With a newly elected Democratic President and a Democratically controlled Congress, the proverbial iron has become quite hot for the striking of socialized medicine.  Unfortunately, what comes off of this iron might just be another nail in the coffin of this country and its freedom!  Oh well, at least they had good intentions right?

Bill in question: That giant one in the senate, do we even need to name it?

The good intentions: To provide free and/or affordable health care to everyone.

The reality: Health care rationing and lower quality care for all.  One giant bureaucratic mess that will lead us even more to debt.  This can be summed up with two words: less freedom.

Those who benefit: The medical industrial corporations.  If the government becomes a health care provider, smaller health care providers won’t be able to compete and only the few large ones will remain.  The politicians will also benefit by looking as the saviors who brought us health care “reform” next year, just in time for the elections.

Conclusion: The proponents of socialized health care believe we need this bill because the free market has failed to provide cheap and effective health care.  In some states, there are just two main health care providers and people see them as big and greedy corporations failing to meet their customers needs.  Since this is a health care debate, let’s do some dissecting of these arguments!

Has the free market really failed us when it comes to health care?  To make this argument, you have to assume that we even have a working free market in health care and I argue that this is a false assumption.  In a perfect free market, the cost of a good or service will go down over time and the quality will improve.  Take for instance the computer industry, where regulation is limited, competition is thriving, and there is no government meddling or over-reaching insurance policies.  Technology is improving so quickly in this industry that you can buy a computer that is twice as fast and powerful every two years and for a cheaper price.  But if you look at health care, costs have been going up, quality of service has been going down, and doctors are afraid to do their jobs due to our overly litigious society (a blog for another day).  But this trend is not occurring in every field of health care, specifically plastic surgery and lasik eye surgery.  The costs of these procedures have been ever dropping and the quality has been improving.  Why is the free market working here??  Well, for one thing there is more competition and these services are not typically covered by health insurance.  Thus the consumer actually can shop around to compare prices, instead of having them all hidden and paid for by the insurance companies.

Another distortion of the free market in health care is the misapplication of insurance.  Insurance is a service that is supposed to cover extraordinary costs of something that occurs in a rare circumstance.  It’s not something that is supposed to cover regular check ups.  You buy insurance for your car in case you get into an accident and you need to cover the repairs.  You don’t buy it to cover your oil changes!  Another deleterious effect of having insurance covering just about everything is that it causes people to abuse it.  If you are ever in the doctor’s office with a broken arm and have to wait before they take someone who has the sniffles, you can thank the insurance industry for that one.  Not that it’s the person’s fault who has the sniffles, but if they knew what is the true cost of their visit with the doctor (not counting the copay), then perhaps they would change their mind if they had to pay for it themselves.  Which leads to my last point, when you have the insurance companies paying for everything, you never know what is the true cost of the service you’re using or if you’re getting the best deal.  Doctors can charge whatever they want and inevitably this causes prices to rise without direct interaction with the consumer.  This is totally contrary to the free market where you know exactly how much something costs, thus you can bargain for a better deal or go somewhere else if you feel like you are getting ripped off.

In the case of limited providers in each state and giant health care company monopolies, you can thank government laws for that.  If we wanted to return to a free market for health care, we’d allow people to purchase insurance policies across state lines, vastly increasing the amount of competition in the field.  However, as it currently stands, people can only purchase health insurance from providers in their own state. This, combined with stifling state regulations on insurance (which always favors big business and drives out the little guys), is the reason why some states have no competition.  State representatives feel like they are protecting their constituents by forcing them only to buy the best policies as determined by the state (a sentiment shared by our representative Lois Capps), but this just results in less freedom and higher costs.  What about a minimum wage worker who can’t afford a high priced California insurance policy and would benefit from a cheaper policy from a provider in South Dakota or Mississippi?  They are SOL.  Sorry, California is protecting you from those “inferior policies.”

Another way to return to a free market in health insurance would be to decouple it from businesses and to give individuals tax breaks.  Back in the 50’s when the economy was booming, businesses originally started offering health insurance as one of the many benefits to attract new workers.  It’s a great thing when a business is so successful that it can freely and willingly provide their employees this kind of benefit.  But when the government mandated that all companies of a certain size offer this benefit, this was terrible for those companies that weren’t in the position to offer it.  It caused companies to go under and jobs to be lost.  Also, it doesn’t make any sense to couple businesses with a completely unrelated service.  You wouldn’t expect your company to pay for your car insurance.  So why do we expect them to pay for our health insurance?  Also, businesses can negotiate with health care providers for special deals and they also get tax breaks for purchasing health insurance for their employees.  If we want to give individuals more freedom over their health care then we should also offer these same benefits to them.  Making all medical expenses tax deductible and putting no limits on HSA’s (Health Savings Accounts) would help accomplish this.

My last point is a philosophical one, and it is that health care is not a right, but a privilege.  It’s a service like any other, such as car insurance or technical computer support.  If you agree with our Constitution and Founding Fathers, then individuals are endowed with certain rights by virtue of being human, and among these are life, liberty, and the pursuit of happiness.  They had health care back then and our Founding Fathers could have written it into the Bill of Rights, but they knew that this is not something that is guaranteed to an individual by virtue of being human.  Health care is a service that must be provided by someone and their labor.  You cannot claim that someone’s labor is your right no more than you can say their property is your right.  This a fundamental reason why anyone who values freedom and the Constitution must not believe in socialized health care.

Our system of health care is definitely broken, but adding more government control over it is not the solution.  We need to restore the free market in this industry and give the individual more freedom.  Decoupling it from businesses, offering people the ability to purchase policies from across state lanes, unrestricting HSA’s, allowing individuals to make medical expenses tax deductible, and only having medical insurance cover major catastrophes would be a step in the right direction towards obtaining health freedom.  This would result in the price of health care going down, the quality of service to go up, and give you greater freedom over your health.

Today there is a money bomb for Rand Paul’s campaign and you can donate on the main website here http://www.randpaul2010.com/.  For those who don’t know, Dr. Rand Paul is an opthemologist who is running for Senate on the Republican ticket in Kentucky and is the son of Ron Paul.  The significance of chosing today as the money bomb is that it is the anniversary of the Boston Tea Party, a very important event in our history that eventually lead to the Revolutionary War.  Also, this was the date two years ago when Ron Paul’s presidential campaign broke the online one day fundraising record by having a money bomb that brought more than 6 million dollars in, putting his campaign on the map.  So far Rand Paul, who has never had a career in politics, has surprised the establishment candidate Trey Grayson by not only out fundraising him, but also pulling ahead of him in the polls.  Electing him to Senate will not only be a big blow against the status quo, but it will be a big victory for the cause of freedom.

Last Monday Obama proposed a surge of 30,000 troops in Afghanistan.  Once again the alleged peace candidate has decided to follow America’s foreign policy of intervention, nation building, and preventative war.  To those who were shocked by this announcement, it is only fair to point out that this was part of Obama’s campaign platform.  He didn’t want to be portrayed as a complete peacenik compared to the hawkish McCain, nor would he want to propose the radical idea that America should mind its own business.  Thus, his platform was that we shouldn’t be waging a perpetual war in Iraq, instead we need to be focusing on war in Afghanistan.  Yes, this is the radical change and hope we can believe in America.  But please don’t be so surprised when you begin to realize how similar his foreign policy is starting to look to that of Bush’s.  Jon Stewart even made this comparison recently in a segment of his show that you can see here.

Unfortunately or fortunately based on what you think of his proposal, Obama is seeing resistance from both political parties on his idea of a surge.  There are few politicians in Congress who are even taking a principled stance against this, and then there are many who are taking a stand because they fear for their jobs in the upcoming election of 2010 (the biggest motivating factor for the majority of politicians).  Sadly, there are few who are speaking against America’s current foreign policy.  Recently, Ron Paul tried questioning Obama’s cabinet members for foreign policy, including our Secretary of State Hillary Clinton, if they believed in the Bush Doctrine of preventative war .  For those most part, they all agreed with the doctrine.  Clinton stated that since Al Queda attacked us on 9/11, we needed to retaliate in Afghanistan.  Ron Paul corrected her by stating a fact that none of the 9/11 bombers were Afghani, in which Clinton shrugged off.  She then rationalized our efforts in Afghanistan by stating that it’s where Al Queda is primarily centered, thus we need to be over there actively pursuing them.  It makes sense doesn’t it?

Well if you look at the date, it’s almost 2010 and we still haven’t captured Bin Laden.  Bush attempted it and failed, and then he focused his efforts on Iraq.  Now Obama is playing the same cards, trying to justify the threat of Al Queda to nation build in Afghanistan and Pakistan.  Once again we have no clear-cut goals or a defined enemy, the perfect recipe for never ending war and perpetual hostility towards our country.  Once again we have failed to learn from history or have stopped to think about the primary cause of terrorism, which is foreign occupation.  The Soviets tried nation building in Afghanistan and failed during the Cold War.  Osama Bin Laden succeeded in bankrupting the Soviets in that war, which ultimately lead to the collapse of the USSR.  Now we are thinking about following the same playbook as the USSR and think the outcome will be any different?  We are stretched so thin as it already is with Iraq and our economy is in shambles, thus another war in Afghanistan will wreak financial havoc upon our nation.  Not only that, but we are playing right into the hands of Osama Bin Laden.  After he admitted responsibility for the 9/11 attacks, Bin Laden threatened that if we attacked his country, he would defeat us by bankrupting our country.  In addition, by being over there as the “aggressor,” we are helping Bin Laden recruit more terrorists who wouldn’t have normally joined Al Queda.  It’s a perpetual cycle.  And eventually it will cause us blowback, unintended consequences due to our interventionist foreign policy, like it did on 9/11 (we had been in the Arabian Peninsula meddling with their affairs since the 1950’s).  We need to rethink our foreign policy, starting with bringing our troops home and minding our own business.  Our economy is already damaged enough, and ending these perpetual wars would save us billions of dollars.  A foreign policy of peace, diplomacy, and honest friendship was what we once had in the age of Jefferson when we were a non-interventionist nation.  We need to hearken back to these old days of armed neutrality where we “spoke softly and carried a big stick” as Teddy Roosevelt once said.

First, as a disclaimer, this idea of mine wasn’t original and what inspired me was this article from Mises.org: http://mises.org/story/3584.  Thus, I went to the bank today and asked for some $2 bills and was able to get as many as I needed (I requested $20).  Paying with these is a purely symbolic gesture and I anticipate it bringing up some questions, in which I’ll respond by having the person Google “Why I Pay With Two-Dollar Bills” to find my underlying reason (the first article that appears on the search results is the one I have aformentioned).  After awhile, I may eventually start stamping them with an End the Fed logo to make it a more literal message for people who would fail to grasp any symbolic meaning behind my action or who would be too disinterested to pursue a Google search.

As a collector of coins and someone who used to save $2 bills, I think it’s going to be really strange at first when using these as normal currency (despite the fact that the are readily available at most banks).  Some interesting facts about the $2 bill is that it is the least circulated bill, but is still legal tender (ie businesses are legally obligated to accept them as payments).  The person on the front of the bill is America’s third president, Thomas Jefferson, who was one of the most patriotic figures in American history and the first president to dismantle the first US central bank (Andrew Jackson was the next president to abolish the second central bank…who’s going to be the third?).  On the back of the bill is one of the most important events in our nation’s history, the signing of the Declaration of Independence.  Not a bad note to represent the Freedom Movement if I may say so myself.

On July 29th, the national minimum wage will get increased to $7.25 an hour.  In a time when our economy is suffering, this will cause many more jobs to be destroyed.  Have you ever wondered what happened to movie theater ushers, or gas station pumpers, or airport luggage porters?  Minimum wage laws destroyed these jobs because they weren’t worthwhile for businesses to continue to offer those services.  Peter Schiff does a great job explaining how minimum wage laws has resulted in these “lost jobs” in his video blog here: http://www.youtube.com/watch?v=I_IMuxMXd3E.

Bill in Question: Minimum Wage

The good intentions: To provide low skill workers a living wage to keep up with inflation.

The reality: Less jobs and more poverty.  The poor, who this law is intended to help, will get hurt the most.

Those who benefit: Those who are lucky enough to keep a minimum wage job.  Labor unions because there will be less job competition. Also, the politicians because they will be viewed as friends of the working class for their next election.

Conclusion: This is a classic example of an “innocent” solution to a problem.  Unfortunately, as most government solutions go, it’s not so innocent when you realize the truth: it’s coercive and promotes self sacrifice (one of the main themes in Atlas Shrugged if you haven’t read it).  The problem politicians are trying to address is to give low skill workers a living wage to keep up with inflation and the cost of living.  But businesses aren’t in the market for charity.  They are in the market to make profit.  Therefore, this law prohibits businesses from hiring a worker for their true wage.  In a sense, it’s discrimantory.  It prevents businesses from hiring more workers and forces it to choose the few it wants to keep on the payroll.  Also, businesses operating on tight margins will find themselves no longer viable, resulting in more job losses and further unemployment.

Consider looking at this using basic economics 101.  Politicians can’t just set a price without consequences of upsetting the equilibrium that is supply and demand.  When prices are set artificially low, this causes an increase in demand and shortages in product.  When prices are set artificially high, this results in a decrease in demand and a surplus in product.  Wages work the same way when you consider the employee as a product.  When the employee’s wages are artificially set too high, then you are going to see a decrease in demand for them and a surplus of workers (ie. unemployment).

If politicians really wanted to tackle this problem then they should look at the heart of it, which is inflation.  Battling inflation is a beast in itself and would require a much bigger solution than a simple “fix” like minimum wage.  But I think understanding basic economics would be a start.  You can’t base a currency on nothing and expect it to maintain a constant value.  Our dollar now is worth 95% less than it once was before we moved off the gold standard and created the Federal Reserve to print our currency.  Allowing a free market with competing currencies and wages would be a great start, as well as loosening regulation which stifles business and makes it less viable to produce in this country.  But that is a whole new blog for another day…

For additional info, check out this Milton Friedman clip on minimum wage from over 50 years ago: http://www.youtube.com/watch?v=ca8Z__o52sk

Also, check out this great article from Peter Schiff on LewRockwell.com: http://www.lewrockwell.com/schiff/schiff34.1.html

The Freedom Movement has been rolling!  Ron Paul’s presidential run in 2008 ignited the wildfire of freedom in American’s minds and transitioned his efforts into the Campaign for Liberty, now a full blown PAC.  Several freedom candidates endorsed by Ron Paul, such as BJ Lawson in North Carolina and Murray Sabrin in New Jersey, tried riding Paul’s groundswell of support to also run for Congress but they fell short.  I felt their timing was a bit too early as the public was still in their “distaste for Republicans” phase and voted any liberal candidate to office they could.  But come 2010, a huge chance will arise for the freedom movement to strike back and to send many new Ron Pauls to Congress to break down the Big Government stranglehold.  Who are these candidates?  If you look on the right side of my blog, I have added a new section titled “Liberty Candidates 2010″ that lists out some of the next Ron Pauls for Congress that I support and what position and state they are running in.  Some have officially announced their candidancy while some are still in the exploratory phase:

• RJ Harris (http://www.rjharris2010.com) – A republican candidate running for House of Representatives in Oklahoma.  Served in the army and has made a tour in Iraq.  Was once a neo-con, but changed to a Ron Paul republican after reading the constitution.
• Adam Kokesh (http://www.kokeshforcongress.com) – The “winter soldier.”  Adam is a young candidate running for the House of Representatives in New Mexico.  After having served in the Iraq War and having woken up to the truth, Adam is now the founder of the Iraq Veterans Against the War (IVAW).  Adam is a revolutionary patriot and a very passionate and outspoken leader in the freedom movement.  If you have never heard him speak, check out this clip of his speech at the revolution march in DC: http://www.youtube.com/watch?v=PbOp_9VfR6o
• Rand Paul (https://www.randpaul2010.com/) – Son of Ron Paul and a doctor by trade (eye sergeon), Rand Paul is running as a Republican for Senate in Kentucky.  The apple hasn’t fallen far from the tree as Rand Paul is a great voice in the liberty movement just like his father.
• Peter Schiff (http://www.schiffforsenate.com/) – Ron Paul’s economic advisor for his 2008 presidential run and the CEO of Euro Pacific Capital, a brokerage company specializing in the investment in foreign stocks.  Schiff is still in the exploratory phase, but is considering running as a republican candidate for senate in Connecticut.  He is one of the few economic experts who predicted the current recession and has been writing books to warn people about how to preserve their wealth, such as Crash Proof and The Little Book of Bull Moves in a Bear Market.

There will be another nation wide Tea Party protest this coming weekend on Sat., July 4th.  For those in Santa Barbara, we are having events on Friday and Saturday.  Here are the details (from the website http://www.santabarbarateaparty.com/):

Santa Barbara Tea Party & Culpepper Society Presents

Independence Day Events
Two Days of Celebrating America’s 232nd Birthday

Friday, July 3 @ 7 PM
De la Guerra Plaza

Wild West Show & Freedom Rally Starring Buffalo Bill and Friends ~ On stage at De la Guerra Plaza, Hollywood actor Peter Sherayko headlines 4th of July Kick-Off Event as Buffalo Bill.  The show incorporates musical performances & retro Buffalo Bill acts and a non-partisan political rally. Appearances by “Calamity Jane,” “Annie Oakley,” Tax Pro Joe Armendariz, Ryan McNichols and others make the evening memorable.

Saturday, July 4 @ 11 AM
Assemble @ State @ Micheltorena Street

Buffalo Bill arrives on Horseback to lead SBTP & Culpepper Society Contingent in Santa Barbara’s 4th of July Parade. Our group is positioned at the end of the parade. Route begins at Sola and ends at Cota Street. Assembly is at Micheltorena Street @ State. Register for further information and updates if you are not already on our email list. Signs are permitted per our online Policy Statement and in respect for Spirit of ‘76, the parade host.

For people looking for more information on Tea Parties near you, check out the following website: http://www.teapartyrevolution.com/Default.aspx

Also, the following website can be of help: http://www.nationwidechicagoteaparty.com

“As there can be no causeless wealth, so there can be no causeless love or any sort of causeless emotion.  An emotion is a response to a fact of reality, an estimate dictated by your standards.  To love is to value.  The man who tells you that it is possible to value without values, to love those whom you appraise as worthless, is the man who tells you that it is possible to grow rich by consuming without producing and that paper money is as valuable as gold.

“Love is the expression of one’s values, the greatest reward you can earn for the moral qualities you have achieved in your character and person, the emotional price paid by one man for the joy he receives from the virtues of another.” – John Galt

Here’s another popular article on the failures of “fleecing the rich” via taxation thanks to the The Wall Street Journal: http://online.wsj.com/article/SB124329282377252471.html.

Thanks to America, people can vote with their feet and get out of oppressive states that threaten their livelihood. The rich aren’t stupid and know how to preserve their wealth, therefore when Maryland decided to increase the taxes on the highest earners in order to make up a budget shortfall, 1/3 of the millionaires left town and now the state is earning even less in tax revenue. Well done Maryland! A lesson learned from progressive taxation and class warfare.

Here’s the article for your convenience:

Maryland couldn’t balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O’Malley, a dedicated class warrior, declared that these richest 0.3% of filers were “willing and able to pay their fair share.” The Baltimore Sun predicted the rich would “grin and bear it.”

One year later, nobody’s grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller’s office concedes is a “substantial decline.” On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.

No doubt the majority of that loss in millionaire filings results from the recession. However, this is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions. For evidence, consult California, New York and New Jersey (see here).

The Maryland state revenue office says it’s “way too early” to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave. It’s easier than the redistributionists think. Christopher Summers, president of the Maryland Public Policy Institute, notes: “Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it’s easy for them to change their residency.”

All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O’Malley’s “fair share.”

This has been a popular article being sent around via email and other new media sources, so I figured I’d share it here as a lesson about taxation:
http://www.wisebread.com/bar-stool-economics-0

Here’s the text of the article for your convenience:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
“Since you are all such good customers”, he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his “fair share?”
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
“I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man, “but he got $10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!”
“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.