Sam Houston Tea Party
November 21, 2011
AMERICA’S CHALLENGEWHY WE ARE HERE,
WHAT’S COMING, WHAT WE CAN DO.
Disclaimer
This Presentation is based on information available to the public from various sources at the time of writing as well as various private and internet sources. No assurances are made for the accuracy and correctness of the information in the Presentation and the consequences being a result of using the information herein. New and different information may be available at a later stage that can vary or modify the current views. The information, opinions, and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect my current judgment and are subject to change without notice.
Lyle Henderson
PERSPECTIVE• Used to hearing from Politicians and Pundits.
• Politicians focus on getting elected.
• Pundits/Media focused on “sound bites”
• Engineers trained to look at the numbers
• Look at analogs
• Understand the underlying forces
• Boil down to solutions
TALK OUTLINE
• America’s Financial Problem
• Global Demographics
• Europe
• Progressivism
• Civilization
• Solutions
AMERICA’S FINANCIAL PROBLEM
Problem started with:Lyndon JohnsonWar on PovertyGreat Society
Poverty is 14%
Poverty is 14.3%
55% or 16,700Per family
33% of avg income
GDP BY COUNTRYU.S. 14.5 T $
China 5.9
Japan 5.5
Germany 3.3
France 2.6
U.K. 2.2
Brazil 2.1
Italy 2.1
Current Growth Rate
Great Society
In 2000,Alan Greenspan Said by 2011 we wouldbe debt free.
U.S. DEBT PROBLEM• US Revenue: $ 2,170,000,000,000
• Federal Budget $ 3,820,000,000,000
• New Debt $ 1,650,000,000,000
• National Debt $14,271,000,000,000
U.S. DEBT PROBLEMAVERAGE FAMILY PERSPECTIVE
• Revenue: $ 50,000
• Spending: $ 88,000
• New Debt $ 38,000
• Cumulative Debt $ 328,000
RAISE “REVENUE” ?
U.S. GOVERNMENT REVENUE2012 PROJECTED
• Individual Income Taxes $1.14 Trillion
• Corporate Income Taxes $ 329 Billion
• Social Insurance $ 925 Billion
• Other $ 233 Billion
• Total $ 2.6 Trillion
0%
5%
10%
15%
20%
25%
30%
35%
40%
Top 1% 4-5% 6-10 % 11-25% 26-50% Bottom 50%
Share of AGI
Share of FIT
ADJUSTED GROSS INCOME AND FEDERAL TAX
+$392,000 +$33,000+$160,000 +$114,000 +$67,000
2008 numbers
TO PAY FOR OBAMA’S $ 1.6 TRILLION DEFICIT:
• Raising Marginal Tax on top 1% from 35% to 39.5%
• Raises only 50 of 1,600 Billion needed.
• Raise all tax brackets by 5% (e.g. 15% 20% or +33%)
• Raises only 200 Billion
• Double Taxes on top 10%
• Raises 1.37 Trillion
• But: At what cost to the Economy?
THE WEALTH TAX• Spain is re-introducing it.
• France has long had one.
• Italy is considering one.
• Tax on physical assets, Financial assets, Pension funds, etc.
THE GREEDY 1%A LESSON FOR THE OCCUPIERS
• When you see the poor around the world and the concentration of wealth in the hands of a few, don’t you start having doubts about Capitalism and greed?
• Tell me a society that doesn’t run on greed. Do you think Russia or China don’t run on greed?
• The world runs on individuals pursuing their self interest.
• The great achievements of civilization did not come from Governments
• The only cases where the masses have escaped grinding poverty is where they have had capitalism and relatively free markets.
• The masses are worst off in societies without capitalism and free trade
• But it doesn’t seem to reward virtue as much as ability to manipulate the system.
• What does reward virtue? Do you think a soviet commisar rewards virtue? Or a Hitler rewards virtue?
• Where do you think you will find these angels who will organize society for us?
Milton Freedman being interviewed by Phill Donahue – 31 years ago
CUT SPENDING?
WHERE?
Cut to Eliminate Borrowing
20% Cut w/0 cuttingEntitlements
Medicade
Medicare
Social Security
Military
Interest
Other
THE LIMIT TO NATIONAL DEBT
• Washington is dependent on the bond markets being willing to absorb an increase in federal debt:
• $ 100+ Billion every MONTH.
• Equivalent of the GDP of Canada or India every year.
• We know we are outspending America
• What happens if we outspend the entire planet?
MONETIZING THE DEBT
EXPERIENCE TEACHES US:• Mid ‘60’s Fed started buying Treasuries to finance
Vietnam War
• Led to Recession of late ‘70’s
• Job losses
• Inflation
• High unemployment
• Interest rates of 20%
A LOOK AT GLOBAL DEMOGRAPHICS
• Reading Suggestions:
• “America, Alone” and “America, After” by Mark Steyn
FERTILITY RATES BY COUNTRYBIRTHS PER WOMAN
Europe & The West
Italy 1.39Russia 1.42Germany 1.41Spain 1.47France 1.96U.K. 1.91
Canada 1.58U.S. 2.06Mexico 2.29
Australia 1.78
Asia
India 2.62China 1.54Japan 1.21
Africa
Uganda 6.69Angola 5.97Nigeria 4.73
Source: CIA – 2011 est.
2.1 to Maintain Population, Below 1.7 is “Death Spiral”
FALLING FERTILITY RATES• Experts attribute to:
• increasing costs of raising a child
• rising women’s labor force participation
• delayed childbearing
• U.S. fertility remains higher
• increased access to child care
• increased male domestic involvement?
JAPAN’S DEMOGRAPHICSNO IMMIGRATION
GLOBAL TRENDS
• By 2050, most of the developed countries in both Europe and East Asia will become veritable old-age homes:
• A third + of their populations will be older than 65
• Only a fifth in the U.S.
• 30 percent of China over 60
United Nations est.
DEPOPULATION• In eastern Germany, rural communities are dying.
• Sewer systems don’t have enough people flushing to keep the flow moving.
• Environmentalists got it backward.
• Not a question of “sustainable growth”
• But of sustainable lack of growth.
• By 2050: Public pensions as % of GDP:
• US – 6.5%, Germany - 16.9%, Spain – 17.3%, Greece – 24.8%
“END OF THE POSTWAR WELFARE STATE”PAUL S. HEWITT – 2002 PAPER
• Economic consequences of depopulation.
• Current society depends on continued economic expansion.
• Rapidly depopulating nations face “aging recessions”
• vicious cycle of falling demand, collapsing asset values, shrinking corporate profits, deteriorating household and financial institution balance sheets, weakening currencies, and soaring budget pressures.
• 2002 assessment concluded “aging recessions” would begin appearing sometime after 2010,
• and continue for the next three or four decades.
CHINA’S FUTURE• Due to one child policy, China will get old before it
gets rich.
• Millions of surplus young men lead to: convulsions at home or war abroad.
• Has to maximize its power before demographic decay sets in. Incentive to push, hard and fast.
AFRICA• Sub-Saharan Africa will double its population
between 2010 and 2030
• It would be asking a lot for them to remain in the teeming, pathogenic, shanty megalopolises into which the third world’s population is consolidating.
• Pressure to move to Europe or America
AN INSTRUCTIVE LOOK AT EUROPE
0.5 T$
2.2 T$
2.2 T$
THE GLOBAL PICTURE
• About half of the Global Economy
• is living beyond it’s means
• Also beyond it’s diminished number of children’s means
• Instead of addressing that fact
• Countries with government debt of 160% of GPD
• Are being “rescued” by countries with 80% debt levels.
• Good luck with that.
EUROPEAN AUSTERITYPOLITICIANS AVOID IT, BUT:
• Depopulation means government-sponsored insurance and pension plans must change.
• Options are:
• Increase taxes on a proportionately smaller working population
• or decrease benefits.
• A threshold for higher taxation will be reached
• Only choice will be to cut benefits.
GREECE• 1.3 Children per couple
• 100 grandparents have 42 grandkids.
• Greeks retire at 58. Who pays for the last 1/3 of their lives?
• Get 14 “monthly” payments per year for 30 weeks work.
• Work day ends at 2:30 PM
• Ever fewer customers and even fewer workers
• But ever more retirees and more government
• How do you increase GPD?
• By export? To where? Totally uncompetitive.
• Government introduced an austerity package to rein in spending.
• In response, Greek tax collectors went on strike.
GREECE: WILL THEY REFORM?TAKIS MICHAS, WALL STREET JOURNAL
• In the last 12 months not one civil servant has been fired.
• Trying to tax the private sector out of existence.
• In August more than 1000 Greeks in the private sector were losing their jobs every day.
• The government was assuring civil servants with lifetime tenure that their job privileges were not in danger.
• Greece’s plans resemble Soviet five year plans: They look good on paper but have no bearing on reality.
• Anyone in government who tries to point this out is forced to resign.
ITALY• 7 of 10 adults aged 18 – 39
• live with their folks.
• When the government does too much, nobody else does much of anything.
GERMANY• 30% of German women are childless. 40% among
university graduates.
• During the 21st Century, Germany’s population will fall by over 50% to 38 million or lower.
• German worker puts in 22% fewer hours per year than American
• Germany has shrinking economy, shrinking and aging population, and potentially catastrophic welfare liabilities.
GERMANY• U.S. pays for their defense,
• They beat their swords into welfare checks
• Erected huge cradle to grave entitlements.
• 70% of Germans want no further cuts in welfare
• Prefer increasing taxation on the very rich.
• Only 45% believe that competition is good for economic growth and employment.
• Increasingly think of themselves as citizens of the planet rather than citizens of the West
• Do Islamic or Chinese citizens think this way?
EUROPEANS• Work fewer hours than Americans
• Don’t go to church, marry, have kids
• What do they do with all their time?
• When life becomes an extended picnic, with nothing of importance to do,
• Ideas of greatness become an irritant.
• Such is the nature of the European syndrome
• The government makes the grown-up decisions (health care) and they spend their pocket money on our record collection and satellite TV.
BEHIND EUROPE’S PROBLEMS
• People Refuse Cuts in “Entitlements”
• High Taxation on shrinking base causes private job creators to leave
• Europe is Post-Christian, Post-Nationalist, Post-modern,
• But what gives it meaning?
Complements of Brad Schafer - GBTV
THE LONG RUN• Functioning societies honor the long run.
• Why they have children, build houses, plant gardens, start businesses,
• Build churches, create great works of art, fight and die for king and country.
• Europe used to do these things.
• You don’t need to make material sacrifices; the state takes care of it
• You don’t need to have children
• Certainly don’t need to die for king and country.
THE LONG RUN
• But a society that has nothing to die for has nothing to live for.
• So it has 30 year old students and 50 year old retirees
• And wonders why the small band of workers in between can’t make the math add up.
TWO FORCES FACING OFF IN EUROPE
• Modern social-democratic state• American left thinks this should be our
model.
• Resurgent Islam• Immigrants refuse to assimilate
FERTILITY RATES BY COUNTRYBIRTHS PER WOMAN
Europe & The West
Italy 1.39Russia 1.42Germany 1.41Spain 1.47France 1.96U.K. 1.91
Canada 1.58U.S. 2.06Mexico 2.29
Australia 1.78
Muslim Countries
Somalia 6.35Afghanistan 5.39Gaza Strip 4.74Yemen 4.63Iraq 3.67Jordan 3.39Pakistan 3.17Egypt 2.97Syria 2.94Saudi Arabia 2.31Indonesia 2.25Iran 1.88
Asia
India 2.62China 1.54Japan 1.21
Africa
Uganda 6.69Angola 5.97Nigeria 4.73
Source: CIA – 2011 est.
2.1 to Maintain Population, Below 1.7 is “Death Spiral”
FRANCE• In 2005 10% of France’s population was
Muslim.
• 30% of age 20 and under
• 45% in major urban centers
IMPACT OF THE MUSLIM INFLUX
IN EUROPE
HISTORY• 732 AD
• Muslim armies had advanced a thousand miles north of Gibralter to control Spain and southern France.
• At Poitiers, for once, the Christian army held and defeated the Muslims
• Close run thing. What if the Muslims won?
• No Christian Europe
• North America would have been Muslim.
• Now a “peaceful” muslim advance has penetrated far deeper.
“HOW MUCH ALLAH CAN THE OLD CONTINENT BEAR?”HEADLINE IN DER SPIEGEL
• Paradoxically, the Holocaust enabled the Islamization of Europe
• Post war guilt
• Revulsion against Nationalism
• Embrace of multiculturalism
• Europe made its principal source of new Europeans a population whose primary identity derived from a belief system that claimed total jurisdiction over every aspect of their lives.
“HOW MUCH ALLAH CAN THE OLD CONTINENT BEAR?”HEADLINE IN DER SPIEGEL
• Amazed to discover:
• The new “Europeans” assumed that all European social, cultural, and political life should realign itself with the Muslim belief system.
ISLAM AND FREEDOM OF RELIGION
• Islam is a religion, but it is also a legal code – Sharia Law
• There is no “Christian Law”
• English Common Law (and Napoleonic Code) are different philosophically from Christianity.
• Not merely that there is a global jihad lurking in Islam
• But the religion itself is a political project – an imperial project: the global caliphate.
• So, we have a global terrorist movement insulated within a global political project insulated within a severely self segregating religion.
• Whose adherents are the fastest growing demographic in the developed world.
TERRORISM AND WELFARE• It’s not true that every immigrant on welfare is an Islamic terrorist,
• But, the vast majority of Islamic terrorists in Europe are on welfare.
• Living in radicalized ghetto cultures with nothing to do but sit around plotting jihad all day at taxpayers’ expense.
TERRORISM AND WELFARE
• Mnjem Choudary, British Muslim leader, hailed 9/11 as “magnificent” and it’s perpetrators “heroes”. Advocates Sharia for the UK and US.
• He and his wife are welfare recipients.
• Racks up frequent flyer mileage jetting off to liaise with like minded Muslims in other countries.
BRITAIN & CANADA
• Muslim Immigrants Do not assimilate• De facto incremental Islamic law is well established• British and Ontario governments confirm thousands of polygamous men
receive welfare payments for each of their wives.• A British attempt to confine spousal benefits to no more than two
wives was struck down as discriminatory by the European Court of Human Rights.
• 57% of Pakistani Britons are married to their first cousins, 70% to relatives
• Generating increased health problems and straining the health care budget.
• Half the Yorkshire kindergarten class are children of first cousins.
ARE WE FOLLOWING THE EUROPEAN
PATH?BY 2050 there will be 100 million more Americans
and 100 million fewer Europeans
WHEN SOMETHING GOES WRONG;
• A European demands to know what the government’s going to do about it.
• Now other governments
• An American does it himself
THE TINKLING BELLS OF
PROGRESSIVISM
AUSTRIAN SCHOOL OF ECONOMICS
• Celebrated contribution of business to society,
• opposes taxes, price controls, and regulations
• Job of an economist is to tell governments what they cannot do.
• Socialism permits no private property or exchange in capital goods, and thus no way for resources to find their most highly valued use. Socialism would result in utter chaos and the end of civilization.
KEYNESIAN ECONOMICS THE GREAT ECONOMIST OF THE LEFT
• Solution to Recession/Depression is government stimulation • Reduction in interest rates • Government investment in infrastructure.
• Investment by government injects income:• results in more spending in general economy• stimulates more production and investment• involving still more income and spending and so forth• increase in economic activity is a multiple of the original
investment.[3]
• When asked about how this government stimulus ultimately gets paid for,• Keynes replied “In the long run, we are all dead”.
KEYNESIAN ECONOMICS: FOUR PROBLEMS
• Big increases in government spending and deficits raise prospect of future tax increases.
• Most government spending redistributes income from workers to the unemployed.
• Increases welfare of those hurt by recession
• But, shift of resources to redistribution and away from productive investment.
• Ignores effects of costly new regulations from Team Obama.
• How can corporations estimate future return on new investment with tax rates and costs unknowable.
• Focus on short term and ignores medium and long term costs.
THE MODERN BRITISH WELFARE STATE
• 1942 William Beveridge laid out blueprint.
• Goal: “Abolition of Want” and “insulate the citizenry from the vicissitudes of fate”.
• Very successful:
• Fewer and fewer Britons
• Want to work, or marry, or raise children
• Want to lead a life of any purpose or dignity.
• “Cooperation between the State and the individual” has resulted in a huge expansion of the former and the ceaseless withering of the latter.
FREEDOM IS MESSY• Some People make poor choices:
• drink too much
• Eat too much
• Buy unaffordable homes,
• Fail to make prudent provision for health care and much else
• But the price of being relieved of those choices it far too high:
• Big Government is the small option
• Guarantee of smaller freedom, homes, cars, opportunities, lives
THE ALLURE OF BEING LIBERALIN AMERICA
• Very few people are fiercely political.
• This is reasonable;
• The point of politics is to enable life and it’s pleasures
• So, among America’s elites, and many others
• Liberalism is the soft option
• Has all the nice words:
• Diversity, tolerance, peace, social justice, sustainability
• Requires the least defending in casual conversation.
• If you have to have “opinions”, these are the safe ones.
• default settings of contemporary sensibility
THE LIBERAL ARGUMENTGET THE BUMPER STICKER
• What do you think of illegal immigration?
• Celebrate Diversity, you are a racist.
• What do you think of Islam?
• Celebrate Diversity, you are an islamiphobe.
• What do you think of burkas, honor killings, stoning for adultery, capital punishment for homosexuals?
• Celebrate Diversity
PROGRESSIVES & RADICAL ISLAM• Humans wish to belong to something larger than themselves to
give life meaning;
• Tribe, then nation and religion.
• Now Church in steep decline, nation states abhorred as the font of racism, imperialism
• Now they believe in “Global Warming, Save the Planet”
• While Muslims find the new Globalized Islam.
• Both causes claim to be saving the planet from the same enemy:
• Decadent Capitalist Infidels
ILLEGAL IMMIGRATION VS GLOBAL WARMING
• Enforce the borders? Too porous. Can’t be done, old boy. Cloud-cuckoo stuff, Pie-in-the-sky.
• But changing the climate of the entire planet to some unspecified perfect state? That they can do.
• If they can just tax and regulate us enough.
THE PROGRESSIVE WAR• Not only do we no longer invent,
we are determined to dis-invent everything our grandparents created
• Opposed to dams,
• which spurred the growth of California
• Opposed to air conditioning,
• which let to the development of the Southwest
• Opposed to automobiles,
• which extend man’s reach.
• Ultimately, Progressives are at war with prosperity.
PROGRESSIVES & RADICAL ISLAM
• Is it a Bizarre common cause?
• Progressive Left pro-gay, pro-feminist, pro-whatever’s-your-bag secularists
• And Homophobic, misogynist, anti-anything-you-dig theocrats
• Both recoil from the concept of the citizen
• Of the free individual
• Entrusted to operate within his own space
• Assume his responsibilities
• Exploit his potential
PROGRESSIVES & RADICAL ISLAM• Both faiths insist their tenets are beyond discussion
• As disciples of the prophet Gore liked to sneer;• Only another climate scientist could question the climate-science
“consensus”
• Astronomers, physicists, geologists, meteorologists
• Were declared unqualified to enter the debate.
• Similarly, for an unbeliever to express a view on Islam is “islamophobic”
• Pick which view is more realistic:
• Obama promised to lower the oceans
• Hizb ut-Tahrir promised a global caliphate
CIVILIZATION AND AMERICA
“CLASH OF CIVILIZATIONS”SAMUEL HUNTINGTON, 1996
• Identified three major Civilizations
• Sinic (China): rising economically, demographically weak
• Muslim: surging demographically, economically weak except oil
• West:
• Europe - decline economically and demographically
• America ?
• Who created the Modern World?
ORGANIZATION OF ISLAMIC COOPERATION• Largest voting block in the U.N.
• Wants a world where Islam is beyond discussion.
• Controls many groups, including the Human Rights Council• Fiercely opposed to free speech
• Freedom of religion
• Women’s rights
• Conception of human rights came from their Cairo Declaration
• Article 24; “all the rights and freedoms stipulated in this Declaration are subject to the Islamic Shari’a
• Islam is beyond question
• Pushing planet wide imposition of a law against “defaming” religion.
CIVILIZATION AND RE-PRIMITIVEZED MAN
• “Civilization is not an evolution of mankind but the imposition of human good on human evil. It is not a historical inevitability. It is a battle that has to be fought every day, because evil doesn’t recede willingly before the wheels of progress.” - Andrew McCarthy
• Liberia, the Congo, Somalia, Sudan, Iran, Pakistan and North Korea;
• All less civilized than a couple of generations ago.
OUR FUTURE?• Choice between unsustainable entitlements and maintaining armed
forces of global reach:
• Will we abandon military capability and toss the savings into the great sucking maw of social spending?
• Will ruling kleptocracy sleepwalk its subjects into smaller homes, cars, healthcare, lives and soft despotism so beguilingly they don’t notice it’s over until late in the day.
• Will a catastrophically convulsed America descend into Balkanized ruin and social collapse on a planet with no global order with us as the most inviting target?
SUMMARY
• The Debt Problem HAS TO BE SOLVED.
• Europe is proving that socialism is a ponzi scheme.
• Europe is also showing us something about immigration:
• Immigrants who don’t assimilate are just a slow invasion.
• U.S. Immigration could be a blessing or a curse.
• Western Civilization has no guarantee of survival.
THE DEBT PROBLEMSOLUTIONS
• The size of the Federal Government must be cut by 20-25% or more.
• Reduction of Entitlements must be included.
• Some increases of Revenue may also be needed – after spending cuts are made.
Medicade
Medicare
Social Security
Military
Interest
Other
ENTITLEMENTS• Are the death of responsible government;
• are against every republican precepts.
• Mandate spending Regardless of government revenues or broader economic conditions,.
• An offense against a basic democratic principle;
• That a parliament cannot bind its successors.
• In effect, they are taxation without representation
SOLUTIONS - EDUCATION• Close the Federal Department of Education and return control to
the states and local governments.
• Regan said “It is important to recognize the distinction between problems of national scope (which may require Federal action) and problems that are merely common to the States.
• The former should be very limited
• Best way to save “the United States” is to give it less to do.
• Best way to do that is with the Tenth Amendment movement.
MARGARET THATCHER APPROACH
• Hard to close down government bodies
• But it should be possible to sell them off
• Also would privatize the public sector unions
US NEW MINORITIES• 2000 to 2010, white children declined by 4.3 million,
• Hispanic and Asian children grew by 5.5 million.
• White child populations dropped in 46 states
• and 86 of the 100 largest metro areas
• Ten states and 35 large metro areas have minority white child populations:
• Added in 2010: Atlanta, Dallas, Orlando, and Phoenix
• 95 percent of Texas’s child population growth occurred among Hispanics
IMMIGRATIONSOLUTIONS
• Immigration can be very beneficial• Growing and dynamic society
• Assimilation is required• Must become American
• Not remake America• Borders must be controlled• Quotas set based on U.S. need.
CLINTON TEAM PLAN
• US is an idea nation
• China, et al, are implementation nations
• US policy was shifted to letting foreign nations do manufacturing
• We benefited from lower prices
• But, a large part of the US population needs jobs using hands and backs.
• Also, due to increased number and complexity of federal rules and regulation:
• Companies now simply buy from China rather than hassle with Federal rules
RE-ESTABLISH THE AMERICAN IDEAL
• We took our eyes off the colleges, and the high schools, and the grade schools,
• These and other institutions were coopted by forces deeply hostile to the American Idea
• Push back, beginning in kindergarten
• Change the culture: the schools, the churches, the movies, the TV shows.
• It’s more important than changing the politics.
• “Don’t wait for the right people to get elected; create the conditions whereby the wrong people are forced to do the right thing” – Milton Friedman
YOU CAN WIN THIS• The Left tends to overreach.
• As they did on “Climate Change” scaremongering,
• The Hollywood buffoons will continue to lecture us from their mega-mansions
• That we should toss out our washers
• Beat our clothes on rocks
• Singing native chants down by the river
• But only suckers are listening to them
AMERICANS HAVE A CHOICE• We can join most of the rest of the western world
in terminal decline.
• Or Rediscover principles of the American idea
• A limited government
• A self-reliant citizenry
• Opportunity for individuals
• Beat the Progressives and be an example to the rest of the world.
BACKUP
BUSH TAX CUTSCurrent Pre Bush Tax Cut
10
15 15
25 28
28 31
33 36
35 39.6
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