Tuesday, April 27, 2010

Economic confusion, nonsense, obfuscation,
distortions and falsehoods

Recently at a fundraiser for the Democratic National Committee in Miami President Barack Obama said he was “amused” by the Tea Party tax day protests going on around the country highlighted by criticisms of his policies. “You would think they would be saying ‘thank you.’ That’s what you’d think,” he said.

Those petulant and non-presidential remarks were based upon his expectation that Americans would drop to their knees before him in grateful appreciation because of his pledge not to raise taxes for most people. “I can make a firm pledge,” Mr. Obama declared on the campaign trail. “Under my plan no family making less than $250,000 a year will see any form of tax increase; not your income tax, not your payroll tax, not your capital gains taxes; not any of your taxes.” Rather than raise taxes on middle and low income earners, he said he’ll raise taxes on the “rich.”

The nation’s tax system is so badly skewed that approximately 47 percent of U.S. citizens paid no federal income taxes last year, up 17 percent from 2004. An analysis by Deloitte Tax found that "a family of four making as much as $50,000 will owe no federal income tax for 2009." At this rate, by 2012 the majority of voters will pay no federal taxes, will contribute nothing to the operation of their federal government, and currently between 40 million and 50 million people are getting some form of support from the government – about one in six people, including children.

Those making less than $32,879 a year – the 108 million in the bottom 50 percent of earners – paid less than three percent of federal income taxes, while the nearly 11 million comprising the top five percent, making $160,000 and up, paid more than 60 percent of federal income taxes.

So, a relative few pay most of the cost of government and nearly half of us pay nothing, about which a few questions arise. Is this really fair? Is it healthy? As a matter of good citizenship and personal responsibility, shouldn’t nearly everyone pay something? If you pay nothing to support your government, do you really care what it does? And, how much say-so should you have about what it does?

Despite President Obama’s pledge not to raise taxes on most Americans, since taking office 15 months ago, he and Congressional Democrats have pushed through measures that include tax increases totaling more than $670 billion, which is more than $2,100 for every man, woman and child in the United States. And there are at least 14 new taxes that violate his “no tax increases” vow.

The health care reform bill, of which the Democrats are so proud, creates 20 new taxes, including the following:

~ A new tax on individuals who do not purchase government‐approved health insurance
~ A new tax on employers who fail to fully comply with government health insurance mandates
~ A new 40 percent excise tax on certain high‐cost health plans
~ An increase in the Medicare tax on wages and self‐employment income by 0.9 percent

~ A new ban on the purchase of over‐the‐counter drugs using funds from FSAs, HSAs and HRAs

~ An increase, from 7.5 percent to 10 percent of income, in the threshold after which individuals can deduct out-of-pocket medical expenses
~ A new annual tax on health insurance and a new annual tax on brand name pharmaceuticals
~ A new 2.3 percent excise tax on certain medical devices, and a new tax on insured and self‐insured health plans

Most of these will affect people well below the president’s $250,000 threshold, which reminds us that there are people who will do and say anything to win elections or push their hidden agendas through. It’s all a big game to them, and it’s a game the people invariably lose.

Mr. Obama’s chief of staff Rahm Emanuel said, “Never let a good crisis go to waste.” Following that advice, the Congress and the administration sold the idea that the economic crisis could only be cured by massive spending, and in passing the so-called stimulus bill Congress doubled the deficit George Bush left behind. The plan failed to stimulate much of anything, because it was primarily an excuse to hand out money to favored special interests.

In the confusion surrounding the economic crisis, and in opposition to the will of a majority of Americans, Congress passed the radical health care reform bill in one of the ugliest episodes in the history of the House of Representatives. That bill created a new entitlement of approximately $2 trillion, and imposed taxes on middle and low income earners. And, the enormous Obama deficit increased the national debt to $8.2 trillion, which will grow to $20.3 trillion by 2020, according to the Congressional Budget Office.

Since Democrats hate spending cuts, we’ll be told that only new taxes and higher rates can solve the deficit/debt problem, so get ready. A lot of “not rich” Americans are going to feel the pain of the president’s broken promises.

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Saturday, April 24, 2010

Tuesday, April 20, 2010

Science under the microscope: Unprofessional
behavior raises questions

Most people do not recognize the name Peter Duesberg. They don't know that he is a professor of Molecular and Cell Biology at the University of California, Berkeley, or that he was the first scientist to isolate the human cancer gene in 1970 through his work on retroviruses, and that he mapped the genetic structure of those viruses, resulting in his election to the National Academy of Sciences in 1986. Dr. Duesberg is also the recipient of a seven-year Outstanding Investigator Grant from the National Institutes of Health.

Yet, despite these impressive accomplishments and sterling credentials he is looked down upon by some of his peers because, as it turns out, the human immunodeficiency virus (HIV) — known as the “AIDS virus” — is a retrovirus, a subject about which Prof. Duesberg is an authority, and based upon his knowledge of retroviruses Prof. Duesberg concluded that HIV, does not cause AIDS.

Despite his background and accomplishments, his research and scientific opinion on HIV are given no credibility among the HIV = AIDS faction of scientists, and instead he is vilified and punished.

The purpose here is not to defend Prof. Duesberg's theory about HIV/AIDS — readers can investigate that on their own and draw their own conclusions, or not, as they choose. The purpose is to call attention to the decidedly unscientific behavior on the part of those scientists who believe the AIDS orthodoxy, and who demean and vilify a highly qualified peer who disagrees with a popular theory.

Science is supposed to be a logical, methodical search for truth; it involves advancing hypotheses and testing and retesting them, disproving those that can be disproved, and allowing those that can't be disproved to stand until a better hypothesis comes along. It is often said in science that theories can never be proved, only disproved, and there is always the possibility that a new observation or a new experiment will conflict with a long-standing theory.

The noted chemist and winner of multiple Nobel Prizes, Linus Pauling, said that “science is the search for truth — it is not a game in which one tries to beat his opponent, to do harm to others.”

Yet, instead of engaging in scientific debate with Prof. Duesberg and disproving his hypothesis in a scientific fashion, the HIV = AIDS establishment responded by cutting off his research funding and making him a villain. Why?

Well, there is a lot of money in AIDS research and treatment. Since the mid-1980s the federal government has spent more than $20 billion in the U.S. for those purposes. If Peter Duesberg's theory is valid or cannot be disproved, it could upset the apple cart for a lot of people who have gotten comfortable in their lucrative work, so comfortable that perhaps they no longer care about objective truth.

If this situation sounds familiar it is because it is very similar to what happens to scientists with the temerity to challenge the anthropogenic global warming (AGW) theory, more recently referred to merely as “climate change,” now enjoying wide acceptance, but which also has been exposed as involving much less than honorable, objective science.

The Wall Street Journal noted back in 2006 that “Scientists who dissent from the alarmism have seen their grant funds disappear, their work derided, and themselves libeled … Consequently, lies about climate change gain credence even when they fly in the face of the science that supposedly is their basis.”

Those who do not toe the alarmist line are not only punished, marginalized, and ridiculed; they are even threatened with jail in some cases. Jail? Really? As Sarah Palin would say: “you betcha.”

In 2007 the following headline appeared in Agence France Press “Failure to tackle climate peril 'criminally irresponsible,' IPCC (Intergovernmental Panel on Climate Change) told,” a sentiment attributed to Yvo de Boer, UN Environmental Programme head.

Like AIDS research and treatment, AGW attracts an enormous bundle of research and subsidy funding.

In 2007 $50 billion of taxpayer money went to global warming advocates, while just $19 million went to skeptics — a more than 2,500-to-1 funding imbalance in favor of the AGW advocates — according to information provided on the Senate Environment and Public Works Web page. Did the appeal of filthy lucre spawn the fraud, deceit, and error-ridden research that alarmists used to build support for dangerous, expensive and unnecessary changes to our way of life?

We have come to expect this sort of dishonesty and tawdry behavior from politicians. But science is supposed be above such desperate and corrupt conduct. Like journalism — another profession we depend on for honesty and truth that has lost credibility in recent years — science is fast becoming an area where theories will be taken with the same grain of salt as a Barack Obama campaign promise.

The ethical collapse of important professions like journalism, climate science and medical research parallels the collapse of our once-resilient society, one that developed through, independence, individualism and personal integrity. As our society sheds its standards, gives up individualism for dependence, and devolves into socialism, our once-ethical professions get taken down with it.

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Tuesday, April 13, 2010

Potential new tax threatens to
keep the U.S. economy in a crisis

On April 8, Congressional Budget Office (CBO) chief Douglas Elmendorf said this about the enormous Obama budget deficit: “U.S. fiscal policy is unsustainable, and unsustainable to an extent that it can't be solved through minor changes. It's a matter of arithmetic.” What does that mean?

It means that government spending is so far ahead of its revenue collection that some major change has to occur. In such situations there are three choices: reduce spending; increase taxation; or some combination of the two.

All those who think the administration and the current Congress will reduce spending, please stand up. Those still sitting are correct: there won’t be spending cuts, and everyone – everyone – is going to pay more taxes, despite Barack Obama’s promises to the contrary during the presidential campaign.

Mr. Elmendorf suggested that the CBO has begun to study the impact of adding an entirely new kind of tax to the extensive list of existing federal taxes: the value added tax (VAT). Observers suspect that President Obama’s deficit reduction commission will recommend the VAT to counter the administration’s spending addiction; the only tool many economists believe is capable of raising enough money to make a dent in the gargantuan Obama deficit.

A value added tax is similar to a national retail sales tax but imposes a tax at every stage of business production, and its cumulative effects are paid by the consumer. Unlike earnings-based taxes like the income tax, people are taxed on what they spend: spend a lot, pay a lot of VAT taxes; spend little, pay little VAT taxes.

Value added tax systems are popular in the social democracies of Europe and other nations around the world, and standard rates range from five percent (Japan) to 25 percent (Sweden and Denmark). Most countries with a VAT have lower rates for some items, and no tax at all on a few.

On inexpensive items you won’t really notice a five percent VAT very much. An item that costs $20 will have an additional dollar of VAT added to it. If the VAT rate is 25 percent, however, you’ll pay a $5.00 VAT. That might be enough to get your attention.

On more expensive items, like something that costs $1,000, the five percent VAT will add $50 to the cost, and the 25 percent VAT will add $250. Both of those should get your attention.

The problem the VAT poses for Americans is that where it might be a suitable replacement for income taxes as a means to raise government revenue, the VAT will not replace the income tax or the myriad of federal taxes we pay, it will be added to them, since the only way to counter the Obama spending addiction is to provide additional revenue to the federal government over and above what it is already collecting.

But adding the VAT to existing taxes will have significant negative effects. Since it is based on spending, the more you make, the more you can spend. However, everyone will likely buy less because the price of nearly everything will go up, while salaries and wages will not. Imagine having to pay from five to twenty-five percent more for most things you purchase. And everyone will be affected by the VAT, not just the middle-class Americans Mr. Obama has labeled “rich.”

Since rising prices lead to lower purchasing, demand for products will drop and production levels will decline commensurately, and that will put additional pressure on employers to lay off workers. The only question is how substantial a drain on the economy the VAT will produce?

EconomyWatch notes that a concern in “introducing value-added tax is that the introduction of the tax would set in motion a spiral in which prices and wages would feed on each other – that is, VAT would be inflationary.”

That Black Hole of Economics, otherwise known as the White House, makes one blunder after another. The most serious problem facing the country when Barack Obama took office was unemployment. The most serious problem 15 months later is unemployment followed closely by the deficit.

Instead of taking action to foster job creation, like reducing taxes on business and individuals, Mr. Obama wasted more than a year focusing on a problem a minority of Americans thought was important – health care reform – and paid lip service to unemployment, the issue Americans thought was most important. He helped push through a $787 billion stimulus bill that hasn’t worked, but has doubled the budget deficit to a scary level.

When he took office, Mr. Obama inherited a deficit of about $800 billion: the original $485 billion Bush deficit, plus $100 billion in increased recession-related spending and lost revenues, plus $200 billion in unpaid Troubled Asset Relief Program loans ($500 billion has been repaid). The Obama deficit is more than $1.5 trillion today, double what he inherited, and 10 percent of GDP.

And now he may be considering imposing a new tax on the country that will increase everyone’s taxes and put additional pressure on jobs, when what is clearly needed is cuts in spending and taxes.

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Tuesday, April 06, 2010

Congress shows why the Founders’
original intent must be observed

Many Americans are outraged at the component in the House Health Care bill that requires people to buy health insurance they don’t want and don’t need. The authors of this legislation felt this mandate necessary to put enough young and healthy people’s money into the system to keep it from sinking faster than the Titanic, which, come to think of it, is a pretty good analogy for the chaos surrounding health care reform. What does it say about this ghastly plan that Americans have to be forced to participate in it for it to succeed?

Congress justifies this outrage with the “Commerce Clause” of the United States Constitution. Article I, Section 8, Paragraph 3 says: “(The Congress shall have power) [t]o regulate commerce with foreign nations, and among the several states, and with the Indian tribes; …”

Through liberal interpretation of the words “to regulate commerce … among the several states,” Congress has justified things that the nation’s Founders never intended, and in fact things just like the government oppression that the colonists revolted against only several years earlier.

Given that the colonists had endured circumstances bad enough that they took up arms against King George, how can anyone seriously believe that the Founders ever intended for those few words to be used for the government to gain so much control?

Looking back into history, George Mason University professor Walter Williams wrote that a “key failing of the Articles of Confederation [the first governing document of the United States of America] was the propensity of states to erect protectionist trade barriers. When the Framers met in Philadelphia in 1787 and wrote the constitution that governs us today, they addressed that failure through the commerce clause and the privileges and immunities clause that created a national free-trade zone. Thus, the original purpose of the Commerce Clause was primarily a means to eliminate trade barriers among the states. They didn't intend for the Commerce Clause to govern so much of our lives.”

Our elected public servants, however, go merrily on ignoring the protections the Constitution provides you and me against them.

Using the Commerce Clause as the basis, in 1990 Congress passed the Gun-Free School Zones Act. How so? Because, legislators said, possessing a firearm in a local school zone substantially affected interstate commerce. Huh? Well, you see, because violent crime raises insurance costs, and those costs are spread throughout the population, and across state lines, voila: interstate commerce. And if that explanation isn’t satisfying, Congress also determined that crime threatens the learning environment, thereby reducing national productivity, affecting interstate commerce. These interpretations stretch plausibility to the breaking point.

Fortunately for the country, the U.S. Supreme Court ruled Congress didn't have constitutional authority to pass that act, because, "If we were to accept the government's arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate."

Indeed, if we accept the thin premise that crime affects the learning environment, thereby creating a negative effect on interstate commerce, then what children eat, how much sleep they get, and even what they do when not in school are also factors requiring government control.

The American people have allowed this twisting of the Founders’ intentions for a variety of reasons, including ignorance, disinterest, and self-interest, the latter when a particular misapplication of the Commerce Clause fits their narrow viewpoint. They might say, “Well, the Commerce Clause really doesn’t have anything to do with outlawing guns near schools, but, hey, we don’t want guns near schools, do we? So let it stand.”

The U.S. Constitution was created not as an instrument of social engineering or of political expedience. It was carefully crafted to achieve a specific purpose: to establish a limited government that would provide a suitable framework for the nation and at the same time provide maximum freedom for American citizens.

But politicians cannot be trusted to omit ideological motivations from the lawmaking process, which is why the judiciary was given the authority to rule on whether laws comport with constitutional mandates. But the judiciary, including the U.S. Supreme Court, is often as political and ideological as the Congress.

Edwin Meese, Attorney General in the Reagan administration, notes that “Taking the politics out of the judiciary is a key tenet behind the concept of constitutional originalism. That's the idea that judges should issue rulings based on the original understanding of the authors and ratifiers of the Constitution and the Bill of Rights – rather than on outcomes that reflect the judges' personal biases or policy preferences.”

Liberalizing the meaning of the Constitution like this means that the federal government can justify anything it wants to do by giving it the magic label "interstate commerce," and the limits on federal power under the 10th Amendment and the Bill of Rights vanish into thin air.

A so-called “living constitution” is an unsuitable basis for government, since its meaning changes to fit contemporary passions. If the Constitution means only what each new generation prefers it to mean, the nation has no anchor, and floats aimlessly in the political wind.

Original intent is the only sensible interpretation of the Constitution.

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Sunday, April 04, 2010

Obama’s fraudulent drilling policy

During the presidential campaign Barack Obama favored domestic drilling for oil and natural gas, but throughout the first year of his presidency he imposed numerous delays on American energy production. Now, out of the blue, he has announced he will open up portions of the Outer Continental Shelf to offshore drilling.

He portrayed the idea of needing more domestic production as something new, a great revelation that was the product of a year's worth of investigation by his administration; something nobody had thought of until this “aha” moment.

This decision has prompted a variety of responses. Proponents of developing our oil and natural gas resources are guardedly optimistic, while the anti-domestic-energy-production folks on the left are appalled that the president would abandon his more recent “sensible” position against conventional energy sources and his near-manic drive for imposing “green” technologies on the nation.

But those on the right are correct to be skeptical and the left has no reason to worry: Mr. Obama has no intention of making it easier for the country to do what is in its best interest where energy production is concerned.

If he really wants to increase domestic oil and natural gas supplies, why did this proposal not allow drilling in the Pacific Ocean, or in a large portion of the Atlantic Ocean, in some of the most promising areas of the Gulf of Mexico, or in much of Alaska? Why are there no areas for land-based exploration? And why will most new drilling will not occur until after 2012 at the earliest.

This is a head-fake by the president, who wants to force a massive new energy tax on Americans.

The Waxman-Markey energy bill would do serious harm to the economy, killing more than one million jobs per year and raising energy costs, but many in Congress believe that bill is dead. However, a new effort is being developed by Republican Senator Lindsey Graham, Independent Senator Joseph Lieberman, and Democrat Senator John Kerry.

This bill is expected to be less offensive to opponents of Waxman-Markey, and given the suspicious timing of the president’s announcement, his newly discovered need for domestic production is just a part of a plot to push through cap and tax in one form or another.

Despite a study by the American Energy Alliance that reports offshore drilling may well create millions of new jobs and would provide billions in new government revenue at the levels, we should expect an array of delays before any actual drilling takes place, such as court challenges and bureaucratic red tape.

Barack Obama continues to govern in opposition to the will of the people he serves, who understand what he does not understand: the way to energy independence is developing domestic supplies of those fuels that we have been using and are prepared to use, and who also recognize that however attractive wind, solar, and other alternative energy sources may be in terms of “cleanliness,” the technology needed for them to be utilized to any significant degree are as yet unavailable.

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