Details of the Trump-Carrier deal

Donald Trump’s first big coup as president-elect came this week with the announcement of a deal to save 1,000 jobs in Indiana. A Carrier gas furnace plant, along with a United Technologies Electronic Controls plant owned by the same company, had been slated to move to Mexico. The moves, which would cost more than 2,000 jobs, had been a frequent target of Mr. Trump’s during the campaign.

During the presidential campaign, Trump frequently criticized companies who moved from the United States to other countries. Many of the companies that leave the US do so to flee the US corporate tax rate, which is the highest in the free world. Trump had threatened to punish corporations that moved to other countries with a 35 percent tariff on goods that they imported back to the US.

According to the Indy Star, taxes weren’t the only factor in the move to Mexico. The 1,400 Carrier employees are unionized and make as much as $26 per hour. They can earn $70,000 annually with overtime. Mexican workers would earn $3 per hour. The Indiana employees would have been laid off in three waves starting in 2017. Fortune reports that the company would save $65 million annually from the move.

Early news about the deal, which would keep Carrier in Indiana, but not the other United Technologies plant, was sketchy. The number of jobs staying in Indiana has been described as “close to 1,000” and “more than 1,000” at various times according to ABC News. Fox News reported that “the deal spares about 800 union workers,” citing a federal official who had been briefed by the company.

Unverified reports on the deal in Fortune say that Indiana will retain “800 manufacturing jobs at the Indiana plant that had been slated to move to Mexico, as well as another 300 engineering and headquarters jobs.” The report says that “some 1,300 jobs will still go to Mexico, which includes 600 Carrier employees, plus 700 workers from UTEC Controls,” the other Indiana plant. Affected workers will be offered employment and relocation in UTC’s aerospace division or provided funding for reeducation.

“The incentives offered by the state were an important consideration,” a statement by Carrier said, but exactly what Carrier got in return is uncertain at this point. There is widespread speculation that the deal involves favorable tax treatment by the state and local governments. Mike Pence, the vice president-elect, is currently the governor of Indiana and would have had great influence over any deal between the State of Indiana and Carrier. The Fortune source reports that Carrier received roughly $700,000 annually in state tax incentives for an unknown number of years in exchange for staying in Indiana.

United Technologies Corporation, the parent company of the two plants, had reimbursed the state and local governments for tax abatements and grants in advance of the move. According to ABC News, the company repaid $380,000 to the Indiana Economic Development Corporation and $1.2 million in tax abatements to the city of Indianapolis.

Carrier also cited the changing presidential administration as a reason for its decision. “Today’s announcement is possible because the incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate,” the statement said. This may refer to Republican promises to reform the federal tax structure and lower the corporate tax rate.

While Carrier’s non-move may generate goodwill with the Trump Administration and help preserve the company brand, an even larger factor might be the federal funds that directly affect the company’s bottom line. The Indy Star notes that “United Technologies receives about $5.6 billion a year in federal money, constituting about 10 percent of its overall revenue.” Much of this money comes from federal contracts through Pratt and Whitney, a jet engine manufacturer that supplies engines for the new F-35 Lightning II fighter, and Sikorsky, the manufacturer of the military UH-60 Blackhawk helicopter. As parent to both companies, United Technologies is one of the country’s largest defense contractors.

“United Technologies is a huge company, and the Carrier deal is a very, very small part of it,” said John Mutz, a board member of the Indiana Economic Development Corporation, in Politico. “This is a much different set of circumstances if you’re talking about all of the contracting work that United Technologies does for the federal government. That’s a big deal.”

Claude Barfield of the American Enterprise Institute called the approach “crony capitalism” in Politico. “For market-based economists or analysts, this is really a version of crony capitalism, and it’s the kind of thing you really don’t want to get into or have government get into,” Barfield said. “This gets back to who … actually has the ear of the government. So you get the situation where decisions are not made in terms of their economic sense, but in terms of gaming the political system.”

While using defense contracts as leverage to keep Carrier may have worked in this instance, it does nothing to change the underlying problems that American companies face. Carrier may have won state tax breaks and preserved its federal contracts, but it still faces a high federal corporate tax, high labor costs with its unionized workforce, high turnover rates and a dense regulatory environment. It is these issues that the Trump Administration must address for prevent companies from fleeing the United States.

While the underlying problems for businesses remain, Trump’s deal with Carrier was beneficial for the president-elect. Trump used Carrier to buy time and goodwill for the incoming administration. He has also earned political capital for the deal. It will be interesting to see how he uses these assets once he takes office.

Originally published on The Resurgent

Can America be saved?

During the Obama Administration, a frequent rallying cry among conservatives has been the need to “take our country back.” The Obama era has brought the fundamental change that the future president promised in 2008, but has left many Americans feeling that the country is on the wrong track.

Much of the focus on restoring America is centered on restoring Republicans –constitutional conservatives in particular – to the White House. Winning the election of 2016, however, will prove much easier than reversing American decline. Many of the problems faced by the United States are in reality merely symptoms of deeper problems that may well prove impossible to fix, even with committed conservative Republicans in control of both houses of Congress and the presidency.

The national debt

The most obvious of long term problems is the mounting federal debt. The debt, which has been increasing for years under both Republicans and Democrats, almost doubled under President Obama and now stands at more than $18 trillion. If this were not bad enough, the figure is incomplete because it does not include unfunded liabilities for items such as entitlement programs and federal pensions. The true debt is more than $100 trillion according to Forbes, an amount that the government will almost certainly never be able to repay.

Republicans under John Boehner deserve credit for attacking this problem, but their efforts have been woefully inadequate, due in no small part to President Obama. The sequester led to the first real cuts in the federal budget since the 1950s. At this point, federal spending has declined for three consecutive years for the first time since the 1920s, but while the deficit has been reduced, it has not been eliminated. The federal debt continues to increase, albeit at a slower rate.

Federal borrowing has also been aided by historically low interest rates over the past decade, but this cannot be expected to continue indefinitely. Currently, interest payments make up seven percent of the federal budget according to the Center on Budget and Policy Priorities. As the debt continues to grow and interest rates rise, payments on interest will crowd out other budget items. At some point, Americans will have to choose between national defense and entitlements.

The destruction of the family

Hidden behind many symptoms of American decline is the decline of the family. Statistics show that half a century ago, almost all children were born to intact families. Divorce was uncommon and most kids grew up with two parents. Today, almost half of first babies are born to unmarried mothers. Two things caused the change: birth control and the welfare programs of the Great Society.

Birth control eliminated the big reason that women had for abstaining from sex until marriage. The increased availability of sex outside of marriage eliminated a big reason for men to get married. Accordingly, marriage rates have dropped since birth control became widely available.

Complementary to birth control was the fact that, if a woman did get pregnant outside of marriage, the government would now subsidize the costs of raising children for single parents. Men need no longer feel the pressure to marry a woman that they had “knocked up.” Dad wasn’t needed because Uncle Sam would fill the void.

The problem is that a government check is not as effective a parent as an actual, flesh and blood father. Studies have shown that children of single-parent households are more at risk for juvenile delinquency and drug abuse than their peers and are more likely to live in poverty. They also tend to have more children outside of marriage, requiring more government financial assistance, in a vicious cycle that perpetuates itself and that will be harder and harder to break.

Executive usurpation of Congress

A less obvious threat to the future of the United States is the damage that President Obama has done to the balance of power between the presidency and Congress. After the 2010 elections, President Obama learned that he could bypass Congress to enact difficult-to-pass items of legislation through the administrative rulemaking process of executive agencies. Net neutrality and new carbon regulations by the Environmental Protection Agency are two examples of this.

When the Republicans took control of the House and then the Senate, Obama increasingly relied on Executive Orders and administrative rulemaking to advance his agenda. A well-known example is the president’s 2012 directive on immigration. Two more recent examples are the agreement with Iran, which Obama refuses to call a treaty because that would require ratification by the Senate, and this week’s revelation, reported by Maggie Gallagher in The Pulse, that the Equal Employment Opportunity Commission unilaterally criminalized workplace discrimination based on sexual orientation under the Civil Rights Act of 1964. The law, as written, does not include sexual orientation as a protected class.

Republicans have made attempts to rein in the president, but, all too often, these attempts fall victim to Democratic filibusters or the president’s veto pen. The Constitution is inadequate to deal with a president who has no respect for the rule of law. This was noted by framer John Adams who said, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”

It is unlikely that future presidents will not remember President Obama’s success at circumventing Congress with executive actions. It will be very tempting for Obama’s successors to adopt the same strategy of legislation by “a pen and a phone.”

The failure of the courts

Closely related to President Obama’s usurpation of congressional authority is the failure of the courts to adequately provide a check to unconstitutional laws and executive regulations. The appointment of liberal judicial activists for decades has eviscerated the judicial branch as a check to Congress and the president. The problem is not limited to the Supreme Court, but includes federal and state courts around the country, as evidenced by the plethora of state judicial decisions striking down definition of marriage of laws.

Likewise, the problem is not new. There have been many bad Supreme Court decisions throughout our history, notably the Dred Scott decision of 1857, but the idea of justices creating law rather than interpreting it stems back at least 80 years to the New Deal. In Wickard v. Filburn (1942), the Court ruled that the interstate commerce clause could be interpreted to mean that Congress could regulate commerce within a state, the opposite of what the Constitution says. Griswold v. Connecticut (1965) created the heretofore unknown “right to privacy” that led to other bad decisions such as Roe v. Wade (1973).

These earlier bad decisions are the direct lineage of more recent bad decisions like King v. Burwell (2015), in which a majority ruled that an “Exchange established by the State” can also mean “exchange set up by the federal government,” NFIB v. Sebelius (2012), where the Court ruled that Congress can tax people for not doing things it wants them to do, and Obergefell v. Hodges (2015), where a majority found that the dignity of homosexuals required the justices take defining marriage out of the hands of the states and place it into their own hands, the will of the people and the Constitution be damned. As Justice Scalia lamented in his King v. Burwell dissent, a judicial philosophy that allows judges to make “interpretive distortions… ignores the American people’s decision to give Congress ‘all legislative Powers’ enumerated in the Constitution.”

A constitutional republic requires the rule of law to exist. When judges rewrite laws based on their own desires, the rule of law is in peril. Judicial activism is a problem, but judicial restraint in the face of unconstitutional laws is just as threatening.

America’s core problems are deeply rooted in decades of progressive policies and social tinkering as well as a changing culture. The left has been very successful at shifting culture away from the liberty-focused, hardworking culture of our forefathers to an attitude of dependence on government. Top down policy changes cannot correct cultural issues. Conservatives must focus on changing the culture of America from the grass roots as well.

No one can say for sure how long America will continue to struggle along under the weight of these four possibly insurmountable obstacles. It might take decades for them to take their toll on the country. We might follow in the footsteps of Europe’s social democracies with a generation or more of stagnation and decline.

Or, just the opposite, our core problems might never run their full course. Outside influences – from ISIS to Iran to China – might hasten our decline since weakness is an invitation to adversaries. As Lenin said, “Probe with a bayonet: if you meet steel, stop. If you meet mush, then push.”

Read the full article on Examiner.com

Save America: Take your family to church

Recent polls now show that almost three quarters of Americans believe the nation is on the wrong track. The reality is that regardless of whether Republicans win control of the Senate this year and the presidency in 2016, it will be very difficult to solve the problems facing America today. Many of the most serious issues facing the country stem from cultural changes that cannot be solved solely by changes to government policies. Americans who are serious about changing the direction of the country should begin by taking their families to church. To save America, it will take a moral revolution that can only come from God, not government.

Even though some polls show that church attendance is still strong in the US, ChurchLeaders.com reports that counts by denominations and local churches show that church attendance is down and still declining. Although about 40 percent of the population reports that they attend church, the real number is probably less than 20 percent and not keeping pace with population growth.

It is likely that the decline in church attendance can be connected with many of America’s social and economic ills. Movement away from traditional Judeo-Christian morality may be responsible for a change in social mores that has led to an expansion of government and a growth in entitlement spending.

While there is no hard data or studies establishing a causal relationship between church attendance and fundamental shifts in American society, it is easy to see a correlation between the two. The movement away from traditional religion has occurred at the same time as a sharp decline in marriage. According to Census data, the share of unmarried couples cohabiting has risen from one percent in 1960 to more than 11 percent today. At the same time, the marriage rate has declined from 90 percent in 1950 to 36 percent. Both men and women are delaying marriage until later in life.

Unsurprisingly, the decline of marriage has led to an increase in the share of children living in single-parent homes. Two-parent families have declined from almost 90 percent in 1960 to less than 70 percent today. Put another way, according to The Atlantic, at 31 percent of U.S. households, “single parents have more than tripled as a share of American households since 1960.”

The change is even pronounced in black families where more than two-thirds of children belong to single-parent families. Many children who do live in two-parent families are not with both biological parents. The trend is not limited to black families. Nationwide, one out of every three children live in homes where the biological father is absent.

Given the enormous costs of raising children, it should come as no surprise that with the growth of single parent families has come a similar growth in federal entitlement spending. As more children grow up within broken families, the federal government has borne an ever larger financial share of the burden of parenthood. Federal entitlement spending has grown from less than one percent to approximately 13 percent of GDP with no sign of slowing.

The effects of single-parent families on children are well documented. According to the National Father Initiative, growing up in single-parent families, particularly families where the father is absent, puts children at risk for a variety of negative outcomes. Such families are more likely to live in poverty due to the fact that a single mother often cannot work a full-time job and care for her children. Children of absent fathers are more at risk for emotional and behavioral problems, juvenile delinquency, drug and alcohol abuse, sexual activity and teen pregnancy, and even bad grades.

The problem of single-parent families is a vicious cycle. Statistics show that children who grow up in single-parent families are more likely to experience divorce themselves as well as being less likely to marry in the first place. In many cases, children of single parents grow up to head their own single-parent families, which in turn require more government help.

Due to the unintended consequences of entitlements, such programs would be problematic even if the federal government could afford them. In reality, entitlements are unaffordable. The Heritage Foundation points out that 61 percent of federal spending is on mandatory items such as entitlements. Further, 31 cents of every federal dollar spent is borrowed. This has led to a federal debt of more than $17 trillion. When unfunded liabilities such as Social Security and Medicare are included, the total debt comes to $127 trillion, according to Forbes.

The problem of the growth of government deficit spending on entitlements is not merely an economic issue. It is also a moral issue. Growth in government is largely a response to the decline of the family and entitlements fill the vacuum of money and stability in single-parent families. Because a government check cannot fully replace a missing mother or father, these entitlement payments make the problem worse in the end by making marriage and traditional families seem optional.

The destruction of the family causes other problems as well. The problem of out-of-wedlock pregnancy is undoubtedly related to the abortion issue as well. According to the Centers for Disease Control, more than 85 percent of women who abort their babies are unmarried. The Guttmacher Institute notes that 75 percent say that they cannot afford a child, a problem that is often associated with single-parent, single-income families. Half specifically cite their desire to not be a single parent or problems with their husband or partner. While the rate of abortions in the U.S. is declining somewhat, more than 1 million abortions still occur in the U.S. each year.

Another possible, but less conclusive, result of the destruction of the family is increased homosexuality. Accurate statistics on the rate of homosexuality are hard to find (due to small sample size and self selection), but the theory that homosexuality in some people is related to domineering mothers has been around for decades, such as a paper by Dr. Marvin Siegelman from 1974 and several books by Dr. Joseph Nicolosi, author of “A Parent’s Guide to Preventing Homosexuality.” While the left disputes this view, little is definitely known about the root causes of homosexuality.

Some psychologists and psychiatrists have advanced therapies based on these theories of environmental causes for homosexuality. In spite of being attacked by gay activists and leftists, there is evidence that these therapies can help some homosexuals. In some cases, liberals have sought bans against gay reparative therapy, even though such bans violate the freedom of speech of doctors and the freedom of choice of families. If homosexuality is a result of strong mother figures for some gays, then the rate of homosexuality should increase as the rate of single-parent families increases.

The negative effects of homosexuality are less disputed. Dr. Timothy Dailey of the Center for Marriage and Family Studies summarized the risks of homosexuality. These include an increased risk of suicide, domestic violence, and substance abuse in addition to greater risk for a variety of sexually transmitted diseases. Lesbians also have a higher risk for a variety of cancers.

Today, the United States resembles the Israel of the Bible in many ways. As Isaiah described, in spite of the blessings that God has bestowed upon America, the nation increasingly produces “bad fruit.”Americans increasingly revel in pleasure and immorality and our moral compasses are so distorted that we frequently “call evil good and good evil.” In America today, religion is being from the public square and people who follow the teachings of the Bible are increasingly in conflict with laws enforcing the new morality. Ancient Israel was destroyed by God’s judgment and some, such as Rabbi Jonathan Cahn, believe that America is already undergoing the early stages of judgment as well.

When viewed in context, it is apparent that a change in governmental policy is not sufficient to reverse the decline of the American family and the budget-busting entitlements that go along with it. What is needed is a national revival and a return to traditional family models.

The only way to reverse the trend of ever-increasing government entitlements is to reduce the need for those entitlements in the first place. By returning to a traditional family model where two parents share the responsibility for raising children, there will be less need for government intervention and support. Changes in policy without attacking the underlying problems will be doomed to failure.

The government cannot force Americans to return to traditional and time-proven methods of bearing and raising children, but a true revival and voluntary return to the Biblical teachings has the capability to change the course of American society and culture. Such a cultural shift will be necessary for the long term prosperity – and even survival – of the United States.

A revival has to start somewhere. If you want to save America, take your family to church. Teach your kids the value of the traditional family. Show them that when spouses fight, it doesn’t mean that the marriage has to end. If you love your children, try to make your marriage work. You can start this process by taking your family to church to learn about God’s forgiveness. You might save your country as well as your soul.

Read the full article on Examiner.com

USDA gun buy is symptom of too-large government but not tyranny

In recent years, a number of alarmist reports have detailed how various agencies of the federal government have planned to purchase large quantities of ammunition and weapons. The most recent such report, a solicitation for bids to provide .40 caliber submachine guns to the Department of Agriculture, was detailed in May. Many conspiracy theorists believe that the purchase orders are harbingers of the government’s intention to impose martial law and declare war on its own citizens.

The solicitation, posted on the FedBizOpps website on May 7, specifies that the weapons be equipped with “semi-automatic or 2 shot burts [sic] trigger group, Tritium night sights for front and rear, rails for attachment of flashlight (front under fore grip) and scope (top rear), stock-collapsilbe [sic] or folding, magazine - 30 rd. capacity, sling, light weight, and oversized trigger guard for gloved operation.” The posting is real and the website is a legitimate federal government website.

The previous reports of purchases of large quantities of ammunition by federal agencies as varied as the Postal Service, the Department of Education and Homeland Security, while real, have been thoroughly debunked as an indication of imminent tyranny by sites such as the conservative Breitbart.com as well the longtime debunker, Snopes. These sites point out that the conspiracy theorists underestimate the amount of ammunition required for currency and training. They also fail to account for the fact that the government contracts are multi-year purchases that specify an upper range of quantity. Ammunition, like other commodities, is purchased in bulk in order to obtain volume discounts.

An additional theory is that the government was attempting to corner the market on ammunition in order to facilitate de facto gun control. With ammunition in short supply, guns would be almost useless. Forbes found a different explanation. Record high purchases of firearms logically lead to record high purchases of ammunition. There is a shortage of ammunition because there are many new gun owners. Dean Weingarten, writing on TheTruthAboutGuns.com recently suggested that pent up demand for ammunition is being satisfied and that prices are already dropping.

Ammunition shortages are easily debunked, but why does the Department of Agriculture need submachine guns? To find out, Examiner spoke with Alison Decker, Assistant Counsel to the USDA Inspector General.

In a prepared statement, Ms. Decker said that the submachine guns were intended to replace older, semi-automatic weapons used by agents of the USDA Office of the Inspector General. The weapons are intended to be used by USDA OIG agents in conducting “hundreds of criminal investigations each year” into “criminal activities such as fraud in farm programs; significant thefts of Government property or funds; bribery and extortion; smuggling; and assaults and threats of violence against USDA employees.”

The USDA was authorized to investigate and prosecute criminal activity that affected USDA programs and activities by the Inspector General Act of 1978. According to Ms. Decker, the OIG’s law enforcement activities led to more than “2,000 indictments, 1,350 convictions, and over $460 million in monetary results” from fiscal year 2012 through March 2014.

There is no evidence that the firearms purchased by the USDA are part of a sinister plot to impose martial law or tyranny on the American people. In fact, the very idea seems to defy logic. If the federal government intended to impose martial law, there are already hundreds of thousands of combat-experienced, well-armed soldiers in the U.S. Army, Marine Corps, and National Guard. There are also thousands of armed federal agents already positioned throughout the country. It seems ludicrous to suggest that such a plot would hinge on equipping the agents of the USDA Office of the Inspector General with .40 caliber automatics.

While not a sign of imminent danger or martial law, the USDA gun procurement may be symptomatic of a too large federal government in which a myriad of federal agencies duplicate efforts. In 2011, the Wall St. Journal detailed how the sharp increase in the number of criminal laws and regulations had led to a surge in the number of federal law enforcement agents. By the Journal’s estimate, there are more than 138,000 armed federal agents from more than 70 agencies. Fox puts the number at high as 73.

The expansion of rulemaking and policing has led to more criminal prosecutions for trivial matters. Enforcement of rules that was once a civil matter can now bring a raid by a squad of federal agents armed with assault rifles. This was the case for Morgan Mok in 2008 when agents of NOAA and the Fish and Wildlife Service raided her Miami business looking for illegal coral. According to the WSJ, Mok had obtained the coral legally, but paid a $500 fine for failing to complete the paperwork properly. A similar instance from 2011 involved a raid on Gibson Guitar by armed Fish and Wildlife agents searching for illegal wood. No criminal charges were filed, but the company agreed to pay $350,000 in penalties reported CNS News. In 2012, Fox News reported that armed EPA agents in body armor descended on an Alaska town looking for violations of the Clean Water Act.

The USDA OIG website details a number of recent investigations. The majority of these investigations seem to be the equivalent of “white collar” crimes such as crop insurance fraud, SNAP (food stamp) fraud, misbranding meat or the sale of property that was collateral for USDA loans. Some investigations, such as the attempted theft of a truckload of meat, could have legitimately required armed officers.

A question to consider is whether the number of crimes that require armed intervention is enough to justify the USDA’s own armed agents. In many instances, the USDA could be backed up by local law enforcement or other armed federal agents such as the FBI or US Marshals. A Freedom of Information Act request was submitted to USDA for more information on OIG investigations and use of force, but a reply has not yet been received.

The core problem is that the federal government is too large, not that it is about to implement martial law. The answer is reform, not revolution. Law enforcement officers and military personnel are not the enemy.

Read the full article on Atlanta Conservative Examiner

Voters oppose further cuts to military spending

A new Rasmussen poll indicates that a majority of Americans feel that United States military spending is either just right or not enough. The poll, released on Dec. 1, found that 64 percent of likely voters approve of the current level of military spending or would like to see it increased.

The poll comes as the Obama Administration touts a new deal that would delay the Iranian nuclear program for six months in exchange for relief from international sanctions. Another Rasmussen poll from last week found that voters were split on the Iran deal. Forty-one percent favor the deal while 43 percent are opposed.

American foreign policy is also being challenged in the Far East. After China declared an air defense identification zone (ADIZ) over the disputed Japanese Senkaku Islands. President Obama sent a flight of U.S. Air Force B-52 Stratofortresses to challenge what Stephanie Kleine-Ahlbrandt, director of Asia-Pacific programs at the U.S. Institute of Peace, called “a bolder foreign policy in light of an anticipated U.S. decline” in CNN.

In light of the recent foreign policy news, the Rasmussen poll found that only 29 percent say the U.S. spends too much money on defense. Twenty-seven percent say that the U.S. currently spends the right amount on defense. A plurality, 37 percent, say that the U.S. does not spend enough on defense and national security in spite of the fact that the federal defense budget spends more than the next 10 countries combined.

The percentage of Americans supporting the current level of military spending has increased sharply since a February 2013 Gallup poll. The poll of adults found that 36 percent felt that military spending was too high and 35 percent found it about right. Only 26 percent thought that military spending was too low. The trend toward more support for military spending was already underway, however.

Similarly, an ABC News/Washington Post poll from March 2013 found that American adults supported federal budget cuts by a two-to-one margin, but that a nearly identical margin opposed cuts to the military budget. The poll specifically addressed the sequester’s five percent cut to overall spending and the eight percent cut to military spending.

The deal between Republicans and Democrats that ended October’s partial government shutdown authorized current spending levels through January 15, 2014. As budget negotiations heat up in the new year, it is likely that defense spending will again be an issue. MSNBC’s Timothy Noah points out that the next round of sequester budget cuts will come entirely from the military budget. If the president tries to force the military budget cuts to take effect or exchange military funding for tax increases, it may put him further against popular opinion.

 

Originally published on Elections Examiner

FAA announces list of sequester control tower closings

Today the Federal Aviation Administration announced the list of air traffic control towers to be closed as the agency implements its sequestration budget cuts. The March 22 press release notes that the FAA originally planned to close 189 towers, but reduced the number to 149 in the final plan.

The reduction in the number of towers to close was due in part to the decision that keeping some towers open was in the national interest. Twenty-four federal contract towers that are staffed by private contractors that were slated to close will remain open. Additionally, 16 contract towers that are part of a cost sharing program will remain open because Congress appropriates their operating funds directly. These towers will have their funds reduced by five percent, but this will not force their closure.

The list of tower closures (which can be viewed here) is made up primarily of general aviation reliever airports so airline travel will be minimally affected by the closures. There are several towers in secondary airline markets that slated to be closed, however. Among these are Columbia, S.C, Concord, N.H., Santa Fe, N.M., and Pocatello, Idaho.

Several towers at Georgia airports are among those on the closure list as well. Two Atlanta-area airports, Cobb County-McCollum Field and Gwinnett County – Briscoe Field, will lose their control towers. Additionally, three other towers around the state, Southwest Georgia Regional in Albany, Middle Georgia Regional in Macon, and Athens – Ben Epps will close. The tower at Fulton County – Brown Field in Atlanta was slated to close, but will remain open.

The fact that control towers are being closed does not mean that airline flights will cease or that the airport itself will close. Instead, it means that the airport will become a “nontowered” airport where pilots revert to “see-and-avoid” procedures and enter the flow of traffic themselves rather than having an air traffic controller regulate the flow of takeoffs and landings.

While pilots fly from nontowered airports, there might be slight delays to obtain a clearance to take off and enter the enroute system. Tower closures might result in radar gaps around these airports that require controllers to leave more space between aircraft. The absence of tower controllers might also mean that weather minimums for instrument approaches at some airports increase due to the lack of weather observers. This could mean delays or diversion of flights during periods of bad weather.

Many of the towers that will be closed were already operating on a part time basis. Control towers at smaller airports are often open only during the day or at peak hours.

In addition to the list of towers that will be closed, the FAA also published a list of contract towers that will remain open as well as list of contract cost share towers that will remain open.

Originally published on Examiner.com:
http://www.examiner.com/article/faa-announces-list-of-control-towers-to-be-closed?cid=db_articles&no_cache=1364055688

Comparing Obama and Bush on debt and spending

A common liberal answer to conservative complaints about the size of government and the federal debt is that George W. Bush also grew government and ran deficits. Rather than taking these claims at face value, conservatives should present liberals with counterarguments that delve deeper into the issues at hand.

First, examine the details of the growth of government under George W. Bush. According to the Office of Personnel Management, in 2000 there were 4,129,000 federal workers. By 2008, there were 4,206,000 federal workers, a total increase of 77,000 employees. Executive branch employees increased by 53,000 and military personnel increased by 24,000.

Much of this increase in the federal workforce is explained by the fact that the nation went to war on George W. Bush’s watch. Bipartisan votes in congress authorized the wars in Afghanistan and Iraq after the United States was attacked on September 11, 2001. The increase in military personnel was needed to fight these wars.

The jump in executive branch employees is also a result of the wars against terrorists. The increase is almost totally accounted for by the creation of the Department of Homeland Security. According to CNN, the Transportation Security Administration, which is part of DHS, employs approximately 60,000 federal workers. The TSA employs screeners, air marshals, inspectors, explosives detection teams, and, of course, bureaucrats.

For Obama’s part, federal employment also increased from 2008 through 2011, the last year for which statistics were available. In 2011, there were 4,403,000 federal workers, an increase of 197,000 from 2008. The 2011 total was slightly lower than 2010, due to the inclusion of temporary census workers in 2010. Under Obama, executive branch employees increased by 64,000 and uniformed military personnel increased by 133,000.

With respect to spending, President Bush inherited a surplus according to historical data from the White House Office of Management and Budget. There was a federal surplus of $128 billion in 2001. The recession and the new war combined to create a $158 billion deficit in 2002 as revenues fell and spending increased.

During the Bush Administration, total outlays increased every year from $1.8 trillion in 2001 to $2.9 trillion in 2008. The average deficit during the Bush years was $250 billion. As a percentage of GDP, the average deficit was two percent. President Bush’s largest deficit was $458 billion in 2008 when the financial crisis led to the creation of the Troubled Asset Relief Program and several corporate bailouts.

During President Obama’s first term, federal outlays increased from $3.5 trillion in 2009 to $3.6 trillion in 2011. The estimated total outlays for 2012 are estimated to be $3.8 trillion. In Obama’s first year, the deficit increased by almost a trillion dollars from 2008. Obama has not had a single year in which the deficit was less than a trillion dollars. Obama’s average deficit was $1.3 trillion during his first three years. This translates into an average deficit that is 9.2 percent of GDP.

Under President Obama, spending dramatically increased at the same time that tax revenues dropped sharply due to the Great Recession. By 2012, revenues were almost recovered to pre-2008 levels, but spending had risen even faster. Even three years in to the recovery, deficit levels remain above eight percent of GDP.

Some liberals might prefer to use 2009 numbers rather than 2008, but that would let Obama escape responsibility for the stimulus spending that he initiated. In reality, President Obama’s “emergency” stimulus spending never went away and the increased spending levels have now become permanent.

It is true that Bush left office in 2009, but he served less than a month. President Bush submitted the proposed budget for the 2009 fiscal year to Congress, but it was President Obama who signed it into law. In either case, the average deficit under Obama is more than four times greater than that of President Bush.

Both presidents increased the national debt according to statistical data from the U.S. Treasury. On January 20, 2001 when President Bush took office, the total national debt stood at $5.7 trillion. Eight years later on January 20, 2009 the debt had risen to $10.6 trillion.

During President Obama’s first term the debt increased to $16.4 trillion on January 20, 2013. This means that under Obama, the debt had increased by $5.8 trillion in four years as opposed to President Bush’s increase of $4.9 trillion over eight years.

In the final analysis, both presidents grew government and spent and borrowed far too much. President Obama’s spending and borrowing is in a league by itself, however. Obama is the only president in U.S. history to preside over trillion dollar deficits and one has occurred each year of his presidency.

The only other period in American history in which spending levels matched those under Obama was when the country mobilized to fight the Axis during World War II. In the 1940s, government spending decreased at the end of the war. So far President Obama has shown no signs of ever slowing his spending.

Originally published on Examiner.com:

http://www.examiner.com/article/obama-v-bush-on-spending-debt-and-growth-of-government?cid=db_articles

Armed pilots provide roadmap for securing schools

When, in the wake of the Sandy Hook massacre, National Rifle Association President Wayne LaPierre called for armed security guards in schools, he faced widespread criticism from liberals who believe that fewer guns, not more, are the answer to the problem of mass killings. On the other side of the political spectrum, some conservatives argued that the cost of placing police officers in every school across the nation was too costly for a federal government that is already running trillion dollar deficits each year.

The concept of armed guards at schools was proven on Jan. 31, 2013 when an armed officer stopped a shooting at Price Middle School in Atlanta. A student had smuggled a gun past metal detectors and opened fire in the courtyard of the school, wounding a 14-year-old student in the neck before the officer was able to get the gun away from him according to CBS News.

Even though armed guards are effective, they are also prohibitively expensive for many school districts. According to Craig Steckler, president of the International Association of Chiefs of Police, as quoted in the Wall Street Journal, the average salary of a police officer is $55,000. There are 98,817 public schools in the United States. According to the Department of Education, about 25 percent of these already have armed security officers on campus at least once per week. The cost for providing officers for the remaining 74,113 schools would be more than $4 trillion. In spite of the recent high profile school shootings, fewer than two percent of all youth homicides occur at or on the way to school.

The school protection dilemma is analogous to the problem of protecting airline flights in the wake of the September 11 attacks. One proposal was to put Federal Air Marshals on all flights, but with tens of thousands of airline flights each day the plan was prohibitively expensive. Training enough air marshals to guard these flights would also have taken years.

An alternative solution was to create the Federal Flight Deck Officer program. This program took volunteer airline pilots and deputized them as federal agents to protect their airplanes. The volunteers were issued pistols and then trained to use them effectively. The volunteers received no federal salary or extra pay from their airlines. Instead they use vacation time to travel at their own expense to the federal training center where FFDO training is conducted. They even paid for the training themselves.

The number of FFDOs is secret, but since the program’s inception in 2003, there have been only two public incidents involving FFDOs who caused safety issues with their guns. In 2011, NBC News reported that a passenger mistakenly picked up a bag containing a JetBlue pilot’s gun. More seriously, in 2008, a US Airways pilot accidentally fired his gun in flight according to Reuters. The aircraft landed safely and no one was injured.

The FFDO program has been spectacularly successful in terms of safety, cost and fulfilling the mission of protecting airline flights. Federal Air Marshals, full time agents, are used as well, but are deployed on flights deemed to be at high risk for attack.

A similar approach could be used in schools to allow volunteer teachers and school employees to become “Federal Classroom Officers.” As with FFDOs, the teachers would be federal officers and would be exempt from local gun ordinances that prohibit gun ownership. As with other law enforcement officers, they would also be allowed to carry their guns in the “gun free” school zones.

Teachers would not be forced to carry a weapon. The program would be for volunteers only. Teachers who do not like guns would be free to choose to remain defenseless. Those who prefer to be able to defend themselves and their students would be issued a weapon and trained to use it safely. They would be required to demonstrate competency with their gun at regular intervals to maintain proficiency.

Teachers who choose not to take part in the program would still benefit from it. First, they would be the direct recipient of protection from the Federal Classroom Officers in the event of a school shooting or terrorist attack. Second, the mere presence of Federal Classroom Officers might well deter many prospective murderers from attacking the school. In the past, many mass murders have taken in place in areas that were deemed to be “gun free.”

There is no doubt that many will oppose the idea of bringing guns into schools. Many of the same arguments that will arise were presented against the idea of arming pilots 10 years ago and have been refuted by the success of the FFDO program.

In reality, guns are already present in our schools. Thousands of schools are already patrolled by armed officers. Federal Classroom Officers would have the same training in firearms that these school security officers receive. All too often others, people like Adam Lanza, bring other guns to school when police officers are not present. In the end, that is why teachers should be given the option to arm themselves. There is no foolproof way to keep bad guys with guns out schools, but we can give our teachers and students a fighting chance.

 

Originally published on Examiner:

http://www.examiner.com/article/experience-with-armed-pilots-can-help-secure-schools

White House treatment of Arizona is election issue

In the wake of this week’s Supreme Court decision striking down parts of the controversial Arizona immigration law, the White House announced President Obama’s decision to unilaterally cancel agreements between the federal government and seven Arizona law enforcement agencies. These “287 (g)” agreements had allowed state officials to request that federal officials pick up illegal immigrants held in state and local jails. Previously, the federal government had also allowed state officials to ask federal agencies to check the immigration status of people who were arrested or stopped for traffic violations.

The Supreme Court’s ruling upheld this cooperation between state and federal agencies, but, according to the Daily Caller, administration officials say that Arizona will not be allowed to transfer illegal aliens to federal custody unless they are felons or are known to have recently crossed the border. The practical effect of the White House announcement is to invalidate Arizona’s ability to check immigration status.

The Supreme Court ruling largely invoked the pre-eminence of federal law, but President Obama is choosing not to enforce those same laws. Essentially, President Obama is ignoring federal immigration law and is preventing the states from taking action to protect their own borders and citizens.

The move is apparently an attempt to punish Arizona for enacting its own immigration law against the Obama Administration’s wishes. Several other states have enacted similar legislation that allows state and local police to check the immigration status of suspects and detain illegal aliens. Georgia passed an immigration bill modeled on the Arizona law in 2011.

The move by the White House, together with its announcement last week that it would not deport illegal aliens who entered the U.S. as children, is an obvious attempt to solidify Obama’s support in the Latino community. The president might be disappointed in the results. A recent Gallup poll shows that only 12 percent of Hispanic registered voters view immigration as the most important issue. Healthcare, unemployment, the economy and the gap between rich and poor all rank higher.

The president’s unilateral policy also states that the Department of Homeland Security would issue work visas to the affected young people. President Obama lacks the authority under the Constitution to issue these visas since only Congress is granted the power to “regulate commerce with foreign nations” and “establish a uniform rule of naturalization.” In any case, since the policy was established by an executive order and not by act of Congress, it is unlikely to last long past the election.

President Obama’s decision not to take border security seriously is a gamble with national security. According to Customs and Border Patrol data obtained by CNS News, agents apprehended 255 illegal aliens from “special interest countries” along the southwestern border in 2011. These included people from Iran, Iraq, Afghanistan, Pakistan, Saudi Arabia, Syria, Somalia and Sudan, all countries “that have shown a tendency to promote, produce, or protect terrorist organizations or their members” according to the Department of Homeland Security.

Obama’s moves may cost him support in other areas. A Pew poll from June 2012 showed that 70 percent of Americans believe that border security should be the first priority or equal in importance to a pathway to citizenship for illegals. This may explain why the president’s approval index by Rasmussen has dropped by six points over the past week.

Aside from the immigration question, the unilateral move is another in a series of executive power grabs by President Obama. His decision not to enforce constitutional laws that were duly passed by Congress may not play well with Americans who value the objective rule of law over the subjective whims of whoever happens to reside in the Oval Office.

In traditional American government, Congress, the legislative branch, makes the laws and the president, the executive branch, enforces them. Short of a judicial ruling that forces him to carry out the duties of his office, Congress cannot make President Obama do his job. Generally, if a president does not like the law as it is written, he works with his allies in Congress to pass new laws, not simply announce that the law will no longer be enforced.

The ultimate control over the executive branch lies in the hands of the electorate. If voters believe that President Obama is not doing his duty as president, they may well decide that his contract does not deserve to be renewed for another four years.

Read this article on Examiner.com:

http://www.examiner.com/article/obama-s-non-enforcement-of-immigration-law-is-election-issue

Obama vs. Bush

In the campaign for his re-election, President Obama often points to the fact that the country was in a deep recession when he took office. Obama’s reasoning is that the country was in such a dreadful state in 2008 that it is taking much longer than he originally thought to restore it to prosperity.

It can be instructive to look at the results of the policies of both President Bush and President Obama and compare them side by side. One common criticism of President Obama is his administration’s spending habits. When he recently claimed that “Federal spending since I took office has risen at the slowest pace of any president in almost 60 years,” CNS News and many other outlets fact checked the claim and found it to be untrue. In fact, a chart from USgovernmentspending.com shows that, as a percentage of GDP, President Obama’s spending is at a higher level than at any other time in our history except World War II. While spending did increase slowly under most of George W. Bush’s tenure, it was only in 2008, when TARP was enacted, that it jumped sharply.

A closer look shows that, according to figures from the Tax Policy Center, President Bush ran a deficit for all but the first year of his administration. As a percentage of GDP, Bush’s average deficit was about 2 percent. In dollars, Bush averaged deficits of about $251 billion per year. In contrast, in President Obama’s three years, he has averaged deficits of more than nine percent. In each year of his administration, the federal deficit has been more than $1 trillion. Obama’s average deficit in dollars was $1.33 trillion.

When viewing the data from the Tax Policy Center, it is easy to see why deficits increased so rapidly under President Obama. Even as President Obama was increasing federal spending with his various attempts at stimulus, tax revenues were falling due to the recession. Since spending increased at the same time that the government was taking in less money, the difference had to be made up in borrowing.

Borrowing leads to an increasing federal debt. It is true that the debt increased dramatically under George W. Bush. On January 1, 2001, just before President Bush took office, the federal debt stood at $5.6 trillion according to U.S. Treasury figures. When he left office on January 20, 2009, the debt stood at $10.6 trillion, an increase of almost five trillion dollars. As of June 1, 2012, the federal debt was at $15.7 trillion, an increase of $5.1 trillion. The federal debt has increased by as much under President Obama in three years as it did under Bush in eight. CNS News noted in October 2011 that President Obama had added more debt than all other presidents from George Washington to George Herbert Walker Bush.

The difference is even more stark if the election of 2006 is considered to be the dividing line. In 2006, Democrats took control of both houses of Congress. At the beginning of 2007, as the new Democrats took office, the debt was at $8.6 trillion, which means that three trillion dollars was amassed by President Bush and congressional Republicans. It also means that a staggering $7.1 trillion was borrowed by the Democrats from 2007 through 2012. A chart from USgovernmentspending.com illustrates how radically government spending increased after 2006, when Senator Harry Reid and Rep. Nancy Pelosi assumed control of Congress.

Democrats argue that deficit spending was needed to combat the 2008 recession, but what did taxpayers get for their money? According to the Bureau of Labor Statistics, unemployment averaged 5.26 percent during the Bush years. The average during the Obama years was 9.26 percent.

Even more telling is the fact that the Civilian Labor Force Participation Rate, the percentage of Americans working, has declined from 67.2 percent in January 2001 to 65.7 in January 2009 and to 63.8 percent in May 2012. According to Multpl.com, the U.S. population increased in each of those years, from 285 million in 2001 to 306 million in 2009. The U.S. population now stands at 313 million according to the U.S. Census. This means that fewer total Americans are working now than when President Obama took office even though the population has increased by 7 million. When President Bush left office 20.1 million Americans were working. Today only 19.9 million are in spite of a population growth of seven million.

Even though the Great Recession officially ended in June 2009, five months into Obama’s presidency and three years ago, the economy and the job markets have not recovered. By many measures, the economy is worse today than it was three years ago. The Federal Reserve announced last week that American wealth had decreased by 40 percent between 2007 and 2011. Home prices, which crashed in 2008, have not recovered and continue to decline in many markets. The Wall St. Journal reports that economists are “increasingly pessimistic” and more are predicting that the stagnant recovery will turn into another recession.

Foreign policy was an area where President Bush faced intense criticism. The 9/11 attacks, along with the wars in Iraq and Afghanistan, were the defining events of his time in office. President Obama campaigned against the wars and Bush policies such as the detention of terrorists at Guantanamo Bay. Three years later, the prison there remains open. Many leftists decried Bush’s “illegal wars” in Iraq and Afghanistan even though he sought and obtained congressional approval. President Obama did not notify Congress or seek approval before intervening in Libya.

In fact, Obama has quietly adopted a defense policy that is similar to that of President Bush. Perhaps the biggest difference is George W. Bush’s policy of capturing and interrogating terrorists where Obama primarily targets them from afar with drones. Obama’s personal involvement in targeting terrorists is reminiscent of President Lyndon Johnson’s personal involvement in selecting targets – and placing others off limits - during the Vietnam War. Obama did remove all but a token force of U.S. troops from Iraq, but American forces remain in Afghanistan. Perhaps this, along with his reluctance to embrace uprisings in Muslim countries, is why many Arab countries have an even more negative view of the United States under Obama than they did under President Bush according to Pew Global.

With respect to Iran, President Obama’s record is mixed. Obama resisted toughening sanctions on Iran until he was mandated by Congress. Obama also continued Bush’s program of cyber attacks against the Iranian nuclear program, but leaks from his administration detailing these and other intelligence matters have hurt U.S. interests. Breaches of security from the administration may have led to the life sentence for treason of Shakil Afridi, a doctor in Pakistan who helped the CIA determine bin Laden’s location.

Perhaps the greatest missed opportunity of the Obama era was the president’s failure to capitalize on the 2009 Green Revolution uprising in Iran. A secret memo obtained by the Washington Examiner reveals that leaders of the dissidents had requested American help in toppling the regime. President Obama failed to act and, as a result, the Iranian government is growing ever closer to becoming a nuclear power.

President Obama’s greatest triumph, foreign policy or domestic, was undoubtedly the killing of Osama bin Laden, yet if Obama had his way the programs that generated much of the intelligence that led to bin Laden’s whereabouts would have been closed down years ago. As Real Clear Politics explains, the enhanced interrogation techniques used during the Bush Administration uncovered much of the intelligence that led to bin Laden. Obama should get credit for issuing the order to attack, but President Bush should also get credit for making the attack possible.

Liberals charge that Bush’s defense and war spending is what led to the massive federal debt. A chart from USgovernmentspending.com does show that defense spending in total dollars increased under President Bush, but it has also continued to increase under President Obama. However, between 2002 and 2008, defense spending as a percentage of GDP remained between four and five percent under President Bush. Total defense dollars and defense spending as a percentage of GDP both increased under President Obama. According to the Center on Budget and Policy Priorities, defense spending makes up 20 percent of the federal budget and is dwarfed by Social Security, Medicare, other safety net programs and interest on the federal debt, which together account for 60 percent of the budget.

As Americans head to the polls this November, President Obama is unlikely to ask, “Are you better off now than you were four years ago?” as President Reagan famously did in 1984. Three years after the official end of the Great Recession, President Obama and his policies deserve the blame for the lack of recovery. Obama has yet to offer any new tactic that has not been tried previously without success. On foreign policy, Obama’s position has evolved, but he has displayed little desire to take strong and decisive action, resulting in many missed opportunities.

Read this article on Examiner.com:

The end of America? Tell us what you think

A famous poem written by T.S. Eliot includes the line, “This is the way the world ends, not with a bang but with a whimper.” Years later, this may have inspired Soviet premier Nikita Khrushchev (or whoever wrote the quote that is often attributed to him) when he said, “We cannot expect Americans to jump from capitalism to Communism, b

ut we can assist their elected leaders in giving Americans small doses of socialism until they suddenly awake to find they have Communism.” Whether Khrushchev said it or not, the sentiment is proving accurate.

At dinner recently with a coworker, the discussion turned to the upcoming election. My friend stated his belief that President Obama would be re-elected and that the second Obama term would seal the fate of the United States, not with the bang of a nuclear holocaust, but with the whimper of an economy that is doomed to collapse under the weight of a bloated federal debt that can no longer be financed or paid off without painful and draconian cuts that are not politically possible. In short, my friend believes that the United States is about to experience a Greek economic crisis.

He justifies his belief by noting that almost half of all Americans pay no income taxes. Many of these people who pay no taxes get large tax “refunds” nonetheless. Further, the percentage of Americans who are receiving government benefits is at an all-time high. He believes that the vast majority of these people will vote to return President Obama to the White House in order to keep the gravy train rolling.

My own opinion differs slightly. I agree that the current economic situation is dire. However, I believe that many of the Americans who are not paying taxes and who are getting government checks are doing so because they are unemployed and unable to find a job. Many of these people might be persuaded to vote for a Republican challenger with a pro-growth platform that will help the economy recover. I believe that my opinion is backed up by the Republican landslide of 2010 and early indications that the Republicans may well take control of the senate in 2012. Polls also show that Americans want competition and free markets rather than more federal regulation.

Getting the Democrats out of Washington is only half the battle. The other half of the battle is more difficult. Once the free-spending Democrats have been shown the door, the Republicans have to maintain discipline and avoid a return to their own free-spending ways. In this, recent events offer some encouragement.

Most importantly, Republicans in the House of Representatives have held the line on spending and taxes since the election of 2010. In 2011, the GOP house members held spending almost level in spite of the vocal objections of President Obama and the Democrat-led senate. This was the first time in decades that federal spending had not increased sharply, but instead remained almost level.

Republican successes at the state level are also encouraging. Republican governors in Wisconsin and Indiana have rolled back the power of unions. Wisconsin governor Scott Walker was vilified for breaking the teacher’s union’s power of collective bargaining, but the legislation arguably put Wisconsin on the road to economic recovery. In Indiana, Governor Mitch Daniels passed right-to-work legislation that gives employees the freedom to choose whether to become a union member or not. In contrast, deep blue states like Michigan, California, and New York are basket cases.

According to the Washington Post, at 85 percent, the United States has the world’s seventh highest debt-to-GDP ratio. Under Barack Obama’s borrow-and-spend policies, this ratio is increasing. This puts the U.S. close behind such nations as Portugal (101 percent), Italy (120 percent), and Greece (168 percent). The number one debtor nation with respect to GDP is Japan at 233 percent. Where the U.S. has some advantages over the European countries, such as the ability to manipulate its currency and the size of its economy, there are also disadvantages as well: There is no country big enough to bail out the U.S. President Obama pays lip service to deficit reduction, but his 2012 budget adds $8 billion to the deficit according to MSNBC.

My friend was under the impression that no nation has ever recovered from debt-to-GDP ratio of 100 percent, but this appears not to be true. According to Global Financial Data, several nations including Australia and Canada have paid down extremely high levels of government debt in the past. The process of paying down these high debt levels is long and politically difficult, often taking decades. According to the National Bureau of Economic Research, the consequences of not paying the debt down could mean be continued economic stagnation, high unemployment, and slow economic growth, especially as the ratio goes above 90 percent.

It could also be as bad as the hyperinflation as experienced by Germany in the 1920s when the Weimar Republic used their version of “quantitative easing” to print money to pay reparations from WWI. PBS tells how the price of coffee could almost double at a restaurant between ordering and getting the bill. In 1923, one dollar was equal to a trillion marks. Even a milder inflation such as the U.S. experienced in the 1970s led to a dismal and stagnant decade.

Holding the line on federal spending is not enough. Since the federal government borrows almost 40 cents of every dollar it spends, heavy cuts are needed in order to actually reduce the federal deficit and debt. With Occupiers already rioting in some cities and Democrats using scare tactics over Social Security and Medicare reform, cutting entitlement spending is sure to be difficult. A large and looming question is whether Republicans in Washington and Americans in voting booths around the country have the intestinal fortitude to make the needed cuts and stand by them.

If not, then it is only a matter of time until the collapse of our economy. American will end, not with a bang at the hands of the likes of Osama bin Laden or the Soviet Union, but with a whimper of government paralysis, inflation, and economic stagnation. The United States of America may continue to exist as a country, but it will bear little resemblance to the America that we know.

My belief is that the Republicans will win big this November, but on the long-term question, I rate their chances at about 50-50.

What do you think? Let me know by leaving a comment below.

Originally published on Examiner.com:

http://www.examiner.com/conservative-in-atlanta/the-end-of-america-tell-us-what-you-think

Social Security and the debt limit

Ida May Fuller (Public Domain)

President Obama’s warning that a failure to increase the debt limit may mean that there is not enough money in the federal treasury to send out Social Security checks should put a stake through the heart of the myth that there is a Social Security trust fund. In an interview with CBS News, President Obama said, “I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it.”

For decades now, Social Security has been sold to the American public as a retirement plan. Many Americans believe that their Social Security taxes go into an account that is held for them until they retire. In reality, Social Security is a pay-as-you-go program in which current tax receipts are used to pay the benefits for current retirees.







Social Security was enacted into law in 1935. According to the Social Security Administration, the first Social Security beneficiary was Ida May Fuller of Ludlow, Vt. Fuller began collecting benefits in 1939 after paying into Social Security for less than three years. Her contributions (taxes) totaled $24.75. Fuller lived until 1975 and collected a total of $22,888.92 in Social Security benefits. This is equivalent to a return on her “investment” of over 900 percent. Current Social Security returns are approximately two percent.







If Social Security were a true retirement plan, Fuller’s benefits would never have lasted for 36 years. Fuller’s benefits were being paid by the Social Security taxes of current workers rather than Fuller’s own contributions and interest.







According to the Social Security Administration’s website, the 1935 Social Security Act established a trust fund for Social Security benefits. On one part of its website, the SSA calls it a myth that the Social Security funds have been placed into the general fund of the federal government. However, on another page, the SSA admits that Social Security taxes are invested in securities and that “the cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.”




In other words, money in the Social Security Trust Fund is given to the general fund of the federal government in exchange for “special-issue” securities. The trust fund is filled only with s to repay the funds borrowed by the federal government. Thus far, the federal government has always repaid the funds with interest, but if the federal government is in default then it might not be able to do so.







The AARP notes that fourteen percent of Georgians, primarily seniors, receive Social Security benefits. For more than thirty percent of these seniors, Social Security is the only source of income.







If the Social Security Trust Fund were a true retirement plan in the form of a privately administered investment plan, it would be required to maintain a certain ratio of liquidity to invested assets. Instead, Social Security relies on current tax receipts and the repayment of funds borrowed from the trust fund by the federal government. Since current taxes cannot pay current benefits, if the government cannot repay its borrowed funds (with more borrowing), then it might well not be able to pay benefits to current retirees.







It is likely that Congress and the president will come to an agreement that will continue to fund the federal government, but taxpayers should remember the summer of 2011 as the time when the myth of the financial security of Social Security was deflated.







Continue reading on Examiner.com Social Security and the Debt Limit - Atlanta Conservative
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How a government shutdown might affect you

The government may shut down Friday night. (Diliff/Wikimedia Commons)

As the debate over control of the federal budget speeds the government toward a shutdown, many Georgians are likely wondering what effect a shutdown would have on local services provided by the federal government.  The federal government pervades American life at all levels from mail delivery by the postal service to government checks for Social Security recipients and, most obviously and importantly, protection by the U.S. military and federal law enforcement agencies. 

A government shutdown is not a disaster and is not unprecedented.  In fact, there have been five government shutdowns since 1981.  The most famous was the last series of shutdowns in 1995 and 1996 when President Bill Clinton sparred with Speaker of the House and Georgia native Newt Gingrich.  The Republicans actually won a balanced-budget agreement in the confrontation, but suffered politically.  The balanced budget of the late 1990s is remembered as Clinton’s achievement and helped him to win re-election.

The debate is similar to that of the 1990s.  The current problem stems from the fact that Democrats did not pass a federal budget for 2011 while they held large majorities in both houses of Congress prior to the last elections.  According to federal law, a budget should have been passed by October 1 of last year.  Instead, Congress has passed a series of temporary spending measures.

According to the Wall St. Journal, the Obama Administration will have borrowed approximately $3.7 trillion in its first three years, “more than the entire accumulated national debt for the first 225 years of U.S. history.”  The Democratic budget proposal cuts a meager $6.5 billion from the federal budget for 2011.  The Republicans, responding to voter anger over increasing deficits and spending, want $61 billion in cuts for 2011 and are ultimately eyeing $6.2 trillion in cuts over ten years as a part of Paul Ryan’s “Path to Prosperity.”

If the two parties cannot reach agreement and pass a budget, parts of the federal government will cease operations until an agreement is reached.  Essential services of the government, as well as parts of the government that are funded by other means, such as user fees, would remain in operation.  Some of the areas that are deemed essential services are military operations, border security and air traffic control.  Federal courts and the justice system would also remain open.  These areas of government were unaffected by previous shutdowns.

Mail deliveries by the Post Office would likely continue.  The Post Office gets some federal funds, but much of its operation is funded by the sale of stamps and delivery fees on packages.  The Federal Reserve would also remain open.

Recipients of entitlement checks such as Social Security and Welfare can also rest easy.  The government would continue to send out checks to existing recipients, but applications for new benefits would not be processed.  Medicare would also continue to be funded.

The main affect of the shutdown would likely be on administrative workers.  In addition to entitlement applications, other applications, such as those for firearms and explosive permits from the BATF or visas and passports from the State Department, would not be processed.  In the past, health care for veterans and clinical trials at the National Institutes of Health have also been delayed, along with work on bankruptcy and delinquent child-support cases.  Tracking of diseases by the CDC, headquartered in Atlanta, might also be interrupted.  Processing of farm credit, small business loans and government-backed mortgages would also cease.  Toxic waste cleanup at EPA Superfund sites was also stopped in previous shutdowns.  It is also possible that some tax refunds would be delayed, but audits would also be suspended.

Georgia’s many national parks and historic sites might well be affected since admission is free.  Georgia has eleven national parks that would almost certainly be closed in a government shutdown.  National museums such as the Smithsonian Institute in Washington, D.C. would also close.  Of course, Georgia’s state parks and historic sites would remain unaffected.

Perhaps most disturbing is the possibility that soldiers and military retirees would not be paid during a government shutdown.  Military personnel would continue to accrue pay, but may not receive pay checks until a new budget is passed.

Ironically, a government shutdown will probably not save the government money.  Government shutdowns actually cost more than normal operations because the government loses revenue when it is not in operation.  Current estimates are that a shutdown might cost taxpayers more than $100 million per day.  Depending on the length of the shutdown and the success of the Republicans at getting their desired cuts, taxpayers might end up saving money with a short shutdown rather than having billions more dollars in deficit spending enacted into law under the Democratic plan.

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