About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Tuesday, April 22, 2014

Budget Balancing Exercise Shows Need For Mindset Change

"There's nothing in the Constitution that says the federal government has anything to do with most of the stuff we do."  SC Congressman James Clyburn (Case in point - the fiscal year 2013 federal budget breakdown – see table @ right below except for Defense, Interest, & Congressional Salaries.)
 
"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."  James Madison writing in 1794 disapprovingly of a $15,000 appropriation for French refugees who fled from insurrection in San Domingo to Baltimore & Philadelphia
 
"We must not permit our respect for the dead or our sympathy for the living to lead us into an act of injustice to the balance of the living. I will not attempt to prove that Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right to appropriate a dollar of the public money."  Tennessee Congressman Davy Crockett speaking on the House Floor in 1827 regarding a $10,000 relief bill for the widow of a naval officer that had been proposed & was expected to pass unanimously.  Following Davy's words the measure failed with only a few votes in support of it. Colonel Crockett, one of the poorest members of the House at that time, was the only House member to contribute substantially to a private charitable fund for the widow.
 
 click on images to enlarge
 
In July 1994 former NJ Congressman Dick Zimmer invited Carol & me to attend a "Debt Busters" program @ Brookdale Community College in Lincroft NJ that the congressman was sponsoring in cooperation with the Concord Coalition (co-founders former Senators Tsongas & Rudman).  The purpose of the program was for the attendees to personally tackle the deficit to see how they would bring it under control.  We broke off into small working groups armed with facts & figures & then all of the groups met to compare notes concerning how to write a balanced federal budget.
 
It was a very intensive session so I have had some personal experience with the questions from the last post regarding how readers of RTE would participate in such an assignment today.
 
I must say that in the twenty years since Congressman Zimmer's program the only things that have changed are that we are deeper in debt & of course that much closer to it really meaning something detrimental to our freedom & prosperity that we all feel. 
 
With regard to the last post our SC businessman observed from the top right table ". . . you could zero out either military, social security or health care and still not balance the budget," while TLG was the only responder who pointed out that Defense was the only line item from the top right table that was constitutional in his or her opinion – I point out you have to add interest & unfortunately congressional salaries (see Compensation Clause – Article I, Section 6, Claus 1 & 27th Amendment) also.  TLG wrote "What line items to cut from the chart? Ask the Founding Fathers - they would say all of them except Defense."
 
We know from the partial sequester cuts of the past two years that there will be squealing no matter what or how little federal government spending is reduced – even when the reductions are from projected increases & not really cuts @ all.  For fiscal year 2013 you could cut everything except Defense, Social Security, Health Care, Interest, & Congressional Salaries & just miss balance by a smidgen (popular word). 
 
Steve Moore writes "The Founders did not create a Department of Commerce, a Department of Education, or a Department of Housing & Urban Development.  This was no oversight: they simply never imagined that government would take an active role in such activities" so constitutionally you could cut many of the above categories to obtain significant deficit reduction even if you didn't eliminate the entire deficit in one year.  The enumerated powers of Congress to spend money are defined in the Constitution under Article I, Section 8.
 
We should take a more gradual approach to bring Social Security & Medicare under control because virtually all of our current & soon to be senior citizens are way too dependent on these two programs to eliminate them cold turkey. 
 
Indexing the Social Security initial benefit amount to the CPI instead of the wage index will result in preserving the purchasing power of all contributions made over the years & will eliminate the government guaranteeing a real positive return on Social Security taxes withheld for the average person – a guarantee no other investor has.
 
With regard to Medicare, if today's seniors 55 and over will dare great enough to understand premium support will not affect them & people under 55 will start to adapt to the new system we have a chance to solve the current seemingly intractable Medicare entitlement problem that by itself will overwhelm America if nothing is done to correct it.
 
Sound-money policies & the reduction of the size of government & its claims on earned income are what fuels economic growth when coupled with the enactment of the FairTax – a tax plan that does not tax our productivity like the income tax does but rather our consumption.   It doesn't tax what goes into the economy but rather what comes out of it.  The FairTax reverses the idea that our earnings first belong to the government & then to us after withholding.  Earnings belong first to the citizen - this turns every consumer into a concerned taxpaying stake holder.  If you work, save, or invest you do not pay the FairTax – only the final consumer or user pays the FairTax meaning essentially it taxes retail sales & government consumption. 
 
The FairTax, along with the other measures described above, not only offers a solution to our economic problems that when implemented will bring fairness & prosperity through growth back to our country & its citizens but constitutes the mindset change needed to turn the country around.  When you find a politician talking this language back him to the hilt.
 
The changes in mindset in the country throughout the years are illustrated in the quotes @ the very top of this post.  From our founding until the Civil War our elected leaders followed the principles of the Madison & Crockett quotes – this was the time America was in the liberty to abundance stage of our history.  The Clyburn quote is representative of the thinking that started over eighty years ago under FDR & except for a brief portion of President Reagan's terms in office not only continues to this day but is expanding – this is the apathy to dependence stage.  Judge for yourself how close we are to the dependence back into bondage final stage.
 
BO is trying his hardest to put the final nail in the country's coffin by promoting class warfare & envy, income inequality, a false war on women by Republicans, minimum wage hikes, & extending unemployment benefits – all programs designed to keep people losers while looking to bring successful people down simultaneously through raising tax rates by whatever method he can.  A wealth tax or outright confiscation of bank accounts & IRAs like was done in Argentina has been endorsed by Pelosi specifically in November 2008 right after BO's first election – it was a little too much too soon then, but how about now?
 
BO loves to twist taxpayer statistics by talking about millionaires & billionaires not paying their fair shares.  See cartoon below for his nonsensical position that far too many people believe.
 
click on image to enlarge
 
The National Taxpayers Union has reported for years that 50% of income earners don't pay any income taxes & another 25% don't pay enough that the issue is important to them.  This leaves 25% of income earners who may care about income tax reform.  For many years people have barely been able to wait for their income tax refunds every spring – forgetting that the refunds are really their money they could have had access to all year long – in essence they made interest free loans.  But this is old hat – people have now convinced themselves that since they have paid Social Security & Medicare payroll taxes over their working lifetimes, without wanting to know how much of the costs of their benefits are subsidized by the government, that they deserve these entitlements.  In fact I recently pointed out in a post that the level of sophistication is so low in this regard that even many people who take the initiative to subscribe to the Heritage Foundation newsletter take offense @ the Heritage writer who correctly called Social Security & Medicare entitlements.  None of this is good breeding ground for passage of the FairTax either.
 
The top left graph shows a similar top-heavy profile as the income tax for the distribution of the total federal tax burden. 
 
The income tax, permitted by the Sixteenth Amendment in 1913, was the first major tax that was not levied on a proportional or uniform basis as required by the original Constitution.  Accordingly it is ripe for the class warfare penalties whereby higher earners pay for welfare benefits for lower earners putting all the incentives opposite to where they were during our founding.  As late as 1930 federal spending was equal to an insignificant 3% of our national output.  Today federal spending totals trillions of dollars – most of which is in violation of the Constitution as described above.  A hundred & one years later you can see that the income tax has been one of the pillars of the destructive path the country is on & even with its abuses the government still cannot balance the federal budget.
 

Wednesday, April 16, 2014

Restoring A Bedrock Financial Foundation For America

click on graphic to enlarge
 
Now that income tax filing day has come & gone many people wonder where their tax dollars went.  The above table provides the breakdown detailing the allocation of federal revenue received in fiscal year 2013 & in so doing gives people a chance to see how they would reduce the annual budget deficit themselves – I'm sure Paul Ryan would appreciate the help. 
 
The fiscal year 2013 budget deficit was $680 billion dollars – it is portrayed on the above breakdown as $24.50 for every $100 paid in federal taxes (income, payroll, corporate, & excise).  See note @ bottom of breakdown.
 
What line items would you cut or would you raise taxes to reduce the $24.50 in borrowing costs for every $100 paid?  For those who choose the raising of taxes method please be aware that Professor Friedman liked to say that "to spend is to tax" meaning that in the case of borrowing it has to be repaid plus interest from tax revenue sooner or later.  By preferring to raise taxes to lower borrowing costs you are just deciding to tax sooner rather than later.
 
Also with regard to the interest line item - it is projected to double to 12% in the next ten years after interest rates return to more normal levels from the Fed's artificially manipulated interest rates of the past many years.  This projection provides a clear picture of the Fed giving up its independence to work as an agency of the Treasury.
 
My own method of deficit reduction has been listed on RTE several times over the years.  In summary, there are four points that will bring America's financial house in order & accordingly will restore the prosperity that has been cruelly ripped from us by BO - 1) repeal ObamaCare & implement a premium support plan for Medicare based on Ryan's initial proposal that turns the cost curve down for generations to come while preserving current programs for people 55 & over, 2) follow Susan Lee's solution for controlling Social Security's growth by reducing the initial benefit for people under 55 so that the initial benefit is calculated based on the CPI rate instead of the wage rate as it is now, 3) begin Ken Blackwell's "cut, cap, & balance" plan that cuts projected borrowing in half next year (not 10 years from now) & caps spending @ 18% of GDP (it has averaged over 22% since 2009), & 4) enact the FairTax.
 
Now it is obvious that none of the above points will be done until after the 2016 presidential election, if then.  But the midterm election gives us a chance to elect congressmen & senators who we can work with to build a financial foundation for America & start a change in mindset that embraces such measures.  If this takes hold we may even have a chance to defeat the statists in 2016.  The solutions are there – all we need are the will & sense to follow through.
 
In the meantime click on Tax Freedom Day to see how to determine the date the nation as a whole has earned enough money to pay its tax bill (federal, state, & local) for the year.  Tax Freedom Day in 2014 is April 21 meaning that the average American draws the first dollar he could use for himself on April 22; when you add the effects of federal borrowing the date becomes May 6.  The link also shows how the FairTax will reduce these days to something more manageable – my target is 12:01 AM on January 1 of each year.
 

Friday, April 11, 2014

Ken Blackwell's Solution To Democrat's Give-Away Programs

click on graphs to enlarge
 
When I looked @ the above left bar graph the first thing that jumped out @ me was the reminder that ObamaCare does not pertain to people over 64 years old – people 65 & older are covered by another government subsidized program - Medicare.  I thought this gives ObamaCare a chance to succeed @ least demographically because not including seniors 65 & older means that people well into their 80s & 90s – the ones most likely to spend more on healthcare the last two years of their lives than they spend during the rest of their lives combined – will not have their large healthcare expenses overwhelm the ObamaCare program. 
 
Now we all know that the problem with ObamaCare is not with the statistics that are in its favor as mentioned above but rather that it continues the long overreach of government that interferes & intrudes into our lives & in the process by design robs us of our liberty & future prosperity all so that BO & a handful of elites in his inner circle gain more power & control over the wealth in America.  It is as clear as the nose on your face if you take the time to look for BO's real agenda.
 
Last week BO trotted out his April Fools Day message, appropriately with Biden in plain sight just about three feet behind him, that 7.1 million people (updated by Sebelius on April 10 to 7.5 million) had signed up for ObamaCare by the original open enrollment deadline of March 31 thereby exceeding the original target of 7 million sign ups by March 31 – see top right graph.  Of course how valid & just what these numbers mean must be determined.  The question is what have these people signed up for?  The Republicans will have an issue if the premiums & deductibles are very high or out of reach for most people, & there is a lack of access to preferred doctors & hospitals that is as terrible as has been documented on RTE - otherwise ObamaCare is a winner for Democrats.
 
BTW, as a refresher from a post on RTE from September 30, 2007 – "A good percentage of the current push for universal healthcare comes from the notion that we have 47 million people in America who don't have healthcare insurance. The Kaiser Family Foundation, a left leaning non-profit frequently quoted by the media, puts the number of uninsured Americans who do not qualify for current government programs and make less than $50,000 a year between 13.9 million and 8.2 million. Ten million of the remaining approximate 36 million are not U.S. citizens @ all (they predominantly use the very costly emergency room treatments @ our expense for free medical care), 8.3 million uninsured people make between $50,000 and $74,999 per year, 8.74 million make more than $75,000 a year, & 9 million did, in fact, have health coverage through Medicare. So out of the so-called 47 million uninsured Americans, 10 million aren't American, 9 million are insured, & 17 million are young and healthy & choose not to have insurance. If the federal government wants to get into this why not just have a program to help the 8.2 million to 13.9 million people who really could use the help?"
 
Republicans are counting on the destructive features of ObamaCare to win the day for them in November so that they hold the House & take control of the Senate.  But BO continues to counter by extending the dates through executive orders of the worst features of ObamaCare past the mid-term election – & many Americans are so disengaged that they will not understand what is happening until it affects them personally – I know one person who had never heard of ObamaCare until recently.  BO postponed the employer mandate until January 1, 2015 – this will also put off employers' incentive to cancel healthcare insurance coverage – such cancellations will put tens of millions on the healthcare exchanges which is why the employer mandate was postponed to begin with.  This particular delay will also mask the inevitable higher healthcare insurance premiums for 2015 until after the election's extremely high stakes.
 
BO & the Democrats are not just delaying compliance dates with ObamaCare waiting for Republicans to take pot shots.  They also are revving up the most despicable program imaginable pandering to core base voters with their so-called fairness agenda. 
 
In this regard, on April 7, the Democrat controlled Senate voted 59 to 38 for a five month restoration of unemployment benefits retroactive to December 28 for the long term unemployed – six Republicans [Ayotte (NH), Collins (ME), Heller (NV), Kirk (IL), Murkowski (AK), & Portman (OH)] joined every Democrat who voted [not voting Landrieu (LA) & McCaskill (MO)] for this bill which undoes another portion of the two year budget agreement made in December between Ryan & Murray. 
 
The Senate also plans to push another populist winner of equal pay for women [April 8 was designated Equal Pay Day & on April 9 the Paycheck Fairness Act failed a procedural vote when all Republicans & Independent King of ME voted against the measure – Coburn (OK), Cornyn (TX), & Cruz (TX) did not vote] & increases in the minimum wage to $10.10 an hour along with every other destructive equality of outcome idea they can think of.
 
On April 10 the Republican House passed the Ryan budget for fiscal year 2015 (starting October 2014) by the barest of margins (219 to 205) thereby providing fodder for Democrats to claim Republicans have a lack of compassion for people as well as alienation for citizens like you & me who know the Ryan budget includes the farfetched repeal of ObamaCare while incorporating budget savings of $700 billion in Medicare & $1 trillion in revenues generated under ObamaCare that are bogus – this is where we left off with Ryan as the failed VP candidate in 2012.
 
So with Democrats campaigning for every government give-away program known to politicians, is just going against ObamaCare going to be enough for Republicans to turn the tide? Click here to hear Ken Blackwell offer the best anti-statist solution that should have been followed all along.