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Archive for June, 2009

audit-the-fedHere is a letter I wrote my Congressman, Vic Snyder, back on April 2:

 

Dear Congressman Snyder:

I notice that HR 1207, the Federal Reserve Transparency Act of 2009, has been growing in co-sponsors and is now up to 55. This includes both Republicans and Democrats, indicating the wide, bi-partisan appeal of such a basic thing as auditing the privately-owned banking system that was granted power to issue our currency.

One thing that is disheartening me at the moment is your failure to join in as a co-sponsor for this basic common sense piece of legislation. At a time of trillions of dollars of present and future taxpayer money being thrown around like confetti, it would behoove those charged with the Constitutional task of overseeing our money system (the legislative branch, the U.S. Congress) to perform their basic oversight function. It goes without saying that any sensible representative of the people would see the wisdom in understanding what types of assets are being used to back our currency, as we have already unconstitutionally left the gold and silver backed tender in debt payments as explicitly laid out in Article 1, Section 10 of the United States Constitution.

I will continue to follow this legislation online and I expect that, given the above mentioned basic facts of the matter, you will see the sensibility in adding your name, as a representative of the people of our district, as a co-sponsor in this long overdue bit of oversight of the heavily secretive Federal Reserve System.

Failure to act in this regard will indicate a breach of your responsibility under the Constitution and will force me and others who understand the facts of the matter to campaign heavily against you in the upcoming 2010 congressional election.

Thank you for doing the proper thing and supporting this common sense legislation. Again, HR 1207: The Federal Reserve Transparency Act of 2009.

Sincerely,
Garret Myhan

Well, it seems that the Congressman finally got around to reading my letter, because he signed on to H.R. 1207 today. Or maybe he just waited until a majority of his cronies in the House had sponsored it (the total number of co-sponsors is up to 242 now); apparently it is suddenly in fashion to audit the Federal Reserve, and I know how Dr. Snyder likes to be in fashion. Anyway, I’m quite sure that now I’ve seen everything, will wonders never cease, etc.

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HealthcareAlignment01I am a professional healthcare provider. It is natural, therefore, that I be interested in the big changes that will soon be coming to my profession. Barack Obama is proposing a complete overhaul of the U.S. healthcare system, ushering in a new level of government involvement. In response, the irrelevant Republicans offered their own plan to overhaul healthcare, apparently just so they could hear themselves talk, since no one else appears to be listening. Of course, both parties seem to think the way to improve healthcare in this country is to get the federal government more involved in the private medical and insurance markets. As usual, both parties are wrong.

The following article is one of the best I have read about the boneheaded attempts by the Republocrats to overhaul healthcare. It was written by Tom Mullen, author of the book A Return to Common Sense.

Politicians Talking Gibberish About Health Care

Every minute of every day, Americans are subjected to politicians and media pundits talking gibberish. There really is no other word for it, whether the particular subject is economics, foreign policy, or even climatology. However, the gibberish that is getting the most attention right now concerns health care “reform.” President Obama is leading the Democrats with the familiar socialist model that has failed in every industrialized nation in which it has been tried. The Republicans are answering with gibberish of their own. You have to especially admire the Republicans, because they are not only fomenting nonsense from a discredited, minority position, but are actually trying to suck up to voters by selling their version of government-run, loot-funded health care as a “free market solution.” Only the party of George W. Bush could be capable of gibberish like this.

To truly appreciate how bizarre the arguments are, let’s break down what our ruling class is really saying. Sometimes the music bed, the interruptions by the self-absorbed interviewer, or even the graphics leading into next segment can obscure the gibberishness of some of their assertions.

Let us start by examining the position of the Democrats. They assert that every human being has a right to health care, and that it is the government’s job to provide for those who cannot afford it. There are three key terms here: right, health care, and provide. Let’s define the first two.

Right: that which an individual is entitled to without the consent of or compensation to anyone else. For example, people have a right to life. That is, they do not need anyone’s permission, nor are they obligated to compensate anyone in order to live. It is appropriate for an individual to demand, rather than ask for, their right to life to be respected.

Health care: a service which primarily consists of the labor of health care providers. For example, a physician exerts his mind and body, utilizing his education and experience, to attempt to diagnose and treat a patient’s illness or injury. That physician’s labor is “health care.”

Let us now restate the argument made by the Democrats, using these definitions in place of the terms themselves.

“Every individual is entitled to the labor of health care providers without compensating them or obtaining their consent. It is appropriate for individuals to demand, rather than ask, that health care providers treat them for free.”

Gibberish.

To be fair, although the Democrats repeat their slogan about the “right to healthcare” ad infinitum, they do not actually propose that the government defend this “right” directly. Instead, they use their own peculiar definition of the third term previously cited, “provide.” Americans continue to be bewildered by this parlor trick, whether because they are easily confused or because it is more convenient to be fooled than not. In any case, “provide” to the government means that they will employ the method described by William Graham Sumner where A & B get together to pass a law requiring C to do something for X. So as not to miss the opportunity to describe this plainly, this really means that they are going to use the brute force of government to force some people to pay for health care for others. That is all it is, when you peel away the doubletalk, jingoism, and spin.

Moreover, it is not just your property that the government will take in order to run its program. It will also require another huge portion of your liberty as well. In a recent speech about his health care reform plans, President Obama suggested that “we” must begin encouraging healthier lifestyles, including getting our children away from computer games and back to playing outside. “We” means “the government.” Of course, when it is the government’s responsibility to pay for the health care of other people, the government now claims a right on behalf of taxpayers to see that those people keep themselves as healthy as they can in order to limit the cost. There are already government-imposed exercise programs in Japan. Americans should be aware that the same rules will apply here. One can almost hear the government “instructress” from Orwell’s 1984 screaming from the telescreen.

“Smith W.! Yes, you! Bend lower, please! You can do better than that. You’re not trying. Lower, please! That’s better, comrade.”[1]

Political gibberish often conceals rather horrifying ideas. Thankfully, we have an opposition party that is opposing these heinous proposals, correct? As the people from Hertz say, “Not exactly.”

It is true that Republicans oppose a government-run health care plan. As reported in the Wall Street Journal, the Republican summary of their “Patient’s Choice Act” argues that “ The government would run a health plan “with the compassion of the IRS, the efficiency of the post office, and the incompetence of Katrina.”[2] All true, but of course the so-called party of individual liberty and free markets fails to argue the main point: the government – we the people – do not have the right to forcibly take money from one person and give it to another, not even for the purposes of paying for their health care. Nowhere in any report made public nor in any interview with a spokesperson for this “opposition party” will you hear this argument. There is a good reason for that.

Of course, the Republicans will argue that their plan works through the tax system and actually let’s families “keep more of their own money” to spend on health care, but a careful read of the WSJ article reveals that the same redistribution scheme is hidden within the stale “free market” rhetoric. First, the Republican plan would eliminate the tax exemption for employers when they provide health insurance benefits to their employees. This amounts to a tax increase on employers, whether they continue to provide the benefits or whether they eliminate them and merely pay taxes on the extra net income. What would the government do with this new revenue?

“Instead, it would give an annual tax credit of $2,300 to each individual and $5,700 to each family that they could use to offset the cost of their health insurance. Low-income families would get extra money to buy into private insurance plans.” [emphasis added]

So, in an effort to appear to be protecting the property rights of their more affluent base but at the same time buy the votes of those who cannot afford health care, the Republicans will simply tax those whom they think they can get away with taxing and call their own version of wealth redistribution a “tax cut,” much like George Bush’s “tax refunds” of the past decade. Of course, there is only one word for the suggestion that you can “cut” or “refund” taxes for people who are not paying taxes.

Gibberish.

As usual, the American public is served up a carefully framed debate that attempts to appear to have two sides but doesn’t. In either case, we are getting “reform” of the health care system in the only way that any government can “provide” anything. They are going to forcibly take away the property (taxes) of one group of people and use it to provide property (health care) to another group. Lest anyone mistakes this brutal practice as “the wrong means to a compassionate end,” let us remember the only reason that politicians from either party suggest this: to buy the votes of those who believe that they will benefit from it. Since there are more who would receive benefits in the voting base of the Democratic Party, they are more open about what they are really doing. Since there are more of those who will be forced to pay in the base of the Republican Party, they try to spin their redistribution scheme as a “free market solution.” However, it is dressed up, it amounts to one thing; stealing.

In addition to ignoring the fundamental violation of rights that is part and parcel of any government provided service, both the Republicans and Democrats seem completely unaware of the root cause of the problem: health care is only so expensive because government already provides so much of it. This is the other elephant sitting in the corner whenever politicians from either party start talking about health care reform.

Last year, total health care spending in the United States amounted to roughly $2.4 trillion dollars. Medicare and Medicaid alone accounted for over $800 billion, or 33% of that. Add the Veteran’s Administration and other smaller government health care programs, and government is directly providing almost half of all health care delivered in this country. What does this have to do with the price? Any first-year economics student can tell you.

Price is determined by the intersection of supply and demand. Demand has two components: the desire to buy a good or service and the ability to buy that good or service. Let us assume that the desire for health care services is unlimited, as it is for many other goods or services. In that case, the only factor that can limit demand for health care services is ability to pay. This is the factor that most influences the price of every other good or service provided in the marketplace, including food, clothing, and shelter, which are even more vital to human life than health care. It is the finite amount of money that the buyers have to spend which keeps the price down and makes most goods affordable to those on limited budgets.

However, when government makes something an entitlement, demand suddenly becomes unlimited. Since the government now must provide the benefit and they have the option of taxing or printing what money they need to provide it, there is no longer anything holding down the price. This is the reason that we have seen health care prices skyrocket in recent decades. They will continue to rise until all resources are consumed trying to provide them.

State and local governments have already been experiencing this for years because of the exploding cost of their shares of the Medicaid programs (half of Medicaid benefits are paid by the states, some of which require their local governments to pay a percentage as well). They cannot print their own money, so they have instead cut their police forces and other legitimate functions of government in order to divert money to the insatiable Medicaid beast. In one local county in upstate New York, 100% of the property taxes collected in that county and $40 million dollars of sales tax revenue – the county’s only other revenue source – went to pay that county’s share of the Medicaid bill for their recipients. Now, it has been reported that the majority of the TARP funds that were supposed to go to “shovel-ready infrastructure projects” are instead being earmarked for “existing state social programs.” An audit of these payments would undoubtedly reveal that the bulk will go to Medicaid.

Economic laws are like the forces of nature. They can be held off, as a levy holds off a flood, but they will eventually overwhelm any attempt to violate them. The most fundamental economic law is this: you cannot consume more than you produce without taking the difference from someone else. Government produces nothing. Therefore, any health care benefit that government provides must be funded with money taken by force from someone else. There is no political theory, mathematical equation, or black magic incantation that can change this.

However, even if we are able to put aside the moral repugnancy of this practice, we cannot do so forever. Once voluntary exchange is abolished, market forces are suspended and the price of providing health care will rise until the government is no longer able even to steal enough to pay for it. That day was only a few decades away for the existing government health care programs before the economic crisis we find ourselves in now (which was similarly caused by government for all of the same reasons). If government attempts to provide everyone with health care, the end will come much sooner.

This sheds light on a fundamental misconception that underlies all of the societal problems that American society faces today: the belief that there is a conflict between individual rights and the “needs of society.” This conflict doesn’t exist. Protecting the rights of every individual serves the needs of society. Violating those rights, for whatever purpose, destroys society. In fact, it is by violating the individual rights of its constituents that government causes nearly every societal problem we face. The high price of health care is just one example.

There is only one moral and practical answer to the high cost of health care: we must get government out of the health care business entirely. That includes rejecting new programs proposed by either major party and figuring out a humane way to get our children out of the existing entitlement system without cutting off those presently dependent upon the benefits. The only lucid argument I’ve heard so far has been put forth by former presidential candidate, Congressman Ron Paul. He suggests that we dismantle our $1 trillion per year overseas military empire and use that money to pay Medicare and Social Security benefits while our children are allowed to enter the workforce without enrolling in the system themselves.

What do you know? A politician moved his lips and something besides gibberish came out.

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

[1] Orwell, George 1984 Part I Ch. 3
[2] Adamy, Janet “Republicans Offer Health-Care Plan” The Wall Street Journal May 21, 2009

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protestThere have been continued demonstrations in Iran today protesting the recent “presidential election”. Back in April, hundreds of thousands of Americans peacefully protested federal government spending in what came to be known as “Tea Parties”. Last week marked the 20th anniversary of the historical student protests in Tiananmen Square, China. It seems that all over the globe, wherever freedom strains against tyranny, there are protests and protesters. Most freedom loving Americans would applaud these acts. The United States government does not.

It seems that, on a written examination given to train federal Department of Defense employees, the following question appears:

“Which of the following is an example of low-level terrorism?”

— Attacking the Pentagon

— IEDs

— Hate crimes against racial groups

— Protests

The correct answer, according to the exam, is “Protests.”

Get that? Protests are an example of “low-level terrorism” according to our government. Honestly, how long is it going to take before the American people wake up and see what is happening in this country? How more blatant an attack on the human rights guaranteed by the First Amendment of the United States Constitution can there possibly be?

Of course, the DOD will feign shock and surprise over this obvious mistake, meaningless apologies will spill forth, and the offending question will be immediately stricken from this and all future examinations for government lackeys. But what does that prove? It proves that the government wasn’t quite careful enough this time in hiding its true intentions and it got caught. That’s all. The post 9/11 government of the Untied States only allows you to keep your rights that are currently convenient. The moment, yes the very instant that something untoward happens, our human rights, guaranteed by the Constitution, will evaporate. Mark my words. It could be the next terrorist attack on US soil, the collapse of the dollar, or even the next round of ugly protests. The truth is that we are no longer free.

Of course most Americans don’t care about this. As long as they can have the Wii on their big screen TV and glut their daily cheeseburger they are happy. They will wake up one day soon and find that even these “simple pleasures” will be denied them in the name of national security or environmental protection.

The time to be counted is now. If you have any courage, honor, or faith that our nation can again be free, then get off your butt and take a stand. We may not have another chance.

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karldenningerIf you are into free market economics and haven’t discovered Karl Denninger, you should immediately drop what you are doing and look him up. I try to catch Denninger’s blog every day. A lot of his stuff goes right over my head, but I always find his wisdom to be a very valuable resource for keeping track of the economic shenanigans going on in Washington. While all of the Obamaites are spouting nonsense about an economic recovery, those in the know see us drifting in the opposite direction. Last week Denninger posted an eye-catching piece called “Ten Things You Must Do”. I thought his list was very timely and interesting, so I will repost it here:

1. Stop listening to those who claim that “The Market is telling you the recession is ending/over.” Baloney. What was the market telling you in October of 2007 when the SPX hit 1576? That everything was great and “subprime was contained”, right? Any more questions on that piece of nonsense?

2. Get out of debt – NOW. Revolving debt in particular is murderous. If your credit line hasn’t been cut back or your interest rate jacked, you’re one of the few. It will happen. Going bankrupt due to increasing debt service requirements (with or without job loss) sucks.

3. Stop spending more than you make – in fact, do the opposite – start saving. NOW. You need to be saving 10% of your gross income. Not net or “excess” – gross. These funds serve two purposes: an emergency fund (which you’re likely to need) and if you have one already it will also serve as a fund to buy up assets that will be puked up when things get really bad. You don’t get wealthy by selling to some other sucker – you get wealthy by buying when nobody has any money to buy – that is, by driving the hardest bargain you can imagine!

4. I’ve said it before but it bears repeating: have the ability to make it even if you lose your job. Most people say three months of reserves are necessary. I’ve said six months to two years, and I’ll reiterate it. And reserves means cash, not credit. Parked in a credit union is ok – but be prepared to make that actual cash in a big honking hurry if you need to. How do you know if you need to? If and when the first Treasury auction fails, the market crashes below the 666 March low and/or a big bank fails, you need to.

5. Pull ALL of your business from ANY bank that has received federal assistance. The community banks and credit unions have been screwed by the crony government interests in two ways – first, by regulators allowing bankrupt banks to pay overly-large CD rates when they’re insolvent (that’s fraud on its face) and second by proposing to tax them through FDIC assessments to pay for the sins of the imprudent. Withdraw your consent and assistance – move your funds to a credit union or local community bank, but before doing so ask to see their financials and look specifically for over-leverage in commercial real estate and other development “assets”. HIT THE BAD GUYS IN THE WALLET – THE ONLY PLACE THEY UNDERSTAND!

6. If you have assets in the stock market, and have thus enjoyed the rally off SPX 666, either sell or hedge that exposure RIGHT NOW. The upside risk is what – 10%? What’s the downside risk? 50% or more. You can hedge effectively with PUTs which have gotten much cheaper as the VIX has fallen, or simply sell out and go to cash. In my opinion you’re insane to play for another 10% gain when you may suffer a 50% loss, but that’s my view. Just don’t say you weren’t warned if you do nothing and the collapse occurs!

7. Figure out what you’re going to do if we suffer a “sudden stop” and be prepared to execute that plan. Consider what a collapse in trucking, for example, does to the food supply into major cities. This is a low-probability risk right now (perhaps 10-20%) but if it happens major cities will become free-fire zones within hours. A gun won’t do you a damn bit of good when there’s a potential rifle barrel sticking out of every window and the person behind it is interested in the bag of groceries you’re carrying. You are not Rambo (and by the way, have you noticed that Rambo always goes after bad guys in some small, flat hellhole? Ever wonder why? With a sniper rifle poking out of every second window even John Rambo doesn’t stand a chance.) Those who live on the coasts have hurricane plans. Everyone needs a “sudden stop” plan, and it must not rely on access to credit of any sort, because if “it” happens that access will disappear instantly. For people in rural America, this might not be that big of a deal. For those who live in big cities it is – and its something you probably haven’t thought through to the degree you need to.

8. Don’t count on metals. I know, I know, we’re going to hyperinflate and gold is going to the moon. I have one question: Can you eat it, drink it, run your car on it, sleep under it, or screw it? No? That’s a problem. A “sudden stop” is not a hyperinflationary event – it has good odds of being quite the opposite. God help you if you put your eggs in that basket and are wrong.

9. Acquire lawful means of self-defense. Your odds of being victimized are roughly 1 in 100 annually under normal conditions. What happens when its 1 in 5? Think it won’t be? Ok, if doesn’t really get bad then you spent money on something you don’t need, but you still have it and can sell it (even if you take somewhat of a loss.) If you wait, and then decide you need it, what are the odds of being able to find a firearm? And by the way, weapons you don’t know how to use in a competent and cool fashion if you need to are worthless or worse. This means range time and/or professional instruction, and both take time, effort and money. Again, this is called “hedging” – your life and property, this time (instead of your investment portfolio)

10. Figure out who your friends are – and aren’t. This isn’t about who you like. Its about who you can trust with your back – no questions asked. If things get bad the second-to-the-last thing you want to be is alone – right before being around anyone who is less than 100% trustworthy. Think about this point long and hard – this doesn’t mean dumping acquaintances now, but it does mean knowing who you group with if you need to – and who you avoid.

Good advice, I think.

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OK, people, THEY ARE ACTUALLY BEGINNING TO ACCEPT SILVER AND GOLD AS PAYMENT IN GROCERY STORES IN CALIFORNIA.

Check out the following video:

You are looking at the future of commerce in America. As the federal government continues to create currency out of thin air to pay for President Obama’s expensive programs, the US Dollar will continue to decrease in value. Soon precious metals will be among the most valuable things you can own.

fedgraph

Apparently, the guy who made this video, George4Title, got his YouTube account suspended for posting this video. I wonder why? Perhaps he angered THE MAN.

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beach7Tomorrow I am going on vacation. Tonight I am preparing. The following ramblings are some advice for the travelling patriot to consider when planning and executing a journey.

Recon— Know where you are going. If you have been there before, great. If not, swallow your pride and get directions. A map is good. Mapquest is better. A GPS in the car is best. All three is super best. Consult someone who has been to your destination ahead of you for advice. Let some folks a home know where you are headed and when you plan to return so that if you don’t come back, they can send out the search party.

Intel–[By personal choice, I have elected to exist and operate my person within the system. Some folks have elected to operate outside the system and I think that they are well within their rights to do so. If you are one of these, the advice in this section will not apply to you. For others who are interested in the advantages, disadvantages, and various and sundry ins and outs of living outside the system, see Arthur Menard’s excellent lecture series Think Free: Bursting the Bubbles of Government Deception.]
Gather your necessary papers and documents for travel: driver’s license, vehicle registration, proof of insurance, medical insurance and contact information, roadside assistance information, etc. If you are travelling armed (which I personally think is a good idea) be sure you have your carry permit with you. Check the laws of all the states you will be travelling through to make sure they honor your carry permit. This is easy to do at USACarry.com. If you are travelling through or to a state that does not honor your carry permit, or if you don’t have a carry permit, you are still legally permitted to carry a firearm with you in your vehicle by following the Interstate Journey Law. In order to be in compliance with this law, you must have the firearm unloaded and inaccessible from the passenger compartment of the vehicle (locked in a case, the trunk, etc.) Of course, if you are a felon or for some other reason are not legally allowed to possess a firearm, this does not apply to you.

Gear–There is a minimum amount of emergency gear you should pack for any journey by motor vehicle. In my opinion, the minimum for your car kit should include the following:

-Food and water for 24 hours for each person in the vehicle
-Blankets and/or coats for each person (in cool or cold weather)
-Tools for minor repairs including spare tire, tire change equipment, jumper cables, extra motor oil/transmission fluid/brake fluid, screwdriver, wrenches, etc.
-Signaling device such as road flare, light/glow sticks, or cones
-Flashlight
-First aid kit
-CB, Ham radio, or cell phone for communication
-Games or toys for entertaining the kids

Hostile contact–Whenever you go on a journey, there is a chance you may have a run-in with law enforcement. If you are following the law, these encounters should be few and uneventful. However, depending on where you are travelling, the cops don’t always follow the rules. It is wise to have a basic knowledge of the laws of the states you will be traveling in/to, and a complete and thorough knowledge of your own rights as an American citizen and motorist. Immediately before leaving on your trip, review the excellent film Busted: The Citizen’s Guide to Surviving Police Encounters. This will give you an clear idea of what to say and how to conduct yourself when dealing with the police.

Above all, in case of an accident, be sure to be wearing clean underwear.

Some of you out there may have additional advice for vacation preparation. If so, please feel free to post a comment. Until next time, I wish you all safe journeys and Godspeed.

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