When I was a political appointee, I routinely flew with members of Congress to Guantanamo Bay, Cuba. I made routine trips to GTMO out of Andrews;  Gulfstream V type aircraft (military designator is a C-37), nice little “United States of America” on the side, with the traditional blue and white striping, and flights were complete with nice gourmet meals, movies, newspapers, air to air and air to ground communications, and personal stewards. All the trappings one would expect to see on “The Apprentice” can be found on US military VIP aircraft. One would hardly be surprised to see “Gordon Gecko” emerge from the tail of the aircraft.  In short, they’re quite nice.

The “G5” can ferry you to and from GTMO in less than three hours if the winds are right. For the Senators and Congressmen I was flying with, that made perfect sense. We would depart 0500-0600 from Andrews; arrive at the base by 8-900 hrs; spend 6-8 hours with the command at GTMO touring, asking questions, etc.; get back on the plane at 17-18:00 (5/6 o’clock). It’s a rough day – 13 hours of flying, touring, and travelling. When you are back home, you are exhausted.

So I know a bit about “mil air” travel. It’s a rare luxury few taxpayers will ever experience, let alone even know about. However, we got 16 planes, from eenie-weenie little decked out prop planes, to Air Force One style jumbo-jets, fueled and ready to go at Andrews. That doesn’t even count the 20-30 other jets we have available by air national guard units, many of which are still quite nice (although not exactly the swankiest in the fleet).

Congress appropriates money to fund these trips under a 30 year old law under the logic that as part of their “oversight” role, they need to be able to go out and see for themselves issues affecting their respective policy areas. I think the American people expect this will happen. I don’t think most Americans would be upset with members of the armed services committees visiting military bases or war zones. I don’t think most Americans would be upset with members of Congress using military aircraft to attend official functions abroad. I don’t think most Americans would be upset with members of Congress flying to crisis zones that impact US policy or US aid. I think there is a role for military travel.

I also have seen the seedy side of this. I’ve been on trips where “on the way back” we dropped off a Congressman or Senator in their home state. I’ve seen diversions to other places so that we could “pick up a few things.” I’ve been on trips where we divert so that some Senator can meet “el Presidente” and then fly to the final destination. All that crap has never sat right with me. None of that is in the taxpayer’s interest… none of it is legitimate in my view. I’ve also been on trips where it appeared the only reason why we stopped at a command or a base was to try and call the trip legitimate, most of the trip was focused on personal issues. I’ll be honest, why these things really rubbed me the wrong way was because it wasted my time. I hated being on that fool’s errand. However, I also disliked it because it was wasteful and not what the taxpayers are expecting.

It doesn’t surprise me at all that Congress abuses this perk, and that Democrat led Congresses have raised abuse to new levels. Given the aura of entitlement this crop of Congressional leaders has, is it all that surprising Pelosi’s attitude towards hoi poi of airline travelers, “let them eat tailpipe”?[1]

The Wall Street Journal ran an article today uncovering abuses:

In October, Rep. Bud Cramer (R., Ala.) spent two weeks in Europe on government business. Reports show that Mr. Cramer spent $5,700 on hotels, meals and incidentals. Mr. Cramer wasn’t running for re-election and left office just two months later.

“Knowing that I was leaving with my 18 years of seniority, I wanted to conclude some issues that I was working on,” Mr. Cramer said. He now works for a lobbying firm in Washington.

Some of the most expensive travel is to exotic locales.

Last summer, Rep. Brian Baird (D., Wash.) took a four-day trip to the Galápagos Islands with his wife, four other lawmakers and their family members. The lawmakers spent $22,000 on meals and hotels, records show. Mr. Baird, a member of the House Science Committee, said the trip was to learn about global warming.

On the first day, lawmakers toured a breeding center for giant tortoise and land iguanas before dining with scientists, according to an itinerary for the trip. The next morning, lawmakers headed to the Galápagos National Park while their family members had the option of hiking, swimming or shopping. That afternoon, the group boarded a boat to visit a sea-lion colony and search for white-tip sharks.

Mr. Baird didn’t respond to a request for comment.[2]

Hmm… trips to the Galápagos. Yeah, that sounds like a critical national interest that taxpayers need to pay 12-15K per hour per head to ensure Congress is “on top of.” I mean, what the hell here – guy spends 150K and enlarges the “carbon footprint” (I mean unless the guy flew on solar planes, which I’m presently unaware of exist) to study Global warming? There would have been less of a carbon footprint if we had taken the 22K he spent on MI&E (meals, incidentals and entertainment), and the 50-100K I’m sure we spent on mil-air, and BURNED the money!

And I’m sorry, Bud Cramer’s remark… he might as well just have said, “I thought I should get one last screw-job in before punching out for my golden parachute. Since I’m not running again, the taxpayer can kiss my ass.” At least that would have been more intellectually honest than the answer he gave the WSJ.

Pelosi’s spokesman takes the cake for explain one of the Speaker’s trips to Italy:

A spokesman for Ms. Pelosi says that she was working in Italy, meeting with U.S. troops at Aviano Air Base, laying a wreath at the Florence American Cemetery, giving a speech to Italian lawmakers and visiting the Pope, among other things.[3]

 

 

 

 

Hey? Don’t we like have a President (and a vice President) for doing things like that? Is giving a speech to Italian lawmakers an oversight function of the United States Congress? I mean I know Democrat gerrymandering can get out of control, but, do we have Representatives now in Italy? Is there an Avanio caucus I’m unaware of? Was Italy planning on becoming a State? What exactly is the “official Congressional business” consistent with the Constitution that Pelosi was on? I suspect rubbing elbows with her piasan counterparts and shopping in Milan qualified as US business.

It’s all a bunch of nonsense. Bottom line, Congress taxes you harder so they can live easier. To keep the masses of “poor” from revolting, they increase welfare disbursements and call it “hope and change.” If you have a job in this country, and you pay taxes, that’s the long and the short of where some of your money is going: gourmet meals, shopping trips, and ensuring Pelosi can make speeches to balding Italian men.

So remember this when Princess Pelosi is busy telling you about how she cares about your situation. I’m sure she thinks long and hard about it while her feet are up on the leather wrapped lounger platform that pops out of the seats at 42K feet, sipping Chianti, and she’s ordering a gourmet meal to her exact specifications.

I’ve seen it first hand friends. I’m not making this stuff up.

Congress Air – flying the taxpayer’s skies.

[2] http://online.wsj.com/article/SB124650399438184235.html (accessed July 2, 2009).

[3] http://online.wsj.com/article/SB124650399438184235.html (accessed July 2, 2009).

Many people are genuinely concerned by the sheer size of the deficits and how much the national debt will grow. I’ve been asked: Does it matter? Why does it matter? What about the Chinese owning our debt? Do future generations really pay off the debts? Does it limit economic growth? Reduce wages? Increase interest rates?

Tonight’s blog post is intended to answer some of these questions and provide readers greater insights into the macroeconomic conditions of the United States. Tonight’s blog post is also meant as a reply to a ongoing conversation I’ve had with Michael Johns about deficits and his assertion to me that deficits in the end really don’t matter (something I hesitantly agree with, but do so with significant caveats as I struggle to define where the boundaries are for when they do matter.)

Let me offer a caveat, however, to my fellow conservatives in making my argument that deficits do not matter much. Common conservatism criticism of deficit spending basis is logic on an intuitive understanding of wealth and government control. What I will call the “modern conservative argument” bases its logic on actually understanding the mechanics of how monetary policy works to fund government activity. The intuitive understanding of accountability and wealth is not fundamentally flawed, but fails to capture the realities of how the Federal Reserve, the Treasury, and the IRS really affect capital stock. As such, arguments like “it squanders our children’s wealth” are crude cudgels against government mismanagement of funds. They are metaphorical versus based in any quantifiable reality under normal circumstances. Conservatives need to better understand how money actually works in the US government to fund things, and thus, can more accurately demonstrate how Democrat/liberal mismanagement of the public trust, the real wealth upon which the country draws to pay its bills, can ultimately lead to all the harms conservatives extol in their criticism of deficits. Tonight’s article attempts to explain why my argument is correct.

Tonight’s piece is also adapted from a chapter of the book I am writing that I hope to have published within the next year or so on conservative policymaking.

Deficits and the National Debt

First, what are deficits? Fiscal deficits occur when the government spends more money from its federal treasury than it collects as tax revenues. Conservatives dislike and criticize deficits because, among other things, they argue:

They are immoral – deficits leverage the future earnings of citizens to pay for consumption of present citizens (stealing from our children’s “piggy banks”)

They can reduce economic growth (this argument is complex, I’ll explain it in detail in a moment)

Create dependence on continuous influx of new credit/capital, and if sourced with single country (or group of countries) that could result in influence over national policy (the “China” problem).

That said, there is a curious fact about the United States budget – only 10 times since 1940 has the US had neutral or positive fiscal balance sheets (a budget surplus). That means the overwhelming majority of the time, the US has spent more money than collected in taxes. On average, the United States has run a deficit of about 1-3% of its GNP, with the highest being 31% of GNP during the Second World War. (Source: OMB Historical budget information). The national debt (the total debt owed to creditors) has steadily grown since the founding of the Republic, and presently stands at about 10.8 trillion dollars (the GNP of the US is roughly 14.7 trillion – thus the national debt is about 73% of one year’s GNP). However, given the amount of wealth generated since the founding of the Republic, the national debt is a small percentage of the quadrillions of dollars of wealth that created over the past 233 years.

If deficits are so universally bad, as Republicans claim, then why did the Republic not collapse under its own bloated weight? The answer lies in understanding how “money” works in the US Economy.

Money, power, and sovereignty

“Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s” (Matthew 22:21) says the Bible. Prior to the abandonment of specie currency, taxes paid to the sovereign really did fund activities of the government. Since money was arbitrarily finite for all (including the sovereign himself), taxes to the King were his only source of income to pay for things like defense, public works, and welfare.

For a very long time, all governments based their currency on the quantity of gold or silver reserves possessed by the government. Each dollar issued by the Federal Reserve was a warrant against a quantifiable amount of physical silver. Printing more money debased the currency since the amount of available precious metal stocks was finite in the short term. Having fewer dollars caused appreciation of the currency, possibly in excess of the value printed or minted. In general, the peg was to keep the “par value” of the note or coin matched to the stated value if the bill was redeemed or the coin melted. This is a practice that continues to this day, I might add. The US mint carefully maintains ratios on things like nickels, pennies, and dimes, so that you cannot make money by melting down the coins for their elemental values.

When the monetary system uses a finite worldwide base as its currency (gold, silver, platinum, etc.), then all “money” across the world has to balance out. So if the United States needed money, it had to borrow it in terms of issuing debt. When people would buy that debt, they would need dollars to do so. To get dollars, you had to trade in your currency or precious metals to get the federal reserve notes to buy the treasury bonds. Hence, the United States, by selling debt, accumulated real gold stocks from investors abroad. When debts were liquidated, the US paid out gold stocks to investors.

All the arguments against deficits really apply to this type of system – a closed system. The sovereign cannot increase “wealth” by printing money or issuing debt. The entire monetary system is closed, sum zero. Money borrowed reduces the amount of money available somewhere else. When the Bretton Woods agreements collapsed, specie currency died with it, and entered into the realm of fiat currency.

Fiat currency has value because the sovereign says it has value. If you look closely at US currency there is this little phrase that says “This note is legal tender for all debts, public and private.” What that means is “this money has value because the government says it’s the only legal currency for trade.” You, the citizens of the United States, accept this edict and put dollars in your wallet and pay for, and accept as payment for your activities, dollars.

That is how money works now. It’s based on faith. You believe that the money in your wallet today will be acceptable to buy the things you need tomorrow. If you didn’t believe that, and lots of people began to agree with you, then the money you have wouldn’t be worth the paper it’s printed on… literally.

Now that we understand that how you look at money is predicated on faith in value, let’s talk about how the US government looks at money.

No money down Government

The government does not look at money the same way you do. Money issued is a liability, not an asset. It has to make good on the promises for every dollar out there. That changes things quite a bit about how money actually works.

What do you think happens when you pay taxes? Do you think Timmy “the tax evader” Geithner has a big room filled with your tax money and like Midas hands it out to government agencies? I suspect most people view the government’s operations in some form or another like this – well you’re totally wrong. That’s not how it works at all.

Without going into a bunch of details… effectively the Treasury department burns the money you send it in taxes. The government has no need for money in any real sense. The government does not “pay” other organs of government in any meaningful way.

Here is something to think about: the Government could finance all of the expenditures of the Government without ever collecting a dime in taxes, and without ever selling a single treasury bond. True or False?

Answer: True. As a matter of fact, it is absolutely impossible for the Government to actually “pay for” expenditures through taxes and bond issuances. This is the realm of “high powered money” or as is commonly referred to in economic circles, HPM.

What is HPM? High powered money is the “real money” the government doles out to federal agencies to pay for their activities. The Treasury authorizes (in accordance with the budget approved by Congress) warrants against the Treasury to spend. When Federal agencies actually put that warrant money into the bank accounts of firms (by buying things) or federal workers (by paying them for their work), then the money enters the banking system and creates wealth. HPM represents a liability of the federal government as a whole to the banking system – money paid for things bought by the federal government. However, the liability is what the government says it is (in a crude sense), not what any third party says it is (which was the case under the gold standard, the supply of gold was necessarily fixed and was unchanged by the bargaining parties). Eliminate the third party, and the government becomes the judge in its own cause as to obligation and discharge of debts.

To put it another way, when the Treasury spends by issuing the warrants accepted in dispensation of the obligation of its citizens to pay taxes, the state does not need a third party liability to ‘discharge’ its own ‘liabilities’. The State clears its own debts by issuing its own currency. Indeed, while HPM is often said to be the ‘debt’ or ‘liability’ of government, it is not a liability in the normal sense of the term, for the government is not ‘liable’ to deliver anything to retire high powered money. I’ll say that again because it’s really really important. The government is not liable to deliver anything to retire high powered money. In other words, the government, by printing money, does not really create wealth.

When government issues HPM to buy something, it is ‘liable’ only to accept that same HPM in payments to the state (its own currency paid back in the form of taxes). There is no real obligation otherwise of the State.

Money for nothing and Government for Free (I want my M-T-V)

As the government spends more money than it taxes, it has to create that money from accounts at the Treasury. In our government, the Treasury is who actually “pays” the bills for the United States. They print the money – cutting checks and actually printing cash. The Treasury creates that money literally out of “thin air” and issues checks to the people whom the government is buying services and goods. When those checks are deposited, that activity creates additional “credit” in the banks of the Federal Reserve system (this is called the Reserve Effect in economics). When the President talks about a “stimulus” effect to US government spending – this is what they’re talking about (however, as I’ll talk about towards the end, the President’s argument is really distorting the expected reserve effects).

In general, the reserve effect is offset by the sale of bonds (which would take the “reserves” out of banks when that money is brought back to the Treasury). Treasury spending creates money. Taxes and bonds destroy it. The equation between the destruction of reserves and the creation of reserves is not entirely balanced. The Fed and the Treasury attempt to coordinate collectively how to manage the level of capital in the US banking system.

Without getting super technical, even when the reserve effect is offset by the sale of government debts, banks can continue to be buoyed by the “reserve effect” when they help sell or buy that debt themselves because not all US debt sales result in the Fed reducing the bank’s reserves. Because of the mechanisms of how the Federal Reserve system actually works, banks may not necessarily see their balance sheet reserves decline as a result of purchasing (or having their customers purchase) some types of US debts. In this way, deficit spending can actually increase the available capital to the banking system as a whole. It is through this increase that government expenditures are actually paid for by the government. Taxes and borrowing do not pay for government expenditures.

Whether or not the Fed allows US banks to retain their reserves while buying US debts is a complicated system that’s outside the scope of today’s piece. However, what you need to understand is that deficit spending can literally create money by the will of the Federal Reserve.

Since the Fed can create money, arguments about the marginal rate of capital returns (that as capital stocks are reduced so much economic output) don’t seem to be valid. While in theory capital stocks are reduced, those economic arguments fail to capture the real power the Fed has in determining banking reserve requirements (and by extension the available capital to the macro economy). The deficit hawks are right in that reducing capital stocks reduces output of the economy, however, the Fed can avoid that effect by essentially funding bonds without destruction of reserves.

The reserve effects of the US banking system should not be understated. There is considerable research to suggest that the creation of “high powered money” (HPM) is in fact what pays for US expenditures. Some economists have even gone so far as to argue that taxes and debt by their very design (since they destroy reserves on balance sheets), cannot pay for government activities since they destroy wealth instead of creating it (See works by Poole, Barro, and Belt as examples). To deficit hawks, this argument is completely alien since they see the US banking system as essentially “a sum zero” situation – money comes in, money goes out. However, unlike you and I, the government has the lawful ability to print money, and manages the creation of credit through the Federal Reserve process, thus, the fundamental argument that deficits create short-term shackles seems inherently flawed.

However, let’s go back to a concept I introduced earlier. Fiat money is ultimately based on a single powerful concept – faith. The other side of that is trust. In God we may trust, but most of us still want cold hard cash. If we believe cash will not have value, then the entire ability of the Government to function, HPM or otherwise, would stop.

Under normal circumstances, US enjoys a unique situation where it literally can “grow its way” to making our capital liabilities manageable. We suck up much of the available capital in the world and transform it into the best quality of life on Earth. This is not a hegemonic process – people willingly give us their capital because we provide them additional wealth creation as well. If the United States were to ever truly embark on a policy of “no borrowing” (a/k/a balanced budgets), the amount of damage to the US and the world economic situation would be significant. The United States does not have sufficient capital stock to fund the rapid growth of technology, commerce, and development. Moreover, the world lacks few avenues that provide good returns for relatively low risk. Under normal circumstances, deficits for the United States, are a fact of maintaining the growth and stability of the world financial system.

This is not to say deficits will never matter. When people become uncomfortable with the level of debts the government is taking on, then the value of the currency declines. Debasement of the faith in the currency can create all sorts of problems that Republicans warn about. Long term consequences of deficits can be problematic, to say the least.

Long Term Problems

While the dollar’s value has fluxuated over the 60 years since being taken off the ‘gold standard,’ overall, the US economy has grown and been stable in the long-term. Compared to the rest of the world, we’re rocket scientists when it comes to managing money. Even in the current situation, our ability to deal effectively with financial turmoil cannot be readily matched by any nation, which is why there is always such an interest in the decisions of our financial leaders, and in the development of our national spending levels.

The rate at which a country accumulates debt, and the overall size of the dead relationship to its national economy, affect the investment decisions of investors around the world. This is because ultimately investors do have a sense of occurrence is worth in relationships with countries in national wealth and productivity. While the US has long since abandoned specie currency, investors do evaluate the ability of the country to generate wealth for its citizens and its investors. That perception and analysis does act as a constraint against unchecked spending and is reflected in currency exchange rates and the interest rates that the Treasury must pay in order to attract capital investment to purchase US treasury bonds.

In the case of the United States, its historic ability to generate wealth has been unmatched. However, investors who buy US debt make close observations about the spending choices and priorities that the president and Congress make. Deficits incurred to deal with temporary problems, such as an armed conflict or a recession, do not give investors a US debt much concern. However, US debt investors do get concerned when spending priorities turned towards increasing the scope or size of entitlements or expanding government activity that will lead to long term commitments of the national wealth. The reason why should be obvious, long-term commitments made upon the taxpayers reduce the overall productivity of the United States. This reduction in productivity reduces the returns investors can expect.

When Republicans talk about leveraging their children’s future, what they really are trying to articulate is the long-term risk to future growth by committing taxpayers to programs that require increasing amounts of wealth in real terms. In order to maintain the system of credibility, the government must tie taxes at some point to the rate of the HPM it generates. Taxes will reduce the wealth and productivity of citizens. THIS fact is what causes future generations to be poorer as less of an endowment can be given to them because of reduced output.

Another thing, future generations don’t pay for prior ones in a literal sense, future generations pay for the obligations of prior ones through reduced access to capital and a higher cost for capital for forward growth. This requires more money from future generations in the form of taxes to offset more costly HPM. Increasing taxes reduce available capital stock; it becomes harder for future generations to enjoy the same standard of living as prior ones on less overall wealth. Thus, deficits themselves don’t generate lower standards of living necessarily, but the rate of accumulation of debt, as it affects perceptions about the viability and economic strength of the nation, can affect the long-term and standard of living of future generations.

Liberals point to the Bush Administration and say, “Well Bush spent all this money, so shut up we’re going to spend all this money on Health Care reform, and drugs for addicts, and marry trees to fish, and whatever else we can think of.” As a result, Congress and President Obama have made a decision to see just how fast the Treasury can create HPM. Republicans argue deficits are bad but don’t explain why, they also don’t explain or differentiate “good reasons” from “bad reason” in incurring debts.

What would most Americans have desired? We spent nine trillion dollars in accumulating wealth from places like China, Russia, Europe, and Japan. We increased the GDP during those 8 years by about a third. We also generated billions of dollars in wealth around the world. Would you rather have had a balanced budget, and a third of your wealth taken away? I suspect not. We necessarily run deficits to pay for things like wars, and productivity improvements (in the form of lower taxes), and we always come out ahead.

For example, I would have loved to have taken the “trillion dollar stimulus” and broken it up over four years in the form of deficit borrowing while eliminating taxes on investment. Or alternatively, make permanent changes to the tax structure and reduced rates. Why? Because that type of deficit spending actually WOULD make the economy leap. More money in the pockets of consumers means more investment, more spending, and greater economic confidence. The government taxes a percentage of economic activity, not a “dollar amount” in a given year. So, what would the government rather – a small percentage of a VERY large pie, or a high percentage of a medium sized pie. Could be the same – I grant that. However, in most cases, lower taxes results in more tax receipts to the federal (and State) governments than high taxes or increased taxes.

Another interesting mind game is to ask yourself, “what if we borrowed 99% of our total government spending, and taxed only what was necessary to make the interest payments?” That system would actually possibly work. The money destroyed in taxes would reflect the obligations that had to be retired in a given year. As it presently stands, we tax about four times our debt service. Imagine if we taxed only to cover the actual debt service – reducing taxes in this country by 75%. What would that do to your monthly income?

Now ask yourself some other questions. What if we borrowed all this money, raised taxes, and then piled up the money into a big pile and burned it. That’s effectively what President Obama is doing with his stimulus plan. Giving the money to people who don’t pay taxes, giving the money to organizations that don’t generate any real wealth, and giving the money away in the form of subsidies for dysfunctional products and projects, is the equivalent to burning the wealth. It provides no return. Poor people don’t create economic activity – they don’t employ people – they don’t make more wealth than they consume. I don’t say that out of some lack of caring, I say that as an economic fact. Similarly, giving money to groups that don’t create economic output also just burns up the cash. Finally, subsidizing activities that aren’t market competitive can only work in the short run. If the market doesn’t want the product, no amount of spending works forever.

This is what Republicans need to make clear about deficits. Need to borrow to protect the country – of course. Have to do it. Need to borrow to keep taxes low… okay, you know what, better some poor shlub in China goes without his cash, than Americans. Better the oil states give up their wealth (and oil) to us, than our economy not grow. I mean, that’s what we’re really talking about here in borrowing money. Taking that money and growing out economy – good. Taking that borrowed cash and just flushing it down the toilet on welfare, subsidies, and moronic projects – bad.

The current situation the United States faces is quite dire. The collapse of the US housing market, and the domino effect it created in capital markets around the world, has shaken the confidence of investors and governments around the world in the confidence of US leadership. Moreover most of our allies and America’s top investors are unconvinced that massive social spending will lead to a more prosperous America. Capitalism seeks only the highest returns at the lowest risk. Investors are not ideological in looking at problems from a conservative or liberal standpoint. They are interested in returns given the risk involved, and opportunities for investment elsewhere. It is quite condemning of the president’s agenda that our number-one investors, China, Japan, Europe, are deeply concerned about the future of America’s ability to repay its debts. International investors have every reason to be concerned that the United States may solve its debt problems through monetization. Moreover, our international investors were also expressing their concern not just over the amount of debt card, but how that money is being used. They do not believe that deficits stimulus will grow the American economy. They do not believe that investing in socialized medicine in the United States will make the United States more productive. Finally, our investors remain unconvinced that this administration will be able to sufficiently taxed the populace to scratch enough personal well from the US economy to adequately service US debt. All of these factors are reflected in the increasing costs of US borrowing and the continued languishing of the international capital markets.

Conclusions

In the end, the United States government does not function with respect to debt the way you and I do. Because the government has the ability to generate money, it does not face a circumstance where it is unable to balance the payment of its obligations against incoming revenues. Governments can issue debt and issue currency, but one need not be necessarily connected to another. Whereas you and I must balance our productivity and our consumption, the governments money supply is set according to policy targets and the government spending is set with our respect to the availability of capital. If government wants, government can pay all of its debts, and buy any services desires, merely through creating wealth to the Federal Reserve system. The restraint against the government merely financing all of its desires by printing money is the expectation of the public and holders of US denominated assets that the total supply of capital, and the growth in that supply, reflects the real national wealth of the United States.

Expectations are why deficits matter. If the government issues a massive amount of debt, investors can only be enticed to purchase that debt if they believe that will be used to grow the wealth of the United States. US treasury bonds are seen generally as a riskless investments that provide a solid stable return. Fiscal and monetary policy decisions can affect the perception of investors as to the risks involved in purchasing sovereign debt. Plus, the long-term risk of financial mismanagement for any country, including the United States, is losing credibility in the international market and having to pay a premium to issue debt for government activity.

Because the financial workings of the United States are so poorly understood by both members of Congress and the public, Republicans by and large use the concept of balanced budgets as a cudgel against you reversible long term growth in the obligation of future wealth for current consumption. Commitments by the government to long-term and expensive entitlement programs act as a governor on economic growth. There are only two ways to deal with growth of entitlement programs: monetize the obligation by paying recipients in dollars that are worth less from year to year; alternatively, acquire increasing amounts of capital either through taxation or borrowing. Both activities have deleterious effects on the ability of the economy to grow. Investors in US debt now this and are concerned when US borrowing exceeds a generally perceived stable level of borrowing.

Deficits do matter, but not for the reasons most Republicans articulate. The real risk in running unchecked deficits in order to fund expansion of government is that it undermines the capital system of the United States. It creates disproportionate allocations of national wealth to activities that do not grow economic activity.

I find it ironic that Olbermann and Maddow allegedly represent the idea that Republicans squashed democracy over the last eight years of the Bush Administration, yet are almost incoherently giddy at the prospect of being able to squash all debate on a bill in the legislature at a whim.

How easy is it for the Senate majority leader to just ramrod through legislation? Not very. Let’s use the first likely test, cap and trade.

First, I expect Al Franken will vote Democrat no matter what the issue is or what the impact will be on Minnesotans.  My guess is as soon as he is sworn in, he will be sitting at the desk ready to punch whatever button he is told to push. That means he’ll vote yea on “cap-and-trade,” even though it will hurt businesses throughout Minnesota, including a rather robust energy producing industry that supplies energy to a fair amount of the Midwest. He’ll vote yea on universal health care, even though Minnesota’s own health care system, about as close to the federal plan as one can get, is being crushed under the weight of patients. He’ll undoubtedly vote to raise taxes and increase regulation, things that Minnesotans hardly need when unemployment in the state is  about 10.5 percent.

So I expect Al Franken to a be a total stooge of the Democrat leadership. That makes just one vote.

Let’s talk about who might not be a total stooge of the Democrat leadership. The first is our old friend Sen. Arlen Specter. While I believe Specter lacks any moral character, switching parties as he did, I also believe Specter is predictable. Just as he caused immense difficulties for us with his “independence,” I think he will give Sen. Reid conniptions just as often. Arlen Specter is no environmentalist. This former Republican, now Democrat Pennsylvania senator is rated a mere 32% by the League of Conservation Voters and has made many an anti-environment vote in the Senate. Specter is from a coal-producing state. He can’t get around that. Unlike the reps in House for the PA-Delegation, Specter cannot de-conflict the fact that big coal delivers big votes in statewide elections. If he knifes big-coal in the back, they will support Pat Toomey faster than Specter can say “I’m changing parties.” Combine that with the fact that the DNC screwed him royally in not giving him all the goodies that the Vice President undoubtedly promised him, he may decide his first salvo of being an “independent Democrat” is to not vote for cloture.

Specter may not vote for cloture – he may actually vote against cap and trade.

The senior Senator of Pennsylvania, Robert Casey, Jr., has come out against cap and trade and has even thrown in with the Republicans in a possible filibuster. Should give readers some idea of how important big-coal is to Pennsylvania.

So Casey likely will not vote for cloture, and he’ll vote against cap and trade.

Second, we have the “Cicero of the Senate,” Senator Robert Byrd. I suspect a couple of things about cap and trade will bother Cicero. First, I’d expect he’ll be less inclined to vote for cap and trade and kill the primary state’s industry – big-coal. West Virginia has a long and distinguished history of coal, and I doubt much Byrd will fail to understand that. Further, Byrd’s aides have long hinted that Byrd cannot support cap and trade as it was passed in the HR 2454/2998 form. Finally, I suspect Cicero will take out his little pocket Constitution – I can’t imagine all the regulation sits well with him.

So Sen. Robert Byrd may not vote for cap and trade.

Third, we have the junior senator from West Virginia, Senator Jay Rockefeller. Rockefeller has come straight out and said he can’t support the bill that passed the House. Does this translate into a decision not to support cap and trade (the way I suspect Byrd has reached that conclusion), I’m not entirely certain. I know this much, Rockefeller wants to be re-elected. He faces all the same things Byrd and Specter face if he were to knife big-coal in the back. I don’t see how you reduce “carbon emissions” without killing the coal industry (which is really one of the goals of the Waxman-Markey bill, if you haven’t figured that out). I don’t see how any Senator from a coal producing state can vote to destroy their own industry. Barring something stupid, I can’t see Rockefeller voting for it either.

So Sen. Rockefeller may not vote for cap and trade.

The Senate has successfully defeated cap-and-trade legislation in 2003, 2005, and most recently in 2008. With the economy in a deep recession, it is hard to believe that even with the “rising tide” of Democrats in 2006, enough Senators will vote in favor of legislation that would not only increase the price of gas at the pump, but cost millions of American jobs, create a huge new bureaucracy and raise taxes by record amounts. While many of the Senators are in “safe seats,” if they vote against the bill, if they vote for it, it’s questionable how they could hold on to their seats in places like West Virginia, Virginia, Ohio, Pennsylvania, Kentucky, and Indiana. Democrats control those states, but I don’t see them voting for cap-and-trade legislation. Not unless it exempts “big coal,” and if it does, then what is the point? This is why the legislation has failed, even after the Democrat “revolution” in 2006.

Now let’s talk about Republicans we can expect to switch: Collins and Snowe, expect them to vote for it. They’ll vote for cloture as well. They’ll have some grand excuse about it, but they’ll vote for it. Maine has no coal production. Plus, Maine is effectively a stronghold of the environmentalists. Collins and Snowe care about being re-elected, thus, I don’t see them supporting the Republican party line on this.

So, far from the hype you’re hearing in the media, my whip count shows the following democrat-party controlled States decidedly coming down hard on any cap and trade legislation: West Virginia (Byrd, Rockefeller), Pennsylvania (Specter, Casey, Jr.), North Dakota (Kent Conrad could vote against it, it’s not clear), IL (Bayh will undoubtedly vote against it), and Ohio (Sherrod Brown should vote against it).

In a nutshell, cap and trade likely dies on the vine in the Senate.

Even with Al Franken pressing “yea” 20 times a second, he’s just one guy – a committed Obamite lunatic no doubt – but still one guy.

Overcoming a filibuster is hard. You really need about 65-70 votes to make the threat stick. 60 is the minimum number, but it doesn’t always get you there.

The Food and Drug Administration has assembled more than 35 experts to discuss ways to prevent overdose with acetaminophen – the pain-relieving, fever-reducing ingredient in Tylenol and dozens of other prescription and over-the-counter medications.

According to the FDA, acetaminophen is the leading cause of liver failure in the U.S. and sends 56,000 people to the emergency room annually.

The agency today asked its experts to consider a range of options: adding a “black box” warning label to the products, lowering the drug dosage in some products, or pulling certain types of medications off the market.

The drugs that could be pulled off shelves are combination medications, such as Procter & Gamble’s NyQuil or Novartis’  Theraflu, which combine acetaminophen with other ingredients that treat cough and runny nose.

The FDA says patients often pair them with a pure acetaminophen medication, like Tylenol, exposing themselves to unsafe levels of the drug.

Just how far is this stupidity going to go with this Administration. First light bulbs, today, Tylenol. What’s next, are we going to have to put corks over our forks incase we accidentally stab ourselves? I suspect next the Administration will want to collect steak knives, lest we accidentally kill ourselves at the dinner table.

Let me be clear, I don’t want to see people accidentally poisoned. Acetominophen causes liver failure if taken in high doses and is a nasty way to die. That said, lots of things are dangerous in the house if used improperly.

For example:

• I wouldn’t recommend drinking Drain-O, a common drain de-clogging fluid. It contains Sodium Hydroxide (known more commonly as caustic soda). A teaspoon of the stuff would most likely kill you if ingested.
• I wouldn’t recomend drinking dish soap, laundry detergent, or dishwashing soap either. Most soaps contain sodium lauryl sulfate, which is harmful if ingested in large quantities.
• Windex is pretty deadily if consumed.
• Bleach isn’t particularly good for you either.
• Topical anesthetics can also cause harm if used too much, ingested, or otherwise abused.
• Sniffing glue of course – everyone knows that’s a bad idea.

Now, just thinking about the things in your medicine cabinet:

• Asprin is harmful if taken in large quantities as well. Acetylsalicylic acid is the active ingredient in asprin, and it will kill you just as dead as Tylenol if taken in large quantities.
• Pepto Bismol contains Sodium salicylate, similar to Aspirin, and will kill you if you drink too much of it.
• Mouthwash can also kill you if you swallow too much.
• I wouldn’t be munching on toothpaste either. Most of toothpaste is rock, quite frankly, ground up rock. What’s left is a chemical concoction of stuff you shouldn’t be eating… most particularly the floride compounds that strengthen your teeth can make you sick.

There are common everyday items in your home that if abused, can kill you. It’s that simple. If you’re going to be handling medicines, like Tylenol, it’s up to you to understand the risks. Managed properly, I see no reason why you can’t have two Tylenol and manage not to kill yourself. However, since the FDA (or the whole Obama Administration for that matter) seems to want to regulate EVERYTHING in our lives, it doesn’t surprise me they want to now take Tylenol away.

It’s not like you can grind up Tylenol and make crack. That legislation is asinine enough. In our quest to make it “difficult” for “crystal Meth” makers to make methylamphetamine, every person in America is treated like a criminal and has to register, sign paperwork, and show ID to get simple drugs like Sudafed. I suppose that’s next, I’ll need to sign a form saying I’m not an idiot and won’t ingest the whole bottle in one sitting if I buy a bottle of asprin.

One final statistic – the whole point of this is of course undergirded by the notion that over the counter medications are inherently less safe than those under qualified medical care. Last year in this country, approximately 800,000 people died as a result of medical mistakes in America’s hospitals. I’m not passing judgment on that figure, but if true, that’s the equiavlent of smashing a 747 straight into the ground every day for a year. I really think 56,000 people going to the ER, while tragic, is a small percentage of the millions of people who manage to take these drugs and not kill themselves doing so.

Given this administration, I think I need all the Tylenol I can get my hands on.

Yes, the Government literally wants to answer the question, “How many bureaucrats does it take to screw in a lightbulb?”

Answer? One – the President. And it better be one of those little curly-q light bulbs too.. incandescent/tungsten bulbs are so 1990’s now.

President Obama announced Monday that he is setting new standards for fluorescent and incandescent lighting as part of a series of steps to promote energy efficiency across the country. “I know light bulbs may not seem sexy, but this simple action holds enormous promise because 7 percent of all the energy consumed in America is used to light our homes and businesses,” the President said, standing alongside Energy Secretary Steven Chu at the White House a few hours ago.

I’m sure that soon the Energy Department will announce a credit or a coupon as part of the stimulus package where if you’re unable to screw in your own lightbulbs… someone from ACORN will come to your house and screw them in for you, free of charge.

This would be funny if it wasn’t absolutely ridiculous.

First of all, have you ever used those bulbs? I’ll be frank – they suck. They more than suck. They really suck. They do not generate the same amount of light at the same intensity. One day the wife convinced me to go and buy a bunch of them from Ikea. So we bought like 30 of them. We changed every bulb in our house. Why? Well, allegedly they save energy. A fair amount of energy as a matter of fact. So I thought, “well hey, if we can get the same amount of light and pay less – why not do that?”

Well guess what, they save energy by reducing the amount of LIGHT output as well. It’s not efficient to say “hey, my car gets better gas mileage when I drive it less.” Efficiency is being able to do the same task for less energy.

The bulbs have gotten a bit better since my foray into curly-q bulbs in 2005, but in my view they still suck. I’d use them if they didn’t suck, because, as the guy who pays the electric bill, I’m well aware that little consumption changes can lead to big changes in the electric bill. President Obama doesn’t need a government program to convince me to reduce my expenses, I do that on my own thanks. If the light bulbs were worth it, I’d buy them.

The President has stated that he believes that between 2012 and 2042, the new standards on light bulb efficiency would save consumers up to $4 billion a year, reducing emissions of greenhouses gases “equal to the amount produced by 166 million cars each year.’’ Of course, there is nothing but specious science and alleged “data” to back that up. The president said he is also speeding the release of $346 million under his economic recovery act to expand the use of energy-efficient technologies in residential and commercial buildings. So I guess once again, the little guy gets screwed in favor of “big business,” ACORN is going to to change their light bulbs for office parks first.

People do not need government programs to save money. What they need is options. The market can provide these options if there is sufficient incentive to do so. If high efficiency lightbulbs really do work, then people will buy them. Why pay more for light when you don’t have to. Most people figure that out.

Instead, what will happen is we’ll have the light bulb equivalent of the toilet debacle. Congress decided in order to save water, we should redesign our toilets to flush less water. Ok – ever use one of those? They suck too (or rather don’t suck enough). Because the pressure to get the “matter” through the pipe is half of what it used to be, most of the times you wind up flushing twice. Now, I must admit that Kohler has come up with a really good non-pressurized toilet that flushes quite well. Guess what -that puppy costs about TWICE as much as a normal toilet did. So, where exactly is the savings? In the end, nothing in my house flushes as well as the old fashioned one that is 3.5 gallons. Doesn’t matter what goes in the bowl – it’s gone – one flush.

As a matter of fact, my understanding is that old toilets are salvaged with the higher flush volumes because there is a secondary market for them. By and large, people hate the “high efficiency” toilets. I’m sure you don’t think about that much – but the next time you’re “on the throne” understand, Uncle Sam cares about your waste. He cares so much, he even designed the toilet. I mean, how ridiculous is that?

I wonder if I’ll be able to salvage real light bulbs… since the new ones suck. Otherwise, I’ll be condemned to sitting in eye-harming twilight on my non-flushing toilet.

So when the President is joking how he has enough to do… claiming he doesn’t want more of your liberty… ask why he’s in your bathroom regulating your toilets and your lightbulbs. Hope and Change…. Barack Obama.

This is the regime who wants to obtain nuclear weapons. This is the regime that our President seems committed to legitimizing.

If the sin of the Bush Doctrine was threatening conflict before it was appropriate, the sin of the Obama Doctrine is ensuring US surrender before the first shot is even fired.

Consider for a moment this: The United States has stated it is committed to a policy of prohibiting the Iranians from having a nuclear weapons program. The United States has stated for some 30 years it wants to see regime change in Iran (although in the last six months, official policy seems to have changed considerably). The United States has ruled out the direct intervention into Iran to depose the regime. Absent changing the regime in Iran, there is no reason to believe it will be dissuaded in attempts to develop nuclear weapons. Presently, internal forces within Iran are weakening the regime’s grip and have focused international attention on the internal contradictions of Iran’s government and repression of the people. Given these facts, what is the appropriate course of action?

According to the President – go have ice cream with the kids.

I don’t begrudge the President the right to spend time with his children on Father’s day. I do point out, however, that President Bush (41) was mercilessly criticized for going fishing at Kennebunkport, Maine, during the Gulf War crisis; a move that was intentionally calculated and widely publicized to show our enemies that “we’re so confident in our ability to ‘kick your ass,’ I’m off fishing – perhaps you should consider that.”  I suppose President Obama’s aides would argue a similar line of reasoning if anyone criticized the President for appearing disinterested in the Iranian crisis (something I’ll get to in a moment). However, I think the President truly does go through life with few cares, beyond trying to figure out what he needs to do today to move his legacy that much closer to being deified.

Out having ice cream with the kids is just the latest in a series of disheartening events that have begun to show us what the Obama doctrine truly is – surrender or disinterest in the actions of tyrants, isolationism, and withdrawal before a shot in anger is even fired. While children are being hurled off bridges in Iran by ruthless Islamic fascists, our President is out at 31 flavors getting frozen custard.

It’s good to live in America.

Susan Rice, the US Ambassador to the United Nations, said this weekend that, “The legitimacy of the government, while questioned by the people of Iran, is not the critical issue for the U.S. goal of preventing Iran from developing a nuclear weapons capability.” In other words, regardless of who wins the election, be it Mousavi or Ahmadinejad, the US will stand ready to get in there and have that big summit in Geneva. Wow, I’m sure that’s got the attention of the Iranians.

The President said on June 26, 2009, with Chancellor Merkel:

The Chancellor and I discussed the tragic situation in Iran.  Today we speak with one voice:  the rights of the Iranian people — to assemble, to speak freely, to have their voices heard — those are universal aspirations.  And their bravery in the face of brutality is a testament to their enduring pursuit of justice.  The violence perpetrated against them is outrageous.  Despite the government’s efforts to keep the world from bearing witness to that violence, we see it and we condemn it.  As I’ve said before, the Iranian people will be the ultimate judge of their government’s actions.  But if the Iranian government desires the respect of the international community then it must respect the rights, and heed the will, of its people. [1]

Of course, the way you ensure the respect of the international community, and the respect of human rights, is to impose no sanctions at all on malfeasance. Every parent knows that you should never punish your child for bad behavior, since of course punishment might tell the child what’s right and what’s wrong, and we wouldn’t want to do that. Just as every person knows that regardless of what anyone else ever does to you, you should of course continue to help everyone you come into contact with; doesn’t matter if they steal from you, if they treat you badly, if they abuse you. You must never impose a consequence on them for that would possibly make them upset with you.

That is what the Obama doctrine is – bureaucratically codified timidity. It is a choice to be weak.

The President really imposed some sanctions on Iran last week – Ahmadinejad doesn’t get to come to the White House weenie roast over Fourth of July. Wow. I mean, I’m sure he’s in his palace going “What the hell! What will I do now? I’ve got weenies and I was hoping to roast them.” I’m sure Ahmadinejad is really bummed out; he was having Cole slaw made and everything.

I can’t wait to see what President Obama will do next. I mean, maybe we’ll next say to Ahmadinejad he can’t come to the White House Christmas party. Having been to those under President Bush, they’re quite the affair – you get the run of the White House and see things that few people ever get to see. I mean, I know he’s dying to go to that party. I’m sure he’ll give up his nuclear weapons programs for that… or at the minimum, stop throwing people off of bridges.

It is nothing but fanciful stupidity that constitutes Obama doctrine. When during the campaign some of his advisers said they would base foreign policy on fairy tale books, I really thought it was allegorical, not reality. The President thinks he’s a genius, up there being coy on Iran, while that government throws innocent people off bridges, shoots people in front of cameras in broad daylight, murders innocent civilians by the bushel. I say to you, dear reader, that our President is undoubtedly a cold and calculating person who must truly be unfeeling towards his fellow man. How else can one explain both his domestic and international foreign policy agendas which are clearly indifferent to suffering?

Meanwhile, the President thinks he’s being “really tough” on North Korea – a state I’d point out already has nuclear weapons. The President is busy poking that tiger cage with a stick with no plan on what to do if the tiger reaches out. North Korea is threatening to launch a missile against Hawaii – US sovereign soil! Our President decides, better move the radar closer to Hawaii. I must admit, I’m a bit amused by jokes saying the President doesn’t care if Hawaii gets obliterated since that would solve his alleged birth certificate problem. That would be funny if the North Korean’s weren’t just crazy enough to try and launch a rocket at us.

Another course of action might be to tell that two-bit dictator in Pyongyang that if a rocket comes even close to Hawaii, his little palace and stash of brandy and platform shoes will be annihilated. We can’t do that of course – too arrogant of us to suggest we have a right of self defense. I mean, according to the President and his advisers, that’s what really was responsible for 9-11, our arrogance. That’s why the President went to Egypt to get down on his hands and knees and beg for Allah’s forgiveness in that asinine and factually fallacious “Cairo” speech.

Meanwhile, we continue of course to be undeterred in our pyschophantic infantile prostration of America’s interests to try and win the favor of the French, the Germans, and the Italians. President Obama likes them, for whatever reason, and has adopted their foreign policy of giving in to every demand, regardless of how insane.

So, let’s recap shall we. Iran is a threat to the United States and to the Middle East if it gets nuclear weapons. We (the United States) want to see a new regime there. Elements within Iran are currently challenging the regime. Our policy is to do nothing.

It’s a choice to be weak – a choice to be timid.

You know, when Biden said, “This President is going to be tested… and our response won’t be obvious,” that was an incredible understatement. I haven’t understood a single move this White House has made – neither has the rest of the World I might add. I doubt much the American people would have voted for Mr. Obama had his slogan had been “Hope and run away” with regards to foreign policy.

————————————————————-

[1] http://www.whitehouse.gov/the_press_office/Remarks-By-President-Obama-And-Chancellor-Merkel-Of-Germany-In-Joint-Press-Availability/ (Accessed June 29, 2009.)

Its own drafters didn’t have a clue what was in it. Heck, they didn’t even have a full official copy of the BILL on the floor during the debates. That didn’t stop these Republican from breaking with what is the core of our party’s platform to enact what will be the second largest tax increase in American history (the largest tax increase is reserved for whatever President Obama manages to get through on “Deathcare”).

Let’s briefly review who flipped…

Mary Bono Mack (R-CA): I’m sure her constituents will love the fac that HR2454 will take more jobs away from Californians, do nothing to improve the ecological situation in California, and continue the depopulation of her state. Republicans in California clearly have lost their way. At a time when her state is imploding because of regulations and costs, one might think she would have some sense not to impose more. I guess not.

Mike Castle (R-DE): Delaware, the first state. It’s also the only state in the Union where the federal government is the primary employer in the state. Not that you care, Congressman, but I’m sure the struggling auto industry located in your state will enjoy the carbon credit markets that will cap their ability to obtain steel, the primary ingredient in making automobiles. But hey, if CAFE is good for the auto industry, since it has created all these jobs for the Auto industry and led them to sustainable profitability…  cap-and-trade is good for the nation… right? Cap-and-trade is CAFE for the entire country!

Mark Krik (R-IL): Hmm…. apparently we’ve decided we want our constituents to suffer more than they already are suffering. Elected in 2001, Mark Kirk represents the 10thdistrict in Illinois, which includes a very large swath of Chicago – basically from Waukegan to Glenview. I’m sure the people of Chicago will enjoy all the extra costs for daily life. Which will of course create tons of “green jobs” for the people of Chicago. I’m sure we can put windmills on the top of the Sears Tower and, oh gee I don’t know, convert plankton from Lake Michigan into usable energy. While your at it Mr. Kirk – why not pass a resolution demanding the EPA figure out how to turn horse manure into gold.

Leonard Lance (R-NJ): New Jersey Republicans can be a strange breed sometimes. New Joisy-ites can be fiercely liberal, but call themselves Republican. They can also be fiercely conservative to the point of almost being extreme. Most of my relatives live in NJ, thus, I’ve seen this up close. NJ-7 is northern New Jersey, thus, I suspect they’ll love all the new energy hikes, especially the farmers up there. I’m also sure the truckers on the turnpike will enjoy the extra costs tacked on to gasoline. And of course, NJ is such a bastion of economy activity, I’m sure the energy taxes will have no effect on the unemployment rate for that district – already at like something like 11%. Green jobs for all I’m sure…. Instead of farm produce, windmills will be sprouting up all over the green hills of New Jersey (oh by the way, there isn’t enough wind there to run windmills).

Frank LoBiondo (R-NJ): LoBiodno’s district is southern NJ. For all intensive purposes, it’s Delaware’s constituency. Given Castle’s vote, it’s not all that shocking LoBiondo voted this way. Moreover, his constituents will suffer all the same harms as Lance’s and Castle’s constituents. A me too vote. Good job! Way to think for yourself!

John McHugh (R-NY): With the exception of Peter King, I’m convinced every Republican in New York in the House is the result of some affirmative action program of the New York Democratic Party. The 23rd district is effectively the leftists liberals of Vermont. Not all that shocking he voted for cap-and-trade. Again, less jobs for the farmers up there. More expensive costs for shipping goods. Higher unemployment for the people of Northern New York State. I’m in a New York state of mind….

Dave Reichert (R-WA): Now this one really does have me puzzled. Reichert’s district, Washington 8, is not exactly conservative country, but it isn’t a bastion of the left either. Reichert was the Sheriff of King County and beat out his democrat rival by 4 percentage points when he first ran in 2004. Reichert was an extremely vulnerable Congressman electorally in 2008  – and not everyone thought he’d make it. He barely won, and he’s only at 52.7%. Given the district is so deeply (and evenly) divided, all I can conclude is that in the end he felt it was better to vote for increasing taxes than against it. Barack Obama solidly won the 8th District, but Reichert barely squeaked out a win. His constituency seems a bit confused in the voting pattern. I’m guessing Riechert is betting that supporting Obama is better than voting against him. My recommendation, Dave, switch parties… it will be easier.

Chris Smith (R-NJ): Like Lance and LoBiondo, Smith faces a mixed, mostly democrat, electorate. Trenton is in his district, and what Trenton makes, the world takes (or so says that stupid sign on the train line). This vote isn’t too hard to figure out. To win his district he needs to win Trenton. So to win Trenton, he backs the President. More unemployment for an already disastrous economy in Trenton. Yay!

Now, what’s wrong with this picture? All eight of these Republicans voted against what is undoubtedly the worst and most unnecessary piece of legislation ever conceived. These eight Republicans empowered the President and gave the Democrats the votes they needed.

It’s simple – they’re not Republicans.

Now I don’t say this lightly. To be a true partisan, you have to adhere to certain principles. HR 2454 violated every Republican principle I can think of – it increased taxes, it lowered competitiveness, it creates onerous trade imbalances, it ships jobs off shore, it’s regressive to growth, it’s oppressive to the individual. I mean, I can think of few pieces of legislation that would hit more hot buttons than this one. I suppose if Cap-and-Trade had included a provision to dissolve the Republic, that might be the perfect trifecta. Short of that, this bill should have (and did for the most part) repulse anyone who dares to call himself a Republican.

For these eight, to win in their districts, these Republicans are really closet Democrats. They’re not conservatives. They’re not Republicans. They’re democrats. And you know what, they’re representing the will of their constituencies, who are by and large democrat and democrat leaning. I think that most of them screwed up, giving their constituencies what they wanted in the short run at the expense of their long-term benefits. However, House members are creatures of 24 month cycles of fundraising. They’re always under the gun – every second. Until they hit 60% in re-election, they are vulnerable to getting bounced. That means you deliver pork pork pork pork and more pork. That means you pander to the interest of the constituency. Quite frankly, that’s what the Constitution intended.

Thus, I don’t criticize these people for their vote. They voted what their constituencies wanted.

But we need to recognize who indeed they are – they’re Democrats. They’re in Democrat districts. They can call themselves Republicans, but as this vote clearly shows – they’re not. Now I’m not saying kick them out of the Party… that’s for the electorate in the Republican parties of those states to decide through the normal primary/caucus means they have adopted. However, this vote alone must make the partisans in their states wonder if they’re really on the right side of the fence.

Kicking them out, however, doesn’t solve our problem. Their Districts need to be convinced of our “case” for conservatism… then real Republicans need to bounce these people out of office. The reality is, Ronald Reagan couldn’t win in Maine. That’s why Vichy-Republicans like Snowe and Collins are there – they’re good at delivering for their constituents and their constituents have sucked down the liberal rhetoric lock-stock-and-barrel. Those states don’t accept our principles as being valid – conservatism. Thus, if you want conservatives in those states, you have to start at the grass roots level trying to get supporters. That is how Reagan won 48 states in 1984.

It is also what Democrats do – they start very low and build a very strong organization. Following their loss in 2004, the DNC has been working very hard to solidify its control by frightening the poor, minorities, and “dying industry” workers that only the government can save them. That’s why they’ve got a lock on every major metropolitan area. It’s not because their policies are better for the inner city – they’re not. They breed ghettos, misfortune, and misery. But very loyal voters go out and vote for them, because Republicans do a lousy job at convincing those districts that the “real hope and change” is with making things better, not giving away “lollipops” to ease the pain.

I’m rather disgusted today. HR 2454 was Waterloo… and Wellington lost.

Q Thank you, Mr. President. Two of the key players in the insurance industry, America’s Health Insurance Plans and Blue Cross-Blue Shield, sent a letter to the Senate this morning saying that a government health insurance plan would “dismantle” private insurers. Why are they wrong? And secondly, this public plan, is this non-negotiable? Would you sign a health care bill without it?

THE PRESIDENT: Well, let’s talk first of all about health care reform more broadly.

I think in this debate there’s been some notion that if we just stand pat we’re okay. And that’s just not true. You know, there are polls out that show that 70 or 80 percent of Americans are satisfied with the health insurance that they currently have. The only problem is that premiums have been doubling every nine years, going up three times faster than wages. The U.S. government is not going to be able to afford Medicare and Medicaid on its current trajectory. Businesses are having to make very tough decisions about whether we drop coverage or we further restrict coverage.

What? First of all – let’s decouple the failed programs of Medicare and Medicaid from privately (employer) paid health insurance because they’re not related. There is no basis to suggest they are related. Secondly, the “U.S. government will not be able to afford Medicare and Medicaid,” because of the mismanagement of the government and the false premise that we can manage health care of the elderly and the poor through intergenerational wealth transfers in the form of income taxes on workers. Given the fact that Medicare and Medicaid are broke, one might conclude that perhaps afllicting that broken system on all Americans through Universal Health Care run by the Government is a bad idea. Apparently not for the President.

Next, yes premiums have been doubling every nine years. And medical costs have been skyrocketing. However, it has not been shown at all that is because of the fact that government hasn’t regulated health care. For example, some reasons why health care costs have been rising (along with premiums) have to do with the explosion in the use of pharamacology to treat illnesses, defensive medicine, the lack of accountability of the individual for direct costs (since insurance is forced to cover so much under the HMO acts of the 1970’s), etc.

Finally, businesses do not make decisions regarding coverage, employees do. Businesses who need qualified workers provide insurance to those workers, because otherwise their labor pool dries up. Employees ultimately decide what health care packages they’ll accept when they make employment decisions. If businesses have to trim back health care coverage, it’s because the economic conditions are such they’re choosing a cost containment strategy. The President should be asking himself why, despite all this stimulus, busineses are still in cost containment mode.

So the notion that somehow we can just keep on doing what we’re doing and that’s okay, that’s just not true. We have a longstanding critical problem in our health care system that is pulling down our economy, it’s burdening families, it’s burdening businesses, and it is the primary driver of our federal deficits. All right?

No, Mr. President, it’s not all right. You can’t show me for a fact that we have a long-standing critical problem pulling down our economy, and you most assuredly haven’t shown that somehow the “massive albatross” around our necks is caused by “privitized” insurance. What burdens families and businesses is the fact that they can’t chose for themselves how to pay for and obtain medical care. What burdens them is the 50+ years of government regulation that has made it nearly impossible for the recipient of care to be the primary payer of care. That disjointedness is what has caused the price and efficiency distortions in the market – not the lack of universal health care.

So if we start from the premise that the status quo is unacceptable, then that means we’re going to have to bring about some serious changes. What I’ve said is, our top priority has to be to control costs. And that means not just tinkering around the edges. It doesn’t mean just lopping off reimbursements for doctors in any given year because we’re trying to fix our budget. It means that we look at the kinds of incentives that exist, what our delivery system is like, why it is that some communities are spending 30 percent less than other communities but getting better health care outcomes, and figuring out how can we make sure that everybody is benefiting from lower costs and better quality by improving practices. It means health IT. It means prevention.

Well if we start from the premise I can turn horse manure into gold – then everyone get’s rich. So we can start with any flawed premise, thrown in a dash of stupidity, and wind up with a completely nonsensical result. That aside, there is no basis to conclude that “cost control” comes at the hand of the government. Secondly, the only “lopping off of reimbursements for doctors” that the government could conduct would be screwing doctors over on Medicare and Medicaid reimbursements… which the government has done now for about 20 years. As a result, many doctors refuse to even deal with those programs because of the draconian and onerous processes.

Finally, even if I accept all that crock of nonsense you list as the solution – how does “universal health care” provide any of it.

So all these things are the starting point, I think, for reform. And I’ve said very clearly: If any bill arrives from Congress that is not controlling costs, that’s not a bill I can support. It’s going to have to control costs. It’s going to have to be paid for. So there’s been a lot of talk about, well, a trillion-dollar price tag. What I’ve said is, if we’re going to spend that much money, then it’s going to be largely funded through reallocating dollars that are already in the health care system but aren’t being spent well. If we’re spending $177 billion over 10 years to subsidize insurance companies under Medicare Advantage, when there’s no showing that people are healthier using that program than the regular Medicare program, well, that’s not a good deal for taxpayers. And we’re going to take that money and we’re going to use it to provide better care at a cheaper cost to the American people. So that’s point number one.

If the bill is going to have to be paid for, then we better revisit my idea of turning horse manure into gold, because that’s possibly the only way to generate enough wealth to pay for it. There is a belief that Democrats (and Mr. Obama is no exception) have that somehow the national income equation is completely fungible. I can take money from investment, and consumers, and give it directly to government, and then government can somehow transform that wealth into the same things that individuals would have been able to do for themselves. So in other words, the government can take on the bill for everyone for health care, and somehow we avoid two problem: 1) scarcity of resources, including medical care, and 2) the inefficiency of government in distributing money. That’s just plain stupid. That’s point number one Mr. President.

Number two, while we are in the process of dealing with the cost issue, I think it’s also wise policy and the right thing to do to start providing coverage for people who don’t have health insurance or are underinsured, are paying a lot of money for high deductibles. I get letters — two, three letters a day — that I read of families who don’t have health insurance, are going bankrupt, are on the brink of losing their insurance; have deductibles that are so high that even with insurance they end up with $50,000, $100,000 worth of debt; are at risk of losing their homes.

And that has to be part of reform, making sure that even if you’ve got health insurance now, you are not worried that when you lose your job or your employer decides to change policies that somehow you’re going to be out of luck. I think about the woman who was in Wisconsin that I was with, who introduced me up in Green Bay — 36 years old, double mastectomy; breast cancer has now moved to her bones and she’s got two little kids, a husband with a job. They had health insurance, but they’re still $50,000 in debt, and she’s thinking, my main legacy, if I don’t survive this thing, is going to be leaving $100,000 worth of debt. So those are the things that I’m prioritizing.

Well, that sucks no doubt. I’m sure there are lots of horror stories in the world about people. No one is suggesting they don’t need compassion or pity. But if you want to make health care more affordable, what makes more sense, attempting to have everyone have their health care paid through the government, and centralizing scaricty with the bureaucracy, or diffused health care provided by private providers and insurers, so that supply can contract and expand according to the efficiencies of supply and demand. That’s what this debate is really about, not that Joe Blow lost the farm and Lucille picked a fine time to walk out. I can equally provide horror stories of death and misery in single payer plans. In the end, most of these people who are “bankrupt” are alive and got care. Perhaps bankruptcy for medical bills needs to be looked at. Perhaps we need to look at how reserves are created for hospitals to provide medical attention to those who can’t pay. Perhaps we need to increaes supply of medical services so that prices fall. All of these things stop people from going bankrupt because of the high costs of medical care.

Now, the public plan I think is a important tool to discipline insurance companies. What we’ve said is, under our proposal, let’s have a system the same way that federal employees do, same way that members of Congress do, where — we call it an “exchange,” or you can call it a “marketplace” — where essentially you’ve got a whole bunch of different plans. If you like your plan and you like your doctor, you won’t have to do a thing. You keep your plan. You keep your doctor. If your employer is providing you good health insurance, terrific, we’re not going to mess with it.

Let me be clear – under a public plan, there won’t be any private insurance. The government will (and in fact must) eliminate the private sector. Show me a single government that has dual-managed care? If the focus is on cost containment, that’s simple, you fix the amount you’re willing to spend, and you ration.

But if you’re a small business person, if the insurance that’s being offered is something you can’t afford, if you want to shop for a better price, then you can go to this exchange, this marketplace, and you can look: Okay, this is how much this plan costs, this is how much that plan costs, this is what the coverage is like, this is what fits for my family. As one of those options, for us to be able to say, here’s a public option that’s not profit-driven, that can keep down administrative costs and that provides you good, quality care for a reasonable price — as one of the options for you to choose, I think that makes sense.

And of course the Government plan will provide free cookies, and donuts, and coffee, plus free MRI’s and all the other health goodies anyone could possibly want… for $6 a year. Then once private insurance is imploded, and everyone’s on Deathcare, well then we can talk about who get’s what.

It’s insidious.

Q Won’t that drive private insurers out of business?

Yeah I’ll answer that for you B – I got it right here um… yes.

THE PRESIDENT: Why would it drive private insurers out of business? If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal, then why is it that the government — which they say can’t run anything — suddenly is going to drive them out of business? That’s not logical.

If the health care don’t fit… accquit. That’s the logic huh. Okay, let me spell it out for you. The government gets to ascribe what the box looks like for private health care (or for any market for that matter). So if the private market gets told, you have to now provide X coverage to people, then the companies will try to find a way to do that. Inevitably, the government will have health care plans that promise great benefits for no expense (it can do that initially because of the fact that few are going to jump ship, and Obama knows this). Since the government, under the Deathcare bill, will mandate certain types of coverage, irrespective of risk, businesses will implode. Go ask a mortgage banker how well it works to make loans irrespective of risk. It’s the same thing.

Now, I think that there’s going to be some healthy debates in Congress about the shape that this takes. I think there can be some legitimate concerns on the part of private insurers that if any public plan is simply being subsidized by taxpayers endlessly, that over time they can’t compete with the government just printing money.

Yeah. That’s exactly what you want in the end though, isn’t it Mr. President. Presses running night and day printing cash for health care no one will want, and few will really ever get as “planned.”

So there are going to be some I think legitimate debates to be had about how this private plan takes shape. But just conceptually, the notion that all these insurance companies who say they’re giving consumers the best possible deal, that they can’t compete against a public plan as one option, with consumers making the decision what’s the best deal. That defies logic, which is why I think you’ve seen in the polling data overwhelming support for a public plan. All right?

And what poll would that be, going around the cabinet room in the White House and asking that collection of nimrod yes-men you appointed if they want Deathcare? No wait, don’t tell me, it was that push-polling done by the New York Times and CBS news on June 20th that was so gleefully reported on by the likes of Huffingtonpost. The one where allegedly 85% of all Americans want Deathcare? Is that the one we’re talking about Mr. President? The poll that was refuted by the non-in-the tank polling firms who were so shocked by the nonsense they felt compelled to go out and poll with real polling methods to make sure their polling numbers weren’t completely backwards? (Oh and by the way, the found a completely different result I might add). Instead of 85% of people saying “Yes! Screw us Mr. President,” according to Rasmussen’s polling, which wasn’t a 3-1 sample of confirmed Obama-voting Democrats to Republicans like the NYT/CBS poll, the country is pretty evenly divided, 41-41%. (See this link.) 

Q Is that non-negotiable?

President decided – pound sand on that question. Jake Tapper took it up in a moment…

Then we had the next round of questions. The plot thickens. Jake Tapper (that rable rouser) probes the Obama defensive line.

Q Then I have a two-part question. (Laughter.) Is the public plan non-negotiable? And while I appreciate your Spock-like language about the logic of the health care plan, the public plan, it does seem logical to a lot of people that if the government is offering a cheaper health care plan, then lots of employers will want to have their employees covered by that cheaper plan, which will not have to be for profit, unlike private plans, and may possibly benefit from some government subsidies, who knows. And then their employees would be signed up for this public plan, which would violate what you’re promising the American people, that they will not have to change health care plans if they like the plan they have.

THE PRESIDENT: I got you. You’re pitching, I’m catching. I got the question. First of all, was the reference to Spock — is that a crack on my ears? (Laughter.) All right, I just want to make sure. No?

Q I would never make fun of your ears, sir. (Laughter.)

THE PRESIDENT: In answer to David’s question, which you co-opted, we are still early in this process, so we have not drawn lines in the sand other than that reform has to control costs and that it has to provide relief to people who don’t have health insurance or are underinsured. Those are the broad parameters that we’ve discussed.

There are a whole host of other issues where ultimately I may have a strong opinion, and I will express those to members of Congress as this is shaping up. It’s too early to say that. Right now I will say that our position is that a public plan makes sense.

Now, let me go to the broader question you made about the public plan. As I said before, I think that there is a legitimate concern if the public plan was simply eating off the taxpayer trough, that it would be hard for private insurers to complete. If, on the other hand, the public plan is structured in such a way where they’ve got to collect premiums and they’ve got to provide good services, then if what the insurance companies are saying is true, that they’re doing their best to serve their customers, that they’re in the business of keeping people well and giving them security when they get sick, they should be able to compete.

Now, if it turns out that the public plan, for example, is able to reduce administrative costs significantly, then you know what? I’d like insurance companies to take note and say, hey, if the public plan can do that, why can’t we? And that’s good for everybody in the system. And I don’t think there should be any objection to that.

Yeah. Right. Hey, if the government can print money and tax the crap out of people, why can’t I? Makes perfect sense to me. I don’t know why private businesses didn’t think of this earlier! The private plans will never be able to compete with the Government because the government will always define the rules in favor of the house.

Now, by the way, I should point out that part of the reform that we’ve suggested is that if you want to be a private insurer as part of the exchange, as part of this marketplace, this menu of options that people can choose from, we’re going to have some different rules for all insurance companies — one of them being that you can’t preclude people from getting health insurance because of a pre-existing condition, you can’t cherry pick and just take the healthiest people.

God forbid insurance be based on risk profiles. Of course, see if you’re fighting a war of attrition with someone, the last thing you want is for him to be able to wait you out by making you absorb higher losses. So as I’ve stated, you write the rules so that your strengths (infinite money supply) outweigh his strengths (better ability to judge risk).

So there are going to be some ground rules that are going to apply to all insurance companies, because I think the American people understand that, too often, insurance companies have been spending more time thinking about how to take premiums and then avoid providing people coverage than they have been thinking about how can we make sure that insurance is there, health care is there when families need it.

All I understand, Mr. President, is that whenever you start talking ground rules, usually people wind up being fired and attorney’s general wind up suing people to give back bonuses, compensation, and other contractual rights. Secondly, demonizing insurance companies… as opposed to what… the brilliant extortionist system of federal taxes that “pay” for Medicare and Medicaid that are now bankrupt?

But I’m confident that if — I take those advocates of the free market to heart when they say that the free market is innovative and is going to compete on service and is going to compete on their ability to deliver good care to families. And if that’s the case then this just becomes one more option. If it’s not the case then I think that that’s something that the American people should know.

If you were a capitalist, Mr. President, then you would be looking to reduce government controls, not increase them. This “exchange” is ilke cap-and-trade… it has the government picking winners and losers. That’s not a free market – that’s cartelism.

Q I’m sorry, but what about keeping your promise to the American people that they won’t have to change plans even if employers –

Wait wait wait wait wait… take a breath… because this is going to be the only time the President tells a about 80% of the real truth… sit down if you’re not… because President Obama is about to refute his own campaign promises… are you ready… okay… now read.

THE PRESIDENT: Well, no, no, I mean — when I say if you have your plan and you like it and your doctor has a plan, or you have a doctor and you like your doctor that you don’t have to change plans, what I’m saying is the government is not going to make you change plans under health reform.

D’oh! And all this time I thought I’d keep my medical plan… silly me.

Now, are there going to be employers right now — assuming we don’t do anything — let’s say that we take the advice of some folks who are out there and say, oh, this is not the time to do health care, we can’t afford it, it’s too complicated, let’s take our time, et cetera. So let’s assume that nothing happened. I can guarantee you that there’s a possibility for a whole lot of Americans out there that they’re not going to end up having the same health care they have, because what’s going to happen is, as costs keep on going up, employers are going to start making decisions: We’ve got to raise premiums on our employees; in some cases, we can’t provide health insurance at all.

What, if any, evidence has the President provided any of that is true. None I’m aware of… None.

And so there are going to be a whole set of changes out there. That’s exactly why health reform is so important.

Yep. We’re going to completely break the US through “health care reform” if we have your way at it.

Don’t believe for a second it can’t happen here. This is exactly the consequence of what the President is proposing. I challenge anyone to show me otherwise.

Part of the reason why revelations like Gov. Sanford’s hurt the Republican party so much is we hold ourselves to a high moral standard. One element of that standard is, you don’t cheat on your wife. Thus, if a Republican goes out and has an affair, it is much more of a problem than if a Democrat does. No one expects Democrats to have any adherence to a standard because the party enforces no such standard. Democrats don’t run on “family values,” nor do they run on the “rule of law” as their platform guidance. Hence, Democrats who have problems in these areas tend not to be excoriated by the media, their critics, and the party. 

In contrast, accepting personal responsibility and having party leadership hold its members accountable is a Republican standard. If you’ll recall, Speaker Hastert took considerable criticism from within the party following his handling of the “Foley” affair. Republicans don’t like having people in power who have demonstrated bad judgment. That’s part of the reason why Sen. Ensign resigned his position on the republican policy committee.

But back to Gov. Sanford – it’s a shame. Sanford’s experience and time as govenor of South Carolina made him a potential candidate for the 2012 Presidential race. He is a conservative that advocated free market principles. He was starting to get favorable press, become a leader within the broader party, and seemed to stand for the things that most of us conservatives believe in. Thus, out of darkness he makes this revelation that he was having an affair in Argentina makes it unfortunate. POW! Frying pan to the head! While I doubt sincerely that Sanford was the next Ronald Reagan, he had a promising career in the party. Given his actions, I’d say his career is over. He may or may not serve out the rest of his term as Govenor, but it seems any chance at the oval office is slim to none. A man who would lie to the public, cheat on his wife, and neglect is public duty has no business being in the White House.

And to make it doubly sinister – he sneaks off to have sex with his girlfriend over Father’s Day? Insult to injury for the family values crowd.

Without question, this is his “macaca” moment.

Who will benefit from this implosion – who knows. The party definitely isn’t a benefactor, although I prefer it happens now versus happening on the campaign trail like it did with Clinton, Obama, and Edwards. Had Senator Edward’s revelations come out sooner, Obama may have prevailed earlier, or Clinton may have won. Had Sen. Edwards’ affair come out sooner, the course of the race might have been different. Thus, if there is a good side to this – it was the fact that the explosion came when it would do the least amount of political damage to the party as a whole. I’d say Senator Jim DeMint’s stock went up a few notches. Between his leading the charge on health care and others, he’s emerging as a solid national leader for conservatism. Palin? She may benefit… but her star is busy zig-zagging around. It’s tough to tell what help/harm it causes for her.

Quite honestly, unlike Sen. Allen’s “macaca” moment, it is entirely possible that Sanford’s career may be retrievable. I really don’t know if it is. The affair aside, the bottom line is he’s still acted like a flake, lied to the public, and been a complete nitwit the past week. I really don’t know if I’d ever want a guy like that with his finger on “the button”. I have no doubt that Gov. Sanford will come to Jesus, see the light, reform his ways,  repent, buy his wife a diamond ring, throw himself on the mercy of the people of the State of South Carolina, or whatever. He’ll sufficiently atone. I’m waiting for the “I have a drug problem” remark myself. He can check himself into Betty Ford. When he gets out, maybe he can write a column in Slate oppposite another philanderer, and former fellow govenor, Elliot Spitzer. Since Spitzer’s career seems to be back on the mend (and let’s face it, Spitzer wasn’t just having sex with hookers, he was breaking the law to do so at the time and misappropriating public resources), perhaps there is hope for Gov. Sanford.

It’s hard not to be snide and sarcastic in these situations… it’s an old tune. Republican meets girl… Republican forgets family values… Republican destroys career. I mean, in the past 14 days alone, we’ve had two people, neither of whom anyone would have ever thought were cheating on their spouses, explode. It’s like old landmines in a field suddenly going off year later. BOOOM! (pause) BOOM! What more is to come I wonder.

But the billard balls are in motion… and they haven’t stopped. I suspect there is considerably more to this story. Why Gov. Sanford felt compelled to confess so soon upon his return tells me something more is afoot. Perhaps we’ll find out, perhaps not. It’s irrelevant at this point. His story hasn’t yet made sense beyond having the affair, and I suspect there will be more details. How charbroiled his career winds up actually being will be determined by just how many more shoes there are to drop.

If they “come in threes,” that means there is one more shoe to drop. This has been a tough month for the elephant, that’s for sure.