Newsweek columnist advocates for a VAT tax - Defusing the Debt Bomb.  (thanks to Ted R. for sending it).
It would certainly encourage saving, but doesn't address the real problem....prolific spending by all levels of government.

There is a growing disconnect between voters and advocacy groups, and never more so than in Illinois.

Teachers vs. Taxpayers - Teacher's unions are outraged at the slow payments for education funding due from the state of Illinois.  Actually, they should be mad at themselves, as every elected official that teachers have endorsed for state office have been elected.  Hence, it's their "people" that are causing the pain.  But teacher's unions have created their own dilemma.  The Illinois Education Association was successful in negotiating incredible contracts for their members.  For example, most teachers have an automatic 4-6% wage increase built into their pay packages.  Do you know anyone in the private sector that has averaged a 4-6% wage increase over the last two years?

More to the point, Teacher's salaries in most communities exceed the average wage, in those same communities, by 2-4 times.  So the average "Joe" is being asked to give an even greater percentage of his wages so the teachers can increase theirs.  That's a pretty hard sell.  Teachers have reached a stage where their jobs are seen as sufficiently compensated (particularly with the automatic increases).  Joe taxpayer no longer takes pity on their situation.  Just ask him.  Better yet, let him vote on it.

Taxpayers vs. Legislators - Legislators have avoided facing hard choices, as they could continue to borrow their way out of revenue shortfalls.  But just like the homeowner that has tapped all the equity in their home, the state officials are finding it hard to "create" new dollars.  So they face a hard choice.  Increase taxes and get tossed from office.  Or decrease spending and get tossed from office.  You can believe that they will have all 10 fingers in the air trying to sense which political wind is least likely to push them from reelection.

In Illinois, 45% of our spending goes towards Medicaid and Food Stamps.  Read that sentence again.  By 2020, it's estimated that 60% of our state budget will go towards these two programs.  I've recounted the abuses in this system extensively.  Here are the several laws that have been proposed to rein in the spending in this category:
    1. Restrict the foods that can be purchased with Links cards to prevent the Soda and Chips epidemic that has ensued.
    2. Require citizenship for participation in either program. That's right, we are currently paying for thousands of illegals to access these programs.
    3. Require a photo id on the card to curb fraud and abuse
    4. Require drug testing of recipients to curb abuse.

    All these bills have been presented.  And yet, not one can be voted on.  House Speaker Michael Madigan and Rep. Barbara Flynn Curry have held up every bill in the Rules Committee so that it can't see the light of day. 

The state legislators have kicked the can of state problems down the road, always putting off solutions till another day.  The can cannot be kicked any further.  It's time to face the music and the voters.

It's official - Bill Brady has been certified the winner of the Illinois Republican Primary election for Governor!

While runner up, Kirk Dillard had threatened to mount a recount, the word is that he will, in fact, concede today.

As a friend pointed out this morning - the delay in the certification has given Brady some free air time over the potential recount.

Now, attention will turn to next week's address by Governor Pat Quinn has he presents his state budget.

Quinn's speech will be like the captain of the Titanic, sitting in a life raft, and explaining how he should be named captain of whatever rescue ship picks them up!!

As the month of February closed out, Illinois recorded a change of temperature of more than 20%!!
That's pretty alarming.

The average Illinois temperature in the month of Feburary is 25.1 degrees, as recorded by the USDA.

February 2010 showed an average termperature across the state of ..........................20.1 degrees, a drop of 5.1 degrees, or more than 20%. 

Should we ramp up our carbon output now?

Effingham's Rotary meeting featured a fascinating speaker, this week.



Dorthy Drummond is an adjunct professor at St. Mary of the Wood's College and Indiana State University.  Her most recent book on the Middle East "Holy Land Whose Land?" offers a fascinating historical perspective of how an area the size of Indiana has caused global tensions for decades. 

Her speech was a primer on the political and geographical issues that make a resolution so difficult.

She laid blame on all sides, including Israel, the Palestinians and the Arab street.  But she specifically pointed out that Yasser Arafat and his cronies lined their pockets (and Swiss Bank accounts) with BILLIONS of Western and Arab dollars, while doing little to move the peace process forward.

There are two positives that point to the possibility of peace in the future.  First, former Senator George Mitchell is the US envoy to find reconciliation in the region.  While his task might seem fruitless, it was Senator Mitchell that brought peace to Northern Ireland in the 1990's.  And Mitchell has stated that he will only remain at his post as long as he believes peace is a possibility. 

Second, Palestine is starting to enjoy some level of economic prosperity.  It's no Silicon Valley.  But, for decades, Arafat and his cronies had little reason to bring peace, as it would end their money train. AND, peace in Palestine would reveal that the state had no sustainable economy.  Terrorism persisted.

Now, many of the same elements that resolved the long standing Northern Ireland debacle, offer hope that the Middle East could enjoy the same reward. 

ITEM ONE



On Monday evening, I was privileged to attend an event in Champaign where Nobel Peace Prize winner, Muhammad Yunnus spoke.  Dr. Yunnus was a young economist in impoverished Bangladesh in the 1970's, when he developed the concept of micro-lending, essentially loaning small amounts of money to poor people so that they could start their own business.

Specifically, Dr. Yunnus was driven to give opportunity to the poor women of Bangladesh by making them entrepreneurs.  A loan of less than $25 allowed a single woman to purchase a used sewing machine, so that she could make clothes to sell.  Similarly, women were offered a small loan to purchase a rudimentary oven to start a small bakery. 

Dr. Yunnus' concept worked.  Today, his bank, The Grameen Bank, makes an average of $1.2 Billion in loans every year.  The average sized loan?  $20!!   And millions have been lifted out of poverty.

The first part of his journey was the creation of his incredible bank and opportunities for the newly minted entrepreneurs.  The second part was equally fascinating.

Dr. Yunnus recognized that many of his borrowers were escaping generations of poverty.  But to insure that escape, he promoted education, with both a carrot and a stick.  First, he required, that to remain eligible for a loan, the children of his customers must stay in school.  (Call that the stick).  And, children graduating from high school were then eligible for Grameen Bank student loans (the carrot).  The results were incredible.

One quick story he noted was of the illiterate mother who used a small loan to build a small business enterprise.  Because of Dr. Yunnus' carrot and stick approach, the illiterate mother's daughter is the community physician just one village away.  From illiteracy to medical doctor in just one generation, simply by requiring responsibility from those receiving a loan.  Pretty remarkable.

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ITEM TWO

Berkshire Hathaway is one of America's largest companies.  It is run by the genius investor, Warren Buffet.  Mr. Buffet produces an annual letter for his shareholders that is always a fun read.  (Full disclosure:  I am NOT a shareholder.  Although, at $122,000/share, I would be well satisfied owning only a couple dozen shares)  In this year's letter, Mr. Buffet credits his success to the fact that he "had terrific parents who insured he got a good education".

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ITEM THREE 

Driving to work, the radio news described the sorry state of affairs in Illinois (and across the nation) concerning the alarming drop out rate among high school students.  Of course the drop out rate is an early indicator of future felons and state burdens.  It looks to be increasing at an even faster rate.  

Taking advice from Mr. Buffet and Dr. Yunnus, education is certainly the most critical element to eliminating poverty.  But Dr. Yunnus, properly applies responsibility for education to the parents.  In fact, he conditions that responsibility as part of his lending practice.

The United States Government and our state politicians provide enormous relief for victims of poverty in the form of welfare checks, food stamps and other programs.  But what responsible action do we require of the recipients?

What if we added a simple requirement for our welfare recipients?  If you receive a welfare check or food stamps, your child cannot miss more than a certain number of days of school.  Illnesses excepted, if your child misses too many days, the amount of money in the welfare check begins to reduce.  

Thus, the only responsibility we are asking of the recipient is that they begin to act like a parent.  It doesn't seem to be that much to ask.  Education, insured by his parents, helped Warren Buffet succeed.  And forcing parents to act like parents, is a program that's proven to work by the winner of a Nobel Peace Prize.
 

Your faithful Republican Reporter doesn't normally provide consumer economic advice.  But over the weekend, a lesson in savings, from long ago, was reinforced to me.  It resulted in a 11% savings, just this weekend

It was probably 25 years ago that my sister Jane and I drove to Colorado to visit our aunt and uncle, who lived there.  As we made the 1,200 mile journey, we stopped at various eateries along the way.  At the conclusion of each meal, my sister would scan the bill like a tax auditor.  And she called out the waitress when we were overcharged.  

 It was, frankly, a little embarrassing.  When I challenged her on the practice, Jane said, "Okay, let me check the bill at the next two stops, if they are both accurate, I'll stop.  But, if they have overcharged us for an item at either stop, I get to continue."  Agreed.

In fact, our next two stops at diners both resulted in a bill that had an extra item or two, or a miscalculation (always in the business' favor).  She convinced me of the need to be vigilant.  In fact, for the remainder of our journey, we were overcharged nearly 50% of the time. 

On Sunday, I accompanied my wife to a national retail chain.  Our purchases came to a little more than $120.  LIke my sister, my wife is diligent on making sure the charges at the register reflect the prices on the shelf.  WOW!  Was I stunned.   For two minor items, the shelf price listed $5.99.   At the register, one was correctly scanned at the $5.99 price, while the second was scanned at $8.99.  (A 50% increase over the listed price!)

For a larger purchase, a $105 listed item was scanned at the counter for $115.  Another $10 mistake.  When we pointed out the discrepancies, the clerk gladly made the correction.  But the lesson was learned.  In just seven items, we were overcharged on two of them by $13.  

On Friday, I wrote about the local event in which area residents went on camera to claim, "I Am the Tea Party Leader".  This is in response to the news reports that leading Democrats have made it their mission to discredit the Tea Party Leadership.  So, across the country, filming parties have broken out, where citizens have stepped forward to claim their leadership.  (Essentially saying, "If you want to investigate someone, INVESTIGATE ME!!")

Health Care Reform

    I've written in the past about the city of Duluth, MN.  They had recently hired an actuarial accountant to assess the future budget needs for the city.  The city was concerned that health care costs were spiraling out of control due to the generous packages offered to the unionized work force.  How generous?  Well, city employees were given nearly free universal coverage.  AND, free coverage was also given to every city employee's child until they reached the age of 26!
    The report from the actuarial came back.  Unless drastic changes were made to the benefits package, the city would be spending EVERY dime of revenue on health insurance premiums only.  There wouldn't be any funds available for incidental things like SALARIES, Capital improvements, facilities, supplies, etc.  Of course, Duluth had to take dramatic steps to avoid the disaster.
    Why do I bring this up?

    Well, a key provision of President Obama's latest proposal is to provide free health care coverage for every working American's child until they reach the age of 26!   See anything similar here? 

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Arnold Schwarzenegger predicts Tea Party Demise.
    The Governator suggests that the Tea Party movement will likely fade in the near future.  Maybe the Tea Party recruiting efforts aren't that strong at the Kennedy compound, but last nights event here in Effingham certainly disproves Arnold's predictions.

    John Perles (a Republican Reporter Team Member) had recently read that President Bill Clinton and James Carville are planning on attacking the Tea Party leadership structure, in an effort to undermine the effort.  In response, national tea party leaders are taking a slice from the 1960 film, "Spartacus", in which Spartacus and his legion of soldiers have been captured.   Their captor is unable to determine which soldier is Spartacus among the thousands of prisoners.   And so he offers to release all the soldiers if they will just turn over Spartacus.  In response, Spartacus (played by Kirk Douglas) stands to correctly identify himself as Spartacus.  Then, slowly, each soldier stands and declares, "I AM SPARTACUS", thus defeating their captors intent.

    Tea Parties around the country have conducted events to film individuals stating "I am the Tea Party leader".  The videos will be uploaded to YouTube and presented on various tea party sites.  Well, John Perles put together an event last night, here in Effingham.  With only 24 hours notice, he sent out an email, asking area residents to participate.  More than 50 people showed up to declared themselves the Tea Party Leader.  It was a festive event, and a tribute to the fact that the California Governor is likely wrong.

    Interestingly, and to the dismay of Democratic leaders, the groups of Tea Party participants that I have witnessed are not angry, but rather, they are very very determined.  They are not going away anytime soon.

If you go to apply for a new job today, it's very likely that you'll be required to submit to a drug test.  Drug testing has become standard practice among employers to prevent bigger problems down the road.

Major sports leagues also use drug testing to screen for both performance enhancing drugs and other illegal substances being used by players.

Now come Joe and Sally (I've changed their names, but they live here in Central Illinois).  This 30-something couple are enjoying the good life.  By working the system, they live in government housing, enjoying monthly food stamps, free health care, and a $1,600/month welfare check.  Life is good.  So good, in fact, Joe and Sally are also able to enjoy a fairly active recreational drug habit!  

That's right!  The responsible citizen, who wants to work (and pay taxes) is enduring a drug screening test, so that he/she has the privilege of paying for Joe and Sally to access those same taxes while enjoying their illegal lifestyle.  

Brian Millville, downstate IL tea party organizer, was on a recent debate panel among politicians, when he asked, "Should we require random drug testing among those citizens who are receiving government aid?"  From those at the event, I'm told, the politicians were doing everything they could to exit the stage. 

I think it's a legitimate idea.  From Joe and Sally, it is apparent that we can no longer ask for some level of responsibility.  It's time we started demanding it.

Until then, Joe and Sally are really appreciating your support!