1) One of the most popular items on many Christmas lists this year is a new cell phone. But they can be expensive, not only for the phone but also for the talk and data minutes that are paid every month.
Unless, of course, you can rip off the Federal government and get a so-called Obama Phone, pay nothing for it, and abuse honest taxpaying Americans. The Heritage Foundation recently did a nice piece on their website that succinctly summarized the insult to working Americans that the Obama phone program has become:
- The Obama Phone/free cell phones for low-income Americans is one of the fastest growing welfare programs in the United States, all paid for by honest Americans via a monthly charge on their bills called the Universal Service Fund.
- Out of this fund, the Federal government pays Obama Phone companies $9.25 for every person connected through Lifeline. Each person gets a free phone and a certain amount of airtime.
- The cost of the program has nearly tripled in cost to taxpayers since Obama took office despite his claims that the economy is doing well.
- Even the Federal Communications Commission’s (FCC), the government bureaucracy that administers the program, admits that is rife with “waste, fraud and abuse.
- A cellular phone carrier, SafeLink, offers government paid for plans that not only include basics like local, long distance, and emergency calls, but other amenities such as international calls, 1,000 texts, carry-over minutes, call waiting, roaming, and a choice of 67, 125, or 250 minutes—all at no cost and contract-free.
- If 250 monthly minutes are not enough to call potential employers, no problem! Referring a friend for a free cell phone will score an additional 100 minutes.
- A comparable paid plan available at SafeLink’s parent company, TracFone Wireless, would cost almost $400 annually per phone for a perons using his or her own money to get cellular service.
- Although the Obama Phone program is theoretically restricted to one phone per household and only available to those who have an income below 135 percent of the federal poverty line or enrolled in a means-tested entitlement program, in reality, it is simple to obtain multiple Obama Phones.
- The FCC announced that duplicate Lifeline subscriptions topped a whopping 2 million, warranting millions in fines to companies for failing to verify recipients’ income.
- Jillian Melchoir of the Franklin Center was able to collect three of her very own Obama Phones, even though her income disqualifies her from any government support.
- According to figures supplied by the FCC to The Wall Street Journal, 41 percent of subscribers were unable to prove their eligibility for the program.
- In an undercover investigation by conservative activist James O’Keefe, prospective recipients openly discussed selling their phones for handbags and heroin—only to be reassured by the Obama Phone vendors they would not be turned in or terminated.
2) We have often talked about how our “war on drugs” has being going on for about four decades and for about four decades it is has been a disaster. We imprison people for casual drug use, increasing our prison costs without providing any substantial addiction treatment, we distract law enforcement resources away from violent criminals to pursue nonviolent casual drug users, we trample on Fourth Amendment rights of American citizens, and our drug policies have led to the creation of violent drug cartels around the world, especially in Mexico.
We have often talked about how the Mexican drug cartels are ripping apart civilized living in Mexico. Their vast drug wealth corrupts police and public officials, they attack and kill journalists who dare to report on their violent activities, they buy legitimate Mexican businesses to cover their illegal activities and violently attack anyone one who might get in their way.
But a recent Associated Press article illustrated how large and dominant the drug cartels have become. Their November 29, 2013 article talked about how Mexican government officials verified that the drug cartels have entered the Mexico’s lucrative mining industry, exporting iron ore to Chinese mills.
Say what? The cartels are cutting international trade deals with foreign governments? Insane. Additionally, they control the mines, the transportation, the docks and the shipping to send the ore to China. It has gotten so bad that the military had to take over Lazaro Cardenas, Mexico's second-largest port, in order to cut off the cartels' export trade.
And to protect their new revenue source, the cartels are up to their violent ways, according to an example from the article:
- Three Michoacan state detectives were wounded in an ambush when they were traveling to investigate a mine taken over by criminals. When reinforcements arrived, those officers were also ambushed, part of a string of attacks on police in Michoacan on Wednesday and Thursday that left two officers dead and about a dozen wounded.
- The article goes on to compare the cartels to standard Mafia operations in the way they take over legitimate companies and operations via violence and threats. And it has been our ineffective, lame brained war on drugs that has led to the creation of these monster, violent gangs.
- It is a 40 year war that the political class seems to have no desire to fix, reminding one of an old Einstein quote: “the definition of insanity is doing the same thing over and over and expecting a different result.”
3) A few days ago in a previous insanity post, we pointed out the fact that the U.S. Treasury was going to sell of its remaining stock stake in General Motors by the end of the year. It is expected that this will result in the GM bailout costing the American taxpayer about $10 billion. This comes out to about $93 for every American household.
This $10 billion shortfall is going to occur even though the company has about $26 billion sitting around in cash reserves. First insult to the American taxpayer. However, there is an additional insult that was discussed in an October, 17, 2013 Washington Examiner article:
- In exchange for the bailout in 2009, GM promised to meet certain domestic car production targets over the next four years.
- This condition was to ensure that GM jobs remained here in the U.S. and weren't shipped overseas.
- The production targets started at 1.8 million domestic manufactured cars in 2010 and were supposed to rise to 2.26 million by 2014.
- However, GM repeatedly missed the targets, beginning with an 81,000-unit shortfall the first year.
- Although sales improved after the first year, the company never met the agreed to bailout targets.
- In 2012, GM fell about 13,000 cars short of its 2 million target.
- We may never know how the company is doing this year since in February, GM announced in its annual report to shareholders that the U.S. Treasury had agreed to “irrevocably waive certain of its rights” including “certain manufacturing volume requirements.”
- In other words, the Obama administration let GM off the hook with its bailout conditions, a conclusion that was verified in June when GM announced it would no longer report its domestic sales, all worldwide sales would be lumped together for total company sales.
- Coincidently in June, GM announced it would boost its output from its China plants by 70%, using some of that increased production not only for the Chinese market but also for export out of China.
So let’s review. The Washington political class justifies giving a private company tens of billions of taxpayer dollars to bailout itself out of its bad management decisions. The government says this will save Detroit and create jobs in America. However, the bailout money is never repaid to the American taxpayer, leaving the country with a $10 billion unpaid debt even though the debtor company, General Motors, is sitting on about $26 billion in cash.
Not only do the domestic jobs not materialize as promised to any great degree, the Washington political class forgives the lack of job creation, agreed to in exchange for $10 billion, by allowing the company to not fulfill its production goals required by the bailout agreement, instead sending investment overseas to China where it creates jobs. Pathetic con job on the American taxpayer, crony capitalism ay its worse.
Oh, by the way, the court gave Detroit permission this past week to go bankrupt.
4) On last piece of insanity for this month, a quick review of how horribly the current set of politicians in Washington have handled our economic affairs over the past few years, courtesy of an analysis by Forbes magazine back in August, 2013:
- Since the Great Depression, there have been 11 other recessions in this country prior to the Great Recession of 2008.
- In all eleven of recessions, the economy recovered all of the domestic jobs lost during the recession an average of 25 months after the recession began.
- However, today, 5½ years, or 67 months, after the Great Recession started, we still have not recovered all of the jobs lost during the recession
- In 2008, the Federal government reported that total nonfarm seasonally adjusted employment was 138 million workers.
- As of mid-2013, there are currently fewer than 136 million workers.
- Additionally, the number of Americans has grown by 12.8 million over the past five years.
- In some parts of the country, more than one in five adults who want full time employment can’t find it.
- As a comparison, Reagan’s recovery from the sharp 1981-1982 recession recovered all of the jobs lost during that recession within 36 months.
- At this point in the Reagan recovery, jobs had grown nearly 10% higher than when the recession started, representing an increase of more than 10 million more jobs.
- In the 11 post depression recessions before President Obama, the economy recovered the lost GDP during the recession within an average of 4.5 quarters after the recession started. But it took Obama’s recovery 16 quarters, or 4 years, to reach that point.
- Today, 5½ years, after the Great Recession started, the economy (real GDP) has grown only about 3% above where it was when the recession started.
- At this point in the Reagan recovery, the economy had boomed by about 20%, or one fifth.
- As we have reported many times in this blog, middle class household incomes have continued to fall during Obama’s recovery, losing even more ground than during the recession.
- The number of Americans living in poverty has also continued to soar during Obama’s recovery, to about 50 million, the most in the more than 50 years that Census has been tracking poverty.
- Despite spending trillions and trillions of dollars on the “war on poverty” since the mid 1960s, the U.S. poverty rate is 16.1%, higher than when the War on Poverty started in 1965.
Never has one set of politicians had so much help in pumping up the economy for such a long time with such high stimulus spending and still we are stuck with the pathetic results outlined by the Forbes analysis.
That’s enough insanity for this month. After reviewing the wasteful spending on Obama Phones, the crony capitalism of General Motors and the Obama administration, the creation and empowering of violent drug cartels, and the inept handling of the nation’s economy, I do not think we can stand much more “leadership” from the lunatics in Washington. More insanity next month, same time, same idiocy from the same, tired set of useless politicians.
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:
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Please visit the following sites for freedom:
Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w
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