New York State of Mind

Lately, I've been hearing this song behind various news reports online and on TV. I really liked it so I looked it up online. It's from a song called Empire State of Mind by Jay Z and Alicia Keys. It's almost like 2 separate songs, one a rap part from Jay Z (which I hadn't been hearing) and the amazing chorus from Alicia Keys. It's the chorus I just love. Here are the lyrics from that part:

New York, concrete jungle where dreams are made of
There's nothin' you can't do
Now you're in New York
These streets will make you feel brand new
Big lights will inspire you
Let's hear it for New York, New York,
New York

The hook is wonderful and the way it's recorded, well, I just love it. If I were 20 years old again, this chorus would inspire me to move to New York and make my life there. I'm way past 20, but it's nice to dream anyway.

Barbara

Social Security - Big changes

The next big government program I want to talk about is Social Security. Notice the capital 'S'. This indicates an 'important' program. It takes in and gives out a huge amount of money yearly. It has grown out of control and needs to be scaled back. And no, I will not promote throwing widows and orphans out on the street.

First, the Social Security (SS) tax rate needs to be increased. Not sure how much, perhaps about .5% every two years for the next 15 years. We simply need more money in SS to cover those who are receiving benefits.

Next, the never mentioned means test. Here is my proposal: right now, based on your total income some of your SS benefits can be taxed, up to 85% of them. This needs to continue, with a higher breakpoint, say $100K in total income, you pay taxes on 100% of your SS income. Then we need to extend this. You would continue to pay tax on 100% of SS income, but that income would be reduced by percentages as your total income increases. At a point of say... $250000, your SS would be ended. If your income were to be cut for whatever reason, you could reapply to start receiving some or all of your benefits again.

I would also raise the earnings limit for payroll taxes back to its 20-year average level. And all government workers, federal, state and local would be required to pay into SS.

These changes would result in enough money to pay benefits to those who really need them. Those who don't, will make do without them.

Oh and one more change. The SS Trust fund will be left alone, completely. No current or future federal government will be able to use its surpluses, on paper or in reality, to offset deficit spending or to make their budgets look better. 

Barbara

(Some of the information in this post was gathered from this link.)

Required changes in the military

I've been reading a lot lately and I want to put out some of my thoughts, and then a final essay on all I wrote about.

The United States needs to drastically cut back its forces. Pull all our troops out of South Korea, for instance. South Korea is a wealthy, highly advanced technological country. They have better broadband access, they have cell phones that make ours look like toys and they have money. We would be willing to sell them arms if they want, and if they can pay. They can certainly afford to defend themselves, even if they can't spend all their time surfing the Web and playing Go anymore.

Troops we have in Europe should be pulled out. I can see the point of keeping the military hospital in Germany open and certain airfields, but that's all. We don't need to have ground troops in those countries. The risk of war there is pretty much nil, and again, they can afford to guard their own countries. There is no longer a need for us to do so.

The war in Afghanistan.. use various forms of intel and focused use of Special Forces units to keep track of Al Qaeda and leave. It's not up to us to make them a democracy, if that is even possible, which I personally don't believe it is.

We are pulling out of Iraq and within a few years, we should be gone completely. Once that is done, cut back on the military, reduce spending, focus on R&D, having a smaller, more effective force. The military should only be used for direct threats to our soil, as it was envisioned to be. We cannot afford to police the world, nor is it our job or our destiny to do so.

Let the National Guard be again, a 2 weeks a year, one weekend a month force, which helps out it's state in times of disaster. That is what it should be used for.

This is the first step. This will help stop the outrageous spending on defense, cut back on big systems we don't need and focus on making our soldiers even more effective and deadly, but with the fervent hope that they will never be needed.

Barbara

The New Mises Academy

This blog is about learning and right now, in particular, learning Austrian Economics. The wonderful mises.org has just announced a Mises Academy. There is an article about the context of this announcement. They are already offering a class that sounds very interesting. It is about understanding the business cycle. This Academy is definitely something to keep your eye on!

Mental exercise is important too

Everyone knows that they should eat right and exercise. Whether we do it or not, we know that we should. Something people don't think about as much is mental exercise. Especially as you get older, you need to 'use it or lose it'. If you do the same things every day, your brain, like your muscles, can get lazy. I use a website called lumosity.com to do brain exercises and I have noticed a definite difference. The need for mental exercise is also why I continue to try to learn new things. I've studied Latin, and learned to knit. Now I am studying Austrian economics and keeping my brain agile while learning. What are you doing to keep your brain fit?

Third lecture home study course

The third lecture in the Mises University home study course is called 'Mises in one Lesson - history of Economic Thought' given by Murray Rothbard. Total time is 56:38.

He starts out with a very brief history of the Austrian school, mainly that while the founders of the Austrian school of economics were, very naturally, Austrian, there are not so many now. Most 'Austrian' economists are now of course, from many other countries.

He then talks about Human action. Austrian school is based on individuals doing things, most other schools of thought focus on groups or aggregates.

When Carl Menger was working, the predominant school then was the classical school, Smith, Ricardo, etc. He gives examples of their thinking.

Rothbard then gives an analysis of the main points of Austrian economic thought. (This is not complete, just the points I wanted to remember.)

1. Purpose of production is consumption
2. Start with consumer demand and work backwards to factors of production
3. Make value judgements in marginal units
4. Not quantative, but value is subjective
5. Time preference - we want things now, not later
6. Earlier phase of production = higher order of goods
7. Entrepreneurs are very important

He then talks about Mises Theory of Money and Credit (Note: I have not read this book yet). Again, Rothbard covers the main points of this book.

1. It integrated micro and macro economics
2. applied marginal theory to money and credit
3. only real use of money is exchange
4. fractional reserve banking is basically fraudulent
5. increases in money and credit causes price increases and messes up the capital structure
6. increases in money supply increases interest rates
7. results of recession (a natural process) washes out imbalance between capital and consumer goods
8. necessary liquidation process, if government interferes, this prolongs the recession

These last points are obviously applicable to our current financial situation.

This was another excellent lecture, with a lot of information.

Thinking about the world

Since I have been spending so much time reading about Austrian economics (and libertarianism as well), I find my way of looking at and thinking about the American political and economic system is changing.

I am much more for pulling American troops out of foreign countries, all of them. For getting rid of useless (okay they are all mostly useless but still..) government and quasi-governmental agencies, like the Christopher Columbus Foundation, set up to celebrate his 500th anniversary of discovering the New World. Of course, that was 18 years ago and we are still funding it??!?!? That is just ridiculous and I am sure there are many more examples like that. I think drugs should be legalized or if most people aren't ready for that step, then decriminalized at least. This 'war' on drugs is a waste of time and money.

I really enjoy knowing that my thinking can be expanded still. Keep on learning!

More things to read

I've found another great resource for online books on liberty and more reading lists. It's The Online Library of Liberty. It has a Great Books reading list, different than most, along with biographies of those mentioned.

I have also found a lot free online books, to read online or in pdf format. Some of those I'm adding to my reading list:

Bruce Frohnen, The American Republic: Primary Sources
Ludwig von Mises, The Ultimate Foundation of Economic Science: An Essay on Method [1962]
Ludwig von Mises, Liberalism: The Classical Tradition

Some links for you to look into, to continue your learning.

Second Lecture of Home Study Course

I've listened to the second lecture of the home study course. It's called Marginalist Revolution by Joseph Salerno. He starts out with the information that the law of marginal utility was discovered at almost the same time by three men: Carl Menger, an Austrian, an Englishman, William Stanly Jevons and a Swiss, Leon Walras.

Carl Menger is considered by Salerno to be the sole founder of the Austrian School. He then talks about the classical school of economics and it's differences with the Austrians. He spends a large amount of time discussing marginal utility, using the common cow/horse scenarios.

All in all, an interesting lecture. It was obvious he was writing on a board to the audience, which of course you cannot see. I'm looking forward to listening to the next one.

Mises University 2009

Yet more resources from the amazing mises.org. Last year at Auburn University, a week long gathering called Mises University 2009 occurred. Here is an article about it written by a participant, and all of the talks mentioned and more are freely available at this link.

I am constantly amazed at the quantity and quality of information available online for free. Even the website is open source and free. For information on all that mises.org does to promote the cause of freedom, check out this article "Mises.org joins the fight for liberty".

The Concise Guide to Economics

I've recently finished reading The Concise Guide to Economics. It's a good primer on economic principles. There are a lot of chapters, but don't let that scare you off. Each chapter is very short, but to the point.

This is a good starting point, because if you want to know more about any of the topics covered, there is a bibliography at the end of each chapter and most of the citations are linked online. So it lets you continue learning and exploring on these topics.

Overall, a good basic collection of Austrian economics principles.

Getting the Basics

After spending a couple of weeks so far studying Austrian economics, I am starting to get the basics. What I really like about this is that it is intellectually sound and complete. It all hangs together and makes sense in all the different parts of economics. Money, credit, prices, I am enjoying how it all comes together.

First lecture of Home Study course

I've listened to the first lecture in the Mises Home Study course. It's by Jorg Guido Hulsmann and it is titled "Mises and the Foundation of Austrian Economics". It is 42:29 in length. It's a general overview of Mises' life. It goes over his major works and brings up overviews of his major theoretical contributions. It is a good introduction to Mises' work.

I have been continuing my reading. I'm almost finished with Hazlitt's Economics in One Lesson, and I have finished The Concise Guide to Economics, both of which I will review shortly.