July 6th, 2009

Dear Liberty Activist,

Thank you to everyone in the field who took to the streets this past holiday weekend to protest ObamaCare, cap-and-tax, the unsustainable $11.4 trillion national debt, the Federal Reserve's loose monetary policies, and other government-created evils. You are the people that make America work, and without your voices, liberty will be but a memory for the next generation.

Congress is back this week, which means that the debate over the so-called public "option" is about to heat up in the House and the Senate. If unchecked by your leadership on the ground, in your home districts and states, these sweeping federal mandates will completely transform the mechanism for delivering the limited resources of health care in this country to a system that is allocated through inefficient, low-quality public sources.

Which, of course, means you pay more for less. Tell Congress that instead of taking away your health care options, to take a hike. The switchboard number (202) 224-3121.

In today's Liberty Action Report, the public "option" will degrade and destroy health care options for Americans, WarrenToons inspires Hondurans on the grassroots level, Capitol South returns with the Senator anxious to meet Al Franken, and when it comes to the financial meltdown, it's the government, stupid! Plus, MI State Rep. Tom McMillin makes the case for citizen legislators.

Please send your letters to the editor at Robert@getliberty.org. We publish all points of view! Today, Theresa Keating writes, "I tried to e-mail the "RINO" congressman in my state to voice my disgust of his Yay vote for the cap & tax bill and they refused it because I was not of his district!"

Thank you, Theresa, for this urgent update. It is likely that if the Senate passes the cap-and-tax bill that it will need to be reconciled with the House version in conference. Which means another roll call in the House and an opportunity for any representative that voted in favor to switch votes. But, that will only happen if individuals in those 8 districts and beyond make their voices heard.

House members are not going to be persuaded by out-of-district concerns. So, that means we need adjust and instead make contact with friends and family that are in those districts and alert them to their poor representation in the House.

For Liberty,

Robert Romano
Senior Editor
ALG News Bureau

Open Source & Copyright Free

The Public "Option"
The "choice" that Congress will create is designed to degrade and, eventually, destroy those choices that Americans today take for granted.

Freedom Finding a Way
WarrenToons inspires Honduras in its bid for freedom.

Capitol South
Send in the clowns.

It's the Government, Stupid
How the Fed creates bubbles on purpose and is doing so again.

Commentary: Don't extend term limits, Michigan's 'citizen Legislature' works just fine
MI State Rep. Tom McMillin makes the case for citizen legislators.

The Public "Option"

By Robert Romano

Like all big lies, the public "option" deceives individuals not only through distortion, but also omission. And unless the American people are warned and stand up for the true health options they currently possess, Barack Obama and Congress will rapidly enact legislation that is designed to degrade and, eventually, destroy those choices that Americans today take for granted.

Through a sleight of hand, proponents of the public "option" act as if there are not already other public options already available when there are: Medicare, Medicaid, and other state and local services for the elderly, poor, and children.

This is the omission. It is designed to fool the American people that they do not already have enough "choices" in health care. That the government does not do enough already. Or that, somehow, there are not enough options currently available. Which, of course, is a lie.

The U.S. spends more on health care than any other nation. As of 2006, the Census Bureau estimates that some 201.7 million, or 71.5 percent of Americans with health insurance, get their insurance privately. 28.5 percent of those with insurance, or 80.3 million, get it from the government.

Presently, the average premium for single coverage is $4,700, according to the National Coalition on Health Care. All told, in 2007, the U.S. spent $2.4 trillion in total health care spending.

Not enough options? $2.4 trillion is just the beginning. The price tag for health care expenditures, NCHC projects, will rise to $3.1 trillion by 2012, and $4.3 trillion by 2016.

Advocates claim this will create competition between the public and private sectors—as if the private sector could compete with a "business" with an unlimited money supply that has no incentive to even operate in the black. This year alone it finds itself in a $1.8 trillion hole, before any public "option" has even been enacted.

Once passed, the federal government will cover what it can through revenue, and then just borrow and/or print the rest. What will private health carriers do?

Since they cannot charge lower rates and then borrow to make ends meet, they'll lose customers. And then have to jack up premiums ever further in order to stay solvent.

Employers on the other hand will have lost the incentive to provide coverage to employees. To save costs, they'll pass the buck back to the taxpayers, who will now be guaranteed coverage through the public "option."

The greatest misrepresentation of all is that the public "option" will at all be optional. It will not be. Because it cannot be. It is designed to crowd out private options by guaranteeing coverage on a federal level—indeed, by mandating it.

President Obama seems optimistic: "When I say if you have your plan and you like it… or you have a doctor and you like your doctor, that you don't have to change plans, what I'm saying is the government is not going to make you change plans under health reform."

Of course, even if there is no sweeping mandate to use the public "option," the law of gravity still applies—the larger mass shall attract the smaller masses towards it. This is how monopolies are formed, whether state-run or not.

The big lie is that the American people will have any choice at all but to use the public "option," which will be the only option left.

Robert Romano is the Senior Editor of ALG News Bureau.

http://blog.getliberty.org/default.asp?Display=1345

Freedom Finding a Way

ALG Editor's Note: William Warren's cartoons are now inspiring a nation, Honduras, in its fight to keep a would-be dictator at bay, as noted in the following featured photograph:

http://blog.getliberty.org/default.asp?Display=1343

Capitol South

ALG Editor's Note: William Warren's award-winning cartoons published at GetLiberty.org are a free service of ALG News Bureau. They may be reused and redistributed free of charge.

http://blog.getliberty.org/default.asp?Display=1344

It's the Government, Stupid

By Justin Williams

With the nation gripped by financial crisis, the Obama Administration still treats the economy with an ostensible cure that's worse than the disease. Barack Obama has created a commission to investigate what caused the bubbles—by further empowering the very people who caused this crisis: The Federal Reserve.

If this were a play, the curtain would open on June 2001 when the economy was beginning to head into a recession. The Federal Reserve promptly lowered the federal funds rate to 3.75 percent—a .25 percent cut. This caused new home sales to go up 8.8 percent. And hence, the Federal Reserve had created a bubble.

Lower interest rates cause businesses to invest in long-term projects because a lower interest rate in an uninhibited free market means that consumers are saving money to spend at a later date. This, then, is a good time for business owners to acquire loans to expand so that they will be prepared for the new future spending, and money is cheap.

But it is not a good thing when the Federal Reserve artificially manipulates the rate of interest, thereby creating a false sense of economic well-being.

Invariably, the next effect of the loose monetary policy is capital and labor are bid away from short-term projects and moved to long-term projects. These long-term projects, at this time, were in the form of new homes.

Because of the high consumer confidence at this time, the labor from building the long-term projects (homes) create new consumption and raise short-term profits. With all of this, the rate of interest rose with the increase in spending.

In the case of the most recent Fed-caused dislocation, the housing bubble was so big that The Economist in 2005 reported that since 2001, over two-fifths of all private sector jobs were in the housing sector. This includes the construction, real estate and mortgage brokering agents. Of course, when the bubble burst, it was all the worst for them.

The pain comes from the market fixing the damage done by the Federal Reserve's reckless policies. Now the short-term projects are bidding back the labor and capital from the long-term projects, putting the final touches on the interest rates, which are now arriving at their natural state.

This is when massive layoffs occur. It is very hard for business owners and capital investors to switch back to short-term projects overnight, while their long-term investments are becoming unprofitable.

Now this is where the government comes in with its boneheaded misdiagnosis of the problem. They see the problem as the pain, which is actually just the market reallocating the resources to their efficient uses. The real problem is, of course, the loose monetary policies that caused the boom in the first place.

The Federal Reserve along with Congress panicked that the banks were going to restrict loans. But how could they do anything else when the Federal Reserve duped them into thinking that people were saving their money? Not to mention that when the interest rate is high, banks loan out less money in general.

As Austrian Economist Ludwig von Mises said in Human Action, "The banks are faced with an increase in demand for loans. The banks believe that they have done all that is needed to stop 'unsound' speculation [which was a result of Fed policies] when they lend on more onerous terms."

But these "onerous terms" are exactly what the Federal Reserve seeks to prevent. Then, when, in response to Fed demands, the banks loosen loan terms, the Fed charges them with "unsound speculation" (the Fed's own crime) in an attempt to cover up its own culpability.

In short, the Fed tries to have its cake, by blaming the banks for "unsound speculation"—and eating it, too, by trying to get the banks to do the same thing all over again.

Now the Fed is up to the same old tricks with the Federal Funds rate, which is targeted between 0 and ¼ percent. Obviously, the Federal Reserve is trying to create another unsustainable boom causing a much bigger bubble, ensuring that the next crisis will be even worse than this one.

Once all is said and done, the American people should expect the same old blame game, with the politicians blaming capitalism and free markets for the ills Big Government itself, created.

Justin Williams is a Contributing Editor of ALG News Bureau.

http://blog.getliberty.org/default.asp?Display=1342

ALG Editor's Note: In the following featured commentary, Michigan State Representative Tom McMillin shows once again that there are no lengths that politicians will go to keep their power. In this case, McMillin argues against the idea that "institutional knowledge" is necessary to run a legislature:

Commentary: Don't extend term limits, Michigan's 'citizen Legislature' works just fine

By Rep. Tom McMillin

There is yet another attempt afoot by politicians in Lansing to undermine the will of Michigan voters by changing -- and extending -- term limits.

The arguments of these politicians are usually centered on this notion that "institutional knowledge" is lost when state representatives can "only" stay six years or state senators "only" eight years. Many claim that by the time they figure out how Lansing works, they are term-limited.

Let's analyze this. If you are fortunate enough to get a new job in this economy, could you in good faith turn to your boss and say, "You know, it may take me a few years to figure out how to do my job?" I don't think very many would take that risk. But those who do would likely be out of a job pretty quickly.

I can tell you as a freshman state representative that, with a little effort and some God-given knowledge, figuring out "how Lansing works" doesn't take very long. We need legislators who aren't looking for excuses to be able to do their job. They just need to make the tough decisions necessary to rightsize our burdensome government. Besides, the "institutional knowledge" excuse makes it appear that legislators are being run by the "institution" known as Lansing bureaucrats. The fact is that the men and women we send to Lansing, our representatives, should tell the bureaucrats how things are going to be done to best serve our citizens, not the other way around. Yes, this takes leadership. Surely that's not too much to ask of our elected leaders.

Thanks to term limits, the purpose of democracy is preserved. All citizens are assured that a spirited primary and/or general election will regularly give them good alternatives.

Because of term-limits, the days where a few long-serving legislators are powerful kings and princes are gone. Gone are the days when long-serving politicians always get 95 percent of PAC and lobbyist campaign money and get re-elected 99 percent of the time. Very few current legislators would be serving in Lansing if it weren't for the current term-limits law.

Term limits have helped our state to bring in fresh blood, keep government honest and allow for the free flow of new ideas. It would be a shame to change that now, when new ideas are needed most. Term limits keep Lansing a "citizen's Legislature," and I firmly believe that we need to keep our current term-limits law in place.

State Rep. Tom McMillin, R- Rochester Hills, is in his first term representing Michigan's 45th Legislative district.

http://blog.getliberty.org/default.asp?Display=1341