Aging Populations and Replacement Birthrate

Posted by PITHOCRATES - April 28th, 2014

Economics 101

(Originally published July 8th, 2013)

Trying to follow a Baby Boom with a Baby Bust creates Problems in Advanced Economies with Large Welfare States

In the late 1960s began a movement for zero population growth.  It called for women to have only enough babies to replace the current population.  Not to have too many babies that would increase the population.  Nor have too few babies that the population declines.  Something that women could easily do because of birth control.  And, later, abortion.  The drive behind this was to save the planet.  By keeping large populations becoming like a plague of locusts that devour the earth’s resources and food until the planet can no longer sustain life.

China did these zero population growth people better.  By promoting a negative population growth rate.  Limiting parents to one child.  They did this because during the days of Mao’s China the country set some world records for famine.  Their communist state simply couldn’t provide for her people.  So to help their communist system avoid future famines they tried to limit the number of mouths they had to feed.  Of course, trying to follow a baby boom with a baby bust creates other problems.  Especially in advanced economies with large welfare states.

China’s one-child policy and the preference for boys have led to a shortage of women to marry.  Some Chinese men are even looking at ‘mail-order’ brides from surrounding countries.  But China is going to have an even greater problem caring for her elderly.  Just like Japan.  Japanese couples are having less than 1.5 babies per couple.  Meaning that each successive generation will be smaller than the preceding generation.  As couples aren’t even having enough children to replace themselves when they die.  Leaving the eldest generation the largest percentage of the overall population.  Being paid and cared for by the smallest percentage of the overall population.  The younger generation.

States with Aging Populations are Suffering Debt Crises because they Spend More than their Tax Revenue can Cover

As nations develop advanced economies people develop careers.  Moving from one well-paid job to another.  As they advance in their career.  Creating a lot of income to tax.  Allowing a large welfare state.  Which is similar to a Ponzi scheme.  Or pyramid scheme.  As long as more people are entering the workforce than leaving it their income taxes can pay for the small group at the top of the pyramid that leaves the workforce and begins consuming pension and health care benefits in their retirement.  And there is but one requirement of a successful pyramid scheme.  The base of the pyramid must expand greater than the tip of the pyramid.  The wider the base is relative to the top the more successive the pyramid scheme.  As we can see here.

Babies per Generation - Constant Replacement Birthrate

Generation 1 is at the top of the pyramid.  It is the oldest generation.  Which we approximate as a period of 20 years.  In our example Generation 1 are people aged 78-98.  They’re retired and collecting pension, health care and other benefits.  Some combination of Social Security, Medicare, Medicaid, food stamps, heating assistance, etc.  All paid for by Generation 2 (58-78), Generation 3 (38-58) and Generation 4 (18-38).  Each generation is assumed to bring 6 children into the world.  So these couples are not only replacing themselves but adding an additional 4 children to further increase the size of the population.  Which really makes running a pyramid scheme easy.  For if we assume each member in Generation 1 on average consumes $35,000 annually in benefits that Generations 2 through 4 pay for that comes to $555.56 per person annually.  Or $46.30 per person monthly.  Or $10.68 per person weekly.  Or $1.53 per person daily.  Amounts so small that Generations 2 through 4 can easily pay for Generation 1′s retirement.  Now let’s look at the impact of a declining birthrate with each successive generation.

Babies per Generation - Declining Replacement Birthrate

When all couples in each generation were having on average 6 children this added 1.9 billion new taxpayers.  Which greatly reduced each taxpayer’s share of Generation 1′s retirement costs.  But thanks to birth control, abortion and the growing cost of living each successive generation has fewer babies.  Generation 2 only has 3 children.  Enough to replace themselves.  And add one new taxpayer.  Generation 3 has only 2 children.  Only enough to replace the parents.  Providing that zero population growth that was all the rage during the late 1960s and the 1970s.  While Generation 4 only has 1 child.  Not even enough to replace the parents when they die.  Causing a negative population growth rate.  Which is a big problem in an advanced economy with a large welfare state.  For instead of adding 1.9 billion new taxpayers they only add 217.5 million new taxpayers.  Greatly increasing each taxpayer’s share of Generation 1′s retirement costs.  Instead of paying $555.56 per taxpayer they each have to pay $5,384.62 annually.  Or $448.72 per taxpayer monthly.  Or $103.55 per taxpayer weekly.  Or $14.79 per taxpayer daily.  Numbers that prove to be unsustainable.  The state simply cannot tax people this much for Generation 1′s retirement.  For if they did this and added it to the rest of government’s spending they’re taxing us to fund it would take away all of our income.  This is why advanced economies with aging populations are suffering debt crises.  Because their spending has grown so far beyond their ability to pay for it with tax revenue that they borrow massive amounts of money to finance it.

If you want a Generous Welfare State you need Parents to have More Children

If you carry this out two more generations so every generation only has one child the per taxpayer amount tops out at $14,736.84 annually.  Or $1,228.07 per taxpayer monthly.  Or $283.40 per taxpayer weekly.  Or $40.49 per taxpayer daily.  Amounts far too great for most taxpayers to pay.  This is what an aging population does in a country with a large welfare state.  It makes the population top-heavy in elderly people who no longer work (i.e., pay taxes) but consume the lion’s share of state benefits.  When couples were having 6 children each across the generations there was a ratio of 84 taxpayers per retiree.  When there was a declining replacement birthrate that ratio fell to 15 taxpayers per retiree.  If we look at this graphically we can see the pyramid shape of this generational population.

Generational Population - Constant Replacement Birthrate

With 84 taxpayers per retiree we can see a nice and wide base to the pyramid.  While the tip of the pyramid is only a small sliver of the base (Generation 4).  Making for a successful Ponzi scheme.  Far more people pay into the scheme.  While only a tiny few take money out of the scheme.  This is why Social Security and Medicare didn’t have any solvency problems until after birth control and abortion.  For these gave us a declining replacement birthrate over time.  Greatly shrinking the base of the pyramid.  Which made the tip no longer a small sliver of the base.  But much closer in size to the base.  That if it was an actual pyramid sitting on the ground it wouldn’t take much to push it over.  Unlike the above pyramid.  That we could never push over.  Which is why the above Ponzi scheme would probably never fail.  While the one below will definitely fail.

Generational Population - Declining Replacement Birthrate

If you want a generous welfare state where the state provides pensions, health care, housing and food allowances, etc., you need parents to have more children.  For the more children they have the more future taxpayers there will be.  Or you at least need a constant replacement birthrate.  But if that rate is below the rate of a prior baby boom the welfare state will be unsustainable UNLESS they slash spending.  The United States has a replacement birthrate below the rate of a prior baby boom.  While the Obama administration has exploded the size of welfare state.  Especially with the addition of Obamacare.  Making our Ponzi scheme more like the second chart.  As we currently have approximately 1.75 taxpayers supporting each social security recipient.  Meaning that it won’t take much pushing to topple our pyramid. We’re at the point where a slight breeze may do the trick.  For it will topple.  It’s just a matter of time.

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The Democrat War on our 401(k) Plans

Posted by PITHOCRATES - March 22nd, 2014

Week in Review

Retirees can’t get by on Social Security alone.  And we can’t raise Social Security payments because the program will be insolvent in a few years.  Because of our aging population.  More people are leaving the workforce than are entering it.  So fewer people are paying taxes to support those in retirement.  And those in retirement are living a lot longer into retirement than the Social Security actuaries thought they would.  Which is why Social Security is going bust.  And people need other sources of retirement income.  And a big source of that retirement income has been our 401(k) plans.  Which President Obama wants to take away (see Obama’s budget bad for 401(k) savers by Scott Hanson posted 3/19/2014 on CNBC).

President Obama’s proposed budget for 2015 would be a disaster for the millions of Americans who are underprepared for retirement. This plan would reduce the tax incentives for employers to offer retirement plans to their employees…

Under Obama’s budget plan, higher-income earners would be limited to a tax deduction at the 28 percent level, even if their current income-tax bracket is much higher…

This means they would not only pay taxes on some of their contributions today, they are fully taxed when they withdraw the money in the future. This, of course, is double taxation.

The Social Security Trust Fund doesn’t have any money in it.  All the money we’re paying into Social Security is going right out to pay for someone else’s retirement.  And what’s left over the government spends to buy votes.  Replacing our money in the Social Security Trust Fund with IOUs.  Promises to repay the money when we need it.  How?  By either borrowing more money.  Printing money.  Or taking a portion of our other retirement money we’re setting aside.  Our 401(k) plans.

It’s no secret that the Democrats hate these 401(k) plans.  For that’s a lot of money people are NOT spending.  And money they can’t tax.  The government is full of Keynesians.  They believe the only healthy economy is an economy where people spend everything they earn.  Keynesians see savings as leaks from the economy.  And they don’t like that.  For them consumption is everything.  And saving is for chumps.  They want our 401(k) plans.  Some have even been thinking about just taking that money and replacing it with some government program.  Like Social Security.  So they can get that money now.  And spend it.  For there are so many votes to buy and so little money to buy them with.  So the Democrats will wage their war on our 401(k) plans.  And then move on to something else.  For they have an insatiable appetite to spend.

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Obama’s myRAs are just another way to Transfer Money from the Private Sector to the Government

Posted by PITHOCRATES - February 2nd, 2014

Week in Review

Social Security has failed to provide for our retirement.  So President Obama wants another government retirement program.  So it, too, can fail the American people (see What Americans think about Obama’s myRA retirement accounts by Melanie Hicken posted 1/31/2014 on CNNMoney).

Obama’s new ‘myRA’ retirement accounts aim to help millions of workers begin saving for retirement. The accounts will be backed by the government, charge no fees and you’ll be able to contribute directly from each paycheck…

“Why would anyone consider giving a broke and bankrupt government any more of your money? That’s foolish,” said 62-year-old reader Steve Keller…

[Kathryn Riss] and her husband keep the modest savings they do have in money market accounts, which earn less than 1%. The myRA, on the other hand, will invest in government savings bonds and provide returns of around 2% to 3%, depending on interest rates.

Why can’t people earn more than 1% on their retirement savings in a bank?  Because of the Federal Reserve.  And Keynesian economics.  That focuses on consumer spending with tunnel vision.  It’s the only thing that counts as far as they are concerned.  And keeping interest rates near zero is supposed to encourage people to borrow and spend money.  For they will only lose purchasing power if they don’t.  What with banks only offering something less than 1% interest.  Thanks to the Federal Reserve printing money.  Making it so plentiful that people can borrow it practically for free.  And if they are paying the banks practically nothing to borrow it that’s all the banks can afford to pay their depositors.  Practically nothing.

The government will invest those myRAs into government savings bonds?  Yeah, right.  The government is going to take that money and spend it.  Because they have a voracious appetite to spend.  Which is why the Social Security Trust Fund has nothing but IOUs in it.  Government bonds that the government can’t afford to redeem without printing more money.  The Keynesian source of all our woes to begin with.  Which will only get worse the more ways the government thinks of to transfer money from the private sector to the government.  Taxes.  Service charges, surcharges, fees, etc.  Regulatory fines and penalties.  Treasury bonds and bills.  Medicaid.  Medicare.  Obamacare.  And now myRAs.

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President Obama’s 2014 State of the Union Address

Posted by PITHOCRATES - January 30th, 2014

Politics 101

Democrats offered Enthusiastic Applause for Unsound Policy Proposals that have no Basis in Reality

President Obama’s 2014 State of the Union address was a little longer than an hour.  But if you didn’t look at a clock it felt a lot longer.  For it was the same tripe you hear all the time from this administration.  And the political left.  It was full of misleading statements.  Inaccurate facts and figures.  And some lies.  The usual stuff you expect from the liberal left.  But what was really disturbing was the enthusiastic applause for some really unsound policy proposals that have no basis in reality.  Showing either how clueless these enthusiastic Democrats are about economics, business, national security, etc.  Or how amoral they are in their quest for power.  As they judge and implement policy not by how it will improve the lives of Americans.  But how it will improve their lives in government.

Some Big Reasons why Businesses export Jobs are Taxes, Regulations and Labor Costs

If there was ever an example of what people not to have in power this state of the union theater was it.  Following are excerpts from President Obama’s speech (see FULL TRANSCRIPT: Obama’s 2014 State of the Union address posted 1/28/2014 on The Washington Post).  Comments and analysis follow each excerpt.

And here are the results of your efforts: the lowest unemployment rate in over five years; a rebounding housing market — (applause) — a manufacturing sector that’s adding jobs for the first time since the 1990s — (applause) — more oil produced — more oil produced at home than we buy from the rest of the world, the first time that’s happened in nearly twenty years — (applause) — our deficits cut by more than half; and for the first time — (applause) — for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.

The total number of people who left the civilian labor force since President Obama took office is 11,301,000 (see The BLS Employment Situation Summary for December 2013 posted 1/13/2014 on PITHOCRATES).  Which means the unemployment rate is meaningless.  The only reason why it’s falling is that the BLS doesn’t count unemployed people who gave up looking for jobs that just aren’t there.  Oil production on private land may be up.  While overall oil consumption is down because of the Great Recession that just won’t end.  Which is helping to keep gas prices down.  Unemployed people just don’t have the money to buy gas.  So they don’t.  Greatly reducing the demand for gas.  Thus reducing gas prices and oil imports.  George W. Bush’s last deficit was $498.37 billion.  President Obama’s first deficit was $1,539.22 billion.  And it was over $1 trillion in 2010, 2011 and 2012.  It fell to $680 billion in 2013 thanks to the sequester.  But the deficit is larger now than when President Obama assumed office.  The only reduction in the deficit is a reduction in the amount he increased it.

Now, as president, I’m committed to making Washington work better, and rebuilding the trust of the people who sent us here.

Really?  You’re committed to rebuilding the trust of the people?  Mr. “If you like your health insurance you can keep your health insurance.  Period.”  Otherwise known as the lie of the year.  You’re going to rebuild the trust of the people?  Good luck with that.  What with your pants on fire and all.

Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by; let alone to get ahead. And too many still aren’t working at all.

Well, finally something Republicans can agree with the president about.  Yes, his economic policies have benefitted Wall Street.  While hurting Main Street.  Finally some bipartisan agreement.

So let’s make that decision easier for more companies. Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here, and reward companies that keep profits abroad. Let’s flip that equation. Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home. (Cheers, applause.)

There are only a few reasons why businesses export jobs.  And the big three are taxes, regulations and labor costs.  The Obama administration wants to raise taxes.  They’ve increased regulatory costs.  And they support costly union labor.  So everything they stand for encourages businesses to export jobs.

But — but I’ll act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible. (Applause.)

So how’s that approval for the Keystone XL pipeline coming along?  That thing you’ve been studying since 2010?  Which by the laws of arithmetic is approximately 4 years ago.  Is this slashing bureaucracy and streamlining the permitting process?  At this rate it would probably be quicker to elect a Republican president in 2016.  You know, someone who, when it comes to economic activity, walks it while the Democrats only talk it.

We also have the chance, right now, to beat other countries in the race for the next wave of high-tech manufacturing jobs. And my administration’s launched two hubs for high-tech manufacturing in Raleigh, North Carolina, and Youngstown, Ohio, where we’ve connected businesses to research universities that can help America lead the world in advanced technologies.

Universities are in the grant business.  They want as many grants as they can get to help bring money into the university.  And to do so they will study anything the government wants them to.  No matter how wasteful it is.  While some of the biggest high-tech companies started in garages.  Apple, Google, Hewlett Packard and Microsoft.  To name a few.  Yes, there is a lot of university-driven research.  But the big innovation is more entrepreneurial.  Created by people thinking up new stuff no one thought of yet.  Which is the last thing you want government involved in.  That same government that can’t build a website using 1990s technology.

Let’s do more to help the entrepreneurs and small business owners who create most new jobs in America. Over the past five years, my administration has made more loans to small business owners than any other. And when 98 percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create even more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment and open new markets to new goods stamped “Made in the USA.” (Applause.)

You want to help entrepreneurs and small business?  Get rid of Obamacare.  And slash tax rates.  This will provide incentive.  And allow them to reinvest more of their earnings to grow their business.  Allowing them to create those jobs.

Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The “all the above” energy strategy I announced a few years ago is working, and today America is closer to energy independence than we have been in decades. (Applause.)

‘All of the above’ as long as it isn’t coal, oil or nuclear.  But if it’s solar power and wind power they are committed to giving more tax dollars to their friends and bundlers in the green energy industry.

Meanwhile, my administration will keep working with the industry to sustain production and jobs growth while strengthening protection of our air, our water, our communities. And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations. (Applause.)

You can’t sustain production and jobs growth by strengthening protection of our air, water and pristine federal lands.  That’s just more regulatory costs.  And raising energy costs by not allowing any oil or natural gas production on those pristine federal lands.  Raising energy costs by restricting supply.  Which raises business costs.  In addition to those new regulatory costs.

Every four minutes another American home or business goes solar, every panel pounded into place by a worker whose job can’t be outsourced. Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it so we can invest more in fuels of the future that do. (Cheers, applause.)

That says it all.  Fossil fuels don’t need subsidies because their costs are affordable.  While solar (and wind power) are so costly that they are unaffordable.  Unless government heavily subsidizes them.

But the debate is settled. Climate change is a fact. (Applause.) And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did. (Cheers, applause.)

There is no such thing as settled science.  Only science that has yet to be disproved.  Besides, once upon a time glaciers stretched down from the poles to near the equator.  And then receded back to where they are now.  All without any manmade carbon in the atmosphere to warm the planet.  As we were still simple hunter and gatherers then.  So if the glaciers moved more before there was manmade global warming they’ll move again regardless of what man is doing to warm the planet.

Finally, if we’re serious about economic growth, it is time to heed the call of business leaders, labor leaders, faith leaders, law enforcement — and fix our broken immigration system. (Cheers, applause.) Republicans and Democrats in the Senate have acted, and I know that members of both parties in the House want to do the same. Independent economists say immigration reform will grow our economy and shrink our deficits by almost $1 trillion in the next two decades. And for good reason: When people come here to fulfill their dreams — to study, invent, contribute to our culture — they make our country a more attractive place for businesses to locate and create jobs for everybody. So let’s get immigration reform done this year. (Cheers, applause.) Let’s get it done. It’s time.

Funny how that argument doesn’t apply to birth control and abortion.  The reason we need to “fix our broken immigration system.”  For if we were having babies at the rate when government created the welfare state we could pay for that welfare state today.  But thanks to the Sixties, birth control, abortion and feminism women stopped having babies.  Which is fine if a woman doesn’t want to.  But the progressives designed the welfare state based on them being baby machines.  Creating a greater number of taxpayers with each generation.  So more people pay into the welfare state than collect from it.  The way it must be for a Ponzi scheme to work.

That’s why I’ve been asking CEOs to give more long-term unemployed workers a fair shot at new jobs, a new chance to support their families. And in fact, this week many will come to the White House to make that commitment real.

When you raise the cost of labor (union labor, Obamacare, etc.) businesses tend to look at automating production instead of hiring that costly labor.  They may not be able to do anything about the higher regulatory costs but they can do something about higher labor costs.  Use more machines than people.  If you want CEOs to create new jobs stop making labor so costly.  And you can start with getting rid of Obamacare.

Of course, it’s not enough to train today’s workforce. We also have to prepare tomorrow’s workforce, by guaranteeing every child access to a world-class education. (Applause.)…

Five years ago we set out to change the odds for all our kids. We worked with lenders to reform student loans, and today more young people are earning college degrees than ever before. Race to the Top, with the help of governors from both parties, has helped states raise expectations and performance. Teachers and principals in schools from Tennessee to Washington, D.C., are making big strides in preparing students with the skills for the new economy — problem solving, critical thinking, science, technology, engineering, math.

Yes, more kids are going to college than ever before.  But they’re going there to have fun.  And to facilitate their fun many are getting easy, worthless degrees in the social sciences and humanities.  Costly degrees that universities sold them promising them future riches.  Enriching the university.  While impoverishing their graduates.  For a high-tech company has no use for these degrees.  Which is why a lot of these people end up in jobs they didn’t need that costly degree to do.  And our high-tech companies are using the visa program to get foreigners who have the skills they want.  Problem solving, critical thinking, science, technology, engineering and math.

It requires everything from more challenging curriculums and more demanding parents to better support for teachers and new ways to measure how well our kids think, not how well they can fill in a bubble on a test. But it is worth it — and it is working.

If you want kids to do better we need to champion marriage and family more.  And they should embrace religion a little more.  Instead of encouraging our young women to use birth control and abortion to avoid marriage and family.  And pulling every last vestige of religion from our lives.  Kids growing up in a household with a mother and a father who go to church do far better on average than kids growing up in a single-parent household and don’t go to church (see Strong families steeped in Conservative Values and Traditions do Well in America posted 1/11/2014 on PITHOCRATES).

Research shows that one of the best investments we can make in a child’s life is high-quality early education. (Applause.) Last year, I asked this Congress to help states make high-quality pre-K available to every 4-year-old. And as a parent as well as a president, I repeat that request tonight.

Actually, research doesn’t show that.  Yet they keep saying that.  For it’s like that line in the musical Evita, “Get them while they’re young, Evita.  Get them while they’re young.”  The sooner they can take them away from their parents the sooner they can start turning them into Democrat voters.  Such as teaching them to blame their parents for the manmade global warming that is killing the polar bears as they have no ice to rest on while eating their baby seals.

You know, today, women make up about half our workforce, but they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.

Women deserve equal pay for equal work. (Cheers, applause.)

Actually, it’s closer to 91 cents (see The White House’s use of data on the gender wage gap by Glenn Kessler posted 6/5/2012 on The Washington Post).  And the small difference is not due to discrimination but personal choice.  When you look at aggregate wages women will make less than men.  Because more women are teachers (with 3 month off without pay) than men are.  Some women work fewer hours at work to spend more time with their children. While men tend to work more overtime.  Men also work the more dangerous and higher paying jobs.  And are more likely to belong to a union.  When you compare childless, single men and women with a college degree some women are actually earning more than men.  Figures don’t lie but liars figure.  And for the contortions the Obama administration did here The Washington Post’s The Fact Checker gave the president one Pinocchio.

Now, women hold a majority of lower-wage jobs, but they’re not the only ones stifled by stagnant wages. Americans understand that some people will earn more money than others, and we don’t resent those who, by virtue of their efforts, achieve incredible success. That’s what America’s all about. But Americans overwhelmingly agree that no one who works full-time should ever have to raise a family in poverty. (Applause.)

In the year since I asked this Congress to raise the minimum wage, five states have passed laws to raise theirs.

You’re not going to have a lot of upward mobility when you pay people more to remain in the jobs they hate.  All the talk about making college more affordable and bringing employers and community colleges together to help give people the skills they need to fill the jobs employers have is all for nothing if they just pay people more for doing an entry-level job.

Let’s do more to help Americans save for retirement. Today most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s. That’s why tomorrow I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a — it’s a new savings bond that encourages folks to build a nest egg.

Once upon a time people opened a savings account at their local bank and they saved to buy a house.  And they saved for their retirement.  That’s how people saved when they didn’t have a pension or a 401(k).  They can’t do that today because of the Federal Reserve destroying the banking industry by keeping interest rates at zero.  If the Fed stopped printing money and let investment capital come from our savings like they did before the Keynesians gave us the Federal Reserve people would be saving like we once did.  And we’d stop having Great Depressions, stagflation and Great Recessions.  Created by their prolonging the growth side of the business cycle.  Which raises prices higher than they normally would go.  Making the contraction side of the business cycle that much more painful.  As those prices have a much longer way to fall than they normally would.  Thanks to the Fed’s meddling with interest rates.

MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little or nothing for middle-class Americans, offer every American access to an automatic IRA on the job, so they can save at work just like everybody in this chamber can.

You know why they want these MyRAs?  Because they can’t stand people saving money.  They love Social Security.  Because they can borrow from the Social Security Trust Fund.  Which is what they will do with these MyRAs.  They will take this money and spend it.  Filling the MyRA Trust Fund with a bunch of IOUs.  Just like they do with the Social Security Trust Fund.  And then provide a retirement benefit like Social Security.  That is too small to live on.  Whereas if we saved the money ourselves our retirement nest-egg will be much larger.  And it will provide for our retirement.  Unlike Social Security.

And since the most important investment many families make is their home, send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive for future generations. (Applause.)

It was Bill Clinton that set the stage for the subprime mortgage crisis with his Policy Statement on Discrimination in Lending (see Bill Clinton created the subprime mortgage crisis with his Policy Statement on Discrimination in Lending posted 11/6/2011 on PITHOCRATES).  Using the heavy hand of government to get lenders to qualify the unqualified.  Then the Fed’s artificially low interest rates were the bait for the trap.  Enticing people to borrow huge sums of money because those interest rates were just too good to pass up.  Even if they weren’t planning to buy a house to begin with. The subprime mortgage crisis and the resulting Great Recession were government made.  If we want to prevent the taxpayers from footing the bill for another housing crisis we need to get the Keynesians out of government.

Already, because of the Affordable Care Act, more than 3 million Americans under age 26 have gained coverage under their parents’ plans. (Applause.)

More than 9 million Americans have signed up for private health insurance or Medicaid coverage — 9 million. (Applause.)

The Washington Post gave this lie three Pinocchios (see Warning: Ignore claims that 3.9 million people signed up for Medicaid because of Obamacare by Glenn Kessler posted 1/16/2014 on The Washington Post).  For they’re counting some 3.9 million who would have signed up anyway for Medicaid regardless of the Affordable Care Act.  Also, the government was counting people who put a health care plan into their shopping cart as if they signed up for it.  Which many couldn’t.  As they haven’t programmed the back end of the health care website yet to actually accept payment or to pass that information on to the insurers.

And here’s another number: zero. Because of this law, no American, none, zero, can ever again be dropped or denied coverage for a pre-existing condition like asthma or back pain or cancer. (Cheers, applause.) No woman can ever be charged more just because she’s a woman. (Cheers, applause.) And we did all this while adding years to Medicare’s finances, keeping Medicare premiums flat and lowering prescription costs for millions of seniors.

That’s right.  Women with reproductive systems that men don’t have won’t pay more for their health insurance than men pay for theirs.  How can they do that?  Simple.  They just are charging men more.  To cover the cost of a reproductive system they don’t have.

Citizenship means standing up for the lives that gun violence steals from us each day. I have seen the courage of parents, students, pastors, and police officers all over this country who say “we are not afraid,” and I intend to keep trying, with or without Congress, to help stop more tragedies from visiting innocent Americans in our movie theaters and our shopping malls, or schools like Sandy Hook. (Applause.)

If you take away guns from law-abiding gun owners that won’t keep dangerous people with mental health issues that want to harm people out of our movie theaters, our shopping malls or schools like Sandy Hook.  For there are other ways to harm people.  Just look at the Boston Marathon bombers.  The people he’s talking about not only had mental health issues but they were also smart.  Many were even college students.  Who probably could think of other ways to hurt people.  And you just can’t take away everything they might use to harm people.  But you can place these people somewhere where they can’t harm anyone.

You see, in a world of complex threats, our security, our leadership depends on all elements of our power — including strong and principled diplomacy. American diplomacy has rallied more than 50 countries to prevent nuclear materials from falling into the wrong hands, and allowed us to reduce our own reliance on Cold War stockpiles.

Since President Obama assumed office he did nothing to support the Green Revolution in Iran.  Which kept the hard-line Islamists in power there.  He gave Egypt to the Muslim Brotherhood by telling Hosni Mubarak that he had to go.  Removing the stable anchor of the Middle East.  And moved Egypt closer to Iran.  (The Egyptian people eventually rose up to overthrow the oppressive Muslim Brotherhood).  He went to war in Libya and helped to overthrow Colonel Muammar Qaddafi.  Who at the time was a quasi ally in the War on Terror.  After the Iraq invasion frightened him into believing he may be next.  President Obama was thanked for his Libyan war by al Qaeda with 4 dead Americans in Benghazi on the anniversary of 9/11.  He waited too long to act in the Syrian civil war.  Which only brought al Qaeda into the conflict.  He failed to attain a status of forces agreement in Iraq.  So he pulled all U.S. forces out of Iraq which has only invited al Qaeda in.  And it looks like this will be repeated in Afghanistan.  He blamed George W. Bush’s wars as recruitment tools for al Qaeda.  While his extensive drone use is doing the same thing.  Especially in Yemen.  The hotbed of al-Qaeda in the Arabian Peninsula.  All that his diplomacy and leadership has done was to make the world a more dangerous place.

American diplomacy, backed by the threat of force, is why Syria’s chemical weapons are being eliminated. (Applause.) And we will continue to work with the international community to usher in the future the Syrian people deserve — a future free of dictatorship, terror and fear.

His diplomacy with Bashar al-Assad in Syria only gave his oppressive regime legitimacy in the civil war he was raging against his people.  Making it easier for Assad to kill Syrians with conventional arms while he gives up a token amount of his chemical weapons.  While also making Russia who brokered the deal the dominate player in the region.

And it is American diplomacy, backed by pressure, that has halted the progress of Iran’s nuclear program — and rolled back parts of that program — for the very first time in a decade. As we gather here tonight, Iran has begun to eliminate its stockpile of higher levels of enriched uranium.

It’s not installing advanced centrifuges. Unprecedented inspections help the world verify every day that Iran is not building a bomb. And with our allies and partners, we’re engaged in negotiations to see if we can peacefully achieve a goal we all share: preventing Iran from obtaining a nuclear weapon. (Applause.)

All Iran is doing is pausing their program.  And chemically altering some of their enriched uranium to meet the requirements of this diplomatic deal.  But this chemical process is reversible.  And they will reverse it once they get what they want.  This deal makes the world no safer.  If anything it makes it more dangerous.  For it does not diminish the Iranian nuclear program in the least.  But gives them more time to work on it as they prop up their regime with much needed supplies thanks to a relaxation of the sanctions against them.

These negotiations will be difficult; they may not succeed. We are clear-eyed about Iran’s support for terrorist organizations like Hezbollah, which threaten our allies; and we’re clear about the mistrust between our nations, mistrust that cannot be wished away. But these negotiations don’t rely on trust; any long-term deal we agree to must be based on verifiable action that convinces us and the international community that Iran is not building a nuclear bomb. If John F. Kennedy and Ronald Reagan could negotiate with the Soviet Union, then surely a strong and confident America can negotiate with less powerful adversaries today. (Applause.)

The sanctions that we put in place helped make this opportunity possible. But let me be clear: if this Congress sends me a new sanctions bill now that threatens to derail these talks, I will veto it. (Applause.) For the sake of our national security, we must give diplomacy a chance to succeed.

The Soviet Union never attacked U.S. soil.  And there was a reason they didn’t.  They were rational.  And knew they would lose a great deal in a war with America.  Especially a nuclear one.  Which is why they never used their nuclear weapons.  But Iran giving a nuclear weapon to a shadowy group that is not a state?  With little to lose in using a nuclear weapon?  If it’s not a nuclear missile there will be no way in knowing where the nuclear bomb came from.  We can have our suspicions that Iran made it and gave it to someone.  But do we nuke Iran over that?  What if there are more nukes in the hands of al Qaeda, Hezbollah, al-Qaeda in the Arabian Peninsula, etc.?  You could nuke Iran back to the Stone Age but it won’t stop those others being used.  The president insists this will not happen as Iran signed an agreement.  The only problem with that is the Iranians are liars.  And they call the United States the Great Satan.   These two facts suggest that replacing those sanctions with a promise not to build nuclear bombs was probably not a wise trade.

But for more than two hundred years, we have put those things aside and placed our collective shoulder to the wheel of progress: to create and build and expand the possibilities of individual achievement; to free other nations from tyranny and fear; to promote justice and fairness and equality under the law, so that the words set to paper by our founders are made real for every citizen.

Use our collective shoulder to expand individual achievement?  The president believes in the former more than the latter.  He didn’t help the Iranians get free from tyranny when he had the chance.  And he turned the Egyptian people over to tyranny.  The Muslim Brotherhood.  Who were oppressing women and Christians.  Fairness and equality under the law?  Ask those Tea Party groups who were targeted by the IRS about fairness and equality under the law.  The Constitution?  That document of negative rights?  The left hates it.  And insists it’s a living document that can evolve over time to suit the needs of an expanding government.  So they can do exactly what the Founding Fathers wrote the Constitution to prevent from happening.

The Left endorses Unsound Policy Proposals with no Basis in Reality to improve their Chances of Winning Elections

The country is more conservative than liberal (see Liberal Self-Identification Edges Up to New High in 2013 by Jeffrey M. Jones posted 1/10/2014 on Gallup).  Which is why liberals want state-funded pre-K to start indoctrinating our children as soon as possible.  To get them away from their parents so they can begin the process of turning them into Democrat voters.  It’s why kids are getting worthless social science and humanities degrees.  To further indoctrinate them.  Because their views are minority views.  So they need to play loose with the facts.  And lie.  Which is easier to do with indoctrinated kids than educated adults.  You’ll even hear Democrats talk about lowering the voting age.  To get a few more years of voting out of these kids before they grow old and wise.  And begin voting conservative.  So they do what they can to dumb down education.  Lie.  Cheat.  And buy as many votes as they can by giving away free stuff.  And the thing they really want to give away is citizenship for illegal aliens.  Who they are sure will be forever grateful.  And show it by voting Democrat.

This explains the enthusiastic applause for unsound policy proposals that have no basis in reality.  For the left is not interested in improving the lives of Americans.  They just want to improve their chances of winning elections.

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FT197: “Global warming insurance would probably sell as well as Obamacare.” —Old Pithy

Posted by PITHOCRATES - November 22nd, 2013

Fundamental Truth

The Scam of the Ponzi Scheme is that there is no Investment

A Ponzi scheme is a pyramid scheme.  An investment scam.  Here’s how it works.  Say three scammers build an investment fund that they promise will return an 18% return on investment.  A pretty good return these days.  If they have 100 investors who invest $25,000 each that brings in $2.5 million into the investment fund.  Now here’s where the scam comes in.

They pay each investor an 18% return each year.  So their $25,000 returns $4,500.  A return they can’t get anywhere else.  An investment just too good to be true.  Some take that $4,500 check and spend it on something special for themselves.  Others leave it in the fund.  While others beg to get into the fund.  Of course they wouldn’t do these things if they understood what happened to the $2.125 million that the fund didn’t pay out to investors.  That went into the pockets of the three scammers.

That’s the scam of the Ponzi scheme.  There is no investment.  The scammers collect the money people invest.  Put aside some money to pay out as a generous return on investment.  While keeping the rest.  These scammers sit on top of the pyramid.  And the more people that join the investment fund the wider the base of the pyramid gets.  Pouring more money into the scam.  Providing more money to pay out even higher returns on investments.  Getter ever more people begging to get into the fund.  While burying the scammers under an avalanche of cash.

Our Aging Population is sending the Health Insurance Industry into a Death Spiral

All Ponzi schemes share these characteristics.  And one other one.  They all fail.  And the scammers go to jail.  Why?  Simple.  The scam works as long as the base of the pyramid continues to grow greater than the top of the pyramid.  As the base grows larger the scammers spend more money, though.  Because there is more money to spend.  And spend they do.  Putting down deposits and paying on large mortgages and loans.  Buying very costly things that have a voracious appetite for cash.  So over time more money flows out at the top of the pyramid.  Which isn’t a problem until money stops flowing into the bottom of the pyramid.  Or begins to flow out.  Because people want to use their money for something else.  Like for a down payment on a house.  And once the money flowing out of the bottom of the pyramid exceeds the ‘return’ on investment the fund pays those high returns on investments shrink and disappear.  Exposing the scam.

This is what has happened to Social Security and Medicare.  Thanks to an aging population.  Women are having fewer babies than they did during the baby boom generation.  So today we have fewer taxpayers entering the workforce who pay the taxes that pay for Social Security and Medicare.  While the baby boomers are retiring and leaving the workforce.  And living longer into retirement.  Consuming far more money than they ever paid into these entitlement programs.  So there is far more money flowing out of the top of the pyramid than is flowing into the bottom.  Inverting the pyramid.  And putting these programs onto the path to bankruptcy.

Health insurance is little different.  It just covers so much these days that insurance premiums have soared to pay for this ever expanding coverage.  And the aging population just makes a horrible situation worse.  The elderly are living longer and consuming the lion’s share of health care services.  Further raising the cost of health insurance.  Making it unaffordable to many.  So people simply choose not to buy it in their youth when they are young and healthy.  And wait to buy it later in life when they need it.  Such as when they start raising a family.  At which time they’ll try to find employment somewhere that has good health insurance.  When they start consuming health care services.  Creating adverse selection.  Where only those who consume health care services buy health insurance.  While those who don’t consume health care services (i.e., the young and healthy) don’t.  Creating a death spiral.  As there are no non-consumers of health care services subsidizing the high cost of the large consumers of health care services.  So premiums rise.  To allow fewer people pay for more.  More people drop their insurance because they can no longer afford it.  Shrinking the insurance pool.  So premiums rise.  To allow fewer people pay for more.  More people drop their insurance because they can no longer afford it.  And so on until the cost of health insurance equals the cost of the health care services.  And the insurance market goes the way of every Ponzi scheme before it.

When Reality hits People in the Pocketbook they tend to Lose their Idealism

Enter the Affordable Care Act and the mandates.  Forcing the young and healthy to buy insurance they won’t use.  So they can use their premiums to pay for the old and sick.  The greatest generational theft in history.  Something the young and healthy see.  And don’t like.  For they are not running out and buying health insurance on the health exchanges.  In fact the majority of the people to enroll thus far are the high consumers of health care services.  Which is basically the opposite of the goal of Obamacare.  The young and healthy may have supported President Obama and the Affordable Care Act but that was only in generalities.  Yes, we should help those who don’t have insurance.  And, yes, we should do something to save the environment.  We should stop discriminating against the LGBT community and let them get married.  In the abstract these are all noble goals.  But when the reality hits their pocketbook then it’s no longer an abstract thing to feel good about.  Especially when they can’t get a job with their college education because they had the misfortune to enter the workforce during the worst economic recovery since that following the Great Depression.  The Obama recovery.

This is when youthful idealism turns into skepticism.  As reality settles in hard.  This isn’t raising taxes on the rich.  Something they won’t have to deal with until much later in their career.  This is in the here and now.  When they stop hearing inspiring words from the president about what we can do if only we implement his policies.  But only hear B.S. and lies.  For if they had that youthful idealism they would be rushing to the health exchanges to buy health insurance to make the world a better place.  But they’re not.  And this has the left worried.  Not just about trying to fix the broken Obamacare website.  But will this skepticism spread to other items on their liberal agenda?  Such as the fight against manmade global warming?  They still want their carbon tax.  And they’ve worked hard to get kids graduating from high school convinced that we’re destroying the planet and need to make polluters pay.  If the young lose their faith on Obamacare they may just stop fearing global warming to the point that they may start driving big SUVs again.

In the abstract the youth will support many things.  Until it starts hitting them in the pocketbook.  And if we make the fight against global warming hit them in the pocketbook they would quickly become indifferent about manmade global warming.  Even becoming manmade global warming skeptics.  Perhaps even noting that the glaciers once stretched down from the poles to near the equator.  And moved back towards the poles.  Before there was any manmade global warming.  Something that probably bothers them today but they’re not yet ready to question the left about manmade global warming.  But if we made them buy insurance to protect themselves from the ravishes of global warming they probably would.  The prognosticators can run off a list of calamities that will befall us from unchecked global warming.  So actuaries should be able to put a cost on that.  And set insurance premiums to cover the cost when the calamities of manmade global warming hit us.  Putting these premiums into a Save the Planet from Manmade Global Warming Trust Fund.  Just like the Social Security Trust Fund that has nothing in it but government IOUs.  Let the youth start paying a monthly premium to save us from manmade global warming and see how soon they become global warming deniers.  If we did this global warming insurance would probably sell as well as Obamacare.  Because when reality hits people in the pocketbook they tend to lose their idealism.  And this is the biggest fear the left has.  Because they count on that youthful idealism to win elections.  For once people lose their idealism they tend to vote Republican.

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The Petulant President scolds Republicans, Conservatives and Anyone Else who dares to Oppose Obamaism

Posted by PITHOCRATES - October 17th, 2013

Politics 101

The government shutdown is over. And we avoided defaulting on the national debt  Or so they say.  So who won and who lost?  Well, at this point in time it looks like the Democrats lost less than the Republicans.  But it is the American people who lost.  For they are stuck with Obamacare for the time being.  And President Obama can raise the national debt to a new record high.  But it gets worse.  This morning the president gave a petulant, God-awful speech scolding the Republicans, the Tea Party, talk radio, the blogosphere and pretty much anyone else who dares to oppose Obamaism (see Transcript of Obama Remarks on End of Standoff posted 10/17/2013 on The Wall Street Journal).

Good morning, everybody.  Please have a seat.

Well, last night, I signed legislation to reopen our government and pay America’s bills.  Because Democrats and responsible Republicans came together, the first government shutdown in 17 years is now over.  The first default in more than 200 years will not happen.  These twin threats to our economy have now been lifted.  And I want to thank those Democrats and Republicans for getting together and ultimately getting this job done.

There was never a risk of default.  With $2.45 trillion in annual revenue coming into the treasury from the taxpayers there was never a risk of the $415.7 billion annual interest payment on the debt going unpaid.  Lying about it just helped a petulant child get his way.  Waaa.

Now, there’s been a lot of discussion lately of the politics of this shutdown.  But let’s be clear:  There are no winners here.  These last few weeks have inflicted completely unnecessary damage on our economy.  We don’t know yet the full scope of the damage, but every analyst out there believes it slowed our growth.

What growth?  Since coming to office the president’s policies have lost approximately 9,966,000 jobs through the September jobs report.  That’s just shy of 10 million jobs he’s lost.  So what recovery?  Or is he just setting the stage to blame the worst economic recovery since that following the Great Depression on this 16 day shutdown?  And not the lost economic activity from those 10 million or so lost jobs?  Of course he is.  Because what are 10 million jobs when he can stick it to the Republicans?

We know that families have gone without paychecks or services they depend on.  We know that potential homebuyers have gotten fewer mortgages, and small business loans have been put on hold.  We know that consumers have cut back on spending, and that half of all CEOs say that the shutdown and the threat of shutdown set back their plans to hire over the next six months.  We know that just the threat of default — of America not paying all the bills that we owe on time — increased our borrowing costs, which adds to our deficit.

Yes, pity the government bureaucrats who had to go 16 days without reporting to work.  Even though they will be paid for those 16 days they missed.  Yes, pity the government bureaucrats.  And not the 10 million who have disappeared from the labor force since President Obama assumed office.  I mean, what are 5 years without a paycheck compared to missing 16 days of work?  Which the taxpayers will still pay them for?

Businesses cut back on spending and hiring because of the great uncertainty of a 16-day shutdown?  Are you sure it wasn’t the regulatory requirements of Obamacare that is forcing employers with close to 30 ‘full time’ employees (30 hours or more per week) to not hire any more workers?  Even pushing full-time workers to part time?  Are you sure this isn’t the reason why they’re not hiring?  Especially with the cost of health insurance going through the roof now that it must cover everything under the sun (such as pediatric care for a couple whose children are now grown adults) as well as pre-existing conditions?  Where someone can walk in off the street who was just diagnosed with cancer and buy an insurance policy for the first time in their life?  Are you absolutely sure it’s the 16-day shutdown and not Obamacare?   If so someone needs to attend a high school economics class to learn the first thing about economics.

And, of course, we know that the American people’s frustration with what goes on in this town has never been higher. That’s not a surprise that the American people are completely fed up with Washington.  At a moment when our economic recovery demands more jobs, more momentum, we’ve got yet another self-inflicted crisis that set our economy back.  And for what?

Again, are you sure it was the 16-day shutdown and not the 4 years or so of Obamacare?

There was no economic rationale for all of this.  Over the past four years, our economy has been growing, our businesses have been creating jobs, and our deficits have been cut in half. We hear some members who pushed for the shutdown say they were doing it to save the American economy — but nothing has done more to undermine our economy these past three years than the kind of tactics that create these manufactured crises.

The last fiscal year ending deficit while George W. Bush was president was $498.37 billion (adjusted for inflation).  At the end of the first fiscal year with President Obama in office the deficit soared to $1.539.22 trillion.  An increase of 208.9%.  It is this deficit number that he cut in half.  The one he exploded with his near trillion dollar stimulus that did not stimulate anything but unions and the president’s cronies on Wall Street and in Big Business.  Especially Big Green Business.

And the president had something else preventing him from spending as much as he did during his first term.  Sequestration.  Which the Democrats hate with a passion and want to get rid of.  So they can turn on the spending spigot once again.  Like they did during his first term.

And you don’t have to take my word for it.  The agency that put America’s credit rating on watch the other day explicitly cited all of this, saying that our economy “remains more dynamic and resilient” than other advanced economies, and that the only thing putting us at risk is — and I’m quoting here — “repeated brinksmanship.”  That’s what the credit rating agency said.  That wasn’t a political statement; that was an analysis of what’s hurting our economy by people whose job it is to analyze these things.

Really?  Brinkmanship?  You don’t think adding $6.2 trillion to the national debt during your presidency had anything to do with the credit rating agency’s concern about our debt paying ability?  A high school economics student can understand that the greater your debt is the greater your debt-paying problem.  Funny how you don’t, Mr. President.

That also happens to be the view of our diplomats who’ve been hearing from their counterparts internationally.  Some of the same folks who pushed for the shutdown and threatened default claim their actions were needed to get America back on the right track, to make sure we’re strong.  But probably nothing has done more damage to America’s credibility in the world, our standing with other countries, than the spectacle that we’ve seen these past several weeks.  It’s encouraged our enemies.  It’s emboldened our competitors.  And it’s depressed our friends who look to us for steady leadership.

I thought it would have been your bad foreign policy that did all those things.  Starting with the Green Revolution in Iran.  An uprising of the people against the Islamist and oppressive government of Iran.  The precursor to the Arab Spring.  Where you did nothing.  Leaving the good Iranian people with that oppressive Islamist government.  Which is currently working to produce a nuclear bomb.  Then there was the Arab Spring and you telling our friend and ally and anchor to peace and stability in the Middle East, Hosni Mubarak, that he had to go.  Turning Egypt over to the anti-Western Muslim Brotherhood.  And then there was Libya.  Another ally in the War on Terror, Muammar Gaddafi (who joined the fight against terrorism after our invasion of Iraq), that he had to go.  Turning Libya over to radical Islamists.  Who killed four Americans in Benghazi.  Then there was the red line fiasco with Syria.  If you cross that red line I will hem and haw and stammer.  Then I might say something else.  Then Vladimir Putin steps in and saves the day for their Syrian ally.  Russia.  Who suspended all adoptions to Americans to spite America.  Who are also helping the Iranians with their nuclear program.  All the while laughing at President Obama who they see as weak.  Who couldn’t get one nation to join him for military strikes against Syria.  If you want to talk about our prestige on the world stage you gave that up long ago.  For today no one fears the wrath of the United States these days.  With some nations seeing the United States becoming irrelevant in the world.  Especially Russia and China.  As well as radical Islam.

Now, the good news is we’ll bounce back from this.  We always do.  America is the bedrock of the global economy for a reason.  We are the indispensable nation that the rest of the world looks to as the safest and most reliable place to invest — something that’s made it easier for generations of Americans to invest in their own futures.  We have earned that responsibility over more than two centuries because of the dynamism of our economy and our entrepreneurs, the productivity of our workers, but also because we keep our word and we meet our obligations.  That’s what full faith and credit means — you can count on us.

And today, I want our people and our businesses and the rest of the world to know that the full faith and credit of the United States remains unquestioned.

There is a difference between economic investment and buying our bonds.  Any money that buys government bonds is money pulled out of the economy.  Investing in government bonds doesn’t create economic activity.  It actually destroys economic activity.  And the only worry the rest of the world had was what you were going to do, Mr. President.  Would you not pay the interest on the national debt out of spite to attack the Republicans?  That’s what they were worried about.  For even they knew we had the money to pay our debt without new borrowing.  They just don’t trust you.

But to all my friends in Congress, understand that how business is done in this town has to change.  Because we’ve all got a lot of work to do on behalf of the American people — and that includes the hard work of regaining their trust.  Our system of self-government doesn’t function without it.  And now that the government is reopened, and this threat to our economy is removed, all of us need to stop focusing on the lobbyists and the bloggers and the talking heads on radio and the professional activists who profit from conflict, and focus on what the majority of Americans sent us here to do, and that’s grow this economy; create good jobs; strengthen the middle class; educate our kids; lay the foundation for broad-based prosperity and get our fiscal house in order for the long haul.  That’s why we’re here.  That should be our focus.

Strong words coming from a professional activist.  For he was a community organizer.  And taught activism.  Funny how there are two types of activism.  The good kind in his world.  When it advances a liberal agenda.  And the bad kind in his world.  The kind based in conservatism.  The president hates conservative activism, otherwise known as a government of the people, by the people and for the people, and believes it should be silenced and replaced with one-party rule.

Now, that won’t be easy.  We all know that we have divided government right now.  There’s a lot of noise out there, and the pressure from the extremes affect how a lot of members of Congress see the day-to-day work that’s supposed to be done here. And let’s face it, the American people don’t see every issue the same way.  But that doesn’t mean we can’t make progress.  And when we disagree, we don’t have to suggest that the other side doesn’t love this country or believe in free enterprise, or all the other rhetoric that seems to get worse every single year.  If we disagree on something, we can move on and focus on the things we agree on, and get some stuff done.

And the Democrats calling the political opposition terrorists, arsonists, hostage takers, the Taliban, etc., how is that coming together to focus on the things we agree on?  To get some stuff done?  Well, Mr. President, it is obvious you believe compromise is the Republicans caving and becoming your bitch.  This is not a government of the people, by the people and for the people.  This is a government of, by and for you.

Let me be specific about three places where I believe we can make progress right now.  First, in the coming days and weeks, we should sit down and pursue a balanced approach to a responsible budget, a budget that grows our economy faster and shrinks our long-term deficits further.

At the beginning of this year, that’s what both Democrats and Republicans committed to doing.  The Senate passed a budget; House passed a budget; they were supposed to come together and negotiate.  And had one side not decided to pursue a strategy of brinksmanship, each side could have gotten together and figured out, how do we shape a budget that provides certainty to businesses and people who rely on government, provides certainty to investors in our economy, and we’d be growing faster right now.

The last time we did this little dance it was the same.  You want to raise taxes and cut no spending.  That’s your idea of a balanced approach.  Oh, you’ll promise spending cuts after we raise some taxes.  But those spending cuts will never come.  Democrats just don’t cut spending.  Unless they get themselves stuck in a sequester.  And that’s not even real spending cuts.  It’s only smaller increases in future spending.

Now, the good news is the legislation I signed yesterday now requires Congress to do exactly that — what it could have been doing all along.

And we shouldn’t approach this process of creating a budget as an ideological exercise — just cutting for the sake of cutting.  The issue is not growth versus fiscal responsibility — we need both.  We need a budget that deals with the issues that most Americans are focused on:  creating more good jobs that pay better wages.

Can the nation afford anymore of your job creation?  After losing some 10 million jobs we should just cut our losses.  And refuse anymore of your ‘help’ with the economy.

Cutting for the sake of cutting?  What, we don’t have a debt crisis that requires our debt ceiling to be raised again and again?  We’re spending too much.  Hence the need to keep raising our debt ceiling.  And Obamacare only makes this worse.  A lot worse.  Hence that 16-day government shutdown.  Or did he miss that?

And remember, the deficit is getting smaller, not bigger.  It’s going down faster than it has in the last 50 years. The challenges we have right now are not short-term deficits; it’s the long-term obligations that we have around things like Medicare and Social Security.  We want to make sure those are there for future generations.

Oh, you are devious, Mr. President.  The deficit is going down faster than in the last 50 years only because you raised it to record highs in your first year in office.  Your smallest deficit is still larger than George W. Bush’s last deficit.

Medicare?  You cut Medicare spending so you can spend that money on Obamacare.  And Social Security?  The Social Security Trust Fund has no cash in it.  It’s stuffed with government IOUs.  Because the government is spending so much money that they have to raid the Social Security Trust Fund to pay for it.  And even that’s not enough to prevent deficit spending.  So they’re robbing Peter to pay Paul.  This out of control spending is why Medicare and Social Security may not be there for future generations.

So the key now is a budget that cuts out the things that we don’t need, closes corporate tax loopholes that don’t help create jobs, and frees up resources for the things that do help us grow — like education and infrastructure and research.  And these things historically have not been partisan.  And this shouldn’t be as difficult as it’s been in past years because we already spend less than we did a few years ago.  Our deficits are half of what they were a few years ago.  The debt problems we have now are long term, and we can address them without shortchanging our kids, or shortchanging our grandkids, or weakening the security that current generations have earned from their hard work.

More on education?  That’s to shore up the teachers’ underfunded pensions.  Infrastructure?  That’s just pork-barrel spending.  Building airports where no one wants to fly.  Or high-speed rail that requires constant government subsidies.  Money that buys votes in Congress to pass huge spending bills.  Like Obamacare.  Which passed only by buying off Democrats with the Cornhusker Kickback, the Louisiana Purchase, the Florida Flim Flam, etc.

So that’s number one.  Number two, we should finish fixing the job of — let me say that again.  Number two, we should finish the job of fixing our broken immigration system.

There’s already a broad coalition across America that’s behind this effort of comprehensive immigration reform — from business leaders to faith leaders to law enforcement.  In fact, the Senate has already passed a bill with strong bipartisan support that would make the biggest commitment to border security in our history; would modernize our legal immigration system; make sure everyone plays by the same rules, makes sure that folks who came here illegally have to pay a fine, pay back taxes, meet their responsibilities.  That bill has already passed the Senate. And economists estimate that if that bill becomes law, our economy would be 5 percent larger two decades from now.  That’s $1.4 trillion in new economic growth.

There’s a reason why people hire illegal aliens.  So they can pay them less than legal citizens.  So once these illegals become legal they’re not going to work for illegal wages anymore.  So it will raise labor costs.  Forcing businesses to lay off some workers.  Creating no net economic benefit.  But the Democrats don’t care.  Because it’s not about the economy.  It’s about all those new Democrat voters.  To turn the nation, like they turned California, Democrat.

The majority of Americans think this is the right thing to do.  And it’s sitting there waiting for the House to pass it.  Now, if the House has ideas on how to improve the Senate bill, let’s hear them.  Let’s start the negotiations.  But let’s not leave this problem to keep festering for another year, or two years, or three years.  This can and should get done by the end of this year.

Really?  A majority of people want immigration reform?  And because of that we should pass it?  Well, the majority of people want to repeal Obamacare.  So perhaps this is a negotiation the Republicans and Democrats can agree on.  To please the majority of people.  Exchange immigration reform for the repealing of Obamacare.

Number three, we should pass a farm bill, one that American farmers and ranchers can depend on; one that protects vulnerable children and adults in times of need; one that gives rural communities opportunities to grow and the long-term certainty that they deserve.

You know, it was a farm bill that helped precipitate the Great Depression.  Price parity.  Increasing the price of farm goods so they were closer to the price of nonfarm goods.  In response to their increased productivity due to the mechanization of the farm that produced bumper crops.  Increasing supply beyond demand.  Causing the price of farm goods to fall.  So Hoover passed legislation raising the price of food.  Making it harder to put food on the table for the average American.  An example of the unintended consequences of government intervention.  Such as requiring gasoline to include a portion of the corn crop.  Thus raising the price of corn.  And everything in the food chain downstream from corn.  Like beef, chicken, milk, eggs, etc.  No, the last thing consumers need who are trying to put food on the table is another farm bill.

Again, the Senate has already passed a solid bipartisan bill.  It’s got support from Democrats and Republicans.  It’s sitting in the House waiting for passage.  If House Republicans have ideas that they think would improve the farm bill, let’s see them.  Let’s negotiate.  What are we waiting for?  Let’s get this done.

So, passing a budget; immigration reform; farm bill.  Those are three specific things that would make a huge difference in our economy right now.  And we could get them done by the end of the year if our focus is on what’s good for the American people. And that’s just the big stuff.  There are all kinds of other things that we could be doing that don’t get as much attention.

I understand we will not suddenly agree on everything now that the cloud of crisis has passed.  Democrats and Republicans are far apart on a lot of issues.  And I recognize there are folks on the other side who think that my policies are misguided — that’s putting it mildly.  That’s okay.  That’s democracy.  That’s how it works.  We can debate those differences vigorously, passionately, in good faith, through the normal democratic process.

And sometimes, we’ll be just too far apart to forge an agreement.  But that should not hold back our efforts in areas where we do agree.  We shouldn’t fail to act on areas that we do agree or could agree just because we don’t think it’s good politics; just because the extremes in our party don’t like the word “compromise.”

When the Republicans wanted to add tax breaks for small business in the stimulus bill President Obama refused to listen.  Because he won the election.  And elections have consequences, he said.  And to the winner goes the spoils.  When the Democrats had the House, Senate and the White House they had no interest in compromise.  And didn’t.  But when they don’t have all the power they expect the other side to compromise.  And give them what they want.  That’s their idea of compromise.  Unconditional surrender.

I will look for willing partners wherever I can to get important work done.  And there’s no good reason why we can’t govern responsibly, despite our differences, without lurching from manufactured crisis to manufactured crisis.  In fact, one of the things that I hope all of us have learned these past few weeks is that it turns out smart, effective government is important.  It matters.  I think the American people during this shutdown had a chance to get some idea of all the things, large and small, that government does that make a difference in people’s lives.

We hear all the time about how government is the problem.  Well, it turns out we rely on it in a whole lot of ways.  Not only does it keep us strong through our military and our law enforcement, it plays a vital role in caring for our seniors and our veterans, educating our kids, making sure our workers are trained for the jobs that are being created, arming our businesses with the best science and technology so they can compete with companies from other countries.  It plays a key role in keeping our food and our toys and our workplaces safe.  It helps folks rebuild after a storm.  It conserves our natural resources.  It finances startups.  It helps to sell our products overseas.  It provides security to our diplomats abroad.

Really?  You want to go there?  Security of our diplomats?  The administration that let 4 Americans die in Benghazi on its watch?  Despite ample warnings?  Warnings so serious that the British pulled out of Benghazi?  Before our four diplomats were killed?  But there was an election, wasn’t there?  And we just couldn’t have trouble with terrorists during an election, could we?  Not for the president that won the War on Terror with the killing of Osama bin Laden.

So let’s work together to make government work better, instead of treating it like an enemy or purposely making it work worse.  That’s not what the founders of this nation envisioned when they gave us the gift of self-government.  You don’t like a particular policy or a particular president, then argue for your position.  Go out there and win an election.  Push to change it. But don’t break it.  Don’t break what our predecessors spent over two centuries building.  That’s not being faithful to what this country is about.

The Founding Fathers created LIMITED government.  What we have today is far from limited.  The progressives/liberals have destroyed what the Founding Fathers gave us.  Today we have a big, fat, bloated bureaucracy.  And the Republicans would like to change it by winning elections.  Which isn’t that easy when the Obama administration suppresses the vote by turning the IRS loose on the Tea Party.  Limiting their fundraising ability.  Causing their turnout to be less than it was in the 2010 midterm election.  When the Tea Party stirred the people to vote the House of Representatives back to the Republicans.  Which they weren’t going to let happen in 2012.  Hence using the IRS to suppress the Republican vote.

And that brings me to one last point.  I’ve got a simple message for all the dedicated and patriotic federal workers who’ve either worked without pay or been forced off the job without pay these past few weeks, including most of my own staff: Thank you.  Thanks for your service.  Welcome back.  What you do is important.  It matters.

You defend our country overseas.  You deliver benefits to our troops who’ve earned them when they come home.  You guard our borders.  You protect our civil rights.  You help businesses grow and gain footholds in overseas markets.  You protect the air we breathe and the water our children drink.  And you push the boundaries of science and space, and you guide hundreds of thousands of people each day through the glories of this country. Thank you.  What you do is important.  And don’t let anybody else tell you different.  Especially the young people who come to this city to serve — believe that it matters.  Well, you know what, you’re right.  It does.

And those of us who have the privilege to serve this country have an obligation to do our job as best we can.  We come from different parties, but we are Americans first.  And that’s why disagreement cannot mean dysfunction.  It can’t degenerate into hatred.  The American people’s hopes and dreams are what matters, not ours.  Our obligations are to them.  Our regard for them compels us all, Democrats and Republicans, to cooperate, and compromise, and act in the best interests of our nation –- one nation, under God, indivisible with liberty and justice for all.

Thanks very much.

The majority of people want to repeal Obamacare.  But the president doesn’t care about these American people.  Because they don’t share his vision of expanding government power in our lives.  People who would prefer to keep the health insurance they have.  And the doctors they have.  As well as not paying more for their health insurance.  But what they want isn’t as important to President Obama as what he wants.  So there is no compromise.  No cooperation.  Or acting in the best interest of the United States.  For this may be one nation, under God, indivisible with liberty and justice for all.  Where all Americans are equal.  Only some are more equal than others.  Like those who share President Obama’s vision.

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The Threat of Default on the Debt is from the Left not the Right

Posted by PITHOCRATES - October 10th, 2013

Politics 101

We have a Debt and Spending Problem as we are Spending so much that we have to Raise the Debt Ceiling

Contrary to popular belief the government doesn’t just borrow money.  They also raise money by taxing us and charging us fees.  A lot of it.  In this past fiscal year (October 2012 to September 2013) they raised $2,450,200,000,000.  That’s $2.45 trillion dollars.  Sadly, they spent $3,537,100,000,000.  Or $3.5 trillion.  Giving us a deficit of $1,086,900,000,000.  Or $1.1 trillion.  Which is why we’re having a debt crisis.

Interestingly, the left does not believe that we have a debt problem.  Or a spending problem. For they see no problem with these numbers.  The only problem they have is with Republicans.  Who do believe we have a debt problem.  As well as a spending problem.  And they want to do something about it.  Before the debt grows so big that it threatens the full faith and credit of the United States.

Now the Democrats, who don’t think we have a debt or a spending problem, are saying the Republicans are threatening the full faith and credit of the United States.  With their shutting down of government.  And their demand for spending cuts before raising the debt ceiling.  Which proves the Republicans point.  We have a debt and a spending problem.  Because we are spending so much that we have to raise the debt limit.

The Interest on the Debt is only 11.75% of the Available Revenue so there is no Danger of Default

Of course, this explains the $1.1 trillion deficit.  Out of control spending.  That the government is funding with more and more borrowing.  Which threatens the full faith and credit of the United States.  Because the more debt we accumulate the less likely we’ll ever be able to pay it off.

But are we risking default on the debt now?  With this battle over the debt ceiling?  No.  Yes, the debt is huge.  Currently it is in excess of $16 trillion.  About six and a half times total federal revenue.  To get an idea what that means consider you have the median household income which is approximately $51,000.  If you carried the same amount of debt the federal government carries you would have approximately $331,500 in credit card debt.  Any household with a median income of $51,000 with credit card debt of $331,500 has a bleak future.  And unless they win the lottery they will not escape bankruptcy.

So $16 trillion in debt is recklessly high.  And impossible to pay off.  But as bad as that is the amount of revenue the federal government collects via taxes and fees greatly exceeds the interest on the debt.  The interest on the debt is $415.7 billion.  This is the amount the government has to pay to avoid defaulting on the debt.  Which is easy to do with $2.45 trillion in revenue.  The interest on the debt is only 11.75% of the available revenue.  So even if the Republicans refuse to raise the debt ceiling there is no way in hell the government will be unable to pay the interest on the debt.  Unless the government chooses NOT to pay the interest on the debt.  Even when they have the ability to pay the interest on the debt.

The Democrats become Chicken Little whenever anyone ever Threatens their Spending Authority

So why all the talk of defaulting on the debt?  And ruining the full faith and credit of the United States?  Simple.  Democrats are liars.  And what do liars do?  They lie.  The interest on the debt is in no danger of going unpaid.  It’s all that other government spending that is in danger of going unspent.  That spending that makes people dependent on government.  And buys votes.

The left tries to frighten the people so they can keep spending.  And keep buying votes.  They try to scare Social Security and Medicare recipients.  Telling them they will lose their benefits if the Republicans don’t stop what they’re doing.  Even though they won’t.  First of all we pay into our own retirement account. At least that’s what the government tells us.  And there is a Social Security Trust Fund.  Full of our money just waiting to pay our benefits.  Or so they say.  But the Trust Fund doesn’t have money in it.  It has government IOUs.  Because the government spent that money.

So that’s why Democrats lie.  So they can keep spending and buying votes.  Which they won’t be able to do if they can’t borrow more money to spend.  And they’re spending so much that they can’t afford to lose their charging privileges.  This is why they warned the sky would fall if the sequestration spending cuts went into effect.  But as we all witnessed the sky did NOT fall with those spending cuts.  There was some discomfort.  But nowhere near the calamity the Democrats warned would befall us if they didn’t get their way.  Bringing us to their greatest fear.  That life can go on with a large spending cut.  And telling us that the government can cut spending even more.  Far more.  Which is a threat to their ability to buy votes.  And to their power.  Which is why they become Chicken Little whenever anyone ever threatens their spending authority.

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Shutting Down Government and Taking Hostages

Posted by PITHOCRATES - October 3rd, 2013

Politics 101

Democrats close National Parks and Deny Cancer Treatment for Children to win Political Contest

The politicians have shut down the government.  And the executive branch (i.e., President Obama’s branch) is really trying to make the shutdown hurt.  In fact they are gleeful.  For the president had his ass handed to him over his redline comment on Syria.  Having been ridiculed on the international stage he is trying to show how tough he is with people he can push around.  Americans.

So President Obama has closed national monuments.  To really annoy the people.  Even World War II veterans (men who know a thing or two about courage and bravery and being tough) coming to see the outdoor World War II monument.  Yes, he closed that, too.  But he didn’t stop there.  His executive branch even tried to close Mount Vernon.  The privately owned and privately operated Mount Vernon.  Proving the politics that motivate the president and the Democrats.

When a reporter asked Senator Harry Reid if he would approve a spending bill that would let children with cancer to participate in an experimental treatment program he said ‘no’.  Because if he did that would mean the other side would have won.  When you’re talking about winners and losers, though, you’re not doing what is best for the American people.  You’re doing whatever you can to win.  Regardless of what’s best for the people.

The Obama administration refused additional security in Benghazi so they wouldn’t offend their Muslim Hosts

The Democrats are playing hardball.  Acting like petulant children who can’t get their way.  And they don’t care who they hurt in the process.  Children throwing tantrums rarely do.  Pity they couldn’t show this same toughness when it comes to real enemies of America.

President Obama and the Democrats have unleashed every invective in the dictionary against the Republicans.  Calling them terrorists and their actions jihad.  Yet they bend over backwards not to offend those waging jihad against America.  To this day they still call the Fort Hood massacre workplace violence.  After the Boston Marathon bombing they held off calling it an act of terrorism.  And refuse to call the bombers Muslim even though they were Muslims fighting a jihad for Islam.

When the American ambassador in Libya requested additional security for their mission in Benghazi the Obama administration refused the request.  As they didn’t want to offend the sensitivities of their Muslim hosts in Benghazi by showing that we were worried about our safety there.  For President Obama won the War on Terror with the killing of Osama bin Laden.  So there was nothing to worry about.  And there was an election coming up.  So not only were they worried about their Islamic host’s sensitivities they were worried about how a ramp up of security in Benghazi would look back at home.  As they were getting a lot of miles out their campaign slogan.  “Osama bin Laden is dead.  And General Motors is alive.”  Which led to four dead Americans in Benghazi.

The Democrats hold Social Security Recipients Hostage whenever they can’t get What they Want

Of course, what government shutdown would be complete without scaring old people?  Yes, they have brought up Social Security.  Because those Social Security recipients are hostages to the government.  If the government doesn’t get what they want the government threatens to take away their benefits.

The government shutdown does not affect Social Security.  But tying the current fight in with the future fight over raising the debt limit helps the Democrats.  For they buy a lot of votes.  Which isn’t cheap.  Each year federal spending increases to pay for new and/or expanded federal programs that buy votes from those they make dependent on government.  This is the Democrats’ great fear.  That they won’t be able to raise the debt limit.  So they can continue to buy votes.  Which they must do as they can’t win in the arena of ideas.

Which is why they’re already playing the Social Security card.  Taking Social Security recipients hostage.  Threatening them that if they don’t pressure the Republicans to stop trying to be responsible they will make them pay.  And stop issuing their checks.  Which further proves how political everything is.  First of all, we pay into Social Security.  There is a Social Security Trust Fund that is supposedly holding our money.  Which means one of two things.  Either they’re withholding our own money from us.  Or Social Security is really a Ponzi scheme after all.  And the Trust Fund is empty.  Filled with nothing but federal IOUs.  Yes, they’ve spent that money to buy more votes.  So not only have they spent more than the government can pay.  They’ve also raided our retirement accounts.  To buy votes.  Which is what Obamacare is all about.  Buying votes.  To get even more Americans dependent on the government.  So the government can hold them, too, hostage to get what they want.

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The NHS is all about keeping Labour in Power just as Obamacare is about keeping Democrats in Power

Posted by PITHOCRATES - July 20th, 2013

Week in Review

Why did FDR give us Social Security?  To connect retiring Americans with the Democrat Party.  Why did LBJ give us Medicare and Medicaid?  To connect retiring and poor Americans with the Democrat Party.  And why has national health care been the Holy Grail of the Democrat Party?  Because that will connect ALL Americans to the Democrat Party.

During each election it’s the same thing.  Social Security and Medicare are going broke.  Republicans put forth plans to save these programs.  While the Democrats shout out, “See!!!  The Republicans want to take away your Social Security benefits and your Medicare benefits, seniors.  They want you to die.  They want to roll Grandma off the cliff.  Because they are nothing but a bunch of greedy, vicious, heartless bastards.  So remember to vote Democrat.  Unless you want to become homeless and die an excruciatingly painful death.  If so, then vote Republican.”  They scare seniors to vote for them and win elections.  And Social Security and Medicare become even more broke.

The Labour Party in Britain scored big with the creation of the National Health Service (NHS).  For the NHS was their baby.  And people would forever remember that fact.  And that was electoral gold.  But to maintain appearances they had to make sure everything looked hunky dory in the NHS.  Even when appalling care was killing thousands a year (see Labour must bear the blame for the shameful decline of the NHS by Sean Worth posted 7/15/2013 on The Telegraph).

One of the most depressing experiences in politics is to listen to a focus group discuss Labour and the NHS. Time after time, the voters’ attitude is simple: unconditional praise. No matter how bad the health service’s performance, there is a feeling that it is safest in the hands of the party that created it… The NHS is such an electoral asset that Ed Miliband is expected to make it a central part of his campaign to be Prime Minister – not least because he lags so badly on so many other issues, such as economic competence and personal credibility.

But does Labour really have cause to be proud of its record on the NHS? Today, the results of an investigation into suspicious death rates at 14 hospitals – carried out in the wake of the scandals at Mid Staffordshire – are revealed. The facts are appalling: their performance was so poor that up to 13,000 people may have died needlessly. So severe are the problems that Prof Sir Bruce Keogh, the medical director of NHS England, is expected to place many in special measures, or replace management teams entirely.

This comes on the back of a number of revelations about abuse and neglect in the NHS, stretching back over many years. Yet while the agencies set up by Labour to monitor patient safety have been shown to be either negligent – with many of the 14 trusts on the “death list” receiving clean bills of health from the Care Quality Commission – or actively complicit in covering up hospitals’ errors, no politician has had to carry the can. In fact, the polls show that in the wake of revelations about Labour-era scandals such as at Mid Staffs, it is actually the Tories who are blamed.

That, however, could be about to change. A parliamentary question tabled by the Tory MP Priti Patel shows that Labour ministers – including Andy Burnham, the party’s current health spokesman and former health secretary – received more than 1,500 warnings over the safety of care at the 14 hospitals on this “death list”, many from concerned staff, patients or members of the public…

In addition, people around the last government are starting to speak out. Prof Sir Brian Jarman – the expert who uncovered the original problems at Mid Staffs, Morecambe Bay and Basildon hospitals – has claimed that his work was “suppressed” by Labour ministers, describing the Department of Health as “a denial machine”, focused on producing good news stories rather than getting to the bottom of the death-rate data. Two former NHS regulators who worked under Labour, Dr Bill Moyes and Baroness Young, have also described the “pressure” exerted on the system by ministers to keep quiet about unsafe care…

One central reason why Labour has been allowed to get away with the idea that it is the “party of the NHS”, while presiding over such a shameful record, is that it benefits from the axis within the public services that tirelessly attacks those who dare to suggest that the health service might need to change. Most notorious is the treatment of Julie Bailey, the ex-nurse whose mother was killed by neglect at Mid Staffs, who has been the targeted of venomous abuse for speaking out about it. In 2011, union activists posted an internet video which stated they hoped she would die; she has since been subjected to a campaign of nuisance calls, threats and online vitriol; has been hounded from her business and her home and even seen her mother’s grave desecrated.

Fast and Furious.  Benghazi.  The IRS abuse of conservatives.  All scandals that the Obama administration was going to look into and get to the bottom of.  And here we are.  With the Obama administration getting to the bottom of nothing.  Everything is an ongoing investigation that they can’t comment on.  And time advances on.  Hopefully to the point that people get tired asking about these scandals.  So is there any question that what’s happened in the NHS could very well happen in Obamacare?

One of the reasons why Democrats want to nationalize health care so badly is to unionize those health care workers.  Because if they’re unionized they will pay union dues.  Which will be a windfall into Democrat coffers.  The administration will fight to give these health care heroes a decent living wage.  The higher the better.  For the more of the taxpayers’ dollars they get the more of the taxpayers’ dollars flow into Democrat coffers.  And once that big money revenue stream is set up you will see the public sector unions pulling out all stops to protect it.  Just like they are in Britain.  To protect the windfall of the NHS to Labour coffers.

The NHS isn’t in the health care business.  They’re in the election business.  And so far that business has been very successful.  Even if the health care side of it has not.  This is what Obamacare is all about.  To set up the same cash windfall to Democrat coffers.  And they have been salivating for that day to arrive.  And will do anything to attack their enemies that try to deny them their Holy Grail.

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Family Farms, Big City Factories, Fertility Rates and Federal Debt

Posted by PITHOCRATES - July 9th, 2013

History 101

The Mechanization of the Farm began a Migration from the Country to the Cities

Before the Industrial Revolution (1760-1830ish) if you worked you most probably farmed.  For most everyone from the dawn of civilization on the Nile, the Euphrates & Tigris, the Indus and the Yangtze farmed.  To produce food for the civilization for the good times.  And food surpluses for the bad times.  For having enough to eat was never a sure thing.  And surviving the winter was a challenge.

What early civilizations needed were a lot of people to work the land.  For large-scale farming could produce large harvests.  Enough to feed everyone during the good times.  During the winters.  And even the occasional drought.  But it could be a risky game to play.  Because a lot of people to work the land also meant a lot of mouths to feed.  Which meant everyone worked the fields.  Men.  Women.  And children.  Anyone who ate worked.  As they did on the family farm.  Which is why they had large families.  For the more children they had the more land they could work.  Allowing them to eat during the good times.  During the winters.  The occasional drought.  While having large food surpluses to sell.  Allowing them to build wealth.  Just like the landowners in the Old World.  The aristocracy.  Only instead of peasants working the land it was family.

But with the Industrial Revolution came change.  The steam engine mechanized farming.  Allowing fewer people to produce more.  Also, steam power allowed factories away from rivers.  As they no longer needed moving water to turn a waterwheel.  So factories filled our cities.  Creating a lot of jobs.  This and the mechanization of the farm requiring fewer hands to work the land began a migration.  Of people from the country.  To the cities.

The Migration from the Family Farm to the Big City got People used to Bigger Government and Taxes

The world modernized in the 1800s.  Food was never more plentiful.  Allowing more people to leave the farm.  And think about other things.  Like electrical engineering.  Nikola Tesla gave us AC electric power.  And the AC electric motor.  Changing manufacturing forever.  Those little spinning machines filled our factories.  And operated the machines in those factories.  Everything we ever made we made better and more efficiently thanks to the electric motor.  Allowing us to manufacture more than ever.  And manufacture more complex things.  Factories grew.  With many levels of manufacturing contained within.  Packing more people than ever in these factories.

The common perception of this industrial world is of sweatshops.  Child labor.  Soot and smoke casting a pall over overcrowded cities.  Where people packed into overcrowded housing.  Thanks to that migration from the family farm to the big city factories.  Which changed things.  Instead of people raising a large family on a large farm where there was plenty of room and plenty of food to eat these families were living in cramped apartments in the crowded city.  And they had to pay for the food they ate.  And the more mouths they had to feed the more money it took.  This was a big change.  Whereas on the farm a large family meant more food.  And more wealth.  In the city, though, more children meant less food for everyone else to eat.  And more poverty.

The growth of cities also caused another change.  When people lived on scattered farms they didn’t need any government services.  But in the crowded cities they did.  Homes had utilities.  And sanitation.  Cities also had streets.  Which the city needed to maintain.  Eventually there was street lighting.  And traffic signals.  Police departments.  Fire departments.  Schools.  And teachers.  All of these things cost money.  And we paid for them with taxes.  Getting people used to bigger government.  And bigger taxes.  Then the progressives entered government at the federal level.  Who wanted government to do at the federal level what it did at the local level.  Be mother to the people.  Instead of just doing those things the Constitution said it should do.

A Falling Fertility Rate forced the Government to go into ‘World War’ Debt just to pay for Social Security and Medicare

The fertility rate (the number of children a woman has during her child-bearing days) fell all during the 1800s.  As large families went from being wealth producers on the farm to poverty inducers in the cities.  While federal debt from the American Revolutionary War fell during the early 1800s.  The debt fell because there wasn’t a lot of federal spending.  So it wasn’t hard to retire that debt.  But that federal restraint didn’t last.  There was a spike in federal debt (as a percent of GDP) following American Civil War (1861-1865) as they had to borrow heavily to pay for that war.  But after the war the debt level did not fall back to pre-war levels.  A trend that would continue.  As we can see here.

Fertilty Rate versus Debt as Percent of GDP

There was another spike in federal debt following World War I (1917-1918).  But the debt level never fell back to pre-war levels.  Then the Great Depression and the New Deal (1930s) began another spike in Federal debt.  That World War II took to record highs.  And once again after the war the federal debt did not fall back to pre-war levels.  Then came President Reagan.  Who had the guts to call communism what it was.  A failed economic system that oppressed its people and was the greatest killer of the 20th century.  To push the Soviet Union into the ‘ash heap of history’ Reagan forced them to spend more than they could afford.  By ramping up defense spending to a level the Soviets couldn’t match.  Which ultimately won the Cold War (1947-1991, with Reagan delivering the knockout blow during his presidency (1981-1989) ).  But federal debt levels, once again, did not fall back to pre-war levels.  In fact, despite the peace dividend President Clinton inherited he still raised federal spending.  Just at a reduced rate than it was during the Cold War.  President Bush gave us Medicare Part D (drugs for seniors).  Then came 9/11.  And the War on Terror.  Then President Obama.  Who despite ending the Iraq War had the greatest budget deficits of any president.  As he spent more than any other president.  As he tried to transform the country into a European social democracy.  Sending out debt soaring to new heights.

FDR gave us Social Security in 1935.  At the tail-end of a long decline in the fertility rate.  Promising great benefits to future retirees.  Which LBJ added to during the Sixties with his Great Society.  During the post-war baby boom.  Perhaps assuming that increasing fertility rate would provide a lot of new taxpayers in the future when the weight of all these new government programs (FDR’s and LBJ’s) would be felt.  But then two things happened that they didn’t quite plan on.  The birth control pill and abortion created a baby bust following the baby boom.  Worse, thanks to modern medicine people were living longer into retirement.  Consuming more Social Security and Medicare benefits than anyone had ever imagined.  And just when the full force of those baby boomers was going to hit there were going to be fewer taxpayers around to pay for it.  Thanks to that baby bust.  More retirees paid for by fewer taxpayers.  A recipe for disaster.  Which is why debt soared towards World War II highs following the Cold War.  Even though there was no world war.  Because the cost of all those government benefits far exceeded the tax revenue.  Forcing the government to go into ‘world war’ debt just to pay for Social Security.  Medicare.  And everything else the federal government was providing so they could play mother to the American people.

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