Why go to college when public sector jobs are so SWEET!

Need tax revenue? Collect it from social security benefits! What fun!

A little–noticed law could soon result in smaller Social Security checks for hundreds of thousands of the elderly and disabled who owe the U.S. money from defaulted loans and other debts more than a decade old.

Social Security benefits are off–limits to creditors, such as credit–card companies and banks. But the U.S. can collect debts to federal agencies by "offsetting," or withholding Social Security and disability payments.

The Treasury currently withholds benefits of 3.1 million Social Security recipients to recover defaulted student–, farm– and small–business loans, unpaid income taxes, amounts veterans owe for health care, and other debts to the government.

Previously, the U.S. hasn't been able to withhold Social Security payments to recover most debts delinquent for more than ten years.

But a provision in the 2008 Farm Bill lifted the ten–year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans—for which the statute of limitations was lifted in 1997—and income taxes, where the limit remains 10 years.

A provision in the 2008 Farm Bill? I can only think that this was added as a revenue generator to offset the cost of Farm subsidies

This means that a person who defaulted on a small–business loan in 1995, for example, and who is receiving Social Security could be notified that his benefits may be reduced each month until the debt, with interest, fees, and penalties, is paid. The Treasury can withhold 15% of the benefit, though it can't be reduced to below $750. Tax debts have no floor.

The change will add more than $6 billion to the $75 billion in delinquent debt individuals owe the government, according to the Financial Management Service, the Treasury's debt collection unit.

In 2003, the U.S. began withholding $173 a month in Social Security benefits from Annie Brown, a paralyzed 75–year–old widow living in a nursing home to repay a defaulted $8,823 student loan the Education Department says she took out in 1989. The offset reduced Mrs. Brown's benefit to about $980 a month.

Mrs. Brown said a granddaughter had forged her signature on a loan application. Her daughter and a lawyer spent more than four years disputing the debt with the owner of the loan, United Student Aid Funds, a student–loan guarantor that also was acting as one of the Education Department's 21 debt collectors.

Read it all here.

VH: I don't know what to think about this except to repeat my thoughts on entitlement programs: Citizens that freely allow themselves to be wards of the state will reap what they sow. The state can and will hold your livelihood and well-being hostage to its greater political ends. Ask yourself, why the hell does the 2008 Farm Bill have anything to do with Social Security? It only does when one group is deemed worthless enough to be thrown under the bus for another group that is better connected and has better lobbying: The whims of the State change with the political winds. Who in their right mind wants to take a chance in their golden years with the state holding your livelihood in its grubby hands while listening to apologists for social security utter: "mistakes can happen, but over all, the process works?" I'm afraid too many. It is very sad that some of the senior citizens in this story have had to deal with the perniciousness of raw bureaucracy.

Ron Paul vs. Bernanke

Watch as Ron Paul poses some very incisive questions and comments to Ben Bernanke during a recent congressional hearing. Also notice how Bernanke, a very intelligent and learned man, simply does not understand that he is part of a government bureaucracy that is slowly dragging the American economy into the hands of big government power.

Socialized Medical Slaughter

From Copious Dissent.

Power of the Market--Individuals vs. Government

This is a excellent clip from Milton Friedman's "Free to Choose." There is a section on a small mailing company (before Federal Express or UPS) that attempts to fight and compete against the government backed U.S. postal service. Guess what happens?

HT: Liberty Pen

More on the financial crisis and the big government cronies that caused it

From Charles Krauthammer:

The mob is agitated, but hardly blameless. While the punch bowl -- Alan Greenspan's extremely low post-9/11 interest rates -- was being held out, few complained about cheap loans and doubling home values. Now all of the sudden everything is the fault of Wall Street malfeasance.

I have little doubt that some, if not many, cases of malfeasance will emerge. But what we conveniently neglect is the fact that much of this crisis was brought upon us by the good intentions of good people.

For decades, starting with Jimmy Carter's Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac -- who in turn pressured banks and other lenders -- to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity.
Read More

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable

I found this great article on the housing crash and the root of its cause:

One of the most frequently asked questions about the subprime market meltdown and housing crisis is: How did the government get so deeply involved in the housing market?

The answer is: President Clinton wanted it that way. Fannie Mae and Freddie Mac, even into the early 1990s, weren't the juggernauts they'd later be. While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was Clinton who supercharged the process.

After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.In so doing, he turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocs and handed favors, jobs and money to political allies. This potent mix led inevitably to corruption and the Fannie-Freddie collapse.

Despite warnings of trouble at Fannie and Freddie, in 1994 Clinton unveiled his National Homeownership Strategy, which broadened the CRA in ways Congress never intended. Addressing the National Association of Realtors that year, bluntly told the group that "more Americans should own their own homes." He meant it. He saw homeownership as a way to open the door for blacks and other minorities to enter the middle class.

Though well-intended, the problem was that Congress was about to change hands, from the Democrats to the Republicans. Rather than submit legislation that the GOP-led Congress was almost sure to reject, he ordered Robert Rubin's Treasury Department to rewrite the rules in 1995. Read More

From Terry Jones at Investor Business Daily

How the housing debacle really happened

HT: Liberty Pen

The Bailout Cometh

Oh, it’s gonna cost us, dear taxpayer. We will rue the day that we allowed the government to take hold of the economy to the extent that it has over the last week or so. The bailout will cost roughly $6,500 per family or $2,000 per person. Ho, ho, ho, Merry Christmas to us! The Liberal hounds are howling their tortuous tune of how regulation would have saved us from all this. All I hear all day on lefty talk radio is the Glass-Stegall act and how it was wiped out by the evil free-market conservatives. “Oh, look what it has wrought!” Poor fools. This country is going to go down the wrong road and we will regret it later on with more government intervention. Sorry to break it to liberals but all of this is due to the government and it’s whacked regulatory bureaucracy. With this crisis and the populist call to have the feds take control, we get closer and closer to collectivism and more government control of our lives and economy. Progressives must be so happy.
Despite the bipartisan touchy feely-ness of the last couple of days, it looks like there is going to be a lot more ideological tugging and pushing rearing its ugly head. Does anyone want to doubt that our political class will screw this entire episode up?

Best Post I’ve read Today…

From Jeff Perren at Shaving Leviathan; He rightly notes that in this current crisis on Wall Street, government will always be overly zealous and heavy handed when it comes time to regulate an industry that is currently unpopular or deemed too “greedy.” Politicians will push for regulations not because they are sure that it will help all parties involved but to seem to their constituents that they are “doing something:”

Hundreds of economists from Adam Smith to Thomas Sowell have pointed out the obvious for generations. Beneath all the complex talk of derivatives, leverage, and the like they all say pretty much the same thing: Politicians, get out of the way. Let the market deal with it.

Pelosi's Energy News Conference Gets Overwhelmed by Pro-Drilling Americans, Then She Hops in an SUV

HT:Americans for Prosperity

Power of the Market—the Pencil

HT:Liberty Pen

Welcome to the Nanny State

From Reason TV.

HT: Liberty Pen

Cash Cows

You’re going to hear more of the Government Accountability Office report stating that U.S. corporations have paid no income tax for a span of about seven years. The question that this report should have answered and that media outlets should have asked: Did these corporations make any profits? This would head off any unfair comments by those in the public and politicians that view corporations and companies as cash cows that never pay their share. Never let anyone tell you that the media is not biased or trying to stir up resentment to sell newspapers. In an answer to the GAO report, Daniel Mitchell of the Cato Institute does an excellent job of explaining corporate taxes in this PODCAST

Speculators=Vampires II

Has anyone noticed that the price of gas has dropped for 24 consecutive days? I’m sure you have as there has been a drop of 15 cents over the last two weeks. Strange, Congress takes a vacation from doing squat all season and oil prices drop rather nicely. Hmm, maybe it’s just a coincidence.

But what of the conspiracy theories regarding speculators brought forth by progressives and liberal Democrats? Where are these capitalist vampires and why in the world would they let oil prices drop when there are riches to be had? Heck now is a good time to stick it to consumers since Congress is out of town. Why not ratchet the price up ever higher? Who is going to stop you, right? After all, the Enron Loophole is still in place and so are all the laws that sneaky Phil Gramm passed back in 2000 which, according to over active imaginations or political spinsters, are the mechanisms used by speculators to push crude oil prices higher and higher.

But, dear reader, as we have witnessed over the last couple of weeks, the laws of supply and demand, a strengthening dollar, and slowing economies in Europe and the U.S., have proved the conspiracy theorists wrong. What a surprise!

By the way, the U.S. Commodities Futures Trading Commission released the results of its interim investigation into any fraud, wrongdoing, or market manipulation on 07/22/08. And the conclusions of the interim report, “found that fundamental supply and demand factors provide the best explanation for the recent crude oil price increases.” Imagine that.

However, we shouldn’t be surprised if oil prices spike up again due to an unexpected world event (or if the dollar starts to sink again) and that complaints from the Left begin again in earnest. Quite frankly, I would actually be OK if the Enron Loophole were closed. Then, when prices do go up again, we won’t have to hear all the ludicrous theories on how capitalism doesn’t work, more regulation is needed, and how speculators are all making a mint as they tool the market.

"In The Name Of Fairness"

Here’s another wonderful hack job from the liberal blog Huffington Post:

WASHINGTON — Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office released Tuesday said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.

At least they had the decency to quote Chris Edwards from the Cato Institute who nails the issue right on target. A good chunk of those “rich” people that Obama wants to raise taxes on are actually LLC or “S” corporations that create and maintain jobs. Maybe someone should tell Obama and Sen. Dorgan that thousands of professionals and business owners who used to report most of their income under the corporate tax responded to lower individual income-tax rates after 1986 and 2003 by reporting more income under the individual tax as partnerships, LLCs and Sub-S corporations. Moving business income from the corporate to the individual tax, not CEO pay for example, has raised the top 1%'s share on individual tax returns. But I digress. Here is the crux of Sen. Dorgan’s complaint:

Dorgan and Levin have complained about companies abusing transfer prices _ amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this.

"It's time for the big corporations to pay their fair share," Dorgan said.

So, Sen. Dorgan wants to create even more corporate tax bureaucracy in order to capture what parent and subsidiary companies transact. Perfect. And when has it been “unfair” for a company to try to save on their tax liabilities? That’s what I would call good corporate governance. Cutting tax liability is what tax credits, losses, and write-offs are for and provided by the tax code.

Oh, I can’t wait until liberal Democrats have full control of Congress and the White House, folks. We are going to see a lot more of these witch hunts against business. As Obama once said in a primary debate discussing an increase in capital gains taxes, it's all "in the name of fairness.”

School Choice and the problem of bureaucracy

Here’s a great clip from a British T.V. show on how government bureaucracy has ingrained itself to the school system and how hard it is to dislodge it.

HT: Andrew Roth@ Club for Growth

Fannie and Freddie: Ron Paul called it in 2003

The whole ugly mess that has slowly revealed itself over the last week regarding GSE’s Fannie Mae and Freddie Mac were carefully foretold by Ron Paul in 2003:

The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.

While Dr. Paul wasn’t the first or the only one sounding the alarm on Fannie and Freddie, it sure is nice to know that there is someone in Congress that is sharp enough and honest enough to see a train wreck in the making.

The magical realism of the Kyoto Treaty

Remember all the static and noise by environmentalists and lefty’s everywhere regarding the Kyoto treaty? And how the “evil” George W. Bush was responsible for the destruction of the earth because he didn’t sign it? (Even though the Senate rejected the treaty in the first place-but let’s not let facts get in the way of a good Bush bashing.) Well, as I have commented before, the Kyoto treaty doesn’t work as well as its' proponents shrill. Even though I am not a big fan of Mr. Bush, I do agree with him on his stance on Kyoto. And it looks like most member nations of the G-8 are also starting to see the light of reason.

A Brave New Green World!!

Oh, boy! Hang on to your wallets! Wait till you get a load of this. Currently, in the U.K., there is legislation to ration personal CO2 emissions: When you gas up, or when you buy that airline ticket to visit grandma, the government will track all of your CO2 use. When you overuse your allotment of personal CO2, you will have to buy some credits from someone who has them. Imagine that! This is where modern environmentalism is taking us, folks--a massive leviathan of a bureaucracy with ever more control of our lives and our freedom in the name of “saving” the planet.

It would cost a country like Britain billions of dollars a year to run a personal cap-and-trade system nationwide, but set that aside. War-time-like energy rations are a clear illustration of the extent to which environmentalists hope to control every aspect of modern life. Do you really want to blow much of your annual "ration" on that long carbon-spewing jet flight to Florida, or should you swap that summer AC for weekend drives in the country?

The global warmists want you to sacrifice for their cause. And the duration of their war on carbon will make the decade-and-a-half of British rationing during and after World War II seem like a fleeting moment. The pending climate-change bill calls for a 60% cut in carbon emissions from their 1990 levels by 2050. Once 2050 rolls around, who exactly will declare the end of hostilities?

The prospect of personal CO2 rations should debunk the idea that the cost of curbing carbon emissions would fall on the owners of dirty old factories. That notion was always a green herring: Like corporate taxes, the business costs of carbon reduction will be passed on to consumers. In that sense, we should be grateful to the Brits for showing us where this anticarbon crusade really ends up.

Can you imagine what this sort of personal cap-and-trade would cost if it were implemented in the U.S.? My only hope is that this sort of bureaucracy would frustrate Americans to no end and any politician that suggested it would be sent packing. I can only hope.