Republic Rules - The U.S.A. is a great representative republic.

… or “Why We Need Congressional Term Limits”.

At the very root of the current economic downturn was INTERFERENCE by Congress in bank lending practices… rules requiring lenders to provide mortgage loans to people who objectively did not qualify for them (that is, had a high probability of not repaying the loan)… and GUARANTEEING those risky loans (which led to many other bad practices, such as leveraging via mortgage-backed securities and such). It was an unsustainable scenario… one that ignored “real world” realities… and resulted in inevitable defaults. And that started a cascade of problems that we will be years trying to work out of.

NOW, even though we nowhere close to being out of “trouble”, Barney Frank wants to loosen standards yet again:

Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to “roll the dice” in the name of affordable housing. That didn’t turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity — with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.

Source: Wall Street Journal

Even children who don’t listen to Mom and burn their fingers on a hot stove remember their lesson longer than Barney Frank!

If ever there was an example of why we should NOT allow elected officials to make a career out of government service, this is it. Just like we allow a President two terms and no more, the same rule should apply to members of Congress. That body of government has become far too populated with a power elite who are either arrogant, idiots, or entirely self-serving.

I think many of our problems have come about due to the inability of new representatives to influence change since they are up against a firmly entrenched core of lifetime Senators and Representatives who know how to exert their power effectively.

The best long-term solution is TERM LIMITS. Yes, now is the time for CHANGE.

Despite denials from about half of our own citizens, it’s readily apparent that changes are happening in the U.S… and not for the better. It’s a sad day, though, when it’s recognized by the Russians:

From Pravda-

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.

Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.

First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.

Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.

Then came Barack Obama’s command that GM’s (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.

So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride.

Again, the American public has taken this with barely a whimper…but a “freeman” whimper.

So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.

The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.

The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

It’s enough to make you cry.

A single line from an excellent book, The 5000 Year Leap, has really made me think:

“The physical sciences capitalize on the lessons of the past, but the social sciences seldom do.”

We would never have the great technology tools and toys, the miraculous medicines, or the comfortable lifestyles that we do if we had to start all over again every generation or two to establish the underlying knowledge gained by previous engineers and scientists. It was a relatively few years after the Wright Brothers that commercial jet airlines were commonplace and, shortly after that, man walked on the moon! Each step forward became the foundation for the next.

Seems very logical, right? WHY would we want to move backwards and go through all the trials and troubles, all the research and experimentation to find the answers again if we already know them? It would be crazy to do that! Repeating the same mistakes would waste time, effort, and money… not to mention the benefits gained from whatever good things the results lead to. You seldom see the scientific community behave that way… on the whole, it steadily moves FORWARD.

But, when it comes to human behavior, it seems we are doomed to repeat the same mistakes periodically. A small percentage of those might be classified as disease or addiction, such as drinking or gambling, and are a bit easier to understand. A person can intellectually know that, say, drinking disagrees with them… but cannot control themselves. Such individuals often require assistance to correct their actions, need a support network to help them deal with the problem.

But what about “regular” behavior?

Perhaps it has to do with short memories, or the hubris of the young rejecting ideas of their elders, or simply not thinking about the ultimate implications. For example, it is not uncommon to find people who spend more than they make or drive recklessly or engage is some other dangerous behavior. Unless they’ve been soundly taught and can exercise personal restraint and discipline, the obvious association between immediate excesses and future repercussions is either unknown or ignored. Despite the predictable outcome, it seems they will not listen to reason and, sadly, must learn the lesson on their own. With luck, that will happen without permanent damage being done… but sometimes the lesson is fatal.

This occurs on a collective level, too. Societies once dominant fall into history. Consider the ancient Romans. From virtually nothing, the Roman Empire became a great military and technological people. At its peak, Romans lived a life of luxury surpassing that of other cultures… and it became their downfall. They forgot the precepts of their founding and declined into depravity.

Could the USA be experiencing the same thing?

We have enjoyed a level of freedom and individual success unmatched in the history of mankind. At times, it seems many of us take it for granted. Assume everyone has the same rights. Presume we will always have our freedom… that it will never go away, that it CAN never go away.

These same people apparently think the governing system that conveyed that freedom and established the basis of our success can… and should… be “tinkered” with. That it can be improved. While nothing is perfect, and there is room for improvement in most things… the path to better things is not to repeat the mistakes of the past. It took our Founding Fathers much thought, considerable debate, and several actual attempts to develop the BEST foundation for our country, the Constitution. It did not come easily and certain options were purposely omitted. One of the original goals was to avoid a dominating, centralized government… to put MORE power in the hands of the people rather than put government in control of the people.

Are we making progress or repeating old mistakes?

Today, I fear we are moving in the wrong direction… that people are willingly handing over some of their power to government for some promise of well-being. A promise that is easy to give and virtually impossible to deliver.

Bigger government is NOT the answer to our problems. WE, individually, must look to ourselves for the solutions and assert our power and authority over the government… while we still have it… to guide our nation back to the basics of its greatness.

Once again, nationalized health care has become a hot topic and, given the current shift of power in Washington, it has a strong chance of gaining traction. WHY is this such a controversial issue and should the government become the primary provider of health care services?

I’ll cut to the chase: it is just another opportunity for government (read: politicians) to make a huge grab for more power and control… and it comes at the expense of individuals. As always, though, proposals are couched in claims based on half-truths, assumptions, and a purposeful effort to shift our attention away from the real problems. Once again, I’ll assert that government doesn’t really want to solve problems, it just wants to APPEAR to solve problems.

So, where do we start?

• Should we have a national health care system?

My answer is NO. Where in the Constitution would the federal government find the authority to do so?

It seems there are many citizens as well as elected officials who believe government can do anything it wants and casually overlook the confines of power laid out in our Constitution. Somehow, the “equal opportunity” we are all guaranteed has morphed into “equal outcome”. I blame much of this on lying politicians (surprise!) and our education system (but that is another discussion).

• Has government EVER been successful delivering a “consumer service” more efficiently than the private sector?

I’ve asked this question many times and have yet to find a good example that can be used to support an argument that government, even if it had the right to do so, is even capable of providing services more efficiently than “the market”.

We’re not talking about providing national military, police, or court services, of course… those are beyond the scope of this discussion and government does have a place in those arenas.

While more intimate, health care is just a consumer service… one skilled individual (doctor, nurse, or other practitioner) providing personal services to another individual (you or me, as a patient). The process isn’t all that different from working with a real estate agent, financial adviser, attorney, or even an auto mechanic… we chose the person we feel is most qualified for our needs, whom we are comfortable with and trust, and who is willing to provide services at a price we’re willing to pay. If they do a good job, it’s a win-win… and if they don’t, the results could be devastating.

Does the government have a right to be involved in that relationship? Should the government determine who I can work with, what they can charge, the scope of services they can provide, the amount of time they can spend with me?

• Is there actually a problem with the health care system that needs to be “fixed” in the first place?

Yes, there are problems. Is nationalizing the system the ONLY way to solve them? Absolutely not! In fact, I believe it is the most heavy-handed approach that could be considered.

An aside: It’s worthwhile to keep in mind that INSURANCE of any kind is not intended to pay regular, ongoing costs… it is designed to pay for EXTRAORDINARY COSTS.

Auto insurance, for example, doesn’t cover gas and oil… nor the 20,000 mile maintenance of your car. Those are regular expenses that you pay. The insurance covers BIG expenses that MIGHT come up if something out of the mainstream happens, such as an accident. Most people can afford to pay for gas and oil, or to replace an alternator, if it goes out… but would have difficulty coming up with $10,000 to pay the unplanned expense of a major collision repair or $25,000 for the medical expenses of the passenger who was hurt in that accident.

Consider some of the fundamental REAL issues and see if nationalization seems like the best solution (or if it even addresses the actual problem!):

• PORTABILITY - one of the big problems is that, unlike in previous generations, employees frequently change jobs during their earning years. There was a time when people would go to work for a company and retire from that same company… but that rarely happens any more. We have learned to market our skills better, seek greater opportunities in wider geographic locales, and take advantage of the freedom we have to change jobs as we please - or to go into business for ourselves.

  But changing jobs often affects our insurance coverage. Why?

  Once again, we discover that government itself caused the problem! Years ago, Congress manipulated the tax code to make insurance coverage a deductible employee expense for companies… but not for individuals. This means that companies can offer to pay, say, $100 of an employee’s cost of participating in the company insurance plan (which is a relationship between the employer and the insurance company) and it is not counted as taxable compensation for the employee. That’s a good deal for the worker SO LONG AS THEY ARE EMPLOYED at that company. And, since Congress did not give us, as individuals, the same tax advantage, we must pay for insurance in AFTER TAX dollars if we want to buy insurance on our own (directly from the insurance company).

  This financial advantage is what led to where we are today: most health insurance is provided THROUGH the employer. An unintended consequence of Congress skewing it that way is, if we change jobs, we must qualify for the new company’s insurance plan… which might not happen if I have a pre-existing condition (heart problem, diabetes, whatever…).

  Logically, the relationship really should be between the insurance company and me… it shouldn’t matter where I work or if I change jobs… and even if I do change jobs, I don’t have to qualify for the new employer’s plan, I already have my own insurance.

  THIS is an easy problem to solve… just change the tax code. People don’t necessarily WANT to buy insurance through their employer, it just makes better financial sense. We get “more for our money”. If the “playing field” were level, people know it would be to their advantage to buy insurance directly since they could “take it with them” where ever they worked.

• UNINSURABILITY - if I don’t have insurance and want to buy it, I must qualify. No insurance company wants to be obligated to cover the medical expenses of someone who has a pre-existing condition… this is called adverse selection. It is clearly not in the insurance company’s interest to provide coverage for someone who is significantly more likely to incur expenses than an “average” person. Or, if they do provide coverage, they will certainly want to charge more than for an average person. This is just the reality of the situation.

  The exact same thing occurs in with auto insurance. I’m a very good driver (no tickets or accidents) so I get very good rates… far better than someone who has been at fault in an accident and has several speeding tickets or a DUI, for example. As it should be. The high risk driver pays more than the good driver, if they can get insurance at all.

  In most states, since auto insurance is REQUIRED, there is a particular problem to be addressed. Insurance companies can charge different rates based on the driver’s background but, at some point, they simply do not want to provide the insurance. The driver has been in too many accidents or whatever… but the state requires insurance. In this situation, the states have created a “bad risk” insurance pool where all the insurance companies that operate in the state must provide coverage for the “really bad” drivers who must buy through this “pool”. So, drivers CAN get insurance but have to pay dearly for it and the insurance companies spread the risk evenly between themselves, so no single company is carrying an undue burden (financial risk).

  For those who cannot buy their own insurance due to pre-existing conditions, it seems one “government solution” would be to require insurance company participation in a similar health insurance high-risk pool? Why does government want to revamp the ENTIRE system to address an issue that actually affects only a fraction of the people?

  If you listen to the politicians, you hear some WILD numbers spouted about the “uninsured”. We must be careful, though, that we aren’t being misled.

  While there is some small portion of the population who are truly uninsured… who WANT insurance and CANNOT GET it because of a pre-existing condition… but MANY of those who are categorized as uninsured are:

  – in between jobs and, as a result, don’t have insurance coverage TEMPORARILY. We have a very mobile work force and, at any given time, a large number of people are in transition. Statistically, these people get counted as “uninsured” but, in fact, obtain coverage once they enter the work force again. Is this a problem that needs a national health care problem to resolve? Of course not! Once again, how about making it more attractive for people to have a direct relationship with their insurance company, as described above, so they will retain their insurance company during the periods they are changing jobs?

  – have simply decided not to pay for insurance. Many people, especially YOUNGER people, fall into this category. It is THEIR CHOICE not to bear the expense of health insurance. Undoubtedly, there is some portion of this group who feel they cannot afford it… choose to pay for rent or a car instead of insurance… but MANY in this group CAN AFFORD to pay, but just don’t want to! They decide it is a “better value” for them to buy cable TV, ipods, and other luxuries. Besides, most in this group are aware that, if they need medical care, they can simply go to a local publicly-funded hospital and get treatment… and not be forced to pay. These people have learned to “play the system”… to get something for nothing. Is the government going to FORCE EVERYONE to buy the “national insurance”? How does a national health insurance program address this aspect of the problem?

• RISING COSTS - there is no question that health care costs have increased, as have all costs of living, but at a higher rate. Some of this is due to the many advances in technology, diagnostic and treatment tools that help provide better and faster medical services (something we all want) but at a price. This would seem a normal progression of events, though. Almost all industries have seen big strides in this area.

  One big part of those rising costs, however, revolves around the dramatic increase in legal activity: malpractice suits. Lawyers have learned there is “easy money” in the medical field! And empathetic courts have allowed this activity to not only continue, but to spiral out of control. In addition, doctors now routinely order unnecessary tests and treatments as a defensive measure to try to keep lawyers from being able to point out some deficiency in their handling of a patient’s problems.

  The government needs to seriously eliminate these abuses and, while we get lip service from Congress, there has been no serious effort toward tort reform. Will nationalized health care address this issue? I think not… and it has every likelihood of being the foundation for even greater abuse if the government might be the ultimate payer of big judgments.

There ARE other aspects of this issue, of course, but these are some of the major ones. I conclude that the nationalized health care ideas being discussed today do not really focus on some of the fundamental issues and, as a result, will fail to resolve anything. Instead, a huge government bureaucracy will be created, expenses will continue to rise, the system will be ripe for abuse and fraud, the true problems will persist, and politicians will have more power over our daily lives.

Politicians are just performing like magicians again, making us look at one direction while purposely manipulating things in the other. For the very few in our country who might come out ahead under proposed programs, the vast majority of us will pay a greater price in terms of money, quality of service, government control, and individual freedom.

Ask yourself:

Can you think of any DEFINITIVE examples supported by comprehensive, non-political analyses demonstrating the case that government, without a doubt, can deliver consumer services more efficiently than the private sector?

No rhetoric, no baseless claims. Facts.

(I have yet to find one.)

You rarely see such deep political views stated openly.

President Obama clearly says that, when considering a nominee for retiring Justice Souter’s seat on the Supreme Court:

“I will seek someone who understands that justice isn’t about some abstract legal theory or footnote in a casebook, it is also about how our laws affect the daily realities of people’s lives… whether they can make a living and care for their families, whether they feel safe in their homes, and welcome in their own nation. I view that quality of empathy, of understanding and identifying with peoples’ hopes and struggles as an essential ingredient for arriving at just decisions and outcomes.”

The problem, of course, is that judges… especially those on the highest court in the nation… are supposed to be BLIND to how laws affect people’s lives. Their job is to simply INTERPRET THE LAW. Decisions and outcomes in a court of law cannot be affected by the hopes and struggles of people… those are intangibles. Outcomes should be dictated by an honest and literal interpretation of the written law, not by a subjective evaluation of the circumstances.

It IS the responsibility of our legislative branch to consider how proposed laws might affect the lives of citizens BEFORE they are passed. THAT is when subjective discussions take place and sometimes emotional decisions are made whether or not a law will be made.

Once it becomes a law, however, then the judicial branch of our government is charged solely with interpreting it. Of course, a law could be found in conflict with the highest law of the land, our Constitution, in which case the Supreme Court can determine that law to be invalid. But a court cannot legally change or rewrite a law, that is the sole purview of the legislative branch.

Sadly, some judges choose to over-reach… they “play” the system, “bending” the law to meet their personal agendas. Instead of strictly interpreting the law, they manipulate it. They “legislate from the bench”.

So, our President basicaly states that he WANTS to find a Supreme Court nominee who will make decisions based on something other than the law. I find that disappointing. If he were describing attributes of a good LEGISLATOR, I would agree. I think he has missed the mark on the qualities OUR COUNTRY needs when selecting judges.

Most of us have sympathetic feelings for our fellow citizens. I have worked hard, life hasn’t always been easy, and am grateful for what I have, so I try to help others in need. I choose to do this almost exclusively through my church since I have more trust that the money is going where it is needed and can see the good results, in many cases.

I have also learned NOT to support certain organizations since most of the money they receive goes toward administration, marketing, overhead, and very little actually reaches the people they purport to help. These groups are really in business to help themselves, not to help others..

And I have little confidence the government can do a better job when it comes to “charity”. I’ll be generous and say that the hearts of the politicians and bureaucrats MAY be pure in their desire to help others (although there sure seems to be a lot of self-interest involved!), government programs are probably as ineffective as the deceptive groups I mention above… but worse. Unlike the unscrupulous “charitable” organizations where I have the choice of supporting or not, government programs MAKE ME PAY… even when I know they can’t be as effective with MY money as I can!

The recent financial crisis was caused primarily by just such a program.

Congress, in all it’s wisdom, decided to interfere in sound business practices and manipulate lenders into providing home mortgage loans to people who really couldn’t qualify for them. Common sense tells you that there was going to be a problem somewhere down the road… it doesn’t take a genius to predict that many of those loans would not be repaid. Under the guise of “helping people afford houses”, Congress established the foundation for a “house of cards”. I always worry about unintended consequences when it comes to government programs.

Undoubtedly, there were some people who got an “easy loan” (no income verification, no proof of employment, no down payment) but made sure they made their payments. I applaud those folks… I believe they were the very few who represent the bright side of this picture.

I am confident, however, that the “word got out” to a huge number of people that they could get a home loan just by asking for one… and they did. While there may have been some who were coerced into borrowing more than they should… or into borrowing at all… I would bet that a LOT of these people KNEW they couldn’t repay the loans and decided to take advantage of the opportunity for as long as it lasted.

Had the situation stopped there, it still would have led to problems but on a relatively small scale. Banks and mortgage companies have a limited amount of money to make home loans and that supply would have been depleted at some point. Those companies would have been left holding a certain number of sub-prime loans and, when they started to default, those companies would have suffered. Pain that would have been a direct result of coercion by Congress in the first place, I might add.

But government has a hard time knowing when to stop. Congress added fuel to the fire through its control over two “government sponsored entities” called Fannie Mae and Freddie Mac (FNMA, FHLMC). These organizations were allowed to BUY sub-prime loans from banks and mortgages companies as well as GUARANTEE THOSE LOANS. This meant the originating banks and mortgage companies sold their loans and then had money to MAKE MORE (bad) LOANS! This was the basis for a vicious cycle… the house of cards started growing bigger.

The banks and mortgage companies liked this arrangement. Instead of holding on to a batch of questionable loans, they could sell them and take a little profit each time. Had Congress pressured them to make the suspect loans but not facilitated the transfer of that big potential liability, the banks and mortgage companies would have eventually balked. They would have started to feel the effects of slow/no payments coming in on the loans and that reality would have made them scream publicly at Congress. Instead, Congress enabled their liability to be passed along to others… so why should they complain?

But the real fuel to this race to disaster was provided by government guarantees of these loans. It’s one thing to guarantee loans made to qualified buyers… it provides capital for more loans and everyone benefits. It’s another thing entirely to guarantee risky loans… but that’s what happened. By the sheer stroke of a pen, loans made to people who really didn’t qualify for them magically became the same as loans to people who did. Reality was ignored.

Wall Street figured out that it could bundle a lot of sub-prime loans into a package and sell shares to investors. These “mortgage backed securities” (read: government backed securities) were attractive to investors since they could earn a higher promised rate of return WITH the guarantee of our government behind their investment. What a wonderful concept!

Investors scrambled to buy these great securities!! So Wall Street pressured banks and mortgage companies to supply more. And… surprise, surprise… more unqualified borrowers were found to buy houses!

Given the big demand, abuse became rampant up and down the supply chain. The house of cards became a teetering skyscraper!

This went on for a few years until reality caught up with the flaw in the system… payments weren’t being made as expected… and the repercussions cascaded through the complex maze of loans and securities. It’s amazing this “scheme” was sustained for as long as it was.

Had a private company been behind the whole scheme, we would already have had Congressional investigations and the people responsible would be in jail. But CONGRESS was behind all this… and there are no investigations… and nobody in Congress who pushed this scheme are in jail. Yet.

Inevitably, the house of cards came tumbling down. It should have been a surprise to nobody. It was totally predictable. It was a situation CREATED and SUSTAINED by Congress.

The resulting financial crisis has had a devastating effect on many who were not event participants, much less beneficiaries, in the activities that caused it. WE are being made to suffer for the actions of others.

In typical political fashion, Congress has shirked all responsibility for the problem and brazenly puts itself forward as the source of the solution! I find this laughable.

But they are our elected “leaders”. Some leadership.

Rather than letting companies fail, Congress has provided MORE SUPPORTS… and now we see the consequences of that action.

SOME people who are now facing foreclosure are either looking for their own little bailouts OR taking advantage of yet another opportunity to “get something for nothing”. Taking a page from the President’s chief of staff (”You never want a serious crisis to go to waste“), some people see impending foreclosure as a last chance to grab the brass ring:

Seeing they are about to lose their houses, some homeowners are having “sales” despite agreeing to a standard clause in their mortgage to not “waste or destroy, damage or substantially change the property.” … getting whatever cash they can for ANYTHING in the house: “everything from the kitchen sink to countertops, cabinets, toilets, the hot water heater and the furnace“… and worse.

Loans backed by the government generally require a home to be in what is considered livable condition, so a foreclosed home will have to be brought back up to proper condition before it can be sold. This means taxpayers are not only backing the loan but may have to also pay for repair and replacement caused by further abuses of the system.

When you make a loan to someone who didn’t qualify… who didn’t have any money in the investment… who has nothing to lose if “extra damages” are incurred (and can actually get money by selling parts of the house!), it’s going to happen.

This just further accentuates the fact that good business practices (such as requiring a down payment) cannot be arbitrarily ignored without incurring ADDITIONAL RISK in the deal. Thanks for this one, too, Congress!

Our Constitution provides us EQUAL OPPORTUNITY… not equal outcome. So long as the same qualifying measures are used for all home loans regardless of who is applying, it is a fair system. ANY attempt to “legislate” the outcome (in this case, granting loans to people who don’t qualify) will lead to bad results. While they haven’t been as visible or climactic, how many other government activities are having the same kind of effect? How many other “ticking time bombs” have our elected “leaders” created? When will the other shoe drop on, say, social security?

Despite this, no lessons are being learned. Apparently, nationalized healthcare and mandated “green energy” are the next items on the agenda. How fraudulent will these turn out to be?

Government needs to get back to basics, follow the guidance of the Constitution, and keep out of activities that cause far more “bad” than they can ever hope to do “good”.

For quite some time now, our society has been slipping into some very bad habits. During the exceptionally long recent election cycle, clear thought and civility went into a tailspin. I had hoped for a recovery after the inauguration but, instead, the slope steepened. Why is political discourse so strident? And why have these attitudes carried over into so many other areas of our everyday lives?

While I hold some mainstream views, I am certain not everyone agrees with each and every one of them. That’s fine. I have no delusion of “converting” everyone to my way of thinking. I enjoy an intelligent discussion and welcome the opportunity to debate issues… but detest the way many people go about that today.

I have found that the majority of folks I talk to today on any given specific topic are relatively uninformed. Most are AWARE of the issue, many can recite the “talking points” of their side’s stance, but very few can actually discuss the facts and implications surrounding the issue. While it’s not a scientific study by any means, I’ve found that the majority of people have a shallow understanding of most issues… and have not really thought through the pros and cons for themselves… their position is not based on their own evaluation of the topic, it is based on “going along” with their political party or peer group.

When you press people for the rationale behind their position, many become very defensive. I suspect they realize they don’t KNOW why they are taking any particular stance and resort to repetition, avoiding the question, shifting the discussion to an irrelevant point, stating blatantly contradictory reasons, stoop to personal attacks, or just start shouting. It seems everyone feels an obligation to take a strong position on issues but have little actual basis for doing so. Too many people have delegated their “thinking” to others and are trusting the integrity of those decisions… to their own detriment.

I’m dismayed with the level of hypocrisy, as well. It isn’t difficult to find examples of people crudely denouncing the actions of others… say, lack of tolerance for an opposing position… while exhibiting the same behavior themselves. Even a modicum of thought would reveal how stupid that makes them appear.

We have become a society driven not by sound ideals but by the philosophy of “win at all costs”. Breaking the rules, bending the facts, even outright lying is OK if you win! The end justifies the means… who needs principles and morals?

“If it’s good for ME, it’s good… even if it isn’t good for the country… even if it comes at the expense of others… even if it is immoral or illegal… even if it doesn’t make any sense. It doesn’t matter if I don’t have good reasons behind my decisions, if you don’t agree with me, I’m going to do everything I can to trash you and your reputation! I don’t want ANY opposition. EVERYBODY must conform to MY desires!!”

It’s sickening.

WE no longer act like we’re on the same team (country)… and have become losers.

It’s almost April 15th… have you filed your tax return?

Of all the government intrusions, I rate this the highest. Not paying taxes (so long as they are reasonable)… FIGURING OUT how much tax is due! The ACT of preparing a tax return (or PAYING someone to do it). The tax code is too complex… unnecessarily so… and the ONLY REASON it continues is to empower politicians and their lobbying supporters. The current income tax code exists only to benefit special interest groups.

It’s time for The FairTax Act (HR 25, S 296), which is nonpartisan legislation. Here are their Frequenty Asked Questions page that will quickly describe a very well-thought-out plan to REPLACE the way taxes are collected. In a nutshell, The Fair Tax:

• Eliminates income tax along with all deductions, etc… replaces that revenue with a simple sales tax. No more filing tax returns.
• Provides a “prebate” which pays the federal sales tax up to a certain amount… so lower income people don’t have to pay unfairly.
• Everyone would know the federal tax rate… at a glance. Politicians could no longer manipulate taxes through deductions, exemptions, and other “slick” political methods.
• Enforcement would be easier since the number of businesses collecting taxes would be far lower than the number of individuals in our country.
• Does not change the AMOUNT of taxes collected… that’s a different battle… it only changes the WAY taxes are collected

Think about it… while you will pay more tax when you buy things, the cost of those items would not include corporate taxes AND you will have more money to spend since no taxes are withheld from your paycheck. The net price of the things we buy would be about the same.

Not to mention the HUGE DRAG ON OUR ECONOMY that “compliance” imposes… the time, effort, and expense of collecting the information and filing the necessary paperwork costs the U.S. more than $250 BILLION PER YEAR! In our tough economic times, this is one way to take an anchor off our economy that is costing us all a huge amount of money and returning absolutely nothing.

Here’s an interesting article that also indicates the time is right. I do disagree with that author’s point #3. The LAST thing we want is for taxes to be “invisible to the general public”… we WANT to have transparency in our taxation system. What we DO want is to make paying taxes as easy, quick, and unobtrusive as possible. Perhaps that’s what the author really meant, though.

Most of us pay sales taxes now, so it’s a familiar routine… a federal sales tax would just change the amount… but we can also look right on the receipt and know exactly how much tax we paid. The Fair Tax would take away a lot of the power Congress has to manipulate taxes… which gives more power to US!

It is a sad day.

If a recent poll is to be believed, only 53% of American adults believe capitalism is better than socialism.

Of all the economic systems EVER tried in the history of the world, capitalism has been responsible for more ADVANCEMENTS in human rights, freedom, and prosperity of individuals than any other. Period. Capitalism is not perfect, it does have some weaknesses… but it is so much more superior in the ACTUAL RESULTS it achieves that, if you review the history of mankind, there is really no question. Not THEORETICAL results, actual results. Reality.

I place most of the blame for this change in attitude firmly at the feet of our “education system”. I use quotes because it has evolved in recent decades into an INDOCTRINATION SYSTEM permeated with views antithetical to those conveyed in our Constitution… to “the American way”. After a few generations, we have been infiltrated from within by people who hold political and economic beliefs that they did not objectively arrive at through their own critical thinking. Many, in fact, have been brainwashed NOT to think for themselves and to just blindly follow the “party line”. The dumbing down of the United States will lead to our demise.

The Constitution gives a great deal of latitude for differing beliefs… but the foundation of our great country cannot be undermined.

At its core, though, the real problem is many people don’t understand what capitalism really is. They have been mistaught or misled to think of it as one thing… when it is actually altogether different. There are many misconceptions and most are based on lies told by people with different agendas.

Today, too many people are driven by theory, pure politics, and emotion rather than facts, true patriotism, and rationality. While being a “dreamer” is the fate of some, it’s no way to “run a business”. Or a nation.

OK, so Congress causes a problem … the financial mess our country is in … and, while ignoring or denying their involvement, assert that THEY are the only ones who can “solve” the problem. While I have very little confidence that they can (or should) do that, it doesn’t change the fact that Congress decided to “bail out” a number of companies by either loaning or guaranteeing the obligations of a number of troubled private companies.

True to typical political meddling, they didn’t think through their bailout plan and got caught providing public backing to companies that then paid some very large bonuses. The AIG uproar could have easily been prevented but Congress was too busy to either think through all the details of their deal… or did it too hastily, not providing all members of Congress to review the bill and “catch” the flaws.

Then, it blows up in their faces. The public is outraged to be providing support for a company and then learning that millions of dollars are being paid out in executive bonuses. It turns out that Christopher Dodd actually even HELPED let this happen… and, interestingly enough, he received a lot of support from AIG. Of course, THAT’s how things work these days in Washington. But I don’t really want to get into the argument about whether AIG (or those executives) did anything wrong… that’s a separate discussion.

Instead, let’s examine the “rest of the story”… or another aspect of it that demonstrates how Washington “manages” things.

With government “taking control” of many businesses these days… indeed, even entire industries… we should be concerned about HOW government will do the job. Or if they can, at all. Will government really have OUR interests at heart… or will it become just another opportunity to grab power OVER us? Here is a perfect example:

Fannie Mae and Freddie Mac, the two government sponsored entities supposedly managed by Congress… which were at the heart of the financial crisis by both encouraging sub-prime loans and providing government guarantees that then allowed those loads to be bundled and sold as mortgage-backed securities… will pay out $210 million dollars in bonuses to THEIR executives and employees, including $4.4 million to its top four executives! THESE organizations LOST over $100 million dollars last year, were grossly mismanaged and absolutely assisted in the current financial mess, are STILL paying bonuses!

THAT’s how Congress manages things. They jump all over PRIVATE companies, passing taxes targeting specific people, chastising management in the media, even forcing the CEO of GM to resign and CONGRESS CONTINUES to allow entities DIRECTLY under their control to continue with the very same kind of “bad behavior” they publicly decry. Elected representatives, such as Barney Frank, CONTINUE to support these organizations and you don’t hear a peep about taking any responsibility for their actions.

Yes, this is the way Congress “handles” things… and the deeper they extend their reach into the private sector, the MORE we will see this kind of two-faced activity.

You have to wonder what other things Congress will allow as they grab for more power. Here are two companies that Congress, itself, is responsible for managing. However, these organizations ALSO made campaign contributions to some members of Congress. Doesn’t that seem a bit too cozy? And then Congress allows it do the same thing it doesn’t want to allow private companies to do.

As they say: stay tuned. I am sure we WILL be seeing more of this hypocritical “management” by Congress… they just can’t seem to help it. We need to clean house and VOTE THEM OUT! They are no longer working FOR us, they are USING US!