"I've bent over backwards to work with Republicans," Mr. Obama said in his news conference Monday (7/11) on negotiations to raise the ceiling on the national debt. Senate Republican Leader Mitch McConnell disagrees.  "The president has presented us with three choices: smoke and mirrors, tax hikes, or default.  Republicans choose none of the above." Mr. Obama's aides told reporters he'd offered to trim spending by $1.7 trillion over the next ten years in exchange for tax increases.  That $1.7 trillion consists mostly of phantom cuts - "fairy dust" is what Rep. Allen West (R-FL) calls them.  So what should Republicans do?  How about looking at Minnesota?  That's where they'll find Mr. Obama.

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.

Tim Pawlenty should have stayed in Minnesota.  Instead of running for a third gubernatorial term, he decided to run for president.  Big mistake. Prior to the GOP debate in New Hampshire June 13, he'd been gaining some traction by denouncing ethanol subsidies in Iowa, calling for Social Security reform in Florida, and making the most comprehensive statements on foreign policy of any candidate.  Then he zinged Mitt Romney by coining the clever, and accurate, term "Obamneycare" to highlight similarities between Obama's health care plan and the one Romney imposed in Massachusetts when he was governor (2003-2007).   Conservatives who'd overlooked him looked again with new respect. Yet after throwing down the Obamneycare gauntlet on June 12, Pawlenty refused to confront Romney on it during the debate the very next day.  He wimped out, and his candidacy may never recover. Yep, he shoulda stayed in Minnesota, for with Washington gridlocked, action on the fiscal crisis has moved to the states.

Did a secret meeting on the Fourth of July break the biggest scandal since Watergate so far open the "mainstream" media can ignore it no longer? The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) deliberately permitted the transfer of more than 2,000 firearms to Mexican drug cartels, four ATF whistleblowers told a House committee June 15. The guns have been linked to the deaths of 150 Mexican soldiers and policemen, and at least one U.S. law enforcement officer. The Washington Post was outraged... at Rep. Darrell Issa, R-CA, chairman of the House Oversight and Government Reform Committee, for bringing the scandal to light. But in a meeting on the Fourth with Rep. Issa and Sen. Chuck Grassley, R-IA, Acting ATF Director Kenneth Melson confirmed what the whistleblowers said, and then some.  Mr. Melson's testimony is why the "Fast and Furious" scandal may be Mr. Obama's Watergate.

Beware Greeks bearing debt -- or any other country that has too much of it. Despite ever-increasing government regulation of banks, which often are required to hold government debt as reserves, the systemic risk of a failure in the global financial system is growing rather than diminishing. There are solutions that require less, rather than more, regulation. If you look at the big banks that have been in trouble or the banks that regulators and others worry about being in financial trouble, you will notice that virtually all of them have a corporate form of ownership and are heavily regulated. They also increasingly are being forced to be tax collectors for governments. There is an alternative form of bank ownership that is likely to lead to fewer problems and avoid the "too big to fail" problem, and that is mutual-fund banking.