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Printable Version     Other Articles       Home         Getting America Back on
Track

Putting America Back on Track
    Restoring Fiscal Responsibility
by Curtiss Wikstrom

The following steps will bring the federal government under control, restore
solvency and fiscal responsibility,  take the enormous burden off the shoulders
of our grandchildren, restore individual liberty and freedom of choice, and once
again free up the spirit of enterprise in America. 


We need to stop spending. 
     Many in the federal government got the crazy idea that they could stimulate
"aggregate demand" by spending money, or causing more money to be spent.  They
argue that the new spending will put lots of people to work making new
things.    This has never worked in the past, and it didn't work this time.  In
fact it has always made things worse. They have been "stimulating" us to death,
with one thing after another, year after year.  They don't have enough common
sense to understand that if there were any merit to the "stimulus" theory, they
have gone far beyond the point that it can possibly do any good.  It has gotten
so far out of control that we now have a federal debt so huge that we can never
pay it off except through the inflation tax, which destroys the value of our
money and our savings.  Since the government can't afford to pay interest on the
debt, the federal reserve has set the interest rate artificially low so we can't
even earn anything on our savings any more.
     No matter how incompetent the government, we need to keep working and
providing for our families.  So what remains of the free economy is always
trying to recover, and always trying to get back to work.  It is quite
disingenuous for the President to claim that he is responsible for whatever job
growth that there is.  Any job growth that we have is in spite of his efforts to
destroy us, not because of it.  The green energy businesses that he threw money
at are going bankrupt.  The new jobs are being created in areas that he
neglected to "stimulate", so were overlooked by his wrecking ball.
       It is high time that we have a President and Congress who get the
government under control, and get their incompetent hands off the free and
voluntary part of our economy.
       The only solution is to stop spending so much.  Taxing more won't do it. 
The taxes Obama is proposing only make a dent in the deficit.  $150 billion per
year is only 1/6th of the expected $1 Trillion+ deficit.  But it will be an
additional $750 billion if he gets his new proposed "stimulus" package.  Taking
$150 billion out of successful businesses while putting 5 times that much into
businesses that are so risky that people won't voluntarily invest in them is not
a recipe for economic progress.  It is recipe for more losses and more debt.  
We need to stop spending, and stop "stimulating".

 We need to stop promising.
          We have unfunded liabilities so large that they can never be honored. 
While our nominal debt stands at about $15 trillion, the net present value of
our unfunded liabilities, or promises to pay people in the future, are between
$65 - $80 trillion dollars, and growing rapidly.   $70 trillion divided by 300
million people is $233,000 each.  or close to $1 million dollars for a family of
4.   It could not be paid off if we took 100% of the wealth of every single
person in the United States.  The only solution is to stop promising so much.

Discipline for Government
     The solutions to these problems are not much more complicated than the
budget of a family household.  The big difference is that the federal government
doesn't have the same sort of discipline.  We need to create that discipline and
institutionalize it.   We need to take their credit cards away, and we need to
take their power away. 

Requiring a balanced budget
     We need a balanced budget amendment that says in effect that neither the
President or Congress can serve another term if they don't spend and promise
less than they take in during any 2 year congressional session.  And we need to
put a cap on what all  government agencies as a whole can take from any one
individual person.  This is necessary to confine the federal government to its
proper purposes.

All Promises must be funded concurrently.  No Congress should be permitted to
obligate future generations.  Pay must be kept to what is affordable and within
the budget, and all pensions must be funded concurrently.  Long term projects
should be saved for, not borrowed for.  The revenue taken in by the federal
government each year is so huge that there is absolutely no excuse whatsoever
that they borrow money for projects.  

Pension Reform
      Legitimate government employee pensions must be defined "contribution"
plans, paid in for the year worked, owned by the employee, and included in the
year's budget.  Pensions should no longer be debts on the next generation. 
Several states and local governments that are required to have balanced budgets
have approached bankruptcy in the past few years because  they simply can't
afford to pay the pensions that they promised.  The pensions were open ended,
and there was either no money, or not enough money set aside to make the
payments.  Private businesses who had "defined benefit" plans ran into the same
problems, especially those who based their plans on payments from the business. 
The obligations got so high that they simply didn't make enough profit to pay
for them.  So they had no other choice than to declare bankruptcy and go out of
business.  There were pilots from some of the airlines who's pensions went from
a couple hundred thousand a year down to little or nothing.  The pilots unions
simply demanded and got promises that were unsustainable.

Social Security Reform

     Social Security should be converted to defined contribution plans. 
Required employee payments should go into a qualified retirement plan of their
choosing that is in their name and owned by them.  They should be permitted to
put more into the plan than required, or have additional plans.  A couple that
averaged a modest $60,000 a year together over a lifetime from ages 25 to 65
would put in a minimum of $7,440 per year on average, and accumulate  $560,985
by age 65 at the real rate of interest of 3%.  That will give them 37,707 every
year until age 85.  Or 32,216 until age 90.  If a couple would put in an
additional 5% of their earnings above the required 12.4%, they would have
787,189 at age 65, and receive 45,207 per year until age 90.  Of course if one
didn't draw all of that down, one could live much longer, or leave the remainder
to one's children or grandchildren (or great grand children).  With social
security, if we die prior to, or just after retirement, we get little or
nothing, and leave nothing to our children or grandchildren but our debts.
     Social security for those who retired years ago came out well, because
politicians increased their benefits far above what they paid in.  But for
today's worker, social security is a rip off.  And the funds have all been
spent.  All social security has now is a claim on our grandchildren's future. 
That is immoral.  The moral way to retire is to retire on our saving.  It is
also the most financially sound way to retire.
     Those who object claim that we can't count on the nation's businesses in
the future.  But if the businesses aren't making profits in the future and
hiring people, they won't be paying taxes into a government social security plan
either.  Either way, the retirement plans will rest on the health of businesses
in the future.  Under individual retirement plans, we will own the businesses. 
Under government social security, we will have nothing but one vote to try to
convince congress to squeeze as much out of our grandchildren as possible.  It
doesn't say much about our public schools if our children don't learn enough
math to make the above calculations and see what a rip off social security is. 
We should retire on our savings, not on our grandchildren's backs.

Sound Money
     Our future and our retirement depends upon sound money.  Since our debt and
liabilities are completely out of control, the federal reserve has forced
interest rates down to below the real rate of return.  We need to get pensions
under control, stop spending so much money, and get the government out of our
lives and off of our backs.  Only then can we ever hope for sound money.  Then
we can start earning money on our savings again, and building a future for
ourselves and our grandchildren.  When people better understand that sound money
is important for their retirement, they will start to vote against the
spendthrifts that they have been putting in office.  If we never stop spending
more than we take in, we will never have sound money, no matter how many times
the regulations or rules are changed.

Get the federal Government out of Education
     The billions of dollars that the federal government spends on education is
worse than a waste of money.  It is harmful and tyrannical.  The federal
government contributes about 5 or 6 percent to our local schools, but the cost
of the mandates that it puts on the schools is that much or more.  Our schools
would be better off without the money, we would have more local control as a
result, and the federal government wouldn't waste so much money.
      Those who object will say that the state and federal control assures
standards.  That is completely misguided and misinformed thinking.  The fact is
that  public schools are failing in many areas of the country.  They are as much
out of control as our federal government, despite all of the state and federal
interference, and in most cases because of it.  More money is not going to help
them.  The problem is that they don't have the discipline of the free market. 
Businesses that can't make a profit and keep the customers coming back have to
close.  Schools need this same discipline.

Stop meddling in absolutely everything
         The federal government has employees interfering in absolutely
everything we do, from who we hire to what light bulbs we can use.  There are
hundreds of thousands of people who produce absolutely nothing, but spend their
time harassing and second guessing our businesses and institutions.  They get
paid more than we do, and get pensions that are obscene.
     As long as we have the free and unobstructed right to start and run a
business, when people are laid off or fired they can go get a job somewhere
else, or start a service or business of their own.  If someone doesn't like us
for some unfair reason, we can go work for someone who likes us or appreciates
our contributions.  We need to have a voluntary society, with voluntary
associations, and a minimum of social engineering.  Then we will assimilate and
learn to accept and respect others.  So long as the government neither prevents
us from associating with others, or forces us to associate with others, we will
learn to get along without big brother.  It is time these social engineers go
out into the world and actually produce something or provide some service for
their pay.  These busybodies cost us hundreds of billions of dollars every
year.  We can't afford them or the damage that they do.  The evidence shows that
we will do quite well without them.  See the works of Thomas Sowell.
http://www.tsowell.com/

End Welfare and restore Charity
       The social fabric of our nation has seriously declined because we
destroyed charity, and put welfare in its place.   Where once churches were
active and thousands of volunteer organizations took care of the poor, the sick,
and the hungry, now the government does it.  And it does it at an enormous
cost.   Instead of volunteers we now have highly paid social workers with
benefits and big pensions. It is costing us a fortune.
     Interpersonal love, discipline, and accountability have been replaced with
subsidies, regulations and counselors.   As a result we have an enormous burden
on our governments to handle the results of crime, sexual immorality and broken
families.  When young women had babies out of wedlock years ago, they had to get
married or be taken in by their parents.  They and everyone around them were
well aware of the cost and heartbreak of the mistakes that they made.  So they
made fewer of them.  Today a young woman gets money and special benefits from
the federal government, and free contraceptives and abortions to encourage her
in her folly.   We give them food stamps so they can use their money to buy
drugs.  And instead of addressing the social problems that result in drug use,
we hear arguments to legalize drugs and make them as free as water, further
increasing the social cost of our foolish policies.
  Responsibility should be returned to Churches and Charities.  To make sure the
safety net re-develops adequately the local government can support these
institutions when necessary with contributions or alternatives, followed by the
state, and at the very last, followed by the federal government.  After a
voluntary system is working again, the federal government should get out of it
completely. 

Stop manipulating the States
     End all block grants and let the states spend less money.  States get money
if they do what federal social engineers want.   So they end up spending money
that the people otherwise would not vote to spend.  Local people are much more
frugal and responsible when they know what is happening and what it is really
costing them.  When their money goes to Washington, DC, then back to the state
government, then back to the local government, the benefits are disconnected
from the costs, so the people are fooled into thinking they are getting
something for nothing.  They are really paying much more.

Stop paying people for not working
     Employees should pay into a savings plan that is owned by them.  When they
are not working, they can draw from it, and when they are working again, build
it up.   When people know it is their own money that they are using, they won't
be so prone to abuse it as now.  Many people draw their unemployment benefits
down completely before even seriously looking for more work.  And many will not
take temporary work, waiting for something better.
     When unemployment "insurance" is socialized, the discipline is removed from
it.  Giving people back the ownership of their own earnings will make them much
more responsible, and reduce the social costs, and the financial costs,
considerably.

Repeal Obama care, and put nothing in its place.
    Would you give up your insurance and buy an insurance policy from a man
named Jack if you learned that his insurance company could never balance its
budget, was getting deeper and deeper in debt, and was losing money on
everything that it has invested in.  What if you further learned that the
company would have complete control over everything that you did,  that you
couldn't get any treatment without their permission, and you would never be able
to quit paying them and go buy insurance from anyone else once you agreed. 
Would you give up your insurance and buy insurance from Jack?  Would you change
your mind if you found out that Jack's real name was Obama?
     The cost of Obama care will be several times what Obama told us it would
be, and will further increase our debt.  That is always the case with promises
from corrupt and arrogant politicians.  And it will give bureaucrats in
Washington complete control over our health care, depriving us of the right to
make those decisions.  It needs to be repealed.  But we need to defeat Obama in
the next election to do that, and replace the Democrats in the Senate, so they
can't block the repeal.


Restore the Discipline of the Free Market
      A free market has a discipline.   A free business must give us good
service or good products to keep us coming back and doing business with it.  We
have a choice as to who we do business with.   We can buy insurance from those
who give us a plan that fits our needs, and we can make sure that they have some
real assets backing up their promises.   
     If a free business doesn't control its costs and make a profit it will
eventually go out of business, and someone more competent will take its place. 
We need to allow them to fail and maintain the discipline.  If we bail them out,
we destroy the discipline, and interfere with the natural process of change from
incompetent to competent management, or from old to new technologies.  When we
bail out a failing business, we may actually destroy the chances of a much more
competent competitor, who does a better job.
     Government bailouts also encourage and finance corruption.  Many of those
who supported Obama's election were from the businesses that he helped to bail
out. 
     It is not possible to have a wise and frugal government that gets its
incompetent hands into things where it has no business.  Neither Presidents nor
government bureaucrats can run the economy, no matter who is in power.  When
they take over businesses and monopolize them, they completely remove the
discipline of the market.  They can be incompetent, corrupt, and arrogant, and
no one can replace them.  When they fail they don't go out of business, they
just continue to raise our taxes.  We are no longer free to get our service from
someone else or do it ourselves, and they are no longer accountable to us.  We
have to do what they tell us and wait until they get around to us.  We are no
longer free.

     These reforms would get us out of the enormous mess that we are now in and
restore hope for the future.  Are we willing to elect a new President and Senate
that have the courage to make the changes? Will we support them through the
violent resistance, hostility, and hatred that they will have to endure in order
to restore our republic of limited powers?

 

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