Thursday, February 27, 2020

Victory or Death: What Would George Washington Have To Say Today?

"What the heck
is going on here?"
We visited our son, his French wife and our grandson in Fredericksburg, Virginia last weekend. As Providence would have it, Mount Vernon was celebrating the 288th birthday of George Washington on the “real” President’s Day, Feb. 22. 
Since we can see Washington’s childhood home right outside of the window of my son’s home across the Rappahannock Riverwe decided to pay a visit to “President Washington” up the road. 
We met “President Washington” and took the obligatory photo. We could imagine what had to be going on inside of his head as he watched the news and followed current events on social media 
What the heck is going on here in the United States of America todayI hear there is a socialist who is the front-runner for the Democratic nomination for president to be one of my successors. What does this word socialist’ mean as a political party anyway?” 
“Socialism wasn’t even invented until half a century after you passed away, Mr. President. Some guy named Karl Marx said things were so miserable in the industrial age in England that one day the workers of the world would unite and overthrow all of the bourgeoisie and take over control of the government and economy.” 
“Miserable? Most people I see here today at Mount Vernon appear to be well-fed and prosperous. What would the workers do if they ran a global business? Would they have the experience and talent to do so?” 
“Do you mean to tell me that we fought a bloody war against the capricious, oppressive and unfair leadership of King George III to win freedom from monarchical rule only to have a guy running for president in 2020 who wants to take over complete control of our economy and personal freedoms and make American citizens do what he wants them to do, not allow them to make their own decisions and keep their own money?” 
“That is pretty much it, Gen’l. Bernie Sanders and his followers want to take away money from successful people and give it to lower-income folks. Socialists want everyone, including rich people, to have free health care coverage; free college educations and a guaranteed minimum wage.” 
“What is a minimum wage?” 
“Forget about it, Mr. President. 
“What about free will? What about freedom of choice? Is there still the fundamental freedom to worship as you see fit, speak out loud in public as you choose, print what you want in a newspaper, or assemble with whoever you so well please?” 
“Well, Mr. President, not really. There is this thing in America today called ‘political correctness’ where a certain group of political elites have censored speakers who say or do something in the political arena with which they disagree. Many college campuses have canceled speeches by conservative speakers simply because many of the students and almost all of the faculty disagree with them.” 
“(I)f Men are to be precluded from offering their Sentiments on a matter… reason is of no use to us; the freedom of Speech may be taken away, and, dumb and silent we may be led, like sheep, to the Slaughter.” 1 
“Well-said, Mr. President. A lot of people feel the same way today. Do you have any other advice for us here in the 21st century?” 
“In politics as in philosophy, my tenets are few and simple. The leading one of which, and indeed that which embraces most others, is to be honest and just ourselves and to exact it from others, meddling as little as possible in their affairs where our own are not involved. If this maxim was generally adopted, wars would cease and our swords would soon be converted into reap hooks and our harvests be more peaceful, abundant, and happy.” 2 
“Our son almost named our grandson Rochambeau, Mr. President.” 
“I wish it had been Lafayette.” 

1. Address to the Officers of the Army | March 15, 1783 
2. Letter to James Anderson December 24, 1795 

(first published in North State Journal 2/26/20)

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Wednesday, February 19, 2020

Excessive Debt Is Like Carbon Monoxide

Too Much Debt Is Like Carbon Monoxide
There was a lamentable disco song in the 70’s that claimed “love is like oxygen.”  

That may be true. If it is, then having too much debt is like carbon monoxideDebt is colorless, odorless and deadly to anything if allowed to build up to dangerous levels. 

At some point, usually when it is too late to do anything about it, excessive debt leads to a very uncomfortable reckoning — bankruptcy. In the case of nations, it leads to currency value collapse, hyper-inflation, exorbitant interest rates and dissolution of empires and national status, if history from the past 800 years is to be believed. 

Profligate government spending and largesse has led to more nations collapsing and being replaced than all wars in history combined. Governments die with a whimper when bankruptcy happens. All of them could have survived had they stopped spending more money than they received in taxes from their population early enough to avoid economic disaster. 

It sounds simple, doesn’t it? The problem is that elected politicians value their jobs so much they continue providing bread and circuses for voters but never make the tough decisions to curtail spending. 

The only time politicians in Washington made such tough decisions in recent memory was in the 1990s. A coalition of thoughtful fiscally-responsible Republicans and Southern Democrats provided the leadership and majorities necessary to produce balanced budgets from 1998 to 2001. Congress holds 99% of the cards when it comes to balancing the budget. Presidents can propose budgets, but they can only sign or veto the final package passed by Congress, so assigning too much praise or blame on presidents is misguided and off-target. 

President Trump released his FY 2021 budget last week, which purports to reduce national debt to 66% of GDP by 2031. CBO released their analysis, which says we are going to have $1 trillion annual budget deficits for the next decade regardless of who is in the White House after the 2020, 2024 and 2028 elections. 

It is baked in the cake. We can’t run from massive budget deficits anymore. Congress has to put a 
brake on spending growth. Now. 

CBO estimates the US will owe $31 trillion in debt held by the public at the end of 2030, up 72% from $18 trillion today. America has incurred massive debt before, usually to pay for a war effort, but never in relative peacetime.  

What changed structural budget deficits forever was the passage of Medicare and Medicaid in 1965No longer would people leave federal rolls as soldiers did after wartime. Millions of seniors woulstay permanently on federal assistance on Medicare when they reached age 65.  

Average life expectancy for someone born in America in 1900 was 48 years. Most did not survive long enough to qualify for Medicare or Social Security in 1965. Average life expectancy for people born in 1955 is 74 years. Life expectancy for babies born in 2020 is 79 years. 

At a very minimum, the eligibility age for Medicare should be adjusted to correlate with the rising threshold for Social Security, now at 66 years and two months. Americans are living almost 50% longer than a century ago. Our entitlement programs should reflect that welcome and desired improvement. 

We don’t have to pay off the entire $18 trillion in national debt owed to the public in one year. We have to stop adding $1 trillion to our debt per year which we also did in 6 of the past 11 years. 

Holding overall growth in federal spending to 2% per year for a decade would be like opening the garage that has a car in it filling up with carbon monoxide. There is no sense in trying to see how much carbon monoxide a person can tolerate before expiring. 

The same is true with burgeoning national debt. Why take the chance when we can do something about it today? 

(first published in North State Journal 2/19/20)

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Wednesday, February 12, 2020

American Freedom Is Incompatible With Democratic Socialism

Bernie Sanders keeps trying to say “democratic socialism” is different from pure socialism.  
Is pure socialism so bad that it needs a clarifying adjective to make it sound more palatable as “democratic socialism”? 
Socialism has its roots in “The Communist Manifesto, written by Karl Marx and Friedrich Engels in 1848. Call it what you will, but nothing changes the fact that socialism elevates the collective over that of the individual wherever it has been implemented. Ultimate power resides with the bureaucrats in government and the very few at the top who run the country, not with the individual. 
Advocates of democratic socialism say it elevates and respects the rights of workers to help them live better lives. They will use the coercive power of government to tax wealthy people and corporations heavily to pay for all of their “free” promises to the populace.  
“Wealthy people shouldn’t be so wealthy regardless of how they got rich!” is a bedrock of modern socialist thought. 
It goes against human nature to ask any person with a dream to risk their money, max out credit cards, second mortgage their home, struggle to grow a business that hopefully will make a profit within five years, and then force them to share all of the profits they generate later equally with everyone else. 
Most businesses don’t survive past five years. Many never turn a profit. If socialists want everyone to share in the upside benefits of business success, shouldn’t socialism also demand everyone shares in the downside and pay business owners back for money they lose in a failed business? 
Pure socialism goes against any basic understanding of fairness to the individual who works hard and has natural-born talent. Imagine if Michael Jordan was paid the same amount of money as each teammate on the Chicago Bulls even though he was the main reason they won six championships. 
Should Jud Buechler, who averaged 3.8 points per game in the 1995-96 seasonhave been paid the same as Michael JordanWould that be fair to Michael Jordan?  What if President Bernie Sanders determined that Michael Jordan should be paid $100,000 instead of $100 million? What then? 
Democratic socialism is described in textbooks as “a political philosophy that advocates for political democracy alongside a socially owned economy with a particular emphasis on workers’ self-management and democratic control of economic institutions within market socialism.” 
Democratic socialists such as Sanders want total control of the economy even though hardly any of them have ever started, run or sold a business of any size or importance. They view free enterprise and wealth accumulation for successful rich people to be inherently “evil.” They don’t understand that free market capitalism has raised the living standards of hundreds of millions of people around the globe since 1900.  
Not government. 
Democratic freedom goes hand-in-hand with freedom in the marketplace.  Individual freedom allows people to start with nothing but an idea and sometimes turn it into a multibillion-dollar international corporation. 
Socialism does not allow such massive private business successes. There has not been one single company started in France since 1975 that has grown to be worth more than $1 billion. Apple, Amazon and Microsoft, all started in the U.S. since 1980, and are worth $1 trillion each in market capitalization, making plenty of employees and all early shareholders very wealthy people. 
Democrats have been courting socialism for the entirety of the 21st century. Democrats have an avowed socialist, not a declared Democrat, Bernie Sanders, leading the way for their presidential nomination. Elizabeth Warren can spout off socialist doctrine with the best of them. Pete Buttigieg’s father was an outspoken defender of a “modern version” of Marxism as a professor at Notre Dame. 
There is no “modern version” of Marxism that is tolerable to the freedoms we enjoy in our modern American Democratic Republic. Democratic socialism is incompatible with the foundational principles of American freedom that have empowered the individual over the state since 1789.   
This November is the time to end this dangerous and na├»ve flirtation with a very dangerous political philosophy once and for all. 
(first published in North State Journal 2/12/20)

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Wednesday, February 5, 2020

Medicare Is For Old People; Medicaid Is For Poor People (But Not All Of Them)

Which is Which? And Why Haven't
Both Already Solved All Our Problems?
One of the biggest hurdles we face a nation in our political life together is the lack of basic factual information. It is next to impossible to solve political problems when every single issue is prismed through the spin machines and war rooms on both sides and basic facts are obscured purely for political purposes. 
Such is the case with Medicaid. Hardly anyone outside of the health industry knows anything about it. 
Including many elected officials. A Republican health care expert in Washington recounted a debate prep session he had with a Republican presidential nominee. After three days of making no progress, he said to the candidate: Just remember: Medicare is for old people. Medicaid is for poor people. 
The candidates eyes lit up as he fairly leaped out of his chair. I got it! he shouted and walked triumphantly out of the room. 
Except the statement is not entirely true. 
Medicare is for old people over the age of 65FDR first adopted 65 for Social Security in 1935 based on the precedent of Otto von Bismarck using it as the retirement age for the German retirement plan in 1889LBJ adopted it for Medicare in 1965. 
Medicaid, however, is not available for every poor man or woman as commonly accepted. Medicaid coverwomen with infants or dependent childrenaged, blind and disabled, and long-term nursing care. 
People are surprised to learn that men of all races who are below or near the poverty level between the ages of 18 to 65 are not covered by Medicaid. Neither are childless women who are struggling. 
In North Carolina, adults account for 231,000, only 11%, of the 2.1 million enrollees in Medicaid. Fifty-three percent of enrollees (1.1 million) are children; aged, blind and disabled people account for 21%, or 441,000, of the state’s Medicaid recipients. 
Medicaid expansion is at the crux of the current budget impasse in North Carolina. Expansion would add up to 500,000 childless adults and other qualifiers to state Medicaid rolls. These are childless adults previously not eligible for Medicaid plus nearpoverty level individuals or families who either have not bought or cant afford the lowest cost ACA plan in the exchange. 
The total cost of expansion for North Carolina is estimated to be $4 billion annually. Instead of being matched at the traditional 67% federal Medicaid match rate for women with children; aged, blind and disabled and nursing home care, every new recipient — childless adults mostly — would be matched at a 90% rate by the federal government as mandated under Obamacare. State taxpayers would pay $400 million more per year in the 10% match, but everyone would pay as interest and the federal debt keep going up due to increased federal participation. 
North Carolinas taxpayers currently pay 33% of the cost of Medicaid, or $4 billion per year, while federal taxpayers and foreign debt holders pay the other $11 billion. Medicaid accounts for $15 billion (32%) of the entire state budget.  
As health care costs rise exponentially due to technology and utilization, (who would have ever thought hearts and lungs could ever be transplanted when Medicaid was adopted in 1965?), the costs of Medicaid and Medicare keep exploding and increasing deficits at the national level and squeezing out education, public safety and transportation budgets at the state level. 
There are no simple answers to health care as Bernie Sanders and Elizabeth Warren want you to believe. Putting everyone on what would be essentially Medicaid for All will infuriate the 180 million Americans currently on company-sponsored plans to name just one example. 
Having a robust debate on how best to extend coverage to all Americans is a good thing to do in a campaign year. Having the right facts to back up those arguments is crucial to finding the right answer. 
(first published in North State Journal 2/5/20)
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