The complete unmodified text of this email can be found at http://www.entertainmentjourney.com/election_2008.txt This is my last ditch effort to make my case for the 2008 election not just to the readers of this email, but for the whole country. If you like what you read here, then please forward it to everyone you know. It is the only way that we together can get the word out to a large number of people. If you don't like my ideas, then fine. Honest people will have differences of opinion. In the end it will make a difference who wins, but not as much as people might think. Neither candidate will be able to pass everything they want, because the country can't afford it, and because the Democrat controlled congress will set the agenda for years to come. We should stop focussing on the personal experience, associations and alliances of the candidates. In the end, this won't matter. The real issue is what kind of legislation do these candidates intend to pass? Also important is what type of government do we personally believe in, and what kind of government do the candidates believe in? Nobody has all the answers. No one is going to be right on every issue, but what the candidates believe the role of government should be is fundamentally important to the future of this country. I get the impression that many people have already made up their minds, more on the basis of wanting "change" rather than actually understanding the issues at stake. So with this in mind, let us discuss the issues ... 1. Deficit spending and the National Debt The 451 pound gorilla in the room is the 10 trillion dollar national debt and the $451 billion dollars in interest that government has to pay on it every year. The United States government has been spending more money than it takes in almost every year for the last 8 decades. Individuals need to occasionally borrow money for various reasons, but they can't expect to keep doing it year after year, let alone decade after decade, without having to pay it back or go bankrupt. Common sense would indicate that the more money an individual borrows, the more he is going to be burdened by debt payments and interest. The same thing applies to the government. No matter who is elected, the national debt is going to be a burden on the government, and consequently the tax payers as well. To put this in perspective, for a family of four, the national debt is about $133,000. This is less than the cost of most houses, but we the American people have nothing to show for this debt. This interest on this debt amounts to about $6,000 per year for every family of four. 2. Federal Government Spending The federal spending has gone from 1.8 trillion dollars under Clinton to 3.2 trillion under Bush. To put Federal spending in perspective, it amounts to over $40,000 for every family of four. This doesn't even count state and local spending. I can't think of what services the federal government provides that would be worth $40,000. I can't imagine why anyone would want federal spending to increase when it is already at historic high levels. There are many people who actually believe that government spending will help the economy. They see the government providing jobs for people. Why is it then that greatest expansion of government spending in our history has resulted in a lousy economy? The reason is that government has to get money from somewhere, whether it be through taxes or through borrowing from the credit markets. It is like trying to fill a swimming pool by taking water out of one end and pouring it into the other end. Borrowing water from other people's swimming pools might temporarily raise the level in yours, but someday the water has to be paid back with interest. Do this long enough, and you will have no water in your swimming pool. Unless we get a handle on deficit spending soon, the United Sates of America is doomed to become a 2nd rate economic power. There is a fundamental difference in belief between the two candidates on government spending and the role of government. Given the current, economic crisis, where the government has tried to borrow our way to prosperity but instead has borrowed us into the poor house, this difference in philosophy between the two candidates is a strong compelling reason to vote for John McCain. He is the only candidate in the two main parties that has acknowledged that spending is out of control and has promised to do something about it. He has proposed a government spending freeze, which is the right solution to lower the deficit long term. Barack Hussein Obama has promised to cut 40 billion in unnecessary federal programs, while at the same time proposing a trillion dollars in more spending over 4 years. (3) Even more disturbing is his plan to send 845 Billion dollars to other countries to help with poverty. The bill, called the Global Poverty Act, is the type of legislation, "We can and must make a priority," said Obama, a co-sponsor. (10) Barack Hussein Obama was voted the most liberal person in the senate. (30) This is the same person who praised Ted Kennedy for "understanding" how government can solve people's problems. Ted Kennedy has spent a lifetime getting the government to spend more of your money. This road will lead us to disaster unless we turn it around. Our selection in November is about more than just the proposals each candidate has made so far. Barack Hussein Obama is a tax and spend liberal.(3)(4) There is no reason to think that his tax increases and spending increases will stop once he achieves what he now proposes. If the Democrat controlled Congress gives him what he wants, this will encourage him to propose new spending programs, and possibly new taxes to pay for it. 3. Who is Barack Hussein Obama running against? The debt that we have now is not the fault of any one administration, but several. However, President George Bush deserves much of the recent blame for driving up the national debt. Those of us who voted for George Bush thinking that he was a fiscal conservative, were sold a bill of goods. He is, in fact like his father, a fiscal liberal who adopted many of the Democrat ideas, like No Child Left Behind, and prescription drug coverage for Medicare. George Bush has single handedly destroyed the Republican party by abandoning the principle of limited government that the Republicans believe in. This does not mean, however, that we should put a bigger liberal in the White House. From the beginning, Barack Hussein Obama, has made his campaign about the failures of the Bush administration. From his rhetoric, you would think that he was running against George Bush, which is taking advantage of the unpopularity of the president. George Bush, however, is not running for office, and it seems unfair to so strongly make John McCain and George Bush out to be the same person, which they are not. (8) 4. The Debasing of our currency How money gets into our economy is complex. I think that I understand nuclear physics better than I understand our monetary system. What I do know is that borrowing from foreign countries increases the portion of the money supply called M3. If the money supply increases faster than the availability of goods and services, then this monetary inflation will result in price inflation, because too many dollars are chasing too few goods. The bottom line is that monetary inflation increases demand, causing prices to increase. I have been commenting for years that the money supply was expanding out of control. The end result is that our currency has declined in relation to other world currencies, which drives up the price of imports, oil, and everything else. Our currency is not backed by anything like gold. The currency is only worth something just so as long as people are willing to accept it as payment for goods and services. Putting more money into circulation means that other countries are less willing to accept it, driving down its value. (9) The fundamental problem here is the same cause as all our other problems, which is that the government borrows hundreds of billions of dollars every year. Someday this debt will have to be repaid, and we are going to suffer the consequences because of it. Right now, our whole economy depends the willingness of other countries, like China, to lend us money. 5. The Mortgage Debt crisis Despite claims on the left that this is a failure of capitalism, this was a problem that was entirely created by the government.(29) Fannie Mae and Freddie Mac are private companies created by the Federal Government (20) which back about half the mortgages in the country.(14) Because these institutions are backed by government support, they are more likely to engage in risky behavior.(14) These two organizations also give money to political campaigns. (14) There is no company that has more powerful lobbying in Washington than Fannie Mae.(21) Some politicians like Democrats Christopher Dodd, Charles Schumer and Barney Frank have opposed attempts to regulate these organizations (15) despite warnings from the Wall Street Journal (15) Alan Greenspan, the Chairman of the Council of Economic Advisors to the President, Bush's Secretary of the Treasury (16), President Bush (18) and finally John McCain (25) who tried unsuccessfully in 2005 to introduce legislation to control these organizations.(29) Obama and Dodd are the two largest recipients of political contributions from Fannie Mae and Freddie Mac.(29) "Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis."(16). Raines is now an advisor to Obama. (15)(16). The Community Reinvestment Act, signed into law in 1977 by Jimmy Carter, mandates that lenders lend to high-risk borrowers.(17) Bill Clinton strengthened this act to encourage the practice.(19)(25)(27)(29) From a Clinton White House press briefing: "CRA reform will generate billions of dollars in new lending and extend basic banking services to the inner cities and to distressed rural communities around the country."(26) "In a clip taken from a Sept. 25 interview on ABC's "Good Morning America," Clinton says: "I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress, or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac."(28) Meanwhile, Congress is considering requiring Fannie Mae and Freddie Mac to direct substantial amounts of money into the ACORN Affordable Housing Fund (22), which is an organization involved in various scandals including embezzlement and voter fraud.(22) Obama has been closely tied with ACORN.(23)(24) In short, the government created this problem, largely with the help of liberal politicians. Why would we trust liberal politicians to fix the problem? 6. Trade Barack Hussein Obama has proposed renegotiating the North American Free Trade Agreement to protect jobs in the United States. Although this sounds nice, free trade has created more jobs in the United States than it has cost.(13) The United States also has a long history of occasionally engaging in protectionism and it has always hurt us and not helped us. 7. Taxes The political left has unfairly presented the case that the Bush tax cuts, which are due to expire in 2010, consist primarily of tax breaks for the rich. This notion has been widely echoed by the left leaning press, but it is not supported by the facts.(5) According to a December 2007 CBO study, in 2005 the top 1 percent of households earned 18.1 percent of income and paid 38.8 percent of individual federal income taxes. The top 20 percent earned 55 percent of income and paid 86.3 percent of individual federal income taxes. (4) Barack Hussein Obama claims that he will lower taxes for 95% of Americans but this is impossible since 50% of the population pay almost no income taxes. The way he proposes to lower taxes on people who do not pay taxes is to give them a tax credit that will entitle them to a refund on taxes that they didn't pay. In short, this is another form of welfare. When the left says "tax breaks for the rich", what they really mean is that the people who don't pay taxes should have gotten a bigger handout. (31)(32) Obama also proposes to increase almost every kind of tax out there, including income taxes, capital gains, the corporate tax, which is already the second highest in the world (6), and a new carbon tax. We don't want to kill the goose that laid the golden egg. The economy works best when people are free to keep more of their money. This gives an incentive for people to earn and produce. Milton Friedman showed that throughout the world, GDP is inversely proportional to how much the government taxes its citizens.(11) Americans are some of the hardest working people in the world and this is because the government lets them keep more of the fruit of their labors. John Kennedy understood that having the top tax rate too high is punitive and discourages hard work and investment. He lowered the top tax rate, and brought in *more* revenue. Obama's top tax rate increase will effectively put some people in the 48 to 56% tax bracket. (1)(2) It does not make sense to cut taxes with such huge budget deficits, but it doesn't make sense to increase taxes either. Tax increases rarely produce reduction in the federal budget deficit. Instead, they give the liberals in congress an excuse to spend more of your money. (Why then did Bill Clinton balance the budget? Because he had a conservative congress, the dot com boom, and a "peace dividend" from severely cutting military spending.) 8. The Economy The economic growth rate for the last 5 years has been ... 2003 2.45 % 2004 3.10 % 2005 4.40 % 2006 3.20 % 2007 3.20 % 2008 2.20 % Compared to the inflation rate, we were doing pretty well until recently. For this year, the economic growth rate has dipped below the inflation rate, which means that in terms of real dollars, the economy has contracted this year by somewhere around 1 to 2%. This still doesn't even come close to meeting the technical definition of a recession and hardly qualifies as a disaster. There are some areas of the country, however, that are harder hit than others. Most of the Midwest has probably been in a recession for years now. Some other areas of the country are doing better. If you were to ask most people if they are doing better or worse than they were 8 years ago, I suspect that most people would say that they are doing better. What we see now is a PANIC in both the credit markets and the stock markets. This PANIC is justified, because the government created a financial crisis by encouraging banks to make bad loans. How this will play out in the near future is uncertain. The United States of America has a strong economic base so I am optimistic for the future. 9. What To Do About The Economy Just changing the political party that occupies the White House is no guarantee of economic improvement. Many economically depressed countries in the world elected a charismatic socialist leader who made things worse, not better. It is O.K. to say that you want change, just so long as that change is taking you in a positive direction. Barack Hussein Obama's plan for stimulating the economy consists of three things: 1. Trade restrictions. 2. Increased taxes. 3. Spending all of those tax increases and then some on new federal programs. This is a recipe for disaster, as the trade restrictions and increased taxes will most certainly hurt the economy, and the new programs are of questionable benefit. Barack Hussein Obama talked in the debate about putting people to work on new energy programs. How many people can be reasonably expected to be employed this way? The end result of an Obama presidency is that the country will be deeper in debt. The right way to stimulate the economy has alway been to lower government spending and not increase taxes. The economy not only works best when people can keep more of their money, but also when the government is not wasting or misallocating resources. Over time, a growing economy will help to reduce the deficit. If we were to keep tight controls on government spending or freeze government spending, then we could eventually reach a balanced budget. 10. Freedom There is not a lot of civics education these days. I wonder how many people understand that the United States government was founded on the principles of limited government and limited taxation? Instead most people seem to only be interested in what the government can do for them. The Democrat Party platform spells out certain "rights" that they think that people have. Most of these "rights" consist of giving away freebies from the government. If a "right" involves taking money away from other people, then it is not a right at all. It is a handout. It is a form of welfare. If someone else is entitled to a portion of your income, then you become in part a slave to that person. You can't walk up to your neighbor and tell him that because of your economic difficulties that you are going to start taking by force a portion of his income. You would be arrested for extortion, but governments do this all the time. Freedom is not the natural state of man. Throughout history, most people of the world have lived under oppressive governments. For this reason, we must guard our freedom very carefully, and not give it away to some sweet talking socialist. The power to vote is also the power to take away our liberty. In socialized and partially socialized countries throughout the world, there are fewer rich people, but the poor are far worse off in those countries as well. So many people are against capitalism, but this is biting the hand that feeds us. Governments do not create wealth, but instead move it around and use it up. 11. Healthcare Recently my allergist wanted to charge me $382 for a 15 minute exam. This caused me to rethink my position on healthcare. This is a major departure from my other positions listed above. The system we have now is far from a free market approach to healthcare, because the government has its hands in every aspect of healthcare. Government not only subsidizes healthcare through Medicare, Medicaid, programs like CHIP, veteran's programs, but also major tax subsidy for employer provided 3rd party insurance. It is estimate that half of all healthcare is government subsidized.(7) The tax break for 3rd party insurance is especially insidious because it has created a system where everybody expects somebody else to pay for their health care. This system seems to have been deliberately created to move us toward socialized medicine. When the government subsidizes anything, the costs go up because it increases the demand. This is true in higher education where the costs have risen much faster than inflation for no apparent reason. (Compare the cost of text books to the cost of non-college technical books which are priced much more reasonably on the free market.) Just as higher education has risen in cost much faster than inflation, so has healthcare. Even those who have no healthcare insurance end up costing everyone else through emergency room visits. The free market solution to this problem is politically impossible. The free market solution would be to have less government subsidy, which we pay for anyway in taxes, and less reliance on 3rd party payers. Insurance should be there to cover catastrophes, and not for routine medical expenses, which adds a great deal of cost in paperwork and overhead. If people have to pay for more expenses out of pocket, it would introduce price competition and would ultimately lower prices. (Some medical services not covered by insurance, like plastic surgery, have been very price competitive.) John McCain wants to move us in this direction, but it is simply not going to happen. The reason why this solution is politically impossible is that now we have reached a point in this country where everyone really does want someone else to pay for their healthcare. If we can't go back to a free market system, then the current quasi- socialist system creates overhead, confusion and cost. The alternative solution is to go to a true one-payer system, which is true socialized medicine. It has the advantage of taking all the different programs and insurance and consolidating them down to one program. The way we pay for this is through employer and employee premiums and some additional taxes. The advantage of a system like this is that it would allow the government to more directly control costs and give universal coverage. This has worked well for countries like Japan, because if the government always pays the same amount for a medical procedure, then we can still have competition because patients will go to doctors and hospitals that provide the best service. Implementing such a system could be the road back to a more free market approach if we let it, by over time requiring patients to pay more routine expenses. This would introduce price competition back into the marketplace. At one time Obama and Clinton advocated a single payer system, but have since backed away from this notion in favor of more modest proposals. I can only assume that Obama-care is just the first step to a true one payer system. The disadvantage of a system like this is that patients and doctors will always try to lobby the government for more benefits. Such a system could result in a political struggle where the most politically powerful reap the most profit. 12. Conclusion Those who favor Barack Hussein Obama and the political left see all the benefits of government spending, but fail to understand the costs to our economy. Increased government spending and increased taxes tend to result in lower overall productivity. This is not what we need considering the potential financial disaster that we are headed toward. Regardless of how this election turns out, I wish the new President well and hope that he has the courage to tackle the tough issues ahead of us. Our current problems are serious, but they are not fatal, and the United States has the financial strength to overcome them. Best wishes, John Coffey References and Additional reading: (1) European Levels of Taxation: Barack Obama's Tax Plan http://www.heritage.org/research/Taxes/wm1973.cfm (2) Obama's Top Marginal Tax Rate http://gregmankiw.blogspot.com/2008/08/obamas-top-marginal-tax-rate.html (3) Obama's Trillion Dollar Spending Plan http://www.usnews.com/blogs/capital-commerce/2008/2/14/obamas-trillion-dollar-spending-plan.html (4) Obama's spending plan http://www.washingtontimes.com/news/2008/feb/22/obamas-spending-plan/ (4) In Defense of ‘The Rich’ http://jewishworldreview.com/cols/elder100908.php3 (5) Ten Myths about the Bush Tax cuts http://www.heritage.org/research/taxes/bg2001.cfm (6) U.S. States Lead the World in High Corporate Taxes http://www.taxfoundation.org/publications/show/22917.html (7) National Health Care? We’re Halfway There http://www.nytimes.com/2006/12/03/business/yourmoney/03view.html (8) John McCain isn't George Bush - and the voters know it http://www.timesonline.co.uk/tol/comment/columnists/gerard_baker/article4629087.ece (9) Dollar versus the Euro: http://www.x-rates.com/d/USD/EUR/graph120.html (10) Obama bill: $845 billion more for global poverty http://www.wnd.com/index.php?fa=PAGE.view&pageId=56405 (10) Global Poverty Act http://www.wnd.com/index.php?fa=PAGE.view&pageId=70308 (11) Tax Increases Reduce GDP http://www.nber.org/digest/mar08/w13264.html (12) The Truth about Tax Rates and the Politics of Class Warfare http://www.heritage.org/research/taxes/BG1415.cfm (13) Obama's Protectionism Won't Help U.S. Workers http://useconomy.about.com/b/2008/02/20/clinton-and-obamas-protectionism-wont-help-us-workers.htm (14) A Political Solution http://jewishworldreview.com/cols/sowell0902308.php3 (15) A Political Solution II http://jewishworldreview.com/cols/sowell0902408.php3 (16) Do facts matter? http://www.jewishworldreview.com/cols/sowell100308.php3 (17) Is Capitalism on the Ropes? http://jewishworldreview.com/cols/elder092508.php3 (18) Bailout Politics http://www.jewishworldreview.com/cols/sowell093008.php3 (19) Community Reinvestment Act http://en.wikipedia.org/wiki/Community_Reinvestment_Act (20) Bailout on wheels http://jewishworldreview.com/cols/will092108.php3 (21) What Does Fannie Mae Do? http://www.fool.com/investing/general/2004/10/06/what-does-fannie-mae-do.aspx (22) Acorn Scandal http://www.consumersrightsleague.org/uploadedfiles/Latest%20Million%20Dollar%20ACORN%20Scandal.pdf (23) RNC: Obama & Acorn Fact Sheet http://www.marketwatch.com/news/story/rnc-obama--acorn-fact/story.aspx?guid={29569FA1-136D-4B95-9D51-4EF9E87ED547}&dist=hppr (24) Inside Obama's Acorn http://www.aina.org/news/20080529155204.htm (24) Obama and ACORN: Relationship May Be More Extensive Than Candidate Says http://elections.foxnews.com/2008/10/16/obama-denies-ties-acorn/ (25) Bill Clinton helped create the sub-prime crisis! http://lgstarr.blogspot.com/2008/01/bill-clinton-helped-create-sub-prime.html (26) Press Briefing by the Clinton White House http://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html (27) High Hopes Led to this Crisis http://www.jewishworldreview.com/0908/page093008.php3 (28) Bill Clinton in McCain ad leading role http://ap.google.com/article/ALeqM5gsFBcn9TUdqDZIOHnEWKl_C2ucJgD93HA9E00 (29) Wall Street fat cats aren't at fault this time http://jewishworldreview.com/cols/jonah091908.php3 (30) Obama: Most Liberal Senator In 2007 http://nj.nationaljournal.com/voteratings/ (31) The Case Against Barack Obama, Part 1 http://jewishworldreview.com/cols/elder101608.php3 (32) The Obama and McCain Tax Plans: How Do They Compare? http://www.heritage.org/Research/Taxes/cda08-09.cfm Penny Wise Politics http://www.jewishworldreview.com/cols/sowell0930b08.php3 Are facts obsolete? http://jewishworldreview.com/cols/sowell071508.php3 Amateurs Outdoing Professionals http://jewishworldreview.com/cols/sowell082008.php3 Whose 'special interests'? http://jewishworldreview.com/cols/sowell081308.php3 Obama and McCain http://jewishworldreview.com/cols/sowell060508.php3 The vision of the left http://jewishworldreview.com/cols/sowell0900908.php3 The Galbraith Effect? http://jewishworldreview.com/cols/sowell081208.php3 Obama vs. McCain a clear choice http://jewishworldreview.com/cols/elder091108.php3 The imitators http://jewishworldreview.com/cols/sowell062408.php3 Foreign policy ‘experience’ http://jewishworldreview.com/cols/sowell0904408.php3 An Old Newness http://jewishworldreview.com/cols/sowell042908.php3 The great de-schlep-tion http://www.jpost.com/servlet/Satellite?cid=1222017491122&pagename=JPost/JPArticle/ShowFull Questioning Obama http://voices.washingtonpost.com/the-trail/2008/10/13/questioning_obama.html Democrats Covering up the Fannie Mae, Freddie Mac and Economic Crisis http://www.youtube.com/watch?v=3p1Wc2NFa3w&feature=related The Fall of Fannie Mae http://money.cnn.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm Lessons from the Bailout http://www.jewishworldreview.com/cols/williams100808.php3 Destroying Liberty http://www.jewishworldreview.com/cols/williams100208.php3 JIBJAB Parody http://www.peteyandpetunia.com/VoteHere/VoteHere.htm