THE COST OF LIVING IS TOO HIGH
The Cost of Education is too High!
UNIVERSITIES HAVE BEEN SUBSIDIZED IN A MYRIAD OF WAYS BY ALL LEVELS OF GOVERNMENT. One form of subsidy has been student loans backed by the government. They have been easy to get but hard to pay off. Too many young people were enticed to enter college before they were ready or before they realized there were pathways to success that better fit their talents and interests. To keep the party going, colleges and universities created courses of study of questionable economic value. It was easy money for the big universities, because as long as the government backed the loans and kept the interest rates low, the students just kept coming. The universities were able to raise tuition year after year with no concern. When I was at Ohio State fifty years ago, I could work my way through school. Tuition was only about $400 per semester.
That’s definitely not the case today. Student debt can be tens or even hundreds of thousands of dollars. With this money, colleges and universities built fancy new amenities to entice students even more than the easy loans. College and University faculty and administrators increased pay and benefits for themselves. They reduced their workload by creating unnecessary additional administrative and faculty positions. As government aid increased, the cost of the education increased even more. Now the loans are due. This is a continuing cost of living for many former students.
Did you know that Ohio State has somewhere around 100 Vice Presidents?
HOUSING is not affordable for too many people. This is a problem that has gotten worse over the last 20 years. It should have been taken care of during the financial crisis of 2008/2009. This is what a financial crisis is; a time when over-valued assets find their proper level of worth. Instead, the U.S. Government and the Federal Reserve stepped in and flooded the market with money. Interest rates were kept artificially low and the market compensated with increased asset values. Now, rents are too high and homes are too expensive. Our children have a hard time making ends meet and can’t afford to buy. Government programs, such as ones where local governments buy up abandoned homes in the neighborhood, have made the problem worse. The housing is off the market and not made available at prices people can afford.
Prior to 2008, homelessness was an issue that the press was covering regularly as this was a growing concern affecting nearly every city across the nation. Today, however, the problem is rarely mentioned. Why? Housing prices were propped up and the less well to do were still priced out of the market. Government programs at the Federal and local level didn’t work for the middle class. The problem could have been fixed and it wasn’t, so no one wants to talk about it! The issue is so commonplace, we seem to have grown immune from caring.
When hardworking people can’t even afford a roof over their head, the cost of living is too high!
HEALTH CARE is a large part of the family budget and a big reason for the high cost of living. Bigger and bigger insurance premiums are deducted straight from the employees paychecks, all because the underlying cost of medical care gets larger and larger. Health insurance is not health care. Health insurance is a third-party payer for the health care. That’s a problem because responsibility for the healthcare is divorced from the one paying for the healthcare. Remove the involvement of the third-party payer and the cost of health care will decline while quality improves.
The Affordable Care Act was not focused on fixing the exploding cost of medical care. The ACA was focused on out how to pay for it. The cost of healthcare has continued to increase across the board. U.S. households saw a 12% increase in their monthly premiums when the ACA was implemented. Americans did see an average savings of $74 in out-of-pocket health spending, but when compared to the $5,250 spent annually, this “savings” doesn’t equal the new expense. While many of the left had wanted a “single payer” system, the ACA failed to create that. Thank goodness. The “single payer” system is not single payer at all. It is actually a third-party payer system on steroids; the government paying the provider, with the taxpayer paying the government, leaving us with a system of payments controlled by an uncaring and heartless government and an endless decline in quality, and the patient still left out of the picture.
ASSET PRICES IN BUSINESS are too high. Airplanes and cruise ships, hotels and office buildings, shopping malls and stock prices are all examples of things that are overvalued. Cruise ships are stuck at port because not enough people are booking cruises. Airplanes are stuck on the tarmac because not enough people are booking flights. Hotels and office buildings are half empty. Retail stores in shopping malls are shuttered. The value for many of these assets is what they would sell for today in hope of future cash flow, but future cash flow is uncertain. Many companies are not making enough money to even pay the interest on their debt, but their stock is still propped up at the historical value. Bailouts prevent or postpone the proper pricing of assets, which in turns prevents or postpones the possibility of lower prices, and the middle class suffers.
The middle class is shrinking. It has been stated that 40% of Americans cannot afford a middle-class lifestyle. Housing, education, health care, food, transportation and childcare all cost more. According to the U.S. Inflation Calculator (www.usinflationcalculator.com), U.S. Core Inflation hit a near 30-Year High in July. “U.S. consumer prices rose more than expected in July and a measure of underlying or core inflation ran the quickest in nearly three decades, a government report published Aug. 12 shows.” Pretty interesting for prices to go up when everyone is staying at home and thousands of companies are going out of business every month, isn’t it? What causes inflation? The answer is money creation. When there are more dollars in circulation each dollar is worth less, especially when the economy is contracting and fewer goods and services are being produced. So, when the government is supposedly bailing you out, everything costs more? Yep!
THE POWER TO CREATE MONEY
“Congress shall have Power…to coin Money, regulate the Value thereof, and of foreign coin… No state…shall make anything but gold and silver coin a tender in payment of debts.” – – (U.S. Const. art. I, §8 cl. 5, U.S. Const. art. 1, § 10, cl. 2.)
This clause was NOT intended to give our government power over money. Its real purpose was to set a limit on government power. When the Constitution was written, there were many mints that produced coins and put a value on them. What the clause is telling the government is, sure, if you want to coin money and put a value on it, go right ahead, but you do not have an exclusive power. Go ahead and compete with every other mint. Over time, our government has ignored this part of the Constitution and seized for itself a monopoly on the creation of money. Also note, the Constitution prohibited states from legalizing anything but gold and silver coin for the payment of debt. This gave confirmation that the power to regulate debt was a state, not a federal, function. This was truly sound money. Our money has lost value ever since, but especially after the Federal Reserve Bank and the Income Tax were instituted in 1913.
According to the U.S. Inflation Calculator (www.usinflationcalculator.com), what cost $1.00 today would have only cost $.08 in 1920. Our dollar has lost 92.3% of its value in 100 years! That’s inflation. That’s why our cost of living is too high!
WHY THE GOVERNMENT IS A POOR INVESTMENT
Government has no profit motivator. There are only two possible motivators in government, 1.) service and self-sacrifice or 2.) extract as much as possible from citizens. The first motivator is weak, and it only works with good people. The second motivator is strong, and it only works for bad people. There are a lot of good people in government, but the power held by bad people is much stronger.
There is no incentive to control cost and increase quality in government except by adding layers of administration and top down goal setting. Free market businesses are just the opposite. They must work hard to decrease cost and improve value to keep and attract customers. The difference between income and expense is profit. Profit is a powerful motivator to work hard and to perform the function with only the number of people that are needed.
Over the last 100 years, the Republicans and Democrats have run this country in to the ground. The problems have become much worse over the last three Presidential administrations. The only way Government can pay for this extravagance is to take it from you. They haven’t done this with new taxes. They have done it by creating new money. Living is more expensive because the value of our money is shrinking. Think of it this way. What would it do to your family budget if you went out and borrowed money for a two new cars, two motorcycles, a boat and a big new house, then went out shopping every day and out to eat every night, running the bills up on your credit card? Very soon the bill would become due and the payments would consume your entire income. You would be lucky just to pay the interest. This what your government has done. It’s even worse than that. Like a case of identity theft, they have charged it in your name. The credit card is not really a credit card. It is the monopoly power to create money that our government has seized for itself. To pay these bills, our government has just created more and more dollars. As stated before, that’s what causes inflation. That’s why our cost of living is too high!
THE SOBERING CONSEQUENCES
U.S. currency has not been redeemable in gold since 1934 or silver since 1964. According to the Federal Reserve, “The Congress has specified that Federal Reserve Banks must hold collateral equal in value to the Federal Reserve notes that the Federal Reserve Bank puts into circulation. This collateral is chiefly held in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities.” Our currency is now backed by the “the full faith and credit of the United States.” What is the full faith and credit of the United States? Well, Citizen, YOU ARE!
The National Debt Clock (www.usdebtclock.org) is a great place to for statistics about how much debt is owed by the United States. Last week, our national debt reached $26,627,135,467,102.00, almost 27 trillion dollars. There are 330 million people in the United States. If you divide the debt by every man, woman and child in the United States it comes to $80,682.94 per person. This is just the debt owed in on the government books. It doesn’t count unfunded liabilities, which are promises to pay in the future, like social security, government pensions, government backed mortgages, private pension insurance promises, etc. People have estimated that including these future promises the portion of our government’s debt that everyone owes can be anywhere from $125,000 to $300,000 per man, woman and child. It is your future time and labor, and your children’s time and labor, that has been bartered away for this debt. Because we have not fought to stop this, we have sold ourselves into slavery.
Solutions to the High Cost of Living:
GET GOVERNMENT COMPLETELY OUT OF COLLEGE LOANS
Change the law. Make college loans private again, this time without federal government backing the up. Prior to Obama, college loans were privately funded but guaranteed by the federal government and administered by the U.S. Department of Education through the FAFSA application. In the last financial crisis, college loan providers were being stressed, so the Obama administration had the Federal government take over all college loans. If student loans were privatized, lenders would be much more careful who they lent to, and the taxpayer would not be on the hook.
LET HOUSING PRICES FALL
Housing prices have to reach the level where people can afford to buy and investors are willing to part with the cash they hold on the sideline. This is the function of a free market. No more bailouts. Endure the economic pain, end the government programs, and allow us to rebuild again from a stronger foundation.
CHANGE THE FOCUS FROM HEALTH INSURANCE TO HEALTH CARE
The Republicans first said they wanted to repeal the ACA, but they promptly changed that narrative to “repeal and replace”. Replace with what? The Republicans can’t seem to figure that out, but it doesn’t sound like they will be getting government out of the way. If they don’t, it will only give the same results as before: increased cost and decreased quality. Our answer to the Republicans is “Repeal and reverse”!
There are some subtle changes we can make that will have a great impact. Fix the third-party payer problem. Removing the deduction for all health insurance, especially the tax break that gives an advantage to employer sponsored insurance. Over time, this will shift insurance products away from employer plans and toward individual plans. At the same time, INCREASE the deductibility for medical expenses by setting high threshold on the deductibility of medical expenses but effectively eliminate any caps on cost above the threshold. Let HSA accounts be used for expenses below the threshold. Continue to allow tax free HSA contributions but remove the requirement for high deductible insurance plans. Pre-existing conditions should not be forced on insurance companies. If pre-existing conditions are mandated, it’s not insurance, it’s welfare. Reduce regulations on health insurance.
Americans owe a lot of their health problems to poor nutrition. The FDA and the Department of Agriculture exist more to protect big food processing businesses than to protect ordinary people. Small business in the food industry is persecuted rather than encouraged. I will aggressively support the new bill introduced by Congressman Thomas Massie of Kentucky known as the PRIME Act. I will go after the FDA and the Department of Agriculture and insist that they begin working for the people again instead of agribusiness or be defunded.
ASSET PRICES IN BUSINESS
I will vote against every corporate bailout and every new subsidy, as well as be a strong advocate for other Representatives to do the same. Bankruptcies will occur, but the difference is, when asset prices are propped up artificially though bailouts and subsidies, the economic fall becomes not only inevitable but also stronger and deeper. This is never a sustainable solution. The American people deserve an economy that won’t give them whiplash! Together, we will lay out a plan to unwind bailouts and subsidies that already exist.
We cannot afford to bail out those who take on more risk than they are able to handle. When bankruptcy occurs and the assets are sold for the price investors are willing to pay, they will be able to operate at a lower cost. Lower cost will attract customers, and these businesses will revive again. This will create new jobs and new wealth for the country. This is the function of a free market. This is sustainable.
ELIMINATE AND DOWNSIZE GOVERNMENT PROGRAMS
Obviously, our government has grown too big and inefficient. In the House I will collaborate with other members and libertarian think tanks to eliminate Federal agencies and reduce the Federal budget.