"So what?" is the implicit expression of much of the Washington political class when it comes to spending and taxing. The consequences of Washington's fiscal irresponsibility are not evident to many in the media and electorate - yet. But the pain will come - and it will hit almost every American.

Last week, I explained how government deficits are strangling necessary capital formation. The following describes the impact on job creation and growth, and next week, I will present a way out of the mess.

This past week, the White House claimed that the stimulus bill "saved 2 million jobs," but just before the stimulus bill was passed, the administration said the unemployment rate would peak at 8 percent with the stimulus bill and 9 percent without it.

Now, we have both the stimulus bill and an unemployment rate of more than 10 percent, which shows that the White House is developmentally challenged when it comes to basic arithmetic.

In response to Jack's article last week, A Tsunami of Insanity, in which he described the Financial Armageddon bearing down upon us, I was asked on the TTP Forum:

"OK, Skye, do you have a list of things you are doing to prepare for the storm?"

Yes, I do. I'll be discussing this in detail at the Las Vegas Rendezvous, but here are a few of the high points:

*Don't live in a city. A small town in a small county will be much safer - so long as the town and county aren't populated with a lot of Progressives.

Check the voting data for both the town and the county. A small conservative/libertarian town in a low population gold mining county will do relatively well as the dollar depreciates. A town where 40% of the income is dependent on the continuation of corn ethanol subsidies would be a very risky location, no matter how rural.

Even though the government is running massive deficits, interest rates and inflation are low. So, what's the problem? The following discussion will clarify the problem.

The United States is now in a situation in which the government is taking a very large share (40 percent) of the nation's savings to finance its deficit spending, leaving a diminished pool of capital to meet the needs of both families and businesses.

You might be thinking, if there are not enough savings available for investment needs, why are interest rates so low? The answer is that the Federal Reserve (Fed) has been creating money by loaning the banks nearly free money and buying mortgages from Fannie Mae and Freddie Mac.

Soon, as even the Fed acknowledges, it will have to start selling the mortgages it owns to private parties and increase short-term interest rates to avoid saddling the country with high inflation. In sum, inflation cannot be avoided without a big increase in both long- and short-term interest rates.

What are we to make of the fact that no one has taken credit for Wednesday’s (3/23) Central Bus Station bombing in Jerusalem?

Wednesday’s bombing was not a stand-alone event. It was part and parcel of the new Palestinian terror war that is just coming into view. As Israel considers how to contend with the emerging onslaught, it is important to notice how it differs from its predecessors.

For both Fatah and Hamas, the most important target audience is Europe.  Fatah, for example, is in the midst of a global campaign to build international support for a unilateral Palestinian declaration of independence in September.

The fact that Fatah and Hamas have neither waited until after September to attack nor sought to differentiate themselves from one another as the attacks coalesce into a new terror campaign indicates strongly that the Palestinians no longer feel they need to pretend to oppose terror to maintain European support for their war against Israel.

The long-term outlook for the stock market is not good, and here is why.

For the past 100 years, there has been an inverse relationship between changes in the size of government and the growth or decline in the stock market.  The accompanying chart clearly shows the inverse relationship between the direction of the size of government and stock market performance.

Gaza Strip -- Newly installed in her Gaza City office, National Public Radio’s Vice News Chief (Oppression and Victimization Department) Consuela “Muffy” Leer-Geist looks right at home. Generously granting her first on-site interview to FSM, Ms. Leer-Geist wore a tasteful chador, set off with a stunning Sweetbriar-logo headscarf (black is always correct). Her half-veil, designed by bad-boy fashionista John Galliano, completed an outfit that can only be described as a cutting-edge fashion statement that also displays cultural empathy.

Picking at her chickpea salad (and careful to use only her right hand), NPR’s reigning regional news-doyenne put down the script over which she’d been chuckling and opened our conversation:

Las Vegas.  It's good to be here at Bally's in Vegas among several thousand pro-freedom folks at Mark Skousen's Freedom Fest.  It's also creepy that right across the Strip from Bally's, Zero is at  Caesar's as I am writing this. 

He gave a fund-raising speech for Lost Harry Reid last night (7/08).  Believe it or not, his very first words of the speech were "Si, si, puede" - the chant in Spanish of illegal aliens, meaning "Yes, yes we can violate America's laws and live off the American taxpayer with impunity" (then become citizens and vote to keep Dems in office in perpetuity).

The Las Vegas Review Journal eviscerated Zero's speech this morning in an editorial entitled, Mr. President, Your Economic Policies Suck.  Nevada has the highest unemployment of any state in the US, while Zero's "main economic goals," the LVRJ says, "seem to be the punishment and prevention of capital formation and business growth."  You should read the entire editorial.

One fear you'll hear expressed here - as well as on the TTP Forum - is the Dems planning an orgy of fascist legislation during a "lame duck" post-election session, as described in the Wall Street Journal today (7/09).  This fear is way overblown.  Here are four reasons why. 

Assume you are a scientist and have been given a major financial grant to prove that the mythical unicorn really did exist.

You know that as long as you can demonstrate some progress in showing the unicorn might have existed, your financial grant will be renewed each year, provided some other scientist does not come out with substantial evidence that the unicorn could not have existed.

Under such conditions, you would have a very strong incentive to disregard much of the evidence that the unicorn could not have existed and each year provide only the data that could demonstrate that the unicorn might have existed. You also would have a very strong incentive to attack any scientist who raised serious questions or provided evidence that the unicorn could not have existed.

You even might go so far as to refer to them with the disparaging term "unicorn deniers."

Islamist Bigots Lose One - And They're Outraged

The Council on American-Islamic Relations (CAIR) is furious. For the first time since the birth of Mohammed, it isn’t getting its way in Washington. In the past, whenever our government raised the possibility of doing the least little thing of which CAIR might not wholeheartedly approve, the soft-core jihadis shrieked, “Bigotry!” And presidents, cabinet secretaries, senators, representatives and bureaucrats—even intelligence analysts and military officers--ran for cover (while, no doubt, suggesting that their spouses don head-scarves for a probationary period).

In the face of Islamist terrorism, we’ve been foolish. In the face of Islamist bullying of our government, we’ve been cowards.

Now, just this once, CAIR isn’t being allowed to dictate its sharia-flavored will to our nation’s capital.