Department of Offense

Jul 08 2011

Why did Bernie Madoff go to prison?

Why did Bernie Madoff go to prison? To make it simple, he talked people into investing with him. Trouble was, he didn’t invest their money. As time rolled on he simply took the money from the new investors to pay off the old investors. Finally there were too many old investors and not enough money from new investors coming in to keep the payments going.

Next thing you know Madoff is one of the most hated men in America and he is off to jail.

Some of you know this. But not enough of you. Madoff did to his investors what the government has been doing to us for over 70 years with Social Security. There is no meaningful difference between the two schemes, except that one was operated by a private individual who is now in jail, and the other is operated by politicians who enjoy perks, privileges and status in spite of their actions.

Do you need a side-by-side comparison here? Well here’s a nifty little chart.

BERNIE MADOFF	SOCIAL SECURITY
Takes money from investors with the promise that the money will be invested and made available to them later.	Takes money from wage earners with the promise that the money will be invested in a “Trust Fund” (Lock Box) and made available later.
Instead of investing the money Madoff spends it on nice homes in the Hamptons and yachts.	Instead of depositing money in a Trust Fund the politicians transfer it to the General Revenue Fund and use it for general spending and vote buying.
When the time comes to pay the investors back Madoff simply uses some of the new funds from newer investors to pay back the older investors.	When benefits for older investors become due the politicians pay them with money taken from younger and newer wage earners to pay the older geezers.
When Madoff’s scheme is discovered all hell breaks loose. New investors won’t give him any more cash.	When Social Security runs out of money the politicians try to force the taxpayers to send them some more; or they cancel S/S to all those who paid into it.
Bernie Madoff is in jail.	Politicians remain in Washington .. with fat medical and retirement benefits.

“If you put the federal government in charge of the Sahara Desert , in five years there’d be a shortage of sand.

~ Milton Friedman

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Jul 06 2011

Welfare

Published by admin under Government

Forty-four million Americans are on food stamps — up from 26 million in 2007. Spending on the program has more than doubled as well, to $77 million. Meanwhile, reports of abuse have skyrocketed.

It’s not the only anti-poverty program that seems to be growing like Topsy while accomplishing little. The federal government currently runs over 70 different means-tested programs providing cash, food, housing, medical care and social services to poor and low-income persons. They cost nearly $1 trillion per year — more than the 2009 stimulus package and no more successful.

Adjusted for inflation, welfare spending is 13 times higher today than it was in 1965, when Washington launched the War on Poverty. Yet the proportion of people living in poverty remains essentially unchanged.

In Vindicating the Founders, Thomas West notes that:

In 1947, the government reported that 32 percent of Americans were poor. By 1969 that figure had declined to 12 percent, where it remained for ten years. Since then, the percentage of poor Americans has increased to about 15 percent. In other words, before the huge growth in government spending on poverty programs, poverty was declining rapidly in America.

So what was driving down poverty rates before LBJ declared “war”? Let’s go back to the beginning.

Our nation’s founders recognized the need to take care of the sick and indigent who couldn’t help themselves. Quoting natural rights philosopher John Locke, West writes that “[T]he law of nature teaches not only self-preservation but also preservation of others, ‘when one’s own preservation comes into competition.’” In other words, society is organized for the security of its members as well as their liberty and property. A society that fails to respond to those in need jeopardizes its own preservation.

In the early days of the American experiment, local governments — not the feds — assumed this responsibility. But there was careful emphasis that “poor laws not go beyond a minimal safety net,” West notes, and that aid be provided only on the condition of labor. Only the truly helpless, those “who had no friends or family to help, were taken care of in idleness.”

The founders saw a great danger in overly generous welfare policy — that it would promote irresponsible behavior. That, in turn, would threaten the inherent natural right of every individual “to liberty, including the right to the free exercise of one’s industry and its fruits.”

Contrast that with today’s anti-poverty measures. Of 70 federal welfare programs, only one — Temporary Assistance for Needy Families (TANF) — actively encourages greater self-reliance. The remaining 69 encourage irresponsible behavior. Unsurprisingly, abuse of the system is rampant. Food stamp recipients sell benefit cards on Facebook, then falsely report lost cards. And recipients include prison inmates as well as millionaire lottery winners.

Our founders would not be surprised. While living in Europe in the 1760s, Franklin observed: “in different countries … the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”

Similarly, Jefferson argued that “to take from one … in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

This is why the founders encouraged reliance upon family, private charity and community. This approach ensured that aid to the needy was provided as personally as possible. Family and community can make crucial distinctions between the deserving and undeserving poor, whereas government cannot. Many individuals, for example, need a government handout far less than they need moral guidance and correction, which church groups and family can provide.

Throughout the latter half of the 20th century, however, the War on Poverty turned these concepts on their head. Incentives for self-reliance, industry and hard work were reversed. Programs offering financial aid and child care to single women incentivized single-parent households while discouraging marriage. By 1995, a non-working, single mother of two was eligible for benefits equivalent to a job paying close to (and in some states, even more than) the average salary. Small wonder the decline in poverty rates was checked.

America needs to return to the principles that worked so successfully before Washington embraced the European welfare state model. As Benjamin Franklin wrote, with sound poverty policy, “industry will increase … circumstances [of the poor] will mend, and more will be done for their happiness by inuring them to provide for themselves.”

David Weinberger is communications coordinator at The Heritage Foundation.

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Jun 30 2011

Entitlements … em em good

Published by admin under Government

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Jun 01 2011

Our Money

Published by admin under Government

Our Money to Muslim/Arab NationsPosted on 05/31/2011

While America’s standing in the Middle East couldn’t get much lower, you wouldn’t know it looking at the U.S. foreign aid budget. Of proposed U.S. assistance for 2012, almost two-thirds is earmarked for Muslim nations and one-third goes to Arab countries.

Yet, despite those billions in aid, opinion polls show most Arab citizens still have an unfavorable view of America and most Muslim nations routinely vote against U.S. interests in the United Nations.

“If we are giving money to countries consistently voting against our interest, we ought to cut them off,” says Congressman Steve Chabot (R-OH) who sits on the House Foreign Affairs Committee. “But Congress is going to need to get some backbone here because it consistently gives Presidents the ability to waive the cutoff of that money.”

Years ago, U.N. Ambassador John Bolton proposed cutting off all aid to the 30 nations who consistently voted against the U.S. in the UN. Before him, President Reagan’s U.N. Ambassador Jeane Kirkpatrick proposed cutting off $1 million in aid for each vote an aid recipient cast against the U.S. in the U.N. In both cases, Bolton says the State Department overruled them.

“Foreign aid to a lot of countries could be readily cut and I think it’s been a mistake by the U.S. government for decades not to take U.N. voting into account,” Bolton said Monday.

This document, released by the State Department, examines 13 critical votes in the UN in 2010.

Compare that to this list of US aid recipients for 2012 and this poll released last week by the Pew Research Center Global Attitudes Project.

The result: some of the largest recipients of U.S. taxpayer money over the last 6 budget years consistently vote against the U.S. and harbor negative or unfavorable views of America.

Some other Muslim countries show almost no friendship or allegiance to the U.S. but continue to see the State Department shower them with money.

Algeria has received $60 million and votes with the U.S. just 16% of the time. Oman $74 million, 18% voting coincidence. Whereas the Palestinian Territories received $3 billion dollars yet just 18% have a favorable view of the U.S.

“The U.S. has to quit being kicked around. We need to quit sending our tax dollars to countries that do not have our best interests in mind, especially in these economic times,” says Chabot.

Instead, if you look at U.S. aid over time, it’s largely on auto-pilot. Once a nation is on the U.S. gravy train, few are ever cut off, regardless of their loyalty, gratitude or actions.

This link allows you to see who gets aid and where it goes.

In our analysis of the numbers, of the President’s 2011 foreign assistance request of $34.5 billion, 60% or $20.1 billion goes to Muslim nations, or those where a majority practice Islam. About 33% or the total budget, or $11.6 billion is awarded to Arab countries.

And while many Americans think most U.S. foreign aid goes to “humanitarian assistance” or food and medicine for the poor, an analysis shows 80% of our aid to Arab countries pays for police and the military. And despite the President’s speech last week calling for closer ties with Middle Eastern nations and fostering free market, democratic principles, just 5% of our aid to the region is dedicated to ‘economic development’.

While some suggest our support for repressive, autocratic regimes explains America’s poor poll numbers, and should be discontinued, Bolton has a different view.

While conceding a reform of U.S. foreign aid is “way overdue” he says, “I don’t think the opinions you see in foreign countries should govern where the aid goes. It should be based on what is in our interest not what is in their interest.”

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May 30 2011