After a six month hiatus from posting on this blog, the first entry on our return centers around a timely interview with Richard Epstein on income inequality.
The Occupy Wall Street movement and the Obama administration try to avert attention from runaway government spending and expensive regulations as the causes of our prolonged economic malaise by attacking capitalism. They focus on statistics about the growth of income over nearly thirty years that conveniently ends in 2007, right before a downturn that resulted in greater percentage drops in income among the top income earners. They want to tax higher income earners even more when they already carry the bulk of the tax burden and about half of Americans pay no income tax at all.
Richard Epstein, a law professor at New York University, explains why unequal outcomes are essential for motivating people in a free economy. American voters need to understand his argument if we want to change the direction America is headed in the election less than a year from now.
We hope that the eventual Republican presidential nominee will be able to make the case for economic freedom as well as Richard Epstein.
While Republicans in Congress are falling short of their promise to cut at least $100 billion in spending for the rest of the fiscal year, Republican governors are starting to address the root cause of many of our states teetering on becoming the American equivalent of Greece. They are changing unsustainable terms for benefits and pensions of public employees.
Chris Christie of New Jersey has become just about the most popular politician in the country during his first year as governor by pursuing austerity in the state budget. Now, a new crop of governors including Rick Scott in Florida and John Kasich in Ohio are following similar paths. Rick Scott has turned down billions of dollars in federal taxpayer money to subsidize building of a high speed rail line which would ultimately cost the Florida taxpayers billions and for which there is no demonstrated economic need.
But the fastest rising star among the new governors is Scott Walker of Wisconsin whose challenge to public employee unions sparked protests by government employees in Madison, the state capital. All fourteen Democrats in the state senate have fled the state in order to deny Republicans a quorum to vote on Walker’s proposed bill. President Obama has again entered the debate on a state issue by attacking the side voted into office last November and defending public employee unions. Governor Walker’s response to Obama has been that the president should be focused on the deficit in Washington. Effectively he told the president to mind his own business.
Walker is standing by his proposal which still offers terms to public employees more generous than those enjoyed by most employees in the private sector. He also insists that there have to be some limits on the public unions’ collective bargaining rights so that state and local governments can meet the demands of the voters of Wisconsin and eliminate government spending they cannot afford.
We desperately need in Washington the clarity on the issues and resolve to address them that governors like Scott Walker and Chris Christie bring at the state level. Will Republican leaders in Congress join their freshman colleagues who were elected with Tea Party support and draw a firm line on cutting federal spending in every area including entitlements and defense?
New Jersey Governor, Chris Christie, the leading Republican non-candidate for president, today talked at the American Enterprise Institute about “doing the big things.” And he doesn’t mean the phony “investments” in high-speed trains and other nonsense that President Obama advocates. He discusses how both Democrats and Republicans in Washington are too timid to talk about entitlement programs and don’t understand the need to be specific:
Here is the truth that nobody is talking about: You are going to have to raise the retirement age for Social Security! Whoa! I just said it and I am still standing here. I did not vaporize into the carpeting. And I said it. We have to reform Medicare because it costs too much and it is going to bankrupt us. Once again lightening did not come through the windows and strike me dead. And we have to fix Medicaid because it is not only bankrupting the federal government, it is bankrupting every state government. There you go. If we are not honest about these things – on the state level about pensions and benefits and on the federal level about Social Security, Medicare and Medicaid – we are on the path to ruin.
Christie argues that people today are ready to hear the truth and will reward straight talk about what needs to be done. He talks about the need for a leader to come out first and propose a plan, not wait for his opponents to stick out their necks. A leader has to have the spine to take risk. What a contrast to President Obama who said yesterday that he would start talking about entitlement reform if Republicans go first.
Too bad Governor Christie honestly does not want to run for president, at least at this time. The nation needs a leader like Christie rather than the current occupant of the White House.
Click here to watch the full hour-long video of Christie’s talk at the AEI.
But let’s look a little deeper into the Republicans’ action on spending because we have been disappointed before. Last year, Republicans published a pledge to cut discretionary spending to 2008 levels, i.e. before the financial meltdown, TARP, the bailouts, etc. They promised that they would save at least $100 billion.
Over the past week, Republicans have stumbled in keeping that pledge when it comes to spending for the rest of the year. Rather than reducing discretionary spending to 2008 levels, they proposed initially to cut much less not from current spending, but from Obama’s proposed 2011 budget which was never passed. They have since increased the amount, but they still have failed to keep their promise to go back to 2008 levels. Radio talk show host Hugh Hewitt has covered this issue extensively on his show and on his blog.
We hope that the Republican representatives elected with Tea Party support will support Congressman Campbell’s amendments and reject the position of Republicans that have been compromised by Washington’s culture of spending and still don’t get why we sent eighty-seven new Republicans to Congress in November.
Beyond this current test of Republican resolve, Republican will need to take the lead in having what Paul Ryan calls an “adult conversation” with the American people about the long-term spending on so-called non-discretionary items including Social Security and Medicare. No one advocates any cuts for current recipients and those who are close to retirement. But why do we have to wait decades to raise the retirement age? People today live longer and healthier lives. For example, what’s wrong with raising the retirement age to 70 for everyone under the age of 50 today? Paul Ryan’s Roadmap for America’s Future isn’t this aggressive on the retirement age, but it outlines a plan to return America to fiscal sanity avoiding the fate of Greece.
Opinion polls show that most Americans are still in denial about the need for spending cuts. A recent poll shows that most Americans have no idea that we cannot balance the budget without cutting more than foreign aid:
What Republicans need to realize is that the Tea Party movement recognizes the need for across-the-board spending cuts and Americans are more ready than ever for an adult conversation on this topic. The polls reflect a lack of understanding of what makes up our deficit. This is the time for Republicans to inform and educate the public about what needs to be done to achieve what the vast of Americans agrees is necessary in principle.
Americans who want us to return to constitutional limited government have a responsibility to understand that this is our last chance to avoid a financial catastrophe and that this will require not just cuts, but elimination of entire programs. Republicans have an unprecedented opportunity to lead, inform and educate people. If they fail to do so, they will lose support of the Tea Party movement in 2012 and we will most like be faced with a ruinous second term for President Obama.
In leading and being frank about the issue, Republicans take the risk that not enough people will understand the message and will reject them in favor of the Democrats’ fairy tales about a government that caters to everyone. That is a risk worth taking. If they succeed, they will be responsible for what Allen West recently called a “new dawn for America” and they will be the trusted majority party for a generation. If they honestly and effectively advocate limited constitutional government and a majority of Americans reject their message, then they will at least have offered American a final chance to keep the principles the United States was founded on.
If we do nothing to change the current state, a decline of America is inevitable. The American people today face a huge responsibility in prevent this decline. But America needs leaders that can show the way to a new dawn with confidence. Republican must not shrink from the task ahead when they face inevitable lies that they will “hurt the poor” or that they will “cut your Social Security.” Everyone benefits when individual initiative is valued and the government stays out of our lives except where it is absolutely needed. When America prospers, we can be generous with those in need. Will Republican leaders have the backbone to stand up to the demagogues of the Left or will they revert once again to caving to the demands of the Left in the media and the Democrat Party?
Watch what happens and contact your representatives and senators in the coming weeks and months and urge them to stand firm in support of constitutional effective and efficient government and in keeping American free.
Congressman Mike Pence explains his opposition to the tax deal that was passed this week. Pence zooms in on the biggest issue with the deal: tax rates are extended by two years and will rise after that unless Congress acts again. Republicans were split on the tax deal. Pence took the position that we could have gotten a better deal either now or when Republicans take control of Congress. The majority of Republicans voted for the bill anyways. Pence and Senator Jim DeMint were two notable exceptions. They should be applauded for sticking to their principles.