Putin’s Ultimatum Is The Next Stage Of The War

Authored by Tom Luongo,

Russian President Vladimir Putin’s State of the Union address may be the most important speech since his address to the U.N. in September 2015 on the eve of Russia’s intervening in the War on Syria.

Putin’s sober analysis and admission of demographic constraints on the Russian economy’s growth was welcome.  It highlights the real challenges for Russia over the next fifteen years.  The shift for those of us analyzing the Russian economy is to look at it purely in terms of per capita growth, not absolute growth.

But, that admission of Putin’s highlights the backdrop of his publicly outing Russia’s new and formidable weapons technology.

That he did this during the height of his re-election campaign should bring a smile to the cynic’s face. Well played, sir.

Now, about those new weapons.  I defer to Alex Mercouris at The Duran for the only in-depth look at these new weapons.  The Saker, who is absolutely one of the best analysts of Russia’s military capabilities, considers these new weapons, “Game, set, match for The Empire.”

No More Parallel Aggression

Putin has played the game very well over the past few years.  Employing the strategy of ‘parallel aggression’ when responding to a U.S. escalation, he’s kept a lid on hostilities in Syria and Ukraine, while grinding out small victories, playing for time.

The announcement of these new weapons, however, change that game plan.  Putin is now going on the attack.

Here are some early thoughts on this implies:

  1. Announcing these weapons begs the question, “What is Putin not telling us about?”  That should scare many in the Pentagon and civilians who believe the U.S.’s response should be to escalate.

  2. Arming Ukraine with more heavy weapons to take back the Donbass will be countered because there is no reason not to.

  3. Now we know (versus suspect) why the U.S. Deep State has been so adamant about pushing an anti-Russian narrative now.  The window has closed on any potential regime change in Russia.

  4. U.S. forward deployments in Afghanistan and Syria and backing proxy armies such as ISIS and the Kurds is part of a subversion strategy to soften the underbelly of Russia forcing them to fight expensive, conventional warfare while extending U.S. logistical supply lines, its core competency in warfare.

These new weapons represent a state change in weapons technology but, at the same time, are cheap deterrents to further escalation.  They fit within Russia’s budget, again limited by demographic and, as I pointed out in a recent article, domestic realities.

The Narrative Quagmire

And it’s why point #4 above is the most important.  We’re not winning in technology.  So, all we can do it employ meat-grinder policies and force Russia and her allies to spend money countering the money we spend.

It’s a game that hollows everyone out.  And it’s easier for Putin to sell the defensive nature of his position to Russians than it is to sell our backing Al-Qaeda and ISIS to defeat them.  Because that reality has broken through the barrier to it.

Trump’s fighting the RussiaGate narrative domestically dovetails with exposing our duplicity in Syria.  The important point of the Urainium One scandal is not that Hillary Clinton the gutting of our uranium reserves.  No, the important point is that the the very people screaming out Russia today were cutting deals with them yesterday.

Even the dumbest American sees the hypocrisy in that.

Putin coming forward now with this announcement puts a halt to the political games being played in the media and at the U.N. to hang onto a failing narrative of Russian and Syrian malfeasance in the war.

You can only scream about the chemical weapons wolf so many times before no one believes it any more.

Don’t Get M.A.D.

The U.S. knew about all of these systems.  If we didn’t then what are we truly spending all this money on spycraft for.  We also know first-hand how good Russian electronic warfare (EW) is, c.f. the airstrike on Al-Shairat last April where less than 40% of those Tomahawks hit their intended targets.

The Saker has made the point many times that Russia’s armed forces, up to this point, are designed around rapid response within 1000 kilometers of Russia’s borders.  It is not designed around global force projection.

These new weapons fundamentally change that stance.  And much of the current geopolitical knife-fighting will come to a rapid close because of it.

Russian diplomacy has stymied U.S. attempts to game the geopolitical landscape for the past four and a half years (since Putin beat Obama over the false flag chemical weapons attack in 2013).  Now he’s given everyone another thing to consider, Russia’s Big Stick.

And I invoke Teddy Roosevelt here on purpose.  Putin’s foreign policy has morphed into that.  This is his ‘walk softly and carry a big stick’ moment.  He’s been building to this point for fourteen years, since Bush the Lesser pulled the U.S. out of the ABM Treaty.

Now it’s here and we have no reasonable response.  The Defense Department’s statement was laughable.  All we can do it try and put inferior weapons closer to Russia’s borders to approximate M.A.D., a situation I feel we haven’t been at for quite a while now.

Putin just red-pilled the world on this subject.

The current hot-spots will begin resolving themselves over the next year.

Escalation by the U.S. in Ukraine is simply a way to empower Putin’s hardline critics on the eve of an election.  The cries of “Putin is a traitor” or “Putin is a Zionist shill” have been growing louder in the fringes of the Russian-centric commentariat.

He just ended them by changing the rules of engagement completely.  If Putin was truly that guy, a weak-handed fool secretly working for Zionists, then he would have left Russia defenseless and would not have announced on the eve of his re-election after playing ‘possum for months the hammers Russia needs to secure her future.

In the broader sense, Putin has now put all of his allies under the same nuclear umbrella.  And it should give everyone running their mouth about going to war, from Hezbollah to Israel, from Turkey to Iran pause.

Syria is now a game of attrition which Damascus and Moscow will win.

With Trump’s massive win at CPAC and the mid-term elections on the horizon, expect a major summit between Trump and Putin this year.  Trump cannot hide behind the Democrats’ lunacy in the face of what Putin just announced.

They have to talk formally about how to pull the world back from what appears to be the brink of war.

*  *  *

For more commentary like this, advice on how to structure your investments and exclusive ideas ranging from stocks to bonds to cryptocurrencies, sign up for the Gold Goats ‘n Guns Investment Newsletter at my Patreon Page for just $12/month.

“Avoiding The Mistakes Of Our Parents” – Only A Third Of Millennials Have A Credit Card

Nearly a decade has passed since Lehman Brothers collapsed, ushering in the most acute phase of the financial crisis – yet, despite all the time that has passed many millennials remain deeply distrustful of banks and borrowed money, according to a study published by Bankrate.

The study found that, while a majority of older Americans own credit cards, only 33% of adults between the ages of 18 and 29 say they have one. That is, even as the economy and job prospects have improved, millions of Americans continue to shun credit – something that is probably related to the massive pile of student loan debt, the bulk of it borne by millennials, who are defaulting in ever-greater numbers.

While that figure might seem surprisingly large, it’s actually down from two years ago, when Bankrate discovered that two-thirds of young adults said they had no “major” credit cards, defined as cards issued by either American Express, Visa, MasterCard or Discover.

One

In interviews with several “real-life” millennials, Bankrate said they hadn’t even considered getting a credit card. Others said they shunned credit cards because of previous financial problems.

“I’ve never owned nor have ever wanted to own a credit card,” says Kristian Rivera, 25, a digital marketing specialist in New York City.

“It wasn’t really a decision that I made, but growing up I was warned of the risks of having a credit card and advised to put off getting one as long as possible.”

“We don’t want to make the same mistakes our parents made in the past,” Rivera says. “We want to do things smarter and safer.”

For millions of Americans, the agglomeration of debt that most people have accumulated by early adulthood is forcing them to put off marrying or starting a family. And roughly one-third of adult millennials are still living in their parents’ basements. 

Darnell Billups, 29, a U.S. Marine Corps captain stationed in Twentynine Palms, California, says when he and his wife, Natasha, married in 2011, they had a combined $40,000 in debt, including credit cards and student loans. They paid off their debts in 2013, just 2 weeks before Billups was deployed to Afghanistan for the second time.

“Our thing is, we will never have a credit card ever again,” Billups says.

More than just credit cards, the couple wants to steer clear of all debt. They recently opened a photography business, Emmanuel Photography & Designs, without taking on any debt, and they plan to eventually buy a house using only cash.

“It’s been just wonderful because we don’t have to pay anyone back,” he says.

To be sure, young adults aren’t the only demographic group shying away from credit card use…

…While it doesn’t perfectly align, credit card use is most common among groups that are also more likely to own stocks. According to one study, one in three millennials say they would rather own bitcoin than stocks (though, to be fair, that’s probably due to bitcoin’s torrid rally late last year.

Here’s a breakdown provided by BankRate:

  • Have an annual income of less than $30,000.
  • Haven’t attended college.
  • Are black or Hispanic.

Credit card ownership is most prevalent among:

  • Baby boomers.
  • College graduates.
  • Adults with an annual income of more than $75,000.
  • Those who identify themselves as Republicans.

Unsurprisingly, people with higher incomes are more likely to own credit cards:

Two

By avoiding credit cards, millions of millennials will find it difficult to obtain other types of credit – like mortgages or car loans – when they need it.

Marc Aschoff learned this lesson when he and a group of friends tried to buy a rental property shortly after college. But since Aschoff had never had a credit card, he hadn’t developed a solid credit history and none of the mortgage brokers he spoke with would qualify him for a mortgage.

“Needless to say, this isn’t something I considered,” says Aschoff, 25, of Hoboken, New Jersey.

Aschoff and one of his business partners, Chris Sorrentino, also 25, say they now own credit cards only to help with their credit scores. And building up their credit helped them qualify for a mortgage.

The survey was conducted May 19-22, 2016, by Princeton Survey Research Associates International and included responses from 1,002 adults living in the continental United States. The margin of error is plus or minus 3.7 percentage points.

They now own 3 rental properties near Lehigh University in Bethlehem, Pennsylvania. In January, Aschoff, Sorrentino and 2 other partners in their real estate firm — Acrez LLC — purchased a house in Springfield, New Jersey, with cash. They are now renovating and hope to resell.

“The only debt we really take on is mortgage debt,” Aschoff says. “Other than that, debt is not our friend.”

Given the fact that millions of millennials can’t even be bothered to get even a low-limit card, it probably won’t come as a surprise that millennials also don’t care about so-called “status” cards like the American Express Black Card.

Three

Given millennials well-documented preference for experiences – like travel – over material possessions, their unwillingness to apply for credit cards might seem foolish. 

After all, they’re missing out on all those free miles…

Smashing The Myth Of America’s “Stingy” Welfare State

Authored by Ryan McMaken via The Mises Institute,

According to the usual news sources, Donald Trump’s new budget proposal “envisions steep cuts to America’s social safety net and will “gut social programs.” Most of the cuts were proposed to pave the way for more Pentagon spending. 

In truth, Trump’s proposal doesn’t matter, and Congress will set to work piling on more deficit spending for both social programs and for the Pentagon. 

But, the debate of “gutting” social programs will no doubt be used to perpetuate, yet again, the myth that the United States is ruled by libertarian social Darwinists who ensure that no more than a few pennies are spent via social programs for the poor. 

Now setting aside the question of whether or not social programs are the best way to address poverty, the fact is that the United States spending on social programs is on a par with Australia and Switzerland, and can hardly be described as “laissez-faire.” 

Moreover, government spending on healthcare per capita in the United States is the fourth largest in the world.

Governments in the United States pour money into social-benefits programs at rates typical to a Western welfare state. We can debate whether or not the way this is done is sub-optimal or not, but the fact remains, that if we’re going to talk about social programs, the amount of spending in the US is not low in a global context. 

According to the 2016 social expenditure database at the Organisation for Economic Co-operation and Development (OECD), public social spending as a percentage of GDP in the US was 19.4 percent:

While it is true the US is hardly the highest on this list, its social spending is higher than that of Canada, Australia, Ireland, and Iceland, all of which we are often told are far more “generous” countries in terms of their welfare states. Indeed, if the typical American leftist were asked if the US should spend as much as Canada or Australia on social benefits, the response is very likely to be an emphatic “yes.” 

And yet, the US outpaces all of these, and has spending levels comparable to that of Switzerland. Indeed, the difference between Switzerland and the US in this measure is four-tenths of one percent. The OECD average is 21.4 percent, a matter of 2.1 percentage points difference from the US. 

When we turn to the matter of healthcare, we find that the US is a world leader in terms of governmental healthcare spending. 

According to the World Health Organization, only Luxembourg, Norway, and the Netherlands spend more government money on healthcare per capita. 

In the US, the sum is $4,153 per capita, and in Norway it is $5,154. In the United Kingdom, the total is $2,716. 

This presents a problem for advocates for more government control of the healthcare system, of course. Often, their line of argument is that Americans are too “stingy” with social health benefits. When confronted with the fact that government spending is quite high, however, they switch tactics, and then declare that if the US adopted a more government-regimented system, then spending would actually be lower. This was a tactic employed by Bernie Sanders. 

This latter claim may or may not be so, but the one thing we do know is that the US already spends more taxpayer money on healthcare than most everyone else. So, it seems hard to fathom that the “problem” — whatever that may be — is a product of too little government spending on health care. 

If advocates for reform want to argue over how the money is spent, let them do so, but the debate should hardly include any proposals to increase government spending. 

In the US, government spending on healthcare as a percentage of total government spending, is one of the highest among wealthy nations. Although, by this measure the US is equal with Japan and the Netherlands. 

I am not a defender of the US government’s gargantuan military budget, but even considering that huge expense, government healthcare spending still takes up an unusually large amount of government spending in the US. 

There is no shortage of articles in publications like Slate and The Nation stating that “the American social safety net does not exist” and that the US has a “stingy social safety net.”

Now, if by “stingy” one means, “poorly administered,” “ineffective,” or “counterproductive,” then one would be on to something. But if by “stingy,” one means “underfunded,” well, there’s little evidence of that. 

Even many advocates for a reduced federal budget are likely willing to consider ideas that would spend taxpayer dollars more effectively. After all, if it’s a given that one is going to pay a large federal tax bill, one usually would rather see that money go to something like housing for a single mother and her children who are living in a car. 

But are federal dollars actually doing this well? 

Critics of American “stinginess” are themselves quick to point out that all that American spending on social benefits isn’t pushing down poverty rates as in other countries. Even if one believes that governments are generally poor at accomplishing the goals they set out to accomplish, it seems that in this regard, the US government is especially bad.

A Modest Proposal — Dismember America’s Huge Welfare State

There may be many reasons for this. But it is also worth noting that among the Western welfare states, the United States is by far the largest with 320 million people. The next largest country isn’t even half that size, and is Japan with 125 million people. And, of course, Japan’s geography, culture, are demographics are completely different from that of the US. Once we get to governments of the size and physical scope of the US government, we’re looking at something on a scale that can’t possibly be considered  “responsive” or “accountable” by any measure. It becomes nearly impossible to make changes in such an enormous apparatus which itself cannot possibly take into account the vast number of different populations and conditions that exist across a place as huge as the United States. 

One immediate solution is to decentralize the welfare state immediately, and take it out of the hands of the federal government. But that by itself isn’t a magic bullet, since we know that in California, which has its own supplemental welfare state on top of the federal one, poverty is higher than in any other state

Nevertheless, if we’re going to hear constantly about what successes the Scandinavian welfare states are, for example, we might use this as an excuse to create welfare states on a more Scandinavian scale. Given that the largest Scandinavian nation-state (Sweden) has 10.1 million people, this means breaking up the American welfare state into at least 30 totally independent smaller pieces and going from there. These programs would then be under the control of local residents — as they are in, say, Denmark — and not something controlled by distant, untouchable Washington bureaucrats and politicians. An even better size for each piece would be something on the scale of Norway, which has five million people, and is thus the size of Minnesota or Colorado. At the very least, no government larger than a US state ought to be in the business of social benefits. 

When it comes to government, bigger has never been better. 

It’s Not All Bad – These 6 Charts Show How The World Is Improving

It only takes a few minutes of cable news to get the feeling that the world is heading into a tailspin.

Endless images of homicide investigations, natural disasters, car crashes, and drug busts fill the airwaves on a daily basis. It’s upsetting – but also certainly captivating for the average viewer.

In fact, as Visual Capitalist’s Jeff Desjardins notes, the news cycle thrives on fear and violence, so mainstream networks find a way to fill up 99% of programming with these singular events. It’s addicting and sometimes anger-inducing, but is it representative of what’s really going on in the world?

GOOD NEWS HAPPENS SLOWLY

Today’s infographic comes to us from economist Max Roser of Our World in Data, and it highlights six megatrends that show that in many important ways, our world is improving drastically.

Courtesy of: Visual Capitalist

The one commonality of these six indicators? They all happen slowly and incrementally, but are more evident with a long-term perspective.

Each family lifted out of poverty, each classroom that gets built, and each village gaining access to basic vaccinations may not seem significant on a scale of billions of people – but over decades, these gains add up to create a richer, more educated, and healthier world and a very powerful statistical story.

SIX GLOBAL TRENDS

Here are the six big picture trends pointed out by Roser, using data collected over hundreds of years:

1. Extreme Poverty
The portion of people in extreme poverty – making less than $1.90 per day – has dropped like a rock over the years. Back in 1940, about 75% of the world was in extreme poverty – today, that number is just 10%.

The most potent recent example of this is China, where access to free markets have enabled 700 million people to be lifted out of poverty in just over 20 years.

It’s also worth mentioning that statistics for this category are done using inflation-adjusted international dollars, which take into account inflation over time as well as exchange rates. Non-monetary forms of income are also included in the calculations.

2. Basic Education
In 1820, only a privileged few were able to get basic schooling. Since then, millions of classrooms and schools have been added around the globe, and the numbers are staggering. In relative terms, we’ve gone from 17% of people having a basic education to 86% today.

Here’s a more detailed breakdown of this, also from Our World in Data:

3. Literacy
Following a similar trend line as basic education, literacy has risen from 12% to 85% over roughly two hundred years. In absolute terms, these numbers are even more impressive. In the 1820s, there were only about 100 million people that could read that were 15 years or older. Today, the number stands at 4.6 billion.

4. Democracy
While the world has been having some short-term setbacks when it comes to freedom and democracy, the overall trend line is still impressive over the long run.

In 1900, only 1 in 100 people worldwide lived in a democracy – and today, the majority (56 in 100) can say they live in a country with free and fair elections.

5. Vaccination
Vaccinations for diseases like whopping cough, tetanus, and diphtheria were unavailable for most of the 200 year chart. However, today around 86% of people globally are vaccinated against these basic and devastating illnesses.

6. Child Mortality
Even as far back as 1920, it used to be that over 30% of infants would die before they hit their 5th birthday.

Since then, developments in housing, sanitation, science, and medicine have made it so that death is a much rarer occurrence for the youngest people in our society. Today, on a global basis, child mortality has been reduced to 4%.

Army Major Explains Why The US Military Should Stay Out Of Iran

Authored Major Danny Sjursen via BreakingDefense.com,

Last week, after Israel reportedly shot down an Iranian drone and Prime Minister Netanyahu proudly displayed a hunk of twisted metal as a war trophy, Americans were treated to fresh calls for regime change from some prominent neoconservatives.

Granted, Iran is no friend to the U.S. and might even qualify as a modest adversary. Its nuclear ambitions should continue to be thwarted, as most reports indicate they are.

Still, what Washington desperately needs right now is some perspective and an honest conversation about the realities of the Middle East. Not alarmism. The last thing the overstretched U.S. military needs is another hot war. It’s already pretty busy. President Obama bombed seven countries in 2016, and President Trump has continued apace.

There’s reason to worry. Trump, who ran on an eminently reasonable platform of disengagement from “dumb” wars in the region, quickly pivoted to a hawkish stance on the Islamic Republic. In December, when protestors hit the streets of Tehran based on mostly economic motives, Trump immediately rallied in support and not-so-subtlety tweeted “Oppressive regimes cannot endure forever.” Except, that is, for Saudi Arabia, Egypt, and other illiberal authoritarian regimes we support.

Perhaps Trump simply meant the people of Iran would topple the ayatollahs, but if the recently released National Defense Strategy is any indicator — it lists Iran as one of four core threats —U.S.-imposed regime change is certainly on the table.

Defense Secretary Jim Mattis

It shouldn’t be. At present, Iran does notpresent a clear and present vital threat to American national security. Statements from Defense Secretary Jim Mattis, however, indicate he disagrees.

Mattis’ Blind Spot

The secretary is the boss, my boss, but his focus on the Iranian regime qualifies as his blind spot, a veritable Iran obsession.

Since at least 2011, Mattis has overstated the Iranian threat and hinted at toppling the regime in Tehran. And he’s only doubling down. This past May, Mattis told “Face the Nation,” that “what we find is, wherever there are challenges, wherever there is chaos, wherever there is violence, whether it be in Lebanon, in Syria, in Iraq, in Yemen, the attempts to unsettle Bahrain. We always find Iran and the IRGC [Islamic Revolutionary Guard Corps] at it.” He also once told then-President Obama that the top three threats in the Middle East were “Iran, Iran, Iran.” That sounds excessive.

Iran spends about as much on defense annually as the U.S. does on a single aircraft carrier. A simple comparison is instructive: Iran’s GDP was about $427 billion, and it spent some $11.5 billion on defense in 2016. U.S. allies, like Saudi Arabia (GDP: $678 billion; defense spending: $66.7 billion) and Israel (GDP: $348 billion; defense spending: $19.6 billion) can more than hold their own. And remember, standing behind them is the real behemoth, the U.S., which plans to spend $716 billion on defense in 2019—that’s $300 billion more than Iran’s entire GDP. The numbers speak for themselves. Conclusion: some perspective is in order.

While Iran definitely is engaged in the Mid-East, its own neighborhood, it’s rarely behind much of anything and doesn’t have nearly the power or influence to pull all the various regional strings. Yemeni and Bahraini unrest were homegrown. Conflict in Syria and Lebanon preceded Iranian deployments there. And Iraq, well, the U.S. handed Baghdad to Iran on a silver platter after that ill-fated invasion. Iran use regional proxies, rather than its own military, precisely because it is weak and fearful.

Furthermore, though he’s recently backed off some of his most bellicose threats, Mattis regularly draws distinctions between the supposedly disenfranchised people of Iran and an ostensibly separate revolutionary regime. There’s something to this, but in Mattis’ statements, it sounds like he’s calling for the fall of the regime. “It’s not the Iranian people,” Mattis added. “We are convinced it’s a regime that is conducting itself in order to stay in power in Tehran as a revolutionary regime, not as a proper nation-state. They are not looking out for the best interests of their own people.”

Maybe that’s true enough, but surely dozens of governments fail to represent their populace the world over. That doesn’t necessitate regime change, does it? Such rhetoric raises tensions and threatens to stoke nationalist tendencies in Iran which work to the advantage of relative hardliners.

The View from Tehran

After all, try and view the last decade of U.S. military actions from Tehran. Washington toppled and seemingly permanently occupied Iran’s neighbors on its western (Iraq) and eastern (Afghanistan) flanks, encircled the country with its military bases, and intervened in just about every country in its neighborhood.

Iranian C-14 missile boat.

I remember way back in August 2002, and even then the rhetoric was chilling: “Everyone wants to go to Baghdad. Real men want to go to Tehran,” a British official close to the President Bush team told Newsweek in the lead up to the Iraq War. Who could rationally blame Iran’s leaders for fearing they were next? And who would be surprised to see them turn to Shia militias to trap the U.S. military in a Baghdad quagmire? That’s basic survival instincts. While not excusing their tactics, it’s undeniable that their approach enhanced their standing vis-à-vis Iraq and the region—an unintended consequence of ousting Saddam Hussein.

Iranians also have a long memory. The CIA helped overthrow a democratically elected government in Tehran in 1953. Then, throughout the 1980s, the U.S. backed Saddam Hussein in Iraq’s brutal invasion of Iran. Heck, President Reagan even sent one Donald Rumsfeld (remember him?) to make nice with Saddam.

None of this sordid history obviates Iran from acting responsibly in the region—but this must serve as a reality check for Washington’s triumphalism and an unfathomable commitment to strategic overreach. Walking the proverbial mile in an adversary’s shoes isn’t “soft,” it’s smart. Only by understanding the motives of other countries can we correctly predict and counter actions that undermine America’s interests.

Military Action: A Bad Idea

Iran’s military is far from the imposing behemoth threat of hawkish imagination. In fact, Saudi Arabia is much better armed and could likely handle Iran by itself—remember, it spends more than five times much on its military than Iran.

Nonetheless, Iran is spatially large and mountainous with an enormous, fiercely nationalist population. Make no mistake, U.S. military occupation of the Islamic Republic would make the Iraq War, for once, actually look like the “cakewalk” it was billed to be.

America’s armed forces are currently spread thin in a dozen simultaneous operations and deployed in nearly 70 percent of the world’s countries. The Army alone is rotating brigades to deter Russia in Eastern Europe; manning the DMZ in South Korea; training and advising across Africa; conducting raids in Somalia, Yemen, and Niger; and actively fighting in Syria, Iraq, and Afghanistan.

So where are the troops available to topple Tehran? They don’t exist. The U.S. military is already running at full throttle, and the American people won’t be flocking to recruiters to stave off an overhyped, distant Iranian threat. The polling data is clear: Americans don’t want another war.

Ubiquitous, over-the-top proclamations aside, Iran’s various regional interventions have been more cost than benefit for Tehran and largely defensive in nature—look no further than recent protests throughout Iran for proof. Iran isn’t seeking a New Persia any more, or less, than our purported Turkish (NATO) ally’s dream of a revamped Ottoman Empire. That’s rhetoric, not reality. And these days, with Turkish tanks just miles from U.S. forces in Syria and openly threatening Washington, guess who the greater threat is?

Indeed, it might be time for Washington to swallow its pride and admit to some common interests with Iran in the region—the defeat of ISIS, suppression on Sunni Islamists, and a stable, non-threatening Afghanistan—rather than harping on the exaggerated negatives.

Look, I don’t take any of this lightly. Iranian-supplied bombs killed two of my soldiers on January 25, 2007. Still, it’s important to remember, no Iranians have attacked the homeland since 9/11 (not something that can be said of our many autocratic “allies” in the region). The proper role of the U.S. military is to prevent enemies killing Americans, not to keep rival Mid-East factions from killing each other.

Forget a new war. Iran isn’t worth it. Not now, probably not ever. The U.S. military is busy, thank you very much. And any trouble it causes can easily be countered by our partners and allies in the region.

Washington should ditch the alarmism and get real in the complex Middle East.

Trump trade tariffs: Europe threatens US bikes, bourbon and bluejeans

IMF joins China in warning of potential harm from 25% tariff imposed on metal imports but Trump insists ‘trade wars are good’

Europe has warned Donald Trump to expect retaliatory strikes against American icons like Harley-Davidson, Levi’s jeans and Kentucky bourbon, if he sparks a trade war by going ahead with punitive US tariffs on foreign steel.

The European commission president, Jean-Claude Juncker, warned there would be consequences for the US if Trump’s threat of a 25% tariff on steel and 10% on aluminium imports takes effect.

Related: Steel and aluminum tariffs trigger sharp stock market sell-off in US and Asia

Continue reading…

Was This $1,600 Uber Ride The Most Expensive Ever?

One New Jersey native took the Uber ride of his life last Friday when he accidentally requested that his driver bring him back to his home, in Gloucester County, New Jersey, from Morgantown, West Virginia, where he had been partying with friends at WVU.

Uber

The rider, Kenny Bachman, thought he had requested a ride back to his friend’s house near campus. Instead, he passed out, and when he woke up two hours later, his driver told him they were on their way to New Jersey.

“I just woke up,” Bachman told NJ Advance Media in a phone interview.

“And I’m thinking, ‘Why the f— am I in the car next to some random ass dude I don’t even know?”

The final price was a steep $1,635.93 – which is a lot of money for a college student.

And what’s worse, Bachman inadvertently chose the more-expensive option at seemingly every turn. He requested an UberXL instead of an UberX, and his ride was also subject to surge pricing, which practically doubled its cost. 

The Uber driver didn’t have money for tolls, and was fined at every tollbooth. When they did get back to New Jersey, Bachman went to a CVS in Sewell and got cash back to give him money for tolls on the way back.

Bachman gave his driver five stars, but he contested the charge, arguing that the driver accessed his phone without his permission, and that he remembers putting in his friend’s address, not his home address.

Uber confirmed that the ride did indeed occur and that the driver took the rider to the destination he requested. Uber also connected with Bachman and resolved the matter, which ended with Bachman agreeing to pay the fare.

The Faster America “Grows”, The Faster America Goes Bust

Authored by Chris Hamilton via Econimica blog,

As of October 1st of 2007 (the start of the 2008 Federal Government fiscal year), federal debt stood at $9 trillion and 70 billion.  In the subsequent ten years and nearly five months, the US federal debt has grown $11 trillion and 785 billion and now stands at $20 trillion and 855 billion (chart below).  Over the same period, US GDP grew $5 trillion and 169 billion. 

Simply put, for every $1 of new federal debt undertaken, the US achieved $0.44 cents of economic activity or “growth”.  However, as the chart below shows, the huge increase in federal debt (red line) was accompanied by a minimal increase in interest payable on all that debt (blue line).  The boxes detail the total debt incurred during each period against the annual increase in interest payments on that additional debt.  The Federal Reserve is primarily to thank for the cheapening of debt and encouragement to undertake all that debt, but many fear the same Fed is set to hike those interest payments with its ongoing rate hikes.

In nearly five months of fiscal year 2018 (through Feb 27), the Treasury has already issued $611 billion in new debt.  The Treasury is on pace to issue $1.2+ trillion in new debt (2017 was a mere $672 billion increase).  But let’s be conservative and assume the Treasury reins it in and “only” issues another $389 billion over the next seven months…for a nice round $1 trillion in new debt.  Big numbers are hard to comprehend, so I’ll show just the added responsibility from the debt undertaken in 2018, per every full time employee in the US (there are 127 million FT US employees):

+$31 a day
+$157 week
+$658 month
+$7.9 thousand annually

This would be in addition to the $163 thousand every full time employee is already responsible for.  But, sadly, this vastly understates the issue.  According to the Treasury’s 2017 Financial Report of the US Government, the “total present value of future expenditures in excess of future revenues” is $49 trillion in addition to the federal debt!!!  Simply said, Social Security and Medicare require $49 trillion here and now to allow that money to grow at a compounded annual rate in conjunction with estimated future tax revenues to meet the present and future payouts that have been promised.

The US Treasury is telling you that between the federal debt and unfunded liabilities, the US is $70 trillion in the hole and despite record tax revenue, record stock and real estate valuations…the US is bankrupt.  Of course, the US can never “technically” go bankrupt as it will issue new debt at an accelerating rate to pay the old debt…but this has been the “end times” for every empire.  Debasement is the functional equivalent of national bankruptcy, the only means to pay the just the interest on the debt is creation of new debt at an accelerating rate.

So, a little focus on that $49 trillion unfunded liability (UL) portion (solid red line) seems due.  Charted below is the UL, according to the US Treasury, from 2000 through 2017 alongside the federal debt (dashed red line), and Gross Domestic Product (market value of all goods and services provided, annually).

Clearly, UL’s and federal debt are far larger and growing so much faster than economic growth represented by GDP.  Since ’00, GDP has not quite doubled (+88%) while UL’s have more than doubled (+157%) and federal debt has nearly tripled (+258%).  You may notice a dip in the UL from 2009 to 2010…a $15 trillion dip essentially overnight, when America’s UL fell by a third?!?  This was the estimated impact of the ACA, aka Obamacare.

The UL is made up of four primary components; the OASDI (Old Age, Survivors, and Disability Insurance), Medicare Part A, B, and D.  The UL components are broken out below (again, according to the US Treasury Financial Report of the United States Government)…

  • The OASDI deficit has been growing consistently.

  • Medicare, Part A…the liability fell by 80% with the passage of ObamaCare and has essentially been unchanged since.

  • Medicare, Part B…the liability fell by 25% with the passage of ObamaCare, but has again been rapidly increasing.

  • Medicare, Part D…the liability has essentially been unchanged since 2000.

The chart below details the unfunded liabilities, by source, and federal debt.

To comprehend the magnitude of the growing unfunded liabilities,  I’ll briefly explain what each is and show its revenues vs. expenditures on a net present value basis.

OASDI (Old Age, Survivor, Disability Insurance)

What – Federal program that provides earned benefits to retirees, their beneficiaries, and the disabled.
Eligibility – If you worked minimum of 10 years and are at least 62 years old (for partial benefits) or 65+ (rising to 67) for full benefits.  Presently, 61 million beneficiaries vs. 127 million full time employees.  Beneficiaries set to swell, quantity of full time employees likely to be little changed.
Unfunded Liability – UL is $15.4 trillion and set to grow rapidly as revenue stalls versus fast growing expenditures.

Medicare Part A

What – Hospital Care, nursing facility care, limited home health care, hospice care.
Eligibility – 65+ year olds receiving SS or those disabled (also those with ALS), typically no premium is paid.  Presently 44 million Americans enrolled in Medicare.
Unfunded Liability – With the passage of the Affordable Care Act (aka, Obamacare) in 2010, it was estimated that the gross costs of the ACA would be more than offset by reductions in Medicare spending, increased revenue, etc.  The massive Part A UL was estimated to have been reduced by 80%.   

Medicare Part B

What – Outpatient care, preventative care, ambulance services, durable medical equipment.
Eligibility – If eligible for Part A, you are eligible for Part B plus paying a premium.
Unfunded Liability – The UL is huge and growing faster than any other liability.

Medicare Part D

What – Prescription drug coverage.
Eligibility – If you are eligible for Part A and/or Part B, you are eligible for Part D.  Monthly premiums and out of pocket expenses help subsidize prescription drugs, premiums vary by plan.
Unfunded Liability – I only have full data back to ’04 for Part D…but apparently the UL is large but stable?!?

The problem areas should be fairly easy to see; Federal Debt, OASDI (SS), and Medicare Part B.  I have major questions regarding the assumptions going into these and the validity of these numbers?  Big questions regarding the assumptions of reduced costs via the ACA,and the potential impacts of an Obamacare repeal on the unfunded liabilities?  I have detailed why this situation is only going to worsen, (HERE) because of decelerating population growth among the young and surging growth among the elderly.  But still, the above is the governments baseline from which they are working and I think it’s important to at least know that.

But in search of higher economic growth rates, the US federal government is again running huge deficits in a vain attempt to grow its way out of the hole it finds itself.  In an attempt to hit a growth “home run” and achieve 3.5% GDP (or about a $700 billion increase in economic activity via debt fueled deficit spending), the federal government will undertake $1+ trillion in new debt plus $2 to $3 trillion increase in unfunded liabilities.  If a more realistic 2% GDP growth is achieved, that’s a $400 billion “growth” on a net increase of $3 to $4 trillion in federal debt and UL’s.  The chart below shows annual GDP “growth” minus the annual deficit incurred to achieve the growth, from 2000 through 2017.  Plus estimated “growth” through 2025 based on 2% GDP “growth”?!?

And no one sees a problem with this math???  Said more simply, the faster America “grows”, the faster America functionally goes bankrupt (detailed HERE).