Incompetence on Display

by Richard H. Frank

Once again, this morning, we had our daily dose of seeing President Obama announce the creation of a “commission on deficit reduction.”  I expect that one of the major media networks will soon offer Mr. Obama his personal  hour-long television program so that he can spout progressive propaganda while satisfying his obvious narcissistic tendencies.

Today’s performance was a rehash of his State of the Union Address charging present and past Congresses with uncontrolled spending that has brought the nation its’ massive deficit.  Again, he attempted to take credit for saving our financial system by legislating the TARP program and investing in the future through continued stimulus spending.

President Obama obviously believes that Congress does not possess either the knowledge, discipline or the will to perform their constitutional duty to control the budget process.   Obviously, he and his administration are also incompetent to address this problem.  Apparently, he never heard of the presidential “veto” to curtail Congress which is also provided as a tool for him in the Constitution.

The appointment of Erskin Bowles and  Alan Simpson to head this bipartisan commission might best be described as “smoke and mirrors” to divert attention from the Administration’s continued push to force health care reform and cap and trade legislation through Congress and into law.  These programs will not reduce spending but only further exacerbate the problem.

The projected time table for the commission to make recommendations to the President is 6 months to a year.  In the interim, it will be business as usual in Washington.  When the commission’s recommendations do finally appear they will provide the President with an impregnable shield against any criticism for any actions he takes since they will be justified as having come from the “best authority available” and with bipartisan participation.

There are only two ways in which the deficit can be reduced.  First, reduce spending and next increase revenues to the Government in order to retire the national debt.  There are two financial mechanisms that can increase revenues:  1) increase the gross national product and 2) increase taxes.

This Government has never been successful, save in times of war, to increase GDP.  This leaves only one alternative available to politicians.  That alternative is to increase taxes.

Everything the Obama administration does has an ulterior motive, and I believe the appointment of this commission is no different.  The President needs a scapegoat in order to go back on his campaign pledge not to raise taxes on the middle class.  This commission will become that scapegoat.

Obama’s Commission on Fiscal Responsibility and Reform is “Wolf in Sheep’s Clothing

by Jayne D. Frank

President Obama today announced another diversion tactic designed to convince the  American people that he was serious in confronting the soaring U.S. deficit; an 18-member “bi-partisan” commission designed to study and address the issues which might bring the deficit down.  However, this commission is a “table without legs” because there is nothing in the establishmenet of the commission which will force the Congress to act on any of the inevitable findings.  The commission will be headed by Erskin Bowles, a true liberal populist who falls in line with Nancy Pelosi’s “pay go” rhethoric and he is very left-leaning on his stances on expanding the EPA, stopping any further oil drilling, and is a big health care advocate.  Also on the commission is Alan Simpson, who although a moderate, is totally ensconsed and comfortable in his substantial government pension for the rest of his life and would have no scrupples in pulling the plug or severely limiting benefits for seniors and otherwise suggesting severe cuts or reforms on the social security and medicare programs, and not necessarily on the programs and new legislation that President Obama wants to advocate which would severely add to our deficit.  Neither person, therefore, is totally without his own agenda.

The wolf in sheep’s clothing regarding this Commission is the fact that one of the most talked about recommendations to come out of this Commission will not be that President Obama and Congress curtail their spending and pork projects, but that the Government should go after Big Business and Middle American once again by adding a value-added tax (VAT).  This tax would not be in place of any Federal or State tax, which now eats up between 35% and 55% of income but would be added onto the cost of consumer goods, which Nancy Pelosi has called for.  It would punish businesses and farms, and would severely punish average households as they would be encouraged to save a higher percentage of their incomes rather than consume.  In an economy with millions of people currently unemployed and unable to get work, it is not a matter of whether to save or buy consumer goods.  It is often a matter of just paying their bills and putting food on the table for their families.  What I’d like to know is how many millions of taxpayer dollars is this wasteful and useful commission going to cost us?

The Power of our Constitution

by Richard H.  Frank

The question most often asked by average Americans is “What can we do about Big Government intrusion into our lives and its infringement upon our freedom?”  My answer is that we need to look to the two most powerful documents ever created in the annals of mankind.  They are The Constitution and our Declaration of Independence.

The Declaration of Independence established the foundation upon which our nation was to be built.  It enumerated the proposition that “All men are created equal” and “that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty and the pursuit of happiness.”  That “Government, instituted among men, derive their powers from the governed.”  That “The governed have the right and to change such Government should it impose abuses and usurpations upon the People.”  The ultimate power rests with the People, “the governed” and not with the Government.

The Constitution defined the structure within which our Government is restrained to function.  The Founders went one step further to assure the sovereignty of the People by adopting the “Bill of Rights” as the first 10 amendments to the Constitution.  These amendments are clear in limiting powers of the Federal Government over the people and further enumerate rights of the People to live free from Government interference.

These first Ten Amendments were ratified effective December 15, 1791 and provide for the following:

  1. Freedom to exercise any religion, the freedom of speech and press and freedom to peaceably assemble and petition the Government for a redress of grievances.
  2. The right of the People to keep and bear arms.
  3. The right to refuse providing quarter to the military in time of peace.
  4. The right against the Government for unreasonable search and seizures without a warrant.
  5. The right of due process of law including not being compelled to bear witness against oneself.  No person shall twice be subject to prosecution for the same offense.
  6. The right to a speedy public trial, and the right to have counsel in his defense.
  7. The right of trial by jury shall be preserved.
  8. The right against excessive bail and fines nor shall cruel and unreasonable punishment be inflicted.
  9. The People retain rights other than those enumerated in the Constitution.
  10. Powers not specifically granted to the Federal Government, nor prohibited by the Constitution to the States, are reserved to the States, or to the People.

Preserving the principles enumerated in the Constitution is part of the oath of office taken by every member of Congress as well as our President and his cabinet members.  Thomas Jefferson best stated how Government should be controlled when he said, “In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

The Founders provided “We the People” with the tools to retain and exercise our sovereignty.  If only we take the time to understand what these tools are and how to use them can we remain a free people.  Elect only those candidates that understand the Constitution and will stand up in our stead to demand Government abide by the principles they have sworn to uphold,

The Spinmeisters

by Richard H. Frank

Politics in the United States today has become the province for the “30-second news sound bite.”  Television debates within a 3-minute segment, between commercials, on the nightly news, have become irrational arguments between opposing viewpoints.  This is how the media attempts to influence the majority of Americans by gathering the alleged “facts” upon which they are supposed to create an informed decision.

The political pundits, whether liberal or conservative, Republican, Democrat or Independent, all suffer from the same disease.  The symptoms of “spin doctoring” are as follows:

  • They will never admit a mistake or that their position might be wrong.
  • They cannot bring themselves to answer any question that they may be asked.  They always precede their response with a laundry list of talking points in favor of some policy agenda item.
  • They are masters at extemporaneously creating evidence, real or imagine,  to justify their position.
  • They ignore the opinions of the electorate if they run contrary to their position.
  • Political ideology takes precedence over anything else, including the truth.
  • They can masterfully manipulate the language contained in our Constitution to meet their purpose or defend their position.

Unfortunately, “We the People” have become lazy.  It is often easier to accept what we hear from the media or read in newspaper editorials than to take a few minutes each day to seek the truth.  Should each of us spend 30 minutes each day between now and November, 2010, we could devote 120 hours to educating ourselves on the issues that will either sustain or destroy our magnificent Republic. Gee, I know this would require giving up precious time texting our friends, or tweeting, or heaven forbid, putting down the remote control for the television.

The internet is the greatest depository for information addressing the pros and cons of any issue created since mankind first wrote down its opinions to share with others.  We must take the time to educate ourselves and make informed decisions about policy, legislation and the candidates we will support to be our Congressional representatives in the future.

All the talking heads on television and political pundits we listen to are just spinmeisters who will use whatever means is required to gain your support.  Let us pledge to ourselves that we will take the time to independently make up our minds on what the course of “human events” will be for our nation.

The New General Motors – Obama’s Financial Black Hole

by Richard H. Frank

American taxpayers have spent between $50 and $80 billion for the expedited bankruptcy and restructuring of General Motors.  Quarterly reports since GM (Government Motors) show losses at $1.3 billion and $9.6 billion respectively.   Forecasts show the restructured company will be out of money in April, 2010 and again in July.  The last three months of 2009 the company burned through $6.2 billion taxpayer dollars.

So what are the differences between the 1979 Chrysler Loan Guarantee Act and the 2009 Obama General Motors Bailout?  Consider the following:

  • In 1979 Chrysler management utilized the loan guarantees as a “bridge loan” that enabled them to use the tools that would have been available under Chapter II bankruptcy to renegotiate contracts, bank loans and to take cost-cutting actions in both the white collar and union work forces.
  • In 2009 government secured majority ownership in the company and rewarded unions with 35% ownership in exchange for yet undisclosed contract concessions.  Creditors, dealers and bond holders all got the shaft.
  • In 1979 the Government stayed out of management’s way and allowed Lee Iacocca to bring in a team of professionals to take charge of product development, supplier sourcing, operations and finance.
  • In 2009 Obama appointed a team of academics, headed by a 30-year old individual having little if any experience to set the course and objectives for the new General Motors.  Since then, we have seen the head of this group depart as well as Obama’s hand-picked Chairman.  Moreover, new product plans emphasize models that Americans do not want to buy.
  • The 1979 Loan Guarantees of $1.2 billion were paid back with interest by 1983.  The plan was in place for product development and operations productivity that would eventually return the corporation to profitability.  By the time Chrysler corporation was acquired by Daimler-Benz, the company had amassed $7 billion in cash.
  • The 2009 new GM plans to sell or close various operations appear to be moving very slowly if at all.  In the interim, we, the American taxpayers will meet the company payroll with no end in sight.

I think it would prove to be very educational for Congress to visit the “Henry Ford Museum” in Dearborn, Michigan and view a display that lists hundreds of automobile manufacturers that could not compete and eventually had to go out of business.  Names such as Packard, Hudson, Kaiser Frazer, Delorean, Dusenberg and on and on are listed.  These great companies passed on and were replaced by those having the product, management and productivity to survive in our free enterprise system.

It does not take a crystal ball or a PhD in Economics to understand that as owners of General Motors we are faced with a high probability of having a second real bankruptcy for the company.  Should we not, it will require us, the taxpaying public, to keep shoveling money in the black hole called General Motors.  Either alternative will be painful but rest assured one or both will happen.

Government must get out of our free enterprise system and allow private sector business principles to dictate winners and losers and not some bureaucrat or politician. If the first two quarters’ results for the new GM are any indication the worst has yet to come.

A Loss of “Trust”- Literally!

By: Richard H. Frank

All Americans, but especially senior citizens, are extremely concerned about the longevity of our Social Security system as we know it today. The questions most often asked by seniors are, “Does a Social Security trust fund actually exist”? and “If it does are our retirement funds really secure”?

The legal answer to the first question is “yes”. Social Security was officially designated as a “Trust Fund” in 1939. However, the law allowed for the Secretary of the Treasury to invest surplus contributions ( defined as receipts less payouts ) in marketable securities. Since 1960 the surplus funds collected were used to purchase “Treasury Securities”, which in effect was the practice of lending Social Security funds to the Federal government to be expended for whatever purpose Congress deemed appropriate. The famous, but mythical, lock box holds bonds payable to the “Trust” at a point when receipts ( your social security taxes) fall short of payments to retirees. In other words the fund has no money, but just a pile of IOU’s issued by the treasury.

By the end of 2008 our Federal government had spent $2.4 trillon of the surplus paid into the trust. Some financial experts have described our social security system as the greatest “Ponzi Scheme” ever created in the history of the world. Bernie Madoff was convicted and sentenced to 120 years in prison for running such a scheme. In comparison to what congress has done, through irresponsible spending, Madoff can best be described as an amateur with his scheme amounting to “small potatoes”. Should the same laws and logic be applied to our Congressional Representatives and the string of Presidents responsible to administer the Social Security Trust they could be considered guilty of “High Crimes and Misdemeanors” and subject to impeachment.

Since this cannot ever happen, nor can we hold any specific politician guilty of conspiracy to commit a crime, or criminal facilitation, we can at least demand truthful accountability on the part of the government. This sounds easy enough, doesn’t it? Well our government has “Cooked the Books” over the past forty-one years whenever it was politically advantageous to do so. They were able to either include , or exclude social security revenues and expenditures from the Federal budget. For example:

  • 1935 – 1968 Social security was off-budget.
  • 1969 – 1985 Social security was on budget.
  • 1986 – 1990 Social security was off budget except for computing the national deficit.
  • 1990 – Onward Social security was off budget for all purposes

Gosh, if only I could use these “Creative Accounting” principles when preparing my personal family budget. Life would be much less stressful. As for the highly touted FY 2000 surplus left by the Clinton administration for the Bush presidency to squander, it never really existed. Once again it materialized using government “Creative Accounting” methods, ie including the surpluses derived from social security receipts. This practice is like taking money from your savings account for deposit into your checking account to be used to pay your bills. It only works so long as your savings account has money left to transfer. When your savings account reaches zero and all your credit cards are maxed-out you are left with only two alternatives.

  1. Stop spending!
  2. Stop spending and declare bankruptcy.

 Average Americans have no magic accounting tricks we can use, and if we were to attempt to print our own money the government would put us in jail. Yet the Washington elites in Congress and the White House continue to treat us as children who can’t understand the complexities of government finance and can not possibly know what is best for us as individuals and the country as a whole.  

No matter how politicians from either political party may attempt to justify our country’s current financial situation, and specifically that of social security, the real problem comes down to 50 years of uncontrolled government spending. Congress has spent our seniors retirement and selfishly passed the obligation to pay for their gluttonous appetite to spend on to our children and grandchildren.

The message that the American people must send to Congress as well as to our present and future administrations is that there is “No such thing as too big to fail”. Repayment of funds from the TARP program must be used to reduce the deficit as mandated in the law. Any stimulus monies not currently appropriated should be used to further reduce the deficit. Future bailouts for Banks, Insurance companies and the Auto Industry must be prohibited and repayment of any loans made with interest. Let our Free Enterprise System work to weed out the weak and strengthen the successful contributors to our economy.

The “Pay Go” sham needs to be exposed for the lie it really is. If a revenue stream cannot be confirmed for any new legislation either through new taxes or spending reductions, that proposed legislation must be defeated. Moreover, should Congress not be able to curb their appetite for spending it may be time for a Constitutional Amendment to demand a balanced Federal Budget as a solution to the problem.

In the interim, proposed legislation such as Healthcare Reform, Cap and Trade, Immigration Reform and all other budget busting programs must be scrapped. Additionally, government bureaucrats and employees are not immune from economic cycles experienced in the private sector. When a downturn occurs government must curtail spending and adjust employment levels accordingly, the same as within the private sector. Policies that extend and grow government during such times only add to the deficit.

“We the People” bear the responsibility along with government for not heeding the signs of approaching economic collapse and demanding our elected representatives respond to these signs in our interests and not that of special groups and above all not for their own personal gains.

No Health Care Mandates or Reconciliation

by Jayne D. Frank

It feels like we keep pounding our heads against a brick wall because no one in Congress is listening to the 65% of Americans that don’t want a massive health care bill and Government intrusion into our lives, but once again it is necessary to remind both Democrats and Republicans in this health care debate, that they work for the People, and the People have spoken!  No massive health care bill, no matter how it is disguised.

As of today, Roll Call reports that Nancy Pelosi is still hell bent on doing a “merged” healthcare bill only through the reconciliation process which requires 51 votes and would shut out debate and participation by the Republicans.  She said that by “educating” the American people  (stupid us!) that the “process” has been used before by both Democrats and Republicans, that it will make reconcilation stink less.  Pelosi is so arrogant that she is completely ignoring the fact that there is a February 25 meeting with President Obama to try and come up with “better ways” to take care of some of the problems with our health care system.  We have written in this blog before, though, that we still feel the February meeting is just a sham and that neither the President or the Democrats have any intention of letting the Republicans present any new ideas which would block passage of a massive Government controlled health care bill; Pelosi’s actions just confirm that point.

I am outraged also that Judd Gregg this morning indicated that he is in favor of mandates to make young Americans and those that are uninsured purchase health care insurance.  Mandates by any other name are still mandates and are unconstitutional. He said he is worried that when young people get sick and go to the doctor or hospital, that those costs are passed along to everyone .  No one disagrees that we should not have to pay for those people, but shouldn’t we start with the extraordinary costs involved in providing healthcare itself, fraud and abuse and tort reform, before talking about mandates.

How about another novel idea?  When my husband was a young man, his mother and father did not have health insurance, but when it was necessary to go to the hospital or doctor, HIS PARENT’S HAD TO PAY.    If this happened just once to a young uninsured person and they knew they would not be off the hook for paying for their care, they WOULD purchase insurance.  It is often a case of laziness and a desire to spend money on other things  with young people; e.g., new electronics, their entertainment and vacations.  Health care is not a right and we cannot continue skirting the issue of personal responsibility in this country.

As far as Nancy Pelosi trying to ram Government-controlled health care down our throats again with reconciliation, PLEASE SPEAK UP fellow Americans.  I know you have been through this for a year and you are tired of saying the same thing over and over, but let your voices be heard loud and clear in Congress that you want honest and fair negotiations on health care fixes that will really work and that you want a full vote in Congress for whatever will come out of the February 25 bill.  Write to your Senators and Representatives, call them, write editorials in your papers, write blogs, and make yourself heard about what you expect Congress to be doing on your behalf.