Obama Couldn’t Care Less What America Thinks

August 28, 2009

Barack Obama showed his true colors in a recent trip to Montana.   The president was in Bozeman, Montana earlier this month to conduct a town hall meeting with “citizens” on his healthcare reform plan.  Naturally, most of what was really news was ignored by the press.  However, I was fortunate enough to receive an email from a friend that received an email from a friend who was on the ground in Bozeman, before, during, and after Obama’s visit.

According to the account, the true details of the president’s trip were appalling.  It amounted to an extravagant staged campaign stop for socialized medicine all at taxpayer expense.  In the first place, the town hall forum was held in a remote hanger at the local airport even though several venues (auditoriums, gymnasiums) in town were available for the event.  Thus, it was harder for average citizens to attend and seating and decorations had to be shipped in for the event.  In fact, according to airport workers in Bozeman the airport was abuzz with loads of shipments for the president for most of the week leading up to the forum.  One UPS employee even reported that thousands of dollars worth of lobster was shipped in for Obama and his entourage.  Since Montana has some of the best beef in the nation and they are experiencing the same economic hardships as the rest of us during this recession, one would think the president would be a little more empathetic toward his hosts and purchase their product to help their local economy.

Of course to get a ticket to see and maybe even ask the president a question was a complete run around.  Folks were not given the time tickets would be handed out until the morning before the day they were handed out.  Then, not even half of the tickets printed were handed out.  But, rest assured, folks with hard luck stories had their tickets.  Ahead of time, the White House called Bozeman’s Human Resource and Development Committee to get the names of folks who have experienced healthcare woes.  These folks got rides and tickets to the event all in an effort to give the impression that Montana was squarely behind the president’s plan to provide universal healthcare coverage to all Americans.  And just to make sure the impression was perfectly cemented, any questions for the president either from the media or the loyalists in attendance were screened ahead of time by the White House.

So, there would be no free exchange of ideas on healthcare reform that Obama claims he is willing to listen to.  Those that are opposed to nationalized healthcare were given a roped off area near the hanger to conduct their protest.  But, their unencumbered peaceful protest was short lived as a large busload of Service Employees International Union members was offloaded in their midst.  Clearly, whether the presence of these unionists was orchestrated by the White House or some other entity, their purpose was to start trouble and/or intimidate the anti-socialized medicine protestors.  As a matter of fact, one unionist was arrested for his aggression.  The eyewitness account indicated that the union members were well-organized, young, and relentless in following around the anti-Obama plan protestors.            

Now, I like many, have been a little dismayed at the behavior of some folks at the recent congressional town hall meetings.  But, what do we expect from people who are frustrated by their elected official’s actions – rigging elections, voting big bailout dollars for corrupt corporations, and ignoring their wishes on issues as important as healthcare reform?  The president is no different than members of Congress, but he obviously has the wherewithal to prevent the same scenes from happening at his town hall meetings.  If Obama was really a president of the people he would yearn to hear our voices.  He would travel modestly especially during economic hard times.  He certainly would not tolerate organized henchmen being used to squelch First Amendment freedoms.  Obama promised America “Change” but what we have really gotten is short changed.

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A History of Cost Overruns Should Squash Government Run Healthcare

August 21, 2009

Why on earth would anyone believe that the federal government running healthcare will cure the high cost problem in the industry?  I mean what has government ever run that even works well?  Our monetary system is a mess.  The economy is in the toilet.  Our schools are subpar.  Welfare programs have not alleviated poverty.  And our prisons are bulging at the seams filled with too many non-violent drug offenders. 

But, here we are debating whether Congress and the Administration should totally control one-sixth of our economy in an effort to lower costs and provide universal healthcare coverage for America.  The proposition to me is ridiculous – if only folks would look at the federal government’s track record when it comes to programs and cost overruns.

There have been thousands of examples through the years and the following is by no means the most egregious.  In the realm of transportation, cost overruns are an automatic with federally funded projects.  Take the “mixing bowl” highway interchange project in Springfield, Virginia for instance.  It was estimated by state officials to cost $241 million.  At its completion, the project ended up costing $676 million.  Of course, the most notorious transportation cost overrun was Boston’s “Big Dig”.  Initially estimated to cost a mere $2.6 billion the project’s final cost was $14.6 billion.

Uncle Sam’s fiduciary experiences, when it comes to energy projects, are not much better.  Take the Clinch River Breeder Reactor project of the 1970s for instance.  The project experimented with nuclear fission and was estimated by the Atomic Energy Commission to cost $400 million.  Throughout the decade its cost estimates steadily increased to $4 billion.  Eventually the program was scraped, but not before taxpayers dished out $1.7 billion.

Without question, cost overruns in Social Security are legendary.  The old age pension system has required many reforms in its 74 year history because of insolvency.  When it was established in 1935, its financing required only a one percent of wages contribution from the employee and a matching one percent from the employer.  Over the years, reform has eventually raised those contribution levels to 6.2 percent respectively.  The most significant amendments to the system came in 1983 when an earnings penalty for wages above a certain level, a delay in the cost of living allowance for six months, reduced benefits for those that retire early, and a higher retirement age were enacted.  All were measures to sure up the insolvent trust fund used to pay benefits.  Today, the outlook is even bleaker for Social Security.  Faced with millions of baby boomers retiring and a much smaller workforce to finance the system, it will be almost impossible for Uncle Sam to come with an estimated $45 trillion in future unfunded liabilities.

Finally, and most germane to why the federal government should stay out of healthcare is because it already has a history of massive cost overruns in the industry.  When Medicare Part A was passed in 1965, government experts projected costs to rise to $9 billion by 1990.  Total costs actually reached $67 billion.  In 1987, Medicaid added a special hospital subsidy to its coverage which was projected to cost $100 million.  By 1992, costs stood at $11 billion per year.  Now, I understand that things happen beyond the government’s control, but these overruns are not small, indeed they are huge.

Given this dismal historical record of cost overruns, why anyone would trust politicians when they announce cost estimates for government proposals is mindboggling.  As long as our “leaders” can continue to scam the public and rely on the Federal Reserve to print money to cover their excesses, their behavior will not change.  And now they are proposing to take control of an industry which represents one-sixth of our economy and one that is literally vital to the health of you and your family.  Of course, given the size of the industry, if the politician’s succeed at taking over healthcare the cost overruns will not be in the millions or even billions of dollars.  Cost overruns will be in the trillions of dollars.


End of Slavery, Equal Rights, and Abolishing the Fed, Not Radical Ideas

August 9, 2009

The Federal Reserve system needs to be abolished – placed on the scrapheap of financial/economic history.  I realize this is a radical, you might even say a fringe idea.  But, it you think about it, it is no more an extreme idea today than the abolition of slavery was in the 1840s and equal rights were for black Americans in the 1950s.  Slavery was eventually abolished and equal rights were given because it was the right thing to do.  When Americans realize the Federal Reserve in the 20th and early 21st centuries has enslaved them to a monetary system that benefits the political elite and favored rich at the expense of themselves, they should do the right thing and force Congress to eradicate the system.

The framework for our current Federal Reserve system was hatched at a secret meeting of bankers at Jekyll Island, Georgia in November 1913.  Orchestrated by JP Morgan, the goal of the system was to provide the nation with a “safer, more flexible, and more stable monetary and financial system.”  But, as will soon be pointed out, the Fed has never accomplished its mandate.  In fact, it has been used more as a vehicle by politicians to spend recklessly so they can get reelected and as a business plan for big banks to make a fortune.

As to the first accusation against politicians, it’s no secret that the federal government is broke.  Indeed, Washington owes a little over $11.6 trillion not including about $45 trillion in unfunded future liabilities for Social Security and Medicare.  Since September 28, 2007 the national debt has increased by about $4 billion a day.  So how is it that Washington can continue to spend us into oblivion on such ridiculous programs as cash for clunkers?  In a sweetheart arrangement the Fed monetizes the government’s debt by printing money and purchasing a bond (debt instrument) from Congress.  It then attempts to sell that bond to individuals, banks, countries, and other institutions as an investment.  Uncle Sam then must pay interest on that investment.  A big problem can immediately be realized – increasing debt means higher interest payments and higher interest payments means a larger percentage of the federal budget must be used just to service the debt.

To complete the sweetheart deal, Congress has given the Fed complete control of our money and the ability to keep secret its inner workings.  These inner workings include shady deals to bailout failed member banks and currency transfers to foreign banks.  Consequently, everyone wins – well sort of.  The politicians get to promise and deliver goodies to their constituents and special interests without any of the restraints faced by those with a fixed budget and the Fed can wheel and deal in helping its colleagues in the banking industry all over the world.  Let’s not forget too that the Fed is a political organization.  The members of the Federal Open Market Committee (FOMC) are appointed and reappointed by the president.  This means that the organ of the Fed that has primary responsibility for monetary policy is ultimately beholden to the president.  Consequently, the FOMC has historically maintained a policy of easy money because it is perceived that this is what keeps economies strong and the electorate happy. 

Now, I mentioned earlier that everyone wins from this arrangement, well sort of.  The politicians and bankers are big winners, but American workers, consumers, and taxpayers are big losers.  All that printing of money, selling of debt, and shady bank deals has a cost.  Unlike what Bernanke and the rest of the big spenders in D.C. want us to believe, just like any commodity, when the supply of dollars increases generally speaking the value goes down.  So as the Fed pumps too many dollars into the economy through the printing press, low interest rates, and the fractional reserve accounting scheme the value of our dollar falls.  Of course, this means that more dollars are generally needed to buy the same items.  In fact, the things we demand most should and do go up the most in price.  Look at the cost of healthcare, a college education, and automobiles.

Now, blanket statements are fine, but hard statistics really prove the point.  In the 95 years prior to the founding of the Fed, prices in the United States generally fell by about 35 percent.  This means that the same basket of goods that cost $100 in 1818 only cost $65 in 1913.  However, after the Fed began making our financial system safer, more flexible, and more stable, prices for the next 95 years increased by a phenomenal 2052 percent!  Thus, in 1913, a basket of goods costing $100 cost $2152.03 in 2008.  The biggest difference between 1818-1913 and 1913-2008 is the operation of the Fed during the latter time period.  In the previous period there was no central bank inflating the dollar supply and thus raising prices through the printing press, artificially low interest rates, and fractional reserve banking.  Additionally, during most of the 1818-1913 time period the U.S dollar was backed by gold.  This put a further restraint on reckless spending by Washington.  However, in 1933, FDR took us off the gold standard domestically and in 1971 Nixon closed the gold window to foreigners, thus ushering in the biggest spending era in U.S. history.

Reckless federal spending, big bank bailouts, and shady financial deals are all made possible through the Federal Reserve system.  This is why the system must go.  An even bigger reason the Fed must go is because it is responsible for perpetual price increases.  These price increases especially in things like healthcare enslave Americans – make many take two jobs, forego other purchases or work beyond normal retirement age.  This is why the Fed should be abolished and why eventually this idea like the abolition of slavery and equal rights will not be considered farfetched.