Why American Democracy Will Eventually Fail

There is an intrinsic fatal flaw of Democracy that will inevitably lead to its decline and this is being played out currently, although gradually. The wealth tax in California and the election of Madani in New York City are exemplary of this eventual collapse.

Simplistically, the electorate is divided into two groups. The makers, those that produce, grow the economy and pay taxes, and the takers, those that rely on government and receive more than they contribute. As the nanny government has grown, handouts have flourished and redistribution is the goal. The takers are growing as a constituency and as they electorally outnumber the makers, they will vote to enable the government to take evermore from the makers to give it to themselves. Essentially voting themselves a raise. The makers will gradually have to give up progressively more of what they earn, eventually squashing their motivation.

The ideal of one man one vote sounds equitable but in certain ways is a wholly unfair system to assign one vote to someone who works and contributes to society, and an equal vote to someone who lives off government redistributive handouts. 

The founding fathers anticipated this eventuality which is the reason that land ownership was required in order to vote. Subsequent US governments objected to this prerequisite and expanded the right to vote to non land owners. This one move, however well intentioned, planted the seeds of the eventual destruction of the American experiment.

The raison d'etre of the progressive governments being elected is not so much the socialist ideal of government control of the means of production, but rather extreme redistribution.  In the case of NYC, Mamdani was elected on the platform of affordability, a code word for raising taxes on the makers to give it to the takers. In the other case, California's wealth tax is not as subtle, as it is clearly designed to take/steal property from the makers to support the state government in its unlimited and unaccountable spending and redistribution schemes. These elections/propositions are demonstrations of takers voting to enable the legal stealing from the makers (in the form of ever increasing taxes) to give handouts to the takers in exchange for their vote. 

The takers can essentially vote themselves a raise as they will never vote for a candidate that wants to cut the handouts they are receiving. Of course, the system will eventually implode as the maker class will wane as they have little incentive to produce and thus fail to provide the wealth to support the takers.

Furthermore, instead of investigating their systems for widespread fraud and abuse, it is much easier for the government to keep taking from the makers as they are an insignificant part of their constituency anyway. 

From a demographic viewpoint the situation is both inevitable and quite depressing. There does not seem to be a solution to this eventual descent into socialism and extreme redistribution. People will try to escape by continuing to move to states where the process hasn't progressed to the extent as in California and New York. But it's only a matter of time until the federal government is affected by the same trends when socialism and extreme redistribution becomes the law of the land. At that point, the only remaining option is to escape the USA. Get prepared. There is a limited amount of time left. Look to move assets outside the USA!

An American Guest Worker Program

As an American, I cannot go to any other country and stay an unlimited amount of time, get a drivers license, vote in statewide elections, or even get a job. So what is this nonsense put forward by the left that only criminal illegals are to be deported but not the noncriminal illegals. If you're here illegally, you have broken the rules and have accepted the risk that you can be deported at any time, period. 

Surely, noncriminal illegals play an important role in the workings of the American economy. For example, field workers, landscape workers, caretakers for the elderly and handicapped, and construction workers. We need these people who perform jobs that Americans will not (why should Americans work if they can be supported by government handouts), but there needs to be a system of documentation and accountability. The system is completely broken and a free for all with massive abuse of the American taxpayer. 

The US desperately need a guest worker program that is transparent and verifiable. One in which we get the benefit of foreign workers and they get the benefit of a good wage. One that minimizes fraud and abuse.

Some suggestions of how it may look:

All existing illegal immigrants must come forward to be documented or risk deportation with no ability to achieve guest worker status in the future.

US employers to make official requests for guest workers (?application fee, to be paid by employer). Guest worker status granted for an initial trial period, then extended if appropriate. A minimum wage is established for the guest worker.

An initial guest worker visa can only be issued to someone outside the country.

Comprehensive vetting of the guest worker applicant and reliable, unalterable forms of identification.

No birthright citizenship for guest workers. No chain migration. Guest worker's family does not get the right to join the guest worker. (It is the guest worker's decision to separate the family). 

Guest worker does not pay federal taxes or Social Security tax but he/employer does pay State tax if applicable. Guest workers/employer are required to pay into a distinct medicaid fund and for a limited disability benefit which are only in effect if he/she is working and only provides benefits until the expiration of his current guest worker visa. (the guest worker assumes the risk). 

If guest worker is unemployed, he/she can stay in the country while the guest worker visa is valid at their expense and risk, or return to his/her native country. He/she can look for a guest worker job while the visa is valid.

Guest worker must pay for his/her return ticket to their native country prior to arrival in the US as part of the application process.

Possible pathway to citizenship after residing for a minimum of ?12 years and achieving certain definable goals such as language, civics, employment record, employer sponsorship.

The guest worker is not entitled to government benefits such as food stamps and section 8 housing. He/she is not eligible for social security or medicare.

He/she cannot vote in federal elections and is not counted in the census for the benefit of congressional districting or electoral votes. 

Guest worker is prohibited from access to firearms.

Any criminal activity results in revocation of guest worker visa and immediate deportation.

Currently a foreign national can come into the US illegally or overstay their visa, and take advantage of our system.  This is not a system that is safe and beneficial to the US. A sensible guest worker program is needed by the United States as foreign nationals play an integral role in the US economy. A program where both the guest worker and the US benefit from the opportunity yet one that protects the interests of both parties from fraud and abuse.

 

Artificial Intelligence, the Perfect Technology at the Perfect Time

The Minnesota fraud debacle clearly demonstrates a predictable failure of government and certainly is the tip of the iceberg for what is rampant abuse of the good will of the American taxpayer. The intentions of America to have a safety net is noble, but noble intentions with the lack of accountability is legalized theft from the taxpayer. It is auspicious that AI technology has recently been developed as this is the perfect tool to make a significant dent in fraud and abuse of government programs.

It is clear that the Democrats have no desire to be accountable and may even be complicit in the fraud as they see the safety net as a scheme to redistribute, ie.steal, from the taxpayer to the "needy" in exchange for their votes. The Republicans, being the adult in the room and claiming some degree of fiscal responsibility, have a unique opportunity to remedy the problem by instituting AI to provide strict oversight. This needs to be introduced and passed in 2026 through reconciliation, prior to the midterms, when they risk losing the majority in the House. If not by reconciliation, lets see if 7 Democratic senators can be convinced to pass a bill making sure taxpayer money is spent responsibly while they are being shamed by their irresponsible actions in Minnesota.

AI has the ability to crunch a tremendous amount of data and determine if  money that is being doled out is appropriate for the needs of the recipient or is being received fraudulently. Something as simple as checking if someone is receiving benefits from multiple states can easily be determined by AI and reduce waste. AI can accumulate the available data of someones purchasing history, car and rent payments, income, travel, bank accounts and many other factors,  A picture can be drawn of a persons neediness or whether they could be fraudsters. Just the chance of someone getting caught with strict penalties will stop a lot of waste.

One can argue about privacy issues for those who are receiving handouts being monitored by AI. The answer to that is, if you are are relying on the taxpayer for your basic needs, you have forfeited the right to complete privacy. You owe it to the people that are giving you the money to be transparent in how the largess is being used and that it not being abused. If that does not work for you, then get off the public dole.

Certainly, at some point a human has to investigate to determine if fraudulent activity is occurring, but AI can sift through a tremendous amount of data that a human cannot. A partnership where AI filters the information and presents the most likely fraudulent cases to the investigators can go a long way in reducing waste, fraud, and abuse. The time has come to get serious with protecting the taxpayers money and to get aggressive against those who abuse America's generosity.

Freedom, our Quintessential Quality, yet our Greatest Weakness

The recent United States' military interventions in Iran, Syria and Venezuela demonstrate a significant superiority of its military compared with the ability of these countries to fend off such attacks. The US likely has weapons that are unknown to its adversaries which are game changers on the battlefield. The administration speaks with extreme boldness and threatening language as it attempts to affect other governments' policies, both in terms of their internal and external affairs. Not to say that these are not desirable goals, but it should not come as a surprise if one or more of these actors are planning to retaliate, which would necessarily come in the form of an unconventional attack.

The United States is unbeatable when it comes to conventional warfare but it has a major weakness which stems from perhaps our greatest value and that is our freedom. We Americans greatly value our freedom, but this comes at the expense of our domestic security. We frown on any moves by the government to track our activities. The availability of powerful guns is enshrined in our bill of rights. Our freedom of speech allows for radicalization and particularly against the nation itself. These freedoms uniquely define the United States but they also create a weakness that can be taken advantage of by our enemies.

The United States has plenty of soft targets. A bad actor can easily cause a mass casualty event in our country and we are completely unprepared for such a scenario. Who knows how many bad actors are currently in the United Staes and this includes sleeper cells that were allowed into the country under the suicidal Biden administration, but really orchestrated by the democratic machine. They sacrificed our security for their political ends, shameful! 

The United States is also plentiful with enemies that would not think twice of retaliating with unconventional warfare against it. Not only foreign elements but also domestic terrorists that have been radicalized and despise Western civilization and capitalism. The far left/woke have already shown its proclivity to incite violence.

It is too scary to speculate on specific scenarios that could occur but just think of all the places Americans congregate in large numbers with minimal or no protection. Consider the water we drink and the air we breath, and the food we eat. How easily could a biological weapon be smuggled into the country? 

Our enemies cannot fight us in conventional manner and will plan to retaliate by hitting our soft underbelly which is exposed by our defining quality, freedom. We would have to be proactive to eliminate and prevent these threats which would require a major shift in our daily lives. The fear is we are too late. 

Vance or Rubio in 2028?

The perfect primary is lining up for the republican party and it will be the ultimate poll as to where the majority of its constituents are currently positioned on an issue that seems to be fracturing the party. Is the republican party dominated by the isolationist wing, represented by JD Vance? Or alternatively, by what should be seen as the Donald Trump wing which believes in limited and surgical overseas operations which promote America's interest and world peace. This is represented by Marco Rubio as demonstrated by his orchestration of the Venezuela operation.

It seems that many Americans are rightly scarred by endless middle east wars and nation building which has been bad policy for the last few decades and pushed by the so called Neocons., This culminated in Biden's botched Afghanistan pull out which was the last straw highlighting this disastrous foreign policy leading to isolationist leanings. The pendulum has swung to other extreme where some feel any foreign involvement, including foreign aid, is viewed as contrary to the American first dogma and is filled with conspiracy nonsense. The ideal course for America's foreign policy likely lies somewhere between these two extremes. 

Based on his actions over the past year, President Trump seems to be following this middle, more rational and thought out course. Minimal risk with significant upside, surgical pinpoint operations, and carefully picking your moments to intervene. Give financial aid those groups that will promote US interests at the expense of their soldiers and weaponry, not America's. The more successes this Trump foreign policy racks up, the more likely GOP voters will support the Trump/Rubio approach and shake off the urge for isolationism.

It is clear that Marcio Rubio, as Secretary of State, aligns himself with the Trump policies as he is instrumental in their conception and implementation. Conversely, Vance is being somewhat vague about where he positions himself in relation to isolationism, foreign aid, and America's foreign policy. Not unexpected, as he does not want to alienate voters too early, and wants to be the loyal VP,  supporting his boss' policies. But if/when he becomes a presidential candidate he owes it to GOP voters to clearly lay out his positions so a healthy debate can ensue.

Although this debate is splintering the party, it is an important one which is critical to the platform of the GOP so voters clearly understand its positions. Is the isolationist wing just a vocal minority with a small sliver of the party amplified by the Carlsons of the podcast world with pumped up subscriber numbers? Or hopefully, is there a silent majority which want to continue with the more reasoned approach as practiced by the Trump administration and bequeathed to Rubio?  The Republican primary between Vance and Rubio will be the ultimate poll.

Mr. President, Lower Rates are Killing Savers

As a real estate professional, one can clearly understand why President Trump wants to lower interest rates. Every deal he ever looks at, hinges on the underwriting of the property(ies) which is directly related to the prevailing mortgage rates currently being offered by banks.. A lower mortgage rate lowers the overall costs when purchasing and managing a property, elevating profits. Trump craves a lower interest rate at all costs, without assessing its unintended consequences. The mortgage rate fluctuates based on many factors, but primarily the 10 year treasury bond which is set by market forces and NOT by the government. The misconception is that the government sets your mortgage rate or the rate on your car loan, but in fact it is set by market forces.

The government through its mandate of the Federal Reserve sets the federal funds rate which is an overnight rate, a very short term rate. Compare a ten year interest rate to an overnight rate. The risk profile of lending money overnight versus lending money for 10 years is vastly different. Consider inflation risks. When lending money overnight, inflation is a nonfactor since there would not be any erosion of the principle due to overnight inflation. OTOH, over a ten year period, inflation could considerably erode the value of the principle and therefore a ten year yield must incorporate that risk when it is being traded. So if there is a perceived risk of future inflation, the longer term interest rate would have to be higher to incorporate the risk of principle erosion.

The administration desires a lower consumer borrowing rate in the belief that this will spur economic activity and boost the overall economy. Recent actions to lower the short term rate by the Fed and encouraged by the president has not lowered the 10 year rate and thus has had minimal effects on mortgage rates. This is due to the fact that lower rates promote inflationary fears thus negating the effects on the longer term bond. What it has done is to significantly hurt savers. 

Many savers have their money in short term instruments most notably money markets. The interest received in money markets is tightly related to the short term interest rate set by the Fed and every lowering of the rate by the fed decreases interest received to savers. This lowers spendable dollars which is a negative for the economy, the exact opposite of what was supposed to happen.

There is estimated to be 8 trillion dollars in money market funds and somewhere in the area of 7 trillion in short term treasury bills and 11 trillion dollars in savings and checking accounts. The interest received on these short term savings vehicles, totaling more than 26 trillion dollars, are directly tied to the short term rate set by the Fed and every lowering of interest rate by 25 basis points lowers the interest received by tens of billions of dollars. 

So what is occurring is, savers are penalized to the tune of tens of billions of dollars which effectively lowers spending in the economy, while borrowers get no real help with lower borrowing rates. 

If someone is losing, there must be a winner in this so who wins in this situation? As the difference, or the spread between the short term lending rate and the 10 year rate has been widening, (the Fed lowers the short term rates but the market forces do not lower the 10 yr rate, also known as a steepening yield curve), the clear winners are the banks . They are able to borrow money at a low rate and then lend it out long term at higher rates. This difference generated is the profit earned by banks and the greater the spread between short and long term rates, the greater the profits at banks. In a more extreme example, for those who have savings accounts in banks earning 0.4-0.6%, you are lending money to banks essentially for free and they are lending your money out at 6+% for the average mortgage rate. What a business!!

Every action has unintended consequences and the government has to consider the effects of its actions on savers and their contribution to the economy. There must be a balance between what the administration thinks it is doing to help spur the economy by lowering short term rates and its effects on people who rely on their savings, as well as those who are trying to save for a nest egg. By lowering short term rates, inflation perceptions grow, leading to higher long term rates, the exact opposite of the intended action. At this time, lowering the fed funds rate does little to help borrowers, but only pumps up bank's earnings while severely impacting savers.

American Healthcare Disruption

The US health system is completely broken and its time for a complete overhaul. A combination of government health care for all and a robust private system living side by side work in many countries and should be amenable to both Republicans and Democrats. The previous entry was for the quick fix. This is for the permanent fix.

1. Government sponsored healthcare for all US citizens. Essentially, medicare for all. Private company(ies) with the aid of AI to monitor usage and detect fraud and abuse by patients, providers, health care companies and hospitals. 

2. Managed care companies to compete with the government plan for patients as it does currently with medicare part c. Through competition of government and private insurance plans quality will improve at a lower cost. 

3. Optional supplemental private insurance to see providers and visit hospitals outside the medicare system.

4. Patients can choose to use either their medicare or go private or hybrid if available.

5. Doctors can choose to participate in medicare but also can have separate private hours to encounter patients privately with clearly laid out fees. (currently this is against medicare rules).

6. Value based care with risk adjustment. Essentially, providers are rewarded for better outcomes corrected for risk inherent in treating sicker patients. 

7. Medical school is substantially subsidized by the government. The tuition is more than earned by their labor during internship and residency.

8. Primary care to be delivered by PAs and NPs. All MDs encouraged to have some specialty.

9. No more employer sponsored health insurance but employers will be charged a per employee tax to the federal government to support government sponsored healthcare.

10. Malpractice reform to include caps on pain and suffering, caps on lawyer's fees, loser pays, etc.

11. Medicaid to continue but at a level, lesser than for those on medicare for all in terms of availability and options. All poor and/or not covered by the employer tax are covered by medicaid.

12. All children through 25 years old are insured through their parents coverage whether government based or private.

13. Hospitals streamline and compete with each other for patients. They continue to compete with cheaper options like urgent care centers and outpatient surgery centers. Poorly functioning, unprofitable, redundant and unnecessary hospitals to close. Hospitals to specialize in certain fields which will improve outcomes.

14. Drugs are to be priced globally at a level that is fair to Americans so they do not subsidize the rest of the world. Yet, priced to incentivize the pharmaceutical companies to continue to innovate.

Obviously, this is an outline with each point representing a tome of rules and regulations. The time has come for a disruption of the American healthcare system.