There was a Republican presidential debate this evening that was hosted by CNN.  The main topic was foreign policy.  Wolf Blitzer was the moderator.  I think he actually does a reasonably fair job when you compare him to most of the rest of the mainstream media.

The participants of the debate consisted of 7 pro-war candidates and one peace candidate.

Jon Huntsman, while no peace candidate, is a little less awful on foreign policy than the rest of the other pro-war candidates.
Rick Perry is still a horrible debater.
Mitt Romney is still an establishment stiff.
Rick Santorum is still irrelevant.
Michele Bachmann is still far worse on foreign policy than she is good on economic issues.
Newt Gingrich is still a snake.
Herman Cain is still dumb as a rock.  If you don’t think so, just ask Cain if he is dumb as a rock and he will answer that he has to check with his expert advisors first before he makes any judgement.

Then there is Ron Paul.  He is the peace candidate.  He was absolutely brilliant tonight.  He may not be perfect in his delivery, but he was driving every point home.  His words were accurate and well put.  His analogies were great.

Gingrich was talking about how we have to distinguish terrorism from criminal acts.  Who will decide this?  Gingrich?  The word terrorism is thrown around by Republicans as much as the word racism is thrown around by Democrats.

There was a report that came out of Missouri in 2009 from the Department of Homeland Security that was labeling people as potential terrorists who were “right-wing extremists”, veterans, and those who supported third-party candidates.  If they are terrorists, then according to Gingrich, you can just go ahead and execute them without any proof or any trial.

I loved Ron Paul’s response to Gingrich’s comment about Timothy McVeigh.  Paul said that the government can install video cameras in the homes of every American in an attempt to prevent wife beatings and child abuse, but then the American people are the victims.  This was a great analogy that he made.  He was pointing out that Gingrich’s policies would turn us into a police state (if we aren’t there already).

While many pro-war Republicans will despise Ron Paul after the debate, his performance probably changed a few more minds and opened a few more eyes.  He is chipping away.  Also, I’m sure there were probably a few Democrats out there that liked what he was saying and will perhaps start paying more attention to what he is saying on economic issues.

I still don’t know if Ron Paul has a chance to win the nomination.  He is doing well in polls in Iowa.  He is in this thing for the long haul.  He will continue to change minds and influence the debates.  This is very encouraging for libertarians.

The big news today is that the so-called super committee could not come up with $1.2 trillion in “cuts” (see articles here and here).  The stock market went down significantly today and many are blaming its poor performance on the news.  This is a tough sell though, given the major volatility of the market lately.

This whole super committee was a joke.  It was put in place when the Republicans sold out on raising the national debt ceiling.  It was kicking the can down the road.  They just kicked it again today.  Now, automatic cuts are supposed to happen.  Whether they will or not, we shall see.

The super committee was supposed to come up with $1.2 trillion in cuts.  This was a joke to begin with.  This is over a 10 year period.  The government could cut $1.2 trillion from this year’s projected budget and the budget still wouldn’t be balanced.  Spread out over 10 years, it would only be $120 billion per year.  And these aren’t even really cuts.  They are just cuts in the projected spending, which is of course projected to increase.

Now here is the biggest joke of all.  The reason the super committee supposedly failed was because they couldn’t agree on the right amount of new “revenue enhancements”.  This is lingo for tax increases.  The Republicans were already willing to agree to some tax increases.  The Tea Party should be so proud.

The Republican hacks in DC were not labeling these tax increases.  They were saying they wanted to eliminate some loopholes and deductions.  One example is the deduction for the interest on your home mortgage.  It doesn’t really matter whether you call it a loophole or a deduction because the bottom line is that it is a tax increase.  By eliminating certain deductions, it will mean more people will pay more in taxes.  That is a tax increase.

The best part about this whole thing is that they consider raising taxes a spending cut.  We are truly living in a bizarre world.  So I guess the politicians in DC could just double all tax rates and claim that they have cut spending by $2 trillion.  This is what we are dealing with.

Anyone who favors small government who is still supporting and voting for Republicans on a wide scale is simply delusional.  They never learn.  They are Einstein’s definition of insanity, doing the same thing over and over again and expecting different results.

I am not talking about people who support Ron Paul.  I am talking about people supporting most of the other politicians in DC.  The Republicans in DC do not want small government any more than Obama wants to restore peace and civil liberties.

The politicians in DC will continue to spend until there is some kind of a major revolt or until the laws of economics forces the situation (like what is happening in Greece).  For now, they can still rely on the Fed and the Chinese to buy U.S. government debt.  When the dollar sinks more and eventually faces the threat of hyperinflation, the Fed will have to make a choice.  If and when it chooses not to buy any more government debt, then Congress will have to massively cut spending.  Be prepared.

Usually when I ask a question as the title of my blog post, I go on to answer the question.  With this post today, I am actually struggling to answer this question with a solution that is consistent with my strong libertarian beliefs.

On Monday, November 14, I wrote a post on the problem of the FDIC.  I am completely against having an FDIC that is run by government.  I would not be against the idea of having banking insurance if it took place through the voluntary marketplace.  As I previously said, I am in favor of abolishing most government programs and departments almost immediately.  However, I see major problems with eliminating the FDIC immediately as it would probably cause bank runs almost instantly and really would threaten to take down our whole financial system.

I am certainly in favor of dismantling the current financial system, as it is bogged down with bureaucracy and major government interference.  But I don’t want to see it happen with total chaos as millions of people lose the money that is in their checking accounts.

So how do we end the FDIC in an orderly fashion?  We definitely need some kind of a market solution.  We need to somehow phase it out.  The post office is being phased out.  Email and the internet are helping to do this.  The loosening of previous regulations and allowing companies like FedEx and UPS to compete was a big step.  We need to continue to free up competition.  In the case of the post office, the last step is to end the monopoly on delivering first class mail.  Private enterprise will eventually close the government post office.

It is a little harder with banking.  Banks should be allowed to start up without having to abide by government regulations, other than those that strictly relate to force or fraud.  Even here, these laws should come from the state and local levels.  They should not come from Washington DC.  These banks would not have the backing of the FDIC.  The problem here is that it would be difficult for these new banks to thrive.  The FDIC acts as a subsidy to the current banks.  It allows them to take excessive risk and not being held accountable by their customers.  Customers don’t really care who they bank with from a safety perspective as they know the FDIC will bail them out.

If legal tender laws were also repealed (a very important thing), then more people might start using gold, silver, or other currencies.  Banks could then operate the way they should in a free market environment, acting as a storage house.  Banks would probably not pay depositors interest on their money, unless the depositor was in agreement that their money was being lent out and that it might not be available upon request.

The amount the FDIC insures was increased three years ago, during the financial crisis, from $100,000 to $250,000.  This needs to stop.  If the FDIC would just stop raising the amount, it would eventually be phased out by the Federal Reserve’s inflation.

So I am still not sure how to answer my question of how we fix the whole situation.  It is quite astounding because for all of the things I read on LewRockwell.com, Mises.org, and other libertarian sites, I have not really seen this addressed.  The only idea I remember seeing was that of George Reisman.  He advocated that the Fed increase the monetary base and capitalize the banks, but then force the banks into having 100% reserves (no fractional reserve lending).  I don’t like this idea for the long term, but I do give him credit for being one of the few people to offer a solution, at least for the short term.

One thing I do know is that the free voluntary market has a way of solving problems.  We need to repeal as many government laws as possible, particularly those in DC.  Laws should exist to protect people and their property from force or fraud.  From a constitutional standpoint, most of these should be coming from the state and local level.  Once these regulations are repealed, the free market will find a way of providing honest banking services.

As long as governments tax, spend and regulate and the Fed controls the money supply and manipulates interest rates, there will continue to be misallocations in the economy.  As long as this is going on, I can keep writing about the things I write about.

Most investment advisors will focus on individual stocks and make them fit into their clients’ portfolios.  I don’t spend a lot of time analyzing individual companies.  There is certainly nothing wrong with this and some money can be made with this strategy (look at Warren Buffett), but I prefer to look at the overall economy and the investment implications.  In order to understand the economy in our world today, it is impossible to avoid politics.

Government policies and central bank manipulation of money (which is granted this power by government) drive the performance of the economy as a whole.  The central bank causes boom and bust cycles by creating money out of thin air and by artificially influencing interest rates.  Government spending also distorts the economy by redistributing wealth and by misallocating resources that do not satisfy consumer demand.  If a product were desired by the public enough for them to spend money on, then the government should not need to subsidize it or protect it from competition or to favor it in some other way.

Since the government plays such a significant role in our everyday lives with its taxing, spending, and regulating, it has a huge negative effect on the economy.  This has a huge effect on investments.  This is why it is important to understand the consequences of these government policies as it can and will determine how your various investments perform.

Virtually all government spending and regulation causes some kind of a misallocation of resources.  The challenge is to figure out the most likely possibility of how humans will react to these policies and how it will direct money and resources.

As long as these dislocations are taking place, I will always have something to write about.  If we ever achieve a fully libertarian society, then I can write about the brutal history of government and all of the unnecessary misery that it caused people in the past.  This will be to make sure that it never happens again, so that free human beings can prosper.

Back in September, I wrote about Gary Johnson and his proposals for a Fair Tax and a balanced budget.  I said that I am not a fan of the so-called Fair Tax, but that I do like his idea of immediately balancing the budget by cutting spending by 43%.

I recently received a comment regarding that post.  I will not quote the whole thing here.  It has bad language at the end, but you can read the whole thing here if you wish.  The commenter says to me, “So you want to cut fed spending almost in half?  Sure.  Go for it.  Just don’t cry about the depression from hell that would follow.”

While the comments were strong and more rude than your typical person, they do reflect a certain mentality that permeates our society.  It is Keynesianism.  While I think Keynesianism has been somewhat damaged in the recent years with the economic troubles and with the internet replacing the mainstream media, there is still a large faction that believes this stuff.  Some people think that if we cut government spending drastically, that major chaos would follow.

The comment about having a depression is not completely wrong.  If the government were to drastically cut spending all of a sudden, we would have a sharp downturn in the economy.  It would be quite painful for the American people.  But at least it would be temporary pain and we could look forward to a real recovery.

The big question is, what are the other options?  The other options involve more spending, more inflation, higher taxes or some combination of the three.  They will all lead to things far worse than the above scenario and they will all end in a far greater depression.  The voluntary economy is starving for savings and capital investment.  It is being sucked up by governments at all levels, but particularly the federal government in DC.

Most people don’t know there was a severe economic downturn in 1920/ 1921.  The government did not come up with any grand stimulus plans.  It cut taxes and spending.  Most people don’t know about it because there was a quick recovery.

On the other hand, people know about the Great Depression.  It dragged on and on as the government continued to spend money like crazy and prop up the bad investments.

We could eliminate the Department of Education tomorrow and the effects would be minimal.  Sure, the government school workers would be screaming like crazy.  But the education system is a complete disaster anyway.  Federal funding represents less than 10% of funding for most schools.  It would not be the end of the world.  While I’m against having to pay for government schools at any level, ending federal funding is quite modest.

Education is just one small example of the overall budget.  One easy cut would be to end the wars and bring troops home from all over the world.  This would save hundreds of billions of dollars almost immediately, without even firing people from their jobs.

After World War 2, there was a massive influx of soldiers returning home to America.  The economy was a mess.  The Great Depression didn’t end with the start of the war.  The war brought rationing and misery to millions of people.  It was a continued depression.  The men got jobs, but it is hard to imagine they were any happier.  The depression ended with the end of the war.

The troops came home and, while there was clamoring to do something, the government didn’t really do much of anything in the way of stimulus plans or a jobs bill.  Government spending decreased dramatically in 1946 and we basically saw an economic miracle.  Japan and Germany had their own miracles too.  This so-called miracle is called the free market.  When the government gets out of the way, prosperity happens.

We will not see a true and sustainable economic recovery until the government gets off of our back.  This means repealing taxes and regulations.  It means stopping the money printing machines.  Most of all, it means a drastic cut in government spending.  When government spending is cut dramatically, we can look forward to a quick and sustainable recovery and a return to the American dream.

A new poll was released showing a virtual 4-way tie in Iowa.  The poll showed Cain at 20%, Paul at 19%, Romney at 18%, and Gingrich at 17%.  CBS News released a story saying that Ron Paul has moved into the top tier.  Both articles were featured on Drudge Report.

Just the fact that both of these stories appeared on Drudge, help the Ron Paul campaign.  It makes people realize that he is a serious candidate with a legitimate chance of getting the nomination.  It also makes it difficult for the media to portray Ron Paul and his supporters as a bunch of wackos.  Are they going to keep saying that if he starts polling at 50%?

If you look at the 5th paragraph of the CBS News article, it says that Paul is the leader, with 32 percent support, from likely caucus-goers who say they’ve made up their minds.

If you look at the 4th paragraph of the Bloomberg article, it says that Paul’s support is more solidified than his rivals.

This is quite significant.  A lot of the potential Republican voters are switching with whichever way the wind is blowing.  They either don’t like the candidates, don’t know enough yet, or are just afraid to make up their minds without being part of a big crowd.

Ron Paul’s supporters tend to be quite devoted.  The majority of his supporters will not change their minds.  This means that Ron Paul’s poll numbers will not plummet like we have seen with Bachmann or Perry.

Romney is still the favorite to get the nomination, particularly since he is the establishment’s choice and he has the most money.  But Romney has his problems.  He is still the founder of Obamacare and there is nothing he can do to change that.  He is still not that well liked with Tea Party people and other fiscal conservatives.

Gingrich has the same problem that Bachmann has.  He does not poll well against Obama in a head-to-head match up.  Republicans are concerned that he can’t win the general election and rightly so.  We will see if it turns out for him the same as it turned out for Howard Dean in 2004.

Cain, as I continue to say, just isn’t that bright.  His latest gaffe was about Libya.  He is practically incoherent on foreign policy.  His 9-9-9 plan is a massive tax hike on the middle class.  And if you have any doubts on what I’m saying about his lack of intelligence, just watch this video.

Because of all of these flaws of the candidates and because a lot of Republicans can’t support Ron Paul’s foreign policy views, I am not counting Rick Perry out yet.  He has been horrible in debates, but he still has a lot of money and may still make another run by default.

We will see what happens, but today was good news for libertarians.  Ron Paul’s message is getting out there and is being received well by many people now.  It really gives me great hope for the future of this country.

The Federal Deposit Insurance Corporation (FDIC) was created in 1933 during the Great Depression.  It is not really a corporation as the name says.  It is a government agency which guarantees people’s deposits in banks.  The amount of insurance has increased over time.  Just a few years ago, it insured up to $100,000 per depositor per bank.  That amount was increased to $250,000 during the fall of 2008.

The agency was created due to the large number of bank runs taking place in the 1930’s.  This caused the equivalent of monetary deflation, as bank runs reversed the fractional reserve process.  This was one of the reasons that prices fell during the Great Depression, even though the central bank was engaging in monetary inflation (although not nearly enough according to Helicopter Ben Bernanke).

As a libertarian, I am completely opposed to the FDIC.  Only the government could run such an agency.  No private firm would find it profitable to insure banks in the current system of huge risk taking and massive fractional reserve lending.  I don’t think it is inconceivable that there could be insurance companies for depositors in a free market environment, but it would look a lot different than it looks today.  There would be no central bank, far less (if any) fractional lending, and we can also assume that most banks would be far more careful with their lending standards.

With the current system we have now with fiat money, central banking, and government granted privileges, only the government can really run a deposit insurance agency.  That is because only the government and the Fed have a legal monopoly over the money supply and can always create new money out of thin air if necessary.  No private insurance company could do this.

I am a hard-core libertarian and I am in favor of abolishing most government programs and departments immediately.  However, the FDIC might be one exception where I can envision major problems if the FDIC were abolished overnight.  There would be massive bank runs immediately, and the last ones to arrive would be stiffed out of all of their money that was in a bank.

I hated the bank bailouts that happened in 2008.  The politicians in DC really demagogued the issue.  With that said, there may have been one relevant point when they were saying that we would see Armageddon if we didn’t pass the bailouts.  For some reason, most politicians were afraid to come out and say the obvious, which was that they feared massive bank runs.  They threw all of these threats at the American people (including martial law), but I didn’t hear many say that we needed to pass the bailouts so that you could still access your checking account and withdraw money out of the ATM on Monday morning.

The American people would have actually supported the bailouts if they were told this and thought it was their only choice.

However, it really wasn’t the only choice.  The government could have actually let the banks go into bankruptcy and just refunded depositors their money.  The bank executives would have lost their jobs and their pensions.  The government/ central bank would have had to use the printing press to do this, but it probably would have been less than what was handed out with TARP.  Then the banks and all of their assets (for the ones that had to go into bankruptcy) could have been sold to the highest bidders.  Any money collected by the government could have been immediately used to pay off the new bonds held by the Fed, thus reversing the previous monetary inflation.

This whole FDIC thing is a major problem that we need to get rid of.  It is the ultimate moral hazard.  Depositors do not really care what bank they use in terms of safety.  Banks use excessive risk with this backstop.  The only regulation on the banks is occurring by government.  It should be done by the marketplace.  Private insurance companies could play a big role in keeping banks sound.

I am not sure about how to end the FDIC in an orderly fashion.  But as long as there is an FDIC, there will continue to be bailouts.

I like to make some comments after each Republican debate, especially with Ron Paul being involved.  After tonight’s debate on CBS, it is hard to call it a debate and it is hard to say that Ron Paul was actually involved.  If he had actually been asked more than two questions, maybe I would be able to comment on his performance better.

This “debate” was only nationally televised for the first hour.  After that, it was only aired in certain regions, unless you wanted to watch it via the internet.

CBS did a hideous job of hosting the debate and the candidates (with the exception of Ron Paul) did a hideous job.  Perhaps Jon Huntsman was a little less hideous and Rick Santorum is the worst of the worst, but overall, they are all bad.  Ron Paul is the only candidate on that stage who has anything near a rational foreign policy.

All of the others think the world revolves around the United States government and that the U.S. government should be calling all of the shots.

I found it interesting that some of the candidates think we need to be careful with Pakistan because Pakistan has nuclear weapons.  In other words, they don’t want to go to war with them.  Meanwhile, they want to go to war with Iran (some more than others) because Iran might possibly be developing nuclear technology.  So basically, that says to every country out there that if you don’t want to be invaded and blown to smithereens by the U.S. government, then you should acquire a nuclear weapon.  Now that is incentive.  It is also the law of unintended consequences.

Now I’m not saying the U.S. should go to war with Pakistan.  It is quite the opposite.  The U.S. should not worry about Iran and the U.S. should stop getting involved everywhere.  There should be no intervention in the world.  Perhaps there could be exceptions if two parties both agree to a mediator, but even this could be done privately without the involvement of the U.S. government.  The only thing that the U.S. government should do is to keep trade open so that Americans are free to do business with anyone in the world, so long as they are not directly inflicting violence on us.  If someone does inflict violence, then that person alone should be held liable and not a whole country or group of people.

These Republican hacks may sound decent on some economic issues, but they are awful on foreign policy.  Herman Cain is even dumber when it comes to foreign policy as he is on economic and social issues.  Bachmann is horrible with just about everything she says regarding foreign policy.  It seems that Santorum, the so-called Christian, is in competition to kill as many Muslims as possible.  Newt  is also pro-war and could potentially be worse than both Bush and Obama.

Mitt Romney and Rick Perry are both bad too, although maybe there would be a slight glimmer of hope that they would not be quite as bad as the others on the issue of war.  Meanwhile, as I wrote earlier, Huntsman is probably the least bad out of the seven of them.  Ron Paul, of course, is by far the best, even though he barely spoke for two minutes in the first hour of the debate, which was the only hour that was nationally broadcast.

Not much changed after tonight’s debate, except that it solidified my opinion that I have no use for CBS other than for watching football, Survivor, and Amazing Race.  It certainly does not qualify as a news organization.

The volatility in the stock market has continued this week.  The market was down big on Wednesday as there was increased concern about Italian debt, as rates on Italian bonds rose.  The stock market gained back some today (Thursday).

Gold, after showing a lot of strength and getting back near the $1,800 level, pulled back significantly today.

There is a continuing tug-of-war between the bears and the bulls.  I expect this to continue.  There is a tug-of-war between another artificial boom and a recession.  For a while, it looked as though the recession was going to win out in the short term.  But the stock market has done well in the last month and it points to the possibility of a short-term boom.  A short-term boom would not necessarily drive down unemployment significantly, but it might give people some false hope with rising asset prices, particularly in the stock market.

I thought that Wednesday sent an interesting signal with the concerns about Italian debt.  We have been hearing about Greece a lot, but I think the big fear all along has been that other countries would follow right behind Greece.  We have heard about the PIIGS (Portugal, Italy, Ireland, Greece, Spain), but now we are actually seeing the markets react negatively to all of the big government debt.  Before it was just Greece, which is a small and relatively poor country.  Italy is another story.

Wednesday was interesting because the U.S. stock market tanked.  It shows that major trouble in Europe will affect U.S. markets to a large degree.  While I still see a mini-boom cycle as possible in the near term, the situation in Europe makes it a little less likely.  A partial or full default by a country the size of Italy will send shock waves around the world.  It will be bearish for U.S. markets.  It will be bullish for the U.S. dollar, at least in the short term.  It is harder to say how gold will react.

The Republican candidates in the debate last night were saying that what happens in Italy is their business and that the Fed should not bail out anyone.  The candidates say that, but they are simply pandering to their audience (with the exception of Ron Paul of course).  If a default on Italian debt or any other debt jeopardizes banks in the U.S., you can count on a bailout.  Several of the Republican candidates, including Mitt Romney and Herman Cain, were big supporters of TARP (the bank bailouts) in 2008.  Of course, it may not matter because this may all blow up in the next year while Obama is still in office and we know that he will not stop a Fed bailout.

I expect continued market volatility.  I continue to recommend the permanent portfolio, as described by Harry Browne.  The name of the game right now is asset protection.  You have to keep what you have.  Any investment growth should be icing on the cake.

There was a Republican presidential debate on CNBC featuring the 8 major candidates (no Gary Johnson).  The debate focused specifically on economic issues.  I am biased on who did the best, based on my libertarian beliefs.  With that said, I will first try to give a quick rundown of who I thought performed well, even if I didn’t agree with them.

Aside from Ron Paul, I though Romney and Gingrich had the best performance.  I disagree with Romney on many issues and I believe he is a phony when it comes to the things that he says in which I agree.  However, he did hold his own tonight.  Libertarians don’t like him and most Tea Party people don’t like him.  He is a mercantilist as he showed when he advocated slapping tariffs (those are taxes) on Chinese products.  But I don’t think he hurt himself as far as his supporters go, who tend to be less fiscally conservative.

Newt Gingrich has had a brilliant strategy and it has worked in getting his poll numbers up.  He is very careful not to criticize the other candidates.  The few times he has done so in past debates, he has done it respectfully.  But he doesn’t just make Obama the target.  He goes after the media, including the moderators of the debate.  He basically tells them that they are asking dumb questions, without being quite that blunt.  He is calling out the so-called liberal media, even if he doesn’t use that term.  Maria Bartiromo was about to blow a gasket at one point in the debate and I think that is what Gingrich wanted.  Conservatives like it and that is why he is doing it.

I think Gingrich is a fraud, but he is a smart man.  I don’t think he will get the nomination.  He is the Howard Dean of 2004.  The Republicans would like to nominate Gingrich (just as the Democrats wanted to nominate Dean in 2004), but they sense that he could not win the general election.  I think the Democrats were wrong in 2004 and made a blunder in putting up John Kerry.  I think the Republicans are right though, in that Gingrich probably cannot beat Obama.  The Republicans are not going to nominate someone who most likely cannot beat Obama.

I thought Michele Bachmann was a little stronger as compared to previous debates.  She is much better on economic issues than foreign policy.  She also didn’t use any stupid lines tonight about making Obama “a one-term president”.  Maybe her advisors finally told her how dumb she sounded whenever she said that line.  Bachmann has the same problem as Gingrich in that people question whether she could beat Obama.

Some people will say that Herman Cain did well tonight.  He deflected the questions about his personal past.  When it comes to the issues, I will continue to say that the man is just not that bright.  He has absolutely no grasp of foreign policy, little grasp of economic issues, and has no plan to cut one dime in spending.  The Republican voters need to wake up and start seeing through this man.  He is absolutely horrible on all of the issues and he might even be worse than Obama, if that is possible.

Rick Perry had another poor performance.  He actually listed some specific departments that he would get rid of, even though he couldn’t think of one of them at the time.  He isn’t a good debater, but I’m not sure who people will turn to when Cain falls.  Perry has a lot of money and backing and I would not count him out yet.

I thought Ron Paul did a good job overall in the debate.  I wish he would have been more bold when he was talking about healthcare.  Michele Bachmann may have actually done a better job on that topic.  But Ron Paul is forcing the other candidates to take positions that I don’t think they would have taken otherwise.  He is talking about his plan to cut one trillion dollars in his first year and he hit the nail right on the head when he said that taxation is just a symptom of the spending.  Everything revolves around spending.  It is pointless to talk about tax reform if you don’t address the out-of-control spending.  The only other thing I wish he would have done is to challenge Herman Cain specifically.  He should have pointed out that Cain has not identified one specific spending cut of any significance.

In conclusion, it looks like things still have a way to go before they play out.  I believe that Cain will slip, as people realize that he is full of slogans, but short on specifics.  It will become a race between Romney, Paul, and probably one other person.  I’m not sure if that other person will be Perry, Gingrich, or Bachmann.  Right now, I am still betting on Perry, despite his poor debate performances.  He has a lot of money.

We will see if Ron Paul can get any pro-war Republicans to defect to his camp.  He will not really lose supporters as other candidates do.  His current supporters are strongly on his side and not going anywhere.  If he gains some more momentum, he could actually make things very interesting.