Debt Ceiling Rap, Compare and Contrasting Boehner Plan V. Reid Plan, Simon Black on Why to Buy Gold, and Tom Woods Tears Up Unions

And here I thought the Keynes Vs. Hayek rap battles were the only good economic rap videos out there.  Well check this out from ReasonTV:

Not gonna lie, I had the hook in my head all day.  I especially love the line "all up in the club we be louding out, while in the market yeah we be crowding out."

The Committee for a Responsible Federal Budget has a nice cheat sheet up today comparing Speaker's John Boehner's bill to raise the debt ceiling along with Senate Majority Leader Harry Reid:

Reid Proposal	Boehner Proposal
Debt Ceiling Increases
Raises debt ceiling by $2.7 trillion immediately, which would last until 2013	Allows President to request $900 billion increase in debt ceiling, $400 billion immediately and rest subject to vote of disapproval If more than $1.6 trillion additional savings from special committee enacted, President authorized to request $1.6 trillion debt ceiling increase, subject to vote of disapproval
Discretionary Spending
$1.2 trillion in savings over 10 years from discretionary caps Caps grow roughly with inflation Firewall between security and non-security spending for FY 2012 and FY 2013 Limits war spending to $450 billion over the 2013-2021 period Enforcement: 60-vote point-of-order on bill that would cause spending to exceed caps or to increase caps AND automatic, across-the-board cuts if caps are exceeded	$1.2 trillion in savings over 10 years from discretionary caps Caps grow roughly with inflation Details range for defense spending in FY 2012 and FY 2013 Enforcement: Automatic, across-the-board cuts if caps not met
Specified Other Mandatory Savings
$70 billion in other mandatory savings (savings other than from Social Security and federal health programs) $40 billion from program integrity to achieve savings from waste, fraud, abuse $15 billion from spectrum sales $10 - $15 billion from agricultural reforms Higher education reforms whose savings go to Pell Grants	$16 billion from program integrity to achieve savings from waste, fraud, abuse $13 billion from higher education reforms to go to Pell Grants
Special Committee to Identify Additional Savings
Joint, bipartisan committee of 12 lawmakers to "present options for future deficit reduction" Goal: Reduce deficit to below 3% GDP Mandate: Make recommendations to meaningfully improve short and long term fiscal imbalance, may include tax reform, shall consider bipartisan plans Recommendations guaranteed to receive up or down Senate vote under expedited process by the end of the year	Joint, bipartisan committee of 12 lawmakers to report deficit reduction legislation by November 23 Goal: $1.8 trillion in deficit reduction Mandate: Make recommendations to meaningfully improve short and long-term fiscal imbalance Enforcement: Second $1.6 trillion debt ceiling increase not authorized without enactment of at least $1.6 trillion additional savings Recommendations considered under expedited process
Balanced Budget Amendment (BBA)
None	Requires vote on BBA in House, and subsequent vote in Senate if BBA passes House

A dominant feature of both is the silly notion that if the majority of cuts are "back loaded" then they may actually happen.  This of course is never the case, but politicians never gets tired to trying the same strategy over and over just to get a talking point. Hell, Boehner's plan only makes cuts of $4 billion in 2012 by itself.  Even more ridiculous is Reid's plan that relies on cuts from limiting war spending.  I will have to see this war "scaling down" to  believe it.  Rep. Paul Ryan, a highly overrated cost cutter, actually does a pretty good job of tearing down Reid's plan:

Reality: The Reid plan relies on the inaccurate assumption that surge-level spending in Iraq and Afghanistan is scheduled to continue over the next decade. An honest budget cannot claim to save taxpayers’ dollars by cutting spending that was not requested and will not be spent. Senate Democrats are employing a budget gimmick that will not fool the credit markets and does not address the urgent need for Washington to get its fiscal house in order.

Well shit, why not just declare war on Mars, allocate $100 trillion for the invasion, and then write a bill not allowing disbursement of the payments?  Instant $100 trillion in savings!

I got into an argument with a colleague today about whether or not one should buy gold.  He claims gold is in a bubble.  I said the reason for gold's rise has been loss of confidence in fiat currencies caused by money printing which doesn't look to be slowing down anytime soon.  Simon Black backs me up on Sovereign Man today:

So instead of worrying about buying gold at its all time high, ask yourself another question instead: Over the next few years, do you expect that these broken, bankrupt governments will inspire confidence among institutional investors, or do you think that confidence will continue to erode?
If you’re leaning towards the latter, you can be sure that more money will flow into gold, and that prices will rise.

Indeed, the question is not to ask if the gold price has plateaued but what are the fundamentals driving it and are those fundamentals going to continue.  Italy and Spain are going to need bailed out soon, the Fed will implement QEIII, and China is beginning to slow down.  Seems to me that precious metals are good for the long haul.  I saw this pic today on Zerohedge and had to put it up:

I will end with this fantastic video of Tom Woods and Damon Root of Reason discussing myths of unions and the New Deal on Stossel:

Update- Just to bolster my previous gold argument, here is the impeccable Marc Faber:

I just calculated if we take an average gold price of say around $350 in the 1980’s and then we compare that to the average monetary base in the 1980’s, and to the average US government debt in the 1980’s...but if I compare this to the price of gold to these government debts and monetary base, then gold hasn’t gone up at all. It’s gone actually against these monetary aggregates and against debt it has actually gone down. So I could make the case that probably gold is today very inexpensive... - in Business Insider