News You Missed 10.10.13

The pursuit of Constitutionally grounded governance, freedom and individual liberty

"There is but one straight course, and that is to seek truth and pursue it steadily." --George Washington                                       

______________________________________________________________________________________________________________________________________________________________________

Rothbard on the FED: He Told Us So   by Gary North

The news that President Obama will nominate Janet Yellen as Chairman of the Board of Governors of the Federal Reserve System should remind us of the disaster that the Federal Reserve is and has been.

It was not quite 100 years ago that the Federal Reserve Act was signed into law by President Wilson. This was on December 23, shortly after the Senate voted for it. There was no serious opposition in either the House or the Senate. I have created a short link to the inflation calculator of the Bureau of Labor Statistics. We can see what it would take today to buy $100 worth of consumer goods in 1913. The number is $2,362. The link is here: www.bit.ly/BLScalc.

Back in 1964, Murray Rothbard’s little book appeared: What Has Government Done to Our Money? I read it that year. I regarded it then as the best short introduction to money theory I had ever read. My opinion has not changed. It even has a Wikipedia entry, which is well deserved. You can download a free copy here: http://mises.org/money.asp.  The inflation calculator tells us that it would have taken $313 in 1964 to buy $100 worth of goods in 1913. Rothbard blamed the Federal Reserve System and the abolition of the gold coin standard for the depreciation of the dollar. The FED is the guarantor of the fractional reserve banking system. Central banking guarantees the survival of fractional reserve banking. Once the nations went off the gold standard, he wrote, the age of inflation was assured.

In the twentieth century, governments, rather than deflate or limit their own inflation, have simply “gone off the gold standard” when confronted with heavy demands for gold. This, of course, insures that the Central Bank cannot fail, since its notes now become the standard money. In short, government has finally refused to pay its debts, and has virtually absolved the banking system from that onerous duty.

The debate today over the raising of the federal government’s debt ceiling is all sound and fury, signifying nothing. When Franklin Roosevelt unilaterally took this nation off the gold coin standard in 1933, that was the end of the debt ceiling limitation. In 1933, it cost $131 to buy $100 worth of goods in 1913. It would take $1,799 today to buy what $100 bought in 1933. Rothbard saw clearly the great evil of central banking. It increases the public’s confidence in the banking system. This confidence has made inflation inevitable. Faith in central banking has undermined the public’s confidence in the gold coin standard, where the public holds the hammer on monetary policy, because bank depositors can launch a run on the banks to demand cold coins. That threat restrains commercial banks from inflating.

One of the reasons the public could be lured from gold to bank notes was the great confidence everyone had in the Central Bank. Surely, the Central Bank, possessed of almost all the gold in the realm, backed by the might and prestige of government, could not fail and go bankrupt! And it is certainly true that no Central Bank in recorded history has ever failed. But why not? Because of the sometimes unwritten but very clear rule that it could not be permitted to fail! If governments sometimes allowed private banks to suspend payment, how much more readily would it permit the Central Bank—its own organ—to suspend when in trouble! The precedent was set in Central Banking history when England permitted the Bank of England to suspend in the late eighteenth century, and allowed this suspension for over twenty years.

The Central Bank thus became armed with the almost unlimited confidence of the public. By this time, the public could not see that the Central Bank was being allowed to counterfeit at will, and yet remain immune from any liability if its bona fides should be questioned. It came to see the Central Bank as simply a great national bank, performing a public service, and protected from failure by being a virtual arm of the government.

The public still trusts the Federal Reserve. It still rejects the gold coin standard. So, we see the Federal Reserve creating $1 trillion a year in counterfeit money, and almost no one protests. The investing world fears a return to the pre-2008 levels of monetary expansion. Say the word “taper,” and the stock market tumbles. Rothbard sounded the warning 49 years ago. Congress still ignores it. Academia still ignores it. Wall Street still ignores it. Janet Yellen will be confirmed. But before her term ends, she will face the horrendous consequences of what she has voted for as Vice Chairman. So will you. So will I.

######

The U.S. government will default on its debt only if U.S. President Barack Obama wills it.

Outside View: Raising the debt ceiling, a fool's journey  by PETER MORICI - UPI

House Republicans, by refusing to raise the debt ceiling until they obtain budget reforms, may be the country's last hope to avoid financial ruin. Each month, the government collects $250 billion in taxes and pays $23 billion in interest to public bondholders. If Washington can't borrow more money, it won't be able to spend all that it has planned. It comes down to who gets paid and what doesn't get bought.

Americans aren't deadbeats. Families without enough money to do all they like pay their mortgages and credit cards and cut back elsewhere. So must Washington. U.S. Treasury Secretary Jack Lew says he can't set those priorities. In an emergency, as the government's chief financial officer, that is exactly what he is paid to do. However, cutting back entails postponing, for example, the expansion of Medicaid as required by the Affordable Care Act and grants to universities for faculty summer money. By not raising the debt ceiling, Congress isn't reneging on bills already racked up. The existing debt, which can be serviced by paying the interest due, covers those obligations. Raising the debt ceiling simply permits Congress to run up new bills. And abandoning that debt ceiling discipline, as many in the financial community suggest to let Congress to spend as it pleases, would be the peak of folly.

The president says lift the debt ceiling and he will negotiate on those issues. However, any solution requires raising the Social Security retirement age from 66 to about 70 to accommodate Americans living longer, and finally doing something about the prices of healthcare services and drugs.  Yet, Obama has repeatedly stated he won't raise Social Security and Medicare eligibility ages. During the fiscal cliff talks, he refused to consider with Speaker John Boehner, R-Ohio, entitlement reforms to address escalating healthcare costs.

In the United States, the average cost of an angiogram is $914 but in Canada $35, the price tag for an MRI is $1,121 but only $319 in Holland and the painful list goes on. Neither Democrats nor Republicans are willing to address those discrepancies in the implementation of the ACA or proposals to replacing it. Only taking the money away will force politicians to deal with the painful truth: the price of healthcare, not access, is the real problem, and the U.S. healthcare system is likely the most inefficient and bureaucratically corrupt on the planet.  

When a board of directors considers whether to permit a chief executive officer to take on more debt, it asks whether the business will spend the money wisely. Americans would be nuts to want congress to lift the debt ceiling so that the Washington establishment can continue profligate policies that will eventually bankrupt the nation.

######

IRS Scandal: White House Illegally Took IRS Records of “Target” Groups

Obama originally claimed that Benghazi and the IRS attack on the Tea Party were “phony scandals”, assuming that the media would let him off the hook by focusing on distractions.

Instead, more and more evidence keeps coming to light (like how he met with the top IRS official 100+ times during the attack), showing just how corrupt and how criminal this administration has been since the beginning. For just a brief overview of the IRS scandal, read the 6 ways it leads to Obama.  Finally, we know that the White House wasn’t just behind the targeted attacks, but that IRS officials, at least, committed felonies by sharing target data with White House officials. In other words, someone needs to go to prison for years over this.

According to the Daily Caller:

·       Top Internal Revenue Service Obamacare official Sarah Hall Ingram discussed confidential taxpayer information with senior Obama White House officials, according to 2012 emails obtained by the House Oversight and Government Reform Committee and provided to The Daily Caller.

·       Lois Lerner, then head of the IRS Tax Exempt Organizations division, also received an email alongside White House officials that contained confidential information.

·       Ingram attempted to counsel the White House on a lawsuit from religious organizations opposing Obamacare’s contraception mandate. Email exchanges involving Ingram and White House officials — including White House health policy advisor Ellen Montz and deputy assistant to the president for health policy Jeanne Lambrew — contained confidential taxpayer information, according to Oversight.

·       The emails provided to Oversight investigators by the IRS had numerous redactions with the signifier “6103.” Section 6103 of the Internal Revenue Code forbids a federal employee from “disclos[ing] any return or return information obtained by him in any manner in connection with his service as such an officer or an employee.”

Federal employees who illegally disclose confidential taxpayer information could face five years in prison. Two days before the attack, Obama personally met with one of the top IRS lawyers. The corruption is obvious and overwhelming. Investigate, prosecute, convict, and imprison. If it was anyone else, you know they’d do it. Like usual, the media is focusing on absurd stories like Miley Cyrus and not on real stories like this. Help spread the truth on Facebook and Twitter. Every share counts.

#####

Shutdown Showdown: A Theatrical Review

The political theatrics over the current furlough of 17% of federal bureaucrats deemed "non essential," and the looming deadline for raising the national debt ceiling, surely will sweep the Emmy Awards this year. On one side, there is Barack Hussein Obama and his Leftist NeoCom cadres, who treat their political opponents with the same "comity and respect" socialist dictators exhibit with dissenters who question their autocratic decrees.

On the other side are House Speaker John Boehner and Senate Minority Leader Mitch McConnell, and their endangered band of Republicans. Watching Obama's petulant and paternalistic approach to Boehner in particular, I'm inclined to borrow and butcher a classic line from Strother Martin, the prison warden in "Cool Hand Luke," after his repeated attempts to beat Luke into submission: "What we've got here is failure to negotiate."

For his part, Obama claims:

"What I've said is that I will talk about anything. ... I've shown myself willing to engage all the parties involved, every leader, on every issue. ... If reasonable Republicans want to talk about these things again, I'm ready to head up to the Hill. ... But I'm not gonna do it until the more extreme parts of the Republican Party stop forcing John Boehner to issue threats about our economy. We can't make extortion routine as part of our democracy. ... I've shown myself as willing to go more than halfway. ... Again, I'm happy to talk. ... I'm prepared to talk about anything."

http://assets.patriotpost.us/images/2013-10-10-a7c375cf.jpg

Memo to Barry: We are a Republic, not a democracy, and there is a difference in dissension and extortion.

Obama continued:

"Pass a budget, end the government shutdown, pay our bills and prevent an economic shutdown. And as soon as that happens, I am eager and ready to sit down and negotiate with Republicans on a whole range of issues."

Harry Reid got the memo:

"I just finished a telephonic conversation with Speaker Boehner. My message to him was very simple. We have to stop playing these foolish games that keep coming to us from the other side of the Capitol. This is not about him or me, about scoring points for one side or the other, name-calling, like the villain of villains. It's about doing the right thing for the American people. They expect us to act like adults. ... Open the government, pay our bills, let's negotiate."

Obama's always-petty and insolent White House Press Secretary, Jay Carney, pulled out all the hyperbolic stops, claiming:

"[Obama] is willing to have negotiations about what steps we should take to fund our government in a way that allows us to invest in the future, protect the middle class, attract businesses to the United States, and reduce our deficit in a responsible and balanced way. ... He's not willing to negotiate over Republican demands to collapse the world economy. ... But he will meet after Republicans agree to leave the matches and the gasoline outside of the room."

Of course, Obama's faux overture to negotiate is a bald-faced LIE, which one can fairly assume is the case any time there is a microphone nearby.

As George Orwell wrote, "Political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.

######

President Obama added another item to his growing list of historical misrepresentations

In his press conference yesterday, President Obama added another item to his growing list of historical misrepresentations about spending and debt ceiling negotiations.

After claiming that never “in the history of the United States” had elected officials used the debt ceiling as political leverage (false), and after insinuating that it’s somehow unusual to expect presidents to negotiate over spending bills (absurd), Obama yesterday mixed a false history of the Clinton-Gingrich shutdowns into his press room lecture.

“[B]ack in the '90s we had a government shutdown,” he said. “That happened one time, and then after that, the Republican Party and Mr. Gingrich realized this isn't a sensible way to do business. You know, we shouldn't engage in brinksmanship like this, and then they started having a serious conversation with President Clinton about a whole range of issues, and they got some things that they wanted. They had to give the Democrats some things that the Democrats wanted. But it took on, you know, a sense of normal democratic process."

As one of the principal negotiators in the 1995-1996 budget showdown between Republicans and President Clinton, it is clear to me the President has a number of very important things wrong.

First, there were two shutdowns, not one, and that was important. In mid-November of 1995, the government closed for several days after Clinton vetoed our Continuing Resolution which contained more spending cuts than he was willing to accept.

The public blamed Republicans for the first shutdown much more than they blamed Clinton. A CNN/Gallup poll released at the time found that Americans blamed the GOP over the President by 2-to-1, 49 percent to 26 percent. In part this was because the press was anti-Republican. But in part it was because we’d made so clear beforehand that we were willing to close the government if necessary.

The pressure on us to cave was enormous. Instead, we refused to give-in, and worked with President Clinton to pass a very short-term extension of government funding and increase in the debt ceiling as negotiations continued. A month later, no compromise had been reached, and despite the media pressure on us, we allowed the government to close again, this time for three weeks.

Which leads to President Obama’s second false claim: that it wasn’t until after the shutdowns that we began a “serious conversation” with President Clinton to advance our priorities. This could not be more mistaken. Clinton and I spoke virtually every day during the shutdowns. We were constantly negotiating. And more importantly, although the shutdowns were in some ways a temporary PR setback for Republicans (they did no lasting damage), they were critical in convincing the President and the country that we were serious about doing what said we’d do in 1994--and that we were willing to be tough to get it done. That was of enormous strategic value going forward.

President Obama is right that the shutdowns of 1995 were a pivotal moment which cleared the way for the success Republicans had afterward. But he’s very wrong about the reason.

It was after the shutdowns and significantly because of them that we achieved some of the greatest growth and opportunity for all Americans in a generation.

In 1996, we passed welfare reform, and

·       in the next several years two out of every three Americans on welfare either went to work or went to school.

·       The House Republican majority was reelected for the first time since 1928.

·       We passed four consecutive balanced budgets, the only ones in our lifetimes.

·       We cut taxes for the first time in 17 years, including the largest capital gains tax cut in American history.

These big victories very well might not have happened if not for the shutdowns in 1995-1996.

The policy changes helped power an economic boom so big that it produced a $5 trillion turnaround in the fiscal outlook of the United States between January 1995 and January 1999, from a $2.7 trillion deficit over ten years to a $2.3 trillion surplus. The nation’s ten-year debt outlook went from 56 percent of GDP to just 12 percent.

What President Obama calls “brinksmanship” and not a “sensible way to do business” may be one of the most successful negotiations ever for Americans. Republicans today face a very similar challenge to the one we faced in 1995, and with similar pressure to cave. Yet just as in 1995, they are proving to the President that he must take the Congress seriously. Americans should hope Obama learns that lesson as well as President Clinton did, and with such strong results.

######

Lawsuit Seeks to Stop Obama's Mandate Delay: 'President Has No Right to Change Law'  by Jennifer G. Hickey

Despite a Supreme Court decision last year dismissing objections to Obamacare, legal challenges to the law continue to mount — the latest attempt a case charging that the president acted illegally when he delayed a provision requiring many employers to provide healthcare for their workers. The lawsuit by a Florida dentist seeking to overturn the delay of the "employer mandate" joins other legal actions that also seek to undo all or part of the Affordable Care Act.  One case pending in federal court claims Obamacare violates the Constitution's Origination Clause, which states that all revenue measures are required to originate in the House.  Legal actions have been filed over Obamacare's mandate that health plans cover contraception, even for employers who have conscientious objections such as some religious hospitals.
And several cases — including one filed by the Oklahoma attorney general — involve the issue of whether subsidies are permitted in federally run healthcare exchanges.

In the challenge to the delay over the "employer mandate," the plaintiff in the federal lawsuit says President Barack Obama "crossed the red line" by taking unilateral executive action to change the law. "I feel that he crossed the red line when he chose to waive the employer mandate. He generally rules by executive fiat, and he feels that he's a Congress of one," Larry Kawa, a Florida dentist, told "The Steve Malzberg Show" on Newsmax TV.

######

Top of Form

† † † † † † † † † † †