King George, President Nixon and President Obama

Posted by PITHOCRATES - November 7th, 2013

Politics 101

As far as Countries went in 1775 there were None Better than Great Britain

As late as 1775 the American colonists were still seeking reconciliation with Great Britain.  For they were proud to be British.  Citizens of the greatest empire in the world.  The British Empire.  Where there was representative government.  The rule of law.  Free market capitalism.  And no taxation without representation.  As far as countries went in 1775 there were none better.

The problem the colonists had wasn’t with the British Empire.  Or their king.  It was with the people who worked for the king.  And Parliament.  Who were denying them the rights every other British subject enjoyed in the greatest empire in the world.  With things taking a turn for the worse with the Townshend Acts.  The Tea Act.  The Stamp Act.  The Intolerable Acts (Boston Port Act, Massachusetts Government Act, Administration of Justice Act, Quartering Act and Quebec Act). 

The colonists pleaded to King George.  Who they affirmed their loyalty to.  But expressed their frustration with the king’s representatives and Parliament.  Their great incompetence.  And corruption.  Requesting relief from the king.  Wishing the king would see things their way.  And fix things.  Maybe even fire some of his people who were responsible for causing all the trouble they found themselves in.  But kings don’t fire people by request.  For kings are very intolerant.  Especially when their subjects dare to defy them.  Which is why the colonists last attempt at reconciliation, the Olive Branch Petition, was met with scorn from King George.  While the Americans were still debating whether to declare their independence King George saved them the trouble.  And declared that they were in open rebellion.  Hired Hessian mercenaries.  And waged war on his own subjects.

Nixon did not order nor was he aware of the Watergate Break-in but faced Impeachment over the Cover-up

Andy Reid is the most successful coach in the history of the Philadelphia Eagles.  Or, was.  For after going 4-12 in the 2012 season they fired him.  Because the team owner thought he was doing a poor job.  A fate many other head coaches face when they don’t deliver a winning season.  If they aren’t great in their job that’s it.  Owners fire them.  And start looking for someone who will be great.  For the owners have a large investment in their teams.  Money they won’t get back if people stop buying tickets.  Which they will do if they don’t start winning games.

Jacques Nasser was CEO of the Ford Motor Company from 1998 to 2001.  When he took office Ford was the most profitable of all automakers.  During his tenure he tried to change Ford.  To make it even more profitable.  And make Ford more than just a car company.  Sort of what Jack Welch was doing over at GE.  He acquired some other auto companies.  Dabbled in ecommerce.  And other auto businesses down the food chain from new car sales.  Including repair shops.  And even junkyards.  While he was doing all of this Firestone tires were disintegrating on the Ford Explorer.  Suffice it to say that Ford wasn’t as strong financially as it was when Nasser became CEO.  And when you do that there is but one thing to do.  Submit your resignation.  Which he did.

On June 17, 1972, a security guard caught five ‘burglars’ inside the Democratic National Committee’s headquarters at the Watergate Complex.  One of the reasons they were there was to place illegal listening devices.  To hear things that would help President Nixon’s reelection chances.  Nixon did not order this nor was he aware of it.  But names on the burglars led to the White House Plumbers.  Whose job was to stop security leaks.  Something the president did not want made public.  Which led to President Nixon’s involvement as he ordered the cover-up.  A crime so heinous he ultimately had to resign to avoid impeachment.

History shows President Nixon and King George were better Heads of State than President Obama

Scandals have plagued the Obama administration.  Fast and Furious (sending guns to Mexico so they could be ‘found’ after they were used in gun crimes to advance the gun control agenda).  Benghazi (ignoring the security risk in Benghazi and then blaming the murder of 4 Americans by terrorists on a YouTube video to help the president’s reelection chances).  Monitoring phone calls and emails of the Associated Press and Fox’s James Rosen (trying to find the source of security leaks like Nixon’s White House Plumbers).  IRS-gate (using the IRS to target political enemies of the Obama administration to suppress the opposition vote, especially the Tea Party).  And Obamacare. 

The president said if you like your insurance you can keep your insurance.  If you like your doctor you can keep your doctor.  Statements that weren’t true.  As they specifically wrote the new health care law to make sure we would lose our policies and lose our doctors.  Because we had to.  For if they didn’t get these people (the young and healthy with inexpensive ‘crappy’ policies) into their health exchanges Obamacare would be underfunded.  And if these people don’t pay for the old and sick who would?  Besides, the ultimate goal of Obamacare is to get America to a single-payer system.  What the people don’t want.  So the Affordable Care Act has to destroy the private health insurance industry first to force single-payer on the people.  Which will be easier to do when they have no other alternative.

Watergate forced a president to resign and sent some 43 people to jail.  All because of the cover-up.  Which was worse than the crime.  The Obama administration scandals are all worse than a bungled burglary.  And some of the cover-ups have been whoppers of a lie (such as the Benghazi YouTube video).  Yet no one was fired.  No one resigned.  Not even with the debacle of the Obamacare rollout.  (Such a failure would result in firings/resignations in the private sector.)  Any requests for such actions are met with scorn by the Obama administration.  Just like King George did with the American colonists.  For President Obama acts like an imperial president.  Who will lie and deceive to get what he wants (e.g., Obamacare, reelection, etc.).  For he knows what’s best for us.  Gets annoyed when we don’t see his wisdom.  And fumes with rage when his subjects dare defy him.  So President Obama shares some of the worst of President Nixon and King George.  But, sadly, he shares none of their greatness.  For history shows that they were both better heads of state than President Obama.  And that’s with all of their faults.

www.PITHOCRATES.com

Share

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

Social Security Receipts, Outlays and Surplus 1940-2012

Posted by PITHOCRATES - February 19th, 2013

History 101

Social Security is going Bankrupt because of an Aging Population, Inflation and Untrustworthy Politicians

Social Security introduced the era of Big Government.  When the Roosevelt administration passed it into law it faced fierce opposition.  For it wasn’t the job of the federal government to provide a pension.  If it was the Founding Fathers would have included it in the Constitution.  But they didn’t.  Thanks to the Great Depression, though, a serious crisis FDR didn’t let go to waste, FDR was able to change America.  By taking the federal government beyond the limits of the Constitution.

The fear was that it would grow into a massive program requiring more and more taxes to support it.  Which the FDR administration refuted in a 1936 pamphlet (see The 1936 Government Pamphlet on Social Security).

…beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.

Of course, that wasn’t true.  It was either a lie.  Or a disbelief that anyone would ever decouple the dollar from gold.  Or wishful thinking that we can trust politicians.  Whatever the reason the Social Security tax rate is a long way from that 3% today.  And the maximum earnings amount is a lot higher than $3,000.  But despite the tax rate and the maximum earnings amount soaring from these promised lows it’s still not enough.  For Social Security is struggling to avoid bankruptcy in the near future.  Because it has become a massive program requiring more and more taxes to support it.

Social Security is suffering from three major problems.  The first is an aging population (fewer people entering the work force to pay for the greater number of people leaving the workforce).  The second is inflation.  And the third is that politicians manage it.  Who just can’t control themselves around big piles of money.

The Social Security Surplus increased in the Nineties thanks to the Peace Dividend, Japan’s Lost Decade and the Dot-Com Boom

Social Security is off-budget.  Employers and employees pay into the program to provide for the program’s benefits.  These are dedicated taxes.  They are only to pay for Social Security benefits.  That is why it is off-budget.  They don’t mingle Social Security taxes with all the other taxes the government collects.  To pay for all the things in the federal budget.  Technically, those taxes are supposed to go into a retirement account that grows with interest.  And this big, growing pile of money is supposed to pay the benefits.  But in reality it doesn’t work this way.  The government collects taxes.  From these taxes they pay current benefits.  And anything left over, the Social Security surplus, goes into the Social Security Trust Fund.  We can see this graphically if we plot receipts, outlays and the surplus (see Table 2.1—RECEIPTS BY SOURCE: 1934–2017 and Table 3.1—OUTLAYS BY SUPERFUNCTION AND FUNCTION: 1940–2017 at FISCAL YEAR 2013 HISTORICAL TABLES).

Social Security Receipts Outlays Surplus 1940-2012

For the first 30 years or so of this program it hardly made a dent in our lives.  Small amounts were going in.  Small amounts were going out.  And small amounts were going into the trust fund.  Then a lot of people started retiring.  Just as birth control and abortion changed the family size.  And President Nixon decoupled the dollar from gold.  Allowing them to print money like never before.  Which, of course, depreciated the dollar.  This is why receipts and outlays started trending up after 1971 (when Nixon decoupled the dollar from gold).  To get a better look let’s zoom in and look at the years from 1970-2012.

Social Security Receipts Outlays Surplus 1970-2012

The Seventies were a horrible time economically.  As the government went all in with Keynesian economics.  Which resulted with high inflation and high unemployment.  And stagnant economic growth.  Stagflation.  And Social Security was in trouble.  Receipts were greater than outlays.  But not by very much.  Receipts and outlays may have been trending up but the surplus was pretty flat.  Until President Reagan and the Democrat Congress fixed Social Security to avoid bankruptcy.  After 1983 receipts trended up greater than outlays.  Which caused the surplus to trend up.  Thus saving Social Security.  For awhile.  Now let’s zoom in further to the years 1990-2012 to see what happened in the last two decades.

Social Security Receipts Outlays Surplus 1990-2012

President Reagan won the Cold War by spending more on defense than the Soviets could ever match.  At least not without starving her people to death.  And the Strategic Defense Initiative (aka Star Wars) was the straw that broke the camel’s back.  In 1991 the Soviet Union was no more.  Creating a huge peace dividend for President Clinton.  Which coincided with the dot-com boom.  And Japan’s Lost Decade (Japan’s economic woes were America’s prosperity).  Making the Nineties a very good time economically.  And that healthy economic activity translated into a nice uptrend in the Social Security surplus.  However, low interest rates and irrational exuberance fed the dot-com boom.  It was not real economic growth.  It was a bubble.  And when it burst it gave George W. Bush one painful recession at the start of his presidency.  Which was compounded by the tragedy of 9/11.  Causing a fall in economic activity.  Which caused Social Security receipts to fall.  While outlays continued to grow.  Causing a decline in the Social Security surplus.  Once again cuts in tax rates restored economic activity.  And the Social Security surplus.  Which continued until another bubble burst.  This one was a housing bubble.  Caused by President Clinton with his Policy Statement on Discrimination in Lending.  Where his justice department pressured lenders to qualify the unqualified.  And when the housing bubble burst into the Subprime Mortgage Crisis giving us the Great Recession receipts fell while outlays increased.  Sending the surplus into a freefall.

Social Security is Doomed to Fail because you just can’t Trust Politicians around Great Big Piles of Money

There is both a Social Security tax rate.  And a maximum amount of income to tax.  Both of which they have had to increase to keep up with inflation.  To make up for that aging population.  And to offset the corrupting influence of politicians around big piles of money.  And contrary to that 1936 pamphlet those tax rates started rising early.  And often (see Historical Social Security Tax Rates).

Social Security Surplus and Tax Rate

The Social Security tax rate rose as high as 12.4%.  Which is a 313% increase from the maximum amount guaranteed in that 1936 pamphlet.  And this great upward trend began in the Fifties.  Continuing through the Sixties.  In fact most of the increases came before Nixon decoupled the dollar from gold.  Showing what a horrible job the government actuaries did in crunching the numbers for this program.  As it turned into exactly what the opponents said it would.  A massive program requiring more and more taxes to support it.  And President Obama reducing the tax rate from 12.4% to 10.4% didn’t help the surplus any.  Or the solvency of Social Security.

Social Security Surplus and Maximum Earnings

While the tax rate began rising in the Fifties the maximum taxable earnings amount didn’t.  This amount was pretty flat and able to produce a surplus until 1971.  When President Nixon unleashed the inflation monster by decoupling the dollar from gold.  And the only way to produce a surplus after that was by continuously increasing the maximum earnings amount.  Further proving what a horrible job the government actuaries did in crunching the numbers for this program.  But why are they projecting Social Security will go bankrupt after raising both the tax rate and the maximum taxable earnings amount?  For despite all of the ups and downs there has been a surplus throughout the life of the program.  Some seventy years of a surplus and the miracle of compound interest should have built up quite a nest egg in the Social Security Trust Fund.  But it hasn’t.  Why?  Well, we can see what it could have been.  If we take each year’s surplus (starting in 1940) and add it to an account earning interest compounded annually at an interest rate of 3% through 1971 and 6% after 1971 (to account for inflation) it would look something like this.

Social Security Surplus Earning Compound Interest

Note that these amounts are in millions of dollars.  So at the end of 2012 the ending balance in the trust fund would be $16.5 trillion.  Which is large enough to wipe out the entire federal debt.  From 1980 through 2008 the surplus grew on average 8% each year.  If we assume this growth through 2050 that would take the trust fund to $184.5 trillion.  In 2075 it would be $960.9 trillion.  In 2076 it would be $1.03 quadrillion.  Or $1,027.3 trillion.  With this phenomenal growth based on a realistic 6% interest rate why is Social Security going bankrupt?

Because there isn’t a big pile of money in the Social Security Trust Fund earning compound interest.  The money goes in.  And the government takes it out.  Leaving behind treasury securities.  IOUs.  They raid the Social Security trust fund to pay for other on-budget government expenditures.  With the off-budget surplus.  Hiding the true size of the federal deficit.  And putting Social Security on the path to bankruptcy.  Because you can’t loan money to yourself.  You can only take money meant for one thing and spend it on another.  Leaving that first thing unpaid.  This is Social Security.  And why it was doomed to fail from the beginning.  Because you just can’t trust politicians around great big piles of money.

 www.PITHOCRATES.com

Share

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

President Nixon helped President Clinton despite what Hillary Clinton Did

Posted by PITHOCRATES - February 16th, 2013

Week in Review

Hillary Clinton was the Secretary of State when terrorists killed four Americans in Benghazi.  Ambassador Stevens had requested additional security as the safety of Westerners in Benghazi was tenuous.  The British had already left after an attempt on their ambassador’s life.  But Secretary Clinton denied Ambassador Stevens’ request.  For it didn’t look good politically.

All during the 2012 campaign the Democrats repeated over and over how Osama bin Laden was dead.  And General Motors was alive.  Not only that al Qaeda was on the ropes.  Because President Obama defeated them.  Making them an empty shell of what they were when President Bush was president.  This is why we needed to reelect President Obama.  Because only he could defeat al Qaeda.  And did.  After winning the War on Terror it just wouldn’t look good to be beefing up security to defend against a resurgent al Qaeda.  Because that would go against the narrative that President Obama defeated al Qaeda.  So Ambassador Stevens and the Americans in Benghazi were left to fend for themselves so they wouldn’t reflect adversely on the president’s reelection campaign.  And then came 9/11/2012.

Four Americans died so as not to be a political inconvenience to President Obama.  And Secretary Clinton let that happen.  For their safety was her responsibility.  And it was no secret that Benghazi was not a safe place.  Which is why the British left.  When Secretary Clinton finally appeared before Congress to explain how four Americans died under her watch she got indignant and simply yelled “what difference does it make” to their questions.  Refusing to answer them.  Angry and annoyed that these Republicans even dared to ask her these questions.  Why wasn’t security beefed up?  Why didn’t we send help when they were under attack?  Why did she lie about it being a spontaneous reaction to a YouTube video?  Who edited the talking points given to Ambassador Rice?  She did not like these questions.  And she made her resentment clear.  Funny when the shoe is on the other foot (see Documents show Bill Clinton’s close dealings with Richard Nixon on Russia, foreign affairs by Michael R. Blood, The Associated Press, posted 2/13/2013 on The Vancouver Sun).

Richard Nixon, in the final months of his life, quietly advised President Bill Clinton on navigating the post-Cold War world, even offering to serve as a conduit for messages to Russian President Boris Yeltsin and other government officials, newly declassified documents show.

Memos and other records show Nixon’s behind-the-scenes relations with the Clinton White House. The documents are part of an exhibit opening Friday at the Nixon Presidential Library, marking the centennial of his birth.

Clinton has talked often of his gratitude to Nixon for his advice on foreign affairs, particularly Russia. In a video that will be part of the exhibit, Clinton recalls receiving a letter from the 37th president shortly before his death on April 22, 1994, at a time when Clinton was assessing U.S. relations “in a world growing ever more interdependent and yet ungovernable.”

What really makes this remarkable and relevant to Hillary Clinton is this.

Clinton in his younger days was no fan of Nixon — as a college student in the 1960s, he opposed escalation of the Vietnam War. And his wife, former Secretary of State Hillary Rodham Clinton, was a young lawyer advising a House committee when she helped draw up impeachment papers against Nixon.

Hillary Clinton helped draw up the impeachment papers against President Nixon which led to his resignation.  For Watergate.  Which amounted to a burglary.  And some wire-tapping.  There was no loss of life.  President Nixon’s crime, the cover-up, didn’t kill four Americans.  Yet Hillary Clinton helped to destroy President Nixon.  Even though he was a good president when it came to foreign policy.  At least, according to Hillary Clinton’s husband.  President Clinton.  But when she’s on the hot seat she responds with righteous indignation.  Even though her actions, or her lack of action, caused the death of four Americans.

So what can we learn from this?  President Nixon was a good president that put his country first.  Even helping the man whose wife destroyed his career.  President Clinton was not as good a president as President Nixon was.  And Hilary Clinton ruined a good president who didn’t do anything as bad as she did.  Allowing four Americans to die on her watch.  Because she put politics first.  Instead of her country.  Just as she did when she helped to destroy President Nixon.

www.PITHOCRATES.com

Share

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