The Hypocrisy of the Millionaire ‘Tax Me” Movement

"I want more of your money to spend on what I want
to spend it on! Not you. Me!"

Massachusetts Senator Elizabeth Warren wants to pass a “wealth tax” of 2% on assets held by rich people over $50 million and 3% on assets over $1 billion as the next President of the United States of America.

Some say wealthy people support such a tax. “Over the years, we have seen that this population is willing to pay more,” said George Walper, president of Spectrem Group which did the poll survey with CNBC.

Some uber-rich people such as Warren Buffett have said for years that he wants to pay more in taxes.

Take it from someone who dealt directly with very smart tax lobbyists on Capitol Hill for years: 

‘Rich people do not want to pay more in taxes, period!”

If they did, they would not hire such expensive tax lobbyists. Nor would they hire very expensive tax lawyers and accountants by the boatload each year to find ways to minimize their taxes, not increase them.

Rich people can pay more taxes today if they so choose. All they have to do is fire every expensive tax lawyer, accountant and lobbyist they have retained to find ways to shelter income and not expose all of it to the full taxable rates set by Congress.

If they get a refund, they can deposit it in the Gifts to Reduce the Public Debt account at the Bureau of the Fiscal Service of the US Treasury.

$4,686,987.27 has been paid into this account in 2019. Our federal deficit is expected to be $896 billion this year. Adding more than 191,000 times more debt over debt reduction payments is not a long-term solution to our debt bomb crisis.

Even smart well-meaning multi-millionaires should understand the futility of doing so.

The Spectrem survey was done with 750 high net worth individuals split across political lines. There are 14 million people in America with investible assets of over $1 million. If all of the 750 respondents held assets below $50 million, of course they would support a higher tax on the uber-wealthy above them.

One thing the survey did find was that 72% of the respondents did not support eliminating tax deductions. Of course not; rich people can afford to find complicated tax schemes with multiple deductions to prevent their income from being taxed in the first place.

One very wealthy person told me: “No one I know who is rich is stupid enough to pay themselves more than $10 million in salary to begin with. I haven’t taken any salary in the last 20 years. Then I would have to pay income taxes and Medicare Part A payroll tax on all of that $10 million. Any income I make comes out of capital gains which is taxed at a lower rate with no payroll tax.”

Capital gains of asset values are taxed at 15% up to $488,850 and at 20% above that. That is far below the top marginal income tax rate of 37% today.

Very wealthy people don’t pay the high marginal tax rates based on the published tax tables from the IRS. They target an effective tax rate they choose to pay to the government, usually far below 20% of their income and tell their accountants and lawyers to find ways to do it.

Warren’s proposal is scored to increase revenues by $275 billion/year. It might reduce annual deficits to around $500 billion if spending was held constant at current baseline levels.

However, Warren and all of her very left-leaning socialist Democratic presidential candidates want to add on trillions of dollars of more spending for free Medicare for all, education for all and a guaranteed income for all.

$275 billion raised in new taxes, from any source, under their policies would be like spitting in the wind.

Wealthy people saying they want Elizabeth Warren to raise their taxes are being politically hypocritical. .

Just pay more taxes right now if you want to. There is nothing stopping you.

(first published in North State Journal 6/19/19)

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Politics Is A Strong and Slow Boring of Hard Boards

Max Weber

Max Weber, a German sociologist and philosopher in the early 20th century, observed the truth about how difficult politics really is:

“Politics is a strong and slow boring of hard boards. It requires passion as well as perspective. Certainly all historical experience confirms — that man would not have achieved the possible unless time and again he had reached out for the impossible.

“But to do that, a man must be a leader, and more than a leader, he must be a hero as well, in a very sober sense of the word. And even those who are neither leaders nor heroes must arm themselves with that resolve of heart which can brave even the failing of all hopes.

“This is necessary right now, otherwise we shall fail to attain that which it is possible to achieve today.

“Only he who is certain not to destroy himself in the process should hear the call of politics; he must endure even though he finds the world too stupid or too petty for that which he would offer. In the face of that he must have the resolve to say ‘and yet,’ — for only then does he hear the ‘call’ of politics.”

If only there was some way to make sure that every elected public official now in office has read Weber’s quote, memorized it and taken it to heart with them into work every single day. We might have a shot at solving real problems then instead of engaging in the kindergarten antics we see daily in Congress.

However, not every elected official has the capacity to be a great leader. True leadership is as rare as the most precious gemstone.

Weber says the true leader-hero “must endure even though he finds the world too stupid or too petty” which is very difficult for many successful people.

“Have you watched these clowns on the city council on local cable access? They are idiots!” I have heard many successful people say. “I have no intention of being in the same room with such people!”

“Yes, but those clown people are making laws that you successful people have to abide by and follow,” I tell them.

Blank stares ensue.

“And if you are as smart and successful as you think you are, don’t you think you can run circles around the idiots and cretins on any legislative body and outsmart them and craft legislation more to your liking than theirs?” I will usually follow up.

Blank stares again.

Successful people have no one to blame but themselves when it comes to electoral politics. They don’t run in the numbers they used to, even as recently as the 1980s. Once they ceded the battlefield of politics to less talented people, we as a nation got what we deserved: stalemate on every big issue we face, name-calling, finger-pointing and $21 trillion in national debt and counting.

“Man would not have achieved the possible unless time and again he had reached for the impossible.”

Weber correctly points out that leader-heroes have to have the vision to see where our nation can go together before the rest of us can get there.

Civil rights were not achieved by everyone accepting the status quo forever. Balancing the budget from 1998-2001 was not done by congressmen who promised not to cut spending or reform entitlements because they knew it was morally reprehensible to not succeed.

We need leader-heroes with vision and guts. The best leaders don’t care whether they get reelected or not.

“Only he who is certain not to destroy himself in the process should hear the call of politics.” Leader-heroes have the intelligence, the internal fortitude and the reasoned experience to avoid the pitfalls of politics and public service.

We just need more of them.

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The Upside of Inequality

Many people hear the term “income inequality” and think: “We gotta do something to fix that!”

Which almost always means pass more legislation and give more power to government officials.

Ed Conard, former managing partner of Bain Capital, thinks differently. He sees rising income inequality as a good sign for an economy, not as a negative.

As he writes in his eminently readable book, “The Upside of Inequality: How Good Intentions Undermine the Middle Class”:

“Rising income inequality is the by-product of an economy that has deployed its talent and wealth more effectively than that of other economies — and not from the rich stealing from the middle and working classes.”

How can an increasing amount of wealth in the hands of relatively few people at the top of the wealth ladder be “good” for America when the press and the left keep telling us that the middle-class is disappearing and the poor and near-poor are starving to death?

Since time immemorial, poor and working-class people have viewed rich people with a mixture of envy, distrust and distance. For good reason. Prior to World War I, working people the world over were essentially serfs to the king of the country or the powerful oligarchs who ruled commerce and government with an iron fist to protect their wealth, interests and superior way of life.

Robber-barons of the late 19th century used unscrupulous methods and bribery to gain their wealth at the expense of competitors, and they kept many workers as close to poverty as possible to maximize their personal profits.

As a result of that experience 100 years ago, the left sees capitalism as a zero-sum game; the rich get richer while the poor get poorer. Vote for them and they will fix it, they say. With more government, more laws and more distortions to market forces.

Conard takes a penetrating look at the root causes of income inequality at its core in economic terms, not emotional or political terms. He cites study after study that confirmed what most people know intuitively: “high-wage economies that diminish incentives to produce innovation by taxing success more heavily, increasing government spending and distributing incomes more equally have grown more slowly with lower median incomes.”

The reason for stagnant low wages for unskilled and uneducated people in America can be attributed, he says, primarily to three factors: a near unlimited supply of low-skilled, low-wage workers domestically and abroad; lack of proper education to meet the needs of 21st century businesses; and anything that diminishes the appetite to take on higher levels of risk by investors and entrepreneurs.

Conard’s book is a compendium of useful facts and figures anyone interested in this issue should have handy. To prove his point about American free enterprise being the best vehicle for job growth, he cites many facts including:

• Since 1980, five times as many companies have been created in the U.S. that became worth more than $1 billion than in all of Europe combined.
• Since the mid-1970s, not one single company has been created in France that has grown to be worth more than $1 billion. 
• Since 1980, the U.S. economy has produced enough jobs to increase employment by 50%, twice the growth rate of Germany and France and three times the rate of Japan.
• Employment has surged from 99 million people working in 1980 to 156 million today in America.
• Median after-tax incomes for Americans are 15-30% higher than for Europeans and Japan

We should be overjoyed and thankful to have had the good fortune to have lived during such a time.

Instead, we have a political left and a compliant press painting a dystopian present and future for all Americans almost exclusively for political purposes.

The 2020 elections will offer us a country a clear choice between capitalism and socialism. Why choose socialism when capitalism offers much higher prosperity and standards of living for everyone?

(first published in North State Journal 6/5/19)

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The Reason Why We Remember On Memorial Day

Coach Wallace Wade of Duke University

(first published in North State Journal 5/29/19)

Memorial Day has come and gone. Many people went to the beach which signifies the official beginning of summer. Others had cookouts with family and friends or attended baseball games.

Less than 5% of Americans attended a parade, a memorial service or visited gravesites of fallen soldiers who gave their lives in defense of our freedom and way of life.

Originally called “Decoration Day” after the Civil War because people would decorate the graves of soldiers with flowers, Memorial Day became an official federal holiday in 1971.

Less than 500,000 of the 16 million Americans who served in WWII are still alive today. As revisionist historians try to expunge all of the good America has done in the world, younger generations need to be reminded time and time again about past heroism so they can pass it on to their children and grandchildren.

Why did such heroes fight the Nazis and Japanese in World War II in the first place?

One prime example was Coach Wallace Wade of Duke University for whom the football stadium is named.

In 1941, Coach Wade had maybe the best job in college football. He was the “Coach Nick Saban of Alabama” of his time not only because of what he did at Duke but because he won three national titles by taking the Crimson Tide to three Rose Bowls in the 1920s to establish Alabama as the king of college football which they still rule today.

He was of such stature that when the 1942 Rose Bowl was about to be canceled due to the attack on Pearl Harbor, he persuaded the Rose Bowl committee to move it to Durham, the only place outside of Pasadena it has ever been played.

After Duke lost to Oregon State 20-16, virtually all of the players enlisted in the military within 30 days. They were 18-to-23 years old.

So did Coach Wade. He was 48 years old at the time. Think Nick Saban leaving LSU to volunteer for duty in Afghanistan at the time; everyone would have thought he was nuts.

Why did Coach Wade do that? He didn’t have to give up a great job and go to war. The upper age limit for the draft was 37. He was 11 years over the limit.

No one would have begrudged him for not serving if he stayed at Duke to coach during the war so that fans could get some respite on fall afternoons from the dreary war news of the day.

Lt. Colonel Wallace Wade fought in Europe in the Battle of the Bulge in the bitter winter of 1944. He faced real danger and live ammunition in the face of a desperate enemy simply because he believed the freedoms of America were at risk of being lost forever to a despotic dictator, Adolf Hitler and the Nazis.

He did not think American values of freedom and independence were terrible. He thought they were great and worthy of preserving for us, the future generations of Americans.

When asked later in life by a sports reporter if losing in the last 40 seconds of the 1939 Rose Bowl to Southern Cal which ended a perfect undefeated, untied and unscored upon national championship season for Duke was the worst moment of his life, Coach Wade smiled and said:

‘No. The worst moment of my life was when I was not allowed to be in the first wave at Normandy on D-Day.”

He was age 52 on June 6, 1944.

4000 Allied troops died in the first day at Normandy. 37,000 Allied soldiers were killed over the next 5 days in the Battle of Normandy.

That is why we must remember men like Wallace Wade on Memorial Day. Without them, we would not enjoy the freedoms we do today. We should make every day a living breathing “memorial day” to them so we never forget.

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“I Will Never Compromise!”

Candidates on the campaign trail routinely make this bold proclamation: “I will never compromise!”

Have they ever heard about The Great Compromise of the Constitutional Convention of 1787? The Missouri Compromise? The FDR/Robert Doughton compromise to pass Social Security in 1935 in return for the Blue Ridge Parkway coming through North Carolina?

The whole concept of America as a self-governing constitutional democratic republic rests entirely on the intelligent practice of compromise. To assert otherwise shows a complete misunderstanding of American history.

What does “never compromising” mean exactly? Do they really mean never compromising their “values”? Or their “principles”? Or their “political goals”?

Politicians have a very hard time understanding the difference between all three. As a consequence, they usually collapse all three into one pot and then fail to accomplish anything major because they can’t separate their values from their principles and political goals.

Bernie Sanders may be the most “principled” of all politicians. Even though everything he says is wrong and won’t work, his values line up with his principles and political goals and he is consistent at least.

By contrast, take every conservative candidate for Congress for the past 20 years. They promise, in order, to: 1) Cut Your Taxes! (check); 2) Strengthen the Military! (check); 3) Protect Your Gun Rights! (check) and 4) Balance the Budget! (oops)”

Then they sign the ‘No Tax Hike” pledge; the ‘Balanced Budget Pledge” and the ‘Keep Social Security and Medicare Safe!’ pledge.

Immediately, they violate their values, principles and their political goal promises. It is impossible to cut taxes, leave entitlements alone and balance the federal budget to name one glaring example of such hypocrisy.

It comes across as lying to the American public. No surprise there.

Lying has never been a virtue in any walk of life. It is a disqualification trait for anyone who purports to run as a candidate of values from any scope of ethics, morals, religious belief or philosophical outlook on life.

Core values are fundamental beliefs that form a person’s outlook on life and daily behavior. Universally accepted norms of honesty, fairness, justice usually make up the bedrock infrastructure of a person’s identity.

“Principles” are the tactics by which a person executes their personal values. Not passing along mountains of debt to our children and grandchildren is one example where a principle is different from values.

A political “goal” is very different from a personal “value” or “principle”. A political goal can be balancing the budget; cutting taxes, strengthening the military, protecting Second Amendment rights or opposing infanticide. Making legislative compromises to achieve your stated policy objectives does not have to violate your underlying values of honesty unless you confuse political goals with values and principles.

If a core value is “honesty”, don’t sign competing pledges. If a core principle is to “do the right thing”, don’t keep voting to spend more money while blaming everyone else for the $22 trillion national debt.

Compromising on taxes to balance the budget does not violate personal principles or values if a representative’s number one political goal is “balancing the budget”. If their number one political goal is to cut taxes under any circumstance, then any concern they have about balancing the budget leaves only one choice to maintain their stated value of honesty: reduce the rate of growth in federal spending, especially in Social Security, Medicare and Medicaid since mandatory entitlement programs make up 61% of the budget today.

If an elected official doesn’t know how to count to 218 in the House and 51 in the Senate in order to get a compromise passed, then we as a nation have a much greater problem than them trying to understand the difference between values, principles and political goals.

One other core value humans have always admired is “courage”.  Wouldn’t it be nice to see some in Washington today?

(first published in North State Journal 5/22/19)

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Budget Discipline Procrastination Already Has Had Its Consequences

In 1993, when Republican House Budget Committee staffers were searching for options to include in the GOP budget alternative “Cutting Spending First”, we opened a book called “CBO Spending and Revenue Options” to find proposals to reduce the rates of growth in federal spending over the next 5 years.

We found $177 billion in savings from projected baselines in Medicare and Medicaid alone. Over 5 years, not 10 years as is custom today. Those proposals just slowed down the rate of growth in both programs ever so slightly. They were not absolute cuts from the year before in any of the 5 years.

They led to balanced budgets from 1998-2001. That is all we need; a slowdown in growth in federal spending, not absolute cuts.

In Medicaid and Medicare in particular.

If Congress passed every proposal put out by CBO back then, we would be swimming in budget surpluses, not deficits. There were trillions of cumulative savings laid out back when the federal budget was only $1.4 trillion to begin with.

The most recent 2019 edition brings tears to the eyes of anyone who was serious about budget discipline 25 years ago. A cursory reading of the options to hold down the rate of growth in entitlement spending shows that most of the options in 2019 are the same as they were in 1993 simply because so few of them have been passed and implemented.

For example, there was a proposal back then to raise the eligibility age for Medicare from 65 to 67 to match the stairstep increase in retirement age eligibility of Social Security by 2024. We are living far longer than life expectancies were in 1935 when Social Security was passed; shouldn’t the retirement age in Medicare be raised to reflect that basic fact of life especially since Social Security has already done so?

Had it been passed into law 26 years ago, as it should have, we would be saving roughly $40 billion annually today, savings that would continue to compound far into the future.

If we had started the process back then to raise the retirement age to 70 by 2024, the annual savings in Medicare would be in excess of $100 billion today and $150 billion in 2024.

Both are still in the CBO Spending Options book as “options to consider”. Both have laid dormant for an entire generation. No elected Democrat or Republican public official has touched that third rail of American politics with a ten-foot pole.

The price of our collective national political cowardice and procrastination for the past 18 years is $15 trillion of new debt. Had substantive action been taken to reform entitlements back then, we could have seen balanced budgets every year beyond the four balanced budgets we saw from 1998 to 2001.

There is only one way to balance the budget now beyond making major programmatic changes in the major mandatory programs, Medicare, Medicaid and Social Security. To solve our federal budget crisis, we simply have to solve our burgeoning health care cost crisis nationwide. Inflation in federal health programs has averaged 6%+ annual growth for the past decade.

Spending in all federal health programs has to be held under 3% annual growth for us to have any chance of solving our debt crisis. Promising “free health care for all!” as all of the Democrat presidential candidates are proposing is exactly the wrong way to go if we are serious about fiscal responsibility.

Ronald Reagan said: “(T)he trouble with our liberal friends is not that they’re ignorant; it’s that so much they know isn’t so.”

Based on what we have seen when it comes to federal budgeting over the past 18 years now and still counting, apparently this includes our conservative friends as well.

Sadly.

(first published in North State Journal 5/15/19)

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Where Is “The Fiscal Sanity Caucus” In Congress Today?

Make This The Senate and House Chicken Caucus

There are 16 caucuses in the US House of Representatives. 

• Congressional Progressive Caucus (CPC) – Progressive Democrats
• Medicare for All Caucus – Progressive Democrats
• New Democrat Coalition (NDC) – Modern Liberal/Centrist Democrats
• Blue Dog Coalition (BDC) – Conservative Democrats
• Blue Collar Caucus – Pro-labor and Alter-globalization Democrats
• Expand Social Security Caucus (ESSC) – Progressive Democrats
• Tuesday Group (TG) – Moderate Republicans
• Republican Main Street Partnership (MSP) – Moderate Republicans
• Republican Study Committee (RSC) – Conservative Republicans
• Liberty Caucus (LC) – Libertarian Republicans
• Freedom Caucus (FC) – Conservative Republicans affiliated with the Tea Party movement
• The Congressional Black Caucus for African-Americans
• The Congressional Hispanic Caucus for Hispanic Democrats
• The Congressional Hispanic Conference for Hispanic Republicans
• The Congressional Asian Pacific American Caucus

Note none of these caucuses is called “The Fiscal Sanity Caucus”. Or “The Balanced Budget Caucus”. Or the “We Came To Do What Adults Are Supposed To Do Caucus” which is manage our nation’s finances in a responsible mature process.

Not one single caucus named above has done anything to reduce federal spending over the past 18 years. Many have opined or whined about the deficit and blamed “the other side” for not co-operating on reducing the national debt. However, no legislator, committee, party or caucus gets any credit unless legislation passes both the Senate and the House and gets signed into law by the President.

That is the way it works in our American constitutional democratic republic. The road to fiscal hell is paved with good intentions…and lack of principled leadership.

The last Congress that oversaw a balanced budget was in 2001—pre-9/11 that is. Four balanced budgets from 1998-2001 was the result of work done starting in 1990, revved up in the House Budget Committee in 1993 and finalized in the 1997 Balanced Budget Act.

Since 2001, the national debt has exploded from $5.8 trillion to over $22 trillion today. Tax revenues have increased from $2 trillion to $3.4 trillion since 2000, a 70% increase during a time of historically low inflation.

However, spending has gone up from $1.7 trillion to over $4 trillion, a 135% increase since 2000.

The problem with debt accumulation is spending. Not taxation. We have more debate about taxation, though, than spending.

Why? Because cutting taxes is fun. Cutting spending is painful. Spending more of your money is great fun, especially to those who love more government control of everything.

The problem is manifold. Members always blame everyone else for their inability to lead on cutting spending. Their collective lack of understanding of basic principles of arithmetic coupled with no apparent understanding of economics and accounting is self-evident on a daily basis. They simply do not know how to lead by brokering deals and compromises that produce less-than-perfect solutions but they put the brakes on spending nonetheless.

History will not remember any of them well. There are no “Profiles in Courage” to write about when it comes to fiscal discipline since 2001.

Balancing the budget is not that hard. Even a caveman like me can do it. So can every person reading this opinion piece as long as they know how to subtract.

In 1993, former budget staffer Greg Hampton and I found $177 billion in spending savings over 5 years from the baseline in Medicare and Medicaid alone and helped my boss, former Congressman Alex McMillan of Charlotte, get it into a document supported by 15 GOP House Budget Committee Members called ‘Cutting Spending First’. We were 85 seats in the minority at the time and Republicans had not controlled Congress since 1955.

Republicans took over Congress in 1994. $135 billion of those proposals made their way into the landmark 1997 Budget Act which led to the only balanced budgets we will see in our lifetimes if things don’t change very soon.

If any Member of Congress or Senator wants to start “The Fiscal Sanity Caucus”, call me. You can be an Army of One at least to start.

(first published in North State Journal 5/10/19)

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Something’s Happenin’ Here with GDP Growth

"There's something happening here. What it is ain't exactly clear” are the opening lines to the 1966 Buffalo Springfield hit song, “For What It’s Worth”.

For what it is worth, the same can be said about recent economic data in America. “Everyone”, meaning all of the experts and commentators on talk shows, keep predicting a significant slowdown of the American economy and have done so since the night Donald Trump was elected in 2016.

Nobel Laureate Paul Krugman proudly wrote in the New York Times in the wee hours after Trump won the electoral college: “If the question is when markets will recover, a first-pass answer is never”.

Ouch. One has to think Mr. Krugman wished he could have a do-over with that colossal gaffe.

Except apparently he doesn’t. On April 8, 2019, only 23 days ago, he wrote: 'It’s true that U.S. economic growth got a bump for two quarters last year, and Trumpists are still pretending to believe that we’ll have great growth for a decade. But at this point last year’s growth is looking like a brief and rapidly fading sugar high”.

First quarter 2019 GDP growth came in at 3.2% last Friday. The consensus among professional economists and prognosticators was 2%.

What has happened? Has every economist turned into a non-analytical clone of Paul Krugman? Why has the source of this new-found economic growth not been “exactly clear” for everyone to see?

One important factor could be the higher 1-year write-off of the purchase cost of new machinery and equipment for small businesses in the Trump tax bill. Business owners point to this tax change as being an underappreciated aspect of the accelerated economic growth we are seeing in the US economy.

A small business contractor can buy a new truck and expense the whole cost of the vehicle in the first year even though it might take 5-7 years to pay for the loan. If a small business had $45,000 of net profit, they could offset that with the $45,000 cost of the new vehicle and drive their taxable income way down to cite one very simple example. Depending on their tax bracket, the owner could save up to $15,000 in federal taxes and $2000 in state taxes which is money that stays in their pocket, not the government’s.

Economic growth is directly attributable to productivity gains in the economy. Buying new machines that can produce more product at a lower cost is the very definition of “productivity gains”. We all benefit from such productivity gains whether we are employees, owners, investors, stockholders or retired from the workforce.

Former Vice-President-under-President-Barack-Obama Joe Biden entered the presidential race last week ostensibly to “take America back to the golden days” he apparently thought happened while he and President Obama were leading our country.

Americans throughout modern history have considered 2% annual real growth “dismal” and “disappointing”. Former President Obama and his Vice-President Joe Biden considered 2% to be the “new normal” for the American economy going forward. Forever.

Annual real GDP growth never exceeded 2% during any of the 8 years the Obama/Biden team was in charge. How odd that as soon as they left office, GDP is now growing almost 60% faster under the pro-free enterprise policies of President Trump as passed by a Republican Congress with zero Democratic votes.

If you want to know one big difference between the Obama and Trump White Houses, consider that in 8 years, the Obama Administration did not add this provision to help spur the economy back to full health.

The difference between 1% GDP annual growth to 3% GDP growth across 35 years, about a generation, would mean the US economy would double from $21.5 trillion to $43 trillion in 2054.

For what it’s worth 3.2% growth is far preferable to 2.0%. Why go backwards into the future?

(first published in North State Journal 5/1/19)

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NC Primaries, Citizens United, IEs and The Rise of Conservative Woman Candidates

Dr. Joan Perry, Candidate for Congress
NC3 Republican Primary

We are witnessing a revolution in modern American politics right before our very eyes here in North Carolina.

North Carolina is home to special elections for Congress to fill two vacant congressional seats almost simultaneously which has never happened before.  NC3, formerly represented by Congressman Walter Jones, runs from the Virginia border down east to north of Wilmington. NC9, which runs from Charlotte to Fayetteville, had to be re-run in the aftermath of the absentee ballot scandal uncovered in Bladen County in the 2018 elections.

State and local parties used to control who could or should run for any election because they held the purse-strings and had the networks that could go door-to-door and get people out to vote for their preferred candidate.

For such a special election in the past, 2, maybe 3 candidates might have filed to run to get the party’s nomination on either side. It made no sense to run without the backing of the party establishment because you wound up beating your head against a stone wall to no avail or good outcome.

Not any longer.  17 Republican candidates filed to run in NC3. 10 filed to run in the Republican primary for NC9.

What has happened to allow such an outbreak of democracy to occur?

One important factor was the McCain-Feingold bill of 2002. More specifically, the much-maligned and misunderstood Citizens United Supreme Court case handed down in 2010 which rendered parts of McCain-Feingold unconstitutional and opened campaign finance to the masses rather than the chosen few.

One of the things Citizens United helped create was the independent expenditure (IE) campaign which could fund issue advocacy and educational efforts through 501 c4 non-profit organizations.

The one major restriction was that IEs could not “coordinate” any explicit campaign activity with the direct campaign organization of the candidate, hence maintaining the “independent” status of both the IE and the campaign.

The NC3 and NC9 primaries are on fast tracks: The primary for NC3 is next Tuesday, April 30 and the primary for NC9 is May 14. If any candidate garners 30% of the primary vote, they win outright and go right to the general election on July 9 and September 10 respectively.

What Citizens United has done in both primaries is make it possible for first-time candidates to have a chance at winning outright on the first primary election night.

3 conservative women are the beneficiaries of such independent support in the two primaries. Dr. Joan Perry of Kinston, a personal friend and a graduate of The Institute for the Public Trust which I run, was the first in either primary to receive such an endorsement from the Susan B. Anthony List, the major pro-life advocacy group in America today, which amounted to $75,000 of support in NC3.

Leigh Brown, a realtor in Huntersville, was endorsed by the Realtors PAC in an independent expenditure effort in NC9 which appears to be in the neighborhood well in excess of $1 million based on public ad buy records.

Celeste Cairns, an accountant in Jacksonville also running in NC3, was endorsed by the Club for Growth which spent hundreds of thousands of dollars in 2016 to help newcomer Ted Budd, another Institute graduate, win the NC13 primary and then the general election.

Without Citizens United, none of these newcomers would have been able to compete and possibly win. Since both special elections are being held at odd times for elections and the turnout is expected to be very low, a candidate who can garner perhaps as few as 6000 votes can win 30% of the primary vote and avoid a runoff.

If you like more democracy and more non-politicians running for election, you can thank the Supreme Court for ruling on the side of freedom of speech and expression in the political world.

Citizens United has opened up the world of election to outsiders and newcomers like never before.

(first published in North State Journal 4/24/19)

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The Ever-Elusive Goal Of Universal Coverage

(This is a re-publish of an opinion piece that appeared in the North State Journal 4/17/19 that was co-written by a good friend of mine, Jim Capretta.

I thought it was important enough and so full of factual information that I would just forward it to you instead of trying to use his basic information and write a new piece.

I recommend you read this piece and memorize every fact in it and then forward the article to everyone you know so they can memorize these same facts. They are important in any debate on health care reform)

Talk of universal coverage is in the air. To a person, the Democratic candidates jockeying to take on Donald Trump are pledging allegiance to this seemingly elusive goal.

As Yogi Berra might have put it, “It’s déjà vu all over again.” It was only ten years ago that the country went through a raucous and exhausting national debate over enactment of the Affordable Care Act (ACA). Like today’s would-be Democratic candidates, Barack Obama ran on a platform of universal coverage, and he sold the Affordable Care Act (ACA) as making good on his campaign commitment.

After the law passed, Democrats lost control of the House in the 2010 mid-term election. Most Democrats at the time said the political price was worth it because the ACA was the culmination of a decades-long quest.

But that was then. The Census Bureau reports that, in 2017, there were 28 million people in the United States who were not enrolled in health insurance, down from 42 million in 2013. When Democrats say they want universal coverage, they apparently mean that official statistics need to show 100 percent enrollment in some form of health insurance.

It’s certainly within their rights to say the goal must be zero uninsured, but the reasons the ACA couldn’t hit that mark are likely to hinder a new effort too.

According to the Kaiser Family Foundation, today’s uninsured fall into five categories.

First, 15 million people without coverage — or half of the total — are already eligible for publicly-subsidized insurance, in the form of Medicaid, the children’s health insurance program, or a private plan that would be financed in part with federally-provided premium credits. These “eligible but unenrolled” individuals remain uninsured either because they are unaware of what is available to them, or because they haven’t taken the steps necessary to sign up. It is common and expected for a public program to fall short of 100 percent participation.

Second, 3.8 million people are uninsured because they fail to enroll in the employer-sponsored plan that is offered to them, or their spouses, at work.

Third, 1.9 million people are ineligible for employer coverage and for premium credits under the ACA because their incomes exceed 400 percent of the federal poverty line (FPL), or $103,000 for a family of four in 2019.

Fourth, 4.1 million people are uninsured because they are immigrants residing in the U.S. without proper documentation. The ACA explicitly excluded this population from subsidized coverage.

Finally, 2.5 million people reside in states that have not expanded Medicaid and have incomes that are too high to qualify for that program. They also have incomes below 100 percent of FPL (federal poverty line), which makes them ineligible for premium assistance for private coverage under the ACA.

In summary, about 90 percent of the 323 million people in the U.S. in 2017 had health insurance. Of the 28 million people without coverage, more than 90 percent were eligible to enroll in some kind of plan or had incomes that would seem sufficient to purchase insurance protection.

Only 2.5 million people — or less than 1 percent of the total population — were in the U.S. legally, had low incomes, and did not have ready access to an insurance plan.

There’s also reason to believe the Census survey overstates the problem altogether. Some respondents have coverage under Medicaid but mistakenly identify themselves as uninsured. Improving how the uninsured rate is measured would likely reduce the reported number by a few million people.

Further, many of those deemed uninsured will get coverage automatically if they need extensive medical attention and present themselves at a hospital. States are required to allow hospitals to conduct presumptive eligibility determinations for Medicaid.

Expanding insurance enrollment does not require upending today’s system.

Congress could entice the 14 states that have not expanded Medicaid to do so by allowing them to go to 100 percent of FPL instead of 138 percent, as called for in the ACA. Closing this coverage gap would provide insurance to the 2.5 million low-income people who do not have a good coverage option today.

Congress could also make insurance enrollment as automatic as possible for the people who are already eligible for coverage. Automatic enrollment has worked to boost participation in retirement plans, and it could help increase health insurance enrollment too.

Many Democrats would like the U.S. to have a completely different system of insurance.  Perhaps there are good arguments for that point of view. But that would require disrupting coverage for the hundreds of millions of people who are in stable insurance today.

A safer bet is to leave those who have insurance alone and develop a plan focused on expanding coverage to the remaining uninsured. The result would not be as dramatic as Medicare for All, but such a proposal would be far likelier to get the approval of most Americans.

Joseph Antos is the Wilson H. Taylor scholar in retirement and health policy at the American Enterprise Institute. James C. Capretta is a RealClearPolicy Contributor and Resident Fellow at AEI.

(A version of the article was first published by RealClearPolicy)

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The Gift of Religious Freedom

Thomas Jefferson Letter to Danbury Baptists

The week of Passover and Easter is a good time to reflect on what a gift our founders gave us in America when it comes to freedom of religion.

Before America, people in a nation had to believe the same religion as the ruling authorities or risk being ostracized. Or worse.

Socrates of ancient Athens was sentenced for misleading the youth of Athens. He was offered exile or suicide by drinking hemlock poison.

His crime? He believed in a single God which threatened the polytheistic belief in the Olympian Gods by the Athenians.

He chose the hemlock. Leaving the city he loved was worse than death to Socrates.

Martin Luther risked being burned at the stake when he famously hung his “95 Theses” on the door of the Wittenberg Castle Church on October 31, 1517.  He questioned the authority of the Pope and the Catholic Church and took dead aim at the practice of indulgences whereby people could essentially “purchase” the salvation of loved ones into heaven.

He was brought to trial before the Diet of Worms (pronounced “Varmes”) where he said these famous words in his final defense: “I cannot and will not recant anything, for to go against conscience is neither right nor safe. Here I stand, I can do no other, so help me God. Amen.”

Somehow he avoided the burning stake and the Reformation began.

In England, Henry VIII famously and incongruously took over control of the Catholic Church because they wouldn’t grant him a divorce from Catherine of Aragon so he could marry Anne Boleyn. He ordered her head chopped off 3 years later.

The King of England was thereafter the Supreme Authority of the Anglican Church in addition to being monarch.

Talk about the need for a true “separation of church and state”. Can anyone imagine President Barack Obama or Donald Trump also being the “Supreme Authority of All Things Religious in America”?

When English people migrated to colonial Virginia to escape such abuse of power, they reverted to the norm and set up the Anglican Church of Virginia which received support from the Commonwealth of Virginia. Taxpayer money was used to support the Anglican Church of Virginia for much of their colonial era.

Virginia was so Anglican that a Baptist or Methodist could not hold public office. Only Anglicans could file to run for election.

Ever heard of the word “antidisestablishmentarianism”, the longest word in the English language? It came from the debate over whether or not to “dis-establish” the Anglican Church from the government of Virginia.

On the tombstone of Thomas Jefferson is a list of the 3 things for which he wished to be remembered: Author of the Declaration of Independence, Founder of the University of Virginia and Author of the Virginia Statutes of Religious Freedom of 1786.

Those statutes led to the inclusion of freedom of religion in the First Amendment to the Constitution.

The Virginia statutes and the First Amendment guarantee your freedom to worship any religious deity you choose. It also guarantees your freedom not to worship anything if you so desire.

Nothing in the First Amendment guarantees the “separation of church and state”. Those words came from a letter President Thomas Jefferson wrote to the Danbury Baptist congregation in Connecticut in 1801 who worried that President Jefferson might institute a national government-sponsored religion. 

The First Amendment and Mr. Jefferson guaranteed that the Danbury Baptists had nothing to worry about because it was not going to happen again.

As you celebrate Passover or Easter this week, or Ramadan in May, or nothing every day of the year, give the Founders of this country full credit for freeing us from elected officials with the coercive 

power of government at their disposal telling you what to believe and when to believe it.

Freedom of worship is one of the greatest freedoms mankind has ever had. If we can keep it, that is.

(first published in North State Journal 4/17/19)

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Modern Monetary Theory of the Progressive Uber-Left

The Progressive Uber-Left is currently pushing MMT or Modern Monetary Theory which basically says budget deficits don’t matter and are actually beneficial to the economy. 

Therefore, elect them so they can run massive annual deficits and pay for Medicare for All among other centralized government programs they would control from Washington, DC and never worry about balancing budgets or paying down our national debt.

MMT is another name for an early 20^th century concept, chartalism, which viewed money as having value solely because the government entity that created it deemed it as having value, not as a spontaneous means of trade to replace basic barter between individuals. It fits the socialist view of governance that all power derives from bureaucrats running government who bestow benefits among the people since they know best how to spend your money, not you.

Since all money is issued by the government, the government has a “monopoly” on all currency. All the government has to do is digitize more money supply through the Fed whenever bureaucrats in charge deem necessary such as when the Fed expanded its balance sheet by $4 trillion during the 2008-09 Crash.

Government can issue more digitized debt at any time to push money into the economy and, through taxation, can take it out of the economy when inflation ticks up.

Deborah Desouza in a February 28, 2019 article explained MMT this way:

“The central idea of MMT is that governments with a fiat currency system can and should print (or create with a few keystrokes in today's digital age) as much money as they need to spend because they cannot go broke or be insolvent unless a political decision to do so is taken.

MMT theorists explain that debt is simply money the government put into the economy and didn't tax back. They also argue that comparing a government's budgets to that of an average household is a mistake”.

If that is the case, why not run a $100 trillion national debt overnight and solve all the world’s ills with a Super Massive Omnibus Government Bill to Obliterate More Bills (SMOGBOMB)? Make every American citizen and non-citizen a billionaire by giving them newly digitized currency and all our troubles will go away forever.

If MMT is such a “great idea” that works, then why hasn’t every nation since 1900 adopted it already?

The “only” thing MMT proponents hedge their bets on is the threat of inflation. If the government digitizes too much electronic currency and it chases too few workers or resources, then inflation can be ignited.

They say higher taxation will take care of that by taking money out of a possibly overheating economy.

Has anyone noticed “how easy” it is to tax an already over-taxed populace in America in the last 60 years? Taxpayers will resist and rebel at the ballot box whether there is a gold standard backed-currency or one created by bits and bytes.

800 years of history have shown what happens when sovereign nations have put into practice what MMT or chartalism proposes. The Weimar Republic in Germany and the current socialist government of Venezuela are empirical points of reference refuting the claim that sovereign governments can spend all they want and not suffer the consequences of such massive fiscal mismanagement and financial folly.

Once the Hounds from Inflation Hell are unleashed, they destroy economies and take out the most vulnerable people first: the poor and the retired poor. Inflation in the US was 13.5% in 1980 when many Boomers were in their first job looking to buy their first house with a 18.5% mortgage rate.

It can happen again. It probably will.

Perhaps you would like to take a spin on the President Bernie Sanders Magical Mystery Wheel of Fortune to find out if MMT works or not.

Count us out.

(first published in North State Journal 4/10/19)

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