July, 2016, The Unfolding Disaster That Is Obama Care: Costs Likely To Conintue Rising, Customer Base Likely To Continue Shrinking and The Obama Administration Likely to Continue To Break The Law

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements its rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:

• Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
• Our food chain is infested with overdoses of high fructose corn syrup, salt, and other unhealthy additives.
• Americans smoke too much.
• Americans do not exercise enough.
• The country is in serious need of health care tort reform.
• Barriers to insurance company competition across state lines need to come down.
• Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
• Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
• Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.

You cannot resolve any problem unless you understand and address the underlying root causes. No difference here: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused insurance premiums, deductibles and co-pays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care., To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

This week we will be reviewing the latest unfolding disasters from the worst piece of legislation ever written by Washington:

1) Haley Johnson, writing for the Conservative Daily News website on June 28, 2016, reviewed the dire warnings about Obama Care in 2017 that were recently pronounced by the very person that helped Obama Care when she worked in the Obama administration. Marilyn Tavenner was once the head of the Centers For Medicare and Medicaid Services and helped launch Obama Care.

When she was recently asked what the immediate future held for Obama Care policy premiums costs, she replied: “I’ve been asked, what are the premiums going to look like? I don’t know, because it also varies by state, market, even within markets. But I think the overall trend is going to be higher than we saw previous years … that’s my big prediction.”

Whoa, hold on there! When she was rolling out Obama Care, didn’t her boss, the President claim that the annual costs for health insurance for families could down up to $2,500 a year? Didn’t he promise that the legislation would “bend the cost curve” of health care downwards? And now that very same person, who currently leads a health industry organization of insurers, is telling us that those promises are not going to come true? Horrors!

Of course, that is sarcasm. We have often shown how the cost of health insurance premiums, deductibles, and co-pays have gone up substantially under Obama Care, the exact opposite of what was promised. 

Anyone with a lick of common sense five years ago would realize that the Obama Care requirement that insurance companies must take anyone customer on and give them insurance coverage regardless of their current health condition was a recipe for disaster, as pointed out by Ms. Tavenner: “The problem with the exchanges … is people are still kind of seeing this as, ‘I use insurance when I’m sick, but I may not need it when I’m no longer sick."

Tavenner also correctly pointed out that the initial programs Obama Care put in place to cushion the blow of insurance companies having to accept anyone applying even if they had a pre-existing condition are going away. Once that financial crutch is removed, the Obama Care insurers will need to increase their premium rates even more to cover this new shortfall, further increasing Obama Care policy costs.

But again, anyone with a spec of common sense could see this coming years ago. We talked about it in this blog for months at a time. And now a former Obama administration insider is telling us the same thing: Obama Care will not reduce anyone's health insurance costs in any way and the shock of continually increasing deductibles, premiums, and co-pays is going to get worse not better in the coming year or so.

2) Well, maybe we do not have to wait a year to see if Ms. Tavenner’s predictions come true. According to an article for Breitbart that was written by Caroline May on July 14, 2016:

• An amazing 1.6 million Obama Care customers have dropped their Obama Care coverage already this year.
• This drop of 1.6 million customers happened in the remarkably short timeframe from late January, the end of the annual enrollment period, and the end of March, according to data from the Federal government.
• 12.7 million customers had enrolled in Obama Care policies prior to January 31, 2016 but that number dropped to 11.1 million customers just two months later, an almost 13% decline.
• The measurement for the drop is the number of people who signed up for an Obama Care policy during the enrollment and who were still paying their premiums and keeping their policy active by the end of March.
• Remember, the original estimate is that by this time, Obama promised that about 20 million Americans would have healthcare coverage via Obama Care policies, so having 11.1 million now means that the program has missed its objective by about 50%.
• And that assumes that no other Obama Care policy holders terminated their accounts in the past four months which would make that 13% drop even worse.

Now it could be that some of those in the 1.6 million got health insurance via a new job, or got health insurance coverage from a spouse’s new job, or qualified for Medicaid. Or more likely, Ms. Tavenner was right and these Obama Care customers decided that the increases in premium costs for Obama Care policies was just not a good value despite the fact that 85% of Obama Care customers get an average subsidy of $291 a month. 

With a handful of the remaining Obama Care co-ops under financial duress, a lot more Obama Care policyholders might be dropping out of the program before long, leaving the promise of 20 million people covered by Obama Care policies even further out of view. You cannot claim that you ran a successful program when you missed our own program objective by 50%.

3) We mentioned above and in previous posts how the programs set up to provide subsidy help in the initial years of Obama Care to help insurers financially ease into the Obama Care insurance world were expiring, putting additional financial stress on Obama Care insurers. Some of these insurers, seeing the writing on the wall of terminating subsidies and negative financial results from Obama Care policies, have already withdrawn from the Obama Care exchanges.

Alexander Hendrie, writing for the Americans For Tax Reform website on July 7, 2016, pointed out that Congressional committees recently issued a report that alleged that the Obama administration was illegally using taxpayer money to secretly, and probably illegally, to bailout Obama Care insurers. 

The report was put out by the House Ways and Means Committee and the House Energy and Commerce Committee. It accuses the administration of illegally funding Obama Care’s “Cost Sharing Reduction” (CSR) program for years despite the objections of IRS officials.

Key findings of the Congressional report, as written by Mr. Hendrie, include the following accusations:

-The administration initially submitted a CSR appropriations request for Fiscal Year 2014, but later withdrew it and began making payments illegally. As the report notes, Obama Care created CSR payments, but they have never been appropriated for. The Constitution explicitly makes clear that the power of the purse lies with Congress and the Executive cannot spend taxpayer money without Congressional approval.

-CSR payments were created as one way to artificially hide the true costs of Obama Care through a web of government spending programs. CSR payments would be given to an insurance company based on the income of an enrollee and the plan they purchased. Assuming certain criteria were met, the insurance company would receive federal dollars as an incentive to keep co-payments, deductibles, and other out of pocket costs low.

-After officials from the Obama Department of Health and Human Services (HHS) withdrew the CSR appropriations request, the administration begun illegally shifting funds from a separate appropriation. The administration has refused to provide the legal memorandum that led to this decision even in the face of Congressional subpoenas.

-IRS officials expressed concern that this method of funding CSR payments was illegal so were briefed on the memorandum. As the report notes in an interview with one IRS official at the meeting, they were not permitted to take notes or keep a copy of the memo:

“We were given a memo to read. We were instructed we were not to take notes and we would not be keeping the memo, we’d be giving it back at the end of the meeting.”

-Following this meeting, IRS officials continued to have concerns that the CSR payments violated federal law and raised concerns with IRS Chief John Koskinen. As the report notes, these concerns were heard, but ignored:

“The IRS officials’ concerns that this course of action violated appropriations law were noted, but not addressed or ameliorated by OMB’s legal memorandum.”

-Shortly thereafter, DoJ and Treasury officials officially approved the decision to use an unrelated appropriation to make CSR payments.

Since Congress launched its investigation, multiple Obama government agencies have undertaken a concerted effort to hide the truth by refusing to provide, or unlawfully redacting documents, refusing to answer questions or allow witnesses to testify, and selectively applying the law. In at least one case, the Obama administration pressured a witness into not revealing information, and in another case the administration prevented a witness from answering questions.

As the report notes:

• The Department of the Treasury improperly withheld and redacted documents without any valid legal basis to do so.
• The Department of Health and Human Services improperly withheld documents without any valid legal basis to do so.
• The Office of Management and Budget improperly withheld documents without any valid legal basis to do so.
• The Department of the Treasury failed to search for records responsive to the committees’ subpoenas.
• Treasury used regulations and Testimony Authorizations to prohibit current and former IRS employees from providing testimony to Congress about the source of funding for the CSR program.
• Treasury officials selectively enforced the law by allowing witnesses to answer certain questions prohibited by the authorizations without objection
• HHS counsel prevented witnesses from answering substantive questions regarding the CSR, citing the need to protect “internal deliberations” and “confidentiality interests”
• Witnesses were instructed not to reveal the names of White House and DoJ officials involved in decisions regarding the cost sharing reduction program.
• The Department of the Treasury pressured at least one witness into following the restrictions set forth in his Testimony Authorization after the witness questioned Treasury’s ability to limit his testimony.
• OMB prevented a witness from answering factual questions regarding the dates or times of a meeting or conversation, refusing to invoke a legal privilege to justify withholding the information from Congress.

Breaking the law, illegally bailing out the insurance companies, tampering with potential witnesses, and failing to provide the requested documents to Congress, sounds about right when describing the worst piece of legislation ever enacted and the most lawless administration in my lifetime. And of course, the American taxpayer ends up paying the insurance company for this lousy piece of legislation.

4) One last piece of ObamaCare nonsense for today. I usually do not reference random pieces of writings that are sent through my email, I almost always want to rely on professional, legitimate, and identified news sources and government findings for our discussions in this blog. But the following, unsourced description of what Obama Care is does hit a home run in showing how inane the logic was in putting it together. It boils down the 2,000 pages of the legislation and the 10,000 ages or so of regulations as related to Obama Care to four succinct points: 

1. In order to insure the uninsured, we first have to un-insure the insured.

2. Next, we require the newly un-insured to be re-insured.

3. To re-insure the newly un-insured, they are required to pay extra charges to be re-insured.

4. The extra charges are required so that the original insured, who became un-insured, and then became re-insured, can pay enough extra so that the original un-insured can be insured, so it will be free-of-charge to them. 

Crazy and illogical and passed by the U.S. Federal government.

That will end our Obama Care review for both today and this month, things have been a little slow in this area. But we now know that a former, high ranking Obama Care insider predicts that costs will go up and not down as Obama constantly promised, that current Obama Care customers are dropping out of the program at a very quick rate, and that the lawlessness of the Obama administration extends and continues in this area with regard to blackmailing insurance companies with taxpayer money to stay in the program and continue to provide Obama Care policies. The unfolding disasters continue to unfold.

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.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

February, 2016, Part 2, Political Class Insanity: More Debt, More Taxes, More Disgust With Government

It is the beginning of another month which means it is time again to review the latest political class insanity from the American political class. Each month it takes us multiple posts to cover the wasteful spending, incompetent government organizations and employees, government programs that usually make a problem worse than resolving it, inane and idiotic politician comments, etc.

To review past posts on this insanity and idiocy, just click on the first few posts in each month listed to the right of this page. After reviewing just a handful of these insanity posts we think you will agree that we are currently being served by the worst set of American politicians ever to hold office in our entire history.

So let’s get started with the latest insanity:

1) According to the history books, one of the main drivers that American colonists had for rebelling against the British was the high level of taxation that the British throne had placed on the colonies. The colonists understood way back then that you could not have political freedom without financial freedom. “Taxation without representation” became their rallying cry and their efforts to throw off the yoke of high taxation led to our freedoms and liberties in subsequent centuries.

Well, according to a recent piece on the Against Crony Capitalism website, taxation with representation is not so great either. Their research found that the average American today spends more on taxes than food, clothing and housing COMBINED (click on the chart for a larger view):



These calculations from the Tax Foundation estimate that all Americans will paid $4.8 trillion in taxes to all government entities in 2015 and spent just over $4 trillion on food, clothing, and housing in 2015. The $4.8 trillion is about 31% of the total national income of all Americans. Thus, in reality, we are paying over 30% of our earnings to the “government” each year, a government that is inept, wasteful, crony infested, and generally incompetent.

Another way to view this taxation repression is to multiply 31% by 365 days of the year, in which case we find that we working until late April each year just to pay the government. Pathetic and insane, a complete contradiction of the principles on which this country was founded.

2) Given the high level of taxation and the wasteful spending that their wealth is used for by the political class, it should not be a surprise that Americans despise government agencies. In fact, according to a new survey by the American Customer Satisfaction Index (ACSI), Americans' level of satisfaction level in Federal agencies, including everything from Treasury to Homeland Security, has 1) fallen for a third consecutive year and 2) reached an eight-year low.

Not surprisingly, the Treasury Department, home of the notorious IRS, got the lowest marks of satisfaction compared to all other government agencies. Not only are they the ones that come and take our money, they are also the agency that continues to show up as being one of the more inept ones in this blog, one that fails to collect almost $400 billion a year from tax evaders, one that erroneously sends out billions of dollars a each year to criminal activities and enterprises, and the agency that denied the First Amendment rights of millions of citizens by delaying and sandbagging people’s requests to form non-profit entities to support political stances that were contrary to the Obama administration.

"Satisfaction is linked to broader goals in the political system that it wants to maximize, like confidence and trust," said Forrest Morgeson, director of research at the ACSI. "It's much more difficult to govern if the entire population dislikes you." This may partially explain why the Obama administration has been such a failure. It failed to deliver basic government services to Americans, resulting in a record low satisfaction level with government, and in this case the Obama administration. Funny how the eight year low satisfaction was reached seven years into the Obama Presidency.

3) Terrence Jeffrey, writing for the CNS News website on January, 26, 2016, may have identified another reason why satisfaction with government is at an eight year low. According to the article and the U.S. Treasury, the U.S.national debt has grown over $8.3 TRILLION in the first seven years of the Obama administration. This comes out to an additional debt load of $70,612.91 for EVERY U.S. family.

For comparison purposes, before the liberal readers of this blog go nuts, during the entire eight year Bush Presidency, the national debt burden went up just under $4.9 trillion or $44,104.65 for every American household. But given that the Obama administration has another year of debt accumulation to account for, there is a very good chance that Obama will add twice as much debt to America than Bush did. In fact, there is a very good chance that Obama will increase the national debt by the same amount that ALL previous Presidents COMBINED:



From the beginning of Bush’s first term to the end of Obama’s seventh year in office, the national debt increased $13,213,630,160,947.51 which comes out to $112,219.57 for each of the 117,748,000 households that were in the country as of September, 2015. As we said before, taxation with representation is not so great either.Maybe if we had gotten something for our individual $112,219.57 debt burden, we could justify this type of government spending. But our roads and bridges are still falling down, our public schools still fail to educate our kids, our border is still not secure, we are no safer from terror attacks than we were seven years ago, Medicare, Medicaid, and Social Security are still hurtling towards financial insolvency, government operations are wasteful, inefficient, and ineffective, etc. $112,219.57 for basically nothing in return. If government was a new car, we would have had it recalled as a lemon decades ago.That will do it for today’s insanity. An ever growing and crushing debt burden, a never growing and crushing tax burden, and an ever growing disgust with government and the politicians that operate it. And we are just getting warmed for this month’s political class insanity.

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:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

May, 2015, Part 1, By The Numbers: Tax Numbers Stink, Economic Numbers Stink, Welfare Cheat Numbers Stink

On a semi-regular basis we revisit the theme "by the numbers" just to check in on the state of the country and political class using actual realities and their underlying numbers, not the spin or lies from our politicians. You see, politicians usually have nothing to gain by looking at reality and the numbers since they are more than likely to have screwed up reality and our lives in the first place.

That is why they would rather lie and deceive than tell the truth. But that approach can be destroyed by looking at the hard numbers behind the mess they have created. I once worked for a boss whose favorite saying was: "There is nothing more devastating to an opinion than the right number.” And that is what we try to do with this theme, devastate politicians’ opinions by looking at the right numbers.

So let’s take a look at the numbers that have recently cropped up and again prove that the political class in America continues to be one of the worst set of people to ever hold office, given the state of the country, the many ways they screw up our wealth and government functions, and their inability or non-desire to step up and tell the truth.

1) We have often talked about how insane the nation’s tax code is. Physically it runs about 70,000 pages. We once cited the example that the GE annual Federal tax return would have been 56,000 pages long if it had been printed out. American households spend billions of dollars a year preparing their taxes since it is such a complicated exercise, billions that would have been better spent growing the economy.

But nowhere is the tax code idiocy more on display when it comes to major corporations and their overseas operations. Since the U.S. has the second highest top business tax rate, 35%, in the world, it makes better financial sense for corporations to keep their profits offshore rather than bringing them back to this country where they might actually help grow the economy and improve the employment opportunities of all Americans.

Think about it: why bring billions of dollars back to the U.S. just to pay a whopping 35% income tax on those profits when they can be kept far away and invested in other countries at a much lower tax rate? 

How bad is the problem? Consider an analysis that was recently published in Businessweek that showed how much the Federal government would reap in taxes if those large corporations actually brought their profits home and what entities of the Federal government could be funded with those taxes:

• Microsoft has $92.9 billion of profits sitting offshore, which results in $29.6 billion in lost taxes which could be used to annually fund the Department of Justice and half of the Commerce Department.
• Apple has $69.7 billion of profits sitting offshore, which results in $23.3 billion in lost taxes which could be used to annually fund all but $500 million of the Department of Agriculture’s discretionary budget.
• Oracle has $39.3 billion of profits sitting offshore, which results in $12.2 billion in lost taxes which could be used to annually fund the Treasury Department.
• Citigroup has $43.8 billion of profits sitting offshore, which results in $11.6 billion in lost taxes which could be used to annually the National Nuclear Security Administration.

The list goes on and on but you get the idea: tens of billions of dollars in lost tax dollars due to the second highest business tax rate in the world. What if the corporate tax rate was 10%? The Federal government would then get $9.29 billion in taxes if that rate was low enough to get Microsoft to bring those profits back to the U.S. vs. getting $0 at 35%? And how much more research jobs, sales jobs, and programming jobs would be created in the U.S. if Microsoft did bring that $92.9 billion back to the U.S.?

The numbers are a no brainer: drop the tax rate, the Feds get billions of dollars vs. nothing today, the economy gets a big boost by the infusion of billions and billions of dollars, and companies can focus on growing their business rather than sheltering profits. Everybody wins this numbers game….which means it will never happen if the current set of politicians stay in control.

2) The government released the first quarter GDP growth estimate and it was an anemic .2%. That is right, not 2%, .2%, two one tenths of a percent. A very bad number.

Even worse, the population was up .8% so the GDP per person was actually negative in the first quarter, not a very inspiring number. But less than inspiring economic numbers is to be expected from this administration and this set of Washington politicians. According to a recent comparison of economic recoveries between the Obama administration and the Reagan administration done by the Heritage Foundation:

• 23 quarters after the last recession ended, the annualized GDP growth rate under the Obama administration is a meager 2.24%.
• This places the Obama recovery dead last compared to the six other post recession recoveries since 1960.
• Those recoveries averaged 3.97% after 23 quarters. 
• This difference between the Obama recovery and the average of the other six recoveries translates into nearly $1.7 trillion (in constant 2009 dollars) in missing economic growth.
• But Reagan’s economic recovery’s was a whopping 4.8% annualized growth through 23 quarters.
• That was more than double the Obama economic recovery. 
• If Obama’s recovery had been as robust as Reagan’s the country’s annual GDP number would be $2.48 trillion larger than it is today.

A $2.48 trillion larger economy would have provided a lot of job opportunities for Americans that are finding it difficult to find jobs. But the reasons for the anemic economic numbers is not to hard to discern:

• The Obama administration has added, on average, nine new Federal regulations every day, burdening businesses and business growth with unnecessary government interference.
• The higher taxes on the wealthy has restricted discretionary spending and economic development by the very people that actually have discretionary income.
• The out of control EPA has shut down in the energy industry in this country with no coherent reasons for such overpowering interference and regulation of that industry.
• Obama Care has added taxes and bureaucracies to the whole economy, reducing economic growth and employment opportunities.
• If a no brainer like building the Keystone pipeline and the creation of the thousands of jobs associated with that effort was blocked by this President,chances for other economic opportunities are gong to be far and few between.

The numbers stink, the reasons they stink are obvious, and that is why politicians should never play with economics.

3) Michele Hickford, writing on April 28, 2015 for the Allen West website, put together some very interesting numbers. She showed how easy it was to earn almost $70,000 a year by milking the Federal government’s welfare processes and doing no work and not being employed in the process. 

Her analysis has some validity. According to recent Bureau Of Labor Statistics in 2014 19.9% of American families had no one in the household that had a job. Amazing number, one out of every five households had no one earning wages or a salary last year. Which says either the economy is in terrible shape with unemployment around 20% or many Americans are ripping off the welfare system.

Given that the unemployment rate, no matter how you measure it, is nowhere close to 20%, the following numbers show that there is a good case to be made that ripping off the Federal taxpayer is now a full time job for many Americans. According to Ms. Hickford, this is the easy way to earn almost $70,000 a year:

1. If you’re a man, don’t get married
2. Have a couple kids
3. Use your mom’s address for your mail
4. Buy a house
5. Rent your house to your girlfriend and your two kids
6. Section 8 will pay $900 a month for the rent on the 3 bedroom home
7. Have your girlfriend sign up for Obamacare
8. Your girlfriend gets to go to college free as a single mother
9. She also gets $400 a month form food stamps. 
10. She gets a free cell phone. 
11. She also gets a cash grant to help pay for heating costs
12. Move into your house with her, but keep your mom’s address for your mail
13. Each of you can claim one child on your taxes so now you both get to claim head of household credit ($1295)
14. Have your girlfriend get a permanent disability for “marked difficulties maintaining concentration” or having a “back pain.”

This is all perfectly legal, and is likely being done by millions of people. Adding all the numbers up:

$22,800 disability + $10,800 housing benefit +$4,800 food stamps + $3,300 Obamacare subsidy + $900 utilities grant + $5,645 Pell Grant  + $12,000 annual college tuition grant + $8,000 single mother tax benefit  + $1,295 head of household credit…- Almost $70,000

Okay, the economic numbers stink, the welfare abuse numbers stink, and the tax numbers stink, regardless of Washington’s politicians tell us. Remember, there is nothing more devastating to an opinion than the right numbers and we will devastate more tomorrow.

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:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

February , 2013 Political Class Insanity, Part 4: Trading Principles For Oil, Identity Theft Courtesy Of The IRS, And More

Okay, I thought I could keep the February political class insanity to three posts. However, by the time I finished writing the third post, more insanity had poured in and needed to be documented for this month. So, hopefully the following acts of lunacy will finally complete the political class insanity for February, 2013:

1) According to news reports, New York-based designer Thom Browne designed the dress that Michelle Obama wore during her husband’s second inauguration ceremonies, a dress that was estimated to cost at least $10,000. The average American household would probably have to work 3-4 months to afford such a dress. As we have reported previously, the entire inauguration event likely cost American taxpayers around $150 million. During the Christmas season, the White House was decorated with 54 Christmas trees.

There are tens of millions of Americans that need food stamps to survive. 23 million Americans are unemployed or under employed. Tens of millions of Americans do not have health care insurance.

Does anyone really think that Washington is in tune with the rest of America? Disgraceful

2) A January 21, 2013 article in the New York Post discussed the contents of meeting notes from the Federal Reserve from 2007. The article lays out its case that then Vice Chairman of the Fed, Tim Geithner, who would soon become Secretary of the Treasury, probably provided insider trading information, relative to the Fed’s plans for the economy, to his friends in the major banks.

The article contains the transcript words of a telephone conversation between Geithner and another member of the Fed, Jeffery Lacker, where Lacker discusses the fact that the head of Bank Of America already knew what the Fed intended to do to the Fed’s discount rate before it was made public on August 17, 2007. Suspiciously, the stock values of financial stocks moved substantially higher on August 16, the day before the announcement on the discount rate was to be made.

Let’s review: ordinary American citizen deals insider information, ordinary American goes to jail. Vice Chairman of the Federal Reserve Board deals insider information, Vice Chairman becomes Secretary of the Treasury.

3) Freedom House is a Washington, DC-based think tank that conducts research on democracy, liberty, freedom, and human rights. It recently published its latest report on the state of freedom around the world. The report is entitled, "Freedom in the World 2013," and the seven nations with the lowest possible rankings for both political rights and civil liberties included North Korea, Turkmenistan, Uzbekistan, Sudan, Equatorial Guinea, Eritrea and Saudi Arabia.

And here’s the kicker to this dubious list for freedom anemic countries: the United States provides substantial economic, military and/or diplomatic support to four of them. So much for being a beacon of hope and freedom to the rest of the world. We cannot claim that high ground when we are supporting the corrupt governments in Saudi Arabia, Uzbekistan, Equatorial Guinea, and Turkmenistan.

Freedom atrocities that occur in these four countries, as researched and identified by Freedom House, include torture, denial of legal counsel, non-existent women’s rights, public lashings and death for such offenses as homosexuality, adultery, prostitution, and renouncing Islam, horrific prison conditions, rigged elections or no elections at all, etc.

Why does the U.S. government and political class support such wretched regimes? Could it be that all of them are major sources of oil and natural gas? Could it be that one of the gangs we talked about in early January,

http://loathemygovernment.blogspot.com/2013/01/the-selling-and-buying-of-america-part_14.html

Big Oil, and their collusion with the Washington political class, has something to do with our not standing for freedom, liberty, and equality? Insanity.

4) In the February, 2013 issue of Reason magazine we find out that someone in the U.S. Justice Department decided to issue a Federal order/regulation that decided in 2011 the Americans With Disabilities Act (ADA) requires hotels, restaurants, and airlines to accommodate “pygmy ponies” as service animals. Really, pygmy ponies? Ask yourself a couple of questions:

• How many people in the world with disabilities do we think that this regulation would effect? Two people, three people?
• How much will this regulation unnecessarily cost American businesses and our economy as they have to educate their employees about pygmy ponies and the ADA?
• Is that the right use of taxpayer money for high priced lawyers, to determine that pygmy ponies is a pressing issue?
• Did these lawyers have nothing better to do in light of a $16.4 TRILLION national debt due to decades of wasteful government spending?

Ridiculous priorities.

5) Walter Jones used to be a member of the House of Representatives. He had his fifteen minutes of fame when he inanely championed the cause for Congressional cafeterias to rename their French fries to Freedom fries when the French did not support the Bush misadventure into Iraq.

However, ten years later, as quoted in the recent issue of Reason magazine, he has become a big advocate for minimizing foreign military involvement in faraway places such as Iraq. Relative to Afghanistan, he thinks that it has been a mistake, is a mistake, and will continue to be a mistake. It wastes American lives, runs up spending for no conceivable positive end, and worst of all, he observes that we have been funneling money and training resources into the country with little discernible benefit: “No one’s changed Afghanistan [through history] and no one’s going to change it. If you are just waiting to train the Afghans to be policemen and the military, it’s taken 11 years already. You can train a monkey to ride a bicycle in less time.”

And you can train that monkey and have somehting to show for your efforts for probably far less money than what the failure in Afghanistan will end up costing us.

6) Another example that proves when Washington and the politicians that inhabit it try to do the right thing, they still almost always get it wrong. The IRS has spent a lot of time and effort to make it simple for Americans to file their tax returns and efficient for the IRS to process those returns via electronic filing. Simple and efficient, two words that anyone would want their government to be.

However, a Wall Street Journal report, of which a summary appeared in the January 25, 2103 issue of The Week magazine, describes how the Treasury Department has found out that as a result of electronic filing, the government has made identity theft so much easier and lucrative from a crime perspective.

In 2011, IRS had to deal with more than 1.1 million cases of tax return identify theft. In 2008, just three years prior to 2011 and prior to widespread use of electronic filing, there were only 51,700 cases of tax-related identity theft.

Thus, within three short years the Federal government was able to increase the frequency of identify theft crime in this area by 20 fold. And this “efficiency” came at a cost of the government paying out more than $5 billion in bogus tax refunds, money that is likely never to be seen again. It would all be so funny if it was not so tragic.

That should do it for this month. Four posts of Keystone Kop like performances from our elected officials and the bloated and inefficient government it operates.

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.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

How to Make $4 TRILLION Of National Debt Disappear Painlessly

Many times we have expressed our opinion that there is no greater danger facing our country and out democracy than the skyrocketing national debt that the Washington political class has imposed on the country. The national debt is currently over $16 TRILLION and climbing, with the political class showing no intention, ability, or intelligence on how to get the out-of-control spending under control.

The $16 TRILLION translates out to a per U.S. household debt of about $140,000 per U.S. household, i.e. every American household would have to write a check to the nation’s debt holders to pay off the national debt. And remember, the $16 TRILLION is the amount today, having grown about 50% since Obama took office. The $140,000 debt load is increasing everyday with no end to the increases in sight.

Another way to look at the problem is to do the calculation on a per citizen basis. On this basis, every American would have to write a check for almost $51,000 to pay off the debt. To make it even clearer, every baby born today already owes the Federal government debt holders over $50,000.

We have reviewed how this waste has arisen any number of times. The following posts are just a sampling to show how we have allowed our political class to just flush our wealth down the drain:

1) In the past week we have reviewed the latest annual wasteful spending as identified in Senator Tom Coburn’s “Wastebook 2012:”

http://www.loathemygovernment.blogspot.com/2012/10/wastebook-2012-wasteful-federal.html

http://www.loathemygovernment.blogspot.com/2012/10/wastebook-2012-part-2-wasteful.html

http://www.loathemygovernment.blogspot.com/2012/10/wastebook-2012-wasteful-government.html


2) Our most widely read blog post of all time reviewed how the U.S. Navy had built two Navy ships almost to completion for $300 million, decided that the ships were no longer needed, and then spent another $10 million to take the almost done, never used ships and turn them into scrap iron.

http://loathemygovernment.blogspot.com/2011/07/us-navy-ships-for-sale-cheap-never-used.html

3) This post reviewed a comprehensive, but probably not complete, list of idiotic government spending over the past ten years or so that wasted over $1.2 TRILLION worth of taxpayer wealth:

http://loathemygovernment.blogspot.com/2012/05/wasteful-government-spending-week.html

4) Earlier this year we did a comprehensive review of the fine work of many other organizations which had already done in depth analyses of our national debt crisis and how to solve it. Our conclusion was that it is not to hard to find $9 TRILLION worth of wasteful and criminal spending in the Federal budget. The details of that $9 TRILLION can be found at:

http://loathemygovernment.blogspot.com/2012/02/united-states-of-purple-presidency-plan.html

Coincidentally, the latest issue of Reason magazine contained an in depth interview of Senator Coburn which contained his conclusion that he also could take $9 TRILLION out of the ever rising government debt stream over the next ten years.

5) We also did a post of mea culpas by several politicians who finally and publicly acknowledged that, yes indeed, the politicians in Washington had rung up once unimaginable levels of debt and provided nothing in return to the taxpayers whose wealth funded that debt:

http://loathemygovernment.blogspot.com/2012/09/the-fiscal-state-of-country-even.html

Yes, it is a very dire and distressing situation. Our debt drains capital out of the private market, weakens the dollar across the country and the world, injects uncertainty into the financial markets and the minds of investors and business owners, and is often just idiotic wastes of money. And the most frustrating part, rational people should be able to fix the problem despite politics, as the solutions outlined in the above posts illustrate.

To those solutions today we add another approach to fixing the debt issue. Before we get into this solution, let me repeat a few facts about myself:

• Up until the November, 2010 midterm national elections I had never voted for a Republican for national office in my life (I am almost 60 years old)
• I have very rarely voted for a Republican for state or local office in my life.
• All of my data sources for my posts and analyses rarely, if ever, use Fox News or conservative sources as their basis.
• Thus, I am not Republican or conservative advocate by any traditional definition.

However, that does not mean I automatically knee jerk against anything with a Republican label attached to it, a condition that pervades much of our political dialog today. I recently came across an interesting non-conservative, non-Republican data source. The source purported to list out the proposed budget cuts a House of Representatives, Republican sponsored bill that has laid out a set of budget and spending cuts that would reduce the Federal government spending by about $2.5 TRILLION over the next ten years.

$2.5 TRILLION would certainly be a good START to getting Federal spending and waste under control and is certainly a much greater start than anything else Washington has come up with. These cuts do not include cuts to Social Security or the Department of Defense, opportunities will discuss after the listing of these $2.5 TRILLION in cuts. As you go through them keep the following thoughts in mind:

• Do you personally get any benefit out of these programs and projects even though you fund them through your taxes?
• Do any of these programs and projects provide any significant benefit to the needy in our society?
• Should the government even be in the business of operating and funding these programs and projects since they should be paid by those that use and benefit from the programs projects, e.g. corporate welfare, local programs and projects, etc.?
• Should a child being born today have to fund these programs and projects later in their lives?

I would hope that the answers to these questions, relative to the following proposed spending cuts, are an emphatic “no”:
* Corporation for Public Broadcasting Subsidy -- $445 million annual savings.

* Save America 's Treasures Program -- $25 million annual savings.

* International Fund for Ireland -- $17 million annual savings. Note: how about we divert these funds to an international fund for the American taxpayer?

* Legal Services Corporation -- $420 million annual savings.

* National Endowment for the Arts -- $167.5 million annual savings. Note: it should not be a basic government function to subsidize the arts, make those that enjoy the arts subsidize it.

* National Endowment for the Humanities -- $167.5 million annual savings.

* Hope VI Program -- $250 million annual savings.

* Amtrak Subsidies -- $1.565 billion annual savings. Note: the real solution is to find a way to either make the Amtrak program operationally cost neutral, sell the assets to a private firm who can make a profit, raise the rates to make the service at least financially a breakeven entity, or shut it down completely.

* Eliminate duplicating education programs -- H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 programs at a savings of $1.3 billion annually.

* U.S. Trade Development Agency -- $55 million annual savings.

* Woodrow Wilson Center Subsidy -- $20 million annual savings.

* Cut in half funding for Congressional printing and binding -- $47 million annual savings.

* John C. Stennis Center Subsidy -- $430,000 annual savings. Note: really, nearly half a million dollars a year to fund a tribute to a past politician?

* Community Development Fund -- $4.5 billion annual savings.

* Heritage Area Grants and Statutory Aid -- $24 million annual savings.

* Cut Federal Travel Budget in Half -- $7.5 billion annual savings. Note: no more Las Vegas conventions, seminars, and meetings for Federal employees would be a good starting point.

* Trim Federal Vehicle Budget by 20% -- $600 million annual savings. Note: A good place to start in this area would be to eliminate the program that gives Congressman funding to lease cars for their personal use.

* Essential Air Service -- $150 million annual savings.

* Technology Innovation Program -- $70 million annual savings.

* Manufacturing Extension Partnership (MEP) Program -- $125 million annual savings. Note: let American companies pay their own expenses, not the taxpayers.

* Department of Energy Grants to States for Weatherization -- $530 million annual savings.

* Beach Replenishment -- $95 million annual savings. Note: let the states and local government fund their own beach replenishments, they are the ones who will profit.

* New Starts Transit -- $2 billion annual savings.

* Exchange Programs for Alaska Natives, Native Hawaiians, and Their Historical Trading Partners in Massachusetts -- $9 million annual savings. Note: really, is there even such a thing as a “historical trading partners” relationship between Alaska and Massachusetts?

* Intercity and High Speed Rail Grants -- $2.5 billion annual savings. Note: since the government cannot profitably operate its current rail programs, it should not be getting into more rail programs until it proves it is capable of operating any rail-related entity at least to a breakeven level. Plus, the need for such high speed rail options is very, very weak as experiences around the country and world have proven.

* Title X Family Planning -- $318 million annual savings.

* Appalachian Regional Commission -- $76 million annual savings.

* Economic Development Administration -- $293 million annual savings.

* Programs under the National and Community Services Act -- $1.15 billion annual savings.

* Applied Research at Department of Energy -- $1.27 billion annual savings. Note: we would cut the entire Department of Energy, given their lack of success over the past several decades.

* Freedom CAR and Fuel Partnership -- $200 million annual savings.

* Energy Star Program -- $52 million annual savings.

*Economic Assistance to Egypt -- $250 million annually.

* U.S. Agency for International Development -- $1.39 billion annual savings.

* General Assistance to District of Columbia -- $210 million annual savings. Note: since my town does not receive Federal “general assistance,” DC should not receive any of our tax dollars either.

* Subsidy for Washington Metropolitan Area Transit Authority -- $150 million annual savings. Note: Let the Washington D.C. users of their Metro pay the entire cost of their Metro system, they use it, not us.

*Presidential Campaign Fund -- $775 million savings over ten years. Note: the political parties get enough donations from their own supporters, they should not get more from taxpayers.

* No funding for Federal office space acquisition -- $864 million annual savings.

* End prohibitions on competitive sourcing of government services. Note: no brainer, competitive bidding reduces cost and the opportunities for kickbacks and conflicts of interest.

* Repeal the Davis-Bacon Act -- More than $1 billion annually.

* IRS Direct Deposit: Require the IRS to deposit fees for some services it offers (such as processing payment plans for taxpayers) to the Treasury, instead of allowing it to remain as part of its budget -- $1.8 billion savings over ten years.

*Require collection of unpaid taxes by Federal employees -- $1 billion total savings. Note: how is this a not a no-brainer? Shouldn’t back taxes from Federal employees be garnished form their Federal paychecks?

* Prohibit taxpayer funded union activities by Federal employees -- $1.2 billion savings over ten years. Note: unions should pay their own fees, the American taxpayer should not be subsidizing union activities that will eventually cost taxpayers more money.

* Sell excess Federal properties the government does not make use of -- $15 billion total savings.

*Eliminate death gratuity for Members of Congress. Note: huh?

* Eliminate Mohair Subsidies -- $1 million annual savings.

*Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change -- $12.5 million annual savings.

* Eliminate Market Access Program -- $200 million annual savings. Note: again, make American companies pay their own expenses, not the taxpayer.

* USDA Sugar Program -- $14 million annual savings. Note: another corporate welfare subsidy that has to go.

* Subsidy to Organization for Economic Co-operation and Development (OECD) -- $93 million annual savings.

* Eliminate the National Organic Certification Cost-Share Program -- $56.2 million annual savings.

*Eliminate fund for Obama Care administrative costs-- $900 million savings. Note: a better action would be to eliminate the entire multi-TRILLION Obama Care lunacy and start over.

* Ready to Learn TV Program -- $27 million savings.

* HUD Ph.D. Program.

*TOTAL SAVINGS: $2.5 TRILLION over Ten Years

The President’s own budget reduction commission estimated that $100 billion could come out of the Department of Defense budget every year without endangering our nation’s security, e.g. do not make ships and incurring the cost just to dismantle them when they are almost completed. Thus, on top of this $2.5 TRILLION, we could add a ten year Defense Department savings of another $1 TRILLION.

If the Federal government followed the lead and suggestions laid out by many nonpartisan organizations regarding Social Security, there is probably at least another $500 billion or more that could be saved without significant or any pain to needy elderly Americans.

Three of those main suggestions were included in “Love My Country, Loathe My Government:”

1. Reduce the Social Security tax rate but uncap the maximum and apply that reduced tax rate to all forms of income, not just capped wages.
2. Raise the retirement age to 70, with a hardship exception.
3. Do not allow Social Security retirement checks to be sent to any retired American whose net wealth is over $3 million. Thus, folks like Trump, Buffet, Gates, etc. would not receive Social Security checks since they can live and survive quite comfortably without them.

Thus, with very little effort, and very little pain to most Americans, we have just reduced the national debt by about $4 TRILLION over the next ten years. Not bad but so much more is possible, upwards of at least $9 TRILLION is out there. Just need a little guts, intelligence and leadership out of Washington… which may be asking a lot.

But ask yourself. Thinking about all of the kids born in America today, is it really fair to stick them with the bill to pay the death gratuity for members of Congress, to pay for Congressional people to get free auto leases while in office, to write checks in their names and give those checks to America's biggest corporations, to subsidize today's Presidential elections that they cannot even vote in, etc. Is it really fair that a kid born today is born under an individual national debt burden of $50,000 or so? I think not.

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/

Fun With Math, Part 2 - How Bad Could Life Get With A $16 TRILLION National Debt?

Last week we dedicated a post to doing some simple math to try and get our hands around how big our $16 TRILLION national debt really is. We calculated how many times we could circle the globe if we laid 16 trillion one dollar bills end-to-end (60,000), how far out into space we could go if we laid those same bills end-to-end (back and forth to Mars about 2,100 times), etc. The other examples and subsequent discussion can be found at:

 http://www.loathemygovernment.blogspot.com/2012/09/fun-with-math-making-our-16-trillion.html.

Although having a debt of $16 TRILLION is really, really bad, saddling each American family with about $140,000 each, it could get much worse before it gets better. We started doing that calculation last week when we used Obama's White House budget website, which shows that the $16 TRILLION is expected to grow another $3.4 TRILLION by 2017 under Obama's current budget assumptions. This would bring the total national debt to just under a whopping $20 TRILLION.

However, Obama's budget calls for some unbelievably aggressive growth rates in government tax revenue in each of the next five years, growth rates that have never been sustained over a five year period in the history of the country. Thus, we found the $3.4 TRILLION increase to be unfounded and highly unlikely not to happen. Using the long term average growth rate of the U.S. economy, around 3%, we recalculated the next five years' worth of tax revenue, keeping Obama's government spending assumptions unchanged. This results in another $7 TRILLION being added to our burdensome national debt, not his overly optimistic $3.4 TRILLION increase.

An additional $7 TRILLION in national debt theoretically adds another $61,000 or so to each American household's share of the Federal government debt. This would bring the total household debt responsibility to $200,000, a level that would never be sustained.

But it gets worse. Fortunately, for the political class and the country, the U.S. Treasury is paying record low interest rates to finance this ongoing and growing debt load. This is caused by what I call the "queen of the pigs" theory.

As most people know, many, many countries in Europe are economic basket cases. Greece, Spain, Italy, Portugal, etc. are having severe economic problems and their own outsized national debt difficulties, which has made their sovereign debt riskier. Riskier investments make it harder to get investors to buy your bonds and those that do buy, want higher returns for their risk. This has pushed the interest for some European sovereign bonds up into the 6-7% range.

The Chinese economy is slowing, the Japanese economy is still in a twenty year funk, the U.S. stock market has been volatile and generally providing low returns, and the U.S. housing market is still in the ditch. With so much economic uncertainty in the world, many investors are looking to park their wealth and money somewhere safe in order to not lose their principle.

The best place to do that recently has been with U.S. Treasury bonds. Basic economic theory prevails: high demand for a limited supply keeps your costs down. In this case, the demand is high for T-bills, the supply is limited, which pushes down the interest rates.

Thus, while we do have historically high national debt levels, the cost to service that debt is historically low. If you go to the official White House budget website and its EXCEL spreadsheets, you will find that the interest expected to be paid (about $224 billion) on the expected 2012 year end national debt level (about $16.3 TRILLION) is about 1.4%. Not a bad interest rate to be paying for such a large debt load.

Let's look at Obama's own numbers. By 2017, our national debt should be about $20 TRILLION according to the White House website. The cost of servicing that debt load in 2017, again, according to Obama's numbers, would be about $565 billion. This comes out to an overall interest rate of about 2.9%. Thus, our debt cost under this base case scenario will go from about $224 billion a year at a 1.4% interest rate to $565 billion a year at a 2.9% interest rate. Thus, Obama is planning to more than double the amount of taxpayer wealth diverted solely to interest payments and the interest rate we pay to service that debt in the next five years.

Hang in there, we are almost there from a math perspective. If you take Obama's 2012 expected tax revenue estimate and divide it into his expected interest payment budget line for 2012 you will calculate a number of 9.1%, i.e. about nine percent of Federal tax revenues will be used to pay interest. By 2017, he expects that number to increase by about 50% with about 14.4% of 2017 tax revenues to be used to pay for interest payments. All bad trends.

However, that debt load will have to be constantly serviced over time as the existing bonds are sold and new bonds issued. The very real concern is that at some point in time, the rest of the world's economic opportunities begin to improve. Let's say that somehow Europe struggles through its economic problems and gets itself on solid financial footing. Investors will start to look to Europe to increase their return on their wealth.

Let's assume that China gets out of its doldrums and with its large population starts humming again, from an economic perspective. An improving U.S. housing market and stock market may be better options for investors than getting 1.4% or so on its investment in Treasury bonds.

Thus, as the world's economy improves, including our economy, and the rating agencies, investors, and the rest of the world get more and more antsy about our ever escalating debt load, there is an excellent chance that there will be fewer and fewer investors willing to give the U.S. Treasury Department some of their wealth to invest. This will require that Treasury interest rates increase just to get money for servicing the debt and our deficit spending. Thus, those 1.4% and 2.9%interest rates may very soon be a pipe dream.

Let's assume that we start to look like Greece and Spain by 2017, given our ever rising debt load. Our interest rate would certainly no longer be so low. Let's assume that the 2.9% rate in 2017 is a more Greece-like 6%. Simple math would say that we would no longer be paying $565 billion a year to service our debt. At 6%, a $20 TRILLION debt financing cost would increase to $1.2 TRILLION a year, more than double up from $565 billion.

Under this scenario over 30% of the Federal government's tax revenue would go solely to servicing the $20 TRILLION debt.

If we assume that we are up to about 120 million households by 2017, on average every American household would have to pay $10,000 each just in 2017 just to pay for the debt servicing. Obviously, more taxes would then have to be collected to cover Social Security, Medicare, Medicaid, defense spending, and every other government function. Scary, scary numbers.

But we can make it worse without stretching the bounds of reasonability. We do not believe that Obama's revenue numbers are realistic, they are much too high. Let's assume that government revenue only grows around 3% a year for the next five years. Then, by 2017, the Federal government revenue stream is not $3.92 TRILLION, it is closer to $2.86 TRILLION. In this scenario, about 42% of every Federal tax dollar goes to debt servicing.

The good news, which is really really bad news, is that this may never happen. We may see an economic collapse long before we get to these 2017 numbers. If we get another recession within the next five years, highly likely, we may have such a suppression in government tax revenue that it cannot service the debt, leading to default. In that situation, any saving bonds or Treasury bonds that any American holds could be worthless, leading to economic hardship for many American families but especially elderly Americans who may have counted on those government securities for their retirement.

Going back to Obama's numbers, a 2017 best case scenario says that expected government spending, $4.5 TRILLION would quickly be reduced by $612 billion or 13% in order for actual tax revenue to equal actual expenditures, no more financing spending and deficit spending. Thus, best case in a default is that every government function, every Social Security check, every Medicare payment, every Federal employee salary, etc. would immediately be reduced by 13%. And I believe that the 13% is best case, it would likely be far worse.

There would be no immediate change/improvement in our economic situation after a default since no one would be willing to lend the Federal government any money. We would have to live only on what the government could tax collect with no deficit spending.

And these calculations do not even bring into account the likelihood of high or even runaway inflation. The Federal Reserve has done two rounds of "quantitative easing," which is nothing more than printing money and injecting it into the financial systems in the hope that it will eventually lead to economic growth.

The first two rounds of easing resulting in the printing of $2.3 TRILLION, money that is sitting somewhere in the banking system waiting for the right opportunity to be invested. If the Fed is not careful, if that investing comes all at once, inflation is likely to skyrocket, putting further pressure on the Federal government, raising interest rates dramatically, raising interest rates, and crushing individual household budgets and savings.

Not a pretty sight. But this is the path we are on. You may dispute some of my numbers, assumptions and calculations since I am not a financial or economics expert. I am just doing some simple, logical math with official government statistics and forecasts.

But I doubt anyone would arrive at a substantially different overall conclusion using any other approach. Using Obama's own numbers, we are heading for a fiscal meltdown that could happen within just a few years, taking our economic well being and our democracy with it. Using more realistic numbers than the official Federal government.White House view results in a much worse economic scenario.

Study Germany in the 1920s and Argentina a few decades ago to see what an economic meltdown and default looks like. Observe what happens to Greece and Spain in the next six months or so to see what is in store for us.

But there might still be time to get our outrageous Federal government spending habits under control. Tomorrow we will go through a detailed plan that will remove $9 TRILLION from our debt load. And best of all, it does that without raising taxes and with minimal impact to most American families.

It can be done. The question is whether it can be done by those sitting in the White House and Congress today. Their lack of courage track record says they cannot and thus, they need to all be removed from office on November 6, 2012 if we are to have any chance of avoiding what I have laid out above.

Note: for those of you who want to tinker with the Obama numbers we used above, go to the following web page for the original numbers and forecasts:

http://www.whitehouse.gov/omb/budget/Historicals

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