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

The Real Healthcare Crisis

Unemployment has reached 10.2%, more than 2% higher than the administration promised we would see if the Stimulus bill were passed. The Stimulus bill has been a dismal failure and the government agency monitoring the funds that were spent has been accused of misreporting job data in an attempt to allow the President to save face as the economy continues to stall. But 10.2% doesn’t tell the whole story. When adjusted to add those that have exhausted their benefits or have taken part time work or minimum wage jobs outside of their regular industry to stave off financial ruin, the unemployment figure is a frightening 17.5%.

Job creation is something that government cannot do. Only thriving industries and businesses create jobs; particularly, the jobs worth having. The best thing government can do to help a stagnant economy is to place more money in the hands of consumers and to create an environment that business can grow in. Only tax relief and the elimination of meaningless over-regulation can provide real economic stimulus. Unfortunately, the President and the radicals he has surrounded himself with do not believe in free market solutions because they do not believe in the free market. A healthy and successful free market diminishes the importance of government so neo-socialist bureaucrats will always take actions that bridle the free market if for no other reason than to preserve their own power.

The last thing any government with a basic understanding of economic principals would do in a recession is add more taxes and more regulations to a faltering economy. Yet, that is exactly what they plan to do and more. If the House healthcare bill becomes law, small businesses and the wealthiest, most productive Americans can expect to pay massive new taxes. The bill also includes hidden fees and “excise” taxes that will fall heavily on the elderly.

Under the bill that passed Saturday night, citizens reporting income over $500,000 and married couples earning more than $1 million would be slapped with a 5.4% surtax on all income above those thresholds. After taking into account the expiration of the Bush tax cuts, those people would face a marginal tax rate of 45%.

Despite the President’s promise that small business will not suffer, very small companies, companies with payrolls with less than $500,000, will be exempted. All other companies will be slammed with new taxes adding up to 8% of their payroll if they don’t offer insurance as dictated by the Pelosi bill. The Joint Committee on taxation says that the surtaxes will raise $460.5 billion over 10 years, with almost a third of that amount coming from small business.

The Washington-based Americans for Tax Reform outlines other taxes the will result if the Pelosi bill is passed:

Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).

Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.

Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.

Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)

Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services. Managers' amendment delays until 2012

Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.

Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.

Repeal in Worldwide Allocation of Interest (Page 345): Repeals the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act. Original bill merely delayed for nine years

Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

Deny Cellulosic Biofuel Producer Tax Credit to “Black Liquor” Resulting from Wood Pulp in Paper Production (Managers’ Amendment Page 14)

It is clear there are far more pages in this bill devoted to taxes than are devoted to healthcare. If this bill is passed into law the taxes take effect immediately but the majority of the legislation actually dealing with healthcare does not go into force until 2013 and beyond. These taxes will further cripple the economy and independent estimates place the cost of this bill beyond mere dollars and cents as an additional 5 million jobs will be lost as a direct result of its passage.

The next assault on America is the Cap and Trade or “Climate Bill”. The taxes imposed on energy and business will spell the death of the American economy and the loss of personal property rights. Thanks to the banking crisis, the Federal Government already owns 40% of home mortgages in this nation. During the dark days between World War I and World War II, the Weimar Republic of Germany was faced with a collapsed economy and an explosion of their national debt. They monetized their debt by printing enough cash to cover it which caused a 10,000% rise in inflation as the gold reserves were no longer sufficient to cover the currency. The Republic created a new form of money backed by the only thing they had left….land.

Is this where we are heading? Will the Federal Government attempt to print us out of debt and as the economy crashes and more mortgages become the property of the United States; will we find ourselves in the service of the government or lose our homes? The government has already proposed the forgiveness of student loans for a ten year commitment to public service. The last time something like that was the routine order of business it was the dark ages and the “public servants” were called serfs.

Paul

What is the "Earth Crisis" This Time?

Even though it is painfully obvious that we are having difficulty determining if America can even afford the massive nine-hundred billion dollar healthcare bill Nancy Pelosi seems hell bent on passing this week, other factions in the Senate have already begun discussing the Climate bill as well. The damage the healthcare bill will inflict on our economy will pale in significance compared to the harm that the climate bill will create for all Americans. Well, almost all Americans. It appears that Al Gore and his closest friends are prepared through their investments, to turn millions into billions once this bill has passed into law.

But why are we even considering this? The scientists and organizations that have demanded immediate action have apparently been caught red handed falsifying data in order to support their global warming theories and Mr. Hanson of Nasa’s Goddard Space Center still refuses to release the data that he based his report on even though his peers have been unable to duplicate his findings. In fact, the data is so flawed that the proponents of the climate bill have changed the name of the crisis from “global warming” to “climate change” rather than have to answer for earth’s recent cooling trend.

I’ve stated in previous posts that the urgency of a global catastrophe fits very neatly into the general criteria laid out by neo-socialists; those that have already stated their strategy to use a crisis, man-made or otherwise, to destabilize the global economy. The enormous amount of resources that would be required to stave off certain doom in a global environmental crisis would devastate capitalism and bring about the collapse of the current geopolitical balance of power. This nothing new; in fact, it is little more that a revision of the Cloward-Piven strategy that we have barely remained one step ahead of since it’s inception in 1966. Cloward-Piven was directed at the United States but the eco-socialists are attempting this now on a global scale.

If you don’t believe it, then why is it that democracies and republics of the western industrial nations are the only ones being pressured to join this circus? China and India have already stated they have no intention of damaging their economic growth with restrictions on industry even though their carbon emissions are far greater than that of the United States and there is no hue and cry from the global environmental movement demanding their participation. Much of the third world is not required to participate by the basic provisions of the latest U.N. sponsored climate accord and in fact, they would receive monetary assistance and technological support under these accords that would allow them to industrialize. With that in mind, what is this but a blatant attempt by the UN and eco-socialists to disassemble the United States and distribute our wealth and industrial might evenly around the globe.

Of course, environmentalists accuse those that dismiss the validity of global warming, climate change or whatever the next name will be, of being ignorant and standing in the way of saving countless millions from doom. I think it’s more than fair that we look at the claims these same people were making forty years ago and examine their track record for accuracy.

U.S. Senator Gaylord Nelson (D-WI) founded “Earth Day” in 1970 to bring awareness to the impending global catastrophe that man’s ignorance had wrought upon the earth. Was Mr. Nelson a climatologist or an environmental expert? Uh, no; as you might have already guessed, he received a Bachelor of Arts from San Jose College but eventually completed law school in Wisconsin.

Environmentalists and sympathetic scientists from around the world gathered for Earth Day to make the public aware of what we had done to the planet and to convey the urgency with which we must act before our mistakes consume the planet and all life on it. Below are a series of quotes taken from the hysterical pleas being made all through this event; quotes that adequately display how wrong these people are, and remain to be. Quotes that show just how far they are willing to go to make you believe we must enact their radical agenda right now or face doom. Bear in mind when you read these quotes that they are forty years old and frame the core beliefs of the environmental movement in 1970.

“We have about five more years at the outside to do something."
Kenneth Watt, ecologist

“Civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind.”
George Wald, Harvard Biologist

“We are in an environmental crisis which threatens the survival of this nation, and of the world as a suitable place of human habitation.”
Barry Commoner, Washington University biologist

“Man must stop pollution and conserve his resources, not merely to enhance existence but to save the race from intolerable deterioration and possible extinction.”
New York Times editorial, the day after the first Earth Day

“Population will inevitably and completely outstrip whatever small increases in food supplies we make. The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.”
Paul Ehrlich, Stanford University biologist

“By…[1975] some experts feel that food shortages will have escalated the present level of world hunger and starvation into famines of unbelievable proportions. Other experts, more optimistic, think the ultimate food-population collision will not occur until the decade of the 1980s.”
Paul Ehrlich, Stanford University biologist

“It is already too late to avoid mass starvation.”
Denis Hayes, chief organizer for Earth Day

“Demographers agree almost unanimously on the following grim timetable: by 1975 widespread famines will begin in India; these will spread by 1990 to include all of India, Pakistan, China and the Near East, Africa. By the year 2000, or conceivably sooner, South and Central America will exist under famine conditions….By the year 2000, thirty years from now, the entire world, with the exception of Western Europe, North America, and Australia, will be in famine.”
Peter Gunter, professor, North Texas State University

“Scientists have solid experimental and theoretical evidence to support…the following predictions: In a decade, urban dwellers will have to wear gas masks to survive air pollution…by 1985 air pollution will have reduced the amount of sunlight reaching earth by one half….”
Life Magazine, January 1970

“At the present rate of nitrogen buildup, it’s only a matter of time before light will be filtered out of the atmosphere and none of our land will be usable.”
Kenneth Watt, Ecologist

“Air pollution…is certainly going to take hundreds of thousands of lives in the next few years alone.”
Paul Ehrlich, Stanford University biologist

“We are prospecting for the very last of our resources and using up the nonrenewable things many times faster than we are finding new ones.”
Martin Litton, Sierra Club director

“By the year 2000, if present trends continue, we will be using up crude oil at such a rate…that there won’t be any more crude oil. You’ll drive up to the pump and say, `Fill ‘er up, buddy,’ and he’ll say, `I am very sorry, there isn’t any."
Kenneth Watt, Ecologist

“Dr. S. Dillon Ripley, secretary of the Smithsonian Institute, believes that in 25 years, somewhere between 75 and 80 percent of all the species of living animals will be extinct.”
Sen. Gaylord Nelson

“The world has been chilling sharply for about twenty years. If present trends continue, the world will be about four degrees colder for the global mean temperature in 1990, but eleven degrees colder in the year 2000. This is about twice what it would take to put us into an ice age.”
Kenneth Watt, Ecologist

It’s time to stop fooling around with these people. The climate crisis is a created event and the voices of the 30,000 scientists that can prove that it is false must be heard. What is clear is that the data used by environmentalists to stake their claim of climate change was not misinterpreted, it was deliberately crafted to yield those results and when tested, they are the only ones that have come up with the results they say are proof positive. The real question is what is the political machine driving this attempt to crush the free market and democracy?

Paul

It's The Economy Stupid

The economy is in shambles, unemployment is at a twenty-six year high, the stock market fluctuates wildly with every new headline and Congressional approval is at its lowest point in decades. So why doesn’t the Federal government appear to “get it”? Since Barack Obama took office, there isn’t one thing that his administration or this Congress has done that makes sense in these difficult times. People are baffled as to why Democrats are still pressing for healthcare and climate legislation that would be difficult for a healthy economy to absorb and that is counterintuitive to any meaningful action that should be taken in a distressed economy.

The Republican’s claimed a victory in the recent gubernatorial races in New Jersey and Virginia when if fact, they have no right to that claim. The latest polls indicate that neither Party has gained favor with the American people and the grass roots have adopted a “throw the bums out” attitude that will permeate the political landscape in 2010. Chris Christie and Robert McDonnell did not win because they were Republicans; they won because even though they had both held political jobs in the past, their most recent positions were as US Attorney for Chris Christie and as Virginia Attorney General for Robert McDonnell, which effectively distanced them from the body politic.

Neither the Bush nor the Obama Stimulus plans have yielded measurable results even though both had taken different directions. The Bush administration issued payments directly to taxpayers to stimulate the consumer market while the Obama plan targeted Cities and States to boost public work projects. While the payments were directed at different segments of the economy they both had the same result, or lack of results, because the private and public sectors have something sadly in common. They are both in debt up to their eyeballs. The stimulus money received by taxpayers had been used for the most part, to pay off old debt. Credit cards and other consumer debt was what was most on the mind of the recipients. Similarly, the Obama payments to States and Cities went largely to close budget gaps created by shrinking tax revenues. That is why the administration had to shift their measure of success from job creation to how many jobs were saved, something that no one believes because it is impossible to prove.

Worse yet, is that the Federal Reserve began printing money equal to the amount of the Stimulus bill in spite of promises that they would not monetize the debt. That has already caused a 17% devaluation of the dollar that has many of our foreign creditors deeply concerned as American debt continues to rise. Candidate Obama spoke harshly about the $460 billion dollar Bush budget deficit while President Obama, proposed and passed a $3.6 trillion dollar budget which has ballooned his budget deficit to a record breaking $1.4 trillion dollars. Americans are well aware that this insanity cannot continue yet that epiphany somehow has not yet reached the collective consciousness of the members of Congress.

The President and the Democrats in Congress continue to push legislation for both healthcare reform and the climate that will place incredible strains on an already suffering economy. The employer mandates and taxes threatened by these two bills has placed the job market in a stall as employers wait to see what they will have to face before they will commit to anything that may increase their liabilities. It is in fact, the Federal government that has created this recession. The collapse of the banking industry has its roots in the Clinton administration when banks were forced under penalty of law to make high risk loans to low income families to bring “fairness” to home ownership. These loans would eventually fail just as the banking industry warned they would and now the Fed is punishing banks for engaging in risky business practices.

The fact is that the government can only create jobs by reducing the tax burden on business and by getting out of the way of the people that actually create the jobs. The Federal government is charged with regulating interstate commerce however, the definition of “regulation” at the time of the drafting of our Constitution was not to license, tax or control business, it was to “make regular” the interaction so that business dealings were uniform across state lines. While none would argue the need to extend regulatory control to insure public safety, every other regulation and tax placed on business has been little more than an impediment to the economic engine that drives this nation.

Healthcare reform promises an 8% payroll tax and a millionaire’s tax of an additional 5% to pay for portions of this massive government takeover of the healthcare industry. This has had the net effect of a nation-wide hiring freeze until businesses are sure the bill is dead and they are safe. Ironically, just as the Fed created the banking crisis, they also created the healthcare crisis. It is Federal prohibitions that prevent healthcare insurers from competing across state lines and that his strangled competition. The Fed also prevents small business from enjoying the same tax breaks for providing healthcare that large companies do. Could that be because large companies are unionized and in many cases, it is the unions that create the healthcare group and are paid to administrate it? We know that unions pay an awful lot of money to political parties and candidates; the same parties and candidates that keep the restrictions on healthcare in place. Those restrictions keep the cost of insurance high and make unions and union healthcare plans look very attractive to non-union workers.

The cost of healthcare insurance is also deeply affected by the reimbursement rate of Medicare and Medicaid to healthcare providers. Medicare reimbursement for services is between 70% and 80% of the billed amount. Medicaid is even lower. As hospitals and doctors struggle with the government induced shortages, those costs are eventually shifted to patients with private insurance as their budget issues force prices even higher. As insurance sees higher costs, they must raise premiums. The insurance company profits Democrats quote only seem high because they represent the accumulated profits of a multitrillion dollar industry. The bottom line for healthcare insurance companies are actually around 3% which is hardly considered a windfall in anyone’s book.

The frightening part is that the top 1% of income earners that Obama keeps targeting are actually wealthy enough that they really don’t have to play the redistribution game if they don’t want to. Stocks sales are volatile but hardly robust as once again, potential investors are waiting to see how much of their money they will actually get to keep. They could easily retire very comfortably on what they have and move to a country where the weather is pleasant, the dollar is stronger and the political winds aren’t blowing at hurricane force against them. We are already seeing a “tax exodus” from New York, New Jersey and California as the rate of taxation rises on the “wealthy”. If they would leave a State, is it really inconceivable that they would leave the nation if our fiscal policies towards the wealthy continue to turn from pestilent to confiscatory? If they do, who would the “top 1%” be then?

We are at a crossroads in American culture. The so-called progressive tax structure has created a condition where 47% of the people in this country pay no taxes at all. A portion of that 47% actually receive an “earned income credit” which is nothing more than the forced payment of money from one group of Americans to another and many have no idea where this money comes from other than the government. The Democrats have spent nearly the last hundred years pitting the poor against the wealthy in this country and our immigration policies see to it that the poor in this nation continue to grow in number. Once the number of taxpayers drop below 50%, the poor will have the political might to keep those in power that will finish their work of emptying the treasury to subsidize ever growing portions of the population, eventually forcing our nation into socialism or worse.

Paul

WHY?

The economy is in question, healthcare reform is in chaos, the national mood on climate change does not seem to support major legislation to restrict carbon and Afghanistan appears to have the President caught in a loop on reviewing strategy. For all intents and purposes, this administration seems to have very few answers but I am just not convinced that is true.

I believe the President and his inner circle have all the answers but since the truth would frighten most Americans they would rather keep silent and let the battle rage on between those that are asking the questions and the loyal supporters that insist he is doing all he can considering the mess left behind by the previous administration.

Let’s start with the Stimulus plan. $787 billion dollars was earmarked to provide a boost to the economy; or was it? Only a portion was spent and it has had little or no effect on the economy. Never mind the fact that much of what was spent went to cities and states with severe budget problems and there is no doubt that a good portion of that was used to help close some of those gaps. The administration made claims earlier this week that nearly 700,000 jobs were created “or saved”. Hmmm? It wasn’t long ago that Joe Biden was saying that the Stimulus bill was effective beyond his wildest dreams. Now that the employment figures are continuing to fall and the Dow is still fluctuating wildly, it is apparent that his was an overly optimistic view.

Isn’t it curious that the administration’s claims no longer center on jobs created but now include jobs saved, a concept is nearly impossible to verify. Closer examination of the published numbers found that a number of exaggerations were made. A sampling of the figures were put to the test and some recipients of stimulus money used the cash to give existing employees pay raises, but each reported saving dozens of jobs with the money, including one Florida day care that claimed 129 jobs saved when it only issued raises to current employees.

More examples include a Texas contractor whose business kept 22 employees to handle stimulus contracts saw its job count inflated to 88 because the same workers were counted four times. The water department in Palm Beach County, Fla., hired 57 meter readers, customer service representatives and other positions to handle two water projects. But their total job count was incorrectly doubled to 114. A Colorado business claimed that its stimulus contract created more than 4,200 jobs. TeleTech Government Solutions actually hired 4,231 temporary workers for its stimulus project, but most of them worked for five weeks or less and the others no more than five months. The most egregious is a Texas business that received $26,000 for a roof repair. He hired 6 workers and an inspector. When he reported the numbers to the government agency tracking the stimulus money they said “Oh no, you have it all wrong…how many man-hours were involved?” He told them the project lasted a total of 426 hours and POOF! It went on government record as having created 426 jobs.

Add all of this up and one has to wonder what the actual figured really are. Anyone with a modest degree of financial savvy knows that temporary work because someone else is paying the bill is not an actual job. A job is created when there is a sustainable demand for a service or product. Every company at one point or another has experienced a momentary sharp rise in activity. They meet that increased demand through a myriad of possible strategies such as shifting low priority work onto the back burner or by approving the limited use of overtime to meet the contractual demands but never, ever hire additional employees to meet a short term demand
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The Healthcare bill has only been back in the house an amazingly short amount of time but they still managed to add more than 900 pages and over $100 billion dollars to it. Now it is an amazing 18 inches of stacked paper worth an estimated $2.2 billion dollars per word and according to Nancy Pelosi, it’s ready for a vote. I get very nervous when the government seems to be playing fast and loose with 1/6th of the entire United States economy. Still, the press reports this news as if they were covering the opening of a new doughnut shop when what they should be asking is how a bill of this complexity could have been produced in that period of time without cutting major corners in the legislative process including some healthy and much needed debate?

The fact is, it keeps only a few of the President’s promises to the American people. It does not cover all of the uninsured, it is only budget neutral if you throw out generally accepted accounting principals, it raises taxes on everyone by proxy since it taxes damned near everything but your actual income (provided you make less than $250,000 or your income is taxed then too). It decimates private healthcare and beginning on page 90, actually lays out the transition timeline for driving people with private healthcare plans into the government exchange. The few private plans that remain standing will have their premiums triple. Medicare Advantage will face severe cuts, Medicare/Medicaid reimbursement rates will be slashed, further damaging the doctors that accept those plans and there is a panel that will determine what is covered and how it will be administered.

The climate bill is supposed to address the global concern of carbon dioxide but only western industrial nations are being driven to adopt these measures. The largest producers of carbon will not participate and pretty much the entire third world is exempt in the U.N. equivalent of “burn ‘em if you got ‘em”. Many member nations of the European Union had been suckered into this during the Kyoto conferences of 1997 and have suffered disastrous effects. England has gone as far as installing weight meters on trash cans in urban areas so that their citizens can be assessed an additional tax based on the amount of non-recyclable trash they produce.

Now that Kyoto 2, otherwise known as the Copenhagen conference is just weeks away, England and Germany are urging the United States to follow their lead in reducing carbon output. But is it really about the saving the planet or are they simply trying to level the economic playing field because of the devastation the Kyoto accords have wreaked on their ability to compete in a world market place? Isn’t it curious that a Germany company has recently rented part of an old GM manufacturing plant to make air conditioning compressors in the United States far from the carbon limits in their own country? If we pass this here will our few remaining manufacturing businesses be forced to leave our country as well, just to remain in business?

All of this is supposedly being done to reduce carbon which we are now finding is not the problem we thought it was. The idea was created by environmental extremists that shouted loud enough and long enough to catch the ear of some equally extremist legislators. Nasa’s James Hanson produced a report supporting the theory of global warming that the environmental movement and Al Gore have waved as a banner of proof positive since it was released. Independent scientists have recently come forward saying their data shows that the 1930’s were far warmer than recent years and that arctic ice is no longer receding, bringing the Hanson report under scrutiny. When other scientists could not reproduce Hanson’s conclusions they asked to see the data sets that Hanson used to construct his report. To this day, Hanson refuses to release the data and will not discuss the issue further.

Tree ring data accumulated by the IPCC (The International Panel on Climate Control) also issued findings that reinforced global warming theories but once again, peer studies cannot reproduce the famed “hockey stick” graph that would illustrate a recent spike in global temperatures. Many things affect tree ring growth aside from temperature including annual rainfall and soil composition. It was disclosed that the IPCC had hand selected tree ring samples that would only produce the results they wanted. When an honest scientist in the IPCC program accused them of picking cherries he was told “You have to pick cherries if you want to bake a cherry pie.”

This is not the sort of behavior you would expect to find in a serious scientific community; but the IPCC is not a serious scientific community. It is a conglomeration of environmental activists and a few scientists that support environmental causes. In fact, few of their scientists are climatologists but are rather, associated with other totally unrelated fields of science.

Worse yet, while the terms of the Copenhagen accords are nebulous and still being constructed, it is clear that if America enters into this agreement that many of the decisions we make as a nation regarding energy and ecological policies will be subservient to the policies issued by an international climate panel and that spells the end of American sovereignty. Don’t forget, that the only advantage that America still has in this global economy is abundant and affordable energy. Without that, we cannot compete against nations that allow businesses to pay their people ten dollars a week.

All of these things can only lead us into one school of thought. Why? Why would we authorize an $800 billion dollar stimulus plan that will not create anything more than a momentary increase in temporary labor? Why would we seek to pass a healthcare bill that does nothing to solve the major problems of cost and availability of healthcare? Why would we seek to pass climate legislation and enter into international accords that will place American sovereignty under the control of the U.N., damage our economy, send our few remaining manufacturing industries to foreign lands and yet yield no measurable benefit to the climate?

The combined effect of these plans and programs spell doom for the United States and yet despite massive and vocal opposition from the citizens of this nation, the President and his circle of advisors seem to be hell bent of pursuing these very interests. We already know that many of his closest advisors are radical Marxists that have a distain for free market capitalism and an open and professed admiration of Mao Zedong. Is that the answer? Is that the missing piece of the puzzle? We already learned through Cloward and Pivens that radical Marxists generally believe that the US will accept only Socialism after Capitalism has been destroyed. Since that is the obvious sum of these programs I can only believe that this is the intent.

I heard a Democratic strategist say that this is absurd. “Why would Obama do that? Neither he or any Democrat that voted with him would ever be elected again!” That may be true in a true Republic but will the electoral process still be in force in a Socialist America that is subservient to UN policy? Will the Constitution even exist in the form we know today or will it fall victim to other international accords? And that is a very interesting question.

Paul

The Healthcare - Frankenstein Connection

Like hundreds of other really bad horror films, the healthcare bill has been revived for yet another sequel. Just like the movies, most of the actors are the same; except of course, the ones that were killed off in the previous movies. The main character has been resurrected for each new film even though the end of the previous films seemed to suggest this ghoulish figure had met its demise.

In the original healthcare fright, Universal care was created by the evil doctor, Baron Von Clinton. That was more of a suggestive film since the horror remained hidden from view behind the closed doors of the conference room where it was created. It threatened the nation until it was eventually killed by common sense.

In the first sequel, “Son of Clinton”; Clinton’s protégé, Barack Obama, recreated the evil doctor’s work but this creature escaped the house and invaded the Senate. Then there was “The Curse of Clinton” featuring Max Baucus. The creature was altered by a committee of meddling scientists. Larger than ever, it left the Senate and returned to the house where it was created. This lead to the next film in the series; “The Bride of Clinton”. The Bride of Clinton” staring Nancy Pelosi, has reached monstrous proportions after an additional 900 pages had been added. This one threatens to challenge your senses as early as Thursday in a theater near you.

In the original Frankenstein movies, the real menace was not the monster, but the scientist that dabbled in the areas of life and death traditionally reserved for God. In his attempt to create life, this misguided doctor created a monster. While he could reanimate the dead, he could not give the beast something he had no knowledge of; a soul. Just as Frankenstein created his monster through ignorance, Congress has now created their own monstrosity. They may know legislative language but they have no idea of what it would take to actually create a soul for this document.

They are not doctors so they do not understand medicine. Most have been in public service their entire lives so they have no idea how business functions let alone how to run a business. There is only one Congress so competition is simply an exercise in theory to them. They are legislators and anytime legislators try to write laws that directly control the mission of business or that attempts to hamper personal choice, it is doomed to end in failure.

Frankenstein was so engrossed in his quest to discover the secret of life that he never bothered to consider if he should. Congress is now so obsessed with passing healthcare legislation that they have cobbled up this hideous 1900 page monster from the dissected pieces of all of the other dead bills and now they intend to breathe life into it before they know the full scope of what it will do once it has opened its eyes.

This bill is intended to eliminate private insurance despite the Presidents promises. Within the bill it is stated that in 2013, people with private or small group healthcare plans will be transitioned to the ”exchange” where they can then get a plan acceptable to the Federal Government. Similarly, the only employer provided healthcare plans that can be “grandfathered” in, are plans that meet the benefit descriptions required in the bill and that are in effect prior to the first year of this legislation. Of course we all know that healthcare plans are annual contracts and the benefit levels and deductibles change quite frequently when the contracts are renewed. It’s safe to say that even though you have a plan that qualifies under the grandfather clause, that plan will no longer qualify if it changes in any way during contract renewal. The few employer based plans that remain grandfathered will most likely be the so-called “Cadillac” plans that they intend to tax out of existence by tacking a 40% surcharge onto the premium to help fund the public option or that cease to exist when they are forced to compete against a heavily subsidized public plan.

The plan creates a healthcare benefits board that consists of the Surgeon General and twenty-six additional government and non-government people that are appointed directly by the President or appointed by other Presidential appointees. This board will determine the benefit levels in the plan, the rate at which doctors and hospitals will be reimbursed (for the public option) and yes, the allocation of resources. It is this board that will be the “death panel”; not the end of life counseling everyone was afraid of.

You see the real aim if this legislation is not to insure that all American’s have affordable healthcare. Independent studies have already concluded that private insurance costs will triple under this plan and the premium costs for the public option or “Consumer Option” as Nancy Pelosi wants to call it, will only be marginally lower than private plans unless you qualify for the redistribution of wealth (subsidy for low income families). It is not about insuring the uninsured as the CBO states that this bill will only cover 2% of people under the age of 65.

The CBO says it will cost 1.05 trillion dollars in the first ten years even though the actual benefits don’t fully kick in until year five. That means that if the government keeps its promise to make the required cuts (which they have never done in the past) and keeps its promise to eliminate waste, fraud and abuse (which they have never done in the past), this bill will actually cost close to 3 trillion dollars in year five through year fifteen. In fact, the bill’s “budget neutrality” is a myth of creative accounting unless private care is eliminated, everyone is forced into the public option, allowing the healthcare benefits board to mandate lower reimbursement rates for healthcare providers; which is exactly what I think this is designed to do.

This bill is not about care, your costs or the uninsured. It has everything to do with the Federal entitlement programs that already exist. Medicare and Medicaid were in serious trouble three years after they were created. In 1968, Congress raided the Social Security Trust to use those funds to shore up Medicare and Medicaid. They then placed Social Security as a line on the Federal Budget and stuffed it full of IOU’s. Now that the baby-boomers are retiring, people are living longer than ever and Medicare and Medicaid are still a financial train wreck, the government needed to find an innovative way to get more money from the public to keep the Ponzi scheme alive. The healthcare industry represents one sixth of the United States economy and having that money run through the government entitlement machine first would keep the gears of that machine greased for an awfully long time before it would be in crisis again; or so goes the logic.

The problem with that logic is that the government has never managed any public entitlement program effectively, efficiently or with even a modest degree of success. As I said before; they not businessmen nor are they doctors; they are legislators and truthfully, they aren’t very good at that either. If this is in fact a plan to restore solvency to the Federal Budget only one of two things can happen. It will fail miserable (as usual), bankrupt the Federal Government and collapse our economy or it will reduce the healthcare system in this country into the same bureaucratic nightmare that England has had since World War II, where hospitals have longer lines than airports, benefits are rationed and care is determined by placing a value on life.

So here we are, November 3, 2009 and today’s election may spell life or death for the healthcare debate as President Obama is, in essence, on trial in three east coast races. A loss for Democrats in the three most visible races, New York’s 23rd Congressional District and the New Jersey and Virginia gubernatorial races will signify that the nation is not in support of massive spending bills and the cut-throat politics that are being employed to pass them.

To borrow a phrase from the Clinton campaign…”It’s the economy stupid!” People that are out of work want to see government action that provides incentives to businesses that actually create lasting jobs. A half-assed stimulus plan that provides a momentary bump in GDP is not being seen as meaningful. The lucky people that still have jobs live in fear of losing them as every piece of legislation currently under discussion threatens new restrictions and taxes on the people that employ them and they know that if these bills pass, their employers will have to make hard choices about who will stay, and who will go. The real engine of the economy is on hold. No one in business is expanding until they know what their liabilities will be. Investors are holding off as well; after all, why should anyone place capital at risk if the potential gain might be taxed until the profits resemble what can safely be acquired through T-bills?

The trend is definitely over and the sun is setting on the FDR Democrats. Massive spending legislation, omnibus bills, high taxes, new entitlement programs and especially non-accountability in government are all out of fashion now. If NY, NJ and VA all turn on Obama, look for a mudslide in 2010. I say mudslide only because that describes the people that will be displaced far more accurately than “landslide” ever could.

Paul

Wolves in Sheeps Clothing: The Scozzafava Story

The Congressional race in New York’s twenty-third district is turning into one of those defining moments in political history. This Congressional seat has been held by Republicans since 1993 and probably wouldn’t have drawn nearly as much attention if it were not the subject of a special election one year after the election of Barack Obama. The former U.S. Congressman from the twenty-third district, John M. McHugh, resigned on September 21, 2009 to assume the office of Secretary of the Army in the Obama administration. Democrat Bill Owens, Republican Dierdre (Dede) Scozzafava, and Conservative Doug Hoffman entered the race for the vacated seat.

Since Barack Obama had won by a narrow margin in the general election of 2008, the Democrats suspected that they could possibly win the twenty-third district again. Some say that while McHugh was one of several qualified contenders for Secretary of the Army, that his eventual appointment to the cabinet was part of a strategy to remove an incumbent from that district to better the chances of a Democrat challenger.

The importance of a win for Democrats in the New York district became elevated as Creigh Deeds, a figure in Virginia politics since 1991, found himself pitted in a much closer race for Virginia governor against Republican Bob McDonnell than expected. As the battle for healthcare raged in the Senate, Deeds found himself trailing McDonnell in the polls and by October, the gap was already double digits. Incidentally, Deeds had only lost one election in his career and that was the 2005 race for Virginia Attorney General which he lost to Bob McDonnell by a margin of only three-hundred and fifty votes.

More bad news looms for Democrats in New Jersey as the incumbent Governor, Jon Corzine, finds himself locked in a three way battle for that election against Republican Chris Christie and Independent, Chris Daggett. Corzine was widely criticized for doubling taxes in New Jersey, bringing their rate to one of the highest in the nation. Even still, he held an early if not slim lead in the race but lost momentum as the economic forecasts worsened. As the recession deepened even further, people began to accuse the Obama administration for a lack of meaningful action, and since Corzine had aligned himself with the administration’s agenda, he slowly began to share in the administration’s pain.

As Election Day draws closer, Daggett’s numbers have been dwindling as his relatively few supporters realize the futility of his situation. As Daggett’s numbers droop, those that saw Daggett as a non-party alternative to Corzine shifted their support to Christie. Daggett still holds a minor percentage of the vote, mostly by those that are angry enough with government that they can’t bring themselves to vote for either party or by those that find Daggett’s environmental platform to their liking. This leaves Corzine and Christie in a statistical dead heat, with Christie leading by only one percentage point with one day remaining until the election. Since Daggett was an independent with an environmental twist, his supporters may bail at the last moment and support Corzine for a last minute rally or they may be so disgusted with the cost of Corzine’s tax policies that they may not vote at all. We will have to wait until tomorrow for the final word on this race.

In a move that surprised all but those that saw Scozzafava for what she really is, Scozzafava withdrew from the New York race yesterday and issued a statement urging her supporters to vote for the Democratic candidate, Owens. This infuriated Republican leadership and voters. Many stated that this was the act of vengeance for Republican leadership shifting their support to Hoffman when Scozzafava’s numbers proved disappointingly low and her third place position continued to drift further behind Owens and Hoffman.

This was no act of vengeance. Scozzafava is not a spoiled child throwing a tantrum at her lack of Republican support and to those of us that took the time to examine her; it was no surprise that she endorsed Owens when her own bid for that seat collapsed. Scozzafava is at heart, a liberal Democrat so why in God’s name did she join the Republican Party? Well, you can’t join a horse race with a giraffe and she lived in an area of New York that traditionally supported Republican candidates. Since her desire was to enter New York politics, she basically had two choices; join the Republican Party as a Democrat “spook” or move to an area that was more favorable to her ideology. She chose the former.

Her sneaky little plan worked and she was elected to the New York State Assembly in 1998. Dede was actually a good fit in her newly acquired seat since the New York State Assembly is widely recognized as one of the most dysfunctional state legislative bodies in the nation. Liberals in New York tend to blend in nicely earning reelection time after time regardless of their home district as each represents just one drop in the sea of liberals that flood that house annually.

This race was different in that the Tea Party movements had coalesced in their opposition to the radically socialist agenda that the President was trying to force through Congress. People were taking notice, not just at the wide support the President had in the extremely liberal arm of the Democratic Party, but in the ineffectual opposition that was launched by the Republicans. The idea that several so-called Republicans were actually considering supporting these bills troubled Republican and Conservative voters deeply, causing them to question their allegiance to a Party that was obviously disconnected from the conservative views of the constituency. Had the Republican Party lost its soul or was this some lame attempt to “remain in the game” when the Democrats held power in both houses of Congress and had a willing partner in the White House? They haven’t figured out that just because you negotiate the menu with a cannibal, it doesn’t mean you won’t end up as the main course anyway.

The Democrats are trying to chalk this up as deep divides in the Republican Party and that may be partially true. Tea Party patriots are demanding that the Republicans get back to their roots or risk losing the Conservative vote. They are willing to support Conservative third party candidates and even lose elections to the Democrats in certain areas to reinforce the message. The other side of the coin is that the Scozzafava’s in the party may find themselves being tossed out in future elections as the “grass roots’ go on a political witch hunt to drive these wolves in sheep clothing from the party. Either way, this election is just as much about the purity of the Republican Party as it is about the agenda of Barack Obama. The family feud that has the Democrats smiling now may bring them heartburn in 2010 as they find they are facing a unified and focused Republican Party for the first time since the days of Ronald Reagan and that my friend, is a change we can really believe in.

Paul