Massachusetts voters sent a complacent Congress this message:
"We are sick of your sense of entitlement, we are tired of being taken for granted."
America can be fixed.
This is the first in a series on the policy ideas that can be used to set this country right again, set it on a path to prosperity, for you and your family, ideas that could detonate the cemented hardening of the legislative arteries in DC.
I know you're tired, I know you're in need of the tonic of common sense thinking, common sense grounded in rational, clear-sighted vision.
I know you're tired of political debates chronically stuck in the finger-wagging, finger- pointing pulpit stage.
We Can Do It
You want action, you want a government not built and controlled by the machines of special interests, but built on the will of the people, built by the courageous genius of the U.S. Constitution of 1787, the Articles of Confederation of 1778, the Declaration of Independence of 1776, by the older Articles of Association of 1774.
The genius being that the source of government power rests in the hearts of the people.
That the genius of liberty is the greatness of America.
That's what Massachusetts voters told the country. That's what the Tea Partiers are telling you.
You have no use for those who can always see and condemn the crony capitalist, but who won't say a word about the crony politician, or who believe the omnipotence of government is the only predicate of a healthy Uncle Sam - or that spending your tax money to appease any grievance, however slight and jejune, will create prosperity for your family.
Their credibility is as evanescent as steam out of a rattling tea kettle.
We can avoid the vanity of those like former President Bill Clinton, who advises the Dems to do something, anything, to get health reform passed; no matter that this is fake reform that will damage the economy while doing nothing to stop rising costs or insurers from price gouging, as it preserves their monopoly on coverage.
We can avoid the scroungers exercised only by their poll numbers and not your family's financial well-being, who want to blind you with their version of the truth after they've poked you in the eye several times with what they think is good for you.
Forget the people who are selling a Franklin Mint ‘be a part of history' commercial to Congressmen desperate to hold onto their majority power.
Their minds are sponges filled with self-righteous, self-serving, ignorant bombast, ignorant of the serious harm they will do to your savings and well-being. Because spending is the word that charms their hearts and inflames Congressmen to dreams of textbook glory.
Don't listen to the crony capitalist or crony politician who can hire the vulpine cunning of the legal bar to defend their excesses and cover up their damaging behaviors with a multitude of spins. Instead, listen to the independents who swung the vote hard toward Brown, same as in Virginia and New Jersey, independents who don't care about politics, but who care about policy, who are sick of the high demagoguery coefficient in this political season that is now wall to wall, 24-7.
Playing the Reagan Film Backwards
The Democrats and the White House have been playing the Reagan film backwards, some suggest.
Pro-growth economic policies are scarce, the fiscally responsible are an endangered species in DC, as the government has been overtaxing, overspending, over regulating, overprinting, and overly restricting trade.
We are in a fourth bubble, a government bubble that has left DC a boomtown as government jobs have soared, as former Republican House Speaker Newt Gingrich points out.
A balanced budget is a moral issue. If the US government had grown at the level of inflation in 2001, it would be $1 trillion smaller today, analysts note.
Health Reform Concerned Massachusetts Voters
If it's so great, why does everyone want to be exempt from it? If it will pare down the deficit and pay for itself, then why doesn't Congress vote in a lockbox for revenue raised from health reform taxes?
What's to stop Congress from using tax revenues raised in health reform for pork or other spending?
Massachusetts voters have their own state health reform, Romneycare, which raised premiums faster than the growth of health costs in the state, and where one in five residents had their coverage turned down by doctors and clinics because it was inadequate.
Cadillac Tax Really a Dodge Minivan Tax
If the President is intent on protecting the middle class, which won him the White House, then why doesn't he index to inflation the Cadillac tax on expensive health insurance plans—which is why this tax is really a middle class Dodge minivan tax?
And didn't Massachusetts send a message to Congress to quit it with the side deals favoring their political donors, to stop exempting special interests, as well as potentially 17 states and unions from health reform?
Isn't it worth noting that President Obama is not president of the UAW, but president of the United States?
Uncle Sam in a Hard Knot
We are now set for a lame duck Congress, where House Speaker Nancy Pelosi has told Democrats to sit on their hands and not pass anything that even smells controversial.
In the meantime “we are tying Uncle Sam up in a hard knot,” to quote former Supreme Court chief justice Harlan Stone.
The single biggest problem of government today is it is too big and dysfunctional. We have veered from a rugged, independent nation to a soft bailout nation, analysts note.
America has problems, and it can certainly fix its problems now, with the same courage, optimism and fortitude that got it through all sorts of calamities.
Begin With a Small Step, the Truth
The real level of taxation should be the level of spending.
Tough to stick to, given the federal deficit is veering towards $12 trillion, threatening to swallow the US economy whole, and where we are selling more of ourselves to China, Russia and the Sauds, as all US tax receipts total just $2.4 trillion.
The President has repeatedly said health-care reform wouldn't raise the deficit “by one thin dime, and he's right,” says economist Art Laffer, the father of supply-side economics. “It will raise it by thousands of billions of dimes.”
Meanwhile, stimulus spending is treated like a rounding error in Washington, and all DC can come up with is a new deficit commission to tackle its calamitous spending problem, commissions being a signature failure of the political process, and which will likely in the end endorse a VAT, hamstringing the economy further.
Meantime, to fix the banking sector and avoid a recession, the skunk works over at the Federal Reserve have “increased the money supply equal to the total of what it printed from the Colonial age to today, times a factor of ten,” says Laffer.
And now, Congress is moving to raise the debt ceiling high enough, likely beyond the $12.4 trillion it approved in the dead of night before Christmas, so it can avoid negative headlines during the mid-term elections later this year.
Higher Taxes Are Upon Us
And now the expiration of the Bush tax cuts is upon us. Tax cuts that many in Congress and tax experts note did help grow federal revenues.
Even big spending Keynesian economists say you do not raise taxes in a downturn, ever. Every school of economic thought says that.
But besides the fact that taxes will likely rise as the Bush tax cuts are expiring in 2011, now there's talk in the air of new health reform taxes, new taxes for cap and trade, new carbon taxes. “If they do a carbon tax, then they should get rid of, or curtail, the income tax to make sure they don't do damage to the economy,” Laffer says.
“Grab your wallet and head for basement," he adds.
First Steps Towards Economic Growth
The government could have avoided this extra spending and possibly created more economic growth if it had allowed certain financial sector bankruptcies to take place, Laffer says.
Laffer says it also could have taken the trillions of dollars spent on the bailouts and “declared a federal tax holiday for a year and nine months, that would have sent the economy rip roaring ahead.”
And to get the economy running full steam and help job creation, the Treasury and the Federal Reserve should sell off everything the government has acquired in the bailouts in the last two years, suggests former speaker Gingrich.
And rip out failed bureaucracies root and branch, Gingrich notes.
Also, cut personal income taxes, abolish the death tax, cut corporate taxes, keep capital gains taxes low (as China does), and give businesses more tax relief in the form of expensing of capital equipment, as John Kennedy did.
A CBS News and Gallup pollreported a year ago that by 59% to 22%, respectively, those polled favored business tax cuts over government spending as the best way to end the recession.
Remember, Kennedy was chastised for passing tax cuts his critics said benefited the wealthy, to which he replied, “the best form of welfare is still a good, high-paying job,” notes economist Laffer.
Despite what the Democrats say - that the Republicans have no health reform ideas - they do, some two dozen or so ideas in all, many of which could possibly stem the inexorable rise in costs, including malpractice reform, ways to curtail costs both Congress's and Massachusetts' reform did not have (both reform measures mirror each other).
The policy ideas are coming. Stay tuned.
Next up: Tackling the deficit.