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
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.
Legitimate government employee pensions must be defined
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
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
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.
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.
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
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
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
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?