Tuesday, July 08, 2008

America, are we ready to change?

I will begin by making a few statements, lest anyone think I am a heading for the hills to build my log cabin and blow up the only bridge leading back to civilization. The nation we share is by most any measure the best place on this planet to raise a family, start a business, fail, start another business, worship the God of your choice and live free from the tyranny of an oppressive government. Sure, you can make your case for Denmark or some other nation, but if you feel there is a better place to live, why are you still here reading this?

As the late Democratic Senator Daniel Patrick Moynihan once said, “Am I embarrassed to speak for a less than perfect democracy? Not one bit. Find me a better one. Do I suppose there are societies which are free of sin? No, I don't. Do I think ours is, on balance, incomparably the most hopeful set of human relations the world has? Yes, I do.”

As I compose this, I am not writing as a Republican or a conservative, I am writing as a citizen of these United States and will try to keep partisanship to a minimum however if I gore your ox, try not to take it personally.

As this Presidential election season begins in earnest, I would like you to take a step back, forget about the bumper stickers on your car and look at where, we as a nation, are heading. The citizens of this country have made up their minds that government, in all its forms, local, State and federal should fix whatever they think is wrong with our nation, our towns, and our lives.

Housing bubble crash? the government should bail out the lenders and the borrowers. Prescription drugs costing you too much? the government should pay for drug coverage. Childhood obesity? the government should pay for programs to tell kids to turn off the TV and go outside. A museum to commemorate the anniversary of Woodstock? the government should pay for that too.

We seem to have this idea that government is immune to economic cycles, and that 'the government' we want to fix everything is somehow different than 'the government' we deal with, and are disappointed in everyday.

Have you ever experienced a time in your life where you had a large, unexpected expense come up? What about a time when your work hours were cut back or heaven forbid, you lost your job, did you continue to spend more money that you did the month before? I didn’t think so. You tightened your belt, you changed they way you spent your money and hopefully you had a little reserve that you could tap into until you returned to a more stable financial situation. You would not be eating out every night and trading in your two-year old car for a more expensive one. At both the State and federal levels, that is exactly what our government has been doing. When times are good, spend more money, when times are bad, spend more money.

I know those on the left will point to the costs of the war in Iraq and Afghanistan as examples of wasteful spending, money that should have gone to this government program or that program, but that misses the point. The idea is not where that money should have been spent; the question is what are we spending our money on and why are we spending so much on everything?

To those of you on the right, the small government ideals of the Republican revolution were tossed by the wayside as the GOP turned its back on its voters and spent money not only on the war, but expanded the size and role of government to a degree not seen since LBJ. It is shameful that those in Congress, talk at townhall meetings about cutting spending and fiscal responsibility, then fly back to Washington and vote to spend a few billion here and a few more billion there. Before you Democrats get too exited, there is a reason the Democratically controlled congress now has an approval rating of 9%, the lowest in history. The Democrats want to spend even more than Republicans do.

As a citizen, and as a taxpayer, you don’t need to watch CSPAN every waking hour of the day to understand the subtleties of monetary policy or keep up with the latest legislation, you need to know a few key facts to give you a perspective.

We are going broke. Not today, not next year, but just like an adjustable rate mortgage that keeps adjusting upwards until it completely overtakes your income, the interest on our debt and the entitlements we are promising will bankrupt our nation in twenty to thirty years. The interest we pay on our national debt along with these entitlements are what they call non-discretionary spending, simply stated, the bills we have to pay. By the year 2030, non-discretionary spending will take every penny of revenue the federal government collects from us, the taxpayers. There will no money for education, transportation, defense, nothing.

Before you roll your eyes at another doomsday scenario that will never come true, this is not a batch of doctored data or Al Gore’s climate models that can't stand up to any type of scrutiny, this is demographic fact. The numbers are the numbers, we have X amount of Baby Boomers in the country who are starting to retire, and as they grow older they will use more and more government services. Medicare, Medicaid and Social Security, all these programs will grow as America tries to digest this enormous amount of aging people.

So how do we fix it? First, you don’t add to the problem. When you hear politicians talk about ‘Universal Healthcare’ or ‘Single Payer Healthcare’ understand what they are talking about, its socialized medicine. They are talking about adding another huge amount of non-discretionary spending to the books. If you believe the fantasy these costs will be offset by getting the uninsured preventative care that will save money long term, you are not really paying attention. Lets say we ‘give’ folks such great health care, they all live into their 80s and 90s, its great for them. As they watch Jeopardy reruns in a full care nursing home, a young couple trying to raise a family has to pay the tax burden to keep them there at $6,000 a month, for a decade or two. If you like Sweden's 60% tax rate, you'll love universal healthcare.

No one likes a health insurance company, that is until you have a major illness, or a bus hits you and the insurance company pay the six-figure bill from the hospital. Right then, they are pretty darn likable. There are reasons why people who have ‘free healthcare’ in their own country flock here for life-saving operations and medicine, our system is based on performance. When was the last time a government agency took over any private sector industry and performed that job better and cheaper? If you think health care is expensive now, wait until it is free.

There are steps we can take to avoid this disaster, but I'm not sure if we are ready to take them.

Part one of two.

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