When will our President come to the realization that the government does not have any money save that which is provided by its citizens?  If he understood that, he wouldn’t have said this:

“Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century,” Mr. Obama said at the White House.

Let me posit a translation: we shouldn’t borrow against our children’s future, so we should borrow against our children’s future.  And let me add another pet peeve and that is how the statists have redefined the word “invest”.  What they really mean is spend, but invest sounds so much more grown up.  However, most intelligent people understand invest to mean when you put your money into something with the belief you will get all your money back plus a premium.  You don’t invest in the stock market with the idea you will never see your money again and will subsequently put more money into it next year.  You invest in a house with the idea that you will sell it later for more money.  You don’t invest in a house if you expect it to go down in value.  But our elected representatives would have you believe that pouring money down a rat hole is an investment.

Immature and Irresponsible

Like a child caught standing over his mother’s prized china lying shattered on the floor, President Obama wants us to believe it’s not his fault, no, we are going to have trillion dollar plus deficits for the next ten years because of Bush and the Republicans.  He is one year into his presidency.  This is his budget, not Bush’s.  If he can’t handle the job he should resign and turn it over to, er, Biden?  Check that.  Perhaps he can just go watch television in the White House for the next three years and leave the rest of us alone.  Doing nothing would cause less damage than what he has planned.  He jacked up spending 24% and then “courageously” instituted a freeze on that spending for three years.  Think about it.  If I gave you a 24% raise on Monday and then came back on Friday and said, “Gee, I’m really sorry to have to do this, but times are really tough.  I’m going to have to freeze your new salary for the next three years.  Can you ever forgive me?”  Could you not burst out laughing?

We’re Going to Make Some Tough Decisions…Next Year

We are in a fiscal crisis, but don’t think for a moment you are going to see any tough decisions in an election year, particularly when so many Democrats are in danger of having to find jobs in the real world.  So this year is tough talk.  Next year we get busy!

Democrats or Republicans or maybe the Tea Party movement is going to have to act, sooner rather than later.  Here is how the federal government breaks down:

• Medicare and Medicaid — 33%
• Social Security — 21%
• Interest on the Debt — 8%
• Defense — 20%
• Non-Defense Discretionary — 18%

The first three items continue to grow with no signs of slowing and interest will really take off when the Fed stops the easy money program.  Defense can shrink as Iraq and Afghanistan stabilize, but not a lot as this is still job number one for the federal government.  So do you see the problem?  You can thank Democratic President Lyndon Baines Johnson for the first ticking time bomb above.  You can thank Democratic President Franklin Delano Roosevelt for the second ticking time bomb.  You can now thank President Barack Obama for what is becoming the third ticking time bomb and that is without his Health Care, and Cap and Trade.

So how is President Obama going to “solve” this problem?  By tinkering with the last item, Non-Defense Discretionary spending.  But don’t worry, he will also tax those evil rich and make sure they pay their fair share.  But before he goes too far down that path I have a suggestion for him:

1. Listen closely to the Beatles song “Taxman“
2. Ask yourself why the members of the band moved to the United States?

High tax states like New York and California are finding that a significant number of their wealthy citizenry are moving to lower tax states, exacerbating those states’ fiscal problems.  If you look at the percentage of the population that pays the lion’s share of the taxes you will quickly see that if a relatively small percentage of the population, who can afford to live anywhere, actually decide to leave the United States of Tax the Rich, the resulting fiscal problem will be very, very severe. Obama can only poke his tax stick in that cage so long before he gets a nasty reaction.

We’re All Standing On the Third Rail

Social Security has been called the third rail of politics, but the reality is that we are all standing on the third rail trying to keep our balance and if anyone slips and touches the ground, we’re all fried.  We have to suck up the courage to address Social Security, Medicare, and Medicaid.  If we can’t slow the growth of these programs so that they take a smaller amount of the budget pie each year, we are toast.  None of those programs is in the Constitution, but the liberals/progressives created them with empty promises of benefits without costs.  This should have been the first clue:

“Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.”

Ida May Fuller was the first recipient of monthly S.S. checks when she retired in 1940. She lived to be 100.

She almost got paid back in full with her first check. She got 926 times more than what she paid in. That’s a 92,600% return on “investment.” Not bad, huh?

She got back almost everything she paid in with her first check.  Instead of ringing alarm bells all over the country, politicians patted themselves on the back for the great system they created.  We sent Bernie Madoff to jail, why should Congress be exempt?  What Bernie Madoff did was child’s play in comparison.  Where he fell short was that he couldn’t force people to participate through payroll taxes, and he couldn’t print money.  So why is what he did criminal and what Congress is doing not?  He had to get his participants to voluntarily turn over their money.  He promised returns of 40% per year.  Ida may got 92,600% return on her investment.

Burn the Ships

There is the story of a general who landed on a beach to face an formidable enemy.  He ordered that the ships that brought them there be burned.  By doing so, he knew his men would fight ferociously because there was no escape, either they fought to win or they died.  Perhaps we should do the same with Congress and President Obama.  Fix Social Security and Medicare/Medicaid or you join Bernie Madoff in Cell Block “C”, for running a massive Ponzi scheme.  What has kept Congress from fixing this in the past is the fear of not getting reelected.  Let’s raise the stakes so that not getting reelected would pale in comparison to incarceration.  It’s time our elected officials started paying attention to the people and not their perks.  The disaster train is going downhill and picking up speed, headed for a cliff.  It’s time ALL politicians put the country first and fixed this problem that, after all, they created.  It’s fun to give out the goodies, but this is a crisis that cannot be shunned.  It must be dealt with head on.

Who doesn’t love a freebie?  Who does not get a thrill of good fortune by finding money in the street, no matter how insignificant the amount?  We may not believe in the Tooth Fairy, but many of us believe we have a rich benevolent uncle, Uncle Sam, who is willing to lavish upon us his wealth if only we would ask.  The sad truth is that Uncle Sam is not rich, but penniless and is running a ponzi scheme that would make Bernie Madoff blush.

Health Care for $20

One of the major reasons that health care costs are rising out of control is that no one is minding the store.  While Washington twists itself in knots to rearrange deck chairs on the Titanic of health care, we have little to no say in how our health care dollars are spent.  Our health care “insurance” system is not really insurance.  Insurance is meant to protect us from a financial catastrophe.  Going to the doctor for a checkup is not a catastrophe.  Paying a $20 co-pay for that checkup is like finding money on the street.  There is no way anyone can get a physical exam, except by a hooker, for $20.  It is a good idea to get a physical checkup every year?  Yes, then pay the bill and ask what you are paying for and make sure you need it.  You take your car in for service don’t you?  Do you file an insurance claim when you do?  Can you get it done for $20.  Let’s get real.  What we have is called third party payer and when someone else is picking up the tab, do we care what it costs?  Really?  But someone is picking up the tab.  Look in your other pocket, because you are.  If you are generally healthy and you get your annual checkup, your insurance premium (here in New York at least) will probably run around $10,000 per year.  But, hey, you only paid $20 for that physical!  What if you paid the full amount for the physical, say, $500.  What if your insurance premium was cut to $5,000 because you would pay most routine medical costs out of your pocket and what if you could put the $4,500 left over ($10,000 original premium, minus $5,000 current premium, minus $500 cost of checkup), into a tax free account that can be used for future medical expenses or retirement if you don’t use it?  If you are a young person and stay healthy into your mid-40s, you would have accumulated over $90,000 in your medical savings account and you still have catastrophic insurance coverage and the government stays out of the picture.

Retirement for Free

Like many well intentioned Government programs, Social Security, enacted during the Great Depression, seemed like a good idea at the time.  When enacted there was about 15 workers paying in for each recipient drawing out.  Today there are about a little over 3 workers paying in for each beneficiary.  Bernie Madoff would blush at the audacity of it.  On top of that the money that is paid into Social Security can only be “invested” in Treasury Securities so the return is lousy, but safe.  People reacted to Social Security by saving less because the government safety net was there.  Had people been encouraged to save for their own retirement, they would not be leaving their children this legacy of a ticking time bomb.  So today, many young people feel the government’s hand in their pocket when they look at the FICA line on their pay stub, but don’t believe they will ever get a penny back.  Nice concept.

Bring Home the Bacon!

What’s the measure of a good Congressman or Senator?  Bringing home pork for the district, no?  If you are like me, you get flyers every year or several times per year, touting how Congresswoman Jones obtained federal funding for that pier at the amusement park.  With 435 Congressmen you can count on this, for each $1 that your Representative brings home $434 leaves the Treasury for each of the other Congressional districts and probably more, depending on the power and seniority of your Representative.  Guess who’s paying for that Turtle Crossing in Florida?  that bridge to nowhere in Alaska? that airport in Johnstown, PA that no one uses?  That’s right, you are.  What if we decided locally if we really needed a pier at the amusement park, and if we did, pay for it ourselves?  Then we could let the people of Florida decide if they want to build a turtle crossing, the people of Alaska decide if they wanted a bridge to nowhere and the people of Pennsylvania decide if they wanted an airport that no one used.  Then we could cut federal taxes by an equal amount to keep them out of mischief and help us pay for these projects if we really wanted them.

Let’s Get Organized

There was a time in our history where labor unions performed a valuable service.  In those times when many industrial jobs were unskilled or semi-skilled, employers could dismiss someone on a whim and replace them within the hour.  Unions gave those workers some counterbalancing power and fairer treatment.  Today, we have a much more sophisticated economy and workers have more skills and mobility.  Union membership has declined accordingly, in the private sector at least.  Why is union membership still growing in the public sector?  What is different about workers in the public sector that they still need unions?  Are we suggesting that all government workers are unskilled?  Why do teachers need a union?  Are they not skilled such that they could sell their services to the highest bidder?  Why do unions fight merit pay for teachers?  Why are school principals, the de facto CEO of the school and who in New York easily make six figures, unionized?  Do you get an idea why our K-12 public school system is trailing the world in performance?

In Michigan, privately owned small businesses that provided day-care services suddenly discovered that they were part of a union and union dues were being withheld from their government contractual payments.

Ms. Berry owns her own business—yet the Michigan Department of Human Services claims she is a government employee and union member. The agency thus withholds union dues from the child-care subsidies it sends to her on behalf of her low-income clients. Those dues are funneled to a public-employee union that claims to represent her. The situation is crazy—and it’s happening elsewhere in the country.

Ms. Berry, runs “The Berry Patch” a private day care center she operates from her home catering to low income clients.  The money that was once paid to her, now goes to a union that does little for her.  She is “self employed and wants nothing to do with the union.”  Don’t you think we need more of these tactics in America?  Card Check anyone?

Going Postal

And let’s not forget the Postal Service.  As postal rates are again scheduled to increase on January 4, let’s look at this paragon of efficiency, that is actually authorized by the Constitution.  In 2008, the Postal Service lost $3 billion, and the Postmaster General John Potter pulled down $800,000 in compensation including $135,000 in incentive bonuses.  What do we have to pay this guy if he actually breaks even?  Also, let us not forget this is also a very heavily unionized operation.

Don’t Worry, You Won’t Feel a Thing

During World War II, FDR needed to raise more revenue to pay for the war.  Fearing a backlash, his team hit upon the idea of payroll withholding.  Knowing the potential backlash that would result when taxpayers had to write that big check on April 15th, he rightly figured that if he took a little bit each week, he could take a lot more in total.  Statists in Washington have never looked back.  It’s like the tax that was imposed on telephone service to pay for the Spanish American War that is still in place today.  Instead of picking our pockets every week, what do you think most Americans would say about the size of the federal government if they had to write one big check on April 15th?  There would be no tax rebates, because there would be no tax withheld.  Do you think Americans would force Congress to sharpen their pencils and scale back the size of government?

Help is On the Way

Ronald Reagan said, “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help!’”  But perhaps the best example of how far from our founding principles our government has strayed comes from Congresswoman Rosa DeLauro of Connecticut as she spoke during a House End of Year Wrap Up Session:

“This House–we understand, we’re there,” she said.  “You can count on us because we believe that it’s our moral responsibility to make sure that you and your family need our help.” 

I don’t know about you, but I don’t need the House of Representatives making sure I need their help.  I need as little interference as possible from them.  Their meddlesome intrusions in our lives is killing what made this country great.  It is a point we cannot make often enough.

There was a commercial not too long ago where a young man looked out his window to the village green where a bundle of money had just fallen.  He calls his wife/girlfriend over to show her.  She suggests running down and getting it, but he says, no, let’s wait.  Next you see a frizzy headed guy down on the green who screams, “MONEY!!!!”  In seconds, people came out of the woodwork and scoffed up all the money while the young couple looked on.

The image of that commercial popped into my head as I considered the job summit being led by President Obama.  To me, the young couple represented the government pondering how to direct the economy to achieve this specific goal or that.  The mob on the green was the free market.  While the government dithers over what kind of legislation to write, which special interest groups to pay off to pass it, how to develop incentives to get private industry to do this or that, if they would just cut taxes and get out of the way, the free market would get to work creating jobs where they are needed, not where some bureaucrat thinks they should go.

Uncertainty

The biggest cloud overhanging this economy is uncertainty.  The Obama administration is slamming through enormous changes: a $787 billion Porkulus package, cap and trade, health care.  Businesses look at this combined with the accumulation of massive government debt, tax increases rather than cuts (yes letting the Bush tax cuts expire is a tax increase, not just the expiration of tax cuts as Speaker Pelosi tries to spin it) and they don’t know what hiring that extra employee is going to cost, let alone what it will cost to keep the employees they already have.  So they don’t hire until the dust  settles and they can calculate the impact.

“Tax incentives for job creation are “worthy of further consideration,” he said, while adding that the administration is also set on making a big push in the area of green jobs.” – President Obama at Jobs Summit

“Worthy of further consideration”?  Since conservatives have been calling for tax cuts for a year now, this kind of statement in Obama-ese translates thusly, “I have to make a nod to the right, to acknowledge that I heard them, but it ain’t happening.”  Couple that with the “big push in the area of green jobs.”  We are in the midst of the scientific scandal that the “settled science” of man-made global warming could be the greatest hoax since Bernie Madoff, and Obama wants a big push in the area of green jobs.  What if that area collapses because the urgency that Al Gore has been screaming about is no longer urgent?  It’s government planning on the order of Soviet five-year plans or Mao’s Great Leap Forward programs.  It harkens back to Jimmy Carter’s giant Synfuels project that was going to convert coal into oil, until oil prices fell and the project imploded, but not before billions of tax dollars were poured into that rat hole.

How Simulating!

If you listen to Joe Biden, the stimulus plan is working better than expected.  But let’s take a closer look.  As of about three weeks ago only $120 billion of the stimulus money had been spent. (So why is Congress looking at another stimulus with over $600 billion left to spend in the first one?)  Of that money, 80% went to the Department of Education, Health and Human Services, and the Department of Labor.  What about all the “shovel ready” projects?  Only about $4 billion has gone to the Department of Transportation.  Feel better?

Jobs Summit Attendees

So who is meeting with President Obama at the jobs summit?  Well first let’s look at who was not invited:

• U.S. Chamber of Commerce — they have butted heads with Obama over health care and climate change policies
• National Federation of Independent Businesses

I don’t know about you, but I think they might have an idea or two about how to create conditions that let the free market create jobs.  As for the attendees:

• Service Employees International Union (SEIU) officer
• President of the American Federation of Teachers — a union of workers in a government run monopoly
• United Food & Commercial Workers International Union
• CEOs of some Fortune 500 companies

How many jobs do unions create, not occupy, create?  Think of the auto industry, steel industry, public K-12 education, the Postal Service, and government in general.  Do they bring images of thriving, vibrant, engines of job creation?  Or is the image more of the basket cases of the U.S. economy?  This is not a slight against the union workers themselves, but rather of their leadership who create so many restrictions on job rules to artificially create the need for more jobs.  There motto is: why have three people do the work, when you have five do it?

As far as big business is concerned, let me dispel the thought that conservatives and big business go hand in hand.  In many cases big business looks to cut deals with the government to protect their industries and markets from upstart companies.  They have gotten big and lethargic, rather than nimble and vibrant.  Small businesses create about 80% of the jobs in the U.S. and they didn’t have a seat at the table.

So was the jobs summit about creating jobs or just jive talk?  If you want a real jobs summit see what American Solutions was hosting in Cincinnati, Ohio and Jackson, Mississippi.  They actually discussed ideas that would work.

Joe Biden hit the airwaves on Sunday to try to damp down the growing feeling that Americans have that their president is not Barack Obama, but Bernie Madoff.  Sold a bill of goods that the urgently needed stimulus package of $787 billion would cap unemployment at 8% and prevent it from reaching 9% in the absense of said stimulus, the American people are realizing they were fleeced.  Here’s Joe:

“Vice President Joe Biden said on a Monday conference call with reporters that it was “above [his] pay grade” to explain in detail the methodology the White House uses to estimate the number of jobs created or saved by the economic stimulus legislation, but stressed that there had been no “reasonable” challenges to the estimates.”

Biden used the same coy formulation as his boss used to answer the question concerning abortion and when life begins, i.e., “above my pay grade.”  Well, then let’s wheel in the person in the next paygrade up to explain it to you, Joe.  This is the guy who Obama put in charge of watching how the stimulus money is spent.  So as to really put you at ease, Joe added this gem:

“I’m sorry I’m not an economist,” Biden said as he was describing the methodology. “My background is foreign policy and the constitution.”

Just when you thought it was safe to believe that on the job training for President Obama might be working, his sidekick lets go with that thigh slapper. So who’s watching foreign policy and the constitution?  This president insists that $787 billion of your tax dollars are needed to boost the economy and it is left in the hands of a man who admittedly doesn’t know what he’s doing.

You Have to Spin It to Win It

45% of the American people, according to a Rasmussen poll, believe the remainder of the stimulus package should be cancelled.  Uh-oh, start the spin machine.  So Joe Biden says,

“Vice President Joe Biden said Sunday that “everyone guessed wrong” on the impact of the economic stimulus, but he defended the administration’s spending designed to combat rising joblessness.”

Everyone, Joe?  If I’m not mistaken every Republican Congressman voted against that odious bill and only three Republican senators, including Arlen Spector, who has moved over to your team.  So, Joe, you should modify that to “every Democrat guessed wrong, while the Republicans were spot on.”    And if that’s not bad enough, Rasmussen tells us that 48% of Americans do not believe new stimulus spending will create more jobs.  So membership in your “everyone club” is getting mighty lean.

Rubbing Salt in the Wound

If that’s not bad enough for Joe and his team, consider this: a new Rasmussen poll says that 51% of Americans favor an across-the-board tax cut for ALL Americans to stimulate the economy.  So much for soak the rich and class warfare.  Most Americans know that we are all in this together and we all need to pitch in to get out.  Tax cuts work.  Spending doesn’t.

We heard President Obama say pretty starkly that the enormous Wall Street bonuses were outrageous.  While I stop short of government dictating compensation to private businesses, I do put the Wall Street clowns in the same category of the Big Three auto CEOs flying to Washington in their private jets looking for handouts.  Very bad form.

The more I pondered the idea of salary caps, whether they were fair or not, whether it was government taking away another liberty, it finally hit me, that this just might work.  So I now propose a salary cap, on the FEDERAL GOVERNMENT. And why not?

Who Got Us Into This Mess?

It was the housing bubble that triggered the financial debacle.  What drove the housing bubble?  Let’s start with Fannie and Freddie.  They were created by Congress.  Next came the Community Reinvestment Act that forced banks to make riskier housing loans.  Next the Clinton Administration under the direction of Janet Reno, drove the banks harder to make more housing loans to people who couldn’t afford them.  Then was the Federal Reserve that kept interest rates too low for too long.  And right up until the end we had Barney Frank and Christopher Dodd saying all was well with Fannie and Freddie.

We have Charlie Rangel, chairman of the House Ways and Means Committee, the committee responsible for writing the tax laws, cheats on his income taxes.

Bernie Madoff runs a Ponzi scheme that bilks people out of $50 billion while a guy named Markopolis figured the whole thing out in five minutes and spent the last nine years trying to get someone in government to care.

The government imposes CAFE standards on the auto industry and drives them to the brink of bankruptcy and then says we have to bail them out.

Now they are proposing a “stimulus” package that is just a bunch of pork.

Solution

So I propose that we, their employers, cap their salaries at $100,000 (from their current $162,500) until such time as they fix this mess.  I further propose that if a congressman/woman can prove that they didn’t vote for any of the crap that got us into this mess, that they be exempt from the cap.

What say you?