President Obama’s Policies are Destroying the Economy and Transforming the Country in a Bad Way

Posted by PITHOCRATES - September 7th, 2013

Week in Review

Is President Obama the worst president ever?  Perhaps.  Based on what he has done to the economy.  FDR and LBJ caused great damage and destroyed families by putting us on the path President Obama has taken us further down than any other president.  Towards European socialism.  It’s all there in history.  And the economic numbers.  How activist governments destroy everything that made capitalist countries great.  Thrift.  Frugalness.  Working hard to save for your future.  Which created a strong banking system.  Where people deposited their money.  Creating investment capital.  And bankers practiced sound lending practices.  And suffered the consequences of making risky loans.  Unlike today.  Thanks to Keynesian economics.  And a monetary policy that controls and plays with interest rates to create artificial demand that causes great bubbles.  And prolonged recessions.  Ever since governments took control of interest rates and began printing money to finance the growth of their activist governments they have set countries everywhere on the path to financial ruin.  And bankruptcy.  As government spending outgrew the ability of taxes to pay for it.  And then the debt grew so great they struggled to finance it.

But it doesn’t deter the Keynesians from trying the same failed policies of the past.  They continue to intervene into the private sector economy.  And when they cause great economic damage they just report bad economic news as good (see Employment Situation Summary by the Bureau of Labor Statistics posted 9/6/2013).

Total nonfarm payroll employment increased by 169,000 in August, and the unemployment rate was little changed at 7.3 percent, the U.S. Bureau of Labor Statistics reported today.  Employment rose in retail trade and health care but declined in information.

Sounds good.  Things are good.  The economy added new jobs.  Fans of the Obama administration are trumpeting this as good news.  And proof that the Obama economic policies are working.  But if you take a close look at the jobs data you find that the economy is horrible.  Because of President Obama.  And his awful, job-killing economic policies.  Such as Obamacare.  Greater regulatory policies.  And higher taxes.  President Obama has advanced (or tried to advance in the case of cap and trade) every policy that he could think of that causes great harm to the economy.  Is he doing this on purpose because he hates capitalism?  Or is he just another Keynesian who thinks that government is smarter than the people going about their business in the private sector economy?  Or both?

The unemployment rate (the official U-3 rate that counts about the fewest of the actual unemployed) has fallen from a high of 10% since he’s been president.  But it’s not because he’s creating jobs.  It’s because these people just gave up and left the labor force.  Because there are no jobs.  As the falling labor force participation rate clearly shows.

U-3 Unemployment Rate and Labor Force participation Rate Jan 2009- Aug 2013

Ever since President Obama took office the labor force participation rate has steadily declined.  Showing a steady trend of destroying jobs.  Not creating them.  If you want to know exactly how many jobs his policies have destroyed you can get that from the Bureau of Labor Statistics, too.  By subtracting the number of people NOT in the labor force when he took office in January 2009 (80,507,000) from the number of people NOT in the labor force from the August Jobs report (90,473,000).  And when you subtract 80,507,000 from 90,473,000 you get 9,966,000 jobs that President Obama and his economic policies have destroyed.  Just under 10 million people have left the labor force while President Obama has been president.  And yet they celebrate the creation of 169,000 jobs in August.

The economy is not good.  It’s not improving.  It will only improve when we finally abandon the failed Keynesian policies of the past.  And get the government out of the private sector economy. The way it was when America became the number one economic power in the world.  Before the progressives/liberals transformed the country into what it is today.  A dying European social democracy.  Where governments tried to give the people everything.  Only to bankrupt their countries.  And caused their people to riot when they couldn’t borrow enough money to keep giving the people what they had been giving them.  Which is usually what happens when you take stuff away from people who have gotten used to having that stuff.  Which is why Obamacare is so insidious.  And important to the left.  Once they make Obamacare a ‘third-rail’ program like Social Security and Medicare they know it will never go away.  No matter what economic damage it does.  Or how much it destroys the quality of health care.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , ,

FT167: “When we lived more austerely there was no need for painful austerity to cure a bloated government.” —Old Pithy

Posted by PITHOCRATES - April 26th, 2013

Fundamental Truth

Wise Men in Governments can Do Anything but Pay for their Nanny States

Economics changed in the early Twentieth Century.  America once again had a central bank.  Progressives were expanding the role of government.  And a new economist entered the scene that the progressives just loved.  For he was a macroeconomist who said government should have an active role in the economy.  A role where government tweaked the economy to make it better.  Stronger.  While avoiding the painful corrections on the downside of a business cycle.  Something laissez-faire capitalism caused.  And could not prevent.  But if wise men in government had the power to tweak the private sector economy they could.  At least this is what the progressives and Keynesian economists thought.

That economist was, of course, John Maynard Keynes.  Who rewrote the book on economics.  And what really excited the progressives was the chapter on spending an economy out of a recession.  Now there were two ways to increase spending in an economy.  You can cut tax rates so consumers have bigger paychecks.  Or the government can spend money that they borrow or print.  The former doesn’t need any government intervention into the private sector economy.  While the latter requires those wise men in government to reach deep into that economy.  Guess which way governments choose to increase spending.  Here’s a hint.  It ain’t the one where they just sit on the sidelines.

Governments changed in the Twentieth Century.  Socialism swept through Europe.  And left social democracies in its wake.  Not quite socialism.  But pretty close.  It was the rise of the nanny state.  Cradle to grave government benefits.  A lot of free stuff.  Including pensions.  Health care.  College educations.  And a lot of government jobs in ever expanding government bureaucracies.  Where wise men in government made everything better for the people living in these nanny states.  And armed with their new Keynesian economic policies there was nothing they couldn’t do.  Except pay for their nanny states.

According to John Maynard Keynes raising Tax Rates reduces New Economic Activity

The problem with a nanny state is things change.  People have fewer babies.  Health care and medicines improve.  Increasing lifespans.  You put this together and you get an aging population.  The death knell of a nanny state.  For when those wise men in government set up all of those generous government benefits they assumed things would continue the way they were.  People would continue to have the same amount of babies.  And we would continue to die just about the time we retired.  Giving us an expanding population of new workers entering the workforce.  While fewer people left the workforce and quickly died.  So the tax base would grow.  And always be larger than those consuming those taxes.  In other words, a Ponzi scheme.

But then change came.  With the Sixties came birth control and abortion.  And we all of a sudden started having fewer babies.  While at the same time advances in medicine was increasing our lifespans.  Which flipped the pyramid upside down.  Fewer people were entering the workforce than were leaving it.  And those leaving it were living a lot longer into retirement.  Consuming record amounts of tax money.  More than the tax base could provide.  Leading to deficit spending.  And growing national debt.

Now remember those two ways to increase spending in the economy?  You either cut tax rates.  Or the government borrows and spends.  So if cutting tax rates will generate new economic activity (i.e., new spending in the economy) what will a tax increase do?  It will decrease spending in the economy.  And reduce new economic activity.  Which caused a problem for these nanny states with aging populations.  As the price tag on their nanny state benefits eventually grew greater than their tax revenue’s ability to pay for it.  So they increased tax rates.  Which reduced economic activity.  And with less economic activity to tax their increase in tax rates actually decreased tax revenue.  Forcing them to run greater deficits.  Which added to their national debts.  Increasing the interest they paid on their debt.  Which left less money to pay for those generous benefits.

President Obama’s Non-Defense Spending caused a Huge Spike in the National Debt not seen since World War II

It’s a vicious cycle.  And eventually you reach a tipping point.  As debts grow larger some start to question the ability of a government to ever repay their debt.  Making it risky to loan them any more money.  Which forces these countries with huge debts to pay higher interest rates on their government bonds.  Which leaves less money to pay for those generous benefits.  While their populations continue to age.  Taking you to that tipping point.  Like many countries in the Eurozone who could no longer borrow money to pay for their nanny states.  Who had to turn to the European Union, the European Central Bank and the International Monetary Fund for emergency loans.  Which did provide those emergency loans.  Under the condition that they cut spending.  Money in exchange for austerity.  Something that just galls those Keynesian economists.  For despite all of their financial woes coming from having too much debt they still believe these governments should spend their way out of their recessions.  And never mind about the deficits.  Or their burgeoning debts.

But these Keynesians are missing a very important and obvious point.  The problem these nations have is due to their inability to borrow money.  Which means they would NOT have a problem if they didn’t need to borrow money.  So austerity will work.  Because it will decrease the amount of money they need to borrow.  Allowing their tax revenue to pay for their spending needs.  Without excessive tax rates that reduce economic activity.  Making the nanny state the source of all their problems.  For had these nations never became social democracies in the first place they never would have had crushing debt levels that cause sovereign debt crises.  But they did.  And their populations aged.  Making it a matter of time before their Ponzi schemes failed.  Something no nation with a growing nanny state and an aging population can avoid.  Even the United States.  Who kept true to their limited government roots for about 100 years.   Then came the progressives.  The central bank.  And Keynesian economics.  Putting the Americans on the same path as the Europeans (see US Federal Debt As Percent Of GDP).

Debt as Percent of GDP and Wars R2

With the end of the Revolutionary War they diligently paid down their war debt.  Which was pretty much the entire federal debt then.  As the federal government was as limited as it could get.  Then came the War of 1812 and the debt grew.  After the war it fell to virtually nothing.  Then it soared to pay for the Civil War.  Which changed the country.  The country was bigger.  Connected by a transcontinental railroad.  And other internal improvements.  Which prevented the debt from falling back down to pre-war levels.  Then it shot up to pay for World War I.  After WWI the Roaring Twenties replaced progressivism and quickly brought the debt down again.  Then Herbert Hoover brought back progressivism and killed the Roaring Twenties.  FDR turned a bad recession into the Great Depression.  By following all of that Keynesian advice to spend the nation out of recession.  From the man himself.  Keynes.  The massive deficit spending of the New Deal raised the debt higher than it was during World War I.  Changing the country again.  Introducing a state pension.  Social Security.  A Ponzi scheme that would struggle once the population started aging.

Then came World War II and the federal debt soared to its highest levels.  After the war a long decline in the debt followed.  At the end of that decline was the Vietnam War.  And LBJ’s Great Society.  Which arrested the fall in the debt.  Its lowest point since the Great Depression.  Which was about as large as the debt during the Civil War and World War I.  Showing the growth in non-defense spending.  Then came Reagan’s surge in defense spending to win the Cold War.  Once the Americans won the Cold War the debt began to fall again.  Until the Islamist terrorist attacks on 9/11.  Halting the fall in the debt as the War on Terror replaced the Cold War.  Then came the Great Recession.  And President Obama.  Whose non-defense spending caused a huge spike in the national debt.  Taking it to a level not seen since World War II.  When an entire world was at war.  But this debt is not from defense spending.  It’s from an expanded nanny state.  As President Obama takes America into the direction of European socialism.  And unsustainable spending.  Which can end in only but one way.  Austerity.  Painful austerity.  Not like the discomfort of the sequester cuts that only were cuts in the rate of future growth.  But real cuts.  Like in Greece.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

FUNDAMENTAL TRUTH #80: “A nation’s government spends too much when its spending increases at a rate greater than its population growth.” – Old Pithy

Posted by PITHOCRATES - August 23rd, 2011

Parents do what they can to Live within their Means 

People don’t have as many children as before.  Why?  Cost.  It’s expensive to have children.  And to raise a family.  Those who decide to raise children make serious changes in their lives.  Because of the costs.

Before kids these people may drive a new car.  Have nice toys.  A boat.  A motorcycle.  Electronic gadgets.  They may go out to eat a lot.  Eat steak at home a couple times a week.  Go to the movies.  Take some exotic vacations.  After kids?  Used car.  Fewer toys.  More hamburger-based dishes at home.  No more movies.  And vacations are closer to home and less exotic and more mundane.

Parents do what they can to live within their means.  And it’s not easy.  Because they typically start families when they are starting their careers.  So their incomes aren’t very large.  And kids are expensive.  Put the two together and you have some serious austerity living in these early years of starting a family.  But they do what they must do to raise their family.

Personal Responsibility is a very Effective System

So let’s take a look at these costs.  The Center of Nutrition Policy and Promotion’s 2010 annual report shows annual costs for different income groups for different ranges of children from babies up to age 17.  Let’s focus on the low set of income numbers (average annual income of $36,840).  To reflect a new family starting at the same time as the income-earner’s career.  And average the two groups of children that cover ages 0-5.  Crunching these numbers to see the impact of adding one additional child on remaining monthly income looks something like this:

(Source:  Center of Nutrition Policy and Promotion’s 2010 annual report, page 26.)

This is only a crude estimate.  But the numbers are telling.  Kids are expensive.  The more you have the less you have.  Money, that is.  That’s why married men raising a family are such better employees than single men with no kids.  That kind of financial responsibility keeps you in on a Friday night instead of drinking with the boys.  It makes you a punctual employee.  And a hard worker.  Eager to advance to higher pay levels.  Because if you don’t, things are going to get pretty difficult when that third child comes along.

It’s a very effective system.  Personal responsibility.  Especially when it’s your income paying your expenses.

We have Social Safety Nets to Help People in their Time of Need

Now suppose this worker doesn’t advance his or her income before having 4 children.  Which will leave only $141.67 a month to live on.  That won’t pay for much rent.  Or food.  In fact, this person will probably be evicted from their home.  And file personal bankruptcy.  Unless family and/or friends offer to help with their finances.  Or they become a ward of the state.

Sadly, things like this happen far too often.  A plant closes.  A husband has a debilitating injury.  There’s a catastrophic health crisis in the family.  So we have social safety nets in place for these people.  To help them in their time of need.  Due to circumstances beyond their control.

But what about those who willfully spend more than their income can support?  People who live on credit?  Refusing to ever live within their means?  Often blaming others for their insufficient income that won’t support the level of spending they want to maintain?  What about them and their irresponsible ways?  Should they force others to pay more to support their irresponsible spending?  Just because they have the power to tax.  And can run deficits?

The Social Safety Nets are becoming more like European Socialism

The federal government has the power to tax.  When they can’t tax anymore they can run deficits.  Financed by borrowing.  Or by simply printing money.  When spending beyond your means is that easy, you can see why the government continually spends beyond its means.

And they are spending ever more.  And the social safety nets have grown.  Social Security.  MedicareMedicaid.  And now Obamacare.  Which are no longer social safety nets.  But more like European socialism.  Like the social democracies of Europe.  That are currently imploding in the Eurozone financial crisis.

Why?  Because the Europeans are no longer treating their people as citizens.  But as children.  Children that never leave the nest.  Cared for from the cradle to the grave.  The responsible parent can understand the problem.  They are trying to raise more children than they can afford.  Just like a few extra children can bankrupt a family of modest income, this ever expanding social welfare will bankrupt the state.  It’s just a matter of time.

Government could take a Lesson from the Average American Family

The problem with generous benefits is that they cost.  And as populations grow so do these benefits.  So they have to pay these ever increasing costs with ever increasing revenue.  Which becomes a problem.  In the private sector.  As well as the public sector.

As GM lost market share, their health care costs increased greater than their sales growth.  They went bankrupt.  Social Security and Medicare costs are growing faster than the population growth.  Which means fewer taxpayers will be available to pay a growing number of benefit recipients.  Both programs are projected to go bankrupt.

Families have to live within their means.  That’s why a family with an annual income of $36,840 doesn’t raise a family of ten children.  They wait until they can afford to.  If that’s what they want.  They make sure they work hard to earn the income necessary to raise a large family.  Government could take a lesson from the average American family.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , ,

Obama Calls for Dems and GOP to Cooperate, Wants to Keep Governing against the Will of the People

Posted by PITHOCRATES - January 1st, 2011

Liberals Always Call for Bipartisanship when they Lose Elections

When Nancy Pelosi and her Democrats won in the 2006 midterm elections, it was the end of conservatism.  They said so.  When Obama won in 2008, he advised those across the aisle that elections have consequences (see The roots of Obama’s demise by Marc A. Thiessen posted 10/25/2010 on The Washington Post). 

The decline of the Obama presidency can be traced to a meeting at the White House just three days after the inauguration, when the new president gathered congressional leaders of both parties to discuss his proposed economic stimulus. House Republican Whip Eric Cantor gave President Obama a list of modest proposals for the bill. Obama said he would consider the GOP ideas, but told the assembled Republicans that “elections have consequences” and “I won.” Backed by the largest congressional majorities in decades, the president was not terribly interested in giving ground to his vanquished adversaries.

When the far left lies and tricks voters to elect them, they confuse that for a mandate.  When the truth of their policies comes out, though, they lose subsequent elections.  Then demand that Republicans work with them.  For the best interests of the American people.  Unlike Nancy Pelosi.  Or President Obama.

When liberal Democrats have the majority in Congress, bipartisanship means that Republicans should accept being the Democrats’ bitch.  When they’re out of power, it means something completely different.  That Republicans shouldn’t govern like Democrats.  Governing roughshod all over the opposition party.  Why?  “Because,” they say.  Pouting.  (They really don’t have anything better.  They just HATE not having power.)

It was Always about Growing Government, not Improving the Economy

And as the new year begins, President Obama is giving us a Bill Clinton wag of the finger (figuratively), telling us to play nice.  Which is what bullies typically do when they lost their power to bully (see Obama: Dems, GOP must cooperate in new year by Julie Pace, Associated Press, posted 1/1/2011 on Yahoo! News).

In his weekly radio and Internet address, Obama said Saturday that lawmakers must return to Washington next week prepared to make serious decisions about how to grow the economy in the short run and stay competitive in the future.

“I’m willing to work with anyone of either party who’s got a good idea and the commitment to see it through,” Obama said. “And we should all expect you to hold us accountable for our progress or our failure to deliver.”

Not quite the ‘thanks but no thanks’ he told the Republicans 3 days after his inauguration.  And all that talk about jobs being job one?  And that laser like focus on jobs?  It was all bull [deleted expletive].  Unemployment went up after his stimulus plan to keep unemployment under 8%.  It’s still flirting with 10% some 2 years later.  But the size of government spending exploded.  Which is what the Left wants.  It’s what they always want.  So they got what they wanted.  The only problem is that some of their supporters believed they were trying to improve the economy.

The Public Sector’s Message to the Taxpayers:  Let Them Eat Cake

The liberal left comprises approximately 20% of the population.  That’s why it’s hard for them to win elections.  Especially after they’ve exploded government spending following an election win.  And that spending is bankrupting the country.  Our states.  And our cities.

A big chunk of that spending goes to support the public sector.  Public sector unions have made public sector jobs very cushy.  No one in the private sector comes close to their wage and benefit packages.  And no one in the private sector enjoys job security like they have in the public sector.  Until now.  In Wisconsin, the Republicans are in power.  And the public sector is getting nervous (see Wisconsin State Workers Fret, as G.O.P. Takes Over by Monica Davey posted 1/1/2011 on The New York Times)

But it’s just not in Wisconsin.  Public sector unions are nervous wherever Republicans have ascended to power.  Because they worry that the good times may come to an end.  And they may have to live like the rest of us.  Some are even predicting that we may see a little European rioting here in the United States (see Topic A: What will be 2011’s biggest political surprise? by Ed Rogers posted 1/2/2011 on The Washington Post).

The biggest political surprise in 2011 may come in the form of the shock produced by public-sector labor strikes and demonstrations that could stray into civil disorder as state and local governments cut budgets. Government workers could be laid off by the thousands, and millions of the beneficiaries of government-supplied salaries, pensions and benefits could see reductions in pay and program allowances they have been told to expect.

The same kind of protests that have rocked Paris, London and Rome could erupt in California, New York and Illinois.

When European Socialism cuts back on pensions, college tuition assistance, health care, etc., the beneficiaries of European Socialism burn cities.  And this anarchy may be coming to a city near you.

The schism between the governed and those governing could become greater than ever as the government tries to protect itself for its own sake and not for the public good. The millions of Americans who have lost jobs or face increasing economic uncertainty resent the relative posterity and security that government now provides for itself. President Obama will say he is for more “stimulus,” but even the money-making printing presses in Washington are at their limits.

It’s a master-slave mentality.  The masters are the public sector.  The slaves are the taxpayers.  And the masters have lost touch with reality.  They laugh at the poor suffering masses struggling to pay their taxes.  When advised of the taxpayer’s plight what do they say?  “Let them eat cake.”  (A reference to what Marie Antoinette reportedly said during the French Revolution.  While the upper classes had food, the lower classes were to be satisfied with oven scrapings.)

Pennsylvania Liquor Stores a Microcosm of Public Sectors Everywhere

Of course, the poor, suffering taxpayers would probably not be in such a foul mood if it wasn’t for the value they were getting for those high taxes.  That public sector sucks.  As any enterprise without competition does.  Why give a damn about what you’re doing if you’re the only caterer in town?

In Pennsylvania, you can only buy wine and liquor in a government store.  And the service stinks to high heaven.  The good people of Pennsylvania want to privatize their booze.  But the public sector union oppose privatization (see A Push to Privatize Pennsylvania Liquor Stores by Julie Pace, Associated Press, posted 12/31/2010 on The New York Times).

Like prisoners in the gulag, consumers here can only fantasize about buying their wine and liquor in a competitive free market. The Commonwealth of Pennsylvania has run the liquor stores for eight decades, a relic of the post-Prohibition era, when government thought controlling the sale of alcohol would limit consumption.

The legislature has consistently dismissed talk of privatizing the system, mainly because of opposition from the union representing the store workers and from groups like Mothers Against Drunk Driving and conservative teetotalers, all influential in the state.

And what’s the recourse for an angry people?

“This is insane!” said Bill Conrad, 68, a retired electrical engineer. “People are going to New York and Jersey” to buy alcohol.

And there it is.  Competition makes everything better.  Should you be lucky enough to live close to the state border.  Where I live, I can go to most any party store, some drugstores, even some supermarkets.  And you know what?  I can go to anyone and buy whatever I want whenever I want.  Private stores have competition so they have an incentive to keep their shelves stocked.  And their doors open for customers.

If you want to get an idea about how Obamacare will be, you can look at the liquor stores in Pennsylvania.  That’s what happens when the governments tries to run anything.

The Taxpayers Message to the Public Sector Employees:  Get a Job

The Democrats took a shellacking at the 2010 midterm elections.  The people have rejected their Big Government liberal agenda.  And they know it.  So they’re now trying to shame the Republicans into working with them to keep their Big Government dreams alive.  It’s either that or they have to figure out a way to get rid of those pesky elections.

But the public sector is bankrupting the country.  And the people paying the taxes to support that public sector are saying enough is enough.  They don’t like making sacrifices in their own life so others in government can live a better life.  Especially when they have to settle for such rotten service from the public sector they’re paying more and more to fund.

Their message to these pampered public sector employees?  The same parents have been telling their kids for ages.  Get a job.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Partnering with the Grim Reaper: Saving Medicare, Medicaid and Obamacare

Posted by PITHOCRATES - December 29th, 2010

Taxing the Young to Save Medicare for the Old

Medicare and Social Security make up the lion’s share of the federal budget.  The government is setting records for both deficits and debt.  And everyone is projecting both of these programs to go bankrupt.  A dim picture for anyone hoping to rely on either for their retirement.  And they’re worried (see AP-GfK Poll: Baby boomers fear outliving Medicare by Jennifer Agiesta and Ricardo Alonso-Zaldivar posted 12/29/2010 on the Associated Press).

A new Associated Press-GfK poll finds that baby boomers believe by a ratio of 2-to-1 they won’t be able to rely on the giant health insurance plan throughout their retirement.

The boomers took a running dive into adolescence and went on to redefine work and family, but getting old is making them nervous.

Now, forty-three percent say they don’t expect to be able to depend on Medicare forever, while only 20 percent think their Medicare is secure. The rest have mixed feelings.

The problem with both Medicare and Social Security is that they are both Ponzi schemes.  Scams by the government to make generations dependent on government.  And to funnel a lot of cash to Washington.  But the Baby Boomers mucked up the works.  Their free love in the 60s and use of birth control and abortion left their family tree a barren one.  The boomer generation of families with maybe 2-3 kids will support in retirement their parent’s generation of families with 10+kids.  There’ll be more people entering retirement than entering the workforce to pay for those retirees.

Here’s the math: when the last of the boomers reaches age 65 in about two decades, Medicare will be covering more than 80 million people. At the same time, the ratio of workers paying taxes to support the program will have plunged from 3.5 for each person receiving benefits currently, to 2.3.

And the numbers are worse.  Because Social Security will be covering those same people.  We’re approaching one working person supporting one person in retirement (Medicare and Social Security benefits combined).  Even Bernie Madoff’s great Ponzi scheme had a better ratio when his pyramid imploded.  It just isn’t sustainable anymore.  Something’s gotta give.  And by something I mean benefits paid out to people.

The government can’t balance its books without dealing with health care costs, and Medicare is in the middle. Some leading Republicans and a few Democrats have called for phasing out the program and instead giving each retiree a fixed payment — or voucher —to help them buy private medical insurance of their choice. The poll found doubts about the idea, and a generational debate.

Overall, a narrow majority (51 percent) of Americans opposed the voucher plan. But those born after 1980 favored it by 47 percent to 41 percent, while seniors opposed it 4-to-1. A majority of boomers were also opposed, with 43 percent strongly objecting.

And here’s the problem.  Those who don’t pay payroll taxes anymore (retirees) are all for raising taxes to pay for their current level of benefits.  No matter how much it bankrupts future generations.  And these people vote.  More than anyone else.  So for good reason they call Social Security the third rail of politics.  You touch it at your own peril.  Those with a lifetime of paying taxes ahead of them, on the other hand, would rather raise a family than support an individual in retirement.  Not only do they want to touch the third rail, they want to short it out.  But they don’t have the numbers.  Yet.

States to Make Steep Cuts in Medicaid to Stave off Bankruptcy

And we even haven’t talked about Medicaid yet.  This program is bankrupting the states.  It’s their biggest budget item.  And they can’t sustain it any longer (see Medicaid Pushes U.S. States Off ‘Cliff’ as Governors Seek Cuts by Christopher Palmeri and Pat Wechsler posted 12/22/2010 on Bloomberg).

Governors nationwide are taking a scalpel to Medicaid, the jointly run state and federal health-care program for 48 million poor Americans, half of whom are children. The single biggest expense for states, Medicaid consumes about 22 percent of their total $1.6 trillion in expenditures, more than what is allocated to elementary and secondary education, according to a National Governors Association report.

Talk about being stuck between a rock and a hard place.  You know that states aren’t going to cut education.  The unions won’t let them.  So they have to address the 800 pound gorilla in the room.  And cut Medicaid.

Governors are slashing Medicaid to close as much as $140 billion in budget deficits for the 12 months starting in July 2012, after eliminating $130 billion in gaps this year, according to the Center on Budget and Policy Priorities, a Washington-based research group. Spending is being cut even though state revenues rose for the three quarters ended Sept. 30, as the U.S. recovered from the longest recession since the Great Depression, the Nelson A. Rockefeller Institute of Government in Albany, New York, said in a Nov. 30 report.

“I don’t think most states want to sentence people to death,” said Judy Solomon, co-director of health policy at the Center on Budget and Policy. “But what we see is a pretty bleak picture of tough cuts made this year, and next year’s numbers look worse.”

The sad truth is that sick people are costly.  Dead people aren’t.  So you can see where this is going.  Rationing.

Spending on Medicaid nationwide rose 8.8 percent last year, the most since 2002, according to Kaiser. Nearly every state issued at least one new policy to cut program costs in the past two years, including benefit reductions, increased copays and lower reimbursements to health-care providers.

Cost cutting and reductions in benefits.  Rationing.  And you know where that will lead to.  More dead people.  Which is the only thing that will save Medicaid.  That, or federal contributions.

Every state has a unique formula for calculating the federal contribution for Medicaid. The 12 with the highest personal income, including California, New York, New Jersey, Connecticut and Colorado, typically depend on the U.S. government for about half their expenditures.

Lucky for the states that the federal government has money to spare.  Wait a tic, they don’t.  They’re setting record deficits and debt.  They don’t have the money.  Especially now that they’ve thrown Obamacare into the mix.  And the cost for this behemoth will dwarf Medicare and Medicaid.

States face the prospect of enrolling 16 million more people in Medicaid beginning in 2014 under the Patient Protection and Affordable Care Act, the health-care law Obama signed in March. It expands coverage to include certain childless adults under 65, according to Foley & Lardner LLP, a law firm in Milwaukee. The federal government will pay 100 percent of the increased expense for the first three years.

Well, perhaps not.  They’ll be sticking the states with some of those costs.  Poor states.  These unfunded federal mandates are killing them.  But they won’t be the only ones dying.  In three years time, when those federal subsidies expire, some of the current Medicaid patients may lose their heath care benefits.  And die.

Death Panels to Decide Life and Death

The problem with healthcare is that the raison d’être of healthcare is the very thing bankrupting it.  Providing healthcare to sick and dying people.  If the sick and dying would just hurry up and die these healthcare programs (Medicare, Medicaid and Obamacare) would be just fine.  If only there was some mechanism to encourage people to take a pill to manage pain instead of consuming expensive healthcare services.  I mean, they are only delaying the inevitable.  They should just suck it up.  And do the right thing.  After receiving something like, oh, I don’t know, let’s call it end of life counseling (see WSJ Opinion Death Panels Revisited posted 12/29/2010 on The Wall Street Journal).

On Sunday, Robert Pear reported in the New York Times that Medicare will now pay for voluntary end-of-life counseling as part of seniors’ annual physicals. A similar provision was originally included in ObamaCare, but Democrats stripped it out amid the death panel furor. Now Medicare will enact the same policy through regulation.

We hadn’t heard about this development until Mr. Pear’s story, but evidently Medicare tried to prevent the change from becoming public knowledge. The provision is buried in thousands of Federal Register pages setting Medicare’s hospital and physician price controls for 2011 and concludes that such consultations count as a form of preventative care.

No wonder they hid it.  Encouraging people to hurry up and die.  That’s something that doesn’t win you points at the PTA.  The law as written isn’t all that bad, though.  The panels are voluntary.  So far.  But everything Big Government has done started small.  They are, after all, the master of incrementalism.  And with out of control healthcare spending bankrupting Medicare and Medicaid, what do you think these panels will evolve into?

The regulatory process isn’t supposed to be a black-ops exercise, but expect many more such nontransparent improvisations under the vast powers ObamaCare handed the executive branch. In July, the White House bypassed the Senate to recess appoint Dr. Berwick, who has since testified before Congress for all of two hours, and now he promulgates by fiat a reimbursement policy that Congress explicitly rejected, all while scheming with his political patrons to duck any public scrutiny.

If there was nothing to hide they wouldn’t have hidden this provision so deep in the federal register.  But when you hide things, there are reasons you hide them.  So much for transparency.  And the most ethical Congress ever (of course an ethical Congress is a moot point when the executive rules by fiat).

Under highly centralized national health care, the government inevitably makes cost-minded judgments about what types of care are “best” for society at large, and the standardized treatments it prescribes inevitably steal life-saving options from individual patients. This is precisely why many liberals like former White House budget director Peter Orszag support government-run health care to control costs: Technocrats in government can then decide who gets Avastin for cancer, say, and who doesn’t.

When a government bureaucrat decides who gets life-saving medication and who doesn’t, that sounds like a death panel to me.  Because that decision has the power of life and death.  They can be as nontransparent as they want but the truth is pretty clear.  To control the out of control spending of Medicare and Medicaid (and, in time, Obamacare), they will be partnering with the Grim Reaper.  Because dead people don’t consume health care benefits.  And that is their biggest problem.  Consumers of benefits.

The Swedish National Health Care System Rations Care

So what about the social utopias of European Socialism?  Those advanced nations that have national healthcare?  Are they having these problems?  Of course they are.  In fact, their future is ours.  Here’s a small sampling of what to expect (see Man’s penis amputated following misdiagnosis posted 12/29/2010 in Science and Technology on The Local).

A Swedish man was forced to have his penis amputated after waiting more than a year to learn he had cancer.

The man, who is in his sixties, first visited a local clinic in Blekinge in southern Sweden in September 2009 for treatment of a urinary tract infection, the local Blekinge Läns Tidning (BLT) reported.

When he returned in March 2010 complaining of foreskin irritation, the doctor on duty at the time diagnosed the problem as a simple case of inflammation.

After three weeks passed without the prescribed treatment alleviating the man’s condition, he was instructed to seek further treatment at Blekinge Hospital.

But it took five months before he was able to schedule an appointment at the hospital.

When he finally met with doctors at the hospital, the man was informed he had cancer and his penis would have to be removed.

It remains unclear if the man would have been able to keep his penis had the cancer been detected sooner.

The matter has now been reported to the National Board of Health and Welfare (Socialstyrelsen) under Sweden’s Lex Maria laws, the informal name used to refer to regulations governing the reporting of injuries or incidents in the Swedish health care system.

Misdiagnosis.  And long waits.  National healthcare.  Where government bureaucrats cut costs and make doctors work long hours.  Not a very attractive offer for all those years of medical school.  So there’s a doctor shortage.  And, consequently, long waits.  In this case, 6 months to be advised he needed to go someplace else.  Then another 5 to get an appointment someplace else.  In the mean time the cancer spread.  This is what happens when you ration health care.

Is this the future you want?  It’s not the future I want.

The Third Rail of Politics is a Generational Thing

It’s a generational battle.  The young want to cut taxes (and benefits).  Because they’re paying those taxes.  And not consuming the benefits.  The old want to raise taxes and maintain benefits.  Because they’re not paying those taxes.  But are consuming the benefits.  Right now there are more old than young.  So you can guess who will win this struggle.  Bankrupting the future will help the politicians stay in office today.  So the old will win.

But there is a little irony in all of this.  To save these programs (Medicare, Medicaid and Obamacare), they need old people to die.  But once they do, the politicians will lose their political support.  The younger generation (whose future the politicians mortgaged) will then broom them out of office.  And they will be all too glad to short out that third rail once and for all.

www.PITHOCRATES.com

 

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Out of Control State Spending – Greece, France, the U.K. and the U.S.A.

Posted by PITHOCRATES - December 15th, 2010

Greece Burning – Public Sector Pay and Pensions Bankrupting the Nation

Things got ugly in Greece during their 2010 financial crisis.  At least three died one day during rioting (see Greek financial crisis explained posted 5/6/2010 on The BBC).

Three people, including a pregnant woman, have been killed during riots in Athens.

And why were the Greeks rioting?

Many of the protesters are public service workers, whose salary comes from the tax payer…

They object to their government’s plan to get Greece’s economy back under control.

It includes a freeze on public sector pay, raising the tax on fuel, and cutting pensions.

And why did Greece find herself in a position to take these austerity measures?

For years, Greece has been spending money it doesn’t have.

The government there took advantage of the economic good-times to borrow money and spend it on pay-rises for public workers and projects such as the 2004 Olympics.

France Burning – Early Retirement Age Bankrupting the Nation

Things weren’t much prettier in France.  They, too, were facing out of control state spending.  So they, too, tried to cut their spending.  And it didn’t go over well with the people (see Proposed retirement age change prompts riots in France by The Associated Press posted 11/4/2010 on The Chicago Sun-Times).

Workers opposed to a higher retirement age blocked roads to airports around France on Wednesday, leaving passengers in Paris dragging suitcases on foot along an emergency breakdown lane.

Outside the capital, hooded youths smashed store windows amid clouds of tear gas.

Riot police in black body armor forced striking workers away from blocked fuel depots in western France, restoring gasoline to areas where pumps were dry after weeks of protests over the government proposal raising the age from 60 to 62.

And what was their greatest fear of these austerity cuts?

Many workers feel the change would be a first step in eroding France’s social benefits – which include long vacations, contracts that make it hard for employers to lay off workers and a state-subsidized health care system – in favor of “American-style capitalism.”

The United Kingdom Burning – Cheap College Tuition Bankrupting the Nation

Meanwhile, in the U.K., they’re having their own riots.  And the rioters attacked the Royal Family.  Fortunately for Prince Charles, his car took the brunt of the attack (see Prince Charles’s car kicked in tuition riot by The Associated Press posted 12/9/2010 on CBC News). 

“We can confirm that the royal highnesses’ car was attacked by protesters on their way to their engagement at the London Palladium this evening. The royal highnesses are unharmed,” a statement from Prince Charles’s press secretary said.

And why were the people rioting?  Much like in Greece and France, the U.K.’s generous social benefits are bankrupting the nation.

Cameron’s government describes the move as a painful necessity to deal with a record budget deficit and a sputtering economy. To balance its books, the U.K. passed a four-year package of spending cuts worth $129 billion, which will lead to the loss of hundreds of thousands of public sector jobs and cut or curtail hundreds of government programs.

The government proposed raising the maximum university tuition fees in England from $4,780 a year to $14,000. Students reacted with mass protests that have been marred by violence and have paralyzed some campuses.

Not Burning Yet – Social Security and Medicare Bankrupting the Nation

Social Security and Medicare are going broke.  And will.  It’s just a matter of time.  When they came into being, there was an expanding birth rate.  Actuaries counted on those birth rates to continue.  But they didn’t.  The baby boom generation had only about 3 children per family.  Whereas their parent’s generation often had 10 kids or more.

Social Security is like a Ponzi Scheme.  There are no retirement accounts.  Payroll taxes from workers today pay the retirees of today.  Think pyramid scheme.  As long as the base of the pyramid (those workers paying taxes) grows at a greater rate than the tip of the pyramid (those collecting benefits) the scheme works.  But with the reduction in birth rates and our aging population, the pyramid has inverted.  The tip of the pyramid is growing at a greater rate than the base is.  As the ‘size’ of the tip and the base approach each other, eventually one worker will support one retiree.  And if a retiree lives on, say, $30,000 a year, do the math.  In a two-income family, one income will support a retiree.  And nothing else.  And that just ain’t sustainable.  Ergo, Social Security will go broke.

Ditto for Medicare.

Obamacare – Tinder, Gasoline and a Match

All right, we’ve seen how out of control state spending has led to austerity measures throughout Europe.  And rioting.  We have two huge entitlement programs pushing our county down the same path.  Europe is cutting costs (even when cities are burning in the process).  And what do we do?  We double down.  We add a third entitlement behemoth that will make Social Security and Medicare look tiny in comparison.

Obamacare.  Affordable health care for everyone.  Because the government is going to force everyone to buy health insurance.  Because the more people who pay premiums, the lower each premium needs to be.  Think pyramid scheme.  You need more to pay in (the base) than collect benefits (the tip).  Because this ain’t insurance.  It’s the mother lode of welfare entitlements.  And it’s also something else.  Unconstitutional (see Opposition to Health Law Is Steeped in Tradition by David Leonhardt posted 12/14/2010 on The New York Times).

On Monday, a federal judge ruled part of the law to be unconstitutional, and the Supreme Court will probably need to settle the matter in the end.

But that doesn’t stop the Obamacare cheerleaders.

We’ve lived through a version of this story before, and not just with Medicare. Nearly every time this country has expanded its social safety net or tried to guarantee civil rights, passionate opposition has followed.

The opposition stems from the tension between two competing traditions in the American economy. One is the laissez-faire tradition that celebrates individuality and risk-taking. The other is the progressive tradition that says people have a right to a minimum standard of living — time off from work, education and the like.

Yes, the two competing traditions.  The individuality and risk-taking that has defined America until Woodrow Wilson and the Progressives came along.  And the entitlement mentality.  Also known as European Socialism.  Like they have, had, have in Greece, France and Great Britain.  And we’ve seen how that has worked.  But we don’t learn from the lessons of history, do we?

The federal income tax, a senator from New York said a century ago, might mean the end of “our distinctively American experiment of individual freedom.” Social Security was actually a plan “to Sovietize America,” a previous head of the Chamber of Commerce said in 1935. The minimum wage and mandated overtime pay were steps “in the direction of Communism, Bolshevism, fascism and Nazism,” the National Association of Manufacturers charged in 1938.

When my dad worked gross pay meant something.  Today it’s all about net pay.  What’s left after taxes.  Taxes have grown so great that a single wage earner has trouble raising a family.  Unlike those families back before the baby boom.  When a single wage earner could raise 10 kids.  So, yes, the federal income tax has greatly changed the American experiment in individual freedom.

Social Security has ‘Sovietize’ America.  Retirees live in fear of losing their state benefits.  And they know that it’s in their ‘best interest’ to support the state.  And they do.  At the voting booth.  Potato.  Tomato.  The only difference is that we don’t have gulags in Siberia here.  But we don’t need them.  Because the threat of cutting a retiree’s benefits scares them enough to toe the party line.

And now we want to add national health care to the mix.  Because every other rich country has jumped off that bridge.

It is clearly one of the least radical ways for the United States to end its status as the only rich country with millions and millions of uninsured.

There’s a reason why the U.S. does not pay for millions and millions of uninsured here.  Why?  See Greece, France and the U.K. above. 

Guaranteeing people a decent retirement and decent health care does more than smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks. If you know that professional failure won’t leave you penniless and won’t prevent your child from receiving needed medical care, you can leave the comfort of a large corporation and take a chance on your own idea. You can take a shot at becoming the next great American entrepreneur.

With every previous major expansion of the safety net, history has had a chance to prove the naysayers wrong. It may yet in the case of universal health coverage. But the decision now seems to rest with the nine members of the Supreme Court.

Again, see Greece, France and the U.K. above.  As nice and compassionate as it sounds, it just doesn’t work.  European Socialism.  If it did, it would have worked in Greece, France and the U.K.  But it didn’t.  And that should scare the hell out of us here.  Because we’re heading down the same road.

And history may just prove the naysayers were right.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Costs of European Socialism Bankrupting the EU?

Posted by PITHOCRATES - December 6th, 2010

European Socialism – Voting yourself the Treasury

The Left loves European Socialism.  They want it here.  They’ve been trying to get here.  All the while the Europeans are trying to move away from it there.

Socialism doesn’t work.  Once people learn they can vote themselves the treasury, they do.  It’s been the death knell of all democracies.  As those state benefits get bigger, they entice more people.  They say, “Work?  But why?”  Because many can live comfortably without working, many do.  And they sign up for those generous state benefits.

The problem is that there is no ‘secret stash’ of government money.  Everything they spend they take from us.  Those who work.  So taxes go up.  Working people get less.  And the government-dependent grows and becomes an important voting demographic.  And they vote.  They vote themselves the treasury.  And why not?  It’s not their money.  Not yet, at least.

The EU, the Euro and the ECB cannot Fix the Fundamental Flaw of Socialism

Eventually, the number of working people decrease.  And the number of those not working increase.  More and more people receive benefits.  And fewer and fewer people pay taxes to fund those benefits.  So they keep raising the taxes on those who work.  To pay those who don’t.  But they can only raise them so far.  Because people simply won’t work for free so their neighbor can live a better life.

And how is that European Socialism working?  Much like the people collecting those generous benefits.  It ain’t working either.  To compete against the economic power of the United States, they’re trying to become like the United States.  They created the European Union (EU).  A European Central Bank (ECB).  And a common currency (the Euro).  Because they thought bigger was better.  Because the United States is a big economic zone.

But the Europeans have a problem.  They’re still social democracies.  And the trends continued after the union and the Euro.  More people collecting benefits.  Fewer people paying taxes.  Some of these countries are going through debt crisis.  And as these countries implode in their financial crises, the affects are felt throughout the European Union (see Euro’s Worst to Come as Trichet Fails to Calm Crisis, Top Forecasters Say by Anchalee Worrachate posted 12/5/2010 on Bloomberg). 

The 16-nation currency’s [the Euro] first weekly gain against the dollar since Nov. 5 may prove short-lived amid mounting concern that more nations will need rescues. European Central Bank President Jean-Claude Trichet delayed the end of emergency stimulus measures last week and stepped up government-debt purchases as “acute” market tensions drove yields on Spanish and Italian bonds to the highest levels relative to German bunds since the euro started in 1999.

“We’re going to get a continuation of the problems that Ireland, Portugal, Spain and others are suffering,” said Callum Henderson, Standard Chartered’s global head of foreign-exchange research in Singapore. “The fundamental issue is these are countries that have relatively large debts, large budget deficits, large current-account deficits, they don’t have their own currency and they can’t cut interest rates. The only way they can get out of this is to have significant recessions.”

Once upon a time Europe was ablaze in war. The growth of nationalism brought nations into conflict with each other over land, food and resources.  They redrew their borders in blood.  Nations did not give up their national sovereignty without a fight.  Which makes the European Union that much remarkable.  What they fought to the death to prevent they now give up voluntarily.  Of course, when your nation is on the brink of bankruptcy, what have you got to lose?  Having someone else bail you out of your financial mess?

Can the Euro and the ECB Survive European Socialism?

A weak currency helps a nation to export goods.  The more they export the more economic activity they have.  And the more jobs.  And the more people to tax.  So a weak currency can be a good thing.

But a weak currency also carries some baggage.  If a nation is ‘printing money’ to pay for excessive state benefits, that will not only make the currency weak, it will also increase prices; it’ll take more of those weak dollars (or Euros, or Pounds, or Yen, etc.) to buy things.  Even government benefits.  This is counterproductive.  People have less purchasing power.  And the government has to tax, borrow or print more because they, too, have less purchasing power.

The United States debased its currency.  Which helped the Euro gain some strength.

Just a month ago the euro reached $1.4282, the strongest level since January, as traders sold the dollar on speculation the Federal Reserve would debase the greenback by printing more cash to purchase $600 billion of Treasuries in so-called quantitative easing.

But the Euro wasn’t getting stronger.  The dollar was just getting weaker.  Both currencies are losing value.  And with more member nations in the EU getting weaker, the stronger ones may bail to save themselves.

Taylor [chairman of FX Concepts LLC, the world’s biggest currency hedge fund] predicted some nations may leave the common currency. Stronger members “have to say ‘enough, you guys, get out of the euro,’” he said. “The risk that Spain and Italy will get into trouble is going to cause the euro to get quite weak.”

Spain and Italy follows Ireland.  Which followed France.  Which followed Greece.  Nations are struggling under the weight of their debts.  Is there a limit to how much the ECB can help?

The ECB will keep offering banks as much cash as they want through the first quarter over periods of as long as three months at a fixed interest rate, Trichet said. That marks a shift from last month, when he said that the ECB could start limiting access to its funds.

Time will tell.  The trends are going the wrong way, though.  And there are more countries that can fail.  And they don’t have their own currencies.  So they need the ECB.  And the ECB needs to save them.  To save European Socialism.  Much like the Soviet Union tried to save Soviet communism.  Which, of course, they didn’t.

The problem with the Soviet Union was Soviet communism.  And the problem with the EC is European Socialism.  Great big governmental bureaucracies fail.  Always have.  And always will.

The Europeans know what they need to do, though.  And they are doing it.  Cutting their spending.  Despite the rioting and the burning of some of their cities.  Even with all of that, they are NOT increasing their spending.  Or trying to reduce their deficits by increasing taxes.

As the euro region’s most-indebted nations cut spending to bring their deficits under control, a weaker euro will be needed to cushion their economies, said Ian Stannard, a senior currency strategist in London at BNP Paribas SA, the fifth most accurate forecaster.

Of course, they want a weaker Euro for their exports.  So the EU can sell their export products cheaper than the domestic products of the import countries.  Which those import countries will not welcome with open arms.  Because they’re trying to grow their economies, too.  But that’s a whole other story (if you’re interested you can read about how international trade wars brought about the Great Depression).

It’s European

Meanwhile, on the other side of the pond, we’re having our own financial problems.  Large debts, large budget deficits, large current-account deficits.  Just like the Europeans.  Only difference is that the Obama administration is trying increase taxes and spending to fix our problems.  The Left calls this economic stimulus.  Rational people just call it stupid.

The political Left likes all things European.  In fact, they want to be European.  So I say let’s be European.  Let’s cut our spending like the Europeans.  I mean, if the Europeans don’t want to be like us (tax and spend), perhaps we should be like them (cut spending).  After all, if it’s European, even the Left should find it the fashionable thing to do.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

FUNDAMENTAL TRUTH #35: “Not only is ignorance bliss, but it’s a godsend to Big Government.” -Old Pithy

Posted by PITHOCRATES - October 12th, 2010

A Dumb Animal is a Content Animal

We had a customer once across from a slaughterhouse.  The customer is long gone.  But the slaughterhouse is still there.  I remember one cold December day.  It was close to the holidays.  A festive time.  Parked in the street were two cattle trucks.  You could see their breath puffing out through the slats.  They had no idea what was waiting for them once they left those trucks.  They just stood there.  Quiet.  And content.

I had a cat once that lived to a ripe old age.  In his old age, he suffered a stroke in his back end.  His rear legs weren’t that steady.  His feet kind of flopped around when he walked.  He spent most of his days in the basement on an old chair.  His water dish was underneath the chair.  And a litter box was only a few steps away.  We took food down to him.  But every hour or so he struggled up the steps to the food dish in my study.  He ate.  Then I picked him up and placed him on my lap for some petting.  He purred profusely.  After 10 minutes or so he squirmed to get down.  Ate some more.  Then limped back downstairs.  He was a shadow of his old nimble self.  But he was content.  To him, his life was normal.  He couldn’t dwell about what was.  Or what will be.  He just knew when his tummy was empty.  And when he craved affection.

In Gone with the Wind, when Atlanta was burning, Rhett Butler was helping Scarlet escape the city.  The fire panicked their horse, though.  It reared up and refused to move.  So Rhett covered the horse’s eyes and said something like, “You’ll like this better if you can’t see it.”  The horse calmed down.  The fire was still there all around them.  But the horse couldn’t see it.  And they made their escape with Rhett leading the blindfolded horse.

Dwelling on the Fear of the Unknown

Sure, they’re just dumb animals.  But are we really all that different?  Apart from having hands with opposable thumbs, consciousness, an advanced language, our use of tools and our farming and animal husbandry skills to provide an abundant food supply, no.  We prefer to not know unpleasant things.  Especially if there’s nothing we can do to prevent those unpleasant things from happening.  Or think too much about good things.  If there’s a chance we can spoil them.

A pitcher throwing a perfect game (27 up and 27 out) in the major leagues is rare.  It’s great when it happens.  And heart-breaking when batter 27 gets on base.  Whether by a base hit.  Or an error.  As a game moves ever closer to perfection, a deep dread and fear permeates everyone on that team.  They don’t want to be that guy that spoils the perfect game.  And they don’t talk about a perfect game lest they jinx it.  They try to act as if they don’t know what is about to happen.  To ignore the weight of the world crushing down on them.

Sometimes it’s not dwelling on the good that might not happen.  Sometimes it’s dwelling on the bad that may happen.  An infantry patrol going out behind enemy lines to snag some prisoners, for example.  It’s dangerous.  There’s a very good chance that some will not survive the patrol.  As your patrol waits for h-hour, you don’t look at your fellow soldiers and wonder who might die.  You don’t talk about it.  You just try to push it from your mind.  You go through the motions.  Machine-like.  Focus on the mission.  And your training.  And the next 5 minutes.  You try not to think too far beyond that because, well, you just don’t.  If something happens, it happens.  Thinking about it won’t make it not happen.  In fact, thinking about it may distract you a fraction of a second when the shooting starts and make it happen.

Sometimes it’s a cough that won’t go away.  Or a lump that wasn’t there before.  You get a sickening feeling when you think about what it may be.  So you try not to think about it.  You ignore it.  You get used to it.  Acclimate to it.  You don’t dwell on it.  Because the reality of it can be so unpleasant.  But resorting to pure animal ignorant bliss may very well kill you.  Sometimes we have to think about the unpleasant.  To dwell about what might be.  For if we do early enough, things don’t have to be as bad as they could be.

Have Food Will Bow

Life was pretty harsh until the British came around.  Their ideas about representative government and capitalism led to a freeing of the masses from a life of drudgery and suffering like no other people did.  From these ideals grew a new nation.  America.  And the Americans inspired an Old World nation.  France.

It is hard for people today to fully understand what life was like for the average person before the ideas of representative government and capitalism.  The average person was poor.  Not middle class.  But poor.  They lived in abject poverty.  They were overworked.  Under paid.  Oppressed.  Malnourished.  Emaciated.  They were miserable, wretched people living miserable, wretched lives.  Quite a difference from today where the average person is middle class and the poor are often overweight.  Even obese.

This life was commonplace when oppressive state powers were commonplace.  As the state’s power grew more limited, the average person’s life grew less miserable.  The poor in pre-revolutionary France, working some of Europe’s most arable soil under an absolute monarchy, suffered from recurring famine.  Meanwhile, over in the tiny island kingdom of Great Britain, a constitutional monarchy, they did not suffer recurring famines.  In fact, they were grain exporters.  That’s why there was no British Revolution to overthrow their monarchy as Europe trembled in the face of Napoleon’s advancing armies.  Life was pretty good on that tiny little island.

People are Just Dying to Get Out of their Socialist Utopias

There are great debates about which is better.  Capitalism or socialism.  People like to point to European socialism as the ideal.  These people are, in general, poor.  When the Beatles got obscenely rich, they fled that socialistic utopia.  As did others who struck it rich.  Why?  To keep what they had earned.

Because the vast majority is poor or middle class, we’ll never solve this debate.  The poor and middle class will feel little pity for the rich and approve of confiscatory taxation.  Until they become rich, that is.  But what about other countries?  Cuba?  North Korea?  The former Soviet Union?  The People’s Republic of China in the days of the great famines? 

Cubans boarded makeshift rafts and risked their lives to make it to Florida.  Those who could in North Korea, like pilots, defected and flew to South Korea.  The Soviet Union had to bribe and hold family members hostage to prevent their spies from defecting once they crossed over into the west.

The Soviet Union would eventually collapse and break out in capitalism.  Communist China allowed some capitalism to prevent a collapse.  Cuba was once a jewel in the Caribbean and now can’t even make a decent cigar.  The North Koreans are still suffering recurring famines and chronic energy shortages.  No, in these hardcore socialist states the message is clear.  Life for the average person is little better than it was in the Middle Ages.  And those who could escape their ‘utopias’ did.

Blinders are Okay if you’re a Horse

The scary thing is that these communist nations started out as people’s revolutions.  They attacked the rich.  Even the middle class.  They promised their people everything (more food, shorter working days, free universal health care, free universal education, etc.).  And, in most cases, failed to deliver.

These nations didn’t become totalitarian states overnight.  It was a process.  A process that went from good intentions to bad to worse.  And here we are in America.  Big Government promising us the same things.  Free food for the poor.  Shorter working days (by empowering unions).  Free universal health care (which is just one public option away).  And free college education for all. 

Should we be concerned?  Yes.  Because these stories always end the same.  After a people votes themselves the treasury, poverty and tyranny typically follow.  It’s like a cancer growing.  And we shouldn’t ignore it.  For if we do, it will only spread further.  And the further it spreads the harder it will be to get rid of it. 

America was the first republic not to collapse.  Can we continue to be that notable exception?  Not by wearing blinders.  As unpleasant it is, we must face this unpleasant truth.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,

FUNDAMENTAL TRUTH #25: “War is costly. Peace, too.” -Old Pithy

Posted by PITHOCRATES - August 3rd, 2010

ONE OF THE lasting consequences of war is the feminization of men.  War makes widows.  And fatherless sons.  Their mothers raise them the best that they can.  But women tend to be kinder and gentler than men.  More nurturing.  Fathers are, after all, the disciplinarians.  “Just wait until your father gets home.”  Sons with fathers knew what that meant.  And it wasn’t kind, gentle nurturing.

The American Civil War killed some 600,000 men.  A generation of fathers was lost.  When their sons came of age, they were more sensitive to the suffering of others.  And they felt a mothering urge to do something about it.  In politics they became Progressives.  They grew government.  Because government knows best.  Well, mother knows best.  And a government that mothers would solve all our social ills.  And these men would mother.  Compassionately.  And they thought all that rugged individualism was overrated.

World War I killed some 9 million men in uniform and about another 7 million in civilians.  These fatherless sons would rise in power and help create the cradle-to-the-grave welfare state known as European Socialism. 

World War II killed some 400,000 American men.  And their sons would follow the European’s lead.  They would attend the universities where the progressives taught.  They came out with heads filled with caring and compassion for victims everywhere.  LBJ’s Great Society would grow out of this movement.  As well as a hatred for American rugged individualism.  And anti-war fervor.

AND THEN YOU had the filthy, maggot-infested hippies.  South Park is a crude comedy.  And Cartman has few redeeming qualities.  But he’s right about hippies.  They ruined this country.  Born in the baby boom following World War II, most had the benefit of a father.  However, by the 1960s, the universities they attended were a lost cause.  Their professors would attack whatever their parents taught them.  They would learn to hate.  In a kind, gentle, nurturing way.

They hated America.  How it became.  What it did.  What its values were.  Are.  Instead, they would embrace America’s enemies.  Have kind, gentle, nurturing compassion for them.  They were proud Marxists.  And Communists.  They relished their First Amendment right to attack the American Republic that gave them that right.  While they supported oppressive regimes where you had no such right.  And spoke ill of the government at your own peril.  Oh, they damned America and its allies for all of their ‘crimes against humanity’.  But they said nothing about the reigning co-champions of human rights abuses.  The Soviet Union.  And Communist China.  No, they wanted to extend the proletarian revolution to America.  So more could suffer the worst of human rights abuses.  Why would anyone adopt such a conflicting course of political action?  Because they’re idiots.

Power to the People.  Give Peace a Chance.  All You Need is Love.  They knew all the answers.  John Lennon et al.  War was business.  Nothing more.  Or the folly of kings.  As the Monkees sang about in this anti-war song:

They met on the battlefield banner in hand.
They looked out across the vacant land.
And they counted the missing, one upon one,
None upon none.
The war it was over before it begun.

Two little kings playing a game.
They gave a war and nobody came.

(from Zor and Zam by Bill Chadwick and John Chadwick
Album: The Birds, the Bees and the Monkees)

This is what the anti-war people believe.  Either war is business.  Or the folly of kings.  That there is no ‘bad guy’ in war.  Just pawns.  And units of production.  Because human nature is peaceful.

WHO DID THE high school bullies pick on?  Who did they pansts?  Steal their lunch money from?  Give a wedgie to?  A swirlie?   Beat up.  Belittle with name calling?  Not tough guys.  Weak guys.  This is human nature.  The strong feed on the weak.

WHEN GUN OWNERS discovered a ‘loophole’ in Floridian law about carrying concealed weapons, they started carrying concealed weapons.  What happened?  Crime on Floridians dropped.  Crimes on tourists rose.  Why?  Because the bad guys knew that tourists didn’t carry concealed weapons.  This is human nature.  The strong feed on the weak.

BACK WHEN DETROIT was the murder capital of the U.S., a friend traveled there and bought a t-shirt.  It read, “Detroit:  Where the Weak are Killed and Eaten.”  Now I don’t recall reports of cannibalism in the Motor City, but the message was clear. Figuratively, of course.  Human nature was becoming animal nature.  The strong feed on the weak.

MANY ANIMAL SPECIES have large litters.  Or numerous litters.  Like bunnies.  Cute little, fluffy, harmless bunnies.  But bunnies are tasty.  They’re low on the food chain.  They are food to almost every carnivore in the wild.  Including man.   Few bunnies live long before becoming a meal.  This is animal nature.  The strong feed on the weak.

“IN EVERY GENERATION there is a chosen one.  She alone will stand against the vampires, the demons and the forces of darkness.  She is the slayer.”  (From the television show Buffy the Vampire Slayer.)  In the world of vampires, demons and the forces of darkness, it’s kill or be eaten.  It’s even the nature of the supernatural.  The strong feed on the weak.

BIG GOVERNMENT AND UNIONS grew big and powerful in the 20th century to protect the little guy.  They said that Big Business and the free market favored the rich and powerful.  At the expense of the poor and weak.  They said it was human nature.  For the strong to feed on the weak.

DURING THE TIME of America’s involvement in Vietnam, the Communist Party of Kampuchea went on a killing spree.  While the hippies protested Vietnam, they praised the social compassion of anti-capitalistic communism.  Power to the People.  Baby.  Meanwhile, the Khmer Rouge killed their own people wholesale (by a percentage of population killed, the greatest in history).  Included in the genocide lists were students or people with glasses.   They killed any ‘educated’ person.  And those who even looked educated.  So, yes, the hippies supported a movement that would have killed their own worthless selves if given the chance.   Human nature at its worse.  The strong feed on the weak.  And the stupidity of hippies.

THERE ARE BAD guys in the world.  And there’s no denying it.  Human nature is not peaceful.  It is anything but.  Darwinian Theory never played out so fiercely.  The strong feed on the weak.  They seek them out.  Like a predator in the wild, they seek out the weak and maimed and move in for the kill.  You can’t reason with them.  Just like you can’t reason with a bully.  Those who think that we can need to man-up and face facts.  And if you can’t, don’t worry.  We have others that are more than willing to man-up and fight our battles for us.  To keep America strong.  If we let them.

Predators don’t respect weakness.  They respect power.  And power is the only thing that will deter them.  The bad guys have attacked American soil few times.  Because America is powerful.  You mess with the big dog and it’s going to bite you.  And maul you.  So the bad guys don’t mess with the big dog often.  Because they pay dearly when they do.

America has known peace and prosperity like few other people can possibly imagine.  And the reason for that is that we have the biggest and baddest military in the world.  It kept the Soviets at bay in Europe.  It thumped Iraqi’s vaunted million-man army in less than 100 hours of combat.  It then thumped them again with a smaller force.  (That display of power cowed Libya from sponsoring terrorism for fear of that awesome power thumping them next.  And it got the Saudis to do the politically unthinkable – take on Al Qaeda in their kingdom.)  It ran bin Laden deep underground leaving him more impotent than threatening.  It held the line in Korea.  And it won every battle it fought in Vietnam.  (Of course, everything went to hell in a handbasket when we left.  But that’s another story.)

But that kind of power doesn’t come cheap.  And you gotta have the will to use it.  But when you do, you get peace.  An expensive peace, yes.  But peace is always cheaper than war.  Especially when that peace deters war.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,