Tuesday, May 24, 2011

The Dems' 'breathtaking' refusal to pass a budget | Byron York | Politics | Washington Examiner

The Dems' 'breathtaking' refusal to pass a budget
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By: Byron York 05/23/11 9:00 PM
Chief Political Correspondent Follow Him @ByronYork
Photo by Alex Wong/Getty Images
U.S. Sen. Jeff Sessions (R-AL) (R) speaks as Rep. Paul Ryan (R-WI) (L), chairman of the House Budget Committee, listens during a news conference April 5, 2011 on Capitol Hill in Washington, DC. Sessions demanded Monday on the Senate floor that Senate Majority Leader Harry Reid (D-Nev.) put forward a Democratic budget plan.

"Let’s see it,” a frustrated Sen. Jeff Sessions said on the Senate floor Monday afternoon. “Let’s bring it forward.”

By “it,” Sessions meant a Democratic proposal for a 2012 federal budget. In recent days Sessions, the top Republican on the Senate Budget Committee, has been asking, pushing, pleading, cajoling and begging Senate Majority Leader Harry Reid to put forward a Democratic plan. So far, Reid has steadfastly refused.

That’s nothing new. The last time the Senate passed a budget was April 29, 2009, which was, if you are counting — and Jeff Sessions is — 755 days ago.

Passing a yearly budget for the federal government is a fundamental responsibility of Congress. Lawmakers do not have to spend their time naming post offices or passing health care reform. But they do have to pass a budget. In 2010, neither the House nor the Senate did so. It’s not that members just didn’t get around to it, which would have been scandalous enough. No, Reid and then-Speaker Nancy Pelosi feared that passing a budget would hurt their chances in the November midterm elections. So they did nothing and took a beating at the polls anyway.

Now Pelosi is out of the picture. But Reid is still at it. The Republican-controlled House has passed a budget, but Reid will not produce a Democratic spending proposal. And if Reid doesn’t want to pass a budget, then a budget won’t be passed; the majority leader controls what is and what is not considered in the Senate.

“There’s no need to have a Democratic budget, in my opinion,” Reid told the Los Angeles Times last week. “It would be foolish for us to do a budget at this stage.” Instead, Reid wants to wait to see if the deficit-reduction meetings led by Vice President Biden bear any fruit. Before that, Reid wanted to wait for the Gang of Six — now nearly defunct — to come up with something.

Sessions was appalled when he read Reid’s words. “It was a fundamental statement that they’re playing politics,” Sessions said. “They don’t think it’s politically smart to produce a budget. They’d rather produce nothing and attack Paul Ryan and the Republicans and think they’re going to gain politically by avoiding their fundamental statutory responsibility. It’s pretty breathtaking to me.”

Reid isn’t alone. The chairman of the Senate Budget Committee, Kent Conrad, is also happy to not produce a budget. Last week, he told reporters that he planned to “defer” work on a 2012 budget indefinitely.

It drives Republicans crazy that Democrats could so brazenly abandon such a basic responsibility. On Monday morning, all 47 GOP senators signed a letter to Reid in hopes of shaming the majority leader into action.

“Last year, Congress failed to pass a budget, failed to pass any of the twelve annual appropriations bills, and failed the nation by recklessly funding the government on a series of short-term spending bills,” the letter said. “The Senate cannot make the same mistake again.”

Oh, yes it can. At Reid’s instigation, the Senate will engage this week in a meaningless faux debate over the budget. Reid wants the Senate to vote on the House-passed GOP/Ryan budget, so that Reid and fellow Democrats can accuse Republicans of voting to kill Medicare. In return, Minority Leader Mitch McConnell will likely force a vote on President Obama’s proposed budget from a few months ago that did virtually nothing to reduce the deficit, so Republicans can accuse Democrats of ignoring the fiscal crisis.

All that will take place instead of the Senate having a substantive debate and coming up with a compromise budget that can actually pass.

At some point, one gang or another, or perhaps the Biden group, will likely produce a deal that will be presented to the public as a fait accompli. “I think that’s what Sen. Reid has in mind,” said Sessions. “I don’t believe the American people appreciated the secret negotiations that went on with regard to the health care bill or the immigration bill, and I don’t think they’re going to be very pleased to have some sort of a budget plopped down on them, with the Senate expected to vote up or down without any real debate or opportunity to make a difference.”

The most amazing thing about all this, to Republicans, is that Reid’s abdication of responsibility has attracted so little attention. In a country drowning in debt, where’s the outrage?

Read more at the Washington Examiner: http://washingtonexaminer.com/politics/2011/05/dems-breathtaking-refusal-pass-budget#ixzz1NHvt3p8E

Lawsuit challenges constitutionality of Colorado's TABOR amendment - The Denver Post

Lawsuit challenges constitutionality of Colorado's TABOR amendment
By Tim Hoover
The Denver Post
Posted: 05/23/2011 01:00:00 AM MDT
Updated: 05/23/2011 08:20:50 AM MDT

In a case that could affect citizen initiatives nationally, a bipartisan group of current and former state legislators and local officials is expected to file a lawsuit today in federal court challenging the constitutionality of Colorado's Taxpayer's Bill of Rights.

The suit alleges that TABOR, which prohibits the legislature from raising taxes without a vote of the people, limits the General Assembly's power in violation of the U.S. Constitution guarantee that states have a "republican" government, in which the authority to govern is given to elected officials.

The plaintiffs argue in their legal petition that TABOR, which voters added to the state constitution in 1992, has caused "a slow, inexorable slide into fiscal dysfunction" in Colorado.

Attorney General John Suthers, a Republican whose office would be charged with defending TABOR, was out of the country and unavailable for comment last week.

Chief Deputy Attorney General Cynthia Coffman said that while she could not comment on a lawsuit that state attorneys had not yet reviewed, the attorney general's office would "vigorously defend" TABOR in court.

TABOR limits state revenue, and it requires all governments to get voter approval for tax increases.

The lawsuit is being led by Rep. Andy Kerr, D-Lakewood, and includes 33 other plaintiffs, including three other current Democratic lawmakers.

Former state Sen. Norma Anderson, R-Lakewood, and former Rep. Bob Briggs, R-Westminster, also added their names to the lawsuit.

The litigation is the handiwork of Boulder Republican attorney Herb Fenster, whose career spans five decades and has featured high-profile cases in Washington, D.C., including defending former Interior Secretary Gale Norton in Indian trust litigation and battling then-Defense Secretary Dick Cheney over the cancellation of a multibillion-dollar contract for the A-12 stealth fighter.

Fenster is joined in the effort by other lawyers, including former Congressman David Skaggs and former state Sen. Mike Feeley of Lakewood, both Democrats.

All the attorneys are working pro bono on the case.

Skaggs and Feeley said that while the legal arguments behind the lawsuit have been swirling around Colorado for years, the state's most recent budget crisis — which has resulted in several years of deep cuts to education — brought a new urgency to the issue.

"Lately, people have taken a harder look at what is wrong here, what is the problem," Feeley said.

"Deterioration of the state's funding base has been slowed by many attempts to patch, cover over, or bypass the straitjacket of TABOR," the plaintiffs argue. "However, events have demonstrated that a legislature unable to raise and appropriate funds cannot meet its primary constitutional obligations or provide services that are essential for a state."

TABOR defenders such as Jon Caldara, president of the libertarian-conservative Independence Institute, say the lawsuit is not just an attack on TABOR.

"It's again another attack on the initiative process in Colorado," said Caldara, who has sponsored a number of prior initiatives.

If TABOR is unconstitutional, why wouldn't Amendment 23 — the voter-approved measure that requires spending on public schools to increase every year — also be unconstitutional? Caldara asked.

"On the fanciful chance that he (Fenster) is actually going to be successful," Caldara said, "every initiative that the citizens of Colorado have passed will be summarily ripped from the books."

Feeley agreed that while the case could have wider repercussions, he said, "We're not going after anything but TABOR."

But the language in the lawsuit makes clear it is intended to resolve a fundamental conflict between republican government and direct democracy.

"At our nation's birth, some 3 million citizens acted through their representatives at a constitutional convention to commit the nation to a government of representative democracy, a republic, and rejected direct democracy," the lawsuit argues. "Today, the Constitution carries the same commitment in a nation of over 300 million people."

"Frustration with the work of legislatures, whether federal or state, may indicate a need for representative institutions to be more effective, but that frustration does not justify or permit resorting to direct democracy," the suit states.

There is wide agreement that the case sails into largely uncharted legal waters.

Scott Moss, a professor of constitutional law at the University of Colorado at Boulder, said the most relevant case from the U.S. Supreme Court is nearly 100 years old, and in that instance, the high court essentially punted on the question of whether an initiative violates the "guarantee clause" that requires that states have a republican form of government.

"It's always tough to predict a case when nobody was alive for the last relevant decision," Moss said. "The plaintiffs have a nonfrivolous argument, but they'd be asking the court to make new law."

Tim Hoover: 303-954-1626 or thoover@denverpost.com
Who's behind it

Plaintiffs in the lawsuit challenging the constitutionality of the Taxpayer's Bill of Rights, or TABOR


• State Rep. Andy Kerr, Lakewood

• Elaine Gantz Berman, member of the State Board of Education, Denver

• Paul Booth, instructor at Fort Lewis College, Durango

• William Bregar, member of the Pueblo District 70 Board of Education, Pueblo

• Trudy Brown, citizen of Denver

• Dr. Richard Byyny, director of the Center for Health Policy at the University of Colorado Hospital and former chancellor of the CU-Boulder campus, Boulder

• State Rep. Lois Court of Denver, Denver

• Theresa Crater, professor at Metro State College of Denver, Lafayette

• Stephanie Garcia, member Pueblo City Board of Education, Pueblo

• State Rep. Dickey Lee Hullinghorst, Boulder

• Nancy Jackson, Arapahoe County commissioner, Aurora

• State Rep. Claire Levy, Boulder

• Margaret "Molly" Markert, Aurora city councilwoman, Aurora

• Monisha Merchant, member of the University of Colorado Board of Regents, Lakewood

• Former state Rep. Michael Merrifield, Manitou Springs

• State Senate Majority Leader John Morse, Colorado Springs

• Pat Noonan, former Arapahoe County commissioner, Aurora

• Ben Pearlman, Boulder County commissioner, Lyons

• Frank Weddig, Arapahoe County commissioner, Aurora

• Former state Rep. Paul Weissmann, Louisville


• Former state Sen. Norma Anderson of Lakewood

• Jane Barnes, member of the Jefferson County Board of Education, Lakewood

• Alexander Bracken, former member of the Colorado Commission on Higher Education and former president of the University of Colorado, Lafayette

• Former state Rep. Bob Briggs of Westminster, a city councilman in Westminster

• Bruce Broderius, member of the Weld County District 6 Board of Education, Greeley

• Former state Rep. John Buechner, a current Lafayette city councilman and former president of CU, Lafayette

• Stephen Burkholder, former mayor and councilman in Lakewood, Lakewood

• Robin Crossan, president of the Steamboat Springs RE-2 Board of Education, Steamboat Springs

• Richard Ferdinandsen, former Jefferson County commissioner, Arvada

• Former state Rep. William Kaufman, member of the Colorado Transportation Commission, Windsor

• Marcella "Marcy" Morrison, Manitou Springs

• Joseph P. White, teacher at ThunderRidge High School, Highlands Ranch


• Megan Masten, parent, Highlands Ranch

• Wallace Pulliam, former director of the Regional Transportation District, Arvada

Read more: Lawsuit challenges constitutionality of Colorado's TABOR amendment - The Denver Post http://www.denverpost.com/ci_18118976#ixzz1NFMvAIKe
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Monday, May 23, 2011

It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

A lot of people are very upset about the rapidly increasing U.S. national debt these days and they are demanding a solution. What they don't realize is that there simply is not a solution under the current U.S. financial system. It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

And the U.S. government would still be massively in debt.

So why doesn't the U.S. government just fire up the printing presses and print a bunch of money to pay off the debt?

Well, for one very simple reason.

That is not the way our system works.

You see, for more dollars to enter the system, the U.S. government has to go into more debt.

The U.S. government does not issue U.S. currency - the Federal Reserve does.

The Federal Reserve is a private bank owned and operated for profit by a very powerful group of elite international bankers.

If you will pull a dollar bill out and take a look at it, you will notice that it says "Federal Reserve Note" at the top.

It belongs to the Federal Reserve.

The U.S. government cannot simply go out and create new money whenever it wants under our current system.

Instead, it must get it from the Federal Reserve.

So, when the U.S. government needs to borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds for themselves (which happens a lot these days).

So that is how the U.S. government gets more green pieces of paper called "U.S. dollars" to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on.

So every time the U.S. government does this, the national debt gets even bigger and the interest on that debt gets even bigger.

Are you starting to get the picture?

As you read this, the U.S. national debt is approximately 12 trillion dollars, although it is going up so rapidly that it is really hard to pin down an exact figure.

So how much money actually exists in the United States today?

Well, there are several ways to measure this.

The "M0" money supply is the total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks. As of mid-2009, the Federal Reserve said that this amount was about 908 billion dollars.

The "M1" money supply includes all of the currency in the "M0" money supply, along with all of the money held in checking accounts and other checkable accounts at banks, as well as all money contained in travelers' checks. According to the Federal Reserve, this totaled approximately 1.7 trillion dollars in December 2009, but not all of this money actually "exists" as we will see in a moment.

The "M2" money supply includes everything in the "M1" money supply plus most other savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000). According to the Federal Reserve, this totaled approximately 8.5 trillion dollars in December 2009, but once again, not all of this money actually "exists" as we will see in a moment.

The "M3" money supply includes everything in the "M2" money supply plus all other CDs (large time deposits and institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements. The Federal Reserve does not keep track of M3 anymore, but according to ShadowStats.com it is currently somewhere in the neighborhood of 14 trillion dollars. But again, not all of this "money" actually "exists" either.

So why doesn't it exist?

It is because our financial system is based on something called fractional reserve banking.

When you go over to your local bank and deposit $100, they do not keep your $100 in the bank. Instead, they keep only a small fraction of your money there at the bank and they lend out the rest to someone else. Then, if that person deposits the money that was just borrowed at the same bank, that bank can loan out most of that money once again. In this way, the amount of "money" quickly gets multiplied. But in reality, only $100 actually exists. The system works because we do not all run down to the bank and demand all of our money at the same time.

According to the New York Federal Reserve Bank, fractional reserve banking can be explained this way....

"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+...=$1,000)."

So much of the "money" out there today is basically made up out of thin air.

In fact, most banks have no reserve requirements at all on savings deposits, CDs and certain kinds of money market accounts. Primarily, reserve requirements apply only to "transactions deposits" – essentially checking accounts.

The truth is that banks are freer today to dramatically "multiply" the amounts deposited with them than ever before. But all of this "multiplied" money is only on paper - it doesn't actually exist.

The point is that the broadest measures of the money supply (M2 and M3) vastly overstate how much "real money" actually exists in the system.

So if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this....

#1) If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.

#2) The only way to create more money is to go into even more debt which makes the problem even worse.

You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.

If you owe more money than ever was created you can never pay it back.

That means perpetual debt for as long as the system exists.

It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that.

So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.


It has been suggested that the same dollar can be used to pay off debt over and over - this is theoretically true as long as the dollar remains in the system.

For example, if the U.S. government gives China a dollar to pay off a debt, there is a good chance that the U.S. government will be able to acquire that dollar again and use it to pay off another debt.

However, this is not true when debt is retired with the Federal Reserve. In that case, money is actually removed from the system. In fact, because of the "money multiplier", when debt is retired with the Federal Reserve it can remove ten times that amount of money (and actually more, but let's not get too technical) from the system.

You see, fractional reserve banking works both ways. When $100 is introduced into the system, it can theoretically create $1000 as the example in the article above demonstrates. However, when that $100 is removed, it can have the opposite impact.

And considering the fact that the Federal Reserve "purchased" the vast majority of new U.S. government debt last year, we have got a real mess on our hands.

Even if a way could be figured out how to pay off all the debt we owe to foreign nations (such as China, Japan, etc.) it would still be mathematically impossible to pay off the debt that we owe to the Federal Reserve which is exploding so fast that it is hard to even keep track of.

Of course we could repudiate that debt and shut down the Federal Reserve, but very few in Washington D.C. have any interest in doing that.

It has also been suggested that instead of just using dollars to pay off the U.S. national debt, we could use the assets of the U.S. government to pay it off.

That is rather extreme, but let us consider that for a moment.

That total value of all physical assets in the United States, both publicly and privately owned, is somewhere in the neighborhood of 45 to 50 trillion dollars. Of course the idea of the U.S. government "owning" every single asset of the American people is repugnant to our entire way of life, but let's assume that for a moment.

According to the 2008 Financial Report of the United States Government, which is an official United States government report, the total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed 65 TRILLION dollars. This amount is more than the entire GDP of the whole world.

In fact, there are other authors who have written that the actual figure for the future liabilities of the U.S. government should be much higher, but let's be conservative and go with 65 trillion for now.

So, if the U.S. government took control of all physical assets in the United States and sold them off, it could not even make enough money to pay for everything that the U.S. government is already on the hook for.


If you have not read the 2008 Financial Report of the United States Government, you really should. Actually the 2009 report should be available very soon if it isn't already. If anyone knows if it is available, please let us know.

The truth is that the U.S. government is in much bigger financial trouble than we have been led to believe.

For example, according to the report (which remember is an official U.S. government report) the real U.S. budget deficit for 2008 was not 455 billion dollars. It was actually 5.1 trillion dollars.

So why the difference?

The CBO's 455 billion figure is based on cash accounting, while the 5.1 trillion figure in the 2008 Financial Report of the United States Government is based on GAAP accounting. GAAP accounting is what is used by all the major firms on Wall Street and it is regarded as a much more accurate reflection of financial reality.

So needless to say, the United States is in a financial mess of unprecedented magnitude.

So what should we do? Does anyone have any suggestions?

***UPDATE 2***

We have received a lot of great comments on this article. Trying to understand the U.S. financial system (even after studying it for years) can be very difficult at times. In fact, it can almost seem like playing 3 dimensional chess.

Several readers have correctly pointed out that when the U.S. money supply is expanded by the Federal Reserve, the interest that is to be paid on that new debt is not created.

So where does the money to pay that interest come from? Well, eventually the money supply has to be expanded some more. But that creates even more debt.

That brings us to the next point.

Several readers have insisted that the Federal Reserve is not privately owned and that since it returns "most" of the profits it makes to the U.S. government that we should not be concerned about the debt owed to it.

The truth is that what you have with the Federal Reserve is layers of ownership. The following was originally posted on the Federal Reserve's website....

"The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year."

So Federal Reserve "stock" is owned by member banks. So who owns the member banks? Well, when you sift through additional layers of ownership, you will ultimately find that people like the Rothschilds, the Rockefellers and the Queen of England have very large ownership interests in the big banks. But there are so many layers of ownership that they are able to disguise themselves well.

You see, these people are not stupid. They did not become the richest people in the world by being morons. It was the banking elite of the world who designed the Federal Reserve and it is the banking elite of the world who benefit the most from the Federal Reserve today. In the article above when we described the Federal Reserve as "a private bank owned and operated for profit by a very powerful group of elite international bankers" we may have been oversimplifying things a bit, but it is the essence of what is going on.

In an excellent article that she did on the Federal Reserve, Ellen Brown described a number of the ways that the Federal Reserve makes money for those who own it....

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered "for profit" corporations.

In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their "reserves." The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in "reserve" can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total "loans and leases in bank credit" as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.

The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ -- for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.

The reality is that there are a lot of ways that the Federal Reserve is a money-making tool. Yes, they do return "some" of their profits to the U.S. government each year. But the Federal Reserve is NOT a government agency and it DOES make profits.

So just how much money is made over there? The truth is that we have to rely on what the Federal Reserve tells us, because they have never been subjected to a comprehensive audit by the U.S. government.


Right now there is legislation going through Congress that would change that, and the Federal Reserve is fighting it tooth and nail. They are warning that such an audit could cause a financial disaster.

What are they so afraid of?

Are they afraid that we might get to peek inside and see what they have been up to all these years?

If you are a history buff, then you probably know that debates about a "central bank" go all the way back to the Founding Fathers.

The European banking elite have always been determined to control our currency, and that is exactly what is happening today.

Ever since the Federal Reserve was created, there have been members of the U.S. Congress that have been trying to warn the American people about the insidious nature of this institution.

Just check out what the Honorable Louis McFadden, Chairman of the House Banking and Currency Committee had to say all the way back in the 1930s....

"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders."

The Federal Reserve is not the solution and it never has been.

The Federal Reserve is the problem.

Any thoughts?

Friday, May 20, 2011

Red Tape - IRS snafu leaves taxpayers, refunds in limbo for months

IRS snafu leaves taxpayers, refunds in limbo for months
By Bob Sullivan

It's perhaps the very definition of Red Tape. Four years ago, Congress decided that the IRS should get into the banking business, authorizing it to give out no-interest loans to first-time homebuyers. That put the agency in the position of both collecting loan payments and issuing tax refunds to the roughly 1 million taxpayers who took advantage of the program.

This year, the odd arrangement overwhelmed IRS systems, and an unspecified number of taxpayers have been forced to wait four months or more for their tax refunds. In fact, many are still waiting.

"This is frustrating for taxpayers, and it's frustrating for us," said IRS spokesman Terry Lemons. "We deeply apologize."

Making matters worse, taxpayers caught up in the vortex say they've been promised delivery dates for their refunds repeatedly, only to be disappointed or to discover their returns have been placed back into "error" status.

One of those taxpayers who's been tantalized by repeated promises of a refund check is Tia Littlejohn, who lives in Maryland just outside Washington, D.C. She and her husband are planning to use their expected $6,800 refund to pay for in vitro fertilization. She's had to postpone the procedure twice because promised tax refund dates have come and gone without payment.

"At this point, I may have to just cancel it," she said. "It's really affecting our household. It's very stressful."

Her litany of hope and disappointment is typical.

"Our return was processed February 19 with a refund date of March 4. Well, March 4 came and went. Since then we have been waiting, every other week we have a different error code and the date of a possible direct deposit," she said. "On April 27 they told me they told me my return was done and 'out of error.' Last week they told me I should receive it May 20. Then (Wednesday) I looked and it's gone back into error again."

Lemons said the IRS has devoted a lot of extra labor toward solving the problem and began manually processing the returns after the problem was discovered in February. The number of victims has been whittled to "a few thousand taxpayers," he said.

More on the First Time Homebuyer tax credit

That's cold comfort to people who have been waiting months for thousands of dollars. A Facebook group devoted to taxpayers caught up in the mess now has more than 3,000 members; they write daily about their mind-numbing frustrations. Many are now being told their returns won't arrive until mid-June.

"I had a date, and a second date ... and now I'm back at 1201 (error). My advocate said that it's just sitting there. WTF IRS?" Jannae Leonard Powell wrote Thursday.

The Facebook page has become a support group for some, a place where taxpayers share tips on the best time to call , the best number to call and how to reach the most helpful phone agents. Littlejohn said many in the group have received frequent rude treatment, so they just hang up repeatedly until a "nice" agent answers.

"Some are very nice, but some are very nasty and basically say, 'I don't know what else to tell you. You are just going have to wait,'" she said.

All the taxpayers involved in the glitch took advantage of a one-time, misnamed First Time Homebuyer tax “credit” offered during the 2008 tax year, a program that turned out to be a meager effort by Congress to prop up the then-imploding housing market. Homebuyers who took advantage didn't actually receive a credit — they were granted what was essentially an interest-free loan of up to $7,500, to be paid back in $500 increments starting in 2010. Subsequent versions of the program granted homebuyers an outright tax credit, so the 2008 users already have something to moan about.

Lemons said IRS systems weren't set up to handle the many variables that ultimately came from the program, such as how to calculate repayment of the loans if buyers got divorced, or ended up in foreclosure. One particularly vexing and unexpected problem: Many taxpayers are paying more than the minimum $500 annual payment in an effort to pay off the loan early.

"That has complicated matters," he said. "These are well-intentioned homeowners, but our initial programming was that payments would be spread out equally over 15 years." Programmers of complex systems will understand this as a typical problem of "unexpected input."

Stephanie Vega used the tax break loan to buy a house in 2008 and accommodate her growing family shortly after she had twins. The family bought a foreclosure property that needed major cosmetic repair at the time — and still does. They planned to use this year's refund to repair their master bathroom, which has been essentially unusable since the purchase.

"When I called at the end of March, they said they were going to get everyone who was affected by this their money by April 5th," Vega said. "That came and went, and obviously no money. … They all contradict what the one before them say. You just don't know who to believe."

Vega, like many of the other taxpayers, has been assigned an agent in the IRS Taxpayer Advocate's Office, but she said that hasn't helped much.

"Normally, I am not a pushy person, and so usually I just sit back and wait. I don't like to be a pain or a bother, but we are needing our money now," Vega said. "I just feel like the complete lack of communication, along with the IRS seemingly just sweeping this problem under the rug, is so unfair and unjust."

Amy Royer, 37, had to wait more than three months, but she just received her $4,700 refund last Friday. Even so, she still feels angry about her interactions with the IRS.

"The whole thing was a pretty bad experience," she said. "Most of the frustration came because of the inconsistency, the different stories we got about the status of our refunds. It was a fiasco, really."

Royer had also planned to use her refund to take care of a medical procedure. Because she was promised a refund on March 8, she went ahead with sinus surgery on March 1 and paid with credit, assuming the refund money would arrive and cover the bill. The refund's tardiness caused her to pay high interest and set her blood boiling.

"The whole time, I was saying, 'I would have a different feeling about things if we were getting real answers,'" she said. "It's our money, not their money."

With the problem having shrunk to a few thousand taxpayers, it might be hard to understand why the IRS hasn't been able to manually overcome its computer issues and issue refunds. Lemons said that the agency is trying but that the problem arose at the worst possible time.

"This time of year, we have tens of millions of tax returns coming in. It's all hitting at the busiest time of year," he said. "Our people have been hustling for weeks to get this thing squared away, but the bottom line is there are people who have not gotten refunds yet, and we deeply apologize."


Many consumers enjoy the rush of a large tax refund check and use their regular payroll deductions as a kind of forced savings plan. That's a bad idea.

This Red Tape tale is a good reminder to all that now is a good time to double-check your regular payroll deduction. There is no good reason to overpay federal taxes during the year in order to build up a large tax refund. That amounts to no-interest loan to the government, and you are better off keeping that money throughout the year and putting it in the bank yourself. Obviously, it's better for you to receive the interest, rather than Uncle Sam. But perhaps more important, in an economy where even Standard & Poor's is beginning to doubt Washington's ability to pay its bills and where the federal government faces threatened work shutdowns annually, it's bad to trust your money to the whim of Uncle Sam. In the past, state governments have delayed issuing refunds to help close budget gaps — it's not unthinkable that Congress could try that someday.

If you received a large refund this year, that's nothing to celebrate. You should adjust your payroll withholding accordingly, ASAP.

Tuesday, May 17, 2011

American Thinker: Just Who is Gouging Us on Gasoline?

Just Who is Gouging Us on Gasoline?
By Jeff T. Allen
Americans are fed up with high gas prices, and some U.S. senators are getting disgusted enough to act. Appearing in front of an Exxon gas station last week, Charles Schumer and several other senators called for the elimination of tax deductions oil companies use in their business of finding, refining, and marketing the precious energy we use. It is time we are outraged by blatant greed at the gas pump, they implored. Some of us agree, but for different reasons. Let's have the courage to name those who are getting the biggest cut from our gasoline dollars, and put a stop to it.

Understand where our money goes when we fill up at our corner station. Oil company profit is one place: the after-tax profits earned by the most successful oil companies in America works out to about 8-9% of revenues. That's 8 cents of every dollar we spend at the pump, and it's been much lower in years when prices are squeezed by too much supply. Sometimes there are no profits, but rather huge costs, if mistakes that get nasty are made in exploration or transportation (e.g. Exxon Valdez and BP Gulf spills).

The senators standing in front of the gas station would have you think such profit is the biggest chunk of your purchase price -- but it isn't even close. The taxes on gasoline at retail amount to a national average of 47 cents per gallon (including federal taxes of 18 cents, state and local taxes of 18 cents, and sales/other taxes at retail of more than 10 cents). And before taxpayers have paid that princely sum (to people who haven't invested a penny to produce the product), the operating profits of the explorers are taxed at 34% -- which is always passed on to consumers in the form of higher prices. States get into the act here too, taxing the retailers' profits after taxing the product at the pump. And let's not forget the other costs that drive up the gallon price, such as drilling restrictions that force explorers 5 miles deep under the ocean, transportation regulations and taxes, refining regulations, licenses, leases, and myriads of others.

Pulling huge quantities of wealth out of the ground isn't easy. Finding and refining oil takes knowledge of geology, drilling technology, finance, transportation logistics, and environmental science. Pulling even larger amounts of wealth out of taxpayers, however, takes only two things: ignorance and envy.

You see, average Americans have no concept of what it takes to deliver a gallon of gasoline to their neighborhoods -- for 1/10 the price/oz. of the latte they buy on the same corner. Most Americans aren't geologists. And they don't like high prices. So Americans routinely grumble about oil company profits, without any knowledge of the relative size of them or what risks it takes to earn them. Yet it is clearly the government which benefits most from our purchases at the pump, without lifting a finger to make the product.

Ignorance and envy are something our senators are banking on when they rail against oil profits. Our media culture loves to help them. But if corporations are to be "accountable" for egregious profits, where is the senatorial and media outrage over other company profits? Microsoft earns record profits of $18 billion, more than 30% of its revenues net of all taxes. The latte-maker Starbucks earns 11% of revenue. But there is no move from Mr. Schumer & Friends decrying the write-offs of Microsoft's development costs. Why isn't Mr. Schumer standing in front of Best Buy railing against the taxpayer "subsidy" of Microsoft? Do Microsoft's contributions to his campaign have any influence on his choice of targets? Is Microsoft (or any company) more worthy of egregious gain than Exxon?

If the public weren't so ignorant and envious of such capitalist exercises as making gasoline, perhaps they might turn their attention toward the biggest cost in their lives and also the biggest reason gas prices are high: government. If the government would spend less time punishing and restricting energy exploration and delivery, we might have more energy. If the government, however, wants to raise the after-tax costs of producing energy, we will surely get less, driving prices higher still.

As government elites gain greater money and power from exploiting our ignorance, they posture again about taxpayers and pump prices. But they really don't care about taxpayers and pump prices at all. Nothing in their behavior over energy policy leads to that conclusion. Rather than sticking up for taxpayers and consumers, the biggest pigs at the trough are looking for another way to stick it to taxpayers and consumers. In classic Atlas Shrugged fashion, the know-nothings mooching off the productivity and ingenuity of capitalists take the public stage to throw sand in the gears of a vital American output engine. The gouging continues.

Monday, May 16, 2011

American Thinker: The Article Liberals Are Too Stupid to Write (and Republicans too reluctant to read)

The Article Liberals Are Too Stupid to Write (and Republicans too reluctant to read)
By Randall Hoven
Why, after all this, does President Obama enjoy an approval rating near 50%? How can people even think of voting for him over the Republican nominee in 2012? Well wonder no more.

The economy.

* The Great Recession, which began in 2007, ended in June 2009, just five months after Obama was sworn into office.
* Since June 2009, real Gross Domestic Product has grown in every quarter, at an average annual rate of 2.8%. In the preceding eight years, from 2000 to 2008 (4th quarter to 4th quarter), average growth was only 1.7% per year. Real GDP is now at an all-time high.
* Over the last 14 months, over two million private sector jobs were added to the economy. Over that same period, over 300,000 government jobs were cut.
* The stock market is up over 60% since Obama was inaugurated. It is now at levels not seen since June 2008, or before Bush bailed out Fannie and Freddie and gave us TARP.


* There has been no tax increase since Obama entered office. In fact, he cut taxes.
* The tax rates enacted under President Bush were extended. We are now paying at the same tax rates we were in 2007 and 2008, if not less.
* The stimulus was about one third tax cuts and tax credits.
* As part of the legislation extending the Bush tax rates, Obama added billions more in tax cuts and credits.
* A big reason that the federal deficit is so large is that federal receipts are 4.1% of GDP lower in 2011 than in 2007. (OMB Table 1.2)


* It is true that the federal government is spending 4.6% of GDP more in 2011 than it did in 2008, but 67% of that is due to built-in increases in the mandatory programs, primarily Social Security and Medicare, and interest on the debt. Another 15% of that increase is due to increased Defense spending. (OMB Table 8.4)
* Non-defense discretionary spending increased only 0.7% of GDP from 2008 to 2011. That is, 85% of the increase in spending was either outside the President's control or was due to increased Defense spending.

The War On Terror.

* Osama bin Laden was killed by US forces. His computers, notebooks and other materials were taken into custody in one of the greatest anti-terror intelligence finds ever.
* The troop drawdown in Iraq essentially followed the plans of President Bush. When Obama was inaugurated, there were 142,000 US troops in Iraq. One year later there were still 110,000 US troops there. Even now, almost 2 ½ years into Obama's term, 46,000 US troops remain in Iraq.
* In Afghanistan, Obama more than tripled the number of US troops there: from about 33,000 to 100,000. He essentially gave his generals, such as Petraeus, everything they asked for.
* Obama has ordered more drone attacks than Bush ever did.
* Gitmo is still open and in business with about 160 jihadis in cells there. Military tribunals continue.
* The Patriot Act was extended.
* On February 22, Sarah Palin said, "NATO and our allies should look at establishing a no-fly zone so Libyan air forces cannot continue slaughtering the Libyan people." Within weeks, by March 17, the UN approved such a no-fly zone and by March 19, US forces and NATO allies were part of the coalition enforcing that no-fly zone.
* Obama retained George W. Bush's Secretary of Defense, Robert Gates.


* In 2005, the Republican-led Congress mandated that 652 miles of fence be built along the US-Mexican border. That fence is now 649 miles long, or 99.5% complete.
* There are almost 20% more border agents now than when Obama took office, bringing the number to an historical high.
* More illegal aliens are being deported than ever before, especially criminal aliens.
* Comparing 2010 to 2008: 31% more criminal aliens were apprehended; 38% more criminal aliens were processed for removal; 93% more criminal aliens were ordered removed; and 40% fewer re-entered the US.

Compared to other advanced economies.

* According to IMF figures, the US economy grew 2.9% (inflation-adjusted) from 2007 to 2011 - the Great Recession years. That is more than 20 of the 34 countries classified as "advanced economies." Specifically, that is a better growth rate than Denmark (-2.4%), the UK (-2.2%), Spain (-2.2%), France (0.6%), the Netherlands (1.1%), Germany (1.9%), and Norway (2.7%).
* In 2011, net government debt in the US was 72.4% of GDP. While high, 8 of 26 advanced economies had higher: Belgium, France, Greece, Ireland, Italy, Japan, Portugal and the UK, ranging from 75% of GDP (UK) to 152% (Greece).

Compared to Republicans.

* The bailout of banks? Bush started that.
* The bailout of auto companies? Bush started that.
* Government take-over of Fannie Mae and Freddie Mac, and 90% of the home mortgage business that went with them? Bush did that.
* Adding a new entitlement? Bush did that (Medicare Part D), to the tune of almost $8 trillion in unfunded government liabilities, more than the entire unfunded liability of Social Security.
* Ethanol subsidies? Pushed by many Republicans and expanded by Bush.
* Outlawing light bulbs? Bush did that.
* Mandating individual health insurance? Mitt Romney did that.
* "Comprehensive" immigration reform? Both Bush and McCain pushed that.
* Campaign Finance Reform? McCain pushed that and Bush signed it into law.
* No Child Left Behind? Ted Kennedy and George W. Bush pushed that, and Bush signed it into law.
* Earl Warren, Harry Blackmun and David Souter? All appointed to the Supreme Court by Republican Presidents.
* Do you want a vigorous attack against waterboarding? Just ask John McCain.
* Concerned about Climate Change? So are John McCain and Newt Gingrich.
* In favor of "Democrat" wars like Yugoslavia and Libya? So were most Republicans, McCain in particular.

Do I think Obama had anything to do with any of the good news above? No. Most of it was on automatic pilot. Recessions end, even if you do nothing about them. Obama was cautious enough to let Bush's War On Terror continue as planned, rhetoric aside. The bad things really were inherited - from LBJ and FDR. Entitlements are eating up everything.

Did Obama's stimulus help? No. Was it terrible? If we hadn't done it, government debt would be about 67% of GDP instead of 72%. My guess is the opposite of Obama's economic advisors: unemployment would have been one percentage point lower without the stimulus -- or 8% now instead of 9%. The stimulus was bad, but not the Apocalypse.

Is ObamaCare that terrible? Health care was already a mess. Now it is a bigger, costlier mess -- maybe 1% of GDP more costly. And trust me, Republicans will not end it. If we elect a Republican in 2012, within six months in office, if not before, his message will become some version of "mend it, don't end it." Wanna bet?

You might have read about various budget proposals. At one extreme we have Obama's proposed budget for 2012, which the CBO scored as costing 24.2% of GDP in 2021. At the other "extreme," we have Rep. Paul Ryan's plan, which the CBO scored as costing 20.25% of GDP in 2022. Obama's Deficit Commission proposed spending 21% of GDP.

That's it. This entire debate is about a difference that is less than 4% of GDP. According to IMF figures, government in the US is spending 41% of GDP in 2011. The current debate is about whether government spends 40% or 44% of GDP. That is, whether we should be more like Luxembourg (39%), Canada (42%) or Norway (44%).

Nine advanced economies, of 34, have smaller government than we have right now:

* Singapore (19% of GDP)
* Taiwan (20%)
* Hong Kong (21%)
* South Korea (21%)
* Switzerland (34%)
* Australia (36%)
* New Zealand (36%)
* Slovak Republic (38%)
* Luxembourg (39%)

Five of those nine already outrank us on the Heritage Freedom Index.

We are already a "European" country. In fact, we are more European than Switzerland and Luxembourg. We are to the European side of our English-speaking cousins of Australia, New Zealand and Canada. If we are anti-Obama because we don't want to be like Europe, that horse has already left the barn.

None of this changes my mind about Obama. I think he is a doctrinaire Marxist. I think he is one of the stupidest people to hold that office. And for my money he is by far the most obnoxious (the I-me-my president) in my lifetime, and perhaps history.

But that does not make him Satan. It makes him merely European. More precisely, 1980s European. Obama is behind the curve. He wants us to go where Europe has already been.

The real choice seems to be between East and West. If you look at the above international comparisons, we should become more like the Asian Tigers, Australia, New Zealand or even Canada. And we should be befriending China and India as they climb out of socialism and into freedom.

Obama is going in the other direction: imitating Europe (failing) and befriending the Middle East (failed).

I think that is the real choice: East or West. Unfortunately, there is really nothing to energize voters here, including me. It's not much comfort to know we're not too much worse than Canada.

The State of the States | ChiefExecutive.net | Chief Executive Magazine

The State of the States | ChiefExecutive.net | Chief Executive Magazine

Best/Worst States for Business | ChiefExecutive.net | Chief Executive Magazine

Best/Worst States for Business | ChiefExecutive.net | Chief Executive Magazine

CEOs Grade the States | ChiefExecutive.net | Chief Executive Magazine

CEOs Grade the States | ChiefExecutive.net | Chief Executive Magazine

Why Did Obama Run For President?

Why Did Obama Run For President?

By Neal Boortz

As Barack Obama hits the campaign train he’s cranking up the townhall-style events. These are events where Obama’s trusty teleprompter fails to make an appearance. But this also happens to be when we hear the true Obama … off the cuff, unscripted. So Obama did a townhall meeting yesterday the other day on the economy, and there we heard this little exchange with an audience member asking about jobs:

OBAMA: … part of the problem is not just folks who don't have work. It's also folks who have work seeing their incomes flat-line, and that is a decade-long trend. That's part of the reason I ran for President was because too many folks were losing ground. Between 2000 and 2009, during that decade, the average income for American families actually went down. Even though, as you said, the stock market was booming, corporate profits were way up, CEO pay was-

SMITH: Up 27 percent in the last year.

OBAMA: That's exactly right. So part of what's happened also is some structural changes in the economy, where it used to be that there was broad-based shared prosperity, now if companies are doing really well, they're not necessarily hiring back workers. They're just figuring out how to do more with fewer workers. That may increase profits, but it doesn't help folks who are looking for a job, and oftentimes, that outlook puts a lot of pressure on the people who are already on the job. So, some of the changes that are taking place in the economy are ones that took a decade or two to get to, and it's gonna take us several years for us to get back to where we need to be.

So here we have Barack Obama, a community organizer, admitting that part of the reason that he ran for president is because “too many folks were losing ground.” Interesting. There are two ways as an elected official to help people who are “losing ground.”

#1: You foster an economic environment which allows the private sector to thrive and the free market to create businesses, which in turn hire workers and make a profit.

#2: You use the police power of government to seize wealth from those who have it and redistribute it to those who are “losing ground.”

Now, consider what you know about Barack Obama …

* We have a man who was raised in a household where his main fatherly influence was a dedicated Marxist by the name of Frank Marshall Davis.

* Consider what we know of his days as a college student who realized that he could use government as a viable means of social change.

* Consider his statements on the campaign trail: “I think when you spread the wealth around, it’s good for everybody” or “I would raise capital gains taxes for the purposes of fairness.”

I’m going with option #2: redistributing the wealth. But even if you wanted to argue that Obama wants to help those “losing ground” by becoming president and bolstering our economy to help people earn a better living ….. then why would he go on in his townhall meeting to essentially demonize the very businesses that would hire people. Remember he said, “… it used to be that there was broad-based shared prosperity, now if companies are doing really well, they're not necessarily hiring back workers. They're just figuring out how to do more with fewer workers. That may increase profits, but it doesn't help folks who are looking for a job.”

Barack Obama is demonizing the way in which private companies are doing business in these poor economic times. Obama seems to think that the primary purpose of these businesses is to hire workers. He is wrong. The primary purpose of a business is to make money. Obama and the liberals can’t seem to wrap their brains around this concept. These businesses have no obligation to hire workers and “share the prosperity.” However, maybe these businesses WOULD be more willing to hire workers if our federal government would quit threatening to increase taxes on small businesses and get rid of asinine government regulations that only hamper growth. Barack Obama does not want to admit that his solution – government – is part of the problem. Instead, he blames private businesses for increasing their profits and not hiring workers.

That is the world according to Barack Obama.

Wednesday, May 11, 2011

And the award for the most ridiculous poll sampling goes to … « Hot Air

And the award for the most ridiculous poll sampling goes to …
posted at 9:30 am on May 11, 2011 by Ed Morrissey
regular view

Move over, CBS. Hang up the kid-leather gloves, WaPo/ABC. There’s a new sample-skewing sheriff in town, and it’s the Associated Press. In a new definition of “outlier,” the AP reported that its latest poll from GfK Roper shows Barack Obama with a 60% approval rating in a survey of 1001 adults, with even his approval on the economy shooting past the 50% mark:

President Barack Obama’s approval rating has hit its highest point in two years — 60 percent — and more than half of Americans now say he deserves to be re-elected, according to an Associated Press-GfK poll taken after U.S. forces killed al-Qaida leader Osama bin Laden.

In worrisome signs for Republicans, the president’s standing improved not just on foreign policy but also on the economy, and independent Americans — a key voting bloc in the November 2012 presidential election — caused the overall uptick in support by sliding back to Obama after fleeing for much of the past two years.

Comfortable majorities of the public now call Obama a strong leader who will keep America safe. Nearly three-fourths — 73 percent — also now say they are confident that Obama can effectively handle terrorist threats. And he improved his standing on Afghanistan, Iraq and the United States’ relationships with other countries.

Oddly — or perhaps not — the AP report doesn’t include a link back to the survey’s raw data. In order to find it, one has to go to GfK’s site for its AP polls. The partisan breakdown in the sample is found about halfway through the PDF, and it explains a great deal about how Obama managed to get such a high boost in this poll while others showed shallow bumps that had already started to subside.

The Dem/Rep/Ind breakdown in this poll is 46/29/4, as AP assigned most of the leaners to the parties. That is a 17-point gap, more than twice what was seen in the 2008 actual popular vote that elected Obama. It only gets worse when independents are assigned properly. When taking out the leaners, the split becomes — I’m not kidding — 35/18/27. Oh, and another 20% “don’t know.” That’s significantly worse than the March poll, in which the proper D/R/I was 29/20/34, and far beyond their post-midterm sample of 31/28/26. It’s pretty easy to get Obama to 60% when Republicans are undersampled by almost half.

Frankly, this sample is so bad that no real insights can be gleaned from it. I think it’s time to break out the Billy Madison verdict:

Kenya investigated Obama 'African birth'

Kenya investigated Obama 'African birth'

Tuesday, May 10, 2011

American Thinker: The Independent Payment Advisory Board (IPAB) is NICE

The Independent Payment Advisory Board (IPAB) is NICE
By Joe Herring
In March of 2010, then-Speaker of the House Nancy Pelosi famously said, "We have to pass the [health care] bill so that you can find out what is in it." Subsequent study of this leviathan legislation has brought some truly startling revelations to light; however, the establishment of the Independent Payment Advisory Board (IPAB) will likely prove the most dangerous to our liberty.

IPAB is a fifteen-member board, appointed by the president and charged with developing recommendations regarding procedures, medications, and spending priorities for Medicare and Medicaid. Ostensibly, the board members are to discover ways to implement the best practices, devising methods by which these programs may provide better services at lower costs.

To describe this board as a "death panel," as Rush Limbaugh has, is to underestimate its power and misconstrue its purpose. While it is true that IPAB will decide which life-saving treatments and drugs Medicare and Medicaid recipients may access, its ultimate function will be to serve as a lever with which to pry the entire health care industry from private hands.

In Britain's National Health Service, there exists an identical organ: the National Institute for Clinical Excellence (NICE). (My previous articles on NICE can be found here and here.) Because Britain is an entirely socialized medical system, NICE wields power over the health care options of all residents of Great Britain. IPAB, initially, will make decisions regarding only the government-administered programs of Medicare and Medicaid. This is simply a stepping-off point, however, as the White House Deputy Chief of Staff Nancy-Ann DeParle admits (italics mine):

Experts from the Commonwealth Fund wrote "the Affordable Care Act includes important provisions that will finally begin to control unchecked health care costs, such as...the creation of the Independent Payment Advisory Board. Building on and extending these provisions across the health system has the greatest promise of slowing the growth of government health care budget outlays, private insurance premiums, and underlying health care cost trends."

Interestingly though, the enacting legislation has been written in such a way as to preclude any meaningful attempts toward reform of costs by IPAB.

According to whitehouse.gov, "IPAB is specifically prohibited by law from recommending any policies that ration care, raise taxes, increase premiums or cost-sharing, restrict benefits or modify who is eligible for Medicare."

This inhibiting covenant is an attempt by the White House to preempt the arguments of Americans wary of government intrusion between themselves and their physicians. The actual purpose, I believe, is to bar access to all cost-saving avenues, save the one sought by the Obama administration. This is a failsafe mechanism written into the law that forces Congress out of the process.

Again from whitehouse.gov:

Congress then has the power to accept or reject these recommendations. If Congress rejects the recommendations, and Medicare spending exceeds specific targets, Congress must either enact policies that achieve equivalent savings or let the Secretary of Health and Human Services follow IPAB's recommendations.

When Medicare and Medicaid costs threaten to burst through the statutory ceiling, triggering action by IPAB, Congress will be faced with a Hobson's choice. IPAB can, and likely would, set the bar quite high for Congress by recommending huge cuts, using grossly inflated savings numbers, and making any equivalent cuts by Congress politically impossible to pass, resulting in certain inaction. Remember, every member of IPAB will be an Obama nominee, beholden to an administration with a laughably poor track record of veracity regarding fiscal matters. The pressure on IPAB to operate as a purely political instrument will be tremendous, if not irresistible.

Inaction on the part of Congress will effectively cede control to IPAB and HHS, leaving the administration unopposed in its effort to expand government control over the health care economy. Should Congress summon the courage to actually pass cuts equivalent to IPAB recommendations, the political fallout would be devastating. Either scenario plays to Obama's favor, and it is the purpose of IPAB to bring this about.

This is the Cloward-Piven strategy applied to health care. The ObamaCare legislation is chock full of measures designed to swell the ranks (and costs) of Medicare and Medicaid. The law creates entirely new classes of entitlements that not only will redound to the poor and elderly, but will inevitably co-opt the provider side of the industry as well. Cloward and Piven postulated that by overwhelming the system, you can collapse the system, leaving the people clamoring for a ready replacement and gladly trading their freedoms for security.

To understand IPAB and its intended role, it is essential to realize that ObamaCare isn't about health care, nor is IPAB about controlling costs. Both are mechanisms for building dependent constituencies, hopefully sufficient to provide the left electoral success for decades to come.

IPAB plays the role of goading agitator -- pitting groups dependent upon government largesse against those citizens from whom the government derives its funds. IPAB will demand, and Congress will reliably evade the tough decisions they were elected to make while bleating plaintively about their hands being tied by bureaucracy.

In Wisconsin we witnessed a grotesque belch of selfishness and entitlement on the part of public-sector unions. Despite their outsized salaries and benefits, the unions raised such a hue and cry over the prospect of losing a fraction of their boon that much of America watched their preening indignation with a mixture of revulsion and dread. How much more violent will the convulsions be when people are facing the prospect of medical rationing, the elimination of services for loved ones, and even death? Rather than a circumstance to be avoided, Obama and his advisors intend to amplify this rage in order to cow any opposition as they amass unassailable power.

In Britain, one assessment used by NICE in their cost-benefit rationale is the concept of "social usefulness." A necessarily subjective and entirely corrupt political calculation, social usefulness is nonetheless a significant factor in determining eligibility for life-saving or live-extending treatments in Britain. NICE is absolutely a rationing board. They don't deny it -- indeed, they celebrate their self-described "grown-up" treatment of the subject matter while simultaneously hiding behind the fig leaf of "citizen input" and "stakeholder consensus" when deciding who lives and who isn't worthy to draw another breath.

Dr. Donald Berwick, the recess-appointed head of the Centers for Medicare and Medicaid Services here in the United States, knows a thing or two about NICE. He was its architect. Berwick's think-tank, the Commonwealth Fund, is the leading apologist for single-payer health care in the United States and has long advocated installing our own version of NICE. IPAB will operate as an arm of the Centers for Medicare and Medicaid Services. Who better to direct and build a second Frankenstein's monster than Dr. Frankenstein himself? We need only look to Britain to see the failed model the Obama administration has imported.

The administration notoriously carved out special ObamaCare waivers for its friends and supporters. Can there be any doubt that these same supporters will be judged "socially useful" when rationing comes fully to our health care system? We will see Wisconsin ad infinitum once access to health care hinges on political patronage.

The author writes from Omaha, NE and can be reached at readmorejoe@gmail.com.
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Monday, May 9, 2011

American Thinker: Is Obama a Serial Liar?

Is Obama a Serial Liar?
By Nancy Morgan
Accusing someone of lying is a serious matter. Especially when that someone is the President of the United States. Charges of that nature should be leveled based only on absolute proof of a deliberate statement, intentionally made, whose sole purpose is to deceive. Based on this criterion, President Obama is a liar. Demonstrably so. And a disturbing pattern is emerging that allows for the possibility that our president is a serial liar. Consider:

In just the last month, Obama has made several statements that are just not so. Statements made to the American public that were in direct conflict with known facts.

In April, Obama flatly stated that implementing ObamaCare will reduce the deficit by $1 trillion. A day later, the Congressional Budget Office reported that statement was 'incorrect,' pegging the "deficit savings" at $210 billion over 10 years.

In the same April 15 speech, Obama stated that the tax burden on the wealthy is the lowest it has been in 50 years. A simple fact-check proves him wrong. Obama did not correct his false statement and the media didn't either.

In January of 2009, Obama stated that it was no longer necessary to kill Osama bin Laden to win the war against al-Qaeda. On May 1, 2011, after the successful raid by Navy Seals that killed bin Laden, Obama told the nation that he made the capture or killing of Osama bin Laden a "top priority," and had instructed CIA Chief Leon Panetta to make this job number one. Which statement is correct?

Last week, several of my friends asked me if I believed that bin Laden was really dead. The questions weren't surprising, considering the mass of misinformation and conflicting accounts of bin Laden's death now emanating from the White House. It appears the question of bin Laden's demise was only settled after al Qaeda issued a statement confirming it.

What does it say about Obama's credibility when the pro-Arab al Jazeera media reports are given more credibility than our own president? Maybe that's why Columbia School of Journalism just awarded al Jazeera a journalism prize.

Giving Obama the benefit of the doubt, I'll allow for the possibility that he underwent a drastic change of heart and altered his position on bin Laden. It happens. But when added to the increasing number of statements Obama continues to make that defy reality, the facts, and common sense, I'm more inclined to believe Obama's "mis-statements" are a deliberate effort to deceive the American people.

For example: Obama told the American people that not spending money is "mortgaging America's future." Who knows, it's possible Obama actually believes this, but anyone with an ounce of common sense knows we can't spend our way out of bankruptcy.

Another blooper: Obama stated that increased drilling will not solve our energy problems. Huh? Again, the media let this statement go unchallenged. (At least Sen. Vitter called him on it.)

Obama would have us believe that the big bad oil companies are to blame for our skyrocketing gas prices, despite the fact that every energy decision made by Obama, from with holding drilling permits to increased regulatory burdens being placed on big oil, has directly resulted in raising the cost of gasoline.

Obama would like us to ignore the fact that his Energy Secretary, Steven Chu, stated in 2008 that he wants to "figure out how to boost the price of gasoline to the levels in Europe." Since then, gas prices have doubled. Mission accomplished.

Despite the pain at the pump, Obama's energy dis-information campaign has been quite successful, with a new poll showing that only 9% of Americans believe that Obama is responsible for rising gas prices.

Tailoring the facts to reflect the most favorable interpretation is an accepted prerogative of the bully pulpit. Every president will of course, spin the news to a certain extent. This is not new. But under Obama, there appears to be a deliberate campaign by the White House and many segments of the government to blatantly deceive the American people. Consider our Department of Homeland Security:

Homeland Security Secretary Janet Napolitano told Congress last week that the Obama administration is trying to come up with a new yardstick to better reflect the improvements it says it has made. The Washington Times correctly noted that, unable to meet its border goals, the DHS merely moved the goals.

Arizona Sheriff Larry Deaver pretty much confirmed the Washington Time's report, testifying before Congress that the U.S. Border Patrol has told its agents to stop arresting illegal aliens crossing the border from Mexico to keep the illegal immigration numbers down. In other words, deceive the American people by peddling perception as reality.

Obama and his administration are masters in getting Americans to think with their hearts instead of their brains. After all, emotions are easier to manipulate than facts. And many truths are easier to ignore than acknowledge. But not acknowledging reality, doesn't change the reality. And we ignore reality at our own peril, as we are now finding out on a daily basis.

Though not specified in our Constitution, I believe Americans should have the right to enough information to make informed decisions. Instead, we are being fed a steady stream of outright lies and deliberate misstatements. And when we the people fail to challenge our elected representatives when they lie, we not only enable them, we become complicit. We also forfeit the right to complain when reality hits us in the pocketbook while America continues its slide to the level of a third world country.

Nancy Morgan is a columnist and news editor for conservative news site RightBias.com. She lives in South Carolina.

White House Insider: Obama Hesitated – Panetta Issued Order to Kill Osama Bin Laden | Socyberty

White House Insider: Obama Hesitated – Panetta Issued Order to Kill Osama Bin Laden
by Ulsterman in Issues, May 3, 2011

"What Valerie Jarrett, and the president, did not know is that Leon Panetta had already initiated a program that reported to him –and only him, involving a covert on the ground attack against the compound."

Note:This update comes some 24 hours after our longtime Washington D.C. Insider first outlined shocking details of an Obama administration having been “overruled” by senior military and intelligence officials leading up to the successful attack against terrorist Osama Bin Laden. What follows is further clarification of Insider’s insights surrounding that event.


Q: You stated that President Obama was “overruled” by military/intelligence officials regarding the decision to send in military specialists into the Osama Bin Laden compound. Was that accurate?

A: I was told – in these exact terms, “we overruled him.” (Obama) I have since followed up and received further details on exactly what that meant, as well as the specifics of how Leon Panetta worked around the president’s “persistent hesitation to act.” There appears NOT to have been an outright overruling of any specific position by President Obama, simply because there was no specific position from the president to do so. President Obama was, in this case, as in all others, working as an absentee president.

I was correct in stating there had been a push to invade the compound for several weeks if not months, primarily led by Leon Panetta, Hillary Clinton, Robert Gates, David Petraeus, and Jim Clapper. The primary opposition to this plan originated from Valerie Jarrett, and it was her opposition that was enough to create uncertainty within President Obama. Obama would meet with various components of the pro-invasion faction, almost always with Jarrett present, and then often fail to indicate his position. This situation continued for some time, though the division between Jarrett/Obama and the rest intensified more recently, most notably from Hillary Clinton. She was livid over the president’s failure to act, and her office began a campaign of anonymous leaks to the media indicating such. As for Jarrett, her concern rested on two primary fronts. One, that the military action could fail and harm the president’s already weakened standing with both the American public and the world. Second, that the attack would be viewed as an act of aggression against Muslims, and further destabilize conditions in the Middle East.

Q: What changed the president’s position and enabled the attack against Osama Bin Laden to proceed?

"What Valerie Jarrett, and the president, did not know is that Leon Panetta had already initiated a program that reported to him –and only him, involving a covert on the ground attack against the compound."

A: Nothing changed with the president’s opinion – he continued to avoid having one. Every time military and intelligence officials appeared to make progress in forming a position, Jarrett would intervene and the stalling would begin again. Hillary started the ball really rolling as far as pressuring Obama began, but it was Panetta and Petraeus who ultimately pushed Obama to finally act – sort of. Panetta was receiving significant reports from both his direct CIA sources, as well as Petraeus-originating Intel. Petraeus was threatening to act on his own via a bombing attack. Panetta reported back to the president that a bombing of the compound would result in successful killing of Osama Bin Laden, and little risk to American lives. Initially, as he had done before, the president indicated a willingness to act. But once again, Jarrett intervened, convincing the president that innocent Pakistani lives could be lost in such a bombing attack, and Obama would be left attempting to explain Panetta’s failed policy. Again Obama hesitated – this time openly delaying further meetings to discuss the issue with Panetta. A brief meeting was held at this time with other officials, including Secretary Gates and members of the Joint Chiefs of Staff, but Gates, like Panetta, was unable to push the president to act. It was at this time that Gates indicated to certain Pentagon officials that he may resign earlier than originally indicated – he was that frustrated. Both Panetta and Clinton convinced him to stay on and see the operation through.

What happened from there is what was described by me as a “masterful manipulation” by Leon Panetta. Panetta indicated to Obama that leaks regarding knowledge of Osama Bin Laden’s location were certain to get out sooner rather than later, and action must be taken by the administration or the public backlash to the president’s inaction would be “…significant to the point of political debilitation.” It was at that time that Obama stated an on-ground campaign would be far more acceptable to him than a bombing raid. This was intended as a stalling tactic, and it had originated from Jarrett. Such a campaign would take both time, and present a far greater risk of failure. The president had been instructed by Jarrett to inform Mr., Panetta that he would have sole discretion to act against the Osama Bin Laden compound. Jarrett believed this would further delay Panetta from acting, as the responsibility for failure would then fall almost entirely on him. What Valerie Jarrett, and the president, did not know is that Leon Panetta had already initiated a program that reported to him –and only him, involving a covert on the ground attack against the compound. Basically, the whole damn operation was already ready to go – including the specific team support Intel necessary to engage the enemy within hours of being given notice. Panetta then made plans to proceed with an on-ground assault. This information reached either Hillary Clinton or Robert Gates first (likely via military contacts directly associated with the impending mission) who then informed the other. Those two then met with Panetta, who informed each of them he had been given the authority by the president to proceed with a mission if the opportunity presented itself. Both Gates and Clinton warned Panetta of the implications of that authority – namely he was possibly being made into a scapegoat. Panetta admitted that possibility, but felt the opportunity to get Bin Laden outweighed that risk. During that meeting, Hillary Clinton was first to pledge her full support for Panetta, indicating she would defend him if necessary. Similar support was then followed by Gates. The following day, and with Panetta’s permission, Clinton met in private with Bill Daley and urged him to get the president’s full and open approval of the Panetta plan. Daley agreed such approval would be of great benefit to the action, and instructed Clinton to delay proceeding until he had secured that approval. Daley contacted Clinton within hours of their meeting indicating Jarrett refused to allow the president to give that approval. Daley then informed Clinton that he too would fully support Panetta in his actions, even if it meant disclosing the president’s indecision to the American public should that action fail to produce a successful conclusion. Clinton took that message back to Panetta and the CIA director initiated the 48 hour engagement order. At this point, the President of the United States was not informed of the engagement order – it did not originate from him, and for several hours after the order had been given and the special ops forces were preparing for action into Pakistan from their position in Afghanistan, Daley successfully kept Obama and Jarrett insulated from that order.
This insulation ended at some point with an abort order that I believe originated from Valerie Jarrett’s office, and was then followed up by President Obama. This abort order was later explained as a delay due to weather conditions, but the actual conditions at that time would have been acceptable for the mission. A storm system had been in the area earlier, but was no longer an issue. Check the data yourself to confirm. Jarrett, having been caught off guard, was now scrambling to determine who had initiated the plan. She was furious, repeating the acronym “CoC” and saying it was not being followed. This is where Bill Daley intervened directly. The particulars of that intervention are not clear to me beyond knowing he did meet with Jarrett in his office and following that meeting, Valerie Jarrett was not seen in the West Wing for some time, and apparently no longer offered up any resistance to the Osama Bin Laden mission. What did follow from there was one or more brief meetings between Bill Daley, Hillary Clinton, a representative from Robert Gates’ office, a representative from Leon Panetta’s office, and a representative from Jim Clapper’s office. I have to assume that these meetings were in essence, detailing the move to proceed with the operation against the Osama Bin Laden compound. I have been told by more than one source that Leon Panetta was directing the operation with both his own CIA operatives, as well as direct contacts with military – both entities were reporting to Panetta only at this point, and not the President of the United States. There was not going to be another delay as had happened 24 hour earlier. The operation was at this time effectively unknown to President Barack Obama or Valerie Jarrett and it remained that way until AFTER it had already been initiated. President Obama was literally pulled from a golf outing and escorted back to the White House to be informed of the mission. Upon his arrival there was a briefing held which included Bill Daley, John Brennan, and a high ranking member of the military. When Obama emerged from the briefing, he was described as looking “very confused and uncertain.” The president was then placed in the situation room where several of the players in this event had already been watching the operation unfold. Another interesting tidbit regarding this is that the Vice President was already “up to speed” on the operation. A source indicated they believe Hillary Clinton had personally made certain the Vice President was made aware of that day’s events before the president was. The now famous photo released shows the particulars of that of that room and its occupants. What that photo does not communicate directly is that the military personnel present in that room during the operation unfolding, deferred to either Hillary Clinton or Robert Gates. The president’s role was minimal, including their acknowledging of his presence in the room.

At the conclusion of the mission, after it had been repeatedly confirmed a success, President Obama was once again briefed behind closed doors. The only ones who went in that room besides the president were Bill Daley. John Brennan, and a third individual whose identity remains unknown to me. When leaving this briefing, the president came out of it “…much more confident. Much more certain of himself.” He was also carrying papers in his hand that quite possibly was the address to the nation given later that evening on the Bin Laden mission. The president did not have those papers with him prior to that briefing. The president then returned to the war room, where by this time, Leon Panetta had personally arrived and was receiving congratulations from all who were present.

In my initial communication to you of these events I described what unfolded as a temporary Coup initiated by high ranking intelligence and military officials. I stand by that term. These figures worked around the uncertainty of President Obama and the repeated resistance of Valerie Jarrett. If they had not been willing to do so, I am certain Osama Bin Laden would still be alive today. There will be no punishment to those who acted outside the authority of the president’s office. The president cannot afford to admit such a fact. What will be most interesting from here is to now see what becomes of Valerie Jarrett. One source indicated she is threatening resignation. I find that unlikely given my strong belief she needs the protection afforded her by the Oval Office and its immense powers to delay and eventually terminate investigations back in Chicago, but we shall see.

Stay safe.

Tuesday, May 3, 2011

American Thinker: Arrogance and Narcissism Reign in King Barack's Court

Arrogance and Narcissism Reign in King Barack's Court
By Anthony W. Hager
Arrogance is defined as an inflated degree of self-importance with a supplementary contempt for others. Narcissism describes a person totally infatuated with his own persona and possessing an overblown sense of ability or worth. Arrogance and narcissism are somewhat synonymous. Yet there is sufficient difference between the terms to apply both to the persona our current Commander-in-Chief embodies.

President Obama is a walking contradiction. Acts he once considered an abuse of authority are but policy recalculations when he exercises them personally. Other presidents have overstepped their authority. Obama, however, is uniquely intelligent and supremely qualified to properly wield powers he once considered abusive and to rule a free people. "Rule" isn't a word chosen at random; it's a term Obama himself has used to describe his administration.

Barack Hussein Obama doesn't see himself as merely the United States' 44th President; he is her liege, King Barack the First.

Obama's use of signing statements confirms his narcissism and arrogance. Obama's position on signing statements is similar, but in mirror image, to John Kerry's position on the Iraq War. Remember how Kerry voted for the war prior to voting against it? Obama was against presidential signing statements before he used them.

Before his coronation Obama considered signing statements beyond the president's constitutional authority. He pledged not to use such statements to circumvent Congress, a charge he leveled at his predecessor. However, when Obama's signing statement accompanied the recent budget deal he had to redefine his position.

King Barack has changed his mind. Signing statements aren't beyond the president's power after all, as he stated when campaigning in 2008. But such executive statements shouldn't be abused in the way his predecessor abused them. Note the arrogance and narcissism. Other chief executives have abused the signing statement. Obama, however, possesses the virtue, wisdom, and sound judgment necessary to exercise the signing statement effectively without crossing the line into abuse.

Obama further displayed his royal manner in his refusal to comply with Congress' ban on White House czars. Worse than his contempt for Congress, a feeling with which most Americans can empathize, is his disregard for the U.S. Constitution.

The President, according to Article 2, Section 2 of the Constitution, will appoint various officers of the United States subject to the Senate's review and consent. The language represents a problem for czar appointees, who aren't presented for Senate review. The President may also appoint inferior officers, which could be interpreted to include czars, at his discretion. However, such discretionary appointments can be made only if Congress has empowered the presidency to make them. A Congress that can grant discretionary appointment authority to the president via legislation may revoke that authority in like manner, as this Congress did in the budget bill.

Yet the czars remain and Congress' duly passed law is ignored. King Barack the Arrogant and Narcissistic simply snubs Congress and the Constitution's directives on presidential appointments.

Instances abound to confirm His Majesty's elevated sense of worth and authority. Obama also thumbed his nose at a judge's decision declaring Obamacare unconstitutional. If you or I ignored such a ruling we would be arrested. But people of superior intellect and insight, like King Barack, can't be bothered with trivialities, such as court rulings, that would apply to those of us in the great unwashed.

Arrogance allows Obama to travel on the publicly-funded Air Force One at $70,000 per flight hour while demonizing corporate CEOs for flying privately-funded aircraft at a fraction of the cost. Narcissism vindicates King Barack the First when he compensates his supporters with taxpayer provided stimulus cash while praising his administration's exemplary ethics.

Signing statements aren't the problem, be they issued by King Barack or a simple president. But a President serves within the office's authority at the pleasure of the governed. A King serves at his own discretion, believing the contemptible governed are beneath questioning or comprehending their ruler's decrees. Rulers embody arrogance and narcissism individually and simultaneously, a feat thoroughly possible in the Court of King Barack the First.

Anthony W. Hager has authored more than 300 articles for various newspapers, periodicals, and websites. Contact him via his website www.therightslant.com.

How Efficient Are Wind Farms?

Environment Issues

May 3, 2011
How Efficient Are Wind Farms?

Wind farms are much less efficient than claimed, producing below 10 percent of capacity for more than a third of the time, according to a new report. The analysis also suggested output was low during the times of highest demand, says BBC News.

* The research, carried out by Stuart Young Consulting for the John Muir Trust, analyzed electricity generated from UK wind farms between November 2008 and December 2010.
* Statements made by the wind industry and government agencies commonly assert that wind turbines will generate on average 30 percent of their rated capacity over a year.
* But the research found wind generation was below 20 percent of capacity more than half the time and below 10 percent of capacity over one third of the time.

The study also challenged industry claims that periods of widespread low wind were "infrequent."

* The average frequency and duration of a "low wind event" was once every 6.38 days for 4.93 hours.
* During each of the four highest peak demands of 2010, wind output reached just 4.72 percent, 5.51 percent, 2.59 percent and 2.51 percent of capacity, according to the analysis.
* It concluded wind behaves in a "quite different manner" from that suggested by average output figures or wind speed records.

Source: "Wind Farm Efficiency Queried by John Muir Trust Study," BBC News, April 6, 2011. Stuart Young, "Analysis of UK Wind Power Generation," John Muir Trust, March 2011.

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Monday, May 2, 2011

Vattel’s Influence on the term Natural Born Citizen

Vattel’s Influence on the term

a Natural Born Citizen

What is a natural born citizen? Where did the framers come up with this term? Where was it used before? So many questions, and the answers are right there if anyone wishes to search out the truth.

The term Natural born Citizen appears in our Constitution, in Article 1, Section 2, with these words, “No person except a natural born citizen, or a citizen of the United States, at the time of the adoption of this Constitution, shall be eligible to the office of President; neither shall any person be eligible to that office who shall not have attained to the age of thirty five years, and been fourteen Years a resident within the United States.”

Before the Constitution the closest reference we have to Natural Born Citizen is from the legal treatise “the Law of Nations,” written by Emerich de Vattel in 1758. In book one chapter 19,

§ 212. Of the citizens and natives.

“The citizens are the members of the civil society; bound to this society by certain duties, and subject to its authority, they equally participate in its advantages. The natives, or natural-born citizens, are those born in the country, of parents who are citizens. As the society cannot exist and perpetuate itself otherwise than by the children of the citizens, those children naturally follow the condition of their fathers, and succeed to all their rights. The society is supposed to desire this, in consequence of what it owes to its own preservation; and it is presumed, as matter of course, that each citizen, on entering into society, reserves to his children the right of becoming members of it. The country of the fathers is therefore that of the children; and these become true citizens merely by their tacit consent. We shall soon see whether, on their coming to the years of discretion, they may renounce their right, and what they owe to the society in which they were born. I say, that, in order to be of the country, it is necessary that a person be born of a father who is a citizen; for, if he is born there of a foreigner, it will be only the place of his birth, and not his country.”

Working up a tax storm in Illinois

Working up a tax storm in Illinois

By George F. Will, Published: April 29

Tim Storm, an Illinois businessman until a few weeks ago, is now a Wisconsin businessman. Herewith a story about how states can reduce revenue by trying to increase them and about the economic benefits of federalism.

Storm, 42, is founder and chief executive of FatWallet.com. The company, until recently one of about 9,000 Illinois “affiliates” of Amazon.com, directs online shoppers to online retailers, which often pay affiliates commissions for referrals that result in sales. Storm’s company, which has 54 employees, used to be located in Rockton, Ill., but now is five miles up the road in Beloit, Wis.

One reason online sales are brisk is that the retailers are not required to collect state sales taxes. In 1992, the U.S. Supreme Court held that such taxes must be collected only by companies that have a “substantial nexus” — basically, a brick-and-mortar presence — in the state. Under this rule, Amazon collects sales taxes in only five states.

Illinois, comprehensively misgoverned and ravenous for revenue, has enacted what has come to be called an “Amazon tax.” It requires Amazon and other online retailers to collect the state’s sales tax. Amazon and many other retailers responded by severing their connections with their Illinois affiliates.

Storm responded by relocating to Beloit. No one knows how many other Illinois affiliates of the thousands of online retailers — transactions with Amazon are less than 1 percent of FatWallet’s business — will lose revenue, pay less in taxes, cut jobs or leave the state. When Texas sent Amazon a bill for $269 million because of the “nexus” of its Dallas warehouse, Amazon decided to close the warehouse.

Hoping to turn the states’ budget crises to their advantage, Wal-Mart, Target and other large retailers are funding a coalition called Alliance for Main Street Fairness to lobby for measures — perhaps federal legislation — to require Amazon and other online retailers to collect sales taxes. This supposedly would serve fairness by leveling the playing field.

Most online retailers would, however, retain the advantages of convenience — shoppers do not need to drive to the store — and the price advantages of not having to pay the cost of brick-and-mortar stores. But the stores have the competitive advantage of local loyalties and customers being able to handle merchandise.

Besides, Main Street stores pay sales taxes to support local police, fire and rescue, sewage, schools and other services. If Amazon’s Seattle headquarters catches fire, will Champaign, Ill., firefighters extinguish it? And as Boston Globe columnist Jeff Jacoby notes, “A Pennsylvania tobacco shop doesn’t collect Ohio sales taxes whenever it sells a humidor to a visitor from Ohio.”

Federalism — which serves the ability of businesses to move to greener pastures — puts state and local politicians under pressure, but that is where they should be, lest they treat businesses as hostages that can be abused. According to the Tax Foundation, Illinois has not only the fourth-highest combined national-local corporate income tax in the nation but also in the industrialized world. In Peoria, Doug Oberhelman, chief executive of Caterpillar, has told Illinois Gov. Pat Quinn that he is being “wined and dined” by other governors and their representatives encouraging Caterpillar to invest in their states.

It recently picked Muncie, Ind., for a major manufacturing plant. Says Indiana Gov. Mitch Daniels of his neighboring state, “It’s like living next door to ‘The Simpsons’ — you know, the dysfunctional family down the block.”

A study by the Illinois Policy Institute, a market-oriented think tank, concludes that between 1991 and 2009, Illinois lost more than 1.2 million residents — more than one every 10 minutes — to other states. Between 1995 and 2007, the total net income leaving Illinois was $23.5 billion. The five states receiving most refugees from Illinois were Florida, Indiana, Wisconsin, Arizona and Texas. Two are Illinois’ neighbors, three have warm weather, two — Florida and Texas — have no income tax. In January, a lame-duck session of Illinois’ legislature — including 18 Democrats who were defeated in November — raised the personal income tax 67 percent and the corporate tax almost 50 percent. This and the increase — from 3 percent to 5 percent — in the tax on small businesses make Illinois, as the Wall Street Journal says, “one of the most expensive places in the world to conduct business.”

Tim Storm’s presence in Beloit demonstrates how American federalism gives force to a familiar axiom: Businesses go where they are welcome and stay where they are well-treated.