Economics
Finally–A Serious Plan to Save the American Dream
Today, the accumulated debt of of 235 years of American civilization reached 14.3 trillion dollars–over $46,000 for every man, woman, and child in the United States.
For the next few weeks or months, Congress will fiercely debate whether to keep adding to that debt, or make some radical choices to control spending which could save the American Dream.
That Dream is not personal peace and affluence. It’s a commitment to human liberty, centering on freedom to worship God, that made the United States a very special nation for centuries–and produced an amazing degree of blessing and prosperity.
Exceptional application of biblical principles built an exceptional nation.
Can that nation and its economy be saved?
I believe the answer is yes if we believe and act wisely.
The Heritage Foundation has produced a serious economic plan to save the American Dream. It will require much prayer,, corporate repentance, courageous senators and congressmen, and a new American president to implement it.
But it is totally necessary. As Heritage points out, our national economy is in decline and could actually collapse unless we deal ruthlessly with our careless addiction to government largesse and indebtedness.
Representative Paul Ryan has also produced a Congressional road map to economic solvency. But the Heritage plan is more realistic, detailed, and politically possible if we vote in a good slate of leaders in the 2012 elections.
But we also need to understand that election results and the economies and laws they produce are a reflection of the hearts of a people. In the coming months, millions of American hearts need to:
- Seek the face of God for forgiveness for our personal and national sins. We need a renewal of the American spirit that will be the wind behind societal change.
- Become again a people of faith. Faith in God, faith in his principles, and faith in economic freedom that is not based on government dependency, regulation and bail outs.
- Restore a sense of morality and self-control to their personal and public lives. Our runaway spending and deficits are a reflection of personal bad habits and uncontrolled desires. There will be little change at the “top” if there is not fundamental realignment at the “bottom.”
- Accept some suffering and sacrifice to clean up our national economic mess. Just as individuals and families must cut back, work hard, and persevere over time to overcome their poor business decisions, so we as a nation must do the same. No pain, no gain.
But there’s hope on the horizon. Please read Heritage Foundation President Ed Feulner’s announcement below and click on the link to gain a perspective on Saving the American Dream.
Then pray and do your part to make it a reality. RB
Saving the American Dream – May 10, 2011
By Ed Feulner
Fellow Americans:
Today, I am excited to announce the release of The Heritage Foundation’s comprehensive agenda that sets a new course for the size and scope of the federal government. The new report, “Saving the American Dream: Heritage’s Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” lays out specific policy recommendations in Social Security, Medicare, Medicaid, health insurance, the tax code and federal spending. Saving the American Dream envisions real solutions for staving off America’s potential decline while strengthening the economy for current and future generations.
We are doing this because we have come to a time of decision in America. For far too long, Congress has been on an unsustainable binge of spending, taxing, and borrowing. Our nation is going broke, and we are passing the costs of these misguided policies to our children and their children.
Over time, our national government has become bloated, overextended and unrestrained, oblivious of its core functions, operating far beyond its means and vastly outside of its proper constitutional bounds. Unchecked, the course we are on now will cripple our economy, undermine our prosperity, and lead to fiscal insolvency. By robbing the future of opportunity and freedom, it will destroy the American Dream for future generations.
Already, we are living through the shame of being publicly lectured by our Communist Chinese creditors, who have contempt for our profligacy. The day it was announced that Standard and Poor’s had lowered the outlook on our economy, a collective gasp went through the international community. If our elected leaders keep it up, we are certain to face financial crises like Greece or Portugal.
America is on the verge of becoming a country in decline—economically stagnant and permanently debtbound, heavily regulated and bureaucratic, less self-governing and less free.
But this fate does not have to be our future. We can get spending under control, balance the budget, and shrink our debt. We can limit the size of government and set free once again the unlimited genius of Americans to create wealth and jobs. We can turn the tide and change our nation’s course.
Saving the American Dream is our plan to fix the debt, cut spending and, above all, restore prosperity. It balances the nation’s budget within a decade—and keeps it balanced. It reduces the debt and cuts government in half. It eliminates government-mandated health care and fully funds our national defense. In order to get our fiscal house in order, we must address Social Security, Medicare, and Medicaid, the three so-called entitlement programs which together account for 43 percent of federal spending today. Far too many seniors still lack enough help to avoid poverty. Saving the American Dream therefore does not end these programs; instead it focuses them on those who need them.
Our plan also encourages Americans to become more fiscally responsible themselves. It redesigns our entire tax system into an expenditure tax that will have a single flat rate. This is a structure that will promote savings, therefore benefiting individual Americans, our body politic, and the economy. Greater savings mean stronger capital formation and thus a more robust economy, which means real jobs for Americans.
This plan substantially reduces the size and scope of the federal government, fundamentally increases the role of the states in choosing their own practices, and brings decision-making closer to the people rather than unelected administrators. These are crucial steps that will get our nation on a path of fiscal, political, and constitutional responsibility. It is part of our larger effort to get our country back on track, reclaim its truths, conserve its liberating principles, and build an America where freedom, opportunity, prosperity, and civil society flourish.
At the end of the day our plan, while economic in nature, has a higher moral purpose. If entitlements are not reformed, the next generation and future ones will have to pay punitive tax rates that will end liberty as we have known it. Our proposal aims to preserve America’s promise bequeathed to us by past generations.
Edmund Burke reminds us to think of our time on this earth not as an individual and temporary event, but rather as a partnership “between those who are living, those who are dead and those who are yet to be born.” Keeping faith with this partnership is what we aim to do with Saving the American Dream.
We have been here before, and every time the American people have always risen to the occasion and seized the moment. In 1776 we were told that no upstart colonists could defeat the strongest nation in the world, and we decided to change the course of history. In 1860 we were told the Union could not hold and that America was over, and we brought forth a new birth of freedom. In 1980 we were told that the American century was at an end, and we launched a great economic expansion, rebuilt our military, and revived our national spirit.
Hard times demand tough choices. The future of our nation is at stake.
All that is required, as my hero Ronald Reagan once said, is “our best effort, and our willingness to believe in ourselves and to believe in our capacity to perform great deeds; to believe that together, with God’s help, we can and will resolve the problems which now confront us.”
Together, let us seize the moment, change our country’s course, and save the American Dream.
Edwin J. Feulner
President, The Heritage Foundation
When Water Reaches the Ceiling, Don’t Raise It–Start Pumping!
I believe we need to bring back an important word that people hesitate to use in politics:
Lie.
Have you noticed that politicians usually skirt that little word? The news anchor says, “Do you think you lied about this or that?” The answer usually comes back, “Well, it might be an untruth , but”….or “I wouldn’t call it a lie, but…”
That’s not good enough anymore. We are being told a number of lies by our government because we are in grave trouble and there is much to cover up. We don’t tolerate lies in our personal lives and dealings, and we shouldn’t in the civil sphere either.
The current lie being told is that we need to raise the United States debt limit or go into default. They’re lying to us because because they need to scare us into getting their way–to keep on spending recklessly.
But it’s a lie–and it’s time we called their bluff.
Yes, we can with integrity oppose the raising of the US debt ceiling; No it will not cause a default or put in jeopardy “the full faith and credit of the United States;” And we must oppose it at this hour because our burgeoning debt is grossly immoral and could cause a collapse of the entire world economy.
Now is the time to say NO.
I cannot un-wrap this subject better than Redstate.com and the Heritage Foundation have done in the following articles. Please read them carefully and do everything in your power to oppose the raising of the US debt ceiling.
It’s not time to raise the ceiling. It’s already far too high. We need to start pumping the flood of government debt out of the precious dwelling we call the United States of America.
On April 25, Redstate exposed the debt ceiling lie quite clearly. Here is their take:
“Reporters, Democrats, and even some Republicans have begun repeating an infectious lie in the prelude to the debt ceiling debate. Secretary of Treasury Tim Geithner started it off and it has been repeated by reporters in print, on radio, and on television, including Fox News.”
“The lie is very simple: a failure to raise the debt ceiling will cause a default on American debt. This is utterly and categorically a lie. Anyone who says otherwise is a liar.”
“As Senator Pat Toomey noted the other day,
“Next year, about 7 percent of all projected federal government expenditures will go to interest on our debt. Tax revenue is projected to cover at least 70 percent of all government expenditures. So, under any circumstances, there will be plenty of money to pay our creditors.”
‘Moreover, as the Congressional Research Service has noted, the Treasury secretary himself has the discretion to decide which bills to pay first in the event that a cash flow shortage occurs.’
“Nonetheless, the media and Democrats keep repeating the lie. And it is a lie.”
“Veronique de Rugy and Jason Fichtner chronicled debt ceiling fights in the Washington Times and, from their writing, we can categorically show it to be a lie to claim a failure to raise the debt ceiling will cause a default on American debt obligations.”
‘In 1985, Congress waited nearly three months after the debt limit was reached before authorizing a permanent increase. In 1995, 4 1/2 months passed between hitting the ceiling and congressional action. And in 2002, Congress delayed raising the debt ceiling for three months. In each case, the U.S. and the economy survived.’
“Not only did the economy survive, but the United States did not default on its debt obligations, the United States did not lose its credit rating, and interest rates did not go up as a result of the default.”
“To say that failing to raise the debt ceiling will cause a default is a lie and anyone who says it is a liar.”
“If we fail to raise the debt ceiling and do default, it will not because because of a failure to raise the debt ceiling. It will be because Barack Obama and Tim Geithner chose to default for political gain.”
“Again, as Senator Toomey points out:
‘As the Congressional Research Service has noted, the Treasury secretary himself has the discretion to decide which bills to pay first in the event that a cash flow shortage occurs. Thus, it is he who would have to consciously, and needlessly, choose to default on our debt if the debt ceiling is not promptly raised upon reaching it. It takes a lot of chutzpah to preemptively blame congressional Republicans for a default only he could cause.'”
The Heritage Foundation gives this wise explanation to the debt ceiling debate:
“All across Western Europe—the land of platinum-plated social benefits, the 35-hour work week, tony retirement plans and government-funded health care—countries are coming to the realization that they can no longer afford these luxuries amid skyrocketing deficits. Yet here in the United States, as we face a $14.3 trillion deficit, some are calling for increasing our government’s ability to borrow even more money without any concern for spending reform. Congress can’t allow that to happen, lest we become the Europe of the West.”
“The U.S. government is fast approaching its $14.294 trillion debt ceiling — the statutory limit on how much money it can borrow to finance spending. Just how big is that? To put it in perspective, it would take essentially everything that Americans produced in all of last year to pay off the existing national debt. That comes out to $45,000 of debt for each American.”
“Unfortunately, it’s all too common for Congress to reach that ceiling and keep raising its own credit limit, letting itself borrow and spend even more. In fact, Congress raised the debt ceiling from $6.4 trillion in 2002 and nine times thereafter to its present levels. Hopefully, though, this time will be different.”
“Yesterday on “Face the Nation,” Senator Mark Kirk (R-IL) said, “I will vote ‘no’ on raising the debt ceiling unless we have comprehensive, dramatic, effective, and broad-based cuts to federal spending including the reform of entitlement spending.” Sen. Kirk’s instincts are right. The solution starts with Congress. David Addington, Vice President for Domestic and Economic Policy at The Heritage Foundation, writes:
‘Federal spending has been out of control for decades, and federal borrowing has therefore also been out of control for decades. America has amassed a giant, unaffordable debt and a giant, intrusive government. This did not happen by accident. Congress passed all the laws that made it happen. Fortunately, Congress has under the Constitution all the power it needs to solve the problem it created. It needs only the will to do so and the support of the American people.'”
“Here’s how Congress should use that power. As Addington writes, Congress should not increase the debt limit until it puts the government firmly on the path to financial responsibility. And it can get there by cutting current spending, restricting future spending, and putting a more effective federal budgeting process in place.”
“The Heritage Foundation identified $343 billion of potential spending cutsthat could be made on top of the cuts passed by the House in February and the repeal of Obamacare appropriations, which the House approved in January. When it comes to future limits on spending, Congress can impose enforceable caps on out-of-control entitlement programs and pass a balanced budget amendment. The budgeting process should be reformed, too, by making it more transparent and imposing new limits on federal agencies. Merely raising the limit without reforms is the worst option, Addington says:
‘The least acceptable outcome is for Congress to continue to raise the debt ceiling over and over, doing nothing to drive down federal spending and borrowing, and to pile trillions of dollars in debt upon the shoulders of America’s children and the generations to follow.'”
“President Barack Obama and White House officials have warned of global economic Armageddonif Congress does not act now to raise the debt limit. Their warnings, though, are reckless hyperbole. A greater threat is the U.S. government’s unchecked expansion of unsustainable deficit spending. Congress must break its pattern of borrowing more and spending more by acting now to cut spending and get the government’s fiscal house in order. Only then can it avert a real crisis.”
Now that’s the TRUTH about the grossly immoral US debt and debt ceiling.
No more raising the lid. It’s time to drain the swamp to salvage the nation we call “home.”
Congressional leaders: Just say NO.
President Obama and Administration: Don’t tell us a lie.
Forget the debt ceiling and start pumping! We’re ready to help you with the clean-up and re-building of our once financially prudent nation.
But the buck stops (being borrowed and cheapened) with you.
The Meaning of the Madison Protests
If you’re like me, you’ve been watching the protests in Madison, Wisconsin–and indeed throughout the Middle East and the world–with great interest and some fear and trepidation.
On the one hand it’s good to see people standing up for what they believe. On the other hand, the Madison protests in particular seem bullyish and quite deceptive–with teachers closing down the schools with faked sick notes and fourteen Democratic law-makers fleeing the state to shirk their legislative responsibilities.
For the protesters, their main justification seems to be that the end justifies the means.
But that principle only applies to despots, tyrants, or anarchists. It does not apply to Judeo-Christian-based republics, their ethics and manners.
Does that give us a hint of the meaning of Madison?
For those who haven’t been following this story, here’s a little background. The 2010 elections saw a large number of conservative governors, legislators, and representatives rise to leadership promising a return to fiscal sanity. Many of them were elected in states where the previous liberal leadership had run up huge budget deficits through unrestrained growth of government workers and services.
In Wisconsin, enter newly elected Governor Scott Walker who inherited a 3.6 billion dollar deficit from the out-going administration. As in many other states, the people elected him to reverse direction and deal with the budget problem caused by egregious spending.
Governor Walker remarked last week: “I’ve said all along the protesters have every right to be there, but I’m not going to let tens of thousands overload or overshadow the millions of people in Wisconsin, the taxpayers of the state, who want us to do the right thing and balance the budget,”
Walker decided to take his budget axe to the root of the problem: the unsustainable and unfair growth of government employee entitlements. He proposed having government workers:
- Pay twelve percent of their own health insurance costs. That seems reasonable.
- Pay five percent of their pensions. That seems fair too.
- Have some limitations on their collective bargaining agreements. (More on that later.)
The first two points are no-brainers. These are modest changes that are totally necessary. We are in a deep recession. People in the private sphere are struggling to make ends meet, and, in some cases, are making draconian cuts to their businesses and lifestyles to survive.
Shouldn’t government workers be asked to make some sacrifices too?
The average America believes so. That’s why deficit-reducing governors, legislators and representatives were swept into office in record numbers in November.
In fact, the problem is much bigger than just asking government workers to give a little. The truth is that times have changed radically in America over the past fifty years.
It might even be necessary to re-define “white collar” and “blue collar” workers.
For most of America’s history, white collar stood for the private sector professionals and business people who wore nice suits and made more money than farmers, factory workers and people in the trades. The blue collar workers were the lower rung of society who got dirty for a living.
How times have changed. Today, the white collar workers are the government folks (plus some professionals and business people). They wear the nice suits and work for a smorgasbord of agencies like the IRS, FAA, FDA, NSA, and thousands more. And today’s blue collar are the self-employed and small business owners who are being strangled by government regulations, fees, and rising taxes to pay for the salaries and benefits of the new government white collar class.
It’s the new American reality–and it’s a huge economic problem.
According to the generally liberal newspaper–USA Today–this growing discrepancy between the salaries of government white collars and private blue collars is exploding. Here’s their take:
“At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds. Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.”
“Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.”
“The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.”
“What the data show:
•Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government’s contribution to pensions. Employees contributed an additional $10,569.
•Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.
•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.”
USA Today’s number relate to the federal government work force. But the same escalation in state government entitlements–especially pensions–has followed the national curve.
At a basic level, the current battle in Madison boils down to the simple need of shrinking the size of government and its perks. It will soon spill over to many other American states that are also “government-heavy.”
It’s way past due.
Government service has been historically viewed in this nation as “public service”–a sacrifice one makes for less pay and benefits to “serve” his country. This concept comes directly from the Bible in Romans 13 where government is viewed as a “minister of God for good.” A minister is a servant. He’s not the boss, the wealthy owner, but rather the one who sacrifices for the greater good.
For over two hundred years, America kept to this wise political model.
But over the part few decades the power of government unions has changed all that. Instead of seeing government employment as a “service,” it is now viewed as a right that demands more money and higher benefits than those who pay the bills in the private sector.
Let’s talk about unions for a moment. I was a union member for a short time in my life, and I’m certainly not against the concept. The union movement was born during a time in which private business was neglectful of a number of basic human rights. The early unions helped correct that by encouraging and passing some good child labor laws and eventually the five day work week. I’m not sure that is biblical (six days in the Scripture norm), but it was a healthy step.
Unions helped balance the economic ledger in the early days of the Industrial Revolution.
However, today, unions have become a noose around the neck of business trying to compete in a global marketplace. With basic human rights issues settled decades ago, unions have become primarily a potent liberal political force–without the concurrence of members. They have gotten in bed with state and national lawmakers in raiding the government till for health services and pricey pensions that the average taxpayer cannot afford to underwrite.
Truth be told, union power and their demands are financially raping many state governments. Wisconsin and many other states are broke because the private sector has been forced to support out-of-control government growth and its associated costs.
Now to the controversial part. The union members are saying that the Wisconsin protests are not about paying their fair share of health care and pensions. They say it is about collective bargaining rights. But history is clear on this point: Government unions should not have collective bargaining rights. So said Franklin Delano Roosevelt in the 1940s and every president prior to him. Roosevelt believed government workers were servants of the people, and should never be put in the position where they can paralyze or shut the government down–as they doing in Wisconsin.
Private unions can collectively bargain–not government ones. They are essential to the smooth functioning of a civil society.
If you’re interested in the “facts” about the Wisconsin protests, click here for valuable information.
But there is a bigger meaning to the Wisconsin riots that are destined to hit other cash-strapped states. It is this: A battle is going on for the heart and soul of the American nation. It is a 230 year battle between the forces of liberty and those who look to government controls.
America began in liberty–essentially the first constitutionally-born Christian republic in the history of the world. America’s great experiment in liberty was the result of spiritual revivals, faith in God, morals in society, and godly principles in family life, economics and civil polity.
Over time, the forces of tyranny turned the American nation from a Christian republic to a Christian-based democracy; Then to a secular-based democracy; Following the election of Barack Obama–they were on the verge of changing the American nation into a secular-based social democracy with huge government overreach (programs and entitlements) and a great erosion of freedom.
But the people rose up in 2010. Step one in restoring the American heritage of liberty was the Tea Party movement. Step Two was the landslide November 2010 elections which included the election of Scott Walker as governor of Wisconsin.
We are now entering Step Three in the reformation process–the paring back of bloated governments and its restraints on American competitiveness, greatness and freedom.
Many battles lie ahead in various state capitals. In Washington, D.C., a revitalized House of Representatives is leading the way for federal reforms in the growth of Big Government. It will be a a test of wills, but the cause of liberty is worth fighting.
Step Four will be the 2012 national elections. We need a US president and administration that is committed to scaling back the crippling power of the Entitlement State. We also need a United States Senate that is willing to look at vital tax reform, a balanced budget, and dealing with the federal entitlement monsters of Social Security, Medicare, and Obamacare.
This is the meaning of the Madison protests.
Step Three has begun.
It is a fight for America’s future under God and his principles of freedom.
Will you pray and join the side of liberty?