A HEALTHY DOSE OF CATASTROPHE

In 2003, Congress passed the Medicare prescription drug benefit.  However, in order to discourage American businesses from immediately dumping all their drug plans for retirees, Congress gave them a tax break equivalent to 28 percent of the cost of the plan.

Fast-forward to the dawn of the Obamacare utopia.  In one of many little clauses in a 2,000-page bill, Congress voted to subject the 28 percent tax benefit to the corporate tax rate of 35 percent.

On the day President Obama signed Obamacare into law, Verizon sent an e-mail to all of its employees warning that the company’s costs “will increase in the short term.” And in the medium term?  U.S. corporations that are able to do so will get out of their prescription drug plan and toss their retirees onto the Medicare pile, says Mark Steyn, author of New York Times best-seller America Alone: 

• About 3,500 businesses presently claim the 28 percent tax break.
• The cost to taxpayers of that 28 percent benefit is about $665 per person.
• The cost to taxpayers of equivalent Medicare coverage is about $1,200 per person.
• This means adding more to the ranks of Medicare as corporation’s drop their retiree drug plans will roughly double the cost of covering an estimated five million retirees.

This single component of health care reform neatly encompasses all the broader trends about where America is headed — not just in terms of increased costs and worse care, but also in the remorseless governmentalization of American life and the disincentivization of the private sector, according to Steyn.

Source: Mark Steyn, “Steyn: A healthy dose of catastrophe,” Washington Times, March 27, 2010.

For text:   

http://www.washingtontimes.com/news/2010/mar/27/a-healthy-dose-of-catastrophe/

Dear Patriots… 

The camel’s nose is under the tent.  The intruder’s foot is in the door.  Pandora’s Box has been cracked open.  Whatever image works for you, Sunday’s 11th hour vote on ”health care reform” was indeed “historic,” but for all the wrong reasons.  Some are quick to point out what’s “good in the bill.”  Yes, there are now provisions for pre-existing conditions, for instance.  But that’s fool’s gold and it’s hardly the point.  Most of the corrections needed could have been far more easily and cheaply accomplished by free market solutions in the private sector, along with passing legislation to allow outside-your-own-state competition and to eliminate frivolous and costly malpractice suits.  A government takeover of yet another major component of the private sector was unnecessary and wholly uncalled for!

What happened is that America was pushed down the hill of socialism in the name of “health care reform“:  More of your privacy was legislated away. The IRS will now hire 16,500 new agents to take care of the compliance piece.  Quality care will be reduced and diluted.  And Medicare will be further plundered to pay for it–hitting our seniors the hardest–along with almost immediate tax increases.  Protocols clearly outlined by our Constitution were deliberately ignored.  And backroom deals to fence-straddling legislators made it all come true.  Signed into law today (while the Executive Order to exclude taxpayers from being forced to fund abortion went conveniently UNsigned!)  Welcome to the Mother of all entitlement programs!  Ahhh…government!  ”Helping” us all so very much!

This is no time to pack it in.  Eternal vigilance is the price of liberty.  This matters not only to us, but to our children and grandchildren.  How can you get involved?  Contact us at louisvilleteaparty@gmail.com. 

Help us preserve and restore our Republic.

 We’re Your Louisville TEA Party

CHARTER SCHOOLS AND STUDENT PERFORMANCE

To uncover what is wrong with American public schools one has to consider the following: The impact of restrictive collective bargaining agreements that prevent rewarding good teachers and removing ineffective ones, intrusive court interventions and useless teacher certification laws.  Charter schools were invented to address these problems, says Paul E. Peterson, a professor of government at Harvard University and a senior fellow with the Hoover Institution. 

Compared to district schools, they have numerous advantages, says Peterson: 

• They are funded by governments, but they operate independently.
• This means that charters must persuade parents to select them instead of a neighborhood district school.
• That has happened with such regularity that today there are 350,000 families on charter-school waiting lists, enough to fill over 1,000 additional charter schools.  

According to a 2009 Education Next survey, the public approves of steady charter growth: 

• Though a sizeable portion of Americans remain undecided, charter supporters outnumber opponents two to one.
• Among African Americans, those who favor charters outnumber opponents four to one.
• Even among public-school teachers, the percentage that favors charters is 37 percent, while the percentage that opposes them is 31 percent.  

To identify the long-term benefits of school choice, Harvard’s Martin West and German economist Ludger Woessmann examined the impact of school choice on the performance of 15-year-old students in 29 industrialized countries: 

• They discovered that the greater the competition between the public and private sector, the better all students do in math, science and reading.
• Their findings imply that expanding charters to include 50 percent of all students would eventually raise American students’ math scores to be competitive with the highest-scoring countries in the world.

What makes charters important today is less their current performance than their potential to innovate.  Educational opportunity is about to be revolutionized by powerful notebook computers, broadband and the open-source development of curricular materials (a la Wikipedia).  Curriculum can be tailored to the level of accomplishment each student has reached, an enormous step forward. 

If American education remains stagnant, such innovations will spread slowly, if at all.  If the charter world continues to expand, the competition between them and district schools could prove to be transformative, says Peterson. 

Source: Paul E. Peterson, “Charter Schools and Student Performance,” Wall Street Journal, March 16, 2010. 

“The 10 Cannots” 

You cannot strengthen the weak by weakening the strong. 
You cannot help small men by tearing down big men. 
You cannot help the poor by destroying the rich. 
You cannot lift the wage earner by pulling down the wage payer. 
You cannot keep out of trouble by spending more than your income. 
You cannot further the brotherhood of man by inciting class hatreds. 
You cannot establish security on borrowed money. 
You cannot build character and courage by taking away a man’s initiative and independence. 
You cannot help men permanently by doing for them what they could and should do for themselves. 
~William J. H. Boetcker, 1916 

(Editor’s Note: If there has been a more absurd, preposterous and absolutely anti-Constitutional statement ever made by a Speaker of the House, you’d be hard-pressed to produce one: Last week, our illustrious Madame Speaker said: “We have to pass this bill so we can see what’s in it.”   What??  Do these people think that “We The People” are total idiots?   She is leading the charge to shred the Constitution and by-pass Congressional protocol– as set forth by said Constitution–altogether.)

Time for a Spending Cap With Teeth

Fiscal storm clouds are upon us. In five years, federal spending has skyrocketed to 24.7% from 19.9% of our economy. That’s the highest level since World War II. Borrowing has ballooned the national debt to $11.9 trillion from $7.3 trillion, a five-year increase equal to the accumulation of debt between President George Washington and President Bill Clinton.

Unfortunately, the long-term fiscal picture is worse. As the Baby Boom generation retires and the cost of health care continues to escalate, entitlement programs will cause federal spending to rise to 40% of our economy, double its post-World War II average. This is assuming that spending does not increase even further, an assumption that the trillion-dollar “stimulus” bill and the 84% increase in nondefense discretionary spending President Obama signed into law argues against.

The situation is dire, but don’t take our word for it. “U.S. fiscal policy is on an unsustainable path to an extent that cannot be solved by minor tinkering,” Congressional Budget Office Director Doug Elmendorf said recently. Former Comptroller General David Walker called the rising costs of government entitlements a “fiscal cancer” that threaten “catastrophic consequences for our country.”

Can we tax our way out of this problem? No.

In order to pay for what we are on track to spend under current law, taxes would have to double. This would crush our economy and condemn future generations to a far lower standard of living. That is not an option.

Can we grow our way out? Unfortunately, no. Although pro-growth policies like simplifying the tax code and lowering rates are critical components of any solution, they alone are insufficient. Mr. Walker estimated it would take double-digit economic growth every year for the next 75 years in order to close the fiscal gap.

Can we continue to borrow our way out of the problem? Borrowing of that magnitude would drive up interest rates to unimaginable levels, crowding out borrowing opportunities for families and businesses. As Greece and other European countries like Spain and Portugal face default for their excess spending, and China lectures us on our fiscal irresponsibility, the idea of borrowing at still higher levels seems inconceivable.

Without spending discipline only one option remains: monetizing the debt, also known as inflation. Although Federal Reserve Chairman Ben Bernanke has repeatedly said that this will not happen on his watch, many think it’s inevitable. If we do monetize the debt, inflation could be so high we may look back upon the Carter era with nostalgia.

Winston Churchill once said that “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” We’ve exhausted the possibilities. Now it’s time to do the right thing.

That is why we are proposing a Spending Limit Amendment to the Constitution. This amendment would limit spending to one-fifth of the economy (our historical spending average since World War II). The limit could only be waived by a declaration of war or by a two-thirds congressional vote.

As with other constitutional amendments, Congress would be given the authority to enforce and implement it. But for the first time, the federal government would have a limit on its size and scope. The Spending Limit Amendment does not promise a particular spending plan about what programs to restrain and by how much. Rather, it puts a legal constraint on lawmakers present and future.

Some will say it should not be done now. But if not now, when?

Our spending problems are tantamount to generational theft and fundamentally alter the American ethic. We cannot have both unlimited government and unlimited opportunity.

This amendment is an effort to allow “We the People” the opportunity to fundamentally define the size of our government. Passing it would save future generations from lives of fewer opportunities and less freedom.

Mr. Hensarling, a Republican, is a congressman from Texas. Mr. Pence, a Republican, is a congressman from Indiana.

This piece first appeared in The Wall Street Journal

(Editor’s Note: This would be a huge step in the right direction on the way to requiring our elected representatives to approve only a balanced budget each fiscal year.   I applaud Reps. Hensarling and Pence for proposing this bold, common-sense step.)

LOW-TAX TEXAS BEATS BIG-GOVERNMENT CALIFORNIA

Despite similarities in their histories and demographic makeup, Texas and California differ greatly in terms of their respective approaches to public policy.  With its low taxes and “hands-off” economic policies, Texas’ economy is booming and the state is experiencing a population inflow.  Meanwhile, California’s recent experience has been quite the opposite, thanks to its expensive and increasingly incompetent government, says Michael Barone, a resident fellow at the American Enterprise Institute (AEI). 

California has gone in for big government in a big way, says Barone: 

• Democrats hold big margins in the legislature largely because affluent voters in Los Angeles and the San Francisco Bay Area favor their liberal positions on cultural issues.
• Those Democratic majorities have obediently done the bidding of public employee unions to the point that state government faces huge budget deficits.
• Gov. Arnold Schwarzenegger’s attempt to reduce the power of the Democratic-union combine with referenda was defeated in 2005 when public employee unions poured $100 million — all originally extracted from taxpayers — into effective TV ads. 

Texas differs vividly from California, says Barone: 

• Texas has low taxes — and no state income taxes — and a much smaller government.
• Its legislature meets for only 90 days every two years, compared with California’s year-round legislature.
• Its fiscal condition is sound and public employee unions are weak or nonexistent. 

In the meantime, Texas’ economy has been booming.  Unemployment rates have been below the national average for more than a decade, as companies small and large generate new jobs, says Barone. 

And Americans have been voting for Texas with their feet, says Barone: 

• From 2000 to 2009, some 848,000 people moved from other parts of the United States to Texas, about the same number as moved in from abroad.
• That inflow continued in 2008-09, when 143,000 Americans moved into Texas, more than double the number in any other state; at the same time 98,000 were moving out of California.
• Texas is on the way to gain four additional House seats and electoral votes in the 2010 reapportionment. 

Source: Michael Barone, “Low-Tax Texas Beats Big-Government California,” Washington Examiner, March 7, 2010. 

ALICE IN HEALTHCARE LAND

What is most like Alice in Wonderland is discussing medical care reform in the abstract, as if there are not already government-run medical care systems in this country and elsewhere.

Yet there seems to be remarkably little interest in examining how government-run medical care actually turns out– medically and financially– whether in Medicare, Medicaid, Veterans Administration hospitals in this country, or in government-run medical systems in other countries.

By all means look at other countries, but not just to see what to imitate. See how it actually turns out. Yet there seems to be an amazing lack of interest in examining what government-controlled medical care produces.

While our so-called health care “summit” last week was going on, British newspapers were carrying exposes of terrible, and often deadly, conditions in British hospitals under that country’s National Health Service. But this has not become part of our debate on what to expect from government-controlled medical care.

Such scandals are an old story under the National Health Service in Britain, one repeatedly producing fresh scandals that their newspapers carry, but ours ignore.

In addition to a whole series of National Health Service scandals in Britain over the years, the government-run medical system in Britain has far less high-tech medical equipment than there is in the United States. Neither in Britain, Canada, nor in other countries with government-run medical care systems can people get to see doctors, especially surgeons, in as short a time as in the United States.

It is not uncommon for patients in those countries to have to wait for months before getting operations that Americans get within weeks, or even days, after being diagnosed with a condition that requires surgery. You can always “bring down the cost of medical care” by having a lower level of quality or availability.

Editor’s Note:  This is an excerpt of an essay by Thomas Sowell from Tuesday, March 3, 2010.