Being one who looks at money and financial websites, I will often come across articles discussing retirement.  I will see headlines such as “How Much Do You Need to Retire”, or “When Can You Retire”, or “Will You Have Enough For Retirement”.  There are also retirement calculators.

It is a popular subject and not surprisingly, considering most people would like to retire at some point in their lives.  They want to know when they can free themselves from the daily grind.

The problem is that it is very difficult to estimate a good retirement number.  You don’t know what kind of unexpected expenses you may have, including medical.  You don’t know what the economy will be like and what kind of a return you can get on your investments.  One of the biggest things is that you don’t know how long you will live.

Aside from your life expectancy, by far the biggest variable and perhaps the most underestimated factor is price inflation.  You don’t know what your cost of living is going to look like years down the road.  If we have annual price inflation of 10%, then prices will double approximately every 7 years.

The Federal Reserve and the fiat money system makes it extremely difficult to plan for retirement.  It has been bad enough in the past, but now we are looking at $16 trillion in government debt (and growing) and perhaps $200 trillion in unfunded liabilities (and growing).  There are many good reasons to expect substantially higher price inflation in the future.  Meanwhile, your bank savings account right now is probably yielding .1% per year, if you are lucky.

Of course, this is just another reason that we should strive to allow competing forms of money by repealing the legal tender laws.  It will either keep the Fed somewhat honest or else it will put it out of business.

Since getting rid of the Fed isn’t a reality at least yet, you are probably still trying to find a good way to calculate your retirement needs.  While it is difficult to do, I think using real estate as a marker is actually a decent way to do it.  I have written about this before.  Owning houses (or condos) that are paid off will generate income.  The best thing is that rents will tend to keep up with price inflation and are a pretty good marker.

So while it is impossible to accurately calculate your retirement needs because of variables like life expectancy and inflation, you can at least get a decent estimate by using real estate as a marker.

I have detected a shift in the American mind and it is a good thing.  I see more and more people awakening to the fact that government is not there to look after people.  I see more people realizing that these ongoing wars are ridiculous, unnecessary, and quite harmful.  I see more people realizing that government is not the answer to their problems.

For young Ron Paul supporters, they have no idea just how much this country has changed in the last 5 years.  Libertarianism was barely on the map.  There was no such thing as a libertarian giving a speech to thousands of people in an audience.

But I also see very subtle things in every day life where the government weakens slightly and the spread of information increases.  The government has promoted, and sometimes even forced upon people, unhealthy things.  Fluoride in water is one example and yet I see most people drinking bottled water now.  They know that most of the tap water is bad.

I am actually seeing several products in the grocery store advertising that they contain no high fructose corn syrup.  Of course, this is something that has been promoted by government with subsidies and high tariffs on sugar.  But the fact that some products are starting to advertise in bold letters that they do not contain high fructose corn syrup, attests to the fact that consumers are conscious about it.

Changing subjects, but still on the same theme, I saw a piece on Fox News talking about military requests for ballots being way down from past presidential election years.  In other words, it looks like a lot of military men and women are not going to vote.  While the Republican hacks on Fox were talking about Obama and his administration most of the time, they couldn’t explain why the military people were not going to vote in big numbers for Romney.  And I doubt that there is any more apathy than in years past.  Of course, the most logical explanation, which terrifies the establishment, is that more people, particularly in the military, don’t want to vote because they see little difference between Romney and Obama.

We now live in a world of open communication.  We live in a world of Google and YouTube.  Things get around fast.  Politicians can’t get away with things as much as they could in the past.

With a bad economy, more people are doing their own independent research to find out why.  They want to know the reasons for the bad economy and what can be done to fix it.  They are tired of the same old Keynesian explanations.  More people are finding Austrian economics.

While I think it will still take some time to change hearts and minds, we are actually headed in the right direction.  The government continues to grow, but its structural foundation is weakening.

It isn’t really considered “cool” this time around to support Obama.  If anything, the Ron Paul supporters are where the action is.  People aren’t as excited about Obama this time around and rightly so.  And it seems that most of the Romney supporters are only Romney supporters because they are anti-Obama.

So while it seems like things are getting worse and worse with bigger and bigger government, we need to look at the positive things and realize how many more libertarians we have today than we did just 5 short years ago.  I’m not sure if Americans will be better off 5 years from now, but I think we will be much better off in 20 years.

The unfunded liabilities run up by the U.S. government are estimated at anywhere from $100 trillion to over $200 trillion.  While the estimates vary quite a bit, does it really matter?  Nobody can even conceive of what it means to owe $100 trillion.  In other words, it will be impossible for the government to keep its promises.

The biggest piece of the unfunded liabilities is Medicare.  Then comes Social Security.  There is also Medicaid and government worker pensions.  These are the big ones.  For now, I will just focus on Medicare and Social Security.

These unfunded liabilities keep growing every year.  There is no way that the government can keep these promises over the next 75 years, let alone the next 20 years.  There will be some kind of a default.  Many libertarians assume that the default will come in the form of inflation.  But that will not take care of the bulk of the problem.

If there is high inflation, then Social Security is supposed to be adjusted for a cost-of-living increase.  It will not solve the Social Security problem, unless the government stops giving a COLA or redefines it. If that happens, then seniors will get checks that buy less and less.

It is even worse for Medicare.  If there is high inflation, then medical costs will just continue to skyrocket.  This will make it even harder for the government to keep its promises.

The easiest form of default will be to increase the retirement age substantially.  If Congress raises the age to 75 overnight, then that will wipe out tens of trillions of unfunded liabilities immediately.  Of course, Congress won’t do this.  It will take smaller steps in defaulting on its promises.  It will only do them when it is necessary.

I have always found it ironic that older people probably made up the smallest voting group (by age) for Ron Paul.  Most of Paul’s support came from younger people.  It is ironic because Ron Paul is probably the only person who could have somewhat “saved” Medicare and Social Security, at least from a major default.

Ron Paul had a plan to cut one trillion dollars from the budget in the first year and to balance the budget by his third year (as president).  He was the only major candidate to offer any significant cuts.  He would have cut military spending significantly by ending the wars overseas.  He called for the elimination of several departments.  If Paul had become president and used the bully pulpit to get Congress to go along, there would have actually been a slight  chance that Congress might not have to declare a major default on Medicare and Social Security.

Instead, we will get Obama or Romney, neither of which will cut federal spending.  Even if they froze spending over the next 4 years, the federal debt would still continue to grow by massive amounts.

The so-called entitlement spending, the military spending, and the interest on the debt are greater than the total tax collections.  In other words, you could eliminate everything from the federal government except for those few things and the budget would still not be balanced.  And Romney doesn’t want to cut anything at all from the military.  And we know Obama won’t cut anything unless the situation is dire.

In conclusion, there will be some kind of a default in regards to Medicare and Social Security.  The main avenue of default will be through raising the age to collect.  If you are in your 40’s or 50’s right now, don’t plan to retire in your 60’s, unless you have done a really good job of saving for yourself.  If Ron Paul had received the Republican nomination, there might be some hope right now of making good on at least some of these promises.  But it isn’t going to happen with the continuation of big spenders in office.  Welcome to Greece soon.

The adjusted monetary base is actually down slightly right now from where it was when QE2 ended at the end of June of 2011.

You can view the shorter-term chart for the adjusted monetary base here:
http://research.stlouisfed.org/publications/usfd/page3.pdf

You can view a 5-year chart here:
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=BASE&s[1][range]=5yrs

You can view a longer-term chart here:
http://research.stlouisfed.org/fred2/series/BASE/

You can also view the excess reserves held by commercial banks here:
http://research.stlouisfed.org/fred2/series/EXCRESNS

While we will certainly keep an eye on the adjusted monetary base, I see no reason not to take the FOMC’s word that the Fed will increase its holdings by approximately $40 billion each month.

Some analysts have mistakenly thought that the Fed’s assets would increase by $85 billion per month.  But the FOMC statement said that its longer-term assets would increase by that much.  It will also decrease its holdings of shorter-term government debt.  This is part of a continuation of Operation Twist.  I have interpreted the FOMC’s statement to mean that the net increase in holdings will be $40 billion per month.

It will be important to look at the excess reserves held by banks as QE3 develops.  The increase in reserves has almost identically mimicked the increase in the monetary base since the fall of 2008.  This has helped contain price inflation (along with the fear that goes with a bad economy).  If the excess reserves start to decrease, or even not go up as much as the monetary base, then price inflation is likely to get worse more quickly.

Just don’t make the mistake to think that we cannot see price inflation even if the banks continue to pile up excess reserves.  Those reserves still represent money that is held by people and businesses.  While it is not being loaned out, it is still available for people to spend.

As of right now, the monetary base is just above the mark of $2,650,000,000,000.  We should expect to see it go up each month by about $40,000,000,000.

Since QE3 is open-ended, we don’t know when it will stop growing.

The Fed was able to keep price inflation in check for the last 4 years, despite a tripling of the monetary base.  This was the probably the worst recession since the Great Depression ended.  It was a collapsing of the housing bubble.  We have seen high unemployment and great fear.  We have seen excess reserves piling up.  We have seen consumers cut back.  All of this has helped the Fed in keeping price inflation down.

I don’t expect for this to continue.  Something will have to give.  If the Fed keeps going for a while with QE3, I am guessing this will be enough to prevent the economy from falling back into a deep recession, at least for now.  Instead, I think we will see higher price inflation before we see another deep recession.

Of course, nobody can know for sure.  We don’t know how long the Fed will keep up the monetary inflation.  We don’t know what will happen with velocity, which is the speed at which people spend their money.  One thing to be cognizant of, is the fact that velocity can pick up rather quickly.  If people perceive that their dollars are losing value too quickly, they will try to get rid of them in return for hard assets.  This, in itself, actually perpetuates the higher velocity.

So while it is impossible to know for sure when serious price inflation (double digit) will hit, just be aware that it can happen rather quickly.  Eventually, the Fed will have to choose between saving the dollar from hyperinflation or allowing a deep recession/ depression.  Hopefully it will choose the latter.

With the third round of quantitative easing set to begin, there are some people saying it is time to short bonds.  In fact, many of these people are libertarians and Austrian school economists.  They believe that a rise in interest rates is inevitable, as the Fed creates more money out of thin air.

If you look on the right side of my blog page, I link to Charles Goyette’s book called The Dollar Meltdown.  I highly recommend the book.  However, there is one point that I have been critical on with regards to Goyette’s suggestions.  He suggests shorting bonds, predicting that interest rates will rise.  He actually predicted this a few years ago and he has been completely wrong.  I don’t think it is a good idea to compete with the Federal Reserve, the biggest bond buyer of them all.

This doesn’t change with QE3.  While the Fed will buy more in the way of mortgage-backed securities, it also indicated that it will roll over expiring government debt.  While I agree with Goyette and others that interest rates will eventually rise, I have no idea when and I don’t think it is wise to assume that it will be sometime really soon.

So when will be the right time to short bonds?

Bonds go down in value when interest rates go up.  As long as the Fed is buying debt and price inflation remains relatively low, then I see no reason why rates would go up.  Interest rates are only likely to go up significantly when the Fed stops with its so-called quantitative easing.  When the Fed stops buying government debt, then rates are more likely to rise without the support.  And we can only rely on the Fed to stop creating new money out of thin air because of the threat of high price inflation.  The Fed doesn’t see price inflation as a threat right now, so it is creating money to bail out the banks and to supposedly stimulate the economy.

So until we see a pickup in the government’s price inflation numbers, then I don’t see any significant rise in interest rates taking place.  Price inflation will be the canary in the coal mine for interest rates, not the other way around.

So what would be the point of shorting bonds right now?  You could be waiting for a while before it starts to pay off.  In the short-term, you could easily lose money on this bet.

If you are going to speculate right now, why not buy something that does well with higher inflation?  Higher inflation is much more likely to occur before higher interest rates.  Therefore, for speculation, you should be buying hard assets like precious metals, mining stocks, oil stocks, real estate, etc.  These will all benefit from a depreciating dollar.

In conclusion, I don’t think now is the time to short the bond market, particularly while the Fed is engaged in quantitative easing that hasn’t yet produced high price inflation.  There may be a good time in the future to short bonds, but that will not be until we see higher price inflation.

The Daily Caller had an article on a new Gallup poll that showed 47 percent of Americans think that the government regulates too much.  The first question that popped into my head after reading the headline was, “What are 53% of Americans smoking?”

I spend a lot of time on this blog talking about monetary policy, government spending, and even taxes.  But we cannot ignore the huge burden that is placed on us from government regulations.  They lower our overall standard of living considerably.  They make wages lower.  They make prices higher.  They deter entrepreneurs from starting businesses.  They cause unemployment.  They are, in effect, a giant tax.

It is not just well-known regulations like Sarbanes-Oxley and Dodd-Frank.  They are horrible enough and put a huge cost on businesses.  There are tens of thousands of regulations.  Major companies have entire departments devoted to figuring out and complying with regulations.

It is actually probably easier to start a business in communist China than in capitalist America.  China has less red tape.  I think the U.S. is still stronger as far as property rights, but China has less bureaucracy in many ways.  Chinese businesses, operating in China, are not worried about such things as the Americans for Disabilities Act, which by the way, actually deters companies from hiring disabled people.

Repealing regulations is something that could be done almost instantly and few people would feel the pain.  It is not like cutting Social Security and Medicare.  It is not like cutting highway funds where either the state and local governments have to make up the difference or else the roads and traffic become worse.  If federal regulations are repealed, the only ones who experience short-term pain are the workers for the government agencies administering the regulations and the workers who help their companies comply with them.  I suppose that big companies might also suffer, in that they can’t use government as much to prevent competition from smaller businesses, but is that a bad thing?

While repealing thousands and thousands of regulations isn’t an answer to all of our problems, it is a low-cost way of helping the economy tremendously.  53% of Americans have no idea just how many regulations there are and how dramatically they affect their standard of living.  In fact, I would bet that a good portion of the 47%, who think government regulates too much, realize just how extensive the damage is.  They are correct in saying that there is too much government regulation and they probably only know a tiny fraction of the regulations in existence.

I think this is one area where Americans can unite in calling for smaller government.  It is not like Social Security where one group benefits at the expense of another.  Most people can benefit from less government regulations and more regulations from the free marketplace.  If America is ever to be truly prosperous again, it can’t happen with the level of government regulation that currently exists.

While I believe that the main reason for QE3 is to bail out the major banks, one of the reasons that was given for QE3 is to stimulate the housing market.  So will QE3 help the real estate market?

The Fed is going to buy mortgage debt for this round of quantitative easing (money creation), instead of its typical method of buying regular government debt in the form or treasuries or bonds.  This is supposed to lower mortgage rates and help stimulate housing demand.

QE3 may or may not lower mortgage rates significantly.  Rates are already at or near all-time lows.  If you have good credit and a good down payment, you can get a 30-year fixed-rate mortgage for as low as 3.5% in some places.  Anything under 4% is really incredible.  I suppose if rates somehow go below 3%, then this will help the housing market on the margin.  However, I would think that most people who could buy a house and wanted to buy a house would have already done so.  So again, I think lower rates would help on the margin, but not very much.

There is a bigger issue that seems to be missing in many commentaries regarding real estate and QE3.  QE3 is inflation.  It is the creation of new money out of thin air.  If the demand for money doesn’t change (or goes down), then the increased money supply will eventually lead to higher prices.

In an inflationary environment, people go into hard assets.  This can be gold, silver, oil, stocks (yes, owning stocks are a claim on the assets of a business), paintings, diamonds, baseball cards, etc.  Of course, a house is also a hard asset.  Therefore, house prices will probably go up if we see significantly higher price inflation.

Housing prices may not go up in real terms.  In other words, if you adjust for price inflation, prices could still go down.  There is still a lot of inventory owned by banks and there are a lot of delinquent “home owners”, who really aren’t home owners at all.  The banks essentially own their homes, but they don’t want to go through the expense of foreclosing.

Just for an example, maybe we will see price inflation hit 10% per year, while housing prices are going up 5% per year.  Prices would be going down in real terms, but up in nominal terms.  It is still a better investment than having your cash in the bank, at least right now.  Plus, if you have a mortgage, then you would be paying it off with depreciating money.  The payments, adjusted for inflation, would be getting cheaper and cheaper as time went on and inflation kept going.

Of course, it is possible that housing prices could go up faster than price inflation.  However, I would be surprised to see another housing bubble start right now because so many people were burnt by the last one.  I think a bubble in another hard asset, like gold, is far more likely at this point.

If you are in the right position, investment real estate could be the deal of a lifetime right now.  You can buy at depressed prices with super low mortgage rates.  If price inflation picks up substantially, you can pay down your mortgage with depreciating dollars.  Meanwhile, rents will probably go up.

In conclusion, my guess is that QE3 will help the real estate market, but the low mortgage rates will not account for most of it.  It is the simple fact that money creation leads to higher prices in hard assets.

It is usually hard to tell how a third-party candidate is doing before an election.  It is not any different this time in the presidential race.  Libertarian candidate Gary Johnson is reportedly doing fairly well in the polls, at least for a Libertarian candidate in a national election.  Some polls have him as high as 3 or 4 percent and he polls even higher in some states, particularly his home state of New Mexico.

Polls don’t mean all that much though, particularly for a third-party candidate.  Many voters are spooked at the last minute and don’t want to supposedly throw away their vote.  They end up voting for the lesser of the two evils, whoever that may be in this case.

As I’ve written before, the Libertarian Party had a real opportunity in this election to put up a principled candidate and draw in most of the Ron Paul supporters.  While Johnson may get some Paul supporters, I doubt if it will be a majority.  Johnson is just not as principled.  He doesn’t have that radical side that appeals to so many libertarians.  Instead, we get this:

It is bad when Johnson makes the war hawks on Fox News seem happy.

I will be surprised if Johnson ends up getting one percent or more of the vote.  Based on Ron Paul’s campaign, the Libertarian Party candidate should be getting at least two percent in this election.  It should be by far the best showing ever for the LP, yet it won’t be.  It is disappointing, because it would have been interesting if there were a principled libertarian in the general election.

The hardcore Gary Johnson supporters will be paying attention on election day.  They will be disappointed.  They are hoping he gets into the debates.  He won’t.  They are hoping he will at least be a spoiler, but how can you ever know if someone is a spoiler?  People that vote for Johnson probably wouldn’t have voted for Romney or Obama anyway.

While Johnson is probably less evil than Obama and Romney, I don’t see him as having a strong set of principles.  He doesn’t completely understand what it means to be a libertarian.  He is not that great on economics and he apparently, from the video above, isn’t that great on foreign policy.  Unless I see some dramatic change in him in the next 6 weeks, he will not be getting my vote.  My vote will go to Ron Paul or nobody at all.

This will be a wasted election for the Libertarian Party, just as it was in 2008.  There is almost zero chance of winning, so how can the party and the cause of liberty benefit from running a candidate?  The only benefit is if the candidate helps educate others and gets more people interested in the message of liberty.  Ron Paul’s campaign did that.  Gary Johnson’s campaign is not doing that.

The latest FOMC statement announced another round of quantitative easing or money creation, without actually using those words.  It said that it would start buying an additional $40 billion per month in mortgage-backed securities (MBS), without saying for how long.  I wrote on this the day the statement was released.

One of the things I touched on was that I thought this might be a bailout for the banks.  I have not seen anything to the contrary to change my mind about this.  Let’s look at it further.

The Fed is going to buy $40 billion worth of MBS each month.  Or is is really $40 billion worth?

After the fall of 2008, the Fed started buying MBS, but they were paying the amount that was shown on the books of the banks.  In other words, the Fed was paying a much higher price than they were worth.

Mortgage-backed securities are essentially many mortgages lumped together.  It is like a mutual fund of mortgages.  When the real estate bubble crashed, starting around 2006, these assets went way down in value because many people were defaulting on their mortgages.

If someone gets a mortgage and makes a down payment in the purchase of a house, then the bank making the loan is usually safe.  They have the house itself as collateral, in case the person defaults on the mortgage.  However, the real estate crash caused a major problem.  If someone took out a loan for $200,000 and the house is now only worth $140,000, then the bank holding the loan is going to take an approximate hit of $60,000 if the person paying on the loan defaults.

In the above example, the bank was still holding the value of the loan on its books at approximately $200,000.  However, because there was a default, the bank can really only recover $140,000 (not counting other expenses and commissions).  But the Fed came in and bought this loan from the bank for $200,000.  The Fed paid the book value instead of the actual market value.

This is a bailout for the bank.  The crash of the real estate bubble and the major defaults on mortgages was probably the primary reason that so many major banks were on the brink of insolvency about 4 years ago.  (I am not including the fact that banks were lending on fractional reserves, which doesn’t help the insolvency.)

So the Fed bailed out the banks and one of the primary ways of doing so was by buying these so-called toxic assets.  It overpaid for these mortgage-backed securities.

So the big question is: what value will the Fed pay now with QE3?  I have seen nothing to indicate that the Fed will pay market value.  If anyone has anything to prove me wrong on this point, please present it.  As far as I’m concerned, the Fed will be buying these securities based on a previous value that is no longer realistic.  They might pay $40 billion for securities in a month that are only worth, say, $25 billion.

The Fed’s primary reason for its existence is to support the big banks.  Its secondary reason is to fund Congress and its deficit spending.  QE3 is being implemented to support the big banks, along with Fannie and Freddie.

It almost makes me laugh to hear everyone debating the reasons for QE3 and whether it will work.  The whole thing is a facade.  The Fed isn’t doing this to help the economy, except maybe in the sense that it is keeping the big banks afloat.

My theory is that the Fed took a lot of heat for the bank bailouts that happened almost 4 years ago.  So instead of calling this a bank bailout, they are just implementing policy to help the stagnating economy, or so they say.  However, the real reason is to prop up the big banks.

Now, I don’t know if the big banks are on the verge of collapse and this is being done to prevent that, or if this is just a way to make the banking executives richer.  But I am rather certain that the main purpose of QE3 is to bail out the big banks.

The rationale for buying mortgage securities doesn’t even make much sense.  Mortgage rates are already near all-time lows.  Is lowering the rate by another half a percent going to really stimulate the housing market enough to significantly affect unemployment?  If the Fed wants to create money out of thin air and stimulate the economy, why can’t it just buy government debt as it has traditionally done?  There is no doubt that there is plenty of it to buy.

In conclusion, QE3 is another bailout of the big financial institutions.  The Fed has pulled one over on the American people.  I do not see this being discussed elsewhere, even amongst libertarians.  While many people understand that QE3 will not work to help the economy and will only make things worse, QE3 will work exactly the way that the Fed intends.  It will help the big banks.

Walter Williams and Thomas Sowell are often linked together.  Perhaps it is because they are both older, black, and conservative (at least viewed that way) and they both specialize in economic issues.  In addition, the two of them are friends and speak highly of each other.

As a libertarian, I have a strong preference towards Walter Williams and I always have.  Earlier this year, I wrote a rather scathing post about Thomas Sowell.  I am highly critical of him and I do not consider him to be a libertarian.

I am much more sympathetic towards Walter Williams.

Thomas Sowell is a great writer.  He is often witty and eloquent with his words.  If Sowell has any advantage over Williams, this is it.  That is not to say that Williams is not a good writer.

One major difference is that Williams sticks to his knitting.  He mostly focuses on the things he knows well and can explain well.  He particularly focuses on economic issues.  He also writes about cultural issues in the black community.  I agree with most of what he writes.

On a rare occasion, Williams will wander from his niches and write about foreign policy.  This is where he is weak (at least from a libertarian standpoint).  He doesn’t understand how many problems the U.S. empire creates throughout the world.  He doesn’t really understand the concept of blowback, or at least hasn’t shown that he does.  Perhaps he doesn’t know his history well enough.

I consider Williams and Sowell to be both pro war.  But Williams doesn’t talk about it much, so I can tolerate him.  Sowell wanders off into foreign policy quite a bit more.

But even aside from these issues, I have always had a preference for Williams over Sowell.  Last week, I read an article by Walter Williams that clarified it all for me.  In the article, Williams discusses the fact that the Constitution gave Congress the ultimate authority to tax and spend.  He says that a president cannot spend one dime that is not first appropriated by the Congress.

Williams goes on to stress a point that I often make and that we rarely see in the mainstream media.  He points out that a Republican-controlled House of Representatives controls the purse strings.  He even points out that if the Republicans were really against Obamacare, they could pass an appropriations bill that would deny money for it.

So this is the biggest difference between Sowell and Williams.  Williams is highly critical of the Republicans.  Sowell is mostly an apologist for the Republican Party.  Sowell will criticize Obama and Democrats all day long, but then barely says a harsh word about Bush or the Republicans.  (I say Bush because of the 8 years of damage that he did and the fact that Obama has simply continued most of his policies and spending.)

In conclusion, I will take Walter Williams over Thomas Sowell any time.  At least Williams sounds like a libertarian a good part of the time.  Sowell thinks we can get smaller government by turning to people like Newt Gingrich and other Republican hacks.  Sowell will never learn.  He will keep doing the same thing over and over again.  He thinks this time is different, but we keep getting the same results: bigger government.  Sowell is the definition of insanity.  Meanwhile, Williams understands that the Republicans are a major part of the problem.  He should pass the message along to his good friend.