Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Entitlements

Hyperinflation in Iran – is US Next?

Iranian rial

Iranian rial (Photo credit: Wikipedia)

Once again I am indebted to Gary North for an article to his members only for an insightful discussion of the hyperinflation going on in Iran. Indirectly, he paints the picture for what will inevitably happen here.

For the record, I pay him $9.95 a month for his daily insights, and I’m glad to do it. I think it’s the bargain of the year. He has thousands of subscribers, so it works well for him too. I recommend that you consider signing up as well. How he writes four insightful articles every day is beyond my comprehension.

Back to Iran: North quotes Steve Hanke at Cato (you can get his article for free!):

Since the U.S. and E.U. first enacted sanctions against Iran, in 2010, the value of the Iranian rial (IRR) has plummeted, imposing untold misery on the Iranian people. When a currency collapses, you can be certain that other economic metrics are moving in a negative direction, too. Indeed, using new data from Iran’s foreign-exchange black market, I estimate that Iran’s monthly inflation rate has reached 69.6%. With a monthly inflation rate this high (over 50%), Iran is undoubtedly experiencing hyperinflation.

The Iranian government is destroying the currency and hence the economy. And from there, the government itself. North thinks if the Israelis wait long enough, they won’t have to

Keep Reading…

National Review Doesn’t Speak For Me

Arthur C. Brooks – Why the Stimulus Failed

Ask most Americans about the big-spending government policies of the last few years, and they will tell you the programs have failed. In a February 2012 poll from the nonpartisan Pew Research Center, 66 percent of Americans said the federal government is having a negative impact on the way things are going in this country (versus 22 percent who say the impact is positive). A majority disapproves of the president’s 2009 stimulus, and according to a 2010 CNN poll, about three-quarters of Americans believe the money was mostly wasted.

National Review Covers Jan-Jun 2008

National Review Covers Jan-Jun 2008 (Photo credit: AlaskanLibrarian)

This, I agree with. I’m glad to see, according to the polls at least, that more and more Americans also agree: government stimuli didn’t stimulate.

What I disagree with is Brooks’ contention buried later on in the article about conservatives (I generally consider myself one, if defined properly) and safety nets:

Conservatives today understand the importance of a reliable safety net for the truly indigent and the necessity of dealing with certain market failures.

Further, there is universal support on the political right for opportunity-equalizing government policies, such as publicly funded education (ideally, administered for the benefit of children as opposed to rent-seeking bureaucrats and teachers’ unions).

Wow! I didn’t realize that I believed in and supported all these things! But this is National Review, the supposedly “conservative” voice of reason in today’s world.

The most reliable safety net in the world is…are you ready…the family. That’s why socialists the world over consider the family as the enemy of the state: everyone must be dependent on the state or else their socialist plans fail.

And “universal support” for “publicly funded education?” All I see is that the more that is spent by governments on such education is lower scores and more acceptance of big government on the part of the kids.

So somewhere along the way I got off the bus on “conservatism,” at least the style supported by National Review.

Another Crucial Point About Social Security

Laurence M. Vance – The Problem with Conservative Plans to Save Social Security

Aside from raising Social Security taxes…other proposals to “save” the system include raising the retirement age, means-testing benefits, cutting benefits, fully taxing benefits, ending early-retirement benefits, raising or eliminating the wage base, reducing cost-of-living increases, and any combination of those things.

Social Security Card - Illustration

Social Security Card – Illustration (Photo credit: DonkeyHotey)

There have been proposals flying around the ether for years about how to “fix” Social Security. But Vance isn’t impressed with any of them, even if they are offered by the Heritage Foundation:

The Heritage Foundation envisions a flat-tax system that “folds today’s federal payroll taxes financing Social Security and Medicare into the new system, establishing a single tax rate for all taxpayers.”

He points out the difference between Social Security’s “funding” versus its “function” – a nice play on words:

There is just one problem. And it is the same deficiency found in every other conservative plan to fix, reform, strengthen, or save Social Security…All such plans continue the existence of an illegitimate government retirement and disability plan funded and maintained by government force.

Bingo! Thank you very much for pointing out what should be obvious: it’s impossible to fix a system that is, at bottom, fundamentally and irreversibly flawed. Vance adds:

Because Social Security is an income-redistribution program, because it is an illegitimate purpose of government, because it is unsustainable, because it is unconstitutional, and because it is incompatible with a free society, the system must be abolished. To that end, it is Americans’ attitude toward entitlements that must first be changed.

That “attitude toward entitlements” will change when the checks stop.

Medicare: The Latest Political Football

paul ryan medicare

paul ryan medicare (Photo credit: Brendan Loy)

With political ads defending and bashing various proposals about how to “fix” Medicare reaching a crescendo, fact-checkers are having a field day in sorting through who’s right and who’s wrong. The claim by Democrats that Paul Ryan’s reform bill would “end Medicare as we know it” was awarded the “lie of the year” by Politifact, while Factcheck.org named it one of the “Whoppers of 2011.” Even the liberal Washington Post gave the canard its highest—or lowest—rating of “four Pinnochios.”

Claims by Republicans that President Obama “raided” Medicare by cutting benefits and using bookkeeping entries as ways to fund ObamaCare without increasing the deficit are adding to the noise. They also claim that cuts to suppliers of medical services will ultimately result in reduced services for Medicare beneficiaries, reductions exacerbated by the unelected panel—the Independent Payment Advisory Board (IPAB)—charged with keeping costs in line through essentially dictatorial powers granted by ObamaCare.

What’s clear is that Medicare is in trouble, and has been almost from the beginning. In 1965, when Medicare was signed into law by President Lyndon Johnson, costs were estimated to approach $9 billion annually by the year 1990. It exceeded $65 billion that year. Last year Medicare spending touched $560 billion, and is headed toward $1 trillion in less than eight years.

Trustees are frightened about its future. Their 2012 annual report states: 

Keep Reading…

Entitlement Reform is No Longer the Third Rail!

Ken Blackwell: Romney-Ryan Forces Americans to Finally Face Looming Fiscal Doom

American politics has crossed the Rubicon on spending and entitlements, and these issues will at long last complete the journey from a forbidden third rail to a central element of national politics.

The former Ohio Secretary of State Ken Blackwell

The former Ohio Secretary of State Ken Blackwell (Photo credit: Wikipedia)

This is very important. Ryan’s entry into the electoral process is bending the conversation—very late in the game—around to talking about entitlement reform.

I went on a speaking tour 25 years ago for The John Birch Society to talk about the unsustainable Social Security program. It was obvious even back then, and the story was compelling. At least I thought so. But the tour was cancelled after just a few talks: no one was coming out to hear it! Those who did, didn’t want to hear about it. They just wanted assurance that their checks would continue. When I told them that, yes, your checks—for the time being—would continue, they lost interest, and left. I mean they got up in the middle of my presentation, and walked out!

Ryan is like a magnifying glass: providing focus on the problem. Here’s what Blackwell notes:

Congressman Paul Ryan is best known for his budget, the Ryan Roadmap, which ties together the two sides of our fiscal-crisis coin: First, the major entitlements of Social Security, Medicare, and Medicaid will soon be bankrupt and unable to provide for millions of beneficiaries. And second, our growing $16 trillion debt will result in an unprecedented economic disaster if not balanced and then paid off.

It takes a crisis to get peoples’ attention. And the message is finally coming through: if something can’t continue, it will stop. And the folks are getting it.

It’s happened before:

Beginning in 1783, national leaders like John Jay corresponded with George Washington—the recently-retired commander-in-chief of the Continental Army—about the need for structural change in American government. They made the case that the Articles of Confederation had failed, and the national governing document must be fundamentally overhauled.

This eventually led to the drafting of the U.S. Constitution in 1787. But before reaching that point, as late as 1786, Washington agreed that young America teetered on the edge of an abyss, but that a critical mass of American citizens had not yet reached the same assessment. Things would get worse before they could get better, Washington concluded. Then things got worse with Shay’s Rebellion, and change came.

George Washington intuitively understood that major change in a democratic system must be driven by the people. We will not reform entitlements and balance the budget until they become kitchen-table issues for ordinary citizens, which takes time and visibility. Democrats simply pretend there is no problem. Now Republicans can make these points so central to national discourse that they become unavoidable and undeniable.

The big question remains: will anything substantial be done? Or will it just be talk? If we wait long enough, the problem will solve itself: the checks will stop.

Congressional Budget Wrangling Continues

Sen. Pat Toomey, R-Penn.

With the October 1st deadline for a budget for 2013 approaching rapidly the Republicans in the Senate yesterday forced a vote on five different budgets, and each was voted down. Four of them were presented by Republican senators, while the fifth was based on President Obama’s budget

None of them passed, including the president’s which was voted down unanimously, 99-0. Sen. Patrick Toomey’s (R-Pa.) plan garnered 42 votes while Rep. Paul Ryan’s (R-Wisc.) captured 41 votes. Sen. Mike Lee (R-Utah) saw his plan gather only 17 votes, just ahead of the plan offered by Sen. Rand Paul (R-Ky., right, Senate photo) which received 16 votes.

Toomey blamed the failures on Democratic intransigence, while Senate Majority Leader Harry Reid (D-Nev.) called them all “stunt budgets.” Said Toomey:

My colleagues on the other side refuse even to debate our fiscal crisis, let alone introduce a fiscal blueprint for solving our country’s problems. Instead of lobbing political attacks at the ideas I and my Republican colleagues have put forward, it is incumbent upon the majority party to put forward ideas of its own. Anything less is a flagrant abdication of its governing responsibility.

Reid responded:

Democrats won’t agree to a one-sided solution that lets the superwealthy off the hook while forcing the middle class to bear all the hardship. These four stunt budgets all take that one-sided approach.

On the surface, Paul’s budget looks to be the most aggressive, with the budget projected to

Keep Reading…

The Budget Battle: Entitlements Staying, Taxes Going Up

When Rep. Paul Ryan (R-Wis.), Chairman of the House Budget Committeesummarized his tax and spend plan, he used standard Republican rhetoric in explaining it.

He claimed, “Our budget

  • Cuts government spending to protect hardworking taxpayers;
  • Put[s] an end to special-interest favoritism and corporate welfare;
  • Reverses the President’s policies that drive up gas prices…;
  • Strengthens health and retirement security…[and]
  • Reforms our broken tax code to spur job creation and economic opportunity by lowering rates, closing loopholes, and putting hardworking taxpayers ahead of special interests.”

In his introduction to the bill, he inveighed images of the Founding Fathers, who no doubt would have heartily approved of his efforts: “The Founders [designed] a Constitution of enumerated powers, giving the federal government broad authority over only those matters that must have a single national response, while sharply restricting its authority to intrude on those spheres of activity better left to the states and the people.” By using his interpretation, rather any reference directly to what the Constitution actually says, Ryan then goes on to assure his party that

Keep Reading…

Obama Targets Ryan Budget to Distract from Failed Policies

U.S. President Barack Obama speaks to the pres...

Reaching into President Obama’s 14-page, 7,200 word luncheon speech to the Associated Press on Tuesday, some conservative observers took umbrage at a few of his choicest and more outrageous characterizations of Rep. Paul Ryan’s budget bill, while leaving much behind.

Patrick Knudsen, writing on the Heritage Foundation’s blog, said the President used “shrill hyperbole” when he called Ryan’s plan “thinly veiled social Darwinism” which would, if enacted, be “antithetical to our entire history as a land of opportunity.” It would “impose a radical vision on our country” and would be a “prescription for decline.” Taking another approach, Alison Fraser also wrote on Heritage’s blog that the reason the President directed so much attention to Ryan’s plan was because he wanted to direct people’s attention away from his own failures as President over the past three years: “As a counter to his failure to lead us away from the fiscal abyss, Obama has chosen to attack Ryan and the House budget with scary rhetoric about Trojan horses, social Darwinism, and [its] radical vision for the country.”

House Speaker John Boehner (R-Ohio) responded to Obama’s comments by doubting his sincerity and chastising him for not presenting a reasonable budget alternative:

If the president were serious, he would put forward a plan to deal with our debt crisis and save Social Security, Medicare and Medicaid for future generations of seniors without raising taxes on small businesses that are struggling in this economy. Instead, he has chosen to campaign rather than govern, and the debt crisis he is presiding over is only getting worse.

Rep. Jeb Hensarling was even stronger, calling Obama’s speech an “unhinged attack” and an “act of desperation” to direct attention away from his failed policies. Even Darrell West of the Brookings Institution, a left-of-center think tank, agreed: Obama needs to

Keep Reading…

Budget Deadlock, Despite House Passage of Ryan Plan

Ron Paul's blimp

The budget plan of Wisconsin GOP Rep. Paul Ryan passed the House on Thursday 228 to 191, mostly along party lines. In fact, not a single Democrat voted for it, signaling that it won’t see the light of day in the Democrat-controlled Senate as predicted here. The previous day, the House overwhelmingly rejected 382-38 the Simpson-Bowles deficit reduction proposal, which incudes tax increases as well as spending cuts. Last week, the administration-supported budget bill was also voted down, 414-0, which leaves the legislative branch of the U.S. government in limbo.

Supporters of the Paul Ryan budget trumpet that his bill would simplify the tax code and modify Medicare, putting more control into the hands of the states. White House spokesman Jay Carney disagrees, saying the changes proposed to Medicare would “burden seniors and end the program as we know it,” while giving tax breaks to millionaires and cutting critical jobs programs.

Speaker of the House John Boehner lost 10 Republican votes, including several who said Ryan’s bill was too weak. Rep. Ed Whitfield (R-Ky.) declared, “I’m not going to vote for a budget that takes more than 20 years to be in balance.”

Each of the bills voted on, including Ryan’s, continues deficit spending for years into the future. Ryan’s plan spills red ink of $1.3 trillion over the next 10 years, while the White House budget projects deficits of $6 trillion, with the Bowles-Simpson proposal coming in at $4.5 trillion. But none of them addresses the real issue, according to Texas Congressman Ron Paul. In a statement issued after the vote on the Ryan plan, Paul said

Keep Reading…

New Book, White House Burning, Reprises Old Keynesian Canards

U.S. Total Deficits vs. National Debt Increase...

On April 3 the book White House Burning, authored by two hard-core Keynesian economists and internationalists, will be released, and the noisy propaganda surrounding its publication has already begun in earnest.

According to the book store Barnes and Noble, which is discounting the $26.95 hardcover book to $17.96, though the national debt amounts to $30,000 for every individual in the country, the solution is easy: Stop treating debt as a moral issue and raise taxes. Says B and N, the authors “account for the debasement of our political system in the 1980’s and 1990’s (read: Reaganomics and the Laffer Curve), which produced today’s dysfunctional and impotent Congress.” But if something isn’t done soon,

The national debt will harm ordinary Americans by reducing the number of jobs, lowering living standards, increasing inequality, and forcing a sudden and drastic reduction in the government services we now take for granted….

They debunk the myth that such crucial programs as Social Security and Medicare must be slashed to the bone. White House Burning looks squarely at the burgeoning national debt and proposes to defuse the threat to our well-being without forcing struggling middle-class families and the elderly into poverty.

The authors, Simon Johnson (formerly the chief economist for the International Monetary Fund and now a professor at MIT) and James Kwak (associate law professor at the University of Connecticut and a fellow at Harvard Law), have based their book on a set of statist foundational principles about the role of government in a free society: More is better.

They explained in their introduction that when Alexander Hamilton, as Treasury Secretary, urged Congress to declare war on Great Britain in 1812, he put the responsibility for paying for it onto a reluctant Congress. Congress refused to raise taxes and the Treasury had to go begging to a private individual, Philadelphia banker Stephen Girard, to loan the money to pay for the war. This set the stage for the end of Hamilton’s Federalists (according to the authors) and the rise of Jefferson and Madison’s Democratic-Republican party. The authors then drew the parallels to today’s “dysfunctional” government, which is engaged in the same discussion: how to pay for

Keep Reading…

Senator Tom Coburn’s Annual “Wastebook” Released

"Dr. Coburn and Senator Obama look over t...

Senator Tom Coburn (R-Okla.) introduced his annual report, “2011 Wastebook,” noting, “This report details 100 of the countless unnecessary, duplicative, or just plain stupid projects spread throughout the federal government and paid for with your tax dollars this year.” He added, “Over the past 12 months, Washington politicians argued, debated and lamented about how to reign [sic] in the federal government’s out of control spending. All the while, Washington was on a shopping binge, spending money we do not have on things we do not need, like the $6.9 billion worth of examples provided in this report.”

Of the 100 projects covered, three are especially egregious, and reflect the “spend spend spend” mentality prevalent in the halls of Congress. “The Super Bridge to Nowhere” in Alaska is one of two projected bridges which became notorious during the 2008 presidential campaign.

The Knik Arm Bridge is designed to connect residents in the southern part of the Matanuska/Susitna Valley, or “MatSu,” with Anchorage, which would save them an hour’s driving time each way. The bridge would be 2.7 miles long and cost between $650 and $700 million (some estimates are much  higher). The only problem is that there are very few residents living in MatSu, hence the bridge is named in Coburn’s report. Corburn complained, “At least $15.3 million was spent on the project this year alone. In total, more than $65 million in federal taxpayer money has been directed to various aspects of the project, including $57,390 for a 14-minute video, ‘The Knik Arm Crossing: Bridge to Our Future.’ ”

And $1 million of that money was spent just for staff salaries to promote the project. 

Keep Reading…

Government Dependency Reaches Pandemic Levels

English: Scanned image of author's US Social S...

Conservative economist Robert Higgs‘ warnings about the Heritage Foundation’s Index of Dependence on Government were already outdated when they were published on Thursday. The updated statistics from Heritage for 2011, published the next day, showed the situation in the United States to be even worse than Higgs warned.

Higgs noted that the so-called “ruling class” (taken from Angelo Codevilla’s book of the same name) is a tiny percentage of the total population in the country, and has in the past only been able to maintain its legitimacy through vote-buying and mainstream media credibility. The fear of the ruling class has always been that dissatisfaction and distrust would result in their expulsion from the seats of power. But Higgs notes that now there are so many Americans dependent upon the government for their very subsistence that resistance to the tyranny of the ruling class is being increasingly neutralized.

The more dependent the citizens become on their government, the less influence they are likely to have in any substantial downsizing of that government: 

Keep Reading…

Brazil’s Economy Growing Like a Weed, Government Growing Even Faster

Almir Barbassa of Petrobas at Brazil Energy Co...

With the discovery of huge oil fields off the coast of Brazil in the fall of 2007 came estimates of just what impact they would have on Brazil’s already booming economy. Prior to the discovery of “pre-salt” reserves estimated to be the size of Florida and in excess of 120 billion barrels, Brazil’s economy was already considered to be the 7th largest in the world, according to the International Monetary Fund (IMF), the World Bank, and the CIA.

But as the resources are developed, to many observers Brazil is a cinch to take over 6th place by replacing Great Britain in the size of its economy. It’s economy in 2004 was one-third that of Great Britain’s but by 2007 it had grown to half. With the great recession costing the United Kingdom 20 percent of its GDP between 2007 and 2010, and Brazil’s continuing to grow apace by nearly 52 percent, the IMF now estimates that Brazil will take over 6th place by

Keep Reading…

A Hyper-Inflation Horror Story at Home

International Money Pile in Cash and Coins

David Galland’s article for the Daily Reckoning painted a picture of imminent collapse of America’s monetary system, which was followed four days later by Clive Maund’s possible scenario of bank failures following on the heels of a eurozone collapse. Mamta Badkar raised the specter of hyperinflation in his Business Insider article by reviewing the “10 Worst Hyper-Inflation Horror-Stories of the Past Century,” reflecting interest in whether, or how, the economic disaster of hyperinflation would affect the United States.

According to Badkar, the runaway inflation of Germany in the early 1920s is one of the worst cases in history, where, at its nadir, the monthly inflation rate reached 29,500 percent in October 1923. In post-World War II Greece, inflation peaked at

Keep Reading…

Top Economists Tell How to Grow Jobs

GROWTH

Image by SamuelBenoit (.wordpress.com) via Flickr

Now that the Senate has officially and resoundingly defeated President Obama’s jobs bill (The American Jobs Act), the question remains: just how do real jobs grow?

Matt Welch, writing in the November issue of Reason magazine, reminds his readers of what doesn’t work: government promotion of ideology. The Solyndra debacle is the most recent but not the only example. In May 2010 the President gushed over the positive impact Solyndra was having in growing jobs in the “green” sector:

We invested…in clean energy because not only would this spur hiring by businesses but it creates jobs in sectors with incredible potential to propel our economy for years, for decades to come. And we can see the positive impacts right here at Solyndra…

Keep Reading…

Krueger is Obama’s Economic Council Chairman Pick

WASHINGTON, DC - AUGUST 29:  U.S. President Ba...

Image by Getty Images via @daylife

This week President Obama will roll out his strategic jobs growth plan in a major speech, and has announced that his new chairman of his Council of Economic Advisers, Alan Krueger, is just the man to help him with it. Krueger comes from the same mold as the man he is replacing, Austan Goolsbee. Goolsbee graduated from Yale, Krueger from Cornell. Goolsbee got his PhD from MIT, Krueger got his from Harvard. Goolsbee worked for the National Bureau of Economic Research, and so did Krueger. Goolsbee is returning to the University of Chicago, while Krueger is leaving Princeton to join Obama.

But the president insists that Krueger will bring him “unvarnished economic guidance…[which is] more important than ever right now. We need folks in Washington to 

Keep Reading…

“Extremist” Presidential Candidate Ron Paul

Ron Paul at the 2007 National Right to Life Co...

Image via Wikipedia

Claiming that presidential candidate Ron Paul leads the “economic suicide wing” of the Republican Party, Brent Budowsky, writing for The Hill, says that Paul is the “worst possible role model” for Republicans because he suggested that a default by the government “would be OK.” Budowsky calls Paul a “Banana Republican,” claiming that Paul is taking an extremist position, adding that keeping the debt ceiling in place and putting the government on a diet would “literally crash American and global markets…that would do grave damage to our nation.”

Keep Reading…

Lieberman Plans to Kick the Medicare Can

Joe Lieberman Fluffy Flag

Image by Truthout.org via Flickr

Senator Joe Lieberman (I-Conn.) joined with Senator Tom Coburn (R-Okla.) on Tuesday in announcing their plan to reform Medicare before it goes “broke and take[s] our government down with it.” Noting that Medicare beneficiaries take almost three times more out of Medicare than they ever put in, Lieberman is persuaded that the flawed welfare-state program can be reformed.

With substantial increases in premiums and extensions of age of eligibility, Lieberman said their plan would save $600 billion over the next 10 years, and reduce Medicare’s unfunded liability from

Keep Reading…

Debt-Limit Negotiations: A Game of Chicken Over Chicken Feed

Chicken

Image by LollyKnit via Flickr

When House Majority Leader Eric Cantor (R-Va.) announced he was leaving the negotiations over raising the debt limit on Thursday, he made it clear that he felt he was getting pressured by the Democrats to accept tax increases as part of the deal. He said: “Each side came into these talks with certain orders, and as it stands the Democrats continue to insist that any deal must include tax increases. Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue.”

Keep Reading…

Fair Tax? Flat Tax? The Case for No Tax

Exterior of the Internal Revenue Service offic...

Image via Wikipedia

Stephen Moore’s math in his Wall Street Journal article is compelling: by the time the Democrats’ proposed three-percent surtax on incomes over $1 million a year is added to all the other taxes people pay, those at the high end would be paying 62 percent of their income in federal and state income taxes.

He adds together the current 35 percent top income tax bracket to the three percent surtax, along with the expected repeal of the Bush “tax cuts” in 2012, payroll taxes, Social Security and Medicare taxes, the 0.9 percent Medicare surtax, the hidden 3.8 percent sales tax in ObamaCare which begins in 2014, and state income taxes, and he comes out, inevitably, to

Keep Reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2020 Bob Adelmann