Stephen Anderson



Articles by Stephen Anderson

US States Have a Long History of Defaulting

The American bankruptcy show of the twenty-first century continues unabated with federal and state government spending. History reveals that some states have defaulted through not meeting a required bond payment, leaving the bondholders and that state’s taxpayers with a debt problem. Today, we might call a state government bond payment default a bankruptcy.
Many bankruptcy filings today are governed by Chapters 7, 9, 11, and 13 of the United States bankruptcy code, which are supervised, reviewed, and completed by federal bankruptcy courts. Federal bankruptcy law does not allow a state to declare bankruptcy, however. Federal law also prohibits individual states from printing their own money as a way out of debt. Government (state and federal) money issued and backed fully or partially by

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Are Bankruptcies of Some US States in the Future?

Bankruptcy is a developing twenty-first century theme in America. We see bankruptcy in federal government policy and spending, many corporate boardroom decisions, nonprofit and religious groups’ overspending and arrogance, individuals, some United States cities and counties, and the territory of Puerto Rico. The federal bankruptcy law consisting of Chapters 7, 9, 11, and 13 allow bankruptcy filings for local governments, individuals, nonprofit groups, and for-profit businesses, but it does not allow bankruptcy filings for states and the federal government.
A few states are facing the reality of defaulting on their issued bond debt obligation payments and loan payments to lenders. These states are seeing current and future tax revenues decreases, net population losses, fewer private

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America’s Corn Crop Comes from “Corny” Subsidies

Corn is grown in the United States as a staple crop for human food, as cattle feed, and as input for conversion to corn ethanol. The federal laws and rules for the corn ethanol industry were initiated in the 1970s and have continued today with ethanol subsidies. The federal corn ethanol sales pitch is for the United States to gain energy independence by lowering vehicle tailpipe emissions through the required blending of ethanol into the nation’s gasoline supply, resulting in reduced greenhouse gas (carbon dioxide) emissions.
Corn Belt growers and their federal representatives embrace and push federal corn subsidies and other interventions into law. The Corn Belt is centered in the US Midwest states of Illinois, Indiana, and Iowa.
Corn ethanol is energy intensive to produce as an energy

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What Would Mises Think? Austria Is Applying (Some) Austrian Economics

Austria is one part of the name “Austrian economics.” How has the country of Austria prospered by applying Austrian economic concepts? The nation regained full sovereignty in 1955. Their form of government is a parliamentary coalition with a prime minister as head of state and a ceremonial office of president.
How would Ludwig von Mises view Austria today implementing Austrian economics? He would not recognize the country he fled in 1934 ahead of the German war machine and its purposeful discrimination of people of Jewish descent. He would probably be thankful Austria’s Jewish population is thriving. He would also see its standard of living and economy flourishing today.
Austria has large services and industrial sectors, and it has a small, highly developed agricultural sector. The

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Federal Flood Insurance Drains Taxpayers

Federal flood insurance was created ostensibly to provide insurance to people who live in flood-prone areas. Not surprisingly, it subsidizes bad home-building decisions and wastes billions of dollars.
Original Article: Federal Flood Insurance Drains Taxpayers

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Federal Flood Insurance Drains Taxpayers

The US government’s National Flood Insurance Program (NFIP) is flush with debt. The NFIP owes the US Treasury roughly $25 billion. According to the Federal Emergency Management Agency (FEMA), the NFIP will pay $280 million in interest in 2022. “The program was never intended to generate a profit. It was established because due to the nature of flood risks, commercial insurance was not generally available.”
Congress created the NFIP in 1968 to make reasonably priced flood insurance available to business owners, homeowners, and renters. Each authorization of the program has an expiration date requiring Congress to reauthorize it with federal taxpayer funds and reforms.
The NFIP makes federally backed flood insurance available in states, cities, and towns that agree to adopt and enforce

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Cotton Pickin’ Sanctions

On yet another crusade, US authorities have sanctioned Chinese cotton imports. The sanctions won’t change Chinese policies but they will create hardships for many.
Original Article: Cotton Pickin’ Sanctions

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Oil Export Bans Make for Crude Politics

In the wake of the Arab Oil Embargo of 50 years ago, Congress banned U.S. export sales of crude oil. The results were different than what government "experts" imagined.

Original Article: Oil Export Bans Make for Crude Politics

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Oil Export Bans Make for Crude Politics

The Organization of the Petroleum Exporting Countries (OPEC) embargo on sales of crude oil from their member countries to the United States was a response to US support for Israel in the October 1973 Yom Kippur War against invading Egyptian and Syrian military forces. This oil embargo raised barrel prices on the open market and, when combined with US price controls, reduced the amount of oil available in the US for refining into gasoline, leading to domestic gasoline shortages and higher prices at the pump.
The federal government banned oil exports in December 1975 with the intent of preserving it for domestic refiners to produce gasoline, diesel, and jet fuel. The ban did not function as intended and was lifted by President Obama in December 2015, forty years to the month after its

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Welcome to the Twenty-First Century American Bankruptcy Show

Many historians labeled the twentieth century as the American century, with many metrics used. The end of the Cold War in 1989 and the fall of the Union of Soviet Socialist Republics in December 1991 changed world affairs: several new countries formed, the Warsaw Pact dissolved, the economy of China rose, and many US military bases shut down. The twentieth century wound down with the US as the world superpower, and yet the vision of the 1990s was not clear for our political and military leaders going into the twenty-first century.
One definition of bankruptcy is “utter ruin, failure, depletion, or the like.” Entering the third decade of the twenty-first century with the perspective to see what has occurred since 2000 reveals this century is becoming the American bankruptcy. One US view of

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Thatcher’s New Style of Government

The possible bankruptcy of Thames Water Company in Great Britain brings to mind the heady days 40 years ago when Margaret Thatcher’s government was privatizing state-owned enterprises, including TW. Not all privatization stories have happy endings.

Original Article: "Thatcher’s New Style of Government"

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How Conscription Ended Fifty Years Ago

For the past fifty years, the US has not had a military draft. Unfortunately, the end of conscription did not mean US military interventions abroad ended.

Original Article: "How Conscription Ended Fifty Years Ago"

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America’s Big Three Entitlement Bankruptcies Are Inevitable

America’s federally sanctioned entitlement programs, Medicare, Medicaid, and Social Security, each face bankruptcy in the next few years. Medicare and Medicaid were created in 1965 as part of President Lyndon Johnson’s Great Society legislation. Social Security was created in 1935 to provide retirement income for Americans who reached the age of sixty-five. These three entitlement programs consume about fifty cents of every federal budget dollar, or $2.7 trillion in fiscal year 2023.
Medicare is a federal health-insurance and healthcare program available for enrollment when a person reaches the age of sixty-five. An American who has worked for a minimum of ten years is eligible for enrollment. Employees and employers each pay a minimum Medicare tax of 1.45 percent based on the employees’

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America’s Big Three Entitlement Bankruptcies Are Inevitable

America’s federally sanctioned entitlement programs, Medicare, Medicaid, and Social Security, each face bankruptcy in the next few years. Medicare and Medicaid were created in 1965 as part of President Lyndon Johnson’s Great Society legislation. Social Security was created in 1935 to provide retirement income for Americans who reached the age of sixty-five. These three entitlement programs consume about fifty cents of every federal budget dollar, or $2.7 trillion in fiscal year 2023.
Medicare is a federal health-insurance and healthcare program available for enrollment when a person reaches the age of sixty-five. An American who has worked for a minimum of ten years is eligible for enrollment. Employees and employers each pay a minimum Medicare tax of 1.45 percent based on the employees’

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Thatcher’s New Style of Government

Recent news reports mention the possible bankruptcy of the privately owned company Thames Water (TW) in the United Kingdom, with a history of very high debt repayments, high dividend payouts to shareholders, mismanagement, and underinvestment of capital spending. TW supplies water and wastewater services to the southeast of England, including London.
The problem for TW is that almost half of their debt is floating rate, in which the interest rate paid increases or decreases with the rate of inflation. The UK’s higher inflation in recent years has impacted TW’s amount of loan repayment. TW was originally owned and operated by the British government and was privatized in 1989.
Some say TW’s woes were caused by the privatization when facts state otherwise. Privatization by itself did not

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How Conscription Ended Fifty Years Ago

United States military conscription, or the draft, ended on January 27, 1973, with the winding down of the Vietnam War. The draft law was due to expire at the end of June 1971. But US President Richard Nixon decided it needed to continue and asked Congress to approve a two-year extension. In March 1973, 1974, and 1975, the Selective Service assigned draft priority numbers for all men born in 1954, 1955, and 1956, in case the draft was extended—but it never was.
Nixon thought ending the draft could be an effective political weapon against the burgeoning antiwar movement. In his 1968 presidential campaign, he had promised to end the draft. During his time out of office, he had become interested in the prospect of an all-volunteer force, being influenced by Martin Anderson, a professor at

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States Can Curb Federal Power through “Soft Secession”

Former Mises Institute president Jeff Deist wrote on the concept of “soft secession” in September 2021. The article talks about how left-leaning states have an opportunity to embrace an abundance of progressive policies for their citizens—without leaving an open door for real violence to occur—through the pursuit of soft state secession. Some people in the left-thinking world are starting to get it. This soft secession principle applies to those living in the right-leaning states as well.
The article also talks about how people from certain ideological and geographic perspectives in the United States are embracing soft secession by moving to a state that more reflects their worldview. The 2020 US Census data and the currently updated estimated census figures show this happening with the

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In the Event of an Official US Bankruptcy

Economically speaking, the US government is bankrupt even if the government won’t admit what is obvious. But how would an actual bankruptcy proceeding go? 

Original Article: "In the Event of an Official US Bankruptcy"

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In the Event of an Official US Bankruptcy

The current known federal debt is $31.7 trillion according to the web site, US Debt Clock, which is about $94,726 for every man, woman, and child who are citizens as of April 24, 2023. Can you write a check right now made payable to the United States Treasury for the known share of the federal debt of each member of your family after liquidating the assets you own?
A report released by the St. Louis Federal Reserve Branch on March 6, 2023, stated a similar figure for the total known federal debt of about $31.4 trillion as of December 31, 2022. The federal debt size is so great, it can never be repaid in its current form.
Some of us have been in or known families or businesses who had financial debt that could not be paid, when adjustments like reducing expenses, increasing income,

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