Showing posts with label national debt. Show all posts
Showing posts with label national debt. Show all posts

Saturday, March 9, 2013

Ben Carson, MD: In His Own Words

I had never heard of Ben Carson until two years ago when I watched a movie starring Cuba Gooding as a doctor who endured racism as an intern and resident until he achieved respect as a neurosurgeon. Only at the end of the film did I learn this was the true story of a doctor who currently practiced at Johns Hopkins, one of the most esteemed hospitals in the country.

Frankly, I hadn’t thought much about Carson until last month when I heard that his keynote speech at last month’s National Prayer Breakfast caused a furor on The Left because he had the audacity to criticize our growing national debt and healthcare crisis while the architect of both problems was sitting a scant five feet away from the podium. Philosophically, however, they were separated by light years.

Ben Carson was born in Detroit 61 years ago to a functionally illiterate mother. Poor and black, Ben and his older brother Curtis had ready-made excuses to be victims. But they were blessed with a mother who refused to let either of them under-achieve.

I had a mother who would never allow herself to be a victim no matter what happened. Never made excuses, and she never accepted an excuse from us. And if we ever came up with an excuse, she always said do you have a brain? And if the answer was, yes, then she said then you could have thought your way out of it. And it was the most important thing she did for my brother and myself. Because if you don’t accept excuses, pretty soon [you] stop giving them, and start looking for solutions. And that is a critical issue when it comes to success.

Carson’s mother taught her boys the rewards of hard work by her own example.

My mother worked as a domestic, two, sometimes three jobs at a time because she didn't want to be on welfare. She felt very strongly that if she gave up and went on welfare that she would give up control of her life and of our lives, and I think she was probably correct about that. And, so she worked very hard. Sometimes we didn't see her for several days at a time, because she would go to work at five in the morning and get back after 11:00 p.m., going from one job to the next.

But, one thing that she provided us was a tremendous example of what hard work is like, and she was also extremely thrifty. She would go to the Goodwill, she'd get a shirt that had a hole and put a patch on it and put another one on the other side to make it look symmetrical, and she sewed her own clothes.

She would take us out in the country on a Sunday and knock on a farmer's door and say, "Can we pick four bushels of corn, three for you and one for us?" and they were always glad at that deal. And she'd come home and she'd can the stuff, so that we would have food.

Ben Carson’s mother, Sonya, was one of 24 children. She had only a third grade education and had married at age 13, learning only after her two boys were born that the reason her husband traveled so much on his “job” was because he had another family. He was a bigamist. While the boys were only adolescents their parents’ divorce pushed the family deeper into poverty.

Where [we lived] you walk into a room and turn on the light switch and it looked like the wall was moving because there were so many roaches, and rats that were big enough to move garbage cans, and sirens and gangs and people lying in the street with bullet holes in their chest … [that’s] how my two cousins that we lived with got killed.

Despite his aspiration to be a doctor, young Ben Carson was not a good student.

I was a horrible student. But, you know, like many students, I kind of envisioned myself as a doctor anyway, despite the fact that I wasn't doing well. We lived in the inner city, single parent home, dire poverty… I was perhaps the worst student you've ever seen. I thought I was really stupid. All my classmates and teachers agreed, and my nickname was "Dummy."

The family’s extreme poverty caused Ben to have such low self-esteem that he developed a violent temper which caused frequent fights.

Another youngster angered me, and I had a large camping knife and I tried to stab him in the abdomen, and fortunately he had on a large metal belt buckle under his clothing and the knife blade struck with such force that it broke and he fled in terror. But, I was more terrified as I recognized that I was trying to kill somebody over nothing. I realized at that moment that with a temper like that, my options were three: reform school, jail, or the grave.

None of the options appealed to me. So, I just locked myself up in the bathroom and I started praying and I said, "Lord, I can't deal with this temper." And, I picked up my Bible and I started reading from the book of Proverbs. That was the first day that I started doing it, and I've been doing it every day since then because it had all these verses in it about anger, and it seemed like they were all applicable to me. And, while I was [in the bathroom], I had a revelation and that revelation was that the reason I was always angry is because I was always in the center of the equation. So, just step out of the center of the equation and then everything won't be directed at you, and then you won't be angry, and also, you'll be able to look at things from other people's points of view.

As a domestic servant, Carson’s mother observed that the wealthy families whose children she cared for watched little television. So she began rationing her boys to three TV shows per week and insisted that each boy fill his time instead by checking out two books from the Detroit Public Library and submit weekly written book reports to her. She appeared to read them and made checks marks in the margins. They didn’t know at the time that she couldn’t read.

I started to enjoy [reading] because we had no money, but between the covers of those books, I could go anyplace, I could be anybody, I could do anything. And, I began to learn how to use my imagination more because it doesn't really require a lot of imagination to watch television, but it does to read. You've got to take those letters and make them into words, and those words into sentences, and those sentences into concepts, and the more you do that, the more vivid your imagination becomes. And, I believe that's probably one of the reasons that you see that creative people tend to be readers, because they're exercising their mind.

In time, the Carson family moved so the boys could attend a better neighborhood school – whose students happened to be mostly white. Eventually Ben’s grades improved to the point that he was making an “A” in every subject. While many of his teachers were supportive, some weren’t.

In the eighth grade, I was still at the top of the class and they would give a certificate out at the end of the semester to the student with the highest academic achievement. And, it turned out to be me, but I was the only black student in the class, and the teacher got up in the front and she basically chastised all the other students because they clearly weren't working hard enough. Because, how in the world could a black student be number one? I remember the band teacher tried to destroy my report card because I had all As and so he got to put a mark on it, so he gave me a C, and he figured by doing that I wouldn't get the award, only to find out that band wasn't included as an academic subject!

Yale offered Ben a scholarship. He graduated with an undergraduate degree in psychology and then attended the University of Michigan Medical School. Initially he planned to do his residency in psychiatry. But that changed.

I realized that I really didn't want to do psychiatry, and I felt that although cardiothoracic surgery was challenging, it didn't offer me enough variety of cases. And then I said, "Well, what's an area where you could become an authority very quickly?" and I said, "The brain, because nobody knows anything about the brain." And, I spent all those years thinking I was going to be a psychiatrist. So, I already knew quite a lot about the brain. So, it was toward the end of my first year in medical school that I decided that neurosurgery was going to be the right field for me.

Carson continued to encounter racism but had learned from his mother to ignore it rather than make an issue about it.

It wasn't difficult for me at all. And it remains not difficult today. I remember when I was an intern, and anytime I would go onto the wards with my scrubs on, one of the nurses invariably would say, you know, "Mr. Jones isn't quite ready to be taken to the O.R. yet," assuming that I was an orderly. I wouldn't get angry, I would simply say, "Well that's nice, but I'm Dr. Carson. I'm the intern." And, you know, they'd turn about 18 shades of red, but I would be very nice to them and understanding, and I had a friend for life. … Rather than blowing up and saying, "How dare you!" … I recognize that the reason they said that was not necessarily because they were racist, but because from their perspective the only black man they had ever seen on that ward with scrubs on was an orderly, so why should they think anything different?

Finishing his residency in neurosurgery, he decided to focus his medical career on children.

Pediatric neurosurgery became fascinating to me … With children, what you see is what you get. You couple that with the fact that I like to do complex things. You can sit there and you can do these enormously complex operations on old people, and it might be successful, and your reward is they live for five years. Whereas with a kid, you do this incredibly complex thing and your reward may be 50, 60 or 70 years. So I like to get a big return on my investment. So, I'd rather go with the kids.

Performing neurosurgical procedures on children is more complex because they are smaller and can’t tolerate the blood loss. On the other hand children have more plasticity than adults – i.e. their neurons haven’t all decided what they want to do when they grow up – so children tolerate radical procedures better. Blessed with extraordinary hand-eye coordination and three-dimensional reasoning skills, Carson revived the practice of hemispherectomies in which half of a child’s brain is removed to correct intractable seizures. Because children can reprogram their brains in order to ambulate and use their limbs, most can lead seizure-free normal lives.

In 1987, Carson made medical history by being the first surgeon to successfully separate German twins conjoined at the back of their Janus-like heads. Normally, one of the twins must be sacrificed to save the other. The parents begged him not to require them to choose which twin would die. But Carson had studied the use of hypothermic arrest which prevented blood loss in surgical procedures on baby hearts. So he applied the technique to separate these twins. In order to perform the procedure, he trained and led a 70-member surgical team which worked for 22 hours. A dramatic scene in the movie, Gifted Hands, occurs when Carson comes out of the surgery to meet the anxious parents and asks them which twin they wanted to hold first.

Ben Carson became the Director of Pediatric Neurosurgery at age 33, the youngest major division director in Johns Hopkins history. He is Co-Director of The Johns Hopkins Craniofacial Center. In 1994 he and his wife started the Carson Scholars Fund, a foundation that awards $1,000 college scholarships to students in grades 4 through 11 who excel academically and serve their communities.

While Carson’s surgical workload averaged around 500 procedures annually, as his popularity grew and he accepted more speaking engagements, he had to “cut back” to about 350 surgeries per year.

If you haven’t heard Ben Carson’s National Prayer Breakfast speech, this link will take you to the YouTube video of it. It’s been viewed by over 2.3 million people. He talks a good deal in the first half of his speech about the self-censorship that political correctness causes before getting to the remarks that, judging from his body language, displeased Obama.

Our debt situation …

I’m not politically correct, so I’m sorry, but you know – our deficit is a big problem. Think about it. And our national debt – $16.5 trillion dollars – you think that’s not a lot of money? I’ll tell you what! Count one number per second, which you can’t even do because once you get to a thousand it will take you longer than a second, but…one number per second. You know how long it would take you to count to 16 trillion? 507,000 years – more than a half a million years to get there. We have to deal with this.

Flat taxes …

What about our taxation system? So complex there is no one who can possibly comply with every jot and tittle of our tax system. If I wanted to get you, I could get you on a tax issue. That doesn’t make any sense. What we need to do is come up with something that is simple.

When I pick up my Bible, you know what I see? I see the fairest individual in the Universe, God, and he’s given us a system. It’s called tithe. Now we don’t necessarily have to do 10% but … [God] didn’t say, if your crops fail, don’t give me any tithes. He didn’t say if you have a bumper crop give me triple tithes. So there must be something inherently fair about proportionality. You make $10 billion dollars you put in a billion. You make $10 you put in $1 – of course, you gotta’ get rid of the loopholes, but now some people say, that’s not fair because it doesn’t hurt the guy who made $10 billion dollars as much as the guy who made $10. Where does it say you have to hurt the guy? He’s just put in a billion in the pot. We don’t need to hurt him.

And healthcare savings accounts …

We’ve already started down the path to solving one of the other big problems, healthcare. We need to have good healthcare for everybody … but we’ve got to figure out efficient ways to do it. We spend a lot of money on healthcare, twice as much per capita as anybody in else in the world, and yet not very efficient. What can we do?

Here’s my solution. When a person is born, give him a birth certificate, an electronic medical record, and a health savings account (HSA) to which money can be contributed, pre-tax from the time you are born, to the time you die. When you die, you can pass it on to your family members so that when you’re 85 years old and you’ve got six diseases, you’re not trying to spend everything. You’re happy to pass it on and nobody is talking about death panels. That’s number one.

For the people who are indigent, who don’t have any money, we can make contributions to their HSA each month because we have this huge pot of money … instead of sending it to bureaucracy – let’s put it into HSAs. Now they have some control over their own healthcare and what do you think they’re going to do? They’re going to learn very quickly how to be responsible. When Mr. Jones gets that diabetic foot ulcer, he’s not going to the emergency room and blowing a big chunk of it. He’s going to go to the clinic. He learns that very quickly – gets the same treatment. In the clinic they say, now let’s get your diabetes under control so that you’re not back here in three weeks with another problem. That’s how we begin to solve these kinds of problems.

A self-made black conservative pediatric neurosurgeon lectured an establishment black liberal politician on Bible-based fairness and commonsense last month. For once, Obama apologists couldn’t cry racism.

Ben Carson just announced he will retire from performing surgery in June. He will continue to teach surgery at Johns Hopkins.

Ben and his wife, Candy, he met and married while they attended Yale. Candy has an MBA. Ben’s mother lives with them in Baltimore.

Curtis is an engineer living in Georgia.

Saturday, January 12, 2013

Red Zone "Cliff" Politics

Nothing, it seems, is easier to roll than Republicans.

Ronald Reagan agreed in 1982 to increase taxes $1 for every $3 in reduced spending. Taxes went up but spending reductions never happened. In fact spending had increased by the time Reagan left office. His successor Bush 41 violated his famous promise to read his lips because there would be no new taxes. Seduced by Democrat pledges, he bought into a scam to reduce spending by $2 for every $1 tax increase. The taxes were real and the cuts weren’t – which cost him conservative votes for a second term.

The latest log-rolling happened last week when Speaker John Boehner brought a Senate-crafted bill to the floor of the House for a vote. Laughably named The American Tax Payer Relief Act and larded with spending goodies for Obama’s cronies, enough Republicans joined Democrats to pass the measure which reduced spending $1 for every $41 in increased taxes. In the first year the $40 billion in crony pork will consume two-thirds of the additional taxes and it will add $4 trillion in new spending over the next decade. The media-created “fiscal cliff” was averted, therefore, with almost no spending reductions in return for tax increases whose only contribution to solving the nation’s debt crisis is symbolic.

The economic problems that this country faces were caused the same way that the economic problems of Italy, Spain, Greece, and Japan – excessive spending. History has shown that regardless of the US marginal tax rate, tax receipts as a percent of GDP have fluctuated in a narrow range since World War II around 19.5% – a phenomenon named Hauser’s Law. Why? Because people who pay most of the taxes are well enough off that they can minimize or avoid having to pay their bills with taxable ordinary income. Ask Warren Buffett who brags about it.

Given the reality of Hauser’s Law, spending should also equal 19.5% of GDP to avoid deficits that pile up in the form of our national debt. Instead, spending increased during the first Obama administration from 21% to 24% of GDP, adding $5 trillion to the national debt, which now stands at $16.4 trillion. Budget deficits – spending in excess of tax receipts – are projected to increase that figure to over $20 trillion by the end of Obama’s second term unless something is done about spending.

The deal signed last week will transfer more than $600 billion from the private sector to government over the next ten years. Since it didn’t reduce spending, Obama’s lofty goal of reducing the national debt by $4 trillion can’t be achieved. That can got kicked down the road two more months when on March 1 sequestration will cause $110 billion in automatic across-the-board military and domestic spending cuts to happen unless Congress and Obama agree to a more sensible spending solution.

Moreover, on or before March 27 Congress must pass a budget – something the House has done but the Senate has blocked for three years. Without a budget Congress must again perform the continuing resolution kabuki dance, allowing government operations to continue at the level of the last budget that was approved by both chambers.

But before those two events – sometime in late February – the debt ceiling will have to be increased. It remains to be seen if this confrontation will resemble the ancient gladiatorial fights in the Roman coliseum or modern day professional wrestling. That depends on the Republican leaders, who can be rolled faster than a marijuana joint. Technically, however, the government has already exceeded the debt ceiling and between now and then can only legally borrow to replace maturing debt and must defer paying its bills.

The clash of the Titans – or midgets against Megatron, if you esteem you the Republican leadership as I do – was created in August 2011 when those debt ceiling and continuing resolution stare-downs occurred. During the more than 500 days since then, Obama’s ideological intransigence has prevented a resolution of the spending crisis. And during those 500 days over $2 trillion has been added to the national debt at a clip of about $4 billion per day.

With Obama’s reelection and the fact that Democrats gained seats in the Senate and House, Obama believed he got a mandate to raise taxes on the “rich” but not a mandate compelling spending cuts. A Pew poll released Monday showed that four out of five Americans disapproved of the way the Republican leadership handled the cliff crisis – a data point that will likely bear heavily on their willingness to take hostages in the next round of fighting, not to mention shooting them.

Looking back to the Clinton and Bush 43 administrations, the government borrowed an average of 7.5% of what it spent and government spending averaged 19.9% of the GDP. In the four years of the first Obama administration, the government borrowed an average of 37.2% of what it spent and government spending averaged 24.4% of GDP. This year, the Obama spending spree promises to continue an unbroken string of five years’ of trillion deficits. Deficits add to the national debt, which now exceeds the GDP – i.e. the value of all goods and services this country produces. That’s like having a credit card balance that exceeds your income. You’ll never pay it off unless you stop charging.

By increasing taxes on “the rich” Obama has made this situation worse. Like it or not “the rich” are the job creators. They have more discretionary income and spending it creates jobs. The investments they make create jobs. People with money can afford to take risks, which include losing that money, something people who aren’t “rich” can’t do. There are trillions of dollars sitting on the sidelines because of Obama’s anti-business, anti-rich rhetoric that, over the past four years, could have been creating consumer demand which in turn creates jobs.

Over almost any historic period the net new job growth in this country has been due to small business. Obama's claim that 97% of small business owners would be untouched by higher taxes is sheer folly. The 3% who will pay higher taxes on business profits, which are taxed as ordinary income, employ 54% of the total private workforce in the country.

Without net new jobs, a large percentage of our workforce, which grows every year, can’t be employed. The economy stagnates and the debt/GDP percentage grows, causing even slower growth. Obama is stuck on stupid when he talks about returning taxes to Clinton era levels. Under Obama we don’t have a Clinton era economy. We have a Carter era economy. Nobody wins with higher taxes, especially in this economy. Obama has chosen to ignore historic economic behavior – that what is rewarded (lower taxes on incomes and profits) gets produced in larger amounts (jobs and tax receipts.) What is penalized (higher taxes on incomes and profits) will be diminished, delayed, or diverted.

A case in point. Remember the famous luxury tax – one of the taxes that cost Bush 41 a second term? Ah, yes. The geniuses in Washington decided to tax yachts, planes, furs, jewelry – the toys only the rich buy. Think of all the money that would flow into government coffers … and the middle class would be unaffected. Well, the rich are rich, not dumb, and they stopped buying those highly-taxed goods, which not only cost Washington its expected tax windfall, but also cost the jobs of 330 high-end jewelers, 1,470 aircraft builders, and 7,600 boat builders, according to government number-crunchers. The unemployment benefits paid to those who lost jobs cost the government (that’s all of us) over $24 million, not to mention the loss of income taxes that would have been paid if these people hadn’t been thrown out of work by their government.

We can’t tax our way out of a spending problem. Even a 100% tax on the income of millionaires and billionaires is insufficient to cover the budget deficit, not to mention the trick of getting these people to work and hand over their entire income to the government. If the government could seize their entire wealth – all of their savings and investments – that would amount to about $11 trillion. The national debt is over $16 trillion. Democrats have tossed around the idea of nationalizing all private retirement accounts of all Americans and replacing them with a government-run retirement system. Argentina did it. It wrecked their economy. And it would wreck ours too assuming Obama could get around the constitutional problems.

We can’t grow our way out of a spending problem. The two are antithetical. The more money that is diverted out of the private sector and into the public sector, the more sluggish economic and job growth becomes, as Obama has so ably shown in the past four years with his historically high borrowing, historically high spending as a percentage of GDP, and historically high unemployment. Government cannot create jobs. Government cannot allocate capital efficiently. Keynesian economics is a fraud. Government is a drag on private enterprise, although admittedly a necessary evil. The best amount of government is the least amount of government needed to provide public services and national defense.
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The only real alternative to living on a fiscal cliff is to reduce spending. The primary objective in managing spending must be to eliminate the annual deficits as soon as possible thereby avoiding adding to our mounting debt. After eliminating deficits, spending must be further reduced to generate surpluses that can pay down the national debt. Neither of these goals can be achieved through taxation without wrecking the economy, which will make the debt problem worse.

Spending cuts won’t be easy. The present generation of Americans has become addicted to having government goodies that they don’t pay for in current taxes. Instead, they put them on the government credit card (the national debt) and hope the next generation and the unborn (and politically unrepresented) generations can pay for them. Otherwise, it’s not the current generations’ concern.

Politicians, more worried about their jobs than the problems they were elected to solve, will wring their hands and posture for their constituencies, convincing them that cuts deep enough to eliminate deficits and create surpluses are impossible. Well, if cuts can’t be made, get ready for the economy to crash and burn.

Never happen, you say? Well, worry about this as you go to sleep tonight.

The Federal Reserve is keeping interest rates at artificially low rates. Short term interest is almost zero. This keeps interest payments on the national debt low. It also penalizes savers and people who depend on interest for income, some of whom are pushed into welfare assistance. Low interest normally encourages business expansion, which is potentially inflationary, but our slow growth economy and historically high unemployment mitigates inflation risk. The world is an economic mess right now so there isn’t a lot of competition for capital, slowing down capital mobility and further keeping a lid on interest rates. While there are conflicts around the world, none are explosive, so capital markets are relatively stable. Most important, the credit rating agencies have let the US roam on a long leash, although they have been getting nervous watching Obama pile up debt.

The US is very fortunate to have all of these conditions occur concurrently.

With our debt situation in uncharted territory, any of these factors could change literally overnight causing a chain reaction leading to a rush for the doors. While China is the largest foreign buyer of US debt, the biggest owner of debt is the US – about one-third held by the Federal Reserve and the rest held by the public. Anything that would make US debt less attractive would increase the interest rate payable – assuming bonds could be sold at some price. It would also cause debt holders to dump bonds. That and other things that could push up interest rates would increase our deficit astronomically, depending on how high interest rose. Currently, interest payments are about 6% of government spending. Think of the impact of doubling or tripling interest rates.

Standard & Poor’s downgraded US debt in August 2011 when Congress failed to resolve that fiscal crisis. Moody's, another credit rating service, has warned that the January fiscal cliff resolution wasn’t sufficient. If Congress doesn’t get its deficit and debt management going in the right direction in the coming showdowns, it risks a downgrade by Moody’s. This would make US debt securities less attractive. It could also trigger a sell-off panic which would make financing the deficit and redeeming debt maturities very, very difficult. A US debt default could bring down the world economy.

How likely is a US debt dump and a stampede for the exits? The risk is real and every American should be worried about it happening. We’re in the red zone with all the warning lights blinking. But we can reduce that risk by getting spending under control.

I’ll talk about that in next week’s blog.