Government Motors and the Death of the Free Market

By S Porter

When the government interferes with the free market, the results are never good. The same progressive steps have happened repeatedly over the course of our history and yet we do them over and over again. Now we are running down the same path; determined that this time will be different. General Motors is the latest pawn in the game for who has best ideas to run our economy, but the fundamentals of the free market have been thrown out the window. Over 35 years ago, Amtrak was the government pawn and the talk was about making it profitable in less than 3 years so we didn’t lose the passenger rail system. Today we still own Amtrak, it’s still losing money, and the government has prevented any competition from taking them down.

Normal free market operation happens when a company produces a product or service and based on its merit, we the people purchase what it sells because we like it. The company must be run well and as demand for what they sell rises, other companies will compete for your dollars. This competition will keep prices low and quality high to attract your attention. If the product becomes unpopular, too expensive or the company is run badly; the business will die and be replaced by something you will spend your money on. This is the natural business cycle that is propelled by YOU; the free market.

GM has been deemed too big to fail, and the government has stepped in to try to save the thousands of jobs that depend on the automakers success. Unions have driven up the price of labor along with legacy costs in the billions to pay workers who have long retired. The result is a company that cannot sustain its own weight, and for a long time GM has spent more money on labor than the car itself. We the people like the cars they make and we really enjoy our SUVs, but the company is so badly run at this point that it has no hope of survival. The government took billions of your money and gave it to GM to keep them in business, but that won’t stop the ship from sinking under its own weight. GM has declared bankruptcy anyway, and now the government is getting even more involved. The white house has fired their executives, is now limiting their compensation terms and even dictating what kind of cars they must build. The government can’t tell a company how to be successful; YOU do with your dollars. GM didn’t produce these cars before because we didn’t buy them, now they don’t have a choice.

Ford should be the big winner in this situation, but the government will make them the big loser. They didn’t need bailout money because they are a good company and their cars are popular around the world, but now they must pay to keep their competition in operation with their tax money. The government is telling GM to produce cars that we don’t want to buy, so it will be a black hole for years to come. In an attempt to make them profitable, the government will change the rules of the game in GMs favor by giving you incentives to buy their products. Tax deductions and green standards will make GM’s cars cheaper to buy, all while penalizing Ford for being a profitable company. In the end, no company can compete with a government entity because the government can always tilt things in their favor. Every private car company will be driven out of business by Government Motors because it’s the only way GM can compete and you will pay the tab for all the loses. The government can’t tell you what to buy, but they sure will try.

Rather than letting bad banks fail and good banks succeed, the government has disrupted the financial industry and produced the opposite. Now the government is getting involved in the energy sector and deciding for you what types of energy you should buy and shouldn’t. Rather than allowing free market solutions to healthcare like Ameriplan and other health plan alternatives, the government created public plans in Medicare and Medicaid which have raised healthcare prices through the roof. The next step will be to expand the public healthcare system and eventually put 2.3 million people in the insurance industry out of work. This type of economic “justice” is socialism no matter what they try to call it, and it will ultimately cost your freedom of choice, your tax money, your opportunity for success and eventually your job. The free market dies a little more each day and leaves many of us wondering; which industry will the government try to “save” next?


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Cap and Trade or Cap and Tax

By S Porter

The Obama administration is now pushing its cap and trade bill through congress. It sounds harmless enough, but the effects it will have on middle class Americans is staggering. There seems to be a never ending battle to take more and more of your money for all of the projects the current congress has slated, but this one will impact your wallet in a way most people never saw coming. Global warming, global cooling or climate change all mean the same thing; get ready to pay. Global temperatures have gone down for the last three years and most Americans no longer believe the hysteria, but that isn't going to stop the government from implementing sweeping reforms that put you on the hook.

Cap and trade essentially puts a cap on the amount of carbon dioxide that any company can produce. The problem is that the biggest offenders are power generation facilities that we all get our energy from. They well exceed the limits that congress would like for them to stay under, so they will need to pay a hefty tax for everything they produce beyond the cap. I'm sure this sounds like a great idea to the extreme environmentalists out there, but power companies aren't just going to pay the tab. In order to remain profitable, they will need to pass that expense on to their customers and we will end up paying for their extra taxes.

We the people don't have a choice in what company produces the energy that we use in our homes, so this new tax will hit us square in the face. It's still far too expensive to convert everything we use to renewable energy, so the power bill will go up considerably. The standard rate for electricity and natural gas is expected to double in the next couple of years, and it will come strait from us to the power company, then to the government. Everything we use and buy in the United States is produced using power and shipped around using power, so the cost of everything else will rise along with it. The government knows this is going to happen and they say it's acceptable because it will FORCE us to use less, but should the government really be telling US what to do?

For years the hype over global warming has had major repercussions in our way of thinking. A recent poll showed that three out of five children now believe the world will no longer exist when they grow up. Scientists have told us that major sea level rise and melting polar ice caps would devastate our shore lines and make the earth unlivable, but then the earth began cooling again and nothing happened. Obviously we don't know as much about how these things work as we would like to think we do, but the government is going to bankrupt us based on a guess. Over the last several thousand years, there have been times when the world was MUCH hotter and much cooler; but here we all are thinking the end is next week.

The government, the people and companies are all out of money, but we keep getting squeezed for more. Healthcare reform will bankrupt us because the government won't use free market solutions like Ameriplan. Social security will bankrupt us because the government won't make tough decisions. Inflation will kill us because the government just keeps borrowing more money, and now cap and trade has come along to put the final nail in our coffin. At some point the people of this country are going to have to stand up and say enough is enough; we tell you what to do and how much to spend, not the other way around!

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5 Ways YOU Can Fix the Economy

By S Porter

1. Go on a date. Most people overlook the little things that people can do to improve the economy around them. Your community thrives by money flowing from person to person and an economic downturn happens when that stops. You may not have the money to go out and splurge on the big ticket items, but any amount of money flow goes a long way if everyone is doing it. Reconnecting with your spouse through dinner and a movie will also stimulate more than just your local vendors!

2. Go on vacation. President Obama recently said that taking a trip to Las Vegas is irresponsible when the economy is down, and that immediately put thousands of people in Las Vegas out of work. Travel and tourism usually takes the biggest hit when things are bad, but that also means they are offering great deals for anyone who wants to take a trip. Vacation costs more than a date, but not as much as it usually does and you may be saving a few jobs all by yourself. If you have the money to get away there isn’t a better time than right now, and you can do it for a good cause as well.

3. Buy something from another person. Many people need to downsize their own household right now, so they are trying to sell a lot of things they don’t really need. You can but these items for unbelievable prices and you will be helping them out at the same time. They say one man’s trash is another man’s treasure; and with the economy down right now, you may be helping them pay their mortgage this month. Some people feel bad when they see someone selling personal items because they need the money, but I see it as initiative to survive. Doing whatever it takes to meet your obligations is a valuable skill that more people should learn, and they will be stronger when they come out the other side.

4. Invest in something. Stocks have been down at levels we have not seen in more than a decade. If you are a long term investor, you won’t see a better situation for decades to come. No one can tell you if the stock market is done going down or not, but if you are investing for the long term; I can tell you with 99% certainty that the stock market will be higher in ten years. Many businesses out there are good companies that need your investment money to grow and expand, and ultimately, to hire new employees and pay more in taxes.

5. Start a business. This is the all time number one thing anyone can do to help the economy and everyone around them. When the economy is down, large companies are laying people off and small business is doing all of the job creation. I chose to start an Ameriplan business, because it helps people with high healthcare costs and it allows me to generate an extra income for my family. If your business has a strong base, you can begin to hire new employees and help provide for their families as well. Businesses provide the majority of economic growth, and the big businesses of tomorrow are starting right now.

Saving money isn’t a bad thing; in fact it’s a necessity for any responsible family to do to ensure a good quality of life. The problem occurs when everyone stops spending all together and starts saving everything they have. Businesses can’t survive in this climate so they begin laying people off and the downward spiral continues. Giving to charity and helping the poor is a noble cause; but unless we all begin to spend something again, we will all need someone else to donate to us! Get out there and help your community and your fellow Americans, by doing something for yourself.

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The Inflation Nation of the Next Generation

By S Porter

Most people don’t think about inflation and don’t have any idea how it affects our lives, but the implications are very real. Inflation is the process by which all the goods and services that we purchase become higher in price. If inflation goes up at a faster rate than wages, more money is leaving your wallet to buy all the things you need than your income can keep up with. There are three reasons why inflation goes up and we usually have only one of them at a time, but right now there is a perfect storm brewing that may seriously hurt us all. Knowing what causes inflation and what to expect can help us prepare for the inevitable.

The first reason for inflation is debt. When the United States needs to borrow money from another country like China, the value of our dollar goes down compared to their currency. We buy many things from China and lots of the things we make and use are built with Chinese parts. If the dollar is worth less in China, then all the things we buy from them go up in price and all of the things we make with Chinese parts go up in price as well. We have been borrowing money from China for many years, but right now we are about to borrow huge amounts of money all at once.

The second reason for inflation is printing more money. It is the most dangerous and it is the next step in paying for our huge government spending spree. Many people think that if the government needs more money they can just print it, but this is a huge mistake and only used as a last resort. The country’s total production has a particular value and it is divided up amongst all the currency that is in circulation. When you print more money, you don’t have more money; you have the same value divided up amongst more currency so it all goes down in value. This makes the cost of everything go up even though your wages aren’t, and when we print more money the cost goes up almost instantly.

The third reason for inflation is the most common and happens on a regular basis when the economy is recovering and going up. When the economy is going down or crashes like it did recently, manufacturers quickly cut production to meet the lower demand. As the economy recovers, people have more money to spend; but there aren’t enough products to meet the demand. This makes the value of those products go up because they are more valuable. If you want to buy a new car, and so does everyone else, the value of the car goes up because they aren’t making enough cars to meet the new needs. We usually keep this kind of inflation in check by raising the interest rate to borrow money; this slows people’s spending down and the rate of inflation slows down as well.

Rather than pushing free market solutions to healthcare like Ameriplan and other discount plans, or providing lower taxes so people can purchase their own health plans; the government has elected to spend more money on healthcare reform. Other entitlement programs and massive bailouts for failed companies have caused the government to spend almost twice as much as it brings in. China will lend us huge sums of money, but it isn’t enough so we will need to print a lot of money as well. At the same time, banks are being encouraged to lend us more money at very low interest rates. All three inflation causes are being exploited at the same time and the perfect storm is coming. Over the next few years the cost of everything you buy from gasoline to groceries will rise in value very quickly but your wages will not… if you aren’t already a victim of unemployment because of an unfriendly business environment due to rising taxes needed to pay for all of this. Plan ahead and don’t get caught unaware of what’s on the horizon! Our children and grandchildren will be feeling the effects of this for years to come.

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Why Healthcare Is In Bad Shape and the Government Can't Fix It

By S Porter

Most people in the United States are upset with the state of our healthcare system, and I have heard many different explanations why it’s this bad. The main complaint about our healthcare system is the price tag because the cost of health insurance has gone through the roof. In addition, healthcare providers have become more distant and less responsive to Americans questions about how to take care of themselves. The worse it gets, the louder the cries become for some kind of healthcare reform; including a government based program or universal healthcare. The reasons for the problems in our healthcare system are easy to understand, but many people have no idea what’s really going on.

For starters, our system is already partially socialized. Medicare and Medicaid are government based programs that give free health services to the underprivileged and the elderly. When healthcare is free, people go much more often and for every imaginable reason; so the 20% on these programs create a larger bill than the other 80% that are paying for it. The government is on an eternal quest to make these costs go down, so they have limited how much doctors and hospitals can charge Uncle Sam for these services. As a result, healthcare providers must raise costs for the people who are paying for it and their health insurance premiums go up. Obama’s administration has decided to try and fix this problem by further socializing the system and offering free healthcare to about 40%, but this will only lead to even higher costs for the population that is already paying for it.

The other big reason for price hikes in the health field is our culture of sue now, sue later and then sue some more. Doctors are people just like you and me, and occasionally they make mistakes. Today Americans can sue their doctors for any reason they feel like and the more we do, the more expensive insurance becomes for the doctor. These costs then get passed on to the people who are paying for their health insurance and doctors become even more hesitant to help patients. If the doctor tells you that a treatment will help your condition, but it doesn’t and they get sued for it; then the next time around they are much less likely to even try to fix your condition. Once again, the government doesn’t see this as a large problem and encourages patients to sue more.

As a result of all these price increases, health insurance companies are also looking for ways to cut costs. The easiest way for them to do this is to limit the amount and types of services that consumers can get from their healthcare providers. As long as private insurance exists, you can shop around until you find one that covers what you want; but if we move to universal healthcare, that choice will go away. I’ve heard many people including the president himself say that private insurance won’t disappear with government healthcare, but there isn’t any way for insurance companies to really compete with a “free” plan that everyone is already paying for anyway. In the UK and Canada they have already adopted a universal healthcare system and their citizens now have to wait in very long lines to get the simplest of procedures. To keep their costs down, their governments now decide who is worth saving and who isn’t by a committee of bureaucrats!

There are free market solutions to these problems, but the outcry for reform is so great now that I don’t know if people are willing to listen. Limiting lawsuits to very serious matters would bring healthcare costs down, and weaning people off Medicare and Medicaid would bring them down much further. I think we can all agree that some form of healthcare should exist for those that can’t care for themselves, but is that really 40% of this entire country? One free market solution is discount health programs like Ameriplan. These programs are very inexpensive, but they only provide a discount at the doctor rather than just paying for it; this way you only go to the doctor when you need to, and you get a discount on services when you do.

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