Debt free America: Scott Walker, David Goldman, Rush Limbaugh, and Estonia show it is possible
“Think what you do when you run in debt; you give to another power over your liberty.” — Benjamin Franklin
Balanced budgets?? I don’t want no stinking balanced budgets! What a weak, tepid, limp-wristed vision talked about by the people in Washington to maintain the corrupt special-interest jacuzzi they sit in. I prefer a much bolder mindset and vision. I want budgets with surpluses to pay down and eliminate the national debt!
The decisive victory of Scott Walker and the remarkable, yet predictable results of his collective bargaining reforms have revealed a very big piece to how this could be possible. It got me thinking “How much of a percentage of pay do U.S. federal government workers (exempting active military, military veterans, Secret Service, FBI, and CIA) contribute toward their health insurance and retirement plans set up by the government compared to what workers in the private sector have to contribute?” Notice that I didn’t exempt the president, congressmen or any other federal civilian government workforce. It’s about time these high-minded officials remember that they are elected public servants, not kings and queens living in royalty. They can start by having to contributing a portion of their pay to their medical benefits and retirement plan like the rest of the country has to. The exempted entities deserve not having to contribute anything because that should be a hazard benefit rewarded to them. For those liberals in Wisconsin who are trying to challenge Walker’s exemption of police and firefighters because of inequality, this is why Walker exempts them and it should be that way. Okay, so I got off on a tangent there so back to the subject. I wonder how much of an impact it would have on the U.S. budget if the U.S government workforce paid 10-15% of their annual health insurance premium. I wonder what impact on the U.S. budget would happen if the entire U.S. government workforce were switched up from pension plans to 401(k) plans like the voters in San Diego did on Tuesday.
Now I am no expert on all the ins and outs of federal benefits but I would have to guess that this could potentially have an enormously positive effect on getting to balance the budget. This portion of the public sector is HUGE. When I think of all the ways available to balance the budget, this is a very big component to it. Of course we can eliminate wasteful programs and subsidies (see Senator Coburn’s “Back in Black” plan), simplify the tax code so everyone pays taxes, no exceptions. We all know the liberal rhetoric about how the GOP wants to change the tax code to benefit the rich and not the poor is crap. Taxing the rich at 100% would put hardly a dent in our federal deficit and would destroy the job market altogether and thus the revenue that is needed to fund our government. The liberal rhetoric is only to further a liberal politician’s political career, nothing more. We can eliminate deductions that are written to benefit special interests that represent a few and absolve them of any tax liability. We can enact medical malpractice and tort reform, permit health insurance companies to compete across state lines to drive down medical costs, and thus drive down insurance costs.
I have pondered this problem for some time and a solution of seemingly an impossible debt-free America dream to ensure our financial liberty and sovereignty for future generations is actually taking form. There are a lot of pieces to this puzzle but the way to get them all put together without having a negative impact on GDP is the trick. When we talk about cutting the government workforce, we have to remember we are taking away a portion of GDP and tax revenue. So the trick is how do we thread this delicate economic needle? Scott Walker and the cities of San Diego and San Jose, California just gave the blueprint on how to do it:
Make all government employees pay a percentage of their annual health insurance costs and convert them from expensive pension to less expensive individual 401(k) plans.
Mr. Goldman points out — and he’s got plenty of charts. He points out that the biggest net takers (and he’s got the chart data to back this up) are not welfare recipients.
The biggest net takers are the municipal unions, federal and state employees.
Now, this dovetails with… I mean, everything they have comes from taxes. It’s not called “welfare.” It’s called their salaries and their pensions and their health care and their benefits package. But every dime of it comes from taxpayers. Government doesn’t produce anything.Every federal worker, every municipal employee, every union in every state, is who Mr. Goldman says are the biggest net takers…
The biggest net takers are municipal unions. The biggest net payers are owners of property. Because it’s much easier to raise property taxes than it is to enact brand-new taxes. You get your property tax bill, what recourse do you have? It goes up; you have no recourse. Even when your property value is falling, your property taxes are going up, are they not?
So, the biggest net takers are municipal unions and the biggest net payers are property owners. Now, fortunately property owners still significantly outnumber municipal union workers. So the tipping point in this way of looking at things is a little down the road. We’re not quite as close to it. And added to this, property owners are ticked off. Their property values are way down, and yet their taxes are way up. And this could be one of the best things that we have going for us that’s not commented on, not reported on.
This could explain, in part, the origins of the Tea Party.
The Tea Party are property owners. Not all of them, but many of them are. Their home values are plummeting. Property taxes are rising. Everybody… I mean, this Wisconsin recall and the whole contretemps over the past two years is focused on this. Now how many people, largely because of this program (ahem), do you think for the first time really understand how municipal employees are paid? And how many people, for the first time, understand they’re earning more than the people who are paying them?
That whole transcript by Limbaugh on Goldman’s piece is right on target. Read the entire transcript and you’ll figure out just what we have been letting the public sector unions get away with our tax dollars. But it highlights the crux of our exploding deficits:
Once the takers (government employees/public sector) are rewarded more than the producers, our liberty and the life of our country is in mortal danger.
Social Security and Medicare? Yeah, those entitlements are the main drivers of the expense column of our nation’s balance sheet. Personally, the reforms necessary for those programs are difficult since every one starts paying a portion of their wages into them when they become a W-2 employee. But the management of those contributions (a.k.a. privitization) should be delegated to the contributing citizen, not a government bureaucracy. Seriously, if the federal government was your financial and benefits manager and you saw how they manage their own finances, you would fire them and move on. That will be the topic of another post.
MYTH: Austerity doesn’t work
FACT: Austerity does work for a resolute, determined people who keeps the end result in mind. It doesn’t work for a people that is weak, quits, and elects politicians/parties that got them in the mess in the first place, exacerbating and prolonging the misery they are currently in.
Case in point, the country of Estonia:
Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average.
Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece…
Estonia’s achievement is all the more remarkable when you consider that it was one of the countries hardest hit by the global financial crisis. In 2008-2009, its economy shrank by 18 percent. That’s a bigger contraction than Greece has suffered over the past five years…
While spending cuts have triggered strikes, social unrest and the toppling of governments in countries from Ireland to Greece, Estonians have endured some of the harshest austerity measures with barely a murmur. They even re-elected the politicians that imposed them.
And for pure entertainment, Estonia’s president lights up Paul Krugman like a roman candle.
Thread the economic needle by having all non-exempt federal workers pay toward their benefit plan, use austerity by means of spending cuts on programs to get the budget in balance/surplus, and engage in pro-growth policy to get the economic engine roaring to life and use the massive surpluses generated from the exploding revenue to pay off the national debt in a hurry. How about it? Gets me excited just thinking about it.
Debt-free, prosperous, strong America in reach? Absolutely! So long as the people of this nation work their tail off and have the resolve to make it happen through a pro-growth, reduced spending, less invasive government and it is so simple.
In closing, you all know how rough I was in my criticism of Mitt Romney and his many changes in political conviction in the past. But the one thing I see consistent in him is with how he manages his personal finances, how much he gives, and how disciplined he is. Given the way he lives and his experience in the private sector, he is wonderfully qualified to take on this country’s economic challenges than him at this point in our nation’s history.
Debt-free America. What a great vision for Mitt Romney to inspire the American people with.