Archive for the ‘The Meister Knows’ Category

It warms my heart to see the mainstream media doing its job (well somewhat and only with Benghazi, IRS and the AP). Now its time for them to prove their meddle. Since they are awake, alert and paying attention, perhaps they could investigate the twenty scandals ignored since Obama became President in January 2009.

According to the information about the Justice Dept. investigation of the Associated Press, Holder’s troops got the phone information of 100 reporters Hey AP this is a great way to get back at the administration assign each of the stories below to a reporter, you still would have 80 others to cover other news.

What about the other news organizations–I am not asking they investigate all twenty, perhaps they could split them up one or two per liberal media organization.

Here’s my twenty–I am sure there are others but with these twenty plus the three new ones the mainstream media has enough–they have five years to catch up on:

Going to war in Libya without first seeking congressional approval.

The administration’s screwing of the primary GM investors so he could give the company to his buddies in the UAW.

Offering Joe Sestak a White House job to drop out of the Senate race against Arlen Specter

Offering Andrew Romanoff a White House job to drop out of the Senate Race against Michael Bennett.

Dropping an already won case against the New Black Panthers.

Refusing to prosecute African Americans for Civil Rights violations.

Ignoring a court order to ease up on restrictions against deep water drilling in the Gulf of Mexico, instead issuing tougher restrictions.

Circumventing the Senate by setting up a “shadow cabinet” of Czars.

Obama’s Justice Department’s refusal to defend the Defense of Marriage Act (DOMA).

Ignoring his constitutional responsibility to defend laws passed by Congress.

Firing (and slandering) AmeriCorps inspector general Gerald Walpin after because he was investigating Sacramento Mayor Kevin Johnson a friend of the Obamas.

Practicing crony capitalism and wasting taxpayer money with Green energy loans to Solyndra and other failing companies.

No bid contract given to a company owned by major Obama donor for a small pox vaccine that doesn’t work.

Fast and Furious: Giving guns to Mexican drug cartels in an attempt to take away guns from law abiding Americans.

Making recess appointments when congress was not in recess.

Trampling on the Catholic Church’s first amendment rights by forcing them to pay for procedures and drugs that their faith bans.

The GSA and Secret Service scandals neither of which should be blamed on Obama directly, both of which show his poor management of the federal government.

Receiving foreign donations for his 2012 campaign.

Slashing the pensions of Delphi’s non-union employees leaving the UAW employees’ pensions alone.

The Administration purchasing bullets to drive up costs/ empty supply.

Prosecuting Thomas Drake, NSA whistle-blower who leaked unclassified information about government waste and fraud.

His name was Fleming, and he was a poor Scottish farmer. One day, while trying to make a living for his family, he heard a cry for help coming from a nearby bog. He dropped his tools

and ran to the bog.

There, mired to his waist in black muck, was a terrified boy, screaming and struggling to free himself. Farmer Fleming saved the lad from what could have been a slow and terrifying death.

The next day, a fancy carriage pulled up to the Scotsman’s sparse surroundings. An elegantly dressed nobleman stepped out and introduced himself as the father of the boy Farmer Fleming had saved.

‘I want to repay you,’ said the nobleman. ‘You saved my son’s life.’

‘No, I can’t accept payment for what I did,’ the Scottish farmer replied waving off the offer. At that moment, the farmer’s own son came to the door of the family hovel.

‘Is that your son?’ the nobleman asked.

‘Yes,’ the farmer replied proudly.

‘I’ll make you a deal. Let me provide him with the level of education my own son will enjoy If the lad is anything like his father, he’ll no doubt grow to be a man we both will be proud of.’ And that he did.

Farmer Fleming’s son attended the very best schools and in time, graduated from St. Mary’s Hospital Medical School in London, and went on to become known throughout the world as the noted Sir Alexander Fleming, the discoverer of Penicillin.

Years afterward, the same nobleman’s son who was saved from the bog was stricken with pneumonia.

What saved his life this time? Penicillin.

The name of the nobleman? Lord Randolph Churchill . His son’s name?

Sir Winston Churchill.

Someone once said: What goes around comes around.

Work like you don’t need the money.

Love like you’ve never been hurt.

Dance like nobody’s watching.

Sing like nobody’s listening.

Live like it’s Heaven on Earth.

It’s National Friendship Week Send this to everyone you consider A FRIEND.

Pass this on, and brighten some ones day.

AN IRISH FRIENDSHIP WISH:

I hope it works…

May there always be work for your hands to do;

May your purse always hold a coin or two;

May the sun always shine on your windowpane;

May a rainbow be certain to follow each rain;

May the hand of a friend always be near you;
May God fill your heart with gladness to cheer you.

and may you be in heaven a half hour before the devil knows you’re dead.

OK, this is what you have to do…. Send this to all of your friends.

But – you HAVE to send this within 1 hour from when you open it!

Now…..Make A wish!! I hope you made your wish!

Now then, if you send this your wish will be granted in to:

1 person — 1 year
3 people — 6 months
5 people — 3 months
6 people — 1 month
7 people — 2 weeks
8 people — 1 week
9 people — 5 days
10 people — 3 days
12 people — 2 days
15 people — 1 day
20 people — 3 hours

If you delete this after you read it, you will have 1 year of bad luck!

But, if you send it to 2 of your friends, you will automatically have 3 years good luck!!!

By American Vision.org

We have seen now how America was originally settled with nearly all governmental sovereignty vested at the local level. This was the legacy of Christian culture, and the better part of it. Early Americans did not have to worry about their wealth and freedom being voted away by alleged representatives far removed by hundreds of miles and two or three levels of government. We have also seen that this ideal of freedom has been lost gradually over time at many junctures, and always in the name of something like “the common good”; but more importantly, we have seen that these several creeping tyrannies were enabled and empowered by that one main instance of centralizing power, force, and money at the federal level—the Constitution of 1787. Nevertheless, whatever the causes are ultimately, it is easy to see that we today have nowhere near the freedom of our ancestors. The question, now, is how to get back to that level of freedom.

In this section, I intent to discuss the new mindset we need, some hurdles to overcome, and some practical actions to take toward restoring local freedom and local sovereignty. By “local sovereignty” I mean freedom of local governments from the dictates of higher levels of government. We must return to local control, and free local institutions from the bands and shackles of the federal and state machineries that entrap locals with grant money, encroachments on power and local decisions, licensing, and regulations. By the similar phrase “local freedom” I mean freedom of individuals from the same encroachments and impositions by their own local governments.

First, there are many hurdles in the way of gaining this freedom. The enemies of freedom have always been those who stand to profit from the public coercive systems. These people—either for the sake of some form of prestige or money (or both)—will consistently scheme and legislate to benefit themselves. These lusts exist at every level of government, but also in the hearts of individuals. So, the remedy for restoring freedom to the local level will mean confronting the many, many ways in which both individuals and government leaders have entrenched themselves in public funding based on taxation. Whether this manifests in publicly-funded construction contracts, public education, exorbitant pensions for public employees, union privileges, grants from higher governmental agencies, or a myriad of other versions of the same evil, the path to freedom means stopping these appropriations and redistributions of money, and derailing the long train of abuses of individual freedoms resulting from the alliance of the plunderers who want the money and the elites who think they can plan our lives better than we can and that they have a right to do so.

The problem ultimately is as much personal and individual as it is political. In this regard, the local and state levels are microcosms of the larger plundering going on in Washington, D.C. right now (with the exception that state and local governments have the formal inconvenience of having to balance their budgets); but local government themselves are a reflection of the lusts and corruption that local individuals choose to allow. Local governments often suffer under corrupt officials, constantly seeking to borrow more money, and constantly seeking grants from State and federal governments. But often the people themselves either agree with taking, taxing, or borrowing more money, or they are oblivious to it and don’t care.

So here’s the hard truth: if you agree with the appropriations (but perhaps you say “only at the local level”), then you’re complicit in a corrupt system that stretches all the way to Washington. Don’t talk about freedom and fiscal responsibility when you make multi-million dollar exceptions for yourself, your business, your industry, your union, your police and fire, or your local schools. Obama’s not the problem; you’re the problem. Until you address this problem, you have no moral authority in regard to people doing way over your head. On the other hand, if you are merely oblivious to the problem or don’t care, then you’re still culpable and complicit by your complacency—and you can bet that the liberals and statists just love you for it, for it helps them get their scheme across with less opposition. It’s been said that the only thing necessary for evil to triumph is for good people to do nothing. I agree, although I would add that anyone who sits there and does nothing can’t be considered a good person to begin with. We need to confront both corruption and complacency, which is to say we need to wake up and take responsibility, take action.

Knowing that the problem begins with the individual heart and stretches all the way up to Washington, we’ll need to confront all levels at the same time. But we must concentrate our energy and focus on the areas in which we’ll have the greatest effect—ourselves and our local governments. We have already addressed vitally-needed personal lifestyle adjustments in education and the welfare State. We have emphasized the “don’t take the cheese” principle in those areas for individuals. Now it is time to focus on that concept at the level of local government. We must work to avert all public expenditure, debt, and taxation in local government, as well as all accepting of grants from higher governmental bodies. This is the first step in returning to anything like true local sovereignty to America—her counties must be free of strings attached to all higher agencies. But since that level of freedom does not yet exist, nor will it exist completely for the duration of the process of arriving at it, we must still attend as need be to State and national politics until we reach the desired position locally. We can’t take the chance of complacency at the back door where the Feds can creep in while we’re distracted with only local matters. Even when we achieve the goal locally, however, we cannot rest until surrounding counties, and then the vast majority of counties in the State have reached a similar level of understanding and practice of local sovereignty—for until a majority of counties exist that are willing to assert their freedom simultaneously against higher governments, the few that arrive at near local autonomy will always be exposed to the weaknesses attending their tiny-minority status. In other words, we’ll need a lot of free counties voicing their “nullifications” and independences at the same time, or else the federal government could simply ignore it and squash it with little repercussion. We need mass decentralized (yet legitimate) resistance so that no central authority can easily or effectively answer it. So, until we reach a time in which a growing number of America’s 3000+ counties care more about freedom than State and Federal aid, we must be vigilant in guarding our work and prayers toward that goal—for they are never safe from the threats of violence, force, defamation, and theft from above.

In short, anyone wishing to start a truly grass-roots, bottom-up movement for restoring local sovereignty is going to face multiple levels of opposition—from the higher levels of government, from the vast mainstream media leftist-propaganda machines, from entrenched Statism even in local media such as newspapers, corporate forces that use government to stop comeptition, and also from corrupt local officials. We must be prepared to meet all of this with truth, unwavering commitment to freedom, courage, and yet calmness, confidence, and kindness.

Second, we need to affirm this new vision of decentralized power. This vision must be deep and we must commit to it thoroughly. The vision of mass decentralization was actually voiced in this country at a crucial time by the famous economist F. A. Hayek. Nearing the end of World War II, he noted that western civilization was going to need to be rebuilt, and that this task would have to be done amidst an atmosphere in which Communism thrived as a powerful force, the forces and ideas behind National Socialism and fascism were still very strong, and academia was (as it still is) strongly socialist or even communist throughout the West. Hayek argued in his famous book, The Road to Serfdom, that any attempts at rebuilding along the lines of any large socialized, nationalized State would be doomed to failure sooner or later. His important conclusion was this:

We shall not rebuild civilization on the large scale. It is no accident that on the whole there was more beauty and decency to be found in the life of the small peoples, and that among the large ones there was more happiness and content in proportion as they had avoided the deadly blight of centralization. . . Nowhere has democracy ever worked well without a great measure of local self-government . . .Where the scope of the political measures becomes so large that the necessary knowledge is almost exclusively possessed by the bureaucracy, the creative impulses of the private person must flag. I believe that here the experience of the small countries like Holland and Switzerland contains much from which even the most fortunate larger countries like Great Britain can learn.  We shall all be the gainers if we can create a world fit for small states to live in.[said, “The purpose of meetings is not to record events, it is to protect people.” Go for everything you can find or have a desire to get.

Second, then start a blog or website dedicated to making your local government as public and transparent as possible. You can be as detailed or selective as necessary, as long as it’s honest and open. Post everything you can. Show any clear connections, show every cent that is taxed, how it is assessed and collected, how it is spent; show every cent borrowed and who profits from borrowing against future taxation, and who holds the bond. Show how much elected officials and public employees of all sorts are paid, and what their public pension benefits look like. This is all perfectly legal. WordPress and Blogger are absolutely free and easy to use. It would be great to have at least one such website dedicated to ultimate transparency in each of America’s 3000+ counties. It would better to have several in each county. Variety, choice, and competition will make them better and more effective. These would make fabulous projects for students; but really, anyone could do this, and everyone should.

Then, add video. This can be done merely on a YouTube or other video site’s channel, or better yet, embedded in a website. Record meetings, obtain interviews with officials whenever possible. Some local governments already record their meetings and post them themselves. The point is to have a clear and open public record, and get the word out to as many people, and make everything about local government as accessible and understandable to as many people as possible. This will lead, eventually, to the election of board members, judges, sheriffs, assessors, collectors, etc., who better represent a greater percentage of the population, and better represent local values; it will increase accountability; and it will help end corruption, self-serving, and waste. Taxes will decrease in many localities, choices will open up, people will be freer.

You should know that these ideas and these tactics are being upheld and implemented already with success. Some counties are beginning to assert local sovereignty against State and federal encroachments. For example, the local town of Sedgwick, Maine, recently declared absolute sovereignty over its local food supply. They were tired of state and federal regulations of local meat, raw milk, etc. So they declared their right and determination to be free of the tyranny: their new ordinance says, “[O]ur right to a local food system requires us to assert our inherent right to self-government. We recognize the authority to protect that right as belonging to the town of Sedgwick.” They considered State and federal regulations as “usurpation of our citizens’ right,” and went on to declare, “It shall be unlawful for any law or regulation adopted by the state or federal government to interfere with the rights recognized by this Ordinance.” This was applied also for “any corporation” that would try to interfere. The town argued that these claims to local sovereignty are supported by the Declaration of Independence, the Maine State Constitution, and other Maine statutes. They reserved the right even to secede completely if necessary in the face of a contest.

That Sedgwick, Maine ordinance is currently being used as a model to resist federal regulation in many other municipalities. These will certainly lead to court battles and possibly intimidation from higher governments, but the fact that they exist and people are advancing them shows that the vision for local sovereignty is growing and can be implemented. The fight is only begun, but it has begun.

This is true in other areas as well, as some local counties and even States have declared that they will not honor Obama’s Health Care Act, but have declared it null within their jurisdictions. Some States have declared all federal firearm laws null and void within their boundaries, for guns or ammo manufactured there. There are at least a dozen or more areas in which States currently are nullifying Federal laws. And as this precedent becomes more prevalent in States, it will only make moral sense to extend it to counties. Local sovereignty, county sovereignty, will grow more viable as well.

This is, after all, the foundation of American freedom: the first American declaration of independence was not that of 1776, but was written by a single county. Mecklenburg County, North Carolina, formally declared independence from Great-Britain on May 31, 1775, saying that “the Authority of the King or Parliament, are annulled and vacated.” They proceeded to set up an interim government all by their lonesome, until (as they expected) the rest of the Colonies should catch up.

Cases of local freedom—individuals asserting control over corrupt local officials—are occurring as well. In one case, a small town council in South Carolina had very quietly been paying itself an extremely rich pension package. When a few local business owners found out, they were outraged. At least one council member was opposed, and the businessmen approached him with a plan. They then showed up impromptu at a council meeting with video camera running. They got them members to confirm the terms of the rich package, and then asked for a show of hands on the council of all those who disapproved of it. The lone honest member of the council jetted his hand high, and the rest were caught on video exposed. The businessmen then simply thanked the council and left with the video. The council was so scared that it called a recess and chased the inquirers into the parking lot, trembling, asking what there were going to do with the video! They knew good and well.

In a similar case, a seventeen year-old kid exposed the appointment of a school superintendant whom a school board tried to rush through because he would be a big spender on behalf of the district. By simply showing up at both the interview process and the board meetings with a digital recorder, the corrupt thugs were caught, and were trembling in fear.

Another local contact of mine has been fighting these kind of battles for several years. He’s watched his community deteriorate with a combination of Federal Section 8 housing and corrupt local investment trusts, much of which came about only after an influx of “free school lunch” programs and Title 1 status gained for local public schools to receive massive federal aid. There is much to discern and sort out here, but the bottom line is corrupt local fat cat officials using government grants to empower and enrich themselves. And they are protected by liberal politicians above them, for several reasons. My contact said he started attending board meetings to record what was said. Very early on, one of these fat cats approached him with suspicious questioning and threatening demeanor—essentially threatening to wreck his career. The man is now very paranoid, because he has seen how deeply the corruption goes in his area, and how serious some of the insiders are about keeping it that way. There is work to be done here.

Another man wrote me telling how he won a seat on his local commission because the local conservatives were raising taxes and spending like crazy. He simply took a strong “TEA-party” stand against spending and corruption, and he was elected—despite overwhelming opposition from the local papers, labor unions, and even the local Chamber of Commerce. The local Chamber opposed him because it was dominated by big businesses that favor big-government for their corporate welfare. In other words, the local Chamber itself was corrupted by the forces of wealth redistribution. It had taken the cheese, and was now entrapped. My friend won the election nevertheless, but still faces an uphill fight against complacent and complicit officials, and, as he put it, “the grip that federal grants place on local units.”

There are some successes out there. But there are currently many challenges. One of the good things about seeing how deep and real the challenges are is that we realize how much more entrenched, powerful, and worse it must be at the higher levels, certainly in Washington, D.C. The nature of the problem is exactly the same; it’s just magnified at the national level. If we can’t dismantle tyranny locally, you can forget it happening in D.C. But this is what is encouraging about the successes we’re seeing: we in fact can have an effect locally, and many people are. There is a lot of work to do, and a lot of hill to climb. It will take time. But remember, we are planning for our grandchildren. It is time to start, get busy, and get a steady pace of reform.

It begins with people caring about the problem. It advances when people get focused, study, and explain the problem. It succeeds when they take action on the problem. This is county rights in action. It will only work when you get involved. For people can only be free if they will be responsible and courageous.

 

Tunisia has undergone increasing economic liberalization over the last decade: In the 2010-2011 World Economic Forum’s Global Competitiveness Report, it was ranked as the most competitive country in Africa, as well as the 32nd most economically competitive country globally.   North Africa’s large Muslim populations are a vast business opportunity for Islamic banking and other businesses.

Jacob Rothschild, senior member of the British branch of the Rothschild dynasty

Contrary to popular belief, the world’s finances are controlled by privately-owned “central banks” masquerading as federal government banks in nearly every country in the world  [The U.S. Court of Appeals, Ninth Circuit, ruled that The Federal Reserve (U.S.' central bank) was privately owned in 680 F.2d 1239, LEWIS v. UNITED STATES of America, No. 80-5905].

Though it is a carefully guarded secret, the Rothschilds and their associates own most the shares in the central banks (Federal Reserve Directors: A Study of Corporate and Banking Influence, Committee on Banking, Currency and Housing, House of Representatives, 1976, Charts 1-5) (Mullins, Eustice  Secrets of the Federal Reserve 1983).   With extremely little government input, the economies of Tunisia, Egypt, Yemen, Jordan, and Algeria are strictly controlled by the Rothschild’s central banks and their International Monetary Fund.

————————————————————————————————————————–

THE MOTIVE: FOLLOW THE MONEY

Islamic banks have been eating into Rothschild profits in the Middle East because: they don’t charge interest (Shariah Law), they are growing very rapidly among the world’s exploding Muslim populations, and (in these catastrophic economic times) they are more stable than western banks.

While it is a very good thing that people are freed from the tyranny of dictators, they also need to be freed from the tyranny of economic control and serfdom.  The relevant moral question is: Do the means justify the end?.

Ben Ali’s son-in-law El Materi at the opening of his Zitouna Bank, North Africa’s first Islamic bank, last May

Deposed Tunisian President Ben Ali’s son-in-law, Sakher El Materi, opened Tunisia’s first Islamic bank, Zitouna Bank, on May 26, 2010.   Zitouna Bank is the first Islamic bank in the Maghreb region[North Africa].   The bank was a first step toward Ben Ali’s new program of extensive reforms, “Tunisia, a Pole for Banking Services and a Regional Financial Centre”, which would have undermined the power and the profits of the Central Bank of Tunisia (privately-owned by the Rothschilds and their associates).

Tunis Financial Harbour opened last October 19. Its the first offshore finance centre in North Africa.

The Telegraph (October 19 2010) reported on the opening of the megaproject Tunis Financial Harbour –President Ben Ali’s bid to make Tunisia the regional financial centre of North Africa and beyond: “Islamic investment bank Gulf Finance House (GFH) and the Tunisian government have created the first offshore finance centre in North Africa.  The centre will be part of Tunis Financial Harbour, a $3 billion waterfront development in Tunis . . .  GFH, which is based in Bahrain, hopes the centre will allow Tunisia to take advantage of its strategic position on the Mediterranean sea, and operate as a bridge between the EU and the rapidly growing economies of North Africa [and subSaharan Africa].”

“However, despite the current poor climate, the potential for Islamic banking in Egypt is huge, and one should expect more moves from Abu Dhabi Islamic Bank into Egypt, possibly in the form of a buyout,”  Executive Magazine (Feb 8 2011) reports, “A recent Middle East Business Intelligence report said it best, when it opined, ‘If Abu Dhabi Islamic Bank can make a success of offering Islamic products, the whole market will open up. We have already seen some of the local banks start to advertise their Islamic products in view of the competition for customers they see about to begin.’

“Clearly Islamic banks in the Gulf are already anticipating the day when their home markets are saturated. And it appears that Egypt will be on the next front-line in the development of regional Islamic banking and finance.”

“African countries such as Algeria, Egypt, Libya, Morocco, Tunisia and Sudan are keen on future sukuk exercises (issuing Islamic bonds). Gambia debuted with a US$166m sukuk deal, privately sold in the US in 2006.”  [International Finance Review (Reuters), 2008]

The New York Times article “Islamic banking rises on oil wealth, drawing non-Muslims” ( November 22, 2007) reported:   “Rising oil wealth is lifting Islamic banking – which adheres to the laws of the Koran and its prohibition against charging interest – into the financial mainstream. . . . In addition to Islamic loans, there are Islamic bonds, Islamic credit cards . . . Loans and bonds that conform to the Koran are already available in the United States. . . .

“’This is an industry on its way from a niche industry to becoming a truly global industry,’ said Khawaja Mohammad Salman Younis, the managing director for operations in Malaysia for Kuwait Finance House, the world’s second-largest Islamic bank.  ‘In the next three to five years you’ll see Islamic banks coming out in Australia, China, Japan and other parts of the world.’

“In Islamic banking, financiers are required to share borrowers’ risks, meaning that depositors are treated more like shareholders, earning a portion of profits.  Financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.

“The stampede into Islamic finance is mostly an effort to tap an estimated $1.5 trillion of funds sloshing around the Middle East, largely from higher oil prices.  . . .Those investments have helped ignite an economic revival throughout the Muslim world at a time of increasing religious conservatism among Islam’s 1.6 billion faithful.  A result is expanding demand for financial services that adhere to Islamic law  . . .

“And while the biggest Islamic banks are in the wealthy Gulf states, the most attractive potential markets are in Turkey and North Africa (emphasis added) and among European Muslims. . . .

“. . . even non-Muslims are taking advantage of a growing range of Islamic products offering competitive returns.  For instance, David Ong-Yeoh, a public relations executive tired of fretting over the rising interest rate on his adjustable rate mortgage, refinanced to a 30-year fixed loan from an Islamic financial institution. Now, he pays regular installments that include a predetermined profit margin for the bank.

“’The terms are better than on conventional loans,’ said Ong-Yeoh, 41.

“Islamic finance also avoids other prohibited practices.  Shariah-compliant bankers cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.  Proponents of Islamic banking say these are limits any socially conscious investor can support, Muslim or not. They also envision wider appeal for Islamic banking’s ban on interest, which stems from the Koran’s prohibition against usury.

“This is a view that has a long religious and historical tradition.  Interest is repeatedly condemned in the Bible. Aristotle denounced it, the Romans limited it, and the early Christian church prohibited it. . . .

“The belief that all interest charges are unjust now underpins Islamic finance. . . .Hoarding is frowned upon in the Koran, so savings earn no return unless put to productive use.

“’Money should be used for creating better value in the country or the economy,’ Maraj said. ‘Money cannot generate money.’

“Nor can Islamic banks simply trade money.  ‘In the Islamic finance model, the banks are supposed to mobilize funds through a fund management concept,’ said Rafe Haneef, head of Islamic banking in Asia for Citigroup.

“Indeed, Islamic banking is supposed to function more like private equity firms than conventional banking. ‘Private equity is an Islamic concept,’ Haneef said.

“Industry proponents say this risk-sharing requirement helps reduce the kind of abuses that led to the subprime mortgage mess in the United States. Scholars consider it un-Islamic to overload a customer with debt or invest in a company with excessive debt.”

The Washington Post, “Islamic Banking: Steady In Shaky Times” (Oct 31 2008), reported:  “As big Western financial institutions have teetered one after the other in the crisis of recent weeks, another financial sector is gaining new confidence: Islamic banking.  Proponents of the ancient practice, which looks to sharia law for guidance and bans interest and trading in debt, have been promoting Islamic finance as a cure for the global financial meltdown.

“This week, Kuwait’s commerce minister, Ahmad Baqer, was quoted as saying that the global crisis will prompt more countries to use Islamic principles in running their economies. U.S. Deputy Treasury Secretary Robert M. Kimmet, visiting Jiddah, said experts at his agency have been learning the features of Islamic banking.

“Though the trillion-dollar Islamic banking industry faces challenges with the slump in real estate and stock prices, advocates say the system has built-in protection from the kind of runaway collapse that has afflicted so many institutions. For one thing, the use of financial instruments such as derivatives, blamed for the downfall of banking, insurance and investment giants, is banned. So is excessive risk-taking.

“’The beauty of Islamic banking and the reason it can be used as a replacement for the current market is that you only promise what you own [contrast to western banks fractional reserve system].  Islamic banks are not protected if the economy goes down — they suffer — but you don’t lose your shirt,’ said Majed al-Refaie, who heads Bahrain-based Unicorn Investment Bank.

“The theological underpinning of Islamic banking is scripture that declares that collection of interest is a form of usury, which is banned in Islam. In the modern world, that translates into an attitude toward money that is different from that found in the West: Money cannot just sit and generate more money. To grow, it must be invested in productive enterprises.

“’In Islamic finance you cannot make money out of thin air,’ said Amr al-Faisal, a board member of Dar al-Mal al-Islami, a holding company that owns several Islamic banks and financial institutions. ‘Our dealings have to be tied to actual economic activity, like an asset or a service. You cannot make money off of money. You have to have a building that was actually purchased, a service actually rendered, or a good that was actually sold.’

“Islamic bankers describe depositors as akin to partners — their money is invested, and they share in the profits or, theoretically, the losses that result. (In interviews, bankers couldn’t recall a case in which depositors actually lost money; this shows that banks put such funds only in very low-risk investments, they said.)”

It is easy to see why the Rothschilds and their network of conventional western banks would be threatened by competition from the more appealing, more conservative Islamic banks.

Late in 2008, French Finance Minister Christine Lagarde announced France’s intention to make Paris “the capital of Islamic finance” and said several Islamic banks would open branches in the French capital in 2009.  French sources estimate this area of the financial market is worth from 500 to 600 billion dollars and could grow by an average 11 percent a year.

John Sandwick, managing director of Swiss asset management firm Encore Management, characterized the opening of several Swiss Islamic banks as, “the race to control the rich prize: which today is worth hundreds of billions, but in the future will be trillions of dollars of Islamic wealth.”

“According to Standard and Poor’s, Islamic banking assets reached about $400 billion throughout the world in 2009. In November 2010, The Banker published its latest authoritative list of the Top 500 Islamic Finance Institutions with Iran topping the list. Seven out of ten top Islamic banks in the world are Iranian according to the list.” (iStockAnalyst, Feb 8, 2011)

BEN ALI’S SON OPENS FIRST ISLAMIC BANK IN ATTRACTIVE NORTH AFRICAN MARKET

Commenting on the opening of Zitouna (Islamic) Bank, International Business Times (May 28 2010) reported, “North Africa has begun to embrace Islamic finance after years watching from the sidelines, partly to channel more Arab Gulf petrodollars into the region. . . .Tunisia has one of the most open economies in the region and attracts substantial investment from the European Union, something that is expected to accelerate after 2014, when the government has said it will make the currency (the Tunisian dinar) fully convertible.”

Global Islamic Finance News (May 31, 2010) reported, “Zitouna Bank also seeks to impart a regional dimension on its activities, particularly in the Maghreb region [North Africa], all the more so that it is the first specialised bank not belonging to a foreign banking group,” and went on to add, “The Bank will also seek to forge strong relations with the Maghreb and Mediterranean banks to ensure needed flow of financial operations for its customers.  The bank officials stressed that the financial institution has established relations with 12 Islamic banks in collaboration with the Institute of Islamic banks in Bahrain.

Zitouna bank’s formation had been announced earlier in the Official Gazette of the Republic of Tunisia on 10 September 2009.   Tunisia and Morocco authorized Islamic finance in 2007, partly to channel more investment into their fast-growing tourism and real estate industries.

Due to his being the son-in-law of President Ben Ali, El Materi’s Zitouna Bank was expanding in Tunisia to the level of monopoly.   El Materi had built a powerful business empire:  he ran businesses in News and Media, Banking and Financial Services, Automotive, Shipping and Cruises, Real Estate and Agriculture, Pharmaceuticals and last November 22 he  bought a 50% stake in Orascom Telecom for 0.2 billion.

The newly-opened Tunis Financial Harbour was on the brink of becoming the regional financial centre of North Africa and, with its strategic position on the Mediterranean sea, becoming a bridge between the EU and the rapidly growing economies of North Africa and subSaharan Africa.

On January 20 2011, ZItouna Bank, Tunisia’s first Islamic bank was seized by the Central Bank of Tunisia (Rothschilds).  The bank owned by Sakher El Materi, the thirty-year-old son-in-law of deposed Tunisian leader Zine El Abidine Ben Ali has been placed under “the control” of the central bank.    Materi is presently in Dubai.  The move came a day after 33 of Ben Ali’s clan were arrested for crimes against the nation.  State television showed what it said was seized gold and jewellery.  Switzerland has also frozen Ben Ali’s family assets.

EGYPT’S ISLAMIC BANKS THREATENED BY ROTHSCHILD REVOLUTION:  OLD MAN POTTER VS HARRY BAILEY

A still from the film “It’s A Wonderful Life”

The following scenario is right out of the 1946, Frank Capra film It’s a Wonderful Life with Old Man Potter (Rothschild) creating a run on Harry Bailey’s traditional Savings and Loans (Islamic bank):

Islamic (halal) banking products have not made significant inroads in North Africa yet, except in Egypt.   “. . . There are several Islamic banks operating in Egypt: Faisal Islamic Bank, Al Baraka Egypt (Al Ahram Bank) and Abu Dhabi Islamic Bank NBD . . .  There may be others as well,” says Blake Goud, an expert on Islamic Finance (The Review – Middle East, Jan 31 2011), “. . . and the risks of a run on the bank should concern those interested in Islamic banking around the world because it could provide a test of how resilient Islamic banks really are to crisis.

“What I mean is that the Egyptian situation, which could be a fantastic opportunity for the Egyptian people, could expose a weakness within the Islamic banking industry if it is problematic. The main risk to any bank is that there is a run and the bank cannot meet depositor withdrawals with the cash available on hand. This forces the bank to raise cash from other means. In most cases, it can either get an inter-bank loan from another bank overnight that allows it to handle withdrawals. If other banks are hesitant to lend to a given bank because of fears of asset quality, then the bank will usually have access to an overnight borrowing facility with the central bank, which operates as the lender of last resort.

“The key for Islamic banks is that they are not able to take advantage of the inter-bank lending market, nor are they able to borrow from (or lend to) the central bank (emphasis added) because those loans are interest-bearing. The only alternative is to find other banks (mostly Islamic banks) willing to extend Shari’ah-compliant, bilateral loans often using commodity murabaha. In a country like Egypt where the Islamic banking industry is a small portion of the total banking system, it does not create a systemic risk if Islamic banks fail, but it does matter a lot to the depositors of other Islamic banks in the country and globally. If there is the potential that a run on an Islamic bank will not be stopped by someone; whether that is a foreign bank, a multi-lateral bank like the Islamic Development Bank or the central bank of Egypt (through emergency measures), then it could hurt confidence in Islamic banks.

“If neither of these options are available, the bank will have to try to raise funds by selling its assets, most of which (loans) are illiquid in the short run. It will have to take a loss on the sale to realize the cash it needs to meet withdrawals. If this continues and the bank sells enough assets at a discount to the value they are held on the balance sheet, the bank’s equity will be negative (the value of assets minus liabilities) and it will become insolvent (having earlier only been illiquid). This is the fundamental danger in banking from a financial stability perspective. If enough banks face runs and have to sell assets, the run could become self-sustaining and contagious. Even a healthy bank facing a run can become insolvent.

“The loss of confidence is more than just a reputational hit and a hit on the egos of Islamic bankers.  It would make it more difficult for Islamic banks to attract and retain depositors and it could raise the cost at which it can attract depositors. This would make the bank, all other things equal, less profitable (it makes profit of the spread between the return on invested funds and the cost of funds borrowed from depositors).  Lower profitability will lower the attractiveness of Islamic banks to equity investors limiting their ability to increase capital through equity offerings (or at least increasing the dilution to current shareholders). It will lower the amount available to supplement capital as well as pay dividends to its shareholders.

“Therefore, it is important that the Islamic banks in Egypt make it through the ‘run’ that is predicted if it materializes, not just for those banks’ shareholders, but also for the Islamic banking industry.”

In contrast, Bloomberg reports, “Egypt’s banks may risk a surge in customer withdrawals when they open for business, placing them among companies worst hit by the nationwide uprising against President Hosni Mubarak. … Central Bank Governor Farouk El-Okdah said in a telephone interview Jan. 29 that his bank has $36 billion in reserves, enough to accommodate investors should they wish to withdraw funds. His deputy, Hisham Ramez, said interbank lending “will function properly” when banks are reopened. He said the security situation will determine when that is possible.

“Asked about the risk of a bank run, Mohamed Barakat, chairman of state-run Banque Misr and head of the country’s banking association, said in a telephone interview that Egyptian lenders are ‘very liquid,’” with average loan-to-deposit ratios of 53 percent. […] “The Egyptian interbank offered rate, the rate banks charge to lend to each other, is at a 16-month high of 8.5 percent.”

THE MEANS: SPONSOR PRO-DEMOCRACY ACTIVISTS

These Rothschild revolutions are done under the pretense of bringing democracy and deposing despots, but the real aim is to initially create chaos and a leadership vacuum, then quickly offer a solution: install a puppet that will do the economic bidding of the Rothschilds.   The citizens gain freedom of speech and association, but become economic serfs.

These revolutions are most likely coordinated at the highest levels by the Rothschild’s International Crisis Group.  Mohamed ElBaradei is already being touted as a new leader for Egypt. ElBaradei is a trustee of the International Crisis Group.  Another board member of this group is Zbigniew Brzezinski.  George Soros sits on the executive committee.  The later two are ubiquitous front men for the Rothschilds.

The revolutions are from the same playbook as the fairly nonviolent “color revolutions”.  These revolutions have been successful in Serbia (especially the Bulldozer Revolution (2000), in Georgia’s Rose Revolution (2003), in Ukraine’s Orange Revolution (2004), in Lebanon’s Cedar Revolution and (though more violent than the previous ones) in Kyrgyzstan’s Tulip Revolution (2005), and Tunisia’s Jasmine Revolution.    Iran’s Green Revolution (2009) was unsuccessful.

Billionaire George Soros funded training of activists in North Africa.

The Guardian reported (Nov 26, 2004) that the following were “directly involved” in organizing the colour revolutions:  George Soros’ Open Society Foundation, the National Endowment for Democracy (NED), the International Republican Institute, and Freedom House.   The Washington Post and the New York Times also reported substantial Western involvement in some of these events.

Activists from Otpor in Serbia  have said that publications and training they received from the US based Albert Einstein Institution staff have been instrumental in the formation of their strategies.   The Albert Einstein Institution is funded by the Soros Foundation and NED. (Wikipedia)

In the article, “Georgia revolt carried mark of Soros” (November 26, 2003), theGlobe & Mail reported, “[Soros' Open Society Institute] sent a 31-year-old Tbilisi activist named Giga Bokeria to Serbia to meet with members of the Otpor (Resistance) movement and learn how they used street demonstrations to topple dictator Slobodan Milosevic. Then, in the summer, Mr. Soros’s foundation paid for a return trip to Georgia by Otpor activists, who ran three-day courses teaching more than 1,000 students how to stage a peaceful revolution.”

Egyptian activists wearing Otpor shirts. Otpor was started by Soros in Serbia and has trained activists in other colour revolutions

Several protest organizers on the streets in Egypt last week were wearing Otpor t-shirts.   These t-shirts are given out by Otpor at training sessions.  This is only to say that there may be a link here, between Soros and Tunisian protesters.

In 2007-08, Freedom House [funded by Soros and the Middle Eastern Partnership Initiative (MEPI)] ran the following program: “New Generation of Advocates, a MEPI-funded program that supports young civil society activists working for peaceful political change in the Middle East and North Africa, spearheaded the “Lawyers against Corruption” campaign in Tunisia.”(Freedom House website).  The group of “journalists, lawyers, and other activists who advocate for democratic reform” had a meeting with then Secretary of State Condoleezza Rice, on a trip to Washington on International Human Rights Day, December 10, 2008.  In May 2009, U.S. Secretary of State Hillary Clinton met with the group of activist/dissidents.  Freedom House reported on their website that the group also visited “U.S. government officials, members of Congress, media outlets and think tanks . . . After returning to Egypt, the fellows received small grants to implement innovative initiatives such as advocating for political reform through Facebook and SMS messaging.”(emphasis added)

And also from the Freedom House website: “From February 27 to March 13 [2010], Freedom House hosted 11 bloggers from the Middle East and North Africa for a two-week Advanced New Media Study Tour in Washington, D.C.”

In 2010, Soros’ Open Society Institute funded a grant called ‘Can It Tweet its way to Democracy? The promise of Participatory Media in Africa’ described on the OSI website as “. . . . Ethiopia and Egypt have been the current focus of the research programme; the OSI funding will allow the project to be expanded to include: Uganda, Zimbabwe, Tunisia, Eritrea and Rwanda. . . . it is hoped that it will contribute to the understanding of the new media in Africa and its links to democratization.  It is also intended that the study will be used as a source material for future research.”

Facebook and Twitter were the primary means of organizing the revolution in Egypt:  “Activists from Egypt’s Kifaya (Enough) movement – a coalition of government opponents – and the 6th of April Youth Movement organized the protests on the Facebook and Twitter . . . .” (Voice of America)

In the Foreign Policy Journal, Dr. D.K. Bolton (Jan 19 2011) writes, “NED [National Endowment for Democracy] and Soros work in tandem, targeting the same regimes and using the same methods. . . . At least ten of the twenty-two directors of NED are also members of the plutocratic think tank, the Council on Foreign Relations . . . .” (The Council of Foreign Relations is the American sister of the Rothschild’s Royal Institute of International Affairs in Britain: both are instruments of plutocratic control hiding in plain sight.

The following is a partial list of grants from the NED website for 2009 (the latest year available):

In Tunisia the focus was on training youth activists:

“Al-Jahedh Forum for Free Thought $131,000 To strengthen the capacity and build a democratic culture among Tunisian youth activists.

“Mohamed Ali Center for Research, Studies and Training $33,500 To train a core group of Tunisian youth activists on leadership and organizational skills to encourage their involvement in public life.  [MACRST] will conduct a four-day intensive training of trainers program for a core group of 10 young Tunisian civic activists on leadership and organizational skills; train 50 male and female activists aged 20 to 40 on leadership and empowered decision-making; and work with the trained activists through 50 on-site visits to their respective organizations.

“Association for the Promotion of Education $27,000 To strengthen the capacity of Tunisian high school teachers to promote democratic and civic values in their classrooms. APES will conduct a training-of-trainers workshop for 10 university professors and school inspectors, and hold three two-day capacity building seminars for 120 high school teachers . . . .”

The above organizations and others have been recipients of ongoing NED grants in Tunisia, as the following list from previous years indicates:

2008:  Al-Jahedh Forum for Free Thought received $57,000 to train Tunisian activists;   Mohamed Ali Centre for Research got $37,800;  Tunisian Arab Civitas Institute, $43,000 for training teachers in “civic values” and  the Center for International Private Enterprise, $163,205 “to inculcate free enterprise doctrines among Tunisian businessmen, which reflects what NED is really aiming for in its promotion of “democracy and civil values”: globalization” (Bolton, 2011)

2007:  AJFFT received $45,000 to develop Tunisian Activists;  The Arab Institute for Human Rights got $43,900;  The Center for International Private Enterprise (CIPE) $175, 818;  The Mohamed Ali Center for Research, Studies, and Training $38,500; Moroccan Organization for Human Rights $60,000 “To strengthen a group of young Tunisian attorneys as they mobilize citizens on reform issues.”

In Egypt, the number of NED grants doubled in 2009 to 33 democracy projects totaling $1.4 million and the focus changed from promoting private enterprise to training young human-rights lawyers, and identifying and training youth activists.   It will be interesting to see when (if?) NED publishes its 2010 grants.  From the NED website—a sample of the grants for 2009:

Egyptian Union of Liberal Youth (EULY) $33,300 To expand the use of new media among youth activists for the promotion of democratic ideas and values. EULY will train 60 youth activists to use filmmaking for the dissemination of democratic ideas and values. The Union will lead a total of four two-month long training workshops in Cairo to build the political knowledge and technical filmmaking skills of participating youth involved in NGOs.

Andalus Institute for Tolerance and Anti-Violence Studies (AITAS) $48,900 To strengthen youth understanding of the Egyptian parliament and enhance regional activists’ use of new technologies as accountability tools. AITAS will conduct a series of workshops for 300 university students to raise their awareness of parliament’s functions and engage them in monitoring parliamentary committees. AITAS will also host 8 month-long internships for youth activists from the Middle East and North Africa to share its experiences using web-based technologies in monitoring efforts.

Bridge Center for Dialogue and Development (BTRD) $25,000 To promote youth expression and engagement in community issues through new media. BTRD will train youth between the ages of 16 and 26 in the use of new and traditional media tools to report on issues facing their communities. BRTD will also create a website for human rights videos and new media campaigns in Egypt.

Egyptian Democracy Institute (EDI) $48,900 To promote accountability and transparency in parliament through public participation, and to build legislative capacity. EDI will produce quarterly monitoring reports and hold seminars to discuss the overall performance of Parliament and offer recommendations on legislation proposed in the People’s Assembly. EDI will monitor, collect, and document evidence of corruption in Cairo and Alexandria

Lawyers Union for Democratic and Legal Studies (LUDLS) $20,000 To support freedom of association by strengthening young activists’ ability to express and organize themselves peacefully within the bounds of the law. LUDLS will train 250 youth activists on peaceful assembly and dispute resolution

Our Hands for Comprehensive Development  $19,200 To engage Minya youth in civic activism and encourage youth-led initiatives and volunteerism. Our Hands will hold two public meetings for local youth to discuss challenges and to identify youth leaders who would benefit from additional training courses. Participants will produce a short film on youth political participation, and develop and implement action plans for resolving problems facing youth in the governorate. Our Hands will also provide Minya youth an opportunity to learn from the experience of and network with Cairo-based activists and NGOs.

“Youth Forum  $19,000 To expand and maintain a network of youth activists on Egyptian university campuses and to encourage the participation of university students in student union elections and civic activities on campus. . . .”

NED and Soros have been injecting millions of dollars into the training of North African, pro-democracy teachers, lawyers, journalists and youth activists.  In 2009 they more than doubled their training efforts.  Why, at this time, has the 30-year support of these dictators been undermined?  The prize is the rapidly-rising economies of North Africa.  It coincides with the efforts of Ben Ali to make Tunisia the financial center of North Africa and to promote Islamic banking.  The Rothschilds want North African Muslims to borrow from Rothschild banks and pay interest at rates the Rothschild central bank decides:  they do not want them to be able to borrow from Islamic banks and not pay any interest.  The Rothschilds want Muslims to trade their present political oppression at the hands of brutal dictators for future economic serfdom under the control of banker Lord Rothschild.

 

Posted by Shawn Tully

The House budget chairman’s vision of bringing the market to Medicare isn’t perfect, but it’s the best choice in a world of poor alternatives.
FORTUNE — By far the most significant — and revolutionary — proposal in Congressman Paul Ryan’s 2012 budget is its blueprint for taming Medicare. According to the Congressional Budget Office’s analysis, issued on April 5th, the Ryan plan would totally reverse the course of recent fiscal history by lowering federal health care spending from 8% of GDP today to just 5% by 2050. If we remain on the current course, the spending would jump to 14% in that time frame.
The centerpiece of the Ryan manifesto is the radical new math it applies to Medicare benefits. In short, Ryan (R-Wis), chairman of the House Budget Committee, would transform the program for Americans ages 65 and older from an open-ended entitlement that threatens to swamp the budget into a system that makes fixed payments to participants each year — payments that would rise at a predetermined, predictable rate. In concept, it’s similar to the defined contribution plans most Americans now depend on for retirement: The government would provide a set dollar payment towards your health care premium, and you’d cover the balance of your health care costs, just as most Americans need to take extra savings from their paychecks for retirement.
But while you can pretty well predict what your 401K will be worth in 30 years if you invest conservatively, the outlook for tomorrow’s Medicare enrollees is far less predictable. The Ryan budget tells us how fast federal spending on Medicare will rise — far more slowly than in the past — but can’t predict how high our medical costs will be 20 years from now, and since the government’s contribution would be capped, how much of those costs we’ll need to pay for ourselves.
In effect, Ryan is asking Americans to make a historic leap of faith. He projects that the newly cost-conscious customers, who’ll inevitably be spending more of their own money, will shop far more carefully for health care. The pressure from those bargain-hunters, and the end to a regime that pays for as many tests as doctors can order, will force physician groups and hospitals to become far more efficient, and offer better prices.
“It’s very speculative how the new system would work,” says Robert Moffitt, a health care policy expert at the conservative Heritage Foundation. “But we know for sure that the Ryan plan would force private providers to compete ferociously for business, and that would introduce a degree of competition into Medicare that’s totally absent today.”
Planning for an uncertain future
Ryan’s vision of bringing the market to Medicare is the best choice in a world of poor alternatives. It’s crucial to understand how his plan differs from his previous proposals, chiefly by eliminating cost-savings from early years and imposing extraordinary limits on payments in future decades. So let’s examine Ryan’s new formula for Medicare.
Here’s a brief overview of how Medicare currently works: On average, the annual cost for its 46 million enrollees is roughly $13,000. The recipients pay total premiums of $1,326 a year for hospital visits and zero for physician services, and can purchase supplementary private Medigap policies that cover virtually all deductibles and co-pays for another $1,500 a year. So the enrollees pay a total of around $3,000, or 23% of the total $13,000 cost. Taxpayers cover the balance of $10,000.
For future retirees and budget-watchers, what matters most is how fast that $13,000 cost number rises, compared with the increase in the $10,000 that the government now pays. Ryan has a solution to the former. The latter is far harder to forecast. The gap between the two will grow, and chart what future retirees will need to pay for their own health care.
For many years, Medicare costs have been growing at between 2 and 2.5 percentage points faster than GDP, a ruinous, unsustainable rate. Even in today’s weak economy, the total Medicare bill is waxing at over 7%.
In two previous proposals, “A Roadmap for America’s Future” and a plan he co-authored with former Clinton administration budget director Alice Rivlin, Ryan recommended replacing the system of covering Medicare’s ever-expanding costs, no matter how fast they grew, with fixed contributions, in about a decade. All of the plans, including the one in the new budget, state that everyone who’s 55 and above will be allowed to remain under the existing Medicare rules when they reach 65. After the program is in place — the starting date in the budget plan is January 1st, 2022 — all Americans would be required to join once they turn 65.
Voucher replacement
In all the Ryan proposals, enrollees in the new regime would use the government’s contribution to shop from a broad array of private insurance plans offered by a Medicare exchange. That system is modeled on the highly successful Federal Employee Health Benefits Program, where government workers choose from a wide variety of offerings, from deluxe fee-for-service plans to basic high-deductible programs.
But beyond the basics, the proposal in the budget is starkly different from Ryan’s previous plans, a feature that’s mainly overlooked by the press and pundits. In the Roadmap for America, Ryan advocated a voucher system. Under that radical proposal, enrollees would receive a fixed payment of, say, $10,000 a year, in cash. If the senior bought a $7,000 plan, he or she could roll the extra $3,000 into a Medical Savings Account to pay for deductibles and co-pays.
The 2012 budget replaces the voucher concept with “premium support payments” — once again, modeled on the federal employees system — that the government would pay directly to the insurance plan the enrollee chooses. The seniors wouldn’t get to keep any cash that’s left over for out-of-pocket expenses.
The current blueprint is also substantially different from the one Ryan outlined with Alice Rivlin in November. The big change is that the new plan eliminates reforms that would have saved billions before the new regime begins in 2022. Instead, it tightens cost controls once it’s in place.
Rivlin and Ryan proposed a formula that would have imposed a tight cap on the starting contribution a decade in the future. Here’s how it worked: Take today’s average cost to the government of around $10,000 and allow it to grow at GDP plus one point. That’s far less than current growth of GDP plus two percent or more. So the Rivlin-Ryan plan would have notched large savings over the ten years before the program begins by starting with a premium support payment far smaller than the subsidy Medicare would probably be providing by that date.
But in the current budget proposal, Ryan drops that provision. Instead, the new plan would start with whatever subsidy Medicare is providing in 2022, rather than following the restrictive formula in the Rivlin-Ryan plan. The budget contains other important changes. Rivlin-Ryan recommended raising deductibles for doctor visits over the next decade to make patients more price conscious, and mandating that Medigap plans impose far higher deductibles and co-pays — another effort to get enrollees to shop for better deals. The only major change is medical malpractice reform.
Tiered benefits
The 2012 budget proposal also excludes those requirements. It essentially makes no changes to Medicare until 2022. The transformation is even more draconian than in the previous proposals. The budget plan limits growth of the government’s contribution to inflation, measured by the Consumer Price Index, and also adjusts the payments by the age of the recipient. It is by tying those premium support payments to an index that’s growing far more slowly than current medical inflation that Ryan manages to drive medical spending to just 5% of GDP in four decades.
The plan has other important features. It raises the age for eligibility from 65 to 67 between 2022 and 2033. It also provides sharply reduced subsidies for the wealthy: The top 2% of Medicare earners starting in 2022 would get just 30% of the average payment, and the next 6% would get half the average support payment. The program provides generous cash accounts of over $6,000 to poor patients to fully cover deductible and co-pays.
The big issue is how fast costs grow for the enrollees. With the inflation and age adjustment, the premium support payments will increase at a rate far below today’s relentless escalation of 7% or so a year. The success of the Federal Employees plan is highly encouraging. Its costs are growing at a rate that’s 2% lower than medical inflation in the private sector.
Even if the Ryan plan matches that success, Americans will no longer get more than 70% of their Medicare costs paid by the government. Retirees are bound to pay a much bigger share of their own medical costs. More and more seniors will choose high deductible plans, and HMO or PPO-style programs that limit choices of doctors.
Still, the rise in costs for the elderly could prove far less than the giant annual increases we’re experiencing today. We’ve simply never seen a competitive environment like the one in the Ryan blueprint. “The Obama plan is all about price controls,” says Joseph Antos, an economist at the American Enterprise Institute. “Ryan’s is all about unleashing the market.”
The Ryan plan has another major strength: It will stop heaping a bigger and bigger Medicare burden onto younger taxpayers. Ryan is making a bold, wrenching choice that wins because it’s less painful than all the others.