a bit unwise. Watching a two minute segment on Youtube will not prevent anyone from spending the money on the product. It might actually encourage it. Watch a two or three minute segment and think its funny and you might actually go rent the movie. You might even come across a movie you were unfamiliar with before, then go watch it. Actually, rather than gripe to Youtube to have the snippets of their work removed, the production companies need to right Youtube a thank you letter. Really, what it is, is FREE ADVERTISING! Then, when I link it to MY blog, its even more free advertising. You, my loyal millions of readers, might actually go rent a movie, or by a CD, or something because of a link on my blog. Why do you think every small time rock band or filmmaker in the world posts their work for free on Youtube or other web based sites? It gives them a chance at a sale!! Just see my own kids stuff on there!

At any rate, I just removed about half the links I had to Youtube because they were no longer available. Bummer. You guys, the millions of followers of the Groaning Philosopher are the real losers in all this!!

Interesting little blurb about the Census questionairre I found at the Ludwig von Mises Institute website.

http://blog.mises.org/archives/008233.asp

Reading List

This post is a continuation of the previous post below. There, I talked about the lack of knowledge of the general population in the area of economics. I ended by stating that I would continue with a brief reading list. Before perusing this list, you may want to read the previous post to get an idea of where I am coming from.

I do have a few of caveats concerning this list: 1) This list is not to suggest that any and every thing said by each of these is absolutely without error – this is not a wholesale endorsement of any or every of these writers and their work 2) some of these writers are Christian of one stripe or the other, and some are not. Ultimately, I do believe that real truth is only to be found in God, its author. Therefore, real truth on earth can only be ascertained by those who faithfully believe in Him. However, this does not mean that unbelievers are not capable of getting glimpses of this truth or teaching it to others. An absolute atheist may be able to calculate the distance between the earth and sun, but have no comprehension of the maker of the earth and sun. 3) I have not myself read all of these. In fact, there are a great many that I have not. However, I am familiar enough with most of the authors to comment. I will try to comment on these issues where appropriate.

Henry Hazlitt

The first place that I send every person I can to get an overall, simple, easy to read explanation is to a book entitled Economics in One Lesson by Henry Hazlitt. (I have absolutely no idea what his religious views, if any, were) This is a relatively short work made up of numerous, relatively short and easy to understand essays on a variety of topics including some of those listed above (minimum wage laws, etc.) His "one lesson" is essentially what I have written about in the previous post, but in his words it is stated thusly: "From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists of looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

He then goes on to do just that, tracing the consequences of various policies and ideas for all groups. I can not recommend this work highly enough. If you never read another work on economics in your life, please read this one.

Clarence Carson

Another writer who is not known to the major portion of the general populace, but who is worth seeking out is Dr. Clarence B. Carson. Dr. Carson was from small town rural Alabama, received an education from Auburn University and Vanderbilt University, taught at both high school and college level, and wrote numerous books and countless articles. His main area of study was history. However, in this he developed an interest and aptitude in economics. Dr. Carson’s most important contribution to this field was, in my opinion, his book The War on the Poor. This book was written in the late 1960s during the peak of President Johnson’s "Great Society" program. Carson demonstrated, both theoretically and with empirical evidence, that all these programs aimed supposedly at helping the poorer people actually causes them harm. (Again, this is Hazlitt’s ‘one lesson’ of economics.) Thus, the so called "war on poverty" of LBJ was actually a "war on the poor." This work is mostly unknown and overlooked. I think it should be essential reading in our classrooms today. Dr. Carson also wrote a book entitled Basic Economics. This is more an overall view of economic thought with the various economic theories explained. I do believe Dr. Carson was a man of faith, though I am uncertain his denominational affiliation.

Gary North

Dr. Gary North is a controversial figure for numerous reasons. I will very briefly mention them here, but without any personal bias. Dr. North is a very conservative Christian with ties to certain minority wings within the reformed Christian right. This alone, of course, makes him at the very least a little suspect to those anywhere to the left of Jerry Falwell. However, the biggest problem within the circles he has run in seems to be in-fighting. All points theological and otherwise are firmly marked out and anyone within those circles who steps outside the lines then becomes outcast, or makes the others outside their own lines out to be the outcast. North has probably been on both sides of the "I’m the real reformed Christian" arguments.

As an example, North had strong ties with Dr. R. J. Rushdoony - probably the most important man in the circles in which he runs. He even became Dr. Rushdoony’s son in law. However, North and Rushdoony eventually had a falling out from which they apparently still had not mended at the time of Rushdoony’s death a few years back.

Dr. North is also noted for his sensationalism which is sometimes a bit over the top. He was one of the louder voices forecasting the Y2K disaster. He even personally staked his own professional reputation on his being right about the pending doom stating essentially that if he was wrong about it then no one should ever listen to anything he had to say again. Many of his followers spent tons of money preparing for the disaster. Of course he turned out to be wrong. Of course he keeps on opining on a variety of topics and of course a large contingent of his followers were unswayed by his inaccuracy.

Although I have never met nor spoken to the man, I know several who have had direct contact with him. My understanding is that there can be a lack of Christian love, humility and charity in his personality.

All the above is simply expanding on my caveats that I started with. I know Dr. North is a Christian and I do not question the sincerity or orthodoxy of his faith for one minute. However, I would be very uncomfortable totally aligning myself with his name.

That said, Dr. North has done a tremendous amount of work in the area of Biblical economics (which seems to be his area of special expertise.) If we ignore him because of the above stated reasons we may be missing out on some thoughtful insight. Some of Dr. North’s books include his being publisher of a series of books called Biblical Blueprints. In addition to being the publisher, he was the author of several of the volumes. Pertinent titles in this series include Inherit the Earth: Biblical Principals in Economics; Honest Money:Biblical Principals of Money and Banking; In the Shadow of Plenty; Biblical Principals of Welfare and Poverty (Written by George Grant). In addition to this series, Dr. North has written An Introduction to Christian Economics and Coined Freedom: Gold in the Age of the Bureaucrats. Finally, Dr. North’s lifelong project has been to produce an economic commentary on every book of the Bible. This is a very ambitious project and will likely not be completed. However, he has produced several such commentaries. Dr. North also writes numerous newsletters and has various websites he either runs or contributes to.

I have read several of his works and find them to be solid in the area of economics and would recommend them. This is not a wholesale endorsement of everything he has ever said, nor even of the theories of economics laid out in these books. However as part of forming an overall understanding of economics from a Christian perspective, Dr. North is very valuable.

I would absolutely recommend Honest Money as being almost as indispensable as Hazlitt’s work.

David Chilton

David Chilton was a theological writer who produced one of the greatest comentaries on the book of Revelation ever written. He was also for a time closely associated with Dr. North. (I think they ended in a theological squabble.) While he was working with Dr. North, Chilton produced a book entitled Productive Christians in an Age of Guilt Manipulators. This book was a biting, somewhat sarcastic response to a book published previously by Ronald Sider entitled Rich Christians in and Age of Hunger. Sider’s thesis was that it is a disgrace that there are Christians (mostly American) who are rich while the world is full of poverty. His solution, of course, was government programs. He attempted to use scripture to justify this position stating that God is always on the side of the poor and against the rich. Chilton demolishes this thesis biblically.

Because of his sometimes caustic wit, this book is often looked down upon as negative. However, if one can read through the biting humor, one can learn quite a bit about biblical economics here. Chilton’s book is not anti-poor, nor anti-charity. It is anti-forced governmental solutions to these problems. If you are somewhat sympathetic to his views, this will be one of the most entertaining books on economics you will ever read. If you are not sympathetic to his views, I would not recommend reading this until you have had a full cardiac exam.

Ludwig von Mises

Mises was, as far as I know, not a Christian. I am not even sure I understand exactly where he is coming from. Mises did not necessarily see some form of moral correctness or superiority of the free market, honest money system. He simply saw very clearly that the outcomes of this system were always superior to the outcomes of any form of planned or managed economy. On the one hand, therefore, he wrote from an empirical standpoint. We can study the theories behind the various economic systems and come to definite conclusions. We can then study these systems in practice and see these outcomes.

On the other hand, Mises was, correctly I believe, doubtful of the ability of the economist’s ability to empirically study a specific effect of a specific economic activity. That is because unlike with the physical sciences, economic factors can not be isolated in a laboratory type setting. We can not, for instance, hold all things constant while varying minimum wage, then measure the effects of the minimum wage. This is impossible. The economy is dynamic, not static. The whole economy is constantly changing. How can we therefore, amidst all this change, measure the effects of minimum wage? However, minimum wage can be shown very definitely in theory to have a negative impact. We can look at the overall economic policy of a nation and determine if it is sound or not theoretically. We can then look and see if our predicted effects are generally coming about in the economy.

The system of economics that Mises is associated with is called the Austrian School of Economics. This line of thought is not necessarily religious. However, the economic theories on paper are quite similar to what some see as the biblical system of economics (sound money, limited government intervention, etc) Because of this, Mises and his crowd were known to at least cross paths with Rushdoony, North, and their crowd.

Mises wrote tremendous volumes. I mentioned several of them previously. Human Action, The Anti-Capitalistic Mentality; Socialism; The Theory of Money and Credit are among his most widely read works. Much can be learned about Mises and the Austrian School from the Ludwig von Mises Institute located in Auburn, Alabama. They also have a website. It may be worth researching.

Murray Rothbard

Rothbard was a student of Mises. He was not a Christian, though apparently he had a great deal of respect for the Christian tradition of the West. Of interest are his book America’s Great Depression and his magnum opus Man, Economy, and State. He wrote many others as well as countless articles and essays.

His America’s Great Depression absolutely demolishes the myth that the depression was caused by the free market and that the nation was rescued by government intervention. The actual truth is that the depression was caused by government intervention, made longer and deeper by further government intervention, then masked by yet further government intervention which continues to this day.

Other writers who may be of varying interests include Dr. George Grant, Thomas Sowell, Llewellyn Rockwell and others. Do some internet searches. Also, the standard historical read for economics students would be Adam Smith’s The Wealth of Nations (1776).

Generally speaking then, I would recommend the following:

Start with Hazlitt to get a simple, easy to read, easy to understand introduction into general economic thought. Next read Carson’s Basic Economics to get a broader, overall view of the study of economics, followed by his The War on the Poor. From there, if you are still interested, read some of North, et al Biblical Blueprints series, at least the ones that are economic in nature. Particularly Honest Money is a must. From there, go where you may, including possibly some of the others listed above, or others I have not listed.

The Dismal State of Economic Knowledge

I guess about half of what I have posted on here is about how I do not have time to post!!! Unfortunately, I don’t. I have attempted start regular posts on a variety of topics (music, etc.) but have been unable to do anything regular at all. So, I’ll just give up any pretense at regular posting, and just come and go as I can!

The one thing that the nation needs is a religious revival. Every area of life is corrupted by sin, and can only be redeemed by true religion. It has happened before, both on this continent and abroad. It can happen again. If it does, we can expect to see every area of life show signs of redemption. If it doesn’t….well….I’m afraid to speculate.

Religion, faith, God, etc. encompass every single area of life. One area of life that definitely needs redeeming right now is education. Specifically, I am thinking of the level of knowledge and understanding by the general public of economic issues.

In a way, economics is like religion. That is because, like religion, it is universal. That is, economics covers every area of life as well. Every thing you do or do not do, every decision you make, all things in all areas of your life are really ‘economic.’ And since they are done under the One True and Living God who created and governs all things, they are all ‘religious.’ It might seem that if religion is all encompassing, and economics is all encompassing, then either 1) religion and economics are the same thing or 2) religion and economics are competing things. However, this is not necessarily so. To perhaps misuse the amended rules in Orwell’s Animal Farm that stated that while all animals are equal, some are more equal than others, we can argue that while religion and economics are both universal, religion is more universal than economics. Economics is ‘universal’ in that every thing you do is economic or has economic ramifications. However, it does not get to the heart of the meaning and purpose in life – not to mention life’s origins and conclusions. Religion is more broadly universal. But, in relation to our day to day life, what we see, do, act upon, etc. economics can and should be considered universal.

The idea that economics, properly viewed, is in this sense universal, was apparently the view of Ludwig von Mises, one of the leading economists of the twentieth century. While he wrote voluminously on the topic, with such book titles as The Theory of Money and Credit, Socialism, The Anti-Capitalistic Mentality, etc., his most famous work is his overall thesis on economics entitled Human Action. What is economics? Broadly speaking, the study of economics can be defined as the study of human action. Broadly speaking, then, using the term "the economy" is simply a way of speaking about the totality of all human activity. When we say that America’s economy is strong, what we are saying is that by and large, the people’s use of their time and talents is being utilized in a way that is generally beneficial to all. (there are always exceptions, of course) When we say that America’s economy is weak or struggling, we are really saying that people’s use of their time and talents is not being efficiently harnessed for the good of all. This may be for any number of reasons. However, I do believe that if our citizens had a better overall understanding of economics, then by necessity our economy would tend to be strong, rather than struggling.

I know when you think of the word ‘economics’ the first word that pops into your head is ‘money.’ Even Mises of Human Action fame, also wrote, as we said, The Theory of Money and Credit. But, ask yourself, what is money? The answer is that money is really only a medium of exchange. Money facilitates ‘human action.’ It is nothing more, and nothing less. Money is one of the means utilized by humans to allow themselves the most productive use of their time and talents, by dividing their time and talents into usable portions (e.g. dollars) to be traded to others for useful portions of their time and talents.

While every single thing we do is economic, the level of understanding of economics in twenty-first century America is disgraceful. I can not think of a topic that more people know less about than economics, while at the same time people think they know a lot about it. Yet, (other than religion) it is the most widely relevant subject there is.

It is at least partly because of this abysmal understanding of economics that our nation’s ‘economy’ is going in the tank. People do not understand the basic principle of what money is, where it comes from, and how it operates. They do not understand that as far as humans can control such outcomes (which is only so far), as a general rule those who have the most money are the ones who have the most talent and energy, or have used their level of talent and energy in the most useful and productive ways.

They also do not understand (and this is vitally important) that activity by the government, aimed at supposedly improving the ‘economy’, have never and can never actually work. Two caveats are due here. First, the economic interests and security of a people is aided by government when government sticks to what it is suppose to do. Therefore, the preceding comment is not to be taken as a call to anarchy. Property and liberty are at great jeopardy when there is no government. In fact, protecting life, liberty, and property (or even more broadly, the pursuit of happiness) is in fact the very purpose of government. When government does this, and only this, a nation can prosper. It is when government oversteps its boundary lines and tries to do all sorts of things above and beyond this, even including ‘spurring the economy,’ that real actual harm is done to the economic interests of the nation.

The second caveat is that often times what government does ‘for’ the economy does have an immediately obvious and observable positive impact. However, this is usually discriminatory (it ‘benefits’ one group of people at the expense of others), and is always temporary. The end result is always that more harm is done to the whole of society than could ever be justified by the temporary gain by a few. In the long run too, it is usually the early ‘beneficiaries’ who ultimately are harmed the most. And of course, this is usually the poorer among us.

To consider some examples of the above think of government action such as welfare payments, minimum wage laws, rent controls, price controls, public works projects, work week regulations, tariffs to protect industry, pro union legislation, windfall profits tax, and on and on. These are all economic intrusions by the government, are all aimed either at helping the lower classes or conversely ‘soaking’ the rich. They all can have immediate, obvious benefits to some group (I make $5 an hour and the government magically makes $7 an hour the legal ‘minimum’ wage – I get a $2 an hour, or $4160 per year raise – great, right???). However, all of these intrusions in the end are impossible to accomplish, hurt the overall economic system of the nation, and in the end, hurt the very people they intended to help. (Consider the worker who got laid off because he was only worth $5 an hour to his company and not $7)

What inevitably happens though, and this is why I believe our economy is possibly on the brink of disaster, is that our leaders pass such laws as these and more; they may or may not have a temporary, limited positive impact; then the longer term, wider impact is negative – economic indicators grow worse. The response of our leaders is always the same. It is not to repeal the damaging laws. Instead it is to pass yet more of the same. This does two things. First, it may (or may not) ‘spur’ the economy, or some portion thereof temporarily. Secondly, though, it makes the situation even more precarious. Economic indicators eventually take a down turn again, and the government responds with more of the same.

The long term impact of this is that of visibly perceived wealth and greatness of a nation, propped up on a horribly shoddy foundation. To use religiously charged language, it is a house built upon the sand. You know what happens to such houses? Eventually they fall, and "great is that fall."

In essence our economy is stacked up on phony money generated by phony government action. To put it in individual terms that are easy to understand, consider that you or I could live an apparently wonderful prosperous life if we had several credit cards with no or very high limits. We could spend and spend. We could also finance fancy cars and large homes, high class vacations, etc. To all the world we look rich. But one day, citi and Capital One will come calling, as will the auto financiers and the mortgage company. If we live like that there are only three possible outcomes: 1) we fall and fall hard 2) we repent of our economic sin, tighten our belt, sell off what we can and pay down our debts and begin living responsibly if it is not too late or 3) we get lucky and die before the fall, leaving it to our children and grandchildren to pick up the pieces.

Our politicians and their in-house economists are banking on number three. One of the leading economists of the last century even admitted it. When asked about the long term effects of his economic plans, John Maynard Keynes stated, "In the long run, we are all dead." That is the type of people who are planning and running our economy.

In summary, I believe our nation needs first and foremost a religious revival. Secondly, and on the heels of this revival, we need a revival of knowledge and understanding – especially in the universal area of human action known as economics. Until this happens, we will continue to get more of the same and this skyscraper built on sand will eventually fall.

To perhaps prime the pump a bit, the following post will contain a few suggested readings.

In praise of Ebay

You gotta love Ebay! I'm learning to. Been selling off miscellaneous junk around the house. I am currently selling much of my mother's treasures for her (at a commision of course!) In a couple of months, I have sold about $2K worth. I haven't even scratched the surface of mother's collection. I can't wait to see what happens.

I hear about 75 million people visit ebay's site daily. 75 MILLION!!!! What a market! Sure, I could place a classified ad in the paper - spend a lot of money and have maybe a handful of people see it.

Or, for about a nickel, I can place an 'ad' in my own store and be exposed to millions all over the world. What a great concept.

I am sure it is only a matter of time before our wonderful government intervenes and ruins it for us all like it always does. But, in the meantime, if you need glassware, antiques, or anything, stop by my store!!!!

The Great Fraud

Ok, I have found a bunch of my old stuff and am in the process of posting it. This is something I wrote several years ago when in a particularly foul mood.

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I have always believed that taxes in general were entirely too high. By the time I pay my federal and state taxes, my property taxes, my vehicle tags, my fire dues, the sales tax on nearly every purchase - not to mention all the taxes which are built into the cost of nearly every product or service I obtain and that I have no idea how much they may be - I have lost a great deal of what little money I make to taxes. I realize that some level of taxation is absolutely mandatory if we are to have the necessary government functions pertaining to the protection of the life, liberty and pursuit of happiness of every individual. However, the level of taxes we pay, as well as the "services" rendered for them, are far out of line with where they should be.

Beyond all this, though, lies an even greater problem in my mind. Recently while filing my federal return for this year, I came to realize that even these taxes, as "taxing" as they are, do not get under my skin to nearly such an irritating level as the one other tax I have to pay which is not even mentioned in the rather substantial list above. I am talking about the Social Security tax.

Previously this was not as noticeable, nor as maddening as it is now. For, unlike in years passed, I have for the past several years been self-employed. The self-employed person must honestly make account of every penny he has earned, then honestly account for every expense he deducts from that. Woe unto him who makes a mistake in all this complicated business! Once that net income is calculated, we can take a generous discount of just over seven and a half percent from it. This new figure, over ninety two percent of our net income, is then taxed at a rate of just over fifteen percent. That is to say, my actual net income is taxed at just over thirteen and three quarters percent. This amount goes to the Social Security fund.

Think about that for a minute. On top of the federal, state, local, sales, property, and other taxes I have to pay, here is another almost fourteen percent of every penny I make taken away from me and my family. Considering such essentials as food, clothing, housing, transportation, and health care, which together run into the thousands of dollars per year, as well as other taxes, which run into the thousands of dollars per year, I still have to consider yet this further tax, which runs into another several thousand dollars per year. Just exactly where in the world does the government suggest I get this money? I can not cut out such essentials as food and clothing. However, I can not cut out such non-essentials as taxes, for if I did, I would likely end up in jail. Great system!

It would be humorous were it not so sad, that the very people who have placed all these onerous tax burdens upon us, are the exact same ones who claim to care about the working man. Well, I really do not know what exactly you would call me (and millions of others) but a working man. Frankly, I think I prefer to do without the help. In fact, I can not afford this type of help! If Washington actually cared the least little bit for the common man, or even the not so common man, they would do everything in their power not to hinder man's attempts to better himself. Taxation of any kind is a severe hindrance. While some level of it may in fact be necessary, surely we must reign it in. Social Security would be an excellent place to start.

I have been self-employed for about three and a half years. Thus far, I have been slowly growing my business until this year, for the first time I made a noticeable improvement. Thus far, I have been living largely of the "fat" I had earned before. That is to say, I have been slowly dwindling what I had earned while gainfully employed in the highly regulated semi-private sector. This year, I made great headway and did not have to skim quite as much fat as before, though I still had to fall back on some money previously set aside for retirement just to pay my bills. However, having just barely stayed afloat, I am now faced with a tax bill which I am uncertain at this time how I will meet, especially when considering that I now also have this year's income for which to continue to pay these taxes. The overwhelming cause of this problem is not state or federal income taxes, though. It is the self-employment tax which is for Social Security.

"Oh", but you say, "This is for you! This goes into helping you finance your retirement." Oh, okay, I guess I am just too stupid to do that for myself!

We need to rise up and call Social Security what it really is. A fraud. A fraud imposed on the masses of citizens of this country.

First of all, do I have any guarantee that I will ever see any of that money again? No. I have heard horror stories of people paying thousands of dollars into that system, then having the misfortune of dying before they reached the age where they can collect. What becomes of all that money they paid in? If I am fortunate enough to receive some Social Security payments some years down the road, is there any guarantee that I will get all of it back, plus simply the interest it could have accumulated had I put that money even in a low interest bearing savings account? No. Maybe I will get none of that money, maybe little, maybe a significant portion, or, maybe if I am lucky, I may get more back than I ever paid in, plus the accumulated interest. This last scenario would require several strokes of good luck, and I am more inclined to think that one of the other scenarios is far more likely.

In the meantime, I have to struggle simply to make ends meet, while someone else is getting paid off the money that I am putting into this money pit. Do I have any guarantee that the people receiving my money need it as bad, or worse, than I? No. Herein lies one of the many insanities of this whole system. The money which is wrenched from my hands, against my will, and which I can not afford, does not even go into an account with my name on it, to be grown and returned to me upon my retirement, at my desire, at some future date. It is placed in a fund used to pay people who are now in retirement. What happened to the money that they put in all those years? It went to the past generations when they retired!

We all know how the mathematics of this system works. The way it is funded, coupled with changes in the population growth, has caused this inane system to grow to the monster that it now is. When this system was started, the ratio of people paying into the system to the people receiving from it was such that the effect on the payers was not really noticed to a great degree. However, the inception of the baby boom generation, along with the lower birth rates subsequent to this, gives us a situation that as the baby boomers retire, this ratio becomes slanted more and more against those who are currently, or will be, paying into the system. Proportionally, less people are paying for the retirements of more people.

This situation is so bad, that if I were to concoct such a system as this, then try to go out on the free market and sell it to individuals who would buy into it of their own free will, it would be illegal. However, when the government does the same thing, only not freely but by force, it is called an entitlement. But an entitlement for whom? I certainly do not feel like I am "entitled" to pay a significant portion of my much-needed income so that some retired executive with about a hundred other sources of income and savings can receive it!

Social Security is such an ingrained part of American Culture now that it is nearly impossible to reform it, much less completely do away with it. The best the politicians can seem to come up with is this rather corny idea that we could now take a small percentage of it, and be forced to invest it in some sort of semi-private market – all still by the force of and under the direction of the government. This still is not right. It is still the government telling us what we are to do with the money we make. I am responsible for myself, and my own planning. I am in business for myself to gain the level of freedom for myself and my family that I desire. I certainly plan to grow this business in such a way as to become independent of anyone else for my well being. However, this is much slowed by the fact that probably well over half of my income goes to taxes in some form or other, most notably to this fraudulent atrocity.

I think the necessary reform for Social Security is nothing less than this: We must make it voluntary. Anyone who wants to "invest" in this system could be free to do so. Anyone who chooses to bypass receiving such "help" from the government and go it alone, could and should likewise be free to do so.

The cry of the entitlement crowd can already be heard. "But if it were voluntary, the whole system might collapse!" The answer to this objection is present within the objection itself. This system would collapse if it were not for the government's use of force against its citizens to keep it intact. Any system which requires that free citizens be forced to participate in order for it to "help" them, is surely not a system worth having.

Would you voluntarily give up any supposed benefit you might get at some point in the future, assuming you lived long enough, if it meant more money in your pocket right now – money you could invest or spend as you best saw fit in your own preparation for your own future, as well as your own provision for yourself and your family? I know I would gladly right now give up any claim on any money I may have coming to me in the future - even at the loss of the thousands of dollars I have already put in - if it meant that I would no longer be forced against my will to place yet more money into the fund. I will gladly provide for the needs of myself and my family. I will gladly prepare for my future. I will gladly voluntarily help those I can. But I will support such fraudulent entitlements as this only at the threat of violence, which is precisely the only reason that I am going to find some way to meet this current tax burden.

The Vacation Property Scam

On an earlier post I wrote about the dangers of multi-level marketing (MLM). I actually have a planned follow-up to that post which chronicles further experiences I have had with the MLM "pod people" as I have heard them called. However, one of the main points of that post was that you should always be leery of any "opportunity" in which you are promised great things, but in which direct answers to pertinent questions are not given. I would like to discuss briefly another scheme that is out there that you may or may not have been exposed to, and which you may have even fallen victim to. That scheme is the vacation property scheme.

I don’t use the word ‘scheme’ here lightly. I do believe that when you are offered something in a high pressure way, told you must do it immediately, and are belittled if you don’t, there must be more than meets the eye. These things have all the characteristics of a scheme, a scam, and a sham.

Actually, my very first encounter with high pressure sales pitches had nothing whatever to do with either MLM, property, or anything of the sort. My first encounter was as a young man in my late teens or early twenties and pertained to a workout gym. I was not totally into that sort of thing (and my physique would make that clear!), but I had a friend who was. I went as his guest one time. I guess it was ok, but it was just not my cup of tea. However, someone there cornered me, and wanted to talk to me about joining. They had a ‘special deal’ that was just going on right then. If I did not sign up that day, I would never again be able to get in at that rate. I could not leave, think about it, and come back another day to sign up. I must do it right then or lose out.

Now, I was young and naïve. I had very little experience with such things. I was not an aggressive or assertive person. If it was anything other than money, I may have fallen for it. But, as I stated in the post on MLM, I, for whatever reason, have always been very tight when it comes to my money. And, seeing as how I was not totally fired up about paying money in order to have the opportunity to go do hard and painful exercises, I politely declined. This against the protests of the salesperson. I thought he was going to follow me out to my car and hound me all the way home. "You’ll NEVER get an opportunity like this again!!!" he said over and over.

About two weeks later I saw an advertisement in the local newspaper for that very same gym offering that exact same offer open to the public. A valuable lesson was ingrained in my mind that day. I have been leery of high pressure sales pitches ever since.

With that as a background, lets fast-forward a few years. I was in my mid-twenties, had a beautiful wife (still do!) and a wonderful young baby boy (who is now a young man in his late teens). We received a call or letter or something about coming to hear about an opportunity for a vacation property. Simply for showing up and hearing their pitch, we would receive some sort of nice prize (I don’t recall exactly what it was in this instance).

Now, as I recall it, this was a ‘resort’ being built on one of the nicer lakes in our region. We were shown a little of the property, and given promises of things that were in the works and going to be built. (Hint number one: don’t believe it til you see it. If it ain’t already built, it may never be!) After being greatly impressed, we began talking money. Frankly, I do not remember how much the money was. I do know it seemed like a whole lot to me at the time, and the thought that I was paying for a lot of possible future use in a single place that is not even completed yet gave me pause for concern. Again, I was not the most cunning of men, but somehow when it came to money, I was one of the most cautious.

Now, to paint the picture a little clearer for you, all this was taking place in a large room. There were many people there being given the same sales pitch as I. During the time I was there, perhaps five or six people actually agreed to a purchase. Each time someone did, the salesmen would stand up, ring a loud (and quite annoying) bell, and make an excited announcement. This atmosphere was similar to the ‘pep rally’ atmosphere at the MLM meeting I would attend a few years later and described in the MLM post. I guess some people really love attention like that. Not me! That actually gave me further resolve to not buy into the sales pitch.

So, I began the process of declining. This promised "no pressure" sales pitch suddenly took a turn for the worse. The guy just would not let it go. He would not take ‘No’ for an answer. I remember him pointing to my wife and my baby and saying "If I had a beautiful family like that, I know that I would want to provide them with a nice vacation place for life."

Well, that was just too much. Mess with my money and its bad enough. Question my devotion to my family and you have just gone too far. We got up, got our crappy prize, and left.

Over the years, I have had several other opportunities to go on these things. It was usually the promised prize along with a promise of no high pressure sales that got me to go. However, none of these ever seemed to work out quite like it was planned. One time, we were promised a grill and so many pounds of steaks. The grill was cheap and lousy – I don’t think we ever used it. The steaks were almost indescribable. I didn’t even recognize the cuts of meat. They were about as tender as a steel belted radial and probably less tasty.

Once, I received an invitation to one of these things that had five scratch off numbers. The instructions said that if you scratch off a series of two you get a certain prize. If you scratch of three you get a better prize. Four and five are even better prizes. When I scratched my five off, four of them were of the same number. The prize for four was some huge color television. We kinda needed a new television at the time, but I was skeptical. I read and re-read the thing over and over looking for the catch. I could not find it. I finally decided to go, knowing I would turn down the offer, and thinking I would get my great new television set for my trouble. My biggest concern was how I was going to fit that thing into my car. Yet, in the back of my mind, I feared there was still some catch to it. I just did not know what it was.

When I finally convinced the salesman that I was not going to buy, he said, "Well, give me your invitation so I can see what prize you get." Nervous, I gave it to him. He said, "Well, you have a series of two, and you get such and such prize." I don’t remember what it was, but I know it was crappy. I said, "But I have a series of four and that gives me the big TV set." "No, you only have a series of two. That gives you this crap prize."

I don’t remember the exact numbers I scratched off, but, let’s just I scratched off something like 3-3-7-3-3. Four threes, right? I get the prize for four of the same, right? No. It had to be a series. Had it been 3-3-3-3-7 then I get the TV. Instead, I just got the prize for the series of two. It was such a wonderful prize that to this day I do not remember what it was!!! Maybe this was the cheap grill and bad steaks - I really don’t remember. Actually, I do not even remember what the sales pitch was for on that particular trip.

However, I am convinced that the whole thing was a scheme. They knew that a lot of folks would think they had won the television. That got them there. Then the high pressure sales would catch some percentage of those who took the bait. What a system!

I think these offers went on for years on the basis of baiting people with the promise of a great prize, when the actual prize was not quite what you had in mind. One acquaintance of mine, who happens to love boats, received an offer that involved the prize of a sailboat. After the pitch, he asked about it and was told that they would mail it to him. How do you mail a sailboat? Turns out, it was a blow-up raft.

Another acquaintance received an offer promising a five piece entertainment system. He got a walkman, headphones, and three batteries.

Eventually, though, enough people apparently got skeptical about these tactics, and the sales people had to up the ante a bit. My further experiences did involve somewhat better prizes, but the experience itself was still very negative.

The next specific experience I remember involved a condominium that was located in my favorite vacation location – Orange Beach Alabama. We were contacted via the telephone and asked to come to the presentation with the promise of two nights at a nice hotel, a thirty dollar gift certificate to one of various restaurants, and perhaps another prize or two – I do not entirely recall. We did receive these prizes, and did enjoy them very much. My wife and I had a wonderful weekend. The gift certificate we received was even from our favorite restaurant. No complaints here.

However, the sales pitch itself was simply awful. One thing that has changed considerably from the earlier years of timeshare condominiums and vacation resorts is that now you essentially buy into the system where you can stay at resorts virtually anywhere in the world. Without going into the specific details of this particular deal (I don’t really remember them anyway), suffice it to say that we spent about an hour and a half with this lady, and the cheapest product offered to us was in the neighborhood of fourteen thousand dollars. Apparently the lady took my interest in seeing one of the rooms as an actual interest in purchasing one. Everything was fine until I repeatedly made it clear we were not buying. The last thing the lady did was very nastily say "Well, you shouldn’t take any more free vacations!!" That hacked me off!

That experience was in November, 2001. I specifically remember it because it was on the day of the University of Alabama’s last victory over Auburn in football! Only recently have I had another experience.

We had an opportunity to spend a week in Branson, Missouri free of charge at a condo of a friend. During the week their sales department called the room and offered me one hundred twenty dollars cash on the spot to listen to their pitch. Short on cash, I agreed. Basically the same pitch was given once again. Vacation paradises all over the world were mine for the asking. However, shortly into the process, our lady realized she did not have a sale. They were obligated to spend an hour and a half with us. She started basically going through the motions. It was somewhat humourous. Finally, she said, "All I can offer you is thus and so and the cost is, gulp, fifty three thousand dollars. I am quite sure that you are not interested in that, are you?" Of course we were not. Not only this, though, but they could finance this fifty three grand at credit card rates for us. Yippee!!! "However," she continued, "I’ll call John. He is authorized to give you some alternate opportunities."

Well, along came John. He was offering something quite less expensive. We were still pretty adamant that the answer was no. So, he told the original sales girl to go ahead and sign us out and get our prize. She left, and shortly thereafter an older friendly looking lady came over and began basically an exit interview. "Were you treated nicely?" "Do you understand our offers?" etc. But, slowly the questions began changing. "What is your reason for not purchasing with us today?" "On a scale of 1-10, how interested do you think you would be in buying in at some time in the future?" etc. Next thing I know, this friendly retired nurse was making the final push. She leaned over the table as if she was taking a chance telling us this and said "I’m authorized to give you this very special offer…." then went on to give one last ditch try to get us hooked. This was apparently some sort of a trial offer for only about twenty five hundred dollars. After wrestling with her for a few minutes, she finally gave up the ghost, gave me my cash, and let me go. I hated every minute of it, but I guess a hundred and twenty dollars for less than two hours of work is a pretty good rate!

Now, all of this so far has been a brief description of my experiences, but, analytical mind that I am, my real intent is to analyze in very broad and not too specific terms why one should never buy into one of these offers. It all boils down to simple economics. However, the majority of people today are totally uneducated in the field of economics. They are therefore apt to fall for something that ‘sounds’ like a good deal.

A great introductory book concerning economics is Henry Hazlitt’s Economics in One Lesson. The ‘one lesson’ referred to in the title is essentially that, when considering economic policy, one has to look beyond what is immediately obvious at first glance as a short term limited result and look further and deeper to the longer term, wider impact. He then demonstrates how this works by examining a number of faulty economic premises in light of this one lesson. For example, minimum wage law in the immediate, short term, appears to have a very positive effect in that people, particularly poor people, can make more money. However, the wider, deeper, longer-term effects of minimum wage law are in fact quite damaging to the economy as a whole, and particularly to those at the lower economic levels. To see all of this takes some fairly deep and lengthy thought processes that may not be readily available to every person.
Now, were you of a lower economic status than most and your local politician offers to raise the minimum wage, you would most likely support him in his efforts. However, if someone educated you on the damages of minimum wage law and showed you that in the long run it would in fact bring harm to you, you would likely not support it. What you may need to get to the point of understanding this economic impact, though, is time to understand the arguments and think them through.

Now, in considering the vacation property offers we discussed above, the one thing that is absolutely not available is time to think. If reading this blog accomplishes absolutely nothing else than the following, I will be satisfied: Always be leery of any offer that sounds great, yet must be taken advantage of on the spot with no time for further consideration. Perhaps that can be considered "Personal Economics in One Lesson."

Every single time I have ever gone to one of these sales pitches, (including also the one from the gym) I have been told that I simply must take advantage of it right then. I had to buy while I was there. Virtually every time when I did not buy immediately, the seller began sweetening the pot with supposedly better offers, but the pot was never sweetened with time. I always asked for brochures, literature, and further information about the costs and benefits of the plan, and have yet to receive one single bit of information that I could take home and contemplate. At least once, maybe more, when I asked about further information was asked in return "Well, what information have we not already given you?" This is a stupid question. If I knew what information I had and did not have, I would not need to ask for more. The only thing that was ever shown me (and this is eerily similar to the multi level marketing scams) is a few numbers scratched on a piece of paper by the salesperson. And even this was not given to me to take home and consider. When all was said and done, I left with no information whatsoever. Please consider that fact before you buy into one of these deals.

So, the next time you go to one of these sales pitches be sure to ask yourself: "If this is such a wonderful opportunity for me, then why do they not allow me to see all the numbers and take it home and think about it for a few days?" If it is in fact a great deal, you could determine that yourself and you would likely come back to them with a purchase.

A lot could be said, and perhaps in another blog I will say more, about how to consider offers such as this should you ever have the information needed to analyze it. It is highly doubtful that you would ever receive that information from a salesperson of this sort, but the process of analysis can still be useful in multiple situations.

The long and the short of it, though, is this: With one of these deals you pay a large, very large, sum of money up front for the right of staying in a condo in the future. The latest one I went to allowed you to buy a certain size (one, two, three, or four bedroom) and a certain amount of time per year. Actually, even this was not so simple – you actually pay for a certain number of ‘points’ that can then be redeemed for certain amount of space and time per year. That is, of course, not explained in any detail, so you really do not know how much you have bought, nor do you know how much you will specifically need in the future. Therefore, you may be paying for a lot more than you need, or a lot less. You really do not know. But, once you pay this large sum, you have some certain amount of time and space in their condo resorts for some amount of time (even for a lifetime if you buy the lifetime package).

However, in addition to this, these things always have other charges that come up annually. These are usually refered to as ‘maintenance’ fees and are supposedly used for upkeep of the property. These things tend to have a way of starting out very cheap, then going up through the years. I know of people who have bought into these things and eventually their maintenance fees go up to hundreds of dollars per year.

Now, the only way to determine if you have saved money or lost money on such a deal would be for you to know and understand exactly what it is you have bought, exactly what your needs would be for the next so many years, know exactly what the rate of increase in vacation rental space would be, know exactly what the increase in your maintenance and any other fees would be, know how much interest you could make if you did not spend the large amount up front, etc. and then make a comparison. It is almost impossible for an average Joe or Jane to know all this, but I’ll bet the accountants working for the resort sales companies have a pretty good ideal!
But, as an example, say, you spent twenty five thousand dollars now, and began paying two hundred dollars annually in fees, but that these fees go up by fifty dollars each year. Now say you could get the same room for a week this year for a total of fifteen hundred dollars. Assume this goes up by five percent each year. So, comparing your two options, you could spend twenty five thousand dollars now, and two hundred plus dollars per year increasing by fifty dollars per year each year – OR – you could invest the twenty-five thousand in a savings account, get five percent per year and take your vacations from the money in that account. These rentals will cost you fifteen hundred dollars per year going up at a rate of five percent per year. Based on these assumptions (which may or may not be realistic – I just made them up) it would take at least twenty years to break even. That is, if you purchased this plan, it would take you over twenty years to start actually saving money. Less than twenty years and you would have actually come out cheaper not buying the condo and instead just renting for a week each year. This analysis does not even consider the economic impact if you bought in and had to finance the deal at essentially credit card rates.

Now, in twenty years a lot could happen. You may lose a job, have an illness, or other financial hardship. Would you have rather spent that money on still future potential vacations, or would you rather have invested that money? What if you, or your spouse, or both, passed away ten years from now? Was that a wise investment? Essentially what you are doing on one of these offers is paying for future vacations way ahead of time. That is almost never a wise thing to do (unless you are the seller of such a plan). Would you go down to the local car dealership, and pay him twenty five thousand dollars for a car you will get twenty years from now – even if that car is then worth fifty thousand dollars? I think not. Why would you do this with rental property?
Now, it is certainly possible that some people get in at the right time, have many years worth of vacations, and in the end, spend less than they would have otherwise. In most cases this is very doubtful, but it is inevitable that a few come out very good. I am sure the sellers of the condos know and understand this. But, I can guarantee you this one thing: We have only touched on the economics of doing this. The companies that market these deals have paid experts looking at the economics of it. Do you think they have your economic security or their profit in mind? I have absolutely nothing against a company making a profit. I want to make a profit. But, these guys make huge profits by, in my opinion, defrauding their customers. They make you think that you have just gotten the deal of the century, when in fact, they are laughing all the way to the bank. You or I may not be able to fully grasp and analyze the economic impact of a deal such as this but I assure you that the selling company knows the general economic impact for the bulk of their sales. Think about that before you buy into such a deal.

In the end never ever buy into anything that you do not fully understand the terms of the deal, especially if information on the terms is not forthcoming and time is not given to analyze the terms.