Will the Republicans Save Us?

by Laurence M. Vance

Now that the Democrats have regained complete control of the government, many conservatives are looking to the Republicans in Congress to save us from the socialism and fascism of the Democrats. As we saw when Clinton was president, many Republicans have started talking, and some have started acting, like the conservative advocates of liberty and less government they claim to be. Will the Republicans save us?

Don’t count on it.So why am I so pessimistic? Because I actually check how the Republicans in Congress vote instead of just listening to their free-market, limited government, and anti-Democratic rhetoric, that’s why.

The New American magazine’s "Freedom Index" for the new 111th Congress has just been released. The higher the number on this index, the stronger a congressman’s "adherence to constitutional principles of limited government, fiscal responsibility, national sovereignty, and a traditional foreign policy of avoiding foreign entanglements." Congressman Ron Paul (R-TX) scored a perfect 100 on the House version of the index, as he consistently does. This time, however, two other Republicans in the House (John Duncan of Tennessee and Jeff Flake of Arizona) also scored a 100. The high scorer in the Senate was Tom Coburn (R-OK), with a 100.

The composition of the 111th Congress in the House is 256 Democrats and 178 Republicans (there is one vacancy). In the Senate, there are 58 Democrats, 2 Independents, and 40 Republicans.

The ten issues that members of the 111th Congress in the House are being rated on this time are TARP funding, reauthorization of the State Children’s Health Insurance Program (SCHIP), economic stimulus spending, national service, federal funding of more police, the $3.56 trillion federal budget, hate crimes legislation, supplemental appropriations for the wars in Iraq and Afghanistan, TSA use of body imaging screening, and the "cash for clunkers" program.

In the Senate, the issues are TARP funding, the Mexico City Policy on abortion funding, SCHIP reauthorization, economic stimulus spending, District of Columbia congressional voting rights, the Fairness Doctrine, national service, the federal budget, funding for the International Monetary Fund (IMF), and supplemental appropriations.

The average House score on the "Freedom Index" is 38; the average Senate score is 34. The average Republican score in the House is 71; the average Republican score in the Senate is 76. (The Republican average in the Senate should actually be less since Arlen Specter [D-PA] was a Republican for the first seven of the ten Senate votes tracked by the "Freedom Index.") Obviously, the Democratic averages are less than the overall averages.

Okay, so the Republicans don’t look too bad – if we compare them with the Democrats. And that’s the problem. When the Republicans look good, it is usually because they are being compared with the Democrats. Even when they look bad, they end up looking good because they are said to be the lesser of two evils.

But judged by the standards of liberty and the Constitution, the Republicans in the House only get a C–, while those in the Senate get a C. This is not good for a party whose members take an oath to uphold the Constitution and profess to believe in free markets and limited government. Who praises their kids for having a C average on their report card?

Another reason I am not excited about these Republican scores is that their numbers in previous editions of the "Freedom Index" are much, much lower. For example, the last "Freedom Index" gave the cumulative scores for forty key votes in the 110th Congress. The Republican average in the Senate was a pathetic 47. But shouldn’t we still be happy about the higher scores for the Republicans in the 111th Congress? Yes and no. I rejoice that many Republicans have started acting like the defenders of liberty and less government they claim to be. But I am not dumb enough to think that they are doing it for any other reason than they are opposing the Democrats. Almost half of the Republicans in the House and over two-thirds of the Republicans in the Senate voted for the bailout bill (H.R. 1424) last year. What a difference a Democratic president makes.

Am I being too hard on the Republicans? I think not.

When we dig a little deeper into the legislation tracked by the "Freedom Index" we see that it’s not just a few bad grapes that are corrupting the Republican vine. The Republicans show themselves to be against liberty and limited government on certain key issues. On the issue of national service, 70 Republicans in the House and 22 in the Senate voted for The Edward M. Kennedy Serve America Act (H.R. 1388). On the supplemental appropriations bill (H.R. 2346) that funneled another $84.5 billion to the wars in Iraq and Afghanistan and authorized another $10 billion in foreign aid, only 9 Republicans in the House and 1 in the Senate voted no. A House vote authorizing the federal government to spend $1.8 billion a year to hire local law-enforcement officers through the Community Oriented Policing Services (COPS) program (H.R. 1139) was supported by 94 Republicans. There were 59 House Republicans that voted for the Consumer Assistance to Recycle and Save Act (H.R. 2751), known as the "cash for clunkers" program. This authorizes the federal government to give consumers rebates of up to $4,500 for trading in their old cars for more fuel-efficient ones. I am still trying to find authorization for that one in the Constitution.

I applaud the Republicans for overwhelmingly rejecting Obama’s economic stimulus (The American Recovery and Reinvestment Act [H.R. 1]) and bloated federal budget. But where were these born-again fiscal conservatives during the Bush years? Is there any doubt that a McCain stimulus and a McCain budget would be strongly supported by most of the Republicans in Congress? How can anyone look at the Republican track record and think otherwise?

So, can we look to the Republicans to save us? Obviously not. So many of them violate the Constitution without even blinking, the vast majority of them still support billions more in spending for the wars in Iraq and Afghanistan, and so few of them are even close to being Ron Paul Republicans.

As I have said on several occasions, I rarely bother to write about the evils of the Democratic Party. The socialist and statist policies of the Democratic Party are well known and expected. The Democrats don’t masquerade as advocates of more liberty and less government. They openly preach the redistribution of wealth, draconian environmental laws, the nanny state, and massive increases in government intervention in the economy and society. The only thing surprising about the Democrats turning this country into a socialist/fascist paradise


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16% of Americans' Income, Comes in the Form of Government Welfare

via Dennis Cauchon, USA TODAY
The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans' income is now coming in the form of a federal or state check or voucher. Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009, the Bureau of Economic Analysis reports. That's the highest percentage since the government began compiling records in 1929.In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show. Benefits rose at a 19% annual rate in the first quarter compared to the last three months of 2008.

The recession caused about half of the increase, according to the report. Unemployment insurance nearly tripled in the past year. The other half is the result of policies enacted during President George W. Bush's first term.

Following the 2001 recession — when costs normally decline — social spending soared to pay for the Medicare drug benefit, expanded health care for children and greater use of food stamps.

The safety net is working, advocates say.

"We're not seeing the hunger we saw in the 1930s because the food stamp program is doing what it's supposed to do," says Florida food stamp director Jennifer Lange.

What's driving the $209 billion increase in benefit costs from a year ago:

• Unemployment insurance. One-fourth of the extra spending covers jobless benefits, a program started in the Depression. The stimulus law, passed in February, increased benefits.

• Social Security. The bad economy has prompted a 10%-15% jump in early retirements, the program's actuary says. A 5.8% increase took effect January 1. Bottom line: $55 billion in new costs.

• Food stamps. Enrollment hit a record 33.2 million people in March, up 5.2 million from last year. The stimulus law boosted the size of the benefit. Average March benefit: $114 per person.

"The increase in social spending is still relatively modest given the severity of the downturn," says economist Dean Baker of the liberal Center for Economic and Policy Research. "We're not France."

Adam Lerrick, economist at the conservative American Enterprise Institute, says the benefits' explosion will eventually lead to an economic crisis.

"We've seen this movie before in many countries. It always has the same ending," he says. (Read more inside ..)

The U.S. Dollar Continues to Decline

June 2 (Bloomberg) -- The dollar weakened beyond $1.43 against the euro for the first time in 2009 on bets record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.

The 16-nation euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound rose to the highest level since October and the Canadian dollar traded near an eight-month high on speculation signs of a recovery in U.S. housing will spur higher-yield demand.
New Global Currency

“There’s been a lot of talk out of Russia about a new global currency, and that’s contributing toward this latest bout of dollar weakness,” said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. “These latest comments are just adding to the general dollar weakness we’ve seen recently.”

The dollar slid 0.9 percent to $1.4284 per euro at 12:44 p.m. in New York, from $1.4159 yesterday. It touched $1.4314, the weakest level since Dec. 29. The dollar fell 0.9 percent to 95.74 yen, from 96.59. The euro was little changed at 136.76 yen, compared with 136.78.

Sterling rose as much as 0.8 percent to $1.6577, the highest level since Oct. 30, while the Canadian dollar advanced 1.1 percent to C$1.0819, near the strongest level since Oct. 3.


Pending sales of existing homes in the U.S. climbed 6.7 percent in April, the National Association of Realtors said today. The median forecast of 32 economists surveyed by Bloomberg News was a 0.5 percent gain.



Dollar Index

The Dollar Index, which ICE uses to track the currency’s performance against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell as much as 0.9 percent to 78.44, the lowest level since Dec. 18.

Russian President Dmitry Medvedev may discuss his proposal to create a new world currency when he meets counterparts from Brazil, India and China this month, Natalya Timakova, a spokeswoman for the president, told reporters by phone today. Medvedev first proposed seeking alternatives to the U.S. dollar as a reserve currency in March.


The Dollar Index reached 89.62 on March 4, the highest level since 2006, as the global recession spurred investors to take refuge in Treasuries including bills.

Demand for the record amount of debt the U.S. is selling will be sufficient, Treasury Secretary Timothy Geithner said in an interview today with state media outlets in China.

China has a “very sophisticated understanding” of why the U.S. is running up deficits, Geithner said in Beijing, pledging to rein in borrowing later.

There’s no replacement currency for the dollar in the short term, Guo Shuqing, former head of China’s foreign-exchange administrator, said in an interview with the Financial Times for an article published yesterday.



‘Opportunity to Sell’

“The market is looking for the opportunity to sell the U.S. dollar,” said Jack Spitz, a managing director for foreign exchange at National Bank of Canada in Toronto. “It took decades for the euro to be established. I can only imagine how long it would take for the BRIC countries to put together a currency.”

The dollar also declined on speculation “smaller” central banks started today’s selling of the greenback, said Sebastien Galy, a currency strategist at BNP Paribas SA in New York.

“If people believe that there is official pressure behind it, then obviously it puts pressure on euro-dollar on the upside,” Galy said. “Small central banks have an incentive in doing something because if they’re the first movers, they will not suffer by far as much as the big ones.” Galy predicted the 16-nation currency may reach $1.4360 today, a peak last reached in December.



Europe’s Unemployment

The euro fell earlier versus the yen as Europe’s jobless rate jumped in April to the highest level in almost 10 years. Unemployment in the 16-member euro region increased to 9.2 percent from 8.9 percent in March, the European Union statistics office in Luxembourg said today.

ECB President Jean-Claude Trichet said last month it would buy 60 billion euros of covered bonds. The Federal Reserve, Bank of England and Bank of Japan are already purchasing government and corporate bonds in a policy known as quantitative easing, which is intended to keep borrowing costs low. The ECB will keep its benchmark rate unchanged at 1 percent on June 4, according to aBloomberg survey.

The euro’s rally against the dollar may be entering its “last stage,” and investors would likely benefit from selling the 16-nation currency against the greenback, according to UBS AG, the world’s second-biggest foreign-exchange trader.

Europe’s currency is poised to weaken toward $1.30, analysts led by Mansoor Mohi-uddin, Zurich-based chief currency strategist at UBS, wrote in a note to clients yesterday. The analysts reiterated forecasts for the euro to trade at $1.40 in one month’s time and then weaken.

“We remain positive on the U.S. dollar and think that the greenback is likely in its final stage of weakness,” the analysts wrote. “Equity and bond flows have the potential to surprise and could lend support to the dollar.” (Read more inside ..)

How to Save $13,000 a Day

**Your Savings May Vary


"Why I'm Leaving New York"
by Tom Golisano via LewRockwell.com

I love New York. But how much should it cost to call New York home? Decades of out-of-control budgets, spending increases and relentless borrowing have made New York simply too expensive.

Politicians like to talk about incentives -- incentives for businesses to relocate, incentives to buy local and incentives to make smart decisions. After reviewing the 2009 budget, I have identified the most compelling incentive of all: a major tax break immediately available to all New Yorkers. To be eligible, you need only do one thing: move out of New York state.Last week I spent 90 minutes doing a couple simple things: registering to vote, changing my driver's license, filling out a domicile certificate and signing a homestead certificate -- in Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually.

That savings doesn't include that Florida has a 6 percent sales tax, compared to New York's 8 percent or more. Florida has lower utility taxes and lower gasoline taxes. The Florida homestead certificate guarantees my property taxes will not grow more than 3 percent.

By moving to Florida, I can spend that money on worthy causes, like better hospitals and improving education, and on worthy projects like the Clinton Global Initiative. Or maybe I will continue to invest that money in fighting the status quo in Albany. One thing is certain: That money will not continue to fund Albany's bloated bureaucracy, corrupt politicians or regular handouts to the special interests.

How did we get here in the first place? It all starts with spending, spending and more spending.

BUDGET SPENDING

New York's budget was $72.7 billion in 1999. Ten years later, it has ballooned to $131.8 billion. That growth is astounding, but it continues to get worse. Each year, New York's budget has had 6 percent compounded growth, double the average rate of inflation (2.8 percent). Florida's budget, on the other hand, went down 8 percent this year. HEALTH CARE SPENDING New York spends $2,283 per person on Medicaid. That's the highest per capita spending in the nation and twice the national average. In the last decade, the Medicaid budget has grown by 50 percent ($30 billion in 1999 and $45 billion in 2009). In almost every sector (hospitals, nursing homes, medicine, clinics, and home and community care), spending per recipient regularly exceeds the national average.

Faced with escalating costs and diminishing returns, Albany and their allies, the health care unions (SEIU has over 300,000 politically active members), had only one answer: Increase taxes.

EDUCATION SPENDING

New York spends the most per pupil in America on education, spending 63 percent above the national average. Costs went up about 60 percent in the last decade ($12.7 billion in 1999 and $20.7 billion in 2009). Like health care, education is something worth spending on and worth investing in, but we're spending more and getting less. New York City schools graduated 54 percent of high school students in 2007, Buffalo 47 percent and Rochester 45 percent.

Why? Perhaps it's because the New York state teachers union, with its $114 million budget, is always trying to convince Albany to spend more. Maybe it's because it's mandatory that all teachers pay union dues. Whatever the cause, when faced with potential cuts, the union and their allies have one response: Increase taxes.

LOCAL GOVERNMENT SPENDING

It's not just the state. It's the range and breadth of New York layers of governments and special taxing districts. In New York, the average state and local tax burden is $5,260 for every man, woman and child. That's by far the highest in the country. Like Albany, when faced with a difficult problem, these municipalities have one answer: Increase taxes.

Upstate New York has been particularly hard hit. Add unreasonable real estate taxes to the uncontrolled state spending, and you have whole communities decimated. The assessment process is unfair, unworkable and unreasonable, and the result is that 15 of the 20 highest taxed counties in America are right here in Upstate New York. While homeowners in other areas build equity, we just pay more taxes.

NO ONE'S HOME

This problem did not begin with the current recession. New York faced a $6 billion shortfall before the economic downturn. However, in the face of economic turmoil Gov. Paterson, Speaker Silver and Majority Leader Smith looked to the unions and special interests, who answered with one voice: Raise taxes.

Among other taxes and fees, they raised the marginal tax rate on the most successful (and most mobile) New Yorkers to 8.97 percent, the second highest rate in the nation.

It was irresponsible and it may just prove to be counterproductive, since the top 1 percent of earners account for about 50 percent of state revenue. We're the ones who can -- and will -- leave.

It's not an easy decision, but I'm being forced away from my family and friends, a pain shared by too many parents and grandparents in this state.

I'm leaving. And by domiciling in Florida, I will personally save $13,800 every single day. That's a pretty strong incentive.

Like I said, I love New York, but I'm not going to pay New York more for the waste, corruption and inefficiency that is New York state government.
(Read more inside ..)

IRS Revenue Falls by 34%

From the "Aww that's a shame" file.

Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says. "When the economy slumps, so does tax revenue, and this recession has been no different," says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been."

For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.

"These are staggering numbers," Lynch says. Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years. "It's one of the drivers of the ongoing expansion of the federal budget deficit," says John Lonski, chief economist for Moody's Investors Service. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009.

Read the full story here (Read more inside ..)

Government Considers National Sales Tax

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

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