Monday, August 29, 2011

God: The Evidence by Patrick Glynn

I LOVE this book! God: The Evidence. The Reconciliation of Faith and Reason in a Postsecular World by Patrick Glynn is exactly the kind of book I can devour in a few days.

To the extent it's possible, Patrick Glynn sets out to prove God's existence. If he doesn't quite provide absolute proof, he asks some tough questions that atheists are hard pressed to answer. He basically comes down to the conclusion that there HAS to be a God. No God, is not only devastating to our psyche and culture, but science itself is lost without some kind of Intelligent Designer.

He first jumps into the fray with the world of science. Of course this sucked me in right away. He begins with his religious upbringing, a turn towards atheism upon reaching college, a general disillusionment with a worldview devoid of ultimate justice, finally to a discovery that while he was divesting himself of God, serious scientists had begun to wrestle with the impossibility of a totally random universe.

In fact, in 1973, cosmologist Brandon Carter called attention to something he called "the anthropic principle." It basically states that from the very first nano seconds of the universe' formation, life was its destination. Everything had to have been planned and coordinated to arrive at where we are today. In effect, the universe "wanted" to create man. This shocking theory and the various unconvincing attempts to debunk it slowly led Glynn to a belief that something must have designed the universe for life - if not God as we understand Him, a god of some sort.

Psychology being an especially important idea to Glynn also led him to some disturbing insights. Although modern psychology had banished God and delved instead into the Id, the Ego, and the Super-Ego, subsequent studies showed those with faith, living faith-centered lives, were generally happier and healthier. He contrasts the lifestyles of believers with a value-free lifestyle and makes a powerful argument, not necessarily for God's existence, but for the need to believe there is a God. In fact,
"modern research tends to bear out the observation that sin breeds misery. It turns out that the Ten Commandments... are not just an arbitrary set of divinely ordained taboos or a path to a happy afterlife; they are also a very reliable guide to happiness and health in this world." Physicians are also beginning to understand the importance of a vibrant spiritual life to physical health, and while prayer is not "magic" and God is not a genie, the faithful tend to be physically healthier.

He dives into some fascinating stories when he explores Near Death Experiences (NDE). He describes researcher after researcher moving from intense skepticism to belief after interviewing people who experienced NDEs. Many times, they would attempt to debunk the accounts by attributing the details of the stories to previous knowledge, physical sensations, lack of oxygen, good guessing, wishful thinking, or some other scientifically explainable phenomena. Yet time and again the people would confound the skeptics with vivid details they could not have possibly known. All scientific attempts to replicate these experiences fell short with the exception of one. Patients were deprived of oxygen and given excess carbon dioxide. The NDE-type experiences they felt turned out to probably be actual NDEs!

A few stories in particular stood out. One man describes a defibrillator used on him when he was flatlining. He knew so many details of how the machine worked and how the workers used it, researchers were stumped as to how to provide any other explanation. One particular area of interest for a scientist was studying the NDEs of children in car crashes. The children have less prior knowledge of hospitals and medical procedures and are therefore less likely to embellish their stories with realistic-sounding details. Also, coming out of a car crash, they are rarely aware of the fates of the other passengers. After one horrific crash in which his mother was killed, a boy was thrown into a coma. He briefly awoke, as is not uncommon to other near death comatose patients, to state he was fine. His mother and Peter were waiting for him on the other side. The mother part was understandable if the boy had an inkling that his mother was dead, but Peter, though badly injured, had survived the crash. After exiting the boy's room, the researcher was told that Peter had just passed away moments before. These kind of details are chilling. Even the stories of those who did not experience the peace, light, love, and joy of eternity, but rather the sense of dread and horror were fascinating. One person stated that after sitting with Jesus and watching his life flash before his eyes, he condemned himself to hell.

Philosophy without God has fared no better than science, psychology, or physical health. The modern thinkers who championed the death of God led to a nihilism ultimately resulting in the horrific death statistics of the 20th century. No matter how hard moral philosophers tried to push a moral philosophy, devoid of a spiritual foundation they could not square the circle. They condemn an Auschwitz while recognizing they have no basis to do so. They attempt to promote the values of Christianity yet reject its core belief in Christ. Glynn discusses with true intellectual passion that religion has been trying rather successfully to accomplish what the post-modern philosophers can only dream of. While religion is a human institution and therefore vulnerable to human foibles, no other mindset has seen the tearing down of the tribalist/materialist bent as Christianity has and the introduction of a moral revolution.

I loved his discussion of the Enlightenment as he trace the "good" and "bad" paths taken by its adherents. The rejection of God, combined with enlightenment thinking led to the terrors of Robespierre, while a belief in God and reason created America. "Reason rediscovers and reconstructs in slow, cumbersome, linear and partial fashion what the Spirit already knows."Modern humanity is painstakingly discovering what Jesus already knew. Glynn states uncategorically that the worst horrors of the 20th century can be traced to reason devoid of God.

This final section is so uplifting and encouraging, it would be worth it to read the book for that chapter alone. Nevertheless, I found the whole book delightful and compelling. Loved it!

Tuesday, August 23, 2011

Righteous Indignation by Andrew Breitbart

I'm calling Righteous Indidnation by Andrew Breitbart a guilty read. It's a behind the scenes look into the life of Andrew Breitbart. He traces his journey from a "default liberal" living in L.A. through a liberal college experience, to a job where he finally felt like he was earning something and contributing, to the role talk radio played in his life. While it's interesting to hear about his life and his transformation, I usually enjoy books that teach something deeper.

That's why I was surprised when after reviewing his own history, he delved into the history of liberalism. Here's where my ears perked up.

His history lesson begins with, "The Founders' realistic view of human nature and call for limited government and individual liberty found its opponent in the philosophy of Jean-Jacques Rousseau and, later, Karl Marx. Rousseau thought that people were naturally good and were corrupted only by the development of the surrounding society... He also thought that modern society, created as it was to protect property rights and life, had destroyed the natural communism that prevailed before the advent of society."

Marx picked up from Rousseau and combined it with Hegel's "might makes right" philosophy to envision a world of class struggles eventually won by the workers. Teddy Roosevelt combined these two views with "man is basically good" Rousseau and got Progressivism, "soft Marxism without the class struggle." In order to get to a perfect society, TR used an "ends justify the means" philosophy. The Constitution, however is all about the means... not the ends. Woodrow Wilson governed from this anti-Constitutional point of view and believing "great decisions should be made on high by men of high thought," paved the way for FDR.

When the Marxist worldview did not really catch on after the Communist Revolution, the view that first society must be destroyed before utopia could manifest itself caught on among some German philosophers. When exiled by Nazi Germany, they brought their desire to destroy traditional culture to America and eventually their Frankfurt School to our universities. Pushing the destruction of the Judeo-Christian worldview through what was called, Critical Theory, (a theory of criticizing everything, everywhere) these professors eventually ushered in the 60s, make love, not war, trust no one over 30, and a total rejection of the wisdom that has gone on before.

One professor, Marcuse, was its "most devious and effective marketer." He got a whole generation to reject their parents' values. He turned classes against others, pushed multi-culturism, and "diversity studies." He introduced "repressive tolerance" which basically said everything was tolerated except non-tolerance. Enter, Mao's phrase, "political correctness," and Saul Alinsky's Rules for Radicals, and you have universities today and everything that is wrong with America. Alinsky wrote the "Art of War" for the Progressives. His rules are very effective and eventually brought us Clinton and Obama.

The basic rules are as follows:
1. Power is not only what you have, but what the enemy thinks you have.
2. Never go outside the experience of your people.
3. Wherever possible go outside of the experience of the enemy.
4. Make the enemy live up to their own book of rules.
5. Ridicule is man's most potent weapon.
6. A good tactic is one that your people enjoy
7. A tactic that drags on too long becomes a drag.
8. Keep the pressure on.
9. The threat is usually more terrifying than the thing itself.
10. The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.
11. If you push a negative hard and deep enough it will break through into its counter side.
12. The price of successful attack is a constructive alternative.
13. Pick the target, freeze it, personalize and polarize it.

However, Breitbart ends on a high note. Using some of the tactics of Alinsky, he believes we can win back the country. He is part of the New Media that is slowly but surely destroying the power of the Mainstream Media/Democratic Party forces that shape so much of modern American culture. He points to the story of James O'Keefe and Hannah Giles, who brought down ACORN with Breitbart's help as an example of how to hit 'em where it hurts.

This is an easy read, the history of liberalism is engaging and well-researched, and the note of hope gives it a happy ending.

Friday, August 12, 2011

Economics in One Lesson

Economics in One Lesson by Henry Hazlitt simply MUST be read by anyone who wants to understand a very basic economic principle. What is the one lesson that rules them all? It is this: The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

Imagine that! Tracing the consequences of economic policies all throughout an economy and not only focusing on its immediate, short-term effects! Every politician who actually cares about this country and wants to help it, needs to memorized that sentence and live it! They won't. It won't get them re-elected. Short-term benefits with long-term harms are what got us where we are today. The American people continue to keep themselves economically ignorant and re-elect whoever promises to bring home the bacon. Welcome to 14.4 Trillion in debt and unemployment through the roof. Can you say, "long-term harms are coming home to roost?"

After introducing the one lesson early on in the book, Hazlitt proceeds to give example after example of this principle in practice. Some of my favorites listed here:

The Broken Window - It has long been a fallacy popping up in one form or another that some act of destruction is actually an economic boom. If a window is broken, the glazier get business, who can then pass his business along and so on. But the fallacy lies in what is not seen. The person with the broken window is now poorer the cost of the window and has nothing to show for it. He also does not have and does not profit the business that would have provided what he really wanted to spend the money on.

Public Works Mean Taxes - When one looks at a public work, say a freeway or a bridge construction, one sees a tangible good, the bridge, and the jobs created for the workers. What one does not see is more important and harder to distinguish. What did NOT happen because taxes were taken from the taxpayers to fund the bridge? What jobs and capital were NOT created by the original owners of the money? It's a safe bet that what didn't happen would have been more efficient and more likely to raise the standard of living for the society as a whole than the public works project.

The Curse of Machinery - Even in 1946 people worried that technology threw people out of work and hurt the economy as a whole. President Obama himself lamented the rise of ATMs. By applying the one lesson of looking not merely at the immediate but at the longer effects of any act or policy, we can easily see that where production-increasing technology has been introduced, prices have fallen and the industry as a whole has grown. As Milton Friedman once commented when shown public workers digging with shovels instead of tractors in order to prolong the work and increase the number of jobs, "Why don't they use spoons?" We can see the obvious fallacy in being opposed to production-increasing devices.

Tariffs, "Parity" Pricing, and Saving X Industry - All attempts by government to artificially prop up a business or industry through the use of tariffs, price controls, or direct subsidies get the same results, "capital and labor are driven out of industries in which they are more efficiently employed  to be diverted to an industry in which they are less efficiently employed. Less wealth is created. The average standard of living is lowered compared with what it would be been." All these gimmicks forcibly transfer money from the one who earned it and can put it to efficient use to a government-favored recipient.

The Price System, Government Price-Fixing, and What Rent Control Does - The price system, as Thomas Sowell so eloquently states helps to allocate scarce resources that have alternative uses. Prices signal relative scarcity and thus lead to the most efficient use of a resource. When government attempts to stabilize a price or implement price controls, the results are the same: more scarcity. Prices kept artificially high reduces demand and therefore fewer products are produced. Prices kept artificially low result in greater demand and lower profit margins so less is produced and what is produced is quickly snapped up at the "cheap" price. Pricing housing below the market has the same effect. Housing becomes scarce and, as the profits weaken or disappear entirely, housing becomes even harder to come by. Ironically, rent control often leads to much higher prices elsewhere in the market. The lowered supply of any kind of housing always lead to higher demand. In addition, luxury housing is usually exempt and therefore attractive to investors, therefore only high-priced accommodations are built.

Minimum Wage Laws - Minimum wage laws are nothing more than price controls placed upon labor. Not only is the minimum price for labor fixed and therefore some who cannot produce at that minimum level excluded from the marketplace, but when combined with relief payments, unemployment is sure to rise. For a job must offer not only more than the welfare payment, but SIGNIFICANTLY more. If for example one receives an unemployment check for $300 a week, but can find a job for $400 a week, he is, in effect, asked to work 40 hours for only $100 extra. Many will choose to stay home and receive less than work for such a small differential. This creates an underclass of people perpetually caught in this cycle, never able to increase their production ability.

The Assault on Savings - Economies grow when people save. By putting aside money to be invested with someone who will increase production, wealth is created. Today many people have this backward. Even President Bush said the best thing we could do for our economy was to go shopping. Wrong. People not spending is not the cause of a bad economy, but rather a consequence. When economies are looking hopeful, we invest, new goods and services are produced at lower prices, capital is created, products are bought, the economy grows and everyone ends up with a higher standard of living. Spending alone simply leads to less resources as the money eventually runs out and without access to investment (savings) capital, businesses cannot grow.

Particularly relevant to our current economic crisis, when interest rates are kept artificially low, it appears that people have saved enough money that banks are almost giving it away. Yet the opposite is true. A too-low rate leads to less savings as it is not profitable. Better to spend and even borrow now and save later. Business make decisions to borrow at the low rate and expand. After all, it appears that people must have a lot of money in savings and will therefore be able to support this increase in production. But soon it becomes apparent that it was all a mirage. The money was never in the bank. Consumers are overspent, strapped with debt, and unable to support the newly created and expanded business. A bust is always the result.

Hazlitt concludes with, "The analysis of our illustrations has taught us another incidental lesson. This is that, when we study the effects of various proposals, not merely on special groups in the short run, but on all groups in the long run, the conclusions we arrive at usually correspond with those of unsophisticated common sense. It would not occur to anyone unacquainted with the prevailing economic half-literacy that it is good to have windows broken and cities destroyed; that it is anything but waste to create needless public projects; that it is dangerous to let idle hordes of men return to work; that machines which increase the production of wealth and economize human effort are to be dreaded; that obstructions to free production and free consumption increase wealth; that a nation grows richer by forcing other nations to take its goods for less than they cost to produce; that saving is stupid or wicked and that squandering brings prosperity." It's a breath of fresh air to see that this one lesson supports common sense in the study of economics.

Thursday, August 11, 2011

When Helping Hurts

We're doing it all wrong. That's the message conveyed by Steve Corbett and Brian Fikkert in When Helping Hurts: How to Alleviate Poverty Without Hurting the Poor and Yourself. While acknowledging the centrality of helping the less fortunate to the Christian worldview, the authors make a compelling case that much of our "good works" are not only not helping, they are hurting the poor and ourselves in the process.

They trace the cause of poverty back to broken relationships: one's relationship with God, himself, others, and the rest of creation. Stating that very few people in the world are in stark, life-or-death material need, we should begin by helping the poor establish a correct relationship with God. Recognizing that we are all created in God's image with certain giftings and talents and that we are created to worship Him through work is the key to actually helping. Without this understanding, the poor have an incorrect relationship with themselves, often thinking they are worthless and incapable of bettering their own lives. Feeling ashamed, hopeless, depressed, and powerless leads to a cycle of poverty lasting generations.

But the affluent live in broken relationships as well. Christians are constantly in need of tending their relationship with God, discovering who they are in Christ and living confidently in that identity. But the affluent face the most danger in their relationship with themselves. By becoming "the great white hope" to the poverty-stricken, we take on the role of God. We provide. We are all-knowledgeable. From us all blessings flow. We take God from the poor and replace Him with ourselves... and feel pretty good about it in the process.

Therefore, poverty alleviation must begin and end with relationship. Together, the poor and the affluent come to recognize their true identity and learn a love and compassion for each other as well as an appreciation of God as the source of all things.

They give an example of a church that sought to follow Christ's command to help the less fortunate by serving the residents of a nearby housing project. Bringing them meals and gifts at holidays eventually led to "compassion fatigue" as the church members saw no improvement in the residents condition or lifestyle. They were locked in the following equation:

Material Definition of Poverty
God-complexes of Materially Non-Poor
Feelings of Inferiority of Materially Poor
Harm to Both Materially Poor and Non-Poor

So what's the solution? Corbett and Finkkert believe in a three step process of poverty alleviation:
1. Relief - this is when immediate life-sustaining supplies are needed, as in the case of a natural disaster.
2. Rehabilitation - this is the time to work with the victims, using their own positive elements to restore them to pre-disaster levels.
3. Development - this process moves both the "helped" and the "helper" closer to a right relationship with God, themselves, others, and creation.

Most poverty programs should consist of steps 2 and usually 3. Certainly, America's poor are almost never in a life-or-death situation. Yet almost all of our efforts all over the world and at home are focused on step #1. We are treating the wrong problem and making it worse.

The example of the Kibera slum is enlightening. "Development workers commonly refer to Kibera as 'scorched earth,' because decades of well-meaning outside organizations have made it nearly impossible to do long-lasting development work there. Failing to recognize that the appropriate intervention in Kibera is neither relief nor rehabilitation, outside organizations have poured in financial and human resources, crippling local initiative in the process." The good-Samaritans had fallen victim to the poison of paternalism. This leads to this very important principle: Do not do things for people that they can do for themselves.

Our churches need to reflect heavily on how we are ministering to the poor. Find our niche, since we can't do it all, and work to develop the poor and the non-poor into who Christ wants them to be. "Our basic predisposition should be to see poor communities - including their natural resources, people, families, neighborhood associations, schools, businesses, governments, culture, etc. - as being created by Jesus Christ and reflective of His goodness. Hence, as we enter a poor community, there is a sense in which we are walking on holy ground, because Christ has been actively at work in that community since the creation of the world!"

When the church that sought to help the downcast in the nearby project realized that they had been doing it all wrong, they took up the Assets Based Community Development strategy. Awkwardly canvassing the neighborhood and asking, "What skills and abilities do you have?" rather than the paternalistic "What do you need?" led to the process of empowerment as the residents praised each others skills and abilities. No longer were they hopeless and worthless refuge, but they had gifts and talents are were capable human beings.

Finally, they end with a word about short-term mission projects. Clearly, these do not foster the relationship driven "development" method of helping the poor and ourselves. By focusing on "relief", STM often do more harm than good. One example from a Latin American group broke my heart: "The indigenous staff in my organization lead weekly Bible studies with children in low-income communities... After a short-term team conducts a Bible study in one of these communities, the children stop attending the Bible studies of my organization. ... the children stop coming because we do not have all the fancy materials and crafts that the short-term teams have, and we do not give away things like these teams do." How damning is that! I almost cried.

It may be possible for STMs to do real good, but they need to be very carefully thought out and and planned. At a cost of several thousand dollar per participant, it may be better to simply send the $40,000 or $50,000 raised to an indigenous group effectively developing relationships with the materially poor of a region. Our best bet, and most effective use of our resources may be in developing these type of ministries in our own backyard.

Our message should be, "I am not O.K.; and you are not O.K.; but Jesus can fix us both." But focusing on development is hard work. It's easier to hand a man a dollar at the freeway off ramp. However, in the process we have damaged both him and ourselves.

Monday, August 8, 2011

Broke - Part 3: The Plan

So, after all the bad news of where we are and what is wrong with our country, what's the plan? Beck begins with a discussion of the basic, God-given rights as outlined in our Constitution. All of our many problems can be traced back to those who would impose a "Living Constitution," which is nothing more than an end run around the rule of law. Our Constitution was written down and given an onerous method of change for the very reason that it was NOT a Living Constitution. Had the founders wanted something living, they could have implemented a monarchy, but they wisely chose the rule of law and concreteness of a piece of paper to govern Americans.

Presidents, politicians, and judges have stretched the Constitution and the "rights" guaranteed by it beyond recognition. FDR famously promoted a "freedom from want" and a "freedom from fear." Are these rights guaranteed by our Constitution or are they a smooth-talking way to enlarge government? "Ayn Rand once pointed out another great way to distinguish whether a right is in accordance with the Constitution: simply ask the question 'at whose expense?' after the right is proposed." The rights to Life, Liberty, and the Pursuit of Happiness are rights specifically because we are born with them. They came at no one's expense. The government didn't give them to us, and it cannot (or at least has no right to) take them away. They are God's to give and to take. If the government interprets rights to include health care or housing (at taxpayer expense, of course), then the government effectively owns everything you have. It can take your property at any time to make sure that someone, somewhere is receiving their right to free... whatever.

A first major impediment to a plan to fix what ails us is the leftist view of equality. America's founders and most Americans believed in equality under the law and of birth. No rigid caste system or separate justice systems in America. But progressives, claiming the virtue of envy, fought hard for equality of outcome. Of course there is a method to their madness. Equality of outcome is impossible. We are all born into different circumstances with different gifts, talents, personalities, and opportunities. Therefore, equality of outcome requires major enforcement power. There it is again. Power. The left, at its core, wants power. It can preach social justice and compassion, but its greatest desire is for the power to run other's lives.

All plans for our recovery must first start with faith in a good God. Without a God to give us rights, we have only rights given by men. And rights given by men can be taken by men. We must restore faith in God in America if we want to restore faith in America. "Real faith renews our spirit of hard work and independence. Faith restores the idea of a society based on merit and reward.... With spiritual reawakening, we can take responsibility for ourselves again, embrace the virtues of hard work, and reignite purpose and direction in our country."

Another key part of the plan is decentralization. The federal and state governments too often overlap. The Founding Father were brilliant when they devised a federal system that gave the federal government very limited powers that could best be exercised on a national level (i.e. coining money, negotiating treaties, maintaining an army). Everything else was left to the states or the people directly. Business is figuring this out. Management of large companies is decentralized so as to run the company most efficiently. Government is far behind on this trend. The benefits of decentralization are many. The most important of which is that more people get what they actually want. One-size-fits-all solutions are minimized when state and local officials work to implement policies. An additional benefit is the ability to "vote with your feet." As evidenced by the laboratory of Texas, many people are able to throw off the shackles of their local area and move to a more favorable location. National policies trap all Americans. Those who push for a more national system are in reality pushing for more power to control your life.

Now for the specifics of the plan:
1. Pass a Balanced-Budget Amendment.
2. Pass a Term-Limits Amendment.
3. Pass a Line-Item Veto Amendment.
I love this plan because it requires actual changes to the Constitution which requires the convincing of Americans of the benefit of the particular amendment. It forces a conversation and is not government by judicial fiat. These spark a serious conversation that Americans desperately need to have in order to realign ourselves with our Constitution and our American values.

The backup plan:
Amendments are very difficult to get passed. So in the meanwhile, a backup plan is needed.
1. The SAFE Act - caps federal spending to the Consumer Price Index and population
2. The GWBV (George W. Bush Veto) - the President would be able to "freeze" a particular provision of a bill, thereby sending it back to the congress to "unfreeze" it by a majority vote.
3. Return Impound Authority - while waiting for the Line-Item Veto to pass, the President would be able to not spend money allocated by Congress.
4. Pay-go: Pay or Play - Get rid of the current Pay-go or make it apply to everything.
5. Lobbying Reform - no member of Congress can become a lobbyist for 4 years after their term (I'd make it a lifetime ban.).
6. SEIU (Stop Empowering Influential Unions) - get rid of government employee unions
7. Part-time Politicians

While tackling the system, we must tackle the budget... with a chainsaw. Here is the scariest chart in a book full of scary charts. (All numbers are in billions.)

Basically, after we pay for the "mandatory" spending of Social Security, Medicare, Medicaid and interest on the debt, there's almost NOTHING left. Nothing left for the things the federal government is actually Constitutionally required to do.

So, where to cut? Beck lists:
1. Abolish the Department of Energy
2. Abolish the Department of Education
3. Ship departments to the states:
    1. Housing
    2. Highway
    3. Agriculture
4. Privatize ("Good rule of thumb; If you can Google something and find a private company to do that task, then that's probably where the responsibility for it should be.")
    1. Military Arsenal Production
    2. Ports
    3. Transportation
5. Major reforms to Social Security, Medicare, and Medicaid.
6. Major cuts to a bloated military dedicated to costly nation building

Another good rule of thumb when deciding what the government should do vs. what private citizens can do for themselves is to ask, "Can a private citizen do this for himself?" For example, a private citizen could not finance and maintain his own military. A private citizen cannot coin his own currency. A private citizen cannot negotiate treaties with foreign nations. But, a private citizen can pay for his own health care. A private citizen can save for his own retirement. A private citizen can educate his own children. Not only can a private citizen do all these things, he can do it more efficiently than the government and end up with health care, retirement, and his children's education that he has power over and therefore can design a system exactly tailored to his requirements.

Finally, we need tax reform. Our tax code is ridiculously complicated and inefficient. Besides, no matter how much we tinker with with the tax rates, historically we have very rarely been able to collect more than 20% of GDP. For all our complications and loopholes, the actual dollars collected, as a percentage of GDP remains at about 18%. So to the politicians who want to raise revenue by raising tax rates, I say, "It can't be done." There is a ceiling to how much you can collect in revenues whether the highest tax rate is 91% (1953) or 28% (1988) the result is IDENTICAL! Revenue generation is static. Period. It's the spending that must conform to the set-in-stone limit of revenue at 18%. Therefore, there is no need for a complicated and inefficient tax system, if the amount of money actually brought in remains the same.
Enter the Flat Tax. I LOVE this. It's not only "fair" (the word that liberals adore and strive to achieve by treating everyone unfairly), but it's simple, and Biblical. It gives everyone, rich and poor, ownership in the society. It works everywhere it's been tried. But most importantly, it takes away all the power from politicians to micro manage our lives and our economy through the tax code. It will unleash individuals from government shackles and unleash our economy.
Final note. This book is a very entertaining, easy read filled with TONS of great information. I love his basic premise: "This book is about understanding that our system of government is broken because we ourselves are broken in spirit, broken in trust, and broken in our faith. It's about understanding that debts and deficits aren't the disease; no, they're just symptoms of the disease." Too much info to include here, but I hope I've mentioned the most important stuff. Unfortunately, there is something jaw-dropping on every page. I love this book!

Saturday, August 6, 2011

Broke - Part 2: The Crime of the Century

Beck starts off by telling "The Truth." The truth is, is we are in a mess. Social Security, Medicare, and Medicaid eat up enormous parts of our federal budget. In fact, those three programs, along with interest on the national debt are the ONLY things the Federal Government actually pays for. EVERYTHING else is covered by borrowed money. He states, "In the backward way that Washington doles our out money, they first give large agribusinesses their full farm-subsidy entitlements, and the wealthiest seniors their full Medicare drug entitlements -- and then use whatever scraps are left for discretionary items like body armor for our troops."

Here is a chart showing the breakdown of our Federal budget. Social Security and National Defense are tied, but close behind is "Income Security," which is all welfare related programs including Medicaid, followed by Medicare. Health and interest on the debt come next. We can see that everything else is a much smaller part of the budget. To see where the money goes and what needs to be cut, look at those four things. To cut anything other than the top 4 is to only nibble at the edges.

We should also remember that of these 4, only National Defense is Constitutional! The other 3 have been added by our previously mentioned progressive presidents who wanted to fundamentally change the relationship between the government and the governed. Well, as predicted, they made slaves of us all.

This chart shows how are spending priorities have and continue to shift. Social Security and Medicare will eat up 36% of the budget by 2025. Interest alone will consume 18%. We are rapidly getting into ludicrous land here.

We will never make any kind of dent in our deficit or debt if we don't tackle entitlements. Social Security is NOT an insurance program. It is a welfare program. It was set up as a tax and spend behemoth. From the very beginning, this was known to be true by politicians.

The first recipient of Social Security was Ida May Fuller. She sent in $22.54 in contributions and collected $22,888.92 - a 92000% increase! Today seniors feel they are entitled to Social Security because they paid into it. It's true that they paid taxes, it's true also that those taxes were spent on people like Ida May. Like any ponzi scheme, it's the people that get there first that benefit the most. Today, the money that we are all paying into the Social Security trust fund simply isn't there. It has been replaced by IOUs from the government who spent it and promises to pay it back when we demand it. The problem, with what exactly are they going to pay it back with? They have NO money! We are already in deficit spending. How can they possibly make good on these promises? They will have to borrow more money to pay back the money that they borrowed. That's like paying off a credit card with another credit card.

Another budget buster is Medicare. It's welfare pure and simple. Sure we pay a pittance into it, but that only goes toward Part A (hospital insurance). The other parts, B and D are funded through premiums from seniors (25%) and taxpayer money (75%). This program is scheduled to skyrocket in costs as well.

The CBO estimates that by 2050, the big 3 welfare programs will eat up 19% of GDP. Now consider that historically, the US has never been able to collect more than 20% of GDP in revenue and usually collects 18%. No matter what the tax rate, Americans will only paya maximum of 20% GDP in taxes... period. That's a real wall. You cannot spend more than 20% GDP without going into debt. So if the big 3 eat up 19% of that 20% we are in BIG trouble! Even worse, they'll hit 26% of GDP by 2082! It's simply not possible to pay for the programs at that point!

Social Security was supposed to begin at 65, which just coincidentally happened to be the average life expectancy. In 1935 only 6% of the population was 65 or older. That percent has more than doubled and will double again when we get to 2040. We MUST deal with this disaster in the making, and we MUST do it quickly!

Thursday, August 4, 2011

Broke - Part 1: The Past is Prologue

This book MUST be read. It lays out the mess America is in in clear, entertaining language. He not only diagnosis the problem, he goes to the root of how we got here, and he advocates policies to fix it. Unfortunately, I came away quite depressed and hopeless. I actually believe now that we are past the point of return. We have gotten ourselves so far from where we should be, I cannot see how we can undo this mess. Americans are already in an entitlement mindset and politicians are willing to buy whatever votes they need to stay in power. There is no one and nothing that will be able to muster the power it will require to restore us to wholeness and sanity.

Beck begins with a history of America and its deficit/debt cycles. Loving history as I do, this hooked me right away. He begins with the rise and fall of the Roman Empire, Greek Empire and Spain. Time and again, the lesson is: frugal government, frugal people; extravagant government, enslaved people. Frugal used to define the American character. Frugality and living within our means allowed us to save and invest and have reserves to help others through tough times. People now follow the example of our government and spend themselves into unsustainable levels of debt that leave us begging the also broke powers that be for handouts. None of these empires that overstretched their duties and budgets fell in a day. The over taxation and enslavement of the people happened gradually. Our Founding Fathers recognized early on that debt equaled taxes and enslavement. We have been blessed with the opportunity to look back on them and learn from them. Can we do it? Can we turn the corner before it's too late?

Although our country has pretty much always run a deficit and had a debt, it was always important to presidents of both parties to work on paying down the debt. Usually debt was run up in times of war and paid off in times of peace. Enter Woodrow Wilson. Not only was Wilson our first Progressive president and a bigot, but "in the tradition of academic leftists, Woodrow Wilson was a supreme narcissist, a man convinced that he was of a superior stock and creed than others. A man with a severe God-complex." He wanted to expand the social welfare state and knew that in order to achieve his utopian vision, Americans must abandon their "blind devotion to the Constitution." Beck further states, "Unfortunately, progressive policies don't last for four or eight years -- they last forever. The income tax and new federal programs were stitched into our fabric, and they couldn't be removed easily... After eight years of Woodrow Wilson's hyper-elitist, progressive social engineering, the Social gospel's seductions had done what thy were designed to do: take power from individuals and hand it over to the planners who were supposedly smarter, more enlightened, and more compassionate organizers of life for the masses. Worse, the idea that the Constitution was outdated and needed constant reinterpretation had produced a new intellectual spawn, the idea of a 'Living Constitution,' with tenets that are malleable and subjective."

While Wilson was followed by more conservative presidents who sought to return us to our founding principles (three presidents "worked for" Andrew Mellon, the astute Treasury Secretary), eventually came the crash of '29 and the engineer president, Herbert Hoover. Ever the tinkerer, Hoover believed he needed to intervene in the economy in ways the federal government had not done previously. He was then followed by FDR who doubled-down on Hoovers policies, despite running against them and promising to... balance the budget! FDR turned to the British economist, John Maynard Keynes, for the ammunition he needed to finally wrest Americans away from their previous value of thrift and frugality, and get them to accept and desire a more activist and spendthrift government. Henry Hazlitt captured Keynes's philosophy when he said, "How marvelous is the Keynesian world! The more you spend the more you [have]. The more you eat your cake, the more cake [to eat]." To enable the unlimited printing of money, FDR took the country off the gold standard, paving the way to runaway inflation and the devaluing of the dollar.

FDR's disciple, LBJ, took up the mantle in the 1960s. Similar to the bigoted Wilson, Johnson also believed himself above not only blacks, but the whole world. He stated, "If only I could take the next step and become dictator of the whole world, then I could really make things happen. Every hungry person would be fed, every ignorant child educated, every jobless man employed." He brilliantly tied welfare and poverty programs to civil rights. Despite his obvious racism, he was able to secure the black vote for Democrats to this day. His desire to enter the history books much like his mentor FDR, led to the creation of The Great Society and the resulting massive government expenditures. Ronald Regan's assessment of the War on Poverty? Poverty won. And from the ridiculous debt we have to show for it, we not only made the poor poorer by encouraging the exact wrong ethic of accepting handouts, but we made sll of America poorer for the conceivable future.

Unfortunately the next batch of presidents did not do much better. Reagan's record is mixed. His pro-growth policies were a boom to the economy and tax revenues rose as the economy roared back to life, but spending rose as well and cuts never materialized. He ultimately brought down the Soviet Union with his military buildup, but left a huge bill for it. The Bushes and Clinton also have mixed records. Then came Obama. His record is not mixed at all. He has done nothing to promote growth and everything to promote more government spending. He now sits at the helm of a desperately listing ship of state.