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2019-05-24 07:00 by Karl Denninger
in Federal Government , 119 references
[Comments enabled]  

23 year old law folks:

President Trump is signed a memorandum Thursday that will enforce a 23-year-old provision requiring sponsors of legal immigrants in the U.S. to reimburse the government for any social services such as Medicaid or welfare used by the immigrant, Fox News has learned.

This was part of Clinton's Welfare reform package.  It has been deliberately ignored by every President since, including Clinton himself.

Which, I remind you, no President is entitled to do; in fact each President takes an oath to faithfully execute the laws of the United States.

This is not a suggestion or an executive order, which becomes functionally worthless (despite the 9th Circus saying otherwise) when a President leaves office.  This is an actual law and an actual requirement.

There is no reason not to go back and enforce it against every immigrant that has come in here in the past 23 years.

We not only should, we must, and collect all of the funds that those immigrants stole from the United States, as once that law was signed and went into effect they owe the money for all acts forward whether we collected it or not.

Make it so.

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2019-05-19 08:48 by Karl Denninger
in Federal Government , 223 references
[Comments enabled]  

I love the long-winded excuses in this article....

Countries around the world that engaged in unsustainable spending and borrowing, like Argentina and Greece, have defaulted on their debt. While the United States is unlikely to default by becoming unable to pay its creditors because it prints its own money, it can default on the value of its debt in other ways, namely through inflation. Inflation is default by other, less direct means, however. Instead of default on debt by failure to pay creditors sufficient currency, default by inflation occurs by devaluing the currency, thus returning less value to creditors than they had initially loaned money over to the government.

Extreme inflation, especially when it appears suddenly and occurs with significant magnitude, disrupts economic activities and can cause a recession with grave financial consequences for businesses and workers. Moreover, inflation destroys the savings of Americans, taxing them by reducing the value of every dollar in their savings account. The United States can avoid fiscal collapse by adjusting the policies that are driving the country deeper into debt. The primary culprits here are social and economic programs that have been growing out of control for decades.


Despite the different nature of the programs, Medicare and Social Security are by far the most significant drivers of the impending fiscal collapse. As the federal budget becomes further unsustainable, change is inevitable. Lawmakers should approach these changes with deliberation and reform current policies gradually to enable the American people to adjust to them without doing unnecessary harm. Not reforming is not an option.

Again, this is crap.

And from a political "journalism" outfit like The Hill it is not only unacceptable it should be met with felony criminal charges of intentional fraud.

Social Security can be "resolved" at a reasonable adjustment to the tax rate, earnings cap or both.  Specifically, it would be cash-flow neutral by increasing "both halves" to 7%, or by lifting the cap somewhat (where you stop paying), or some combination of the two.  On an actuarial basis Social Security is reasonably sound; while it currently has a functional deficit of about 11% that's within the realm of reason to correct.

There is no way to make Medicare sound within the realm of the current taxation and spending paradigm.  It was designed for an environment where medical spending was ~4% of GDP.  Medical spending has advanced by five hundred percent since then, most of it through felony price-fixing and other violations of 15 USC Chapter 1, exactly none of which the government has punished.

A standard vaginal birth hasn't changed as to its essence since human beings first walked the earth.  The last "big thing" with regard to routine vaginal births was the epidural to reduce pain in the final states of labor which has been in active use for decades.  Inflated to the purchasing power of today's dollars from the year of my birth you should be able to have a child in a hospital, with a two or three night stay, all-in including the epidural and care for both the infant and mother at a cost of about $1,000 right here, right now.  But the actual price today is at least 5x that high and often 10x as much for a routine uncomplicated vaginal birth and they throw both mother and child out same day

In other words you get much less and pay 5-10x more.

You're being robbed.  Period.

No worker made the decision to not indict the hospital administrators, drug companies and doctors for rampant price-fixing and other violations of 15 USC Chapter 1.  All workers are forced to pay into Medicare and were not parties to any of this fraud and felony.

It would require close to a 500% tax increase to bring Medicare into functional, long-term solvency.  That's socially and fiscally impossible; attempting it would lead to an immediate, violent revolt as mathematically the incremental impact on the poor and middle class would render every member of both instantly and permanently destitute.  There are simply not enough rich people nor do they have enough money combined to attempt to levy the impact upon them.

If the government tries to screw the people to maintain the fraud in the system they paid into on a good-faith basis then the government should be removed and replaced -- with all of the fraudsters imprisoned.  If the government refuses to leave then we should contemplate whether it's time for 1776 Part II, given that this fraud now reaches $3 trillion on a yearly basis, or $25/per-person/per day and then on top of it the government proposes to steal the paid-in premiums which you have forcibly had taken from you for your entire working life.  If there is a just cause for actual no-bull**** rebellion stealing one dollar in five spent by every single citizen in the nation and reneging on a paid-in insurance plan which they government has intentionally allowed to go bankrupt due to fraud and felony while both cheering on the theft and screwing the people blind damn well ought to be it.

I repeat: If this is nonsense is resolved and the monopolies and other scams in the medical field are stopped Medicare is not broke; in fact the federal budget, without a single tax increase, immediately and permanently goes into surplus and over time the accumulated debt will all be retired.

These are mathematical facts.  The Hill doesn't mention any of them.  One such plan to do so is found here.

Is The Hill's intentional combination of Social Security, which can be reasonably-easily fixed with Medicare, which cannot without stopping the medical scams -- all of them --  because they're apologists for an entire industry full of felons and wish to be lumped in with them when the collapse that will occur if we continue to pretend that these issues are linked and thus refuse to address them comes?

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I hate when that happens....

Remember, CNN and others say there's "no crisis" on the border.

They also claim that people who are ordered to show up for court actually do.

Both are lies.

From September 24, 2018, through April 26, 2019, more than 40,000 cases were marked as so-called "family-unit" cases, a DHS designation, according to Executive Office for Immigration Review data. Roughly 8,000 cases have been marked completed. Of those, 7,724 cases ended with removal orders, 6,764 of which were ordered removed because they did not attend their immigration hearings.

85% of the people ordered to appear did not.

97% of the cases that get to court are ruled invalid for asylum.

In other words basically all, statistically speaking, of those who come illegally into this country as families (that is an adult with one or more kids) fail to establish they are eligible to stay in the United States.

What you would say is appropriate if you had some offense in which 85% of the time the people accused jumped bail and 97% of the time they were guilty?  That is, statistically every one of them committed the offense and had no legitimate defense for their actions and 85% of the time the alleged offender refused to submit to the judgment of the court at all, jumping bail and thereby committing a second offense, this one involving sticking their middle finger up at the law and nation itself.

You'd throw every one of them in jail and refuse to release them in the first place as the facts say essentially none of them will or do respect the law.

This is not "immigration" it is an invasion and this little bit of factual truth-telling was published by CNN.

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2019-05-08 07:00 by Karl Denninger
in Federal Government , 257 references
[Comments enabled]  

Once again I heard it.

In the media today was news of a "new therapy" for a quite-rare but crippling condition that impacts kids.  The "new therapy" promised to resolve it, and the expectation is that it will be priced at $2 million per patient, with the question being asked "how much is a life worth?" in justification.

How is this possible?

Only through felony.

Let me explain.

There are two boundaries on any price in a market for any reasonably-fungible good or service.

The lower boundary is the cost of producing that good or service. To sell below that price for any material amount of time you must commit a felony criminal offense.  15 USC Chapter 1 makes clear that any attempt to monopolize or restrain trade, whether individually or collectively, is a felony.  It does not matter how you do it or how you price at the time.  In other words that consumers for some period of time get a lower price doesn't make it not a criminal offense.

Why must there be a criminal offense whenever you sell below that price for any material amount of time?  Because you can't sell below cost forever; no matter how much you start with you will eventually run out of money.  Therefore your goal must be to damage or destroy competition; that is, to force others out of business by selling below cost.

If you cross-subsidize one line of business that is unprofitable with another that is profitable that's illegal too.  It's illegal because your only motivation to sell intentionally at a loss is to destroy competitors.

Capitalism has at its core the intent to make a profit.  That doesn't mean you will always make a profit, of course, but the intent has to be there or your action is felonious as its intent is to destroy competitors rather than make a profit.

Again I note that 15 USC Chapter 1 says nothing about some certain percentage of a market you have to have before it becomes a criminal matter.  The mere attempt to monopolize trade or fix prices is a felony in every case.  Period.  Neither the DOJ or anyone else has the right to change the clear text of the law.  Only Congress can do that.

The upper boundary on any price in a market is the perceived value to the end-user of the product or service.  Above that price the only way you can sell any of said product or service is to commit a felony; that is, to force a consumer to buy.  Said acts of force are crimes; whether the coercion comes in the form of extortion or a literal gun-up-the-nose they are all forms of criminal activity.

Now here's the punchline:

All prices in a market economy will always wind up somewhere a bit above the cost of production.  If they do not it is nearly certain that a criminal felony is being committed by the sellers and marketers because 15 USC Chapter 1 makes it such that the only means by which you can enforce same, to maintain a monopoly or restrain trade, is a criminal offense.

What's "a bit above"?  That's open to some interpretation, but it's always a positive margin over cost in the intermediate and longer term with one exception -- a firm that's going out of business, either entirely or in that particular line of product or service and thus is liquidating inventory at a loss and doesn't care because it is about to cease to exist.

A good "rule of thumb" is that about a 10% gross margin indicates a healthy, competitive market.  In areas where very fast innovation is taking place you can sustain more of a margin for a while -- indeed, in some fast-growing markets you can see gross margins in the 30 or even 40% area so long as rapid product and service innovation is taking place.

But the idea of selling something at 10 or 100x cost -- or more -- isn't possible in anything approaching a "market" for said good or service.  It is only possible to do without committing felonies in the case of a bespoke item or service that is fundamentally irreplaceable in form or function.  That is, you can certainly have a piece of art that cost the artist $1,000 to make but sells for 1,000 times that.  There's only one; it's irreplaceable and by definition bespoke.

But a drug therapy is not bespoke -- ever.  If you try to price such a therapy at $2 million dollars you will make almost-exactly zero sales and thus it is impossible to make a profit at all unless you can force at gunpoint someone other than the consumer to pay for it because irrespective of the desire to buy nearly nobody has that sort of money available to pay and the odds of a Bill Gates or Jeff Bezos being the one who needs same is indistinguishable from zero.

Nor is an operation in a hospital or a vial of snakebite anti-venom bespoke.  Ever.  The only way you can charge $10,000+ for a vial of medicine that across a border, produced by the same process and colluding firms, costs $200, or which has a median price of about $1,000 here in the US is to commit felonies.

In this specific case the hospital screwed the patient because she'd been bit by a snake.

Realize this -- that this specific story ended with the family not getting buttrammed directly doesn't matter.  You still got screwed; that $100,000+ tab that "insurance" paid comes out of your butt.  Every penny of it.  The insurance company has every incentive to have that tab be $100,000 instead of the $10,000 or less it would be under a competitive system.  Why?  Because it's a regulated company and can only make a certain percentage of profit, as governed by state regulators -- typically 10%.

If you're an insurance company do you want to make 10% of $10,000 or 10% of $100,000?

THAT is their motive; it's transparent.

Incidentally colluding to make that bill $100,000 instead of $10,000 so you can make 10x as much money as an insurance company is also a felony as that's not exempt as part of "the business of insurance" under McCarran-Ferguson -- so said the US Supreme Court in Royal Drug in 1979.

S.3782 was introduced by Senator Daines in 2018 on this exact point.  But that bill is not only unnecessary it's stupid as group purchase and negotiated discounts -- or the converse that as an insurance company you "love" as it grossly raises the revenue that passes through your firm -- were already ruled out of bounds of McCarran-Ferguson and thus illegal under Royal Drug!  So is anything else, under that Supreme Court decision, that bears on contracts or agreements between insurance companies and entities outside of the insurance industry itself such as agreements between insurance firms and HOSPITALS, DRUG COMPANIES and HEALTH PROVIDERS.

Here is the actual text from the decision in 1979 which makes this absolutely clear:

(d) The legislative history of the Act confirms the conclusion that the "business of insurance" was understood by Congress to involve the underwriting of risk and the relationship and transactions between insurance companies and their policyholders, and no legislative intention is disclosed to exempt agreements or transactions between insurance companies and entities outside the insurance industry. 

**** you people in the health and health insurance business and **** YOU ALL IN THE GOVERNMENT TOO who have a clear duty to the Constitution and the faithful execution of the laws of this nation to bring felony charges and prosecute these jackasses, throwing them ALL in prison.

Every single piece of CRAP in the Federal Government who has FAILED to do so in EACH AND EVERY SUCH CASE is in violation of their oath of office and deserves to be arrested, tried and hanged for conspiracy to extort and STEAL more than $3 trillion dollars a year from US Citizens, the sum of which has and does flow through these cartels, none of which are supposed to be able to get away with ANY of this crap under 100+ year old Federal Law.

Approximately $25 per US Citizen, per day is stolen via this mechanism in the United States.

15 USC Chapter 1 is not a civil statute.  It contains criminal penalties including ten years in prison for each person who violates said law in each instance.

We need no new law -- not S.3782 or anything else.  In fact such "legislation" is a waste of time and effort by our Congress since there is utterly no reason to believe the US Attorney General, the FBI or for that matter STATE attorneys general or the crapfaces employed by same will enforce a new law ANY MORE THAN THEY HAVE ENFORCED THE 100+ YEAR OLD LAW THAT HAS ALREADY BEEN CHALLENGED ALL THE WAY TO THE US SUPREME COURT AND FOUND TO BE VALID AND APPLY TO THESE EXACT CIRCUMSTANCES!

Tell me again why the people of this nation should be put up with any more of this crap.

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2019-02-13 14:50 by Karl Denninger
in Federal Government , 431 references
[Comments enabled]  

There's simply no other way to express this....


These numbers are for only three months, so for the full year multiply by four.

Again, the total "social insurance and retirement" tax grab is $274 billion.  Social Security is a 12.3% tax (up to the cap) and Medicare is 2.9% (no cap.)  The split is thus roughly-speaking ~19% Medicare, the rest (81%) Social Security.

If you want to get down into the detailed numbers they don't "quite" add there because there is both spending and tax revenue that gets bucketed in each from the various line items.  But it's not off by much; the "line item" (without the bucketing) comes up as 74/26 -- not materially different.

81% of $274 billion is $222 billion.  Social Security spent $251 billion.  That's a ~29 billion shortfall.  Not good but there are a lot of Treasuries held against that requirement, and by 2026 the budget impact as a percentage starts to fall because the boomers start to die, statistically speaking.  In other words Social Security had a ~12% shortfall over the first three months, indistinguishable from my last look (12% .vs. 13%.)  This is easily fixable on a forward basis without much economic pain.

Medicare, on the other hand, spent $153 billion but took in just $52 billion.  That's a shortfall of 66%; that is, two thirds of it is unfunded.  You would have to more than triple the Medicare Tax Rate in order to bring it to parity.

That's an "improvement" over the nearly 75% deficit in the first month but we are in fact talking about bleeding out in two minutes rather than three; the outcome does not change.

Add to that "Health" (Medicaid, mostly) and it's much worse; now you take in $52 billion but pay out nearly $300 billion.

Note that the deficit thus far is $319 billion.  If you were to get rid of the deficit between Medicare and Medicaid .vs. tax receipts you would almost close the deficit to zero.  If you also increased the FICA tax rate by 13% (to just under 7% for "each half"), increased the income cap where it stops being collected or some combination that wounds up in the same place as well the deficit would be effectively zero.

$319 billion over three months equals roughly $1,300 billion, or close to $1.3 trillion in deficit for the entire fiscal year.  The only good news is that April is usually a strongly positive month (as a result of taxes being due) but either way the deficit is almost-certain to be in the neighborhood of $1.1 trillion this year.

You cannot fix this with either taxation or cost-shifting. It is mathematically impossible to do so.

For example you'd have to nearly double the individual income tax rate on everyone, including the middle class; to close the gap by increasing the corporate tax rate you would have to raise it by more than an insane and utterly impossible 600%.  Any claim that we can solve this by making people pay "their fair share" is a flat-out lie.

You cannot get there by "cutting spending" on other than these programs either; if you cut all "other spending" to zero along with transportation and education you'd only cover 30% of the deficit.  Cutting military spending to zero (which is obviously impossible) wouldn't get there either.

There is only one way to solve this problem and that is to collapse Medicare and Health spending by 80%.  You can only resolve the problem by collapsing the medical and health insurance monopoliesforcing everyone to publish a price for everything and charge everyone the same price, where said price must be handed out before service is provided, along with telling everyone involved that for any and all conditions in which a lifestyle change will remove the need for treatment government will pay zero unless the person in question makes that change.

The trend is not improving and it is not "The Next Generation" that will have to deal with this.

This has to stop right damn now or it will blow up before we get through the next Presidential term -- and no, you cannot tax your way out of it either.  The people in Washington DC -- Congress and the President -- must be held personally and politically responsible for their refusal to deal with the only way to put a stop to it, which is to destroy the medical monopolists using existing, 100+ year old law, and to do it right damn now.

And if they refuse we the people must enforce our demand for them to do so.  They will refuse, I remind you, unless forced by the people -- and there are peaceful and lawful means to do exactly that (e.g. a general strike.)

Nothing less than the literal existence of this nation as a Constitutional Republic is at stake.

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