Sequester

The government is finally cutting spending that is of such a massive magnitude that the number of aircraft carriers are being cut back in the Persian gulf, illegal aliens have to be released from jail, people will be loosing their jobs, and many other catastrophic events will be headed our way according to our president. What is the cause of all of this calamity? 85 billion dollars worth of cuts that will take place this year. This is a lot of money or about half of a percentage point of the official debt of 16 trillion-- the real debt is around 100 to 200 trillion dollars-- or about 10 percent of this year's projected budget deficit. Here are some numbers to help put this extremely massive spending cut into perspective. The government borrows about 4 billions dollars a day, 85 divided by 4 equals 21. So the amount of money that will be cut is equal to about 21 days worth of new debt. The other days of the year the government will still be adding debt at the rate of about 4 billion per day. The government borrows 35 cents of every dollar spent, and under the sequester it will borrow 32 cents for every dollar it spends. That is a reduction in the rate borrowing by 2 cents or 6 percent. And this says it all: from Feb. 27 to Feb. 28, you need to check out the link to Treasury.gov to put this into perspective., the government issued about 85 billion dollars worth of debt or “In other words, the entire apocalyptic impact of the sequester for 2013 was offset by one day's debt issuance.".

To sum up this 85 billion spending cut: it is extremely insignificant. The government will never do with less money. The government will never reduce its sphere of influence in the economy. Not under Ronald Reagan or any president (click on the chart below). The state will continue to expand no matter who is at the reins. It is sad that our elected leaders will not be honest with the American people by warning them of the true economic crisis that is headed our way and warning them to prepare for what is coming. And instead of our leaders helping to prevent this crisis by making the necessary spending cuts and entitlement reforms that will avert this coming economic reset, our leaders will lie to and scare the American people when the government has to make such a small and insignificant cut and attempt to make it unnecessarily painful by cutting things that really matter like national defense as opposed to cutting waste like funding for studying shrimp running on tread mills. While our elected leaders will not level with the American people about the coming economic reset, there are plenty of investors with a proven track record of predicting economic events that will: Jim Rogers, Kyle Bass, Peter Schiff, Stanley Druckenmiller, Marc Faber, and others. It is time for Americans to stop getting taken advantage of and get their heads out of the sand, pull up their pants, pick up a magnifying glass, and get some clues.

Print Your Own AR-15?

3-D printing or additive manufacturing will be a transformative technology of the future along with many other advances in technology. There is a current gun debate going on in the country, and this technology possibly holds the key to preventing the government from being able to ban guns because in the not-too-distant future you will possibly be able to print a gun using a 3-D printer. This guy says that he has already printed a functional AR-15. I doubt that he actually created a functional firearm using this technology because it is not currently possible to create a barrel using this technology that would be safe to shoot. From an investment point of view, 
3-D printing is worth investing in, DDD.

Overall, advances in technology-- computer generated news articles, automation, artificial intelligence, robots, and self-driving cars (truck drivers will become obsolete)-- will greatly transform our lives in the not-to-distant future. All of the good jobs of the future will be in engineering or jobs that require creativity and brain power: you will have to be smart. If you want to set your kids up to have a sucessful economic future, then make sure they learn math. If you can do math, then you can go to a school like Georgia Tech and be as close as you can get to having a guaranteed bright economic future.

QE-4 And The Monetizing of Practically All New Debt

The Federal Reserve made the expected announcement of QE-4  today less than three months after QE-3 was announced. QE-4 is an extension of a previous program called Operation Twist:

Under the "Operation Twist" program that will expire at the end of the month, the Fed was buying $45 billion in longer-term Treasuries with proceeds from the sale of short-term debt. The new round of government bond-buying it announced on Wednesday will be funded by essentially creating new money, further expanding the Fed's $2.8 trillion balance sheet.   

This 45 billion dollars a month purchases of treasuries is in addition to the 40 billion a month purchases of mortgage backed securities for a total of 85 billion dollars being printed each month. This figure is not set in stone and could grow or shrink in the coming months according to Bernanke. The stimulative effects of QE are lessening with each new round. The markets went up massively after the announcement of QE-1, less after QE-2, even less after QE-3, and negatively for QE-4.

Zero Hedge points out the startling fact that the Federal Reserve will be monetizing practically all net new debt:

Three months ago, as part of our ongoing explanation of what happens next to the Fed's balance sheet (which is now established as official canon in advance of the December 12th FOMC, when Bernanke will effectively announce QE4 consisting of $40 billion in MBS and $45 billion in unsterilized TSY purchases as we predicted the day QE3 was announced), we said that "the Fed will continue increasing its 10 Yr equivalents by roughly 12% (of the total market) per year, for at least the next 3 years, at which point it will own 60% of the entire Treasury market. It means that the Fed will monetize all gross long-term issuance every year for the next 3 years." Most looked at the bold sentence without it registering just what it means. Perhaps, now that the "serious" media has finally taken on the topic of applying a calculator to the one driver of all marginal risk demand, it will register a little better. 

In a Bloomberg story titled, appropriately enough "Treasury Scarcity to Grow as Fed Buys 90% of New Bonds" we read that "the Fed, in its efforts to boost growth, will add about $45 billion of Treasuries a month to the $40 billion in mortgage debt it’s purchasing, effectively absorbing about 90 percent of net new dollar-denominated fixed-income assets, according to JPMorgan Chase & Co." Actually that's incorrect and it is more like 100%. What is however 100% correct is what the bolded means in plain language: it is now accepted that the Fed will outright monetize all gross US issuance. Let us repeat this sentence for those who just had flashbacks to Adam Fergusson's "When money dies." The Fed is now monetizing practically all net new debt.  

Other central banks of the world have stated their intentions to print money on a massive scale. According Zero Hedge the incoming head of the Bank of England is signaling that he wants to print a lot more money:

Sure enough it was only a matter of time before Carney showed his true colors, and we were not at all surprised to read last night that the central banker, largely misperceived modestly hawkish, has done not only a full U-turn but is already suggesting the BOE not only resume QE but hit the pedal to the medal to an extent not even seen at the Fed, by pushing for NGDP targeting. Which is nothing but a fancy term for infinite monetary easing.

The most-likely-next prime minister of Japan, Abe, has said that he wants the Bank of Japan to implement unlimited monetary easing:

Abe, who heads the largest opposition party, also said he would appoint as the central bank's next governor someone who agrees with his proposed annual inflation target of 2 to 3 percent. BOJ Gov. Masaaki Shirakawa's term of office is set to expire next April.

"We would carry out necessary public investment and have the BOJ purchase construction bonds to forcibly put money in the market," [...] We would take fiscal policy steps as well as monetary policy measures to overcome deflation at an early time." [...]

Forcing the BOJ to buy government bonds has been long considered taboo because the move caused hyperinflation and devastated Japan's economy immediately after the end of World War II.[...]

Prime Minister Yoshihiko Noda has criticized Abe for threatening to undermine the BOJ's independence, telling a news conference after Friday's Lower House dissolution, "If a government sets specific monetary policy measures and goals . . . there could be problems in terms of the central bank's independence."

Last week, Abe said the BOJ should fall in line with an annual inflation goal of 2 to 3 percent that the LDP would set if it wins the Dec. 16 election and forms the next government. The bank's current target rate is 1 percent.

The BOJ should provide unlimited liquidity to achieve a 2 to 3 percent inflation target if the LDP is returned to office next month, and its governor should be held accountable if the bank misses the goal and he is unable to adequately explain the failure, according to Abe.

An LDP government would urge the BOJ to implement "unlimited monetary easing, he said Thursday, stressing the bank's recent expansion of its asset purchase program is not sufficient to boost the economy and end deflation. [bolded is my doing]

According to Kyle Bass Abe is going to detonate a bomb on the economy:

Japan is about to "detonate" a "debt bomb" and will be forced to massively devalue its currency, Kyle Bass says.

During an interview with University of Virginia business school professor: Ken Eades, Kyle Bass argues that Japan is already in a crisis, and that the possible election of Shinzo Abe next month will set off a chain of events that will result in a devaluation of the Yen and treasury yields skyrocketing. "In the next 12 to 18 months, I think you're going to see a move in their rates. Basically Japan is entering its final 'checkmate' phase of the chess game."

 As mentioned in a previous post on QE-3, the European Central Bank which was given the go-ahead by the German High Court to print unlimited amounts of money.

The central banks of the world are coordinating a massive money printing program on a global scale that will almost certainty lead to massive inflation and wealth destruction. A research report that is based on a cyclical view of economic events by Seymour Pierce, a London based investment bank, makes the case that the global economy is headed for a currency crisis and a wave of massive inflation:

Excessive monetary stimulus and low interest rates create financial bubbles. Central banks are creating the ultimate bubble in money itself, as they fight the downward leg in this Long Wave cycle. This is the biggest debt bubble in history. Each time deflationary forces re-assert themselves, offsetting inflationary forces (monetary stimulus in some form) have to be correspondingly more aggressive to keep systemic failure at bay. The avoidance of a typical deflationary resolution of this Long Wave is incubating a coming wave of inflation. This will not be the conventional “demand pull” inflation understood by most economists. The end game is an inflationary/currency crisis, dislocation across credit and derivative markets, and the transition to a new monetary system , with a new reserve currency replacing the dollar. [...]

Unlike earlier cycles, we are in a world of UNLIMITED CREDIT CREATION. Central banks will not permit a debt deflation under any circumstances, which would likely bring on systemic failure at this point in any case. Keeping the bubble inflated is still taking trillion dollar deficits, but has recently been supplemented by open-ended money printing (QE), not just in the US, But by other central banks in the developed world. Apart from brief pauses, this process will continue.

This is creating the ultimate financial bubble, in MONEY itself, as every time deflationary forces re-assert themselves, the offsetting inflationary forces (monetary stimulus) have to be more aggressive. This is not sustainable and is incubating a coming wave of inflation, which will eventually explode in currency crises.

The report is about 75 pages long, but it is worth skimming through. It makes the interesting point that the U.S dollar is in the process of loosing its status as the world's reserve currency. It points out what this new reserve currency will be:

When inflation leads to more serious currency crises, we will see a “reset” and the transition to a new monetary system. High level “insiders”, such as the heads of the People’s Bank of China and the World Bank have signaled likely elements of the new system. The dollar will be replaced as the reserve currency with a currency basket based on an expanded version of the IMF’s Special Drawing Right (SDR). The SDR is a reserve asset held by central banks which currently consists of the US dollar, Euro,Yen and Pound. In the new system, it is likely to be expanded to include the Yuan and possibly other BRICS currencies, and have some indirect backing by gold (at a much higher price).

This would be bad for America. I have read that the U.S dollar status as the world's reserve currency is one of the reason that the government has been able to service its debt at historically low cost. If the dollar looses its place this could increase the cost of servicing the debt to an unsustainable level. Even if the dollar maintains its status, if interest rates go back to their historic levels the cost of servicing the debt will increase dramatically. This fact will greatly reduce the Fed's ability to tighten monetary policy by raising interest rates when the time comes.

In conclusion, with the announcements of new rounds QE being announced closer and closer together, the fact that QE-3 and QE-4 are open-ended, and the lessening stimulative effect each new round is having coupled with the announcements by the central banks of the world of their intentions to print massive amounts of money, it seems as if the end of the tracks for the global economy is not that far  ahead. Economic events are accelerating at a very rapid pace. Whenever individual nations has enacted and carried out economic policies, monetizing debt, that are currently being or soon to be carried out by the central banks of the world, economic depression and massive inflation have followed. I can't predict the future, but from everything I have read it seems as if something big in the global economy is going to happen fairly soon.

A Conservative Farewell Speech

No, I'm not giving a farewell speech.  The fight goes on, even if it's conducted from the marshy wasteland on the fringe of the kingdom.

Here is the farewell speech of the greatest conservative politician of my lifetime.  The speech was given in 1991, at the end of her 12 years as PM of the United Kingdom and one year before the formation of the European Union.

She used her two terms as PM to turn the UK from a socialist basket case (in 1979, the UK's standard of living was on par with East Germany's), to an economic powerhouse, by standing up to the unions and capably advocating the Free Market system.  Though the UK has diverged somewhat leftward since her time, it is still in far better shape than she found it and the British overall are still maintaining their independence from the EU. 

In this speech she shows clearly and simply what liberals want, and in so doing shows the ridiculousness of their desire.  She also delivers a parting warning about the danger of the EU that is remarkably prescient.

We need a Thatcher badly now, as Americans have shown that they prefer the results liberalism provides rather than conservatism.


2012 Election Analysis

Well, I'm too cheap to buy Photoshop and Microsoft Paint sucks, so I'm just not going to post the goofy photo I was trying to make.  But, it woulda been so awesome!

Anyway, Obama wins with 51% (~62 million) of the popular vote to Romney's 48% (~59 million), and that managed to translate into 332 to 206 Electoral Votes.  So many different things to consider and discuss that I don't know how to arrange things, so the post may be a little jumbled.

First some interesting data: the overall popular vote was down from 2008, even though there are more registered voters now.  Obama got 10 million fewer votes than he did in 2008, Romney got 3 million fewer votes than the pathetic 2008 Republican nominee McCain did.  McCain's vote total would have beaten Obama this year.  More data:

Ethnicity/Gender Ratio:
White Men -  Romney 64%  Obama 35%
White Women - Romney 57%  Obama 42%
Hispanic Men - Obama 65%  Romney 34%
Hispanic Women - Obama 76%  Romney 23%
Black Men - Obama 87%  Romney 12%
Black Women - Obama 96%  Romney 3%
Asian Total - Obama 73%  Romney 26%

Generational Ratios:

Marital Ratio:
Married Men - no data
Married Women - Romney 53%  Obama 46%
Unmarried Men - Obama 56%  Romney  43%
Unmarried Women - Obama 67%  Romney 32%

Dem-Rep-Ind Split:

Democrat Ratio: 92% Obama   7% Romney

Republican Ratio:

Independent Ratio: 50% Romney    45% Obama

If anyone knows of a good website that can fill in the missing information above, let me know and I'll update the article.  I thought I would be able to find the age breakdowns, but haven't. 

I figured Romney would win a relatively close election.  I figured the partisan split would be something like halfway between the electorate of 2008 and that of 2010.  Obamamania could not still exist.  The partisan split of 2008 was DEM +7, that of 2010 was I think REP +1, but it might have been DEM +1.  Regardless, I expected DEM +3.  With Independents breaking for Romney, I figured this would give Romney the popular vote closely, though the Electoral Vote was going to be tough.  I figured enough swing states would fall Romney's way to give him the victory. 

In the campaign, Obama campaigned towards his base and Romney, after the Primaries, campaigned towards the middle.  This indicated to me that Romney had the advantage, that Obama was desperate to have to campaign hard for the base.  However, the polls show that that campaign paid off for him.

As The Huffington Post says:

As the exit polls showed, Obama won the popular vote despite losing to Romney handily among independents. Independents preferred Romney to Obama 50 to 45 percent. This was only the second time in the last 10 elections that the winner lost the independent vote, and in the only other time it occurred the margin was much closer, as Bush lost independents to Kerry by just 2 points, 51 to 49 percent.

The reason Obama was able to overcome this deficit was that many more Democrats than Republicans turned out to vote. The Democrats held a 6-point advantage over Republicans among voters in 2012, down only a single point from 2008. Since Democrats supported their nominee by a whopping 92-7 margin, Obama was able to overcome losing independents, even by a significant margin.

Even though we saw no Obamania like we saw in 2008, the Democrats turned out in force while Republicans tended to sit on their hands, even though anyone paying attention knew how important this election was. 

Pollsters and other analysts focused on a gender gap, that Obama had a large advantage with women that Romney wasn't going to be able to overcome, however, the results don't quite bear that out.

As The Atlantic says regarding the gender gap:

In other words, if you want to place a bet on how someone will vote and you have to choose between knowing that person's gender or their race/ethnicity, you're better off learning their race or ethnicity. That marker is more telling.
 

The one critical statistic above is the race of the voter.  If I had the age statistics, that may be another critical factor, but, as with gender, it probably is not as telling as race.  The marital status probably ties more into the fact that Whites have a far higher marriage ratio than other ethnic groups (Asians probably are high too but still too small a percentage of the population to affect the marriage ratio).

I'm not going to take the time to produce the poll results, but on questions of who would best take care of the problems important to voters, Romney was leading on almost every catagory, including the (by far) most important question of the Economy.  But, rather than vote for the person they thought would take care of the problems, minorities voted strongly for the candidate who was Not White.  Though Whites voted strongly for Romney, they weren't as unified a voting bloc as the minority groups were.  Even Asians, who get screwed worse even than Whites on Affirmative Action policies  and would also suffer even worse on Obama's redistributionist policies voted overwhelmingly for the Affirmative Action president. 

A President who took a recession and made it worse and longer with his Socialist policies, who advanced policies that weakened America and its allies around the world (his Administration's feckless handling of Benghazi is a chief example), and who did everything he could to exacerbate racial tensions in America was re-elected. 

It could be argued, probably rightly, that Blacks and Latinos would consider the redistributionist policies of the president to be in their best interest, but this wouldn't hold for Asians who have a higher standard of living than Whites.

But, it is not just the extreme racial vote that did Romney in; as stated above, the vote total for Romney is down from that of McCain.  How can that be, when the energy for Romney seemed to be way higher than it was during the perfect Democrat storm of 2008?  That is the thing that I really do not understand: the Republican or White or whatever voters that sat on their hands this election.  I don't know how someone could have been motivated to vote for McCain in 2008 and not be motivated to vote for Romney in 2012. 

An evenly-matched electorate, in which Independents favored Romney, should have given the election to Romney.  Instead Conservatives stayed home.  Why?

Why did we re-elect this complete failure of a President?

Because what the majority of Americans want now is free stuff from the Government, and we have a government eager to hand it to them.  This to me seems to signal the end of a functioning Democracy.

Time to build a bunker

It's not that the government wasn't already eager to give free stuff to Americans, it's that, faced with the fiscal cliff that we are, and having a choice with Romney/Ryan that at least offered some hope of facing it realistically, Americans chose to keep getting more free stuff and screw everything else.

Uncharted Terrority

QE-3 to infinity, creating money out of thin air, was announced on the thirteenth of this month:

The Federal Reserve announced plans to unleash more stimulus Thursday, in its third attempt at a controversial program to rev up the U.S. economy.

The policy, known as quantitative easing and often abbreviated as QE3, entails buying $40 billion in mortgage-backed securities each month. The end date remains up in the air, as the Fed will re-evaluate the strength of the economy in coming months.[...]

Meanwhile, the Fed will continue its existing policy known as Operation Twist. Together the two programs will add $85 billion in long-term bonds to the Fed's balance sheet each month.

  QE-3 is "open-ended". It will continue until the unemployment rate drops to an unspecified number. (It is interesting that one of the driving forces of hyperinflation in the Weimar Republic was the desire to prevent massive unemployment.) The Federal Reserve is now buying around 74 percent of all new debt issued by the Treasury Department.

Ron Paul's stance of QE-3:

To me, it is so astounding that it does not collapse the markets. [Bernanke] said, ‘We are in very big trouble. We are going to do something unprecedented and we believe it will not hurt the dollar.’ [...] It means that we are weakening the dollar. We are trying to liquidate our debt through inflation.[...] I think the country should have panicked over what the Fed is saying that we have lost control and the only thing we have left is massively creating new money out of thin air, which has not worked before, and is not going to work this time.

According the Dallas Fed President:

The Federal Reserve's decision to jolt the economy a third time with monetary stimulus measures won't help the country much but could stoke inflationary pressures down the road, said Dallas Fed President Richard Fisher, a noted inflation hawk.[...]

Such a policy tool — known as quantitative easing but dubbed by many as merely printing money out of thin air — follows two similar rounds in the past that have flooded the economy with trillions of dollars with the hope of encouraging investing and hiring.[...]

It will come as no surprise to those who know me that I did not argue in favor of additional monetary accommodation during our meetings last week. I have repeatedly made it clear, in internal FOMC deliberations and in public speeches, that I believe that with each program we undertake to venture further in that direction, we are sailing deeper into uncharted waters,' Fisher told the Harvard Club recently, according to prepared remarks of his speech.

Despite all the models and resources at the Fed's disposal, uncertainty is a very difficult factor to plug into assumptions when forecasting the economy.

'The truth, however, is that nobody on the committee, nor on our staffs at the Board of Governors and the 12 Banks, really knows what is holding back the economy. Nobody really knows what will work to get the economy back on course,' Fisher said.

'And nobody—in fact, no central bank anywhere on the planet—has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank—not, at least, the Federal Reserve—has ever been on this cruise before.'

The Federal Reserve adheres to a dual mandate to keep prices stable and unemployment rates optimal.

The Fed sets monetary policy by targeting inflation rates to 2 percent, but many market experts say the latest stimulus policy reflects the Fed's desire to prioritize the unemployment portion of its mandate way above keeping inflation rates in check.

In other words, the Fed is so willing to keep its foot on the gas pedal and risk seeing inflation rates rise above target levels in order to see unemployment rates fall that the country is steaming ahead deeper into unfamiliar waters.

'Not only will they tolerate higher inflation, not only will they wish for higher inflation, but they actually may target higher inflation,' Mohamed El-Erian, CEO of Pimco, manager of the world’s largest bond fund, told CNBC.

Central banks elsewhere have rolled out similar measures, flooding the world with inflation-fueling liquidity.

'This is true for all central banks — the (European Central Bank), the Fed, the Bank of Japan, the Bank of England. We are so deep into unfamiliar territory, so deep into experimental mode, that we don’t know what the consequences will be,' El-Erian said.

'Whoever comes afterward will have to clean up the mess.'

On the point that  "central banks elsewhere have rolled out similar measures, flooding the world with inflation-fueling liquidity.",  Germany's Constitutional Court opened up the flood gates in Europe that will unleash unlimited money printing:

Germany's Constitutional Court gave a green light on Wednesday [September 12th] for the country to ratify Europe's new bailout fund, boosting hopes that the single currency bloc is finally putting in place the tools to resolve its three-year old debt crisis.

But the strings it attached to its endorsement of the ESM and a separate European pact on budget rules were less onerous than many had feared.

European Central Bank (ECB) President Mario Draghi announced plans last week to buy 'unlimited' amounts of government bonds issued by stricken euro states like Spain and Italy in order to reduce their borrowing costs.

That plan fuelled optimism in the markets, but it was contingent on the ESM coming into force. Following Wednesday's ruling, German Finance Minister Wolfgang Schaeuble said he expected the rescue fund to be operational within weeks.

 Also Japan has decided to act by printing more money, something they have been doing for a very long time, in response to QE-3:

The Bank of Japan announced Wednesday that it would expand its asset purchase program by 10 trillion yen in an effort to stimulate its economy as global demand slows.
The announcement comes less than a week after the U.S. Federal Reserve announced its latest stimulus plan, and two weeks after the European Central Bank revealed its new bond-buying program.

Apparently this is not enough, "The Bank of Japan is ready to expand monetary stimulus again even after this month's action and may ponder new steps if necessary, board member Takehiro Sato said, warning of global uncertainties that could push the economy into recession".

Printing money devalues the currency of the nation that engages in such actions, and that in turn gives it an unfair economic advantage against other nations. This forces other nations to intervene and devalue their currency. It is a global race to the bottom.

What does all of this mean? This is very spooky stuff. The global economy is based on debt. Nations have been spending money that does not exist, and paying for this with creating money out of thin air for some time now. It is very much like a con artist that gets a loan and pays for that loan with another loan and so on. The game is rapidly approaching the end. The very next step for the Federal Reserve and just about every other central bank in the world is 100%, straight-up, Weimar Republic, Zimbabwe type money printing. This means that massive world-wide inflation, or some economic disturbance, is possibly not that far off. As the Dallas Fed President said central banks "are sailing deeper in uncharted waters". Now is the time to educate yourself and to prepare to avoid finding yourself in the situation found below. 

As noted in the book When Money Dies:

In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano. A prostitute in the family was better than an infant corpse; theft was preferable to starvation; warmth was finder than honor, clothing more essential than democracy, food more needed than freedom.

Paul Ryan The Fiscal Warrior

Looks like Mitt Romney has chosen a conservative that is going to fight to massively reduce the size of government and tackle entitlement reform. The election is now about the big issue of reducing the size of government. This is big news. The coming economic crisis has been avoided thanks to a bold move by Mitt Romney to pick a radical small government politician that is going to make things happen.

Of course there is always more than the shiny facade pimped by party loyalists and for those that have bothered to investigate Ryan's record the picture becomes a bit murkier.
For starters there is the very pressing and disturbing votes of the Bush legacy. Specifically Ryan's support of: TARP, Medicare Part D and No Child Left Behind (NCLB). All three are wonderful examples of how the Republican party only fights for fiscal sanity when they are a minority party, the second they become the majority they expand Government programs at an alarming rate. NCLB is a monstrosity that gave the Department of Education teeth, Medicare Part D tacked on hundreds of billions (half a trillion as of today per year) to the debt and was passed in the House in a manner very reminiscent to ObamaCare and TARP is an egregious disregard of the free market system and should make any citizen sick to their stomach.[...]

In order to understand that Ryan's budget is nothing more than smoke and mirrors we turn to a detailed analysis of the budget. This interactive analysis lets you compare and contrast the Ryan and Obama budgets side by side and examine the projects for spending. [...]

First we got Medicaid. Clearly the difference is notable and appreciable. In fact based on this image alone it would almost invalidate all my criticism of the Ryan budget. [...]

Next we have Medicare. What's this? Apparently Grandma is not going off a cliff, instead it would appear that she is being pushed up a hill! Ryan's plan spends MORE on Medicare than Obama.[...]

Next up is Social Security. No, it is not a graphical glitch. Ryan's plan does absolutely nothing for Social Security. Yet conservative websites and pundits swoon over Ryan like he is the next coming of Barry Goldwater, more on that later.[...]

Lastly, the national debt. This is probably not surprising, but after all the hoopla and all the bravado the end result is that the speed at which our fiscal apocalypse arrives is merely slowed down by a teeny weeny bit. [...]
The answer is quite simple. Romney and Ryan represent exactly the same problem even if one appears to be a moderate and the other appears to be an epic fiscal warrior. The Republican party fights for and pushes through the status-quo. The images you see up above and the Ryan record is the status-quo. No doubt about it.
Yet Romney is counting on the ignorance of Republican base to run with the facade of Ryan's conservatism. If that illusion holds then Ryan's image will invariably boost Romney's own image as many will view Romney's decision as courageous and bold despite Obama's willingness to distort Ryan's budget. In other words, you are witnessing a most fantastic and glamorous circus. A bad Hollywood movie, except that ending will be quite real and not something you can pause or turn off.[...]

However we all know what happens when politicians threaten the sacred cows of entitlement spending. They get destroyed. Barry Goldwater was America's last libertarian-Republican candidate and he was obliterated because he dared to speak up against Social Security. Barry's loss paved the way for the great society and the invention of Medicare and Medicaid. How ironic. Poll after poll shows that Americans refuse to accept changes to entitlement programs, despite their clamoring for someone to fix our debt.

 They had me fooled for a little bit in thinking Paul Ryan was a small government conservative that is going to reduce the debt and reign in big government.