The self-identified socialist, Bernie Sanders, recently backed a plan that would guarantee a job to every American that would pay at least $15 per hour.  The idea is also being backed by other Democrats in the U.S. Senate.

While Sanders is very far to the political left, he is not technically a full-blown socialist.  When it comes down to it, he does not believe that the government should own all of the means of production.  He perhaps believes this in certain sectors, such as medical care, but I don’t think he literally wants the government to own everything.  Most of his schemes revolve around higher taxation, higher government spending, and more government regulation.

Libertarians can find some areas of agreement with Sanders on certain civil liberty issues and foreign policy.  But even here, Sanders is woefully inconsistent.  If he had actually become president, it is doubtful that the current wars and occupations would have ended with him bringing the troops home.  Anyone who endorses Hillary Clinton cannot be relied upon to be anti-war in any sense.

In terms of economics though, Sanders is just a complete disaster.  It wouldn’t matter much except that there are millions of people who actually listen to him and think he is on the right track with his policy proposals.

So what about this idea of a government job guarantee?

I don’t know if the Sanders plan would permit people to still work below the $15 per hour rate, or if that would be the new minimum wage.  Either way, most people wouldn’t work for less than that unless they had a job they really liked.  If you are making $12 per hour and you can automatically get a job making $15, then most people will make the switch unless their current employer is willing to at least match it.

Therefore, not only would the plan be expensive to pay millions (tens of millions?) to get a job, but there would be millions more who currently have a job but would leave it in order to make the higher amount.  And if $15 per hour is the new minimum wage, then you would likely see employers cutting their labor force which would drive the newly unemployed into the government jobs.

If such a plan were to go in effect, would Sanders support a massive curtailment of the government welfare state?  Would he support an end to direct subsidies in food, housing, and medical care?  Or would he say that everyone still needs these “benefits” because that wage still isn’t adequate to live on?

If there were no significant cuts in welfare benefits, then how many additional hundreds of billions of dollars would the government (i.e., the taxpayer) have to pay each year just to support this program?  It would mean significantly higher taxes for everyone and probably even higher deficits.  It would be a massive misallocation of resources that would only serve to make nearly everyone poorer in the long run.

Since it is basically a socialist scheme that would seek to avoid the price system, the bureaucrats in charge would only be guessing at what kinds of jobs to create.  There would be no profit and loss system to tell them whether the jobs are actually fulfilling consumer demand in any way.

Another question about this plan is what will happen to the millions of people working these government jobs.  Is there any room for promotions?  And what happens when some people just don’t work hard?  That couldn’t possibly happen; could it?

Is the government allowed to fire employees who do not perform their given job functions?  What if somebody calls in sick all of the time?  What if someone shows up to “work” and just literally sits there all day and just refuses to actually do anything?  Will they still get paid $15 per hour for being there?

When anyone with any sense actually sits down and starts to think about some of the details, a lot of questions arise.  If you sit there and think about it long enough, you could probably come up with 100 good questions about how things will operate.  Of course, those who came up with the plan and those who are enthusiastically supporting it are not using any sense.  If they are, it is only to act as a demagogue and to swindle others.

For libertarians, this is an easy thing to oppose just on moral grounds alone.  Since this plan would involve violating the property rights of others by using force or the threat of force, then libertarians can easily oppose it.

But aside from the moral argument, anyone with some sense and an open mind should be able to see just what a disaster a plan like this would be.  It would disincentivize productivity and massively misallocate resources.  We would all suffer greatly in our living standards if such a proposal were enacted.

It shouldn’t surprise me, but I do find it interesting that so many people are concerned (in a few cases, obsessed) about their credit report and credit score.  They will analyze different tricks on getting a higher rating from the credit agencies.

Some people claim that it can actually benefit your credit score by holding a small amount of credit card debt while still paying at least the minimum due on time each month.  I don’t think there is much, if any, truth to this claim.  I have almost always paid my credit card balances off in full each month, and it has not seemed to impact my credit score.  Maybe if I had carried a balance, my credit score could have been higher by a few points, but I really don’t know that.

The most important factor is to pay your bills on time.  The second most important factor is to not get into too much debt, even if you are managing to keep up with the payments.

If you get those two things right, then that will mostly take care of the rest.  As long as you are not living a life off the grid and you are using our modern-day banking system, then your credit score will likely be good.  If you are young, say early 20s, then you will probably need to gain some history.  Once you have an established bank account and a credit card or two (even with low credit limits), then your credit score will naturally rise over time.

The main point I would like to get across here though is that you don’t really have to have a strong credit report.  As similar with many things in life, the ones who need the good credit score are often the ones who don’t have a good credit score.

If you are good with your personal finances, then your credit score will likely be high.  But if you are really good with your personal finances, then a high credit score probably won’t matter that much to you.

Sometimes employers will check credit reports of prospective employees, but not the actual scores.  An employer will probably not make this a deciding factor unless your credit report shows something particularly bad.

Your credit score may matter when looking to lease housing.  Again, it will probably only matter if your credit score is bad.  If it is mediocre, then it may not matter much.

Aside from these circumstances, the only reason a good credit score matters is so that you can take on debt at a competitive interest rate.  But if your personal finances are really good, then you really shouldn’t be dependent on debt anyway.  And if your personal finances are in bad shape, and hence have a bad credit score, then you probably shouldn’t be taking on any more debt, including a home mortgage.

If you had problems in the past, and your credit score is low now, then all you can do is make the right choices going forward.  This means staying out of debt, unless you have no other options.  It means saving a lot of money.

If you have a lot of money saved, then your credit score becomes less and less relevant.  Even if you need to rent an apartment, you can always offer to just pay the full year up front.  If you offer this, you might even be able to get a small discount.  If the place you’re renting is going for $1,000 per month, you can offer to pay $11,000 up front at the beginning of a one-year lease.  Even if you have excellent credit, you may want to explore this option in order to save money.  Just make sure you can trust the landlord, and get a receipt for your payment.

If you have a lot saved, then you should even be able to buy a car without needing financing.  It would admittedly be a lot harder to buy a house, but there are people who actually do pay cash (not literal cash) for a house without the need for a mortgage.  It makes it easier in the buying process, and you can also get better deals when buying.

There are middle class families (and even upper class families) that get into trouble with high debt.  It is easy to imagine a typical American family earning $100,000 per year (before taxes) that has a mortgage, two car payments, and some credit card debt.  Since they already have a house and cars, they really shouldn’t care about their credit score, or at least not directly.  They should care about debt reduction and saving money.  But this, in itself, will correct any credit rating problems.

For anyone reading articles about how to improve a credit score, they should focus instead on debt reduction and savings (unless such articles just interest them).

When it comes to personal finance, credit scores are just a reflection of your past decisions.  There is a correlation between bad credit ratings and bad financial decisions.  But the bad credit score is not a cause of the bad financial decisions.  It is a symptom.  So in this case, don’t treat the symptoms but the root of the problem.

In personal finance, the best thing to do is to have little or minimal debt and to save money.  If you have money in the bank, then it makes a lot of other issues become irrelevant, such as a credit score.

The Federal Open Market Committee (FOMC) just issued its latest statement on monetary policy.  The federal funds target rate will remain the same for now.  The Fed will also continue to roll off $30 billion per month in assets by allowing them to mature without reinvestment.

The biggest news out of the statement is a slight word change from the previous statement.  The current (May 2, 2018) statement said that “both overall inflation and inflation for items other than food and energy have moved close to 2 percent.”  In the previous statement in March, it said that “both overall inflation and inflation for items other than food and energy have continued to run below 2 percent.”

In other words, the Committee’s statement is showing expectations of slightly higher consumer price inflation.  As long as the economy keeps humming along, this will justify the Fed further hiking its target rate in the future, as well as staying on the path of reducing its balance sheet.

It is interesting that price inflation is picking up, albeit very slightly.  This is in the face of monetary deflation.  If the Fed’s balance sheet is being reduced by $30 billion per month, and it is only supposed to increase this reduction in future months, then why are consumer prices rising at an increasing rate?

The first thing to consider is that prices take time to adjust throughout the economy.  When new money is issued, or money is withdrawn, as is being done now, it is mostly through the banking system.  It is not as if your checking account is going up or down in any immediate way based on the Fed’s monetary policy.  It takes time for money to change hands and to ultimately bid up prices (with inflation) or bring down prices (with deflation).  It can take many months, or even years, before new money makes its way into the economy and settles in place.

The second thing to consider is that the Fed is generally looking at consumer prices and not so much asset prices.  Asset prices have already been roaring, especially when it comes to housing and stocks.  Since stocks are not accounted for in their price inflation measurements, we don’t always know if there is a shifting of resources.

A third thing to consider is that the money supply is just one factor in determining prices.  The loans issued by banks play a major role in whether the adjusted monetary base is multiplied through the fractional reserve lending process.  This was one of the main reasons that price inflation stayed relatively tame during the Fed’s great monetary expansion from 2008 to 2014.  Much of the new money that was created ended up as excess reserves held by banks.  In other words, the banks did not lend out this money.  With the Fed having increased the interest it pays banks on their reserves, you would think that this would just curtail bank lending that much more, but we can’t be certain of this.

We must also factor in the demand for money.  If the demand for money is high, then this will be the equivalent of a deflationary force.  Another way of saying this is that the velocity of money is low.  This means that money changes hands less frequently, and therefore does not bid up prices as fast.  The high demand for money can offset some of the monetary inflation trying to push prices higher.

It could be that people are finally getting over the financial crisis from nearly 10 years ago and have more confidence in spending money.  Therefore, we could be seeing a slight pickup in velocity (a reduced demand for money), despite the current monetary deflation.

The productivity of an economy can also impact prices, but I don’t think that is playing a big factor either way today.  If the money supply were held constant over a long period of time, we would expect to see prices fall very gradually over time as productivity increases.  You would have the same number of dollars (or whatever kind of money) chasing a larger portion of goods and services.

Since there are so many factors going into consumer prices, it should not be surprising that there is currently a slight disconnect between consumer prices and the Fed’s balance sheet (the base money supply).

Still, we should not expect this to continue for a really long period of time.  While some gains in the last decade in productivity are real and sustainable, I do believe that part of it is also unsustainable.  The Fed’s easy money policy from 2008 to 2014 misallocated resources that still need to be corrected.

As the monetary deflation takes its effects, these malinvestments will be exposed.  I expect stock prices to be hit hard at some point, and I expect a major correction.  When this happens, it will not be surprising to see price inflation expectations fall, at least until the Fed comes in with another round of massive money creation to start the whole cycle over again.

Sometimes we forget to take a step back and look at the big picture.  This can happen in our personal lives, but it can also happen when looking at the world around us.

Libertarians in particular tend to be pessimistic.  The large majority of articles focus on the infringement of our liberties by the government.  There is only a small percentage of libertarian articles that focus on the net gains for liberty, or are just optimistic in nature.

It is true that the U.S. empire continues its attempts to expand.  It is true that the surveillance state has grown with technology that has allowed the government to perform mass spying.  It is true that we live in a litigious society where bakery owners can get sued for not associating with gay people who want a wedding cake.  It is true that we live under an administrative state with tens of thousands of pages of bureaucratic regulations.  It is true that the national debt goes much higher every year.

With all of that said, we still need to step back even further and look at the whole picture.  The U.S. empire cannot dominate as it did during the world wars, as it faces guerrilla warfare and social resistance from other nations.

The surveillance state may have grown, but technology has allowed the massive decentralization of communication.  It has also enabled us to record things in public just by carrying around a smartphone.  That is the reason we see so many instances of abuse by police.

We may have a litigious society, and we do not have full freedom of association, but even here technology is minimizing the impacts and will continue to do so.  People can do business across the world and mostly avoid government meddling.

The same goes for the massive number of regulations.  Although they are burdensome and hamper our economy, actors in the marketplace are always innovating ways to get around the regulations.  Again, technology plays a major role here.

And with the national debt, this will eventually be “solved” by economic realities.  If interest rates spike and the government is essentially forced to dramatically cut spending, we will benefit greatly in the long term, even if there is short-term pain.

Technology, coupled with the somewhat free market, is changing everything, even if we don’t recognize it day-to-day.  Email has already made it clear that the Post Office is unnecessary.  And if you need to mail something, there is no reason you can’t use FedEx or UPS or some other carrier.

Even in regards to the disastrous education system, we now have private schools and homeschooling as legitimate alternatives.  Homeschooling parents could essentially put together a free curriculum using YouTube videos and other sources on the internet, as long as they have a computer (or tablet) and an internet connection.

We should also recognize that, despite the politically correct world we live in, we are actually a more tolerant society than what existed before.  Most people believe in individual rights at least in the sense that individuals should be treated equally before the law, regardless of race, religion, ethnicity, gender, sexual orientation, etc.  I know there are many exceptions here, but consider that we mostly have free speech.  During Lincoln’s war in the 19th century, people were locked up for expressing dissent, including journalists and politicians.  And it was just in the 1940s when Roosevelt rounded up Japanese-Americans and others and essentially kidnapped them just because of their ethnicity.

If you look at living standards, the last 100 years have seen the greatest improvement ever in terms of people around the world getting out of extreme poverty.  The majority of people on this planet actually have access to relatively clean water and food now.  They also have access to smartphones.

While the welfare state has grown in the West to a certain extent, we also have to recognize the collapse of communism.  The Soviet Union died in 1991.  The Russian people are far better off now, and the former Soviet satellites that are now independent nations are mostly better off.  This amazingly happened very suddenly and with virtually no violence.

China is still communist in name, but it now resembles more of a Keynesian/ mercantilist command economy than an actual communist economy.  The Chinese people are better off for it.  They would be even better off if they had a more free market system, but at least there are now hundreds of millions of people who have been able to leave the rural areas of extreme poverty.

And now, in 2018, it looks like the Korean War is finally coming to an end after nearly 7 decades.  There has been an armistice since 1953, but the war never officially ended.  We may soon see denuclearization, and we can hope for the eventual withdrawal of American troops.  It is possible things could reverse back, but the signs are promising.  What looked like an escalation a few months ago has now turned into peace.

And if North Korea and South Korea join together, you can bet which one will have a greater influence on the other.  As libertarians, we usually favor decentralization.  But in this case, the combining of the two states will likely lead to an increase in liberty.  North Korea is really the last and closest thing to communism, and that is about to end.  The South Koreans are not going to give up their improved living standards to live under a communist regime.  If anything, the North will free up its economy.

In conclusion, there are always going to be ups and downs for liberty.  But we should recognize that we are getting gains in liberty if we step back and look at the big picture.  It is easy to call attention to the times when government grows and liberty wanes, but we don’t always see the net gains in liberty.  We don’t always see the idea of free markets spreading through the world.  We don’t always appreciate that technology can slowly replace and crowd out state interference.

Whether you are a young adult just starting out on your own in the world, or a middle-aged person with little in the way of savings, my advice applies here.  And even if you have a significant net worth, I hope this post helps you.

In terms of personal finance, a lot of people just don’t know where to start.  Too many people get bad advice, or read an article thinking they can get rich quick if they just put all of their money in this one investment.

For someone starting out, my advice is to save $10,000 and to keep it liquid.  By liquid, I mean that it should be in cash and/ or in a bank.  It can be in a checking account or a money market fund that pays 0.01% interest.  It is important to keep this money there unless it is needed for an emergency.

If you want to invest in gold coins, you should first have $10,000 in the bank and not use any of this for the purchase of gold coins.  If you want to trade stocks, you should first have $10,000 in the bank and not use any of this for your brokerage account.

If you want to buy real estate (whether to invest in or live in), you should first have $10,000 in the bank.  Then you should get another $10,000 in the bank.  Then you should save up what you need for a down payment and closing costs.  The second $10,000 you saved should act as a reserve fund for unexpected (which are really expected) expenses.

The prepping community has grown large, but I wonder how many of these preppers have $10,000 in the bank.  Because even in a crisis, money is one of the best things to have on hand.  In certain situations, maybe food would be better.  If you want to be prepared and buy a few hundred dollars worth of food, make sure it is something that you will eat even if there is no disaster.

I am not against being prepared for unexpected events.  But it baffles me when people prepare for highly unlikely events.  And even if those events did happen, their preparations probably wouldn’t get them that far anyway.  In most situations, having money on hand will help you in a lot (not all) difficult situations.  There is an argument to be made to have some cash on hand for certain scenarios (as opposed to it all being in the bank).

I am a libertarian, but it never ceases to amaze me how many other libertarians there are who are really irrational when it comes to personal finance.  They might think hyperinflation is right around the corner, and they prepare themselves for something that is highly unlikely to happen any time soon.

I advocate a permanent portfolio.  Within that, I advocate owning gold and gold-related investments.  But I still think it is best to have $10,000 in liquid funds before going the route of the permanent portfolio.

While I am fully aware of inflation and the depreciation of the dollar, I don’t think we should shoot ourselves in the collective feet by worrying about a 2% loss in value each year.  (If price inflation picks up, then the interest rate on your money market fund will likely increase as well.)  Having available liquid funds is far more important than having a portfolio of inflation hedges.  It makes sense to have money that can be exchanged for goods and services.  It also makes for less stress.  If you do have an emergency, then at least you don’t have to scramble as much.

I think everyone’s financial goal should be to first save $10,000 in liquid funds.  It is a buffer in life.  It may not be the top piece of financial advice I can give.  Probably the best advice for someone young is to make sure they marry the right person.  But after that, the advice of saving $10,000 is at or near the top.

About half of Americans have very little money saved, if any at all.  It makes it stressful to go through life in this condition.  It is never fun to get hit with an unexpected expense (which, again, are often really expected expenses).  But there is a difference between “My car needs an expensive repair and I don’t know how I am going to pay to fix it” and “My car needs an expensive repair, so unfortunately I will have to tap into some of my reserve funds to pay for it”.

If you have the money in the bank, then an unexpected expense that comes up isn’t as bad.  You aren’t happy about it, but it doesn’t have to keep you up at night.

This is really the biggest reason to have liquid funds.  It means less stress.  It also enables you to focus on the longer-term picture in life. It also enables you to take advantage of discounts, such as paying for insurance all at once, instead of a higher monthly premium.  It also enables you to take advantage of unexpected opportunities. On this last point though, you do have to be cautious not to waste your money.

In conclusion, if money is a stress for you, then find a way to save up $10,000 in the bank.  Do what it takes (reasonably speaking), as long as you are not neglecting your family or your health.

With all of the personal finance advice this world has to offer, sometimes it is easy to overlook the basics.  You should have $10,000 saved up, even if you aren’t earning any interest or passive income from it.  The earnings will come in the form of less stress.

The U.S. government has been trying to overthrow the Syrian government since at least 2011.  The Obama administration attempted to go to war in 2013, but was rejected by the American people.

When John Kerry said at a news conference that there was nothing Assad could do to avoid war other than give up his weapons, Putin stepped in and took advantage of Kerry’s flippant comment.  He brokered a deal to track Assad’s weaponry in exchange for avoiding war.  Russia does not want the Assad regime to go down, as it would just further destabilize the region.

The Obama administration went ahead with the war anyway, but just in a more covert way.  Even though there was no congressional declaration of war (or even approval in this case), that has not stopped presidents from going to war for many decades.

Assad has been accused of using chemical weapons against civilians on multiple occasions as an excuse for U.S. bomb dropping.  There has been little to no evidence that Assad is guilty of using these chemical weapons.  If anything happened, it was likely his opposition in Syria who were trying to frame him.  Worse, it is possible that the U.S. government and/ or other governments (such as the U.K.) were involved in the framing.  Whenever the U.S. and U.K. see that Assad is holding or gaining power in Syria, there is conveniently a chemical weapons attack supposedly perpetrated by Assad.

The recent missile attacks by the U.S. against Syria could have been much worse if not for a guy nicknamed Mad Dog keeping the crazies inside the Trump administration in check.

Bashar al-Assad is the son of Hafez al-Assad, who was president of Syria from 1971 to 2000.  Bashar al-Assad went to medical school and then went on to specialize in ophthalmology at the Western Eye Hospital in London.  He only was called  back to Syria in the mid 1990s to become the heir apparent of his father after Assad’s older brother died in a car accident.

While this does not mean that Assad does not crave political power, it is obvious that his original intentions were not to be an overtly political figure.  Most people seeking political power when they are young do not become an eye doctor.

Assad was mostly praised by the Western media in previous decades.  Diane Sawyer interviewed him and had nice things to say about him.  There are pictures of John Kerry dining with Assad and their respective spouses before Kerry turned on him as part of the Obama administration.

Assad got on the naughty list of the U.S. establishment, and now he is called an animal, a terrorist, and almost everything else nasty that can think of.  Of course, we almost never hear these terms used against U.S. politicians.  If they are used against Trump, it isn’t because he dropped bombs on innocent people.  It is because he sent out a rude tweet.

Syria has been one of the few places in the Middle East where Christianity was allowed to thrive.  Incidentally, Iraq was another place where Christianity thrived up until the U.S. invasion.  Christianity is also tolerated in Iran.  For some reason, the U.S. government, with the support of a majority of self-identified Christian Americans, like to overthrow secular dictators and eliminate the Christian populations in these places.  Meanwhile, Saudi Arabia gets U.S. support.

It really is odd.  It just shows the irrationality that has prevailed with the out-of-control U.S. empire.  It’s bad enough that there is so much U.S. interventionism when it comes to foreign policy.  But the policies themselves are completely irrational.  We don’t even know which side we are on half the time.  Many times, we (meaning the U.S. government) are playing both sides.

I think Assad is probably one of the least bad people when it comes to dictators.  He may be one of the least bad people amongst all political leadership in the world.  He has actually tried to keep Syria together by protecting innocent people who have been terrorized by the thugs that have invaded the country due to the U.S. war in Iraq and the attempted overthrow of the Syrian government by the U.S. establishment.

Any crimes committed by the Assad regime pale in comparison to the crimes of U.S. presidents and those who surround them.

As usual, political tensions are running high in the world.  They are particularly high right now given the U.S. government’s antagonism towards China and Russia.

With China, the issue in the news has been tariffs and trade wars.  Tariffs are nothing new.  Trump’s predecessors (Bush and Obama) both enacted tariffs.  They just didn’t call great attention to them.  Bush and Obama were paying off the lobbyists and wanted to do it quietly.  They could impose protectionist tariffs to benefit certain industries without any strong words to go along with it.

In Trump’s case, he wants the tariffs to be known.  His bad knowledge of economics, coupled with his desire to look tough and look like a negotiator, makes Trump call attention to his tariffs.  And since most of the entire establishment media hates Trump, they will oppose Trump on his policies, even if it contradicts previous things they promoted.  All of a sudden, some in the media became advocates of free trade.

The economic consequences of the Trump tariffs are real, but they were also real under Bush and Obama.  It is mostly words that make these tariffs different.  I don’t expect a full-blown trade war, as it is in neither country’s interests.  Chinese officials are mercantilists, and they want to continue to subsidize their export industry at the expense of the Chinese people as a whole.  They do not want to get into a major trade war with the United States.

The situation with Russia is much more serious.  The U.S. government has dropped bombs on Syria and has been trying to overthrow the Assad regime for quite some time.  We cannot believe anything we are told by the U.S. establishment media, as they help spread the lies and propaganda.  It is usually more propaganda than lies, but in the last few weeks, I believe the media in many cases is just outright lying.  This is especially the case regarding chemical weapons use in Syria and almost anything to do with Russia.

The war hawks, who almost always advocate war in any situation, think that Russia will never react in a forceful way.  Perhaps they are right, but we don’t really want to find out.  It is not good to play games with another country when both sides are capable of destroying the entire planet with nuclear weapons.

Russia has actually showed amazing restraint up to this point.  For all of the talk about Putin being evil, I think people need to step back and look at his interests and the interests of the people in Russia.

Putin is a nationalist.  Trump campaigned as a nationalist, but now he is under the thumb of the deep state and the war propagandists.  Putin is not interested in taking over the world, or if he is, he realizes that it is not going to happen.  I believe he wants good relations with the United States, but the U.S. government is making it impossible to happen.  Putin wants the U.S. empire to stop spreading closer and closer to Russian borders.  He also wants the total chaos, which is close to home, to stop.  The U.S. continues to destabilize the Middle East, and now it has done so in Syria.  Putin, and most Russian people, want to see stability in the region.  Assad provides some stability, and he also allows Christianity to flourish in Syria.  The U.S., for some reason, likes to overthrow secular heads of state and cause total chaos and destruction.

Like much of the rest of the world, I assume that most of the Russian people do not like the policies of the U.S. government, particularly when it comes to foreign policy.  On the other hand, they would like to emulate parts of American culture and enjoy the same high living standards.

Most people don’t want war.  The U.S. government gets away with it because of American apathy.  It is easy for some American to say in a poll that we should bomb Syria.  It probably won’t impact him at all, except for the small hidden monetary costs.

If you are skeptical about China and Russia, I will tell you definitively how we can be certain that they do not want war with the U.S.   Aside from not wanting to end life on the planet, they have economic interests in maintaining some relations.

The U.S. Treasury publishes each month a report of the major foreign holders of Treasury securities.  In other words, it shows which countries and their central banks hold U.S. government debt.

The latest update was published on April 16, 2018.  China is still the number one holder of U.S. debt.  From February 2017 to February 2018, China’s holdings actually went up.

And while Russia’s holdings are small in comparison to China, even its holdings have stayed relatively stable.  Its holdings went up in early 2017 and then declined later in the year.  But year-over-year, its holdings are up slightly.  We’ll see in a couple of months if anything changed in March and April, but it is doubtful that it will be significant.

If China and/ or Russia really wanted to make trouble for Washington DC, it would sell all of their Treasury holdings.  If Russia did it, it might not have that big of an impact.  But even the announcement of a sale of almost $100 billion of U.S. debt into the market would have its effects.  Interest rates would likely move up in response.

If China announced that it would begin selling U.S. debt, this would really trigger a major economic event.  Yields would likely spike, and the Fed would be faced with a massive selloff of Treasuries when it has already adopted a policy of mild monetary deflation.

If China ever makes an announcement, even of a mild selloff of U.S. debt, then you will know things have gotten serious.  Until then, I think it is mostly talk with the Chinese.

The situation with Russia is obviously more serious because there are fingers on triggers, and these are not metaphorical economic triggers.  They are triggers that actually kill people and could blow up the planet.  Again, all indications show that Russia wants to avoid any kind of war with the United States, but it is always a risky situation when the U.S. government keeps poking sticks at Putin and company.  You never know when they might poke too hard.

April 15, which is tax day in the United States, is a good time of year to remind people just how much they are paying for government.  In 2018, the tax filing deadline for the 2017 federal tax return is on April 17, 2018.  This is because April 15 is on a Sunday, and, believe it or not, Monday is considered to be a holiday.

There is a major problem though with just focusing on the tax filing deadline day and federal income taxes in particular.  The first major problem is that nearly half of Americans don’t actually owe anything in federal income taxes each year, so it is not that big of a deal to them.  In fact, many Americans look forward to April (or earlier) when they can get their tax refund.  They often don’t consider the money that has already been taken out of their paycheck.

The second major problem with just focusing on federal income taxes is that it does not account for all of the other federal taxes we pay.  Your income tax returns take payroll taxes into account, but for most people with a W-2, the payroll taxes are not a factor on their tax return.  It becomes a major factor for people who are considered self-employed and owe both the employee and employer portion, which is 15.3% before getting hit with regular income taxes.

Of course, the federal income tax does not account for the many other taxes that we pay such as corporate taxes, excise taxes, fees, and tariffs.  Many of these taxes we do not pay for directly, but we end up paying for them indirectly through lower wages, higher prices, and fewer consumer choices.  We also do directly pay many taxes including on such things as gasoline, hotels, cell phones, and cable.  An inclusive list would be hundreds of items long.

The third major problem with just focusing on federal income taxes is that it ignores state and local taxes.  Many people do get hit with a state income tax, but property taxes and sales taxes take a huge chunk out of people’s wallets.  You are also faced with many of the same excise taxes as from the federal level.  While libertarians favor decentralization, state and local governments still take out a huge piece out of the average American family’s budget.

The fourth major problem with just focusing on federal income taxes is that it doesn’t account for the other costs of government: mainly, regulation, inflation, and debt.  The regulation aspect is impossible to calculate, but we can factor in inflation and debt by looking at government spending (instead of government tax collections).

Government spending is the real level of taxation, as its spending is consuming (and mostly misallocating) resources.  If the government borrows $100 billion to spend on a new government program, this money is being consumed for the sake of the new government program.  It otherwise would have been spent, or saved, or invested, by a private party.  It would have been subject to consumer demand in the marketplace.  If capital is invested in a project that produces losses, then it will eventually be reallocated to a better use.  This is not so with government spending.  Even with government transfers, it is a misallocation and a deterrent to productivity.

The tax filing deadline is a good opportunity to bring up the subject of taxation and government spending, but we should not just focus on federal income taxes.

I think libertarians often miss the opportunity to show people just how expensive government is.  You can focus all day long on an unfair tax (aren’t they all?), and you can focus on government boondoggles.  But this still does not give people a sense of just how much they are paying.

Sometimes we need to step back and look at the big picture.  Sometimes we just need to point out the math to people, especially those who are advocating for even more government spending and more taxation.

Terence Jeffrey is a fiscal conservative who is good at stepping back and looking at the big picture.  Here is one such article from 2014 in which he points out that total government spending at all levels exceeded the median family income.

According to this website, for FY 2018, total U.S. government spending is estimated to be $7.13 trillion.  That is $4.17 trillion of federal spending, $1.82 trillion in state spending, and $1.86 trillion in local spending.  You have to take out about $0.7 trillion in intergovernmental transfers for the numbers to add up because you can’t count it twice if one level of government hands money over to another level of government to be spent.

There are currently about 126 million American households.  The estimates can vary a little, but this seems to be close enough to accurate for our purpose here.

This means that, on average, each American household is paying over $56,000 for the cost of government (not including regulation).  That is every year.  You can do the math on your own.  Take 7.13 trillion divided by 126 million.  If your calculator doesn’t hold that many digits, you may have to take off some zeros from each set of numbers to make it work.

All I had to do to come up with that number is use a search engine for a couple of numbers, and then do some basic math.  Most people are capable of doing this, but they don’t.  Ask people how much they think the average American family pays for the cost of government.  See if they can get in the same ballpark as that number of $56,000 and change.

This is especially important when you are communicating with someone who is advocating another government spending program or increased spending on some program.  Ask the person this question.  After you tell them the answer, ask how much more the average American family should pay each and every year.  Should it be $70,000 per year towards government at all levels?

Also, get people to imagine what they would do with this money.  Imagine if government at all levels were cut in half.  Sure, there are some government programs in which you would lose out on and maybe have to make up the difference.  But if government were cut in half , then the average household would have an extra $28,000 each year at their own discretion.  That is more than some people make in a year, even with full-time work.

Even for a family already making $80,000 per year (before income taxes), an extra $28,000 per year is a huge sum of money.

What would you do with an extra $28,000 per year?  Even if it were “only” $20,000 per year, what would you do with it?

Would you take your family on a dream vacation that you thought was never possible to afford?  Would you put away extra money for retirement?  Would you set up that emergency fund that you could never quite get to?  Would you donate some of it to your favorite charity?  Would you have one parent stay at home with the kids instead of having to send them off to daycare?  Would you use the money to buy a nicer house?  Would you use the money to help a friend or relative in need?

Maybe you would use the extra money for a combination of many of these types of things.

Even if many seemingly critical government programs were cut, would we really be worse off?  If every American family had an extra $28,000 at their disposal each year, then they wouldn’t need government help.  In addition, you would see much greater charity than what already exists, as American families would all of a sudden have extra money at the margin.

These do not even have to be libertarian arguments, but they are arguments that libertarians should utilize.  If all levels of government were cut in half, government would still be way too big.  We would still be very far away from anything resembling minarchism.  Yet, a cut in half would be a dramatic improvement in our lives.  Our living standards would explode.  Remember, this is $28,000 per year.  You could take that dream family vacation one year, and then save the entire $28,000 the next year for retirement.

In conclusion, tax filing day is good for a discussion on taxes and government spending.  But libertarians, and even just fiscal conservatives, should push the discussion towards the total cost of government.  The total cost is almost unbelievable.  It is actually amazing that our living standards are as high as they are, in spite of government spending.

Donald Trump, after his historic campaign in defying the establishment and going against conventional wisdom, is now being all too conventional.  He is listening to all of the wrong people.

It is amazing that Trump has hired the very people who opposed his candidacy and almost everything it stood for.  Nikki Haley, who endorsed Marco Rubio, and then Ted Cruz, is the U.S. Ambassador to the United Nations under the Trump administration.  She loves war and putting out propaganda to go to war.  John Bolton, one of the most despicable human beings in existence, is now Trump’s National Security Advisor.

During Trump’s campaign, Trump said that we were lied into war in Iraq.  He said this in South Carolina.  If any other Republican had said such a thing just 4 years earlier, let alone 8 years earlier, they would have had no chance at winning the Republican nomination.  Meanwhile, Bolton – one of the biggest hawks in favor of the Iraq War – is now advising Trump on foreign policy.

And despite the some pro war rhetoric from Rex Tillerson as Secretary of State, I previously said that he was about as good as we could have hoped for, given the circumstances.  So, of course, Trump had to get rid of him and put in someone more pro war.

Trump is having this ongoing internal struggle.  He wants to get along with Putin and Russia and cool down tensions.  But the anti-Trump media keeps hammering him on Russia and basically just making things up.  Therefore, Trump doesn’t want to appear to be in the back pocket of Putin.  Because if you aren’t promoting tension and war with Russia, then you must be an appeaser or Putin’s puppet (sarcasm noted).

Trump said the other day that he wants the U.S. military completely out of Syria.  Within a matter of days (or maybe hours), Trump seemingly reversed his position.  He listens to his war generals and other advisors who inform him that he has to make an adult decision and not destabilize the area (even though it is the U.S. government’s presence there that has destabilized everything).

Trump has shown great weakness in all of this.  Despite his many moral shortcomings, I still have hope that there is some good in Trump and that he means well.  I do not have this opinion of Bush and Obama (his predecessors).  They both also campaigned on a more peaceful foreign policy and did the opposite.  Bush did this in 2000, preaching a more humble foreign policy.

But Bush and Obama are both politicians.  They are both liars.  They are both evil people and have little regard for human life.  In Trump, I at least have a little bit of hope that he has some good in him.

Unfortunately, Trump has little in the way of principles.  His only principle is to continually stroke his own ego.  Trump is also in over his head.  I think he knows this by now, but I’m not sure.

Trump has very good instincts in marketing and branding (Lyin’ Ted, Lil’ Marco, Low Energy Jeb, Sloppy Steve, Pocahontas, and Crooked Hillary).  However, this does not transfer over to having good instincts in political office.  He certainly does not have good instincts in who to trust.

I figure there is some strategy in the whole thing in that he wants to get some of the establishment guys in his cabinet so that the Republican establishment will not oppose him (even though they do anyway).  You better believe that if Nikki Haley or John Bolton ever have the opportunity to take down Trump and promote Mike Pence without making themselves look bad, then they will do it in a heartbeat.

I have previously made comparisons between John F. Kennedy and Donald Trump.  I know this bugs the leftists of this world, but there really are a lot of similarities.  Both have/ had their moral shortcomings, but both also were anti-establishment.  They both had instincts in opposing war and getting along with other countries.

The one major difference is that the media was not hostile towards Kennedy to the degree that it has been against Trump.  Kennedy’s enemies kept more quiet and did not expose their agenda as much.  With Trump, the media cannot hide its hatred, and the television pundits try so hard to take him down that they overplay their hands.

While Trump has only been in office for just over a year, the other major difference between Trump and Kennedy seems to be that Trump is more willing to play ball with the establishment.  Kennedy certainly did in some respects, but he opposed the establishment in the most serious arenas – national intelligence and foreign policy.  Kennedy did not want an escalation in Vietnam or the Cold War.  He also said he wanted to tear up the CIA into a thousand pieces.

Trump has been far more wishy-washy.  Johnson and the rest of the establishment knew they could only bend Kennedy so much and feared his pivot towards peace.  Their only solution to the “problem” was assassination.

Trump has been more easily bendable in these critical areas.  He is still a loose cannon, and nobody knows what he is going to say from one day (or one hour) to the next.  Since the establishment thinks they can control Trump in most circumstances, they can somewhat tolerate him for now.  So far, they have been mostly correct in that they have controlled him.  We have not seen a major pullout of troops from the Middle East.

I would rather see someone like Trump who is inconsistent, rather than someone who is consistently pro war.  Still, it is disappointing, though not surprising, that Trump has not been more firm in opposing further interventions overseas.

The left accuses Trump of a lot of things.  They accuse him of being brash and being a bully.  They accuse him of not caring enough and being a loose cannon.  Unfortunately, this is not all that true when it comes to his opposition to the swamp.  He is too weak.  He cares too much what other people think.  He is a loose cannon in the sense that he listens to the establishment too much.  He too often forgets about the silent people who supported him in hopes that he would be tough and oppose the swamp.

The saying for the month of March is “in like a lion, out like a lamb”.  While this generally refers to the weather, it certainly didn’t apply to the stock market.  It didn’t even work that well this year with the weather, as some places were seeing snow after spring had already arrived.

For 2018, the saying may go, “in like a bull, out like a bear”.  It has been a volatile couple of months, and the first week of April did not see any more calm.  Stock markets were not only volatile from day to day, but extremely volatile within each day.  If you looked at the Dow at 10:00 EST in the morning, it was usually very different by the time the market closed at 4:00 that afternoon.

While it was a mix of up days and down days that mostly equaled out at the end of the week, it is a scary sign for what is ahead.  Higher volatility can often mean that a bigger crash is coming.

It is easy for the financial analysts to point out the growing economy.  The GDP has been positive, and the stock market was booming up until a couple of months ago.  The problem is that this is usually the case before a recession and before a stock market crash.

While the government gets most things wrong, the SEC disclaimer that “past performance is not indicative of future results” is accurate.  Just because the economy seemed to be doing well last year does not mean it will do well this year or next year.

Also, consider that, in the past, when stocks have tanked and gone into a bear market, they were usually up the year before.  When the Nasdaq went crazy in the late 1990s, it didn’t just stop and stay there for a while.  The volatility picked up, and it quickly started its descent.

While interest rates are still historically low, consider that the Fed stopped its monetary inflation in late 2014.  The pumped up stock market that relies on loose money is likely finally getting deflated from 3 and a half years of a relatively stable money supply.  If anything should surprise us, it is that it has taken this long for it to come.

One of the best indicators of recession is the inverted yield curve.  This is when long-term rates fall below short-term rates.  This has yet to take place.  This still makes me a little cautious about predicting an imminent recession.  At the same time, nearly everything has seemed to be unprecedented since the fall of 2008.  Maybe this time will be different and we will see a recession without an inverted yield curve.  Short-term rates are still very low by historical standards, so it makes it more difficult to get a flat or inverted yield curve.

It is also possible that we could see a bear market in stocks without actually seeing an official recession.  I find this scenario hard to believe, but it is technically possible.  We saw oil prices come crashing down in 2014 and 2015 without any kind of recession.  But it is hard to shake the feeling that stocks are tied to the economy more, at least in terms of this artificial boom.  It would be hard to imagine a major bubble in stocks popping without seeing GDP turn negative.  It is generally hard to deflate one bubble at a time, especially when that bubble is in such a huge arena.

Housing and stocks were both in a huge bubble in 2007.  The crash in housing had a bigger impact in terms of unemployment and living standards.  This time around, stocks are probably in a bigger bubble, but we should still expect housing prices to fall.  There are some regions with a massive housing bubble, but nationwide, I think the bubble in housing is less than it was over a decade ago.

I want to be clear that we should not necessarily hope against recession.  A recession is a liquidation of the bad investments that sprung up off of the loose money and artificially low interest rates.  It is a correction.  It is an attempt to realign resources in accordance with consumer demand, if the central bank and government will allow this realignment to fully take place.

The malinvestment has already occurred.  The best we can hope for is a quick liquidation of the malinvestment.  We need resources allocated in accordance with consumer demand.  This is what will create real wealth that is a priority for consumers.  This wealth generation is what raises our living standards.

In conclusion, you should fear the volatility in the sense that a bear market in stocks is getting closer.  And if we get an official bear market in stocks, we should expect a recession with it.  You should make your plans accordingly.

If you own stocks, ask yourself whether you would buy those stocks today if you didn’t own them.  That should tell you whether or not to sell, or how much to sell.

This high volatility is a gift to those paying attention who own stocks.  It is a chance to get off the train, or at least lighten the load, before it goes off the tracks.