Economic Policy - Why Truman Got It Right And Obama Got It So Terribly Wrong

If you get past the fancy speeches and the rhetoric of this administration and look at the reality of the economic numbers, there is no doubt that this administration is the worst economic policy and management administration in a long, long time:

• 42 consecutive months of unemployment over 8%, a Presidential record.
• Unemployment and under employment results approaching 15%.
• Weekly first time unemployment benefit applicants averaging about 360,000 for what seems like forever.
• High levels of tax and Washington policy uncertainty which limits economic expansion.
• An idiotic health care reform legislation which introduces unheard of uncertainty into the private sector which limits economic expansion.
• Crony capitalism taken to unheard of levels which has wasted billions and billions of tax dollars (e.g. Solyndra, Fisker Motors, Telsa Motors, General Motors, ENER1, A123,  Beacon, Spectra, EverGreen, Ecotality, and many others), distorted the market, and provided no viable economic or consumer benefit, just economic benefit to political cronies and incumbent politicians.
• Four years of annual TRILLION dollar plus deficits, adding five TRILLION dollars to the national debt while every President before this one added only $10 TRILLION in total.
• Record high numbers of Americans on food stamps and unemployment benefits for record lengths of time.
• Ever escalating trade deficits with the rest of the world.
• Gasoline prices that have doubled in less than four years, straining business and household budgets.
• Overall national economic growth has set records for how weak it is relative to the historical recoveries after every other recession.
• Average household income has dropped about 8% or just over $4,000 since 2009.
• Consumer and business confidence and outlooks at low levels for a long time.
• These tremendous economic failings were accomplished despite spending over $800 billion on a failed economic stimulus program, despite having the Fed inject TRILLIONS of dollars into the financial system and banking system, and despite record low interest rates for a record length of time.
• A President who had all of the power he wanted or could of dreamed of having in his first two years in office relative to his party controlling Congress and his own sky high approval ratings but who insists on blaming everyone and everything else for these economic failings.

A pathetic performance relative to history, reality, and what could have happened. In fact, what could have happened actually did happen over sixty years ago. Harry Truman took the country from a war footing to a peace time growth economy despite challenges that would have overwhelmed lesser men and most politicans in office today.

The following post from a little way ago in this blog shows how Truman actually understood economics and the free market vs. the ignorance that this Presidential administration has displayed over the past three and a half years. The bottom line is that the Truman administration was successful in managing a difficult economy, essentially by trusting our heritage of freedom and minimal government intrusion. The Obama administration has been a utter failure for doing just the opposite.

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Wednesday, March 7, 2012


Why Obama's Economic Policies Are Dead Wrong - A Real life Example In Pictures


We have talked about the many economic failures, in both strategy and execution, of the Obama administration over the past few years. These failures have resulted in heated and divisive class warfare rhetoric, skyrocketing national debt, high unemployment and underemployment, and abominable failures of economic programs:
 
•Failed economic programs and projects - these include, but are not limited to, Cash For Clunkers, Cash For Caulkers, Cash For Appliances, bank and auto company bailouts, the $800 billion stimulus program, Solyndra, and a number of other failed alternative energy programs.

•Regarding the massive and failed economic stimulus package, this administration claimed that unless it was passed immediately, the unemployment rate in this country could get as high as 8%. The package was passed and employment soared about 25% higher than 8%.

•Divisive class warfare - Obama constantly harps on the need to tax the wealthy in this country even more, blaming them for the skyrocketing annual trillion dollar deficits this administration has incurred. However, we have easily proven that even if you tax these Americans' earnings at 100% or confiscate all of their assets, it will have very little impact on the economic conditions in this country, quite possibly making them even worse while dividing the country along economic lines.

•Under the Obama administration, the recovery in unemployment and under employment after the last recession has been among the most anemic in the economic history of the United States.

•In the wake of of failed economic programs, divisive class warfare, and stubbornly high unemployment, the Obama administration has proceeded to run up the national debt much faster and much more dramatically, with little in return, than any President in the history of the United States.

All very good reasons to conclude that this administration has no clue when it comes to economics. Which is a shame since if you look back in our history, you will find a classic example of how to manage and grow an economy out of a crisis mode with favorable results across all major economic indices.

The example comes from the 1940s, when Harry Truman was President, certainly a time of major crisis where the United States and the rest of the world were involved in World War II fighting. Economies and lives were turned upside down as the country went into a war footing for the first half of the decade and then needed to convert back to a peace time economy in the second half of the decade.

Consider the following graph (you can double click on this and the following graphs to get a larger, more detailed view):

   This is a graph of the size of the Federal government's annual spending volumes in the 1940s and 1950s. As you see, spending had to ramp up in the early 1940s to accommodate the massive war spending the Federal government needed to do to defeat the Axis powers.

However, look what happens when the war ends in 1945 (after the vertical line). Very quickly, Federal government spending drops dramatically (about 60%) as the government terminates its war spending. I do not believe in the history of the country have we seen such a dramatic and speedy reduction in Federal government spending.

If Obama was President in 1945, I doubt this would happen. Today, he and his political supporters refuse to seriously consider reducing government spending, insinuating that it would push the economy back into a recession. They have this misconception that unnecessary and wasteful government spending is necessary to keep the economy going. [Note: recall that our extensive analysis in this blog's past posts has shown that at least $500 billion in Federal spending a year is lost to waste and criminal fraud in government operations such as Social Security, Medicare, etc.]

What happened to the economy in the late 1940s when the Federal government made such drastic reductions in government spending? According to Obama's economic strategy, that would have had catastrophic effects on the economy.

Let's first look at the unemployment rate:

Yes, at the same time that the Federal government dramatically reduced spending, the unemployment rate did kick up a bit. This would seem to add some credence to Obama's theory that government spending needs to stay high and wasteful to keep the economy strong and growing.

In fact, there were some leading economists of the time that urged Truman to keep the war factories humming via government spending, making munitions and weapons for no purpose, just to create busy but useless work for people. This activity would create no viable economic progress since the output of the munitions and weapons factories would never be used, the war was over, but these economists, like Obama today, had this misconception that spending and wasting government money for no reason was good economic policy.

But consider a few facts from the above chart:

•Although unemployment did rise at the end of the war, it did not get above 4% for the immediate years after World War II and probably averaged 4-5% over the ten years after the end of the war, despite an initial, massive slashing of Federal spending.

•In 1945, the U.S. population was only about 139 million and at least 10% of that population was coming back into the civilian workforce after serving in the armed forces. Thus, the economy was able to absorb a very large number of new workers in the face of slashed government spending with an unemployment rate of less 5%, an extraordinary accomplishment.

Was this wonder of employment gains immediately after the war a result of massive government spending? Obama says we cannot reduce spending and have to run up horrendous deficits in order to keep the economy out of a recession. See what happened to deficits in the 1940s:

After the massive deficit spending during the early part of the 1940s that was needed to finance the war effort, Truman's Presidency not only slashed government spending, and the taxes that went with it, Truman also managed to very quickly go from a deficit riddled Federal government to a Federal government that was generally in balance, revenue about equal to spending, actually running a budget surplus in some years.

So far, Truman was able to succeed doing the exact opposite of what Obama is doing: dramatically reducing government spending and taxes, running a balanced Federal budget, and absorbing millions and millions of workers into the civilian part of the economy with minimal increase in unemployment.

One final view: did all of these efforts and results negatively impact the economy health of the country? Consider this last graph:

  This GDP graph is over time, during and after World War II. As you can see, there is a little flatness in economic growth in 1946 as the nation adjusts back to a peace time economy but very shortly begins a strong growth pattern into the 1950s. Thus, dramatically slashing and reducing government spending did not negatively impact the growth and size of the nation's economy. In other words, we do not need a giant Federal government bureaucracy to have a healthy and growing economy.

So let's review:

1.Truman slashed taxes and government spending after the war ended, Obama wants to continue to raise taxes and government spending.

2.Truman ran a balanced Federal government budget after the war ended, with some budget surplus years, Obama runs massive Federal government deficits.

3.Truman's economic policies absorbed well over ten million workers into the economy that was much smaller in a nation with far fewer people, Obama's economic policies have resulted in long term unemployment and under employment for well over ten million workers.

4.Truman's economic policies resulted in strong overall national economic growth, Obama's economic polices have resulted in weak overall economic growth.

5.And most importantly, Truman's economic polices severely reduced the role of government in our lives and economic well being, Obama's policies have dramatically increased the Federal government's involvement in our lives and economic well being, resulting in lost freedom and liberty.

Unfortunately, the Obama administration and his supporters have not looked at this simple pictorial representation of a real life economic success story. It continues to cling to the false hope and faulty economic assumption that government has to be the center of economic activity and growth in this country, an assumption that is becoming increasingly viewed as wrong when you consider our anemic economic growth, failed economic polices of this administration, and long term chronic unemployment.

An old saying goes as follows: "When you are in a hole, stop digging." Obama needs to stop digging with his failed economic policies, programs, and strategies and borrow a ladder from Truman to get us out of our ever widening, ever deepening economic hole. Just look at the pictures.

On final note: as an FYI, all of the underlying data that went into the above graphs comes from official U.S. government sources. At no point were Republican Party, Tea Party, Fox News, or any other data sources used.

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

httpwww.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

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 www.loathemygovernment.com. 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:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/

Forget Obama, Forget Romney, We Have the Long Term Solutions To Our Economic Malaise

This post was originally posted in early June of this year. It provides a series of strategic, simple-to-understand and much needed steps that must be taken to fix our economy for the long haul. Unlike Obama and Romney's economic plans which have virtually no chance of being successful, our plan can fix what ails us. The reasons for our confidence include the following facts of life:

1. We are not beholden to any political constituencies like the big banks. These constituencies in the past were always able to water down or render toothless past needed reform by constantly contributing to polticians' reelection campaigns of both Democrats and Republicans.
2. We understand that solutions to our economic woes goes beyond vague and ineffective grand strategies like Obama and Romney propose. We need some leadership in Washington that will dig into the nitty-gritty of government functions and organizations and making them leaner, more efficient, and better values for our tax dollars.
3. The first starting point would be to dig into the inner workings of the IRS to find out why it is incapable of collecting more than $380 billion a year in tax evader taxes.
4. We understand that you cannot fix our economic future without fixing housing and you cannot fix housing without fixing, or preferably, terminating both Fannie Mae and Freddie Mac, enabling the housing market to return to the simpler times of financially sound banks lending home mortgage money to financially sound customers with minimal incompetent intervention by the political class.
5. With no desire or chance of a future in Washington politics, our solutions can ignore the trappings of our elitist political class to point out ways to reduce government spending with minimal impact on most Americans, a first step to getting our destructive national debt under control.

Obama has proven over the past three and a half years that he is utterly clueless when it comes to fixing our economy, both in the short term and in the long term. While Romney/Ryan have not proven they cannot fix the economy, as government and political class insiders, their ability to do the heavy lifting of upsetting the Washington apple cart of economic inertia and doing the heavy lifting is doubtful.

Only those solutions that look after the good of the nation rather than the good of a personal political career, a political class party, or political class moneyed interests can fix the American economy. That is what our proposed solution do below, without bending to the will of politicians.

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Thursday, June 7, 2012

Solving Our Economic Malaise - Long Term Solutions

Last Thursday through earlier this week, we plowed through the mountain of bad economic trends, statistics, and expert opinions that more or less prove that we and the rest of the world are headed for some horrible economic times. From skyrocketing national debt, the impending collapse of the Euro, stubbornly high unemployment, political deadlock and incompetence, and more, almost all of the signs are not positive.

However, there are a number of steps that could be taken to avert what could be the second half of the so-called Great Recession. These steps are not something the political class has done before, which is a good thing. If these actions had been done before and we were still in the same deteriorating condition, we would really be in trouble.

Yesterday, we reviewed the short term solutions to our economic malaise that need to be taken as soon as possible. Those solutions went on so long that we postponed the complimentary long term solutions that need to start being executed now. These long term solutions are listed below:

- Let's start with the repeal of the Dodd-Frank financial industry reform legislation that the political class passed, another 2,000 page monstrosity that has introduced a gigantic piece of uncertainty into the marketplace and business owners' minds, much like Obama Care has done. And as we all know, the more uncertainty there is, the less likely businesses are going to gamble on expanding and hiring more employees.

There are any number of excellent reasons for repealing this piece of trash besides the massive amount of new uncertainty it created:

1) The law was supposed to identify large and likely failing companies in the financial industry long before they failed so that proper government intervention could occur to ensure the disruption to financial markets and customers was minimized. After the legislation was passed, MF Global, a major financial investment company, suddenly went bankrupt without any warning, possibly taking over a billion dollars worth of customer wealth with it.

It is quite possible that the billion dollars was lost due to criminal activity. The bankruptcy is currently the eight largest corporate bankruptcy in the history of the country, certainly qualifying it for being under the watch and control of the Dodd-Frank legislation. Unfortunately, the legislation failed miserably to provide the hyped early warning signal to intervene.

2) Several weeks ago, JP Morgan quickly lost $2 billion in the market by making some bad investment calls. Dodd-Frank was supposed to curtail this kind of reckless investment style since similar moves helped lead to the bank bailout fiasco in the midst of the Great Recession. If Dodd-Frank had worked as it was supposed to, some sort of warning bells should have gone off before the bank lost $2 billion almost overnight.

3) Many times in this blog we have proven that the main culprits behind the Great Recession, the organizations that established the groundwork and led the charge into a financial disaster, was Fannie Mae and Freddie Mac, the Federal government's main mortgage entities:

http://www.loathemygovernment.blogspot.com/2012/05/who-really-caused-great-recession-part.html

 Since: A) Dodd-Frank was supposed to ensure another Great Recession never occurred and B) Fannie and Freddie basically caused the Great recession but C) Dodd-Frank did not nothing to change or regulate Freddie and Fannie, what purpose does the legislation serve if it does not address the root causes of its supposed purpose?

So let's review:

•Dodd-Frank did not foresee the implosion of MF Global, something it was supposed to recognize and mitigate.

•Dodd-Frank did not foresee the types of quick and large billion dollar investment losses that JP Morgan recently incurred, something it was supposed to recognize and mitigate.

•Dodd-Frank did not address the root cause of the Great Recession, Fannie and Freddie, so what purpose does it serve if is missed the main drivers of the problem it is supposed to mitigate?

•Dodd-Frank has introduced much more uncertainty into the marketplace, further delaying business expansion and hiring.

•Dodd-Frank called for the implementation of the so-called Volcker Rule that is supposed to guide banks on the amount of capital they need to keep on hand to prevent future financial collapses. Although the rule is supposed to go into effect in July, it appears that the government bureaucracy has not yet written the guidelines for implementing the Volcker Rule and, even worse, according to most news reports, the Federal bureaucracy has no idea how to write the Volcker guidelines. Talk about uncertainty.

Given all of its failures, how much worse off could we be if we just canned the whole effort and let the banks hang themselves out to dry and whither, if need be, from their own bad financial plays/bets and allow businesses to become more comfortable with a reduction in the uncertainty caused by Dodd-Frank?

- Repealing Dodd-Frank cannot be done in a vacuum. A companion action is needed is to finally clean up the whole banking industry the right way, the simple way. That means we need to finally get to a stage where "too big to fail" actually becomes an ancient concept, not a continuing saga.

We have already reported on a recent article in The Week magazine where it was estimated that the largest five banks in this country control about 56% of the banking industry, making them still "too big to fail." Nothing that the political class has done since the Great Recession has mitigated the reason that politicians say the Great Recession occurred, some banks were too big to fail without crashing the whole financial system. Just another Dodd-Frank failure.

But it gets even worse. An article in the May 21, 2012 issue of Business Week, showed how much the big banks control the derivative market in this country, a dangerous type of investment that can lead to high risk and high reward investing behavior:

JP Morgan - 29.5%
Citibank - 21.9%
Bank Of America - 21.0%
Goldman Sachs - 18.6%
Sum of the Above Four Major Banks - 90.4%
Next Ten Banks - 5%
Next 1,604 Banks - 4.6%

Obviously, the big banks are even bigger when it comes to high risk derivative investing.

I am not a financial guru or investment expert. But it seems to me that today's banks do three major things:

1.Make consumer and business loans.

2.Underwrite company stock offerings and IPOs.

3.Manage investment portfolios, somewhat like hedge fund operators do, in a whole host of different and sometimes exotic and risky financial vehicles.

It is my layman's understanding that long ago a law called Glass Steagal, named after its Congressional sponsors back in the Depression, was enacted which placed a firewall between investment and deposit banks, i.e. the politicians of the time wanted to keep the traditional functions of banks, making loans, protected and separate from the speculative part of some banks, dealing with high risk investments.

Specifically, three parts of Glass Steagal addressed this desire to separate:

•Section 20 prohibited any member bank of the Federal Reserve System (whether a state chartered or national bank) from being affiliated with a company that “engaged principally” in “the issue, flotation, underwriting, public sale, or distribution” of securities.

•Section 21 prohibited any company or person from taking deposits if it was in the business of “issuing, underwriting, selling, or distributing” securities.
•Section 32 prohibited any Federal Reserve System member bank from having any officer or director in common with a company “engaged primarily” in the business of “purchasing, selling, or negotiating” securities, unless the Federal Reserve Board granted an exemption.

The modern day political class under the Clinton administration tore down these firewalls and restrictions, leading to the massive, bloated, and dangerous "too big to fail" banks we have today.

Thus, rather than trying to control these Hydras' tentacles, why do we just put Glass Steagal back in place? Under this approach, a financial institution could either be a bank (i.e. make business and consumer loans and maybe do some underwriting) or be a hedge fund/investment house (i.e. do some underwriting and invest the house's money in derivatives and other exotic vehicles), they could not be both.

Under this scenario, Dodd-Frank and its 2,000 pages of uncertainty and bureaucracy go away. The big banks would have to choose what they want to be, banks in the traditional sense or investment operations, and divest themselves of everything else. This breaks up the big banks into smaller chunks, finally blowing away the too big to fail problem. A simple solution vs. Dodd-Frank which was very complicated non-solution.

- Longer term, the tax code has to be revised, simplified and substantially cut down to something that is manageable. We have previously talked in this blog how the U.S. tax code:

•Is about 70,000 pages long and not remotely understandable by most Americans.

•Is so convoluted, a Wall Street Journal article, that was summarized in the April 29, 2011 issue of The Week magazine, estimated that U.S. taxpayers expend about $431 billion a year just to comply with the complexity of the U.S. tax code. This money could be so much better spent on productive expansion of the economy and employment rather than tax paperwork.

•Is so intense that an online article from U.S. News and World Report in April, 2010 reported that:

*Americans spend about 7.6 billion hours a year just preparing
their tax returns.

*This is the equivalent of placing 3.8 million Americans into full
time jobs.

*This is six times larger than the auto making industry in this
country.

*The original Federal tax code from 1913 was 400 pages long, making it about 6% the size of what we deal with today.
•Is so fraud friendly that according to a Business Week article from its Insider report for Spring, 2011, there is a $385 billion gap between what U.S. taxpayers are supposed to pay in Federal taxes and what they actually pay.

•Is so unfair that the effective tax rate on Apple, a traditional American company, is just 9.8% but the effective tax rate for Walmart, a traditional American company, is 24%, according to an article in the May 11, 2012 issue of The Week magazine.

Okay, you get the idea. Our current tax code is expensive, wasteful inefficient, unfair, and takes hundreds of billions of dollars and billions of hours out of the economy, dollars and hours that would go a long way to fixing what ails our economy and nation.

We have already done the heavy analysis work for the political class to simplify our burdensome tax code. That work can be found at:

 http://loathemygovernment.blogspot.com/2012/02/united-states-of-purple-fixing-our.html.

It reduces the 70,000 pages of current tax code down to a few dozen principles of fairness and ease.

- While all of the above is going on, the Federal government needs to go through a thorough spring cleaning, as suggested by Step 1 of "Love My Country, Loathe My Government." Step 1 would reduce spending in EVERY Federal government entity by 10% a year for five years.

This is the rate of annual shrinkage that the Federal government would have to attain just to get to about a balanced budget. At that point, we would have to start paying down the skyrocketing national debt that is rapidly approaching $16 TRILLION.

That 10% a year could be attained any number of ways:

•Reduce the amount of budget dollars lost every year to fraud in the big government social programs such as Medicaid, Medicare, and Social Security. These three programs alone lose over $200 billion a year of taxpayer wealth to fraud and waste.

•Terminate non-essential government programs that have outgrown their usefulness. The government has never had a good spring cleaning. For example, several years ago, headlines were made when the Federal government finally decided to shut down a World War I program that had existed for decades after the war ended. During the war, the government was worried that we would run out of helium gas for our military's dirigible balloons and passed a law that ensured that the U.S. military maintained a back up supply of helium for these balloons, long after that need became extinct.

As another example, a Christopher Columbus-focused government agency which was temporarily created in the early 1990s to celebrate the five hundred year anniversary of Columbus discovering the new world was still being funded, more than fifteen years after it was supposed to be terminated. Spring cleaning time.

•Implement Step 44 from "Love My Country, Loathe My Government," a step that would prohibit the spending of Federal tax dollars on any project or program unless it substantially impacted the lives of a significant number of Americans in at least five states. No more local earmarks and wasteful Federal spending to build a local bike trail, build a local farmers' market, renovate a local theater, etc. Federal money for national projects, local and state money for local and state projects.

•Freeze hiring at all Federal organizations.

•Consolidate redundant Federal agencies and functions, trimming headcount and overhead in the process. According to a recent General Accounting Office Study, the Federal government has 15 different agencies overseeing food safety laws, more than 20 different programs to help the homeless, 80 programs for economic development spread across 4 different Federal agencies, 82 Federal programs to improve teacher quality spread across 10 different Federal agencies, 80 programs to help disadvantaged Americans with their transportation needs, 47 programs addressing job training and employment, 56 programs to help Americans understand finances, 20 programs that support business incubator, 19 different programs that support tourism, 18 programs, which spend a combined $62.5 billion a year, to address food and nutrition aid, 100 different programs across five divisions within the Transportation Department that all fund efforts for highways, rail projects, and safety programs, and there ware 130,000 government military medical professionals, 59 Defense Department hospitals, and hundreds of military medical clinics that could benefit from consolidating their overhead functions and expenses.

- A coherent and detailed approach must be taken to reduce the amount of unnecessary regulation that the Federal government and political class imposes on American businesses, increasing their cost, both time and money, reducing their competitiveness with the rest of the world, and mostly serving no purpose.

A similar target would also be imposed in this area: the number of Federal regulations would be reduced by 10% a year for five years, eliminating all redundant and unnecessary regulations, focusing only on those regulations that concern themselves with necessary citizen safety and necessary, not excessive, environmental protection.

Imagine how much freer and more vibrant the economy would be if we reduced wasteful government spending, streamlined unnecessary regulations, simplified the tax code, dumped the Dodd-Frank monstrosity in favor of a simple solution to the banking problem along the lines of Glass Steagall which seemed to work pretty well for many decades, and got the Federal budget and national debt under control.

These longer term steps, in conjunction with the short term acts we went through yesterday, are the only way to get the economy out of the ditch. Everything that the Obama administration and the political class in general has tried has failed, as witnessed by the dire economic circumstances we reviewed last week and earlier this week.

Doing more of the same, like Obama wants to do, is a continuing recipe for failure and reminds me of an old saying: "When you are stuck in a hole, stop digging." We are definitely in a hole so let's stop digging and start using the steps we have outlined to actually get out of the hole we find ourselves and our economy in.

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Solving our economic problems are not hard as long as 1) you understand the root causes of these economic problems, 2) you tailor your solutions to the root causes identified in the first step, and 3) do not allow politics and selfishness to influence the real solutions. Neither Obama nor Romney have proven they understand any of these three steps.

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

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 www.loathemygovernment.com. 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:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/

Retro 26 - "We Have Less and Less Say About The Shape Of Events Which Shape Our Future"

The following post was originally posted about a year and a half ago. However, all of a sudden, it has rocketed up our tracking processes to become the most popular post over the past month or so. I really do not know why but can hypothesize why it has found a new popularity: as we get further and further into this vicious, never ending, lie-infested political cycle, we realize that as people who are supposedly living in a free country, we have less and less control over our personal destinies.

Corporate, union, PAC, and lobbyist money overwhelms our political processes. Those in positions of power turn out to not be leaders but simply greedy, selfish, small individuals who happened into politics as a career rather than a calling. Adulterers, liars, incompetents, and non-problem solvers seem to be their profile rather than integrity, leaders, and problem solvers. In the entire process, we are treated not as individuals, appreciated for our diversity, but merely voters to be cajoled or destroyed, depending on our political ideas and positions.

As a result, we seem to have less and less say about our futures and our destinies, as we reviewed about 18 months ago.

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Monday, February 14, 2011

"We Have Less and Less Say About the Shape Of Events Which Shape Our Future."

The title of this post comes from a longer quote that reads as follows:

"Every year, whether the Republican or Democratic Party is in office, more and more power drains away from the individual to feed vast reservoirs in far off places; and we have less and less say about the shape of events which shape our future."

Fascinating observation and how appropriate for life in America today. Many of us have an uneasy, gnawing feeling that we are no longer the land of the free, free to do as we please and to shape our future and the future of our families as we see fit. For a nation built on the principles of freedom, liberty, and personal responsibility, this is not a healthy condition.

Many times we have pointed out the numbing fact that American government, at all levels, confiscates over 40% of our earnings every year through taxes and fees, a confiscation level that:

1.Restricts our ability to seek out and pay for the best education for our kids.

2.Restricts our ability to expand or start our own business.

3.Restricts our ability to contribute to our favorite charities.

4.Restricts our ability to live and work where we would like.

5.Restricts our ability to spend our hard earned wealth any way we would like.

6.Restricts our freedom to live our lives as we see fit, not as some politician sees fit.

You cannot have personal freedom without economic freedom. Any type of restriction is a hit to our freedom and by taking so much or our spending power in the form of taxes and fees, liberty is restricted to unheard of levels. And what do we get for these restrictions, what "vast reservoirs in faraway places" are the beneficiaries of our restricted freedom? These reservoirs are now deep, diverse, wide spread, and largely ineffective:

•Why do we still spend billions of dollars a year to garrison tens of thousands of U.S. troops in Europe, over twenty years since the Iron Curtain fell?

•Why do we still spend billions of dollars a year to garrison tens of thousands of U.S. troops in Japan, sixty six years after Japan surrendered in World War II and who has been a solid democratic country, a friendly ally, with a strong economy for decades?

•Why do we still spend billions of dollars a year to garrison tens of thousands of U.S. troops in South Korea, a country with one of the strongest economies in the world and which requires mandatory military duty, thus, having more than enough assets to protect itself from North Korea?

•Why do we still spend billions of dollars a year to garrison troops in Iraq, especially since our current President promised, but failed, during his campaign to wind down our military presence in that country?

•Why do we still give away billions of dollars every year to the agriculture industry in this country, the vast majority of which does not go to "family farmers" but ends up in the coffers of the major agricultural corporations, most of which are now enjoying recording breaking profits as world wide demand for American food products increases?

•Why did we spend billions of dollars to bailout auto companies and financial institutions whose sloppy, stupid, short sighted management was punished by the market forces and who deserved the same fate as ill performing companies received in the past: termination.

•Why do we continue to spend billions of dollars a year for various "corporate welfare" political cronyism initiatives, initiatives that are little more than a re-election campaign donation source for incumbent politicians?

•Why do we continue to spend billions of dollars a year for a mammoth government bureaucracy that is redundant, wasteful, inefficient, and largely ineffective?

•Why have we allowed so much of our wealth and freedom to migrate to far away Washington D.C., a metro area that is now home to seven of the wealthiest counties in the country?

•Why do we continue to spend billions of dollars a year to support dictatorial regimes in faraway places who are faithful to us for as long as we pay for their loyalty, at the expense of freedom and liberty within their own borders?

Why, why, why? In total, the average American receives absolutely no benefit from sending their wealth to "feed vast reservoirs in far off places," whether these places are in the Far East, the Middle East, Europe, corporate and union boardrooms, or wherever. The only Americans who benefit are the politicians that control how and how much these reservoirs receive, usually in return for some help in funding their perpetual re-election campaigns.

Thus, our freedom gets a double hit when you think about it. By using our tax dollars to feed these reservoirs, we are less able to live our lives as we see fit to to our reduced economic independence.

Second, we are usually stuck with the same, non-performing politicians since they always have a head start on campaign funding, given their reciprocal arrangements with unions, auto companies, financial institutions, agricultural corporations, etc.: they pay out taxpayer money via budget processes and earmarks to the reservoirs and the reservoir recipients are more than willing, as proven by campaign fund raising tracking, to return the favor in the form of campaign donations. This reduces our freedom of choice when it comes to our elected representatives.

That is why the fifty steps to freedom outlined in "Love My Country, Loathe My Government" are so important if we are to drain these vast reservoirs of waste and start to shape events so that we can shape our own futures as we see fit, not as the political class sees fit. This is totally consistent with the insights embedded in the above quote.

By the way, who actually penned the quote above? Was it a member of the Tea Party who realized that government was draining our wealth and our liberty at the same time? Was it a contemporary journalist who recognized what is happening in this country today? Was it a courageous and current politician who understands first hand how wasteful government is today? No, the quote actually comes from William F. Buckley, Jr., and appeared in the November 21, 2010 issue of the Washington Post, but was written ALMOST FIFTY YEARS AGO.

Even back then, the political class and the government it runs was already creating vast reservoirs and diverting our wealth and freedom to those reservoirs. Let us hope that their fifty year head start can still be overcome. If the Egyptian people, with no tradition or history of freedom, can overcome thirty years of oppression where their freedom was diverted into a vast reservoirs of a secret police state, I am sure that with our over two hundred year tradition of freedom we can eliminate our reservoirs that Buckley writes so elegantly about.

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 http://www.loathemygovernment.com/. 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:

http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.reason.com/
http://www.repealamendment

Why Medicare and Social Security Are Doomed - The $222 TRILLION Dollar Conversation Romney and Obama Should Be Having

We are still in the middle of what I call "silly season" when it comes to politics and elections. Politicians and their respective advocates in the media talk about trivia, inane issues and other silly stuff that really will have no impact on the lives of most Americans as we go forward.

The Washington Post two weeks ago did a 700 word article on the clothes that Paul Ryan wore at some campaign appearances that week and how well those clothes fit him. Joe Biden was put in political "time out" for a few weeks because he continues to have foot in mouth disease. The Obama camp insists that Romney release his tax returns while the President's school records continue to be a secret and the tax returns of most members of Congress are also a mystery.

Trivial matters in a time of dire national issues. Let's do a quick review of the country's economic straits that adults should be talking about vs. the relatively minor issues that our politicians talk about, issues that we have covered extensively in past posts:

• Our national debt is about to hit $16 TRILLION. If spread out equally across all U.S. households, every American household would have to pay about $140,000 each to cover the debt nut. And under Obama, this debt is growing over a TRILLION dollars a year relative to a year's worth of government tax and fee collection.
• Social Security is currently in a negative cash flow situation and will continue in that situation for decades to come as the Baby Boomers retire. A negative cash flow situation means that the Social Security process is now, and will continue, to pay out more in benefits than it collects in tax revenue.
• The Social Security trust fund still does not exist as a source of wealth. It only exists as a cruel accounting hoax, a set of financial IOUs that the Treasury says it owes the Social Security Administration with no tangible assets of wealth to back up those IOUs.
• For the first time in the history of the Social Security program, and going forward, an average American will pay more into the Social Security process than he or she can expect to get back in benefits, making it one of the worst retirement programs imaginable.
• Medicare is quickly eating up more and more of the country's tax wealth and Obama Care will hasten the fiscal collapse of the program since it plans to arbitrarily reduce future Medicare budgets by over $700 billion, without resolving the underlying causes of our high health care costs as a nation.
• According to Forbes magazine, the total wealth of the 400 wealthiest Americans is just over $2 TRILLION, which means that confiscating the TOTAL wealth of the richest Americans will come nowhere close to significantly reducing the ever rising national debt or Social Security and Medicare shortfalls.
• According to the latest available IRS tax summary data, if the government taxed millionaire earners at 100% of their annual adjusted gross income, i.e. confiscating everything they earned, it would not come close to covering one year's worth of Obama's deficit spending budget.
• Of course, you could only do this confiscation once since no one in the country would ever work hard again if they knew the Federal government was going to confiscate everything they earned.

The country is in this dire fiscal situation and the Washington Post is worried about a politician's wardrobe. But we are really not in this dire situation listed above....it is far worst, as described by the latest long range estimates from the Congressional Budget Office (CBO), as analyzed by Boston University Professor Lawrence Kotlikoff. His analysis, summarized in a simple to understand, detailed, and horrifying essay by Gary North, can be read at:

 http://lewrockwell.com/north/north1186.html

The following points from the analysis highlight our dangerous plight:

• Professor Lawrence Kotlikoff of Boston University used data and statistics from the Congressional Budget Office relative to the financials of Social Security, Medicare, and our national debt in his analysis.
• Early this month, Kotlikoff and financial writer Scott Burns published their analysis of the unfunded liabilities of the Federal government.
• According to the figures issued by the Congressional Budget Office and Kotlikoff's analysis, he came to the conclusion that there had been a year over year increase in unfunded Federal liabilities of $11 trillion over the preceding twelve months.
• This is about ten times larger than the "official" Federal deficit in the past year, an official deficit that only measures the short term, annual shortfall of government revenue vs. government spending.
• Kotlikoff estimates the total liability of the Federal government to Americans that is not funded at the present time is now $222 trillion for the next 75 years, the official Medicare timeline for long term planning.
• Again, this is an increase of about $11 trillion in just the past year, according to Kotlikoff's analyses.
• His analysis means that the Federal government would have to set aside $222 trillion today, invest this money in projects that will pay a positive rate of return to cover the financing of this $222 trillion liability debt for the next 75 years.
• Thus, consider this dilemma: the Federal government is currently incurring annual deficits of about $1.2 trillion, it annually spends about $3.7 trillion but it needs to have $222 trillion immediately to invest in private markets to cover Social Security, Medicare, and other government debt.
• The math is not looking good, especially when you throw in the fact that the TOTAL production of wealth every year in the U.S. is only about $15 trillion.
• Consider this other dilemma: our political class was incapable of closing an annual operating deficit of just over a trillion dollars. How in the world can we expect them to close a $222 trillion liability shortfall?
• Another dilemma: If the Federal government actually wanted to set aside $222 trillion today to cover the promises it has made to every American, every American household would have to put up, on average, $1.9 million each. Not going to happen.
• Even if this analysis is off by half, that the unfunded liabilities are only $111 trillion, there is still no way, even with the size of our economy, that this country can fulfill the promises that past politicians have made.

We could go on doing math based on his analysis forever but those scenarios are never going to happen since the Federal government, the dollar, and our democracy will crash long before those liabilities all come due since our economy cannot possibly pay for all entitlement promises the political class has made over the past few decades.

Consider some other factors that will contribute to our doom and gloom scenario:

- According to an article in the May 25, 2012 issue of The Week magazine, even with Obama Care in effect, a married couple on average can expect to pay $240,000 in their retirement years to pay for Medicare premiums, co-pays, deductibles and other health care expenses. This is a 4% increase over the previous year. Thus, it will be difficult to ask American households to cough up $1.9 million each to cover the $222 TRILLION in unfunded liabilities if they have to put up almost a quarter million dollars for their own health care.

- Still do not believe we are in the midst of gloom and doom regarding Social Security? Consider an article in the June 4, 2012 issue of Business Week, "A Massive Program On The Verge Of Collapse." Social Security also has a disability program in addition to its retirement fund. According to the article, the Social Security disability fund will go cash flow negative by 2016, at which time taxes collected will only cover about 79% of the need.

The article clearly points out that both major political parties have done nothing to much acknowledge the problem never mind resolving the issue. The article also points out that the government is so dysfunctional that it has been unable to clear a backlog of over 1 million potential fraud cases.

- A Moneynews article from August 16, 2012 reported on the most recent Treasury Department analysis which showed the following profile of our debt relative to international entities:

• The amount of national debt owned by foreign entities was just over $5 TRILLION, about a 66% increase in just three years.
• The Chinese now hold $1.1643 trillion in U.S. government debt, which is down from $1.3149 trillion in just the past year.
• The Japanese ownership of our national debt is $1.1193 trillion.

While these two countries currently hold a lot of our debt, we probably cannot rely on them to continue financing our insane deficit spending. First, China has reduced its holdings more than 11% in just twelve months. Second, both of these countries have rapidly aging populations and will have massive spending needs of their own to handle their domestic increases in the cost of supporting their elderly populations. Thus, they are unlikely to be a source of funding for the $222 trillion needed to fund our liabilities.

So, American households will have their own expenses to cover and cannot be relied on to raise $222 trillion of wealth. Our two biggest foreign bankrollers, China and Japan, will likely turn inward to service their aging populations and not continue funding our spending addiction. Our own wealthy cannot come close to funding these unfunded liabilities even if the Federal government confiscated all of their wealth and all of their earnings.

Our political class and media worry about ill fitting clothes, personal college records, personal income tax returns, and other extremely trivial issues. Real leaders would step forward and level with the America people: "The U.S. Federal government has made promises to you that are impossible to meet. Thus, as a nation, these are the steps that need to be taken, the sacrifices that need to be made to guarantee that those most in need of help get what we can afford to give them while the rest of America will have to do with less."

What are the odds that anyone in the current political class has the courage to stand up and make that statement and back it up with a cogent, fair, logical, and financially sound plan to get us through this dilemma? In my view, the odds of that not happening might actually exceed the size of the national debt these same people have created. Despicable from a leadership perspective.

But there might be a way to get through the gloom and doom. We would recommend starting with four steps from "Love My Country, Loathe My Government:"

1. Step 10 would reduce the Social Security tax rate but uncap the maximum amount taxed and apply the tax to all forms of income in order to make the application of the tax fairer across all income levels.
2. Step 11 would raise the retirement age to 70, with a hardship exception, to delay payments to Americans who can afford to wait a little while for their Social Security payments.
3. Step 12 would block all Americans from receiving a Social Security check if their net worth, not income, exceeded $3 million. People like Trump, Gates, Buffet, etc. can afford to live comfortably without a Social Security check, enabling the system to better serve the truly needy.
4. Step 1 would reduce government spending 10% a year for five straight years to finally get us to a balanced budget. You cannot start paying down your debt until you get to a balanced budget. We have discussed many, many ways and analyses that have already been put forth to accomplish this relatively easy task, assuming some courage on behalf of our politicians.

Other necessary steps would include the following:

• Implement the National Bounty System as outlined in the following post:
• http://loathemygovernment.blogspot.com/2012/05/national-bounty-system-fixing.html, finally start tracking down and prosecuting the criminal elements that defraud Social Security, Medicare, and Medicaid of over  $200 billion every year. 
• Repeal Obama Care and start over, putting forth a rational, cost efficient plan that actually looks at the true root causes of our ever escalating health care costs rather than just creating another massive, expensive, and ineffective  government bureaucracy like Obama Care.
• Find a way to overhaul Medicare that reduces costs and puts the health care decisions of individuals back into their own hands rather than the hands of unelected bureaucrats. A good starting point for an adult discussion would be with Paul Ryan's plan to overhaul Medicare.

If we do not have the needed adult discussion, we will continue to live with the gloom and doom disaster of Social Security and Medicare collapsing followed by our currency cratering and then the end of our democracy.

Oh, yes, there is another way to avoid the gloom and doom. Do not get old and do not get sick. Have a nice day!

Please visit our Presidential website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

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 http://www.loathemygovernment.com/. 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:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/

Obama Care - Still Constitutional and Still a Disaster: Part 4 - Bifurcating Medical Care and Concierge Medicine

We have spent the past several days reviewing why Obama Care is such a disaster, discussions that we will summarize tomorrow as we wrap up this depressing four part series on the disaster that is Obama Care. The past two days have been my thoughts and analysis based on my reading, research, and understanding of what Obama Care is about to do to just about every American.

However, I am by no means an expert on health care, just an average American who cares about his own family's future health care needs, the health care of friends and other Americans, and the fiscal future of our country and democracy. Today, I will present some work that has been done by an expert in the field of health care, as reported in a recent edition of the Wall Street Journal. 

John Goodman is president of the National Center for Policy Analysis and the author of: "Priceless: Curing the Healthcare Crisis" (Independent Institute, 2012). He wrote the following insightful analysis for the August 14, 2012 edition of the Wall Street Journal, "Why The Doctor Can't See You."

If you do not believe what I have been reviewing the past couple of days, take a look at what an expert thinks is going to happen under Obama Care and do two things for you own good:

1. Don't ever get sick.
2. Be very, very scared.

*******************************************
August 14, 2012, 7:19 p.m. ET


John C. Goodman: "Why the Doctor Can't See You"

The demand for health care under ObamaCare will increase dramatically. The supply of physicians won't. Get ready for a two-tier system of medical care.
Are you having trouble finding a doctor who will see you? If not, give it another year and a half. A doctor shortage is on its way.

Most provisions of the Obama health law kick in on Jan. 1, 2014. Within the decade after that, an additional 30 million people are expected to acquire health plans—and if the economic studies are correct, they will try to double their use of the health-care system.

Meanwhile, the administration never seems to tire of reminding seniors that they are entitled to a free annual checkup. Its new campaign is focused on women. Thanks to health reform, they are being told, they will have access to free breast and pelvic exams and even free contraceptives. Once ObamaCare fully takes effect, all of us will be entitled to a long list of preventive services—with no deductible or copayment.

Here is the problem: The health-care system can't possibly deliver on the huge increase in demand for primary-care services. The original ObamaCare bill actually had a line item for increased doctor training. But this provision was zeroed out before passage, probably to keep down the cost of health reform. The result will be gridlock.

Take preventive care. ObamaCare says that health insurance must cover the tests and procedures recommended by the U.S. Preventive Services Task Force. What would that involve? In the American Journal of Public Health (2003), scholars at Duke University calculated that arranging for and counseling patients about all those screenings would require 1,773 hours of the average primary-care physician's time each year, or 7.4 hours per working day. 

And all of this time is time spent searching for problems and talking about the search. If the screenings turn up a real problem, there will have to be more testing and more counseling. Bottom line: To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it, leaving no time for all the other things they need to do.

When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level. But in this country, as in other developed nations, Americans do not primarily pay for care with their own money. They pay with time.

How long does it take you on the phone to make an appointment to see a doctor? How many days do you have to wait before she can see you? How long does it take to get to the doctor's office? Once there, how long do you have to wait before being seen? These are all non-price barriers to care, and there is substantial evidence that they are more important in deterring care than the fee the doctor charges, even for low-income patients.

For example, the average wait to see a new family doctor in this country is just under three weeks, according to a 2009 survey by medical consultancy Merritt Hawkins. But in Boston, Mass.—which enacted a law under Gov. Mitt Romney that established near-universal coverage—the wait is about two months.

When people cannot find a primary-care physician who will see them in a reasonable length of time, all too often they go to hospital emergency rooms. Yet a 2007 study of California in the Annals of Emergency Medicine showed that up to 20% of the patients who entered an emergency room left without ever seeing a doctor, because they got tired of waiting. Be prepared for that situation to get worse.

When demand exceeds supply, doctors have a great deal of flexibility about who they see and when they see them. Not surprisingly, they tend to see those patients first who pay the highest fees. A New York Times survey of dermatologists in 2008 for example, found an extensive two-tiered system. For patients in need of services covered by Medicare, the typical wait to see a doctor was two or three weeks, and the appointments were made by answering machine.

However, for Botox and other treatments not covered by Medicare (and for which patients pay the market price out of pocket), appointments to see those same doctors were often available on the same day, and they were made by live receptionists.

As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare's newly created health insurance exchanges.

Their wait will only become longer as more and more Americans turn to concierge medicine for their care. Although the model differs from region to region and doctor to doctor, concierge medicine basically means that patients pay doctors to be their agents, rather than the agents of third-party-payers such as insurance companies or government bureaucracies.

For a fee of roughly $1,500 to $2,000, for example, a Medicare patient can form a new relationship with a doctor. This usually includes same day or next-day appointments. It also usually means that patients can talk with their physicians by telephone and email. The physician helps the patient obtain tests, make appointments with specialists and in other ways negotiate an increasingly bureaucratic health-care system.

Here is the problem. A typical primary-care physician has about 2,500 patients (according to a 2009 study by the Centers for Disease Control and Prevention), but when he opens a concierge practice, he'll typically take about 500 patients with him (according to MDVIP, the largest organization of concierge doctors): That's about all he can handle, given the extra time and attention those patients are going to expect. But the 2,000 patients left behind now must find another physician. So in general, as concierge care grows, the strain on the rest of the system will become greater.

I predict that in the next several years concierge medicine will grow rapidly, and every senior who can afford one will have a concierge doctor. A lot of non-seniors will as well. We will quickly evolve into a two-tiered health-care system, with those who can afford it getting more care and better care.

In the meantime, the most vulnerable populations will have less access to care than they had before ObamaCare became law.

****************************************

Don't think this will happen? Consider an August 6, 2012 article from the Washington Post. It discusses the research and analysis of Sandra Decker, an economist with the Center for Disease Control. She went through the 2011 National Ambulatory Medical Care Survey, which asks thousands of doctors whether they would accept new Medicaid patients.

What she found could could reinforce the concept discussed above: 31% of the doctors in the survey said they will not be accepting new Medicaid patients, significantly higher than the percentage who said they will not be accepting new private insurance or Medicare patients.

Ms. Decker found that there is a somewhat strong relationship between doctors' willingness to take on Medicaid patients and the amount of money they get from Medicaid to take on these patients. In other words, doctors that get paid more to handle these types of patients are more likely to see these types of patients. Obvious.

Thus, this marketing rationing is already going on and will likely get worse and devolve into the two tier system described above.

Again, EVERYONE in this country should be able to get reasonably priced and reasonably available health care. Unfortunately, given how poorly Obama Care was thought out and written, this goal is not going to happen as a result of this legislation.


We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

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 www.loathemygovernment.com. 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:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/

Obama Care - Still Constitutional and Still A Disaster: Part 3 - Taxes, Taxes and More Taxes

We have spent the past few days reviewing the fact that while Obama Care is Constitutional, it is still a disaster along so many dimensions:

1. It never addressed the real root causes of our escalating high health care costs including America's bad eating habits, bad smoking habits, bad exercise habits and how government actions and subsidy programs encourage these bad habits.
2. It never addressed the aging of America nor the costs and increases in aging diseases that are likely to occur.
3. It never addressed the issue of medical tort reform, an avenue that has been highly successful at the state level.
4. It never broke down the barriers of insurance company competition across state lines that would increase competition and decrease costs.
5. It never "followed the money" to find out and understand where all of these escalating health care costs go and what parties benefit and profit from these increased costs.
6. It never anticipated the obvious fact that companies would turn full time employees into part time employees because these companies could not afford the increased Obama Care costs that would be imposed on them.
7. It never anticipated that companies would terminate their employee and retiree health care plans because it would be cheaper not to offer them and pay a small fine under Obama Care than to continue with them in place.
8. It never anticipated or planned for the fact that the country would become critically short of doctors once more people had access to health care insurance.
9. It never understood that robbing Medicare of hundreds of billions of dollars to pay Obama Care's costs would endanger existing health care support and services for existing and future elderly Americans and yet not solve the escalating health care cost problem in this country, it only moves the cost problem  around within the Federal bureaucracy.
10. It never understood that by not solving the underlying root causes, hundreds of billions of dollars will be added to the national debt.
11. It never understood that the penalty for not obeying the Obama Care mandate to purchase insurance was mostly an unenforceable infraction, rendering the individual mandate mostly toothless from an enforcement perspective.
12. It never understood that today the IRS is failing miserably to collect the taxes owed to the Federal government today and will likely be unable to effectively collect and enforce the additional 47 taxation tenets introduced under Obama Care.
13. It never understood that the half a billion dollars Obama is giving to the IRS to collect the enforcement mandate under Obama Care would be far better spent tracking down and prosecuting the criminal elements that bilk Medicare and Medicaid out of over $100 billion a year.

We have covered MANY other reasons why Obama Care is a bad idea but let's stop here with lucky thirteen. These thirteen reasons do not include the Obama Care taxes that will hit many, many Americans, not just the rich:

- Obama Care applies a new 2.3% tax on the sales of medical devices. These devices range from MRI and X-ray machines to syringes and stethoscopes to prosthetics, artificial arms and limbs. As with any tax, disposable income is reduced and market demand and economic growth are dampened.
According to research by the Heritage Foundation, layoffs of workers have already occurred at some manufacturers that have anticipated the tax’s impact on their medical devices businesses. Most notably Stryker Corporation of Kalamazoo, Michigan, which has already announced it will lay off about 1,000 workers—about 5 percent of its workforce—because of the tax. Also, picture the fact that many of our brave soldiers who lost limbs in Iraq and Afghanistan will be hit with this tax.

- Obama Care imposes a new Medicare tax increase on those Americans earning over $200,000 a year and applies that increase and the base tax not only to wages but all forms of income. This will also take disposable income out of the marketplace, suppressing economic growth while not solving the base health care cost issue in the country. The danger with this step is that when Obama Care starts to run a deficit, which is it highly likely to do, you can be sure that the $200,000 threshold will be lowered to feed the beast, eventually affecting not just the "rich."

- Although not a government tax, Papa John's Pizza Chairman, John Schnatter, told CBS News on August 8, 2012 that Obama Care will result in Papa John's having to raise the price of its pizzas to cover the costs imposed on it by Obama Care. Now, if you assume that Papa John's is not unique in that it needs to raise prices to cover the cost of Obama Care taxes, we could expect to pay more for our movie tickets, our supermarket forays, our auto purchases, etc. as other industries adjust their prices to their higher Obama Care tax costs.

- If the image of veterans paying more for their prosthetic devices is not bad enough, consider the impact that Obama Care will have on Flexible Spending Accounts (FSAs). FSAs can and have often been used by families with special needs students to help pay the special education costs for those special needs kids. Obama Care imposes cap on FSAs of $2500 vs. the unlimited ceiling that exists today. The imposition of a cap will place severe financial strain on the education costs of these special needs kids regardless of how "rich" their parents are. 

These are just a handful of ways that Obama Care taxes will impact many, many Americans' lives. Rich or not so rich, we are all likely to pay more in taxes for a solution that will never work and that is the biggest sin and transgression of all, Obama Care will not work.

An old saying goes as follows: "Just because you can, does not mean you should." Just because Obama Care could get passed and is Constitutional does not mean it should have been passed. The past three days are evidence of the wisdom of this saying.

Which is not to be confused with the recent wise words of another famous American, which pretty much summarizes in a few sentences what took us three days to cover:

Let me get this straight . . .We’re going to be “gifted” with a health care plan we are forced to purchase and fined if we don’t! Which purportedly covers at least ten million more people without adding a single new doctor, but provides for 16,000 new IRS agents, written by a committee whose chairman says he doesn’t understand it, passed by a Congress that didn’t read it but exempted themselves from it, [personal attack phrase removed]with funding administered by a treasury chief who didn’t pay his taxes, for which we’ll be taxed for four years before any benefits take effect, by a government which has already bankrupted Social Security and Medicare, all to be overseen by a surgeon general who is obese , and financed by a country that’s broke!!!!!

‘What the hell could possibly go wrong?’

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

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 www.loathemygovernment.com. 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:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/