Category Archives: National Debt

Congress Should Immediately Declare War On ISIS And Adopt A Trillion Dollar Defense and Homeland Security Spending Program

Since President Obama has indicated that he will not go to Congress to request that it declare war on ISIS, Congressmen must begin to act like adults and perform their constitutional function to protect our country. They should as soon as they return for the next Congressional session, declare war against ISIS (which has openly declared war on us). It should be approved by bi-partisan, almost unanimous votes in both the Senate and the House.

Our country is threatened and our president makes light of it. Congress should also assume the task ignored by our president of restoring our declining military superiority and upgrading our homeland security by initially allocating at least a trillion dollars for such purpose. An enormous sum, but at least that amount will be needed to enable our military to fight the necessary war against ISIS and attempt to prevent, defend against or recover from the terrorist attacks that are likely to be planned or carried out on our shores by Islamic terrorists and their followers.

We must reverse the deliberate decline in our military strength orchestrated by President Obama during the first six years of his presidency in order to be able to provide government funding for Obamacare and other rapidly growing welfare entitlements and his politically oriented green projects. We must develop and have available a broad array of new and improved offensive and defensive weaponry to defend against attacks on our citizens and our infrastructure.

We must begin by currently repairing and upgrading and taking further steps to protect and provide redundancy and back-up for all aspects of our infrastructure (including our transportation infrastructure, water supply, power grid and the Internet) and added protection for all of our strategic places. Our cities and states with CIA and FBI assistance have since 9/11/2001 upgraded their anti-terrorist preparedness. We have placed reinforced cement or steel pillars around many of our strategic places to prevent an attack. However, the Boston Marathon bombings and other acts of Islamic sponsored terrorism demonstrate how difficult the task is. As was also true for the 9/11/2001 attacks, we always seem to miss the available clues that could have led to the prevention of the terrorist acts.

We need enhanced federal financial assistance to the cities and states and a USID card with constantly updated electronic linkage to the CIA, FBi and other security agency databases to assist in identifying potential terrorists and preventing their attacks. I refer you to the book I published in 2003 entitled “Homeland Security and Economic Prosperity” that proposed and described a USID card. We should be strengthening the relationship of the police, our first responders, with the residents they are hired to serve and protect. We should not be stirring up and promoting antagonism, for political purposes, against our local police forces for protecting the property of law-abiding people in their communities from looters.

Some people look at our $17 trillion deficit and ignorantly blame it on the wars in Iraq and Afghanistan. Most people do not understand that increased military spending on those wars generated millions of tax paying jobs and as a result of a multiplier effect, resulted in GDP growth and federal income tax revenues that financed them. The increase in the National Debt is largely attributable to the Great Recession that resulted from wrongful and ridiculously stupid mortgage lending practices, excessive use of leverage by our bankers investing other people’s money, and failed government regulatory actions that promoted the wrongdoing.

President Obama’s naive and inept foreign policy decisions have led to the growth of Islamic terrorist groups throughout the world and encouraged Russian and Chinese aggression. Combined with the opening of our southern border to terrorists and criminals following the illegal invasion, encouraged and welcomed by President Obama, of infants and families from Central America, they have placed our homeland in jeopardy.

The ISIS land and weapon grabs in Iraq and Syria, barbaric acts, and open declaration of war on the US, coupled with Russia’s outrageous takeover of Crimea and other parts of eastern Ukraine, is serving as a wake-up call to an increasing number of Americans. However, even though our homeland is threatened, most Americans still remain oblivious to the dangers we face. They are unaware of the extent to which our military strength and homeland security have been weakened.

President Obama, who got reelected by concealing the truth from voters and spent months acting like “Mr. Cool”, as the crises developed, does not seem prepared to deal with them. When Russia moved into the Ukraine, he chose to ignore our prior commitment to give the Ukraine military assistance if attacked. When we had the chance, why didn’t we bomb the Russian tanks moving inside Ukraine’s border? No risk, no gain. A coward is afraid to take the risk. JFK responded to Russian aggression by blockading the Russian ships during the Cuban missile crisis. President Obama’s only response to the Russian advances in Ukraine was to threaten and then take what have turned out to be ineffective sanctions that are also harming the European and indirectly our economy.

After the sudden rise of ISIS occurred President Obama acknowledged that he had no strategy to deal with ISIS in Syria. We now know that he should have been prepared. He had been briefed for more than a year by our military leadership, the CIA and his cabinet members. Maybe he just didn’t want to acknowledge that almost all of his prior foreign policy decisions during his years as president, including his failure to negotiate an agreement to leave troops in Iraq, were wrong. He is a commander-in-chief of our military who always favors personal political considerations over the taking of appropriate military action to protect our homeland.

This is not the time for political rhetoric and gamesmanship. President Obama constantly tells the enemy what he will not do and often tips his hand on what he will do. Even a child knows that you greatly hinder your chances of winning in a game of war if you tell your strategy to the enemy. ISIS is attracting thousands of followers and getting stronger each day.

Now, after dallying for months, President Obama says he wants coalitions with our allies, including NATO members and Sunni controlled countries, to provide ground combat troops. However, he is not leading by example by offering to include American troops in the force. In what appears to be a domestic political ploy rather than a useful military strategy, he is moving 5000 free Syria Army fighters, who had been fighting against the Assad forces, to Saudi Arabia for 6 months to a year of training.

We know that bombing ISIS in Syria and ultimately obliterating ISIS will require significantly more US troops on the ground. However, our president plays semantic games by insisting that he will not place troops on the ground, meaning combat troops. How can we gain the respect of our enemies or even maintain the strength of our awesome army if we keep reducing its size and we commit in advance not to use it? We should be putting together a force comprised of US combat troops, fighting along-side Kurdish and Free Syria Army combat troops and those from Sunni controlled countries to take the war to ISIS now! As we ready the force we should use our special operations forces to wipe out ISIS command posts and positions and then immediately withdraw. The longer we delay, the more difficult it will be to wipe out ISIS and other Muslim terrorist groups and the more casualties we will ultimately incur.

The situation is complex. Some of our friends have in the past befriended ISIS. Attacking ISIS in Syria may improve the chances of an Assad victory and be interpreted as our favoring Shiites over Sunnis. It happens that ISIS consists of Sunni terrorists who have been funded in the past by the Sunni countries, whose support we now seek. We seek Turkey’s assistance in stopping the growth of ISIS, but Turkey has been helping ISIS and is happy to see the Kurds destroyed by ISIS. Assad is not threatening to attack the US homeland, but defied international law and President Obama by gassing his own people. His principal sponsor, Shiite controlled Iran, is developing a nuclear bomb that it has threatened to use to attack Israel, and is supporting Shiite Islamic terrorist groups, Hezbollah and Hamas. We must not make foolish concessions to Iran to enable it to develop a nuclear bomb that will be a threat to the US as well as Israel and should clarify that we will also take steps to curtail the terrorist acts of Hezbollah and Hamas.

We need imaginative thinking. Might there be an opportunity for President Obama, who wants to be remembered as the man of peace, to immediately attempt (independent of Iran and Russia) to use secret diplomacy to work together with Turkey to broker a cease-fire followed by a peace treaty between Assad and the Free Syria Army and Kurdish forces we support (the “Grand Middle East Peace Treaty”)  The could then join with our air and ground support and other coalition air and ground forces of Sunni dominated countries, including Turkey to eliminate the ISIS peril? Assad, whose future role, if any, in the Syrian government could be discussed, could be granted immunity from war crimes. Syria could become the showcase country where Shiites and Sunnis share power over identifiable parts of the country. Shiites would have control of the federal government, but they would recognize the historical borders of tribal dominated areas and guarantee that local control of such areas be retained by the tribal leaders.

Regardless of the actions we take or fail to take in Syria, we should immediately take steps to strengthen our military and secure our homeland. Our country has faced and immediately responded to previous wake-up calls. In the years that followed the attack on Pearl Harbor on December 7, 1941, we rose to the challenge. Our parents and grandparents were drafted into and enlisted in the military to fight to preserve our freedom. Others worked day and night to develop a superior military capacity that enabled us to defeat our enemies in World War II in less than four years. When the war ended we had developed not only a great military, but also an unparalleled industrial complex that enabled us to escape from the Great Depression and establish American exceptionalism.

How many Americans know this aspect of American history? Not many of us have done anything to earn our freedom. It has been won and defended by heroes of prior generations whose efforts established American military superiority, defeated our enemies, and handed us our freedom as a gift. Now, a majority of voters take it for granted. Millions of Americans never learned in school about the history of military conquests over thousands of years. Most Americans are upset as they learn of the terrible atrocities being perpetrated by Islamic terrorist groups throughout the world, but they think that the current military superiority of the US guarantees that our homeland is secure. They seem to have already forgotten that Al Qaeda recruited, sent to the US, and financed the terrorists who carried out the attacks on 9/11/2001. We had adequate available information to have prevented those attacks. We remain vulnerable to an ever more dangerous variety of attacks against our infrastructure and our population.

The attacks on 9/11/2001 should have been a wake-up call. We stirred for a while and then fought two long wars foolishly aimed at establishing western type democracies in Iraq and Afghanistan. In 2008 we elected a president who promised hope and change. He naively believed that all wars must end, and sought to eliminate the role of the US as the world’s only reliable defender of freedom. He downplayed, even refused to acknowledge, the spread of Islamic terrorism throughout the world. President Obama used the Great Recession, the winding down of the war in Iraq and then sequestration as an excuse to reduce the size and preparedness of our military. The American public, our press and politicians talk about being war-weary. What does that mean? We spent a lot of money and sustained injuries over a long period of time. Yet, our foolish disengagement from Iraq has made us vulnerable to what might be an imminent attack on our homeland. Our president and most Americans do not want “boots on the ground”. That’s gibberish. We have boots on the ground. They mean that they do not want to use our infantry in hand-to-hand combat. Even though we have a volunteer army, they don’t want to bear the costs of war.

They are misled by the president’s repeated talk about the trillions of dollars spent on the wars in Iraq and Afghanistan, Americans do not understand that it was our bankers and not the wars in Iraq and Afghanistan that created the Great Recession. Wars create jobs and prosperity. Ending the war in Iraq was counter-productive to our economic recovery.

President Obama has enlarged the risk of terrorist acts within our homeland by ignoring and thereby allowing the rise of ISIS and by weakening border security to permit large numbers of children from Central America to enter our country for his own political purposes. We must postpone immigration reform and concentrate on the immediate need to control our borders to keep out terrorists, weapons of mass destruction and the diseases that might be brought into our country.

President Obama knew that his policies relating to Iraq, Syria and Afghanistan would ultimately lead to disaster, but obviously felt the problem would not deteriorate until after the end of the term of his presidency. He therefore misled voters about our military problems and concentrated his efforts on domestic issues. A majority of Americans care principally about the US economy and jobs and their own favorite social issues. President Obama and members of his administration wrongfully use their governmental authority to silence their opposition and to sensationalize racial and immigration issues to gain political advantage.

His obvious aim is to create a single party system that a majority of voters rely upon for financial support. He doesn’t seem to care about the detrimental effect of Obamacare on the middle class who are paying excessive premiums and deductibles to finance the subsidized benefits for the poor and the sick. Nor does he seem to care about the negative impact on healthcare providers who are receiving reduced fees for services. He and his administration have lied repeatedly and withheld information to prevent voters from discovering the truth about Obamacare. He wants employers to convert full time 40 hour per week jobs into less that 30 hour per week jobs and stop paying for healthcare, when the employer mandate becomes effective. The low-income employees will be forced to seek and become dependent upon Medicaid and subsidized Obamacare policies.

It is probably not be too late to stop the spread of terrorism overseas. We must mobilize the effort. If we spend to significantly upgrade our military capability to deal with the growing terrorist threats we will at the same time create millions of full-time tax-paying jobs and stimulate the mediocre and disappointing economic recovery from the Great Recession. The trillion dollars we spend will generate the greatest prosperity in our history. We need a spokesman to step forward and lead the effort. We should coordinate such spending with our European allies who should also be convinced to spend to grow their military capability and ward of terrorist and Russian threats to their and their neighbors’ security. We might lead by example by offering to purchase the French aircraft carrier being built for sale to Russia.

We should immediately take steps to make our oil and natural gas available for export to Europe to break our allies dependence on Russian sources. It is commonly believed that even if we change our export laws, we will be unable to deliver significant amounts of oil and natural gas to Europe for years. That’s nonsense. Let’s change the laws and find out how fast we can supply energy for Europe by using American ingenuity and capability. I think we will be pleasantly surprised.

President Obama has recently shown signs of awakening by authorizing limited bombing of ISIS forces. It’s time for him to take the reins and act like a commander-in chief. However, he appears to be doing just enough to try to hold on to control of the Senate this November and to pass the risks of terrorist attacks to the next president. History will frown on his presidency if he fails to prevent serious acts of terrorism by Islamic terrorists and their supporters within our homeland.

I note that although I refer in this article to the Muslim terrorist group as ISIS, our president for some inane political reason, before the be-headings and other atrocities committed by ISIS in Syria and Iraq and his decision to bomb ISIS elected to call the group, and continues to call it, ISIL to avoid referring to Syria in its name.

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Annual US GDP Growth Of Ten Percent Should Be The Goal

Annual US GDP growth of ten percent should be the goal. Not the communist goal of eliminating income inequality that President Obama keeps talking about that has never succeeded.  Ironically, the failed socialistic economic policies of the Obama administration have created an immediate opportunity for much larger annual increases in the US GDP. Years of stagnant US economic growth, despite exceptional technology advances, have resulted in a highly under-utilized  and underpaid workforce. We should be seeking the preservation of American exceptionalism by encouraging competence and hard work, not laziness or poor conduct. We should be rewarding success, not encouraging failure. We can only imagine the growth that can be generated by bringing large numbers of people back into the workforce and converting part-time jobs to full-time jobs. Each time a job is lost due to improved technology or a job is lost because production moves offshore, we have an available worker for a new job which can accelerate our growth.

We have had five years of a tepid economic recovery during the period following the Great Recession, the most severe downturn since the end of World War II. President Obama has been very lucky. The recovery has taken place despite the failed fiscal stimulus programs adopted during his administration, his raising income taxes, cutting defense spending, adopting incompetently drafted banking and business regulations that are in large part counterproductive and excessively costly to comply with, and adopting Obamacare and its 18 new taxes and thousands of pages of regulations and then changing them at his whim for political purposes. The recovery has taken place because of developments that President Obama had little, if anything, to do with. TARP loans, which originated during the Bush administration, followed by the Fed’s monetary programs were instrumental in enabling the banking system and the auto and housing industries to avoid collapse, stabilize and return to profitability.

Spectacular developments have spurred the economic recovery, including: 

* Improved horizontal drilling and fracking techniques which, despite the unsubstantiated concerns of environmentalists and interference from the Obama administration, represent the single most important economic development of this century. They have (i) caused an explosion in US national gas and oil production, (ii) created an annual demand for tens of thousands of miles of stainless steel pipe for use in connection with the drilling and transportation of such oil and gas production, (iii) created a growing demand for rail transportation to move the pipe to states such as North Dakota and Texas and the oil and gas being produced to refiners and users across the nation, (iv) created  high-paying jobs leading to increased income tax revenues and a demand for cars and trucks for use by the oil and gas industry and its employees, (v) engendered the rapid growth of new communities to house and service the production employees, (vi) led to the return to the US of industries producing plastics and other natural gas by-products, and (vii) made the US energy independent and strengthened our position as the world leading military power; 

* Rapid expansion of our international businesses throughout the world and increased sales of our exports of products and services, including food, aircraft, machinery, equipment and raw materials to the BRIC and other developing countries;

* The spawning and rapid growth of sales of wireless communications devices, the Internet and social-networking businesses; 

* The wealth effect from rising stock market prices based on increased corporate profitability stimulated by the Fed’s bond purchases and promotion of low-interest rates that enabled corporations to reduce financing costs and inexpensively finance the purchase of cost saving technology. and 

*The exceptionally large sums (financed in large part by federal and state government funding and private insurance) spent for clean-up and rebuilding of roads, infrastructure, housing, and commercial real estate and vehicle replacement following  the many natural disasters that have occurred during the period. 

Even the modest recovery in the housing market (and the related housing improvement and rehabilitation market) caused in large part by investors buying up foreclosed properties for resale and rental and rising number of international millionaires seeking to own US-based assets, has contributed to the recovery. However, private home ownership that was the most important asset owned by the middle class for more than 50 years prior to the Great Recession, has been put on the back burner by the Obama administration which favors the poor at the expense of the middle class. Housing construction offers the potential to be a leading force if future US economic growth. 

President Obama claims credit for the recovery, but he had little to do with it. The manner in which he saved the auto industry was disgraceful. He favored his friends, the unions, over secured creditors. He hampered the oil and gas industry by impeding fracking, the leasing of federal lands and pipeline development. The Obama stimulus programs concentrated on increased welfare payments and ill-conceived, failed green energy programs that squandered large amounts that greatly expanded the National Debt, but generated almost no tax-paying jobs. The Fed has repeatedly stated that it has extended QE programs because of failed fiscal policies.

I will not in this writing discuss the harm to the US economy being caused by the adoption of Obamcare. I have and will continue to write about (i) the continuous stream of outrageous, lies and misinformation promoted almost daily by President Obama relating to Obamacare’s costs and benefits, (ii) President Obama’s failure to deal with Medicare spending problems,(iii) how Obamacare is gouging and damaging the lives of the middle class by requiring them to pay for free or highly subsidized healthcare for the sick and the poor and low-income folks and for a significant portion of the healthcare costs of the elderly and (iv) the inevitable economic disaster that awaits the middle class and the US economy when the employer mandate (that has been illegally delayed by President Obama for political purposes) is allowed to become effective. Suffice it to say that if and when the egregious provisions of Obamacare are repealed it will serve as an immediate stimulus to the US economy. 

Can we envision a time soon after President Obama is out of office (i)  when Congress regains control of spending and middle class income growth and not growth in welfare and ending income inequality is the goal, (ii) when Obamacare is no longer interfering with economic growth or destroying the healthcare industry, (iii) when our transportation infrastructure is being adequately repaired and improved, (iv) when employers are investing in expansion, offering raises to current employees and seeking employees for full-time, tax-paying jobs; (v) when young middle class families can pay off their college loans and buy and make improvements in homes which develop growing equity; (vi) when defense spending and homeland security spending is increased to levels needed to protect our country and our allies from aggression and terrorist acts (vii) when the National Debt is stable or declining, (viii) when Medicare costs and welfare abuses are brought under control;(ix) when the Fed permits interest rates to rise during a period with 2 to 3% inflation and (x) when savers can get a fair return on their capital? 

It can happen if we turn away from the path to socialism and focus on GDP growth and strengthening American capitalism.

 

However, the growth will not occur if Republican conservatives insist on policies of austerity or if a needed catalyst fails to occur to get the growth avalanche started. Our international corporations have more than 2 trillion dollars held overseas that can be repatriated if we change the tax laws. Previous changes led to repatriation of overseas funds, but did not result in significantly increased domestic investment. This writer published a book last year (that has not attracted attention) entitled “Perpetuating American Greatness After The Fiscal Cliff” which proposed changes in the US tax laws to finance transportation infrastructure construction projects through the sale of “Jump Start America Bonds”. The name of the bonds tells the story of their purpose. They would serve as the needed catalyst.

The Case For Extending Unemployment Benefits Beyond 26 Weeks

Unemployment insurance was designed to provide a safety net by offering weekly benefits to employees who have lost their job  to enable them to modify their job skills and seek alternative employment. It is funded by payments by employers based on a percentage of payroll that is rated based on experience. During the emergency caused by the Great Recession the maximum period of eligibility to receive unemployment benefits was extended from 26 weeks to 99 weeks. The funding for such extended benefits is provided by the federal government and as a result of repeated extensions threatens to become another welfare benefit.

The extended benefits were sun-setted and expired as the end of 2013 as part of the sequester legislation. Naturally, President Obama and other liberals, who sense an opportunity to distract from the failures of Obamacare and an opportunity to buy votes, are loudly demanding that the extended benefits be reinstated. Most Republicans, who were blamed for the government shutdown, do not want to be hammered by President Obama and the liberal press for any failure to reinstate the extended benefits. However, most of them favor austerity and are looking for ways to cut the explosive growth in welfare benefits. They know that the American public is concerned with the size of the deficit and are insisting on an offsetting cut in government spending to fund the extended unemployment benefits. Do not be surprised in President Obama refuses to discuss any compromise and attempts to play the blame game for political reasons just as he did to encourage and maximize the harm from the government shutdown. 

Instead of allowing President Obama to treat the extension of benefits as a political football, Republicans should be talking about the pros and cons of extending unemployment benefits. They should argue that because of President Obama’s encouragement of welfare and failed stimulus plans, 75% of the jobs created during the recovery are part-time jobs and there are millions of people seeking jobs, a number that is far in excess of full-time, tax-paying job openings. They should acknowledge that unless we greatly expand our economy, the real level of unemployment (after adjusting for people who have given up looking for a job) may remain above historic levels for the indefinite future.

The sudden end to the program, that has previously been extended, will cause immediate hardship to many of the beneficiaries. On the other hand, every case is different. Many of the beneficiaries may have been satisfied with the benefit and were turning down less than desired employment opportunities. Others may have been cheating the system because they have left the labor market and stopped looking for work or may have accepted off-the-books employment or are earning unreported income. We should extend the term of unemployment benefits, but we should modify the unemployment laws so that extended benefits are phased out over time. We might consider gradually reducing benefits to zero over a defined period beginning after 26 weeks. This will eliminate the need for further extensions except in the event of another emergency 

There is validity to arguments that unemployment benefits provide a stimulus that supports the economic recovery. On the other hand the unemployment benefits are not the most desirable form of economic stimulus. They increase the deficit because they are spent in large part on necessities like food and clothing that increase the GDP, but do not create or sustain tax-paying jobs that generate significant tax revenues. Spending on transportation ifrastructure construction is a better way to stimulate the economy because it creates immediate tax-paying jobs and stimulates the creation of additional tax-paying jobs.

The most important reason for extending unemployment benefits is to prevent immediate hardship for those who have diligently sought employment and did not want to be forced to accept a part-time or dead-end job. However, no-one should be entitled to half-pay forever, without working. 

 

OBAMACARE IS A WELFARE PROGRAM THAT IS REDUCING THE QUALITY AND AVAILABILIITY OF HEALTHCARE AND HARMING BUSINESS AND THE MIDDLE-CLASS

Obamacare is a multi-trillion dollar welfare program that makes health insurance available to 30 million previously uninsured Americans. It requires insurance companies to disregard pre-existing conditions. The inevitable affect is to raise the rates of required Obamacare policies. Most importantly, it makes Medicaid available for free to the poor and offers large premium subsidies to lower income individuals. It also offers other benefits to selected individuals, such as, allowing students to stay on their parents healthcare plan until age 26 and elimination of the doughnut hole in Medicare drug plans.

Why do Americans not like Obamacare if it helps so many people? Americans are discovering what the draftsmen of Obamacare knew, or should have known, that businesses, middle-class and healthy individuals are going to have to pay, directly or indirectly, for a substantial portion of the increased costs mandated by Obamacare. They will not be paying for improved insurance coverage for themselves, but to provide free coverage for the poor and reduced or subsidized premium costs for people with pre-existing conditions and low income individuals. Obamacare is designed to advance liberal Democrats acknowledged goal of improving the lot of the poor by taking money from the rich individuals and businesses who they think have more income than they need. To make matters worse it is destroying the availability and quality of healthcare and is giving too much responsibility to bureaucrats at the IRS.

Liberal Democrats do not seem to care that it will cost hundreds of billions of dollars a year to make such insurance benefits available. They fraudulently claimed, that when Obamacare was adopted and became effective it would enable everyone with insurance to keep their policy and receive the same benefits from the same doctors and healthcare providers, at reduced costs. We are only beginning to recognize how fraudulent those claims were. The draftsmen hid the true cost of purchasing healthcare under Obamacare by including large deductibles and co-pays that significantly raise aggregate healthcare costs. The availability and quality of care are declining. Doctors are leaving the profession and hospitals are reducing staffs. Medicare benefits are being reduced. President Obama repeated the false claims about Obamacare during the re-election campaign and now unashamedly claims that voters supported his views on Obamacare. The Obamacare discussion during the 2012 campaign focused on women’s rights issues, not the disastrous financial consequences of Obamacare.

Democrats, who rammed through the passage of Obamacare withhout a single Republican vote, knew that because our country was in the midst of the Great Recession, the federal and state governments couldn’t afford to pay for a new gigantic welfare program. They therefore devised an extremely complicated plan relying on a hodge-podge of new taxes and rules and regulations applicable to Medicare, Medicaid and health insurance to provide for funding the costs of Obamacare and to limit benefits and payments to providers. They gave it the misleading name of “The Affordable Care Act”. They didn’t care, or negligently failed to realize, the secondary affects of the new taxes including the negative impact they would have on young people looking for jobs and the middle-class who are losing good full-time, tax-paying jobs and existing insurance coverage.

Businesses seek to maximize profits. They have for years been seeking ways to limit increases in employee healthcare expenses. Outrageous Obamacare requirements encourage businesses to rethink their providing of healthcare benefits for employees. They are modifying business plans in ways to minimize or eliminate their health insurance costs. Some employers will save money by requiring their employees to purchase their own insurance from the state exchanges. Some will pay penalties to avoid paying for expensive Obamacare policies. Aggregate payrolls are being controlled by not hiring or laying off full-time employees and hiring additional part-time employees. Retired employees and spouses are losing healthcare coverage.

Obamacare is based on tens of thousands of pages of laws and regulations which are extremely difficult to understand and interpret. It requires the filling out of forms that make the practice of medicine and the delivery of healthcare more stressful and less profitable. Liberal Democrats who proposed Obamacare deliberately ignored pleas of doctors about the outrageous cost of purchasing malpractice insurance because of out of control claims and excessive jury awards. Why would we expect them to do otherwise? Tort lawyers are major contributors to Democrats. Obamacare was promoted to gain votes for Democrats. It is turning into a train wreck which may cost them votes.

The draftsmen of Obamacare tried to hide the cost of giving the new benefits by adopting a variety of new taxes on the middle-class and the rich and requiring businesses and individuals to purchase insurance. They knew that taxes on medical products and drugs, not only drive business off-shore and reduce research and development efforts to produce new products, but also, are inevitably passed on to the consumer. They knew that, if they told the truth about Obamacare, young people, middle-class workers and their employers would object to paying larger insurance premiums or penalties to pay for the new welfare benefit for the poor and those with pre-existing conditions. That is the reason they adopted penalties for businesses and individuals if they failed to buy insurance. They did not anticipate many of the adverse consequences that have surfaced as businesses and individuals have learned about the requirements of Obamacare. Now they are trying to get people to purchase Obamacare policies by claiming it is the patriotic thing to do to help your fellow Americans. Why should young people, strapped with student loans or working in part-time jobs as a result of Obamacare, do so?

DEMOCRATS WANT A SHORT GOVERNMENT SHUTDOWN

A federal government shutdown for a few days will do little damage to the US economy, but will inconvenience and scare many Americans. Democrants  want the shutdown to enhance their chances of gaining control of the House in the 2014 elections. They are goading Republicans into a fight over the funding of Obamacare to give President Obama the opportunity to claim Republicans have forced a shutdown. Polls show that any shutdown will cause great political harm to Republicans who are being wrongfully attacked by President Obama as extortionists. 

Regardless of whether it was adopted based on false promises, Obamacare is the law of the land. Like it or not, many of its provisions will become operative on October 1, with, or without, US government funding.  It is irrelevant that Obamacare is a new welfare program that is causing great damage to our economy. The poor and low-income people it is designed to help  will line up to enroll for the free or highly subsidized insurance policies, with no pre-existing conditions. President Obama has committed to spend billions of marketing dollars to convince Americans that they will love Obamacare in a few years after we make some corrections and to get young people to purchase policies.

Republicans, led by Senators Cruz and Lee, are publicizing many of the negative aspects of Obamacare. They should continue to make their case before the Senate over the next few days.  However, it is inevitable that the Senate bill will be passed without the provision to de-fund Obamacare. When it returns to the House, Republicans should permit the Democrats to prevail. The best that Republicans can accomplish is to get an agreement for the appointment of a joint Congressional committee to consider the modification or repeal of Obamacare. Any attempt to de-fund or delay the effectiveness of Obamacare merely runs time off  the clock before the potential government shutdown.  Republicans will have an opportunity to expose the terrible consequences of Obamacare, including the harm to the middle-class, in the 2014 Congressional campaigns.

Obamacare, even if further modified, will remain a horrible law and hodge-podge of regulations rammed through Congress, without a Republican vote, during the Great Recession. It changes Medicare, Medicaid and almost every aspect of healthcare. It mandates federally approved insurance to be purchased by or for everyone. The poor and low-income taxpayers get free or highly subsidized coverage. To expand the class of beneficiaries, they threw in benefits for children living at home until age 26 and eliminated the doughnut hole from the Medicare drug plan. Our federal and state governments couldn’t afford to pay for it. They, therefore, adopted all kinds of new taxes and penalties on businesses and individuals to pay for their new welfare program.  Our economy, businesses and the middle-class are suffering from the confusion and increased costs. Obamacare is slowing hiring and capital investment and Is is leading to an increase in undesirable part-time  jobs, while causing the loss of full-time, tax-paying jobs.  It is increasing insurance premiums and causing the loss of coverage for many who had insurance. It is harming doctors, hospitals and other healthcare providers and reducing the availability and quality of healthcare. It taxes the gross sales of medical equipment suppliers and drug companies. Such taxes
(unless passed on as increased healthcare costs that will add to the burden being placed on the middle-class) will confiscate the cash needed to support research and development efforts that have placed the US in the forefront of life saving and enhancing equipment and medications. Some of the manufacturers will become unprofitable or will be unable to raise capital, and go out of business. It puts the IRS in control of major healthcare decisions.  Based on recent experience this assures that healthcare subsidies and availability will become politicized and allocated unfairly.  It is so complex that years after its adoption our governments are not prepared for it to become effective.

Why does President Obama like it? It gives the government greater control of our lives and  takes from businesses and individuals who have and gives to those who have not. It adds to his base of people who benefit from handouts. It is unlikely that President Obama and his liberal cronies realized, when it was adopted, how much damage it would do to the economy and the middle-class. As the problems have surfaced, he has made changes in the law and granted waivers without Congressional approval. He talks of further adjustments in the law to work out the kinks. He may not have yet realized that  Obamacare is so conceptually flawed that it is irreparable and should be repealed so that we can go back to a free market solution. Of course that would require taking away or reducing the new welfare benefit. Why should the poor expect to get the same or better healthcare benefits for free than will be available for middle-class people who work to earn the insurance or who may lose their benefits or have to pay for them? Why should we harm business and eliminate or prevent the creation of middle-class jobs, to create another welfare benefit, while the economy remains in a weakened state?

With all the hull-a ballo over Obamacare and the  potential government shutdown, it has gone virtually un-noticed that the disastrous Sequester cuts are retained in the proposed government funding proposal. President Obama and the liberal financial press have been effective in misleading  voters into thinking that the economy is improving  because unemployment is falling and the federal deficit is shrinking. They disregard the large number of people who have left the work-force, the great increase in the number of part-time jobs (largely as the result of Obamacare),  the reduced government spending as a result of the Sequester and the increased revenues from the 2013 tax increases. As a result, and because he refuses to discuss un-funded long-term entitlement (largely Medicare) liabilities, he is in no position to be insisting on necessary increases in defense and infrastructure construction spending to stimulate the economy, provide homeland security  and create full-time, tax-paying jobs. The Obamacare mess makes it highly unlikely that our economy will grow satisfactorily during the remainder of the Obama term. 

Jump Start America Bonds Represent the Perfect Economic Stimulus

My book, “Perpetuating American Greatness After The Fiscal Cliff”, proposes changes in the federal corporate income tax laws that will encourage our international corporations to STEP UP and invest, risk free, a portion of the $2 trillion parked overseas, in state transportation infrastructure construction projects. They will do so by purchasing a new type of tax-exempt bonds offered by our states that will be called Jump Start America Bonds. The sale of such bonds to finance shovel ready state transportation infrastructure construction projects will generate the perfect economic stimulus. Hundreds of thousands of good tax-paying jobs will be created.

Corporations investing in Jump Start America Bonds will be able to repatriate to the US billions of dollars of cash, held offshore for tax reasons, at highly discounted tax rates, and without risk of loss. If they prefer they can treat the investment in Jump Start America Bonds as having been made and remaining offshore and only pay a repatriation tax on the interest received. Five years after issuance the transferable bonds may be repatriated at the discounted tax rates and used at face value plus accrued interest to pay any federal corporate income taxes.

Corporations will alternatively be able to STEP UP and promote the economic stimulus by floating their own bond issues domestically at the currently low rates and investing the proceeds in Jump Start America Bonds. Corporations will profit from the interest rate spread and will be able to use the proceeds from the Jump Start America Bonds to repay their bonds when the principal becomes due.

Wealthy individuals will also be able to STEP UP and purchase Jump Start America Bonds without risk of loss because the bonds will be usable at face value plus accrued interest to pay federal estate taxes (like previously issued “Flower Bonds”).

 A corporation providing the major portion of the funding of a bridge or tunnel might acquire naming rights during the term of the Jump Start America Bonds that finance a project.

The federal government will see a surge in tax revenues from the taxes which will be paid, even at reduced rates, from the repatriation of offshore profits, and from the income taxes payable by the contractors building the construction projects and their employees. Welfare and unemployment benefits will decline. The federal deficit and the rate of growth of the National Debt will be reduced.

The multiplier effect will create tens of thousands of additional jobs and generate billions of additional federal and state income tax revenues. The housing and auto industries will benefit from the creation of middle class jobs.

The US government’s accepting Jump Start America Bonds, if they are tendered in payment of corporate or estate taxes, will act much like QE. The Jump Start America Bonds will ultimately be converted into cash as interest payments are made and when they mature.

The tax law changes recently proposed by President Obama as part of his “grand bargain” are merely a slightly different form of tax and spend legislation he has previously proposed. He would reduce corporate tax rates, but increase net tax revenues by eliminating deductions and adding a tax to confiscate a portion of the $2 trillion held overseas by US corporations to legally avoid the unfair tax upon repatriation. The “grand bargain” is dead on arrival.

By way of contrast, changing the US corporate tax laws to enable the sale of Jump Start America Bonds will encourage our rich corporations to finance transportation infrastructure construction of the type which President Obama has suggested. We would expect that our corporations would choose to invest in projects likely to generate the revenues to fund the carrying costs of the Jump Start America Bonds. On the other hand we would expect President Obama to spend, as he previously did with DOT funds, on projects in states where Democratic candidates would benefit in the upcoming 2014 elections.

We Must Repeal Obamacare Because It Is Destroying The Middle Class

Obamacare is an extremely complex, highly flawed, law that was designed by President Obama’s appointees and Democratic liberals. They claimed that by controlling costs, taxing the rich and healthcare product suppliers, and forcing everyone to have coverage, we could afford to offer healthcare insurance to everyone, including 30 million people previously uninsured, and despite eliminating consideration of pre-existing conditions, without increasing premiums. They knew that middle class Americans would object to Obamacare if they were forced to pay to subsidize the poor or those with pre-existing conditions. They concocted a scenario designed to mislead the public into thinking that everyone would be better off after the passage of Obamacare.

Obamacare was passed based on promises, all of which are proving to be untrue, that included:

* It would be revenue positive for federal and state governments;
* If you liked your insurance policy you could keep it;
* The cost of your insurance would not be increased; and
* If you were on Medicare you could keep your relationship with your own doctor and continue to receive the medical care which your doctor recommended.

Providing coverage for everyone including those with pre-existing conditions sounded like a good idea to most people. The poor liked it because they were not going to have to pay for the insurance coverage that would supplement their Medicaid and hospital emergency room benefits they were already getting without having to pay. Most working people with tax-paying jobs believed President Obama when he promised them it wasn’t going to cost them anything. Hospitals liked it because they would be paid by the insurance companies for the emergency room treatment of the poor instead of having to pass on emergency room losses to others. The most likely reason that unions supported Obamacare is they didn’t understand the consequences and support almost everything the Democrats and President Obama propose. They have recently awakened and voiced objections to Obamacare.

How could they have expected Obamacare to be revenue positive without increasing everyone’s insurance policy cost, if they were generously going to provide healthcare insurance coverage to 30 million additional people and ignore pre-existing conditions? The true insurance cost of providing healthcare to individuals under age 65 with pre-existing conditions varies in each case, but can be 50 or 100 times more expensive than providing coverage for people without pre-existing conditions.

Democrats and President Obama claimed it would be cost positive by (i) adopting new sales taxes to be paid by medical equipment manufacturers and drug companies (ii) adding a new tax (which unfairly taxed families) of up to 3.8% of income on taxpayers President Obama called rich, but who were really middle class and above in most large cities, (iii) requiring businesses with 50 or more full-time employees (those working more than 30 hours per week) to provide qualifying insurance, (iv) requiring everyone, who does not otherwise have insurance, to purchase insurance, including young people, who will be required to pay an excessive price for their age, or pay a penalty, and (v) reducing Medicare benefits by $700 billion (which Democrats defended by claiming it was a Republican idea).

Moreover, in an outrageously fraudulent attempt to make Obamacare appear to be cost-effective, they included a provision offering long-term care insurance that they claimed would be highly profitable in the first ten years. In doing so they were ignoring a standard insurance business requirement that they establish reserves from the premiums collected for the very large claims expected in later years as some of the insured became incapacitated. After the fraudulent claim of the long-term care profitability was exposed, the long-term care provisions were repealed, before any policies were sold, but after Obamacare was passed. The ten-year cost of Obamacare has since been recalculated numerous times by the Congressional Budget Office and has gone from a profit to a loss that will exceed $2 trillion.

Even that amount may prove to be much too low. Taxpayers have begun to realize they were being misled and they or their employer will have to pay much more for their insurance coverage in most states to subsidize the poor and those with pre-existing conditions.

One group after another has been requesting relief from the onerous provisions of Obamacare. As was predictable, requiring employers with 50 or more full-time employees to provide insurance coverage is causing disastrous consequences. Some employers will be forced to close their doors. Other employers are laying off full-time employees and hiring part-time employees to avoid Obamacare. The middle class which has been decimated by the Great Recession are losing good tax-paying jobs with healthcare benefits as employers seek to avoid the cost of providing the healthcare coverage required by Obamacare. President Obama recently, without fanfare, on a Friday afternoon, postponed the effective date of the employer mandate until 2015 so as not to effect his attempts to get control of the House of Representatives at the mid-term elections. It is questionable as to whether he had the legal right to change a law passed by Congress. If successful in getting control of the House, he will probably repeal the employer mandate and leave Obamacare with a large revenue shortfall.

Although the business insurance mandate has been postponed for a year until January 2015, businessmen will continue to plan ahead. Millions of individuals forced to accept 30 hours per week jobs will become eligible for welfare benefits.

Obamacare has stirred the pot. Businesses faced with rising insurance costs have studied the law and will weigh their options. Some, particularly those whose employees will qualify for substantial premium subsidies if they purchase their own insurance, will prefer to offer their employees a raise and pay a $2000 per employee penalty. Other businesses, that currently provide healthcare coverage, will be able to eliminate healthcare benefits for part-time employees since most of them will qualify for 100% or substantial subsidies if they purchase their own insurance.

Unless the employer mandate is modified or repealed many businesses will keep their head-count of full-time employees below 50 to avoid the purchase of insurance or paying the penalty. Such actions, coupled with young people electing to pay the small penalty rather than overpay for insurance they don’t need, is going to cause revenues to be received by insurance companies to cover low risk beneficiaries to be much less than anticipated. The penalties are payable to the US Treasury and not the insurance companies. They will be left with a higher risk group that purchases insurance and will have to raise their rates.

Although attempts are being made (including the planned spending of hundreds of millions of dollars) to trick healthy young people to overpay for insurance, it does not make economic sense for them to do so. To reduce the cost of purchasing insurance there are little known co-pays and deductibles if you buy insurance. For example. CA’s insurance exchange silver-level coverage requires a $45 co-payment for each office visit, $250 co-payment for each emergency room visit, and has a $2000 annual deductible. The cheapest plan has a $5000 deductible. Those who receive highly or fully subsidized policies will go to the emergency rooms, as in the past, and claim they are unable to pay the co-pay or deductible.

Many young people, who have jobs, will pay the small penalty (which will increase over a three-year period, but probably not enough to change one’s decision) and get by without coverage. The can buy the insurance when they need it without fear of a pre-existing condition. Many of these young people are saddled with college loans and unable to get good jobs. President Obama is travelling the country trying to convince them that if Obamacare succeeds they will be better off in the long run. His problem is that he is promoting a law which contains unfair and unsound financial provisions. He will try to convince young people that they will be violating the law if they fail to purchase insurance, but the pre-determined penalty makes it look more like an option.

Even the formulas for determining the portion of one’s premium that will be subsidized are carelessly drafted and highly flawed. Like all Obama tax proposals, the subsidies are calculated in a manner which is extremely unfair to families and the middle class. A married couple may pay thousands of dollars more for insurance than if they were unmarried and living together. Obamacare provides reduced subsidies as individual or family income rises. As expected, the poor get a free ride. The subsidies phase out at family income levels around $90,000. The middle class must bear the brunt of the increased premiums of Obamacare insurance so that the poor and those with pre-existing conditions can be subsidized. One commentator points out that, in calculating the subsidy under one exchange’s formula, there is even a point in the subsidy formula, where, if your family income goes up by $1000, your annual insurance cost goes up by more than $8000. You have to refuse a raise or a bonus or your net take home pay will decline.

We cannot be certain of the extent that Obamacare has contributed to President Obama’s failed fiscal policies which have encouraged the Fed to extend QE. Obamacare by inducing the reduced hiring of full-time employees and the hiring of more part-time employees is creating an illusion of job creation. Despite the increase in part-time jobs and reduced participation rate during recent quarters, the top line rate of unemployment has remained around 7.5%. U6, a better measure of unemployment, paints a much worse picture, showing a 14% level of unemployment. We have more than 2 million less full-time jobs than in 2008. Not enough middle class jobs are being created. Nevertheless, we hear repeatedly from the financial press and Obama supporters of the jobs created by the Obama stimulus programs (which created few good jobs, if any) and the reduced rate of unemployment. They cheer the reduced top-line unemployment number each month. There is nothing to cheer about. Full-time employment has stagnated. The middle class is suffering.

Before Obamacare, most large businesses provided health insurance coverage for their employees. If the cost of insurance coverage increases as a result of the requirement that pre-existing conditions be ignored, or if the economy stagnates and profits decline, expect some businesses to begin to eliminate health insurance coverage and to pay the Obamacare penalty. Employees might be given a raise to cover their individual purchase of insurance, but the after tax benefit of such raise may cover only a fraction of the cost of purchasing an individual or family policy. Of course since pre-existing conditions will not pose a risk, the employees may elect to go without coverage and pay the individual penalty. As a result the poor, who had no coverage before Obamacare will have coverage, and many working people, who had coverage, will wind up paying a penalty and having no coverage.

Some of them will purchase annual healthcare plans, with limited coverage, being put forth by groups of physicians. This will give them access to a family doctor who can advise them and treat most of their problems. If a family member develops a serious illness, that is not covered by the plan, they can then purchase a policy which qualifies under Obamacare.

The excess of middle class workers take home pay over that of welfare recipients who work part-time and collect negative income taxes was being reduced prior to the adoption of Obamacare. Since President Obama was elected there has been an unprecedented increase in the number of Americans receiving food stamps and other types of welfare payments. This has resulted in large part from the effects of the Great Recession that resulted in the loss of millions of good tax-paying jobs and from politically motivated federal government efforts to encourage people to seek benefits. There are a growing number of individuals who have decided that receiving a broad range of welfare benefits supplemented by the income from a part-time or low-paying job that is increased by the negative income tax, will give them a better quality of life than if they found and accepted a tax-paying job and lost their eligibility for welfare benefits. Almost 73% of black children are born out-of-wedlock. In many cases the father sneaks in and out of the home so that they can collect maximum welfare benefits.

There has also been a large increase in the number of people on disability many of whom would work if they could find a good job.

Obamacare is going to greatly reduce the incentive for young people to stay in school or to seek full-time tax-paying jobs. It is going to encourage settling for part-time employment and seeking ways to maximize welfare benefits. Teenagers will be further encouraged to have out-of-wedlock babies, and the inner city education and crime problems will be exacerbated. Young people of all races, growing up in inner city areas across the country, will, with the exception of the scholarship student, athlete or performer, have little incentive for self improvement or to seek a good tax-paying job with an opportunity for advancement. They will choose to settle for lives in a ghetto with minimum comforts and little self-esteem. They will vote for candidates who promise to give them greater welfare benefits. Obamacare is accelerating the conversion of American capitalism into a terrible form of socialism.

We should question whether this is the type of America we want or whether American capitalism will be sustainable.

Liberals refuse to acknowledge that Obamacare is fatally flawed and currently unaffordable because of the current weakness in our economy. They argue that the problems that Obamacare is facing are caused by Republicans who want Obamacare to fail. They argue that conservatives predicted doom and gloom for Medicare when it was adopted and now almost everyone likes it. They ignore Medicare’s unfunded liabilities. They argue that when Obamacare is fully in force it will accomplish its objectives.

However, Obamacare is not funded like Medicare is. Medicare is funded by a payroll tax paid by all working people prior to retirement and an annual supplemental payment for the coverage after reaching age 65. Unless you become disabled, you must work and pay taxes for years before you get benefits. Obamacare is funded by a variety of new taxes (a portion of which will be passed on to consumers) and the mandatory purchase of insurance coverage by corporations and individuals. Obamacare is in large part a welfare benefit for the sick and the poor to be paid for, in large part, by middle class working people.

There is talk about means testing Medicare. This means that those considered rich, who pay the most in Medicare withholding taxes and the new Obamacare tax based on income, will lose some or all of their benefits. Their payments will effectively become additional income tax payments.

We are the world’s richest nation and have the best healthcare system. We can afford to and should provide a reasonable level of healthcare to all of our citizens, regardless of their ability to pay. Every child needs pre-natal care, required preventive shots and antibiotics from time-to-time. We can afford to treat those who acquire leukemia and can cure or ameliorate most children’s cancers and many other inherited or acquired diseases. Prior to Obamacare we were doing all these things under existing insurance coverages and without cost to those who did not have insurance and couldn’t afford to pay. We needed to control costs (particularly, those at health insurance companies) and were working on it. A significant portion of family care can be provided more cost effectively at a clinic by a technician or nurse.

We cannot afford to give each person every high cost heart, liver, kidney, bone, retina, hip, knee or shoulder transplant or replacement they want, without a charge, whether or not they have insurance. We must have life-time limits, co-pays or deductibles for these expensive procedures.

Since most of these procedures are needed by people after reaching age 65, they were creating Medicare cost problems as our population aged and new expensive procedures became available before Obamacare was introduced. We needed to bring aggregate Medicare costs under control. Obamacare’s expanded healthcare benefits, that are provided for free for the poor under Medicaid, are exacerbating the problem of affordability.

Even though one has contributed to the cost of obtaining Medicare benefits in the form of withholding taxes for years and pays to purchase Medicare coverage, the benefits to be received by Medicaid beneficiaries, who will pay nothing, may be the same. This makes no economic sense. Either the Medicare benefits, or the payments to healthcare providers will be reduced or someone is going to have to pay for our generosity.

The onerous reporting provisions and limited fees payable by Medicare and Medicaid under Obamacare, when added to excessive malpractice costs, are driving doctors out of private practice and reducing the availability and quality of care.

The IRS, which is under investigation for unfairly targeting conservative groups for political purposes, is going to decide what healthcare benefits and premium subsidies you will be eligible for under Obamacare. They will be acting as death panels when determining who is eligible for and in what order a patient receives a transplant or treatment. Because President Obama has politicized the IRS, people paying for insurance may find that they receive lesser benefits than others whose vote is being sought or rewarded. We have heard it before. To the victor will belong the spoils.

Health insurance companies are required by Obamacare to offer benefits through qualifying policies. In an attempt to keep premium costs down our governments may use their insurance exchanges being established under Obamacare to undercut price. If insurance companies are driven out of business by Obamacare, we may end up with a one party payor system run by our inefficient federal and state governments that can be expected to further squeeze healthcare providers and reduce or delay service to limit the cost of providing coverage.