Free Markets, Free People

dependence


Happy Dependence Day!

My how things change over the course of 200+ years.

Back at the beginning of this experiment, people rejected a large and intrusive government.  They’d been the victims of one and threw off that yoke.  They acclaimed freedom as their goal and chose liberty as their battle cry.

When they finally got around to forming their own government, they carefully wrote a document which I’m sure they figured was an iron-clad guarantee that this country’s future would never see the same sort of tyranny they’d suffered under.

I just wonder what they’d think of this sprawling, debt ridden and intrusive mess we have now?  I wonder what they’d think of over half the population getting some sort of compensation from government. 

I wonder what they’d think of a Supreme Court Chief Justice more worried about what they’ll say about him and the court on the cocktail circuit and in the media than he is about upholding the Constitution, his sworn duty.  I think I know.

And I’m pretty sure I know what they’d think of this:

Our nation’s current debt, nearing $16 trillion, and our annual budget deficit of $1.2 trillion, indicate that our government’s addiction to spending is nowhere near its limit.

Of that $16 trillion debt, the U.S. owes more than $5 trillion to foreign nations, an all-time high. So much for independence. We’re now a debtor nation, and unless we get our fiscal house in order, that debt will endanger our nation’s prospects for long-term growth.

If that sounds alarmist, consider this: In August 2011, Vice President Joe Biden visited China. This wasn’t just any diplomatic visit — it was the supplication of a debtor, in which Biden undertook to reassure our Chinese debtors that their investment is sound.

Biden assured his hosts that they had "nothing to worry about" when it comes to the U.S. honoring its obligations. It wasn’t the first time a high-ranking U.S. official has had to offer soothing words to our creditors, and at this rate it won’t be the last.

Let’s be clear.  This administration isn’t the cause of all that debt.  It’s just the latest (and the worst) to add to it, to the point that our debt now stands at more than our GDP.  We are indeed a debtor nation.

That’s not at all how this began is it?  Nor was that ever the plan.

I’m also pretty sure I know how they’d feel about the level of intrusion government now routinely practices (and increases) in this country.  For example:

IRS officials on background tell FOX Business the U.S. Supreme Court ruling on health reform gives the IRS even more powers than previously understood.

The IRS now gets to know about a small business’s entire payroll, the level of their insurance coverage — and it gets to know the income of not just the primary breadwinner in your house, but your entire family’s income, in order to assess/collect the mandated tax.

Plus, it gets to share your personal info with all sorts of government agencies, insurance companies and employers.

And that’s just the tip of the iceberg. "We expect even more lien and levy powers," an IRS official says. Even the Taxpayer Advocate is deeply concerned.

As government takes more and more control of your lives, it intrudes deeper and deeper into them:

The TAO [Taxpayer Advocate Office] says that the “IRS will need to determine a taxpayer’s compliance with the individual [insurance] mandate and assess a penalty if coverage is inadequate.”

However, the penalty isn’t based on just your personal net income. The penalty will be based on an entirely different number that is more than just your paycheck earnings — your ‘household income.’

“This determination is based on a concept of ‘household income,’” TAO has said, adding, “this may differ from the income reported on the taxpayer’s return, because it is a composite of all of the income reported by members of a taxpayer’s household — information that may not be readily accessible to the IRS."

If the IRS finds you have fallen short of the law, it would hit you with a penalty tied to your household income (which may be that of an individual or several family members).

Under the new health law, the IRS penalty would be based on “modified adjusted gross income,” not adjusted gross income that you normally report at the bottom of the first page of your tax form 1040, before you take deductions or personal exemptions.

The modifications add back in things like non-taxable interest and excluded foreign income to this number.

Meaning:

Health reform’s insurance mandate says if you do not have “adequate” insurance, you’ll have to pay a fine as part of your tax return. If your business doesn’t provide “affordable” coverage,  that business may have to pay a fine to the IRS, too, as part of its tax return filings.

The TAO has noted Americans must now tell the IRS under the new law:

    *Insurance plan information, including who is covered under the plan and the dates of coverage;
    *The costs of your family’s health insurance plans;
    *Whether a taxpayer had an offer of employer-sponsored health insurance;
    *The cost of employer-sponsored insurance;
    *Whether a taxpayer received a premium tax credit; and
    *Whether a taxpayer has an exemption from the individual responsibility requirement.

The TAO has warned: “This is different from the type of information the IRS typically deals with, and some taxpayers may feel uncomfortable about sharing it with the IRS.”

In fact, it is incumbent upon you to prove to the IRS that you have “adequate coverage”, whatever that ends up meaning. And:

The TAO has also reported that “obtaining this new information will require the IRS to communicate with entities and government agencies that it may not deal with now,” including:

    *New state-run insurance exchanges;
    *Employers;
    *Insurance companies; and
    *Government insurance programs.

But remember the sales pitch – government will make health care simpler, more cost effective and better.

Congratulations to all the simpletons out there who bought into this scam and ended up foisting this intrusive monstrosity on the rest of us.  In fact, thanks to all, who through out the 200 years it has taken us to to get to this point, worked so hard to achieve it “for the common good”.  </sarc>  Nice mess you’ve given us.

As for the rest of you, happy Dependence day!

Forward.

~McQ

Twitter: @McQandO


Government dependency tipping point? Been there, done that ….

More on the increasing culture of dependency on government:

The percentage of people who do not pay federal income taxes, and who are not claimed as dependents by someone who does pay them, jumped from 14.8 percent in 1984 to 49.5 percent in 2009. This means that in 1984, 34.8 million tax filers paid no taxes; in 2009, 151.7 million paid nothing.[2]

It is the conjunction of these two trends—higher spending on dependence-creating programs, and an ever-shrinking number of taxpayers who pay for these programs—that concerns those interested in the fate of the American form of government. Americans have always expressed concern about becoming dependent on government, even while understanding that life’s challenges cause most people, at one time or another, to depend on aid from someone else. Americans’ concern stems partly from deeply held views that life’s blessings are more readily obtained by independent people and that growing dependence on government erodes the spirit of personal and mutual responsibility created through family and civil society institutions. These views help explain the broad public support for welfare reform in the 1990s.

This ethic of self-reliance combined with a commitment to the brotherly care of those in need appears threatened in a much greater way today than when this Index first appeared in 2002. This year, 2012, marks another year that the Index contains significant retirements by baby boomers. Over the next 25 years, more than 77 million boomers will begin collecting Social Security checks, drawing Medicare benefits, and relying on long-term care under Medicaid. No event will financially challenge these important programs over the next two decades more than this shift into retirement of the largest generation in American history.

And yet we just got a budget from the President of the United States which essentially ignores that fact.  Just like his previous three.

But more important than that is this culture of dependence that has perniciously grown in this country over the preceding decades fueled by politicians and the ideology of the left.  

Libertarians and many Conservatives have been warning about this phenomenon for years.  But in 2008, what had been a relatively slow ride to growing dependence became a ride on a rocket sled:

Not only did the federal government effectively take over half of the U.S. economy and expand public-sector debt by more than all previous governments combined, it also oversaw a second year of enormous expansion in total government debt at the federal level. Much of that growth in new debt can be traced to programs that encourage dependence.

master research graphic templateNEW

 

In 40 plus years we’ve gone from a dependency percentage of 28.3% to over 70% in 2010.  I don’t think anyone realized how big the change has been or what significance it has.  But it has made us a nation of takers vs. makers

As Heritage’s Bill Beach and Patrick Tyrrell explain, "the index score has grown by more than 15 times its original amount. This means that, keeping inflation neutral in the calculations, more than 15 times the resources were committed to paying for people who depend on government in 2010 than in 1962."

It is the same trap that countries like Greece were in and will result in the same collapse.

Ed Feulner adds some context to the increased percentage of dependence:

Perhaps the most startling part of the index concerns how much assistance is being distributed. Americans who rely on government receive an average $32,748 worth of benefits. How high is that? Higher than the average American’s disposable personal income: $32,446.

Why work?

And:

More than 67.3 million Americans rely on assistance from Washington for everything from food, shelter and clothing to college tuition and health care. These benefits cost federal taxpayers roughly $2.5 trillion annually.

So the president offers a 3.8 trillion dollar budget of which, according to these numbers, all but 1.3 trillion goes to “assistance”.

And in order to offset these “assistance” payments somewhat, the president decides that the only Constitutionally mandated expense within the budget – defense – has to pay the butcher’s bill.

We talk about “tipping points” often, but looking at that chart, I’m convinced that tipping point may have been passed years ago.

Some quotes to leave you with.  Rep. Allen West, this past weekend said he has no problem with a safety net.  His problem is “when that safety net becomes a hammock.”  In this case a $32,000 hammock.

Alexis de Tocqueville reputedly said that the American republic will last only "until the majority discovers it can vote itself largess out of the public treasury."  We’ve seen that majority discover it with a vengeance.

And finally, George Bernard Shaw said, ““Liberty means responsibility. That is why most men dread it.”

70% dependence says a majority now dreads “it”, and has decided it likes others, the makers, paying their way.

As one friend aptly described it on reviewing these numbers, “we’re screwed”.

~McQ

Twitter: @McQandO


Happy “Dependence” Day

I‘m sorry, but the more I get into the monstrosities coming out of Washington DC, the less I see “independence” as a reality. Just a quick read through Waxman-Markey (and a quick read in anything but easy given the size of the bill) will tend to make you a bit pessimistic about “independence”. Consider the mundane topic of shade trees:

SEC. 205. TREE PLANTING PROGRAMS.

(a) Findings- The Congress finds that–

(1) the utility sector is the largest single source of greenhouse gas emissions in the United States today, producing approximately one-third of the country’s emissions;

(2) heating and cooling homes accounts for nearly 60 percent of residential electricity usage in the United States;

(3) shade trees planted in strategic locations can reduce residential cooling costs by as much as 30 percent;

(4) shade trees have significant clean-air benefits associated with them;

(5) every 100 healthy large trees removes about 300 pounds of air pollution (including particulate matter and ozone) and about 15 tons of carbon dioxide from the air each year;

(6) tree cover on private property and on newly-developed land has declined since the 1970s, even while emissions from transportation and industry have been rising; and

(7) in over a dozen test cities across the United States, increasing urban tree cover has generated between two and five dollars in savings for every dollar invested in such tree planting.

So now the federal government will issue guidelines and hire experts to ensure you plant shade trees properly:

(4) The term ‘tree-siting guidelines’ means a comprehensive list of science-based measurements outlining the species and minimum distance required between trees planted pursuant to this section, in addition to the minimum required distance to be maintained between such trees and–

(A) building foundations;

(B) air conditioning units;

(C) driveways and walkways;

(D) property fences;

(E) preexisting utility infrastructure;

(F) septic systems;

(G) swimming pools; and

(H) other infrastructure as deemed appropriate

And Waxman-Markey is indeed a “green-job creator” of a bill – it creates an entirely new job category – Federal House Inspector. Yes, that’s right, in order to sell your house in the future you must passed a federal housing inspection which will certify your home has the minimal energy rating necessary. And if not, you’ll be required to bring it up to par by replacing appliances (water heaters, air conditioning, etc) or repairing (leaky windows, etc) whatever the inspector finds before you can put it on the market.

Have a candelabra in your dining room? Don’t you dare put any more than a 60 watt bulb in there.  You need to also bone up on what you’ll be allowed to do with outdoor lighting, water dispensers, hot tubs and other appliances, not to mention wood burning stoves and water usage.

Yup, if this piece of legislation makes it through the Senate, we need to seriously rethink the name we give the 4th of July. “Independence” will no longer apply. And, given the level of intrusion this bill brings to our lives, you can just imagine what’s in store for us in any health care legislation passed by this administration.

Happy Dependence Day, folks.

~McQ