Tuition Bubble Makes Housing Bubble Look Weak

The cost of a college education today is more expensive than it has ever been, in both real and nominal terms. The high cost leaves graduates saddled with tens of thousands of dollars of debt, on average $21,000. Our theoretical best and brightest are debt slaves before they've even started their first real job.

Federally backed loans offer better interest rates than private loans, but carry restrictions if you declare bankruptcy. You can't get rid of a federal loan so easily.

It's a cultural failing, if you ask me. Surely we can do better than this. Maybe if the government stopped inflating the tuition bubble with federally subsidized loans, we would find a better way to pay for college.

Keep It Simple Stupid with a Flat Tax

A Brief Guide to the Flat Tax, by Daniel Mitchell, Ph.D.

These major features of a flat tax are:

A Single Flat Rate. All flat tax proposals have a single rate, usually less than 20 percent. The low, flat rate solves the problem of high marginal tax rates by reducing penalties against productive behavior, such as work, risk taking, and entrepreneurship.

Elimination of Special Preferences. Flat tax proposals would eliminate provisions of the tax code that bestow preferential tax treatment on certain behaviors and activities. Getting rid of deductions, credits, exemptions, and other loopholes also helps solve the problem of complexity, allowing taxpayers to file their tax returns on a postcard-sized form.

No Double Taxation of Saving and Invest­ment. Flat tax proposals would eliminate the tax code's bias against capital formation by ending the double taxation of income that is saved and invested. This means no death tax, no capital gains tax, no double taxation of saving, and no double tax on dividends. By taxing income only one time, a flat tax is easier to enforce and more conducive to job creation and capital formation.

Territorial Taxation. Flat tax proposals are based on the commonsense notion of "territorial taxation," meaning that governments should tax only income that is earned inside national borders. By getting rid of "worldwide taxation," a flat tax enables U.S. taxpayers and companies to compete on a level playing field around the world.

Family-Friendly. All flat tax proposals have one "loophole." Households receive a generous exemp­tion based on family size. For instance, a family of four would not begin to pay tax until its annual income reached more than $30,000.[6]

Consumption-Based. A tax code that does not discriminate against saving and investment is con­sidered a consumption-based tax system, regard­less of whether taxes are deducted from the paycheck or collected at the cash register. In this respect, a flat tax is a type of consumption tax. The difference between a flat tax and a national sales tax is where the tax is collected. A flat tax is levied on income-but only once and at one low rate-as it is earned. A sales tax is levied on income-but only once and at one low rate-as it is spent.

Last year, 47% of Americans paid no federal income tax. However, they did not get off scott free-- no, their labor became profit for their employer, and that profit became tax revenue for the federal government, through business and high-income taxes. That means they do not even see a price tag on how much of their labor ended up going to taxes.

With the flat tax proposal above, many of this 47% would have to pay taxes. However, since their employer would be conceivably taxed much less, he could afford to pay his employees more.

But the real reason I like the flat tax is that I think people should see the price tag of the government they have, because the more people know how much it costs, the more they will demand accountability.

Thomas Jefferson believed that an informed electorate was necessary for democracy to succeed, as he wrote to a friend:

" ... whenever the people are well-informed, they can be trusted with their own government; that, whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights"

What information could be more important, more basic, than the actual price each of us must pay for our the government?

Why Should You Want A Government Job?

The question is, why wouldn't you want a government job?

Government jobs PAY. On the state and federal level, the government pays its employees well, to speak nothing of generous pensions and health benefits. And the best part is you almost never get fired or downsized. You may have to join a union, but it's worth it. It's easy to squeeze an institution that has no bottom line.

While private pay and economic growth is stagnating, our state employee counterparts have secure, great paying jobs, at our expense.

Now, if I had my druthers, I'd cut huge thousands of jobs from the federal government. But I know I'll have to change a few more minds before we do that. So in the meantime, could we just bring government salaries more in line with their private sector counterparts?

Our leaders bemoan the bank bailouts, but too many government employees enjoy excess on the public dime. We can't afford it, and paying for it is choking our economy when it needs the most help. Even if we could reduce the deficit just a little, we should look at it.

But for now, government jobs remain a staple of American employment. Solid pay, good benefits. We should all be so lucky.

[WSJ and USAToday]

Rage Against the Morons

I found this in my travels:

To President Obama and all 535 voting members of the Legislature,
It is now official you are ALL corrupt morons:

1. The U.S. Post Service was established in 1775. You have had 234 years to get it right and it is becoming more unsustainable by the day.

2. Social Security was established in 1935. You have had 74 years to get it right and it is bankrupt.

3. Fannie Mae was established in 1938. You have had 71 years to get it right. It is bankrupt and now has an unlimited line of credit from the Fed.

4. The War on Poverty started in 1964. You have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to "the poor" and they only want more.

5. Medicare and Medicaid were established in 1965. You have had 44 years to get it right and they are bankrupt.

6. Freddie Mac was established in 1970. You have had 39 years to get it right. It is bankrupt and now has an unlimited credit line from the Fed.

7. The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 32 years to get it right and it is an abysmal failure.

You have FAILED in every "government service" you have shoved down our throats while overspending our tax dollars AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM??

This about sums up my feelings toward our beloved federal government. Depending on how the vote goes Sunday, we may soon have yet another bureaucracy to waste billions of our tax dollars.

The Constitution is Dead

Every person elected as President of the United States must recite the following oath.

"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

Every president since FDR has utterly failed to uphold this oath.

Upholding the Constitution's sharp limits on government was once a sacred duty for the men who worked in the oval office, even if that meant making unpopular decisions.

They knew that limiting the scope of the federal government was crucial to the continuation of the American experiment. They knew that turning the federal government into a giant money pool would ultimately destroy the freedoms our forefathers had fought so hard for. They knew that, sometimes, they would have to make the hard choices, even if it meant they would be ostracized.

That is why they took that oath.

President Franklin Pierce’s 1854 veto of a measure to help the mentally ill read, “I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

One cannot even imagine a president today vetoing a reading program for the mentally ill. But that is exactly what presidents of the past did, on a regular basis. Our government, by design, was never meant to be a public charity. But that is exactly what it has become.

On the issue of using federal funds to build up infrastructure, something similar to Obama's recent Stimulus Program, President James Madison had this to say:

“Having considered the bill this day presented to me . . . which sets apart and pledges funds ‘for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,’ I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution. . . .”

Madison could find no provision in the Constitution allowing federal infrastructure projects precisely because no provision ever existed. The federal government, as the founders envisioned, was never intended to take on the responsibility of building roadways or transport. In their minds, these were best left to the states.

The definition for what is allowable under our constitution has shifted so much in the last 100 years that today's federal government would be unrecognizable to presidents of the past.

Today, every congressman goes to Washington with his or her hand out, trying desperately to funnel as much money as possible into their districts. This comes in the form of road projects, bridges, government office buildings, financial assistance, tax breaks, etc.

This system has shifted the focus of our lawmakers from good governance to begging. They beg for campaign contributions so that they can go to Washington, D.C. to beg for money to pay back their campaign contributors. Then they must beg for more to keep their constituents happy, so that they can win another election and beg for more. This cycle is destroying our nation. It is obvious from our ballooning federal debt. And We always want more. But we never want to pay for it.

This is where principled men and women are supposed to stand up and shout "No!" No to stimulus spending! No to health care spending! No to education spending! No to welfare spending!

We want all these things, of course. We think these things will end our reliance on our crappy jobs, or on our crappy economy, we think these things will set us free, free to do the things we really want to do.

But what many do not realize is that these things end up controlling us. Huge swathes of our economy, including millions of jobs, live or die depending on how much our government wants to spend on a particular project.

Our spending through Medicare and on health insurance tax cuts is driving health care prices through the roof, making health care unaffordable to anyone who is not receiving federal benefits.

Our spending on education has centralized control of tens of thousands of schools, millions of teachers, and tens of millions of students into the hands of a few people in Washington, D.C.

Our welfare spending, which we say helps people without jobs, takes money out of the economy, money that could have been used to create jobs for the very people we claim to be helping.

Just Say No

It is time to say "No." If you want special interests out of Washington, remove what is bringing them there: the money. If you want to cut spending and reduce the deficit, you have to remove money. If you want to bring politics back to the state and local level, where you actually have a voice, then you need to take back the money. But it begins by saying "No."

The transition will not be an easy one, but when have Americans ever shied away from a challenge? Living under a paternalistic government is easy, but it quickly builds dependence. And once you are dependent, you are no longer free. We claim we want freedom, but we need the government constantly. We need the benefits it gives us. We have stopped providing for ourselves. Instead we look up to the government, with our hands out. We have given our freedom away, in exchange for convenience.

America was not meant to have a government that cares for you, that picks you up when you skin your knee, that makes you sandwich when you get hungry. Americans are supposed to be brave. We are supposed to take what life gives us, good or bad, and thrive.

America was meant to be the land of opportunity, the land of freedom, the land where you did what you want, and took responsibility for yourself. That is what the founders had in mind when they penned the Constitution 224 years ago. The government was there to protect your freedom to follow your dreams, and little more.

America was not supposed to be easy. It was supposed to be free. We have strayed so far from that ideal that I do not know if we can ever find our way back. But I will try, because I know what must be done. I know what must be done to revive the American spirit, to get back to the ideals upon which this country was founded, to get back the ideals that made this country great.

It starts by saying "No."

Warrantless Wireless Tracking

In Big Brother news, the Justice Department is arguing in the first federal appeals court today for the right of law enforcement to use tracking data from cell phones without a warrant.

Even though police are tapping into the locations of mobile phones thousands of times a year, the legal ground rules remain unclear, and federal privacy laws written a generation ago are ambiguous at best. On Friday, the first federal appeals court to consider the topic will hear oral arguments (PDF) in a case that could establish new standards for locating wireless devices.

In that case, the Obama administration has argued that warrantless tracking is permitted because Americans enjoy no "reasonable expectation of privacy" in their--or at least their cell phones'--whereabouts. U.S. Department of Justice lawyers say that "a customer's Fourth Amendment rights are not violated when the phone company reveals to the government its own records" that show where a mobile device placed and received calls.

I'm going to go out on a limb here and say that constant tracking of roughly every citizen in America is a violation of our 4th Amendment right to be secure in our persons, houses, papers, and effects.

When reached for local comment, Kevin Denny of Carrboro said, "This is 24-type shit."

When asked about the 4th Amendment and the necessity of warrants, Denny replied, "Shit is going down every minute. No time for warrants."

[cnet via nmoore63]

US Patent Office Surprisingly Primitive

The glorious US Patent Office, arbiter of all things innovative, apparently grinds to a halt when page is faxed to them upside down. Yes, you read that correctly. Faxed. Upside down.

Here's the message one potential patent candidate got after submitting his paperwork:

The faxed submission was received upside down. We are unable to continue processing these images.

There is so much wrong with that statement I won't even start, except to say I can't believe the future of American technological innovation relies on these clowns, and I can't believe my tax dollars are supporting them.

I want my money back.

[via Gizmodo]

How the Constitution Took Our Freedom

In the 18th century, many felt the Constitution was a massive expansion of government power. They may have been right.

When viewed objectively, the very words of the Constitution reveal its true purpose. Constitutionalists often cite Article I Section 8 as proof of the limits on the powers granted to the federal government, but let’s not forget what that section actually says. It begins,

“The Congress shall have the power to…”

What follows is a long list of powers that the central government did not previously have. Each subsequent section of the Constitution invests power in the one of the three branches of government. Nowhere in the document are these powers limited, except for the short (but nevertheless important) list of exceptions contained in Section 9.

The expansion of power provided by the Constitution is one I had never considered, but one we should take a hard look at considering the runaway growth of everybody's favorite federal government.

[via Matt Hoagland]