February 2009

Flameout

by Bill O'Connell on February 27, 2009

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Something We Can All Look Forward To

President Obama announces His Budget Plan and the Stock Market Craters

President Obama got his $800 billion stimulus package off the launching pad and now we eagerly await the massive stimulus to come when people start seeing their taxes reduced in April by $8-$16 per week.  Stand back, the crowds could be euphoric and out of control.

With the ink barely dry on that package, President Obama rolls out the next attack on future generations of Americans.  His plan calls for the addition of debt so staggering that it may destroy the U.S. economy.  How long before the additional interest on the national debt starts growing so fast that we cannot pay it, let alone the principal?  In his budget he plans to add half a trillion to the national debt every year, and all of this is with some very rosy forecasts of 5% and 6% GDP growth.  Will someone please tell the rookie, that when you slam the most productive earners with more taxes, they tend to react by producing less.

“The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.”

The Reagan policies produced 25 years of unprecedented growth.  So the inexperienced President Obama is going to undo this because…?  The Democrats love to point to the economy during the Clinton years, but you have to look a bit more closely.  During the first two years of the Clinton’s time in office the economy was basically flat.  The economy didn’t really start moving until 1995.  What coincided with that?  Oh, yeah, the Republicans took control of Congress.  Taxes were cut and the economy took off like a rocket.

If you look at the term of George W. Bush, after 9/11 and the recession he inherited, he again cut taxes and the economy took off.  The stock market didn’t start it’s downward spiral until about six months into 2007.  What coincided with that?  Oh, yeah, the Democrats took control of Congress.  Coincidence?  You decide.

So now we have the new president deciding to trash the policies that have successfully grown the economy under Reagan, Clinton, and Bush.  At the same time he is going to saddle future generations with massive debt on top of a looming Social Security and Medicare bill coming due.

I consider myself an optimist, but for the first time in my life I am actually fearful that one man could destroy the U.S. economy in his first 100 days and rush this in under the guise of an emergency, where there is no debate, no time to read what is getting put into law, just slam it in and trust the the most inexperienced president in the last century that it will be all right.  Do you feel better now?

Can We Dump this Canard Over the Side?

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years.

This economic inequality hogwash is dishonesty at it’s peak.  The so-called economic inequality is a sign of the success of the economy.  Think about it, the economy has a floor but not a ceiling.  That is, your income cannot go below zero, but there is no limit to how high it can grow.  So as incomes rise higher and higher, yes, they are going to move further from zero.  This is like saying that air travel is worse today than when the Wright Brothers flew because planes fly higher now than they did in 1903!  So let’s pass a law that says airplanes can’t fly higher than 2,000 feet so we don’t have a great inequality in altitudes.

There is nothing stopping anyone from having that high income if they work hard, use their talents, and succeed.  America is not about punishing the successful.  Many who start out at the bottom move up.  Many who came here as immigrants start at the bottom.  If the Democrats want to improve the numbers, let them control the illegal immigration that is probably inflating the numbers on the bottom.  Let’s stop turning success into failure.  How many people would like to be like Bill Gates?  How many people think America would be better off if we were all like Willy Loman?

The Big Flameout

The Productive Ones Set Sail to More Favorable Tax Climates

Let’s suppose for a moment that the stimulus works and the economy takes off.  With what President Obama has in the works, and the massive taxes that he plans to impose on the top earners, and the carbon taxes he plans to levy on businesses that weill be passed along to the consumers in higher prices (there goes your $8 tax break), and the masive debt he is loading on future generations, the stimulus will soon flameout, and a bigger recession will follow.  This time we won’t able to borrow and spend our way out of it.  Tax cuts won’t matter because there will be no one earning anything to tax.  The wealthy will have packed up and moved to more favorable tax climates and Barack Obama’s historic presidency will have flamed out as well.

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The Greedy Hand

by Bill O'Connell on February 26, 2009

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“A surplus became an excuse to transfer wealth to the wealthy” — President Barack Obama, Feb. 24, 2009

There you have the liberal philosophy in a nutshell.  Transfer wealth to the wealthy?  Transfer from whom to the wealthy?  The government?  The context of this question came regarding taking more in taxes from the wealthy to pay for all the new goodies, Obama and Pelosi are handing out, by letting the Bush tax cuts expire.  But what really happens with a tax cut?  It basically means that an individual gets to keep more of their own money that they have earned. After all it is the income tax. So where is the wealth transfer Obama speaks of?  Is President Obama really trying to say that everything we earn belongs to the federal government and that by letting us keep any of it, it is a transfer of wealth from the rightful owner, the government, to the unworthy and greedy individual?  If that’s not straight out of Karl Marx, I don’t know what is.

“Tax cuts alone can’t solve all of our economic problems — especially tax cuts that are targeted to the wealthiest few.”  — Obama, Feb. 24, 2009

This is his other gem.  What tax cuts were targeted to the rich?  The fundamental difference between liberals and conservatives regarding tax policy is the same difference throughout their respective philosophies.  Liberals believe in groups, conservatives believe in individuals.  Perhaps that is why President Obama is so confused.

Conservative tax policy is that a tax cut should apply to all individuals who pay taxes.  By reducing the tax burden there is an incentive to invest and grow the economy.  If you make more you get to keep more.  At the same time, under Bush, many low income people were removed from the tax rolls altogether.

Liberal tax policy, like all of their policies, depends on to which group you belong.  If you are in a group that has a low income, you have to get something, so you get tax money whether or not you pay taxes (aka welfare).  If you are in a group, that has a high income, regardless of how much of the tax burden you are already carrying, not only do you get nothing, you have to pay more.  That’s targeting.  The Bush tax cuts were not targeted they applied across the board.  We’re all Americans, we all get a break.  Even after the Bush tax cuts, the wealthiest Americans carried a larger share of the total tax burden than before the cuts, but that is not enough for the liberals.  They want it all, but they’ll settle for as much as they can get away with.

We Need a Dose of Honesty

The more President Obama speaks, the less honest he is with the American people.  He makes statements like the above that are misleading at best, outright lies at worst.  He does not include the role of government in creating the economic mess we are in, when he speaks of how we got here.  Without addressing the role of government, what they did wrong cannot be fixed, and just like if you ignore a leak in your roof, it’s not going to get better over time.

President Obama promised a new beginning in Washington, but so far he is selling the same old tired ideas, brightly dressed up in his impressive oratory.  It is only he has left the stage and the lights have dimmed that people start scratching their head and wondering, “Did he really say that?”

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Washington Madness

by Bill O'Connell on February 26, 2009

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American Citizen Learning of the Latest Spending Bill

How does one find the words to describe the complete and utter disconnect between the American people and their so-called representatives in Washington?  Mere days after passing an enormous $800 billion spending bill, Congress fires up another $400 billion worth of spending as a follow-on.  To their credit, at least this time they didn’t try to hide the 9,000 earmarks of pork in the bill.

Open Bar

"I think I'll have a double earmark"

It seems as if someone just shouted “Open Bar” and the members of Congress are trying wrap their sweaty fists around as many drinks as they can carry.  They slam down the libations, and then head back to the bar for more.  The frenzy is out of control.  As any drunk knows, the first thing that you lose when you start drinking is your inhibition to drink more.

This new spending bill includes an increase in 8% in spending over last year.  There is currently no inflation. ZERO.  Prices are actually falling.  So any sober person would think that if you spent the same amount this year as last, you could buy more just because of lower prices.  So while every American is trying mightily to make ends meet, Congress is spending our money like drunken sailors.  Since she probably knew what was in the bill on Tuesday night, it explains why Nancy Pelosi kept popping out of her chair like a crazed jack-in-the-box during President Obama’s speech.  I thought maybe she sat on a tack, but in reality she couldn’t control her glee at being able to spend our money without any adult Republicans around to say, “NO, bad girl!”

Can Two Years of Unbridled Damage Be Rolled Back?

The only question seems to be just how much damage can they do in two years before Americans go back to the polls?  Can the damage be undone?  Or are there enough members of Congress who still want to be there after 2010 so that they might start listening to the people who sent them there when they say, “Knock it off!”

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Obama Speaks, The Market Sinks

by Bill O'Connell on February 25, 2009

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Can we please get this guy off the stage before my IRA is completely worthless?  We had a break from him yesterday and the markets rose and then he goes on national television last night re-emphasizing how he was going to tax and spend and in 30 minutes the market is down 130 points.  The market has fallen over 2,000 points since he was elected.

President Obama insists that we need to squeeze more out of the productive people in this country, after all they became rich by creating wealth, jobs, companies, innovations, etc.  Obama’s idea of a “good” tax cut is $8 a week for 95% of Americans.  $8 a week will buy exactly what?  It won’t by the RVs that the people in Elkhart, Indiana make where Obama made one of his pitches for the stimulus package.

Nancy Pelosi looked like a grinning jack-in-the-box last night popping up with every other sentence to applaud the President’s speech.  I don’t know about you, but to me that’s a dead giveaway, we’re in trouble.  After loading up the stimulus bill with pork and ramming it through before anyone could read it (but President Obama didn’t see the urgency to sign it for four more days), you can see she is thrilled to have the opportunity to offer up more spending.  The new spending bill that is about to be released is reported to include 9,000 EARMARKS!!! Haven’t we spent enough?  This is beyond out of control.  Nancy Pelosi cannot control her glee at how easily she is putting this all past the American people.

But the bill will be coming due, and it won’t be Nancy Pelosi who pays it.  It will be you and me, and she will laugh all the way to her retirement with her millions.

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Obama’s 800 Pound Gorilla

by Bill O'Connell on February 24, 2009

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Honest Barack?

Unless and until President Obama is willing to recognize that government has played a significant role in the economic mess we are in, the solution to the problem will be beyond his grasp.  In mentioning the causes of the current economic problem he lists greedy banks, predatory lenders and he even is willing to admit there are irresponsible people who bought houses that they could never afford.  But President Obama refuses to admit or mention the creation of Fannie Mae under Roosevelt (D); moving Fannie Mae off the books of the federal government under Johnson (D); the creation of the Community Reinvestment Act under Carter (D) to push more lending in poor neighborhoods; the further push for more low income lending with threats from the government under Attorney General Janet Reno in the Clinton (D) administration; the refusal to put in place more regulation of Fannie Mae by Barney Frank (D), Christopher Dodd (D), and a threatened filibuster of Fannie Mae reform by, yes, Senator Barack Obama (D).

He repeatedly talks about the deficit he inherited, but doesn’t admit how he doubled down and maybe tripled down on that deficit and based on his speech to Congress tonight, he isn’t even close to starting to spend.  It’s time for him to accept responsibility for his actions.

Until he is willing to honestly put all the cards on the table, and all the players who are responsible both Republicans and Democrats, the problem cannot be adequately addressed nor solved.  He cannot hide the source of a major part of the problem and expect to fix the problem once and for all.  By giving those bad actors a pass, they will be able to repeat their mistakes again and again and put us in this mess in the future.

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Bipartisanship Begins At Home

by Bill O'Connell on February 24, 2009

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New York, like many states, is in the midst of a state budget crisis.  The state is facing a $14 billion budget deficit.  The cause of the problem is pretty clear, too much spending.  State spending has grown far in excess of inflation and population growth.  What provided the wallop is the sharp downturn on Wall Street, which drastically cut revenues to the state.  But the state does not have any reserves to speak of.

We’re All in This Together, Right?

Everyone is being asked to tighten their belts.  The Democrats had previously held the State Assembly and now control both houses of the legislature and the governorship.  Among the strongest supporters of the Democrats in this very blue state are the labor unions.  They wholeheartedly support the spending increases that the Democrats propose every year especially where those increases shower wages and benefits on their members.

So while the Democrats, with no place to hide, are scrambling to close the budget gap why do I see commercial after commercial on television urging me to tell the governor and the legislature to make the necessary cuts elsewhere and not to touch their sacred cow.  The commercials are from the police unions, the teacher unions, the health care worker unions, the university professor unions, the public employee unions, all urging us to rise up and make sure the cuts are not directed at them.

Chutzpah

After years and years of spending increases under both Republicans and Democrats, and year after year of fat labor contracts for these unions because the politicians were too cowardly to confront them or turn down their money and electoral support, we are now in this mess.  But now instead of shouldering their share of the burden, some of which was a result of their greed, they are telling their fellow New Yorkers to take on more of the pain and spare them.  How about a little bipartisanship on behalf of the unions and suck it up and help your fellow New Yorkers carry the load you created.

Where’s Ronald Reagan when you need him?

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Hope and Change = Tax and Spend. Oh, Well

by Bill O'Connell on February 23, 2009

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Goodbye Liberty

The cat is finally out of the bag.  President Obama, after passing a huge spending increase, proposed cutting the budget deficit in half by the end of his current term primarily by raising taxes and cutting defense spending.  This is the same old tired liberal policies that brought us the economic morass of Jimmy Carter, the unpreparedness to deal with al Qaeda under Clinton, and now in the midst of a deep recession, President Obama wants to spend more and tax more.

Just when we need to move more money into the private economy, President Obama wants to take out his Hoover vacuum cleaner and suck up whatever cash he can find and hoard it in Washington.

The real problem is government has gotten too big, too wasteful, too profligate, and too out of touch with the American people.  Instead of the original vision of the founding fathers of limited federal government, pretty soon your lives will be directed by four people:  your Congressman/Congresswoman, your two US Senators, and the President.  All local government will become irrelevant.  You can see the beginnings of it now.  We have the federal government paying for local roads, local schools, local police, local unemployment.  And you can also see the power plays:  you do the will of the federal government or you get no money.  The federal government takes your money in the form of taxes and will refuse to give it back unless you follow their liberal agenda.

Goodbye Liberty.

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Surprise! Smaller Class Sizes Haven’t Improved Education

by Bill O'Connell on February 22, 2009

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But while state legislatures for decades have passed laws — and provided millions of dollars — to cap the size of classes, some academic researchers and education leaders say that small reductions in the number of students in a room often have little effect on their performance.  — New York Times, Feb. 22, 2009

Well shut my mouth!  School taxes have been growing at an extraordinary rate and at the same time a high school graduate comes in for a job interview who cannot even put together a comprehensible sentence.  We created a federal Department of Education that since it’s inception has spent over $1.3 trillion dollars, with improvements in education that are marginal at best.

What happened?

This has not been an effort to improve education.  If you cut the size of the class in half, you have to double the number of teachers.  This has been a jobs program for the teachers’ union and the Democrats have wholly supported it because the teacher’s unions are in the Democratic camp.  Once again we have our government conspiring to empower themselves at the expense of the American people.

When I went to K-12 school, my classroom was typically 28-33 students.  My friends who went to Catholic school had some classes that numbered 50 students in a class.  I learned, they learned.  You would think that cutting class sizes in half would double academic performance or better.  If not, why on earth would you do it?  Why would you spend twice as much on teachers, since compensation is typically 80% of a school’s budget, if you were only going to get a 10% improvement in performance?  If that is the extent of the return, you would probably look elsewhere such as in techniques or methods.

The Collapse of Discipline and the Supremacy of Self Esteem

I submit the reason for the lack of educational performance is lack of discipline.  If a teacher can’t control their classroom, no one learns.  The marginal improvement in performance with reduced class size is not because they are a significantly better learning environment, but because you have reduced the teacher’s span of control.  Why can a class of 50 students in Catholic School still learn?  Because when the nun snapped her finger, everyone came to attention.  Everyone wore uniforms.  Everyone paid tuition.  If you got out of line, the nuns would put you back in line, pronto.  If the nuns weren’t able to put you back in line, either your parents would or you would get bounced out of school. With a 50% drop out rate in the City of New York, John Cardinal O’Connor asked the mayor of New York to give him the bottom 10% of the students in the New York City school system and he would educate them.  The mayor declined.

The other half of the problem is the focus on making sure everyone always feels good about themselves.  When my daughter was three years old she got a trophy for playing soccer, not for outstanding performance, but just for playing.  The trophy was almost as tall as she was.  I asked, “What do they get if they actually achieve something?  A car?”.  I played Little League baseball because I loved baseball.  When I got a paper certificate it was for making the All Star team or the World Series.

Today, in a relatively affluent school district I see about a dozen yellow jacketed security guards when I go to my children’s school.  We never had security guards at our school and I grew up in a less affluent district.  “Well, you can never tell, you know, with Columbine and everything.”  People talk about Columbine and say it’s because of those kids had access to guns.  Well kids have had access to guns since the Mayflower.  Why did it take until 1999 for Columbine to occur?  I believe it is because we are raising a generation of kids with eggshell egos.  If you tap them they crack.  That’s probably what happened to Klebold and Harris.  They didn’t know how to take a hit to the ego and bounce back.  They probably were never told, “Sorry, kid, you want the trophy you actually have to achieve something.”  Life’s little failures build character.  As Friedrich Nietzsche said, “That which does not kill us makes us stronger.”  But if mommy and daddy are always jumping in to make sure little Johnny never has a bad day, look out.

Low Cost Way to Improve Education

  1. Ditch the smaller class sizes.  The marginal improvement is not worth the cost.  Hire fewer teachers and lower school taxes.
  2. Re-institute discipline in classes.  Teachers shouldn’t be afraid of students.  Have the student’s wear uniforms, if the half-naked girls, and the boys walking with their pants around their knees are a distraction.
  3. Stop pampering the students.  To get a prize you actually have to achieve something.  That way you won’t have a mental breakdown the first time someone says no to you.
  4. You are not entitled to a “B” grade for showing up.  The teachers don’t give out grades, the student earn them.
  5. Close the Department of Education and put $1.3 trillion back into the economy in the form of lower taxes

We tried it their way for almost thirty years.  Why not give this approach a try for 30 years.  Oh, wait, we did try this for 360 years and it worked before we lurched off toward focusing on keeping Democrats in power rather than educating our children.

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The Innocent Bystander: Government

by Bill O'Connell on February 22, 2009

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Don't Anyone Dare Say Government Caused This Mess

You can never solve a problem if you do not face up to the full scope of the problem.  In listening to President Obama, and reading liberal columnists like Maureen Dowd, in the description of what caused the current economic calamity, the government is always given a pass.

We are in an economic morass because of the eight years of failed Bush policies, greed on Wall Street, tax breaks for the rich, etc.  Government’s culpability which, I believe, is really the gravamen of our economic problems is never mentioned at all.  Democrats and Liberals don’t dare point to Democrats and liberal policies as having anything to do with the collapsing economy.  That is why they always say that this is the worst economy since the Great Depression, as they also said when Clinton ran for President.  They don’t dare say it is the worst economy since Jimmy Carter, since that would remind the American people that the Democrats screwed up that one as well.

Unmentionable Causes of the Current Economic Mess

  • Fannie Mae and Freddie Mac out of control.  Explosive increases in debt taken on under the leadership of Franklin Raines (Democrat), and Jaime Gorelick (Democrat), remember she also gave us the firewall between the CIA and FBI that hamstrung the investigation of al Qaeda.  Raines made over $90 million while at Fannie Mae and at the same time was accused of overstating earnings by $10.6 billion.  So, where’s the demand for a clawback of Raines’s salary?
  • Barney Frank (Democrat) and Chris Dodd (Democrat) — Frank blocked every attempt to put in place greater regulation over Fannie Mae.  The Bush Administration tried to increase regulation over Fannie Mae, but Frank blocked it.  What you hear today is that the reason for the economic problems are a lack of regulation.  Chris Dodd got VIP mortgage treatment from Countrywide mortgage before they went belly-up.  Asked to come clean on the mortgages, Dodd first said sure, we’ll get around to it.  Then he made some papers available for viewing, but not copying, and has since clammed up.
  • Community Reinvestment Act — Carter (Democrat) administration program to push home ownership for low income people, by forcing banks to report how much they were offering loans in low income neighborhoods and face the consequences if it wasn’t enough.
  • Janet Reno (Democrat) — in the Clinton Administration Reno threatened action against financial institutions if they weren’t lending enough low income individuals.  What bank doesn’t want to be publicly branded a racist institution?

So we have homeowners, who should have never qualified for a mortgage, about to receive bailouts from all the responsible people who took mortgages they could afford, when they could afford them.  Do you ever hear about any of this cast of characters mentioned by President Obama or the main stream media? No.  It wasn’t the government actively pushing social policy on those people least able to handle it.  It was greedy banks and unscrupulous lenders, trying to avoid being branded racists, who took advantage of these poor ignorant people.  Perhaps if the government hadn’t destroyed our education system, these people might have read what they were about to sign.

How Do you Solve Only Half a Problem?

As these characters are never mentioned as having a role in the problem, how can you ever hope to fix the problem if these bad actors are still going about their business doing what caused the crisis and blaming everyone else.  President Obama demonstrates his inexperience more profoundly every day, seemingly making things up as he goes along.  That is not leadership and what we need now in times of crisis is leadership.  Obama has never shown the courage or willingness to take on his own party.  Without rooting out these characters and really fixing the whole problem, it will only happen again down the road.

What we need now is a leader.  Someone who actually has experience running the executive branch of a state.  Someone who is not afraid to take on the entrenched power of their own party and has succeeded in doing so.  Is there anyone out there who fits that bill?  Gee, that sounds like Sarah Palin.

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Is the Groundswell Starting?

by Bill O'Connell on February 20, 2009

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The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people — Amendment X, United States Constitution

“I’m Mad as Hell and I’m Not Going To Take It Any More”

That quote from the movie “Network” popped into my head as I read about a legislator in Oklahoma, calling for legislative support for the 10th Amendment to the Constitution.  It passed the state assembly unanimously.  So what does this mean?  The sponsor of the bill, State Senator Randy Brogdan, explains:

The “federal government has been putting the screws on (the states) a little tighter and tighter each year” along with unfunded mandates of varying sorts.

And each time this happens, Brogdon explained, “We lose a little bit of our freedom and liberty.”

The federal government has been growing enormously and taking on more and more things that used to be handled locally, such as education, and welfare.  Other programs have not changed as the economy has, for example, as the percentage of the population that farms has decreased dramatically has the Department of Agriculture shrunk accordingly?

You Must Obey!

The way the federal government works around this is by saying, okay, you don’t have to do what we tell you, but you will get no federal funding if you don’t.  It seems like a Catch-22, no?  Since the 16th Amendment, which authorized the income tax, the federal government can decide how much to tax incomes and there is little that the states can do about it.  They take money from your pocket under threat of imprisonment, and will give it back to you only if you comply with their rules.

How Do We Fix This One?

It may require a constitutional amendment to fix as the 16th Amendment says:

The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. — 16th Amendment to the Constitution

I’ll leave the legal mechanics to those better qualified, but I would propose the following.  That the federal budget shall include a breakdown of projected revenues derived from income taxes, broken down by source: individual, corporate, etc.  A state should then be allowed to refuse mandates and programs from, say, the Department of Education, and withhold from the IRS that proportion of tax dollars destined for the Department of Education from that state.

Certain departments should be deemed mandatory, such as Defense, State, Treasure, to name a few as these departments serve all citizens.

The legislation under consideration in Oklahoma will have little effect if the federal government can suck up as much money as it wants to from the states, via their citizens and then just keep the money if the states refuse to participate in the programs.  How do you determine which programs should be subject to the states discretion?  No money should flow from a state, to Washington, and then back to the state.  That is just plain stupid and wasteful, or a distribution of wealth, none of which is a government function. Paying for roads and infrastructure that does not cross state lines should be funded locally.  It is ridiculous that the federal government pays 90% of the cost of a highway that lies entirely within a city.  Look at the scandalous “Big Dig” in Boston.  Billions of dollars spent and parts of it are falling down.  Why should any of this be paid for by the people of Kansas, Oklahoma, Alaska, New York, Florida, et al.?

But the real answer is following the 10th Amendment.  It clearly states that the role of the federal government is spelled out in the Constitution.  If it’s not in the Constitution then that responsibility is left to the states or the people.  Show me where in the Constitution it says that the federal government is responsible for education.  It’s not in there and that department should be shut down tomorrow.

It’s Time to Rein the Monster In

The anger in the country is growing.  Those who acted responsibly are being told they have to bail out the irresponsible.  They are being told by “Buck a Day Biden” that it is their patriotic duty to pay higher taxes to help out.  Meanwhile half a dozen Obama appointees haven’t paid the taxes they owe, let alone paying more.  I give Biden the “Buck a Day Biden” moniker because that is how much this millionaire gives to charity.  He doesn’t want to spend his own money on charity, he wants the government to take your money to fund government programs to do that.

If you don’t think the anger is growing take a look at this.  Rick Santelli

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