Saturday, July 16, 2011

Two Lies for the Price of One

Recently, President Obama responded to the question of a reporter about whether Social Security checks would go out on August 3 if the debt ceiling was not raise by August 2 by saying, “I cannot guarantee that those checks go out on August 3 if we haven't resolved this issue because there simply may not be the money in the coffers to do it.”

I have seen a few comments that this points out the lie that politicians have told for years that there is a Social Security trust fund that guarantees that Social Security benefits will be paid. In truth, the so-called trust fund is a promise by the rest of the government that when payroll taxes become inadequate to pay the Social Security benefits that they are intended to finance, the government will raise the money to pay the short fall – by either taxes or borrowing. In other words, the trust fund is not really backed by anything other than a bookkeeping entry and a promise by the government to pay – provided of course that it is able to.

What everyone seems to be overlooking, however, is that even in the absence of a trust fund and even in the middle of a weak economy, there are enough payroll taxes being collected to pay for nearly all of the Social Security benefits that need to be paid. More importantly, as long as they are needed to pay Social Security benefits, those taxes cannot legally be used for any other purpose; they are dedicated specifically for the purpose of paying Social Security benefits. In other words, there will be plenty of money in the coffers that can be used to pay for Social Security benefits and for no other purpose. There may be some shortfall, but I am so confident that the government can and will make up whatever shortfall there may be with the other tax revenue that comes in, that I will do what the President is unwilling to do and guarantee that Social Security benefits will be paid in full. Well, OK, I am not really guaranteeing that because I don't actually have the billions of dollars it would take to make good on such a guarantee, but the point is I think the President has made so many promises that he has no ability, and perhaps no intention, to keep that he overlooked that a promise to pay Social Security benefits on August 3 is one of the easiest promises off all to keep – no matter what happens with the debt ceiling by August 2.

Wednesday, May 04, 2011

The President's Real Plan to Improve the Health of Americans

I finally figured it out. President Obama has a plan to improve the health of Americans and it isn't the Patient Protection and Affordable Care Act (otherwise known as Obamacare). That was a distraction. The President was never really serious about that, as evidenced by the fact that he let Nancy Pelosi, Harry Reid, and the other Democrats in Congress write it for him with little or no help from the White House. He didn't care what it said because that is not his real plan to improve the health of Americans. To understand what his real plan is, you need to understand that that most of the health problems of Americans are related to obesity and physical laziness. You can tell just by watching the President that he is not a fan of obesity and sloth. For one thing, he is skinny. For another, have you ever seen him walk slowly up a flight of stairs? No! He jogs up stairs. Since I am a former resident of Chicago myself, I also recognize that he plays basketball Chicago-style – meaning it is not a foul unless blood is drawn and someone needs stitches. He is one tough dude, and he wants the rest of us to be equally tough. He wants us to eat less and get more exercise.

The main part of President Obama's plan to get us to eat less is to take an idea that began under a previous President's administration and run with it, and that is to require cars to burn ethanol in place of part of the gasoline that they burn. In simple terms, the idea is to make sure that we take crops that would normally be turned into food and burn them in our motor vehicles. We are converting about 40 percent of our corn crop into ethanol for fuel, which is probably healthier than turning it into ethanol for making liquor. Mixing ethanol with gasoline is less tasty than some other things you can mix ethanol with, but cars don't run well on mixed drinks. To make sure that it is American corn that is used to make ethanol for transportation and not something else, the American government does two things. First, it subsidizes growing the corn, using it to make ethanol, and making sure that the ethanol is burned as fuel. Second, it puts a stiff tariff on ethanol imported from Brazil, which is made from cane sugar and is much less expensive to produce. Obviously, the government's policy to encourage the burning of ethanol for fuel has nothing to to with benefits of ethanol, or we would be buying inexpensive ethanol from Brazil rather than paying extra to produce it here. The goal is obviously to reduce the amount of corn in the food supply. Since most corn in the United States is actually grown for animal feed, it affects the price of meat and dairy products even more than food made of corn. This makes it harder for Americans to get fat on a diet of bacon cheeseburgers and Doritos. It also has the unfortunate side effect of making food more expensive in the rest of the world. Since hungry people tend to get grumpy, this may have something to do with the rioting and demonstrations in other countries, but the President's responsibility is to the health of obese Americans and not to the health of starving foreigners.

The President's plan for getting Americans to exercise more is to get us out of our cars and walk or ride bicycles. The best way to do that is to raise the price of gasoline to the point that it is barely affordable for the average American. He had some help in this with the BP oil spill in the Gulf of Mexico about a year ago. He used it as an excuse to shut down much of the drilling for oil that was happening in the Gulf of Mexico and to delay the issuing of permits until after many of the deep water drilling rigs were moved to other parts of the world – like off the coast of Brazil. Maybe we can buy some oil from them to make up for the ethanol that they aren't selling us. Unlike most countries, which jump at the chance to tap energy resources, the policy of the United States seems to be to discourage oil companies from drilling where there might actually be oil, like in parts of Alaska that give the appearance of what hell would look like frozen over, and in shale oil deposits states in the middle of the country. One might think that discouraging domestic oil production might increase imports of foreign oil, but President Obama has been working on making less foreign oil available by stirring up a civil war in Libya, a major oil producing country, and using the time-tested Vietnam strategy of fighting just hard enough to make sure the war goes on for years without resolution. I guess he felt he had to do that because of the winding down of the long war in Iraq, another oil-producing country. Maybe if the fighting in Libya dies down, he can stir up enough unrest in Saudi Arabia to mess up their oil production. In any event, so far the President's strategy to get Americans to drive less seems to be working. The price of gasoline is more than double what it was when he became President and is continuing to climb.

The increased cost of food and gasoline will probably help me improve my health. My doctor wants me to lose some weight and says that a diet of bacon cheeseburgers and Doritos would be really bad for my health. I already took my bicycle to the shop to get it tuned up, so I am ready for the cost of gasoline to go up more. I am ready to lose weight and get fit. One thing bothers me, though, and that is how I am going to keep up the exercise when winter comes again. I haven't found any way to use snow tires or chains on my bicycle wheels. I guess I will need to buy snowshoes or cross country skis.

Wednesday, January 26, 2011

Rethinkin' Lincoln

Abraham Lincoln used to be one of my heroes. I bought into the idea that he was one of our greatest Presidents. After I graduated from law school and passed my Illinois bar exam and went to the state capitol in Springfield, Illinois for the swearing-in ceremony. While there, I visited Lincoln’s home, which is a national monument. A few years later I worked in the federal building in Fort Wayne, Indiana, across the street from what was then the national headquarters of the Lincoln National Life Insurance Company. I toured the Lincoln Museum, which is in Fort Wayne. I had some pride that Lincoln and I had something in common, which was that each of us had spent most of our childhood in Indiana. I have visited the Lincoln Memorial in Washington, D.C. and Ford’s Theater, where Lincoln was killed. I have visited the battlefield at Gettysburg, where he made is famous Gettysburg address. Lincoln is credited with freeing the slaves and saving the Union. However, after learning more about Abraham Lincoln and reflecting on what he did, I have begun to think that much of the legend of Abraham Lincoln is a result of the fact that the victors of wars get to write the history books. I still have great respect for many of his qualities as a human being; by all accounts, his nickname of “honest Abe” was well deserved. Also, nothing can take away from the fact that Lincoln was an outstanding orator and commander-in-chief. However, the fact that he launched the war that caused more American casualties than all other wars put together and contributed the process that has led to the Constitution to be ignored diminishes his reputation as a President greatly in my estimation.

Although the popular belief about the Civil War was that it was fought primarily over slavery, Lincoln himself had little interest in ending slavery and did not have a high opinion of African Americans. In 1858, in the fourth of the famous Lincoln-Douglas debates, he declared that he was not and never had been in favor in any way of bringing about the social and political equality of the white and black races, was not in favor of making them voters or jurors, qualifying them to hold public office, or to intermarry with white people. He went so far as to say that whites were superior to blacks and that the difference between whites and blacks were so great that they could never live together in social and political equality. In 1861, he supported a proposed amendment to the Constitution that would have prohibited the federal government from interfering with slavery in the states where it existed. Lincoln’s primary goal was to save “the Union” and he said that if he could save the Union by freeing the slaves, by freeing no slaves, or by freeing some slaves and letting others go free, he would do so.

Between the time Lincoln was elected President and his inauguration, seven states had seceded; the other four members of what was to become the Confederate States of America seceded shortly after his inauguration. If there were a strong consensus that states had no right to secede from the Union and that allowing them to secede was destructive, then perhaps Lincoln was justified in treating the southern states as rebellious and to launch the Civil War. However, an argument can be made states had (and still have) a right to secede and that whatever benefits there may have been to forcing them to stay in the Union was not worth the terrible cost. The U.S. Constitution does specifically whether states did or did not have a right to secede, although it does state in the preamble that one of the purposes of the Constitution was “to form a more perfect Union.” However, in their ratifying resolutions, the states of Virginia, New York, and Rhode Island reserved the right to withdraw from the Union if the new government became oppressive. In the nation’s history, the first states to give serious consideration to seceding from the Union were not the southern states, but the New England states because they perceived that the federal government was dominated by southern interests and because of opposition to the War of 1812. In the 1830s and 1840s, some abolitionists, most notably William Lloyd Garrison, called for northern states to secede because of the federal government’s support for slavery. Some felt that the breakup of the Union would encourage the end of slavery. Many of the Founding Fathers assumed that states had the right to secede from the Union. In short, the issue of whether states had a right to secede from the Union was not settled on the “battlefield of ideas” but was instead settled on real battlefields with real deaths, real injuries, and real disruption of lives.

The Civil War set new standards for incivility in warfare. Until then, the standards of warfare discouraged targeting civilians. The Union army, particularly the part under the command of General William Tecumseh Sherman, made a point of destroying homes, crops, and anything else in its path. By the time the war was over, it cost more American lives that all the other wars in American history combined. The Battle of Gettysburg was the biggest battle fought in the history of the Western Hemisphere. In addition to causing massive devastation, primarily to the southern states but also to the northern states, the Lincoln administration so dramatically increased government spending that the United States still has not recovered from the debt from the Civil War. It had finished paying the debts incurred by the American Revolution and was completely free of debt during the administration of Andrew Jackson. Before the Civil War, the federal government had never spent more than $75 million in a year. By the end of 1861, the first year of the war, it was spending $1.5 million a day, and in 1865 the United States became the first nation in history to spend more than a billion dollars in a year. Since then, the least the government has spent in one year was $236.9 million, in 1878. By the time the debt from the Civil War of about $2.8 billion was almost paid, the United States entered World War I and has not come close to being out of debt since. Although it is necessary at times for the nation to go into debt, it should make every effort to repay the debt within the generation that borrowed the money. Any debt that is not repaid during that generation must be paid by taxing future generations to pay not only the debt but interest. Since future generations could not vote and are saddled with taxes, this is taxation without representation. It is also a form of slavery - not as bad as the slavery that the Civil War ended, but slavery nonetheless.

What would have happened if Lincoln would have let the southern states secede rather than causing us to fight the bloodiest war in our history is subject to speculation. Slavery probably would have lasted a few years longer than it did, but with slavery disappearing in the rest of the world, it probably would not have lasted long. The states in the Confederacy may or may not have rejoined the Union. One thing that we can be sure of is that a lot of death, injury, destroyed lives and families, property destruction, and debt would have been avoided. Was preserving the Union really worth all that?

Sunday, January 02, 2011

The Immorality of Using Government to Redistribute Wealth and Income

Associated with the recent compromise in the United States Congress in which the “Bush” tax cuts, which were set to expire on December 31, 2010 were extended for individuals and couples of all income levels. That was essentially what the Republican Party wanted. The Democratic Party wanted the tax cuts extended only for individuals making less than $200,000 per year and couples making less than $250,000 per year. What made it a compromise was that to get the Democrats to agree, the Republicans gave up on their opposition to another extension of unemployment benefits. One of the arguments against extending the tax cuts for higher income households was that the “rich” can afford the higher tax burden and that it is unfair for them not to pay their “fair” share. Supporters of tax cuts for the higher incomes have been attacked as selfish and immoral. Arguments in favor of “soaking the rich” include biblical references to a duty to help the poor and that it is easier for a camel to pass through the eye of a needle than for a rich man to enter heaven. I am not a scholar of the Bible, and I am not even particularly religious, but I do know that the Bible places the duty to help the poor on individuals and not on government. It does mention a duty to pay taxes (“render unto Caesar what is Caesar’s”), but says nothing about what tax policies should be. The Bible is about the responsibilities of individuals and not of governments.

The thing that distinguishes a government from any other organization is that it is considered to have the legitimate right to use force and coercion to get some people to do things that they would rather not do or to refrain from doing things that they would rather do for the benefit of society as a whole. Since government is fallible and made up of fallible human beings, its use of force and coercion should be restricted to the legitimate functions of government. People may differ about what the legitimate functions of government are, but in my opinion, the legitimate functions of the federal government are pretty much those described in the Declaration of Independence and the Constitution. The Declaration of Independence says that the purpose of a government is to protect life, liberty, and the pursuit of happiness and that the people have a right to alter or get rid of any government that is destructive of those ends. The “enumerated powers” of the federal government are listed in Article I, Section 8 of the Constitution. Redistributing wealth and income is not among them

The use of coercion to redistribute wealth when done by any organization other than government is usually considered to be robbery. From a moral standpoint, it is robbery even when the government does it. All that keeps it from being robbery from a legal standpoint is that the government defines what the law is and it does not tend to make its own actions illegal. The Bible has something to say about robbery; it says, “Thou shalt not steal.” It also has something to say about desiring the property of others; it says, “Thou shalt not covet.” I submit that the promotion of the use of government as a tool to redistribute wealth and the envy of the rich that progressives in this country promote is stealing and coveting and is immoral.

I and other critics of government redistribution of wealth from the rich to the poor may be accused of being heartless and having no sympathy for the poor, but concern for the poor does not require acceptance of any and all means to help the poor, and one of the ways to help the poor is to help them avoid dependency on government. If they believe that they are “entitled” to relief from the government just because they are poor and therefore society owes them a closer approximation to equality of income and wealth, they are less likely to develop habits of self-reliance that tend to get them out of poverty and to keep them out without dependence on others. Studies sponsored by the American Enterprise Institute have indicated that conservatives (who tend to oppose the use of government to redistribute wealth and income give far more to charity (and real charity, not just contribution for fancier church buildings and things such as art galleries and opera houses) than do liberals, who tend to view helping the poor as a collective responsibility rather than an individual one. Want to help poor people? Then do it!