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French vs American Revolutions — Vive La Différence!

Melanie Sturm | @ThinkAgainUSA Read Comments - 4
Publish Date: 
Thu, 07/19/2012

 

The French celebrated Bastille Day last week, 219 years after beheading Marie-Antoinette in the French Revolution’s Reign of Terror. To this day, she’s the poster-child for upper-class excess, entitlement and insensitivity -- the ultimate “1 Percenter.”


However, Think Again before believing every demonization you hear, especially without factcheck.org. In truth, though a privileged aristocrat, Marie-Antoinette was not only a faithful Good Samaritan, she actually never uttered the notorious catchphrase “Let them eat cake.” Never mind those silly details -- social justice was at stake!


By portraying Marie-Anoinette as selfish and out-of-touch, the revolutionaries justified their bloodthirsty mob rule and indiscriminate savagery. Declaring “liberty, equality and fraternity,” they ushered in an anti-democratic period of unlimited governmental power, civil strife, and economic despair, though eventually Enlightenment principles transformed France into a vibrant democracy.


Today, France has Europe’s most state-directed economy, and among its most stagnant and indebted. Prioritizing “the collective interest,” the French prefer government to free market solutions spending more on social welfare than any other developed country. Recently, the anti-wealth rhetoric of newly elected President Hollande -- and his plans to hike taxes – made London the sixth largest French city, to its mayor’s delight.


Similarly Enlightenment-inspired, though resentful of strong government, American revolutionaries devised a system to protect individual liberties. James Madison wrote, “If men were angels, no government would be necessary.  If angels were to govern men… controls on government would (not) be necessary.  In framing a government… you must first enable the government to control the governed; and in the next place oblige it to control itself.”


While the French were sticking dissenters’ heads on bayonets, Americans enacted a Constitution designed to disperse authority in order to protect the moral promise in our Declaration of Independence: that every individual is born with equal and inalienable rights to life, liberty, property, and the pursuit of happiness. Thus, the American Revolution facilitated the creation of the freest and most prosperous society on earth.


Over the last century, while America’s free economy boomed attracting immigrants to our opportunity society, politicians were busy encumbering it, à la française. They instituted the income tax, asserted extra-constitutional powers to regulate, dabbled in cronyism and created entitlement programs that now consume 65 percent of the federal budget. Once 3 percent of gross domestic product, government spending is now 25 percent, crowding out the private economy and producing daily deficits of $4 billion.

 

Consequently, we suffer French-size economic stagnation, unemployment, and debt (up 50 percent since January 2009). Poverty rates are the highest since tracking began in 1959; food stamp dependency is exploding; and the percentage of Americans with a job is the lowest in decades. Not surprisingly, two-thirds of Americans say we’re on the wrong track and that there’s too much government power and too little individual freedom.


Meanwhile, clueless that government policies influence economic decisions, politicians now propose increasing taxes. “Taxmageddon” -- the toxic mix of year-end tax increases – is causing businesses to defer hiring and investment. Even if limited to the top two-percent with incomes over $250,000 (which includes small businesses responsible for half of private sector jobs and $720 billion in earnings), tax increases would create serious recessionary headwinds while funding only 8.5 days of federal spending, per the Congressional Budget Office. This is a blueprint to cripple job creation, and 23 million job-seeking Americans.


Though they agreed it was economically injurious to hike taxes in 2010 when the economy was growing at twice its current rate, tax-hikers argue it’s now about fairness while referencing the “roaring 90’s” when rates were higher but before explosions in spending, debt, and stagnation.  What's fair about increasing taxes knowing the vulnerable will suffer disproportionately?


What is fair considering 2009 IRS data shows the top one-percent and top five-percent paid 37 percent and 64 percent respectively of federal income taxes, while the bottom half paid two percent? If the richest aren’t yet paying their fair share, doesn’t that suggest they don’t merit their earned success?  By denying some Americans their earned success, doesn’t that undermine our opportunity society and social cohesion?


Having migrated toward French values, practices and even their anti-wealth rhetoric, its hard to recall our Founders' belief that government’s role is to protect – not grant -- individual rights and property.  To reinvigorate our free society and market economy, we need a true “fairness agenda”: a simpler tax code with fewer special interest loopholes, no more corporate welfare, and reforms that preserve entitlement programs for future generations.


Most importantly, we must recover the private initiative that French historian Alexis de Tocqueville found exceptional in 1830s America: ““In every case at the head of any new undertaking, where in France you would find the government ... in America you’re sure to find an association.” 


By renewing our commitment to individual liberties and the ethic that each of us – not government -- is our brother’s keeper, Americans “have it in our power to begin the world all over again,” as American revolutionary Thomas Paine wrote.


Wouldn’t our Founders want us to Think Again?

What's Love Got to Do With Health Care?

Melanie Sturm | @ThinkAgainUSA Read Comments - 2
Publish Date: 
Thu, 07/05/2012

 

Tamara Shayne Kagel made waves recently when she wrote a column in the Jewish Journal of Los Angeles titled “I Don’t Want to Date a Republican.” Clarifying her fears, she pondered with horror: “What if I have Republican babies?” Now smitten, she’s had to Think Again.

 

Having crossed the partisan Rubicon from insularity to open-mindedness, Kagel says she now respects and admires her boyfriend who, she acknowledges, “values helping the poor as much as I do -- just in a different way.”

 

To arrive at this tolerant Zen state, Kagel recalibrated her moral compass, the antidote social psychologist Jonathan Haidt advocates in “The Righteous Mind -- Why Good People Are Divided by Politics and Religion.”  Haidt cautions, “Beware of anyone who insists there is one true morality for all people, times, and places.” Comedian Steven Colbert didn’t buy Haidt’s thesis insisting “not just that I’m right; almost more importantly is that you are wrong.“

 

Last week, as if aping Colbert, many media, academic and political elites insisted opponents of the Affordable Care Act (ACA) were villainous and treacherous, including Supreme Court justices who might rule the law unconstitutional. Hardball’s Chris Matthews compared Chief Justice Roberts to the judge who upheld the Fugitive Slave Act, but after Roberts became the swing vote, he seemed to morph from Darth Vader into Luke Skywalker.

 

Disturbed by this Star Wars mentality, polls show public confidence in media and government at record lows. This week’s Rasmussen survey of Supreme Court perceptions confirmed the widening gap between the political class and mainstream voters -- the Court’s favorability doubled from 27 to 55 percent among the political class but dropped from 34 to 22 percent among mainstream voters.

 

Every American wants our health care system to be more efficient, affordable and accessible. As world-class consumers, we expect cost containment, improved quality and more choices -- we get that in our cell phones, why not our healthcare? We’ve watched Apple compete by continuously innovating, creating new markets and must-have products at prices unimaginable a decade ago. Meanwhile, market entrants like Android offer choices to consumers for whom a phone (never mind an iPhone) was previously unaffordable. 

 

Not surprisingly, Americans rejected government-centric solutions that interposed Washington bureaucrats between doctors and patients and did little to address the healthcare cost explosion. Nevertheless, à la Colbert, lawmakers insisted they were right and opponents weren’t merely wrong, but evil. Despite public outrage, Congress passed the ACA on a party-line vote aided by political payoffs, accounting gimmicks, deceptive language, and parliamentary trickeries never before used for such far-reaching legislation.

 

As unsettling is the perception that last week’s Supreme Court ruling -- which rewrote the ACA in order to find it constitutional and used reasoning that politically-diverse legal experts regard as flimsy -- was made to protect the Court’s legitimacy in the eyes of those who define illegitimacy as anything with which they disagree. If political calculations factored into Court deliberations, doesn’t that undermine judicial integrity?

 

Most importantly, two years into the 2,409 page law and 4,103 pages of associated regulations, we know it’s “dreadful public policy,” as non-partisan Washington Post columnist Robert Samuelson wrote: Its “attempt to achieve universal health insurance coverage is a massive feat of social engineering that, by its sweeping nature, weakens the economic recovery and antagonizes millions of people.”

 

Moreover, its promises are false: health insurance premiums have risen $2,200, not declined by $2,500; official cost estimates nearly doubled with further increases expected, thus increasing the deficit; and millions of Americans will lose their insurance and doctors as companies dump workers into government health exchanges to avoid escalating healthcare expenses.

 

Now consider the moral travesties.  Not only does the law perpetuate the largest transfer of wealth from the young to the older in world history, it promises a quantity and quality of care it can’t deliver while stifling the medical innovation on which the world depends for continuously improving health outcomes.

 

The story of Deamonte Driver, a 12-year old Medicaid beneficiary, is instructive. Unable to secure appropriate and timely treatment, he died of an infection that started with an abscessed tooth -- not because he was uninsured, but because he was government-insured.

 

The ACA’s proponents won’t mention these fiscal, economic and moral challenges.  Like used car salesmen, they tout loss leaders (universal coverage and 26-year olds on parents’ plans) and free extras (contraception) – all attainable with cheaper and less disruptive policies like tax credits and high-risk pools.  How do we separate the facts from the sales pitch, and if the deal is so good, why do the well-connected get waivers?

 

With so much at stake, lawmakers must recalibrate their moral compasses. Having done so, Kagel personifies Haidt’s message that love and mutual respect engender the willingness to see those with opposing views generously, improving everyone’s outcomes.

 

If elected leaders won’t love and respect us, we must Think Again in November.

Scott Walker: Wisconsin's True Progressive

Melanie Sturm | @ThinkAgainUSA Read Comments - 7
Publish Date: 
Thu, 06/07/2012

 

Last week after his criminal trial ended with a hung jury, John Edwards proclaimed hopefully, “I don’t think God is through with me,” as he planted the seeds for his comeback. Projecting the false modesty and manufactured authenticity that vaulted the one-term Senator toward the Presidency, Edwards personifies Graucho Marx’s maxim that “the secret to life is honesty and fair dealing. If you can fake that, you've got it made."


In response to Edwards, I imagined a collective uproar: “Think Again, John -- the jig is up!” As Edwards exits stage left, Wisconsin Governor Scott Walker takes center stage.  He, along with brave governors in New Jersey, Indiana, South Carolina, Louisiana, and possibly even New York, represent a new breed of leader emboldened to end public sector unions’ stranglehold on our governments and economy.


Putting aside Edwards’ despicable personal conduct, he is emblematic of the corrupt patronage system that Governor Scott Walker ended in Wisconsin -- the one that allows government unions to cement relationships with self-serving politicians, leaving taxpayers unrepresented and rendering many states insolvent.  By voting decisively to retain Walker (the only US governor to survive a recall), Cheeseheads declared the jig is finally up for this brand of special-interest cronyism and the politicians who perpetuate it – at least in Wisconsin.


The truth is, public-sector unions don’t serve a compelling social need since governments don’t exploit labor for profits. Furthermore, as Franklin Roosevelt cautioned, “the process of collective bargaining…. cannot be transplanted into the public service...[without risking] paralysis of government by those who have sworn to support it.” Realizing this, President Carter reduced collective-bargaining rights for federal employees by signing the Civil Service Reform Act.


It’s ironic that public sector unions met their match in Wisconsin, the birthplace of American progressivism and public sector unionism where roughly two-thirds of voters either are or are related to union members.  Now, progressive Wisconsin is proof that the crisis of the modern entitlement state being played out worldwide -- from the Eurozone to California -- doesn’t have to be a Greek tragedy.


In Wisconsin, even union sympathizers realize everyone is ill served when the government can't meet its obligations.  They know the promises politicians make far exceed our ability to pay and, watching Europe implode from the same disorder, realize there is only one choice -- reduced yet sustainable government or bankruptcy. Wisconsin voted for balance knowing the essential first step on the path to prosperity and opportunity is for governments to recover fiscal soundness. 


That was Walker’s pledge in 2010. Facing the fourth highest tax burden in the country and determined to reverse Wisconsin’s $3.6 billion deficit without raising taxes or firing workers, Walker’s reforms disallowed collective bargaining for public-employee unions (except police and firefighters).  No longer can unions negotiate their taxpayer-funded benefits with politicians they helped elect using mandatory dues. Additionally, Walker asked government employees to contribute modestly more to their health and retirement benefits. Even after these reforms, Wisconsin workers enjoy “a combined salary-benefits compensation premium of around 22 percent over private sector workers,” according to an American Enterprise Institute study released last month.


Though modest, the unions and their allies reacted ferociously to these reforms, like a mama bear defending her cub. They captured national attention with protests, runaway state senators, legal challenges and state senator recall elections. Despite their efforts, they couldn’t overcome the will of the people -- to keep the reforms.


That’s because Walker’s reforms are succeeding: The budget has a $150 million surplus; property taxes are lower; the unemployment rate is 6.8 percent (the lowest since 2008 and well below the national average); the private sector created 26,000 jobs in 2011; and savings realized by school districts have preserved jobs and educational programming. Most encouraging, according to a Wisconsin Manufacturers and Commerce survey in May, 73 percent of employers predicted moderate to good business growth and more than half plan to expand operations within two years – the highest rate in a decade.


No wonder one-third of union members voted for Walker, according to exit polls. Seeing union policies drain government finances, endanger vital government services, and undermine their own jobs and benefits, why would union members want to pay their dues? Now that they have the option not to, tens of thousands have opted out. Perhaps this is the best outcome of all, for civil society is healthier when government employees believe they’re on the same side as taxpayers.


As CS Lewis said, “We all want progress, but if you're on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive.”


Though it’s too late for Edwards, other self-proclaimed “progressives” must Think Again – good policy makes great politics.


Julia's War on Feminism

Melanie Sturm | @ThinkAgainUSA Read Comments - 6
Publish Date: 
Thu, 05/24/2012

 

 

When Gloria Steinem popularized the saying “a woman needs a man like a fish needs a bicycle”, I wasn’t old enough to wear a bra, never mind burn it. However, thanks to that feminist credo and its infiltration of 1970s popular culture, women of my generation grew up believing we could make it on our own, like Mary Tyler Moore.  While her theme song cautioned, “this world is awfully big, girl,” our confidence rose with Mary’s cap, tossed triumphantly to “you’re going to make it after all.”

 

Indeed, we did make it, though presidential campaign operatives peddling the “War on Women” narrative want you to Think Again. They insist it’s a war on women when it’s actually a war for women’s votes.  This month’s political ad, “The Life of Julia,” occasions the question: which voter are they after, Georgia in Greece or Mary in Minneapolis?

 

Julia is a single, faceless cartoon – evidently an American everywoman – who depends on European-like, cradle-to-grave government assistance from pre-school through retirement. As if being tethered to a dependency-inducing nanny-state were attractive to American women  (or plausible given mounting debt) Julia, like her entitled European cousin, is the anti-Mary -- she can’t make it on her own.

                        

Sadly, this government-centered and soul-deadening narrative is as false and harmful to women as the notion that we should be barefoot and pregnant in the kitchen. Both beget a toxic cocktail of subservience, loss of identity and worthlessness -- the antithesis of feminism.  Franklin Roosevelt cautioned that dependence “induces a spiritual and moral disintegration fundamentally destructive to the national fiber”…and “the human spirit.”  

 

The antidote to “learned helplessness” and its corollary unhappiness is “earned success”, according to economist Arthur Brooks, President of American Enterprise Institute and happiness authority. In his new book “The Road to Freedom,” Brooks explains, “people crave earned success, which comes from achievement, not a check. It’s the freedom to be an individual and to delineate your life’s ‘profit’”…whether measured in money, “making beautiful art, saving people’s souls, or pulling kids out of poverty.”

 

Earned success is what our Founders meant by “the pursuit of happiness” which is America’s “moral promise” to its citizens. Brooks praises the Founders’ visionary insight because “allowing us to earn our success is precisely what gives each of us the best chance at achieving real happiness,” and his data proves it. 

 

Feminists understood earned success knowing self-reliance and freedom would yield more choices, achievement, self-respect and fulfillment if women had a level playing field. Now, four decades since Helen Reddy sang “I am Woman,” women are “The Richer Sex” -- the book by Liza Mundy documenting women’s economic advancement.  The New York Times book review noted: women hold 51 percent of management and professional jobs; wives at least co-earn in two-thirds of marriages; and women earn 57 percent of bachelor’s degrees and comprise 60 percent of graduate students.


Meanwhile, according to a March National Journal poll, three-quarters of women believe they can advance as far as their talents take them. Not surprisingly, women account for seven of the top 10 spots on Forbes 2012 World’s Most Powerful Celebrities list including the top two, Jennifer Lopez and Oprah Winfrey.


Despite these spectacular achievements, economic stagnation makes otherwise self-sufficient women – especially single ones -- insecure and uncertain. Preying on this anxiety, ambitious politicians cast themselves as compassionate by promising a lifetime of government benefits to a nation of Julia’s. Considering the tortuous unraveling of the Eurozone, this idea is both fantasy and dangerous. 

 

In Europe, hopelessly large social security and entitlement promises exceed governments’ ability to tax and borrow, crushing those who believed economic security is a basic human right. Yet, as European leaders grapple with resentments caused by austerity measures, American politicians make the same promises that precipitated Europe’s crisis. 

 

Brooks would argue that even Julia knows it’s wrong to make promises you don’t intend to keep.  He warns, “Americans today are experiencing a low-grade, virtual servitude to an ever-expanding, unaccountable government that…. has created a protected class of government workers and crony corporations that play by a different set of rules … and has consequently left the nation in hock for generations to come.”

 

Thankfully, American women are watching and willing to act. According to a Rasmussen poll released this week, nearly two-thirds of women (and men) prefer a government with fewer services and lower taxes. So rather than foster dependency, why not encourage the fiercely independent and self-reliant ethic that originally motivated feminists and propelled women’s economic advancement? 

 

The real war on women is the one waged by those whose policies undermine our economy thus limiting everyone’s choices, mobility and independence.  As for Julia, she’d be better served by policies that empower her as an individual, not ones that encourage reliance on government.

 

Think Again, Julia – you can “make it on your own.”

 

The Green Wizard: Natural Gas Not Renewables

Melanie Sturm | @ThinkAgainUSA Read Comments - 5
Publish Date: 
Thu, 05/10/2012

 

As if accompanying Dorothy en route to the Emerald City of Oz, Americans seek a green wizard to fulfill our hearts’ desires -- a world powered by renewable energies like solar, wind and bio-fuels.  Bedazzled by Glenda the Good Witch’s solar-powered ruby slippers, we want the green-brick-road to lead us to a cleaner energy future. 


However, without Auntie Em to awaken us to reality, Americans must Think Again. Though cast as the Wicked Witch of the West, over the last decade the conventional energy industry has revolutionized America’s energy outlook.  Today we’re the most energy-endowed nation in the world, with enough clean, reliable, abundant, and cheap natural gas to last for generations. 


It’s “like adding another Venezuela or Kuwait by 2020”, according to Pulitzer-prize winning energy expert Daniel Yergin who believes the world energy map now centers on North America, not the Middle East. Energy consultant Wood Mackenzie estimates that tapping new reserves would generate one million jobs by 2018 and generate $803 billion in governmental revenue through 2030. Additionally, these new extraction technologies require far fewer wells, though they present fresh environmental challenges that several states (including Colorado) have addressed with new regulations to protect the environment and secure water supplies. 


Thus, rather than crucify the conventional energy industry, we should celebrate the entrepreneurialism and technological ingenuity that’s enabled the US to become a net energy exporter for the first time since 1949. The government need only permit development of new reserves -- not subsidize -- to further American energy independence, fuel our vehicles, lower energy costs and reap economic gains.


Meanwhile, promoters of green energy policies continue to argue that “investments” in renewable energies are environmental and job-creation boons for America, though our journey along the green-brick-road proves otherwise. Whether evaluating wind power in tornado-swept Kansas or solar energy in sunny California, renewable technologies are woefully uneconomical, wickedly unreliable and surprisingly unsound environmentally.


It’s understandable Americans dream green, considering we were told in 2008 that by investing $150 billion over the next decade in renewable energies, we’d reap five million new jobs.  But as former Treasury Secretary Larry Summers noted, “The government is a crappy venture capitalist”.  That’s because lobbying prowess and political viability outweigh economic viability when government picks winners and losers. 


After “investing” $110 billion since 2009, the sector is littered with taxpayer backed, bankrupt companies like Solyndra, Beacon Power, and Ener1, all of which paid bonuses before going under. Reuters reported last month “the wind industry… has shed 10,000 jobs since 2009 even as the energy capacity of wind farms has nearly doubled”… while the demonized “oil and gas industry added 75,000 jobs.”


The truth is, industries that aren’t economically viable don’t create real jobs, and those that are viable, don’t need subsidies. Plagued by competitive disadvantages like sun and wind intermittency, and expensive land, capital, transmission and backup capacity, these technologies are uncompetitive, small market players and remain subsidy-dependent.


Despite receiving 53.5 percent of federal financial support for the electric power sector, wind and solar supply only four percent of US power at a cost 100-300 percent more than conventional sources, according to the Energy Information Administration. A University of Wyoming study notes that because green policies increase prices, the “economic benefits derived from building renewable energy facilities in the short-run are more than offset by losses in economic output and employment”, thus hurting the poorest and most vulnerable.


Additionally, given renewables’ green patina, many don’t appreciate their adverse environmental impacts beyond the eyesore, noise, water usage, and wildlife destruction. Called “energy sprawl” by the Nature Conservancy, renewable energies require vastly more land while producing significantly less energy than conventional energy.  Most disconcerting, their incurable intermittency requires utilities to rely on conventional power to cycle up when there’s no wind or sun, and power down when there is, thus diminishing carbon reduction advantages.


If policymakers weren’t brainless scarecrows, cowardly lions and heartless tin men, they’d adopt Bill Gates’ proposition that cheap energy is “a fantastic vaccine” for the economy.  That’s what Americans deserve – a booster shot to deliver authentic solutions, real jobs and genuine economic growth. Moving beyond fossil fuels will happen eventually when superior and affordable energies are scaled for mass use.


Energy development isn’t a zero sum game, as the Wyoming study concludes: “Environmentally responsible development of fossil fuel resources could be complementary with renewable energy development, creating jobs and generating tax revenues to ensure a robust economy capable of creating and funding innovative renewable energy technologies of the future.”


Given our economic straits and the remoteness of the green dream, the underlying question is how much more are Americans willing to pay to harness wind and sun. Isn’t it time to demand that our leaders propose energy solutions based not on ideology but on how to best guarantee prosperity for generations of Americans?   


Think Again – a secure, affordable and environmentally sound energy future is not over the rainbow.

 

Sex, Lies and Videotaped Government Scandals

Melanie Sturm | @ThinkAgainUSA Read Comments - 4
Publish Date: 
Thu, 04/26/2012

 

What do you get when you cross George Orwell’s Animal Farm with John Belushi’s Animal House? Government Gone Wild! 

 

If you assume that’s the title of a porn movie about U.S. secret service agents cavorting with prostitutes in foreign countries, or employees of the U.S. Government Services Administration (the GSA manages federally-owned property) whooping it up in Las Vegas at taxpayers’ expense, Think Again.

 

The hard truth is that the larger government grows, the more Orwellian and “Animal House” its conduct. Belushi’s character “Bluto” exercised no greater restraint around free beer than did GSA Regional Director Neely and his employees, whose exploits at their $823,000 Las Vegas “team-building” soirée were videotaped, only to dominate newscasts this month. Bluto couldn’t have carpe diem-ed on his parents’ allowance better than Neely who wrote in an invitation to personal friends: “We’ll pick up the room tab…. I know I’m bad, but…why not enjoy it while we have it….Ain’t gonna last forever.”  


Since government depends on resources drawn from the real economy, consider these facts: after the GSA’s Inspector-General reported Neely’s misconduct, Neely still received a 2011 bonus; the average GSA salary is nearly $92,000, $40,000 more than median household income; and the GSA’s budget rose 119 percent in 2011.  Furthermore, the non-partisan Congressional Budget Office reported this January that federal employees enjoy greater job security and earn significantly higher compensation compared to private-sector workers.

 

Having worked in a large bureaucracy (the World Bank), I believe most public servants are decent, skilled, and dedicated, though rarely are “per diem” allowances unspent, or self-justifications un-uttered. It’s a truism that people won’t spend other people’s money as carefully as they spend their own. Unlike household budgets that strive to boost savings by minimizing expenses, government bureaucracies spend what they’re given while justifying more for next year.  They also lack the expertise and market discipline to “invest” wisely, evidenced by “green investments” in now-bankrupt companies like Solyndra.

 

Here's the ultimate question: why transfer more money from the real economy to those who are intrinsically more wasteful, negligent and indifferent to its ultimate good? To curb Bluto-like behavior, voters mustn’t allow irresponsible conduct they wouldn’t otherwise tolerate.  If your child spent irresponsibly while racking up credit-card debts, wouldn’t you confiscate his card?  Good governance, like good parenting, means establishing and enforcing reasonable limits.

 

Yet, politicians charged with stewarding America’s finances have acted like the pigs in Animal Farm who pronounced “all animals are equal, except some are more equal than others.”  Exempted from the self-discipline and frugality associated with American Exceptionalism and prosperity, they’ve presided over the greatest scandal -- an explosion of government, an avalanche of debt and the mugging of our children’s future.

 

April 29th marks the third consecutive year in which the Senate hasn’t passed a budget. Vested with the authority to confront and steer America through fiscal problems, the Senators’ inaction reflects the ultimate “piggish” dereliction of duty.  It’s also illegal, though conveniently, there’s no penalty for breaking the 1974 Budget Act. 

 

Senate Budget Chairman Kent Conrad said last year, “History is going to judge whether we have the courage, character, and the vision to stand up for America’s future. Those who take a walk, those who turn away, those who don’t have the gumption to stand up, are going to be judged very, very harshly.”  Though Conrad intended to pass a budget resolution this month, he was over-ruled by Senate leadership. Believing they can evade electoral consequences by not voting on difficult budget matters, they mirror the corrupt, greedy, and myopic leadership of the pigs in Animal Farm.

 

Economist Milton Friedman, one of America’s greatest apostles for freedom and free markets, believed politicians are finger-in-the-wind types who can be trained: “The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing.  Unless it’s politically profitable for the wrong people to do the right thing, the right people will not do the right thing either.”

 

In other words, the onus is on us. Politicians will concern themselves with our interests only if they think we care. If we don’t care that they’ve violated the law by refusing to adopt a budget, and that they’ve spent us $16 trillion into debt, what do we care about? 

 

Demand accountability and restraint, and don’t allow the word trillion to be normalized, after all, a trillion hours ago dinosaurs roamed the earth!  Don’t wait for the right people to get elected; remember, Bluto became a US Senator despite his 0.0 GPA. It’s a basic rule of life -- If we tolerate out-of-control Animal House behavior and indifferent Animal Farm attitudes, we’ll just get more of it.

 

Think Again. It’s not only a fiscal imperative -- it’s a moral one.

 

 

 

Titanic Icebergs In Way of Healthcare Reform

Melanie Sturm | @ThinkAgainUSA Read Comments - 5
Publish Date: 
Thu, 04/12/2012

 

Prior to its maiden voyage 100 years ago this week, the Titanic’s captain proclaimed, “I cannot conceive of any vital disaster happening to this vessel.”  Yet hubris, misaligned priorities and bad planning conspired to sink the Titanic.

 

The same mismanagement and arrogance afflicts the Titanic-like healthcare law (“Patient Protection and Affordable Care Act”) that passed through icy Congressional waters in 2010.  Given lethal icebergs en route, both Captain Smith and America’s lawmakers would undoubtedly Think Again before declaring “Full Speed Ahead”.

 

If polled, Titanic’s passengers would’ve preferred slower navigation (and more lifeboats) to the record-breaking speed favored by Titanic’s ownership. Americans were polled on the healthcare law and registered consistent and overwhelming disapproval. Polling like CNN’s March 2010 survey -- 19 percent believed they’d be better off with the legislation -- led pollsters Scott Rasmussen and Doug Schoen to write, “Most voters believe the current plan will harm the economy, cost more than projected, raise the cost of care, and lead to higher middle-class taxes.“ 

 

Nevertheless, without reading, understanding, or considering its constitutionality, lawmakers hurtled the unpopular 2,700-page bill toward passage. Though approved on a party-line vote, controversial political payoffs and parliamentary shenanigans never before deployed for legislation of such magnitude led voters to reject incumbents in the historic 2010-midterm elections.

 

Since the law’s passage, strong majorities of Americans support its repeal. Meanwhile, recent polls show two-thirds of Americans believe the Supreme Court should either strike the law entirely, or the individual mandate which forces every American to purchase health insurance or pay a penalty. If upheld, Americans fear losing the constitutional limits our founders believed necessary to curb coercive federal government power. With the IRS to enforce, what Constitutional principle prevents government from forcing individuals into other purchases?

 

Politically diverse commentators agree that the government failed to substantiate the law’s constitutionality in oral arguments before the Supreme Court, though some believe the Court must defer to Congress by upholding its law.  However, doesn’t our system of checks and balances mean the judiciary must declare unconstitutionality when another branch acts unconstitutionally? The Supreme Court struck down President Bush’s military tribunals, why not the healthcare law?

 

In his latest book, “The People’s Money,” Rasmussen argues that America is divided between the “Political Class” -- those who believe “the federal government is the source of all legitimate authority in the nation” -- and the American people who “are the true sovereign authority of the land.” Since only 17 percent of voters believe the government has their consent, Rasmussen warns: “In a nation founded on the belief that governments derive their only just authority from such consent, that’s a devastating assessment.”

 

It’s hard to trust the Political Class when it misleads, distorting words like “trust fund” and “budget cut” to cover-up increasing spending, deficits and debt.  Upon instituting Social Security, Franklin Roosevelt promised it wouldn’t be a “pay-as-you-go” system that channeled taxes from today’s workers to pay today’s retirees.  But Presidents Johnson and Nixon broke Roosevelt’s promise, and though “trust funds” are used to reduce deficits, many Americans believe their payroll taxes are segregated to pay for the retirement benefits they’ve earned. 

 

To politicians, the term “budget cut” means spending that increases less than expected. Using this trickery, if Imelda Marcos spent $1000 on shoes last year and decided to spend only $2000 this year instead of her budgeted $3000, her shoe budget suffered a “draconian cut”, though it actually doubled! After decades of this chicanery, Rasmussen warns, “the damage has already been done… the result is a government more than $100 trillion in debt,” counting unfunded future liabilities.

 

Because healthcare is the largest burden on our country’s finances, public and private, the healthcare law only exacerbates the crisis, as evident in last month’s report by the non-partisan Congressional Budget Office. Cost estimates for the Orwellian-titled “Affordable Care Act” nearly doubled and insurance premiums are expected to climb at an even faster rate over the next decade than the past five years.   Meanwhile, 20 million Americans could lose employer-provided coverage as companies dump workers into government health exchanges to avoid escalating healthcare expenses.

 

Though the law has redeeming features, there are better reforms. By shifting decision-making authority away from politicians and unelected bureaucrats to individual citizens, costs are constrained by competition and inventiveness.  Why can’t Americans be granted the freedom to operate like the value-oriented consumers we are in purchasing health insurance? If we economize on our plan, we keep the change; if we want “bells and whistles”, we pay more.

 

The Constitutional framers believed that no one by nature is the ruler of anyone else. Therefore, the Political Class and its Leviathan state are our icebergs.  As we navigate around them, Americans steer toward Abraham Lincoln’s vision: “that this nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth.”

 

Think Again – with this philosophy, America is unsinkable.

 

Buffett Rule: Tax Fairness or Farce?

Melanie Sturm | @ThinkAgainUSA Read Comments - 5
Publish Date: 
Thu, 03/01/2012

 

“The higher up in the tree the monkey goes, the more of his backside that shows,” goes the maxim. It would be hard to climb higher than Warren Buffett, the world's most celebrated investor. However, as the namesake of the Buffett Rule that imposes higher tax rates on the wealthy, Buffett and his backside dangle precariously “out on a limb.”

Residing atop Buffett's tree is New Jersey Gov. Chris Christie, known to deliver the best rhetorical broadside, probably because of his broad backside. Last week, Christie buffeted Buffett, forcing him to Think Again.

After two years of traumatic budget austerity, Christie's 10 percent tax cut for all New Jerseyans is central to his fiscal revival plan. Designed to stimulate economic growth, job creation and entrepreneurialism, Christie expects Jersey's economic pie to grow so more “haves and soon-to-haves” generate more tax revenue. After eschewing Buffett's Tax, Christie challenged Buffett to put up or shut up by writing the government a check, to which Buffett conceded, “It's sort of a touching response to a $1.2 trillion deficit, isn't it? That somehow the American people will just all send in checks and take care of it?”

Perhaps unwittingly, the “Oracle of Omaha” revealed the hard truth: No reasonable amount of taxation can address the catastrophic levels of spending, deficit, debt and doubt that plague Americans.

Even the 49.5 percent of Americans who aren't currently paying federal income taxes — a status for which they're wrongly disparaged since other taxes they pay support government (state, payroll, property, sales, gas) — know that increasing tax rates on high earners won't “take care of it.” Incredibly, confiscating the taxable income of America's millionaires and billionaires would only yield $938 billion, enough to run the government for three months.

Ominously, the nonpartisan Tax Foundation estimates the Buffett Rule could raise $40 billion annually, chicken feed compared with our deficit and bullish considering the United Kingdom's new wealth tax generated less revenue from top earners than before its implementation.

Most insidious, a large majority of America's small businesses, the sector responsible for creating two-thirds of all new jobs since 1996, file individual (not corporate) returns, thus ensnaring them in the Buffett Rule. Imagine the surprise of the technology entrepreneur who wants to expand her business but finds herself in Buffett's tax class!

The dirty little secret is that to reduce the deficit or avoid spending cuts, we'd need a “soak the middle class” strategy. That's because 98 percent of America's taxable income is in households that earn less than $250,000. As Buffett admitted, “The purpose of the Buffett Rule is not to close the deficit gap.”

So why promote the Buffett Rule if it's economically injurious and fiscally imprudent? Because in an election year, budget gimmicks and fairness illusions trump growth, job creation, tax revenue and economic logic. This isn't tax fairness; it's tax farce.

The million-dollar question is, What is fair? Is it fairer to equitably divide a stagnant or shrinking economic pie or to grow the pie so everybody gets more, albeit unevenly?

Since first implementing the income tax a century ago, we've agreed on the latter while operating the industrialized world's most progressive tax system. According to 2009 IRS data, Americans with incomes less than $100,000 paid an average rate of 8 percent while those making more than $500,000 averaged 25 percent. Furthermore, the top “1 percent” currently pay 38 percent of America's income taxes while the top “10 percent” pay 75 percent.

But as Buffett notes, “You can do pretty dumb things when you've got a big checkbook.” The real problem isn't that Americans (rich or not) pay too few taxes; it's that government is so over-extended, it's transferring hundreds of billions of dollars to the affluent. Why should a farmer making $2.5 million be eligible for farm subsidies? Should Buffett be entitled to the same Medicare and Social Security benefits as those without corporate jets? Should wealthy backers of green energy be entitled to billions in below-market loans whether or not they're political donors?

As the president's bipartisan Debt Commission recommended, wealthy Americans shouldn't get benefits they don't need nor tax preferences that distort and undermine our economy. But withdrawing voters' goodies isn't smart politics when you're trying to secure electoral majorities. Conversely, it's politically wise to distract voters from current realities like the following: One in six Americans lives in poverty — the most since tracking began in 1959; government dependency is at an all-time high; and the percentage of Americans with a job is the lowest in decades.

Imagine the possibilities if Buffett turned his attention to the challenges of income stagnation. He already knows that American prosperity derives from entrepreneurial activity and the incentives that inspire it, having once said, “You can change behavior by incentives, but you can't usually change behavior by sermons, although people try every Sunday.”

Think Again, Warren — that's good advice.


Worry about hitting debt wall, not ceiling

Melanie Sturm | @ThinkAgainUSA Read Comments - 1
Publish Date: 
Thu, 05/12/2011


Imagine having friends who earn $100,000 per year. They've continually outspent their income, charging $45,000 annually to credit cards. Their debt balance exceeds $700,000 and their interest rate is increasing. Facing two kids in college and retirement without savings, they plan to borrow more — from you!

My hunch is you'd tell them to Think Again. With little prospect of earning more, they must destroy their credit cards, live within their means, pay off their debt and save for retirement.

If this scenario sounds farfetched, please Think Again. It actually parallels the U.S. government's fiscal crisis, from which Americans can't just walk away. Like the parent who confiscates a child's over-spent credit card, Americans must honor our government's obligations, for we back “the Full Faith and Credit of the U.S. Government.”

Those words once implied the gold standard of credit-worthiness, attracting global investment to America. Now, they jeopardize our standard of living since we're collectively responsible for the $14.3 trillion balance on the national credit card.

As treacherous as debt is for individuals, its repercussions are worse for an economy. Countries with excessive debt suffer disproportionately from recessions when credit markets unduly tighten, forcing businesses and consumers to forgo investments and purchases.

Because our debt has grown to a historically high percentage of our economy (it's up $5 trillion, or 54 percent, since January 2008), implications for the next recession are ominous. We've hit another debt ceiling, raised 90 times in 60 years, rendering the concept of “debt ceiling” as meaningless as Social Security “lock-box.”

According to the Bi-Partisan Debt Commission, the national debt is in “unfamiliar territory” heading toward “unsustainable levels” due primarily to mandatory spending, prompting the International Monetary Fund and ratings agencies to downgrade the U.S. fiscal outlook to negative. It's no surprise. Despite perennially promising wise financial stewardship, politicians have overspent every year since Elvis Presley's first record — 1954.

Spending growth is made worse because the eventual costs of mandatory programs like Social Security, Medicaid and Medicare (comprising most of the federal budget) are habitually underestimated in order to win approval. Launched in 1966, Medicare's advocates “conservatively” projected an annual expenditure of $12 billion in 1992, by which time actual costs exceeded $107 billion. Now, Medicare spends $600 billion and rising due to aging baby-boomers and escalating medical expenses.

Restructuring unsustainable spending programs is critical to America's fiscal stability and to protecting the health and retirement security of our citizens. If only it weren't such a political hot potato.

Politicians who win votes by advocating mandatory spending programs knowing (and withholding that) their long-term costs are unsustainable resemble sub-prime mortgage salesmen. Though the mortgage salesmen helped low-income borrowers achieve home ownership dreams by peddling loans with initial low payments, they knew payments would eventually balloon beyond the borrowers' capacity to pay, but they banked origination fees anyway. Ultimately, this deceitful behavior undermines everyone's economic security.

Most worrisome, our fiscal crisis is understated because accounting gimmicks allow future mandatory spending obligations to remain “off-balance sheet.” The U.S. Treasury's real liabilities are estimated to exceed $75 trillion, five times larger than officially acknowledged.

So, rather than agonize over hitting another debt ceiling, we should worry about hitting a debt wall, just like the friends who over-borrowed to maintain their spending habits.

America's deteriorating finances mean purchasers of U.S. debt require higher interest rates to compensate for increased risk. That's why the Federal Reserve is buying 70 percent of U.S. Treasuries, according to Pimco, manager of the world's largest bond fund. This means every day our government spends $4.5 billion it doesn't have, of which $3.1 billion is borrowed from itself. No wonder Pimco dumped its U.S. holdings and shorted U.S. Treasuries.

Who will buy U.S. debt after the Fed stops this summer? Beware of “bond-market vigilantes” who usually force immediate and unfavorable consequences on economies in fiscal distress.

Increased interest rates could cause a disastrous chain-reaction: Interest expense compounds and, like Pac Man, cannibalizes other government expenditures necessitating draconian and sudden spending cuts. Higher interest rates increase the cost of doing business, causing economic stagnation. U.S. assets depreciate as import and commodities prices continue rising. Paychecks buy less so businesses sell less, the global economy declines, lending slows, more jobs are lost and stagflation sets in.

After the Clinton administration was forced by “bond-market vigilantes” to Think Again about its fiscal policies, advisor James Carville said, “If there was reincarnation ... I would like to come back as the bond market. You can intimidate everybody.”

Rather than suffer “intimidation-by-bond-market” putting our whole society at risk, better to intimidate politicians to Think Again about raising the debt ceiling without first assuring our fiscal stability.

Cut up the national credit card, for the sake of America's children and for generations to follow.

 

Road to Hell paved with irony and big government

Melanie Sturm | @ThinkAgainUSA Read Comments - 0
Publish Date: 
Thu, 06/23/2011


Unlike Jack Nicholson's mother, who never saw the irony in calling Jack a “son of a bitch,” I'm hoping you'll appreciate another delicious irony. In a keynote speech at an international economic forum, a major political leader blamed the state's heavy role in the economy for stagnation. Government, he said, should “protect the choice and property of those who willingly risk their money and reputation.”

If you're guessing the critiqued policies are in Greece, Ireland or the United States, Think Again. In fact the speaker was President Medvedev of Russia, the country whose government excesses inflicted misery and deprivation on its people.

It is poetic irony, then, to hear Medvedev wax Jeffersonian while throwing overboard the Russian autocrats who've concentrated power in the Kremlin. Medvedev knows that “the proposition that the government is always right is manifested either in corruption or benefits to ‘preferred' companies.” Medvedev says, “The Russian economy ought to be dominated by private businesses and private investors.”

That is the definition of “seeing the light!”

As astonishing is the rejection of America's founding principles of limited government and free-enterprise by politicians who've glommed onto a micro-managed government-approved “capitalism.” I'm not claiming the U.S. has morphed into Russia, only a shared lesson. Government officials are too easily captured by special interests, often ones they should be regulating and on which they lavish taxpayer-financed favors. Therefore, trusting government officials to influence the economy is mistaken and dangerous.

The ironic truth is that governmental policies to promote home ownership precipitated the financial crisis by pushing suicidal loans onto low-income people and stimulating taxpayer-backed demand for the bad loans. As a result, the government perverted the free-enterprise system and subverted everyone's economic interest, sticking taxpayers with massive losses, saddling homeowners with unfair mortgages and damaging credit markets. More ironically, we've allowed government officials to deny responsibility, blame others and even benefit personally — sounds like Russia!

Economists say there's no such thing as a free lunch, but seeming to give free lunches elects politicians who claim they can do miraculous things like create economic growth and jobs. The reality is, despite economic models showing government could create wealth by spending (“investing”, in politician-speak), the models don't reflect the complexity of a dynamic market economy where millions of decisions are made simultaneously. While government can invest at the margins in research and activities that spin off useful technologies, spending incurs an opportunity cost as taxation, borrowing and mandates undermine businesses' desire to hire and invest.

Haven't we learned the Great Depression lessons when New Deal policies initially committed these mistakes, thus prolonging economic despair? In 1939, FDR's Treasury Secretary Henry Morgenthau said, “We have tried spending money. We are spending more than we have ever spent before and it does not work … After eight years of this administration we have just as much unemployment as when we started … and an enormous debt to boot!”

Since 2008, we've spent almost $2 trillion on stimulus and recovery programs. We've enacted a too-big-to-fail policy, bailing out bankrupt banks and car companies, making taxpayers liable for reckless decision-making while penalizing disadvantaged smaller competitors who don't enjoy government backing. Cash for clunkers and the first-time homebuyers tax credit generated no incremental demand. Hundreds of new complex regulations and hidden taxes lurk in financial reform and health-care legislation with critical details left to regulators. Employers worry that hiring implies accepting costs they can't control or predict. Not surprisingly, American businesses are reluctant to invest their $2 trillion cash horde.

As Karl Marx said, “the road to hell is paved with good intentions.” After all this government “goodwill,” unemployment exceeds 9 percent (despite promises the rate wouldn't top 8 percent by now), economic growth is anemic, and the misery index (unemployment plus inflation rates) is at a 28-year high. Federal spending is at an unsustainable 25 percent of GDP, up from a 60-year 18 percent average, as we borrow 42 cents out of every dollar spent. With $14.3 trillion in federal debt, Americans brace for higher interest rates as creditors doubt America's ability to repay.

The role of government is not to create jobs but to facilitate an environment hospitable to the private investment that drives innovation and, ultimately, job growth. America must revert to the values that made us the most prosperous country in history — smaller government, sensible though limited regulations, a globally competitive tax burden, entrepreneurialism, equality of opportunity, an exceptional educational system, respect for private property, and individual responsibility.

Pollster Scott Rasmussen wrote, “the gap between Americans who want to govern themselves and politicians who want to rule over them may be as big today as the gap between the colonies and England during the eighteenth century.” Americans don't want to be governed from the left, the right or the center; they want to govern themselves.

There's nothing ironic about that.



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