CNBC’s Rick Santelli Looks at the Latest US Debt Ceiling Increase and its Scary

Andys RantWith the political discussion of late largely focusing on the GOP primary and income inequality chastised by “the ninety-nine per cent occuytards,” many US media commentators have seemed to have forgotten the mounting US debt that will weigh heavy on the backs of each and every American. The US Senate on Thursday voted to allow President Barack Obama to increase the debt ceiling by $1.2 trillion (that’s $1,200,000,000,000.00) to ensure that the federal government can pay its bills through the November elections.

Rick Santelli hasn’t forgotten, and he’s quantified just how much each person will be on the hook for with the latest rise in the debt ceiling.


  

The new US debt ceiling is now at $16.4 trillion or $52,409 per American (312 million Americans).

Australian media commentators have also seemed to have forgotten about the mounting Australian debt that will also weigh heavy on the backs of each and every Australian. The rainbow Gillard government last year passed a series of budget measures including raising Australia’s debt ceiling to $250 billion (that’s $250,000,000,000.00). The move came as the Gillard government's gross debt is forecast to rise to A$239.1 billion in 2013-14.

The new Australian debt ceiling is now at $250 billion or $10,956 per Australian (23 million Australians). 

 

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Has Politics Finally Moved Beyond The Personal?

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Menzies House Managing Editor Timothy Andrews gives us his take on the SMH question:

The other day I came accross the fact that the Sydney Morning Herald's "The Question"section the springboarded off the meteoric rise of Newt Gingrich, who has had his fair share of personal baggage, to ask whether politics has finally moved beyond the personal. 

With my background in U.S. politics, and my personal intest in the personal/political divine, I thought I ought pen an answer, sticking to the 400 word limit set for published pieces. I should note that I penned this prior to reading any of the published pieces, hence any similarities to Menzies House Contributor and IPA All-Star James Paterson's piece are purely coincedental.

So here goes:

Newt Gingrich’s political resurgence can be traced directly to one event last Thursday: the South Carolina GOP Primary debate.

When CNN’s John King led the debate by asking Newt to respond to allegations that he asked his second wife for an ‘open marriage’, Newt’s response – a scathing indictment of the “elite media” – propelled him to the lead; a remarkable 20 point turnaround in the polls almost overnight.

Part of this was no doubt a backlash of conservative outrage at perceived ‘liberal media bias’; a reaction to the view that the media who refused to cover numerous Democratic improprieties, choose to focus upon Newt only as he is a Republican. Added to this was the redemption narrative that Newts sins were long passed and he had sought absolution, and the obvious desperation of the Republican base for a candidate who is neither a moderate flip-flopper, nor certifiably insane.

Yet beneath this lies a very simple truth. At a time when U.S. unemployment is at record highs, and Americans are struggling just to get by, long-gone personal indiscretions are the least of anyone’s worries.

This US election is squarely about the economy. The US Government is $15 trillion in debt, budget deficits are projected to remain for decades, and the Democrat-controlled Senate hasn’t passed a budget in over 1000 days. These are the real issues. But sex sells.

Affairs make better copy than economic analysis, and the media, rather than focus on the matters of substance, continue to frontpage tawdry tales of lust and love.

But at a time of economic crisis, the country who forgave Bill Clinton has wearied of such antics. And in an age where the internet is rapidly heralding the death of privacy, and the flaws and failings of our friends are open for all to see, their effect has worn off, and informed voters have become inured.

Character certainly matters in politics, and cases of hypocrisy remain relevant. However this is a far cry from using scandal to substitute distract from real issues, creating an environment when only the most spin-obsessed hollow men devoid of substance or character can survive, and the days of Trial by Media Feeding Frenzy are nearing an end. Yellow journalism is ill for any democracy that relies on an informed populace, and the public’s rejection of such tactics is a welcome relief, and a sign of things to come.

Politics has moved beyond the personal. The media just hasn’t gotten the memo. 

Obviously I am not predicting that Mr. Gingrich will win the Florida primary, let alone the elction; my comments are simply limited to the bump he received. Sill, I think said bump is a telling point…

Also, I ought note that I did try to limit myself to the SMH 400 word limit guideline, so I didn't have the chance to speak about David Campbell, Della Bosca etc… perhaps another time…

Tim Andrews is the Managing Editor of Menzies House. 

The Australian: Tent Embassy Is Illegal

The Australian reports:

THE Aboriginal tent embassy does not comply with regulations governing protests on commonwealth land in the ACT, but has been given a special exemption by both the federal government and the National Capital Authority.

Established in 1988, the NCA is responsible for management of the parliamentary zone and protests that take place on commonwealth land.

The authority confirmed yesterday the tent embassy did not provide protest applications, which were required for other protests such as the anti-carbon rallies.

Nor has the NCA received a works proposal from the tent embassy, despite the fact other protest groups must submit applications for the establishment of temporary structures such as marquees […]

NCA guidelines for protests clearly show that applications are required for the staging of events within the parliamentary triangle, which stretches from Parliament House, across the central basin of Lake Burley Griffin and down Anzac Parade to the War Memorial. Any works proposals require approval from the NCA under the Australian Capital Territory Act of 1988.

The guidelines also state that no "long-term or permanent structures" will be approved, with a general maximum limit of three days. Camping structures, including tents, are not allowed between sunset and sunrise, and fires are not allowed to be lit on the ground.

"We don't undertake enforcement action in relation to structures at the embassy," Mr Rake said.

 

 

 

The Politics of Currency Manipulation

 

CW

Christopher Whittaker argues that the U.S's failure to act upon China's currency 'manipulation' is of severe detriment to the U.S. and world economies:

 In an obvious display of double standards the US Treasury has recently failed to label China as a currency manipulator but chided Japan for attempting to halt the Yen’s rise. The Obama administration’s failure to acknowledge China’s blatant currency manipulation highlights the sensitive diplomatic relationship between the two countries and the growing soft power of China.

US Report on Currency Manipulation

In late December the US Treasury released it’s Report to Congress on International Economic and Exchange Rate Policies. As usual, the Treasury stated that the US laws covering a designation of currency manipulator ‘have not been met with respect to China.’ The report simply states that the current appreciation of the Chinese currency (known as the renminbi or yuan) is ‘insufficient’.

Conversely the report blasts Japan, which unilaterally sold Yen twice in the foreign exchange market in August and October. These sales were conducted when currency exchange markets were operating in an orderly manner. The US rightly did not support these interventions. Japanese authorities need to radically improve the competitiveness of Japanese industry to kick-start growth, not artificially manipulate currency values.

Defining currency market ‘manipulation’ is a tricky business. A commonly accepted definition is that manipulation involves intentional interference with the forces of genuine supply and demand. This problematic definition suggests that manipulation involves a value judgment based on the ‘genuineness’ or legitimacy of the transaction.

It is important to recognize that no national Government has clean hands on this issue. Last year the G-7 countries stepped into currency markets in an effort to stabilize the Yen following the devastating economic consequences of the March Tsunami. While this involved creating an artificial stabilized price contrary to market forces, the US Treasury did not label it as manipulation as markets were apparently acting ‘disorderly’. Conversely Japan’s later incursions were slammed as illegitimate manipulation as markets were one again ‘orderly’. The problem with this type of Keynesian economics is that it applies arbitrary categories like ‘disorderly’ to justify Government sanctioned manipulation. A manipulation-free currency market is the best instrument to enable an economy to adjust to new challenges. Government should play by its own rules.

 

Economic Truth or Real Politic?

What makes the Treasury report so insightful is that diplomacy appears to have overtaken reality.  Fear of a negative Chinese diplomatic reaction to the label of ‘manipulator’ appears to have spooked the Obama administration. That and maybe the fact that China holds $1,134 billion of US treasury instruments.

Treasury Secretary Timothy Geithner has said that the report is a poor tool to push Bejing to free the renminbi from state control. If the U.S. Treasury officially finds a country is manipulating its currency under current law, it must launch bilateral talks and take China to the International Monetary Fund for a scolding. The US prefers to argue for change forums like the recent APEC summit in Honolulu. There President Obama took the unusual step of accusing China of ‘currency manipulation’ but added a caveat that he would leave it to Treasury to determine the official designation. The Treasury report’s failure to use the word ‘manipulation’ has overruled the President.

 Diplomatic niceties aside, there can be no doubt that China manipulates its currency. Ever since the Chinese economy was opened up in the 1980s, the renminbi has been systematically undervalued to improve the cost-competitiveness of Chinese exports. The resultant growth rates of the Chinese economy have enabled the People’s Bank of China (PBOC) to obtain a staggering $3.2 trillion in foreign reserves which are used for further manipulation. That’s equal to 54% of China’s 2010 GDP or about US$2,400 for every Chinese citizen.

Some may point to the recent rise of the renminbi (up 7.7% since dropping the peg against the greenback in June 2010) as evidence that the currency is not manipulated. The US Treasury took this and Beijing’s commitment to improve currency flexibility as sufficient conditions not to bring out the manipulator tag. Yet the Peterson Institute for International Economics has estimated that the renminbi remains undervalued by 24% against the US dollar. The US Treasury’s own report included the shocking revelation that despite the recent appreciation of the renminbi, the real effective exchange rate remains persistently misaligned and substantially undervalued having hardly moved since the end of 2001!

It would be a mistake to think that ordinary Chinese households benefit from the Communist Party’s currency manipulation. By denying Chinese households their proper purchasing power, efforts to refocus the Chinese economy onto domestic consumption instead of sluggish global demand for Chinese exports has been frustrated. Further, to sterilize inflationary pressures caused by manipulation, Chinese banks are paying out negative real interest on household savings forcing Chinese households to save even more. By obstructing the rise of the renminbi, the Communist state is depriving China (and the global economy) of the powerful Chinese consumer’s full potential. At a political level, currency manipulation actually impedes the growth a politically assertive middle class in China. Milton Friedman famously claimed that economic freedom leads to political freedom and a free society. China still does not have this first condition.

 What to do about China’s currency manipulation is playing a major role in US politics. The US trade deficit with China continues to reach new heights even with the ‘managed’ rise in the nominal value of renminbi. Last year the US Senate passed a bill that would require the Obama administration to slap penalties on Chinese imports if it failed to adopt market-based exchange rates. While this made no progress in the lower chamber, it demonstrates mounting US frustration at the perceived unlevel playing field currency manipulation creates. While mindful of these concerns, the solution is clearly not tariffs, which create further distortive effects and will ultimately harm the US households. 

 

Econ

 

 Aspiring Republican nominee Mitt Romney has stated that he would declare China a currency manipulator on his first day as President. Further, Romney has shown signs that he would be prepared to take China to the WTO. China’s response to such suit would indicate whether it is prepared to grow up and play by global rules. The former US ambassador to China Jon Huntsman was also prepared to use the ‘m’ word. Huntsman, the former aspirant nominee with the most substantial foreign policy credentials of the republican race, noted that the currency manipulation issue needed to be seen in the wider context. The US needs the Chinese Communist Party’s cooperation in regional security – think North Korea, Iran and Pakistan. That point is an acknowledgement that the US needs China so much right now that it is prepared to deny China’s continued blatant currency manipulation to the detriment of the US, Chinese and global economy.

Clearly, the diplomatic importance of Chinese cooperation on many important international issues has sealed the lips of the US Treasury. One thinks a truly robust international relationship would allow both parties to be honest without jeopardising all they have worked towards. The Obama administration failure to acknowledge the truth has the frightening consequence of tacitly endorsing the Communist State’s deprivation of the purchasing power of 1.3 billion people.

Chris is the Policy Director of the Australian Liberal Students Federation and the Immediate Past President of the University of Wollongong Liberal Club. Chris’s first class honours thesis addressed the regulatory and legal frameworks dealing with financial market manipulation. The views expressed in this article are his own. Footnotes availiable upon request.

Five Bold Predictions for the 2012 Florida GOP Primary

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Menzies House U.S. Politics Editor Amir Iljazi gives a preliminary analysis of the upcoming Florida Primary for the 2012 GOP Nomination.
 

The Florida GOP Primary contest will be held tomorrow and no race could be more crucial. The results could be the deciding factor in how the nomination fight will play out over the next couple of months. This state has been a “game-changer” going back to the 2000 election, and the upcoming vote in the Sunshine State this year will be no different.

Marco Rubio’s decision not to endorse will be validated

Throughout the entire campaign there have been several major political figures whose endorsement have been seen as more than just routine and in some cases “game-changers.” One such coveted endorsement was that of Florida’s Junior Senator and rising Republican star Marco Rubio. He ultimately decided not to endorse in the race preserving a sense of importance, while at the same time being able to comment on the contest without being seen as bias.
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Marco Rubio is on everyone's short-list for VP… even Obama's
No matter what happens Tuesday night, Rubio is still in prime position as a VP prospect (regardless of his statements to the contrary) had he endorsed, there are any number of scenarios that could have played out which may have ultimately caused damage to his prospects (see Nikki Haley).

Rick Santorum and Ron Paul will show why they are not viable

This is not a criticism of the two candidates, it is merely an observation based on what has taken place so far and what will happen in the Florida Primary. Ron Paul and Rick Santorum had strong finishes in Iowa and New Hampshire respectively, but South Carolina was a completely different story. The two gentlemen are taking divergent paths forward but the story will end with the same bottom line: neither man will be the GOP nominee. Paul is already focusing on the Caucuses and will make his move to be a factor during the convention. Santorum, who is having some family-related issues at the moment and I wish him all the best, is slowly appearing to have the gas tank head for empty. The importance of the two men in the race is real… but their chances to be the nominee are in fact non-existent.

Newt Gingrich’s “electability” problem will crystallize in Florida

The vote in South Carolina was a shocker to some since Gingrich had won over so many voter demographics in such a large way that it was almost unreal. That being said, South Carolina wasn’t voting for Newt… they were repudiating Romney and more specifically the vote in New Hampshire and the GOP establishment. The vote in Florida is about to repudiate South Carolina and there is one glaring difference that will make the message from Florida more important that the one in South Carolina: Florida is a swing-state and South Carolina is not.
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Newt Gingrich will press on, regardless of the outcome in Florida
Regardless of who the nominee is, South Carolina will vote for the GOP nominee in November but the same cannot be said of Florida. The way in which Florida is about to vote will show that Gingrich may not be able to appeal beyond states that are just… well, Republican.

Florida will once again get the best of the RNC top brass

The Florida GOP has earned the scorn of the Republican National Committee for the second Presidential election cycle in a row… and they could care less. Florida has flouted the rules committee, which sets up the Primary calendar, by scheduling their Primary contest in January and making it a winner a take all (the others have been proportionally rewarded). As a penalty for these infractions the state has lost half of their total delegates and they have also lost prime seating and hotel reservation priority at the convention. The irony of all of this is that the convention will be held in Tampa, FL! The Florida Primary has become the main focus for the second cycle in a row and may help to clarify a great deal in this race and the state has proven once again that they are an important part of the process and will be equally important when the general election arrives.

Mitt Romney will head into February with massive momentum

Former Massachusetts Governor Mitt Romney appeared to be losing this nomination fight after Newt’s decisive win in South Carolina, but after a few minor strategy changes and quite possibly his best debate performance to date, Romney has surged ahead and will win the Florida Primary by a quite possibly a wider margin than that in which Newt defeated him in South Carolina. Romney took a different tactic this time around and after Newt’s “second surge” he played hardball and bludgeoned the Speaker with ad-after-ad and with the help of several key surrogates the likelihood that Romney doesn’t win Florida is nearly impossible.
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Mitt Romney is looking to make Florida the key to winning the nomination
There is only one debate scheduled for the month of February and the contests are mainly caucuses so the calendar favors Romney; couple that with a decisive win in Florida on Tuesday… and he could be nearly unstoppable from this point forward.

The Florida vote will be held in my state in less than 24 hours and I can honestly say to the readers that I will be participating, but I have not yet made up my mind. I have taken in several factors while trying to decide exactly how I will be voting. We have nothing else on the ballot in my district so I will be making a single decision when I go into the booth on Primary day. I believe that the Florida Primary will be important not only because of the winner-take-all aspect, but because our state is somewhat of a bellwhether state which will be crucial to both parties. We have an important Senate race and no candidate has won the Presidency without our state for the last four Presidential election contests… I am certain that 2012 will follow the trend.

Amir Iljazi is the U.S. Politics Editor of Menzies House. He earned his Master's Degree in Political Science at American University in Washington, D.C. and currently resides in Tampa, Florida. Before relocating back to Florida, he specialized in longitudinal campaign tracking and voter trends for Federal Races nationwide while working for a Washington DC based center-right political advocacy organisation. You may follow him on Twitter@Michi83

How the Illegal Immigration Scam Really Works

Andys RantWondering why we have had 15,000 plus illegal immigrants since the 2007?

It’s because it’s a well organised scam and we’re too stupid to realise we’re being conned.

You see the people smugglers have this awesome product for sale – Australian residency – and to get it all you have to do is hand over your cash, and follow a few basic instructions.

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For a passage to Australia, another popular destination, the smuggler offered an all-expenses-included trip for $11,500. Like others in his trade he recommended Australia, promising it was a soft touch on granting asylum.

“Australia gives citizenship if you have a good story,” he said. “I am 100% sure that after spending six months in a [processing centre] in Australia you will get citizenship if you do not lose your temper and have warning documents from the Taliban saying you can’t live in Kabul.”

He also trains his clients to stick to their story: “They will know you are lying, but as long as you say the same thing whatever they ask you, you will be fine.”

And when they do get intercepted by Australian officials, they discard their passports.

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Of the 3237 asylum-seekers who admitted to flying to Indonesia on a passport, 3200 (98.8%) did not have any travel documents when they arrived in Australia.

People-smugglers routinely advise their clients to discard their identity documents before arriving in Australia.

The refugee status assessment process operates primarily on a risk model, meaning there can be significant advantages to inventing false identities and claims of persecution.

So long as they can stick to their fictional story, happy days – one free Australian Residency and you know what, they can now bring over other members of their family under the family reunion provision.

Meanwhile the real genuine refugee gets either bumped further back in the queue or worse gets dropped completely.

Under Labor, we are such suckers.

 

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Media Release: Online Campaign Launched To Close Tent Embassy

Media Release

Online Campaign Launched To Close Tent Embassy

Menzies House, a non-partisan online activist community, today launched an online campaign calling on the Federal Government to shut down the Aboriginal Tent Embassy. The campaign website, www.closethetentembassy.com, is  coupled with Facebook & social media outreach efforts, and asks Australians to sign a petition calling on the government to take action and shut down the Tent Embassy.

Yesterday morning, Prime Minister Gillard and Opposition Leader Tony Abbott were forced to flee following a riot created by Tent Embassy supporters. Michael Anderson, a Tent Embassy founder, in instigating such actions stated: “To hell with the Government and the courts in this country”. Today, photos emerged of protesters burning the Australian Flag.  Former ALP National President Warren Mundine stated that he echoed Tony Abbott’s words, and condemned the protestors.

“Australians should be judged by the content of their character, NOT the colour of their skin” said Timothy Andrews, Managing Editor of Menzies House.“The Aboriginal Tent Embassy is a divisive attempt to create two Australias based on people’s race, and prevents true reconciliation.”

Over one thousand Australians have already signed the petition and joined the Facebook group calling on the Tent Embassy to be shut down –  just hours after the website’s launch.

“Yesterday’s events are the inevitable consequence of the radical, divisive heart of the Tent Embassy” continued Mr. Andrews.

“The tent embassy call for ‘sovereignty’ is little more than reverse-Apartheid,  and is damaging to all indigenous Australians. Decades of unequal public policy have clearly failed indigenous Australians. It is time we move beyond the failed policies of the past, and treat all Australians as equals. It is time that the Tent Embassy is closed.”
 
Contact:
Timothy Andrews
tandrews@menzieshouse.com.au

Reports the Prime Minister’s office encouraged protesters to target Tony Abbott over tent embassy

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THE Prime Minister is yet to respond today to a report that one of her staffers rang an Aboriginal tent embassy protester yesterday to say Tony Abbott wanted the camp torn down.

An announcement by protester and Greens's candidate Barbara Shaw that Mr Abbott wanted the tent embassy removed sparked a near riot, forcing Ms Gillard and the Opposition leader to flee a Canberra restaurant.

Sydney radio presenter Ray Hadley today said he'd received information that Ms Shaw or another protester had received a call from a Gillard staffer about comments Mr Abbott made earlier in the day about the tent embassy.

"Once she was told that, she was also told Mr Abbott was across the road, 'maybe you can give them a bit of a liven up'," the 2GB presenter told his audience today.

"Barbara Shaw then went on stage and for all intents and purposes, incited people."

The Australian Online has contacted Ms Gillard's office over the allegation but is yet to receive an official response.

Mr Abbott earlier declared he'd been "verballed" by protesters, saying he had not said the tent embassy should be removed.

 

If this turns out to be true, someone in the PM’s office will be looking for a new job.

I would also like to say that the PM emerged from this riot with her honour intact.

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AS the hammering on the glass grew louder and the security detail grew increasingly anxious, Julia Gillard’s thoughts turned to Tony Abbott.

Trapped for the past half-hour inside Canberra’s popular The Lobby restaurant by up to 100 bellowing protesters from the nearby Aboriginal tent embassy, the Prime Minister formed a huddle with her minders.

“We feel that the situation is deteriorating and (we) can’t stay too much longer,” one told her.

“OK. All right,” the Prime Minister replied calmly. “What about Mr Abbott? Where have you got him?”

Minder: “Ah, over there.”

Gillard: “We’d better help him through too, hadn’t we?”

Minder: “Yeah, sure.”

Update:

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A junior adviser to Julia Gillard has resigned after revealing Tony Abbott's presence at an Australia Day function yesterday in a move that sparked a violent protest by Aboriginal activists.

Media adviser Tony Hodges was forced to stand aside after the "error of judgment", the Prime Minister's office confirmed tonight.

It said Mr Hodges informed a "stakeholder" of Mr Abbott's attendance at an Australia Day function with Ms Gillard, and the information was subsequently passed on to members of the Aboriginal tent embassy.

 

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Petition To Close The Aboriginal Tent Embassy

Yesterday morning we witnessed a terrifying spectacle.

A brutal mob trapping the Prime Minister and Leader of the Opposition, then attacking them as they were forced to flee.

There has been no apology. In fact, indigenous leaders have promised more ‘protests’ like this one.

What’s more, Michael Anderson, a member of the original group of Black Power activists who created the ‘embassy’ declared outright: “"To hell with the Government and the courts in this country

This is what the Aboriginal Tent Embassy has created. A mindset where mob rule and violence is acceptable.

As David Pemberthy noted:  "It has never done anything to bring black and white Australia together." I would add that to the contrary, it drives them further apart. 

Until we move beyond a notion of two Australia’s, where people are judged by the colour of our skin, and not by the content of their characters, we will never be able to move forward. Yet the Tent Embassy embodies just that kind of division. In calling for a separate Aboriginal sovereignty, it is essentially calling for a form of Apartheid.

It is a racist, divisive structure, illegally built on public land, and the time has come for it to be removed by the Government. 

That’s why I’ve just created www.closethetentembassy.com as an online petition calling on the government to shut it down.

I hope you click through, sign, and then forward to your friends, as well as “like” it on facebook.