Monthly Archives: November 2011

Mitchell & Ray December 1st: Chris Ashworth, EU Bailout, To vet.. or..

When: Thursday, December 1st, 10pm Eastern/7pm Pacific

Where:Streaming Internet Radio

What: Join independent political commentators Michelle Ray and Rich Mitchell as they discuss the issues impacting Americans.

Tonight: To vet.. or..? The Fed’s lastest bailout, and special guest

Guest: Chris Ashworth, of HBO’s “The Wire” fame

Show Recording:

[mp3player width=300 height=75 config=fmp_jw_widget_config.xml file=http://media2.conservativedailynews.com/shows/mitchell-and-ray/show_12-1-11-2.mp3]

and .. the non-flash, iGadget-friendly version:

Eu Bailout, Chris Ashworth and Candidate Sniping

Who’s Going to Pay?

Have you ever been surfing the web and found a video that made you drop your jaw and made your blood pressure go through the roof? I recently came across one such video.

The sad thing is that this woman is just one example of the many in our country who expect that their decisions should come without responsibilities. The way I look at it, if you can’t provide for them, don’t have them!

Big shock: Politicians are corrupt. So what do we do about it?

Clearly not satisfied with their sky high approval ratings, members of Congress seem to be doing everything they can to convince that final 12% of Americans who support them to reconsider. Last week, Peter Schweizer revealed in his new book that a lot of them have been using their offices to engage in insider trading. For example, while most American citizens were debating the merits of Obamacare, John Kerry was busy making sure it benefitted his stock portfolio:

[A]t least $200,000 of stock in medical device manufacturer ResMed was purchased in the $20 to $25 per share range. After Obamacare passed, ResMed jumped to $34, an increase of as much as 71%. “ResMed was a winner in the health care reform legislation—as Reuters declared—thanks in part to John Kerry’s efforts,” says Schweizer. The reason: earlier versions of the Obamacare bill would have slapped companies like ResMed with an “industry fee” tax. Kerry opposed the higher taxes on medical device companies and helped delay the taxes until 2013.

The sickest part is that John Kerry’s behavior here isn’t the exception in Congress – it’s the rule. But as disgusting as that is, there are two important lessons that can be learned from this situation: 1) members of Congress currently have way too much power, and 2) all of our laws must apply to all Americans in the exact same way.

1.) Members of Congress currently have way too much power.

“The Experience of every Age convinces us, that we must not judge Men by what they ought to do, but what they will do; and all History affords us but few Instances of Men trusted with great Power without abusing it, when with security they could”

John Trenchard, Cato’s letters #60

Right now, Congress has an unimaginable amount of power to impact industries throughout the economy both positively and negatively. But beyond that, individual congressmen who land positions on powerful committees can have an incredible influence on each bill – almost single-handedly. Giving politicians that kind of power is exactly what leads to corruption like the current insider-trading scandal.

Getting this Congressional power back under control may seem like a Herculean task, but the solution is really simple. It doesn’t even require some massive government “reform” bill. All Congress would have to do is… abide by the Constitution we already wrote and ratified in this country. How’s that for a radical idea?

When our Constitution was written, the federal government was mainly intended to handle national defense, foreign diplomacy, and ensuring the free flow of trade between the states. This is a point that James Madison made clear:

“The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite. The former will be exercised principally on external objects as war, peace, negotiation, and foreign commerce […]”

Federalist #45

Very clear:

“The powers of the general government relate to external objects, and are but few. But the powers in the states relate to those great objects which immediately concern the prosperity of the people.”

Remarks at the Virginia Ratification Convention

Notice how straightforward Madison is – the federal government is designed to focus primarily on “war, peace, negotiation, and foreign commerce.” Domestic issues were supposed to be handled almost entirely by state and local governments – which are much more effective in those areas.

But for some reason, today’s Congress wastes the vast majority of its time messing around with domestic legislation that it has no real authority to pass. If members of Congress could manage to limit themselves to exercising the powers that were actually granted to them in the Constitution, they wouldn’t have had the inside information they used to make these immoral trades in the first place. Problem solved.

Isn’t it amazing what can happen when the Constitution is read and applied?

Of course, there will be those who say, “The government will still be responsible for funding the military. So Congress will still have insider information about all of those massive defense contracts.”

That’s true, defense spending will still be an area of concern. But if Congress were to actually limit itself to Constitutionally mandated actions, federal spending would be a fraction of what it is today. In that case, it would be much easier for citizen groups to follow and analyze which members of Congress are benefitting inappropriately from insider information.

That wouldn’t completely solve the problem though. That’s where Lesson 2 comes in.

2.) All of our laws must apply to all Americans in exactly the same way.

“The Experience of all Ages may convince us, that Men, when they are above Fear, grow for the most part above Honesty and Shame.”

John Trenchard, Cato’s letters #61

Part of the reason insider-trading became such a common practice is Congress exempted itself from laws that made it illegal. So at some point, the politicians in Washington must have actually gotten together and said, “Wow, this insider-trading is really dishonest. No one should be allowed to make a fortune off of unknowing investors like that… you know, except us.”

When members of Congress are able to act as if they are a privileged class, it’s no wonder why so much of the legislation they pass is complete garbage. They know that they don’t have to live under the laws that they enact, so they are free to make a joke of our legislative process without feeling the effects.

The law that was just passed made the market tank? Don’t worry about Congress, they had insider information so they sold their stocks ahead of time. Obamacare is a disaster? No problem, they made sure they can keep their federal health plan instead. Unemployment is really high? Not to worry, they’ve got lucrative Congressional pensions.

The answer to all of this is to require all laws to apply to every American the same way – including public officials – similar to what Friedrich von Hayek suggests in The Road to Serfdom. No more exemptions. No more loopholes. No more waivers. If it’s wrong for private investors to engage in insider trading (and it is), then it’s wrong for members of Congress to engage in insider trading.

This requirement would also have another benefit besides simply eliminating Congress’ ability to write itself “Get out of jail free” cards. Much of the problem with Congressional insider trading stems from lobbyists and crony capitalists who are trying to “encourage” politicians to give them special tax breaks or legal advantages over their competition (see: Nancy Pelosi and the Visa IPO).

But when laws have to be applied generally, it makes it much more difficult for members of Congress to give those special interests what they want. If Congress isn’t able to give out valuable special favors, there’s no reason for crony capitalists to give politicians access to insider information and exclusive IPOs.

Whenever members of government are abusing their offices, lessons need to be learned from those situations and changes need to be made. In this case, Congressmen are using power not authorized by the Constitution and are exempting themselves from legal consequences to gain an unfair advantage in the stock market.

That cannot be tolerated. If our public officials are allowed to act as if they are above the law it will destroy this country. Members of Congress who are engaging in insider trading need to be held accountable and soon. Otherwise, no “Get out of jail free card” in the world will be able to clean up the mess they’re making.

Thank You Sen. Thomas Carper, For Hearing The Voice Of The Children

Senator Thomas Carper (D)- Delaware

It is not too often that I can actually say I am proud of an elected Government Official. It is even more rare that I am able to say I am proud of a Democrat in office, much less a Democrat Senator.

Today, I am so proud of Senator Thomas Carper, a Democrat Senator from Delaware. He hears the voice of the children!

Tonight, there was an ABC News Exclusive Report with Diane Sawyer, on a report which will be released this Thursday by the Government Accountability Office (GAO). The report is the findings of a two-year-long investigation of psychiatric medications being prescribed to foster children at an alarming rate.

In the article from ABC News:

The GAO’s report, based on a two-year-long investigation, looked at five states — Florida, Massachusetts, Michigan, Oregon and Texas. Thousands of foster children were being prescribed psychiatric medications at doses higher than the maximum levels approved by the Food and Drug Administration (FDA) in these five states alone. And hundreds of foster children received five or more psychiatric drugs at the same time despite absolutely no evidence supporting the simultaneous use or safety of this number of psychiatric drugs taken together.

One of my dearest friends called me this morning to tell me about the Exclusive Report that would be airing tonight. As I sat watching it, I was hurled back in time to the summer of 2008.

On June 4, 2008, my oldest daughter and son came into our home. When we were going through the paperwork with the caseworker at the actual placement, we were handed a Ziploc bag of  prescriptions. My husband’s job during the process was to find out what each medication was for, because the caseworker had no clue. (This was the second of four caseworkers we would have with these two children in our 13 months before their adoption was finalized.)

We had never heard of the first medication the little girl was on, which was Respiridone (Brand Name: Resperdal). When my husband pulled up the information online, we were appalled to find out that the medication is an antipsychotic medication.

From U.S. National Library of Medicine:

Risperidone (Risperdal) is an antipsychotic medication used to treat mental illnesses including schizophrenia, bipolar disorder, and irritability associated with autistic disorder. Ropinirole (Requip) is a dopamine agonist used in the treatment of Parkinson’s disease and Restless Legs Syndrome. It is also used to treat episodes of mania (frenzied, abnormally excited, or irritated mood) or mixed episodes (symptoms of mania and depression that happen together) in adults and in teenagers and children 10 years of age and older with bipolar disorder (manic depressive disorder; a disease that causes episodes of depression, episodes of mania, and other abnormal moods). Risperidone is also used to treat behavior problems such as aggression, self-injury, and sudden mood changes in teenagers and children 5-16 years of age who have autism (a condition that causes repetitive behavior, difficulty interacting with others, and problems with communication). Risperidone is in a class of medications called atypical antipsychotics. It works by changing the activity of certain natural substances in the brain.

Why is this medication prescribed?

Risperidone is used to treat the symptoms of schizophrenia (a mental illness that causes disturbed or unusual thinking, loss of interest in life, and strong or inappropriate emotions) in adults and teenagers 13 years of age and older.

What side effects can this medication cause?

Risperidone may cause side effects. Tell your doctor if any of these symptoms are severe or do not go away:

  • a long list can be found at the link above, I will highlight the ones that are shocking
  • dreaming more than usual
  • difficulty falling asleep or staying asleep
  • breastmilk production
  • vision problems
  • muscle or joint pain
  • dry or discolored skin
  • difficulty urinatingSome side effects can be serious. If you experience any of the following symptoms or those listed in the IMPORTANT WARNING section or the SPECIAL PRECAUTIONS section, call your doctor immediately:
    • unusual movements of your face or body that you cannot control
    • faintness
    • seizures
    • slow movements or shuffling walk
    • difficulty breathing or swallowing
    • painful erection of the penis that lasts for hours

    Risperidone may cause children to gain more weight than expected and for boys and male adolescents to have an increase in the size of their breasts. Talk to your doctor about the risks of giving this medication to your child.

There is much more information about this drug at the link above, as well as a wealth of information in other articles and websites. My daughter had nothing medically wrong with her that would have precipitated a prescription for an anti-psychotic drug at all, much less one such as Risperdal! It would have been understandable if they had been diagnosed with attention deficit issues, because she showed classic signs of ADHD. However, according to this NY Times article:

But Risperdal is not approved for attention deficit problems, and its risks — which include substantial weight gain, metabolic disorders and muscular tics that can be permanent — are too profound to justify its use in treating such disorders, panel members said.

One thing to keep in mind: my daughter that came to us with a prescription for Risperdal was 6-years-old when she came to us! If you read the information, you will see that the youngest age even mentioned in the “recommendation” is 10-years-old, but in most cases, the youngest recommended age is 13-years-old!

This is such a problem, that in 2010, a Philadelphia lawyer filed a lawsuit on the behalf of 10 families whose children were prescribe Risperidal.

I have been trying to have something done about this problem of foster care children being prescribed medications needlessly for 3 1/2 years now! In my next article, I will tell you things that will blow your mind, in regards to how many people I have talked to and reported this problem to, and nothing has been done!

Thankfully, Senator Carper from Delaware was appalled when he read the the GAO report, stating:

“I was almost despondent to believe that the kids under the age of one, babies under the age of one were receiving this kind of medication.”

Finally, someone in Washington is taking notice of how broken the foster care system is!

Thank you, Senator Carper, for hearing the voice of the children!

Too Many Meds for Foster Kids?

ABC News Exclusive Report with Diane Sawyer, on a report which will be released this Thursday by the Government Accountability Office (GAO). The report is the findings of a two-year-long investigation of psychiatric medications being prescribed to foster children at an alarming rate.

Fives states were involved in the investigation– Florida, Massachusetts, Michigan, Oregon and Texas.


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Related Article: Thank You Sen. Thomas Carper, For Hearing The Voice Of The Children

Allen West – "Media is trying to put me against Cain"

Early Wednesday morning Rep. Allen West was asked to comment on the latest Herman Cain scandal while being interviewed on the WMAL Morning Majority  radio show.  “Beyond reassessing his campaign, he probably needs to understand that he is a distracter for what’s going on right now and we should move on,” Rep. West said. “That would be my advice to him.”

West’s comments immediately went viral and became the subject of ire for many conservatives who felt West had betrayed Cain and fallen prey to the liberal media’s game of Republican bashing.  Several hours later West released this statement via his Facebook account:

“The media is trying to put me against Herman Cain. I guess its good for them to see two black men against each other. The facts are I am not telling Cain to step down. That is his decision and his only. What I said is the media focus on these incidents and “alleged affairs” are a distraction, and we as a country need to move on from this subject and get the focus on what the GOP contenders can seriously do for this country.”

With Republican and conservative voters already extremely sensitive about the primary race and the state of GOP unity in general, West and other politicians will be treading lightly in the coming weeks.

George LeMieux Takes Disgusting to a Whole New Level in Campaign E-Mail Bashing Connie Mack, Tea Party and Hooters

Soon to be ex- U. S.  Senator George LeMieux recently sent out a campaign email letter that shows everyone just why Mr. LeMieux will not stand a snowball’s chance in you-know-where of winning the Florida U.S. Senate seat in the 2012 elections.

He not only disgustingly piles on unwarranted personal attacks on Rep. Connie Mack in this nasty campaign letter, but also trashes Hooters restaurants and  grassroots Tea Party voters at the same time – whose support he will undoubtedly need to win the election.

First, let’s put the email out here for all to see, so Floridians can see for themselves just what a low-life Charlie Crist appointed, power-hungry piece of misguided elitist trash Mr. LeMieux turns out to be… in his own words. Of course, while these types of low life personal attack dogs are usually found in the fake democratic party of today, Mr. LeMieux shows he is not above taking pages out of the Democratic Attack Machine’s political playbook. He even uses a Liberal attack dog’s written words instead of his own to somehow try to hide behind the political activist at The Miami Herald, Frank Cerabino, who is  posing as a journalist. From the Elect George  LeMieux homepage:

From: “Team LeMieux” <[email protected]>  (send team George an email and tell him what you think of this information)

Date:November 29, 2011 10:48:07 AM EST

Cerabino: Underachiever Connie Mack IV perfect for Senate seat. (emphasis mine)

To: U.S. Rep. Connie Mack IV

From: Cerabino Image Makeover ­Specialists Inc.

Subject: Tidying up your résumé

First of all, congratulations, Mr. Mack. You haven’t even officially declared yet to run for a Florida seat in the U.S. Senate and you’re already the front-runner in the polls. This is great news.

We here at CIMS can’t wait for the big announcement, because we feel that you embody everything that Floridians have come to expect as our representative in the highest legislative body in the land.

This is why we have volunteered our services to help you address some questions that might arise when nosy nellies start poking into your background.

It’s best to figure out good answers in advance.

So we have taken the liberty of fashioning responses that ought to appeal to the Republican base you have already dazzled.

Issue No. 1: Work experience.

Problem: Before trading on the name of your father (a U.S. senator) to begin your current career as a full-time servant of the people in 2001, the most meaningful employment you had was as a “special events coordinator” for a bunch of Hooters restaurants. Boiled down to its essence: You were the go-to guy for folks who wanted to have scantily clad waitresses appear at their events.

Solution: You will be effective in a Democratic-controlled Senate, because you already know what it’s like being surrounded by a bunch of boobs.

Issue No. 2: Education.

Problem: Despite being a legislator with a stated passion for education, you needed 6½ years to get an undergraduate degree in advertising, which you accomplished three months shy of your 26th birthday.

Solution: You’re not one of those educational “elites.” This will give you significant inroads with the tea party voters, who believe Ivy League educations and law-review honors are flaws.

Issue No. 3: Lawsuit trouble.

Problem: You once sued Ron Gant, an outfielder for the Atlanta Braves, for beating you up in a barroom fight.

Solution: It was not a frivolous lawsuit. The jury awarded you monetary damages.

So let’s try to set Mr. LeMieux’s intended message straight here shall we?

 Issue 1 –LeMieux and Cerbino trash Florida’s Hooters restaurant chain, because Rep.Connie Mack once worked for Hooters restaurants . Hooters restaurants are world famous for chicken wings, tailgate parties and a general all around place for friends to get together for good times and great food. HOA Restaurant Group, LLC is the Atlanta-based operator and franchiser of over 455 Hooters locations in 44 states in the US, Argentina, Aruba, Austria, Australia, Brazil, Canada, Chile, China, Columbia, Costa Rica, Dominican Republic, England, Germany, Greece, Guatemala, Korea, Mexico, Paraguay, Panama, Peru, Philippines, Singapore, South Africa, Spain, Switzerland, Taiwan and the Virgin Islands. The privately held corporation owns 160 units.

And in case Mr. LeMieux and his Liberal attack dog Mr. Cerabino are unaware of the facts about Florida’s much beloved Hooters restaurants, the very first Hooters restaurant was founded in Clearwater, Florida. And yes they have beautiful girls working there, as is the case of probably 99% of American restaurants in business today. So Rep. Connie Mack worked for Hooters over 20 years ago. Why is Hooters being trashed in an attack-ad posing as an op-ed in a Florida newspaper, by a U.S. Senator who is currently begging to remain in that appointed seat that was given to him by the biggest flake Florida has ever had the disgrace to call it’s Governor, Republican, turned Democrat turned Independent, Charlie Crist? Let’s hope every Floridian reading this takes the time to tell Mr. LeMieux and Mr. Cerbino just what they think of their bashing Florida’s very own Hooters restaurants.

 

 

Issue 2- Education- LeMieux and Cerabino tell us Rep. Mack took (gasp!) 6 ½ years to finish college! Then they use that statement to refer to Tea Party voters across America as some kind of uneducated neanderthals: “ You’re not one of those educational “elites.” This will give you significant inroads with the tea party voters, who believe Ivy League educations and law-review honors are flaws.”     Well considering the blatant ignorance concerning the rule of law that is being shown by Harvard law professor extraordinaire Barack Obama today, I suppose many people just might view a Harvard law degree as an award of ignorance instead of a degree in higher learning. When Harvard and other elitist Ivy league schools start actually start putting out real lawyers instead of Liberal politicians posing as law professors, we just might start taking a Harvard law degree seriously. Until then, it will remain nothing more than the joke of a law professor named Barack Hussein Obama. Clear enough? Tea Partiers do believe in higher education, one that actually translates into a career in the private sector workforce, not one that creates nothing more than fake liberal lawyers to be injected into our political system under the guise of being “scholarly.”

Issue 3 – Lawsuit (gasp!) trouble: Rep. Connie Mack got into a bar fight decades ago in which he was awarded damages. (so says Mr. Cerabino and Senator LeMieux)) An article from augusta.com reveals that, after eight hours of deliberations over two days, the jury found that Gant, who still lives in the Atlanta area, started the fight but was not responsible for injuries to Mack. And this tidbit of fact: - “A Cobb County State Court jury on Friday decided not to award any damages in a civil suit involving former Atlanta Braves outfielder Ron Gant.

The jury ruled that each side would have to pay its own attorneys’ fees.  Retract your lies Mr. Cerabino, and Mr. LeMieux owes Rep. Mack a public apology immediately.

Rep. Connie Mack jumped into the lead in all major polls before he even formally announced that he would be running for the Republican primary to take on the big Liberal debt-spender and current U.S. Senator Bill Nelson for his U. S. Senate seat in 2012. And then we see this nasty piece of slander put out by George LeMieux while hiding behind the journalistic skirt of the libelous liberal Mr. Cerabino, he of the far left rag known today as the Miami Herald. Shame on both of you!

2012 just can’t get here fast enough!

 

An American Anthem

I recently assigned Ayn Rand’s novella Anthem to my freshman English students as a reading assignment. I’ve read this piece numerous times over the years, but this was the first time I had read it through someone else’s eyes – my students’. It also resonated with me differently this time because of the current entitlement crisis as represented by the Occupy movement.

Those who have not read Anthem, or are unfamiliar with Ayn Rand, might not know that the prevailing goal in her writing is to show the superiority of individualism to collectivism. In Anthem, she paints the picture of a society in which government provides everything for all and no individuals or traits of individuality are allowed to exist. Vocations and breeding partners are chosen by the government. Humans are not even permitted to have names. Instead, they are classified into groups and then given a number. The protagonist, for example, is referred to as Equality 7-2521. The words used to reference characters in the story are all collective in nature (“we,” “us” and “our”), even when it is clear to the reader that a speaker is simply referring to him or herself.

This notion is strangely reminiscent of the ways in which Americans have begun to categorize themselves. Take the popular practice of hyphenating cultural identities as an example. We are not individuals or even Americans in this country anymore. We are “African-Americans” or “Mexican-Americans.” Beyond our collective cultural labels, we are grouped according to our socio-economic status: “middle America,” “millionaires and billionaires,” or “the less fortunate.” One can quickly begin to see that the distinction between the fictional, government-imposed label “Equality 7-2521” and the self-imposed OWS label “We are the 99%!” is minor. In fact, it’s much more offensive that Americans would impose such collective ideals upon themselves.

The Occupy crowd argues that the government should provide health insurance, free college tuition, homes, and a job for everyone. This is precisely how it happens in Rand’s Anthem. Equality 7-2521 is relegated to the vocation of street sweeper. Though he is quite brilliant in math, he accepts this lesser position and views it as an unintentional consequence for his near-obsession with the illegal activity of knowledge acquisition. You see, he reads. Voraciously. Through the course of his reading activity, he eventually comes across the forbidden word “I,” and this is where Rand’s plot takes a hopeful turn. Upon recognition that he is an individual, his eyes open to possibilities, his mind to new perspectives. At one point, he finally “sees himself” when he looks into a pond and notices his reflection. As a result of these discoveries, he begins to rebel.

Those who are active in the Occupy movement already seem to have rebellious tendencies, so perhaps we can assume that they are just an ignorant bunch. Like Equality 7-2521 – who eventually assigns himself the name of Prometheus – perhaps each individual of the entitlement mindset should undertake the challenge of reading his or her way to self-discovery. Maybe each should also take a look in the mirror and decide whether or not he likes the reflection he sees. He should read Rand’s prediction of what life would be like if the government was the end all, be all. Considering she escaped the Bolshevik Revolution in Soviet Russia, Rand’s words bear the weight of experience and should not be discounted. She wrote Anthem – and subsequent novels The Fountainhead and Atlas Shrugged – because she saw signs decades ago that America was headed down the same Socialist path.

Perhaps the best lesson in reading this 100-page fictional story can be found in its nod to ancient myth. The mythological character on which Rand’s Prometheus is based is best known for stealing fire from Zeus and offering it to humankind so that humans could rely on themselves instead of the powerful overseer. It would be great to see these same principles applied to those who classify themselves as “less fortunate” or who think they are “entitled” to have someone else provide for them. These Occupiers need to see themselves as empowered and not entitled. Rand paints the dismal picture of what the world would look like if we relinquished all individual power and allowed ourselves to be grouped into categories, to be controlled by our government. She shows us what thinking of ourselves as part of the 99% really looks like, and it ain’t pretty.

Rejecting FairTax Part Two: What You Don't Know About FairTax

In Part One, I’ll cover the dangers of taxing consumption as a major source of government revenue, both to the individual and to the economy.

Part Two will cover the little-known problems in the FairTax proposal- the “fine print” FairTax advocates won’t tell you about (or don’t know themselves); I’ll also refute some of the inconsistencies and rhetoric used by FairTax advocates.

Part Three will introduce the reader to the benefits of flat income taxation- why it’s superior to consumption tax, and the economic benefits of flattening the tax code.

Part Four will introduce the reader to the Negative Income Tax Credit- an ideal solution to the the problems of our massive welfare state, which can only be implemented in conjunction with an income tax system.

Part Two: What You Don’t Know About FairTax

In the last segment, I illustrated the problems inherent in consumption taxes generally; in this part, I’ll address the issues with Fair Tax specifically.

First: FairTax is a hidden tax. In order to avoid the offensiveness of instituting a high sales tax, a part-and-parcel component of the FairTax legislation is to make it an “inclusive” tax, one which is built into the sticker price of goods and services, as opposed to the “exclusive” sales taxes we are already familiar with, where the tax is added on when we get to the cash register.

Inclusiveness conceals the real rate of taxation. To illustrate this, I’ll use a simple example:

FairTax, as proposed, would be levied at an “inclusive” rate of 23%. This means 23% of the sale price is remitted to the government by the seller. If the seller wants to sell an item and make $1.00 from the sale, he must sell the item for $1.30, because 30 cents is 23% of $1.30.

In other words, a 23% “inclusive” rate is actually a tax rate of 30%.

This disparity between actual rate and inclusive rate grows as the tax grows: At a 33% “inclusive” rate, the actual rate would be 50% (33% of $1.50= 50 cents).

Consider this point: FairTax advocates propose FairTax as a replacement for federal income tax (up to 35%), FICA (15.3%, for both “halves”), and several other taxes. Considering this, does it seem unreasonable to believe that these taxes would be replaced by a “33%”, rather than a “23%”, tax?

In fact, the “23%” rate is only guaranteed in the FairTax legislation for two years- after which, a formula is used to calculate a new, higher rate, defined in the FairTax bill (see link at bottom) as “the general revenue rate, old-age, survivors, and disability insurance rate, and the hospital insurance rate”.

Second, unlike current sales taxes, FairTax is not just a tax on goods. FairTax, if instituted, would apply to services as well. Stated another way, this means a 30% markup your phone bill, your car insurance bill, your cable bill, your garbage removal bill, etc.; a 30% markup on your grocery, fuel, medication, and clothing purchases; a 30% markup on the purchase of a home or a car. If your washing machine or central air conditioning breaks down, the cost of parts and the bill for labor from the appliance repair service will include a 30% markup. This “30% markup”, of course, assumes a FairTax rate of 23% (see above).

FairTax advocates frequently argue that this markup wouldn’t occur, because other taxes embedded in products would be eliminated, so the price of goods would remain about the same. Hank Adler makes an excellent case to defeat this assumption, in reference to the sales tax component of Herman Cain’s 9-9-9 plan:

One need only look to the annual report of Safeway to understand the impact of 999 on grocery prices. Because the grocery business is incredibly efficient and there is significant competition, there are very, very low margins in the industry. The pretax profit in good years for Safeway is only about 2% of sales and the Federal income taxes therefore are less than 1/2% of sales. After making a reasonable guess based on other information in the Safeway annual report, the total Federal income tax plus Safeway’s portion of their employees’ payroll taxes is less than 2% of sales. Assuming that would all be passed through to the customer in the way of price reductions, the price of food must increase by about 7%.

This is, of course, in reference to the effect of a 9% tax. Consider this effect with a 30% tax!

Third: FairTax doesn’t eliminate payroll taxes. It doubles them. Another inclusion stated in the FairTax legislation (see link at bottom), is the requirement that businesses pay the 30% markup on wages and salaries if the employee’s services constitute a “taxable service”, defined as:

A taxable service is used to produce, provide, render, or sell a taxable property or service if such property or service is purchased by a person engaged in a trade or business for the purpose of employing or using such taxable property or service in the production, provision, rendering, or sale of other taxable property or services in the ordinary course of that trade or business.

This definition is extended to also include “research, experimentation, testing, and development”.

Translation: Since virtually every employee (other than a personal employee such as a maid or chauffeur) meets this definition, every employer will be required to pay a 30% tax on wages and salaries.

If this doesn’t make you, the reader, jump away from FairTax right now, I don’t know what will.

Fourth, this 30% markup on everything extends to purchases by state and local governments. Yes, you read that correctly: State and local governments will have to pay taxes to the federal government. This means two things to you: 1) Your state and local taxes will go up; 2) State and local governments will be in continuous debt to the federal government.

This brings us to the Fifth point: The claim made by FairTax advocates that FairTax would eliminate the Internal Revenue Service. This is false.  As you can see in the FairTax bill (see link at bottom), the IRS would merely be renamed as two new agencies: The “Excise Tax Bureau” and the “Sales Tax Bureau” of the Department of Treasury. Some personnel would be transferred to the Social Security Administration to administer the prebate program (see “Eighth”, below).

However, the responsibility of collecting the tax would be transferred to state tax departments. In other words, not only would state and local government be constantly indebted to the federal government, but would also be required to perform work for the federal government.

This bizarre arrangement has another implication: It paves the way for further federal intrusion into state affairs. Instead of Congress debating over ways to fund new mandates on the states, Congress will simply be able to place mandates on the states in exchange for a tax credit. Cash-strapped states (i.e. every state, currently) will accept these opportunities to lower their tax burden to the federal government.

Stated differently: You can kiss the Tenth Amendment goodbye.

Sixth: On the subject of Constitutional amendments, we encounter another problem with FairTax: The Sixteenth Amendment, which authorized the federal income tax. Adding a constitutional amendment is extremely difficult; it’s even more difficult to repeal one. In the case of FairTax, in order to be constitutional, both would have to happen: The Sixteenth Amendment would have to be repealed, in order to prevent Congress from taxing both incomes and sales (and you and I both know Congress would do that if given a chance), and to authorize a federal sales tax. FairTax advocates believe the Constitution already permits a national sales tax. I disagree. The Constitution authorizes taxes which are limited in scope- excise taxes, which are currently applied to a specific category of goods- but does not authorize a universal tax on the sale of all goods and services. We already have enough problems with Congress assuming powers not expressly granted in the Constitution, without handing them another one.

Seventh: On the subject of federal power grabs, let’s consider an implication of any (and every) sales tax. Governments use sales taxes to manipulate purchasing habits by exempting certain products from taxation. The states are limited in their ability to do this, however, since a price difference of 5-8% generally isn’t enough incentive to change the buyer’s mind about a purchase. The federal government’s ability to manipulate purchasing habits is also currently limited to income tax credits, which can be claimed at the end of the year to partially offset the cost of a major purchase such as a hybrid car or a new home, months after the purchase is made. The ability to immediately alter the shelf price of items by 30% or more would give the federal government an unprecedented ability to centrally plan and manipulate the economy.

Eighth and last is the “Prebate”. As shown in Part One, consumption taxes are highly regressive. In an attempt to offset this regressiveness, the FairTax proposal includes a “prebate”, a check issued to every household in the United States, every month, to offset the amount of sales tax paid up to the poverty line.

This, of course, presents two significant issues:

1) Any argument that FairTax would reduce federal bureaucracy is patently absurd, given that this proposal means the federal government would now have to issue more than a billion ‘prebate’ checks every year;

2) The next time our government experiences a budget crisis (as we’re experiencing now), there will no doubt be an effort to “means-test” the prebate- just as there are now proposals to means-test Social Security and Medicare. A “means-tested” prebate would amount to yet another welfare grant. Instead of working to reduce the cost and scope of the welfare system, this would only add to it.

In sum: In addition to all the problems with consumption taxes generally, FairTax would give us a stealth tax, embedded in the cost of goods and services, which uses ‘fuzzy math’ to conceal the true rate of taxation; FairTax would present insurmountable Constitutional issues; it would give the federal government unprecedent power to manipulate both the economy and state governments; and would pave the way for a costly new welfare benefit.

Folks, don’t be hoodwinked by slick FairTax salesmen. Don’t make the mistake of assuming (as many FairTaxers do) that anyone opposed to FairTax is a “closet liberal”, or “opposed to change”. And don’t blindly accept any change just for change’s sake.

You can read the full text of the FairTax bill presented to Congress (the most recent version) here.

“Yes We Cain” Turns Into “Maybe We Shouldn't”

Photo: freerepublic.com

2012 GOP Presidential hopeful Herman Cain told his supporters on Tuesday that he is reassessing his campaign after Ginger White announced to the world that she had had an almost 13-year apparent pay-for-play sexual affair with him. After weathering numerous accusations of sexual harassment going back a decade or so, the Cain Train looks like it will be derailed over this [alleged] long-term adulterous affair. When politicians say they are “reassessing” their campaign, that usually means they either want to gauge the possibilities of debunking these latest accusations…or whether they can still get the needed financial support to make a serious run for president in 2012. Let’s face it, without millions of dollars in campaign contributions in today’s political climate the candidate is dead in the water. That is just the nature of the beast, as in the American political arena of today.

While the mainstream media operatives are quick to jump on the “Cain’s campaign is dead” bandwagon, there are other more viable reasons that point to why the Cain Train seemed to be running out of track recently. Special hat tip goes out to Erick Erickson of redstate.com, who explained some hard truths about Herman Cain’s campaign problems in today’s Morning Briefing:

In the past 24 hours, I’ve had a lot of people ask why so many Herman Cain supporters would abandon him over this adultery allegation and not the harassment stuff. Well, it’s because people didn’t really believe the harassment stuff. But what’s more, a lot of these same people are wondering why people would jump from Cain over this adultery stuff to Gingrich who is on his third wife, having cheated on Wife 1 with Wife 2 and cheated on Wife 2 with Wife 3.
A caller to my radio show last night summed it up better and more succinctly than me. He said it was not the adultery. After all, we are all sinners. We all like sheep have gone astray. What it is is the incompetence of the Cain campaign’s handling of these several stories. The caller’s voice quivered with anger. He was angry at Herman. He felt betrayed, not because of what Herman may or may not have done, but because this caller backed Herman as the man who could run America and fix its problems, when in reality he can’t even run a campaign and fix his campaign problems.

That’s why, as Herman falls, Newt rises. Written off for dead by many, including me, he has been able to fix his problems in a way Cain has not.

As Erick points out, Cain’s campaign has proven to be fairly incompetent at critical times, leading many to speculate as to whether he is actually making a serious run, or whether his campaign is all just a charade to sell books and gain notoriety. From Cain’s campaign chief smoking in a TV ad, to the ill-timed announcements his staff have made that seem to contradict Cain statements afterward, one must draw the conclusion that Herman Cain did not pick his campaign staff very well right from the beginning. That leads us to make a very crucial observation: If Herman Cain can’t even pick out effective, viable primary campaign staffers, just who could we expect him to install in his cabinet if elected POTUS?

When evaluating Herman Cain on leadership qualities alone, he has also shown a propensity to be ill-prepared as the debates have ratcheted up to include serious topics, such as Foreign policy and entitlement reform. Cain being a career businessman, [as opposed to a career politician] has gotten him a pass in the early debates on serious questions. There is no excuse for a GOP Presidential candidate that proves time and time again that he not only lacks experience, but has also refused to put in the effort to study up on any proposed policy reforms needed to get this country turned around. This became blatantly evident when Cain and Gingrich held a one on one sit-down about a month ago, where Cain deferred to Gingrich on almost every question he was asked in saying, “ I’ll let you take that one Newt.” Cain simply could not answer how he would effectively solve America’s problems without letting Gingrich take the lead, and then expounding on Newt’s answers.

To the very informed GOP Primary voters, this was the beginning of the Cain Train derailment, and rightfully so. Whether the sexual harassment allegations were blown out of proportion by the media or not, (and they were) all of that really didn’t matter when the public was exposed to Mr. Cain’s shortcomings on viable conservative policy-making decisions and planning, along with his poor debate performances. With the [alleged] Ginger White long-term adulterous pay for play sexual affair coming to light, it looks like the Cain Train will just be derailed sooner than was inevitable, simply due to his actual lack of true conservative policy-making knowledge that is oh-so-evident today, if we just look at it closely enough. Taking into account all of the above information, we can certainly expect to see the Cain Train pull out of the GOP Presidential candidacy station for the last time in the next few days, and sadly so. Herman Cain has brought a new level of enthusiasm and a refreshing batch of quips and quotes that was sorely lacking in the GOP primary contests of years gone by. The only real question left is whether he will gracefully put his enthusiastic support behind Newt Gingrich’s campaign, or do a complete about-face and support the GOP establishment candidate Mitt Romney. Only time will tell.

2012 just can’t get here fast enough!