The clip below shows Alan Grayson arguing against Mel Watt’s amendment and then Watt’s rather angry response. Stay tuned for more clips…

This was submitted to us by author, Clyde James Aragon. He writes:

THE HEALTH REFORM PLAN TOWN HALL MEETING – THE NON-MUSICAL is a ten-minute comedy play about the health care ‘reform’ bill and is a humorous way of looking at a very scary situation. Curious, but informed citizens, meet at a town hall meeting to ask questions of their representatives on Health Care Reform.

This play is being distributed free of charge and the author, Clyde James Aragon, only asks that should it be performed, no admission be charged and that the author be given credit as having written it.

The author is an Albuquerque, New Mexico humor writer and can be reached at bookhumor@yahoo.com

You may also download the PDF here for printing out and potentially performing it at your next Tea Party event.

————————————————————-
THE HEALTH REFORM PLAN TOWN HALL MEETING
- THE NON-MUSICAL -

a one-act play by © Clyde James Aragon

CAST OF CHARACTERS:

REPRESENTATIVE BULLHORN
REPRESENTATIVE FLOWMASTER
CITIZEN #1
CITIZEN #2
CITIZEN #3
CITIZEN #4

COMEDY: 10 pages. 6 characters to be played by: 3 men; 3 woman.

SYNOPSIS: Curious, but informed citizens, meet at a town hall meeting to ask questions of their representatives on Health Care Reform. This is a ten-minute comedy play about the health care ‘reform’ bill and is a humorous way of looking at a very scary situation.

PROPS: 6 folding chairs

* * * This play is being distributed free of charge and the author, Clyde James Aragon, only asks that should it be performed, no admission be charged and that the author be given credit as having written it. * * *

**************

THE HEALTH REFORM PLAN TOWN HALL MEETING
- THE NON-MUSICAL -

a one-act play by Clyde James Aragon

(on a bare stage, two politicians, seated in folding chairs, face four citizens intent on asking the politicians questions on their health reform plan)

CITIZEN #4 (addressing the audience and then sitting down): The other day there was a town hall meeting in Montana over the new health reform bill which was presented by House Speaker Nancy Pelosi and passed by the House of Representatives. The public was invited and allowed to ask questions of the two members of the House of Representatives, Representative Bullhorn and Flowmaster, who showed up. Many things were said and, after adjourning quietly after three hours of questioning, these excerpts were extracted from the minutes of that meeting:

CITIZEN #1 (raising hand and then speaking): Representative Bullhorn, the new House health care plan is almost 2,000-pages long. How do you expect anyone to read it, let alone understand it?

REPRESENTATIVE BULLHORN: We, meaning your government, are teaming up with the Marvel Comics people to develop a comic book character called Health Reform Man who will explain, in simple laymen terms, what our health reform proposal is all about.

CITIZEN #2: Will Cleopatra, Queen of the Vampire Underworld, feature in this?

REPRESENTATIVE BULLHORN: Yes, and after explaining what our plan is about, she, Health Reform Man, and the A.C.O.R.N. Posse will go out and fight the various nemeses of our plan such as Greedy Insurance Monster, Private Fee-For-Service Doctor Thing, Alarmist Talk Show Host Ogre, and, of course, everyone in the Republican Party with the exception of moderate Republicans who want to hitch their star to a winner.

CITIZEN #1: Won’t a comic book be considered propaganda?

REPRESENTATIVE BULLHORN: No. What people are saying against this plan is propaganda. Our comic book is info-entertainment. And it will be distributed free of cost through the mail, at welfare offices, and in hospital waiting rooms everywhere. Right, Representative Bullhorn?

REPRESENTATIVE FLOWMASTER: We want everyone in America to have health care and the only way to accomplish that goal is for government to provide it.

CITIZEN #1: This is just socialized medicine.

REPRESENTATIVE BULLHORN: What else would you expect? We’re social creatures. We socialize. We’re sociable. We go to ice cream socials, we join the PTA, we volunteer to wash cars on the weekend. Could we give to the social people of this country anything less than a plan which doesn’t take into account their inbred social nature? I daresay not.

CITIZEN #1: But you’re taking away choice.

REPRESENTATIVE FLOWMASTER: No we’re not. There’s so much choice in our plan you can’t help but want it. Especially if you’re sociable. However, if you’re anti-social you’ll be able to pay a small annual fee and opt out, leaving yourself to find your own health care in backroom alleys, parking lots, through self-help books, and on the Internet.

CITIZEN #3: Why should we pay any fee?

REPRESENTATIVE BULLHORN: Actually, this isn’t really a fee. It is a yearly reminder that a better way of life is available through your government.

CITIZEN #4: Won’t illegal aliens be covered?

REPRESENTATIVE BULLHORN: No. Absolutely not.

CITIZEN #1: But all you’d need would be a few court rulings and they’d be in.

REPRESENTATIVE FLOWMASTER: That’ll never happen.

CITIZEN #2: What about space aliens. Would they be covered?

REPRESENTATIVE FLOWMASTER: Of course space aliens won’t be covered. That would break the system.

CITIZEN #2: Since we’re on the subject, will this health plan cover space-related diseases.
REPRESENTATIVE BULLHORN: Like what?

CITIZEN #2: Euphoria, for example.

REPRESENTATIVE BULLHORN: SRDs won’t be covered.
(Representative Flowmaster whispers into Bullhorn’s ear)
Uh, wait. An amendment has been introduced covering space-related diseases but only as brought to earth by NASA space missions.
(Representative Flowmaster again whispers into Bullhorn’s ear)
Uh, an amendment to the amendment has been introduced which covers all space-related diseases.

CITIZEN #1: Your plan calls for end-of-life counseling. Is euthanasia covered by this plan?

REPRESENTATIVE BULLHORN: Absolutely not.

CITIZEN #4: Isn’t abortion a form of euthanasia? That’s going to be covered.

REPRESENTATIVE FLOWMASTER: Abortion is the removal of a troublesome human-like blob of protoplasm that, for all intents and purposes, is not human. Except in Hawaii where it’s considered a type of chicken nugget.

CITIZEN #2: I love chicken nuggets. Will free chicken nuggets come with this plan?

REPRESENTATIVE FLOWMASTER: Yes, along with the special sauce of your choice.

CITIZEN #1: Poll after poll says Americans don’t want this plan. Yet you seem intent on forcing this down our throat – the public be damned. Isn’t the Democrat Party returning us to the days of Taxation without Representation?

REPRESENTATIVE BULLHORN: The Democrat Party always represents the people, some more than others.

CITIZEN #3: Didn’t Taxation without Representation lead to the American Revolution?

REPRESENTATIVE BULLHORN: Americans, at that time, were protesting the lack of government involvement in their lives. We shall fulfill that nascent yearning.

CITIZEN #2: In the song “Heartache Tonight” by The Eagles, they sing: “There’s gonna be a heartache tonight/A heartache tonight, I know/There’s gonna be a heartache tonight/A heartache tonight, I know”. Does this refer to a real heartache or an existential heartache and would break-ups be covered by this plan?

REPRESENTATIVE FLOWMASTER: We believe The Eagles referred to an ontological heartache which, most definitely, would be covered. The pain of breaking up can’t be ignored as it was in the previous administration which, as we all know, wanted to kill everyone and eat their dripping internal organs.

CITIZEN #4: You say the plan would only cost 900 billion dollars. How do you know that for sure?

REPRESENTATIVE BULLHORN: Because we’re your representatives. We would never lie to you. The only ones who would lie are Republicans and conservatives who lie about everything.

CITIZEN #1: You’re saying this plan will cost about 900 billion dollars. Isn’t that just an introductory price?

REPRESENTATIVE BULLHORN: No, it really, truly, cross my heart is what it will cost.

CITIZEN #3: Still, how do you expect to pay for this?

REPRESENTATIVE BULLHORN: We’re proposing, among other things, a millionaire tax. I think the greedy, filthy rich should have to pay back the money they’ve stolen from this country.

CITIZEN #1; All you talk about is taxing the rich. You believe they’re just going to willingly go along with your plan and turn their money over to you?

REPRESENTATIVE BULLHORN: Yes.

CITIZEN #1: So you’re assuming the rich are stupid, then?

REPRESENTATIVE BULLHORN: Oh, believe me, the rich are very stupid.

CITIZEN #3: Aren’t you a millionaire yourself?

REPRESENTATIVE BULLHORN: Honestly, I’ve been working so hard ever since I came to Washington I haven’t had a chance to look at my bank statement. Nevertheless, if I’m a millionaire, and I’m not saying I am, but if I might possibly be a millionaire, I’ll be subject to this new tax after taking into account congressional expenses, refunds, postage, envelopes, and all the time I donate to worthy causes.

CITIZEN #4: What worthy causes?

REPRESENTATIVE BULLHORN: Puppies. I lead the House caucus on puppy welfare. Damn it, no one’s going to mistreat puppies in this country if I have anything to say about it.

CITIZEN #2: That’s wonderful. I have a puppy. Her name is Sheila.

CITIZEN #3: What are the other ways you propose to pay for this?

REPRESENTATIVE FLOWMASTER: We’re going to introduce a tax on all medical devices such as monitors, x-ray machines, pacemakers, things like that.

CITIZEN #2: Do Band-Aid brand bandages constitute a medical device?

REPRESENTATIVE FLOWMASTER: If applied properly.

CITIZEN #4: What else?

REPRESENTATIVE FLOWMASTER: Lipstick.

CITIZEN #3: Lipstick?

REPRESENTATIVE FLOWMASTER: It adds moisturizing substances which keep your lips from drying up. Thus, it is a moisture dispenser.

CITIZEN #2: Would a Slurpee machine also be considered a moisture dispenser?

REPRESENTATIVE FLOWMASTER: Don’t be silly. Slurpee machines are ‘calorie’ dispensers. They would be subject to a fine, not a tax.

CITIZEN #1: I’ve heard you’re going to cut payments to doctors.

REPRESENTATIVE BULLHORN: Damn right. It’s high time our nation’s greedy physicians start paying us back for their lavish lifestyles. Big cars, big houses, big meals. Let ‘em eat bologne like the rest of us.

CITIZEN #2: You’ve eaten bologne?

REPRESENTATIVE BULLHORN: Once. And I loved it.

CITIZEN #3: Won’t that just chase off doctors?

REPRESENTATIVE BULLHORN: Look, my friend, these greedy doctors have to be taught a lesson. We’re going to really stick it to them for gouging us for so long.

CITIZEN #3: You don’t expect to have surgery anytime soon, I take it.

REPRESENTATIVE BULLHORN: Hell no. I’m fit as a fiddle.

CITIZEN #4: Would you politicians be subject to this new health plan?

REPRESENTATIVE FLOWMASTER: Unfortunately, no. We tried to find a way to add ourselves to this marvelous health care plan but it only would have increased the cost and we put our foot down at having to increase it even one dime more.

REPRESENTATIVE BULLHORN: To that end, we also have some very exciting cost-cutting proposals. And we know everyone in this room wants the government to save money.

CITIZEN #1: I’ll bite. What kind of cost-cutting proposals?

REPRESENTATIVE BULLHORN: These are brilliant. I even came up with a few. For example, instead of hip or knee replacement we’ll offer crutches; instead of physical exams and X-rays, we’ll offer a soothing walk through any airport security screening machine as a substitute; and we’ve known for quite some time that most brain surgeries can be avoided with aspirin.

CITIZEN #3: What’s next, replacing heart transplants with obituaries?

REPRESENTATIVE BULLHORN: Ooh, that’s good. I’ll submit that one the minute I get back to Washington. You’ve got the spirit.

CITIZEN #4: If the government wants to take over the medical system of this country, why not every other business in America?

CITIZEN #1: Yeah. I’m sure you’ll give us the customer care of the Post Office, the repair record of the Park Service, and the efficiency of Amtrak. Oh, and I’m sure you’ll continue to take our money like the IRS.

REPRESENTATIVE FLOWMASTER: Believe me, we’re working on it.

CITIZEN #3: Your plan demands that employers provide health insurance or else. Wouldn’t companies just stop hiring new workers and giving raises?

REPRESENTATIVE BULLHORN: Nonsense. Of course companies will hire new workers. If not, we’ll mandate they increase employment every year. That alone will end unemployment forever in this country.

REPRESENTATIVE FLOWMASTER: And as for you not getting a raise, well, what poppycock. You’re worth a raise. I’m worth a raise. In fact, I get a raise every year.

CITIZEN #1: Many people have said this plan is too expensive, takes away from our freedoms, and allows the government the opportunity to take over a sixth of the economy. They say the same goals can be accomplished in other, less expensive and less intrusive, ways. Why aren’t these avenues being pursued?

REPRESENTATIVE BULLHORN: We can’t be chasing after rainbows all our lives. Obviously these ‘other people’ you speak of live in an insulated fantasy world.

CITIZEN #3: But isn’t chasing this crazy expensive plan a lot like watching the captain of the Titanic trying to keep the ice machine going as his ship slips into the cold water?

REPRESENTATIVE FLOWMASTER: We’ve seen the numbers, the data, the costs. We know what we’re talking about. (getting up) Now, if you’ll excuse us, we have to get back to Washington.

REPRESENTATIVE BULLHORN (also getting up): We have an important vote on puppy health care coming up early tomorrow morning. We can’t miss that.

- end of play -

His appearance was so positive that they end up telling him that he should come on the show as a special guest (as they have from time to time) for the full 2 hours of the show. Paul makes a joke in response. Check it out below.

“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” – H. L. Mencken

I’m tired of the health care debate. It’s not much of a debate anymore when the Republican lawmakers are arguing for socialism-lite and the Democrats are arguing for maximum strength socialism. It’s like asking the patient, “Do you want a government doctor or do you want a government physician?”

I’m tired of everyone calling it health “insurance”. It should be called health welfare. Medicare and medicaid are welfare programs. The proposed health care reform is nothing more than medicare on steroids. It’s certainly not insurance. Does auto insurance cover oil changes and tune-ups?

I’m tired of the argument that we should force insurers to cover preexisting conditions. We don’t force home owner’s insurance companies to cover a house already engulfed in flames. Forcing this upon insurers marks the beginning of the slow regulatory death of private insurance. This reeks of progressive incrementalism–a phasing out of private insurance to create a monopoly for government insurance. In other words, the public option becomes the only option. Obama highlighted his plan for this back in 2003 (see the video).

I’m tired of many arguing that health care is a “right”. Calling health care a right is a patently absurd and immoral logical fallacy. One cannot have a right to property or labor owned by someone else. Rights can only be based upon an individual’s own action. Leonard Peikoff put it best during the Hillary-care debate back in 1993.

Observe that all legitimate rights have one thing in common: they are rights to action, not to rewards from other people. The American rights impose no obligations on other people, merely the negative obligation to leave you alone. The system guarantees you the chance to work for what you want — not to be given it without effort by somebody else.

I’m tired of hearing Obama and his minions claim that the health care reform proposals will lower health care premiums and costs. My fatigue forces me to be blunt. If you buy in to this argument, find a mirror, look into it, and you will see an “It takes a village” idiot. After you wipe the drool from your chin and lumber away from the mirror, ponder the following 5 items:

1. We already have partial socialized medicine in the form of Medicare (elderly) and Medicaid (poor).
2. As of 2008 the number of people on these government-provided plans totaled 87.4 million.
3. Medicare will run out of money in 2017 according to last year’s government statistics. The previous year the government said it would be insolvent in 2019. I wonder what next year’s numbers will reveal, considering the rising unemployment and the struggling economy (less payroll taxes).
4. As of 2008 there were 46.3 million people without health insurance. About 36 million of these people are promised coverage with the House health welfare bill passed on Saturday evening.
5. How can anyone claim with a straight face that increasing demand for a product by nearly 50% in a newly taxed and regulated market will lower prices? (Better go find that mirror again)
   

I’m tired of writing about national health care. Part of me thinks that those of us fighting against it should just cave in and give the thieving looters what they want. They would certainly get it “good and hard”.

I then look into the faces of my children and see their complete innocence on display. They deserve better. In fact, we all do.

We may be beaten down and tired, but we must never stop fighting.

For the best health care “reform” information all in one place, check out CATO’s health care page.

* Thank the 215 Representatives who voted against the cancerous health care bill
* Spank the 220 House members who voted for it
* Copy our Senators on these messages so they will be reminded of where we stand

Do this . . .

* Check here to see how your Rep. voted: http://clerk.house.gov/evs/2009/roll887.xml
* Use our Educate the Powerful System to send your “thank or spank” letter to Congress
* If you don’t recall who your Rep is, you can log in to our system and see their name listed below the letter space on the right side of the page

You can use what I wrote to my Representative as a model for a “spank” letter . . .

Ms. Giffords, I am very angry that you voted for HR 3962. I am copying my Senators on this message because I want them to take note of it, and oppose similar legislation in the Senate.

You failed in your responsibility to read this legislation before voting yes. You cannot possibly really know or understand what you passed, but I will be responsible for all 2,000 pages of it. I am extremely angry that, because of your irresponsibility, I may soon be forced to pay for and submit to a monstrous scheme I do not want!

Please be clear about this — legislation like this is based on force. I am threatened with violence by policemen, bureaucrats, and tax collectors if I refuse to pay for or comply with your grand designs for re-engineering my life.

This complex piece of legislation will entangle my health care in ever-expanding nets of government control, pave the way for a complete government take-over of my health care, bankrupt many businesses, foster unemployment, and increase my taxes, either directly or indirectly, despite promises that this would not happen.

I am further angered that you could have taken simple steps to improve health care that would not have involved 2,000 pages of unread legislation loaded with special interest deals and corporate welfare.

You could have allowed Americans to buy health insurance regulated by the state of their choice, and you could have expanded the contribution limits for Health Savings Accounts to balance the tax treatment of self-purchased health insurance with that provided through employers.

These two simple steps would have solved many of the problems with our current health care system — problems that were mostly caused by government policies in the first place. Instead of taking this simple, peaceful approach, you have decided to vote for complexity and coercion.

I want to remind you that the 10th Amendment to the Constitution prohibits Congress from passing this kind of legislation, but you did it anyway. You have just violated your oath of office.

If you really worked for me, instead of for special interests and the Congressional leadership, I would fire you immediately for gross incompetence. As it is I must wish you the worst of luck in the 2010 election.

Am I being too harsh? Please remember, you’re the one using the threat of force against me to control my money and my healthcare. I am merely protesting your love of coercion.

You can still redeem yourself by voting no when this scheme comes back to you for a final vote. I will be watching, and informing fellow constituents of your actions.

END OF LETTER

* You can check to see how your Rep. voted here: http://clerk.house.gov/evs/2009/roll887.xml
* Send your “thank or spank” letter here: https://secure.downsizedc.org/etp/campaigns/114

Please take additional steps to spread the word, recruit more DC Downsizers, and increase the heat on Congress:

* Ask other people to send a letter to Congress — forward them this message (be sure to clip off the Dispatch footer when you do)
* Digg this message on our Blog, located in the center column of the DownsizeDC.org home page.
* Start a monthly pledge so we can reach more people
* Make a one-time donation to further this work

Your support is our progress. Thank you for being a DC Downsizer,

Perry Willis
Communications Director
DownsizeDC.org, Inc.

D o w n s i z e r – D i s p a t c h
is the official email list of DownsizeDC.org, Inc. & Downsize DC Foundation

If you don’t know what Freedom Watch is then please check out http://freedomwatchonfox.com/. It’s an online only show hosted by the Judge catering to freedom-loving people everywhere.

Check out the excellent discussions from the show today below.

The latest example is the 1,900 page healthcare monstrosity the House leadership unveiled last week. They want a vote on it this week!

I believe they’re overreaching, and helping to build our movement.

Please send Congress a letter demanding that they introduce and pass DownsizeDC.org’s Read the Bills Act.

This is what I wrote in my personal comments . . .

Congress passed the Patriot renewal bill in 2006, only to discover later that someone had inserted a provision allowing the President to appoint U.S. Attorneys without Senate approval. This year, Congress passed the stimulus bill with the AIG bonuses.

Nearly everyone in Congress was shocked when they learned what they had passed. This happened because Congress didn’t read these bills before they voted on them. This is irresponsible.

Will you ever learn?

Now the House leadership wants a rapid vote on a 1,900 page health care bill. This isn’t just irresponsible, it’s crazy. This so-called health care bill has become a cancerous tumor. Plus, as usual, I’m sure there will be last minute insertions that will surprise everyone once they’re exposed to the light of day.

The best protection against all this insanity is DownsizeDC.org’s Read the Bills Act (RTBA). Unlike watered-down proposals currently being considered in Congress, the RTBA will allow the people to read the final versions of bills for seven days before a vote. It will also require each member of Congress who votes yes for a bill to swear that they’ve read it — goodbye to the claims of shock when the actual contents of a bill are actually implemented.

Behind the “read the bills” movement is the understanding of the American people that the legislative process is un-representative, ignorant, and distasteful. Members of Congress who continue to ignore this problem will fuel a bigger and louder backlash.

END LETTER

You can send your letter to Congress here.

We also invite you to add your website or blog to the Read the Bills Act Coalition. Membership will help build awareness about RTBA, and in return we will list your site on our main page. You can learn more at the DownsizeDC.org site.

Today we welcome 2 new members to the Coalition:

• Reboot Congress
• Titusville Patriots

Finally, last week Congress passed a total of 15 bills amounting to 525 pages. You can see what bills were passed below my signature in the blog version of this Dispatch:

http://www.downsizedc.org/blog/healthcare-and-read-the-bills-will-you-survive-the-1-900-page-tumor

Thank-you for being a DC Downsizer.

James Wilson
Assistant Communications Director
DownsizeDC.org

D o w n s i z e r – D i s p a t c h
is the official email list of DownsizeDC.org, Inc. & Downsize DC Foundation

Well, that’s what they want you to think. I want to know why the debate is now all about whether or not there should be a public option and little else? This shows us how Obama and his fellow looters are now firmly in the lead on this debate. The argument is no longer about whether we should have the government more involved in health care, but whether the government should provide health care.

The question is no longer “why are we doing this?” Instead, the question is “how do we do it?”

If Pelosi has her way, this is how:

The new House proposal is similar to one drafted by Democrats months ago. It requires Americans to buy health insurance by 2013 or pay a fine, creates a government-run program similar to Medicare to compete with private insurers and lets 15 million additional people enroll in Medicaid by easing eligibility requirements.

But in an effort to make the bill more appealing to moderates in her party, Pelosi altered some of the fine print. The proposed government-run “public option,” for instance, would negotiate for how much to pay doctors and hospitals rather than relying on government-set rates, as Medicare does.

Echoing concerns raised by his Republican colleagues, Rep. Dave Camp of Michigan said the bill’s heft, at 1,990 pages, indicated how it would expand the government’s role in health care: “Families will face higher taxes,” he said.

Replacing the above word “higher” with “astronomical” would be more honest. One need not read past page 4 (3d) to find the most offensive words to free market liberty loving Americans:

“initiates shared responsibility among workers, employers, and the Government; so that all Americans have coverage of essential health benefits.”

The word “initiates” should be replaced with the more honest word, “forces”. This phrase is a pure unadulterated call for socialism. When you force someone to share, it’s no longer sharing. It is theft, well-intended theft, but theft nonetheless.

Why do we get put in jail if we steal money to give to the poor yet it is perfectly fine for the government to do it without repercussions? I suppose the answer is: they own the jails.

Why do we get put in jail if we murder someone yet it is perfectly fine for government troops to kill people?

Are government humans more special than civilian humans? They seem to be able to operate outside the scope of morality.

The bill would establish a new federal government department inappropriately called the “Health Choices Administration” with the “Health Choices Commissioner” at the head. I can’t wait for their ad slogan to come out: “The Health Choices Administration: Be Nice, we can choose whether you live or die!”

Under this bill the Health Choices Commissioner has the power to regulate a new “market” they call the “Health Services Exchange”. This is the so-called new “free market” where the government public option health care is to compete with private health insurers. Yet somehow this is supposed to allow private insurers to compete on a level playing field? Please.

This bill becoming law would signal the end of private health insurance. It is only a matter of time before the public option will be the only option.

The government owns the jails now. The government tells you what you can put in your body. With socialized medicine the government is just continuing its assault on individual liberty. There is no “I”, only “We”.

An organization of volunteer doctors and other health care professionals wants to provide free medical care to tens of thousands of poor people across America.

But — incredibly — government bureaucrats won’t let them.

That’s the extraordinary story told by journalist David Freddoso in the Washington Examiner newspaper.

The article begins this way:

“Stan Brock just wants to help. The former co-star of ‘Wild Kingdom’ wants to deliver free medical, dental and vision care to the poor. … Brock simply wants to provide care free of charge, at the hands of unpaid volunteer doctors and dentists using donated equipment.

“Brock’s group, Remote Area Medical, wants to bring its services to Washington [D.C.], and soon. He wants his volunteer eye doctors to grind new glasses on the spot for those having trouble seeing.

“He wants his dentists to pull rotten teeth and perform root canals in badly neglected mouths. He wants to give checkups and HIV tests to the uninsured and the underinsured. No questions asked.

“The only question is whether the bureaucrats will let him do it.”

Continue the story…

by Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0: How to Profit from the Economic Collapse

The GDP numbers out yesterday, which showed economic growth at 3.5% in the third quarter, brought a deafening chorus from public and private economists who all agreed that the recession is officially over. With such a strong report, they are happy to tell us that not only has the Fat Lady finished her aria, but she has left the building and is sipping champagne in the bath. As usual, it falls on me to rain on the parade.

Even the giddiest commentators admit that the upside GDP surprise resulted almost entirely from government interventions. But, by pushing up public and private debt, expanding government, deepening trade deficits, and pushing down savings rates, these interventions have succeeded only in putting our economy back on an unsustainable path of borrowing and spending. Accordingly, they have prevented the rebalancing necessary for long-term health. Could there be a simpler illustration of trading long-term pain for short-term gain?

Rather than asking these pre-K economists to make such a three dimensional leap, it may be easier just to give them a brief history lesson.

During the decade that corresponds to the Great Depression, annual GNP expanded for six years and contracted for four. After nose-diving in the early years of the decade, GNP turned positive in 1934 and then logged three more years of solid growth (the four year average annual growth rate was 8.5%). But does anyone really believe the Great Depression ended in 1934, when the economy first stopped contracting? Unemployment reached 19% in 1938, nearly the peak of the entire Depression, almost a full decade after the stock market crashed! Why will we be so much luckier this time around?

The unpopular truth is that rather than curing the economy, government stimulus has made it sicker. The Bush Administration and the Greenspan Fed pursued this policy recipe in the 2002-2003 recession. The result was four years of phony growth, greater global imbalances, and the development of unsupportable asset bubbles. Clearly we have learned nothing from those mistakes.

Third quarter ‘growth’ was largely driven by a 23% increase in residential construction (the largest quarterly increase since 1986) and a 3.1% increase in consumer spending, which included a 22% jump in durable goods purchases – mostly automobiles – and 2.3% gain in government spending. Since the increase in consumption outpaced the increase in production, the trade deficit expanded, reversing the positive trend for most of 2008 and 2009. Because the increase in spending outpaced the increase in incomes, the savings rate plunged from 4.9% in the prior quarter to 3.3%.

The sizzling numbers for housing and autos resulted from heady cocktail of policy stimulants: near-zero interest rates, government-guaranteed mortgages, Federal Reserve purchases of mortgaged-backed securities, tax credits for homebuyers, bailouts for auto finance companies and ‘cash for clunkers’ for car buyers.

But the last thing our economy needs is for scarce resources to be wasted through uneconomical incentives.

If the government were not ’stimulating the economy,’ higher interest rates and falling home prices would have hamstrung residential construction. That would have been the right move. Instead, based on the false economic signals of the ’stimulus,’ we continue to build houses for which no legitimate demand exists.

The same is true for cars. Because of stimulus money, Americans are buying cars that they otherwise would not have. In a free market, the money would have been used for a more constructive purpose. Perhaps it would have been saved, used to pay off existing debt, or spent on a less expensive mode of transport, like a used motorcycle.

The economy ran into a wall in 2008 because consumers bought houses and cars that they really could not afford. That is why the institutions that provided the loans, such as banks, Fannie & Freddie, and GMAC, went bankrupt. It should be obvious that the solution to our economic problems will not be found by redoubling these efforts. This is akin to a drunk having a few more drinks in order to get sober!

A recent article in the Wall Street Journal detailed the myriad ways in which Senators and Congressman are now compelling General Motors to make business decisions that are solely driven by the legislators’ own political considerations, not the best interest of the taxpayers who now own the company. Such a dynamic is now underway in nearly every facet of our economy. An efficient allocation of resources – the only path to economic growth – is only possible when market forces, not Beltway bureaucrats, call the shots.

In the end, this stimulus, just like prior doses, will only worsen the condition it is meant to cure. When it wears off, the resulting recession will be even bigger than the one that everyone assumes has just ended. Until the impulse to fight recessions with government stimulus is quashed, genuine economic growth will never return. A string of ever-worsening recessions will eventually lead to what will be the next Great (Inflationary) Depression. But for now, enjoy the bubbly.

For a more in-depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar, read Peter Schiff’s 2008 bestseller “The Little Book of Bull Moves in Bear Markets” and his newest release “Crash Proof 2.0: How to Profit from the Economic Collapse.” Click here to learn more.

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