Archive for category Statism

Redistribution–Obama’s Supplemental Poverty Measure

Robert Rector highlights Obama’s New “Poverty” Measurement in today’s NRO post; as you may guess it has nothing to do with actual poverty.

“The current poverty measure counts absolute purchasing power— how much steak and potatoes you can buy. The new measure will count comparative purchasing power — how much steak and potatoes you can buy relative to other people. As the nation becomes wealthier, the poverty standards will increase in proportion. In other words, Obama will employ a statistical trick to ensure that “the poor will always be with you,” no matter how much better off they get in absolute terms.”

“The weird new poverty measure will produce very odd results. For example, if the real income of every single American were to magically triple over night, the new poverty measure would show there had been no drop in “poverty,” because the poverty income threshold would also triple. Under the Obama system, poverty can be reduced only if the incomes of the “poor” are rising faster than the incomes of everyone else.”

“The government’s own data show that the typical American defined as poor (according to the traditional, pre-Obama poverty measure) has two color televisions, cable or satellite service, a VCR or DVD player, and a stereo. He also has a car, air conditioning, a refrig erator, a stove, a clothes washer and dryer, and a microwave. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had suf ficient funds in the past year to meet his family’s essential needs. While this individual’s life is not opulent, it is far from the stark images conveyed by the mainstream media and liberal politicians.”

So the “poor” will always be with us no matter how rich they become. Why do this you may ask? Obama’s stated objective is to exercise what he would call a primary function of government: redistribution of wealth. Doing this creates dependency on government and dependency creates voters for the re-distributor.

Of course, there’s a downside. Redistribution by definition removes capital from reinvestment opportunities. As a direct consequence the wealth of society is lowered. The standard of living goes down proportionately. Ultimately, there will be no more wealth to re-distribute. What’s left is a permanent underclass, dependent only upon other dependents!

I fear Obama is the ultimate Communist. Tzars. Government control of major industries. Promotion of public employee unionism. Create major new welfare programs when existing programs are near bankruptcy. And now, a redefinition of “poverty” from absolute terms to relative terms.

I’m reminded of Orwell’s Animal Farm, “while all of us are equal, some are more equal than others!”

Tom Motherway

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the Spending Limitations Amendment would eventually put us on a sustainable path

Even without any more stimulus, bailouts, Obamacare, or cap and trade the US is on a course to bankruptcy. Consider:

  • In the past five years federal spending has increased 42% to nearly 25% of the economy, the highest level since World War II.
  • The deficit has exploded from $318 Billion in 2005 to $1.4 Trillion, a 400+% increase, equal to the entire accumulation of debt from George Washington to Bill Clinton.

As James Antle points out in his American Spectator article, Amending the Spending, “this will be remembered as a golden era of fiscal responsibility compared to what is to come.” Again I emphasize, this is even without Obamacare, added stimulus, bailouts, etc. With demographic certitude, as baby boomers retire, social security, medicare, and medicaid as we know them will be bankrupt. THE PUBLIC DEBT WILL EXCEED 110% OF THE ECONOMY IN 2026 AND CLIMB PAST 200% BY 2040! Again, this is without Obamacare, added stimulus, bailouts, etc.!

Three congressmen, Mike Pence (R-Ind.), Jeb Hensarling (R-Texas) and John Campbell (R-Calif.) have proposed a constitutional amendment to cap federal spending at 20% of the U.S. economy. The limit would be waived only when an official declaration of war is in effect or by two-thirds majorities of both houses of Congress. 20% is the historic average share of the economy consumed by the federal government.

The backers admit that Republicans are just as spendthrift as Democrats. They are not naive about getting it passed, 5000 amendments have been offered and only 27 enacted! But the mood of the country seems to be shifting to a serious concern for the current fiscal insanity.

If they’re correct, and the amendment has some legs, the country can get off the current unsustainable course and onto a path that’s fiscally sustainable.

Tom Motherway

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What’s Obama Up To?

On paper Obama appears to be a smart guy and reasonably well informed. I suspect he knows:

  • We face $1.4 Trillion annual deficits for the next decade.
  • Our current national debt is $12.3 Trillion and will grow by $1 Trillion a year.
  • Estimated unfunded liabilities from social security and medicare are $107 Trillion.
  • States with aggregate deficits of $350 Billion, debt of $1.9 Trillion, and unfunded liabilities of $1.4 Trillion are asking for federal handouts.
  • Unemployment is 9+% with private sector growth stalled.

Why then would he promote a radical takeover of healthcare with 10 year costs of $2.3 Trillion that adds $1.86 Trillion to the deficit over the next 20 years, that creates employment taxes and mandates, each discouraging private sector employment, and that fails to solve the demographically certain failure of medicare, social security and medicaid? We’ve proven our inability to handle two, no three if you include medicaid, major entitlements, why add another? And why would he risk his party’s control of Congress and his own ability to govern to attain this goal that a majority of Americans don’t want?

Obama is smart enough to know that Obamacare will exacerbate the financial straights of the United States. It’s uncertainty will decrease private sector employment. It’s taxes will decrease private capital for investment. It will cede financial and technological leadership to other countries. In short, we will be worse off tomorrow than we are today.  Why would he risk that…want that?

It is clear that he knowingly intends to drive us further to the brink. It is also clear that given his apparent intelligence he has an end-game in mind. Take our admitted crisis, you know the “never-let-a-crisis-go-to-waste” kind, explode it into a gigantic, off-the-clff catastrophe, then come up with a one-of-a-kind, popular solution that involves “shared pain” and if we are all lucky, someday “shared gain.”  Call it a Cloward-Piven Strategy on steroids. (See: Cloward-Piven Strategy: Is It Obama’s? and references cited therein.)

As Larry Kudlow said in NRO, One Giant Government Leap Backwards,” One of the most galling features of this plan is a taxpayer-subsidized government-insurance entitlement for people earning up to 400 percent above the poverty line, or nearly $100,000 for a family of four. In other words, a middle-class health-care entitlement that will add millions of people to the federal dole. It’s all too reminiscent of the political dictum of the old New Dealer Harry Hopkins: tax and tax, spend and spend, elect and elect.”

So will Obama’s “Fiscal Responsibility and Reform Commission” turn out to be the VAT Commission with a European 12% sales tax on top of the income tax, excise tax, etc. And those on top of the various state sales, income and property taxes? All this to finance BIG GOVERNMENT? If so, we will then all have the advantage of being “in the same boat,” “equal,” and “happy” in an ever declining country and economy.

So for the literarily inclined, Obama wants us on Hayek’s Road to Serfdom where we will encounter Orwell’s Animal Farm with 1984’s Big Brother in control. As Obama recently said in response to a push-back, “we won the election.”  And win the next election and the next, he aims to do with the creation of more and more dependency on him and less and less individual responsibility.

I won’t be around to witness the outcome but I hope the next generation will become informed and engaged, lest our grandchildren and great-grandchildren suffer horrible consequences.

Tom Motherway

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“idiocy of Yucca Mountain” Blasted by AEP CEO Morris

Today’s WSJ front page notes Democrats Revolt Over Energy. Apart from the subsidies wasted on wind energy used to enrich Chinese manufacturers and the EPA proceeding to regulate the air we exhale, the Yucca Mountain closing is coming under fire.

Big utility operators as well as some states like South Carolina and Washington are blasting the Obama administrations announcement that it will drop plans for a federal nuclear-waste vault beneath Yucca Mountain.

“The Energy Department’s move to formally drop its application for the Yucca Mountain waste site could hobble efforts to build more nuclear power plants—a strategy the Obama administration has promoted as a way to reduce U.S. greenhouse-gas emissions. Without a permanent solution to the waste-storage problem, several states, including California, won’t let new nuclear plants be built.”

“Michael Morris, chief executive of American Electric Power Co., said on Thursday that “there has to be a reaction,” because Yucca is the only site that’s been vetted and deemed capable of storing waste from the nation’s 104 operating power reactors. Speaking at a Wall Street Journal conference, he blasted the “idiocy of Yucca Mountain” being terminated as a repository, and said the government will have wasted $10 billion on the project if it doesn’t proceed.”

“Under federal law, Yucca is the designated site for the nation’s spent nuclear fuel and high-level radioactive waste. But the repository is more than a decade behind schedule. As a result, the waste generally remains at the nuclear reactors and DOE sites where it was generated.”

But what’s a few billion dollars wasted, a significant number of jobs lost, and the pronouncement of conflicting federal policies to this consummate totalitarian? 2012 can’t come any too soon!

Tom Motherway

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Tale of Two States & Health Care

Yesterday’s WSJ editorially gave us a snapshot of ObamaCare (Back to the ObamaCare Future) using the sad story of Mitt Romney’s Massachusetts venture into state controlled healthcare. Of course  Romney is now out burnishing his “conservative” credentials (read RINO) and the medical dictator job has devolved to Governor Deval Patrick.

What has happened? Costs have exploded–$47 M over budget. Spending has jumped 6.7% per year in a non inflation environment. Massachusetts insurance premiums are the highest in the nation having climbed at a 30% annual rate. Per capita health spending is 27% higher than the national average. Romney like Obama sold his healthcare as a way to control spending!

So Governor Patrick is proposing hard price controls on all Massachusetts healthcare. Regulators will cap insurance premiums; despite the fact that insurers pay out $1.12 in benefits for every $1.00 in premiums, a medical loss ration of 112%! He’s also filed a bill that will give regulators the power to review rates of hospitals and physicians; those that are deemed too high “shall be presumptively disapproved.”

Get the picture?  OBAMACARE!

But there was also a positive state healthcare story in the same paper same edition. Governor Mitch Daniels of Indiana penned an op-ed, Hoosiers and Health Savings Accounts, relating his quest five years ago for a consumer-directed heath insurance option for state employees. He got Indiana’s HSA enacted. For those choosing this option, each has his own health savings account supplemented with a high deductible (catastrophic) insurance policy; the state deposits $2,750 per year into these accounts which grow with interest.

What happened? First year some 4% of employees signed up; this year over 70% of the 30,000 employees signed up; there is $30M of employee money in these accounts growing with interest. These employees will save more than $8M compared to those who stayed with the traditional insurance. Indiana will save at least $20M this year since total costs have been reduced by 11% solely due to the HSA option. HSA participants ran up only $65 in medical costs for every $100 in costs incurred by the employees in traditional plans.

Indiana’s 70% HSA participation rate compares to a national rate of only 2%. Why? Public employee unions have rejected the HSA plans. As we know, Obama, being the puppet of the public employee unions he is, has denounced high-deductible HSA related insurance as “not real insurance.” (See: Where’s the Consumer) Obama doesn’t want consumer driven healthcare. He wants to control this 16% of the American economy. He wants to control your healthcare, make your decisions for you. You aren’t smart enough to do it yourself. But, don’t try to tell that to the Hoosiers!

Get the picture?  OBAMACARE!

Tom Motherway

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Leftist Shades of FDR–If you’re not worrying yet, then start!

The past is indeed prologue. I cringed at the leftist thought process when reading Stan Isaacs article today in The Philadelphia Inquirer, Obama should expand the court. In other words, pack the court. Shame on me, I should not have cringed at all. We are governed by the radical leftist, the Constitution doesn’t matter, Obama appoints unconfirmed “tzars,” he rules, he dictates, checks and balances are meant to be evaded. “Reconciliation” is the latest example!

Comrade Isaacs correctly points out that the Constitution does not specify the size of the Supreme Court. The number of justices is set by Congress and has shifted between five and ten, but hasn’t budged from nine since 1869.

Some of us are too young to recall Roosevelt’s attempt to “pack the court” in the ’30s when the “nine old men” declared some of his New Deal legislation unconstitutional. In short FDR failed in his scheme. Isaacs suggest that Obama could “quarterback” a change loading the court with puppets doing his bidding. He further suggests that this is “change we could believe in!”

These people are dangerous, to the core. Pray for the sake of our country and our grandchildren that the Senate changes hands in November. The life appointments to the court, requiring Senate confirmation, are what ultimately guard our Constitutional values.

Tom Motherway

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“You Can’t Borrow Against the Future…You Don’t Have One”

I can’t say it any better than Mark Steyn does in today’s NRO post, When Responsibility Doesn’t Pay. Here are a few lines as a tease to the whole article–a must read if there ever was one!

“While Barack Obama was making his latest pitch for a brand-new, even-more-unsustainable entitlement at the health-care “summit,” thousands of Greeks took to the streets to riot. An enterprising cable network might have shown the two scenes on a continuous split-screen — because they’re part of the same story. It’s just that Greece is a little further along in the plot: They’re at the point where the canoe is about to plunge over the falls. America is farther upstream and can still pull for shore, but has decided instead that what it needs to do is catch up with the Greek canoe. Chapter One (the introduction of unsustainable entitlements) leads eventually to Chapter Twenty (total societal collapse): The Greeks are at Chapter Seventeen or Eighteen.”

“What’s happening in the developed world today isn’t so very hard to understand: The 20th-century Bismarckian welfare state has run out of people to stick it to. In America, the feckless, insatiable boobs in Washington, Sacramento, Albany, and elsewhere are screwing over our kids and grandkids. In Europe, they’ve reached the next stage in social-democratic evolution: There are no kids or grandkids to screw over. The United States has a fertility rate of around 2.1 — or just over two kids per couple. Greece has a fertility rate of about 1.3: Ten grandparents have six kids have four grandkids — ie, the family tree is upside down. Demographers call 1.3 “lowest-low” fertility — the point from which no society has ever recovered. And, compared to Spain and Italy, Greece has the least worst fertility rate in Mediterranean Europe.”

“So you can’t borrow against the future because, in the most basic sense, you don’t have one. Greeks in the public sector retire at 58, which sounds great. But, when ten grandparents have four grandchildren, who pays for you to spend the last third of your adult life loafing around?”

Click on the link above and read on….you’ll see that California is further along in the chapters!

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Obama Can’t Answer Paul Ryan

Stephen Spruiell’s succinct report today in NRO, Ducking and Dodging, clearly sets out the Obamacare fiscal deficiencies highlighted today by Paul Ryan. Representative Ryan blasted Obama’s “insurance care” today and none of the Democrats could counter his arguments. Basically he pointed out that Obamacare front-loads tax hikes and Medicare cuts and defers costs, forcing the CBO to score ten years of offsets with only six years of spending! The true cost of the bill is $2.3 Trillion not the $950 Billion advertised by Obama.

Ryan focused further on other Democratic gimmicks:

  • Double Counting: “savings” are counted as offsets for spending and at the same time reserved to pay for future entitlements. Example, $52 Billion in Social Security tax increases.
  • “Doc Fix”: The bill’s 21% cut in Medicare reimbursements is put back in via separate legislation not subjected to combined CBO scoring.

And what does the wimpy Obama say in response? “We have some strong disagreements on the numbers, but I don’t want to get too bogged down!” If there were disagreement you would think he would have answered the criticisms.

As for getting bogged down, Obama should start getting real bogged down in his record breaking deficits, unsustainable national debt and bankrupting unfunded liabilities. Instead he is hell-bent-for-leather to add to that trio of financial irresponsibility. And this at a time of high unemployment when small businesses won’t hire because of the uncertainty, regulation and taxes proposed with Obamacare!

I guess destruction of our economy is a small price to pay for these socialists to gain total control of that economy. You’d think they would see it as a bad bargain.

I pity our future generations.

Tom Motherway

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“Catholic Charities in Albany NY Now Providing Free Syringes to Addicts”

Another well-intentioned, liberal Bush idea that Obama has continued and enhanced is the Office of Faith-Based and Community Initiatives. Michael Tanner of Cato calls it Obama’s Faith-Based Boondoggle. Michael, who has video-conferneced with our Reno Hayek Symposium meeting, correctly states that, “the damage done by government co-option of private charity goes far beyond money.” His point is that the addiction of federal dollars soon distorts the purposes of the charity–by dependency, sloth and ultimate control.

The Bush/Obama program of leveraging government dollars by using low cost (sometimes free) charity workers, is better than creating another government department to accomplish some social (not religious) goal. But the point is that the charity would ultimately accomplish the same or near same goal with private dollars. In short, there is no need to spend government dollars. Excuse me, your tax dollars.

“Government funding is antithetical to the nature of charity. After all, the essence of private charity is that it is voluntary. Tax money is based on coercion. There is neither compassion nor love behind a grant of money forcibly taken from taxpayers who may have no desire to support the charity in question.”

“There is no reason for government to be in bed with private charity. Charity is thriving in America. We are the most generous nation on earth. Every year, Americans contribute more than $300 billion to charity. In addition, more than half of all American adults perform volunteer work. That time and effort is worth more than another $300 billion. And that does not include the countless dollars and time given to family members, neighbors and others outside the formal charity system. A few extra dollars from Washington add little to this amazing success story.”

The proper role of government is the crux of all political difference. Big and all-intrusive or small and limited, that is the question. Our founding fathers set up a limited federal government with checks and balances and specifically delegated powers. Roles and powers not delegated to the federal government by the people were specifically reserved to the states or to the people. The founding fathers would be shocked to see how far the federal government has evolved from their vision.

The principle of subsidiarity is an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. This concept is applicable to government, management, and society. The parent, the family, the school, the church, the social group, the village, the city, the state and only then should the central authority, the federal government be competent to handle any given issue or concern. Let’s see… that would leave defense, postal service, national currency, and… what else to the federal domain? Read the constitution! You will be surprised.

Point is…if we continue to cede our obligations and our rights to the central authority, we will become dependent serfs….without moral fiber, character, or courage. That we can gather, speak, give to charity, volunteer, teach our children, defend ourselves and our families is our strength, our essence. Once ceded, never retrieved. Let charities do charitable work….yes even in healthcare!

A friend and member of our group on reading about Catholic Charities providing syringes to addicts in Albany wagged, “what’s next, condoms?” Makes me, a practicing Catholic, question– as have others–whether Catholic Charities is indeed Catholic, or for that matter, a charity!

Tom Motherway

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“Irony?”… Give Me a Break!

“The irony is, is that on the left we are perceived as being in the pockets of big business; and then on the business side, we are perceived as being anti-business,” Obama said in a Feb. 9 interview in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands tomorrow. This from Bloomberg.com, here.

Not an irony at all, Mr. President. You are in Wall Street’s pocket, just check out the Wall Street political contributions. And, you make deals with rent-seeking big business, just witness the drug price deals you made with big pharma. So the perception of the left, as you call it, is correct.

As to your pursuing a “fundamentally business-friendly agenda” and being a “fierce advocate” of the free market, all I can say is, Bull Shit! If you call your Obamacare, free market, or Cap-N-Trade, business friendly, I think you are hopelessly ignorant.

Perhaps you think the EPA’s proposed regulation of carbon dioxide is business friendly to those businesses in international competition. Or, your recent appointment of autocrat Craig Becker to the NLRB helpful to the US economy. How about your stimulus of liberal democratic interests, auto company bailouts and takeovers, or union card-check proposal? No, Mr. President, a free-market advocate you are not!

You are a big government statist. Please remember that distinction! I know this is hard since you have never held a real job, but please try!

Tom Motherway

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