Author: Ken Coman
•2:57 PM
In my previous post I shared with you that rational concern that I have for the future of our country based on the unwise financial decisions we are making. Today I wish to share one of the reasons why the government has a legitimate concern in health care costs and some things that can be done to address those concerns.

Medicare is an unfunded disaster. Sadly, this disaster is not an isolated disease but one that is systemic in our government today. As mentioned before, Medicare has not balanced its budget in more than 20 years. It currently has a $38 trillion unfunded liability. Medicare has stated it will go bankrupt by 2017. Some projections are as high as $68 Trillion in unfunded liabilities (see footnote 3).

The rise in health care costs is costing the government, and therefore the taxpayer, a tremendous amount of money. What is driving health care costs? The Kaiser Family Foundation reports the following:

"Intensity of services – The nature of health care in the U.S. has changed dramatically over the past century with longer life spans and greater prevalence of chronic illnesses. This has placed tremendous demands on the health care system, particularly an increased need for treatment of ongoing illnesses and long-term care services such as nursing homes.

Prescription drugs and technology – Spending on prescription drugs and the major advancements in health care technology have been cited as major contributors to the increase in overall health spending. After six consecutive years of slowing growth, prescription drug spending growth accelerated in 2006, due in large part to the implementation of the Medicare Part D benefit. The effect of spending on technology, such as devices, is harder to estimate. Some analysts state that the availability of more expensive, state-of-the-art drugs and technological services fuels health care spending not only because the development costs of these products must be recouped by industry but also because they generate consumer demand for more intense, costly services even if they are not necessarily cost-effective.

Aging of the population – Health expenses rise with age and as the baby boomers are now in their middle years, some say that caring for this growing population has raised costs. This trend will continue as the baby boomers will begin qualifying for Medicare in 2011 and many of the costs are shifted to the public sector.

Administrative costs - 7% of health care expenditures are for administrative costs (e.g. marketing, billing) and this portion is much lower in the Medicare program (<2%),>government. [4] Some argue that the mixed public-private system creates overhead costs that are fueling health care spending (Footnote 1)."

As I will illustrate later, this list is not all inclusive but does include some very important areas. Nevertheless, as the government begins to move towards the assumption of a greater stewardship over the physical health of all people in our country, it naturally needs to be able to reduce the amount it spends or the costs will be even greater than forecasted - especially because of our aging population.

Health Care cost reform is essential to true advancements in health care for the American people. We have been taught to believe that we have a fair market system and that the one being proposed is a socialist alternative.

Perhaps the issue most overlooked, and quite possibly the most consequential, is the insurance industry's exemption from Federal Anti-Trust laws and how that plays into the rise in health care costs. We have been led to believe that our current system is free market. In reality, it isn't entirely. We are living the third alternative that none of us like. It isn't free market. It isn't socialist. It is essentially monopolistic. The insurance industry is one of only two industries that are exempted from Federal Anti-Trust laws. This exemption provides them with a non-free market control over health care (FYI, the other industry is Major League Baseball) (see footnote 2).

This exemption gives insurance agencies the opportunity to do things that, for every other company in America (besides the NY Yankees), is illegal. For example, they can set policies together, set prices together and gather information together. How is that helpful for us? It isn't (see footnote 4).

Health Care cost reform must tackle this huge issue. If it doesn't, then it has failed. Health Care cost reform should focus on the following areas:

1. As mentioned, bring fair market principles to the insurance industry by repealing the anti-trust exemption and responsibly regulating that industry to ensure that price fixing is ended & monopolies are broken up. Imagine what that alone would do.

2. Introduce true incentives to reduce costs in the industry. Those incentives could take the form of tax breaks, grants, fines, etc.

3. Eliminate the huge divide between what someone without insurance pays versus what the insurance company pays for the exact same services. For example, your insurance company may have paid $3,000 for certain services; but you, however, would have to pay perhaps $5,000 for the same treatment if you didn't have insurance. That divide needs to end, or be brought more closely in line, to give consumers a true choice between self insurance and no insurance. People are FORCED onto insurance because of the monopoly on the payer system. It works to their advantage by reducing the amount that they pay to doctors, clinics, etc. to such a degree that the doctors & clinics, to make up that money, have to charge more to the uninsured in order to recoup some of that lost money. This incentivizes people to buy insurance. Who wins? Not the health care industry - the insurance industry.

4. More closely regulate malpractice lawsuits. Malpractice insurance is a large part of the increased costs.

Notice how #1 & #4 are both related to insurance. There is real work to be done with that industry. I believe it would have a sudden & immediate impact on health care costs nationwide. Insurance & health care cost reform should be the cry. Is this list of mine all inclusive? Not by any stretch of the imagination. This is a huge topic. But I do believe that insurance reform would supply a huge benefit to the public whereas pushing forward with universal care would actually increase costs, increase taxes, decrease individual incomes, lead to a rationing of care, reduce personal liberties and contribute toward the ruin of the country.

Creating a one-payer system only further entrenches the monopoly held by the insurance companies on health care and ensures that there will never, ever be a free market system to help the consumer & tax payer. Sadly, as the AFL-CIO reports, the insurance industry is a huge partner in the current "Health Care Reform" process (see footnote 5).

Health Care Cost reform will only happen with Insurance Industry Reform. Although it is 65 years in the making, it is never too late to start and it is long overdue.

___________________________________________

Footnotes

Author: Ken Coman
•10:20 AM
I attended a webinar yesterday called "Health Reform 2009: Watershed or Waterloo?" It was put on by my broker and after sitting through it, my heart was broken. As a result, I was moved to a state of heightened concern and anxiety for the welfare of my nation. I will share why.

There are a few laws that simply cannot be argued with.

1. You need money to buy things
2. Money has to come from somewhere
3. There isn't an infinite amount of valuable money (See footnote 10)

Knowing how our Congress & President are in a hurry to pass major health care reform because of this new "Crisis," it seems that "reform" is inevitable. For some time now they have been selling the country this line:

1. Millions of poor & uninsured
2. Increasing costs
3. The government will give us the same health care that the President has

They use these three things as a premise to give them authority to step in and reform our system (See footnote 1). The word "reform" itself implies that the system has been in some criminal state and needs to be brought in line with higher norms and standards. I will admit that there are certainly some problems with health care - every American can. But, there are many pricing problems in America (I think the iPhone is too expensive for example. Everything Apple is too expensive for that matter) and we do not want or hope that the government will get involved. It isn't their role - they have no authority, implied or explicit, for price controls.

Here are the facts:

1. Millions of Poor & Uninsured

Of the 46 million uninsured Americans (15%) total (2007 numbers),
• 12 million eligible but not enrolled in Medicaid or SCHIP.
• 8.5 million have household incomes over $50,000.
• 9 million have household incomes over $75,000.
• 9.7 million non-citizens (including 6 million undocumented aliens).
• 8 million college-aged young adults (4.7 million are students).

(See footnote 2)

So, those that we should really be worried about are not those who are eligible but who choose not to enroll, those who make over $75,000 annually but choose not to purchase, or the undocumented aliens (I want them to have insurance but a government entitlement should be available only for legal residents within that government's jurisdiction). Those we should worry about are the 8 million poor college students and the 8.5 million with an income above $50,000 and below $75,000.

16.5 million is a lot less than 46.5 million. Half of these could be fixed by a federal mandate requiring parents to keep their children on their health insurance while in college or up to a certain age. The other half could be addressed by changing the requirements for medicaid. Woo-la. Health care is reformed.

2. Increasing Costs

Regarding rising costs, the facts are what they are. Costs are going up (See footnote 3).

3. The government Will Give us the Same Health Care That the President Has

The insurance that the government will offer Americans is not the same plan that they have. Certainly that was one of the parts of Senator Obama's message while running for president (See footnote 1). However, that was his plan. Congress will formulate their plan and that is the one that we will have to deal with. The main thrust on capital hill is not to give us the same plan as the President and Congress have but it is to create a National Health Plan - Universal coverage - a single payer system.

I know that sounds nice but it isn't. As the benefits manager within a worldwide organization, I can tell you from experience that OUR health care system is the envy of the world (and the world does include Canada & Europe). People are legitimately sad to see our country taking the direction it is with health care. They know that it will downgrade the quality of care - not improve it (See footnote 4). The fact of the matter is that it will downgrade care and create a rationing of care system. It is a fact. I will explain in a moment why.

For these downgrades, the President gave an estimate of $1.6 trillion dollars. I guess only with government will we pay more for less. If this were an accurate forecast of the expected cost, it would perhaps be the first time in government history that it were. Things always cost more - always - than what our elected officials tell us.

For example, here is the Massachusetts experience (See footnote 5):
Budgeted $460 million for 2007
Forced to budget $870 million for 2009

Medicare Projections (See footnote 5):
$3 billion/yr in 1965, est. $12 billion by 1990
Actual 1990 cost: $107 billion
Actual 2008 cost: $430 billion

The Iraq War:
Forecasted at $50 Billion, it could top $2 Trillion (See footnote 6)

Here are some more figures:

This year's Debt: $1.8 Trillion
National Debt: Officially more than $11 Trillion. That is a whopping 13% of GDP (Economists say a nation can sustain about 3%. Annually alone, ours is at 4% - see footnote 7)
Medicare: Has not balanced its budget in more than 20 years…currently has a $38 trillion
unfunded liability. Medicare has stated it will go bankrupt by 2017. Some projections are as high as $68 Trillion in unfunded liabilities. (See footnote 8)
Social Security:
  • $96 billion negative cash flow by 2020
  • $280 billion negative cash flow by 2025
  • $500 billion negative cash flow by 2030
I am not making this stuff up either (See footnote 5 or the banner at the top of this page).

If the President's projection is twice as accurate as Medicare’s projection, and only misses the mark by a factor of 5… The $1.6 trillion becomes $8 trillion over 10 years…60% as large as our current national debt.

Where will it all come from? We go back to our rules:

1. You need money to buy things
2. Money has to come from somewhere
3. There isn't an infinite amount of valuable money (see footnote 10)

The simple truth is we are heading into a future of total financial destruction. That is the direction this road we are on is heading. There isn't some magical pot of gold at the end of this storm - because there is no rainbow.
You can see that this plan for health care reform reveals that much more government reform is needed before we can even begin to allow the government to reform health care.

And, after Congress' mad rush to pass this "critical" legislation for all 9 million people who need it, we will be forced, just a few years from now, to make cuts & to ration care for the whole nation. Why? Because of those rules. President Obama says that health care costs are the biggest threat to the long term financial security of the nation (See footnote 9). I say that health care reform is the biggest threat the financial security of the nation. You can't have everything you want with a fixed amount of resources and the government will be in a much sadder, much worse state than it is now. Someone with no credit and no money can't buy a thing. A whole nation with no credit and almost no money won't be able to either. This doesn't take into consideration the rampant inflation forecasted as a result of our bailouts either... We can have press releases and great speeches about the nirvana of health care reform, but, simply put, the numbers don't add up. When you add trillions of negatives to trillions of negatives to even more trillions of negatives, you get tens of trillions of negatives. When we finally are brought to account for that, no clever Enron financial reporting will be able to hide the black hole we have created. That press conference will be a terrible day.

Seeing these numbers and knowing what it certainly spells out for our future makes me almost cry out, "Who is doing this to us?! Can't they see that this is only going to leave all Americans stranded down the road? Can't they see that this is going to literally destroy the country we love?!"

This is so irresponsible. This is reckless. This kind of rash and foolish fiscal policy will lead to a true crisis & oppression of the greatest kind.
This should cause anxiety in every freedom loving American. I hope my cries become your cries as well - and that together, we can keep this catastrophe from occurring.

What is the future? On our present road it is to complete financial insolvency. Is there any other future than one of ruin? Not on this road.

How I love you America! What have your caretakers done to you?
___________________________________________________

Footnotes

1. You can hear Senator Obama discussing these issues in the town hall presidential debate last year here: http://www.youtube.com/watch?v=-f2_p-fd2D4.
2. These figures can be found from the Federal Government at http://www.census.gov/prod/2008pubs/p60-235.pdf
3. You can read more of this here: http://www.nchc.org/facts/cost.shtml at the National Coalition on Health Care.
4. Besides my own personal interactions with my colleagues in Canada and Europe, here is a great clip of several interviews worth watching: http://www.youtube.com/watch?v=BbHh86HkBhk.
5. Health Reform 2009: Watershed or Waterloo? A Lockton Benefit Group Webcast
7. To see a graphically our national debt, click here: http://www.cnbc.com/id/30108264/?slide=12. To learn more about the amount of deficit we can sustain, listen to the podcast here: http://dateline.radioamerica.org/archives/1879
10. The government can certainly print up a near infinite amount of money, but there is a point beyond which the money does not have any more value. There is not an infinite supply of money with value.
Author: Ken Coman
•8:03 PM
Our Country was founded on four main principles of government:

1. The Will of the People
2. The Representation of the Individual States
3. An Independent Judiciary to protect individual rights and ensure the rule of law
4. A Chief Executive Representing the United States and the People of Them

Each of these have corresponding terms. They are:

1. The House of Representatives: Two Years
2. The Senate: 1/3 Elected every two years with 6 year terms
3. The Judiciary: Lifetime Appointment
4. The President: Four Years

Each of these terms was chosen deliberately. Despite what some would call the "Tyranny of the Judiciary" (as though it were some kind of un-American institution but rather a remnant of King George's 18th Century Great Britain), the lifetime appointment of these judges has been the greatest safeguard of consistent application of the rule of law. The rule of law is the essence of liberty when our laws are just. While I would agree that some errors have been made by the judiciary, I do love our system of law and do attribute some of its success to the lifetime appointment they are entitled to by the US Constitution. They can, and have been, removed by impeachment.

What I would like to propose is that perhaps there is something to be gained in longer terms. One of our many problems in Government today can be traced to the incredible media machine and the constant campaigning that it has created. 24 hour news media coverage leaves no room for our officials to make mistakes and not have it put on the front page of Yahoo!, a blog, or the scrolling news feed on CNN. It also has forced our officials to be on a permanent campaign. The next campaign begins the day after the old one ended. This campaigning is a problem. It makes our officials make choices to get votes rather than do what is right. This always happens to varying degrees, but now it seems to be the common practise - the only way.

In the words of columnist Joe Klein, "The pressure to 'win' the daily news cycle—to control the news—has overwhelmed the more reflective, statesmanlike aspects of the office."

Because of the permanent campaign they are constantly pleasing every interest group that threatens to get them out of office, fund every single project, spend more and more time away from Washington back at fundraising dinners, and answering every single question they get with either "I don't recall" or with words that mean nothing. We can't get to know our officials anymore and we don't know what they really stand for. As a result, we elect, and then re-elect politicians who would rather make a career out of something that should be a sacrifice. We elect, and then re-elect politicians who actually are destroying our country because of their continual campaigning. The permanent campaign is distructive of the People's liberties as it imposes unjust laws written and signed into law with the campaign in mind rather than the principles of Freedom that the country should stand for.

I suggest to you that limits of terms may indeed be a problem, but that just as big is the length of the term. We need to consider making a change to the duration of these terms for the good of the nation and give our Representatives room to breath and space to act in good conscience without fear that every special interest group will wage war on them and win. We need to give them time to prove themselves and to make decisions they know are best and not just to get re-elected - decisions that can be made with enough time to weather the storm of special interest opinions and fury.

Certainly we do not want to trust Congress with more power. However, we need to create a better system wherein they can more responsibly use their entrusted powers.

If one were to take a satisfaction survey of Congress, the President and the Judiciary, which one do you think would come out on top? I propose the judiciary would. I suggest that we have something to learn from that. It is directly related to:

1. They are appointed and don't have to campaign
2. Their term is for life

These two elements create a situation wherein they can best fulfill their duty. I don't propose a life term for our representatives, but that the duration of their terms be reassessed to determine if the people might be better served by longer terms and limiting the number of them.
Author: Ken Coman
•8:49 PM

Government spending as a share of GDP is practically guaranteed to go down on Obama's watch.

The economic record of recent presidents has blurred a major ideological distinction between the two political parties. After President Bush's "big-government conservative" policies expanded the federal budget to unprecedented proportions, President Obama will likely continue the oxymoron of the "small-government liberal" by pursuing deficit-reduction.

Senior Fellow
Kevin A. Hassett
We are living in the Oxymoronic Age.

It began back in 1992, when President Clinton governed as a "small-government liberal." When Clinton took office, he inherited a government that was about 22% of our economy, when he left office, it was all the way down to 18.5%.

Roosevelt is glorified by the left for saving America with his "New Deal." But Bush makes Roosevelt look like a piker.

The Oxymoronic Age continued eight years ago, when President Bush rose to power by igniting his base and enraging his enemies. After his victory, Democrats characterized his every move as radically conservative, but of course, far too few of his actions matched that description.

Bush ran as a compassionate conservative, which is not an oxymoron, but governed as a "big-government conservative," which is.

When Bush took office, federal government outlays were, according to the Congressional Budget Office, 18.4% of gross domestic product. As President Obama takes office, he is taking over a government that is radically different from the one Bush inherited but not in the direction that Bush detractors feared.

According to the latest CBO projection, government will take up a whopping 24.9% of GDP. But that CBO projecting does not include the stimulus bill and a few other tidbits that have been supported by Bush. Adding those in, government will take up a whopping 28% or 29% of GDP in 2009. There are only three years in our history--1943, 1944 and 1945--with larger governments.

So during President Bush's two terms, up to and including the last budget year he could affect, government's take of our output increased by about 10 percentage points.

President Roosevelt is glorified by the left for saving America with his "New Deal." But Bush makes Roosevelt look like a piker. In 1930, government swallowed up a minuscule 3.4% of GDP. Roosevelt's "massive" government expansion lifted that to 10.7% in 1934, a 7.3 percentage-point increase.

That's right, we are in the middle of an increase in the role of government that is about 50% larger, as a share of GDP, then the New Deal.

That's big-government conservatism.

The next man up is Barack Obama, and he will, of necessity, be another small-government liberal.

Our new president faces a maddening array of difficult choices and has promised on the campaign all sorts of big-government programs. But the fact is that government spending as a share of GDP is practically guaranteed to go down on his watch.

While President Obama may have the inclination to expand government, it seems most likely that his presidency, like Clinton's, will be marked by attempts to find clever ways to shrink the deficit. The fact that the Obama economic team has many of the Clinton players makes deficit reduction almost a sure thing.

According to the CBO budget outlook, it will drop all the way to about 21% of GDP by 2019. But let's say that Obama is not as tight-fisted as the CBO projects and government spending only drops to about 23% of GDP, a 5% drop. If Obama accomplishes that, then government spending will have dropped relative to GDP more on his watch then it ever has in U.S. peacetime history.

Second place in that context would belong to Clinton.

These differences have, if the academic literature is to be believed, an enormous economic impact. Harvard economist Robert Barro pioneered a literature that explores the conditions that are positively correlated with economic growth. One of the most robust results in that literature is that smaller government leads to higher long-term growth.

If the economy has been better when Democrats control our government, this literature suggests that there is a simple explanation for the regularity: Democrats gave us smaller governments.

Over time, and through the hate-filled chatter of the blogs and the talk shows, we have all acquired the sense that our two political parties have fundamentally different views of government. Democrats favor big-government programs that solve the world's problems, and Republicans prefer smaller and leaner government that stays out of the way of the private sector.

But the record says the opposite.

Kevin A. Hassett is a senior fellow and the director of economic policy studies at AEI.


Found at http://www.aei.org/article/29234 on May 16, 2009
Author: Ken Coman
•11:12 AM
Outstanding article - I thought you would enjoy.

By George F. Will Thursday, May 14, 2009

Anyone, said T.S. Eliot, could carve a goose, were it not for the bones. And anyone could govern as boldly as his whims decreed, were it not for the skeletal structure that keeps civil society civil -- the rule of law. The Obama administration is bold. It also is careless regarding constitutional values and is acquiring a tincture of lawlessness.

In February, California's Democratic-controlled Legislature, faced with a $42 billion budget deficit, trimmed $74 million (1.4 percent) from one of the state's fastest-growing programs, which provides care for low-income and incapacitated elderly people and which cost the state $5.42 billion last year. The Los Angeles Times reports that "loose oversight and bureaucratic inertia have allowed fraud to fester."

But the Service Employees International Union collects nearly $5 million a month from 223,000 caregivers who are members. And the Obama administration has told California that unless the $74 million in cuts are rescinded, it will deny the state $6.8 billion in stimulus money.
Such a federal ukase (the word derives from czarist Russia; how appropriate) to a state legislature is a sign of the administration's dependency agenda -- maximizing the number of people and institutions dependent on the federal government. For the first time, neither sales nor property nor income taxes are the largest source of money for state and local governments.
The federal government is.

The SEIU says the cuts violate contracts negotiated with counties. California officials say the state required the contracts to contain clauses allowing pay to be reduced if state funding is.

Anyway, the Obama administration, judging by its cavalier disregard of contracts between Chrysler and some of the lenders it sought money from, thinks contracts are written on water. The administration proposes that Chrysler's secured creditors get 28 cents per dollar on the $7 billion owed to them but that the United Auto Workers union get 43 cents per dollar on its $11 billion in claims -- and 55 percent of the company. This, even though the secured creditors' contracts supposedly guaranteed them better standing than the union.

Among Chrysler's lenders, some servile banks that are now dependent on the administration for capital infusions tugged their forelocks and agreed. Some hedge funds among Chrysler's lenders that are not dependent were vilified by the president because they dared to resist his demand that they violate their fiduciary duties to their investors, who include individuals and institutional pension funds.

The Economist says the administration has "ridden roughshod over [creditors'] legitimate claims over the [automobile companies'] assets. . . . Bankruptcies involve dividing a shrunken pie. But not all claims are equal: some lenders provide cheaper funds to firms in return for a more secure claim over the assets should things go wrong. They rank above other stakeholders, including shareholders and employees. This principle is now being trashed." Tom Lauria, a lawyer representing hedge fund people trashed by the president as the cause of Chrysler's bankruptcy, asked that his clients' names not be published for fear of violence threatened in e-mails to them.

The Troubled Assets Relief Program, which has not yet been used for its supposed purpose (to purchase such assets from banks), has been the instrument of the administration's adventure in the automobile industry. TARP's $700 billion, like much of the supposed "stimulus" money, is a slush fund the executive branch can use as it pleases. This is as lawless as it would be for Congress to say to the IRS: We need $3.5 trillion to run the government next year, so raise it however you wish -- from whomever, at whatever rates you think suitable. Don't bother us with details.

This is not gross, unambiguous lawlessness of the Nixonian sort -- burglaries, abuse of the IRS and FBI, etc. -- but it is uncomfortably close to an abuse of power that perhaps gave Nixon ideas: When in 1962 the steel industry raised prices, President John F. Kennedy had a tantrum and his administration leaked rumors that the IRS would conduct audits of steel executives, and sent FBI agents on predawn visits to the homes of journalists who covered the steel industry, ostensibly to further a legitimate investigation.

The Obama administration's agenda of maximizing dependency involves political favoritism cloaked in the raiment of "economic planning" and "social justice" that somehow produce results superior to what markets produce when freedom allows merit to manifest itself, and incompetence to fail. The administration's central activity -- the political allocation of wealth and opportunity -- is not merely susceptible to corruption, it is corruption.
georgewill@washpost.com

Found at http://www.washingtonpost.com/wp-dyn/content/article/2009/05/13/AR2009051303014_pf.html on May 14, 2009
Author: Ken Coman
•10:32 AM
Below is an adapted lecture delivered at Hillsdale College on March 9, 2009. Some individual statements I do not agree with, but all in all, this was a great speach and I think worth your time.

MY REMARKS are titled tonight after the words of General Stark, New Hampshire's great hero of the Revolutionary War: "Live free or die!" When I first moved to New Hampshire, where this appears on our license plates, I assumed General Stark had said it before some battle or other—a bit of red meat to rally the boys for the charge; a touch of the old Henry V-at-Agincourt routine. But I soon discovered that the general had made his famous statement decades after the war, in a letter regretting that he would be unable to attend a dinner. And in a curious way I found that even more impressive. In extreme circumstances, many people can rouse themselves to rediscover the primal impulses: The brave men on Flight 93 did. They took off on what they thought was a routine business trip, and, when they realized it wasn't, they went into General Stark mode and cried "Let's roll!" But it's harder to maintain the "Live free or die!" spirit when you're facing not an immediate crisis but just a slow, remorseless, incremental, unceasing ratchet effect. "Live free or die!" sounds like a battle cry: We'll win this thing or die trying, die an honorable death. But in fact it's something far less dramatic: It's a bald statement of the reality of our lives in the prosperous West. You can live as free men, but, if you choose not to, your society will die.

My book America Alone is often assumed to be about radical Islam, firebreathing imams, the excitable young men jumping up and down in the street doing the old "Death to the Great Satan" dance. It's not. It's about us. It's about a possibly terminal manifestation of an old civilizational temptation: Indolence, as Machiavelli understood, is the greatest enemy of a republic. When I ran into trouble with the so-called "human rights" commissions up in Canada, it seemed bizarre to find the progressive left making common cause with radical Islam. One half of the alliance profess to be pro-gay, pro-feminist secularists; the other half are homophobic, misogynist theocrats. Even as the cheap bus 'n' truck road-tour version of the Hitler-Stalin Pact, it made no sense. But in fact what they have in common overrides their superficially more obvious incompatibilities: Both the secular Big Government progressives and political Islam recoil from the concept of the citizen, of the free individual entrusted to operate within his own societal space, assume his responsibilities, and exploit his potential.

In most of the developed world, the state has gradually annexed all the responsibilities of adulthood—health care, child care, care of the elderly—to the point where it's effectively severed its citizens from humanity's primal instincts, not least the survival instinct. Hillary Rodham Clinton said it takes a village to raise a child. It's supposedly an African proverb—there is no record of anyone in Africa ever using this proverb, but let that pass. P.J. O'Rourke summed up that book superbly: It takes a village to raise a child. The government is the village, and you're the child. Oh, and by the way, even if it did take a village to raise a child, I wouldn't want it to be an African village. If you fly over West Africa at night, the lights form one giant coastal megalopolis: Not even Africans regard the African village as a useful societal model. But nor is the European village. Europe's addiction to big government, unaffordable entitlements, cradle-to-grave welfare, and a dependence on mass immigration needed to sustain it has become an existential threat to some of the oldest nation-states in the world.

And now the last holdout, the United States, is embarking on the same grim path: After the President unveiled his budget, I heard Americans complain, oh, it's another Jimmy Carter, or LBJ's Great Society, or the new New Deal. You should be so lucky. Those nickel-and-dime comparisons barely begin to encompass the wholesale Europeanization that's underway. The 44th president's multi-trillion-dollar budget, the first of many, adds more to the national debt than all the previous 43 presidents combined, from George Washington to George Dubya. The President wants Europeanized health care, Europeanized daycare, Europeanized education, and, as the Europeans have discovered, even with Europeanized tax rates you can't make that math add up. In Sweden, state spending accounts for 54% of GDP. In America, it was 34%—ten years ago. Today, it's about 40%. In four years' time, that number will be trending very Swede-like.
But forget the money, the deficit, the debt, the big numbers with the 12 zeroes on the end of them. So-called fiscal conservatives often miss the point. The problem isn't the cost. These programs would still be wrong even if Bill Gates wrote a check to cover them each month. They're wrong because they deform the relationship between the citizen and the state. Even if there were no financial consequences, the moral and even spiritual consequences would still be fatal. That's the stage where Europe is.

America is just beginning this process. I looked at the rankings in Freedom in the 50 States published by George Mason University last month. New Hampshire came in Number One, the Freest State in the Nation, which all but certainly makes it the freest jurisdiction in the Western world. Which kind of depressed me. Because the Granite State feels less free to me than it did when I moved there, and you always hope there's somewhere else out there just in case things go belly up and you have to hit the road. And way down at the bottom in the last five places were Maryland, California, Rhode Island, New Jersey, and the least free state in the Union by some distance, New York.

New York! How does the song go? "If you can make it there, you'll make it anywhere!" If you can make it there, you're some kind of genius. "This is the worst fiscal downturn since the Great Depression," announced Governor Paterson a few weeks ago. So what's he doing? He's bringing in the biggest tax hike in New York history. If you can make it there, he can take it there—via state tax, sales tax, municipal tax, a doubled beer tax, a tax on clothing, a tax on cab rides, an "iTunes tax," a tax on haircuts, 137 new tax hikes in all. Call 1-800-I-HEART-NEW-YORK today and order your new package of state tax forms, for just $199.99, plus the 12% tax on tax forms and the 4% tax form application fee partially refundable upon payment of the 7.5% tax filing tax. If you can make it there, you'll certainly have no difficulty making it in Tajikistan.
New York, California... These are the great iconic American states, the ones we foreigners have heard of. To a penniless immigrant called Arnold Schwarzenegger, California was a land of plenty. Now Arnold is an immigrant of plenty in a penniless land: That's not an improvement. One of his predecessors as governor of California, Ronald Reagan, famously said, "We are a nation that has a government, not the other way around." In California, it's now the other way around: California is increasingly a government that has a state. And it is still in the early stages of the process. California has thirtysomething million people. The Province of Quebec has seven million people. Yet California and Quebec have roughly the same number of government workers. "There is a great deal of ruin in a nation," said Adam Smith, and America still has a long way to go. But it's better to jump off the train as you're leaving the station and it's still picking up speed than when it's roaring down the track and you realize you've got a one-way ticket on the Oblivion Express.

"Indolence," in Machiavelli's word: There are stages to the enervation of free peoples. America, which held out against the trend, is now at Stage One: The benign paternalist state promises to make all those worries about mortgages, debt, and health care disappear. Every night of the week, you can switch on the TV and see one of these ersatz "town meetings" in which freeborn citizens of the republic (I use the term loosely) petition the Sovereign to make all the bad stuff go away. "I have an urgent need," a lady in Fort Myers beseeched the President. "We need a home, our own kitchen, our own bathroom." He took her name and ordered his staff to meet with her. Hopefully, he didn't insult her by dispatching some no-name deputy assistant associate secretary of whatever instead of flying in one of the bigtime tax-avoiding cabinet honchos to nationalize a Florida bank and convert one of its branches into a desirable family residence, with a swing set hanging where the drive-thru ATM used to be.

As all of you know, Hillsdale College takes no federal or state monies. That used to make it an anomaly in American education. It's in danger of becoming an anomaly in America, period. Maybe it's time for Hillsdale College to launch the Hillsdale Insurance Agency, the Hillsdale Motor Company and the First National Bank of Hillsdale. The executive supremo at Bank of America is now saying, oh, if only he'd known what he knows now, he wouldn't have taken the government money. Apparently it comes with strings attached. Who knew? Sure, Hillsdale College did, but nobody else.

If you're a business, when government gives you 2% of your income, it has a veto on 100% of what you do. If you're an individual, the impact is even starker. Once you have government health care, it can be used to justify almost any restraint on freedom: After all, if the state has to cure you, it surely has an interest in preventing you needing treatment in the first place. That's the argument behind, for example, mandatory motorcycle helmets, or the creepy teams of government nutritionists currently going door to door in Britain and conducting a "health audit" of the contents of your refrigerator. They're not yet confiscating your Twinkies; they just want to take a census of how many you have. So you do all this for the "free" health care—and in the end you may not get the "free" health care anyway. Under Britain's National Health Service, for example, smokers in Manchester have been denied treatment for heart disease, and the obese in Suffolk are refused hip and knee replacements. Patricia Hewitt, the British Health Secretary, says that it's appropriate to decline treatment on the basis of "lifestyle choices." Smokers and the obese may look at their gay neighbor having unprotected sex with multiple partners, and wonder why his "lifestyle choices" get a pass while theirs don't. But that's the point: Tyranny is always whimsical.

And if they can't get you on grounds of your personal health, they'll do it on grounds of planetary health. Not so long ago in Britain it was proposed that each citizen should have a government-approved travel allowance. If you take one flight a year, you'll pay just the standard amount of tax on the journey. But, if you travel more frequently, if you take a second or third flight, you'll be subject to additional levies—in the interest of saving the planet for Al Gore's polar bear documentaries and that carbon-offset palace he lives in in Tennessee.

Isn't this the very definition of totalitarianism-lite? The Soviets restricted the movement of people through the bureaucratic apparatus of "exit visas." The British are proposing to do it through the bureaucratic apparatus of exit taxes—indeed, the bluntest form of regressive taxation. As with the Communists, the nomenklatura—the Prince of Wales, Al Gore, Madonna—will still be able to jet about hither and yon. What's a 20% surcharge to them? Especially as those for whom vast amounts of air travel are deemed essential—government officials, heads of NGOs, environmental activists—will no doubt be exempted from having to pay the extra amount. But the ghastly masses will have to stay home.

"Freedom of movement" used to be regarded as a bedrock freedom. The movement is still free, but there's now a government processing fee of $389.95. And the interesting thing about this proposal was that it came not from the Labour Party but the Conservative Party.

That's Stage Two of societal enervation—when the state as guarantor of all your basic needs becomes increasingly comfortable with regulating your behavior. Free peoples who were once willing to give their lives for liberty can be persuaded very quickly to relinquish their liberties for a quiet life. When President Bush talked about promoting democracy in the Middle East, there was a phrase he liked to use: "Freedom is the desire of every human heart." Really? It's unclear whether that's really the case in Gaza and the Pakistani tribal lands. But it's absolutely certain that it's not the case in Berlin and Paris, Stockholm and London, New Orleans and Buffalo. The story of the Western world since 1945 is that, invited to choose between freedom and government "security," large numbers of people vote to dump freedom every time—the freedom to make your own decisions about health care, education, property rights, and a ton of other stuff. It's ridiculous for grown men and women to say: I want to be able to choose from hundreds of cereals at the supermarket, thousands of movies from Netflix, millions of songs to play on my iPod—but I want the government to choose for me when it comes to my health care. A nation that demands the government take care of all the grown-up stuff is a nation turning into the world's wrinkliest adolescent, free only to choose its record collection.

And don't be too sure you'll get to choose your record collection in the end. That's Stage Three: When the populace has agreed to become wards of the state, it's a mere difference of degree to start regulating their thoughts. When my anglophone friends in the Province of Quebec used to complain about the lack of English signs in Quebec hospitals, my response was that, if you allow the government to be the sole provider of health care, why be surprised that they're allowed to decide the language they'll give it in? But, as I've learned during my year in the hellhole of Canadian "human rights" law, that's true in a broader sense. In the interests of "cultural protection," the Canadian state keeps foreign newspaper owners, foreign TV operators, and foreign bookstore owners out of Canada. Why shouldn't it, in return, assume the right to police the ideas disseminated through those newspapers, bookstores and TV networks it graciously agrees to permit?

When Maclean's magazine and I were hauled up in 2007 for the crime of "flagrant Islamophobia," it quickly became very clear that, for members of a profession that brags about its "courage" incessantly (far more than, say, firemen do), an awful lot of journalists are quite content to be the eunuchs in the politically correct harem. A distressing number of Western journalists see no conflict between attending lunches for World Press Freedom Day every month and agreeing to be micro-regulated by the state. The big problem for those of us arguing for classical liberalism is that in modern Canada there's hardly anything left that isn't on the state dripfeed to one degree or another: Too many of the institutions healthy societies traditionally look to as outposts of independent thought—churches, private schools, literature, the arts, the media—either have an ambiguous relationship with government or are downright dependent on it. Up north, "intellectual freedom" means the relevant film-funding agency—Cinedole Canada or whatever it's called—gives you a check to enable you to continue making so-called "bold, brave, transgressive" films that discombobulate state power not a whit.

And then comes Stage Four, in which dissenting ideas and even words are labeled as "hatred." In effect, the language itself becomes a means of control. Despite the smiley-face banalities, the tyranny becomes more naked: In Britain, a land with rampant property crime, undercover constables nevertheless find time to dine at curry restaurants on Friday nights to monitor adjoining tables lest someone in private conversation should make a racist remark. An author interviewed on BBC Radio expressed, very mildly and politely, some concerns about gay adoption and was investigated by Scotland Yard's Community Safety Unit for Homophobic, Racist and Domestic Incidents. A Daily Telegraph columnist is arrested and detained in a jail cell over a joke in a speech. A Dutch legislator is invited to speak at the Palace of Westminster by a member of the House of Lords, but is banned by the government, arrested on arrival at Heathrow and deported.

America, Britain, and even Canada are not peripheral nations: They're the three anglophone members of the G7. They're three of a handful of countries that were on the right side of all the great conflicts of the last century. But individual liberty flickers dimmer in each of them. The massive expansion of government under the laughable euphemism of "stimulus" (Stage One) comes with a quid pro quo down the line (Stage Two): Once you accept you're a child in the government nursery, why shouldn't Nanny tell you what to do? And then—Stage Three—what to think? And—Stage Four—what you're forbidden to think . . . .

Which brings us to the final stage: As I said at the beginning, Big Government isn't about the money. It's more profound than that. A couple of years back Paul Krugman wrote a column in The New York Times asserting that, while parochial American conservatives drone on about "family values," the Europeans live it, enacting policies that are more "family friendly." On the Continent, claims the professor, "government regulations actually allow people to make a desirable tradeoff-to modestly lower income in return for more time with friends and family."
As befits a distinguished economist, Professor Krugman failed to notice that for a continent of "family friendly" policies, Europe is remarkably short of families. While America's fertility rate is more or less at replacement level—2.1—seventeen European nations are at what demographers call "lowest-low" fertility—1.3 or less—a rate from which no society in human history has ever recovered. Germans, Spaniards, Italians and Greeks have upside-down family trees: four grandparents have two children and one grandchild. How can an economist analyze "family friendly" policies without noticing that the upshot of these policies is that nobody has any families?

As for all that extra time, what happened? Europeans work fewer hours than Americans, they don't have to pay for their own health care, they're post-Christian so they don't go to church, they don't marry and they don't have kids to take to school and basketball and the 4-H stand at the county fair. So what do they do with all the time?

Forget for the moment Europe's lack of world-beating companies: They regard capitalism as an Anglo-American fetish, and they mostly despise it. But what about the things Europeans supposedly value? With so much free time, where is the great European art? Where are Europe's men of science? At American universities. Meanwhile, Continental governments pour fortunes into prestigious white elephants of Euro-identity, like the Airbus A380, capable of carrying 500, 800, a thousand passengers at a time, if only somebody somewhere would order the darn thing, which they might consider doing once all the airports have built new runways to handle it.

"Give people plenty and security, and they will fall into spiritual torpor," wrote Charles Murray in In Our Hands. "When life becomes an extended picnic, with nothing of importance to do, ideas of greatness become an irritant. Such is the nature of the Europe syndrome."

The key word here is "give." When the state "gives" you plenty—when it takes care of your health, takes cares of your kids, takes care of your elderly parents, takes care of every primary responsibility of adulthood—it's not surprising that the citizenry cease to function as adults: Life becomes a kind of extended adolescence—literally so for those Germans who've mastered the knack of staying in education till they're 34 and taking early retirement at 42. Hilaire Belloc, incidentally, foresaw this very clearly in his book The Servile State in 1912. He understood that the long-term cost of a welfare society is the infantilization of the population.

Genteel decline can be very agreeable—initially: You still have terrific restaurants, beautiful buildings, a great opera house. And once the pressure's off it's nice to linger at the sidewalk table, have a second cafĂ© au lait and a pain au chocolat, and watch the world go by. At the Munich Security Conference in February, President Sarkozy demanded of his fellow Continentals, "Does Europe want peace, or do we want to be left in peace?" To pose the question is to answer it. Alas, it only works for a generation or two. And it's hard to come up with a wake-up call for a society as dedicated as latterday Europe to the belief that life is about sleeping in.

As Gerald Ford liked to say when trying to ingratiate himself with conservative audiences, "A government big enough to give you everything you want is big enough to take away everything you have." And that's true. But there's an intermediate stage: A government big enough to give you everything you want isn't big enough to get you to give any of it back. That's the position European governments find themselves in. Their citizens have become hooked on unaffordable levels of social programs which in the end will put those countries out of business. Just to get the Social Security debate in perspective, projected public pension liabilities are expected to rise by 2040 to about 6.8% of GDP in the U.S. In Greece, the figure is 25%—i.e., total societal collapse. So what? shrug the voters. Not my problem. I want my benefits. The crisis isn't the lack of money, but the lack of citizens—in the meaningful sense of that word.

Every Democrat running for election tells you they want to do this or that "for the children." If America really wanted to do something "for the children," it could try not to make the same mistake as most of the rest of the Western world and avoid bequeathing the next generation a leviathan of bloated bureaucracy and unsustainable entitlements that turns the entire nation into a giant Ponzi scheme. That's the real "war on children" (to use another Democrat catchphrase)—and every time you bulk up the budget you make it less and less likely they'll win it.

Conservatives often talk about "small government," which, in a sense, is framing the issue in leftist terms: they're for big government. But small government gives you big freedoms—and big government leaves you with very little freedom. The bailout and the stimulus and the budget and the trillion-dollar deficits are not merely massive transfers from the most dynamic and productive sector to the least dynamic and productive. When governments annex a huge chunk of the economy, they also annex a huge chunk of individual liberty. You fundamentally change the relationship between the citizen and the state into something closer to that of junkie and pusher—and you make it very difficult ever to change back. Americans face a choice: They can rediscover the animating principles of the American idea—of limited government, a self-reliant citizenry, and the opportunities to exploit your talents to the fullest—or they can join most of the rest of the Western world in terminal decline. To rekindle the spark of liberty once it dies is very difficult. The inertia, the ennui, the fatalism is more pathetic than the demographic decline and fiscal profligacy of the social democratic state, because it's subtler and less tangible. But once in a while it swims into very sharp focus. Here is the writer Oscar van den Boogaard from an interview with the Belgian paper De Standaard. Mr. van den Boogaard, a Dutch gay "humanist" (which is pretty much the trifecta of Eurocool), was reflecting on the accelerating Islamification of the Continent and concluding that the jig was up for the Europe he loved. "I am not a warrior, but who is?" he shrugged. "I have never learned to fight for my freedom. I was only good at enjoying it." In the famous Kubler-Ross five stages of grief, Mr. van den Boogard is past denial, anger, bargaining and depression, and has arrived at a kind of acceptance.
"I have never learned to fight for my freedom. I was only good at enjoying it." Sorry, doesn't work—not for long. Back in New Hampshire, General Stark knew that. Mr. van den Boogard's words are an epitaph for Europe. Whereas New Hampshire's motto—"Live free or die!"—is still the greatest rallying cry for this state or any other. About a year ago, there was a picture in the papers of Iranian students demonstrating in Tehran and waving placards. And what they'd written on those placards was: "Live free or die!" They understand the power of those words; so should we.
Author: Ken Coman
•9:38 PM

I just had to take a screen shot of this on Yahoo! today because I found it just too silly.

What is the featured article? "First lady's 'sneaky splurge." When I saw that I said to myself, "Who cares?"

Is there so much demand out there for "Michelle Obama Fashion" that there needs to be a Yahoo! search ready to go and a feature article about it and her $540 shoes?

Furthermore, does there really need to be a secondary article on "'Beautiful people' of the White House"?

My problem isn't that she paid $540 for her shoes. She can buy whatever pair of shoes she wants in my opinion. My problem is that we take so much interest in it that it is somehow worthy of that article. My problem is that we take so much concern with celebrities, fashion and beauty. My problem is that it really isn't anyone's business what shoes she buys and they are making it seem like it is somehow worthy of front page featured news. My problem is that we talk so much about other people and leave them no privacy - no simple respect as individual human beings. My problem is that we seem to use people for our own needs. My problem is that we would rather read about "Beautiful people of the White House" than applying our minds to find creative solutions to the problems facing our individual lives, communities, nation and world. My problem is that this article is merely one example of the hundreds or thousands of articles published today about what someone wore, what some celebrity did, what some famous person's child did, what some politician did, what we can do to lose 50 pounds, what we can do to look like this famous person...

My problem is that we seem to not be discovering the deep resevoir of power implanted within mankind for the best, nobelest and most saluatory purposes for the benefit of our brothers and sisters but instead seem to squander our time on selfish and, ultimately, unrewarding pursuits. Where much is given, much is required.

Can you only imagine what the collective power of our world's billions of people could do if they united together in the common cause of peace, harmony and plenty? Surely there are many things that must happen for this come to pass but this is one of them. Let us help to awaken the dormant and latent powers of good within ourselves and each other and not be distracted by the shallow and disrespectful.