Monday, March 30, 2009

Obama to get lean and mean

President Obama stated that the auto industry needs to get lean and mean to compete. The head of GM resigned and President Obama with no experience in the automotive industry, no idea about energy, manufacturing or a lot of other things is going to choose someone to the position.

The part I liked was to get lean and mean. I like that. We could certainly use some of that leadership now from the Executive office. Get lean by not allowing bills with pork to come for his signature and to be mean by using the veto to enforce the leanness.

The problem with the auto industry is it has become fat, dumb and happy. Workers demanded insurance benefits, retirement benefits, more vacation, job security and more. The result of these contracts was passed along to the consumer who was free to just say no by buying another makers automobile. The result is a declining market share, higher prices and sky rocketing contract costs, mostly retiree. Does this sound familiar? Medicare and Social Security have the same built in “contract costs” though we call them promised benefits. Congress has promised benefits far in excess of what any workers contributions could have provided.

Congress like Bernie Madof took not $65 billion from contributors, but $10.071 Trillion from workers paychecks, paid $9.215 Trillion in benefits, setting aside $856.068 Billion for these workers future. Divided among 160 million contributor’s amounts to $5,350 each. The difference is that in the case of the Madof Ponzi scheme just over $1 Billion of the $65 Billion has been recovered or 1.54%. For Social Security Ponzi scheme the recoverable amount is 8.5%. However, if we wait much longer, the amount will be zero unless our elected representatives vote to raise taxes and expand the Social Security Ponzi scheme.




The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks he's a fool and laughs and dances and plays the summer away.

Come winter, the ant is warm and well fed. The grasshopper has no food or shelter so he dies out in the cold.




Unknown Author

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks he is a fool and laughs and dances and plays the summer away.

Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving. CBS, NBC and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. "America" is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?

Kermit the Frog appears on Oprah with the grasshopper, and everybody cries when they sing "It's Not Easy Being Green." Bill and Hillary Clinton make a special guest appearance on the CBS Evening News to tell a concerned Dan Rather that they will do everything they can for the grasshopper who has been denied the prosperity he deserves by those who benefitted unfairly during the Reagan summers, or as Bill refers to it: "Temperatures of the 80's."

Jesse Jackson stages a demonstration in front of the ant's house where the news stations film the group singing "We shall overcome". Jesse then has the group kneel down to pray to God for the grasshopper's sake.

Al Gore exclaims in an interview with Peter Jennings that the ant has gotten rich off the back of the grasshopper, and calls for an immediate tax hike on the ant to make him pay his "fair share".

Finally, the EEOC drafts the "Economic Equity and Anti-Ant Act", retroactive to the beginning of the summer. The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government.

Hillary gets her old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of federal judges that Bill appointed from a list of single-parent welfare recipients who can only hear cases on Thursdays between 1:30 and 3:00 PM when there are no talk shows scheduled. The ant loses the case.

The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he is in (which just happens to be the ant's old house) crumbles around him since he doesn't maintain it.

The ant has disappeared in the snow. And on the TV, which the grasshopper bought by selling most of the ant's food, they are showing Bill Clinton standing before a wildly applauding group of Democrats announcing that a new era of "fairness" has dawned in America.

The grasshopper is subsequently found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.

Its time for a change. November is coming.

The Price of Free Corn

The Price of Free Corn


Frank Redmond

Fredericksburg, VA

(The Wild and Free Pigs of the Okefenokee Swamp)

Some years ago, about 1900, an old trapper from North Dakota hitched up some horses to his Studebaker wagon, packed a few possessions -- especially his traps -- and drove south. Several weeks later he stopped in a small town just north of the Okefenokee Swamp in Georgia.

It was a Saturday morning -- a lazy day -- when he walked into the general store. Sitting around the pot-bellied stove were seven or eight of the town's local citizens.

The traveler spoke. "Gentlemen, could you direct me to the Okefenokee Swamp?"

Some of the old-timer looked at him like he was crazy. "You must be a stranger in these parts," they said.

"I am. I'm from North Dakota," said the stranger. "In the Okefenokee Swamp are thousands of wild hogs." one old man explained. "A man who goes into the swamp by himself asks to die!" He lifted up his leg. "I lost half my leg here, to the pigs of the swamp."

Another old fellow said, "Look at the cuts on me; look at my arm bit off! Those pigs have been free since the Revolution, eating snakes and rooting out roots and fending for themselves for over a hundred years. They're wild and they're dangerous. You can't trap them. No man dare go into the swamp by himself." Every man nodded his head in agreement.

The old trapper said, "Thank you so much for the warning. Now could you direct me to the swamp?" They said, "Well, yeah, it's due south -- straight down the road." But they begged the stranger not to go, because they knew he'd meet a terrible fate.

He said, "Sell me ten sacks of corn, and help me load it in the wagon."And they did. Then the old trapper bid them farewell and drove on down the road. The townsfolk thought they'd never see him again. Two weeks later the man came back. He pulled up to the general store, got down off the wagon, walked in and bought ten more sacks of corn. After loading it up he went back down the road toward the swamp.

Two weeks later he returned and again bought ten sacks of corn. This went on for a month. And then two months, and three. Every week or two the old trapper would come into town on a Saturday morning, load up ten sacks of corn, and drive off south into the swamp.

The stranger soon became a legend in the little village and the subject of much speculation. People wondered what kind of devil had possessed this man, that he could go into the Okefenokee by himself and not be consumed by the wild and free hogs.

One morning the man came into town as usual. Everyone thought he wanted more corn. He got off the wagon and went into the store where the usual group of men were gathered around the stove. He took off his gloves.

"Gentlemen," he said, "I need to hire about ten or fifteen wagons. I need twenty or thirty men. I have six thousand hogs out in the swamp, penned up, and they're all hungry. I've got to get them to market right away."

"You've WHAT in the swamp?" asked the storekeeper, incredulously. "I have six thousand hogs penned up. They haven't eaten for two or three days, and they'll starve if I don't get back there to feed and take care of them."

One of the old-timer said, "You mean you've captured the wild hogs of the Okefenokee?"

"That's right."

"How did you do that? What did you do?" the men urged, breathlessly.

One of them exclaimed, "But I lost my arm!"

"I lost my brother!" cried another.

"I lost my leg to those wild boars!" chimed a third.

The trapper said, "Well, the first week I went in there they were wild all right. They hid in the undergrowth and wouldn't come out. I dared not get off the wagon. So I spread corn along behind the wagon. Every day I'd spread a sack of corn. The old pigs would have nothing to do with it."

"But the younger pigs decided that it was easier to eat free corn than it was to root out roots and catch snakes. So the very young began to eat the corn first. I did this every day. Pretty soon, even the old pigs decided that it was easier to eat free corn. After all, they were all free; they were not penned up. They could run off in any direction they wanted at any time."

"The next thing was to get them used to eating in the same place all the time. So I selected a clearing, and I started putting the corn in the clearing. At first they wouldn't come to the clearing. It was too far. It was too open. It was a nuisance to them."

"But the very young decided that it was easier to take the corn in the clearing than it was to root out roots and catch their own snakes. And not long thereafter, the older pigs also decided that it was easier to come to the clearing every day."

"And so the pigs learned to come to the clearing every day to get their free corn. They could still subsidize their diet with roots and snakes and whatever else they wanted. After all, they were all free. They could run in any direction at any time. There were no bounds upon them."

"The next step was to get them used to fence posts. So I put fence posts all the way around the clearing. I put them in the underbrush so that they wouldn't get suspicious or upset. After all, they were just sticks sticking up out of the ground, like the trees and the brush. The corn was there every day. It was easy to walk in between the posts, get the corn, and walk back out."

"This went on for a week or two. Shortly they became very used to walking into the clearing, getting the free corn, and walking back out through the fence posts."

"The next step was to put one rail down at the bottom. I also left a few openings, so that the older, fatter pigs could walk through the openings and the younger pigs could easily jump over just one rail. After all, it was no real threat to their freedom or independence. They could always jump over the rail and flee in any direction at any time."

"Now I decided that I wouldn't feed them every day. I began to feed them every other day. On the days I didn't feed them the pigs still gathered in the clearing. They squealed, and they grunted, and they begged and pleaded with me to feed them. But I only fed them every other day. And I put a second rail around the posts."

"Now the pigs became more and more desperate for food. Because now they were no longer used to going out and digging their own roots and finding their own food. They now needed me. They needed my corn every other day. So I trained them that I would feed them every day if they came in through a gate. And I put up a third rail around the fence. But it was still no great threat to their freedom, because there were several gates and they could run in and out at will." "Finally I put up the fourth rail. Then I closed all the gates but one, and I fed them very, very well. Yesterday I closed the last gate. And today I need you to help me take these pigs to market."

-- end of story --

The price of free corn The allegory of the pigs has a serious moral lesson. This story is about federal money being used to bait, trap and enslave a once free and independent people.

Federal welfare, in its myriad forms, has reduced not only individuals to a state of dependency. State and local governments are also on the fast track to elimination, due to their functions being subverted by the command and control structures of federal "revenue sharing" programs. Please copy this flyer and send it to all your state and local elected leaders and other concerned citizens. Tell them: "Just say NO to federal corn."

The bacon you save may be your own.

Thursday, March 26, 2009

Why are we in an economic mess

In 1984 I wrote a computer program to project SS-OASI cash flow. In 1984 I projected November 2037 would be the year SS would have problems paying 100% of promised benefits under current law. The SSA projected 2064. Over the years it has moved to January 2038. I predicted that SS-OASI would be the cause of a dramatic down turn in our economy because it robbed workers of the ability to save while promising them a benefit that could not be paid without extracting an ever higher cost from future workers. The Social Security program has stimulated our economy beyond our ability to maintain it. SS took 10.6% of wages that should have been set aside for future workers benefits and paid them to current beneficiaries. This is no different than what Bernie Maddof did. He took new investors money to pay older investors returns that far greater than could be generated. In fact Bernie never made a single investment. In many ways it is just like SS. SS has spent 95% of every penny paid into SS-OASI on benefits leaving just a tiny fraction, 5% to be set aside.

Now with the economy is in the pits, President Obama is signing trillions of dollars of stimulus adding to the national debt, where do we stand? We have a Social Security problem that is far greater than the economic problem we have now and no one is looking at it thinking it is far off. Social Security needs over $19 trillion today earning 5.5% to pay full benefits to all without anymore fixes. Anything less means that some future generation will be having to bailout out SS-OASI one more time with either benefit cuts or higher taxes.

Let me present a hypothetical scenario. Had Social Security never been passed, what would our economy be like today? I know that the boomers would have never paid $5 Trillion in SS-OASI taxes. They would have most likely saved it just as their parents saved. Saving could have been in the form of house. Applying the 10.6% to a mortgage reduces the term from 30 years to 14 years 4 months. The interest saved would have been staggering. This would have grown to $14 Trillion over the same period of time. Would boomers be looking at reduced Social Security benefits, no, just the opposite. They would be relying on their own savings that would pay twice what SS-OASI has promised.

The Earned Income Tax Credit for low wage earners would never have been passed saving over $1 trillion in federal expenditures. Families would have been able to save, send their children to college reducing the need for government involvement saving nearly $1 trillion in expenditures. People would not have turned to credit card debt or home equity loans. This would have reduced private debt. Families would have had greater take home pay allowing them to save and buy homes using sound financing. This would have most likely eliminated the need for the government "artificial stimulating" the housing market. In other words, the economic mess we are in now would not have occurred and the Social Security unfunded liability would never have happened.

We have let our elected representatives dictate how we spend and save. Our government is to last far into the future. An individual has a limited time on this earth. Their ability to accrue debt ends with their passing. However, our government has the ability to saddle future generations with astronomical debt. We need to clean house now! Please participate in the Tax protest downtown April 18 from 11 am to 1 pm.

Social Security - I wish I had been wrong.

Today marks an important day for those who have faith in Social Security. The trustees announced that the social security surplus may be gone this year instead of in 2017. The increase in unemployment has greatly reduced payroll tax revenues while the high inflation of 2008 increased current benefits by 5.8% and the reduced rate paid on US Treasuries has decimated the income from the Social Security Old Age (SS-OASI) trust fund.

The Social Security Administration’s spoke person put a spin on a negative day by say the trust fund balance is quite large and is able to pay benefits for decades to come. Is this two decades which is just 20 years and then the trust fund is gone or is it three decades or thirty years and the and the trust fund is gone.

I presented this before and I will attempt again to in another way. A 20 year old has 47 years to save for retirement which is equal to age 67 or full retirement age under Social Security. A person making $30,000 a year can expect to receive $12,600 a year in Social Security OASI benefits at age 67. Based on 6% return, 3.5% wage growth, 3% inflation and living to age 90, this worker would need to save 8.2% of their pay each year to duplicate SS. If they were to wait till age 30, they would need to save 11.9%, at age 40 they need to save 18.7%, at age 50 they need to save 33.85 and at age 60 they need to save 93% of their wage each year.

It is quite obvious the longer you wait to save, the greater the percent you need to save. I do not think anyone finds this to be new information. Under the 2008 SSA trustee report, SS-OASI would be able to pay full benefits till 2041. This is 32 years away. This means a person who is now 35 will reach age 67 when SS-OASI has trust fund is exhausted. Therefore, we as a nation have 32 years to fix Social Security or some might say save it. In simple terms, this is no different than a person who is now 35 and has not begun saving for retirement. This means they would have to save 14.8% of yearly wages to duplicate SS-OASI at age 67. However, there is a problem with this method of thinking. It assumes there are no workers older than age 35. A 36 year old will collect one year’s benefits before the trust fund is exhausted. This means the 36 year old needs to save 15.4% to duplicate SS-OASI benefit.

What we have ore 47 cohorts working paying SS-OASI taxes, but very little of it will be used to pay them benefits because this year the payroll taxes paid will be insufficient to pay the SS-OASI benefits. So what is the average age of these 47 cohorts? The average age of the cohorts subtracted from age 67 (full retirement age) provides us with a good approximation of how many years WE collectively have to save social security. There are a total of 4,687,715,596 man-years for the ages 20 through 67. This group numbers 191,101,992 individuals. This means the average man-years to save is 24.5 years. However, we have a problem. This assumes those under the age of 35 have more the 32 years to save when in fact we as a nation have 32 years. This means the weighted average man-years to save is 21.9 years. But wait, we still have another problem. The trust fund only has enough funds to pay four years worth of benefits. Another way to say it is the SS-OASI trust fund can pay full benefits to all age 83 and over. This means we need to add in the average weighted man-years to save for those currently 67 to 83. Because this group is not paying payroll taxes, their weighted average man-years to save will be negative. The weighted average of years to save for those over age 67 is -10.8 years.

When combined, we as a country have less than 11.1 years to solve the social security mess. To put it in terms of an individual, it is no different than a person who is 55.9 years old who has saved nothing for retirement and is now attempting to duplicate the SS benefit. The payroll tax to do this is 55.8%.

So when people say they are in favor of saving social security, do they actually comprehend the magnitude of the problem? Sure 32 years sound pretty far away, but I ask you to think about it in terms of an individual who has not saved and is now 56 years old. Can you set aside 55.8% of your wages each year for 11.1 years? If not, then it is time to seriously rethink saving social security.

Monday, March 23, 2009

Artificial Stimulants

Stimulant - is something that produces a temporary change. Without the stimulant, the change that was induced lessens and becomes that which it was prior to the stimulant.

Stimulants are like drugs. They may make people feel good for a while by fooling you into thinking everything is fine and dandy. They can even hide the root cause allowing the problem to get worse.

Congress is now looking at a proposal to provide tax credit to people who scrap a car that is eight years or more. The idea is to remove inefficient cars from the road and stimulate the automotive industry. Is this a sound concept?

When a person buys a car, they are making a decision to do so based on what? If it were better gas mileage then why do people buy hummers and SUV's? Clearly better mileage is not the main reason so this basis is wrong.

Is it based on the smell of a new car? If this were the only case, then I think there would be a lot fewer new cars sold.

Is it based on maintenance costs getting out of hand? I think this is a good reason. My car has over 200,000 miles and is beginning to have maintenance headaches. Fuel pump went out. I now need to replace a leaking intake manifold gasket. What is next? I have new tires and life time brakes which are a plus. So how much am I willing to spend to fix a gasket vs. buy a new car? No brainer here. I fix the gasket and get another 150,000 to 200,000 miles for 5% of a new car price.

This brings me to my point. When new cars age, they start needing work. Repair shops hire people to do the repairs. Salvage yards sell used parts cheaply to do-it-yourself mechanics. Spare part dealers sell new parts as well. All these small companies make money when the age of a car increases. If we were to provide an artificial stimulus to scrap cars, these employers would hire fewer people.

It is not the purpose of government to artificially stimulate the economy. It is far better to have millions of people making their own decisions. Some people will make the wrong decision and will learn. However, the majority will do what is best for them by either fixing a used car or buying a new one. All you need to do is look at the recent bailout with no strings attached. What special insight do politicians have that you or I do not? None, you and I for the most part know the value of a dollar, do they?

Obama's plan will double the national debt.

President Obama is really pretty ignorant about the economy. The deficit for 2008 was $1,017,071,524,650

Deficit since October 1, 2008 till March 23, 2009 was $1,027,338,381,750. Sure Obama has inherited a pretty nasty economy, but his deficit is going to hit well over $2.5 Trillion in his first year. I have even read that he believes the deficit totals over ten years will be $11 Trillion! Ok, that sounds pretty bad. A doubling of the national debt. Guess what it is just plain ruinous.

I even read that our elected representatives or their appointed puppets are talking about a sustainable debt levels again. They are saying that we could sustain 4% deficits, but 5% cannot work. These wackos think that with a GDP of $13 Trillion, we can sustain continued deficits of $520 billion a year. What are these idiots drinking.

A few years ago I put together a paper showing why any continued deficit is bad.

For years politicians have measured deficit spending as a percent of Gross Domestic Product (GDP). GDP is the sum total of all goods and services produced in the United States. In 2002 the GDP was around $10 Trillion with federal budget revenues of $1.9 Trillion or about 19% of GDP. This 19% includes FICA taxes collected from both Employee and Employer. FICA taxes by law cannot be used for any purpose other than to pay for the Social Security and Medicare programs. FICA taxes are loaned to the US Treasury and in return are paid interest. The Medicare and Social Security programs are about 35% of total federal spending. In addition the Medicare and Social Security programs by law cannot borrow money.

Many have stated running 1.5 to 2% deficits are manageable. Is this true? Would your family budget survive having to borrow 1.5% of your income yearly? It is relatively simple for the layperson to check if this is a correct statement. A spreadsheet is ideal for this calculation. What we want to do is look at the long term trend.

Separating out FICA revenues from federal revenues produces what I call General Revenues which are about 12% of GDP. Since Social Security and Medicare cannot borrow money, the deficit is attributed to General Revenues. The purpose of showing both is to highlight the dramatic difference between them. Politicians are misleading the American people by resorting to using Enron style accounting.

It does not mater if you do not use actual GDP numbers. We are interested in the Percent cost of financing deficits as a percent of GDP and of General Revenues. I began by using 100 as my GDP. In the first year 19% revenues of GDP would be 19, a 2% deficit of GDP would be 2 and interest amounts to 0.06. Financing Cost as a percent of General Revenues is calculated by dividing Interest on Debt by General Revenues. The cost of financing the national debt increases each year. What many fail to understand is that each year the national debt increases, the greater the cost ratio of debt interest to federal taxes. In short, there will come a time that the total interest on the debt will consume the total federal revenues paid by all Americans, leaving nothing for any government program.

Mark Souder made a comment in the October 31, 2008 debate that he could not just let the country go down the tubes and so he voted for the first bailout. Well Congressman, which is worse: being able to pay your way with pain or bankrupting the entire country. In simple terms, reducing all to the lowest common denominator.

Seniority in layoffs

Fort Wayne Community Schools is planning on laying off 49 people. They will do it by seniority. No matter how bad a teacher may be, they will keep their position over a more qualified teacher if they have more seniority. So when President Obama wants to pay teachers more, what would this actually accomplish under criteria used by FWCS?

Does FWCS want the best teachers? If they cannot distinguish good teachers from bad and rely on seniority to decide who gets laid off, what message does this send to those wanting to pay good teachers more?

Illegals upsetting some local economy's

I read in the paper today that illegal’s are returning to their own countries or maybe just moving somewhere else. Some schools had expanded in the past few years to accommodate increased enrollment and now they face an exodus. This has spilled over into rental units and the local economy as well.

This is a major reason why we have immigration laws. It allows for a steady, controllable and orderly number of people to enter the United States. Knowing how many people will enter allows for a more orderly increase in infrastructure. Planning is much easier when people are not breaking the laws. I predict that the exodus will prove costly until to those areas that allowed large number of illegals. For those areas that have not expanded or were about to expand because of illegal’s they should see a reduction in infrastructure costs.

Monday, March 16, 2009

You can use sand bags, but can't build a levee

Here is a case where government does not help. A Fort Wayne business had 74 units flooded causing $2 million in damage. The city was not going to protect him so he did it himself by building a two foot berm. Now the City has ordered him to tear it out after three years. The reason is he filled in a floodway.

Do you think they would have issued a permit knowing that this land was basically an overflow area that reduces flooding of other properties? Its the property of least resistance.

He would be able to place all the sand bags he wants around the property, but when it comes to installing an earthen berm (no different than landscaping) well we certainly can't be having the general public usurping the government's create dependency.

If only the public knew that government agencies have been using what is referred to as the Rational Method in calculating storm water runoff. I had a problem well over a decade ago with storm water runoff from a developer. It was maddening to deal with the local agency and nearly as bad with the state agencies. They changed their tune once an error was found in their manual used for calculating storm water runoff. It turned out that civil engineers had misinterpreted a national weather chart a very long time ago and no one had ever questioned them on it.

Was the floodplain identified on any plat and if so who identified it as such? The problem is really one of developments dumping water into natural drainages' that exceed what they can naturally handle. The problem originates with the permits that are issued for building that do not adequately control the runoff from new sites. All one needs to do is look at the old Southtown Mall and the new stores that are there now. Do they have the proper detention needed so that the runoff that ultimately flows into the river is no greater at any given time than what was there prior to developing the land? In most cases, you cannot exceed the capacity of a ten year rain. What we had recently was most likely far greater. This means Southtown and other developments have legal permits to flood others out.

Bad Engineering

I was at IPFW on Saturday with my wife. When we go to Walb Student Union, there were at least ten Stanley Steamer trucks working on sucking water out of the basement level.

The loading dock has a drain in it so that water can drain out of the recessed dock area when it rains. Due to the water rising in the Maumee river, the outlet for this drain was now below the level of the river. The river decided it was easier to flow back into the storm sewer pipes at IPFW than to rise further. As the loading dock filled with water, it began to over flow the nonexistent berm into the basement area.

IPFW being an engineering school should have had a bit more insight into designing buildings and drain systems. This cannot be the first time that the Walb Student Union has had its basement flooded. This is an unnecessary expense each time it occurs. Why not put check valves into the dock drain? This would certainly keep the water from flowing backwards from the river into the student union. Our tax dollars at work.

Friday, March 13, 2009

A Second Evangelical Minister Arrested At Mormon Pageant

Police in Salt Lake city do it not once, but twice!

"For the second time in two weeks, an evangelical minister has been arrested outside The Clarkston Pageant–Martin Harris: The Man Who Knew. The first arrest of Joel Kramer, 39, director of Living Hope Ministries, a nondenominational ministry based in Brigham City, was for investigation of disorderly conduct for videotaping the pageant. Based on the Living Hope Ministries’ website their sole purpose is to tear down the LDS faith through their lies, deceptions and half truths. Producing misleading videos is one of their chief methods of deception."

"Joel Kramer, 39, was arrested and booked for investigation of disorderly conduct after he told a Cache County sheriff’s deputy he was not violating any laws by videotaping the pageant."

NY Police arrest individual for photographing train.

On 2-12-2009 in New York City, a fan of trains was arrested for photographing a train. It might be funny if it didn’t keep happening.

Robert S. Taylor of Brooklyn was taking photos for fun last Thursday in a subway station. Police saw him and cited him for unauthorized photography, disorderly conduct/unreasonable voice and impeding traffic.

The charge of unauthorized photography – a crime that doesn’t exist – has already been dropped, Taylor says.

Sounds familiar. The only thing difference is NY prosecutor dropped the case within 6 days. I will always remember this short phrase "If I catch you videotaping, I will arrest you!" How dumb can police be.

Thursday, March 12, 2009

Ask if a SSN is required prior to providing it

It is literally amazing how many government agencies ask for require a SSN and simply state the Privacy Act of 1974 authorizes it.

I went to the Workforce One Development Website. It requires an individual’s SSN to register. I read through the privacy statement, but found nothing relating to it being required by Federal Statute. I sent an email asking if it was voluntary or mandatory and this is what I got as a reply.

Dear Mr. Larsen:

Thank you for your question and your interest in This website is managed by the Indiana Department of Workforce Development. We receive federal funding and are required to have an online labor exchange system. As such, we are required to report on the number of participants, services provided, and outcomes such as referrals and placements. We use social security numbers to distinguish between participants for our federal reporting. This is a secure system and only a limited number of staff are able to see the social security numbers. The social security numbers are not available to employers. We require that every person registering provide a social security number. If the individual does not want to provide a social security number then he or she can access the services that are available without registering. These services are somewhat limited but there are still some great features available. Just follow the links off of the home page and see what is available. We hope that the information and services are good enough on the site that people will want to register and as it is a state website will feel comfortable providing their social security number. Please ask if you have additional questions or would like to discuss the topic further. You can email

Thank you.

Lauren D. Bogan

The Privacy Act regulates the use of SSNs by government agencies. When a Federal, State, or local government agency asks an individual to disclose his or her Social Security number, the Privacy Act requires the agency to inform the person of the following: the statutory or other authority for requesting the information; whether disclosure is mandatory or voluntary;

what uses will be made of the information; and the consequences, if any, of failure to provide the information.

If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested. For example, utility companies and other services ask for a Social Security number, but do not need it; they can do a credit check or identify the person in their records by alternative means. Giving your number is voluntary, even when you are asked for the number directly. If requested, you should ask why your number is needed, how your number will be used, what law requires you to give your number and what the consequences are if you refuse. The answers to these questions can help you decide if you want to give your Social Security number. The decision is yours.

The Privacy Act of 1974 is a great statute (5 USC 552a).

Sec. 552a. - Records maintained on individuals

(e) Agency Requirements. -

Each agency that maintains a system of records shall inform each individual whom it asks to supply information, on the form which it uses to collect the information or on a separate form that can be retained by the individual –

(A) the authority (whether granted by statute, or by executive order of the President) which authorizes the solicitation of the information and whether disclosure of such information is mandatory or voluntary;

(B) the principal purpose or purposes for which the information is intended to be used;

(C) the routine uses which may be made of the information, as published pursuant to paragraph (4)(D) of this subsection; and

(D) the effects on him, if any, of not providing all or any part of the requested information;

More Specifically there is section 7


Section 7 of Pub. L. 93-579 provided that:

(a)(1) It shall be unlawful for any Federal, State or local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual's refusal to disclose his social security account number.

(2) the (The) provisions of paragraph (1) of this subsection shall not apply with respect to –

(A) any disclosure which is required by Federal statute, or

(B) the disclosure of a social security number to any Federal, State, or local agency maintaining a system of records in existence and operating before January 1, 1975, if such disclosure was required under statute or regulation adopted prior to such date to verify the identity of an individual.

(b) Any Federal, State, or local government agency which requests an individual to disclose his social security account number shall inform that individual whether that disclosure is mandatory or voluntary, by what statutory or other authority such number is solicited, and what uses will be made of it.'

Monday, March 02, 2009

Some Day This Will All Be Yours

This is a great cartoon

Healthcare - Who pays the bill?

Who pays for healthcare in the U.S.? Let us break this question down into groups; Medicare, Medicaid, individuals. We can further break down individuals into company insured, private insured and uninsured. Have we left anyone out?

Medicaid is pretty simple and direct. Medicaid pays healthcare for the poor who cannot afford to pay for it themselves. This means the taxpayers pay for this program through State and Federal income taxes.

Medicare is a bit more tricky in that it is funded 50% from the Medicare Payroll Tax of 2.9% paid by employees and employers.

Company sponsored health insurance is a benefit that is built into the cost structure of the company’s products and or services. Ultimately the consumer pays this. The portion the company does not cover is covered by the employee who may have deductible, co-pay or some agreed upon percentage of the bill.

Private insurance is paid by individuals. The individual pays a deductible, co-pay or some agreed upon percentage of the bill.

The uninsured pay 100% of their bill. If they cannot pay the bill, the provider is out the costs. Like any business the provider builds into its pricing structure an “insurance” aspect for those who do not pay their bill in full, but increasing everyone’s rate.

A provider has many different pricings for the same identical service. Each pricing is dependent on the customer, Medicaid, Medicare, Insured (group plan) and uninsured. Medicaid reimburses providers about 50% of the cost associated with the services provided. This means they must recoup 50% of the cost not reimbursed by Medicaid from all other payees. Medicare reimburses providers about 70% of the cost associated with the services provided. Again, the 30% that Medicare does not cover is picked up by all other payees. This is referred to “cost shifting.”

Cost Shifting has been taking place for more than 20 years now. The reason is simple; Medicare has a basic revenue raising formula. The Payroll tax is 2.9% on all wages. 25% of the cost is paid for by beneficiaries in the form of deductible, co-pay and premium. General Federal Revenues pay 25% of Medicare’s budget. This means that the maximum that Medicare can spend in any given year on healthcare by law is 5.8% of total wages plus any amount in the Medicare Trust Fund. Assuming wages total $6 Trillion; Medicare can spend no more than $261 Billion with $87 Billion being paid by beneficiaries. The cost to Medicare and Beneficiaries is about $348 Billion. However, the cost providers cost shift to all other payees is about $104.4 Billion.

Medicaid pays about the same number of beneficiaries and has a bit less cost. Cost Shifting is higher from Medicaid because of the much lower reimbursement rate. It is also higher because fewer providers accept Medicaid which then means these people end up going to the emergency rooms.

So who pays for healthcare in the U.S.? In simple terms, there were 160 million workers in the US. 45 million individuals are estimated to be without health insurance. This represents about 20 million families. 160 million workers represent about 105 million family units. In simple terms, 10% of the family units have no health insurance. Yet is it these family units that pay 81% of the Medicare costs and 90% of the Medicaid costs as well as their own healthcare costs.

The simple reason why healthcare costs are so high is that a family unit is not only responsible for their own families, but those age 65 and over and the poor.

What can we do to control healthcare costs? Insurance is a shared risk. Insurance works well when there is a low risk of occurrence that would have a high cost associated with the loss. What we have is providers charging different groups different rates for the exact same service. Medicare has artificially lowered the cost of healthcare for those age 65 and over. Medicaid has artificially lowered the cost of healthcare for the poor. The end result is everyone else pays not only their costs, but these two groups as well.

Medicare had good intentions, but it was implemented as a pay-go-insurance instead of accrual accounting. The automobile companies did the exact same thing. GM faces astronomical healthcare costs that are driving them out of business. Had payments been made to a trust fund to pay each workers future retirement healthcare costs in the year they were accrued, there would not be a problem today. This pay-go-insurance has been used for Social Security, Medicare, many company pension plans as well as healthcare plans. In essence they put IOU’s in the box each year saying they would make good on the funds at a later date. Now we are at the later date and there are no funds to pay these benefits.

As we do so, we are distorting the economy beyond its limits. The best thing we can do is what was done before we had Medicare, Medicaid and insurance. We need to be responsible for our own healthcare costs. Relying on the government takes more money out of our checks, reduces our discretionary spending, reducing jobs in our service economy which ultimately leads to higher unemployment and lower state and federal revenues.

The solution is not to continue in the direction of providing everyone with insurance, but just the opposite.

NBC-33 Debate poll results from 2002