Financial Times: "Time to tackle the real evil: too much debt"

A good look by Nassim Nicholas Taleb and Mark Spitznagel for Financial Times at getting our economy back on track by addressing the problem of too much debt.

The core of the problem, the unavoidable truth, is that our economic system is laden with debt, about triple the amount relative to gross domestic product that
we had in the 1980s. This does not sit well with globalisation. Our view is that government policies worldwide are causing more instability rather than curing the trouble in the system. The only solution is the immediate, forcible and systematic conversion of debt to equity. There is no other option.

And while some in Congress have simply tried to "fix" things with various government "stimulus" packages, the authors argue that this is simply making the problem worse.

Invoking the pre-internet Great Depression as guidance for current events is rresponsible: errors in fiscal policy will be magnified by this kind of thinking.

...

The only solution is to transform debt into equity across all sectors, in an organised and systematic way. Instead of sending hate mail to near-insolvent homeowners, banks should reach out to borrowers and offer lower interest payments in exchange for equity. Instead of debt becoming “binary” – in default or not – it could take smoothly-varying prices and banks would not need to wait for foreclosures to take action. Banks would turn from “hopers”, hiding risks from themselves, into agents more engaged in economic activity. Hidden risks become visible; hopers become doers.

It is sad to see that those who failed to spot the problem (or helped to cause it) are now in charge of the remedy. Just as the impending crisis was obvious to those of us who specialise in complexity and extreme deviations, the solution is plain to see. We need an aggressive, systematic debt-for-equity conversion. We cannot afford to wait a day.

For the full article, visit the Financial Times online.

Congressman Cantor: "Health Care Shakeup Will Make Things Worse"

Virginia Congressman Eric Cantor had a guest commentary run in this weekend's Richmond Times Dispatch, titled "Health Care Shakeup Will Make Things Worse," and it is definitely worth a read.

Mr. Cantor makes many good points about the different health care reform plans that have been proposed. And he concludes:

Health care reform is too complex and important to the American people to be rushed through Congress. We must be thoughtful, deliberate, and act in a bipartisan fashion so that we get this right once and for all. But turning to government instead of empowering doctors and patients is not the way to accomplish our goals.

And he is absolutely right. Health care reform is important but it is also very complex, and rushing through a plan that hasn't been well-thought out and one where the consequences have not been fully examined is dangerous and not good policy. And Americans deserve better.

Read the full article from the Times Dispatch here.

In more positive news....

Perhaps the federal government needs to take a look at how we do things here in Virginia to learn how to increase transparency for a lower cost... (okay, that's not the only lesson they could learn from Virginia- the #1 best managed state, but that's another post entirely...)

The Heartland Institute reports...

Virginia taxpayers scored a big win in the 2009 General Assembly session ... [with] a bill putting more of the state’s budget and expenditures online in a user-friendly format easily accessible to the general public.

Now that's great news in and of itself. Making it even better? The pricetag.

Early in the legislative session the bill faced serious opposition from all parties when the Department of Planning and Budget hung a $3 million price tag on it. However, Cuccinelli worked closely with Virginia’s auditor of public accounts, Walter Kucharski, to eliminate any financial impact or additional burden on taxpayers.

Government spending transparency? No added costs to taxpayers? Priceless.

And this is health care "reform"???

They "say" that they are trying to "reform" health care and insure more Americans. So why are their billions of dollars being spent on pork projects?

Sweeping healthcare legislation working its way through Congress is more than an effort to provide insurance to millions of Americans without coverage. Tucked within is a provision that could provide billions of dollars for walking paths, streetlights, jungle gyms, and even farmers’ markets.

And while we are fully in support of encouraging individuals to take more responsibility for their own health through healthy lifestyle choices, we think that there are other ways to do this- rather than the federal government spending BILLIONS on new playgrounds and streetlights, as Senator Mike Enzi has been trying to tell Congress.

Enzi has said that instead of paying for pathways, it would be more effective to encourage lower insurance premiums for individuals who can prove they have taken steps to improve their health. He said that construction grants belong in other bills.

Exactly.

But then again, what did we expect when government gets involved? They aren't exactly known for their efficiency and cost-effectiveness.

Government Efficiency

"$18M Being Spent to Redesign Recovery.gov Web Site"

Seriously!? $18 million to redesign a website? While we are all for transparency, $18 million seems a bit pricey for a new website. We must be in the wrong line of work...

That's government efficiency for you, folks!

FREE Money... scary

Watch this: A look at health care reform

"Improving Virginia’s Transportation without Raising Taxes: It Can Be Done"

Transportation. An on-going issue in Virginia.

In the latest Bacon's Rebellion, John Palatiello takes a look and makes suggestions for addressing Virginia's transportation needs without raising taxes.

We think that is something that's worth a look!

During the last decade, state government spending in Virginia has grown by about 70 percent, while incomes have increased by only five percent. The rate of growth in the Commonwealth’s government exceeds the growth in population and the
cost of living over the same period.

Why then, does Virginia still have a transportation problem?

The answer is clear. Transportation is not a high priority for many of Virginia’s political leaders. This will certainly be an issue in this year’s elections.

In its editorial endorsing State Senator Creigh Deeds for the Democrat Party’s nomination for Governor, the Washington Post said “Mr. Deeds has made clear that he would make transportation his first priority.” Curiously, however, a look at the candidate’s campaign website fails to reveal a plan, position or even make mention of transportation. The Post editorial cites Deeds’ past support for a gas tax increase and the unconstitutional Kaine transportation plan, and Deeds himself touts his role in passing the Mark Warner tax increase in 2004 (none of which went to transportation).

This begs the question: can Virginia tackle its transportation needs without raising taxes?

The answer is a resounding yes. Here are three ways.

Continue reading online.

News Virginian: "VDOT needs outside look"

It this doesn't paint a picture of government waste, I don't know what does. The Waynesboro News Virginian makes the case for an external audit of VDOT- not as a cure-all - but as an important additional tool to helping control costs and increase efficiency.

Government wastes like a fat man breathes, heavier and more frequently with each step. Few agencies are fatter than state departments of transportation, whose waste may be anything but voluntary. Feeding perpetually on taxpayer money, state DOTs are a traditional repository of raw gluttony, with parasitic legions swarming to nibble and sometimes chomp at bounties of billions of dollars. A query that percolates in the commonwealth: Is VDOT different?