Yearly Archives: 2013

One Banana, Two Banana …

As the political pundits and state apologists breathed a sigh of relief over last week’s deal in Congress to end the government “shutdown” a subtle wrinkle in this deal went largely unnoticed. But this wrinkle, like the proverbial butterfly whose flapping wings results in a hurricane, sets the stage for the transformation of the American Empire into a banana republic and with it the ultimate collapse of that empire. How could this go unnoticed? As with all new government initiatives it is cloaked in the innocence of being “temporary.” As the astute observer of history Milton Friedman once observed, “there is nothing so permanent as a temporary government program.”

The deal that was rushed through Congress last week is, like Obamacare, now withering under the light of public scrutiny of those very details our overlords wished to keep hidden. Although laced with several “special deals” in order to buy the votes of particular congressmen, this deal carries with it something far more sinister than the usual run of the mill horse trading. It carries with it the “temporary suspension” of the debt limit until February 7, 2014. What does that mean in practical terms? Quite simply that the US Treasury may issue an unlimited amount of debt between now and February 7. They could issue treasury bonds for tens of trillions of dollars if they wished and it would all be nice and legal. Now is it likely they will do that? Not really. That is not the source of the hidden danger. The real danger lies in the fact that this “temporary” suspension of the debt limit will never end. This is because through procedural gamesmanship this component of the deal was added in such a way that it will take a two-thirds (!) majority of both the house and senate to reverse it. Considering both sides of the aisle are too craven to face the hard choice of reducing spending or increasing taxes you can lay down good money on the fact that they will never vote against something that would require them to ultimately face that quandary of a decision.

So although there will still technically be a debt-limit on the books, it will for all intents and purposes not exist since all who are bound by it have agreed to simply ignore it. Once this new reality becomes the status quo there will be absolutely NOTHING holding back Congress from spending as much as they desire. As they further inflate the currency through more and more debt creation, prices will rise year after year. This will further devalue the purchasing power of the dollar. Eventually, one day soon the United States’ largest creditors (foreign governments) will decide the US dollar is simply not an asset worth holding (would you continue to own a stock whose price dropped every year?) and will cease buying US Treasury debt and will also begin selling the debt they do own (further plunging the value of the dollar). Once that happens it will be declared a “crisis” by those in power who will once again clamor for a “temporary” suspension of even the most tenuous of rules that support the façade of separation between Fed and State. Currently it is illegal for the Federal Reserve to directly purchase US Treasury bonds (although they can do so indirectly through “the market”). However if no one is willing to buy our debt that leaves just one customer standing: the customer that has the legal monopolistic right to create counterfeit money out of thin air – the Federal Reserve. Once the Federal Reserve is “temporarily” permitted to begin buying US Treasury debt, that will be the last nail in the coffin of the American Empire. History has taught us clearly time and time again that once a government starts printing its own currency with no restraints of any kind, hyperinflation is not very far behind.

Perhaps this might seem like hyperbole to some, however if we combine the lessons of history along with our current government’s unwillingness to cut spending and face the economic failures of their socialist inroads into our economy (i.e. subsidization of ANY economic activity) there is simply no other plausible outcome. So get ready, the roller coaster is poised to plunge straight into the ground. And it all begins not with a “bang” but a mere unnoticed whimper.

The Giving Tree of Debt

It’s that special time of year once again – The Giving Tree in Washington DC sheds its last few monetary leaves as fall approaches. The congressional summer recess has left the tree starving for the one thing it needs to flourish and produce those precious greenbacks: BS. As the pontificating blowhards in Congress resume their duties there is once again a renewed hope that The Giving Tree will be restored to health via the abundance of manure spewed forth by inept congressmen and a credulous media who act merely as an amplifier for Washington inspired propaganda.

That’s right, it’s time to raise the debt ceiling. I could write an entire book on what is wrong with the system (although there is little need to do so as Tom Woods’ “Nullification” leaves no stone unturned in that endeavor) and why we are in the mess we’re in. However, space constraints compel me to simply address the two most salient points of disinformation making the rounds of the mainstream media outlets.

Fallacy 1: We have to raise the debt ceiling because we as a country are legally committed to making good on all financial obligations made by our government. It’s like agreeing to pay your credit card bill after you charged the goods on it.

FALSE: No, no, no (sound of head banging desk). It is not at all comparable to agreeing to pay your credit card bill (i.e. committing to purchases AFTER funds are secured). The more apt example would be signing a contract to buy a house BEFORE you have secured the ability to pay for it and then going to the bank and demanding a loan because you “have made a commitment buy the house.”  Clearly, the only result of raising one’s credit limit every time one goes over said limit would be to instill an overriding sense of restraint and fiscal responsibility. Even if one subscribes to the flimsy moral precept that one has a duty to repay financial obligations made by total strangers who happen to reside in the same geographical region as yourself, one must agree shifting the burden of that repayment onto one’s children is the act of a coward. If you believe we have this obligation, fine, then don’t use debt to pay for it, use taxes – raise them through the roof. Because were the present generation to bear the full financial burden of the government programs they pine for they would quickly come to realize they are not so necessary after all.

Fallacy 2: If we don’t raise the debt limit then the US government will be in default and (insert scare tactic) that would undermine confidence and collapse the financial markets.

FALSE: This is the same line of fallacious reasoning employed by Obama when he compared the only possible outcome of not raising the debt limit to being equivalent to a homeowner simply deciding to not pay his mortgage. So apparently the concept of prioritization has never occurred to Obama? Naturally if one has a pay cut or loses their job their first instinct is to cease their mortgage payments so that they can continue paying their cable bill and manicurist. Duh, no, you prioritize and pay your food, housing and utilities first, then you cut off all non-essentials remaining. So if the projected 2014 budget were $1 we see that the government now collects 84¢ in taxes and can pay out 67¢ to fully fund all debt interest, Social Security, Medicare, Medicaid and defense payments. Yes, the remaining 33¢ of spending would have to be economized over the 17¢ of remaining revenue, but the point is it would not be the “essential” obligations that for some bizarre reason are perennially assumed would hit the chopping block first.

Continuing to give the addict money because you’re afraid he won’t buy food provides him no incentive to end the addiction because it insulates him from having to make the choice between the addiction or eating. With the money he can have both. Without it, a choice must be made.

Barricading Liberty

“We’ve been told to make life as difficult for people as we can” said a National Park Service Ranger in Washington, DC recently. The revelation of this directive has only served to add more color to the canvas of a feckless presidency. What sort of leader seeks to augment, rather than minimize, the impact of a deleterious event upon those he putatively serves?

“We’ve been told to make life as difficult for people as we can”

The behavior of the Obama administration during this current government “shutdown” is reprehensible and petty. The deliberate closures of a number of “public” parks – un-manned, un-ticketed, open air parks mind you – says more about Obama than any of his self-serving oratory. These are the actions of a petulant, spoiled child. He’s not getting what he wants (unconstrained limitless federal spending) so rather than leading (engaging in and brokering a meaningful dialog between both sides) he’s lashing out at the very citizenry he is supposedly serving by using them as pawns in a game of Congressional chess. Obama and his minions are well aware that most of what the federal government does on a daily basis does not impact the public in any obvious manner. The longer the shutdown continues unnoticed by John Q. Public, the weaker his position becomes. Therefore, to strengthen his hand he must make the public squirm as much as possible, even if that means spending additional funds to pay people to barricade open-air facilities that cost nothing to keep open (bike lanes, children’s playgrounds, unmanned parking lots, etc). Even virtual resources such as websites and Twitter accounts have gone dark despite the fact that they are either free or already paid for. But the “shutdown” of public resources was not sufficient. They are now deliberately blocking access to private businesses as well because they happen to be leasing government owned buildings. These businesses make the government money (leases). They do not cost them money (Pigash Inn in North Carolina is just one example). That’s like quitting your job because you ran out of money – it simply defies all rationality! And then there is poor George Washington; he must surely be spinning in his grave because even his house (Mt. Vernon Museum) was shut down by Mr. Obama! Why? The parking lot for the facility is jointly owned by the Mount Vernon Ladies Association (the private owners of the Mt. Vernon facility) and the National Parker Service (NPS), so apparently the NPS felt it necessary to barricade an un-ticketed and un-manned parking lot that the NPS bears no daily cost to operate. How long will it be until Obama orders all US interstate highways shutdown as well?

These actions have revealed an essential truth of a state run society: there is no “public” property. There is only the property of the Royal Court – the federal government that is – and the king (Obama) may do whatsoever he pleases with his property. If he doesn’t get what he wants, then just as a petulant child would, he will pick up his ball and go home. Or rather, he’s going to barricade off the playground so no one else can play either.

The strategy here is of course plain to see. If he can’t pressure Congress, then he can pressure the public by taking away those things the federal government has so graciously bequeathed to the “people”. If the people value them, then they should rightly be mad at Congress for forcing their poor king to take away their goodies. Fortunately most people are not this blind to his manipulative strategy. In perhaps the best publicized exampled, the day the shutdown began the NPS barricaded the WWII memorial in Washington DC, preventing numerous veterans from visiting the site. However, the veterans were not so easily intimidated. These dauntless men pushed the barriers aside and again demonstrated their strength of character. Character that, ironically, is honored by the very memorial this President strove to separate them from. By fighting the will of past and present tyrants they have set an example for us all. If we value our liberty, then we have a duty to overturn both the barricades to liberty and those that would erect them.

Counting, Government Style

As Obamacare looms nigh small employers such as myself who are near the margins of the 50 employee threshold of being an “applicable large employer for Section 4980H” have found it necessary to waste time and money just trying to figure out if we have reached that threshold or not (and yes, we already provide health insurance). At face value it seems like this should be simple enough: just count. But as with most things generated via government bureaucracy nothing is ever as simple as it seems. The statute is filled with ambiguous and undefined terms such as “stability period”, “measurement period”, “standard measurement period”, “upcoming stability period”, “safe harbor”, and so on. I’m actually trying to comply with this nightmare of a law but even our accountants admit some of the questions simply can’t be answered yet. Typical government: “Here, comply with this” – “Ok, how do I do that?” – “We haven’t decided yet, but don’t worry, if you get it wrong we’ll let you know with a fine.”

For example, there are two calculations that must be done. The first determines how many full time employees there are and the second determines how many “full time equivalent” employees there are. However a full time employee is only eligible to be measured as such if they are considered to be an “ongoing employee” (meaning they are employed for at least one “measurement period”). But… if they become full time during the measurement period or otherwise have a status change then there is a whole different set of rules for counting them – except those rules have not yet been issued (insert picture of chimpanzee with pencil scratching his head).

Assuming we have figured out who the “ongoing employees” are, we are now ready to determine if they are part time or full time. This calculation procedure all too predictably betrays the fact that whoever came up with it clearly has never worked in the private sector. They are laboring under the delusion that employees are paid on a calendar monthly basis as opposed to a weekly or biweekly basis (perhaps because governments reserve to themselves the exclusive right to pay monthly – that practice is illegal for private employers). “Fine”, you may say, there are 4 weeks in a month, what’s the big deal? Well, in fact, no, there are not 4 weeks in a month – there are up to 4.42 weeks in a month. So we cannot simply add up 4 weeks of payroll hours for a part time employee and divide by 120 to see if they exceed an average of 30 hours per week (the newly defined “full time” standard under Obamacare). No, rather than simply using data we already have (weekly or biweekly hours worked) for each employee, instead we must now warehouse up to 7-times more data by saving daily hours details. Although all employers already track daily punches, smaller employers store this massive amount of raw data off-line after getting the totals for payroll. Why waste resources if there is nothing to be gained by storing the number “8” five times vs storing the number “40” one time. The storage space is not the central issue however, it’s that we must incur a cost to reprogram payroll systems – in short wasting money to rebuild something we already had.

With monthly hour data in hand, we can now count up the employees that exceed 130 hours and count them as “full-time”. For all other employees we total up the lesser of actual hours worked or 120 and then divide that sum by 120 to get the “full time equivalents”. This means, in short, that two part time employees working 60 hours in a month will count as one full time employee. This calculation subtly explains the incentive behind large employers (such as Trader Joe’s or Kroger) who already fall under Obamacare but who are nevertheless cutting back their part time employee’s hours to below 30. This allows them to reduce their potential fine exposure. For example, in the case of Kroger, if all of their 340,000 employees work at least 30 hours, then they will be counted 340,000 full-time employees. However, if this same number of employees works only 29 hours per week, then they would be equivalent to 328,666 employees or a net potential savings of $23-34 million in Obamacare fines. That’s nothing to sneeze it at, but if you do at least you’ll be covered under Obamacare.

In the dark

As a small business owner I have had the unique misfortune of being exposed to a wide array of state-imposed roadblocks. Whereas the individual may only be disturbed by the occasional run in with their tax bill or prohibition against engaging in activities frowned upon by our wise overlords, a business is daily confronted by a multitude of meddlesome intrusions (and I am not speaking of regulation of efficacy or safety, such standards would still exist in an insurance driven, rather than regulation driven, free market framework).

For example, my company manufacturers chemical products used to maintain aquariums (i.e. to keep fish, plants and corals alive and healthy). A good portion of our products is classified by various state agriculture agencies as either feeds or fertilizers (because they help living organisms grow). Such products are subject to the same agriculture rules and regulations intended for the products aiding in the production of food or large animal husbandry. These rules not only specify a set of taxes (fees) you must pay just for the mere privilege of selling such products within a particular state (50 States, 50 different fees per every product, every year) they also specify the manner in which you may artistically design labeling, the verbiage you’re permitted to use and the manner in which you can market said products. If an ingredient is not on a particular state’s “approved” list then that means you can’t say anything about it on the label – even if it confers a competitive advantage. Therefore the product must get “dumbed down” to meet the most obtuse standards, as printing 50 variations of the same label is not economically viable (for smaller businesses). In some states a lone bureaucrat can unilaterally block the sale of a product to an entire state if they perceive said product does not provide value to the consumer – all on their own personal whim and without any appeal recourse. By way of example I actually had such a bureaucrat in Wisconsin tell me that aquatic plants in Wisconsin don’t need iron to grow (therefore justifying the blocking of sale of our iron supplement). Curious. I know legislatures can enact laws, but I didn’t know they could repeal laws of nature as well.

Now, and here’s the rub for those of you that might think even these onerous regulations ensure efficacy – no state agency actually cares whether a product does what it says. That’s right. All they care about is collecting their fee and that your description of your product conform to their narrow definition of a “proper” feed or fertilizer. Innovation and change? Sorry, not permitted. This is an unfortunate legacy of the fascist depression era agriculture policies that continue to interfere in commerce to this day. All these bureaucrats care about is what you SAY is in the product – and that you pay your fees every year. Of course before you can SAY anything about your own product you must humbly bow down before your overlords and request as meekly as possible that if they have the time could they perhaps deign to review your label so as to ensure it meets their standards for banality and mediocrity, thus ensuring its admission into the Great State of <insert state name here>.

So, if you have ever pondered why so many competing products all say and do the exact same thing, it’s more than likely because of regulations. When government sets the standards, nobody is permitted to step outside of the 3×5 card of approved product parameters. Everyone is forced sell to the same level of mediocrity stipulated by ignorant bureaucrats. Unless, of course, you are a mega huge business that helped to enact these regulations, in which case you can easily afford the hundreds of thousands of dollars to get your ingredient approved or the millions of dollars to buy political favor if you can’t. Unfortunately small time competitors can’t afford such hurdles even if their product is better. Regulation imposes costs only on those businesses that can already afford it. It ensures the consumer remains in the dark about what they’re missing from smaller competitors who are marginalized by lowest common denominator minded regulation. I know, because I make the innovative products you’re not permitted to know exist.

But… but… the roads!

It is curious that “the roads” falls among the top justifications for the existence of government. Setting aside the laughably false choice implicit in this sentiment (i.e. that roads could not exist absent government) we are left to ponder how one of the most poorly run government services is supposed to bolster, rather than weaken, the case for government. Poorly run? How so? Allow me to elaborate. Crumbling infrastructure. Traffic congestion. Traffic delays. Roads littered daily with accidents, injuries and deaths that on an annual scale reach into the millions of accidents and tens of thousands of deaths. What’s that? Unfair assessment you say? It’s the drivers causing the accidents and greedy selfish taxpayers not wanting to pay more in taxes to build more roads. Perhaps. But consider this: Imagine that a big evil corporation owned all the roads. Would there not be an outcry over these statistics? Would there not be an outcry over high prices for a poor product? Would people not say the company is more interested in profit than in making roadways safer? However, and here is the key difference in this counterfactual scenario, were a private company the owner of the roads the public would have at least one remedy not available today. The lawsuit. Private road owners, in contrast to “public” owners, are liable for events occurring on their private property. The injured could sue the road owners for providing an unsafe product. However, such suits would be few and far between. Road owners would see that problem a mile away. They would proactively invest in safety measures to ensure no one dies on their roads. There is a reason after all that air travel is statistically safer than road travel: an airline that had the same fatality rate per mile would have been sued out of existence long ago (or simply gone bankrupt as everyone stopped flying them in droves).

But such a recourse does not exist today. Those in government are immune from liability for their actions. When poor decisions are made, nobody is held accountable. Due to the revolving door structure of political office, decisions are made that maximize short-term benefits at the expense of long-term goals. This mode of operation tends to get one reelected. People naturally prefer those who promise stuff now vs later. The system can’t be “fixed” because the inherent feedback in the system drives it to always select for short-term minded stewards.

Would private roads operate any better? Given any particular owner there is no way to predict. Whether private or public, those in charge are just people. People are imperfect. However, in a private system there is a feedback mechanism that keeps the good and removes the bad. That mechanism is driven by competition and liability. An owner that keeps his roads safe, fast, and efficient is providing what the consumer wants. He stays in business. The owner that does the opposite goes out of business. Competition is the linchpin of free market regulation. It drives us to do better than the other guy. It drives us to provide a better and safer product in order to avoid the losses of liability. In short, competition is how we keep each other “in line” – no Big Brother needed.

Now armed with that knowledge, ask yourself, where is the competition in government? Voting? Please – that’s tantamount to rearranging the deck chairs on the Titanic. If AT&T were providing poor service, would you rather (a) vote concerning changing whatever policy displeases you but not be allowed to stop buying AT&T’s product if the vote does not go your way or (b) switch providers. Voting with your wallet is far more democratic than voting in the ballot box.

One might argue that roads are a natural monopoly, that there would be no competitor to switch to. This is superficially plausible, however it falls into the trap of assuming a private system must be exactly like the public system, just with a different owner. That would not be the case, the result of which would be opportunities for competition heretofore not yet envisioned (who knows, maybe we’d have our flying cars by now if the road system were private!). So, when you hear “but who will build the roads?” remember: a question is not an argument. One’s lack of imagination is not proof of anything.

What War Would Jesus Start?

For a supposedly Christian nation that was presumably founded upon Christian values, the United States has a rather bellicose history that is entirely incongruous with the Christian message of loving your enemy and turning the other cheek. As easy as it was for most of us to have been caught up in the patriotic fervor of striking back at the stronghold of the 9/11 hijackers, that response was fundamentally un-Christian. Not only does Jesus say that one must turn the other cheek but that one must likewise love those that are engaging in the cheek slapping. That’s a pretty difficult message for anyone to accept. But if you are a Christian it is pretty unambiguous. Even if the message is honored at the individual level it must likewise be honored at the collective level. It is a rather large feat of cognitive dissonance to believe one man may not kill another man but that 100 men acting in unison may justifiably kill another 100 men. War is simply the collective actions of individuals. If it is wrong for the individual to kill then it is wrong for the collective to kill. If it is commanded that the individual love his enemy then it is commanded that the collective love their enemy. If you are a Christian and believe the US is justified in going to war against Syria then you need to reexamine your beliefs. You cannot simultaneously believe in the divinity of Jesus and pick and choose which of his commandments you will adhere to.

Now that I’m done chastising the pro-war Christians don’t think the pro-war non-Christians are getting off so easy. Even if you do not accept the divinity of Jesus, this particular directive of his, of loving your enemy, contains within it an essential lesson that is theologically neutral. What is that message? That in order to break the cycle of violence someone must be the first to actually break that cycle. Someone must step forward and say, “I have been wronged, but I refuse to respond in kind.” The ability to make a conscious decision about our behavior that runs counter to every instinct built into our being is one of the defining characteristics of humanity. “Mind over matter” is what separates us from the instinctually driven animal world. A dog bitten will bite back; he knows no other response. Two dogs caught in this cycle will continue until both are nearly destroyed or one dies. Are we mindless animals unable to rise above our base instincts of an eye for an eye? Or are we intellectually superior to our enemies such that we alone are capable of recognizing the merry-go-round we are on and realize the only way to get off is to simply jump and say “no more.”

So, Jesus’ message of “love your enemies” and “turn the other cheek” is not so much a commandment as it is a key. With this key we have the means to unlock the cycle of violence and finally bring true peace to the world. A peace based on mutual respect and understanding. Such a peace is preferable to the global peace currently being proffered by those running the United American Empire, namely the “peace” that exists between well-armed prison guards and their prisoners.

No Country for Assad’s Men

On August 31 President Obama revealed to the world that when it comes to executive decision-making he has apparently taken a page from the book used by President Bush. Just as Bush justified interventionism in the economy by proclaiming that he must “abandon free market principles to save the free market” so too does Obama likewise make the oxymoronic case that in order to maintain peace we must go to war.

Our “leaders” are only as powerful as the support we give them; upon its withdrawal they are as but infants.

So, it is off to war in Syria then. The reasoning Mr. Obama laid out was one part demagoguery, two parts fear mongering. He opened with the age-old politician’s ploy of invoking “the children”. He thusly reminds us of the deaths of several hundred children in the recent Syrian gas attacks. However this example is somewhat hypocritical considering the US government has killed at least a hundred children with its overseas drone strikes alone, to say nothing of the children “gassed to death by their own government” at Waco Texas in 1993. Say what you will of the leaders at Waco, certainly their children did not deserve to be burned alive by their own government.

He then segues into the same tired justification trotted out for all preemptive wars: the risk of what “might” come to pass. If we do nothing, then: it might make a mockery of prohibitions on chemical weapons, it might endanger our allies, it might lead to more chemical weapons. Might, might, might. Here’s a “might” for you Mr. President. If we keep our nose out of other country’s business then they “might” just figure out how to solve their own problems, without our help. The losing side “might” not blame us for their loss, in which case the US “might” not once again become the target of homicidal rage.

Secure in his reasoning, he smugly asserts that he is confident the US can hold the Syrian government accountable for their actions. Since a necessary condition for being accountable to some other entity is being subservient to said entity, then clearly this President (and his predecessors) views all other countries as being subservient to US authority. The United States, in their minds, is not so much a country as it is a global empire. And an empire must keep its quarrelsome protectorates in line. In the American Empire all countries, companies and individuals are accountable to the King or his Court, err, I mean the President or Congress. Let us hope China never decides they need to hold the US government accountable for its actions by bombing US civilians into the Stone Age.

But then, there was a glimmer of hope. Mr. Obama graciously acknowledged that even though he’s sure he is King and can do whatever he desires, he’s a nice guy after all and does have that annoying Nobel Peace Prize to live up to. So, he’s going to make us a deal. He shall deign to permit Congress to debate and vote on whether we should bomb Syria. How quaint – he’s going to actually follow the Constitution for once (which clearly states war may only be authorized by Congress (Article 1, Section 8)). I wonder how he’ll proceed if the vote doesn’t go his way. If that comes to pass then we will once and for all discover whether we have elected a President or a Führer.

Ok, enough bellyaching about what we shouldn’t do. What should we do? A humanitarian evacuation. Send our naval fleet to retrieve every civilian in Syria who wishes to escape the crossfire of a civil war and immigrate to the US or any other country that will permit them entry. Without a population to support them both the rebels and the Assad government will crumble from within. Our “leaders” are only as powerful as the support we give them; upon its withdrawal they are as but infants.

Turn the world on with your smile…

Something on the lighter side. The legendary Bob Murphy, noted Austrian economist by day and karaoke singer by night, renders with aplomb the “Mary Tyler Moore” song on my behalf (or rather my wife, she is the big MTM fan and thought she’d enjoy it). I was the high bidder in a recent charity auction for the Brown Center for Autism and having Bob sing a song of your choice was one of the items he sweetened the bidding pot with. Enjoy

A Model for Freedom… in Detroit?

If you could distill the essence of the morning hangover and turn it into a city, that city would be Detroit. Everything seems “ok” during the party as both booze and money are consumed in excess. But as with all such excesses we are eventually (and often unceremoniously) awoken to the consequences of the cold hard reality we have wrought. Not quite the “morning in America” Ronald Reagan envisioned, but it is indeed now “morning” in Detroit.

Detroit is not alone in its profligate tax and spend policies that have slowly destroyed cities like a silent cancer. Stockton, California. Jefferson County, Alabama. Pontiac, Michigan. And the list goes on. Municipal debt has nearly doubled since 2000 from $1.5 trillion to $2.8 trillion as of 2011. Since municipalities can’t print their own money like Uncle Sam can there is a municipal debt bubble getting ready to burst that will make the housing bubble look like a hiccup. But there is a bright side to all of this, and Detroit is it. How so? For sure Detroit is in the condition it is in (abandoned homes, cars, factories, etc.) because of the actions of its overlords (city council). However, the response of its citizens to those actions has yielded the city we see today. Those citizens left. Those businesses left. And the fact that they were free to do so reveals the glimmer of hope for us all. We can at least (still) leave any relationship that is injurious. If the city had erected a wall and made it illegal to leave the city, illegal to close down a business, illegal to quit a job, it would no longer be a city but a prison (or any Ayn Rand novel, take your pick).

Where did those citizens go? To other cities. Detroit, just like any other city, county or state must compete for citizens on the open market. Create an environment that is conducive to freedom (low taxes, low regulations, civil liberties) and you will attract citizens. Create an environment opposed to those principals and the opposite occurs. Government decentralization is the reason we still enjoy some measure of freedom today. When government competes with government they all (mostly) behave. It is no accident that those states with the highest tax rates have been steadily losing citizens and those with the lowest gaining citizens.

However, there is a movement afoot from both the left and the right to set us on a path of complete nationalization. Each side falls sway to the delusion that they’ll be the ones “in control” and thus there is nothing to worry about. Under this “one nation” path the Federal government’s judgment will reign supreme in all areas, not just the annoying few outlined by the Constitution. But this reality is not new; we started down this path long ago. For those things controlled by the Feds there is no escape in moving. Don’t like paying into a bankrupt Social Security system? or Obamacare? Or funding endless wars (on terror and drugs)? Too bad, there is nowhere to go to opt out. Removing the Federal government would not necessarily mean an end to these programs however – it would simply mean that those programs could only exist in those areas where 100% of the citizens desired them. Anyone opposed would leave for cities with different policies.

But even such a geographically decentralized system of governance is but a mere compromise on the road toward true freedom. The dream is that someday humanity will evolve beyond our territorially driven reptilian brains to the point where geographical boundaries are irrelevant in defining political allegiances. Just as religious allegiances are blind to geographical boundaries so too should political allegiances be likewise blind to such boundaries. Although we can move to escape tyranny we shouldn’t have to.