Friday, December 30, 2011

The U.S. War On Drugs - Still Losing Because Of Our Do Nothing Political Class

Between government waste, criminal fraud in the government's major social programs, our debilitating national debt levels, the failure that is Obama Care, ineffective politicians, and general political class insanity, we have not reported much on our nation's failed war on drugs lately. That does not mean the war has ended, it has just gotten more intense and dangerous, as outlined in the following, recent news articles:

- The Associated Press (AP) reported on December 21, 2011 that the entire police force of Veracruz was fired for having too many illegal connections to the drug cartels. This action resulted in 800 police officers and 300 administrative personnel losing their jobs. The firings are the result of the Federal Mexican government trying to eradicate drug cartel financed corruption in the ranks of local police forces.

Makes it difficult for citizens to trust and believe in their local government when the members serving within that government are as corrupt and as dangerous as the drug cartels members they are supposed to be fighting. When you have to fire everyone responsible for law enforcement and start over from scratch, you really have a serious problem.

But this is not an isolated incident. It has happened in other Mexican cities previously and the Federal Mexican government is in the process of examining every single policeman in the country, all 460,000 of them in over 200 Mexican cities, to see which are okay to continue serving and which need to be terminated because of their association with drug gangs and criminals. Pitiful.

- An Associated Press article from December 26, 2011 described how the Mexican drug cartels have build relatively sophisticated communications networks all over Mexico that enable them to more privately conduct their illegal drug and criminal activities. These private networks stretch from the border with Texas all the way down to Central America.

These networks allow the cartels to avoid being wire tapped and followed by Mexican law enforcement authorities. The network is so widespread that local cartel employees can radio ahead to cartel components when they see police and armed forces moving out of their barracks and buildings, provided advanced information on intelligence to cartel locations before the Mexican authorities arrive.

The communications system has been so effective that it has been specifically targeted by the Mexican government and law enforcement. However, even if the government is successful in disrupting the networks, the equipment is replaced almost immediately, given that the components are relatively simple and the cartels have more than enough illicit funds to easily replace whatever equipment that is is seized and destroyed by the police and armed forces.

- A December 25, 2011 Associated Press article did a recap of the recent drug cartel violence that affects Mexico on a daily basis:
  • Three U.S. citizens, a mother and her two daughters who were in Mexico to visit relatives for the holidays, were killed when gunmen attacked three buses, killing a total of seven passengers.
  • The five gunmen were eventually killed by Mexican soldiers but not before the same gunmen had shot and killed four people from a nearby town.
  • Mexican soldiers had recently discovered 13 dead bodies in an abandoned truck along with a message that they were killed as a result of a drug cartel rivalry. Ten of the bodies had been decapitated.
  • In the same area, several days before, another ten dead bodies were found, also presumed to be victims of drug cartel violence.
  • The article also reviewed how the director of security of the Sinaloa drug cartel had recently been arrested. He worked for Joaquin "El Chapo" Guzman, one of the most wanted drug cartel leaders int he world. The amazing thing from the article relative to Guzman is that his personal net worth is over $1 BILLION, a result of illegal drug and other criminal activities.
Billionaire criminals, unspeakable violence that kills American and Mexican civilians alike, criminal cartels that are large enough and rich enough to install their own nation wide communications networks, and official, government, and police corruption everywhere. All because the biggest market for these illegal drug cartels, the United States, has not had a compassionate, effective, or comprehensive strategy for addressing the drug addiction plague that has been with us here in this country for decades.

And that strategy is nowhere close to be formulated or addressed, never mind being implemented. In the mean time, drug cartels grow more powerful, more sophisticated and richer. The additional danger of the cartels partnering with foreign enemies of the U.S. becomes more and more possible. We already know of the Iranian-linked conspiracy to assassinate the Saudi ambassador to the United States in D.C., a conspiracy which had ties to Mexican drug cartel components. Univision recently ran news reports indicating that it had proof of Iranian terrorism ties to South American countries and their efforts to expand into Mexico. Very scary stuff.

In the meantime, Obama is continuing his 17 day vacation in Hawaii while his opponents, the Republican Party, are preoccupied with its Presidential primary process. But that is to be expected. No President, Congressional session, or political figure has paid much attention to the lost war on drugs since Nixon announced the initiative about forty years ago. As a result, we are faced with the never ending rise in drug cartel-related corruption and violence because our political class has failed to adequately address the problem.

Step 26 from "Love My Country, Loathe My Government" would certainly be a good starting point for them. It proposes a systematic problem solving process of addressing this growing crisis in order to develop a plan to actually confront and resolve it. When you consider what the political class has not done relative to this lost war on drugs, what do we have to lose by implementing Step 26? Anything is now better than the political class solution, which is "do nothing."

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
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Thursday, December 29, 2011

The Continuing Disaster That Is Obama Care - Latest Poll Shows Doctors Also Think It Is Rdiculous, Ineffective, and Has No Chance Of Succeeding

Today's discussion will focus on the results of a recent opinion poll that was conducted by the highly respected consulting company Deloitte. The detailed results of the research can be viewed in the Forbes article from December 26, 2011 that summarized the findings. ( ). The poll surveyed a statistically valid sample of U.S. doctors, the set of health care professionals that are most likely to be significantly affected by the legislation so they have a direct, insightful, and first hand knowledge of what is about to happen to our health care system.

The findings were extremely pessimistic about how well Obama Care will solve the issue of ever escalating health care costs in this country. Since those doctors in the survey know more about our health care processes than any politician, one would hope that our political class would pay close attention to their evaluation of Obama Care and find a way to radically alter or totally repeal this disastrous law, based upon the poll findings.

Highlights of the poll include the following results:
  1. Two thirds of the doctors surveyed expect health care costs to rise as a result of Obama Care, the exact opposite result the legislation was supposed to cause.
  2. Only 27% expect health care costs to go down under Obama Care.
  3. About 70% of those surveyed expect Obama Care to discourage the best and brightest of America's youth to go into medicine. This finding has serious ramifications for the quality of health care ten, twenty, or more years down the road. If the doctors are to be believed, we will have less intelligent and likely less competent doctors in the future delivering higher cost medicine.
  4. Nine out of ten doctors surveyed believe that Obama Care will raise health care premiums for businesses and American citizens, the exact opposite of what is supposed to happen.
  5. The article claims that Congressional Budget Office's latest analysis of Obama Care indicates that annual health care insurance premiums for the average American family will actually go up about $2,100, the exact opposite of what the law was supposed to do. This is not surprising since we already have discussed findings from the Kaiser Foundation which showed health care costs went up 9% in 2010 whereas they only went up 3% in 2008 and 2009, prior to the passage of Obama Care. This is the exact opposite of what is supposed to happen.
  6. Almost 70% of those surveyed expect emergency wait times to increase as a result of Obama Care, the exact opposite of what is supposed to happen.
  7. 83% expect the waiting time to see your primary doctor will also increase.
  8. Half of the doctors surveyed expect access to health care will get worse on average due to hospital closures that come about as a result of the legislation.
  9. Less than 25% of those surveyed expect their paperwork load to decrease as a result of Obama Care.
  10. According to the article, an analysis published in April 2010 by the head actuary at the Centers for Medicare and Medicaid Services (CMS), concluded that the nation will spend $311 billion more on health care needs by 2019 then it would have spent if Obama Care had not been passed.
Scary, scary stuff. But this information gets truly horrific when it is combined with other Obama Care information that we have previously reported on in this blog or which is newly available:
  • Tens of millions of Americans are likely to lose their existing health care coverage since Obama Care idiotically makes it less expensive for companies to terminate their existing employee health care plans then to continue them under this law. This simple reality is because the fines for not offering health care insurance to employees are less than the expense of continuing to offer the existing plans.
  • Major companies including AT&T, John Deer, Caterpillar, McDonalds, and others have already made public their potential for shutting down their current employee and retiree health care insurance plans in order to save money as a result of the meager fines in Obama Care.
  • These newly uninsured millions of Americans will look to the health care exchanges set up by Obama Care for insurance and the government subsidies they provide, significantly adding to the national debt.
  • However, people who lose their company health care insurance coverage, coverage  that covers their entire family, can only get individual insurance coverage and subsidies under Obama Care; this condition will require these families to pay for additional health care insurance without any subsidy support in order to now cover everyone in the family.
  • Obama Care administrators have already had to approve well over 1,500 waivers to the law. Any piece of legislation that allows over 1,500 waivers to its tenets within two years or so of passage is a significantly flawed piece of legislation.
  • The law was written so poorly that it will allow middle class and upper class families with sufficient economic resources to get heavily subsidized health care insurance from the government's insurance exchanges even though they can afford to do without the subsidies. This foul up will cost the American taxpayer unanticipated billions of dollars a year.
  • The law may even affect the marriage rate, given how poorly it was written. If a single man qualifies for government health insurance  subsidy support because his income is a little below the income threshold marries a single woman in the same situation, their newly formed family income total will definitely push them over the threshold, forcing them to either pay out significantly more for their health care insurance or stay single in order to still qualify for government subsidy support.
  • One likely reason that the nation's unemployment rate is staying so high is the business uncertainty generated by Obama Care. Companies are afraid to hire full time people since the potential for tax increases, increased health care bureaucracy, and increased health insurance expenses is so scary that companies would rather muddle through with the work force they currently have then take on additional risk and uncertainty.
  • Business Week reported in its November 28, 2011 issue that any American can now purchase a $400, ten foot by five foot chart (50 square feet!) that contains all of the 1,968 new and expanded powers and responsibilities granted to the Federal government as a result of Obama Care. You cannot be living in a free country when a single piece of government legislation gives the political class almost 2,000 more ways to control your life.
  • The legislation does not include significant medical industry tort reform, an effort that has successfully decreased health care costs when passed at the state government level.
  • The legislation does not include significant provisions and incentives to expand private health care insurance competition across state lines, increased competition that would help drive down health care costs.
  • The legislation will dramatically increase the medical spending costs paid out by the Federal government without first fixing the fraud, waste, and criminal activity in the current government medical payment programs, Medicare and Medicaid. Without first fixing the fraud problems that exist today which wastes $100 billion or so a year, by increasing the size of the government's role in health care insurance, the amount of fraud and waste is highly likely to rise as well.
  • The CLASS portion of the legislation had a two fold purpose. First, it was supposed to provide long term health care insurance for those Americans who wanted it. Second, it was to contribute a positive $80 billion cash flow financial impact in the first ten years of Obama Care. The CLASS effort has failed miserably since it has already been terminated because of an anemic enrollment rate caused by its poor provisions. The termination ends the theoretical positive financial impact on the overall Obama Care program, dealing a serious blow to the financial credibility of the entire legislation.
  • And finally, Americans' sentiment for Obama Care has never been lower. The latest Associated Press/Roper/GIK poll shows that the percentage of Americans that support the legislation is at its lowest point ever, only 29%. Within the 29%, only 13% strongly support the law's provisions. Additionally, the poll shows that an overwhelming 84% of those polled do not think that the Federal government should have the power to force every American to purchase health care insurance, as mandated in the legislation.
And most important of all, the legislation does not effectively or substantially impact the true root causes of our ever escalating health care costs:
  1. Our population is getting older from an average age perspective, requiring significant research and creative approaches to deal with an aging population and its related aging diseases.
  2. Americans smoke too much.
  3. Americans eat too much.
  4. Americans eat too much of the wrong types of food.
  5. Americans do not exercise enough.
By virtually ignoring these root causes, the legislation will have virtually no chance of being successful at reining in our out of control health care costs. This problem has to be treated primarily as a public health crisis that is solved by changing bad behaviors and not as a public policy crisis that can be solved by more bureaucracy, more government, and more taxes.

The doctors know this Obama Care approach will not work. Businesses know it will not work. Any sane American that looks at the track record of failure of the program so far knows it cannot work. Smart Americans from various organizations and think tanks know it will not work.The only ones who are blind to reality are the Obamas, Reids, Pelosis, and others who see expanded government bureaucracy, taxation, and power as a fix for everything even though government has not resolved a major issue for decades.

Two steps are needed to get us out of this rut. First, the Congressional Budget Office (CBO) needs to do a completely new analysis of the entire legislation to quantify how bad the financial and health care impact of this law now appear to be. Obama used the initial CBO analysis to show how the legislation would decrease the national debt. We now know that analysis is nothing more than a fantasy with no connection to the real world, a new CBO analysis is sorely needed.

Once we find out how damaging the Obama Care is, we need to execute the process outlined in Step 26 of "Love My Country, Loathe my Government," to terminate Obama Care and replace it with a cogent, effective, efficient, and financially viable alternative. This process includes the use of smart Americans from all walks of life and disciplines rather than the political class and their lobbyist friends in Washington.

Not implementing these two steps would change Obama Care from its current disaster status into a fatal fiasco status. A fiasco that bankrupts the country, increases the  expense of health care, decreases the quality of health care, and decreases the access to health care while never solving the original problem.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Wednesday, December 28, 2011

One State Poltician Making The Right Moves, Having The Right Priorities - Florida Governor Rick Scott

As a current resident of Florida, I am acutely aware of the economic problems facing the entire country. Florida's economy had long been heavily dependent on the construction industry and when the Florida housing industry cratered several years ago, the construction industry, along with the subsidiary industries that serve that industry, real estate agents, title search companies, etc., also suffered a significant downturn. This resulted in anemic state economic growth and an unemployment rate that has been consistently higher than the rest of the country.

Thus, the economic situation facing members of the Florida political class is probably worse than the economic challenges facing most state and local governments and politicians across the nation. But all is not lost in Florida, which has taken a different path in managing their financial plight than the state of Illinois.

As you recall from our Illinois post last week, the Illinois state government has also been having dire financial problems and billion dollar shortfalls in their state budget. Their primary approach to trying to resolve their government budget problem was to significantly raise personal and business income taxes early in 2011 rather than aggressively reducing state government spending.

As 2011 winds down, it has become apparent that raising taxes on Illinois businesses was probably a big mistake. Large businesses such as Motorola, Sears, and other companies have threatened to leave the state of Illinois, taking thousands and thousands of jobs with them. This has resulted in the state government providing tax reduction deals to these corporations to keep the companies and their jobs within the state of Illinois.

Thus, a year after raising business taxes, the state has just turned around and given back the raised tax revenue to businesses, leaving the state government about in the same state it was in as 2011 began: continued out-of-control state government spending and budget deficits. A year lost and the budget in worse shape. Not a good strategy.

As a result of this muddled approach, the unemployment rate in Illinois has dropped about 11% in the past two years (from a high of 11.2% to 10.0%) but the national unemployment rate has dropped 15% (from a high of 10.1% to 8.6%) in the rest of the country. Thus, Illinois is not recovering as quickly from an economic perspective, as measured by the unemployment rate, than the rest of the country. One possible reason for this less than average economic improvement is that the state political class is trying to solve the budget problem by raising taxes and not reducing government spending.

The state of Florida has tried the opposite approach, keeping taxes and tax rates unchanged, cleaning up government waste and fraud, and reprioritizing state budget priorities to be more focused on serving citizens and not special interests. Consider two indicators of improving economic health, one global and one local:
  • Globally, the state unemployment rate is down 17% (from a high of 12.0% to 10.0%), beating out both the Illinois unemployment performance (11% drop) and the national performance (15% drop).
  • This improvement has occurred even though one of the state's main economic drivers, the construction industry, is still in a deep economic rut.
  • Locally, although the state economy has been lousy for the past three years, my home's property taxes have decreased every year since we moved to Florida in 2005, dropping about 37% over that time frame.
  • Thus, using my sample size of one, the state political class in Florida has reduced my property taxes in really tough economic times but has kept most state and local government services functioning. Teachers are still teaching, police and fire are still protecting, libraries are still open, roads are still viable and being fixed, etc.
Credit for this performance, globally and locally, has to go to the state political class, our former governor, Charlie Crist, and our current governor, Rick Scott. How Rick Scott is effectively addressing and improving the state's economic woes was summarized in an article from the Daytona Beach News Journal on December 12, 2011:
  • The governor's budget proposal next year intends to cut government spending significantly by reducing the state government staff by about 4,500 unneeded jobs.
  • He also has a plan to slash out-of-control Medicaid spending in a measured, fair, and intelligent manner.
  • The reason to boldly attack Medicaid spending is that the state of Florida is now spending 180% more on Medicaid today than it spent in 2000 while the state revenue has only gone up 30% in that same time frame, making Medicaid a larger and more unacceptable, and unsustainable, percentage of the overall state budget.
  • The article notes how this reduction needs to be done carefully in order to keep overall health care costs and spending down in the state without cutting health care coverage and concludes that Scott is approaching this problem in the right way.
  • But the governor is showing some courage, courage that is certainly lacking in Washington relative to runaway Medicare and Medicaid costs, a courageous stance that the article recognizes that is sorely needed: "Lawmakers may have different ideas about the program, but they all must face up to the budget challenge it poses. The education budget will be in constant peril if the state doesn't find ways to get Medicaid costs under control."
  • Scott has proposed ways to cut back prison costs in the state as another logical and smart way to save money since the state crime rate has been decreasing and with that decrease, the prison population has shrunk.
  • The governor has been praised by starting to demand detailed accountability for state spending by each state government department, requiring departmental "'fully accountable' budgets to show how money is spent, what service is provided and what is accomplished."
  • In the face of budget pressures and shortfalls, the governor's budget proposes over $1 billion more to the state budget for use in Florida public schools, an investment that will directly serve the vast majority of Florida families.
  • There are also no changes to state support for higher education funding despite an overall state budget crisis.
  • In the face of these changes, the governor is calling for no increases in taxes, a wise move given the disaster that happened when Illinois significantly raised taxes. This "no tax increase" position is also supported by the newspaper article's writer: "Now is not the time to raise taxes -- not when the economic recovery is fragile and growth still is relatively slow."

So let's reivew:
  1. The Florida state economy seems to be improving quicker than the national economy and the economy of at least one state (Illinois), a state that  incorrectly decided that raising taxes on state businesses and residents was a better way to close budget gaps caused by out-of-control polticial class and government than reducing spending.
  2. The Florida governor is not raising taxes, taking the more effective and prudent approach of cleaning up waste and fraud in government spending by reducing prison system costs, shrinking the state payroll of unneeded jobs, and reining in excessive Medicaid costs.
  3. The governor is showing tremdendous political courage by addressing a runaway Medicaid expense and cost stream that will eventually bankrupt the state if not boldy addressed now.
  4. In the face of a short term Florida state government budget shortfalls, the governor is not sacrificing the long term eocnomic health of the state by increasing investment in Floirda public schools.
  5. The governor is requiring state government functions to be fully responsible and accountable for the taxpayer money they spend, an effort sure to reduce unneeded and unwarranted government spending, both long term and short term.
As we have said many times in this blog, fixing the major issues that have faced this country for decades should not be this hard to resolve. All it requires of our political class is a little courage, a little unselfishness, a little hard work, and a little creativity. Govenor Rick Scott is being successful with these attributes. Too bad that the Washington polticial class has none of these same qualities.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:

Tuesday, December 27, 2011

The Proposed Congressional Reform Act Of 2011 ....Or How To Fix A Dysfunctional Organization

Today's post is based on an email that has been floating around the Net for a little while that supposedly is the brain child of Warren Buffet. It proposes the "Congressional Reform Act of 2011" and sets forth a series of steps that are needed to fix the dysfunctionality that has infected our political processes, with a focus on Congress.

Such an effort is sorely required if you consider the  current state of Congress and the people that reside within it:

  1. Public opinion polls show Congress with record low approval ratings, with many polls showing single digit (less than 10%) favorability results.
  2. The major issues facing the country, e.g. failing public schools, lost war on drugs, lack of a national energy policy, high national debt, escalating health care costs, etc. have been with us for decades, through many different sessions of Congress, but are nowhere close to being resolved.
  3. Our political class has run up $15 TRILLION worth of national debt with nothing to show for it, putting the nation's future financial solvency at risk.
  4. Members of Congress often use insider government information to improve their personal financial status and wealth, a clear ethical problem, if not a legal problem.
  5. Members of Congress often participate in company IPO offerings, offerings that are not available to ordinary Americans, to improve their financial status and wealth, a clear ethical problem if not a legal problem, and possibly using this access to IPOs to unduly influence legislation.
  6. Members of Congress control their Congressional compensation and benefit packages, independent of the quality of their performance, which has been very low for years.
  7. Once elected, Washington politicians leverage their Congressional office via earmarks, Congressional district gerrymandering, monetary and legislative favors to campaign donors, etc. to help ensure their reelection regardless of their performance.
What a disgraceful situation. Is it any surprise the nation is in such dire straits?

Which gets us to the Congressional reform Act of 2011 email. Obviously, with only a handful of days left in 2011, Congress will not get reformed in 2011. However, that does not mean we should not push forward to fix the malignancy that is Washington. The alternative, retaining the status quo, is not acceptable to our nation's financial solvency, our personal freedom, and the future of our kids and grandkids.

What is amazing about the proposed reformation of Congress is that all of the steps are totally consistent with the spirit and individual steps described in "Love My Country, Loathe My Government."  Thus, not only will we review the proposed Warren Buffet steps to reform Congress but we will overlay the steps from "Love My Country, Loathe My Government" to get a slightly different and more detailed description of what is needed to finally fix Washington.

Congressional Reform Act of 2011/"Love My Country, Loathe My  Government" Overlay

1. No Tenure / No Pension. A Congressman/woman collects a salary while in office and receives no pay when they're out of office.

Step 9 (from "Love My Country, Loathe My Government) - All current and past members of Congress will immediately lose access to either their government pension or their government 401K-like government savings program, the choice being theirs.

2. Congressional members (past, present, and future) participate in Social Security.

There is no equivalent step in "Love My Country, Loathe My Government" since Congressional members already participate in the Social Security program and have done so for decades. This oversight of the email would lend credence to the view that this list of reformation did not originate with Warren Buffet. I assume he is smart enough, or has advisors are smart enough, to realize that Congressional members are already in the Social Security System. If this had not been not the case, it certainly would have been a prominent step in "Love My Country, Loathe My Government."

3. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

This step would certainly help improve the lousy financial status of Social Security, an additional influx of funds. However, Steps 10, 11, and 12 from "Love My Country, Loathe My Government" would go much further to improving the financials of the system. These steps include raising the retirement age to 70 (with a hardship exemption), uncapping the amount of income that is subject to the Social Security tax while reducing the size of the tax percentage, and forbidding an American with total wealth of over $3 million of ever receiving a Social Security check.

4. Congress can purchase their own retirement plan, just as all Americans do. 

See Step 9 above.

5.  Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

Step 37 - Base pay increases for Congressional members on an annual customer satisfaction rating, and repeal the current practice of automatically increasing Congressional pay without a vote.

Same idea but a slightly different with, the "Love My Country, Loathe My Government" taking a more aggressive stance on Congressional pay. In Step 37, there is no automatic pay raise of any type, Congressional members have to earn a raise.

Step 41 - Prohibit any Senator, President, or Congressman/woman, whose net worth, not income, is over $3 million from drawing a pay check during their term of office, for the good of the country. Not only does "Love My Country, Loathe My Government" want our Federal politicians to earn their raises under Step 37, it also forbids the many multimillionaires in office from even drawing a paycheck.

Those can afford to serve without being paid, e.g Massachusetts Senator John Kerry, should do so for the love of country, not for the salary that would be a very, very small piece of their overall wealth. With a $15 TRILLION national debt, the nation needs to conserve all the wealth it can.

6. Congress loses their current health care system and participates in the same health care system as the American people.

There is not explicit step in "Love My Country, Loathe My Government" that lines up exactly with this reformation step. However, Step 26 outlines a process for addressing and fixing the problem of our ever escalating high health care costs, something that Obama Care will utterly fail to do. A part of such a process would be to make sure that any solution from Step 26 also applies equally to Congressional members, past, present, and future the same way it will apply to ordinary American citizens.

7. Congress must equally abide by all laws they impose on the American people.

Step 45 - Hold the political class  accountable to the same laws, regulations, penalties, fines, and principles required by the rest of America as it applies to sex/race affirmative action quotas and behavior.

Since the personal profile of Congress currently, and for a long time, has consisted mostly of older white men, Congress is obviously out of sync with the sexual, and racial profile of the rest of the country. This is inconsistent with the goals and objectives of Federal affirmative action laws, laws that Congress passed but from which it exempted itself.

However, there are other laws that should also have been included in Step 45. Congressional members should also not be exempt from insider trading laws, an exemption that they use to trade on insider government information and to participate in corporate IPOs, opportunities that are not available to most regular Americans.

Congressional members should also not be exempt from whistleblower laws, an exemption that protects potential shady and criminal activities of politicians. The word "exemption" and Congressional members/political class should never appear in the same sentences in any matter including affirmative action, insider trading, whistleblower, etc.

8. All contracts with past and present Congressmen/women are void effective 1/1/12. The American people did not make this contract with Congressmen/women. Congressmen/women made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

All of the steps discussed above from "Love my Country, Loathe My Government" apply to this last reformation step. However, the Congressional Reformation Act of 2011 missed out on a few more important steps that are needed to finally get an effective, non-corrupt, and working political class and Congress:

Step 6 - Allow only individual citizens to contribute to political campaigns. This eliminates the contributions of PACs, unions, corporations, and lobbyists. The Bill of Rights guarantees freedom of speech for individual citizens, not groups of citizens.

Step 7 - Only allow individuals to contribute to Senate or Congressional candidates that represent them. For example, political contributions from Kansas citizens cannot be funneled/diverted to political activities in New Jersey.

Step 8 - Strengthen the FEC rules and penalties and staff the Commission with seasoned prosecutors, elected on a national basis, so that someone actually goes to jail once in a while for violating campaign finance laws.

Step 14 - Stop configuring Congressional districts to almost guarantee the reelection of incumbents, i.e. stop gerrymandering.

Step 34 - Hold Congressional committees and subcommittees accountable for their respective areas of responsibility and remove committee members from their committee posts if they do not meet minimal performance criteria.

Step 39 - Restrict all U.S.Senators to one six year term and House of representatives to one four year term or two two year terms.

The so-called "Congressional Reformation Act Of 2011" contains some good first steps. But additional steps, as listed above, from "Love My Country, Loathe my Government" are also needed to really take the "dys" out of dysfunctional. We cannot wait for the political class to reform Congress.

If our politicians wanted to reform the dysfunctional process, they would have done so already. Failure to do so on our part will make our nation's future a disaster, a disgrace, and an extreme disappointment to future generations.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Monday, December 26, 2011

Government Waste Book 2011 Has Been Published - Billions More Of Wasted Taxpayer Wealth

Just when you thought that the Federal government could not find any dumber ways to waste taxpayer money, Senator Tom Coburn publishes his annual "Wastebook" of government spending. As you go through the next few weeks paying your holiday bills, using money you probably worked hard to earn this past year just to celebrate a few holiday days with your family and friends, pause to recall that the Washington political class knows no shame when it comes to wasting those same earnings you worked so hard for.

The "Wastebook 2011" edition identified at least $6.5 billion of taxpayer waste which went towards what can only be described as idiotic expenditures. This equates out to about $60 for every American household, $60 that could have been spent on that family holiday meal, $60 that could have been spent on an extra gift for a loved one, $60 that could have been sent off to a worthy charity, etc. as opposed to the foolishness listed below.

And this edition of the "Wastebook" documents only a hundred or so wasteful government expenses. It is probably a pretty good assumption there are hundreds, if not thousands, more of the same types of Federal things and projects the government wastes money on. These additional projects would undoubtedly waste billions more of our tax payments.

Examples of wasteful spending highlighted in “Wastebook 2011” include:
  • $75,000 to promote awareness about the role Michigan plays in producing Christmas trees and poinsettias.
  • $15.3 million for one of the infamous Bridges to Nowhere in Alaska
  • $113,227 for video game preservation center in New York.
  • $550,000 for a documentary about how rock music contributed to the collapse of the Soviet Union.
  • $48,700 for 2nd annual Hawaii Chocolate Festival, to promote Hawaii’s chocolate industry.
  • $350,000 to support an International Art Exhibition in Venice, Italy.
  • $10 million for a remake of “Sesame Street” for Pakistan.
  • $35 million allocated for political party conventions in 2012.
  • $765,828 to subsidize “pancakes for yuppies” in the nation’s capital. In this case, the Federal government gave a private company three quarters of a million dollars to open up an IHOP restaurant in an economically disadvantaged neighborhood in D.C. which ended up being built in a very economically well off spot in D.C.
  • The Federal government sent an average of $120 million in retirement and disability payments to deceased former federal employees every year for at least the past five years.
  • $764,825 to study how college students use mobile devices for social networking.
  • In 2009, the U.S. Agency for International Development (USAID) undertook a four year, $90 million effort to spur hiring and sales among Pakistani businesses. Two years later, the USAID Inspector General found no measurable impact for the $90 million of U.S. taxpayer money.
I strongly suggest that all American taxpayers read the detailed report, assuming that they have the fortitude to stomach the wasteful spending. The full report can be read at

But this should not surprise us. Last week we showed how the Federal government loses more than half a TRILLION dollars a year in taxpayer wealth through fraud, waste, and mismanagement of the Medicare, Medicaid, Social Security, Unemployment Benefits, IRS and other programs.

We reported how just one rich family in the Seattle area bilked the American taxpayer for over $100,000 by falsifying government application forms even though the family lived in a multi million dollar home, drove an expensive car, and the father had a successful chiropractic business.

The website that supports the sale of our book, "Love My Country, Loathe My Government," ( has a website page that allows the site visitor to vote on whether four dozen or so past Federal government expenditures were worthwhile use of taxpayer money. Over the past two years, the majority of those wasteful projects have received 100% negative ratings, i.e. every site visitor who voted said these Federal programs were not worth the expense.

Of the remaining expenditures, all but one had negative ratings of at least 90%, i.e. more than nine out of ten of those who voted said the programs were not worthwhile. Only one Federal project had less than 90% negative ratings, it had an 87% negative rating.

That is why our three posts from last week, "Why Raising Taxes On Any American, Rich Or Poor, Is Still A Stupid Idea," are so important. As Coburn's report shows, no American of any economic status should pay a dime more in taxes until the political class stops wasting our money on failed programs in Pakistan, stupid academic studies to find out about useless social networking habits, etc.

We face some serious issues in this country including escalating health care costs, lack of a national energy strategy and program, failing public schools, a lost war on drugs, excessively high taxation, fraud, mismanagement, and waste in government programs, and high unemployment. All of the nation's available resources should be focused only on these large, global problems.

Once these problems are solved, we can go back and find out of rock music contributed to the fall of the Soviet Empire. Until then, no new taxes, no new wasteful spending.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Friday, December 23, 2011

Illinois Case Study, Why Raising Taxes On Any American, Rich Or Poor, Is Still A Stupid Idea - Part 3

Earlier this year, we reviewed the dire financial straits that the state government of Illinois was in. They had to stop paying some of their bills since their income from state taxes was not enough to rein in and cover the out-of-control state government spending and the liabilities the state's political class had created over the years. The prime example of how badly things had become, bullet suppliers to the state's law enforcement departments had stopped shipping bullets since they were not getting paid

A primary driver of their budget deficit is a state employee public pension liability of $80 billion. Unfortunately, the state political class has so mismanaged the financial aspects of the pension program that only about 51% of the $80 billion pension liability is funded. This is the lowest coverage of any state in the union.

To combat these budget shortfalls, in January, the Illinois state government  raised corporate taxes from 7.3% to 9.5%, a 30% increase, and increased the personal income tax rate from 3% to 5%, a 67% increase. The new state corporate tax rate gives the state the seventh highest corporate tax rate in the country.

However, the state government did not address the real root causes of their problems. It was not that they did not tax their state residents and businesses enough, the politicians were spending too much relative to their tax streams. We predicted at that time that this was not going to end well since both businesses and individuals had the option of moving to less taxing states.

And we were correct. According to recent news reports, at least six states are actively courting large businesses that are currently located in Illinois, trying to get these businesses to relocate their businesses and the related jobs to their states. As a result, these same businesses are using the out-of-state courting to pressure the Illinois state government for large tax breaks in return for them not leaving the state:
  • Motorola was offered $100 million in state tax breaks to keep its operations and 3,000 employees within Illinois.
  • The truck and engine company Navistar has already received $65 million to stay in Illinois.
  • Sears has threatened to move its 6.000 employees out of Illinois unless the tax incentives it currently enjoys, courtesy of the state government and residents, is renewed when they expire in 2012. The state of Ohio has already offered Sears a package of tax breaks worth $400 million if Sears was to relocate to that state.
  • CME Group, which operates the Chicago Mercantile Exchange, and CBOE, another financial trading company, are also asking for tax relief.
“Although the tax hikes are theoretically temporary — and start to expire in 2015 – both the rises and the continued failure of politicians to get to grips with the budget crisis are starting to worry businesses,” The Economist observes.

As expected and predicted, the raising taxes death spiral/endless loop has taken effect in the state:
  1. Raise taxes and companies move to other states, resulting in less revenue and continued budget deficits.
  2. Do not raise taxes, companies stay in state but you still have budget deficits.
  3. Raise taxes and then turn around and give the money back to businesses which still results in budget deficits.
In all of these scenarios, the state political class has placed additional burdens on residents to shoulder the increased financial burden of supporting the state government financial burden and the state politicians never addressed the real problem: governments and politicians spend too much. There is no other solution, raising taxes never had a chance of succeeding since Illinois companies have lower tax options.

The result is that hikes intended to raise revenue are becoming self-defeating — the state could be compelled to spend the additional tax revenue in order to convince companies to remain in the state. And the original problem still exists: the state government still has massive budget shortfalls because it did not understand and address the root problem, namely that the government spends and wastes too much.

This type of behavior should not be a surprise. Several years ago, the state government of Maryland raised taxes on those earning over a million dollars in their state in order to close a budget shortfall in their budget. However, within just a few years, the state government was receiving less from its million dollar earners than what it was receiving before it raised taxes on million dollar earners. The additional tax burden "encouraged"  the million dollar earners to move out of the state in order to retain more of their hard earned wealth, leaving Maryland's state government in worse shape than prior to them raising taxes.

So, through this series of posts we have proven it does not make sense to raise taxes to solve a government overspending and waste problem. Makes you wonder why our politicians continue to do so, both at the state level and the Federal level.

Thursday, December 22, 2011

The Constitution and Rule of Law - Merely Suggestions for The Obama Administration

One of my Facebook Friends recently posted an article from the Wall Street Journal on Facebook which reviewed how dangerous Newt Gingrich could be if elected President. The article reviewed some of his extreme views and opinions on how to fix the American legal system, fixes that would appear to eviscerate the Constitution and place much too much power in the hands of the executive branch of government. His intentions, as described in the article, would eliminate the best institutional protections of freedom and liberty in this country available to its citizens, the Constitution and the Bill of Rights.

Which got me to thinking that the current resident of the White House, President Obama, has not been very friendly to the Constitution and the rule of law either. In fact, if you review his short history as President, you see a disturbing trend of treating our rule of law doctrines and the Constitution as mere suggestions, to be used only when they do not interfere with his wishes and desires:

- His most blatant violation of the rule of law and the Constitution happened earlier this year when he committed U.S. military forces to the conflict in Libya without Congressional approval, likely in violation of the Constitution and the War Powers Act, both of which give Congress explicit power to control the war making actions of this country.

The extent of this violation was nicely summarized in an article by Jacob Sollum in the October, 2011 issue of Reason Magazine, "War Counsel - Obama Shops For Libya Advice That Lets Him Ignore The Law."  Remember, this conflict involved the U.S. military aircraft (over 3,500 sorties were flown by U.S. pilots) to bomb Libyan air defenses, U.S. drone aircraft firing missiles, providing intelligence and refueling services to other nation's participating in the conflict, and spending well over a billion dollars of taxpayers' money to participate in hostilities. There should be no doubt that Obama had engaged the United States in military "hostilities."

And that is exactly where the War Powers Act comes in. According to the article, this law requires that "a President who introduces U.S. armed forces into hostilities without a declaration of war must begin withdrawing those forces within 60 days unless Congress authorizes their deployment." The President was advised by the Justice Department's Office of Legal Counsel, his own Attorney General (Eric Holder), and Defense Department General Counsel (Jeh Johnson) that Obama needed to go get Congressional approval to continue the war effort.

Obama ignored the warnings of these experts and shopped around until he found a lawyer that agreed with him. He eventually found two, his own White House Counsel Robert Bauer and State Department legal advisor Harold Koh, both of whom maintained that our involvement in this Libyan conflict did not amount to "hostilities." Which is pretty laughable when you consider U.S. aircraft were bombing, U.S. military drones were firing missiles, and U.S. military support personnel were actively developing and providing intelligence to the hostilities in addition to refueling other nations' military weaponry. Apparently, it does not count as "war" in Obama's, Bauer's, and Koh's perverted reality unless the U.S. has physical military personnel on the ground in a war zone.

How absurd is this position and how illegal and anit-Constitutional is it? Consider some opinions that were highlighted in the article:
  • Harvard law professor, Jack Goldsmith, who once was the head of the Office Of Legal Counsel: "The administration's theory implies that the President can wage war with drones and all manner of offshore missiles without having to bother with the War Powers Resolution's time limits."
  • Republican Speaker of the House, John Boehner, and Democratic Senator Richard Durbin both stated that Obama's rationale for ignoring the War powers act failed the "straight face test," i.e. the rationale was so laughable that no one could possibly believe its legitimacy.
  • The New York Times, which supported this "war" effort, editorialized and agreed that the administration's actions were an "evasion of its legal duties."
  • In 2007, then Senator Barack Obama stated, relative to President Bush's Iraq war activities: "The law is not subject to the whims of stubborn rules," he condemned "unchecked Presidential power," and promised if that if he was elected, under his administration there would be "no ignoring the law when it is inconvenient."
All good reasons to reject Obama's laughable, shallow, flimsy, and illegal reasons for engaging U.S. military forces and taxpayer money in the Libyan conflict. This is not an indictment of whether our participation in that conflict was right. However, it is an indictment of this administration's blatant lack of respect for the Constitution and the rule of law that helps keep this country free.

But I guess following the law would have been "inconvenient" for President Obama, something he abhorred four short years ago.

- But this administration's lack of respect for law and Constitutional rules does not stop at the Libyan border. Consider the disaster known as Fast and Furious, the botched gun running sting operation that was run by Obama's Justice Department and its ATF organization.

Fast And Furious involved U.S. Federal law enforcement authorities allowing and actually facilitating the illegal sale of military grade weapons to buyers in the United States and then illegally allowing these weapons to cross the border into Mexico into the hands of the powerful Mexican drug cartels. The hope, as flimsy as it was, was to track these weapons and then apprehend drug cartel members for their possession of illegal firearms. Yes, the program was as stupid as it seems.

Unfortunately, the ATF could not track the weapons once they were over the border, defeating the whole purpose of the operation. Even worse, the weapons have been involved in the death of at least one U.S. Federal agent, have been involved in the shooting deaths of dozens of Mexican civilians and were found in the armory of a leading drug cartel kingpin when his facility was raided by Mexican authorities. A flawed program that has gone fatally wrong.

However, besides the stupidity and unneeded deaths caused by the program, consider the numerous violations of existing laws that this Obama administration program has caused. Allowing the illegal purchase of these weapons and the illegal transportation of them across the border violates any number of existing U.S. gun laws. Allowing the transportation of them across the border violates at least one, if not more, international treaties that our government has signed to restrict and prevent the inter-country transportation of illegal weapons.

I guess the rule of law does not apply to our own Justice Department in this case, the very organization that is supposed to be upholding these laws and treaties.

- Who can forget the blatant ignoring of the law in the Solyndra fiasco. As a quick review, recall that the Obama Energy Department approved a half a billion dollar loan to a solar panel manufacturer, Solyndra, even though respected people both inside and outside of government publicly doubted that this was a good financial decision.

Turns out these people correctly foresaw the bad situation since within two years after receiving the loan guarantee, the company declared bankruptcy and went out of business. The only hope that the American taxpayer had of recovering even a fraction of the half of billion dollars was to exercise its legal right to be first in line when the bankruptcy proceedings sold off the remaining Solyndra assets. That was a condition of the loan guarantee: in the event of a Solyndra default, the Federal government lawfully got first crack at recovering money.

However, Obama's Energy Department illegally moved the Kaiser Foundation, another Solyndra investor, ahead of the American taxpayer in the bankruptcy proceedings. This action was done without the knowledge of the Justice Department who is supposedly responsible for enforcing the laws of the land like this one. As a result of this leapfrog move, any assets and money from the sale of Solyndra assets were used up before it was the American taxpayers' turn to receive anything. However, the Kaiser Foundation did recover much of its investment.

Oh, and by the way, the Kaiser Foundation has strong family links to a gentleman called George Kaiser. George Kaiser has been a very important, successful and prolific fund raiser for Obama's past political campaigns. Thus, the obvious implication is that the President allowed a very explicit law to be ignored to the benefit of one of his political friends and to the loss of the American taxpayer.

- Democratic President Bill Clinton enacted the Defense Of Marriage Act (DOMA) in 1996. The law was passed with widespread support by both Republicans and Democrats. In a nutshell, the law legally codified the inane concept that marriage can consist only if it consists of one man married to one to one woman. It basically said that same sex marriages did not have the same rights as man and woman unions.

A stupid, discriminatory law. The Federal government, and both political parties, should never be in the business of telling certain types American citizens how to live their lives and passing laws that restrict how those Americans run their lives This should be a blanket principle whether it concerns race, sex, creed, religion or sexual orientation of any American.

However, given how foul this law is, it is still the law of the land. According to Constitution, the President is required to enforce ALL of the laws of the land. If he disagrees with a law, there are legal and Constitutional processes to go through to change a law. 

Which makes President Obama's decisions regarding DOMA another violation of the rule of law in this land. Earlier this year he unilaterally decided that his administration would no longer defend the law in court since the President did not agree with the tenets of the legislation. As a lawyer, he should understand that as President, he does not have the option and power to only selectively enforce laws he agrees with.

If he feels so strongly against this law, he should have moved to have it repealed long ago, possibly when his Democratic allies controlled both the House of Representatives and the Senate. It would have been quite easy to do so before he violated his Constitutional responsibilities when he alone decided he did not like the law.

I am sure that Obama would not like it if President Gingrich decided to selectively and unilaterally ignore the Roe Vs. Wade right to abortion legality. I am sure he would not like it if President Bachman selectively and illegally decided not to prosecute abortion clinic bombers. The President does not have the right and power to be selective when it comes to the enforcement of laws currently in effect. 

But as with Libya and the War Powers Act, this arrogance and dangerous flaunting of our Constitutional principles should not come as any surprise with this President.

- One of the truly basic foundations of our Constitution and our democracy is the phrase, "life, liberty, and the pursuit of happiness." In the face of this powerful concept of liberty, President Obama became the first President in our history to identify, name, and then assassinate an American citizen without the inconvenience of a trial to determine guilt.

Now, I am not saying the country is not better off and safer with the death of Anwar al-Awlaki, an American citizen living in Yemen and one of the most wanted terrorism leaders in the world. Earlier this year he was targeted and killed by Hellfire missiles launched from a remote controlled aircraft operated by the CIA. No trial, no grand jury, no presentation of evidence, just a remote controlled killing.

When the President's press secretary, Jay Carney, was asked to see what evidence the administration had on al-Awlaki regarding his terrorism activities, Carney responded: "I don't have anything for you on that." This is a very slippery slope relative to the Constitution.

If the President does not have, or deems not to share evidence of criminal activity, and wants us to only  trust that he knows best what American citizen to assassinate, that newly created power, power that does not exist anywhere in our code of law or the Constitution could be so easily abused. Just the potential for sanctioned government assassinations makes "life, liberty, and the pursuit of happiness," the Constitution, and over two centuries of U.S. law equity become hollow, empty promises.

- I have lost track but at last count Obama had appointed about three dozen "czars" within his administration. I am pretty sure that this President is the first one to create a shadow government that exists within the White House.

By setting up governing structures outside of the Constitution, Obama can bypass the checks and balances established in the Constitution. These protective checks and balances tasked Congress with the responsibility for reviewing and approving the appointment of government officials in important government positions. This process has worked relatively fine for well over two hundred years and has protected our democracy from concentrating political power too heavily in one part of our government structure or with one individual person.

The czar process undermines this entire Constitutional history and process. The executive branch has specific duties and responsibilities, Congress has specific duties and responsibilities, czars should have neither.

- An October 10, 2011 Wall Street Journal article entitled, "Secret Orders Target Email," reported on another government process that certainly comes close to undermining the Constitution. The article was primarily about how the U.S. government and its Justice Department had obtained a secret court order to force Google and another Internet provider to turn over email account information of a Wikileaks volunteer. As an American, one should be very suspicious when the words "government" and "secret" are in the same sentence.

Beyond this case of secret court orders, the article goes on to explain the unforeseen ramifications of the Electronic Communications Privacy Act which was passed by the political class in 1986. Although the law was designed to give the same privacy protections to electronic communications that were already in place for phone calls and regular mail, the way it was written apparently gives our politicians and our government the ability to monitor and obtain email communications, cell phone location records, and other digital documents without getting a search warrant or showing probable cause that a crime has already been committed.

Instead of the tradition "probable clause" criteria for obtain a search warrant, the law allows the government only has to show "reasonable grounds" that the digital records might be"relevant and material" to an investigation. Thus, today in America, it is easier for the government to prior into our electronic activities than it is for them to see our regular postal mail.

Also, under the 1986 law, these secret court orders are almost always sealed so an American being investigated by the government via a person's electronic activities may never find out the government was watching them.  This past August, U.S. District Court judge Nicholas Garaufis correctly described the law as "Orwellian." This should be a reminder that just because a law is legal does not make it Constitutional or conducive to freedom.

- And finally, an example of "I heard what you said but I don't care what the rule of law is" from the Obama administration, this time as it regards the Gulf oil spill. After the oil spill, the Obama administration place a drilling moratorium on new deep water oil drilling exploration in the Gulf. I am assuming it was to make sure the risk of another oil spill like the one from the BP oil rig did not occur.

However, after a while, oil companies and local politicians wanted the moratorium lifted in order to start drilling again and to expand business and employment. Court filings were issued and the judge in charge ruled that the moratorium, be lifted. The Obama administration seemingly complied with the ruling but promptly issued another moratorium, virtually identical to the first one.

The following excerpt from a February Bloomberg report summarizes the contempt Obama and his Justice Department had for our rule of law:

The Obama Administration acted in contempt by continuing its deepwater-drilling moratorium after the policy was struck down, a New Orleans judge ruled.

Interior Department regulators acted with “determined disregard” by lifting and reinstituting a series of policy changes that restricted offshore drilling, following the worst offshore oil spill in U.S. history, U.S. District Judge, Martin Feldman of New Orleans ruled yesterday.

“Each step the government took following the court’s imposition of a preliminary injunction showcases its defiance,” Feldman said in the ruling.

“Such dismissive conduct, viewed in tandem with the re-imposition of a second blanket and substantively identical moratorium, and in light of the national importance of this case, provide this court with clear and convincing evidence of the government’s contempt,” Feldman said.

Determined disregard, defiance, dismissive conduct, contempt. Good adjectives describing the Obama administration's attitude towards our Constitution and rule of law, not only in the Gulf but across many areas of freedom and liberty in this country.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Wednesday, December 21, 2011

Viva Las Vegas - A Solyndra-Like Transportation Disaster Waiting To Happen

Yesterday we reviewed the overwhelming evidence why President Obama's dream and fantasy of using hundreds of billions of taxpayer money to build out a nation wide high speed rail network is pure political class insanity. The primary reason why such a network is just plain stupid to invest in is because there already is a viable, low cost, effective, and most importantly, a private sector transportation alternative that uses no taxpayer wealth to transport and deliver people all over the country.

This alternative is the new bus economic models and companies that have grown profitably, significantly and without taxpayer help over the past few years. These bus companies very efficiently and inexpensively serve the many city pairs that the high speed rail line pipe dream would serve.

Fortunately, given the good sense of some politicians not to waste taxpayer money on such folly and the reality of a sour economy and reduced government tax revenue, many of these high speed rail plans have been derailed, saving untold billions of dollars of taxpayer wealth, at least temporarily. These new generation of bus companies will continue to serve millions and millions of Americans travelers in comfort, inexpensively, and now.

However, as we all know, once a bad political idea takes hold, it is sometimes difficult to rip it out by its roots. Such is the case with high speed rail. According to an article in the November 28, 2011 issue of Business Week magazine:

  • It takes a typical Los Angeles gambler about three  hours to drive from LA to Las Vegas.
  • A developer, who built some of Las Vegas' largest casinos, wants to build a rail link from LA to Vegas that will cut that travel time down to about 80 minutes and cost about $75 round trip.
  • The rail line would start in Victorville, California which is about 85 miles northeast of LA.
  • The developer's company has already put up more than $40 million of the $6.5 billion that is needed to actually build the high speed rail line.
  • Plans to build the rail line have been in the works for over a decade but so far, no track has been laid. However, all of the necessary environmental studies and regulatory reviews have been completed.
  • But as is often the case, this part of the private sector now wants the American taxpayer, via the Federal government, to provide a massive loan guarantee worth $4.9 billion to start the construction of the rail line.
  • This loan guarantee would have to be approved by the Federal Railroad Rehabilitation and Improvement Financing Program that is run by the Federal Railroad Administration which provides loans to and loan guarantees for building and maintaining railroads.
  • This Federal program has been around thirteen years and in total has loaned out or guaranteed loans worth a total of only $1.59 billion worth of taxpayer wealth. Thus, just this one program would be more than three times what this program has done in total over thirteen years.
  • This loan guarantee request is almost ten times what the Solyndra loan guarantee was for, another untested market concept that turned out to be a business, financial, and taxpayer disaster.
First of all, you start to understand why the Federal government is so far in debt if you have organizations such as the Railroad Rehabilitation and Improvement Financing Program and the Federal Railroad Administration. What do obscure government agencies like this do and are they really needed?

But the focus on this post is why do we think that this high speed rail link merits the risking of taxpayer money? The negatives and insanity of this proposal are many:
  • How many people do we really think are going to transport themselves to Victorville, a town that is 85 miles outside of Los Angeles just to get onto a high speed train line to get to Las Vegas?
  • Wouldn't simple logic tell you that most people would rather take the one to two hour trip to get to the station and use that time to go directly to Las Vegas where they would have the use and convenience of their own car?
  • If I do have to transport myself 85 miles to get the train, I am expending gas costs to drive to the station, I am likely paying for parking to leave my car at the California station while I travel to Las Vegas, and then on return, I have to pay for more gas to get home. While the ticket costs $75, a traveler on this rail line would have additional costs including the gas required to travel to and from the California station, parking at that station, and the cab fare needed to travel around Las Vegas while in town. How many people are willing to spend this much larger sum of money, and time inconvenience, just to get to Las Vegas?
  • If this is such a good idea for getting gamblers to Las Vegas, wouldn't those that benefit from getting gamblers to Las Vegas be more than willing to pay for the construction of this rail line? According to an article in the Las Vegas Examiner newspaper earlier this year, the top 23 casinos in Las Vegas, (not all casinos, just the largest 23) had $4.68 billion in revenue in 2010, almost the same amount that the developer wants the taxpayer to guarantee for the rail line. Why not make all Las Vegas casino operators finance the high speed rail line out of their billions of dollars in annual revenue?
  • If this is such a good idea and the casinos funded the construction, there would still be thousands and thousands of jobs created for the state of Nevada, the main reason why our old friend Senator Harry Reid wants the government loan guarantee approved. But if this was done with casino money, the same jobs would be created and taxpayer money would not be at risk.
  • Before any tax payer money is put at risk on this folly, it would be very interesting to see what politicians received what types of campaign donation support and contributions from what casino interests.
  • Do we really think that this small government agency is able and competent enough to handle a loan program like this that is three times what its entire thirteen year historical loan portfolio is?
  • If this is such a great transportation opportunity, why wouldn't the new generation of bus companies like Megabus, which we reviewed yesterday, not be a far better option, especially since it would not use taxpayer wealth? Megabus and other bus companies would pick people up at LA curbside locations and not require a Las Vegas visitor to travel 85 miles to get to a train.
  • Wouldn't the $6.5 billion be far better spent building out the local LA mass transit system which would serve many more people every working day?
But beyond these logic reasons why this is another Solyndra failure waiting to happen. Do some simple math and then ask yourself why this makes sense to risk taxpayer  money:

  1. Construction Cost of Project - $6.5 billion (assuming no cost overrruns, a very weak assumption, given the political class historical track record)
  2. Assume a forty year life before major renovations have to be done.
  3. Average annual construction cost spread out over 40 years = $162.5 million a year.
  4. Assume that for every $75 ticket sold, the operator of this line makes $20 in profit after paying for utilities, salaries, and other expenses.
  5. Number of riders a year needed to cover the annual $162.5 million construction costs = 8.125 million riders a year
  6. Number of riders a day needed to cover the annual $162. 5 million construction costs = 22,260 daily riders.
  7. Estimated daily visitors to Las Vegas from all over the world - about 100,000 a day.

Do we really think that 22,000 or so people, just from the greater LA area, are going to travel 85 miles to  a town outside of the LA city limits to get on a train to go gamble in Las Vegas EVERY DAY? Do we really think that this train will eventually account for over 20% of the total number of visitors that come into Las Vegas EVERY DAY?

Do we really think that the road infrastructure around Victorville, California can handle the additional cars needed to transport 22,000 people to the train station every day? I doubt it, and if the roads to Victorville cannot handle it, there would be additional costs of building out infrastructure, roads and possibly parking, to handle the traffic.

And that 22,000 daily usage estimate is for just a breakeven scenario. It assumes that there are no cost overruns and the per ticket profit is a generous $20 or a 27% profit margin per ticket. It assumes there are no additional engineering or environmental studies needed.

Just like Solyndra, the warning signs of impending disaster are all there. Unfortunately, the taxpayer risk on this folly is ten times as worse. Viva Las Vegas but let Las Vegas pay for this rail travesty itself.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available, at It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respectfreedom for both yourselves and others everyday.

Please visit the following sites for freedom: