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http://althouse.blogspot.com/2011/07/pelosi-boehner-chose-to-go-to-dark-side.html

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The Facts About Spending Cuts, the Debt, and the GDP
Separating economic myths from economic truths
Veronique de Rugy | July 29, 2011

http://www.youtube.com/watch?v=YOtOqDyH_x8&feature=player_embedded

Editor's Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Raising the debt limit might put off a downgrade disaster in August, but that still isn't enough­as Standard & Poor's recent warning made clear. Perhaps the most important shot not heard around the world was S&P's other admonition: Namely, that the U.S. bond rating will be downgraded in three months, if not sooner, unless we do something about government spending. Beyond raising the debt limit, S&P laid out clear criteria for avoiding a downgrade: 1) reduce the debt by about $4 trillion; 2) agree to a credible plan within three months; and 3) guarantee that this newfound fiscal discipline will actually stick.

If S&P isn't bluffing, then lawmakers should get serious about reducing the debt-to-GDP ratio, and they should do it quickly. But how do we achieve such a task?

Myth 1: You cannot reduce the deficit to an appropriate level without also raising taxes.

Fact 1: Spending cuts are the most effective way to reduce the debt-to-GDP ratio.

We are not the first nation to struggle with a dangerous debt-to-GDP ratio, and thankfully, the academic world has already produced great insights into what can be done to reduce this ratio without hurting the economy.

Take the work of Harvard's Alberto Alesina and Silvia Ardagna. They examined 107 efforts to reduce the debt in 21 OECD nations between 1970–2007. Their findings suggest that tax cuts are more expansionary than spending increases in the cases of a fiscal stimulus. Also, they found that spending cuts are a more effective way to reduce the debt-to-GDP ratio:

For fiscal adjustments we show that spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturns. In fact, we uncover several episodes in which spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions. We also investigate which components of taxes and spending affect the economy more in these large episodes and we try to uncover channels running through private consumption and/or investment.

As you can see in this chart, in cases of successful fiscal adjustments­defined by the cumulative reduction in debt-to-GDP ratio three years after fiscal adjustment greater than 4.5 percentage points­spending as a share of GDP fell by about 2 percentage points while revenue also fell by half a percentage point (left bars). On the other hand, unsuccessful fiscal adjustment packages­cumulative increases in debt-to-GDP ratio­were made of smaller spending reductions (only 0.8 percentage-point reduction) and large revenue increases (right bars).

[]

The IMF found similar results and reports that fiscal adjustment on the requisite scale of what we need today is actually not unprecedented:

During the past three decades, there were 14 episodes in advanced economies and 26 in emerging economies when individual countries adjusted their structural primary balance by more than 7 percentage points of GDP. Several economies were also able to sustain large primary surpluses for five or more years afterwards, though the record is more mixed in this regard.

For those who are not ideologically inclined toward austerity measures, it is key to remember that this research is consistent with the work of former Obama Council of Economic Advisers chairman Christina Romer and her economist husband, David Romer, which shows that increasing taxes by 1 percent of GDP for deficit-reduction purposes leads to a 3 percent reduction in GDP. In fact, Alesina and Ardagna discuss the work of Romer and Romer  starting on page five of their paper.

Myth 2: Lawmakers facing economic catastrophe forget about politics and adopt measures that address genuine fiscal issues.

Fact 2: Politicians rarely put politics aside. Historically, four out of five fiscal adjustments were primarily comprised of tax increases­and were unsuccessful.

[]

Following and building on Alesina and Ardagna's work, a new paper by Andrew Biggs, Kevin Hassett, and Matthew Jensen of the American Enterprise Institute studies fiscal adjustments covering over 100 instances in which countries took steps to address their budget gaps. Their results are consistent with those of the Harvard economists; expenditure cuts outweigh revenue increases in successful consolidations. Moreover, their work shows that even in a time of crisis (or especially in a time of crisis), lawmakers tend to adopt policies for the sake of politics. Countries in fiscal trouble generally got there through years of catering to interest groups and pro-spending constituencies (on both sides of the political aisle), and their fiscal adjustments tend to make too many of the same mistakes.

As a result, failed fiscal consolidations are the rule rather than the exception. Indeed, 80 percent of the fiscal adjustments Biggs, Hassett, and Jensen studied were failures. The United States cannot afford to follow this pattern.

Myth 3: We have had higher debt-to-GDP ratios before so we shouldn't worry now.

Fact 3: We should worry. The debt-to-GDP ratio actually underestimates the size of the government's real liabilities.

[]

As government debt and deficits have swollen, we often look to the past for guidance. From that point of view, history appears to be reassuring, since several advanced countries have had debt-to-GDP ratios much higher than the one we have now. The United States after World War II had a public debt/GDP ratio of roughly 110 percent, while Britain's was 250 percent. In fact, the UK's national debt has averaged almost 100 percent of GDP since its creation in 1693. France's public debt was about 280 percent of GDP at the end of World War II. And yet neither of these countries defaulted. So why should we worry?

Two main reasons: First, while our debt is big now, it's only going to get bigger in the coming years. This year, the debt held by the public is $9.7 trillion, which is roughly 69 percent of GDP. According to the Congressional Budget Office, it will reach 200 percent in 2037--if the economy doesn't collapse first (which it likely will). These projections aren't surprising considering that the president's budget doubles the debt held by the public from $9 trillion today to $18 trillion in 2021.

Second, the debt-to-GDP ratio actually underestimates the scale of our debt problem. Here is why:

1. Intragovernmental debt. This $4.6 trillion of debt is money that the federal government owes to its various trust funds. In other words, it's a liability to the government but an asset to the trust funds, so in accounting term it's zeroed out. However, over time the programs will redeem the IOUs as they need the money to fund benefits. As that happens, the intragovernmental debt decreases but debt held by the public increases. Eventually, this $4.6 trillion will be converted into public debt.

2. Unaccounted liabilities. There exists a broad range of liabilities that are debt, yet are not captured in the debt-to-GDP ratio. To take one example, the Financial Statement of the United States values the government's civil-service pension liabilities (that is, the contractual claims on government accumulated to date by civil servants) at $5.7 trillion. That amount is not captured by the debt-to-GDP ratio. A share of this $5.7 trillion will be paid for by IOUs included in the intragovernmental debt, which we know will be converted into public debt. In addition, the unfunded share of this liability will have to be paid for with more debt, which isn't accounted for in the debt/GDP metric. The Financial Statement of the United States shows another $1.5 trillion of such liabilities, including payments due to government-sponsored enterprises.

3. Unfunded liabilities. There is a balance of $39 trillion in unfunded liabilities over 75 years for programs such as Social Security and Medicare.

While we can't add all these numbers up because it would be the equivalent of comparing oranges to apples (some of these numbers represent the net present value of beneficiaries' future claims on the government), considering them in context still helps to illustrate why the debt-to-GDP ratio underestimates how much present and future debt has been accumulated over the years. Hopefully, this also helps illustrate why the current debt-ceiling debate shouldn't just focus on Treasury's ability to pay our bills today, but must focus on our overall debt problem.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

http://reason.com/archives/2011/07/29/the-facts-about-spending-cuts/singlepage
0


 
 
 

George-Soros_Dr-Evil.jpg

This is the man who has been censoring media, paying off people, bankrolling the Obama campaign with bogus $25 donations x millions.

This is a man who is the the king of special interest.

If all what Obama has done or said still has had no effect on why you should not vote for him, this guy alone associated with Obama and Axelrod is your main reason to not support Obama.

 
 

 
 
On Jul 29, 2011, at 9:45 PM, Charles Bielskis wrote:

 
 
What's the hold up, and it is a hold up. Why didn't we hear more of raising the debt ceiling 18 times when president Reagan was president
? Is  it because we have a group that thinks of themselves first instead of the country? If and when this triggers the high cost of everyday life like higher coffee cost, Toilet Paper, remember that one? Interest fees on property, credit cards, you name it. Give them a chance and the cost of everything we use will cost more. Do any of these guys think they will be reelected if the USA goes down the tubes in August. If they do get elected they may find they are volunteering their time. There may not be enough money to keep the doors open.
 
Dear Mr. Obama, I heard you say you will not guarantee SS checks if the debt ceiling isn't raised.
 
 

Why is it the scare always has to do with SS, Medicare, & our Soldiers pay?

Why not stop your pay, your staff, or Congress and the Senate to save more money for our country?

Why use Seniors, Soldiers, & our Needy as examples?

Take the money from those who take no risks and reap the benefits!! Repost if you agree

Instead of threatening to withhold Social Security, VA and disability payments of people who really need the money....

Lets hold the paychecks of all house & senate members, then see how fast they resolve the debt ceiling crisis !!!!!

If you agree repost this & keep it going across the whole USA

 
 
 
 



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Government is a great fiction where everybody seeks to live at the expense of everybody else.

Federico Bastia

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Girl put some clothes on!

dcgere | July 29, 2011 at 10:15 pm | Tags: Walmart | Categories: Idiots In General | URL: http://wp.me/pKuKY-8o5

 

Bikini-clad woman kicked out of Walmart says she's a survivor

Via KOMO News: Sandy McMillin's story has received international attention after she said Walmart employees kicked her out for wearing a bikini. Her story has also prompted a flurry of online comments. Some viewers applauded McMillin for standing up to Walmart. Others criticized her for her choice of attire.

Sandy McMillin and her sister Karla Vogt went to Walmart (in Eugene, OR - a liberal cesspool) on Sunday to buy sour cream, chips and coffee creamer. The temperature that day hit 90 degrees, so McMillin threw on a turquoise bikini and a pair of shorts. She said five minutes into her shopping trip while in the clothing aisle, a store employee told her to put on a shirt or leave, saying the swimsuit violated health codes.

"I was horrified," McMillin told KVAL News. "I am embarrassed." McMillin said employees then escorted her and her sister out of the store. "I hadn't done anything obnoxious or outlandish," McMillin said.

Walmart spokeswoman Ashley Hardie told KVAL News that McMillin has it all wrong. Hardie said customers complained and McMillin verbally abused people in the store. But Hardie said McMillin was never escorted outside.

I don't care how hot outside it is - girl put some clothes on!

DCG

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The Largest Dead Snake ever Found. 50 Feet.

Steve | July 30, 2011 at 6:26 am | Categories: Animals | URL: http://wp.me/pKuKY-8oe

watch?v=Uqg3Pg2M9WU&feature=player_embedded

~Steve~        H/T Joseph

Hey blame him. :D

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Can you believe this? 


http://www.arkansasonline.com/news/2011/jul/30/alpena-have-5-state-legislators-20110730/

Alpena to have 5 state legislators
Town of 392 gets 3 senators, 2 House members in redistricting
By Bill Bowden

LITTLE ROCK -- LITTLE ROCK — Alpena, population 392, will have three state senators for the next decade.

The Arkansas Board of Apportionment split the Ozark mountain town among three Senate districts when it voted Friday to adopt new redistricting boundaries.

"I looked at those maps, and I can't tell diddly squat," said Alpena Mayor Bobbie Bailey. "But it looks like they're trying to put Alpena out in no man's land."

The fragmenting of Alpena was done by accident, said Matt DeCample, a spokesman for Gov. Mike Beebe.

"That was absolutely not intentional on our part," De-Cample said. "We have nothing against the good folks of Alpena. But the lines have to go somewhere. That's a unique situation for a town that small. Sometimes we're able to catch things likethat. Sometimes they slip through."

DeCample said the governor's office was unaware of the situation involving Alpena until informed of it by a reporter Friday afternoon.

"I think if we had gotten feedback from Alpena that it was something they were really worried about, [the district lines] would have been something we could have moved," he said.

Bailey, 76, said she hadn't contacted the governor's office because she couldn't tell from maps published in the Harrison Daily Times exactly where the boundary went in relation to Alpena.

When asked if she had seen the maps on the apportionment board's website, arkansasredistricting.org, Bailey said she hadn't.

"That's a bunch of nonsense," she said, referring to the Internet. "I pick up my e-mail, and I'm lucky to get that done. I don't know about [the Internet]. Maybe it's time I started knowing."

Bailey has been mayor of Alpena for 17 years.

Public meetings have been held on redistricting since May, but the nearest one to Alpena was in Fayetteville, 60 miles to the east.

The Apportionment Board adopted maps drafted by the governor's office. The board consists of Beebe, Attorney General Dustin McDaniel and Secretary of State Mark Martin. Senate and House lines are redrawn after each decennial census to take into account any population shifts.

Two of the three members on the Apportionment Board - Beebe and McDaniel - are Democrats. Martin is a Republican.

DeCample said the board followed common boundaries in drafting the maps. Those boundaries include county lines and major highways. Alpena straddles the Boone-Carroll county line and is at the intersection of two major highways, U.S. 412 and U.S. 62. The new Senate boundaries follow the county line and U.S. 62 through Alpena.

On the basis of the boundaries described to her Friday, Bailey said, Alpena has about 16 residents who live in the new Senate District 5. Another 45 Alpena residents will be in District 16 and the rest in District 17, she indicated.

At first, Bailey joked about the situation, saying she'll have three senators to help her get things done.

DeCample echoed that.

"You've got a small rural town with three state senators on call," he said.

But after Bailey thought about it, she said it would make things more difficult.

"I really do believe it would complicate matters," she said. "That means I'd have to write three different letters and ask for help from three different people. ...

"It looks like they're going to really mess us up doing this. It doesn't look like it's going to be much fun. As little as we are, my gracious."

Bailey said the population of Alpena increased from 371 to 392 over the past decade. The Census Bureau lists 392 as the 2010 population.

The new House district lines also divide Alpena, but only into two districts, 83 and 98. So five people in the Legislature will be representing Alpena.

Arkansas has 35 senators and 100 members of the House of Representatives.

David Hoover, a member of the Carroll County Election Commission and the county's Republican chairman, said he's concerned about confusion at election time. For the past 10 years, Carroll County was wholly within Senate District 2 and House District 91. Those districts also extended into Boone County, keeping Alpena whole.

For the next decade, Carroll County will be divided among two Senate districts and three House districts.

Elections will be challenging, he said. "We're going to have to really be attentive to the lines and where the lines are drawn. And we're going to have to have numerous ballot faces," he said.

Election workers may have to help voters determine which Senate and House districts they live in, he said.

"The state representative districts forked Carroll County in three ways," said state Rep. Bryan King, R-Green Forest. "I think it's a terrible thing. I think it's a slap in the face to Carroll County. They should be drawn on geographic boundaries not trying to split everything up forpolitical benefit."

King, who represents District 91, can't seek re-election to the House next year because of term limits. King said he hasn't decided if he will run for a different office.

The maps become effective Aug. 29. DeCample said there are no plans to change the maps before that date.



--------
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http://www.grouchyoldcripple.com/archives/008739.html

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http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/07/30/a_thousand_cuts/

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http://hosted.ap.org/dynamic/stories/U/US_DEBT_SHOWDOWN?SITE=OHMOU&SECTION=HOME&TEMPLATE=DEFAULT

This just shows me that we need to get rid of the dem majority in the
Senate in the next election.

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And I thought I was just getting better information!

 

 


Why do real men watch Fox News?

Maybe because of:

Description: cid:FA198885826A462F81359DF301B953DB@yoursz6x6sefxo

Megyn Kelly

Description: cid:4E0C6522BE59445A96CBFAF2F6BCE370@yoursz6x6sefxo

Martha Maccallum

Description: cid:2DB578834F7E4B43AD4BAA393863F84D@yoursz6x6sefxo

Harris Faulkner

Description: cid:19A56C1A6DD0496A8D4F56AB5EF4A47E@yoursz6x6sefxoDescription: cid:3D018452B6854B1FA4DF2A04B49FDCC7@yoursz6x6sefxo

Courtney Friel

Description: cid:E21893CD9AFF4ABC825F7D52D3F77320@yoursz6x6sefxo

Uma Pemmeraju

Description: cid:55FF781E33C74ADBA0035FDDEAED7C9E@yoursz6x6sefxo

Jane Skinner

Description: cid:DBC731EE39BB4448A992C67BFDCED7F1@yoursz6x6sefxo

Kimberly Guillfoyle
Did I mention Courtney Friel
(Oops, repeat. Hope you don't mind)

Description: cid:14AC757609014DED8345EE8DB5949B7D@yoursz6x6sefxo

Lis Wiehl

Description: cid:7615EE8C90584D42B122C6171FB24C44@yoursz6x6sefxo

Rebecca Gomez

Description: cid:B765F1CC7B264815B589882560C775B3@yoursz6x6sefxo

Gretchen Carlson

Courtney Friel (Darn repeated again. Sorry)

Description: cid:70C7C29FA5B1460A8D6666119C3F3EC9@yoursz6x6sefxo

Laurie Dhue

Description: cid:86ADAE02BD3340BF93A6B304DF8012C4@yoursz6x6sefxo

Julie Banderas, Ainsley Earhart , Dominica Davis

And there are probably some missing.



Why Republican Men Are So Much Happier!

Description: cid:19CA21864BF74940B637A819EEB7237D@yoursz6x6sefxo

ANY QUESTIONS?
 

 

 

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Jesus, Reagan and John Lennon -- What Secrets Has Yoko Ono Been Keeping From Us?
By Mark Joseph
Published July 24, 2011 | FoxNews.com

You'd think someone as smart as Yoko Ono who lived through Watergate would have learned the most important lesson the scandal taught all of us: the coverup is always worse than the crime. But, if several reports are to be believed, she didn't and has for years been keeping secrets from all of us about her late husband.

First, thanks to rock biographer Steve Turner in his book "The Gospel According To The Beatles," we learned several years back that Lennon was a fan of TV preachers like Pat Robertson, Oral Roberts and Billy Graham.

Acording to Turner, none of this sat well with Ono who vigorously opposed Lennon's interest in Christianity:

"Over the following months he baffled those close to him by constantly praising "the Lord," writing Christian songs with titles like "Talking with Jesus" and "Amen" (the Lord's Prayer set to music), and trying to convert nonbelievers. He also called the prayer line of "The 700 Club," Pat Robertson's program.

The change in his life perturbed Yoko, who tried to talk him out of it. She reminded him of what he'd said about his vulnerability to strong religious leaders because of his emotionally deprived background. She knew that if the press found out about it they would have a field day with another John and Jesus story.

John became antagonistic toward her, blaming her for practicing the dark arts and telling her that she couldn't see the truth because her eyes had been blinded by Satan.

Those close to the couple sensed that the real reason she was concerned was that it threatened her control over John's life. If he became a follower of Jesus he would no longer depend on her and the occultists. During long, passionate arguments she attacked the key points of his fledgling faith.

They met with a couple of Norwegian missionaries whom Yoko questioned fiercely about the divinity of Christ, knowing that this was the teaching that John had always found the most difficult to accept. Their answers didn't satisfy her, and John began to waver in his commitment."

That Lennon was seeking spiritual answers in the Japanese mountain town of Karuizawa where he and Yoko and Sean spent time was well known.

One missionary, Carol Fleenor, who claimed that the couple also once attended her church, Karuizawa Union Church, remembered her encounter:

"We talked a little more about our kids. Before I knew it, an hour had passed, and he, Yoko and Sean prepared to pedal off on their bikes," she recalled. "'It's good to talk to all of you,' John said. 'I've been looking for something this summer, something spiritual,' he continued. ''I've been speaking with a lot of the missionaries I've met here, about life and what it all means. Thank you for your words.' He waved goodbye­and I waved back as they rode off, little Sean perched on his daddy's handlebars."

More recently, reports have surfaced in a soon to be released documentary that late in life, Lennon had grown ashamed of the political naivete of his early years and though unable to vote for him because of his British citizenship, had become a supporter of Ronald Reagan during his run for the presidency in 1980.

"John, basically, made it very clear that if he were an American he would vote for Reagan because he was really sour on Jimmy Carter," Seaman told filmmaker Seth Swirsky. "He did express support for Reagan, which shocked me....I also saw John embark in some really brutal arguments with my uncle, who's an old-time communist... He enjoyed really provoking my uncle... Maybe he was being provocative... but it was pretty obvious to me he had moved away from his earlier radicalism...He was a very different person back in 1979 and '80 than he'd been when he wrote 'Imagine.' By 1979 he looked back on that guy and was embarrassed by that guy's naivete."

Finally, according to a book titled All We Are Saying: The Last Major Interview of John Lennon and Yoko Ono, Lennon questioned the theory of evolution, mocking the notion that man descended from apes:

"I don't believe in the evolution of fish to monkeys to men. Why aren't monkeys changing into men now?," Lennon asked. "It's absolute garbage. It's absolutely irrational garbage, as mad as the ones who believe the world was made only four thousand years ago, the fundamentalists.... I don't buy it. I've got no basis for it and no theory to offer, I just don't buy it. Something other than that. Something simpler. I don't buy anything other than "It always was and ever shall be."

If John Lennon had become a Reagan-loving, TV-evangelist watching, evolution-mocking 40-year old, it was certainly no crime.

But if Yoko knew it and kept it from us for the last 30 years, surely that would be a crime against the truth from a woman whose family motto was: "All I want is the truth. Just give me some truth"



Mark Joseph is a film producer, author and publisher of Bullypulpit.com. His most recent books include "The Lion, The Professor & The Movies: Narnia's Journey To The Big Screen" and "Wild Card: The Promise & Peril of Sarah Palin."

http://www.foxnews.com/opinion/2011/07/24/jesus-reagan-and-john-lennon-what-secrets-has-yoko-ono-been-keeping-from-us/

Default Now, or Suffer a More Expensive Crisis Later: Ron Paul
By Ron Paul - Jul 22, 2011

Debate over the debt ceiling has reached a fever pitch in recent weeks, with each side trying to outdo the other in a game of political chicken. If you believe some of the things that are being written, the world will come to an end if the U.S. defaults on even the tiniest portion of its debt.

In strict terms, the default being discussed will occur if the U.S. fails to meet its debt obligations, through failure to pay either interest or principal due a bondholder. Proponents of raising the debt ceiling claim that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). My expectations of such a scenario are more sanguine.

The U.S. government defaulted at least three times on its obligations during the 20th century.

-- In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent.

-- From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too.

-- From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government.


Unlimited Spending

No longer constrained by any sort of commodity backing, the federal government was now free to engage in almost unlimited fiscal profligacy, the only check on its spending being the market's appetite for Treasury debt. Despite the defaults in 1934, 1968 and 1971, world markets have been only too willing to purchase Treasury debt and thereby fund the government's deficit spending. If these major defaults didn't result in decreased investor appetite for U.S. obligations, I see no reason why defaulting on a small amount of debt this August would cause any major changes.

The national debt now stands at just over $14 trillion, while net total liabilities are estimated at over $200 trillion. The government is insolvent, as there is no way that this massive sum of liabilities can ever be paid off. Successive Congresses and administrations have shown absolutely no restraint when it comes to the budget process, and the idea that either of the two parties is serious about getting our fiscal house in order is laughable.


Boom and Bust

The Austrian School's theory of the business cycle describes how loose central bank monetary policy causes booms and busts: It drives down interest rates below the market rate, lowering the cost of borrowing; encourages malinvestment; and causes economic miscalculation as resources are diverted from the highest value use as reflected in true consumer preferences. Loose monetary policy caused the dot-com bubble and the housing bubble, and now is causing the government debt bubble.

For far too long, the Federal Reserve's monetary policy and quantitative easing have kept interest rates artificially low, enabling the government to drastically increase its spending by funding its profligacy through new debt whose service costs were lower than they otherwise would have been.

Neither Republicans nor Democrats sought to end this gravy train, with one party prioritizing war spending and the other prioritizing welfare spending, and with both supporting both types of spending. But now, with the end of the second round of quantitative easing, the federal funds rate at the zero bound, and the debt limit maxed out, Congress finds itself in a real quandary.


Hard Decisions

It isn't too late to return to fiscal sanity. We could start by canceling out the debt held by the Federal Reserve, which would clear $1.6 trillion under the debt ceiling. Or we could cut trillions of dollars in spending by bringing our troops home from overseas, making gradual reforms to Social Security and Medicare, and bringing the federal government back within the limits envisioned by the Constitution. Yet no one is willing to step up to the plate and make the hard decisions that are necessary. Everyone wants to kick the can down the road and believe that deficit spending can continue unabated.

Unless major changes are made today, the U.S. will default on its debt sooner or later, and it is certainly preferable that it be sooner rather than later.

If the government defaults on its debt now, the consequences undoubtedly will be painful in the short term. The loss of its AAA rating will raise the cost of issuing new debt, but this is not altogether a bad thing. Higher borrowing costs will ensure that the government cannot continue the same old spending policies. Budgets will have to be brought into balance (as the cost of servicing debt will be so expensive as to preclude future debt financing of government operations), so hopefully, in the long term, the government will return to sound financial footing.


Raising the Ceiling

The alternative to defaulting now is to keep increasing the debt ceiling, keep spending like a drunken sailor, and hope that the default comes after we die. A future default won't take the form of a missed payment, but rather will come through hyperinflation. The already incestuous relationship between the Federal Reserve and the Treasury will grow even closer as the Fed begins to purchase debt directly from the Treasury and monetizes debt on a scale that makes QE2 look like a drop in the bucket. Imagine the societal breakdown of Weimar Germany, but in a country five times as large. That is what we face if we do not come to terms with our debt problem immediately.

Default will be painful, but it is all but inevitable for a country as heavily indebted as the U.S. Just as pumping money into the system to combat a recession only ensures an unsustainable economic boom and a future recession worse than the first, so too does continuously raising the debt ceiling only forestall the day of reckoning and ensure that, when it comes, it will be cataclysmic.

We have a choice: default now and take our medicine, or put it off as long as possible, when the effects will be much worse.

(Ron Paul is a Republican representative from Texas and a candidate for the 2012 Republican presidential nomination. The opinions expressed are his own.)


http://www.bloomberg.com/news/2011-07-22/default-now-or-suffer-a-more-expensive-crisis-later-ron-paul.html
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Breaking News(speak)
written by Ilana Mercer on 07.29.11 @ 8:28 pm

Wow: Republican wizards have passed a bill in the lower chamber that will both raise the debt ceiling and slash spending! The marvels of modern semantics. Meantime, BHO is tweeting like a twit possessed, urging Americans to work their representatives over so that a deal can be struck, and a disaster averted. The disaster: a rise in the interest rates on all the stuff they have borrowed. BHO's re-election hinges on happy spenders. (Even if it's splashing out at the One Dollar Store.)

It's remarkable what politicians putting pen to paper can achieve, isn't it?

The marvels of an alternate reality notwithstanding, interest rates are long overdue for a correction. Political will is what's keeping interest rates low or at zero, the premise being that buying and consuming is what generate economic growth. Keynesian crap, if you'd pardon my language. If interest rates rise, savers will be better rewarded. Capital for future investment can be accrued.

In his wonderfully learned book , The Failure of the 'New Economics, Henry Hazlitt summed-up the essence of Keynes' General Theory: "The great virtue is Consumption, extravagance, improvidence. The great vice is Saving, thrift, 'financial prudence.'" Duly, Obama has vowed to make credit flow "the way it should." Never mind that "all credit is debt," and that, in Hazlitt's words, "proposals for an increased volume of credit are merely another name for proposals for an increased burden of debt."

The Newsspeak Via National Journal:

Nearly two hours after the House narrowly approved House Speaker John Boehner's debt-ceiling bill, the Senate voted 59-41 to reject the speaker's plan, leaving Congress no closer to reaching agreement before the August 2 default deadline.
The vote did not kill the Boehner bill itself, allowing it to be used as a vehicle for a later compromise.
But Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., appeared at an impasse late Friday on negotiations on a Senate bill to raise the debt ceiling. As a result, Reid introduced new language to tighten his original proposal in the hopes of gaining more Republican support on a cloture vote on his legislation expected early Sunday.
According to a memo from his office, Reid's latest proposal would increase the deficit reduction over 10 years from $2.2 to $2.4 trillion, with a "dollar to dollar" increase in debt ceiling based on a proposal originally authored by McConnell to fast-track resolutions of disapproval to allow the president to raise the debt ceiling with the political liability falling on Democrats.

In his defense, Harry gets his meager savings by "winding down the wars in Iraq and Afghanistan which Republicans decry as budget gimmicks."

I hope that every one of the already stale Tea-Party freshmen who refused to quit the wars to save some money is tossed out of office.

You know guys, it's "Hard out there for an Ex-Pimp."

http://www.youtube.com/watch?v=0ARG9BXUZSc&feature=player_embedded


http://barelyablog.com/?p=40278
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The Essential Rules of Tyranny
by Brandon Smith

As we look back on the horrors of the dictatorships and autocracies of the past, one particular question consistently arises; how was it possible for the common men of these eras to NOT notice what was happening around them? How could they have stood as statues unaware or uncaring as their cultures were overrun by fascism, communism, collectivism, and elitism? Of course, we have the advantage of hindsight, and are able to research and examine the misdeeds of the past at our leisure. Unfortunately, such hindsight does not necessarily shield us from the long cast shadow of tyranny in our own day. For that, the increasingly uncommon gift of foresight is required…

At bottom, the success of despotic governments and Big Brother societies hinges upon a certain number of political, financial, and cultural developments. The first of which is an unwillingness in the general populace to secure and defend their own freedoms, making them completely reliant on corrupt establishment leadership. For totalitarianism to take hold, the masses must not only neglect the plight of their country, and the plight of others, but also be completely uninformed of the inherent indirect threats to their personal safety. They must abandon all responsibility for their destinies, and lose all respect for their own humanity. They must, indeed, become domesticated and mindless herd animals without regard for anything except their fleeting momentary desires for entertainment and short term survival. For a lumbering bloodthirsty behemoth to actually sneak up on you, you have to be pretty damnably oblivious.

The prevalence of apathy and ignorance sets the stage for the slow and highly deliberate process of centralization. Once dishonest governments accomplish an atmosphere of inaction and condition a sense of frailty within the citizenry, the sky is truly the limit. However, a murderous power-monger's day is never quite done. In my recent article 'The Essential Rules of Liberty' we explored the fundamentally unassailable actions and mental preparations required to ensure the continuance of a free society. In this article, let's examine the frequently wielded tools of tyrants in their invariably insane quests for total control…

Rule #1: Keep Them Afraid

People who are easily frightened are easily dominated. This is not just a law of political will, but a law of nature. Many wrongly assume that a tyrant's power comes purely from the application of force. In fact, despotic regimes that rely solely on extreme violence are often very unsuccessful, and easily overthrown. Brute strength is calculable. It can be analyzed, and thus, eventually confronted and defeated. Thriving tyrants instead utilize not just harm, but the imminent THREAT of harm. They instill apprehension in the public; a fear of the unknown, or a fear of the possible consequences for standing against the state. They let our imaginations run wild until we see death around every corner, whether it's actually there or not. When the masses are so blinded by the fear of reprisal that they forget their fear of slavery, and take no action whatsoever to undo it, then they have been sufficiently culled.

In other cases, our fear is evoked and directed towards engineered enemies. Another race, another religion, another political ideology, a "hidden" and ominous villain created out of thin air. Autocrats assert that we "need them" in order to remain safe and secure from these illusory monsters bent on our destruction. As always, this development is followed by the claim that all steps taken, even those that dissolve our freedoms, are "for the greater good". Frightened people tend to shirk their sense of independence and run towards the comfort of the collective, even if that collective is built on immoral and unconscionable foundations. Once a society takes on a hive-mind mentality almost any evil can be rationalized, and any injustice against the individual is simply overlooked for the sake of the group.

Rule #2: Keep Them Isolated

In the past, elitist governments would often legislate and enforce severe penalties for public gatherings, because defusing the ability of the citizenry to organize or to communicate was paramount to control. In our technological era, such isolation is still used, but in far more advanced forms. The bread and circus lifestyle of the average westerner alone is enough to distract us from connecting with each other in any meaningful fashion, but people still sometimes find ways to seek out organized forms of activism.

Through co-option, modern day tyrant's can direct and manipulate opposition movements. By creating and administrating groups which oppose each other, elites can then micromanage all aspects of a nation on the verge of revolution. These "false paradigms" give us the illusion of proactive organization, and the false hope of changing the system, while at the same time preventing us from seeking understanding in one another. All our energies are then muted and dispersed into meaningless battles over "left and right", or "Democrat versus Republican", for example. Only movements that cast aside such empty labels and concern themselves with the ultimate truth of their country, regardless of what that truth might reveal, are able to enact real solutions to the disasters wrought by tyranny.

In more advanced forms of despotism, even fake organizations are disbanded. Curfews are enforced. Normal communications are diminished or monitored. Compulsory paperwork is required. Checkpoints are instituted. Free speech is punished. Existing groups are influenced to distrust each other or to disintegrate entirely out of dread of being discovered. All of these measures are taken by tyrants primarily to prevent ANY citizens from gathering and finding mutual support. People who work together and organize of their own volition are unpredictable, and therefore, a potential risk to the state.

Rule #3: Keep Them Desperate

You'll find in nearly every instance of cultural descent into autocracy, the offending government gained favor after the onset of economic collapse. Make the necessities of root survival an uncertainty, and people without knowledge of self sustainability and without solid core principles will gladly hand over their freedom, even for mere scraps from the tables of the same men who unleashed famine upon them. Financial calamities are not dangerous because of the poverty they leave in their wake; they are dangerous because of the doors to malevolence that they leave open.

Destitution leads not just to hunger, but also to crime (private and government). Crime leads to anger, hatred, and fear. Fear leads to desperation. Desperation leads to the acceptance of anything resembling a solution, even despotism.

Autocracies pretend to cut through the dilemmas of economic dysfunction (usually while demanding liberties be relinquished), however, behind the scenes they actually seek to maintain a proscribed level of indigence and deprivation. The constant peril of homelessness and starvation keeps the masses thoroughly distracted from such things as protest or dissent, while simultaneously chaining them to the idea that their only chance is to cling to the very government out to end them.

Rule #4: Send Out The Jackboots

This is the main symptom often associated with totalitarianism. So much so that our preconceived notions of what a fascist government looks like prevent us from seeing other forms of tyranny right under our noses. Some Americans believe that if the jackbooted thugs are not knocking on every door, then we MUST still live in a free country. Obviously, this is a rather naïve position. Admittedly, though, goon squads and secret police do eventually become prominent in every failed nation, usually while the public is mesmerized by visions of war, depression, hyperinflation, terrorism, etc.

When law enforcement officials are no longer servants of the people, but agents of a government concerned only with its own supremacy, serious crises emerge. Checks and balances are removed. The guidelines that once reigned in police disappear, and suddenly, a philosophy of superiority emerges; an arrogant exclusivity that breeds separation between law enforcement and the rest of the public. Finally, police no longer see themselves as protectors of citizens, but prison guards out to keep us subdued and docile.

As tyranny grows, this behavior is encouraged. Good men are filtered out of the system, and small (minded and hearted) men are promoted.

At its pinnacle, a police state will hide the identities of most of its agents and officers, behind masks or behind red tape, because their crimes in the name of the state become so numerous and so sadistic that personal vengeance on the part of their victims will become a daily concern.

Rule #5: Blame Everything On The Truth Seekers

Tyrants are generally men who have squelched their own consciences. They have no reservations in using any means at their disposal to wipe out opposition. But, in the early stages of their ascent to power, they must give the populace a reason for their ruthlessness, or risk being exposed, and instigating even more dissent. The propaganda machine thus goes into overdrive, and any person or group that dares to question the authority or the validity of the state is demonized in the minds of the masses.

All disasters, all violent crimes, all the ills of the world, are hoisted upon the shoulders of activist groups and political rivals. They are falsely associated with fringe elements already disliked by society (racists, terrorists, etc). A bogus consensus is created through puppet media in an attempt to make the public believe that "everyone else" must have the same exact views, and those who express contrary positions must be "crazy", or "extremist". Events are even engineered by the corrupt system and pinned on those demanding transparency and liberty. The goal is to drive anti-totalitarian organizations into self censorship. That is to say, instead of silencing them directly, the state causes activists to silence themselves.

Tyrannical power structures cannot function without scapegoats. There must always be an elusive boogie man under the bed of every citizen, otherwise, those citizens may turn their attention, and their anger, towards the real culprit behind their troubles. By scapegoating stewards of the truth, such governments are able to kill two birds with one stone.

Rule #6: Encourage Citizen Spies

Ultimately, the life of a totalitarian government is not prolonged by the government itself, but by the very people it subjugates. Citizen spies are the glue of any police state, and our propensity for sticking our noses into other peoples business is highly valued by Big Brother bureaucracies around the globe.

There are a number of reasons why people participate in this repulsive activity. Some are addicted to the feeling of being a part of the collective, and "service" to this collective, sadly, is the only way they are able to give their pathetic lives meaning. Some are vindictive, cold, and soulless, and actually get enjoyment from ruining others. And still, like elites, some long for power, even petty power, and are willing to do anything to fulfill their vile need to dictate the destinies of perfect strangers.

Citizen spying is almost always branded as a civic duty; an act of heroism and bravery. Citizen spies are offered accolades and awards, and showered with praise from the upper echelons of their communities. People who lean towards citizen spying are often outwardly and inwardly unimpressive; physically and mentally inept. For the average moral and emotional weakling with persistent feelings of inadequacy, the allure of finally being given fifteen minutes of fame and a hero's status (even if that status is based on a lie) is simply too much to resist. They begin to see "extremists" and "terrorists" everywhere. Soon, people afraid of open ears everywhere start to watch what they say at the supermarket, in their own backyards, or even to family members. Free speech is effectively neutralized.

Rule #7: Make Them Accept The Unacceptable

In the end, it is not enough for a government fueled by the putrid sludge of iniquity to lord over us. At some point, it must also influence us to forsake our most valued principles. Tyrannies are less concerned with dominating how we live, so much as dominating how we think. If they can mold our very morality, they can exist unopposed indefinitely. Of course, the elements of conscience are inborn, and not subject to environmental duress as long as a man is self aware. However, conscience can be manipulated if a person has no sense of identity, and has never put in the effort to explore his own strengths and failings. There are many people like this in America today.

Lies become "necessary" in protecting the safety of the state. War becomes a tool for "peace". Torture becomes an ugly but "useful" method for gleaning important information. Police brutality is sold as a "natural reaction" to increased crime. Rendition becomes normal, but only for those labeled as "terrorists". Assassination is justified as a means for "saving lives". Genocide is done discretely, but most everyone knows it is taking place. They simply don't discuss it.

All tyrannical systems depend on the apathy and moral relativism of the inhabitants within their borders. Without the cooperation of the public, these systems cannot function. The real question is, how many of the above steps will be taken before we finally refuse to conform? At what point will each man and woman decide to break free from the dark path blazed before us and take measures to ensure their independence? Who will have the courage to develop their own communities, their own alternative economies, their own organizations for mutual defense outside of establishment constructs, and who will break under the pressure to bow like cowards? How many will hold the line, and how many will flee?

For every American, for every human being across the planet who chooses to stand immovable in the face of the very worst in mankind, we come that much closer to breathing life once again into the very best in us all.

http://www.alt-market.com/articles/198-the-essential-rules-of-tyranny
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The Black Swans of Politics
by Justin T. P. Quinn

I remember once arguing with an honest young atheist, who was very much shocked at my disputing some of the assumptions which were absolute sanctities to him (such as the quite unproved proposition of the independence of matter and the quite improbable proposition of its power to originate mind), and he at length fell back upon this question, which he delivered with an honourable heat of defiance and indignation: "Well, can you tell me any man of intellect, great in science or philosophy, who accepted the miraculous?" I said, "With pleasure. Descartes, Dr. Johnson, Newton, Faraday, Newman, Gladstone, Pasteur, Browning, Brunetiere -- as many more as you please." To which that quite admirable and idealistic young man made this astonishing reply – "Oh, but of course they had to say that; they were Christians." First he challenged me to find a black swan, and then he ruled out all my swans because they were black. The fact that all these great intellects had come to the Christian view was somehow or other a proof either that they were not great intellects or that they had not really come to that view. The argument thus stood in a charmingly convenient form: "All men that count have come to my conclusion; for if they come to your conclusion they do not count." -- G. K. Chesterton

A recent article entitled "Ron Paul's dilemma" makes the case that "Ron Paul may be in the ultimate damned-if-you-do, damned-if-you-don't situation as next month's Ames Straw Poll draws closer."

If Paul polls fourth or fifth at Ames, it will feed the existing narrative that he is a second-tier candidate with a devoted but small legion of fans. Ames will be, at best, a wash. If, on the other hand, Paul finishes first or second, it will feed the narrative that he's a straw-poll paper tiger with a small but devoted legion of fans that swamped Ames from around the country. The media will give itself permission to ignore the result and instead focus on the "serious" candidates.

Rasmussen makes the unfortunate factual error of stating that Ron's "legion of fans" could "swamp Ames from around the country." The Ames Straw Poll is only open to Iowa residents. A simple Google search could have prevented that mistake and allowed him to reword it differently, though at the expense of weakening his argument. A victory in Ames would not mean that Ron Paul is backed by a small group of fanatics that crawled out of the woodwork, but that he has strong core of support within the key state of Iowa. Let us ignore that fact for now.

Instead, lets focus on the substance of Rasmussen's opinion: The Ames Straw Poll is very important, but only if Ron Paul doesn't win. It doesn't matter whether or not Ron wins, or even how many percentage points he wins by. The Iowa Straw Poll can help every other candidate, but it can only hurt Ron Paul. The voters at Ames can have no bearing whatsoever on Ron Paul's viability as a candidate. A vote for Ron Paul ipso facto makes it irrelevant.

You see, Ron Paul supporters don't count, even though they are the paragon of what the ideal political activist would be. They are arguably the only true grassroots activists in existence right now. They don't wait for direction or leadership from Ron Paul himself. Rather, inspired by Paul's ideals, they act on their own. Nothing else in history comes close to what they've accomplished.

It was Ron Paul supporters, not the Ron Paul campaign itself, that invented the "money bomb." Money bombs are online fund-raising events, often held on dates with great historical and political significance, which seek to generate a large amount of donations within a short period of time. Such events are marketed through "viral advertising" where individuals take the initiative and spread the news of the event through online vehicles such as social networks, YouTube, and online forums. People who might think that their small contribution to the campaign might not make a difference, or who otherwise might not "get around to it," find themselves encouraged by a large number of their peers to take an active part in these events and donate larger amounts more often than they otherwise would have. By seeking to set ever higher records in hourly, daily, and weekly fund-raising, money bombs can generate millions of dollars in free advertising in the media as well.

Remember the Ron Paul Blimp? Once again, Ron Paul supporters acted on their own initiative to make something happen. At 200 feet long, it beat out the Goodyear Blimp as the largest blimp in North America. It also cost $600,000 to fly for the six weeks it was in the air, and might not even get off the ground this year. Flying over the eastern seaboard, it generated over $2 million in publicity. The blimp needs to be flying over Iowa now, but there seems to be little interest in it! A single money bomb could do it, easy.

Let us imagine for a minute a Mitt Romney blimp or a Mike Huckabee blimp, constructed and financed by grassroots supporters independent of their respective campaigns. They would be praised from the rooftops for their creativity and initiative. They would be asked, "What is it about Mitt Romney that gives you so much hope?" With such a spontaneous surge of enthusiasm and devotion for this man, some may begin to wonder, could he be The One? We'd never hear the end of it, but because it was part of the Ron Paul Campaign, nay, the Ron Paul Movement, it is referred to as a desperate publicity stunt of questionable legality.

In every campaign in the history of campaigning, a lost run for office means that interest in the candidate mostly dies out, but not for Ron Paul. Supporters of Ron Paul are qualitatively different from those who support other candidates. Jack Hunter summed it up perfectly.

Ask the average Paul fanatic what they like about him and all you will hear nothing but specific policies: "Follow the Constitution!" "End the Fed!" "End the War!" Paul is the purest example of what I like to call "philosophical conservatism" in that what he believes – strict adherence to limited government and Constitutional principles – is more important to him and his followers than how his party perceives him.

Even after Ron Paul lost the 2008 Republican nomination, the Ron Paul movement remained a force to be reckoned with. It was Ron Paul's Campaign for Liberty that forever changed America's political landscape. It was the tireless efforts of the Campaign for Liberty that made the Federal Reserve a national issue. Through countless emails, letters, and phone calls made by people who were educated about the Federal Reserve and Austrian Business Cycle Theory, HR 1207, The Federal Reserve Transparency Act, gained some 319 cosponsors in the House of Representatives. The Senate version, S. 604, had 32 cosponsors. So great was the movement to "End the Fed," the majority of Americans are not only conscious of the Fed's existence and activities, but are radically opposed to it. Federal Reserve chairman Ben Bernanke now feels the need to have futile press conferences to try and win over the people.

A common soundbite you'll hear in the news nowadays (if you still watch it) is that "many are coming around to Ron Paul's points of view." The truly astonishing thing is that any politician can posses a sound, logical form of thought in the first place, much less convince people of anything. Scott Conroy's Doomsday Scenario may prove to be true, as the "famously devoted supporters of Texas Rep. Ron Paul wipe the sweat off their brows without batting an eye and descend on the campus of Iowa State University to propel the libertarian-leaning icon to yet another straw-poll victory". This, for Conroy, would be a tragedy. If Ron Paul were to win in Ames, the sanctity of the event and the godly wisdom of all who attend would have to be called into question.

Yes, it is very true that it is not how high a candidate can get in the national polls, but how many of his supporters he can actually get out to vote that wins elections. If you show up to vote for Ron Paul, however, well then, you're just some crazy fanatic who's part of the ever growing cult of Ron Paul worshipers. You are like a pestilence that swarms GOP events to drown out the voices of more reasoned minds, a sacrilegious abuse of the Holy Democratic System. Your votes are not to be regarded with the same reverence as those offered up to the other lying, thieving, murderous scumbags that always get elected president. You are at best an outlier, at worst, a very real threat to our political way of life. The Ron Paul Movement, the greatest grassroots campaign in political history, could destroy Iowa's position as an early primary state, and ruin the chances of any grassroots campaign for a small-name politician of ever being competitive in presidential politics ever again.

The establishment media would like to completely ignore Ron Paul by not even including him in the polls. When they can't ignore him, they use a very simple formula. On the eve of an important straw poll, say he can't win. When he does, downplay the results as meaningless. Now, on the eve of the Ames Straw Poll, they are hedging their bets with doublespeak; The Ames Straw Poll is very important, but only if Ron Paul doesn't win. It's a strategy that will likely stretch well into the primary season, but this can only work for so long.

When it become too obvious that the Ron Paul movement is taking over the country, they will resort to blatant lies and deception. This is precisely what Fox News did earlier this year when they tried claim that Ron Paul was booed at the 2011 CPAC by playing the clip from 2010. When Bill Hemmer asks Ron Paul how he felt being about booed, he laughs in a very odd, juvenile way. The way his tong moves around in his mouth, almost as if he is savoring the opportunity to humiliate Ron Paul, I imagine him once being a large, fat bully in the fifth grade. Ron Paul in fact got a standing ovation when he was announced the winner of the 2011 CPAC Straw Poll. Such an amateurish attempt at deception was quickly found out, and Fox News via Hemmer was forced to publicly apologize for their "honest mistake."

How far will the mainstream go in order to stem the tide of the Ron Paul Revolution? They already say it threatens to destroy the presidential primary system. Will they go as far as Glen Beck did, and group Ron Paul supporters in with terrorists? Perhaps a bombing or a mass shooting will be blamed on the anti-government Libertarian movement. A so-called "Libertarian Bomber" would be just the excuse needed to send federal troops to arrest people at Ron Paul rallies.

It all makes one wonder how accurate those polls are that place Ron at around 10%. It's clear that the media sees his supporters as a mere factor that skew the polls away from results that are more "representative of America." The fact is that Ron Paul does represent America. He opposes the wars, he opposes the income tax, he opposes further burdening the country with more debt, and he wants to restore sound money and end the Federal Reserve. What the media doesn't want is for Americans to figure this out.

They want people who like Ron Paul to think he can't win; his victories don't matter; he's a "fringe candidate;" only kooks support him; best to support someone else who actually stands a chance. The establishment wants to create a self-fulfilling prophecy that a Ron Paul presidency is a hopeless cause. Their plan won't work. Once the false paradigm is shattered and the people see the truth, Ron Paul will become President of the United States, and it will be all thanks to those "Ron Paul fanatics," the Black Swans of Politics.