Tim Geithner and Ben Bernanke Usurped The Power Of The U.S. House Of Representatives

So why aren't they in jail? They illegally bought trash loans and credit default swaps with taxpayer money and without congressional authorization. The Fed is permitted to buy only government-backed securities. If government disobeys the law, what's treason? Why should Joe American obey any of the laws of this land when its highest ranking officials don't? Aren't these "high crimes and misdemeanors"? Karl Denninger wants to know, here:

THE FED ADMITS TO BREAKING THE LAW

Now how long will it be before something is done about it?

April 1 (Bloomberg) -- After months of litigation and political scrutiny, the Federal Reserve yesterday ended a policy of secrecy over its Bear Stearns Cos. bailout.

In a 4:30 p.m. announcement in a week of congressional recess and religious holidays, the central bank released details of securities bought to aid Bear Stearns’s takeover by JPMorgan Chase & Co. Bloomberg News sued the Fed for that information.

The problem is this: The Fed is not authorized to BUY anything other than those securities that have the full faith and credit of The United States.

In addition Ben Bernanke has repeatedly claimed that these deals would not cost anyone money. But the current value looks differently:

Assets in Maiden Lane II totaled $34.8 billion, according to the Fed, which set their current market value in its weekly balance sheet at $15.3 billion. That means Maiden Lane II assets are worth 44 cents on the dollar, or 44 percent of their face value, according to the Fed.

Maiden Lane III, which has $56 billion of assets at face value, is worth $22.1 billion, or 39 cents on the dollar, according to the Fed’s weekly balance sheet. A similar calculation for the Bear Stearns portfolio couldn’t be made because of outstanding derivatives trades.

In other words, they have lost more than half of their value.

This was and remains a blatantly unlawful activity.

The Fed has effectively usurped Article 1 Section 7 of The Constituion which reads in part:

All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

The Fed effectively appropriated taxpayer funds without authorization of Congress. At the time these facilities were put in place neither TARP or any other Congressional authorization existed for them to do so, and to date no bill has been put through Congress authorizing the expenditure of taxpayer funds, either through putting them at risk or via outright expense, for this purpose.

Nor does it stop with a "mere" Constitutional violation - The Federal Reserve Act's Sections 13 and 14 do not permit Fed asset purchases except, once again, for items carrying "full faith and credit" guarantees. Credit-default swaps and trash mortgages most certainly do not meet these qualifications.

I know I've harped on this for more than two years, but here we have a raw admission of exactly what was done - and there is simply no way to construe any of it in a light that conforms with either The Constitution or black-letter statutory law.

What's worse is that Tim Geithner, head of the NY Fed at the time, was very much involved in this - that is, he in effect personally, along with Ben Bernanke, usurped the power of the United States House.

The Fed has spent two years trying to hide this from the public and Congress. It has fought off both Congressional demands for disclosure and multiple FOIA lawsuits, the latter of which has resulted in a series of adverse rulings (and, it appears, was ultimately going to force disclosure anyway.)

These actions are unacceptable but promising "never to do that again" is insufficient. In a Representative Republic where the rule of law is supposed to be paramount - that is, where we do not crown Kings and relegate everyone else to the status of knaves, unlawful actions such as this demand that strong and unmistakable sanction also be applied to all wrongdoers in addition to protection against future abuse.

In this case this means that both Geithner and Bernanke must go - for starters.

Amending The Federal Reserve Act of 1913 (as Chris Dodd has proposed to prevent future lending bailouts) is not sufficient in that The Fed did not lend in this case, it purchased, and by buying what we now know were trash loans it violated the black letter of existing law.

There is only one effective remedy for an institution that has proved that it will not abide the law: it must be stripped of all authority that has been in the past and can be in the future abused.

This means that The Fed, if we are to keep it at all, must be relegated to a body that only practices and provides monetary policy - nothing more or less - and that all monetary operations must be performed openly, transparently, and within those constraints.

We cannot have a republic where an unelected body is left free to violate The Constitution with wild abandon and those acts are then allowed to stand.

One final thought: If the individuals responsible for this blatant black-letter violation of the law do not face meaningful sanction for these acts, and neither does The Fed as an institution, can you fine folks over at The Executive, Judiciary and Legislative branches of our government please explain to us ordinary Americans why we should obey any of the laws of this land when you will not enforce the laws that already exist?

Hutaree Keep Silent And Do Not Plead

Reuters is reporting here that defense attorneys for recently arrested Hutaree militia members are arguing their clients should be released on bond pending trial because the government's case against them is political and not criminal.

One attorney is quoted as saying that the government is "prosecuting people who have only exercised their First and Second Amendments rights."

Some of the arrested apparently refused to enter a plea and kept silent. In such cases a plea of "not guilty" is entered for them.

The judge is expected to make a decision on bail on Good Friday.

Roeder Predicts God's Judgment On America For Sin Of Abortion

The following quotations appeared here:

"I stopped him so he could not dismember another innocent baby."

"Wichita is a far safer place for unborn babies without George Tiller."

[George Tiller] "dismembered living children with the nod of approval from the state."

[God's judgment against the US will] "sweep over this land like a prairie wind."

"He will avenge every drop of innocent blood."

-- Scott Roeder, killer of Tiller

All Points Bulletin

The United States Border Patrol is asking citizens to keep on the lookout for a red 1951 Chevy that they suspect is being used to smuggle illegal immigrants across the border from Mexico and into points along the U.S. border. If you see the vehicle pictured below and have reason to believe that it is the suspect vehicle, you are urged to contact your local police department or the U. S. Border Patrol.

h/t Scott

The Left's Anti-American Slander

When leftists and socialists compare Americans who believe in limited government to Nazis, they forget that many of them had fathers who left wives and children behind to join in the effort to defeat Hitler. To such Americans, the comparison is an outrage, and the left would do well not to underestimate the consequences of stoking this anger. The following appeared here:

March 31, 2010

The Hostility Follies

By Jonah Goldberg

Apparently there's a self-proclaimed militia leader named Mike Vanderboegh who runs an obscure, low-traffic blog out of Pinson, Ala. (population 5,007). Mr. Vanderboegh recently called on his fellow "sons of liberty" to break the windows of Democrats who voted for healthcare reform.

So let's start with the obvious: Vanderboegh is an idiot, and anyone who followed his advice is an idiot too. These people are buffoons, not just because such tactics help Democrats but because such behavior is simply wrong, reprehensible and clownish.

Equally wrong, reprehensible and clownish: The reaction to Vanderboegh and his alleged ilk.

The Daily Beast's John Avlon insists that Vanderboegh's rallying cry, combined with some threats and broken windows, make "the parallels, intentional or not, to the Nazis' heinous 1938 Kristallnacht . . . hard to ignore."

Actually, it's really, really easy to ignore the parallels. During Kristallnacht, Nazi goons destroyed not just 7,000 store windows but hundreds of synagogues and thousands of homes. Tens of thousands of Jews were hauled off to concentration camps by the Nazis, who had been in total power for half a decade.

This combination of state power and murderous, genocidal intent is nowhere on display in America today, not in the Obama administration (contrary to what some overheated right-wingers claim) and certainly not among out-of-power conservatives and "tea partyers." It's amazing anyone needs to point this out, but a few libertarians throwing bricks is not the same thing as the tightening fist of the Third Reich. Indeed, it's an anti-American slander to suggest anything like it is going on here, and it cheapens the moral horror of the Holocaust.

Don't tell that to the Democrats and their media transmission belt, who largely turned a blind eye to partisan vandalism and extremist rhetoric against Republicans for eight years but now express horror at what they claim to hear from the right.

Columnist Paul Krugman, who encouraged liberals to hang Sen. Joe Lieberman (I-Conn.) in effigy, is concerned about right-wing "eliminationist rhetoric." The Washington Post's Courtland Milloy can't stand the incivility of the tea partyers, which is why he wants to "knock every racist and homophobic tooth out of their Cro-Magnon heads." Frank Rich says the mantra "take our country back" is now code for a white racist backlash -- though it was an apparently fine Democratic applause line when George W. Bush was president.

So what's the evidence for this new reign of terror? Those broken windows, some nasty voice and e-mail messages (not counting those aimed at Republicans, naturally), a coffin "left" at a Missouri congressman's home, a few repugnant signs at rallies and allegations from Reps. Emanuel Cleaver II (D-Mo.)and John Lewis (D-Ga.) that they were spit on and insulted with the "N-word," respectively.

But wait. The coffin was part of a protest over the death of "our freedoms" and was toted by the protesters, not left anywhere. And videos make it clear that what Cleaver called spitting was a protester spraying too much saliva while talking, the racist pig.

As for the epithet aimed at Lewis, if it happened, it's disgusting. But going by the video, there's nothing to back it up, and Rep. Andre Carson's (D-Ind.) claim that the N-word was chanted 15 times is pure dishonesty.

Let's assume it is true. I thought liberals rejected guilt by association as McCarthyism. Or are we to believe that every opponent of Obamacare is a racist?

On March 3, Politico broke a story about a leaked PowerPoint presentation delivered at a GOP retreat in Florida. It laid out, in cartoonish terms, a fundraising strategy exploiting "fear" of President Obama's "socialist" agenda. Ranking Republicans condemned and repudiated it.

Now, Obama's political arm, Organizing for America, is fundraising based on fear, sending out e-mails insinuating that Republicans are unleashing a lynch mob to repeal Obamacare. Rep. Chris Van Hollen (D-Md.), chairman of the Democrats' Congressional Campaign Committee, insists we all should be very scared.

Heaven forbid anyone suggest a coordinated strategy is at work here. That would be distracting us from the Kristallnacht unfolding before our eyes.

The Whole Country Knows ObamaCare Is A Fraud

Noemie Emery in "Dems Break Spirit of Law When Enacting Law" for The Washington Examiner, which appeared here, puts the matter this way:

The passage of health care is not the same thing as obstruction of justice, but it has a connection, in nature and kind. Before Scott Brown appeared, the bill, while unpopular, was headed on a legitimate path to enactment, by passing the House and the Senate, and going into a conference committee, after which the revised version would be sent for final affirmation to the Senate and House.

After Brown, this couldn't occur as the Senate would kill it, so it had to sneak by -- against the popular will and by bribes, threats and buy-offs -- through a loophole for which bills of this import were not intended. Big bills aren't supposed to squeak by on a simple majority, and under proper procedure, it would not have happened.

It followed the law, while it shattered its intent. The whole country knows it's a fraud.

You'll want to read the rest at the link.

Obamacare: Designed To Fail To Get To Single Payer?

If so, it gets the chutzpah award of the millennium. The following appeared here:

Power Line Blog: John Hinderaker, Scott Johnson, Paul Mirengoff

http://www.powerlineblog.com

NON-ENFORCEMENT: A FEATURE OR A BUG?

March 29, 2010 Posted by John at 6:59 PM

The individual mandate is one of the most controversial features of Obamacare, so when it came out that the law makes no provision to enforce the mandate, many were nonplussed. Morgen Richmond, in the linked article, writes:

[W]ithout an effective mechanism of enforcing the individual mandate, the entire system is likely to collapse. (The individual mandate is the "third leg of the stool" as many a liberal has been pointing out for months.) Given that the bill also bans insurance companies from denying coverage based on pre-existing conditions, WHY WOULD ANYONE OBTAIN INSURANCE COVERAGE PRIOR TO NEEDING IT? This was already going to be a problem with the relatively low cost of the penalty, but take away any meaningful enforcement of it and it is a complete and total joke.

The net result will be an ever increasing shift of healthcare costs on to those who remain in the insurance system (or to tax payers), and possibly even the bankruptcy of the insurance industry.

Hmm. Bug or feature? We report, you decide. A reader writes:

Absolutely essential and fundamental to the very design of the Obamacare bill is the individual mandate to require purchase of prescribed health insurance. And yet in what is an amazingly revealing feature of the bill there is literally no provision for enforcement of the mandate. While this has been known for some time -- it was discussed a few weeks ago in NRO in the context of resistance or civil disobedience to the mandate -- it is only now getting the exposure it deserves.

As the linked article makes clear, while the bill does provide for fines to enforce the mandate through the income tax system....the IRS is explicitly prevented from collecting the fines by assessments, liens or seizures, no civil or criminal penalties attach to failure to pay such fines and no interest accrues from the date the fine is due!! This is actually amazing and cries out for explanation.

In my view, this is not the result of a simple oversight or error...quite the contrary. This is a feature, not a bug. We can be sure of this because they had to go to the trouble of specifying that enforcement was prohibited; silence would have meant that the normal IRS enforcement powers were available and presumed to be used to ensure that the mandate legislated by Congress was carried out. Normally the simplest explanation would involve stupidity, incompetence, error, haste or some other ordinary failure. In this case I think the explanation has to be, since it was intentionally put in the bill, that the architects of Obamacare intend that the individual mandate will fail....and guarantee it by actually affirmatively prohibiting enforcement.

Why would they do this? One reason is that, despite all the confident left wing bluster, they may very well be afraid that, given the extraordinary implications for the vast expansion of government power, the Supreme Court may well find, as they should, such a mandate to be unconstitutional. [Ed.: Unlikely, in my view.] That would undermine the whole program and is a complication that the Obama administration I am sure would prefer to avoid. As well as avoiding nasty scenes of property seizures or wage garnishments lack of enforcement would also prevent an individual desiring to make a test case from having standing to sue. (Why the approach taken by the Attorney General in Virginia in relying for standing on conflict of state and federal laws is clever.)

The real reason, I suspect, is more insidious -- quite simply to destroy the private health insurance industry and create an irresistible demand for expansion of the program to a public option and ultimately to single payer provision. It is undeniable that guaranteed issue of insurance at ordinary rates for those with preëxisting medical conditions is popular; but forcing insurance companies to cover them at average rates cannot possibly work unless healthy younger people are forced into the risk pool at rates higher than what their risk rating would otherwise be. Without the mandate, in other words, the insurance companies cannot possibly be viable and also cover preëxisting conditions at average premium rates.

Quite simply, Obamacare has created a ticking time bomb for the insurance industry. Those with preëxisting conditions will be covered.....and demand continuation of the coverage at prescribed rates....and those who ignore the mandate, presumably anybody at all affected by it, face no consequences. As costs spiral out of control, premiums will have to rise and subsidies increase. Insurance companies would have to either fold or shift costs....to those covered by employers....becoming a perfect target for left wing demagoguery and vilification. The only way out as more and more of those covered by employers get pushed into the exchanges as costs get shifted to them and employers no longer offer insurance -- yet another intended consequence -- is the public "option" or outright nationalization through a single payer plan.

We know that a single payer nationalized health care plan is the long term objective and intention for proponents of Obamacare and has been all along. They're completely disingenuous about how "incremental" and "modest" the program is. The astonishing fact that they deliberately prohibited enforcement of a critical component of the plan tells you all you need to know. It will intentionally create a crisis...a feature, not a bug....and a crisis is something this crowd never wants to go to waste.

Eric Hoffer For Our Times

"Nowhere at present is there such a measureless loathing of their country by educated people as in America," Eric Hoffer said.

"A ruling intelligentsia," he said, ". . . treats the masses as raw material to be experimented on, processed and wasted at will."

The Hutaree: Something About This Story Does Not Smell Right

Down in the middle of the report from The Detroit News about the arrested militia members was this little narrative:

"According to federal authorities, the group had identified a Michigan law enforcement officer as a potential target. Their idea was to kill that officer and when law enforcement officials from around the country came to the area for the funeral, they would attack the procession with improvised explosive devices and 'explosively formed projectiles.' They hoped the attack would serve as a 'catalyst for a more wide-spread uprising against the government.'"

No one who's been paying attention to what's been happening in this country since 2008 believes for one minute that there has been any feeling of animosity whatsover toward law enforcement officers in any of the groups opposed to what "government" has been shoving down the throats of the American people.

Law enforcement does not represent "the government" in the minds of Tea Partiers, Republicans, militiamen and the millions of Americans who are opposed to Obama's policies. In fact, police groups such as the Oath Keepers have formed along with this groundswell of opposition, pledging their loyalty to the rule of law and the constitution.

If members of the Hutaree believed their actions would be a catalyst to incite violence against the police, I'll believe it when I hear it from their lips in testimony, and chalk it up to the deluded thinking so characteristic of religious fanatics. But right now this story is nothing more than the narrative of the Feds. On the contrary, part of what frustrates rank and file Americans so much, quite apart from the votes of Congress, is the waiting for November 2, 2010, when the target will finally be in the crosshairs.

The timing of the raid comes hot on the heels of the healthcare vote circus and weeks before a so-called recon mission planned by the Hutaree was to take place.

After Obama and the Democrats have pushed everything to the far limits of the law for over a year we're actually supposed to believe their explanation?

Ha! Ha! Ha! Ha! Ha! Ha!

Feds Send A Message To The Seditious, Hot On The Heels Of You Know What

In "Indictment: Militia Members Sought To 'Levy War' Against US," which appeared here, Paul Egan and Mike Wilkinson for The Detroit News report that nine Hutaree militia members were arrested because they planned to "oppose by force" the national government of the United States:

The five-count indictment alleges that between August 2008 and the present, the defendants were trying to use bombs and other weapons to oppose the U.S. government. ...

"This is an example of radical and extremist fringe groups which can be found throughout our society," said Andrew Arena, FBI special agent in charge. "The FBI takes such extremist groups seriously, especially those who would target innocent citizens and the law enforcement officers who protect the citizens of the United States."

The eight men and one woman are members of the Hutaree, identified as an "anti-government extremist organization" in the indictment, and each faces three to five charges, including sedition, attempts to use weapons of mass destruction, teaching/demonstrating use of explosive materials and two counts of carrying weapons in relation to a crime of violence. ...

Accused are: David Brian Stone, 45; his wife, Tina Stone, 44; his son, Joshua Matthew Stone, 21, all three of Clayton; and his other son, David Brian Stone Jr., 19, of Adrian. Also accused are Joshua Clough, 28, of Blissfield; Michael Meeks, 40 of Manchester; Thomas Piatek, 46, of Whiting, Ind.; Kristopher Sickles, 27, of Sandusky, Ohio; and Jacob Ward, 33, of Huron, Ohio. ...

"Because the Hutaree had planned a covert reconnaissance operation for April which had the potential of placing an unsuspecting member of the public at risk, the safety of the public and of the law enforcement community demanded intervention at this time," she said in a prepared statement.

There is much more at the link.

Go Rule Your Self

"As for me, after more than a year of seeing how [Obama's] 'prodigious oratorical and intellectual gifts' have worked themselves out in action, I remain more convinced than ever of the soundness of Buckley's quip, in the spirit of which I hereby declare that I would rather be ruled by the Tea Party than by the Democratic Party, and I would rather have Sarah Palin sitting in the Oval Office than Barack Obama."

So says Norman Podhoretz today, here.

Conservatives will wonder at the choice of language.

Ruled? By political parties? The Tea Parties' very existence is in large measure a reaction to being ruled, especially by political parties which are tone deaf to the broad feeling rising in the American people that the founding ideas have been under attack by both Republicans and Democrats grown long in the tooth and that our traditional liberties are being flushed down the toilet. Self-rule and self-government are the ideas conservative spokesmen ought to be expounding, if in fact they are conservatives.

Sarah Palin's on-going work on behalf of old guard Republicans like Senator John McCain is not encouraging in this regard, the other aspects of her appeal notwithstanding. McCain's long miserable record precedes him, proven by his mad dash to the right in his difficult re-election bid. Sarah Palin ought to consider more carefully how a loss for McCain on August 24th, after supporting him so strongly, might be a liability for her going forward.

Militia Failure Friday Number One

The FBI's m/o is similar to the one used by the Feds to seize failing banks, except that the FBI uses military roadblocks and helicopter air support when it swoops in on the weekend. I'm going to call this Militia Failure Friday number one, because there will be more.

Jennifer Chambers, writing for The Detroit News in the story "Seven Arrested in FBI Raids Linked to Christian Militia Group," which appeared here, reports that:

seven people, including some from Michigan, have been arrested in raids by a FBI-led Joint Terrorism Task Force in Michigan, Ohio and Indiana as part of an investigation into an Adrian-based Christian militia group, a person familiar with the matter said. ...

Sources have said the FBI was in the second day of raids around the southeastern Michigan city of Adrian that are connected to a militia group, known as the Hutaree, an Adrian-based group whose members describe themselves as Christian soldiers preparing for the arrival and battle with the anti-Christ.

WXYZ-TV reports that helicopters were spotted in the sky for much of Saturday night, and agents set up checkpoints throughout the area. Witnesses told the station that it was like a small army had descended on the area. The Department of Homeland Security and the Joint Terrorism Task Force are also involved in the raids. ...

The Associated Press is reporting that FBI spokesman Scott Wilson in Cleveland said agents arrested two people Saturday in northwest Ohio. A third arrest was made in Illinois on Sunday, a day after raids in northwest Indiana.

There is much more at the link.

A Reasoned Estimate of the Backlash to Congressional Misrepresentation

Nolan Finley in today's Detroit News says in "Democrats' Deafness Reaps Hate Mail" that

Democrats stubbornly refused to listen to the tremendous public outcry against their health care package. They attempted to minimize the protests and marginalize the protesters. But now that they've shoved the bill down America's throat, they're feigning shock -- and even fear -- at the vehemence of the backlash. ...

But most of what is being passed off as menacing is nothing more than old-fashioned hate mail. Much of it is crude and offensive, a lot of it is inappropriate, but it doesn't rise to the level of a threat. ...

For a long stretch, I heard from a detractor who wanted me separated from body parts that I'm rather fond of. I felt intensely unloved, but never in danger of losing my vitals.

There's nothing new here. Hatred has been part of politics for some time. Ask former President George W. Bush about his mail. Bush loathers even made a movie fantasizing about his assassination.

The real threat presented by the hate mail is to the Democratic pretense that they've passed a bill demanded and welcomed by the American people.

Read more at the link.

Obama Continues Bush Bank Bailouts With New Program

The following post appeared here:

New Obama Mortgage Plan: A Backdoor Bank Bailout

Posted By Mark A. Calabria

March 26, 2010

Today President Obama announced an expansion and modification of his Home Affordable Modification Program (HAMP). While one can debate the merits of incentives to keep unemployed families in their homes while they search for jobs — I personally believe this will more often than not keep those families tied to weak labor markets — what should be beyond debate is the various bailouts to mortgage lenders contained in the program’s fine print.

Several of the largest mortgage lenders, including some that have already received huge bailouts, carry hundreds of billions worth of second mortgages on their books. As home prices have nationally declined by almost 30 percent, these second mortgages are worthless in the case of a foreclosure. Second mortgages are usually wiped out completely during a foreclosure if the price has decreased more than 20 percent. Yet the Obama solution is now to pay off 6 cents on the dollar for those junior liens. While 6 cents doesn’t sound like a lot, it is a whole lot more than zero, which is what the banks would receive otherwise. Given that the largest lenders are carrying over $500 billion in second mortgages that may need to be written down, we are looking at tens of billions of taxpayer dollars again being funneled to the very banks behind the mortgage crisis.

If that bailout isn’t enough, the new plan increases payments to lenders to not foreclose, all at the expense of the taxpayer. While TARP was passed under Bush’s watch, and he rightly deserves blame for it, Obama continues these bailouts in the name of avoiding a much needed correction in our housing market.

Article printed from Cato @ Liberty: http://www.cato-at-liberty.org

"Abortions Will Be Performed At Community Health Centers"

"Prediction: Abortions will be performed at community health centers. You can bet your foreclosed mortgage on that. There was always a will by this administration, and now there's a way."

So says Kathleen Parker, a right wing kook who voted for Obama and writes for the liberal Washington Post, here.

P.S. And you'll be paying for them through Obamacare.

Hot Air

h/t theo

ObamaCare Will Increase Deficits By Over $500 Billion in First Decade

Sorry. Just correcting the lies.

The article was posted here:

March 25, 2010

Bond Markets Reflect the True Cost of Obamacare

By Michael Barone

Not many people noticed amid the Democrats' struggle to jam their health care bill through the House, but in recent weeks U.S. Treasury bonds have lost their status as the world's safest investment.

The numbers are pretty clear. In February, Bloomberg News reports, Berkshire Hathaway sold two-year bonds with an interest rate lower than that on two-year Treasuries. A company run by a 79-year-old investor is a better credit risk, the markets are telling us, than the U.S. government.

Buffett's firm isn't the only one. Procter & Gamble, Johnson & Johnson and Lowe's have been borrowing money at cheaper rates than Uncle Sam.

Democrats wary of voting for the health care bill may have been soothed by the Congressional Budget Office's report that it would reduce federal deficits over the next 10 years. But bond buyers know that the Democrats gamed the CBO system to get a good score.

The realities, as former CBO Director Douglas Holtz-Eakin pointed out in The New York Times, are different. The real cost is disguised by the fact that the bill includes 10 years of revenue but only six years of spending. It includes $70 billion in premiums for long-term care that will have to be paid out later. It excludes $114 billion in discretionary spending needed to run the program. It includes nearly half a trillion dollars in unrealistic Medicare savings.

Holtz-Eakins's bottom line: The bill will not lower deficits, but will raise them by $562 billion over 10 years. Treasury will have to borrow that money -- and probably pay much higher interest than it's paying now.

Moreover, once the bill is fully in effect, the Cato Institute's Alan Reynolds points out, its expenses are likely to grow at least 7 percent a year -- significantly faster than revenues. At that rate, spending doubles every 10 years.

No wonder that Moody's declared last week that the Treasury is "substantially" closer to losing its AAA bond rating.

It's not only the federal government that is heading toward insolvency. State governments will have to spend more under the health care bill -- $735 million in Tennessee alone, according to Democratic Gov. Phil Bredesen.

And state governments are already facing a huge problem called pensions. The Pew Charitable Trusts estimates that state government pensions are underfunded by $450 billion. My American Enterprise Institute colleague Andrew Biggs argues in The Wall Street Journal that the real figure is over $3 trillion.

The reason: State governments set aside cash to invest in pensions, but they typically assume that their investments will rise 8 percent a year indefinitely. They haven't been getting such high returns and are not likely to do so in the future. But they are under legal obligations, which courts won't allow them to escape, to pay the pensions. Retirees get paid off before bondholders, which means that states are going to have to pay more interest when they borrow.

Back in the 1990s, Clinton adviser James Carville said that if he was reincarnated he would like to come back as the bond market -- "because you can intimidate everybody." Governments, like all organizations, need to borrow routinely. But investors won't lend unless they think they will be paid back. And they will demand higher interest rates as their loans become riskier.

On Sunday, 219 House Democrats, soothed by their leaders' gaming of the CBO scoring process, voted in reckless disregard of what the bond market has been telling them. Some may share Speaker Nancy Pelosi's optimism that the government's looming fiscal disaster can be avoided by imposing a value-added tax -- in effect, a national sales tax.

But, as we know from the experience of high-tax Western Europe and relatively low-tax America over the last three decades, higher taxes tend to retard economic growth. Lower economic growth means less revenue for government than in CBO projections. Less revenue means more borrowing -- and at some point lenders are going to call a halt.

Barack Obama's project of transforming the United States into something like Western Europe is, according to the CBO, raising the national debt burden on the economy to World War II levels. I see train wrecks ahead -- as the bond market forces huge spending cuts or tax increases first on states and then on the federal government. It will make what happened in the House Sunday look pretty.

You Can't Opt Out, You Can't Buy Cheap, And Healthcare Will Be Rationed

The following was posted here:

March 25, 2010

The Reality of Obamacare

By Jonah Goldberg

First: Congratulations to President Obama and the Democratic leadership. You won dirty against bipartisan opposition from both Congress and the majority of Americans. You've definitely polarized the country even more, and quite possibly bankrupted us, too. But hey, you won. Bubbly for everyone.

Simply, you have nationalized health care by proxy. Insurance companies are now heavily regulated government contractors. Way to get big business out of Washington and our lives! These giant corporations will clear a small, government-approved profit on top of their government-approved fees. Then, when health-care costs rise - and they will - Democrats will insist, yet again, that the profit motive is to blame, and out from this Obamacare Trojan horse will pour another army of liberals demanding a more honest version of single-payer.

The Obama administration has turned the insurance industry into the Blackwater of socialized medicine.

That's what Obama always had in mind. During the now-legendary health-care summit, Obama, who loves to talk about "risk pools," "competition," "consumer choice," and the like, let it slip that he actually doesn't believe in insurance as commonly understood. The notion that Americans should buy the health-care "equivalent of Acme Insurance that I had for my car" seemed preposterous to him. "I'm buying that to protect me from some catastrophic situation," he explained. "Otherwise, I'm just paying out of pocket. I don't go to the doctor. I don't get preventive care. There are a whole bunch of things I just do without. But if I get hit by a truck, maybe I don't go bankrupt." Apparently, people are just too stupid to go to the doctor - or maintain their homes - if they have to pay much of anything out of pocket.

The endgame was to get the young and healthy to buy more expensive insurance than they need or want. "Expanding the risk pool" and "spreading out the risk" by mandating - i.e., forcing - young people to buy insurance is just market-based spin for socialist ends. A risk pool is an actuarial device where a lot of people pay a small sum to cover themselves against a "rainy day" problem that will affect only a few people. Such "peace of mind" health insurance is gone. What we have now is health assurance. With health assurance, there are no "risk pools" really, only payment plans.

Under the new law, all the exits from the system are blocked. You can't opt out or buy cheap, high-deductible Acme car-type insurance, even if that's what you need. Ultimately, even that coercion won't be enough to make the whole thing work, because the "cost curve" will not be bending.

Profit-hungry insurance companies were never the problem. (According to American Enterprise Institute economist Andrew Biggs, industry profit margins are around 3 percent, and the entire industry recorded profits of just $13 billion last year, close to a rounding error in Medicare fraud estimates.) Rather, health-care costs have been skyrocketing because consumers treat health insurance like an expense account. Putting almost everyone into one "risk pool" doesn't change that dynamic; it universalizes it. And eventually, the only way to cut costs will be to ration care.

In September, Obama got into a semantic argument with ABC's George Stephanopoulos, who noted that requiring all Americans to pay premiums for a government-guaranteed service sounds an awful lot like a tax. "No. That's not true, George," Obama said. "For us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase. What it's saying is . . . that we're not going to have other people carrying your burdens for you."

Stephanopoulos invoked a dictionary definition of a tax: "a charge, usually of money, imposed by authority on persons or property for public purposes." Obama laughed off the idea that a dictionary might outrank him as the final arbiter of a word's meaning: "George, the fact that you looked up . . . the definition of tax increase indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition."

Okay, put aside your dictionaries. The legislation allocates $10 billion to pay for 16,500 IRS agents who will collect and enforce mandatory "premiums." Does that sound like the private sector at work to you?

A Short Spelling Lesson

The last four letters in American..........I Can

The last four letters in Republican…......I Can

The last four letters in Democrats.........Rats

End of Lesson

Test to follow in November

h/t bob