Dollars, Deficits and Gold

“President Obama is in Asia,” I told the class.

“Yes, and he bowed to the Japanese emperor,” said a boy.

“What’s wrong with that?”

“Americans don’t like to see their leader bow to others,” said the boy. “It’s like saying they’re better they we are.”

“He was just being polite,” said a girl. “Nothing wrong with that.”

“Okay,” I said. “Chinese leaders asked how he was going to pay for his health care reform bill, which may cost another trillion dollars. Why would Chinese leaders care about that?”

“Because China lends us money, right?” said another boy.

“Yes. Japan too. Why is that?”

“Because we don’t have enough?”

“That’s right,” I said, pulling down the screen and projecting an image onto it. “This chart goes back to 1980 and it shows how our federal government is paying, or not paying, for what it does.” I explained how we get a deficit when government spends more than it gets in taxes and showed them how the deficit increased during the Reagan and first Bush presidencies and declined during the Clinton years. Then I pointed to the surplus in the late Clinton years and the second Bush’s early years before sliding back into deficit after the September 11th attacks in 2001 and our invasions of Afghanistan and Iraq.

“Notice that during George Bush’s last year the deficit was a record at almost $500 billion?” I said, pointing on the screen. “Now look at President Obama’s first year,” I said. He’s more than tripled the deficit to $2 trillion.”

“Wow,” said three students.

“What can Obama and the Congress do to reduce the deficit?” I asked. “There are at least three ways.”

“Higher taxes,” said a boy.

“Right,” I said. “That’s one way, and Obama is asking Congress to raise taxes, but not nearly enough to reduce the deficit. Why not?

“Because that would make people mad,” said the boy.

“Right, and congressmen might get voted out. What else can they do?”

“Don’t spend as much,” said a girl.

“Right again,” I said, “but Obama and the Congress are spending more and the health care reform bill they’re trying to pass will cost another trillion dollars. What else can they do?”
 No hands.

“They could print money. The Constitution gives Congress power to do that and they are,” I said. “Good idea, huh?”

“Yeah,” said a boy.

“Won’t that make our money not worth as much?” asked a girl with a worried look.

“Yes,” I said. Other students looked puzzled.

“Why is that?” asked one.

“Because then there are more dollars out in circulation while the number of things to buy stays the same. Each new dollar and the ones already out there are worth less. Prices go up. It’s called inflation.”

I waited while that sunk in. Then I took a dollar and a blank check from my wallet and held them up. “Notice they’re about the same size and both are made of paper?”

They nodded.

“Let’s say you were selling a house for $200,000 and I wanted to buy it, okay?
More nods.


“If I made out this check for $200,000 and signed it, would you take it in trade for your house?”

“That depends on whether you have $200,000 in your account,” said another girl.

“I claim that by writing the check. It comes down to how much you trust me.”

“I don’t know,” she said.

Then I held up the dollar. “This is like a check from the United States of America. Do you trust the United States government?”

“Yes.

“Would you take 200,000 of these?”


“Yes.”

“China is nervous about the US dollar,” I said. Then I took a quarter out of my pocket and held it up. “This used to be made of silver but now it’s copper because this much silver is worth more than 25 cents. Ever see an old movie where someone bites a coin?”

Many had.

“Why?”

“Because silver is soft and they wanted to see if it was real,” said a boy.

“Right. They trusted the metal, not the country. This has little ridges around the outside edge because people would sometimes shave some off. With ridges, you know it’s all there.”

“The price of gold has doubled in three years to over $1100 an ounce because people are trusting metal more than dollars again. Two weeks ago India bought 200 tons of it. China is worried about the billions it already lent us. That’s why they’re asking Obama about where he’s going to get the money to pay for his health care reform bill. They’re afraid he’s going to print more dollars.”

Question Reality?

“I wasn’t talking.”

“Hmm. Your lips were moving. Sound was coming out. The person you were facing was looking at you and nodding, but you weren’t talking?”

“No.”

“So, I should believe you, and not my own eyes and ears?”

“Whatever.”

That word is telling. It’s what we’re left with when we deny objective reality. Anyone can talk in my class, but only one at a time and only on the subject. Using the Socratic method, that’s how it has to be. I gave him a consequence and moved on, but I was troubled by his nonchalant denial of the obvious because I’m seeing it around me more and more. Either the world is getting crazy or I am. Once I saw a bumper sticker saying “Question Reality” and I laughed, but I don't think it's funny anymore.

Objective reality hard to perceive exactly sometimes, but we have to believe it exists or we can’t function. It can be fun to question it and consider that everything is relative during late-night bull sessions, but if we pretend objective reality doesn’t exist, we’ll suffer painful consequences. General Custer discovered this when he ignored reports that thousands of warriors could be just over the hill. “Whatever,” he thought, and ordered an attack. Denial of objective reality is most dangerous during wartime and that’s exactly what our president, his party, and the mainstream media are doing by denying the obvious: that the Fort Hood massacre was an act of Radical Muslim terrorism. After September 11th and all that’s happened since, it astonishes me to see Americans are nodding at their ludicrous claims that Major Hasan was really suffering from vicarious PTSD while shouting “Allahu Akbar!” as he mowed down our soldiers. That he contacted al Qaeda twenty times and asked what he could do to further the jihad and told fellow doctors: “Infidels should have their throats cut,” and “non-believers should be beheaded and have boiling oil poured down their throats” is not evidence of Islamofascism, but symptomatic of second-hand stress from counseling returning soldiers.

Whatever.

In education, I’m accustomed to the constant drone of “multiculturalism” and “diversity,” but in our military too? According to Army Lt. Colonel Ralph Peters, “A dirty big secret in our Army has been that officers' promotion boards have quotas for minorities. We don't call them quotas, of course. But if a board doesn't hit the floor numbers, its results are held up until the list has been corrected. It's almost impossible for the Army's politically correct promotion system to pass over a Muslim physician. Sen. Joe Lieberman . . . needs to call the officers who sat on Hasan's promotion board before the Senate, put them under oath, then ask if Hasan made major because of minority-quota requirements.”

According to Obama’s Army Chief of Staff General Casey, however: “[A]s horrific as this tragedy was, if our diversity becomes a casualty, I think that’s worse.”

Incredible.

We are most definitely at war, but it’s not like World Wars I & II. It’s not like Korea or Vietnam either. It’s unique. According to some analysts, we’ve been at it since Iran took over our embassy in 1979. That was the first offensive action by Radical Muslims against us, and there have been many since. We were broken out of our denial by the September 11th attacks, but we’re crawling right back into it by pretending our enemies are nothing but common criminals to be handled in the court system. Khalid Sheik Muhammad and the other defendants who planned and carried out September 11th have already admitted their culpability and asked to be executed, but President Obama insists they be tried in a New York City courtroom instead of being lined up and shot as many of us would wish.

President Clinton treated the 1993 World Trade Center attack, killing six, as a criminal matter instead of an act of war and that was a big mistake. It was attacked again in 2001, killing 3000. In the interim, there were attacks on our embassies in Africa, killing twelve, on American soldiers in Saudi Arabia, killing nineteen, and on the USS Cole in 2000, killing nineteen. Rather than learn from Clinton’s blunders, though, Obama is repeating them.

Radical Islam resurrected itself with the establishment of the Muslim Brotherhood in 1928 and it’s goal has been to reunite Islam with government. There had been a separation of church and state (or church and mosque) in the countries of the Muslim world after years of European influence in the region and the Muslim Brotherhood would reunite the two. By 1979, Iran had declared itself an Islamic Republic and started attacking the west immediately, especially the United States. Osama Bin Laden declared war on us in 1996. Then Iran did in 2006. Both have attacked and killed Americans by the hundreds in the case of Iran and in the thousands in the case of Bin Laden.

Bush called it the “War on Terror.” That’s a misnomer because terror is a tactic, not an entity, but Bush was reticent about calling our enemy by its name: Radical Islam. That was bad enough, but the linguistic contortions the Obama government is willing to make are astounding. It dropped “War on Terror” in favor of “Overseas Contingency Operations,” whatever the hell that means, and his Secretary of Homeland Security, Janet Napolitano, now calls attacks of Islamic terrorism like September 11th “Man-caused Disasters.”

Whatever.

After President Obama suspends our “Overseas Contingency Operations” as he seems about to do, the next “Man-caused disaster” we experience at the hands of these “criminals” could produce not only political and economic fall-out, but also the radioactive variety.

We're in Trouble

“Is it possible for a human being to become perfect?” I asked the class. Most students agreed it wasn’t. Some believed we could strive for perfection and that’s a good thing, but each of us would always fall short.

“How about creating a perfect society?” I asked.

“How can you create a perfect society with imperfect people?” said a particularly sharp girl with the perfect rhetorical question.

I was setting them up for lesson on utopian communes in America - efforts to establish perfect societies - and ultimately how the struggle between communism and capitalism dominated the 20th century.

We looked at 19th century communes like the Shakers and the Oneida Community. Both were religious, members of both gave all their property to the commune, both controlled all aspects of members’ lives, but they had opposite views of human sexuality. The Shakers eschewed sex but the Oneida commune spread it around as much as possible in a method they called “complex marriage.” Both thrived economically, supplying members with whatever goods and services they needed and both lasted longer than most attempted utopias. Neither achieved perfection, but they were around for a fairly long time working at it.

Though voluntary, 19th century American communes attracted fanatics who knew what was best for us all, and who were willing to impose it violently. It can’t be just coincidence that two presidential assassins were, at least temporarily, members of the Oneida Community. They were Charles Guiteau who killed President Garfield, and Leon Czolgosz, who killed President McKinley. Czolgosz especially seemed to personify the utopians’ metamorphosis from from religious to secular/socialist, then to athiest/communist as he embraced leftist anarchists and communists. People like him had no qualms about violently imposing their utopian fantasies on Russia beginning in 1918.

They transformed Russia into the USSR, then extended their influence over all of northern Asia and half of Europe. Promising to redistribute wealth, they appropriated private property whether owners were willing to part with it or not. They took control of the entire economy and every aspect of people’s lives, but seemed by all acounts to move further away from perfection rather than closer to it. The USSR couldn’t provide the consumer goods citizens needed. Its planned economy caused its demise.

Communist utopians tolerated no dissent. Somewhere between forty and sixty million people, most of whom were skeptical about communist dreams of establishing a workers’ paradise, were killed - far more than the number who died at the hands of Hitler’s Nazis.

Even without reproducing, the Shakers outlasted the USSR, which finally disintegrated twenty years ago. There are still a handful of Shakers in New Gloucester, Maine a few miles east of where I’m writing. As for the Oneidas - their utopian community is gone but they exist as a joint stock company making cutlery.

The religious American communes were entirely voluntary. People could join or not and if the life didn’t suit them, they could leave. The USSR was anything but. Communist officials built walls and an elaborate security apparatus to keep people from escaping. They had no choice beyond “adapt or die.” Communists believed they knew what was best for all whether they liked it or not. Religion was outlawed and the state became church. The revolution was sacred and capitalism evil. Individual liberty was not only irrelevant, it was “counterrevolutionary.” And, as Boris Pasternak’s novel character, Dr. Yuri Zhivago put it: “They shoot counterrevolutionaries.”

My earliest awareness of this was watching on TV as an ugly little bald guy with a wart on his face took his shoe off during a speech, banged it on the podium at the United Nations in New York City and declared: “We will bury you!” That was Soviet Premiere Nikita Kruschev. That Kruschev was dedicated to forcing Soviet communism on the entire world came through loud and clear to me that day and I’ve never forgotten it. Kruschev’s USSR collapsed thirty years later only because the United States sustained a forty-five-year-long Cold War.

We face a different enemy now. It’s another religious utopian group with strange ideas about sexuality, but different from its smaller predecessors in that it would violently impose itself on everyone in the world. It’s anything but voluntary. Radical Muslims are true believers with no doubts that they know what’s best for all of us whether we like it or not. They would make the world Muslim and run it under Sharia Law. They’re quite open about their intentions and have demonstrated that they’re willing to kill themselves if they can take a few infidels with them. Radical Shiite Muslims believe the Mahdi will emerge soon to preside over a thousand years of justice and peace. Iranian President Ahmadinejad invoked him from the same UN podium Kruschev used fifty years before.

Like the communists, Radical Muslims know the biggest obstacle in the way of achieving their utopian vision is the United States. Trouble is though, our Commander-in-chief lacks the will to oppose them. He won’t even call our enemy by its name. After US Army Major Hasan openly admired Muslim suicide bombers, declared the US an “oppressor” of Muslims, asked an al Qaeda recruiter what he could do “to further the Jihad,” shouted “Allahu Akbar!” while he gunned down forty-three US soldiers last week, President Obama said: “Well, look, we -- we have seen, in the past, rampages of this sort. And in a country of 300 million people, there are going to be acts of violence that are inexplicable.”

Inexplicable?

We’re in deep trouble.

Think Health Care Is Expensive Now? Wait Until It's Free

Recently I asked students how much it cost for a doctor visit. “My mother pays fifteen dollars,” said one.

“Fifteen dollars? I asked.

“Yeah,” he said. “That’s what she paid.”

“Okay,” I said, “But is that all it cost?” I pointed out that the average doctor visit costs between $95 and $265.

“She has insurance,” he said, “and they paid the rest. I didn’t know it cost that much.”

Many adult Americans don’t either and that’s our biggest problem with health care reform. I explained that people sometimes have a small “co-pay” and the rest comes from somewhere else. Those with insurance pay monthly premiums whether they get services or not. The poor, and people claiming to be poor, may have a small co-pay, and government uses our tax money to pay more, but it still doesn’t add up to the total cost of the visit - or the surgery, or the therapy, or whatever. To make up the deficit, providers charge patients with insurance more than the cost of their services, products or procedures - that’s why an aspirin can cost $13 at the hospital. Some doctors or dentists won’t take patients who won’t pay themselves or who don’t have insurance, because they can’t afford to make it on what government pays. Hospitals, though, have to take everyone. There’s no such thing as free health care, but more and more consider it their right.

It would be simpler if we all paid out of pocket, and that’s what 90% did before World War II when, according to economist Thomas Sowell, only about 10% of Americans had insurance. When government took over the economy during the war it imposed wage controls, so if a company wanted to woo an employee, it offered health insurance as a fringe benefit. That’s how employer-provided insurance caught on. However, many small businesses still can’t afford to offer it - especially lately. Huge, third-party government bureaucracies, and private ones too, add enormously to the cost of health care.

If we pay $95 or more out of our own pockets for doctor visits, it won’t be for frivolous reasons. We certainly wouldn’t pay $1000 for an emergency room visit unless it were a genuine emergency. However the poor, and those claiming to be poor, pay nothing for a such visits - or for an ambulance to drive them, so they’re much more likely to go for frivolous reasons like hangovers or gas pain, driving up costs enormously. Central Texas hospitals report that 82% of emergency room visits are people on “Medicaid or SCHIP.” According to the Austin American-Statesman:

In the past six years, eight people from Austin and one from Luling racked up 2,678 emergency room visits in Central Texas, costing hospitals, taxpayers and others $3 million, according to a report from a nonprofit made up of hospitals and other providers that care for the uninsured and low-income Central Texans.

If President Obama mentioned anything like this in his big speech to Congress, I didn’t hear it.

Notice I keep saying “or those claiming to be poor”? Many can hide how much they make, appear poor to government, and be eligible for “free” medical care. What percentage of the “poor” are really poor? A minority? A majority? Impossible to say. But we can safely conclude this: If we think health care is expensive now, wait until it’s “free.”

If more go under Obamacare, the deficit between what government pays and the actual cost of the services will also grow, forcing doctors and hospitals to pass along those costs to patients with private insurance - driving up premiums even faster. Then, unbelievably, Obamacare would actually tax those private plans. Don’t believe it? Check out studies by both government agencies like the Congressional Budget office, and private studies like one by PriceWaterhouse Coopers. This is what Democrats call “reform.”

Congress and the White House are determined to impose government-run medicine on Americans in the model of Canada and the UK. Economist Thomas Sowell sheds a little light on what Americans could expect:

In Canada, according to a provincial government website, 90% of Ontario patients needing hip replacements waited 336 days. In Britain, the wait is a year. As for technology, a 2007 study by the Organisation for Economic Co-operation and Development (OECD) showed that the number of CT scanners per million population was 7.5 in Britain, 11.2 in Canada and 32.2 in the United States. For Magnetic Resonance Imaging (MRI) units, there was an average of 5.4 MRIs per million population in Britain, 5.5 per million population in Canada and 26.6 per million population in the United States.

That’s why people in Canada wait about six months for an MRI. Dogs in Canada, however, can get one the next day because government doesn’t control veterinary care.