By now, people all across America has heard of the curious, perplexing, and devastating story about the Bernie Madoff scheme that lost money for many investors that had been giving Mr. Madoff their trust with their funds. They were intrigued by Mr. Madoff’s advertisement that he could provide ten percent returns on their investments. Many high-profile people sought to invest in these terms only to find that Mr. Madoff was merely putting on a front.
Mr. Madoff did not have the money behind the investments to give back to his clients. If they had all cashed out at once even a year ago, he would not have had enough money. Sure, he was sending them statements on their earnings, but it was simply a piece of paper. When the bottom of the housing market dropped out this past fall, Mr. Madoff’s clients wanted to cash out and take back their money. There was one little problem: he did not have it and he had been lying to his clients for years that he did have it. Now Mr. Madoff is awaiting trial.
The federal government is now taking quite an investment from the taxpayers and from foreign nations buying American bonds. The American Recovery and Reinvestment Act, after calculating the interest that goes along with the spending in the bill itself, will cost approximately $1.3 trillion. Under the Bush Administration, the federal budget transitioned from running a surplus to running a deficit where the government was spending between three and four percent of its GDP in red figures. In other words, if one were to make $10 a day, it would be comparable to spending $10.30 to $10.40 per day. It does not sound like a big deal in that context, but take it to what the 2008 figures were: $2.9 trillion in spending versus $2.5 trillion in revenue. That is about $400 billion in deficit for just that one year.
Under President Obama’s new proposed budget and after the new American Recovery and Reinvestment Act of 2009 has been signed into law, federal deficit spending will increase to about 13 percent of the American GDP. This does not include the new idea of federal assistance in refinancing sub prime mortgages to protect homeowners from foreclosure. Going back to the $10 per day example: that would be like spending $11.30 per day and running $1.30 in the red every single day.
So the federal government is somehow going to convince Americans to continue to give Uncle Sam more money and convince other nations such as China to buy American bonds to help bankroll these new programs with the guarantee that Americans and foreign investors will see a return in their investments.
Does this not sound a little too similar to the Bernie Madoff story? Is this not like a poker player trying to bluff a pair of sixes to appear as four of a kind? The current administration and Congress will try to sell this as a temporary deficit that promises to yield returns that will increase the GDP and cure the federal deficit.
Will the federal government have a sealed indictment if they have to turn to its clients and say they do not have the money to return the investment?
Saturday, February 28, 2009
Wednesday, February 11, 2009
Tuesday, February 10, 2009
One Bad Economy, Two Solutions
The economy has suffered a very serious recession. The housing crisis that resulted in the meltdown was only the beginning of some of the losses the American public has seen as of late. The federal government has responded to this by cutting interest rates, printing more money, and by bailing out several lending institutions and private industries. The government would not have reacted with such urgency had this been a minor concern. President Obama is now several weeks into his term and is pushing one solution to the economy along with his Democratic colleagues. His political opponents in the House and Senate are rallying around another solution. To arrive at an informed conclusion regarding the American Recovery and Reinvestment Act of 2009, one must consider both arguments.
1) Argument for the American Recovery and Reinvestment Act of 2009
To stimulate the American economy, people who are currently out of work must be put to work in order to generate an income. To help generate increased employment, federal tax money can be put to use in employing private citizens in long-term jobs with steady incomes. This money can go toward infrastructure projects for American schools, roads, bridges, and many other areas that need to be addressed given the difficult economy.
Additional money needs to be dedicated to educational needs for public schools that are overburdened and currently struggling to meet the needs of a modern education. Children will then be the direct beneficiaries of the stimulus by having proper and efficient school buildings in which to learn. Teachers will have the facilities available in order to provide the best possible education.
Building new schools, improving roads, and exploring energy alternatives are all ways in which qualified citizens will maintain work and also benefit their communities and nation. Alternative energy sources including wind, solar, and hydrogen power are vital in the future of the nation; therefore action must be taken to put people to work to develop these technologies.
When the people who have lost their jobs and seen their investments become depleted once again have a steady income, they will be more likely to invest again as the economy stabilizes. Banks will be more likely to give loans for first time homebuyers. The stock market will see an increase in investors’ collective confidence. The average citizen’s discretionary income will increase, which will allow them to spend it and benefit other places of business that are currently hurting. While the funding will be public funding, this will ultimately be an investment that will lead to long-term benefits. In order to stimulate the economy, the government must make an investment that will reap great rewards and set the economy on the right path toward a better future.
2) Argument Against the American Recovery and Reinvestment Act of 2009
The federal budget is already running a deficit, inflation is rampant, the value of the U.S. dollar is decreasing, and unemployment is on the rise. Given these circumstances, stimulating the American economy may seem to be an appropriate response. What does stimulating the economy mean? If the stimulus comes from the federal government, it must be from public tax dollars or from borrowing money from other nations. In the case of the American Recovery and Reinvestment Act of 2009, it could very well contain tax money, borrowing money from the Chinese, and then if not enough can be borrowed from the Chinese, the Federal Reserve will need to print more money. The money that would be printed would lead to a devaluation of the dollar.
To spend this much money at a time when the economy is already in a difficult time is similar to a business that is in the red deciding to expand. Only $47 billion is committed to repairing American infrastructure projects. The vast majority of the money in this bill is either committed to the creation of jobs within the government or to special interest groups such as the $335 million committed to STD prevention.
The risk of this bill being implemented will be to have what occurred during Jimmy Carter’s administration when the American public experienced double-digit inflation, unemployment, and interest rates.
The alternative plan is to cut taxes and allow some of the money that would go to the federal government to remain in the hands of the taxpayers. This eliminates borrowing from China, printing more money, and spending more money while the federal budget is running a deficit. Cutting taxes, reducing federal spending, and placing the recovery of the economy on the shoulders of the American people will ultimately lead the United States out of the recession. With additional money and reduced federal spending, people will be more likely to invest their money, expand private businesses, and create jobs independent of public funding. These same private businesses will also develop energy alternatives such as nuclear power, hydrogen power, and hybrid technologies based on the market demands for an alternative energy source.
Such steps, given additional detail, would help reduce the federal budget deficit, strengthen the dollar, and create jobs without reaping a debt that will be felt for generations to come. Instead of compounding the economic crisis, it would instead be absorbed with the chance to recover from it.
1) Argument for the American Recovery and Reinvestment Act of 2009
To stimulate the American economy, people who are currently out of work must be put to work in order to generate an income. To help generate increased employment, federal tax money can be put to use in employing private citizens in long-term jobs with steady incomes. This money can go toward infrastructure projects for American schools, roads, bridges, and many other areas that need to be addressed given the difficult economy.
Additional money needs to be dedicated to educational needs for public schools that are overburdened and currently struggling to meet the needs of a modern education. Children will then be the direct beneficiaries of the stimulus by having proper and efficient school buildings in which to learn. Teachers will have the facilities available in order to provide the best possible education.
Building new schools, improving roads, and exploring energy alternatives are all ways in which qualified citizens will maintain work and also benefit their communities and nation. Alternative energy sources including wind, solar, and hydrogen power are vital in the future of the nation; therefore action must be taken to put people to work to develop these technologies.
When the people who have lost their jobs and seen their investments become depleted once again have a steady income, they will be more likely to invest again as the economy stabilizes. Banks will be more likely to give loans for first time homebuyers. The stock market will see an increase in investors’ collective confidence. The average citizen’s discretionary income will increase, which will allow them to spend it and benefit other places of business that are currently hurting. While the funding will be public funding, this will ultimately be an investment that will lead to long-term benefits. In order to stimulate the economy, the government must make an investment that will reap great rewards and set the economy on the right path toward a better future.
2) Argument Against the American Recovery and Reinvestment Act of 2009
The federal budget is already running a deficit, inflation is rampant, the value of the U.S. dollar is decreasing, and unemployment is on the rise. Given these circumstances, stimulating the American economy may seem to be an appropriate response. What does stimulating the economy mean? If the stimulus comes from the federal government, it must be from public tax dollars or from borrowing money from other nations. In the case of the American Recovery and Reinvestment Act of 2009, it could very well contain tax money, borrowing money from the Chinese, and then if not enough can be borrowed from the Chinese, the Federal Reserve will need to print more money. The money that would be printed would lead to a devaluation of the dollar.
To spend this much money at a time when the economy is already in a difficult time is similar to a business that is in the red deciding to expand. Only $47 billion is committed to repairing American infrastructure projects. The vast majority of the money in this bill is either committed to the creation of jobs within the government or to special interest groups such as the $335 million committed to STD prevention.
The risk of this bill being implemented will be to have what occurred during Jimmy Carter’s administration when the American public experienced double-digit inflation, unemployment, and interest rates.
The alternative plan is to cut taxes and allow some of the money that would go to the federal government to remain in the hands of the taxpayers. This eliminates borrowing from China, printing more money, and spending more money while the federal budget is running a deficit. Cutting taxes, reducing federal spending, and placing the recovery of the economy on the shoulders of the American people will ultimately lead the United States out of the recession. With additional money and reduced federal spending, people will be more likely to invest their money, expand private businesses, and create jobs independent of public funding. These same private businesses will also develop energy alternatives such as nuclear power, hydrogen power, and hybrid technologies based on the market demands for an alternative energy source.
Such steps, given additional detail, would help reduce the federal budget deficit, strengthen the dollar, and create jobs without reaping a debt that will be felt for generations to come. Instead of compounding the economic crisis, it would instead be absorbed with the chance to recover from it.
A Video Well Worth Watching
While this video certainly takes sides as to who is to blame for the economic recession, it is an interesting look at how the American economy ended in its current state. Watch this video with the preface that while there is plenty of blame to go around regarding this crisis, this will at least break down what happened.
"Burning Down the House: What Caused Our Economic Crisis?"
"Burning Down the House: What Caused Our Economic Crisis?"
Friday, February 6, 2009
Educational Mediocrity: American Public Schools
Horace Mann (1796-1859) once stated that education is the great equalizer. He believed that a publicly funded education system was necessary in order to provide the chance for everyone to learn, not just those that could afford it. Mann was skillful in convincing the public that this needed to be done in order to provide an assimilated American culture that would be capable in participating in a representative democracy.
Public schools became increasingly popular and offered a taxpayer-funded education while a private school was still available to those that would choose to pay more money. Parents continue to have this choice. A majority of students attend public schools, take advantage of this government service, and exemplify Mann’s dream of education being the great equalizer.
In recent decades, public schools have not enjoyed the success they once did. Graduation rates have tumbled, truancy has risen dramatically, and achievement levels have sagged when compared to those of other nations. Much discussion and billions of dollars of public tax money has been given to address the problem of a declining public education system without substantially positive results.
What is wrong with the public schools? There are many answers, but they are not pleasant.
1) Class Content.
The essential classroom content taught in public schools was originally intended to be language arts and communicative skills, sciences, mathematics, art, music, and social studies. The content of these courses would ideally be relevant to life skills and future jobs. Many students graduate from high school without the knowledge of how to balance a checkbook. Some cannot identify where major nations are on a globe. Others cannot differentiate the difference between “your” and “you’re.” Contemporary classrooms often have multicultural sensitivity training in social studies instead of history and geography. Other examples include how to apply a condom to a banana in health class instead of applying a healthy lifestyle or reading about homosexual, bisexual, and transgender acceptance in literature class instead of reading the works of Melville, Twain, or Hawthorne. This does not stop at the primary or secondary levels. Look at what occurs at American universities. How about a little bit of “Pizza & Porn”? This actually is an activity promoted during “Sexploration Week” at the University of Cincinatti. http://www.newstalk1130.com/cc-common/news/sections/newsarticle.html?feed=104673&article=4933616
2) The National Education Association (NEA).
Like many unions, the NEA went above its original intentions of being protective of educational employees to leading an assault on the very concepts its constituents were attempting to uphold. Is a teacher’s strike ever in the best interest of the students of a school? Is a teacher taking accountability for student performance contrary to the very nature of the teaching profession? Is bullying union members who do not back the same politics really protecting the workers? As troubling as it may seem, the original intentions of the NEA are obsolete. Now the NEA literally sells itself out to certain politicians because they know that their influence will not diminish as long as said politicians are still in power.
3) Too Much Building…
Public schools and their districts have nearly become obsessed with building new school buildings citing that the old facilities do not meet the demands of a modern education. A follower of educational research will note that the correlation between student learning and those same students’ learning facilities is very weak. Should a school be large enough and safe enough to accommodate its students’ needs? Absolutely. However, is it necessary to have a new school building constructed in a district with dropping enrollment and buildings that, while dated, are safe? How is this fiscally responsible? Instead of focusing on building palatial school buildings with fancy offices, athletic facilities, and the most advanced computer technology, would it not be more beneficial to address the failings of its schools by analyzing what is going on the classroom?
4) …Not Enough Teaching
Would student learning improve if effective teachers were compensated for their results and ineffective teachers weeded out of the system? If a car salesman does not sell cars, he usually loses his job. On the contrary, a salesman that sells cars is rewarded for his success. If a teacher’s students are not learning, they are often kept since they have tenure after teaching for a number of years. Is there not a problem with this? Why is the public paying a teacher to run off copies of textbook lessons and worksheets instead of developing innovative lessons that teach students the content in a way that fosters effective learning? All too often, public school teachers settle for what is comfortable and do not like people to intrude upon something that is comfortable.
5) Opposition to School Choice
School choice allows public money to be given to low-income families that otherwise would either not be able or less likely to afford sending their kids to private schools. While definitive research has yet to provide irrefutable proof regarding the success of school choice, some themes tend to be present. Students that are the recipients of school choice vouchers have a high graduation rate, the cities that have school choice have seen it expand quickly, and the public schools and teacher’s union hate it. Why? They fear that more people will want to send their students to private schools, thus decreasing student enrollment, thus decreasing the need for bloated staffing. However, school choice may be a good thing for the public schools. They provide competition. For a business to compete with another business, it must offer a product or service that is similar, equal, or better than the other business. Currently, this does not apply to public schools. The recipients of school choice vouchers are beginning to understand this, and the public schools want to kill it rather than improving the product (instruction) they offer.
Education is indeed the great equalizer. Without a proper education, people are not prepared to enter professional lives nor will they be able to function as informed citizens in their society. Since public education has long become a mouthpiece for a very one-sided agenda, many Americans are being fleeced blind by the system they bankroll that produces ill-prepared graduates.
Wednesday, February 4, 2009
What If...?
During the presidential campaign of the past fall, several commentators, pundits, and politicians criticized President Barack Obama for being naïve in his view of geopolitics. The idea of sitting down with foreign leaders such as Iranian president Mahmoud Ahmadinejad met sharp criticism from the political right as an example of the Democrats’ perceived inexperience with an increasingly dangerous world.
The Democratic platform on social issues also was the subject of much criticism from the political right. Republicans attempted to highlight past failures of social programs that had been the recipients of federal tax money in an effort to show that higher taxes and higher spending was also naïve. The Democrats then countered by arguing that in order to work through the existing socioeconomic problems, that additional government programs would be needed to help alleviate poverty and unemployment.
Liberals do not like their ideals to be trivialized and considered naïve. Liberalism is by its very nature idealistic and hopeful for a better future based on top-down motivated responsibility. Liberalism believes that if a program is sponsored by the government, it will be more effective in motivating the general public than if a set of ideas is generated from the ground-up.
Confessional Christianity has lost any place it ever had in contemporary liberalism. Christianity has beliefs and ideals that are considered by liberals as too divisive and, in some cases, hateful. The sixth commandment is perceived as perhaps the most divisive of the beliefs of Christianity. The sixth commandment states “You shall not commit adultery.” Adultery, as defined in the Bible, is any sexual relation outside of the bonds of marriage. This includes sexual thoughts, words, and actions outside of marriage. Marriage is defined in the Bible as between one man and one woman despite several people in the Old Testament having practiced polygamy.
What if everyone followed the sixth commandment perfectly? At the risk of being naïve, consider the following scenarios that would occur of everyone in the world followed the sixth commandment:
1) Venereal diseases would be virtually eradicated within three generations.
2) No infidelities would occur, thus lowering divorce rates, spousal abuse, and broken homes.
3) Prostitution would be gone.
4) Pornography would be gone.
5) Abortions would decrease substantially as married women do not frequently seek them.
6) Would the Arabian states dislike the west as much?
7) The debate regarding what is and is not marriage would not exist.
8) Teenage pregnancies would be gone (unless they were already married).
9) Fathers would be more likely to be integral in their children’s lives.
10) The government would no longer need to spend taxpayer money on STD prevention.
The concept of following the sixth commandment flawlessly may seem to be too idealistic, too backward, and too divisive for contemporary society, but the effects of its implementation are truly remarkable to consider. This is only one commandment.
Are the intentions and effects of following this "backward" commandment really divisive and hateful?
Would the above scenarios be more restrictive in American lifestyles or more liberating?
Perhaps that is naïve, but at least it is free and does not cost $335 million of public money.
The Democratic platform on social issues also was the subject of much criticism from the political right. Republicans attempted to highlight past failures of social programs that had been the recipients of federal tax money in an effort to show that higher taxes and higher spending was also naïve. The Democrats then countered by arguing that in order to work through the existing socioeconomic problems, that additional government programs would be needed to help alleviate poverty and unemployment.
Liberals do not like their ideals to be trivialized and considered naïve. Liberalism is by its very nature idealistic and hopeful for a better future based on top-down motivated responsibility. Liberalism believes that if a program is sponsored by the government, it will be more effective in motivating the general public than if a set of ideas is generated from the ground-up.
Confessional Christianity has lost any place it ever had in contemporary liberalism. Christianity has beliefs and ideals that are considered by liberals as too divisive and, in some cases, hateful. The sixth commandment is perceived as perhaps the most divisive of the beliefs of Christianity. The sixth commandment states “You shall not commit adultery.” Adultery, as defined in the Bible, is any sexual relation outside of the bonds of marriage. This includes sexual thoughts, words, and actions outside of marriage. Marriage is defined in the Bible as between one man and one woman despite several people in the Old Testament having practiced polygamy.
What if everyone followed the sixth commandment perfectly? At the risk of being naïve, consider the following scenarios that would occur of everyone in the world followed the sixth commandment:
1) Venereal diseases would be virtually eradicated within three generations.
2) No infidelities would occur, thus lowering divorce rates, spousal abuse, and broken homes.
3) Prostitution would be gone.
4) Pornography would be gone.
5) Abortions would decrease substantially as married women do not frequently seek them.
6) Would the Arabian states dislike the west as much?
7) The debate regarding what is and is not marriage would not exist.
8) Teenage pregnancies would be gone (unless they were already married).
9) Fathers would be more likely to be integral in their children’s lives.
10) The government would no longer need to spend taxpayer money on STD prevention.
The concept of following the sixth commandment flawlessly may seem to be too idealistic, too backward, and too divisive for contemporary society, but the effects of its implementation are truly remarkable to consider. This is only one commandment.
Are the intentions and effects of following this "backward" commandment really divisive and hateful?
Would the above scenarios be more restrictive in American lifestyles or more liberating?
Perhaps that is naïve, but at least it is free and does not cost $335 million of public money.
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