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Tuesday, November 10, 2009

Where have we gone wrong?

In addition to their own magazine, airlines usually offer a complimentary copy of Skymall where unique odds and ends can be purchased by phone. I suppose enough people purchase items through this service since you can ordinarily find that catalog even when the in-flight magazines have already disappeared. If nothing else, it is a diversion on longer flights and I have found things in its pages that I wouldn’t have dreamed of looking for in a store. On a recent flight, I was thumbing through the Skymall and saw an interesting toy; a child’s ATM machine.

At first blush I thought to myself “Oh great…let’s start them on that road even earlier!” Once I actually read the ad, I slowly changed my mind. It wasn’t merely a toy ATM machine; it was an electronic “piggy-bank” too. When I was a kid there were toy wallets and toy cash registers that came complete with piles of toy money. My mother really hated those because within days, the toy money would usually be scattered around the house. As a toy, they gave you the opportunity to play as if you were a member of the real world but at a pretty stiff cost. Since those toys came with play money they never gave a child the sense of where money really comes from. I remember my own kids looking at me in disbelief when I wouldn’t buy something that was their latest burning desire because it was too expensive. They couldn’t believe I just didn’t pull out a credit card or go to the bank to “refill” my wallet.

I heartily recommend this toy ATM. The child receives a card and makes up their own PIN number. They can then put their own money in the “bank”…no, it doesn’t come with money. The machine will tell them what they have in their bank and using the ATM card, they can draw out what they have if wanted. The days of magic money falling out of the sky were over! Finally, a toy that parents could use as a tool to instruct their kids on real fiscal responsibility. Every deposit showed the increased amount in the account and conversely, every withdrawal showed the declining balance. The best part is that if you try to draw out more than you have in the bank, you are declined and that is a dose of reality that until now, most kids never learned.

Margaret Thatcher once said “The problem with Socialism is that sooner or later you run out of other people’s money”. The fact is the Federal government ran out of other people’s money a long time ago but like a child with no real sense of how money is made or in the value of thrift, has borrowed immensely against her own future. Thanks to the “progressive” tax structure, 47% of Americans pay no taxes and a fair portion of that 47% actually receive tax money in the form of earned income credits or out and out welfare. In a recent interview, people that were waiting in line for cash rent assistance in Detroit were asked where the money they were receiving came from and most had no idea. “We here to get Obama-money” one woman said. The interviewer continued “Where does Obama get it from?” Her answer displays the real problem “I don’t know….his stash. All I know is he’s giving it to us and that why we voted for him….We love Obama!”

Just like the kids throwing play money around the house, there is no thought as to where the money comes from and worse yet, there is no recognition that with a twelve trillion dollar debt and one-hundred trillion dollars in unfunded liabilities, that money will run out before their needs do. In an effort to show the compassion of the nation, Lyndon Johnson’s grand scheme was to create a national safety net to make sure the poor of this nation could survive. I’m sure this was less about compassion that it was to insure the electability of Democrats as his Great Society didn’t bother to heed the warning of Benjamin Franklin. Mr. Franklin correctly stated that “As soon as the people realize they can vote themselves money from the public coffers that will herald the end of the republic.” Johnson Democrats passed this in spite of massive oppositions even though common sense barriers to prevent abuse and fraud were ignored. Now the public entitlement programs funded through the Federal Government cost the taxpayers over seven-hundred billion dollars a year, which is larger than the defense budget for the nation.

Now the Federal government needs another bundle of play money since the expansion of Federal entitlement programs threatens the solvency of government yet again. The healthcare bill that passed the House of Representatives on Saturday is designed to do just that. The crisis that made this bill so imperative is not about the uninsured or the cost of healthcare for the nation’s citizens; it is in fact, about the cost of healthcare to the Federal government through Medicare and Medicaid. The bill as written would substantially raise taxes. It is designed to drive private healthcare insurers out of business and eventually force everyone into a single payer, government controlled, universal healthcare system similar to European systems. The easiest way to give government bureaucrats the money they crave is to funnel all of the money spent on healthcare in this nation through the Federal machine.

Once universal care is here, the Federal government will, in fact be the only customer and they will then be in a position to dictate the cost of services. That will decimate the quality of care as young people will not spend the time or money to enter an industry that is as heavily controlled as this promises to be. Universal care will also give us another Federal monopoly since they will eventually be the only insurer. As the only insurer, they will also be able to dictate what services are “acceptable” and with everyone plugged into the system, we will see waiting lines and the rationing of care based on how many years of quality life you have remaining as actuarial bureaucrats take your doctor’s place in deciding what care is warranted based on your age and condition and that is exactly what happens in Europe. Just like the woman that was standing in line for “Obama-money”, the entitlement culture is salivating at the thought of ‘free” healthcare without a thought as to what they will get or how it will be provided. What they don’t realize is that with this bill, free isn’t free and care isn’t care.

The expansion of an already bloated Federal entitlement program is irresponsible given the current debt load of the Federal government. Don’t get me wrong; there are things worth going into debt for. World War Two is a perfect example. The “perfect storm” of fascism and National Socialism were openly plotting to destroy America and sweep through our nation just as they did to Europe. The atrocities committed in the name of racial purity were inhuman and those that lived under Nazi and Japanese occupation were treated with a level of brutality unknown in modern history. This axis of evil had to be defeated at any cost and the cost was very high indeed. Still, the post war years rewarded America with financial boom as Europe and Asia rebuilt their burned and bombed-out infrastructure.

It took years but America slowly chipped away at the debt that we accumulated to fund the war effort. In 1946, our National Debt was roughly two-hundred and fifty billion dollars or 120% of GDP. By 1980, the debt had risen to nine-hundred billion dollars; however, the expansion of our economy had reduced the debt to GPP ration to 33%, a figure not seen since the 1920’s. While the growth of the national debt had kept pace with inflation since 1950, it has exploded again in the first ten months of the Obama administration. It is now at more than 90% of GDP (a 20% increase since George Bush left office) and is expected to exceed 100% of GDP by 2011, a rate not seen since World War Two.

If the CBO is as accurate in their predictions of the Healthcare Bill as they have been with other Federal programs, we can expect their estimated one-hundred and four billion dollar savings over ten years to turn into a seven to ten trillion dollar hit to the Federal budget over the same period of time. Congress knows this because like the guy that keeps climbing onto a broken scale to show his weight isn’t that bad, the Congress crafts the language of their spending bills to illicit these optimistic assessments from the CBO. Even the CBO knows it’s not true but they have to score the bills based on the language given to them and they are not allowed to enter the intent of Congress or their previous failure into those equations.

What is being done in Washington DC goes beyond irresponsible and with the Federal deficit climbing above a trillion dollars a year, has actually crossed the line and can only be described as the looting of the United States Treasury. This is beyond conscience and I would ask someone to question the legality of multi-generational entitlement programs. Having been born in 1957, where was my representation when Social Security was passed into law? Having been born in 1980, where was my son’s representation when Medicare and Medicaid were passed into law? My youngest grandson will not be able to vote for another seventeen years but not only him, but future generations of his family will be saddled with the burden of taxes imposed to correct the past hundred years of fiscal insanity perpetrated by the Federal government. Where is his representation? The principal of no taxation without representation did not foresee Federal programs in perpetuity and it’s about time we take every tax increase and entitlement program and bring them back to a vote for the benefit of the people that are paying the bill now. Let’s see how many stand that test.

Paul

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