Beware – statists strike again

In their misguided attempt to ‘help’ low wage earners, statists have increased the minimum wage to the point where Wendy’s, the Dublin based fast food company, is reducing their purchases of minimum wage labor and  instead, adopting automated Kiosks where customers can place orders to reduce labor costs. These Kiosks will likely replace many minimum wage workers and will spread beyond Wendy’s.

“Last year was tough — 5 percent wage inflation,” said Bob Wright, Wendy’s chief operating officer, during his presentation to investors and analysts last week. He added that the company expects wages to rise 4 percent in 2017. “But the real question is what are we doing about it?”kiosk

Wright noted that over the past two years, Wendy’s has figured out how to eliminate 31 hours of labor per week from its restaurants and is now working to use technology, such as kiosks, to increase efficiency.1

When will statists ever learn basic economic principles? If labor costs rise and the business owner cannot raise their prices to offset the rise in their costs, they will cut costs.

Source:

  1. Malone, J. D. “Wendy’s to install ordering kiosks in 1,000 stores this year.” Columbus Dispatch. N.p., 28 Feb. 2017. Web. 28 Feb. 2017.
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Stop the statists: reduce student loan debt

Students are increasingly taking on greater levels of debt in order to attend college.  College tuition and fees have inflated significantly in the past several decades due to the states involvement, forcing the majority of students attending post secondary educational institutions to take out ever larger federal student loans. This situation is pronounced at state supported schools but even more so at private institutions who also can feed their bloated institutions on students’ federal loans.

According to the College Board, inflation in college costs are significant and continuing to rise at rates well about the Consumer Price Index (CPI):

Between 2006-07 and 2016-17, published in-state tuition and fees at public four-year institutions increased at an average rate of 3.5% per year beyond inflation, compared to average annual increases of 3.9% and 4.2% over the two prior decades.

According to the Federal Student Aid Portfolio Summary from 2016, the US Department of Education states there is $1.1298 T of outstanding student loan debt.

If the current situation continues, the state will continue to grow their already very large class of indentured individuals who are at their beckoned call. However, the situation goes beyond individuals.

The problem of having over a trillion dollars in student loan debt is significant beyond the burden it places on individuals.  Many economists see this large overhang of debt negatively impacting GDP growth. Headlines like Student-Loan Debt Slows Recovery are common within the MSM and even on alternative news sites. The theory about the impact of student debt is based upon a rational assumption; payments to service student loan debt cannot not be used to: start a business, form a household, purchase a home or car, or even go out to eat; basically less money from younger Americans is flowing to our nation’s GDP and instead going to the student loan cartel.

Here are some market based proposals to slow the growth of student loan debt please let me know what you think of them.

  1. Stop sending the message that everyone should go to a four-year college. Obama advocated many times about college but he was wrong, there many professions and job opportunities for those without a four-year degree. Less demand for four-year college degrees means prices will fall for those who do obtain one.
  2. Local officials should revamp their high school curriculum and programs to meet the reality mentioned above. They can by offering a very rigorous and real college preparatory track as well as offer a serious vocational track which includes on the job training and apprenticeships. Beyond the educational value this offers to more students, this model will reduce demand at four-year colleges thus lowering costs.
  3. Stop federally guaranteed student loans – do not make the taxpayer the backstop for student loans as they eventually will be called on to do in the current system. Going back to free market principles which will force lenders to properly assess a student’s real ability to payback loans. For example, a student who did not fare well in high school will likely not do well at a four-year college and thus is a poor loan risk. For redemption, this student can go to a two-year program and prove they can handle a more rigorous course load before taking on significant levels of debt they will be unlikely to payback. This reduces the cost of bad loans to lenders those making loans more affordable.
  4. Raise admission standards at four-year institutions, this will force students to compete (scholarships) and it will also drive many marginal colleges and universities out of business. This action will likely assure those who take out students loans will pay them back.  Here lenders see the best return on their investments feeding their desire to continue to offer high performing students (those who really graduate) loans.

Getting off of the dole is not popular

An article on ZeroHedge titled, It Was A Pretty Disturbing Briefing”: Why State Governors Suddenly Got Cold Feet About Obamacare Repeal spoke about the difficulty the states see in the new administration’s efforts to repeal Obamacare. The crux of the problem is the statists’ fear of the wrath of people who lose government funded healthcare and the vast amount of federal money in play for the states to quickly repeal and/or replace Obamacare. The article makes it clear as shown in the quote below; governors fear the back lash from those forced off of the dole and of the loss of federal funding for their Medicaid programs if changes are made to Obamacare.

“Tens of thousands who would not be able to afford their coverage and would lose their coverage,” Democratic Governor Jay Inslee of Washington said after the closed-door meeting. “It was a pretty disturbing briefing.”

In non-statist speech, the governor of Washington was simply saying that taking these people off of the public dole would be politically untenable  – the MSM would have a field day reporting how evil politicians are hurting Americans and how irresponsible governors are for ever growing state budget deficits.

I suspect other governors beyond Inslee, both Democratic and Republican, feel the same as they are more concerned with keeping their positions of power by keeping everyone happy rather than face the truth of the debt ridden situation Obamacare places America’s finances into.  This is not a right vs. left issue but one of survival of statist politicians. From the same article:

On Friday, Kasich called House Republicans’ initial plans to replace the health-care law “inadequate.” Kasich, a former Republican presidential candidate, didn’t go into details during brief remarks to reporters after a meeting Friday with President Donald Trump. “To me, it’s not acceptable,” Kasich said. The governor, who opened Ohio’s Medicaid program to more low-income people under Obamacare, has advocated maintaining the Medicaid expansion. He has said the income limit for the program should be lower.

Whether one believes it or not, once the ink was dry on the Affordable Care Act (ACA) the die was cast. With Obamacare as the first step, America is heading towards socialized medicine and likely financial Armageddon.  The Congressional Budget Office (CBO) in their March 2016 report shows this in the large and growing expenditures the federal government is making to support ACA.1

The federal government subsidizes health insurance for most Americans through a variety of federal programs and tax preferences. In 2016, those subsidies for people under age 65 will total more than $600 billion, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) estimate. (The government also bears significant costs for health insurance for people 65 or older, mostly through Medicare and Medicaid).

Like the metaphor about the frog in boiling water, Obamacare is mechanism the statists are using to control America’s healthcare system.

  1. Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026. Rep. Washington, DC: Congressional Budget Office, 2016. Print.

Should the state monopoly in education consider change?

Education — especially in a world where academic knowledge, strong skills, and technical knowhow are required to obtain a ‘good paying’ job — is too important to have a near monopoly by the state given their dismal track record in progressing our students’ knowledge and capabilities.  While education’s value goes well beyond career training, obtaining a job its subsequent paycheck is critical to a person’s survival and their economic and social mobility in twenty-first century America. Obtaining superior education and training are paramount in the aforementioned endeavor.

According to a study co-authored by National Research Center for Career and Technical Education (NRCCTE) and the Georgetown University Center on Education and the Workforce  healthcare, community service, and STEM are projected to be the fastest growing career clusters in the next several years.1  For the most part, securing one of these careers will require having experienced very strong classroom instruction leading to real measurable learning of the fundamentals of reading, writing, and mathematics. Considering the sophisticated American economy that is being projected, can we expect students to become employed in these highly skilled jobs with the same quality of education and knowledge students of the nineteen-seventies possessed?

In terms of the states’ contribution to our students’ knowledge and skills, one can look at The National Assessment of Educational Progress (NAEP) which is a seemingly well accepted nationally representative assessment of how our state dominated educational system is performing. The results show their performance is not improving. Historical data highlights the fact American high school student achievement has stagnated for forty years the essential subjects of reading and math.2

The charts below show flat reading and math scores for America’s high school students going back to the nineteen-seventies.

Overall, the states’ educational system is not providing what students require to succeed in the twenty-first century when measured by the abysmal rates of obtaining career qualifying credentials such as an ‘earned’ high school diploma, apprenticeship completion, or a ‘legitimate’ college degree within a field meeting the needs of future employers.

Faced with stagnant performance for nearly forty years, most other fields outside of the state dominated educational system would look at themselves and likely embrace changes to their systems. For the future of our youth and nation, should not the state dominated educational system do the same?

 

neap-reading
Flat HS Reading Scores
neap-math
Flat HS Math Scores

Sources

 

  1. Carnevalle, Anthony, Nicole Smith, and Jeff Strohl. “Recovery: Job Growth and Education Requirements Through 2020.” CEW Georgetown. Georgetown University, June 2013. Web. 25 Feb. 2017.       
  2. “Summary of Major Findings.” NAEP – 2012 Long-Term Trend: Summary of Major Findings. US Department of Education, 2012. Web. 25 Feb. 2017.

        

No voter fraud?

There is something fundamental to ask regarding the individual action of  voting within our republic. Is the act of voting somehow inoculated from the fraud which infiltrates many other government sponsored endeavors?  Has the human condition elevated to the point that the acts of lying and cheating have been left out of our highly evolved DNA?

There is currently an uproar among the left and some on the right over the fidelity of our nation’s election system. This non-issue or controversy, depending on how you see it, has been covered by the MSM and many alternatives news sources. The defending or questioning of election results by either political side has significant consequences to the support or lack of support of our elected officials.

Suffrage is a state ‘supervised’ activity back by the US Constitution (the 15th, 19th, 24th, and 26th Amedments) as well as additional federal back-up supplied by the Voting Rights Act of 1965 but is the act of voting and the tally of results in today’s America above reproach?

The questions being currently raised by both sides in this controversy leads to questions as to:

  1. Is the act of voting somehow different than other actions and interfaces between the individual and the state (general term for government)?
  2. Does the human condition of seeking its self-interests not apply to the act of voting?
  3. Are the individual states’ voting systems (casting and counting) fool-proof such that fraud is impossible?

As a libertarian, I like those on the left and right view voting as essential to our republic’s continuance. Notwithstanding, the state  has a very poor record when it comes to being a victim of fraud perpetrated by individuals and organizations seeking to further their self-interests.

To examine the track record of the state in resisting fraud, listed below are a few examples of actual payment fraud being perpetrated upon the state as reported by the Federal government.  Billions of dollars are being taken by fraud from the state.

A warning, this list is not even close to complete in describing the state’s unwilling being duped. There is no inclusion of fraud by Wall Street, DoD contractors and suppliers, special interest groups, corporate entities, individual taxpayers, military commanders, academic researchers, etc.. These and other offenders are not on the list below but their actions are well known to add support to the need to answer the question below.

Could there also be problems with suffrage in America?

fraud

Table from https://paymentaccuracy.gov/high-priority-programs/

 

 

Conversation with a statist

A few days ago, I was involved in a conversation with a leftist supporter of the Federal government’s venerable Social Security program. My position was the program is a Ponzi scheme and for all intents and purposes, it is insolvent.

The person I was speaking to, an ill-informed statist, was aghast that someone would question our Federal Government!

To be more specific about my concern, I went to paraphrase the Social Security Trustee report stating that even its caretakers know the program is failing as evidenced below.

“Social Security’s total income is projected to exceed its total cost through 2019, as it has since 1982. The 2015 surplus of total income relative to cost was $23 billion. However, when interest income is excluded, Social Security’s cost is projected to exceed its non-interest income throughout the projection period, as it has since 2010. The Trustees project that this annual non-interest deficit will average about $69 billion between 2016 and 2019. It will then rise steeply as income growth slows to its sustainable trend rate as the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

After 2019, interest income and redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual deficits until 2034, when the reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2090. The ratio of reserves to one year’s projected cost (the combined trust fund ratio) peaked in 2008, declined through 2015, and is expected to decline steadily until the trust funds are depleted in 2034″.1

To close my conversation, I put the statist on the spot by promoting privatization and further pondering just how much worse could we, as individual citizens, do in planning for our own retirement than is currently being done by the Federal Government?

As no surprise, the statist could not respond.

  1. A SUMMARY OF THE 2016 ANNUAL REPORTS. Rep. Social Security and Medicare Boards of Trustees, 22 June 2016. Web. 11 Feb. 2017.