QE3 Will Further Destroy U.S. Dollar

Originally posted at FreedomWorks.org.

Speculation has risen that Fed chairman Ben Bernanke may announce yet around round of quantitative easing or QE3 on Friday. As economist Thomas Sowell says, “when people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don’t want us to understand.” The term quantitative easing in layman’s terms just means that the Fed will print more money out of thin air. What could possibly go wrong? Well, for starters, the value of the U.S. dollar will continue to decline and it could set the stage for hyper-inflation.

Of course, the first two rounds of quantitative easing have failed miserably to stabilize the economy. This should have signaled that pumping new money into the economy is just not the solution. But Fed officials who have refused to accept reality continue to run the printing processes on overtime. After QE3 fails—and it will—we might as well expect to see QE4, QE5 and so on until the dollar is literally worthless.

The actions of the Federal Reserve have a dramatic impact on the lives of every single American. The central bank essentially controls the value of the money that we have in our pockets. QE1 and QE2 can be blamed in large part for the skyrocketing price of food at the grocery store. The same supply and demand rules apply to money. The more dollars we have in the circulation, the less valuable the money becomes. The Fed is a main reason why it’s costing us more dollars to fill up our gas tank nowadays.

For decades, Rep. Ron Paul (R-Texas) was the lone voice in Washington speaking out against the Federal Reserve. He writes that “the inflation tax, while largely ignored, hurts middle-class and low-income Americans the most. Simply put, printing money… dilutes the value of the dollar, which causes higher prices for goods and services. Inflation may be an indirect tax, but it is very real — the individuals who suffer most from cost of living increases certainly pay a ‘tax.’” QE1, QE2 and QE3 are nothing more than stealing wealth from the people through the hidden tax of inflation.

Our Founding Fathers would surely be outraged by the existence of the Fed. These great men believed in a limited government that was held accountable to the people. The Federal Reserve, which is generally regarded as a quasi-governmental entity, has less oversight than even the Central Intelligence Agency (CIA). The most powerful central bank in the world makes all of its decisions without even a single vote from our elected representatives in Congress.

You can bet that the Fed is up to no good behind closed doors. Due to a provision under the misguided Dodd-Frank financial overhaul law, the Government Accountability Office (GAO) conducted a one-time, watered-down audit of the central bank back in July. It gave the American people their first peek into the central bank’s books but prevented investigators from peering into their deliberations on interest rates and the most crucial transactions of the Fed. We still need to pass a true audit the Fed bill like Ron Paul’s Federal Reserve Transparency Act of 2011 that would require comprehensive audits on a regular basis.

The first ever audit revealed that the central bank “loaned” out $16 trillion at a zero percent interest rate to corporations and banks around the world during the height of the financial crisis. To put that number into perspective, the Gross Domestic Product (GDP)—the value of all economic activity within a country— of the United States is only $14.12 trillion. It’s no wonder that the Fed is desperately trying to protect their privileged secrecy.

The Fed used to be the giant elephant in the room that nearly everyone ignored. We can see the political tide shifting since it has suddenly become popular to criticize the Fed. I have a strong feeling that the rise of the Ron Paul phenomenon has something to do with it. The author of the book End the Fed just might be onto something. A true audit is the first step to letting the American people know what’s going on with their money. The next step is to abolish the Federal Reserve System.

Obama is George W. Bush on Steroids

It makes no sense to love Obama but hate George W. Bush (or vice versa). My new video:

Treasury Secretary Timothy Geithner Deserves to be Fired

Originally posted at FreedomWorks.org.

To put it mildly, Treasury Secretary Timothy Geithner has a miserable track record. His fingerprints are all over the current fiscal disaster. Geithner has been grossly wrong on everything from the bank bailouts to the trillion-dollar “stimulus” plans. Under his watch, the U.S. credit rating was recently downgraded from AAA to AA+. He has had a direct role in bailing out the auto industry and spendthrift nations such as Greece, Ireland and Portugal with U.S. taxpayers’ dollars through the International Monetary Fund (IMF). The dynamic duo of Ben Bernanke and Tim Geithner wrongly thought that simply printing more money could get out of this mess. Geithner should immediately resign or President Obama should kick him out of cabinet position. Either situation is a win for the American economy.

Senator Rand Paul (R-Ky.) and Rep. Connie Mack (R-Fla.) have recently announced their intention to introduce a vote of no confidence in the Treasury Secretary. According to Sen. Paul, “the stock market gave a vote of no confidence to Timothy Geithner yesterday and for the past 11 days. Geithner has shown no acumen in predicting, diagnosing, or treating America’s economic woes. The time has come for him to resign.” Similar calls for Geithner to resign have been echoed by House Speaker John Boehner, Sen. Jim DeMint (R-S.C.) and other prominent members of Congress. It seems like Geithner is an unpopular figure in Washington as well as the rest of the nation.

A congressional vote of no confidence against Geithner will send a strong message to President Obama. With the Labor Department’s unemployment rate still over 9 percent — the real unemployment rate is likely significantly higher— and inflation running rampant, it’s hard to believe that anyone could possibly have any confidence in Geithner whose job is to manage the nation’s finances. Just a few months ago, Geithner said that there was “no risk” of the U.S. losing its AAA ratings. You might even remember his New York Times article titled “Welcome to the Recovery” back in August 2010. Real recovery is still nowhere in sight a year later.

Anyone who believes we’re on the right path to economic recovery might be living under a rock. In a recent NBC interview, Timothy Geithner criticized S&P’s decision to downgrade the U.S. credit rating by saying, “S&P has shown really terrible judgment and they’ve handled themselves very poorly…They’ve shown a stunning lack of knowledge about basic U.S. fiscal budget math.” But the truth is that it’s odd that S&P didn’t downgrade our top-tier credit rating a long time ago. The United States, the world’s largest debtor nation, is over $14.5 trillion in debt. It’s maddening that the Obama administration has the nerve to question S&P’s knowledge on fiscal budget math when the U.S. deficit and debt are at all-time highs.

Timothy Geithner has shown himself incapable of facing economic reality. Noted investor and firm believer in Austrian economics Jim Rogers recently said, “it seems to me it’s physically, humanly impossible for the U.S. to ever pay off its debt. They can roll it over and continue to play the charade, but the U.S. is bankrupt.” Unlike Geithner, Jim Rogers was one of the few to predict the current financial crisis.

The former New York Federal Reserve Chairman has no shortage of scandals. Geithner played a key role in the over $170 billion taxpayer bailout of American International Group (AIG) during the height of the financial crisis. The multinational insurance giant used a significant chunk of the money to pay bonuses to executives despite the fact that the money-losing company was severely mismanaged. It was revealed that Geithner even urged AIG executives to keep quiet about the $105 billion of payments made to banks, which AIG had insured against losses, including Goldman Sachs and Deutsche Bank. Geithner surely didn’t want taxpayers to know that their hard-earned money went to bankers who made bad investment decisions.

Tim Geithner has zero credibility in diagnosing and solving our current economic woes. He is determined to maintain the same failed status quo policies. Someone who has a clue about the economic situation we face would be preferable to Tim Geithner. He’s got to go—for the sake of our future prosperity.

Monetary Policy Failure: Forty Years of Fiat Currency

Originally posted at FreedomWorks.org. The anniversary was yesterday August 15th, this post is a day late.

On this day 40 years ago, former President Richard Nixon suspended the convertibility of the U.S. dollar into gold. The decision, which radically changed the global monetary system, still holds enormous ramifications for every single American today. The money in our pockets would be worth more if Nixon hadn’t cut the link between U.S. dollars and gold.

The correct history of the gold standard is generally avoided in the typical history classroom. It’s important to note that we never had a free market gold standard in the nineteenth or early twentieth century. As economist Gary North notes, “what Nixon destroyed was called the gold-exchange standard.” A free market gold standard, which I personally advocate, would mean a separation of money from state. While the gold-exchange standard was far from that, it is still preferable to our current fiat monetary system.

During the aftermath of WWII, the Bretton Woods system was established, tying international finance to the gold-backed U.S. dollar. The unconstitutional International Monetary Fund (IMF) was then created as a source of funds for countries having a balance of payments problem. By the early 1970s, the United States was running a balance-of-payments deficit due to a massive surge in government spending. The U.S. government couldn’t afford to pay for the costly Vietnam War and President Johnson’s Great Society Programs. The gold in Fort Knox was quickly disappearing as government spending rose to then unprecedented levels.

It’s clear why politicians are no fan of the gold standard. As The Telegraph’s Edmund Conway writes “the main difference with fiat money is that whereas under the gold standard it was all too obvious when politicians were spending beyond their means (they would simply run out of gold reserves).” Richard Nixon who should have made an effort to dramatically cut government spending decided to make a colossal monetary error. When he cut the link between the U.S. dollar and gold on August 15, 1971, the Bretton Woods System officially ended and the U.S. dollar became a fully fiat currency backed by absolutely nothing. With the Bretton Woods System dead, there was no justification for the IMF to continue but it did. Today, it is merely an international bailout fund that should the United States should immediately withdraw from.

Our economy has been remarkably instable for the past 40 years. We’ve since experienced periods of stagflation and recessions. Jordi Franch writes at Mises.org that, “with the burial of the last vestiges of the gold — that “barbarous relic” of the past, in Keynes’s words — the annoying limitation on the creation of money and credit was broken.” Pegging the U.S. dollar to gold put a restraint on the government’s ability to create an infinite supply of money.

Just as our Founding Fathers understood, it’s dangerous to give government unchecked power. Detlev Schlichter writes in the Wall Street Journal Europe that “U.S. President Richard Nixon closed the gold window and ushered in the first time in human history, a global system of unconstrained paper money under full control of the state.” Unfortunately, unelected bureaucrats at the Federal Reserve now have the power to create as much money as they want out of thin air.

It’s surprising that we have managed to survive four decades with a currency backed by only the government’s promise. History has proved that all fiat currencies eventually fail, with an average life expectancy of just 27 years. As Detlev Schlichter explains, “complete paper money systems are always creations of the state, never the outcome of private initiative or the free market. All paper money systems in history have, after some time, experienced growing financial instabilities, economic volatility, and an accelerating decline in money’s purchasing power. All of them ultimately failed.”

It’s difficult to predict how much longer the dollar will survive but things aren’t looking too promising. The price of gold, which is essentially a reflection of the dollar’s weakness, has risen to all-time highs. It has risen from below $40 per ounce in the 1970s to a whopping $1,740 today. Today, the dollar is worth less than 20 cents compared to the stronger pre-Nixon dollar.

Our monetary policy is deeply flawed. The fiat dollar is what lies at the heart of our economic woes. The Federal Reserve is essentially the institution that makes all of the recent bailouts possible. It’s quite simple for them to print more money to bail out their friends. If history is any indication, our fiat money system will ultimately collapse. With inflation running rampant—it’s anyone’s guess how much longer it will last. We must return to sound money before it’s too late.

Rick Perry is NOT a Conservative

New video I did on Rick Perry’s record. Not trying to tell you who to vote for– just know all the facts on all the candidates’ records before you do.

Big Spenders in Washington—Not Tea Party— to Blame for Credit Downgrade

Originally posted at FreedomWorks.org. 

Lots of finger pointing has occurred following the first-ever downgrade of the United States credit rating last week. Numerous political figures, including Sen. Kerry (D-Mass.) and the Obama administration’s former chief advisor David Axelrod, blame the Tea Party for the Standards and Poor’s (S&P) downgrading the U.S. credit rating from AAA to AA+. Some media talking heads have even dubbed it the “Tea Party Downgrade.” The truth, however, tells an entirely different story. Big spenders in Washington must face the facts that the American people have awoken and the party is over.

One day fiscal conservatives are being called “terrorists” and the next we’re being blamed for the country’s economic woes. These blame games are deliberate tactics to distract from the real issue at hand. Spendthrift politicians would much rather spread deceitful talking points than take responsibility for their actions. As columnist Jack Hunter says “it’s like blaming my bad 6th grade report card on report cards.” The failure of politicians to face economic reality is exactly why we’re in this fiscal mess in the first place.

Over the past century, we’ve faced growing deficits and mounting debt. The national debt has gone up nearly every year regardless of the political party in control. You cannot tell me with a straight face that the roughly three-year-old Tea Party is to blame for the credit downgrade. Our credit downgrade has been a long time coming. A few months ago, famed investor Jim Rogers said, “America should already be downgraded. It should have been downgraded years ago. These people, the rating agencies, have got it wrong for 10-15 years now. America is bankrupt”. He now says that our AA+ credit rating is still far higher than we deserve.

The Obama administration has the nerve to question the S&P’s math. The U.S. Treasury Department said that there was “no justifiable rationale” to downgrade the nation’s credit rating. Here’s a reality check: the United States is the largest debtor nation in the history of the world. Even the largest foreign holder of U.S. debt, China, says that we are “addicted to debt.” The communist country’s state-run news agency Xinhua stated in a commentary, “the U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone.” Perhaps theChinese government should also follow its own sound advice.

The rating agency S&P warned us that we would be facing a credit downgrade unless Washington reduced deficit spending by $4 trillion over the next ten years. As the S&P explained in April, “while we’re mindful that the President and Congress are beginning to focus on some type of agreement and may possibly even have a broad understanding about the scale of a fiscal adjustment—roughly $4 trillion… We think—given the division of opinion between Democrats and Republicans—that will be very difficult to achieve over the next two years.” A $4 trillion cut or “fiscal adjustment” is barely anything when put into perspective. We face an over $1.6 trillion deficit this year alone.

The Obama administration actually rejected Tea Party backed legislation such asCut, Cap and Balance which included enough spending cuts to prevent a downgrade in our credit rating. They chose to ignore the warnings and instead pushed for a debt-ceiling hike with no substantial cuts. The Obama-Boehner debt-ceiling deal offers no actual cuts—it only means that spending may increase less fast later on. S&P downgraded the U.S. credit rating just three days after the Obama-Boehner compromise was signed into law.

The price of gold is skyrocketing while the Obama administration desperately searches for someone else to blame. But it is the Obama administration, not the Tea Party, that has added $4.3 trillion to the national debt. Our mission is to restore fiscal sanity to Washington. As Sen. Rand Paul (R-Ky.) says, blaming the Tea Party for the credit downgrade is “like blaming the fire fighters for the fire.”

Tea Party Stood Strong During Debt-Ceiling Debate

Well, we didn’t get everything we wanted that’s for sure. Did I expect to? Not so much. But I wanted to applaud all those who stood strong throughout the debate. “Conservative” organizations were calling us a bunch of purists who lived in a fantasy world for not supporting Boehner’s plan. Please.

Originally posted at Freedomworks.org.

The so-called historic debt-ceiling deal passed the Senate 74-26 yesterday and quickly landed on President Obama’s desk. He immediately signed the lousy compromise to raise the debt ceiling by $900 billion. The past few weeks have been filled with numerous lies and scare tactics. One of the most troubling aspects of the debt-ceiling debate fiasco is the definition of the word “cuts.” Washington’s fuzzy math calculator shows that things aren’t always what they seem.

The American people are told that the debt-ceiling deal will cut $917 billion in spending over a ten year period. What exactly are we cutting? Well, nothing really. The Congressional Budget Office (CBO) has a baseline that predicts what would happen over the next decade given current projections of taxation and spending. Government spending is going up at about 7 percent a year. Rather than cutting $917 billion from current amounts being spent, the compromise will just mean spending may increase less fast later on. As Cato Institute scholar Chris Edwards states, “spending isn’t being cut at all. The ‘cuts’ in the deal are only cuts from the CBO ‘baseline’, which is a Washington construct of ever-rising spending.”

It’s important to remember that these are promised “cuts” and nothing is stopping a future Congress from simply disregarding them. Discretionary spending “cuts” against a bloated CBO baseline are essentially meaningless since Congress can force the federal agency to increase its “baseline” spending. As Sen. Rand Paul (R-Ky.) says, “if we froze spending, if we didn’t spend any more money next year than we did this year and we did it for ten years, Washington would count that as a $9.5 trillion cut. Why? Because we’re going to add $9.5 trillion to the debt over the next ten years. So when they tell you that they’re going to cut $1 trillion, it’s from proposed increases in the debt. It isn’t meaningful.”

In the real world, cutting spending and increasing spending at a slightly slower rate in the future are two very different things. Washington is still going to spend more next year than we did this year. As any financial planner will tell you, anyone who is in massive debt shouldn’t increase their spending at all—let alone promise to increase their current level spending less fast over an extended period of time. This kind of reckless behavior is why our AAA credit rating is likely to drop in the near future. The chart below shows how total spending under the debt deal will change if all of the spending “cuts” come to fruition:

If you’re anything like me, you’re disappointed in the debt deal but didn’t have too high expectations to begin with. The debt ceiling deal surely doesn’t go far enough to curtail government spending but we have reasons to be optimistic. Just a couple months ago, President Obama was expecting to get a simple debt ceiling increase with no strings attached which had been the standard procedure in Washington for some time. We didn’t let that happen. We stood by our principles by calling out Speaker Boehner when he was wrong.

The Tea Party has begun to change the debate in Washington which is no easy task. We have made it known that we will put up a fight every time they attempt to raise the debt ceiling. We have tons of work to do but we have to take it one step at a time. The next phase is changing out more Congressmen next election cycle. The reality is we won’t be able to get our major policy changes without a fiscally conservative President and Senate. We need more elected representatives like Justin Amash, Ron Paul, Rand Paul and Mike Lee who take their oath to uphold the Constitution seriously.

Washington needs real solutions to get its fiscal house in order. One modest plan is the Rep. Connie Mack’s “Penny Plan” that would balance the federal budget by cutting spending by one percent each year for six consecutive fiscal years. The far from radical plan would require government to cut just one penny out of every dollar it spends. Unlike the debt-ceiling deal, the penny plan would cut real spending—not anticipated spending off a phony baseline.

The Tea Party drove the debt-ceiling debate. Even though we face a Democratic-controlled Senate and White House, the Tea Party was a central player who managed to control the narrative. Even Sen. McConnell (R-Ky.) admits that Congress wouldn’t have had such a debt-ceiling debate without the Tea Party. Now it’s time to push for real spending cuts while helping to elect fiscal conservatives who can make it happen.

Repeal it: Dodd-Frank Entrenches Crony Capitalism

Originally posted at FreedomWorks.org.

The Dodd-Frank financial overhaul law—also known as the “Federal Reserve Empowerment Law”—recently marked its first anniversary. Last summer, we fought this unconstitutional power grab tooth and nail. The lead sponsors of the bill Rep. Frank (D-Mass.) and former Sen. Dodd (D-Conn.) claimed that the 2,300-page bill would end “too big to fail.” But as we noted last July, “the financial overhaul bill sets the stage for future financial meltdowns.” Dodd-Frank has stifled job growth while doing absolutely nothing to rein in key instigators of the current economic fiasco.

Dodd-Frank has granted the federal government unprecedented regulatory powers. Economic writer and real estate investor Jeff Harding says that “the new financial overhaul bill is the greatest government takeover of the financial sector of the economy since the National Recovery Act of 1933 when Franklin Roosevelt attempted to introduce central planning in America.” It will eventually create at least 17 new bureaucracies with powers to regulate small businesses and consumers including the so-called Consumer Financial Protection Bureau.

The Dodd-Frank law even grants a federal bureaucracy the authority to monitor every single consumer transaction including credit card purchases. Despite the fact that the Federal Reserve was to a large degree responsible for the present financial mess, Dodd-Frank illogically makes them a primary financial regulator. The new financial regulation law will not prevent another fiscal crisis but it may be responsible for one.

Instead of allowing free-market mechanisms to set the right incentives for banks to make prudent lending decisions —where those who may profit are also the ones who will pay the cost of their own failure—the law sends the wrong message. It institutionalizes moral hazard by giving banks an incentive to partake in risky and high-reward lending choices. The market will reward banks if they succeed but taxpayers are forced to foot the bill if they fail. It’s a win-win scenario for banks.

The government sponsored enterprise (GSEs) Fannie Mae and Freddie Mac also played a major role in the financial crisis. Fannie and Freddie are entities created by the federal government to make and guarantee mortgage loans. These mortgage giants are a classic example of crony capitalism, where big government and business get in bed together. Frostburg State University economics professor William Anderson states that “in a free market, there would be nothing like these entities, or if something like them existed, there would be no guarantee that losses would be covered by taxpayers.” Instead of ending taxpayer support from the house GSEs, the Dodd-Frank financial overhaul law will continue to allow them to function without consequences.

Austrian economists predicted the housing market crash long before 2008. During a House Financial Services Committee meeting on September 10, 2003, Rep. Ron Paul (R-Texas) asserted that Fannie and Freddie distortions in the housing market would lead to an inevitable housing bubble burst in the near future. He concluded his speech with these words, “Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market.” Wouldn’t we be better off if we listened to Ron Paul’s advice in the first place?

Do you know who didn’t see the financial crisis coming? (Or at least didn’t publicly acknowledge a problem?) Chris Dodd and Barney Frank. Time and time again Dodd and Frank denied that a housing burst was on the horizon. In a 2003 hearing, Barney Frank said that “I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. . . . I do not think at this point there is a problem with a threat to the Treasury.” We shouldn’t trust the same politicians who got us into this mess to show us the way out.

Both Chris Dodd and Barney Frank have serious conflict of interests with Fannie Mae and Freddie Mac. As a Boston Globe headline reads, “Frank’s fingerprints are all over the financial fiasco.” Throughout the 1990’s, Barney Frank had a romantic relationship with Herb Moses, an executive at Fannie Mae lobbying for relaxed lending restrictions. Moses worked at the GSE for seven years, while Frank was on the Housing Banking Committee, which had jurisdiction over Fannie Mae.

As you may have already predicted, Barney Frank spent years blocking efforts to impose tougher regulations on Fannie Mae and Freddie Mac. As Fox News reports, “In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.” These loose lending programs help lead to the financial meltdown. Barney Frank claims that his close relationship with Moses was not a conflict of interest but common sense says otherwise.

Chris Dodd took generous bribes from politically connected banks. In 2008, Countrywide Financial, a major beneficiary of the Fannie and Freddie’s loan programs, and its Chief Executive, Angelo Mozilo were finally busted for loaning at lower than market rates to key politicians involved with regulation and oversight of Countrywide Financial through a group called the “Friends of Angelo.” Senate Committee on Banking, Housing and Urban Affairs member Chris Dodd received $780,000 in loans below the market rate of interest. Whose side do you think this guy is on? The taxpayers or the big banks?

The underlying belief behind the Dodd-Frank financial overhaul law is that the free market is to blame for the financial crisis. Barney Frank has foolishly said that “the private sector got us into this mess. The government has to get us out of it.” The free market has not failed since we’ve never had free market capitalism. Neither the Federal Reserve nor government sponsored enterprises would exist in a true free market society.

The current financial mess is not a result of too little government regulation, but too much. Henry Hazlitt once wrote that “worse than the slump itself may be the public delusion that the slump has been caused, not by the previous inflation, but by the inherent defects of ‘capitalism.’” Dodd-Frank is a misguided approach that will stifle economic growth while infringing on personal liberty. We must repeal the Dodd-Frank Act and end all taxpayer support of government sponsored enterprises.

Unintended Consequences of ObamaCare Keep Rolling In

Originally posted at FreedomWorks.org.

The “pesky” law of unintended consequences strikes again. Do you remember when President Obama said “if you like your health care plan, you can keep it”? Just as we expected, ObamaCare will not live up to its grand promises. According to a recent National Federation of Independent Business (NFIB) report, one in eight small businesses have had or expect to have their health insurance plans terminated since the passage of ObamaCare in March 2010. This is likely just the tip of the iceberg since the 2,801-page health care takeover law will not be fully implemented until 2014.

The unintended consequences of ObamaCare keep rolling in. Insurance prices are skyrocketing, major health insurers have stopped offering child-only policies and we may soon be facing a huge doctor shortage. It comes as no big surprise that health care law will end up costing more than originally thought. A new report from Cornell economist Richard Burkhauser and his colleagues warns that ObamaCare could cost at least $50 billion more per year than previous Congressional Budget Office (CBO) estimates.

Government has an extensive history of under-calculating the long-term cost of legislation. For example, in 1967, House Ways and Means predicted that Medicare would cost $12 billion in 1990. The actual spending in 1990 was $110 billion. Medicare now costs taxpayers over $314 billion annually. In the case of Medicare, the government estimate was off by over 816 percent. How wrong was the CBO on the cost of ObamaCare? I’d rather not find out.

Many politicians seem to believe that they can repeal the laws of economics. As economist Thomas Sowell says, “the first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” Most government policies actually worsen the exact same problem they were supposedly trying to cure. As Rep. Ron Paul (R-Texas) states “free market economics teaches that for every government action to solve an economic problem, two new ones are created.” It’s a never-ending cycle of politicians passing bad laws to “fix” problems that were created by government in the first place.

While there are an abundance of problems associated with ObamaCare, perhaps the most troubling is the philosophical problem. Most politicians –and unfortunately many Americans—believe that health care is a right. This is a perversion of the idea of rights. As the Declaration of Independence states, Americans have the unalienable right to “Life, Liberty and the Pursuit of Happiness.” Note that none of these things require anything of anybody else.

Health care does require something from someone else. It either requires time from a doctor or nurse or money from someone to pay for such services. The government has no wealth of its own. Every dime that the government redistributes was first forcibly taken away from a taxpayer. Politicians like to consider themselves “compassionate” for supporting wealth redistribution plans such as ObamaCare. But spending other people’s money is not compassionate. As Austrian economist Murray Rothbard said, “it is easy to be conspicuously ‘compassionate’ if others are being forced to pay the cost.”

We are not entitled to health care. Economics professor Walter Williams writes that “true rights, such as those in our Constitution, or those considered to be natural or human rights, exist simultaneously among people. That means exercise of a right by one person does not diminish those held by another… For Congress to guarantee a right to health care, or any other good or service, whether a person can afford it or not, it must diminish someone else’s rights, namely their rights to their earnings.” Where’s the compassion for taxpayers—who are forced to foot the bill?

Of course, most individuals who oppose ObamaCare are not “evil” as some supporters have claimed. We are not insensitive to the poor and needy. In fact, conservatives are more likely to donate to charities than liberals (no statistics found on libertarians). Arthur Brooks, author of the book Who Really Cares, says that “you find that people who believe it’s the government’s job to make incomes more equal, are far less likely to give their money away.” Genuine compassion is when you reach into your own pockets to help out the less fortunate. Reaching into other people’s pockets and forcing them to pay for compulsory government programs is false philanthropy and should not be considered noble.

We must repeal ObamaCare and restore a free market in healthcare.  No matter how well-intentioned government legislation may be, it simply cannot repeal the law of scarcity. We can complain about the alleged unfairness of reality, but the fact is that medical care will always be a scarce good. Government meddling in the health care market will only lead to ugly unintended consequences. We instead should seek to get the government out of the way and let the free market function for once.