Sunday, April 15, 2018

Stopping Inflation

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We talked about the problem of inflation last week.  The picture above shows a good example of why inflation should be stopped.  Somebody who had $20 in 1988 could just about feed their family for a week.  I was married in 1988 and remember a food budget of $10.00 per week for my wife and myself.  If they put that $20.00 in a jar, by 2013 that same $20.00 might just make a decent meal.  This discourages people from saving and encourages spending.  

How do we stop inflation?  The best way is to slow or stop money creation.  One the the best ways to do this is to create a system where money cannot be created out of thin air.  Currently, money is primarily created out of thin air by two methods, deficit spending by governments and expansion of credit by the banking industry.

This wasn't always the case.  Traditionally, paper money was a "note" or "IOU" statement that represented a real commodity.  Gold and silver have been particularly popular.  The $20 bill used to be redeemable for an ounce of gold.  Currently, that ounce of gold can be traded for more than $1000.  That is plenty of groceries.  If money is tied to a commodity like gold or silver, in order to print more, you have to acquire more gold and silver.  That stops inflation in two ways.  The first is that it stops overprinting of money.  The second is that even if money is overprinted, there is an underlying understanding as to what the money is worth.  A $20 bill=an ounce of gold=two carts of groceries.

People correctly argue that there is now probably too much money to go back to the Gold Standard ,   However, there is no reason to not use a variety or Basket of Commodities .  Although the value of some commodities change relative to others, this is usually a slower and less drastic process than how paper (or electronic) money with no backing changes value.  An ounce of gold is still the same chunk of metal it has been for thousands of years.  However, the value of a paper dollar relative to that metal changes by the second.  I believe the biggest error people make is saying that the price of gold has changed.  It should be said that the value of the dollar has changed.

We should make all paper or electronic money exchangeable for a real asset that can be touched.  We should also require that any bank or government that creates more money should have to acquire more of that asset first.  That way, the value of money will be stable and won't be manipulated by those in power for their own gain. 

Sunday, April 8, 2018

The Problems With Inflation

Inflation is a difficult subject, which is why most politicians avoid it.  Most definitions of Inflation tend to focus on one of its main effects, increase in prices.  Inflation is really an increase in the money supply relative to the number of goods being produced.   If there is more money than goods, the money is worth less (if there is too much money, it becomes worthless).  The opposite condition is called "deflation."  Deflation occurs when production of goods increases and more money is not created.

There is a general rule.  Inflation is good for whoever gets the money first (i.e. government, banks, large corporations) and deflation is good for whoever gets the money last (small businesses, workers).  Governments usually create the money, so they try to convince the populace that inflation is good.  That is because they want to have the ability to create money in order to reward constituents.  Notice that the Federal Reserve in the United States has an inflation target, not a deflation target or stability target Why is 2 percent the Federal Reserve's inflation target? Because it is. In the United States, money creation has been shifted to the banking system through creation of credit.  Banks also have an interest in creating inflation.  The more money they can lend, the more profit they can make.    Actually neither inflation nor deflation is an ideal condition.  The best condition is where the amount of money roughly matches increases in production and population.  Since this cannot be achieved perfectly, a money should go through brief periods of inflation and deflation, with the goal of keeping money stable. 

Problems with inflation--

For the individual--  Worker's' salaries do not keep up with inflation.  Workers in the United States today have seen their buying power decrease steadily.  Inflation also takes away the power of saving and investment for the average family.  30 years ago, somebody who had a million dollars or won a million dollars in a lottery was considered to have enough money to last forever.  They could be said to be rich.  Now, people who are trying to retire with one million dollars in investment accounts are finding it is not enough money for even a modest lifestyle.

For public policy--  Inflation creates an environment where the government is trying to catch its own tail with various entitlement programs.  The federal government collected little money for entitlement programs like Social Security and Medicare.  In 1975, the average recipient of Social Security received around 200 dollars per month.  What would that buy today?  Now, the average recipient receives more than $1300 per month.  The problem is that when they were workers in 1975, they only paid an amount of Social Security Tax sufficient to cover $200/month.  In fact, most did not earn enough annual income in 1975 to support a $1300/month payment later in life.  Inflation means that government has to cover that difference.  The crazy thing is that $200/month in 1975 bought more than $1300 today.  The average rent payment was only about $80 per month  Rent of Primary Residence Inflation Calculator .  Due to inflation, an $80 monthly rent is impossible today. 

Next time, we will go into some plans to stabilize currency. 

Saturday, March 24, 2018

Make Votes Count Again

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Approximately 1/2 of all voters skip general elections in the United States.  The number is even higher in regular elections that do not include voting for a major office like president.  Both the Republican and the Democratic candidates in the 2016 election only had about 1/4 of the voters choose to their electors.  No candidate for president in the lifetime of most people has been endorsed by 1/3 of the voters.

The primary reason for voters skipping elections is lack of choice on the ballot.  Most people do not know the reasons, but instinctively know that the ballots are rigged, forcing them to make a choice between "the lesser of two evils."  It wasn't always like this and has gotten much worse since the candidacy of Ross Perot and the election of Jesse Ventura.

There are dozens of tricks which legislators who are members of the Democratic and Republican parties use to rig the ballots.  The primary technique is the  "two largest" laws.  These laws state that only candidates from parties which are either the "two largest" by voter registration or whose candidates received the "two highest" vote totals in a prior election get special privileges.

An example of this is the presidential primary system.  In many states, only the "two largest" parties get to choose their own presidential candidates.  Other parties will have the names of whatever candidate won the primary in that state.  This is called "substitution."  For example, the Republican Party of Ohio was able to "substitute" Donald Trump's name for that of John Kasich on the Ohio ballot.  Other parties did not have that privilege. 
In Arizona, people are only allowed to register to vote as members of the party whose candidates received the "two highest" vote totals for governor (Republican and Democrat) without going through a special procedure.  Those who don't check the Republican or Democratic box are considered "other."  So why doesn't another party just get a higher vote total in a future election?  Since people are not allowed to register as members of their party, they are not allowed to have candidates on the ballot.  It is Republican vs. Democrat until the law is changed. 

Some other random tricks:

North Carolina allows people to donate more money to the Republican and Democratic parties than the other parties.

In Pennsylvania all candidates, except Republicans and Democrats, must collect 5000 signatures to run for office and those signatures must be spread out over a 10 county area.

In Arkansas and Texas, candidates, except the Republican and Democratic (see the pattern) must file to run for public office the year BEFORE the election.

The Conscious Conservative belief is that every qualified candidate should have an equal chance to be on the ballot.  All "two largest" laws should be immediately repealed.  If states wish to have a year before or ten county requirement, let them, but they must apply to every candidate.  Anything else is just a rigged election.

Saturday, March 17, 2018

The Main Goals of Conscious Conservative

It is easy for pundits, politicians and people, including myself, to get lost in the myriad of issues presented today.  However, I find it necessary to re-focus every once in a while and get back to what is important.  Most issues are just side distractions.  The issues I list below are the ones I believe are key in determining how a government acts towards its people.  If we change these policies, all others will fall into place.

There are four things that need to be accomplished, in no particular order.
  1. Restore the vote to the people. Right now, just about every ballot in the United States is rigged in favor of keeping Democrats and Republicans in power. There is no reason that every person who is qualified to run and wishes should not be on the ballot.
  2. Return to a sound currency. This is the hardest for people to understand. An inflationary currency benefits those who get the money first. Economists will say, “We need inflation because it gets people to spend.”
  3. Get rid of the income tax. The US ran for 170 years without an income tax being a major part of government income. The main purpose of taxation in the US, going back to Hamilton’s “Whiskey Tax,” is to control the population.
  4. Restore the sanctity of private property. Even before the Kelo Decision Kelo Eminent Domain - Institute for Justice , government began overstepping its bounds. Government takes the property of unpopular people to redistribute to those who are more popular. 
Only when the votes of people begin to count, the currency is sound, people get to keep the money they earn and people control the property they own, will the power between government and individual citizens be restored to its proper balance. Then we can begin to debate other issues.  I believe that debate will be short as these changes will make most other issues disappear.

Sunday, December 10, 2017

The Shrinking Middle Class in America

The middle class in the United States has been shrinking because it has been under attack from both ends for over 50 years. Politicians have figured out a very effective election formula.

  1. Grant special favors and give payouts to mega-wealthy donors in exchange for money to run election campaigns.
  2. Grant special favors and give payouts to poor people in order to “look compassionate” and buy votes.
  3. Get the money for all of these favors and payouts by taxing the middle class and rendering their savings useless through deficit spending.
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A middle class family now pays over 1/2 of their income in taxes and gets little to no value for it. Fifty years ago, taxes like that would have caused a riot. The middle class family could afford to buy just about everything the government provides if the government wasn’t always taking their money. Deficit spending hits the middle class disproportionately. The poor don’t have the extra money to save so don’t notice the effects as sharply, unless the price of food or gasoline is increasing. The rich make money from deficit spending. the middle class have some money to save, but what is the use? It used to be a middle class family could put $1000 in a jar or a bank and have something 10 years later. Now, that $1000 doesn’t buy much ten years later. The middle class family that saved $1000, or $10,000 or even $100,000 sees their net worth disintegrate over an average lifetime. A lifetime ago, a millionaire in the United States could afford just about anything they could desire. Now a millionaire cannot afford to live a middle class lifestyle for more than a few years.
So, the middle class worker who has seen their salary go up 30% but their after tax income rise little and the buying power of that money drop feels uneasy. The middle class person who saved their whole life to have $200,000 in a 401K, only to realize that is not enough money to live for 20 years, feels uneasy. The middle class person who just had their health insurance cancelled because of the ACA feels uneasy. Most middle class people don’t understand all of the details of this, they just feel it in their gut.
Real World: When I was young, if I had $100,000, I could have bought the house I live in currently (it sold for $55,000 in 1977), the car I drive (MSRP $3,371 in 1978) and had enough money left over to live for 20 years (at $3000/year for food and utilities). Now, for $100,000, I couldn’t buy the vehicle and have enough money left over for a year. The MSRP on the vehicle ($45,765) is about the price of an average house in 1977 ($49,000).

Saturday, November 25, 2017

The Problem With Bernie Sanders

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Bernie Sanders “socialist” ideas are bad because they are “Magic Unicorn” ideas. he promises all of these wonderful things “for free.” There is no such thing as free. When pressed on how he will pay for them, he is as slippery as ice and never gives an answer beyond, “make the other bad people pay for it.”
Bernie talks about “Medicare for all.” The closest country to Medicare for all is France.
Current US Medicare is an 80/20 plan, for which Americans pay about 3% for most of their lives in order to receive coverage at age 65.
Current French insurance is a 50/50 plan for which French workers pay around 21%.
The French receive significantly less health care in many areas than that to which people in the US are accustomed. Yes, the French system offers good basic care. However, it does not offer cutting edge, on demand care that many US consumers demand. When I talk with people from Canada and Europe, they have trouble even understanding the concept of on demand care. They think it is natural that somebody with a minor complaint waits and people with life threatening conditions get priority. They have no concept that someone with a runny nose wants care just as quickly as someone with a heart attack.
To create an on-demand 50/50 plan will require people in the US to pay a 25% payroll tax, maybe more.
To create a “Medicare for all” 80/20 plan will require a payroll tax of around 1/3 from each person.
If he said, “I propose Medicare for all, but realize that it will cost everyone 1/3 of their paycheck. However, everyone in the US will receive top healthcare.” I could support that point of view. Even if he said, “We can have a system like France, but it will cost you 25% of your paycheck,” he could at least be considered honorable.
Instead, Sanders says, “I propose Medicare for all and it will cost almost nothing.” This is what makes Bernie Sanders a lying scum of the worst kind. Or maybe he is just senile.
Here are the actual figures from Medicare for All: Leaving No One Behind - Bernie Sanders— “Under this plan, a family of four earning $50,000 would pay just $466 per year to the single-payer program” Only $466, compared to the French, which pay $10,500 on $50,000 (or Euros), or the Medicare for all figure, which would be $16,500 per year. Currently that $50,000/yr. family pays $1500/year to receive Medicare 40 years later.
How can Bernie cover someone for $466 now, when it is difficult to cover them when they pay $1500 for 40 years before the system has to pay a cent. The answer from mathematics is that he can’t. He is lying through his teeth.
So, as you can see from the “Medicare for all” sample, Sanders is talking about people getting things for nothing. “Magic Unicorns” will provide government services for everyone. If Bernie Sanders proposed a system like France or Germany, we could discuss it. It is hard to have a rational discussion with someone who is promising magical unicorns.

Thursday, November 9, 2017

Conservative View of Political Parties

Should we get rid of parties? No, the people have the right to assemble into groups in the United States.
Should we get rid of the illegal and unconstitutional system that the Dem/Reps use to control for whom people vote? Definitely.
Remember how many news stories and memes there were about “You can write in Bernie,” or “Maybe the Republicans will run someone else,” or “Maybe another Independent candidate will enter the race,” that were published during the 2016 election. That shows that most people in the United States, including those "experts" who are supposed to know in the media, do not realize that all of those options were impossible under the current legal structure. A group of wealthy, powerful Republicans looked into running an Independent candidate for president in 2016 and concluded that it was not legally allowed.
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People should know that, especially since the relative success of Ross Perot and Jesse Ventura, thousands of laws have been passed to make it difficult or impossible for anyone who is not the choice of the Republican and Democratic Party to run for office. These laws make it especially difficult at the local level, partially because federal courts are less likely to meddle in local law and partially because the Democrats and Republicans know that new parties would be more successful if they were able to start locally, so make ballot status impossible at that level.

Conservatives should support reasonable ballot laws that apply to all candidates the same.  There should not be a reason that people in the United States do not have at least six to eight choices each time they vote.  This change, more than any other, will break the grip of special interests on politics and make politicians responsible to the best interests of the voters.

Saturday, October 28, 2017

Conscious Conservativism Loses as Senator Flake Retires

I am sad to see Senator Jeff Flake go. Neither Trump, nor the person running against Flake in the primary, Kelli Ward, is a conservative. They are both populists. Ward expresses some views that are traditionally conservative and some that are very liberal, depending on what she thinks will get peoples’ attention. I can’t think of any conservative view that I have heard Trump express.
I didn’t agree with Flake on everything, but can say that he was a conservative most of the time and appeared to be trying to do what he thought was best for the United States.

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Goodbye Jeff Flake

Saturday, October 21, 2017

Why Congress Does Not Simplify the Tax Code

The problem is that there are two competing goals for the tax code. The first goal for the tax code is to raise revenue to operate the government. The second goal is to influence the behavior of citizens. This goes back to one of the first major taxes in the United States, a tax on whiskey Whiskey Rebellion . Alexander Hamilton felt the tax was a way to raise revenue from the unseemly behavior of drinking whiskey.
Congress is reticent to give up any power or control over the people. That is why people get a tax deduction for doing one behavior and a tax penalty for doing another. These objectives sometimes fight each other. For example, you get a deduction for installing alternative energy like solar or wind power only to find another government agency charges a “grid fee” for not using as much electricity from the utility company.
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Those that see the tax code solely as a means of raising revenue want the code to be as simple as possible. This makes taxes easy to collect and makes cheating on taxes more difficult.
Those who want to accomplish various other goals with the tax code, such “redistribution of wealth,” “social justice,” “supporting clean energy,” “making home ownership affordable,” “supporting working families,” “making US companies more competitive,” or whatever goal, need a complicated tax code to accomplish those goals. Of course, there are also the more unsavory goals, such as rewarding constituents and campaign donors through tax code changes.

Sunday, August 20, 2017

A Conscious Conservative Record of Civil Rights Feats

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Conservative President Calvin Coolidge believed education was the key. He supported Howard University and integration of African Americans into all areas of military and public service. President Calvin Coolidge: Civil Rights Pioneer

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Conservative Senator Robert Taft worked with civil rights groups to undo discriminatory laws passed under Democratic Party presidents, especially FDR. He proposed a fair employment bill, which liberal Democrats were unfortunately able to block.

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Senator Barry Goldwater, who has been called “Mr. Conservative,” fought against segregation in all forms in the military and in his home state of Arizona. This includes de-segregating his chain of department stores. Here is an except from an article in The New Yorker Magazine.

“Goldwater was not a segregationist, nor was he any kind of racist. He was, in fact, a lifelong opponent of racial discrimination. At the beginning of his political career, as a city councilman, he had led the fight to end segregation in the Phoenix public schools; his first staff assistant when he went to the Senate, as Perlstein tells us, was a black woman; he was a member of the N.A.A.C.P.”— He Knew He Was Right

Saturday, August 5, 2017

Do We Need More Taxes?

   Doesn’t extra tax money go to programs that rebuild infrastructure, invest in future prosperity like education and research, provide opportunities for people to escape poor circumstances, and other things that benefit us all? 
That would be wonderful if that was how it worked. In reality, most of the money goes to pay government workers. After that, much of it goes to reward either the voters that support those in power or the donors to their campaigns. Rebuilding infrastructure becomes awarding an overpriced contract to a friend or family member of a legislator to build an unnecessary project. Money for education and research goes to further political gain. The opportunities to help the poor, with the SNAP and WIC program being excellent examples, actually funnel money to large business interests with armies of lobbyists.
Government spending almost always revolves around funding for political expediency and power gain than actual need. Politicians are adept at shifting the focus away from themselves with side issues like, “We must help the poor,” and “If only the rich were paying their fair share.”

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