JFK's federal budget = $100B, at the height of the Cold War.

Adjust for CPI/inflation to 2011: x 7.5 = $750B

Adjust for population growth to 2011: barely x2 = $1500B

Compare to today's actual $3800B+. How to explain?

Medicare in 1966: $3B

Same CPI and Population adjustment: $45B

2011 Medicare budget: $466B. A factor of over 10X over adjusted 1966 amount.

And yet, we could eliminate 100% of defense(at $550B) and 100% of Medicare(at $466B), and still not be half-way between today's bloated $3800B and JFK's fully adjusted $1500B.

Explain that.

"% of GDP" is a sham. It is not the function of self-government to consume a given % of GDP. The measure of government efficiency is in inverse proportion to the % of GDP that it consumes.

When we built our home 20 years ago, we spent a certain % of our income on much needed plumbing. As our income has grown, we did not continue to spend a fixed % of our income on much needed plumbing, nor were we ruled by plumbers, just because we needed plumbing.

Self-government is much needed plumbing, and our elected officials are state plumbers. They are not tasked with consuming a fixed % of GDP, but ... we wish. Obama's 25% is a whopping 5% over historical averages in this nation. As Peggy Noonan wrote, "He made things worse."


Federal bloat has crushed our economies, even as they insist on referring to them as an it.


JFK's 60's economies provided the world's best ... everything. Economic opportunities, educational opportunities, infrastructure programs -- this was the height of building IKE's autobahn/Interstate system -- and even, Apollo Moon Programs.

So how to explain his adjusted $1500B federal budget against today's $3800B federal budget?

The difference has crushed our economies-- the engines that we claim 'must' fire to drive prosperity. These social engineers do not understand how they've killed risk, the desire to run uphill against the gradient, the desire to pull hard on pump handles. They are all about taking and giving, redistributing, shedding risk at the point of a gun aimed at the many for the some.

This nation's financial system used to be governed by 50 sets of independent state banking and lending laws. In court case after court case, and even USSC, those 50 sets of regulations standing in parallel in a distributed governance model were systematically and deliberately replaced with a single point of failure overbearing federal model. This exposed the inherent dangers of monopolistic influence(even in governance) when it failed simultaneously across the entire nation. Monopolies can't be bad only in the private sector, but good things in the public sector, and as we flirt with global totalitarian economic constructs, we should ponder that, no matter how compelling the resulting leverage is. The lesson of massive leverage, over and over and over again, is that it can massively leverage in two directions; good and bad.

There is a reason that suspension bridge cables are built the way they are. There is a reason that 'the Sears Tower' is really 9 towers standing in parallel, like a bundle.

The expression is, "United We Stand." Not, "United It Stands."


If we still had those 50 sets of independent state banking and lending regulations, this financial crisis would have never made it past P8 of the local paper, and "CountryWide" would have been named "StateWide." The failures of a single state running amok with a failed social experiment would have easily been absorbed by 49 still standing state economies, interlinked and yet not lockstepped via an over-bearing single point of failure federal model.

We are in love with the leverage promised by totalitarian solutions, and it blinds us to everything except our ambitions, well meaning or not. When those disparate ambitions converge and sprint the entire nation headlong into a single 'the' direction, heads roll.

The last person you want to be is the last investor into a bubble. And yet, that is exactly what our converged interests managed to do, aimed precisely at that segment of our nation least able to bear that title-- well meaning or not. But, who was there to say "No...stop!" in our nation? Not any POTUS of any party, anxious to tout 'the highest % of home ownership in history." Not any Congress, for the same reason. Not the "CountryWides," raking in milliosn doing God's work. Not HUD, or any construct of government. And certainly not the folks getting access to the warm body tear-off credit. A few academics here and there were waving the nation off, maybe Peter Schiff most effectively. But during the peak of the bubble, anyone who would have actually effectively argued to put a stop to this convergence of interests would have been painted as a 'red-lining' meanie who was trying to keep poor-people away from the 'wealth-building' party.

The failure was not our intentions. The failure was the massively monopolistic, single-point-of-failure nature, scale, and scope of all those converged interests. The failure was our collective stupidity at tolerating over-leveraged models of single-point-0f-failure governance loose in our nation.

The imbalance between weakened states and too-powerful federal models of governance is what failed us all, at once, in the universe's latest demonstration of the stupidity of single-point-of-failure models.

We have barely learned a thing; we are still drawn like moths to a flame to totalitarian global solutions, because we are mesmerized by the leverage. If only our great ideas could benefit from the massive leverage afforded by global totalitarian reach, then we could build 'a' better economy.

We should be building economies, plural. Massively parallel systems, not a single point of failure 'the' system.

But we aren't. Until the wheels fall of 'the' wagon.


(Credit: Ayn Rand, "We The Living" for the plumbing analogy.)