The U.S. Preventive Task Force caused quite a stir recently when they revised their recommendations on the frequency and age for women to get mammograms. Many have speculated on the timing for this government-funded report, with the Senate vote on health care looming, and cost estimates being watched closely. Just the hint that the government would risk women’s health to cut costs is causing outrage on both sides of the aisle.
Even the administration is alarmed at its own panel’s recommendation. One official, the Secretary of Health and Human Services, Kathleen Sebelius told women to ignore the new guidelines, keep doing what they are doing and make the best decisions for themselves after consulting with their doctors.
This sounds like an excellent idea to me. As a physician myself, I understand the importance of ensuring that patients are able to consult their doctors and make their own decisions without interference from government bureaucrats or government-favored corporations.
However, I am confused by the administration’s reasoning and apparent change of heart. Have they reversed their position on healthcare reform and now decided that patients and doctors should be in control of individual healthcare decisions? Or are they still in the healthcare central planning business? The healthcare reform plans currently aim to empower Congress to dictate to insurers minimal standards of coverage. Those government standards will ultimately be determined by politicians and bureaucrats, not individual patients and doctors.
It is naive to think that recommendations by an authoritative government panel will never be used to deny services to people that want them. It is sad to think that people will be forced to spend their hard-earned money for a one-size fits all, government mandated healthcare delivery model, but then have to scrape together additional funds to pay out of pocket for healthcare they really want or need – that is, if the government allows them to at all. After all, the federal government currently forbids Medicare beneficiaries from spending their own money on services covered by Medicare, if for whatever reason they need to. Why wouldn’t the government eventually apply these kinds of restrictions to everyone, if they are successful with this takeover? Beware of the supposed gifts offered to you by government, for when it gives you things with one hand, the other hand takes away your liberty and independence.
It remains to be seen what provisions will be in the final bill. We do know we have no funds to pay for it except for debt and money printed out of thin air. We know that the nation’s creditors are getting very nervous about the government’s continuous spending sprees and bailouts. We know this healthcare bill, like all government programs, will be expensive.
There will be a day of reckoning when the credit stops and the bills for all this spending come due. When that day comes and politicians and bureaucrats have to deal with reality, it will be very uncomfortable to find yourself in their liability column, which is where healthcare reform will put many more Americans.
Monday
WHAT I THINK......SCOTT LANMAN
The Federal Reserve’s shield from congressional audits of interest-rate decisions took a blow from lawmakers who want to open the central bank’s books to greater congressional scrutiny.
The House Financial Services Committee yesterday advanced a proposal to remove a three-decade ban on audits of monetary policy and carry out an examination of the central bank. The plan was offered by Representative Ron Paul, a Republican from Texas who has called for the abolition of the Fed, and based on a bill with more than 300 co-sponsors.
Lawmakers say the Fed hasn’t adequately accounted for putting taxpayer funds at risk, including aid to companies such as Citigroup Inc. and American International Group Inc. Fed Chairman Ben S. Bernanke has opposed the Paul legislation, saying it may open the door to interference in monetary policy.
Yesterday’s vote is “probably not going to be helpful in terms of keeping inflation expectations low and supporting the dollar,” said Michael Feroli, a JPMorgan Chase & Co. economist in New York and former Fed researcher. The central bank “should do whatever it takes to stop this from going forward and eroding confidence in the Fed’s independence,” he said.
The broader bill on financial regulation is subject to a vote by the committee, then must be approved by the House and Senate and signed into law by President Barack Obama.
“This is the bill that would allow the people to win over the special interests,” Paul said during debate on the measures yesterday. “There is no doubt that the individuals opposing this amendment represent the secrecy of the Federal Reserve.” An audit “shouldn’t hurt them in any way,” he said.
‘May Be Revisited’
Barney Frank, the Massachusetts Democrat who chairs the committee and opposed the Paul measure, said the issue “may be revisited” when the legislation reaches the House floor.
“It’s going to be seen as weakening the independence of monetary policy with consequent negative implications,” Frank told reporters after the vote. “People are going to be worried about the impact on the dollar, on the interest rate.”
The dollar strengthened to $1.4925 per euro late yesterday from $1.4963. The dollar has weakened 6.5 percent against the euro this year.
Paul, who wrote a best-selling book this year titled “End the Fed,” said provisions in his amendment would limit interference in monetary policy. The measure, co-sponsored by Representative Alan Grayson, a Democrat from Florida, would exclude any unreleased transcripts or minutes of Fed policy meetings. It calls for an audit of the Fed and its 12 regional banks by the Government Accountability Office within a year after enactment.
Limited Audits
The committee voted first, 43-26, to substitute Paul’s proposal for a Democratic measure to retain the ban on audits of monetary policy while requiring more limited audits. About one- third of Democrats joined the unanimous Republicans on the vote. Then, in a voice vote, the committee attached the Paul measure to the broader bill.
Frank said he expects to finish the legislation in committee on Dec. 1, delaying a vote he had scheduled for yesterday until after lawmakers return from the Thanksgiving holiday. He supported a competing measure from Representative Mel Watt, a North Carolina Democrat, to retain the ban on auditing monetary policy.
“Perception is very important in monetary policy,” Frank said. He said he was concerned that “inflationary expectations will be given a boost if we adopt the Paul” measure.
The Fed’s powers and rate-setting independence are under threat on several fronts in Congress. Separately yesterday, the Senate Banking Committee began debate on legislation that would strip the Fed of bank-supervision powers and give lawmakers greater say in naming the officials who vote on monetary policy.
Lax Oversight
Paul and other lawmakers have accused the Fed of lax oversight of banks and failing to avert the financial crisis. He said Watt’s measure instead would put further restrictions on the power of the government to audit the Fed, contrary to its sponsor’s assertion.
“This actually takes away some auditing authority,” said Paul. “This amendment eliminates all the benefits that people see coming from” Paul’s legislation, he said.
Watt cautioned against succumbing to popular anger at the Fed during debate on the measures.
“Everybody would like to beat up on the Fed and call them the bad guys,” Watt said. “So if we make this decision on a political basis, I know what the result will be.”
Also yesterday, lawmakers attached, by voice vote, a separate Republican measure to audit all Fed emergency-loan actions “during the current economic crisis.” Legislators may need to work out how to combine the amendments when the bill goes to the House floor.
The House Financial Services Committee yesterday advanced a proposal to remove a three-decade ban on audits of monetary policy and carry out an examination of the central bank. The plan was offered by Representative Ron Paul, a Republican from Texas who has called for the abolition of the Fed, and based on a bill with more than 300 co-sponsors.
Lawmakers say the Fed hasn’t adequately accounted for putting taxpayer funds at risk, including aid to companies such as Citigroup Inc. and American International Group Inc. Fed Chairman Ben S. Bernanke has opposed the Paul legislation, saying it may open the door to interference in monetary policy.
Yesterday’s vote is “probably not going to be helpful in terms of keeping inflation expectations low and supporting the dollar,” said Michael Feroli, a JPMorgan Chase & Co. economist in New York and former Fed researcher. The central bank “should do whatever it takes to stop this from going forward and eroding confidence in the Fed’s independence,” he said.
The broader bill on financial regulation is subject to a vote by the committee, then must be approved by the House and Senate and signed into law by President Barack Obama.
“This is the bill that would allow the people to win over the special interests,” Paul said during debate on the measures yesterday. “There is no doubt that the individuals opposing this amendment represent the secrecy of the Federal Reserve.” An audit “shouldn’t hurt them in any way,” he said.
‘May Be Revisited’
Barney Frank, the Massachusetts Democrat who chairs the committee and opposed the Paul measure, said the issue “may be revisited” when the legislation reaches the House floor.
“It’s going to be seen as weakening the independence of monetary policy with consequent negative implications,” Frank told reporters after the vote. “People are going to be worried about the impact on the dollar, on the interest rate.”
The dollar strengthened to $1.4925 per euro late yesterday from $1.4963. The dollar has weakened 6.5 percent against the euro this year.
Paul, who wrote a best-selling book this year titled “End the Fed,” said provisions in his amendment would limit interference in monetary policy. The measure, co-sponsored by Representative Alan Grayson, a Democrat from Florida, would exclude any unreleased transcripts or minutes of Fed policy meetings. It calls for an audit of the Fed and its 12 regional banks by the Government Accountability Office within a year after enactment.
Limited Audits
The committee voted first, 43-26, to substitute Paul’s proposal for a Democratic measure to retain the ban on audits of monetary policy while requiring more limited audits. About one- third of Democrats joined the unanimous Republicans on the vote. Then, in a voice vote, the committee attached the Paul measure to the broader bill.
Frank said he expects to finish the legislation in committee on Dec. 1, delaying a vote he had scheduled for yesterday until after lawmakers return from the Thanksgiving holiday. He supported a competing measure from Representative Mel Watt, a North Carolina Democrat, to retain the ban on auditing monetary policy.
“Perception is very important in monetary policy,” Frank said. He said he was concerned that “inflationary expectations will be given a boost if we adopt the Paul” measure.
The Fed’s powers and rate-setting independence are under threat on several fronts in Congress. Separately yesterday, the Senate Banking Committee began debate on legislation that would strip the Fed of bank-supervision powers and give lawmakers greater say in naming the officials who vote on monetary policy.
Lax Oversight
Paul and other lawmakers have accused the Fed of lax oversight of banks and failing to avert the financial crisis. He said Watt’s measure instead would put further restrictions on the power of the government to audit the Fed, contrary to its sponsor’s assertion.
“This actually takes away some auditing authority,” said Paul. “This amendment eliminates all the benefits that people see coming from” Paul’s legislation, he said.
Watt cautioned against succumbing to popular anger at the Fed during debate on the measures.
“Everybody would like to beat up on the Fed and call them the bad guys,” Watt said. “So if we make this decision on a political basis, I know what the result will be.”
Also yesterday, lawmakers attached, by voice vote, a separate Republican measure to audit all Fed emergency-loan actions “during the current economic crisis.” Legislators may need to work out how to combine the amendments when the bill goes to the House floor.
AUDIT THE FED ATTACHED AS AN AMENDMENT
I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.
Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. All items on the Fed’s balance sheet will be auditable, including all credit facilities, all securities purchase programs, and all agreements with foreign central banks. To calm fears that we might be trying to substitute congressional action for Fed mischief in tinkering with monetary policy, we agreed to a 180 day lag time before details of the Fed’s market actions are released and included language to state explicitly that nothing in the amendment should be construed as interference in or dictation of monetary policy by Congress or the GAO. This left no reasonable objections standing and the amendment passed with a vote of 43 to 26.
This was a major triumph for transparency and accountability in government. With unprecedented turmoil in the financial markets, the people are demanding to know and understand the extent of the Federal Reserve’s involvement in the creation of out-of-control business cycles, who they are helping, and how. We need information. The excuses for not giving out this information are flimsy at best, and the passage of this amendment is a major step to finally getting at the truth.
Of course I could not have done this without the help and support of many other members who have been strong allies in this fight. Having over 300 cosponsors was obviously helpful.
However, as great as this victory is, we have to remember that this amendment is attached to a bill that would give sweeping new powers to the Federal Reserve. The Fed has taken its mandate to maintain stable prices and full employment and used its immense power to help elite friends at the great expense of everyone else. The answer is not to increase their powers and ability to interfere in the economy, but that is what the legislation will do. It is a disaster waiting to happen, and unfortunately it looks as if it will pass.
At least with the Audit the Fed amendment attached to the bill, the Fed will not be able to do its destructive work in secret. The people will know exactly who the beneficiaries are of this immoral system of money management.
Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. All items on the Fed’s balance sheet will be auditable, including all credit facilities, all securities purchase programs, and all agreements with foreign central banks. To calm fears that we might be trying to substitute congressional action for Fed mischief in tinkering with monetary policy, we agreed to a 180 day lag time before details of the Fed’s market actions are released and included language to state explicitly that nothing in the amendment should be construed as interference in or dictation of monetary policy by Congress or the GAO. This left no reasonable objections standing and the amendment passed with a vote of 43 to 26.
This was a major triumph for transparency and accountability in government. With unprecedented turmoil in the financial markets, the people are demanding to know and understand the extent of the Federal Reserve’s involvement in the creation of out-of-control business cycles, who they are helping, and how. We need information. The excuses for not giving out this information are flimsy at best, and the passage of this amendment is a major step to finally getting at the truth.
Of course I could not have done this without the help and support of many other members who have been strong allies in this fight. Having over 300 cosponsors was obviously helpful.
However, as great as this victory is, we have to remember that this amendment is attached to a bill that would give sweeping new powers to the Federal Reserve. The Fed has taken its mandate to maintain stable prices and full employment and used its immense power to help elite friends at the great expense of everyone else. The answer is not to increase their powers and ability to interfere in the economy, but that is what the legislation will do. It is a disaster waiting to happen, and unfortunately it looks as if it will pass.
At least with the Audit the Fed amendment attached to the bill, the Fed will not be able to do its destructive work in secret. The people will know exactly who the beneficiaries are of this immoral system of money management.
Wednesday
WHAT I THINK.......GARY
For those who understand what has happened in reference to regulators before and during the current economic crisis, the idea of taking authority and responsibility away from the Federal Reserve and placing it within a new super regulatory agency, as is being proposed, is ignorant, to be kind.
Ron Paul has it right when he introduced legislation which would require a complete audit of the Federal Reserve in order to see what deals they’ve been making, how they distributed money, and how they’ve been interacting with foreign governments and banking institutions.
Now that Paul’s bill has been pretty much gutted and useless (although Paul is attempting to get it reinstated with its original language), the idea of simply creating what would essentially be another Federal Reserve under a different name, but with evidently broader powers, is a futile attempt at trying to fix an economic system, that for the most part, hasn’t received the proper diagnosis yet.
This is shown in the introduction by Chris Dodd’s Banking Committee of 1,136 pages of draft regulations, which would basically transfer power from the Federal Reserve and the FDIC to this new supervisory, regulatory agency, which the sitting president and a board would appoint members to.
What the new agency would purportedly do would be to look for and find so-called too big to fail banks and then provide a thorough oversight of the financial institution. Supposedly a mechanism would be put in place which would help to wind down those financial institutions that aren’t banks in order to lower amount of money taxpayers would have to pay for to keep them afloat.
Just that last idea alone continues to show that this new agency is already set to fail, if it’s allowed to be created, as politicians continue to ignore the fact that taxpayers aren’t and shouldn’t be required to bail out businesses, and as long as that’s assumed to be an important part of the economic story, no meaningful changes will happen.
Here’s another couple of reasons we need to forget about the continuing drive toward more regulation, which has already been proven to have failed: those reasons are called Fannie and Freddie! Already these two government-backed entities have cost taxpayers about $112 billion to keep them going. Yet we’re being led to believe more oversight and regulation will change things?
Some in the government have been attempting to make it look like loose regulations have been a big part of the problem, but in fact the banking and financial industry, while admittedly had been loosed some concerning regulations, is still one of the more regulated industries in the country, and adding more regulations isn’t going to take care of what isn’t the real problem.
If you have a broken leg it isn’t going to help to have chemotherapy as a treatment for you. It’s not relevant and isn’t going to help you in any way. Yet that is precisely what is being done when attempts to create this new supervisory agency are being put forth.
Another thing to consider is the Savings & Loan crisis which generated tons of new regulations to keep something like that from happening again. You see where that got us.
So when Chris Dodd stood before the cameras recently and stated that the Federal Reserve, as far as protecting consumers and regulation were an “abysmal failure,” it’s laughable when taken in the light of Fannie and Freddie, along with the regulations instituted following the Savings & Loan crisis.
I am no defender of the Federal Reserve and believe they should be abolished, but not in order to create a new agency which will no doubt create the same problems by misunderstanding what the financial disease is.
What is that financial disease? It has been the monetary policies implemented by the Federal Reserve for decades, which isn’t even being talked about or focused on by those in government, even though Ron Paul, the most informed politician on financial matters and economics, continues to hammer at them and repeat over and over that this is the source of the past and existing economic problems we face.
Until monetary policy and the Federal Reserve become the real focus of our economic problems, nothing will be changed in any way, and we’ll be doomed to repeat this over and over again until they are.
Ron Paul has it right when he introduced legislation which would require a complete audit of the Federal Reserve in order to see what deals they’ve been making, how they distributed money, and how they’ve been interacting with foreign governments and banking institutions.
Now that Paul’s bill has been pretty much gutted and useless (although Paul is attempting to get it reinstated with its original language), the idea of simply creating what would essentially be another Federal Reserve under a different name, but with evidently broader powers, is a futile attempt at trying to fix an economic system, that for the most part, hasn’t received the proper diagnosis yet.
This is shown in the introduction by Chris Dodd’s Banking Committee of 1,136 pages of draft regulations, which would basically transfer power from the Federal Reserve and the FDIC to this new supervisory, regulatory agency, which the sitting president and a board would appoint members to.
What the new agency would purportedly do would be to look for and find so-called too big to fail banks and then provide a thorough oversight of the financial institution. Supposedly a mechanism would be put in place which would help to wind down those financial institutions that aren’t banks in order to lower amount of money taxpayers would have to pay for to keep them afloat.
Just that last idea alone continues to show that this new agency is already set to fail, if it’s allowed to be created, as politicians continue to ignore the fact that taxpayers aren’t and shouldn’t be required to bail out businesses, and as long as that’s assumed to be an important part of the economic story, no meaningful changes will happen.
Here’s another couple of reasons we need to forget about the continuing drive toward more regulation, which has already been proven to have failed: those reasons are called Fannie and Freddie! Already these two government-backed entities have cost taxpayers about $112 billion to keep them going. Yet we’re being led to believe more oversight and regulation will change things?
Some in the government have been attempting to make it look like loose regulations have been a big part of the problem, but in fact the banking and financial industry, while admittedly had been loosed some concerning regulations, is still one of the more regulated industries in the country, and adding more regulations isn’t going to take care of what isn’t the real problem.
If you have a broken leg it isn’t going to help to have chemotherapy as a treatment for you. It’s not relevant and isn’t going to help you in any way. Yet that is precisely what is being done when attempts to create this new supervisory agency are being put forth.
Another thing to consider is the Savings & Loan crisis which generated tons of new regulations to keep something like that from happening again. You see where that got us.
So when Chris Dodd stood before the cameras recently and stated that the Federal Reserve, as far as protecting consumers and regulation were an “abysmal failure,” it’s laughable when taken in the light of Fannie and Freddie, along with the regulations instituted following the Savings & Loan crisis.
I am no defender of the Federal Reserve and believe they should be abolished, but not in order to create a new agency which will no doubt create the same problems by misunderstanding what the financial disease is.
What is that financial disease? It has been the monetary policies implemented by the Federal Reserve for decades, which isn’t even being talked about or focused on by those in government, even though Ron Paul, the most informed politician on financial matters and economics, continues to hammer at them and repeat over and over that this is the source of the past and existing economic problems we face.
Until monetary policy and the Federal Reserve become the real focus of our economic problems, nothing will be changed in any way, and we’ll be doomed to repeat this over and over again until they are.
Monday
COMPETITION WITH THE GOVERNMENT?
Last Saturday many concerned Americans watched in horror as the House passed the healthcare reform bill. If this bill makes it through the Senate, it would massively overhaul the way healthcare is delivered in this country. Today, obviously, we don’t have a perfect system, but this legislation takes all the mistakes we are making with healthcare and makes them worse. Most of what is wrong with healthcare stems from decades of government intervention and the resulting unintended consequences.
But the government’s prescription for the ills caused by intervention is always more intervention. We see this not only in healthcare policy, but also in foreign policy, in economic policy, and in monetary policy - basically, in all areas of public policy. It was even claimed that the House bill would increase competition in healthcare, and thereby improve the private sector’s business model for insurance.
It is fascinating that politicians would use the language of the free market in this way to justify more corporatism. This demonstrates a couple of things. One, that politicians truly do not understand the very basic tenets of a free market. By definition, a free market is free from government intervention. But once a little intervention is accepted as legitimate, politicians will blame the problems created by their intervention on the free market and present themselves as saviors that must intervene even more.
It also demonstrates that politicians know that Americans still believe the free market is a good thing. People know and understand that competition among businesses is better for the consumer than a monopoly. However, competition between a private business and a government or government-favored entity is not real competition.
In real competition, your competitor can go bankrupt if they do a bad job. Everyone knows a government program is forever, no matter how poorly it performs. In real competition, efficiency is necessary for survival. In government programs, waste is rewarded as budgets are often determined by how much money a department is able to consume in a year. In real competition, one business does not have regulatory or taxation authority over its competitors. In real competition, businesses get sued and punished for breaking contracts and defrauding people, and are kept accountable in this way. But just try to sue the government when you are unjustly harmed by it!
The reason real competition is a good thing is because good businesses get bad ones out of the consumer’s way. Can the government put someone out of business? Most certainly! But it will have the opposite effect: an otherwise good business will be replaced by a poorly performing government agency, or a government-favored monolithic business that behaves almost like a government agency.
If Washington really wanted to give consumers more choices they would remove legislative and regulatory barriers to competition across state lines for health insurers. They would remove barriers for new and innovative models of healthcare and tort reform. They wouldn’t have run so many church and charitable hospitals out of business. Washington is keenly interested in healthcare reform, but it is certainly not going to increase competition or to expand your options for healthcare.
But the government’s prescription for the ills caused by intervention is always more intervention. We see this not only in healthcare policy, but also in foreign policy, in economic policy, and in monetary policy - basically, in all areas of public policy. It was even claimed that the House bill would increase competition in healthcare, and thereby improve the private sector’s business model for insurance.
It is fascinating that politicians would use the language of the free market in this way to justify more corporatism. This demonstrates a couple of things. One, that politicians truly do not understand the very basic tenets of a free market. By definition, a free market is free from government intervention. But once a little intervention is accepted as legitimate, politicians will blame the problems created by their intervention on the free market and present themselves as saviors that must intervene even more.
It also demonstrates that politicians know that Americans still believe the free market is a good thing. People know and understand that competition among businesses is better for the consumer than a monopoly. However, competition between a private business and a government or government-favored entity is not real competition.
In real competition, your competitor can go bankrupt if they do a bad job. Everyone knows a government program is forever, no matter how poorly it performs. In real competition, efficiency is necessary for survival. In government programs, waste is rewarded as budgets are often determined by how much money a department is able to consume in a year. In real competition, one business does not have regulatory or taxation authority over its competitors. In real competition, businesses get sued and punished for breaking contracts and defrauding people, and are kept accountable in this way. But just try to sue the government when you are unjustly harmed by it!
The reason real competition is a good thing is because good businesses get bad ones out of the consumer’s way. Can the government put someone out of business? Most certainly! But it will have the opposite effect: an otherwise good business will be replaced by a poorly performing government agency, or a government-favored monolithic business that behaves almost like a government agency.
If Washington really wanted to give consumers more choices they would remove legislative and regulatory barriers to competition across state lines for health insurers. They would remove barriers for new and innovative models of healthcare and tort reform. They wouldn’t have run so many church and charitable hospitals out of business. Washington is keenly interested in healthcare reform, but it is certainly not going to increase competition or to expand your options for healthcare.
Wednesday
FROM RON PAUL
On the Green Zone in Iraq:
“That’s where our military lives high on the hog. That’s where they have tennis courts and swimming pools and alcohol. And the Muslims, who now are starting to feel like maybe they have something to say about this, said no more alcohol in the Green Zone. And one of our officers said, ‘Well, it looks like we might as well go home.’”
On the healthcare reform package
“[It is] to take from one group and give to another. They call it free, of course. Of course, you know there is no such thing as anything really coming free, especially from the government. The government can only take from one group and give to another.”
On Austrian economics and the free market
“I would say that if we want to live in a free society … we should study Austrian economics, understand how it works and understand why it’s in the best interest of the people to believe in free markets because that’s where you get the greatest amount of prosperity and the best distribution no matter what they tell you about how much government you need to make it in their system.”
On individual liberty
“When it comes to individual liberty such as personal habits and how you spend your life and your time, sexual lives, gambling lives and all kinds of things that you might do personally, but it is always you that you’re hurting. There are some people who say ‘No, you can’t do that. We want to tell you exactly what’s going to make you a better person.’ So then another gang from Congress and Washington and politicians come in and say ‘A-ha! We’re going to make you a better person, we’re going to regulate your habits and regulate all your lifestyles. We’re going to regulate what you smoke and what you drink and everything else because you’re not smart enough to do that.’”
On wearing motorcycle helmets
“I think it’s a pretty good idea to wear a [motorcycle] helmet, but I would hope to think that people are smart enough to figure that out. But the reason you have to wear a helmet now is that you end up in the emergency room, it might cost some more and therefore the nanny state says you lose your personal choice.”
On ‘Cash for Clunkers’
“You’re taking the cars away from the poor people who might be able to buy them. And it turns out that most of the cars that were trashed were American cars and they all ended up buying foreign cars. It makes no sense. I would say that we as a people dealing with our own money can do a much better job.”
On the stimulus package
“Why couldn’t we have just suspended, at least, the income tax? Say ‘OK, folks, go to work and you don’t have to pay any taxes for the next two years’… It would have been a bigger stimulus … I think that would have been a much better way of dealing with it.”
On a dollar crisis
“Can you imagine what’s going to happen when there’s a dollar crisis and we’re in the midst of the dollar rapidly depreciating? That is big stuff."
On foreign policy
“We have a terrible choice in our foreign policy. We have two choices: we go to a country and they do exactly as we tell them and they’re obedient [then] we give them a lot of money. But if they don’t do it we send over the bombs. And I say there’s a third option: why don’t we just mind our own business and get along.”
On democracy
“[They say] we have to spread democracy -- even if it’s through the barrel of a gun. But democracy sometimes is a questionable decision to hold because democracy sometimes can backfire on you and when the majority becomes the dictator and takes away your rights it’s not such a great idea.”
On capitalism
“People say ‘Ahhh, this is proof capitalism failed.’ But I tell you what, that’s one argument we better learn how to refute. Because the free market hasn’t failed. I don’t particularly like the word ‘capitalism.’ I like to use the word [sic] ‘free market.’ Free markets haven’t failed.”
“That’s where our military lives high on the hog. That’s where they have tennis courts and swimming pools and alcohol. And the Muslims, who now are starting to feel like maybe they have something to say about this, said no more alcohol in the Green Zone. And one of our officers said, ‘Well, it looks like we might as well go home.’”
On the healthcare reform package
“[It is] to take from one group and give to another. They call it free, of course. Of course, you know there is no such thing as anything really coming free, especially from the government. The government can only take from one group and give to another.”
On Austrian economics and the free market
“I would say that if we want to live in a free society … we should study Austrian economics, understand how it works and understand why it’s in the best interest of the people to believe in free markets because that’s where you get the greatest amount of prosperity and the best distribution no matter what they tell you about how much government you need to make it in their system.”
On individual liberty
“When it comes to individual liberty such as personal habits and how you spend your life and your time, sexual lives, gambling lives and all kinds of things that you might do personally, but it is always you that you’re hurting. There are some people who say ‘No, you can’t do that. We want to tell you exactly what’s going to make you a better person.’ So then another gang from Congress and Washington and politicians come in and say ‘A-ha! We’re going to make you a better person, we’re going to regulate your habits and regulate all your lifestyles. We’re going to regulate what you smoke and what you drink and everything else because you’re not smart enough to do that.’”
On wearing motorcycle helmets
“I think it’s a pretty good idea to wear a [motorcycle] helmet, but I would hope to think that people are smart enough to figure that out. But the reason you have to wear a helmet now is that you end up in the emergency room, it might cost some more and therefore the nanny state says you lose your personal choice.”
On ‘Cash for Clunkers’
“You’re taking the cars away from the poor people who might be able to buy them. And it turns out that most of the cars that were trashed were American cars and they all ended up buying foreign cars. It makes no sense. I would say that we as a people dealing with our own money can do a much better job.”
On the stimulus package
“Why couldn’t we have just suspended, at least, the income tax? Say ‘OK, folks, go to work and you don’t have to pay any taxes for the next two years’… It would have been a bigger stimulus … I think that would have been a much better way of dealing with it.”
On a dollar crisis
“Can you imagine what’s going to happen when there’s a dollar crisis and we’re in the midst of the dollar rapidly depreciating? That is big stuff."
On foreign policy
“We have a terrible choice in our foreign policy. We have two choices: we go to a country and they do exactly as we tell them and they’re obedient [then] we give them a lot of money. But if they don’t do it we send over the bombs. And I say there’s a third option: why don’t we just mind our own business and get along.”
On democracy
“[They say] we have to spread democracy -- even if it’s through the barrel of a gun. But democracy sometimes is a questionable decision to hold because democracy sometimes can backfire on you and when the majority becomes the dictator and takes away your rights it’s not such a great idea.”
On capitalism
“People say ‘Ahhh, this is proof capitalism failed.’ But I tell you what, that’s one argument we better learn how to refute. Because the free market hasn’t failed. I don’t particularly like the word ‘capitalism.’ I like to use the word [sic] ‘free market.’ Free markets haven’t failed.”
Tuesday
HEALTHCARE REFORM IS ECONOMIC MALPRACTICE
As Washington continues debating healthcare reform the rest of the country is primarily concerned about jobs and the economy. It is still uncertain what policies will be implemented, but I am certain about one thing: It will only further devastate our economy and our dollar.
The leadership has come up with a proposal they are confident will be what they consider fiscally responsible, only to have it scored as nearly twice as expensive by the nonpartisan Congressional Budget Office. Estimates of past healthcare spending programs have been off by as much as 100 percent so there is no telling what the actual cost will be.
The past century should have taught us one thing: that government intervention is expensive. Government programs lend themselves so easily to waste, fraud and abuse. Combine that with overall inefficiency and it all adds up to a hefty price tag for the taxpayer, with not much leftover for actual services. An outright takeover of an entire sector of the economy, especially one as important as healthcare, is something that we just cannot afford for the government to do right now. Not to mention the fact that it is completely unconstitutional. But Washington insists on torturing the numbers and tinkering around the edges rather than facing this truth. If healthcare reform does indeed pass, we should not be under the illusion that it will be free. The money to pay for it will have to come from somewhere. They say they will get the money from cutting waste, fraud and abuse, but all of that is seemingly intrinsic to government programs. Since they want to expand the government’s reach we have to assume we will be trading waste, fraud and abuse for waste, fraud and abuse with a bigger budget. The powers that be have insisted the money won’t come from higher taxes, it won’t come from rationing of care, and it won’t come from higher premiums. This can only then put more pressure on the Fed to print the money out of thin air. We already have a weakening dollar. They are accelerating everything that weakened it in the past. Adding this new, monumental pressure could very well be the straw that will break the dollar’s back.
Foreign creditors are already nervous about continuing to invest in the US because of our skyrocketing debt. The explosion of debt that is certain to accompany the enactment of this national health care bill can only add to that nervousness.
Ironically, enactment of the health care bill could help the cause of liberty by hastening the day when Congress is forced by economic circumstances to stop increasing the welfare-warfare state and return to the Constitution.
There are many problems with our current healthcare system, to be sure. There are many tragic stories to be told. However, we need to look at the root of our problems in order to address them properly. More government intervention and bureaucracy injected into healthcare will take a flawed system and make immeasurably worse.
The leadership has come up with a proposal they are confident will be what they consider fiscally responsible, only to have it scored as nearly twice as expensive by the nonpartisan Congressional Budget Office. Estimates of past healthcare spending programs have been off by as much as 100 percent so there is no telling what the actual cost will be.
The past century should have taught us one thing: that government intervention is expensive. Government programs lend themselves so easily to waste, fraud and abuse. Combine that with overall inefficiency and it all adds up to a hefty price tag for the taxpayer, with not much leftover for actual services. An outright takeover of an entire sector of the economy, especially one as important as healthcare, is something that we just cannot afford for the government to do right now. Not to mention the fact that it is completely unconstitutional. But Washington insists on torturing the numbers and tinkering around the edges rather than facing this truth. If healthcare reform does indeed pass, we should not be under the illusion that it will be free. The money to pay for it will have to come from somewhere. They say they will get the money from cutting waste, fraud and abuse, but all of that is seemingly intrinsic to government programs. Since they want to expand the government’s reach we have to assume we will be trading waste, fraud and abuse for waste, fraud and abuse with a bigger budget. The powers that be have insisted the money won’t come from higher taxes, it won’t come from rationing of care, and it won’t come from higher premiums. This can only then put more pressure on the Fed to print the money out of thin air. We already have a weakening dollar. They are accelerating everything that weakened it in the past. Adding this new, monumental pressure could very well be the straw that will break the dollar’s back.
Foreign creditors are already nervous about continuing to invest in the US because of our skyrocketing debt. The explosion of debt that is certain to accompany the enactment of this national health care bill can only add to that nervousness.
Ironically, enactment of the health care bill could help the cause of liberty by hastening the day when Congress is forced by economic circumstances to stop increasing the welfare-warfare state and return to the Constitution.
There are many problems with our current healthcare system, to be sure. There are many tragic stories to be told. However, we need to look at the root of our problems in order to address them properly. More government intervention and bureaucracy injected into healthcare will take a flawed system and make immeasurably worse.
BE PREPARED FOR THE WORST
Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession.
A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.
Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.
This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?
What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.
Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.
The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.
A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. The economy and stock market seemed to be recovering, and there was optimism that the recession, like many of those before it, would be over in a year or less. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones industrial average did not recover to 1929 levels until 1954. I fear that our stimulus and bailout programs have already done too much to prevent the economy from recovering in a natural manner and will result in yet another asset bubble.
Anytime the central bank intervenes to pump trillions of dollars into the financial system, a bubble is created that must eventually deflate. We have seen the results of Alan Greenspan's excessively low interest rates: the housing bubble, the explosion of subprime loans and the subsequent collapse of the bubble, which took down numerous financial institutions. Rather than allow the market to correct itself and clear away the worst excesses of the boom period, the Federal Reserve and the U.S. Treasury colluded to put taxpayers on the hook for trillions of dollars. Those banks and financial institutions that took on the largest risks and performed worst were rewarded with billions in taxpayer dollars, allowing them to survive and compete with their better-managed peers.
This is nothing less than the creation of another bubble. By attempting to cushion the economy from the worst shocks of the housing bubble's collapse, the Federal Reserve has ensured that the ultimate correction of its flawed economic policies will be more severe than it otherwise would have been. Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?
What is more likely happening is a repeat of the Great Depression. We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years. As the housing market fails to return to any sense of normalcy, commercial real estate begins to collapse and manufacturers produce goods that cannot be purchased by debt-strapped consumers, the economy will falter. That will go on until we come to our senses and end this wasteful government spending.
Government intervention cannot lead to economic growth. Where does the money come from for Tarp (Treasury's program to buy bad bank paper), the stimulus handouts and the cash for clunkers? It can come only from taxpayers, from sales of Treasury debt or through the printing of new money. Paying for these programs out of tax revenues is pure redistribution; it takes money out of one person's pocket and gives it to someone else without creating any new wealth. Besides, tax revenues have fallen drastically as unemployment has risen, yet government spending continues to increase. As for Treasury debt, the Chinese and other foreign investors are more and more reluctant to buy it, denominated as it is in depreciating dollars.
The only remaining option is to have the Fed create new money out of thin air. This is inflation. Higher prices lead to a devalued dollar and a lower standard of living for Americans. The Fed has already overseen a 95% loss in the dollar's purchasing power since 1913. If we do not stop this profligate spending soon, we risk hyperinflation and seeing a 95% devaluation every year.
Monday
WHAT I THINK......BOB IVRY
Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.
The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff.
The Fed, led by Chairman Ben S. Bernanke, has come under greater congressional scrutiny while attempting to end the financial crisis by bailing out financial firms and more than doubling its balance sheet to $2.16 trillion in the past year. The central bank is also buying $1.25 trillion of securities tied to home loans.
Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.
Keith Kelly, a spokesman for Watt, declined to comment and said Watt wasn’t immediately available for an interview. Watt’s district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.
Original Language
Paul said he intends to introduce an amendment to the bill when it comes to the House floor for a vote restoring the legislation’s original language.
Representative Barney Frank, a Democrat from Massachusetts and chairman of the committee, said in interview that he intends to ensure legislation would provide a time lag between FOMC actions and the reporting of them.
Such a provision would “lessen the market impact,” he said on Oct. 20. “The importance is to see that there are no abuses and to judge what they did.”
The legislation will probably be included in a broader Democratic package of financial-regulation changes in the House, Frank said.
The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff.
The Fed, led by Chairman Ben S. Bernanke, has come under greater congressional scrutiny while attempting to end the financial crisis by bailing out financial firms and more than doubling its balance sheet to $2.16 trillion in the past year. The central bank is also buying $1.25 trillion of securities tied to home loans.
Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.
Keith Kelly, a spokesman for Watt, declined to comment and said Watt wasn’t immediately available for an interview. Watt’s district includes Charlotte, headquarters of Bank of America Corp., the biggest U.S. lender.
Original Language
Paul said he intends to introduce an amendment to the bill when it comes to the House floor for a vote restoring the legislation’s original language.
Representative Barney Frank, a Democrat from Massachusetts and chairman of the committee, said in interview that he intends to ensure legislation would provide a time lag between FOMC actions and the reporting of them.
Such a provision would “lessen the market impact,” he said on Oct. 20. “The importance is to see that there are no abuses and to judge what they did.”
The legislation will probably be included in a broader Democratic package of financial-regulation changes in the House, Frank said.
GOVERNMENT STATISTICS AND LIES
There has been a lot of talk in Washington recently about senior citizens, mostly about how various healthcare reform models would help or hurt them. But there is another critical issue that has quietly devastated seniors financially over the last few decades. It concerns how the cost of living is calculated. How does the administration justify not giving a cost of living increase to Social Security recipients this year?
According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased – by roughly 5 percent!
The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians’ discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.
For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.
I have introduced legislation to keep politicians in Washington from ever raiding the Social Security trust fund again. HR 219 The Social Security Preservation Act would assure that all monies collected by the Social Security Trust Fund would only be used in payments to beneficiaries, or be placed in interest bearing certificates of deposit. This would at least stop the bleeding of the fund, and take away some incentive to tease and torture the numbers in order to give seniors the minimal amount. This would also cut off a source of funding for government growth, so it is not likely to get easy support from many politicians.
It is bad enough that Washington imposes high payroll taxes on American workers. The least Congress could do is use the tax dollars for their stated purpose. Instead, seniors will have a harder and harder time trying to survive on a fixed income in an economy based on variables and deception. For them, it is too late to start over. Today’s young people will be forced to pay into the system for years to come. The first step towards solving the impending crisis facing Social Security is to stop politicians from raiding the trust fund and to significantly cut federal government spending.
According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased – by roughly 5 percent!
The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians’ discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.
For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.
I have introduced legislation to keep politicians in Washington from ever raiding the Social Security trust fund again. HR 219 The Social Security Preservation Act would assure that all monies collected by the Social Security Trust Fund would only be used in payments to beneficiaries, or be placed in interest bearing certificates of deposit. This would at least stop the bleeding of the fund, and take away some incentive to tease and torture the numbers in order to give seniors the minimal amount. This would also cut off a source of funding for government growth, so it is not likely to get easy support from many politicians.
It is bad enough that Washington imposes high payroll taxes on American workers. The least Congress could do is use the tax dollars for their stated purpose. Instead, seniors will have a harder and harder time trying to survive on a fixed income in an economy based on variables and deception. For them, it is too late to start over. Today’s young people will be forced to pay into the system for years to come. The first step towards solving the impending crisis facing Social Security is to stop politicians from raiding the trust fund and to significantly cut federal government spending.
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