Wednesday, October 30, 2013

Should Governments Run Power Plants?

By Ben Porter

Republished from Libertas Institute under the Creative Commons License

The story of the Kaysville power plant

Kaysville is a mid-sized city with a population around 28,000 that sits in the heart of Davis County, Utah[1]. Along with 22 other municipal purchasers in Utah, six purchasers from California, and six cooperative purchasers, Kaysville supplies its residents with electricity through the Intermountain Power Agency’s (IPA) Intermountain Power Project (IPP)[2].

Kaysville, along with Bountiful city, acquired partial ownership in IPP in 1982 as part of a “calculated risk” in the event that power prices were to rise unexpectedly. By using the revenues generated from the sale of power to California, the city was able to provide the funds for the city’s share of operation and maintenance costs[3].

On its face this seems like a good idea. By allowing the government to take such commercial action on behalf of the people, it is theorized that the community as a whole will benefit. After all, by using the bulk purchasing power of government, the people can receive their electricity at a much lower cost than if they were to go it alone. (The same argument is used in support of government-organized health insurance exchanges.)

Opponents of the idea stress that while in theory it sounds good, the reality is that government is run by fallible men. These individuals can easily make poor decisions, and/or become corrupt. At a minimum, even an honest government can never act in the best interest of all citizens simultaneously; there will always be someone who is worse off for any given decision made. Thus there is no way for the government to conduct such operations without violating the rights of at least one individual. Eventually the incompetence or corruption of government will put some people in a far worse position than they were before.

But enough of the theoretical—how has the power plant worked out?

In the several decades that have passed since the investment in IPP by Kaysville city, is there any evidence of incompetence or corruption? There is, and it’s quickly becoming a big issue to some Kaysville City residents.

On October 16th of 2012, the Kaysville City Council voted to raise power rates by 10% “to accrue reserves for the city’s power fund, which is used to operate the city-owned power plant.” This is the simplest illustration of why governments should not own power plants—a business best left to the more efficient and accountable private sector. The city has taken on a legal obligation as a partial owner in a business, and that business is now not profitable enough to cover its costs. Using the unique taxation power held by government that is not wielded by the private sector, the city extracts the money it needs to cover its wrongly incurred liabilities from citizens under the color of law. This is not only a violation of individual rights but also the free market. Because of its ability to tax its problems away, socializing its losses amongst the masses, the city is prevented from feeling negative market forces the way a traditional business would after making a poor investment. No private business could get away with this, but citizens are largely powerless until the next election, and even then only if enough citizens take the time and responsibility to inform themselves and head to the polls.

Why was the city’s reserve fund short in the first place? It turns out that the city had taken money from its electrical fund to purchase some land. This purpose does not even closely resemble the reason given to residents for the collection of the electrical fund tax[4].

Earlier this year, the Standard Examiner reported that Kaysville City would be receiving a windfall $5.3 Million from the sale of some land to Terra Basin, LLC—the same land that was purchased with electricity reserve fund money[5]. Whether planned this way or not, the city forcibly taxed residents to support the city’s private business interests in an electricity plant from which they receive no benefit (power is more expensive for Kaysville residents than many surrounding communities. They would be better off in the private sector[6]). If this isn’t bad enough as is, the money was then taken for the city’s use in their private real estate business[7].

After the power rate increases several months earlier, some residents have begun to vocalize their opposition to the city’s actions. They advocate that the city should use this newly acquired windfall to replenish the electricity reserve funds and return power rates to their previously lower amounts. Upon receiving this suggestion, when asked by the Standard Examiner, the city declined to commit to any action, though Mayor Hiatt did say, “I think it is reasonable to expect the city to reconsider a rate reduction when the property (sale) closes and funds.”[8]

This circumstance is not an anomaly, as it is not the only time that Kaysville city has dipped into power plant funds to pay for other things that are not electricity related.

In May of 2012, the city of Kaysville was reported as “wanting to transfer power fund revenues to the general fund to pay the $265,000 annual cost of adding three new police officers to the force.” Orwin Draney, a long-time Kaysville resident said, “As a rate payer, I expect the money that I pay in my power bill be used to purchase electricity and to maintain the infrastructure to deliver that power to me and the community.” Such expectations are not at all unreasonable, and are shared by many other residents[9]. More information about the financial management of Kaysville City is available from an audit conducted by the Utah State Auditor[10].

The story may have a happy ending. Fortunately, the residents of Kaysville are recognizing this gross misuse of funds and violation of their trust. Proposition 5 is being put forth on the November 5th 2013 ballot that will require funds collected in the name of electricity maintenance to be spent only on maintaining the power plant[11].

Why it matters

You may be asking yourself, what does government incompetence (at best) or corruption (at worst) in Kaysville have to do with me? There is a bigger lesson here about the inevitable nature of government. Wise statesmen, observing the history and nature of government, have affirmed that it is most accountable to the people at local levels[12]. That being the case, if a comparatively small city like Kaysville can get so off-track, how much easier is it for state and federal governments to deviate from their proper role?

This issue highlights an important fundamental truth about government: left unchecked, its tendency is to grow and centralize its power. It is therefore important to restrict government power to the bare minimum required to protect life, liberty and property.

It is vitally important that we stand up to government when it oversteps its bounds and engages in practices that should be left to the private sector. The more we tolerate figurative coloring outside the lines, the more difficult it will be to clean up the mess. If we ever want to restrict the power wielded by Washington D.C., we must first set our own house in order.

[1] U.S. Census Bureau. "Kaysville City: Profile of General Population and Housing Characteristics: 2010." American Fact Finder. (accessed October 12, 2013).

[2] Intermountain Power Agency. "IPA Generation Entitlement Shares." (accessed October 11, 2013).

[3] Parkinson, Paul C.. "Davis Cities' Power Outlook is Bright." Salt Lake City and Utah Breaking news, sports, entertainment and news headlines - Deseret News. (accessed October 12, 2013).

[4] Saxton, Bryon. "Kaysville activist: Windfall from sale of city land should mean cut in power rates." Standard-Examiner - Top of Utah News & Multimedia. (accessed October 12, 2013).

[5] Ibid.

[6] "Electric Billing Rate Comparison." (accessed October 12, 2013).

[7] Saxton, Bryon. "Kaysville activist: Windfall from sale of city land should mean cut in power rates." Standard-Examiner - Top of Utah News & Multimedia. (accessed October 12, 2013).

[8] Ibid.

[9] Saxton, Bryon. "Kaysville to pay for new cops with power funds." Standard-Examiner - Top of Utah News & Multimedia. (accessed October 12, 2013).

[10] Office of the Utah State Auditor. "Kaysville City: Findings and Recommendations." (accessed October 11, 2013).

[11] "Proposition Number 5." (accessed October 12, 2013).

[12] Kelly, Martin. "Why did the Articles of Confederation Fail - Articles of Confederation." American History From About. (accessed October 3, 2013).

Thursday, October 3, 2013

Utah’s Oppressive Age Restrictions on Tobacco

By Ben Porter

Recently, an article appeared on KSL news describing a new bill proposed by Senator Stuart Reid (R-Ogden) in the Utah legislature that “seeks to save lives by raising [the] legal smoking age.” Rep. Kraig Powell, R-Heber City, is a supporter of the bill. Powell “says the research shows teens try cigarettes early but usually get addicted around age 20…. ‘If we can delay the actual getting hooked on cigarettes to a little bit later, then the people may never get hooked.’” [1]

Essentially, Reid and Powell are using the power of government to control the behavior and choices of legal adults, because they think they know better than the people what’s good for the people. They believe that adults should not be trusted with making their own choices about what to take into their bodies. While it is certainly the consensus of the medical community that cigarette smoking harms your health, it is an individuals right to life, liberty, and the pursuit of happiness to decide what to and to not consume.

Upon reading this article, I experienced a flashback to several months ago when the mayor of New York City, Michael Bloomberg was fighting hard to institute a ban on large sodas. His rationale was that by making it harder to acquire larger quantities of sodas, people would voluntarily reduce their intake because of the inconvenience. This would cause them to be healthier, requiring less medical care, and ultimately saving tax dollars. However, when faced with such a nanny state restriction as a ban on large sodas, even the generally authoritarian friendly population of New York City was a little upset. The law has been challenged in court.[2]

How is the Bloomberg Soda Ban related to Utah’s proposed smoking age increase? Ultimately, they have the same goal through similar means: To force people to become healthier by limiting their personal freedom to choose which products they can legally consume. The politicians behind such legislation seek to use the force of government to micro-manage citizens’ lives. They justify their desire for power by speculating that the quality of life for individuals and society will increase as a result of their laws. It is possible that the law would accomplish their designs, but it is not their right to exercise such authoritarian control over the citizenry.

If the bill is passed into law, interesting side effects will likely occur. The black market for cigarettes will see an increase in activity with the financial benefits going to criminals and neighboring states. History is replete with examples of what the unintended side effects are of substance control (see the results of prohibition on alcohol consumption,[3] and the results of the war on drugs on Marijuana usage).[4] Not only are we depriving our people of the freedom and agency to make their own choices, but we are filling up our jails with non-violent offenders that are guilty of nothing but ingesting substance into their own bodies.

Another likely side effect of raising the legal age of purchasing cigarettes will be the importing of cigarettes from neighboring states. Because cigarettes are plentiful and available mere hours away, in either Idaho, Nevada, or Wyoming, they will no doubt flow from the aforementioned states into the State of Utah. This has the unintended side effect of reducing tax revenues and forcing more people underground. It may also thwart attempts to measure cigarette usage because users under 21 will be less likely to admit they are smoking.

If you are still not convinced that this is a bad direction to travel, consider where and how the limit is drawn. Where do we stop? Science has shown that consuming soda and sugary snacks is bad for your health. Should we require people to be a certain age to purchase sugar? Many fast food meals exceed the recommended amount of calories per meal by multiples and they have been proven to be addictive.[5] Should we restrict fast food to individuals over age 30, since primarily those eating fast food tend to be younger? By the same logic that Rep. Powell uses to defend this bill, if we prevent people from eating fast food until they’re 30 we can keep them from getting hooked when they are younger and more vulnerable.

The problem with straying away from true and correct governing principles (such as those outlined in the U.S. Constitution and the Bill of Rights), is that we lose the protections from tyranny that those principles provide. When we empower politicians and government officials to arbitrarily decide what freedoms the people can enjoy, we open up the possibility that our fundamental rights will be violated.

In Utah, smokers are a distinct minority. A 2010 Gallup study concluded that Utah has the lowest rate of smokers in the nation, sitting at a mere 13%.[6] It is no wonder then that our politicians have little to no fear in targeting this population, particularly in a state that is known for its religious opposition to tobacco. The majority of Utah voters will likely agree with the law, because they are non-smokers and they want their kids to be non-smokers. Additionally, they may have personal religious opposition to smoking and they feel it is consistent with their beliefs to support such a law.

However, it is important that we examine the issues and stand up for what is right, regardless of how we feel personally. It is not the government’s role to impose the majority’s will upon the minority. Our founders gave us a Constitutional Republic with checks and balances for that very reason. The LDS faith, (which As of 2000 (unfortunately at the time of this writing the US Census was offline, attributed to the government shutdown, so the latest reputable data I could find was from 2000) was approximately 57% of the population, compared to 17% Non-religious, 6% Catholic)[7], teaches that men and women were given free agency by God. The LDS guide to the Scriptures defines agency as, “The ability and privilege God gives people to choose and to act for themselves.” It is fully consistent then, with LDS teaching, that individuals be given free agency to choose for themselves if they would like to smoke cigarettes or not. It is not up to the power of the state to dictate to them.[8]

Unless we begin to diagnose the growth of government and protest its expansion, even when we are not directly the target, we will continue to reap a ballooning state that gets harder and harder to contain. It is easy for government to grow, but difficult for government to shrink. The Founders decided to err on the side of caution/anarchy when implementing the Articles of Confederation because they knew that if they gave the government too much power to start, it would be difficult or impossible to try again without another revolution.[9] Let us reign in our government now while we still can.


[1] Richards, Mary. "Utah House bill seeks to save lives by raising legal smoking age |" Utah News, Sports, Weather and Classifieds | (accessed October 3, 2013).

[2] Fermino, Jennifer. "Bloomberg fighting to the last drop for his New York City soda ban - NY Daily News." Daily News America - Breaking national news, video, and photos - Homepage - NY Daily News. (accessed October 3, 2013).

[3] "Prohibition Fast Facts -" Home. (accessed October 3, 2013).

[4] Branson, Richard. "War on drugs a trillion-dollar failure -" - Breaking News, U.S., World, Weather, Entertainment & Video News. (accessed October 3, 2013).

[5] Greviskes, Amber. "Fast Food As Addictive As Heroin, Study Confirms - That's Fit." Healthy Lifestyle Advice, News and Community - HuffPost Healthy Living. (accessed October 3, 2013).

[6] LiveScience Staff. " Smoking Rates Linked to Education and Cigarette Taxes | LiveScience ." Science News รข€“ Science Articles and Current Events | LiveScience . (accessed October 3, 2013).

[7] "Utah Religious Statistics." Utah Religious Demography. (accessed October 3, 2013).

[8] LDS Church. "Agency." The Church of Jesus Christ of Latter-day Saints. (accessed October 3, 2013).

[9] Kelly, Martin. "Why did the Articles of Confederation Fail - Articles of Confederation." American History From About. (accessed October 3, 2013).

Sunday, January 6, 2013

Should we legalize Pot: Washington and Colorado have legalized Marijuana, should the United States?

By Ben Porter

Author background statement: I do not use marijuana, nor would I choose to if legalized. I do not use alcohol or tobacco either. I believe that a life without drugs is much more fulfilling. As a recovering alcoholic (clean and sober now for 5 years), I believe that substance abuse is extremely damaging to one's body, both mentally and physically, and should be avoided entirely. However, this is a deeply personal choice that we all must make.

Earlier today I was reading a news article about a 19-year old mom who drove away with her 5-week old baby sitting in his car seat on the top of her car. The story concludes by saying that the baby is ok (now in custody of Child Protective Services), and that the determining factor of the mom's inexcusable negligence was marijuana. Not only was she high, but she smoked it in her car, with the baby. I encourage you to read the original story for all of the information.

This implies a significant debate. Should we legalize marijuana? Won't we see more of this clearly harmful behavior from society if we legalize the drug?

Like most issues, there is no clear answer. However, let me chime in the voice of freedom (according to me of course) and offer forth some opinions.

Where are we today?

There are now two states in the U.S. that have legalized personal, recreational use of marijuana: Colorado and Washington. Several more states are likely to examine this issue as well in the coming years. While marijuana is now legal in those states, it is still technically illegal at the federal level, which has led some to speculate at whether or not the feds will allow the states to legalize the drug. Now, Mexico is considering legalizing marijuana after decades of a bloody war on drugs.

Is this a good thing then? Should we legalize pot?

I think there are some serious issues that should be debated, and it is great that we are having this discussion. My hope is that this leads to an expansion of State's rights. I am inclined to support the legalization (or more accurately, decriminalization) and regulation of marijuana, with the same laws and regulations that pertain to alcohol. Age restrictions, DUIs, etc. should be enforced on marijuana just as they are on alcohol. Legal, consenting adults should not be told what they can and cannot ingest into their own bodies. Mine is the philosophy of Thomas Jefferson: "If it neither picks my pocket nor breaks my leg, what difference is it to me."

That being said, the issue for me (at the local level) is not decided. It could be argued that legalized weed (and alcohol for that matter), do break my leg. For example, if I am hit by an intoxicated driver, I am clearly affected personally and my rights have been violated (and therefore my leg has been broken, metaphorically speaking, however I could see how this particular example would be a literal example). If an intoxicated driver causes damage to my property or to public property, then it has picked my pocket. However, it is already illegal to drive under the influence. The legalization that I would support would still cover those situations from a legal perspective (provided the user is following the law).

What about the medical costs to society?

This is another good point that is often made by opponents of legalized weed. Under the current structure, this is a valid argument that I agree with. My problem with this however is the premise. We as a society should not be bearing the costs of others medical bills. I acknowledge that changing this is much easier said than done, but we should work toward it. In his book, "The Revolution: A Manifesto", Dr. Ron Paul points out that in the '60s (during which he was practicing medicine as a licensed physician), insurance was only carried for unusual and exceptionally expensive circumstances, not for routine treatment. In other words, medical insurance was treated just like auto insurance, fire insurance, etc. People paid cash for medical services, and the services were affordable and plentiful (a natural result of the free market). Under this system the U.S. became the greatest medical power house in the world. For those who couldn't afford care, most doctors provided steep discounts, sometimes even free treatment. As Dr. Paul points out, most doctors viewed it as a moral obligation to provide help for the poor, and often volunteered their time for those in need.

When the government got involved, this all changed for the worse. This topic could easily take up an entire post in and of itself (and indeed it occupies nearly a whole chapter in Dr. Paul's book), so I won't elaborate more on this point. However the takeaway is that government (and therefore we the people) should not be involved in paying for other's medical treatment. I am planning on hosting a detailed discussion on this topic on a forthcoming episode of Freedom Review Radio.

Do you want legalized weed in your State/City/Community?

No! But that is the beauty behind our Founder's framework. That issue is supposed to be left to the states and local governments to decide, not to the federal government. Therefore, if I want to live in a community where weed is illegal, I can move to one and/or vote my preference. If you want to live in a community where weed is legal (same with gay marriage, gambling, prostitution, etc.), you can move to one! I support Colorado and Washington's decisions to legalize weed, if that is what the people want. I don't want them telling me I can't have guns or that I must have weed legal in my community, so I won't tell them that they can't have weed. "If it neither picks my pocket nor breaks my leg, what difference is it to me."

Don't you think that we as a society will deteriorate?

Yes I do, but that is a cultural and religious issue (and local government issue), not a federal issue. It is not our place to force our beliefs on others. If we care strongly about legalized drugs, we can enforce those common and majority beliefs at the local level, but it is unconstitutional to do it at the federal level. I even believe that the state level is too high, especially because rural areas are managed by state law the same as urban areas, and that rarely makes sense because the two are so vastly different.

Won't this lead to harder drugs, like Cocaine? Following your logic, should we allow Heroin and Crystal Meth also?

It might lead some people to harder drugs, though this issue is very much up for debate. I have yet to see compelling evidence that shows that someone not predisposed to harder drugs would be led to them through marijuana where they otherwise wouldn't be. It is true that many of them start with Marijuana, but it is also true that many of them start with tobacco and alcohol as well, and we aren't talking about outlawing those.

As for other clearly damaging drugs like Heroin and Crystal Meth, yes they fall under this as well. It would be devastating to a community to legalize these, but the feds have no business telling communities what to do. If the residents want these, and they follow the laws (same as alcohol, can't give it to minors and can't drive under it's influence, etc.), it is their right to be stupid.

Conclusion and clarification

As I mentioned before, this is a hard issue. My strongest point here, is that this issue does not belong at the federal level. This is a state and local community issue, and that is where it should be debated. I don't want my home state legalizing weed, but that is my state's choice. If Colorado and Washington want it legal, that is their right. I'd love to know through comments how you feel about this issue.

Note: Comments will be screened for appropriateness and constructiveness. Respectful dissent is allowed and encouraged, though insult and disparagement is not.

Direct Link: Should we legalize Pot: Washington and Colorado have legalized Marijuana, should the United States?

Monday, December 31, 2012

Freedom Review Radio Now Available

The Freedom Review Radio Podcast is now available!

If you would like to listen to the mp3s directly in your browser, you can click on the episode links under "Freedom Review Radio Quick Listen." If you would like to download the show mp3s directly, you can right click the links under "Freedom Review Radio Quick Listen" and select either "Save Link As..." or "Save Target As...."

The subscription option will work either with iTunes or another podcast player (such as Beyond Pod for Android), or any RSS feed reader such as Google Reader. You can find several different options by going to the podcast feed page.

If you are having problems, please email and I'll try to help you out.

Please let me know what you think about the show! I'm always open to constructive criticism, and I'd love to hear if you like the show (

Saturday, December 15, 2012

Who Is William Binney and Why Do We Care That He Says The NSA is spying on American Citizens?

By Ben Porter

William Binney is a former NSA big-wig who is blowing the whistle on the NSA for allegedly spying on its own countrymen. Binney was a “Senior Technical Director” who “was considered one of the foremost mathematicians and code breakers in the business.” Binney is revealing that there is rampant and widespread virtual surveillance on nearly all US citizens, of the type previously reserved only for national security threats and military enemies. You can read more about Binney’s revelation in an interview he gave to RT, or on The Blaze.

According to William Binney, “the government is collecting information on everyone, not just national security risks and suspected national security risks. Then, if you become a target ‘for whatever reason,’ he explained, ‘the government can go in– or the FBI, or other agencies of the government– they can go into their database, pull all that data collected.’” As was pointed out on The Blaze, “with hundreds of thousands of pages of regulations these days, you are doing something wrong.”

We cannot be a free people when our government is collecting and using information on us. Most people inherently agree that the government should not have unrestricted access to their personal information and activities. In fact, this was a big deal to our Founder’s who understood first hand what it was like to have a big government intrusively interfering in their lives. However, I am increasingly hearing from people that say they have nothing to hide, and therefore they don’t care if the government is watching or spying on them. I would like to address this response.

There is an insidious and irresponsible attitude that has been gaining ground among US citizens. The attitude I am referring to is that when it comes to Government intrusion, many people have the attitude that, “I’m not doing anything wrong, and I have nothing to hide, so I don’t care.” Primarily we see this attitude among Conservatives, but no political group is immune to this kind of thinking, particularly when the government is being run by their party.

It is the opinion of the author that this attitude is cancerous, and fundamentally un-American. The biggest problem is that while we may not feel we’re doing anything wrong, we don’t get to define what is right and wrong. That privilege is left entirely to the government. This reminds me of George Orwell’s excellent book, “1984.” If you’ve never read this book, please read it. In the book, the government is continually aware of and monitoring citizens activities. The slightest move out of step with the ruling party lands one in “re-education.” Certainly no one is making the argument that we are at that point yet, but this is clearly a first step. Big Brother cannot enforce his will if he is not aware of what his subjects are doing, and these actions by the NSA are allowing Big Brother (i.e. the Government) to be aware of everything that is going on.

As a point to this phenomenon, I would like to reference George W. Bush and the PATRIOT Act. For those who don’t know, the PATRIOT Act granted the government expanded powers to wiretap individuals without requiring the government to obtain a warrant, search through business records, and conduct surveillance of so-called “lone wolf” terrorists (individuals not linked to terrorist groups). The act also extended the meaning of terrorism to include domestic terrorism, thus allowing law enforcement to use the expanded powers inside the United States and against US citizens. For more information, the Wikipedia page for the PATRIOT Act is pretty good:

There were many Republicans/Conservatives that were fully supportive of the PATRIOT act under George W. Bush because they had the attitude that they had nothing to hide, and they wanted the government to have the tools necessary to identify and stop domestic terrorists. They trusted Bush and the government not to use these powers for any reason other than stopping terrorists. Now however, many of them are unhappy at the way Barack Obama is using the act, but they have no power to stop him since the law already exists.

On the other side of the aisle, many Liberals/Democrats were opponents of the PATRIOT Act because they didn’t trust Bush. However, once “their guy” took power (Barack Obama), suddenly their opposition stopped. Clearly their cries of opposition in the name of freedom were disingenuous, as it applied only when their political opponents were in power.

This is a dangerous disease for Americans to have. We should not be so trusting with our government, no matter who is running it! Power corrupts, and altruistic roots can give way under the pressure of power. There is potential and likelihood that increased powers will be abused. Even if one fully trusts the current president, in America you are guaranteed that there will be a new President at some point who you may not trust! The idea of “sun setting” legislation is fundamentally flawed as well. The PATRIOT Act was set to expire, but Obama easily extended it with the stroke of an Autopen. We can’t allow these freedom infringing and unconstitutional actions to be tolerated!

What we need to do is start demanding answers and accountability, and a return to the Constitution. We need to stop sacrificing our liberty in exchange for security, and start expecting our leadership to do the same.

Direct Link: Who Is William Binney and Why Do We Care That He Says The NSA is spying on American Citizens?

Monday, November 26, 2012

Communism in America? We're on the Road - Hear it From Marx Himself

By Ben Porter

For the aural oriented viewer (those who prefer to listen rather than read), an audio recording of this article is available on Youtube here, It is also embedded at the end of the article.

Earlier today I was reading an article in Pravda by Xavier Lerma entitled "Obama's Soviet Mistake." For anyone who doesn't know, Pravda is a publication that was formed by Russian Revolutionaries just before World War I. It became the official Communist publication of the Soviet Union. I'm not sure what they do these days, but the article was fascinating and certainly not something you would expect from such a publication.

In the article, Xavier makes some very strong statements about Barack Obama, including "He is a Communist without question promoting the Communist Manifesto without calling it so.... His cult of personality mesmerizes those who cannot go beyond their ignorance. They will continue to follow him like those fools who still praise Lenin and Stalin in Russia. Obama's fools and Stalin's fools share the same drink of illusion."

If what Xavier is saying is true, then those of us who care about freedom have some work to do. Not many forms of government are so diametrically incompatible with freedom as Communism is, and if there is evidence that we are headed down the road of Communism, we must understand this and work to prevent it.

Communism in a theoretical, idealistic, and imaginary world may sound superior to all other systems (and the author thinks that it does), but it simply cannot and does not work when administered by imperfect and corruptible human beings. For this reason, many of the most brutal, oppressive, and controlling regimes in the World have been Communists.

The idea behind Communism, that is to eliminate social classes so everyone in society is equal, is not prima facie a bad idea. However, it typically results in the ascension of select individuals into a new ruling class, which becomes corrupted with power. In many cases, in order to maintain power, the ruling class must oppress the population, sometimes to the extent of torture and mass murder. Additionally, the government involvement, control, and oversight that is required to enforce Communism crushes individual incentive to work hard and achieve. This is why Communism is simply incompatible with freedom.

Is Barack Obama really a Communist? Is America becoming a Communist country?

It is important that we answer these questions and examine the truth, as very few topics are more important to freedom than Communism. To answer these questions, I recently read the Communist Manifesto, written by Karl Marx and Frederick Engels. I was quite surprised at what I found, as it was very eye-opening. I encourage everyone to read the manifesto for themselves because what we are covering here is only a drop in the bucket.

I would like to draw the reader's attention to the following segment of the Communist Manifesto. Note here, that Marx and Engels are describing the process that a capitalist country (like the United States) would have to go through in order to overthrow Capitalism and install Communism in its place. There are ten steps outlined below, many of which we have already undertaken. I have copied here verbatim from the Communist Manifesto.

We have seen above, that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy.
The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.
Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production.
These measures will, of course, be different in different countries.
Nevertheless, in most advanced countries, the following will be pretty generally applicable.

1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.
6. Centralisation of the means of communication and transport in the hands of the State.
7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the 27 Chapter II: Proletarians and Communists populace over the country.
10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.

I realize that this article is getting long, so we will only cover a few very obvious points, and future articles will go more in depth. We will see how right Xavier Lerma is, and if you're anything like me, you will not be happy after reading this:

1. Abolition of property in land and application of all rents of land to public purposes.

Surely Obama has never advocated for this right? Well, as of 2010 the Federal government owns a ton of land in the country. Over 1/4 of the country is owned by the federal government. There are many states such as Nevada (81.1% of Nevada is owned by the Federal Government), that are mostly Federal land. Why does the Federal government need so much land? This is a topic I would like to get deeper into at a later date.

2. A heavy progressive or graduated income tax.

Anyone who had ears during the campaign of 2012 must have heard Obama's message of "taxing the rich" and making "the rich pay their fair share." It is easy to stir up class warfare with statements like this, but something I never noticed before was how fundamental this is for Communism to function. The idea is that by confiscating the wealth and redistributing it as the government sees fit, all social class will be dissolved. Well, isn't this exactly what our tax structure is doing? The government is confiscating wealth through taxes, and spending it on programs of their choosing.

It is no secret that we have a heavily progressive income tax, and that Obama wants to make it even heavier by continuing the Bush tax cuts on the middle class but expiring them on the upper income earners. I do not want to go into a detailed breakdown of tax rates here because that would take all day, but think about all the kickbacks that essentially zero out the income taxes paid by most families, such as mortgage deductions, child tax credits, "making work pay" and more. Now, I enjoy those breaks myself being quite far from the level of "rich," but I will be enjoying them much less now that I see this correlation.

Prior to reading this I was supportive of a progressive tax, because it does seem intuitively more fair. However, I am currently reconsidering my position on this as I think about the implications and the slippery slope effect. Once the majority of people are not paying, what is it for them to raise taxes on those who are paying? I am fascinated at some of the ideas proposed in the Fair Tax and the Flat Tax (which are different). We won't cover those ideas here, but if you're interested I recommend reading about them.

3. Abolition of all rights of inheritance.

When I read this one, my mind starting screaming "Estate Tax!"

According to CNN Money, Obama "Would reinstate the estate tax at 2009 levels -- meaning estates worth more than $3.5 million would be subject to the tax and face a top rate of 45%." This means that if Obama gets what he wants, when someone with more than $3.5 million in their estate dies (keep in mind that this isn't just the super rich here, this can hit people with valuable family property and retirement funds), the government will confiscate approximately half of their belongings, for no other reason than their death! Obama's position on this is clear, and it is obvious that he is indeed inline with the Communist Manifesto.

4. Confiscation of the property of all emigrants and rebels.

As far as I know Obama has never proposed anything like this. Please point me in the right direction via comment below if you have any information about this one.

5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.

Two things immediately jumped into my head when I read this one: Student loans, and Fannie Mae/Freddie Mac.

After taking office in 2008, Obama made two major changes to the student loan program. Firstly, he nationalized the student loan program, such that the only place to get a student loan is now the federal government! For many low income people, this now means that they must comply with government requirements or else they will not be able to attend college. For now there are no restrictions on what can be studied and what qualifies (as far as I know), but what happens when the government needs to stimulate a certain industry by providing more graduates in that field (such as doctors now that Obamacare is chasing many of them into retirement)? Secondly, he offered a forgiveness program for people making long-term payments on their student loans.

As for Fannie Mae and Freddie Mac, the amount of government involvement in the mortgage business is staggering. According to the NY Times, Fannie Mae alone backs over 40% of US mortgages. On top of that you have Freddie Mac and Ginnie Mae that are government backed, that also buy mortgages. Also, the percentage of government-backed mortgages is increasing quickly.

The point here is that the government is clearly involved in mortgages and student loans, and government involvement is expanding under Obama. Mortgages and student loans make up the bulk of credit an average person will receive during their lifetime, so the fact that the government is becoming the only source should give us all pause, particularly in light of the fact that it is on the Communist Manifesto list of things to do to convert a country to Communism.

6. Centralisation of the means of communication and transport in the hands of the State.

Public transportation has been proliferating in most cities nationwide, though it has been heavily subsidized because it is very difficult to make a profit. The reasons for this are many, but a large part of the problem is that people don't like public transportation so they avoid it when they can. In addition to public transportation, the automotive and transportation industries are heavily regulated. Obama has been highly supportive of increased mass transit projects, even funneling a lot of his stimulus money into them. This is yet another category in which Obama is clearly inline with the Manifesto, and the country is headed in the wrong direction.

7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.

This is another area that does not have a strong amount of evidence, although Obama's takeover of General Motors after the bailout certainly seems to qualify. The GM deal was wildly unprecedented in many ways such as having a government official fire a private sector CEO, having the government take stock in the company and redistribute it according to their wishes instead of fairly to the current stake holders, etc.

8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.

I haven't heard Obama (or anyone else in either party) talk about industrial armies, but we have certainly heard from Michelle Obama that "Barack Obama will require you to work." Michelle made this seemingly bizarre statement at a campaign event in 2008. Funny thing, after this Michelle was not put in the spotlight a whole lot. At any rate, a statement like this is very inline with the Communist Manifesto, and very unusual for an American politician.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the 27 Chapter II: Proletarians and Communists populace over the country.

This one is a bit more difficult to place, although George Soros has been buying up lots of farmland. I'm not sure if this is linked to Obama or not, but it is interesting.

10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c.

This one shouldn't require a lot of explanation. It is very clear that we have followed this completely, and that Obama supports this.

So is Xavier right?

After examining his position on these ten items, it is clear that Obama supports at least 70%, possibly more. I think it is important to point out though that although Obama is the current president, many of these are policies that both Democrats and Republicans have been supporting for decades and even centuries! Obama (as has been shown) is more Marxist than typical American politicians (and in fact in his book "Dreams from my Father" he describes many of his influences and sympathies as distinctly Marxist), although he cannot be single-handedly given credit for pushing America towards Communism.

In closing, I would like to clarify my position (and thus the position of the Freedom Review) on the issues addressed here. I am not necessarily advocating a discontinuation of policies that mirror these 10 points from the Communist Manifesto. I am however, advocating that we take a closer look at how we can structure our government and society to fulfill our needs without government intervention (as much as is possible), and according to our Constitution. Freedom cannot exist where an intrusive and overreaching government restricts the rights of citizens (within reason of course). Therefore, it is important that we critically consider policies that were laid out as stepping stones toward Communism, and decide if they really do make sense for our country. These are complex issues, but the time to start considering them is now.

Here is the audio recording of Communism in America? We're on the Road - Hear it from Marx Himself:

Direct Link: Communism in America? We're on the Road - Hear it from Marx Himself

Sunday, November 11, 2012

National Debt Near 100% GDP? This Issue Explained

By Ben Porter

We hear frequently that the national debt is exceeding GDP, but what does that mean? What the heck is GDP and why do we care that it is being overtaken by the national debt? Let's start at the beginning:

What is GDP?

"The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy." (Investopedia)

In other words, if you took the value of all the goods and services produced in America (all the work done by people) and added it up you'd get to GDP.

So what does it mean then if the National Debt exceeds GDP?

It means that we as a country owe more money than we can produce in an entire year. If you confiscated every single dollar, you could not even pay off the debt. Any reasonable person can see that simply "taxing the rich" and making them pay "their fair share" is NOT going to fix this problem. There is only one way to fix it: Start being fiscally responsible. This includes reducing spending to amounts that do not exceed the revenue brought in through taxes.

The principles of sound fiscal management scale very well from the household level to the national level. In your own household, you can only borrow so much before you run out of money. We all know that taking out the credit card and racking it up with debt is a bad idea for a household. It takes a balanced budget, hard work, and sacrifice to dig a family out of a hole of debt. The Federal government is no different when it comes to paying off debt. At some point we will not just have to balance the budget (meaning we use our income to pay for all of our expenses, instead of borrowing money to pay for them), we will have to run surpluses (meaning we have extra income left over after paying the expenses, and this extra money goes to paying down the debt). If we can't even balance the budget now, how are we going to pay it down?

The facts:

George Bush racked up obscene amounts of debt for us. Barack Obama was right to call this "unpatriotic." However, once inaugurated, Barack Obama racked up debt even faster than George Bush, at a pace completely unprecedented in our country's 236-year history.

What makes the debt carried by the federal government even more dangerous though, is their ability to print money. They can and are printing money to pay off the debt. How does that work? Well, each dollar they print lowers the overall value of every other dollar already in existence.

Think of it this way: If magic money fairies came and instantly doubled the value of your bank account, you'd have twice as much money. You could go out and spend your money on goods and services, and you'd get essentially double the value compared to what you would have gotten without the fairies. Now, imagine that the fairies doubled everyone's money. At first, you and everyone else would go out and buy everything you wanted, receiving approximately double the value that you would have. Quickly, all the stores would run out of stock and there'd be no goods available for purchase.

Once the stores realized what was going on, they would double their prices so that everything would be back to normal. In economics, this would be supply equaling demand (an explanation of supply v. demand is forthcoming in another article).

The net effect of this is that while everyone has twice as much money, but goods are twice as expensive. So, each dollar has only half the spending power that it did before the fairies showed up. Now, money fairies don't exist in the form we all wish they did, but they do exist when you have the power to print money. This is something the Federal Government can do, through an entity called the Federal Reserve Bank, or the Fed for short.

The Fed can and does print money as part of its monetary policy. As part of their approach to dealing with our massive and out-of-control debt, the Fed has been printing money under a program called "quantitative easing." This means that every dollar of debt will cost the government less to pay off, because each dollar is worth less. Using this strategy, the government has an easier time paying down debt.

But what else happens? You can't get something for nothing right?

Yes, that's correct. The effect of this is the same for you as it would be if the money fairies doubled everyone's money except yours. Inflation rises because of the money printing, and every person who holds US dollars feels the effect of this "hidden tax" when their money becomes worth less, or has less buying power. It is the opinion of the author that this is one of the most evil taxes that can be levied on a people by its government. It is practically invisible and very hard to detect, and it hits the poor harder than any other tax because there is nothing the average person can do to avoid it. The rich can shift their investments into assets that hold value through inflation, but the poor and middle class cannot usually do that. Also, wages never keep up with inflation, and most of the 99% rely on wages for their income.

So paying down debt is hard. Why don't we just procrastinate paying it off?

Quite a tempting thought, but not a good idea. Again, think about a personal household. Your debt continues to increase, even though you aren't adding to it, because interest accumulates and raises the balance. So not paying down the debt adds to the debt with no action required. So the short answer is that it wastes even more money when it isn't paid off! Each day that we carry forward our debt we are throwing away money, and it is the US citizen who suffers, as has been previously shown.

We must demand fiscal responsibility.

Regardless of party affiliation, politicians are loud and proud in claiming their allegiance to fiscal responsibility. Once they have power however, they do nothing to address the problem. Why? Because it is politically unpopular in practice, despite its popularity in rhetorical form. It is unpopular because there are really only two ways to address the debt. you must either raise taxes (obviously not popular, who wants higher taxes?), or cut spending (also not popular).

Cut spending to what?

You would be shocked to know how much the federal government pays for. Cutting spending will hurt someone with voting rights, and this is why no politician wants to do it. Unfortunately, this self-serving and unpatriotic unwillingness to cut spending is destroying our country by watering down our wealth. To put it into perspective, our debt is about 16 trillion dollars. 16 trillion is a high enough number that most people can't visualize it. Think of it this way. If you took every person in the country and demanded they pay just their portion of the debt (divided as equal shares among everyone), every person would have to pay approximately $53,333. Do you have that much money laying around to hand to the government? I sure don't! This is real money! We, as a country, owe more than 53 thousand dollars per person.

What if we can't pay it off?

Well, our debt holders will take their money from somewhere, whether it is inflating our currency (the fed printing money) or taking our assets (such as our land). Also, we may not be able to borrow money in the future, which means that in times of recession when we need a little help, it won't be there. Again, think of a family household. How does the inability to get a loan affect you?

What can we do?

We need to support politicians who are serious about cutting the debt. When we get closer to an election, we will take a look at politicians and their records for cutting spending and reducing debt. We can't take them at their words anymore, we must examine their actual records.

In the mean time, start spreading the word! You would not believe how many people are clueless about our National debt. We have got to make this common knowledge so that people can vote as informed citizens. Until this happens, we'll continue to get more of the same.

Direct link: National Debt Near 100% GDP? This Issue Explained