Sunday, May 29, 2011

Photo ID, Fingerprints, Retinal Eye Scans and Voting in America

Quick: Which of the things listed below do NOT require a photo ID to perform?

(a) Buy cigarettes or alcohol
(b) Enter a federal building
(c) Board a commercial airplane
(d) Purchase over-the-counter antihistamine
(f) Vote in an election

You are correct. 'F' it is, dumb as it is. Completely absurd in 21st century America.

Apparently, the most cherished thing we have in our democratic republic, the right to vote, is taken less seriously than the right to smoke, drink or take drugs.

Maybe if we added some nicotine, alcohol or pseudoepinephrine to the ballot to lick before we voted, then maybe we could get photo IDs into the public elective process where they belong.

2214 DEAD people voted early in North Carolina during the 2010 elections. 64% were Democrats; 32% were Republicans and 4% must have been from the 'Fusion' Movement of the early 20th century since these early voters were at least 110 years old.

The least they could have done would have been to have had a valid death certificate attached to them as they voted. It has a coroner’s validation on it with a notary seal as well.

Honestly. What is the big deal about having photo IDs to vote in an American election anyway?

If you have never been: 1) a candidate for public office; 2) worked on a political campaign; or 3) managed a political campaign, let us count the ways for you that votes can be manipulated one way or another by people who are less honorable than Mother Teresa. They have been in politics for centuries dating back to the ancient Greeks.

Former Congressman Alex McMillan (NC-9) won his first election to Congress in 1984 by a whopping 321 votes. Out of over 220,000 votes cast. He increased his vote margin in 1986 by over 11 times and won by a then-whopping 4221 votes over the same opponent in a terrible year for Republicans across-the-board.

The most feared thing by any chief of staff or campaign manager is a close election, say, less than 5000 votes. Why? How many times have you seen or heard of some guy showing up with a bag of ballots that were ‘mysteriously’ found under some chair in the back of the school choir chamber at 4:00 am in the morning after the election in some small town in some small rural county in any state you can name?

Or in a big city like Chicago? JFK would never have become President Kennedy had it not been for the strong-arm tactics of Mayor Daley in Chicago in November 1960. Or for that matter, the ‘mysterious’ victory of a Catholic presidential candidate in Texas the same year. (oh, wait! LBJ was on the same ticket with JFK at the same time he was running for re-election as Senator from Texas in case JFK lost the presidential election! There was no way LBJ was going to lose both elections at the same time, we can assure you)

We know of a case where the candidate went home at 3:30 am on primary night with a 3000-vote lead in votes with virtually all of the precincts reporting only to wake up at 7:30 am to find out he had lost by 5000 votes somehow in the intervening 4 hours. There was a 8000-vote margin swing from a handful of precincts which is unheard-of since some precincts only had a couple of hundred people voting in each of them total.

Apparently, the precincts from the local cemeteries had been rounded up and organized at the last moments of the campaign. While everyone else was sleeping.

Go. Figure.

There is always ‘a guy’ that people ‘in the know’ say during a campaign ‘you have got to get to know’ in such-and-such a county or city because presumably, he knows ‘where the votes are in case of a tight election.’ Maybe they are the same votes as were cast in the 1960 presidential election but it makes no difference. These are votes that can be ‘counted on’ to get your man or woman over the top in the case of a tightly contested vigorous election.

In this day and age of technological wizardry, doesn’t it make sense to use it in our elections for public office? We have instant replay for NFL and college football; Wimbledon uses lasers to determine whether a serve by Serena Williams hit one molecule of the white tape or not; and you can not get on a plane anymore without a virtual body cavity search.

Do you mean to tell us we can not use PHOTO ID to determine if a person is eligible to vote or not?

Here’s who should be able to vote: duly registered natural-born and naturalized citizens who are not felons over the age of 18.

Here’s who should NOT be able to vote in any political election for public office (although they do with regularity now around the nation): felons, dead people, illegal immigrants without a green card, people who did not take the time to officially register to vote beforehand, and people who crowd 6 people into one voting booth at the same time. (seen it with our own eyes….many, many times)

Our right to vote as free people in our cherished democratic republic is severely compromised when we turn a blind eye and deaf ear to the corruption that is rampant in vote-fixing and ballot-stuffing. It makes elections a joke and makes us believe that those who oppose such technological advancements in assuring clean elections are either naïve or just plain thrilled to see illegalities abound in our duly-established elections.

If it were up to us, we would mandate Photo IDs tomorrow morning and enforce them with fingerprint matches and retinal eye scans at the place of election. In the case of absentee and mailed-in ballots, subject each and every one to a rigorous signature verification scan before opening the envelope.

Our freedom and republican form of government are totally dependent on the integrity and veracity of our legal citizens voting legally each time an election is held.

You can choose to vote or not when you are alive. That is called ‘freedom’.

On this Memorial Day, let's remember that our fathers and forefathers who died in battle defending our freedom did not do so to allow every illegal resident; felon; unregistered voter and dead person license to vote in our civic elections. It is dishonoring to them to besmirch their heroism and valor by turning a blind eye to the corruption still inherent in our voting system.

We have the technology in the 21st century to ensure that every single vote is valid and legal unlike at any time in human history. Let's use it.

Fix it now. Pass Photo ID in every state and county. For the good of the nation and continuation of The Republic.

(tip of the hat to Ann Stone for circulating the rhetorical question posed at the beginning of this post)

Saturday, May 28, 2011

‘Bend It (SS/Medicare) Like Beckham’ and Green Bananas

There was some truly heart-breaking and depressing news this past week when the Social Security and Medicare Trustees came out with their desultory report about the sickly state of both of our major entitlement programs today.

Here is a link to the report and to a thoughtful inside comment from one of the trustees who is a good friend of ours and a sound thinker on all things budget-related, Dr. Chuck Blahous.

If you don’t have the time to read it just yet (you should read it in its entirety sometime soon, except only under the following conditions: 1) not right after you have eaten anything and 2) preferably with a tranquilizer gun nearby and handy), here’s the bottom-line:

‘Both Social Security AND Medicare are fundamentally and technically broke, bankrupt, kablooey right now, in 2011 A.D.’

That is it. Can it be any more clear than that?

Now this doesn’t mean every granny or grandpa is going to lose hers or his SS check this month. It doesn’t mean they will be denied Medicare payments for their various ailments and treatments.

One of our favorite slogans for older-age was found on a needlepoint pillow made for one of our best friends ever: ‘Old Age Is NOT For Sissies!’

But it does mean that something has to be done pretty darned soon and quickly by President Obama and Congress in order to avoid a complete dissolution of both programs and/or a complete destruction of every other program in the federal budget from defense to homeland security to education to transportation to environmental protection. Both entitlements, left unchecked and unresolved, will crowd out every other federal program that at least some people think are important.

The problem we think with the presentation of the Paul Ryan budget plan to phase-in a new era of Medicare for coming generations is that the GOP has not made it clear enough that every single current senior citizen has nothing to worry about with benefits on either program. They are all ‘grandfathered and grandmothered-in’ to the current system, in essence, simply because Ryan’s plan takes so long to phase-in, up to 20 years or long about 2031 or so.

How can anyone aged 75 years old right now be too worried about what SS and Medicare will look like in 2031 when they are 95? They won’t even be buying green bananas at that time much less worrying about what some young whippersnapper says about SS and Medicare in Congress at the time.

In our humble opinion, the real problem with the Ryan plan is that it doesn’t phase-in fast enough! We need to enact these reforms today, in 2011, not in 2031. How do we know the Chinese will still be there letting us borrow their money and pay them only 1% in real interest rate costs to borrow it forever?

We also disagree strongly with Newt Gingrich’s errant remark that the Ryan plan smacks of ‘right-wing social engineering’. (What is the former Speaker talking about?)

But, fortunately, we do have ‘the answer’ at least on Social Security. Of course, it comes directly from Dr. Blahous mentioned above and we think some version of it can be applied to the Medicare program as well.

And it can be done today without affecting any senior citizen who depends solely on SS and Medicare to survive because, sadly and apparently, their children have passed away or they are not taking care of their parents like their parents took care of them growing up.

We like to call it the ‘Bend it like Beckham’ fix to entitlement programs simply because it is a hook to remember it by since it is such a confusing problem to solve in the first place.

We have spoken about it before (see 'It's Too Late') but to reiterate once again, there is such a thing called a ‘bend point’ in current SS law that inversely calculates the benefits due a person in retirement relative to their income and salaries during their working career.

Here’s what Dr. Blahous has to say about changing the ‘bend point’:
‘You COULD very easily draw a new ‘bend point’ in the benefit formula, and then slowly phase down the bend point factors above it.  Basically phase down to a flat minimum benefit for everyone – above that minimum poverty-protection benefit that everyone is eligible for, you don't get any more if you have higher income.
If you went all the way there, you could probably still fund a small personal account. Or, if you just wanted to scrap the account or were willing to put in some more tax revenue, you wouldn’t have to phase the factors all the way down to zero.
You could solve the entire shortfall that way.’

Essentially, doing it this way is the right way to help the truly poor and indigent first in our society instead of having a universal spending program to fully help the truly wealthy and the poor alike. Lowering the 'bend point' would guarantee that everyone would get some sort of subsistence level of SS and Medicare payment coverage…everyone.

It just would mean that Warren Buffett and Bill Gates would have to take care of more of their retirement benefits than under current law. And why the heck not!? They can buy their own hospitals if they need the best health care in the universe anyway…they don’t need one dime of SS or Medicare handouts from the government truth be told.

So while the Democrats seek to demagogue the heck out of the Ryan plan by running ads showing mean old Republicans pushing granny out of her wheelchair over a cliff as they did in the recent 26th congressional district campaign in New York (honestly! They actually did it! See the 'America The Beautiful' campaign ad here), there is a common-sense solution that can be passed tonight…and no one would really know the difference.

So 'Bend It Like Beckham' on SS and Medicare and buy as many green bananas as you want. Both senior citizen programs will still be with us then when we are 95 in some form or fashion.

Monday, May 23, 2011

Presidential 'Leadership' Versus Presidential 'Politics'

We got to watch Chris Wallace on his FOX Sunday morning show and David Gregory on 'Meet The Press'.

We'll be back in church next Sunday, we can guarantee you that. Those shows are 'scary'.

Here's what we noticed more than anything else: People currently in the White House, namely President Obama and in Congress, such as Congressman Chris Van Hollen of Maryland, plain and simply do not want to lead on solving the fiscal budget trainwreck we are now riding.

Even people such as Herman Cain, who is a rising darling of the Tea Party, apparently has hired a spinmeister to help him obfuscate what used to be a pretty forthright and truth-telling persona.

Let us count the ways.

First of all, David Gregory on 'Meet the Press' was tangling with various talking heads about Paul Ryan's budget, the debt ceiling, and so on and so on, seemingly the same discussion we have had for the past decade in essence.

When Congressman Van Hollen bristled and harrumphed that Congressman Paul Ryan's budget was too radical and would 'eliminate Medicare as we know it' (it is being 'dismantled as we know it' in a process known as de facto 'bankruptcy' as it is today), he challenged GOP political consultant Mike Murphy to tell the Republicans to support the recommendation of President Obama's very own Bowles-Simpson Deficit-Reduction Commission last winter.

To which we were just dying to see David Gregory ask the following question:

'Why doesn't President Obama just submit the recommendations of the Bowles-Simpson Commission himself as legislation to Congress?'

Alas, Mr. Gregory did not ask this very simple question. Maybe he is in the tank for President Obama, we have no real way of knowing.

Presidents can do that sort of thing when they really want to act like leaders of the greatest democratic republic the world has ever known. Presidents routinely ask Members of Congress and Senators of their party to introduce legislation they consider important to the national best interest simply because: 1) they can and 2) they can speak with one voice to begin the discussion with instead of 535 cackling voices from Congress.

That is why the Founders gave the President executive authority in the first place. He is the ONLY member of our elective civil government who is elected by the entirety of the American voting populace. No one else comes close to having that sort of universal influence and connection with the whole nation.

But, as we all sadly know, President Obama has not introduced the Bowles-Simpson Commission recommendations as a legislative package, nor will he any time in the near future.

Why? Because he wants to get re-elected, of course. There are too many 'tough decisions' in the Bowles-Simpson Report:  cut and reform entitlements and raising taxes, just to name two. Why do something crazy that will endanger his chances any further to be re-elected than what a crummy economy and $4.00+/gallon gasoline has already made for him?

Before 'Meet The Press', we had a chance to listen to Mr. Herman Cain, who declared his candidacy for the Republican presidential nomination yesterday.

We liked his proposal to completely replace the current income/payroll/excise/estate tax fiasco with a single-rate consumption tax across-the-board. We think it would significantly encourage and rewards savings and productive investment in America. It will also eliminate all of the distortions now deeply inherent in the current system such as the massive tax breaks it affords corporations who offer health care insurance coverage vis-a-vis individuals or small companies who can not and the home mortgage interest deductions that allow the deduction of interest on multi-million dollar home purchases, many of which are for tax sheltering purposes, not for personal home shelter reasons.

But then at the end of his interview with Mr. Wallace, he was asked about the impact of not raising the debt ceiling in August and 'What would you do as President under those circumstances, Mr. Cain?'

Mr. Cain, a very successful executive with Godfather's Pizza (Finally! We would have a POTUS in office who could truthfully say to our enemies abroad: 'I'll Make You An Offer You Can't Refuse!') and a member of a regional Federal Reserve Bank, (so he should know better) said this:

'First, we would pay the interest in the existing debt. And then we would make sure the military is paid. And the Social Security checks will be sent out. And of course, we will make sure all the Medicare bills are paid in full.'

The only thing he left out as a sacred cow was Medicaid which we presume was just a slip of the tongue.

Here's the problem, Mr. Cain and for all of his 'Raising Cain'-followers: If you exempt the Pentagon, Social Security, Medicare and Medicaid after guaranteeing the payment of the net interest on the national debt each month, that is near about 90% of the federal budget you have left off the table for any reforms, reductions, savings or improvements!

The only thing you have guaranteed is that we will have no more Homeland Security; no more interstate highways being repaired (forget any new construction); no college education grants; no environmental protection programs and no more Lawrence Welk museums being proposed to be built with federal support (OK, we'll give you kudos on the last one)

So there is not much different there from any other candidate for POTUS for the past 20 years on that score, sad to say.

Just be careful when you listen to these presidential candidates. They apparently have not read any history where we Americans yearn for strong leaders to put out proposals and energize us to follow them.

Do you really want a republic that relies on daily polls that interviews guys like 'Cousin Eddie' (Randy Quaid) to Chevy Chase's 'Clark Griswold' in the movie 'Vacation' to tell the President and Congress what to do on all of the complexities of the federal budget and foreign policy and national defense?

Not us.  Let's elect real leaders who can go to Washington, study the issues in-depth and then vote on proposals that save our nation and revive our economy, not cower in the corner afraid to do anything heroic.

Saturday, May 21, 2011

‘What If’ Congress Told Congress To Run The US The Same Way Congress Runs Big Banks, Wall Street and Detroit?’

Well, the first thing that would happen is that the entire Board of Directors (Congress) and the CEO (The President) would be fired.

Hopefully, without a golden parachute and $50 million in severance pay and a jet to fly to Aruba every weekend like many seem to get in the Wall Street corporate world when they screw up and run a company into the ground.

But let’s try to think about how Congress treats malfeasance and stupidity in the companies they regulate versus their own behavior as budgeteers and managers of simply the largest enterprise the world has ever known, the $3.6 trillion annual budget of the United States of America.

Wal-Mart, by comparison, had revenues of ‘only’ $418 billion in 2010, a mere measly 1/9th the size of the federal government. A proverbial drop-in-the-bucket. (but can you believe that Wal-Mart’s revenues are really over 10% the size of the US federal government?)

Anyway, what would be the first thing Congress would tell Congress to do if they treated our federal budget like a failed bank, Wall Street investment bank or Detroit automaker? (Have you seen the Chrysler ‘Made in Detroit’ commercials with Eminem? Honestly, do they make you want to run out and buy a Chrysler today?)

We have a $1.6 trillion annual deficit so the first thing we have to do is what, class?

That’s right:  Cut. Spending!  It is the only thing any manager of a budget has 100% control over. He/she can cut spending today at the drop of a hat. He/she has no total control over revenue (taxes) coming in the door, especially in economic dips like we have had, plus the fact that really wealthy people can tax-plan their brains out and avoid paying any tax they want to avoid, basically.

But what to sell first? And to what purpose do you put the proceeds….reduce annual spending or reduce existing debt?

We think reducing debt is important because it will cut our annual interest expense later.

So #1, let’s sell Alaska back to the Russians. Sarah Palin and all. With their oil reserves, that must be worth $1 trillion at least what with their 4 billion barrels of oil in reserve at $100/barrel plus the value of all that timberland and whale and seal blubber.

$9 trillion in actual debt held by people outstanding today less $1 trillion from the sale of Alaska to the Rooskies…check. Net 'real' debt (as opposed to the illusory intragovernmental 'Social Security Trust Fund Debt') would now be $8 trillion and declining.

But you also have to reduce current spending so you don’t keep adding on more debt and never get out of it, don’t you?

So using the rules of Congress vis-à-vis the banks, let’s restructure corporate compensation. That means the President’s salary will be cut 30% to $300,000 per year (dirt-cheap for that job, isn’t it?) and every Congressperson and Senator gets their salaries cut from $177,000 to about $130,000.

And every staffer gets their salaries cut commensurately down the line.

But that only saves maybe $10 billion total across the entire government. We gotta find $1.6 trillion in annual savings, not just mere billions.

So, here we go:
  1. We can cut the entire defense budget of $700 billion plus the entire domestic discretionary budget of another $700 billion and just about get there, can’t we? All we will have left is ‘a government of the old/poor people (SS/Medicare/Medicaid), by the taxpayers and for the old/poor people. Nothing more, nothing less.
  2. Conversely, we can cut the entire SS and Medicare budgets to zero and save about $1.4 trillion per year that way. Sure, that means we will throw all the old people out of their retirement homes but we’ll have a balanced budget finally, won’t we?
  3. Or the last option would be to cut the entire Medicaid budget down to zero and either eliminate SS or the defense budget, take your pick. They are all about the same size so we’ll have to choose one or the other, but not keep ALL of the spending intact like we have in the past.
Maybe we can sell Texas and California back to the Mexicans while we are at it. California is going to fall into the Pacific Ocean anyway one day so why not get something of value for it before the Big One hits the San Andreas Fault?

There you have it, the stark choices all laid out for you, the American people, to decide what it would take immediately to get out of this fiery furnace of financial ineptitude we find ourselves now in.

And we all know that none of the above things will ever happen.  That is why we have to be a little more mature than the average kindergartner and start talking about such serious issues as curtailing the spiraling costs of health care inflation by addressing tort reform; defensive medical practices; raising the eligibility age in Medicare to 70 among about $10 trillion worth of other spending reductions and reforms we have advocated in the 222 previous postings here on Telemachus.

(If you can't find the resources or references here on this blog somewhere, you don't need to know it, we promise)

We need to reduce and reform spending in every sector of the federal budget from defense to education to welfare to Medicare to Medicaid to Social Security.  There is not ONE single federal line-item in the budget that can be truthfully called '100% spending efficient and critical in total', except payment of net interest on the debt on time.  We fail to do make timely interest payments and then we truly do enter The Twilight Zone on creditworthiness and financing for the future.

Saturday, May 14, 2011

Oaths and Pledges

Ever wonder why candidates for political office seem to govern ‘differently’ from the way they campaign to win that very same seat?

It has been that way since the beginning of representative democracy and civil government way back in ancient Greece.

For one thing, a candidate has to appeal to the relatively small number of people who actually vote, as opposed to those who do not vote, in a primary election to get to the general election to win the 50%+1 majority necessary to take office.

As a result, they make ‘campaign promises’ to win.

But once in office, they all of a sudden have to deal with the reality of ‘governing’ a diverse population of people from wildly different backgrounds, races and religious beliefs. That is far different from appealing to just the relatively small number of people who ‘agree with you’ during the primary election and then a broader number in the general campaign.

And this can drive people on both ends of the ideological spectrum bonkers. ‘Why can’t we get people to do what they say during the campaign?  'They signed a pledge!’

Aren't you glad President Obama did not do everything he 'promised' during his campaign on foreign policy which might have not led to the end of Osama Bin Laden two weekends ago?

We think the confusion and frustration comes down to the definite difference between sacred ‘oaths’ versus campaign ‘pledges’.

There is a difference.

An ‘oath’ is inherently a religious term, always associated with a connection to God. Have you read about what happens to people in the Bible when they violate an ‘oath to God’? They get ‘smited’ in some fashion…lightning strikes; earth moves; people get turned into salt pillars, that sort of thing. (Gary Larsen's 'Far Side' cartoon showing God hitting the 'Smite' button on his PC makes us laugh out loud every time we see it )

A campaign ‘pledge’ is a promise that is not necessarily attached to the sacred power of a deity. You ever seen a person sign a 'No Tax Pledge!' with their hand on the Bible?  Doubtful.

Pledges rely more on the intent of the person to accomplish the stated goal.  Campaigns are undertaken to relay to the public what a person’s general philosophy towards civil self-governance is, not to have tablets etched in stone to come down from Mount Sinai with a 10-point public policy handed to the people by the ‘Chosen One’, the candidate.

One of the dumbest ‘oaths’ we have ever heard emanated from the mouth of Jephthah in Judges 11:30-35 in the Old Testament. It clearly points out the difference between a solemn ‘oath’ and other forms of pledges and promises, and the dangers of both.

'And Jephthah made a vow to the LORD: “If you give the Ammonites into my hands, whatever comes out of the door of my house to meet me when I return in triumph from the Ammonites, will be the LORD’s, and I will sacrifice it as a burnt offering. Then Jephthah went over to fight the Ammonites, and the LORD gave them into his hands…
When Jephthah returned to his home in Mizpah, who should come out to meet him but his daughter, dancing to the sound of timbrels! She was an only child. Except for her he had neither son nor daughter. When he saw her, he tore his clothes and cried, “Oh no, my daughter! You have brought me down and I am devastated. I have made a vow to the LORD that I cannot break.'

For the life of us, we can not figure out or understand why Jephthah didn’t just say: ‘…whatever dog, pig, cow or donkey comes running out of the door of my barn’ instead of leaving open the possibility that his only daughter would be the one running out to him after he had been given victory over the Ammonites.

But you know what else the Bible says that might have helped Jepthah?

‘It would be better not to issue an oath at all’ than to violate the one you give.

Take a look at Deuteronomy 23:21-23:
'When you make a vow to the LORD your God, you shall not delay to pay it, for it would be sin in you, and the LORD your God will surely require it of you. However, if you refrain from vowing, it would not be sin in you. You shall be careful to perform what goes out from your lips, just as you have voluntarily vowed to the LORD your God, what you have promised.'
So what does all this mean for political candidates?

First of all, the only true ‘oath’ we have ever seen required of any person in politics is when they take office in Congress and ‘solemnly swear’ with their hand on the Bible to support and defend Constitution of the United States…(s)o help me God.’ (see full text below)

You seriously have to wonder why there have not been more Congressmen and Senators killed by unexplained bolts of lightning on Capitol Hill over the years but that is another discussion for another day.

(Just don’t stand next to one too long)

But the ‘solemn oath’ to defend the Constitution takes on a whole new meaning if you actually read the Constitution! Our elected representatives and senators and Presidents are ‘sworn’ to keep our nation intact and safe by whatever means possible, first and foremost. That is the one over-riding principle that takes precedence over all other concerns in our national life together.

There is nothing in the US Constitution that says what the right or wrong level of taxation is. There is nothing in the US Constitution that says what the right or wrong level of federal spending is. There is nothing in the US Constitution that says how many US troops should be in Iraq, Afghanistan, chasing down the next Osama Bin Laden or none at all.

We elect these people to be our representatives in Washington to use their best judgement and do the best they can on each issue since we don't want everyone to have to vote on every single issue in a national plebiscite every single day. That would be what a true 'democracy' would be like and it would be totally chaotic and reminiscent of the Jacobins that so terrified Jefferson when he was in France in 1789.

We live in a democratic republic which means the people we elect have to go to Washington to work out deals to run our nation for us and that necessitates the copious use of compromise, diplomacy, intelligence, creativity, decorum, persuasiveness, persistence and a healthy sense of humor.

It ain't easy.

Here's a summary of the 'dumbest' pledges politicians sign nowadays that prevent them from seriously reducing these outlandish and dangerous budget deficits and national debt:

'I pledge NOT to raise taxes/cut Social Security/Medicare/domestic discretionary programs/the Pentagon's budget!....but I really want to reduce the budget deficit!  I really, really do...I promise!'

Do you mean to say that if you are a 'true conservative on the one side, and you can get $4 trillion in spending reductions in return for a $1/head tax increase on 150 million taxpayers, you will not take that deal?

Do you mean to say that if you are a 'true liberal' on the other side, and you can get $4 trillion in tax hikes in return for cutting $1 out of the $3000/month Social Security check now sent to every multi-billionaire like Warren Buffet, you will not take that deal?

That is simply preposterous, ladies and gentlemen.  Such people are simply not serious when it comes to governing in a civil democratic republic such as ours.  In fact, such comments and pledges are buffoonish and not worthy of reasoned rational debate in any humanoid species that is supposedly above the apes and chimpanzees.

The Founders were smart enough to set up a system where (supposedly) our best and brightest would 'stand for election' and go to Congress and make the best collective decisions possible given the circumstances facing our nation at the time.

We think the Founders would have encouraged the following 'Ultimate Campaign Pledge!' to be used by every candidate in every campaign that followed them had they thought about it:

‘I pledge to do the best I can to ‘keep government limited or small/make government as large as possible’ and let each candidate fill in the blanks as each sees fit.

At least that would be the honest thing to do.

Congressional Oath of Office:
“I, AB, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”

Tuesday, May 10, 2011

Social Security Trust Fund Bonds Will Be The ‘21st Century Version of Confederate Banknotes’

If you really want it hammered home into your head just how ephemeral the Social Security Trust Fund really and truly is, take a look at what one of the most colorful and nearly-unintelligible US senators ever, Senator Ernest 'Fritz' Hollings of South Carolina, had to say about it on October 13, 1989, 22 years ago:

(We used to have to translate Senator Hollings' old school Charleston, South Carolinian dialect to some of our Northern friends in Congress even though we hardly could understand what he was saying most of the time either)

"The public fully supported enactment of hefty new Social Security taxes in 1983 to ensure the retirement program’s long-term solvency and credibility. The promise was that today’s huge surpluses would be set safely aside in a trust fund to provide for baby-boomer retirees in the next century.

Well, look again. The Treasury is siphoning off every dollar of the Social Security surplus to meet current operating expenses of the government…

(T)he most reprehensible fraud in this great jambalaya of frauds is the systematic and total ransacking of the Social Security trust fund...

The hard fact is that in the next century…the American people will wake up to the reality that those IOUs in the trust fund vault are a 21st century version of Confederate banknotes.” 

‘Confederate banknotes’. You know what they were worth at the end of the War Between the States, The War of Northern Aggression or The Civil War, whatever you choose to call it?

Nothing. Zero. The rebels lost the war and with it, their currency and assets.

Here’s what we think needs to happen BEFORE we can make any progress on correcting this and many other problems we face: People need to be told the truth in a mature, adult manner so they can consume the information, digest it and then listen to a real leader who will level with them and not try to molly-coddle them or make them feel like Santa Claus is about to come down their chimney and leave more money on their table.

If you hear a politician tell you that everything is OK with SS and Medicare and Medicaid in their current forms, run away from them and don’t ever consider voting for them. They are flat-out lying to you. Politicians of either party, Republican or Democrat; Independent, Libertarian or Tea Party…if they say all we gotta do is have better economic growth or ‘tweak’ these programs ‘just a tiny bit’, they are lying through their teeth and they know it.

The Social Security Surplus Trust Fund and any interest accruing to it simply did not exist prior to passage of the 1983 SS Act!  The 'surplus' was always just an accounting entry to cover up the fact that the entire surplus was spent along the way on everything from defense to education to sending men into outer space.  It is represented by an IOU on the official federal accounting ledger sheets which will never be paid back.  Ever.

The only thing that will happen with the accounting for the SS Surplus will be that anytime expenses in SS payments going out exceed the SS payroll taxes coming in each year, the stated trust fund balance will be reduced by the difference between the two.  That is it...and it already has happened for most of 2010-2011 due to this massive recession we have experienced.

Here's another example of how politicians ‘lie’ about the Social Security Trust Fund: 'It is being used to disguise the true amount of deficit spending we have been engaging for the past 28 years'.  Honest to God.

Did you know that when the vaunted 1983 Social Security Act was passed, most of the ‘reforms’ were essentially a massive tax hike on the American people unlike any before or since then? (To their credit, they did put in the delayed fuse of raising the retirement age to 66 which is the law today and to age 67 in 2026)

Ronald Reagan signed it (yes, THAT Ronald Reagan!); NY Democrat Daniel Patrick Moynihan in the Senate pushed it; and Senator Bob Dole and other GOP leaders in both houses of Congress supported it. It accelerated an increase in the SS payroll tax for both employee and corporation and dramatically escalated the percentage of income that the self-employed have to pay to support the SS system (which is one main reason why we don't think 'everyone' supported the 1983 Act as Senator Hollings asserted)

SS and Medicare payroll taxes are now the largest tax that 75% or so of the population pay to Washington each year, mainly because 50%+ of the workers in America pay only the federal payroll taxes and not federal income taxes.

Do you know what the accumulated tax increase has been so far just from the 1983 SS Act alone? Close to $2.6 trillion. That is the amount of ‘surplus’ money Washington has taken out of your paycheck since 1984 when the 1983 bill took effect and is now running close to $200 billion per year.

That roughly $200 billion annual surplus has basically ‘masked’ or made the deficit look ‘smaller’ than it really is each year. Without the SS surplus taxes this year, the deficit would be more like $1.7 trillion instead of $1.5 as projected.

So to those who want to argue that the historic level of taxation in America has been around 18.5% of GDP, they need to separate payroll from income taxes in order to be totally ‘honest’ about it. Income and other non-SS ‘surplus’ taxes paid have been about 16.5% of GDP while the SS surplus taxes alone are now approaching 2% of GDP.

The Good Senator from the Great State of South Carolina was correct way back in 1989 when he compared the SS Surplus IOUs to the worthless Confederate dollar way back when. The only way to address the problem is by telling the truth to the America people first to educate them as to what can be done next to ‘fix it’ for the next generations to come.

The Boomers? Well, you had your chance to fix SS and Medicare but you didn’t so let’s do something noble and fix it for our kids. You always knew Social Security wasn't going to be there in full when you retired anyway. Polls show that more people believe that aliens have landed on earth than believe Social Security will be there for them in full.

(Google 'Chile’s Social Security System’ and see what they did 30 years ago and how it is working out far better for every Chilean worker than the current US SS system is doing for the average American worker)

(Senator Hollings' quote from blogsite of Dr. Allen W. Smith at

Friday, May 6, 2011

Why Not Raising the Debt Ceiling Might Not Be Such A Bad Idea

The debt ceiling is due to be voted on soon and we have come around more to the position that the best thing Congress can do is to leave it alone as is today. $14 trillion, $294 billion is the legal limit of all of our borrowing can be under existing law.

What would happen if we don’t raise the debt ceiling? Would the known universe as we know it fall in over our heads like a black hole sucking the life out of everything that comes near it?

Nope. Not even close to what some of the Chicken Littles are saying in Washington from Secretary Geithner on down.

We wrote about this before (see ‘Debt Ceiling’) and now we think not raising the debt ceiling will have the same salutary effect on the federal budget as would a constitutional balanced budget amendment. We desperately need the BBA now based on the last 10 years of desultory performances by Congress and Presidents on fiscal matters, wouldn’t you have to agree?

We have done a little research into the matter and apparently the very first thing that will be paid for in the event of not raising the debt ceiling is? (drumroll please)

‘Net interest on the existing national debt.’

What? You mean the first thing that gets paid is some interest coupon to some Saudi sheik or Chinese bureaucrat? What about my Social Security check or Medicare benefits? What about paying for these great SEALS who took out Osama?  What about the sublime Lawrence Welk Museum that some Congressman tried to get funded to the tune of $500,000 to build it in his hometown of Strasburg, North Dakota to celebrate the life and times of ‘Mr. Wunnerful Wunnerful’ himself?

They all may get funded to some extent nonetheless, just not until after the interest is paid on the existing national debt.

That is the way it is with debt, ladies and gentlemen and has been since ancient times, except with the Biblical Jubilee, that is. You borrow money from someone and they expect to get paid on time and regularly for the use of that money by you, not them. And since we owe over $9 trillion in cold hard cash to debt holders, we will pay out over $261 billion this year in interest costs alone.

(forget the fictitious and deliberately misnamed ‘SS Surplus Trust Fund’. It is as ‘real’ as the pink elephants Dumbo saw in his dreams)

But let’s think seriously about this for a moment: What would happen if Congress decides NOT to raise the debt ceiling in a couple of weeks? What would happen then?

First of all, after all of the echo chamber pundits inside the Beltway get resuscitated after fainting in shock and horror, the first check that will be written to anyone will be for the interest owed to the Saudi sheiks and the Chinese bureaucrat. And so will the second and the third and every other debt obligation as they come due.

We certainly have enough to pay the interest on the $14 trillion credit card bill we have rung up. Just ask Visa or America Express...they love it when you keep paying that monthly interest to them.

Over the course over a year, every single penny of that $261 billion in net interest will be paid to creditors (but not a single hard dime will be paid to the Trust Fund ‘Imputed’ Interest fund simply because it is 'imputed' interest, not paid interest). So the US credit rating will stay intact and foreign investors will still buy US-denominated bonds because, well, we are still ‘safer’ than anywhere else in the world.

Who do you think will crumble into the dustbin of history first, The U.S. of A or China? (don’t answer that...China has been around for 5000 years and we have been around only a measly 222)

And then what? We are pretty sure Congress will continue to pay the Team VI SEAL members to go after the other bad guys in the world along with the rest of the brave men and women now serving our nation in the armed forces.

But they will also not be able to fund any new defense programs or initiatives until and unless they cut back or eliminate past programs, many of which date back to the WWII era. (Our favorite was the elimination recently of the Federal Helium Reserve Program that started after World War.....I!)

And then every seniors’ Social Security checks will be paid on time. Except maybe, just maybe Congress will take a look at the $3000 check we are sending to multi-gazillionaire Warren Buffet each month and start to wonder what kind of social safety net we really want to have or need when even the likes Warren Buffett are ‘entitled’ to such taxpayer-assisted funds. (call it ‘welfare’ if you want....we are of the belief that anytime a federal check goes to any person or business in the form of grants, support payments or economic assistance, it fits the true definition of ‘welfare’ as defined in Webster’s Dictionary)

And then Medicare benefits will be know that.  But maybe Congress will finally address the upwards cost-drivers in health care such as defensive medical practices and tort reform and maybe raise the retirement age for people going forward to 70 to keep in proportion to longer life expectancies to stretch out limited funds?

Guess how much of the current budget will be left after these three parts of the budget are paid plus Medicaid? 19%. If defense and entitlements are left untouched and unreformed for the next five years, all that will be left will be under 10% to pay for all the transportation, energy, environmental, education programs and Lawrence Welk Museums we all say we love and want.

So let the games begin. Congress, don’t increase the debt ceiling.  PLEASE force yourselves to set spending priorities on a vertical scale 1-10,000...and then live within your means, i.e., ‘spend only what comes in in the form of current income and payroll taxes’.