Monty Pelerin April 5, 2013
Data are hard to deal with when your vision is on the wrong side of it. Those wanting to claim there is a recovery underway are having just this problem. These people either have no understanding of economics or they believe falsely that they can inflate “animal spirits” with their hyped reports and that will initiate a recovery.
There will not be an economic recovery given the economic policies of this country. A recovery is not unlikely, I would argue it is closer to impossible if not impossible. The reasons for this position are not complicated. In short, the nation has become an out-of-control welfare state that is rapidly destroying the incentives to work or create jobs. Government policies appear designed toward this end. One doesn’t need a high IQ or an advanced degree in economics to understand the problems.
There are innumerable factors responsible for the decline of the US. Only three important ones will convey why the economy is dying:
1. The rule of law and property rights are under attack.
What do you really own? The depositors in Cyprus believed they owned what was in their bank accounts. They found out otherwise. Bondholders of General Motors believed they were protected by bankruptcy laws when GM was bankrupted by the government. They found out otherwise. Do you own your pension plans and IRAs. Well you always believed you did except now there is talk about confiscating a portion or all of these funds.
How much of your income do you own? For those doing well, let’s say 60%. But that portion is under attack with the “need” for higher taxes and “fair share” gobbledegook. What about Social Security? Although the government sold it as a retirement policy and told you it is yours, the government says in fine print it is not. That is their excuse for not treating it as a liability on their balance sheet.
The fact is that the rules are being changed at will by the side who has lots of guns. The number of rules and laws that have been changed or ignored in the past several years makes one wonder what laws will remain. We are approaching the point where there are no rules which means there can be no society. Without cooperation, markets will cease to function efficiently or perhaps at all. Millions of people will starve to death under such conditions.
2. Obamacare has raised costs
The costs associated with Obamacare are still not known or calculable. The rules are still being written. Already there are thousands of pages. Even though we passed it as Speaker Pelosi suggested as a means to find out what was in it, we still don’t know as the rules are still being made up.
For sure the program is driving up the costs of medical care and driving down the quality. That is exactly the opposite of what was promised. Business firms face great uncertainty as to what this mandate will do to their costs and operating procedures. Obamacare is rising the cost of employees. When you penalize something, you get less of it. That is a prime reason why there is no employment recovery in this country.
Employers have frozen their hiring until clarity develops. The development of clarity is no assurance that they will change their behavior. If the costs are too high (and they appear to be for many smaller businesses who create the most jobs), then hiring will not return.
The effect on hiring is only one negative. Full-time workers are being made part-time in order that they be exempted from the Obamacare mandate. These steps are not something business wants to do, it is something they must do in order to survive.
3. Government policies have made the dole more lucrative than work
As we make it easier to get unemployment benefits for longer time periods, more people take advantage of the system. So too with food stamps and disability. All programs are at or near record levels in what is supposed to be four years into an economic recovery. For many, the benefits of becoming a government dependent exceed what they can earn. One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per annum to have the same after-tax purchasing power.
If you are a product of the government schools and are legal to work (i.e., have skills enough that you are affordable at the minimum wage or higher), at what point do you realize that there is no need to go through the hassle of actual work. You can live pretty well by staying home and taking advantage of the entitlements available to you. That is exactly what a larger and larger percentage of the population are realizing. In many cases, it is economically irrational to work.
This behavior creates a social pathology that only worsens over time. Kids learn from their parents that work is not necessary and the many ways to game the system. In this regard, look for this problem to become worse over time unless these programs are cut back.
There Can Be No Recovery
Despite all you hear coming from the government’s media megaphone, there is no economic recovery underway, nor can there be one. The policies in place ensure that one will not happen. Economics is not a top-down science as Keynesians and politicians want you to believe. You can throw as many Fed dollars into the system or devise innumerable government stimulus programs. These are all top-down. Economics is a bottom-up process that starts with individual decisions and behavior. Individuals respond to available choices and incentives. They act in their own self-interest not in the manner in which some government planner wants them to act. Top-down programs do not affect the incentives of the individual decision-makers.
We raise the costs on those who work (higher taxes) and the businessmen who provide the jobs. One of the basic laws of human nature is that when you penalize something or make it less pleasant, people will want less of it. It is not a mystery why business is not hiring and the number of workers is declining. The return to both is declining as a result of government policies.
We raise the rewards for not working. Another basic law of human behavior is that when you increase rewards for a particular kind of behavior, you will get more of it. It is not a mystery why more people are choosing the dole than ever before. Government has encouraged them to do by providing higher rewards.
Add in the regime uncertainty associated with unstable or unpredictable laws and regulations and you have the perfect storm. There is no incentive to hire. Business hunkers down not knowing what is coming their way next. They understand they are targets of this Administration. It is unlikely that there will be any improvement on this fron while Obama remains in office. This behavior has nothing to do with politics. Even businesses headed by Democrats are behaving in this fashion. It is self-interest as in the desire to survive that motivates this behavior.
Why The Economy is Dying
As government grows the private sector shrinks. As the private sector shrinks there are fewer goods and services produced (government produces no goods and few services). I believe it was Dick Armey who described this situation with the wagon analogy: there are more people riding in the wagon and fewer pulling the wagon. As the wagon becomes heavier, the remaining pullers must work harder to move it.
The pullers must support the riders. Government does not support the riders or anyone else for that matter. Whatever government has it has taken from the pullers. Whatever it doles out it must get from taxes, borrowing or printing new money. Regardless of which means it uses, it is all coming from the pullers. They pay the borrowing back. They have less as a result of higher taxes. They are made poorer by the rising prices from the printing of money.
As the burdens increase on the pullers and the benefits increase for the riders, more pullers decide to ride. The truly creative and talented can always make enough money to continue to work rather than ride. However, when their efforts can be expended in other countries that penalize them less, at some point they no longer pull the wagon. They leave the country to climes where they are treated better.
Each increase in government spending means requires more money from the private sector. That means greater distortions in the incentive-disincentive calculus that produces fewer people pulling the wagon. Now fewer people must support more non-producers. Every time someone gets in the wagon, the burden on the productive sector increases. More must be extracted from a smaller group to serve the increasing riders.
That is what is happening in this country. If it is not reversed, the economy will stagnate and eventually implode. This conclusion is dependent upon nothing more than simple arithmetic. How bad is the imbalance today? Tyler Durden provides some information (my emboldening in red added):
The punchline: 110 million privately employed workers; 88 million welfare recipients and government workers and rising rapidly.
And since nothing has changed in the past two years, and in fact the situation has gotten progressively (pardon the pun) worse, here is our conclusion on this topic from two years ago:
We have been writing for over a year, how the very top of America’s social order steals from the middle class each and every day. Now we finally know that the very bottom of the entitlement food chain also makes out like a bandit compared to that idiot American who actually works and pays their taxes. One can only also hope that in addition to seeing their disposable income be eaten away by a kleptocratic entitlement state, that the disappearing middle class is also selling off its weaponry. Because if it isn’t, and if it finally decides it has had enough, the outcome will not be surprising at all: it will be the same old that has occurred in virtually every revolution in the history of the world to date.
But for now, just stick head in sand, and pretend all is good. Self-deception is now the only thing left for the entire insolvent entitlement-addicted world.
Is The Decline Inevitable?
Of course not. As Lawrence of Arabia stated: “Nothing is written.”
The Economic Solution
The solution to solving the problem is quite simple for an economist. Merely reverse the process. Make it attractive for people to jump out of the wagon and begin pulling. For businesses, make it attractive for them to hire. Make it unattractive to be on the dole. Reverse the growth of government and you increase the size of the private sector. More capital is made available for productive activities rather than being squandered by government. Talent stops leaving the country when they are treated more favorably here, whether this be via lower taxes or less onerous regulatory burdens. Then, get government out of the way and let markets solve the problem.
The Political Barrier
For the political class, the solution borders on the impossible. Politicians have bribed the citizenry with goodies for votes. They have sold the notion that government is responsible for all good things. The economic solution runs counter to everything that politicians have peddled. Further it reduces their power and ability to retain office, at least in a manner in which they are accustomed. It shrinks their perquisites. It shrinks their vote-buying ability. In short, it is virtually impossible for them to go along with such a solution.
What politicians thrive on is what created the current problems. Reversing this behavior is alien to them. They would not know how to behave under such conditions. Yet the economic solution is the only solution!
Do I expect politicians to change and save the country? No! Is it possible they could? Probably not, but “nothing is written.”
By Evan Feinberg
Millennials were born free, but everywhere we’re now in chains. The culprit is the skyrocketing national debt levels of the past decade, which have hurt young Americans and Millennials more than anyone else. We’re already facing enough personal debts as it is — and now we’re being asked to pay for everyone else’s.
Our debts start close to home. Today, the average college graduate is trying to pay down $35,200 in student loan debt. If that weren’t bad enough, we’re also looking at a job-market with near-record 16% unemployment rate for 18-29 year olds. That means we have more bills than ever — and fewer jobs to pay them off.
With such burdens, it’s hard for us to plan for the future. But our personal debt problems pale in comparison to the one that politicians are foisting upon us with out-of-control spending in Washington. The national debt, which now clocks in at nearly $17 trillion, continues to grow.
And just like our student loans, we’re going to be stuck with paying the bill.
Unfortunately, paying down these debts becomes harder with every passing day. Our debt to gross domestic product ratio now exceeds 100% — which means our government has produced more debt than the entire American economy produces useful commodities each year. Politically easy proposals such as “taxing the rich” can’t fix this crisis — even taking every last penny of the one percent’s money won’t put a dent in our debt. The U.S. can pay off its debts, but it’s going to take significant to government spending.
Clearly, our elected officials need to make some tough decisions. But they had an opportunity to do just that with the debt ceiling.
Lawmakers once again failed to avoid the complacency that has made continued debt ceiling increases the status quo. Inaction by our elected leaders is at the root of the problem. Passing the buck works great for re-election campaigns, but only at the cost of a bright future for my peers, my children, and every future generation thereafter.
That’s why Millennials need to take a stand. At a bare minimum, we need to demand dollar for dollar cuts as a condition for raising the debt ceiling again in January. That’s right: for every new dollar our government wants to spend, they should also find another dollar to cut or save. Good thing there are no shortage of options.
Major entitlement spending consumed nearly half of the entire federal budget in 2012, and will grow to nearly two-thirds of budget in the next decade. Trustees for both Social Security and Medicare admitted that neither program will survive past 2033 without changes. Only 18% of young Americans actually believe they will receive Social Security benefits. Serious entitlement reform is a necessity, and simply raising the Social Security eligibility age by two years could save $148 billion. The program will collapse without serious reform; the only missing ingredient is political courage.
Fraud, redundancy, and wasteful spending across government agencies are costing taxpayers billions of dollars every year. In light of the recent shutdown, perhaps it’s not such a bad idea to figure out just now “non-essential” some of the federal government really is. Just reforming and reducing the massive federal workforce would save another $150 billion.
Additionally, the federal government owns vast amounts of land west of the Mississippi river — land that’s valued between $500 billion to $1 trillion according to the Congressional Research Service. Selling that land for private use would bring huge financial windfalls that could be used to responsibly pay down federal deficits, and provide untold economic growth. On top of that, the government spends more than $8 billion a year just maintaining 70,000 vacant buildings and properties.
The list of possible changes goes on. Now we just need for our elected officials to have the courage to make these hard choices and stop kicking the can down the road no matter what. It’s time for politicians in Washington to put the next generation before the next election.
Evan Feinberg is the President of Generation Opportunity.
Some time between the middle and the end of October, the federal government will reach a hard limit on the amount of debt it can issue, and its ability to finance governmental operations will be affected. Confusion about the debt limit abounds, and this Issue Brief will address some common questions.
What Is the Debt Limit?
The United States debt limit, or debt ceiling, is the statutorily defined amount of debt the U.S. Treasury can issue, either by borrowing from the public or issuing an intragovernmental receipt to special accounts, such as the Social Security or Medicare trust funds.
The Treasury Department has to have liquidity, or cash on hand, to disburse the funds necessary to meet its contractual obligations. The federal government maintains this liquidity by managing governmental receipts (such as income tax payments) and selling debt (such as Treasury bonds).
Will a Government Shutdown Occur If the Debt Limit Is Not Raised?
The debt limit is often confused with the expiration of appropriations bills. Reaching the debt limit is distinct from a government shutdown. A government shutdown occurs when appropriations authorization expires: Unless there is a law saying that money may be spent on a project, money may not be spent on that project. A debate over an appropriations bill is a debate over whether to fund a specific government function. When the government shutdown began, only certain statutorily defined “essential” government functions have continued to operate.
The debate over the debt limit, however, is a debate over how to finance governmental operations—reaching the debt limit would not force a government shutdown. Currently, the debt limit is $16.699 trillion. The federal government reached this limit on May 19, 2013, and Treasury has since used statutorily allowed “extraordinary measures” to avoid issuing additional debt and still have the cash on hand to finance day-to-day operations. When the Treasury exhausts these extraordinary measures, the federal government will continue operating. However, the President might decide that federal employees, for example, will not necessarily be issued checks available to cash immediately.
Even without the ability to issue additional debt, the government will continue to accrue legal obligations; it will simply not be able to immediately liquidate (pay cash for) those obligations.
What Happens to the U.S. Debt If We Reach the Debt Limit?
It is impossible to tell what would happen if the debt limit is not raised. If Congress and the President are unable to reach an agreement on raising the debt ceiling, markets and credit rating agencies might interpret this negatively as unwillingness of the U.S. government to honor its obligation. If the President chooses to default on all obligations rather than a few (discussed below), this could exacerbate the problem. Market perception of U.S. sovereign debt directly affects bond yields (interest rate paid) on U.S. debt, so decisions the President makes can actually save or cost the government money in the long term.
The Prompt Payment Act provides that the “temporary unavailability of funds to make a timely payment” does not excuse delayed payment and that the government is responsible for paying interest charges on such delayed payments. Over time, these interest penalties capitalize, so the federal government ends up paying compound interest. Depending on how the President manages payments, statutory interest payments may be greater or smaller.
What Would the President Prioritize?
While there have been proposals to cabin the authority of the executive to prioritize payments, as it stands there is no statute governing how to manage government finances past the debt limit. Since governmental obligations would exceed receipts, exceeding the debt limit logically implies that at least some obligations would be delayed. These obligations would thus, by definition, be in default. There is no general “governmental default” past the debt limit; default would occur with respect to specific obligations that the President chooses not to prioritize.
There are constitutional backstops on the President’s otherwise plenary authority to prioritize payments. Of these, the most important is that the President may not prioritize payment in violation of the Due Process Clause of the Fifteenth Amendment. He may not, for example, choose to pay the salaries of federal employees of one race before paying the salaries of federal employees of another race. Subject to this limitation, the President’s prioritization choices are essentially unbounded.
The President could, of course, play a game of political brinksmanship and fail to pay any obligations until the debt ceiling is raised. He could argue that all obligations are on an equal footing and that prioritizing payments violates some principle of fairness. Former Treasury Secretary Timothy Geithner made statements about the political unworkability of prioritization in the past, but to date, Treasury has not disavowed its legal authority in this area. Failing to prioritize debt obligations would have far-reaching consequences, however, including potentially increasing the cost of servicing the debt long after the debt limit crisis ends.
Further, to the extent that this situation would involve having cash on hand and failing to pay some receipts, this option implicates the Congressional Budget and Impoundment Act of 1974, which prevents the President from deferring any “budget authority.” This phrase is defined to include “borrowing authority, which means authority granted to a federal entity to borrow and obligate and expend the borrowed funds.” Holding cash until such time that the Treasury can meet all of its payments necessarily includes deferring expenditures of borrowed funds until such time as the debt ceiling is raised, which would implicate these statutory limitations.
The President could also choose to continue payments for “essential” services analogous to those defined in the appropriations context. There is no statutory requirement for this decision, but the idea that there are “core” functions of the federal government that ought to remain liquid is easily understandable. Meeting debt obligations and paying military personnel might be prioritized at the expense of other obligations, such as issuing certain grants and loans to private-sector firms and to state and local governments, for example. So-called mandatory spending, such as Social Security payments, do continue during a government shutdown, but they need not be prioritized at the debt limit.
The President could also pick and choose among programs he likes and those he does not like. He might direct Treasury to pay Department of Defense employees before Department of Education employees, or vice versa. Whatever decision he makes would be essentially unchallengable in court.
Ultimately, however the President chooses to manage payments, delays will accumulate and worsen until either spending is cut or the debt ceiling is raised.
In brief, the President has broad authority to manage government payments to avoid defaulting on federal obligations. He can choose which payments to make and in which order, and these choices will impact the effects on the average U.S. taxpayer and the economy.
—Andrew Kloster is a Legal Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.
Posted in Cultural Revolution "FORWARD", Economic collapse, Economic planning, Economic policy, Financial repression, Medicare, Obamanomics, Pay to play, Political economy, Progressive Agenda, Social Security, Tax Payer's Dime, UnAmerican, United States
Tags: Barack Obama, Congress, debt ceiling, debt limit, Government shutdown, Social Security, United States, United States Department of the Treasury, United States public debt, United States Treasury security
By Paul Walter
May 20, 2013
For almost a year we’ve seen bold headlines that Barack Obama is in the process of taking 401(k)’s, ostensibly to pay down the national debt (created by politicians we elect to office). The same flavor of borrowing against federal employee retirement funds until Congress can borrow more money:
“In a letter to congressional leaders Monday, Treasury Secretary Timothy Geithner said he is suspending new investments in both the Civil Service Retirement and Disability Fund (CSRDF) and the Thrift Savings Plan G Fund, which is invested in federal securities. In addition, the department will redeem some of the investments held by the CSRDF, Geithner wrote.
“Federal retirees and employees will be unaffected by these actions,” Geithner said. By law, both funds must be made whole once lawmakers agree to increase the debt limit.
“The Federal Retirement Thrift Investment Board also Monday stressed that TSP investors will not be harmed. Under a 1987 law, the government is required to repay suspended G Fund investments, including interest, once the debt ceiling is raised and the government can resume borrowing. The board will keep track of what Treasury owes and how much interest the G Fund would have accumulated had the investments not been suspended. “You have an IOU from the federal government for the G Fund,” board chairman Andrew Saul said. “It’s not going to affect them [TSP investors], period.”
It’s easy for Treasury Secretary Geithner to reassure federal employees filching their life long “nest egg” funds is backed by a worthless IOU since it’s not his retirement.
This is known as robbing Peter to pay Paul. Instead of reducing the size of government by eliminating unconstitutional cabinets and agencies, Congress simply borrows more debt from foreign governments. Repayment of those civil service retirement funds is paid with debt. Can you describe anything more irresponsible than that? Try this one: The US Government spends $435,841,200 per hour
Art. II, Sec. II of the U.S. Constitution does not authorize the president to spend or borrow one penny of the people’s money. He can use the ‘bully pulpit’ with his party to move the idea along. But, any such change in existing laws would have to come from Congress. Does that mean Obama won’t try? Nothing is out of the realm of possibility when it comes to the current occupant of the White House.
As the dollar continues to lose its purchasing power, many seniors are finding their 401(k) accounts are not going to get them through through their golden years:
“According to the Center for Retirement Research at Boston College, the median household retirement account balance in 2010 for workers between the ages of 55-64 was just $120,000. For people expecting to retire at around age 65, and to live for another 15 years or more, this will provide for only a trivial supplement to Social Security benefits. And that’s for people who actually have a retirement account of some kind. A third of households do not. For these people, their sole retirement income, aside from potential aid from friends and family, comes from Social Security, for which the current average monthly benefit is $1,230.”
Both the White House and the Congress send up ‘trial balloons’ periodically to see how the American people will react to something being bandied about back rooms in the halls of Congress or the Oval Office that directly affect our lives. If the initial response isn’t the desired one, input from think tanks and special interest groups help shape new proposals:
“A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.
“The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.
“This hearing was set up to explore why Americans are not saving as much for their retirement as they could,” explains National Seniors Council National Director Robert Crone, “However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up.”
“A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a “government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation).” She proclaimed that even “private annuities are problematic.”
“Such “reforms” would effectively end private retirement accounts in America, Crone warns. “These people want the government to require that ultimately all Americans buy these government annuities instead of saving or investing on their own. The Government could then take these trillions of dollars and redistribute it through this new national retirement system.”
Should Americans be concerned about such a move? Very. Congress has created a ‘national’ debt of close to $17 trillion dollars. Unpaid mandates that have to be paid down the road on social security, Medicare and the ‘prescription drug liability’ program total $123.9 trillion dollars. Your share of that debt is a whopping $1.9 million dollars over your lifetime.
Most people have a difficult time wrapping their head around such astronomical numbers. There isn’t any real money to pay those obligations, so where will the money come from? As quoted above: “.. once the debt ceiling is raised and the government can resume borrowing.” What better place to begin borrowing than private pension funds using state of the art accounting methods that endanger everyone’s retirement funds. Nationalize the nation’s pension system and you’ve got the goose that will lay golden eggs…..for about ten days of spending. Then what?
Americans were far better off before government stepped in to “help” them with saving for retirement because anytime the government says “we’re here to help you,” that’s the time to grab your money and run the opposite direction.
The first steps towards nationalizing your retirement are underway. Every “national” program administered by the federal government is a monumental financial disaster. The numbers don’t lie, but politicians do.
We are all victims of the inept, morally irresponsible actions of one Congress after another for decades, yet, we keep reelecting them expecting different results. If you don’t think allowing the federal government to take over the only thing you will have when you finally retire is a good idea, now is the time to let those who represent you in Congress know how you feel. Before they scoop up your life’s savings backed by an IOU. They will owe you all right and it won’t even buy a cup of coffee.
To summarize it all for you.
Lets say you spend 20 plus years in the military and retire at 38 or 40. You receive your pension from the service. Still at a young age you decide to work for government or a private corporation for another 20 years or so. That will entitle you for another retirement pension. Then at age 65 you qualify for Social Security. Politicians call that triple dipping. The time is coming (sooner than you think) you will only be allowed to keep one, all in the name of saving the economy. All a big lie of course, because they created the conditions in the first place. (Called Theses, Syntheses, and Antitheses. Create the problem, offer the solution and walla, you have the desired outcome). Why are they doing this you ask? Simple! Wealth means freedom and independence. A person that’s financially well off can not be controlled, a poor one can. Poor people will do whatever they’re told and look to government for sustenance. That’s Communism. Everybody looks to mother government to take care of them. What the communists (aka: RINO’s, Liberals or Democrats) fear the most is individuals who don’t need the government and can think and care for themselves. I believe the backlash is coming and they are counting on the loyalty of the police to protect the crooks from the angry public demanding justice.
© 2013 Paul Walter – All Rights Reserved
Thursday, May 16, 2013
If this story came from a different source it would immediately be dismissed as a crazy conspiracy theory like birtherism, truthers, or the missing egg salad recipe discussed in Woody Allen’s What’s Up Tiger Lilly? But this story came from the Wall Street Journal and comes on top of the growing IRS scandal and should raise fear in the hearts of most freedom loving Americans. The Internal Revenue Service is working with the Department of Heath and Human Services to great the largest database of the personal information of American citizens ever created by this Government.
This March the IRS Inspector General reiterated that ObamaCare’s 47 major changes to the revenue code “represent the largest set of tax law changes the IRS has had to implement in more than 20 years.” Thus the IRS is playing Thelma to the Health and Human Service Department’s Louise. The tax agency has requested funding for 1,954 full-time equivalent employees for its Affordable Care Act office in 2014.
Instead of going after tax cheats, these bureaucrats will write and enforce tax regulations for parts of the economy in which they have no core competence. For example, do ski instructors or public school teachers count as seasonal workers? How long is a “full time” work week? Is it 40 hours, or 30?
The IRS will also dispense ObamaCare’s insurance subsidies since technically they’re “advanceable” tax credits, i.e., transfer payments made prior to filing a tax return. The IRS will also police the individual mandate-tax to buy health insurance, as well as the business penalties for not offering Washington-approved coverage to employees.
To monitor compliance with these rules, the IRS and HHS are now building the largest personal information database the government has ever attempted. Known as the Federal Data Services Hub, the project is taking the IRS’s own records (for income and employment status) and centralizing them with information from Social Security (identity), Homeland Security (citizenship), Justice (criminal history), HHS (enrollment in entitlement programs and certain medical claims data) and state governments (residency).
The data hub will be used as the verification system for ObamaCare’s complex subsidy formula. All insurers, self-insured businesses and government health programs must submit reports to the IRS about the individuals they cover, which the IRS will cross-check against tax returns.
Even without the IRS news of the past few days this database of personal information was a frightening thought. When you include this IRS scandal, and the long history of politicians of both parties using the IRS to go after their political opponents, it is clear that the Internal Revenue Service has too much power.
The IRS is a legal governmental bully. This government agency is not much different than the loan shark’s enforcer going from “client to client” threatening broken limbs (or worse). The Internal Revenue’s major method of enforcement is intimidation.
Now with the extra responsibility of enforcing Obamacare, and its new growing database of American’s personal information the IRS will grow in power and weapons for intimidation. Their growing power goes against everything for which this country stands. As Jefferson wrote in the Declaration of Independence:
That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security
There is no suggestion here that there should be an uprising to overthrow the government of the United States, but perhaps it’s time to “overthrow” the Internal Revenue Service for their long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism.
The IRS was formed by an act of congress, it was given awesome powers by acts of congress, it can be tamed by an act of congress. I call for congress to act immediately to enact legislation to cut the power of the IRS making strict rules about what they can and cannot do (under penalty of law). Further more I call on the House of Representatives to stop funding any IRS expansion due to Obamacare. The House has the power of the purse.. so why are they waiting?
- SCAM ALERT: IRS Warns Of Pervasive Telephone Scam (wctv.tv)
- IRS’s Lerner illegally sent conservative group data to FEC: Watchdogs (canadafreepress.com)
- Small Business Partnerships to Be Priority of IRS Exams: Taxes – Bloomberg (bloomberg.com)
- Powhatan man warns of elaborate IRS phone scam (wtvr.com)
- Shh! Lame St. Media Sleeping Over New IRS Scandal Findings (deadcitizensrightssociety.wordpress.com)
Posted in Cultural Revolution "FORWARD", Financial repression, Gun Control, Indefinite Surveillance, Martial Law, Medicare, NDAA, NSA, ObamaCare, Progressive Agenda, Shadow Government, Social Security, Targeting, Tax Payer's Dime, Tax Policy, UnAmerican, United States
Last week, the Senate Budget Committee Republican staff released a report revealing that, over the next 75 years, Obamacare will add an additional $17 trillion in unfunded obligations—i.e., the benefits promised by the federal government that haven’t yet been paid for.
Before Obamacare, federal programs were already responsible for racking up 75-year unfunded obligations of an astounding $65 trillion. According to the report, Medicare accounted for $38 trillion, Medicaid was responsible for over $20 trillion, and Social Security added $7 trillion.
With the enactment of Obamacare, projected federal unfunded obligations have increased by $17 trillion, now totaling $82 trillion. Obamacare’s massive Medicaid expansion and new exchange subsidies are largely to blame.
The number was deduced from the Administration’s own estimates, the report explains:
The $17 trillion figure…is based on the long-term model used by the Office of the Actuary at the Centers of Medicare and Medicaid Service to estimate federal health expenditures over a 75-year period. The assumptions and methodology used to build the model is from [the Centers for Medicare and Medicaid Services] Office of the Actuary. Data on the cost of the Medicaid expansion and the premium subsidies in the 10-year window is from the Administration and the Congressional Budget Office.
Clearly, Obamacare is not just bad health care policy; American taxpayers can’t afford it. As Senator Jeff Sessions (R–AL), ranking member of the Senate Budget Committee, said, “President Obama told the American people that his health law would cost $900 billion over ten years and that it would not add ‘one dime’ to the debt.… This health law adds an entirely new obligation—one we cannot pay for—and puts the entire financing of the United States government in jeopardy.”
Obamacare may have been passed under a cloak of fiscal responsibility, but the facts continue to show otherwise. At a time when $1 trillion-plus deficits have become the norm and the United States faces ever-increasing debt, we simply cannot afford an unpopular government overhaul of health care that exacerbates our financial crisis.
- Congress, Why Not Try To Pay Attention? (gadabout-blogalot.com)
- $17 Trillion in Unfunded Financial Obligations for ObamaCare (fearlessconservative.com)
- MILLER: Obamacare’s hefty tax bill (mb50.wordpress.com)