Must Reads For The Week 3/1/14

The pen is mightier than the sword...

The pen is mightier than the sword… (Photo credit: mbshane)

How To Identify Economic Zombies, at economicnoise.com. This is a short article with a great explanation about producing, consuming and borrowing. Here is an excerpt, “Income for a period determines the amount you can spend that period…But borrowing is nothing but advancing consumption that otherwise would occur in a later period. Whatever is borrowed raises consumption this period but reduces it next period when some of the income earned then cannot be spent because it must be used to service the prior debt. Total consumption for both periods is lower than it would have been without the borrowing. That is due to the paying the carrying cost of debt, interest.”

Mortgage Applications Plunge Most In 3 Months Purchases Collapse To 19 Year Low, at zerohedge.com. We still haven’t recovered from the 08 housing bust. The Fed and the Governments policies  created the housing bubble which produced a much bigger supply of housing than demand will support. Since the collapse they have been trying keep the market from bringing supply in line with demand, because they don’t want the price of housing to collapse any farther. Do they understand the simple law of supply and demand which is, more will be consumed at a lower price than a higher price and more will be produced at a higher price than a lower price. By keeping the price artificially higher they are working in reverse of the law of supply and demand. Related article, A Housing Recovery, Or Just Another Bubble?

Government Lies About The IRS Scandal, at economicnoise.com. Government bureaucrats and politicians use their power to target and intimidate opponents. These abuses are never seriously investigated and hardly ever prosecuted. The IRS is the most intimidating agency in the Government because everyone deals with them. When you get a letter from the IRS you don’t open it like a kid opening a present on Christmas morning.

Senator Rubio Responds To Senator Harkin Praising Cuba’s Socialist Health Care System, by Jason Howerton, at theblaze.com. Senator Harkin must have been taken to Cuba’s version of a Potemkin village. Who do you trust to tell the truth, Senator Harkin who is a true believer in socialized medicine, or Senator Rubio whose parents came from Cuba. Both may have a degree of conformation bias, but whose side does history support?

Surgeons Reconstruct Baby’s Skull With 3D Printing Technology, by Loren Grush, at foxnews.com. and Shale Boon Is Only In The First Inning, at bizjournals.com. I say these at aei-ideas.org. Even though Government tries to control health care and stop carbon based fuel production, technology combined with whats left of the free market is finding new, better, and less expensive ways of doing everything. What would exist today if Government had stayed inside of its Constitutional restraints?

Trouble In Paradise? …Fed’s Fisher Blames Congress And Voters, by Chris Rossini, at economicpolicyjournal.com. Here’s an excerpt from the article, “Bottom line? We don’t need the elected “regulatory authorities”. The free market is the ultimate regulator It plays no favorites, bails out o one, and tilts in no one’s direction. There is no tougher regulator than the free market. We also don’t need the non-elected central planners at The Federal Reserve. What we need is Liberty.”

Revised Q4 GDP Tumbles 26% From Initial Estimate To 2.4%; Personal Consumption Hit, by economicpolicyjournal.com. The 2013 4th Quarter GDP was cut from 3.2% to 2.6% because,  “the consumer was not as strong as had been initially expected”. I’m sorry but the truth is production was not as strong, because you can only consume what has been produced. Keynesian indoctrination has us believing that consumption drives the economy when in reality production is what drives the economy and allows us to consume.

This is from a site called thisisindexed.com, by Jessica Hagy. She uses charts to, as she says, “make fun of some things and sense of others.”

Her graph below tells me that people who receive largess from Government, whether it’s a welfare recipient or a crony capitalist, are more willing to give up their freedom and be a slave of the State. They have less of a desire for individual freedom as their needs are increasingly met by Government. It’s sad but true.

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