Tuesday, November 15, 2011

Par for the course

I listened, along with the rest of the nation, in shock and horror as the news about events at Penn State University unfolded in the news. At every level, from the janitor, to the trainers, to the coaching staff, and all the way to the top levels, including the athletic director and president of a large, state university, faced with the choice between interceding on behalf of children who were being molested or covering it up to avoid upsetting the apple cart, people opted to protect themselves and their situation rather than protect the vulnerable and innocent children.

We were all shocked, disappointed, and maybe even disillusioned to discover that leaders in positions of trust and responsibility were so callous. How could a trainer walk out of the locker room, allowing the rape of a child to continue uninterrupted? There is not a jury in the country who would have convicted that trainer if he had smashed the skull of the rapist then and there. How, then, could he wait until the next day to mention it to anyone? How could agree to close ranks and not report the rape to the police, allowing untold other victims to endure the same violation? How could the coach and athletic director allow these things to continue for years?

Our culture would not accept that, right? We would rise up in outrage and demand justice, wouldn't we?

The verdict is in, years ago. The answer is no, we would turn a blind eye on such an abdication of responsibility if it allowed us to continue our lives undisturbed.

Ten years ago, Life Dynamics investigated the way Planned Parenthood and the National Abortion Federation comply with the laws requiring them to report cases when they are made aware that a child is being sexually exploited by an adult. In more than 90% of the cases, these organizations, using tax dollars, chose to turn a blind eye to the plight of the victim, collect the $400 fee for the abortion, and allow the exploitation to continue. In many cases they actually facilitated the exploitation.

I would encourage you to read the report in the link above. I'm not going into all of the details here. But in short, Life Dynamics investigators called hundreds of abortion clinics operated by Planned Parenthood and the National Abortion Federation, the two largest abortion providers in the country, posing as a 13-year-old girl who believes that she might be pregnant by her 22-year-old boyfriend. In all 50 states, such a relationship is illegal, and health care providers are required by law to report such criminal abuse to law enforcement or child protective agency. In more than 90% of the cases, abortion providers indicated that they were willing to hide the crime and protect the criminal by performing an abortion without notifying the child's parents. In many cases they advised the child to lie about her age or the age of her boyfriend, to give a false address so that her parents could not be notified, or even to cross state lines to evade laws requiring judicial approval in such cases. In more than 90% of cases, they agreed to provide contraceptives to the child, facilitating the continued exploitation of a child by an adult. In many cases they agreed to allow the adult boyfriend to pick up the contraceptives.

Can someone tell me how this is different from the coaching staff at Penn State who allowed a vile child molester to continue raping and exploiting children? The main difference is that Penn State is not a key constituency of the Democrat Party. When this report was released, where was the outrage in the media? Where was the angry outcry from the public? Where was the self-righteous indignation from the same talking heads who have been all over the Penn State case from the beginning? Why didn't heads roll at Planned Parenthood? Where were the investigations, arrests, and prosecutions? Did you even hear about the report? As a society, we closed our eyes, plugged our ears, turned away, and went back to sleep.

Sad to say, the failure to protect victims at Penn State was not the exception . It was par for the course. We need to do better. As Tim Henderson says, the key is to love people and go beyond the minimum required by law. This is a function of families and churches and neighbors and communities, not of government. Indeed, Penn State and Planned Parenthood are both government supported organizations, and looking to the source of the problem for the solution is an exercise in futility. The solution is found only in God's transforming work in the hearts of individuals through faith in Jesus Christ.

Monday, October 24, 2011

Questions for Warren Buffett

Do you remember when reporters used to ask tough, probing questions in an effort to get to the bottom of the issue of the day, rather than simply regurgitating the talking points they are fed? Today, however, the media unquestioningly repeats the President’s mantra as established fact, never bothering to raise the glaring questions to the source of those claims, Warren Buffet.

There are so many questions which need to be asked about Buffett’s claim that his secretary pays a higher tax rate than he does.

Mr. Buffet, who exactly is your secretary and what percentage of her income does she pay in Federal income taxes? What would her tax bill be if she hired your team of accountants and tax attorneys to fight the IRS on her behalf? How is your secretary’s income tax equivalent to your capital gains taxes paid on growth of money you have already paid income taxes on?

Mr. Buffett, if you believe that you should pay more in taxes, why did you spend the last decade fighting to avoid paying a billion dollars in back taxes?

Mr. Buffett, exactly how much do you feel you should pay in taxes, and why have you not voluntarily contributed that amount to the Federal Treasury? They do accept donations.

More important than probing into the untruthfulness and hypocrisy of Warren Buffett’s claim is a query into the flawed philosophical assumptions behind it.

Mr. Buffett, does a nation become more prosperous because of bigger government or more private sector investment?

Mr. Buffett, who is responsible for creating more jobs, you or your secretary? Who is responsible for creating more wealth, you or your secretary? Can you name one poor person who has brought prosperity to more people than you have? Can you name one government entitlement program which has produced more innovation, more goods and services increasing the mean standard of living more than you have by your investments in American corporations?

Mr. Buffett, your claim that the rich should pay higher taxes is being used by the President to support raising taxes to pay for his stimulus bill. Does the economy benefit more from you investing your money in growing, profitable businesses or from the government taking your money and distributing it to failing companies such as Solyndra? Do the companies you invest your own money in create more jobs than Solyndra? Which are the better criteria to determine which companies will most effectively use the money they receive to create jobs and boost the economy: a solid business model producing profitability and growth potential, or political cronyism?

Mr. Buffett, if the government confiscated all of your wealth and distributed it equally to every American citizen, giving every American roughly $127, how many jobs would we create with our $127?

Mr. Buffett, you are famous for earning a consistently high return on investment. What is the return on investment of the Federal Government?

Mr. Buffett, if the government confiscated 100% of your income from last year, would the deficit be reduced by even one one-hundredth of a percent?

Mr. Buffett, you have pledged to give 99 percent of your wealth to charity. Why do you think that money confiscated from you by the government will do more good for mankind than if you gave it to a charity of your choice?

Mr. Buffett, in a free market economy where buying and selling transactions are voluntary, the only way to make a profit is to produce goods or services which are worth more to the buyer than the price for which you sell them. Thus earning a higher income indicates that you have produced more value for more people than someone who did not earn as much. Why should producing more value be punished by higher taxes?

Mr. Buffett, did you invest your money in Solyndra? Why not? If you determined that Solyndra was not a good investment, why would you want the government to take your money and give it to Solyndra?

Mr. Buffett, the President's first stimulus bill spent nearly a trillion dollars and cost $412,500 per job created, and two years later, unemployment is higher than it was before the stimulus. Would you invest in a company which produced that kind of return on investment?

If not, why would you want to pay more taxes for the wasteful Federal Government to squander?

Saturday, October 22, 2011

Occupy a job!

How does the 1% get to be the 1%? Does being the top 1% make them evil and greedy? Does it mean that they owe a debt to society? Do they need to "give back" some of what they have "taken?"

In a free market, most of us are not born into the 1%, but we all have the opportunity to use our minds, to work hard, to learn, grow, and innovate, and become part of the 1%. I find that to be a very noble goal. In a free market, all transactions are voluntary trades. A voluntary trade is, by definition, win-win. Both parties are trading for something they value more than what they are giving up. When I buy something, I am choosing one product out of millions of options, and one seller out of many, and I am freely choosing to trade my money, representing the product of my labor, for that product. That means I believe that the product is worth more to me than the work I put into earning that money. If someone is in the top 1% of income, it means that he has produced more value than the 99%. He doesn't need to "give back to society". The act of honestly earning money benefits society more than it benefits you.

Liberals get all wound up over how much corporate executives earn. What is important to remember is that all of the transactions up and down the chain which lead to that executive's pay are voluntary. If the board of directors think that they are getting their money's worth, what is that to me? It is their money, not mine.

But the fact is we have not had a free market economy for a very long time. Everything changes when the government subverts the free market. Some people are a part of the 1% because they play the system and benefit from government tampering rather than earning their way by trading value for value. Bailouts, stimulus, corporate welfare, Halliburton, Freddie Mack, Fannie Mae, Government Motors, Solyndra, etc. People call it "crony capitalism", but that is an oxymoron. Cronyism is not capitalism at all. In capitalism, decisions are based on economic self-interest. Cronyism means that decisions are based on political pull. If the government mandates that everyone must buy a certain product, then the seller no longer has to trade value for value. When government bails out a failed bank, every taxpayer becomes a stakeholder in that company. If they pay their CEO a huge bonus, we have reason to be upset about that. When government gives huge amounts of money to special interests, that is not wealth created by the recipient.

Occupy Wall Street would be right to object to people who get rich off of government corruption, but their demands indicate that ending government redistribution of wealth is not their objective. They are not demanding that top-down command and control economics stop. Instead they are demanding their piece of the pie. They want in on the action. They are going cap in hand looking for some more of the largesse to come their way.

As part of the 53% of American's who pay Federal income taxes, I object to Occupy Wall Street claiming to speak for me, with their mantra of "We are the 99%". Perhaps if they were to Occupy a Job they would get further.

Monday, May 02, 2011


Osama bin Laden, the terrorist responsible for the murder of thousands of American civilians, was killed yesterday in a raid by an American special forces team.

There is plenty of credit to go around. Osama's death was the result of years of effort by countless people.

First of all, the President gets credit. Barack Obama appears to have been involved in overseeing the details of the execution of the raid, from the time when the CIA obtained intelligence reports that Osama may be in that compound, up until the operation was completed. Without Obama's actions, Osama would be alive today.

I've already heard some people asking why Obama ordered Osama to be killed and his body dumped into the sea. Is he really dead? If he is not, he'll be on al Jazeera in June holding the front page of the New York Times with the headline "Obama says Osama Killed". Obama knows that this would be the result, so he can't claim credit if OBL is still alive. And we are far better off with OBL dead rather than captured, with Obama's base demanding that he face civilian trial in America, where a judge is likely to throw the case out for some technicality. And he is better off dumped in the ocean where no nut jobs of any variety can make a monument out of his grave. In all, I think that Obama handled the case very well.

But to an even greater extent, the American military gets credit. The exceptional men and women of our armed services have been working for years to bring bin Laden to justice, putting themselves at risk, dodging bullets, stepping over IEDs, spending months and years apart from their family to serve their nation so ably. To each one of you, thank you. We have not forgotten that last month, Obama was going to stop paying you to make sure that we continue subsidizing abortion.

Several specific individuals in the military deserve special recognition.

Team 6, the Navy Seals special operations team which actually went into the Bin Laden compound and killed this evil man showed amazing skill and preparation by carrying out their mission with such precision and effectiveness. I salute you.

The men and women working at Gitmo also deserve our gratitude. They have been much maligned, but without the intelligence they extracted from the heads of the terrorists in American custody, this victory could not have been won. Liberals want to take credit for catching Bin Laden, but without waterboarding, it would not have happened. Senator Dick Durbin said that the "enhanced interrogation" which Obama ended on his second day in office was responsible for producing the lead which led the CIA to discover the courier who led them to the OBL compound. And they did it at Gitmo, the detention center which Obama ordered to be closed down as his first executive order. Thank you Gitmo.

Next, the CIA and military intelligence officers deserve credit. The breakthrough which made it possible to bring justice to OBL was essentially accomplished by intelligence gathering. Our intelligence agents are among the best in the world, and they did their job tirelessly and with excellence.

Just as Osama would be alive without the actions of President Obama, he would be alive today without the actions of President Bush. For seven years after 9/11 Bush laid the groundwork for yesterday's raid, establishing a military presence in Afghanistan and Pakistan, and implementing the policies which Obama continued and which ultimately resulted in Osama's death. No one has called this "Bush's War" today. The Obama administration who have blamed their own dismal failures on Bush for two solid years didn't give a bit of credit to Bush for his part in accomplishing this mission. If Bush had shown the same level of resolve and leadership which Obama has demonstrated in Libya, Osama would never be brought to justice. Not by Obama. Not by anyone.

In the end, it was an American bullet fired from an American firearm by an American soldier who sent an evil terrorist to bow his knee before Jesus. All of those things are detested by liberals, but without them, Osama bin Laden would still be living high in northern Pakistan, and Obama would be watching his approval ratings drop as Americans face higher unemployment, soaring gas prices, record deficits, and ever-increasing government interference in their lives.

Thursday, April 21, 2011


Last night our family celebrated the Passover Seder Dinner, the dinner Jesus ate with his disciples just before he was arrested and crucified. The Passover is a remembrance of God delivering His people from slavery in Egypt in the time of Moses, and a look forward to God's plan of redemption for the World.

God brought ten plagues on Egypt, each one demonstrating His power over the Egyptian pantheon of gods. He showed the god of the Nile to be powerless by turning the Nile to blood. He mocked the Egyptian frog god by bringing hoards of frogs to cover everything. Pharaoh's magicians claimed that they also could conjure frogs, but they were powerless to do what was really needed, which was to make the frogs go away. God revealed the impotence of the gods of cattle, livestock, and grain by wiping out the herds and crops of the Egyptians. Egypt's supreme god, Ra, the sun god was shown to be worthless when God brought darkness on the entire land.

Passover focuses on the final plague, when God told each Hebrew family to kill a perfect, spotless lamb and spread it's blood on the doorposts of their houses. They were given detailed instructions of what to eat that night, and how to eat it. They ate unleavened bread because they did not have time to wait for the bread to rise, and they ate with their shoes on, robe on, and walking stick ready, expecting to leave in a great hurry. That night, God struck down the first-born son in every Egyptian house, but when he came to a house with the lamb's blood on the door, he passed over that house. Thus the name, Passover.

Why was the blood on the doorposts necessary? God certainly knew who the Hebrews were. They lived in one particular part of town, and the Egyptians lived in another. So the idea that it was for God's information doesn't hold up. Killing the lamb and putting its blood on the doorposts does not make a lot of sense. There was no practical reason for it. God commanded it as an act of faith, requiring that the people place their trust in God to deliver them.

While this observance was filled with rich meaning regarding what God has done in the past, it also pointed forward to what God would do in the future. The blood of Jesus, the perfect, sinless lamb would be shed to free God's people from slavery to sin through faith.

Hundreds of years before Jesus birth, Isaiah made the connection between the Messiah and the Passover lamb in Isaiah 53:

He was oppressed and afflicted,
yet he did not open his mouth;
he was led like a lamb to the slaughter,
and as a sheep before its shearers is silent,
so he did not open his mouth.
(Isaiah 53:7)

This section is a lengthy Messianic prophecy, in which Isaiah refers to the coming Messiah as "The Servant". A few verses earlier he described Jesus death:

But he was pierced for our transgressions,
he was crushed for our iniquities;
the punishment that brought us peace was on him,
and by his wounds we are healed.
(Isaiah 53:5)

John the Baptist identified Jesus as the Passover lamb, saying "Look, the Lamb of God, who takes away the sin of the world!" (John 1:29)

There are many interesting components of the Seder meal. Before the meal is observed, all yeast must be removed from the house. Throughout the Bible, yeast is used to represent sin, because the smallest amount of yeast can affect an entire loaf of bread. There is a ritual washing of hands before the meal, representing a spiritual cleansing. Four cups of wine represent something different. The cup about which Jesus said "This is my blood shed for you" was the cup of Redemption, which was proceeded by praying "I will redeem you with a demonstration of my power". Each part of the meal has significance. Bitter herbs dipped in salt water represent the bitterness of slavery and the tears cried while in bondage. This applies equally well to physical slavery in Egypt or spiritual slavery to sin. I strongly encourage you to attend a Seder dinner next year. We went to one at Christ Chapel in Fort Worth presented by a Messianic Jew, David Teitelbaum, but I am sure that there are many others.

I find it remarkable that centuries before Jesus birth, God laid out his plan of redemption in both prophesy and in the Jewish holidays and temple rituals, and then he brought it about exactly as he said that he would. It gives us confidence to know that when Jesus says he will return to defeat Satan, judge the earth, and take his own to live eternally in his presence, it is certainly going to happen. You can count on it.

I will leave you with one thing I learned last night which was completely new to me. One part of the Seder dinner tradition which emerged in the first century involves placing three pieces of matzo, or unleavened bread, in a bag. At a certain point in the Seder, the middle matzo is removed from the bag, broken in half, and wrapped in a linen cloth. It is then hidden, and later in the meal, the children find it and remove it from the wrapping. This piece of unleavened bread is call the afikoman, which comes from a Greek word meaning "I have come". In Judaism, the number three is usually associated with the three patriarchs, Abraham, Isaac, and Jacob. But what is the significance of breaking Isaac in half, wrapping him up, and finding him later? In Christianity, the number three is often associated with the Trinity: Father, Son, and Holy Spirit. The middle piece of matzo would then be the Son, or Jesus. When Jesus broken the bread and said "This is my body given for you" he identified himself as the one who the Seder points to. Like that bread, he was broken, wrapped in a burial cloth, and hidden for three days. But as the bread suggests, the story was not over. He arose from the dead and lives today as Savior and Lord, the only way for a person to be made right with God. As Isaiah said:

After he has suffered,
he will see the light of life and be satisfied;
by his knowledge my righteous servant will justify many,
and he will bear their iniquities.
Therefore I will give him a portion among the great,
and he will divide the spoils with the strong,
because he poured out his life unto death,
and was numbered with the transgressors.
For he bore the sin of many,
and made intercession for the transgressors.
(Isaiah 53:11-12)

Monday, April 18, 2011

An open letter to Speaker John Boehner

Representative Boehner,

Last November American taxpayers sent a strong message at the ballot box. We stated in no uncertain terms that the reckless spending and massive deficits of the past two years are unacceptable and that a dramatic change in direction is needed. As a result of this tidal wave, you were swept into the position of Speaker of the House. We expect you to make something of this opportunity, or to step aside and let someone else seize the opportunity.

There were three key points where Republicans had significant leverage to convince the unwilling Democrats to adopt a new direction of fiscal sanity. The first was the establishment of a budget for the remainder of the 2011 year. The Democrats sidestepped their duty to pass a budget, meaning that only with the approval of the new Republican majority in the House could government operations continue. This allowed you to set the conditions. But long before the situation came to a head, you stated that you would not allow the government to shut down. You essentially gave up your position of strength. Is it any surprise that instead of the $100 billion in cuts you promised in the campaign, you settled for $38 billion? What is even more disappointing is that the $38 billion are not real cuts, and the deal you brokered only reduces actual spending by less than one billion dollars. That is not even one percent of what you promised. That is unacceptable.

Your excuses are even less acceptable. You said that the House of Representatives is "One half of one third of the government." However, the House is where every single dollar of spending authorization originates. If anything is funded by the Federal Government, it is because Republicans in the House of Representatives voted to authorize it. In this budget deal, either you played us or you got played. I'd really like to know which it was.

The next leverage point is the debt ceiling. Within a very few months we will reach the level of indebtedness which Congress has authorized. Democrat fearmongering about the dire consequences of not raising the debt ceiling have already begun, with the intention of intimidating Republicans into backing down from their demands for effective spending controls to be in place before they authorize more debt. If reaching the debt ceiling would truly be such a great calamity, Democrats should be highly motivated to implement those spending controls. Unfortunately, you are already on record as having caved once, so they will expect you to do it again. If that is your intention, please step down now and allow someone with a spine to take your place.

On the other hand, if you are ready to do what you were sent by your boss to do, an excellent way to go about this would be to attach an increase in the debt ceiling to the Ryan budget. Pass it and make it clear that the Senate and President must either approve the whole thing or figure out how to get by without any new borrowing. However you decide to do it, spending cuts measured in billions are not adequate. It will require trillions to even put a dent in the debt crisis.

Please decide quickly. If you waste this opportunity, there may not be another.


Your Boss

Monday, April 04, 2011

What it means to you

Representative Paul Ryan made news over the weekend by saying that they are going to propose a budget which cuts $4 trillion over the next ten years.

The is the first proposal which actually makes a significant dent in the nation's out of control debt crisis. Let's take a look at what has been proposed up until now. I find that dealing with the numbers involved in Federal budgets causes people's eyes to glaze over. It is hard to get a perspective on what the numbers actually mean, so I'm going to use per capita figures to help you to understand what the national debt means to you.

In February, the Federal Government added $223 billion to the national debt. The population of America is roughly 307 million, so for that one month alone, every man, woman, and child in America owes $726.38. You will be taxed for the rest of your life to pay interest on that $726.38. Your kids will be taxed for the rest of their lives to pay the interest on their $726.38, and as an added bonus, when you die or retire, they will have to pay interest on your $726.38 as well. If you are married, it is quite likely that the $1,452.76 debt piled onto you and your spouse by your government was more than your house payment. This year, the debt for every man, woman, and child will be increased by $5,211. A family of four could buy a very nice new car for that sum.

Going back to a macro scale, the debt is growing close to a tipping point. When the national debt exceeds GDP, a fatal debt spiral can be induced. At that point, interest on the debt can grow faster than the economy grows, meaning that even if we suddenly stop deficit spending altogether, the debt will grow out of control until the Treasury is forced to default on the debt. As of last month, the National Debt was 97% of America's GDP, and we are adding to the debt at an alarming rate, so this is a very real an imminent threat.

Politicians have been proposing cuts to the budget to address the crisis.

Last year BO suggested cutting $100 million from the budget. This would reduce each person's addition to the debt by 32 cents. Instead of going $5,211 further into debt, you would only go $5,210.68 further into debt. Quite an accomplishment, huh? He counts on people thinking that $100 million is a lot of money. If it was in your piggy bank it would be a lot, but the Federal Government spends $100 million in less than 15 minutes.

More recently, House Republicans have been negotiating with BO and the Democrats over spending cuts. The Democrats wanted a Continuing Resolution which reduces spending by $6 billion. That is $19.54 per person, reducing the debt placed on you this year from $5211 to $5191. While $19.54 is better than 32 cents, it is still not enough to avoid a debt spiral.

The Republicans didn't do much better. Their big alternative is a CR which reduces spending by $61 billion. That is $198.70 per person, reducing your new debt to $5012. Again, that is better than the alternative, but not nearly enough.

The problem with all of these proposals is that they only consider discretionary spending, which only accounts for 19% of the budget. To get back to a sustainable budget, it is essential to reform the big entitlement programs, Social Security, Medicare, and Medicaid. That is where Ryan is different from the crowd. Politically it could be costly, as any attempt to touch these entitlements is demagogued as draconian and heartless. But how much worse would it be to allow the economy to collapse and those programs to disappear altogether as America defaults on its debts and becomes unable to meet its obligations or borrow money at any cost?

Ryan's proposal represents an annual cut of $1,302 per person. That is finally enough to be on the scale needed to make a difference. I'm not sure that the political will exists yet to make such a bold cut, and I do expect that there will be a lot of work to get the proposal into an agreeable form, but I am heartened to see someone honestly saying what will be necessary to avoid America following Greece. America's fall would be much more devastating because unlike Greece, there is no one strong enough to prop America up.

Thursday, March 31, 2011

Coming to a head

Last year, facing massive losses in the midterm election, Democrats in Congress faced a dilemma, a true no-win situation. Congress is responsible for passing an annual budget which funds the operation of the government. These Democrats faced an even more painful thrashing in the polls if they passed a budget which did not deal with the massive budget deficit and the exploding debt which it is causing. This thrashing would come from a segment of the population I will refer to as the fiscally sane, primarily made up of the 51% of the population who pay taxes. On the other hand, if Congress took the steps necessary to reign in spending and curb the deficit, they would incur the wrath of their base, the statist left who rely on ever-larger and more intrusive government for their power and livelihood.

Faced with these options, the Democrats did the courageous thing: nothing. They opted to not take a stand at all, and to not pass a budget, an unprecedented negligence of duty. That is why the United States Government is operating without a budget today, a state of affairs so foolhardy that you wouldn't ever run your own household that way.

What is the result? In February, the Federal Government ran a deficit of $223 billion, the largest monthly deficit ever, for any country, for anything on earth. In fact, the deficit for February was larger than the deficit for the entire year of 2007. The Government continues to operate based on "Continuing Resolutions" which essentially provide funding at the current level for a few more weeks at a time.

Each time, with the threat of a government shutdown looming, Republicans in the House negotiated for slightly bigger spending cuts, while Democrats fight for the status quo. The result has been very little change, with nearly insignificant cuts to spending which still leave us with trillion dollar deficits for years to come.

The groundswell of voters who threw out the old Democrat power structure last November didn't want a minor correction in the way government fiscal policy was approached, resulting in us going bankrupt slightly more slowly. The election was a clear mandate for a course reversal back to sound fiscal principles of lower spending, smaller government, lower taxes, and an environment which creates jobs and produces wealth through the power of the private sector flourishing in a free market.

Cutting discretionary spending is a good starting point, but even if discretionary spending was cut to zero, we would still face a massive and unsustainable deficit of nearly a trillion dollars. Therefore, reforming entitlements is necessary. Left alone, Social Security and Medicare will die. To save them, they must be reformed and rescoped, as part of a comprehensive change in the way government manages money.

The opportunity to make that happen is approaching, and it is vital that our representatives do not miss it. Just as it took some political guts for Governor Scott Walker to stand up to the union thugs in Wisconsin, it will take real will power to not cave in under the pressure which is sure to come, but if there was anything behind the campaign rhetoric, now is the time to show us by taking action.

Currently the government's debt limit stands at $14.29 trillion. We will reach that limit in just a few months, and Congress will either have to raise the limit once again, start printing money in massive amounts, or cut spending by more than 30% across the board. Given the options, any politician would be inclined to once again take the courageous course and sink our kids further into debt.

In 2006 when Senator BO voted against raising the debt limit to $8.965 trillion he said that, "Raising America's debt limit is a sign of leadership failure." Now that he is leading and he is the one asking to take America closer to insolvency, he wishes that we would forget those words. But what else could we call BO's plunge into debt with no plan to ever get out of it, and nothing but proposals for more spending? It is a failure of leadership of a magnitude never seen before, as evidenced by the fact that BO's own projections show that he intends to increase the national debt in eight years by more than all of the Presidents before him, combined, in the 226 years of American history.

But Congress does not have to cave in to BO's pressure to allow his unchecked spending frenzy to continue. The House of Representatives is where all Legislation begins, and the Republican majority there can attach any conditions they desire to a bill increasing the debt limit. They have the power to ensure that Washington fundamentally changes the way they manage money, so that it will be responsible and sustainable. Here are a few suggestions:
  1. Defund Obama's $105 billion slush fund intended to pay for implementation of the bureaucracy to support Obamacare.
  2. Repeal Obamacare, a massive new entitlement which has already failed to deliver its most basic promises of reducing costs and being deficit-neutral.
  3. Reform Social Security and Medicare. These entitlement programs account for many trillions of dollars of unfunded liabilities which, if left as they exist today, will result in financial collapse and and inability to pay anything in the future.
  4. Make the Bush tax cuts permanent. The looming tax increase scheduled for 2013 is hanging over the head of every business considering whether to hire new employees and grow the business. Job creation will not resume until that tax increase is canceled.
  5. Create a statutory cap on the debt-to-GDP ratio, with aggressive benchmarks to meet each year until the ratio is brought down to a sustainable level of somewhere around 0.5.
There will, without a doubt, be much wailing, gnashing of teeth, demagoguery, whining, and name calling from the big-government statists in response to these actions. Victims of the "draconian" cuts will be trotted out for us to pity. As with Obamacare, most of their sob stories will be entirely fictional. All will be based on the tenant that capable and productive people owe a living to incapable and unproductive looters. None will face the reality that, as painful as facing fiscal reality may be in the short term, it is far better than paying the price for doing nothing, resulting in a debt spiral and economic meltdown which will make events in Greece look like nothing. When America's debt goes into default, who will bail us out? The European Union? China? The UAW, GM, or Fannie Mae?

Representative Marco Rubio has pledged to vote against raising the debt ceiling until real steps are taken to deal with the long-term fiscal situation. Let him know that the voters support him and will stand by him when the statists attack his principled stand.

Let your Representative know that we expect real and significant action to restore fiscal sanity to the budget process, and we expect them to demand it before they agree to one more dollar of debt.

Wednesday, March 09, 2011

Come and take it!

This week Texas celebrates the 175th anniversary of it's independence from Mexico. The story of the Alamo is certainly compelling, as a handful of men took a stand against tyranny and fought for freedom against all odds, defying the much larger army of Santa Anna. Legendary figures such as James Bowie, Davie Crockett, and William Travis fought to the death for something they believed in.

At the center of the conflict was the action taken by Mexican President Antonio Lopez de Santa Anna, who replaced Mexico's Constitution with a new document, The Seven Laws, which disolved Congress and established him as the military-backed dictator. Santa Anna, fearing that the Texans were too independent, moved to solidify his control by disarming the outer colonies.

The conflict came to a head when Santa Anna attempted to take a small bronze cannon which the Texas militia had at Gonzales. Texans met the Mexican army at Gonzales with a flag defiantly daring the Mexicans to "Come and take it".

The Mexicans went home without the cannon, but returned with a much larger army, resulting in the battle of the Alamo, and ultimately in Texas victory at San Jacinto.

It occurs to me that we could use some of that spirit of defiance to tyranny in America today. When politicians and government bureaucrats chip away at our basic freedoms, instead of giving it up willingly and complacently going back to sleep, it is time to tell them to "Come and take it." They govern by the consent of the people. They work for us. We should not fear them, they should fear us.

They want to strip away our Second Amendment rights, just as Santa Anna came to confiscate the Texans cannon. Come and take it!

They want to take our autonomy in how we get medical care. Come and take it!

They want to take our property rights, imposing ever higher taxes to fund wealth transfer programs they have no authority to conduct. Come and take it!

They want to mortgage our future, burying our kids in debt which will consume most of what they produce in their entire lives. Come and take it!

They want to use our money to nationalize industries and bail out failed businesses. Come and take it!

They want to tax energy, bar the use of our own resources, and regulate the gas we exhale, stifling the economy, destroying jobs, and increasing our dependence on countries hostile to America? Come and take it!

It is time to say "No more!" You can have America when you "Come and take it". 2012 is coming and we will remember.

Wednesday, March 02, 2011

Death Panels

During the Obamacare debate, Sarah Palin was lambasted by statists for suggesting that BO's bill would result in rationing of care by government bureaucrats who would sit in their Washington DC offices and decide who would live and who would die based on their actuarial tables and cost/benefit formulas. She called them "Death Panels".

Turns out she was right.

In December the FDA rescinded the approval of Avastin for the treatment of breast cancer.

Avastin is a miracle drug that currently represents the last, best hope for women with metastatic breast cancer. Each year 17,500 women are treated with Avastin, a late-stage breast cancer drug that restricts blood flow to tumors, slowing their growth, shrinking them, sometimes even eliminating them. The drug typically extends a patient's life for a few months, but in some cases they live for years. Both the Susan G. Komen Foundation and the Ovarian Cancer National Alliance strongly support use of Avastin and have been publicly urging the FDA not to revoke its approval. The National Comprehensive Cancer Network, a nonprofit alliance of oncologists that produces treatment standards recognized in more than 100 countries, still supports the drug as a breast cancer treatment.

In making recommendations, the FDA's Oncologic Drugs Advisory Committee is supposed to consider only clinical evidence of the drug's safety and effectiveness. However, ODAC member University of Nebraska oncologist Jean Grem stated that the drug's hefty price tag was a factor in their decision. Revoking Avastin's approval would reduce the cost of government-funded health care by nearly half a billion dollars, but it would also make the lifesaving treatment unavailable to patients with private insurance. The decision to rescind Avastin's approval is currently being appealed, and hopefully will be overturned. However, the fact that the FDA wields the power to deny the public access to a treatment because of government budgetary considerations remains problematic.

The government drug-rationing that begins with Avastin isn't going to stop with Avastin. Dr. Donald Berwick, the Obama administration's recess appointee heading up the Centers for Medicare and Medicaid Services, has said that "it's not a question of whether or not we will ration health care," but "whether we will ration with our eyes open."

As I argued during the Obamacare debate, rationing of care will have a devastating impact on innovation of new treatments. This case illustrates how that will happen. Genentech, a division of Roche Pharmaceuticals, spent $2.3 billion in research and development to produce Avastin. If the FDA can refuse to allow a new treatment because of government rationing rather than clinical effectiveness, companies will simply stop investing the huge sums of money necessary to develop new lifesaving treatments.

When government takes control of your health care, your life is in the hands of unaccountable bureaucrats who you can't fire, and they will make decisions which you can not appeal, decisions which can greatly impact your life, decisions which may mean death for you or a family member or loved one, decisions which should rightfully be made by you and your doctor, not by the Federal Government.

Tuesday, March 01, 2011

The General Welfare clause

If you are a liberal, there are only three phrases in the Constitution that you are aware of:
  1. Provide for the general Welfare
  2. Separation of Church and State
  3. Right to privacy
You are undeterred by the fact that only one of these phrases actually occurs in the Constitution, and you have never actually bothered to read the entire sentence containing that phrase, in spite of your eagerness to use that phrase to justify nearly all of your legislative agenda.

Congress uses the "Welfare" clause to claim the authority for just about anything they want to do, from punishing people who don't buy a certain product to regulating the gas you exhale.

The "Welfare" clause is found in Article 1 Section 8 of the Constitution, which enumerates the powers of Congress:
The Congress shall have Power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.
Liberals who quote this never quote the entire sentence, or even bother to mention "the common defense" which they find to be yucky icky. Nor do they acknowledge the meaning of the word "General" which requires that their actions benefit everyone, not pay off one person at the expense of another. They can't be bothered to consider the context of the language which indicates that the phrase does not give them the authority to do anything they want so long as they claim that it is for the general welfare. James Madison said it like this: “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

The drafters of the Constitution discussed the actual meaning of the welfare clause at great length, and clarified exactly what it means and what it does not mean. Thomas Jefferson made the case that the clause specifies reasons for which Congress may collect taxes (or as one reader pointed out, borrow money, which is just a tax to be collected in the future), and does not grant Congress any other authority for sweeping forays into people's lives for our own good.
"To lay taxes to provide for the general welfare of the United States, that is to say, "to lay taxes for the purpose of providing for the general welfare." For the laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. They are not to lay taxes ad libitum for any purpose they please; but only to pay the debts or provide for the welfare of the Union.They are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which might be for the good of the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and, as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please... Certainly no such universal power was meant to be given them. It was intended to lace them up straitly within the enumerated powers and those without which, as means, these powers could not be carried into effect." --Thomas Jefferson: Opinion on National Bank, 1791. ME 3:147-148
Jefferson made the argument that the "Welfare" clause did not give Congress the authority to do anything, so long as it was claimed to be "for the general welfare" because such an interpretation would render the following enumeration of powers meaningless. Why should the Constitution list out in great detail the specific actions which Congress is authorized to take if all of those actions and more are authorized by the welfare clause?
"Our tenet ever was that Congress had not unlimited powers to provide for the general welfare, but were restrained to those specifically enumerated, and that, as it was never meant that they should provide for that welfare but by the exercise of the enumerated powers, so it could not have been meant they should raise money for purposes which the enumeration did not place under their action; consequently, that the specification of powers is a limitation of the purposes for which they may raise money." --Thomas Jefferson to Albert Gallatin, 1817. ME 15:133
Jefferson had good reason to be concerned, as politicians, eager to expand their own power, have indeed used this clause to claim the authority to impose all sorts of laws which have nothing to do with laying taxes, and even when they are writing tax laws, those laws are rarely uniform, but instead are written to grant special status to the author's supporters and constituents. You can read through the sixteen enumerated powers granted to Congress, but you won't find anything permitting them to do much of what they do today. There is nothing permitting them to redistribute wealth from those who produce it to those who don't. Congress has no authority to mandate that citizens buy medical insurance or to punish those who don't comply. Congress has no business telling you what kind of light bulb to use or what kind of toilet to have in your bathroom. Neither do they have the power to dictate to banks who they must lend money to, bail out failed companies, attempt to control or stimulate the economy, or nationalize industries. Most of the intrusive busybody laws passed by Congress are based on a blatant misapplication of the welfare clause.
"Aided by a little sophistry on the words "general welfare," [the federal branch claim] a right to do not only the acts to effect that which are specifically enumerated and permitted, but whatsoever they shall think or pretend will be for the general welfare." --Thomas Jefferson to William Branch Giles, 1825. ME 16:147

“If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions.” – James Madison, 1792
And finally, from a letter Jefferson wrote to George Washington:
"If it were assumed that the general government has a right to exercise all powers which may be for the 'general welfare,' that would include all the legitimate powers of government, since no government has a legitimate right to do what is not for the welfare of the governed." --Thomas Jefferson to George Washington, 1792. ME 8:397

Monday, February 21, 2011

Is Government dependable?

Every year the Social Security Administration sends me a statement with my estimated Social Security retirement benefits. If I feel like being depressed, I do some analysis on those numbers.

A few years ago I computed the effective rate of return for money I pay into Social Security. You can find the results here. At that point, my money entrusted to the "Social Security Trust Fund" produced the equivalent of a 1% annual rate of return over my lifetime. By comparison, a diversified investment portfolio should be expected to return eight or ten percent over the long term.

This year I compared a dollar paid into Social Security to a dollar invested in my 401(k). In both cases I started with a dollar paid in 1994, when I was fresh out of college. The dollar in my 401(k) has had a rough ride, with some big gains and stomach-wrenching drops. Today it has grown to $3.93.

If I went to the government and asked about my dollar, they couldn't give it to me, or even tell me how much it is worth. They don't have it any more. They spent it in 1994. All they have is a Treasury Bill indicating that the government owes itself $1 plus interest. To understand how this works, get a piece of paper and write "I owe myself $1 million." Then sign it. Congratulations! You are a millionaire! At the effective rate of 1% my dollar would be worth $1.21.

Assuming typical results for both the 401(k) and Social Security, if I retire at age 65, the dollar in my 401(k) will have grown to $54.34. The dollar I paid into Social Security will produce $1.52 in benefits for me. The 401(k) investment will be worth 35 times more than the Social Security benefit.

"But wait," you might say, "The 401(k) is invested in stocks and those are risky. Social Security is safe, there is no market risk. It is sure to be there for you." A big hole was shot in that argument by the report issued by the Congressional Budget Office which states that Social Security will operate at a deficit until the money runs out entirely in 2037.

How can this be? In 1984 Congress overhauled Social Security, increasing the payroll tax and putting the surplus into the "Social Security Trust Fund" where it would be available to cover the surge in benefit payments caused by the baby boomers retiring. We were assured that Social Security would be solvent until 2060.

But putting Congress in charge of safeguarding a pool of trillions of dollars was clearly not a good idea. You know the fox and the hen house. Congress, which depends on spending more and taxing less in order to secure their re-election, spent the money. Bernie Madoff was small time by comparison. With interest, the Social Security Trust Fund should be worth $2.6 trillion today. This should anger you. That was not their money to spend, it was your money, entrusted for safekeeping, promised to be there for you when you retire. Roosevelt called it "A sacred trust".

Millions of Americans depended on the government for a secure retirement. For more than half of America's retired people, Social Security provides the majority of their income. According to the recent report, in the near future, benefits will have to be cut, payroll taxes will be increased, and still the Treasury will have to borrow or print more money to meet its obligations.

Even the measly 1% return will not be there for me when I retire.

People who depended on government for their retirement are learning that government is not dependable to deliver on its promises. Now, who wants to sign up to depend on government for health care? Have they earned that level of trust?

Thursday, February 17, 2011

Let's hear it for Scott Walker

When you look behind the financial disasters of our time, the odds are pretty good that you will find either a labor union or a government bureaucracy distorting the free market. Often you will find both, as in the case of the American automobile industry which is collapsing under the double burden of unsustainable union wages and benefits, and government regulations and taxation which make it next to impossible to compete in a global marketplace.

While the Federal Government madly spends money it doesn't have, taxing, borrowing, and printing money at an alarming rate, states who don't have the same luxury are going bankrupt under the strain of mounting unfunded Federal mandates, from sources including Medicare, the EPA, and Department of Education.

While the Obama recession has been hard on the private sector, it has been very good to government employees. As of last summer, the average civilian government employee was compensated $123,049. The rest of us poor schmucks working in the private sector where we have to be productive and produce a product that consumers are willing to pay for, earn an average of $61,051. Since Obama took office, government is the only sector where employment is actually rising. Today the government employs 2.4% more people than it did in January 2009. Private sector employment is down 4.4%.

Unions exist for the purpose of extracting above-market wages for their members. If they did not accomplish this, there would be no reason for anyone to join the union and pay dues. In the private sector, unionization eventually forces a business into bankruptcy. The business must pay above-market costs for labor, but can still only charge market prices for their product, making it impossible to remain competitive and profitable in the marketplace. In the government sector where agencies can simply force citizens to pay higher taxes and are not required to compete for revenue or market share, unions can simply grow unchecked. In the past 50 years, unionization in the private sector has dropped from 33.9% to 6.9%. Meanwhile, unionization has tripled among government employees, going from 9.8% to 36.2%. The case for higher taxes gets much harder to argue when faced with the reality that those taxes are going to pay busybody bureaucrats who make more than you do.

Enter Wisconsin's new Governor, Scott Walker, who recently introduced a bill to deunionize Wisconsin's government agencies. The outcry from government employees in Madison would make you think you're in Cairo Egypt. It is a necessary step for any state which wishes to remain solvent. It is also a gutsy move from a new Governor who is bucking the conventional wisdom that you get reelected by providing an ever-increasing stream of government largess to your constituents. Politicians want the masses eating out of their hand because that way they are always needed. Independent, self-sufficient citizens can throw their elected officials under the bus if they get out of line, but those who depend on the government for their food, shelter, medical care, clothing, and their very life will put up with much more abuse. Obama's central strategy involves paying off unions for their support by directing huge amounts of taxpayer's money their way in the form of stimulus, bailouts, and government contracts.

Governor Walker is certain to take some political hits for his stand. There will be weeping and gnashing of teeth from government employees who are really put upon to be forced to work for market wages like the rest of us. Undoubtedly, the media will delight in showing us pictures of public servants huddled in alleyways due to the exploitation allowed by deunionization. And of course we can expect Democrats to stir the pot in future election cycles, asking us to pity the poor victims of the state's unfair employment practices. But remember that for every person carrying a sign calling the Governor "Hitler" there are fifty people who are actually going to work and being productive, and they love what Walker is doing. It is exactly what they voted for in November. Elections have consequences.

At the heart of the issue is the question of the government's purpose for existence. Do we have a government to provide cushy jobs for a large percentage of the population from which they can never be fired no matter how poorly they perform, with guaranteed raises, guaranteed benefits, and guaranteed pensions for the rest of their life, funded by an ever-increasing tax burden on the rest of society? Or does government exist to protect the fundamental liberties and rights of its citizens and create a fair and free environment for individuals to excel, innovate, and achieve greatness based on their own merit?

Hats off to you, Governor Walker. You have no idea how much heat you will take for daring to kill the sacred cow of the left. But if you stand strong we will see that you were right in the end.