Big Government

Study: Illinois Government Bloated With 6,963 Local Governing Bodies

Any Illinois readers think there’s way too much government out there these days?

Based on findings from a recent analysis by a Chicago-based non-partisan research organization that works “to make Illinois first in economic outlook and job creation,” the “Land of Lincoln” is the “Land of Too Much Government.”

From the Illinois Policy Institute’s November 2013 research report entitled, “Too much government: Illinois’ thousands of local government”:

Illinois has the most units of local government of any state in the country. According to the U.S. Census Bureau, with 6,963 local governments, Illinois beats its nearest competitor by more than 1,800. Texas is No. 2 with 5,147 local governments.

The average Illinoisan resides in an area that has at least six layers of local government including county, township, municipality, both a primary and secondary level school district, and a community college district.

It is also quite common to have additional layers of government such as libraries, park districts, forest preserves, fire protection, sanitation, transportation and even mosquito abatement districts. These special districts add unnecessary layers of local government and bureaucracy, leading to expensive duplication of public services.

The result is higher costs for Illinoisans. Local government is primarily financed through local property taxes, and Illinois’ high number of governments contributes to the state having the second-highest property tax rates in the nation.

Multiple layers of government also make it harder for citizens to actively participate in the democratic process, which can lead to public corruption. Illinois is the third-most corrupt state in the country.

(Editor’s note: Italics added for emphasis)

An insightful study for Illinoisans, which can be found on the Illinois Policy Institute’s website here.

By Christopher E. Hill
Survival And Prosperity (

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Thursday, December 5th, 2013 Corruption, Government, Taxes No Comments

Back To Blogging

It’s back to work over here at Survival And Prosperity this dreary Wednesday morning in the Chicagoland area. I had planned on publishing new material Monday, but decided to extend my “vacation” out a little bit longer. I apologize if you were checking for new posts earlier this week.

During my time away from the blog, I was able to attend to a number of tasks that needed my immediate attention. But it wasn’t “all work and no play.” I got the chance to spend a couple of days at my family’s place in southeast Wisconsin near the end of the break. The weather was terrific, the locally-brewed beer plentiful, and the Northern Pike and Largemouth Bass were biting. My cousin and I managed to haul in some really nice-sized fish. Which is why I extended my stay longer than originally planned.

Two things come to mind now when thinking about that long weekend in Wisconsin:

First, I noticed the gun section at the local hardware store had a lot more ammunition on the shelves from the last time I was there. Another sign the ammo shortage is easing up?

Second, it was nice to “Escape to Wisconsin” and breathe in some “freedom.” In my opinion, Wisconsin is heading in the right direction. Illinois… not so much. As each day goes by, the “Land of Lincoln” continues to be transformed into a Big Government Nanny State, highlighted by more/higher taxes, more/higher fees, and increasing controls forced upon the populace. Sadly enough, many of my neighbors seem to be okay with this. Especially here in the Chicago area.

Coupled with the huge financial woes facing the City of Chicago, Cook County, and State of Illinois- an ugly ending looks to be in store for us. At the very least, Illinoisans will be busting their wallets out en masse to deal with the debt debacle.

And while our nice new house in the Chicago suburbs that I worked on quite a bit the last two weeks is fine and all, I continue to warn my girlfriend that our future permanent residence looks to be outside of the state.

It’s a real shame it might have to come to that.

Back to our regularly-scheduled blogging. And wondering if incompetency trumps political theater in causing a national debt default in the coming hours.

Christopher E. Hill

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Peter Schiff Warns The State Of The Union Is ‘A Complete Disaster’

On Tuesday evening, February 12, U.S. President Barack Obama gave his State of the Union address. Two days later on Valentine’s Day, Peter Schiff, the CEO/Chief Global Strategist of Euro Pacific Capital who correctly-predicted the Panic of ’08 and housing crash, critiqued President Obama’s speech. From The Schiff Report YouTube video blog:

Today is Valentine’s Day, although it felt like Valentine’s Day two days ago when President Obama was delivering his State of the Union address. Because really what it amounted to was a Valentine’s gift to the nation where the President tries to buy our affections, or are votes, by promising more free stuff. Something for nothing. By promising that more government can solve our economic problems. Now the President describes the state of the Union as strong. Of course all presidents, when they make that annual pilgrimage up to the Capitol, they always tell us the Union is “sound.” That the Union is “strong.” That’s what George Bush said in 2007, just before the financial crisis, the economic meltdown. They always tell us how great it is, even though we’re on the edge of a precipice.

The fact of the matter is, the Union is anything but strong. It’s a complete disaster. We are staring at an economic crisis much graver than the financial crisis of 2008. Yet, what does President Obama have to say? Basically, nothing. Everything is fine, all we need is a little more government…

It will be interesting to listen to President Obama’s State of the Union address in 2014. Whether or not the economic collapse that I’m forecasting has happened before then still remains to be seen. But I know one thing for sure- we’ll be a year closer to it if it hasn’t happened. And if it hasn’t happened by 2014, it will probably be just around the corner.

“The Real State of the Union- 2013”
YouTube Video

By Christopher E. Hill, Editor
Survival And Prosperity (

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Labor Minister: France ‘Is A Totally Bankrupt State’

Speaking of France, how is the Socialist-led European state faring these days?

Not so great, it seems.

In fact, a pretty reliable source claims they’re bankrupt.

Graham Ruddick reported on The Telegraph (UK) website Monday:

Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage.

“There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”

The comments came as President Hollande attempts to improve the image of the French economy after pledging to reduce the country’s deficit by cutting spending by €60bn (£51.5bn) over the next five years and increasing taxes by €20bn.

(Editor’s note: Italics added for emphasis)

As I mentioned earlier tonight, some claim President Obama desires French-style Socialism for the United States.

If France’s economy truly is in shambles, and the U.S. President really wants to emulate them, well- here’s a glimpse of what Americans could expect. From an Investor’s Business Daily editorial yesterday:

Fresh after May 2012’s election, President Francois Hollande wasted no time raising government spending, hiking tax rates to 75% on those above $1.3 million in income, hiring 60,000 bureaucrats, cutting the retirement age for public pensions to 60 and undoing fiscal reforms by his predecessor, Nicolas Sarkozy. During his campaign, Hollande declared himself “the enemy of finance.” France today proves it…

Public debt has soared from 68% of GDP in 2008 to 90% in 2012, joblessness has hit 11%, and GDP growth of its $2.8 trillion economy is projected in 2013 at zero.

Tax hikes have driven the richest taxpayers from the country, making the $43 billion budget hole unlikely to be plugged by Hollande’s $26 billion tax hike. Meanwhile, a squeeze on business creates rising numbers of unemployed, who in turn demand state services.

Time will tell how this will all work out for the Socialists in France. But if history rhymes once again, keep in mind something former British Prime Minister Margaret Thatcher said in a 1976 interview:

Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they’re now trying to control everything by other means. They’re progressively reducing the choice available to ordinary people.

Any of this sound familiar?

By Christopher E. Hill, Editor
Survival And Prosperity (


Ruddick, Graham. “France ‘totally bankrupt’, says labour minister Michel Sapin.” The Telegraph. 28 Jan. 2013. ( 30 Jan. 2013.

“Like The Bourbons, France’s Socialists Have Learned Nothing, Forgotten Nothing.” Investor’s Business Daily. 29 Jan. 2013. ( 30 Jan. 2013.

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Romney 3, Obama 0

Last night I watched the last in a series of U.S. Presidential debates between former Massachusetts Governor Mitt Romney and the sitting President Barack Obama.

Once again, the incumbent came out swinging. However, despite it sounding once again like the audience was in his corner, President Obama lost.

More so than in the second debate, if you ask me.

An analyst on one of the TV stations covering the debate said it best when she pointed out that Obama was, in effect, debating himself. Since his Republican challenger lacked significant foreign policy experience (the supposed focus of last night’s exchange), it was the incumbent’s record in this area over the past four years that came under scrutiny.

And plenty of dedicated observers of U.S. foreign policy- myself included- will tell you that it’s in shambles.

Particularly in the Middle East.

As I see it, the Obama administration, in its attempt to tone-down what it perceives as an overly-aggressive U.S. foreign policy under the Republicans, has:

Not deterred Iran from advancing towards a nuclear weapon. Regular readers of this blog know that I believe the Islamic Republic of Iran continues to take advantage of proposed “talks” and other delays to continue work on such a weapon. Notwithstanding military action, they will get a nuke. The prospect of having one is just too tempting. Pop one or two of these over the U.S., and we’ll have a real problem on our hands.

Not left a stable regime in place in Iraq. I predict a real power vacuum here in the coming years, with a number of internal and external actors vying for ultimate control of the geopolitically-important failed state and its resources.

Made a big blunder in announcing the withdrawal of U.S. combat troops from Afghanistan in 2014. Nothing like giving an enemy a timetable to work with. I suspect Al-Qaeda, the Taliban, and their allies will throw everything they’ve got at our men and women in uniform over there as the end of 2014 draws closer, knowing full-well they need only sustain such intensity until the announced exit date. Then what? Attack us on our home soil, possibly. Some terrorism experts have suggested one reason why Al-Qaeda hasn’t launched a massive operation against the United States mainland since 9/11 is because they’ve figured out it’s simply easier to kill scores of Americans on the battlefields of Iraq and Afghanistan. Remember, their stated goal is 4 million Americans dead. Back to being another failed state down the road.

Alienated our ally Israel. President Obama seems to see Israel- like past U.S. foreign policy- as being too aggressive. And it doesn’t appear the sitting President doesn’t care too much for Israeli Prime Minister Benjamin Netanyahu either- despite Vice President Biden and all that “Bibi” talk from the Vice Presidential debate. Consider the following:

November 3, 2011- Several media outlets reported an open-mic incident where then French President Nicolas Sarkozy told his American counterpart, “Netanyahu, I can’t stand him. He’s a liar.” Obama reportedly responded with, “You are sick of him, but I have to work with him every day.”

September 11, 2012- The White House said President Obama would not meet Prime Minister Netanyahu during a U.S. visit later that month. A number of media outlets suggested the Israeli leader was being spurned.

September 12, 2012- President Obama was taped for the CBS show 60 Minutes. From an exchange with Steve Kroft:

KROFT: You’re—you’re saying you don’t feel any pressure from Prime Minister Netanyahu in the middle of a campaign to try and get you to change your policy and draw a line in the sand? You don’t feel any pressure?

OBAMA: When it comes to our national security decisions, any pressure that I feel is simply to do what’s right for the American people. And I am going to block out any noise that’s out there.

Israeli concern over an Iranian nuke is “noise?”

Don’t even get me started on Libya and the deaths of 4 Americans, including an ambassador.

How the Obama administration has handled the Middle East is indicative of U.S. foreign policy as a whole.


Worse yet, our adversaries recognize it and actively exploit it.

It shouldn’t be too much of surprise U.S. foreign policy has come to this. After all, Democrats aren’t really known to be big on foreign affairs. If anything, they seem to look at it as an annoyance.

Whenever I think of foreign policy in the Clinton years, two words come to mind.

Cruise missiles.

These days, perhaps it can reduced to just one word.


Mitt Romney did a good job at pointing out the poor foreign policy record of the Obama administration.

But, truth be told, most Americans don’t care too much about international affairs.

The Republican challenger won this last debate not by talking about foreign policy- as was the intended focus- but by leading the discussion back to President Obama’s equally-dismal record on the economy.

This is what I meant when I said “more so than in the second debate, if you ask me” earlier in this post.

Romney kept hammering away at Obama’s domestic record as it pertains to take-home pay, unemployment, food stamps, government overreach, over-regulation, small-business woes, trillion dollar deficits, the $16 trillion national debt, the list goes on, and all the way to the end.

It was circling back to the Chicago Democrat’s domestic record these past four years that won the Republican challenger the debate.

In fact, all three debates.

Whether this will translate into a White House win come November 6 remains to be seen.

Regrettably, when it comes to that financial crash I predict is in store for us, I doubt a Romney win will make much of a difference at this point in the game. Economic pain is a certainty. Still, if he’s elected President of the Unites States and implements a sustained, meaningful program of fiscal responsibility, our financial “reckoning day” may not be as devastating as I suspect it would be should the nation continue on its current path.

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Peter Schiff: Obama ‘A Socialist At Heart’

One last mention of Peter Schiff before I move on. Last Friday RT interviewed Schiff, in which the “crash prophet” talked about the political aspect of our current economic woes and what he sees down the line. From the exchange:

The truth is, Obama is merely continuing and expanding the failed policies of George Bush. And unless Romney understands that, and articulates it- you know, I don’t think there’s much hope that a President Romney is going to alter our fate either. I think it’s going to be more of the same. I do believe that Romney will be less bad than Obama, and I think that we have a better chance of when the next crisis hits- when the real crash comes- I think it’s better to have Romney at the helm than Obama. Because I think Romney at least philosophically is in favor of free markets and capitalism- even if he doesn’t completely understand how they work. I think Obama is philosophically opposed to it. I think he’s a socialist at heart, and he likes it when he believes the free market is failing, because he sees that as an excuse for more government, to try and reshape America in this socialist utopia that lives in the fantasy of his mind.

Accusing the U.S. president of being a “socialist at heart” on RT, “the first Russian 24/7 English-language news channel which brings the Russian view on global news.” Kind of funny.

Of more interest to this blog, the author of the recently-released The Real Crash: America’s Coming Bankruptcy— How to Save Yourself and Your Countryicon talked about the perception of the U.S. dollar as a “safe haven.” From the interview:

I think that the dollar and the Treasury market, when it comes to safe havens, are going to be the Facebook of safe havens, because a lot of people wanted to buy Facebook on the IPO. They were really excited about it. They thought it was great. But once they owned it, and they took a look at what they owned, and they looked at the fundamentals, they realized it wasn’t so great. And they wanted to get out. The same thing is going to happen to people who are buying dollars, because they think it’s a safe haven from European debt.

America is more deeply in debt than Europe, and less likely to repay without resorting to massive money printing.

And if you think there’s going to be a lot of money printing, that is not a reason to want to own Treasuries or dollars. That is a reason to get as far away from the U.S. dollar and the Treasury market as you can.

“Peter Schiff RT America Interview – 01 – 06 – 2012”
YouTube Video

(Editor’s notes: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein; info added to “Crash Prophets” page)

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Welcome To Amerika?

Who hasn’t heard of this one by now: Barack Obama is transforming the United States into a socialist country.

While I personally believe Americans are witnessing the strengthening of a plutocracy- rule by the wealthy, transcending political parties- there’s no shortage of Americans who still think we’re headed towards socialism.

I happened to stumble on a Yahoo! News piece this weekend that originated from the news and opinion website The Blaze, a project of former FOX News personality Glenn Beck. What caught my attention was the title- “Are We Headed Toward the Constitution or the Communist Manifesto? This Breakdown Tells You.” Tiffany Gabbay wrote Sunday:

During his Thursday morning radio broadcast, Glenn Beck asked if America, on its current trajectory, is headed toward the values and principles of the Constitution, or rather, those of the Communist Manifesto.

To glean greater insight, The Blaze expanded on each of the Manifesto’s 10 planks and juxtaposed them with modern day American society. The picture revealed, while perhaps not shocking, is unsettling to say the least.

(Editor’s note: Italics added for emphasis)

Some background music, Comrade?
“Red Army Choir: Oh Fields, My fields.”
YouTube Video

Gabbay’s comparisons in the article are indeed thought-provoking. And I found what she said about “plank” number 4, confiscation of property of all emigrants and rebels, particularly interesting. Militia members, preppers, survivalists, firearm owners, opponents of the political party in power, and Americans making a lot of money and/or with sizeable assets might want to take note. From the piece:

4. Confiscation of property of all emigrants & rebels

This Manifesto pillar is perhaps best laid out in the recent string of government crackdowns on “homegrown militias.” Those who have paid careful attention to Janet Napolitano know that one of Homeland Security’s preoccupations of late has been the “rise” of “homegrown militias.” With this in mind, the department is likely honing in on anyone considered an “opposition group,” be they merely survivalists or those with a more militant bent.

Some may recall the Michigan militia, or “Hutaree,” as they are known — a group of anti-government “rebels” who were allegedly engaged in preparations for a potential future clash with federal agencies. The defendants were accused of conspiring to overthrow the U.S. government, a planned assassination of a police officer, and an ambush of that officer’s funeral with explosives in order to incite an uprising against the Federal government. While the anticipated attack never actually occurred, this did not stop the Feds, under the blessing of Attorney General Eric Holder, from raiding the Hutaree’s various outposts, confiscating its members’ arms and waging an all-out legal battle against the group.

At the end of March, 2012, presiding U.S. District Judge Victoria Roberts dismissed the most serious of the charges against the Hutaree, leveling a staggering blow to the Fed. She said the members’ hatred of government did not amount to a conspiracy to overthrow it.

It remains unclear whether the Hutaree were indeed poised to be the aggressors of a violent assault or if they were simply anti-big-government, “good ol’ boy survivalists preparing to “defend themselves” against a perceived government threat. But the Federal agencies’ indictment of the group perhaps reveals how government will deal with homegrown “threats” — be they real or perceived — moving forward.

Another key element, and one that warrants mention due to its relevance in modern day America, is the confiscation of citizens’ weapons. Those who have felt their Second Amendment rights slowly whittle away understand that disarming the public is a crucial step vital to ensuring the state’s grip over its citizenry. In fact, one of the first tasks performed by the then-fledgling Soviet state was the confiscation of citizens’ private arms — even hunting rifles. By stripping people of the ability to defend themselves, the authoritarian state could reign over the vulnerable Russian populace. Many Americans consider this a highly plausible reality given increasingly stringent gun laws and regulations spread across all 50-states.

It should also be noted that IRS liens, levies and seizures are all means by which the Federal government can confiscate a “rebel” entity’s assets — one instance being the recent IRS “shakedown” of Tea Party members. And, in terms of “emigrants,” taxing the off-shore income and assets of American citizens, or causing Americans to give up their U.S. citizenship and flee to foreign lands to avoid abusive U.S. taxes, is yet another means by which the Fed’s confiscatory, overreaching tentacles are changing the American landscape. Statistics point out a rising trend

(Editor’s note: Italics added for emphasis)

Like I said, it’s a thought-provoking piece, which you can read in its entirety on the Yahoo! website here.

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Make Mine Freedom

When anybody preaches disunity, tries to pit one of us against the other, through class warfare, race hatred, or religious intolerance, you know that person seeks to rob us of our freedom, and destroy our very lives.

-Harding College’s Make Mine Freedom (1948)

“Make Mine Freedom (1948)”
YouTube Video

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Constituents 101

September 1995. I had just started working as an aide to a U.S. Senator. A co-worker of mine was sharing some of the ins and outs of the job with me when he pointed out the following:

The thing to remember about constituents is that they want as many government benefits as they can get- without paying for them.

I never forgot that conversation, and was reminded of it while watching the news last night from my family’s home in southeast Wisconsin. From Sara Murray yesterday afternoon, writing on the Wall Street Journal’s Real Time Economics blog:

Nearly half, 48.5%, of the population lived in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Those numbers have risen since the middle of the recession when 44.4% lived households receiving benefits in the third quarter of 2008.

The share of people relying on government benefits has reached a historic high, in large part from the deep recession and meager recovery, but also because of the expansion of government programs over the years…

High unemployment and increased reliance on government programs has also shrunk the nation’s share of taxpayers. Some 46.4% of households will pay no federal income tax this year, according to the nonpartisan Tax Policy Center. That’s up from 39.9% in 2007, the year the recession began.

(Editor’s note: Italics added for emphasis)

48.5% of the population lives in a household that receives some government benefit. 46.4% of households will pay no federal income tax this year. Constituents are getting what they wanted. Or are they?


Murray, Sara. “Nearly Half of U.S. Lives in Household Receiving Government Benefit.” Real Time Economics. 5 Oct. 2011. ( 6 Oct. 2011.

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Signs Of The Time, Part 27

One thing I took away from my years spent working in the public sector is that the government isn’t real good at running things (then again, you don’t have to have worked in government to figure that one out). The motivation for keeping operations streamlined, efficient, and effective might not be there as it is in the private sector. Crappy product and/or poorly-run business means soon out of business (not withstanding a government bailout, of course). More often than not, this doesn’t apply to a taxpayer-funded venture. Despite the federal government having grown larger under these last two administrations, bigger hasn’t necessarily translated into better according to critics. Enter the Transportation Security Administration (TSA), and what its founder, Representative John Mica (R-FL), recently said about his baby. From an Investor’s Business Daily editorial on September 13:

Bureaucracy: The Transportation Security Administration was set up to close the gaps that allowed 9/11 to happen. But it quickly went bad, a fact its founder now acknowledges. He and others should have known better.

Republican Rep. John Mica of Florida wrote the legislation that created the TSA. But nearly a decade later, he’s not happy with what the agency has deteriorated into.

“The whole program has been hijacked by bureaucrats,” Mica recently told Human Events.

“It mushroomed into an army,” he said. “It’s gone from a couple-billion-dollar enterprise to close to $9 billion.”

Mica and the rest of Washington should have foreseen that, as an instrument of government, the TSA would fall short of its mission and grow out of control. The history of federal programs shows they are ever-expanding entities that always escape the bounds set for them when they are legislated into existence.

The congressman’s solution? From the piece:

Dismantle the agency and privatize the screening process. Rather than the 30,000 screeners — and 65,000 workers — it has now, it should have no more than 5,000 screeners, he says. Instead of being run by a bureaucracy, the workforce needs to be managed in a businesslike way, with incentives for doing the job well.

I appreciate the work TSA does on behalf of keeping Americans safe. My dealings with TSA personnel have been, on the whole, very positive. However, it’s no secret they have their critics. Hopefully, the agency can respond to the criticism not with an “us versus them” attitude (which I’ve witnessed before during my government days) but rather in a positive, constructive manner that is evident to the public and builds trust in the operation.

Win America’s “hearts and minds.” Something other federal agencies should be aspiring to do as well. Otherwise, the calls to privatize/shrink will grow louder.


“End Of Its Grope?” Investor’s Business Daily. 13 Sep. 2011. ( 16 Sep. 2011.

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Friday, September 16th, 2011 Government, Public Safety, Signs Of The Time No Comments

Quote For The Week

The 2008 crash vindicated the theory of the Austrian school economists, who had predicted precisely such a credit crunch in remarkably specific terms. Yet the official response, even from notionally Centre-Right governments, was overwhelmingly Keynesian…

It’s paradoxical: at the moment they have most demonstrably lost the argument, Keynesians have assumed almost total control of public policy. Only when we see the long-term price of our current policies – statism, sclerosis, inflation and bankruptcy – will their ideological grip finally be loosened.

Keynes was famously nonchalant about this drawback. “In the long run,” he observed, “we are all dead”. But this isn’t true. Or at least, it isn’t true from the point of view of those of us who, unlike Keynes, have children.

-Daniel Hannan, British legislator, journalist, and author of Why American Must Not Follow Europe, in the online edition of The Telegraph (UK) last Friday

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Don’t Expect Small Business To Ride To The Economy’s Rescue

I find it amazing that when the economy is dependent as much as it is on consumer spending, decision-makers in Washington would dare alienate small businesses in the United States like they’ve managed to do. According to the Small Business Administration, these firms pay 44 percent of the total U.S. private payroll annually, in addition to having created 65 percent of net new jobs over the past 17 years. Oh well, that’s what happens when business and economic know-how is a scarce commodity at the top.

The latest U.S. Chamber of Commerce “Small Business Outlook Survey” is out, and the findings are worrisome to say the least. Anyone banking on these small firms to ride to the economy’s rescue anytime soon may want to reconsider that belief. A total of 1,409 small business owners and executives around the country were polled from June 27 to June 30, and the results showed:

• A vast majority (84%) of small business owners said the U.S. economy is on the wrong track
• Only 20% believe that the country’s best days are ahead
• When thinking about what small businesses across America need most right now, vast majority of respondents say Washington should “get out of the way” (79%)
• Over the next year, 64% will keep the same number of employees
• 19% will add new employees (almost the same as last year’s 18%)
• Only 12% say they will lose employees over the next year- significantly fewer than the 29% who said they lost employees over the last year
• 79% say taxation, regulation and legislation make it harder for their business to hire more employees
• 75% say the healthcare law makes it harder to hire more employees

You can read the entire report on the Chamber website here (.pdf file)

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Thursday, July 14th, 2011 Employment, Government No Comments

Observing The Belarus Financial Crisis

Anyone been paying attention to the economic crisis unfolding in Belarus (former Soviet republic of Belorussia)? Some really depressing stuff going on. From the BBC News website yesterday:

Belarus has asked the International Monetary Fund (IMF) for an emergency loan of up to $8bn (£5bn; 5.6bn euros).

It comes a day after the government announced it was raising its main interest rate from 14% to 16%, and that it was freezing prices on a number of staple foods until 1 July.

Last week Belarus cut the value of the rouble against the US dollar by 36%.

The country faces high inflation and its most severe financial crisis since the collapse of the Soviet Union.

Reports of empty store shelves and food being hoarded are coming out of the Belarus capital of Minsk and elsewhere in the country. Apparently, the latest financial crisis stems from a sharp fall in the ex-Soviet republic’s foreign exchange reserves caused by populist social spending increases designed to support last year’s presidential campaign of long-time president Alexander Lukashenko. The Wall Street Journal’s Richard Barley talked about how Belarus got to this point on Wednesday:

Belarus is a repeat customer at the IMF. In 2009-2010, hit by a plunge in energy revenue, it borrowed $3.4 billion accompanied by a 15-month program of overhauls under which it managed to tighten monetary and fiscal policy, sustain growth and keep unemployment low. But structural problems remain. The state accounts for 70% of the economy, growth remains driven by rapid credit expansion, and there is a heavy reliance on imports.

Since the IMF program ended in March 2010, Belarus has gone backward. December’s elections saw state spending ramped up, while rival candidates, activists and journalists were detained. Officially, Mr. Lukashenko won 80% of the vote. The spending surge has contributed to the crisis, with the current account deficit widening to 16% of gross domestic product in 2010. Foreign-currency reserves have dwindled to just $1.4 billion. Moody’s pegs the country’s external financing needs for 2011 at $8 billion to $10 billion.

As some might expect, President Lukashenko, who has served in that role since 1994, first sought financial support from Russia to deal with this latest crisis. However, Belarus’ neighbor to the northeast wants some significant concessions. From the Financial Times’ (UK) Neil Buckley yesterday:

Some analysts cautioned that talk of turning to the IMF could be a tactic to strengthen Mr Lukashenko’s hand in talks with Moscow, which demanded tough conditions for any loan…

Mr Lukashenko has sought financial support from Russia and former Soviet allies, but Moscow demanded privatisation of strategic state assets, including a stake in Beltransgaz, the national gas pipeline operator – seen as a way of enabling Russian companies to buy control of key parts of the Belarusian economy on the cheap.

Nothing’s for free, right?

Consider some of Belarus’ actions that have brought them to this point:

• Unsustainable social spending for political gain
• Government interference/dominance of the economy
• Excessive reliance on credit
• Too much of a dependence on imports

Remind anyone of another country to a certain degree?


“Belarus seeks IMF loan.” BBC News. 1 June 2011. ( 1 June 2011.

Barley, Richard. “IMF Must Be Tough on Belarus.” Wall Street Journal. 1 June 2011. ( 1 June 2011.

Buckley, Neil. “Belarus to seek IMF bail-out.” Financial Times (UK). 1 June 2011. ( 1 June 2011.

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WSJ: Nearly Twice As Many Workers In Government Than In Manufacturing

Here’s an interesting tidbit from the Wall Street Journal’s senior economics writer Stephen Moore last Friday:

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

Just one more example of “Big Government?” Sure. But before the bureaucrat-bashing commences, Americans should ask why the public sector was ever allowed to grow so large in the first place. Perhaps demands from the general public for more services and entitlements over the years had something to do with it? If that’s the case, America as a whole- and not just the apparatchiks- may indeed be guilty of being a “nation of takers.”


Moore, Stephen. “We’ve Become a Nation of Takers, Not Makers.” Wall Street Journal. 1 Apr. 2011. ( 4 Apr. 2011.

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A Message For Those Who Can’t

Have you ever wondered how some people have gotten as far as they have in life?

The world is populated by “those who can”- and “those who can’t.” “Those who can” are not only able but willing to tackle whatever life throws at them head-on. Failure for this group is merely a hurdle in their quest to succeed at whatever it is they’re doing, and blame-throwing isn’t an option for these individuals.

“Those who can’t” require others (“those who can,” go figure) to carry them through life (by the way, in this post I’m referring to individuals who consciously choose this approach, not the mentally/physically-impaired- God bless them). “Fix it!” is their battle cry. Regrettably, their numbers seem to have grown through the years. I guess it was only inevitable, as comfortable times during the closing years of the American Century only perpetuated this terribly-misguided mentality. Economy got you down? No worry- Washington will fix it for you (at least, that’s the impression they wanted to give). Depressed about the value of your stocks? Don’t fret, the Fed will cut interest rates and subvert the economic cycle for you. Happy now?

Washington only made matters worse in the last decade, sending the wrong message with bailouts, modifications, and neglect in holding certain parties responsible for the problems the nation now faces.

But for the “those who can’t” crowd, the message couldn’t have been any clearer. Not only was their counterproductive mentality seemingly-condoned by those in power, but a Nanny State was possible in their minds, and it was their job to elect those supporting Big Government to bring about such change.

Hope and change, that is.

While some politicians latched onto the idea of a Nanny State because of some impossible utopian dream, others pushed Big Government to perpetuate their political careers:

Sell the idea of the Nanny State to “those who can’t,” and it’s state dinners, lear jets, and none of that crappy ObamaCare for you!

Or so both parties thought. Going forward, I have some bad news for the “those who can’t” crowd- they’re toast. The numbers don’t lie- the nation’s financial health is in really bad shape. Astronomical national debt, unsustainable deficits, deteriorating infrastructure, entitlement bills coming due, local governments going broke, the list goes on. Seriously, does anyone actually believe we’ll ever be able to come up with the funds to pay for all this stuff? We’ve managed to kick the can down the road this far. But when you take into account an economic “recovery” that’s on artificial life support (trillions of stimulus dollars) and a Federal Reserve that’s running out of bullets, you might understand why I believe a financial crash will take place. As I’ve mentioned before- this is not the end of the world or anything like that. Economic crashes have occurred throughout history. However, I anticipate things will get a whole lot worse before they get better, and in such a scenario, the “those who can’t” crowd won’t do very well.

Yet, history has shown some well-spoken strongman, not unlike a Hitler or Mussolini, could take advantage of terrible socioeconomic conditions to run for political office on the promise of stability and the establishment of a Nanny State. The “those who can’t” crowd may actually see their wish come true- while losing their freedom in the process.

Obviously, they stand to lose either way.

My advice to “those who can’t” is this- be someone who can. Before it’s too late. For you and god forbid any of your loved ones who are forced to depend on you.

“I’m a Dog”
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