Supplemental Appropriations Act 2009 - Open Letter to Congressman Glenn Nye

While I agree on continuing to fund the wars in Iraq and Afghanistan, I do not agree with combining continuing funding resolutions for the war on terror with other funding. I would prefer seeing an up or down vote on defense matters.

Also, it is my recollection that Bush's continuing funding resolutions were ~$60B whereas this administration's continuing funding resolution is over ~$100B. Both parties' resolutions contain other funding measures. My recollection is that the democrats were irrate at continuing resolutions by Bush, but simply pass those proposed in a democratically controlled congress. Where is the outrage? What is the difference, other than an additional $40B for social programs? You guys are amazing in your ability to obfuscate the truth! However, I believe there are some of us that are watching and evaluating. Perhaps its time to be fiscally and morally responsible.

Open Letter to Congress and The President of the United States

I agree with 90% of what Bob Basso presents in his portrayal of Thomas Paine (http://www.youtube.com/watch?v=jeYscnFpEyA). Perhaps you guys in congress AND the president need to wake up and smell the coffee. To the extent that I am able, I will see to it that each of you is not returned to office. You are out of contact with the American people.

This message was sent via Congress.org, which uses the Capwiz·XC system. Congress.org is a free public service of Capitol Advantage and Knowlegis, LLC. You may access Congress.org here: http://congress.org

Lions, Tigers, and Health Scare – Oh My!

Its six months after Obama took the oath of office of the Presidency of the United States, and the car industry is for all practical purposes nationalized. The next target is healthcare.

As the administration’s argument goes, the impetus for big government reform is that, based on Census Bureau estimates, between 40 million and 50 million Americans are medically uninsured. Based on this fact, the administration further asserts that the uninsured are either not receiving healthcare or, if they are, that it is too expensive, inferior, and inefficient. They then infer from the General Welfare Clause of the Constitution that “healthcare“ is a “right” to be secured by Government and that the cost and inefficiencies in the current system can be remedied only by having private insurers compete with the federal government. Stated simply, the problem is big, the problem involves a constitutional right, and the problem can only be solved by government.

The Problem is Big

According to the Heritage Foundation, the 40M to 50M uninsured number includes “ roughly 7 million … illegal immigrants; roughly 9 million … persons on Medicaid; 3.5 million … persons already eligible for government health programs; and approximately 20 million [who] have, or live, in families with incomes greater than twice the federal poverty level, or $41,300 for a family of four.” So where is the problem other than adults who should take personal responsibility for their own health by personally investing in it. Otherwise, the proposal pays $1.5T over ten years to cover 7M illegal immigrants. This may be popular with social progressives who would like to attract this voting base, but not with the 53% of Americans who pay 100% of the Federal Income Tax.

Healthcare is a Right

The social progressives point to what is referred to as the General Welfare Clause of the Constitution (Article 1, Section 8) to justify healthcare and other social programs as a “right.” Article 1, Section 8, Clause 1 states “The Congress shall have power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and General Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” From a social progressive’s perspective, this authorizes limitless government spending to take care of the masses. Unfortunately, this was not the perspective of James Madison, the principal author of the Constitution. James Madison, when asked if the "general welfare" clause was a grant of power, replied in 1792 in a letter to Henry Lee, “If not only the means but the objects are unlimited, the parchment [the Constitution] should be thrown into the fire at once.” [Brant, Irving the Fourth President - A Life of James Madison Eyre & Spottiswoode (Publishers) Ltd. London, 1970] Instead, the Founding Fathers saw relief as local and voluntary, and the Constitution gave no federal role for government provision of charity. Madison observed, “No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment and, not improbably, corrupt his integrity.” [Madison, Hamilton, Jay in Federalist, No. 10] In other words, if charity were the responsibility of the government, the process would be (and has) become compromised and politicians would conspire with special interest to trade votes. The New Deal was characterized by this type of political corruption. [Folsom, B., New Deal Or Raw Deal, © 2008] The Founders, I believe, intended the General Welfare Clause to be interpreted as the pre-amble to the specifically enumerated powers that follow in the remaining clauses of Article 1, Section 8, which specifically define the terms introduced in Clause1.

Only Big Government Can Solve this Problem

Big government is not good at solving large problems: politicians’ behavior is generally motivated by political expediency and the next election cycle. George Santayana wrote in Reason in Common Sense, The Life of Reason, Vol.1, "Those who cannot remember the past are condemned to repeat it." In other words, perhaps one should look to government’s past success in solving large problems, like Social Security, before another 20% of the economy is nationalized. When an accountant quizzed Roosevelt about the Ponzi scheme-like economic issues with social security, he said “I guess you are right about the economics, but those taxes were never a problem of economics. They are politics all the way through … with those taxes in there, no damn politician can ever scrap my social security program.” [“Statements on Taxes by Members of this Administration in 1939,” in Morgenthau Diary, January 5, 1939]. Roosevelt’s perspective proved to be correct. Seventy years later, Social security, Medicare, and Medicaid have an off-balance sheet liability of $50T to $55T. This is equivalent to the annual GDP of all the people on the planet (currently 6B) working for one year or approximately 4 years of the GDP of the United States. In fact, Social Security, like nationalized healthcare, was presented as insurance, when in fact the “revenue” received from current payees was never invested in a sinking fund, but instead was transferred to the treasury, in exchange for an IOU, to meet ongoing obligations. The federal government makes Bernie Madoff look like a piker.

I could expand the list of examples of government mismanagement beyond social security to Fannie Mae, Freddie Mac, Amtrak, and others. In fact, I cannot think of one large government project that has been brought in on scope, on time, on budget and then economically operated. So suppose I am incorrect, the progressives faith in government management is well placed, and Obama is correct: 50M people need to receive healthcare and currently are not receiving it because they are uninsured. Well the bad news is even the Chief Organizer cannot appoint a Medical Czar who can create a sufficient number of qualified, licensed MDs, within the next ten years, to cover the new demand (some subset of ~45M people) that will be placed on the system. Because of caps placed on licensure of doctors in the 1980s and 1990s, during which period the population grew by 45 million, and the fact that over 200,000 licensed physicians start to retire in 2012, sufficient medical doctor capacity will not be available to meet the demand unless the government attracts doctors from abroad. So, according to the law of supply and demand, either the price will go through the roof OR care will have to be rationed. Personally, at the age of 60, I do not like this last option, given that I have acted responsibly to fund my own retirement, medical care, and (hopefully) some small pittance of social security.

Conclusion

I am opposed to the government competing with private enterprise in the area of healthcare. I think Obama has it backwards. Maybe just maybe, healthcare is a mess because the government has imposed itself in the free market. Instead of private insurers’ greedy profit motive, the lack of substantive tort reform, layers of regulation, and establishing artificial prices for services in Medicare and Medicaid have contributed to a system that is broken. Currently more than 1,500 private companies provide health insurance: competition is not an issue. Government intervention will only use the power of the public purse to impose further mandates that will break the system further. In the process, government will tax us further, making us into economic slaves with unaffordable healthcare.

Last, if the government is such a great manager, why are Social Security, Medicare, and Medicaid facing economic collapse? Using the social progressive's logic, perhaps government could use some competition from private enterprise. Sorry, I forgot, that was a Republican proposal.

An Open Letter to Sen. Jim Webb

I recently received a reply from you to a message that I sent through www.opencongress.org . In essence the message said that you will not respond to communications sent through third parties.

The purpose of this letter is to register my disappointment in your decision to not accept electronic e-mail correspondence through third parties such as www.opencongress.org because sites like this allow citizens to track, read, and evaluate legislation and directly, efficiently, and effectively contact their representatives about matters important to them. It also allows individual citizens to follow the progression of the bill through congress and monitor the way individual representatives voted on that piece of legislation.

Clearly, your interest is to reframe the communication between you and your constituents in a way that makes it more convenient for you rather than the citizen. That is precisely why Washington is a problem and why I will work as hard as I can to see that the voters of Virginia do not return you to your elected office at the first opportunity.

Environmental Taxation without Scientific Representation

“The Obama administration declared Friday that carbon dioxide and five other industrial emissions threaten the planet. The landmark decision lays the groundwork for federal efforts to cap carbon emissions -- at a potential cost of billions of dollars to businesses and government.” (WSJ, J. Weisman and S. Hughes, April, 18, 2009).

According to the article "Environmental Effects of Increase Carbon Dioxide" (Robinson, et al, which has been peer reviewed), the MAGNITUDES of human produced carbon dioxide per year over the past 100 years is so inconsequential relative to exchanges between the oceans, land masses, and the air that it is difficult to determine if any deleterious effects can be attributable to man. In fact, the strongest correlation between global warming and any other physical variable is to solar activity. In fact this article concludes "A review of the research literature concerning the environmental consequences of increased levels of atmospheric carbon dioxide leads to the conclusion that increases during the 20th and early 21st centuries have produced no deleterious effects upon Earth’s weather and climate. Increased carbon dioxide has, however, markedly increased plant growth. Predictions of harmful climatic effects due to future increases in hydrocarbon use and minor green house gases like carbon dioxide do not conform to current experimental knowledge." In effect, this carbon dioxide scare is nothing more than an attempt to promote a state sponsored "religion," funded by taxpayer dollars While well intentioned, these folks are on the wrong side of science and will tax us into oblivion to fix a problem that simply does not exist.

Taxing the Rich is Really Taxing All of U.S. (Part II)

In the Wall Street Journal’s “Review and Outlook” section (The 2% Illusion, February 26, 2009), the WSJ editors estimate that, based on 2006 tax data (the most recent available), that raising the tax rate to 100% on all income over $500,000 on the wealthiest 2% of all Americans would generate an estimated $1.3T in “revenue” to the government. Further, the WSJ estimates that if all the income generated by Americans earning over $75,000 were taxed at 100%, it would generate about $4T, which is what the Congress proposes to spend in fiscal 2010. While this is an interesting analysis, it is immaterial because it wrongly assumes that Americans will continue to work simply to pay money to the federal government.

In 1989, then Senator Bob Packwood requested that the Joint Committee on Taxation estimate the revenues that would be generated on all Americans earning more than $200,000. The JTC estimated the “revenue” to be $440B over a three year period. This was enough to balance the budget. Sen. Packwood was shocked at this analysis: “Our models assume that people will work forever to pay all of their money to the government. Clearly anyone in their right mind will not.” Sen. Packwood had discovered the principle of the Laffer curve: there is a point beyond which an increase in tax rates causes tax payers to evade taxes, stop working, and stop investing. Reagan understood this principle. By reducing personal, corporate, dividend, and capital gains taxes, he created the longest sustained period of prosperity in the history of the United States. After Reagan reduced taxes in the 1982 – 1986 timeframe, the tax rates have remained relatively unchanged, except for hikes by George H.W. Bush and Bill Clinton. The effect of this long term tax rate reduction, over the period 1982 to 2005, includes:

· Over Reagan’s term, the stock market more than tripled to 3,000. At the height of the George W. Bush term, the market reached 12,500.
· Between 1982 and 2000, stock values soared by 12% per year.
· The net worth of American households increased by $30T.
· The number of Americans owning stock increased from 16% to 50%, investing the average American in the ownership of American business.
· Tax revenues to the Federal government doubled from $1.2T to $2.5T.
· The percentage of tax revenues paid: (1) by the richest 5% has increased from 38% to 60% and (2) by the richest 10% from 48% to 71%.
· The percentage of tax revenues paid by the bottom 50% have dropped from 8% to 3%.
· From 1981 through 2007, the United States was a net importer of $5.2T in capital.

Liberals need to disabuse themselves of the idea that tax rate reductions result in deficits. In fact, tax rate reductions result in increased revenue to the Treasury, capital formation, and increased personal wealth of the average American. Deficits are created by SPENDING MORE THAN THE REVENUE YOU RECEIVE.

From a financial perspective, spending not tax rates is the problem. But this is not the problem the social democrats are trying to solve. They want to buy votes and that takes more money than the American taxpayer can generate.

The "After Math" of The Stimulus Bill

The following is a quote sent to me by my cousin, Mark George. Short, sweet, and to the point.

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it." Dr. Adrian Rodgers

Just like physical laws, certain behaviorial and economic laws may be defied temporarily. At some point, what goes up must go down.