COACH FIRED OVER ANTI-OBAMA SONG?by Todd Starns
A Tennessee middle school football coach said he got fired after he wrote a song that criticized President Obama.
Bryan Glover, an assistant coach at Grassland Middle School near Nashville, co-wrote the country music song, “When You’re Holding a Hammer, Everything Looks Like a Nail.”
It was co-written by a parent who has a child on the team. Glover, 26, said he emailed a copy of the song to friends, family members and player’s parents through his personal email account.
And that’s when all the trouble started for the self-described independent conservative.
“The coach called me and said parents were upset – that I was being politically incorrect and the song had racial overtones,” Glover told FOX News Radio. “An hour and a half later I was told I was being terminated.”
“I was informed that I was being let go because of the song,” he said, denying claims there were any racial overtones in the song.
Williamson County School Superintendent Mike Looney disputed Glover’s account and said his dismissal had nothing to do with the song.
“Absolutely not,” he told FOX News Radio. “That’s a false claim.”
Looney said he was not allowed to go into specifics but acknowledged he spoke with the school’s principal and was satisfied with their handling of the matter.
“They presented me with logical, legally defensible reasons for doing so,” Looney said. “As far as I’m concerned they’ve handled the matter appropriately.”
Glover said he’s angry over what happened and believes he lost his job because his song was critical of President Obama. And he’s not the only one.
“It was a disgrace and we have to stand up for the guy,” said Michael Katsaitis, who has a son on the football team. He said he met with the principal of the school after Glover’s firing and is convinced his dismissal was a result of the song.”
“The first thing she told me was that Bryan’s song was derogatory to our president,” he said. “He shouldn’t have fired over that song.”
Glover said he is seeking legal counsel and may consider a lawsuit against the school.
“First and foremost I’m a conservative,” he said. “I do support what the tea party movement is all about but I’m more Republican than Democrat. I’m an independent conservative who thinks the government tries to have their hand in way too many things.”
“I’m pretty heated,” he said. “I’m just a blue-collar guy, trying to make a living, trying to chase a dream.”
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| Ben Stein |
We've Figured Him Out
By Ben Stein on 7.24.09 @ 9:45AM
Why is President Barack Obama in such a hurry to get his socialized medicine bill passed?
Because he and his cunning circle realize some basic truths:
The American people in their unimaginable kindness and trust voted for a pig in a poke in 2008. They wanted so much to believe Barack Obama was somehow better and different from other ultra-leftists that they simply took him on faith.
They ignored his anti-white writings in his books. They ignored his quiet acceptance of hysterical anti-American diatribes by his minister, Jeremiah Wright.
They ignored his refusal to explain years at a time of his life as a student. They ignored his ultra-left record as a "community organizer," Illinois state legislator, and Senator.
The American people ignored his total zero of an academic record as a student and teacher, his complete lack of scholarship when he was being touted as a scholar.
Now, the American people are starting to wake up to the truth. Barack Obama is a super likeable super leftist, not a fan of this country, way, way too cozy with the terrorist leaders in the Middle East, way beyond naïveté, all the way into active destruction of our interests and our allies and our future.
The American people have already awakened to the truth that the stimulus bill -- a great idea in theory -- was really an immense bribe to Democrat interest groups, and in no way an effort to help all Americans.
Now, Americans are waking up to the truth that ObamaCare basically means that every time you are sick or injured, you will have a clerk from the Department of Motor Vehicles telling your doctor what he can and cannot do.
The American people already know that Mr. Obama's plan to lower health costs while expanding coverage and bureaucracy is a myth, a promise of something that never was and never will be -- a bureaucracy lowering costs in a free society. Either the costs go up or the free society goes away.
These are perilous times. Mrs. Hillary Clinton, our Secretary of State, has given Iran the go-ahead to have nuclear weapons, an unqualified betrayal of the nation. Now, we face a devastating loss of freedom at home in health care. It will be joined by controls on our lives to "protect us" from global warming, itself largely a fraud if believed to be caused by man.
Mr. Obama knows Americans are getting wise and will stop him if he delays at all in taking away our freedoms.
There is his urgency and our opportunity. Once freedom is lost, America is lost. Wake up, beloved America.
On Wednesday, August 3rd, after completing the demanding rigors of basic training, a proud Class of 2015 at the United States Air Force Academy was accepted into the Cadet Wing. To commemorate this occasion all 4,000 cadets participated in a parade at Stillman Field in which the new cadets marched to and joined their new squadrons. I was privileged to be one of 10 members of the class of '75 to present the top 10 basic training graduates with an award. Then, the entire class of 2015 took their "Honor Oath of Allegiance", marched to and joined their new squadrons as full-fledged Air Force Cadets! |
| The Basics March On for Their Acceptance Parade |
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| Basics March By as Members of their "Legacy Class" of '75 Look On |
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| View of the Assembled Cadet Wing with Color Guard in the Center |
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| Class of '75 Presents Awards to the Top 10 Basic Training Graduates |
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| Basics Take Their "Honor Oath of Allegiance" |
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| New Cadets March in "V" Formation to Join the Cadet Wing |
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| The New Cadet Wing Passes in Review |
Several weeks ago I was invited to participate in Honor lessons with the basics of the Class of 2015 at the Air Force Academy. The intent was to show these future cadets and officers that Academy grads feel the Cadet Honor Code is important enough for us to take the time to discuss it with them.
Basics Marching to Training
More Marching
Inside the Compound
An Element of Basics Marching
Another Look at the Compound
The Secret Team That Killed Bin LadenBy Marc Ambinder, National Journal, Mon May 2, 10:59 am ET
From Ghazi Air Base in Pakistan, the modified MH-60 helicopters made their way to the garrison suburb of Abbottabad, about 30 miles from the center of Islamabad. Aboard were Navy SEALs, flown across the border from Afghanistan, along with tactical signals, intelligence collectors, and navigators using highly classified hyperspectral imagers.
After bursts of fire over 40 minutes, 22 people were killed or captured. One of the dead was Osama bin Laden, done in by a double tap -- boom, boom -- to the left side of his face. His body was aboard the choppers that made the trip back. One had experienced mechanical failure and was destroyed by U.S. forces, military and White House officials tell National Journal.
Were it not for this high-value target, it might have been a routine mission for the specially trained and highly mythologized SEAL Team Six, officially called the Naval Special Warfare Development Group, but known even to the locals at their home base Dam Neck in Virginia as just DevGru.
This HVT was special, and the raids required practice, so they replicated the one-acre compound at Camp Alpha, a segregated section of Bagram Air Base. Trial runs were held in early April.
DevGru belongs to the Joint Special Operations Command, an extraordinary and unusual collection of classified standing task forces and special-missions units. They report to the president and operate worldwide based on the legal (or extra-legal) premises of classified presidential directives. Though the general public knows about the special SEALs and their brothers in Delta Force, most JSOC missions never leak. We only hear about JSOC when something goes bad (a British aid worker is accidentally killed) or when something really big happens (a merchant marine captain is rescued at sea), and even then, the military remains especially sensitive about their existence. Several dozen JSOC operatives have died in Pakistan over the past several years. Their names are released by the Defense Department in the usual manner, but with a cover story -- generally, they were killed in training accidents in eastern Afghanistan. That's the code.
How did the helicopters elude the Pakistani air defense network? Did they spoof transponder codes? Were they painted and tricked out with Pakistan Air Force equipment? If so -- and we may never know -- two other JSOC units, the Technical Application Programs Office and the Aviation Technology Evaluation Group, were responsible. These truly are the silent squirrels -- never getting public credit and not caring one whit. Since 9/11, the JSOC units and their task forces have become the U.S. government's most effective and lethal weapon against terrorists and their networks, drawing plenty of unwanted, and occasionally unflattering, attention to themselves in the process.
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| Bin Laden Compound Near Islamabad |
[My thanks to Steve Gillespie and Loretta Montoya for forwarding this article]JSOC costs the country more than $1 billion annually. The command has its critics, but it has escaped significant congressional scrutiny and has operated largely with impunity since 9/11. Some of its interrogators and operators were involved in torture and rendition, and the line between its intelligence-gathering activities and the CIA's has been blurred.
But Sunday's operation provides strong evidence that the CIA and JSOC work well together. Sometimes intelligence needs to be developed rapidly, to get inside the enemy's operational loop. And sometimes it needs to be cultivated, grown as if it were delicate bacteria in a petri dish.
In an interview at CIA headquarters two weeks ago, a senior intelligence official said the two proud groups of American secret warriors had been "deconflicted and basically integrated" -- finally -- 10 years after 9/11. Indeed, according to accounts given to journalists by five senior administration officials Sunday night, the CIA gathered the intelligence that led to bin Laden's location. A memo from CIA Director Leon Panetta sent Sunday night provides some hints of how the information was collected and analyzed. In it, he thanked the National Security Agency and the National Geospatial-Intelligence Agency for their help. NSA figured out, somehow, that there was no telephone or Internet service in the compound. How it did this without Pakistan's knowledge is a secret. The NGIA makes the military's maps but also develops their pattern recognition software -- no doubt used to help establish, by February of this year, that the CIA could say with "high probability" that bin Laden and his family were living there.
Recently, JSOC built a new Targeting and Analysis Center in Rosslyn, Va. Where the NationalCounterterrorism Center tends to focus on threats to the homeland, TAAC, whose existence was first disclosed by the Associated Press, focuses outward, on active "kinetic" -- or lethal -- counterterrorism-missions abroad. Its creation surprised the NCTC's director, Michael Leiter, who was suspicious about its intent until he visited.
That the center could be stood up under the nose of some of the nation's most senior intelligence officials without their full knowledge testifies to the power and reach of JSOC, whose size has tripled since 9/11. The command now includes more than 4,000 soldiers and civilians. It has its own intelligence division, which may or may not have been involved in last night's effort, and has gobbled up a number of free-floating Defense Department entities that allowed it to rapidly acquire, test, and field new technologies.
Under a variety of standing orders, JSOC is involved in more than 50 current operations spanning a dozen countries, and its units, supported by so-called "white," or acknowledged, special operations entities like Rangers, Special Forces battalions, SEAL teams, and Air Force special ops units from the larger Special Operations Command, are responsible for most of the "kinetic" action in Afghanistan.
Pentagon officials are conscious of the enormous stress that 10 years of war have placed on the command. JSOC resources are heavily taxed by the operational tempo in Afghanistan and Pakistan, officials have said. The current commander, Vice Adm. William McRaven, and Maj. Gen. Joseph Votel, McRaven's nominated replacement, have been pushing to add people and intelligence, surveillance, and reconnaissance technology to areas outside the war theater where al-Qaida and its affiliates continue to thrive.
Earlier this year, it seemed that the elite units would face the same budget pressures that the entire military was experiencing. Not anymore. The military found a way, largely by reducing contracting staff and borrowing others from the Special Operations Command, to add 50 positions to JSOC. And Votel wants to add several squadrons to the "Tier One" units -- Delta and the SEALs.
When Gen. Stanley McChrystal became JSOC's commanding general in 2004, he and his intelligence chief, Maj. Gen. Michael Flynn, set about transforming the way the subordinate units analyze and act on intelligence. Insurgents in Iraq were exploiting the slow decision loop that coalition commanders used, and enhanced interrogation techniques were frowned upon after the Abu Ghraib scandal. But the hunger for actionable tactical intelligence on insurgents was palpable.
The way JSOC solved this problem remains a carefully guarded secret, but people familiar with the unit suggest that McChrystal and Flynn introduced hardened commandos to basic criminal forensic techniques and then used highly advanced and still-classified technology to transform bits of information into actionable intelligence. One way they did this was to create forward-deployed fusion cells, where JSOC units were paired with intelligence analysts from the NSA and the NGA. Such analysis helped the CIA to establish, with a high degree of probability, that Osama bin Laden and his family were hiding in that particular compound.
These technicians could "exploit and analyze" data obtained from the battlefield instantly, using their access to the government's various biometric, facial-recognition, and voice-print databases. These cells also used highly advanced surveillance technology and computer-based pattern analysis to layer predictive models of insurgent behavior onto real-time observations.
The military has begun to incorporate these techniques across the services. And Flynn will soon be promoted to a job within the Office of the Director of National Intelligence, where he'll be tasked with transforming the way intelligence is gathered, analyzed, and utilized.
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| Charles Krauthammer |
[My thanks to Tom Nick for forwarding this article]The Grand Compromiseby Charles Krauthammer, Friday, April 15, 2011
WASHINGTON — The most serious charge against Rep. Paul Ryan’s budget is not the risible claim, made most prominently by President Obama in his George Washington University address, that it would “sacrifice the America we believe in.” The serious charge is that the Ryan plan fails by its own standards: Because it only cuts spending without raising taxes, it accumulates trillions of debt and doesn’t balance the budget until the 2030s.
If the debt is such a national emergency, they say, Ryan never really gets you there from here.
But the critics miss the point. You can’t get there from here without Ryan’s plan. It’s the essential element. Of course Ryan is not going to propose tax increases. You don’t need Republicans for that. That’s what Democrats do. The president’s speech was a prose poem to higher taxes—with every allusion to spending cuts guarded by a phalanx of impenetrable caveats.
Ryan reduces federal spending by $6 trillion over 10 years—from the current 24 percent of GDP to the historical post-World War II average of about 20 percent.
Now, the historical average for revenues over the last 40 years is between 18 percent and 19 percent of GDP. As we return to that level with the economic recovery (we’re now at about 15 percent), Ryan would still leave us with an annual deficit in 2021 of 1.6 percent of GDP.
The critics are right to focus on that gap. But it is bridgeable. And the mechanism for doing so is in plain sight: tax reform.
Real tax reform strips out exclusions, deductions, credits and the innumerable loopholes that have accumulated since the last tax reform of 1986. The Simpson-Bowles commission, for example, identifies $1.1 trillion of such revenue-robbers. In one scenario, it strips them all out and thus is able to lower rates for everyone to three brackets of 8 percent, 14 percent and 23 percent.
The commission does recommend that, on average, about $100 billion annually of that $1.1 trillion be kept by the Treasury (rather than going back to the taxpayer) to reduce the deficit. This is a slight deviation from revenue neutrality, but it still yields a major cut for the top rate from the current 35 percent to 23 percent. The overall result is so reasonable and multiply beneficial that it rightly gained the concurrence of even the impeccably conservative (commission member) Sen. Tom Coburn.
That’s the beauty of tax reform: It is both transparent and flexible. That flexibility and transparency can be applied to the Ryan plan. If you need a bit more deficit reduction to bridge the 1.6 percent GDP gap that remains after 10 years, you can get there by slightly raising the final rates.
Ryan’s tax reform envisions three brackets with a top rate of 25 percent. There’s nothing sacred about that number. In principle, you could raise all the rates slightly with the top rate going to, say, 28 percent—the top rate that came out of Ronald Reagan’s 1986 tax reform. You’re still much lower than the current 35 percent. And yet that final boost could bring you closer to a fully balanced federal budget at roughly 20 percent of GDP.
Nor would any great conservative principle be violated. The historical average of revenues—18 percent to 19 percent of GDP—could be raised one point or so on the perfectly reasonable grounds that we are a slightly older society, and that we wish to avail ourselves of the extraordinary but expensive medical technology that can increase both the quality and length of life.
This one concession would yield a fully balanced budget more quickly than Ryan’s plan and would reduce the debt/GDP ratio even more steeply (because GDP would be growing, while debt would not). The effect on America’s financial standing in the world would be dramatic: Restored confidence in U.S. fiscal health would reduce interest rates, which would lower the overall debt burden, which could allow lower taxes, which could stimulate yet more economic growth. A virtuous circle.
That’s the finish line. But it starts with spending cuts. Serious cuts, as Ryan suggests—not the smoke and mirrors the Obama speech shamelessly presented as a plan.
Given the Democrats’ instinctive resort to granny-in-the-snow demagoguery, the Republicans are right not to budge on taxes until serious spending cuts are in place. At which point, the grand compromise awaits. And grand it would be. Saving the welfare state from insolvency is no small achievement.
Details are vague. 
U.S. Dollar Collapse Could Occur at Any TimeMarch 11, 2011
China this morning reported 4.9% price inflation for the month of February, exceeding analyst expectations of 4.8%. With China now mimicking the U.S. Bureau of Labor Statistics and taking steps to artificially manipulate their consumer price index (CPI) numbers as low as possible, it is likely that real price inflation in China is now closer to 10%. China was at least smart enough to raise interest rates last month by 25 basis points to 6.06%, while the Federal Reserve continues to leave interest rates near zero with there being absolutely no talk of the Federal Reserve ever raising interest rates again. China will be successful at containing inflation, as U.S. inflation spirals out of control and becomes the greatest economic crisis in American history.
China this week reported a $7.3 billion trade deficit for the month of February, its largest trade deficit in seven years, which surprised many global economists. NIA believes China's trade deficit is temporary and that China will quickly return to having a trade surplus. The Federal Reserve's QE2 along with China's destructive monetary policies, which artificially devalue the yuan, have led to a massive rise in China's raw material costs this year. NIA believes that in the upcoming months, Chinese manufacturers will raise the prices of their products that get exported to the U.S., to counteract rising commodity prices. With most products used by Americans today having been manufactured in China, this will mean Americans will soon see massive price inflation in just about all consumer goods they use. NIA projects that by the end of 2011, we will begin to see the U.S. CPI increase by 4.9% or higher on a year-over-year basis, with real U.S. price inflation rising north of 10%.
The mainstream media is proclaiming that China's trade deficit will silence calls for the Chinese to allow their currency to strengthen against the U.S. dollar. The fact is, China's government has for long been making the major mistake of printing too many yuan in order to artificially prop up the U.S. dollar. Their fear was, if the U.S. dollar was allowed to decline too rapidly, prices of Chinese goods would rise in terms of U.S. dollars and Americans would no longer afford to import them.
The truth is, if China allowed the yuan to strengthen, the Chinese would have enjoyed a much higher standard of living. Sure, prices would rise in dollars and Americans would import less, but the Chinese would have the ability to consume more of their own products. Now, as a result of China expanding its own money supply in order to keep the yuan pegged to the U.S. dollar, Americans will be forced to pay a much higher price for Chinese goods anyway. The same higher prices Americans were going to pay as a result of exchange rate appreciation, Americans will now pay as a result of inflation. For the Chinese, the exchange rate appreciation route would have been a much better route to take than the inflation route, because now the Chinese will also be forced to pay higher prices. In the very short-term, China might actually suffer more than the U.S. because they lack the social safety nets that have been implemented here in America.
The U.S. government has been successful at temporarily paying off Americans into not rioting in the streets like in Arab nations. It was just announced a few days ago that the number of Americans on food stamps in the month of December of 2010 was a record 44,082,324, up 13.1% from one year earlier and 1.1% from one month earlier. That is more than 14% of the total U.S. population! Combined with President Obama extending unemployment benefits up to 99 weeks, American citizens are too busy and distracted playing with their iPad 2s and gossiping on Twitter about Charlie Sheen, to have any time to protest in Washington, DC.
NIA believes the U.S. government's entitlement spending is currently having the unintended consequence of making Americans dependent on government. It is like when you take wild animals into captivity and you feed them, teach them to do tricks and take care of them for a period of many years; if you just dump them one day back into the wild, it will be very difficult for them to survive. Americans who have become dependent on unemployment checks and food stamps will likely soon abruptly find out that they must begin to fend for themselves without any help from the government. The result will be many Americans turning into wild animals and becoming so desperate that they will have to rob and burglarize their fellow neighbors who were smart enough to prepare, or else they will risk starving to death.
As a result of QE2, the Federal Reserve is now buying 70% of U.S. treasuries, up from previously only buying 10% of treasury bonds. Foreign central banks are now buying just 30% of U.S. treasuries, compared to previously buying 50% of treasury bonds. The U.S. budget deficit in the month of February reached a record $222.5 billion or $2.67 trillion on an annualized basis. With the Federal Reserve now monetizing our debt in full swing, a complete and total loss of confidence in the U.S. dollar could be imminent.
Just like how nobody in the mainstream media was calling for the collapse of Egypt's government a few months ago, almost nobody in the media believes a collapse of the U.S. dollar could possibly take place anytime soon. NIA members are educated enough to see that the writing is on the wall. The Federal Reserve can deny all it wants that the U.S. is experiencing inflation, but with the cost to print a single U.S. dollar paper note rising by 50% since 2008, massive inflation is here right under Federal Reserve Chairman Ben Bernanke's nose. Every day that goes by, China is quietly implementing more and more steps that expand the yuan's use in cross border trade, in order to position the yuan as the world's next reserve currency.
So few Americans are presently preparing for hyperinflation that if hyperinflation broke out today, approximately 90% of Americans won't have the means to put food on the table or put fuel in their automobiles. During the upcoming hyperinflationary crisis, food stamps will no longer have any value at all and all U.S. entitlement programs will come to a complete halt. Americans will take to the streets like the world has never seen before.
The biggest question NIA has today is, will the U.S. government resort to firing at its own citizens, if major riots take place in Washington, DC. On Thursday, police in Saudi Arabia shot and wounded three protesters. The price of oil rose by a few dollars per barrel as soon as this news hit the wire, which shows just how nervous the world's financial markets have become in recent weeks. The fact that the Dow Jones has declined significantly in recent days, in our opinion means that the odds of QE3 being launched as soon as QE2 is over, are now much higher than they were several weeks ago.
The other big question NIA has today is, if in the unlikely event there is no QE3, who will fill in for the artificial buying demand currently coming from the Federal Reserve. After all, with no QE3, the Federal Reserve will go from buying 70% of treasury bonds to being a seller of U.S. treasuries. NIA is 100% sure that foreign central banks aren't itching to jump back in to fill the hole. While in the past, the private sector may have picked up the slack, we believe individual investors will now be more reluctant to jump into government bonds, especially with bond king Bill Gross reducing the government bond holdings in his Pimco Total Return Fund down to zero. The bottom line is, no QE3 means interest rates will fly sky high and destroy the phony so-called "economic recovery".
From April to August of 2010, the last time the Federal Reserve allowed its balance sheet to shrink, the Dow Jones fell by over 1,000 points. If Bernanke doesn't soon begin to leak out the strong likelihood of QE3, we could see the stock market decline by 1,000 points or more, which will force Bernanke into launching QE3. If we see a major sell off in stocks, NIA doesn't necessarily think that precious metals prices will follow. In fact, we could see gold and silver rise along with the Dow Jones falling. NIA projects the Dow Jones to gold ratio to decline to 6.5 in 2011. This means even if the Dow Jones fell to below 11,000, we still believe gold is likely to rise to around $1,600 to $1,700 per ounce this year, with silver soaring to around $42 to $44 per ounce. NIA believes the worst decision any American can make is to sell their gold and silver and go long U.S. dollars, hoping to buy their precious metals back at a lower price in the future.
State of the Union: Fact-checking Obama's speechBy Richard Wolf and Gregory Korte, USA TODAY
President Obama focused about 80% of his State of the Union Address on the economy, offering proposals designed to create jobs, make the United States more competitive with other developed nations and reduce future budget deficits. Those goals can conflict, however. Here's a look behind the rhetoric:
Statement:"Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you're flying high at first, but it won't take long before you'll feel the impact."
•Reality check: This is the central thesis of Obama's speech — that the United States needs to invest in clean energy technology, a crumbling physical infrastructure and education in order to compete better with developing nations such as China and India.
The president says any investments should not increase the deficit, but he didn't say how to do that, other than by eliminating billions of dollars in tax breaks to oil companies. House Transportation Committee Chairman John Mica, R-Fla., has mentioned using money left over from the $814 billion stimulus law passed in 2009. Ed DeSeve, the White House point man on stimulus implementation, said in October that only $110 billion remained unspent, including $45 billion in tax cuts.
And the Highway Trust Fund — which also helps pay for mass transit — can't pay for current transportation needs without raising the gas tax, now 18.4 cents-a-gallon, the Congressional Budget Office says. At the current rate of spending and gas tax collections, CBO analyst Chad Shirley wrote last week, the highway account "would be unable to meet its obligations sometime during fiscal year 2012."
"Big-government advocates have a history of calling nearly all government spending 'investment,' because it sounds better," says Brian Riedl of the conservative Heritage Foundation. "It's very dangerous to claim these investments will pay for themselves."Statement:
"Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable."
•Reality check: Obama revised last year's proposal to freeze domestic spending, excluding Social Security, Medicare and Medicaid, defense, homeland security and veterans programs. Now he wants five years, not three. But by exempting so much, the freeze would apply to only about $500 billion of a $3.8 trillion budget — "a fairly narrow part," White House economic adviser Gene Sperling admits.
The White House claims the freeze would save $400 billion over 10 years. It says the part of the budget to be frozen, measured as a share of the nation's economy, is lower than it's been in a half-century.
Republicans want to cut spending much more. House GOP leaders, led by Speaker John Boehner, want to cut $100 billion this year and about $1.5 trillion over 10 years by reverting to 2008 spending levels. Conservative Republicans led by Rep. Jim Jordan of Ohio want to go further, saving $2.5 trillion over 10 years by reverting to 2006 spending levels.
Statement:"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. … Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change."
•Reality check: By focusing only on corporate taxes, the president is putting off a more sweeping overhaul of the tax code called for by his bipartisan fiscal commission and other panels.
He would eliminate or reduce many of the tax breaks inserted into the tax code for specific industries and use the money to lower the 35% corporate tax rate, which is the highest among 31 developed countries ranked by the Organization for Economic Cooperation and Development.
Lower rates might be good for most corporations — but fewer than 6 million businesses, or 18% of the nation's total, file as corporations. More than 23 million, or 72%, are sole proprietorships, while 3 million more, or nearly 10%, are partnerships. "I am certain that they do not want to be left out of tax reform," says R. Bruce Josten, an executive vice president of the U.S. Chamber of Commerce.
Statement:"Most of the cuts and savings I've proposed only address annual domestic spending, which represents a little more than 12% of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won't."
•Reality check: Beyond his proposed domestic spending freeze, which comes with lots of exclusions, Obama didn't take the lead on broader deficit reduction. He spoke about the need to protect Social Security for future generations and to get further savings in health care beyond those envisioned in the overhaul signed last year, but there were no specifics.
Budget watchdogs had hoped Obama would embrace specific proposals from the bipartisan commission that last month voted 11-7 for major spending cuts, tax increases and changes to Social Security and Medicare. The federal budget deficit stands at $1.3 trillion, and the accumulated national debt is $14.1 trillion.
"A spending freeze is a step in the right direction, but it is only one element of the long-term fiscal plan we need," says Pete Peterson, chairman of the Peter G. Peterson Foundation, a fiscal watchdog group. "We cannot become more of an investment economy if we don't have future resources to invest."
Statement:"To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 — because the more we export, the more jobs we create at home. Already, our exports are up."
•Reality check: Obama called for doubling U.S. exports in five years during last year's State of the Union address. He's on track so far: U.S. exports in the first 11 months of 2010 were up 17%, according to numbers released this month by the U.S. International Trade Administration.
The White House claims that recent export deals with China will "support" 235,000 jobs. It says the pending free trade agreement with South Korea will support another 70,000, and that business deals inked with India last fall will create 50,000.
Those figures are based on a Commerce Department formula that translates export dollars into jobs, according to John Murphy of the U.S. Chamber of Commerce, who says the figures are conservative. The AFL-CIO says the figures for South Korea are inflated.
Statement:"Because the American people deserve to know that special interests aren't larding up legislation with pet projects, both parties in Congress should know this: If a bill comes to my desk with earmarks inside, I will veto it."
•Reality check: Obama's stance on earmarks has evolved since he was first elected to the Senate. Obama has called for increased disclosure of earmarks, which he claimed as a senator, but the veto threat is his toughest stance yet.
"To me, it's the smart political play," says Steve Ellis of the budget watchdog group Taxpayers for Common Sense. With House Republicans already pledging an earmark moratorium, Obama's stance puts additional pressure on the Senate not to load up spending bills with pet projects.
Two points, one fiscal, one political: Earmarks represent only about $16 billion, or less than 0.5% of the $3.8 trillion budget, so eliminating them won't accomplish much. And Senate Majority Leader Harry Reid, D-Nev., on Tuesday called wiping out earmarks "a lot of pretty talk, but it is only giving the president more power. He's got enough power already."
NIA's Top Ten Predictions for 2011
1) The Dow/Gold and Gold/Silver ratios will continue to decline.
In NIA's top 10 predictions for 2010, we predicted major declines in the Dow/Gold and Gold/Silver ratios. The Dow/Gold ratio was 9.3 at the time and finished 2010 down 15% to 8.1. The Gold/Silver ratio was 64 at the time and finished 2010 down 28% to 46. We expect to see the Dow/Gold ratio decline to 6.5 and the Gold/Silver ratio decline to 38 in 2011. Later this decade, we expect to see the Dow/Gold ratio bottom at 1 and the Gold/Silver ratio decline to below 16 and possibly as low as 10.
2) Colleges will begin to go bankrupt and close their doors.
We have a college education bubble in America that was made possible by the U.S. government's willingness to give out cheap and easy student loans. With all of the technological advances that have been taking place worldwide, the cost for a college education in America should be getting cheaper. Instead, private four-year colleges have averaged 5.6% tuition inflation over the past six years.
College tuitions are the one thing in America that never declined in price during the panic of 2008. Despite collapsing stock market and Real Estate prices, college tuition costs surged to new highs as Americans instinctively sought to become better educated in order to better ride out and survive the economic crisis. Unfortunately, American students who overpaid for college educations are graduating and finding out that their degrees are worthless and no jobs are available for them. They would have been better off going straight into the work force and investing their money into gold and silver. That way, they would have real wealth today instead of debt and would already have valuable work place experience, which is much more important than any piece of paper.
Colleges and universities took on ambitious construction projects and built new libraries, gyms, and sporting venues, that added no value to the education of students. These projects were intended for the sole purpose of impressing students and their families. The administrators of these colleges knew that no matter how high tuitions rose, students would be able to simply borrow more from the government in order to pay them.
Americans today can purchase just about any type of good on Amazon.com, cheaper than they can find it in retail stores. This is because Amazon.com is a lot more efficient and doesn't have the overhead costs of brick and mortar retailers. NIA expects to see a new trend of Americans seeking to become educated cheaply over the Internet. There will be a huge drop off in demand for traditional college degrees. NIA expects to see many colleges default on their debts in 2011. These colleges will be forced to either downsize and educate students more cost effectively or close their doors for good.
3) U.S. retailers will report declines in profit margins and their stocks will decline.
Although most analysts on Wall Street believe retailers will report a major increase in holiday season sales over a year ago, NIA believes any top line growth retailers report will come at the expense of dismal bottom line profits. NIA expects many retailers to report large declines in their profit margins for the 4Q of 2010 and first half of 2011. Retailers have been selling goods at bargain basement prices in order to generate demand. Americans, being flush with newly printed dollars from the Federal Reserve, have been eager to buy up supplies of goods at artificially low prices. However, shareholders will likely sell off their retail stocks on this news. As share prices of retail stocks decline, retailers will begin to rapidly increase their prices by mid-2011.
4) The mainstream public will begin to buy gold.
Although the mainstream media continues to proclaim we have a gold bubble, it is impossible to have a gold bubble when mainstream America isn't buying gold. The average American is more likely to be a seller of gold through companies like Cash4Gold, in order to raise enough dollars to put food on their table. Most Americans today don't even know the price of gold. During the next 12 months, we expect to see a huge ramping up in the public's knowledge about gold. More Americans than ever will know the current price of gold and understand that it is real money. By the end of 2011, we expect the general public to begin looking at gold as an investment, just like they began looking at Real Estate as an investment in 2003. Sometime during the next six months, we believe you will overhear a stranger at a restaurant talking about investing into gold. We believe the price of gold could surge to as high as $2,000 per ounce in 2011.
5) We will see a huge surge in municipal debt defaults.
In the closing months of 2010, we saw yields on municipal bonds rise to their highest levels since early 2009. After 29 consecutive weeks of inflows into municipal bond funds, investors are now pulling money out of municipal bond funds by record amounts, with $9 billion exiting municipal bond funds in the five weeks leading up to Christmas. NIA believes there could be a small dip in municipal bond yields over the next couple of months as investors realize that municipal debt defaults might not be imminent, but we expect municipal bond yields to begin rising again by mid-2011 with a huge surge in municipal debt defaults coming in the second half of 2011. Although the Federal Government has a printing press that it uses in order to pay its debts, cities and municipalities do not.
6) We will see a large decline in the crude oil/natural gas ratio.
When we released our top 10 predictions for 2010, crude oil was $73 per barrel and we predicted that oil prices would rise to $100 per barrel in 2010. Crude oil ended up rising by 26% in 2010 to $92 per barrel, coming short of our outlook. However, it is possible our $100 per barrel oil forecast might be off by just a month or two. We wouldn't be surprised to see $100 per barrel oil within the first two months of 2011 and if so, we expect to see a huge movement in America this year towards natural gas.
The crude oil/natural gas ratio currently stands at 20. Historically, the crude oil/natural gas ratio has averaged 10 and based on an energy equivalent basis, crude oil and natural gas prices should have a 6 to 1 ratio. Brand new fracking technology has caused natural gas supplies in the U.S. to rise to record levels. Although our country might be flooded with natural gas, the natural gas fracking boom that is taking place across the U.S. today is causing ground water in the U.S. to become contaminated. Americans living near natural gas wells that use fracking, are finding that they can now light the water coming out of their faucets on fire. New government regulations are likely to crack down on natural gas fracking and this will come at the same time as American individuals and businesses begin to convert their automobiles and machinery to run off of natural gas. A large decline in the crude oil/natural gas ratio in 2011 is likely, possibly down to as low as 15.
7) The median U.S. home will decline sharply priced in silver.For the past couple of years, being able to make ones mortgage payment has been the primary concern for the average American. In an attempt to support housing prices and keep mortgage interest rates at artificially low levels, the Federal Reserve has been implementing massive quantitative easing and buying mortgage backed securities. NIA believes the Federal Reserve will be successful at putting a nominal floor under Real Estate prices. NIA also believes that the Federal Reserve's actions will cause a massive decline in the value of the U.S. dollar, which will allow Americans to more easily pay back their mortgages with depreciated U.S. dollars.
However, the Federal Reserve will not be successful at reinflating the Real Estate bubble. In fact, in terms of real money (gold and silver), NIA believes Real Estate prices will decline to record lows. The median U.S. home is currently priced at $170,600 or 5,500 ounces of silver. Priced in silver, the median U.S. home price is down 16% from one month ago and 45% from one year ago. After the inflationary crisis of the 1970s, silver rose to a high in 1980 of $49.45 per ounce. The median U.S. home price in 1980 was $47,200, which means the median U.S. home/silver ratio declined to a low of 954.
With the Federal Reserve printing money at an unprecedented rate and record amounts of new homes built during the recent Real Estate bubble, NIA believes it is inevitable that the median U.S. home will decline to a price of 1,000 ounces of silver this decade and possibly as low as 500 ounces of silver. In 2011, we believe a decline in the median U.S. home price to 4,000 ounces of silver is possible.
8) Food inflation will become America's top crisis.
Starting a few decades ago and accelerating in recent years, America has seen a boom in non-productive service jobs, mainly in the financial sector. Most of these jobs were made possible by inflation. Without inflation, which steals from the purchasing power of the incomes and savings of goods producing workers, the majority of the jobs on Wall Street would not exist today and our country would be in much better financial shape because of it.
With most Americans in recent decades seeking non-productive jobs in the financial services sector because that is where they could access the Fed's cheap and easy money, very few Americans sought jobs in the farming and agriculture sector. In the 1930s, approximately 28% of the population was employed in the agriculture sector, but today this number is less than 2%. Agriculture currently makes up only 1.2% of U.S. GDP, compared to the services sector, which makes up 76.9% of U.S. GDP.
There is currently a major shortage of farmers in the U.S. and a lot of land that was previously used for farming has now been developed with Real Estate. To make matters worse, agricultural products now trade on the international market and Americans must now compete against citizens of emerging nations like China and India for the purchasing of food.
Prices of goods and services do not rise equally when governments create monetary inflation. Inflation gravitates most towards the items that Americans need the most and there is nothing that Americans need more to survive than food and agriculture. As the U.S. government prints money, the first thing Americans will spend it on is food. Americans can cut back on energy use by moving into a smaller home and carpooling to work. They can cut back on entertainment, travel, and other discretionary spending. However, Americans can never stop spending money on food.
The days of cheap food in America are coming to an end. The recent unprecedented rise that we have seen in agricultural commodity prices is showing no signs of letting up. In the past few days, sugar futures reached a new 30-year high, coffee futures reached a new 13-year high, orange juice futures reached a new 3-year high, corn futures reached a new 29-month high, soybean futures reached a new 27-month high, and palm oil futures reached a new 33-month high.
We estimate that it takes as long as six months for rising agricultural commodity prices to be felt by U.S. consumers in their local supermarket. Even if food producers and retailers accept substantially lower profit margins in 2011, we are still guaranteed to see double-digit across the board U.S. food inflation in the first half of the year. That is correct, let us repeat, NIA guarantees that Americans will see double-digit food inflation in the first half of 2011.
Shockingly, except for Glenn Beck (who was kind enough to feature our food inflation report), absolutely nobody in the mainstream media is doing anything to warn Americans about the food inflation crisis that is ahead. In fact, left-wing groups like Media Matters (funded by George Soros) have been working tirelessly to try and discredit NIA's research while reassuring Americans that they need not worry about food inflation. The truth is, when Americans realize that they can no longer take food for granted, we will likely see the outbreak of an all out food price panic with everybody rushing to the supermarket to stock up on goods before prices rise even further. The end result will likely be government price controls and empty store shelves, but NIA doesn't project this to occur until later this decade.
9) QE2 will disappoint and the Federal Reserve will prepare QE3.
The Dow Jones is now back up to 11,670, which is where it was in mid-2008 before the crash. NIA believes that most of QE2 has already been priced into the market, before the Federal Reserve even prints the $600 billion. At some point, we expect it to become apparent to all that the U.S. economic recovery is phony and stock prices are rising solely due to inflation. In our opinion, we will see some sort of catalyst that causes the stock market to sell off at some point and the consensus on Wall Street will be that QE2 will not be enough to save the U.S. economy. By the end of 2011, we expect the Federal Reserve to begin planning QE3. QE3 might be the final dose of inflation that causes the U.S. economy to overdose into hyperinflation.
10) Sarah Palin will announce she is running for President as a Republican.
NIA believes that Sarah Palin has been setup perfectly to run for President in 2012 and that she will announce her candidacy for the Republican nomination with great fanfare from tea party supporters in 2011. We give Sarah Palin credit for recently speaking out against the Federal Reserve's QE2 and warning Americans about the food inflation crisis that is ahead. Unfortunately, we believe Sarah Palin is not a true independent and is being controlled by the Republican establishment, which is just as responsible as the Democrats are for the financial crisis we have today. As President, Palin would be unlikely to implement the measures that are necessary to prevent hyperinflation. In our opinion, we need to elect a true libertarian candidate as President who will cut government spending, balance the budget, and restore sound money. NIA intends to support Ron Paul, if he decides to run for President.
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