I’ve been thinking a long time what the answer to the recent health care bill and the overall runaway spending. According to the New York Times, Obama is on track to triple the national debt to 90% of GDP. This is simply unsustainable. We are on a collision course with the collapse of the American economy. What happens when your family consistently spends more than it makes? We call that bankruptcy. Fortunately bankruptcy is an escape for a person or a family but there’s no such option for a nation. Technically a nation can just declare that they will not pay their debts but this has only ever happened in connection with a collapse of that nation’s economy. Do we really want to go there?

We’re left now with limited options. I believe there are two main things we can do at this point to prevent this runaway train from jumping the tracks and rocketing off a cliff.

• First, to address the spending issue, we have to pass a balanced budget amendment. This is the only way we can keep spending under control. Congress has proven that it can not be fiscally responsible. Even if we could convince the current Congress to balance the budget, there’s no guarantee that any future Congress would do the same. We have to tie their hands. Every state has to work within the confines of a balanced budget and so should the Federal Government.

  Now the chances of passing a balanced budget amendment with this Congress is between slim and none. Most people don’t know this but there is more than one way to amend the Constitution. The first way is to have Congress propose the amendment and pass it with a 2/3 vote. It then must be ratified by 3/4 of the states. This is the only way it has ever been done in the past. The Framers wanted a protection against an out-of-control oppressive Federal government. In Article V of the constitution it allows for 2/3 of states to request a constitutional convention. If this happens, Congress is obligated to call the convention and then they have no say in the proceedings thereafter. In the convention an amendment can be proposed and voted for. If it passes the convention then it must be ratified by 3/4 of the states to become law. This has never been done before but it’s come close. Usually when it comes close, it spurs Congress to preemptively pass an amendment first such as happened with the 21st Amendment or pass a law that appeases the states like happened in the 80’s with the last efforts to have a balanced budget amendment. Congress passed a law that said the budget must be balanced by 1991. Of course it never happened.

  This is what the states must do in order to compel Congress to grow up and become responsible stewards of the public trust. If Congress won’t do it themselves, we must make them do it.

• The second thing is to address the Obama health care plan. At this point “Obamacare” is the law of the land. There are 13 Attorney Generals participating in a lawsuit to fight the law, but the best they’ll be able to do is get bits and pieces struck out but the plan over all will be in force.

  Again, in this situation it’s up to the states to exercise their Tenth Amendment rights. Every state that opposes “Obamacare” needs to exercise their right of nullification. Nullification is when a state legislature passes a law that basically says that they feel the law is unconstitutional and therefore is nullified in their state meaning it has no force within their borders. There are several examples in history where a state has exercised its right to nullify a law.

  In 1738 James Madison and Thomas Jefferson authored resolutions in Virginia and Kentucky in response to the Alien and Sedition Act stating that their states would resist any attempt of the Federal government to encroach upon their states’ powers.

  In 1798, the legislatures of Virginia and Kentucky approved resolutions that affirmed the states’ right to resist federal encroachments on their powers. If the federal government has the exclusive right to judge the extent of its own powers, warned the resolutions’ authors (James Madison and Thomas Jefferson, respectively), it will continue to grow – regardless of elections, the separation of powers, and other much-touted limits on government power. The Virginia Resolutions spoke of the states’ right to “interpose” between the federal government and the people of the state; the Kentucky Resolutions (in a 1799 follow-up to the original resolutions) used the term “nullification” – the states, they said, could nullify unconstitutional federal laws. (Tenth Amendment Center)

  According to James Madison and Thomas Jefferson, they considered the states, not the Supreme Court, as the final arbiter as to what is constitutional and what is not.

  In 1807 to 1809 nullification was used in Massachusetts and New York to oppose an embargo the United States had against Great Britain and France.

  In 1812 Massachusetts and Connecticut used nullification to resist the President’s call for the use of its militia for the purpose of defending the coast.

  In 1850 several northern states used nullification to oppose the Fugitive Slave Act of 1850 which put all runaway slave cases in federal jurisdiction and required bystanders to help capture the slave.

  It’s time to use nullification again to protect our rights as Americans and oppose our federal government’s oppressiveness.

I wrote the following letter and sent it to my state representative. I also sent a similar copy to my state senator and the governor. I’ll post any replies that I get.

Joshua B Ferguson
2502 West 1325 North
Layton, UT 84041

To: Representative Douglas C. Aagard

Dear Sir,

A lot has happened in the past year to our nation since President Obama took office. Spending is out of control in Congress. Some of the excessive spending was admittedly done under the Republican controlled Congress and under President George W. Bush, but it pales in comparison to the expensive agenda taken up by those currently in power. Likewise, the recent passing of the health care bill with seeming blatant disregard to the will of the American people feels like the last straw.

Republican representatives and Senators seem to be unable to do anything about this and Democratic representatives and Senators are unwilling to. This is why I’m directing my comments to you as my state representative. I believe that there is only one way to bring the Federal Government back in line with the people and the constitution and that is for the individual states to make a stand based on the Tenth Amendment of the Constitution. I am aware that Attorney General Mark Shurtleff has joined with other states in the lawsuit against Heath Care but this can only have limited success. I want to know what else you and the great State of Utah are planning on doing to rein in the out-of-control spending and the erosion of our rights as Americans.

I have two suggestions as to what Utah along with other States in the Union can do to prevent the runaway Federal Government.

1. To address the spending issue that will likely break the back of the American economy, we need a new amendment to the Constitution requiring a balanced budget. We have learned by sad experience that the government is incapable of living within its means. After over 200 years to get it right, we finally need to tie their hands with a constitutional amendment. Because of the nature of a democratically elected Congress, we can never be sure of the fiscal responsibility of any given Congress so we need to require it of them.

Unfortunately, there is very little chance of any Congress doing this willingly. Therefore the states need to coordinate with other states and request an Article V Convention on the subject of a Balanced Budget Amendment. I believe there are 34 states that would be willing to do this. This has been attempted over 700 times but has never successfully acquired enough requests. I believe that this issue has a good chance to be successful. It fell by only 2 states last time a balanced budget amendment was attempted in this way in the 1980’s.

2. To address the recently passed health bill (dubbed “Obamacare”), the State of Utah needs to exercise its state right of nullification. The Utah legislature needs to pass a law stating that the health bill is nullified and not in force within the borders of our state. This has been done in the past and can be exercised at any time that the state determines that the Federal Government has overstepped its constitutionally granted powers. In the Kentucky and Virginia Resolutions, Thomas Jefferson and James Madison argued that nullification, not the Supreme Court, has the final say in the constitutionality of any law (http://en.wikipedia.org/wiki/Nullification_(U.S._Constitution)).

Sir, I would love to hear your position on what you think should be done to address these important issues that our nation faces today and what you plan to do as my representative.

Respectfully,

Joshua B. Ferguson

I found the story in Yahoo! News’ cache and I reprint it here for posterity. Enjoy.

Backdoor taxes to hit middle class
Mon Feb 1, 4:09 PM
By Terri Cullen

NEW YORK (Reuters.com) –The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.

The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.

Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a “patch” that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.

Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year’s levels, the tax will hit American families that can hardly be considered wealthy — the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.

Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:

* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;

* The $250 teacher tax credit for classroom supplies;

* The tax deduction for up to $4,000 of college tuition and expenses;

* Individuals who don’t itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;

* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.

Steve Milloy, author of the Junk Science blog and Green Hell blog was on Glenn Beck’s TV program explaining a little of what we have to look forward to.

Obama Win Causes Obsessive Supporters To Realize How Empty Their Lives Are

Obviously made for fun but it wouldn’t be funny if there weren’t an element of truth in it.

I just thought I’d throw out a few things that we can now look forward to with a new Obama administration.

More Government Regulations

Nothing leads to government regulations like a country in crisis. If congress ever had a creed, it would be “If in doubt, regulate”. We’re in a huge financial crisis and Obama will use that to create more regulation. Never mind that it was government regulation that created the mess in the first place. Never let a few facts get in the way of good ‘ole government control.

Higher Taxes

I’m not even talking about people who make $250,000 per year, either. First thing that will happen is Obama and the Democratic congress is going to let the Bush tax cuts expire. They don’t really count that as a tax increase, just the expiration of a tax cut. In the end, though, your taxes will be higher next year than they were this past year. Then Obama will increase taxes on the “rich”. Now he’s mentioned that the “rich” are those who make $250,000 or more….or was that $200,000….or maybe it was $150,000. There were actually lots of numbers thrown out there. The truth is, we don’t, and probably neither does he know how low that number needs to go. According to the article in my last post, it could be as low as $75,000. Congratulations. You just may have been declared rich by Obama. Please pay more next April.

Socialized Medicine

Barak wants everyone covered by insurance. If you work for a “large” company, he says that you will be fined if you don’t provide health insurance to your employees. He has yet to define “large”. If you are a small company, your employees will go on a state insurance program. Who will pay for this? Everyone. See the “higher taxes” point above. That’s the plan laid out during the campaign. Ultimately I believe there will be a push for universal coverage a la Canada. After all, we can’t have the rich with better coverage than the poor.

Civil Military

Obama wants to create some sort of Civilian Security Force that was just as well funded and equipped as our current military. We’re not exactly sure what the role of this new military would be but if history serves as any kind of guide, a civil military corps usually leads to some sort of oppression. I’ve heard people say that it’d be like the peace corps building houses and roads and stuff. If it’s just as well equipped as the military, I’m not sure what they’ll need tanks and F-22 Raptors for. On the other hand, maybe our foreign military (for lack of a better name) will trade in their tanks and jet fighters for bulldozers and shovels. Either way, I can’t see it as being a very good thing.

Lose Your 401(k)

With Obama’s support Democrats are discussing a plan that will eliminate the tax exempt status of your 401(k) and turn it over to the Social Security office to invest it in government bonds in exchange for a guaranteed 3% return. You would be required to put 5% of your pay into this account. Also, without the tax benefits associated with 401(k) plans, all employer matching programs would cease. So if you have a 1:1 match with your employer and you put 5% of your income into your 401(k), you currently have 10% tax deferred which is then most likely invested in funds that over the long term return 8% to 12%. This will be replaced with 5% of your income with a 3% return. Also, since this will essentially be part of Social Security, about the time you retire, we’ll be hearing about how for years Congress has been raiding Social Security and it won’t be solvent by the time you retire so your promised 3% won’t even be there.

Well, these are some things I could think of off the top of my head. My only hope is that these 4 years will be a disaster and it will remind people just what a liberal administration means. Those of us that don’t remember much of the Carter administration will have Obama to give us an idea of how it was. Hopefully this will pave the way for another Ronald Reagan to bring sane conservatism back into government and get this country back on track. I can hope, can’t I?

This is the end result of Obama’s tax and economic policies. How long will it take for the top income earners in this country to start pulling back because of increased expenses caused by taxes? As a company’s expenses increase, in order to stay profitable, they have to either cut back on other expenses (ie employing people) or increase their prices. Price increases across the economy is inflation. That coupled with increased unemployment from companies cutting back and the Fed printing money like it’s going out of style to inflate us out of our national debts then we’re starting to see the misery index of Jimmy Carter’s administration rear its ugly head.

This country cannot afford moving towards the failed European policies that they are in turn moving away from to strengthen their economies. If we lose our economic strength while others, learning from their past mistakes, are gaining it, we may never catch up again.

Lerrick sums it up better than I ever could:

The economic tides will not stand still while Washington experiments with European-type social democracy, even though the dollar’s role as the global reserve currency will buy some time. Our trademark competitive advantage will be lost, and once lost, it will be hard to regain. There are too many emerging economies focused on prosperity and not redistribution for the U.S. to easily recapture its role of global economic leader.

Tomorrow’s children may come to question why their parents sold their birthright for a mess of “fairness” — whatever that will signify when jobs are scarce and American opportunity is no longer the envy of the world.

McCain is good on foreign policy so I wouldn’t change much there. He’s got the experience and the background to give him credibility in this area. McCain needs to focus on sweeping changes here at home because that is what people are worrying about.

First, he needs to support a completely restructuring of the tax system. The biggest issue we have right now is that congress is monkeying with our tax system every year. The biggest benefit to the economy is stability and being able to count on how much your tax expense is going to be. McCain needs to support a drastic simplification of the tax code. I very much support the Fair Tax and would love to see him support something like it.

Next he needs to champion a balanced budget. If we, the people, are expected to live within our means, than so is the federal government. He should say that any budget that crosses his desk, whether put there by a Democratic or Republican congress, that the expenses are more than the revenues, he will veto. If he wants to soften it, he can give them a 3 year window to get in line. The first year needs to be within 25%, the next 15%, then 5% and then from then on it must balance or revenues must surpass expenses. He’ll have to take a stance that the people are going to have to sacrifice and people will be receptive to this in this climate of fiscal insanity.

Lastly he needs to reject all of this foolishness with dumping money that the government doesn’t even have to buy up mortgages. The problem with the market is that banks won’t lend to each other. Come up with an insurance situation so that banks will again have confidence to lend to each other. He needs to suspend the mark to market rules put in place after the Enron scandal so that banks can establish a value of these securities that contain the bad mortgages. The government has no business giving money away tax payer money in order to reward bad behavior. They can do something very similar simply by insuring the securities.

Anyway, there are more sweeping changes he can support but those are big ones in my book. With policies like these, who could truly be that candidate of “Change”?