There has been much discussion about whether the Democrats or Republicans gain a political advantage from the debt-ceiling-increase mess. An equally interesting and, perhaps, more important question is who has a vested interest in this financial chaos.

First, a few facts:

*It is estimated that between Aug. 3 and 31, the U.S. government will receive revenues of approximately $172 billion and have expenses of $307 billion, leaving a deficit for those days of about $135 billion. The revenues will be sufficient to pay Social Security and interest on the debt, but not many of the other obligations.

*The 12.4 percent Social Security payroll tax paid by employers and employees goes to buy special-purpose government bonds that are held by the Social Security Trust Fund. The Trust Fund holds about $2.4 trillion in these bonds, so it would be many years before they are exhausted. The only way there would not be enough revenue to cover the Social Security checks is if President Obama decided to spend the money on something else.

*Mercatus Institute research fellow Veronique de Rugy has identified an additional couple of trillion dollars of U.S. government physical and trust fund assets that could be legally sold to cover budget shortfalls.  See the section on "Liquidating Existing Assets" in the link.

A Vatican source has disclosed to To The Point a psychological trauma of John Paul II. Whenever Vatican investigators brought the results of their vetting process regarding an individual’s candidacy for bishop, cardinal, or other office, and they revealed he was a homosexual, John Paul II would refuse to believe it.

He did so because accusing someone of homosexuality was a standard practice of the Communist government in his native Poland regarding anyone it regarded as an enemy of the state. From his ordination as a Catholic priest in 1946 to elevation to Archbishop of Krakow in 1963 and Cardinal in 1967, the then Karol Wojtyla witnessed this personal destruction repeatedly. So traumatized, he summarily dismissed such accusations as Pope, and would approve the elevation of anyone so accused.

This is why the Catholic Church, from Bishops in Boston to the Vatican itself, is riddled with homosexuals today. As the Dean of the College of Cardinals and the Prefect of the Congregation for the Doctrine of the Faith, Cardinal Ratzinger learned who the homosexuals are in the Vatican and the almost 3,000 dioceses in the world. As Pope Benedict XVI, he will encourage their departure from the priesthood.

Why didn't I ever think to call Russian dictator Vladimir Putin The Gremlin In The Kremlin?  It took the London Telegraph to come up with the cleverest headline of the week.  At last, Russians are realizing what a punk Putin is, who tries so achingly hard to be a macho-man.  (You know I have personal experience over what a lightweight he is.)

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Meanwhile, the hammering of Newt continues.  What's really gone viral - particularly in Iowa - is this video hit comparing Newt's values to those of Kim Kardashian.  Ouch!

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It's a contest as to who should be the HFR Hero of the Week.  We report, you decide. 

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Now for the HFR Word of the Week.  Rehypothecation.  It's literally a trillion-dollar word.  To understand why, we need to talk about Cameron and Corzine.

Have things stopped getting better?

Americans had become used to ever-increasing living standards, but there is evidence that for many people, life is not improving. There is also a growing pessimism about the future with surveys showing that Americans do not think their children and grandchildren will be better off.

Last week, there was a most interesting discussion between two of the world's leading tech gurus - George Gilder and Peter Thiel - at FreedomFest in Las Vegas. Mr. Thiel argued that, in many areas, progress has stopped or almost stopped.  Mr. Gilder was more optimistic.  Yet both agreed on what the obstacle to progress is.

Now that John Bolton’s UN Ambassador nomination has been sent to the Senate floor, the hot question is: will they or won’t they? Will the Dems filibuster? Maybe, but more likely is they won’t, as it would all but guarantee the quick enactment of the stupidly-named “nuclear option” of ending judicial filibusters. Either way, the betting on Capitol Hill is that he will be confirmed.

As he settles in to his new UN offices, don’t expect John Bolton to have been the least bit intimidated by the Dem’s vendetta against him, nor to lie low and not rattle anybody’s cage for a while. That’s not what GW is sending him to do at Turtle Bay. John has quite a list of cages he intends to rattle, and the first one belongs to France.

Last week (7/05), in a case before the U.S. Military Court of Appeals, by a 3-2 vote the judges delivered an outrageous decision.

Army Ranger First Lieutenant Michael Behenna was deemed to have no right to self-defense when he killed the Iraqi prisoner he was interrogating after the latter threw a concrete block at him and tried to seize his firearm.

Unless he is pardoned, Lt. Behenna will remain incarcerated for the next twelve years.  (Note: to support Lt. Behenna, go to defendmichael.com.)

Unfortunately, under President Obama, service personnel's rising fears of being prosecuted for acting to protect themselves and their missions are but one of many disastrous ways in which the military is being, to use his now-infamous turn of phrase, "fundamentally transformed." Consider a quartet of examples:

When I hear politicians say they cannot cut government spending and we must have tax increases, I know they are either corrupt or incompetent.

Anyone who has ever been around government agencies knows that they tend to be overstaffed and inefficient compared with operations in the private sector. But we also know that many governments in other countries do a much better job in managing taxpayer dollars than ours.

At a minimum, we should demand that our political leaders manage the government they are responsible for as well as other political leaders in these countries manage their governments.

President Obama and many of his fellow Democrats say we cannot reduce our debt problem to manageable levels without increasing taxes. I say, why not? Some other countries spend less per capita and yet provide higher levels of government service. Take a look at the chart below.