Ebola Ruminations

A few ruminations and observations about Ebola as I have seen the news develop over the last few weeks.

The Math

I appreciate and respect the compounding effects of mathematics. This is the main concern I have had about Ebola from the beginning. It is beyond me why anyone who looked at the serious nature of this disease and considered the risk from the mathematics from exposure to it would have allowed anyone from West Africa into this country as President Obama did.

It borders on criminal negligence. It certainly fails the basic test of the President of the United States whose first duty should be to protect the citizenry of the United States of America.

Consider this graphic comparing how fast Ebola spreads and how deadly it is compared to other diseases in the Washington Post article of October 9, "The Ominous Math of Ebola".

There is simply too much risk to the population to not take the most basic measures to contain the disease.

If you will recall it was President Obama who stated less than a month ago "that the chances of an Ebola outbreak here in the United States are extremely low".  That statement was just three days before Thomas Eric Duncan bordered a flight to the United States and nine days before he first sought treatment at a hospital in Dallas.

The CDC

I went to law school at Emory University in Atlanta which is a stone's throw away from the Center for Disease Control in Atlanta. I knew people that worked there and had a lot of respect for them. When I go back to Atlanta it is amazing to see how much the CDC complex has grown since I graduated in the 1970's.

However, when I look at how the entire Ebola crisis has been handled I have to ask what is going on there now?  It appears as if they have no idea what they are doing starting with the Director of the CDC, Dr. Tom Frieden. It seem to be a constant flow of mistakes, misstatements, mea culpas and contradictions.

These are a few examples of what I am talking about.

Contradictions

Dr. Tom Frieden, director for the Center for Disease Control and Prevention (CDC), said during a telephone press briefing Wednesday that you cannot get Ebola by sitting next to someone on a bus, but that infected or exposed persons should not ride public transportation because they could transmit the disease to someone else. Ace of Spades

Mistakes

The day before she went to the hospital with Ebola symptoms, Amber Vinson was flying across the country on a commercial jet with 132 other people.

Now the man leading the U.S. fight against the deadly virus says she never should have stepped foot on the flight.

"She should not have been on that plane," Centers for Disease Control and Prevention Director Dr. Tom Frieden said Wednesday after the nurse was confirmed to have Ebola. CNN

We found out later that the nurse got on the plane with a low-grade fever. Even more incredibly, it is now reported that the nurse called the CDC before she got on the Cleveland-Dallas flight and told them she had a 99.5 degree temperature and was told she could get on the flight anyway. I am a total loss to explain any of this from what is supposed to be the Center for Disease Control.


Misstatements

Frieden blamed the first nurse who contracted Ebola while caring for Thomas Eric Duncan on a "breach of protocol" effectively throwing the young nurse under the bus.

"We don't know what occurred in the care of the index patient, the original patient in Dallas," said Frieden in a press conference Sunday morning, "but at some point, there was a breach in protocol, and that breach in protocol resulted in this infection." Breitbart.com 

Frieden eventually apologized for suggesting the nurse who contracted Ebola was to blame and admitted that the agency had to 'rethink' how to combat the deadly virus.

It should also be remembered that Frieden stated just two weeks ago that "any U.S. hospital with isolation capabilities can care for an Ebola patient." With two nurses at Texas Presbyterian Hospital in Dallas (by the way, this is a 900 bed facility in a major metro area) already infected, you have to say that this is the biggest misstatement of them all from this guy.


Mea Culpas

Frieden says that the CDC didn't get it right at first but they will do it better in the future.

The director of the Centers for Disease Control and Prevention (CDC) on Tuesday said a Dallas nurse diagnosed with Ebola might not have gotten the virus if the response from the federal government had been different.

CDC Director Tom Frieden pledged to dispatch emergency response crews to any hospital in the country where Ebola is diagnosed, and said such a response might have prevented Nina Pham from getting the disease.

“I wish we had put a team like this on the ground the day the first patient was diagnosed. That might have prevented this,” Frieden said. “But we will do that from this day onward with any case anywhere in the U.S.” TheHill.com

It will be amazing to me if Dr. Frieden is not forced to resign soon. He makes Mike Brown ("Brownie, you're doing a heckuva job"), the FEMA Director during Katrina who was forced out after missteps in the aftermath of that hurricane, look like a genius.

The Role of Government

Many see the government response to the Ebola outbreak and argue that this is another example of why we should not rely on government. I could not disagree more.

When you have something like Ebola you need government more than ever. However, you need a thoughtful, competent government that is focused first and foremost on the safety and security of its citizens. Public health is a core function that only government can do well. This is when you need to have the structure, order and security support that only a well-functioning government can provide.

Our problem is that this is not the government we have been getting. Our government has been focused on all the wrong things. It has been more concerned with redistribution and political correctness than in true government and the safety of its citizens. 

I have written previously how almost 70% of the federal budget is now comprised of payments to individuals and that in ten years payments to individuals and interest costs will consume 93% of the federal budget. Only 7% will be spent on the traditional roles of government (defense, roads, parks, public health, education, etc).  As I have stated, a government that is not spending any money on government is not a government.

Look no further than the budget of the CDC over the last few years and how it has spent money from its Prevention and Public Health Fund.  Gov. Bobby Jindal of Louisiana provides the facts. Jindal knows something about this subject as he used to be the principal policy adviser to the Secretary of Health and Human Services.

Consider the Prevention and Public Health Fund, a new series of annual mandatory appropriations created by Obamacare. Over the past five years, the CDC has received just under $3 billion in transfers from the fund. Yet only 6 percent—$180 million—of that $3 billion went toward building epidemiology and laboratory capacity. Especially given the agency’s postwar roots as the Communicable Disease Center, one would think that “detecting and responding to infectious diseases and other public health threats” warrants a larger funding commitment.

Instead, the Obama administration has focused the CDC on other priorities. While protecting Americans from infectious diseases received only $180 million from the Prevention Fund, the community transformation grant program received nearly three times as much money—$517.3 million over the same five-year period.

The CDC’s website makes clear the objectives of community transformation grants. The program funds neighborhood interventions like “increasing access to healthy foods by supporting local farmers and developing neighborhood grocery stores,” or “promoting improvements in sidewalks and street lighting to make it safe and easy for people to walk and ride bikes.” Bike lanes and farmer’s markets may indeed help a community—but they would do little to combat dangerous diseases like Ebola, SARS or anthrax.

You read that right. Of $3 billion spent by the CDC out of its Prevention and Public Health Fund over the last five years, three times as much money was spent on community transformation grants (healthy foods, inner city grocery stories, bike lanes and street lighting) as was spent on programs protecting, detecting and responding to infectious diseases and other public health threats.

If that is not putting politics above public health I don't know what it is.

The problem is not government, it is the current government and leaders we have. It is having the wrong priorities and the wrong policies.

The Fourth Turning

I have written so often about the book, The Fourth Turning, that I am sure many of my readers are sick of me writing about it.

However, once again, William Strauss and Neil Howe seem prescient on what lies ahead. This is what they wrote in 1997 about a possible crisis scenario that could await us in "The Fourth Turning".

The Center for Disease Control and Prevention announce the spread of a new communicable virus. The disease reached densely populated areas, killing some. Congress enacts mandatory quarantine measures. The president orders the National Guard to throw prophylactic cordons around unsafe neighborhoods. Mayors resist. Urban gangs battle suburban militias. Calls mount for the President to declare martial law. (Page 273)

Ben Franklin said that "an ounce of prevention is worth a pound of cure." I guess someone forgot about that along the way in our government.

Keep in mind that there were a long string of decisions by "the government" that were made along the way that could have prevented the situation we are in today. We could have banned anyone from West Africa from entering the country beginning a month ago. In fact, this article indicates that Duncan should never been issued a tourist visa to begin with based on his profile-unemployed, single, and sister living in the U.S-because the odds were strong that he would overstay his visa and become another illegal immigrant. We could have spent money on Ebola prevention at the CDC rather than bike paths and farmers markets in urban areas. We could have made sure the nurses at Texas Presbyterian had the equipment and training to treat Duncan. The list is long.

Just another example of why we need to return to the founding principles set forth by our founding fathers that focused government on government.

I just hope my ruminations about Ebola can end soon and we can hold off any ruin. If not, more and more people will rue the day that Barack Obama was elected President of the United States.

The Perils of Partisanship

Many people point to increasing partisanship in Washington for their dissatisfaction with the state of affairs in Washington with our elected officials.

These charts from Congressional Quarterly show the extent to which partisanship has become the rule rather than the exception in Washington compared to years past.  All of this can be found in CQ Roll Call's Vote Studies-2013 In Review.

For example, Senate Democrats voted together unanimously 52% of the time in 2013. There were no dissenting opinions or independent thinking by Democrats more than half of the time. Republicans voted as a bloc about 1/3 of the time.

Democrat=Blue, Republican=Red
Party Unanimity in the Senate

Notice that up until 1990 it was rare that either party voted unanimously together more than 10% of the time.

Here is the chart showing party unanimity in the House. The GOP voted together 35% of the time in 2013. The Democrats voted as a bloc 22% of the time.

Democrat=Blue, Republican= Red
Party Unanimity in the House

You see the same trends in average party unity scores.  This is the percentage of votes on which a member voted in agreement with a majority of his or her own party.

Senate Democrats set a record in 2013 with a 94% average party unity score. The comparable Republican score was 86%.

Democrat=Blue, Republican=Red
Average Party Unity Scores, Senate

It is important to look at this data as we have most of the Democratic Senate candidates across the country trying to desperately separate themselves from President Obama going into the mid-term elections this year.

However, the facts are clear that Democrats have supported Obama's agenda in an overwhelming fashion. They have also voted as a bloc for the liberal, progressive Democratic agenda like never before.

Let's look at the voting records of some of the Democrats who are now claiming that they hold far different views than President Obama as they run for re-election this year. Don't they know that their votes are recorded and reviewed?

Senator Mark Begich (D-Alaska) voted for Obama's position 97% of the time in 2013.

Senator Mary Landrieu (D-Louisiana) 97%

Senator Kay Hagan (D-North Carolina) 96%

Senator Jeanne Shaheen (D-New Hampshire) 99%

Senator Mark Warner (D-Virginia) 97%

The attempts of Democrats to distance themselves from President Obama reached the heights of absurdity last week when Democrat Senate Candidate in Kentucky Alison Lundergan Grimes refused to answer four times when questioned whether she voted for Barack Obama for President in 2008 and 2012.

Grimes was actually a delegate for Obama at the 2012 Democratic National Convention though she was a delegate for Hillary Clinton in 2008.

Why is this important?

My view of elections, especially federal offices, is that most are decided by voters answering a simple question. Most people cannot organize and reconcile their views on a multitude of issues. Most people cannot answer complex questions. They look to answer a single question that is easy for them.

For example, consider this poll that I saw referenced last week of Millennials aged 18-29. 75% of Millennials said they identify themselves as "pro-choice" when it comes to abortion. However, 65% of Millennials in the same survey also said that "pro-life" describes them on the issue. Do you see what I mean?

That is one of the reasons there are political parties. It makes it easier to decide who to vote for even though most individuals probably do not agree with every single item in the party platform of the candidate they vote for.

I believe that for the most part when people vote (in particular the key swing "independent" voters) they consider simple questions and vote accordingly.

Think about the following successful campaigns of the past and the questions that were at the heart of the voting decision by key voters in those races.

1980 Ronald Reagan       "Are you better off now than you were four years ago"?

1992 Bill Clinton             "Who can feel your pain better"?

1994 Mid-Term               "Are you in favor of the Contract with America"?

2004 George Bush          "Has George Bush kept you safe since September 11, 2001?"

2008 Barack Obama       "Are you tired of George Bush?"

2010 Mid-Term               "Do you want to repeal Obamacare?"

2012 Barack Obama        "Do you trust a rich, white guy like Mitt Romney to look out for you?"

This is why the Democrats are trying so desperately to separate themselves from President Obama and avoid having this mid-term election be a referendum on the President and his policies.

However, Democrats can try to run away but it is difficult to hide a record that is more partisan than at almost any time in history and which it is almost impossible to find any daylight between Obama and Senate Democrats on almost every important issue.

It is also naive to believe that any newly elected Democrat (e.g. Alison Grimes, Michelle Nunn (GA), Greg Orman (KS), (yes, he is a Democrat!) would, or could buck, The White House or Harry Reid if they were elected. Therefore, a vote for any Democrat is really a vote for President Obama and Harry Reid. It is that simple. The numbers above don't lie.

The Democrats placed all their bets on Barack Obama and Harry Reid the last few years. They did not hedge or meet anyone half-way.

The bet is being called in this mid-term election.

Can they overcome the perils of partisanship?

We will soon find out.

Social Insecurity

The highest priority of the President of the United States is to keep it citizens safe and secure.

Not only is President Obama failing in this regard, it almost appears that he has a wanton disregard for the citizens who he took an oath of office to protect and defend. You can almost call him President Amnesty ISIS Ebola Obama.

He has created an enormous amount of Social Insecurity in our country due to putting politics above sound public policy and political correctness above the public good.

He has openly ignored the immigration laws of the United States and has failed to protect our borders. In fact, he has stated that he will grant amnesty to people who are in the United States illegally before the end of the year by executive order.

Thousands of illegal immigrant children have flooded across our border

It seems apparent that the wave of illegal immigrant children and others which overwhelmed the southern border this past summer have brought with them a host of communicable diseases.  Some are speculating that the Enterovrius D68 virus that has affected many of our children and affecting many medical systems in the Midwest is the result of the immigrant invasion.

In fact, someone I know came very close to losing her young son to this potentially deadly virus just one week ago.

The Enterovirus D68 that is spreading among children across the U.S. particularly in the Midwest. The mysterious disease has been known to afflict Central America in the past.

Until recently the occurrence of EV-D68 was rare in the United States. Between 1970 and 2005 only 26 clinical isolates of EV-D68 were reported in the USA. Over the years, clusters have been reported in Georgia, Pennsylvania, Arizona and various countries.
Hundreds of children in Missouri and several other states have already been hospitalized because of Enterovirus EV-D68.

ABC News Chief Health and Medical Editor Dr. Richard Besser recently pointed out that “Viruses don’t tend to respect borders.”

Why won't he enforce the immigration law and enforce our borders which are meant to protect the citizens of the United States? It is simple . The Democrat party needs the votes of Hispanics.

Obama ignored the advice of his military commanders, his State Department and his Secretary of Defense and pulled all troops out of Iraq leading to the rise of ISIS and what now looks to be the inevitable fall of Baghdad and the total loss of Iraq to extremist Islamics. The end result will be unspeakable suffering in Iraq on a scale not seen since the fall of Saigon at the end of the Vietnam War.

After the fall of Saigon, an estimated 65,000 Vietnamese were executed. An additional 1 million who had opposed the Communists during the war were sent to "re-education" camps where an estimated 165,000 died. Many South Vietnamese fled the country in the only way possible---by boat. It is estimated that as many as 1.5 million "Boat People" made the drastic decision to flee in makeshift boats. As many as 200,000 died trying. Almost 1 million were accepted into the United States as refugees.

Vietnamese Boat People
Credit:History Learning Site

These extremists openly threaten the United States of America and have already blatantly beheaded two Americans and two Brits. A third American (Peter Kassig), a humanitarian worker, has been named as the next potential victim.

This week ISIS went on social media to threaten U.S. military personnel and their family members in their homes according to an Army intelligence bulletin that was reported on by Fox News.

An Army intelligence bulletin is warning U.S. military personnel to be vigilant after Islamic State militants called on supporters to scour social media for addresses of their family members – and to “show up [at their homes] and slaughter them."

The assessment, obtained by Fox News, came from the Army Threat Integration Center which issues early warnings of criminal and terrorist threats to Army posts worldwide.

Why did President Obama not heed the warnings of what now appears to be most of his top advisors on the Joint Chiefs of Staff, his Defense Secretary, his Secretary of State and the Director of the CIA and leave a residual security force in Iraq to protect the gains we had made in securing that country?
It is simple. He campaigned as an Anti-Iraq War President. He did not want to admit that he may have been wrong and that President Bush was right about the threat of a terrorist state in Iraq. He put politics above the personal security of Americans.

Let it not be forgotten that ISIS is also the group that he called a JV team after they had taken over the city of Fallujah in Iraq. Here is the exact quote from President Obama in January, 2014..

I think the analogy we use around here sometimes, and I think is accurate, is if a JV team puts on Lakers uniforms, that doesn’t make them Kobe Bryant. I think there is a distinction between the capacity and reach of a bin Laden and a network that is actively planning major terrorist plots against the homeland versus jihadists (ISIS) who are engaged in various local power struggles and disputes, often sectarian.

Finally, we have Ebola in which President Obama also made an ill-advised statement which also seems to be politically motivated.

This is what President Ebola  Obama said a little over two weeks ago about the chances of Ebola reaching the United States.

"...the chances of an Ebola outbreak here in the United States are extremely low... In the unlikely event that someone with Ebola does reach our shores, we’ve taken new measures so that we’re prepared here at home." (emphasis added)

Recall that this is the same President who banned flights to and from the United States to Israel during the Israeli/Hamas war but has refused to limit flights from affected West African countries or restrict access to the United States from individuals carrying passports from these countries until the illness is under control.

By comparison, airlines in both Great Britain and France have suspended flights to and from two West African countries.

You also have to question the sense of proportionality in comparing the President's military response to ISIS and to Ebola considering he has committed more troops on the ground in Africa to help respond to the Ebola crisis than he has on ground to help the Iraqis to fight ISIS.

Why has President Obama been so complacent about the threat of Ebola? On this one I do not have a simple answer. Is he concerned about adverse reaction from the African-American community because the source of the Ebola epidemic is in Africa? I don't think most Americans would care if the source was Ireland or Iceland. They want to protect our country from the disease.

The Democrats have always liked to refer to themselves as the party of Social Security.

However, President Obama is quickly making them the party of Social Insecurity.

I would not want to be a Democrat running for office next month with President Obama as the head of my team.

Consider for a moment the risks to our country if any one of these threats spins out of control.

Children dying from an enterovirus that we have generally not seen in the United States in almost 50 years that has been very prevalent in the Central American countries where scores of illegal immigrants stormed over our borders this summer.

An ISIS attack in our country directed at servicemen or their families or the fall of Baghdad with pictures of brazen brutality and bloodshed.

An Ebola outbreak that affects scores of people in this country.

Human beings seek safety and security above all else. Without it, not much matters.

I hope we can overcome the threats to our safety and security from the lack of border security, ISIS and Ebola. The origin of these threats cannot be blamed on President Obama. However, his actions have made each of them a much greater threat to the American people than they otherwise would be.

We are in an age of Social Insecurity right now and President Obama owns it.

And the Democrats own it as well due to their past blind support of President Obama.

It promises to be an interesting Fall as we watch these events unfold. Can President Obama and the Democrats survive it?

Everything Is Fine Until It Isn't

I have written regularly that we are heading for a date with destiny that is most predictable but which will nonetheless shock the populace and pundits who will marvel at how unpredictable it all was once it actually occurs.

I have written about the nation's expanding national debt.

I have written about the artificially low interest rates and what happens to government when those rates start to rise.

I have written about the U.S Treasury rolling over treasury securities at ever shorter durations to take advantage of today's low short-term rates.

I have written about the dangers of the Federal Reserve's quantitative easing (QE) program.

I have written about the country's looming Social Security and Medicare funding crisis.

I have written how almost 70% of the federal budget is now comprised of payments to individuals and that in ten years payments to individuals and interest costs will consume 93% of the federal budget. Only 7% will be spent on the traditional roles of government (defense, roads, parks, public health, education, etc).

It is all around us.

I came across the blog article (reproduced in full below) by Michael Snyder on David Stockman's Contra Corner web site that puts all this together in one place. Stockman was the former head of the Office of Management and Budget during the Reagan years so he knows a thing or two about the federal budget. He thought enough of Snyder's piece to post it on his website.

Snyder originally published his blog post here.

Remember one thing. Everything can be fine until it isn't. And history has shown that you can go from fine to finished very quickly when you are deeply in debt and dependent on your creditors to keep you afloat. It is the ultimate confidence game.

Don't be conned. The facts say we are living on borrowed time and it is all on borrowed money. Short term borrowed money which is the worst possible confidence game to be playing.



Uncle Sam’s $8 Trillion Annual Debt Churn: Why Washington Is Pertrified Of Honest Interest Rates
By Michael Snyder

I know that headline sounds completely outrageous.  But it is actually true.  The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this. When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months.  And as I wrote about recently, the U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.

But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year.  When these debt instruments hit their maturity date, the U.S. government must pay them off.  This is done by borrowing more money to pay off the previous debts.  In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued.  The final numbers for fiscal year 2014 are likely to be significantly higher than that.

So why does so much government debt come due each year?

Well, in recent years government officials figured out that they could save a lot of money on interest payments by borrowing over shorter time frames.  For example, it costs the government far more to borrow money for 10 years than it does for 1 year.  So a strategy was hatched to borrow money for very short periods of time and to keep “rolling it over” again and again and again.

This strategy has indeed saved the federal government hundreds of billions of dollars in interest payments, but it has also created a situation where the federal government must borrow about 8 trillion dollars a year just to keep up with the game.

So what happens when the rest of the world decides that it does not want to loan us 8 trillion dollars a year at ultra-low interest rates?

Well, the game will be over and we will be in a massive amount of trouble.

I am about to share with you some numbers that were originally reported by CNS News.  As you can see, far more debt is being redeemed and issued today than back during the middle part of the last decade…

2013

Redeemed: $7,546,726,000,000

Issued: $8,323,949,000,000

Increase: $777,223,000,000

2012

Redeemed: $6,804,956,000,000

Issued: $7,924,651,000,000

Increase: $1,119,695,000,000

2011

Redeemed: $7,026,617,000,000

Issued: $8,078,266,000,000

Increase: $1,051,649,000,000

2010

Redeemed: $7,206,965,000,000

Issued: $8,649,171,000,000

Increase: $1,442,206,000,000

2009

Redeemed: $7,306,512,000,000

Issued: $9,027,399,000,000

Increase: $1,720,887,000,000

2008

Redeemed: $4,898,607,000,000

Issued: $5,580,644,000,000

Increase: $682,037,000,000

2007

Redeemed: $4,402,395,000,000

Issued: $4,532,698,000,000

Increase: $130,303,000,000

2006

Redeemed: $4,297,869,000,000

Issued: $4,459,341,000,000

Increase: $161,472,000,000

The only way that this game can continue is if the U.S. government can continue to borrow gigantic piles of money at ridiculously low interest rates.

And our current standard of living greatly depends on the continuation of this game.

If something comes along and rattles this Ponzi scheme, life in America could change radically almost overnight.

In the United States today, we have a heavily socialized system that hands out checks to nearly half the population.  In fact, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government each month according to the U.S. Census Bureau.  And it is hard to believe, but Americans received more than 2 trillion dollars in benefits from the federal government last year alone.  At this point, the primary function of the federal government is taking money from some people and giving it to others.  In fact, more than 70 percent of all federal spending goes to “dependence-creating programs”, and the government runs approximately 80 different “means-tested welfare programs” right now.  But the big problem is that the government is giving out far more money than it is taking in, so it has to borrow the difference.  As long as we can continue to borrow at super low interest rates, the status quo can continue.

But a Ponzi scheme like this can only last for so long.

It has been said that when the checks stop coming in, chaos will begin in the streets of America.

The looting that took place when a technical glitch caused the EBT system to go down for a short time in some areas last year and the rioting in the streets of Ferguson, Missouri this year were both small previews of what we will see in the future.

And there is no way that we will be able to “grow” our way out of this problem.

As the Baby Boomers continue to retire, the amount of money that the federal government is handing out each year is projected to absolutely skyrocket.  Just consider the following numbers…

-Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

-When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.  Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

-It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

-At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for every single household in the United States.

-In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

-Right now, there are approximately 63 million Americans collecting Social Security benefits.  By 2035, that number is projected to soar to an astounding 91 million.

-Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

-The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.  Social Security and Medicare make up the bulk of that.

Yes, things seem somewhat stable for the moment in America today.

But the same thing could have been said about 2007.  The stock market was soaring, the economy seemed like it was rolling right along and people were generally optimistic about the future.

Then the financial crisis of 2008 erupted and it seemed like the world was going to end.

Well, the truth is that another great crisis is rapidly approaching, and we are in far worse shape financially than we were back in 2008.

Don’t get blindsided by what is ahead.  Evidence of the coming catastrophe is all around you.

Initiators and Imitators, Good and Evil

“Since 95 percent of the people are imitators and only 5 percent initiators, people are persuaded more by the actions of others than by any proof we can offer.” 

                                                                – Cavett Robert

This is the fundamental principle of the law of social proof. The fact is that most people are significantly influenced in their behavior by looking at others.

Most people want to conform. They don't want to stand out in a crowd. They are very comfortable in going with the flow. That type of human behavior works well when you have moral, ethical leaders. As a result, society functions well.

It does not work well when the leaders and initiators are evil. This has been proven over and over and over again throughout history. Some imitators imitate. However, most of the 95% become invisible. They keep their heads down and they just stay quiet so as to not rock the boat.

President Obama said last night on 60 Minutes that "Islam is a religion that preaches peace and the overwhelming majority of Muslims are peaceful."

That may be the case but it is irrelevant if "the overwhelming majority of Muslims" are silent or sit back while "initiators" and "fanatics" in their religion are defining Islam in their image.

With that in mind, it is worth considering this blog post by Paul Junker in Celestial Junk on "Why the Peaceful Majority is Irrelevant" that was first published in 2006. It is 2014 and his thoughts seem as relevant today as they were then.


Why the Peaceful Majority is Irrelevant

I used to know a man whose family were German aristocracy prior to World War Two. They owned a number of large industries and estates. I asked him how many German people were true Nazis, and the answer he gave has stuck with me and guided my attitude toward fanaticism ever since.

“Very few people were true Nazis” he said, “but, many enjoyed the return of German pride, and many more were too busy to care. I was one of those who just thought the Nazis were a bunch of fools. So, the majority just sat back and let it all happen. Then, before we knew it, they owned us, and we had lost control, and the end of the world had come. My family lost everything. I ended up in a concentration camp and the Allies destroyed my factories.”

We are told again and again by “experts” and “talking heads” that Islam is the religion of peace, and that the vast majority of Muslims just want to live in peace. Although this unquantified assertion may be true, it is entirely irrelevant. It is meaningless fluff, meant to make us feel better, and meant to somehow diminish the specter of fanatics rampaging across the globe in the name of Islam. The fact is, that the fanatics rule Islam at this moment in history. It is the fanatics who march. It is the fanatics who wage any one of 50 shooting wars world wide. It is the fanatics who systematically slaughter Christian or tribal groups throughout Africa and are gradually taking over the entire continent in an Islamic wave. It is the fanatics who bomb, behead, murder, or honor kill. It is the fanatics who take over mosque after mosque. It is the fanatics who zealously spread the stoning and hanging of rape victims and homosexuals. The hard quantifiable fact is, that the “peaceful majority” is the “silent majority” and it is cowed and extraneous.

Communist Russia was comprised of Russians who just wanted to live in peace, yet the Russian Communists were responsible for the murder of about 20 million people. The peaceful majority were irrelevant. China’s huge population was peaceful as well, but Chinese Communists managed to kill a staggering 70 million people. The Average Japanese individual prior to World War 2 was not a war mongering sadist. Yet, Japan murdered and slaughtered its way across South East Asia in an orgy of Killing that included the systematic killing of 12 million Chinese civilians; most killed by sword, shovel, and bayonet. And, who can forget Rwanda, which collapsed into butchery. Could it not be said that the majority of Rwandans were “peace loving”.

History lessons are often incredibly simple and blunt, yet for all our powers of reason we often miss the most basic and uncomplicated of points. Peace-loving Muslims have been made irrelevant by the fanatics. Peace-loving Muslims have been made irrelevant by their silence. Peace-loving Muslims will become our enemy if they don’t speak up, because like my friend from Germany, they will awake one day and find that the fanatics own them, and the end of their world will have begun. Peace-loving Germans, Japanese, Chinese, Russians, Rwandans, Bosnians, Afghans, Iraqis, Palestinians, Somalis, Nigerians, Algerians, and many others, have died because the peaceful majority did not speak up until it was too late. As for us who watch it all unfold, we must pay attention to the only group that counts; the fanatics who threaten our way of life.

This is not just a lesson for peace loving Muslims to remember but for peace loving and patriotic Americans as well.

"The only thing necessary for the triumph of evil is that good men do nothing."

An interesting footnote on the quote above that I found while researching this blog post.

This quote was recently considered to be the most popular quotation of modern times in a poll conducted by the editors of “The Oxford Dictionary of Quotations.”

I always thought the quote was attributed to Edmund Burke dating back to the 18th century. However, this article by the Quote Investigator concludes that there is no evidence that Burke ever uttered or wrote the phrase. The correct attribution for the quote is not known. And now you know!

A Dangerous Path

On the night of March 9, 1945, 334 B-29 bombers took off from the Mariana Islands on a mission to decimate Tokyo's Shitamachi section in the eastern part of the city.

Each B-29 carried carried 7 tons of incendiary cluster bombs. Each bomb, in turn, released 38 naplam-carrying incendiary bomblets at an altitude of 2,000 feet that spread the effect of the incendiary material over a wide area.

The cluster bombing was directed at an area of Tokyo that was populated by roughly 750,000 people living in cramped quarters in wooden-frame buildings. The area also contained a great number of light industries, so-called "shadow factories", that produced prefabricated war materials and aircraft parts that were supplying the Japanese army.

One of the justifications for the fire bombings was to disrupt the military supply chain that was imbedded within this civilian area that could not otherwise be easily targeted and destroyed. However, breaking the will and resolve of the Japanese people to continue the war effort was certainly a prime objective as well.

The firebombing attack was aided by strong winds (17 mph to 28 mph) the night of March 9 that created a firestorm and conflagration that destroyed 15.8 square miles of the city, left over a million homeless and killed over 100,000.

To put that in perspective, the number of fatalities on that one night was the single deadliest air raid of World War II; killing more people than the atomic bombings of Hiroshima or Nagasaki.

Aerial view of Tokyo after the War
Credit:Wikipedia

In the Civil War in 1864, in just over two weeks time in Virginia. at the Battle of the Wilderness (May 5-7) and the Battle of Spotsylvania Court House (May 8-21), over 55,000 young Americans lost their lives on the battlefield.

Battle of the Wilderness
Credit:Harper's Weekly

Both battles had General U.S Grant advancing with vast numbers of Union soldiers in an attempt to break the Confederate lines in a war of attrition based on the Union Army's superior numbers in men and materiel. This led some to start calling him "Butcher Grant" for the number of casualties he took along the way. Of course, this is the same U.S. Grant that defeated the Confederate Army in 1865 and became the President of the United States in 1868.

620,000 Americans lost their lives fighting the Civil War-equal to about 2% of the country's population at the time.

These acts of war involving mass assaults, intimidation and a mindset for total victory are difficult for us to fathom right now. Most of those living today have seen nothing like it in our lifetimes. After all, the Korean War was officially referred to as a "police action" by President Truman. The Vietnam War was fought without Congress ever declaring war on anybody.

Notice that these horrific acts of war described above were separated by roughly 80 years.

Is there significance to that time period between these events?

William Strauss and Neil Howe, authors of The Fourth Turning, would argue that it is totally consistent with what one would expect to find at the "Crisis" season of history that we seem to now be in and that Strauss and Howe predicted would be upon us beginning around the middle of the first decade of the 2000's.

What does it all mean?

Strauss and Howe argue that if this plays out like previous Fourth Turnings (as in the Civil War and World War II periods) we will find that ...

"The Crisis mood will dim expectations that multilateral diplomacy and expanding global democracy can keep the world out of trouble". 

"Old Unraveling-era strategies (flexibility, stealth, elite expertise, stand-off weaponry, and surgical goals) will all be replaced by new Crisis-era strategies (mass, intimidation, universal conscription, frontal assault and total victory) more suitable to a fight for civic survival." 

Does any of this sound familiar?

How have we been conducting the wars we have been involved with in the Middle East over the last 20 years?

They have principally been surgical in nature with very limited rules of engagement. We have prided ourselves on our flexible and nimble fighting forces, our stealth bombers and drones, our special forces like the Navy Seals, our use of air power (stand-off weaponry) and surgical strikes.  Even in the Gulf War in the early 1990's, we merely evicted Saddam Hussein's forces from Kuwait and stopped the war when Iraq was expelled rather than pursuing total victory.

What strategy is President Obama proposing for dealing with ISIS?

More of the same. However, it may be a path to failure as it may not match the evolving attitudes of the American people as the Crisis period continues.

Why do I say this?

I think the emergence of ISIS is changing American attitudes in very profound ways that is only beginning to become evident. The brutality and barbarism of the group, the fact that is is referring to itself as a "state" and its direct threats to the United States have made it a real and tangible threat that
is much easier for the American people to comprehend and understand.

I have seen this first hand with this blog.

I have been writing BeeLine for almost four years. In that time I only had one post that I wrote that got more than 1,000 views. That is, until I wrote "Why ISIS, Not ISIL" , two weeks ago. That post has already gotten over 8,000 views!

How could that happen?

It could only occur if there were a lot of people reading and forwarding that blog post on to others. I generally only have about 100 regular readers of BeeLine, so the only way to get to 8,000 views is for that post to really resonate with people and for those people to be moved to share it with friends and family. Over and over.

Why were people moved to do that?

The only explanation that I can come up with is that post resonated with an American public which is becoming increasingly concerned about the threat of radical Islam. They also appear to be more than a little concerned that the President of the United States may not be fully engaged in his foremost responsibility--protecting the American people. There are questions about his engagement, his motives and his leadership.

There also remain a lot of unanswered questions about Barack Obama that have not been answered even those he has been in office for almost six years. Have we ever had a President of the United States that we have known so little about regarding his background and upbringing? Have we ever had a President of the United States who apparently was raised believing the United States was the bad actor in the world, rather than a force for good? Have we ever had a President of the United States where you were not 100% sure that he had the country's (not his political party, or contributors or friends) best interests at heart?

From the reaction I have gotten to that one blog post, it appears that there are a lot of people who have questions. And the stakes have gotten much bigger.  People might might overlook some of the questions above if we are just talking about issues like abortion, the national debt, the Keystone pipeline or national health care. However, people tend to get much more interested when they start thinking about their safety and security.

This trend has also shown up recently in polling data which shows President Obama's job approval is sinking particularly fast among women. This is significant as women have generally been the core of much of Obama's support.

Obama's approval rating among white women is now only 32%, with a massive 62% disapproving of his job performance. He lost six points just since August according to a recent Wall Street Journal poll.

In August, white women favored a Democratic Congress by four points. They now favor Republicans by eight points. That is a 12 point swing in a month!

"Soccer Moms" are becoming "Security Moms".

Mothers are hard-wired to protect their families from danger and disaster of the kind that Strauss and Howe predict is awaiting us. They are wise to be concerned about the man who is leading us down the uncertain path we are on right now that Obama has placed us on.

I was particularly interested in the article today on HotAir.com in which Leon Panetta, who served President Obama as both his CIA Director and Secretary of Defense "sharply criticized the president for failing to address the crisis in Syria earlier. He said that Obama ignored his national security advisors when he failed to arm the Syrian rebels and pulled all U.S. troops out of Iraq; actions which led to the rise of ISIS".
Where does the uncertain path we are on right now possibly lead? More from The Fourth Turning...

"Armed confrontation usually occurs around the climax of the Crisis. If there is confrontation, it is likely to lead to war. This could be any kind of war---class war, sectional war, war against global anarchists or terrorists or superpower war. If there is war it is likely to culminate in total war, fought until the losing side has been rendered nil---its will broken, territory taken, and leaders captured. And it there is total war, it is likely that the most destructive weapons available will be deployed."

However, mothers also deeply about their country and the survival of our way of life .

"Decisive events will occur--events so vast, powerful, and unique that they lie beyond today's wildest hypotheses. These events will inspire great documents and speeches, visions of a new political order being framed. People will discover a hitherto unimagined capacity to fight and die, and to let their children fight and die, for a communal cause. The Spirit of America will return, because there will be no other choice."

I hope all of this is wrong but I discern a creeping realization from many that we are on a dangerous path that will put all of us to the test. And in times like this we need a Washington, Lincoln or Roosevelt leading us---not a community organizer who grew up criticizing most everything his country ever did.

227 Years and Counting

Today is the 227th anniversary of the signing of the U.S. Constitution. The Constitutional Convention had convened on May 14, 1787 and work was finished and the delegates signed the Constitution on September 17.

The Constitution was then sent to the 13 states for ratification.  Nine were required for the Constitution to fully "unite" the states. That did not occur until June 21, 1788 when New Hampshire became the ninth state to ratify the document.

In the interim, the Federalist Papers were written to explain the theories, rationale and reasoning of our Founders.  Alexander Hamilton devised the idea to write and publish this series of papers in an effort to enlist support for ratification in the states and to answer the many criticisms that were lobbied against the Constitution. This was particularly the case when it came to defending the need for a federal government at all.  Oh, how times have changed!

Hamilton enlisted James Madison and John Jay to join him in writing the series of essays.  Hamilton ended up writing 51 of the 85 articles.  John Jay fell ill and ended up writing only five papers.  This left the remainder to Madison who is known today as the "Father of the Constitution".  By the way, Madison was just 36 years old and Hamilton was 32 when they were writing the Federalist Papers.

What is truly amazing in reading the Federalist Papers is how well our Founders understood human nature and the efforts they took to provide safeguards in the Constitution against human fallibilities and foibles.

I have written about the Federalist Papers before, and it being Constitution Day, I thought I would once again highlight what is perhaps my favorite blog post since I started writing BeeLine.

If you have any doubt about the brilliance of our Founding Fathers and of the Constitution they drafted, read on about "Improper and Wicked Projects" in the Federalist Papers.  What were Improper and Wicked Projects?

This is their list.  I kid you not.

A rage for paper money 

A rage for the abolition of debts 

A rage for an equal division of property

A little eerie?  Read it all and send it on to others.  The answers to our problems are already in existence.  It was written down 227 years ago today. We just need the good sense to return to these founding principles.


Improper and Wicked Projects (originally posted August 22, 2011)

Power, politics, greed, bias, conflicts of interest, oppression.  There is nothing going on today that our Founders did not anticipate.

Due to the intelligence and insights of our Founding Fathers they wrote a document that considered all of the above and more in writing the U.S. Constitution.  They knew that instability, injustice and confusion within the institution of government had caused many to fail.  They were determined to build a governmental structure that could endure for the ages.

Federalist Paper #10 was written (by James Madison) to describe "How the Union Will Act as a Safeguard Against Domestic Division and Rebellion". The Founders understood that opposing political factions were the greatest potential threat to any government and that in many governments the only redress was violence.  They wanted to insure that factions could not wield power that would be dangerous to either the rights of other citizens or the common good.  What did they see as the most common and tangible source of faction?  The conflict between rich and poor. Here are the exact words from #10.

The most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. 

Where did they see the most danger for a majority to trample on the rights of a minority?  Taxation.

The apportionment of taxes on the various descriptions of property is an act which seems to require the most exact impartiality; yet there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice. Every shilling with which they overburden the inferior number, is a shilling saved to their own pockets. 

They understood that those that governed us had to be a cut above to balance and mediate these conflicting interests and put the public interest above any special interests.  However, they also knew that this was naive. The Common Argument modern translation puts it this way.

Enlightened statesmen will not always be in power, and even if such mediation could happen, it would rarely take place with long-term interests in mind, since the immediate "here and now" interests of the party in power would most likely win the day at the expense of the rights of the other party, or the good of the whole.

Our Founding Fathers were one smart group.

They also knew that there was little they could do to prevent factions from occurring.  That could only be done by limiting liberties or insuring every citizen has the same opinions, feelings and the same interests. Neither was acceptable to the Founders.  They had no interest in preventing the causes, which is what Communist and Totalitarian governments do.  They focused on controlling the effects of factions.  Thus, they constructed a republican governmental framework with an ultimate goal of securing both the public good and private rights against the dangers of an oppressive majority faction. Everything in the Constitution was built on this foundational principle. 

They built a government which derived all of its power directly or indirectly from the People, administered by representatives who hold their offices at the pleasure of the People, for a limited period of time, or during good behavior. Using different time periods for holding office, including the separation of powers between the three branches of the federal government and limiting the power of the federal government relative to the states were all important foundational principles to achieve their overarching goal of facilitating majority rule but protecting minority rights.

Perhaps most applicable to today is what Federalist #10 says in the second to last paragraph.  It explains why they set up the republican form of government we have and not a democracy or parliamentarian system. It literally stopped me in my tracks when I read it.  I re-read it several times in The Original Argument and then went to the actual Federalist Papers to read it exactly as it was written.  There could not be a better example to show how far we have deviated from the path the Founders established and why they set up safeguards in the Constitution to protect the People. 
It reads as follows with the bold emphasis being mine:

The influence of factious leaders may kindle a flame within their particular States, but will be unable to spread a general conflagration through the other States. A religious sect may degenerate into a political faction in a part of the Confederacy; but the variety of sects dispersed over the entire face of it must secure the national councils against any danger from that source. A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it; in the same proportion as such a malady is more likely to taint a particular county or district, than an entire State.

How much more relevant can you be to what we have seen in recent years in this country, most particularly in the Obama Administration?  The Founders found all of these to be "improper or wicked projects"by dangerous factions.  These were the types of government abuses they were trying to prevent. 

• a rage of paper money (what is the Federal Reserve doing?)

• an abolition of debt (what was done to the secured creditors in the GM and Chrysler bankruptcies or with the bailout of Wall Street?)

• for an equal division of property (Redistribution of income and wealth through a focus on taxing the rich)

Isn't it interesting that each of these "improper or wicked projects" is also at the core of what has motivated the Tea Party?  Terrorists?  I think not.  These are the sons and daughters of the Founding Fathers united against the very factious leaders our forefathers warned us about.  

Future Shock and Fraud

Alvin Toffler made this profound statement in his book, Future Shock, in 1970.

"Our technological powers increase, but the side effects and potential hazards also increase."

Technology has provided us so much over the years but with each advance we also see side effects and hazards arise that weren't there before the technological progress took place.

I have seen this up close and personal over the last few weeks as I have been a victim of identity theft. In the process I have seen the ugly underbelly of technology as well as the dark side of power and greed when it is mixed into the equation. It is not a pretty picture when you pull back the covers.

My identity theft story began when I received what appeared to be a promotional prepaid debit card in the mail. It stated that I needed to call an 800 number to activate the card. I quickly shredded the card and did not think much about it as it appeared to be merely a marketing promotion.

Several days later I received a letter in the mail from the prepaid debit card company telling me that I had opted-in for overdraft protection. I immediately knew something was wrong because how could I have opted in for overdraft protection on a card I had never applied for or activated?

I quickly reached the company and told them I knew nothing about the card. They told me that I had 'purchased' the original card (a $10 fee is charged to get the card) at one of their retail partners and had "enrolled' online. As I continued the dialogue I found out that they had quite a bit of personal information on me in their file. I asked where the prepaid debit card had been purchased. I was told that it was at a 7/11 store in Washington, D.C.

It took me only a second to say, FRAUD! First, I probably have not been in a 7/11 in ten years. Second, I certainly was not in Washington, D.C. on the date the prepaid card was purchased.

However, for the life of me I could not figure out why someone would buy a prepaid debit card with their own funds in my name and fund it with $20 which brought the crook's total investment in "my card" to $30 ($10 to open it and $20 in cash on the card per the company).  Was it a money laundering scheme?  More on that below.

Two days later I received a call from a payday loan company asking me why I was late on my online loan. This time it took about a millisecond to say FRAUD. This company had even more personal information on me although some of the data was not currently accurate. In this case, "I had borrowed" $2,650 on a 8 month installment loan and I had "missed" the first payment. I understood the crook's motivation much more clearly on this one. What was more difficult to understand was why the loan company would have underwritten the loan if someone had looked at little deeper at my credit history and other facts.

Although the identity theft element of this story has been a hassle with the required police report, identity theft affidavit reporting and credit report agency fraud alerts, what is most troubling is what I found is occurring right under our noses in the United States of America. It is as if there is a parallel universe in play that many of us as law-abiding, hard working, straight shooting Americans never come into contact with.

It is also a world in which technological powers have increased and made things easier to defraud, cheat and steal and yet those in power are doing nothing about it. In fact, it can be said that they are actually complicit in creating incentives in the system for frauds like this to take place in the interests of their own power and greed.

Let me explain.

The online loan that was taken out in my name was done entirely online with stolen personal information or other personal information that was easily obtainable on me with a few keystrokes at a computer. At this point I don't know where the breach was in the numerous systems that have my personal information (banks, credit card companies, employer, health insurance, hospitals, doctors, investment companies). The reality is that your personal information is stored in a lot of different places. A whole lot of which you have little control no matter how careful you may try to be.

What is really unbelievable is that the loan was approved even though the review of my credit report showed a several generous credit limits were available on my credit cards.

Why is this significant?

Would you care to guess what the APR was on the loan I took out?

I have asked a number of friends and acquaintances this question as I told them my story. No one guessed higher than 25%.

The actual APR on this loan.

362.1%!

That's not a typo. The loan carried interest at a rate of 4.36% per day!

That $2,650 loan would require payments of $6,943 within 8 months to pay the loan off.

As I got into the details with the loan company, I asked them why would someone with my credit history and with substantial credit limits available on credit cards (at APR rates of around 15%) take out a loan at 362%? Needless to say, I did not get a good answer to that one.

This led me to do a little research into the dark side of the payday loan industry (or the small-dollar or alternative credit industry as they are more likely to refer to themselves in their political lobbying) in this country.

What I found was shocking.

• The United States has an estimated 30,000 payday loan stores. That is more than the number of McDonald's and Starbucks in this country, combined!
• Nearly 43% of U.S. households have used some type of alternative credit product in the past according to the FDIC.
• It is estimated that alternative financial products generated approximately $89 billion in fees and interest in 2012.

I think you can also see that when you are charging an interest rate of 362.1% you can afford a good number of fraudulent loans and defaults and still do way, way, way better than your local banker who is lending money at 5%, 6%, 7% or 8%.

The obvious question is how can this be legal? You would think that this is one area where our government should be protecting our citizens. These interest rates are higher than the loan shark charges down by the wharf. Also, what about usury laws which are supposed to prevent this type of exorbitant interest rate?

This is where the story gets really interesting as this loan was established under the laws of the state of Ohio. In 2008, the Short-Term Loan Act was enacted in Ohio which was supposed to impose a 28% interest rate cap on payday lenders in the state. However, six years later not a single lender is subject to the law according to this article in Cleveland.com.

This raises the question of whether the payday loan lobbyists outsmarted the legislators, the lawyers exploited a loophole in the law or the legislators passed a law without any teeth to give themselves plausible deniability.

The latter conclusion is easy to arrive at when you look at the political contributions of the payday loan industry in Ohio and nationally. In fact, the two principals of the parent company that "my loan" was with are spreading money around to anyone who has a vote at the state, local and national levels. Republicans. Democrats. Conservatives. Liberals. It does not matter.

For example, Federal Election Commission reports indicate that both Sherrod Brown, the Democrat for the 2012 U.S. Senate seat in Ohio, and Josh Mandel, the Republican, got money. Harry Reid (D) and Barney Frank (D) both received contributions in recent years as did Marco Rubio (R) and Trey Gowdy (R). From looking at the reports, these were not political contribution motivated by principles or values, but payments clearly intended to protect their business from any unfriendly government action.

If people want to see an example of how the system is rigged by an unholy alliance of powerful monied interests and power hungry politicians they should look no further than the payday loan industry. How can this be in anyone's interest but the payday loan owners and the politicians?

Back to the prepaid debit card? What was that all about?

My research led me to this article on CNN.com.

Criminals across the country are raking in billions of dollars in tax refunds through a new and brazen form of fraud that takes advantage of the IRS's fast online returns, law enforcement officials say.

Using laptops and free Wi-Fi connections, criminals are stealing identities and using the names of legitimate taxpayers to file fraudulent online tax returns. They've raked in billions, buying luxury cars, expensive jewelry and plastic surgery, police said.

"It's like the federal government is putting crack cocaine in candy machines," said Detective Craig Catlin of the North Miami Beach, Florida, Police Department. "It's that easy." 

First, thieves obtain Social Security numbers and other personal information from insiders at hospitals, doctor's offices, car dealerships or anywhere the information is stored. Then, they file an online tax return using the real taxpayer's name and a fictitious income. In most cases, the criminals buy a debit card so the IRS can issue the refund on that card, although some thieves have also gotten their returns on actual Treasury checks.

The thieves know that the IRS does not verify the employer W-2s sent with the return until after the refund is issued.

Credit:Kay Bell, Don't Mess With Taxes

In case you can't believe what you just read, let me repeat what is going on under the very noses of hard-working taxpayers like you that are paying the bills in this country.

A thief can steal your name and Social Security number and e-file a completely phony tax return. The IRS has no way of checking the accuracy of the return data at the time the return is filed (including whether the withheld taxes are correct because no W-2 is filed with electronic filing). The IRS accepts the tax return at face value and if a refund is claimed it will transfer the money on to a prepaid bank debit card.

All the fraudster has to do is file the fraudulent tax return before you file your legitimate return. In fact, if you file your tax return after the fraudulent tax return, I have heard stories that indicate that you will feel like the criminal. As you can imagine, it can take hours and hours of your time to get the IRS bureaucracy straightened out.

With the increased use of e-filing this fraud has become rampant. For example, the Treasury Inspector General for Tax Administration recently reported  that it believed that the IRS paid out over $5.2 billion in fraudulent refunds in 2011 alone!

Tax-related identity theft jumped from approximately 52,000 incidents in 2008 to over one million in 2012, according to a 2012 report by the U.S. Government Accountability Office. All of this clearly driven by the trend toward e-filing of tax returns.

Why has this become such a popular way to defraud the federal government and law-abiding taxpayers?

Technology and the advent of electronic filing is part of the answer. However, a significant share of blame must go to the Internal Revenue Service for allowing a tax refund to be put on a prepaid debit card. The IRS argues that they are merely trying to make it easier for individuals who do not have bank accounts to access funds. However, it is hard to believe that this benefit outweighs an annual cost of over $5 billion in fraudulent payments.

After all, for decades and decades, individuals got tax refund checks and somehow found a way to cash those checks. It would seem to me that until the IRS can do a better job of matching returns with W-2 and other information at the time of filing, that they should not allow tax refunds on prepaid debit cards with the overwhelming evidence of fraud that is occurring.

The IRS also rarely investigates these incidents of fraud due to the small amount ($5,000 or less on average) of each individual case. The majority of identity fraud cases are never investigated and the criminals face no legal repercussions.  In addition, privacy laws limit local law enforcement from investigating many cases because they cannot access IRS information.

It seems that I am good company having my identity stolen as even Attorney General Eric Holder was the target of the IRS refund scam this past March. In that case someone at the IRS figured something was suspicious when Holder's return listed WalMart as his employer and the fact that he wanted his refund on a prepaid debit card. There clearly are a few sharp minds still working at the IRS!

You begin to understand how bad it is when you realize that former drug dealers in Florida have given up the cocaine business and spend their time filing tax returns instead. As one suspect told police.

“Why would I take the risk to sell drugs and get busted when I can put $10,000 on a card and do it all day long from home while the cartoons are on?”

Indeed. Who can argue with that logic?

The only problem is that I am the one that thinks they are in the middle of The Looney Tunes.

Who is running the IRS to let this occur?

What are our elected officials doing to allow anyone to charge someone 362.1% annual interest?

Future Shock is here and it did not take long for power, greed and fraud to come along for the ride.

As usual, it is only those who are living the straight and narrow who pay the price.

Division, Secession, Suppression?

The impending vote in Scotland this week on secession from the United Kingdom seems like an opportune time to republish a post I wrote a year ago on similar disruptive possibilities in the United States.

I know that there are many who will undoubtedly say, "It could not happen here". You might want to get a little perspective before you are quick to repeat that statement to someone.

Since The Fourth Turning has been on my mind lately, I will quote another passage from the book that predicts that we are in period where "the American firmament is malleable in ways that would stagger" our traditional thinking.  Howe and Strauss said this about what might occur during The Fourth Turning...

The prospect for great civic achievement-or disintegration-will be high. New secessionist movements could spring from nowhere and achieve their ends with surprising speed. Even if the nation stays together, its geography could be fundamentally changed, its party structure altered, its Constitution and Bill of Rights amended beyond recognition. (emphasis added).

With this in mind, consider these two additional headlines from the past week.

Texas nationalists see hope in possible Scottish secession
Texas nationalists are awaiting Scotland's pending vote on seceding from the United Kingdom in the hopes it could happen in Texas. 


Senate Dems to Hold Vote to Change the First Amendment
Senate Democrats brought to the floor of Senate for a vote a bill to amend the first amendment of the U.S. Constitution to limit free speech by limiting the ability to influence elections.

Pay attention to what happens in Scotland this week. It may be another signal event of The Fourth Turning. Where are we headed? More division? Calls for secession? More aggressive attempts to suppress free speech from those that do not share our individual views?



How Many States Are In Our Future? 57, 54, 49?

(originally published 9/11/13)

We all know that there is a lot of political division and unrest across the country. A lot of this seems to stem from a fundamental difference in the outlook and values of those who live in urban settings and cities as opposed to rural areas and towns.

For the last 30 years, those of like minds have increasingly decided to live closer together.  It really is a case of birds of a feather flocking together.

You can readily see the effects of this political polarization by looking at the results of Presidential elections since 1976 as Bill Bishop and Robert Cushing did in their 2008 book, The Big Sort. Consider the differences in voting between 1976 and 2000 as pointed out by Jonathan Last in his book, What To Expect When No One's Expecting.

In 1976, only 26.8% of the counties in America went for either Jimmy Carter of Gerald Ford by a margin of 20 points or more.

In the razor thin race between George W. Bush and Al Gore in 2000 it was not even remotely close in nearly half of U.S counties (45.3%) as either Bush or Gore won by more than 20 points.  

In 2004 the '"landslide counties" increased to 48.3% of the total. 

Last observes that this "sorting' is not an accident.  People are more mobile today than in years past and they increasingly move to find areas where people have similar lifestyles, attitudes, values and political views.  That is why Arlington County, Virginia has become overwhelmingly Democrat (Obama 69%, Romney 29% in 2012) and Collin County, Texas is overboard for Republicans (Romney 65%, Obama 34%). Arlington is populated by a bunch of young, single, liberal Yuppies. The northern suburbs of Dallas are filled with married couples with families who go to church and like July 4th fireworks displays.

These demographic changes are a big reason that there is so much polarization in our politics today in Congress. Districts are likely to be solidly Democrat or Republican because there is not a lot of diversity of thinking in most locales compared to 35 years ago. Politicians that walk down the middle of the road today get run over by the electorate because of the Big Sort.

This polarization is also showing up in state politics.  For example, twice in the last month I have seen stories about groups that want to form a new state because they are dissatisfied with the representation they are getting in their current state.

The first example is in Northern Colorado. Voters in several rural Colorado counties will be asked in the November elections whether they want to form a new state tentatively named "Northern Colorado".

The Siskiyou County Board of Supervisors in far Northern California have the same idea.  They want their county to join other Northern California and Southern Oregon counties in the establishment of a new state called Jefferson.

Establishing a new state by seceding from an old state is permitted under the U.S. Constitution. Article IV, Section 3 requires that the proposal must first be approved by the existing state(s) legislature.  It then must also be approved by Congress.

A state breakup is not without precedent. Maine used to be part of Massachusetts. It did not become a state until 1820. West Virginia used to be part of Virginia.  It became a separate state in 1863.

However, the fact that you need the consent of both the state legislature (who would be giving up land and power) and Congress makes any such effort a long shot.

One of the more interesting historical factoids on this subject involves the state of Texas.  It seems to have special privileges not provided to the other 49 states.  When Texas was being wooed to join the union in 1845 (it was then an independent country), Congress wrote into the resolution granting it statehood that Texas could later slice itself up into two, three, four or even five distinct states without the subsequent approval of Congress. Texas would only need to have its state legislature agree to the split. This clearly was done due to the sheer size of Texas compared to other states at the time.

I always have wanted to write a political thriller based on this little known historical footnote wherein Texas used this power to effectively add eight senators to represent its people in Washington to change the balance of power on a major issue (for example, oil and gas) that was critical to the state. Oh, to find all the time I need to do everything I want to!

There are some that have even gone to the trouble to propose borders and names for what The Five States of Texas might look like. The picture below is from a site called "Fivethirtyeight" which also projected what the county by county face off between Obama and McCain in 2008 would have looked like in the five states of Texas.

Source:Fivethirtyeight

Our Founding Fathers also thought that it was possible that two or more states might also be formed by the junction of two or more states, or parts of states at some point in the future.  This has not occurred yet but might it be a possibility if a state found itself in dire financial straits or in bankruptcy?  Could we eventually see state mergers much like corporate takeovers or mergers?  It is allowable in the Constitution.  How about a future in which we have Chicago,Wisconsin or Detroit, Indiana?

The Wall Street Journal had an interesting story several years ago on some of the history of "Altered States" that provides more background about past efforts to establish new states.  It also provided this map of some of the proposed states that never quite made it.  The states of Lincoln (Western Washington and Eastern Idaho), Acadia (Northern Maine) and Chesapeake (Eastern Shore of Maryland) are just a few examples.

You can go to an interactive map to get details on the background and history of each of these proposed states.

When President Obama was running for office in 2008 he made one of his famous "off Teleprompter" remarks and referred to the fact that he had visited 57 states during the campaign.

All of this shows that he may actually be proven right one day.  At some point we may very well see success from one or more of these state secession efforts.  Its been done in the past.  There is no reason that it might not occur again. I never ignore history.  It may never repeat, but it does rhyme.