Slavery

During the seven years of famine in ancient Egypt, Joseph kept the people alive by first selling the stored grain to them. Then when their money ran out, he sold them food in exchange for their livestock. Finally when the people had nothing left but their bodies and their land, they sold their lands to Pharaoh and themselves into slavery in order to survive. Joseph then allowed the people to remain in their land and to grow food there and to pay 20% of all they produced to Pharaoh who owned them and their land.
When the people of the united States pay more than double that percentage in homage to Augustus with little complaint, what does that tell us about the "Land of the Free"?

Hypocrisy

The gap between what we say and what we do is hypocrisy. As human beings, we are prone to inconsistencies such as these, but the correct way to deal with our own hypocrisy is to always keep the gap as close to zero as possible. As every child knows, true beliefs are reflected in actions, not in words, so when we discover that our actions diverge from our declarations, we must listen to the more convincing voice of action.
We must first know the truth, then act on that knowledge without compromise. If we then discover a gap, we must either confess our error of belief or our error of action. This is not perfection, but it is integrity.
The world watches carefully.

Government creates poverty

No government has never made a society more wealthy without stealing that wealth from another country. Within its own jurisdiction, it steals from one group and gives to another then charges everyone for the "service". Any society must be poorer in direct proportion to the size of its government. That is unless they start a war in order to steal the wealth of a weaker country.

Producers and consumers

The natural state of the world is that societies consist of producers and consumers. Producers are those who are net creators of goods that are desirable and for which people will trade their own labor or rightfully owned goods. Consumers are those that on net, produce fewer goods than they consume. I say that this is the natural state of the world because each person necessarily progresses through life by first being a net consumer as a child, then hopefully a net producer during his or her working life and finally a net consumer again in old age.

We have advanced as a civilization because millions of people have produced more than they have consumed for many centuries. But in recent centuries, humanity has encountered a troubling new trend in government encouraged consumption. Around the world, governments have learned to tax their people not only through direct collections, but also through systematic and intentional debasement of paper currencies. The proceeds of this debasement are then wasted on agressive wars (enriching the preferred military hardware providers), welfare (encouraging net consomption and guaranteeing re-election of certain politicians) and corporatism (enriching banks and other large corporations by protecting them from competition and also insuring large donations for politicians).

So government everywhere has gone from being a consumer of goods, which is bad enough, to being a destructive parasite on the the productive society. Have you ever seen a 1000 pound horse infested with 100 pounds of ticks? Why not? We instinctively know that when parasites reach a certain size in relation to the host, death for both soon follows.

Presently in the uSA, government consumption is over 40% of GDP. This is equivalent to a 1000 pound horse with about 700 pounds of ticks. How fast could that horse run? How long could it live?

Smaller government is not just a party platform, or the dream of pie-in-the-sky libertarians, it's a matter of economic life and death.

Statistics and Christianity

It has been said that there is no significant statistical difference between the Christians and non-Christians. As with any statistics, this doesn't really tell us much. As Mark Twain said "There are three kinds of lies: lies, damned lies, and statistics." I think he meant that numbers can be persuasive, but they are not always reliable.

Still, statistically Christians should look different from the society in general. Consider the following:

IF real Christians are defined by faith in Christ AND

IF faith in Christ produces tangible changes (such as obedience to His commands)

THEN somehow Christians should be statistically different from non-Christians.

SO, in regard to behavior touching on the morality and ethical behavior taught by Christ,

IF there is no statistical difference between the visible Christian church and the rest of the culture,

THEN within statistical error, there are about as many real Christians in the visible Church as there are in the rest of the culture.

Stated another way, there is about the same proportion of non-believers in the visible church as there is in the general society. A sobering thought.

Economic Theory

John Maynard Keynes economic theories, which are so dominant in the present economic crisis, make some assumptions about government that are interesting to examine. In Keynes estimation, the business cycle is caused by the animal spirits of fear and greed and the cure for these fluctuation is for government to overspend when animal spirits turn toward fear (the bust) and for government to underspend during the boom. The bureaucrats of today hear the first advice and love it because it means that government will always go from growth to growth. They ignore the second advice because that would mean a shrinking of government during the boom. From their perspective, smaller government can never be good.

Austrian economic theories also make some assumptions about government: their intervention into the free market is the very cause of the business cycle and nothing they undertake will make things better. In times of economic crisis, the government should tax less, spend less and never prop up losers or inhibit the market from reallocating resources away from the failures and toward others more likely to succeed in satisfying the wants of consumers. Then without government intervention in the bust, there will be no unsustainable boom and the market will only swing due to natural factors such as innovations, weather, etc. not because of interventions by government.

In the simplest terms, which of these seems more likely to be true? And which one is the most self serving?

Economic theory has profound consequences, just look at the 100+ million dead because of the theories of Karl Marx. Today, the world is suffering the results of almost 100 years of the bad economic theory that government intervention is the cure for the business cycle.

The FED's new tactic

My first inclination is always to believe that the FED (and all of government for that matter) is incompetent, not that they can't do anything, but that everything they do eventually turns out to be more trouble than it's worth. But what could go wrong with the latest tactic by the FED of paying interest on the excess reserves of member banks held at the FED? It's not hard to figure out what this policy accomplishes in the present situation, banks will leave excess reserves deposited at the FED rather than lend. This nullifies the fractional reserve multiplier by preventing the banks from lending to the extent that they normally would. It might surprise you, but the FED is pursuing policies that inhibit banks' desires to lend. At the moment, lending is not very safe or profitable, but to the extent that banks might consider lending, the FED will pay them not to do so.

So what will be the longer term effects of the FED's newfound magic policy that allows them to flood the banks with fiat money while avoiding the usual effects of the fractional reserve banking money multiplier? At the moment, this policy is working to calm the stock market and has not caused an equivalent level of price inflation. However, a plausible scenario for the future is as follows:

1. The FED creates an expectation of inflation by creating massive amounts of new money as they purchase RMBS and CMBS securities to prevent the failure of large banks.

2. Pressure to increase the interest on long term treasury securities mounts as the FED continues its buying program to keep their interest rates low.

(This is where we are now.)

3. The FED intervention (by money creation) needed to keep interest rates at very low rates mounts. Eventually, the FED must abandon this policy or risk triple digit price inflation.

4. As interest rates begin to rise, banks begin to lend since rates look more profitable, and they reduce their excess reserves. As they do so the money supply increases dramatically due to the fractional reserve lending money multilier.

5. The FED increases the interest on excess reserves in an effort to reduce their loss.

6. The FED increases the discount rate in an effort stem the fractional reserve lending.

7. The FED increases the reserve ratio in an effort stem the fractional reserve lending.

8. The FED ends the TALF and TARP programs repatriating the devalued securities to their original owners. However, this can only be done to the extent that it does not threaten the survival of the big banks and the FED will be left with the worst of the lot.

8. As price inflation expectations increase, the FED begins to sell assets into the market to reduce the money supply, but finds that the assets they own (even treasury securities) have lost value and are not worth what they paid for them. Consequently not all of the excess money can be removed.

Beyond that point, the future is even less certain. The FED, the Treasury, the Congress and the President will certainly intervene to save the economy and as usual will make the future from that point even worse than it would have been otherwise. Avoiding the crack-up boom does not seem possible at the moment, but we can always hope that at some point government will realize that further interventions only take us closer to the day of reckoning, and abandon those policies.