Listening to a conversation between Lee Hamilton and another representative, who were appearing on C-Span last year, I noticed a key word; they were talking about universal health care, and mentioned its failure in 1993. Then they mentioned the passage of the Kennedy-Kassebaum health care bill last year. Then Hamilton made the statement, "I guess we will just have to pass it incrementally." A little this year, a little more next year, as long as it takes to get the whole program! It is interesting to note that Clinton made the statement during the election campaign that he had gotten a third of his health care program through already. Since Kennedy-Kassebaum was the only health care program passed last year, that must be it!
This year, he is already talking about getting a federal health care program for children. He is working the heart strings of the people with this plan he has, which he is very good at. How many of you would object to the idea of guaranteeing health care to all children? What you need to know is that children are not going to be refused health care. He is taking advantage of your sentimentality to get another leg of his universal health care enacted into law. The incremental approach. If you know the technique, you can be certain to resist his entreaties.
And, indeed, a health care plan for children has been introduced. Last year, a supposed-moderate Republican co-sponsored a health care bill with Ted Kennedy; Nancy Kassebaum. Incidentally, she is a member of the C.F.R. She has since retired from the Senate and married Howard Baker, a former moderate Republican senator from Tennessee, who is also a member of the C.F.R. This year, a supposed-conservative Republican, Orrin Hatch, of Utah, is co-sponsoring a bill with Ted Kennedy which would provide for a health care program for children. Most of the children who would be covered are already covered under Medicaid. In making an evaluation of the bill, someone has noted that a family with 3 children can expect to get a family plan to cover their whole family in the private sector for about $4,000 a year. Using the proposed government plan, coverage for each child would only cost $5,800 a year. Three children would cost $17,400! Isn't that interesting? But, heaven forbid that you should be against a government program that would provide coverage for our children! Who do you think will profit the most from such a program?
When did this have its beginning? In 1913, the Federal Reserve Act was passed on the last day of the session, with barely enough present for a quorum. It gave control of the monetary system of the United States to a private corporation. (That is in violation of the Constitution, yet there was no amendment passed to enable the passage. One of the enumerated powers, Article I, Section 8, states To coin money, regulate the value thereof, and of foreign coin, and fix the standards of weights and measures;) Since that time, there have been 193 amendments to that law, which have greatly increased the power of the Federal Reserve System.
About the same time, an amendment was passed which enabled the income tax to be levied. One of the paragraphs of Article I, Section 9, which limits the powers of the federal government, states No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken. That meant that no one could be directly taxed by the federal government. The amendment which was passed enabling the income tax was necessary to overcome this limitation of the federal government. At the time, the law providing for the income tax set the rate at 1.5%, and was never supposed to be any higher. Ho ho! It now ranges from 28% to 33%, and has been much higher. Including all taxes, we are now paying around half of our salaries for taxes! How else can you describe that but an incremental increase over the years of income taxes?
The Federal Reserve could not expand or contract the currency easily until 1933. When currency is backed by gold or silver, only the amount of gold or silver on hand can be printed in currency. That means the money supply cannot be easily expanded or contracted. It also means that inflation will not become a problem, which will lend stability to the monetary system. In 1933, however, Roosevelt took the nation off the domestic gold standard. That "energized" the Federal Reserve. Then Johnson took in all silver certificates, which meant that we had no domestic currency backed by specie. When Nixon took us off the international exchange gold standard, our currency became a fiat currency; it is legally accepted in payment of debts, but it cannot be redeemed for any hard cash, i.e., gold or silver. The value of such currency depends on how much confidence those who use it assign to it. We were told in the thirties our currency was fully redeemable by the full faith and credit of the United States government. All the Federal Reserve had to do to expand the monetary system was to lower the discount rate, and make loans easier to get. To contract the currency, raise the discount rate, and make rules tougher on what can be accepted as collateral. Other rules as to how much banks had to have on hand, how much money they could lend out, and how much money they could invest, tended to either make money easier to get, or harder to get, depending on what the Federal Reserve perceived to be the status of inflation.
The achievement of a fiat currency was also accomplished by incremental steps. You should be reminded that when the nation was headed for the Great Depression in the twenties, the stock market was highly over-valued, and people could buy securities with only ten percent cash. Their broker loaned them the other 90% on what is called call loans; the broker could call for their repayment in 24 or 48 hours. That was called buying on the margin. It led to a great deal of speculation, and banks themselves became involved, since there were no banking regulations to prevent it at that time. When the House of Cards Market finally collapsed, and people needed cash, the banks themselves had no cash. It was either tied up in illiquid assets (assets not easily converted to cash), or lost by their speculation on the market. The margin then was 10%; you only had to have 10 dollars to buy $100 worth of securities. The margin was around 70% in the sixties, and only a year or so ago, it was down around 50%. Our market is again highly over-valued and millions of people are buying stock through mutual funds, or speculating in the commodities market. Many banks are flirting with failure, very much the same as the S&Ls in the eighties.
We have been worked, incrementally, back to a situation very similar to the conditions of the twenties. Paul Volcker, who has been the Chairman of the Federal Reserve, arranged to have certain foreign banks enabled, by a law passed in 1963, to print our currency overseas! He was also responsible for the passage of another law in 1973 which allowed certain American banks with offices overseas to print our currency overseas. That has to be inflationary, and it also has to have a depreciative effect on our currency in the world marketplace.
While the 103rd Congress was still in session, and Rep. Henry Gonzales was conducting hearings on White water, a bill was passed before an almost empty House which allowed banks to purchase smaller banks across state lines. The bill was passed by a voice vote, with the chair declaring the ayes having it, and no one was there to challenge a lack of a quorum and demand an electronic vote. Last year, when the 104th Congress was still in session, another law was passed which enabled very large banks to merge. The overall effect of such laws is to concentrate more and more control of the monetary system in the hands of fewer and fewer people. Again, the incremental method of getting laws passed, attracting very little attention, is positioning smaller groups of people to exert more and more control over our lives.
When a vote is called on a bill in the House, the chairman may call, "All those in favor of the bill signify by saying ‘aye'. Those opposed ‘no'." And the response is measured by the chairman the leadership wishes to hear. If there are not enough people present to make a quorum, an objection may be voiced, and a demand for a roll call vote. In the case of the bill passed in the 103rd Congress, the response was virtually nil, but the chairman declared "The Ayes have it, and the measure is passed.", and no one called for a quorum, so the bill was passed before an empty House! Last year, on the 23rd of February, a vote requiring a 60% majority (called a super majority) was passed in the same manner, before an empty House, with no one calling for a quorum.
Another quiet situation has been going on for a while concerning the banking business. Banks have wanted to get back to the situation they had once in which they could use money on deposit (called demand deposits). The only solvent retirement reserve funds are on deposit in some of the largest banks in the nation. Those banks want to be able to use those funds to invest, making money for themselves. They also want to be able to sell insurance and securities in their branches. There are still laws against that, but it has been arranged to allow them to act as brokers for insurance and securities firms, and sell their wares in the banks. That's the first step.
You might say, "So what? If the banks do sell securities and insurance, and make investments using demand deposits, and they lose it, it's all covered by the F.D.I.C." Only the FDIC is nearly broke! Who gets to pay the banks' losses in that event? The American taxpayers! That sort of thing has ruined the Social Security system.
There is another good example of incrementalism. It was originally intended that the money workers paid into Social Security would be kept in a trust fund, gathering interest. The law prevented any of that money from being used for anything except a retirement supplement, or as a fund to help the families of those who had died before the age of retirement. Very quietly, the Johnson administration did away with the trust fund requirement and put Social Security on the budget, which enabled them to borrow from the Social Security reserve fund. Then children who had learning disabilities were added to Social Security; then their parents; then alcoholics and drug addicts became known as "disabled" so they could draw from Social Security to pay for their treatment. It has been discovered that there are parents who instruct their children on how to be trouble makers so they can be classified with a learning disability and receive Social Security. And some of those same parents are creating situations for themselves to be declared disabled because of the vexing problem of raising a child with a learning disability.
It has become the practice of those who make up the budget each year to borrow from the Social Security trust fund, and all the other trust funds with money in them, and use that money to put into other accounts, without showing the debt on the budget...just to make the deficit look good! When Bush was president, he announced that there wold be a new term for us to learn. The GDP - The Gross Domestic Product. It is different from the GNP, yet the same. The GNP carries earned money from companies with overseas offices, while the GDP is only the money earned within the United States. It is becoming evident it is just another of those terms politicians use so easily to make the public think we are in better financial condition than we are.
The term deficit is another of those terms politicians like to use to make the public think we are better off than we are. Since 1933, it has been the practice of the government to use deficit budgeting, sometimes referred to as deficit spending. The federal government budgets more to spend than it has available, and has to borrow the money to cover the shortage in the budget. That new money borrowed each budgetary year is referred to as the deficit. It applies only to the money borrowed for the current year. The deficit becomes part of the debt next year. There is no deficit if the budget is balanced. If the deficit is reduced, the debt continues to go up. Politicians today try to deceive you by bragging about reducing the deficit, when it truth, the debt continues to go up. Four years ago, the debt was $4.3-trillion; today it is about $5.3-trillion. For all the talk about reducing the deficit for four years in a row, the debt has still increased nearly a trillion dollars in that time. And still both Clinton and Congress are talking about increasing spending this year!
I heard a man say when it seems that all your alternatives are lost, when your only chance to be redeemed is gone, when all you have left is your trust in the Lord, that's when the Lord takes steps to save you. Our nation was founded on our trust in God; when politicians try their hardest to destroy our trust in God, that's when the Lord takes control. We must keep praying for His redemption.
God bless you, and God bless America!