The 1962 Mets. The 1976 Buccaneers. The 2011 Obama Administration: Mr. President, Time For Your Resignation

If our political class was a baseball team, they would be the hapless 1962 New York Mets who set a record for most losses in a season and were famous for screwing up in unique ways. If they were a football team, they would be the 1976 Tampa Bay Buccaneers who lost the first 26 games they ever played. In both of these cases, and other cases of athletic team incompetence, you cannot fire the entire team at once, it takes time to move out the current players and replace them with new, and hopefully better players.

However, teams can fire their manager or head coach just about any time for leading a team of incompetents. Given the incompetence in Washington and the fact that we cannot change out most of the team/politicians until November, 2012, it is a time to change out the manager. The following letter was recently emailed to my Democratic Senator, Senator Bill Nelson of Florida. It calls for the resignation of head coach Barack Obama, based on the facts listed in the letter and the additional reasons listed after the letter.

***************
September 15, 2011

Senator Nelson:


I had never voted for a Republican for national office in my life (I am 58) until last fall's midterm elections so I am not a die hard Republican or Tea Partier. However, as a concerned American I have had enough. Obama Care that will cause me to lose my health care insurance along with tens of millions of other Americans. Sky high national debt. Ineffective economic policies. A President who acts more like a Prince than the leader of the free world once you take into consideration his multitudes of vacations, international travel, golf rounds, and NCAA basketball picks. A Federal government who is more into oppression than freedom, just ask Boeing and Gibson Guitar.

Now we have a solar energy panel company in California going belly up and half a billion dollars of taxpayer money going down the drain with it because a Democratic donor is involved and this administration did not do any due diligence as far as the financial stability of this company. What part of the Federal government is not investigating this disgrace? At last count it included multiple Senate and House committees, the FBI, the Treasury Department, and lord who knows who else.

Let's not forget the atrociously bungled "Fast and Furious" gun running, law breaking effort from the ATF that has resulted in Mexican drug cartels getting their hands on weapons with monstrous firepower, with the help of the Federal government, firepower that we know has helped kill dozens of Mexicans and a U.S. Border Patrol agent.

And now I understand that the White House has been trying to get a Pentagon general to falsely change his Congressional testimony in order to benefit a significant political donor and supporter of the President, and that Congress is about to get serious about this breach of integrity also.

Enough is enough. As my Senate representative, I am asking you to support the resignation of this entire administration immediately so that we can begin cleaning up the messes of our economy, political patronage, and the blatant waste of taxpayer money that this Presidency has resulted in. Failure to ask for the resignation will certainly lump you into the disasters listed above as a silent co-conspirator and force me to work for your defeat in 2012.

The country cannot stand any more of these shenanigans and waste, all of which diminish the Constitution and our freedom. I hope you agree, for the sake of the country and your re-election bid.

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

Not included in the letter, due to space limitations, are the following reasons why the President should do the honorable thing and resign from office, based purely on the ineffectiveness of his administration and policies and the divisiveness he has wrought on the country:

• Gas prices are significantly higher than when the President took office.
• Unemployment is significantly higher than when the President took office.
• This administration has set records for deficit spending, with annual deficits averaging about a TRILLION dollars a year, deficits that were established in cahoots with a Democratically controlled Congress
• These deficits are orders of magnitudes larger than any other deficit by any other President by any measure.
• Consumer confidence by any measure is at its lowest point in decades.
• Small business confidence by any measure is at its lowest point in decades.
• Every economic policy or program of this administration has been a failure, from the economic stimulus program to Cash For Clunkers to first time home buyer rebate program, initiatives that illustrate the small time, non-strategic thinking and economic insights of this administration.
• North Korea and Iran are three years closer to being nuclear weapon armed nations.
• The Middle East peace process is still in tatters.
• This President involved the country in another Middle East war, Libya, illegally deploying U.S. troops in combat without Congressional approval.
• Not only has the President not gotten our troops out of Iraq, he is seriously considering extending their presence in the country beyond the agreed to withdrawal date.
• There is apparently no effective strategy in place to successfully end our military involvement in Afghanistan.
• There is apparently no effective strategy in place to stabilize nuclear armed Pakistan.
• Most of our public schools continue to under educate our kids, we continue to not have a comprehensive national energy policy, our borders still leak, we have no effective and compassionate policy to deal with illegal immigration, and our health care costs continue escalating far beyond the inflation rate.
• Obama Care is an unfolding disaster that will add to the national debt, will see the termination of existing health care insurance for tens of millions of Americans, will increase taxes on all businesses which will drain economic vitality and job expansion in the country, and will not address or solve the root causes of our increasing health care costs. 
• Recent reports indicate the Federal program to support unemployment insurance programs has been defrauded of $19 billion over the past year or so, more than 10% of its budget wasted for no good reason.
• Annual taxpayer money lost to fraud and criminal activity within the Social Security, Medicare, and Medicaid programs continues to be well over $100 billion a year.
• Housing prices continue to decline while college and other costs continue to rise.
• This Presidential administration has often demonstrated a perverted view of our Constitutional government as it assumes it can ignore or not enforce laws it does not like, ignore judicial rulings that it does not agree with, or rule by decree when Congress does not pass the legislation it wants passed.
• Government functions continue to be less than stellar in the performance of their duties: dozens of SEC staffers found to be chronic Internet porn surfers, Interior Department employees who contributed to the Gulf oil spill crisis because of lax oversight, Energy Department employees who gave out billions of taxpayer dollars to companies that have already gone out of business, etc.

Just for these reasons, President Obama should resign immediately. It is highly unlikely that this administration's track record on these issues will change in a positive way any time soon. His fixation, his addiction on revving up votes for his re-election at the expense of governing the nation will ensure that the above issues are not addressed or resolved for at least 14 months, 14 months that the nation cannot afford to wait for.

However, there are three other, deeper reasons for this President to resign:

1) When President Obama took office, his approval ratings were sky high. The nation, as a whole, was anxious for hope and change, and were likely willing followers of his lead. His party had control of the House of Representatives, and filibuster proof control of the Senate. He had a historical opportunity to actually make things different, and hopefully, better for America.

But he blew it. He was more interested in the pomp and pageantry of being President than actually being President. He set a record for international travel in the first year of his Presidency. He filmed a TV commercial for the George Lopez show. He hosted numerous championship athletic teams at White House photo ops. He worked diligently on his NCAA March Madness basketball picks. He appeared on numerous television talk shows.

Before he knew it, he had blown his chance at history. His popularity soured, he lost the filibuster cushion in the Senate, and then his party lost control of the House. For this reason alone, blowing a rare historical opportunity to make fundamental change, justifies this call for his resignation.

2) A true leader unites, a true leader steps out and makes the right decisions rather than the politically palatable decisions, a true leader is a statesman and not just another Chicago politician.

Over the past three years, American citizens who have dared to have a legitimate and honest difference of opinion with this President's policies and plans have been branded as racists, Ku Klux Klan members, knuckle dragging Neanderthals, a__h___s, gerbils, terrorists, barbarians, other such vile names. They have been called unpatriotic and told to go to hell. They have had a union leader state that he was going to "take these sons of bitches out," where the bitches are anyone opposed to President Obama's policies.

During all of the name calling and mudslinging, this President has remained silent and allowed his staff, his supporters, and his party to to defame and insult Americans for voicing an opinion. This is unacceptable. It has made the country as divided as it ever was, all because this President would prefer to play politics and breed hate than be a leader and be representative of ALL Americans.

3) No one forced the President to run for this office. No one made him accept the role of President of the United States. He should have known going into his term that things were not good. Regardless of how much one hates President Bush, the situation in January, 2009 was what it was. By taking the oath of Presidency, Obama accepted that situation on his inauguration day. He did so with open eyes, no deception.

To use a poker analogy, President Obama was dealt the hand he was dealt when he took the oath of President. Nothing was going to change that situation or that poker hand at that point in time. However, a true leader, heck a mature adult, would not constantly bemoan the hand he was dealt but would look forward to make the best of that hand and ensure that subsequent hands were optimized for the best chance of winning.

This President never did that. For three years, whenever anything went wrong, it was the Bush administration's fault, it was never the Obama administration's fault. It was never the the fault of the Democrats that controlled Congress for four straight years. It was never forward looking leadership, it was always backward looking blame.

In fact, I truly believe that this administration is not capable of looking forward for solutions. Their habit, their culture of looking to place blame elsewhere now makes them dysfunction relative to resolving issues. Their track record indicates that this dysfunction exists, giving their track record of resolving no major issues facing Americans today

An athletic cliche goes as follows: "You are what your record is." The record of this administration is 9% unemployment, almost $15 TRILLION in national debt, annual TRILLION dollar deficits, a divided America, historic opportunities missed, a failed foreign policy all over the world, unabated government program fraud and hundreds of billions in lost taxpayer wealth, failed economic policies, rampant political patronage, a disastrous health care reform law, and so much more.

But most important, this administration is a leadership void on every imaginable dimension. It is a void that will likely not change any time soon, given its ability to blame others and duck its own responsibility. In these times of crisis, America is looking for intelligent, decisive, and inclusive leadership. We do not have time to waste another year under this current cloud of inertia. President Obama, your record is what your record is. Time to step aside and give others a chance to lift the cloud, it is the only patriotic thing to do.



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

Social Security: Ponzi Scheme Defined, President Obama's Candid Comment, Horrific Financial Returns

Governor Rick Perry of Texas is trying to be the Republican candidate for President 2012. He has recently came under fire and criticism for stating that the Social Security system in this country is a Ponzi scheme. He has been criticized by politicians in both major political parties and a variety of different journalists. The question, therefore, is the following: given the Social Security structure, is it a Ponzi Scheme?


Before answering that question, consider a random set of Ponzi scheme definitions that pop up when you Google "Ponzi scheme:"

1. An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.
2. A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors.
3. A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time.
4. A Ponzi scheme is a type of securities fraud where the promoter makes some sort of false or misleading statement about an investment (often including a guaranteed high rate of return) and pays off older investors with newer investor’s monies. Eventually, when the promoter can’t find any new investors, the scheme collapses.
5. A dishonest and usually illegal business in which many people are persuaded to invest their money and the money of later investors is used to pay the people who invested first.
6. A form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

These are different views of what a Ponzi scheme are but most have some common features:

1. Later investors' money is used to pay earlier investors.
2. Money is not invested or earned, just shuffled from later investors to early investors.
3. Dishonesty, fraudulent, misleading, and other negative adjectives are used to describe the process.

Now, what is Social Security:

1. Today's workers are forced to give up some of their earnings in order to pay today's retirees, all for a promise that some Americans in the future will be forced to give up their earners to pay today's workers when they retire. In other words, later investors', today's workers, money is used to pay earlier investors, today's retirees.
2. Social Security taxes collected today are not placed in an investment account of any type, the money is either paid out directly to today's retirees and if there is any money left over, it is given to the political class, via the Treasury Department, to fund today's government functions. In other words, today's Social Security taxes are not invested, just shuffled from current workers to current retirees.
3. Citizens are told that there are $2.7 TRILLION worth of money in the Social Security trust fund (it isn't, see President Obama's comments below), citizens are told that Social Security is a great retirement plan (it isn't, see the analysis below), and citizens are given the impression, via their Social Security account statements that they have an account with actual money/wealth in it (they don't). Sounds misleading, fraudulent, and dishonest to me.

Looks to me that Governor Perry got it more right than wrong when describing the Social Security process as a Ponzi scheme. Such schemes are illegal unless they are run by the government.

Let's move on to some candid comments made by President Obama. These comments were made in the middle of the debt ceiling negotiations when it looked like the negotiations might fail, resulting in a possible shutdown of the Federal government. In his typical class warfare mode, the President stated that unless he got his way in the debt ceiling negotiations, the government might shutdown and Social Security recipients might not get their checks. Consider the first two paragraphs from an August, 2011 CBS News online article:
 
President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.


But wait a minute!!!! Didn't Joe Biden recently say that Social Security was solvent with $2.7 TRILLION in the trust fund? Didn't Harry Reid state a few months ago that he was not going to support any effort on changing Social Security since the trust fund had over $2 TRILLION sitting in it? If that is the case, how come there would be no money to pay out to current retirees almost immediately after the government shut down? Why couldn't they just temporarily tap that $2.7 TRILLION trust fund?

Why couldn't they? Because the coffers would be empty. Remember, this is a Ponzi scheme, money coming in from today's workers (later investors in Ponzi terminology) is immediately paid out to early investors (early investors in Ponzi terminology). That $2.7 TRILLION in the trust fund is nothing more than an accounting entry, it is not a true wealth entry. It consists solely of accounting/paper/near worthless IOUs that the Treasury promised the Social Security process over the decades. That true wealth was paid out to previous retirees or the political class long ago.

The coffers would actually be empty. 2011 is the first year when Social Security will be in a negative cash position, i.e. Social Security taxes collected this year will be less than what is paid out in benefits. Obama appears to understand the fragility of the system.

It is quite worrisome that Biden and Reid do not understand the very basics of the Social Security system because if they do not understand the fragility, they are unlikely to work on fixing the root causes of the crisis before it is too late. Or maybe they do understand the core problems but are just being deceptive about them, hoping that we will not realize how bad the situation really is. In either case, do not expect any comprehensive or elegant solutions to a quickly growing financial crisis.

Finally, it is difficult to agree on what is the biggest Social Security lie, the lie that Social Security is financially solvent and has $2.7 TRILLION worth of wealth lying around waiting for us of us to retire or the lie that the Social Security system is a great retirement option. Earlier this year the Urban Institute published an analysis which showed that on average, the typical American will pay more into the Social Security system than they will receive in retirement checks over their lifetime, hardly a good retirement option.

In 1998, the Heritage Foundation did another analysis which showed that an average American couple living earning an average American household income would get $430,000 in Social Security benefits in their lifetimes. However, if they had been allowed to keep their money and invest it in a tax deferred investment account, investing half of their funds in T-Bills and half in a stocks, they would have $975,000 available at retirement, more than twice what they could expect from Social Security. Another verification that maybe Social Security is not a great investment vehicle.

As a numbers person, I decided to check out these two analyses relative to my own situation. I went to my own Social Security "account" statement and built the following simple model:

• From my account statement I could see how much money I had donated to the system each year during my working life.
• I doubled that amount to account for the money also sent to the Social Security Administration in my name by my employers.
• I assumed that I was able to keep both pots of money and place them in a tax deferred IRA-like account that was invested in an S&P 500 index mutual fund.
• I found the annual investment returns of the S&P each year over the past forty four years, the length of time I have been working and being taxed by Social Security.
• I assumed that going forward from 2011 that I moved all of the accumulated investments and contributions to a conservative investment fund earning 4% return a year, a typical investment strategy as you get closer to retirement.
• When I turned 65 I would start drawing down money out of the account for living purposes.

The results are pretty depressing and stark:

• If I withdrew twice the amount of money from this tax deferred account that Social Security says it will pay me at age 65, I would never deplete the account, regardless of how long I lived.
• If I withdrew three times the amount of money from this tax deferred account that Social Security says it will pay me at age 65, I would deplete the account when I reached the age of 97, assuming I live that long.
• As a further example, if I had invested all of that money in Treasury Bills over the past forty four years, I could withdrawal three times the amount of money from that account until I was 94 years old.

Another positive asset of this approach, if it had ever become reality, was that I would control all of my assets. I would not be subject to the whims and changes that the political class can legally impose on Social Security. Yes, even though Social Security can tell you what you are likely to get back form them when you retire, that can be changed at anytime by Congress, the President, and the political class, just another negative of this process.

Thus, no matter how or who cuts the data and what type of analysis is done, it is pretty apparent to anyone with an understanding of basic math that this is a lousy retirement plan. Unfortunately, most people in the Washington political class apparently do not have a basic understanding of math.

No matter how interesting it is to do these what-if analyses, we are stuck with today's reality. This reality includes a dwindling number of workers to support a growing number of retirees, a cash flow situation that is negative and contributing to our national debt, and a political class that is either in denial or in ignorance when it comes to understanding the Social Security problems and processes.

Which leaves us with the need to fix the current system using the three steps outlined in "Love My Country, Loathe My Government:"

1. Gradually raise the retirement age to 70 years to account for the changing demographics and provide some financial breathing room to the financials, but include a hardship exemption for Americans that cannot afford to wait until age 70.
2. Prohibit Social Security retirement checks to Americans with a net worth value over $3 million since they really do not need a monthly Social Security check to live comfortably.
3. Uncap the maximum amount of income that can be subjected to Social Security tax, reduce the Social Security tax rate, and expand the types of income that can be subjected to the tax in order to have every American pay the same percentage of their incomes into the process.

The first step in fixing the problem is recognizing reality: this is a Ponzi scheme that is rapidly approaching its collapse point, it does not have TRILLIONs of dollars of wealth sitting around waiting to be paid out to future retirees, the system is in a negative cash flow situation today, and it is really a horrific retirement investment option.

Until our political class recognizes this reality and has the courage to tell us the truth and implement the necessary changes, we can be sure that Social Security will face the same fate of every other Ponzi scheme in history: collapse.


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

Random Questions For The American Political Class - I Was Just Wondering

According to news reports, most of the politicians that left Washington last month for their five week vacation held very few town hall style meetings to reconnect with their constituents. Could it be that they did  not WANT to reconnect with their constituents, given the extremely low ratings the American political class garners in all major opinion polls?

In the absence of face-to-face meetings with our elected officials, I thought it would be a public service if we could lay out the questions many Americans would have asked their elected officials if they had decided to meet with their voters:

- I was just wondering... if the American taxpayer had to bail out the banks because they were too big to fail, how come the top four banks in the country are even bigger now than they were before the Great Recession? According to September 12, 2011 issue of Business Week, before the Great Recession, the top four banks in the country accounted for 45.2% of all bank assets in the country. Now, the top four banks now account for 56.8% of all bank assets in the country.

Did all of the political class action (bailouts, TARP, Federal Reserve quantitative easings, financial reform legislation, etc.) have the exact opposite of what was intended,. i.e. too big too fail got bigger?

- I was just wondering...whose great idea was it to give a California solar energy manufacturer more than half a billion dollars in Federal loan guarantees without doing due diligence, resulting in  that company going bankrupt a very short time after the political class wrote them a check for half a billion dollars?

- I was just wondering... given how stupid the failed and fatal "Fast and Furious" gun running sting operation seems to have been, was there another reason behind such a clumsily conceived and haphazardly run program? It stretches the boundary of believability that the ATF actually thought it could track weapons once they were in the hands of the Mexican drug cartels, there must have been another reason for such a program, yes or no?

- I was just wondering... explain to me again how Obama Care will reduce the number of uninsured Americans in this country when AT&T, Verizon, John Deere, Caterpillar, McDonalds and other U.S. companies have said there is a very good chance they would drop their corporate health care insurance programs for their employees and retirees.

Why would they do that? Because it is less expensive to drop their corporate health insurance programs and pay the small fine laid out in Obama Care than to continue their programs. Won't tens of millions of Americans, who work for these companies, lose their insurance coverage, wiping out any gains in health insurance coverage elsewhere resulting from Obama Care? Are you people so ignorant of reality to not understand basic business finance?

- I was just wondering... in the middle of the debt ceiling crisis and negotiations, President Obama said that Social Security checks might not go out because the "coffers might be empty." Does that mean the there really is no $2.7 TRILLION trust fund set aside to cover future Social Security payments?

If there really was "real" wealth in the Social Security trust fund, as opposed to a bunch of near worthless Treasury IOUs, why wouldn't the President just have done a small withdrawal from the trust fund to cover the short term shortfall of Social Security taxes if the government ended up being temporarily shut down because of a failed debt ceiling negotiation?

- I was just wondering... why has the Securities And Exchange Commission "been systematically destroying documents related to Wall Street investigations for 17 years," according to an article by William D. Cohan, writing for Bloomberg, and appearing in the September 9, 2011 issue of The Week magazine?  Did these documents actually include allegations of criminal activity and fraud against such entities as Bernie Madoff, Goldman Sachs, and others? 

Is Mr. Cohan correct in his assertion that this is just one big, cozy revolving door relationship between the SEC and Wall Street where misdoings are swept aside and documents destroyed? With a budget of $1 billion a year, are the American taxpayers getting their money's worth of financial integrity oversight from the SEC? Probably not if you ask the Madoff victims.

- I was just wondering... is it true that we do not know the whole story about the Libyan military activities, as laid out by Steven Erlanger of the new York Times? Is it actually true that NATO is so incompetent that the United States had to do the hard work of militarily wiping out the Libyan air defenses, that the French had to withdrawal their only nuclear powered aircraft carrier fo repairs in the middle of the fighting, that Italy withdrew its aircraft carrier in the middle of the fighting to save money, and that the United States "provided intelligence, refueling, and more precision bombing than Paris or London want to acknowledge?"

How much did this whole initiative cost the American taxpayer, especially if the United States was supposed to be just a back-up to NATO, a role that seems to not be correct?

- I was just wondering... speaking of Libya, according to a report in the September 9, 2011 issue of The Week magazine, French, British, and yes, Chinese oil companies are rushing into Libya now, as the fighting winds down, in an attempt to leverage the vast oil reserves of the country. Does it seem fair that after the United States did much of the work in defeating Qaddafi but other nations will reap the financial rewards? Any chance they will give some of that oil money back to us to cover our military expenses?

- I was just wondering... a recent article that appeared in Wired magazine and was capsulized in the August 12, 2011 issue of The Week magazine, reported that the poorest fifth of Americans spend 42% of their annual incomes on transportation needs while middle income Americans spend an average of only 22%. Thus, wouldn't it be a better idea to fix and expand local mass transportation systems within local urban areas to alleviate this cost burden on the poorest one fifth than to spend billions and billions of dollars to build out a high speed train system that is likely to take years to complete, if ever, and will have minimal impact on these less affluent American citizens?

- I was just wondering... according to Peter Ferrara, writing for Forbes, in early 2009 the United States and Canadian unemployment rates were both about 8%. After Obama implemented his $830 billion of wasteful spending that was originally billed as the economic stimulus package, the United States unemployment rate got as high a 9.2% and has hovered around 9% for what seems forever.

At the same time, Canada decided to cut taxes and regulations while providing people with "genuine incentives to produce, save, invest, and grow," reducing that country's unemployment rate down to 7.4% today. Thus, tell me again why President Obama wants to do the same tired stimulus spending strategy again, as outlined in his jobs speech, a strategy that raised our nation's unemployment rate the last time it was used. Why wouldn't he take a page from Canada's economic playbook which actually seemed to work?

- I was just wondering... according to an article in the August 15, 2011 issue of Business Week, the Federal government gave Hawaii Superferry $140 million in loan guarantees to cover the cost of building two passenger ferries. Unfortunately, the company filed for bankruptcy, taking itself and the taxpayers' money down the drain with it.

Thus, the question:  are the same government employees that lost over $500  million with the solar energy company discussed above the same ones that lost $140 million of taxpayer money with these two ferry ships? If so, maybe these employees need to be reassigned to another job that does not involve any contact with taxpayer funds. Better yet, maybe they should be fired for incompetency.

The bigger question is: why is the government boat loan operation still allowed to exist? According to the article, this program was suspended in 1987 after it lend out over $2 billion to 129 companies that defaulted before paying back the loans. Not to let a bad thing die, the program was resurrected in 1993, after which it promptly lost $801 million on 15 loans that went belly up.

But, it gets even worse. The article states that this shipbuilder program guaranteed $798 million in Federal loans last year and another $712 million is being considered this year, for a total of $1.51 billion. The head of the program says that loan guarantees of previous years will create 8,000 jobs. If $1.51 billion in loan guarantees can "create" 8,000 jobs, is the cost of $188,750 per job really worthwhile and efficient?

- I was just wondering... has Warren Buffet written that check yet and sent it to the Federal government for all that tax money he says he should have paid over the years but wasn't required to?

From an article in the July 25, 2011 issue of Business Week, we now know that Congressmen Tim Walz of Minnesota and Spencer Bachus of Alabama two members of Congress that regularly donate extra tax money, beyond what they are legally required to pay, from their salaries to the Federal government. Given that both of these gentlemen are highly likely to be worth significantly less than Mr. Buffet, I was just curious to see if Mr. Buffet has put his wallet where his mouth is.

- I was just wondering.. according to an interview of Alan Greenspan that appeared on the Moneynews website on July 27, 2011, Mr. Greenspan claimed that the Federal government should have let some of the big banks fail back in 2008 and that after all of the bank activities by the Federal government, Congress and the Fed, banks "can now sit on their Federal reserve money and earn interest at no risk, they have less incentive to lend it and the U.S. economy is stagnating." Would you agree with either, both, or neither of Mr. Greenspan's assertions?

- I was just wondering... given the above issues, and dozens of others just like them, when are you people in the political class finally going to get around to resolving anything? Just wondering, because I am wondering how great term limits for all Federal political positions is starting to look, given your incompetence at everything except wasting taxpayer wealth.

The Political Class: When It Comes To The Post Office, A Day Late and $5.5 Billion Short

If you had not heard, the U.S. Postal Service is in very dire shape as laid out in the September 6, 2011 Associated Press article:

• Postmaster General Patrick Donahue recently warned Congress that the Postal Service is on the brink of financial default.
• If Congress does not act by September 30, the Postal Service will default on a Congressionally mandated $5.5 billion payment to the U.S. Treasury.
• If no Congressional action is taken, about a year from now the Post Office could run out of money to pay its operating expenses.
• The Postal Service lost more than $8 billion last year despite having cut 110,000 jobs and closed smaller Post Office locations.

Other reports have reported that email and other electronic communications options have steadily reduced the amount of first class mail over the past several years. This has placed financial burdens on the Postal Service which is faced with a declining revenue stream but high fixed costs of physical post office locations, vehicles that go out everyday regardless of how much mail needs to be delivered, and employee unions that severely limit layoffs.

Although there are long term structural and market head winds for the Postal Service, the current short term crisis is really a Congressionally instigated problem. In 2006, Congress mandated that the Postal Service create a fund to start prefunding the medical benefits of employees for the many decades out.

In other words, Congress wanted large upfront payments from the Postal Service's annual operations budgets to fund the future medical benefits of employees that have not even been hired yet, or possibly not even born yet. This fund would start funding employee medical benefits starting in 2017 and be the sole source of money for those benefits.

However, Congress severely missed the forecast of how much money could be put away by the Postal Service in light of its declining revenue and declining market size. Also, according to the article, this is the only Federal government agency that is required to prefund its medical costs decades into the future.

Two observations on this whole mess, one complimentary and one critical. From a complimentary perspective, it appears that some people in the Post Service actually understand the root causes of the agency's problems. Postmaster General Patrick Donahoe understands that he has a huge fixed cost problem with a permanently declining revenue stream.

He and others in the Postal Service want to shut down 3,700 more Post Office locations, further cut the workforce by 220,000 employees, eliminate Saturday mail delivery, withdraw from the Federal retirement system and set up and manage its own retirement systems, get back $6.9 billion from the Federal government that it claims it overpaid into the current government retirement systems, and adjust union contracts for future flexibility in staffing. All good, solid, and appropriate actions in light of the current situation. Best of luck to Mr. Donahoe.

Of course, the critical comments, as always, are reserved for our politicians. Consider some quotes and opinions from members of Congress that were quoted in the article:

• Senator Joe Lieberman - "We must act quickly. The U.S. Postal Service is not an 18th century relic, it is a 21st century national asset, but times are changing rapidly now and so, too, must the Post Office."
• Senator Susan Collins: She is quoted as stating that "the Postal Service supports a $1.1 trillion mailing industry employing more than 8 million people in direct mail, periodicals, catalogs, financial services, and other businesses."
• Senator Tom Carper: he stated that Congress needs to work on areas where agreement can be found.

Carper and Collins have introduced Postal Service reform legislation in the Senate and several other reform plans have been introduced in the House of Representatives. However, how fast can a Senate reform bill be approved, how fast can a House bill be approved, how fast can these two bill be reconciled, how fast can the President sign the reform bill, and how fast can the changes in a final bill be implemented? Given the speed, or lack of speed, track record of the political class, it does not appear like any reform legislation will be forthcoming any time in the next few weeks, not in time to avoid default on the required payment.

Let's review. According to our politicians, the Postal Service is a national asset, it supports a major part of the nation's advertising industry, and Congress needs to do something but is only at the start of the reform legislative process. So, why are we only a few weeks away from a Postal service default?

The political class should have known about this looming crisis long ago. It should not have been a surprise to them that Postal Service mail volumes were in a permanent state of decline. It should not have been a surprise to them that Postal Service revenues were in a permanent state of decline. It should not have been a surprise to them that legislation they passed in 2006 was going to overwhelm Postal Service operating revenues. They should have known but we are still only weeks away from a default.

Given that the Postal Service is a "national asset," it never should have come to this point of crisis and panic. But it did, as does just about any problem that confronts the political class. Failing public schools, lost war on drugs, subprime financial crisis, escalating health care costs, terrorist attacks, etc., problems are never anticipated in time, problems' root causes are never understood, and problems are never solved, or are solved in a panicky last moment in a suboptimal way, usually wasting taxpayer money in the process.

Step 34 from "Love My Country, Loath My Government" would address this type of institutional incompetence. Given the mess of an impending Postal Service default, Congressional members in both the House and Senate would be removed from any committee or subcommittee post they sit on that had Postal Service oversight and responsibility, according to Step 34. That is the only way to get their attention and force them to actually be accountable for their Congressional behavior.

One final thought. If our politicians are so concerned about saving this national asset, why did they spend five summer weeks and the entire month of August on vacation? I guess it is not such a national asset to our politicians if their vacation time is more important than this national asset.

Lesson learned: if you have anything to mail, do it soon before this national asset is a day late and $5.5 billion short.

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.



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