Share buy-backs act as a way for a company to boost its share price while not having to show a profit or announce any big news or products to the public. Buy-backs work on the simple theory of supply and demand setting a company’s share price. More demand for a stock will put pressure on the supply and drive the share price up.

Buy-backs involve a company buying its own stock to reduce the total number of shares that can be bought and sold by the public on any given day. In times when profits are weak (like now), stock buy-backs work to keep a company’s stock price up – they just announce that they’re buying back some of their own shares and the law of supply and demand goes to work. A lowered supply of shares available to the public, coupled with high demand driven by investors chasing a return for their money when banks’ rates are low, gives a company’s stock a huge boost.

The low interest rates the Fed has in place now are further helping companies to buy back stocks. A company can borrow money from the Fed or a bank at a very low interest rate and use that money to buy back its own stock. This in turn boosts the company’s stock price. Months or years later the company can create new stock shares at the current higher price, and use the profits from the sale of the new shares to pay off the low-interest loan and keep any remaining profit. All this can be done with little risk to the overall fiscal health of the company.

The stock market and stock prices looking higher today because of stock buy-backs masks a faltering economy by making the market look artificially healthy. Our economy is currently growing at a very slow pace. In 2012 the economy is on pace to grow only 1.3% more than in 2011.  Stock prices, however, are now at historic high levels despite the sluggish economic growth.[2] This doesn’t add up.

When the low interest rates and stock buy-backs end, the market could revert back to 2008/2009 levels where today’s low interest rates and stock buy-backs began. Are you willing to gamble your financial future on a stock market that has been driven up not by increasing value, but by financial tricks such as buy-backs?

What we really need is true economic growth.

Most of the rise in the stock market is due to three big events: QE1, QE2, and QE3.  Without getting too complicated, QE (Quantitative Easing) can be explained as a way for the Federal Reserve to increase the money supply (M1).  The Fed does this by printing money out of thin air and giving it to the big banks who then turn around and use this money to buy Government bonds (debt).  The government bonds are then used as collateral to borrow additional money from the Fed. This borrowed money is available to be put back into the economy in the form of loans of various sizes and interest rates for you and I.

The down side of this policy is that in order to keep our debt from getting out of hand faster than it already is, the Government has to keep the interest rates on their bonds very low – around 2%.[2]  It is this low interest rate that forces people to put their money in the stock market to get a better rate of return.

Think of it this way.  If you have $1000 earning a 2% rate of return while invested in government bonds, but that same $1000 could earn you a 5-7% rate of return invested in the stock market, where are you most likely to invest your money?

With interest rates low, people who would normally save their money at a bank are forced to move their money into the stock market in search of a higher return.  It is this need to chase a higher rate of return that keeps the market going up.  Remember, stock market prices are based on supply and demand. More demand with limited supply means prices go up.

As long as the Fed keeps interest rates low and you have nowhere to put your money that earns a 3% or higher rate of return, you will actually lose money.  Why? Three percent is the normal rate of yearly inflation.  At any rate of return less than 3%, you are losing money because inflation is raising prices faster than your investments can keep up.  When your annual rate of return on an investment is not more than the inflation rate, it is called a negative return on your investment.

As an investor facing negative returns, you are stuck having to invest in the market to make a profit.  Consequently, stock prices go up, as investors demand a higher annual rate of return.  This rate of return can average as much as 5-20% during good economic times.[3]

Chasing high yields in the stock market works until one of two things happens.  Either people run out of new money to invest or interest rates go up.  If interest rates on bonds go above 3%, buying bonds becomes a safer investment than the stock market. Remember, the interest rate on a bond is fixed for the length of the bond, however the market can go up and down.  Sometimes in the market you can gain 15%, other times you can lose 30%.

When investors’ confidence in the economy fades and enough people decide to get out of the market all at once, that sets off a massive market decline.  This is what happened in 2008-2009.  Are you ready for the next stock market decline, or do you think markets will just keep going up?

Over time only you can decide which is a safer investment: bonds or the stock market.

I have never been a member of NOW (National Organization for Women), the largest organization of feminist activists in the United States.[1] Nor did I ever champion the Women’s Liberation Movement in the sixties and seventies when I was young and starting a career. I guess that I have always embraced people’s rights instead.

After watching the 2012 Republican National Convention, I became excited about the role of women in our country today, and where we are headed. I was thrilled that my daughter (who is a small-business owner) and my two granddaughters (who are bright, lively girls), as well as myself, can look up to a great array of positive female role models. Many of them spoke at the convention. They included: Condoleezza Rice, Nikki Haley, Mia Love and Susana Martinez. All possess qualities that I, myself, admire and would be honored to see exhibited in my daughter and granddaughters.

Life was not easy for the women who spoke at the convention. They actually worked hard to gain success and live a meaningful life. My daughter has also worked earnestly to make her business a success despite raising children, taking care of a home, fixing meals, etc. The government did not help these women become successful. They did it on their own.

I started thinking about the future of all women in this country. It seems that under the Obama administration, they would have little to look forward to unless you think that free contraceptives, high unemployment and an astronomical debt are gifts. I know that I want more than this for my girls and myself.

While the debt clock has passed the 16 trillion dollar mark, (it is still hard to wrap my head around all those zeros), the Obama administration is offering ways to make life easy for women while spending more of the government’s money which it does not have.

While we stand on the edge of a financial cliff knowing that we need to pare down, this administration is offering programs to facilitate a lighter load for women. They are all great ideas, but they continue to encompass government as a giant safety net.

Some examples of these programs/grants are:[2]

• Grants for Single Mothers
• Grants to Pay Medical Bills
• Grants for Home Improvements
• Grants for Women
• Single Mother Housing Grants
• Grants for Personal Needs

I have only listed a few of these programs. There are many more.

Yes, sometimes people need help. But should we encourage people to take the easy way out when our government has to borrow money to make this happen? Or should we scrutinize these programs to determine whether our tax dollars are being spent wisely? More importantly, should we continue to promote dependency rather than independence? It seems to me that dependency has kept women in bondage for far too long.

There is no denying that our country is in economic turmoil. You can’t deny the numbers. But I look at the hope my daughter and granddaughters can have if we elect someone who will focus on shrinking the government, help us become energy independent, reform healthcare and repeal Obamacare, dissolve the red tape that binds small businesses instead of expanding them, and insure safety, at all costs, for all of us.

This thinking and planning promotes independence, economic growth, healthy employment, solvency as a Nation, and strength in our National Defense.

I want a plan that will allow all women to thrive while pursuing true liberty. I want a platform that promotes less dependency on government and less debt for the future. A future where dreams can and will happen because our Nation has reshaped itself to be what it was originally intended to be.

My excitement started with the convention and grows deeper every day. I don’t feel that there is a war on women. I feel that the real war is women finding out what the real issues are and how to overcome them.

George S. Patton once said, “Better to fight for something rather than live for nothing.”[3] Let’s start fighting and look forward to a better future!

See how you, too, can get excited about real change for this country. Talk to your female friends. Allow them to see that they really can have an exciting future if we support a program where we attack the issues and provide solutions to move our country forward!

Is this an overblown conspiracy theory, or could malicious software really damage America’s infrastructure? The disruption of Iran’s nuclear program by the “Stuxnet” computer virus demonstrates the potential of military advantage through CyberWarfare and serves as a warning of new threats facing America.

In June 2010, a Belarus computer security company named VirusBlokAda discovered a powerful malicious software program named Stuxnet.[1] Further investigation showed a highly sophisticated and targeted attack:

• Nearly 60% of the infections were found in Iran within three months of the first detection.[2] Normally, computer infections are widespread in a similar way human viruses are transmitted.
• Stuxnet relied on portable USB devices, which allowed virus spreading on systems isolated from the Internet. Once installed, the virus has great ability to spread and avoid detection.[3]
• Control systems used by manufacturers were targeted instead of consumer or business systems. Stuxnet targeted Siemens control software working with a specific “frequency converter” drive from a specific manufacturer.[4]

Researchers concluded that Stuxnet targeted motors in Iran’s Natanz or Bushehr nuclear enrichment facilities. Natanz presents a greater risk of producing weapons-grade uranium. Stuxnet’s job was to sabotage the uranium enrichment process. By causing the motors to speed up, slow to nearly a stop, and then speed up again, the enrichment process would not run properly and might produce unexpected results.[5]

Stuxnet appears to have started infecting Iran systems in June 2009. The secret-telling Wikileaks site reported that a “serious” nuclear incident occurred in the Natanz facility at that time. Statistics show that the numbers of operational Iranian uranium enrichment centrifuges decreased in 2009 from 4,700 to 3,900.[6]

The Obama White House and Israel have leaked information showing that Stuxnet was jointly created to disrupt Iran’s nuclear program.[7]

Cyber attacks have not yet crossed over to the horror and cost of real-life warfare. However, our ability to defend our borders and protect trade is being challenged every day. It takes only one technically savvy attacker to cause serious damage. With our enemies now including rogue states, drug lords, and cyber criminals, we cannot be protected by the Cold War strategies of the past.

As threats from new CyberWarfare techniques grow, we must demand that our government act with urgency to protect our vital infrastructure. Our national security depends on it.

This is the second in a two-part series on growing threats and strategies in the Internet age. CyberSecurity at Risk Part 1: Growing Threats demonstrates the rising impact of CyberCrime on business and that CyberWarfare is a key military strategy our enemies are quickly grasping. CyberSecurity at Risk Part 2: Changing the Rules Again shows the national security strategies needed to protect our vital interests.

In the fast-changing CyberSecurity world, staying one step ahead of attackers has never been more challenging.

Recently, a virus that infected 30,000 computer workstations attacked the Saudi Arabian oil company Aramco. Aramco took their main website off the Internet for several days. Credit for the attack came from a group called the Cutting Sword of Justice.[1]

During 2009 and 2010, U.S. and Israel released the Stuxnet virus to secretly disrupt Iran’s uranium enrichment progress.[2]  Because Stuxnet is old CyberSecurity news – and as attackers catch up – we must change the rules of the game again.

Maintaining security in the Cyber world starts with the basics. However, stealing secrets is always easier if the front door is unlocked with nobody watching.

In February 2012, the hacker group Anonymous published 78 email addresses and passwords from the Syrian government: 33 of the 78 passwords were either “12345” or “123456.” On the same day, Anonymous leaked a series of emails from inside the Syrian government.[3]

Are we doing any better than Syria securing our vital national secrets? In 2011, Gmail experienced a phishing attack from China that targeted personal email accounts of White House staff. A phishing scam seeks to get people to reveal IDs, passwords, and account numbers. The attackers’ aim was likely to uncover official White House business or national security secrets being discussed in private email or on home computers.[4]  Due to the common practice of using the same passwords at home and work, did the Chinese actually find much more?

Failed CyberSecurity Strategies

How well has the Obama administration done defending our cyber borders and protecting business and trade?

In the last legislative year, the House and Senate voted on differing national CyberSecurity bills. The Cyber Intelligence Sharing and Protection Act, passed in the House, was co-sponsored by the Democrat and Republican senior representatives on the Intelligence Committee. Obama, however, threatened to veto this measure that encourages companies to share cybersecurity information. The CyberSecurity Act of 2012, openly supported by the Obama White House, was defeated in the Senate when the Senate split over mandating cybersecurity standards for private businesses.[5]

Despite this loss in the Senate, the Obama administration is pushing a Presidential executive order with key provisions from the failed Senate bill.[6]  Why would the White House deliberately go around the legislative process?

Rather than strengthening our defenses, the failed CyberSecurity Act of 2012 and likely Presidential executive order impose government oversight and interference, and add the following risks to businesses:

No protection from lawsuits – Information sharing is key to handling a Cyber attack. Leaked drafts of the proposed executive order do not include limits on companies being sued for sharing information about a cyber attack with the government. If companies need to frequently check with their lawyers on potential exposure to lawsuits, the timely flow of information will stop.[7]

Even by adding protection against lawsuits in the CyberSecurity legislation, businesses may still hesitate to share vital information with government and each other. Food safety may be one of the few examples where the government and business have established the practices to quickly share information.

Government mandated standards – The Administration’s executive order seeks to impose “voluntary” CyberSecurity standards on critical industries.[8]  Would businesses be slapped with lawsuits from customers or shareholders for failing to meet “voluntary” security standards?

CyberSecurity Leadership Agenda

So challenging is the Cyber threat that at the recent DefCon hacker conference, National Security Agency General Keith Alexander asked hackers to help make the Internet secure and defend privacy.[9]  While this might lead to interesting relationships with the hacker community, a strong CyberSecurity leadership agenda must instead be created.

We can no longer be satisfied being one step ahead of the other side as we were with Stuxnet. All it takes is one talented and motivated individual to penetrate our cyber defenses that cost billions of dollars to build and maintain.

Here are a few key issues we must address in a rapidly changing technical world:

Create a partnership between government and business –The need to build readiness extends to businesses such as banks, power companies, communications, and other utilities in partnership with government. We cannot wait until an attack to ensure communication lines are in place between business, government and military.

Cut through or eliminate the layers of bureaucracy – Due to privacy concerns, many government agencies can’t share information with each other. Sharing Cyber intelligence between agencies is critical to ensuring our nuclear program, military forces, and intelligence agencies can meet an attack with proper force. Furthermore, eliminating needless CyberSecurity mandates and regulations minimizes government overreach.

Continue investing in CyberWarfare capabilities – General Keith Alexander recently said the Department of Defense will reach full CyberWarfare readiness by 2014.[10] With the public sector in competition for prized talent in the private sector, adding the talent and systems to build readiness requires long-term funding, leadership, and discipline.

Define the rules of engagement – Our forces will only be successful in the case of a Cyber attack if the following questions are understood.[11]

• Who is the attacker?
• What is the immediate response?
• What command structure is in place to make the decision for a greater response?

In the Cyber world, the identity of attackers is easily covered up. Suppose the U.S. retaliated against an attack only to discover the real attacker cleverly pointed the evidence elsewhere?

Cyber attacks have not yet crossed over to the horror and cost of real-life warfare. However, our ability to defend our borders and protect trade is being challenged every day. It takes only one technically savvy attacker to cause serious damage. With our enemies now including rogue states, drug lords and Cyber criminals, we cannot be protected by Cold War strategies of the past.

With new CyberSecurity threats, we must demand that our government act with urgency to protect our vital infrastructure. Maintaining our competitive advantage and national security in a post 9-11 world depends on it.

For more solutions to the problems facing America in a post 9-11 world, go to truecapitalism.org

American citizen, by your vote, YOU have the power to decide which of the of the two competing paths before us our country will take:

1. Do you want a top down government managed society, with an ever bigger and more powerful federal government, and ever weaker and more dependent citizen/subjects, with a weak, government dominated economy, high taxes, high unemployment, and high debt?

2.  Or, do you want to restore the free society established by our founding fathers through the Constitution, with limited government powers, a free, vibrant economy, and strong, free and independent citizens who remain protected by a community safety net, not a containment net?

The choice is now before you on Nov. 6. Not to choose is to choose.  Your country’s future depends on you.  Where do YOU stand?

The American Vision

“…a wise and frugal government…which shall leave them [the people] otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned…this is the sum of good government.”

President Thomas Jefferson

First Inaugural Address, 1801

“The founding fathers established a nation under God, ruled not by arbitrary decrees of kings or the whims of entrenched elites but by the consent of the governed.  Theirs was the vision of a striving, God-fearing, self reliant people living in the sunlight of justice and breathing the bracing air of liberty.”

“…. Almost all of the world’s constitutions are documents in which governments tell the people what their privileges are.  Our Constitution is a document in which “we the people” tell the government what it is allowed to do.  “We the people” are free.”

“Government’s first duty is to protect the people, not run their lives.”

                                                                                                         President Ronald Reagan

The Liberal/Left Obamanation Vision

“…government, compassionate toward its subjects, provides for their security, forsees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, makes rules for their testaments, and divides their inheritances….”

“It does not break men’s will, but softens, bends and guides it; it seldom enjoins, but often inhibits action; it does not destroy anything, but prevents much being born; it is not at all tyrannical, but it hinders, restrains, enervates, stifles, and stultifies so much that in the end each nation is no more than a flock of timid and hardworking animals with government as its shepherd.”

                                                                             Alexis de Tocqueville, Democracy in America, 1840

“In 5 days we begin the fundamental transformation of America.”

Barak Obama, 5 days before 2008 election.  

This is the first in a two-part series on growing threats and strategies in the Internet age. CyberSecurity at Risk Part 1: Growing Threats demonstrates the rising impact of CyberCrime on business and that CyberWarfare is a key military strategy our enemies are quickly grasping. CyberSecurity at Risk Part 2: Changing the Rules Again shows the national security strategies to protect our vital interests.

The digital revolution has turned mainstream. Just 30 years after the first PC, we celebrate progress with each new iPhone and iPad release. Facebook was the highly publicized initial public offering of stock for 2012. Mark Zuckerberg, Steve Jobs, and Bill Gates are household names.

Hazards of the same digital age have also gone mainstream as many of us experience identity theft, online scams, computer viruses, and online predators. With the growth of social media and mobile devices providing new opportunities for criminals to ambush the unsuspecting, the Cyber world is a dangerous place for our citizens and nation.

Cyber threats take on two primary forms:

CyberCrime makes big money from industrial espionage, fraud, spam, viruses, and more. Symantec estimates the cost of CyberCrime is $338 billion globally. Cybercrime is more lucrative than the drug trade.[1] There has been a dramatic rise in attacks on small businesses over the last six months while the attacks on large businesses have declined; 36% of attacks are now on small business.[2]

CyberWarfare has been on the rise more than a decade with the objectives of achieving a battlefield advantage and dominating covert operations. The U.S. and Israel developed the computer virus Stuxnet to secretly disrupt Iran’s uranium enrichment process. Stuxnet accidentally “escaped” due to a programming error and was discovered in 2010. In a New York Times article, author David Sanger disclosed strategies used by the White House to deploy Stuxnet.[3] The White House is under investigation by the U.S. Attorney General for classified intelligence leaks.[4]

Those seeking to exploit any weaknesses in our defenses are talented and motivated:

Organized crime syndicates – Russia leads in making a business out of CyberCrime. The breakup of the Soviet Union and their lax government oversight led highly motivated and talented former state-security operatives to join with organized crime. “They’re incredibly persistent. If it takes a year to set up their targets, then they’ll wait the year,” said Jose Granado, Ernst & Young’s information security practice leader.[5]

Rogue nations – A recent Department of Defense report stated, “Sensitive U.S. economic information and technology are targeted by the intelligence services, private sector companies, academic and research institutions, and citizens of dozens of countries. Chinese actors are the world’s most active and persistent perpetrators of economic espionage.” The “actors” – those who steal and disrupt – use a variety of methods to take intellectual property ranging from computer intrusions to more personal methods. Chinese intelligence services exploit people with ties to China to steal trade secrets using insider access to corporate networks.[6]

With Russia and China possessing the capability to push CyberWarfare forward, other nations are making strides. North Korea recently increased its CyberWarfare unit to 3,000 elite staff.[7] In an address to the U.S. House subcommittee overseeing CyberSecurity, General James Clapper was reported as saying Iran’s cyber capabilities “have dramatically increased in recent years in depth and complexity.” [8]

Highly-motivated individuals – It takes only one technically savvy criminal or attacker to cause serious damage.

Some prosecutors are learning to use the Internet to go on the offensive. U.S. Attorney Jenny Durkan told a press conference, “People think that cyber criminals cannot be found or apprehended. Today we know that’s not true. You cannot hide in cyberspace. We will find you. We will charge you. We will extradite you and we will prosecute you.” [9]

Our Nation at Risk

Our national infrastructure is susceptible to two types of attack:

• Distributed Denial of Service (DDOS) attack – Shuts down computer systems by high volume of traffic and superiority of attack. For example, a DDOS attack in September 2012 disrupted at least six large U.S. banks. Security experts stated the Middle East group claiming credit, Izz ad-Din al-Qassam Cyber Fighters, must have had help. Senator Joe Lieberman, chairman of the Senate Homeland Security Committee, believes the attacks were sponsored by Iran.[10]
• Stuxnet-like attack – Stuxnet succeeded in covertly disrupting critical infrastructure inside Iran. The next Stuxnet may be pointed at the U.S. as a cunning means to disrupt operations or steal secrets.

President Obama recently wrote in the Wall Street Journal Opinion section that his administration made CyberSecurity a priority, since “the cyber threat to our nation is one of the most serious economic and national security challenges we face.”  He added, “So far, no one has managed to seriously damage or disrupt our critical infrastructure networks. But foreign governments, criminal syndicates and lone individuals are probing our financial, energy and public safety systems every day.” [11]

Have we succeeded in advancing the CyberSecurity priority? Three years ago, Stuxnet dictated new rules in CyberWarfare. Yet Stuxnet is old CyberSecurity news. As attackers become more sophisticated, we must change the rules of the game again.

The next article – CyberSecurity at Risk Part 2: Changing the Rules Again – looks at key CyberSecurity strategies taking us beyond the Cold War and to government’s role in protecting our vital interests.

For more solutions to the problems facing America in a post 9-11 world, go to truecapitalism.org

School lunches are now the hot topic as lunch trays are a bit lighter and calories are being limited. The so-called “nanny-state” has spread across America and into our schools as First Lady Michelle Obama, despite not being a nutritionist, has decided she knows what’s best for our children’s diets.

This is part of her “Let’s Move” campaign, and it resulted in the “Healthy, Hunger-Free Kids Act” which was passed into law by the lame duck, Democrat-controlled Congress in December 2010.[1] Now the frustrations that played out in the Occupy movement have moved into the hallways of our schools as our youth protest the reduced lunches that are making them go hungry.[2] [3]

New Rules

“Under the new regulations, cafeterias are required to serve twice as many fruits and vegetables while limiting proteins and carbohydrates. For an average high school student, that means two baked fish nuggets, a cup of vegetables, half a cup of mashed potatoes, one whole grain roll and 8 ounces of fat free milk is the fuel that served to get them through their last four hours of classes.”[4]

In one reported school district, the cafeteria staff are instructed to count out how many tater tots each student gets so they are in compliance with these new regulations.[5] Instead of making sure our children are fed, we are making sure we calorie-restrict them regardless of their weight, height, age and caloric needs. This is crazy!

From Riots in the Street to Riots in the Hallways

Students at Parsippany Hills High School held a strategy session in September to discuss a potential lunch strike over what they have called inadequately sized meals.  These students were so outraged they planned a cafeteria boycott that will cost the school money.  One noted comment echoes a perennial concern: these students want to know why they are paying the price for other people’s problems.  “If somebody’s obese why should someone like me who’s not obese have to suffer, and eat a small meal when I’d rather have a bigger meal?”[6]

As a health and wellness business owner, I certainly understand the importance of ensuring our children and students receive nutritious meals at school.  According to the Centers for Disease Control, childhood obesity has tripled in the last thirty years.[7] The answer to this issue is that we must start in the home by teaching our children the importance of an active lifestyle and healthy eating.   Parents and communities, not the government, should find common ground in empowering these children with the tools needed for a healthy lifestyle.

Where’s the Beef?  Not on Students’ Plates!

The result of this new school lunch law is that we end up with hungry kids.  The new high school lunch limit of 750 to 850 calories is simply not enough for growing kids.[8] Like adults, kids vary in their size, activity level and metabolism rate.  School athletes are finding that functioning in their athletic activities is becoming a challenge. I was an athlete in high school, and I remember walking that lunch line twice. I paid extra but my calorie needs were met.  The school made their money, and I was nourished to play a 2.5-hour competitive volleyball game after school.

Let’s Look at the Collateral Damage of this Bureaucratic Decision

Students and teachers are both suffering under this new rule. Many reports claim children are complaining they are still hungry after lunch, leaving teachers with the challenge of teaching hungry students.[9]

Growing government regulation also makes it more expensive for all parties.  This costs both the school more (even for less food) and the families more – the cost of school lunches has risen by $0.20-$0.25 per plate.[10]  No one is receiving a good value in the long run. To make matters worse, new government-required paperwork consumes so much of the employees’ time that it is driving up labor costs.[11]

Even more interesting, students have reportedly begun a black market bringing food to school and selling it to other students.[12] Apparently even students have a better understanding of job creation and free trade than Washington bureaucrats!

Kids being food-restricted at school will lead to them finding the fastest food items after school to replenish themselves.  If good nutrition choices do not start in the home, then children will follow their stomachs and find the quickest “pick me up” after school.  Whether they stop for fast food or overeat on “baked” potato chips, we are setting them up for unbalanced eating habits.  I can see government turning around and saying, “It’s ok, when you go to McDonalds just use thinner straws for your milkshakes.”

Beyond the classroom, the rapid expansion of government regulation is taking away freedoms from consumers like you and I. Do not forget New York City Mayor Michael Bloomberg, who has banned large-sized sugary drinks and all but eliminated the use of trans fats in restaurant food.[13]

The Final Rule

Americans should be outraged. The school lunch mandate and the progression of many other red tape decisions by the Obama administration are only a small taste of what’s in store for America as he continues his agenda into a second term.  Quite simply, it’s none of the government’s business. Parents, not politicians and bureaucrats, should decide what their children eat. Right now it’s “too much turkey” in your children’s lunch.  What will it be tomorrow?   Just imagine…

What we are seeing is surely not leadership, it is slow control, and even with “the best of intentions” all roads lead to… well, you know the rest of the story.

Do you feel a change in the economy? Are you worried about your job security?  Major businesses like Medtronic and General Mills together laid off nearly 2,000 works to adapt to the current slowdown.[1] [2]  With so many unknowns today, wouldn’t it be nice to know why we’re slowing down?  The answer lies in following the Washington money trail.

At the time of this post the U.S. National Debt is $16.1 trillion with $1.1 trillion of our annual spending going on the government’s credit card (deficit spending).[3]

This deficit spending and massive debt puts our country in danger of going off a “fiscal cliff” when a number of tax cuts expire and government spending cuts go into effect at the end of 2012.  What’s worse is that many people don’t have enough skin in the game to fight to make sure we don’t fall off the fiscal cliff. Only 53.6% of our nation pays income taxes.[4]  What percentage of people who don’t pay taxes are concerned with our Nation’s fiscal problems?

Besides this troubling government overspending, many people are also concerned with the size of our government’s Bureaucracy.  The Executive Branch, led by President Obama, is made up of 15 cabinet positions, 32 Czars, and 479 Federal agencies.[5]  Add state agencies and the number grows to over 2,000. That’s huge, and growing!  What are the impacts of such an enormous Bureaucracy?

Difference Between Public Sector and Bureaucrats

Let’s start by distinguishing between the Public Sector and Bureaucrats.  The Public Sector consists of needed Government jobs for a working economy and our defense. These jobs might include the FBI, police, fire departments, courts, street lighting, enforcing property rights, military, and a few others.

Bureaucrats make up the largest percentage of our Government. A Bureaucrat is an employee of a government agency whose job it is to follow procedures and regulations.  They are rule creators and enforcers—-that’s it.  They don’t produce food, clothing, homes, technology, cars, or anything of real value.  They are “non-producing.”

Bureaucrats’ salaries and benefits are paid for by United States taxes collected from the private sector where food, clothing, homes, technology, etc., are produced.  Therefore, their survival is tied to collecting money from the taxpayers.

Bureaucrats Driven Towards Inefficiency

Besides not having to produce anything, what incentives are in place for a Bureaucrat?  Does a Bureaucrat want a larger salary, more benefits and job security?  Yes!  Who wouldn’t want that?

How do Bureaucrats go about getting more pay, more benefits, and greater job security?

• They lobby to obtain more benefits and public pensions.
• They create more rules and regulations to justify their existence. This adds people to government payrolls, but doesn’t add anything to production.
• Their budgets decrease if they don’t spend them, so they are driven to spend every dime that comes into their department.  (So much for being driven towards lowering costs.)
• If costs are higher, there are no consequences to their job security – the government will just raise more taxes or print money.
• If they trim costs by being more efficient they work themselves out of a job, so efficiency suffers.

In other words, bureaucrats are actually rewarded by spending more private sector dollars than they collect via taxes!  This explains at least one reason government spending has grown 40 times its size since 1960,[6] while the United States population hasn’t even doubled during that time period.[7] [8]

The larger Bureaucracy grows the smaller the private sector becomes.

The Private Sector Difference

The Private Sector is driven towards productivity and efficiency; creating more with less actually rewards the Private Sector.  If the Private Sector generates more income with less cost there is more profit left over for the shareholders. Intelligent business owners reward employees who trim costs as it is in their best interest to retain key employees.

In addition to producing goods and services, the Private Sector responds quickly to the demands of millions of consumers. In other words Private Sector money produces things of value and Bureaucratic money is non-producing and inefficient.

The 64,000-Dollar Question

What would give you an edge in a global economy?  Having the highest or the lowest possible amount of money going towards production?  Obviously, you want more money going towards production with the smallest amount possible going towards inefficient “non-production.”

This is why it is vital that we turn our economic ship around.  Eventually, with an ever-expanding Bureaucracy, the whole economy will be inefficient, “non-producing” money. There will be more people in the cart than are pulling it.

Eventually you reach a tipping point where you increase the non-producing part of the economy so much that it drags down the producing part to a point of no return.

President Obama has done nothing but increase the size of government non-production since being in office. It’s critical that we communicate to our friends the importance of putting an end to increasing government Bureaucracy and is critical if we are to save our nation.