Do you ever wonder why Greece is in so much trouble?

Our government is more expensive than any government in history – and we have nothing to show for it.

Mark Steyn

American government has assumed more responsibilities than can reasonably be met.

Robert Samuelson

Greece is the poster child for my war against Big Government.

Governments that stick their nose into every facet of their citizens’ lives are headed for the trash heap of history. The nation that gave us democracy has… well only an example can show the lunacy! Sadly, the USA is not far behind.

[Sources: Starting an online store is no easy business, by Alexandra Kassimi and I Always Suspected Greek Bureaucrats Were Useless Pieces of S**t, but even I’m Surprised to Learn that They’re Actually Collecting the Stuff, by Dan Mitchell]

It took 10 months, a fat bundle of paperwork, countless certificates, long hours of haggling with bureaucrats and overcoming myriad other inconceivable obstacles for one group of young entrepreneurs to open an online store. …opening an online store based in Greece is no job for the fainthearted. …Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector’s office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.

My friends, that says it all about government intrusion into free market capitalism. I am a physician (and a Radiologist) and for the life of me I cannot fathom a reason why these idiots would require these entrepreneurs to submit chest x-rays let alone stool samples before giving an on-line business permission to start selling – unless, of course, they were selling sh*t – and their own sh*t, at that!

Progressive/statist/altruists must necessarily believe that there is a logical limit to government intrusion in a democracy with a constitution. They are wrong! (Footnotes)

Roy Filly


[Source: Which Nation Has Dumber Bureaucrats and More Political Correctness, the United States or United Kingdom? by Dan Mitchell]

There certainly have been lots of dumb examples of political correctness in the UK.

A job-placement center that got in trouble for discriminating against incompetent people by seeking “reliable” and “hard-working” candidates.
A women who was being threatened by thugs got in trouble with the police for brandishing a knife in her own home.
A man got arrested for finding a gun in his yard and turning it over to the police.
The government wanted to require “competency tests” for pet owners.

These surely are laughable examples of bureaucracy run amok. But is the United States any better, given these examples?

A Rhode Island boy getting in trouble for bringing toy soldiers to school.
A student in San Diego who got in trouble for making a motion detector for a science project, simply because someone decided it resembled a bomb. (Of course, he wasn’t a Muslim so President Obama did not invite him to the White House – RF)
The military was criticized for giving Osama bin Laden an Indian code name (Geronimo) as part of the operation to exterminate the al Qaeda leader.
A Florida student was expelled for having a toy gun on school property.
And how can we omit the politicians in San Francisco, who decided that banning happy meal toys was an appropriate use of government coercion.

We have lots of examples of regulators running amok.

But we also have really absurd examples of wasteful spending.

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I am not a fan of public sector unions.

Multiple choice: Who made this quote. “It is impossible to bargain collectively with the government.

Rand Paul, Senator from Tennessee

Scott Walker, Governor of Wisconsin

George W. Bush, 43rd President of the United States

George Meany, former President of the AFL-CIO

Answer: George Meany. Government unions are commonplace today, but, in the 1950s, the labor movement thought the idea absurd.

The proper business of a labor union is to get higher wages, better hours and good shop conditions for the workmen. But when labor en masse plunks its vote for its own party, then the spirit of party loyalty begins to obscure labor’s objectives … So we have … workers trading votes not for the immediate objective of wages, hours and shop conditions, but for power …

William Allen White (Importantly, Mr. White, a prominent newspaper editor, was a leader of the Progressive Movement.)

There was no precise moment when the tide began to turn against labor unions in America. There was no single catastrophic event — no landmark strike that was broken, no massive organizing campaign that was turned back, no key negotiation that went poorly for labor. But beyond any doubt, since the early 1980s, unions have lost many of their resources and much of their influence.

Gary Chaison (An academic Ph.D. who is one of the leading authorities on unions)

Regarding labor unions: … eventually they become just another street gang. Spiritually, psychologically, they’ve always been just a street gang. (As Governor Scott Walker learned.)

Rudi Giuliani

(When asked what he wanted) We want more, and when it becomes more, we shall want still more. And we shall never cease to demand more…

Samuel Gompers (American Labor Union Leader)

From the title you might guess that I am not in favor of public sector unions. Actually, I do not favor private sector unions either, but the scale of my dislike is an order of magnitude less for them.

I did favor unions at one time. They were the organizations that made the workplace safer. The fact that unions brought safety to some dangerous workplaces is indisputable. It is also true that unions helped to secure adequate compensation for private-sector workers by extracting a greater share of the profits of the company. However, nearly every union gain made through contract negotiation with regard to safety is now codified in law. Indeed, laws have gone much further than union contracts ever went in securing workplace safety. As one who has dealt with the rules set by Cal/OSHA (The Department of Safety and Health for the State of California) I can assure you that workplace safety has, if anything, gone off the deep end. Employers can barely keep up with the innumerable rules set forth by that organization. Despite the positive gains of private sector unions, their membership is now a paltry 7% of the private sector workforce. It is the public sector union membership that has “blossomed” in recent years.

[Source: Carrie Sheffield, “How Government Unions Undermine Upward Mobility,” Competitive Enterprise Institute]

The year 2009 was the first time that unionized government employees (7.9 million) outnumbered private sector union members (7.4 million). When I think of unions I think of my father and uncles who were blue-collar workers. Public sector unions are increasingly becoming bastions of white-collar, skilled workers, counter to the mythology of a blue-collar everyman.

As this transition occurred government employee unions created a more expensive and protected class of workers at the expense of non-union workers, students and taxpayers. These government union “workers” are the antithesis of what most Americans think of when they picture a picket line outside of the local Ford plant. More likely government union “workers” have attended college and garner salary and benefit packages more generous than the average private sector worker (footnote).

  • The typical union member no longer lives in a major city center close to the factory; by the 1990s, union members were more likely to live in suburban than urban areas.
  • In 2013, 53.6 percent of workers in the public sector had a bachelor’s, advanced, or professional degree, compared to 34.9 percent of private sector workers.

So why does the Democrat Party bend over backwards to protect and support public sector unions? Government unions are major political campaign donors. Elected officials who rely on unions to remain in office in exchange for expanding benefit packages are driving cities like Detroit and Stockton, California, and states like Illinois and New Jersey to the brink of fiscal insolvency.

While most of this will not be news to my readers, a refresher course from time to time is appropriate.

Roy Filly


Job Federal Private Difference
Airline pilot, copilot, flight engineer $93,690 $120,012 -$26,322
Broadcast technician $90,310 $49,265 $41,045
Budget analyst $73,140 $65,532 $7,608
Chemist $98,060 $72,120 $25,940
Civil engineer $85,970 $76,184 $9,786
Clergy $70,460 $39,247 $31,213
Computer, information systems manager $122,020 $115,705 $6,315
Computer support specialist $45,830 $54,875 -$9,045
Cook $38,400 $23,279 $15,121
Crane, tower operator $54,900 $44,044 $10,856
Dental assistant $36,170 $32,069 $4,101
Economist $101,020 $91,065 $9,955
Editors $42,210 $54,803 -$12,593
Electrical engineer $86,400 $84,653 $1,747
Financial analysts $87,400 $81,232 $6,168
Graphic designer $70,820 $46,565 $24,255
Highway maintenance worker $42,720 $31,376 $11,344
Janitor $30,110 $24,188 $5,922
Landscape architects $80,830 $58,380 $22,450
Laundry, dry-cleaning worker $33,100 $19,945 $13,155
Lawyer $123,660 $126,763 -$3,103
Librarian $76,110 $63,284 $12,826
Locomotive engineer $48,440 $63,125 -$14,685
Machinist $51,530 $44,315 $7,215
Mechanical engineer $88,690 $77,554 $11,136
Office clerk $34,260 $29,863 $4,397
Optometrist $61,530 $106,665 -$45,135
Paralegals $60,340 $48,890 $11,450
Pest control worker $48,670 $33,675 $14,995
Physicians, surgeons $176,050 $177,102 -$1,052
Physician assistant $77,770 $87,783 -$10,013
Procurement clerk $40,640 $34,082 $6,558
Public relations manager $132,410 $88,241 $44,169
Recreation worker $43,630 $21,671 $21,959
Registered nurse $74,460 $63,780 $10,680
Respiratory therapist $46,740 $50,443 -$3,703
Secretary $44,500 $33,829 $10,671
Sheet metal worker $49,700 $43,725 $5,975
Statistician $88,520 $78,065 $10,455
Surveyor $78,710 $67,336 $11,374



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Climate alarmists have moved on to persecution instead of “settled science.”

The global warming alarmists have definitively gone off the deep end. They have moved on from “settled science” – an oxymoron – to “imprison (or kill) the bastards.” Sadly, that is not a joke.

[Source: Suppressing Free Speech, by Walter E. Williams]

The following “scientists” have decided that opposition to their “findings” on global warming should be met with imprisonment. Don’t be ridiculous, say you. Au contraire, mon ami. They are serious and even wrote to the President and the Attorney General to make their case. (Footnote)

(From Professor Williams article) “Meteorologist Jagadish Shukla is the lead signatory of the letter sent to the president and attorney general asking them to use RICO laws to prosecute ‘corporations and other organizations that have knowingly deceived the American people about the risks of climate change.’ This professor calling for the prosecution of climate skeptics has been recently revealed to be a ‘climate profiteer.’ From 2012 to 2014, this leader of the RICO 20 climate scientists paid himself and his wife $1.5 million from government climate grants for part-time work.”


“The effort to suppress global warming dissidents is not new. Grist Magazine writer David Roberts said, ‘When we’ve finally gotten serious about global warming, when the impacts are really hitting us and we’re in a full worldwide scramble to minimize the damage, we should have war crimes trials for these bastards — some sort of climate Nuremberg.’ Professor Richard Parncutt has called for the execution of prominent ‘GW deniers.’ Climate Progress Editor Joe Romm called for deniers to be strangled in their beds. James Hansen, who has headed NASA’s Goddard Institute for Space Studies, has likewise called for trials of global warming deniers.”

My friends, as a scientist I can assure you that this is not the academic process by which a theory is either proven or shown to be wanting. This is how Nazis and Islamists win arguments.

Roy Filly


Letter to President Obama, Attorney General Lynch, and OSTP Director Holdren

September 1, 2015

Dear President Obama, Attorney General Lynch, and OSTP Director Holdren,

… We appreciate that you are making aggressive and imaginative use of the limited tools available to you in the face of a recalcitrant Congress. One additional tool – recently proposed by Senator Sheldon Whitehouse – is a RICO (Racketeer Influenced and Corrupt Organizations Act) investigation of corporations and other organizations that have knowingly deceived the American people about the risks of climate change, as a means to forestall America’s response to climate change… We strongly endorse Senator Whitehouse’s call for a RICO investigation…


Jagadish Shukla, George Mason University, Fairfax, VA

Edward Maibach, George Mason University, Fairfax, VA

Paul Dirmeyer, George Mason University, Fairfax, VA

Barry Klinger, George Mason University, Fairfax, VA

Paul Schopf, George Mason University, Fairfax, VA

David Straus, George Mason University, Fairfax, VA

Edward Sarachik, University of Washington, Seattle, WA

Michael Wallace, University of Washington, Seattle, WA

Alan Robock, Rutgers University, New Brunswick, NJ

Eugenia Kalnay, University of Maryland, College Park, MD

William Lau, University of Maryland, College Park, MD

Kevin Trenberth, National Center for Atmospheric Research, Boulder, CO

T.N. Krishnamurti, Florida State University, Tallahassee, FL

Vasu Misra, Florida State University, Tallahassee, FL

Ben Kirtman, University of Miami, Miami, FL

Robert Dickinson, University of Texas, Austin, TX

Michela Biasutti, Earth Institute, Columbia University, New York, NY

Mark Cane, Columbia University, New York, NY

Lisa Goddard, Earth Institute, Columbia University, New York, NY

Alan Betts, Atmospheric Research, Pittsford, VT


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The tragedy in Afghanistan.

I am confident that my readers are aware of the accidental hospital bombing that occurred in Afghanistan. I agree that such incidents require careful investigation, full disclosure of the truth, punishment if needed, and efforts to improve the system so that such errors either never happen again or, at a minimum, are made less frequent than they currently are.

Below is a graph. It is not difficult to interpret. The news media has been covering the hospital catastrophe nearly nonstop. But when one looks at the graph, one must wonder where was the media when the Taliban was attacking aide workers? You have heard about every US misstep, but I want my readers to check their recollections and reply about non US incidents where aide workers were attacked by non-US forces. Can you remember one? I cannot.

Four hundred and thirty and counting. Probably fewer than 5 had anything to do with errors by our military. The International Business Times reviewed such US incidents in Afghanistan and managed to come up with four in which the US erroneously inflicted death.  Only one other involved civilians. The remaining three involved “friendly-fire” deaths of either US military or Afghan military engaged in fire fights at the time of the error (fog of battle, if you will permit).


Roy Filly

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The “death” tax.

It is unlikely that The Rugged Individualist will be affected by the “death” tax – at least as it is currently written. However, this Act has been tinkered with, abolished, and reinstituted so many times it is a joke (see footnote, which, by the by, is only a partial list of “changes” over the years). The Internal Revenue Service defines the estate tax as, “a tax on your right to transfer property at your death.” Usually politicians are better at giving laudatory names (or, at the very least, innocuous names) to “acts” in which they steal and, subsequently, spend your money.

Government has a fundamental obligation to protect your property, not to abscond with it and then redistribute it. John Locke stated that man has a natural right (translate “God-given” if you are so inclined) to life, liberty and property. Our Founders borrowed heavily from the theories of Locke, Jefferson in particular. Jefferson modified “property” to “the pursuit of happiness” – more eloquent but less definable. Locke expressed the radical view (at the time) that government is morally obliged to serve people, namely by protecting these three enumerated rights. (Locke explained the principle of checks and balances to limit government power. He favored representative government and a rule of law. He insisted that when government violates individual rights, people may legitimately rebel. These views were most fully developed in Locke’s famous Second Treatise Concerning Civil Government, and they were so radical that he never dared sign his name to it. He acknowledged authorship only in his will.) Maybe The Rugged Individualist is a fool to sign his name to this post!

The degree of “tinkering” with the “death tax” enumerated in the footnote says that this form of taxation is unpopular except with a certain segment of the political class. What segment of the political class is that, ask you? That segment, answer I, which decries “the perpetuation of inequality due to inherited wealth.” The believe they are much more qualified to distribute your accumulated wealth than you are.

However, as with nearly all progressive/statist/altruist notions of governence, the estate tax does not accomplish its goals.

[Source: Mike Gajewsky, “How the Shale Gas Boom Creates Estate Tax Problems for Farmers,” National Center for Policy Analysis]

The estate tax is ineffective in reducing inequality; it does, however, excel at destroying family business, especially agricultural operations. Unlike investments and cash, real estate cannot be as easily placed into trust. Thus, American farmers and small business owners are hardest hit by the tax, while cash-rich Americans avoid it.

The shale gas revolution has created economic booms from Pennsylvania to Texas to North Dakota, but it is a mixed blessing for American farmers. The sudden influx of money to rural areas is increasing the wealth of farms in America and complicating estate tax calculations for farmers.

  • Many farm estates have increased in value due to the mineral rights to the land. Farmers saw land values appreciate immediately upon signing leases with natural gas producers and land values have continued to rise. In both Texas and Pennsylvania, land values increased from 1997 to 2012, even after several years of drilling.
  • The increase in land value due to the demand for mineral leases was followed by increases in farm estate values, as many farmers invested their royalties from gas extraction back into their farms. The Federal Reserve Bank of Kansas estimates that three-fourths of farms’ wealth accumulation from energy payments are through increases in land values.

As the U.S. Senate begins debate over the estate tax, it is obvious the stakes are higher than ever. With farms in Pennsylvania and Texas experiencing 10 percent or greater increases in household wealth, the estate tax is a continuing threat to farm families’ ability to pass their farms to their children.

I object to all forms of double taxation. One can effectively argue that taxes on estates or inheritance have already been paid; therefore, it should be distributed to the beneficiaries tax-free.

Here are other reasons this tax is ineffectual and unfair and should be eliminated:

These facts show that the progressive/statist/altruist notions of the “reasons” for this tax are ineffectual. It is time to end the estate tax.

Roy Filly


In the Revenue Act of September 8, 1916, as the United States was on the brink of entering World War I, Congress enacted the current estate tax, imposed at rates of 1 percent to 10 percent on taxable estates over $50,000.

In the Act of March 3, 1917, the rates were generally increased by half, to levels of 1½ percent to 15 percent.

In its version of the Revenue Act of 1926, when the gross rates ranged from 1 percent to 20 percent, the House of Representatives raised the state death tax credit to 80 percent of the basic tax, while the Senate version would have repealed the estate tax.

1. Taxation of appreciation at death or at the time of gifts (carryover basis enacted in 1976, repealed in 1980, and enacted again in 2001, effective only for 2010).

2. Unification of the gift and estate taxes. a. Same rates (1976). b. Same base – tax-inclusive (1976, for gifts within three years of death). c. Single exemption (1976 – until 2004). d. Abolition of the “gifts in contemplation of death” rule (1976).

3. Unlimited marital deduction, including income interests (1981).

4. Repeal of the exclusion of interests in qualified retirement plans (1984).

5. More explicit rules governing disclaimers (1976).

6. An “orphan exclusion” equal to the amount of the gift tax annual exclusion multiplied by the number of years by which the orphan is under 21 (roughly in 1976 – repealed in 1981).

7. Tightening of the deduction rules for transfers to charity (1969)

I think you get the point. I could list many more “revisions.”

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Recent jobs report. Some “hidden” facts.

The Obama “recovery” seemed to be plodding along. It was dismal but not as dismal as most of the world. The “unemployment rate,” a number to be taken with a grain of salt, was holding fast at 5.1%.  The current jobs report didn’t change the unemployment rate upward despite its disappointing numbers.

However, there was no opportunity for the Obama administration to put lipstick on this particular pig.

[Source: Recession Watch, by John Mauldin]

The jobs report on Friday was just ugly. Private payrolls increased by just 118,000, which is about the minimum level needed for unemployment not to rise. Government payrolls added 24,000. There were serious downward revisions to the last two months, as well. August was taken down by 37,000 jobs, and July was reduced by 22,000. The last three months have averaged just 167,000 new jobs compared to 231,000 for the previous three months and 260,000 for the six months prior to that.

My friend David Rosenberg dug a little deeper into the numbers and noted:

Adding insult to injury and revealing an even softer underbelly to this report was the contraction in the workweek to 34.5 hours from 34.6 hours in August, which is effectively equivalent to an added 348,000 job losses. So take the headline number, tack on the downward revisions and the loss of labour input from the decline in the workweek, and the “real” payroll number was [a minus] 265,000. You read that right…

While the unemployment rate remained at 5.1%, it did so largely because of a significant drop in the labor participation rate, which is not a good way to enhance employment. Further, the U-6 unemployment number is still a rather depressing 10%. Those are the people who are working part-time but would like full-time jobs, as well as discouraged and marginally attached workers. Very few part-time jobs pay enough to finance a middle-class lifestyle.

What will the Obama administration propose, ask you? Undoubtedly they will propose further Keynesian spending, probably on “shovel ready” infrastructure projects, answer I. They have no new cards to play.

Roy Filly

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Social Security. What to do?

Everyone that reads my posts (or even a newspaper) knows that Social Security is doomed to fail under its current construction. We should have “privatized” Social Security a long time ago. But that ship has sailed.

Social Security ran a $71 billion deficit in 2013, closing out four years of consecutive cash-flow deficits as the program’s unfunded obligations continue to grow. According to the 2014 annual report from the programs’ trustees, the combined 75-year unfunded obligation of the Social Security and Disability Insurance Trust Funds (referred to collectively as the OASDI Trust Fund) is $13.4 trillion. The combined Social Security and Disability Insurance programs, known as OASDI, are projected to become insolvent in 2033.

Corporate America has already faced this issue with their retirement plans for employees. They realized some time ago that they would not be able to meet their obligations if they persisted in using what are termed “defined benefit plans.”

A defined benefit pension plan is a type of pension plan in which an employer/sponsor promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earnings history, tenure of service and age, rather than depending directly on individual investment returns. Essentially, this is how Social Security is modeled.

Many public sector employers have instead placed new employees in a defined contribution (DC) plan.  In a typical DC plan, workers are promised a certain level of annual employer contributions to individual accounts. But only two states and a handful of cities currently use a DC plan for new employees. When state and local governments consider adopting DC plans for new employees, they encounter opposition from organized labor, current public-retirement system managers, and consultants that support public defined benefit (DB) plans. Quelle surprise!

[Source: Josh McGee, “Defined Contribution Pensions Are Cost-Effective,” Manhattan Institute]

The critical difference between DC plans and DB plans is not necessarily in whether employers or employees contribute to the fund, how the assets are invested, but in who bears the investment risks in the timing of benefit promises and payouts—the employee or the taxpayer?

A study from the Manhattan Institute examined the effectiveness of both the defined contribution retirement (DC) plans and defined benefit retirement (DB) plans.  Key findings included:

  • DB plans are not structurally more cost-effective than DC plans. Claims of the superior efficiency of DB plans are not supported by empirical evidence.
  • DC plans achieve similar investment returns. Between 1995 and 2012, average estimated ten-year performance differences between DB and DC plans — at the mean, median, 25th, and 75th percentiles — were less than half a percentage point and were generally not statistically significant.
  • DC plans can — and do — offer annuities. The limited availability of annuities among private-sector DC plans is largely the result of misguided federal regulation.
  • Pension debt is a significant cost driver for DB plans. DC plan critics generally ignore the cost of carrying pension debt — one of DB plans’ largest cost drivers — in comparisons.
  • DC plans are a good option for providing retirement security.  Most current DC plans include a number features — including well-designed, diversified, professionally managed investment products.

The defined contribution plan has two features that the Rugged Individualist loves. First, the individual participates in providing for their retirement – but not through the federal government or forced taxation (of course if Social security went this route there would still be forced taxation of both the individual and the company for whom the employee worked). Second, it eliminates these massive unfunded liabilities.

Roy Filly

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Waste, fraud, and abuse.

How many times have you heard politicians promise to end “waste, fraud, and abuse?” Is there a single politician in Washington who has not made that promise? Of all the lies these individuals tell, this one is the biggest whopper!

[Source: GAO: Feds made nearly $1 trillion in overpayments since fiscal 2003, by Elizabeth MacDonald]

Government waste took a significant turn for the worse in fiscal 2014, rising dramatically to $124.7 billion from $105.8 billion in fiscal 2013. 

That’s a striking increase of nearly 20 percent in improper federal payments. As the White House and Congress continues to blow out the federal deficit to $18 trillion in their Miracle-Gro, “Supersize Me” approach to government, little is being done to stop federal overpayments. Since fiscal 2003, “cumulative improper payment estimates have totaled almost $1 trillion,” the Government Accountability Office (GAO) said in a new report.

U.S. Comptroller General Gene Dodaro testified Thursday on the GAO’s new findings ( before the Senate Finance Committee.

In total, overpayments accounted for approximately 90 percent of the federal government’s improper payment estimate, the GAO said. The waste spans 24 federal programs across 22 government agencies… (Here is where I differ from most. Most Americans see this problem in dollars, “cumulative improper payment estimates have totaled almost $1 trillion.” I see the problem as, “24 federal programs across 22 government agencies.” Our government is TOO BIG! – RF) 

The GAO said three programs were most at fault: Medicare, Medicaid and the Earned Income Tax Credit (EITC). These three government programs were responsible for a full three-quarters of the nearly $19 billion in erroneous payments the federal government made in fiscal 2014, the GAO said.

“Improper payments remain a significant and pervasive government-wide issue,” the congressional watchdog unit warned.

The Earned Income Tax Credit program was the worst offender. (Let us not forget that Republicans LOVE the EITC.It is their brand of “redistribution – RF.)

The Internal Revenue Service estimated that the program erroneously handed out $17.7 billion worth of “improper” payments. That amounts to a whopping 27.2 percent of the total $65.2 billion in EITC refund checks that the IRS sent out in fiscal 2014.

And that means the federal government is now fast approaching the day when one out of every three earned income tax credits is erroneous.

Medicare was nearly as bad. The program, which covers about 54 million elderly and disabled beneficiaries, incorrectly doled out $59.9 billion in fiscal 2014, which is about a tenth of its $603 billion budget.

So, one out of every $10 that Medicare spent last year was erroneous, the GAO found. Medicaid made $17.5 billion in mistaken payments out of its $304 billion budget, for a nearly 6 percent error rate. 

Besides the EITC program, the federal programs with the highest reported error rates for fiscal 2014 included the School Breakfast program (25.6 percent) and the Farm Security and Rural Investment Act Programs (23.1 percent)…

Most glaring is the fact that the federal government still can’t gauge how bad the problem is.

“GAO has reported for several years that the federal government is unable to determine the full extent to which improper payments occur and reasonably assure that actions are taken to reduce them,” its report said.

Why did the GAO only go back to 2003, ask you? Because, answer I, the Improper Payments Information Act was only passed in 2002. Therefore, federal agencies only began to report the improper payments in 2003. Before then our too-big government didn’t even bother to look! (The exceptions were a few Senators who investigated on their own – e.g. Senator Tom Coburn).

Roy Filly

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Statistics from Middle East conflicts. Some perspective.

American presidents and the United Nations have been trying to solve the Israeli-Palestinian conflict for 67 years – that is when Israel became an independent nation following the War of Independence in 1948. As it turns out, however, that conflict is the smallest conflict in the Middle East.

[Source: The hypocrisy if boycott, by Yair Lapid]

In the 67 years that have transpired since Israel became a state, 12,000 Palestinians have been killed. Without question more Palestinians have been killed than Israelis. Without question some of these were innocent civilians. No one, and certainly not I, want innocent civilians killed. However, one must admit that a percentage (you may choose the number) were killed as their suicide vest blew up or as they battled Israeli military in the Golan Heights or when the tunnel collapsed as they dug their way into Israel to do unspeakable acts. I suspect that more than half were terrorists from various jihadist organizations, but that is my opinion‫.

But the issue requires some perspective. More innocent Syrians were killed in one week during the current Syrian civil war than innocent Palestinians during the 67 years of the Israeli-Palestinian conflict. Israelis didn’t kill those innocent Syrians. Muslim extremists or Muslim autocrats killed them. In fact, in that same 67-year period approximately 12 million people were killed in Arab world conflicts. A simple calculation shows that the Israeli-Palestinian conflict caused 0.01% of the numbers killed in these Islamic conflagrations.

According to the United Nations, there are currently 3.8 million Palestinian refugees and their descendants. It is not an easy number to compute as “Palestine” was a “place,” not a “nation” in 1948. At the end of the war, the Israeli government set the number of Palestinian refugees at 550,000-600,000; the British Foreign Office leaned toward the higher end of this estimate. But within a year, as large masses of people sought to benefit from the unprecedented influx of international funds to the area, some 962,000 alleged “refugees” had been registered with the newly-established UN Relief and Works Agency (n.b., the current estimate includes their descendants).

If, on the other hand, one looks at the treatment of Christians under Islamic-led nations, the numbers – particularly when viewed as a percentage of the total population – are horrific.

Almost 1.5 million Christians lived in Iraq under Saddam Hussein. With the rise of Islamic State, the vast majority of the country’s Christians are believed to have fled Iraq or died in sectarian conflict. Of the 300,000 Christians (20% of the original population) remaining in 2014, some 125,000 (an additional 42%) have been driven from their homes within the past year. That means that more than 88% of the Christian that lived in Iraq just 12 years ago are either dead of refugees. The Israelis didn’t do this.

Almost a third of Syrians were Christian as recently as the 1920s, but only about 10% of the country’s 22 million inhabitants at the onset of the current civil war were members of Christian communities. That long and slow relative decline has accelerated as hundreds of thousands of desperate Christians flee the fanaticism of Islamist rebels and the brutality of the al-Assad’s regime.

The carnage wrought by the Ottoman Empire occurred earlier than the Israeli-Palestinian conflict but by less than two decades. The Ottoman Empire’s well-known genocidal violence against the Armenians during World War I was accompanied by similarly brutal and widespread mass murders of Assyrian Christians. And in the 1930s, in the ethnic and nationalist turmoil following the fall of the Ottomans, tens of thousands of Iraqi Christians were murdered in riots and massacres.

Maybe we can simply agree that this is a tough neighborhood. Choosing out the Israeli-Palestinian conflict as the focal point seems not to be based on rational thinking. Yes, more Palestinians died than Israelis. However, the difference is almost exclusively due to the Israelis having a better army and having the Iron Dome system to protect its cities from rockets. Imagine that the Israeli military laid down its weapons and disarmed the Iron Dome. What do you think would happen to those fatality statistics and how long do you think it would take for the proportions to change drastically?

And thanks to PCoop for getting me interested in this topic.

Roy Filly

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Economics (on a single page).

What makes economics most fascinating is that its fundamental principles are so simple that they can be written on one page, that anyone can understand them, and yet very few do.

Milton Friedman

The following are from two articles written by Dr. Mark Skousen. He is an economist at Rollins College and editor of Forecasts & Strategies, one of the largest investment newsletters in the country. In seventeen points he outlines the fundamentals of economics. The sad thing is that it appears our massive government disregards at least 16 of them. And thanks to Conservative Principles and Activism for forwarding this to me.

The above statement by Friedman got me thinking: Is it possible to summarize the basic principles of economics in a single page… ? In fact, one professor even suggested to me that economics can be reduced to one word: price. Or maybe, I suggested alternatively, cost. Everything has a price; everything has a cost.

Sound economic policy is straightforward: Let the market, not the state, set wages and prices. Keep government’s hands off monetary policy. Taxes should be minimized. Government should do only those things private citizens can’t do for themselves. Government should live within its means. Rules and regulations should provide a level playing field. Tariffs and other barriers to trade should be eliminated as much as possible. In short, government governs best which governs least…

On the following page is my attempt to summarize the basic principles of economics and sound economic policy. If anyone has any suggested improvements, I look forward to receiving them.

Economics in One Page

by Mark Skousen

  1. Self-interest: The desire of bettering our condition comes with us from the womb and never leaves till we go into the grave (Adam Smith). No one spends someone else’s money as carefully as he spends his own.
  2. Economic growth: The key to a higher standard of living is to expand savings, capital formation, education, and technology.
  3. Trade: In all voluntary exchanges, where accurate information is known, both the buyer and seller gain; therefore, an increase in trade between individuals, groups, or nations benefits both parties.
  4. Competition: Given the universal existence of limited resources and unlimited wants, competition exists in all societies and cannot be abolished by government edict.
  5. Cooperation: Since most individuals are not self-sufficient, and almost all natural resources must be transformed in order to become usable, individuals—laborers, landlords, capitalists, and entrepreneurs—must work together to produce valuable goods and services.
  6. Division of labor and comparative advantage: Differences in talents, intelligence, knowledge, and property lead to specialization and comparative advantage by each individual, firm, and nation.
  7. Dispersion of knowledge: Information about market behavior is so diverse and ubiquitous that it cannot be captured and calculated by a central authority.
  8. Profit and loss: Profit and loss are the market mechanisms that guide what should and should not be produced over the long run.
  9. Opportunity cost: Given the limitations of time and resources, there are always trade-offs in life. If you want to do something, you must give up other things you may wish to do. The price you pay to engage in one activity is equal to the cost of other activities you have forgone.
  10. Price theory: Prices are determined by the subjective valuations of buyers (demand) and sellers (supply), not by any objective cost of production; the higher the price, the smaller the quantity purchasers will be willing to buy and the larger the quantity sellers will be willing to offer for sale.
  11. Causality: For every cause there is an effect. Actions taken by individuals, firms, and governments have an impact on other actors in the economy that may be predictable, although the level of predictability depends on the complexity of the actions involved.
  12. Uncertainty: There is always a degree of risk and uncertainty about the future because people are often reevaluating, learning from their mistakes, and changing their minds, thus making it difficult to predict their behavior in the future.
  13. Labor economics: Higher wages can only be achieved in the long run by greater productivity, i.e., applying more capital investment per worker; chronic unemployment is caused by government fixing wage rates above equilibrium market levels.
  14. Government controls: Price-rent-wage controls may benefit some individuals and groups, but not society as a whole; ultimately, they create shortages, black markets, and a deterioration of quality and services. There is no such thing as a free lunch.
  15. Money: Deliberate attempts to depreciate the nation’s currency, artificially lower interest rates, and engage in easy money policies inevitably lead to inflation, boom-bust cycles, and economic crisis. The market, not the state, should determine money and credit.
  16. Public finance: In all public enterprises, in order to maintain a high degree of efficiency and good management, market principles should be adopted whenever possible: (1) Government should try to do only what private enterprise cannot do; government should not engage in businesses that private enterprise can do better; (2) government should live within its means; (3) cost-benefit analysis: marginal benefits should exceed marginal costs; and (4) the accountability principle: those who benefit from a service should pay for the service.

Below is another interesting concept from Dr. Skousen.

Gross Output, long advocated by Mark Skousen, will have a profound and manifestly positive impact on economic policy and politics. He deserves the Nobel Prize for his work!

Steve Forbes

(To get a true feel for the economy one needs to look) not only at the company’s bottom line, or earnings, but how it achieves those earningsthe company’s top line, or sales/revenues. No good analyst on Wall Street looks only at earnings. Top-line sales is essential. And sometimes sales and earnings can move in opposite directions.

The same holds true in looking at the economy. Good economists need to look not only at the value of final output, known as gross domestic product (GDP). They also should look at how the final output was achieved by measuring the stages of production, or the supply chain.

Good news! Last year was a watershed time in this regard. In 2014, the U.S. government began publishing a quarterly statistic called Gross Output (GO), which measures the top line of the economy — sales/revenues at all stages of production. It amounted to more than $31 trillion last year. The government (Bureau of Economic Analysis (BEA), a part of the U.S. Department of Commerce) has published GDP every quarter for years. GDP is equivalent to the bottom line, a measure of value added, or earnings, of the whole economy.

Only last year did the government decide to measure the top line of the economy, sales throughout the supply chain, what we might call business to business (B2B) transactions. Welcome to the 21st century!

I like it. GDP is $17.9 trillion and Gross Output is $31 trillion. Does that mean that US “profit” was 57% (17.9/31)? If so, that is remarkable. Or does it mean the efficiency of our market is 57%? Either way it sounds reasonably impressive. If you know, please comment.

Roy Filly

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