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I Support Our President

I support President Barack Obama and have since December 31, 2011 when he signed the National Defense Authorization Act of 2012 (“NDAA”).  I support him unequivocally.  My pledge remains in effect as long as the NDAA continues to authorize the President to indefinitely detain any American he or she thinks is a terrorist threat.

I support our Congress as well because it passed the law that President Obama signed last year.  This was a bipartisan law, passed by a Democratic-controlled Senate and a Republican House.  Therefore, I pledge my support to the Republican and Democratic parties, no matter what their positions.  I also state my support for President Bush, who claimed the same authority President Obama made official by signing the NDAA.

My pledge remains in effect until this law is repealed.

Let’s Go to Hong Kong or Snowden Si! Bush-Obama No!

I feel like going to Hong Kong to help form a human chain around the hotel where Edward Snowden resides to protect him from our government. He is the guy who, a few days ago, revealed to British and American newspapers the scope of some of the surveillance tools used by the National Security Agency (‘NSA’).

He is my latest hero. I know it is dangerous to believe in heroes; they so often disappoint, especially in politics. I might find out things about him that will change my mind. Based on what I have read so far, he is a patriot trying to alert us to the possibility or reality of a total surveillance state in the United States.

Will the NSA read this and target me too? Maybe, but I can think of three saving factors; there are many who feel as I do, I am not famous and the government is often incompetent despite all its resources.

Aside

Romney’s 47%

During the 2012 Presidential campaign a video came out showing Romney speaking to a private group about the 47% who receive government benefits and who would therefore vote for Obama.  He was roundly criticized for this and he later apologized.  He was both right and wrong.

The percentage of people who receive a substantial portion of their income from government is at least 47% and I’ve read in some sources that it is slightly over 50%.  I am one of those people; I receive Social Security and Medicare.  The myriad programs include not only the many programs supposedly targeted for the poor, such as welfare, Medicaid and food stamps, but also huge middle class entitlement programs that mainly target the elderly, such as the ones I receive.  So he was right.

Where he was wrong was the implication that it is a bunch of low income people living off government largesse.  I don’t want to put words in his mouth, even though I’m not a fan, so I’ll say that many conservatives and Republicans, if not Romney, tend to blame the poor for government spending.  Oh, Federal government spending is large, there should be no doubt about that; it is almost 25% of GDP, the highest peace-time spending we have ever had.  The Bush administration ramped up spending from approximately 20% of GDP to 25% with the bailouts and the Obama administration has maintained almost that level with its bailouts and stimulus spending.

Does most government spending go to the poor?  The poor are at most 15% of the population.  Many economists think we seriously overstate poverty, partly because official measurements of poverty exclude income in kind, such as medical care, housing and food stamps.  Let’s accept 15% as the maximum.

Could it be the rich?  The rich can be defined as the top 1%, 2%, or even 5%.  If 47% of the people, or more, are receiving a substantial portion of income from government, then we can’t reach anywhere near 47% even if we combine rich and poor people.  Rich and poor total at most 20% of the population.  So the people receiving significant government benefits have to be mainly in the middle and upper middle classes.  People such as myself!

That is what we need to realize.  I’ve written elsewhere about how conservatives tend to scapegoat the poor and liberals the rich; we have to get over this if we are to solve our nation’s spending problem.  And it is a problem; we have increased Federal spending from 20% of GDP to 25% in one year (2008) and have kept it there; this when we face a flood of spending from the oncoming retirement of the baby boom generation.

So who are these people receiving so many benefits if not mainly the rich and poor?  The largest special interest group by far is the elderly.  Medicare is a HUGE subsidy for people in my age group; we paid some taxes, sure, but not nearly equal to the benefits we receive.  That is one reason we tend to overuse medical care; we have no incentive to economize when someone else is paying most of the bill.  Nor do the healthcare providers have such an incentive, when the patients don’t even know or care about the cost of treatments.

This is a hard fact for people my age to face.  I recall attending a luncheon of conservatives and libertarians and began to speak to the person next to me about the huge subsidies inherent in entitlement programs.  She was adamantly against big government spending and then defended Medicare because “we paid for it.”   We, the elderly, have not paid anywhere near its full cost and we are bankrupting our children by refusing to face this.

There are other middle and upper class subsidies; certain farmers, many big corporations (GM, Chrysler, Boeing, GE and “green energy” companies), public sector employees, oil companies, bailed out financial institutions and others.  I emphasize certain farmers because lettuce and tomato farmers don’t receive subsidies, but wheat, corn, cotton and alpaca farmers do.  Go figure.  Could it be because of political clout?

Government largesse goes mainly to powerful segments of the middle class and that is true in every prosperous democracy, whether it is the U.S., Sweden, Japan or France.

It is true that means-tested programs, originally targeted for low income individuals, have expanded tremendously in the past few years and have reached well into the middle class.  The one type of government program I would support is a means-tested program, but not when eligibility standards are loosened so much that the program expands well beyond low income people.  Nicholas Eberstadt wrote a good piece about this for the American Enterprise Institute.  He pointed out that 35% of American families are receiving government help through means-tested programs such as Social Security disability and food stamps.  We need to curtail these programs too; they have become partly subsidies for people who don’t need subsidies.  It is important to bear in mind, though, that the biggest share of government spending comes from middle and upper class entitlement programs.

Bushama Economics

Bushama Economics 

Bush and Obama 

The Obama partisans think Bush and Obama are so different.  I wish they would subject Obama to the same standards to which they subjected Bush.  If they did, they couldn’t possibly support him. 

Surprisingly, economic policy is one area where they are more alike than different.  Both of them directed hundreds of billions of dollars to favored constituencies at the expense of the rest of us.  Bush directed money to faith based organizations as one clear example.  Other examples are more subtle.  He increased Federal education spending by leaps and bounds, to the benefit of public sector unions.  This was probably an attempt by the Republicans to convert this powerful interest group to their side.  The Republicans should have known the Democrats have the public sector unions locked up for the foreseeable future. 

Another Bush-Republican attempt to buy off an interest group was expansion of Medicare to include drug coverage, Medicare Part D.  That made sense politically because the elderly are the most powerful interest group in every democracy.  It doesn’t make sense as economic policy when 1) most of those receiving a subsidy don’t need it and 2) we can’t afford another entitlement program piled on top of the ones we already have. 

Obama and the Democrats have appropriated hundreds of billions of “stimulus” dollars to, among others, state and local governments.  Thus, public sector jobs (a Democratic Party constituency) have grown in number during much of the current recession while private sector jobs plummeted.  Any connection there?  If you are taking hundreds of billions out of the private sector, which is inevitable if the government is spending hundreds of billions to “stimulate” the economy, the private sector will lose jobs as a result.  Many people seem to think government spending comes out of dollars sitting around unused and don’t stop to think of what the economist Bastiat called the “unseen” effects of a given policy.  The unseen in this case is money removed from the private sector to support government. 

Both Presidents disregarded consumer interests from their first days in office.  Early on Bush placed tariffs on imported steel so that domestic manufacturers could raise prices.  This served the interests of steel manufacturers and powerful steel unions.  Why did he do it?  Because at that time there were some steel-producing states closely divided between Republicans and Democrats, such as West Virginia, and Bush wanted to tip the balance toward Republicans for the future.  We all paid the price for this favoritism in the form of higher prices for every product containing steel.  This policy was eventually rescinded because it was ruled illegal under international trade agreements. 

Obama changed a policy under Nafta during his first days in office.  He terminated the right of Mexican truckers to bring Mexican produce into the United States.  The produce had to be transported on U.S. driven trucks once it crossed the border.  He gave safety as the justification despite the fact Mexican drivers had a better safety record than U.S. drivers.  What was the real reason?  The Teamsters.  He promised during the campaign he would do this, thus acquiring Teamster support.  Recently he retreated from this policy as a result of negotiations with the Mexican government. 

Obama, like Bush, instituted a new entitlement program: Obamacare.  Not only is it an entitlement in a general sense because of its myriad subsidy schemes, it also contains specific entitlement programs within it.  One is called the CLASS Act, of all things.  It provides subsidies for the purchase of home care insurance and its structure almost guarantees trillions in additional unfunded liabilities.  Even the Obama administration has retreated on the CLASS Act because of the financial impossibility of the program. 

Bush and Obama have turned the U.S. into a crony-capitalist country.  One author speculated about the tipping point and concluded it occurred during either the Bush bailout or the Obama stimulus package, each one totaling almost one trillion dollars.  Does it really matter how we apportion blame when they both deserve it? 

The Who performed a rousing song about revolution entitled “Won’t Get Fooled Again.”  The last line is “Meet the new boss; same as the old boss.” 

Republican and Democratic partisans argue about the righteousness of their parties, not acknowledging how similar the parties are in their desire for ever increasing power.  To Democrats I say:  “Subject Obama to the same standards you subjected Bush and you can’t rationally support him any more than Bush.”  To Republicans I say: “With friends like Bush, you don’t need enemies, especially if you are concerned with the fiscal disaster we are courting.”  Presidents such as Bush who have the label “conservative” are especially pernicious because fiscally conservative policies get blamed when in fact we had a spendthrift Bush-Republican regime. 

Rick Miller

Please also see my article on the Manhattan Libertarian Party website: http://manhattanlp.org/category/serf-city-news/

We Have Met The Enemy

“We have met the enemy and he is us.”  Pogo cartoon, 1971

Federal government spending is unsustainable.  By 2025 entitlement programs plus interest on the national debt will consume all Federal revenue and the national debt will be six times GDP by 2080.  By the end of the century Federal spending will take 80% of GDP.  This is an impossible situation; there will be little left for anything else.

Liberals and conservatives deserve criticism for their roles in this; they promote scapegoats, which distract us from learning what the problem really is.  For liberals the scapegoat is the rich, for conservatives, the poor.

We have seen time and time again that heavily taxing the rich does not solve the government’s fiscal problems.  It seldom raises more revenue because the rich change their behavior.  They work less.  If things get bad enough they leave.  The rich are essential to our economy through their entrepreneurial and job creating activities.  They create much more wealth than they consume.

There is one circumstance where the rich deserve condemnation; those who become so because of government connections.  Our economy has arguably become a crony capitalist economy because of the largesse awarded to so many big businesses.  This trend has occurred for decades under Republican and Democratic administrations.  The Bush and Obama bailouts accelerated the trend.

Then there are conservatives, who often use the poor as scapegoats.  There are legitimate criticisms of poverty programs but cost is not one of them; little of the money actually reaches the poor.  A sizable portion of welfare is spent on administration; public housing provides inadequate housing yet is expensive housing, to the benefit of government contractors; Medicaid, originally for the poor, is now mostly spent on nursing home care for middle income families who know how to exclude assets so as to tap into the program.

Who is the enemy?  I’m a member of the most powerful special interest group in this and every other democratic country; the elderly.  Our denial of how we are bankrupting our children astounds me.  Medicare is the biggest subsidy; it has over $70 trillion in unfunded liabilities.

I’m a homeowner and receive the benefit of government subsidies;  tax deductions for mortgage interest and real estate taxes.  The government also attempted to subsidize real estate interests through its promotion of subprime mortgages via Fannie Mae and Freddie Mac, a major cause of our recent financial crisis.

I don’t pay the cost of using New York City’s tennis courts.   A regular permit holder pays $200 for the summer season; I pay $20 because I’m a senior citizen.

Public sector unions get compensation packages more generous than the private sector.  Other examples: farmers of specific crops; auto unions and companies; export subsidies benefiting Boeing and others; bailed out banks; “renewable energy” companies; colleges and universities; dairy and alpaca farmers; specific artists and art forms; “infrastructure” builders and contractors.

Defense spending is excessive too.  Special interest groups increase spending and establish missions for our military that are beyond what is necessary to defend the U.S.

Let each of us look at ourselves to see how we are part of the problem.  Almost every person of middle income and above is receiving some kind of subsidy.  Unless we look at our role in this we risk losing our nation’s prosperity and freedom.

Frederick “Rick” Miller

Sources:  Richmond Times Dispatch, Barton Hinkle, August 22, 2012 re: 2025; Wikipedia-US Public Debt re: 2080; Bad Medicine by Michael Tanner, Cato Institute re: end of century.

Please also see my article on the Manhattan Libertarian Party website: http://manhattanlp.org/category/serf-city-news/

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