A Reader’s Guide to Bernanke’s Preemptive Attack (Bob Higgs)

Bob Higgs obliterates Ben Bernanke and his ridiculous Washington Post op-ed:

Ben Bernanke is taking no chances. With his confirmation hearing for continuation as chairman of the Federal Reserve System only days away, he has written an op-ed for publication in Sunday’s Washington Post. We may interpret this article as a preemptive attack on his congressional critics, some of whom will no doubt take the opportunity afforded by next Thursday’s hearing to attack his management of the Fed and, indeed, the Fed itself.

Monetary-policy propaganda is a high art, and lay readers of Bernanke’s article may well be taken in by its artful formulation. Therefore, as a public service, I offer the following brief commentary, interweaved with CNN’s Saturday report on Bernanke’s Sunday op-ed.

NEW YORK (CNNMoney.com) — Federal Reserve Chairman Ben Bernanke, just days ahead of his confirmation hearing, is warning Congress that actions limiting the central bank’s independence could prove detrimental to the causes of financial reform and economic recovery.

Such a warning seizes the high ground by creating the presumption that Bernanke and the present Fed have proved themselves to be beneficial to the causes of financial reform and economic recovery. In the circumstances, that’s a highly questionable presumption. Some of us are inclined to believe that, all in all, the Fed and its glorious leaders, especially Alan Greenspan and Ben Bernanke, got us into our present troubles in the first place and that they have done nothing wise of late to repair the damage they brought on us, acting instead to create enormous risks for our future well-being and, in particular, great risks for the future purchasing power of the U.S. dollar.

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Ron Paul: Healthcare Freedom or Healthcare Bureaucracy?

Dr. Paul's latest Texas Straight Talk:



The U.S. Preventive Task Force caused quite a stir recently when they revised their recommendations on the frequency and age for women to get mammograms. Many have speculated on the timing for this government-funded report, with the Senate vote on health care looming, and cost estimates being watched closely. Just the hint that the government would risk women’s health to cut costs is causing outrage on both sides of the aisle.

Even the administration is alarmed at its own panel’s recommendation. One official, the Secretary of Health and Human Services, Kathleen Sebelius told women to ignore the new guidelines, keep doing what they are doing and make the best decisions for themselves after consulting with their doctors.

This sounds like an excellent idea to me. As a physician myself, I understand the importance of ensuring that patients are able to consult their doctors and make their own decisions without interference from government bureaucrats or government-favored corporations.

However, I am confused by the administration’s reasoning and apparent change of heart. Have they reversed their position on healthcare reform and now decided that patients and doctors should be in control of individual healthcare decisions? Or are they still in the healthcare central planning business? The healthcare reform plans currently aim to empower Congress to dictate to insurers minimal standards of coverage. Those government standards will ultimately be determined by politicians and bureaucrats, not individual patients and doctors.

It is naive to think that recommendations by an authoritative government panel will never be used to deny services to people that want them. It is sad to think that people will be forced to spend their hard-earned money for a one-size fits all, government mandated healthcare delivery model, but then have to scrape together additional funds to pay out of pocket for healthcare they really want or need – that is, if the government allows them to at all. After all, the federal government currently forbids Medicare beneficiaries from spending their own money on services covered by Medicare, if for whatever reason they need to. Why wouldn’t the government eventually apply these kinds of restrictions to everyone, if they are successful with this takeover? Beware of the supposed gifts offered to you by government, for when it gives you things with one hand, the other hand takes away your liberty and independence.

It remains to be seen what provisions will be in the final bill. We do know we have no funds to pay for it except for debt and money printed out of thin air. We know that the nation’s creditors are getting very nervous about the government’s continuous spending sprees and bailouts. We know this healthcare bill, like all government programs, will be expensive.

There will be a day of reckoning when the credit stops and the bills for all this spending come due. When that day comes and politicians and bureaucrats have to deal with reality, it will be very uncomfortable to find yourself in their liability column, which is where healthcare reform will put many more Americans.

Wasted Time and Energy on Politics (B.R. Merrick)

B.R. Merrick argues that it's time to stop trying to make government "better":

Thus, the lesson: when you choose to be a critical part of a system that has become this corrupt . . . you will not ameliorate or "save" it. The system will necessarily and inevitably corrupt you. – Arthur Silber

I understand the arguments for getting involved politically. They are multitudinous. Some of them are almost entirely persuasive. (Think Ron Paul.) Some of them are downright frightening. (Think about the threat of communism.) Some of them I actually contribute money to. Not because I think they’ll get anywhere with actually changing the system, but because I hope that they might be able to use the funds to get more publicity, and perhaps get the government’s “private” media outlets to respond a little. Ron Paul did that. That’s good. Not great, but good. It was better than nothing. But in the end, belief in minarchism is nothing more than belief in the containable and non-threatening nature of a tiger cub. Small government conservatives and libertarians want a tiger cub. Well, who doesn’t? They’re cute. I would love to play with a tiger cub.

What minarchists don’t understand is that tiger cubs grow big, and grown tigers are never tame. You can’t domesticate a tiger like a house cat. You can always play with a grown house cat. For the five percent of the day that it’s awake. You cannot play with a tiger cub when it grows up. Tigers are wild and always will be. Government, because it is predicated on force and violence, will always be what it is: forceful and violent. Its fangs ain’t cute anymore.

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Ron Paul: Audit the Fed Attached as an Amendment

In his latest Texas Straight Talk, Dr. Paul celebrates a major victory in his quest to audit the Federal Reserve, but cautions that the bill the amendment is tied to is actually quite bad overall:



I was pleased last week when we won a vote in the Financial Services Committee to include language from the Audit the Fed bill HR1207 in the upcoming financial regulatory reform bill. As it stands now, if HR 3996 passes, because of this action, the Federal Reserve’s entire balance sheet will be opened up to a GAO audit. We will at last have a chance to find out what happened to the trillions of dollars the Fed has been giving out.

Finally, the blanket restrictions on GAO audits of the Fed that have existed since 1978 will be removed. All items on the Fed’s balance sheet will be auditable, including all credit facilities, all securities purchase programs, and all agreements with foreign central banks. To calm fears that we might be trying to substitute congressional action for Fed mischief in tinkering with monetary policy, we agreed to a 180 day lag time before details of the Fed’s market actions are released and included language to state explicitly that nothing in the amendment should be construed as interference in or dictation of monetary policy by Congress or the GAO. This left no reasonable objections standing and the amendment passed with a vote of 43 to 26.

This was a major triumph for transparency and accountability in government. With unprecedented turmoil in the financial markets, the people are demanding to know and understand the extent of the Federal Reserve’s involvement in the creation of out-of-control business cycles, who they are helping, and how. We need information. The excuses for not giving out this information are flimsy at best, and the passage of this amendment is a major step to finally getting at the truth.

Of course I could not have done this without the help and support of many other members who have been strong allies in this fight. Having over 300 cosponsors was obviously helpful.

However, as great as this victory is, we have to remember that this amendment is attached to a bill that would give sweeping new powers to the Federal Reserve. The Fed has taken its mandate to maintain stable prices and full employment and used its immense power to help elite friends at the great expense of everyone else. The answer is not to increase their powers and ability to interfere in the economy, but that is what the legislation will do. It is a disaster waiting to happen, and unfortunately it looks as if it will pass.

At least with the Audit the Fed amendment attached to the bill, the Fed will not be able to do its destructive work in secret. The people will know exactly who the beneficiaries are of this immoral system of money management.

Highlights of Ron Paul’s big day: Full Federal Reserve audit passes committee

Hooray! Ron Paul's original language of a full audit of the Federal Reserve, as written in H.R.1207, was inserted in a bill as a replacement amendment [PDF] during a markup of the House Financial Services Committee and passed a roll call vote! [PDF]

Marc over at the Liberty Maven was nice enough to provide a nice writeup of events and also recorded and edited several key sections of today's hearing, which he has posted here and is embedded below:



UPDATE: Here is Ron Paul's official press release on today's victory:

Paul-Grayson Amendment Passes Committee
Washington, D.C. - Congressman Ron Paul (TX-14) is pleased to announce that his and Congressman Grayson’s amendment based on HR 1207 has passed in the Financial Services Committee by a vote of 43-26 and will be included in major banking reform legislation.

The Paul/Grayson amendment:

• Removes the blanket restrictions on GAO audits of the Fed
  
• Allows audit of every item on the Fed's balance sheet, all credit facilities, all securities purchase programs, etc.
  
• Retains limited audit exemption on unreleased transcripts and minutes
  
• Sets 180-day time lag before details of Fed's market actions may be released
  
• States that nothing in the amendment shall be construed as interference in or dictation of monetary policy by Congress or the GAO

“While HR 3996, if passed, will grant sweeping new powers to the Federal Reserve, at least with this amendment attached, it won’t be acting in secret anymore. This is a major victory for Federal Reserve transparency and government accountability. I am very grateful to Congressman Bachus and all the other Members who were so supportive and helpful in this effort," stated Congressman Paul.

Handouts (Jim Davies)

Should those of us who oppose the state accept their handouts? Jim Davies makes a compelling case that we should and not lose sleep over it:

One of the debates among liberty seekers is about the extent to which it's morally right to accept or reject government handouts. In my opinion, it's one of a rather small number of issues still open to valid debate, and for sure there are good, sincere people on both sides of it and I respect all of them. Although these remarks come down clearly on one side, that respect remains very much intact, for over some years my own mind has changed quite a lot. I've no wish to try to hurry anyone to change his without careful thought.

On the other hand, if anyone reading this is still wondering about the question, perhaps it will help him decide. Perhaps it will even stimulate other writers to enliven the debate by offering an opposing view.

I've seen nobody put the "reject them" viewpoint more eloquently than Carl Watner, and warmly recommend a read of his masterly book I Must Speak Out before coming down on either side of the debate. I can't do that viewpoint justice with words of my own, so do be sure to read it; his reasoning centers on the fact that before government can provide any benefit of any kind to any person, it must first steal at gunpoint from someone else the resources required, and so to accept the handout is to be complicit in that aggression. I cannot deny any of that; he's correct, and that's why there's an ethical debate. Even so, I now take the opposite view, and here present six reasons:

(1) To reject all government goodies is literally impossible; (2) to do so even partially is enormously costly; (3) it is wholly irrelevant to our main objective (to rid humanity of the monstrous scourge of government, which puts us in this moral dilemma in the first place); (4) it leaves money in the hands of a gang of thugs who will certainly use it to do harm; (5) it throws away a chance to recover stolen property; and (6) it allows government supporters to escape the consequences of their malfeasance.

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Roger Young's Images and Quotes of the Week

Once again, Roger Young has published excellent editions of his Image Review of the Week and Quotes of the Week. I highly encourage everyone to follow or subscribe to Roger's excellent blog!

Ron Paul: Competition With the Government?

Dr. Paul's latest Texas Straight Talk:



Last Saturday many concerned Americans watched in horror as the House passed the healthcare reform bill. If this bill makes it through the Senate, it would massively overhaul the way healthcare is delivered in this country. Today, obviously, we don’t have a perfect system, but this legislation takes all the mistakes we are making with healthcare and makes them worse. Most of what is wrong with healthcare stems from decades of government intervention and the resulting unintended consequences.

But the government’s prescription for the ills caused by intervention is always more intervention. We see this not only in healthcare policy, but also in foreign policy, in economic policy, and in monetary policy - basically, in all areas of public policy. It was even claimed that the House bill would increase competition in healthcare, and thereby improve the private sector’s business model for insurance.

It is fascinating that politicians would use the language of the free market in this way to justify more corporatism. This demonstrates a couple of things. One, that politicians truly do not understand the very basic tenets of a free market. By definition, a free market is free from government intervention. But once a little intervention is accepted as legitimate, politicians will blame the problems created by their intervention on the free market and present themselves as saviors that must intervene even more.

It also demonstrates that politicians know that Americans still believe the free market is a good thing. People know and understand that competition among businesses is better for the consumer than a monopoly. However, competition between a private business and a government or government-favored entity is not real competition.

In real competition, your competitor can go bankrupt if they do a bad job. Everyone knows a government program is forever, no matter how poorly it performs. In real competition, efficiency is necessary for survival. In government programs, waste is rewarded as budgets are often determined by how much money a department is able to consume in a year. In real competition, one business does not have regulatory or taxation authority over its competitors. In real competition, businesses get sued and punished for breaking contracts and defrauding people, and are kept accountable in this way. But just try to sue the government when you are unjustly harmed by it!

The reason real competition is a good thing is because good businesses get bad ones out of the consumer’s way. Can the government put someone out of business? Most certainly! But it will have the opposite effect: an otherwise good business will be replaced by a poorly performing government agency, or a government-favored monolithic business that behaves almost like a government agency.

If Washington really wanted to give consumers more choices they would remove legislative and regulatory barriers to competition across state lines for health insurers. They would remove barriers for new and innovative models of healthcare and tort reform. They wouldn’t have run so many church and charitable hospitals out of business. Washington is keenly interested in healthcare reform, but it is certainly not going to increase competition or to expand your options for healthcare.

The Income Tax: Bearing False Witness (Bill Butler)

Bill Butler, in the spirit of Irwin Schiff (father of Peter Schiff) and Larken Rose, attacks the legality of the "voluntary" income tax:

Ever wonder how politicians like Harry Reid can say, with a straight face, that the United States income tax is a “voluntary” tax? Here is a video of Mr. Reid explaining how the US tax system is voluntary. Mr. Reid is no dummy. He knows what he is talking about. He is speaking the truth. He is just not telling the whole truth. The whole truth, which Mr. Reid will not share with us plebes, is there that the US income tax system is a voluntary system, but it begins with employers “voluntarily,” under the threat of draconian federal fines and imprisonment, saying false things about their employees. If you are an employer and refuse to lie about your employee to the IRS , you could be imprisoned. That is how voluntary it is.

To truly understand Mr. Reid’s voluntary system, it is important to first recognize that the Internal Revenue Code is a statute. Statutes are positive, man-made, law. In evaluating the rights and obligations of individuals under positive, man-made statutes, words and definitions are vitally important.

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Happy Armistice Day

Thanks to Butler Schaffer for this reminder on the true significance of November 11th:

It’s time for my annual reminder about the significance of November 11th. In my youth, it was known as “Armistice Day,” and I remember asking my teacher what that was all about. She told me it was a holiday to celebrate the date that ended World War I. It was, in other words, a celebration of the end of war (do you remember it was a “war to end all wars”?) A few years later – during the same period in which the more honestly-named “War Department” was retitled “Defense Department,” Armistice Day, itself, was transformed into a day to celebrate war veterans and, hence, war itself. Who knows, with war and entertainment having merged to keep Boobus waving his flags of support and sending his children to the slaughter, we may soon see the day renamed the “John Wayne Film Festival Day,” with classes dismissed to allow the youngsters to stay home and view Wayne’s bravery in fighting the battle to protect the back-lot of Republic Pictures!

His Holiness the President (Lew Rockwell)

Lew Rockwell blogs on the idiotic notion that the president is somehow our Healer-in-Chief:

The Roman empire, with a ruler who was also the chief priest of the state religion, and a semi-god himself, had nothing on the American empire. Catch this widely reprinted piece: “Only a president can offer the condolences of a nation. In a moment of crisis and sorrow and anger, only a president can soothe raw emotions, allay fears, elevate a senseless act into a call to action, and offer the assurance that — as his aides put it Monday — no stone will be left unturned. This is by far the biggest test of Obama’s ability to fulfill the role of consoler in chief.”

Of course, government employees have a far higher status than taxpayers, let alone ragheads, so the shooting of soldiers, allegedly by a federal shrink, is “the worst single tragedy on his watch.” Not his bombing of Afghan civilians, nor his ethnically cleansing parts of Pakistan, nor his occupying Iraq, nor his incessant predator droning. For this worst tragedy of his reign, only the president can stand “before a sea of grieving Americans, acknowledging communal pain,” and heal us. And get us ready for the action we’re always called to: kill more gooks.

UPDATE from Mike Knox:

Notice in the article you linked to that the only tragedies that are mentioned are military related. No mention of the tragic deaths caused by natural disasters, transportation accidents, etc. The only really tragic deaths are when some government employee dies in a manner that was not intended. If they die in action they “made the ultimate sacrifice”. If they die at the hands of a deranged brother in arms it’s tragic. Church this Sunday seemed like any other Sunday until they started the military worship for the Ft. Hood incident/Veterans Day. It really saddens me to see how we as Christians claim to follow the Prince of Peace and then preach death and hellfire to all enemies (enemies of the US, that is). We don’t care about Mexico’s enemies, or Poland’s enemies, or anyone else’s. I’m not a Catholic but I have to tell you that Father Emmanuel McCarthy’s lectures and essays have taught me more about what being a Christian means than the 41 years of Baptist teaching I have received. Thanks for all you do. LRC has made a difference in this world.

Ron Paul Opposes National School Psychology Week

SPEECH OF
HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
FRIDAY, NOVEMBER 6, 2009
Mr. Speaker, I voted against H. Res. 700, designating the week of November 9 as National School Psychology Week to draw attention to the threat to liberty posed by proposals that school physiologists perform mandatory mental evaluations of all school children without parental consent.

The New Freedom Commission on Mental Health has recommended that the federal and state governments work toward the implementation of a comprehensive system of mental-health screening for all Americans. The commission recommends that universal or mandatory mental-health screening first be implemented in public schools as a prelude to expanding it to the general public. However, neither the commission's report nor any related mental-health screening proposal requires parental consent before a child is subjected to mental-health screening. Federally funded universal or mandatory mental-health screening in schools without parental consent could lead to labeling more children as "ADD" or "hyperactive" and thus force more children to take psychotropic drugs, such as Ritalin, against their parents' wishes.

Too many children are suffering from being prescribed psychotropic drugs for nothing more than children's typical rambunctious behavior. According to Medco Health Solutions, more than 2.2 million children are receiving more than one psychotropic drug at one time. In fact, according to Medico Trends, in 2003, total spending on psychiatric drugs for children exceeded spending on antibiotics or asthma medication.

Many children have suffered harmful side effects from using psychotropic drugs. Some of the possible side effects include mania, violence, dependence, and weight gain. Yet, parents are already being threatened with child abuse charges if they resist efforts to drug their children. Imagine how much easier it will be to drug children against their parents' wishes if a federally funded mental-health screener makes the recommendation.

Universal or mandatory mental-health screening could also provide a justification for stigmatizing children from families that support traditional values. Even the authors of mental-health diagnosis manuals admit that mental-health diagnoses are subjective and based on social constructions. Therefore, it is all too easy for a psychiatrist to label a person's disagreement with the psychiatrist's political beliefs a mental disorder. For example, a federally funded school violence prevention program lists "intolerance" as a mental problem that may lead to school violence. Because "intolerance" is often a code word for believing in traditional values, children who share their parents' values could be labeled as having mental problems and a risk of causing violence. If the mandatory mental-health screening program applies to adults, everyone who believes in traditional values could have his or her beliefs stigmatized as a sign of a mental disorder. Taxpayer dollars should not support programs that may label those who adhere to traditional values as having a "mental disorder."

In order to protect our nation's children from mandatory mental health screening, I have introduced introduce the Parental Consent Act (H.R. 2218). This bill forbids Federal funds from being used for any universal or mandatory mental-health screening of students without the express, written, voluntary, informed consent of their parents or legal guardians. This bill protects the fundamental right of parents to direct and control the upbringing and education of their children. I hope all my colleagues will cosponser H.R. 2218.

November 9, 2009: 20th Anniversary of the Fall of the Berlin Wall

In honor of the 20th anniversary of the fall of the Berlin Wall, I'm posting a video of my favorite song that commemorates the event, Wind of Change by the Scorpions:

Ron Paul: Healthcare Reform is Economic Malpractice

Dr. Paul's latest Texas Straight Talk:



As Washington continues debating healthcare reform the rest of the country is primarily concerned about jobs and the economy. It is still uncertain what policies will be implemented, but I am certain about one thing: It will only further devastate our economy and our dollar.

The leadership has come up with a proposal they are confident will be what they consider fiscally responsible, only to have it scored as nearly twice as expensive by the nonpartisan Congressional Budget Office. Estimates of past healthcare spending programs have been off by as much as 100 percent so there is no telling what the actual cost will be.

The past century should have taught us one thing: that government intervention is expensive. Government programs lend themselves so easily to waste, fraud and abuse. Combine that with overall inefficiency and it all adds up to a hefty price tag for the taxpayer, with not much leftover for actual services. An outright takeover of an entire sector of the economy, especially one as important as healthcare, is something that we just cannot afford for the government to do right now. Not to mention the fact that it is completely unconstitutional. But Washington insists on torturing the numbers and tinkering around the edges rather than facing this truth.

If healthcare reform does indeed pass, we should not be under the illusion that it will be free. The money to pay for it will have to come from somewhere. They say they will get the money from cutting waste, fraud and abuse, but all of that is seemingly intrinsic to government programs. Since they want to expand the government’s reach we have to assume we will be trading waste, fraud and abuse for waste, fraud and abuse with a bigger budget. The powers that be have insisted the money won’t come from higher taxes, it won’t come from rationing of care, and it won’t come from higher premiums. This can only then put more pressure on the Fed to print the money out of thin air. We already have a weakening dollar. They are accelerating everything that weakened it in the past. Adding this new, monumental pressure could very well be the straw that will break the dollar’s back.

Foreign creditors are already nervous about continuing to invest in the US because of our skyrocketing debt. The explosion of debt that is certain to accompany the enactment of this national health care bill can only add to that nervousness.

Ironically, enactment of the health care bill could help the cause of liberty by hastening the day when Congress is forced by economic circumstances to stop increasing the welfare-warfare state and return to the Constitution.

There are many problems with our current healthcare system, to be sure. There are many tragic stories to be told. However, we need to look at the root of our problems in order to address them properly. More government intervention and bureaucracy injected into healthcare will take a flawed system and make immeasurably worse.

Ron and Rand Paul with Judge Napolitano

Ron and Rand Paul talk about the possibility of a rising third party movement:



Also see Mike German of the ACLU talk about the 2003 CIA kidnapping of a cleric in Italy:



And thanks to Dolphin Films for the segment with Peter Schiff and John Stossel:

A Gun-Free Zone at Ft. Hood (Jacob Hornberger)

Jacob Hornberger makes some common sense observations in the aftermath of the Ft. Hood massacre:

With the massacre at Ft. Hood, we once again see the consequences of gun control.

Remember what the gun controllers say: that once gun control is imposed, would-be murderers will obey the gun-control law by resorting to some other form of murder. At least the killers won’t use a gun, the gun-controllers exclaim, because gun possession is now against the law.

Yet, once again that reasoning hasn’t panned out at Ft. Hood, any more than it panned out at Virginia Tech, Columbine High School, Luby’s Cafeteria in Killeen, Texas, or, for that matter, on the streets of Washington, D.C., the gun-control, murder capital of America.

As libertarians have pointed out, time and time again, would-be murderers don’t give a hoot for gun-control laws. At the risk of belaboring the obvious, if would-be murderers are willing to violate laws against murder, it is certain that they will have no reservations about violating gun-control laws.

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Ron Paul at Financial Services hearing

Ron Paul at Financial Services Committee markup of "Investor Protection Act of 2009 (to be reported as H.R. 3817)":

Can the Rampaging Leviathan Be Stopped or Slowed? (Bob Higgs)

Robert Higgs writes a terrific article on why educating the youth about liberty is ultimately the only way freedom will come about in this country, as they pick up the pieces when the increasingly bloated Leviathan finally implodes:

In a recent commentary titled “Diagnostics and Therapeutics in Political Economy,” I endeavored to show that an analytical understanding of past growth in the government’s size, scope, and power does not permit us to prescribe effective means of stopping or slowing this growth, particularly any simple “silver bullet” remedy, and I specifically disclaimed any personal knowledge of “what is to be done” toward this end. Responses to this commentary, some of them from keenly intelligent friends of mine who insist that diagnostics and therapeutics must be firmly linked, lead me to believe that I did not make myself sufficiently clear.

One respondent wrote, “Higgs must be speaking with tongue in cheek, for a man of his intellect simply must have a few solutions at least.” Well, yes, on one level, I have many “solutions” to propose. The problem comes when we ponder why I’ve just put quotation marks around the word solutions. The reason pertains to the links that connect my understanding of why government has grown with measures that might be taken to stop or slow its ongoing growth.

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Whoops!

Ron Paul: Government Statistics and Lies

Dr. Paul's latest Texas Straight Talk:



There has been a lot of talk in Washington recently about senior citizens, mostly about how various healthcare reform models would help or hurt them. But there is another critical issue that has quietly devastated seniors financially over the last few decades. It concerns how the cost of living is calculated. How does the administration justify not giving a cost of living increase to Social Security recipients this year?

According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased – by roughly 5 percent!

The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians’ discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.

For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.

I have introduced legislation to keep politicians in Washington from ever raiding the Social Security trust fund again. HR 219 The Social Security Preservation Act would assure that all monies collected by the Social Security Trust Fund would only be used in payments to beneficiaries, or be placed in interest bearing certificates of deposit. This would at least stop the bleeding of the fund, and take away some incentive to tease and torture the numbers in order to give seniors the minimal amount. This would also cut off a source of funding for government growth, so it is not likely to get easy support from many politicians.

It is bad enough that Washington imposes high payroll taxes on American workers. The least Congress could do is use the tax dollars for their stated purpose. Instead, seniors will have a harder and harder time trying to survive on a fixed income in an economy based on variables and deception. For them, it is too late to start over. Today’s young people will be forced to pay into the system for years to come. The first step towards solving the impending crisis facing Social Security is to stop politicians from raiding the trust fund and to significantly cut federal government spending.