Americanly Yours

I have written previously about a bill in Congress to audit the Federal Reserve.

There are currently 280 sponsors and cosponsors of this bill in the House of Representatives.  This is enough to pass the bill with a substantial majority and only 11 supporters short of a veto-proof majority!

Remember, this bill is about transparency.  It is about letting the American people know where trillions of their dollars went.  The Federal Reserve is a private corporation which controls our nation’s money supply and interest rates.  It has been around since 1913 and has never been audited.

On top of that, the Federal Reserve’s Chairman, Ben Bernanke, doesnt seem to know whats going on in his own shop.  When asked by Democratic Congressman Alan Grayson which foreign banks received over $500,000,000,000 [$500 billion], Bernanke DID NOT KNOW THE ANSWER.  Watch:

We have just started to step up efforts in the Senate.  There are currently 21 sponsors and cosponsors of this bill in the Senate.  On top on this, Senator (and former hall of fame pitcher) Jim Bunning has come out in support of this bill, but has not sponsored it as of today.

I have been leading a campaign to bombard two Senators each day (one Democrat and one Republican) with phone calls in support of this measure.  Hundreds of phone calls are being made daily.  This really is a grassroots effort.  Those who follow me on Facebook are probably well aware of this campaign.  Many of you have stepped up and adopted the status messages I have posted regarding this effort.

I urge those of you who havent been involved yet to get involved.  This is grassroots Democracy at its finest.  For those of you on Facebook, I urge you to spred the word about this effort to your friends.

I recommend adopting the following Facebook status messages for the rest of the week:

Status for today (7/29):

S. 604 (The Audit the FED Bill) Now has the support of 21 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Al Franken (MN) (202) 224-5641. Republican: Jeff Sessions (AL) (202) 224-4124. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Status for tomorrow (7/30):

S. 604 (The Audit the FED Bill) Now has the support of 21 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Mark Udall (CO) (202) 224-5941. Republican: Olympia Snowe (ME) (202) 224-5344. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

Status for Friday (7/31):

S. 604 (The Audit the FED Bill) Now has the support of 21 Senators! Victory is within reach. Lets target 1 Democrat and 1 Republican today and bombard them with calls to get their support. Democrat: Joe Lieberman (CT) (202) 224-4041. Republican: Mitch McConnell (KY) (202) 224-2541. It literally takes less than 2 minutes to call! PLEASE REPOST!!!

And please be sure to make the phone calls.  You can call two Senators and express your feelings on this bill in less than two minutes.  Let them know that this bill is about transparency and that the American people have a right to know where their money is going.  Remind them that the Federal Reserve has been around since 1913 and has never been audited.  Here a list of contact information for all US Senators.

Americanly Yours,

Phred Barnet

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For a long time I did not have health care.  I was fresh out of college and was relatively healthy.  For me, there was no real need for health insurance.  But, a year and a half or so ago I decided that it was in my best interest to sign up for a health care plan.

I spent about two weeks using sites like ehealthinsurance.com comparing literally hundreds of plans with all kinds of different features until I found the one that suited me best.

I selected an HSA from Kaiser Permanente.  An HSA (Health Savings Account) is similar to an IRA, but for health care savings rather than for retirement.  A person enrolled in a HSA is allowed to contribute up to $3000 tax free each year to their account.

Under Federal law, these HSA’s must be paired with a HDHP (High Deductible Health Plan).  For example, my plan has a $1200 deductible, but everything after that is covered 100% by Kaiser.

I love my plan.

The point of having the high deductible plan is to encourage patients to keep their health care costs down.  If a customer knows that they have to spend the first $1200 of their health care expenses out of pocket, they are more likely to avoid unnecessary health care expenses.  Conversely, a health emergency is extremely unlikely to lead to major financial distress, as the maximum out of pocket expenditures are only $1200.

I mentioned above that an HSA is similar to an IRA and that I am legally allowed to contribute $3000 tax free to my account each year.  This allows individuals to save money for their future health care expenses.  For example, if I deposit the maximum of $3000, but only spend $1500, including all medical bills and over the counter and prescription drugs, I am left with a surplus of $1500 in my account.  This money can be kept in an interest bearing savings account, invested in a money market, or invested in the stock market.

This type of plan obviously doesnt suit everyone, but it is a great plan for people like me:  young, relatively healthy people with minimal health care costs.  Because I enrolled in this plan while young and healthy, I can use the unspent funds remaining in my account to save for when I am a sick old man with high health care costs.

In fact, while insurance premiums were expected to rise around 8% this year, my premium actually dropped by 3.6%!  It dropped because I kept costs for both me and my insurance company under control.

As I said above, I am an informed consumer who spent quite a long time comparing plans until I found the plan that I felt was best for me.  This plan has some great features, encourages saving and allows me to contribute money on a pre-tax basis.  It has also resulted in my premiums actually going down in a time when most people are seeing rather large increases.

My plan is great as it is, but if the government wanted to make health care more affordable, they would remove contribution limits on HSA’s, allowing consumers to place much more money in these plans.  They could also allow users of any health plan to enroll in an HSA, rather than limiting HSA’s only to those with high deductible plans.  Making these reforms would lead to lower costs for many Americans, and would create an incentive for the young and healthy to save money for the future when they face declining health.

Sadly, the Democrats’ health care plans will outlaw my health insurance plan.

I dont even understand why anyone would want to outlaw this plan–it really is great– but there seems to be a lot of things that I dont understand these days.  Are these Congressmen so conceited that they actually believe that they are capable of making a better decision about my own life than am I?  None of these people have ever met me.  None of them can possibly understand my health care needs better than I do.

Americanly Yours,

Phred Barnet

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President Obama has proposed universal health care in a new bill, yet given the law of supply and demand, it will result not only in lower quality of health care, but also in rationing. Let us just suppose that President Obama’s health care proposal sails through Congress today and is signed into law this evening.

Tomorrow morning we will all wake up in a world where everyone is covered with some form of medical insurance, including the approximately 50 million Americans currently without health coverage. Yet, the number of doctors, nurses, and medical staff will be the same tomorrow as it is today. Likewise, there will be the same number of hospitals, doctors’ offices, and medical care facilities as there is today.

It is worth remembering that our medical professionals are already strained, waiting rooms are crowded, emergency rooms are already plagued by long waiting times, and it often takes days to get an appointment to see a doctor.

Giving an additional 50 million Americans immediate access to the same number of medical professionals and facilities will flood our health care facilities and doctors with new patients, putting further strain on an already strained system. The result will be longer waits, more crowded doctors’ offices and hospitals, and a general decrease in the level of care.

Increasing the number of Americans with health care is a noble goal and is being pursued with the greatest of intentions. But as it is said, the road to hell is often paved with good intentions. There is no way around the fact that adding an additional 50 million people to the health care system will decrease the level of service being offered.

The current health care bill will succeed in giving more people health care, however it will result in much worse care for the over 80% of Americans who are currently covered.

This is an excellent example of the law of supply and demand. No matter what is done about health care, tomorrow’s supply of health care –the number of doctors, medical facilities, etc. – will be the same as today. Yet, implementing a nationalized health care system requires that tomorrow’s demand for health care increases dramatically. A sudden increase in demand without an increase in supply always leads to a shortage of the product in question.

In the free market, a shortage of goods causes prices for that good to increase to a level where those who cannot afford them are ‘crowded out’ of the market. The profit earned by the producers of the good encourages additional producers to enter the market. This creates an increase in supply and drops the price of the goods for all consumers. Under the President’s plan, however, demand will be raised without an increase in supply, whereby the government will be forced to allocate health care. When government bureaucrats make decisions on how goods and services should be allocated, rationing occurs.

Under the new government run health care system, the government will need to take measures to “keep costs low” in an effort to save American citizens money and prevent negative political fallout. While this also seems like a noble goal, the consequences will be devastating. Government mandated cost cutting measures also necessarily mean less profit for those who operate medical facilities.

Taking away the profit motive, will result in fewer people being willing to take risks and opening new medical facilities. Medical supply companies will be less willing to produce life saving medical devices, and the benefits of taking a medical education will diminish. The loss of profit motive will result in fewer services being shared among more consumers. This will lead to further rationing, rather than allowing market forces to make corrections.

Even the best of intentions can’t change facts. If Americans want to continue to have a decent health care system without government rationing, they must oppose universal health care coverage.

Americanly Yours,

Phred Barnet

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I wrote the following article which has since been published in newspapers through the State:

Commentary

State Tax Incentives a Bad Business

By Phred Barnet

Giving a tax incentive to a business to encourage economic development sounds like a great idea, but it is not. Tax breaks for businesses are little more than corporate welfare at the expense of hard-working Georgians. They amount to subsidies favoring a select few businesses over Georgia’s residents and existing businesses.

Proponents of tax breaks for new businesses argue the increase in jobs will make up for the reduction in revenue, but tax breaks for businesses rarely pay for themselves and often end up costing the state a great deal of money. That shortfall must be paid for by Georgia’s taxpaying citizens and business, which don’t have the benefit of that break.

Giving a business a tax incentive to move here may help that business in the short term, but in the long term the people who pay for that tax break also happen to be the employees and the customers of that company. Plus, it sends the wrong message to existing Georgia businesses: “If you stay in the state, we will use your tax dollars to subsidize your competitors.”

In June, after the North Carolina Legislature approved a $46 million tax break designed to induce Apple, Inc. to build data warehouses in the Tar Heel State, Scott Hodge, president of the Washington, D.C.-based Tax Foundation, had this response: “Too many legislators confuse targeted business incentives with policies that truly create a better business climate.”

“They are not. They only provide an excuse for lawmakers to avoid real tax reform. Targeted incentives are to a state’s economy what steroids are to the human body – short-term results that eventually weaken the bones, cause heart failure, or worse, impotency. Tax systems should not be used to pick winners and losers or micromanage the economy. Data farms in North Carolina might be a good thing, but it is much better for the marketplace to decide that, not government. The key to a prosperous economy is a tax system that provides a level playing field for all businesses and all industries.”

In Georgia, a new law gives the entertainment industry tax credits for up to 30 percent of production and post-production expenditures. Proponents argue that if Georgia does not do so, it will lose out to other states. This mentality leads to bidding wars that end up offering more and more incentives to the entertainment industry.

Former North Carolina Supreme Court Justice Bob Orr recently complained that “the industry has been able to play off North Carolina against South Carolina against Louisiana against Georgia. Louisiana raises its incentives, and it puts pressure on South Carolina, North Carolina and other states to do likewise.” In fact, only weeks after losing the new Miley Cyrus film to Georgia, North Carolina’s State Senate moved to increase their tax breaks for entertainers from 15 percent to 25 percent.

The chief economist for Louisiana’s legislative fiscal office, Greg Albrecht, estimates that in 2006, Louisiana gave the entertainment industry about $121 million in tax credits, but that only around 18 percent of that money was ever recovered in economic activity and taxes. He denounced the programs as “an expensive way to create jobs,” maintaining that “there’s no way you can say this makes money for the public.”

At best, these incentives can create temporary increases in economic activity. Yet these temporary increases do not pay for the costs of the programs themselves. There is no logic in Georgia subsidizing the enormous salaries of Hollywood actors, directors and producers while many of our own residents struggle to get by in this tough economy.

The most equitable tax incentive that Georgia could offer would be to cut taxes on individuals as well as corporations to make Georgia more attractive to individuals and businesses – both old and new. This would lead to investment and job creation, encourage more businesses to move to Georgia and send the correct message to Georgia’s current businesses.

Americanly Yours,

Phred Barnet

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This is a great article that I got off of Real Clear Politics.  You can find the original article here.

The Stimulus — The Anatomy of a Failure

By Rich Lowry

Barack Obama spent all of 2008 running against the sputtering economy and warned earlier this year of a crisis “we may not be able to reverse.” Yet, as the unemployment rate climbs beyond the administration’s projections, Vice President Joe Biden informs us that the administration “misread how bad the economy was.”

Apparently we were going to experience a once-in-a-lifetime economic crisis comparable to the Great Depression without a particularly high unemployment rate. This was the promise of the Obama administration, which indulged in hair-raisingly alarmist economic rhetoric while pumping out unduly hopeful economic projections. If the Reagan administration gave us the rosy scenario, the Obama administration has given us the rosy apocalypse.

The rosy apocalypse is an artifact of both ideological naïveté and knowing cynicism. The administration genuinely believed, against all historical experience, that government spending would boost us out of the recession. And it knew it had to assume an unrealistically rapid, robust economic recovery, because otherwise the already-horrid deficit projections would look worse. So Obama talked up the crisis to get the stimulus passed, and after that . . . happy days again!

If only the job market were cooperating. In a report prior to the passage of the stimulus, the soon-to-be head of the Council of Economic Advisers, Christina Romer, suggested the unemployment rate wouldn’t increase beyond 8 percent. It now stands at 9.5 percent and will go higher. The Obama stimulus is falling victim to the poor timing and inefficiencies of all such recession-fighting spending programs.

Out of the $787 billion of the stimulus, roughly 60 percent goes to individuals in temporary tax rebates and increased entitlement spending. This will provide little boost to the economy. History says that people will only spend 20 percent to 40 percent of a temporary tax rebate, for the very good reason that they know it’s temporary.

According to the Bureau of Economic Analysis, disposable personal income increased at a healthy 1.2 percent in April and 1.6 percent in May. Is this money coursing through the economy? No, it appears most of it is being saved. In April, personal consumption declined 0.10 percent, and in May it ticked up a mere 0.20 percent. Americans refuse to spend their money as heedlessly as Obama’s economic gurus hope.

Then there is the direct government spending. It will definitely make its way into the economy. The question is when. It has to run through various bureaucracies, which means delay. According to Doug Elmendorf, the head of the Congressional Budget Office, only about half of the $308 billion in spending will make it out the door by the end of fiscal year 2010 (i.e., by next September). That’s about $150 billion during the next year and a half in a $14 trillion economy – in other words, a trifling 0.70 percent of the economy during that period.

Only 11 percent of that spending will take place by the end of fiscal year 2009. Most economists think the economy will be growing by the end of this year, so ideally the stimulus would begin receding in 2010 rather than taking effect in earnest. According to Elmendorf, even by the end of fiscal 2011, only 72 percent of the spending will have occurred. That means more of the spending will come in fiscal 2012 and beyond than is happening this year during the recession.

And this stimulus was touted as timely and targeted? Confronted by the inadequacies of the current program, its advocates have a predictable solution – a new one. Since the worthiest projects were presumably already covered in the first stimulus, a second stimulus would have to fund even more marginal priorities, and it would get into the economy even later. In other words, it would replicate rather than rectify the failures of the first stimulus.

Obama is resisting a second stimulus so far, but was foolish ever to go down this route. Now he’s stuck hoping for the advent of his rosy apocalypse – as soon as possible.

Americanly Yours,

Phred Barnet

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