PoliticalTalk

Time for Governmentaholics Anonymous

“Hi, my name is Bill, and I’m a governmentaholic!”

After listening to Barack Obama’s economic plan, you can expect the number of addicted Americans to grow. He calls for substantial government subsidies for healthcare, college, foreclosure relief, pension plans and alternative energies. He favors tax cuts for middle-class workers and tax increases for top earners and businesses. Those tax increases will need to be very high to pay for his massive increases in spending and his proposed takeover of healthcare. But, like any addiction, the costs keep going up the more citizens are addicted.

Too many Americans have a need for a 12-step program to help break their addiction to government assistance. Unfortunately, some Americans don’t even realize that Democrats are selling a dangerous addiction that further undermines personal responsibility and freedom while creating more government dependence and out-of-control spending.

Senator McCain rightly blames both parties for the wasteful spending, “Congress and this administration have failed to meet their responsibilities…. Government has grown by 60 percent in the last eight years. That is simply inexcusable.” McCain’s economic plan doesn’t create new entitlements; it gives Americans more freedom by allowing them to manage their own lives.

In addition to promising a simplified tax code, McCain pledges to cut taxes on all and raise them on none. In addition to eliminating government waste, he wants government to shrink, not grow. He wants to cut the waste and end earmark abuse on pet programs. To McCain, Americans don’t need renegotiated trade agreements or protection from competition; they just need freedom to compete in a free-trade, global economy! His plan for healthcare takes the responsibility and choices away from the government and employers and gives it to every American adding portable policies, tax credits and saving account options. 

McCain treats citizens as adults capable of rising to the challenges they face. For all his talk on self-reliance, Barak Obama’s message of hope doesn’t depend on our citizens achieving their own American Dream. His hope resides in government’s ability to create more programs and more dependent Americans. 

Nearly 9 million Americans are asking for federal help because they made bad decisions about loans they could not afford. They risked and lost in the housing market. Are taxpayers responsible for everyone’s bad decisions? What about the people who played by the rules and waited until they could afford to buy? Are they to pay more taxes to help those who were reckless?

When politicians try to fix economies, look out! In 1929, the stock market crashed, and the politicians made it worse. In 1987, President Reagan faced a stock market crash that fell by almost the same amount. What followed was not another depression, but 20 years of prosperity, low inflation and low unemployment. What was the difference? To the dismay of the media and many politicians, Reagan did nothing. He knew that the economy goes through cycles and would recover on its own.

Recently, when asked what the President and Congress should do, Harvard Professor N. Gregory Mankiw, Chairman of the Council of Economic Advisors, replied, “Absolutely nothing!” The economist Thomas Sowell provided needed perspective, “There is not one economist among the 535 members of Congress. But, in an election year, that is not a political handicap. Santa Claus has won far more elections than any economist.”

In the past, we’ve tried spending our way to being a very compassionate country.  Our government invested $5.4 trillion on means-tested welfare payments in the “War on Poverty.” The investment would have been worth it, if it had worked, but it did not work. In fact, the results of this type of compassion have been devastating. Under the guise of caring, we’ve ruined families, making it more profitable to be a single-parent family than to have husbands in the home. 

With the cost of Medicare, Social Security and existing entitlements skyrocketing, and federal and state governments having to cut budgets, much of America is in denial! They want more from government, and they want others to fund their addiction! As Gerald Ford said, “A government big enough to give you everything you want is big enough to take everything you have.” You know who pays for everything Santa Claus puts under the tree—it’s you and I!   

It’s time we measure compassion by how many people no longer need government programs instead of by how many are served by them. Outside of a necessary safety net, it’s time to cut programs, not expand them.

In November, a vote for the Republican team is not a vote to end compassion. It’s a vote for caring enough to assist without creating more dependency. Make sure a safety net doesn’t become a lifelong hammock. In fact, the push out of the hammock may be the most caring thing we can do to help more citizens gain confidence in their own ability to overcome life’s obstacles.

Byline: Dr. Terry Paulson is a psychologist, speaker, author and host to the politicaltalk.org blog. Contact him at terry@terrypaulson.com. This column first appeared in the Ventura County Star on July 21, 2008.

Good Morning!

America's Fiscal Policy Requires Brakes!

Brian Riedl, an expert on Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, paints a bleak picture, "America's fiscal policy is headed for an iceberg!"

The House Republican Study Committee has suggested a budget proposal that has been called by some "the Contract With America: Renewed!" It puts some serious brakes on the rate of federal spending. It would cut hundreds of billions of dollars in projected spending that would slow the growth of the federal government to rates not seen since the last decade.

The budget proposes common sense cuts in corporate pork, eliminates some unnecessary programs, gives states greater control over education, roads, and healthcare, and brings market-based reforms to Medicare. The Democrats will attack these changes and some constituencies will scream, but Republicans need to have the backbone to take a stand for the principles they value.

In one of my own Republican surveys, smaller government is identified as the most important value that unites Republicans (http://www.unitedwecanwin.com). It's time for Republicans to act that way! If they don't, Brian Riedl paints a heavy cost to be paid down the line--"an economy-crippling $7,000 per household tax hike in 10 years just to balance the budget."

Read Brian Riedl's article yourself! "RSC Budget Provides Serious Blueprint for Spending Restraint" can be accessed at http://www.heritage.org/Research/Budget/wm1011.cfm/. 

The budget problems aren't limited to the federal government. The California's Legislative Analysts Office recently reported that California faces an unfunded liability of $40-70 billion for state employees' retiree health costs. That liability would cost $6 billion a year for 30 years to fund. This finding just ratchets up the magnitude of the state's deferred compensation disaster from a September review that found that California's biggest government agencies faced $100 billion in unfunded liabilities for existing pension, health care and workers' comp commitments.

This is a fiscal time bomb that was created by the short-term focus of politicians and the ignorance of voters about back-loaded compensation packages passed to assure peace and campaign support from public worker unions.

With term limits, the politicians who created the problem may very well have moved on by the time the bill has come due. Our reserves aren't going to be getting the returns the projections suggested, and retired workers are going to be living longer than was planned. They're not going to volunteer to die to cut the costs!

On the federal and state level, it is time to face reality. The tab is just growing, and future generations are not going to be happy with the decisions we have made. It's time for fiscal restraint and a new Contract with America that slows the growth of spending.

Write your politicians now? We need actions not more deferred bills we can't afford.

(Source: Gary Galles, "Deferred comp hurts taxpayers," Daily News, 3-14-06, N-13)

Entitlements Threaten America's Future 2-15-06

Public and private employers are watching a nightmare unfold. The pension and healthcare benefits they have promised retirees and the number of aging baby boomers who will claim those promises will strain even the best run organizations. People are living longer and healthcare costs show no sign of leveling off. This is a recipe for disaster. Many companies have folded under the obligations; more than 2,000 companies have already unloaded their pension obligations on the federal Pension Benefit Guarantee Corp.

Giving benefits is easy when the costs are years away; initiating cutbacks or take-aways is hard at any time. But waiting until organizations go bankrupt, ensures but one thing-no one wins.

It's time to honestly faced the music before the crisis gets worse. New accounting guidelines are requiring organizations to report the future liabilities more accurately. USA Today recently reported that the Los Angeles School District went from stating unfunded health care liability obligations for retirees at $5 billion to a more accurate estimate of $10 billion. That's bad news for the taxpayers who will have to foot the bill and for the children who will have to do without because funds will be diverted to handle the costs.

Los Angeles had set aside $1,000 of its $5,500-per-student budget to cover the anticipated health care costs for current and retired teachers. But with the new estimates, that cost would soar to $2,087 per student. What's left for funding school programs?

"As health care costs soar, these contracts represent financial time bombs," USA Today editors assert. "They will leave schools with less money to hire teachers, less money for raises, less money for everything."

The California Governor recently tried to put a break on runaway pension and health care entitlements. Even the Terminator's propositions were attacked with endless teacher union ads. His propositions and plans were soundly rejected. No one wants to face the music!

It's time for a little truth telling. We can not sustain the promises that no longer are affordable. We must move from the entitlement society to the ownership society. We should stop talking about automatic retirement and look at retooling and refocusing our careers for sustaining employment options to supplement our own retirement plans.

We should require Americans to have their own pension plans and health care insurance. We require proof of car insurance when people apply for a license. We should require proof of coverage and a pension with every income tax filing. Funds set aside for benefits should be passed on to employees as income. Once everyone is signed up for major medical plans the costs will go down.

It's time to get the government and corporations out of guaranteeing our futures. They are not good stewards of our money, and they are promising benefits that they cannot deliver.

It's time we face the future and take back control before we find out too late that our future is on shaky ground.

(Source: "Schools face 'death spiral,'" USA Today, A-12, February 15, 2006)