Category Archives: Public Policy

My Testimony in Support of House Bill 558 – Maryland Liberty Preservation Act of 2013

My name is Scott Strzelczyk and I am a Maryland citizen and resident of Carroll County.  My testimony today is in support of House Bill 558 – The Liberty Preservation Act of 2013.

This issue is not a Democrat or Republican issue.  It is not a conservative or liberal issue.  It is not a right or left issue.  It’s a wholly American issue just as mom and apple pie.

Throughout the history of our Union, States have interposed and nullified federal laws and acts that are not made in pursuance of the federal Constitution.

When Congress passed the Sedition Act making it a crime to criticize the federal government, and President John Adams signed it into law in 1798, James Madison argued that “in case of a deliberate, palpable, and dangerous exercise of other powers” not delegated by the Constitution, the States “have the right, and are duty bound, to interpose for arresting the progress of the evil”. 

In Federalist 28, Alexander Hamilton wrote, “it was an axiom of the American system of government that the state governments will in all possible contingencies afford complete security against invasions of the public liberty by national authority.”

Likewise Thomas Jefferson wrote, “The several states comprising the United States of America are not united on the principles of unlimited submission to the general government.” Jefferson also wrote in the Kentucky Resolution of 1798, “that whensoever the General government assumes undelegated powers, its acts are unauthoritative, void, and of no force:  that to this compact each state acceded as a state, and is an integral party, its co-states forming, as to itself, the other party:  that the government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the constitution, the measure of its powers; but that as in all other cases of compact amongst parties having no common judge; each party has an equal right to judge for itself, as well of infractions as of the mode and measures of redress.”

Jefferson along with the entire founding generation was mostly concerned with their rights as Englishmen.  Due process was not established under the Constitution.  Due process was not a novel idea in the 1700s nor is it novel today.  The English have a long and distinguished history dating back to the Magna Carta signed at Runnymeade in 1215.  The concept of due process was established in the Magna Carta.  Chapters 39 and 40 of the Magna Carta state:

39. No freeman shall be taken, or imprisoned, or disseized, or outlawed, or exiled, or in any way harmed–nor will we go upon or send upon him–save by the lawful judgment of his peers or by the law of the land.

40. To none will we sell, to none deny or delay, right or justice.

These rights enshrined in the Magna Carta are part of English Common Law.  We know that Common Law was adopted as of July 4, 1776 and is codified in the Maryland Declaration of Rights, Section 5a, subsection 1.  The American Revolution should remind us that sovereignty is left in the hands of the people, and if the federal government should exceed its constitutional authority, abridge or deny our unalienable rights, the people and the States are duty bound to resist any and all arbitrary power and oppression.

The Constitution of the United States forbids the federal government from denying due process rights to any person for any reason.  The 5th amendment reads:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Today, you have the opportunity to stand proudly among some of the greatest state legislators in the history of the Republic. In the 1850s, northern state Senators and Representatives stood up for the due process rights of their black citizens and passed Personal Liberty Laws, blocking implementation of the Fugitive Slave Act of 1850.

This act counts among the most evil pieces of legislation in American history. The Fugitive Slave Act of 1850 made a farce of due process, allowing for the arrest of a suspected runaway slave based on the word of the “property owner.” He simply had to swear an affidavit attesting to his “ownership” of the person in question, and he was allowed to drag that man or woman back South into slavery. The accused wasn’t even allowed to present evidence in his own defense. The act was meant to protect the “property” of slave holders, but many free blacks found themselves accused of escaping slavery and faced the prospect of living out their life on a plantation. And northerners understood that even an accused runaway should remain innocent until proven guilty, and enjoy basic due process rights.

Instead of simply submitting to federal authority and quietly participating in constitutionally dubious and morally repugnant fugitive-slave roundups, northern lawmakers aggressively resisted the fugitive slave acts. Officials in these states did everything within their power to thwart enforcement, including denying federal agents the use of jails, and even impeaching state officials who lent support to fugitive-slave claimants. The Michigan legislature passed a law guaranteeing habeas corpus rights and a jury trial to any accused runaway, all in defiance of federal “law.”

Would you comply with the Fugitive Slave Law or would you resist it, and interpose on behalf of your citizens?

This week marked the 71st anniversary of Franklin Roosevelt’s signing of Executive Order 9066.  The order authorized the Secretary of War and the U.S. Army to create military zones “from which any or all persons may be excluded.” The order left who might be excluded to the military’s discretion.  Roughly 120,000 Japanese Americans were rounded up and sent to internment camps.  Of those 62% were American citizens. Roughly 11,000 German Americans and 3,000 Italian Americans were also rounded up. 

Recently, Washington State Senator Bob Hasegawa shared his emotional and traumatic story of how his parents, grandparents, aunts, and uncles were detained and spent three years living behind barbed wire and armed guards at the Minidoka Internment Camp in Idaho.  They were all U.S. citizens and they were all denied due process.  They were detained solely for being of Japanese descent.

In 1976, President Gerald Ford rescinded E.O. 9066 and said, I call upon the American people to affirm with me this American Promise – that we have learned from the tragedy of that long-ago experience forever to treasure liberty and justice for each individual American, and resolve that this kind of action shall never again be repeated.”

Certain sections of the National Defense Authorization Act empower the federal government to indefinitely detain citizens without due process, without being charged with a crime, and without a trial by jury.

How are these parts of the NDAA any different than the Fugitive Slave Act of 1850?  How are these parts of the NDAA any different than the Executive Order President Roosevelt signed?

In nothing more than a stroke of the pen, a thousand years – a millennium – of due process rights are obliterated.  You either believe in due process for all persons or you do not.  It is unjust and discriminatory for legislators, executives, or the judiciary to deny due process rights to any person.

It is up to each and every one of you, at this moment in American history and the history of the State of Maryland, to leave your mark in defense of every persons’ right to due process, and to do precisely what James Madison said, “you have the right and are duty bound to interpose for arresting the progress of evil.”

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First Responder or First Victim: Who is Responsible for Your Protection

According to the Bureau of Labor and Statistics there were 794,300 law enforcement personnel employed in 2010.  Law enforcement encompasses a variety of professions including state and local police officers, sheriffs and deputy sheriffs, transit and railroad police, detectives and criminal investigators, and fish and game wardens.  At the federal level this includes the Federal Bureau of Investigation, the Drug Enforcement Agency, the Secret Service, Air Marshals, Border Patrol, and Alcohol, Tobacco, Firearms, and Explosives.

Law enforcement personnel are generally categorized as first responders along with fire fighters and emergency medical personnel.  State and local police have a general responsibility to enforce laws and maintain the peace.  Federal law enforcement personnel have specific areas of responsibility.

The label, first responder, is misleading and inaccurate.  Law enforcement personnel are usually the second responder when it comes to a crime.  If an intruder breaks into your home at 3am the homeowner is the first responder to the situation.  If someone in the home is able to place a 911 call and law enforcement responds, law enforcement officers are the second responders.

Homeowners have an individual responsibility to protect their life and property.  The choice is whether the homeowner is the first responder or the first victim.  Individuals must decide whether to protect themselves or to subjugate themselves to protection by law enforcement personnel.   This raises a moral question.  Whose responsibility is it to protect your life?  According to your conscience, if you decide to abrogate the defense of your life or property to law enforcement, is it a morally superior decision to ask someone else to risk their life to protect your life?

There are other considerations in choosing to rely on law enforcement for your protection.  First, is law enforcement required to protect you?  Secondly, are you willing to subject yourself or your family members to becoming a crime victim as you wait for law enforcement to respond to your request for protection?

A recent American Thinker article referenced a study done by the Atlanta Journal Constitution on police response times to 911 calls.  The average time for the police response to a high-priority crime is eleven minutes and eleven seconds.  When a home invasion occurs at 3am there is no law enforcement officer waiting in your home to respond.  Using a standard six round revolver, conservatively we’ll assume six shots are fired in thirty seconds and it takes another thirty seconds to reload.  The home invader can fire sixty-six shots with a standard revolver in eleven minutes.   What if there are two, three, or more armed invaders.  That’s hundreds of rounds fired in eleven minutes.

When law enforcement arrives they are often armed with weapons that have twenty round (or more) magazines and look similar to what is colloquially called an assault weapon.  Though the federal government and law enforcement refer to these as personal defense weapons when owned by civilians they are magically transformed into assault weapons.  That point aside, law enforcement officers are the second responders not the first.  To repeat, are you willing to become a crime victim because you’ve abrogated your personal responsibility to others that can’t be present to help you for at least eleven minutes on average?  If you answered yes, you’ll really appreciate the irony of the remainder of the article.

The most significant fallacy is the first question I asked; are law enforcement personnel required to protect you?  Most people answer this question incorrectly.  Police have no legal responsibility to protect you.  Read it again.  Police have no legal responsibility to protect you.  If the police witness a person pull you out of your car, beat you senseless, and steal your car they are not obligated by law to protect you.  You are probably thinking this is preposterous and I have no idea what I’m talking about.

There are two federal court cases you should become familiar with; DeShaney v. Wisconsin and Warren v. District of Columbia.  The DeShaney case details can be read here, but the case reached the Supreme Court and the court ruled:

The constitution is not a source of any affirmative obligation on the state or its subdivisions to protect its citizens. Since “the Due Process Clause does not require the State to provide its citizens with particular protective services, it follows that the State cannot be held liable under the Clause for injuries that could have been averted had it chosen to provide them.”

Likewise, in Warren v. District of Columbia the plaintiffs filed suit against the District of Columbia for negligent failure to provide adequate police services.  The case details can be read here.  The case was appealed to the Circuit Court of Appeals and it was dismissed based upon “the fundamental principle that a government and its agents are under no general duty to provide public services, such as police protection, to any particular individual citizen.”  In other words, law enforcement personnel have a general duty to protect the public at large and not any individual citizen.  Law enforcement is not obligated, legally or otherwise, to provide anyone with police protection.

These crimes occurred under normal circumstances.  Consider emergency situations like the L.A. riots, natural disasters like Katrina, or whenever there may be shortages of food and water, or disruption to the economy.  If it takes the police eleven minutes to respond in normal circumstances how long will it take to respond under emergency conditions?  It is inconceivable to believe law enforcement can protect you under any emergency conditions.

If law enforcement is not obligated under law to protect you and government wants to restrict or deny firearm ownership, precisely how would a citizen protect their life and the lives of their family?   Inquiring minds want to know.

Furthermore, for those who decide to abrogate their responsibility to protect themselves to law enforcement how do you reconcile that decision knowing law enforcement has no obligation to protect you?  Will you sleep better knowing the police may not respond to your call for protection or may not respond in a timely manner?  Can you live with the fact that you failed to prevent the killing of a family member, the kidnapping of a child, the rape of your wife, or the theft of your property?

If individuals are restricted or denied the ability to be first responders and law enforcement are only responders when they chose to be, it’s reasonable to conclude the government is setting the stage for a subjugated society.  What else could government do knowing the citizens are unarmed?  The answer:  just about anything they want.  The possibility of further infringements or invasions upon rights and liberty are increased tremendously under these conditions.

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Filed under Constitution, Philosophical, Public Policy

My Post Election Reflection

Let me start off by sharing a story.  On Sunday, two days before the election, I was in line at the grocery store and overheard the cashier talking to the customer in front of me.  She said “well I hope things work out the right way on Tuesday”.  Now, I don’t know what the right way meant, but I did offer these words.  No matter who wins the election on Tuesday, one half of the country will be happy and the other half will be disappointed.  She agreed.  Most people will agree with that statement.

For those that believe the country is lost or we are well on the path to socialism you are wrong.  The country isn’t lost now.  We lost the country a long time ago.  Today is the time to recognize and acknowledge the system is broke and broken.  Today is the time to recognize the system is dysfunctional.  Today is a time for reflection and introspection.  This article summarizes my thoughts, my reflection on what transpired and where we stand as a society today.

In a recent article by Charles Hugh-Smith he wrote, ‘the system we have is an imperial presidency”.  In Arthur Schlesinger’s 1973 book the Imperial Presidency the term is defined as:

A presidency becomes imperial when it relies on powers beyond those allowed by the Constitution. The Constitution established three separate branches of government not for efficiency but to avoid the arbitrary exercise of power.

There has not been a congressional declaration of war since WWII.  Every war has been waged without congressional approval thus every war has been unconstitutional.  Schlesinger goes on to say:

The Constitution and its authors determined that the power to initiate a war belonged to the Congress. The President had the responsibility to conduct ongoing wars and ongoing foreign relations and respond to sudden attacks if the Congress was not in session. As the United States of America became a great world power, and then a superpower, the Presidency acquired more war powers despite the Constitution. This reduced the Congress’ powers and the separation of powers, which is necessary to avoid the arbitrary use of power.

Through various means, Presidents subsequently acquired powers beyond the limits of the Constitution. The daily accountability of the President to the Congress, the courts, the press and the people has been replaced by an accountability of once each four years during an election. These changes have occurred slowly over the centuries so that that which appears normal differs greatly from what was the original state of America.

I cannot emphasize enough Schlesinger’s last sentence.  He said, “These changes have occurred slowly over the centuries so that which appears normal differs greatly from what was the original state of America”.  [Emphasis added.]  He is saying the Constitution established a constitutional republic not an imperial presidency.  He is saying the role of government and the authority of government has fundamental changed to a government without limits and a government that acts arbitrarily and capriciously.

Smith continued on to the expanded powers of executive orders.  Smith wrote, “Events since then (such as the invasion of Iraq in 2003) have revealed how far an Imperial President could go with broadly granted war powers, “presidential immunity,” “signing statements” (declaring which congressionally approved statutes he would ignore or refuse to enforce) and the increasingly popular “executive orders” which enable everything from imprisoning entire ethnic populations (E.O. 9066) to claiming extra-legal powers over the entire U.S. economy.

Presidents before G.W. Bush and Obama managed to perform their duties with a handful of Executive Orders–five per term seemed about average. President Bush issued 160 in his first term while President Obama has so far issued 139. Both of our most recent presidents also made heavy use of Executive privileges such as “signing statements” and other “work-arounds” to feeble limits on presidential powers.”

I have said before we need to choose between uncomfortable truths or comforting lies.  The latter is the rationalizations people go through to avoid uncomfortable truths; about themselves, our government, or society in general.  In some cases these rationalizations amount to mental gymnastics to somehow, anyhow, maintain some semblance of reason and understanding today.  The result is a normalcy bias where people simply cannot digest or understand what is happening around them, thus the need for mental gymnastics to catapult their minds back to a place they understand.  Those are the comforting lies people tell themselves to cope with the unknown and unchartered territory we are headed into.

The problem is exacerbated by rhetoric and fear.  We are headed into unknown and unchartered waters.  At least for us they are unknown waters.  But these waters have been traversed before.  History is replete with examples of great societies rising and falling.  But do not believe for a minute that we are doomed.  Contrast where we stand today with those that voyaged to America on the Mayflower.  Undoubtedly, they truly entered unchartered waters.  The risks they took were orders of magnitude greater than what we have to deal with after the 2012 election.  That doesn’t mean things won’t be difficult as we all try to figure out how to navigate the choppy waters ahead and charter our own futures.

The perspective needs to be on the uncomfortable truths of what we have become as individuals, a society, and a system of governance.  In addition to the imperial presidency there are numerous other uncomfortable truths we must face without performing all the mental gymnastics to rationalize away reality.  As Ayn Rand said, “you can ignore reality but you cannot ignore the consequences of ignoring reality.”

Regardless of who won the 2012 election we are faced with these truths:

Government debt will grow and deficit spending will continue.  The simple truth is both Romney and Obama would continue government’s profligate spending and run annual deficits which increase the national debt.  Albeit the amounts may vary slightly, but nevertheless, the path of fiscal insanity will continue.  Today, government revenues are less than the total expenses for Social Security, Medicare, and the interest on the debt.  All discretionary (non-military) and non-discretionary (military) spending is funded through borrowing.  By the next presidential election I expect the national debt to be between $20 trillion on the low end and $23 trillion on the high end.

To fund their deficits, government will continue to borrow money and print money.  Government will continue to debase the currency.  I’ve written on this extensively and won’t cover it again here, but it is sufficient to say that the purchasing power of a dollar (spent now or savings spent later) will decline.  Government securities that cannot be sold to foreign central banks, foreign governments, or the primary dealers will be bought outright by the Federal Reserve.   Expect prices to rise and your stored purchasing power (i.e. your savings) to diminish.

An interventionist foreign policy will continue.  In addition to the unconstitutional wars U.S. involvement in other countries’ affairs will continue unabated.  In some cases the U.S. will prop up foreign governments whether they are dictatorships or not.  In some cases the U.S. will supply and arm insurgents to combat foreign governments because it’s in our national security interests.  All will be justified under the guise of “national security” or our “national interests”.

The entitlement state would continue unabated.  Neither Romney nor Obama has any plans to reduce or eliminate entitlement programs.  This is how I describe the system to people.  The government confiscates your earnings through a tax and places into a “trust fund” with the Treasury Department.  The trust fund is raided so the current government can spend it and is replaced with an I.O.U.   The money is spent on wasteful and unconstitutional government programs.  Eventually it is replaced by borrowed funds which the government says you have to repay and with interest.  This is referred to as a Ponzi scheme.  The system is unsustainable and government uses its enforcement arm – the IRS – to ensure you comply and participate in the scheme whether you consent or not.

The welfare state is a source of votes for politicians.  In a quid-pro-quo the agreement is we will provide a “government benefit” such as EBT cards, housing, etc. and in return you vote and keep us in power.  In other words, the people are voting themselves largesse out of the treasury.  But that largesse comes from a source other than government.  It comes from taxes or borrowing.  In one case the rightful property of one person is taken by government and provided to another that has absolutely no rightful claim to it.  In the case of borrowing, this is more of the same problem where the debt is increased and you are expected to repay the principle and interest out of your future earnings.

Unalienable rights, liberties, and civil rights will continue to be abridged or denied.  Decade after decade the erosion of our rights and liberties continues unabated.  Asset forfeiture laws, traveling on airplanes, parts of the Patriot Act, parts of the National Defense Authorization Act, and unlawful violations of the 1st, 4th, and 5th amendments continue unabated.  Usurpation of power by Congress, the executive, and the judiciary is considered normal behavior where it was once considered treasonous.  States no longer exercise their constitutional authority by checking the powers of the federal government.  States have been reduced to mere satellites, mere corporations, to the leviathan occupying the ten square miles known as Washington D.C. with its tentacles reaching out to every state, county, municipality, community, neighborhood, and home across our great Union.  All will be done under the guise of “keeping us safe” or “we are doing it for the kids”.

The unfunded liabilities of the federal, state, and local governments combined exceed $200 trillion.

We haven’t had a free market economy in generations.  Today we have a centrally planned economy where the state controls the money supply, the cost of money (interest rates), and forces people to use fiat currency through unconstitutional legal tender laws.  The state redirects capital towards government centric preferences.  Supply and demand is distorted.  Price signals are manipulated through government intervention.  Scarce resources are misallocated primarily for political purposes.  Economic figures and statistics are adjusted and manipulated by government bureaucracies for political purposes.  GDP, CPI, unemployment and other figures are routinely manipulated for political purposes.

Taxes are primarily paid by the top 25% of earners.  The bottom 50% of earners pay no federal income tax.  Estate taxes prohibit family owned businesses from passing on from one generation to another.  Corporate taxes are a farce.  Corporations don’t pay taxes, people pay taxes.  Income taxes are another expense item for a corporation which they pass on to the consumer in the price of the good or service provided.  There are hundreds of other taxes and fees paid at the federal, state, and local levels.

These are the uncomfortable truths.  These things would continue regardless of who occupied the White House.  What is important is what to do next?  As the size, scope, and authority of the federal government expands, and the debt continues to grow, and the currency continues to be debased what should we do next?  What can you do to insulate yourself and better secure your unalienable rights from the leviathan’s tentacles?

The answer is to build a firewall between your family and the federal government.  What I mean by a firewall is a way to insulate the federal government as much as possible while strengthening things around you.  The things that are around you are:

1)      Your family.

2)      Your neighborhood and community.

3)      Your local government.

4)      Your state government.

5)      Your county sheriff.

6)      Your network of like-minded people.

Recently, Hurricane Sandy hit the mid-Atlantic coastline and there are still many people without food and water, shelter, or electricity.  The government is ineffective in these situations.  People suffer.  People die.   People that look to and depend upon government to rescue them, to support them through so-called government programs, to provide for their retirement or medical care, and many other things must face some uncomfortable truths.

The government can’t rescue or save you.  The government cannot be the answer for your everyday needs in life.  The government cannot provide a cradle-to-grave life for you.  The government cannot provide spiritual guidance.  This is nothing more than a comforting lie which allows you to ignore reality; to ignore the uncomfortable truth that there are risks and rewards in life.  That failure is an option.  Success is an option.  Your choices are yours and yours alone to make.  And, you live with the consequences of your choices.

To live in a government imposed and controlled society where choice and individuality is limited, where success is punished, and failure is rewarded is to ensure a constant, pleasant Prozac-like state of mediocrity. It ensures that no individual is unique or different.  Rather, nobody is special and we are all mere cogs in government’s machinery.   It is to live in peaceful slavery as you and your fellow man battle with others in society for the crumbs tossed your way by government masters.  This is wrongful liberty and certainly not how free people live.

The answers must come from us.  We must build a firewall between ourselves and the federal government through local and state solutions.  We must reclaim responsibility for our lives, our liberty, and our property.  We must reclaim our virtues and not allow government to dictate what is or isn’t virtuous.  We must recognize the smallest minority in the country is the individual.  Each individual must exercise rightful liberty to unobstructed action within their own will drawn around the equal rights of others.  Not to exercise superior rights over others or to have others exercise superior rights over you.  Not to have a government use the brute force of institutionalized state violence to exercise superior rights over you and obstruct your actions.  Not to decide winners and losers in life or in the economy.  Not to create a dependent society demanding, by right or precedent, free things from government.  Rather to create an environment, a condition of rightful liberty where each person’s choice of unobstructed action allows them to obtain goods and services they want or need.

Changes indeed have occurred slowly over the generations and have reached a point where America is no longer recognizable.  I encourage each of you to take some time after this election and genuinely reflect about these things.  Cast aside political parties and propaganda, rhetoric and fear, and free your minds to consider your future and the future for your posterity.   God Bless.

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One Question for the Candidates

As a citizen, voter, and spectator to the 2012 congressional and presidential elections I’m shocked and appalled by the lack of substance conveyed by the candidates.  Language is used to evade questions intended to draw out substantive responses.  Since running for elected office is analogous to applying for a job, I thought to myself, “What would be the one question I would require every candidate for national office to answer?”

A word of caution as my question isn’t nearly as brilliant or insightful as the one asked by ABC’s George Stephanopoulos about contraception.  Nor is my question asked to uncover intimate and personal details of a candidate’s marriage.  Unfortunately, the main stream media would consider my question shallow and contemptuous; beneath the dignity of a candidate for president much less the current president.  Sadly, but without remorse, my career aspirations as a journalist for ABC or CNN vanish before my eyes.  But I digress.

Scenario

Government revenues in 2011 were roughly $2.2 trillion.

Government spending falls into one of three buckets: $2.4 trillion for entitlement programs and debt service, $891 billion for non-discretionary military, and $496 billion for discretionary spending.

Assuming you had the power to enact all the changes necessary to balance the budget my question is:

Over what period of time and exactly how much will you cut from each of those three buckets to balance the budget?

Most of the Republican presidential candidates have no intention of cutting non-discretionary military spending.  Assuming every candidate eliminated all $496 billion of discretionary spending a $1.091 trillion deficit remains.  To be generous let’s assume federal revenues increase by $400 billion.  The deficit would stand at $691 billion.  Over ten years the debt would grow from $16.2 trillion to $23.2 trillion.  Living on a lunar colony is looking better by the day.

I’ve asked this question to Republican congressional candidates and not a single one has provided a sufficient answer.  In fact, not a single candidate has yet to provide a solution.  The question was posed under ideal conditions that the candidate had all the power to enact changes before factoring in the two party system, ideology, special interests, power struggles, and back room deals.

Voters in the 2012 election should set their expectations accordingly.  The simple truth is there isn’t a single Republican or Democrat candidate that will address this problem.  Both parties benefit from the status quo and have no intention of committing political suicide by making the necessary, difficult decisions required to balance the budget within a year or two much less four or five years.

This is our stark reality.  It is surreal.  My question to you is what are you going to do about it?  Are you going to vote for the status quo?  Are you going to vote for a candidate that will increase the debt by $4 trillion over four years instead of staying with the incumbent President and incurring perhaps $6 trillion or more over the next four years?

As the ruling class fights in the sand box like petulant children it is we the people that will feel the onslaught from economic Armageddon.  The change I’ve been hoping for is in we the people.  The one question for the voters is will you continue to vote for the status quo?

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Abject Failure of the Welfare State

An impartial, objective analysis of government programs that have the word “public” pre-pended to the program are abject failures.  The purpose of this article is to analyze three government programs; public housing, public education, and public assistance.  The evidence overwhelming supports these government programs are abject failures.  Furthermore, if the Patient Protection and Affordable Care Act, colloquially referred to as ObamaCare, is implemented expect that program to be an unmitigated failure as well. 

Public Housing

How well has the three trillion dollars spent on public housing worked out for America, especially poor Americans?   In the book, American’s Trillion-Dollar Housing Mistake, author Howard Husock of the Manhattan Institute for Policy Research examines the reasons public housing failed:

Why is government in the housing business?  The standard answer is because the market fails to provide adequate supply, particularly to house the nation’s poor.  Thus an array of government programs from vouchers, mammoth housing construction, favorable tax policies, and top-down mandates on cities and towns take up the slack caused by “market failure”…

How did we get here?  Husock says that three “remarkably tenacious” myths perpetrate the government as “houser” argument:  1) the market will not provide housing for the poor; 2) by taking the profit motive out of the equation the state can do better than small property owners in providing housing; and, 3) the moral qualities of the poor are a product of their housing environment.

Eliminating the profit motive from the equation is eerily similar to the arguments for health care reform and the public option.  The government incorrectly and brazenly assumes that as a non-profit provider of goods and services they are more competitive than a private insurer, and better suited to meet the needs and demands of the consumer or marketplace.  The government interjects itself as housing provider, subsidizer, landlord, and property management company.  Public housing results failed miserably to meet market needs, reduce costs, or eliminate poverty.

Furthermore, specific government intervention through the Community Reinvestment Act and government sponsored entities (GSE) Fannie Mae and Freddie Mac were culpable in the sub-prime mortgage debacle in the housing market which greatly contributed to the financial industry problems in 2008 and the current economic situation.  Government mandates placed upon lending institutions modified industry business practices that required down payments, decent credit, and verifiable income from mortgage applicants.  Instead, the mandates forced lenders to provide sub-prime loans to unqualified applicants.  Fannie-Mae frequently bundled those loans and sold them to investors; which in turn used them as collateral against other securities.  All perfectly legal, and under the careful and watchful eye of numerous Congressional committees and federal agencies, led the housing market and the economy into a free fall.  All these well-intentioned regulations resulted in numerous unintended consequences.

Public Education

In 1979, President Jimmy Carter signed into law the Department of Education Organization Act.  On the day President Carter signed the bill he said…

The Department of Education bill will allow the Federal Government to meet its responsibilities in education more effectively, more efficiently, and more responsively…

Fourth, a Department of Education will save tax dollars. By eliminating bureaucratic layers, the reorganization will permit direct, substantial personnel reductions. By enhancing top-level management attention to education programs, it will earn improved educational services at less cost.

The budget appropriated for the Department of Education from 1980 through 2008 as well as the high school graduation rates are summarized below.

Appropriation Year

Amount
(in Thousands)

Constant
2000 Dollars
(in Thousands)

On-Time Public High School Graduation Rate

1980

14,011,052

29,190,219

72.20%

1990

24,345,321

31,986,872

73.70%

2000

38,447,366

38,447,366

71.70%

2008

68,574,592

55,368,173

73.40%

Sources:  National Center for Education Studies, Department of Education – Budget History  Note:  2008 graduation rate is from 2006 as that is the last actual, non-projected year available.

Any fair-minded person would generally accept high-school graduation rates as a reasonable barometer to measure the impact of federal government education spending.  In 2000 constant dollars the Department of Education budget has nearly doubled from 29 billion dollars in 1980 to 55 billion dollars in 2008, while the on-time public high-school graduation rate is flat. According to the goals outlined in President Carter’s statement I categorically state they have not eliminated bureaucratic layers, they have not substantially reduced personnel, nor have they improved services at less cost.  On a side note, the American Recovery and Reinvestment Act of 2009 appropriated an additional 98 billion dollars to the Department of Education. 

Furthermore, the educational landscape is the cluttered with two major labor unions; the National Education Association (NEA) and the American Federation of Teachers (part of the AFL-CIO).   According to the NEA’s 2007 LM-2 filing with the Department of Labor they had nearly $353 million in receipts, expended $32 million in political activities and lobbying, and expended $80 million in contributions, gifts, and grants.  A partial list of recipients include; ACORN, Campaign for America’s Future, GLSEN (Gay, Lesbian and Straight Education Network), National Council of La Raza, USAction, and Women’s Voice, Women Vote.  The NEA’s Oregon affiliate stated…

The major purpose of our association is not the education of children, rather it is, or ought to be the extension and/or preservation of our members’ rights.

Undoubtedly, the only correlation between federal education spending levels and public high-school graduation rates is increased spending doesn’t improve graduation rates.  Union leadership obstructs real meaningful educational reforms as the union’s primary objectives are counter to improving our children’s education.  The political reality aligns union leadership with high-level government politicians and bureaucrats to control and define society through the auspices of better education for our children, while confiscating more of our hard-earned money.  Quite simply, parents working within their local communities and states are better equipped to address educational needs and implement appropriate solutions.  Lastly, there is the unconstitutionality of federal involvement in education, but that is an entirely beyond the scope of this article.

Public Assistance (Welfare)

Public assistance (a.k.a. Welfare) is a monumental government failure.  A Heritage Foundation Report titled “Obama to Spend $10.3 Trillion on Welfare:  Uncovering the Full Cost of Means-Tested Welfare or Aid to the Poor” by Robert Rector, Katherine Bradley, and Rachel Sheffield states this on welfare spending…

There are 70 federal welfare programs across 14 different federal agencies (one of which was public housing).  In fiscal year 2008, total government spending on means-tested welfare or aid to the poor amounted to $714 billion.  This equates to roughly $16,800 for each poor person in the United States.  Welfare spending was 13 times greater in FY 2008, after adjusting for inflation, than it was when the War on Poverty started in 1964.  Means-tested welfare spending was 1.2 percent of gross domestic product (GDP) in 1965 and in 2008 it is 5 percent of GDP. 

 Since the beginning of the War on Poverty, government has spent $15.9 trillion (in inflation-adjusted 2008 dollars) on means-tested welfare.  In comparison, the cost of all other wars in U.S. History was $6.4 trillion (in inflation-adjusted 2008 dollars).  Do not conclude that I support all war efforts just because I’m comparing public assistance costs to the cost of all wars.  It is meant merely to be a point of comparison.

Under President Obama, government will spend more on welfare in a single year that President George W. Bush spent on the war in Iraq during his entire presidency.  While campaigning for the presidency, Obama lamented that “the war in Iraq is costing each household about $100 per month.”  Applying the same standard to means-tested welfare spending reveals that welfare will cost each household $560 per month in 2009 and $638 per month in 2010.

According to President Obama’s budget projections, federal and state welfare spending will total $10.3 trillion over the next 10 years (FY 2009 to FY 2018).  This spending will equal $250,000 for each person currently living in poverty in the U.S., or $1 million for a poor family of four. 

Call me skeptical, pessimistic, or whatever you’d like, but centrally planned, government run social programs are abject failures.  The evidence bears this out.  This is why we must bind the federal government to its legitimate constitutional authority and return to federalism.

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Politicizing the Payroll Tax Cut

The debate over a two percent reduction to the payroll tax rate is mind-numbing.  The ruling class acts like petulant children who can’t play nice in the sand box.  The ruling class once again uses the tax code to divide and conquer the people to satisfy their personal ambitions. 

Let’s put this into context.  Assume an average annual income of $50,000 a year, a two month extension amounts to $167 which is just over $19 per week.  What does $19 buy you?  It buys about 6 gallons of gas, or 4 Chiptole burritos, or 2 large pepperoni pizzas for the family. 

It baffles me that both political parties and the lemmings in the main stream media focus on this issue as though it is the overarching issue of the day.  The country is $15 trillion in debt.  The government hasn’t passed a budget in over 900 days.  Annual deficits routinely exceed $1 trillion.  Unfunded entitlement liabilities exceed $100 trillion.  The ruling class just passed a law that can detain American citizens indefinitely and without trial.  Yet, the focus is on a two-month temporary tax cut that will not change the standard of living for a single person. 

The moral and philosophical aspect of this tax cut is even more disturbing than the inane debate.  The tax cut represents a systemic problem germane to the tax code.  The Lords of the Potomac use the tax code for personal political benefit.  Individuals as well as special interests want to preserve their tax break, credit, or subsidy.  Unfortunately, too many individuals vote for the candidate that promises them the most in return.  A certain quid-pro-quo exists where large swaths of society pay no federal income taxes and/or receive certain benefits in exchange for their votes.  Likewise, too many companies receive preferential treatment in the tax code or subsidies for certain activities and in return those companies, trade groups/associations, unions, or political action committees contribute to campaign coffers.  

Moreover, the tax code is used as political fodder to divide Americans.  We often hear how the rich don’t pay their fair share, or there are tax breaks for this industry or that industry.  The ruling class use envy and jealousy to appeal to the worst part of human nature in order to divide the people.  Elected officials act despicably when they attempt to turn one person against another because one earns more than the other.  Government attempts to legitimize the redistribution of property according to their personal preferences.  Government punishes the person that earns more by taking more of their property and redistributing that property to special interests and others in society.  Likewise, government rewards the person that earns less by giving them property they have no rightful claim to.  

The ruling class makes scapegoats out of the top 1% of income earners and demonizes companies that use tax breaks that the ruling class enacted in the first place.  Conveniently, the ruling class forgets that nearly 50% of all federal income tax filers pay no federal income tax.   This issue has nothing to do with being fair.  The issue has everything to do with partisan politics, campaign fundraising, and getting re-elected to office.  In short, it is merely about keeping the status quo.

Remarkably, the ruling class and their sycophants in the media ignore that government is arguing over property earned by the citizens.  The government treats the money as though they have a rightful claim to it.  Somehow, it is only through the good graces, compassion, and benevolence of the ruling class that allows hard-working citizen to keep an extra $19 of their own money.  The Lords of the Potomac bellow “Kneel before us and beg for your money”.  The Lords continue, “Come closer for these crumbs of bread as you are subservient to us.  Kiss the hand that feeds you these crumbs.  And, don’t forget to vote for us in the next election.” 

This act, played over and over again in the cesspool that is Washington D.C., reminds me of something Sam Adams once said, “If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom, go from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that you were our countrymen!” 

Too many Americans crouch down and lick the hands which feed them.  By participating in this system, the people enable government to act as a proxy for them and engage in the legal plunder of those that produce; to punish achievement and success.  The law’s intent was to protect individual rights, liberties, and property.  The government has stood the law on its head and now uses coercion and the threat of fines and imprisonment to steal from one segment of the population. 

If the ruling class truly cared about the middle class keeping more of their own hard-earned money there are dozens of other actions government could undertake.  One example is the elimination of corporate income taxes.  Corporate taxes are an expense which is passed on to the consumer in the final cost of a product.  Another example is a flat tax applied to all income and is paid on every dollar earned.  Lastly, why limit the payroll tax cut to 2%?  Why not eliminate it entirely so the middle class worker can keep an additional 4.2% of his hard-earned money?  

The simple truth is the ruling class doesn’t care about the middle class or any other part of society.  The ruling class intervenes in every aspect of our daily lives and the economy as an excuse to pursue their own ambition and avarice at the expense of society.  The 2% temporary payroll tax reduction is another opportunity for the ruling class to politicize an issue for their own benefit.  The ruling class would have it no other way.  This is just another example of the mind-numbing stupidity and insanity that is Washington, D.C.

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An American Economic Recovery Plan

Government interference in free markets over the past eighty years produced a tangled web of laws, regulation, and upside-down monetary and fiscal policy.  Decades of heavy-handed government intervention has driven manufacturing and production overseas. America had a robust economy with low levels of consumer debt and a reasonable chance for personal savings.  

The modern day economy is almost entirely service oriented and people lose money if they save money in traditional savings or money-market accounts.  To keep ahead of inflation and the debasement of the currency people must earn returns in the six to seven percent range to maintain their standard of living.  For many, they cannot achieve this return on their investments or do not have access to equity and bond markets, commodities, and other investment opportunities.  Certainly, the person earning $25,000 year doesn’t have a substantial amount of savings; however he wants to earn a return so he can, at minimum, maintain his current standard of living. 

Today, a person may earn one percent interest in a savings account.  Subtract the inflation rate (nominal CPI number) and the debasement of the currency, a person loses six to seven percent a year just because they are trying to save.  Monetary policy purposely keeps interest rates low to keep interest payments on the outstanding debt as low as possible.  Paradoxically, the very people government claims to help are the people government hurts most.  Real unemployment, referred to as the u6 unemployment rate, is seventeen percent.  The rate for young, unskilled workers is even greater.  Even worse is the unemployment rate for minorities. 

Government and the media lie, deceive, and perpetuate a myth to unwitting citizens.  The economy cannot truly recover because the manufacturing base has declined drastically over the past thirty years.  The dollar’s value has been debased substantially since President Nixon broke the Bretton Woods agreement in 1971.  A dollar in 1971 requires a 432% return on investment to be equivalent to a dollar in 2010.  In other words, you must earn a return of 4.32% per year, every year, from 1971 to 2010 to maintain the value of a dollar.  What cost a dollar in 1971 costs $5.32 in 2010.  What costs you a $1 in 2010 would have only cost you 18 cents in 1971. 

In addition, the government is nearly $15,000,000,000,000 in debt.  According to the President’s 2012 budget proposal, the debt is expected to rise to $22,000,000,000,000 by 2020 using unrealistic assumptions.  The budget proposal assumes annual GDP growth between four and five percent, and assumes the interest rate will remain at or near today’s levels.  GDP growth hovers near 1.5% and, historically, interest rates don’t remain low for a decade or more.  The historical twenty year interest rate averages roughly 5.5%.  If interest rates rose to 5.5%, interest payments on the debt would rise from $270,000,000,000 to nearly $1,000,000,000,000 annually. 

In my estimation the only possible change to reverse the inevitable demise facing the country is a complete return to free markets without government intervention.  Here are my proposals: 

  • Eliminate all subsidies to every industry, company, non-profit, non-governmental organization, etc.  Government should not pick which industries win or lose, or winners and losers within an industry.
  • Eliminate the corporate income tax.  Taxes are an expense to a corporation just as wages, rent, phones, and utilities are expenses.  Income tax expenses are incorporated into the cost of the product which means the cost is passed on to the consumer.  It is a hidden tax and hurts lower income earners the most.  Moreover, global companies with revenues that have not been repatriated from overseas can now bring that money back to theU.S.  Lastly, businesses will be attracted to the country because there is no corporate income tax.
  • Eliminate the current individual income tax system and replace it with a flat tax or a fair tax.  If the latter, repeal the sixteenth amendment.
  • Eliminate the inheritance (estate) tax.  This is a form of double taxation.  Income is taxed when it is earned, then when property is passed onto a person’s heirs it is taxed again.
  • Implement a plan to sunset the Social Security program.  While this may take 20, 30, 40 years to phase out.  The program must be terminated gracefully. 
  • Implement a plan to sunset the Medicare program.  Again, this may take 20, 30, 40 years to phase out.  The program must be terminated gracefully.
  • Eliminate baseline budgeting where last year’s budget is rolled forward and, typically, the budgets are increased.  Each year, every federal government department, agency, and bureau must justify its existence and budget.
  • Implement a plan to eliminate federal departments and agencies that are unconstitutional.  The plan must phase out these departments over three years.
  • Develop energy sources here in theUnited States.  Government must eliminate all barriers and restrictions to drilling for oil, natural gas, natural liquids, and shale oil.  All technologies, old and new, must compete in a free market without subsidies from government. 
  • Eliminate all affirmative action programs.
  • Eliminate the minimum wage.
  • Pass federal legislation prohibiting public sector unions in the federal government. 

The federal government, including the banking system, has competing interests with the American worker.  Those that succeed are punished and vilified as fat-cat, greedy people while others are rewarded and supported by government programs paid for by others.  Individual taxes are highly progressive.  Corporate taxes are the highest out of the G20 countries.  Statutory laws and regulations (many not made in pursuance of the Constitution) act as a wet blanket to smother creativity and ingenuity.  Government imposed risks far outweigh potential rewards.  Is anyone surprised when U.S. businesses move all or part of their business overseas?  

Can the federal government fix itself?  Are there principled leaders to run Congress and the country?  If the thirty years of my adult life is any indication, the answer is a resounding NO!  We need true reformers at all levels of government!   Government’s role must be limited and narrow!  In other words, we need to redefine government – Now!

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