Thursday, March 28, 2013

What Does 'True Equality' Mean In America Today?

Is Equality Red, Blue or Purple?
The debate in the Supreme Court over marriage equality has certainly opened up the core essential debate we have had in America since the Founders founded his nation in Philadelphia, 1787, one of the epochal beginnings to any great civilization the world has ever known:

'What is equality in 21st Century America today?'

'We hold these truths to be self-evident that all men are created equal.....' is the rallying cry that the Founders used from the Revolution of 1776 to underpin the US Constitution.

They said it was 'self-evident' to them based on natural law and religious faith that we were all created equal with certain unalienable rights such as life, (without life, nothing much else really matters, does it?); liberty and the pursuit of happiness. 'The pursuit of happiness' is actually a concession to the rather greedy and harsh-sounding 'pursuit of property' that John Locke talked and wrote so much about previous to Jefferson's penning of the Declaration. It just sounds better, doesn't it?

They struggled with 'equality' from the very beginning since so many of them had non-free, non-equal slaves working on their plantations. Manumission only came to their slaves upon death of the Founder and not all of them freed their slaves either.

Equality in terms of voting rights for women only came about with the passage of the 19th Amendment in 1920 after close to 70 years of effort at the state and local levels. Evolution of thought and beliefs about our democratic republic system does come from these smaller incubators of democracy over time.

So, here we are 226 years later in 21st century America. What does 'equality' mean to us today?

We think 'equality' is an interesting word. It is a noble concept, a somewhat utopian goal that men and women throughout history have striven for, died for and hoped for. Thank God there exists hope, 'or what is a heaven for?' to steal a phrase from 19th century poet Robert Browning.

But what does true color-blind, gender-blind, religion-blind equality 'mean' in practical application on a daily basis nowadays anyway?

Here's some other situations to ponder today as to where 'equality' might mean some radical changes in America today:
  1. Is every single one of our votes 'equal' when we don't know for 100% sure that every single vote is cast legally in every single election?
  2. Are all of our admissions programs to our top universities 'equal' in the sense that each application has absolutely no indication of the race, color, gender or creed of the applicant?
  3. Does the tax code treat every single person 'equally' in terms of tax preferences, exemptions, deductions or burden?
  4. Are our schools 'equal' in the sense that each school has all the resources and great teachers they need to train each and every student in the same excellent manner?
We are sure you can come up with other 'injustices' which are really the 'lack of equality' when you really think about it. There is something inherently hard-wired into human DNA that everyone should be treated equally, especially here in America where we have actually had over two centuries to at least try to live in a society where everyone has an equal chance to try to make their lives as happy and as fruitful as possible.

Here's our point:  We all need to be more consistent in our political and philosophical outlooks and opinions on life here in America. We have been bequeathed a God-given gift from our parents, grandparents and ancestors one of the greatest gifts any civilization has ever known: freedom to choose how we live and really 'why' we live. We need to choose more wisely it seems going forward or else many of those freedoms will continue to diminish over time. 

One of those freedoms is the freedom to have a consistent political philosophy that actually makes sense over time. Both sides have chosen to use our freedom to not have a consistent political philosophy for the past 12 years at a minimum but really for the past 35 years or so. That is the way politics goes sometimes.

Politics isn't always a logical process, you know.

Thomas Jefferson basically believed that for a government to be small anywhere, it needed to be small everywhere. It is very difficult to hold the opinion that gay couples should be considered 'equal' when it comes to marriage rights and laws while at the same time denying the same 'equality' to every qualified student who wants to go to Harvard, UNC or Duke based on some consideration of his/her skin color, isn't it?

Martin Luther King had something profound to say about equality: 'I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.'

'Content of their character'. Maybe we need a national task force on how to develop character more than any other ill that faces us today. Because we all see a lack of character every day of our lives from broken commitments, failure to comply with contracts and a general lack of integrity when it comes to business and personal lives.

We went to a funeral in Charlotte late last year for a gentleman who was a very successful businessman. People kept saying one thing about Henry Faison: 'You didn't need a written contract with Henry Faison. His handshake was his written contract'.

Integrity is a common indicator of the presence of equality, isn't it?

We have written before about the marriage issue since it has been a bedrock of American life and success for these past two centuries and is essentially a religious issue at its core. So we won't take time to go over it again here.

But we will take this chance to suggest just a few things that might help make things seem to be more 'equal' at least when it comes to our self-governance.

  • Moving away from income-based tax laws to a one solely based on consumption and transactions would wipe out any gaming of the tax system which would make it more 'fair' for all.
  • We think some serious attention needs to be made to the current voting laws to insure that every person who votes is legally registered to vote and to confirm it either with Photo ID or some other form of official government documentation through a match with Medicare/Medicaid cards and other widely-used government services. 
  • Otherwise, we think there is a serious 'one-man/one vote' constitutional issue that needs to be brought before the Supreme Court since any illegal vote on any side of the political spectrum that cancels out yours or my vote is inherently 'unfair' and 'unequal'.
  • We think the trillions of individual purchases and decisions made every single day in America has a far higher impact on our collective prosperity and well-being than all of the legislation that has ever been passed in the US Congress. It also tends to be more 'fair' in the sense that with hundreds of choices to choose from, every person can keep looking until he/she finds what she wants and the other party is willing to make a deal with that person, either in sales or employment or friendship.
  • We think more reliance on the free markets and personal freedom side of the ledger and less on the government dictate/fiat side would yield far more opportunities for everyone, regardless of race, creed or color.
Think about how consistent your personal political philosophical structure might be today. We have 'big government' people who want 'small government' on certain matters such as abortion and gay rights. We have 'small government' people who want 'big government' on the same issues when it comes to more laws banning or restricting both and mechanisms to regulate and enforce them.

Maybe we need an 'Equality Party' in America. In everything. Who wants to join?

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Monday, March 25, 2013

The Florida Gulf Coast Eagles and The Leadership We Wish President Obama Would Give

'Andy! Andy! Andy!'
Anyone in this nation who is not pulling for the Florida Gulf Coast Basketball Eagles coached by Andy Enfield to win the NCAA Championship just ain't much of an American, don't you agree?

We are ardent and rabid at times Duke and Carolina basketball fans. Why not? 25% of all the titles won by any team in the last 31 years have come from those two fine universities in the Research Triangle.

The most exciting one of all came from the 1983 NC State Wolfpack under Jim Valvano so the Triangle has seen it all. You have to see ESPN's great 30-for-30 offering, 'Survive and Advance' about that team and Coach Valvano's fight against cancer. If you can watch it in its entirety without laughing and crying your tail off, go to your local infirmary and check in...because you are not human.

Most exciting of all...until now, that is. The Vaunted FGCU Eagles have taken the cake by becoming the first #15 seed to ever make it to the Sweet Sixteen. The way they are playing with reckless but controlled abandon and sheer joy make it hard to believe they can't beat Florida or Kansas or Duke or Louisville and become the college version of Hickory High School in the movie 'Hoosiers' as the tiny school that slayed all the giants to win the Big Game.

There was something we noticed about the FGCU team last night that we think serves as a great lesson for all of our elective leaders including President Barack Obama in the White House. Did you notice it in the post-game celebrations where water was sprayed and shaken all over the locker room?

The players all started chanting: 'Andy! Andy! Andy!'

No, 'Andy' was not their leading scorer or rebounder or assist-maker.  No, 'Andy' is their head coach, Andy Enfield who has quite a life story of his own but we don't have time to recount it all for you right now but you can read all about it here.

Can you imagine a blue-blood team circling their coach and chanting: 'Roy! Roy! Roy!' or 'Krzyzewski! Krzyzewski! Krzyzewski!' (ok, we know that is a mouthful but you get our point)

Why do we bring this up?

Because nations, like basketball teams, need to believe in their leaders. When nations buy into what their Presidents and leaders are saying and, more importantly, 'doing', they can do extraordinary things.

Such as George Washington for example. He could have been king for life. Instead, like his hero, Cincinnatus of Roman days, he resigned his commission as leader of the nation to retire to his farm to live out his days in peace after serving his nation with honor and dignity.

Take a look at this eulogy about George Washington in 1799, about 3 years after he retired as the only unanimously-elected President we have had:
'First in war, first in peace, and first in the hearts of his countrymen, he was second to none in humble and enduring scenes of private life. 
Pious, just humane, temperate, and sincere; uniform dignified, and commanding; his example was as edifying to all around him as were the effects of that example lasting correct throughout, vice shuddered in his presence and virtue always felt his fostering hand. 
The purity of his private charter gave effulgence to his public virtues. Such was the man for whom our nation morns.' - John Marshall, official eulogy of George Washington, delivered by Richard Henry Lee, December 26, 1799

Look at these FGCU Eagle basketball players; they are white, black, come from tough backgrounds and not so tough backgrounds. They have bought completely into the system their Coach Enfield has laid out for them.

They are having great fun doing it as well. They are bringing back the reason why we love college basketball in the first place. And no, it is not to see how many Diaper Dandies can come through your university and be a one-and-doner gone to the NBA. Who cares?

Don't you feel a tad bit cheated by our elected leaders right now? President Obama, as our Cheerleader-in-Chief and Head Coach 'owes' it to us all to be enthusiastic about everyone's abilities and talents and capabilities. Not just the people who voted for him.

Ya think Coach Enfield ever says something like this to his top players?
'You gotta stop scoring so many points, Sherwood Brown! And you, Bernard Thompson, you have gotta stop making so many dunks! You're making everyone else look bad! I want you to stop playing so hard but instead I want you to pass the ball to the guys I am going to put in off the bench who are walk-ons from the JV team.  I am sure we will win that way.'
This is where President Obama has completely missed the boat in terms of inspiring confidence and exuberance on the part of the American people. He thinks that everyone is dragged down the more the best players such as Brown and Thompson and Comer play.

He is dead wrong. We ALL do better when our very best and talented people do well. When Bill Gates starts Microsoft, hundreds of thousands if not millions of people get jobs and build wealth and lead better lives for themselves, their families and their communities.

Should the Eagles of FGCU win the national title, even those walk-ons who never play in games will win a ring they can wear for the rest of their lives and show everyone they were part of the 'Miracle Eagles of Florida Gulf Coast-2013'! That is what happens when teams led by charismatic leaders and talented players win in any walk of life.

Pull for Florida Gulf Coast University basketball team to win the whole thing this year, even if you are a Duke or Carolina fan.  Maybe President Obama will notice how the Eagles did it with hard work, determination and enthusiasm since he spent more time getting his brackets ready instead of introducing his budget on time.

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Wednesday, March 20, 2013

The Difference Between 'Big Government Democrats' and 'Smaller Government Republicans' Clearly Explained

'This Is How You Become
When we find things that are better-written, more clear and to the point than anything we can write on a subject, we try to reprint it for your edification.

Such is the case with most things Chuck Blahous writes. See for yourself below.
reprinted from and courtesy of Charles Blahous | 03/20/2013 in

'Last week House Republicans, under the leadership of Budget Committee Chairman Paul Ryan, unveiled their draft budget for the coming fiscal year. Senate Budget Committee Democrats also released their budget blueprint assembled by Chairman Patty Murray. Though the House has moved budget resolutions in recent years, this is the first time in four years that the Democrat-controlled Senate has attempted to move one. Accordingly only now is it possible to compare the two parties’ contrasting visions of fiscal policy management over the ensuing decade. This article highlights the distinguishing features of the two approaches.

Some brief background first: though congressional budget resolutions typically invite robust public discussions of specific policy choices underlying them, budget resolutions do not implement those policies. More typically a budget resolution establishes targets for total spending and revenues in different budget categories; other congressional committees are then responsible for crafting the specific changes in law required to produce those outcomes.

For example, a budget resolution might envision a particular target for federal revenues that requires a change in tax law, but the passage of the resolution would not itself change the tax law. Tax legislation typically originates in the House Ways and Means Committee and is first considered in the Senate by its Finance Committee. The budget resolution, which is not signed by the president and lacks the force of law, can thus be thought of as a set of instructions that Congress issues to itself as to how other fiscally-significant legislation is to be crafted.

That said, budget resolutions do often reflect implicit policy choices. If a draft budget, for example, envisions a sharp reduction in the growth of a federal health spending category, it is customary for the budget materials to contain at least a rough description of how those savings could be achieved. Thus the numbers in a budget often reflect a set of assumed policy changes, even if the actual implementation of those changes would occur elsewhere in the legislative process.

Because the primary function of the budget is to frame general spending and revenue targets, this piece will focus on the overarching fiscal policy goals reflected in the Ryan and Murray frameworks. In presenting this information, I will rely upon the numbers published by the resolutions’ sponsors with the assistance of the Congressional Budget Office (CBO).

A note on baselines and deficit-reduction claims: In comparing alternative budget policies, what really matters are the absolute levels of taxes, spending, deficits, and debt under each. Too often advocates cite relatively meaningless quantifications of how their proposed budgets would change projected taxes and spending. The numbers behind such claims are often calculated relative to a baseline that is constructed primarily to support what the proposals’ backers want to claim. For example, now that most critical income tax law has been made permanent, there is little objective rationale for comparing revenue targets to anything other than CBO’s projections for current law. Nor is there justification for comparing a budget’s proposed spending levels to an inflated baseline in which it is assumed that current ongoing “sequestration” spending cuts are repealed. Press and public would do well to dismiss any such “deficit-reduction” numbers as the meaningless claims that they are.

Spending: The two budgets embody different visions for total future federal spending. Currently the federal government is spending 22.4% of the output of the American economy, a historically elevated share. Only in eight other years since 1946 has the federal government spent a higher percentage of the nation’s output than it is doing today, the exceptions being the first four years of the Obama Administration (2009-2012) and the height of President Reagan’s cold war defense buildup (1982, 1983, 1985 and 1986).

The Ryan budget aims to restore federal spending levels and growth patterns to post-WWII historical norms as a share of the economy, stabilizing total spending at about 19-20% of GDP in the out years. This is close to the historical average of 19.5% that prevailed from the end of World War II until President Obama’s inauguration. The Murray budget would continue the recent practice of elevated federal spending into the indefinite future, averaging about 22% of GDP in the out years and likely continuing to rise beyond the ten-year budget window.

Philosophically I am more sympathetic to the House Republican approach. In fairness, however, there is an oft-made argument for the alternative vision embraced by Senate Democrats – principally, that as Americans live longer lives they should receive federally-subsidized retirement and health benefits for a larger fraction of their lifetimes. If we accept that argument, however, there are only two possible consequences: either the federal government must impose higher tax burdens on our children and grandchildren, or it must spend relatively less on everything else.

Debt: From 1957 through 2008, federal debt held by the public was never more than 50% of our total economic output. Debt began to surge in 2009 as a share of the economy due to various countercyclical policies of the federal government in response to the recession. This year the federal public debt is expected to exceed 76% of our economic output, the largest percentage since 1950 when our World War II debt was still being paid off. The Ryan budget would put these debt percentages on a downward course which, if sustained, would eventually return federal indebtedness to pre-Obama norms. The Murray budget seeks only to stabilize the growth of debt relative to the economy, thereby retaining recently elevated debt percentages as a permanent feature of our fiscal landscape.

Deficits: The two budgets represent different attitudes toward fiscal balance. Annual federal deficits recently soared to modern highs starting in 2009. Since the end of World War II, the highest annual deficit years (relative to the size of the economy) have been 2009, 2010, 2011 and 2012. This embodies a sustained experiment in Keynesian stimulus without precedent in American history. The Ryan budget would take a different course, aiming for annual balance within ten years and enabling our economy to grow faster than our debt. The Murray budget would seek to reduce annual deficits to historical norms but would not meaningfully reverse the recent surge in total federal indebtedness.

Taxes: Pursuant to the fiscal cliff legislation passed in January, future federal tax collections are projected to significantly exceed historical norms as a share of the economy. The Ryan budget does not revisit this agreement, leaving federal revenues essentially as now projected. Because the Murray budget seeks to return annual deficits to historical norms while maintaining elevated federal spending levels, it envisions raising taxes still higher. By 2023 the Murray budget aims to collect 19.8% of the economy in federal taxes, the third-highest level of annual federal taxation since World War II. Unlike previous tax high points, this would not be a temporary spike but would represent a permanently higher level of taxation facing younger generations.

Repeal of “Obamacare”: Though this summary focuses on general fiscal policy, one difference between the two budgets’ specific policy endorsements is too important to overlook: the fate of the massive new federal health entitlement (which some refer to as “Obamacare”) enacted in 2010. The Murray budget assumes its implementation while the Ryan budget embraces its repeal.

There are at least three important fiscal policy reasons to scale back if not eliminate this new entitlement. The first is simply that it is one of the largest contributors to an unsustainable rate of projected federal spending growth. A second is that it is necessary to ensure that the ambitious Medicare cost-constraints enacted in 2010 actually do enhance our ability to finance Medicare rather than being spent on a new program. And third it is needed to correct incentives, recently created under the 2010 health law, for both states and employers to shift people they are now insuring over to the law’s new health exchanges, potentially swelling their costs above current projections.

In sum, the two resolutions represent starkly different approaches to budgeting. The Ryan approach aims to balance the budget over ten years, accepting the terms of recent tax legislation while returning both spending and indebtedness closer to historical norms as a share of the economy. The Murray budget would continue current elevated levels of spending and indebtedness as a share of the economy, while raising federal taxes significantly above our historical experience. It will be interesting to observe how Congress reconciles these two contrasting approaches to the federal budget.'

Charles Blahous is a research fellow with the Hoover Institution, a senior research fellow with the Mercatus Center, and the author of Social Security: The Unfinished Work

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Saturday, March 16, 2013

'Mr. Politician: Stop Using Government as an ATM Machine!'

'Mr. President: Stop Using Government
as Your Personal ATM Machine!'
One of Ronald Reagan's most famous speeches had to do with the tearing down of the Berlin Wall that separated Free Western Germans from Trapped Communist Eastern Germans under the control of the Soviet Union post World War II.

'Mr. Gorbachev: Tear Down This Wall!' President Reagan declared on June 12, 1987 outside of the Brandenburg Gate.

29 months later, it fell by the weight of its terrible history to the side of freedom and injustice.

Who says 'words can't make a difference'?

We think it is high-time to declare to our elected representatives and senators across our states and nation the following:

'President Obama/Senator Blutarsky/Congressman Belfrey/Governor Moonbeam: Stop Using Taxpayer Money As An ATM Machine!'

What do we mean by that exactly?

'Anything that can and should be done in the private sector through private banks and financial institutions will be done outside of any taxpayer involvement'

How bad can the problem be anyway? It can't be too bad, can it?

Let us help you count the ways:

Anytime you read or hear the words: 'public/private partnership', it usually means this: 'We can't find the financing at a price we want to let's stick it to the taxpayer instead. He/she won't even know what hit them until we have built our pet project and made millions off the origination fees and gotten out of it.'

Because the truth of the matter is that if a project is worth funding, there are investors in the private sector who will fund it. It might not be with as low of an interest rate as the managers want or with as preferential of terms as they would prefer but great ideas get funded in America on a daily basis still believe it or not.

What about professional sports teams such as when the NFL or MLB franchises 'threaten to leave town' unless the local politicians force a tax hike on local residents to pay for an upgrade or a new $1 billion stadium? If every local Mayor and elected official would stand on the side of the taxpayer and say 'NO!', then the private owners of each franchise would have to find the financing on their own and stay put in Green Bay or LA or Chicago because no one else would be trying to 'entice' (bribe) them to come to their town with a brand-spanking new taxpayer-financed new stadium, now would they?

What about this new $862 million bailout of the sugar industry that is now being considered by Congress? This sets up the potentially gruesome and ridiculous situation where one federally-subsidized program, ethanol, might be called upon to help bailout another federally-subsidized program, sugar, to the tune of millions of other taxpayer dollars.

We don't need an extra 800,000 tons of sugar (that is 1.6 Billion Pounds of fat-inducing sugar or an additional 5.16 pounds of sugar for every man, woman and child in America living today! for those of you keeping score at home) filtering into the food supply chain, do we? Not with the obesity pandemic we are now about to enter in America. In fact, we could use a diminution of 1.6 trillion pounds of sugar and corn sweetener and God knows what other forms of rapid-sugar intake are in our food today.

How about Medicare? Let's talk about Medicare. We saw an article which stated that the Paul Ryan Budget might force some changes in the sclerotic and byzantine Medicare program (it will) but went on to say that it will 'force seniors to make sacrifices in how they pay for Medicare'.

For one thing, there is no real definition of 'sacrifice' in the Webster's Dictionary that would include any program where you get at least 3 times the amount of money out of a program that you will ever pay into it. That is the current case with Medicare. It will soon become 4 times the amount you will ever conceivably pay into Medicare over your working lifetimes.

On top of that, the federal taxpayer subsidizes each and every senior citizen, man and woman, regardless of their ability to pay for their own health care (such as Warren Buffett or Bill Gates in the near future) to the tune of close to 85% of their Medicare bills each and every year.

There is a 75% general taxpayer fund 'subsidy' that allows the Part B premium for every senior citizen to be an absurdly and actuarial impossibly low rate of between $320-$360/month. The current working taxpayer pays for the entire cost of Medicare Part A through their payroll taxes paid each month, not the retirees who paid for the Part A benefits of their grandparents during their working lives.

God only knows what the subsidy will be for Part D when all is said and done. And Obamacare! The last CBO cost estimate we saw pegged the federal taxpayer general subsidy of that bill was $2.6 trillion although we have heard it is heading towards $6 trillion soon.

All from the ATM machine known simply as 'your wallet' in the form of taxes.

What the government doesn't take from you in taxes to distribute to these programs in the form of subsidies, they borrow from other nations, although the Chinese have stopped buying US debt for the most part.

So now we borrow debt... from ourselves. We call this ATM the 'Expanded Balance Sheet of the Federal Reserve'. How simply insane is that?

One way or another, we will have to pay this money back.  We will either do it in one of several ways: 1) higher taxes; 2) lower benefits; 3) inflation; 4) depreciated currency (which means you can't buy as much from overseas as you do today) and/or 5) extremely high interest rates when borrowers fail to buy more debt at rates we want to sell it to them.

The bottom line is we have to have a 'revolution' in this country. This 'revolution' has to be the recognition that government is set up to do the things that our Founders determined government can do best: protect our nation for one thing; build roads and bridges that improve our economy and enhance our collective lives for another.

Everything else that can and should be done by the private sector....should be done by the private sector.

How simple can it be?

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Thursday, March 14, 2013

'We Don't Have A Debt Crisis!'-President Barack Obama

College Students: Pay Heed!
Well, if Barack Obama says it is 'true', that must mean it is true!

Even his own Budget Commission Co-Chairs Erskine Bowles and Alan Simpson strongly disagree with him. Apparently they don't know what the heck they are talking about in President Obama's distinguished economic opinion.

If we don't have a 'debt crisis' today since we have added $7 trillion in national debt in 4 years under President Obama, after adding $6 trillion in 8 years under President Bush 43, when will we have a debt crisis then, Mr. President?

Without overstating our current problems and conflating them with some of the great crises of the past, here's some quotes we might have been able to expect from President Obama in the same tone and vein had he been President during each of them:

  • 'We have nothing to fear. Period.'-1933
  • 'The Soviets are not putting nuclear missiles in Cuba.'- 1962
  • 'Four score and seven years ago, nothing much of importance happened'.-1863
In 2008, then-candidate Senator Barack Obama called the debt buildup under W 'unpatriotic'. We agreed with then-candidate Barack Obama.

We disagree strongly with now-President Obama in his assessment of the current debt 'crisis' we are now experiencing and exacerbating to the tune of around $3.87 billion...per day. Somehow, what was previously 'unpatriotic and unconscionable' in 2008 is now ok and 'not a crisis'.

Some people would go so far as to call that 'hypocrisy'. Call it whatever you want.

Let's take a look at why adding on more debt really is  a 'problem' if not a full-blown 'crisis' today. Not many people ever really focus on it because it is so obtuse and confusing to most people.
  1. Hardly any republic, empire, monarchy or dictatorship (as in 'none') has been able to withstand excessive amounts of debt accumulation over the past 800 years and survived as strong powers in the aftermath. That is not just us fulminating; that is the conclusion of liberal economic historian Harvard Professor Kenneth Rogoff in his book, 'This Time Is Different' which we highly recommend reading.
  2. National debt is now being funded with short-term bonds of anywhere from 2-5 years for the most part at extremely low historical levels of 2% or so. What happens when it has to be rolled-over and refinanced at more historically 'normal' rates of just 5% or 6%? Right...annual interest costs triple overnight.
  3. Excessive debt almost always leads to one or more of the following outcomes in human history regardless of race, creed, color or national prestige or educated levels: inflation, depreciation of the national currency and high interest rates presuming that foreign sovereign nations are willing to loan money to the afflicted nation at any interest rate, that is.
  4. Interest on national debt is really 'wasted' spending on past expenditures by a nation. The people or projects who have been funded by past deficit-financing have already consumed those funds in the past, up to 20-30 years ago in some cases. Those interest payments could have been used for future spending on the children, poor, elderly or the infirm except for the fact that they have already been committed to retiring old debt.
We are not among those who see national debt as being unacceptable under every circumstance. If space aliens came to attack the entire world as we see in movies such as 'Independence Day', we are all for borrowing money up to 10,000% of GDP and printing up as much money as Ben Bernanke and the Fed can make up every day at work to be able to defeat them and prevent them from eating us all up or vaporizing everyone with their rayguns.

We also recognize the crucial difference between borrowing money for legitimate 'investment' in making America better for all of us versus borrowing for consumption purposes. When the Erie Canal was built in New York in the early 19th century, almost all of the available investment capital, both public and private, in America was soaked up to fund this critically important infrastructure project that sought to link the trade of the Midwest with the New York harbor and the outside world.

GDP of the United States tripled almost as soon as the Erie Canal was completed in 1825. That was a solid, and yes, Constitutional, way of investing public money for the benefit of the nation at-large versus some narrow smaller interest.

Imagine the wealth that could be generated in America today if this humongous $17 trillion debt could be directly tied to a tripling of our current GDP from $16 trillion to $48 trillion 'virtually overnight'.

That is what 'real' domestic government 'investment' leads to....large increases in wealth, jobs and opportunities for everyone. Current borrowing for domestic consumption purposes haven't done that, has it?

Nope, we think there is a good reason why President Jefferson was so terrified by having excessive amounts of debt on the national balance sheets. President Andrew Jackson hated debt so much that he drove it down to zero during his Administration.

'President Barack Obama, 44th President of the United States of America: We knew Thomas Jefferson and Andrew Jackson. You are neither of them when it comes to our national debt.'

Sadly for us and our children and their great-great-great grandchildren. Simply because they will be paying off our consumption in 2013 way into the future in 2063.

Sunday, March 10, 2013

The Limits of the Filibuster: Rand Paul Has Shown Us The Way!

Mother Nature Doesn't Care
Who Filibusters Who
If there is one thing Senator Rand Paul taught the nation with his filibuster last week, it was this:

'Even a US Senator can't beat Mother Nature when She calls!'

No kidding. Talking for 12-hours might seem easy to some loquacious people. But it is not. You have to stand on your feet all the time. You run out of things to talk about. You have to start reading the Bible and the New York phone book into the Congressional Record when you run out of things to say about the topic at hand.

And then Nature Calls.

What is the practical impact of Senator Paul's noble filibuster in the wonderful tradition of Jimmy Stewart in the movie 'Mr. Smith Goes to Washington'?

'The Practical Effect should be the end of the logjam that Democratic Majority Leader Harry Reid and Republican Leaders have hidden behind for the past 6 years and done nothing about the major problems we face as a nation!'

We don't have the scourge of slavery to conquer in our times. We don't even have the tumultuous civil rights marches and movement of the '60s to contend with. We don't have massive world wars like World War II to deal with like our parents and grandparents did. That was their 'consolation prize' after suffering through the worst economic depression we have seen in America in the last century which makes our recent troubles look like a romp through the playground during kindergarten recess.

Let's face it: We have had it pretty easy. Comparatively so to most previous Americans. Wouldn't you agree?

However, we do have one monstrous thunderstorm building on the horizon that we simply have failed to elect the right leaders to deal with and address: the burgeoning national debt caused by higher-than-annual-inflation rates in health care which push Medicare and Medicare costs in the budget through the roof.

We have to solve that problem now. Today.

And since President Obama is the only President we will have for the next 1413 days; 33,913 hours; or 2,034,788 minutes (in case anyone is counting), he is the only one who can lead the House and the Congress into a 'grand bargain' that will help us solve this huge problem.

Senator Rand Paul has shown us the way that the Senate can be brought along to cooperate in this whole effort to save the republic now, however inadvertently he may have done so.

Here's what he has done for the good of the Republic no matter which side of the political fence you sit:

Rand Paul has shown how toothless the 'dreaded filibuster' really is!

All a filibuster can do is 'delay' a vote on an issue of importance. It can't 'kill' the bill in question. Once a filibuster is done, the President Pro Tem in the Senate, who is a member of the majority party, can then move the previous question or take up some issue that had been delayed by the filibuster and bring it to a vote by the full Senate.  Where 50+1 rules the final outcome. NOT the 60 votes needed to cut off debate.

Why is this important?

Because once the filibuster is 'ended' when Nature calls, there is no need for the 60 votes to 'end' the filibuster, is there?

The main reason why Senators say they 'can't pass a bill because of the 60-vote cloture rule' is because what they really are saying is this:
'I don't want to have my precious time messed up by listening to some hog jowl rant and rave on the Senate floor about an issue I don't care about! I want to pass legislation like we are passing through the take-out window at Wendy's and it better be the issues I want to see passed! Plus it is so much easier to rant and rave myself about the 'injustice' of the minority party holding up proceedings than to actually do the hard work of reforming entitlements and balancing the budgets!
Well, guess what? The US Senate hasn't done a damn thing about reducing federal budget deficits and debt through a thorough revamp and reform of Medicare and Medicaid in at least 40 years now! Certainly not in the last 13 years that we can think of, except only to expand health care costs exponentially in Obamacare.
So what would be the difference between having 1000 filibusters and what they are doing today...which is NOTHING!?
The US Senate used to be known as the 'World's Greatest Deliberative Body'. Now, it is just a Jeopardy answer to the question: 'What is the least effective and efficient part of the US Government today, Alex?'

There can and will be other dilatory tactics that non-serious, un-statesmanlike senators will come up with to avoid doing the job we elect to send them up there to do. Senators such as Harry Reid love to fill the 'Amendment Tree' with hundreds if not thousands of amendments as a way to discourage serious debate on issues we have to face.

Senator Jeff Merkley (D-Oregon) has a pretty good summary of the difficulties the Senate faces today with the current rules of the filibuster. It is worth reading. It shows the length that non-serious people will go to in order to avoid doing their jobs in the best public interest.

Let 'Non-Serious, Gravitas-Challenged Senators' file amendments and start meaningless trivial filibusters and then go through them one-by-one in the light of day for weeks on end on C-SPAN so every constituent can see what truly lackluster leaders they really are. Once they see the clowns they really are, perhaps they will vote all of them out of the office one day when they become the laughingstock of the entire nation, if they haven't already.

In the meantime, call or write your Senators and urge them to call the bluff of every Senator who 'threatens' a filibuster and tell them go ahead and do it. They might not get much done in the first year but the US Senate is built on the concepts of comity and compromise above all else. If 1 person becomes the burr under the saddles of 99 other Senators, you think he/she will get anything they want in legislation, committees or floor time?

Think again.

Senator Strom Thurmond*
 of South Carolina dehydrated himself in a sauna before taking the floor for his historic filibuster against the Civil Rights Act in 1957 for 24 hours and 18 minutes. He also had a clever catheter system (if a catheter system can be called 'clever') set up whereby he could avoid going to the men's room for that long of a period of time.

But a man has to sleep on top of relieving himself every now and then. Nature will call any current filibustering Senator to task soon enough one way or another.

Let the filibustering games begin.

*Read the full text of Senator Thurmond's 24-hour+ filibuster by clicking on the link above. 
If you just want to read the Thurmond-parts:
1) Pages 16263-16284 cover the beginning of the filibuster until about 2 a.m.
2) Pages 16383-16456 cover 2 a.m. to the end of the filibuster.
3) Pages 16457-16468 cover some of the period in (2)

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Thursday, March 7, 2013

'When Was the Last Time a Fabulously Wealthy Person Actually 'Hurt' You Directly?'

This could perhaps be the most preposterous presentation of 'income inequality' in American ever concocted.

If you can't watch the whole thing, just watch the last minute before reading the rest of this screed. It sets the stage for what you are about to read.

'Let them eat cake, darling...
after I am done hogging it all first!
Granted, when the charts are put together like this, the visual presentation of the 'rich' versus the 'poor' is shocking to say the least. It brings back the images of Emperors eating cake while their wives and mistresses are sarcastically saying 'Let them eat cake!' to the hungry hordes outside the palace.

It is good 'politics'. It is terrible economics.

Anything that can be used to incite and excite political passions can and will be used to advance the views of any candidate or political movement in America or any other place on Planet Earth. We actually don't mind the clever use of facts and figures, as long as they are true and verifiable.

These numbers in this chart are probably true and verifiable. The income disparity has widened over the past 20 years in America as corporate chieftains have been able to exercise stock options and warrants in rapidly-growing internet/software companies whose success gets rewarded for their innovations.

But so what? Those are the practical implications of anyone succeeding wildly in America. Isn't that the sort of freedom our ancestors left the oppression in Europe to pursue?

Here's our question for the day:

'When was the last time that a very wealthy person 'mugged' you in any sort of manner and 'took' something from you?' 

Chances are you have benefited from the generosity and charity of very wealthy individuals in your daily life and you may not even realize it.

Let's take this in order:

  1. Do 'rich' people take money 'out' of the pockets of their workers?
  • No. In fact, they 'put' money into the pockets of their workers each and every time they pay their salary or wages every week or every other week. In addition, they pay for a lot of the benefits each worker enjoys such as health care insurance. Try buying health insurance as an individual on the open market; you soon will realize what an enormous 'gift' you are being given by your employer and the 'rich' people you work for each time you get medical attention.
  1. Do 'rich' people win some sort of 'win-lose' proposition vis-a-vis their workers when they get paid high salaries?
  • No. If they don't pay themselves those wages, they are not going to pay their workers more money if it is far higher than the prevailing wage rates of their competition in the area or in their industry. Competitive wage rates set the wages paid to any worker in any particular company, not the amount of money a CEO or owner takes out of the business in a particular year.
  1. What do 'rich' people need to take home $1M or more in salary for anyway? They can't eat it, can they?
  • No, they can't eat their money, that is true. But they can afford to pay for higher-priced food such as caviar that keeps the worker in the caviar business employed along with the importers, the distributors and the retailers who sell high-priced food to rich people.
  1. What do 'rich' people do with all the money they don't spend on the basics of food, clothing, shelter and transportation anyway? Why can't they give it all away to their workers so at least their workers can live better lives?
  • 'Rich' people who don't blow their fortunes away like professional athletes or Mike Tyson typically can only do 1 of 2 things with their money: Keep it in a bank or other financial institution or invest it in stocks, bonds or direct investments in new businesses. They don't keep it under their bed mattress you know.

    And even if they do 'blow' their fortunes away like Mike Tyson did with over $150 Million in career boxing earnings in the ring, they STILL are helping other people maintain a livelihood and make money to support their families. Mike Tyson buying a bunch of $10M mansions that he didn't need employed hundreds of carpenters, stone masons, architects and home decorators during the time of construction and probably hundreds of more people later to take care of the yard and cook his food.

    Even when 'rich' people blow their fortunes, they are still contributing to the economic benefit of people in the middle-and-lower income classes.
  1. What happens at the end of their lives when 'rich' people die? Shouldn't they just give it all back to the workers who helped make them rich and improve their lot in life?
  • Many times, rich people give their money in charitable contributions to help build and maintain things from which we all derive significant benefits.

    Ever heard of 'Duke University' and the 'Duke University Medical Center'? That 'dastardly' James 'Buck' Duke who held a monopoly on the cigarette industry at the turn of the 19th century into the 20th and also started a small energy company you may have heard about, Duke Power and then Duke Energy, gave Trinity College of Trinity, NC $10 million to come to Durham and change their name to 'Duke University'.

    They came a'runnin'.

    Universities and medical centers such as these fine institutions don't sprout up out of the ground like some tulips from Holland we hope you do realize. The Duke family gave away much of their accumulated wealth to help build Duke University and the medical center. Hundreds of thousands of North Carolinians have no doubt been directly healed, cured or saved from the ground-breaking medical techniques at DUMC or know someone who has been cured by those doctors and research scientists there.

    You want to get rid of that too? Some suggest we should tax the heck out of wealthy people's estates like up to 90%...and then what? Give it to the federal government to fritter away like so much of the other federal taxpayer dollar gets frittered away each year?
If you taxed Bill Gates' entire fortune of $35B at 100% and gave it to the US Treasury (instead of letting him set up the Bill Gates Charitable Foundations that have done so much good already and he is nowhere close to retiring or dying as far as we can tell), that would fund the federal government for 3.45 days...and then be gone forever. It would probably wind up funding research on blind albino squirrels or any number of ridiculous and useless projects we have seen funded in the past on an annual basis, sadly.

Nope. It seems like to us that the people who should be making the decisions to take money out of their own businesses and enterprises are the people who own it or who are on the Board of Directors that set executive compensation for the people the company hires.

Now, that is not to say that we think someone who runs their company into the ground or who crawls to Wall Street for a bailout after they mismanaged their business so that the whole economic system almost crumbled in 2008 should not be held accountable for their performance. We think that the TARP bailout of Wall Street and Detroit was a true 'mugging' of the first order to every US taxpayer. They made business decisions that led to their economic collapse and demise only to have us all serve as the trampoline on which they could bounce back into their high-paying, high-wage jobs without ever having to declare bankruptcy and start all over again from scratch.

But for the most part, paying CEOs and labor unions are private decisions made by private businesspeople in the private world of private sector enterprise. None of those are decisions that can or should be made by anyone in the political process. Unless, of course, a politician wants to leave office and set up his/her own corporation and get paid 'only' $100,000 each year with no stock options or warrants and share the wealth with their co-workers just to show the rest of us 'how it should be done!'

We have yet to see anyone go through all the turmoil, tears and struggles of starting a business, stare bankruptcy in the face more than a few times and work and struggle and persevere and not want to take the lion's share of the profits from the business if it ever becomes successful. It is just human nature to want to benefit from your own hard work and diligence.

Isn't it?

We all benefit from a free society where some people just happen to have the talent and ambition to be more 'successful', in a financial way at least, than the rest of us. Without them and their drive and ingenuity, the rest of us would be unemployed or under-employed; we would not have these great universities and hospitals to use and 42% of the income tax now paid by the top 1% would not be paid.

And then how would your favorite social welfare system be funded?

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Sunday, March 3, 2013

'President Obama Has Overplayed His Hand' With This Sequester

Obama Has Misplayed His Hand
in the Sequester Fiasco
This 'Dreaded Sequester' will apparently only cut $42B out of this year's fiscal budget. Not $85B as previously reported and feared.

That is according to CBO. That is also less than 1 penny out of every dollar the federal government spends this year.

Even Joe Scarborough says so although Mika would disagree with him, of course.

Have you had to cut back a little more than 1 penny per dollar in your spending these past 4 years? Betcha have.

1 penny. Less than 1% of the budget this year.

President Obama has way overplayed his hand in this one and tried to scare you to death about Republicans wanting to starve children and throw old people out into the streets. It is a sad day when our President continues to campaign even though he has won re-election and can never run for President again.

You'd think he would quit playing political games and get down to the serious business of governing this nation and helping get us out of this mess in which we are now mired. Is he really going to leave office on January 20, 2017, hopefully voluntarily, and look back on 2 terms of campaigning and not governing?

We have been pretty tough on what we thought was a terrible record on spending restraint by President George W. Bush 43 and the House and Senate GOP majorities from 2001-2007. 'Horrible'. 'Spineless'. 'Irresponsible.' And those are just some of the 'nice' words we could publish.

But the lack of courage and leadership on spending reduction by President Obama and Senate Majority Leader Harry Reid has taken that disgust to the next level. We thought 43 and the GOP Congress were 'major league' in their negligence to protect the national fisc.

They were just pikers compared to Barack Obama and Harry Reid and friends. Bush and the GOP Congress were like the Bad News Bears compared to this team.

Read the damaging (to Obama) CBO report for yourself and see why his histrionics and lambasting of the Republicans are just so false:
'Why Does CBO Expect the Sequestration to Reduce Outlays by Just $42 Billion in Fiscal Year 2013 Even Though the Automatic Budget Cuts Total $85 Billion This Year?
The $85 billion represents the reduction in budgetary resources available to government agencies this year as a result of the sequestration. But not all of that money would have been spent in this fiscal year in the absence of the sequestration: Some would have been used to enter into contracts to buy goods or services to be provided and paid for next year or in subsequent years.
Acquiring major weapons systems and completing large construction projects, for example, can take several years. The $42 billion figure is CBO’s estimate of the reduction in cash disbursements in fiscal year 2013; much of the remaining outlay reductions from the 2013 sequestration will occur in fiscal year 2014, though some will occur later.' 
How Big Are the Automatic Spending Reductions in 2013 and 2014?The economic effects of changes in federal spending in this calendar year reflect the budgetary effects of the automatic spending reductions in fiscal year 2013 (which ends in the third quarter of calendar year 2013) and in the beginning of fiscal year 2014 (which includes the fourth quarter of calendar year 2013).

As reported in Table 1-7 of The Budget and Economic Outlook, CBO projects that sequestration will reduce the deficit by $42 billion in fiscal year 2013 and that this year’s sequestration and automatic spending reductions next year will reduce the deficit by $89 billion in fiscal year 2014.

CBO did not attempt to project the precise timing or detailed composition of this year’s spending reductions. Instead, our estimates are based on historical observations of the timing of the broad types of spending that will be affected.'

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Saturday, March 2, 2013

Is Obama Secretly Trying to Become the Most Conservative POTUS in American History?

Is the Obama Sequester Going to Slash
Federal Spending?
Think about the things 'very conservative', 'far right-wing', 'ultra-conservatives' have wanted to achieve in Congress over the past 40 years.

We'll give you two hints:
  1. Long-term, permanent lower tax rates.
  2. Spending cuts in many bloated federal programs.
Just try to remember the headlines in the liberal media, both electronic and in print, whenever Presidents Reagan, Bush 41, Bush 43 or Speaker Newt Gingrich tried to cut taxes or spending since 1980:

  • 'President Reagan Wants to Pluck The Food Out of Every Baby's Mouth Across the Nation!'
  • 'President George W. Bush 43 Seeks to Starve Old People who Depend on the Federal Government with Massive Tax Cuts!'
  • 'Speaker Newt Gingrich Hates Old People, Poor People, Young People, Puppy Dogs, Baby Seals and Just People In General'
The journalists out there will know what we are talking about. The old saw that 'proved' the media is liberal and not supportive of any conservative Republican goes like this:
'If Jesus was a Democrat, the headlines read: 'Jesus Walks On Water!'' If Jesus was a Republican, the headlines would scream: 'Jesus Can't Swim!'
The point is that every true conservative since time immemorial has said they want tax cuts AND spending restraint as a path to smaller government and balanced budgets. The national GOP full of 'big-spending Republicans' had their chance to curb spending from 2001-2007 when they held the reins of power in the White House, Senate and the House...and they blew it.

They seemed to have learned their lesson. We'll see how they perform for the next 5 years or so before we declare that they have 'seen the light!' and have come back to their senses.

Well, guess what has happened as of March 1, 2013 under 'ultra-liberal', 'uber left-wing' 'huge government spender' President Barack Obama:

Both of these key objectives of right-wing Republicans have been realized

Whether intended or not, the net effect of President Obama's negotiating skills, or lack thereof, has resulted in legislative victories that Republicans for the past 13 years have only dreamed about.

Let's look at both in more detail:

I. George Bush 43 and the GOP put the 10-year expiration date on their tax cuts in 2002 for 2 reasons:

A) It comported with generally-accepted CBO time horizons for budget estimation purposes, and 
B) The loss of revenue if the tax cuts were made permanent would have been so monstrous that no one would have believed how fiscally irresponsible the Bush Tax Cuts were in the first place.*

Yep. The Bush 43 Administration and the House and Senate GOP were so afraid of the estimated future 'cost' in terms of 'lost tax revenue' for the long-term, they did not want to propose making them 'permanent'  in 2002 and 2003.

Think about it. If the 'terrible' Bush Tax Cuts of 2002/03 were as horrible as even then-Senator and then-presidential candidate Barack Obama said they were up through his election in 2008 because they reduced federal tax revenue by over $4.6 trillion for 10 years, imagine what those 'tax collection losses' would be for the next 10 years after that. Or 20. Or 30. Or 50.

Suffice it to say that the Bush tax cuts may have 'cost' the federal treasury $4.6 trillion over the 10 years they were in effect on a 'temporary' basis. 

However, President Barack Obama signing those 'terrible' Bush Tax Cuts into 'permanent' law in 2012 means we can expect to see maybe $20 trillion in lower tax revenue collection over the next 20-30 years. The US Treasury would have collected up to $20 trillion more in taxes had President Obama simply let them all expire at the end of 2010 or 2012 and let all tax rates revert back to what they were in the venerated days of 'Saint President Bill Clinton'.

That decision was all within the purview of President Obama and no one else. He could have simply not signed a law extending them in 2010 or 2012 and poof! tax rates would have all reverted back to Clinton-era rates for every tax-paying citizen.

But he did. And now, 98%+ of all Americans will enjoy lower tax rates...forever, not just for the next 10 years. But 'forever'.

Republican Presidents going back to when the income tax was passed as a constitutional amendment in 1913 would have all given their eye-teeth to be able to brag about such a permanent legacy: Lower. Taxes. Forever!

II. And now, today, President Obama, whether he miscalculated in his negotiating tactics or just simply didn't believe he couldn't browbeat the Republicans in the House into submitting to his will simply because he won a second term last year, has caused the dreaded 'Sequester' to be triggered into action.

$85 billion will be somewhat arbitrarily reduced from this year's fiscal year budgets of many federal agencies. But it won't deal with any of the cost-drivers and factor causing our fiscal dilemma: rising health care costs.

In future years, this sequester will lower the baselines for future growth by approximately $1.2 trillion. While that might seem like a large number, remember that it is a cumulative number over the next 10 years so there is some compounding of savings from past years plus interest savings costs from debt foregone as a result of not spending this $1.2 trillion.

A 1.2 trillion baseline reduction in spending is simply this: a reduction of 3% of expected future spending which has not been spent yet! How can cutting increased future levels of 'spending' that hasn't even occurred yet cause the 'Economaggedon' or the 'Recessapocalypse' or the 'Depressunami' that President Obama and opponents of the sequester seem to think it will cause in 2013?

$1.2 trillion in future savings in spending is more than we have seen since 1997 when Bill Clinton signed the Balanced Budget Act of 1997 with Newt Gingrich, 

We'll take it. It is better than nuttin', right?

If the Spectre of President Ronald Reagan would come visit President Obama in the Lincoln Bedroom one night, he might say something along the lines of one of his most famous movies:

'Barack, you have truly won not only one huge public policy goal but two now for the Gipper! I sure wish I could have passed permanent tax cuts and cut spending by $1.2 trillion! Keep it up, young man!'

God Bless America!'

* Point of clarification from our friend and intrepid 'inside-the-Beltway' translator, Roger France:
(The reason why the Bush Tax Cuts were not made permanent in 2002 was) 'because they were not voted on in the Senate as stand alone bill, subject to a 60 vote filibuster, but as part of the Budget which only required a simple majority in the Senate. Republicans knew they could not get 60 votes to cut taxes, so they attached it to the Budget Reconciliation bill. I now it's a bit of inside baseball, but... Yes, the same process used to enact 'Obamacare.' What comes around goes around....'
(Still the fact remains that the size of the Bush tax cuts being made permanent in 2002 was so enormous that the GOP had to find another way to pass the tax cuts instead of in a stand-alone bill-editor's note)

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